Interview, Part 1: Mike Beaudry, CEO, HerblSeptember 6, 2022
Mike Beaudry founded California cannabis distributor Herbl in 2016 after previously serving as president and head of operations at UNFI, the largest publicly traded wholesale distributor of health and specialty food in the U.S. and Canada.
In a few short years, Herbl has matured along with the California cannabis business, and now claims a leading market share in the Golden State. The company also expanded into Nevada last year with its acquisition of Blackbird and now has seven distribution centers across the two states. SNDC associate editor Danny Sullivan recently spoke with Beaudry to hear more about the business and Herbl’s plans for the future.
SNDC: What is Herbl’s core mission, and how does it compare with beverage alcohol wholesalers?
Beaudry: It’s full-service distribution–we are modeled after the same structure as a Southern Glazer’s or RNDC. We built an infrastructure and technology that touches a thousand doors, so unless a brand has the wherewithal, capital, and desire to do that, they need to latch onto someone who’s built the rail system, so to speak. The second piece is if a brand wants to go it alone, well, how many sales reps is it going to take? We have 16 dedicated just in-market, plus inside sales and customer service. It totals 29 people to effectively cover the market. We send a digital catalog to approximately 1,400 buyers twice a week. We also have our brand support team, dedicated to helping the brands be successful in-market.
SNDC: How do you approach adding brands to your portfolio?
Beaudry: Again just like Southern or RNDC, we have an assortment criteria, and part of that starts with an assortment strategy. For instance let’s take the vape category: if you know roughly what percentage of total sales in California is vapes, we try to align having the number of brands in our portfolio to match that, and then inside of that we have further criteria for each vape brand like price point and consumer demographic. We’d consider that against the rest of our assortment, and every category is looked at through the lens of how the category works. So if it’s vape, we want to know that our sales team can go into a dispensary and quantify and qualify why we have these five vapes in our offering, because if they’re all the same that store owner isn’t going to know which to buy.
SNDC: How did you end up expanding into Nevada via your acquisition of Blackbird?
Beaudry: We looked at Nevada and saw Blackbird’s tremendous market share and capabilities there, and we thought, wouldn’t it make more sense to align with them rather than compete with them? So we got together, and it just made really good sense. We do very similar things in two different states. The regulatory scheme is different so the models differ based on the way the regulatory structure is framed in each state. But the thing that they did that Herbl did not, was they really focused on tech starting in 2015. So they built an online cannabis marketplace, they offered software services to retailers, they have digital marketing tools, they have last mile logistics. And so they’ve built this really robust company that does e-commerce solutions, integrated loyalty, rewards, and a full suite of marketing tools to support e-commerce and direct-to-consumer for brands.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning. You will also receive the Cannabis edition as part of your subscription.