Flops Or Future Hits? Rethinking Failed CPG Products.

0:10Hello friends and thanks for tuning in to taste radio the number one podcast for anyone building a business in food or beverage. I'm Ray Lateef, the editor and producer of Taste Radio, and with my co-hosts, John Craven, Melissa Travers, and Mike Schneider. In this episode, we break down the Hershey Company's plan to return all Reese's and Hershey products to their classic milk and dark chocolate recipes by 2027, sparked in part by criticism from a descendant of founder Harry Burnett Reese. We also dive into whether discontinued brands could survive or even thrive in today's market and spotlight a few standout products along the way, including a surprising Grillo's and Liquid IV mashup that you truly have to taste to believe.

1:00You know, there's this really exciting event that's happening next week. It's on Thursday, April 16th from 5 to 7.30 p.m. It's in New York City. Ooh, can I come? You can come. Can I come? You can come to us. I'm busy that night. John Craven will not be there. I'll be there. I am going to be there. Okay, okay, okay. Of course, the event is the Taste Radio NYC meetup. It's happening at the offices of Anshin, which is in Times Square. Now, I know people aren't usually that thrilled about going to Times Square, but note, you should be thrilled about this event because it is absolutely a can't-miss opportunity to mingle network and sit down with some of the brightest minds in the industry, particularly from the metro New York area.

1:43We've got over 120 people signed up already, and we're expecting even more. It's very, very important that if you'd like to attend, you register for the event. You can do so at tasteradio.com slash meetups. You will see all the information there. It's very quick to register. And once again, only registered attendees will be able to join. That's right. Meander past Spider-Man, Elmo, and the Naked Cowboy, and just come right to the Anchin office. Yes. We'll be there ready for you. There you go. It is free, as we've mentioned in previous episodes. We just ask that if you're a founder to please bring samples of your products.

2:22We will have a space and an area for you to position your wares such that everyone will see them and want to try them. A huge thanks to our partners for this event. Of course, Anchin, Vibrant Ingredients, Belay Solutions, Next Food, which is the maker of Cherubundi and Goodbelly. And of course, Corner Market Communications. We are thrilled. Thrilled. Thank you. To be partnering with these companies. Thank you. Absolutely. Also, everyone knows BevNet Live is coming up. I'm not going to beat a dead horse here, but... It's not dead yet. Come on. It's not dead yet. In about two months from the New York City meetup, we'll be back in the Big Apple for BevNet Live.

3:03I am thrilled. I'm really excited for some of the folks that are going to be presenting, including, of course, Tom First, whose office, I'm not sure why, we could just do a BevNet Life here in the Boston area because Tom and his team at Culture Pop are like right down the street. Making great better for you soda. Making great better for you soda. Yes, that's what Culture Pop is. They bring it to us sometimes. They stocked our fridge. When did they do that? They brought the Noah Kahn black cherry. I drank most of it. Oh, okay. Yeah, I had a lot too. It was so good. Yeah. Yeah. For folks who don't know, Tom First is the founder of Culture Pop or one of the co-founders of Culture Pop.

3:36He is the CEO of the company. He's also, I think it's a pretty well-known fact at this point that Tom is also one of the founders of Nantucket Nectars. Yes, sure. Yeah, which I haven't seen in a while. Have you guys seen Nantucket Nectars in a while? No. Not really. No, strange. I wonder what's going on. Yeah. That's okay. Interesting you bring that up, John, because I want to talk about some things that don't exist anymore on the market, but we'll hold off on that because there was a story that dropped on Nosh last week that we've got to get to first. And Melissa, well, you didn't bring this store attention, you're like, we got to talk about this in the podcast.

4:07And I am really excited to talk about this because I have been yelling and screaming and ranting about corporate companies using better for you ingredients, going back to the original formulations or ingredients. And after screaming and yelling by the consumers and interested parties, things are actually moving in that direction. You know, it's interesting. You're not the only person who's screaming and ranting. My kids were the ones who, I mean, I had heard about it, but they kept talking about it. The deal is, is that Brad Reese, who's the grandson of the founder of Reese's, he put out a note on LinkedIn to Hershey's calling them out for replacing milk chocolate in some of their products with basically vegetable oils and fats, compound coatings, just definitely not chocolate.

4:56And, you know, really like put them to task. And then I went through his LinkedIn feed and there's post after post after post after post. And, you know, I mentioned that my kids brought it up. Mr. Beast and his brand, Feastables, they put together a YouTube short on it, calling out Hershey for, you know, replacing milk chocolate with all of these certainly non-chocolate ingredients. And I thought it was such a good move for a challenger brand to jump on the train. Well, unless you want the other brand to switch back, which is seems like what's going to happen. You think that's why people switch to Feastables?

5:35All those 12-year-olds are like, man, I got to have real milk chocolate. Well, I mean, from an economic standpoint, it makes sense. Cocoa prices are volatile. They're only going up. And brands have just a few choices here. They can shrink the size of the package. They can raise the price or they can, quote unquote, innovate and replace the expensive ingredient with something else. I'd rather pay more for real chocolate. But I mean, the thing that it does do though, Melissa, you know, the Mr. Beast call out or the Reese's call out is get a bunch of numpties on a podcast to talk about it. Exactly.

6:08And, you know, to be clear, Brad Reese's LinkedIn post was, I think that was the first call out, but this was certainly a great way to further it and increase the audience of people who knew what was going on. Well, typically when something like this happens and it's headline news, it's because of a class action lawsuit where consumers are saying, hey, you're not saying or you're not delivering on what you're saying on front of PAC or in your marketing. Instead, this was an activist. I don't know if he's the shareholder still in the Hershey company or not, but he's certainly an influential person who educated a lot of people about what they're eating or what they're not eating in this case.

6:49And so Hershey's CEO claimed that the switch to the real thing had nothing to do with Mr. Reese's rant and his very, in my opinion, positive and impactful rant. But of course, how could the two not be aligned? Yes. Right. And I think it affects like 3 % of the products that Reese's has and they've pledged to change them back by 2027. But I think it's such a, I know, right? Like it's not happening necessarily anytime soon. Got to work through all that inventory. Yeah, for sure. For sure. But it's such a good example of how a founder, you know, founder legacy and how it still has meaning even when, you know.

7:30It's just disgusting what legacy brands call chocolate now. I mean, Butterfinger doesn't have any chocolate. There's so many brands that are trying to pass off. Butterfinger doesn't have any chocolate. They're chocolate over the butter crunch, whatever's in there. I was going to say, your mind will be blown when you learn what that orange stuff in the middle is. I have no interest in that. I don't want to know. Tony's chocolate only. I want a modern day Wonka bar or bust. I'll pay whatever for that. But this certainly gives other brands an opportunity to step into those shoes and do the right thing and sell chocolate.

8:04I mean, look, there's better peanut butter cups and stuff already out there. Justin's. Yeah. Super foodio. But I do think that this might have a ripple effect on better for you and premium chocolate brands in the future, because people are going to taste something that's a little bit closer to what the real thing is, as opposed to something that's just, as you mentioned, an oil based recipe or chocolate. Fake news, Ray. What do you think, sir? Because I just don't think that's the reason that someone's going to buy a Justin's or whatever. I mean, there's still going to be this perception and reality that better for you brands probably end to end are using better ingredients than something that's being priced as like a value mass produced available literally everywhere product.

8:54I'm 100 % on board with that. I'm just saying I hope that the taste of these reformulated Hershey and— I hope it sucks. No, that these Reese's products actually taste a little bit better and more like what chocolate used to taste like, at least their chocolate used to taste like. And I think that might have the ripple effect that I'm talking about where people are tasting better chocolate from these value brands and saying, oh, well, you know what? Now that I know what chocolate tastes like and it doesn't taste like this, whatever it is, and I appreciate better chocolate and premium chocolate.

9:25Because I think sometimes when you do try a product that is truly and actually what it says it is and haven't eaten the fake thing for so long, you think the fake thing is the real thing. How about that peanut butter in the middle of those peanut butter cups? That's the weirdest peanut butter you'll ever have. Yeah, true. But as soon as you step out of the U.S. and like into the U.K. or in Canada and you taste the equivalent, you taste the Kit Kat equivalent. You have a Kit Kat in U.K. or you have a Kit Kat in Canada, you're going to be like, what have I been eating? We have peanut butter material.

9:56Peanut butter and peanut butter like flavor. Speaking of a disclaimer, I heard this on the Internet, but apparently bananas used to taste and smell like the candy. You know, when you have a candy that tastes like banana is a banana flavored. That's the actual taste of bananas from way back in the day. And somehow the mass production or the mass growth of banana trees has created something that doesn't taste like the original banana. We have a monocrop of bananas now. And from what I understand, we're in danger of losing. I don't know what the species of banana that we all buy from the grocery store.

10:35But from what I understand, it's in danger and we may not have bananas. Or maybe it doesn't exist anymore. We have this conversation. It's so fascinating that the banana flavor everybody loves is like almost dead. It's so sad. It actually, it is sad when you think about it, because nowadays when I eat bananas, this is a real tangent. We'll get off this tangent momentarily because John's like, I am going to shoot you. Folding chair, right? It's almost like certain kinds of tomatoes, especially if they're non-organic. It's almost like you're just eating fruit or vegetable flesh. It doesn't taste like anything.

11:09And I'm getting to the point right now where if I eat banana, it doesn't taste like anything. Yeah. Okay. There was my tangent. You know, what I couldn't tell though, from the, you know, Reese's articles and LinkedIn posts that I was reading was whether the sales of that 3 % of product that had had the milk chocolate replaced, whether their sales were declining or not, I still can't tell whether consumers really could tell and stop buying them or not. I mean, there could be a million reasons why the sales went down, right? Well, I don't even know that they did. And as a matter of fact, their quarterly earnings were soaring after they replaced those ingredients because they're obviously their profit margin was higher.

11:46Wall Street likes cost cutting, layoffs, all the things that might be bad on the I don't know, from someone else's perspective. Yes. Guessing your margins? That's risky. Belay Financial gives CPG brands the clarity to scale smarter, faster, stronger. Get your free inventory ebook by texting TASTE to 55123 and start making data work for you. Tune in at the end of this episode for an exclusive interview with Matt Lynn of Belay Solutions. He sits down with Melissa Traverse to break down the biggest inventory and accounting mistakes CPG founders often make. You'll learn how to bring clarity to your numbers so you can scale with confidence.

12:33Well, there could be a million reasons why a product or brand is doing well and not doing well. But I want to challenge us here in this room. This is a surprise I was talking about. As to whether a particular brand or product was either ahead of its time or never really had a shot. By my side here, I have a box of products that have been discontinued that are no longer on the market. Which were all in his pantry up until yesterday. No, they've been in various places. Yeah, right. Squirrels. Under my arms. He's the worst of that. He is the best in this case. So I want to talk about a handful of brands here.

13:15They're mostly beverages. But I want to start with this one. This is a brand called Spacho. Now, if you've been with BevNet for some time. I remember Spacho. Is that liquid brown? This is a very old bottle. Okay, so context. Spacho French onion soup edition. Context, context, context, okay? Spacho was a very short-lived brand of gazpacho-inspired vegetable juice. So it was a V8-type product, but with a gazpacho flavor and consistency. This was, I believe, only on the market for less than a year. It did win our New Beverage Showdown, I believe in 2013. It won one of the competitions. But due to a manufacturing error, the founders decided that it was not worth it for them to continue with the brand.

14:07So they had gone through a production run. The production run didn't go well. They spent a lot of money on it. And they just decided we're not going to spend any more money for another production run of Spot Show. I'm wondering, and I'm going to put it to you guys. Is this a brand that you feel, this is just your opinion, was ahead of its time or never really stood a chance? Let me give you some fact, Ray. Sure. You know, look, I think there are certain product types out there that people will look at the market and say, why doesn't this exist? And then go create it, not knowing maybe that others have tried to create it and fail before.

14:45and I think this is one of those products that the biggest challenge with it is it's a product that a lot of people like like gazpacho is tasty right but when you're trying to like repurpose it into a beverage trying to get me to drink soup as opposed to like having a bowl trying to change the use occasion the education hurdle for this brand or any type of drinkable soup is really really difficult. Especially when you go the gazpacho route. I mean, people tend to know what gazpacho is, but it's not exactly, I don't know, on everybody's dinner table. We've seen different evolutions of that come along, like the drinkable bone broth craze that also kind of went up and then down.

15:31And it's found a niche, but it didn't explode the way they wanted it to. Yeah. And to be clear for our listeners, this is a single serve bottle. It comes in a 12 ounce plastic bottle with a almost full wrap and a red cap. So it was intended to fit in the deli case, maybe as a lunch alternative or maybe a product to have with your sandwich. So at the time, I think a lot of people saw some potential. But as you pointed out, John, three people did the judges of New Ever Shutter. I think it's a product where you had to do a little bit more education and explanation as to when, how and why you would use this product then actually existed, Which is just frankly impossible for any emerging brand to do purely on its own.

16:10And all of these brands have never started at a time or become a catalyst for some more broad movement of people wanting to drink soup. If this was intended to be a revival of vegetable juice, I guess I kind of get it. People used to drink tomato juice. It used to be a thing. But I think... I mean, it's still a big market. Most of them, Plains. Is it really? Yeah. Who's drinking tomato? Well, besides Bloody... I mean, Bloody Mary mixes go like crazy on a plane. And V8 is still a big deal. So they must drink them at home too, right? See, on a plane, it's a big thing, but I don't know. At buffets, sometimes you see, you know, a carafe of tomato juice.

16:46Oftentimes, actually, you do, yeah. Well, I think rebranding this as sort of like, Spacho doesn't necessarily make that much sense because how many people on a regular basis are guzzling gazpacho? So reinventing it. My point exactly. Right. Reinventing it is something that people don't necessarily consume that often. But even if it were another type of soup, it still has the same problem. And there have been other like drinkable soup brands that, I don't know, we're a little closer to more widely consumed things. Although I've never seen a drinkable clam chowder. Anyway. Period. The chicken soup.

17:19All right. So it sounds like this is a product that probably never really stood a chance, but that's what I'm hearing anyway. So far, yes. That beverage won before my time. Now, this is a brand or at least a product that was launched by Seth Goldman's company called Eat the Change. Now, Eat the Change started out as a brand of mushroom jerkies. And he started the company, I believe, in 2021. And he was creating it as a sustainable vegan alternative to meat-based jerkies or animal-based protein jerkies. And they expanded into this product, which is their organic cosmic carrot chews. Now, this is a Welch's chew type product.

17:59What are the Welch's products called? Welch's Chews? Something like that, yes. They have since, or they're about to announce that they're reformulating their products to include no artificial flavors or colors either. Which is interesting, yes. So, of course, when Coca-Cola decided to discontinue Honest Tea, Seth and his team saw an opportunity to get back into the tea business with just iced tea, which they are now completely focused on. So ETH Change as a food brand no longer exists. Right. But I had these as well, these organic cosmic carrot chews, which are very delicious. We tasted these at Expo West.

18:32They're organic carrots sweetened with fruit juice and turned into these little gummies. They have a sour cherry berry flavor that I'm holding in my hand. This is my personal opinion. Like, this was a little ahead of its time. I don't think it was ahead of its time. It's just they saw a Baker opportunity in iced tea and decided to go all in on it. I think this would have been, you know, the path to victory just would take more time, you know. But just consider the explosion of better for you candy that's out there today. Sure. And I think this would fit really nicely into that mix that we're seeing.

19:07Now, this isn't necessarily specifically marketed as a candy. Again, I think this is a kid's snack that belongs in your lunchbox. And this is how it was presented. It just was a little bit ahead of its time. And they probably had the runway to be able to experiment with ideas like you just talked about there, Ray. That's clearly minimum viable branding. They were trying to get the product into people's hands and see what people thought about it. And then Honesty shut down, and they were like, we know how to do that. So they, like John said, they went all in there. And that is one that I think was ahead of its time and didn't quite get as much oomph as it could have to show us what it was made of.

19:45And that's a disappointing one because those are tasty. They call out this product is carrot chews. I don't know if your market is kids, if that's the smartest way to go about it. Like Evergreen Waffles, for example, has veggies and fruits in their product, but they call it out on the package. I think that was probably a problem. Yeah, only mom needs to know the carrots are in there. Yes. I mean, that is the other like difference between Just Iced Tea and the Eat the Change products. It's like Just Iced Tea was like the steps to getting to like being able to go far and wide were not that big. Whereas I think with this, yes, I mean, it would have had to continue to evolve.

20:23Yeah, I think we're in violent agreement on that one. It's a good product. Yeah, probably ahead of its time more than it did have a shot in the market. Yes. Now, this is a brand that we all loved when it came out. I believe it came out in 2020. It's Proposition Cocktail Company. Oh, yeah. So this is a brand of cocktails that come in these 6.7 ounce glass flasks. They have a variety of flavors. This is their smoky margarita flavor. And just to be clear, these are all non-alcoholic. Did it have CBD or something? Correct. Yes. John Corchitis founder. Correct. Yes. So hemp extract, I think it was originally called out as CBD and then - He moved it to hemp extract.

20:59He changed it to hemp extract. Clearly, non-alcoholic cocktails, having a moment, how long this moment will last remains to be seen. But we all love this product. We all love this brand. Yeah, so good. And I feel like this is another one of these products. And maybe, you know, John ran out of money. Maybe he just couldn't find the distribution at the time. Maybe just there was something wrong with how he went to market. It was like right before the non-alc explosion too. And it might have been a timing issue for this one. Also, maybe the Vassal too. Like, you know, that flask is super premium.

21:32That was the first thing that I thought of. So this is a flask. The idea is you drink out of a flask. But you really don't want to drink this unless it's over ice or cold or mixed with something else. That was my feeling. I had it in my trench coat. Did you actually drink it out of the bottle? I never did. I did, yeah. I think if they, right now, brought this back, got rid of the hemp, put in some actual booze, economics might work in that package, and it would look pretty damn cool. Yeah. Okay. So with some tweaks, this was a little ahead of its time. I think it was way ahead of its time. Yeah.

22:09And some of the ingredients here for this smoky margarita, And I would drink this right now, even though it's expired. It's lime, agave, smoked chipotle chili, and sea salt. I mean, that just sounds amazing. Yum, yum. It probably still does taste so good. One other thing I would say to John, if he's listening, he's probably like, F these guys. I'm calling an Uber. I think he means John Corquaitis. This calls out, he describes it at the bottom of the label here. Don't make me laugh. What's wrong with you? Are you sore or something? Just trolling Ray extra hard. I got smashed. Some guy just led with his elbow and smashed me over the weekend in soccer.

22:49And it hurts to laugh. Okay. One other thing I would tell John or suggest that John change on this package. And I think we probably mentioned this to him a number of times. But the description of an adaptogenic plant-based drink is not what this is. This is a non-alcoholic cocktail. Yep. Yeah. So, yeah. You know, Ray, I think it's interesting. that you're germ-averse. Are you not date code-averse? Oh, I'm very date code-averse. Okay. He's not going to drink that stuff. He's just keeping it. Okay. Okay. I just wanted to make sure I understood this. He's throw things away-averse. I am throw things away-averse.

23:25He's going to waste it. Even though it's already passed. It's you stayed. We'll do one or two more. This is fun, Ray. Yeah. Isn't it? Okay. It's like a game show. We could do this for infinity because Ray... You have a legit horny problem. This is the tip of an iceberg. No, I knew we'd have a day like this when we could actually talk about these products. Do you have a beverage time capsule in your backyard in Brookline? I have a spaceship, actually, that is buried in my backyard full of products from the past and future, actually. It hurts. Okay. This is a brand in my hand. It's a shot brand called Takimai.

24:02This is a three-ounce bottle. It is described as farmed Fiji kava. The benefit is that it calms and soothes. This is their chocolate banana variety. John, I know you remember this product. Of course, kava, I would not say is an ingredient a lot of people know about. It definitely seems like it's having more traction than it had in the past. I feel like if you're going to drink kava, you probably want it in a smaller format. And I think if you're going to sell, no? I do like mellow. Well, yeah, exactly. But here's the thing about... Nice slim can. Well, they have a wide can. Delicious banana. Yeah.

24:40But I feel like if you want a functional ingredient like kava, and I believe this of a lot of functional ingredients, you want less liquid than you want more liquid. And I think if Takimai were to come out again today, I might think this brand might have a shot. Yeah. And the fact that the liquid itself, it masks flavor probably pretty well, which is oftentimes a problem with kava. It has a strong flavor. I don't know if you guys feel this, but when I drink kava, the back of my throat gets numb. So I would also, I don't know, it like numbs. What are you drinking? No, just a can. Like if you just drink a can, like do you get that like numb feeling?

25:18So with this, you just shoot it and you get your relaxation. Right, exactly. I mean, the counterpoint to that and maybe the reason this didn't work is that the way that mellows positioning itself is as an alcohol or adult beverage alternative. Exactly. And a cool can to hold while your friends are holding their cocktails or whatever and tastes good and then also gives you that adult function. I mean, there have been kava beverages for forever. And I think the thing that was missing was that no one was going out searching for it. And I think that is kind of what makes kava stick now is that people are looking for like alcohol alternatives.