Connected & Ready

Going direct to consumer – part 2, with Ariane Daguin

Episode Summary

Since starting her business 35 years ago, Ariane Daguin has led D’Artagnan through multiple pivots and adaptations in her quest to supply professional chefs with the best ingredients. In this episode of Connected & Ready, she joins Gemma for a conversation about why her current shift feels different, getting to know your new customers, and what “one for all and all for one” means to her business. For help making your supply chain more agile, connected, and resilient, request a live demo of Dynamics 365 Supply Chain Management today:

Episode Notes

Host Gemma Milne is joined by Ariane Daguin, CEO of D’Artagnan, a supplier providing professional chefs and restaurants with humanely raised, free-range, and sustainable ingredients. When 75% of D’Artagnan’s customers had to close virtually overnight, she and her team expanded their business model to include retailers and consumers. Hear about how they made the shift, the importance of learning from mistakes, and the hope she has for the future.  

About Ariane Daguin  

As the founder, owner, and CEO of D’Artagnan, Ariane has built a reputation for providing humanely raised meats to top chefs and restaurants. A devoted advocate, she has been at forefront of the organic food movement and through her co-ops of small-scale farmers helps support natural, sustainable production practices. When many of her customers had to temporarily close, she added new customers by opening up her products direct to consumers.  

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Episode Transcription

Music playing [00:00:01]

Gemma [00:00:05] Hello and welcome. You're listening to Connected and Ready an ongoing conversation about innovation, resilience, and our capacity to succeed. Brought to you by Microsoft. 

[00:00:16] On today's episode, I'm speaking to Ariane Daguin, founder and CEO of D’Artagnan, a specialty meat company which had to switch their business from B2B to B2C. We dive into how Ariane has led the company through multiple pivots over the last few weeks and months, how the company mission has become a great north star for the staff to pull together in extraordinary circumstances, and have a business philosophy and mindset that's focused on supporting suppliers, customers, and retailers—[which] ultimately, hopefully, will be the thing that keeps the company going through thick and thin moving forward. 

[00:00:48] I so enjoyed this chat with Ariane. She's super passionate about what she does. So with that, on the show. 

[00:01:00] Ariane, thank you so much for joining us on the show. Why don't you start by giving me a little bit of background about yourself and D’Artagnan? 

Ariane [00:01:08] Well, D’Artagnan is a food company based in New Jersey, but with the four other distribution centers nationally in the United States. We've been around for 35 years. And that's when I decided to start my own company to name it after our hero D’Artagnan in Gascony. We all think will descendants of D’Artagnan, the Musketeer (laughs). But also, I really embrace his way of living. They really existed then, the Three Musketeers, of course. And they really had that motto "All for one, one for all," and they lived by it. And they had this panache about them to do things like every Gascon, to do things for the beauty of it, not for the “what's in it for me.” And I figured that was a nice way to have and start a company. My father taught us one thing that would be the most important thing, which is the respect of the ingredient. You cannot make a good cooking if you don’t have the right ingredient to begin with. And so, from the beginning, the priority at D’Artagnan was to source organized farmers in groups, find the slaughterhouse, and put the logistics together to give them to our first clients—who were the chefs/restauranteurs, and still are today—to give them the best product possible. And so the sales were fine, I mean, everybody was jumping on in. It was just that the logistics and the sourcing and the forecasting and making mistakes in forecasting was really very, very stressful. And I promise you, there wasn't a day that one of us, my partner and I, would say to the other, “That's it. I'm done. Here is my 50 percent. I give it to you for free. Bye bye.” And the other one would say, “Yeah,

[00:03:15] OK, but just wait one more day. Just come tomorrow, and if tomorrow you still think that, then that's it, we’re done.” And then the next day it would be the other partner who would say that. It was tough. It was very tough. 

Gemma [00:03:28] What sort of summarizes the story that you're telling me is that not only have you had to adapt lots in the past and you've had to keep on top of what's going on in terms of your forecasting, your stocks, your clients… You guys are very used to having to adapt to things happening in the market. But I'm curious, the recent crisis—is this something so different from what you've ever had to deal with before? Or is this just another bump in the road in the story of a company growing? 

Ariane [00:04:00] No, it was totally different. I mean, right off the bat, you know, we had 35 years to refine forecasting, to understand how to have contract morally, or written with the groups of farmers and to commit to them for a certain number of animals per week to be processed. And the price. We went through crises in 35 years. September 11th, the Hurricane Sandy without electricity. The crash of 2008, 2009. The fall down of my partnership with my ex-partner. I mean, there were crises. But that coronavirus crisis was very, very different. We cannot see the end of it. 

[00:04:52] And when you understand from, you know, what I was explaining how important forecasting is for us as one of the link on the food chain, but also for the beginning of the food chain, the farmers, the ranchers for the slaughterhouse. And to be able to supply the restaurants and the consumer when you don't know when those clients, I mean, from one day to the next, March 14, boom, they all closed. Seventy five percent of my business closed. Never seen that in my life. I don't think anybody else had experienced something like that. Now, you have some industries during that crisis that are doing great because they adapted. I have a friend, I just talked to him today—he's in the apple puree compote business—he’s booming. He's never seen volumes like that. And I have friends in the digital and the high-tech who are really happy. But anybody who's like us, dependent or who was dependent on the rest of our deals, the chefs, we have it very, very hard. And all the farmers behind, too. So for us, we had to pivot. And as soon as possible, try to sell much more to retailers and to e-commerce and direct to consumers, which we were very lucky we had started already. But then going full blast meant a whole different way of doing things. 

Gemma [00:06:30] So to just get the context then around this idea of why forecasting is important—and also the sort of supply chain problem—let's sort of lay out, maybe in terms of time. If you're assuming that a piece of meat is going to be delivered to a restaurant to maybe get served up that night, maybe the next day, how many days before that 

[00:06:51] are you instructing the farmer to start creating, start growing, start rearing the meat? What does that kind of…I think understanding that context immediately makes it clear why you had to pivot your business.

Ariane [00:07:06] Right. It depends on the species of the animal. Cattle, beef, takes two years. Grass-fed beef…our grass-fed beef takes five years. So, in there, you know, we have to play it by ear and adapt to the market. But this is how it works. Berkshire pork? Seven months, from birth to processing. Chicken, heritage chicken? Ninety days, 95 days, a hundred days. So depending which farmer, which species, we have to give ballpark ideas the season before, or two seasons before. And then week to week, we look at what we did last year, the same week. What we did last week, and what we did last year, the week after. And we try to organize the forecast like that. It is a little bit forgiving because animals are alive. So if you need a little less this week, but, you know, Mother’s Day is coming and you're going to need a little more, then as long as you have your trimester more or less in place with your farmers, you're fine. When you are in a sustainable environment like we are, when you are not a seasonal company like we are. In the commodity market, it's so different. 

Gemma [00:08:33] When you guys pivoted to start doing e-commerce and to retailers essentially—now doing B2C when previously you were a wholesaler, originally, your experience, and then B2B—what did that look like? And I want maybe tell me a lot about how you guys did that from a technical perspective. 

[00:08:53] How did you even start to begin thinking about how to forecast, how to talk to your own supply chain? What was that like on March 14th? How did you guys start thinking about adapting to that crisis? 

Ariane [00:09:04] Immediately, we started putting stuff in the freezer. Immediately. So the freezer filled up because we have commitment to the farmers and we want them to be there when we're on the other side. And then we had to adjust really fast with them and tried to close the spigot on those products that we are not selling anymore. On the other side, some beef like Wagyu beef, grass-fed beef, even the Angus beef that we do, pasture-fed and grain-finished but not in feedlots, in the prairie...those we are doing very, very well in retail and in e-commerce. So those we had to ramp up, which on the chickens you kind of can you know, you cheat on the week after, on the week after, and you kind of same thing on the beef except, hey, you need two years minimum to ramp up, the volume. So that's a little more difficult. So that's on one side. On the other, we have 260 employees. Out of those 260 employees we said, OK, no one gets laid off, nobody gets a pay cut. We all in here together, all for one, one for all. So all the sales people, I have like 42 sales people between inside and outside, they all went from one day to the next, from restaurant sales to retail sales. And they started helping the retail managers to call every store every day and giving an update on the products, on the availability, etc. And on the retail side, we were lucky because there was panic in the stores. Everybody went for the chickens. Everybody went for the beef. So that helped a little bit. It's not like we started from scratch. We had a website. What we had to do is immediately convert all those products that we were selling to restaurants in big primal cut muscles—the whole strip loin, the whole tenderloin—into steaks. You know, into little pieces. Same thing with the chicken for restaurants. We had to start cutting up, processing to be able to sell only the breast, only the leg, only the thigh. And so everybody was overworked trying to put all those new products on the website, trying to figure out how to do that processing. And in the warehouse, trying to reinvent the picking and packing jobs, because all of a sudden, instead of putting big cases in our own refrigerated trucks, we had to open the case, take pieces by pieces, put them in an insulated box, add the blue ice, you know, for much smaller orders for consumers. And so everything had to be reinvented that way until we saw in the parking lot on those trucks and they were dedicated mostly for restaurants. And all of a sudden those drivers and those trucks were without a job. And so that's when we decided to add one department, which we’d call Home Deliveries. And so part of that e-commerce, instead of giving the parcels to a third-party logistic, we decided to have specific suburban towns that were around our distribution centers. We decided to actually deliver all those ourselves with our own trucks. Most of the time, it doesn't really make sense. But it was very comforting and reassuring to see that the trucks were going out, that the drivers were busy, and also that it was a way to augment that funnel of consumers who were willing to buy more regularly from us. 

[00:13:01] And so that was a big plus. And so on the whole, that's how we went from B2B to B2C. 

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Gemma [00:13:41] Wow, what an incredible journey over such a short amount of time. I want to dig into the role that technology has played in all this, because it sounds like, you know, you said you already had a website set up. You clearly must have had tons of operational software and programs and whatnot to manage your business over the last 35 years. 

[00:14:00] But suddenly going from having a database of restaurants to having a database of retailers and organizing home deliveries in order to do things and timing—did you have to create whole new technological systems, or was a lot of it done by hand or, what was the role that tech played to help this evolution for you guys? 

Ariane [00:14:24] Again, we already had a website. So, no, we didn’t have to reinvent everything, but we didn't know what we are doing in such a scale. So we had to talk to consultants. And we are doing our own social media in-house. And so this we ramped up, all the affiliates, all the SEO, you know, all the marketing, the online marketing. We just listened to people and consultants and put the money where…with little tests sometimes and when proven, just boom, went big blast to try to reach new people. And the M.O, the bigger M.O., was reaching new consumers, reaching new clients. You always are trying to get your percentages better on the checkout at the end. But for us, a big thing was to go after our new clients, to open the funnel. That was the M.O. And to this day, we still don't know what we're doing. I have no idea what I'm doing. It just...I know on the big picture this is what we have to do. And then, hey, let's wing it. And we make mistakes. But I think the biggest thing is to learn from your mistake and don't make that mistake a second time. And that's how we've been functioning. 

Gemma [00:15:45] There are so many different changes that you guys have had to go through. What’s been maybe something that you've noticed now about essentially being a B2C company that maybe surprised you? You know, having that background in B2B, now being in B2C, what's something you didn't expect and maybe have to deal with or plan for or hire for?

Ariane [00:16:05] That's a good question. So several things I would say. The first one is that I have learned to be careful before I tweet, or before I put on Instagram, you know, because before I had all those eyes on me I was able to say what they thought without thinking about it. Now I have to be more careful. And there is this backlash on social media where no matter what you say, there's going to be people over there [that] hate you for it. So that was one of the surprises. The second surprise is the education—[the] will to educate themselves, from the consumers, from the shoppers. If there is one thing good coming out of that, that would be that. That people stay confined for too long at home,

[00:17:04] and what do they do? They cooked. And it is by cooking that you actually start learning the difference between a good chicken and a bad chicken. With our main clients, the chefs, there was never a question. They knew, you know, it's very easy. They have a bad chicken, a good chicken in front of them, they taste, boom, that's it. They understand why this one costs a little more, and that one, the thing, the better one, because they know that you need a good ingredient in order to get the good plate at the end. [With] consumers it’s not the case. And the relay, which is retail stores, even less. It's much more economic requirements than quantity requirements. And I think the biggest reason for that is simply because people didn't realize the difference. Even though I've been saying for 35 years, you know, a happy chicken is a tasty chicken. But still, I'm generalizing because we are just scratching the very small percentage of the American population. But I see it. The farm to table movement didn't start at the beginning of this crisis. It had started before. But I see an acceleration thanks to that…that big surprise, which is that people are now cooking. I really hope that is going to continue in this way. I really hope that, of course, when restaurants will be open, people will patronize them again and will go in droves and keep them surviving because the civilization without restaurants is…I cannot fathom it, you know, it’s not possible. But still have also a new way of looking at it and having that conviviality at home, which right now they don't have the luxury to do, you know, inviting people at home when you cook. But now that they've been cooking, maybe they will take their courage and keep that in mind and actually invite people once a month or twice a month and make a dinner party, and see how joyful and important for life it is to meet together around the table. 

Gemma [00:19:17] I love that. You guys as a business have played an interesting role as being part of this evolution or at least helping supply this evolution in some sense, which kind of makes me wonder, you know, everything's not just going to suddenly reopen again and you're going to be able to immediately pivot back to what you originally did. But, would you do that now? Because you're building up these relationships with B2C customers. You've created ways of making this a business in some sense. And I'm curious as to, you know, do you think you will continue having a B2C element of your business over time? Not just out of necessity, but out of the fact that you feel it's possibly good, interesting business to carry on with? 

Ariane [00:19:56] I think it’s…it's not only rewarding, it's fun because I finally talk to the end user, you know, the person who's actually gonna enjoy the food, which was a big frustration when I went through the chef because the chef would know the reaction of people, but I wouldn't. I would, but by second hand, you know? So it is very rewarding on that win. 

[00:20:23] So, yes, we are going to continue, but also, by necessity, restaurants have not reopened. Restaurants will reopen, but very slowly. Yes, people will come back. But I think working from home has been now established as a new normal and will stay. So there will be less people in the center of the towns where the restaurants are today. We also cannot forget that one out of four Americans are out of work right now. And so you don't go to the restaurant when you don't have an income anymore. And then you have all these new regulations that we're waiting that we don't know yet about how to do social distancing in a restaurant and how to cook food and sell food in a safe way in a restaurant. And so this is still a big question mark for them. How are they going to reopen? How much is that going to cost them, you know, to maybe take out some tables, take out some seats in the restaurant? And some of my friends or restauranteurs are talking about not opening at all until there is a vaccine. That's why the fall is such a question mark. Right now, in May, I have to tell the farmers how many turkeys to grow for Thanksgiving.

[00:21:53] Thanksgiving is a very specifically day when you need a specific amount of one product: turkey. Nothing else. If you make a mistake, if you buy too many, you're going to end up with a very expensive freezer. If you buy not enough, you will end up with very, very upset customers. And Americans are very peculiar about their turkeys for Thanksgiving. 

[00:22:20] They don't want to run out and they want to have their turkey and the right size turkey, which is another thing. Which sizes should we order? And up until now, the sweet spot for turkey has been 14 to 16 pounds. This year, I don't think it's going to be 14 to 16 pounds. I think a 14- to 15-pound turkey is too big. I think it's going to be, you know, much smaller. So we don't know where we're going there. We don't know where we're going with the restaurants. How many of those restaurants are going to reopen? How many of those that reopen are going to serve Thanksgiving dinner? I have no idea. 

Gemma [00:23:01] So at the moment, you know, things have changed since March 14th. It's been, you know, two months or over two months now. And restaurants are starting to open a little bit, albeit in a sort of different capacity. A lot of them, you know, doing deliveries, for instance, or maybe starting to kind of experiment with social distancing. We're also seeing that retailers aren't just having a whole load of empty shelves at the moment. They have started to adapt how they operate as businesses in this environment. So bearing that in mind, have you seen a level of leveling? 

Ariane [00:23:30] Yeah, there has been a definitive change in the curve. One, they panicked and all went to the store. Two, they didn't want to go to the store anymore because they were afraid to catch the virus. And e-commerce was there to compensate and to send food. Three, new phase. So every time it's a new challenge. Three, new phase: restaurants are reopening, but only for takeout and delivery. And so those restaurants are…the first consequence of that is that people are starting to taper down a little bit of cooking. And so the demand, because that started to develop, the demand on the retail and on the e-commerce, is starting to taper down. Unfortunately, those delivery and takeout menus are timid. You know, the volume is not there. Chefs don't have the full staff. So they tried to simplify things, and also, because they simplified things, they have a much shorter menu. They don't have the whole array of meat and poultry that they would have in a sit-down restaurant. So while their delivery system is going up, it's not necessarily with our own products. So here again is a different pivot again and a different challenge in looking at the numbers. I mean, this whole crisis has been like that, you know, change of food. It is extremely stressing. I don't sleep much anymore. There is a little bit of excitement in there because of the, you know, the unknown tomorrow and…and now a little more than at the beginning. I thought it was the end of the world. Every day was the end of the world. Now we are a little more secure. At least we see the numbers, you know, climbing up slowly on the…not that slowly, but climbing up on the e-commerce. I mean, now there is…everybody is a whole here. You know, we have all the employees and I cannot say there is a security because there is no security in what's happening today, but at least there is a sense of a little bit of a habit in the day-to-day, in the what's happening every day. But we're all waiting every morning, we're all waiting for the next hook, you know, where is the next hook going to come from? 

Gemma [00:26:02] Do you think that your mindset as a business like this that's had this really strong internal moralistic view, you know, all for one and one for all, do you think that that is helping you adapt perhaps better than large businesses that can take long amounts of time to make decisions and don't always necessarily have a north star to point to and maybe you feel you're saying you don't know what you're doing, but it sounds to me like you're taking some really great steps to at least try and do stuff, as opposed to freezing up. 

Ariane [00:26:36] Well, the first lesson is as long as you know that you don't know what you're doing, already [unintelligible] (laughs). But no, I think it's, yes, it is the culture in the company— "All for one, one for all"— that is helping a lot. It's also the size of the company. You know, a hundred and fifty million dollars we’ll be big one in the small fishes. And so we have that adaptability, that agility that those big corporations don't have. I mean, all those farmers and ranchers became partners in a sense, and good friends over all the years. We both need to stay alive for when this thing is going to be over. So let's do the best we can. And so that's the kind of relationship that I think you were losing when you get into a bigger corporate. Which, I hope to get bigger because this is what life is all about, but I don't hope to become corporate like that. I really hope that our motto, “All for one, one for all,” will help us stay grounded. 

Gemma [00:27:44] So you spoke a lot about relationship building with the farmers, with your suppliers and, you know, building that, making sure that they are all part of your “All for one, one for all” mentality, that you still want them to exist at the end. And you've clearly spent a lot of time building up those relationships. So I wondered if that—the way you approach relationships with farmers—was able to inform your approach to good customer service now. 

Ariane [00:28:10] To good customer service to a certain degree…probably, yes. To looking at life in know, to realize that yes, of course, D’Artagnan is a company, and as a company the responsibility is to be profitable, to be able to provide for the employees and their families. So based on that, it's the same thing for our partners, the farmers. We are there to provide for them. And so, because of that, it's not just about finance. It's not just about making more money, which in a lot of other businesses is often the case, you know, where you want to do more margin. And so the only way to do that is your vendor does less. You know, it's all in negotiation. Here it's not the case at all. It's we’re all in this together and we have to survive together because without them, we're nothing. Without us, they are nothing. And we realize that. And we saw right away that a certain category of them, the ones who had those more exotic animals, were going to be in trouble very, very fast. And I went to Farm Aid, which is a charity organization, and we put together a fund called the All for One Farmers Fund. And I took 15 of my friends, most of them high-profile celebrity chefs, or even some actors like John Lithgow, who's a big foodie and loves to cook, or Frédérick Fekkai, the hairdresser extraordinaire, Rebecca Minkoff, who does the accessories and the handbags and who loves barbecue. But also Tom Colicchio, Bobby Flay, Elizabeth Falkner, Daniel Boulud, Eric Ripert, all those chefs who started more or less in the same time we did and who became friends more than clients. And so we did a video all together saluting the farmers and enticing people to give to the fund. I'm very proud of that because that's one way to help. But we have to keep in mind that, and maybe this cris will help do that, that it’s not just about money. Having a company means also having responsibilities and having links that cannot be broken. Having partnerships that cannot be broken. I hope the new normal is not going to be the same normal, but I hope all this that so many people are rethinking right now is not going to go to waste. I really, really hope that when this crisis will be over, we will still have two hearts to change that for the better. 

Gemma [00:30:58] That's a lovely thought to end on, Ariane. So thank you so much for joining us on the show, for sharing your story, and hopefully for giving the listeners some inspiration in amongst all the advice around how you keep adapting as a business in this current environment. 

Ariane [00:31:12] Thank you very much, Gemma. And it was nice to have an accent against another accent. 

Gemma [00:31:20] That's it for this week. Thank you so much for tuning in. You can find out more about some of the things I spoke about with Ariane in the show notes. And don't forget to subscribe to the podcast and tune in next time to continue exploring the trends around how companies are adapting to a disruptive world and preparing for the future. 

Ad [00:31:43] Learn how Microsoft Dynamics 365 Supply Chain Management is helping businesses build agile and resilient supply chains. Request a live demo today by following the link in the episode description.