Customer satisfaction comes from knowing your target audience like they are your BFFs. Prioritizing customer knowledge through research and technology has been how Ellis McCue of Territory Foods has grown her business and excelled. Ellis is a former retail and consulting specialist who created Territory Foods to solve busy people who love delicious and nutritious food. Territory Food is a healthy meal planning and delivery service that works with local chefs to deliver high-quality meals. Ellis has focused her love of travel and food into creating a business dedicated to getting to know its customers and building a strong customer base before anything else.
Tune in to learn why you need to focus on knowing your customers better, use technology to serve your end goals, and how Ellis propelled Territory during the pandemic to a 250% increase in sales!
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https://thebadassceo.com/customer-satisfaction/
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Customer satisfaction comes from knowing your target audience like they are your BFFs. Prioritizing customer knowledge through research and technology has been how Ellis McCue of Territory Foods has grown her business and excelled. Ellis is a former retail and consulting specialist who created Territory Foods to solve busy people who love delicious and nutritious food. Territory Food is a healthy meal planning and delivery service that works with local chefs to deliver high-quality meals. Ellis has focused her love of travel and food into creating a business dedicated to getting to know its customers and building a strong customer base before anything else.
Tune in to learn why you need to focus on knowing your customers better, use technology to serve your end goals, and how Ellis propelled Territory during the pandemic to a 250% increase in sales!
Sign up for the Badass CEO Newsletter for weekly advice and resources on how to get started on a business idea, grow your business, and be the badass entrepreneur of your dreams.
To learn more about the Badass CEO Podcast, go to: http://www.thebadassceo.com/ To get the Top 10 Tips every entrepreneur should know, go to: https://thebadassceo.com/tips-for-every-entrepreneur/.
Please subscribe above to be notified of our new episodes.
I put together a Free Top 10 Checklist for Every Entrepreneur. Click here to get your copy:
https://thebadassceo.com/tips-for-every-entrepreneur/
To learn more about our podcast guest, click here:
https://thebadassceo.com/customer-satisfaction/
If you enjoy this podcast, please help support the the podcast by using the link to our sponsors and companies I use for my business. I receive a small percentage for each sale. Thank you so much for your support!!
http://thebadassceo.com/tools/
Follow us on Instagram at:
Mimi MacLean:
Welcome to The Badass CEO podcast. This is Mimi Mac Lean. I'm a mom of five, entrepreneur, Columbia Business School Grad, CPA, and angel investor. And I'm here to share with you my passion for entrepreneurship. Throughout my career I've met many incredible people, who've started businesses, disrupted industries, persevered and turned opportunity into success.
Mimi MacLean:
Each episode, we will discuss what it takes to become and continue to be a badass CEO, directly from the entrepreneurs who have made it happen. If you're new in your career, dreaming about starting your own business or already an entrepreneur, The Badass CEO podcast is for you. I want to give you the drive and tools needed to succeed in following your dreams.
Mimi MacLean:
Before we get started today, I wanted to tell you about a great company I found that takes the stress out of all the legal stuff we hate to do. Corp Net helps me out with all my incorporation documents, trademark searches, and filings, and keeps me compliant for state and federal filings. Corp Net makes it super easy and is reasonably priced. I even have my own Corp Net representative to call on when I have questions. I wish I'd found this company sooner. I would have saved money and slept better knowing that I filed all the right forms for my company. To learn more, go to thebadassceo.com/coronet.
Mimi MacLean:
Hi, welcome back to The Badass CEO. This is your host, Mimi Mac Lean. And today we have Ellis McClure, and she is the CEO of Territory Foods. Ellis has an amazing background in consulting and retail, supply chain, merchandising and operations, and made her the perfect fit to take over as CEO of Territory Foods. Territory is a healthy food meal planning and delivery service, but what makes them different from the rest is their technology that they have built to serve the customer and deliver high quality food locally, by your favorite chefs.
Mimi MacLean:
Today, we touched on the importance of knowing your customer and using technology to serve your customer. Territory has seen 250% increase in sales over the past year. So I'm excited to talk to Ellis today about her background and how she has propelled Territory sales during a pandemic.
Mimi MacLean:
To get your top 10 tips. Every entrepreneur should know, go to the bad-ass ceo.com/tips.
Mimi MacLean:
Ellis, thank you so much for coming on today. I'm excited to hear about your journey with Territory and you being the current CEO. So thank you so much for coming on.
Ellis McCue:
Thank you so much for having me. I'm really excited to be here.
Mimi MacLean:
Awesome. I would love to just hear a little bit about your backstory and then what brought you to Territory.
Ellis McCue:
For sure. I started my career in consulting right out of school and into the technology consulting. And from an early time I started to build this hypothesis on complexity and how complexity was only really worth it for businesses if they could drive consumer value out of it. And I started looking from even at an early, early time in my career about looking at the models that you saw for different marketplaces, different systems, different companies, and saying, why are these complex and how do we simplify and how do we make things better for the consumer?
Ellis McCue:
I spent about six years with Deloitte Consulting. It was an amazing, amazing place to start my career. I cannot recommend it highly enough, but after six years, I kind of knew that partner track wasn't really, for me, I really wanted to own something. And so I went over to Gap Inc. I was living on the west coast in San Francisco. And Gap is just such an incredible company. Mission driven, just at its core has a heart to it, which is so important. At that point it was six different portfolio brands so it was a very, very complex operating environment.
Mimi MacLean:
Was that Micky time?
Ellis McCue:
No, it's post Micky. But it was a really interesting moment because a big pivotal shift was happening in the world of retail in the United States. And there was this big move into the direct to consumer world, right? And what you see is that in San Francisco specifically, there was like Bonobos, Ever lane, Roth's, all these amazing DTC companies coming up and Gap Inc, is this massive multi-faceted giant that is operating yes in the us, but also in over 50 other markets. And my purview was in the 44 markets that Gap Inc didn't wholly own. So operating in the franchise world and the international space.
Ellis McCue:
And it was just so interesting because what you had with franchisees was this group that really knew the customer and they were talking to the customer really directly and they knew the Saudi Old Navy buyer. They knew who that person was. They knew how she shops. They knew what she wanted, what she didn't want. And for me, it was incredible because it started to say, how do you build a business and how do you build a retail business that knows the customer and gets really intimate. And when you do have complexity in your supply chain and get the franchise supply chain is a very complex one, as you can probably imagine, how do we make sure that every bit of complexity drives extra value to that consumer in that end?
Ellis McCue:
So I was there for about three years and the majority of my time was really spent trying to make the whole thing faster and more consumer driven and saying, how do we take all this new knowledge about DTC and how do we bring it forward in these interesting international markets? But had the pleasure of working with just incredible franchisees around the world, [inaudible 00:05:19] FJ Benjamin like the really big names. So it was incredible time. I moved during that time to London as well, and worked with the business development team for the franchise business, which was great. It was my first time working less on the systems, finance operations side and more in the world of business development. We launched Gap India, which was a crazy experience and the Old Navy UAE, and started experimenting with what did people really love about the Gap brands in the Middle East and in Southeast Asia? And how could we capture that and bring it back to the United States and how could we make everything just move faster?
Ellis McCue:
Because that's the really interesting thing about a lot of DTC brands and certainly about fast and those Saros of the world is they move fast so they can be consumer driven and consumer led. But when you're talking about a normal supply chain, it's six, nine, 12 months, it's pretty far from the consumer intent. So the question is, how do you make it all move faster?
Ellis McCue:
So I had moved to London, I lost my visa because of Brexit came back to the US, landed in New York and kind of said, "Okay, what's next? I've learned so much about how to change a giant global supply chain. I've got this bug for DTC businesses. What am I going to do with that?" And I was headhunted by a company called ZX Ventures. And ZX ventures is the venture capital and innovation arm of the AB In Bev. And they were really looking for somebody that had finance supply chain operations, P and L management and merchandising. And there just weren't that many of us around is my theory. When I met the recruiter, she was like, "Oh, you may be perfect for this." And they were looking to build a business through ZX Ventures, which was their venture capital and innovation arm of AB In Bev. They wanted to experiment, they wanted to do something really different. And I started and they handed me a laptop and they were like, "Go build a business," which is the coolest and weirdest thing.
Mimi MacLean:
They didn't have a business at that point?
Ellis McCue:
No, they had a lot of business. They're a $58 billion business, but they have-
Mimi MacLean:
What I'm saying they didn't have a specific one for you. They weren't like, "Okay, we're putting you in as the CEO, whatever.
Ellis McCue:
Exactly. And it was a really interesting hypothesis they had that people would love the brands more if they could buy other things from them. So if you are drinking beer out of a branded glass, you will only drink that beer and you'll have more love for it because it sits in your shelf. Or if you're wearing a T-shirt that has a brand on it, it's because you love the brand and it's like, you're thinking about it all the time. It's a great hypothesis in terms of, how do you take giant brands and make them even bigger? And it was so much fun. I built a business over two years. I won't give you the exact revenue amounts because I can't share them, but it was super high growth.
Mimi MacLean:
And what business did you actually grow?
Ellis McCue:
So I built a merchandise business, business around the brands. So basically across 14 different categories, housewares apparels, food, a lot of apparel, as you can imagine, ceramics, things like that around these brands largely direct to consumer. So the first year was five direct to consumer websites all throughout south America. And then the second year was all over the world across nine different geographies and grew it to tens of millions of dollars in completely new sales, through products that were just related to the brands. And it was just amazing. I'll give you an example. It's easier to think about it with a specific example.
Ellis McCue:
So our team, myself and a creative director, we would land in a market and we would grab a local person who knew the brands really well. And we'd say, "Okay, who do we have in Belgium?" And we would say, "Okay, we have a portfolio of 20 different brands. Let's pick one, let's pick Effete." And Effete is an amazing abbey beer that's from Belgium. It's got a ton of history. It's like 400 years old. "And then let's go see who, who drinks it, who buys this." And so we do a customer safari and we'd get deep into that customer's mindset. And we'd say, "Okay, it's a 45 to 55 year old man. He's drinking one after with his friends. And then he switches to wine because of perception that wine pairs better with food and that beer does not." And so we said, "Okay, how do we stop that switching behavior? And how do we sell the customer something in that moment where they love the brand, but they're about to stop drinking it?
Ellis McCue:
So we built a beer wash cheese program, and we basically showed the customer through a product that they could stay with beer through the snacking and through dinner. And we turned one consumption occasion of beer into three and then sold a bunch of cheese alongside it. And that's what we did 3000 times, 3000 skews.
Mimi MacLean:
Oh, that's amazing. Now in that instance that you're talking about with the cheese, did that mean you went into the cheese business or did you actually just joint venture with the cheese company?
Ellis McCue:
So actually, we do have license. So lots of licenses in joint ventures, as you can probably imagine, AB In Bev would not be into buying a cheese company, for sure. But really it's where I found my experience in commercial dealings with franchises came out so, so, so importantly, because the whole deal between a joint venture franchise or license is that both sides have to be able to make money off of it. Both sides have to be able to make real businesses otherwise, there's not a business there. And so no, we did not buy a cheese factory, went out and found a best-in-class producer called Valencia. They are incredible, very easy to work with, lovely humans, just such great pride. We did tons of iterations and tasting and branding and activation, and it actually won a golden Archer award, which is a cheese award in Belgium.
Ellis McCue:
So I'm super proud of the product. It was about two years just to get it launched or one and a half to get it launched, but it was just such an incredible moment of saying, "You have this brand richness, you know the customer, how do you build something amazing for the customer?" So I was traveling a lot for AB In Bev, as you can probably imagine all around the world. So, China, Korea, Australia, routinely, and then all throughout Latin America. So Brazil, Argentina, Colombia, Mexico, and the little Germany, UK. I was on the road 75% of the time. My health and wellness had kind of fallen apart, as you can probably imagine. There are a lot of late nights drinking, a lot of delicious beers for work and then a lot of overnight trips and overnight flights and things like that.
Ellis McCue:
And so after a couple of years, I was basically like, "Let me take a beat and let me think about what I'm trying to learn. And let me think about what I'm trying to be and what do I want to do with my career?" Because similar to how I felt at Deloitte, I could have had a great career at Deloitte could have great career at Gap, could have had a great career at AB In Bev, but I always had this kind of itch inside of me to do something bigger.
Ellis McCue:
And so I just casually started looking through LinkedIn and I saw this company called Territory. And I wasn't really sure what they did. And I was like, "But this is cool," because it was food and it was health and wellness, which I was really passionate about. And I'd really been thinking critically about my own health. And I met the founder Patrick, and he just had this incredible mission to make people healthier. And he had found this really interesting way to do it. So Territory, we are fresh prepared meals. So we're fresh food platform that delivers... 99% of what we do is fresh meals, but originally born out of this dream of Patrick, the founder in the world of paleo and CrossFit and how do you make it really easy to eat well? And that had over the first six, seven years of the business really evolved to serve a lot more people than just the paleo Cross Fitter.
Ellis McCue:
And when I came into the business, there's this critical inflection point where they really needed somebody who knew how to scale businesses, had the experience of doing things at scale, but then had that deep empathy for the customer and the consumer, and really like say, "Who is this person? And what do they want and how do we do better for them?" So I came over in 2018 and it was the best decision I've ever made, for sure. Definitely one of those moments when you go from big business to small business where you're like, "Oh no, what is this going to be like?" But just right off the bat fell in love with Territory. And I'm so privileged to be leading the team.
Mimi MacLean:
That's an amazing story. And I would love to just dive into, because you don't often see a founder step aside and let somebody else come in and be a CEO. So could you talk a little bit about that decision for Patrick?
Ellis McCue:
Yeah. I mean, founder transitions are so, so, so hard and I think it wasn't easy for Patrick either. When I came in the business, I alluded to how the model worked a little bit, but it was founded originally with the paleo Cross Fitter in mind. And so the majority of the business actually was delivered through CrossFit gyms. So the original business model is very, very good business model where they said, "We make paleo food for CrossFit. So we're going to go out to all these CrossFit gyms," and they would do a workout with a CrossFit gym owner and they say, "Hey, we're Territory and make food for Cross Fitters. Can we put a fridge in your gym? You get a commission on every sale that goes through, and then we'll feed you and your staff or a significant discount, if not for free." What small business owner wouldn't take that deal? That's a great deal.
Ellis McCue:
And so the business started in 2011 and from 2011 to about 2016, '17 operated in that space without any competitors, amazing and figured it out through grit and built this incredible community around CrossFit. But what you see in 2016, '17 and into '18 is there's a bit of a change in the world of health and wellness on the culinary side, paleo definitely had started to fall out of favor. And paleo eating is really the first kind of commercialized generically healthy eating. Before that, I would say that most of healthy eating was focused very, very much on weight loss. So like south beach diet was about weight loss, not about optimal health. Then before that it's like Snack well's a hundred calorie packs and things like that. It's like very diet, weight loss focus. Whereas paleo eating was really about balance and it was about your health.
Ellis McCue:
It's a very big change in the commercial understanding of how what you put in your body impacts your health. So that was what was happening on the culinary side of the house. In the world of fitness, there's a big shift out of the world CrossFit and into boutique fitness. So this is when you see berries, Pelotona, flywheel, Soul Cycle, everybody's starting to come up and there's a lot more hyper diversification and what people are interested in. So people are rabid about Bikram yoga. I love a Pelotona, there's a lot of different diversity. And so how do you scale a business that's so, so hard asset based and so, so community-based in a hyper diversified or fragmented fitness landscape?
Ellis McCue:
And so the territory team in 2017 had launched a kind of direct to consumer offering. It was quite small. There was actually no marketing team until 2017 and the company was founded in 2011. That's amazing. And it's such a testament to the founding team and the grit that it takes to build a business. But I think they knew at that moment, they needed to like resource differently to scale. So they took venture capital dollars. They resourced differently. That's why you take VC dollars and they wanted you to see business at the very end of 2017. And what happened was when they placed their first ad on the internet, which was literally November of 2017, no exaggeration, there was this magical marriage of the supply side that was really hyper diversified, like paleo and keto and whole 30, and all this diversity that had been built as the paleo trend had kind of gone down. And then on the demand side, there's all these people looking for the solution, but they weren't in CrossFit gyms.
Ellis McCue:
And so now there's this perfect marriage on the internet and the business just takes off. And that's a foundational change of a moment for a founding team because if the business was linearly scaling up until this point, and then it completely takes off, it's a different customer, it's a different business model and the customer wants something different. They want a more premium products. They want something from restaurants that they've heard of. They want more fitness content that you don't want to have to pick it up at a CrossFit gym. They want something really different. And so I came in at that pivotal moment of change kind of after the first big, big, big push into direct to consumer and Patrick, coming through a whole year of growing the business in this direct to consumer way, growing, essentially two businesses said, "It's going to take a different set of skills to grow from this moment forward than it took for the last six years."
Ellis McCue:
And so he made the very, very hard decision to step out, which is never easy. And it takes a ton of empathy in terms of the leadership, the way you transition teams. We have a great relationship. He's like my first person on my text chain right now, for sure. And that's really important too, because I think-
Mimi MacLean:
Is he still involved?
Ellis McCue:
He is not formally involved, but he is an advocate, absolutely. And the consumer and all those wonderful things. And we stay very, very, not closely in touch, but we stay in constant communication because so much of his vision lives in the business today. And even though we are in a different place than when he left, it's just important to keep that heartbeat back there.
Mimi MacLean:
Yeah. That's great.
Ellis McCue:
So it's definitely tough.
Mimi MacLean:
You mentioned something about the consumer wanting to be able to purchase from restaurants they recognize, or just something that's familiar to them. So I think you have done that by reaching out to chefs.
Ellis McCue:
Yeah. Absolutely.
Mimi MacLean:
Can you talk a little bit about that strategy?
Ellis McCue:
Absolutely. So Patrick founder, who's a software engineer, who's not a chef. So never in his mind, was he like, "Oh, I'm going to go buy a kitchen." So every other competitor that you see out there is a vertically integrated model. So let's see if you've seen Freshly, they're kind of like the biggest dog in the room. They just got a recent acquisition for Nestle by a $1.2 billion transaction, very, very newsworthy all the way down to like [inaudible 00:17:53] , which is kind of niche, but very, very like health is beauty and a gorgeous website, everything like that, they're all vertically integrated. And what that means is that your orders come in and everything is made, produced in one central facility and it goes outbound via UPs or FedEx. So essentially when you're ordering Freshly on the West Coast, is the same Freshly that you've got on the East Coast, because it's named in a factory. And that's not bad. It's just how a lot of food is made. That's how CBG works. Consumer packaged goods.
Ellis McCue:
Territory, we have a completely different model. So we have software that connects a network of chefs, but we started with one chef who was making paleo food and we built up commercialization platform for it. And then as paleo became, primo, became keto, became whole 30, became plant-based like all the hyper diversification that happens in the way of healthy eating, we just got to adding chefs. And so it's amazing because what it allows us to do is to flex into a lot of different supply. But what it also means is that all the food is made locally, which is super important for your local economies. So if you're ordering in the New York Metro area, the food is made in New York. It's very important because it keeps your dollars local, drives more of this amazing DTC economy to the local world. The food is fresher. It's better for the environment because it has less of a carbon impact, meaning you're supporting local businesses, which is amazing.
Ellis McCue:
And so for us in the 2018 timeframe, when I kind of came in, or I was doing a lot of customer interviewing and was finding that people loved the chefs, but they didn't actually know very much about them. And they didn't really know anything about the restaurants. They never visited the restaurants or anything like that. And so we started to say, what if we brought in more brand name chefs? And said, okay, if you love Cafe Gratitude in Los Angeles, or you love Butcher's Daughter and also Los Angeles, but then also New York, if we bring in the mentor network, what does that mean for them as businesses? And what does it mean for us in terms of saying like, "Hey, why believe in Territory versus any of the other thousands of choices that you have in our category, which there are many?" That's why we built a chef network because you recognize the name of Butcher's Daughter. You recognize the name of Cafe Gratitude, and you say, "Oh, those are brands that care about quality. And I care about quality too. Therefore, he understands that Territory cares about quality."
Ellis McCue:
Because quality in this space is very, very hard to message. And it's super hard to communicate with the customer through the digital world about food. Now, everybody can put a shingle on the internet and a nice photo of something on a marble background and say, "This is delicious," but until you eat it, you don't know if it tastes great. Until you know what's inside it, you don't know if it's sourced well, and until you know how you feel after eating it, you don't know if it's going to work for you. So for us, it's about how do we make it real for the customer before that purchase moment so that they understand that what they're getting with territory is amazing.
Mimi MacLean:
That's amazing. But now how do you... I mean, that just seems like a logistic nightmare just thinking about that. How do you make sure that what they're sending as far as quality control or brand and packaging is uniform throughout?
Ellis McCue:
Yeah. So remember how I said in my first learning as a consultant was, if you have complexity, it has to drive value to the customer. It definitely is complex, but it really drives value to the customer. And for us, our business just looks really different than other businesses in this category because we have super, super early investments that we keep investing in terms of operations and food safety and technology that no one else does. So when you come to territoryfoods.com, it's not just an ordering portal that you're coming to. It's our master, right? Because we're doing a lot from that space. And so we have made big investments in remote food safety. That's our number one focus always is keeping the food safe. It's incredible. And we're using leading edge technology. I actually just spoke at a food safety technology conference that I think people were like, "I can't believe you guys figured this out," which is really cool.
Ellis McCue:
And we were ahead of the game and actually working directly with the USDA and FDA to talk about what we do and how we believe we're leading edge. We're very, very proud of that. And then in terms of commercialization and logistics, we build a lot of systems around just making sure things are on time that have complete visibility into what is in every package. The way it works for the chefs is we actually keep it super easy for them. So we have all the packaging, all the branding, everything like that, that they have at their restaurants already so that we know everything is going to be consistently branded. And then we actually own the logistics from the chef inbound to pick it, pack, and it goes outbound to the customer. And by owning that part of the chain, it's really powerful because we can deliver a great customer experience. So it's not the cheapest way to do it for sure. And it's more complex, but it gives the best customer experience. And what we hear over and over from customers is, "I can always count on Territory."
Mimi MacLean:
So in your example of the Cafe Gratitude, so the chef from Cafe Gratitude, is he actually making the meals at Cafe Gratitude, or have you just taken his recipes and have made it somewhere in LA?
Ellis McCue:
No, no, no. He's actually making them through Ellis's phenomenal chef, and they're actually making them in Cafe Gratitude.
Mimi MacLean:
Oh, yeah. Interesting.
Ellis McCue:
And it is amazing. And what they do is our business model is designed to be during dark hours. So we always want a restaurant to be focused on being a restaurant because that's what they do the best and that's what their bread and butter is. And that's what they really should be focused on. And so what we do as we build a production cycle that happens after hours. And so they can double utilize their lease and their labor and things like that because the margins at a restaurant are very, very small. And so we say to them, "How can we help you get more out of your margins, come onto our platform. You can serve not just Los Angeles, but you can serve almost the entirety of California through our logistics network and how do we make that even bigger for you?"
Ellis McCue:
So it's an incredible opportunity for the restaurants to be a part of us because we really extend their brands and drive brand awareness for them. But we don't fight with them for service because we want to make sure that you as a customer are getting the best in restaurant experience when you're there versus a seamless or door dash where there's like a whole bunch of seamless people waiting to pick up and the restaurant's just struggling to make the orders. It's a bad experience for everybody and the restaurants don't love it. So we've developed a business that fits right next door to it.
Mimi MacLean:
It sounds very, very capital intensive, your technology. I know how expensive that is. So you mentioned originally that you had venture capital from the very beginning from Patrick raised. And what have you done since then? I'm sure you had to continue raising money.
Ellis McCue:
Yes. Absolutely. We actually just closed the $22 million series B and at the end of last year, which is amazing. And I went on raised that and it was incredible. It was an amazing experience. I had also raised a extension in 2019 before that, but it was just this amazing moment. How do you raise capital in the middle of a pandemic? It was incredible because so much-
Mimi MacLean:
But there are Zoom calls, right?
Ellis McCue:
A lot of Zoom calls, but so much of the investing process is emotional for investors. They want to believe and they want to feel that personal connection. And if you find investors that are willing to place capital without believing, they're probably not very good investors and you probably don't want to take that money. So basically for us, entering 2020, we did not know what the year was going to look like. All of a sudden there was a pandemic. We actually saw it very early because as I mentioned, we're very safety focused organization. So we had a business continuity plan starting in January. And we said, "Okay, we don't source any food from China," because we knew there was a virus coming from China. "But what about our containers? What about our boxes? What about our branding? What about all the things in the supply chain that could come from China?"
Ellis McCue:
We confirmed, we had all US-based sourcing. We said, okay. And then we just started to say like, what will happen if, and when this comes to the United States. So we were out ahead of the pandemic with extended HSA plans, which is kitchen safety for all of the kitchens that we have extended. Just how do you manage staff in this environment? How do you manage temperature checks? We need advisory to all the kitchens on that. And it was an incredible time to be part of a network because we had owners of these restaurants and caterers and things like that coming to us and saying, "Hey, please help us. [crosstalk 00:25:35] We don't know. We don't know." And so we really were like, this is our moment to the excellent and our team stepped up and I'm so proud of the operations and safety team. They did an amazing job.
Ellis McCue:
Anyhow, so in 2020, we weren't sure what was going to happen. We said, let's make sure that we have a great business. Let's avoid layoffs. Let's do all the same things that every other small, medium business thought. And then the business really started to pick up. And basically before the pandemic, two to 4% of American consumers were ordering direct to consumer food. In the pandemic, that jumped to 10 to 12%. And now at 14. And what that is, is a rapid adoption of new technology that we have never seen in the world of food.
Ellis McCue:
And this actually reminds me of my time at Gap where all of a sudden there was this rapid adoption of se-commerce was much less rapid. It happened over years. But what I learned from that experience is that once the consumer shops se-commerce, they do not go back to the store to shop. They go to the store for experience. They go to the store for discovery and what they want of those physical stores is really different. And I really believe we're at that same place with food where now that the customer has Instacart, they have Territory, they have Meal Kits and they have, seamless. What is the utilization of the grocery store? What is the utilization of the restaurant? What are those spaces and what are they designed for?
Ellis McCue:
I really believe that people will go back to restaurants. I live in my neighborhood. There's restaurants, everywhere. People are back at restaurants, right? I'm back at restaurants. But I think now for the convenience food and the convenience idea-
Mimi MacLean:
For cooking, why?
Ellis McCue:
For cooking-
Mimi MacLean:
Why would you ever go cook again? I mean, by the time you buy the food and prepare it...
Ellis McCue:
And the waste, right? I think the biggest thing with cooking is that it's very rare to hear, like I used everything and that's why Meal Kits were so popular in 2019, 2020 because people said, "I get so much waste. If somebody can just tell me what to do with every single thing that I have and give it to me in perfect portions, then I won't have any waste." Meal Kits did that, but everybody gets bored because very few people have time because at the end of the day, you still don't have like 30, 40 minutes to cook food. And if it's that short, so we see this rapid adoption through the summer of 2020, we did so many things for our customers. So 99% of what we sell is fresh prepared meals. We dabble in some CPG products like cold brew coffee.
Ellis McCue:
We're working with an amazing vegan kosher soup company here on the east coast. But during the pandemic, we had customers writing us and saying, "I need groceries. And I love Territory, but I can't eat any more Territory or I can't afford any more Territory. I cannot go to the supermarket because it's 45 minutes in line. And then I don't know what's going to be inside." And so we actually pulled on the fact that we have a completely different supply chain. And for a very short time, we shifted grocery boxes and we rapidly said like, how do we just leverage what we have, which is an amazing operation and amazing business and how do we keep our customers healthy? And so we did, and now that business is shut down because it's not our core business, it's not our core focus, but definitely going out the summer into fall of 2020, I said, the business is in incredible shape. We were growing very, very fast. We grew on 250% year over year, last year. So really fast, rapid growth market forces, great product, all the things like everything you want.
Ellis McCue:
And so I said, I'm going to go out and raise some capital. I found an incredible group of investors that came in on this round, I cannot speak highly enough of the folks that we brought in and our lead investors from last round came in as well. So it was a really amazing moment for territory to properly capitalize, but then also bring in these new, amazing voices. So Rick Lewis from USEP led the round. USEP is like a leader in data backed curated marketplaces, which Territory is and how do we figure out the right assortment and make the right recommendation?
Ellis McCue:
Rick is just an incredible human and incredible thinker in that space. So really lucky to have him. Then STG Ventures came in as well. STG is like a leader in green technology, food as medicine, all these really, really incredible spaces. Finisterre Ventures as well. They're a leader in Magritte and then a new fund called Rethink Food, which is like an incredible group of people. A lot of ex Pepsi people in a couple of fund managers that came in and said, "We want to change the way people think about food and we want to make every choice of healthy choice." And so when I look at these new investors that came in, it's really emblematic of where we are right now which is Territory starting this very niche market. Let's call it niche, niche, payload Cross Fitters is niche. But now the world understands that what you can do is transform your life through what you eat.
Ellis McCue:
And it doesn't have to be hard work. You don't have to be in the kitchen all day to do it. You don't even need to know because there's services like Territory out there. And so what we do next is we take that forward and we go even further with the customer to say, let's make it the right personalized way for you to eat healthy, based on what we know about you, based on how you move based on how your blood works, based on all the different things that are special about you, so that we can keep you on track to wellness. And if you have a specific goal, if you're trying to lose weight, sure. We'll help you do that. But really thinking much more about the big picture of empowering our customers.
Mimi MacLean:
Right. As you said, this space is very competitive and saturated. What have you done to get customers, your marketing strategy?
Ellis McCue:
Yeah. I mean the space is incredibly saturated and in 2020, I think we saw like 50 new competitors come up. And it's exhausting. Oh yeah. It's a huge space. Because quite frankly, anybody can throw a shingle on the internet and say they have a food business. That's the truth of it. What we do to change things for our customers is we consistently deliver a high quality. And I know that sounds, it's not a marketing strategy, but is the strategy because when it comes down to food, it's very, very intimate. If you get something that you don't like, forget if you get something that makes you sick, but if he gets something that you don't like, you're not getting anywhere and you're never going to reorder and that trust is broken and all those marketing dollars that you spend on any type of messaging, they're just completely wasted.
Ellis McCue:
There's no other category like this. If you buy a beauty product and it doesn't work or a lipstick you don't, you're kind of, "Well, I probably picked the wrong color and I'll try it again." And like, "I'm not going to hate the brand forever because of it." Food is completely different. Food is very emotional. It's very fast moving. So it's quick decisions and quick emotions. So what we do is we focus on a longterm relationship with the customer and we find them at these critical moments where they're making a life change. So if you're having a new baby or maybe you just got diagnosed with high blood pressure, or maybe you want to lose weight, or maybe you are just going insane with a toddler at home during the pandemic. And that was definitely me during this entire pandemic, we find you at those critical moments in your life, when you're starting to say, "I should be treating my body better."
Ellis McCue:
Now, the pandemic has accelerated a lot of that. You can walk through the store and you can see like immunity tea and the normal tea section. Before 2020, that wasn't a thing. Right? And so now people have a more awareness. What we find them in these small niche pockets where we have very, very strong relationship with them right off the bat because they're looking for information, we usually will approach through actual education about eating well. We have over 250 different blog articles that we've offered over the last six to 10 years because every time a new trend comes up, we blog about it. We do a trial. We do the research. We have six dieticians on staff. We have a lot of real information in a space where there's a lot of fake information.
Ellis McCue:
And so what we do is we try to create that real relationship with the customer from the beginning, we introduce our brand, but our brand is hard to message because the brand of brands, right? We've got Territory, we've got a lot of chefs are always just playing with that differently and finding the right balance of that. And then for us, we really just try to get food in front of the customer as soon as possible, because we really believe that trying is believing and seeing is believing and in the category where there's a lot of competitors, the best thing you can do is make it a great first experience. And so we really focus on that.
Mimi MacLean:
And so how are they even getting their first experience? Is that word of mouth from a prior customer or are you guys advertising online or...
Ellis McCue:
So it's a good mix. Previously, we were almost 100% word of mouth brands before 2017. And now we do a fair mix of digital marketing, things like that. We've dabbled in out-of-home and other media mixes and things just to drive awareness. But we find the best channel for us is absolutely still referrals. Because when you have a good experience, you're definitely going to recommend to a friend. So we focus on a balance of all of those things, but definitely playing the digital media game, it's just an expensive and crowded place. So we love word of mouth and we love authentic connections.
Mimi MacLean:
That's great. So Ellis, what would you say for anybody who's listening, who is either a female entrepreneur or a female working and wants to become a CEO someday? Any advice that you have for them, anything that you've learned that you wish you knew before?
Ellis McCue:
Oh man, so many things. It's like another hour podcast.
Mimi MacLean:
I know, right?
Ellis McCue:
I think the first thing is going to sound like trite, but you really can't give up. You really have to just keep going and it's not going to be spots and dots. It's neither a marathon nor a sprint. It is a relay race. And a lot of times, if you're the CEO, it's a relay race with yourself where you're like, "Okay, I'm going to get through this, I'm going to take a beat. I'm going to do the next thing." And you really have to just keep going and find the thing that gives you energy. If you are not happy, you're never going to have that energy. So you should go find a thing that gives you energy. I told you, I've always loved health and wellness. It's been a personal passion of mine. And if you can marry an application with a vocation, you have one. And that's what's going to give you energy every single day.
Ellis McCue:
So you can't give up. I think people get... I mean, I get tired. Everybody gets tired, but you just have to remember to keep going and you always have to challenge yourself. I think it's easy to just say, "This is someone else's fault. This is someone else's responsibility." And if you want to be CEO, that's just not going to work. You have to take personal accountability and drive forward and say, "Everything is, yes, my responsibility but it's also someone else's responsibility. Usually you don't want to own everything, but really find that personal accountability to drive results over the line and just keep at it, keep at it.
Ellis McCue:
So find the things around you that make that easier. Territory makes it very easy when you do not have to think about how you feed yourself and your family, very healthfully. Find your team of products and services and humans that keep you going every week and then lean into them and love them, and just say, "This is who I am. I'm going to own it. I'm going to keep going. And I'm going to figure it out." I really believe that women have a crazy capacity to figure things out when they just keep on trucking through.
Mimi MacLean:
That's great. That's amazing. Thank you so much. This has been an amazing podcast and to hear everything about what you are doing and what you're up to. And so for who wants to try out their food it's territoryfoods.com is where you can find different depending on where you are, there are different offerings. And-
Ellis McCue:
That's right.
Mimi MacLean:
Yeah. So this has been amazing. I'm excited to try it. But thank you very much. I really appreciate it.
Ellis McCue:
Thank you so much Mimi. It's been great to chat.
Mimi MacLean:
Thank you for joining us on The Badass CEO. To get your copy of the top 10 tips. Every entrepreneurs should know, go to thebadassceo.com/tips. Also, please leave a review as it helps others find us. If you have any ideas or suggestions, I would love to hear them. So email me@mimiatthebadassceo.com. See you next week and thank you for listening.