Happy Sunday!
If you’re reading this, I hope you’re sitting on a couch, feet up on the ottoman, have a beverage in your hand, and today’s NBA Playoff games have been going in your favor. Today’s going to be another fun read since so many of you really loved the write-up of my talk with Bryan Cano from Nood… today’s email is a write-up of my conversation with Jason Panzer, the President of HexClad, a brand that will do well over $500M this year.
Before we get into today’s newsletter, I have to mention… Limited Supply is BACK! We talk about Cinnamon Toast Crunch going bankrupt because of Ozempic, Outdoor Voices, and how to pick ad agencies. Make sure you give it a listen on Apple Podcasts or Spotify.
Ok, today’s newsletter was such a fun one for me to prep for. I moderated a conversation with Jason Panzer at the DTC Experts event in Los Angeles, and I got our whole team involved in writing the questions because we work so closely with Jason and HexClad. Jason is one of the most impressive operators in retail, CPG, and DTC, and it’s because he gets obsessed.
Jason started as an advisor to HexClad in 2017 and then joined full-time as the CFO in April 2020. In 2021, he became the President and currently oversees about 80% of their sales, including their entire DTC channel. The growth, marketing, ops, and finance teams all report to him. Since joining, Jason has helped the business grow from $30M/year in revenue to a run rate that he believes will surpass $500M this year.
Oh, and HexClad is completely bootstrapped! It has never raised outside capital except for the money the founders invested when it started 11 years ago.
I wanted to talk with Jason about how it’s been possible to achieve such hypergrowth, how he thinks about copycats and competition, how he architected their partnership with the Michael Jordan of cooking, a.k.a Gordon Ramsay, some of his golden Panzerisms, and a whole lot more.
Here are 15 nuggets from our convo this week:
Don’t Be Bitter. Be Better.
At the beginning of our conversation, I asked Jason how he’s been dealing with copycats and competition as they continue to grow. Every breakthrough brand I know has experienced this, and it’s always a tough situation.
As soon as you start gaining traction, 10+ low-effort, fast-follow copycats emerge. Many of them do shady stuff, too, like directly copying your brand's website, positioning, ads, product colors, and more. I see it happening every day with Jolie, and I know dozens of brands who have experienced this over the years.
Jason’s advice? Don’t be bitter, be better. Competition is the cost of entry, and getting copied is the price you pay for success. Unfortunately, HexClad has copycat brands running smear ads against HexClad with messaging like “Don’t buy a HexClad product until you watch this!” If a brand has to resort to that type of messaging for its marketing… imagine how bad the products are!
If your brand is ever in a situation like this, he recommends doing 2 things:
- Send cease and desist letters early and often. If you are a fast-growing brand, you need to protect your IP. Be willing to fight copycats if they take it too far.
- Always be 5 steps ahead.
Jason isn’t focused on the competition. He’s focused on the future. While brands are busy trying to copy our funnels, he’s building up manufacturing and logistics capabilities to achieve $1B/year in sales.
He’s architecting partnerships with major celebrities where other brands can’t compete (did you see the new Benny Blanco apron?). He’s going all-in on content and just built an epic in-house studio. He’s combatting the competition through innovation, which is the best approach.
The Perfect Partnership
Everyone who knows HexClad knows about their partnership with Gordon Ramsay.
Gordon is one of, if not the biggest, celebrity chefs on earth. He’s obviously got a massive personal brand but also has a network of other successful media properties, events, and restaurants. I wanted to know how Jason architected this partnership and what has happened since they inked their deal.
Long story short, Jason and Danny (co-founder) planted the seeds early. The first conversation happened in early 2021, which was a while before the deal was complete.
Jason said the deal got done for 3 main reasons.
- Gordon loved the product! He had used HexClad cookware and felt confident in putting his name and reputation behind everything they had built.
- HexClad was negotiating from a point of leverage. When they first started talking with Gordon, they were on track to do $50M in revenue in 2021. They were profitable, and if the partnership didn’t work out, they would have been just fine. The company was derisked, and Gordon knew it. There was already tons of demand.
- Gordon is a real partner. Yes, they have a contract that mandates certain deliverables, but Gordon has become a real partner to the HexClad brand. It all starts with the fact that he loves and uses the products every day. He’s a high-level collaborator, not simply an influencer or part-time salesperson for their company. He helps think through new products, creates a ton of content for ads, and even helped them negotiate a new deal with Fox to have their cookware used in various shows. They have a long-term agreement with Gordon, and he’s a shareholder now, so he’s focused on the brand’s enduring success.
As anyone in commerce knows, tier 1 celebrity collaborations and partnerships are really hard. Figuring out the right equity and economics, getting the right level of time and engagement, and finding the perfect “product-celebrity fit” is never easy.
The HexClad x Gordon Ramsay partnership is one of the most authentic and effective pairings I’ve seen. Gordon's addition has added at least $100M in revenue over the last few years for their brand.
The ROI of Giving Product Away For Free
Another thing I know is that Hexclad has been incredibly generous with sending creators free product to use over the years. They have done this with large and small creators who love to cook. This includes celebrity chefs, restaurant owners, weekend warriors, and your favorite part-time or family home cook.
One big benefit of their product is that you can see the iconic HexClad hexagons in their pots and pans. It’s a very recognizable cookware set. Because of this, HexClad feels confident in sending significant amounts of free product without feeling the need to make a strong ask or request to post. Many times, they don’t even get tagged by the creator who uses their cookware, but that’s okay with him. The brand has become so relevant and recognizable that the halo effect of this strategy has clearly worked.
Jason revealed that they have been strategically sending free products for over five years now. Their long-term focus has been to embed themselves in the cooking x content culture, and it’s massively paid off. If you go to TikTok and search HexClad, you’ll see everyone who’s mentioned HexClad. Then there are thousands that won’t come up from the search but will show up in your content.
Everything Starts With Product Market Fit & Profitable Unit Economics
I firmly believe that when you ask people at the top of their craft about opportunities… they have the best learnings, pattern matching, and knowledge to answer. So, I asked Jason what makes the perfect DTC brand. Here’s what Jason had to say:
- You need a phenomenal product that solves a real problem for your customer: In the case of HexClad, it was re-inventing cookware to make restaurant-quality pots, pans, and knives available at home. Their pots and pans have patented technology that makes them 100% non-stick, highly durable with a lifetime warranty, dishwasher safe, oven and metal utensil safe, and they have great temperature control. Not many people realize this, but there’s real science behind the innovation of their design. It’s not just another pan; it’s a new technology and patented IP that drives the performance of their cookware set. Without truly innovating on the product here, they would not have grown as quickly as they have.
- You need profitable unit economics that work: This is the most important. According to Jason, brands can not spend years unprofitably growing a customer list to one day hopefully flip a switch and become profitable anymore. Whether you are planning to launch a new product line, SKU, or an entirely new company, you need to make sure that your unit economics make sense from day 1. Your goal should be to get to first-order profitability ASAP. In 2024, margins matter more than ever, and having profitable unit economics should be the #1 goal.
- Increasing AOV to make your margins better: As most people know, HexClad sells premium products. An individual 12-inch frying pan starts at around $150. Sets range from $300 to $3000, depending on what you get. Jason and his team have spent a lot of time thinking about bundling and offering unique sets to boost their AOV and make their margins even better for DTC. Although there are items for sale at the $150 and under, their AOV hovers around $400 today.
If you are building a brand, Jason thinks you should spend a lot more time thinking about strategically boosting AOV. Selling T-shirts? How can you sell a six-pack? Selling wine? How can you incentivize a case vs. a bottle? Selling socks? How can you sell a one-year supply? Figuring out how to bundle, upsell, and cross-sell to boost your AOV (and therefore boost net margin) is one of the most powerful things you can do to win.
The Perfect Pivot to DTC
Not many people know this but HexClad started 11 years ago as a retail-only brand. They were mostly sold in Costco’s around the US for a long time. They had built an incredibly strong business, but it was still small compared to what happened after they went all in on DTC.
When lockdowns started in March 2020, they initially lost 90% of in-store sales. At the time, they were earning about 30M/year (mostly from physical retail), so this was a dramatic change.
They had some DTC revenue, but not a ton. They also had a healthy amount of cash in the bank from operating a successful business for many years. They weren't worried about going out of business but needed to make a strategic change to boost revenue again. After Jason joined full-time, they decided to go all in on DTC. The first month after spending heavily on ads, they 5X’d their DTC sales, and the rocket ship growth we all know today had begun. They pivoted their focus to scaling eCommerce and DTC as a channel at exactly the right time, and it’s since 10x’d their sales.
Expanding Internationally
As HexClad grows, it is now available in Canada, Australia, Japan, the UK, New Zealand, and more. I asked Jason how important international expansion has been to their growth and what he’s learned.
He said that right now, international sales represent about 10-15% of top-line revenue. At their size, it’s an important lever. This means they’re on track to drive $50-75M in sales from their international efforts this year.
He didn’t share his full playbook on how they’ve done it, but it’ll soon be a topic of conversation on his podcast, 9Operators (highly recommend!).
The Power of a Great Group Chat
Midway through the conversation, Jason mentioned the power of having a great group chat as one of the key variables for his success. Jason said that he’s part of a text chat with about 12 other 9-figure+ operators called “The Big Dogs.” Sitting in the audience was David Ghiyam, the Co-Founder of Mary Ruth’s, who is also one of the 12 operators in that chat. David commented on how great the text chat was, and Jason called him up on stage to talk about his business and what’s happened since he joined.
For those of you who don’t know, Mary Ruth’s Organic is a vitamin brand with about 220 products. It has 200 employees, and David mentioned it was on track to earn about $350M in revenue this year. Mary Ruth's Organic is Amazon’s largest vitamin company; about 65% of its business is from Amazon, 20% DTC, and the rest is retail.
David talked about learning a lot about how HexClad and Lomi have strategically invested in technology as part of their defensible moat. He’s personally invested millions into double-blind clinical trials to improve the marketing claims for some of their key products.
One product they just launched for hair growth completed its clinical trials six months ago. Its results came back better than those of the category leader, and David thinks it will be a $100M+ product for them in the year ahead. Some of the early conversations and ideas around doing this came from the group chat. He also talked about an idea that Sean Frank (the founder of Ridge) gave him from the group that he thinks will be worth $80M to his business.
Huge things can happen when you get in a room (or a group chat) of wildly talented and smart people and share learnings together. When I started DTC in 2017, I had a crew of people I’d grab lunch with and share learnings with. Today, I am a huge advocate for having your own Big Dogs group chat. If you’re not in one… start one! It benefits everyone. Jason said that HexClad would be half the size if he didn’t join this text group. They all share their monthly PnLs, their wins and losses, and the nitty-gritty details of what’s going on inside of their orgs.
Both Jason and David think that everyone should start their own version of The Big Dog’s chat with peers in their industry. He told everyone to go find 5 other people with similar roles and titles and create a text group to share alpha with each other this year.
4 Helpful Panzerisms
If you listen to the Operator’s podcast with Jason, he often shares “Panzerisms,” which are just hard-earned lessons from his career. He shared a few with us near the end of the conversation that I thought really stood out. Here are 5:
1. Build a bank of favors:
Jason really believes in the concept of goodwill. He thinks you should do 10+ favors for someone before you ever make an ask. For example, despite having a lot on his schedule, he made time to hang out with everyone at the DTC Expert’s event. He wasn’t paid to be there. He just wanted to spend time and share what he’s learned with the community for free. He often tries to do this through the podcast, responding to emails and tweets, and attending events. It’s all about building goodwill and what he calls his “bank of favors” that he tries to deposit every week.
2. Be patient:
Jason has had an incredible career so far—first as a lawyer, then as a CFO at a tech company, and now as the President of HexClad. He turns 54 soon, but he shared with the audience that he had never earned more than 7 figures in a single year before age 51. He has a JD and an Ivy League MBA, and he’s worked at phenomenal companies in senior roles. He’s been grinding for 30+ years.
He said that many younger people (22-30 year olds) want it too fast. If Jason were 30 again, he’d simply optimize for learning and meeting great people. Most of the wealth you earn will come later in your career. It was a reminder not to rush, stay principled, work hard, and always do the right thing.
3. The harder you work, the luckier you get:
This is similar to the point above, but in Jason's eyes, hard work creates good luck—not the other way around. You win by staying in the game and putting in constant reps for 30 years. The more hard work you do, the more opportunities seem to fall into your lap throughout your life. Just keep going.
4. Don’t have an ad agency make your ad account:
This is a more tactical Panzerism, but they recently had an issue with another agency holding their Shopify store, ad account, and pixel hostage. He recommends that you don’t let an agency set up your ad account inside of their business manager. You need to own everything 100%. It’s a tiny tweak, but if you are in this situation, you need to resolve this today. It’s not worth the headache if there’s ever an issue down the line.
When we handle software or tech stack procurement, it’s on us to introduce our clients to the right partner, but they have to sign their own agreement and set up their own accounts before we move forward with the implementation. You should NEVER have other companies own your contracts with vendors or the admin account.
5. The Evolution of a Brand
The last point I wanted to leave you with is how Jason is now thinking about the evolution of the HexClad brand.
Basically, once you reach hundreds of millions in sales, it’s no longer about purely direct response performance marketing. To Jason, the next chapter is much more about building and expanding the cultural relevance of the HexClad brand. Jason mentioned that they are gearing up for more lifestyle content and creative, more focused on brand building versus direct KPIs. They’ll continue to push the envelope with creative partnerships, new product lines, and new messaging over the next few years.
They have recently leaned heavily into TV to expand their top-of-funnel and will keep growing internationally into new markets to scale. I think their end goal is to not only own the kitchen but also more products in the home.
Jason thinks that to do this, they have to keep scaling the halo around the HexClad brand. He’s currently thinking about iconic ad campaigns like Mastercard's “It’s priceless” ads. As everyone knows, these are not direct-response ads. They were created to evoke a feeling and craft a story for the customer and the brand. This is the game that every household brand is trying to play. Nike, LVMH, Lululemon, Apple, etc. HexClad hopes to follow in these footsteps, with new campaigns dropping later this year.
Watching Jason and HexClad’s journey has been incredibly inspiring, and it’s been so much fun for us to play a role as Sharma Brands. We helped them design the new HexClad site and have helped them with a bunch of ads, offers, LPs, media buying, and more. We can’t wait to see what they continue to accomplish in the year ahead.
If you want to get in touch with Jason or learn more about or from him, connect with him here:
That’s all for this week… now, onto some fun stuff!
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That's all for this week
I hope you had a great Sunday. I’m watching the last 30 seconds of the Knicks game and couldn’t be happier as I sit in my Knicks jersey at home. I hope the rest of your teams won today, too!
I’ll be in San Diego at OAAA (Outdoor Advertising Association of America’s annual event) this week, speaking about out-of-home marketing. Then, I’ll host an event in LA before going back to NYC — if you’re a brand in LA, apply to it. We have about 80 incredible brands coming so far, and I may throw down a DJ set, too.
It’s Sunday, so I hope you get those 9 hours of sleep tonight, break a sweat this week, stay hydrated, and have an incredible upcoming week. I’ll see you next Sunday.
Have a great night!