Q&A with Bruno Schiavi, CEO of Uncle Bud's
Conversations with the Cannabis 50
In under two years, Uncle Bud’s CEO Bruno Schiavi guided his company into becoming one of the largest and fastest growing brands in the emerging, but highly competitive hemp/CBD skincare and wellness space. In 2020, as other brands struggled to navigate supply chain disruptions and business model pivots amid the COVID-19 pandemic, he successfully orchestrated a launch that positioned Uncle Bud’s as the first US-based hemp/CBD in the Chinese consumer market. Schiavi made the time to sit down with MGO to discuss how his decades of retail experience helped prepare his approach to building Uncle Bud’s into a leading international hemp/CBD brand.
MGO: Your company launched just 20 months ago and experienced strong domestic growth. What spurred you to make the leap into international markets? Particularly the notoriously competitive Chinese consumer marketplace?
Bruno Schiavi, CEO of Uncle Bud’s: Firstly, I have about 25 years of experience in retail, which makes us a little bit different from a lot of the brands that are coming to the market. So many of the new entrants to hemp/CBD have very little experience in retail – they don’t know what a barcode or UPC Code is, let alone EDI (Electronic Data Interchange). They are “fly-by-night” companies that just think hemp or CBD is a trendy product and they want to jump on the bandwagon.
From the start I have had a very clear vision for what I wanted to do with our business. First, I wanted to establish a great retail presence in the US. And we’ve done that – we are in 15,000 stores and we are the #1 Hemp/CBD skincare brand at Kohl’s, we are in Vitamin Shoppe, Urban Outfitters, and a lot of other retail touchpoints.
Secondly, I also have a lot of previous experience in China, as this is not the first brand I’ve launched there. I’ve been doing work in China for about 20 years. So for me, it was a very clear path that China would be next on the radar – along with the United Kingdom and Australia.
While hemp/CBD is a new product in China, retail tends to follow the same formula. But timing is important. Like the US, in China CBD is a new and exciting ingredient that people want to explore. If you think about Chinese medicine, it is all about being natural and not taking over-the-counter tablets. So I knew that China would be a great secondary market for us.
MGO: What was your path to entering the Chinese market?
Schiavi: We worked directly with (Chinese online retailers) Tmall and Alibaba and they put a lot behind supporting us as the first hemp/CBD brand. I worked very closely with them and they fast-tracked us, we accomplished a process that typically takes 12 months in just six weeks.
MGO: Considering hemp/CBD is a new product in China and they have a complex regulatory structure, how were you able to navigate those obstacles so quickly?
Schiavi: It really just comes down to experience. In China there are different restrictions for every kind of product, and we knew that going in. We simply had to adapt quickly, be reactive, and at the end of the day… we just had to go for it.
I always say this to companies I work with: Unless you’re 100% committed going into China… don’t do it. Because #1 it is expensive, and #2 it is going to take a lot of your time. So allocate a good 5-6 hours per day to spend on China alone. If you think it is going to be a ‘hobby’ like entering traditional retail, you’re seriously wrong and you’re going to fail.
MGO: With COVID-19 and work shutdowns and import/export restrictions, were there additional hurdles you had to overcome to enter the Chinese market?
Schiavi: No not at all. It was pretty well planned by the team and me. During the COVID-19 pandemic, we actually grew the brand by about 8,000% in the US alone. With China we wanted to make sure we were competitive and price-sensitive. We put quite a lot of money behind marketing and PR – we have two PR firms in China, one in Shanghai and one in Beijing – and other firms supporting our activations like livestreams. Again, if you’re going into China, you have to make a full commitment.
MGO: How do you tailor your approach to make an impact in the Chinese market?
Schiavi: We launched the big 11.11 campaign with a livestream with Magic Johnson, who is a part of Uncle Bud’s. We also did a 12.12 event, and now we’re preparing for the Spring Festival. China has many shopping festivals throughout the year. Their retail environment is very different from the Western environment, so you have to think about adapting your way of thinking, your marketing campaign – what you do here (in the US) is not necessarily going to work over there. You need things like a social media presence in China on things like Weibo, WeChat and Little Red Book.
It is an exciting time for brands that want to enter China because the Chinese consumer is open to exploring new brands. I feel that they are ready to try new ingredients and new trends. That’s what we love about China.
MGO: Has tUncle Bud’s performed well in China so far?
Schiavi: Absolutely! We’ve beaten our targets. We launched with 20 products and now we’re introducing another 15. The Chinese market is going to be a major factor for us in terms of increasing growth in 2021 and beyond.
MGO: What is the competition like in China? Are there other competing Chinese or Asia-based brands?
Schiavi: Currently, Uncle Bud’s is the biggest CBD player in skincare and wellness in China. That is one of the reasons Alibaba got behind us. There is no other brand with the breadth of products that we offer: anti-aging, pain relief, pet care, and so on.
There are a number of other companies offering tinctures or doing a pain-relief product, but there isn’t one brand in China… yet… that has the presence from a product standpoint, efficacy standpoint, marketing standpoint, or celebrity following standpoint, that we have.
MGO: Knowing how competitive the Chinese marketplace is, are you expecting a big surge in others perhaps following your model or carving out a similar space?
Schiavi: Absolutely. And I just say: bring it on. Competition is great. It makes us think forward. It keeps us from being complacent. Of course, there will be competition, just like in the US. We were one of the first to come out guns-blazing with a lot of categories under our belt. I think China will catch up in the next 24-48 months.
MGO: You led the China launch with participation from Magic Johnson. While he is a big name in the US does he bring the same leverage to the China market?
Schiavi: Absolutely. The NBA is worth over a billion dollars in China. Magic is very, very well-known and respected there. But what we are doing is combining the forces of Magic with local celebrities as well. So we work with local big-name stars in sports, TV/film and music.
MGO: One of the big trends we are following in the 2020 Cannabis 50 is how athletes are playing such a central role, and in a lot of ways leading the way, in normalizing acceptance of cannabis and hemp/CBD products. Is that the same in China?
Schiavi: As people learn a little bit more about the benefits of hemp and CBD they understand that using a CBD pain reliever is not going to get you high and you’re not going to fail a drug test. This helps democratize the whole category. We want people to know it is a great ingredient, but you have to trust your manufacturing source.
MGO: How has Uncle Bud’s addressed the consumer education factor that comes with introducing a new product/ingredient?
Schiavi: It is a multi-layered approach. We use social media, celebrities, influencers, paid advertising, live streaming, experts, etc. We have to hit it from all angles. Because it is a new ingredient we have to work five times harder than someone launching another Vitamin C tablet, for example. Everyone knows what Vitamin C is, but not everyone knows what CBD is.
As a brand, that education really comes back to knowledge of the retail industry. If you think you’re going to put a product out there that has “CBD” on it and expect it to sell, then you’re gullible and probably in the wrong industry!
MGO: One of the things you’ve done well with Uncle Bud’s is blur the line between education and entertainment, making sure no one feels “preached to” and that they audience is having fun while learning. How do you achieve this balance?
Schiavi: Yes, this is essential, especially in this new category that has so many unanswered questions and unreliable manufacturers, where you don’t know where they are sourcing their ingredients. I knew I needed to align this brand with some trusted personalities, like Magic Johnson, Jane Fonda and Toni Braxton. It needed to feel, and be, authentic. Consumer trust is the key. You can’t go out there and start lecturing because no one is going to listen. You have to do it in a fun way so people feel they are part of a journey.
MGO: Another thing the COVID-19 pandemic disrupted was supply chains. With the launch in China, did you face any supply chain issues in 2020?
Schiavi: No, not at all. Firstly, all our ingredients are sourced in the US and all the manufacturing is done here as well. We are FDA accredited and OTC-licensed. That’s always been a big thing for us. And we haven’t had any issues. We have a strong supply chain and a great team with decades of experience exporting, not just to China, but internationally to the UK, the Middle East, and so on.
Having good people around you is the key. If you don’t have them internally, align yourself with experienced support.
MGO: Of all the achievements you had in 2020, avoiding supply chain issues like so many others might be the most remarkable.
Schiavi: Haha, yeah, well I haven’t slept much!
MGO: What were the biggest obstacles Uncle Bud’s faced in 2020?
Schiavi: The biggest obstacle was the overall disruption of normal life. Nothing was how it used to be. We had to adapt quickly so we could serve our customers and continue innovating while still finding our footing and not losing sight of our goals. In 2020, things changed overnight for many brands. For us, we really learned to be calm and not panic. There is always a solution for every problem. Some people made impulse decisions without really thinking. We knew the customers were still there, we just had to adapt.
For example, we couldn’t deliver to Kohl’s because they were closed for about two months. So we worked with them very closely to build out our online business offering.
MGO: When we started this conversation you mentioned your strong in-store retail presence, but perhaps no industry got hit harder than retail in 2020. When the lock-downs started, did you already have a robust online presence or was there a pivot on your team’s part?
Schiavi: We actually launched our website in December on 2019. We were doing some business in early 2020, but when the pandemic hit our traffic exploded. Customers that would have normally gone into stores found us online instead. During the pandemic, we grew by 7,000% in online sales alone.
Naturally, we had to redo the website, I can’t even tell you how many times it crashed. While direct-to-consumer was always going to be an important channel, it got accelerated dramatically.
MGO: Throughout your career, you’ve worked in a lot of different verticals, including apparel, jewelry, accessories and others. And you’ve taken other brands into international markets. Are there core principles across all areas that you’re able to build into your approach at Uncle Bud’s?
Schiavi: Yes, absolutely. No matter what industry you’re in, the consumer wants three things: a great product, at a great price, from a brand they can trust. If you’ve got those three things you’re on the right path. In the end it doesn’t matter if you believe it is a great brand, the customer needs to believe it.
See more about Uncle Bud’s and the rest of the Cannabis 50 nominees here.