Inside the Mission Behind the Kenetik Brand (With Peter Bayne)

0:00This show is brought to you by the Global Talent Co, a marketing leader's best friend in these times of budget cuts and efficient growth. We help marketing leaders find, hire, vet, and manage amazing marketing talent for 50 to 70 % less than their U.S. and European counterparts. To book a free consultation, visit globaltalent.co. Hey, everyone, and welcome back to the Future of Consumer Marketing. Today, we're speaking with Peter Bayne, co-founder and COO of Kinetic. Peter, what's going on? So happy to be here. Thanks for having me. Yeah, really looking forward to this. How'd you get into this world?

0:33Tell us the backstory. I've sort of always been entrepreneurial in my life. And the first way I could leap into it was actually in the restaurant and bar business. And I had a little nest egg saved up to do sort of the classic thing of, you know, buy a house or apartment or something like that. And I did the opposite of it. I did exactly what my parents didn't want me to do. And I bought into a bar in Washington, D.C. and I was just really good at hospitality. I loved meeting people. I loved building relationships. I loved trying to like win people over quickly and turn them into regulars. And this was sort of, I had an opportunity in front of me and I just leapt in head first, blindfolded, handcuffed straight into the deep end of the restaurant business.

1:17And it's brutal. It's super competitive. And it was a sinker situation and I swam. And before I knew it, I was opening up a new one every year until I'd accumulated like eight, nine, 10 different businesses. And it became less about the restaurant business and food and beverage and beer and cocktails and more about running an actual business and, you know, taking care of that immense juggling act. And so I really started to get into health and wellness then and looking for ways to get more out of my day. Everybody's got the same 24 hours, seven days a week. But like, how do I really maximize it?

1:56So I was messing around with diet, exercise, just experimentation, I guess, biohacking, you know, 10 years ago, I didn't even know if that was coined, but that's sort of what I was looking into. And one of the diets that I ran into was the ketogenic diet. And I tried it and I like suffered through it and like got the keto flu. And when I got to the other side of it, though, I felt really good. And I was recovering better after working out at the gym. But what I really noticed was this cognitive boost that was happening. And I was like, shit, I'm smarter. I feel like I'm able to like multitask better.

2:31I am like just more efficient in the workplace. I'm feeling great. But the diet was terrible. And I was just suffering. And I was like, I've got to figure out a way to get these ketones without having to be on this crazy diet. And that was the beginning of the search and creation of Kinetic. So now I guess that was back in 2018. So that was sort of the very beginning of it. And then the pandemic happened and that shut down my entire restaurant empire at the time. And I thought it was like over, but it actually was an opportunity for me to pivot and spend more time developing the products, the recipe, the efficacy, the branding, the million freaking things you have to do in order to launch a product.

3:15And I did it. And we're still alive and kicking and growing at a rapid clip. And it's exciting because we have so many great customers and a wonderful community and people's lives that we've changed. And it's changed my life. I just feel very fortunate and blessed to have figured out how to make this work, how to transition during a very difficult time globally with what was happening and to land on my feet. I certainly landed on my head a couple of times. It was like getting knocked over by a wave and that'll probably happen again. But it's been a really rewarding experience developing Kinetic and the team we've built around us.

3:53It's very exciting. You mentioned 10 different restaurants there that you opened or I think nine or 10. I'm sure you had a playbook by the time you were opening then you had a system to open them. With this, where do you even begin? How do you start formulating the product? Where do you even start? Well, so with the restaurants, I kind of cheated, actually. I knew from a young age, finding mentors is the best way to go. It allows you to sort of fast forward the learning process. And so in the restaurants, I actually turned my boss into my business partner and convinced him that I would be, you know, sort of the next generation to come up underneath him and allow him to enjoy his vacations and his boats and to grow together.

4:32So I was able to leverage everything that he had built beforehand. And that's how I was able to really take off in that world. So I needed to find, first of all, a really great partner in developing a ketone beverage. And in that, I actually had a family member who I'd had my eye on for a while, my wife's brother, Devin Price, who, you know, I'm a pretty smart guy. But this dude went to Berkeley and then he went to MIT. and I just remember he was getting like a degree or master's in engineering and he was like building some space radar thing like total nerd and then my wife was just like oh he decided he had some extra time so he's just throwing in an MBA and he's gonna do a double master's I'm like this guy sucks like jeez I just like there's just some people they're just so smart and so me being the smarty pants I am I was like I gotta partner with this guy I gotta figure out how we can create a business together.

5:29And he and I were both really interested in the health and wellness. He was doing a ton of CrossFit. He was like a top CrossFitter in the state of California for a while there. And we both just really dug into the science of ketones. And as we were doing the research and learning about the studies out there, we could just fall deeper and deeper and deeper into that rabbit hole. So I found a really great partner in him to help with because going alone is hard. But then we wanted to bring somebody else in who sort of had been in the beverage space, because while I was selling beverages within the four brick walls of a bar or restaurant, like getting on the store shelves or doing direct to consumer, messing around with Shopify and Amazon and all these different sales channels, it's nothing that I've ever done before.

6:14So we began looking for that partner to bring in who could be a mentor, who's been down the road, who can help us avoid the pitfalls that are so costly, because even a little trip and stumble can be like a six-figure disaster sometimes. And we found a partner, a gentleman named Cliff Morgan, who had started an energy drink called G Fuel. And he had grown into D2C, doing an enormous amount of sales through Shopify and Amazon and working with a ton of influencers starting 15 years ago. He almost developed influencer marketing. And so he brought with him his Rolodex and, you know, co-packers and comments and knowledge around distribution and everything along those lines.

6:57So we didn't meet him until three years into the project. But it was all just sort of, you know, the problems present themselves and they're always coming. And where do you find the solution? So we had run into a bunch of problems. We're like, you know, Cliff was our solution. So having a good team around you of smarter people is what I'd recommend for anybody who's trying to be an entrepreneur. Were there any like mad scientist moments where you're sitting there in the kitchen and like just like something explodes, anything like that? Oh, my God. Yeah, there are some disasters. So my house, my dining room table was definitely sort of the small scale lab as we were mixing together different active ingredients.

7:36And the ketone itself is called DBHB acid. And so it is very acidic and you need to find a way to kind of make it not so acidic so people don't need to eat a Tums right after having it. And so you balance that out with some buffers. But if you mix things in the wrong order, it becomes like your school volcano project. And so we noticed that a couple of times as we were using our beakers and whatnot and this magnetic spinners. And we had our little, you know, our mad chemist lab set up there. people often referred to us as the Breaking Bad crew when they'd come and see all this. And it wasn't too bad, but eventually we took over my entire basement and I cleaned it all up.

8:19And we were doing sort of a larger scale production process to do our first test run and to see what people would think of the drink. And there was lots of disasters there. But I remember one time we were mixing in this 40 gallon barrel and I had basically like an industrial paint mixer and I'm over it and like all clocked and face masked up and we're mixing it. And we mixed, we messed up one of the ingredients in the order and we poured in the buffer at the wrong moment. And all of a sudden this like big balloon barrels overflowing and there's like ketones running across the floor. My wife's like, I hear a lot of noise.

8:56I was like, don't come down, don't come down. It's okay. And then it got so bad. It's like, come down, come down we need help we need help so and when you're dealing with very extensive ingredients and you're washing it like literally pour down the drain it can be painful when you're bootstrapping a business like that so yeah we never made that mistake again so at what point did you have a product that you could actually sell was it three years into the journey after you met cliff at what point were you selling we started selling during the pandemic we had many several iterations of the product.

9:29But because supply chain got so messed up during the pandemic, it was very difficult to source ingredients, to source a co-manufacturer. Anybody that was producing food at the time or beverage, they're not like giving tours to their facilities and letting people in. I mean, you're barely allowed to leave your house back then. So it was a real challenge to figure out where we can make this. But even before we got to that juncture, there was no hands left in the country. There were no aluminum cans anywhere. In fact, we called Ball. You've probably seen, you know, Ball Jars and whatnot. They also are a big producer of aluminum cans.

10:07And we're like, we'd like to buy some cans, do some test runs. We're like, sorry, Bell's Brewing just bought the last of them. And the reason they were all going away is because none of the breweries were spilling kegs anymore. Because there's no stadiums or restaurants. None of these large format spots were buying kegs anymore. So everything was going into aluminum cans. and people were drinking like crazy during the pandemic to kind of wash away the bad spirits of it all. And there was no can. So we had to launch in glass bottles. And we were basically mailing six and 12 packs of glass bottles all over the country.

10:43And as you can imagine what would happen, the UPS national soccer team would get ahold of it and they'd be playing our package and being kicked down the street or thrown up on people's porches. And we get an email of somebody holding up like a soggy cardboard box full of broken glass being like, can I have my 50 bucks back, please? So there were a lot of challenges during the pandemic to figure out like, hey, you know, how can we make this taste good? How can we package it and produce it? How can we get it to people's doorstep safely and intact? It's a carbonated beverage, too. So every time it got dropped, it was like leaking a little bit and just a little leak would get absorbed by the cardboard and that weakened the structure of the cardboard.

11:28And that would allow the bottles to bang more. And then eventually it just became this cascading effect of a disaster at the end of the day. But as things loosened up, we were able to get into commands and get all our processes put in order. We still had to go with glass bottles when we launched because it's just impossible to get aluminum. them. There's still too much demand out there from the big players. We were able to work with some food scientists, really refine our formula. It had a very sweet tart flavor initially. So it was a little bit of a shock to the tongue, which was like actually pretty good.

12:02Like we tasted far better than any other ketone drink or product in the market because a lot of them taste frankly like bile or nail polish remover. And we taste a little bit like a sweet tart candy, but people are like, oh, that's pretty tart. And now we've figured out how to get it more balanced and it's ready for the mass market. So it's a really enjoyable drink. My litmus test was always like, can I get my youngest son, Micah, to drink it? It was kind of, I called it the life cereal test. Like Micah, he likes it. And like, yeah, so I use my kid as a guinea pig. That's great parenting right there.

12:37But you know, it works. And you know, that was important for us because we wanted to create a product that was highly effective. but also tasted great. And so we've been able to figure that out and deliver that. And that's what's allowed us to just boom. And what about on the go-to-market side? Was it direct to consumer? Was it retail? What was the early strategy? Strictly direct to consumer. I just knew, I mean, I was essentially running retail on-premise spots, not necessarily retail, but, you know, through restaurants and bars. But I know how competitive that game is. At one point before I was looking at Kinetic, Like I was looking at, you know, producing my own beer or spirit or something like that.

13:19And I was just like every three months, another product was coming out. And this one had an orange label and this one then had a pink label and this one had a hologram on it. And it was just like then the consumer I could see was just always going for the shiny new object. And, you know, the reps would come in and they'd sell it at discount or do tastings and had a bunch of marketing dollars before it. And that would dry up in six months. And it was hard to maintain brand loyalty. So you really wanted to make sure that your timing was right, that you had an educated market that just understood why the drink was good for them, why they would want to keep consuming it and not just move on to the next thing.

13:56So we were very deliberate in holding off on retail. And in fact, only today and the past couple of months are we really starting to explore on shelf and doing some tests in some grocery stores. we've been pushing into specially running and bicycle stores because we really targeted the endurance market first but now that we've got a recipe that's more ready for the mass market we're going in the supermarket but it's a big scary beast out there and you know you can get a lot of cash tied up in inventory you got to have boots on the ground and the different regions you're going into and making sure they're educating not only that you know your potential end consumer, but also the sales team at each store.

14:38And not everybody knows what a ketone is or why is it good for you? So we're not just another caffeinated sugary drink that people kind of know and they're just looking at a new bright, shiny label. There's more of an education process there with it. So we were really slow with it deliberately, but also people are used to buying things online. So doing direct to consumer, you get to know your consumer a lot better. You got their name, their address, their email address. You can reach out to them directly. you're actually able to do a lot more education that way, but learn more about who your customer is too.

15:10In retail, where do they put you? Yeah. So we're in the functional beverage category. So you'll find us around the other adaptogen drinks or the healthy sodas around poppy. And we don't want to be, we're not an energy drink because we don't have caffeine. We don't have sugar. We're not trying to touch that market at all. I mean, that's Red Bull's got a monster Celsius, they all have the caffeine on lockdown. We're not really interested in adding caffeine to our product. And our whole goal at the beginning of the day was just to deliver the best ketone product and stay away from sugar and caffeine.

15:44We want something that's really healthy for you. It's not going to jack up your heart rate. It's not going to give you a crash later. And it's going to make sure you can fall asleep because like all those drinks do are like basically stealing from tomorrow to help you get through today. And sleep is the most important thing. I mean, as any, most people are learning these days, as soon as you disrupt your sleep, like you're just not at a hundred percent the next day. So all those heavily caffeinated drinks are really challenging. We don't want to be around them. We don't want to be compared to them and selling next to them isn't where we want to be.

16:15So we're very careful about where we're getting positioned on the shelf. I was just listening to a podcast with, um, I can't remember his last name. I think his first name is Peter. He founded RX bar. Now he's doing David that the protein bar And he was talking, you know, early on their market was CrossFit and they just served the hell out of that market. When they jumped to the more mainstream market, they had to totally redo the packaging, totally redo everything. Are you seeing something similar? Like, have you had to change the messaging and the packaging as you've gone more mainstream? Yeah.

16:42So when we launched our product, we actually launched with Lifetime Gems. And so they're like 190 gyms across the country. I mean, they're an enormous company and it was a great place to launch because it's a premium gym membership. They've got all sorts of offerings. We're a premium product that wants a more educated consumer and going after the endurance market. But Lifetime also has a bunch of long distance endurance races around mountain biking. So we did a sponsorship deal with them there too, and it's called the Lifetime Grand Prix. So they've got five races across the country that range from like 60 miles to 200 and something miles.

17:21You know, some of them are up mountains in Colorado that are just, you know, the air is thin. And I'll tell you a story about that later, how I got roped into that. But it was great to move into the endurance market first, because that's who knew about ketones to begin with. So that's where we wanted to start. But let's see, we launched in January 2024 with the new slim cans and the new flavor into lifetime and with endurance. And now we're starting to reach out more mainstream into the supermarket. So we're looking at like, what call outs do we want to change? Like here we talk about clarity and focus.

17:55We're making sure that we mentioned we have no sugar, that it's sustained energy. So people are looking for that. But right now we're working on how do we refine that and get that messaging even more simple and to really call out some of the benefits that people are looking for in those specific health food shelves around the vitamins and supplements and people that are looking to boost their longevity and endurance. And what's nice is that The whole sort of longevity movement and health movement is taking off. I think it's kind of an after effect of the pandemic. There's a lot of people are just so much more health conscious.

18:26Even if you look at a lot of reports coming out about Gen Z, they just they don't drink anymore. They don't drink alcohol. They are looking into, you know, different products to, you know, find ways to hang out and, you know, be social with their friends where they're not going to, you know, sacrifice tomorrow with a terrible hangover. So it's interesting to see how big the market is growing and how we can adjust our messaging to the position around that. And all I know is that we're going to constantly experiment. And that's what we're good at is we're not afraid of testing, testing, testing, retesting, failing.

19:01Oh, this worked, that didn't work. And I'd run into a bunch of friends now who are in other consumer products. And they're like, you're going to change this label three times this year. And I'm like, tell them you're trying to like spook me. And I'm like, it's fine. I know. That's just part of the daily problems you run into as an entrepreneur is you're just constantly going to have to pivot and get comfortable with that. So whether it's the label or marketing or partners you're working with, yeah, it's always constantly evolving. It has to feel like you got the timing right. You were talking about, you know, like the early days of biohacking.

19:35I was there, you know, like 2013. I was drinking Bulletproof Coffee. I was in these like Reddit groups of biohackers. It just felt like such a fringe niche thing. Now everyone's talking about it. It's become very normalized. Like it's almost become like cool now. I think it wasn't that cool. It was more nerdy 10 or 15 years ago. It was very nerdy. And Bulletproof Coffee is something my business partner was using back in the day. I was like, you're blending butter. in your coffee? Are you like an NCT oil? And like, I just remember drinking, like I took two, I was like, oh, just a teaspoon. I like took two tablespoons and I killed my stomach with the NCT oil.

20:11Like I was just laid out for days, but actually we were just at Dave Asprey's biohacking event down in Austin three weeks ago. And it was our first time there and sort of our first foray into meeting biohackers. And that is our group. They loved us. Everybody was coming back for more and more kinetic. They couldn't stop talking about it. Everybody's walking all over the events with our can and just coming back and telling how great they felt. Because it takes about 20 minutes to work. And we've done a bunch of brain scan studies with EEG, where we do a baseline scan, we measure your brain activity, have you drink one of these, and then 20 minutes later would rescan.

20:50And we saw about an 18 % increase in brainwave activity 20 minutes later, which is significant for just one of these cans. And so every time we tell somebody like, hey, set a time on your watch, your phone, 20 minutes, just do a check. How do you feel? How do you feel mentally? Do you feel like awake and ready to go? And are you feeling good? And that's all. We could have done the blood tests or we were doing some blood tests with them too. So they could actually see before and after for like the hardcore biohackers that were there that weren't afraid of that. And people just kept coming back to us over and over again.

21:22They're like, God, you are so right. I just feel so good after drinking this. And I was like, and it's going to stay that way for another three hours. There's no crash. It won't mess up your sleep. And so expanding into that community and just testing, it's not cheap to make that leap of faith into one of these shows. You know, you're writing a pretty good check to get in there. And it was a great community to meet. And it was well worth it. That really paid off. We're looking forward to doing it again next year. I would imagine if you look at the biohacker group, like they probably are very quick to see through bullshit.

21:53I would imagine that's not a group that you can like, you know, just give bullshit claims to. What was that like trying to just, you know, market to them and speak to that group? Yeah, well, we've actually done a lot of work with clinicians and universities that are using our blend of ketones for studies. The thing is, is that we're basically able to deliver the end result of the fasting diet in a can. So it's hard to keep somebody in your clinical trial fasted for a long time. Eventually, they got to eat. And it's hard to keep them on a fat-based diet, too. People aren't used to it. They tend to drop out.

22:27And that just makes getting the results from the studies really difficult. And what these clinicians found is they can just drink a can of Kinetic, and they're getting the same result. So we worked with NIH. We're working with University of Pennsylvania School of Medicine. We're working with a couple other universities up in Canada and University of California, San Diego. and so we have a lot of scientific backing where we're able to show, I mean, the first thing you're testing is, does this raise your ketone levels? And they're just doing the before and after blood work and we're like, hey, if you want to step over there, we'll prick your finger, we'll test your blood, you drink this, come back in 30 minutes, we'll test again and you can see it.

23:05Or you can look at these studies and take, you know, Dr. So-and-so's word for it or you can take my word for it. I'm just telling you, this is going to raise your ketone levels one to two millimoles. But by working with all these clinicians, We're able to really dig into the science and learn a lot from them. But we're also getting a lot of feedback from people that are dealing with neurodegenerative disease or they need to be in a specialized diet for diabetes or they're pre-diabetic. And so they're looking to reduce their sugar intake. And they're like, I love Kinetic. It's changed my life. We even have our director of sales actually reached out to us a year ago because he had a daughter who had a rare childhood disease where she cannot convert glucose into ATP, the energy unit that all of our cells use.

23:55And so she basically needed ketones to live. And the doctors had no idea what was going on with her. They thought she was diabetic, insulin wouldn't work for her. And he discovered on his own that if she had ketones and was in ketogenic diet, she would survive. And he found Kinetic and it was the only ketone drink that she would actually drink. Everything else, as I mentioned, it tastes like bile or jet fuel or nail polish remover. And she would spit it out. It was a seven-year-old girl. And he called us up and he was like, guys, you have got something here that is keeping my daughter alive. And I need to come work for you.

24:32And I'll come work for free. And by the way, I specialize in finding new beverages for Whole Foods and Target and all that. And so I was like, okay, I can't say no to this. And I remember meeting his daughter, Lily, a year and a half later and getting a hug from her. And, you know, their doctors were saying, you know, prepare for her death, like we're putting her on painkillers to ease her suffering right now. And he wouldn't accept that. And he went and found another way. And the doctors were all just befuddled and said, keep doing what you're doing. And now Lily is growing again. Her skull size is regrown.