Gerry’s Insights: Oil & Water & Chocolate: Learning from Oded Brenner’s Second Act

Before I ran into him at Expo West a few weeks ago, my last encounter with Oded Brenner occurred a decade ago, as I chronicled in this very space, when I blundered into a new coffee shop on Manhattan’s Upper East Side called Little Brown Chocolate Bakery & Café and spotted him surveying customer activity at his new concept. “The bald head, alert, friendly eyes and thick earring certainly made him look familiar,” as I wrote – ah, it was the chocolate guru of the Max Brenner empire, which he’d sold to Israel’s Strauss Group conglomerate. To me, Brenner epitomized the spirit of the serial entrepreneur, constantly observing, experimenting, tinkering with the minute details that separate success from failure. But the store didn’t last long, and I assumed it just hadn’t worked out. That’s how it is sometimes. It certainly wasn’t the location: the site currently supports what seems to be a thriving Variety Coffee Roasters store. A few years later, I heard that Brenner had zeroed in on the core constituent of chocolate, cacao, with a new retail concept called Blue Stripes. In fact, that store was located just a couple of blocks away from Max Brenner’s flagship store. Hmmm.

It wasn’t until I came across a remarkable profile and interview that had run in Entrepreneur magazine last spring that I realized that, at the time I encountered Brenner, the life of the good-humored entrepreneur was about to spiral into an abyss of financial ruin, anxiety and self-doubt. The way Brenner described it, he managed to cut himself an exceedingly poor deal in selling Max Brenner that left with him with a negligible 3.5% equity stake, he became less and less influential and engaged, and eventually won permission to tinker with a new concept – that Little Brown store – until, fairly abruptly, he was told he didn’t have permission after all. He was served with legal papers and found himself ousted from both enterprises, broke and stuck with a five-year non-compete. (Strauss didn’t comment.)

What’s remarkable about the interview is how open Brenner is about his reasons for selling (financial stress, but exhaustion too), his steadily diminishing role and progressive alienation within the operation, and his desperate need to create something new. After his ouster, the ebullient entrepreneur who’d been a constant presence on TV was borrowing from friends to stay afloat in a small house in New Jersey, seemingly a continent away from the glamorous Manhattan lifestyle he’d enjoyed. His description of the human toll is wrenching and makes the story well worth reading. A few entrepreneurs, such as Zico Coconut Water’s Mark Rampolla in his memoir titled High-Hanging Fruit, have flicked at the human toll entrepreneurship can take. But not like this.

As interesting, to me, though, was Brenner’s take on entrepreneurs trying to work in a corporate environment, a frequent enough occurrence in beverages as startups accept investments from strategics or sell outright to them. His conclusion: “It’s almost like an impossible marriage . . . Usually, an entrepreneur is a very impulsive, gut-instinct person. He has crazy passion, like a fire. He wants to do things, he wants to see them happen right now. The corporate process is extremely different. It’s, ‘Let’s think about it, analytics, who told you this is true? Why this packaging? Why these colors? Why are you changing the brand language?’ It’s endless. When you say, ‘Let’s try to sell in Japan,’ it’s, ‘Why Japan? Who told you it’s a market?’ But the Japanese love dark chocolate! ‘How do you know, show us research. Why do you think this is the way?’” The consultants they bring in to figure it out only make things worse. Entrepreneurs and consultants “are like oil and water. I mean, they cannot work together.”

(Journalists like me may, of course, find it easier to understand this disconnect because it’s a key element of our own careers: the very qualities that lead many of us into the trade – short attention spans, disdain for authority figures – make us supremely unsuited to becoming middle managers, which, when you think about it, is really what being promoted to an editor entails.)

So is it possible for an entrepreneur to thrive within the corporate colossus that just acquired your company? Surveying our beverage space, I can think of very few who have, which makes me think Brenner is right. The one who comes to my mind is Honest Tea co-founder Seth Goldman. He seems like the kind of guy with a high emotional IQ, if you believe that concept. Even-keeled, good-humored, able to mingle easily with the adults in Atlanta who’d bought his little contraption of a company. Ready to defend his organic cred to the death, but pragmatic about how many of his delicious flavors the typical Coke bottler would find room for on the truck (hardly any). Though he’s never confided any frustrations to me, it couldn’t have been easy: I recall how disconcerted he was when Honest Tea, of all brands, found itself in the crosshairs of a nascent consumer boycott because parent Coca-Cola had been found to be spending millions to oppose mandatory labeling of genetically engineered foods. Goldman stayed in a hands-on role for several years after the purchase, maintaining some semblance of innovation and creativity that seems to have entirely fled the brand now that he’s gone.

But he’s the rare exception. Most entrepreneurs quickly wear out their welcome at their new corporate home, often exiting before the announced transition period was to end. The bottom line for those who actually want to continue to operate their creation? If you’re struggling, and that’s the only lifeline you’re getting thrown, by all means pursue the strategic exit, on the best terms you can bluff your way to. But don’t have any illusions that it will be a smooth or enjoyable ride, even given the best intentions on the acquirer’s side. Surround yourself with Sherpas who can navigate the system, as Body Armor’s Mike Repole has done at Coca-Cola with his recruitment of Brent Hastie or Super Coffee has done at Anheuser-Busch with its hiring of Sanjiv Chhatwal. But brace yourself for the inevitable cultural collisions. And console yourself that sometime in the future – quite likely before you expect it! – you’ll be enjoying the heady rush of your next venture.

As for Brenner, well, there he was at Expo West, eyes sparkling, heralding Blue Stripes’ entry into the CPG sector with a line of cacao smoothies, bars and other items that will be getting onboarded nationally at Whole Foods by the time you read this. His fundamental optimism seemed fully restored. That personal hell after being ousted? “Give it all the room and time it needs,” Brenner told Entrepreneur. “Feel sorry for yourself, be angry. But use this period to build you for the next stage in your life, which can be unbelievable. If you are creative, if you are a true entrepreneur, you will be able to come back and do it again, and the next thing will be better.”

Longtime beverage-watcher Gerry Khermouch is executive editor of Beverage Business Insights, a twice-weekly e-newsletter covering the nonalcoholic beverage sector.