How Burlap And Barrel Built Growth Without VC Money

Your spice cabinet is probably lying to you and your financing offers might be too. Keith Kohler sits down with Ori Zohar, co-founder and co-CEO of Burlap and Barrel, to trace a 10-year path from packing spices in a Queens living room to building a nationally known single origin spice company with a real social enterprise backbone. We talk about what “single origin” actually means in spices, why supply chain transparency is still rare in this corner of the food industry, and how direct relationships with farmers can raise quality while creating mutual long-term value. 

We also get brutally practical about small business finance and CPG cash flow. Ori shares the bootstrap reality of reinvesting instead of paying yourself, the moment minimum wage feels like a milestone, and why they chose profitability over venture capital even after going through Techstars. We unpack the working capital challenge of paying farmers months before revenue shows up, how a bank line of credit can match seasonal inventory needs, and why factoring and “fee-based” cash advances can quietly behave like high APR debt that wipes out margin. If you run an e-commerce brand, the retention lessons land too: spices are low-frequency purchases, so the team expands breadth with salts, blends, and pantry products to keep customers coming back. 

Then the story gets bigger than food. Ori explains Burlap and Barrel’s public stance on tariffs, filing legal briefs, and joining litigation as a small business voice, plus what that experience teaches about risk, joy, and building for the long term. If you care about ethical sourcing, direct trade, bootstrapping, and smarter financing decisions, this conversation delivers. Subscribe, share with a founder friend, and leave a review with your biggest question about funding growth.

Connect with Keith on LinkedIn - https://www.linkedin.com/in/keithkohler1/

Transcript

Welcome And The Show’s Lens

Keith Kohler 0:03

Hi everyone, it's Keith Kohler, your financing man here with the latest edition of How I Financed It. And again, by way of background, as your financing man, I help clients get the right financing at the right time. That's Transaction Me. And I meet you where you are and guide you along your financing journey. That's Transformation Me. And so transaction and transformation equals financing man. And as you know, on our podcast, what we do here is we talk about companies' journey and the entrepreneurial journey from origin to where they are today with a focus on how they finance their business. And then we just see where the conversation goes from there. So today promises to be a bit spicy as I get to offer or welcome Ori Zohar from Burlup and Barrel. So would you please help me welcome him to the How I Financed It stage? Ori, welcome, welcome. Thank you for having me. Yeah, it's really a pleasure to have you uh come and join us with this conversation. And as we

From NYC Ice Cream To Spices

Keith Kohler 1:10

start out our conversation, I always start with uh a bit of the origin story. So I'm excited to learn from you about how you got started, what motivated you, and what was that initial financing that got you out of the gate?

SPEAKER_01 1:22

Yeah, excited to dig in. Um, and even we're we're a company that's been around for uh we're turning 10 years old this year. But um I think one of the really cool things about entrepreneurship in America is that 98% of America cannot even know that we exist and we can still be like a healthy, thriving, wonderful company. So without further ado, um, my company's called Burlap and Barrel. We are a single origin spice company, a social enterprise. I'm the co-founder and co-CEO of it, along with my buddy Ethan. Um, and basically we started 10 years ago, actually, even before that, Ethan and I were friends for a long time. We were both living in New York City. He was cooking, he lived over a little tofu factory in Chinatown. And whenever he was cooking stuff up, I was there. You know what I mean? You we all have that friend that like just knows how to put a meal together. Um, and so we became friends over time. He started working at restaurants in New York City. Um, and he got a job as a pastry chef in one of those restaurants. And he said, I want to start some kind of crazy ice cream cart, maybe ice cream sandwiches, I don't know what. And everybody said, talk to Ori, he's our business friend. And so my background is, you know, I came here, my family moved here when I was five years old from Israel. We grew up kind of in this immigrant story, but I think that that really sets the framework for entrepreneurship. Um, but Ethan and I became friends, we started chatting, we ended up starting a social enterprise called Gorilla Ice Cream, a little insurgent ice cream car that we pushed around the streets of New York City. Um, and we donated all of our profits, including money that would have been our salary, to the street vending project, a little nonprofit that was uh fighting for street vendor rights in New York City. From that, we saw that we liked working together. You know, I think there's two archetypes of entrepreneurs. There's the like um inventor archetype, the kind of subject matter expert, and kind of the business expert. And kind of Ethan and I both both like represented these two halves. Ethan knowing so much about food and cooking and flavor and taste, and me coming from a kind of a business entrepreneurship and even marketing backgrounds. I was working at the big ad agencies at the time. From there, Ethan went, got his master's degree in international development in London, moved to Afghanistan as an aid worker, and we kind of stayed in touch. I decided that it was time for me to do proper entrepreneurship, not just an ice cream cart, which by the way gave me four cavities at the end of that summer. I figured I'd kind of see what I could do. And I ended up starting uh FinTech, a mortgage company in the Bay Area. I met actually through Ethan's ex-girlfriend, uh, these guys had started a company in Switzerland, and uh they ended up providing our seed funding for what would be a four-year kind of whirlwind journey. We started this company trying to help people through this mortgage side, like biggest financial decision most people make. Nobody knows what APR is, nobody knows what points are. I mean, you do, Keith, you know, but uh but most people don't know how to kind of guide through this process. We ended up raising $32 million. Wow and we ended up going not out of business, but kind of selling right before going out of business. We ended up selling to one of our investors for a lot less than what we had raised. And that was really four years of cutting my teeth and entrepreneurship and figuring out what to do, but mostly what not to do. And that was right when Ethan kind of came back, like physically, kind of into my life. He was back in America, he had been an aid worker in Afghanistan, he had brought back this incredible wild mountain cumin that grew in the in the in the hills of northern Batakshan in northern Afghanistan. And all of his chef buddies were like, oh my God, this is the best cumin we've ever had. And that was kind of the first light bulb moment of saying, wait a second, if chefs have access to all the best ingredients and know their butcher and cheesemonger and all that stuff, they don't know anything about spices. There's an opportunity here. Um, and Ethan and I had talked about is this our next business? And we kind of said, listen, we can't build a cumin business. Let's see if we can get the same reaction from other spices that Ethan can source. So he went around and he met a vertically integrated cardamom farmer out of Guatemala that was also growing chilies and all spice and limes. And he met an organic spice cooperative in Zanzibar, the spice islands, um, that were growing world-famous cloves, nutmeg, these really spicy, teeny tiny peppercorns. I don't I don't remember which of these I said you keep the head of this, but uh, but tried to give you a little flavor of all that stuff. And then he came back and visited me in San Francisco where I was living at the time, and we started a restaurant, Nopa, uh, before service, they invited us in. And Ethan just started pulling these like bags of spices out of his backpack, and the chefs were falling out of their chairs, and we kind of knew that there was something here. Single origin had happened in so much of the rest of the food world. People go to farmers markets and you buy your cheese from your cheese shops and all that stuff. You know where your grains come from and your coffee and tea and chocolate comes from. It just hasn't happened in the world of spices, and so that's what we kind of set out to do. And just for what it's worth, this will tie to our kind of financing conversation. But Ethan came from a nonprofit background kind of segment of his life where he was like, Oh, I was so frustrated. We had to do all this paperwork and all this stuff, and we weren't actually building kind of like economic prosperity in these areas. We were doing projects to kind of help the people. He was kind of frustrated by that. I came from a VC PE background area and was like, oh my God, these investors will eat you alive. Um, I don't want to do that. That's not a good way to build a kind of sustainable business. So we kind of came together and decided to start Burlap and Barrel as a social enterprise. Um, that's kind of a blend of nonprofit for-profit. We're a public benefit corporation where we have a fiduciary responsibility to maximize shareholder value, like all for-profit companies do. We have a second and legally binding uh kind of imperative, which is around a public benefit, which is to connect smallholder farms to high value markets. So we decided to create

Lessons From A VC FinTech Exit

SPEAKER_01 6:50

this company 10 years ago in this kind of like hybrid social enterprise model because that felt right to both of us. And that's what we've been able to kind of build. And I know you're gonna ask me about financing. And so uh Ethan and I were still like we were almost a decade out of college and we had like some savings built up, but in between my went on unemployment, all this and that. So we kind of like put little bits of money into the company kind of as we needed it. So Ethan at the beginning was packing spices in his living room in Queens. Um, we realized that we couldn't afford um like freight forwarders. So Ethan would just fly to the countries. It was people from the flying to bring spices back to his check bags. So we put in 10,000 bucks, 15,000 bucks, but we kept seeing the spices sell out. So we we had like all this kind of positive reinforcement from the market that what we were doing, people were like, yes, please, and what else you got? And so, all in all, in the first year or so, we ended up putting around $65,000 into the business, which was really hard. Um, but we kind of put every dollar that we had in savings kind of into this business. We were able to kind of float on zero salaries. I did a little bit of consulting on the side, I was on unemployment for some of the time, but we kind of make ends meet. And then by year three, we went from zero salaries to minimum wage, and that felt really, really meaningful. But that was that point. We only started paying ourselves once the company was able to kind of support itself through lots of scrappy kind of financing means, which is really just coming from me and Ethan personally.

Keith Kohler 8:17

A lot there. And um, yeah, um, no, I'm I'm glad that you took the time to really describe that whole arc because it feels very complete. I want to go back to some of the points you made. First of all, I appreciate you talking about social enterprise because I was gonna ask you when you first mentioned that, what that really means. I'm imagining that when you did that 10 years ago, was that was there were there were a lot of companies out there doing this? Were you among the first? Was it well established? Was in other words, did you know it was a good business value proposition to have gone down?

SPEAKER_01 8:49

So when we started our business, we really started as an LLC because that was just the easiest way to form a company and to just get things going.

Keith Kohler 8:56

And then yeah, yeah.

SPEAKER_01 8:57

And then in the summer of 2018, we kind of took a look. We saw we were kind of two years in. We were like, okay, let's actually put our money where our mouth is. Like, we we didn't want to just kind of be a social enterprise kind of in name. We wanted to be it in practice. And so there was a relatively new company structure that was recently introduced called a public benefit corporation. There's some big companies that are now public benefit corporations, and and we love it, but it was a relatively new kind of business structure. Um, and we learned about this, and what we loved about it is that we we ended up reincorporating our company. So we kind of created a legal connection to this business model, and that felt like the right level of stakes that like we wanted this to be kind of in the formation documents of the company, and that felt like a really important way to bind the company at its kind of core level, its DNA level, to our public benefit, to being a social enterprise. There's other really great forms of kind of social enterprise. You can also be a B Corp, which we are not, um, but that's more of an annual certification that you go through and you run through this checklist and you fill it out. We didn't have like the paperwork, uh rigor, you know, to kind of do that. But we also felt like a reincorporating into a public benefit corporation felt like a bigger uh statement, a more core that we can't lose it. We can't one year be a B Corp, and another year, like not like we're a public benefit corp through and through now. And so that felt really the right level of stakes for us to do.

Keith Kohler 10:23

I love that. And I think it's a part of your value system anyway, right? You knew that you didn't need to grow into that. You were confident that's who you are and what's what you stood for right from that outset. Um, I was gonna ask quickly single origin. Could you explain that a bit to everybody?

SPEAKER_01 10:39

Yeah,

Building A Single Origin Spice Model

SPEAKER_01 10:40

so we think about spice companies in three waves, and this will explain the single origin thing. So so wave one is giant, and think about if people who love coffee will know exactly where I'm going with this, but wave one is kind of big commodity. You don't know where it's from, it doesn't matter, it's just like one is the same as any other. And so I once went to a store that I will not name. I look at the peppercorns and under country of origin, it listed five countries. And so that's kind of commodity level. That's like, don't worry about it, these are all the same. It's the same way that you treat, like, I don't know, gas or metal or whatever, like it's all the same. That's not the right model for agricultural products. Wave two is small specialty companies in the US that are buying from specialty exporters or even specialty importers kind of in the country. And so that's saying, hey, I don't buy from the big guys, I buy from like, you know, I have my person that imports incredible peppercorns from Kempot or whatever. And so there's all these things there. Wave three is what we're doing, which is going directly to origin, which is working with the farmer. So for us, single origin means that we can trace the spices all the way back to the origin and not to the country and not to the region, but down back to the farm. And that by itself, like you can have crappy farmers and trace it back to the farm. Like the point of it is just to say that um we have this level of transparency and relationship with our supply chain that ensures quality. It's it's not the point, isn't everything comes from somewhere, good and bad, but the point is that if we have a model that traces things all the way back to the origin, it means that we have the relationship and the care and even the transparency all the way back to the field to ensure that we can get absolutely incredible quality spices, that we're paying the farmers directly for it. And there's a lot of benefits from it. We are not a charity organization. We pay the farmers more to grow the best spices in the world. Um, and as we talk about you, I'll keep coming back to this theme, but there's a sense of long-term relationships, of mutual benefit that we get to grow our businesses together, us and our partner farmers. And because we're built in this way, you dear home cook in America professional chef, baker, or whatever, you're gonna get access to absolutely incredible stuff. That's gonna be the same thing as when you had that first like farmer's market apple, you know, that was picked that morning versus that apple that was in cold storage for six to 12 months in your grocery store.

Keith Kohler 12:56

Yeah, I love that. Thank you for that clarification. And I was not aware of all those different levels. Um, but certainly it's a funny thing. I live in Miami, there are a few spice companies headquartered here. And I wonder sometimes when I look at that more industrial look and feel, where do things really come from? Or how does it, how does it get into that bottle or that tin or that box?

SPEAKER_01 13:18

Yeah, and by the way, that's the history of spices, like in in humanity, right? Like spices were the thing that people got on ships for and did all kinds of crazy things, often not so good, uh, to be able to kind of like corner the market on certain spices and hide the origin. There were all these stories that cinnamon sticks were brought from a giant meat-eating bird's nest that like they'd have to go and squat the bird away and and secretly climb up in the middle of the night and pull a few cinnamon sticks out. And like these were ancient stories and still to today, the standard form, like we know so much about so much of the ingredients that we cook with, or we at least can if you want to. Spices are such a black box. And that's why we have a bunch of two and three Michelin star chefs and restaurants that are our customers, because even at that level, there's a ton of uh opacity in the world of spices. And so that's our mission here is to kind of like share how cinema is tree bark and that peppercorns are the fruit of a climbing vine that like grows in bunches like grapes. Like we we like to kind of like open the door on this stuff because still the standard of spices is like we just make blends, don't worry about it. Hopefully you like our blend, but don't please no questions about what the ingredients are and where they come from. But it's happened in so much of the rest of the food industry. So that's what we're doing here is we're kind of shining light on this kind of like dark corner of the food industry.

Keith Kohler 14:34

And I think what's interesting, as you indicate, um, as a history former history teacher myself, that was part of history. That was part of colonial stuff of the trading companies, right? Of shipping and all of that around the world. And it and I would say there's a dark part of that, and there's a somewhat romantic part about it too, right? And everything in between.

SPEAKER_01 14:59

Um, so even salary comes from from people that were trading salt, right? Like salary has its roots in the word for salt, which is people who get paid in salt. And that was the, you know, nutmeg was one of the reasons why the the island of Manhattan was traded for the knowledge of nutmeg producing islands um in the Far East. So, like, so much of human history is intertwined with spices. And it and it's fun, you you look at these spices, which are these nutritionally devoid sections of plants, you know, and and and and it's like literally the industry that launched a thousand ships, you know, and all of that. So it it it's it's so intertwined with our history, but it's also surprising that the that the world of spices still operates in this kind of in this shroud uh of darkness and still like, yeah, in this kind of like exoticism and in this like, you know, and and what do we do when we travel? We all bring food back, you know, from the places we travel to. So that's very much also the roots of this company. Um, but but now we we do it professionally now on on a massive scale.

Keith Kohler 15:57

Yeah, I'm glad we took the time to to talk a bit about that because you truly are being disruptive, not just from the product standpoint, but changing the way the industry shows up in the world, right? And yeah, helping people understand more deeply about, as you said, the traceability. And as you also said, coffee and chocolate and other product classes out there are a bit more well known. And many, many brands out there have those traceability direct from the farm, telling the story, etc. So that I I think happily you're you're now joining them in in that in that storytelling, dare I say. So it's wonderful. I was gonna go back to the financing, but I can certainly appreciate what you said about you found every dollar that you could between your own part and from your from Ethan's from your co-founder's part to get you to that certain point of the first couple of years. And you mentioned that, hey, you put in tens of thousands, it got you to a certain point, and then you

Bootstrapping And The First Revenues

Keith Kohler 17:00

started paying yourself minimum wage, right? That was a big moment. Yeah. When you got to that point, where was the company, where were you selling? What was kind of uh what was your product offering?

SPEAKER_01 17:11

So so just to share a little bit, like before that, like Ethan and I started this company with almost a decade of experience. So I it was both important for us to kind of A, kind of sharpen our swords a little bit, you know, like really learn some traft and some some trade, but it also meant that we we weren't straight out of college, so we had a little bit of savings. So that really helped us. I think the other thing, and and I I know this is what we're kind of getting to, but I talked to a lot of entrepreneurs now. And I'm like, if you want to pull, I don't know, let's say a hundred thousand dollar salary, just for a round number, um, how much money does your company need to be making for you to pay yourself that? And for Ethan and I, there were two of us. So, you know, like like that would a hundred, that would give us 50,000. And so, like for us, uh, I think people underestimate the amount of revenue that your company needs to have not just $100,000 left over, but if you do that, you also need to pay all the employment taxes and so security and all that stuff. So it becomes like $120K out of your company's pocket to pay you, dear employee, you know, $100,000. And so for us, uh, it was around, it was in our third year. So in our first year, kind of out of the gate with very little support, really operating mostly by Ethan's hand and and out of his apartment, we hit about $100,000 in sales in year two. Yeah, he was going right he was going door to door to chefs and restaurants, and and they were loving it. And the beauty about that is that chefs use a lot more spices than than everyday home cooks. So we didn't need to convince as many chefs to start really getting this going. But we were also able to get in the New York Times with like this tiny little snippet that's a new, like basically a company that exists, you know, but that helped. But we really were able to come out of the gate. And I've been an entrepreneur for a long time. I've started many businesses. I had never seen product market fit like that. Like we started out of the gate, and people were like, What do you got for us? And so Ethan was just flying around the world, bringing two 50-pound bags in his check luggage full of spices. The first trip that I went with him on was I think in 2018, um, sometime in our kind of second year, we went to Zanzibar and I was so excited and I was like, What do you need me here for? You know, like I was a business guy, and he's like, We need to bring four suitcases worth of spices, not two. And I was like, Okay, great. You brought the check luggage. Exactly. I was just a mule. Um, but no, but it was lovely and amazing. And so year three, in year three, when we started paying ourselves minimum wage, um, we got so year two, we did about 250,000. So again, crazy product market fit. People were just coming and saying, What do you got? And it was mostly to restaurants, by the way, in the first few years. This was pre-pandemic. Um, so that was our second full year was 2018. And then 2019, we did $600,000 a year in revenue. And and as all companies know, the faster, as all company owners know, the faster you grow, the more cash the company consumes. And so we were constantly making this trade-off of like, wait, do we pay ourselves or do we buy more inventory? And then we had enough inventory, like, do we pay ourselves or do we hire somebody to like take some of this work off our plate and let us grow faster? And so we just couldn't like we're like, we'll we'll eat ramen for a little bit longer. You know what I mean? Like, we were just kind of pushing as much as we could because we saw that that any dollar we took out of the business was a dollar to pay ourselves is a dollar. We weren't reinvesting in the business. So we did everything we could to like, you know, um reinvest and keep growing. And and it ended up being a good thing. We still do it today, and I'm a little bit worried. Like, we're we're paying ourselves, you know, uh uh salaries, but but we're still kind of very, very leaning hard into every free dollar that we have. We just want to put it back into growing because it's fun and and and the people are responding and we're getting to be a bigger presence kind of in the US, and and it's it's still really gratifying. So we're still leaning towards reinvesting as heavily as we can and still bootstrapped, no external investors, but at least Ethan, I don't need to finance the company anymore. It can kind of grow under its own revenue.

Keith Kohler 20:59

That's

Choosing Profitability Over Venture Capital

Keith Kohler 21:00

a big thing because when you think about when you you said no investors, right? Back at that earlier time, was that your thesis? Did you want to not raise from venture capital?

SPEAKER_01 21:11

Were you it was that's a good question? We even went through Techstars in 2018, in the summer of 2018, which is a startup accelerator. Um, and we ended up buying back all of our equity from Techstars. And we like we so like as part of Techstars, they give you a loan, they give you an investment, all that stuff. We paid it all back with interest to them because we our thesis at the beginning was like, let's make it to a million bucks in sales, bootstrapped, and then from there, we should have like kind of two paths up the mountain, right? We can either do the bootstrap thing where we keep kind of walking up at our own peep pace, or we can do the VC kind of like jet pack thing of like jumping up to the top. We went through Techstars to try to help answer that question. And what we learned uh was that we we want to do it ourselves. I had this kind of bad taste in my mouth from fun. Fundraising and investors. And so we kind of saw a path to keep growing. And so we we were open about it. We knew that early stage, raising a ton of venture capital without knowing what we wanted to do or how we wanted to do it, we were like, that's not a good use of our time. Let's at least figure out what we want to do and who we want to be when we grow up. And then we'll be able to decide whether investors could help us get there more quickly and grow our impact more quickly and all that stuff. But we looked at it and said, nope, we can keep, we've done it so far ourselves, and we're doing it ourselves. And just for what it's worth, um, in my VC-backed company, we solved problems by throwing money at them, like heavy duty senior executives, paying for marketing for like, and it brop and barrel uh kind of it created a constraint that was a very productive constraint because we couldn't do things at a loss. We had to be profitable. And that built this like creativity and efficiency into the DNA of the business that really served us well and allowed us to keep growing without um investors. And so that that kind of enabled us. So we didn't know at the time we wanted to at least be open to different paths to go down. But by the time we were ready to actually explore it and we got to million dollars in revenue, uh, we were beyond clear what our path forward was. And by the way, it helped that we crossed that million dollar mark in 2020 during the pandemic, where we were just growing faster than we ever could. We were struggling to kind of keep our spices in stock. And so it was uh it was really clear to us that we were uh ready to do it ourselves.

Keith Kohler 23:28

And were you continuing to finance the business from income from operations and then yourself?

SPEAKER_01 23:34

Yeah, 100%. We it was tough. It was touch and go. And in the early years, yeah, you got it.

Keith Kohler 23:41

You were constantly looking at cash, cash flow at every moment.

SPEAKER_01 23:44

Constantly looking at cash, but because we were growing so fast in the pandemic in 2020, 2021, I mean, we grew, I don't know, 5x in 2020, and then and then we almost doubled on top of that in 2021 because everybody was stuck at home, you know. And so initially we lost half of our revenue from restaurants, and so we're like, oh my God, we're gonna be out of business. And then home cooks came out of the woodwork. Everybody was buying online, everybody was cooking at home, nobody wanted to go to the grocery store. And so all of a sudden, spices, which were almost never bought online, started being bought online by whoever anybody could. And so our business exploded. And so we were working on staying in stock as much as we could, but we were just like we were flying through our inventory so fast that that it ended up kind of creating a reasonable enough cash flow for us to be able to kind of keep investing in the business. But no, it's it's always been uh we we are a company that puts big down payments with our partner farmers during harvest. We then put big down

Pandemic Pivot Into E Commerce Growth

SPEAKER_01 24:40

the rest of the payment when it's ready to go. We have a really, really slow cash conversion cycle. So, like unlike other most packaged good companies, they buy from a co-packer uh every month, they get 30 to 60 day terms, all that stuff. We pay normally nine months before the first dollar comes back from that shipment. And so, so that's been the financing challenge for us. And you and I, uh outside of this have talked in depth about this, but the pandemic, things were just flying off our shelves so fast that it ended up just freeing up the capital that we were able to keep rotating back into new purchases. And so that's it's never happened since.

Keith Kohler 25:15

Right?

SPEAKER_01 25:16

Yeah, yeah, right. And it may never happen again. So, so like that was a pretty wild period, but it really uh one of the weird silver linings in the pandemic is that it broke everyone's behaviors of purchasing in the grocery store and sent everybody online, and that was the moment for our company to show up in their lives and to convince them that um that that you you don't want to go back to the grocery store. So we still kind of built our our company around that.

Keith Kohler 25:40

Yeah, I really can appreciate that. You were one of the many companies that had that pandemic bounce. And when you when that happened, how was it relatively straightforward, dare I say, easy or hard or somewhere in between to shift to being much more of an e-commerce company versus the selling to restaurants?

SPEAKER_01 26:02

Um, we had hoped that we could be a primarily e-commerce company, but we had no idea how to do it. You know, normally it's it requires ads, this requires crazy sponsorships and relationships and getting, I don't know, Haley Bieber to like be your like product ambassador or whatever it is. Um, but we we uh that was not none of those options were open to us. We're not that cool. Um, but no, it was really it was a shock to the system because at that point we're we're uh we're a like basically a zero capex company. We work with co-packers, we work with fulfillment centers because they ultimately have the capacity to scale up. And so that was one of our saving graces is that both of those folks didn't go out of business or didn't get stuck or didn't kind of like have any issues. We were really relying on our network partners there. But no, it was a massive change. We we started putting spices on airplanes and just kind of like bringing in whatever we could as fast as we could. Normally we should buy ocean, which takes two to three months. We started our domestic sourcing program, which is actually really great. We bring in salt from upstate New York, we bring in wild ramps also, we bring in chilies from California, uh, we bring in all these spices that actually grow in the US and across North America. Um, and that was purely out of like uh existence um because we were sold out. And and our best kind of magic trick, you know, during the pandemic was don't look over here at this thing that's sold out. Look at this brand new thing that just came off the truck. Yeah, exactly. And so we were able to just kind of bring in whatever we could bring in and put on a truck and that we thought was an incredible quality spice straight from the farmer. We just said, hell yeah, fill fill up the truck, let's do it. And so we were just trying to stay in stock. So that was really things were quite touch and go, but there was the pandemic balance of saying, hey, people are paying attention to us. How do we stay in stock at all costs? And so we just kind of did that. We hired our first uh uh part-time like customer support person in February of 2020, and then we hired our first full-time employee, our director of operations in 2021, because that was that was the place that we needed like logistics and supply chain and operations help there. And so it was really touch and go. We were doing everything we could to create a fun, engaging, deep experience. And then as the pandemic started lifting, we needed we knew that the job to be done was that we need to make sure that you love the spices so much and love our customer support team so much and love our storytelling so much and know how to cook with them and everything, that you go back to your grocery store and look at the spice aisle, and that feels like the way that you used to do things, not the thing that you were waiting to kind of get back to, even though you had to order from us and wait for it to ship and you know, like you couldn't like there wasn't that immediacy from an e-commerce spice company, but we were hoping the quality and the story and the connection would be strong enough that you wouldn't go back. And and we have never had a down year in terms of revenue. We've only grown. So we not only did we get the pandemic balance, but we were able to hold on to it and then keep growing on top of it, which was really lovely.

Keith Kohler 28:55

Yeah, you really did you were one of the few that achieved that, right? Because when I look at the financing history of so many of my companies I've worked with in the consumer space, I would say it was probably about 80% or so that describe what you talked, what did not happen to you, but what happened to them, which is the pandemic bounce took them up here, and then they had this landing for a good percentage of them. It was a hard landing and really crazy. Some had soft, but for many, many, many of them, they had this outrageous amount of cash coming in, lighting up the scoreboard with big numbers. Some people invested further and leaned into it, only unfortunately to have the have it come down and then drive themselves into losses into a bit of chaos. And then um for a lot of people with the PPP money and the EIDL loans, um that kind of took them through. Yeah, but it may not have helped them think about it like you did, which is hey, this is the new reality, this is the combination of business I'm pursuing. So it was quite a kind of an interesting dynamic. I'm glad to hear that for you, it just took shifted the curve up and out, and it gave you new confidence and and a new basis on which to build the business from there.

SPEAKER_01 30:19

Yeah, and it wasn't all of our uh intellect, it was a lot of uh like we were also in a good category, like spices are a good thing to ship. Like if you're shipping cans of sparkling water, if you're shipping, you know, boxes of chips, it could be a lot harder to like have a native e-commerce. But we built Brill App and Barrel from the beginning to kind of circumvent, and we talked about bootstrapping, like it it also meant that a lot of things we can't do, like we can't do national retail, you know, at a loss for years and years and years. We we had to kind of avoid some of those channels. Um, but e-commerce ended up being this like uh kind of golden goose. It was like our dream channel of what we'd really love to do, and the pandemic kind of accelerated people pouring into it. And so we just spent as much time as we could making the site easier and more intuitive, having restocks, expanding the line, doing products. This was our other kind of hacky thing, is we were like, well, if we can't bring in spices, let's find somebody that's making something with our spices. So we started working with Cliff Family Winery, the the the uh nonprofit that's part of the Cliff Bar kind of empire, and bringing in spiced honeys. They they were putting uh uh apiaries, uh uh uh they were grown bees, right? Uh under the solar panel fields that were offsetting the the cost, the energy cost of the Cliff Bar kind of bakeries. And so they started making spiced honey with our spices. So we bought it and started selling it on the

Keeping Customers Coming Back More Often

SPEAKER_01 31:40

site. We had friends making hot sauces and vinegars and granolas, and we're like, we'll take it, just sell it to us, just to not be out of stock. So we got really kind of creative about it, but that ended up making our site like this like a little bit unexpected, magical place that you don't know what you're gonna find on our spice site. We even had spice soaps, which did not sell very well, but we're fun in uh in kind of making the point that like you never know what you're gonna kind of run into uh if you come visit burlap and barrel.com.

Keith Kohler 32:05

That's really brilliant because I think, as you said, it's about that discovery, right? They they probably many people reorder their tried and true, their favorites, and yet they're coming to you looking for what's new, what else you got. That's also I imagine a lot of pressure to say, what are going to be our new product launches or associations or or partnerships?

SPEAKER_01 32:26

Well, we built that into our DNA too. I mean, you're exactly right. And because, like, if you're taking like supplements, you're probably ordering every month or every two months or something like that. If you're buying soap, you're probably ordering every couple months and all that spices. If you buy a jar of cumin from us, you're probably good for six to twelve months, unless you're a really cumin-heavy household of I know a bunch of those. But so that our our kind of challenge was how do we get to the breadth? Like, how do we get to see you as a customer three to four times a year instead of once a year? And so we can only do that. That's why we added salt and sugars and honeys and extracts, and like we just kept going wider and wider, but we also kept hearing that from our customers saying, Hey, you you've taken over my spice cabinet. What else you got? And so we kind of got permission from our customers to give to see what else we could give this single origin treatment to and bring transparency and quality, you know, straight to their home. And so we got permission and so we started building kind of horizontally, and that's been part of our way of kind of building these deeper relationships with our customers.

Keith Kohler 33:28

I really appreciate it. I'm gonna keep going there because I think this is a great lesson for our e-commerce businesses because I think a lot of us intuitively, when we think of e-commerce, we think of the subscription elements, right? So, for example, in supplements, you're taking your one pill or your one scoop a day. So naturally you're done in 30 days, your next one's coming, it's a subscription-based model. A lot of people want to get on, but you're right, in spices, that's not a likely scenario because people have uneven use, right? And maybe even they're looking and they have all of your products, and oh, I'm gonna do much more this month, and just it's that mix, right? I'm fascinated by what you said about they might buy a fair amount from me and I might not hear from them for a year.

SPEAKER_01 34:13

Totally. And that I have a friend that has a vinegar company, yeah. Yeah, exactly. I like so think about it on a continuum. Like, on one hand, there's like kitchenware, where like you're not buying a new pot every month, you're probably not even buying a new pot every year. And so, like, they they like everyone kind of complains about being slower velocity than the person who's higher velocity than them. But like on one end is like kind of maybe kitchenware, or I have a friend who has like a vinegar company, American vinegar works, that's phenomenal. Um, but but how like it's like once you buy vinegar, you're probably good for a while, especially if you need to cover free shipping. So you want to incentivize people to place bigger orders. And so, what do you do when you've bought like 60 bucks worth of vinegar? You're probably good. So he's now expanding into you know olive oils and hot sauces and mustards and jams and stuff like that, which makes a lot of sense. I think it's just a natural path on the total other end of it is supplements that are like if you buy like turmeric supplements, you're probably going through those once a month. And so I think it's I think it's good to look at whoever's higher velocity than you, but you also need to understand, be creative about what you can do. But often it's either frequency or it's kind of breadth. And so those are the two kind of variables that you can often play with. And so we're both trying to create higher velocity spices. So, like our steak rub, you're gonna fly through a jar of that in two to three months because it's great and it's all mixed together, and you don't need to buy seven jars of spices to make it. And so that's our kind of like higher velocity thing. But we also have kind of niche spices that when you run out of like your nutmeg or your saffron, which you may not be using in your everyday cooking, you're probably gonna come to us and then you're gonna be like, okay, what else do I need? And then you're gonna look across our site to see what else you can fill in your cart to be able to get free shipping. And so we want to make it super easy to get to free shipping and fill up your cart, but it's not gonna be with saffron and saffron and saffron. Otherwise, we're never gonna see you again. You're gonna be good for five years, which is not the way that you should treat your spices.

Keith Kohler 36:05

I love it. And I'll just keep going down that a little bit longer. Um, one thing I do when I visit my mother, who's 94 this month, one of the things I always offer to do is to clean out the refrigerator and the pantry.

SPEAKER_01 36:20

Yeah.

Keith Kohler 36:20

And one thing I've noticed, and I'm wondering if this is something that comes up in the FAQs with your customers, is the industrial spices, like that she gets at Kroger or whatever, and they whatever. A lot of times, oh crap, you know, that that onion powder is completely caked. Is it any? I always question, are they good? Are they not good? What shelf life do they have? Should I throw it away? I'm wondering if I imagine that comes a lot from your customers. They ask those questions.

SPEAKER_01 36:49

So

How To Use And Store Spices

SPEAKER_01 36:50

let me answer this in two ways. Number one is that your spices don't get better over time. Um, and so they're they're agricultural products, you know, like they're like just as all things agricultural, they kind of start at their peak. And spices are built for flavor, like that's how they've been selected for essential oil content and for kind of like longevity when they were just sitting at the hull of a ship for months and months and months while it kind of came back. Um, so my recommendation, I mean, I think when you buy spices, um, try to use them within a year of opening them. There's a lot of this about keeping away from heat and light and stuff like that. But I I find that a lot of people end up just kind of forgetting about them. So, like, just keep them by your stove. I don't know, like like it keep them in rotation. Spices are also a beautiful way to create, you know, flavor that often doesn't involve fat or salt or sugar, although a lot of the blends are high sugar or high salt, but just be careful. But they're they're just often like a nutritionally kind of void way of making your meals so much more satisfying and delicious. Although, watch the salt. Um, but the second thing that I'll say is that um a lot of the spices that you're getting in your grocery store, their best days are way behind them, even before you ever opened the jar. And so, like oftentimes these are commodity products, they're treated at like warehouses full of like garlic powder for years and years, where they're waiting for the price of garlic to be high enough to sell, or they're building it's just always available, or they're mixing from hundreds of farmers or thousands of farmers and even dozens of origins at times. And so you can buy a brand new jar of whatever garlic powder at your grocery store. I promise you it's gonna taste like cardboard, you know, right when you open it. And so, so there's a lot about kind of provenance and quality and kind of what was the supply chain that it took to get to you and is it a good product in the first place? And then number two is once it's in your possession, um use it, put it to work, you know, make it happen. Um, every time a Cormac does a recall, everyone looks at the bottom of their jars to see what the like lock code is and what the best buy date is. Um, and they find spices that are like older than their children. You know what I mean? Like, so I I recommend a spring cleaning too. But I think it'll it'll benefit your cooking and your family and friends are gonna look at you and be like, when did you learn how to cook? You know, if you have uh if you use fresher ingredients.

Keith Kohler 39:02

Yeah, thank you for allowing me to have this wide-ranging discussion in this topic area because I think it's though those are those real life experiences that people get to live, right? It's like yeah, um, I think also spices, and of course, your packaging is great of as artistic design. I think of it as a design element too in the kitchen. Because who doesn't want to look at a beautiful bottle when there's different colors and totally it's an accent.

SPEAKER_01 39:31

But also, if you're like if you know how to cook salmon or you know how to fry eggs, just swap out the spices and you can travel all around the world with it. You can make it Moroccan, you can make it Ethiopian, you can make it like barbecue. Like the I think it's also like it's it's I also think of like the spice as this kind of way to take a similar set of ingredients and have like a kind of wildly different outcome or explore a different part of the world or a different cuisine with all the same cooking skills and all the same kind of like you know, ingredients other than the spices for you. So it ends up being a kind of fun way to kind of explore and learn. You don't, I think a lot of people get intimidated by cooking with spices. They're like, wait, coriander, I need to learn how to, I can only use it for pickling, and I need to learn how to pickle, or oh, coriander, I know that that's often, you know, in curry, so I now need to learn how to make Indian cuisine. Like, I think there's all this stuff that people like kind of intimidate themselves out of it. And oftentimes take the thing that you know fried eggs, beans, roast veggies, roast meat, and just kind of play around with them and give them different spice treatments, and you'll see that uh maybe you do know how to cook, you know.

Keith Kohler 40:34

I really appreciate that. I I must say I haven't been as adventurous as I could be.

SPEAKER_01 40:40

Yeah.

Keith Kohler 40:40

Yeah, perhaps now's the time.

SPEAKER_01 40:42

Um this is your call. I once accidentally picked up the cardamom grinder instead of the black peppercorn grinder, and I put it we have a cardamom seed grinder, and I just uh ground some cardamom seeds on my eggs, and I was like, huh. Better than I would have expected. So uh there's a lot of like as Bob Ross says, uh, happy accidents uh in the world of spices.

Keith Kohler 41:02

I love it. I love it. And so going back a little bit, you came out of the pandemic and you continued to grow. And did you make the decision or did you think about are we going to continue to self-finance? Were there other options that came to mind that you and that some any that you acted

Smart Debt Versus Expensive Money

Keith Kohler 41:20

on?

SPEAKER_01 41:21

We wanted to continue to self-finance. We got into some tight spots throughout the year. We have this uh uh, I don't know, kind of not ideal cycle where when a lot of the spices are kind of ready in the first half of the year and over the summer, which is also when our sales are the slowest. It it makes it so that we it's the right thing for us to buy. Yeah. Yeah. To kind of get there for the holidays, right? Which is our biggest sales time, but it doesn't mean that our cash expense is in the opposite cycle as our kind of cash coming in, right? Our cash goes out in the opposite time of the year as our cash comes in. And so we we've we have now a line of credit that we kind of draw on. I like having kind of uh lines of credit because we can kind of draw and pay it back as we need, and so that kind of matches up with our year. Um, we uh have done installment, you know, like like, or what is it called, factoring here and there. I hate it. I think that a lot of founders I've heard from really uh struggle with the terms of financing, which are very like intentionally confusing. I've had founders come to me and be like, it's only 2%. That's great. And I'm like, no, it's 2% a month, you fool.

Keith Kohler 42:30

There you go, right?

SPEAKER_01 42:31

Yeah. Or or even like Shopify. We're on we're on the Shopify platform. Every time I open Shopify, they're like, We we'll give you $1.5 million for only a 6% fee. And then when you look at it and you're like, oh, this is actually effectively almost a 20% APR because they're they're taking daily from your income. So I think financing is confusing, and and there's so much uh uh maybe not predatory, but at least uh expensive loans out there that people are really coming to you and like knocking on your door. And as a founder, you're growing, cash is tight, you want to invest more in inventory, in ads, you want to hire a rock star, CMO, or whatever it is, um, it's really enticing. And we see those like low numbers. And so I think that I think it's one of the most common mistakes that founders make is they they accidentally get themselves into these like really tough like kind of uh uh capital stacks, where I don't know, for our company, like if we hit a 5% net revenue Ibita, that's a really great thing. It is very easy with these loans to have 5% of our revenue be interest payments. And so I think people underestimate uh how quickly interest can turn a profitable company into unprofitable, and then it puts you in this vicious cycle where you're borrowing to pay off the earlier debt and and you you don't kind of ever free yourself up from it. So I think that this whole like capital management, there's so many, you know, CPG, consumer package goods, food companies that that are come because somebody's incredible at. Making food, they're they're an incredible baker, they're an incredible, you know, whatever it is fermenter. Um, but then it comes to financing it, and I think a lot of people end up accidentally losing their shirts by taking on kind of financing and loans that that end up putting them from swinging them from positive margin to negative margin. And so that's one of the big things that I talk a lot to founders about. And Keith, you know better than anyone, and that's what I appreciate about you is that we we kind of came and talked about the whole business, not just, hey, can I make a buck off of this loan? But what does that look for payback? How does that align with the business realities? Because we want to be here for the long term. There's a lot of lenders that don't take that into consideration. They're trying to make a short-term buck off of the entrepreneurs and and founders and CEOs. And I think that it's it's a bit of a dangerous uh uh place out there.

Keith Kohler 44:47

Yeah, really thank you for that. Um because Ori, what's so interesting, and I'm grateful you're doing what you're doing and showing up for your peers and for other founders. And the reason I say that is because, yes, in financing, broadly defined, it has both a good and a bad and a somewhat checkered history of often not taking the time to explain to the borrower, the guarantor, the consumer, you name it, the founder, exactly what they're signing up for and what are the real costs of this. And it's a hundred percent true that none of them, because they're really not incentivized. Well, I shouldn't say none, but very few, they're not incentivized for it. Often they don't have the time nor the skill set to be able to say, okay, Ori, I'm gonna give you this loan. And here's how it could help you with your business, here's how it might make sense over time. And you know, I'm giving this to you now, but six months from now, I really should change it and give you this instead, because that'll be better suited. And that's why I realize I am such so blessed and such a privileged position to be able to do that work and to say, okay, let's look at it over time. So maybe you might want to take something a little bit more expensive right now, just because it gets us over here to this and it makes sense over this bite-sized time frame. And yet, what I know is true that because sometimes coming from me on the financing side, some of our founders, it can be intimidating, it can be overwhelming, frightening. Name all of those verbs, it can be they can show up sometimes with bias, saying, Oh, Keith is gonna be just like all those other financing guys or or financing women or all these other people, and I'm not gonna understand it, and he's gonna make me feel small, or because I've heard that and our brains are wired for bias. So if I can't tell you how many founders I see, particularly Ori of your size, who might have had many, many, many interactions with financing sources, and it's like, holy cow, your story happens to be colored a bit by the your experience with venture capital. And so what's cool is you had took an honest look at yourself with Ethan and said, Hey, I don't think I want to go down there. And yet you could have, and certainly your company performance could have done it, and yet probably it's a dance in your head, right? There's still a little bit of that, hey, that didn't work out for me, it might not work out again. And yeah, that's real. Those are the money stories, those are the true, dare I say, PTSD experiences that our founders get.

SPEAKER_01 47:30

And well, I think just to share, I mean, just to back up your point, I think a lot of times people are working with lenders that are not aligned with their business's long-term growth. I think the smart lenders and the banks, and I think what you've also, the way that you operate too, is say, hey, I'd much rather be able to support you with your financing needs for decades rather than give you a loan that you're gonna likely default on is gonna, and you're never gonna talk to me again, you're never gonna work with me again, and you're just gonna work dig your way out of this, like using financing as a kind of to power your business's growth versus using it to kind of cash out. And I think that that's where most founders are approached day in and day out by all these kind of sharky companies that are trying to make a quick buck. But but as you know, like we're gonna need to borrow money and like in the US economy is built on companies borrowing, and it's a good thing. We get to kind of borrow, we get to invest more than we'd be able to and grow our company faster and employ more people and send more money out into the world and do all that stuff. That's a really good form of borrowing that kind of allows us to grow, enables longevity in a lot of these really meaningful ways. We we have our line of credit fully pulled right now because we are using it to buy as much inventory as we possibly can to really power a really big back half of the year this year. That is very, very good borrowing. Um, and and we will continue to borrow and we want to keep borrowing. Borrowing is not a bad thing, but I do think that that a lot of times, including in venture capital, by the way, when people are investing in your company, they're like either shoot the moon or or or get out of get out of business. We don't care. We're gonna invest in 20 companies. We only need two of you to shoot the moon. Uh, the rest of you can like, you know, we don't care. If you return capital, great. If you got a business, no big deal. As an entrepreneur, I have only one company. I can't take that, like, you know, one in 10 odds of maybe succeeding. And so I think that oftentimes entrepreneurs rely on people whose interests are not aligned with their long-term company growth. But every so often you come across people that are aligned and do get it. And then you build these really healthy long-term relationships with them. And that's what I really uh I really connected with you because of the way that you talked about financing and your knowledge of all of that, just to say we don't work together right now, but but I I've I've love the knowledge and I know that you're somebody that kind of was able to kind of guide in good faith uh me through that and give me just advice, even without working with you. Um, I really appreciated that because I come into contact with those folks very rarely. Everyone's just trying to shove high interest loans down our throats. And and it's that that's what a lot of founders are are scared of it and are assuming they're gonna get taken advantage of because that's typically how it goes.

Keith Kohler 49:59

Thank you for that. And absolutely, because it's I call it inbox financing, right? Because they're constantly barraged with emails, and I don't even call, I even I get calls you qualify for 50,000.

SPEAKER_01 50:12

Just totally wild.

Keith Kohler 50:14

And that's and I think we're very aligned, as you said, on our mission about my voice here through a financing lens and somewhat through a founder lens, because I'm a founder too. But your voice from deeply credible credible, having been in your first business, and then what you're doing today, of your voice, your perspective, your languaging of finance and how it works for you is so critical because it is the most my founders are by far the most credible voice. When they talk about financing, how it worked, how it didn't work, here's how it served my business, here's how it didn't help me. Those are the stories I'm gonna do much more of. And this is why how I financed it exists. This is the storytelling that gives this long form context, in addition to the education component. Because I really have discovered that when and and and you know, example LinkedIn posts or or new business, when a founder will say, Hey, Keith, help me out, the scoreboard lights up. Yeah, because that's that's what I think is so exciting about all the credibility and the trust that you all have built with each other. And it's exciting, and I'm grateful for how you are showing up in service and in contribution to other founders.

SPEAKER_01 51:37

Yeah, and we were introduced through a through a kind of mutual connection to begin with, too. I just but my one note to founders is like if if you're approached by a salesperson, that salesperson is getting paid by the interest that they're making off of your loan that they're trying to sell you. So just go in eyes wide open. Those slick marketing materials, those ads, those sales teams, just know you're you're gonna pay for that one way or the other if you work with that.

Keith Kohler 52:01

Yeah, and you know, and those are those business models and they have sales quotas and they have to do those things. And and that's kind of one element of financing, which is can be difficult because right, the incentives are aligned a specific way, right?

SPEAKER_01 52:16

Yeah, and I want to share also just as we're talking about financing to our our kind of next, we we work with banks too. We have a line of credit from a bank, which as we talked about is a really it's the lowest interest rate that you can often get. And so because we were careful about not having access to VC or investors forced us to run a profitable business. The highest law of the land was profitability. It wasn't growth over profitability. And I see a lot of companies kind of losing their shirts by like really getting uh salivating over high revenue numbers that ultimately come at a negative profit margin. So because we had that discipline, we've now for a decade run a profitable company. Now we can go to banks and be like, hey, look, look at us. We're we're running this company well. We have a long track record of running it well. And the banks are now now banks are competing over lending to us, which is the best position that we could possibly be in. And so that discipline, I think a lot of founders look at financing as kind of yucky. And if you can kind of like click a button and get like, you know, hundreds of thousands of dollars put into your account, as a lot of those like kind of like uh kind of capital like lenders kind of offer right away, they're just like, okay, great, now I don't have to think about finances anymore. I think because we had the discipline to think about it, because we knew what the downside is of it kind of being controlled

Creative Financing With Banks Shark Tank Kiva

SPEAKER_01 53:30

by your investors or by your lenders, uh, we we put a lot of effort into doing it profitably. Listen, we went on Shark Tank in 2023. That was in, we couldn't afford that kind of advertising, but we went on Shark Tank and all of a sudden, tons and tons of people knew who we are. Four million people watch it live. And so we've gotten really creative with PR and what we're doing. We've gotten really creative with how we pay our partner farmers and how we finance and the e-commerce business model. It's it's forced a really good amount of fitness in our business in terms of how do we kind of run it and it's created a lot of uh room for kind of innovation and creativity. And that's and it's paid dividends, not just in of avoiding expensive loans, but just in how our business has been built. It was actually a really uh welcome constraint. It felt tough, but but it led us down uh paths that we wouldn't have otherwise gone if we would have just had a few million bucks in our bank account. And so I'm kind of grateful to it and how we built it. And now we're still working on getting loans. Just another example is we borrow money from Kiva. Kiva is a micro lending, you know, nonprofit that often is like lending 25 to 100 bucks to like chicken farmers in Nigeria, or like they just kind of their thesis is that that little amounts of money going to entrepreneurs around the world is the best kind of way they can build this economic engine for them. Turns out that Kiva has more interest in in people lending into their model than then they kind of have uh uh kind of small businesses to borrow. So they started this kind of macro lending practice too. And so we're part of their macro loans instead of the micro loans. And so we borrow from Kiva. So just there's all these kind of like unexpected left field opportunities when when you're kind of forced into this uh um when the expensive things aren't available or you say no to them, uh, then you find lots of creative problem solving. And so we've done that not just with our business, but also with how we finance it.

Keith Kohler 55:20

Well, I think that's the great benefit of having been in business for 10 years, right? You've you've been open, you've you've sought these things out, you've been able to weigh the benefits and and ROI and um hey, costs of this. You you really developed your own financing intelligence. Right. And you've happily had the ability, I think, largely to guide the path that you got to to this point.

SPEAKER_01 55:48

Yeah, and that's yeah, and the people that don't have a kind of business entrepreneur co-founder, such as myself, like I'm grateful for Ethan for his expertise in sourcing, uh and product quality, his culinary background, his aid worker background. Um, he's so good. You know, like there's so many things that we we kind of like support each other. Um, but for a lot of people that don't have an uh kind of co-founder or are not the kind of CEO with the business expertise, I think, I think it's it's an important thing to find somebody who can kind of help guide you through that. Um, and and obviously I'm here talking to you. I I it was really lovely seeing that you kind of showed up in our conversation in this kind of like educational, kind of eyes wide open way um uh to kind of guide us through this kind of conversation of what borrowing really looks like. I have some expertise in that too, and but but obviously I don't I don't uh kind of drink and breathe and eat, you know, like this world uh in the same way that you do. And so uh it was lovely to be able to tap into some of uh your expertise to just even make sure that we were going down the right path and you kind of helped help us in that

Taking On Tariffs In Court

SPEAKER_01 56:50

conversation.

Keith Kohler 56:51

Thank you, Ori. And um, as we're coming to the home stretch, I would be remiss if I didn't have the chance to turn the spotlight back on you and the way you greatly contributed to the benefit of US companies uh with your bold move. And would you like to share that with our audience?

SPEAKER_01 57:08

Yeah, so so we've been on a crazy journey uh these last couple of years, but I'll tell you that in uh 2025, yes, when the reciprocal tariffs were announced, we made a big statement saying that we're not gonna we're not gonna pass the tariff cost onto our partner farmers and we're not gonna increase prices. And we did our first ever site-wide sale, and we got a really good kind of response from that, both from our customers and the industry and all of that. We ended up shaving costs domestically, which is ironic, but that's what we can't bring herbs to Provence, not from Provence. You know, we can't bring Vietnamese cinnamon, not from Vietnam. There's no domestic alternative for that. Um, we also filed an amicus brief, a kind of briefing alongside the court case brought by the Liberty Justice Center against the AIPA tariffs, against these kind of reciprocal tariffs, just saying, hey, we're a small business, we support this. That law firm, the Liberty Justice Center, ended up taking it from the Court of International Trade to the Circuit Court, to the Supreme Court and winning. And that's why we're all getting kind of tariff refunds as business owners now for the people who were at least direct importers, like we are. Another, by the way, case to be made for being a direct importer these days. The second that the administration struck down, uh saw that their tariffs were struck down, they added the Section 122 tariffs, the new round of tariffs. And the Liberty Justice Center reached out to us and said, Hey, we don't know who you are, we don't know why you filed an amicus brief to support our first case, but we're looking for a lead plaintiff for this kind of next round of tariffs. And we said, we're in 110%. And by the way, it's millions of dollars to litigate a case like this. So having a company like the Liberty Justice Center, which is a nonprofit law firm, um, is really critical because we couldn't afford this. We filed uh the case uh about two months ago uh with the Court of International Trade. Uh, basically a week ago, we got the ruling um that we won. And so we won the case that the Court of International Trade said, hey, these tariffs are an overreach of the section 122, which is a 1970, blah, blah. We don't need to get into all that. The court ruled in our favor. Um, immediately, the government appealed. We're gonna take this to the appeals court. If we win there, we'll take it to the Supreme Court. So we're on this really crazy journey where so far, so good. First step successful. The court looked at the reasoning that the administration used in order to bring in these tariffs and said, nope, that doesn't really hold water. That's an overreach. And so we won the case. As of right now, the tariffs are illegal. Um, and we're working on kind of not just winning here, but also winning at appeal and going from there. So it's so wild. Listen, I'm an immigrant, we're a small social enterprise. Uh, it is absolutely wild that we were able to sue the government. And this is the first time we've sued anyone that I've been in any kind of courtroom. Um, and that suit was the government had to show up, they had to defend themselves and kind of justify their logic. And the judicial branch came in and said, nope, that doesn't hold water. This is illegal. So it's it gave me a meaningful dose of faith in the kind of like American experiment, uh, in the checks of balances. And it's absolutely wild that a small company like us can kind of sue the government and and prevail. So we're gonna fight to make sure that it holds up on appeal and and as far as it goes. But but right now it is such an honor to be able to be the company. I don't know where the big companies are, by the way, who have like armies of lawyers and all that other stuff and are would be in a much better position to kind of see this through. But I am very grateful that we were able to do it and that this gets to be kind of Burl Ap and Barrel's uh contribution to American businesses kind of up and down, is to kind of fight against these tariffs that that to me have have no merit and have caused a lot of harm to businesses across, especially small businesses that are just by default kind of fighting to be here. So I'm I'm grateful for that. And I appreciate that you brought it up because uh you're you're catching us in an in-between time as we have a win, but we haven't appealed yet. So we're gonna we're gonna go through all this stuff. And I can't wait to keep you in the loop on all that.

Keith Kohler 1:00:58

Yeah, and certainly I'll be sharing that with our community because you're doing important work on behalf of people that uh may feel that their voice is small, uh, that yeah, they might not have the ability to create the change in the world in this kind of uh theater, this event, while they are doing it with their product and their mission and the why the way they want to show up in the world. So thank you for that. And that's a perfect transition to

What We’re Proud Of And Advice

Keith Kohler 1:01:25

as we conclude our time together, Ori. Uh, there are two questions I always ask and the how I finance it podcasts. So I'll lead with my first one, which is what are you most proud of?

SPEAKER_01 1:01:35

So I I I love the the transition. The thing that I'm the most proud of is that Ethan and I started this company a decade ago in his living room. And we were just a couple of goofballs, you know, just like we had an idea and we thought about it. Yeah, I'm so proud of watching Burlap and Barrel get to a point where we can kind of throw our weight around a little bit. And I mean that in both how we work with our partner farmers as an employer, but also like kind of as a voice. We're trying to prove out that that single origin, that being a public benefit corporation is a model that works in food. In the meantime, the rest of the food industry is just like scaling up, and corporations are owning more and more of our grocery store. We're really trying to create like a counterpoint to that and show that there's this model of food that pays its partner farmers fairly, as a result, it gets access to better, cleaner, fresher ingredients and to demonstrate that this model works and to inspire as many copycats as we possibly can inspire. So I'm really proud of that. Burlap and barrel, really 2026 seems to be the year where we kind of stepped out of our kind of like narrow lane of our customers or spices of all that stuff and got to have a bigger voice. And so I'm just really proud kind of watching our company finish this kind of circle of its first decade. And I and I feel like we're gonna really be able to uh have a bigger presence and a bigger impact and and not just do it ourselves, but but bring a lot of other people along with us in our second decade. So that's the thing that I'm most proud of is watching Rob Braille come into its own and really start having an impact beyond just the kind of four walls of our business.

Keith Kohler 1:03:15

Yeah, impact, right? Um, knowing that the work you're doing is important and that by both your example uh that others see, whether they're aware of it intimately or just on the surface, they know that they have something to emulate. And that's I think that's beautiful because all boats rise, right?

SPEAKER_01 1:03:34

Particularly in this entry. And we we could talk, we came into our partner farmer in Guatemala and said, Hey, we're changing the way the spice industry is working and all this. Can we please buy 50 pounds of cardamom and stuff it into a suitcase that we're gonna take back on a plane? And the farmers kind of like laughed at us. We were these like dinky, you know, like like weird, weird, crazy foreigners that were coming in with big promises. We $200,000 order with our partner farmer in Guatemala. Like, we're no one's laughing at that anymore. Do you know what I mean? Like, it's been really nice to kind of complete the circle and fulfill the promise that we came in on day one and actually be their biggest customer and actually be their best customer. So that feels very satisfying.

Keith Kohler 1:04:16

Brilliant. And um, as we conclude our time together, just the last question. Uh, what would Ori today tell Ori back when you first started?

SPEAKER_01 1:04:26

Do you do you know I I am uh I am a uh nervous slash neurotic energy. I don't know if uh how that comes through, but I think as entrepreneurs, we became we become professional like risk detectors, right? So I think that there's like two ways to think about entrepreneurship. One way is like, how can I build revenue as fast as possible? And the other way is to say, hey, if I'm here today, if I want to get to this like high level where I'm growing, what are all the risks that would maybe knock me off of that path? And how do I remove them? And so like I think a lot of entrepreneurs become professional risk detectors. And that's that's uh it's a hard way to live. It's it's a hard way to like constantly be this kind of like protector. And so um, to a younger Ori, I I would wish, I I would just kind of say like stick to your guns. It you're gonna figure it out, it's gonna work out. You don't need to sit with this kind of weight on your shoulders. Yes, it's motivating. Yes, it's helpful to kind of always be looking, but I think that the things that our customers have responded the most to are the things that we created out of joy and out of like kind of moving towards, not moving away from. So I I don't know. I think that things go up and things go down. We didn't know if we'd exist in the pandemic. We didn't know if we'd exist in in Ethan's living room. We didn't like we had all these things that that were true existential risk, but often the things that have really led to growth came from joy and came from stepping forward and came from kind of that kind of creative engine, not from a fear of a moving away from. You need it, you need a good dose of it. You need to like right not say yes to those high interest loans, not say yes to all those entrepreneurs opportunities that look like high revenue numbers, but really will come at negative margin. So there's a place for it and you need it, but uh I I would encourage my younger self to kind of also balance it with joy and with creativity and with kind of that that kind of uh uh level of of kind of showing up in the world because it also pulls people around you and it and it pulls people into your world when you show up in that way. So that that would be my uh advice that I would give myself honestly, even now.

Keith Kohler 1:06:28

Thank you, Ori. I appreciate that reflection on the energetic of we live from scarcity and abundance, and we go, we dance in between that. And that entrepreneurial journey is pro there's never a perfect balance, there's no such thing, right? And yet, to the degree that you can allocate your energies and and create from both effectively is a key, can be a key element of success. And I just say also the well-being of yourselves and your personal growth as part of the entrepreneur journey. So really grateful you came and shared your thoughts with us today. Um thank you so much for the way Burlap Barrel is doing its thing, but also for the way Ori and Ethan are leaders and inspiring other companies to be the company that has the impact it does with its consumers and the broader impact it's having in society. So so grateful you joined us today.

SPEAKER_01 1:07:24

Yeah, thank you for having me, and thank you for uh uh letting me share my story and and for what you do and how you guide entrepreneurs through a lot of these kind of tough decisions that I think often are don't feel intuitive or natural to a lot of us.

Keith Kohler 1:07:36

Yeah, we're so aligned, Ori. And can't wait to see what we do next, right?

SPEAKER_01 1:07:39

So Yeah.

Final Takeaways And Connect On LinkedIn

Keith Kohler 1:07:40

Brilliant. So again, this is the conclusion of this episode of How I Financed It featuring Burlap and Daryl. Thank you all for stopping by. Thank you so much for joining me on this episode of How I Financed It. I encourage you to reach out to me on LinkedIn at Keith Kohler1, and I look forward to connecting there.