Under New CEO, Talking Rain Charts Path to Growth

When Chris Hall was appointed CEO of Talking Rain in April, the change in leadership marked a shift in the company’s face, but also in its voice.

Hall, who has been with Talking Rain since 2007 and most recently served as COO, told BevNET last week that, over his first six months as CEO, the company has focused on reinvigorating both its marketing and its product development capabilities to better speak to millennials and to properly capitalize on the outreach opportunities provided by social media. Taking over from interim CEO Marcus Smith, who is currently serving as president, Hall has overseen an internal restructuring of the executive team, signed new marketing partnerships, and calibrated the company’s product development pipeline toward natural and functional innovations.

Once a small regional player in the Pacific Northwest, the company has grown its sales more than 6,000 percent since 2010 and has become one of the top-selling sparkling water brands nationwide. This year, the company reported record sales numbers in June, July, and August, moving more than 15 million cases of Sparkling Ice nationwide. The company also launched a rebranded bottle label that emphasizes the brand name and reformulated the core line to include natural coloring and flavors.

Hall attributed the sales milestone to the brand’s marketing partners. In August, Talking Rain expanded its relationship with Epsilon, naming the Alliance Data-owned customer marketing company the integrated agency of record for Sparkling Ice.

“The first thing is you’ve got to recognize that there’s certain things we’re good at and there’s certain things we need help with,” Hall said. “So we’ve partnered with the best of the best agencies. 5WPR being our PR agency, Epsilon for our brand, and then Bread n Butter for our digital media agency. The combination of all three of them together is really what helped us catch up our marketing tactics to present day tactics, with a heavy, heavy focus on ultra-targeted digital media.”

In February 2017, under then-CEO Kevin Klock, the company announced a $37 million integrated marketing effort which focused on television advertisements and enlisted Seattle-based creative agency Wexley School for Girls. The new campaigns, however, saw a pivot toward digital media, including a Mystery Flavor contest that was promoted through a series of YouTube videos featuring “enthusiastic summer intern” characters.

According to Hall, the summer campaign prompted consumers to interact with the brand through social media and the Mystery Flavor contest brought in more than 245,000 entries. The success of the campaign has also inspired the brand to add more limited time offering SKUS, with plans to launch two-per-year going forward.

The digital strategy, Hall said, has grown the brand’s base by more than 2 million new consumers. Where the brand has previously relied on in-store displays and field marketing, it now is rapidly reaching younger demographics that were previously untouched. The move to natural flavorings has also given Sparkling Ice an extra leg-up with younger consumers, who are increasingly wary of additives and artificial ingredients.

The promotion came as the company refocused its channel strategy, developing new caffeinated products for the convenience channel. Recognizing that the brand’s “skinny” bottle design was not resonating in the space, Hall said, the company launched Sparkling Ice + Caffeine, packaged in 16 oz. cans and containing antioxidants and vitamins. The line is currently on shelves in a test run throughout the midwest and also the New York metro area.

“It’s showing very positive results,” Hall said. “It’s showing us that we do have a right to play in that channel and provide the right product versus the one-size-fits-all approach with the 17 oz. When we initially launched we took that to every channel, and it’s telling us that we need to have a customized approach to all channels.”

The caffeinated line will see a “purposeful rollout” throughout 2019 in specific accounts and markets, Hall said, with eyes on chains such as QuikTrip, Circle K, and other “main players” across the U.S.

The company’s upcoming innovations, Hall added, will continue to improve the Sparkling Ice brand but will also introduce some experimentation, testing “whether we have the right to play in different categories.”

Talking Rain also remains in the testing phase of its partnership with India-based Tata Global Beverages, with which it signed a distribution agreement in August 2017 to sell Himalayan mineral water in the U.S. Hall said the brand is currently available in Chicago and is preparing for rollout in Ralph’s stores in Southern California. The partnership will make use of Talking Rain’s direct-store-distribution network of more than 300 distributors nationwide and give the company a stake in the premium water category.

Hall’s tenure as CEO has also seen executive restructuring through internal promotions. This month, the company announced it has promoted former Director of Marketing Sarah Gustat to VP of Marketing.

“What Sarah brings is an innovative, fast-moving marketing mindset and driving that business to jumpstart our tactics and get up to speed,” Hall said. “Over the last six to eight months with her in a leadership role, she’s really been one of the main drivers toward us being ultra-targeted on the digital side. She’s been a breath of fresh air and a complete joy to work with.”

The company also appointed former VP of Distribution Ken Sylvia as VP of Sales, who Hall said began with the company as a sales representative about eight years ago and worked his way up the ladder holding “just about every role in the sale department.” Hall said his in-depth knowledge of distribution channels was one of the reasons behind Sparkling Ice’s strong summer performance.

At a time where Talking Rain continues to expand, the company also had to handle the fallout of a sexual harassment scandal that came to light in October 2017. The company was sued by former sales operation manager Alisha Copeland, who in a court filing accused former-CEO Kevin Klock of sexual assault during a business meeting on March 1 of that year. Although Klock resigned just over a week after the alleged incident occurred, Copeland claims she later experienced retaliation at the company. According to Talking Rain the case was dismissed after a mutual agreement was reached this month. Copeland’s lawyer was unavailable for comment.

Hall defended the company’s workplace culture, but noted that since Klock’s resignation the company has had employees undergo additional training and has held conversations to discuss what happened.

“I want to make sure everybody understands that there’s always been a fair and equitable workplace here, and when that accusation was brought up it was handled immediately and addressed correctly from the beginning,” Hall said. “We’re a very transparent organization, so we were very open with the company on what happened. So it’s just moving forward and creating the culture that we’ve cultivated that it’s not acceptable.”

And it’s with the company’s culture and team that Hall said Talking Rain will continue to grow.

“One-hundred percent the reason for our success this summer has been having the right people in the right place with the right direction,” he said. “The passion and the commitment the team has shown is what has delivered our success. That’s what is driving our company right now, is our team.”