How The Vegan Kind Became the UK’s #1 Subscription Box for Vegans with Scott McCullough

Transcription

Welcome to the Healthpreneur podcast. This is episode 77. Today we are talking with Scott McCulloch from Glasgow, Scotland. He is the co-founder and director of Vegan Kind, the U.K.’s largest vegan subscription box.

Scott is going to describe how he and his wife got the idea, devised the proof of concept, and how they’ve grown rapidly over the past two years. Interesting stuff. What they’re doing with vegan foods and products is similar to the box-of-the-month type of thing, where there are surprises in a box every month.

They’re doing extremely well. You’ll get a lot out of this conversation, even if you don’t have this kind of business.

So, that’s who we’ve got on the show today. If you want to learn more about what the Vegan Kind is up to, you can go check out their website at thevegankind.com. At this current time, they only deliver within the U.K. If you’re in North America, you can’t benefit from their service, but they’re still a cool business to look at in terms of how they’re doing what they’re doing.

Scott’s going to share with us how they’ve grown using things like Facebook and Instagram. They encourage sharing in a very organic way and it’s catching on. He’ll also share how he has connected with other influencers in the space. That will be extremely valuable to you as well.

Without further ado, let’s bring Scott onto the show and have some fun.

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Mr. Scott McCulloch, welcome to the Healthpreneur podcast. How’s it going?

Scott:                    Thank you, Yuri. I’m very well. Thank you very much for having me on.

Yuri:                      You’re welcome. It’s great to connect. You’ve got a cool business. You run the U.K.’s largest vegan subscription box. I don’t know a lot of people that run a box-of-the-month company. Can you tell our listeners how you got into that?

Scott’s background and the beginnings of Vegan Kind

Scott:                    We’ve been in business for about four years now, so we’re out of the early startup stages and realizing our full growth potential.

Before it all came about, I was a meat-eater. My wife Karris, the company’s co-founder and co-director, has been vegetarian pretty much her whole life. As a couple, we happily coexisted with me being a meat eater.

I used to buy my monthly meat intake from an online farm shop. I would have it sent to the house, separate each individual chicken breast or whatever into sandwich bags, and freeze them for later consumption. I was a gym-going protein-conscious person.

Karris was vegetarian and always had been. She was going down the path where her beliefs around becoming vegetarian, such as the mistreatment of animals and the like, were leading her to investigate veganism.

Because we lived together, I think we were married or engaged, when she made that transition I found myself also eating more vegetarian and vegan food. At the end of the day, a delicious meal is still a delicious meal regardless of what’s in it.

I consumed more and more vegetarian and vegan food, and realized that I could still eat cheeseburgers, ice cream, and drink milk with my cereal. I felt I was consuming the same type of diet and types of foods, but I was doing it on a plant-based diet. I didn’t feel like I was missing out on anything.

Karris made the transition to full veganism, and she was a beauty blogger at that time. She was receiving subscription boxes and free products to review on her YouTube channel.

She thought the transition to veganism perhaps didn’t need to be as difficult. Maybe you don’t need to spend so much time looking at all the products down the aisles and there’s a way we could make it easier. She was already exposed to the beauty subscription box market.

I said, “What about if we did a vegan subscription box?”

That very night, we jumped online. We couldn’t find anything at all in the U.K. and thought that was a good starting point. No one else was doing it here. Then, I came across a company in America that was doing it. That was an instant catalyst to plow forward with the idea and get it off the ground immediately.

Vegan Kind was quickly created and started blooming.

Yuri:                     That’s awesome. How do you start that type of business? You’re sourcing a lot of different products. What did those first couple of weeks look like?

Scott:                    One of the fundamentals of getting any business off the ground is a little bit boring. I used to be in business banking. I was a business banking manager for about ten years. So, I already had very good grasp on how to set up a limited company and what it takes to do that. I knew how to register shares and all that boring stuff to get the fundamentals laid out.

At that point in time, I was working in sales for a company called Worldpay. They’re more prominent in the U.K. and have just been bought over by Vantiv Bank in America. They are one of the world’s leading payment processors.

I already understood a bit of the business banking side of it, and was very much living in a payments world. I understood card processing payments. The entire business at that point was 100% card processing transactions on recurring billing. This went along with Karris’ understanding of how bloggers react to receiving free goods that we could then showcase on their channel.

My background and understanding of how to get the fundamentals set up and my experience in working for a very high pressured sales environment made me very conscious of how important sales are for every and any business no matter what you do.

You need to focus on your sales.

Brand awareness, marketing, and positioning

We organically, through our backgrounds, got the business off the ground extremely quickly. We identified that, as much as it was a business for us, what we could present to brands was also a marketing opportunity for them.

I started reaching out to brands that we liked or felt weren’t as well known. We pitched them to see how are they were currently getting their brand awareness. We asked which avenues they’ve explored regarding their marketing budget. We asked what return they were getting for it. We asked if they had considered giving us some of their product for marketing purposes. We would do X, Y and Z with it, which has a follow-through effect.

We positioned ourselves from a marketing angle as well as a sales angle. That’s what worked.

Yuri:                      That’s awesome. Some listeners might be doing a lot of manual or cold outreach.

What tips could you give in regards to effectively reaching out to companies or individuals you may not know personally so they positively respond to your offer?

Scott:                    That’s something I’m living and breathing right now. The business is currently seeking investment. We’ve got a pitched business plan, a financial operating model for the next five years, and the potential of launching a crowdfunding campaign.

Before we reach out to the crowdfunding network, we’re behind closed doors reaching out to high net worth individuals and people within the plant-based sector who could contribute to a cornerstone investment. Then we’ll take on a crowdfunding platform.

A lot of people know it’s a bit of a failure, or can be, to go into a crowdfunding scenario having not already secured a portion of the funding.

At the moment, I am very much living what you’ve just asked me to discuss. I’m identifying people that I would love to invest in and convey our vision to, and make sure they see our financials. In terms of tips, I would say to investigate all avenues to get a warm introduction. Make sure that you have double-checked your common connections on LinkedIn.

Check if they have a profile on Facebook as a business individual, or a private family one. Quite a lot of people will do that. Then, if they do have an individualized Facebook page, it might not have a huge number of followers. Bear in mind that, sometimes with Facebook, you can contact people and they might never see it.

Similarly, with LinkedIn, you might find that you go to connect with an individual, and you’ll get a pop-up saying, “How do you know me? If you don’t know me, then I’m not willing to connect with you.”

Another angle is Instagram. I’ve had great success this past week contacting somebody who’s very high-profile but isn’t living that Instagram lifestyle. They’ve got one, but they’re not posting memes every day and don’t have a lot of followers.

They have a modest following, which I was delighted to see, so I confidently knew that when I reached out that they would see my notification on their phone. They did, and responded to me within five minutes. I nearly fell off my seat.

Yuri:                      That’s awesome.

Scott:                    So first and foremost, if you can find a warm introduction, that’s absolutely the road to go down. But think outside the box in terms of how you can contact them.

I’ve identified who I want to speak to and am confident that they will buy our pitch. Once they see it and live my story with me, why wouldn’t they want to invest?

I’ve struggled with my voice being heard. Even I get a routine 50 messages day. God knows how many these people get. Make sure you’ve investigated all avenues and choose the one that you believe is most likely to be seen.

The evolution of The Vegan Kind; the business models, marketing, and facets

Yuri:                      That’s great advice. For listeners who may not be familiar with the Vegan Kind, what does the business and pricing model look like on a month-to-month basis for the consumer?

Scott:                    We currently have a multi-revenue business now. When we set up with just a subscription box, people subscribed throughout the month.

If you subscribed on the 18th of October, you’d be subscribing for our November box. You wouldn’t know what was going to be in our November box, but you’d know that everything in it was suitable for vegans and it wouldn’t contain any animal products.

You would know that there would be between five and eight products in it. You’d know that the retail value of the box would have a higher RRP than if you’d bought the products individually.

In the U.K., customers are paying ten pounds a month for the box, plus three pounds 50 in postage and packaging.

On the first of every month, we would debit their money and ship their box within three working days. A few days later, a box will land across the U.K. for several thousand customers. They will then receive them broadly at the same time, jump on Instagram, review the products, and tag the brands.

Generally, you get quite excited about the box. When new subscribers are subscribing at the end of month, they are usually subscribing for the next month’s box. But we always overstock the prior month’s box.

A customer will subscribe on the 19th of October and get an email saying, “Your first box will be November.” Then, they’ll get a follow-up email saying, “Wait a minute. We just double-checked. We’ve got some spare October boxes. Would you like to get started? Click yes, please.” We’ll upsell, and they’ll get the October box.

We don’t always manage to do that if we sell out the prior month’s box. But the aim is to always make sure we’ve got enough overstock to give the customer what they want and give them a surprise when they think they must wait or have missed out.

That’s one angle with the monthly lifestyle box.

We also have a quarterly beauty box. It works with the same concept, but just four times a year.

In December of 2016, we made the strategic decision to grow the business and do more with money spent on Facebook ads, PPC, or other avenues. The amount we were spending stacked up successfully for the subscription boxes we were selling. It was fine in that respect.

We thought that for that same advertising budget, we could be selling a hell of a lot more throughout the whole month.

We were not using the innocuous shop tab on our website. That tab was purely to get rid of a bit of overstock. It had a few items, some branded mugs, tote bags, and odd things we had done for festivals. We made the strategic decision to change that shop tab to its own supermarket. We changed the word “shop” to “supermarket,” and grew an inventory there.

Now, we’re known for two separate things. Our subscription box company has loads of loyal customers and is brilliant for people that are going vegan but going through that initial struggle where they’re unsure about what they’re meant to buy and eat.

Once people realize that it’s a very easy lifestyle, we’ve got a full-fledged supermarket with a massive chilled section and next-day delivery that ships across the U.K. We currently have an inventory of two and a half thousand items, and we forecast that will be seven or 8,000 by the end of 2018.

We have those two distinct strands to the business now. Before, we only had the recurring revenue from the subscription boxes. Now we have considerable cash flow from the supermarket. It’s working well.

Yuri:                      Do you find that there’s a good spillover from the people who buy the one-off stuff in the supermarket to the subscription boxes?

Scott:                    Yes, it’s worked quite harmoniously. When we first started the supermarket, we had a bit of a challenge making sure we were getting our marketing message right.

We couldn’t quite decide on what the correct message was to convey, “We’ve got this, and we’ve got this.” It’s quite difficult to get that across succinctly in one message. Now, where we advertise as a subscription box, we don’t even mention that we do a supermarket.

A lot of people probably come to the website, see we’re a subscription box, and don’t click anywhere else. They love it, buy it, that’s it, and they check out. That’s fine.

Similarly, a lot of people will see the U.K.’s biggest online vegan supermarket, and they’ll click. They’ll go straight through to thevegankind.com/supermarket, which is a Shopify store. At that point, they won’t know we have a subscription box, and that’s the way we like it. Then we have our three distinct sets of customers.

Once they know about us, are a customer, and go on our mailing list, we get the opportunity to tell them about the other side. For example, every single supermarket order comes with a flyer that says, “Did you know that we do subscription boxes? It contains new-to-market, hard-to-find, exciting products. It’s like a birthday every month. If you like that idea, here’s five pounds off your subscription box.”

Rapid growth, tackling problems, outsourcing, and leveraging social media

Yuri:                      That’s so smart. You’re getting a little bit of everything and both of those play nicely into each other.

What type of team do you need to run this whole operation? How many people do you have working? Do you have a facility? Or is everyone virtual and remote?

Scott:                   When the business started, and it was Karris and I in our flat with a newborn baby, a Chihuahua named Tyson, and a cat named Honey. We posted pictures the other day on Instagram.

The business reached a pivotal point and we had to move because we were taking deliveries of our flat pack cardboard to make up our boxes. We got them in smaller bundles for the initial two boxes, and we received them at our flat in a normal DHL-style order.

One day, I was in Oban, which is a three-hour drive from Glasgow. Karris was in a meeting at her work. A delivery driver called me and said, “I’m at the Gala gate,” which is the street we lived on at the time.

He said, “I’m at the Gala gate in an 8.5 attic truck with a palette for you. Have you got a palette truck?” Not only did I not have a palette truck, they needed to go up two flights of stairs. And I was in Oban.

We quickly realized that we outgrew our living room, which was stocked floor to ceiling, across all the hall, and into the baby’s bedroom. We moved into a 1,000 square-foot unit. Karris, maybe six months or so after that, was the first to leave her job.

It was a strategic exit. We made sure that we were financially stable when we peeled away from work. For four years, we burned the candle at both ends and in the middle. We made sure that we could keep up our lifestyle.

The family home grew, and in December of last year, when we decided that we wanted to implement a supermarket, we realized that it could only happen if I burned the ships as well and left my job.

At that point, we moved from the 1,000 square-foot unit to a 3,000 square-foot unit to take on the subscription boxes and grow the supermarket. Within three months of being in the 3,000 square-foot unit, we completely outgrew it.

There’s photos of it. It was literally filled wall-to-wall, left to right, front to back with Royal Mail yorks, these cages to collect the boxes. Because they’re square, you could tell there was literally no space in that unit.

I was fully away from employment at that point, so we made the strategic decision to either move out of that 3,000 square-foot unit that we’d literally just moved into or outsource the subscription box. To circle back to your question, at that point in time we had three full-timers; Karris, Jenna, and I.

And at that point we had one of the biggest problems with the business. Every month, when it came to pack, we needed five to ten people to pack during packing week. It wasn’t full-time work. We were at the mercy of students and people that needed a bit of ad hoc work. It was difficult to manage getting the right people in at the right time and putting people on payroll. It was a logistical headache.

We made the decision to move the subscription box to a fulfillment company. Now we don’t touch the subscription boxes. The suppliers send the stock to another warehouse. They get packaged and sent from there.

We receive the overstock, sell it on our website, and use it for end-of-the-month upsells. This leaves us in the 3,000 square-foot unit, but we now we’ve got five full-time staff and two part-timers.

However, even though we’ve outsourced the subscription box to another company, the 3,000 square-foot unit is getting extremely tight. Yesterday we viewed a 5,000 square-foot unit because in a few months’ time, we won’t last there.

Leveraging social media for marketing and connecting with clients

Yuri:                      It’s great to see how different companies grow. I love entrepreneurship, because you get to see growth that happens quickly. Going from one space to another is something I find very common with people who ship stuff. Initially they do all the shipping themselves, then get to the point where it doesn’t make sense. Then you find someone else to take care of it.

It’s cool that you went through that process as well. Listeners, even if they’re not in the subscription or box-of-the-month type of business, might have similar issues in terms of fulfilling orders.

Scott, you mentioned Instagram. When people get their boxes, you encourage them to share stuff on Instagram. Is that a conscious branding/marketing decision to get the word out for The Vegan Kind?

Scott:                    It’s strategic and conscious, but has more to do with making sure the brands are getting the exposure that we want them to get from working with us.

We make sure that there are several high-profile, large follower-base customers that get our boxes. We can’t guarantee they’ll post about it, but most of them know about us. They’ve followed our journey over the years and show support for us by doing an “unboxing” video, Instagram story, or feature us on their feed.

In general, social is huge for us. We have a large social following across all platforms. I think it’s a few 100,000 in total. It’s one of the largest social followings within U.K. veganism, or certainly within U.K. vegan businesses. I don’t know of any that have more than us, to be honest.

It’s a personality thing as well. Karris, my wife, is the soul of the business. Everything the Vegan Kind embodies is her, really. It was her path from vegetarianism to veganism that carried on to become a business. I was somebody who realized a change in my mentality overnight.

I didn’t want to take part in an industry that I felt was completely unnecessary. I was still getting my full protein intake and could still eat whatever I want. I was eating the same things. I was just eating things that didn’t contain dead animals or didn’t contain product that came from an animal. It just made perfect sense to me.

Social is where we get to convey a bit of our personality; as a couple and as a family as well.

For instance, when a customer signs up for an order, we send a separate thank you email. We thank them for showing support and love, and we’ll put our Instagram handles there so they know that we’re real people. They can follow us and see that, on the weekends, we take our kids out and do things as a family. We go to restaurants and live a normal life. Social is an extremely important platform for us.

Yuri:                      That’s awesome. And when someone receives a box of cool stuff, they’re more likely to share it on Instagram, because it makes them look cool as well. That’s a nice, synergistic bubble that you’ve created.

Skills necessary for lasting success; a drive to succeed and an early morning start

Out of everything you’ve gone through in your journey so far, what do you think is one of the most important skills entrepreneurs must have for lasting success?

Scott:                    Specifically for myself, a burning desire to grow and succeed.

We’re in an industry that is experiencing a stepped change across the world. More and more people are going vegan. There has been a deep increase in recent years with Bill Gates investing in plant-based companies, Lewis Hamilton in the U.K. going vegan, and celebrities and athletes going vegan.

It can be easy to set up a business that’s a vegan and feel that that the vegan movement will carry the business along with it. That’s not true. If you take that passion for changing the way people view animals or change the diets of the world, that passion will get you a long way.

But if you channel your passion for change into sales and marketing as well, investigate what your options are, and have an absolute desire to succeed, that’s what will get you far.

I run out of time during the day regularly. I’ll feel like there’s so much I didn’t do. I know exactly where that time is. It’s between five and seven o’clock in the morning.

Get up at 4:45, have your clothes laid out, and preset your mind to the fact that you’re getting up at five. Make a list of all the things that are bothering you that you haven’t done that you know you must do.

You won’t just wake up because of the alarm. You’ll waking up because you know you’re going to crack on with these things.

Wake up with your clothes ready, put some headphones on, listen to ten minutes of a podcast while walking the dog, and put the kettle on before you go out. Then, come back home and be sitting at your desk with laptop open and coffee in hand at a quarter past five. You’ll find yourself in a time zone you didn’t know existed.

Nobody bothers you. No emails are coming in. There’s no desire to check your Instagram feed or Facebook to see what mundane stuff has happened in the last 15 minutes. You just crack on with the work at hand and get a phenomenal amount done.

That mantra I heard from somebody years ago. It was key during a strategic growth spurt within the business. I lived that life for about two or three months. We got into the zone with it.

I was compelled to get up at that time every day. All I did was recalibrate my working hours. It doesn’t mean sleeping less or burning the candle at both ends. I was getting up at five and be asleep by ten, have a cracking sleep, and get a full seven hours. That would be my working week.

Come Friday night, I’d stay up a good bit later, maybe have a beer because I’d earned it, and maybe get up at eight on Saturday. It didn’t feel like a long lie, but I’d be ready to crack back on with it on a Monday.

A desire to succeed and an understanding that your passion will only get you so far is key. To succeed, take your passion and channel it to understand sales and marketing as well.

Yuri:                      Awesome. I love it. I completely agree, the magic time in the morning is the best time. If you’re listening to this and you’re not waking up earlier than you currently are, make a point of it, because it is a game changer.

The Rapid Five

Scott, are you ready for the rapid five?

Scott:                    Yes.

Yuri:                      All right, here we go. Five rapid-fire questions. You have no idea what they are.

Number one, what is your biggest weakness?

Scott:                    I’m less keen to delegate tasks to others. I hold onto tasks too much.

Yuri:                      Cool.

Number two, what is your biggest strength?

Scott:                   Optimism and determination.

Yuri:                     Number three, what’s one skill you’ve become dangerously good at in order to grow your business?

Scott:                   Facebook marketing.

Yuri:                     Ads or the whole platform in general?

Scott:                   Our ads. Anytime I’ve had Facebook involved, take a screen share, results, or whatever, they’ve been blown away at what our cost per conversion is. They say they rarely see conversions as low as ours.

Yuri:                      That’s awesome.

Number four, what has having kids taught you about business and marketing?

Scott:                   I don’t know in relation to business and marketing, but having kids has certainly taught me to relax a bit. When I was in high-pressure sales, I would come home and still be thinking, frantic, and not as present as I am now.

Now that I’m in full control and have autonomy of my own life, I understand the importance of when I’m with them. I realized that I should be with them and that it’s precious time.

Yuri:                     That’s great. Finally, complete this sentence: I know I’m being successful when …

Scott:                   When we complete this round of investment that we’re going through. Once I know we’ve secured the full value of what we’re looking for, I’ll feel like we’ve done it.

Yuri:                     That’s awesome. I have no doubt that’ll happen because what you guys are doing is awesome. For listeners who don’t know about The Vegan Kind, can you share the website and the best place for people to follow you online and on social?

Scott:                   Of course. It’s thevegankind.com. You’ll see our main website and the supermarket tab at the top. Follow us on social, which is The Vegan Kind on Facebook and Instagram. I’m Scott_thevegankind and my wife is Karris_thevegankind on Instagram.

Yuri:                     Awesome. Scott, this has been a lot of fun, man. Thank you so much for taking the time out of your day to join us and share your journey and the awesome stuff you’re doing with your business. It’s unique.

It had added a lot for the people in the U.K. Thank you for taking the time and doing all the awesome stuff you guys are doing.

Scott:                   Thank you, I appreciate you speaking with me.

Yuri:                     For sure.

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Yuri’s take

Cool stuff, right? A box of the month business hooking you up with awesome vegan stuff every single month, and complimenting that with a full-on supermarket through their website. What I loved about this business model is how they’re fusing both together.

I believe that, in any business, you don’t have a business unless you have stable, predictable, recurring revenue. This is something that we’ve built into our own health and fitness business in a big way. We realized that if you don’t have recurring revenue, you become a promotion machine; constantly promoting one-off products every week or month.

It becomes very unpredictable and erratic. You get to a point where you don’t enjoy your business.

I liked that The Vegan Kind has a recurring subscription model, but also one-off purchases for their supermarket. They both lend nicely to each other; they support one another.

I’m going to leave you with a little challenge. Whether you do it is up to you. Here it is. Ask yourself: Do I have recurring revenue in my business?

If you’re training clients, seeing patients on a plan, or if they’re coming in several times a month, is there a fixed cost every month? That would be an example of recurring revenue.

In my Luminaries Mastermind, our clients pay every single month over 12 months. That is recurring revenue. In our Super Nutrition Academy, my health business, people pay $47 a month, month after month. That is recurring revenue.

So, in your business, do you have some type of recurring revenue? If you don’t, I challenge you to consider how to create something that is going to give people what they want in a more seamless way.

All recurring revenue is either some type of coaching, product, or membership site where you simply give people access to knowledge and wisdom that’ll help them go from where they are to where they want to be in a clearer, more succinct fashion.

Here’s the reality: There’s no shortage of information on the Internet. You can find everything you want, and that’s a good and a bad thing. What we offer our clients should be clarity and convenience. We can say, “Listen, you can scour the Internet and do all this stuff on your own, or you could pay me $X a month and get everything curated so you can go from here to there quickly, succinctly, and without all the messing around.”

That’s what we’re offering people. It doesn’t have to be 1,000 different things every single week in terms of new content or programs. Clarity and convenience is a big added value for any type of recurring model. And if you’re offering supplements, have an auto-ship program.

Think about that. Think about how you can make an existing offer or a new offer some type of recurring revenue model. If you want support with this, we are happy to help however way we can. If you meet my criteria, I’d be happy to work with you inside of our Luminaries Mastermind group if you’re interested.

You can email me directly at [email protected]. If you’re interested in more information about our Luminaries Mastermind, I’ll send you more information about it.

That’s all for today, and I hope you’ve enjoyed the episode. It’s always fun to connect with great people doing great things in their business. If you haven’t subscribed yet, be sure to subscribe on iTunes today. Go to the Heathpreneur podcast, click on the little button that says subscribe, and you’ll get all our episodes right to your phone every single Monday, Wednesday and Friday.

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If you want to know where you score on these four areas, you’ll also get the Healthpreneur success scorecard, which is inside the book. It’ll show you how to go from where you are to where you want to be. I’ve also included an advanced 90-minute training to go more in-depth with that specific stuff. You get all that for free, just cover a few bucks in shipping. Find it over at healthpreneurbook.com.

With that said, I bid you farewell. Thanks for tuning in, for your attention, and for being awesome. Continue getting out there and spreading your message. Be great. Do great. And I’ll see you in our next episode.

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Follow Scott McCulloch At:

https://www.thevegankind.com/
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