#303: Ben Goodwin, Cofounder, CEO & Formulator, OLIPOP – The power of emotional intelligence

0:00Hello, everyone, and welcome to another episode of How Leaders Lead with David Novak. Today, we have Ben Goodwin on the show. He's the co-founder and CEO of Olipop, a prebiotic soda that he formulated and built from the ground up. It is statistically harder to get a job at Olipop than it is to go pro in the NBA. And I believe this episode will show you why. In this conversation, you'll learn how Ben has gone from creating tasty soda products to building a company that everyone wants to be a part of. Enjoy this conversation with David and Ben, and I'll see you at the debrief.

0:43You know, I have had a lot of ollie pop lately. I have to tell And, you know, I love your fruit punch. I mean, I love that. Okay. I had that for lunch today, which was terrific. And today is a little bit of an afternoon pick-me-up. I'm having this orange cream, you know, which is also sensational. You know, what's your favorite? What's your favorite? Oh, man. So, yeah, I'm the formulator, right? Which means they're all my little special. I mean, each one is such a journey. So I've got a rotating list of kind of my favorite at any given moment. It's a hard question to answer. I'll tell you what's even harder is when it comes time for skew rationalization and folks start to talk about the tail and do we need to cut some stuff.

1:31And I'm like, oh, God, every one of them is like a chapter in my life. I mean, so, yeah, I think Ridge Rush is top for me. Classic Grape is excellent. Peaches and Cream is really fantastic. Here you go. All your babies. I'm not going to. We only have so much time on this thing. I'll literally end up listing half the flavor. Watermelon Lime. Don't sleep on Watermelon Lime. You know, like you say, you are the formulator. You're not just the CEO. You're the formulator of these great products that you've developed. When did you realize that this was your superpower? I'm in a somewhat classical, you know, semi-stereotypical kind of entrepreneurial mold.

2:14I dropped out of college at 20 and I helped a friend start a kombucha company, which is, you know, how I got into the beverage industry and how I first started to learn about the microbiome and digestive health. Even back then, I recognized coming out of that first venture like, oh, wow, I have a knack for this. and between that company and starting OB, which is, you know, my prior kind of beverage company scaled from the ground up, I did a bunch of product development across categories. So supplements, cosmetics, beverages, food products. And that was kind of when I realized that it was a passion point and a skill point.

2:56But then, you know, you build your muscle up over time to the point where you kind of know the science cold. And then it becomes this really interesting kind of creative expression. And that's something I cherish a lot. Take us through your process for developing products. Yeah, so first you kind of have to have a, or at least I like to have a bit of a philosophy around how I approach what flavors we're going to go with and we aren't. And I like to, I kind of have three tracks that I borrow from. One is, you know, what are the expectations? What are the soda flavors that customers have relationships with where we know we just want to offer those?

3:33That's one. Two, are there consistent requests coming through from customers that we can see that, you know, we think is interesting and we know that we're going to meet an existing latent need? Route three, which is probably my favorite, are flavors that are a little bit more on the surprise and delight side. They're a little less expected. So a great example of that is raspberry sherbet. I've had, you know, I had raspberry sherbet on my mind for about two years and I just couldn't get it out of my head. I was like, you know, growing up, we didn't grow up with a lot of money. So, you know, we went to the whatever, you know, conventional grocery store and you'd buy the cube of sherberts of like raspberry, lime and orange.

4:12And raspberries always my favorite of a three. And I just was like, I bet anything people would really love that flavor. And, you know, we had our consumer insights group running little panels, what flavors are people interested in? And we got so much generic answers. And I was like, can you rerun that again? But can you put raspberry sherbet in the mix? And it blew up to the top. And I was like, okay, cool. I have to do this. And with that LTO exploded. So I like those curve balls. The tropical punch is even a bit of a curve ball, right? Because that was inspired by the red Hawaiian fruit punch.

4:46I used to drink as a kid, kind of grown up on the playground. But I wanted to kind of modernize it. Oh, that's great. Well, tell us about the lab. Where do you do this? I used to be in the food business, and I love going to the lab and creating things and creating products. Where do you do it? But crazily enough, and this is a big upgrade for me, I have a room in my garage that's now dedicated. Prior to that, the last house I had, it was just in my laundry room. And prior to that, it was just this thing that would just sprawl out in my kitchen. And because I now have about 20 years under my belt as a product developer, you know, my process has changed a lot.

5:27And so I actually spend a lot of time thinking about the flavor, developing a vision around it, thinking about, you know, how the ingredients are probably going to need to come together. to the point where by the time I sit down at the bench to actually start a formulation process, I basically have, I throw my first version of the formula on the page. I just use these yellow notepads to formulate. And I'm usually like 70 % there or more before I've even sat down and done a test run because I just know the ingredient relationships and the chemistry so well at this point that it's... How did you pick that up, Ben?

6:12You said you moved out of college at 20 and, you know... Yeah, to be honest with you, I'm a neurodivergent weirdo, which comes with real benefits and real deficits. And I have a little bit of a Savanti nature to me that allows me to pick up stuff without traditional training. So I've been lucky enough to have some amazing scientific mentors over the course of my life, whether it's been organic chemists or flavor chemists or microbiologists. And so I've learned a lot from them. But I also have this weird ability to self-teach, like be autodidactic in my approach. And then I have this weird ability to kind of pick stuff up and learn it just quickly.

6:56And that comes naturally to me. You know, it comes to me, this question I got to ask you. You know, Raspberry Sherbert, you know, you're you're in this consumer insights group and you say, throw this thing in there. OK, Raspberry Sherbert, stay sort of in the middle. What do you say? Screw it. I'm doing it anyway. I mean, I mean, how do you follow your intuition versus the rational? I think to be a good entrepreneur, you've got to develop a really healthy relationship with your impulses and your instincts. and sometimes you just feel it. And it's this weird thing where you just, you know that it's true.

7:35And literally no matter what input anybody will give you, you'll still know that it's true. Now, if as the company grows, all of a sudden, you know, we've got almost 300 employees, you start to say, okay, like, you know, I do need to make sure I'm getting alignment. I do need to make sure that there's enough energy in the team behind what we're doing. So you might kind of know stuff is true sometimes and still make calculated risk analysis around whether you roll it out or not. But I will tell you, more often than not, if I have that feeling, if I was like, you know, it's this really specific feeling I get, it's usually right.

8:10And usually I ignore it at my own risk. That's a great point. You know, and that's so true. You know, some people have it and some people don't. And you do. You've got that intuitive instinct that's led you to this whole category. And you often say you didn't build a healthier soda. You built a third wave of soda. Explain the landscape of the category and what you mean by that. It's fascinating because soda is a kind of a construct is a couple hundred years old. It's got root structures in the Americas, Europe, the Middle East. And then, you know, in the 1800s, kind of mid late 1800s in Europe and the United States, people started going to these geothermal springs for health benefits and kind of falsely contributed the health experiences they felt like they were having to the gas that was coming up out of the earth.

9:06And there became this race to force carbonate beverage, which eventually that got cracked. And that but that started the kind of commercial soda industry that we know of that really popped up in the late 1800s. Now, all soda was originally a health product, whether it was the attribution of the carbonation, or whether it was these old formulations that came up even through the colonial era. I mean, there was this saying in early colonial America, where you get your piece of land, you plant your elderflower or elderberry tree, and then you build your house. because this elderberry and slash elderflower is this indigenous American tree where almost every part of the tree is usable for kind of herbal medicinal.

9:57So there's a big focus on that. And early soda was just all these botanicals and fruits with water. And then sugar was added to facilitate fermentation, which made it more bioavailable and helped to protect it. But then they didn't want it to become alcoholic. So they'd stop the fermentation early. So there was sugar in So that was the root structure that led to commercial soda and Coke and Pepsi in the early days. And it wasn't until 1943 that the federal government stepped in and said, hey, you can't actually call soda a health product anymore. Like people didn't realize up until the early 1940s, soda was still being touted as a health product.

10:33Now, that then, when they couldn't call it a health product anymore, it actually wasn't that long. It was only 20 years before the advent of non-nutritive sweeteners and the start of the diet soda movement, which then rose and kind of peaked up in the 90s. And then, you know, that's had a certain share of the category, but the bulk of soda still sits in full sugar soda. And so the kind of functional soda category, which Olipop did create, is this idea that we have this opportunity for these drinks to not just be better for you or less bad for you, but we have this opportunity to make them actually structurally healthy.

11:14and you know i don't know maybe watch too much jesson's as a kid but this idea that like things should be able to be delicious and really really good for you uh because the food technology exists and the nutritive technology exists now and so that and that's one place where olipop does take a little bit of a different stall than where the rest of the functional soda category has gone right the rest of the formulas are arguably kind of more better for you formulas where olipop actually has a good for you formula. And we have the research to really back it up, whether it's the partnership we've done with Purdue, the human clinical trials we finished on blood sugar stability, A1C levels.

11:49I can't talk much about it until we go and publish the study, but we just finished a human GLP-1 study that I'm really proud of. So that's kind of this third wave of soda. I really, my intent with the category is for functional soda to really be the third leg of this tool. And I think it, it, of overall CSD and to occupy a similar space as, you know, diet soda does today and just kind of own its own territory there. And I think that that's in alignment with where the future of food and beverage is, is going for, for global consumers. So you created this new category and we got all kinds of flavors that you've, you've developed.

12:29And one of them is this one right here. It's the, it's a vintage cola. Okay. So just to kind of educate people on what you're doing that's different. How's this vintage cola different than a Pepsi or a Coke? Yeah, so there's three main ways in which it's different. Obviously, number one, it doesn't have the 40 grams of sugar that a traditional soda would have. It also doesn't have the artificial non-nutritive sweeteners that a Diet Pepsi or a Pepsi Zero or a Diet Coke and, you know, Coke Zero would have. There's a bunch of mixed data on how good the aspartanes of the world, you know, good or bad they are for you.

13:13But there's a lot of folks who would feel a lot more comfortable with more natural offerings. In our case, for example, we use Stevia. So number one is the sugar and the lack thereof, because we have two to five grams per can versus zero for diet, but the artificial non-nutritives or 40 plus grams for full sugar Coke. Number two is differences in, let's call it the severity of the unnatural ingredients that you utilize. So for example, we talk a lot about sugar or non-nutritive sweeteners when it comes to soda. We don't really talk about things like phosphoric acid. So there's phosphoric acid in all the traditional colas and all the traditional root beers.

13:58Mountain Dew, it's wildly acidic. Like it's, there's some crazy ingredients in there. And, you know, that comes with its own set of challenges. So basically the liver has to take all that really concentrated acid and it has to convert it to a neutral pH. And so what's in the body that is present for that conversion is magnesium, phosphorus, calcium, and the greatest source for all those minerals, for example, is in the bones. And that's one of the indicators behind the link between osteoporosis and traditional uh soda consumption or diet soda consumption so and that and the flavors take a similar route or some of the different preservatives that you might find and we don't have any of that stuff we use actual like lemon juice and citruses uh more natural ingredients um in order to kind of build the taste profile then the third piece which is also really enormous is the fact that then our product has an entire uh functional component to it so are we have a an ambient version of the product, which is more for pantry loading.

15:04We have a refrigerated version, which is a little more premium. The ambient version of the product has six grams of fiber in it from three different sources. They're prebiotic fibers. And the refrigerated version has nine grams, again, for three different sources. And then we have this whole blend that goes inside of called OliSmart, which has botanical extracts and other kinds of functional ingredients. And, you know, by the way, every version of our functional formula gets run automatically through an in vitro pipeline we developed at Purdue that looks at microbiome and digestive health outputs.

15:35And then we've done a bunch of other human research on them. But those are the big three pieces. So you're getting to skip the sugar or the artificial non-nutritive. You're getting to skip the chemicals and the harsh acids and all the other kind of concerning ingredients. But then you're also getting something that is holistically beneficial for so many different aspects of your body. The microbiome has a lot of systemic benefits that it confers to overall health. And obviously, blood sugar stability and its relationship to obesity and metabolic disease is really, really important. So in a lot of ways, the product is a little bit of a Trojan horse.

16:13It contains the experience of drinking a soda. It hits that craving like right where you want it to. But it's not pulling from your health, it's contributing to your health. You had a lot of naysayers early on. I could tell as you were talking about people saying, why are you going to go into this category? And I read somewhere where somebody said you were wasting a God-given talent. You were so stupid to do this. Where do you get the resilience or just the stubbornness to follow your instinct? Where does that come from as a leader? Yeah, man. I've had a lot of those events or events where I had to make very difficult financial decisions to basically keep struggling and not know how everything was going to work out financially when I had opportunities to take that would have shored me up.

17:13but I didn't feel that they were going to ladder up to the best long-term outcome for preservation of the mission. I mean, you know, I think ultimately I have a pretty atypical set of principles in a lot of ways that I really am very serious about. and I think in a lot of ways to me they're kind of linked to uh having living a life effectively with an adequate underlying sense of meaning and there's a lot of ways in which a life that doesn't have adequate meaning for me and this is going to be a little melodramatic but it's like that's kind of a face fate as bad as death it's like I really just can't I I just can't live that life And so, and I think there's some other kind of stuff.

18:06You have a little bit of maybe of a sense of destiny or you, you know, I have such a robust desire to make a positive impact. I think that, you know, in my early 20s, coming out of a challenging childhood, in my early 20s, I had gotten to a place where I kind of felt great about my quality of life. I felt, you know, and everybody says this in your early 20s when basically it's you just eat reasonably well and do some exercise and like you're fine. That's all you need. But I had kind of come to this perspective that, you know, I kind of like have figured out how to live a great life here. But then I kind of purposely decided to re-expose myself to stress under this idea that it was all fine and dandy that I had figured out how to do that.

18:54that there was still just like a lot of people suffering and a lot of stuff in the world that was dysfunctional and that, you know, I kind of owe it to the world to use my whatever talents I have to just try to make it better. And so when that is your philosophical foundation, you know, stepping into the actual arena and just abandoning those principles, defeats the whole purpose of why you started in the first place. And I've never lost sight of that. I think there's certain parts of me that are a little more world wary than when I first started. But also that's come with an enormous amount of operational knowledge that allows me to gain more leverage and lean into my success.

19:52Hello, friends. I hope you're loving this conversation. Be sure to stay tuned to the very end of the episode. As always, David and I are going to debrief some of the concepts that he talks about with this week's guest. So stay tuned to the very end, and I will see you soon. And here you are, Ben. You're creating this new category, and you just gave me a good education on it. How do you get the customer to really understand your difference? That's got to be a hell of a challenge. That's the$10 billion question, David, because, you know, it's been a fascinating part of this journey. We originally started doing research just because I thought it was the right thing to do.

20:32You know, you've got a$300 billion health and wellness industry between food, beverage, and supplements, and like less than 1 % of these brands are doing any independent research on whether this premium product that they're, you know, charging customers for is actually conferring a real benefit. And so I just thought that that wasn't great. Now, Now, it gets complex because the challenge is that, you know, I always have this kind of, I call it like, you know, this average customer in my mind of just like a Walmart shopper in Ohio. And sadly, because of where we kind of are with the level of nutritional education we have as a country, your average person running around doesn't know what a clinical trial is.

21:09And so that makes getting some of the benefit from all the work you're doing at the consumer level a little more difficult. Now, there's some of that you can still communicate or find more clever, engaging ways to communicate. Those are all things that we've been working on and we're continuing to work on. And for example, like fiber education campaigns, stuff like that. A little more digestible, pun intended. But then there are other kind of intermediary steps where I think you can get a lot of value. So we've already gotten SNAP waivers in multiple states for the kind of junk food ban against the SNAP benefits.

21:45There's FSA, HSA programs that are available to us. We already are in the Medicare Advantage supplemental benefits programs of over 10 million Americans. So, you know, we can find these associations or these certifications or these insurance programs that we can interact with, which are beneficial for the credibility of what we're doing because you don't get to participate if you don't have a base level of science. But they're also a way to show up, subsidize the product for consumers who need the product, and also should drive credibility because obviously the other options are not showing up in all of these different conduits.

22:25Well, one of the things you've really done is you've kind of done what Jim Collins, the good, new, great, talks about the magic to the end. You've got great taste and you happen to be something that's healthy, which is kind of shocking to people. But, you know, it's like I think you really use your packaging well. it very well to really get it across, you know, supports digestive health. You know, you've done a great job on that, you know. And the other thing that I was really intrigued by, Ben, is that, you know, you've said that Olipop is a mission disguised as a soda company, you know. Yeah.

22:59I love that. It sounds cool, but I mean, what do you really mean by that? With the kind of weird brain wiring I have, you know, I wasn't somebody who wanted to So I actually talked about this. Inc. Magazine just gave me an article or a column, and I just wrote my first article for it. And I talk about this in there, which is I wasn't somebody who woke up one day and was just like, you know, I need to be a business person. For me, even having a business is kind of the first layer of the Trojan horse, right? Because I think you can want to create a positive impact, but if you can't make it something that really seems grounded and practical, integrates with kind of society's expectations, and it doesn't lend itself well to people's survival, it's not a replicable model, it's going to have limited utility.

23:52It's going to be standing on a soapbox advocating for something, but not making it adequately integrated with society. And similarly with the product, it's, you know, it's, it's by the time, you know, I grew up drinking soda, but by the time I was working on this category, I hadn't had a soda, you know, decade plus. But I really thought to myself, you know, if my goal is to help human health and consciousness scale, there really isn't anything more positive I could do in beverage than actually be a Trojan horse that replaces traditional soda consumption. And that, you know, it showed up in some of the early the advisors I had for my prior business when I first decided to go down this route.

24:39Like the data argument did not make sense. The data argument was, wait, so you're going to go into a declining category that's guarded by some of the largest, most powerful, most well-marketed brands in the entire world when you could go after something kind of more niche and easy to access? And I was like, yes, because the mission is to create that maximum impact. And so, you know, don't tell me the odds going for the, you know, the death jar shot. And look, I mean, I don't know if you saw it. Obviously, Pepsi's got a prebiotic product out. Coke is launching a prebiotic soda under brand Coke and brand Sprite.

25:20And if that's, and by the way, their packaging looks shockingly like ours. But it's like, if that's not making an impact, I don't know what is. Well, you definitely are. And people are reacting because you've unlocked a lot of growth and people follow the growth. There's no question about that. And you've been this formulator and now you're the CEO. So how are you developing the other skills you have to have to be an effective CEO? Of what is now, I think your enterprise is valued around$2 billion. I mean, you've come a long way, baby. It's true. It's true. And I'm really, really grateful because, I mean, we really have achieved between a 0.01 and a 0.001 result.

26:13So the reality is, like, you could be a beverage, you know, entrepreneur for a thousand years and not make it. So no matter how hard you worked or how insightful you've been, there's obviously a certain amount of luck that is attached to the success. And look, I think that, you know, one of this is at least what my executive coach told me. So it's true or not. But, you know, one of the things that she said to me and she's an amazing human being and I'm really lucky to work with her. But, you know, that learning is one of my superpowers, which I think is really important to be a successful entrepreneur.

26:47And when you can learn at an accelerated rate, you can observe your environment and you can adapt. And I think what the struggle is very common that entrepreneurs with successful brands go through is the life and death rapid pivot dynamics that are attached to your survival early on in your business actually become counterproductive as you scale. And so, you know, you have to be able to turn on a dime from zero to 50 or zero to 100. At 500 plus with hundreds of employees, you need to become a systems engineer. What's it like now, you know, competing against the big boys all the way? I mean, you know, you're not just starting something now.

27:42They don't look at you as some little rinky-dink competitor now. I mean, you're a deal they got to deal with. Yeah, I mean, look, I will say one thing that's been, and not to dance on Graves here, but one thing that's been a really nice trajectory this year is despite Poppy going into a very powerful DSD system, we have retaken the category lead by Cher, which is really satisfying, obviously. um and uh you know we're also in a place now where we've kind of developed uh new brand world assets with design and kind of like pack architecture which i think is early signs that that's really resonating with consumers and we've got a bunch of new uh really effective marketing assets i think we're about to go into a phase in our kind of life journey where we will tell the olipop story from an identity standpoint the best that we ever have so i think all of those all of those things are really important.

28:43I think, you know, at the end of the day, we obviously need to be aware of what the competitors are doing and make sure that we're adequately competitive, right? So this is a category where a lot of brand discovery and brand shopping happens and displays. There's a lot of pricing pressure as, you know, there's a lot of trade spend. I mean, one of the things that helped Poppy get into an advantageous position is they spent about six times that we have historically on marketing, and they spent two to three times that we have on trade spend. They've always been a little bit more of a push brand. The thing that we have that's unique is we have, we're kind of the brand that's always had the biggest pull as the center of gravity for how we built the company.