Joey Thurman: Hello, welcome to another episode of Talking Plant Protein. I'm here with the brains of IQBAR. Brains, see, Will, see what I do with that? Will Nitze, what's up, man? Will Nitze: How you doing? Good to be with you. Joey Thurman: Yeah. IQBAR, brains of the operation. I think that's all the wit I have right now. I think that's what we got going on. Will Nitze: That'll do. That's enough for me. Joey Thurman: So tell me about IQBAR and why you started it, because this wasn't a normal journey as far as a protein bar, especially a plant protein bar is concerned. Will Nitze: Sure, sure. I started the company for a number of reasons. I think it really was a confluence of trends in my life. The first of those trends was I was working at a job, working very hard at a job, long hours, selling software to oil and gas companies. So not sexiest or necessarily the most passion inducing thing and was just kind of getting burnt out. Didn't really want to do that for another 30 years. And so I had always wanted to start my own thing, whatever that thing, I didn't know what that thing would be for a long time, but I knew I wanted to create something tangible and I wanted to create something that I could relate to and a lot of people could relate to, and also could have an impact on the daily lives of a lot of people. Concurrently to me having all those realizations, I started getting really into nutrition. I started, this was in 2015, '16, '17 when Whole30, and paleo, and those types of diets was more whole food based, lower carb diets started to really pick up steam. Another, a sort of a tertiary theme in my life was I was feeling terribly physically. I had a pretty bad diet and I quickly realized that was the culprit. And so I didn't feel good on a daily basis. I was chugging four or five coffees a day. I was just kind of run down. And so all of those things combined into me getting really interested in this concept of starting a food or a beverage company. Yeah, that was really the impetus behind it. Joey Thurman: Okay. So you weren't feeling good and then you decided to start looking into different ingredients. Because most people when they're thinking about doing a protein bar or food company, they're just kind of looking at, what's the overall macro nutrients? They're not really thinking about every little thing that's going into them. So how did you start looking into these specific ingredients? You've got a lot of unique things, and I think mushrooms and cordyceps are getting to be much more popular now, but you started this a while ago before they took mainstream. Where was that catalyst to start looking into those kind of sexier ingredients, if you will? Will Nitze: Yeah, and sexy is not always good, mind you. What ended up being in the product as it stands today is after a bunch of way more esoteric things were whittled out of the product. So when I was originally starting, I took a totally objective perspective on it. And I said, "Okay. Let's just look at the science. Let's say I'm a five-year-old or a fifth grader and I just want to learn about what is good for the brain. Let's just start researching, what are these compounds?" And so things like resveratrol, or curcumin, or omega-3s, or whatever. I mean, there's a whole laundry list. And then the next question is, what are the whole food ingredients that are richest in those compounds? And then a third question would be, okay, how do I get those? How expensive are they? What do they taste like? Are they feasibly incorporable into a ready-to-eat or ready-to-drink product? And then if your compound passes muster across all of those steps, then it's a candidate. The reality when you create any food and bev product is it's never going to be, you're never going to get everything want in it. Take like curcumin, right? Incredibly cool compound, derivative of turmeric. I consume it pretty regularly. That's never going to work in, let's say, a protein bar context because no one wants an orange bar that tastes like turmeric. Joey Thurman: Yeah. It's very overpowering to get that in there. Will Nitze: Yeah, and it's really expensive, too. That's the other thing, honestly, the trickiest thing, the thing I didn't really fully appreciate is the COGS, cost of goods, you have to hit on a food and bev item such that you can reach tens of thousands or hundreds of thousands of people. You're not even going to be in the game or in the conversation, unless you can hit a price point that's approachable. And so that's just really tough and it does dictate to a degree how you build your products. Joey Thurman: Yeah. So what was the first iteration of... I mean, you said you wanted to get in food and beverage, what was the first product you had? Was it a bar or did you go the beverage route? Will Nitze: Well, so I was originally inspired, all of my life inspirations or things that impact the direction I take my life are books. And so I read this book called Mission in a Bottle by Seth Goldman and Barry Nalebuff, the guys who started Honesty Tea, and it really resonated with me. I thought it was just so cool that... because I loved business, but I also loved CPG and combined those two things in a beverage world. It was all like the ups and downs of how tough it was to build that business. I just really related in particular to Seth Goldman. So I was originally interested in being like him, starting a beverage company. It was going to be called Native Beverages. The whole concept was I was going to take all these things that I loved that were these ethnic drinks, so like an Indian lassi, and a Thai ice tea, and all these things that I loved going to a restaurant and ordering, but I couldn't find on the shelves at whatever, Stop & Shop. And so that was what I was going to do. I was going to take all these things from around the world and make them mass market. And then I had four other ideas I cycled through, but there were faults in all of them until I arrived at an idea where I thought, "Okay, I can actually make this work. I can scale this and I can get behind it." Joey Thurman: Yeah. So then that's kind of where you started, were you in your own kitchen making a bar? What do you [inaudible 00:07:27] just smash a bunch of ingredients together and cut it up and go from there? Will Nitze: Yeah. I mean, yes, that's exactly what it was. It's funny looking back on it. You want to have as much... I think there's a benefit to not having access to all these crazy ingredients that Kellogg's, or General Mills, or PepsiCo, or whatever has, and just going to the grocery store, and buying a bunch of stuff, and seeing if you can make it mix together, and taste good, and look okay, and all that. So I think that's a helpful starting point just not having access to certain ingredients. But then, there are things you have to figure out how to get, and you're just a guy in a kitchen, right? So you're calling Cargill, the biggest private company in America, massive food ingredient provider and you're pretending to be a company. And you're like, "Hey, I'm the CEO of blah, blah, blah and we're evaluating this ingredient. I'd love if you could send me some samples." You're just faking it till you make it. You get all these samples from all over the place. And then you can reverse engineer what's on the market, too. So you look at all these... That's like the fun and the good and bad thing about food and beverage intellectual property, everyone has to tell you what's in their product. So as a guy who has no frigging clue, that's a pretty good starting point to just look at the back of 50 different products, cobble together everything they have, and then just iterate and iterate a thousand times till you get something that works. Joey Thurman: Yeah. So I mean, an IQBAR is completely plant-based. Why did you go that route as opposed to going your stereotypical route by using some sort of whey protein or some other food fillers that aren't necessarily the purest ingredients? I know that you were looking at things that were efficacious, but why specifically plants? Will Nitze: For one, I think the biggest thing, honestly, is the writing's on the wall that that's just where everything's moving. So just even if you were just going to look at it from a business standpoint, there's more whey protein bars than is even feasible that the market can even support. And if you look at every single category, it's moving in the plant-based direction. My perspective is it's a little silly to try and reinvent the whey protein bars. There's that, there's where things are going and the writing on the wall. Certainly it helps that it's more environmentally-friendly. Certainly it helps that there's a large swath of America that is not tolerant to dairy, has digestive issues with dairy and dairy derivatives like whey, or casein, or whatever. And so my philosophy has always been never have someone who can't eat or can't consume our products for a dietary reason. If there's any dietary reason, someone say, "I can't do that," try and solve for that, if you can. And so don't have soy in the product, don't have dairy in the product, don't have any animal products in the products. And so a plant-based profile is conducive to that too. The only reason you're not consuming our products is you can't consume, let's say, almonds, right? And if that's the case, then you're out of luck. I don't know what to do for you. But yeah, I'm sure you'll find something else. But it's just helpful to... Again, like everything in my background, it's a confluence of a bunch of stuff. Look, time has only been more favorable to that decision too, right? You have The Game Changers documentary coming out, and you have Oatly displacing milk at a ridiculously fast clip, and you have Beyond and Impossible replacing meat at a ridiculously fast clip. Right? So it's like we have more than enough data points to know that's where things are going. Joey Thurman: Yeah. I mean, obviously you're riding that good trend right now. Your product says, what, it's about 12 grams of protein per bar? Does it very per bar or is 12 grams kind of the average? Will Nitze: No, that's right. Across the board. Joey Thurman: Yeah. This is, like you said, you pointed out it's very unique because it's paleo-friendly, it's keto-friendly, which even a plant-based bar, it seems to be hard to be completely keto-friendly because those would be higher carbohydrates generally speaking, so you guys were able to hit that. What is making this IQ? Where do you get that from? How is this helping the brain? Will Nitze: Sure. Yeah. This is an interesting learning I've had over time is that the original concept, I didn't set out to create a keto bar. That was not... I didn't wake up and I was like, "I want to make a keto bar." I woke up and I thought it would be really cool to make "brain food." And so what does that actually mean? Everything works backwards from that. And so the first step is, okay, what does that mean from a macro nutritional dietary standpoint? Well, it just so happens the brain runs better on a lower carbohydrate diet, and some would say even on a fully ketogenic diet, although I don't think that's really too sustainable in the long run. But let's just say a low carb diet, right? Because you're not overloading your body with blood glucose, which is triggering insulin production and then lethargy, and you feel like crap at 3:00 PM. And so okay, it turns out that if you want brain food, that's your macro nutritional profile. Okay, great, check. Now, let's get into micro nutritionals, right? So what are the specific compounds? Like I said, at the beginning, what are the specific compounds that have been shown to benefit the brain in X, Y, Z reason? It could be a neuroprotective thing, right? It could be like vitamin E and it protects the neuronal cell membranes from degrading over time. Great, protective. Okay. It could be an energy thing, right? So it could be medium-chain triglycerides. It could be these special fats, saturated fats that break down in your blood and turn into ketones, which are energy units that your brain can only run on blood glucose or ketones. And so great, check, brain energy. All the decisions I made were just working backwards from let's make this brain food. And then subsequent to that, we learned, why only have a brain food? Why not have a brain and body food? And so hence comes in the plant protein piece. So if I can deliver 12 grams of protein to you in a plant-based form, in addition to omega-3s, and flavonoids, and MCTs, and choline, why would I not do that? And so it's funny, because then you fast forward a year and you poll, let's say, 100 people and you say, "Why do you consume our products?" A lot of them will be like, "Well, I'm on keto." And you're like, "Huh, that's interesting. I never set out to create a keto bar. Now, a year later..." Or they could say, "I just started a vegan diet or whatever." And I never intended to do that either. It was all a derivative of what's going to of you good for the brain, but it just so happens these things are massively followed and popular. Joey Thurman: Yeah. That's nice that you were creating something that obviously you want to make money, right? That's why people get into business, but you were creating something that would help individuals, and it just so happened to fit in these specific boxes and parameters of diets. From where you guys started from just going to the grocery store and pretending to have a massively successful company to get samples of ingredients, where are you at now? Will Nitze: Yeah. I mean, it's been a wild ride. We have grown a lot. We're still a small team. There's nine of us. We only fulfilled our first order in mid 2018, so we're almost exactly three years in the marketplace. We're in, I think the latest count was something like 7,000 retail locations and we're in Walmart, Sprouts, Wegmans, Kroger, and a bunch of smaller chains. We also have a very large online presence. Actually, we're really an online first brand just from a revenue standpoint. And so we've grown a lot. It's been really, really challenging and really tricky especially in a global pandemic, right? I always, I say there's a spectrum of businesses that got hit by COVID. There's the folks who are just frankly screwed, right? You're a restaurant and the government said, "You have to shut down." You can't pivot that. I mean, maybe you can do some delivery or whatever. And then there's the people who unequivocally benefited, right? Google, Facebook, et cetera, because everyone's at home on their computers. And then there's a bunch of players in between. We were in between, right? It's not that people aren't eating more. Actually, they're not eating at restaurants, so they're eating more packaged foods. Okay. But what are they eating? They're reverting to comfort food and frozen food. And so it was kind of like a mixed bag, but there was so many pivots we had to do in the pandemic. And so anyway, I just say that to say we're coming off a really interesting year. We persevered and grew a lot throughout it, but it was we were growing, and it wasn't like a hockey stick. It was a bumpy ride. It was a bumpy ride. Joey Thurman: It was a broken hockey stick. Will Nitze: Yeah, that's right. Joey Thurman: I played hockey in college, so I like the hockey analogy. I mean, honestly, when I tried your bars, I got sent them, that that was my dessert and comfort food. It was delicious. For me, I would prefer that people would go more towards that route if they wanted a snack, whether it's an IQBAR or anything else that can be a less fried and standard American diet. Where do you see your industry headed right now? Hopefully, we're completely getting out of COVID. Where do you see IQBAR and just plant-based eating heading right now? Will Nitze: Well, I mean, like I said, I think plant-based is, the writing is on the wall. That is where everything is going. It's like the internet, it's just like it's a matter of time. It's not reversing, right? There are certain trends that come and go, and fads. And then there are certain trends that are just not going away and are unequivocally going to grow. Low sugar is one, plant-based is one. There's a few. So I think we're going to continue, it's going to continue to grow, right? Every week, you see these new animal product analogs that are plant-based. I mean, it's coming for every category, right? It's come for the beef patty, the most... the meat lovers number one form factor. It's come for bacon. It's come for milk. It's come for eggs. It's come for cheese, right? It's like everything is going to be... Now is it going to displace all those things? No, there will always be those animal-based products. Many, many consumers of those animal-based products. It's kind of like Tesla. Everyone gets all excited about Tesla. And then it's like, "Oh, 1% of vehicles on the road are electric." Right? We have to reset our perspectives a little bit and not get too excited. But certainly in terms of the growth categories, just year over year growth, it's going to continue to be plant-based. No question. I would like to think that we will continue to be part of that and be growing year over year as well at a exciting clip. One of the other things I'll mention is we're moving into other categories. So we're going to launch this product called [IQMIX 00:20:14], which will be zero sugar electrolytes plus adaptogens hydration product. Joey Thurman: Nice. Will Nitze: All right. So if you look at the pandemic and you look at the categories, what was number one in growth? Immunity. No surprise there. What was number two? Hydration. Now I wouldn't say no surprise. I don't know. That was kind of surprising to me, but it is what it is, and everyone's really excited about hydration. That's a place we really want to be. Because again, it relates back to the brain and body. And to have a well-functioning brain and body, you need to be properly hydrated so that's also on the roadmap for us. Joey Thurman: Perfect. So you guys are thinking about just branching out into all different categories now that you secured your spot with the plant-based protein bars? Will Nitze: Yeah. The goal really is have non-cannibalizing form factors, right? You don't want to make a bar and then chips because someone might eat those chips instead of that bar. But what if we could sort of tackle every occasion throughout the day and also different functional categories, all of which are relating back to the brain and body? For us, it's like okay, satiety, great, check, done. Hydration, non-cannibalizing, a different function, a different occasion, still very important, check, done. Uppers, stimulants, coffee. I still drink coffee, right? Let's make a functional coffee that people can consume that's better than their standard cup of coffee, done, check. Sleep, sleep is so critically important and people don't get good enough sleep, and that has all these downstream negative impacts. Let's tackle that, right? That's kind of how we're thinking about the roadmap. Joey Thurman: Yeah. Great. Well, Will, I appreciate you taking the time. And as we said beforehand, you're like a Porsche, you're moving along, IQBAR is moving along. See how I tied that into it? It's pretty good, right? Will Nitze: Yeah. It comes full circle. Joey Thurman: There we go. I appreciate taking the time. IQBAR, where can everybody find you? Will Nitze: Eatiqbar.com, Amazon, most grocery stores. Joey Thurman: Amazing. All right. Will, I appreciate it. Thanks for coming on Talking Plant Protein. Will Nitze: Alrighty. Thanks for having me. Joey Thurman: All right. Cheers. Thank you.