Cannabis is a budding industry that increases in market size by billions annually. For Punit Seth, it’s a once-in-a-lifetime opportunity to create a meaningful brand with substance and longevity. Enter Toast, an exclusive, luxury cannabis brand with high quality products designed to encourage its consumers to celebrate life and create sensational moments.
We caught up with the company’s CEO and co-founder to learn more about Toast and how it’s carving a niche in the growing luxury cannabis space.
ForceBrands: Let’s first chat about your background. What inspired you to launch Toast?
Punit Seth: I’m originally from Charleston, S.C. and am a proud Clemson Tiger. Prior to Toast, I was in Management Consulting with Accenture and also at hedge fund Bridgewater Associates.
Toast started from a casual conversation with friends (now Co-Founders) and happened to just be at the right time and place. My co-founders include David Moritz who founded luxury marketing agency Viceroy Creative, Eddie Miller, a serial entrepreneur specializing in digital marketplaces, and Chris Burggraeve, the former CMO of Anheuser-Busch InBev. The four of us could not have been any more different; however, we all saw the same unmet need. Our vision was to create beautifully crafted cannabis products for all to celebrate life through social and mindful consumption.
Like most entrepreneurs in our industry, we identified it as a once-in-a-lifetime opportunity. For those of us who are passionate about CPG, this seemed to be our tech boom. But beyond the intellectual challenge, cannabis is an industry where the market size increases by billions every year.
Cannabis spans the globe and many important questions remain unanswered including those surrounding cultural norms, medicinal value, public policy, and business strategy. Identifying the right opportunity and building a world-class team of high performers provided us with a competitive advantage to produce alpha at the ground level. All this and much more led me to make the ‘no-brainer’ decision to quit my job and start Toast.
FB: Who is your target audience and how have you been marketing to them?
PS: Our target audience includes consumers that seek a social, mindful experience in cannabis, akin to enjoying a cocktail or glass of champagne. Consumption occasions for alcohol offer a template of the type of consumer that fits our target audience. However, we quickly learned that Toast fits many more occasions than we originally imagined. In addition to being a favorite among consumers seeking a social experience, baby boomers, couples, concertgoers, and nightlife enthusiasts, we also found many Toast fans are veterans, medical patients, and ‘cannasseurs.’ These learnings led to the further development of our brand and product portfolio to ensure that we addressed our entire consumer base.
Our marketing follows a traditional spirits playbook where we build our brand market-by-market through field sales and marketing. We are surgical in our approach, obsessed with ROI and have adopted zero-based budgeting. We focus on consumer education and driving legal trial through in-store campaigns and working with local governments to offer opportunities for legal, private consumption. We also spend a significant amount of time on B2B marketing in order to secure distribution and build a loyal fan base among those influencers that have the greatest impact on purchasing behavior.
FB: Do you see a large percentage of cannabis companies targeting a specific type of consumer base?
PS: We see most companies focus on high potency products that we believe address a small subset of the overall consumer base. After 4 years in the industry, we have noticed that our once unpopular thesis of offering consistent, microdosed (low THC, High CBD) products are now surging in popularity. Toast offers an experience that removes the anxiety of high potency and enables all consumers to enjoy cannabis socially just as one would their favorite cocktail. We see microdosing and adult use CBD as one of the fastest growing segments in the industry and are excited to be at the forefront of that trend.
FB: What’s it like to be part of the emerging cannabis space? Who do you consider to be your competition, if any?
PS: It is rewarding at multiple levels including intellectually but also personally. I continue to learn and see firsthand the myriad of benefits cannabis provides to both consumers and patients.
Cannabis is inherently counterculture and the challenges of our industry have led foes to form alliances and rely on creativity to navigate the constantly changing regulatory environment. There is a general understanding among brands that the market opportunity is large and there is plenty of room for multiple players to obtain sizable market share. With that said, our primary competitors at Toast include brands that offer an attainable luxury experience via microdosed products.
FB: Describe some of the greatest challenges of building a brand in a highly regulated industry.
PS: We find the biggest challenge for our industry is balancing entrepreneurship with responsibility. We are living in a world where entrepreneurship is outpacing regulation. At Toast, we believe that in addition to creating economic value for our shareholders, we have a moral obligation to self-regulate in order to protect the consumer while also working with regulators to implement strict and sensible policy (e.g., responsible sourcing, mindful consumption, consumer transparency). We believe this is key to the long-term success of our industry and ensuring consumers, business, and government all win.
FB: Here at ForceBrands, we build the teams that build the brands. How have you been sourcing your talent at Toast? Have you observed any trends in the cannabis space in terms of where talent is coming from?
PS: Everyone at Toast spends a significant amount of time on recruiting with the goal of building a world-class organization. I hire at Toast just like I did at Bridgewater. Despite having a fraction of the resources that we did at Bridgewater, we are still able to attract amazing talent and some of the most passionate people I’ve met in my life. The key — as in all jobs — has been finding people who share our core values and get excited about our vision.
We use ForceBrands because we have a shared approach on sourcing talent. I have heard from the field that we have developed a reputation in our industry for having a grueling interview process. Everyone that works for Toast considers that a badge of honor!
The majority of our talent has come from the consumer packaged goods (CPG) industry including beverages and natural foods. However, we also have amazing talent come directly from the cannabis industry. Having the right balance between CPG and cannabis talent has been a critical part of our success. While CPG offers a great framework, cannabis has its nuances. We find it difficult to find CPG and cannabis skills in one candidate; however, we have struck gold and found it on occasion. Generally, we build our teams by pairing individuals with CPG backgrounds with individuals with cannabis backgrounds. We have them work together on a common goal and find that it brings the best probability of success.
FB: If you could predict the future, what trends do you foresee taking shape next year and beyond? Where do you see Toast in five years?
PS: At a macro level, my hope is that the global prohibition of cannabis will end and governments will provide much needed access to cannabis to individuals who can benefit from it medically. I also hope that governments will reverse decades of social injustices that have hurt our local communities largely due to antiquated laws and unjust prosecution.
When considering the business of cannabis, I’d say trends are going to vary by geography and are going to depend largely on regulation. One of the biggest trends I expect is the explosion of form factors and different delivery mechanisms for cannabinoids. Unlike alcohol, cannabis can literally be mixed with everything and is being mixed with everything today. Two key questions are 1) what will regulators allow when considering consumer safety and 2) how will consumers choose to integrate cannabis into their daily regimen.
Cannabis culture has existed for thousands of years; however, it remains to be seen how modern cannabis culture will evolve. New form factors will require significant investment in consumer education and access to legal consumption occasions that enable integration into one’s lifestyle.
In that future state, we see cannabis following the trends of both alcohol (social experience with high quality, microdosed products) and food (well-informed consumers who care deeply about the ingredients they consume). I also expect consumers to continue to seek out cannabis for wellness in addition to social enjoyment and see CBD becoming more important and popular than THC.
Only time will tell in where Toast will be in five years. We expect Toast to be among the vanguard of cannabis brands that consumers choose nationally (and potentially internationally) to create beautiful moments they share with friends and family.