Bero's John Herman on Building with Tom Holland, Betting on the UK & the Shandy That Shouldn't Have Worked

0:14Hello and welcome to the Tomorrow Brands podcast, where we explore what it takes to build a brand of tomorrow. I'm your host, Ruth Pittock, and today's guest is John Herman, CEO of BeerO, the premium non-alcoholic beer brand he co-founded with Tom Holland. Yes, that Tom Holland. John spent nearly a decade as president of Nutribolt, the company behind C4 Energy, growing it from 100 people to 650 and taking C4 to the number four energy drink in America, before walking away from it all to start again from scratch. In this conversation, we get into why he did it, how a weekend business plan turned into one of the fastest moving launches in non-alch, why the shandy that looked like a terrible idea on paper became unbelievably incremental, and what US brands consistently get wrong about the UK.

0:54Let's get into it. Hi, John. Thanks so much for joining us today. Before we get into it, it'd be great to hear your background, your path into CPG and where you were before Beera. Wonderful. Great to join you guys, Ruth. Yeah, my name is John Herman. I started out originally in the apparel industry. I was a merchant for a few different retailers. And I think I came out of college not knowing what that meant. But what I ultimately did was, I think, create my approach to consumer brands. I think it led to having a passion around trend, a passion around consumer intuition, and just the idea of building something differentiated that can tell a really good story.

1:29So after a little over a decade within the apparel industry, made a decision to make a move into more in the health and wellness space where I led the charge at a leading sports nutrition retailer. And then I was fortunate enough after about four years to make the jump over to the branded CPG side. And I think having that experience of understanding what buyers are looking for behind the desk. And then from a brand standpoint, how you craft the story and strategy around that. I think it really set me up to understand what that dialogue should look like. And I had the pleasure of working for a company called NutriVolt for about nine years where I was president and really oversaw the day-to-day operations of the company.

2:03We're best known for making the product C4 during that stint. We were a global leader within the pre-workout and sports nutrition space. We expanded into the energy drink space. I think when I joined the company, there were a hundred employees. When I left, we were about 650 and really learned a ton during that phase. Learned about product architecture and price point architecture for different consumers by different channels. Learned about what a global distribution strategy would look like and how the nuances vary across the globe. And learned about beverage, which was this fun, complex, and interesting new world.

2:37And yeah, we built a pretty good energy drink. We rose to number four in the country in the U.S. And around that time, we started conversations with Kurt Dr. Pepper and they took interest in the brand and made an investment and took a minority stake in the company. And it was around that time when I realized what I really enjoyed most about the whole journey was that early stage building from the ground up and ideating in a blue sky. Hey, how do we make something different and better? And yeah, that was my journey through CPG. And you went from sort of 600 people right back to the beginning with Biro.

3:07Tell us how that came about. So the day we announced to the company at NutriBolt that we were taking on the Kurt Dr. to Pepper Investment. It was like a company offsite. So it was a big end of year session where everybody in the company was there. And after the announcements of the company, I was walking through the hallway and everyone was saying, Hey, John, that's so exciting. Hey, John, that was wonderful. And I realized at that point, I didn't know anyone anymore. And I personally really hated that because what was fun to me was not this like big hierarchy of bureaucracy of process and org.

3:37It was, I knew every person at every role and it wasn't like, we were just helping to build of an epiphany that day that I missed that magic. So we had a few meetings in that post-investment world. And after one of them, I called my wife and said, I think I want to quit. And she's definitely the pragmatic one of the two of us. But eventually she got on board. And at the time, I had a four year old daughter. Now she's going on eight. And it was great to just take a little time, reset a sabbatical of some sorts and just reprioritize what did I want to do. And I was fortunate enough one day to pick up a random unmarked phone call.

4:10And it was a potential introduction to build something within the non-alcoholic beer space. And I think it was a unique situation where I was thinking about what I wanted to do next. For me, it was a little bit privileged to say it, but I wanted to build a brand from scratch that could matter to people. I kept calling it a t-shirt brand. I wanted people to be able to wear the brand name on their chest and take pride in what it stood for. I wanted to disrupt the category that felt like it was on the upswing. Coming from energy, it had been disrupted and you went from a Red Bull and monster world to something much bigger and more diverse.

4:41But non-alcoholic beer seemed really interesting and like it was having a moment globally. And then lastly, I wanted to work with great people. That was something I was fortunate to do to Nutrible, and I didn't want to give that up. So I took the phone call, and it was a VC that happened to be in touch with Tom because Tom at that point was a year and a half sober. And for your listeners, Tom is Tom Holland, known for such small films as Spider-Man and recently The Odyssey. And he was a year and a half sober and he saw white space in the market and it wasn't about evangelizing sobriety it was just creating a brand that could ultimately expand the space be high quality beer and just make the category that much cooler and i hit it off with the bc i think that was a friday built a business strategy over the weekend i was in their office the following monday with tom on tuesday and it just seemed like a once-in-a-lifetime opportunity to do something and that was at the end of 2023 amazing and you guys have we'll get into it but have grown pretty rapidly over that time bit of The culture shock going from such a big organization back to the beginning again.

5:40Was there anything that you were able to bring from that time or was it throw the rule book out, start all over again? I think the number one thing that I was bringing was a memory of all the mistakes we made along the way. And I wanted to make new mistakes. I didn't want to make the same mistakes again. And I think that that touched every aspect of the business. It was how do we want to set up our footprint for manufacturing? It was how do we want to start from the beginning from a brand side of things? How do we want to build the culture of this company? Because it went from one to one to many.

6:10When we started, it was me, the brewmaster, and our head of ops, and of course, Tom. And today we have over 40 people. So it's like, how do you end up instilling the values in the company and the culture based off of the things that you saw from your past life that you didn't want to become again? So it was refreshing. I think the biggest change was just the pace at which it felt like you needed to make decisions in progress. There were days where it felt like you were making exponential leaps forward. And then there were days where it felt like you were sucking quicksand. And I don't really recall ever feeling that way in an established business because there was always something to do.

6:45But if you weren't making a decision and feeling like you were moving the ball forward, like it was those moments of stagnation early on that I think were the most shocking for me. So take us back to the beginning when you and Tom first sat down, non-alcoholic beer. What did you want this to be? I think the similar thing for both of us was there was a good category out there emerging. In the U.S., it was being defined by a brand called Athletic Brewing. In the U.K., it was being defined by Lucky Saint. And I think both brands have a lot of their strengths and opportunities, but it was getting a positive spotlight on the category.

7:18And then you look at the big legacy brands, and whether it be the Guinnesses or the Heinekens of the world, they were making great products. But it was almost just the non-alcoholic version of the Mothership brand. So we started talking about what was the moment we were trying to create. And in a world where a lot of the new upstart craft brands were being defined more functionally, like I'm going for a hike, I'm going for a run, grab a non-alk beer. We really just wanted to focus in on the pub experience, like beer is made for the bar, beer is made for the restaurant. And how do you create a brand for the next generation that could be cool and be something that could be proud holding, not a big moniker of I'm different or I'm making this like choice to make it seem like, again, And we're not evangelizing.

7:58Like one thing Tom was really consistent on from day one was I never want to see blue. Every non-off brand has a big badge that's blue that basically says, hey, look at me, I'm different. So we wanted to make it seem like something that allowed you to be included in the overarching piece. And that was really important in the DNA of the brand. And then we had always had a vision, even though we were launching with cans initially. We're like, what will this brand look like in a bottle? Because we felt like that was a more premium expression. Really, it was that alignment. I think for Tom, again, he was a year and a half sober.

8:27He wanted to build a brand for his younger self. For me, I still enjoy a glass of wine, but there is a role for non-elk. And 90 % of our consumers and 90 % of the people in the category still drink. So how do you create a brand that isn't niche or small? By the way, you said the British niche there as well. Very good. I picked up a few. I picked up a few. I still say elevator instead of lift and truck instead of lorry, but I'm getting there. And then also, I think seeing from the energy drink space, you have this massive category. When we launched C4, it was like a$14 billion addressable market.

9:02And it was dominated by Rockstar, Red Bull, and Monster. But the next generation, those 20-somethings that were coming up, didn't want necessarily Monster and Red Bull. It was the older generation's brand. So there was room for this new brand to come in and be true to the category it was participating in. No matter how much zero sugar that those brands sell, they were almost viewed negatively because of their legacy. We got a free start. We were able to build up a brand that had its identity from day one, which is a daunting task, but on the same note, gives you a world of possibility. Beautiful cans as well.

9:33I was in a restaurant at the weekend and it came on a tray with a frosted glass and everyone else was having a cocktail. It looked completely at home. One of the moments that were a proof point, because we were operating off of intuition, like big CPG, they'll research it for years before they make a decision. When you're a startup, you just have to have a gut and you have to have the courage to fail and be wrong. And I'm wrong all the time a lot, but I feel like if your batting average is so good, you'll carry it. But we were presenting out a very early version of the Colorblocks can and it was gold.

10:03And the initial feedback was like, wow, your brand feels like it's existed. It doesn't feel like it's a brand new craft beer. And that was extremely, it was really encouraging and a big moment because we didn't want it to feel at the moment. We wanted to feel like it belonged in that 200 year old pub or that it had existed for 50 years, but because it felt prestigious and felt elegant and also felt maybe, and again, this is funny, me being the American on the call, but we didn't want it to feel overly American. We wanted it to have those like British and European like touches that made it a little bit more, I'll use another word, posh.

10:38Done. So you've mentioned, Tom, obviously there's a sort of, I think it's more common in the US for a celebrity founded brand. We don't have it as much here, but it also sounds from the way you're talking like he's really hands-on and is associated, from what I've seen, is associated and affiliated with the brand. It's not all over absolutely everything. Has that been something that you've intentionally managed? So I think first, that first phone call I had with him, it wasn't celebrity and operator. It was just two guys talking, getting to know each other and ultimately talking about what we wanted to build.

11:10I think so often celebrity relationships with brands are, it's a contract and the contract says, I will do three posts per year in story. I will do one in feed and I will show up for an event. And that isn't what this is. Like, I think additionally, Tom had never done a brand partnership up to that point. He has a few great brand partnerships now, but his name wasn't clustered on 35 different brands. It was very authentic. And I think that story came across. But we also knew that the brand needed to have a little bit more weight to it. So in five years or 10 years, it was Bureau. And yes, maybe some people still say, oh yeah, that was Tom Holland's brand, but the brand could stand on its own.

11:48So it was really important that Tom was It's critical to the top spin of the ball to get traction. But he couldn't be the foundation of what we were making. We needed to have amazing beer. We needed to have operational capabilities. If you can't do business and know how to scale, you know, in beverage is hard. You lose money. The numbers don't make sense until they make sense. But if you didn't have all of that, then it was going to be a flash in the pan. So we were careful about all of that. Now, that being said, whether you know it or not, Tom's handwriting is all over the brand because he loves it and he's intrinsically involved.

12:19And he'll talk about how you don't want him running the business. That's why I'm here. But he is unbelievably intuitive about the marketing and brand opportunities. He knows his brand and he knows what fits with that too. And candidly, he's learned so much about the business too in this journey that it's not like checking a box to say, oh, I have to call Tom to get approval. It's value added. So you're only two and a half years in. You've launched in the US. You've launched in the UK. You've had a partnership with Aston Martin. You've had some new MPD come out, including a shandy. What has been the one moment so far that's made you think this is actually working?

12:55I think we've had a few. So October 13th of 2024 was when our social went live. And Tom and I were on FaceTime as we were pressing go live together. And we're both nervous. We had been building this thing in private, not knowing what people would think. And I think both of us felt good about it. But you don't know how the crowd will react. And immediately there's this positive response, not just to, okay, this feels right. And Tom isn't just doing a money grab. It's an authentic story to him. But my God, the packaging and the brand looks good. It was an early moment, but it was surreal to see the positive feedback.

13:28Then people started tasting the beer and we were getting reviews and repeat purchase. And it was like, my God, okay, it's not just us. People really do enjoy the liquid as well. That was another great pinch me. Our launch week, we were on the Times Square billboard through a partnership with Shopify. That was like, my God, really? There's just, there's been all these moments where we launched nationally with Target here in the US or the first time we were available and had Biro in a restaurant over in London. There's just been these moments of pinch me along the way. And I think it's important because most founders, or maybe it's just a me issue.

14:02I'm an optimist in glass half full, but I always see everything that we're not doing. And I think I oftentimes am the last person to celebrate and say, look how good this is. But there's been a couple moments, and again, the billboard, the launch, Shandy, like the reception we've had of Shandy has been so great. And each one of those things are just, they're really motivating. They're really great little adrenaline rushes for you to keep you going. So you expanded from the US into the UK really quickly. What made that the right moment for the UK launch? And was that always part of the plan? It was part of the plan.

14:34It was an absolute nightmare early on. So we were brewing our beer in Colorado, which if you pull up a map of the US, it's almost as far west as you can go to make it really inconvenient to ship across the Atlantic. The regulatory landscape is different. In the U.S., it's non-alcoholic beer. In the U.K., it's alcohol-free. And what you have to say on the front, there's just nuance that we didn't know. But we also knew that we wanted the brand. One of our brand taglines is, born in London, crafted in America, and joined worldwide, which is about the beer. It's a little bit about Tom's journey as well.

15:05Of course, born in Kingston, honed his craft in Hollywood, and now is worldwide. But had we launched with that as being a foundation of the brand or had we had this, again, like British mentality to how we wanted to market without having the placement there? Again, I think it's a cliche word, but it would have felt inauthentic and just not true to the brand. So we did everything possible, much to the chagrin of our supply chain and operations team. But they were amazing. They found a way to get the product over. And if I would have showed you the P &L for that first year, you'd probably wonder why I'm even in the seat.

15:38But we knew it was a temporary pain point and structurally when we would find a localized brewery that it was right. And then on top of that, the category is so much more developed throughout the rest of the world than it is in the U.S. You walk into your average pub and there's probably two to three non-alcoholic options on the menu or on draft. That's not the case in the U.S. So we also saw it as a wonderful place to gain some momentum and credibility of the brand. And I'm really glad we did it. I think on top of that, like from a direct consumer and digital side of things, because of the category development, because of Tom, of course, being English, because of the brand look, if you would compare just performance marketing metrics between US and UK, the UK is through the roof.

16:19Customer acquisition costs is lower. Average order size is better. Repeat purchase rate. So there's just, there was a lot of momentum and reasons to believe. And it was a daunting task for a team of, at that point in time, I think eight people, but it was worth it. Eight people. How did that work practically in terms of resource? Well, when I started, I had a full head of hair and I wasn't gray. But honestly, I think it came down to this, like, the culture of the people we were hiring. We were a startup, but we brought on a great team that understood how bigger companies operated too. But being able to dance with one foot in both worlds, because if you were a large company operator, you would fail because you can't operate in the ambiguity.

16:56If you're purely a small company operator, you don't know what you want to build to and grow up to be. And I think we were just fortunate to have incredible people that wanted to find a way to win. It was, you know, at its core, I keep reminding myself and the team that we're not saving the world from global warming. We're not solving cancer. We're shipping beer. And we really love our beer and we think it's great. But let's just find out a way and work through it together. And I think the team's had moments of stress, but we've gotten through it. Has there been anything that surprised you about working with Brits culturally?

17:26or I think the thing that honestly continues to surprise me is just you think we want to win in a town like London and you're like okay we're going to we're going to focus on London but London isn't London London is a thousand you know towns within itself so the complexity of it I think the pride that the different regions of the country or countries have is incredible too because there's all nuances we're looking at brewing in the north and learning about just what they're looking for in the and there's a britishness but there's these sub-tribes and subcultures i found that to be really delightful and and then of course i think something that has been beneficial is we said early on what we are and what we are and i was like we're not nfl we're not major league baseball for my own passion points and from times like golf i'm like paddle sports and football or soccer depending on where you are so like that all played naturally but yeah i think it just came down to the scale at which we were working with and the complexity within those cities.

18:25I believe this is right, that the UK is about 80 % on trade, 20 % retail, and the US is almost the flip reverse of that. Is that intentional? Is that just the market here? It's the market. I think in the US, the category is far less developed. So there's still the learning curve in a lot of bars and restaurants to say, hey, you should have a non-offering, or you should have two. The customer is getting there, the menus are slower to follow. Conversely, our retail locations in the U.S. are massive. So you have 16 and 24 feet devoted to a category. You don't have that in the U.K. And space constraints from a retail side of things, I think they really want to believe that the brand has a reason to be first.

19:06And like, what makes your beer special and different? There's storytelling and teaching. But when you go into the bars and restaurants, like they can see and feel, wow, this brand makes a lot of sense in our space. They put it up against the others in the set. They immediately said, this is quality. and I think there's just a foundational understanding that consumers are looking for this whether it be because of behavior the pub culture the desire to session or even laws around blood alcohol levels on driving like it all fed into I think less resistance in that expression the desire to session the desire to session I desired a session I think it was over 10 years ago I felt like the curmudgeon because there was a big trend on imperial beers and imperial strength And I hated it.

19:48It was like 8 % to 12 % alcohol. It's like, I drink one of these and I'm ready to go home. I want to spend a little bit of time with my buddies. So yeah, the zebra striping, it's a real thing. I just didn't know it was a thing until the past four years. And you partnered with Aston Martin, like iconic British heritage brand. Is that, is this sort of Britishness of the brand through Tom, does that really resonate in the U.S.? You sound like you're walking a fine line between it's American, but it's also got this British heritage. I think there's a level of, and hopefully this isn't taken offensively, but if I say something, and if Tom says the same exact thing, in the U.S., Tom just sounds more credible.

20:28That Britishness, that accent, the vocabulary, it gives a little bit of credibility to the Americans to say, like, wow, this is upscale. And I think that level of aspiration and premium is something we really want to come across. So you asked earlier on about like, when did we feel like we had something? We were sampling at Le Mans with Aston Martin in their booth. And that was another pinch me moment for me. I think it was like 2 a.m. I was drinking a beer as the cars are going around the track. But that lifestyle and the premium and of course the beauty of engineering and the classic Britishness that goes back far beyond like James Bond, that registers over here completely.

21:03And I think it raised the bar of what is the brand I'm standing for? It was excellence in craftsmanship. It was heritage. and I think it was a good start to kind of say, hey, we're here. This is somebody that represents what we're about. And they've candidly, I'm not just saying like they've been amazing. And for being a brand of their scale, the discussions we can have about the parallels between our little baby brand and their historical brand, it's inspiring. Amazing. So you're projecting sales to more than double this year. Anything straining at that growth rate? Supply, people, anything else?

21:36It takes a village. I talked about we're now over 40 people. So, you know, there's that middle of the night you wake up and you think, if I don't have the people, there's no way I can do this. And then there's the other side of, but if I don't hit my numbers, I'm now responsible for these people. Right. And not straining, but I think it's the push pull of where we are in the stage of business. Look, we are scaling our manufacturing. So we went from one brewery in Colorado to a brewery in Belgium and Colorado. And we just onboarded another one in Wisconsin. So it's complexity. I keep telling the team every day is our most complex day we've ever had and our simplest day ever we're going to have again.

22:13And I think we just have to take it day by day. We're adding new accounts. We're adding new distribution partners. Every account maybe has a new expectation on how the product arrives. So I think decision and rigor around decisions to, we keep trying to say, fewer, bigger, bolder, which is really easy to say, or cliche is say no to more things and yes to the big things. But you always say yes to too much. And I think we've, hopefully the team would echo this. We've inspired a culture that like when it's too much, we'll either take a phone call to pause to reset, or sometimes they'll just be, okay, do you want me to actually help with this?

22:48Or do you just need a moment to vent? Okay, you need to vent? Great. Let's do that. But I think we're learning through like the business just getting completely more complicated and making sure that we're hiring the right people that can allow us to scale in that same culture we want to be. Segway to my next question, which was going to be, how do you decide what to say yes to? Because it's still fairly early stage. There's a kind of thinking in CPG of protect growing the core. You're adding new lines. You mentioned glass earlier. How do you know what's the distraction versus what's going to be an important part of the brand's next stage?

23:19I think, again, experience and intuition of the team. I think that's really important that we take a few chances and we allow things to maybe fail. But we definitely say yes to more than we should. We're trying to get more rigor around what are the big moments. So even the idea of if we were a massive CPG company, we would have 2027 planned out already and we'd be working on 2028. The reality is we're figuring out what we're doing in Q4 this year. We just launched the Shandy, which I'll talk about that as a complexity and a crazy piece. And it was a limited time offering and we've had such a tremendous response.