00:00:00:00 - 00:00:27:19

Unknown

Hey, what's up everyone? Today we're going to be speaking with Steven vigilante from Ali Pop. He's their director of growth. He was also their first employee. And a big contributing factor from taking Ali Pop to pre-launch to over $200 million in revenue last year. We spent about an hour talking to Steven about Tick Tock, Amazon out of home, all of the different growth strategies that is propelling the brand to basically encroach on Pepsi and Coke's market share today.

00:00:27:21 - 00:00:37:13

Unknown

If you like the episode, subscribe down below and stay tuned for more content. Hope you enjoyed!

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Unknown

Dude, it's great to catch up with you though. It's been a little while. Ali Pop has done a ton of things. You're obviously on the founding team at Ali Pop. I'm excited to talk to you today. Talk through growth. I was just in Miami. I saw all of the out of home stuff that you're doing there.

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Unknown

It's actually Lexi who's producing the podcast. She lives in Miami, too. Lexi, I'm sure you've seen a lot of the out of home stuff that Ali pops running all over Brickell. We're going to we're doing a marketing offsite down there next week. I haven't seen any of our billboards in person yet cuz we did Chicago in October. And we have four more cities we're doing this year, so I'm pumped.

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Unknown

It's it's cool. They look really good. The creative is awesome. So creative is great. What, what? I want to talk to you about today is like, kind of how your perspective on growth has changed as the business has expanded into different sort of retailers. It's kind of grown out of, you know, the original grass roots strategies that you guys had and you know how you've adapted to that.

00:01:34:07 - 00:01:54:01

Unknown

Give us a quick update on like where Ali Pop is today just to kind of center the conversation and then we can kind of move from there. Yeah, business grew. You know, two years ago, 30 million last year or two years ago, 30 million a year ago, 73 million. Then we just finished it right around 200 for, 2023.

00:01:54:01 - 00:02:13:24

Unknown

And by our research and estimation, it's the fastest growing beverage company in America and the most revenue any beverage brand has done in that, in the footprint that we're in. So a lot of, you know, most of the brands in the last decade have hit like 200 million in sales, have been in 60 to 80,000 stores. We did it in 28,000.

00:02:14:01 - 00:02:38:03

Unknown

And so our kind of efficiency and velocity per account is, you know, has never as a, as by my estimation, has never happened before. And, you know, it's been wild and I still think we're just scratching the surface. We've got like 10% household penetration, like 18% unaided awareness and, you know, there's still so much whitespace out there.

00:02:38:03 - 00:03:13:20

Unknown

And we're, you know, this year the big push is going to be the club channel, Costco, Sam's and and convenience. So we 30% of soda in the country is bought and sold in the convenience store channel. And you know, for us, it's great that we're doing so well and Whole Foods and Walmart and Target, but to really scale and hit that mass audience and really prove that we can be, a real player on the in the beverage landscape, we've got to show that convenience can can work for us and just describe to us, like your role at at lollipop and how that change over time.

00:03:13:22 - 00:03:37:19

Unknown

Yeah. So I was the first employee, I came from the venture capital world. So I was kind of brought in to do fundraising originally. Had never worked at a beverage startup before. And, I've kind of got this, like, head of growth role. I feel like I'm the tip of the spear, pushing the business in new directions every year and kind of helping thread the needle between sales and marketing to make sure the marketing efforts are really driving the sales initiatives of the business.

00:03:37:19 - 00:04:03:24

Unknown

And, I think every business needs good connectivity between sales and marketing. I think a lot of businesses actually fail at that. And so, I've overseen everything. I think like that a lot of people have seen out in the world, whether it's when we launched E-Com a couple of years ago, right before Covid, and then got into the world of influencer marketing, podcast advertising, and then the world of celebrity, I brought Camila in as an investor and helped kind of architect that deal.

00:04:03:24 - 00:04:24:23

Unknown

And the brand campaign we launched with her last year. And then, you know, we leaned in really heavily on TikTok. Two years ago, I launched that for us, and still kind of oversee it. And then the last 18 months have been really pushing us into what I would call channels that have been really historically owned by legacy soda brands and have been impossible to reach for better for you brands.

00:04:24:23 - 00:04:46:17

Unknown

So that's, you know, sports venues fast casual restaurants, the music industry kind of broadly. And so, I don't know, I almost kind of view myself as like director of culture to some extent. Like just looking where the world is going and where we need to go as a business and how we continue to reach new audiences and authentic ways, and then who the right partners are to help us tell those stories in these different channels.

00:04:46:17 - 00:05:09:19

Unknown

So, you know, Director of Growth and what sort of is the role? But it's ever evolving every every six months. Yeah. I mean, so basically, you know, all these pops been on this crazy growth trajectory, some of the fastest sales velocity in recent history in the United States. And you're basically leveraging marketing to help guide and accelerate those sorts of sales initiatives.

00:05:09:21 - 00:05:34:22

Unknown

I'm just curious, coming from the investing world, how did that shape your view of like, the sorts of marketing activities that Alibaba should be doing? You guys have been a market leader in a lot of different avenues. I would say you guys have definitely like owned TikTok as a channel and done really well. There. And now you're doing more of the traditional out of home type initiatives that, Coca-Cola or perhaps you would do.

00:05:34:24 - 00:05:56:24

Unknown

Yeah. How how is your kind of perspective changing as you guys have grown? Yeah. So to the first question on the kind of investing background. So I worked at a seed fund investing and better for you consumer. So I was meeting with, you know, 20 to 30 entrepreneurs a week for three years. I was at every trade show and I was just like a sponge, honestly, for like how the successful brands were growing and what they were doing.

00:05:56:24 - 00:06:18:02

Unknown

And then, you know, I also saw a lot of brands that like, grew really fast, 20 or 30 million of revenue at Whole Foods, and then made the jump to Target and Walmart and fizzled out. And I think a lot of brands, you know, fall victim to that. A lot of better for you brands just from a price or a taste perspective or just a communications and marketing perspective, like can't reach that mainstream audience.

00:06:18:04 - 00:06:38:19

Unknown

And, you know, we had this inflection point in 2022 where we launched, you know, we were nationwide at Whole Foods, Sprouts and like half the Kroger's. But we were in Q1 of 2022, we launched target and then Publix and then H-e-b and then Walmart. Almost all doors for all of them. So jumped from like 8000 to 20,000 accounts within a six month period.

00:06:38:19 - 00:07:05:16

Unknown

And it was really scary. To be honest. I wasn't sure if we were ready for that consumer yet. And you know, serendipitously, we had like just over into TikTok at the time. And, I think personally, TikTok is what has really helped us in those channels. Like, we kind of shifted away from your what I would call typical influencer marketing, which is skews New York, LA, Miami, the wellness kind of crowd discount code.

00:07:05:16 - 00:07:27:15

Unknown

Swipe up, buy this now and then. When we went so looking at TikTok, I was like, you can't really do that type of advertising on TikTok. The super salesy stuff doesn't work. Discount codes don't work at all on TikTok. And we kind of found this lane of like, unhealthy foodies, is what I would call it, where, you know, creators who are, you know, generally 18 to 24 live in random parts of the country.

00:07:27:15 - 00:07:47:12

Unknown

They're not in many major cities, and they're shopping at Walmart and Publix and Target, and they're doing mock things and fast food reviews and grocery hauls. And, you know, my whole strategy with that was like, I don't want an ad from you. I want to sponsor your content. So I want to just show up in your normal videos because you're making content that we want to align with.

00:07:47:12 - 00:08:02:10

Unknown

Like we like pairing lollipop with unhealthy food. It kind of it makes a connection that you know, viewers had that like, this isn't just a health product, right? It is a health product, but we view it as a soda and like a product that tastes like a soda and acts like a soda and has a full flavor experience.

00:08:02:10 - 00:08:22:15

Unknown

And so pairing it with like, less healthy people is actually part of the strategy. And it's, you know, we've done 2 billion views on those type of videos across TikTok, Instagram and Facebook in the last two years. And, you know, I think the velocities at Target and Walmart kind of speak for themselves at this point. It seemingly has worked very well for us.

00:08:22:15 - 00:08:45:17

Unknown

And so, you know, just growing the brand up and trying to reach a broader audience than just that kind of a health and wellness focused label reader at, at Whole Foods. Okay. And you would attribute a lot of that success and your success moving into retail to how you guys approach TikTok as a channel, can you just touch on how important you think that that channel is for consumer brands and CPG?

00:08:45:23 - 00:09:07:05

Unknown

It's it's all critical. Yeah, it's it's actually wild to see how correlated TikTok views are to Google search traffic. It's it's it's actually insane. It's almost a perfect correlation. Like a month where we have, you know, someone's video, 50 million views on TikTok. We've had months. We do 250 million views. Average month is like 100 million. Call out.

00:09:07:05 - 00:09:29:18

Unknown

And the Google search traffic moves directly in lockstep. And to me personally, I think Google search is the best. Especially organic search is the best measure of just like overall brand awareness. And it's where the journey starts, right? They see it on TikTok, they search for the product and they'll learn a little bit about it online, and then hopefully they go into a store and pick it up, or they're shopping in the aisles and like, oh, that's a thing I've seen on on TikTok.

00:09:29:18 - 00:09:45:08

Unknown

And, you know, we had a period of time last year where we like cut back spend on TikTok, and we were doing some other things and it was, you know, it was it's very clearly correlated to me. And, you know, for us, it's like TikTok seems very good for top of funnel, but we're not doing a lot of storytelling on there.

00:09:45:08 - 00:10:07:04

Unknown

It's really product placement, just like showing up in videos and, you know, a hashtag using a hashtag in the comments. But where we're kind of moving to this year and where we started to do some last year was a lot more of the like middle of the funnel consideration, more brand building storytelling stuff with creators where they're actually talking about the product and talking about how good it tastes and, you know, doing blind taste tests with their partner at home or whatever.

00:10:07:04 - 00:10:31:08

Unknown

And so, you know, I think we have a lot of people have seen it online, but like, don't necessarily know how good it tastes or that there's all these functional benefits. And so I see this big opportunity for us in the middle of the funnel to work with people in a bit more deeper way, whether it's an influencer, a music artist or an athlete and actually, like, tell the pop story a little bit more and get the point across that it does taste good, because I think there's this inherent skepticism with consumers that they see something all over the internet.

00:10:31:08 - 00:10:47:07

Unknown

There's lots of marketing, like they feel like they're being sold to maybe. And, there's also an inherent skepticism around low sugar drinks. Right. I think a lot of low sugar drinks don't taste great or make all these promises about the benefits or what it's doing for you and, you know, don't necessarily deliver on it. And the products are always higher price.

00:10:47:07 - 00:11:01:21

Unknown

So you have this like hurdle. And for us the hurdle is getting people to try it. And so, you know, we're going to lean in pretty heavily in that like middle of the funnel bucket this year. That's smart that I think logically that makes a lot of sense. So when you first approached TikTok, the strategy was just like volume.

00:11:01:21 - 00:11:26:00

Unknown

Like let's just get this can into as many hands as possible and so people can see it. It was like brand affinity, brand awareness. So how did you architect part of it? Honestly. But my initial thinking was like, you can do all you want on creators pages, but people don't leave the app. So if they click through to your brand and they come to your brand account and they see terrible content or no content, in some cases you lose them, right?

00:11:26:00 - 00:11:50:04

Unknown

And so we had to figure out the organic stuff on our page first, and that was like a six month journey. And I'd met this girl, Sara Crain, you know, she was doing stuff on TikTok and I was trying to find someone with like, you know, 5 to 15,000 followers posting constantly. Maybe not a full time thing, but they were in platform a lot and really understood the lingo and the trends and the audios and, you know, it was very serendipitous.

00:11:50:07 - 00:12:03:15

Unknown

I like commented on one of her videos on the Ipob account and it blew up and reached out to her, and she had a bunch of good ideas for content for our page. And turned out she worked at an agency that did TikTok content for other CPG brands. So I was like, kind of found a needle in a haystack.

00:12:03:17 - 00:12:21:14

Unknown

And so brought her in and she started making content for our page. And then actually, another creator we were working with, his sister was just graduating college, and she was making TikToks, and she sent me some videos for us, and they were great. So we brought her on as well. And so we had to get our page dialed in before we really leaned into the creator stuff, because it all works in a circle, right?

00:12:21:14 - 00:12:47:05

Unknown

It's like, and we get all comments a lot like when a big creator video pops off, we'll get comments on our page, like came from Kayla's video, came from Mia's video. And like, if your content's not good, they're not going to stick around, right? So having that full kind of loop in there where our content page is good and funny and educational and relevant, and then, you know, we have this kind of always on creator network posting lollipop constantly and it all kind of works together.

00:12:47:10 - 00:13:06:09

Unknown

Okay, cool. So just walking that back in terms of how you architect it, architected it. It's like you start with basically creating your own page that, you know, actually has good content. It plays in the space, then you actually go out for they're not even affiliates, it's just other creators who want to engage and, you know, create other content for the brand.

00:13:06:15 - 00:13:27:05

Unknown

And now you're getting to a place where the next layer is storytelling. And are those paid? Are those paid engagements? How are you thinking through like budget for TikTok, for the brand and for you? Do you consider TikTok like a level of performance marketing for all people? So the creators, we're constantly posting iPod, we do pay. Yeah.

00:13:27:07 - 00:13:46:08

Unknown

We always include the iPod partner hashtag in there. So, you know, we meet the, legal guidelines. I can tell you that because we're just doing product placement instead of, like a scripted ad, it is much more cost efficient for us. Like, I'll get five product placements for the cost of what one ad would cost, because it's not they're not doing anything different.

00:13:46:08 - 00:14:02:24

Unknown

It's like they're able to make money on a video they were going to post anyway, basically just by including us in it. So it's kind of a win win for both sides. And I, I don't actually view it as, I think what your audience would consider a performance channel or not ever running any messaging towards our site or by this.

00:14:02:24 - 00:14:25:02

Unknown

Now we're doing plenty of mentioning of where we are in retail. So it's maybe a retail performance channel, I guess. But I view it more as like an awareness, like we, I measure TikTok every month based on what we're spending and how many views and impressions we're driving. So it's really like a CPM channel for me. In those 2 billion views we've done have been a sub dollar CPM, which like really blows people's mind.

00:14:25:02 - 00:14:44:06

Unknown

Like we do it very efficiently. And, and you have scale too, which is crazy. Yeah. It could be a lot bigger, to be honest. I think we're we spend a decent amount, but it's a lot less than I think people would, would, imagine it is based on like, what I know about what other brands who are smaller than us spend on Facebook every month trying to acquire customers.

00:14:44:06 - 00:15:09:23

Unknown

We're spending a fraction of that. We're we're not. Do you guys spend or do you spend it all, any more on, meta or any traditional digital acquisition channels like paid social? Yeah, we we do. I did an ad age interview like a year ago where I kind of said we had shut down every other channel and gone all in on TikTok, and we had for a period of time, but we brought in, like a legit media director, Sarah, who's awesome.

00:15:10:00 - 00:15:34:02

Unknown

And she kind of owns all things paid social out of home TV, YouTube. And you know, we there's obviously we're doing Google. We do a lot of boosting of stuff on TikTok and Instagram. We do some like geofence paid around retailer launches in specific markets. We're trying to focus on as well as these like what's is right, we have at home, we're doing in Miami right now, so we're doing some paid down there.

00:15:34:04 - 00:16:04:13

Unknown

None of it is really driving to the site, to be honest. It's more like 90% of the business is retail at this point. And it's really retail, I mean, is a game. So it's all various forms of paid that help drive, you know, traffic into into stores. So going back to TikTok real quick. So these storytelling initiatives, these are like more traditional creator partnerships where you're actually scripting things out with them or you kind of just placing it, you're kind of just engaging with them and say, hey, come up with the concept, but you need to talk about these certain things.

00:16:04:13 - 00:16:20:02

Unknown

Yeah, we have a lot of buckets. We try to play in there. We've got the people who talk about digestive health and can lean into the functional benefits and the fiber and prebiotics, and then we've got you're more like traditional foodie creators, or we're just talking about food and fast food, and they're talking about how good it tastes.

00:16:20:04 - 00:16:37:22

Unknown

And then, you know, we have this like kind of ever overarching strategy of like at the other day, we are trying to get people to switch off of like traditional soda or diet soda. And so we're always looking for creators who maybe talk about their love for that product and getting them to switch to ally Pop. And so there's a there's a number of different, variables.

00:16:37:22 - 00:16:59:24

Unknown

And then I've, we have a guy internally who manages kind of the influencer side of that. And then I kind of focus a bit more on like talent and music artists and athletes and, professional sports teams, and that's like a different type of storytelling. Right. And oftentimes we're doing a production or, you know, if an artist has something in their life that perfectly aligns with one of those buckets we're going after, we'll, you know, kind of try to come up with the concept.

00:16:59:24 - 00:17:15:06

Unknown

We're, about to launch in a big convenience store chain based out of Philadelphia. So we're working with a music artist who's pretty big now, who's based out of Philadelphia, and there's audience way over indexes there. And she's going to make this, like, really cool video featuring the retailer and alley pop and kind of showing love for Philadelphia.

00:17:15:06 - 00:17:32:23

Unknown

So there's like varying degrees of it, but always with the notion of like trying to be as organic to their feet as we can. We often try to work with their creative teams on these things instead of like plugging in our team, because we want it to feel native to their platform. Right. It's got to work on, on their page.

00:17:33:00 - 00:17:47:22

Unknown

I see so many brand deals where it's just like hand in screen and it looks so, so hey, made in forest and it it works. I'm sure it works for, for some brands. I just, I try to keep everything as I don't think people want to be sold to. I just think more so than ever. Are aware of it.

00:17:47:22 - 00:18:01:18

Unknown

And so if you get a good organic partnership, right, people love it. And they like to recognize that it's an ad. But, yeah, we had this baseball player named Alec Vanilla who plays for the he's a pitcher for the Blue Jays, that kind of Cy Young candidate. But he's from Miami. He trains are in the offseason. He's a huge iPod fan.

00:18:01:20 - 00:18:15:16

Unknown

And he actually came to us with this idea like, hey, these billboards like, what if I was, like, walking down the street in Brickell holding a strawberry vanilla? And I started chugging it and the camera panned out and, strawberry vanilla billboards right behind us, I was like, boom, done. We, you know, turn that around in three days.

00:18:15:16 - 00:18:42:15

Unknown

And he shot it and posted it last week, and it was super cool. And there was like tons of good comments on it about about all like pop. And, people liked it. Right? So it's content. It was his idea. It was great. Well, that's a flywheel, I think just on the brand marketing side, where when you kind of really are comfortable in your own skin and who you are as a business, and there are these organic partnerships that really work well because that other person can interpret your brand and then integrate it into the content.

00:18:42:15 - 00:19:11:06

Unknown

It just performs better. I think to your point, the brands that are forcing things people don't want to be sold to anymore, it feels inauthentic. And, you know, that's where you get new brands who are super fast growing because they're, you know, better selling to people. It's why are these like, DTC brands, I think are all running into trouble is like, you know, e-commerce is huge, but the majority of people still shop in-store and, you know, they tap out on their customer acquisition funnel online and then they to go to retail.

00:19:11:06 - 00:19:24:24

Unknown

And it's a completely different game. And they don't know how to play the CPM game. And they've been running so much performance marketing for so long that they never really built a brand, and they were always selling to their lowest hanging fruit, and they weren't hitting those people that are like two and three standard deviations outside of their core customer base.

00:19:24:24 - 00:19:44:02

Unknown

And, you know, that's a tough hill to climb, right? Like, and you really need a brand to win in retail, like it has to, and you know, people that you have to hit 7 or 8 times to get to pick it up. And when all you've been doing is this like performance, marketing, drag, and then you've got to invert the business overnight, it's really hard to do that.

00:19:44:04 - 00:20:09:10

Unknown

And I for sure why a lot of these DK brands don't work in retail. Well, it's a philosophical difference too. Like it's it's just a different school of thought. And I think to your point, yeah, paid media becomes a drug. I was just talking about this the other day. But their idea of, like, brand building is developing a direct response ad that performs well on the channel, and it's scalable, but there's really no depth in that.

00:20:09:12 - 00:20:31:21

Unknown

So there's penetration ads, right? And there's not usually much emotion in them or humor or the things that people really remember. And it's a good way to get people to buy something once, but then it's like, how do you keep them coming back? Even the best direct consumer brands today, I think, you know, ones that we've spoken to on this podcast, like, actually we have Arjun from Joe Louis the next week.

00:20:31:23 - 00:20:50:14

Unknown

Like, you know, it was really like a brand building effort and building Joli. And I think it's very similar to what you were talking about in Scaling lollipops. TikTok. Just like, how do people want to create UGC and just create it for the sake of creating it to create more conversation? That's not that in turn, is driving e-commerce sales.

00:20:50:16 - 00:21:10:01

Unknown

So I couldn't agree more there. I'm curious what your take is on on TikTok shop. Are you guys on it? How do you think about marketplaces? We can I want to talk about Amazon as well. But just since we've been talking about TikTok, how are you guys thinking about TikTok shop? I maybe not if it's relative.

00:21:10:02 - 00:21:33:15

Unknown

I don't have a good insight, but we're on there. I don't know a ton about it. I know it's doing okay for us. We played around on flip and I would say Amazon, something we underinvested in the last couple of years and are aggressively trying to fix that. I think under investing in the place where 45% of online shopping starts was maybe not the smartest move on our side.

00:21:33:15 - 00:21:54:02

Unknown

And it's a combination of a lot going on and not enough resources and all that jazz, but it's something we're putting a lot of focus and attention into this year. Yeah for sure. Amazon's crucial for beverage. Yeah. I'm sure there's so much demand already for your product there too. Yeah. Yeah, there is it's I wish we had put more effort in earlier, but it's okay.

00:21:54:04 - 00:22:09:07

Unknown

We can we can take that. Yeah. I mean, you guys got a lot of irons in the fire. I don't think you're in your word. I don't think you're doing too bad. 300 million plus. Much higher on a run rate perspective. And we only have 110 employees. I think it always surprises people. A lot of brands are size, have 2 or 300 employees.

00:22:09:07 - 00:22:28:09

Unknown

And, you know, we've had a laser focus on, you know, getting to profitability the last 12 months. And that's not par for the course in beverages, as I'm sure you know. So, you know, we've had to make tactical decisions. And I think it's made us a lot more efficient. Like people are always shocked investors when they see our marketing spend and our trade spend.

00:22:28:09 - 00:22:51:07

Unknown

We're actually running a pretty tight ship here. And, you know, now the world has shifted and capital is more scarce, and the strategic are not buying things as early as they used to. Like you have to be able to, you know, not rely on the drug of venture capital to keep the thing alive. So that's been a strategic decision we've made that some of our competitors have not made, and we'll see how it pans out for them.

00:22:51:07 - 00:23:15:03

Unknown

So profitability is a big focus for this year. What else is kind of, on your mind in terms of having another breakout year for Alec? I mean, so we got a couple case studies last year we launched with Sweet Grain. That was kind of our first big, fast casual partner. It's exceeded expectations by three x, I would say based on, you know, what they wanted us to do in there?

00:23:15:05 - 00:23:35:00

Unknown

Both sides. Very happy. We've got we're looking at some really large partnerships in that space that could be very interesting for us. Sports has been interesting to dive into. I did a deal with the Or. We did a deal with the Kansas City women's soccer team last year, which I think some people thought was random, but Hy-Vee is based there, which is like kind of the Wegmans of the Midwest.

00:23:35:00 - 00:23:53:23

Unknown

And, candidly, they had an opening in beverage and, they're building their own stadium that opens in, you know, this upcoming season here in March. And it's the first women's only soccer stadium in the country, actually. So we got in with them last year as a marketing partner because we weren't blocked out yet by a Coke or Pepsi.

00:23:53:23 - 00:24:13:23

Unknown

And we're now grandfathered in to their new stadium that's opening. So it'll be our first, you know, in Stadium distribution opportunity. But that then, you know, opened up the doors for me in the sports world once we announced it, you know, I got flooded with emails and LinkedIn messages from other sports teams, and most have a Coke or Pepsi contract that precludes us from working with them.

00:24:13:23 - 00:24:34:23

Unknown

But I found two others that do not. And I can't say exactly who they are yet because we haven't announced it, but they're major, and they are to mean massive wins for the business and will really help us tell this story that I pop is is a player in the sport space. And as more Coke and Pepsi deals, you know, come you know most of those deals are 3 to 5 years.

00:24:34:23 - 00:24:52:18

Unknown

So once something expires or is expiring, we have an opportunity to kind of get in there. And so, you know, that we're going to make a lot of noise in that space. I will tell you this year, and then music. So Camila was obviously our first iteration there. We've got a number of music artists on our cap table.

00:24:52:18 - 00:25:09:09

Unknown

You know, I've gotten to know the record labels really well. I've got a better understanding of just how the music industry works. It's very convoluted and complicated, but we're going to lean in pretty hard in the country space. Actually, this year we're sponsoring a big country music artist who's going on tour. In a few months. I'm really excited about that.

00:25:09:09 - 00:25:27:22

Unknown

It's totally new and different for us, and it's a whole creative challenge. But, and then we've got kind of just like up and coming Gen Z country artists. We're working on something else. So New World for me, I'm not a country fan, but I, I'm learning my way through it and I think it's going to be an awesome new audience for us.

00:25:27:24 - 00:25:48:02

Unknown

You have any frameworks for this, Steve? Because, you know, since I've known you two, you've always been pushing the envelope in terms of like what the business should be doing from a marketing perspective without like, you know, necessarily knowing how it's going to perform, you're taking risks. So I'm just curious if you use anything to kind of guide you in that decision making process.

00:25:48:04 - 00:26:09:07

Unknown

Yeah, actually, somebody asked me that question the other day and I kind of put some thought into it. I feel like there's like, call it the Coke and Pepsi partners out there that are like the, the thing that's the biggest thing right now and is the top dollar thing you can do and has the, you know, chance of moving the needle a lot, but also is a huge, expensive bet for a brand like us.

00:26:09:07 - 00:26:28:15

Unknown

And, you know, would chew up like most of our budget we have for talent. And that's like I'm talking about celebrities that are like 3 to 5 million plus dollars to work with. And I'm kind of looking for the next big thing, whether it's in NASCAR or in music or in, you know, even in sports. Right? Soccer is having a moment right now.

00:26:28:15 - 00:26:45:17

Unknown

And it's it's really grown, both men's and women's. And, you know, we can't really afford to do a deal with like an NFL team, to be honest. And I don't think it would make sense for us dollars and cents wise. But soccer is exploding and World Cups coming here in two years. And we've got, you know, Messi's first full season.

00:26:45:17 - 00:27:14:04

Unknown

And you know I'm looking for the next big thing. Right? I want the artist who's got an awesome, you know, kind of niche community right now that loves them within their circle but is not a household name yet and candidly, is someone that we can afford and do something really interesting with at a price point that doesn't break us, but is not so big that they've got like a huge team around them already and, you know, is going to cost a zillion dollars even just to get to a shoot and all those things.

00:27:14:04 - 00:27:38:00

Unknown

So I'm kind of like, it sounds really basic, I guess, but like, I'm looking for there's like the Coke and Pepsi have like, crazy leverage. Yeah, like pop deals. It's like I always try to frame my views as like, what's the pop pop pop on this, right? And even like I've noticed obviously in the last five years, I'm sure, you know, there's lots of brands who copy things we do and we've done things and other brands do them.

00:27:38:00 - 00:27:58:11

Unknown

And, you know, I'll talk about something in the media and on social and be it people, I run that direction that I'm looking at the next big thing. So it's like, or I'm thinking about what's something unique that people can't copy. Or it would take six more months for them to copy. And, even our TikTok strategy, I was very vocal about a year ago, and I've seen a lot of brands try to emulate that.

00:27:58:11 - 00:28:15:18

Unknown

And it were, you know, obviously diversifying away from that. We ran our first big TV campaign with Kamala last year that performed really well. So we are definitely going to have a very balanced approach to, to the to the to the plan this year. So you mentioned Coke and Pepsi. They're obviously the two major players in this space.

00:28:15:21 - 00:28:34:21

Unknown

How has your relationship with them changed as you guys have like grown and become a major player in the in the soda space? And I think when you first started, you kind of shied away from being soda from a messaging perspective. And now it's like, nah, we're we are soda. We're coming to to take, you know, to eat your lunch basically.

00:28:34:23 - 00:28:54:18

Unknown

Yeah. We I mean, we launched as like the packaging side sparkling tonic because we didn't think people at like Erewhon and Whole Foods would pick something up that said soda on it, it was very quickly apparent that that was not the right messaging because it didn't. It doesn't mean anything to anyone. And if anything, it sounds like bitter or gross, like, what is this sparkling tonic meaning?

00:28:54:18 - 00:29:17:19

Unknown

Like, I don't know. And it definitely doesn't evoke like Coca Cola and root beer and grape. I mean, it's say Coca-Cola, like classic cola. And so, yeah, we change the packaging, you know, we call it a new kind of soda now very much leaning into the nostalgia vibes. But I've always said, like, we don't have any sort of grand ambition to like, take Coke and Pepsi to zero.

00:29:17:19 - 00:29:43:06

Unknown

We know that's not going to happen. We ultimately will, like, likely need to partner with one of them at some point. But, I can tell you in these like, sports deals I'm looking at and some of these music videos we've done, like they have blocked us, you know, like they there's teams that have wanted to work with us and have tried to carve our category out of an existing contract with one of those two, and they flat out said no where as a couple of years ago, they maybe didn't even know who we were.

00:29:43:06 - 00:30:06:02

Unknown

We weren't on the radar. We're definitely on the radar now. And we're, I think getting under some skin somewhere. They probably sell us as a rounding error, right? 200 million in a category of 40 billion in the US. Is is nothing. But, you know, every day we chip away and hopefully we'll be on, you know, airplanes and in movie theaters and hospitals and all these places.

00:30:06:04 - 00:30:29:17

Unknown

You know, we've been more or less blocked out of either by a contract or, you know, just pricing. Right. We're never going to be able to sell the product at as low a cost as, as give us an idea of the give us an idea of the price discrepancy right now. I mean, you can buy, on a per unit basis when you're buying multi-packs of call it Diet Coke, it's generally like 60 to $0.80 a can.

00:30:29:19 - 00:30:44:11

Unknown

And then if you're at, like, a 7-Eleven, right, you can buy a 44 ounce Big Gulp for like a dollar, which is wild and all I pop is generally around $2.50 per canned. So. And we don't have a fountain soda offering yet. But you know, so we're generally like 3 to 4 times the price per, per unit.

00:30:44:13 - 00:31:04:05

Unknown

And that's retail price, right. When you're talking about these partnerships we're talking wholesale pricing. But it all ladders up to the same thing. Yeah. Damn. Wow. I had no idea Coke was that cheap. I mean it's like, look at the ingredients. A plus the scale of the companies. And, you know, the math starts to math. We're using like, there's nine grams of plant based fiber, there's six prebiotics.

00:31:04:05 - 00:31:27:16

Unknown

And every lollipop like that stuff is not cheap. It's not fake. It's not subsidized by the government. Yeah for sure. No. It's different. So I guess like in terms of, in terms of you were employee number one at the company, obviously things have changed a lot. Has it? I mean, I just want to understand, like your expectations going into the venture and how how it's gone.

00:31:27:16 - 00:31:48:00

Unknown

It's obviously been super successful. But can you just open on that for a second? Yeah. I mean, I the number one theme I kind of noticed when I was in the investing world was like, better for you. Junk food is is a thing, right? And it's you're not changing consumer behavior. You're not asking them to, you know, swap out Doritos for kale chips, right?

00:31:48:00 - 00:32:06:19

Unknown

It's like the things that are close analogs to the historically terrible things, but have better ingredients, whether it's halo top and ice cream, smart sweets and candy, bonza and pasta, simple mills and Cheez-Its like, you're not changing consumer behavior, you're just giving them a better mousetrap. And so when I first kind of saw lollipop, I was like, oh, this is like a no brainer.

00:32:06:19 - 00:32:26:09

Unknown

Like no one, everybody wants a root beer. But like, so many people don't drink it anymore or who are drinking and like, upset about drinking it. And, you know, if someone made something that was not only, like less bad but actually functionally beneficial and tasted like the real thing, I think it's a it would be a huge idea, you know, hitting 200 million in revenue in five years in less than 30,000 doors.

00:32:26:09 - 00:32:45:13

Unknown

If you had ever told me that was the case, I would have told you you're crazy because beverage brands grow like that. So I would say it's like surpassed all of our wildest expectations. And I can tell you, like, internally, you know, we always thought it could be, you know, $1 billion brand one day. But now it's like, I actually think a billion in revenue is possible at this at this point.

00:32:45:13 - 00:33:04:18

Unknown

Like we're just like 200,000 plus convenience stores in the country. We're not, you know, we're in 200 of them right now, and we haven't sold a can outside the country. We don't even really have multi-packs. We just launched an eight pack at Costco, but most soda is bought in Multi-Packs. We're doing it all through like single cans in the refrigerator, which is is insane.

00:33:04:18 - 00:33:23:16

Unknown

And so when I look at like the white space in the upside in the business, like Mexico and Latin America is the biggest soda market in the world, we're not even there yet. I think there's tons of demand. And even just like having worked with Camila and a couple people on our team come from the UK, including our co-founder, like there's massive demand for this product overseas that we haven't even touched yet.

00:33:23:16 - 00:33:50:07

Unknown

So yeah, I truly I can speak. I hate when people say we're just getting started. It's such like a startup tagline, but like, I really kind of feel like there's so much more room to room to grow here. Yeah. So talk to me about international expansion, though, because we talked to a lot of beverage founders who it seems like they they moved to the UK, they expand to the UK or France or the European markets, like pretty quickly.

00:33:50:09 - 00:34:11:12

Unknown

And obviously you guys have focused on density and just like owning the states. What are your thoughts on on expansion? Just geographically? I actually view it as like a red flag. When people go abroad too quickly. It's it's very complicated. Right. You either need to ship product from the US on boats, or you need to stand up a whole new supply chain in that market, neither of which are cost effective.

00:34:11:14 - 00:34:41:19

Unknown

And if a brand is doing it too early, I think it's a sign that they feel like they've tapped out on growth in the US. Like the primary reason we haven't done it is we've had trouble keeping up with inventory demands in the US like we have had pretty painful out of stock issues for and I, we fixed a lot of it last summer, but for the 18 months before that, it was like under constantly under producing and over selling and we were just growing so quickly like built a plan and you run, you know, you build the forecast and you build inventory to forecast.

00:34:41:19 - 00:35:02:03

Unknown

Then you come in two weeks over that demand wise, like, what do you do? And so why would we even consider going abroad when we had to figure out our supply chain here in the US and we've gotten that all under control now. But, you know, we have to win in C-Store here, I think, before we even look at any other overseas market besides Canada.

00:35:02:05 - 00:35:19:09

Unknown

It just we just don't need it. And to some extent, you need to leave growth drivers on the table for a potential acquirer or whatever. And so if you like, go and gobble up all that space. It makes it harder to buy the business because they need to make a case that they can grow it. Right. So all those kind of factors play into it.

00:35:19:09 - 00:35:37:22

Unknown

But we're obviously looking at it. We've got really good partners ready in Latin America. We want to go there. I don't think we've really looked that hard at Europe yet, but you know, we've grow from 70 to 200 million last year. Without it, we think we can, you know, grow, you know, triple digits again this year in the US.

00:35:37:22 - 00:35:54:17

Unknown

So we just it's a whole nother thing to deal with that. Like if you don't have to deal with it yet just save it for the flip side says there's competitors. And if they get their first, what does that mean for us? Right. We obviously think about those things. But the reality is the US is the biggest market and most important.

00:35:54:17 - 00:36:22:21

Unknown

So how big do you think Amazon can be as a channel. What is what is it like? Like what's the revenue mix for you guys on Amazon right now? It's it's pretty small to be honest. I think DTC plus Amazon is 15% of the business. I go back and forth on this because our, you know, we're in one of those weird categories where it's, you know, single digit low single digit dollars, the Biden store, it's 40 bucks online.

00:36:22:21 - 00:36:41:14

Unknown

And people are trained to think everything is cheaper online. And we're obviously like much more expensive, not on a per unit basis, but just the total dollar number. And so, you know, I struggle to see a world where there would be like a massive Amazon business for us. But the inverse of that is like Celsius is enormous on Amazon.

00:36:41:14 - 00:37:02:12

Unknown

Liquid is a huge online business. So there's case studies that prove that it's possible. I think it takes a lot of time and effort. And Amazon is, is a flywheel. Right. And you got to build the listings and you have to spend money on ads. And, you know, in a world where dollars are scarce, we just haven't invested as much in the channel.

00:37:02:12 - 00:37:22:20

Unknown

But I think it could be, you know, a multi ten figure, sorry, a multi ten digit business for us. Now that's not the right thing either. Like tens of tens of millions, not nine figures yet for us at least. Multiple on the TikTok. Yeah I know what you meant. On the TikTok side, I'm curious to hear your take on this.

00:37:22:22 - 00:37:46:12

Unknown

A lot of the lollipop content is like, like TikTok girly type stuff. When you look at the feed, that's probably obviously a function of like your social media manager who is a girl. I'm just curious, like how you think about that since it's such a large impression driving channel for the business. I think a mistake a lot of brands make is trying to force like brand messaging on TikTok.

00:37:46:12 - 00:38:03:22

Unknown

I just the way the algo works, it's, you know, 80% of the people who see a piece of content are not your followers, right? If it hits the for you page. And so I have said this a zillion times, like content on TikTok has to be educating or entertaining to someone who has no idea who the brand is, right?

00:38:03:22 - 00:38:21:01

Unknown

That's the only way you can grow it if you're just talking to yourself, if you're just talking about the benefits, if you're just doing recipe videos like a stranger is not going to care about that Instagram super different, right? You're really nurturing your followers and your audience, and it's much more about esthetic and a vibe and kind of pulling people closer once they're already in the funnel.

00:38:21:01 - 00:38:42:16

Unknown

But to me, TikTok is more for top of funnel growing, just overall awareness of the brand. And so we have very different KPIs, very different strategies for both. And you know, I think why TikTok works so well is we've let Sarah like it's her page, basically like we let her do her thing and if she has a funny idea or she wants to come film something with me like we do it, but we try to stick more to like TikTok native content.

00:38:42:16 - 00:39:01:02

Unknown

And I see brand content so much is just like cringe. And you're like, why would any normal person who doesn't know who you are care about this? And it's like a hard needle to thread, especially when you're first starting. You just got to like throw to the wall and see what sticks. But, I think we've done a good job having like TikTok and Instagram have like totally different personalities, totally different copy for everything.

00:39:01:02 - 00:39:18:23

Unknown

TikTok is much bigger and feels a bit more Gen Z, I think. And Instagram is a bit more esthetic and creative driven and is more like your home page, your site. Right? So like you want to give like an overview of the brand, whereas TikTok is a bit more like funny and cheeky and off the wall. Yeah, I hear you.

00:39:19:00 - 00:39:41:19

Unknown

Last question for you. You think there's like, you have like a surprising or contrarian take on building a beverage brand that you'd want to share. If anything comes to mind, I saw that question in your email, and I've been thinking about it. I feel like I have a lot of contrarian takes. I'm struggling to think of one.

00:39:41:23 - 00:40:00:06

Unknown

You definitely shared a lot today. I think just one thing, like when I talk to early stage brands, like, everybody wants to go really big, really fast, right? And like, Walmart wants me and target wants me. But like the reality is selling in is really simple. You can hire good sales guy, you can get a woman who can get you in.

00:40:00:06 - 00:40:19:20

Unknown

But like getting people in the store to buy it is really the hard part. And like we didn't sell people, I was surprised. I was like, we didn't sell a can of pop outside of California for two years. Like we spent two years in market in stuff in LA, doing demos, doing events, getting know our customer. You know, we were like trying to figure out, like, are people going to gravitate to the fruit flavors or the soda flavors?

00:40:20:00 - 00:40:42:18

Unknown

Are people going to know what a sparkling tonic is? We had our our vintage cola was called Cinnamon Cola. And, I'm just realizing I didn't put my trash out and the garbage truck is coming by like, once, I don't know, it's cinnamon cola. That's crazy. Yeah. And we, like, totally realized that most people don't like cinnamon and wouldn't even pick it up.

00:40:42:18 - 00:41:04:15

Unknown

Not most people, 35% of people. So I feel like I need to let me bring the the garbage cans at once, like, yeah, do your thing, bro. We got time. You got it, bro. You make it, okay? You made it by one house. This is my year, by the way. So I'm going to say hi. The consultant in my senior soda consultant, Ron Campbell Woods.

00:41:04:17 - 00:41:24:19

Unknown

What's her his name? This is Juliet. Actually, she was a street dog, and now she's. She's live in Jerry Mar Vista, Venice. So? So take us through that contrarian. Contrarian take real quick. Steve. Yeah, I guess, and I don't know how contrarian it is. I just think it's good advice is like, you have to know your your customer.

00:41:24:19 - 00:41:44:10

Unknown

And we spent two years in the trenches doing sampling and demos and like realizing that sparkling tonic didn't make sense for us. Cinnamon Cola was off putting to 35% of people who don't like cinnamon. I had no idea. People would always ask me if it tastes like fireball that was like the feedback we always got. And so yeah, we changed the packaging.

00:41:44:10 - 00:42:09:06

Unknown

We changed the flavor on that one to vintage cola, which is a little confusing to people. They thought it was a different skew. It was the same thing, just a different name. And like, you know, we actually like said no to Walmart for three years because we just didn't think the brand was ready for it. And, you know, building the brand brick by brick and going into the right channels at the right time is, is so important.

00:42:09:08 - 00:42:26:02

Unknown

And I think we did a good job of, like, staging the business out and doing things when we are ready to be able to support them both with, you know, dollars, but also with people and having people in market to support those various accounts. I probably have so much more honestly. Like I'm pretty anti DTC in general.

00:42:26:02 - 00:42:49:24

Unknown

I think like everyone thinks it's like the name of the game and like I don't think a lot of I think I think that's I think that's changing though, especially in beverage like people buy on shelves. I think there's a massive case for Amazon for a lot of these businesses. But yeah, I mean, direct's just a way to like, you know, be a better digital marketer and like, own the relationship with the customer, which you can flex on organic social.

00:42:49:24 - 00:43:17:04

Unknown

So yeah, no, it's you guys learn that it's like meet the people where they are. Right. We were available on all these channels. We don't care if someone buys from us or Amazon or Go Performance, Carter, Whole Foods or Target like it all. It all matters. I think you have to have an omni channel business. I know businesses that are multiple nine figures and more than half of it's Amazon and you know, I don't think acquirers want to buy that because there's too much channel risk there.

00:43:17:04 - 00:43:37:21

Unknown

Right. If the algorithm changes tomorrow your business could be in trouble. So again, I don't know how contrarian any of that is. I just think it's like, strong opinion. It's good advice. Dude. Thank you so much for, coming on. I think you dropped a lot of wisdom today. I really appreciate it. We got to link up soon, either in LA or when you're back east.

00:43:38:00 - 00:43:53:12

Unknown

I appreciate you having me. This is a fun, fun to chat. I've been in pods. I've been doing a bunch of pods lately. I saw, bro, I saw it in person. Pod. You did. I was, I was jealous. I was like, we need to be, Go on. The truth. I don't know who who I don't remember whose podcast it was.

00:43:53:12 - 00:44:11:02

Unknown

I just saw it was sort of has, like, celebrity packaged goods. He does like celebrity brands. But I did this, like, podcast. It was in December, I think it's called Sporkful. I wasn't familiar with it, but it's like a Sirius XM podcast. Went to their offices like crazy setup. I've never been in a studio like that. Yeah.

00:44:11:03 - 00:44:34:00

Unknown

Fun interview came out. You know, I kind of judge a lot of these things by like random people in my life who, like, send me them, you know, it's like, how do you know how big something is? And it didn't get much pick up and then the host, ended up on an NPR show called, I don't know, innovator or something.

00:44:34:02 - 00:44:55:01

Unknown

And they were like, yeah, the podcast is going to be on innovators tomorrow. And I had no idea what that was. And it was just like a ten minute it's like a ten minute NPR daily news podcast. And like they had him on there talking about his interview with me because they thought it was interesting about lollipops. And like my interview, I clipped into this NPR thing and like a little did I know it's like a top ten business podcast and gets like 100,000 downloads a day.

00:44:55:01 - 00:45:12:19

Unknown

And I had like, probably like 70 people from all walks of my life reached out like, Holy shit, you're on the indicator. Like, I had no idea. Ten happening and you just never know. Like people, of all people I've worked with, you know, five, eight years ago, reaching out on LinkedIn, like sending it to me. I was like, oh, that's kind of cool.

00:45:12:22 - 00:45:31:20

Unknown

That is definitely not going to happen on this podcast. Only manage your expectations really quickly. But we will give you some. We'll give you some great clips. And bro, at this point you've done it all, man. I saw the HBR, case study. So, you know, this is just this is just good banter. I like good banter.

00:45:31:20 - 00:45:49:02

Unknown

Yeah. The Harvard thing was wild. Those, surreal experience. Honestly. Yeah. One of the things you like to hype up in your head and you're like, is this going to be as cool as it sounds? And it was it was cool. It was really well done. Awesome. You did a case like in front of the of the students, right?

00:45:49:02 - 00:46:11:19

Unknown

Or is it like a no, it's not as it's not. I don't think what everyone thinks it is that they have this like one week intensive course every January where they bring in like, I think it's six founders a day for the whole week. So there's 30 companies that come in and each of them gets an hour. And they we did a prep called the professors and kind of like talk them through the business and things that were going right, things that we, you know, had challenges with.

00:46:11:19 - 00:46:30:09

Unknown

And like, we kind of like they had to bulleted out a couple like business cases and problems with the students for us to think about, you know, going into it. But it honestly ended up being like a consumer panel. So we we had to like pop there 135 students, almost half had had it and half had not. And they all tried it at the same time and like gave us live feedback.

00:46:30:09 - 00:46:44:15

Unknown

Both the people who had it and like knew about it and what they knew about it and where they found it and what they, you know, understood about prebiotic and stuff. And then the other 50%, a lot of international students who hadn't had it. And we're giving us kind of first impressions on packaging and taste and flavor profile.

00:46:44:15 - 00:47:09:00

Unknown

And like, that was fascinating. Like, we've never done that before. Right? A live 125 person cross-sectional panel. And then I just like all the students watch that now, just like highly educated business students. Yeah, like smart people. Some who work, some hard working consumer. Some have had since I was like interesting. And then Ben kind of told the founder story, and they had actually reached out to me originally because they wanted to talk about TikTok.

00:47:09:00 - 00:47:29:12

Unknown

So I went and like kind of did the marketing spiel and talked about TikTok and how we use it and why we use it. And it was they did a really good job of like framing up like founder mission questions. And for Ben and, you know, I also do all of our fundraising here too. So like some of the fundraising stuff and it was just like a good we could have gone like two hours about like it was like we ran out of time.

00:47:29:12 - 00:47:43:14

Unknown

But it was really cool. It was a really cool experience. I got a Harvard sweatshirt out of it, so most of that's what's important. Well, Steve, thanks so much, man, for coming on board. All, hopefully I see you soon and I'll send you a text when I'm coming out to LA. And, thanks so much, I appreciate it.

00:47:43:17 - 00:47:52:03

Unknown

Good.