#6 :: Releasing Bias and Creating Trust, with Scott Walker - Verse Chocolate

As we develop our specialties and become excellent in what we do, we also develop bias around what we “know.” Scott Walker, international cocoa expert and the CEO of Verse Chocolate experienced a silver lining this year, releasing his bias around the “right” way to  develop a product, which led to a successful launch in the middle of the pandemic.

Verse Chocolate https://versechocolate.com/

Recorded on 11.18.20

TRANSCRIPT

[Music & Intro] 

Laurie Pillow: All right, you guys. Welcome back to the 100 CEO Project podcast. Today, we're excited to have Scott Walker. He's the CEO of Verse Chocolate. The tagline is “Dark Done Better.” And we'll explain what that means a little later in the episode. For right now, Scott, welcome. And thanks for taking time out to talk to us.

Scott Walker: Thank you. It’s an honor and a privilege.

LP: So just a little background on Scott. His company is called KSW Global. Serving customers first isn't just a mantra, it's a better way of doing business. What we know about Scott is he comes to us with 19 years of experience in cacao, or cocoa. We’ll determine how we're going to say that word. He was also president of ADM cocoa and lived in Europe for 12 years and was the chairman of the European Cocoa Association. Ultimately, he came back to the States, worked in a few other businesses, and took a few years off cocoa and came back to it as an entrepreneur. And that's the capacity that we want to talk to you about today.

SW: Okay, well, thank you, I appreciate that.

LP: So we know that all of you guys out there, navigating the COVID stuff of 2020, it's made a lot of different obstacles and stuff. So as I understand you've got some silver lining moments or strategies that have demonstrated that there are silver linings to this situation. Can you share some of those, some of them with us?

SW: Sure. I'd love to. I was recently asked by a colleague here about four weeks ago, he just said, How did you launch? Because we launched Verse  Chocolate on the fifth of October. So what five weeks, six weeks ago? And he said, How could you launch a new business in the middle of a pandemic? And he goes, has it been a problem? And I said, Actually, no, I think it's been a gift. I think there's been a lot of positive that’s come out of the pandemic for us. And he was shocked about that. And I said, well, because of my years of being in cocoa, and being in Europe, I have, we all have biases, and I had a really strong bias on how cocoa should be done; on how chocolate should be done. And I knew that that was a problem coming into my whole venture of trying to start Verse Chocolate. And because I was like,there’s a better way to do chocolate; there's a better way to ferment the cocoa, make it less bitter, and to make it just taste great. And so that we can have less sugar in our chocolate. And so we had a plan on how we were going to do that before COVID. We're going to build a factory. And I also know, cocoa or cacao is finicky. And the same bean can be run on different equipment, and you'll get a different flavor at the end. 

And I know that my years of experience, okay, how do we take these biases? It's like, Okay, well, let's build a factory. And then from there with that factory we’ll be able to startup. We can make the exact same chocolate every time and make it the same way. Once we get what we want to do. Well, then COVID hit, and when COVID hit we’re like what do we do? Oh my goodness, okay, and we're building the factory in Michigan. And Michigan was hard on shutting everything down. And we're like, oh, my goodness, we took about 48 to 72 hours; our team did. We’d just signed the lease, we're going to we're going to start building that building. Like within a week when this hit. And we’re like well, let's let's rethink this. And we had not been using Zoom. We had not been using anything like this. Every time - I would admit. I mean, I would do phone calls, but it would be common to travel. I love to get on a plane and just go see people because I believe in relationships, right? I think relationships are really the only way to do business. And that's the key to basically everything. And it's like well, how are we going to do this? 

And my chocolate maker, Andrew came back and said, You know, I have the equipment. And you have that equipment you bought - that smaller lab equipment in Kansas City. Let's just start making the chocolate here and see if we can get to the right flavor based off our lab equipment. And I went, no; my bias said that won’t work. We're going to have to meet often, we're going to have to be together in a panel. We're going to have to do chocolate tasting. And our team was in Georgia and Minneapolis, was in Omaha, Nebraska, was in Missouri and in Michigan. I thought, that's just not going to be practical. Well, and so we had these biases. I'm like wait, and what happened was he started doing it. We started having Zoom calls every morning at 9am. We had like a 15 minute call with the whole team. Nobody else on the team has ever met each other. I’m the only one who’s personally met everybody. And I was like, Okay, how do we bring this together? Everybody understood the goal: everybody understood it was to make a great tasting dark chocolate - a 90% chocolate that tasted like a 70%. That was the goal. We want  great tasting with low sugar. Because our research had shown that most people with a certain education understand dark chocolate is good for them. But they're just not sure it’s going to taste good. They associate bitterness with not tasting good. And we know we’re going to solve for that in a couple of ways, but we had to go through all the trials. While as we were going through this, you know, we're using FedEx, we're using the Postal Service, we're sending samples around, I bet we tasted somewhere between 40 to 50 samples, each person. And what we got was really good, I would say, unfiltered feedback. We had a form, everybody would fill it out the same way every time. But like nobody was sitting in the room, you know, hearing things with that. And you had to do it on your own. And so I think we got better feedback. And we got better guidance from the team. Hey, this is good or this is not good. There was no peer pressure, there was no Oh, you know, someone gasps or says something like, That's great. And so I think we got much better clarity by doing that. And I think the other thing that we saw as we went through and it took us till really about July, when we said okay, we think we have it. Early August, we think this is it, okay, narrowing down and narrowing down.

To me, the silver lining was that. We would have normally met, we would have spent a lot more money on travel, we would have spent a lot more time away from our families. You couldn't do it. You just could not do it, right? And so you say, okay, we have a goal, we set vision of what we're going to do. And then everybody worked to that. I think the other silver lining, and I really thought about this a lot since I talked to you all earlier last week is, we live in a world where people basically really, we don't trust each other. We have a problem globally where there’s not a lot of trust. I think what came out of this was , frankly, by giving a vision and everybody's on their own, it shows, it showed to them, that I trust them greatly that, hey, we're together, we're gonna figure this out. And that ability to trust, people talk about it a lot, but it's not really shown much today. And it's really low, I think around the world. And it was very high in this instance. Incredibly high. And that's what you want whenever you're trying to develop something, when you're trying to build a team, you want that trust to be incredibly high. And I think, to me, those are the two silver linings to me: check your bias, because you had to do things differently. And really, you develop this trust, high trust, because of what we were having to go through. I think because of the pandemic, people were maybe insecure and they want to trust in something; they have to trust in something. And this helped with that too.

8:44

Andrea Spirov: On that subject of trust. That's interesting, and a really good silver lining. I'm curious, how do you see that translating to building trust between company and consumers? Do you think the same - I feel like we have a lot of the same issues where people just don't trust companies or brands. So how do you see that getting built out? The trust there...

SW: You have to be transparent. I mean, you can't - I think there's, you know, when you have so many, it's almost the more rules you have and the more documents you have, actually, the less people trust you. Because it's like I have to have all this in place to prove that I'm good or to prove that I'm doing the right thing. And I came out of a very large company, about $100 billion in sales. Not the chocolate business I ran. We were a tiny division of that company, but, and that company is a great company, and they still are a great company, ADM, Archer Daniels Midland. But what you see is that just, not necessarily ADM or others, but the more documents in place, the more people you have on your team, the more levels...you have to put those things in place to kind of control... then all of a sudden you lose something.  You lose like some humanity part of that. And when you lose that, you lose that trust as that well. Okay, but the document said this. But there is no document that solve all problems. There's never been one made. So you have to work the gray in there. I need to have a conversation, build a relationship, because at the end of the day, it's all about relationships. It's all about relationship. That is where everything, whether it's your brand, whether it's us three talking here on this call, whether it's my wife, my kids, my friends, it's all about relationship. That’s where the trust comes in.

10:40

LP: You were CEO of a large corporation prior to starting this endeavor with Verse Chocolates. And now you're officially, right now, a small business, an entrepreneur, and relative to trust and leadership, has your leadership changed - your style of leadership, for example? And if so, how?

SW: Sure it’s changed. I think it's changed in a way, you're, you're just trying to do the right thing. When you're in a big corporation, sure everybody's trying to do the right thing. But everyone's definition of right is different. And so you get into, okay, I can do the right thing, overall, in this corporation. But now I'm going to make this weird decision, because that's the best thing for the corporation. So you kind of have to manage these... you're like, Okay, well, we're gonna, let's have a conversation; so you get into this competing, you have things that are competing for your time, for your resources, and that's everywhere. But when you are, and you're always going to let people down? That's hard to deal with. Somebody’s always not going to be happy. And now you’re coming to a small business. And it's like, Okay, well, actually, I've got to set the vision, and I am setting the vision. You know, this is where we’re going. And it’s more like what I see the difference is, I'm just saying, This is what I'm doing. I may be wrong. And in fact, I may be really wrong. But you can't say that in a large corporation. You can't say, Oh, I made the wrong...you’ll just get your head shot off. And here, I may be wrong but yet, the more I do that, the more I’m truthful that, the more people actually want to be involved and help get it right. I want to be part of that. And I want to help you get it right, because I think you're right. And let's just see if we can prove it out. So I think it's this authenticity of where you're trying to go. It's just more authentic.

12:50

LP: You said the key word. One of one of our favorite key words. Authenticity. I want to go back to a comment that you made when we spoke to you last week. And regarding COVID. And the way that you do, now forgive me if I don't have the right term, but taste testing. So if I understand you right, you kind of broke with the norm. And you involved non-expert taste testers. First off, it's going to generate a like, wait a minute, is that the right thing to do? And how can this really give us the result that we want? So can you talk about that experience?

SW: Yeah, it comes down to.... we talked to some official taste testers, or professional taste testers who said, okay, we can do this. And I was involved in my chocolate days at ADM, we had taste testing panels in our factories, and you’d get involved. And you saw -  I was not an expert taster. But we expert tasters and they’d say, don’t do this, don’t do that. And I was like, ok, we should do that. And we did a little bit of that here, maybe about a year ago, and we kind of - but the feedback was not helpful. And you're like, Well, okay, what do we do with that? Well, we know the audience we're targeting. We know exactly who we're trying to sell this chocolate to. We know that there's a description of the person who we're trying to, you know, we know the age, we know the college education level. We know their income, we know, you know, what kind of a job they may or may not do. We know who we’re going to target but we’re like, wait a minute. Basically, everybody who's involved in this fits into that category. Why don't we, let's just be real, and let’s just us try it. And then if we liked it, let's let other people try it around us who were in that same category to get that feedback. And like, ok, spending tens of thousands of dollars on a professional panel for like, you know...we just know it’s got to taste great. It's gonna taste great. Everybody tastes things differently. As long as we can say, generally, this tastes great, and there's a familiarity around it, it let us do incredible things. 

The other thing we did with this, which I don't know, I don't know if everybody does this, we did have three experts around the world who were helping us, who understood chocolate. But each individual expert didn't know there was another expert involved. And so we would send them samples, we'd ask them specific questions. And they would come back - and we’d ask the same questions of most of them. And we started seeing things that were, like, at odds. And then there were times where they were, all three were on the same page, which was incredible. But that feedback and to be able to do it that way. Because normally you wouldn’t do that, they would all be talking, or there would be, and there would be more collaboration, but we kind of tried to just say, give us your best on your own. And let us -  we’ll decipher what we think is best. And I think that was a that was that was, that would have been, I think non-normal to most people trying to launch a chocolate business, or anything with flavor in it.

15:56

AS: I'd love to spend a minute on supply chains. So you mentioned when we last talked as well that you, because of COVID, you weren't able to get the beans that you wanted to use. So you have to make some changes there. And then you have a really interesting global brand statement that says, you can’t serve customers better without lifting up the entire supply chain. And that when the supply chain is healthy, we're able to best serve our customers and ultimately, the end consumer. Can you share some of your views around supply chain, because this was also the situation with your pet food supply company as well. You also took a lot of care with your ingredients.

SW: I think one of the things, if I can, if I can give this background. I lived three different times in Europe -  for the last I lived 10 straight years in Europe - from 2004 till the end of 2014. And in Europe, like non-GMO was kind of becoming… or non-GMO was absolutely, everything was non-GMO. You just couldn’t even have anything - it wasn’t even possible to bring anything in that was GMO. And that started from, I don't know, that started in 2000 or even 1999. So the word non-GMO really wasn't even a conversation by anybody at the dinner table. And then gluten-free started coming up. And then organic was kind of a, you know, you had organic and people were focused on organic but it wasn't a real debate. Whether you like organic... I moved back here in 2014. And I started to hear people who I would not expect to talk about organic, non-GMO and gluten-free, like that's like the conversation. And I'm like What happened? It's like I went into a coma in 2004. Because those three words were never mentioned in 2004. I come back at the end of 2014 and I'm like, Oh my goodness. And not only in food, but in pet food. And in pet food that was a big deal. It was like hey, can you give me a non-GMO, can you get me gluten free? And I’m like, for pet food? 

That was my first experience in that. So at that time I was like, Oh, my goodness, this is a big deal. The US consumer, which is very typical of the United States, we went from not caring, and the Europeans were caring, to we cared so much more than the Europeans. And we like pushed it to the whole supply chain. And what that means that to me is that I care about the supply chain so now I like the product. And I like this product. Now I care about pieces of the supply chain, meaning, where did it come from? Is it fair? You know, is it ethical? You know, can you tell me more about it? And to me that’s like well, I get that that’s happened. And I sit there and say like, okay, and it's hard, you know, the food supply chain, that's the number one thing. The food supply chain is totally safe. The United States government, the European Union, we've done a great job of making our food safe. But then because of that, we focus on safety and efficiency. For years. Go back to the Dust Bowl, the Depression where there was not much food around. And none of us have ever lived anywhere close to anything like that. We can say the pandemic but it's really not. And so the most important thing to a government is making sure your people can eat and that they can afford to eat. And that's been the focus and that's why companies, great companies like Cargill, like ADM, Bunge have done what they've done, and that's why they're so important for us to have good clean, I won't say cheap, but yeah, efficiently grown food. 

And that’s why we have farmers out there, you know, side note, I grew up on a farm in Illinois. My Dad still farms corn and soybean. So I have this, you know, that's near and dear to my heart, agriculture and farming. So we have these supply chains. But what I noticed was, there's a lot of questions. And when you consider that question, and we're trying to get the answers, and it's like, well, wait a minute, back to there’s all these rules, there’s all these books, there’s all these  things. And it’s like, well, do I trust that? Can I just talk to the person who does all that? Can I have a relationship with someone so I can look him in the eye. And to me, it became incredibly important that - I think there's a better way to do this. So I saw in pet food that there was a better way to do this. And before I left the pet food industry I thought, well what I do know best is cocoa. And when I was in cocoa, I did it, I did it, I was part of a huge organization, I was part of the big cocoa piece. And now that I've had this experience in pet food I have a different view, and well, I think there's a different way to do this. And I think there's a way to be more to be more transparent about this, but also make a better quality product. And a lot of people will complain about the price of the cocoa beans, the price of, you know, the supply chain. But these are things that I’ve learned. Most of the costs are in the packaging, or in the actual, like the last mile almost of the supply chain here in the United States, or in Europe, not back to... And that's why there's such a, what do you want to call it? A poor distribution of funds through the supply chain, and it took me - I know most people can go and look all that up and see what it is, if you really see it, you start to understand the impacts of decisions you make when you're trying to open up a chocolate business, and you go okay, that's going to be the impact of the supply chain. And that, that's where I go back to my immediate saying, was I want to connect the farmer or innovative farmer to a discerning consumer Now, can you actually physically connect them, it's going to be almost impossible in cocoa chocolate because there's so many small farmer, smallholders, farmers, but the farmer in cocoa, they don't really understand that they're trying to grow for taste, they don't understand that. They think they're growing for yield. They don't know they're trying to grow for taste. That's the most important part. And even how they're set up in the big cocoa industry; they’re set up around yield and around the size of the cocoa bean. And I go, there's a better way to do this. And so frankly, I'm trying to prove that by doing what I'm doing with Verse Chocolate.

22:05

LP: A question regarding growing beans for taste, not for yield. Can you give us a quick overview of what you are doing, how they're facilitating this change in the conscious and methodology of the farmers?

SW: Yeah, so I mean, it's really around, specifically the fermentation. So all cocoa is fermented. And it's, and it's basically rudimentary. It's passed through the ages that this is how you should do it. In some areas, they spend a little more time on it, and Central America, Latin America, they put it in boxes but it comes around the fermentation. In West Africa, it's done with banana leaves but it’s just this fermentation. But what I’ve learned and, and really, I had to step away to be able to look at this and see it because I was biased, I was blinded by my experiences was that and now I have experienced it many times, when you ferment the cocoa butter. When you do a better job of controlling the fermentation, it's less bitter. And if it’s less bitter you don’t need as much sugar. Now, for years sugar was the cheapest thing you could put in any ingredient in the United States. And sugar has become enemy number one in most diets, right? You don’t want sugar. But sugar makes it taste good. It makes it chocolate creamy, makes it do what it does. Sugar covers up a lot of sins in the natural growing of the cocoa. If there's a problem with the cocoa, if there's, you know, it just wasn't exactly the right thing...if you go back 200 years to when Hershey’s started or Mars, you know, they're getting, they didn't have the technology yet. So they're getting cocoa from certain areas of the world that may take four or five, six months to get there. And when they get there, what are they going to do with it? If it's bad? Well, the best thing you can do is, you know, you put sugar and milk around to help get rid of some of that problem. Now, I'm not saying that’s what they do today, but that our taste, became what we’re used to. And so we didn't actually stop it’s just what we became used to. And in Europe. But now we can react quicker. In fact, I'm working on a, with a group called Petra Corp so that we can get information in a system as fast as possible so that we can make decisions more quicker, that we can make decisions about quality quicker and get that feedback to the farmer quicker so that they know. They need to know hey, that's not good. That's not that's not what we're looking for. And right now, they don't get that exactly. And so there needs to be quicker feedback that’s accurate.

24:53

AS: So, our finishing question for you. We always have one tailored to you, is, when we caught up with Aaron Keller from Capsule, he was having some kind of a diet challenge. And he was actually using the Verse Chocolate for this challenge. So can you tell us more about why chocolate might be used as a diet tool?  

SW: Well, yeah, first of all, cocoa’s healthy. Chocolate’s healthy. It’s the sugar that’s so bad. because it's so Coco's healthy chocolate. And we know that chocolate leads to better, or cocoa, it has all these positive polyphenols,  it reduces inflammation. You know, there at one point in time, I know that there was a study out there, this would have been probably 2004, 2005, M&M Mars came out with a study...I think it was, you took an aspirin a day or you can take a package of small M&Ms a day, you actually got better blood flow and the M&Ms were actually better than the aspirin. So, because of the inflammation, or now, the side was you had sugar. That was extra sugar that was going in your body that maybe you didn't need, or maybe you did need. So there's all these positives. And so with Aaron Keller it was, he's like, wait a minute, you're telling me that cocoa is actually good for me. Chocolate is good for me, and that I should be eating it because it’s got all these antioxidants and polyphenols in it. And I’m like, yes. And he goes well I’m going to try it for, I don’t know if it was 30 days or however long he was trying it for, and see if I see a change. And anything that I'm feeling, or in my body. But also, it's like our Verse Chocolate, and frankly, most 90% or 85% if you eat those chocolates, they tend to suppress - it's like, if you eat one you say, wow, I kind of feel full. Whereas if you eat a more milkier chocolate like the M&Ms you just want to keep eating them right? I do. You just want to keep eating them. So it’s like, okay, it really kind of like Oh, that was that was satiable whenever I had that dark chocolate, and it helps with the appetite.

AS: I grew up with it. My late grandmother, she lived into her 90s, but she always kept dark chocolate in the freezer. And she would say just eat one or two pieces. She was also in incredible shape and ate really healthy. But she would always say just eat a couple of pieces of dark chocolate every day. And you'll live a long time. And she did. So there's something to that, I think.

SW: Yes. I think that’s absolutely true.

LP: So, Scott Walker of Verse Chocolate, thanks for sharing your expertise and most important, thanks for giving us all license to move into the holidays. Right? Eat more Verse Chocolate.

SW: Yes. Well, I’d love it if you’d eat more Verse Chocolate. But just eat more chocolate because it’s good for you.

LP: Well we want to eat Verse Chocolate, so tell us, how can people connect with you? And how can they get Verse Chocolate?

SW: Well our website is versechocolate.com and right now we only sell it on the website. So you can order right online. And, you know, if you want to connect with me, you can send an email through there, I think it's support@versechocolate.com or if you want to email me directly, I'm happy to talk to anyone. That’s scott@kswglobal.com. But you know, try the Verse Chocolate it's really, the goal is to have a great tasting dark chocolate at 90% that tastes like 70% and we do that through the combination of the cocoa beans but also the way we process with a recipe to be able to make that happen. So I appreciate your time and thank you for being interested in what we're doing.

LP: Thank you and for all you guys out there again it’s Verse Chocolate. Scott Walker has cracked the code. You are free to go eat all you want.

SW: Thank you, that’s great.

LP: Hey, guys, we hope you've enjoyed today's episode. And if you did, please share it with your friends and colleagues who also have to navigate this leadership stuff. As you can see, this project is about to be a mini masterclass in every episode. Best part. It's free. So if you like it, please do us a favor and take a screenshot, share it on social with the hashtag #100CEO. That way we can say thanks and share it in our stories. And finally, if you've got some insights you'd like to share and you're a CEO, we'd love to hear from you. You can find us at 100CEOProject.com, or on LinkedIn at the 100 CEO Project. Until next time, keep leading by example.

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Hosted by: Laurie Pillow, Andrea Spirov

Writing and research: Laurie Pillow, Andrea Spirov

Edited by: Laurie Pillow

Produced by: Laurie Pillow, Andrea Spirov