267. From $0 to $100M and Back Again: Jeff Church on Building, Breaking, and Rebuilding in CPG

0:00Welcome to Startup to Scale, a podcast by FoodBevy. I'm your host, Jordan Buckner. Join me as I talk to aspiring entrepreneurs, seasoned industry experts, and everyone in between as we unlock the keys to growing from startup to scale.

0:18My guest today is Jeff Church, who has built and scaled multiple businesses within the CPD industry. As co-founder of Suja Juice, he helped take the brand from to over$100 million in just over five years, really becoming one of the most recognized names in the beverage space. I still drink the Suja myself and my family loves it. So the legacy continues. And after selling the company, Jeff didn't sit back. He spent time mentoring founders, just published a book, developed a CBG-focused AI tool, and recently launched Prota, which is a new protein soda brand that actually just went nationwide at Sprouts.

0:57Jeff, welcome to the show. I'm excited to have you on. Excited to be on, Jordan. Thank you. Thank you for the opportunity.

1:01Jeff Church:So you don't like sitting around and doing nothing, huh? No, I guess not. You know, and my kids are all old and they're older and they're raised. So I have a lot of extra time on my hands. And my hobby has always been business and extra CPG. So, I mean, I enjoy doing the things that I do. You know, it's exciting. I always would tell people similarly that business is a hobby of mine as well. And it was like, that's not a hobby. That's something, you know, like playing guitar or playing golf. Like those are hobbies, not business. I tell you, I get so much out of just sitting in my desk, you know, working on Excel or working on whatever.

1:33Jeff Church:It's just it's very therapeutic for me. I know it sounds like we're both sick, but I guess that's what it is. I mean, there's something about, you know, discovering or identifying problems and then working through what potential solutions would be, I think, which is always exciting in a way that helps people. Now with the AI and everything, it's just all changing so fast, isn't it? I mean, you and I have talked before about the cloud stuff and Excel and just how it's just kind of a game changer for a lot of things out there. I mean, it's just all changing so fast that it's hard to it's hard to miss any of it.

2:03It is. It is. It's so cool. So I would definitely want to get to some of that. But, you know, by this point, you've built over eight companies. And I'm curious, you know, what did you believe about building a business early on that you fundamentally don't believe now in terms of like how your mindset has changed in terms of bringing something into the world?

2:22Jeff Church:Well, I think when I was younger, I thought that entrepreneurs were kind of born versus made. And I think they're really mentored. But I thought that they were always kind of the Elon Musk, the kind of swastbuckling entrepreneurs or the Steve Jobs or people like that that you're like, I'm not like that. And I think that the reality of it is, is entrepreneurs can be any of us as long as we have, you know, the desire to work hard, to bust through obstacles, to carry the people on our backs up the hill when we need to, you know, to be intellectually curious. And I realized that, you know, I could have those skills and I could learn those skills.

3:00Jeff Church:And that's really what I've been doing over the years. And there's always a learning curve to any of this, especially when you're in different industries. And I've been in probably six different industries with the last 15, 18 years being in CPG, which I absolutely love because I love the products. I love dealing with the consumer. I mean, a lot of the products or industries I've been in before were industrial products that you never really see or hear of. So you're at a cocktail party and you're talking about it and people, you can see their eyes glassing over. You have a consumer product and you have a product like this organic tea is Juni.

3:31Jeff Church:And you show that and they're like, oh, what's that? I mean, it's a really interesting product. And people are just much more engaged with it. So I got into consumer with an outdoor gas grill company called Lynx. It was a lot like a vitamin, like a vitamin grill. And it became just a passion of mine dealing with the consumers. It was a lot of fun. That's exciting. You know, one thing I always remind myself in thinking about entrepreneurs is whenever you're driving down the street in your city or town, look at all the buildings, the businesses. Each one of those is owned by a business owner, an entrepreneur.

4:03And there's a lot more business owners than I think we even realize. And now you drive by people's houses and there can be a multimillion dollar entrepreneur just working out of their house.

4:14Jeff Church:They don't even need a larger business anymore. Exactly, in basements. I think there's people making a lot of money doing certain things in their basements. So let's go back to Suja a little bit. What were some of the key reasons you started the brand? And why do you credit being able to grow the business so fast? Yeah, well, we started in 2012. And I was introduced to a young kid that was making these incredibly great tasting juices. But I'm from Ohio. And I'm kind of a meat and potatoes guy and not much of a green juice type person. Or at least I wasn't then. And he kept telling me, you got to try this.

4:47Jeff Church:You got to try this. And finally, I tried it and it was kale, apple, lemon. That was just three ingredients. And I thought it was fantastic. And I thought, if I can drink this product, anybody can drink this product. And I felt like, you know, I'm always an entrepreneur looking for different ideas and looking for things that, where there can be something kind of, something that's like slightly disruptive. And it doesn't have to be massively disruptive, but it has to be disruptive enough to give you a little bit, the playing field, a little bit of advantage on your side, kind of like Vegas always has a little bit of an advantage on its side.

5:16Jeff Church:And I thought, if I can drink this, pretty much anybody can drink this. And I began thinking about my kids, four of them that are Gen Z and millennials. And I knew that they weren't going to probably give their kids Coke and Pepsi products. And I thought, this really could be an opportunity here that as they grow up, and they were in middle school at the time, as they grow up, that this could really fit with where the hockey puck is going versus where the hockey puck currently is. And so we thought about creating a business, but he had no kill step on it. So there was no shelf life. It was like a three-day cleanse.

5:49Jeff Church:You know, then that wouldn't last more than four or five days. And I didn't want to do pasteurized juice because Naked and Odwalla had already done that. You know, I began looking for alternative ways to protect the product for safety and for taste to give it a shelf life. And found HPP, which is high-pressure processing, which doesn't use heat. And when you don't use heat, you're not destroying a lot of the good stuff that are in the product. We're just using heat that can have an impact on it. So I thought, okay, we've got that. We've got this. Now we have to make the product. But when we launched the product in 2012 at Whole Foods, it only had 18 days of shelf life.

6:24Jeff Church:Today, it has better sanitation, better techniques and everything. It has around 100 days of shelf life. I just felt like it was the right time for that. I mean, I think a lot of this stuff that we do as entrepreneurs and founders, and I feel like I can get a business. I used to think I could get it to 90 % and then I had a failure with Rowdy. So I kind of dialed that back down to about 70%. But I think that final 30 % is really based on luck and timing. And it's hard to handicap luck and it's hard to handicap timing. Because when we launched Suja, both Blueprint Cleanse and Evolution Fresh, literally a month after we bought it or started it, we're acquired by two large multinational companies.

7:03Jeff Church:And as often happens, that kind of go off the roads a little bit. You know, they did try to come back, but it took kind of a couple of years for them to come back. And we were just in the right place at the right time. With Rowdy, an energy drink that I launched at Better For You Energy Drink in 2021, I guess it was. I thought it was really the right timing, but I missed it by about five years. Now you see all the Better For You Energy drinks that are coming out there now. And they're actually doing well, but in that case, timing wasn't on my side. I hear you on that. And I think that timing is an interesting piece, right?

7:32And here you are having created a successful multimillion dollar juice and beverage business. You try it again. You're like, this actually didn't work this time. And because of the timing, now you are just launching into market with Proto, which is a protein soda. And tell me about this new business, what the product kind of is. What's your point of view on the beverage space right now? And why do you think now is the right timing for it?

7:59Jeff Church:Yeah, I think this is the most disruptive thing I've seen in my career. I tell people that this, I haven't seen, you've got the intersection of two massively large, you know, categories, both, you know, soda, which adults consume about 50%, 50 % of adults consume soda. And you've got protein, which roughly 60, 70 % of Americans have some type of protein supplementation. But until now, until the advent of clear, clear whey protein isolate, there hasn't been a protein that could go into a drink that didn't taste chalky. And you can do it with some of the drinks like Ensure and drinks that are more the shake type stuff that have protein in them.

8:37Jeff Church:But the challenge with those is, you know, first of all, it's not a soda. It's not a clear beverage. And you do get a bit of either ultra sweet kind of super low-seed, you know, taste to it with some chalkiness from the protein. You know, it's just not, they're not made with good ingredients. But the advent of this clear whey protein, now you can get a bottle of water, a soda, anything clear. It takes a little bit of know-how to be able to make it because working with protein is not easy. But it just felt like if you can make a protein, there's all these people that are buying protein supplements, all these people that are buying soda.

9:09Jeff Church:And if you can merge them together, it offers the opportunity for somebody to get two in one. And as we get older, protein is really hard to get 60 grams in your daily value. My partner, Matt, who started the company, I met him about a year after he had started. It hadn't launched yet. He created it because his grandmother couldn't get enough protein in her, and she couldn't drink the supplements. She couldn't consume the supplements. She couldn't drink the insurers, and he wanted to create something, and he found this clear protein. And I began to think, just like with Suja, where I had started it for my kids thinking about their kids, and I missed it by maybe that much.

9:44Jeff Church:And then I had saw it. We've all seen what Ollipop and Poppy have done, the amazing job. And they're kind of right on it. They nailed it. And I thought, well, I wanted to get into that space, but I didn't. Things that I've learned in the eight companies that I've had is disruption is really important. And if you look at the three that I've had five that have worked really well and three that have been blazing strikeouts. And when you look at the blazing strikeouts, I did a 411 on it at one point in time. And what I realized is there wasn't something disruptive with those ones that failed. There also weren't what I call connectors, but people that are willing to connect you to other people.

10:17Jeff Church:And you need in the beginning, you don't have any brand awareness. So you really need to create some connections with people. And if you find people that are, you know, it's like Malcolm Gladwell's book, Tipping Point, where he talks about the connectors. You know, I'm not personally a connector type person. I'm kind of head down and just kind of battle through it. But, you know, you're probably more of a connector, you know, Jordan, just given what you do. But when you have those connectors, they'll tell 10 people and those 10 people tell 10 people. And you start to create a groundswell. And I didn't have that with the three that failed.

10:45Jeff Church:But, you know, so I when we decided to start Proto and we're both co-founders and co-CEOs, Matt and I, it's all about taste. You know, I mean, we do have we had the protein in it, but we want people to actually drink this and go, no way, there's not protein in this. And if you try the other products that are out on the market today, pretty much they're mostly all chalky tasting. And the repeat rate is very low. And as you know, repeat rate is probably the single most important measurement or metric and CPG that we that we look for. Because if you're not getting customers to repeat, you're having to constantly go out and get new customers.

11:16Jeff Church:And that becomes really expensive to do. Yeah, it definitely does. And, you know, here's kind of my point of view after seeing this is that Proto kind of hits on that mark of being a benefit that people are looking for of getting more protein. It uses a common use case, which is drinking a can of soda. But you're not in like some weird packaging that people aren't used to. And it's very clear. And so when it looks at the pack, they know, hey, this is a soda with protein in it, right? And then everyone can understand what that is. Then they try it with the taste that you mentioned. And having that smooth flavor, I think, is going to be really key in getting that repeat, as you mentioned.

11:53The other thing which is interesting, though, which I'm curious about, is there are a number of other companies who are starting to make protein sodas in this space. I see Target has a couple of brands when I was there the other week. Like, what do you think makes the difference between who's going to come out on top in the category? Or, like, is there room for multiple different brands? Or do you think that it's really going to come down to one or two brands in the space? How do you differentiate and get there?

12:17Jeff Church:Yeah, I think taste is a big factor. I mean, 93 % of why consumers buy products is because of taste. And as you know, you go to an expo show and you try a bunch of products up and down the aisles. And, you know, constantly like, no, you know, you really shouldn't launch this, you know. and I try to be nice about it, but if a product doesn't taste good, people won't repeat. And, you know, the average consumer is about 72 % satisfied with their beverages in America. But when you do that same analysis on consumers of protein sodas, and it's very early, right, now, but it's only 50%. There's a big gap in people that aren't happy with what they're getting in their protein sodas.

12:55Jeff Church:So first and foremost, it's about taste. I don't worry about there being, At Suja, when we got to the peak at Whole Foods, they were interviewing 61 brands for their next reset, 61 cold-pressed juice brands. And you don't need to be first, but you don't want to be first. Yeah. And, you know, I think that's a bit where I was with Rowdy. But, you know, in fact, sometimes being second or third is really great because you can see the ones that are the first or second and what they've done. And we were able to watch a couple of the protein sodas that launched, and they came out with sucralose. And, you know, sucralose is not where the puck is going, but it may be where the puck is today in energy drinks, for example.

13:32Jeff Church:But it's not where the puck is going. People don't want artificial sweeteners. Moms aren't going to give artificial sweeteners to their kids. So we were able to, okay, we're not going to do it with sucralose. We're going to do it with an all-natural, you know, basket of sweeteners. And, you know, we're going to add something else in it. We're going to put fiber in it because people need more fiber in their diet. So it also has three grams of fiber in the product. I think it's about differentiating it. I think there'll be 25, 30 brands that come out. You'll see, you know, probably next year at Expo, you'll see them all over the place.

14:01Jeff Church:There's a lot of them this year. I don't worry about that because, you know, as long as we've got a pathway that we can follow to success, and our pathway in this case is our relationship with Sprouts. You know, we were able to negotiate a deal that's an exclusive to Sprouts. You know, so people are like, why would you want to do a year-long exclusive? Why would you want to do a year-long exclusive? Well, they're giving us some really great, you know, benefits as a result of that, including dual placement in the ambient section and in the cold case. And as you know, I mean, as a brand with seven SKUs, it's a launch in ambient and five in the cold case.

14:34Jeff Church:And when you get that kind of support from a retailer, you know, it's worth it to lean in. And one of the mistakes I've made over the years, and one of the mistakes I've made with Rowdy, the energy drink, is I went too broad with my retail distribution too fast. And when you do that, it feels good. I mean, you're kind of pounding your chest. Your investors are happy about it. You've got all these doors you're building. You know, there's, you know, James Richardson has a book called Ramping the Curve, you know, which is a fabulous book, but it kind of cuts against that entirely. And it says, no, you go with one retailer, learn your consumer, do the demos, you know, be face to face with them.

15:06Jeff Church:You can start in one store, one natural food store, and just learn your consumer because the faster you learn your consumer and what motivates them, the more you're going to be able to tweak your packaging, tweak your product. And then once you get that right, then your numbers are going to go up and then they'll expand it to the rest of their stores. There's a slow approach, but this is a slow, not much money approach either. So it's a good approach for a lot of people. And just keep doing that. And if you go too big, too broad, too quick, I went into Team 711s with Rowdy to start. And I think part of that was my partner was a NASCAR driver and part of it was my experience.

15:37Jeff Church:But I watched them one by one by one go down to zero over time because we hadn't established that relationship with the consumer. And that's just really important to be able to do. So I think there'll be a lot of brands that come in here. And retailers, oftentimes, the pendulum never stops in the middle. So it starts here, and then it keeps going, and they'll overproliferate it to here. And then all of a sudden, you'll see all these protein sodas. And it's happening with the prebiotic sodas right now. You're seeing more and more come out. But how are they going to get the traction? It's going to be really hard.

16:05Jeff Church:So you have to do something that's unique, or you're not going to get the product on the shelf. A retailer is the gatekeeper, and the gatekeeper isn't going to let you on the shelf if there's five other brands that he has on the shelf. You may swap out if one's not performing, but then you're kind of focused on that. So with the protein sodas, there will be a lot of people in it. I'm not concerned about it because if we have our head down for the next year with Sprouts, and already we're the number one selling brand in their forager set out of over 60 brands. And that's just in a month. And if we can build that story, then as we go to broaden our distribution next year, then we'll have every retailer that we want and knocking on our door.

16:42Jeff Church:And even then, we won't go to everyone. We'll go to a couple other national retailers and go from there. Jeff, you bring a really interesting point, which I think a lot of founders struggle with, is that balance between timing and speed and size of business. I think I experienced that when I was just starting out with my brand T-Squares, where I wanted to be in as many places as possible because we also had this financial burden of like constantly losing money. And it felt at the time, having this been my first journey, that if we can get those initial purchase orders from retailers, then that could come in and feed and support the business.

17:19But as you mentioned, being at that scale without having the consumer demand or financial support to really fund that awareness and growth campaign, it was ultimately really detrimental to the business. And it's not like a similar thing happened with Raleigh, which is really overextended as well. And I'm curious about this kind of like methodical approach to Prota of like launching and Sprouts doing the exclusive. And then ultimately, right, like you can prove out the velocity numbers and then take that story to other retailers, which makes the yeses a lot easier. If you were to say, look, there's amazing velocity that we have versus a low velocity spread across many doors.

17:58I see that just being a really compelling story.

18:00Jeff Church:Because in the beginning, you're selling retailers on hope, right? Because there's no data and you're selling them on, you know, hope of what you can become. Yeah. So they'll take the shot at you. But if after six months, you're, you know, 50 % below the median velocity in the set, they're not going to keep you in there. You know, maybe they'll give you a year, but they're not going to keep you in there. And when you're talking about category size, I think it's, you either go where you're creating a category, like what GT's did, you know, with their kombucha, you know, but that took, you know, it took him 20 years, but he built a massively large, successful business for us.

18:31Jeff Church:Or you go into something that is a big enough category. Maybe it's at least a billion dollars, you know, category in size or two billion dollars in size that you have someone to sell the business to if that's your desire at the end. Because if you don't have it in a big enough category, then you're not going to get a lot of buyers. You're not going to get you'll get some angels that know you, that know the product. But you're not going to get institutional capital going to come in because most of the time there's a three step process. Right. You're you're creating a brand. You're selling it ultimately after five, seven years, whatever, to private equity firm.

19:02Jeff Church:who's then going to build it and take it to the next level and then sell it to a strategic. And if you don't have the room for whoever your buyer is to be able to build something and sell it, unless you're selling to a strategic. But a lot of times the strategics, like Coca-Cola, doesn't want to talk to businesses unless they're doing$200 million in revenue. So there is a whole market of building a business to$30 to$50 million, selling it to the private equity VC community, and then having them actually resell it and build it, just like it was happening with Suja right now. Now, we sold Suja in 2020 for about$325 million to Payne Schwartz.

19:36Jeff Church:Today, I think it is actually. They're going public at about a$900 million valuation. And if you wait too long and don't sell it, you get what happened with Vitacoco a little bit. They didn't do that. And now they had to become that big company. So they had to go public themselves. And now they're building a whole franchise brand around that. So there are even ways to get around that. But you have to kind of understand where the buying community is at different levels. And where you want to go. That makes a lot of sense. I want to spend just a couple of minutes here talking about AI and business.