Kevin Douglas (00:07):
Today on the Entrepreneurship@DU podcast,
Clare Whetzel (00:12):
People don’t look at their plate and the food that they’re eating and they don’t see the actual impact that it does. Every meal and every food has a different impact on the environment.
Kevin Douglas (00:24):
A DU student breaks the rules of the granola industry infusing her treats with insect protein.
Clare Whetzel (00:31):
There’s so many benefits, it’s kind of hard to narrow it down to one. And so I’m already back to expanding from having scaled back.
Kevin Douglas (00:42):
A recent report predicts the edible insect market could be worth $8 billion by 2030, up from less than $1 billion in 2019. And a market fueled by eco-conscious consumers, entrepreneurs are vying to meet the demand for healthy and sustainable protein sources. Today we chat with Clare Whetzel, founder of Illegal Oats. I’m Kevin Douglas and this is the Entrepreneurship@DU Podcast.
Welcome to the Entrepreneurship@DU podcast. Today we have Clare Whetzel, founder of Illegal Oats. Clare is set to finish undergrad this year at the Daniels College of Business with a major in marketing. Illegal Oats, took part in Entrepreneurship@DUs Basecamp Accelerator, and was also the winner of DU’s first ever Entrepreneurship Week Pitch Competition. Clare, thanks for coming to the studio.
Clare Whetzel (01:42):
Kevin Douglas (01:43):
Just to start off, I’d love to hear in your own words, what is Illegal Oats and what problem are you solving in this specific market?
Clare Whetzel (01:51):
Yeah, so Illegal Oats produces granola, and now granola bars enriched with insect powder, and the purpose of that is to provide a sustainable source of the same nutrients you get from meat, but it’s more ethical. It doesn’t use as many resources, it doesn’t pollute. A lot of people forget that it actually allows more people to have access to nutrients because if we’re not taking all of our resources to make meat, which is really inefficient, then we have more resources to go around more nutrients and more food to give to people who don’t have access to food. So there’s so many benefits that illegal eds are solving so many problems. It’s kind of hard to narrow it down to one, but I usually go with the environmental and then also the health aspect of it.
Kevin Douglas (02:53):
Could you a little more in depth with specifically what environmental considerations go into insect powder rather than other forms of protein, as well as what health benefits? Is there a big difference between protein from insects versus protein from animals or fruits and other foods like that?
Clare Whetzel (03:13):
So to start out with the environmental part of it, so often I compare it to beef and you often hear about the methane that cows produce and the carbon dioxide, which is a big source of the climate crisis. And also another part about it is that people don’t look at their plate and the food that they’re eating and they don’t see the actual impact that it does because every meal and every food has a different impact on the environment. So if you’re eating beef, it’s directly correlated to increased greenhouse gas emissions. They drink a lot more water. I wish I had brought my fact sheet with me to give more detailed facts, but they’re a huge source of wasting water because they not only drink so much water themselves, these are the cows I’m talking about. They also eat food that required water to grow.
And so that’s a big thing that people forget about when they’re looking down at their plate. You don’t see that the not only you’re eating this food that itself directly used these resources and polluted, but also ate food that had the same effect. And then you can also look at it how it pollutes water, because another thing people forget is that these really awful factory farms, they leak and there’s this water runoff that pollutes groundwater, which is where we get our drinking water. And it’s devastating to local communities. Obviously it’s people who have lower incomes have to live by these farms and then they’re directly affected by it. So that’s the environmental aspect of it. I actually originally started Illegal Oats thinking about the ethics of it. I mentioned these factory farms and these animals such as cows, pigs, chickens, it’s unimaginable what they go through, just like the amount of animals that go through this. And as we speak, animals are being slaughtered, animals are being born. The cycle just keeps continuing. Later I found out that people don’t really care much about the, again, they don’t see the pain and suffering that their food went to. I hate that there’s a different term for cows and beef. I think that just goes to show that how much of a disconnect there is. And pigs, we don’t call the pigs, we eat pigs, we call them pork, right?
So in addition to providing this nutrition, which is really great in what people have, they’ve responded mostly to the nutrition of it, but there’s this whole other side of it, the environmental and the ethical part of it.
Kevin Douglas (06:35):
I can tell that everything about what has now turned into Illegal Oats came from a pretty personal place that ethics is such a personal approach to deciding what your diet’s going to be and all the long-lasting ramifications. While I was doing research on this, I saw numerous studies that said, by 2050, everybody will be eating bugs to some capacity for protein. And I think that goes to show just where we’re headed. You’re kind of ahead of the curve. And this is a market that while in 2020 I believe was under a billion dollars, the insect protein or insect food industry is set to reach 8 billion by 2030. So you’re really kind of getting in on the ground floor of something that’s really booming. And I’d love to hear a little bit how your iteration of ground up meal worms in granola, where that came from. And in terms of your journey, did you experiment with other kinds of insect protein? How did you come to land on this product specifically?
Clare Whetzel (07:38):
That’s a good question. Yeah, I wish I took more pictures when I was first iterating because they were just scary. So I have gone through probably five different bugs. I use Japanese water beetles, I used ants, grasshoppers, I can’t remember all of the bugs I used, but I experimented with all of these, not only different bugs, but then different foods. So I tried to make bug jerky one time I completely tortured my family. Oh no. And this was all during quarantine, so there was no escape for them. The absolute Fergus dish I made was banana bread, and I was using meal worms that I had just gotten from the local feed store. And so I made this banana bread mix and just dumped in a whole bunch of meal worms. And luckily for me, it was late at night, so it was really dark when I made this. And I had a couple slices and I was like, this is really good. This is something. Then the next morning I wake up and I see how mills just full on were spilling out of this banana bread, and I hadn’t grounded up yet, and it was quite the site. And actually something I want to circle back to is these bug patties. I actually made breakfast patties with crickets, and they were actually really good. I had them for breakfast for a bit, but then
Kevin Douglas (09:21):
Something that could substitute a sausage on a McMuffin or something like that.
Clare Whetzel (09:25):
Exactly, kind of like a black bean burger, but instead of beans, their buns.
Kevin Douglas (09:32):
Clare Whetzel (09:33):
But then I remember this whole time I was meeting with one of my entrepreneurship professors, professor Pollard, and I was struggling with finding the right dish and the right bugs to use. And I said actually at the very beginning, it was a meal delivery service, kind of like Hello fresh. But they were all bug based dishes. And so I finally realized that I probably needed to scale back focus on one product and a product that I could, at that point, I was grinding meal worms because I noticed that they didn’t have a strong taste and they would be, could easily hide in dishes. So I said, okay, I need to scale back. This is going to be a great way to hide it. I can make these flavorful granolas and I can make different flavors. And they were a lot easier to make than granola bars, but now I’m workshopping at peanut butter chocolate granola bar. And so I’m already back to expanding from having scaled back
Kevin Douglas (10:42):
The peanut butter. Chocolate is such a good recipe for anything. You could slip anything in there and I feel like get away with it.
Clare Whetzel (10:48):
If you look at the nutritional profiles of the different insects, it goes pretty much crickets. And then meal worms, there are a couple different bugs around at the top, but it’s kind of an earthy flavor. I didn’t realize at the beginning, sometimes I would ask people if they’d try it. I was like, they’re actually mealworms in this. Can you taste them? And then after a while I realized what people don’t know what mealworms taste like, so how are they even going to know? But it’s kind of like an earthy, almost nutty flavor. And very recently, I have started mixing in cricket powder as well, which kind of gets into boring technical aspects of bug tastes and how they’re raised. But crickets are the most nutritious. And so I’ve started to powder them and enrich them in my mealworm. Granola
Kevin Douglas (11:44):
Seems like the natural next step for as you start to expand the product and your offerings. I would love to hear a little more. So during the pandemic, you’ve experimented with your family, all these different foods, and you finally landed on this granola. What was that journey of packaging it, putting it up at farmer’s markets? And as you were making those sales then, how does it compare to where you are now? Are you still mainly doing farmer’s markets? Have you expanded? Are you on any shelves at local stores?
Clare Whetzel (12:17):
Oh, I was as inefficient as you can be at the beginning. Yeah. In terms of producing, packaging, selling, looking back, it’s just crazy to think about all of the decisions I made. So I would spend all the night, the entire night awake, baking right before the farmer’s market. And I would make way too much that I basically knew I couldn’t sell, but I was terrified of selling out, which I never came close to selling out. But then I would package them in these brown paper bags that would be really greasy, and by the time I brought them to the farmer’s market, it would just be this big bag of grease. And it had all settled to the bottom. And I hardly knew anything about the fda, any laws that I needed to follow. But then I would tell them at the farmer’s market, and back then I was only selling at the farmer’s market.
I never really had any expectations because I knew it was kind of a time to just learn from my mistakes, which I made plenty and learned a lot from them. I would only sell four 12 ounce bags after all of that work. I would be at the farmer’s market like five hours after was 20 hours of production, and then I’d sell four. And I didn’t even know how much my costs of production were, and I just kind of priced it randomly. But now I’m selling it farmer’s markets, I’ve moved up. A lot of people dunno this, but farmer’s markets are kind of getting into colleges. You have to be established and show sales and show that you have a unique product and are successful in order to get into the kind of Ivy League farmer’s markets. And so now I am in two of those Ivy League farmers markets. Very proud to say last year. Congratulations. Thank you. So I’m at the Boulder Farmer’s Market and the Pearl Street Farmer’s Market, which are really exciting. Probably way overloaded myself, but we’ll see how that goes. And then I’m also, I was on a couple store shelves, then I had some packaging issues. I’ve always had packaging issues, but they actually caused me to have to lose some of my stores. So I was in five retailers and now I’m back to just being in one because of those issues. Gotcha.
Kevin Douglas (15:08):
And would you be willing to share what those troubles have been and what lessons you’ve learned from dealing with that? Where you think the solutions lie ahead?
Clare Whetzel (15:18):
Where do I begin? Yeah. So some of the issues from that will, so many problems in business come from the fact that you’re dealing with people. And so one of those retailers, I had a little bit of a bad experience and this person really took this just kind of miscommunication personally. And when I went to my product was selling in her store, but when I went to call her to restock or when I would go to call her to see if I could come in to do samples, she wouldn’t pick up my calls. And then one time I finally got her and she just totally blew me off. And at that point, you have to just say this, you kind of have to fire one of your customers, basically realizing that it’s just not a good fit. And then also dealing with people. You have to have the right people on your side.
So when I was choosing my designer for my packaging, I think made a post on Instagram about how I needed a designer, and I was kind of rebranding. Someone reached out, DMed me, and I was like, yeah, sure. And I was just kind of, I thought it was super cool that someone was reaching out to me that I just accepted the deal and we worked on the project for eight months and she got her nephew to design one of the flavors and we never got to editing it. And ultimately I had to say just this isn’t working out. And it was kind of unfortunate because she said, yeah, I agree. I wish that was a conversation we had had much earlier. So I learned that lesson and now I’m with a great designer. We’re finishing our packaging just in time for the beginning of the farmer’s market. So a lot of those lessons have come from dealing with different people who have come with their own baggage.
Kevin Douglas (17:30):
Yeah, I think that’s one thing a lot of people forget about all of these businesses. All these brands have real people behind them, and that’s such a practical side of entrepreneurship. You don’t always consider when you have all the systems in place to succeed, but just those interpersonal conflicts can get in the way. I’m sorry you’ve struggled with that, but I’m glad that it sounds like you’re setting yourself up for success this summer for the farmer’s markets. Hopefully. Hopefully good timing. As we’re getting into this nicer weather, I’d love to hear about how you and your current designer are standing out at these farmer’s markets. I think that, not to use a pun, but it is a very granola crowd that we’re appealing to with these farmers markets in Denver, in the Denver Boulder areas. What is it you’re thinking about when you’re thinking of how to reach, how to educate people on insect protein and people that, how would you convert these people that might be hesitant?
Clare Whetzel (18:28):
Yeah, that’s a really good question because as we always talk about an entrepreneurship, every single detail has to be intentional and you have to understand what reason you have for your decision and what you hope to achieve having made that decision. So right now with packaging, we actually, my designer who is so amazing, he had me go through a kind of workshop and it was this almost like a personality test for Illegal Oats, and it kind of narrowed down my whole brand voice. And I learned a lot about Illegal Oats going through this process and in this personality brand personality test, there were these archetypes and Illegal Oats found itself in the, I think it’s called the explorer archetype. And so it’s for people who want to be themselves, they don’t really, they’re not mainstream. They also have kind of this desire to go off the beaten path, which I think is really what Illegal Oats is.
And then there’s also this environmental and ethical and nutrition aspect to it. So we needed to include all of that into the packaging, and now it’s coming out soon, but we have to kind of represent that environmental part of it. The background is are these mountain ranges and they correspond with the flavor of that color. So the cranberry orange flavor, it’s these orange and pink mountain ranges. So that’s kind of both to make it delicious for the people who mainly care about taste and then also reach the people who are more of that explorer archetype. Then we have these big, bold letters because Illegal Oats is just, we’re trying to communicate how bold and unapologetic Illegal Oats is about being the first one of the, its kind. And then, like I said, most people really care about the nutrition of it. So I’m having a conversation with a woman who I did another accelerator with and my designer on how to put these nutrients into context for people who aren’t like nutritionist, but they care about what their food does for them. So for example, I have in the honey nut flavor, there are six grams of protein per quarter cup. So what we’re looking at doing is on the back and big bold letters saying six grams of protein per serving for muscle health, and then a handful of the other nutrients that are kind of key to understanding really what the benefit of insect nutrition is. And so it’s kind of a quick grab to people who are mostly into the nutrition of it.
Kevin Douglas (21:45):
Yeah, I think that’s smart, especially for the farmer’s market scene. I think of people, I think of browsers and they’re looking at the back of a package, those kind of snippets, they would capture my attention more so than just saying the protein and the calories and all that. It’s a great way to reach the explorers, I thought. I love that. Yeah, for sure. I think that’s really useful. I think every startup, even non-business venture should know what their personality is because that’s so valuable for finding that target market. I’m curious, just you personally, did you ever think before this you would start a business? Is this something you’ve wanted to do for a long time? Do you have other entrepreneurs in your family that have inspired you or influenced you, even given you advice for this venture?
Clare Whetzel (22:31):
So there was this really cool moment when I first really decided to enter the first pitch competition. It was before I was in person at DU because we were still remote because of the pandemic. And I was scrolling through my emails and I saw this email announcement from Professor Ross who was announcing the TikTok Pitch Competition, which because we were remote, it was basically a pitch competition, but you would make a 45 second video to pitch that idea. And I saw that. I was like, that’s cool. And I kept scrolling and then that kind of stuck with me, that idea to pitch. And it especially kind of struck me that I immediately passed by it thinking Dad is not me. I definitely label myself as not an entrepreneur, not someone who is capable of starting a business or who even wants to. And then I came back to it and realized that I was, I could totally at least pitch it, and I kind of had that idea ready from a different entrepreneurship class. And so at the time, the meal delivery service, that’s what I was pitching. I did a mockup of all the different recipes that I had made. I kind of gave a explanation of how it worked, and at that point, I felt like there was no looking back.
Kevin Douglas (24:12):
I love the contrast of you hadn’t even stepped foot on DU campus and I mean you’ve used DU for so many resources. You used the entrepreneurship department’s kitchen for cooking a lot of the product, right? Yeah. And the growth in that, the growth in you and the growth in your vision and the business itself is it’s very cool to see from my vantage point. So congratulations on everything you’ve achieved so far. That’s very exciting.
As you get closer to graduation now, where do you see the future of Illegal Oats and is this something you want to continue pursuing as you finish and move on from University of Denver?
Clare Whetzel (24:54):
Yeah, I think the next step is just kind of continuing that growth process and continuing to build it, strengthen the brand, continue making steps, figuring out what the brand voice is and more systems to make it this turnkey business where pretty much I have a handbook to it, someone can step in and completely take over because I see in the near future, hopefully within two years, I’d like to sell illegal oaths to someone who cares about the cause as much as I do and is just as passionate. And the main reason I want to sell it is because I have more business ideas.
Kevin Douglas (25:44):
Would you be willing to share some of those?
Clare Whetzel (25:46):
Well, one of my professors just shot one of this idea down that I’m actually really excited about. Oh, but I’ll share it anyway. So it’s the idea to take common kind of toiletry items and kind of boring day-to-day items that come in plastic packaging. And so this includes dish soap, toothpaste. Those are the two that I have in mind and make them package less. The problem that I see is that people with brand loyalty to their Colgate toothpaste or Dawn Dish soap, they are going to have trouble testing out these new products when they have no idea how they work, and there’s no promise to really working at all. And so I want to bridge that gap by taking, for example, the dish soap, take one of those company’s products that are already making dish soap that’s at a dish bar and basically slapping the name of Dawn onto it and selling it right next to in the department store, Don’s dish soap. Then there’s Don Dish, eco Bar, something like that. And that solves the problem of this environmentally friendly everyday item having easy access to it, because right now you kind of have to go to a special store to get them, and it’s a strange brand that’s really local and you don’t know. So it’s solving that problem and reducing plastic in that way.
Kevin Douglas (27:33):
Yeah, that’s another business that it sounds like your professor maybe shot it down now, but just like the insect protein industry, if you asked someone 10 years ago if they’d be open to even considering a granola with Mealworm powder, that feels like something else that as I don’t, I hate to say as the world is burning, but as we become even more conscious of the ramifications of environmental devastation, sustainability, that feels like another industry and another way to get into that industry early that could really be successful. I could see that catching on and who knows what that could become considering where you started with Illegal Oats as the HelloFresh style of product, and now it’s something entirely different, but very, very cool and unique, and I hope you’re able to work on that in the future as you’re if, and of course, selling Illegal Oats would be awesome too. Yeah,
Clare Whetzel (28:29):
Kevin Douglas (28:29):
We always wrap up our interviews with a couple rapid fire questions. So the first question is, how do you personally define success?
Clare Whetzel (28:41):
I think it’s really personal. I think it’s knowing that every day you tried your hardest to promote the causes that you care about, and you do everything in your power to create a better world, whether it’s getting results or not.
Kevin Douglas (29:01):
The second question is, what is the best or worst piece of advice you’ve ever had?
Clare Whetzel (29:09):
That’s a really hard question. Well, there were people who said, don’t do Illegal Oats. It’s really stupid. I can’t remember who or how many people. It’s more than one, but I’m glad I didn’t listen to them. Yeah,
Kevin Douglas (29:24):
That’s terrible advice. Don’t do it. Yeah, I always say, do it no matter what. If it’s legal and ethical, just do it. And if it fails utterly, you learn something. Well, Clare, thank you so much for coming in and talking to us. I’ve learned a lot about you and your business, and it’s very cool to get a sneak behind the curtain and very excited to see where it goes from here. So best of luck with the farmer’s markets this summer and everything else in the Illegal Oats future.
Clare Whetzel (29:49):
Thank you so much. Thank you for having me.
Kevin Douglas (29:51):
Of course, the Entrepreneurship@DU podcast was recorded in Marjorie Reed Hall on the University of Denver campus. You can find us on Instagram at du Entrepreneur on Twitter at du underscore entrepreneur, and on Facebook at Entrepreneurship@DU entrepreneurship. At DU is part of the Daniels College of Business, which has its own podcast. By the way, check out Voices of Experience available wherever you get your podcasts.