Interview #11: Ismail Salhi

Consumers are making themselves heard with their dollars. They want cleaner ingredients and healthier products. Wildgrain, a D2C subscription carbs (bread and pasta) service, that has recently expanded to having its own brick-and-mortar bakeries, is looking to fill that gap in the bakery aisle. I had the pleasure of chatting with their Co-Founder, Ismail Salhi, about where he sees the industry today and how it will evolve over time. Thank you so much for joining, Ismail! I am super excited to share this conversation.

This is the eleventh conversation in an ongoing series with movers and shakers in the retail industry. Is there anyone you want to hear from? Please be sure to drop their names 👇

The following conversation has been lightly edited for context and clarity.

Ismail Salhi: Wildgrain is the first subscription box for frozen bread, pasta, and pastries shipped to your door. [Customers] bake them at home, and then you have fresh, warm goodies as if you just picked them up from the bakery. The company was founded in 2020. My wife and I started this company after working in consumer hardware for six or seven years. We wanted to be in food. We wanted to fix what we saw coming from Europe, [that there was] a big gap in the market in [terms of] carbs in general. Both in terms of market opportunity, but also quality and health benefits. We wanted to bring a European touch. High-quality products, fermentation, no preservatives, [and] all the best stuff that makes good carbs the way nature intended.

I have a background in computer engineering, I'm a PhD in computer science. [My wife is] an industrial designer, so none of us had any background in food. But we're very avid cooks and bakers, and we started just [started] doing it in our home kitchen in 2019. 
We stumbled upon this concept of par-baking. You make the loaf, you bake it 70-75% of the baking time, [take] it out, cool it out, and then you put it in your freezer. That allows you to just pop it out of the freezer and finish the baking later, instead of just doing the whole thing. That was a huge unlock for the business. We pitched a VC here in Boston 
[and] they supported us. They knew us from before and got our first check. Then, [we] went out in 2020 with a newborn and a pandemic to start [the business]. Long story short, Wildgrain is now 22 employees and more than 150,000 subscribers. 


IS: The main reason is to get closer to our customers. Opening up retail allows us to sell cheaper products or a lower-priced entry product because you don't have to buy a full subscription box to try Wildgrain. [All customers have to do is] go to a cafe and just buy a croissant, a coffee, or any local bread. The second piece is speed. Now,
you can order from Uber Eats or DoorDash and get them delivered to your house in 20 minutes. The eCommerce side is two days to deliver your products between the moment you place it and the moment you get it. It's just expanding the market beyond the people who are comfortable buying a subscription box; we knew from the get-go that not everyone is a subscription buyer or interested in subscriptions. It is a way for us to reach more people with a lower price point and expand the target market of a world group.

IS: Before we launched retail, I spent two years talking to people who do retail and asking them exactly what you just asked me. Like, why should I not do this? I got many valid responses from real estate is hard to employees onboarding is very different than in the D2C business. Training is essential, and scaling up is extremely complicated. It requires going as fast [as you can] and if you go too fast, you can burn the company by picking the wrong locations and going too quickly. It is capital intensive because you need a lot of capex to open an actual store.

People were just like, why are you doing this? You have this great machine that's working online. Why are you bothering with actual walls, physical problems, and permits? I think those are just truths, but if you're conscientious and if you care about your business right, I think these are challenges you have to go through. The biggest [challenge] for us is how do you replicate the same experience and make it awesome at scale without losing quality, without losing what's good about the first location. [All] while maintaining profitability. That last one is huge.

We're very excited about retail, [and] the early signs are very promising. We have a model that is very interesting, that is very different than normal. We have clean and healthy ingredients. We take advantage of that to pitch it to our customers and explain that there is bad frozen and good frozen. The same way that there are bad carbs and good carbs. Slow fermentation is actually incredible for your health. It helps you with a lot of things.

Our job is to do that education to deliver that message. It has huge operational improvements, training, supply chain, and pricing. Any bakery that wants to sell a good product has to either make it themselves, which is extremely non-scalable and hard to do, and you need a lot of training. [Alternatively, what is available with] food service today can sometimes be very uninteresting to my customers, so we're trying to find the balance between quality, what people want, when they want it, and then delivering on what we want to do, which is always warm. We are building out all that system, taking what we learned on the eCommerce side. 


IS: I don't think I've seen anything groundbreaking in making operational scale-up of stores. We try to use AI, and we use it for de-risking. I think a lot of the research for location scouting is now a lot easier [because of AI]. That's helpful, but it's not groundbreaking. It's not changing the business model. I am a coder. It changed our industry more than any other industry today. I keep waiting for the moment when it does it for retail, marketing, or video editing, but it is going to be a [bit]. Part of me wants to say quarters. Part of me wants to say years. I'm a true believer. I think it's gonna do a lot of good things.

We thought about using it for permitting and documentation to make efficiency gains. 
[However, you are not able to do anything] where because I am an AI native retail store, I'm gonna win. I haven't seen that. We use it at the back office for menu scheduling. We have these smart ovens that reduce food waste [by helping us] plan everything we need to bake and cook. That's all using AI in the back office. It's very exciting, and they can geek out about that for a long time. I always thought, what if it can change the business model of retail for the customer? It's not there yet. It's just that everything I've seen is gimmicks, and if anything, customers don't really like it. 


IS: I want to answer yes to both. It is broken because it was a race to the bottom for the last 30 years. By making shortcuts, the quality of the carbs you buy at the grocery store bakery is getting worse and worse. Margins are compressed, retailers ask manufacturers to find efficiencies, and they find them where they can. The only way you can make a loaf of bread more profitable is by making it last longer on the shelf. To do that, you need to add a bunch of stuff that just shouldn't be in the brand. There are fundamentally some issues with bakery at the grocery store.

We're trying to find the best way for us to fix those [problems] and find the customer who is health-conscious. If you look at the numbers, the categories are going down fast in terms of growth. I think people are looking for healthier options, and our subscription business is proof of that; when the industry is going like this, ours was growing pretty significantly. I think that's a sign that it's not people are not eating carbs. It's just that they want to eat better carbs. I think, to their credit, some are getting aware of this and giving more opportunities to companies that are not big bread.

I'm expecting what's happened in soda and what's happened in other categories, where better for you helped change the story and brought new challengers to the grocery store, to also happen at the bakery aisle. The problem is its supply chain is extremely more complicated than if you sell a pack of new clean mac and cheese, which is shelf-stable and can sit on the shelf forever. Bread goes bad very quickly, and the more natural the bread, the quicker it goes bad. I think finding the right products, pitch to the customer, and the right price point where it works is a challenge, but we think we can do it.

IS: The way we look at it is what people are looking for. We try to pack as many nutrients [as possible in the product], and that was our mission since the beginning.
It's just that now, the way you market it to customers is different. What we're trying to do is focus on protein content, fiber content, and making breads as nutrient-dense as possible. Those exist, and they have existed for ages. If you look at what exists in Germany, their breads are very dense and very hardy, but that's because they put a lot of fiber, wheat, protein, and seeds in those breads, which is extremely healthy.


I always joke that in America, we like to fix nutrition with new technology when nutrition has been fixed. It exists. Go to Japan, go to Italy, they know what we need to eat to stay healthy and live longer. You can go look at the list of the countries where people live the longest and see what they're eating, and you get it. What we're trying to do is the same thing. We're just highlighting more products that existed in the past, that are slow-fermented, that have different ingredients than just white bread. We don't have an opinion on what people should eat, as long as it's made the right way, without trash [ingredients].

I worry a lot, since we came into retail and brick-and-mortar. I don't know how retail will succeed for low, square foot retail, or with for mom and pops, that want to have their own restaurant or their own cafe. It is extremely hard with the rise of rents and labor costs, and in big cities like Boston or New York, or LA, it seems like an uphill battle with food costs going up due to gas prices and transportation costs going up. It was hard five years ago. It's extremely hard now for someone without a supply chain and knowledge of what's going on. That part worries me about the health of food retail in particular. 


I think building stores, banks, insurance, and offices will prevail, and it will be fine. I think the big chains will have their own stuff, and that's why part of our mission is to be the company that allows these small mom-and-pop bakers who do incredible bread the way it's always been done to have access to scale. A lot of the companies we work with, we became bigger [accounts] than Whole Foods, Trader Joe's, and the grocery stores for them because we allow them a lot of efficiencies in the way they can bake. They can stockpile inventory because we freeze it instead of just it being used in grocery stores directly. That's part of the [Wildgrain] mission.

I think retail is not dead, but I worry about the costs. Some property owners and developers understand that people won't go to a place that has just insurance companies and banks in their strip mall. They need some more authentic stuff, but a lot of them still don't understand that. I hope that people who are investing in real estate in the country today understand that you can't just have chains, banks, and insurance companies in their locations. They need to subsidize rent and step in for smaller businesses and stuff.

Greenfield Robotics is on a mission to give farmers alternatives to herbicide-dependent weed control. BOTONY is the beginning of a broader robotic farming system designed for a wider range of applications in the field.

The Reg A+ offering is now live for investors who want to be part of what comes next.

Invest in Robots Replacing Herbicides

^{This Reg A+ offering is made available through StartEngine Primary, LLC, member FINRA/SIPC. Please read the Offering Circular and related disclosures before investing. This investment is speculative, illiquid, and involves a high degree of risk, including the possible loss of your entire investment.}

Was this forwarded to you? Sign up here.

Have an idea or want to chat? Respond to this email.

Is the email not reaching your inbox? Try this trick.