BevNET Live Winter 2018 Day 2 Recap: Changing the System

The second day of BevNET Live Winter 2018 explored shifts in the modern beverage landscape by taking a deep dive into raw data, sharing personal insights from investors and entrepreneurs, and drawing lessons from case studies.

Andrew Henkel, senior Vice President of brand growth solutions at market research firm SPINS, began the day’s program with a look into data and analytics, specifically focusing on how independent brands are driving beverage across all retail channels. He highlighted how natural positioned beverages, such as GT’s Kombucha and La Croix, have grown 9.6 percent over the past year to reach $12 billion in sales. Within that space, even as the largest companies are growing at the rate of the market, natural products are still just a small portion of the Big CPG portfolios, representing less than 10 percent.

Henkel spoke about how changes in consumption, choice and capital have created a dynamic new marketplace in which consumers are offered a wide range of drinks, each with different use occasions, that they can incorporate into their daily habits. By focusing on execution and uniqueness, he advised young brands to “turn smart capital into smart spend” and not to indulge in expensive cost drainers with limited returns, pointing to BevNET Best of 2018 “Rising Star” award winner Ripple Foods as a positive growth example to follow.

Following Henkel, Guayaki co-founder David Karr spoke about how the yerba mate brand has integrated a “regenerative mentality” across the company’s entire business. Karr and Lee detailed how the company’s self-distribution platform, the Yerba Mate Co., has evolved over the last 24 months, during which it has started the process of making its delivery fleet completely electric. They also spoke about their commitment to creating what they called a “legion of the system affected” by setting the goal of hiring 10,000 formerly incarcerated people over the next decade.

The day’s third discussion explored how Good Karma, a maker of non-dairy flaxmilk products, came to partner with the largest dairy company in the U.S. in Dean Foods. Good Karma president and CEO Doug Radi; Sharon Kieffer, managing partner at 2x Consumer Products Growth Partners; and Alex Jacobs, VP of corporate development strategy at Dean Foods, discussed where the two entities found common ground during a critical point in Good Karma’s development, when the combination of rapid brand growth and an increasingly competitive marketplace required Radi to make an important decision for the future of his brand.

Following a discussion that began at BevNET Live Summer 2018, the next panel examined the past and current beverage landscape from a female perspective. Sharelle Klaus, founder and CEO of DRY Soda, noted that, despite some progress, the industry still faces an uphill struggle against sexist attitudes from a bygone era.

“I thought when my daughters were born that we would be past this,” she said, adding that the difference now is she is more comfortable raising her voice about issues of concern.

However, the panel also sought solutions to affect gradual change on entrenched, systemic problems. REBBL CEO Sheryl O’Laughlin emphasized the importance of not simply recruiting more women and minorities into the industry but actually changing the status quo by making women more comfortable to share their voice. Vanessa Walker, founder of Millennial Brands, echoed that sentiment and noted the importance of expanding the types of roles that women can play.

“Because you are female doesn’t mean you can only be in marketing,” she said.

Next on the main stage, Alicia LeBeouf, senior Vice President of marketing and communications for The Compass Group, gave a virtual guided tour of the modern office break room. As the largest food service provider in the world, Compass is at the forefront of funneling the next generation of beverages into the vending machines and free product pantries at some of the world’s largest corporations. She noted that brands with a strong on-trend health and wellness appeal were enjoying strong traction, and encouraged brands to not be afraid to pitch the company by sending them product samples.

On the topic of startup brands, L.A. Libations marked a decade in business this year, and the team behind the Coke-affiliated beverage accelerator reflected on the journey thus far in a panel discussion with BevNET editor-in-chief Jeff Klineman. The group’s three co-founders — Pat Bolden, Danny Stepper and Dino Sarti — shared some of the lessons they’ve learned over the last ten years. Both Bolden and Stepper noted that while capital is an important piece of the puzzle, the most critical component of a successful brand is the commitment required to stay true to the vision of the brand even as challenges arise.

With the amount of investment capital currently flowing through the beverage industry, how and with who entrepreneurs choose to partner with can make or break a young company. Sheryl O’Laughlin returned to the stage with Duane Primozich, co-founder and managing partner of BIGR Ventures, to discuss how they’ve built a successful relationship as CEO and board member.

The final main stage presentation of BevNET Live Winter 2018 featured Nick Giannuzzi, founder of The Giannuzzi Group, giving attendees a crash course on investment, providing insight to when to raise money, when to consider a sale, and how to forecast the market. As brands consider those choices, Giannuzzi emphasized that “getting the right partner is more important than getting the right valuation”