Building brands that last - Mike Schneider, BevNet

0:15Hello and welcome to the Tomorrow Brands podcast where we explore what it takes to build a brand of tomorrow. I'm your host, Ruth Vitock, and today I'm joined by Mike Schneider, CMO and Head of Products at BevNet, one of the most influential voices in food and drink. We talk about what really makes a brand last, why simplicity still wins, how founders can spot the early signs of staying power, and why buzz isn't the same as sales. Let's dive in. Can you tell everyone a little bit about your background and how you got to where you are now? Sure. Did about 10 years of technology consulting. And then I decided that I hated advertising.

0:51So I went into the agency world for a while and learned a lot about the way that brands are built and how you message around brands. And then I became a futurist because I couldn't get away from the love of technology and what was coming next. And so I had a little run as a tech pundit and a technology's future person for advertising. And so I became a serial tech CMO. And then I'd done some consulting for BevNet because I've known the BevNet team forever. Eventually, I became CMO and product lead for BevNet. And for any of our UK listeners who might not be aware of BevNet yet, can you give us a brief overview of what BevNet does?

1:37I can and thank you for asking. BevNet CPG Media is a leading provider of daily insights, news, education, and connection points for the food and beverage industry, for CPG industry and beer included in that. We've got websites, BevNet.com, Nosh.com, BrewBound.com that you can visit every day for your daily insights. We've got a subscriber series to get deeper into those insights. We've got podcasts like Taste Radio, which is the number one podcast for anyone building a business in food and beverage. CPG Week for daily bites of news. The Non-Base Podcast, which really answers a lot of technical questions.

2:20And then the non-based platform itself, BevNet Live, NOSH Live, Rubound Live, which are events that help you connect. It's a really different kind of event for a founder or decision maker in the industry because you're not there to pitch. You're there to learn and you're there to find partners and take your business to the next level. And you're mostly US focused, but you came over to London recently and held a great event here. So hopefully we're going to be seeing more of you guys on this side of the pond. we love london london started to love bevnet because of the educations that we provide and we if you call our bluff we'll have a meeting with you as a brand and we'll talk to you about your business and we'll talk to you about what we think about it and where it's heading where we think it could head and give you some ideas for how to attack the u.s market and the first thing we always tell you to do is don't do it don't do it don't do it make sure you're very serious about it because it's basically another business.

3:18But I think we're going to get into that a little bit later. Yeah. So let's talk about brands and what makes a brand matter in 2025 or 2026, where we nearly are now. So you're obviously at the heart of beverage innovation, CPG innovation. You see it all, first-time founders, household names. What are you seeing now that truly differentiates the brands with staying power? The brands with staying power aren't that far from the brands with staying power, if that makes sense. So the ones that have been legacy brands, the brand, the newer brands that are coming out have some maybe take on that or familiar flavors or something that's recognizable because the key to having a brand with staying power is to have simplicity first and making it easy to explain.

4:15And we see a lot of beverages or foods that start with 20 or 30 value propositions and they're trying to say them all at once. And it's really important to slow down, make choices, and go after a particular niche of the audience. In the U.S., the market is immense. And as my old economics professor used to say, you don't have enough bologna sandwiches in your refrigerator to educate everyone. So brands with staying power figure out how to make one tiny tweak to a formula or some small addition to a known formula and they find their opportunity space. That's one thing that gives a brand staying power, simplicity.

5:12The other is backing. In order for a brand to succeed in the US, you need to have an army of support. And I'm not just talking about money, although the money is very important because that's where you're, that's what kind of fund the support. But you need to have quality partners in terms of just building your team, building out your distribution, building out retail. You need to have partners who can help you make the product, source your ingredients. It's just a very long list of things that you need to be able to be successful and have staying power in this industry. Like you might have a beverage that is the best idea and you just haven't been able to figure out how to pitch it properly or you haven't found the right partners.

6:05And so that beverage fails. I like what you're saying about simplicity. And I think so many successful brands now, when you look at it, like the idea is so simple. It's Graza, put it in a different format, squeezy bottle rather than glass. And then I think you always know when it's great, when you think, why has no one thought of that before? or that's the it's that simple that when you look at it in hindsight it's like obvious but just no one's done it yet and i think some of the most successful brands recently have had that they've done that small little switch of something that now feels obvious but just wasn't to anybody else yeah small little switch another product that did the poppy was originally called mother beverage and it was this sort of kombucha competitor and they pivoted into better free soda that had no sugar.

6:56They talked to us a little bit about what they should do. And we're like, John Craven specifically, it was like maybe six grams of sugar wouldn't hurt. So they did that and tastes great. They removed the ACV claims and stuff. There was a lawsuit that said that maybe that wasn't enough ACV for it to be efficacious. So they're like, eh, we don't need that anyway. It's just fun, better for you soda that really looked at the diet space and is trying to reinvented and everyone loves it and now we're seeing all these other great ideas come up in that space like xoxo and living things and hip-hop and which are three that i really love what do you think are the signs that a brand is going to make it like an early stage brand you've seen a lot come through the gates yeah i can do i can go one better and talk a little specifically about some of the signs that we saw and then, you know, things went well.

8:02First, great team in branding, the combination of those two, because I think brand at first is the people in your company and the product, and then your audience comes in and they affect it. So it's the combination of those three things that create a brand. So in the beginning, sure, you have control over your brand and you have control of your product. And then at some point you should allow yourself to lose control and let the people decide what the brand is and make it a brand for them, for their lifestyles. So a company that did a good job of that was HealthAid. They started off with this phenomenal team of Dinah Trout and Justin Trout and their friend Vanessa Dew, who they brought this idea for this fermented gut health drink, fun flavors, kombucha.

8:50and one of the things about that was important was that they had, at least in the US market, was that there was a strong competitor already in GTs. So they brought a little different take on it because they made it the traditional way. But I think in the beginning, it was like, they were talking about the gut health benefits and they were talking about it being a tea. And over time, they were able to just focus on two things that mattered, the gut health and the flavors. Gut health still, healing your gut, a big deal. And then great flavors, great taste, and just consistent product that doesn't explode.

9:31Although it does. Sometimes it does. And that's part of the fun of it. Having a great team, having great branding, being in a category where others are interested. Those are some really strong indicators that you have something. And then a little bit of news happening and people getting excited about it, first movers. And then of course, the most important thing is that you see some money go in from people who know what they're doing. I think that's important. There's certainly different ways to take investment. You can take private equity, you can take venture capital, you can take it from folks who know what they're doing.

10:08You can take it from folks who are going to sit back because you know what you're doing. So that just brings us to more of that backing idea of having people who know what they're doing is really important and an indicator of success in beverages. You have to have the right partners or you're not going anywhere. So we saw the kombucha space take off in the US and it makes you wonder if there is space for, say, derivatives of that. And the answer is yes, in the US. There's a founder called Rosa Lee who started a company to honor her grandmother's recipes. And she saw this opportunity to create a beverage in that space because people wanted the gut health, but they were not always sold on the flavors of kombucha or like the fizz of kombucha, which by the way, I love.

11:05And there are some great brands in the UK. One of my favorites is Fixate that make great kombucha, but there's also room for the gut health benefit, the prebiotic benefit that isn't a kombucha. And this brand that started off as Tea Crush is now called Wild Wonder. And Rosalie has done this phenomenal job of creating this brand that is happy gut, happy life. It's caffeine free. it's got prebiotics and probiotics and then she's got like this great institutional investment team 2.1 million dollars in from venture capital companies and she hones in on the simplicity is start with a flavor someone likes have a cool can if you're doing something different you know you can have the benefit but but make the flavor and what the beverage is your hero and that is a good recipe for at least seeing if you're going to be able to have a go.

12:05It's the same here. The flavor taste is king, right? And prebiotic soda is another one that's just another derivative of that. We talked a little bit about poppy, so we don't have to go too deep into that one again. But yeah, so there is a lot of opportunity in the US. And that's one of the things that makes people get big eyed about trying to get into this ridiculously difficult, but very rewarding business. Do you think that founder archetypes have changed over the last few years? So as the market changes, as the investment landscape changes, are we seeing a shift of the type of person who's founding a business?

12:48I don't think so. I think the entrepreneurial spirit is the same. I think we are seeing a lot of new, we're seeing a lot of founders who are founding cultural brands, which I really love. That's one of my favorite trends. It's weird that we have to call it a trend, but you're seeing people who are starting Asian brands or there's a lot of Desi brands that are coming up in the US that I love. Jamaican founders who are creating Jamaican flavors that are inspiring everyone to explore further into those cultures, which in my mind, at least, that's the key to world peace is everybody just understanding each other's cultures and having a sense of why people think the way they think and eating together.

13:39I think those are some really interesting trends that we're seeing right now. Do you think the role of brand architecture has changed, especially around purpose? So I think many years ago, no one talked about purpose and it became very on trend and got diluted a bit. Where do you think we are now and do you think it matters? What I'd say is that purpose is rushed often. And the thing about it is that you really need to have a foundation to both speak on and then also to give with in order to have purpose. So it's selfish, but I think in the short term, going too deep on purpose is something that will take your eye off of building the brand that can have purpose.

14:36I think it's important for a brand to have that as part of their DNA, foundationally, think about their purpose, and at some point elevate that purpose as part of the brand's purpose. it is just so much you have to do as a founder. And nobody is going to fault you for not being purpose-driven in the beginning when your mortgage and your 401k are on the line. And it's just a very difficult game. And so when I see founders that are spread too thin in their deck, I raise an eyebrow as to whether they can do all the things that they need to do in a day. Because one of the things that founders underestimate is when they get started is the kind of days they're going to have.

15:32There's no medium day. It's just highs, high highs, and low lows. And way too many things to do and not enough time in the day to do them all and not enough people on your team to do the things that you don't like to do which that's who you should hire by the way your first hires are the people that do the things really well that you hate you need to be done i think because we've had a couple of founders on the podcast recently who have been doing it for quite a long time now and their brands are successful and they say that actually doesn't change either like the intensity unfortunately it changed it the type of stuff you're doing changes, but the intensity of the days doesn't really.

16:16So it's a lot, it's a long haul. I think you can sleep when you sell the company. Maybe you might be starting your next one. Probably. It's probably, I think it's like pregnancy where you forget the pain and you do it again anyway. So let's talk about UK brands who want to come to the US and maybe vice versa as well because as we just alluded to a lot of uk brands dream of cracking the us it's huge market you've seen both sides i know you're a big london fan and a big football fan as well you understand our culture what are the biggest cultural or structural misconceptions do you think brands have when they look at the us oh i love this conversation so much the first thing is that But the UK brands, until someone tells them, I think they don't understand just how vast the market is.

17:13And in the UK, when I ask UK brands, what part of the audience are you going after? Unless you're living things in XO, they usually answer everyone. And they were living things in XOXO are two of the first brands that told me they were going for segments of the market, which I was like, well done. The brand's telling you they don't have a target audience. They're the ones I'm worried about. Me too. And I think there is a, I think it's because it's a little easier to go after everyone in London than it is to go after everyone in the United States. So the first thing I think brands underestimate is how difficult it is to figure out or how important it is to figure out which segment of the audience you're going after and focusing on that first.

18:11Because you can't really copy and paste your UK plan and put it into the US. The second thing is that I see a lot more UK brands open to the idea of going into multiple retailers quickly than I would recommend in the US. You don't want to go national in the US from the get-go unless you have the investment, the ability to co-pack, and the ability to distribute, or you're not going to like it. And the thing that a lot of brands in the UK and the U.S. don't understand is that getting into retail is just the first gate. Staying in retail is very hard and it costs a lot of money, a lot of time to demo.

19:09And so there's the other piece. UK brands don't understand how much time you're going to have to spend in the U.S. And if we look specifically at a brand like Ugly Seltzers, for instance, that had a great product, a cool brand, and they sent one of the founders, Hugh Thomas, over to the US. I always liken this to him being like Frodo in Lord of the Rings, and he's got the ring and he's got to come and throw it into the volcano, but he leaves Samwise and Merry and Pippin behind. Mates, particularly his co-founder, Joe, who that's Samwise in the story. And that kind of support, having that kind of support with you is huge.

19:53And then they try to take on so much of the US at once, and it's just really difficult. You have to find a market and then go concentric circles away from that market with a partner. And it's just really difficult to do. A brand that I've seen that I think is at least getting it right for now is the wonderful protein smoothie brand Grounded. Founder Gabriel Bean has a really good head on his shoulders, a quality plan. I still think he went into two huge markets It's too fast, but I think he's mostly focused on LA with one partner, which is Whole Foods. And that is a good strategy for trying to figuring out if you can make it in the US.

20:37And then you can put out feelers from there, have conversations from there, talk about things like, I don't know. I don't know if they need investment, but the best time to talk about investment is when you don't need it. So they could have those conversations and really get a sense of what it's like to take on the U.S. without taking on the entire U.S. So when brands think about launching the U.S. and get those dollar signs in their eyes, do you think about per caps? Actually, you should think of it in terms of cities or regions and then look again and look at those numbers and see if that makes sense.

21:15I think so. And I think that is largely dictated by where you can find support and where you could find support either from a retail perspective or from a co-packing perspective. You need to figure out how to minimize your COG. So if you're a co-packer, if you find a US co-packer on the East Coast and you're only on the West Coast in terms of retail, that's going to cost a lot to ship. You might as well be shipping it from the UK. those are things you have to think about. The country is enormous. The trends in the country are different depending on where you are. And the way that you message within those areas is their subtleties.

22:01And sure, you can create national messaging that can work. You can take on segments that have potential outside the market that you start in. That's what you should do. But then you should also be looking at and studying who else in that market is into your product. Another mistake that founders make is thinking that LA is at all representative of the rest of the United States. So different. Like they're so forward thinking, trendy, into trying everything that's new, fitness oriented, and in many ways leading the charge in terms of creating trends. but what about the stickiness? What about, is something that's sticky in LA going to stick in Topeka, Kansas or Montana?

22:51Put you on the spot now, if you were going to launch a brand in the US, where would you launch it? I would not launch a brand. You have to. I don't know. It depends on what I'm launching. If I'm launching a food product, if I'm launching a beverage product, where am I? Launching a gut house for your brand. A gut health soda brand. Oh my God. Why am I doing that? Why am I launching a gut? What did I figure out? I have a gut health soda brand that can teleport you across the country. So that's my one differentiator. Is that it? That is something that I would consider launching in LA, but I think a lot of folks would say I should launch it in Erwan because it'll be a trendy new brand, but I don't know.

23:32I like the grounded path. I like the way that they're launching right now. they had a partnership with Whole Foods. They got some data. They were able to get some data on how good their brand would do in UK. They had a strong partnership, backing. They knew that the product that they put out in the US would be the same quality as the one in the UK. And I really like that plan. All this advice that I give is with the caveat that I have never done what these founders do. I've been on cap tables. I've raised money at companies and I've won lawsuits with companies and sold companies. And I've given founders a lot of advice that they use and say thank you for, but I've never done what they do.

24:19So that's a really difficult question for me to answer. Fair enough. When do you think it's the right time for a UK brand to go to the U.S. I don't know that there ever is like a right time for any brand to build a beverage, but or to launch a beverage in the U.S. or a wrong time to do it. I think let's look at a brand like Something and Nothing that is getting some traction. They have this sort of art project can, great flavors, easy to understand. They made so many good choices. I love this brand so much. The flavors are good. Their newest beverage, their newest orange flavor, so simple. And it's orangina but cleana.

25:02And everybody knows what that is. And so they're doing some experiments with that beverage in Chicago right now, calling it not pop because we call it in the Midwest, they call soda pop. And I think when you have a good beverage, when you find good backing, when you have a good plan that doesn't require you, that's test-based, that allows you to get learning with the potential to spin it up into something bigger, better, beautiful, that's the right time to launch. So you have to have financial backing, distribution backing, retail backing, three of the four big things in place and figure out the other ones as you go, that's the best time.

25:56And it's difficult because you might have a trendy brand with a trendy ingredient that everyone says is the next big thing in the US and you're in the UK and you don't have the partners yet and you just really want to so you rush into the wrong partnership and take advice from the wrong people and your beverage goes nowhere as a result because you were desperate. I think it's a longer game in the US than you think. Sure, someone's going to come in and build that trendy beverage before you. Hopefully they do it before you do it. Don't be first. Don't be first. Being first is not good. It's not good because then you have to defend your position and you have to become the category leader, or you might go in there and learn a bunch of stuff that the next ones that come and go, Hey, thanks a lot.

26:50Now we've, we don't have to bleep up all the ways that you did. I bleeped myself. You don't have to educate. Another thing I've seen from UK brands that's different in the U S is that there's just a desire to crush every single beverage that's similar to yours. And in the U.S., your enemy is like big beverage. You're trying to take share from Coca-Cola or PepsiCo or KDP versus artists formerly known as KDP. Anyway, the big companies have ridiculous share and you need to take a little bit away from that share. And the other companies that are helping you build up the category are helping with the education.

27:34And by the way, you can be friends with them. You can be at least their frenemies. You can agree to have certain pieces of language that you use across the products, just like you don't exist because you want to be first. You want to be the only. That's not going to work in the US. I think that's a really good point generally about competition and remembering who your actual competition is and that you would rather have 5 % of big beverage than 95 % of that tiny little brand next to you. Of your new category, yeah. This new category that you invented that has 25 people who are interested in drinking every day.

28:18What do you think US brands underestimate about the UK?

28:31I think that they also think that they're going to be able to copy and paste their strategy. The best example of this is one you've already heard. Everybody's probably tired of hearing the liquid death story in the UK, but liquid death is huge in the US because they use this insanely creative and confusing and provocative level of marketing to get people to hold this can of water that looks like a beer and really aligned with the trend of people in all walks of life wanting to feel better. And yes, people who like punk rock, aging punk rockers like me and heavy metal lovers, et cetera, are drinking water instead of pounding beers like maybe they used to.

29:20And so this Liquid Death brand really resonates with them. And they took this brand over to UK, tried the same. First of all, they didn't put the same kind of oomph into the campaigns. So they did derivatives of their campaigns. I'd say liquid death light levels of campaigns. And you guys were just like, you know what? We invented this style of shocking people. Punk rock is ours. You can't come over here and overtake what, first of all, you can't own this style of comedy because we already do. And then you had others in the market like a can of water trying that we're already doing something ironic like that.

30:01And so they'd already seen it before. And so you really have to do a deep dive on that market and come up with a unique strategy to be able to take on the UK is the moral of the story. Yeah. I'm glad you said it because I've had to have a lot of conversations. Talk to Ruth about how to do it, by the way. Thank you very much. Perfect. It was a bit of a headache for us, obviously, Liquid Death coming in and out with it, because people then went, oh, they couldn't make it work. And you think there are some quite specific reasons for that. There are a lot of examples of brands who have made it work.

30:35We're very kind of warm recipients of US brands here in the UK, unlike some other European markets. If you get it right, it can be a great opportunity. But be American when you go into the market, I think is a thing because you guys think we're funny and quirky and stuff. And we think that you guys tell the best stories of anyone and that's your currency. And we can't tell stories the way you do. The multifacetedness of anything that happens in the UK is something that is a little more difficult to understand for Americans, but don't try to do that. Go in as an American brand and do your thing as an American brand with American Story and try to play against that.

31:15That should at least get you some trial. Yeah. Yeah. We did it with Pop Chips. We like lent into our American heritage. America got a good rep for doing certain things really well. So you might as well pay on that. We can snack. That is another thing that a brand who goes in the UK needs to understand, which is that if you, let's say you have an adaptogen brand. Okay. You have a brand that has adaptogens in your beverage and you're trying to go take your adaptogen beverage over the UK. Stop right there. You got turkey tail in that? Nope. Sorry. You're going to have to reformulate. Do you have an understanding of the efficacy of what's in that?