How Today's Leaders Are Building Tomorrow's Billion-Dollar Brands

0:10Hello friends, I'm Ray Latif and you're listening to the number one podcast for anyone building a business in food or beverage, Taste Radio. This special edition of the podcast features highlights from interviews with seven innovators, leaders, and disruptors who joined us on the show during the second half of 2024. Let's kick things off with Ben Goodwin and David Lester, the co-founders of leading better-for-you soda brand, Olipop. In this clip pulled from an episode published on August 20th, Ben and David talk about why marketing doesn't lean heavily into the product's functionality. They also explain why mission and economic outcome will forever be entwined and why hiring talented leaders at the strategic level is beyond critical.

1:02How has your marketing evolved to the point where you're calling yourself a soda, but you're also having to explain to consumers why it's more expensive because of the ingredients inside? You know, that's interesting because I don't know that we have ever actually gone through a crisis where we've felt like we have to explain it to customers. In fact, you know, it's interesting. The more I've kind of gone down this road, you know, we'll be in retailer meetings and they're really well-intentioned. And I, you know, I totally understand the place people are coming from. a lot of times it's going to get the question or it's kind of taken as this kind of common sense thing.

1:43Like, tell me how you're going to educate the consumer. And you obviously can't have no plan to educate the consumer. But if the foundation of your ability to sell your product is actually tied to educating the consumer, you're actually like you're pushing a rock uphill. I think one of the things that's been very helpful about our product is the fact that as a concept, it's mentally intriguing, and it's a bit sticky, right? Like, so what is this healthy soda that feels like a contradiction? But once you start to interact with it, it's actually incredibly self explanatory, like, oh, the pack design is telling me it's fun.

2:19It's telling me that it's healthy, but it's telling me that it's fun. First, I drink it. Wow, that really matches that soda experience that I that, you know, obviously, 97 % of households in the US interact with. And then, oh, I get it. It's like a healthier version for me. And then obviously, some of our more core customers are going to do a deeper dive and explore the ingredients more or understand, hey, this quantity of fiber actually makes a big difference. But I think a lot of times that exploration, to a certain extent, is self-guided. And a lot of it, I think, comes off the back of a customer that has already been provided value and has, to a certain extent, started to become enamored with your product.

2:59Whereas if you went out proactively and started trying to hammer people over the head with your health messaging or relied on, I need to drive education before I developed an emotional connection or value, then I think you'd actually have a much harder time of it. And additionally, I would say that the other thing that Olipop capitalizes on is the fact that there's a massive underlying demand that consumers have, right? Which is, you do have this in the US$42 billion industry with, and David just referenced it, 150 years of history in the United States. It's extremely deep as a category. And so you have all these customers who love, love, love and grew up with soda, but now have a really conflicted relationship with it.

3:44And Olipop really helps to resolve that pain and really provide somebody with that full experience, but they're not trading in their their short or long-term health. In fact, they're doing the opposite. They're investing in their health. And so you plop a pain resolution system like that into a category that has the second highest price in elasticity in beverage behind a coffee, and you actually have an equation that works pretty well. There's a huge emotional reservoir in the soda category. And for us, it was important to tap that. Consumer behavior change is very difficult. And so if you're telling people, stop doing this thing that you're familiar with and do this completely new thing.

4:25That's hard. And so, you know, for us, we were changing one thing, which is the ingredients, but everything else, you know, that people love about soda, we're keeping the same. And we wanted to celebrate that and meet consumers where they are and, you know, not take away the aspects of the category that people love. So I got to ask, and I'm sure you get this question all the time. if most people are buying your product because it's fun, because it tastes great, because it makes them feel a certain way, and I don't mean functionally, but just makes them feel a certain way in their daily lives as a part of their lifestyles, then why is the functional ingredient so important?

5:07Why is it so important to keep as a part of the brand? There's a lot of layers to this answer to this question. And I'm sure David and I are both going to have something to say about it. But look, from our perspective, we are a mission driven company. So the mission and the economic outcome of this business will forever be entwined. And the thing that gives us the extra rocket fuel in our daily endeavors and for the team, and I also think with a lot of our customers is the fact that we are looking to make an impact at scale. Now, arguably, there is some intrinsic impact in migrating consumers away from traditional soda by itself.

5:50And that's awesome. But the goal of functional soda, and again, we founded the category. So we feel pretty confident in our ability to speak to the goals behind functional soda is actually to not just be a neutral offering, but to be a contributory offering. And it certainly isn't going to negatively impact you to have that. In theory, it's higher risk. You actually have to do the work. You've got to do the research. You have to put adequate amounts of the right ingredients and store it correctly so that it's actually stable and gets to the customers in the way that you have communicated to them.

6:26But all that is actually the right thing to do if your goal is to shift human health at scale, which really is the framework behind our brand. You know, our goal is simply to say, it has been from the beginning, so you can build an amazing, profitable, rapidly growing firestorm of a business. You can also do it the right way and put your money where your mouth is when you're delivering value to your consumers. And if you marry it correctly, that will actually be rocket fuel to your business, not a burden. And we want to set that standard for the health and wellness industry. So they've got a case study.

7:04They realize like, not only can we do it too, but actually be advantageous to our business to do it. And if we don't move to that place, CDC else predicts that by 2050, 1.3 billion people globally will have type 2 diabetes, a completely preventable or predominantly preventable lifestyle disease. David, early on, and Olipop debuted in 2018. Is that right? That's right. Yeah. I think the back end of 2018 was when we first went into market in 20 stores in Northern California. How about that? And now you're at 35 ,000. That must be a trip. No, but early on, what was your most impactful hire? And as Ben referenced, I mean, Olipop's been a rocket ship several times over.

7:47I mean, I guess just a rocket ship at different speeds, or more specifically a rocket ship at the same speed, but from place to place. How do you identify the most impactful hires early on and as you are speeding through the galaxy? It's very difficult to highlight one individual hire that is critical. I think maybe a couple of broad statements on that. Hiring exceptional talent is probably the most important job in a high growth business like this. So if we can't attract and retain the best people, there's obviously huge parts of business. Ben and I are just not touching at this point. And so you need people coming on board that have the technical skills, also absorb the mission and carry the culture that we want to build here as well.

8:35And we invest a lot in that. The team did an incredible job where Ben and I are about to fly off in a couple of weeks to a new hire offsite that we do in Northern California, where we invite every cohort of new hires go through this and spend three days in Northern California and get immersed in our business and understand the culture and hear from Ben and I and also develop a cohort of people that they join with that can help them on their journey through the company as well, because it's crazy trying to keep pace with this growth. And it is something that we find every three, four months, you have to really get your head up and evaluate, are we resourced in the right way?

9:15does the team need additional support? So that's been a constant challenge and one that we've had to invest a lot of time in as well. We're in a very interesting space in terms of talent because there's a couple of factors impacting us simultaneously. So one, the growth that our business has had, David just made a really spot on point, which is kind of seasons of change that in a normal growth business might take a year or two years, we run through in a quarter. And that's really exciting, but it's also very disruptive in a lot of ways. So you constantly have to stay on top of that. And that also affects your team and your leadership team, especially.

9:59It's one of those things where you're like going up a mountain and all of a sudden, if you're going up the mountain at 10 times the speed, the environment is changing so rapidly. And, you know, I've been really, really impressed with the maturity of a lot of the leaders in our business who have been open to either taking on new areas of growth because they realize they're a little over their skis. And we've had some folks who've been open to re-leveling as it's been necessary. And it's also a real testament to not only the quality of leaders that we have, but the quality of the culture at Olipop that they've been willing to stick around and kind of shift their role as it's appropriate.

10:40I agree with David's point. There hasn't been a singular hire that's necessarily been the most impactful. But what I would say is focusing on your leadership and making sure that your kind of executive leadership team, your senior leadership team, they're really fleshed out. with the right senior people who are strategic at the level that's appropriate for where they're sitting is beyond critical. Because David's point, we're sitting at north of 150 employees now, and we might have close to 200 by the end of the year. And you are getting to a point where you're going from a place where you can stand in a room and talk to everybody to, I absolutely must have my waterfall, my strategic waterfall throughout my organization has to really work.

11:27And you only are going to be able to achieve that by people who have the raw technical skills, but also really have the leadership aptitude that's required to contextualize and disperse in a way that's appropriate for levels.

11:44Next, we have Porvi Patodia, the founder and CEO of pioneering chickpea snack brand, Vienna. In a clip pulled from an episode featured on October 22nd, Porvi discusses the trifecta of attributes that make for a great brand, how Vienna incorporates long-term trends into its innovation strategy, and how building to win means learning in small ways. Over the last five years, and certainly with COVID, obviously COVID was terrible in a lot of ways. But we kind of use it as an opportunity to really kind of reset the stage in terms of what our goals were. And it created a time period where I think as a CEO, I could say, you know what, this business is not about what's going to happen in the next year or two or even three years.

12:33It's really about what can we do to build just a beautiful brand that is really here for the long term. And so, you know, when I thought about and me and our team, when we thought about like, why are we here? You know, what is it that we're looking to build? And when I think about a great brand, there were kind of three attributes that I really focus on. And so like one, it's building a mission-driven brand that has, as I said before, highly differentiated products and is solving problems for people. The second piece is great margins. And the third piece is really exciting growth opportunities.

13:11And those three things to me is a trifecta, right? That's the kind of business and the kind of brand that I want to be working on. And I think is what a lot of people want to strive towards. And so, you know, getting all those three things together in a business, that's really exciting. And so that's what we've been working towards. And it's really amazing in the last couple of years, you know, we took a lot of actions to make those things happen. And, you know, here we are in 2024. And it's exciting because a lot of those and some risky decisions that we took, you know, have all kind of come together.

13:50And so we're here at a time where we're having, you know, our strongest year yet, both in terms of revenues as well as profitability. So both top line and bottom line with strong growth rates. And so it's exciting when you take risks and you do hard things and, you know, when those things start to come together and you really start seeing the results of that work. One of the things I tell founders when they talk about decisions that they're trying to make about their product lines or are they positioned well is I really encourage people to think about what are the long term trends that you're positioned against, right?

14:30I mean, the whole reason Vienna is here and why we're still growing and thriving is because of a decision that I made over 10 years ago when I started this brand, which was at the time I didn't have the advantage of Google Trends, but I was really betting on two trends. You know, one was a trend around protein and the second was a trend around chickpeas. And if you look at the Google Trends charts for those two trends today, over the long term, those have just gone up and up and up and up almost every single year. And they're at their highest peaks and continuing to go up. One of the unique challenges of consumer products is that you're dealing with physical inventory.

15:15And that is what really creates a problem for earlier stage businesses, right? That don't have, maybe their internal processes are just being built, right? And so they don't have the discipline or the history to be able to forecast how much to produce so that you're not underproducing and overproducing and all of those challenges. And so I think that one of the advantages that other industries like the tech space have is that they're not dealing with physical products. And so if you learn that something is not working in the market, you can rapidly just change, you know, your product features or whatever it is you're working on.

15:56And so I've created this methodology that we're following at Vienna now, and I call it the build to win methodology. And it's this idea, it takes this idea from the tech industry, which is, let's just, I'm just going to summarize it as sell, design, build, which is you sell first and you confirm that you can sell and then you design and build. And in our industry, because we're dealing with physical products, it's like we've got to build first and then see if it sells. So that process and how we have to do things because we're dealing with physical goods is a huge challenge for the smallest and youngest brands.

16:38Because inevitably, considerably if you're innovating, you're doing something that isn't known fully in the market. And no matter how much you try to take your best guess at what you think is going to work, you just don't know till you know. You have to kind of put something in the market to know if this is going to work or not. And then now you've already invested all this money into inventory and suddenly you learn this flavor is not working or this claim you thought was going to be amazing is actually not as powerful as you thought or this naming or whatever it might be. And so the idea behind this methodology that I created is the build to win methodology is take that idea that comes from the tech space, which is cell design and build and implement it within CPG.

17:27How do you do that? And there's kind of, you know, there's four or five pillars underlying that methodology. So, but it's really about testing and learning in small ways in the market before you make big commitments to do a launch. So that involves creating something, testing it with consumers, putting it into both retail and online, and really getting that omni-channel feedback on whether something is really gonna work and getting the velocities you want and doing all of that before you make any large commitments around launches. Let's keep it going with Charles Korstein, the CEO of fast-growing, better-for-you snack brand, Lesser Evil.

18:10In this clip from our episode published on July 30th, Charles discusses the value of self-manufacturing for end consumers, why he advocates founders being super scrappy and not overhiring, and his belief that being an entrepreneur is a hero's journey.

18:31The whole thing, the whole beautiful thing about having your own manufacturing facility and really being zoned in on operational efficiency is like, I think that we can produce amazing snacks at a value that a lot of other people can't because we don't have a co-packer in the middle, right? So we basically take all the savings that we have. Obviously, we make margin because we need to stay in the business, but we pass on all those savings to our consumers. And I think doing that proves that we can sell organic, better for you oil, you know, packaging that's basically enhanced, better salts. And, you know, we think our products are better in a lot of different ways than our competitors.

19:10And we sell it, most cases, cheaper now than most of our competitors, especially since COVID. You know, I spoke with Matt Weiss from Ryan Snacks at Expo West, and he's a big fan of yours. And, I mean, he and Ryan Snacks just bought a manufacturing facility. Yeah, I think they're doing the right thing. I talked to him before he did it. You know, I said owning your own destiny is an amazing thing. And, you know, you're going to be able to basically innovate really quickly, come up with what we call rolling thunder, which is different products for different customers. You get your customers supercharged.

19:43You have all your own employees. You start figuring stuff out together. And all of a sudden, you're adding a lot of value to your supply chain. And you can be a lot more efficient. So I think that that is a really good move for them. So for entrepreneurs listening right now and saying, okay, I'm at year one or two, and I'm thinking about opening up a manufacturing facility. I mean, would you recommend they do it or is it more you need to be like where Matt is? You've got to be super scrappy and you've got to be able to go out and try to figure out where you can buy used equipment. And you've got to find like some garage or, you know, I think our first production facility was like a mechanical operation or something.

20:20It was like, you know, there was two sides. It was like we took$5 ,000 or$4 ,500, and there was$5 ,000 on the other side. There was some other facility. And we put our first line in, and it wasn't all that efficient. We had a shitty hasten bagger. Sorry for the language. That's fine. It wasn't all that efficient, but we figured it out. And as we made, you know, we priced things fairly. We didn't have a ton of overhead. We didn't hire. People overhire consistently in this business for whatever reason. We had low overhead, and whatever money we made, we'd go and buy another piece of equipment. it.

20:48And we just kept buying junky equipment and figuring out how to do it. And it worked. You know, I don't think it's all that complicated because I'm definitely not super intelligent. So the answer is yes, but be super scrappy about it. Be super scrappy about it. I'll go back, going back to people who are higher in this industry. Can you elaborate on that? Yeah. I've gotten kind of granular on this. Like I basically looked at our company in terms of, okay, what is our gross revenue per employee? And I looked at like, what do most large CPG companies look? And the best CPG companies are like four or$500 ,000 per employee that they generate in revenue.

21:26So if you're a company that's got three, four or$5 million in revenue, you should not have a staff of 20 or 30 people. That means your fixed costs are way too high. You know, if you're at 4 million in sales, you should probably be eight, 10 people most. I gotta ask about, you know, your personal goals here. Like you took a company that was in, I think, what did you call it? As I'm going to quote you from our last episode here. You said retail buyers regarded lesser evil as a dog with fleas. It's no longer that for sure. But do you have a personal outlook in terms of like where you want to be and where you want to build this company, how you want to build this company for the future?

22:06I guess what I'm asking is, is there a end game that you see that you have in mind? Yeah, I want Lesser Evil to exist for the long term, for sure. I want, and it's not just about my legacy, because I think that's somewhat ego driven. But when I kind of sit back at the end of the day, and hopefully I'm on a beach somewhere, I want it to be like this healthy brand that's gone mainstream. And that is kind of like a Lays or, you know, a Doritos or something like that, that, you There's some attachment to those products that I created. But other than that, I just, no, I don't have any huge plans. Because it feels like the business is you.

22:42No, it's not. No, it's not. Well, no, I mean, the business is you in that you live the business every day of your life, almost every minute of your life. Not that the business is Charles Corsi. Being an entrepreneur is like setting off on a hero's journey. It's like, you know, the movie Star Wars? Sure. You know, it's an internal struggle and it's an amazing opportunity to recreate yourself. So this whole journey with lesser evil has been like this personal journey that I've gotten to kind of go through all these ups and downs and these turmoils and, you know, redemption. And, you know, it's been an incredible thing.

23:18And the best part is I've gotten to do it with so many amazing people that I love. I'd like to write a book on this kind of stuff because you can't make it up. Well, maybe we'll title this podcast The Redemption of Charles Gourstein. Basically, yeah.

23:33next we have peter rayhall the co-founder of groundbreaking protein bar brands rx bar and david in the following clip pulled from an episode published on october 15th peter talks about his obsessive work ethic and leadership style how to create quote the best business strategy and what he means when he says that happiness is irrelevant it a good leader's got to flex between micromanagement and macro management right you can't stay too much at the macro and you can't stay too much of the micro you got to like really understand when to go back and forth between those two things when is the problem too small though i mean how do you know you know based on how impactful it is i think in general there's like a hundred ways to do something.

24:20So, so you have to have a good sense of how important it actually is. So anything with product, with people, with brand service customers, like if there's a serious problem, that's worthy of micromanagement. But yeah, I think as leaders, you got to use good judgment. And it doesn't mean you're like a bully coming in and sort of pushing, but, but it's just making sure that the right things get the appropriate attention. I like business fundamentals. And I think one of our strategies and my personal strategies is like a satisfied customer is the best business strategy. I'm going to write that down.

24:59It's so good because it's true. It's like if you just turns out, if you just make customers happy, even ones that are upset with you, it all works out. And a lot of entrepreneurs make a huge mistake of just looking at customer service and call it consumer service as like an expensive burden or line item that's inefficient. I think they're making a grave mistake. And it might seem daunting, but you want to scale the unscalable, as some say. And you can tell a lot of consumer brands have shitty customer service because when we respond, they're sort of shocked. It's actually an uncompetitive market when you think about, like, in America, people's customer service experience with other brands.

25:40I don't think it's that good. It's offshore or no management, bad bots trained on bad SOPs. So back to the fundamental thing, it's like you want to satisfy customers the best business strategy. And then we are in the consumer goods business. So like two things you better do right is like serve the consumer and make great goods for them. You know, I think about your journey, Peter. And, you know, as I'm doing my research and doing some background work, I keep thinking of a name and that name is Mike Rappoli. I'm pretty sure you're familiar with Mike. Mike Rappoli is the co-founder of Vitamin Water.