Hot on the heels of the semifinals of the 11th version of the New Beverage Showdown, day one of BevNET Live at New York City’s Metropolitan West took a hard look at the plight of the entrepreneur and some of the conditions that enable founders to achieve success in the beverage business.
Rohan Oza and Brett Thomas of CAVU Venture Partners, a recently launched food and beverage fund that’s invested in the likes of Bai, Health-Ade, High Brew and WTRMLN WTR sat down with BevNET Editor in Chief Jeff Klineman to discuss some of the keys to growth.
“First of all, they need money,” said Oza, the former chief marketing officer at vitaminwater when asked what all founders require for success. “The biggest mistake some founders make is trying to raise too little because they’re fearful of dilution. But it’s better to own 20 percent of a $1 billion- company than it is to own 80 percent of a $5 million company that’s headed to bankruptcy.”
“The challenge is always trying to find the perfect sweet spot where the entrepreneurs are OK with the dilution and managing that versus handcuffing them with not enough capital,” added Thomas. “Fundraising is very time consuming, so to be able to raise enough earlier on will prevent you from having to go back out four months later if you run out of capital. Especially in beverage, it takes a lot of money.”
Klineman was next joined on the BevNET Live couch by Sheryl O’Loughlin, current CEO of San Francisco-based beverage brand REBBL. In a discussion on navigating companies through various stages of growth while maintaining their core values, O’Loughlin spoke not only on her recent experience at REBBL, but also looked back at her time as CEO of Clif Bar, where she took the company from $100 million to $200 million in revenue.
Also taking a trip down memory lane was First Beverage Group managing director Tom First, whose presentation on “The Evolving Challenge Set Facing Beverage Innovators” saw him compare his early days in the beverage industry as a co-founder of Nantucket Nectars to today’s current state of affairs.
“The next 10 years are going to be even more dynamic than the last 10 years,” First told the audience of entrepreneurs. “Founders are smarter than ever and they need to be. I’d love to say I built Nantucket Nectars with Tom in as challenging a time as you guys are in today, but that’s not true. All the same challenges existed but they were less intense than they ever were before. But it’s a great time to be in this industry.”
Celebrity trainer and entrepreneur Jillian Michaels would take the stage next, alongside business partner Giancarlo Cherisch, with whom Michaels acquired a controlling stake in Las Vegas-based Lucky Jack Coffee at the top of 2016. Together, the two took on the topic of consumer lifestyle trends and influencer adoption, and the keys to introducing beverage brands to the fitness and wellness community she made a name for herself in.
Following the lunch break, Brian Ross (chief innovation officer at Made in Nature), Jordan Silbert (founder and CEO of @ Drinks) and John Maggiore (founder of Maggiore Sales & Marketing) explored the intricacies of the center store grocery environment and how brands can find success and drive revenue in this lower-traffic section of the store.
“Everyone wants to be in the cold-case but ultimately to win you want to be in the center store,” said Maggiore. “It creates more buying opportunities. In the cold case people are buying it for immediate consumption, they rarely buy it to bring home and put it in the pantry. So the center store is where they’re going to buy multiple units.”
Following a presentation from Jesse Lyon, partner at Davis Wright Tremaine LLP on the impact of law on growing beverage businesses, BevNET founder and CEO John Craven led a four-headed panel on brand evolution and revolution, exploring Chameleon Cold Brew’s recent rebrand, and Dry Soda. Co’s transition to becoming DRY Sparkling.
“As the [craft soda] category began to get a little traction and new players came in, craft soda went from this very refined palate to big, punch-you-in-the face gigantic soda,” said David Lemley, president and creative director of Retail Voodoo, who led the Dry Sparkling name change. “That was confusing our core customers and creating more confusion amongst the people we decided were our customers-to-be. Changing the vocabulary from Dry Soda to Dry Sparkling clarified the category.”
Next, in a sit-down with BevNET managing editor Ray Latif, Todd Carmichael, the founder of La Colombe Coffee Roasters, discussed how his coffeehouse company is looking to leverage its existing strengths in brewing and blending to take the brand into the ready-to-drink beverage segment and earn the “love” of a wider set of consumers.
“We’re not competing for the dollars of the clients against the guy next door, we’re competing for [consumers’] love, their attention,” Carmichael said. “When you get that, you’ve got a customer. So when I’m asked who our closest competitor is, I never say The Green Mermaid or Caribou Coffee, I say Apple. I say Nike. Companies who have earned that space in the consumer mind.”
Closing out Day One was Bill Weiland, founder of Presence Marketing, who identified HPP juice, cold brew coffee, bone broth and, especially, bitters, in his predictions on “Bankable Trends in Beverage.” Slightly less bankable but still on his “watchlist” Weiland included maple waters, cactus waters, and beverages featuring matcha, algae, and mushrooms.
Weiland arranged for all the attendees to leave with a small bottle of Underberg, a brand of bitters said to aid digestion. It was a welcome digestif for many — there had, it was true, already been much to chew on and digest.