86 Rejections But Jay-Z Ain’t 1: From Idea to Multi-million Dollar Investment
After discovering her daughter’s severe food allergies, Denise Woodard struggled to find crave-worthy treats her daughter could eat. So she baked them instead. And so began Partake Foods, a company that sells gluten-free, vegan, non-GMO cookies free of the top allergens.
In this episode of Shopify Masters, Denise shares her business journey of building a consumer packaged foods company from scratch and how she worked through many seemingly impossible hurdles. From finding an allergen-free facility to facing over 80 rejections from investors, we dig into the realities of challenging industry norms.
For the full transcript of this episode, click here.
Business built on maternal problem solving
Shuang: I love to kick off the show on how this all started because of your daughter Vivienne. Tell us why it was so important for you to solve the problem of food allergies by starting Partake Foods.
Denise: Vivienne’s five now, but shortly after her first birthday, we had a really big scare with food allergies, and we learned that she’s allergic to most tree nuts, eggs, corn, and bananas. Partake was born out of my frustration with the products that existed. Our nanny, Martha, who has some equity in the company, was like, “Your one-year-old has the most boring diet I’ve ever seen,” and I started to explain to her why. The products that I was finding did not meet my nutritional standards. I found that the gluten-free and vegan options that I expected to be healthier were often full of artificial ingredients and more sugar than their full-of-allergens counterparts. Then from a taste perspective, what I could find that met my nutritional needs, my daughter would refuse to eat.
I started to realize how so many of her most fond childhood memories would involve food, whether it was playdates or birthday parties, or holiday celebrations. When she wasn’t able to participate, it would probably wear on her self-confidence and create lots of feelings of anxiety and isolation around food. While I was thankful for the solutions that existed for being safe, I didn’t think they were particularly cool. They were food allergy brands that people with food allergies ate, and I dreamed of a brand that made products that tasted good, that had ingredients I felt good about sharing with my family, but was cool enough that someone without food allergies would choose to also eat it. When I couldn’t find it, I left my career at Coca-Cola to start Partake.
“I dreamed of a brand that made products that tasted good, that had ingredients I felt good about sharing with my family, but was cool enough that someone without food allergies would choose to also eat it.”
Shuang: I think anyone hearing this concept would agree that this is such a cool concept, but it’s also a tough one to undertake. How do you begin with recipes and developing all these cookies?
Denise: Martha and I went to Whole Foods and spent hundreds of dollars and failed horribly. Then I realized why so many of the products that exist on the market have the same ingredients. It’s tough to make stuff that tastes good, that has good for you ingredients, but also avoids the top eight allergens. Thanks to a LinkedIn cold call, I found a product developer who was willing to get into the kitchen with me and work closely with me and bring my vision to life.
Shuang: I think many founders find it hard to either ask for help or find a partner. Was there a key moment when you realized, “You know what? This is an area where I need some expert advice, and I need to find someone who has complementary skills.”
Denise: Initially, when I had the idea, I was a little leery of telling other people. Someone I chatted with when I was still working full time at Coca-Cola, I was telling them, “I have this idea, but I don’t know if I want to share it with people.” They gave the example of MySpace and Facebook. They were like, “In theory, they’re very similar ideas, and one exists now, and one doesn’t,” and talked about how successful businesses were built off of execution. He said, “I wouldn’t worry about people stealing your idea. You should shout it from the mountains and tell as many people as possible because you don’t know where your greatest partner or biggest ally will come from.” I took that advice to heart and still follow it. I’m the first to admit there’s so much I don’t know, and so rather than spin my wheels, I just go out and look for help whenever I can.
Shuang: Once you had your partner, what were some of the first steps you guys took to turn those recipes into actual products?
Denise: The next big challenge we faced was where to make the products because there was no point in making an allergy-friendly product if you were going to make it in a facility that had a bunch of allergens in it. There’s only a couple, literally like one to two in the country, manufacturers that can make cookies that are top eight allergen-free facilities, and they typically don’t work with small startups. So that was another cold, a cold email and lots of begging and pleading and sharing my business plan. Thankfully, the contract manufacturer that we dreamed of working with agreed to give us a trial run. We still work with them today, and they’ve been a phenomenal partner. First, it was how do we make the product, and then the next big challenge was where do we make the product.
Managing retail and press relationships as a solopreneur
Shuang: At which point did you leave your corporate career to pursue this full time?
Denise: Very early in the journey, a couple of weeks in, we were in line at the zoo on a Saturday, and I was telling my husband, “I think this could turn into something.” The person who was in line in front of us turned around and said, “It sounds like you have a great idea. There’s a small business pitch competition for New Jersey businesses called the Start Something Challenge. You should enter.” That was a Saturday, and the applications closed Monday evening. I ended up applying, and we ended up winning with just an idea.
That was fantastic because it gave me some validation. It also gave us some local press. The last thing I needed was my boss to see me on TV saying, “Hey, I have this allergy-friendly snack company,” and so it forced me to tell my employer pretty early on what I was doing. While they were supportive, they were also like, “There will be a conflict of interest if you’re selling products to the same retailers you’re selling beverages to, so once you have a product, you’ve got to hit the road.” I think it was a blessing in disguise because I probably would have tried to turn Partake into a side hustle and not put my full energy into it just because I was very nervous to take the big leap.
Shuang: Once you have the product, how do you start getting people to carry it and develop those retailer relationships?
Denise: When we first launched Partake in August of 2017, we were self-funded outside of a small Kickstarter and self-distributed. It was me keeping our products at a climate-controlled storage unit where I live in Jersey City. I would show up every morning and fill up the back of my SUV and drive to natural food stores in New Jersey and New York. I would go in with my sell sheet, book bag, and samples, telling the retailer what I was doing and why I was doing it. That’s how we got into our first stores. My goal was to get into 50 stores by the end of the year and do live demos at each store to understand what people liked about our product, what they didn’t like, what the reception was. For the first few months, it was just boots on the ground and me going into the stores one by one.
Shuang: After you start getting traction, there are so many media outlets that have featured you. How did you go about managing those relationships and handling the press?
Denise: From a press perspective, we’re really lucky now to work with a PR freelancer who’s been with us for the past year, and she helps support us on that. Prior to that, it was just me handling it. I was the only full-time employee at Partake until January 2020. We had fantastic outsource partners that we were working with for multiple functional areas from accounting to social media, but it was just me fielding them and me just going out and telling my story.
Shuang: How do you balance motherhood and entrepreneurship to ensure that both aspects of your life are progressing and intertwining in a healthy way?
Denise: I think COVID’s definitely thrown a wrench into that because we don’t have childcare, and my daughter was at home with us for months, and my husband also works. So that was an interesting balance, but in our normal life, it’s just really integrating the two. Some days that means me waking up super early to work on Partake so that I can take time to make my daughter breakfast, take her to school, and attend any school programs she has. Other times that means maybe we have to call a sitter because it’s a really busy day and I have a board meeting. I think it’s just prioritizing the two.
My daughter’s super involved in the business. In a non-COVID world, she works trade shows with us on the weekend. She’s coming into stores with me to deliver products. She has seen the grind and is super into it and loves the fact that literally because of her food allergies, we now have a cookie company.
From 86 “no’s” to a multi-million dollar “yes”
Shuang: What are some of the milestones that you celebrated?
Denise: From a milestone perspective, I think some of the early ones were seeing our product on a store shelf for the first time, and then it saw our product on the store shelves of a Whole Foods for the first time, which was a surreal moment. In June of 2019, I became the first Black woman to raise more than a million dollars for a packaged food or beverage company, and our investment was led by Jay-Z’s Marcy Venture Partners, so that was earth-shatteringly huge in my world. Then this summer has just been a whirlwind. We were on The Today Show, and I appeared in the Jay-Z and Pharrell video for Entrepreneur. So we’ve had a lot of great stuff come our way.
“I became the first Black woman to raise more than a million dollars for a packaged food or beverage company, and our investment was led by Jay-Z’s Marcy Venture Partners, so that was earth-shatteringly huge in my world.”
Then it’s allowed us to do a lot of stuff that I’m very proud of. We partner with a nonprofit called The Food Equality Initiative. They provide food to food-insecure families that manage food allergies. The founder, Emily Brown, her family was experiencing food insecurity and her kids have food allergies. They went to their local food bank, and there were literally two items that her kids could safely eat, and that’s just not okay. In partnering with them as our businesses grew, we fed thousands of families, which is something I’m so proud of and excited about.
“About a year after launching, we went into a region of Whole Foods and Wegmans, and the business started to get more expensive to run. I started dipping into my 401k, I ended up selling my engagement ring.”
Shuang: What are some of the hurdles that turned out to be lessons along the way?
Denise: There’s definitely been lots and lots of hurdles along the way, particularly around raising capital. Initially, the business was self-funded, and then we, about a year after launching, we went into a region of Whole Foods and Wegmans, and the business started to get more expensive to run, and I started dipping into my 401k. I ended up selling my engagement ring. We were working to raise a friends and family round, but I’m the first in my family to go to college. I don’t have many accredited investors in my family. So as the money came in dribs and drabs, we were just fighting to keep the business going. I learned a lot of resilience and grit at that point.Then, as we were able to get that done, we went out and tried to raise a seed round of funding. I have a spreadsheet that I still have on my desktop that has 86 nos, of, “It’s too early. I don’t think the market’s big enough.” What I learned was everything happens the way that it’s supposed to, and in time, if you continue to stay true to your mission and your values of who you are as a person, who you are as a company, I couldn’t dream of better partners in terms of the investors that we currently have. But if you had told me this is what was going to happen while I was getting those nos day after day, after day, I would have never believed you.
Shuang: For those investors that you had to face nos from and go through those pitch meetings, what is it that keeps you going forward?
Denise: I think there’s a couple of things. One is my daughter. She’s only five, but she understands what’s going on. To look her in the eyes and tell her that this company I started because I love you so much and I want something better for you, I quit because people told me no, I just couldn’t do that. Then looking at other people like her, other women, other people of color, and knowing how dismal the statistics are and knowing how close we are in terms of having a breakthrough for our brand, in terms of the traction that we’re getting, and for me to not give it everything I have to keep going, it’s just not something I would be comfortable with.
Sharing the spotlight with other BIPOC and female-owned businesses
Shuang: Speaking of organizations that you support, there’s also a lot of sharing your platform and offering a spotlight on other business owners who are Black, Indigenous, and people of color. Tell us why it’s important for you to share the stage and offer a voice for other business owners.
Denise: I feel like there’s no benefit to my success if I can’t make other people successful, other people who don’t have the platform or the privilege that we do. I’m just such a strong believer in lifting as you climb. There’s so many people, women, men, white, Black, who poured so much of their social capital and investors who believed in me when we didn’t have a ton of traction, successful business owners who were willing to talk to me when I know they have a calendar full of events, and I feel like if I’m not willing to do the same thing, that’s just not right. I feel a very strong responsibility and pressure to support women, to support people of color, to support entrepreneurs out there who are doing the work day in and day out to make their dream a reality.
Shuang: Were you nervous during the outbreak, and how did you navigate this as a business owner?
Denise: One of the things I was most concerned about was making sure our manufacturing partners and our team members stayed safe and healthy. Thankfully, everyone was safe and healthy throughout the entire period. We also saw a lot of pantry loading. Particularly with an allergy-friendly product, I think anytime there’s a mass rush to the grocery store, people with food allergies wonder will there be enough left for me because if there’s only a couple of safe things you can eat, you want to make sure you’ve stocked up. We definitely saw the pantry loading on our website, but then as different areas started to close down, we started to see a slowdown in velocity. So we started to think about how do we nurture our customer, how do we remind them that we’re here so that they’ll continue to purchase?Then there was a big change in our business in terms of when George Floyd was killed. There was a larger amplification on Black-owned companies and a larger conversation about race in America, which created another surge of demand for our products.
Shuang: When you get all this attention and have exposure to these new consumers, what is important to you during the next stage of change, both for retailers and consumers?
Denise: I think consumers can continue to vote with their wallets. I think as a brand and a business, it’s my responsibility. Earlier, you mentioned lifting up other brands and how we’re amplifying other brands, and that’s one of the major reasons that we’re doing it because while I’m excited about the attention we’ve gotten, it’s frustrating and saddening that we are one of the few. I wish there were other brands to share the spotlight. I’m hoping that this time creates that opportunity. I hope that retailers and investors put their money where their social media and start to make quantifiable decisions and set metrics around what types of programming and change they’re going to make happen so that the numbers do change.
“While I’m excited about the attention we’ve gotten, it’s frustrating and saddening that we are one of the few. I wish there were other brands to share the spotlight.”
Shuang: Definitely. It takes a lot of small steps, but those steps have to start in order for a bigger picture of a change in movement. I appreciate what you guys are doing and what you’re doing in the aspects of showcasing other businesses as well.
Tools and tips for scaling a consumer packaged goods company
Shuang: At which point did you realize that you need to step back a little bit and start expanding your team and give away the control a little bit?
Denise: I’m still learning that as we go. I think we’re still a pretty lean, mean team. We have three full-time employees, so I’m still very much hands-on in the business, but I’m working hard to work on the business and not in the business and just work on the strategic vision I have for the company. I believe that Partake has the potential to be a platform brand that makes a lot of products outside of just cookies, and so working to make that a reality and coming out and chatting with folks and just really spreading what we’re doing at Partake, I think is so important. As I spend more time doing that, we do need to build out the team, and so we’re actually in the process of doubling the team right now, which I’m super excited about.
Shuang: I love that, working on the business, not in the business. What about on the marketing front? At which point did you start thinking about campaigns and spending more in ad dollars?
Denise: I think it’s started to turn on this year. This year we launched Target nationally, we expanded with retail partners like Whole Foods and The Fresh Market, and Sprouts. Now that people can find us in such a wide swath of stores, we’ve started to do larger national campaigns. Even last year though, as soon as we started to get presence in retailers, we were doing marketing, because I think oftentimes, particularly in food and beverage, people think the hard work is getting on the shelves, but the hard work begins once you get on the shelves and getting the product off the shelves and to move and to get the products into consumers’ mouths. In a pre-COVID world, for us, that looked like a lot of demos and consumer-facing trade shows. We’ve pivoted for all of that to be digital now. Whether that’s Instacart advertising or Google ads, or paid social, we’re doing a lot of testing to find what works best for our brand, but we’ve moved all of that digital now.
Shuang: What are some of the key lessons you learned on this digital pivot?
Denise: I think I underestimated email, which doesn’t cost us very much money. For us, it’s been the most valuable channel from a digital perspective. Nurturing our email list and our community and trying to continuously grow that list has been something that we’ve been hard at work at. Then also getting close to the point of sale. It’s one thing to run an awareness ad, but if you can be on a platform like Instacart or an online brochure, where someone’s doing their shopping and show up high in the results, there’s a higher likelihood to convert. I think there are affordable ways to do that, and so that’s been a pleasant surprise.
Shuang: For those large nationally-distributed retailer relationships. What are some things that entrepreneurs should look out for?
Denise: Recognize that it takes time. We launched Target nationally in May of 2020. We met the folks from Target in the bathroom line of the Expo West trade show in 2017 and have been nurturing that relationship ever since and continuing to give them updates on our progress and our products. I think this idea that the accounts happen overnight is a bit false. Then I think being ready to do business with them, last year, there were retailers we presented to where I was like, “Gosh, I wish we would’ve gotten in during 2019,” but we weren’t ready as a company. We didn’t have the internal bandwidth, and it’s not often that you’re going to get more than one shot with some of the large retailers. So make sure you’re ready to put your best foot forward, that you have everything buttoned up from a supply chain perspective, that you have the marketing budget ready to support the accounts because once you get your chance, it’s showtime.
Shuang: Have there been other circumstances where a retailer only gives you a few stores, and then they see how you perform and give more opportunities as sales roll in?
Denise: That’s the norm, and that’s what happened with us at Whole Foods. They were our first chain account. We got 43 stores across the Southwest in the summer of 2018, and then in early 2020, we added another 48 stores, and then later this year, we added another couple hundred. It’s typically exactly what you described. You’ll get a small amount of stores to test in, the retailer wants to see your performance, and then you’ll continue to get expansion from there if you’re performing well.
Shuang: Are there any different behaviors from region to region, or is there anything you can do while you’re managing this nationwide relationship?
Denise: We’re still playing with the region to region. This is the first year, so just, gosh, it’s been about three months that our brand’s been available nationally, and so we’re still learning ourselves how each region differs. Particularly in COVID, we’ve seen it, though, as different parts of the country have experienced different stages of the outbreak, what our velocity has looked like when people are willing to go into stores more or not going into stores or shopping online. That’s been interesting to see.
Shuang: What are some of the key things you cherish from your corporate experience that you carry into Partake?
Denise: I worked for Coca-Cola. I spent some time in their venturing and emerging brands group, and then I also spent time working on some of their trademark brands, like Coke, Diet Coke, and Sprite, and how they protect that brand experience. I think oftentimes entrepreneurs think of a brand as my logo or my website or just my packaging, but I think it’s every single touchpoint that a consumer has with your brand. It’s the response to a customer service email. It’s the interaction they have at an in-person trade show. It’s the comment that you respond to them with on social media. Making sure that it’s a very cohesive message and that every touchpoint represents who you are as a company and as a brand and protecting that no matter how big you get, I think is something I learned.
“I think oftentimes entrepreneurs think of a brand as my logo or my website or just my packaging, but I think it’s every single touchpoint that a consumer has with your brand.”
Then as much as some of the processes and hierarchies bothered me, I realized a lot of them exist for a reason, particularly around quality, food safety. Especially with us dealing with a product that’s free of allergens and making very substantial claims around that, ensuring that our supply chain is as tight as possible, that we have all the document documentation, that we’re tracing every single lot. I think both of those things, even when we were a tiny bootstrapped company, were things that I considered mission-critical.
Shuang: Speaking of that seamless interaction, that representation of Partake Foods, how do you make sure that everyone representing the brand and working with you can carry forward that same spirit or personality?
Denise: I think it’s going to be a challenge as we continue to grow. It’s the thing that keeps me up at night because I started this company for a very personal reason, and I want to make sure that we continue to stay true to our mission, no matter how big we get. Right now, I think it’s a lot of leading by example. When I think about what our values are as a company, I just try to live those in and out, day in, day out, with our team members so they feel comfortable and vulnerable enough to also do the same as they’re dealing with internal and external stakeholders and our customers. I think it starts with the founder and the leadership of the company.
Shuang: As you’re scaling and growing, have there been any apps or tools that helped you along the way?
Denise: I will say, I’m definitely not the most tech-savvy, but we lean heavily on the Google suite of services, or the G Suite, in terms of Google Calendar and Google Hangouts and Google Docs and Google Sheets. I feel like we could run our entire business with the Google Suite of products, which is nice as a scrappy startup because there isn’t much cost associated with them if any, and they’re tools that are easy for even someone who’s completely tech illiterate, like myself, to use. We find the same with Shopify. I’ve always found myself checking on my phone or my computer. I’d never sold anything online before, but you all make it so easy to understand what’s happening, to track analytics. So working with vendor partners like Shopify and G Suite to find solutions that work for a tiny company but also that we can continue to scale with.
Shuang: Now, looking forward, what are some plans or projects you’re working on that you’re able to share with us?
Denise: I’m excited to share that we just launched our first seasonal SKU. We launched a pumpkin spice that’s available on our website right now, and then we’re launching another holiday cookie later this fall. We’re launching our first product that’s not a cookie. It’ll be an ecommerce only offering available on our website, partakefoods.com, starting next month.
Shuang: What was the decision behind having an online-only offering?
Denise: I feel like with the analytics we’re able to see from like a Shopify, we’re able to get so much data around where our consumer is, who our consumer is, how often they’re purchasing, that will then allow us to make the decision do we want to take this into retail, if so, do we take it to a regional retailer, because, oh, we saw it does well in Florida or in Texas or whatever that market may be. By launching it online initially, there’ll be less pressure, and it’ll give us the opportunity to have a lot of learnings before we take it into a broader market.
Shuang: Are there any other areas that we didn’t highlight that you want to touch on?
Denise: Not to be cheesy, but if you believe it, you can do it. I’ve never done this before. I spent my entire career in corporate America. I had never even managed a person before, let alone run a company, but it was something that I was passionate about, and a product that I believed in and that I felt like was needed because I was living that experience. I figured it out along the way by asking for help, by being vulnerable, and by just continuing to push. If I can do it, anyone can.