#65 - Hovik Azadkhanian @ Heirloom Coffee Roasters

Episode Recap:

ReGen Brands Recap #65 - Pioneering A Regenerative Coffee Revolution - (RECAP LINK)

Episode Transcript:

Disclaimer: This transcript was generated with AI and is not 100% accurate.

Kyle Krull - 00:00:15
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, gonna take us into the episode.

Anthony Corsaro - 00:00:33
On this episode, we have Hovik Azadkhanian. Who is the founder and CEO of Heirloom Coffee Roasters. Heirloom Coffee Roasters is supporting regenerative agriculture with its 6 SKU lineup of regenerative organic certified whole bean coffees. In this episode, we learned how Hovik is carrying on his family's legacy as a 3rd generation coffee roaster, how the brand has grown from one bay area retail location to going nationwide with Sprouts in less than a year. And why regenerative agriculture is the key to saving coffee. One thing is clear from this episode, folks, when people tell Hovik he can't do something, he's going to do whatever he can to prove them wrong. This spirit underpins Heirloom's audacious goals, which range from selling 100% regenerative organic certified coffee, to pioneering emissions free electric roasting and much more. Let's dive in. What's up, everybody?

Anthony Corsaro - 00:01:13
Welcome back to another episode of The ReGen Brands Podcast. This crew is fresh off of Expo West. And we are excited to have Hovik from Heirloom Coffee Roasters joining us. So welcome, Hovik.

Hovik Azadkhanian - 00:01:38
How's it going, guys?

Kyle Krull - 00:01:40
It's going well. Wouldn't say that I'm feeling fresh after expo waiting here shortly. I'm struggling here with the holders of the cough, so I wanna apologize ahead of time. So I'll listen to this. I'll do my best to toggle mute when I can. But, yeah, Expo West was great. It was it was great to to connect with all the regen brands out there. It was super cool for we we had a few people come us. Hey.

Kyle Krull - 00:01:53
You don't know me, but I I listened to podcast. I really love it. Yeah. And that was, like, one of the coolest things. So super cool. But, yeah, we're here with the hoping today. Who, you may have guessed it is drinking a coffee. So Cheers, guys. Okay. Give us a quick lay of the lane.

Kyle Krull - 00:02:05
Like, what SKUs do you produce? And where can people find your products today?

Hovik Azadkhanian - 00:02:19
Yeah. Hey, Loom is, available across the country in, Sprout Stores. We're nationwide with Sprout and we're nationwide, distributed through Kaye. We produce a total of 9 SKUs but our is really, 6 of our main SKUs. And those are all 100% regenerative organic certified, copies that we yeah, that that that would distribute. I think it's, at this point in time, is the largest, set available nationwide for rock certified copies.

Kyle Krull - 00:02:50
Love it. Give give us the flavors. I need I need I need to, like, feel the flavors here. And is it, like, the beef versus round?

Hovik Azadkhanian - 00:02:57
Like, you know Yeah. Yeah. So it's it's all beans. We don't do any ground coffee. We work coffee roasters and we're specialty coffee roasters and everything in my life revolves around excellent coffee. So, I have a pretty pretty firm belief that whole bean coffee is a better option, for your mornings. Not knocking anybody or if you buy free gram, that's fine. But, yeah, we're we're a whole new company. The 6 SKUs that we have, so we have our, Good food award winning coffee. That's our sugar phoenix bun.

Hovik Azadkhanian - 00:03:20
That's, from what I understand, the first regenerative coffee brand, 1st regenerative coffee stew to everyone the good food award. That's our, like, meat product. That's like a medium roast. We have our puck aisle honey lock, which is the first Again, as I understand, 1st nationally distributed honey processed copy, and that's a 100% rock certified. We have our bedrock blend, which and and the pakkyle is like a lighter roast. Our bedrock blend is a dark roast.

Hovik Azadkhanian - 00:03:52
It's the darkest roast that we roast in house. And so we don't quite take it as far as a French roast, but it's it's certainly very bold, and we call it like the bedrock because it's the bedrock foundation. Of your day, if you're darker or streaker, that is, also a 100% rock. Then we have our daylark 1, And we have our goldenrod blend, which are both, like, really easy to drink medium roasted coffees, our our coffees are very sweet naturally. Airline roasting. We use something called a culinary roasting style that we developed in house.

Hovik Azadkhanian - 00:04:26
I'm sure we can talk about that a little but it's a very sweet tasting, naturally very sweet tasting coffee, very easy to drink. And so we we pride ourselves on being absolutely one of the best quality coffee is available on the store shelf. And then, of course, being a 100% rock certified is is critical to us.

Kyle Krull - 00:04:50
Holvic, I have to appreciate the way you're already talking about coffee. There's a level of intensity and education already. And I also have to ask you, and this might be an impossible question for you to answer, but, like, which of these is your favorite? What are you drinking right now and why?

Hovik Azadkhanian - 00:05:07
Right? Yeah. Right now, I'm Vickygo Sugar Friedxblood. It's, so I kind of switched back and forthless. I usually start my mornings at around 4, 5 in the morning. Because I I work, about an hour a half away, so I'd like to get into the factory early. And so I start my mornings off drinking the PakiyaElhoney lot that's, the honey processed coffee that's 100% rock certified. That is a very sweet, very honey like coffee. I kind of liken it to sipping a really, really nice scotch. It's a sipping coffee. It's absolutely delicious, very syrupy.

Hovik Azadkhanian - 00:05:32
But then as I get to work, I switched to sugar Phoenix because I want something slightly more intense in flavor, so it's a little darker of a roast. And I think it's a little more like bad ass sounding. I like to get a little energy in the mornings. The caffeine from the caffeine from the puck aisle doesn't do anything for me. It's when they get in. Copy.

Hovik Azadkhanian - 00:05:56
I think that's where I have enough energy to go through the day. But, yeah, Sugar Phoenix is right now is what I'm drinking right now.

Anthony Corsaro - 00:06:09
That's amazing. I love it. I'm a fellow fan of coffee and caffeine. And I had a little bit of expo, so I appreciate that. That was awesome.

Hovik Azadkhanian - 00:06:20
Oh, we have to send you some. It's it's really cool.

Kyle Krull - 00:06:25
If and I went to breakfast after Expo West, and he brought in a little plastic baggy, his own little coffee. Like, that's how serious he is. Good.

Hovik Azadkhanian - 00:06:32
I'm glad. I'm glad to. So I'm glad to know I'm talking to fellow enthusiasts because,

Anthony Corsaro - 00:06:39
Kyle doesn't drink coffee. So I'm I'm your only hope on this episode. Kyle's Casado Coffee guy.

Hovik Azadkhanian - 00:06:45
Enthusiast. There you go. Got it. Okay. Great correction. There you go.

Anthony Corsaro - 00:06:50
I I already have, like, a 1000 questions from what you just given us on the roasting process and kind of jump the manufacturing process and it's cool to continue to see once again this this theme among the returner brands of the the regenerative ness doesn't just stop at the farm. It continues into the manufacturing. So so I wanna make sure we talk about that. But before we go there, you know, it's really clear that you've been doing this for a long time, man. So give us, you know, your background story and how kind of heirloom came to be.

Hovik Azadkhanian - 00:07:17
Yeah. I've been in the coffee industry basically, my whole life, I started to roast coffee with my dad at, like, eight years old. My friends are, like, outside playing soft and I was just sitting there sweeping the factory floor in the little at the time, it was a small, very small coffee shop. And I remember like hating it very much because I just thought I'd gotten to play soccer. But my dad was really insistent on me learning the craft. And, it was It was really something that I appreciated later in life because I've basically done nothing else, for the past 30 years. But coffee. And I've been in a very unique situation, a little different than traditional coffee roasters. So the story kind of starts with my dad.

Hovik Azadkhanian - 00:07:53
He moved to the US in the fifties, when he was sixteen years old, didn't speak a word of English, and, didn't didn't know what he was gonna be doing. He moved to the US, started working and following, you know, what he saw as his American dream. And his mother was, had some experience in roasting coffee. So, you know, he kind of knew that craft, and he went to school. He wants to become a doctor. He ended up bailing on that dream to start a business because you saw in America, you can really make something for yourself with with nothing.

Hovik Azadkhanian - 00:08:24
And so you started a small coffee company it was a small coffee shop. The coffee shop grew, did really well when he opened another coffee company that was like more of a B2B style. And he ended up selling that to his business partner. And then, you know, he kept his brand, and that's kind of where I grew up. And then in 2018, the partner called me up and said, hey. I wanna retire your debt. Kinda taught me everything about this business.

Hovik Azadkhanian - 00:08:51
So, I think it's fair for me to to give you first dibs. And so, I ended up buying the business, the building and the manufacturing space and that was like a really big risk for me because I had to take on, yeah, I had to take on a major. It was a major Wow. It was a major thing. Yeah. Mortgage my house.

Hovik Azadkhanian - 00:09:15
So it was a it was a very, very scary time because I didn't, you know, I had to bring the company back into the family somehow, and my business partner who's, basically, like, what are my best friends in a very close mentor? He helped me kind of guide through the he guided me through the financing part of this. And so we ended up buying the business in the building in November of 2018. I was like, awesome. We bought this factory. And I said, but the reason I bought this is I wanna start my own coffee brand, and I want it to be, something that is is incredible, but we kind of put it off to the side.

Hovik Azadkhanian - 00:09:48
We're focusing on the current B2B business. And so that was 20. So beginning of 2019, that was our 1st year in business, and that was kinda cool. We we were doing a good job, and it was fun. And then 2020 hit, that's when the pandemic hit, and the factory kind of, like, went silent for a while. And that was very scary because I just, like, is put up all this equity. Or I I put up all this, collateral to buy the business.

Hovik Azadkhanian - 00:10:15
And I was like, wow. We're we're kind of in a weird spot now. And so That's when I took a step back. I said, look, this is the best opportunity. We can kind of really dial down how we wanna run this company. And we ended up clearing up the entire factory.

Hovik Azadkhanian - 00:10:28
We took everything outside and one by one brought things back in clean shop, made it like a hyper food safe environment. And, made it as operationally efficient as possible, added some more roasting capacity, and tried to become, my eyes, the best coffee roasting company, that we could meet. And so that was an interesting journey because At that time, I had a lot of spare time to kind of think about what I wanted to do. So I I was like, I'm gonna start a coffee brand. Can't be that hard. I've been coffee forever. So that is not how it worked out. Shocking.

Hovik Azadkhanian - 00:11:05
Who'd have thought? So we we launched our first coffee brand and that failed miserably. And so I was like, okay. I I I learned a lot, but at the same time, you know, right? Different. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. It was not didn't last very long.

Hovik Azadkhanian - 00:11:29
It was, it was around for, like, 6 months, and so we pulled the plug, but that had nothing to do with regenerative coffee. The thing is I've been in coffee for so long, and I've seen the supply chain, and we ended up roasting, you know, just as as a as an activity that we do in this factory. Roasted a lot of coffee for other brands, and so we did a lot of private label. And I was able to kind of see, different sustainability promises and how they, manifest into the product up on the shelf. And I started to kinda, like, scratch my head a little bit. And I said, you know, There's a lot of claims on these bags, and I I kinda know what went into it.

Hovik Azadkhanian - 00:12:08
And is it is a slot they're not connecting. And so I I got a little Like, I got a little upset and, I started to do a lot more research and then I found out that, you know, the basically, I found out the world is likely not gonna be able to produce special degrade coffee, by 2050. And so that, to me, was like a major alarm because I'm a 3rd generation coffee roaster. I come from, a line of really hard work, and I want my kids to have something to do one day, that's related to the coffee industry. And so I was very concerned about about that. And so I started to learn about Sustainable farming and sustainable farming practices across the equator, which is, like, super different than how it's done in the United States. Right.

Hovik Azadkhanian - 00:12:48
And, you know, there was there were a few certifications at the time, but then I started to to research some of the, So I started to learn some of the research that the Rodell Institute was was printing out. And I kept hearing this word regenerative, and I kinda, like, glanced over in like, okay. That's, like, probably just another buzzword or something. It can't be that, you know, that big of a deal. And then I just started reading. I was like, Oh my god.

Hovik Azadkhanian - 00:13:19
Oh, oh, oh, oh, oh, this could actually save the future of coffee. And then, of course, it's stabilized. It could probably save the entire food system. Not just copy, but, okay, this is this is my calling. Like, I think I have to say future of coffee. It's up. You guys.

Anthony Corsaro - 00:13:42
Love that.

Kyle Krull - 00:13:43
So, you

Hovik Azadkhanian - 00:13:43
know, we're pretty sure.

Kyle Krull - 00:13:44
We're not, you know, just sort of brand to see what happens. It'll let's give you the future of the world or coffee or both.

Hovik Azadkhanian - 00:13:52
Yeah, so we said, okay. We're gonna start the 1st regenerative copy band, 100% regenerative copy everything about it is gonna be regenerative. We were introduced to a company called, sustainable harvest, and they're, a relationship company. So they're not a typical coffee distributor or broker, they intend to introduce and maintain the relationship between roasters and first, and they were leading the way in rock certified coffee. The very first rock certified coffee farm in the world ever commercially available came out of Nicaragua, and we ended up buying 1 of the first, containers of that coffee It was awesome. 2 other, coffee companies ended up buying this first, like, 1 or 2 containers. And I was like, dude, I have to be 1st here. So I ran over the report with my car. And I said, how do I make sure I get the first bag of coffee on the office container?

Hovik Azadkhanian - 00:14:39
He's like, sir, this is Daryl area. What are you doing? You know, how did you get that security? I was like, like, like, this not, like, I know this sounds ridiculous, but I have to get that first bag. You know? Yeah. Who is this guy?

Hovik Azadkhanian - 00:14:50
So, long story short, it is a very long story how I ended up doing it, but we ended up getting the perspective copies my car, and I ran back to my open roastery, and I roasted it on my IR5, 5 kilo digit roaster. And so that was the 1st batch of rock certified coffee, like, ever. And then we ended up adding that to our lit to our school list. That was the cooperative team of Secakwee, and It was a nominal copy. And that was the the birth of kind of the the movement for us. We ended up Adding that as a SKU. And by the way, this is like, this 2022.

Hovik Azadkhanian - 00:15:30
So, yeah,

Anthony Corsaro - 00:15:38
not popping.

Hovik Azadkhanian - 00:15:39
Yeah. Very recently. But if we go back a little bit, like, we started this brand, there was no regenerative copy available. There was nothing farms were practicing the January of agriculture. By definition, they were practicing the January of agricultural practices. They've been doing it for many years. In fact, centuries, but generative organic certification is very new to copy and it just didn't exist. So when we launched, nothing was rock certified, but they were all organic certified and all regeneratively grown. And so we knew that all the farms that we were sourcing from would eventually reach rock certification.

Anthony Corsaro - 00:16:13
Hovig question for you. Before kind of the regen epiphany, were you already, like, a big fan of organic and you already kind of had an standing with this coffee legacy that the way that it's grown is like super important and like sustainability is super important. Like, what what was the paradigm you're operating out of before you kind of went like, hey, we got support rock. Like

Hovik Azadkhanian - 00:16:33
Yeah. I I was very familiar with organic farming and fair trade farming. It's always been a part of what we do here. And, for for me, I I really wanted to connect connecting war with the origin and with the farmer. And the stories were very similar. So as I was learning, like, the world is in trouble, you know, you know, coffee by 2050, doesn't sound very good. Like, also, the first thing that I thought about was, like, I thought of my dad's story, he left the family farm, because he saw no feature in the farm and he moved to the big city, in this case, in the big country. And that was at a very different time, but the story resonated and it keeps repeating itself. And so I saw it.

Hovik Azadkhanian - 00:17:11
I was like, what are the kids of these farmers gonna do? They're gonna go move to the cities and work and, you know, something else who's gonna farm our food. Like, this is

Kyle Krull - 00:17:26
kind

Hovik Azadkhanian - 00:17:27
of a this is an existential risk. And so the the the stories were so aligned and I was like, okay. This is really important, but organic and fair trade farming in terms of coffee, this has been a part of our offerings for, I don't know, past 20 something years. And, yeah, regenerative was step beyond. Yeah. The problem is with organic farming, there's the NOP approved list. Right? There's organic doesn't mean pesticide free or chemical free.

Hovik Azadkhanian - 00:17:45
It just means you're allowed to use approved pesticides and chemicals. So, like, it's kind of not really doesn't for coffee, it's very different. The industry The coffee category is very, focused on sustainability, at least in specialty grade, specialty category. And These certifications are very important for for the farmers. So, yeah, I was very involved with organic encroachment beforehand. And I was really happy to be at the forefront of the regenerative organic, call it a movement.

Hovik Azadkhanian - 00:18:16
So our tagline is pioneering, regenerative copy revolution.

Kyle Krull - 00:18:30
I kinda feel like your tagline should be coffee is life. You strike me as the, the the Danny Roja you know, if if anybody's named Ted Lasso, like soccer is life, football. Sorry. Football is life. Like, when you said when you said, like, we're not gonna have coffee by 2050. That's, like, the first thing that popped into my head is like, this is the Danny Rojas. I thought, you know,

Hovik Azadkhanian - 00:18:52
so Sorry. It's it's it's scary. I don't wanna drink tea.

Kyle Krull - 00:18:58
Right. You know, I get it. But, you know, one thing I wanna ask and this this might seem like kind of an off off the wall question, but why did you choose the name heirloom? And what does that word mean to you? We'd actually had an interesting conversation today. Like, what does heirloom mean? Because, I mean, you can have heirloom tomatoes. You can have heirloom chickens. You can have heirloom cows. Like, why that name and what does it mean to you?

Hovik Azadkhanian - 00:19:20
It's an excellent question. First thing we thought of when we were naming the company, I mean, we had a white we did a whiteboard exercise and we had, like, 20 different names on the wall and heirloom was and and we're doing our, like, what a decision making process. My head kept going to tomatoes. And I was like, I don't want people thinking you're a tomato company.

Anthony Corsaro - 00:19:43
It's

Hovik Azadkhanian - 00:19:44
like, it doesn't doesn't really work. But then I said, okay. I kinda have to think about this. And I'm really fortunate to live an hour and a half away because I have a lot of time to think. And so, I I kind of wanted to For me, it was important to tell my family's story in some way, shape, or form, but also I wanted to pay homage to the varietals that are used, in in, or in regenerative organic farming. And so generally not always because there's a supply, constraint, but almost always, we try to buy coffees that are, heirloom bridal of coffee. They've been around for many hundreds of years. And I wanna pay homage to the guys who started or the people that started this movement, by accident, just by normal farming methods. And so everything really kind of fit. It's also something that the more you say it, the more it kinda sticks in your head.

Hovik Azadkhanian - 00:20:34
And we ended up, we ended up going with early moves into that. Are those some other company named that, brand name that just now that I think about it, I didn't even wanna say it. It's kind of silly,

Kyle Krull - 00:20:52
but Alright. It wasn't tomatoes, you know, tomatoes are so

Hovik Azadkhanian - 00:20:56
complicated. You saw the whiteboard, then you must have tomato's coffee. Yeah. No. Yeah. So that's that's how we chose airloom and it's it's kind of like we wanna pay homage to the product itself. We wanna we wanna communicate to the customer that The varietal of coffee that we're choosing is a very robust varietal. It's been around for a very long time, but also we wanna pay homage to the to the story of not just my family, but the family of the farmers that are involved. 1 of our coffees come from a 3rd generation coffee farmer. So it's like a lot of alignment in this industry and a lot similarities and parallel stories.

Anthony Corsaro - 00:21:32
What what's the state of the varietals? Like, is call like, do we have are we full blown GMO coffee at this point? Is it like, I'm I'm sure there's been a lot of breeding and whatever the last 50, 70 years I would assume, but, like, could you could you give that as the lay of the land? Like, how does it compare to, state of, like, corn and soybeans today or something like that. That's, like, so.

Hovik Azadkhanian - 00:21:51
Yeah. Coffee coffee is I mean, when when we say GMO is, like, There's GMO and then there's breeding. Right?

3 - 00:22:00
Right. Right.

Hovik Azadkhanian - 00:22:00
Coffee has been bred to be robust. Any any any prop that exists today at scale has been bred to be robust. Right. Like, you know, I'm not too familiar with the GMO part of coffee. As I understand it, they're it's either nonexistent or it's not as much. Yeah. I think the bigger issue is more about pesticides than coffee. That is that is more of something that I'm familiar with. And I know that that's a major problem, not too familiar with the JMO setting. In fact, I don't think there's much JMO and copy period.

Hovik Azadkhanian - 00:22:26
I do know that there's major corporations that are working on it. And we can talk about that when we talk about the rock certification part, but there are companies that are working on something and they're trying to, like, hide it, like, come call and get regenerative and grown.

Kyle Krull - 00:22:49
Oh my god.

Hovik Azadkhanian - 00:22:50
Yeah. I'll I'll tell you if I misheard when we get to that. It's it's kind of kind of insane actually, but, yeah, we got that in a

Anthony Corsaro - 00:22:57
Tell us about the pesticide problem. I mean, what Okay.

Hovik Azadkhanian - 00:22:59
So there's a lot of pesticide being used in coffee, non organic coffees, and nonregenerative organic certified copies. Pesticides are a huge, huge problem. And so, like, you know, people say, hey. What's regenerative coffee? And to tell that story, I have to tell the story of what degenerative copy is. And so I tell the story of how top soil is being washed away at a record rate and people like, oh, that's terrible. Yeah. Let's just I don't know.

Hovik Azadkhanian - 00:23:18
Like, you don't get it. Like, this is let me tell you why this is so bad. Farmer sees a crop, that he wants to make viable So he buys pesticides and nitrates in all these synthetic, inputs from the other side of the world, puts them on a giant ship ships it over to wherever it's growing. Let's just say South America for now. Mhmm. Burns all that diesel, puts it on a truck, burns the diesel to get up to the mountain gets to the mountain, ports it onto the soil, brings these big industrial machines, burning diesel, tilts the soil, rips off the ground, implants a crop.

Hovik Azadkhanian - 00:23:46
And that season, that crop is awesome. Great yield tastes great, relatively. And, you know, he does pretty well. Well, the problem is once the rains come, everything that they just did washes right away into the creeks, which ends up into the rivers, which ends up into the ocean. And so the only option the farmer has is to go out buy more synthetic fertilizer on the other side of the world, earn a bunch of diesel, bring get to their outside of the world, and it creates this cycle of destruction and degeneration. And it's It's a real measurable problem that exists in this world, especially in the coffee growing industry.

Hovik Azadkhanian - 00:24:31
I mean, if you guys are, like, rejunctizing, you know, it exists in every other crop, I I can only speak for coffee, but it's a real problem. Enformers are losing land because of erosion and they're losing land because They're just not able to make any real money, off of the product. And so the large corporations are coming and taking over and moving into, like, mechanical agriculture It's it's it's neat. It's it's it's a solution that we can solve by switching to regenerative copy or regeneratively grown patterns now. For us, like, we we go a step further with rock certification, which is really important, but there's a lot of pesticide use and copy your own role. Any non non, non organic copies. That's a good chance. Said it's been filled.

Kyle Krull - 00:25:23
You just set the table really well for, like, the model. And I love the way you told the story about, like, where the inputs are produced, how they get there. That was that was beautifully done. But tell us, like, How is regenerative coffee produced? I think that's

Hovik Azadkhanian - 00:25:36
regenerative. Yeah. And so the opposite is the opposite of the degeneration system is the regeneration them. And so farmers, have found a really unique way to grow coffee. And one of those ways, so we were in Hungary a couple weeks ago or 3 weeks ago. To the 1st, regenerative organic certified coffee farm in the country and one of the first in the world. And it's run by this brother and sister Edgar and Karen. And this story is pretty cool. I don't know if you remember, like, maybe 8, 5, 5, 6, 7, 8 years ago. There was like a group of, Central American migrants that were moving to the United States. Slowly, it was like a caravan.

Hovik Azadkhanian - 00:26:09
Very scary situation according to the news, whatever that And so, the the brother and sister Edgar and Karen decided to stay in this town called Markala and Honduras, and they ended up, you know, getting a plot of land that was kind of, like, not very viable. Wasn't really producing anything. And they decided to practice regenerative agriculture. So it's kind of like a dry land. So they dug small holes to plant the to plant the coffee in, but they also created a mulchiness using, coffee husk and coffee cherry skin, and then they go up. I mean, this is like a crazy story. They go up to the Montecillo Mountains to like caves and whatever.

Hovik Azadkhanian - 00:26:48
Harvest microorgan microorganismic soil, bring it down to the farms mix it into their mulch, and then they would put this like really long thermometer into the soil and they show how the the, bacteria on my microorganismal activity is creating heat. Heats up the soil and then they like turn it or whatever and it creates this super, super nutrient dense mulch. So they poured that mulch all over the the coffee right before the rains came. And then the rains came, flooded the dry area and, all those nutrients went into the soil. Well, now these microorganisms are naturally telling the soil, creating an opportunity for, the soil to be a lot more viable, but then they prioritize cover crops to be grown. So there's like grasses and there's a native small plants all around. It creates this, like, incredible spongy layer on the on the top soil, which you can feel.

Hovik Azadkhanian - 00:27:44
So we went to one of the original, like, what they called, like, a a year 1 regenerative form, like a debt form, and then we went to a fully functioning rock certified regenerative farm. And, like, the, the first farm, you can, you can knock on the, on the ground. It was like rocks, rock solid clay,

Kyle Krull - 00:28:10
And

Hovik Azadkhanian - 00:28:11
you're in the regenerative form and you're bouncing, it was it was it was so full of life. I'm like, I could put the swims, like, worms, and bugs, and, like, it was it was a line. And the other one, like, you just, if you don't wanna just look like a, like, it was a desert desertification had desertification had kind of taken over. And so the the process is a very different pot. What's also important is they do this all without any synthetic inputs whatsoever. It's literally just mulch, microorganisms from the mountains, cover crops, and then they allow their, like, chickens

Kyle Krull - 00:28:48
or

Hovik Azadkhanian - 00:28:48
whatever the animals to run free and eat all the bugs. And it's an input free other than, you know, natural input free way to farm. And the difference between the a dry farm and the b regenerative farm was day and night It was like you're looking at one of those. It was almost like a like a marketing, photo. Like, this is what's gonna happen at the end of the world. That's what happened in the beginning. And then you remember, Jennifer was like, everything is alive. And what was awesome is They started brother and sister to create this co op, but 8 8, 9 years ago, now they support 400 families and they're the largest coop in that area.

Hovik Azadkhanian - 00:29:17
They they provide jobs for, all these families. And it's your round income, right, because you have to maintain the farm It's not just harvest season where they come and grow the coffee. So it creates a social structure with economic opportunity and upward mobility that didn't exist, in the past. And so when you go to this area, Mark Kala, it's in La Pazs, Honduras now. It's vibrant. It's alive. The people are alive.

Hovik Azadkhanian - 00:29:45
They're Like, they're happy is it's it's a quality of life that's measurable and, you know, I'm I'm probably going off the question was, like, what does regenerative farming get caught? But it's an entire system. Right? It it affects everybody involved. From starting with a really dry piece of land to growing coffee and a really fertile piece of land. That process is so it's so wholesome and so fulfilling for these families that are involved.

Hovik Azadkhanian - 00:30:13
And, oh my god, the level of pride that these farmers feel was so palpable. Like, I've never met a group of people so proud of what they do before. Really, this was shot, like, Ratir Smiles is incredible. They were so happy with what they did in this area. And I was like, this is it. Like, we can all do this. It's like, the 20% of the world, let's just try this. And it'll it'll change a lot of what's happening, on the planet.

Hovik Azadkhanian - 00:30:38
And I think the issue is gonna be, you know, when you look at conventional farming and you look at mechanical agriculture or agriculture and all the yields involved and when a larger corporations get involved, I think they tend to sometimes forget about the people that are involved in the growing process, whether on purpose or or not, you know, it's It could be a very destructive system if you're not using your general department. And then for us, going a step further with rock certification was even more important because that just verifies and is kind of the gold standard for, regenerative and organic farming. Did did did that 20 minute rant answer your questions?

Anthony Corsaro - 00:31:27
That's great. It was great.

3 - 00:31:28
I love it. That was our first

Anthony Corsaro - 00:31:30
it was our first big time breakdown. I think I mean, Good Sam is the only other brand we have with coffee and that was a long time ago and we didn't get super in the weeds on on that specifically with Heather. Let's let's talk about the certification piece. I wanna double back to the manufacturing and the coffee roasting piece. But the certification piece, I think, that you know, we've had plenty of people talk about the certification kind of, discourse in the space. We've had people talk about rock. We know why it's so important. There's plenty of information out on there.

Anthony Corsaro - 00:31:56
I would like you to educate the the listeners on why it's so important in the coffee category because it seems like there is a much higher premium on certifications for coffee versus some other things that we see in the grocery store. So just break that down for us.

Hovik Azadkhanian - 00:32:12
Right. So there's, like, three things we need to understand when it comes to the coffee and and rock certification. The first is every certification that a farm produces or co op produces costs the buyer, me, a premium. So if you're rock certified, you're also Fair Trade certified and you're also, organic certified. So you're talking triple certification, and there's a premium for each one. And so rock certification specifically to me is the gold standard in regenerative, but I think in the coffee industry, it's the most verifiable, transparent, measurable way cause positive impact and positive change, on the ground.

Kyle Krull - 00:32:59
The

Hovik Azadkhanian - 00:32:59
other thing about regenerative organic certification is that there are 3 pillars our top soil, animal welfare and, fairness to farmers, but fairness to farmers, keep going back to the farmer, but the rock model is so much more, like, in, like, in-depth and so much more, real. Like, the freedom of association a bullet point. I think if you check out Rock's website, or I, I haven't been there in a while, but it's freedom of association. And you kinda, like, glance over to that. You don't really understand what that means. Traditionally a very, like, like, like, a group run organization So farmers generally get the worst end of the stick. There's usually a, you know, in traditional agriculture.

Hovik Azadkhanian - 00:33:37
There's usually like a group of of call them distributors, call them whatever you want, but kind of drive around the farms and say, hey, today's price is this. This is what you're getting for your coffee. Oh, you have no choice, by the way. This isn't about you. It's about me. This is going to pay you.

Hovik Azadkhanian - 00:34:01
Oh, you have some certifications you want on your, your problem. I'll give you a couple extra No big deal. You have no choice, and I see you've already made a copy, so you have about 24 hours before it goes back. History decision. And so it puts farmers in a really tough spot where they have to sell their yield, whatever it is. I mean, these are these are really small farms.

Hovik Azadkhanian - 00:34:21
These are like, you know, backyard farms that are growing. And so it's very controlled and very unfair. And so with regenerative organic certification, the freedom of association is so critical because the farmer sets the price. There's no one else who sets the price. There's no distributor. There's no I mean, I I should say the co op or the whatever certified group is because these are groups of many different par moves, but they all have a vote, and they all have to say, they are all making the decision together And when we buy degenerative organic certified coffee, you know, we pay the price that the farmer feels fair.

Hovik Azadkhanian - 00:34:47
We don't really negotiate we don't we don't nickel and dime because we know that for the certification, it's so important for the for that group of farmers, but also, like, I think the consumer is willing to pay 5.10.15¢ more to know that their dollars are supporting good versus bad. On the top soil part for rock solidification and coffee, it's really important because coffee is, you know, typical coffee plant lasts for years. And so the top soil is even more critical, and there's very little opportunity to save that soil if it washes away. I mean, you have to basically call.

Hovik Azadkhanian - 00:35:35
I'm not a farmer. Right? I don't I don't know. I'm a coffee guy, but As far as I understand, you have to kind of, like, start over if your if your soil is gone. It's it's a little difficult. So, rock certification thrust was really important. Also, I think Rock is at this point in time the most understand, understandable certification in the viewpoint of the consumer.

Hovik Azadkhanian - 00:35:52
And I think that as it's growing, there's it's just gaining market share. So it's really important for us to be part of the rock certification movement, because I think the consumer just recognizes it more. And really they are, in my opinion, they are the gold standard generative slash organic certification. It was really Yeah. The the the the level of transparency is crazy. It's helped people when we do our reporting. It's like They wanna know which group picked the coffee.

Hovik Azadkhanian - 00:36:30
They wanna know which group transported the coffee from the farm to the drying station. They wanna know which drying station it went to, what hauling station it went to, which transports additional way through from the polling station to the bat. I mean, every step of the way is documented, and it provides a structure that makes it credibly difficult, if not impossible to greenwash and hide uncertified coffins, which is kind of standard operating procedure for the same industry for the past 100 years. It's yeah. And it's kind of a BS free way to do it.

Anthony Corsaro - 00:37:07
It really feels like in that category, the buyers and the retailers are demanding that level of certification versus maybe some other categories where it's not up to up to that point yet. I mean, Like, that that is the most certified aisle in the store when I walk a whole foods to me is is the coffee products. Right? So it seems like it has extra weight there as well.

Hovik Azadkhanian - 00:37:25
Absolutely. The the coffee aisle is basically it's kind of table stakes. You're not getting in unless you have something, in terms of either sustainability or organic But we kind of knew that sustainability was gonna be the major one of the 2 major pillars of the brand. But the other thing is, like, if it doesn't taste good, no one's gonna buy it. So that is the whole other, like, that we're getting to the culinary list. We ended, I guess, but sure they'll buy it. The packaging is pretty. It looks cool. It's like different looking. Whatever. It's great. I'll buy it one time.

Kyle Krull - 00:37:58
But if

Hovik Azadkhanian - 00:37:58
it doesn't taste it, I'm never gonna buy it And so we wanted to make sure that it was just, like, fantastic because they buy it again. Their dollars directly go to support the partners. I mean, it's it says says cut and dry as it gets.

Anthony Corsaro - 00:38:11
Yeah. Yeah.

Kyle Krull - 00:38:12
Holvic, we're we're on the quality, which is a great segue. I really wanna talk about this. And I think coffee, 1, and chocolate are 3, like, primary categories where regenerative can really showcase the nutritional and or taste benefits. Right? I'm really curious to see what you're taking on this because you've been ingrained in coffee like you said since you were eight years old. You know, when you first started playing with regenerative coffee beans. Did you immediately notice, like, a difference in quality? And if so, like, what what was that experience like?

Kyle Krull - 00:38:32
And then, like, take that a step further and talk about, like, how you're roasting these beans, what makes that different, and how you're how you're telling this story to the consumer, because to your point, triple certification, There's a price premium attached. Yeah. How will you tell that that story to get people to make that initial purchase?

Hovik Azadkhanian - 00:38:56
Yeah. When we first got into the regenerative space with this brand and we started roasting regeneratively farm coffees, we noticed right away that Like, something was different. Flavors are a little more pronounced and they're a little more, little a little brighter. But you you can't have a without b. In this case, you need to be able to roast it in a very unique way. So when we got into roasting this brand specifically, we wanted to do something that was very different in the traditional specialty coffee suggested roasting model. And this is where background kind of like gets into it and my history of being coffee for so long. I roasted coffee for a long time, and I've seen so many different like, ways to grow. Excuse me. Waste to roast.

Hovik Azadkhanian - 00:39:46
I wanted it to be like, to taste different. And so I started to, like, little bit research, fine dining techniques and we had, somebody who helped us out a little bit to kind of, like, guide us in the right direction in terms of, like, a mere qua technique in fine dining or, or, like, base flavors. And I felt said, you know, this is really interesting. What if we can do something that presents itself in a very different way in terms of taste? And so that's where what we turned into the culinary roasting style, you know, we say that roast it, a specialty bread coffee, it's great. So you have to have really good coffee for it to be on the shelf. But especially in the same way.

Hovik Azadkhanian - 00:40:33
So what different is we follow that culinary roasting style where we embrace and we enunciate and we, for, kind of like focus on, flavors that may mess may not necessarily be present in the coffee bean. And so we slowed the roasting process down in certain stages, and we speed it up in certain stages, including the very end stage, which is the caramelization stage, while all the sugars in the coffee caramelized, we have created a system, a roasting system that we call Well, again, culinary. But it delivers flavor as you drink it. So you'll have a forward when you first drink the coffee, you'll get this, like, intense forward. And then you get a solid body, and then you'll get some sort of sweet finish. And most of our coffees have a very sweet finish because of that that late stage caramelization and the coffee roasting.

Hovik Azadkhanian - 00:41:24
And so what you're getting is, like, if you sip this coffee and it, like, coats your tongue and it's sticky and it's serapine. It's really sweet. And then you stop drinking and like 20 minutes later, I think I can still taste this. It's it's really good. And what we're finding is that towards the end of the cup, when people finish drinking coffee, like, they can still taste it for quite a while, And that's because of the, the end stage caramelization that we do. It's a very unique process. It's also very difficult to do at the scale that we roast You can do it in a 5 kilo roaster.

Hovik Azadkhanian - 00:41:55
You can do it in a 10 kilo roaster. We have a 280 kilo roaster. So we roast about £600 at a time every 15 minutes, and it's, like, incredibly difficult to hit the mark every single time. Because if you don't, You just you lost the batch. So so that's the roasting process. It's very different than traditional roasting style.

Hovik Azadkhanian - 00:42:16
And when you drink our coffees, it's like a sensory experience. It's not a culinary. I mean, it's not a cop a coffee. It is a truly a truly fully immersed sensory experience and it really tastes amazing. And so how do we communicate that to the consumer? Well, I can write, like, a forty page description black, but no one's able to read that. And so, so we really focused on the premium packaging.

Hovik Azadkhanian - 00:42:39
That was a really big deal for us. We wanted the packaging itself to say Hey. I'm I'm very different from everything else on the store shelf. I'm very premium. If you feel the bag, it's like super thick

Anthony Corsaro - 00:43:04
the gold. I love the gold font. Yeah.

Hovik Azadkhanian - 00:43:08
Premium premium premium. What about this is different? It's the packaging itself looks very premium. And so when the customer buys the coffee, you know, opens up a little zipper thing, and the first thing they do is, like, smell the coffee. It's like, this is Oh my god. Wow. What is it smells like chocolate. Like, let's try this. And then, like, taste the coffee.

Hovik Azadkhanian - 00:43:20
And what we're finding is people get heirloom as a gift because it's so pretty. And once they taste it, they cannot go back to their traditional cup. We've seen this incredible growth for the brand so far. I mean, look, we're only a little under two years old. Really, we've been on shelves since March of last year nationally. And the the quality really speaks for itself.

Hovik Azadkhanian - 00:43:43
And so what we're finding is our our customers tend to buy it after they taste it because it tastes so good that they buy it because of packaging. So it's a it's a 12 punch. It's in, what I've learned is the best way to communicate quality of your product to the consumer. I think we we probably had 20 or 30 versions of this packaging before we landed on where we need to go. It's like, I'm surprised they they took my calls after that. I was like, hey, guys, you know, a good job.

Hovik Azadkhanian - 00:44:15
Can we just can we just

Kyle Krull - 00:44:22
play this a little bit? Okay.

Hovik Azadkhanian - 00:44:24
I could just imagine he sees COVID calling. He's like, oh my god. We're gonna do that. We are gonna start from beginning again, but it was so critical for us. I mean, it it there's some things you can't skimp on and the the perception, the customer, the customer has, like, 2 seconds, right, second and a half to make a decision when they're walking through a grocery store, It has to really speak to the consumer's emotional side, and it has to speak to the consumer on a premium level. Then once they get into the product, the case is correct.

Anthony Corsaro - 00:44:55
And, I mean, I'm curious how what y'all y'all are doing with the electric roasters. Hope it plays into this whole deal. So, like, I'll I'll link we'll link it to the show notes, but y'all have, I think, 14 electric grocers, and it was like almost a $1,000,000 plus grant with the California Energy Commission to to get these in y'all's facilities. So is there like a carbon neutral or or or net 0 like play here and just talk talk about the whole electric roasting piece?

Hovik Azadkhanian - 00:45:22
We have. Yeah. So we there's 16 electric coffee roasters made by a bell leather coffee roast company. They're out of, Berkeley, California. And so we so we we said, look, No one's really gonna take us seriously unless we become an authority in regenerative copy. So I said, I wanna create the world's first regenerative copy research lab. I wanna be able to buy different coffees in a setting where the consumer or the buyer or anyone interested can come and, see the coffee roast in case of the crackings. And so what happens is we get samples from all over the world. You know, I shouldn't say all over the world. Really south and central because that's basically where rock certified coffee exists right now.

Anthony Corsaro - 00:46:05
Yeah.

Hovik Azadkhanian - 00:46:06
And so we wanted to make it a people can kind of watch the coffee roast, but also is like, if we're gonna do this, I don't wanna put a ton of smoke into the air. In the Bay Area, it's very regulated and even then nothing is perfect. And so we were gonna end up buying some, traditional coffee roasters to phone to the lab But then I was approached by somebody who said, hey. Have you seen these, these bellwether roasters? I gotta

Kyle Krull - 00:46:32
I gotta pause it here. Are traditional coffee roasters run on, like, propane or gas, or how does it typically work?

Hovik Azadkhanian - 00:46:38
Yeah. So they're run on well, they're run on either propane or natural gas traditionally, in a, in a, in a, like, a syllable setting, it's all natural gas. And so electric coffee roasting with the exception of a handful of of places in the world, is is all basically run on fossil fuels. So,

Kyle Krull - 00:46:57
I had no idea.

Hovik Azadkhanian - 00:46:58
Yeah. It's it's all, I mean, almost all natural gas and propane. There's a few places that do electric. There's one in Canada that just launched that does, like, but they're like on the, Like, on the commercial side, so not I'm not familiar with them, but I just, like, read a book somewhere. They do, like, 100 bajillion pound coffee, every 10 seconds or that basic number. But, yeah, so it's a lot of a lot of fossil fuels we use. So for us, the regenerative bot was important because we wanted to tell the story of the coffee and the farmer, but at the same time, like, just to display coffee, I don't wanna burn natural gas and then I'll put all the smoke. So the bellwethers are a 100% electric and they're 0 emission. So there's no smoke that comes out. It's like filters it out pretty busy process.

Hovik Azadkhanian - 00:47:38
And so we're able to run these 16 roasters with, without having to worry about outputting the smoke or, or even getting involved, like, it's it's basically the lab itself is a net 0 lab, when it comes to roasting. We have brewers and stuff that use electricity. And, but, sorry, sorry, the output is net there's no there's no, there's no smoke or any type of output. Eventually, we're gonna run the entire lab on solar. The grant was really cool because California wants to leave the way in clean manufacturing in all aspects manufacturing. It's not just coffee. And where we are, my factory behind me, it's next to one of the most polluted corridors in the state, the 880 freeway.

Hovik Azadkhanian - 00:48:25
And so I think there was a there was a little bit of an alignment with the state. When we applied for the grant, we were gonna apply for one roaster, and I think that was, like, I don't I can't remember how much it was. And I was like, well, if we're really gonna grow the brand the way we wanna grow the brand We're gonna need more.

Anthony Corsaro - 00:48:54
Let's do 16. It's

Hovik Azadkhanian - 00:48:55
not that

Anthony Corsaro - 00:48:55
much different than 1. Send it.

Hovik Azadkhanian - 00:48:58
Okay. So every step of this process from the birth of this brand until, like, this morning when I walked in, people have been telling me I can't do it. And It's been a really interesting ride because I kind of I'm starting to really enjoy when people tell me I can't do something. I kind of go a little further and I'd like to prove a point. And so

Anthony Corsaro - 00:49:18
That's shocking to hear what the people that I know you have. Like, that doesn't check out at all based on our interaction so far.

Hovik Azadkhanian - 00:49:25
You know what? I grew up in very humble means. I had to, like, make my own, you know, I grew up in the factory. My dad didn't even have a lot of my parents didn't have a lot of money.

Anthony Corsaro - 00:49:34
What country did he come from, by the way? You didn't share that.

Hovik Azadkhanian - 00:49:36
He came from Northern Iran, and we're Armenian. So we're Armenian from Northern Iran. And, yeah, so he left the mountain basically left the mountains with a backpack. Like, walked across Europe to get on a plane my god. I'm afraid to know how the hell

Kyle Krull - 00:49:53
it is doing, guys. Yes. Wow. But

Hovik Azadkhanian - 00:49:55
but that that story was just like repeated a billion times. So it's in my head. So when people tell me I can't do something, I think it's like a really lazy way out It's just great for somebody to say you can't do it. What a great opportunity. I don't have to do anything. I don't have to get my hands dirty. Or let's hire a bunch of consultants to find a way. I'm like, guys, Just do it. So, when we when we went to the CEC, I said, yeah, I'd like to get 16 roasters because this is my intended output.

Hovik Azadkhanian - 00:50:14
But this is how much carbon you're gonna take out of the atmosphere if we do this deal and they ended up approving it. We ended up buying behind us steelasters. And we launched the lab officially, I think it was, like, 2 months ago or maybe 3 months ago or something like that. And it has been a really unique space because of all the R and D that's being done here, we're tasting copies from all over the world, and we're inviting farmers to come and tell their stories in our space. And so it really connects the entire, the entire, supply chain from from the guys that grow the coffee and the end user, the consumer, and they get to interact. I think it's really important because if we're not telling the story, no one else is gonna do it. I mean, the brand is growing pretty, pretty quickly.

Hovik Azadkhanian - 00:51:01
And I feel like I have an obligation to tell the story of people that grow the product, but also, like, Dude, we gotta save the future of coffee. It's super important. I want to drink coffee before, you know, get too old, and want it to be here, and I want it to taste really good. I don't wanna have to switch to, like, different varietals that are climate friendly that don't taste as as full body to crush or good or whatever. So, the lab was was an effort to tell the story of regenerative coffee. And so far, it's been doing an incredible job, and it's the most sustainable.

Hovik Azadkhanian - 00:51:33
I think it is the largest, collection of electric no other roasters in the world right now. And, it's the largest regenerative coffee research lab, on the planet at the moment. Amazing.

Kyle Krull - 00:51:54
Oh, we could keep talking about saving and what I love about that is the picture you painted about the co op because when you first said saving coffee, to me, I interpreted that as saving the cup of coffee, somebody drank But now it feels like saving coffee, saving the coffee industry and supporting the the co ops who are doing what you're doing with that commercialization piece and the the upward mobility and the, you know, creating and supporting this farmer's story where the people are proud of the work they're doing and they're positive impact, not just for themselves, but for the family and for their environment. So

Anthony Corsaro - 00:52:24
Hell, yeah.

Kyle Krull - 00:52:24
Just just in the in the, what, 45 minutes we've been talking, saving coffee has a whole new meaning to me. Which I really appreciate. I also also mentioned, like,

Hovik Azadkhanian - 00:52:33
it's what you coffee.

Kyle Krull - 00:52:35
Right. Yeah. It's it's not just coffee. And I I mean, I don't a coffee, but I've never been more interested in drinking coffee than I am right now. So credit credit to you in the story you're telling. You also talked about building this brand and how the brand side's going really well. So talk to us about how you ended up landing Sprouts nationally. Was that the first retailer you went to and, like, what the commercialization strategy has been so far, what the reception is going like, you know, just walk us through some of that, like, retail distribution piece.

Hovik Azadkhanian - 00:53:02
Sure. So we, we, like, soft launch the brand in, at the end of 2021, but we didn't really announce it until 2022. And, I think that was, like, March or something. And and we were not on the shelf until May, the very first grocery store that we, put our product on the shelf was a grocery store called Berkeley Bowl in Berkeley, California, which is Yeah. For those of you who are familiar with Berkeley, it is, like, one of the greatest places you could go to introduce yeah, to be introduced to natural foods, but, like, just incredible tasting foods. Everything there is just out of this world delicious. And so I approached the buyer and I said, Hey, I I love to get this product on the shelf. She looked at me and she goes, Another coffee night. Okay.

Hovik Azadkhanian - 00:53:48
So I

Kyle Krull - 00:53:54
Right. Over sat there in category.

Hovik Azadkhanian - 00:53:56
It is the most saturated cat category in the grocery store and knows that buyers are pitched probably a hundred times a week. I mean, I'm not exaggerating. And so they're like, She's like, alright. I'll give you a few minutes. Just just hurry up. Like, I I see. You gotta go. I'm like, okay.

Hovik Azadkhanian - 00:54:03
First regenerative coffee brand, roast down the road. It's incredible tasting coffee. And, oh, bags are really pretty. And please let me put this on your shelf. Like, I'll give it to you for free. Just just please, like, give me this one opportunity to look and reach, like, Fine. Okay.

Hovik Azadkhanian - 00:54:19
You can have the bottom shelf, and you can have 3 you can have 3 slots because we're moving these priorities. Perfect. But with the 3 coffees in, you get a call that week. So all of your coffee sold out. Our store opens in 30 minutes. So run and fill the shelf. Wow. Okay. So he ran filled the shelf. Coffee sold out again.

Hovik Azadkhanian - 00:54:40
Rang all the stuff again and we ended up, I guess we were like the the most sold coffee on that on the on the floor. Like, nobody looks on the floor. And so then I think it started to move upward. And, and so it really took off there, and we used that to prove our concept We just went grocery store to grocery store, knocking on doors, shaking hands, building, building a customer base, And then I just, like, I wanted to I wanted it to be, like, something that was special. So We ended up submitting the coffee to the good food awards at that time. I just which is this is a kind of a crazy story I'll just say quickly, but, like, I just walked by the roaster one day and I just took a scoop of coffee out.

Hovik Azadkhanian - 00:55:25
I said, hey, guys. I talked to Kelly Zeisser. She's our VP of success. She manages all operations. And I said, hey, Kelly. Could we submit this to the recruiter?

Hovik Azadkhanian - 00:55:31
She said, we we have to, like, We have to we have to roast, like, 50 different batches and you taste the best for a mixture. It's absolutely okay. I was just send the coffee. Like, what's the worst that's gonna happen? So we send the coffee in there and it's like, there was 17, by the way, this is like, you, we can't do it. So there was 1700 copies that were tasted. We ended up winning we were at one of the winners in the good award.

Hovik Azadkhanian - 00:55:55
And so we took that award and we went store to school and said, hey, I'll give you a free fill local, right, small stores. Can you please put this on the shelf? And they did. And every store that we put at a property on the shelf ended up either selling out or started just the velocity was crazy. And then another step was I wanna, like, submit to one of the larger companies. Can we do this? And everyone said, no. You have to be an established brand.

Hovik Azadkhanian - 00:56:15
It's like, you you don't know what you're doing. Like, alright, whatever. I've scrolled their website and I'll submit the problem. And, like, again, all of a sudden, we get a PO. We we were, we won the golden ticket award from Kaye And that really kind of, I think, set us up because we were given, access to their DCs at a much lower rate, because capital is difficult. Right? And so we, we submitted to Sprouts. We ended up getting this, like, crazy PR. I'm looking at it. I'm like, what the hell is this?

Hovik Azadkhanian - 00:56:43
And I call a rep, and she's like, oh, yeah. You're doing national with Sprouts. I was like, what? What? And those actually, it sprouts, like, spouts the the store? It's like, yeah, it's like, oh, wow. And so Sprouts gave us a chance, and we had 3 skews in storage Sprouts.

Hovik Azadkhanian - 00:56:58
We just law and that was in March of last year. And so from March of last year to now, we built a following of a lot of independence and natural stores, regional, groups and some, a few larger stores as well and a lot of smaller stores. We're the fastest growing coffee company in the natural set going to spins. Last fifty 2 weeks or something. And, it's it's moving very quickly for us. We just added 2 more SKUs to, Sprouts and to our national, offerings.

Hovik Azadkhanian - 00:57:31
And as of expo, so as of the 1st day of expo at the organic marketplace, we announced that we're a 100% rock certified on all of our SKUs that are

Anthony Corsaro - 00:57:46
Let's go.

Kyle Krull - 00:57:47
Nationally. Let's go.

Hovik Azadkhanian - 00:57:49
So and those 5 so 5 of those 6 will be available spouts. I think they're doing the reset now or,

Kyle Krull - 00:57:54
you know, in a couple

Hovik Azadkhanian - 00:57:54
of weeks or something. I think they're gonna move through existing import, and then we're gonna switch to the new rocks, but yeah, that was, that was a huge deal for me. It was so important for us. So, yeah, that, it it's been a wild ride. We're we're just at the beginning stages. We've sold, more units than anyone said that you can do, in a stage this early. And so it's just been a it's been an interesting experience so far, and I'm just waiting for the next thing for somebody to tell me I can't do.

Kyle Krull - 00:58:25
I love that story for a couple of reasons. You know, I think a lot of brands get these, like, really big guys, like, hey, I wanna go national and all these retailers right off the bat. Right? And I love the start a new backyard store. With having people super pre consumer aligned with your brand. Right? Yeah. And get your turns moving there.

Kyle Krull - 00:58:32
And and it sounds like you guys were able to also achieve that very quickly. But one of the the pitfalls of retail is to go too wide, too quick. And then you end up with not category average, like, subcategory average velocities. And you have to overinvest in all those doors just to reach, like, category threshold. So I I love that that story. It's super helpful. And let's take it to, like, what's next. So you've got Keihi locked in.

Kyle Krull - 00:58:58
I know that there's some weird stuff happening with UNFI right now. Like, is that on the is that the next step, or is it to continue to saturate within the Keihi or how are you looking at the next steps for your company? And that could be either the retail side, like I'm focusing on now, or maybe there's a DTC play or maybe there's food service, like, What is in the future for everything?

Hovik Azadkhanian - 00:59:23
So, yeah, so, I should just add that. Right? You know, we do a lot of food service as well. We're, we we we sell coffee too. Like, forward thinking mission aligned, companies and campuses. Nice. We invented the world's first 100% backyard compostable food service packaging because plastic coffee is like a huge product on it. Wow. It it's not in our retail bag just yet, but it is in the food service bag. It's made completely a paper.

Hovik Azadkhanian - 00:59:42
It's another opportunity, to talk about for that more time, but another one of those you can't do at stories. And so we I was like, no. Let's just do it. And we ended up selling to, one of the largest tech companies the country, both on the quality of the product, but also the fact that there was zero plastic. So the bag of the pallet, the pallet wrap is compostable backyard compostable, not commercially compostable, backyard compostable. And so we deliver the full palette to the to the, distributions that are without using a single piece of plastic.

Hovik Azadkhanian - 01:00:11
The only thing that's not compostable, I think the pallet itself is, like, heat treated, like, they use heat treated wood. And then the nails in the pallet, you can't commerce, obviously. But, yeah, that was a big deal for us. What's next? We are working on, some super top secret stuff right now. And

Kyle Krull - 01:00:37
Okay. So we won't talk about it. It's okay.

Anthony Corsaro - 01:00:38
We have If I have dollar for every time, we've heard that on the bottom.

Hovik Azadkhanian - 01:00:43
Katie has been Katie has been an incredible partner for us. I'll say this. Like, they yeah. I've heard both, like, great stories and not so great stories, but Katie has been fantastic partner They've helped us every step of the way. They've been a great resource, for us, and they've really put us in a position I mean, we the quality of the product is so important, but it helped us along the way to to really reach where we need to be. We're working with a a national broker right now. Called green spoon. Maybe you heard of them that they've been a big market useful, a great resource. And so, yeah, so the Katie's, we're gonna work on saturating KHE UNFI is, part of the conversation.

Hovik Azadkhanian - 01:01:15
And then we're working really hard to get into, like, other larger natural retailers right now. We have the capacity. This is the thing. I'm like a lot of smaller brands that start out and have claw their way to building capacity or going to a co packer or coffee roasters. We have the capacity to supply coffee to the entire nation. So we we wanna the opposite direction is really important for us to have that foundation before we launch because I don't wanna get involved in growing pains over stuff that we could've we could've done beforehand.

Hovik Azadkhanian - 01:01:45
It's kind of a, major, importance for me. But, yeah, so I think saturating the natural space would be really important to me before we move into conventional and, our plan is to move as quickly as possible. It all comes down to the quality of the product. It's just it's doing very well. It's it's delicious product. Yeah.

Kyle Krull - 01:02:19
Thank you.

Anthony Corsaro - 01:02:20
Love it. We look forward to podcast number 2 where we can cover the top secret things, not in secrecy anymore.

Hovik Azadkhanian - 01:02:27
Yeah. Give me give me till, like, September.

Anthony Corsaro - 01:02:29
Cool. Cool. Well, let let's go macro to kinda take it home of it. We're talking about saving You know, we're talking about a lot of fun stuff, but just, you know, the final question that we ask everyone, which would love your take on is just how do we get regen brands to a 50% market share by 2050? What are we gonna do?

Hovik Azadkhanian - 01:02:46
Yeah. It it's it's not an easy question, but I think that the most important thing is we have to educate the consumer more than anything else because the consumer is what drives growth in every category. There's nothing else that drives growth no matter what any consultant or any grocery guru or anyone who's doing doing this for a 100 years. If the consumer is not interested, not gonna sell. And so educating the consumer is the number one priority for us in the coffee space. And so, if we wanna make regenerative a bigger market share. We want it to be a significant market share.

Hovik Azadkhanian - 01:03:16
We have to educate the consumer as to why we generated so important. In coffee specifically, why rock is so important. And, why why their dollars can support good instead of supporting, you know, mass agro or something like that. The other thing is, you know, I think that people generally don't want to be causing a problem on this planet. I think people don't generally want to be evil. I just think that people really enjoy convenience. So if you can provide a product that is excellent tasting, and I mean, excellent. Like, no, it's not just good.

Hovik Azadkhanian - 01:03:49
It has to be outstanding. And it is a 100% regenerative or in our case, regenerative organic certified, and the price point is not way above where it needs to be. As long as the switch for the consumer is easy and they can describe your product over another, I think that's a way to drive, to drive trial in in regenerative products. And that's what it is. I mean, people, as long as it's convenient, easy, and, and relatively affordable, think people will make the switch. We have to we have to drive the consumer. You wanna make a difference in this industry. You know, Roll your sleeves up, go do your demos at your stores.

Hovik Azadkhanian - 01:04:30
Spend every weekend at every local store telling you story even about the coffee, but about regenerative agriculture. And everyone that I told from the most conservative to the most liberal people, they all cared They want food, you know, they want to be able to support a population. I think that was something that I've learned along the way on this journey that's been so important and so, resonating. The other thing is, I mean, if we really can't figure this out, just kind of go ask a farmer because one thing I've learned is the only the only group of people I know other than myself that really perform when you tell them they can't do something. Is is farmers. So, I mean, let's let's talk to them. I think their input is critical.

Hovik Azadkhanian - 01:05:19
Yeah, educate the consumer, talk to the farmer, connect the 2, and I think that there's an opportunity to save the future of all agriculture, not just

Kyle Krull - 01:05:36
Love that answer, man. We were just talking, on a Regen Coalition call about the importance the brands play in connecting consumers to farmers. That is what the brand does better than anything else. We we also very much agree that consumer education is gonna be the key unlock. So It's it's always great to hear somebody else say what you believe. As as arrogant as that might be, but we have we have the same theory of change, man. And I think that's that's what we gotta I'd also love the way you talked about the convenience factor. Make it easy for people to switch and and have a product that tastes excellent so that once they've tried it, they can't go back to the way they

Hovik Azadkhanian - 01:06:09
It's exactly right. Before. You know?

Kyle Krull - 01:06:11
So I think It's

Hovik Azadkhanian - 01:06:12
not it's not a yeah. You're absolutely it's not a it's not a nice to have. It's I have to have because this is the product I want. It's so good. And, oh, yeah, by the way, it's also it says regenerative. I forgot what it means, but it's important. And so we need to buy regenerative. Like, if we can get consumers in that attitude, then we can preach all you You can sit with the complaint. You can say, you know, the Monsanto's of the world are coming to take her, you know, you're gonna destroy the world.

Hovik Azadkhanian - 01:06:31
You're only gonna get so far sitting and complaining unless you get out there and do something and create a brand that's that's it's all about your mission and that's an incredibly good quality product. I mean, I think we can do it. We were approached by a coffee company, a coffee distributor, like a raw coffee distributor, and they they came, you know, knocked on our door and the factory we didn't see them. We didn't really know who they were because they're operating with her, like, 3rd, 4th level man. Like, we have a regenerative coffee and it's gonna be incredible. Like, oh, cool. What's regenerative?

Hovik Azadkhanian - 01:07:04
And I, like, kind of I wanted to hear them tell the story like, oh, well, you pay a little extra and we give you the right to use this label. I go, okay. Cool. But, like, what does that mean? They oh, you can put it on the front of your bag. You can put it on the back of your bag. Okay. Cool. That that that's awesome. But, like, what what is regenerative? Oh, yeah. It's it's super sustainable. Okay. Okay.

Hovik Azadkhanian - 01:07:16
But, like, what does that mean? It means that you can put the label on anywhere you want, and we can list you on our commitments. Oh my god. This guy's serious, and then I found out This is one of the larger, like, ad companies on the planet, basically creating like, a green wash system of selling regenerative. That's the sign in regenerative. And it wasn't organic, and and and I just felt like, I felt like if this is who we're up against, this might not be that hard.

Hovik Azadkhanian - 01:07:47
You can answer a

Kyle Krull - 01:07:55
simple

Hovik Azadkhanian - 01:07:58
question. I mean, Maybe we have an opportunity to really change the food system. And to answer your question, by 2050, I mean, this is who we're up against. It's just to educate the consumer and they will be more than happy to spend their dollars to, do the right thing. It's an opinion. I don't know. We'll see. Maybe I'm wrong.

Anthony Corsaro - 01:08:17
What was coming to mind for me during during what you just laid out there was, like, we have to give people agency without blame shame. Like whether it is the consumers or the farmers and it feels like we're trying to give them a lot of agency through blame and shame, which is like not effective. And so we have to make it feel good and taste good to do good.

Hovik Azadkhanian - 01:08:38
And No one wants to be talked down to. No one wants to be felt like they're part of a problem. They wanna be part of a solution. And if you can convince them that it's not that hard to be part of the solution, just make a just I I know you enjoy comfort. I know you enjoy ease and and everything super easy here in the side of the world, but, like, slightly out of your comfort zone for just a second. Try something different. That is the the the beginning of change right there. I mean, that's it's really the only way to do it. And, you know, if you don't like it, just call us and we'll refund your back.

Kyle Krull - 01:09:12
Mhmm. Right. You know, for for the listeners who wanna learn more, Heirloom Coffee Roasters dot com. You can check out all the beautiful packaging and the SKUs. If you don't have a Sprouts nearby, maybe check out your local retailer that pulls from Kaye, although most consumers might not know what that is. And, yeah, my my key takeaways from from this podcast, coffee is life, and also to co opt another, phrase, just do it. You know? Yeah. Yeah. There we go.

Kyle Krull - 01:09:27
But but hope we can think

Hovik Azadkhanian - 01:09:36
of it. Don't don't listen to anyone. Don't listen to anyone who can who tells you you won't be able to do something. Yeah. But people love to tell you that.

Kyle Krull - 01:09:45
Yeah.

Anthony Corsaro - 01:09:46
Thank you for joining us, brother. Inspireding stuff. Appreciate you making the time.

Hovik Azadkhanian - 01:09:49
I really appreciate you guys and everything you guys do to spread the word of generative agriculture, and now regenerative coffee. And so you guys are a major part of, of this movement. And I think together, we can all revolutionize the way that, products are sold on the grocery shelf and really spell the word regenerative, which is critical.

Kyle Krull - 01:10:11
That's cool, brother.

Anthony Corsaro - 01:10:12
Absolutely. Thank you, bro.

Hovik Azadkhanian - 01:10:14
Alright. Take care.

3 - 01:10:19
For show notes, episode transcripts, and more information on our guests and what we discuss in the show, check out our website regen-brands.com. That is regen-brands.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 shows and share the show with your friends. Thanks for tuning into The ReGen Brands Podcast, brought to you by the Regen Coalition in 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.

3 - 01:11:01
Love you guys.