By Gerry Khermouch
After getting my newsletter out in New York the other day, I rewarded myself with a bike ride to the Upper East Side in quest of a coffee or a beer. Turned out it was going to be coffee – or maybe hot chocolate – that day, once I spied a nicely designed corner place with the odd name Little Brown Chocolate Bakery & Coffee. It had recently opened and, wouldn’t you know it, the owner was perched on a stool, observing his customers’ grazing habits, monitoring activity at the Starbucks across the street, bantering with anyone who wanted a moment of his time. The bald head, alert, friendly eyes and thick earring certainly made him look familiar.
Ah yes – why that would be Max Brenner, the chocolate guru! Having sold control of his original retail concept, the globe-trotting chocolatier (whose first name actually is Oded – long story) has been road-testing a new store. As I spoke with Brenner, he was obviously reveling in the exploration part of being an entrepreneur: hanging in the store from opening to closing, tracking every aspect of the operation, constantly questioning each of his assumptions. It’s precisely this attention to minute detail that separates true entrepreneurs from those I occasionally deride in my newsletter as “carpetbaggers” whose only interest is the final destination (of a big payout) rather than the journey itself. That journey inevitably means dealing with an endless array of tedious details. For instance, though Brenner had viewed an 8 oz., $1.45 pour as a considerate step, Brenner told me he was finding out that it irked some customers, who found that size insultingly small despite the lower price. Keep it or ditch it? The fate of the world doesn’t hinge on resolving this dilemma correctly, but the fate of the enterprise rests on many similar choices.
After Brenner ambled on, I found myself thinking of all the second and third acts I’ve witnessed in beverages. Just now, Fuze creator Lance Collins is returning to the fray with an intriguing functional line called Body Armor. John Bello, who already sold two companies (SoBe and Izze) to Pepsi, is making an energetic effort to get some traction for Adina Holistics. Mike Weinstein, who sold a pair of even bigger companies (A&W, Snapple) to Cadbury, is quietly working his Hydrive energy/hydration line, which is part-owned and distributed by Cadbury’s successor, Dr Pepper Snapple Group. The two key builders of Glaceau, creator Darius Bikoff and go-to guy Mike Repole, swear they’re not coming back, but their marketing exec, Rohan Oza, has tiptoed back with an investment in Bai Brands. Even as Nestle Waters closed on full ownership of Sweet Leaf Tea, the brand’s founder Clayton Christopher was a year into Deep Eddy Sweet Tea Vodka.
What keeps these people coming back? It can’t be just the money – some of these guys brought in a ridiculous haul with their first success. Of course, egos are at play: my pet theory is that they’re haunted by the knowledge that everybody thinks they got lucky on their first big hit. Luck, of course, always plays a role, but if they can do it a second time, then surely it will prove that genius played the bigger part.
Most of all, it seems to be these folks’ fundamental love of the business that brings them back. They are tinkerers, and the beverage business is their workbench – heck, even while still shackled by his non-compete contract after selling Fuze to Coke, Collins had edged back into every conceivable beverage avenue not falling under its restraints, from Argentine wine and Mexican beer, to an agave sweetener.
To me, their presence is a great thing for beverage innovation, even if these entrepreneurs rarely come close to repeating their initial success on the same scale. After all, these guys – as opposed to the carpetbaggers – know the ropes, and delight in the incremental improvements that can make the difference. They also have access to capital, and their reputation wins them a hearing with distributors and retailers that first-timers may not get. (I long ago learned to take with a grain of salt distributors’ avowals that they’ll “never take another product from that jerk!” referring to an entrepreneur whose last brand jilted them for the Coke or Pepsi system.)
As I suggested, there’s no guarantee that they will figure it out. But like Brenner, diligently patrolling his new coffee-and-chocolate emporium, they seem to have mastered that difficult balance between maintaining conviction about what they’re doing, and still being open to questioning every aspect of their creation. Of course, once in a while the returning hero really is just coasting – delegating the grunt work, generally being a tourist. Stay away from those brands!
And if the new brand doesn’t work? Well then, at least we plodders get to take solace that maybe they’re not such geniuses after all. We can indulge in the guilty pleasure of schadenfreude as we watch them struggle. “I never really liked that jerk,” we can go around telling our friends.
Longtime beverage-watcher Gerry Khermouch is executive editor of Beverage Business Insights, a twice-weekly e-newsletter covering the nonalcoholic beverage sector.