Eric Meth, Founder & CEO at Good Harvest Co.
Eric Meth is a media sales professional & leader specializing in interactive, programmatic, mobile, and ad tech with 25 years of CPG & retail experience in both start-up environments and some of the most recognizable media and digital companies in the world.
As Founder & CEO of Good Harvest Co., Eric is now applying his expertise to help innovate the way cannabis brands reach their desired consumers, and the way non-endemic brands reach cannabis consumers—moving audiences from shopping mode to buying mode.
EPISODE TRANSCRIPT
[00:00:01] You're listening to Thinking Outside the Bud where we speak with entrepreneurs investors thought leaders researchers advocates and policymakers who are finding new and exciting ways for cannabis to positively impact business society and culture. And now here is your host Business Coach Bruce Eckfeldt.
[00:00:30] Welcome everyone this is Thinking Outside The Bud, I'm Bruce Eckfeldt. I'm your host our guest today is Eric Meth who is founder and CEO of good harvest company. And we're going to talk a little about his experience in consumer packaged goods and retail and how he's gotten into the cannabis space. Excited for this I think this is the whole kind of branding marketing. How do you find customers. How do you develop audience is critical right now in this kind of growing no pun intended cannabis industry. Chef Erik welcome to the program.
[00:00:57] Thank you Bruce. I appreciate you having me on the podcast. Excited to jump in.
[00:01:02] Yeah well. Well let's do that. I always like to start with guests just kind of giving a sense of their professional background and then you know we can talk about how you pivoted it to what you know how and why you pivoted into cannabis but what was your professional background. Tell me more about your marketing expertise there.
[00:01:17] Sure. So that overall I've been involved with consumer packaged goods and retail marketing for about 25 years. Early on it was very print focused worked with the division of News Corp. focused on literally Sunday newspaper coupon inserts which also was tied into in-store. So all the experiences I've had since then have always weaved in this consumer packaged goods CPG fast moving consumer goods offense e.g. consumer electronics. It's always been sort of a woven in facet. I also looked at the digital media space relatively early probably like mid 90s not to date myself but everyone else thought it was a fad. We don't think this is going to last. Stick with prints. Print a live on forever. We know how that rolled out. So between the last organization that was where I've always found myself as a business lead a business development lead touched a little product within the course of that work history. But I've always been responsible for building up divisions within these larger organizations I've had experience with startups as well.
[00:02:21] But it got to the point particularly with my last company which was very involved with very large retailers where we were touching a lot of data coming from the shopping and the buying behavioral side. And I was also very tied in with a lot of the ad tech companies between Demand Side Platform supply side platforms data management platforms everything that was like the connective tissue for major brands to more effectively by media. That's what our group did. So as I looked we had some changes of control. Company was acquired I naturally started looking at something else for a variety of reasons but cannabis was something that was of personal interest as the consumer from a business standpoint. I had a decent amount of personal investment more into the companies stocks I was buying and the consumer experience was just far too many parallels that I couldn't avoid. Between CMG and retail and as I started peeling back the onion a little bit more. It just became more apparent that what I'm doing now and what we're building at good harvest is very apt in in the marketplace which we can get into.
[00:03:30] Yeah yeah yeah I'd like that and just maybe explain a little bit for some of the folks that aren't as familiar with the marketing background. Did you get a marketing through this whole kind of transformation of. Well we'll push out advertise minutes and we'll put things in papers and then we'll just we'll see if people show up. I think it was it's very kind of. And over the last decade or two decades you know this stuff has become much more technical.
[00:03:53] So what are some of the things that that marketing has really been able to do in terms of being more sophisticated about customers and audience and demand triggers. I'd like to give us a sense of what you've been learning in the space that you're now applying to the to the cannabis world.
[00:04:06] Yeah great question. So the in general the market has become more adept from everything to customer retargeting. So most consumers depending on what you like if you're a golfer a golf avid golfer you tend to see a lot of golf ads online. A lot of those golf ads or sent to you your specific mobile device or your desktop wherever you're viewing your LTTE your television. It's all based on how you conduct yourself online. What do you do places you go. Sites that you visit you might look at the Masters you might go to ESPN and you're digesting a lot of golf content you're going to golf retailers and looking at Ping drivers you're going to get ads for those things. The main way that's being done is through general retargeting so pixels cookies which some are familiar with are dropped on your machine and that's how they're basically saying you're interested in this product because you've taken this action X amount of times. The more the industry started grabbing towards this notion of what's called programmatic media automated media think of it as the stock exchange instead of stocks being traded on a marketplace.
[00:05:11] It's digital mobile video inventory needed inventory that's put there by politics. There's we're looking to find ways sales teams that will go out but what they don't sell most of their sell through rates or 50 percent or so they're putting in these marketplaces to expand the reach of qualified buyers who might be interested in purchasing that online inventory that digital inventory and that's really the ecosystem that I was leveraging with my last role. We've built a business pretty pretty handily with a very good team on the operations side too. One hundred seventy five million dollars over the course of five years which I don't take full credit for at all.
[00:05:49] I had a very good team. Some luck the timing. But again the harvesting of the data was really focused on specifically shopping and buying behaviors. Yes some of these large retailers just think any big box retailer. My company my former company worked with and we created a very non obvious monetization channel for them things that they weren't making money off of and certainly not making any close margin by selling products. They're making fractional margins off of all those products and doing all the marketing and all the overhead. This was a completely unscheduled revenue line for them. We were virtually at 100. Think about it. If we can leverage a consumer who didn't buy anything but they could still make money off of them by serving an add to them. It was that was kind of a no brainer pitch that we went into. So I took a page from that and as I looked at the candidate space there is a dearth of data not specifically for media activation and marketing activation. There's a lot of data in the market. There's point of sale systems that harness data. Their CRM platforms that harness data but the connection point to take that rich data specifically tied to how consumers shop or cannabis products ultimately purchase cannabis products research cannabis products on brand sites. That's the connection point that I didn't see so I was at this is a year plus ago. MJ Bitcoin in 2017 was merely sixteen thousand twenty seven. This year it was so interesting going from one year to the next. I engaged a lot of brands and media companies and agencies and the ancillaries that were there and just really tried to figure out what that hole was. And it just kept coming back to the data side. So home wrote a business plan and quit my nice cushy job and started raising capital and here we are.
[00:07:38] Yeah excellent. And was this really a moment and kind of a space. I mean you know a year before that it wasn't ready and a year from now things would be too far along. I mean how I guess how much do you feel like this is timing.
[00:07:50] Timing is as you say timing is everything. I think you an adviser of mine who comes from the data space pretty much had this idea when we first engaged and first met. I just had this big smile on his face because he's like that's the idea I had like four years ago and it was way too early. But you're right for it now.
[00:08:08] And look I think there's still within cannabis everything is slow. When I look at where things are it's rapidly catching up but particularly from an advertising and advertising technology standpoint we're a good 10 or so years behind where the traditional advertising space is right now the ad tech space I see this as and I believe this is a very small efficient in a rapidly growing pond. But this is what also helped transcend me into this. This is what I know this is what I've done. This is how I've applied myself from a professional standpoint and when people ask about getting into the candidate I say the same thing like Take what you know doing really well and apply it that way.
[00:08:47] Don't do something completely unrelated.
[00:08:49] Everyone wants to open a grow or something. Unless unless you're an expert farmer and agricultural scientist is probably the best moment.
[00:08:58] Exactly. No I'm in Jersey and you know there's plenty of Basil farmers that are in Jersey that probably can apply that skill set and become a cannabis cultivator but not someone who had a side grow when they were in college or high school. I'm going to run a candidate so that that's what drove me into this space and seeing this need to make this connection. So I think there there are things that are happening at a more rapid pace on some levels but I also feel that there's things that are just crawling along that need to be exploded and I feel that this is one of them.
[00:09:30] So let's talk a little bit about sort of the customers that you're serving and the services that you're providing them like where are you targeting in terms of helping them with AD technologies and what are the what are the actual engagements or the you know the services look like right now given where the industry is.
[00:09:47] So the the main customers that we're ultimately serving it's twofold.
[00:09:52] There's the retail side and then there's the brand side and the brand side could also extend into what we called non endemic non cannabis brands that might want to reach cannabis consumers but the retailers who are in some cases doing things really well utilizing customer relationship management platforms that are in the market between Baker Springborg etc. that are or their own PLM systems that have these organic capabilities built in. They don't need that integration. They're communicating to their known audiences in that regard and they should continue doing that. Some are doing it better than others depending on how robust of a loyalty program they've established they might have 50 percent of their overall customer base engaged with their loyalty program. A lot of it depends on the incentives and the benefits that they're extending. If it's not that great a program they might see 15 percent of their overall. So there's an active base of consumers that they know what they're purchasing how they're purchasing it what frequency and they're using as a mass messaging and e-mails to influence increase in purchase for those specific types of products that they're typically engaged with in purchasing already. The part that's missing is particularly when you have more dense areas mature markets mature GM is the total addressable market that most of these retailers are reaching is small in comparison to the whole 10 15 percent high concentrated areas there might be a hundred retailers in that area. We're specifically focused right now on adult use markets. And then you have a market like Massachusetts which just I think launched their fourth adult use retailer for a very long three year wait.
[00:11:25] Painful painful but I mean nine point three million I think was the first month's sales figures off the first two.
[00:11:31] Yeah not a ton of demand issues there right there. There's enough supply there's greater demand not a whole lot of need for advertising when we look at a mature market between Colorado large scale markets like California other mature markets that have been around watching Oregon this is where the retailers need to find ways to communicate into other apt consumers ideal consumers that are displaying the same behaviors. This is where a product like ours would come in so we could provide a more scalable way to reach other. And I hate to call them look alikes. I tend to think of the more shop like consumers because what you do online from a general browsing behavior standpoint doesn't necessarily define that you're interested in those products when you're physically shopping and you're going through that higher funnel process of the shopping experience down to that need funnel down to that low funnel where you're ready to make that purchase. Those are really the main intent signals that we're going after. Some of it is open market data that's available and we also want to adhere to a lot of the regulatory requirements as the laws are written for specific marketing purposes. You can obviously do outdoor digital out of home billboards newspaper magazine etc. when it comes to digital and I'm sure others guests of yours have said the same thing. It's well-known that the big five the Microsoft the Amazon's Google Facebook Apple not touching. Yeah. And I challenge how long it'll be until they decide to tell what do you have.
[00:12:54] You have a sense I mean because it seems like the pressure is mounting or whatever the pressure is mounting in terms of you know to do it or not do it.
[00:13:01] Do you think they're going to turn or do you think they're going to start allowing some of these things and if so I think they'll they'll tread water very gradually. I get asked this a lot also from an investor standpoint what happens when the Google jobs and you're wiped out. Not necessarily. If you look at the track record so far they're not touching a lot of categories that are legal. When you think about it they're not touching pornography they're not touching firearms and not touching gambling they're not touching cryptocurrency. So even when we in the when when you're looking at federal legalization or at least some regulatory and legislative initiatives that are in place like the states act which might make it easier for them to bank and not have that sensitivity of taking ad dollars coming from a cannabis business an illicit business it's at the federal level. Again I still I personally think whether or not we have an administration change plus another midterm cycle you know I'm betting for years along with more states we go from 10 adult states to 30. I think the game changes and everything else is tied in with our new pending age gets confirmed with his thing.
[00:14:05] So there's a there's a lot of unforeseen. But I do think it's going to allow for smaller players to kind of pave the way. And the other historical that I've been exposed to and I look at David imagined platform specifically they've had very nice to be able to tap into that data side. And despite the fact that a large big tech player can simply come in replicate what you're doing hopefully you have some level of IP attached to it they also look at the amount of expertise whether it's an aqua hire plus some technology or some type of IP acquisition. It's really the knowledge that you're bringing with the team that you've assembled and the depth of relationships that you have where it just makes it that much easier for them to say great we're going to just take it and we'll short structure you on an earn out like they always do. But that's where I think they are more likely to go find the right companies that have done it well and pave the path.
[00:14:54] Yeah. JORDAN Yeah yeah I think that and I think I see that happening with lots of different facets of this industry where because of the federal legislation you know the big players are not coming into it. So it creates this kind of vacuum that you can enter you can take the expertise enter start something get some traction and then you either make good money between now and when they kind of come in and then hopefully set yourself up for being you know easier to acquire than to compete against. So I think that's correct.
[00:15:22] Several areas so that the retail the retailers one side and the on the other side you're asking is obviously the brand so connecting the brands to the retail where they're ultimately looking to sell and distribute their products is the other end.
[00:15:33] So the retailers are I think of them as like the fuel. Who's providing the data. We've built a pump that's extracting the rich elements out of that data and kind of refining it and the end user of the data ultimately could be the retailer as well. So there's benefits for them contributing data and they can extract data out and essentially the way we're structuring it for free by the media that's attached to the data. But we're trying to do this thing really well create an effective data management platform that allows brands both inside and outside the cannabis space to effectively reach consumers specifically around those buying and shopping signals that they're giving off and not doing it in a way that exposes any personal information because we understand there's certainly sensitivities some people some people don't want to give CBS or Walgreens their information so that they're not going to sign onto their loyalty program. But I think as you see markets mature that those elements start to sort of winnow away where people become more comfortable and they want value. So if I can get 20 percent offer first crack at this new product that comes in. Sure you're creating a value for me I'll exchange information but not too much information.
[00:16:36] Yeah well I know information that is reasonable is reasonable based on what you're gonna give me in terms of value. Can you give me a case of an example either either real or kind of hypothetical in terms of the type of brand that might be interested in something like that because I think there's there's lots of kind of cannabis brands but I think what's interesting is a lot of these brands that are kind of coming into the space that are ancillary or kind of related that are looking to enter or are looking to participate somewhat.
[00:16:59] Yeah I think the the obvious ones are the endemic the cannabis brands.
[00:17:04] I see the opportunity and this is another part of my prior background that the whole notion of shopper marketing in this case I'm looking at as candidate shopper marketing where a brand is wanting to get distribution in a specific set of retailers so they're working with multi-state operator and MSO and in the sort of standard retail world food drug mass classes of trade retailers like money especially money coming from brands and that's a lot of the behind the scenes that goes on is in order to get that shelf space that's right in front of your eyes versus the one that's down by your knees. Those brands are paying money to the retailer to get that shelf space. They're also doing localized promotions within that specific market. So you have the national brand dollars that are sort of giving sort of top level support from a marketing standpoint top level air cover. They're running ads on national television it could be PSG or Unilever. But then at the localized level you've got this specific account reps who are dealing in very specific DMA is just looking to sell more product at Wal-Mart are just looking to sell more product at CBS. There's a coupling of dollars that happens there. So they're getting air cover from a national standpoint obviously with cannabis you're looking at regional or state level. But I think the same applies if we can combine and make some incentives happen where we can take data that we're gleaning from individual markets brands can utilize that data and maybe even partner with the retailer whether they're doing a 50 50 split on the marketing around it they're sharing costs but the whole goal is don't go to this Rita this retailer want to brands go to it can can utilize let's say green drag and in the Denver area and really have an impact on that consumer.
[00:18:44] And if the retailer is doing their job well and the product specialist or bud tenders are doing their job well while they're picking up that advertised product they're also is upselling them three other things when they're in the store. So I think there's an opening for that which obviously helps to amortize the spends there they're happening and then it also helps circumvent some of these challenges because what I find talking to brands most are looking at the available options that are in the market that don't really have that data layer. I think it's becoming more apparent. I think the data is becoming better but it still has a ways to go. So instead of the scattershot advertising that exists right now they have a more definitive way to reach those end consumers against all those buying signals that I went through in terms of sort of the data insights that you're able to actually gather in this and the cannabis space here.
[00:19:29] What are the things that I guess what are the sources that you're kind of pulling or what's the raw data doing and what are the insights you're able to develop once you have that data in place.
[00:19:37] Yeah. Good question. So at first we're going very called macro so called them like mega segments the way that we've built the least that the first version the minimum viable product MVP version of good harvest is built to get more definitive. So if we're looking at tracking a consumer as they come to a cannabis retail site or a brand site depending on what they're selling if they're selling cartridges or they're selling edibles we can bucket them into the edibles category or the concentrates category or the flower category. Now currently particularly from a scale standpoint we just want to know Canada's consumer exactly in this in this market.
[00:20:11] Yeah.
[00:20:12] So he and interstate interested and adult so much like an alcoholic beverage company would would have to adhere to legal drinking age FDA compliance. It's those are pretty much the main elements so there's some existing open market data it's available that can focus on the mobile ad I.D.. So again the non personally identifiable but the device identifiable piece of information that would allow a brand to retarget against that set of consumers in that DMA in the geography and an adult. Those are really the two main things and they were layering on. This is where our site comes in we're enriching that open market data with additional signals that are coming from at least the first selection of partners that we're starting to work with where we can glean that additional shopping intent behavior and then ultimately that buying behavior where becomes interesting and this is more of a downwind opportunity creating predictive analytics against why consumers shop certain categories but don't convert. How can we identify trends. And certainly there's a lot of good companies between headset New Frontier data videos analytics they're helping brands identify who their core shoppers are and they're gleaning and pulling process data out of a number of the systems headsets obviously doing a deeper job of that and providing subscription services on the brand and the retailer side to help them with inventory forecasting and distribution.
[00:21:39] But again the what next part isn't there. How do you take that rich data that says these consumers buy more of this product in this market now what how how do how do I connect that consumer. These are the media and signed advertising to them. So when they do go into the store asking for that product on the other side of the analytics and I see that as a measurement component. So as we develop much like I used to use I Ryan Nielsen when we ran a campaign we can narrow it down to that specific it was a national campaign or a regional campaign. We will be able to go to a third party as much as we can scored ourselves. We can work with the retailer directly show these individuals were exposed to an ad. These weren't control and test sets. And this is what the net impact was this is what the net sales effect was. Did that net sales effect create a return on ad spend. You're also grading your own homework.
[00:22:30] So there's a lot a lot of folks have some issues with that.
[00:22:34] So that's why we would use a company like or Nielsen. I think that's where some discussions that I've had with some of these potential partners. That's why I see them adding another layer of value so we can measure these things make sure it works make sure the ad spend work. So you see another ad spend happen the next time they want to promote. So it's a it's a catalytic effect but it's needed. And I think as more brands you asked earlier about not endemic brands that's what they want. Yeah they they get specs that they're come career and they're not even going to look at it. If they can't measure it. So in order to be able to draw those dollars which essentially are going to be much larger than any individual cannabis brand or MSO or retailer would be able to put together right now with exception you know had been four million dollar annual ad budget running billboards ever. Which is great. They're doing a lot of good things. They're changing the stigma. Educating consumers all that's needed but not many cannabis brands have four million dollar annual budgets. And as you find more not in demographic now yet this is where we can use a system of data that's farmed and analytics and what's most point management on the Internet. I think some of it's like Wi-Fi on one of our ends.
[00:23:43] Yeah I'm I'm on my 5g I should be good but you never know. You never know what happens. Yeah. So let's just pick it back up on the going that the other brands as the bigger brands really want to kind of get into the space and wide why all this stuff becomes really important as this industry grows. All right so so why why do these bigger brands out of the why did the brands really care about this stuff particularly the ones that are not kind of a specific.
[00:24:06] So I look at an example TOTN knows the famous TOTN pizza rolls they ran a campaign last April for 20 they canvass the entire Denver DMA with billboards and other outdoor with a very specific creative better when baked in the Denver market 13 as pizza rolls. That was that was canvassed all over the place. And really well executed. It was it was a great use of the medium the channel distribution using outdoor because it was obviously targeting a very mature market like the Denver DMA.
[00:24:39] There was no other continuity beyond that. There was no attachment to a mobile campaign there was no attachment to a desktop campaign a video campaign mostly because again the average consumer granted yes it's a mature market. People are used to when they understand what 420 is. But to be able to enhance that even more and continue the conversation encourage more purchase of a team of pizza rolls around the largest cannabis holiday that didn't exist right. There was no other way to do that with any general scale factor. So the billboards were great and they essentially got the message across. But then I see that also extending if you're looking at ride sharing services like Uber and Lyft you want to understand location of consumers as much as they want to curb any kind of drug driving which is they want to curb drunk driving. These are all other apt uses of attracting a cannabis audience and identifying a cannabis audience specifically with a very consumer specific message that resonates with that audience versus a general audience. So I see more more of that and you can extend that into fast food you could extend that into other types of consumable products snack foods cetera. So yeah I think that's where there's other applications that again allow us to tap into some larger budgets which might exist that want to reach Epatha also want the types of measurement and the types of reach and the types of data targeting that they're used to when they run traditional campaigns.
[00:26:03] And I think I'd like the supports I think really what's happening in the industry which is you know as we move from this kind of you know serving the existing culture and moving to kind of more of this multifaceted general population you know with different uses different intentions different kind of attributes you know and we start moving into these bigger brands and stuff like getting more sophisticated around this is going to be is going to be key. And it's just going to grow over the next five 10 years.
[00:26:30] It's critical. I mean could we all see it we're seeing it now with obviously brands that are coming in from outside related to Constellation Brands and their heavy investment in canopy Altria and their heavy investment in Jewel and Kronos. These are happening and you're going to find more health and beauty manufacturers like Revlon coming in and utilizing CBD infused beauty products and makeup products so much like there's different classifications of CPG consumers between luxury oriented consumers budget brand consumers mainstream consumers you're going to need better data and better analytics and targeting to reach those specific subsets of those types of consumers and again it's just dovetailing into what they're doing consistently now and what they've been doing for dozens and dozens of years.
[00:27:21] We're going to hit time here. Great conversation. I think we could probably go on for a while on this one and we could maybe we do another episode later to get into some of the details but yeah I think it's a great great conversation around kind of the more sophisticated aspect of this industry and what we're really going to see more of in the coming years.
[00:27:37] People want to find out more about you about good harvest what's the best way to get more information.
[00:27:42] Sure. So we are available to digest all of our information and that www.goodharvest.co/ if anyone wants to reach me directly whether it's for more information as we're getting our beta put together as we're drawing in more brand and retailer interest or also investment which we're still working on. You can reach me directly at ejm@goodharvest.co .
[00:28:07] Right. I'll make sure both the link and the email address are in the show. This has been a pleasure. Thank you so much for taking the time. It's been a fascinating conversation.
[00:28:14] Thank you. Bruce was glad to be part of it and I'm an avid listener and I am looking forward to hearing my own wonderful voice in this wonderful conversation.
[00:28:23] As much as I've enjoyed the other batch of content that you've been producing over the past couple of months. Great. Thank you so much. I appreciate it.
[00:28:31] You've been listening to Thinking Outside the Bud with Business Coach Bruce Eckfeldt to find a full list of podcast episodes. Download the tools and worksheets and access other great content. Visit the Web site at thinkingoutsidethebud.com. And don't forget to sign up for the free newsletter at thinkingoutsidethebud.com/newsletter.