Ep. 28 Going Into Business With My Best Friend: Meli's Cookies

Ep. 28 Going Into Business With My Best Friend: Meli's Cookies

Ep. 28 Going Into Business With My Best Friend: Meli's Cookies


On this week’s episode of The Ripcord Moment, Joe Seetoo invites best friends and co-founders of Meli’s Cookies, Melissa Blue, and Melissa Mehall, to discuss how they started their gluten-free cookie company that now sells products in over 9,000 stores across the country.

Melissa and Melissa have been friends for 30 years. They say prioritizing their friendship over the company, finding mentors to seek advice from when experiencing tension, and realizing what areas are appropriate to compromise on have been critical for being able to maintain the closeness of their relationship while being business partners.

Melissa and Melissa explain that the pandemic had both positive and negative effects on their company. When the pandemic ensued, people began baking more at home, so sales went up. However, in-person meetings with buyers transitioned into Zoom sessions, and many buyer meetings have stayed remote, making it harder to sell their product since buyers cannot taste it.  A strategy that has helped Meli’s Cookies create more connections and find buyers is attending food shows and conventions. They also recommend business owners who may be minority-owned or women-owned to become certified, as this can potentially help them compete for federal contracts and gain recognition from stores who are looking to support minority and women-owned brands.

Melissa and Melissa also suggest listeners to consider raising funds earlier and working with people who have experience in their niche or industry. When starting a business from the ground up, you may not have time to train people to learn about the field. They say they have benefited the most from working with experts, mentors, and employees who are familiar with the food industry.

Check out Meli's Cookies here.

Watch previous episodes here:

Ep. 27 Bootstrapping My Liquor Brand & Starting a Distillery

Ep. 26 Building Trust and Finding Community as a NextGen Business Owner

Welcome to The Ripcord Moment. I'm your host, Joe Seetoo. Today, we're joined by Melissa Blue and Melissa Hall, and they are the co-founders and best friends that started Meli’s Monster Cookies. They're a gluten free company with a cookie mix that is now in over 9000 stores, including Walmart and Target. And it was a family recipe, I understand. Melissa Blue, from your side of the family that you decided to go ahead and create a business model around this, because I believe it's one of your children or somebody in your family had gluten allergies and so you've now taken this idea and transformed it into a powerhouse of a company. So I'm excited to have both of you here with us today.

We're excited to be here. Thank you for having us.

Well, so maybe we could start with the dynamic, which is you guys have been very close friends for something like 30 years. And so, you know, many entrepreneurs go into business maybe with family or friends, and it doesn't always necessarily work out well, but it seems like you guys have been able to navigate that particular dynamic of the relationship.

And so what sort of tips would you put out there to others who are considering going down this path that the two of you have gone down?

Well, I'll take this one. I think we have, you know, some different things that have made it a successful business with our longstanding friendship. And I think some of the key things that have been important is that we have similar work ethics.

And I think, you know, since we've been best friends since we were eight years old, we've been able to watch each other's work ethics in school or whether we were cheering on a team or anything like that that we both had just in our motivation. Because I think as a friendship, it would be hard if one wasn't working or one wasn't the other.

But so starting off with that, that was similar work, hard work ethics. And then I think something that's benefited Melissa and I is that we have different skill sets. She is more math minded and I'm more like language based. And so it's nice for us at times to be able to say, okay, you take this or I'll read all the contracts or all of that.

And so we don't really get into each other's business. And it's nice to have someone say, I totally trust how you're going to handle that. And so that I think has really been a good thing for us. And then I think I said from the very beginning we had the same vision and I don't know where we came up with it, but we were wanting to be in every grocery store in the nation so we've almost accomplished our goal.

I think she covered a lot of it. I think having an inherent trust in your partner, knowing that, you know, you can always trust what they're doing and they're always trusting what you're doing and also being able to give and take. Like sometimes if Melissa has a strong opinion about something, I will give way and vice versa.

Just really putting the relationship above the business I think is important. And we always said that from the beginning. If we had to walk away from Meli’s to save a friendship, we would.

Well, do you guys have a rule of thumb where, you know, how do you handle if there is? I imagine there are times where there's a bit of conflict or tension or whatever it is.

I mean, what's your secret sauce on resolving those those issues so you can stick true to that, that promise that you made early on in the relationship and the business relationship? When I look back on that, a lot of times we look to outside mentors to help us kind of guide us and inform us on different things.

And then recently we were working on a decision and both of us were kind of not, no, We didn't know exactly what to do. So we looked outside of ourselves to get more information to help us make better, clearer decisions. Don't you think, Melissa? Yeah, I mean, that's a good, you know, And if we ever get to compromise, let's do that versus that. Next time we'll try a different way. So I think we've just come up with creative solutions. If we have disagreements, which is honestly shockingly been pretty rare. So we tend to have the same background and thoughts and oftentimes really are on the same page, which has been. And then as she said earlier, like I can tell when she cares more or she can tell if I care more about something and I'll just say you care, that's fine.

If I you know, I love you and I care more about you being that you really care about this and I'll just do it. S

o it really has very pleasantly worked out and so you talk about the emotional or the friendship relational issue, but let's talk about the logistics issue. One of you is in Austin. One of you is in Fort Worth, Texas, is a big state.

How has navigating just the issues of not being in the same place physically with, you know, with a newer company, a startup been?

You know, I think it was nice. We started this company and for the first five years, both of us had young children and we grew it slowly, purposely one we were learning the business and two, we didn't have a location.

We were in different cities, but it really played to our advantage in the beginning because Melissa lived in the Dallas-Fort Worth area so she could work those networks. And I lived in Austin, which is a huge consumer product, the town, and so I could meet people here and work the grocery circuit here. So we kind of got to work two really large areas in Texas without having to travel a lot.

And then really we like to say we were virtual before it was cool. So the pandemic has provided even further capabilities. We do a lot more zooming with each other. We used to not do that and we used to travel a lot so we would see each other at least once or twice a month. So I don't know, it just kind of worked.

You kind of you just made it work with technology these days, it really hasn't been. The barrier that might have otherwise. Right. Would have been in maybe prior generations. Right. Melissa Mehall, anything you want to add to that from your perspective?

No, I mean, it's just laughable because so many people told us prior to the pandemic that we wouldn't ever be taken seriously as a real company if we didn't have a headquarters and we were just like, We don't believe that. And then because we have manufacturers, we're not manufacturing it. So in so much of our business is visiting those places and watching those relationships and doing, you know, the buyers. So we kind of had to be real proud of ourselves when we weren't carrying an overhead during the pandemic. So a business that we didn't need. So that that must have yeah, we were like, Oh, that's great.

So maybe we can pivot to the business struggles. And let's talk a little bit about the pandemic. I mean, you've pointed out that from the one hand, because you didn't have a large overhead, that certainly made you more nimble. You didn't have the same cash burn that other companies would have at a startup stage. But beyond that,  what are some of the other effects that you had to navigate because of the pandemic?

I think, you know, there were positives and negatives as there were, you know, for most businesses during it. The positive was that we had just set all those cookie mixes in Walmart, Target and Kroger in the fall of 2019. So then, when everything was shut down and everyone was at home baking, Meli's was there on the shelves nationally when Betty Crocker and Pillsbury were out of stock, Meli's was there.

So we got a lot of trial and then we got to bring a lot of happiness and goodness to people, give them something to do, baking wise. So that was good for us in the pandemic. But I think, you know, things that have been harder is that in-person meetings went away with buyers and that is harder for us to it.

We always are going to sell the cookies better If we can go to headquarters, sit with them, have them taste the cookies, and it just doesn't translate over to zoom at all. And sadly, Melissa and I are saying, you know, we've just been watching now that we're a year or so out, there's buyers who've gotten very comfortable doing the zooming and it's easier on them.

And so a lot of them are not going back. So that has not been a plus for us after the pandemic and it hasn't really righted itself yet. Melissa, what am I missing there? Otherwise, we were fortunate that most know our products are all USA made. All of our packaging came from the U.S. so we didn't really have any struggles getting products made in the pandemic, which I know other people are trying to get products and things overseas.

That was difficult. So we were really lucky that that was our situation. And the sales were great. We didn't have a lot of online presence and that maybe we missed a little bit of that. But other than that, yeah, people were at home baking and so it was great. So it sounds like the fact you didn't have offshore supply chain issues to deal with, the fact you didn't have space rent overhead when the office is shut down, both of those factors played materially to your advantage at this stage of the company's future, for sure.

With regard to sort of just the learning curve in general, what's that been like?

And never having started a business it was it's it has been and continues to be a long learning curve. I think. And Melissa and I obviously had no background in this in the food space. I like to tell my friends that I never thought I would know so much about grocery stores, but I do. And I think it played to our advantage in the beginning because we didn't do things the traditional ways. We didn't necessarily hire a brokerage team and do all that. We would take samples directly to stores headquarters and just drop them off and try to get a meeting. So we were really scrappy.

So that only worked so long and we got plenty of distribution with that. But we definitely have learned that the business like distribution, was a huge piece that we didn't understand at the beginning how to get that done well, and we've learned a lot from our co-packers that they have taught us the business and what to do, what not to do.

There's so many ins and outs between sales and promotional items and distribution and supply chain managing a team, you know, I mean, the list could go on and all the things we've learned and we've made mistakes along the way, of course, and we've had some wonderful mentors that have helped us along the way. So I would say it's just been a continual learning curve that we're still on the trajectory to learn more as we grow.

We just did a SKU with a Boston based incubator, and in 2020, when everything was kind of shut down in the fall, we thought, Well, we have time. And so we did that and we came out of that with a lot of really great new initiatives from Meli’s with strategic changes and some packaging updates. And we did our first fundraiser after that.

So we really learned a lot through that program.

Co-packing, like what what is that to you know, to some of us who aren't in the food business, that's very common in food.

It's just co-manufacturing is probably the right term to make sense. And so they manufacture the goods under our recipe and under our direction.

It works like from a purchase order, you know we send purchase orders they have our mix ingredients and all that stuff and then they make it for us and then it gets distributed from there. But in food that there that's just owning your own facility and from the, you know, federal guidelines standpoint and employees and all of that, it's just a whole other business.

And so we from the very beginning made the strategic decision that we were never going to own our own facility. And so so in in essence, in some way, you look at our business and it's about a recipe and about branding and awareness and distribution. So let's maybe fast forward to the partnership. I believe it's HEB, if I remember correctly, that in many ways I think sort of catapulted you to the next level around 2017.

What did you know? How did that come about? What is that? What did that look like? How did that change your entire business model? Well, it was just a really fortunate experience. And the our nine ounce frozen cookies were in H-E-B and the dry mix buyer loved our cookies. And so he came to us and said, The wife and I are obsessed with these cookies, and I'm looking for some new brands and innovative stuff in that cookie mix space.

Would you make the cookie mix out of your recipe? And so we're not even, we're not looking to expand. We're thinking about that. So, you know, essentially they just gave us this fantastic idea and then we worked with them to use their own co-packer, which just was just aligned in so many good ways because so a large part of if you are manufacturing, is finding a really good company back here who has all the different certifications that you need and also has the scale and capacity if you grow quickly, which we did in this business.

And so it was awesome. We went into stores exclusively in 2018 and then then we were able to launch nationwide with those cookie mixes in 2019 and now it's 90% of our business. So it really was a game changer for us. Melissa, from your perspective, were there any, I guess, drawbacks or, you know, what's the right word, I guess, hesitation from either of you in when this relationship started to, I guess, transpire, Was it almost like, is this too good to be true?

I don't know, even imposter syndrome? Or are you guys, like, over the moon? Like we're absolutely doing this? Like, what was that like?

Yeah, absolutely. There was no hesitation. It was not a guarantee that the buyer was like, I will help you, I will guide you. But I still may say no. At the end of the review time.

So it was like that ourselves. I was totally yes. So we went down this whole I mean, there was a lot of work and a lot of time because you have to design a box and get the recipe and the price. And it's just a big process to figure everything out. Thankfully, he did this. And so, yeah, it's been a great part of our business and it's just given us the capability.

I think that set in the grocery store is sleepy and 90% of it is, you know, from the 1920s. It's just they're kind of older. And so I think we've really disrupted that set with a new innovative better for you cookie that also tastes amazing. So I think it's great in terms of like, you know, names that the audience would know and, you know, sort of everyday people like myself.

So Target and Walmart right now, what's it been like working with, you know, two Fortune 500 companies? We have behemoth companies that have, you know, global presence. Honestly, it's been wonderful. The buyers on Target, at Kroger, at Walmart, there really have been wonderful people. Great to work with, very good communicators and it's helped. We are women owners, so that's been a nice thing.

That's something that all of those companies really try to buy into and support. So I think there's a lot of rumor mill about all kinds of people, you know, the bigger companies, but we've really had fantastic experiences with our buyers. Also, we're certified women. And so we are certified with like the largest, most recognized body certifying body out there of minority owned companies. And these big companies have certain initiatives that allow us to get paid quicker, which is great.

And others, like when we first went into Walmart, we went in under a program that she said, I'm only taking women owned and USA made and we fit both of those. So often they are following some sort of initiatives and that what they did, their key core holdings to their company, that they want to make sure that they recognize.

And Meli's being certified does fit into that. A lot of times this might I didn't realize in the case in our body for certification relations where, you know, maybe talk to us a little bit about what that process is like how one goes about doing that because I think you're hitting on something so incredibly valuable. Well, you just had to apply.

And then they do an interview process and they get all I mean, my goodness, how many documents, we gave them like 40 documents. It was a ton. I mean, very definitely high due diligence. And then they would have typically done an onsite visit to make sure that we were actually legitimate. But since we were in them, it was a couple of years ago.

We zoomed in, but it was not an easy process just because there are so many documents required. And then it renews from year to year, which is pretty quick. And we've been we've been certified by other bodies that have like a six year term on it. But this one, it's We Bank, and it's the largest women owned symbol that y'all would all recognize through goods.

So it is it is not specifically related to food, but it is consumer goods. Yes. Yes. It may be all businesses. I don't really know. And definitely if you're minority owned or women owned or anything under that umbrella, I would definitely highly suggest you recognize that whatever industry you're in, because I think people are just trying to diversify and make sure everybody is included.

You know, it doesn't mean you're going to get in because of it, but it's just a piece of the puzzle that might be helpful. You know, great, great information both of you are sharing. And I'm assuming with regard to the documentation, it's things like corporate documents, tax returns is the typical stuff, like even due diligence, due diligence on anything else related to, again, being a women owned more of a startup, even though you've been around, I think ten years plus compared to like these big firms like that, you learned along the way with the targets in the Walmart that would be helpful for others to know about if they're going to be working with, partnering with big companies like that. I think we have learned that it's helpful that we have a broker for both of those. And so having a broker that knows the ins and outs of their systems, every store, every group, every company has its own internal system that you have to learn. And so it is worth having. A broker basically helps through sales calls that they have weekly reporting.

Do I need to define what a broker is? Well, I guess it wasn't somebody who facilitated the introduction, like to allow you to be able to get your product into those stores. They can do that. But we have typically found a broker post getting into the store. Melissa and I've been to

That is, there's these giant food shows and, you know, every industry has a convention, you know, the same kind of thing. And so we've actually gotten a lot of business from going to the food shows. We meet the buyer, we meet a buyer of a different category that introduces us to the buyer. So often we have found our brokers post getting into the stores, but it's just helpful with all the paperwork, all the ins and outs.

Like I said, of like Walmart's huge and they have their own huge system that, you know, to learn it all for us and to do that for every it just isn't as super non efficient. So they have several clients and you know, they do have lots of different brands. And I think it's unique, you know, that we are a smaller brand and we're not Betty Crocker or Pillsbury.

And I do think, you know, with these food shows, when these target buyers or Walmart buyers find as they kind of feel like they found something, you know, authentic, I guess they're cool, you know? And so that's why we've been able to get business without brokers. And just because I think we're a little bit like in a niche that they, you know, and we taste great.

So and I think that may be unusual. People might think that the brokers go out and get the business, but vast majority of the time we bring the business to them. So but they're very highly critical of them. Yeah.

So let's, you know, let's let's maybe look forward to 2023, 2024. What are some of the goals that you have on a go forward, some of the growing pains you're working through right now?

So we 2022 was real for us and the margins and the inflation, the cost of goods was difficult, but we have made it through and we've made a lot of changes for 2023. So we're really excited about that, that we have made some strategic decisions. And just based on that, we kind of we're waiting things out, hoping things would right the ship quicker, but it still didn't and hasn't.

And so we've had to make some strategic changes internally going forward. And so now those are starting to hit and we're really excited about the future of what we have had. So I think in 2022 we attempted to really hit the DTC space and do more online sales. But being a food company and already having a nationwide presence, we just thought we're not going to spend any more time or resources on that.

We're going to hone in on where we are. We are in the retail stores. People are shopping all the time at the grocery stores now. That's what we're going to do. Our business and that's what we're going to grow. And we you know, we're excited about 2023 for a few reasons. One, we have launched a new product, the Mini Cookie.

It's a snacking item. And so our our goal is to grow that part of the business. The mixes are fantastic. It's a slower category. It's probably people buy 1 to 2 a month versus a snack. They buy three or four times. So we're really trying to really bump up the revenues by introducing this new mini cookie in the second category.

So we're excited about that.

Oh, that sounds great. I can't wait to follow your success. Well, you know, I call this The Ripcord Moment because I believe when owners think about sort of their succession event, whether it's just business success in general or ultimately some sort of transaction, a sale to a third party or a family, you know, transferring to a family member, they have to be prepared for that transaction.

And then that sort of events or I ask our guests to give to sort of call to action items that they almost wish they knew earlier in their stays to ramp up their success quicker. And so if you were talking to Melissa and Melissa a few years ago, what would be those two action items you would impart to, you know, your former selves or to younger women entrepreneurs that are contemplating some sort of business?

Well, one, I would say if you went back and told us, we probably would have raised funds earlier. We waited a long time and I would have raised funds to build a team and I would have built a team or I would I would tell someone to build a team with people who are familiar with the space, who have done it before and are experts in the field that you're in.

So if you're in the consumer product industry with food, they'll find a marketing person who's done it before and knows what they're doing. So I would say build a team of experts industry specific. Yes. And this right, because we have made the mistake of hiring people thinking they're been in this industry, but they're not the exact right niche.

But we can learn or they can learn. We can teach them. We just don't have time for that. Like this industry goes really quickly and there's just not time just for someone to learn it. It's for us to grow as quickly as we wanted. We need people who have done it before. Yeah, okay. And maybe one other. And yeah, I feel like I kind of went off our panel, but I think the second one would be to build a plan and try to stick to the plan, but also really use your network around you.

I think finding mentors, building a, you know, even advisory board of people and that might be helpful. So I think having building that support network around you again, with people who know that industry. So especially since if you don't have the experience which a lot of people when they start a business down. So I think finding that group and taking their advice, maybe go with your gut instinct sometimes, but also taking their advice and heeding it as you plan for the future.

But those are two great action items for owners to consider. Finding industry experts, perhaps raising money a little sooner before they need it. Right. It's always good to have a few extra dollars in the bank to help with those growth strategies and unforeseen inflation expenses, ceiling. Yes. Well, Melissa and Melissa, thank you both so much for sharing your story.

Just being candid around, you know, what were some of the struggles you had really enjoyed our conversation and to go and sign off. This is Joe from The Ripcord Moment, we'll see you next time.