The $500M Growth Story: How to Build Scalable Systems and Cut Costs with Scott Springer

Today’s guest on The Harvest Growth Podcast is Scott Springer, a seasoned executive consultant with a proven track record of driving exponential growth. Scott was pivotal in Vital Proteins’s growth from $30M to $500M in revenue before its acquisition by Nestlé. He now leads Chelwood Consulting Group, where he helps businesses achieve rapid growth through operational excellence and scalable systems.

In this episode, Scott shares the powerful strategies that propelled Vital Proteins and many of his clients to massive success. He explains how local manufacturing can improve efficiency and scalability, why automating processes is essential for reducing costs and accelerating growth, and how diversifying marketing efforts can fuel sustained expansion. Drawing from his extensive experience, Scott also provides actionable insights for optimizing operations, cutting hidden costs, and preparing businesses to scale effectively. Tune in now to find insights on building a strong foundation for success and navigating the challenges of fast growth.

In this episode of the Harvest Growth Podcast, we cover:

•  How local manufacturing improves operational efficiency and supports scalability, even for small and mid-sized businesses.
• Tips for optimizing the production process, reducing labor costs, and enhancing scalability.
• Opportunities and strategies for cutting hidden business costs.
• Key steps to forecast growth and prepare your operations to scale effectively.
• Tips for succeeding as a business leader with limited in-house expertise in key roles like engineering and manufacturing.

 
Visit www.chelwoodgroup.com to learn more about Chelwood Consulting Group’s services and how Scott Springer can help your business thrive.


To be a guest on our next podcast, contact us today!

Do you have a brand that you’d like to launch or grow? Do you want help from a partner that has successfully launched hundreds of brands totaling over $2 billion in revenues? Visit HarvestGrowth.com and set up a free consultation with us today!

Transcript

Jon LaClare [00:00:00]:
Today's guest helped double his previous consumer product business every year for five years, growing from $30 million to over $500 million in sales, and then selling to Nestle. Today, he helps growing companies keep up operationally with all of the complexities that come along with hypergrowth.

Speaker B [00:00:18]:
Are you looking for new ways to make your sales grow? You've tried other podcasts, but they don't seem to know. Harvest the growth potential of your product or service as we share stories and strategies that'll make your competitors nervous. Now, here's the host of the Harvest Growth podcast, Jon LaClare.

Jon LaClare [00:00:38]:
I'm really excited to speak with Scott Springer today. He is the owner and president of Chelwood Consulting Group. He's got quite a background experience in growing, massively growing a different business, and then eventually setting up his current consulting business to help other companies do the same thing. We'll dive in all those details, but I encourage you to listen as we, as we get started this interview. Scott, thanks for joining us today.

Scott Springer [00:01:01]:
Thanks, Jon. It's great to be here.

Jon LaClare [00:01:03]:
So let's talk about your background. So this previous company that you're a part of that grew so fast, can you tell us the story behind it and a little bit more details as to what the company was?

Scott Springer [00:01:12]:
Yeah, I mean, I was in manufacturing for a long time, and then I got reached out to come help Vital Proteins, which is a really big supplement company, you know, and, you know, I got called to go there, relatively small at the time, and, you know, I didn't know if I want to go to that small of a company. But, you know, I had the opportunity to build a plant from scratch, which I was excited about because I've always had to inherit plants that were not in great shape. And so I got to build it the way it's supposed to be built. Excuse me. And then, yeah, the owner's telling me, he's like, we're going to double every year. And I'm like, there's no way. And sure enough, we did. We doubled every year.

Scott Springer [00:01:52]:
We ended up selling to Nestle. And then shortly after we sold to Nestle, I started my own consulting group. And so I've been doing that for the last few years and it's. It's been great.

Jon LaClare [00:02:03]:
And you talk about doubling every year. I think it was at least five years that that happened. Can you share with us where it started and where it ended from a revenue standpoint?

Scott Springer [00:02:10]:
Yeah, our worst year was 86% growth. You know, we actually had one year where it was less than A true doubling. But yeah, we were in like 30 millions and ended in the 500 million revenue. I mean it was pretty massive growth. Yeah, yeah. And we had to manage that from the supply chain manufacturing because that, that's what I was, I was the VP of operations, you know, starting out.

Jon LaClare [00:02:33]:
Yeah. So that's a big part of, you know, keeping up with the ability to grow quickly and having inventory in place, et cetera. From a marketing standpoint, how did that get accomplished as a business? Was it what marketing channels do you know that were working really well? What really helped to grow the business so quickly?

Scott Springer [00:02:47]:
So they, they were at the front end of using influencers even before I started. Right. So they were using influencers and they had a plan. They were going to like go dtc, you know, Internet marketing. So it was primarily Amazon and their own website was. When I started, it was over 75% of the product that we sold was over the Internet by one of those two methods. And it was always about. Yeah, for back then, it was always about 2/3, 1/3, 2/3Amazon, 1 third our website.

Scott Springer [00:03:19]:
And then. And that made up about 75%, 80% of our sales. And then we had a couple small stores that we started out in the year I started. We did this massive expansion in the Whole Foods and then we started getting into retail and we started getting to the retail stores. But it was heavy promotion, heavy marketing on Internet, Facebook, Instagram and we had our team set up in each area. Our marketing team was phenomenal, our design team was phenomenal, getting that stuff out there. And then once the market was built, you know, the brand was built, you know, and we improved it or they improved it over time, you know, then the sales team kicked in and then we were able to easily sell it into all the different stores. And it was like, almost like it seemed like it was a new chain a month was coming in.

Scott Springer [00:04:09]:
You know, it's like Target and you know, Whole Foods and everybody, Costco and Sam's Club and Walmart and every major chain you can think of, we were going into. And it was almost like, who are we loading into this month? You know, whenever you load into the stores, that first load in is 50 to 100% more than you sell normally to that store in a month. So there are always these massive waves of load ins to stores.

Jon LaClare [00:04:37]:
It's real common path of growth for consumer product companies to start direct to consumer and then really catapult growth going into retail. And it still exists today. Right. So many of our audience probably listens and Direct to consumers, the only way to go. And as working in a business where we help companies launch and really focus on direct to consumer much more than retail today, obviously I love that side of the business. There's a huge potential opportunity to grow in that space. But eventually still for a lot of product categories, retail represents this massive opportunity of additional growth beyond that that you just can't get on or not the same way, at least on Amazon or on your own website, it can be almost all incremental. So it remains a great opportunity for a lot of businesses.

Jon LaClare [00:05:19]:
So let's rewind a little bit though. So part of, you know, that's the kind of opportunity. What are some of the issues you ran into from an operations perspective that as you grew, you know, doubling basically every year, every single year, what, what are some challenges you run into that.

Scott Springer [00:05:33]:
When I first started there, you know, they weren't, they're great marketing, sales company, you know, when I, when I started. But their operations and manufacturing was a little antiquated, I'll say a little, little behind the time. So the biggest thing that first year, I was talking to someone earlier today and it was like, man, it was such a sprint for 12 months to get us up to the level where we can grow comfortably without being a painful growth, you know. And it was getting all the processes in place the first year. Probably our biggest issue that first year was our supply. Collagen peptides is what vital proteins does, right? And back then back, you know, this is seven years ago now, eight years ago, there was a lot of collagen peptide companies, suppliers, but there was only one or two that made it very high quality. Most of the stuff like I, I tasted more collagen peptide from different manufacturers than you can ever imagine. And most of the time I tasted, it tasted like I was eating a farm, you know, because a lot of times it comes from beef, right? And it was like I was eating a farm and I had that taste in my mouth all day long.

Scott Springer [00:06:44]:
We like ours was such high quality. So to be able to grow with the high quality stuff, we, we outstripped our supplier and they had to build another plant just to supply us our primary supplier. You know, we had a number one and a number two and then we had like a three and a four for like, you know, in a pinch if we had some serious problems. But we didn't like to go off of our number one and number two. They were the best suppliers and they made high quality. So that first year being able to get enough supply to like we had to slow down our load in into Costco till they had their plant done their set their second plant because we couldn't have enough to load into all the Costco's. We can only load into three regions at the time. And even that it was like every ounce of collagen peptide was going into jars for the different stores that we were already in like Whole Foods and to get into Costco plus our online business.

Scott Springer [00:07:38]:
But that first year, that and also being able to keep up with capacity because the plants that I inherited was not big enough to handle the doubling of the growth that year. And so I we built a new plant, took about a year to get that plant up and running. But from the day I started to when that plant started we were using some co, we were doing our own manufacturing but we're also doing a lot of co manufacturers. And then you know you get issues with co manufacturers sometimes. Some of them are great, some of them were not so great, you know. Yeah, those are the two biggest issues that first year.

Jon LaClare [00:08:15]:
And since then I know you, I believed in all your manufacturing with that company in the US right? With US based American Manufacturing for, with the packaging.

Scott Springer [00:08:26]:
The collagen was actually from South America. And the reason, it's very specific reason. It's if you ever go to Brazil or Argentina, you know, South America, the beef down there is phenomenal. It's all grass fed beef. They don't have like the feed lots like we have up here. You know, they don't have winters like we have where there's no food for them to eat. They're eating grass. That's like.

Scott Springer [00:08:49]:
I got pictures of me walking through the fields in a ranch down there where the grass is above my waist. You know, it's like. And I'm pretty tall and it was like, you know, some of the grass was up to my chest, this grass this high. Like the cows, they don't reach down to eat, they reach out to eat the grass. There's so much grass down there for them to eat. And it's very healthy Beef produces a very clean collagen peptide or collagen. And collagen just comes from gelatin. So it comes from.

Scott Springer [00:09:16]:
We were getting ours from the height of the cow after, you know the, after the beef was you know, from the beef factories. But yeah, so ours was coming up from South America.

Jon LaClare [00:09:29]:
Better quality ingredients and then better quality or better efficiency in the production leads to better end result is going to be talked about.

Scott Springer [00:09:36]:
It's like South America was designed for beef production. You know the way.

Jon LaClare [00:09:40]:
Yeah, I lived in Brazil for a couple years and the, yeah, the meat is phenomenal down there. It's, it just, it tastes like it's all farm raised. It really is because everything's so, so local. So I know one of the things you do with clients now so you're on the consulting side of helping them prepare and be able to scale with growth. It's, it's a, you know, marketing is one piece. Right. But having your operations be able to stay up with you. I'd love to chat about American manufacturing because I know that's one thing you help some people clients do is to bring back to the United.

Jon LaClare [00:10:10]:
And there's great efficiencies in doing that. So you know, being able to double one year or the next is more difficult overseas when you've got to wait sometimes four weeks, sometimes six weeks or longer. If it's clearing through customs to get here, having it localized can certainly help. What are some of the ways, I guess that you help companies or that, that are helpful to companies to get their manufacturing here rather than doing it overseas?

Scott Springer [00:10:33]:
Well, when you look at their forecasted sales and how much they expect it to grow and then we start doing the back calculation of what can they produce in their given plant. You know, like when I started Vital Proteins it was like he had a goal of how much he wanted to produce three years from now. And so we built a plan for that. Right. And so I do that with my current customers. It's like how much do we actually need? And then try to figure out the most economical method of automation to make that happen. Not all automation is like great paybacks, you know, not a great return. A lot of it is, a lot of it is a phenomenal return and a lot of it is like coaching the owners on look at your return on your investment on the automation versus don't worry about the how much you have to pay for the equipment.

Scott Springer [00:11:23]:
You know, some people look at the price tag but they don't look at the return. You know, like I think anybody is like, hey, if I had $50,000 and I can, if I can borrow $50,000 at current rates today at 6, 7% and I can make 60% on that $50,000, everybody would do it. And a lot of times when you're automating, that's what you're getting. You're getting double digit returns on your investments, you know, when you put that down. But I also help them manage that cash flow to make sure that they're doing it at the right time too. Don't do it too early. Wait till the right time and then be ready to automate to limit the number of people you need on the job. And this way you can pay people more too.

Scott Springer [00:12:05]:
You know, a lot of times with people, they're not doing this manual work. They're, they're, they're, they become technicians instead of hackers.

Jon LaClare [00:12:13]:
Yeah, yeah, absolutely. Yeah. Like you said, they make more money, they're doing it a more enjoyable job as well along the way. And it's. Yeah, and you'll, you know, you maybe say this in a better way than I will, but to keep it in layman friendly terms, there's an advantage if we, as we think about automation versus labor costs overseas. Right. So it's, it can be so inexpensive or it feels inexpensive to manufacture a product overseas really because it's driven by labor. In a lot of countries there's very little automation, which can be expensive upfront, but as you mentioned, it's an upfront investment which you can borrow money for or pay over time, et cetera, but it can limit the amount of labor you need.

Jon LaClare [00:12:55]:
Therefore the labor cost. And in your experience and having helped so many clients through this, what sort of cost? Every, I know every category, every type of process is going to be different. But what sort of cost savings or cost differences do you see by implementing automation that correctly doing it in the US versus having manufacturing done overseas? Maybe.

Scott Springer [00:13:16]:
Well, first of all, there's certain stuff that just is made better or designed to be made overseas, that's fine. But some of the stuff is much better made here than overseas. You know, the higher end stuff, if quality is an issue, you know, like food and you know, different steel and machinery and stuff like that, made much better in the US than, you know, some parts of Asia, you know, like China and stuff like that. China, a lot of Chinese equipment's not that great, but usually people get double digit returns, like I said, if they automate and bring it in, depending on what the items are. Right. But generally when you do it here in the States, you're going to get. And if you do it right, if you do your analysis on how to do it and you're not afraid to lease equipment, you know, people are so worried about putting out that big check for the equipment. It's like, well then lease it just like you would a car.

Scott Springer [00:14:10]:
It's no different. You can do the same thing with it with any piece of equipment. There's banks all over that. You know, you can lease equipment for for five years, seven years and get a $1 buyout at the end. And so you don't have to pay it all up front. You get your return, you know, you get in your 20 to 80 to. I've had so many projects that were triple digit returns, you know, over 100%. You're paying for yourself in less than a year.

Scott Springer [00:14:34]:
It's like nine months. And people still, it's like, well I don't know if I want to spend that money. It's like, what are you thinking? You know.

Jon LaClare [00:14:43]:
Well, tell us about the Chelwood Consulting Group. So how do you help companies? We talked a little bit about automation. I know there's much more to what you do, but maybe at a high level, if you could share with our audience, how do you help and maybe what type of company or opportunity would be the right person or company to reach out to you to get help?

Scott Springer [00:14:59]:
Yeah, it's, you know what, we help companies in different ways. You know, it's generally small to mid sized companies, generally large companies. The largest companies in the world have teams of people like me and my team that do it, that are full time employees. Right. But we bring every one of us have 20 plus years of experience in industry in the different areas, whether it's quality or engineering or manufacturing. And we come in and we help people wherever their pain points are. You know, every company has bottlenecks. You know, usually the bottleneck is sales and marketing, right.

Scott Springer [00:15:35]:
But sometimes sales and marketing starts to outstrip manufacturing and supply chain and that's when you know, they need our help. We can help them lower their costs, help them design their factory and please, you know, if you want us to design your factory, bring us in before you get started. Too often I get pulled in and it's like so far down the rabbit hole that it's like it's a very costly endeavor for the client, you know, because it's the same price either way. It's just make the plant efficient, make it labor efficient, make it very clean, orderly, you know, and it works great. We can help them with engineering, supply chain manufacturing, lean manufacturing, a lot of training, improving their safety, quality systems, everything within a manufacturing plan. Outside of like IT sales and marketing, we have specialists in those areas.

Jon LaClare [00:16:27]:
Well, if anybody is listening and is intrigued or wants to learn more, Scott, how do they get a hold of you?

Scott Springer [00:16:33]:
Probably email scottelwoodgroup.com that's C H E L woodgroup.com or you can go to my website, shellwoodgroup.com and you know, find, find us there.

Jon LaClare [00:16:49]:
Perfect. Well, Scott, I really appreciate the time today. This has been a really fun interview. I encourage our audience to check out your website to learn more. It's like, you know, almost any company or really any company can benefit by taking a hard look at cost savings, whether that's manufacturer or other operations to be able to improve their business. So, Scott, thanks again for your time today.

Scott Springer [00:17:08]:
Thanks, John.

Jon LaClare [00:17:09]:
Did you know you can meet with a member of my team absolutely free for a 30 minute strategy consultation? We've launched and grown hundreds of products since 2007 and learned some of our strategies while growing OxiClean back in the Billy Mays days. We're here to help, so please go to harvestgrowth.com and set up a call if you'd like to discuss further.