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Edible Arrangements COO says 'focus has to be innovation' amid supply chain crunch

Edible Brands President & COO Cheikh Mboup joins the Yahoo Finance Live panel to discuss the company's turnaround and new product innovation.

Video transcript

- We want to switch gears here and talk about one company that was actually impacted by the pandemic, has since seen a rebound in sales, Edible Arrangements. I'm a huge fan of this company. You probably know them because they have those delicious fruit bouquets.

The company is back on track after two years in a row of double-digit sales declines. And we want to bring in one of the executives that was responsible for this turnaround. For that, we have Cheikh Mboup. He's the president and chief operating officer of Edible Brands. And Cheikh, it's great to see you, a strong turnaround for your business. Tell us what you did to get things back on track.

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CHEIKH MBOUP: Thank you so much for having us. Look, I think it was a year of pure learning from trial perspective. Usually, we have the luxury of historical data in order to make decision. I don't think any one of us was able to refer to historical data in order to know how to handle a pandemic.

So in this instance, innovation at a fast pace was critical. Responding in a manner that we knew our product were emotional currency but responding in a manner that became a necessity by introducing products such as the fresh fruit that were able to be delivered utilizing our largest refrigerated fleet was critical in making us not only an essential business but putting us in a position where other products were able to be offered. So I say that during a time like this, quite frankly, the system we had in place, which our refrigerator fleet, and a ability to offer fresh fruit helped us tremendously.

- Cheikh, it is a favorite among a lot of people. And the strawberries covered in chocolate as well as the bananas with chocolate are big winners. But I got to ask you-- and you get one of these things because there's so much-- how long will it last in the fridge? I know it's not a business question, but I've gotten these. I love them, and I hate throwing things out because it's so good.

CHEIKH MBOUP: You know, I should be an expert at that question. Because every time someone invites me over, they say, bring one, and they ask that question. But look, I'll tell you, it last about two days, depending on how much you have dipped in chocolate. But what we've noticed was, especially in the-- during the key component of the pandemic, the idea of sharing those exposed arrangement were starting to not be people's favorite, right?

So we introduced various other categories such as our Bakeshop. We had ovens added in every single one of our locations, all 1,100 throughout this nation and later on internationally. Having those various other categories like the baked goods, like fresh flowers allowed us to be relevant throughout even though perhaps at one point, the idea of sharing one arrangement in a household of siblings wasn't even the most famous idea out there.

- I feel like I have the opposite problem. I do everything I can not to eat the entire thing in less than 24 hours. But Cheikh, when you talk about adding new products here, a lot of those like you were mentioning have been successful. What's that process like? I guess, how do you determine what you should add to your offerings and what you think people will potentially like?

CHEIKH MBOUP: Yeah, look, I think at first was to truly identify consumers and understand some of the key triggers why they interact with us. And the common denominator is there is an emotion that they're trying to display by using our product, which allows me to kind of call our product emotional currencies. So in this instances, as we added various other categories, the number one question was, would it wow someone, right? Would it allow them to use that product to express an emotion, that love, like, thanks, right, those daily celebration within our lives?

And from that point on, identify how we could expedite from receiving the inventory within our stores to delivering to the consumer within in some cases four to five hours. Those are the driving key factors as we look into what to bring into our business. And the consumers have voted with their wallets by letting us know that it was the right items at the right time.

- You know, a lot of people sometimes imagine what a CEO and a COO do. And you guys were on it. I mean, there's the story of having to get the government to acknowledge that fresh fruit is a necessity. I actually got one of these during the pandemic. So what was that like to have to convince bureaucrats who don't know anything about your business that this is a business that is essential?

CHEIKH MBOUP: Well, this was-- you know, one could call it nightmare now and talk about it. But quite frankly, it was a challenge in terms of many who heard of the brand could only think of the brand as one commodity, which is the fresh fruit. And this was a time in which, to be honest, everyone was trying to even define what's an essential or nonessential business. So we faced those challenges from one county to another, from one state to another. And if some-- in-- at one point couldn't operate throughout the entire nation pretty much for a period of 30 hours.

So we went through the idea of introducing ourself once again to the legal system from one country to another and as we convinced certain states, use the conversation that occurred between US and state a, whether it was in California or various other states, to trigger a new conversation via other states. This process took us pretty much about 12 to 14 days.

But at the end, I think after explaining what we carry and after sharing with them the luxury that we had at that time, which was the ability to get fresh fruit delivered into our stores and deliver it into the household of the consumer, regardless of where they were within two to three hours period, having a reach of over 70% of the US ZIP codes, I think as we shared those-- those facts, it allowed them to think greater from what we could offer and not just pin us into this gifting and nonessential sector. So bureaucracy in this case was a challenge, but I think data won.

- Cheikh, one of the challenges I would think for your business going forward are some of these supply chain issues. We've been talking to a number of executives that have had to shift their strategy slightly as a result of this. What has been the impact at Edible Brands? And how are you navigating this?

CHEIKH MBOUP: It's a very good question. It's a challenge that, unfortunately, Edible won't be the only one in this bucket, but the focus has to be innovation. I think that the days of thinking of bringing product a at a sooner time frame cannot be the only solution. Price elasticity also by itself cannot be a solution by raising just price points simply because you can't gain inventory.

So it's a coalition of a few things for us. It's innovation, introducing products that we could obtain here within the nation that do not require a tremendous amount of packaging or outside sources for it to circulate within the nation, hint the debate categories that we've elaborated in right here within Tennessee and able to circulate them throughout the nation.

Second, in some cases, unfortunately, there is some price optimization that must occur. Third, most importantly, being in a position where we continue to elaborate on having inventory, in some cases, airfreight. So this logistical issues that we're facing as a nation is tremendously hurting, I'm sure, not just retailers like us but retailers throughout this nation. But the answer has to be in elaborate innovation.

- Cheikh Mboup, great to speak with you. Thanks for taking the time, President and Chief-- Chief Operating Officer of Edible Brands.