Broth Is Not the Same As Soup! The Mistake That Cost My Company a Year of Growth Kettle & Fire was selling bone broth like crazy. But when we tried to sell soup, we learned how hard product expansion can be.

When I launched Kettle & Fire with my brother, Nick, I knew nothing about retail. Like a lot of entrepreneurs, we just set out to make something we couldn't buy — in our case, an organic bone broth made from grass-fed, grass- finished animals, with no additives, and cooked for a long time. In 2015, after Google Trends and Keyword Planner showed us that other people were also searching for something like this, we introduced our first product.

This was three years before bone broth became a thing, with celebrities like Halle Berry and Chrissy Teigen swearing by it. But we found this group called PaleoHacks, which had some 800,000 members at the time, and these people were into all the health benefits. Once we let the group know about Kettle & Fire, we did close to $5,000 in sales in two days. By the end of the first year, we'd done about $3 million and made it into Whole Foods. It was insane. In 2018, our biggest problem was going out of stock.

And then we made a mistake.

That year, we decided: Hey, we're so great at making broth … let's go into soups! And we should buy a whole year's worth of inventory so we won't go out of stock!

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What we failed to realize was that "bone broth" and "soups with bone broth" are very different markets. Looking back, we'd been just kind of licking our thumbs, holding them to the wind, and saying, "Hey, we think the product is going to move X number of units — let's order that many." We didn't appreciate the importance of having a finance team to do strong forecasting and supply chain analysis. We also didn't realize the folly of entering a new market without studying it and testing the waters. Had we only asked our current customers, "Would you like to prepurchase our new soup product?" we could have gotten a signal on how it was going to sell.

The answer was: It did not sell well.

What we learned, as we dug in, was that people typically buy soup because they want a quick, cheap meal. Through that lens, our soup was expensive. Our original customers, on the other hand, consume bone broth multiple times a week for health reasons. So they're willing to pay more for high-quality nutrition but also more likely to say, "I'll just make my own soup with my Kettle & Fire bone broth."

One of the key advantages of being a startup versus a big company like Campbell's is that you can move fast and iterate, but we ended up sitting on a massive amount of inventory with our cash tied up for more than a year. We couldn't take customer feedback and adjust the product — add salt or whatever wasn't working — until we sold what we'd already made. That happened painfully slowly.

Ultimately, we did a lot of customer interviews and other research we should have done in the first place. We changed our marketing strategy to appeal to our core. Rather than selling our fans on how bone broth is the future of soup, we shifted to how our soup is a healthy, quick meal replacement, especially for those who follow strict diets like Paleo. That resonated, and eventually the soups sold. (They still do.)

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But our biggest gain came when we channeled what we learned into a new line of keto soups, which you better believe we tested and launched on Kickstarter to make sure there was demand. Now they're one of our top sellers, and we've grown more than 70% from the $35 million we did in 2019, the year we introduced them. We also realized how important our brand values are. Because of that, we now offer regenerative bone broth — not necessarily because it will be a huge seller, but because we want to take a stand in pushing for a more sustainable food system. Not surprisingly, our customers are with us. The response has been amazing.