[00:00:03] Ray Latif: Hey, thanks for listening to the BevNET podcast. I'm Ray Latif. I'm here with John Craven and Jon Landis. This is episode 52 of the BevNET podcast, and today is April 7th, 2017, or at least this is published on April 7th, 2017. We're recording this. It's a mystery what day it is right now. Yeah, we're recording this. In the future. Yeah, in the future. This has turned into an episode of Carl Sagan's Cosmos. Well done. Uh, how are you guys feeling? How are you doing? So it's another gray, cold, rainy day in Boston. I don't know, uh, I don't know if we're ever going to get like a few days of sunshine in a row.
[00:00:39] John Craven: Supposedly it's coming. Who knows? Yeah. Someday.
[00:00:42] Ray Latif: Someday indeed. But someday indeed is today for the, uh, for the episode of the podcast, you know, and we have, uh, we have an excellent guest and excellent interview with Adam Melonas, who's the founder and CEO of Chew. technically Chew LLC, if you want to get real technical about it. And John Craven, you can probably more adequately and eloquently explain exactly what they do over at Chew.
[00:01:06] Jon Landis: Oh boy, put me on the spot. Well, I think it's definitely not your typical food and beverage business. I mean, basically, I'd describe it as, you know, part incubator part think tank part kind of bleeding edge like where food meets tech but you know I think what's really interesting about it is that it is a company that and you'll hear Adam talk about this that is really rooted in kind of an almost like culinary approach you know using real ingredients and taste has to come first and things that I personally find really refreshing to hear from someone who is making a serious push in this space. So I don't know if I adequately described it, but- I think it was eloquent. I don't know if that's adequate. There you go. I don't know if it was adequate or comprehensive, but you know, I think it's definitely a company to watch and one that if you like what Adam has to say, I would encourage you, uh, you know, checking out more about what they do.
[00:02:02] John Craven: It speaks a lot to his background too, right? Cause he's a little all over the place, right? He's like a chef and he's an entrepreneur and, and like got some tech in there and stuff, right?
[00:02:10] Ray Latif: Yeah, not to give away the entire interview, but yeah, Adam has a background as a chef. He's originally from Australia, came to the States, created Unreal Candy, and then launched Chew, which is, as John Craven mentioned, a food and beverage incubator based here in Boston, the Boston area. Our interview with him was at their brand spanking new headquarters in the Fenway neighborhood of Boston and very impressive place.
[00:02:34] Jon Landis: The closest thing I'd compare it to is like if you've seen a TV kitchen for like a chopped or top chef or something like that. It's like that, but almost on steroids. I mean, just crazy amount of stuff in there. you know, what was need and, you know, obviously something you can't tell from listening to a podcast, but as we were talking to Adam, we had this view into their, their kitchen and kind of behind him, you know, he didn't see what was going on, but chefs, food scientists, there was, you know, at one point a guy carrying a massive piece of meat. I don't know what the heck they were doing with that, but. I didn't see that. Well, you know. I was getting a little hungry after, but no, it was just really neat to see kind of all the stuff that was going on. I mean, it was almost like watching this sort of innovation, but what was neat about it specifically is that, you know, if you go into a standard, I don't know, a flavor company or a Copacker or whatever, like you see stuff, you kind of know what they're doing and seeing the people in his facility, it's like, you have no clue what the heck they're doing. I mean, you know, like, okay, these guys are working with this type of food, but like, you don't know, like, why or what it's for. There was really nothing that was hush-hush, we got to cover this up. But, you know, really neat, different sort of approach, so.
[00:03:45] Ray Latif: Well, the why and what it's for is talked about quite a bit in this interview. And Adam talks about sort of the partners he's working with and what he's trying to accomplish with Chu. And, you know, it's a pretty ambitious and bold approach that they're taking. And he talks about it quite a bit in detail. So let's get right to it. Here's the interview with Adam. All right, we're here at the offices of Chu here in the Fenway neighborhood of Boston. We're sitting with CEO and founder Adam Melonas. Adam, thanks so much for having us. Thanks for being here. Yeah, pretty amazing place that you have. Incubation lab, headquarters. It's just a beautiful place.
[00:04:22] Adam Melonas: When did you guys move in? So it's a very recent venture. We've only been here now for about five weeks. We moved from our previous location in Cambridge, which we've been at now for about three and a half years. Cool, cool. And I kind of skipped the most important part.
[00:04:34] Ray Latif: What is Chew and how did you get in this business?
[00:04:37] Adam Melonas: So Chew is a food and beverage innovation lab. We specialize in something that's going to sound very big and lofty, but creating better food for a better world. So we create and recreate food and beverage. We innovate under five very strict criteria. delicious, nutritious, sustainable, profitable, and scalable. I started the company about three and a half years ago. A little kind of brief history is my background is I'm a chef. Clearly given the funny accent, I'm an Australian. I've had restaurants in five different countries around the world. I specialize in a type of cuisine called progressive cuisine. So progressive In America, you like to call it, it's very sensational. It's called molecular gastronomy. So I've had these restaurants all over the world. The less than linear path from the kitchen to mass production. But I really saw, I started the project with IKEA back in the day when I was living in Spain. And I really saw, once again, the world through the eyes of an arrogant chef. I believed if I could make it on a benchtop, then some big nameless faceless machine could manufacture it. That was very far from the case. I went through torture for that, but then the day I got bitten by the bug, I still remember there were seven semi-trailers, or in America you call them tractor-trailers, lined up, filled with 52 pallets per truck. And as they started to pull away, I felt this great sense of, first of all, probably relief after that process, but second, responsibility, where if we did the right thing, then we could affect thousands, tens of thousands, or millions of people with the product that we do. If we did the wrong thing, then we could also then frankly harm them and make them sick quite slowly. So I felt the responsibility then to start to make food better, food and beverage better, which then led me here to the US. I started a candy company with a local American businessman. Because candy is better for you, of course, you know? Well, yeah. Yeah, of course. But it's also, frankly, it's also the symbol of bad food. I don't think anybody ever claims that candy is good for you. So it was almost the oxymoron nature of making candy better that enticed me. So I'd started this company with this American gentleman and funny enough, his son. We ended up once again, going through the trials and tribulations of first of all, making candy better, which was a funny process that we can probably get into at a later date. But I think the one thing that stood out to me And this was Unreal Candy for our listeners. Yes, of course, Unreal Candy. The one thing that really stood out for me was when my business partner sent me multiple boxes. I think there was about a thousand pounds in total of candy to Spain. And we started hooking in and we cracked into the Reese's Peanut Butter Cup. And I had to call him up and I said, I think there's something wrong. I said, I think the package had been heat damaged. And he said, why is that? And I said, well, I can bend it and it doesn't break. And I said, chocolate should snap. And he said, oh, no, no, no, that's this and that. And I said, okay, but then when I bit into it, it just all sort of fell apart in my mouth. And he said, oh, no, no, no, that's the melting effect. So at that particular point, I said, you know, I'm on a mission to educate, right? I want to educate the American, no offense, but I want to educate the American people. What is food? You know, on my bandwagon, what is food? So I ended up, I've still got them there. I made some silicon molds out of peanut shells. and created these perfect chocolate peanuts. And inside I filled them with the peanuts and water ganache. And I came here to the US and I showed all these, I think there was about 20 something children. And they said, oh, what is this? And I said, it's a reinvented peanut butter cup. And they said, oh, wow, let us try one. They bit into it. And I was watching their faces and they said, ah. It's good, but it's not a peanut butter cup. And I said, yes, that's right. Isn't that great? And they said, no, we want a peanut butter cup. So to answer your very simple question with a very long answer, the reason why I got into this particular industry was there's a big element of human psychology. There's a, there's an element of sensory science. There's an element of culinary that no one ever, or frankly, very minimal people think in the consumer packaged goods industry that things have been created as if they were a dish in a high class restaurant. I mean, the restaurants that I've had around the world, we used to do 32 course tasting menus, no choice. Once again, people would wait months or years to get a table in there. And that was great, but I'm not in the business anymore of making expensive food for rich people. I'm in the business these days to democratize good food.
[00:08:49] Ray Latif: Democratizing good food sounds like a really good idea. It's also kind of tough to feed millions and millions of people, if not billions. Your process here is pretty unique. Can you talk about, you know, your approach to coming out with and inventing, for lack of a better word, new food?
[00:09:03] Adam Melonas: Yeah. So the less than revolutionary part is we treat food like food, right? And when I say food, I mean beverage as well. And to kind of be facetious and kind of summarize what we do, we make food from food, we flavor food with food, we preserve food with food.
[00:09:16] Ray Latif: So that means you're not using any outside ingredients like that were made in the laboratory? Is that what you mean by that?
[00:09:22] Adam Melonas: So, I mean, many, many ingredients will be made in the lab, but I can tell you categorically that there is not a single artificial ingredient in our house today. Okay. Everything we do, and I hate the notion of natural, but- As your eyes roll, I love it. We'll talk about that a little bit later on. There's definitely backstories there. We define everything as real. We go to the end of the world, literally in some cases, I've been infamously jumping on planes, headed to exotic destinations where ingredients are from, doing spot checks unannounced to make sure that what someone tells us is actually what actually happens. For us, we need to know where it comes from, how it's made, where it's made, and we need to be able to defend exactly when we say real. The whole natural thing, it's very simple. It's overused and abused and everyone's trying to look for semantics. There is no FDA categorization of what that actually means. So I think everyone skirts around semantics and what they can possibly say versus. For us, I can really kind of summarize it in one very short sentence. We only make food that we would feed to our families. And anyone who knows me, I'm maniacal. I believe everything's going to harm everyone. So if I put it into my family's mouth, there's a very good chance that it's suitable for your family's mouth. And when my two kids, I've got a four-year-old and a two-year-old, and when they come here, they walk around to every single benchtop and they take things from the benches and they eat them. And I'm not chasing them around saying, well, no, you know, these aren't for you. These are for somebody else's kids. We make food that we feed to our own families.
[00:10:47] Jon Landis: And you guys have a pretty impressive setup here. We're in a room with the, I guess, kitchen. I don't know if you have a name for this one, too. Kitchen. Kitchen.
[00:10:56] Adam Melonas: Hey, look at that.
[00:10:56] Jon Landis: All food, great food comes from the kitchen. Which is quite impressive, is to what you were just saying. I mean, there's no, I don't see any, you know, drums of flavors or any of this stuff we see in a lot of places we go, but interesting to see kind of how it's all going here.
[00:11:12] Adam Melonas: Yeah, so we do lovingly refer to it as a kitchen. If you look over there right now, you'll see there's a big, bright orange kitchen suite right in the middle, custom made right in the middle of the kitchen, which is completely unnecessary, by the way. And everyone has reminded me about that. This is where we cook for the team. We do breakfast, lunch, and dinner, as well as snacks for all the team members. This is almost exclusively where that's made. And so we do lovingly refer to it as a kitchen. But you will see, as you start to walk around in there, we really sit at the cross section of, Culinary being kitchen, science being the fact that we've got, you know, ultra fast centrifuges, rotary evaporators, pharmaceutical grade freeze dryers, things like that. And then also pilot plant. So we've got cooling tunnels, we've got extruders, we've got all sorts of things in there as well. Because for us, we are unique in the sense that we are an end to end innovation company. We're absolutely emphatic about the fact that we're not extra capacity, we're extra capabilities. So therefore, we create the idea. In the course of the last three and a half years, we've created over 650 products that we're responsible for about 90% of those ideas. We take it from idea all the way through the prototype, iterative phase, we get it all the way into a pilot plant. We're there with our clients in full scale manufacturing startup. And for us, we should be measured by how quickly we go from idea frankly, to manufacturing or shelf versus, you know, the fuzzy stuff of how many ideas we had.
[00:12:34] Jon Landis: And I guess you're talking a lot about clients. Can you talk about who these clients are, at least in terms of types, of course, not asking for names.
[00:12:41] Adam Melonas: Of course. So we work with, once again, historically, up until two weeks ago. Historically. Historically. For us, two weeks is a long history. Historically, we've only worked with companies doing in excess of a billion dollars a year. So our client base is about 2 billion up to about 90 billion per year. About two weeks ago, it was actually the Natural Food Expo. We have a love affair with the Natural Food Expo. And walking the show floor, it really felt like our year. Everyone was coming out of the woodworks trying to talk to us about projects they've got that they want to have. And once again, historically, we weren't able to engage and service that level of client because of the fact our model didn't necessarily scale down, it worked perfectly where we're at. So we did a dramatic rethink. So the types of clients we have today, if you think about some of the top food and beverage firms in the world producing all your favorite snacks and beverages, chances are we're probably working with with many of them. And right now, you know, we're working with everything from startup pre revenue, all the way up to once again, that $90 billion company and everything in between. We like to say, if you put it in your mouth, and once upon a time, we used to say, if you put it in your mouth and you digest it, we're either doing it or want to do it. Right now, we just say, if you put it in your mouth, because there's certain things you don't digest. So therefore, we specialize in real, we specialize in relevant, we specialize in, once again, this notion of idea to execution. And anyone who wants to make these great tasting products, likely they're either our client or we would love them to be.
[00:14:05] Jon Landis: So large corporations is the reason that they want to work with you because they have trouble innovating on their own. I mean, that's kind of the standard belief, right?
[00:14:15] Adam Melonas: Is that what you're seeing? Well, look, it can be measured. It can be measured in a vast amount of different methods. And one of those is, is that sometimes they're just, they're just a little too slow. I still remember when I very first started the company and I was a company of one person. I went into, went in and had a meeting with a CEO of a, call it like a round number, about $20 billion a year company. And I was pitching what we did and understanding we was me. And he said to me, he said, well, Adam, he said, you know, what can you do that our thousand plus R and D scientists can't do? And I said, well, we fail fast. He laughed at me and he said, well, how's that a strength? And I said, let's play this out. I said, if you spot a trend today that you want to participate in, how long does it take you to get that product to market? And he said, well, that goes into our innovation calendar and we will launch that product within three to five years. And that was my turn to laugh. And I said, well, three to five years, doesn't that mean by definition, you're 15 trends behind the market. So what you mean to tell me is that you're in the business of launching irrelevant innovation. And so he said, okay, how long does it take you guys to do it? And I said, well, you know, at the moment, we're at like 12 months or less. I said, but we've got ambitions to bring that down to six months or less. And that was frankly, that was how we landed our first deal and how I was able to then actually build a company. But in situations like that, so big companies can innovate. They innovate extremely well. They've got some of the smartest scientists in the world doing what they do. But the problem is, is that sometimes in big corporations, there are so many levels of protection that we operate, we're like the mercenaries, right? We operate off the radar. We get to avoid all the red tape. We do things for the right reasons. We have stage gating that works, and then we don't have it in other cases. We're able to follow this principle of failing fast. We take big risks, we break things. We're not afraid to make mistakes. Actually, here is an organization where people aren't making mistakes frequently enough, they actually get counseled as to why they're not making those mistakes frequently enough and why they're erring on the side of being overly cautious rather than once again, moving fast and breaking things.
[00:16:15] Ray Latif: Big companies also market really well. In some cases, they know how to sell products. They have huge marketing teams. One of your core beliefs is that you don't market. You don't start with marketing. You think about the ingredients. You think about, you know, making better food. Why is that? And why is marketing always second for you guys?
[00:16:33] Adam Melonas: So, and that's such a relevant question. I was down in New York yesterday and I was honored by being invited by one of the biggest companies in the world to go and speak about innovation. And I talked about this particular notion and frankly, I came up with an analogy or many analogies yesterday to try to win them back on side after I'd offended them. And the analogy that I gave, I was really talking about the need to separate church and state when it comes to innovation and marketing. If you remain so focused on the marketing side of things, you are professing or proclaiming or at least hoping to know or believe to know what you believe the client or the consumer wants. And if that's the case, if say, for example, you know, I gave the analogy of Ferrari, right? Ferrari aren't at the top of their game because their only idea on innovation is let's come out with a new color paint every year. They say, as Ferrari, as a world leader in automobiles, how can we create the next latest and greatest car, not how do we make a car that goes 20% faster, right? Whereas most of these larger companies today in really any given field, they're really focused on, whether it's in IT and tech, they're focused on computing power. How do we make it 20% faster? Not all of those other things that people actually give a damn about. So within innovation, if you're focused, and there's this particular notion that I call successfully failing. If you set out at the outset of a project to remove, let's call it hypothetically, 20% sugar from a range, if you hit that 20%, you see that as successful, but you've been so focused on that 20% that you've missed out on your opportunities along the way, maybe to hit 30 or 40%. And rather than doing just enough what the market or the regulators want, you've now missed that opportunity. Now you've got to start another project where you need to take another 20% out, right? So in the outset of all innovation, If you allow yourself the time-consuming nature of flushing out a marketing concept, then you become so fixated on that being success, right? Like in school, right? School teaches you right from wrong. The world teaches you the only right from wrong is the decisions you have to make at the time and they're not all going to be right. But as long as your batting average is up, That's all you need to worry about. So in the world of innovation, if you start out with an idea where you haven't started anything, you haven't put pen to paper, you haven't put knife to board or whatever it may be, and then if that initial idea and the end product are exactly the same, I would hazard to say you've probably successfully failed because you've been so in love with the idea. And along the way when you're innovating those products, you've put the blinkers on and you've failed to understand. Along the way, once again at the risk of sounding overly romantic, the food or the beverage is going to tell you something along the way. You do something, cause and effect. I do this and this happens. If you're completely shut off to what happens and so focused on where you need to be, the best ideas along the way, you could have completely negated in your search to finalize this one thing. That's why we don't do project work. We do time-stamped engagements, and we call them partnerships, because project work means there's a clear deliverable. I need to deliver a beverage that's flavored like this. And if you discover that beverage flavor is not the best for that particular beverage, your deliverable is your deliverable, which is that beverage with that flavor, and you make it the best it can possibly be. But once again, you miss out on the best stuff that exposes itself to you along the way.
[00:19:55] Jon Landis: So for startup companies, though, they kind of have a dilemma of needing to create a good product and defining the marketing and all that stuff that gets, you know, the people with the money excited. I guess what advice would you have for someone who's starting up, you know, bleeding edge, just figure out how to temper those two. I mean, it seems like there are a lot of people who try to come into this space where they've got the best tasting thing or some new idea, but then the marketing and the business kind of is crap, I guess, for lack of a nicer way to put it. So, you know, I guess it sounds like you're almost preaching, like, you know, build a better mousetrap, but does the food and beverage world actually work that way?
[00:20:37] Adam Melonas: I've got some very strong opinions about a lot of things. And this is probably one of them, which is when you are going out to the investment community, you would want to probably have a great idea, right? And the great idea which you've allowed yourself, you've allowed yourself the time and the ability to be able to flush out that idea. If you go to an investment community, venture capitalists, the famous venture capitalists, you go to them and you've got a half-baked idea. And once again, I'm very outspoken about this particular topic, which is people seem to be confused between the difference between an expert and somebody who consumes. The consumption doesn't make you an expert, whereas if someone puts something in their mouth, they profess to know the best thing to do with it and how to change it, how to modify it, just once again, because they're an expert at chewing or swallowing. Where I would say investors invest is typically behind people who have very strong opinions about a lot of things. So if you're making a product, I would recommend anyone making a product creates the best version of that product to convey what they want to convey. So therefore, we always say the best advertising isn't and great marketing should flow from product, right? We always say mouths before marketing. So if you've got a great product, marketing should be easy, right? Marketing is at the service of a great product to enable that product to have a face and a voice, not the other way around. You don't create the face and the voice and then create the personality and the makeup of it. It's really the other way around. So within all that rambling, hopefully there's an answer to your question. But the reality is people invest in great products. Great marketing will eventually get you sell through, and it'll eventually get you sell in, but it won't get you those repeat purchases. The repeat purchases are where you build those companies.
[00:22:21] Jon Landis: Well, it seems like, I guess, some of that from at least what I personally witness is that things that are maybe a more long-term idea that might prove to be great products. I think of, I don't know, things like kombucha in our space that for years were kind of on the periphery of just being, you know, like crazy ideas. And, you know, those companies had a hard time like raising money, even though I would say personally, again, as someone who drinks that stuff, their products were great. And the companies that successfully raised money were ones that were, you know, a minor innovation on something that I wouldn't call great. You know, maybe it's a a better diet soda, better, you know, iced tea, great in terms of innovation, that is, but they're very marketable. So, I mean, it seems like what you're advocating would be more like just focus on this killer kombucha thing. And I guess hopefully the money sort of figures itself out. And I'm not being a contrarian. Believe me, I love what you're talking about here. It's something that I think a lot of entrepreneurs seem, again, it's the dilemma of, you know, do they choose this idea that has a maybe easier path to funding today, which might fail sooner, who knows? Or do they pick something that's bigger and more challenging?
[00:23:35] Adam Melonas: I believe it has to be a combination of both. So the kombucha one's a very, very funny one because I don't know many people that tried kombucha for the very first time that said, wow, this is the best thing I've ever tasted. I would say that there's these socially learned flavors and tolerances that we tolerate in the beginning and then we start to love. Beer, for example, is one of them. I don't know a single person in this world who I've ever spoken to about this particular notion that had their first beer and said, wow, that's delicious. I remember when I was like 12 or 13 years old, trying to teach myself to like beer because I used to see everyone liking beer. And I thought, what's wrong with me? And now I love beer. Well, the wow I'm getting drunk part helps you like beer, I guess. And the benefit.
[00:24:16] Ray Latif: I can understand maybe, you know, drinking your first beer was maybe a foster.
[00:24:18] Adam Melonas: So, you know, that's not the favorite beer out there. Now we're getting into Australia bashing. We're going to take a little cheat shot there, right? So something like kombucha was probably hard for people to get their heads around because you very clearly articulated what the market was at the time, right? It was sodas, it was diet sodas. There wasn't really much even sparkling water consumption. There's multiple layers to this, but if you take, if you get people young enough, they'll like really anything, right? My son who's four years old thinks kombucha is his favorite drink in the world. He loves the GTs with the chia seeds. I don't know if he likes it more for a texture or he likes it more for a flavor. He loves that stuff. He drinks it every single day. where, no offense to middle America, but I think if you look at mostly middle America, if you exclude east coast, west coast from this equation, I think you've still got a long, long, long road to go to get something like kombucha into the mainstream. Now, there are those investments that work very well when you're on the bleeding edge, the 7%, 7% of this country makes a product successful. But it's also a much slower build. In my particular business model, and it's not a capitalistic view, I would rather affect 300 plus million in a country versus know that I'm appealing for 500,000 people, and those 500,000 people, if you change their lives, is that enough? Probably. But I want to reach critical mass because I also have many strong opinions in this world. But one of them is I'm not in the business and I don't want to be in the business anymore of making expensive food for rich people. I want to democratize good food and beverages. So therefore, I want to create things in the notion of stealth health, for example, where we can hide good, solid nutrition in something that tastes absolutely amazing and they consume it because they love it. And if they take the time to turn the package around and read the ingredient labels, they can be shocked that it's all natural, it's all kitchen logic, all of those sorts of things. But at the end of the day, even if they don't, I don't really care because they're consuming a product that's vastly better for them than anything else.
[00:26:17] Ray Latif: And let's talk about some of those ideas that you have. I mean, in terms of, you talked about trends and innovation a number of times, sort of specifics that you're seeing in the industry in terms of consumer demand and customer demand. That's always one of those things, who's your customer, who's your consumer kind of thing. But where are you seeing most of that demand coming from in terms of functionality? Where are you seeing that drive?
[00:26:39] Adam Melonas: Over the years, I think what's happened is people were always looking for those big breakthrough trends, right? And I think we've learned over the course of history with, you know, coconut water, with jerky, with all of these things. It's always the first mover that makes money and everyone else, they divide up the scraps, right? So, I think with particularly retailers and particularly the way that retail is going, I think they're not looking for those big ideas that everyone else has. I think what they're looking for and you'll see it You'll see it particularly in Starbucks. Starbucks have that square stand in every one of their stores now, which is discover me, right? You go, and every time I turn around that thing, frankly, there's some overly priced potato chips that have a great story that frankly aren't that great. But there's also some things to be discovered, right, from this country, from other countries. And I think frankly, in this kind of foraging type mentality that people have now, there's a social currency that goes along with, I found this, you should try it. So therefore, I don't know if it's going to be moving forward. I don't know if big retailers even like Target, for example, are looking for the next big trend that everyone else is playing in. I think the way that retail is going that most of it's going online and most big retailers are shutting doors every day. I think they're looking for that thing to drive people into those stores and you can't drive people into the stores with just a different version of the same thing they get elsewhere. I think everyone's looking for change. And I think in the age of fast and free and fluid information on the internet and social media, it's exponential how many new brands, how quickly they come and how quickly they go. So I don't know if I've really answered your question or I've just created a whole new set of others.
[00:28:17] Ray Latif: Well, I guess, you know, I'm just going to throw out some fast moving trends for sure. Probiotics, protein. Things like that, you know, as far as those kinds of, I guess, added functional ingredients, are those kinds of things, the things that you're hitching your wagon to, are you looking beyond that? And if you're looking beyond that, I mean, just if you can give us a sense of what's out there that, you know, we haven't even been exposed to at this point.
[00:28:39] Adam Melonas: So, things that are anchored in good sound science and nutrition, we get on board, right? Things like probiotics. Probiotics has been described by a good friend of mine who's one of the top functional medicine doctors in America, if not the world, as one of the greatest discoveries of our generation and many generations. So, things like that, essential fatty acids, omega fats, all of those, they're based in good sound nutrition. If you take something like that and you apply it in a technique that you don't understand efficacy, that's where you start to get a little hazy. So people are consuming over-consuming probiotics and frankly, most of the bacteria they're consuming is actually dead through the process. So good sound nutrition, good sound health and wellness, I think those things used in the right application are good. We've been approached, I think, by every company doing anything in microbiome globally, we've been approached in the last probably 12 to 18 months. We haven't necessarily found any way that we want to get involved. Now, every time you say microbiome, everyone's like, oh, that sounds amazing. What are you doing in that space? Genetic coding, DNA, all of that, that's great. But the problem is it's also the anti-scalable model, because the problem is, by definition, if we allow ourselves, which I do, I believe that everyone's microbiome is vastly different to the next person. Therefore, you've just brought customization to a whole new level. You've now said it's not one size fits all, right? You need to create food that's vastly different for every single person on this earth. And that's okay, but people are looking to try to think, well, how about we bucket people? How about we create 10 different types of overall formats of these different microbiomes? But once again, if you truly believe in microbiome, once again, which I do, you can't negate the fact that one of those bacteria, for example, or a series of those bacteria, a strain of those bacteria, Cold Brew so meaningful and so meaningfully different that you get taken out of that bucket and it could actually have the opposite effect. So, therefore, once again, we can't get into the microbiome space yet because we haven't seen a way to be able to scale something that is so unique and so, frankly, necessarily customized. So, I don't really know. Arrogantly, we always say that we are creating the next big thing and everyone always says to us, trend is a very funny word and I love when people ask me that question. People always say, you know, where do we look to for our trends? Well, I don't necessarily believe in many of these trend reports. I don't believe in necessarily like futurologists and different institutes that look into the future and say, this is where it's going to be. I am arrogant enough to believe that the scale that we operate at, with the clients that we operate, we are responsible for setting those trends every day. And once again, the old, the story behind the iPod. We can't profess or proclaim to know where the consumer is going based off an old Steve Jobs notion which by connecting the dots of the past and proclaiming or professing to know how those dots go in the future because we don't know yet.
[00:31:40] Ray Latif: We're running out of time here, but I do want to ask about the Boston area in particular. You chose this city to be your headquarters, to be your hub. The city is the hub. You know, what makes Boston kind of the place where you really feel like this is going to be helpful to your company and helpful to the folks that you work with?
[00:31:58] Adam Melonas: cool. So and that's a really interesting question. Because if you had have asked me, what, how many years six, seven years ago, I would have said, I don't know. Everyone kept asking me, you moved from Madrid to Boston? I said, Yeah. And they said, Why? And I said, not quite sure yet. Right now, I can tell you, I love I love the community in Boston. I'll tell you the truth. I've never met so many intelligent people from so many different fields who have so much to say and so much to contribute as what I'm seeing here in Boston.
[00:32:26] Ray Latif: A lot of people want to say a lot of things for sure.
[00:32:29] Adam Melonas: They definitely do, including probably myself. Our original space was in Cambridge. And I got to tell you that the red carpet has been rolled out now that we just crossed this little tiny river. And we come into Boston, the red carpet's rolled out. Every person in the Boston government that we've spoken to so far just keeps repeating the fact. So you're moving from Cambridge to Boston, right? And I said, yeah. And they're so fascinated by us coming here. And they're so proud about the fact that a Cambridge company moved to Boston. Once again, the irony is just across the river. I love Boston for the academia. I'm a mentor at Harvard. I'm a senior fellow of Babson University. I love the access we get. I love the types of people that we get exposed to on literally a daily basis. I love all the guys over at MIT. There's so many smart, passionate, driven people over there. We're surrounded once again by the greatest schools, we're surrounded by some of the greatest people in health and wellness and nutrition. Harvard School of Public Health, Dr. Willett and his team over there have been phenomenal in moving forward and advancing our understanding as a human race on health and wellness and nutrition. And the fact that we have the privilege to be in the same city as so many of these amazing, amazing thinkers. Frankly, I mean, at this point I say, why not?
[00:33:44] Ray Latif: Yeah.
[00:33:45] Adam Melonas: Yeah.
[00:33:45] Ray Latif: Well, it's a great city. I mean, I've been living here for some time. I know John has as well. And you can really feel it. You can feel the innovation vibe, the entrepreneurship, the excitement about being here and being, you know, to your point, being surrounded by a lot of intelligent people who are driven to do better, make better.
[00:34:02] Adam Melonas: Exactly.
[00:34:03] Ray Latif: Yeah. All right. I think we should start working for the city of Boston at some point.
[00:34:06] Adam Melonas: We can record a PSA. We'll have a few of them here tomorrow. So maybe we should bring our CVs at the same time. I'll be sure to wear my bow tie.
[00:34:12] Ray Latif: Adam, this has been fantastic. Thanks so much for taking the time to be with us and good luck with everything and I'm sure we'll be talking again soon. Absolutely. Thanks for having me. Really compelling guy is Adam Melonas. He makes you believe in what he's saying. He has this way of thinking big and making you feel like you can do it. And I'm sure his team feels like it's 100% behind him. John Craven, you and I went to this sort of grand opening celebration that they had for the space a day after we did the interview. And his entire team was around him. And to a man, everyone I talked to seemed so pumped up about what they were doing at the company.
[00:34:52] Jon Landis: Yeah, and he had, you know, definitely some, without naming names, you know, big wigs of the sort of CPG and food and beverage world there, which sort of speaks to just, you know, how people are looking at what they're doing too. But yeah, I mean, super passionate guy, you know, and you can tell he's like, he's like an intense guy who like, you can tell is going to make this thing happen and be successful. So yeah, again, really excited to see what he does.
[00:35:19] Ray Latif: And he crushed a can of Fosters on his head at the event. It was pretty nuts. I've never seen anyone do that. Is this for real? No, he didn't do that.
[00:35:27] Jon Landis: I was going to say, I left on the early side. And a couple of other people that we know closed the place down, but... Not exactly closed, but, you know, we said a little bit later.
[00:35:37] Ray Latif: I'd call it closed. Apologies to Adam for making that lame joke about, you know, an Australian guy. If you are listening to the podcast, once again, thanks so much for having us. You should come kick Ray's ass. I'd like to see you do it, buddy. No, in all seriousness, great stuff. And you know, we haven't done this in a while. I know Jon Landis, you've, uh, you've polled everyone in the office. It seems like everyone at BevNET about what they're drinking these days, but you haven't talked to me and John Craven about it.
[00:36:07] John Craven: You guys are out gallivanting at, uh, you know, incubators and stuff. Gallivanting at incubators.
[00:36:13] Jon Landis: I wish that were a thing. I want to do that. Yeah. Well, I guess maybe first question for you. Jon Landis, is now that you've done a bunch of these kind of what are you drinking things with people around the office and you've got this like, I guess you'd probably have talked about it in the podcast, if I remember correctly, but you've got this like secret little fridge back in your office. You know, I guess what are your sort of takeaways from doing a couple of those?
[00:36:40] John Craven: You know, it's been interesting. There are a number of people here in the office who I'm still really looking forward to working with. For me, it's less about finding out what people are drinking and more about the collaboration that goes on in preparing for it and getting people excited about being on the podcast. It's kind of like created some more camaraderie around the whole thing. And, you know, the podcast here in the office is like, we're just doing it. It's kind of our, our little thing, our little project that we started and a lot of people talk about it, but no one really is getting too involved in it besides the three of us. So it's been a lot of fun to bring in more people into that process and seeing, you know, how people think about these things and plan it and work on it. And then as far as like what people are drinking, I mean, honestly, it mirrors what we're seeing in the industry. People like less sweet things around here. They're liking natural products around here. I wouldn't say like a over the top premium, like. Maybe three or four years ago, the nine, $10 juices, when they would hit the office, they'd be gone in like a snap. But definitely things are, you know, like solid premium, three, $4, like maple water and coconut water and things like that is what people are gravitating towards. Few ingredients, things like that. I do have a stockpile back there.
[00:38:00] Jon Landis: stuff that's going to turn into kombucha.
[00:38:03] John Craven: It's a little crazy. I do need to organize it a little bit. The fridge is too small to fit all of the Bev's that I have.
[00:38:10] Ray Latif: What is going on in there? You need to share.
[00:38:12] John Craven: Listen, people are welcome to come in. You know, Schneider Mike has made it a point to stop by every day and poach a little bit of what I'm hoarding. I don't know, I'm kind of in this closet in the back of the office. If you want to come visit, I got good drinks for you.
[00:38:27] Ray Latif: This is why we need to use podcast notes on a regular basis. So we can take a photo of that and post this alongside the copy that I'm going to write for this podcast.
[00:38:38] John Craven: Can I clean it up first?
[00:38:39] Ray Latif: I don't know, actually. Maybe we should just leave it the way it is and really, in all its glorious detritus, this is what it should be. Anyway, well, do you want to ask us what we're drinking right now?
[00:38:52] John Craven: I feel like you should. Are you guys drinking anything right now? What do you guys got on your plate recently? John, you get first crack at a lot of this stuff that comes in the office. You run the place. What are you seeing that you like?
[00:39:03] Jon Landis: Jeez, you know, I feel like the stuff that we've gotten in the past couple of weeks has been stuff that launched at Expo West, which is not overly surprising stuff. I mean, it's more bone broth, Cold Brew, kombucha. I think what has sort of, honestly, not really much in the way of juice. I think what has kind of surprised me a little bit is that there have been a couple of Cold Brew coffee products lately that really actually are kind of different and memorable. Two that stand out for me right now just in the past week are the Rise Brewing Company, which is a canned and also offered in a keg. Cold Brew, nitro Cold Brew, excuse me, but it really has just like stellar flavor. I think it's probably one of the best ones that I've had to date. It's got like a natural sort of sweetness to it, almost kind of has a consistency that is like milk. I mean, they came in our office and Yeah. Drop some off. I thought it was really, really neat.
[00:40:05] John Craven: It's interesting because if you harken back to our, it must've been almost a year ago now, our Cold Brew coffee episode that we did. Right. Cold Brew on fleek. Cold Brew on fleek. It was, I thought one of the big takeaways was all of them are premium and good. It's not enough to like have an even better product and stand out on flavor.
[00:40:24] Jon Landis: No, and that's true. I think the one takeaway from that is that having superior liquid is something that I still question whether or not it can stand out on a shelf. But I do think the liquid itself is truly something different. The other one that stands out for me that we just got a couple I think maybe two or three days ago in here was the Lucky Jack Chocolate Blackout, which I kind of chocolate the name, but it is a pretty, I don't know, it almost tastes like Yoohoo Meats Cold Brew coffee. Again, I mean, I'm just saying this as a guy who tries a lot of stuff. I think it was something that was memorable and different for me and almost had like a little nostalgia value to it from the chocolate flavor. So.
[00:41:10] John Craven: Do they still have those pull tabs on the top of the cap? they do.
[00:41:13] Jon Landis: And I, I, I really, I don't understand. I've never been a fan of that cap. I feel like you should bite it off with your, your teeth and chuck it, wait for an explosion. But, um, it's just really hard to get off. It is something I think that makes a visual point of differentiation. Otherwise it seems like we've gotten a pile of other just, What was that one, the grown-up ass coffee or something like that? Whatever the heck it is.
[00:41:38] John Craven: For grown-ass adults.
[00:41:40] Ray Latif: Yeah, whatever it is. I saw that on Instagram and I reached out to the owner and asked her to send us some samples. It's a Cold Brew steeped for 24 hours. And I was like, Whoa, okay. This is, I don't think I've seen a Cold Brew steep that long.
[00:41:53] Jon Landis: We've seen every single number of like, you know, it's, it's almost like the day is a five hour energy. And then there was six hour and 12 hours, seven hour, eight hour. I mean, a lot of those brands got sued or just didn't make it anyway, but then there was all day energy, you know, it's like, why not go for a, But this isn't an energy drink. This is they're talking It's reminiscent of that where you have this variable that isn't really meaningful or tangible to the consumer where we're now trying to differentiate based on like a higher number
[00:42:25] John Craven: But I've heard that, you know, you steep coffee, Cold Brew coffee for like 14 to 17 hours or something, and you don't go beyond that for reasons. Like the tannins start to come out and like the flavor starts to change.
[00:42:39] Jon Landis: But that's similar. I mean, I think one of the things, and I don't remember if we talked about this on any of our Expo West stuff or not, because my brain is kind of fried right now, but, or fried thinking about that, excuse me. is that it seemed like with both kombucha and Cold Brew we had lots of companies telling us oh no no you know those guys do it wrong like our way is the right way and I noticed you know just reading the marketing material and websites for a lot of these brands there is always this tone of like here's the way we do it which is the right way and again it's really hard to tell like in the long run what will stand out but I think for me, getting back to those two particular products, like having something that is a memorable flavor or drinking experience is something that right now in this sea of like, here's a new Cold Brew almost every day, it's kind of interesting, at least for a little while.
[00:43:37] John Craven: Speaking on these Cold Brew, we got a new one in. I haven't had a chance to try it, that Coffee So Good with the cashew milk. Have either of you guys tried that one?
[00:43:46] Ray Latif: You know what? I better try that. The folks who run that company specifically sent it out so that I could try it.
[00:43:53] John Craven: Yeah, they're super nice.
[00:43:54] Ray Latif: And they're very, very nice people.
[00:43:55] John Craven: I tried it at Expo, but I haven't had it since. And I don't really want to go off of my recollection of a little sample at Expo.
[00:44:03] Ray Latif: Yeah. I mean, they had it last year, too, at last year's Expo. I remember trying it and being kind of impressed with the flavor for sure. I mean, it's a blend of cashew milk or almond milk.
[00:44:13] John Craven: and coffee. I've never seen cashew milk and Cold Brew like packaged in a ready to drink thing. Is that enough of a differentiation to stand out in this market?
[00:44:21] Jon Landis: I don't know. I mean, I think the nut milk Cold Brew, uh, I was thinking of this recently about the jittery John's product since the Brazil nuts. Yeah. And they have the one with the, the Cho chocolate. Yeah. It's pretty good. It's interesting. I'm not someone who personally really likes a, like an iced coffee with a lot of milk in it. Maybe I'm not the right consumer for it anyway, but I think it's interesting products like that. I take a sample of at a trade show and I think it's, you know, awesome. And when I have a whole bottle in front of me, I think it's still awesome, but I also don't feel like I want to drink the whole package of it. There's a much, more kind of rich, indulgent experience than just drinking a random Cold Brew. So I don't know. I mean, I think that's a space where I'm not really sure what like the biggest brand is. I mean, it's probably like California Farms, right? But that's a product that's largely being marketed as dairy. So.
[00:45:20] Ray Latif: Yeah. It's funny. We're on this, we're talking about this Cold Brew and talking about how differentiation was kind of tough and I think we've just listed a few examples of, you know, where people are still trying to really stand out and make a name for themselves. And literally just a couple more just popped into my head that we've seen or either tasted or seen in the last few weeks. One is Immortal, which is a participant in New Everett Showdown 12 in Santa Monica last year. They sent us some product and it's their Nitro Super Coffee. Energy Elixir, and it's packed with coconut milk and coconut oil and coffee and chia seeds.
[00:45:54] Jon Landis: All sorts of trendy stuff. All kinds of stuff. Some maca in there, I think.
[00:45:58] Ray Latif: Yeah, and also beach coffee. Beach coffee, which is coffee that is brewed in coconut water, which we saw at the show and was some pretty interesting stuff as well. You know, I guess there is, you know, there's more room to innovate. It's just a matter of how well can you market it? And is this really where the consumer is going in terms of what they want?
[00:46:17] Jon Landis: Well, I mean, that's, that's a category that's clearly just at a point where there are so many different things that are being put into the marketplace. And I think we're just trying to see what sticks. Yeah. But it seems like there's a pretty massive gap between black ready to drink or concentrate Cold Brew and maybe even the nitro products. And then all this other stuff that requires a pretty lengthy understanding and explanation to really grasp what it is. And I think that's a challenge for if you look at something like Immortal, which has like loads of good stuff in it and it looks awesome and I think it tastes pretty awesome, but like it's expensive and it's a really, different products. So I think that's something that it's really hard to guess how all of that stuff shakes out. I mean, usually I think it kind of shakes out in a way where people cherry pick these different ideas and new products come and sort of innovate on the innovations that other people have done. And eventually we end up in some sort of happy place, I think. Cool Press Juice kind of went through that. So, I don't know. I hope the entrepreneurs behind these products are ready for that.
[00:47:31] Ray Latif: It's a question of formulation versus familiarity and flavor, right? I mean... A lot of the ones we just talked about, they're really trying to innovate with formulation, whereas some of the ones that have been sort of successful and able to scale are doing it with different flavors at this point. And it remains to be seen what the consumer is going to gravitate toward. I mean, as far as I can tell, it's still Starbucks' game. And however they move, the category moves. But Dunkin' Donuts is one of those. They came up with their really thick, heavy milk Obviously not a Cold Brew product, but it's only a matter of time before they launch their own RTV Cold Brew.
[00:48:09] Jon Landis: Well, I think it's interesting. And actually, when we were over at Chu talking with Adam for the podcast, one of the topics that we spoke about just kind of afterwards was quickly about just kind of innovation with products that are not really better for you, but have been massively successful by marketing themselves that way. And what I said to him is that in this world of beverages, there's really a market for, and a massive, almost immediate market sometimes, for things that are slightly better than whatever you're consuming. And I think that's a sort of common thing that trickles down into like basically any category in its own way. And in the case of something like coffee, it's like, do you want to go into the market with something that seems familiar and understandable to the consumer, again, black coffee or something that's like a Frappuccino knockoff, or do you want to be super innovative, which has just a different path? And I think that's sort of the classic dilemma that All of these companies have is just which side do you want to be on, you know, pros and cons to both. The thing that's more immediately marketable also has, you know, probably bigger, more established competitors that are after you. Right. And then on the other side of it, like the road to. decent sales volume is probably really steep. So I think that's something that a lot of these companies struggle with. And again, getting back to the Cold Brew coffee tangent that we're on here, I think it's a category that right now is seeing it from all sides.
[00:49:46] Ray Latif: So yeah.
[00:49:47] John Craven: I have another Cold Brew product here that I grabbed out of my stack. My private stash in the back is this Forto Coffee Cold Brew 2X Energy Shot with organic milk, vanilla flavored. It's fair trade, USDA organic. What is this, two ounce shot? And this is going crazy in convenience. I've been seeing it in a lot of different places and actually talking to them recently One thing that really surprised me was they have to position this as this won't take away from your drip coffee sales in the convenience store because apparently, you know, you get a cup of coffee in a styrofoam cup and you pay like 75 cents for that. Well, you know, there's huge margins on it for the convenience stores and they're proving that they have a far different consumer and usage occasion and it's not. cannibalizing those drip coffee sales, which is a big barrier of entry in that channel. But this I think is a really nice looking product. It's in a, um, it's like a miniature coffee cup, miniature coffee cup that, you know, like a Starbucks coffee cup with the lid that you'd be carrying around, but it fits in your hand. It looks like Andre the giant holding a beer can. And, uh, you know, I think that this is really, really smart. It's on trend. It's, you know, they're attacking it from a different way that, all these other brands are, they're going into a far different channel and they got a really strong strategy behind them. And I'm a big fan of what I see with Forto coffee.
[00:51:15] Ray Latif: Yeah. It's good stuff. I mean, it definitely, they improved the taste profile dramatically and it really made a huge difference. They added the milk. Yeah. Yeah. It's very good. All right. Considering that. We are on this Cold Brew tangent. I'm going to mention one more brand, which is Palm and Bean, which I saw at Expo West, which I really liked what they were doing too. They mailed Cold Brew coffee and coconut milk, and they have some good stuff there. It's packaged in Tetra packs with that Dream Cap on top.
[00:51:40] John Craven: How different is it than Cocoa Cafe?
[00:51:42] Ray Latif: Well, Cocoa Cafe is made differently. The formulation is different.
[00:51:45] John Craven: I know, but I'm just, you know, from a, you know, it's in a similar package. It's a similar type of an offering, you know, like, are they going to be able to succeed beyond what Cocoa Cafe did?
[00:51:55] Ray Latif: I mean, I think Cocoa Cafe's Vita Cocoa Cafe is what it is now. I mean, I think it's no secret that their sales have been really falling off over the last couple of years. And I think the big, issue is whether or not consumers are willing to drink the sugar and calories that are associated with that product. And in palm and bean, I can't recall off the top of my head what the sugar and calorie content is, but it does taste really, really good. Anywho, I think that was a really, you know, this was a good revisitation. Is that a word? Revisit? I'm going to use that. Revisitation of Kovu. Yeah, we made it work. You've worded it. Yeah, worded it. So yeah, just to wrap up, you know, next week we've got a really great interview. with Andrew Appel, who's the president and CEO of IRI, which is a global market research firm. And I met up with him in Nashville at IRI's Growth Summit, where they hold an annual convention once a year. It's in different places. This year it was held in Nashville. And I'm backstage with him at the Grand Ole Opry. And we talk about the conference. talk about all things going on with big data and how it's being utilized to further that retail and supplier sales strategies. And it's pretty impressive stuff. The conference itself was really great, inspiring, and had a lot of great information and data about what's going on in the market and what's to come. So there's that.
[00:53:24] Jon Landis: Delightful. Yeah. Looking forward to next week.
[00:53:26] Ray Latif: I haven't listened to that interview yet. Yes. Well, for everyone else, you'll get to listen to it on Friday of next week. That's going to be the 14th. And anything else? You guys want to sign off with anything? I always sign off on these things. Yeah, no, I think you got it. We're just waiting for you to do it.
[00:53:43] John Craven: Send us more drinks, please, people. We like your drinks and we want them. Drinks and snacks.
[00:53:49] Ray Latif: All things food and beverage. Yes, we drink them. We post them on Instagram, Twitter, Facebook, et cetera. Send us to them and we'll taste them and we'll get back to you on what they taste like. For everyone else, please send us any news, comments, ideas, feedback, criticisms to podcasts at BevNET.com. We'll also eat those. Until next time, this is Ray, John, and John signing off. And thanks for listening. Adios.
