What Betting On Brands Taught Darren Rovell About Building One

0:00More SKUs, more data, more complexity. The beverage industry is changing fast. VIP helps suppliers, distributors, and retailers stay ahead, turning purpose-built beverage data and technology into smarter decisions and better results. For more than 50 years, VIP has helped power the beverage industry. Now, they're building what's next. VIP, empowering smart decisions. Visit vipinsights.com for more information.

0:37Hello, friends. I'm Ray Lateef, and you're tuned into Taste Radio, the number one podcast for anyone building a business in food or beverage. The best founders know that great products don't win on their own. Investor, entrepreneur, and longtime business journalist Darren Revell joins Taste Radio to share the lessons he's learned backing breakout brands like Athletic Brewing, Pop-Up Bagels and Vienna Snacks, building his own company, Kickstand Cocktails, and evaluating hundreds of startups every year. He explains what separates investable founders from the rest, why adaptability beats stubbornness, and how emerging brands can carve out an advantage, even in the most competitive categories.

1:30Hey, folks, it's Ray with Taste Radio right now. I am supremely honored to be sitting down with Darren Revell. Darren, it's great to see you. I'm honored to see you as well, Ray. I don't know how you do it. Your schedule is just absolutely bonkers. You're coming from Nantucket, your quote-unquote vacation in Nantucket, to meet me here in, of all places, West Hartford, Connecticut. I just want to do it in person. Everything's so much better in person. It really is. It really is. I do like to tell people that the reason I do so many things is I was blessed or hurt by the fact that I just have a brain that keeps spinning.

2:07And if I don't fill it, I'll be in a mental asylum. So. Okay. Well, you look good. Yeah. Well, yeah, I'm here. What are you doing for health? I run. I get on the scale every morning and I got to be under 200 pounds. Okay. You know, as we hit 48, it gets harder and harder. Got to get the 10 ,000 steps. Okay. Want to do one more marathon? No stem cells or anything else? No, no, no, no PRP. I don't cheat. No GLP-1s, no PRPs, no peptides. GLP-1s is cheating? This is a very interesting conversation. This could go hours. It depends on if you need it or not. And obviously that's very subjective. Okay.

2:45I like to kill people the most about the testosterone. When they show me they're up at 5 a.m. and they're doing the gym at 48, 50. I'm on testosterone. You're cheating. cheating. Okay. I won't comment on testosterone, but it's interesting about GLP-1s because of your investment in food and beverage and how prevalent those drugs are in innovation strategies and new product development. Everyone's looking to incorporate protein and fiber into their products. That was honestly like my first investment, Vienna, in 2017. Which is a brand of chickpea snacks, chickpea-based snacks. Yeah, the premise was there was going to be a lot of synthetic protein.

3:28And wouldn't it be great if you could have something that's naturally occurring that you can put spices on? And there it is. And Vienna protein and fiber. And I actually think, having seen the sales of their edamame product at Costco, I do think that as more and more things say protein in it in a not quite so natural way, Vienna makes more sense. as chickpeas make more sense, as people will seek and go to natural. Yeah, I would agree. I think in the long term, people are going to figure out that what is naturally occurring is probably best for you. You know, we talk about better for you all the time, but what's really best for you?

4:06I agree. And we're talking about Tastemaker Capital is the name of your investment company. And you've been funding companies for some time, 2017, I believe is when you launched. So the idea behind that, Ray, was simply I invested with Kobe in Body Armor. And before that, we said we wanted to be in something. And his business manager said no. And I said, I will never let someone else determine whether I want to be in a company or not. So in Tastemaker Capital, it's me, my brother, a high school friend who's a CFO of another company and is our CFO. And the premise was we're looking at all these VCs and most of them are saying, oh, we need to spend 10 to$20 million.

4:47We got to wait until B. And they're coming up with all these rules. And I was saying, why don't we just invest with our gut? Does it have a good founder? Does it have a good premise? Is it proving at least something? There are two to 4 million in sales. There were 10 to 15 million. And it's not a fund. It's SPV. So I call the product. I send it around to the people who are prospective investors. They say whether they like it or not, we figure out the room we have and what do you want? And that's it. And it allows us to hit a much better percentage because I am not making sure that I'm allocating funds and going into companies that I don't wanna go into.

5:32The companies that you've gone into are some pretty awesome companies and they include Athletic Brewing. No one believed in Athletic Brewing. No one, no one. Not a single person. And now look what the brand is today. I would assume it's probably approaching billion dollar valuation. Yeah. And at the time, non-alcoholic beer was St. Pauli Girl and that was pretty much it. Yeah. And Sharps had failed and a bunch of these things had failed and O'Doul's really wasn't anything. The crazy thing about my athletic investment was I looked at literally like three data points. I looked over the pond at Europe and was shocked that 0.2 % of all beer sales in our country was non-alcoholic at that point, and that it was like six or seven or eight percent in Germany and Ireland and places where you'd be like, what?

6:21I thought it would be less. Then I just went a step deeper and said, okay, why? And it was like, well, they have Kraft non-alcoholic beer. We don't. And holding the bottle is not necessarily a placebo for the feeling of drinking a beer. It's does the beer taste the same? So that was kind of the real insight. And I did see at that point there was very little data, but there was a little bit of data that did show that non-alcoholic beer drinkers, the majority of them, more than 50 percent at that time, drank alcohol. And that is one of the major insights that lights Athletic on Fire. It's Sunday night.

7:05You're 48 years old. You got a 12-year-old. You got a 14-year-old. You got another 12-year-old. You got to get up at 6 in the morning. It's halftime. Are you going to drink four more beers and get home, or are you just going to have a simulation beer that tastes just as good? That's really where it is. I did not predict that we'd have younger people going after it, but I thought that there was enough to make it happen. And I also thought that no matter how hard Budweiser or Corona tried, it would always have that, well, it's just they're not naturally non-alcoholic. And so if I could get into a brand and Bill's done a great job and John and, you know, they've really been tremendous at leading this product.

7:46True story. Last night I had two beers, a Guinness and a Guinness Zero. There you go. Yeah. There you go. I was like, I can't do another Guinness regular. And even though, I mean, it's a very easy beer to drink, but I was like, oh, I got to meet Darren tomorrow. I can't even be a little bit off. I got to be on my game for this. There you go. You always are, Ray. I appreciate you saying that. Before we hopped on the mics, you said something interesting. I asked if you were the first investor. I thought you were the first investor in Athletic, but you weren't. No. So what happened, Bill offered me.

8:14Bill, the founder, co-founder and CEO. Yeah, yeah, yeah. He said, do you want to invest before we have a single sale? And I was like, ah. I'm like, I don't know. oh, I'd like to really try it. And it was against all my being. Like, again, I like you have proof of concept, really. And so I waited. And that wait is going to cost me a lot of money one day. Not a lot, but yes. I would say you're still a lucky man, Darren. There's been things over time, as there always are, that where things go. Lebrania Shiloh from Fisher Island Lemonade. I followed her around like you would not believe. I was in Connecticut.

8:54I was like, ah, she's the first person to charge$4 for a canned cocktail,$4 for$16. It's crazy. But wow, how could you get whiskey and vodka together in a can and actually make it taste good? So never got to her. I don't think she took any investors. But there's always a, when something hits big and you know you have an email, you'll back and you're like, ugh. Well, Bronnie did really well for herself. Fisher's Island Lemonade sold to Spirit of Gallo, which is the spirit arm of Gallo wine. and one of the nicest people out there. So nice, so nice. And she was way ahead of the trend. Yeah. You're right in the middle of the trend right now with canned cocktails as the founder and...

9:32Founder. Well, founder. You were the CEO. I was, but now I'm not. Yeah, of Kickstand Cocktails, which is just a tremendous brand that really fits the trend, but is differentiated in a way that I think very few other brands in the space are. Talk about the origins of Kickstand and where you are today. So didn't have any dream of doing a canned cocktail, but right out of COVID, it was, I think, December 2021. I was at Beauty and Essex. Great restaurant, good bar. In New York City. Yep. Jalapeno cucumber cocktail. The first one was good. The second one didn't taste spicy. Had two jalapeno slivers in it.

10:10Went to the bartender. It was the same bartender. And I said, not spicy. He goes, I can't control it. And for a second, I was like, okay, this is a little bit of a catastrophe. You're like, it's like a pretty good place and bar. And he said, I don't know, one out of every seven or eight jalapenos are just not going to flavor the drink with spice. They're naturally occurring. And to me, I just thought, wouldn't it be great to build something where as spice is going to take over the country that you could perfectly titrate the spice? I felt like I had a mission to do this. Now, I knew right away that there were not that many people who want to drink spicy things.

10:54And so when I sat down and dialed everything in, in our first production was actually July 2022, I wanted spice to be a device. I did not want it to be the main act. I wanted you to taste it. I wanted it to go away. More than 70 % of new CPG products fail, often over margins founders never fully understood. Outsourced accounting can close that gap for good. Visit belaysolutions.com slash BevNet for a free small business accounting guide from Belay. This is a very crowded and competitive space that you're in right now, and it almost seems like a little bit of a gold rush. I'm not saying that's why you got into the space.

11:38You got into the space for sort of light bulb moment and the opportunity that came with that moment. But it's a cutthroat business with some players that have already been in the space. Think about it, cut water for a very long time. And you've got to prove yourself, not just to that consumer, but you've got to prove yourself to the retailers, to distributors. Alcohol is a very difficult business. But what's been the biggest learning for you just in general as an entrepreneur, as a beverage entrepreneur for the first time? You've been a beverage investor for some time. But as an entrepreneur in this space, what have you had to catch up on quickly?

12:12And it's strange to even ask you that question because you've been involved in food and beverage for so long.

12:18Darren Rovell:It's not a meritocracy. I believe, and I'm a founder, so I believe that my drink is the best. I think our peach chipotle is the most complex cocktail in a can. You have to work so hard in this industry. The hardest part is that you're not going to win because of taste. You're not going to win because of branding. You have to do smart things. We've been pretty smart. There are different rules for different states as to what you can do. In one state, you can hand a can to people at the end of the liquor store once they go through the line. There's certain rules on sweepstakes and what you can do.

13:01Darren Rovell:And then I think you just have to find the perfect situation. So I'll tell you one insight for me. The best thing we did is we went into states that were in supermarkets. So Ohio, I think 10th in the country in population, maybe third or fourth in canned cocktails. Kroger, Florida, blows it out. And the reason is, although they're shopping for the same thing, liquor, liquor, right? In a liquor store, people make a beeline to what they want. In fact, they don't want you to bother them. This is anecdotal. But I would say if I'm standing in the front of a liquor store for a tasting, I can stop maybe 25 % of people.

13:39Darren Rovell:If I'm in a supermarket, especially like a happy supermarket like Stu Leonard's, I could get 80 % of people to stop. And by the way, the try-to-buy ratio is double in a supermarket. It's the science of shopping. It's the fascinating, if anyone's read Paco Underhill, this is what it is. So our goal was to be in supermarket states as much as we could and to only go into 10 states. We're in nine now. We might go into 11, but we're just going deeper and deeper and deeper. We are not going around the country. When you say that it's not a meritocracy, when you say that it's not about the taste or you're not going to win on taste, you're not going to win on branding, is that specific to alcohol or are you just talking about CBG in general?

14:24I think it's inventions and product in general.

14:27Darren Rovell:but I think there are catches within alcohol that make it harder. It's the three-tier system. It's the distributor has to come through for you. There's so much less that you could do personally to affect it, and that's why it makes it harder to do. I can't deliver my product or go to anywhere I want. I can't just go to some sort of supermarket or fair and just plop my thing down on there. There's all these rules and it makes it harder. But can't you point to progress elsewhere? Let's say you are doing really well in Florida and you say, hey, Ohio grocery store chain, this is how well we're doing in Florida.

15:08You should carry our product.

15:09Darren Rovell:For sure. Again, I can win on taste as long as I get a fair shot. So I think my name helps a little bit, but you never know who's running various parts. There's supermarkets, there's supermarkets that won't taste your product. They'll say, oh, we don't do that. We just look at Nielsen. We don't taste the product. I'll lose there, right? I'm doing well. They look at December, I'm one of the fastest growing canned cocktails in Florida. But again, those are the challenges, you know, and yes, you do have to say, look at us elsewhere. But in order for me to win and win fast, I need you to try me. If I can get you to try me, we're off to the races.

15:50Darren Rovell:And that's worked a lot. We have a lean and mean staff and it's slow to get there. The idea of only being in a couple states, I think, is one that, you know, we haven't wasted time in states that we're going to go too slow for us. I get the sense that this is really fun for you. I also get the sense that this is really frustrating for you. Not frustrating. It's the greatest challenge of my business life. It is very fun. I am a pig inch when I am sampling. I love it. I'm so proud that we really did this. I'm so proud of my entire team. It's like a family because my CEO, Elisa Baker, her husband, Richie, is in sales with us, former NYPD.

16:34Tyler Rhodes is our head of sales. His wife, Stephanie, is going around doing the samplings, doing everything else. So it really is kind of like a family affair. It's been very fun, and I'm confident we're going to win. I've tasted your cocktails. They're great. Thank you. I've tasted them in 2022. I've tasted them in 2026. They are great. I mean, there have been small changes in the taste, for sure. Your branding, though, has been different, pretty significantly different since you launched. And when I look at the original can, it looks really sophisticated. It looks like it's for an elevated type of consumer and experience.

17:10your current can is also a sophisticated premium look or has one. It almost feels, however, like you've made it easier for a more mainstream consumer to approach the product and the brand.

17:23Darren Rovell:Was that the case? I think over time, the truth is that I have always done well with niches. And in the beginning, I came out like, we're going to be completely different. And I think the answer is not completely different because then when you get in, they say, we need you to match the price of high noon. And it's like, okay, they're doing like 800 gazillion times more than us. How am I going to match the price? And then you say, okay, well, we'll have the price be$5 more, but we'll do some sort of$5 rebate or a BOGO or something like that. So I think we wanted to make people comfortable. We didn't want it to be that different.

18:00Darren Rovell:So we added on the top, we wanted to have some sort of rim so that they could see what color it was so they could pull it out of ice. People expect certain things, right? They expect it in an eight pack of variety. That's how people are buying it. Make sure it's 110 calories. It's no added sugar. It's gluten-free. And yet you have to tell those stories. Originally, we had the spice level on it. And it just seemed that that was one thing that was intimidating to people. Yeah. Even some of the words that you used on the original can, torched, peach, chipotle, roasted jalapeno, cucumber. And I love those adjectives were free.

18:42Darren Rovell:Adjectives are free. Me and my staff, we talked about it and we said, it's two lines now. People see two lines and doing three might be, you know, hey, listen, it's even going down to the labeling system at Total Wine, right? Like, oh, they only have, they only have two lines, right? So what are you going to do and where are you going to? And so that was also another thing that we did. And I love the can now. And I look at the first can and I think with each run that we did, we changed something a little bit from our insights. And that's really good business. It's not what you start with. It's how you evolve.

19:17Darren Rovell:And I think right now we're in an outstanding position. I think the biggest evolution, and correct me if I'm wrong, is the term soda. Kraft vodka soda is how you describe the products today. I don't recall seeing that in the past. That was not. That was not on the original. Again, you do not want there to be any impediment when someone goes up there without you, when you're not sampling, when you can't affect them, and they say, what is this? You have to say what the leaders say, with the exception of long drink, who they don't want to tell you that they're a gin. Right. Yeah. They just want you to know that it's in Nordic history.

19:56Although when you taste it, you'll taste the gin. Of course, of course. Yes. Do you feel like the evolution of Kickstand has come with you having to compromise it all? You've already talked about having to make these changes to fit the consumer, to fit the retailer. But do you ever feel like you're compromising on the brand or vision itself? I expected you would say that. Not at all. I think founders sometimes feel like they do have to compromise because it's not going to work otherwise.

20:19Darren Rovell:That's just not how I think about it. I think because I've been a part of so many founders journeys, I think there's a negativity with compromise. There are learnings and we still are the only canned cocktail whose chief differentiator is spice. You can't find anything close to us. Yes. If you want to go to on the rocks at 20%, you know, you can do that. That's a totally different product, but we're in our own lane and we're still in our own lane. And that has been my dream. But yes, we have conformed to things because we think that if there's a way for people to get it faster, again, like the supermarket adage, you got five seconds that it has to look like other products.

21:05Has the target consumer remained the same? Have you seen a change in who's buying your products as you launched?

21:11Darren Rovell:So I think it's probably 60-40 women to men. We had a conversation at one point, it's a black can. Woman wouldn't mind the black can. A man would not like a pink can. So black is kind of right for us. It's elevated. It is the premium product. People see it as a premium product. It's not use this to get as drunk as you can. Surely you can because you can't taste the vodka. But I don't think that's our consumers. Young consumers really like us. I think the people who are slam dunks and all the tastings that I do, you know, the 30 to 45s, they are the people in the restaurants who are throwing the jalapeno in.

21:55Darren Rovell:And it has been fantastic for us because we're so far ahead of this trend. You know, a little heat, a little sweet, the chip aisle. It is amazing how much spicier we are as a nation than we were when we started. Yeah. Spice and candy. I mean, you think about a rotten candy and that is their... The chamoy, the tajin and all those snack packs. People become very comfortable with spice. And we see that. There are people who come up to us and say, is it spicy? And I say, no. And someone would say, I hate spice. And I go, okay. And they walk away with an eight pack. Because again, it's spice as a device.

22:32Darren Rovell:When you have our peach chipotle, you sip it, you get a dry peach, not a sugary peach. It hits you on the tongue first. And then like 10 seconds later, I don't know how it really happens. I wish I could say that I figured this out. It's almost like a time release. As soon as it goes down about five seconds later, you feel it a little bit on the back of the throat. And it's like a comfortable kind of burn. It's not a bourbon burn. It's a comfortable burn. And then it goes away. I had a conversation with a restaurant chain and they said, you know, it's a crisis because people can't drink these drinks and eat at the same time because of the sugary mouthfeel.

23:13Darren Rovell:They have to commit to one or the other. And it's a crisis for them because the food eating is slowing down. The couple of things that I really said I needed was I needed just enough carbonation that, you know, it's carbonated. That's it. I can't have a burp. You can't open it and burp. So that was one. And then the second was I want, as soon as it goes down, you can get a burn or a tingle, but then five seconds later, you're back to zero, a neutral mouthfeel. And we accomplished that. But when people say, this is actually good, I'm like, why are you saying actually? Like, why do you say actually?