Taking risks can often be the scariest — and the most important — component of success in business. At BevNET Live Winter 2019 in Santa Monica, Calif., beverage industry entrepreneurs discussed when and how to take the biggest leaps of faith, when to stand your ground and how brand leaders can grow on both a professional and a personal level.
La Colombe CEO Todd Carmichael and Chobani president Peter McGuinness began the first day of programming with a discussion about the value and risks of corporate social missions and why taking a controversial stance can benefit a brand.
“The more you stand for something, the more polarizing you are, you rally your base and your base loves you more and consumes you more,” McGuinness said. “So this whole notion of playing it safe is really pathetic in this day and age.”
But risk taking doesn’t just apply to social missions. Carmichael and McGuinness also spoke about the need for brands to innovate and how “fear” helps fuels their pipelines. According to Carmichael, fear helps create forward-thinking, cutting edge new products, while its absence results in “me too” offerings.
Next, veteran investor and operator Tyler Ricks delivered his rules for creating value with investors. He advised entrepreneurs on varied pitfalls, noting they should be wary of copying other companies’ business models if they don’t make sense and of entering partnerships with private equity firms with over-aggressive timelines for hitting certain goals. Instead, they should “keep it simple” and try to stick to a limited number of tightly plotted routes to value creation and to qualify the components of that creation.
As Ricks encouraged brands to evolve their value creation models, natural channel distributor KeHE followed by discussing the company’s own evolution into a “next generation distributor.” Katie Paul, VP of category management & growth solutions, and Alex Marx, director of growth solutions, shared how KeHE is embracing blurred categories and reaching out to the industry through annual events and showcases. The pair also recommended brands be able to act fast and adapt to changes in the market.
Next, Brew Dr. Kombucha founder and CEO Matt Thomas chronicled his brand’s journey from a small startup tea house chain to a $50 million, nationally distributed beverage brand. Thomas discussed raising $45,000 in 2006 to open his first Townshend’s Tea location, scaling the company’s kombucha business through debt-financing, and even putting his own home on the line for a bank loan to keep the business growing.
At the end of day one, BevNET founder and CEO John Craven interviewed BevNET’s 2020 Person of the Year honoree Daina Trout, the co-founder and CEO of Health-Ade Kombucha. Trout discussed working with her husband Justin and the need to set boundaries to separate the personal from the professional, the importance of creating space for new entrepreneurs to thrive and passing her success forward by offering young business leaders advice.
“I’m a big believer that what you feed grows, no matter what it is,” she said.
On day two, the main stage program kicked off with a conversation between Vanessa Dew, co-founder and chief sales officer at Health-Ade, and Perteet Spencer, VP of CPG & enterprise sales at SPINS. They focused on how brands can leverage data effectively and efficiently while expanding beyond natural retailers. In today’s market, Spencer said, omni-channel shopping, digital marketing, and specialization have helped fuel the rise of micro-brands with unique value propositions. To reach consumers, brands like Health-Ade need to leverage analytics more than ever.
CAVU Ventures co-founder Clayton Christopher then outlined key lessons from his experiences, advising early stage brands to scale cautiously. He also warned against “spending real consumer marketing dollars outside of stores” until reaching strong ACV, and also encouraged brands to patiently win in their backyard first to avoid overextending themselves too quickly.
Following Christopher, founders and leaders from three brands having a major impact on the burgeoning CBD market — Benjamin Witte, founder and CEO of Recess; Jonathan Eppers, CEO and founder of VYBES; and Joey Cannata, president and COO of Daytrip — addressed the race for distinction in a highly competitive new category.
The panel discussed how brands are uniting to present a more unified voice within the conversation around CBD and hemp regulations. They revealed that they have had discussions as a group with the California Cannabis Control Commission to try to move the conversation forward regarding CBD in beverage products. The three also underscored what makes them each different: Recess, Witte explained, has steered away from emphasizing hemp extract as an ingredient and instead focused on creating strong emotional messaging. In contrast, Eppers said he has fully embraced CBD as the showcase ingredient for VYBES, claiming that consumers will pay a premium price for “CBD that works.”
Next, Matt Bachmann, CEO and co-founder of Wandering Bear Coffee discussed taking an “omnichannel” approach to scaling, suggesting that at a time in which consumer attention is at a premium and retailers have acquired more influence over brands, his company’s priorities were carving out distinct routes to consumers’ homes and offices by targeting online, office and retail accounts from an early stage.
Mark Olivieri, president of protein drink brand OWYN, then shared his outlook on how to best combine brand and channel strategy: “Tell a good story and you create a transaction,” he said. “Tell a great story and you create a movement.”
Concluding the program was a panel discussion on the future of beverage financing featuring Tom First, founder, TF Ventures; Nick Giannuzzi, managing partner, The Giannuzzi Group, LLP; and Janica Lane, managing director at Piper Jaffray.
Lane noted how over the past decade there has been a shift from M&A activity to capital raises. With major companies now getting more involved, the strategic buyer landscape has expanded — and should continue as multinational beer and spirits corporations in particular pay more attention. However, priorities have changed as well; Lane said strategics will expect brands to be ready to play outside of just natural retailers out of the gate, and are placing a greater emphasis on profitability.