How non-alc brands can still win

0:00Welcome back to another episode of the Curious Consumer. I'm Nate. I'm Jenna. And we are the brains and bronze behind Express Checkout. Mostly bronze. Mostly bronze. We run a sub stack and podcast all around the world of consumer brands, retail, CPG, consumer packaged goods, any consumable products in your pantry, in your medicine cabinet. That's what we talk about. And we're going to talk about it today. I think to get us started, we should talk about Tractor Beverage Company, which is a brand that I feel like a lot of people don't know that they know. I think it's a really good category. Yeah, I think it's a really good way to describe it.

0:51So Tractor Beverage Company is a beverage company. They do beverages for food service. That is their main line of business. So they partner with. fast casual retailers like Chipotle. If you go to college, they're probably in your college campus, in your dining hall. They're at hospitals. They're probably at sporting arenas. They are mostly the beverage behind the scenes. They have branding. They've always had a lot of branding on their machines, but I doubt anybody really looked too hard at that. And this week, they launched their own retail-ready beverage called The Haymaker, which I kind of love that name it's such a fun name and it's really them leaning into what the brand is all about so as nate said they started in food service so in this case it's like the fountain drinks are this brand tractor beverage company so fountain sodas at these places have definitely had the like specifically the sodas that are at chipotle and i i've noticed that they say that they're cane sugar sweetened and they have they smell cola with a k yeah exactly love when there's cola with a K.

2:01They have more better looking branding like on the fountain itself, but they don't sell them in bottles or cans. So most consumers are probably unfamiliar. But this brand like got all of its business so far from food service, which is a really interesting way to start. Usually like, I mean, the fountain sodas that we're all familiar with are like Coke and Pepsi. So they didn't, they got their start from being in bottles and cans and then made their way to food service this brand did the opposite thing and i think that's really smart because they were only really competing against the big guys they weren't competing against all of the smaller buzzy organic better for you sodas that are on shelf at retail they were competing with the fountain soda brands yeah yeah and i think what's cool about them too is that they've like always been sort of this um straight from the farm working with farmers healthier uh beverage company that like now is so rampant and it feels like also over the past few years i've seen tractor beverage company come up a little bit more and maybe this is because we talk about cpg products and beverages for a living but i feel like they've been branding themselves more explicitly lately and now they have a beverage going into retail and it's like making real news headlines which really cool um and it it looks tasty like i love a little sparkling tonic it looks so good yeah so it's um haymaker is a apple cider vinegar based sparkling tonic um and i think what's really oh it's also launching exclusively at sprouts which is cool um and makes a lot of sense i think because it's this like organic little like crunchier branding that i think will do really well at sprouts yeah um it's also farmer founded and employee owned but yeah the drink itself is apple cider vinegar based.

3:56And I feel like I've seen a lot of that with like, I mean, there have been like kind of kombucha brands that are leaning in that direction and they're more focused on gut health, but this isn't like making health claims. It's just like, this is a yummy traditional beverage that farmers apparently drink and that's how they're marketing it. And I kind of love that. No, it's like the opposite of what a lot of, like, it lets the consumers sort of put on it what they need to put on it but they probably have a lot of learnings about marketing to a mass consumer and just to anybody from whatever branding they do on their their fountain machines at a chipotle at a university dining hall they they probably have a lot of learnings from them they've they've been watching a lot of these brands do it like obviously poppy launched as an as a apple cider vinegar beverage mother um and they've completely sort of pivoted from that so it's it it's a very interesting move and um i think it also is fun that they're all that it's they're leaning into the farmer aspect of it as well i also mentioned it's not really focused on being like a non-alcoholic and i love what you said about how like it just this lets the uh consumer decide how they want to use it unlike a lot of other brands that launched these kinds of drinks as like a non-alcoholic alternative which does lead us actually to the next news item, which is around non-alcs.

5:22So as much as we love that this brand didn't position itself as non-alcs, because we think there are a lot of those in existence right now, there are, again, some really great non-alcoholic beverage companies, including Proxies, which is a maker of non-alcoholic wine alternatives. And they just or they just acquired the mocktail brand, Avec. And so they're going to launch their own canned non-alc drinks. Look, I think, you know, Avec, in the article, it seems like they acquired a lot of the assets to that company. Avec, one of the founders, Alex Doman, he went over to start Stiller's, Ben Stiller's soda.

6:01Look, I really liked Avec and I was sort of sad to see it go, but it's nice that it's getting another life with proxies. I think I'm curious to see what they do with it and if they're going to rebrand it, if they're going to have any specific positioning to that product to make it maybe more unique. Yeah, it also, I mean, that wasn't the only non-alc news this week either. Apolos, which is a spirit non-alc, secured$5 million. So they got some funding. And again, like, it's been interesting to see all of this non-alc news because from our perspective, this is a category that has been kind of, I wouldn't say dwindling, but plateauing.

6:45And I know you talked to Victoria from Dry Atlas about this. I did, because one of the things in the Aplos press release in the story was that, obviously, they're in a couple thousand doors. They're in like 2 ,000 retail doors, but they're in a thousand on-prem locations. So that means at restaurants, at bars, at hotels. Restaurants and bars is what on-prem really means, on-premise. And I asked her, I was like, well, what does she think about this space? So Victoria runs Dry Atlas, which is a resource for non-alcoholic beverage enthusiasts, is what it says on its substack. And it's a great resource if you're curious about the NA space.

7:26Let me pull up her quote right here, that these non-alcoholic founders have poured a lot of energy into retail and direct-to-consumer. But a lot of them don't really have the marketing muscle to drive those retail sell-through or to lift average order value on direct-to-consumer to offset any of the shipping costs. Because Apolos and a lot of the NA brands, they're not always in cans. And even if they are in cans, liquid is heavy to ship. And heavy means expensive. So shifting to on-prem does a couple things. One, it's really cheap and easy to drive trial. It's in a location and a placement where it's natural to drink that thing.

8:07And you have somebody sort of educating you on the product a little bit more than like, if you're just in a retail store, you'd be like, oh, this is just overpriced juice. But if you have a bartender or a NA sommelier, potentially, just telling you about the products and pairing it with the right meals, I think it could really help the category actually get a little bit more legs underneath it and give it a little bit more validation to the consumer. Because I think right now the NA space is in a bit of a funky place. Like, NA beer, crushing it. I think that's because it's really easy to brew a beer and then remove the alcohol.

8:44Like, that has been proved. Athletic is doing really well. Bureau, I think, is already over an eight-figure business. Like, that is – they're growing a lot. And the NA beer space is really easy to, one, grasp what you're drinking from a consumer perspective, but also to produce a product that's good and a very one-to-one match. Like most of these NA beers, pretty good or great, especially athletic, which is like one of the best ones. I think with a lot of the other products, it's just not so clear the use case for consumers. And I feel like it was thrust upon the market probably too fast. Like even if you go to a bar, you see a couple brands, you see Pathfinder, you see Seedlip.

9:31And I think it needed more time to sort of grow and mature within the bar and restaurant scene to give it more validation. And to also like for people to understand the value to them beyond just like, okay, this is not out. Because like, you know, a lot of good non-out stuff is like Diet Coke. Yeah. And it's I mean, because like a spirit requires some crafting, usually like very few people are, you know, drinking their spirit on the rocks. It's not like a drinking it out of a can experience in the same way that athletic brewing is, which the format is like really understandable. It would take a lot, I think.

10:13I mean, I actually don't really even know the history of how like alcoholic spirits really started making their way into the home. But I would imagine that they took off via on-prem and people trying them in a restaurant and then being like, oh, I wonder if I could be an amateur bartender at home. And the same thing does need to apply to non-alc because these are spirits. They're not drinkable alone, typically. So I totally agree. I think this makes a lot of sense that this is kind of where non-alc is shifting. It also makes sense that a brand or like proxies would want to work with a brand like Avec because, again, like a canned drink is just a more obvious use case.

10:56And I think they do really well with that. But really, yeah, interesting point on how certain like subcategories within this category just like make more sense. And I actually, this is like such an easy transition to the next news item because we were saying that this is pretty analogous actually to what we're seeing in plant-based, which is that plant-based is, as a whole category, is struggling. There's a lot of data on plant-based brands in the U.S. market just not doing well in the past few years. We know this from Beyond Meat's stock plummeting. Meaty Foods had some crash and burns, maybe a potential resurgence, but we're still tracking on that.

11:42And yet there's one subcategory within plant-based that seems to be at least relatively steady, and that is plant-based milk. So Danone, oh my God, Danone? I'm going to say both work. Danone, which owns silk. Yes. I can say the word Silk. You can say the word Silk. That's right. Which owns the brand Silk, is launching a high-protein version of soy milk. And this is really interesting because, again, like plant-based milk seemed to be doing really well. And plant-based milk seemed to be doing well by comparison to the rest of plant-based. Yes. But we haven't seen a ton of new innovation in plant-based because the category is struggling.

12:26So this was a headline that felt like it came out of nowhere, even though there's high protein is like in every other category. But it makes so much sense because. So much sense. Apparently only fewer than 1 % of protein focused innovations have been occurring within plant based drinks. And so there's a white space because consumers are still picking up their oat milk. They are still picking up their almond and soy milk, even though the plant based category as a whole is not doing so well. And so this is an opportunity to match the trend of high protein to a subcategory that does seem to be pretty steady.

13:06So 13 grams of protein in a plant-based milk, I actually think has some potential to do pretty well. Yeah, I think so as well. I mean, I was in Whole Foods the other day and there's a whole plant-based milk refrigerated case just for that category. So it's like clear that that and then the plant based cheese is like much smaller and the plant based meats even smaller than that. I think also plant based milks have done well. One thing's to like Oatly. I think Oatly did such a good job. Obviously, there's been soy milks like that and almond milk around forever. But Oatly has done like the most for that category.

13:44I think it's similar to what Athletic did for NA beer. Like it just – the product market fit just came together so nicely. And it's partially because of use case in coffee shops. It's a habitual product. Like there's a lot of reasons that it just worked well. And yeah, there should be more proteinified plant-based milks on the market. And there's a few, but not like this one feels specifically unique. I think one, because it's a higher amount than I've seen on other. It's usually like I've seen like eight grams or something like that. But this is like very clear, clear. It's clear who they're trying to target with this one.

14:28It's also a lot higher than dairy. And I feel like that's going to be a really interesting competitor because the whole thesis around plant-based now is it needs to be as good or better than dairy. to ever or then it's like whatever animal-based counterpart to actually succeed and in this case it's competing with just normal milk um and i do think actually like these macros will probably stack up to be even better so it will be interesting to kind of test that thesis that so many plant-based brands have been saying of like if we're ever able to achieve one like taste and macro or like nutritional parity and price parity will we be able to like actually see success.

15:10And I think this will be a really interesting test of that. I don't know if we can say taste parity here, but I also don't think people really love the taste of normal milk that much. So that's also why alt milk kind of had a leg up, I would say. I'm excited because I try to be like mostly plant based. And so I am always being asked, like, how do you get enough protein in your diet and here's another thing i can use to be like well did you know right we'll see how it goes um let's move on to our next news story oddity so oddity is um the parent company of il maquillage uh and the skin and hair supplement brand spoiled child they just launched uh method Medique?

16:06Is that how you pronounce it? I guess it's like Method IQ. I think it's like Methodic, but with an IQ instead of IC. Okay, Methodic. People, don't sue me. They're offering prescription over-the-counter medical-grade skincare products for everything from acne to hyperpigmentation and eczema. It's basically a new platform to directly compete with him and hers in a$100 billion plus medical skincare market. Very interesting, but kind of makes sense for this company to go this route. Yeah. And it's not just that they're launching the line of over-the-counter medical-grade skincare products, but also the telehealth platform that goes with it to offer prescription skincare products.

16:52So all of those things are making these products that were otherwise not very accessible a lot more accessible. And the platform slash company, Hymns, has done an incredible job of really launching this category. I would say like this mix between actual products and a platform. Right. And it needed some competitors, honestly. So I'm excited to see a competitor. And I'm excited to see this as just – I said in the newsletter that we're just seeing such like a stratification in skincare of either people leaning fully into this like all natural. like I'm only going to put beef tallow on my face movement or fully science-based medical grade skincare, which is what this is.

17:40And these two camps, I think we're going to start seeing them get even more polarized and we'll need more competitor in each. So this will be a really interesting brand for the more like science-based. And I also mentioned, I think that the brands that kind of sit in the middle that aren't like fully natural or fully medical grade will probably actually start to struggle to capture customers. I don't know. I actually kind of think that this direction will actually be better for brands like a La Roche-Posay or newer brands like an Experiment or Prequel, where there's a lot of science and derm backing to it.

18:16It's like the exact opposite of all the tallow stuff and all the clean beauty that's just probably not as effective. but I do think you're right that there'll be this like really strong bifurcation where people are like if I can't pronounce it I'm not using it even though sometimes that word you can't pronounce is what you're using they are just using a plain English term right and and then this more like more scientific and more um derm backed stuff and like I feel like we're seeing that also just in the discourse online where there's there's the the very crunchy people who are like screw this it's got a X, Y, and Z in it.

18:56And they're just saying the most uneducated thing you could possibly imagine. And then there's just like a very educated person being like, here is why this 30 % glycerin hydrating serum is great for you and why you should be using it with this other product. I think the, I actually think the brands that are even in the middle of that will actually probably have a hard time where they're not quite science backed in any way They are derm backed, but they're also not quite super clean ingredients. I think I would even narrow it a little bit more. I think you're right, but I would narrow that even more.

19:32I think we're going to go more of the extremes almost. But I love a brand like a prequel or experiment where it's having a little bit more fun with the science nature of it. It's not too stuffy. It's not too prestige either, which I think like a La Roche-Posay or some of the more, even some of the more like upscale brands, like a prequel and an experiment brings somebody into the fold who maybe doesn't want quite the clean beauty stuff or is coming from that side, but is just completely put off by like the uber medical stuff. Yeah, absolutely. Yeah, it's interesting. You can be science fact and like medical grade and not look clinical or sterile.

20:26And that's how brands like experiment are doing an incredible job of that. And the other thing is experiments, actual messaging is inclusive. Like, it's not just like, yes, this is what this is called. And if you don't understand it, you don't understand it. They're like, actually, let's just educate consumers. and that's something that i think the more like natural side of things has done really well is they've done a really good job of educating consumers on why products like whether you agree with it or not like beef tallow could be good for your skin and i think that like the science brands actually could learn a thing or two from making their ingredients feel more accessible to consumers through like more educational messaging yeah it's it's it's so funny because it's like it's fear-mongering on either side both for good and for bad and you kind of need to yeah you need you need to play the game a little bit on both sides like you're you're so right about like a beef tallow whatever or like a super clean beauty or skincare company they are really good at educating whether it's accurate or not is is besides the point were we to say but they're doing the yeah they're doing that yes yeah that's and they're doing it and with using like ambassadors who look like people that are using the probably you know like it's they're not like a stuffy scientist or whatever it might be but i think right they're not in the high castle about x y and z they're like okay we'll we'll actually open up our our brains to you in a way that's accessible yeah yeah but clean beauty is having a moment and one of the people at the or one of the brands at the forefront of the clean beauty movement is credo beauty um credo is a retailer they also are they have their own brand um yeah and they They launched as this, like, as, like, the clean beauty and skincare destination.

22:33So that's kind of how they started. They got all of their brand loyalists. Like, they really do have a loyal following. I know there are a lot of people who will only shop at Credo for their beauty, skincare, hair care products. So they just did something really smart. And they launched something called Credo Qualified, which is a certification program, not for brands, but for contract manufacturers. So for those who don't know, contract manufacturers, usually in Food & Bev, we call them comans. It seems in beauty they call them CMs. Same thing. Just a way to shorten it. Basically, brands don't typically manufacture their own products.

23:12They often go to a contract. They contract a manufacturer. And these are the people producing the products. And Credo is saying that a lot of the brands that either are already on their shelves or perspective brands who want to be on their shelves have been asking them, like, who should I go to to manufacture my product? Because they can't tell. They don't know who is legitimate, who's actually going to, like, source the ingredients in the right way, who has sustainable manufacturing processes. And so Credo decided to launch a certification for contract manufacturers that will scout out kind of like a list, I mean, essentially of approved Credo qualified manufacturers so that brands know who to go to to manufacture their products.

24:02And they're already known for having like really strict requirements for their brands. This is interesting because, again, it's going beyond the brand level. And it's this like values-based certification for the manufacturing side. I think it's very interesting. It kind of feels reminiscent of like a little bit of like earlier Whole Foods vibes where you can really only be in there if you have the certain qualifications. And I think something else we talked about that we put in the newsletter was the fact that also like this doesn't exist much in the food and beverage space yet. I thought that was a really interesting point.

24:39Yeah, I did some research on this because I was like, certainly it exists in food and beverage and it doesn't. There are tons of certifications that brands can get like organic, non-GMO, fair trade, B Corp. But those are all at the brand level. They're not manufacturer level certifications. And it almost makes me a little angry because these certifications cost a lot of money and it always falls on the brand to get them. And I kind of wish that more of that cost fell on the manufacturers and it would just be so much easier for brands to find manufacturers that are values aligned as opposed to just kind of like hoping.

25:20And I don't know. It's just interesting. I mean, for Food InBev, probably not so much for beauty and skincare, but the Food InBev contract manufacturing world is just like so old school. Like, I'm pretty sure a lot of this stuff is still done on pen and paper. So it's like, OK. I mean, I 100 % agree. I just think for our audience, if they have no idea what's going on in the food manufacturing world, it's very old school still. Very. It's very old school and it's hard. but I think it's really interesting for Credo and I think it's a good step I think it's also good I like that a retailer is just sort of exposing consumers also to a little bit more of the behind the scenes stuff yes which I think is look we're called the curious consumer for a reason our thesis is that people want to learn a little bit more about this and one of the ways you learn more is it's not just the marketing and why something's branded It's like, why and how is something made?

26:22People should be curious about where their products are coming from. They don't necessarily need to know the factory name or the zip code, whatever. But like, it's good that Credo is putting some onus on the manufacturers to be like, you're good. And then it drums up more business for them. And it's all the positive cycle. But it's really cool that they're leaning into this more behind the scenes look at these brands. because clearly people are also seeking it. Definitely. I mean, it sounds like it's more the brands that are seeking it right now, but I think that's just because consumers don't know that brands don't produce their own products.

26:59And again, like exactly what you said, I think that's like a huge step in itself that we are now putting the onus on manufacturers for these. And of course, like Credo is going to benefit from this too. Certifications cost money and they will make money from it, But it seems like it will be for the greater good of brands and consumers alike. So pretty cool. And hopefully it will help combat greenwashing. That's one of the most exciting pieces. I like that call out a lot. I thought that was really cool. Because it feels like something that as a society that makes products, we've sort of stopped talking about a lot.

27:39Partially because a lot of consumers just don't purchase things because they're sustainable. It's starting to change, but it's been diminishing. And I really think something about greenwashing or something about just more sustainable practices within the consumer brand world, I unfortunately think it should just be a staple that if you're launching a brand or operating a retailer or something, Like the onus, unfortunately, I think needs to be on them a little bit more right now to produce more sustainably, to package more sustainably, whatever it is, even if it's a minor thing. And Credo sort of trying to combat greenwashing side of things, the lying about being sustainable, I think is really good.

28:30Maybe could backfire. Maybe it'll make a brand look bad. but like if they're lying about being it's fine if you're not most brands are not sustainable most most of the stuff is just not it's just not how it works but don't say you are when you're not that's the bad part lying hot take lying is bad hot take um yeah but i'm i'm excited to see where this goes and should go into credo uh again i've been in a while i like the credos shopping experience great for sam great for sample size of products they're they're sort of like trader joe's where they'll sort of let you try anything you can walk away with a little sample size they'll like make it for you it's really fun yeah you can try anything at trader joe's wait you didn't know this yeah that was my takeaway no if you go to trader joe's and you're like i want to try these crackers they can they'll just open it for you and let you try it do the people know this no i don't think so i have never known like yeah you can get us like y 'all y 'all have to listen to the trader joe's podcast i'm pretty sure i learned this from the trader joe's podcast yeah okay of course they've they've samples you can try anything in there they'll let you they'll just open it for you they make plenty that's so news to me wow i'm okay wow that's shocking but yes here just um our next story also kind of in skin care and beauty and sense body care what's in the name bath and body works coming to amazon coming to amazon near you i mean obviously they've they've probably been sold on amazon but not by bath and body works um which is one of the reasons why they're they're launching on amazon also because their stock isn't doing so well the business sort of needs a revamp and the new CEO is testing a few things out, including launching Bath and Body Works on Amazon, which is very fun.

30:28It is fun. It's interesting that body care and fragrance are two categories that are like doing so well across the board right now, like literally are what's keeping Target beauty section alive. and yet this company that has been known for those two things for a very long time is struggling um but yeah they refer to there was a lot of reselling going on as nate mentioned on amazon already they call that gray market sales so basically people were buying bath and body works products and selling them on amazon anyway amazon is trying to help beauty brands combat this um by now launching something called the amazon premium beauty store which is like specifically so that like certified beauty brands verified skincare beauty brands um can exist on amazon and not be resold so that will be interesting to see if like that actually does take off um because even like people can still compete on price so i don't know yeah i i think especially with like bath and body care and works.

31:42Like I know that my wife won't buy skincare on Amazon because of the fear of like, what if I get something that's not what it says it is, whether it's been used, whether it's just not the right product on the inside. Like I think the verified, especially for beauty and skincare, the verified aspect and the verified program is really smart, both from like just protecting your brand, but also protecting your brand from people getting products that say they're your brand and are not the right products or have a bad chemical in it or whatever the situation is that makes the consumer not happy with you.

32:24And it's not going to be on Amazon. It's going to be on you, the brand. And this has been an issue with Amazon for a long time, probably with any third-party marketplace. And I'm sure Target and Walmart and other third-party marketplaces that are launching will do what Amazon is doing. But Nike, a few years ago, pre-pandemic, removed most of their products from Amazon because they're like, our brand is not doing well. But now they're coming back because there's been so many of these third-party sellers in this gray market that we've been talking about. So it's been hurting their brand recognition.

32:58They're like, okay, well, we actually should be on here because everybody shops on Amazon, no matter how much we all complain about the UI or fake deals or whatever. Everybody's shopping on Amazon. I go out into my lobby right now in my building. It's just Amazon packages, just Amazon packages because it's convenient. It's cheap and it's all right there. So might as well embrace it. And I think for a lot of brands, And they need to be on Amazon to take control of their brand. They might not get the first-party data. They might not get what they want out of it. But they're going to get eyeballs.

33:38They're going to get sales. And you should protect your brand because there's people clearly searching for it on there. Yeah. I think the question will be like, is this enough for Bath & Body Works? And I don't think so, which is, again, really crazy because it is in a category that's doing really well. I mean, just look at Touchland, which is a hand sanitizer brand that all they did is just it's just a different format. It's like the skinny spray bottle as opposed to what Bath & Body Works was doing. But Bath & Body Works like started the weird sense of hand sanitizer. Oh, my God. I remember the viral – before viral was even a thing, just popular in my school.