R&D Radio: Monte Ammons from Liquid Sherpas

0:09When you're building a recipe or you're building a product, it has to be built where it can be replicated at scale. It doesn't do you any good if you have a recipe that one chef can make one time. It has to be able to translate across an entire restaurant chain and be done time and time and time again. And if you can't replicate that product at scale, it's going to fail. Hey, everyone. This is Adam Yee, food scientist and podcast host of Startup CBG's R &D Radio, where you interview food scientists and product developers and what they do and how they can help you build your CBG business. Today I'm interviewing Monty Ammons, founder of Liquid Sherpas.

0:54Monty's mission is empowering beverage innovators and leaders to achieve their vision and goals. With more than 30 years in the beverage industry, Monty has built a mix of skills and experience that help beverage companies thrive and scale. He owns, partners in, and supports a number of ventures focused on helping founders of food and beverage brands succeed. He specializes in sales, marketing, product development, commercialization, and operations. covering everything from concept to category dominance. He also mentors and advises startups and entrepreneurs through various programs sharing what he learned to help them grow faster and smarter.

1:31I found three key pieces of advice from Monty that I really resonated with in this episode. One, start with a product brief, not a formulation. Two, do the business homework before spending money on a product. And three, you can use AI as a research assistant, but perhaps not as a formulator. We'll dive into all that this episode. Enjoy this episode with Monty. I know you'll learn a lot.

1:56Hey everyone, this is Adam Yee. I'm the host of Startup CPG's R &D Radio, and today I'm here with Monty Ammons from Liquid Sherpas. Monty, we got introduced through a mutual friend, and how do you know Emily? Yes, so when she was running the SKU Incubator program, and they came to Atlanta, where I live, They were building that out and I got involved in the SKU incubator and just fell in love with Emily. She's a great person, very personable, very passionate about helping founders in the CPG space. And I'm the same way. So we just hit it off and we've been friends ever since. And fast forward a couple of years and we've actually got a number of different ventures that we're working on together.

2:42Awesome. Well, let's get a little bit more into you, Monty. So from the audience, who are you and how did you just start in product development? Very non-traditional. I'm a bit of a mutt. I started in marketing about 35 years ago, heavy in food service and CPG, way before I had all of this turned to white and all of this got a lot lighter. and I moved from marketing to consulting to ultimately natural ingredient sales, which is kind of a weird trajectory. But along the way, at each stop, I learned something about product development and fell deeper and deeper in love with it. When I started in food service, one of the things that I learned is that when you're building a recipe or you're building a product, it has to be built where it can be replicated at scale, right?

3:33It doesn't do you any good if you have a recipe that one chef can make one time. It has to be able to translate across an entire restaurant chain and be done time and time and time again. And if you can't replicate that product at scale, it's going to fail. So that was an important aha for me of just how important having more of the blocking and tackling of that and thinking through the operational aspects of a product was and to do that before you even launch because it's hard to fix it on the fly. And then I went to Coca-Cola and I had the good fortune when I was at Coke of working with Sonic dry bins.

4:13And with Sonic, one of my jobs was to help them take Coke beverages and create new proprietary beverages. So I worked a lot with their cherry limeades. We'd tinker with that. We'd add different syrups, different flavors, different purees. and so there I really learned how to take consumer insights and trends and marry that up and get a concept very quickly turn that concept into a prototype and then rapidly test it so you work all the bugs out before you actually put it in the market. A couple of stops later I became head of marketing at Community Coffee which is a regional coffee company down in Louisiana and we were omnichannel, but there, what I really learned in new product development, because we were working with natural products and natural products are a whole different animal because it's so reliant on this supply chain where you've got availability issues.

5:11Some things are only available certain times, certain places. And then you've got, like we're experiencing now tariffs and you've got transit issues and you've got sensory changes in the product and et cetera, et cetera, et cetera. So I really learned and fell in love with the complexity of working with natural products. And that took me to my next role of ingredient sales with Doller, who's a German-owned global manufacturer of natural ingredients. and in the ingredient sales, particularly natural ingredient sales world, what you're doing is you're working with a client and you're helping that brand owner come up with the concept and get it through commercialization and into the market as fast as possible.

5:59Because between that time when you start helping them come up with a concept and the product is in the market, all you're doing is giving away R &D time. You're not making any money. So the name of the game in ingredient sales is get as quickly as you can from concept to hopefully a product that's scaling, growing, and lives in the market a very long time. So I learned a lot of tricks of the trade of best practices, how you work with a formulator and a brand owner and do the translation and think simultaneously, think about the whole commercialization of the supply chain and what's going to happen along the way.

6:38So I don't think I've mentioned, I can't remember if I mentioned or not, but I'm not a food scientist and not classically trained in product development. So this has been my journey of kind of learning by hard knocks in real world and piecing this together. And at 30 something years later, this really weird career arc probably looks like a bowl of spaghetti kind of twisting back and forth on itself has led me to a place where now it's all about process and helping my clients get from that concept to commercialization and taking all those speed bumps out of the way. I guess 10 minutes or less, that's my weird circuitous road to product development.

7:21Yeah, I think that's important. Process is a big part of it, especially experience is part of the process as well. Food scientists, though we have a degree and it teaches us some real basic fundamentals, at least from what I've learned, you just can't survive off a degree alone, like making products, you need to have the experience. You seem to have a lot of experience. And what I really like about you, Monty, is that it seems like you learn a lot in your job. Like you go above and beyond, it sounds like, to learn more about kind of the category you're in. I think a lot of people who go into this industry don't really understand the chaos that can happen with the natural flavor or ingredient supply chain.

7:56I guess, do you have any pointers or like assurances or tactical tips about how to manage those kind of expectations of changes in flavors or changes in greenness or supply chain issues? Yeah. One thing that I really advocate a huge proponent of, and I see all the time that founders come in, they immediately want to start with the formulation process. And that creates challenges because typically if you go to a formulator and you're trying to articulate kind of what your vision is, it's hard for them to get their head wrapped around it because it's so subjective, right? What do you mean by high intensity or I want a peach, right?

8:37Yeah. There's several peaches. Exactly. And what tends to happen, especially if you haven't done this multitude of times, you'll give direction and then have to go back and redo because you don't know the implications of that, right? So what I advocate is doing what we call a technical product brief or a project brief. People call it different things, but what it basically is, is your blueprint for development, where before you even think about starting the development work, you sit down and you go, okay, what is everything that I need to know about this product? What does it need to do? What What does it need to look like?

9:16And that helps you as you're saying, well, it has to have a coconut water from Indonesia. Okay, well, we may only be able to get that during this period of the year, and it's going to be very high in chloride. So if you try and put it in an aluminum bottle, you might have problems. So if you do that and you're working with somebody who's lived in the space, you eliminate a lot of those problems that you kind of catch on the back end. So if your listeners don't take anything else away from this, that would be my strongest recommendation is get with somebody who knows the space, spend some time putting together a product brief.

9:55And great thing about AI is you can make money, right? And it will help prompt you on thinking through some of those things that become an issue whenever you get into it. Because if I go to a developer and I say that I want you to develop a beverage that has a organic fair trade turmeric, then they're going to do that because that's the direction, right? And they probably won't come back and question you and say, you realize that your expense on this is going to be astronomical and you're going to have to buy more than you're going to use in five years. So it's going to go bad. So if you do that due diligence on the front end, it prevents you from kind of, okay, I've got a formulation I fell in love with.

10:44Oh, holy crap. I can't get this product or I can't get this ingredient. or it's got sedimentation issues, right? It won't stay in suspension or it's got an off taste that we can't cover without bringing in a masking agent that I didn't want to have, right? So it's really important to think through all of that on the front end. It saves you so much time and energy and effort and money and frustration. So you're saying you should really solidify a private brief. It sounds like you should talk to experts as you do the private brief, right? Because a lot of people just don't understand, like you get sedimentation in some product or some liquids or your CFA might be weird, I guess.

11:25Is that something you'd recommend too? Is like, because you're not spending like essentially all the marbles on making a product, it's better to start with a product brief? Absolutely. An example, I'll tell you a quick story because I'm going through this right now. I've got a client who's new to the beverage industry and he came in and he's got a good idea. He's got a good concept, but he immediately wanted to go to development. And I said, well, let's step back and let's understand, number one, what does this product need to do, right? What are you trying to accomplish with it? What kind of return do you need on it?

11:58Where is it going to go? What kind of consumer are you looking for? What's in it for you personally? What's your business outcome need to look like for this, right? So start with the end in mind, and that helps take you down a path of, well, I thought I wanted to have a ready-to-drink, but with what I have, it probably makes more sense to go into a powder. So it helps you think about before you kind of make these decisions, you can think about them and be a little more strategic about it because everything's interrelated, right? Once you make a decision, it starts to cascade and have other implications.

12:33So we started there on what was important to him. What are the business metrics that he's looking for? What does this thing need to accomplish? Why did he get into this in the first place? What's personally important? Because that founder's story, and you have to have a passion around it, right? It has to be the intersection point between what you're passionate about and what the market will accept and what you can produce, right? So it's important to kind of spend a little time diving into that. And then what a lot of founders overlook and skip is you need to know what the competitive landscape looks like, right?

13:07Yes, I agree. Because when we did this, the client that I'm discussing, we got into it and we saw there was a lot of competition and there were some challenges on where he initially wanted to go. And based on that and based on looking at the consumer and what the consumer was looking for, we saw a white space that was a little to the right of where he thought it was. He changed his whole proposition by about 35 degrees, right? What does that mean if you were to like, splay it out? So he basically went from one consumer group and one functional benefit. He moved it slightly over so he wasn't going direct against a 300-pound gorilla and a saturated market.

13:55Okay, got it. He found a better niche for his product, is that? Yeah. Got it. Okay. So that changed the ingredients. That changed the flavor profile. That changed the package form. That even changed the channels he was going into. So if we wouldn't have done this work, he would have gotten a product and then he would have had to start thinking about where does this live? And that's too late in the game because now I produce something, the clock is running on this. Now I start to panic because I'm running out of shelf life and it's sitting in a warehouse and it's not moving. That's the last place you want to be, right?

14:30Yeah. So that's why discipline is really important because product development's hard enough. I mean, it's what, 90 something percent failure rate? Even for the multinationals, the failure rate is huge. 100%. Yeah. I love that advice. And actually, with my own consultancy, I actually say no to a lot of people who want to start drinks because we help people really early stage and sometimes just don't understand the complexity of drinks. And I have a lot of friends who have drink businesses and I get a lot of complaints from those friends. Let's just say that. It's so hard. Yeah, my wife calls me the dream killer because I do that all the time.

15:04Oh, good. Okay. So it's natural to do that. So I think this is a good understanding because I am challenged with such an entrepreneur who really wants to make a drink. I usually say the same as you did, like can this be a powder? Can the same functional benefit and fit into your brand enough where it could be a powder and not essentially shipping water, right? Or having a high MOQ or whatever. I'd love to have you maybe have a brief checklist of what does it take to actually make a drink product. A degree of insanity, probably. I mean, yeah, most founders have that. Most CBG founders have that.

15:34You know, the old joke of how do you make a million dollars in the beverage industry? You start with two million, right? Yeah, yeah, yeah. The founders that I've worked with that have been successful start small, right? And a lot of founders, they get an idea, they fall in love with the idea, and they quit their day job. Now, all of a sudden, you're on the clock and everything becomes financial, right? You put yourself under a gun and even the overnight successes are at best. Five years in the making, 10 years in the making. I mean, Celsius and Poppy, what, 10 years, 11 years, right? Yeah. So it's a long slog and you're not going to make money.

16:10And so if you're doing everything right, you might be able to pay yourself a very measly salary in year three, right? Yeah. So it's really build it for the long haul. And I tell my clients all the time, invest as little as you can and do as much trial as you can on a limited budget. So do very, very, very small batch of one skew, right? Go to a farmer's market. Just do the minimum that you can do in cash outlay. Because once you start really spending money, now the pressure starts to ramp up. And where people tend to make brand ending mistakes is when they're under pressure for money, right? Yep.

16:51I've talked to a lot of founders like that recently. Yeah. And a lot of people don't do. And where I send a lot of people that I say, I can't help you because you're not ready. Send them back to do the research, do kind of what we were talking about. What's your point of difference? Why do you want to do this in the first place? What do you need to make out of this? What is your financial, personal, professional goals in getting into this game in the first place? Right? That's true. What are your resources that are available? What's your tolerance for pain and risk? Right? And then take small baby steps and be flexible.

17:25The founders that make it, it's almost like a journey, right? Yeah. Did you hear that? That's opportunity knocking. We've been building something big and today we're ready to share it. Introducing Opportunity Knocks, a new campaign giving startup CPG brands exclusive direct access to submit to leading retailers, distributors, investors, media, and more. Here's how it works. On Fridays, a new submission window opens exclusively for active startup CPG email subscribers. Each campaign features a custom form tailored to that partner. Share your brand story, products, distribution, and traction. Startup CPG delivers your applications directly to the partner's team.

18:09Some campaigns include a live fireside chat so you can meet the partner and ask questions directly. To get every drop, subscribe at startupcpg.com slash OK. That's just the letters O and K. Today's drop is live and it's with Earth Fair. Ready? Go. Go subscribe, go submit. Good luck.

18:56it costs or how hard it is to get someone with low MOQs and how many pallets like they get. I'd love to have like just something that maybe I can use to say like, this is when you're ready to do that. Right. Yeah. I would say before you do any of that, you need to do the discipline of writing a business plan because this is not a business where you make it and they will come. And you need to do your due diligence because there are a lot of people in the industry, a lot well-intentioned, but we'll get bad advice. And there's a lot of people that will say, you can produce a beverage for$25 ,000.

19:32Yes, you can, but all you've done is produce a beverage for$25 ,000. Now it's got to go somewhere, right? Now your big money starts. So you really need to understand the business, do a business plan. Don't just jump into it. Plan a full year before you even think about doing, finding a co-man, finding a developer, because you really need to learn the industry. Because you fall in one pit, you're done, right? Yeah. It's very unforgiving. There's very few do-overs. And you can get in and spend a fair amount of money, and now you're stuck and bad money starts to chase good. And you can find yourself in very bad financial straits.

20:16For sure. So I think that's good. But how do you research? Like, who do you talk to? Who would you suggest talking to to get that information? So it depends on what you're trying to build, right? And the cool thing about CPG, unlike tech and a lot of other industries, is founders in CPG are very open to sharing especially best practices and watchouts. So if, say, I wanted to launch a seltzer, I'd go talk to a local brewery and understand, especially if they're doing a seltzer, what are they doing? How are they doing it? What would they have done different? Ask a lot of questions. Really good founders are very inquisitive.

20:59And you have to ask a lot of questions. You have to learn the business because you're going to have to know everything, right? And you're going to learn a lot, but that's the most important part that people overlook is whatever product you want to bring to market, you have to know about that product, how it's made, why it's made, who are the consumers, what are the watchouts? And I get all the time, there's nothing like this in the market. And I tell people, if you can't find something like it in the market, you better really do your homework because there's a reason for that, right? 100 % agree.

21:34Yeah. And also like, it's also going to be impossible to manufacture too, right? If you can't find it in the market, that's another thing, right? Exactly. Yeah. Because believe me, when I was at Coke, we were spending millions of dollars on every conceivable idea on the planet. Half of them were harebrained and half of them died after about 15 minutes. But just about every opportunity out there is being explored by somebody. And if there's not at least one other competitor in there, really do a hard why. Because I'm not saying that somebody couldn't invent a way to reverse gravity in their basement with some duct tape and super glue, but it's pretty highly unlikely.

22:14So if the big guys haven't figured it out, really do some hard homework on why there's nothing in the space. 100%. Yeah. Yeah, I really like your advice on if you're doing a seltzer, talk to a brewery, right? Because I think some of the bitfalls I've noticed is people just go straight to a food scientist to make my product. It's like, no, you have to really talk to other founders. The product's like a very small part of the actual business, right? So I 100 % agree with that. Yeah, the advice I give is the formulation should be one of the last pieces in your product development work. Love it. We're running out of time here, but I think we kind of hopped around a list of questions, which I like a lot.

22:47I like about working with technical consultants is that they have a lot of insights in trends and ingredients. What's like a trend or ingredient you find is really underrated right now? Probably going to be one. I'm not going to hit all the ingredients per se, because protein is everywhere. Protein, foam, and Starbucks. I mean, it's everywhere, right? Natural ingredients, there's tons of different things going on there. Cultural mashup, there's a lot of things going on. But what I'm most excited about as a trend and opportunity is the use of AI in development, where it is really becoming a game changer.

23:25I find myself using ChatGPT not necessarily to bring me new ideas, but if I'm working, say I want to look into a new ingredient that I've never looked at before, right? Where it used to take me probably two days of research and ferreting out ingredient suppliers and doing all that. Now it's a couple of queries. So it is really a game changer in terms of learning about your product, about building your product smarter, and about building that blueprint before you get started. So that's probably the development trend that I'm most interested in and I'm most excited about is the advent of AI. And what you were asking, where do you go to find out all this?

24:15it's such a great starting point that didn't exist a year ago, right? Yeah. And I really, I use AI for a lot of my work. I think the big part, and I've done a lot of research today, one of the reasons I'm in university right now is to study large language models in food. That's kind of a different story. But I would say one thing that's really important with AI is the questions you ask. And also an inexperienced person, sometimes you don't know what's right or wrong. And sometimes like a formula can be challenged saying like, hey, ChatGPT said I should do this and it could be wrong. Right. So there's some mileage might vary type of things here.

24:51With an expert, you could at least bet out like, oh, this is probably not right here. I didn't ask the right questions to ChatGPT. It's kind of my only disclaimer about using technology. It's a great technology. It saves a lot of work if you know how to use it and ask the right questions. That is a great point, especially if you're new to the industry. It's great for kind of general knowledge. Don't ask it to develop your product for you. Yes. Another piece of advice too is when you're working with the developer, because they're working in this space and they have access to the trends data and they know what the consumer profile is, listen to them, especially when it comes to flavor profiles and ingredients and usage levels.

25:33Defer to them. They can provide you a lot of guidance and set the guardrails around what's important. but give them the flexibility to have the creativity of what they do, because they're, to a degree, kind of artists as well, right? So if you tell them, I want a picture that looks like this, give them the flexibility to pick the paint culmers. A hundred percent. But say you've got to stay within this frame. It can't be a wall mural. It's got to be an eight by ten. Yeah. I mean, the large language models can't taste yet, right? It's a long way before that's going to happen. I know a lot of people who claim they can do it with their LMs, but in general, no, they can't.

26:09So, but excellent advice. Yeah. Product developers are artists. They have a toolkit of a lot of paints and colors and how we develop products is an art form of itself. And I think that's the uniqueness of product development is that, at least for me, it does feel like an art project most of the time. Yeah, it really is because it's subjective, right? Mm-hmm. 100%. The big piece of advice I would give if you're new to the game, even if you've developed a few products but haven't developed many, you're still very early stage and you're getting to the point where you're going to start scaling, get advice from multiple people.