How To Handle Regulation Hurdles

Dan:
Hey everyone. Did you guys know was the 10 anniversary of GNU style from SI came out? Will I know you were big into that dance move 10 years ago. Can you still do it?

Will:
I can definitely still do it. Honestly, I haven’t thought about until now, so, but I’d say yeah, of course.

Dan:
Yeah. I mean, we’re not gonna like start blasting the music in the background and get into that dance. But I do remember when it came out and what an interesting time, but that’s a different side. This is Safety Stock with I’m Dan, alongside Will, and excited to excited to be here. Especially you coming from the west coast now.

Will:
Yeah, it’s beautiful out here. There’s a lot of Marine layer coming in the June Gloom.

Dan:
See, I mean, you’re wearing like a Marine layer. T-Shirt right now. It seems like. So you’re fully, fully Cali mode.

Will:
Yeah. I’m just missing a breakfast burrito then I’d be good.

Dan:
Yeah. Well, I’m excited to talk about this topic today, cuz one of the things in the, in your new state right now is, is regulations and perhaps 65 is one of those regulations that brands and retailers have to adhere to, but it’s what can you do in your, as a business, as a retailer, when regulations come up, how do you deal with them? Adapt to them. And when is it critical in your business to start thinking about those? As you scale?

Will:
Yeah, it’s interesting because you know, we we’ve read a couple of articles recently. You know, one particularly about Panasonic investing, almost 3 billion into a new EV battery in Kansas. And as they are trying to bring their production to Tesla more local, you know, there’s obviously certain rules and regulations. They have to go around to like getting this plan open going, but as you’re a brand and depending on how well you’re doing, there’s a lot of instances where as you grow, you’re going to be facing new challenges. And I think, you know, one of those big challenges that we see a lot of the brands we work with today is they’re going into retailers that they haven’t necessarily been in for the first time. They may have been direct to consumer, but now they’re going into a Walmart, an Olta target trader Joe’s, you know, you name it, but there are hurdles that take place. Dan, what are some of those hurdles that the brands are looking at, that they have to do that they may have not had to do for DTC?

Dan:
Yeah, it’s, it’s a great point. And like what we’re seeing, I mean, you mentioned the EV space and relatable in the sense that, you know, everybody wants to go EV better for the environment by a certain timeframe, but we don’t even have every city or area doesn’t have like charging ports. So your, the end goal is here, but are we getting there with all the middle steps? We mentioned prop 65, which is really big in California, just for like toxic enforcement act that your products have to get tested through. That’s a, not only a D to C requirement, but also for in stores. Only for Cal only if you’re selling in California. But what you’re seeing now is a lot of retail or pushing towards this goal of like plastic free or recycled plastic by certain time periods, if it’s 20, 25 or even later, but how’s that impact your product today and what compatibility of the product you needed to do, cuz that’s the big unknown.

Dan:
Like it’s a, it’s a initiative that’s out there, but we all know how it’s gonna interact with your end product today. So should you start testing that? Or should you just keep building your market share as you continue to go, retailers have their own policies as well, where you have set delivery times and if you don’t hit them, you could get fines. If you’re missing a window, which may not be always your fault because a truck could get stuck on the interstate behind an accident or weather delays. So there’s always these regulations that you have to adjust and adapt with that come out of the blue. Those things are always changing every day.

Will:
Yeah. As an operations employee, when you, you’re learning about going into another you know, big retailer, even just a different environment. There’s a lot of times where the marketing teams will ask you, if you can make certain changes possibly do your product or your delivery style that you haven’t done before. And you know, a good example for that is, you know, certain retailers wanna have certain case backs in order for them to be able to pack out things more efficiently in their warehouses. So they may ask you, Hey, I need to have, you know, things bundled by three or things bundled by six. And you’re used to always individually bundling something and just sending one to a consumer. And so now this causes the need for additional skews, additional packaging, you know, do you test these things to see if it passes in a distribution environment that’s new to you?

Will:
Is it something you say yes to, you know, what happens if you need to lower, you know, your package by a certain height because it fits better on their shelf space. Do you take that opportunity? Does it change your, you know, how you have your brand ethos already defined to the customers that you’re selling to? You know, these are some of the questions that come up when you’re going into a Walmart, when you’re going into a, you know, target or a new store or distribution cycle. And so I think it’s important, you know, for those, you know, those operations folks to really call out if it’s going to be a huge issue, you know, is it going to affect how you deliver? That’s a problem, raise the flag. If it’s going to prevent you from scaling or, you know, if you’re gonna sink a lot of capital into something that may not have payback, you know, raise the fight there, but it’s a good opportunity. And so if it’s not going to cause too much pain, you know, a lot of times your marketing folks will support you and be really happy to get into additional doors.

Dan:
And on top of that, just international, if you’re spending there as well, just based off experience like health Canada, if you’re in say like the supplement wellness space, you have to get approvals. And if you’re subscription the dosage that you want could be different on the D to C side, but also you have to take into account the labels. Every country has certain label requirements like China has its own thing for just selling in China as well. Which I’ve seen through experience, but you have to maybe do applications apply trademarks. But language on there too. So for instance, in Canada, Quebec language is French. So you need to have a French label on there. Now, I don’t know the full rules and it’s been a few years on the difference between D to C and also retail. If it applies, if it’s retail across all the provinces in Canada, but also selling, if you sell into like Quebec, you need to distinct have a French and English label on it, which takes a more real estate, but also more of a verification approval process with either your in-house lawyers or outside lawyers, but also the quality and regulation side too.

Dan:
So there’s a lot of parameters that always change for each country’s EU has their own set of compliance as well. So really staying up to date on the expansion level, not only domestically, but internationally is very important.

Will:
Yeah, I think, you know, then when you, you know, when you talk about this, it’s important for granted as you’re growing, you know, to be able to reach out to people who have done it before, or to get references for people to done it, who have done it before and say, Hey, you know, this is when you need a regulatory person in house or at least having somebody on retainer. You know, it’s not something that you can patch work your way through. If you have a lot of skews, it’s important to come in because to your point, you know, you’re just, if you’re expanding, you don’t wanna have, you know, three and four skew X, just because of, you know, different language groups. You want to incorporate that where you can on into the label. And so, you know, these are all regulatory decisions or, you know, expansion decisions that come into play when you’re looking to go to different places.

Will:
And it’s not something that you take lightly. Additionally I think Dan, you know, the other part that people sometimes overlook as a brand and what I’ve seen before of like what they overlook is, you know, the expectations and the feedback that you get from a different cycle. And so what things may have been fine in the past may no longer be okay, are the things that were problems in the past, aren’t a big deal. And so I think you have to go in really with an open mindset and know there’s certain fundamentals to what you’re selling that work. And then you have to be open to what the feedback is later.

Dan:
Yep. No, exactly great points there. And wherever you guys are heading, if it’s domestically or internationally, our regulation rules don’t change. We’re on, we’re still gonna be on Spotify and an apple podcast. So feel free to give us a download or if you have any questions about navigating the waters for expansion or retail please let us know at hello@anvyl.com.