A study conducted by Mass Challenge and BCG reported businesses founded by women deliver higher revenue—more than two times as much per dollar invested—than those founded by men. However, of all venture capitalist funding invested in 2018, only 2.2% was given to female-founded companies and only 0.2% went to diverse female entrepreneurs, noted PitchBook Data Inc. Research also shows female entrepreneurs often have less access than male counterparts to the tools and resources they need to launch and sustain successful businesses.
The good news is big CPGs are taking up the baton to advance female-founded businesses in the food and beverage industry. “I would highly encourage women that now is your time,” said Ciara Dilley, vice president of marketing, transform brands and portfolio innovation for Frito-Lay. “You have a voice. You have a lot of people aware of these tensions and issues and a lot of people who are invested in changing them.”
PepsiCo is tackling gender-based investment disparity through its Frito-Lay inaugural WomanMade Expo West Challenge that awarded $100,000 in business grants to three female entrepreneurs. Originally slated to be a live pitch-slam at Natural Products Expo West, the event was carried out virtually due to the show’s cancellation over COVID-19.
“Female founders are the epitome of persistence in the face of unexpected obstacles, so we as a team knew immediately that we couldn’t let the cancellation of Expo West deter us from bringing the WomanMade Challenge finalists together and awarding our winners,” Dilley said. “We are so grateful to the finalists and judges who adopted new technology to join us in ending the week on an uplifting note, inspired by all 10 women and the brands they are building.”
During this Food & Beverage Insider Podcast, Judie Bizzozero, editor in chief, is joined by Dilley and first-place winner Sashee Chandran, founder of Tea Drops, organic shaped teas that dissolve instantly in hot water and generate 20% less waste than traditional tea packaging, to discuss how female entrepreneurs are disrupting the food and beverage sector for the good.
Key insights include:
- Challenges women-led brands face in the competitive food and beverage landscape.
- How PepsiCo and Frito-Lay support female entrepreneurs in the healthy snack and beverage space.
- PepsiCo’s partnership with Hello Alice, an AI-enabled platform that supports diverse and minority entrepreneurs.
- Lessons learned from launching a mission-based organic and sustainable tea brand.
- Why sustainability should be top of mind for any food and beverage company.
Links and resources:
Got feedback? Email Judie at [email protected], or tweet to @FoodBevINSIDER
Judie Bizzozero, editor in chief, Food & Beverage Insider: Hi, I'm Judie and welcome to another edition of Food & Beverage Insider podcast. With me on the phone today I have Ciara Dilley, she is the vice president of marketing, transform brands and portfolio innovation for Frito-Lay, North America, and Sashee Chandran who is the founder of Tea Drops. We are going to talk today about a topic very near and dear to my heart, which is bolstering female entrepreneurship in the food and beverage space. Thank you today for taking time out of your busy schedules to talk about Frito-Lay’s inaugural WomanMade Challenge. It originally was supposed to be a live pitch-slam at Natural Products Expo West, but it was postponed unfortunately due to the COVID-19 outbreak. The challenge, which awarded $100,000 in business grants to three female entrepreneurs, was carried out virtually last week via zoom, and Tea Drops was the first-place winner. A huge congratulations to you, Sashee.
Sashee Chandran, founder, Tea Drops: Thank you so much.
Bizzozero: Thank you ladies for being with me today. Let's just dive right into it with Ciara. Can you talk about what inspired PepsiCo and Frito-Lay to support women-owned businesses in this ultra-competitive food and beverage space?
Dilley: Sure, I'd be happy to Judie. For us, we are a company that has long been committed to bringing out great snacking and beverage products to the world. But more and more as consumer trends are changing and consumers are looking for more healthier options to include in their overall diet, we've been investing more and more in growing our portfolio of healthier snacks and beverages. And I'm lucky I get the opportunity to lead that healthy snacking portfolio for North America. As we've been engaging in looking at the landscape and how we make our products healthier, how we bring new innovations to market and indeed how we look to invest in or indeed acquire healthier snacking companies. We've been working hugely with the amazing group of entrepreneurs and in particular female entrepreneurs in this space. Because they are the ones that are really driving the growth and driving the progressiveness. And really innovating at an incredible rate in the healthy snacking space. And we have been inspired by them. We have learned so much from them. And as we built our connections with them, we realized “hold on a second here, maybe there's a way for us to lean in even more and use the amazing resources we have at hand to actively support them, encourage them, help them to grow and in particular help them to overcome some of the barriers we face. So, this has been a journey that's been going on for a number of years as we work together with female founders in the healthy snacking space. We’re very proud of the collaborations and we hope we're learning and we're getting better as time goes on.
Bizzozero: I think that's great. So, can you talk a little bit about, you know, really, what are the biggest obstacles women face when starting up a CPG brand?
Dilley: Yeah, you know it's a challenging space for anyone—man or woman to move into the space. I think, unfortunately, we do notice that female entrepreneurs face even more hurdles. It's interesting. I find that as I look at the hurdles female founders face in this space, many of them are similar to the hurdles that women face day to day in in corporate America. And one of the biggest ones is funding. We know that in 2019 in the U.S., only 3% of VC funding went to female entrepreneurs, and of that only 0.2% went to women of color, which is a pretty sad statistic in today's day and age. So, funding is a massive gap for female entrepreneurs. The other area is mentorship. We know that women thrive on the support of others—from communities, from mentors, from those who can advise and coach them. And that's something that women just aren't getting as much access to and maybe aren't asking as overtly for that support. And finally, expert advice closely linked to mentorship. Women are often lacking in those support networks they maybe don't haven't worked in the industry before. They don't know where to start. They don't know where to look first. There are quite humble when asking for help and support. So, that's a big gap. I think those are the three areas that we see again and again when we speak to women are the ones that are looking for more help on. When you look at the funding one it really is incredibly stark because the majority of money coming into the space to help small startups is still coming from the VC world. So, we are supporting women by giving them access to funding, but also by pointing them in the right direction as to the many areas that are now available as to where to get funding. Alternative sources of funding from VC. We're also doing a lot more work with the VC community to really put them under pressure to say, “you know this isn't good enough, you need to be supporting more diversity.” And they are waking up to that, and we're starting to see some positive changes. So, I think those are the three key challenges that we know female entrepreneurs are facing today.
Bizzozero: Sure, absolutely. What tools are out there right now to help them succeed? Are there enough tools and what are companies such as yours doing to really help make that more of even playing field?
Dilley: Yes, I mean it does hearten me Judie. There are more and more resources and facilities available. One because more and more people are aware of the inequality and they want to do something to address it. But also, because more and more people are recognizing the entrepreneurial spaces as a place that you know really is important for the future of our economy and are leaning in to support. So, there are many networks and platforms. We work with many of them. For example, we work with a company called Hello Alice, which is an amazing AI-enabled platform that supports diverse and minority entrepreneurs. We have a big program with them under our WomanMade banner, which provides webinars, expert advice, office hours, resources as to how to get funding when we're doing funding challenges, etc. And there are many other organizations on the Hello Alice platform that are offering resources and support. It also is super clever. Because it's AI empowered it allows you to input your particular area of interest, your business, your business problem to solve, the type of business you're in and also geographically. Then the algorithm helps to identify the optimal resources available either on the website, on the platform, or indeed in your area that you may not be aware of that you can resource. So, Alice is amazing when there are many, many others like them. There is a huge amount happening at local government level and local communities. So, more and more women in particular reaching out to access those. But also, from a CPG perspective. I always tell the story of I was at a conference about a year ago, and Reese Witherspoon spoke at the conference, and it was a lot of CPG companies just like my own. And she said, “you know, you guys have so much power in your brands, your brands are in every home in America. Imagine if you use those brands to bring positive messages of how we can drive societal change.” And that was a wonderful wake-up called for me to go, “I can use the brands that I have to talk about female founders. To make people aware of the issues that they face and to rally people behind them to get supporting them. For example, Stacy's Pita Chips is one of the brands we have. And this year we've taken over our bags to tell the story of female founders to highlight the grit and determination and inspiration and community that they show and encouraging more and more consumers to vote with their dollars and to get behind female founders. We plan to do a lot more than that. I think in summary, there are a lot more resources and they are often in places you least expect, but I would highly encourage women, “Now is your time. You have a voice and you have a lot of people aware of these tensions and these issues and a lot of people who are invested in changing them. And I truly hope you can harness the resources that are out there.”
Bizzozero: I love that. Spoken so eloquently. Let's talk about the actual challenge. You received more than 100 applications. The list broken out is so impressive. I mean, 4 of the 10 finalists were certified B Corps; half of them were founded by moms; and three of the companies have gluten-free products. I mean it's very diverse. So, you had the enormous task of narrowing it down to 10 finalists and then the three winners. What criteria did you use to choose the finalists, and then in turn the three winners?
Dilley: Yes, I will say one thing as I start. It was probably the hardest job I've ever had to do in my life. They were amazing companies. I mean, the amount of applications we got in such a short period of time is incredible. The quality of these companies that these women have founded is just outstanding. I tell my own team … I said, “you better watch out because these broads are going to be big very, very soon.” It was wonderfully encouraging and heartening, as well as challenging to narrow it down. The three criteria that we used, which we believe in our day-to-day business is part of how we judge the potential of a brand in our own portfolio, let alone outside. The first one is how strong was your business idea? How strong was the product idea within that? How strong was your design identity? Did you have a strong brand story to tell? Had you thought about the story that you were telling consumers, and did you have a product or service that lived up to that and that was of high quality and that would engage with consumers today and tomorrow? The second, which was very important for us, and I think Judie is, I think is a little bit unique for us in our journey to support female founders. We passionately believe that having societal purpose or a deep society mission at the heart of a company is a real sign of a potential successful company in the years to come. We believe consumers feel it's important, and we believe it will be a strong indicator of economic success in the future. So, we have that is a very important No. 2—that you must have a clear purpose or mission that is giving back to the community or supporting the environment. Every one of these 10 finalists—indeed almost all the 100 had it—which goes to show the caliber and the amazingness of these women. They also believe in active society in the community is part of how they show up. The final criteria was future potential. So, did we believe that you had a vision as to where you wanted to go? Did we believe you had product ideas or service ideas as to how you were going to grow your company? Did you not only know what you were doing well today, but where you thought your company could go tomorrow? Those were the three criteria. And the 10 finalists did very well; the three winners did very well; and Sashee on the podcast with me today did amazingly well. Her brand and her story, which I can't wait for her to tell you about, is just outstanding. It was almost top marks all around, without revealing the scores for Tea Drops. We were blown away by the quality in each and every one of them, in particular the winner.
Bizzozero: Well, fabulous. There were three grants. It was $100,000, and the winners received $50,000, $30,000 and $20,000, respectively. How will these grants be used to support the brands and the women entrepreneurs?
Dilley: The wonderful thing about when we award funding Judie, and we are very clear about this in every competition or challenge we do is that it is the money is handed over and it is totally up to the winners to decide what to do with it. That's because everybody's business is different. Everybody's business is at a different stage, and everybody has different needs. So, we are no strings attached. We hand over that money, and it is for the women to decide how best to invest that money to grow their business. Each and every one of them had some wonderful ideas that they shared with us about what they would do with the funding. Whether it was grow their digital marketing budget. Whether it was grow their e-commerce presence; whether it was used to invest in quality procedures; whether it was to recruit additional resources, etc. Obviously, if they ask for advice or our view, we will give it, but we believe they know their businesses even better than us, and we're sure that we’re excited that we will see them reap the return on investment from the awards.
Bizzozero: OK, great. Well let's hear from the first-place winner herself. Sashee Chandran is the founder of Tea Drops, which are organic shaped teas that dissolve instantly in hot water. And what's really cool is they generate 20% less waste in traditional tea packaging, which I think is a totally awesome idea. Sashee, again congratulations. Like I said your product is amazing and you should be really proud of it. Can you tell us what expired your product and mission?
Chandran: Yes, of course an I think before I get into that, I want to give a big thing to Ciara to the Frito-Lay team to Hello Alice community. I think this challenge was incredible in really just spotlighting awareness around female founders, but more so, giving us an opportunity to share our story and to continue the work and mission that we're on. And so first I just want to say thank you so much for that opportunity, So I can tell you the story about Tea Drops. I started this company back in 2015 and prior to that I came from a pretty tea-centric household. My mom's Chinese; my dad’s Sri Lanka. My dad was actually born on a tea estate and worked in the tea trade before immigrating to the U.S. Both my parents are immigrants, and I grew up with a pretty heavy tea-centric culture. I would have whole-leaf tea at any family gatherings and family dinners and just really enjoyed the benefits of loose-leaf tea growing up in that it's more aromatic and flavorful than bagged tea. It was something that really connected me to my family and to my extended relatives and community. I saw that first hand. You know in a lot of Asian cultures tea is a staple in the culture and in the community. But then I grew up and I started working in Silicon Valley. I was at a pretty fast-paced e-commerce company running meeting to meeting. And I noticed my own frustration of not being able to fully brew my tea before running to my next meeting. Whole-leaf tea takes anywhere from three to seven minutes to brew. You need a lot of kind of tools to steep it—from a kettle to a strainer—and then you have to add sugar and cream. By the time you make it you have to run to the next meeting and teabags really don't have that same aromatics and flavor. So that sent me off on a journey to experiment with different tea blends and varieties. I didn’t know I was going to come up with a formulation like Tea Drops, but after experimenting in my apartment kitchen at the time for about a year and a half, I came up with this notion of a tea drop which is a whole-leaf tea that's finally ground and compressed together with other spices and lightly sweetened with cane sugar. You just drop it in hot water and stir it. It's like a bath bomb, except it's tea so it cuts down the waste of a teabag, steeps instantly, and you can take it anywhere on the go whether at your office, at home or even camping.
Bizzozero: OK, great. Since we're talking about the actual product line, how many different flavors do you have?
Chandran: We have over 15 varieties at the at this time—all the way from green tea to white tea to black teas … really across the spectrum. We come up with really unique flavor profiles like citrus-ginger, rose-Earl grey. We kind of step away from traditional tea sets and put our own twist on it and use fresh herbs and fresh spices.
Bizzozero: Awesome, I think that's great. What were the biggest obstacles you faced as a female entrepreneur and how did you overcome those hurdles?
Chandran: Well, I think Ciara really nailed it on the head. I think that one of the biggest challenges when you're first starting is really just getting that validation around your product and getting the funding that you need to scale and grow it. I personally, when I started, I bootstrapped myself and put all my personal savings into growing Tea Drops. And at some point, I knew that I needed additional funding in order to scale it, to hire the right people, to expand our manufacturing. And then I learned about angel investors and venture capital investors and learned about that ecosystem—what's required, how to pitch. And it took me talking to over 90 individuals, I want to say, before we ended up raising our seed round. You know, I can't compare that to anyone else's experience. I will say that was a lot, you know, just kind of from an emotional and mental standpoint. That was a lot day to day to overcome and just go back to the drawing board, revise my pitch, revise my strategy of how to even approach raising capital. I can't say that it's less easy for anyone else, but I do think that the narrative is different when women are raising money. This is what I've noticed in general when women are raising money. It’s the investors asking, “Do you have a contingency plan?” Kind of like the narrative is around “how are you not going to lose my money,” whereas with men I find that it's “Oh well, how big can this opportunity be?” I just feel like the narrative and approach itself is very different when men and women are raising. I do think that that's changing, and I'm very happy to see that, but those are some of the obstacles I feel I personally faced when raising.
Bizzozero: Well it's definitely one that I can see you in the future helping guide a lot of other female entrepreneurs down that road. So, congratulations on that. Now let's talk about the actual product. You really take pride in your products--they're USDA Organic; they're made with Fair Trade ingredients. That often means that cost is more. It's more to manufacture. It's more to secure those ingredients. Why is this so important to your business model?
Chandran: I think Ciara touched upon this a bit, but I recognized early on that my product and brand could be this platform for societal change. I didn't think about it in a grandiose way, but I did think that if I can make small decisions early on about our supply chain, about our ingredient profile, about how I wanted employees to be treated, then that itself would cascade into the customer experience … into the quality of how the tea drop was made and manufactured. I think that's been true—that people know that we're using the highest-grade ingredients in our product. We're using a really fair and equitable supply chain. Over 80% of tea estate workers are women and yet they’re often paid 30% to 40% less than male counterparts. So Fair Trade ensures that they're paid an equitable wage. All the way to the organic sourcing of our teas. That something you can taste in our product. It’s messaging that we can now rely through our packaging, through our social channels and through our brand messaging that this is not just an innovative tea, but this is an experience, and there's a set of values behind it.
Bizzozero: Absolutely, and I really like that you do the storytelling, which is obviously a huge component to a brand’s success in this day and age. You know your website is very informative. Your packaging is phenomenal. What's the next step for your company and how are you going to use this $50,000 to further your position as an innovator in the tea space?
Chandran: We were so grateful to receive this $50,000 grant, and it couldn't have come at a better time given what's happening and in the current state of affairs. I think we're going to utilize this grant to continue our mission and our ability to convey our brand values. And for us, because we mostly sell direct to consumer online, that means really increasing our e-commerce presence in the form of informative content and digital marketing. But really, this particular grant is going to go toward … now more than ever, social and online content is king. I think especially in this climate there's just going to be a need for a lot more informative content and figuring out new ways to connect with our consumer just given that we might not have the immediate opportunity to do so in-person or on-shelf. I plan to invest this grant into creating educational content, and content that really resonates with our consumer base. Ninety percent of our customers are female, they are Millennials, 60% of them are moms. We want to maintain the community feel and be able to create value-added content that serves their lives and their everyday needs. Because we're not able to necessarily do that immediately in-store right now, we need to transition that need and serve it online.
Bizzozero: OK, great. Great things to come for sure. I really appreciate both of you being on the line today. I am in awe of both of your dedication to this industry and I hope that only good things come from now into the future.