On this episode, we have Pat Schnettler who is one of the Co-Founders of 12 Tides.
12 Tides is supporting regenerative aquaculture with its kelp chips made from regenerative and organic kelp farmed in Maine & Alaska.
In this episode, we learn about Pat’s deep family roots in conservation and his personal journey that inspired the creation of 12 Tides, and Pat educates us on how the company has already sold over 1 million bags of kelp chips.
🌊 Pat’s deep family ties in conservation + journey in seafood
💰 Why we need brands to drive demand for kelp farming
🤔 Why they started with kelp chips
🧺 Developing their first products through farmers markets
➕ Why kelp farming is the only net-positive aquaculture
🤩 Helping reverse the loss of natural kelp habitat
🙅 Why they don’t use a co-manufacturer
⭐ Designing products around sustaining consumer trends
🦸 How to build a set of superfans at every store
🔥 The imperative for regen brands to cross-promote
ReGen Brands Recap #33 - These Kelp Chips Regenerate The Ocean - (RECAP LINK)
Disclaimer: This transcript was generated with AI and is not 100% accurate.
Kyle Krull - 0:00:16
Welcome to The ReGen Brands Podcast. This is a place for consumers, operators and investors to learn about the consumer brands supporting regenerative agriculture and how they're changing the world. This is your host, Kyle, joined by my co-host, AC, who is going to take us into the episode.
Anthony Corsaro - 0:00:33
On this episode we have Pat Schnettler who is one of the Co-Founders of 12 Tides. 12 Tides is supporting regenerative aquaculture with its kelp chips made from regenerative and organic kelp farmed in Maine and Alaska. In this episode, we learn about Pat's deep family, roots in conservation, and his personal journey that inspired the creation of 12 Tides. Plus, Pat educates us on how the company has already sold over 1,000,000 bags of kelp chips. Let's go. What's up everybody? Welcome back to another episode of The ReGen Brands Podcast. Super fired up today to have our friend Pat from 12 Tides here with us. So welcome, Pat.
Pat Schnettler - 0:01:15
Thanks for having me.
Kyle Krull - 0:01:18
Absolutely, man. You know, I've been a fan of 12 Tides for well over a year now. I wish I could remember the 1st place I saw it. It may have been thrive. It may have been Erewhon. I I I can't recall. But I remember the first time trying your product thinking like this is the most delicious, tasty kelp snack I've ever tried. So we're super pumped to have you on board, but for those who have not tried 12 Tides. Give our listeners kind of a lay the land. What do you produce? How many skews do you have? Where can people find you today?
Pat Schnettler - 0:01:51
Yeah, well, I'm, I'm Pat, I'm one of the cofounders of the 12 sides. We make ocean positive foods with kelp from regenerative ocean farms here in the US We currently have 5 skews or five different flavors of our chips which feature organic North American farm kelp as the number one ingredient and those are found in about. 1100 retailers on the western side of the US right now, including Whole Foods, which would be the biggest. And we're also on all the major online platforms. So thrive Amazon and perfect Misfits, good eggs, all that good stuff.
Kyle Krull - 0:02:31
Nice. And what are the flavors?
Pat Schnettler - 0:02:34
Flavors are sea salt, the OG and everything, and chili were That was the original three and then the. 2 brand new flavors this year were our Vegan Cheddar and Truffle and Pepper.
Kyle Krull - 0:02:47
Nice. I've not tried the new flavors yet, except I think I might have tried truffle at Expo W when we chatted. I'm a huge fan of all three of the other ones. I think everything might be my favorite so far.
Pat Schnettler - 0:03:00
Yeah, they're they're all pretty good. You know, we've been looking up that three out of the five, or at least finalists at Expo West and the Sea Salt one Best organic food. So that was awesome. You probably did find us at Erewhon at the beginning. They're big fans of us over there and we're big fans of Erewhon. Erewhon was our first retailer. We've got several placements in every store now. We're one of the fastest moving products in in the store. So they will have both of the new flavors as soon as they hit the DC.
Anthony Corsaro - 0:03:39
I Erewhon is I love Erewhon but it's like you know they just rob me blind every time I go in there because I can just spend way too much money. Like I I went to LA for like a week and I spent more money in that week than I usually spend on food in a month and I was like so happy to do it but and I just that they're they're amazing and they've really done a great job supporting the regen brand. So hats hats off to Erewhon that we usually try and start by just getting people up to speed on kind of y'all's journey and and the origin story and. The website has a really cool little timeline that that gives a brief synopsis of it and you know, y'all have had some really awesome success, I think getting over into 1000 doors already selling over 1,000,000 bags of snacks. So just take us through kind of the origin story and how we got to where we're at today.
Pat Schnettler - 0:04:25
Yeah, well, I guess we'll start at the beginning. I sort of grew up in an ultra conservationist family. My mom worked for The Nature Conservancy for her entire career. Wow. My sister works for the National Marine Fishery Service and NOAA and DC, and my brother just wrapped up his degree in environmental law and.
Anthony Corsaro - 0:04:47
He's going to.
Pat Schnettler - 0:04:48
Follow a career and yeah, it's sort of the sustainability pathway as well. So I got involved in Food and Agriculture kind of early in my career for its intimate tie in with the environment and. It was a little bit by chance, and then I think maybe a little bit from my sister, because she's involved in seafood and the regulations of that around the US and was involved in Food and Agriculture. Kind of stumbled into seafood. And I did all sorts of seafood projects either as an investor, consultant, operator, around the world for the first six or seven years of my career. So I worked on, give you a couple of examples, I worked on 100 and 10120 meter factory trawling business up in Alaska. So it would be some of the biggest fishing vessels in the world. You know 400 person crews and you know catching.
Kyle Krull - 0:05:49
What were they fishing for?
Pat Schnettler - 0:05:52
They were fishing for Pollock. Pollock is. What you'd find in McDonald's fish filet very commodity sort of low value fish in sort of mass trawl Nets and you know you're catching 60 to 80 metric tons at a time and you know, hundreds of.
Kyle Krull - 0:06:13
Thousands of metric tons.
Pat Schnettler - 0:06:15
In a season and. You know, went from there, went down to, you know, places like Pacifico Aquaculture in Ensenada, Mexico that does net pen fish farming with striped bass. Spend some time over in Indonesia with world fish doing brackish water shrimp farming project. Did some seafood and processing either in the scallop fishery on the East Coast, down in Australia at Woolies or over in Germany as well. With ALDI and so I saw a lot of the dark corners of the world of seafood and we import about 90% of our seafood here in the US You know, most of what's coming from abroad is going through a very long and opaque supply chain and it's opaque for a reason. They, you know, the industry wants it to be that way. They don't really want you to see, you know, where it came from in the beginning, both for its impacts on.
Pat Schnettler - 0:06:46
The environment and for its impacts on people. And I looked at all that stuff and I I thought it was horrifying. And I wanted to dedicate my career to making that intersection between the oceans and the food system a little bit more sustainable. And I saw two ways of doing that. One was to try to make these horrifying industries like, a little less bad. Or I'd started to.
Pat Schnettler - 0:07:13
And at the time, get to know a little bit about this idea of sort of regenerative ocean farming and the idea that we can, you know, produce nutrient dense food with 0 inputs and have a net positive impact on the surrounding marine ecosystems. And while that was in its infancy and maybe a longer road to change, I thought that was it was more compelling for me than kind of the do less bad notion and so.
Kyle Krull - 0:08:12
Hey, from from a timeline perspective, when did Regenerative Ocean for me first get on your radar and what was like the the book or the conversation or what was the first time you like kind of that that was revealed to you in some way?
Pat Schnettler - 0:08:27
Yeah, that is a good question. You know, it was it was kind of back in like the 2016 time frame and at that point Culp farming was barely. On anybody's radar at the time it was, you know, there's only a handful of producers in the US, maybe a very small handful of of products. The industry was mostly funded and sort of supported by either government or academic research institution grants and and stuff like that. And there wasn't really a big sort of industry behind it, but the potential was. There for that to be the case. And while I kind of looked at my skill set and I was like, well, I'm probably not going to be very good at that farming kelp because I'm not a artist or researcher. But I probably could help the industry, you know, kind of sustain itself by finding high value end markets for kelp farmers, working directly with the farmers, you know, paying farmers great prices and.
Pat Schnettler - 0:09:07
That was kind of the, the impetus for 12 times. And so I I guess the point of I, I think it was maybe a little bit, you know, through my sister because she's, you know, involved in either setting, you know, federal regulations around the permitting of these types of aquaculture sites or you know, help in the states, do them do that themselves because you know, most aquaculture is done in state waters within 3 miles. And so I started to get to know some of these sort of pioneers in the space or maybe some of the very early operations, you know some of which made it, which didn't. But I I was always pretty aware and excited about the potential that it had, you know, both for marine ecosystems and for. Coastal communities that have been maybe largely dependent on sort of declining legacy seafood industries.
Anthony Corsaro - 0:10:39
So many, so many parallels. We just had brief from Atlantic Sea Farms on and y'all are talking about a lot of the same things, maybe with a little bit different articulation, but definitely feel like we got, we got like a PhD level education on a lot of these topics from her and we're adding to that today. So just excited for that and you know, it seems like these are. One of the most, like Kelps, one of the most nobrainer agricultural things ever to me after kind of getting and explained to me, I think one thing we talked about with Bree and and kind of the question I want to get to for you PAD is like how do we get the American consumer to consume more count, right. And so would love to kind of know how you went from, OK, Kelps, this cool thing to like let's put it in a salty snack, right. How did, how did you get there and what was the impetus for that?
Pat Schnettler - 0:11:26
Yeah. So there were a few reasons we developed the first product and #1 is, is that it has to taste great that it's just a non negotiable. And it's I think that's especially important with something, an ingredient innovation like kelp because for the vast majority of our consumers trying our product is their first experience trying kelp and if if that's not a good experience, kelp is dead to them forever and so we are.
Kyle Krull - 0:11:53
Pat Schnettler - 0:11:55
Yeah, we're we're pretty ruthless on, on quality. We're pretty ruthless on, you know, our product development process. You know, we're not going to put out the something that's, you know, mediocre and then hope to fix it later. And you know, we developed the chips because it was something that you could it was kind of a low barrier to entry. I'm not dedicating a whole meal to this or I'm not, you know, buying something for $37 and. Taking that kind of risk and it is also something that you can eat right out of the bag. You don't have to trust somebody to cook with it or pair it with something else and then maybe they screw it up and and you know you have that bad first experience with kelp. So the idea of eating something right out of the bag was was appealing and then lastly was that it was something that was unique you know we. Our chips have a very unique sort of flavor profile and texture because we make our chips unlike any other snack food manufacturer and we use a lot of the unique characteristics of kelp to help create that that texture and that flavor profile. And So what that does is, you know when people do try us for the first time and they like us, there's you can't just like grab the next bag of chips on the shelf. It's just it's too far away from the same thing and so.
Pat Schnettler - 0:12:50
You know it's it's a little bit of the the hook but it was a long Rd. in developing the the first product for sure very difficult. We spent you know a year at farmers markets you know which is is hard yards and I have incredible I won't go on that tangent but like incredible appreciation for everybody who sells at farmers markets.
Anthony Corsaro - 0:13:42
Pat Schnettler - 0:13:43
It doing it myself. But we spent about a year during that and we ultimately launched at Erewhon was our first retailer in November of 2020 and you know kind of took off from from there.
Anthony Corsaro - 0:13:58
Kyle Krull - 0:13:59
I'd love to dive in a little bit deeper and we keep having these ponds. That was not an intended fishing ocean pond. You also mentioned the hook a moment ago. Another like natural outline. Yeah, yeah, keeps working them in and see how many we can get. But I mean you mentioned like the the chip itself is over the puff is I guess it's a chip cup chip puffed kelp chip. You kind of developed that texture that concept based on the attributes of the seaweed. I'd like to know a little bit more about that. And then also that transition from farmers market to air one for a young brand, the packaging is stellar, the marketing is killer like I rarely see brands at the. Tenure that you're at, this is well dialed in. So talk to us about how you were able to develop those concepts who you worked with from the branding side because it's just, it's really well done and I've got that. I keep looking over here because I'm, I've got it up right now, the website and it looks killer. So walk us through that transition.
Pat Schnettler - 0:15:02
Yeah. So, you know we sold that almost all the farmers markets around the Bay Area for about a year and the point of that was not to generate sales, it was to. Get feedback and farmers markets are incredible opportunity to get feedback. You know in in you know four or five hours you can get you know 500 impressions for the price of you know 50 bucks you know per market per week And like you can't get that kind of volume of data anywhere else for for that price. And so while it is, I mean you have to control for the fact that it's kind of a unique consumer and and. Maybe not representative of the full population. It's a very good testing ground. And so, you know, every week I would come back with a different, you know, footprint of the chip or a different, you know, thickness or shape or different flavors. We tried all sorts of different flavors to see like you know, which ones really stuck and different attributes to like, you know, having sugar in one of our.
Pat Schnettler - 0:15:44
Products with for like a little bit of sweetness versus not having sugar. Turns out people really want like one chip in the whole freaking chip aisle that like doesn't have sugar in it. So you know we we you know scratched any sort of like sugar off of all of our products. But when I got to the point, I remember I had one market where there were. Three or four people who found me in the parking lot, you know, you get there pretty early. It's like, you know, 6:00 or 6:30 in the morning and they had like cash in their hand and they wanted to buy like cases of the product because wow, they knew that once I set up, I was going to sell out because we sold out at every market. We, you know, didn't have really huge production capability at the time and that wasn't really the point to generate sales, but when people started coming to me.
Pat Schnettler - 0:16:39
And offering cash to buy cases before the market started because they were worried they were going to yell out and their I was going to sell out and their family loves them and yeah, I was like, now I feel like we're in a good spot.
Kyle Krull - 0:17:22
Yeah, I I would imagine that'd be an exciting time. Clearly you know demand is in a good position. So you so you get there and then you're like okay. I need to take this to the next level. What does it look like from ramping up production like I mentioned, you know the packaging, the design like. How does that happen?
Pat Schnettler - 0:17:40
Yeah, That's a good question. I'll maybe like take a different tact of that answer. So at that time, yeah, we knew we were ready to go to retail or even slightly before that. We knew that that was going to be the next step. And so we started to think about that and having came from a background in seafood, as you can probably imagine. Branding and marketing and design is is not the typical area of expertise of the secret industry generally, right. And so I knew that I would had no value there and I think what I would tell maybe other people who are starting a food brand you know kind of know what your strengths are and and you know really dedicate those strengths to to the brand and and to the company. And then know what you're not so good at and go find somebody who is really good at that and, you know, let them take ownership over that piece. And so I knew I was going to be no good at the branding and marketing side of things, but I had the chance when we were at the farmers market stage to meet my cofounder Lindsay, who did branding and marketing for Alter Eco and chocolate and she took over on. All of the design, all of the community and social media and all of the website and stuff like that. And so that's sort of how I rather than hiring an agency or something, just like get somebody on the team who is an expert in that and who can run that side of the business.
Anthony Corsaro - 0:19:26
Was the brand called 12 Tides at that time Pat, or did she come up with that name? And what does that name mean?
Pat Schnettler - 0:19:32
Yeah, it was called 12 tides. I I came up with that kind of in the early days and we actually decided to keep it. We were we kind of tossed around you know when we were going to do our because at the farmers market I was selling in like these brown bags and I was like putting stamps on them and so with.
Kyle Krull - 0:19:49
The plastic fishermen move.
Pat Schnettler - 0:19:51
Brand at the time, but it had a nice ring to it. It was unique name. And it came from the idea that the vast majority of seaweeds grow in the inner tidal areas of the oceans, so high tides merge, low tide visible, and there are 12 hours between the tides.
Kyle Krull - 0:20:17
Anthony Corsaro - 0:20:19
Kyle Krull - 0:20:20
And I mean, it totally makes sense having, you know, Lindsay with her job. So you can tell like there's there's some serious brand chops behind 12 Tides and again, like they have that. As early on as you did, it is probably super beneficial for the level of growth you've had in addition to you know the quality of the product. So it's just a killer 1-2 punch out of the gate. You know, one of the things we like to ask is like generally speaking, you know how does your product differ from like a quote conventional nonregenerative version of your product, but it doesn't really exist for kelp and see products. So I guess from an impact perspective, educate us a little bit and our listeners about like why consuming kelp is such a good thing.
Pat Schnettler - 0:20:59
Yeah, so unlike any pretty much any other form of aquaculture, kelp is a net positive for the surrounding marine ecosystems. And it does a couple of things. In particular, #1 is that kelp grows incredibly fast. Giant wild kelp can grow up to two feet in a day. Our kelp, you know, at maximum will grow up to a foot in a day or a little bit less. Wow. In doing so, it absorbs carbon from the ocean at at a similarly fast pace. You know, call it twice that of the Amazon on a per acre basis. And that, you know, what causes the oceanic acidification is the transfer of atmospheric carbon dioxide into the surface waters. You know that CO2H2O to make carbonic acid that causes acidification. So if you're absorbing that into a different pathway of kelp farming, you can mitigate oceanic acidification on sort of a localized level that that's the biggest impact because oceanic acidification is one of the greatest risk of biodiversity on the planet and you know outside just the oceans, just on the planet in general.
Pat Schnettler - 0:21:53
And your ways to mitigate that, you know, not only have sort of the direct impact of the mitigation, but just cascading impacts of, you know, throughout the entire food chain and the way the whole marine ecosystems can, you know, absorb and sequester carbon. So that's one of the, I think really driving elements of the regenerative components of kelp. It also does all sorts of different things, so. 2nd is that it can absorb, you know, excess nitrogen and other nutrients that run off from, you know, terrestrial fertilizers that also create problems for coastal ecosystems, provides food and shelter for all sorts of marine life. There's like a 30 to 40% increase in both biodiversity and abundance of marine life inside of a kelp farm versus outside.
Anthony Corsaro - 0:23:16
Pat Schnettler - 0:23:18
And lastly is that it does all that. In an enormously resource efficient manner, because doesn't require any fresh water, no pesticides, no fertilizers, no arable land. So you're not having to use an enormous amount of resource to create those benefits. It's almost input free.
Anthony Corsaro - 0:23:43
And you mentioned. There's sugar kelp and there's giant kelp. And you guys have a really cool little infographic on the website that kind of describes the difference. The sugar kelp is what's in the products, the giant kelp. It sounds like it's not in food. Talk about the difference between what those are, where they're grown and how like the the benefits might be different or why it's important to be educated on that, those two different types of kelp.
Pat Schnettler - 0:24:05
Yeah. It's a great point. It's a great question. So we get a lot of questions from our consumers about. Well, you guys are talking all about like the importance of kelp to the ecosystems and you know how incredible it is, but like why are you harvesting it then and putting?
Kyle Krull - 0:24:23
It in your.
Pat Schnettler - 0:24:24
Not a bad thing and and I think it's a good question. So yeah, valid point. So we do two different things with kelp and I think this is kind of under the general umbrella that more kelp in the ocean is is better. Yeah. And the first thing that we do is kelp farming. And so kelp farming is your kelp that is, you know, propagated in a nursery and then ultimately grown out in the ocean. None of that kelp would have grown there anyways because they're grown from suspended lines and we don't take anything out of the ocean that we didn't put there in the 1st place, so. That would be #1 and you still accrue all of those benefits of that kelp being there during you know for the bulk of the year and in sort of the growing season and during some important times of the year for the the marine ecosystem. And then separately we also California and the West Coast of the US has experienced a 90% decline of wild kelp populations.
Pat Schnettler - 0:25:05
Due to 9090%, Yeah, over the past two decades. And that is mostly due to kind of various impacts of climate change and some more direct kind of man made factors, but.
Kyle Krull - 0:25:57
Now I want you to check on this. I I grew up in Southern California and I witnessed a lot of what you're talking about the the lack of kelp out there. I also I'm a big scuba diver, free diver, used to be spear fishermen. I spent a lot of time swimming through California kelp and those kelp forests and it's absolutely beautiful. One of the things I've been told is that the lack of predator for the purple sea urchin in particular. Is one of the keys to the degradation of that ecosystem environment. So essentially like the the purple sea urchin is overpopulated because that system is no longer in check because the Otter is no longer in California and they're decimating the attachment areas for kelp on the rocky coast, so the kelp can't stick, so it just floats away. Is that correct?
Pat Schnettler - 0:26:41
Yeah, and then the urchins actually eat the kelp. They eat it directly in addition to. Sort of riding the zone of of any sort of attachment points and so the the the big event was in 20/14/2015 and it was sort of climate change fueled warming abnormal warming event for ocean temperatures in that area which created a a sea star wasting disease which would be the number one predator of the the purple origin and after that the purple origin just. You know, you're right. They lost all of their predators and and the population just exploded. And it's basically created these sort of urchin barons, which you know, it used to be a kind of maybe a thriving marine life inside of a kelp forest and now it's just a sea floor full of purple urchins. And these urchins have no commercial value because they're basically starving and don't really have any meats or uni on them, so to speak and.
Pat Schnettler - 0:27:14
There. And they can live for a very long time with no food, just kind of starving there on the bottom. And So what we've started to do and what we work with our nonprofits to do is to basically clear some of these urchin barons and help the kelp repopulate, you know, slowly, you know, sort of meter, you know, square meter by square meter, you know, up and down the coast, but. It is starting to improve a little bit over the past you know couple seasons it will take some more time but we do want to help accelerate the process to bring back that natural kelp and so you're back under the umbrella of more kelp in the ocean is good. You know that's you know we have the farming side of it and then we also have the repopulating the natural helpful side of it which kind of two different ways to get to the same same end.
Anthony Corsaro - 0:28:42
And on the farming side, Pat, are you guys vertically integrated or you just buy kelp from certified organic suppliers?
Pat Schnettler - 0:28:48
Yeah, we work directly with the farms. We get kelp straight from the farmers. We don't do any of the farming ourselves, but I just got back from a two week trip, so we sourced both from Alaska and and Main and we were traveling around for quite a bit visiting all of our farmers in the harvest season, Harvest seasons right now by the way. And so we do have those really tight relationships and our goal is to help the whole help farming industry and ecosystem grow. And so you know we work closely with the farmers to you know help them decide what kind of, you know, processing capabilities they might need. We make commitments before the growing season, you know starts and and put down deposits to help them finance the growing season and so. Our goal is to create a really positive and farmer friendly help farming ecosystem and avoid a lot of the pitfalls that other industries of terrestrial farming have fell into with 12 ties.
Anthony Corsaro - 0:30:02
And makes a lot of sense. 2 questions. Yeah, 22 questions there. How does USDA organic work for like aquaculture based product like kelp? And then when you buy the kelp from the farmers, you buy it in powder form, you buy it in dried kelp, you buy it in a wet kelp in bags like just help me visualize, you know, kelp from the ocean and then it ends up in a in a chip, right or yeah.
Pat Schnettler - 0:30:24
Yeah. Yeah. So how does USDA organic certification work? That's a, it's a good question. There's no such thing as organic seafood. And so we get that question a lot. As to like organic fish is fake, like how can your seaweed be served by organic? So it's a good point, but actually one of our farmers was sort of the leader in creating the organic standard for kelp and seaweed farming. Wow, in Maine and I think. You know, right now I wouldn't say there's a dramatic difference between your organic and nonorganic farms. There's no big like commercial or industrial kelp farming that's happening in the US right now. I think the goal for the organic process and the organic certification for kelp is to, you know, use that to help the whole industry, you know, stay sort of keep out of the pitfalls of a big terrestrial agriculture and.
Pat Schnettler - 0:30:59
You know, a lot of the mistakes that were made there during the 60s and 70s and really set that high bar for, you know, the ecological outcomes of of kelp farming because it is somewhat of, I don't want to say unregulated, but kind of a, you know, Wild West of of agriculture right now. In terms of how we get the kelp, we work with the farmers to get it, and then we get it from different formats, from different farmers based on their processing capabilities. And we don't want their ability to invest in some huge capital assets to do lots of processing to prevent us from working with them. You know, if they can get it to a different format than this farmer will, will, we'll find a way to take it from there and we can, so we can work with a large array of farmers. To do that and we're also working with both farmers in in Maine and Alaska to decide like oh okay like if we want to invest in this, can we Co invest is there some sort of like you know outside funding that we can pursue to you know try to do this together. And so there's a lot of sort of creative solutions that have are out there and I think will help the industry grow in the future. But it's it's still pretty early, yeah.
Kyle Krull - 0:32:50
Well, why is growing kelp hard and why does it seem to be predominantly at least in North America, Alaska, Maine? How can it's not happening on more coastal lands?
Pat Schnettler - 0:32:59
So from my perspective, so almost all of kelp with the exception of like maybe 1 farm in California which is in federal waters, all kelp farms are in state waters which is within 3 miles of the coast and so all the regulations are state by state and. There's nothing really confirming this is sort of my opinion, but I think the states that are most reliant economically on declining legacy seafood industries are the states that are most incentivized to create a ring and break pathway and to support the creation of this new kelp farming industry. And those two states in the United States would be Maine and Alaska. And so if you look at a state like California, there's definitely people who are interested in it and there's a lot of. Potential and opportunity for kelp farming to be a thing off the coast. But if you're a California regulator and you're looking at, you know, our economic like pie chart and like seafood is this tiny, tiny, tiny sliver, it's just hard to get anybody to mention it.
Anthony Corsaro - 0:34:04
Kyle Krull - 0:34:07
That's frustrating as a as a California who knows the impact of having, you know, kelp forests? Yeah, let me see that change. But it's a good point. If that's the bottleneck, that's the bottleneck.
Pat Schnettler - 0:34:19
Yeah, It's entirely A regulatory matter. There's also kind of, you know, some constraining factors like there's more competition for Coastline in places like the West Coast, Alaska. But it's mostly a regulatory matter. And the other challenge from a regulatory standpoint is that it aquaculture has very bad. Is bad work in for for most regulators and most of the time when you say aquaculture, people think of like net pens salmon farms and that is horrifying and I would be horrified by that too. But it it it's a big leap to try to articulate why Caden it's not net pen salmon farms. These are seaweed farms and they do good for the environment instead of what net pen salmon farms do. But that's. It's a bigger leap to make with regulators than it than it sounds.
Kyle Krull - 0:35:22
And educate us a little bit about why net pen salmon farming and aquacultures has such a bad name and why people are they don't really want to open that box if they can choose to avoid it.
Pat Schnettler - 0:35:37
Well, oh boy. Yeah, there's there's a lot there. I think you know some of the highlights you have from my because I worked on a net pen fish farm, you know, down in Mexico. And you know there are better ways to do that than, you know certain operations do it better than others for sure. But there's a few factors, #1 is that it's pretty resource intensive. You have to feed the fish, you know, quite a lot all the way from the sort of hatchery, nursery stage, you know, through the grow out. In a lot of cases you're feeding them other wild caught fish. So you know you're while you might be like mitigating pressure on wild caught populations with the the farming you're feeding them wild fish here. So secondly is that the influx of you know feed and sort of these artificially, you know, dense populations of fish can.
Pat Schnettler - 0:36:08
Have negative implications for you know, surrounding re ecosystems. You know whether that's a bunch of you know, feed that's you know, falling through the pen and you know stacking up on the bottom and other species you know become dependent on that or it, you know, injects a whole bunch of extra kind of nitrogen into the water there. It can be sort of disruptive from from that perspective. And you know lastly is that. Your net pen salmon farms are pretty well known for some pretty horrendous sort of lice and pathogen problems. And so you've got all sorts of kind of antibiotic issues that occur or you know, get sort of distributed, you know, throughout those net pens.
Pat Schnettler - 0:37:07
You know the lights problems are horrific, you know both for the salmon in the pens as well as the ecosystems outside of that. And then lastly, and I think this is probably the one that's been like most popularized, most talked about in Canada would be the escapes. And so you know escapes are they happen, they're not infrequent and can have, you know all of a sudden you have kind of this new population of fish that is competing against other. Other courses can have sort of unknown consequences. I think really this sort of the scariest thing is just the unknown, you know, like what will happen if the you know fish escapes and and you know integrates with the wild population. So all sorts of things.
Kyle Krull - 0:38:24
Genetically speaking, are there significant differences between the farmed fish and the wild fish? Yes, in my mind, if it's the same fish like, what's the issue? But yeah, so walk us through like, why that's a bad thing.
Pat Schnettler - 0:38:41
Yeah, And it really, I guess I'll talk about salmon. So it's like one of the complicating things of seafood is that it's hard to talk about sustainable seafood in very broad strokes because unlike chicken, beef, pork. Where that's all like one species that's farmed in like the same like 1-2 or three methods like across the US in seafood you have hundreds and hundreds of species and then you have for each species like wild caught and aquaculture. And then within wild caught you have all sorts of different you know, regions and gear types and you know processing methods and those all have different sort of sustainability implications and so. It's hard to make kind of like broad sweeping, you know, statements about seafood because there are, it's so complicated to identify what's good and what's not good for salmon. I think for, I think something that a lot of people find interesting is that when you see Atlantic salmon on a menu that's farm salmon, there's. Pretty much no such thing as wild Atlantic salmon anymore. Atlantic salmon equals farm salmon. I always get a good chuckle when I see on a menu that, you know, it's like wild Atlantic salmon, like that's that's kind of not really a thing. It's yeah, so but you know that I think that's like kind of one of the distinguishing factors.
Pat Schnettler - 0:39:56
You know for salmon and and then you have to look at you know that's probably coming from either Norway or or Chile. And from my point of view the wild caught salmon coming from Alaska and you know tends to be a better option, but it's not always apparent you know what's what's good and what's coming from Alaska and and what's less good.
Kyle Krull - 0:40:49
Anthony Corsaro - 0:40:51
Going back to Kelp, where my mind goes with this whole thing is like, this is amazing. How do we get more people to eat it, right? So that's a product development question and that's a marketing question, right? So, Pat, talk to us about why you started like in salty snacks, what's to come in terms of product development and like, how do we get people to eat more kelp? Like what? What is the grandiose vision there? Because that I think, is the whole unlock to solving some of these problems.
Pat Schnettler - 0:41:20
Yeah, I think it kind of goes back to the very first thing I said is that you have to have products that taste good. It's possible to do without that. And you know so we've dedicated a lot and I think you know you can only have so many like core competencies as a company and as a brand. But yeah, we need to make sure that product development and quality is is one of those for us. And that's a particularly important for us because we manufacture our own products and we do all of our own.
Anthony Corsaro - 0:41:54
Pat Schnettler - 0:41:54
You're a company that's, you know, outsourcing that stuff and you know, you've chosen to outsource it And you know, maybe that it's not your core like internal competency, But you know, for us it's it's really, you know, one of the most important things. And then you know, you got to make products that I think, you know, people don't have to make other sacrifices and what they're looking for in a food product. In order to eat, you know, pick your product out of all of the ones on the shelf. And so you know we're kind of designing products within trends that we think will be, you know, longer term trends. And then you've got to use the sustainability element and and you know the kelp storytelling to sort of separate yourself from everything else on the shelf and to drive some of that brand loyalty that you know can keep people. Engaged and excited and looking for your product every time they go to the store.
Anthony Corsaro - 0:42:55
Pat Schnettler - 0:42:56
Kelp tattoos, including myself.
Anthony Corsaro - 0:43:00
What are some of those long term trends you're trying to integrate into the design process? Like what are some of the things y'all are betting on?
Pat Schnettler - 0:43:07
Into the product design, Yeah, yeah, I think so. We really focus on ingredients, I think. Diet trends come and go and so I think you know a particular kind of like nutritional element or anything like that or being keto or I don't, I don't even know what like the next version of that is. I don't really that's really diet trends. But you know those things always come and go. So we don't want to like lean too heavily on on that stuff, but we do want to lean heavily on clean. High quality and traceable ingredients. And I I can't really see a world. I could be wrong, but I can't really see a world where, you know, 10 or 15 years from now, you know, people are like, I don't care where my ingredients come from or like I want like low quality, like cheap ingredients or I want you know, stuff on my ingredient label that I can't pronounce. I have no idea what it's made of. So those are the types of things that we.
Pat Schnettler - 0:43:42
They really focus on and they're simple but they're it's not a given. Especially when especially when you're Co manufacturing a product and you just or you have something else developing your product and there's this weird like prevailing wisdom like we've spoken to Co Packers and external product development agencies in the past and they're like. They really want this weird shit to be in the product. I just don't know. Want it to be there.
Anthony Corsaro - 0:44:41
Pat Schnettler - 0:44:42
Anthony Corsaro - 0:44:45
You're holding the line.
Pat Schnettler - 0:44:46
We make it a point to just kind of follow our own compass on that.
Kyle Krull - 0:44:51
My guess is they want it in the product because they have a contractual obligation as a command to purchase a certain quantity from that supplier. So the more that they can use they get to keep that price point low is that's pure speculation. But that's my guess as to why this stuff ends up, cuz I mean, I was looking at ibuprofen the other day and there's like Red 5 and ibuprofen. It's like why on earth would a brand pay money to put a food coloring in like a Tylenol pill? This doesn't make any sense. Nobody.
Pat Schnettler - 0:45:20
Cares that it's red. The pills are red. Exactly.
Kyle Krull - 0:45:24
Exactly. It's it's so weird. And that that totally brought me away from the train of thought that was going on and I completely lost my question, so I apologize. It was a good.
Pat Schnettler - 0:45:35
One I had a yeah, yeah, I grow in a tangent for that of like for. I mean that's a really interesting point. I've actually never heard that one before that you know, they have contractual quantities, but it does and I always got this sense and I know there's a lot of different perspectives on using Co Packers. But I think that's another good example of like the Co Packer doesn't always have your best interest in mind like you know maybe they won't put this into the the product because they've got a bunch of it left over. They've got this contractor you know outstanding PO or something that and I always I went into this with a healthy dose of skepticism about about Co Packers and you know we we found a. So self manufacturing is the hard way to do it for sure. Yeah, for sure. But I don't know, I I every time I'm like dealing with, yeah, we had some like transformer like below up downstairs and I've got to like dig back into my you know, electrical engineering background like rewire it or like go buy another one. I'm like you know what? Well.
Pat Schnettler - 0:46:22
We could have had a coat Packer who like decided to drop us one day and then like whole business like shuts down. So right, maybe you know almost blowing myself up with like a, you know, three phase switch or something that I'm trying to replace was worth it.
Anthony Corsaro - 0:47:07
Kyle Krull - 0:47:08
That that could work. I I remember my question. We were talking about trends and ingredients like that and there was a recent switch 12 tides made. From an ingredient perspective that I'm wondering if you'd be willing to share like why you switched from ingredient A to ingredient B and how you feel your consumers are responding to that shift?
Pat Schnettler - 0:47:26
Yeah, Yeah. So we switched from sunflower oil to to avocado oil and that was based on consumer feedback. You know, there's a lot of their hesitancy toward seed oils nowadays. And I think it's not, you know, unfounded. I think there's. There were a lot of health implications related to that. I'm not like super Privy to, you know, like the DA lot of the details, but we heard a lot from consumers. And so we didn't do that originally and it was some like advice at the beginning. It's like, oh, you like you have to use sunflower oil like so much cheaper than whatever. Like we didn't have to like, we just did it and so.
Pat Schnettler - 0:47:48
That was one thing that got us like moving towards sunflower oil originally was you know everybody uses sunflower oil. You have to do it so much cheaper. The thing with us is that if you're frying something and you're filling up like vats of oil to like fry stuff like I can see how you know those pennies like really add up. But for us we just spray on a little like ours are kind of baked and then we just spray on a tiny bit of oil at the end. And so it ends up being very small quantity and so that.
Pat Schnettler - 0:48:14
Change per pound is not, you know, super consequential to us. The the deciding factor at the beginning was actually shelf life concerns about avocado oil or about something that was not this high lake sunflower oil which is very stable. And I I heard a story from somebody, it was actually. John Forker at once.
Anthony Corsaro - 0:49:16
Upon a farm.
Pat Schnettler - 0:49:18
Once Upon a farm and talking about his time at Annie's, how they had used it a wrong oil in one of their batches of I think like Bunny crackers or something like that, and just basically had a whole bunch of crackers kind of go rancid in the field. And that was like, geez, like we're already doing so many different things. We got the compostable packaging, We've got, you know, this kelp ingredient. We've we're manufacturing everything ourselves. Like only so many things that we can kind of worry about at the outset. And I'm not, I'm not sure if we want to like chance it that, you know, we're using an oil that could go rancid out there, especially because our packaging doesn't have the barriers of, you know, BOPP or like regular chip packaging. And so I was like, you know what, we're fighting too many battles already like.
Pat Schnettler - 0:49:37
We'll start with some flower oil to make sure we don't F it up and then if we think we can move to avocado oil, you know, later, we'll do that.
Kyle Krull - 0:50:16
And that transition has happened, is it already like rolled out in retail, some people buying your product today will like that will be on shelf or is that still like coming in future manufacturing runs?
Pat Schnettler - 0:50:26
No, it's it's, it's in the two new skews. The two new skews are avocado oil. So anywhere you find those, those. That will be the case and then we're like working through the last bit of packaging of the other ones and then we'll those will all switch over to the avocado oil as well. So yeah, I mean it's kind of like imminent probably by the time this episode airs it'll be, yeah, switched out avocado oil.
Anthony Corsaro - 0:50:54
But what has really been catalytic in terms of consumer trial and repurchase at retail? You come from the background of, you know, getting to do a bunch of that at farmers markets, right? And then you get into these retail behemoths, the big machines like a like a Whole Foods and it. We've had some really interesting stories from different regenerative brands as to what's worked. Sometimes it's always just trade spend, sometimes it's sampling, sometimes it's, you know, TikTok, you know, this one video goes by like what's what's been working for y'all?
Pat Schnettler - 0:51:22
Yeah. So we've developed a pretty good playbook of you. Getting that community of super fans at every single retailer. And so we've been like pretty selective about the retailers that we've gone into and we've done so at a pretty controlled pace. And So what we try to do in every single new retail store is that you know we'll use a combination of demos and you know brand ambassador engagement, you know we'll gauge engage with the store employees and like you know make them your fans of the brand. We'll do the off shelf placements and stuff like that to help drive trial. And our goal is to get those 20-30. You don't need a lot of people. It's like 20 or 30 like people per story. We're going to come in every single week and buy like one 2-3 bags, be a good velocity brand in in the set and you know that does two things. It's like #1, it's like make sure, make sure that you're strong performing brand and and you're not going to like fall off yourself.
Pat Schnettler - 0:51:57
If you are a strong moving brand, you are going to and this is the like the kicker, this is like the flywheel. So if you start doing well and we've seen this error one, the store really likes you and the store really likes you. They give you more placements and then you start doing better and then or likes you even more and like starts giving you you know. Free secondaries or you know end cap display, they do the K stack deals because they love that and you get, you know it becomes kind of like this flywheel. And so we want to create that at every store, as many stores as we possibly can and that's when you know you're kind of in a a good place. And so we don't bite off a new region or new big retailer until we know we've created that flywheel.
Pat Schnettler - 0:52:51
You know, at the vast majority of the stores that we're already in.
Kyle Krull - 0:53:23
Smart maintain that profitability, don't over invest and go too wide. Before you created that depth, right? Yeah. Two questions.
Pat Schnettler - 0:53:31
Yeah, cuz you have to like over promote to try to like Dr. velocities across a really big region, like all at once and like, yeah, your products barely moving off the shelf like that become bananas.
Kyle Krull - 0:53:47
Yeah, yeah. Two questions. One, you know you have a relatively unique product in that it's a kelp chip and there's like a seaweed set and there's a chip set like where is your product typically merchandised in store? And then .2 kind of expanding from there, What's the future of 12 Tides whole? Are you planning to go into some new categories, new channels? Are you looking to expand with more flavors? What does that look like?
Pat Schnettler - 0:54:13
Yeah, so we want to be in. Chips or more frequently we're kind of in the better for you snacks kind of like alternative ingredient snacks. So that would be like next to the kale chips, the plantain chips, the crisps, things like that. That's kind of our sweet spot sometimes we're in the more general chips aisle which is also OK and. Lastly is that in a few places we might be in like the seaweed set, but we don't really like to be there because a lot of times that would be in like sort of an ethnic aisle with like other like Asian like meal prep types of things. And I think #1 is that our products have just a much different kind of flavor and textural profile and a different use case than people will shop that aisle and then.
Pat Schnettler - 0:54:41
Secondly, is that all those seaweed products that you would find there all are coming from Asia and a lot of times they have either Asian, it's kind of like an Asian brand story or Asian flavor profiles and stuff like that. And that's just not really our product. It's obviously all coming from the US And so we try to and the last thing is a lot of people that don't like those seaweed sheets end up liking our product anyways. And so we don't want to affiliate ourselves with that because you know, we don't want people to think, well, I didn't like that, so I'm not going to like this either.
Anthony Corsaro - 0:55:40
It's not really the.
Pat Schnettler - 0:55:42
Case. So we like to stay away from that setting.
Kyle Krull - 0:55:46
Pat Schnettler - 0:55:46
Kyle Krull - 0:55:48
So I'm assuming you're probably not going to start creating seaweed sheets here in the near future, but what? What else will fall tides potentially create in the future?
Pat Schnettler - 0:55:57
No, and it's a good question, but it's and we're not, I'm not like opposed to that product form in. In general, but it's actually a trade of the seaweed. And so those red or those seaweed sheets are made from a red seaweed called nori that is the predominant seaweed over in Asia, at least for human consumption. And nori is a very thin kind of paper, thin seaweed that when you dry it, you can kind of get this, you know, nice thin sushi like sheet. You couldn't really do the same with our seaweed. And so you know, it's just a different, it's kind of like blueberries to potatoes type of comparison. It's just like and so yeah, like going forward, I guess you know, stepping into your next question is that we want to continue to develop products that use the unique sort of flavor and textural profile of the seaweeds that our farmers grow here in the US.
Pat Schnettler - 0:56:31
To make really unique and really tasty products that help grow kelp as an industry in the US, help grow the idea of eating your products that have a net positive impact on the oceans and help encourage people to think about the impact that their daily life choices have on the oceans. It's kind of the broad, you know, mission of the brand.
Anthony Corsaro - 0:57:29
Love that man. Perfect. Segue into our our closing question, which is when we asked everybody which is how do we get regen brands to have 50% market share by 2050?
Pat Schnettler - 0:57:45
Interesting. It's interesting question. I I think, I think brands supporting each other because you know those. Every brand maybe has like a little has captured like a little subset of you know their consumers, but all those consumers have sort of the general interest of this idea of like a regenerative food ingredient. And so I think you know with a little bit of collaboration we do this all the time with other you know types of brands but you know sharing you know the people who are really interested in that, you know regenerative wheat or regenerative. Beef with the idea of regenerative ocean foods like there's you know, values overlap with those consumers that I think you know can be shared. And you know at least the consumers that are already interested in buying regenerative products can do more of that, you know, throughout their entire grocery cart rather than just like that one brand that they learned about and really love. You know, that's I think that's one sort of component of it.
Pat Schnettler - 0:58:28
And then there's the like the capturing you know, new consumers and bring new consumers into the regenerative story. And I think at least you know the way we do that is by connecting back to you know values that that people you know sort of hold near and dear and and kind of reflect those values in in our product. And so for us that's. Is talking about the ocean. And I very rarely. I think people look back on their time with the ocean and they're like, screw that place, yeah. And I.
Anthony Corsaro - 0:59:38
Don't know anyone that feels that way for sure.
Pat Schnettler - 0:59:41
Yeah. And so I think just, you know, articulating, you know, why making this particular choice can help preserve that thing that you really love and is maybe given a lot to your life and your family. Is a way to help really bring people into the journey, and certainly in a way that regenerative brands can do that other food brands just can't.
Anthony Corsaro - 1:00:12
Kyle Krull - 1:00:15
Makes sense. No and I think you're you're spot on. Anthony was smiling as you were answering the brands working together that's that's my jam that's that's what I'm hoping to we can achieve as a movement is working together because to your point you know if we've got a. A troll ties shopper who's aware that, hey, this is doing a great thing and they might not know the next aisle over there's another brand doing the same great thing that aligns with their values. Like the more we can connect those dots, the more we can make it back as a movement, right? So I think you're spot on there.
Pat Schnettler - 1:00:42
But super appreciating is expensive, but like if we educate a consumer like kind of spend the money to educate a consumer, then like on the whole like regenerative benefits. Like we want to give that education to like other brands and like help you know, kind of fill out their grocery cart with like also all the other regenerative brands in every category of the store. And we would hope that those brands would do the same thing of, you know, even though we, yeah, this consumer, we want your whole cart to be, you know, full of those ecologically positive products and like here's you know the way you can do that. And so I think that lessens the burden of any individual brand to. Put like the entire kind of consumer education bill and the industry can like really work together to accelerate that.
Anthony Corsaro - 1:01:32
It's like a collective regen ROAS like how can we maximize our regen ROAS together?
Kyle Krull - 1:01:38
So we've got to close with another point that sums that up pretty well, which is the rising tide raises all ships, right? So get that regen rising tide to take place and benefit all those brands at the same time.
Anthony Corsaro - 1:01:50
Exactly. Thanks for joining us, Pat. This was super fun man. Thank you.
Pat Schnettler - 1:01:55
Yeah. Thanks so much for having me.
Anthony Corsaro - 1:02:00
For show notes, episode transcripts, and more information on our guests and what we discussed on the show, check out our website regenbrands.com. That is regenbrands.com. You can also find our regen recaps on the website. Regen recaps take less than 5 minutes to read and cover all the key points of the full hour long conversations. You can check out our YouTube channel, Regen Brands Podcast for all of our episodes with both video and audio. The best way to support our work is to give us a 5 star rating on your favorite podcast platform. Subscribe to future episodes and share the show with your friends. Thanks for tuning into The ReGen Brands Podcast, brought to you by the Regen Coalition and Outlaw Ventures. We hope you learned something new in this episode and it empowers you to use your voice, your time, and your dollars to help us build a better and more regenerative food system. Love you guys.