[00:00:03] Ray Latif: Hey, thanks for listening to the BetMed Podcast. I'm Ray Latif. I'm here with John Craven and Jeff Klineman. This is episode 55, and the publication date is April 27th, which means that we only have three more days of this rainy weather left, right? Because April showers and May flowers and stuff like that. I hope it works that way.
[00:00:19] John Craven: There's a lot of flowers on the trees. They look really nice.
[00:00:22] Ray Latif: Yeah, I guess they're April flowers too. And we get the office garden going too. The garden. Garden right outside my window.
[00:00:28] Jon Landis: Can you say garden? No.
[00:00:30] Ray Latif: I didn't think you would. I am not from around here.
[00:00:34] Jon Landis: We pronounce our R's where I grew up.
[00:00:35] Ray Latif: But you don't have the Long Island accent.
[00:00:37] Jon Landis: No.
[00:00:38] Ray Latif: Do you say water or water?
[00:00:40] Jon Landis: Water.
[00:00:41] Ray Latif: Coffee.
[00:00:42] Jon Landis: Yeah. Potato.
[00:00:43] Ray Latif: I never realized people said water. Tomato. And I was like, what are you saying? Water. We call it a hero, not a grinder. Anyway, let's. We could go on. Anyway, really cool edition of the podcast. We have three segments on this one. John Craven, you did a pretty cool one with Jeff Klineman that's sort of about some of the issues that we've seen in the news of late. Can you talk about that?
[00:01:04] Jon Landis: Yeah. So we decided to try something slightly different and talk about some current news topics. We kind of started off with talking about Juicero, I guess, since, you know, I'm not sure if that's going to be a dead horse that we're beating here, but with all the kind of coverage that's out there and the story that we published on BevNET this week, just kind of wanted to talk about that a little bit. And we hit a couple of other current topics.
[00:01:32] John Craven: So there's plenty of context missing from, you know, what most people know of Juicero right now.
[00:01:38] Ray Latif: Well, anyway, I mean, I think what we're not talking about with the elephant in the room is about how Bloomberg was squeezing bags. Did you serve by hand?
[00:01:48] Jon Landis: And you guys are talking about how, and that's going to affect the company and why we, you know, Jeff gave his perspective, just having, you know, obviously looked through all of the news and thinking about this in sort of a bigger picture sense. And, you know, I'm someone who, as I mentioned, in it, you know, I have a Juicero. So, you know, I probably wouldn't be the right person to, I don't know, I'd be saying, save Juicero or something like that. But no, I... Bye. Bye. There you go. No, I'm saying bye to your objectivity. It went out the window. Oh, it went out the window, yeah. You know, one of the things we talk about in there, and then we'll just let the segment roll, I guess. But I sort of suggest that Maybe some of this is just good press, you know, any impressions or good impressions at this point. I mean, I personally have found that a lot more people know what it is than they did two weeks ago.
[00:02:39] Ray Latif: For sure.
[00:02:40] Jon Landis: There's that, you know, but there are two other topics that Jeff and I talk about on there as well, which I guess we'll just leave to the segment so we don't talk about the whole thing.
[00:02:50] Ray Latif: I think people can probably figure out what they're all about. There you go. Yeah. All right, let's get to it.
[00:02:55] Jon Landis: All right, so I'm here with Jeff Klineman. He is our editor-in-chief over here at BevNET. Thanks for joining me, Jeff. Happy to be here, John. So over here at BevNET, we have a whole team of people producing news coverage of the food and beverage industry. Yes, we do, John. Those people are called reporters. They're called reporters. Thanks for reminding me there, Jeff. You, on the other hand, are a media baron. Oh, great. That's what I aspire to be. Anyway, we figured it would be a great time to sort of give our listeners a look into what's going on this week in the world of food and beverage. And one of the things that you and I have talked a bunch about this week is Juicero. So let's start there. Yeah, well, the fallout from the Juicero takedown that Bloomberg News broke last week has been pretty significant. As we ended the week last week, Jeff Dunn, who's the CEO, the newly installed CEO of Juicero, had actually posted on Medium that the company was extending a return policy for its juicers. It's been trending on social media, they made fun of it on NPR. It's taken some hits and it's caused me to wonder a little bit about how much of a disaster this is for a product that tries to come in as a disruptor. Sure. I guess one of the things I have really wondered a lot is how much does this actually impact their business or are all of these media impressions actually a really good thing for Juicero? It seems like there's a lot of people thinking about and aware of Juicero who two weeks ago had no clue that it even existed. Yeah, and it's always a question as to whether or not you can recapitalize on that attention. You know, in the story that we ran last week on it, we spoke to a crisis counselor who was talking about Juicero as not having a plan to turn all this exposure into opportunity. Now, I don't know if you can. I don't know if you can nuke Coke this moment if you're Juicero. But I think that if Juicero is going to succeed, this isn't going to be a major obstacle, because what would cause Juicero to succeed is the notion that this is a long-term disruption of people's eating habits. Now, I have my doubts about whether that's the case. Not to paint that with a negative brush, but I think the real issue for Juicero is just how people like to get their juice, And also, whether juicing itself is a major nutritional trend that will carry forward long enough for people to want to fully automate their home juicing process. Sure. No, I think it's a great question. I mean, in full disclosure, as you know, I own a Juicero at home. I think it's something that, you know, I originally got it to try out before Doug Evans, the founder, spoke at our BevNET live conference in December and thought I'd give it about a week before I got sick of it. And, you know, I've been totally hooked and, you know, some of it is just a simple matter of convenience. You know, why you do anything that I guess maybe cuts corners versus doing it the long way. My concern for this company is that there aren't enough of you out there. Well, that's the point. You're a number one. You're a slam-dunk Juicero customer. And the people who would meet Juicero who are between ones and twos, if you think of it that way, who might be juice curious, they're the ones who are going to pick it up in a restaurant. Sure. They're sort of mid-trend adopters who would say, hey, I'm going to get myself a kale pineapple smoothie. Oh, look, it's made by Juicero. Right. And that's been one of their major lines of business. It is. And I mean, for me, it's not honestly a line of business that I totally understand and that, you know, I can go anywhere and someone else can make a juice for me. I don't need a machine to do it. At least that's kind of how I would view it. Well, except that if you're running a restaurant that doesn't specialize in juicing. Sure. Having that option to serve is one that certain places really enjoy. And again, that's where The restaurants, just like Juicero itself, are making a bet that it's something that an increasing group of consumers wants. Now, if we see the French place that has started incorporating Juicero in all its places. La Panne? Yeah, La Panne Quotidien. If we were to see them boot Juicero, I think that would be a pretty good indicator. that this trend isn't catching on in the mainstream, regardless of the machine itself. Well, I guess one of the other questions I'd have for you is, you know, is this something that, you know, in terms of just what Juicero has done to date, which I guess the key point here is, you know, they raised a boatload of money. They made this machine that's expensive. Is this kind of PR backlash something that they would have expected and been prepared for? I mean, clearly, if someone's raised a lot of cash, you don't really have a lot of people rooting for you either, right? You don't. And there's this audaciousness that investors have responded to very positively. with regard to Juicero, but that maybe consumers and non-juicers have been a little bit more skeptical about. Look, they're betting, Google Ventures is betting, that there's a long-term change in people's habits coming. I think that when it comes down to it, though, it's hard to predict which basically kitchen gadgets are going to be the ones that intersect with a trend and create a big enough boom to justify the amount of money that's been poured into this. You look at products like SodaStream, They have had to pivot a bunch of times, and they're much better funded than Juicero was, even. I mean, everyone's trying to be the next K-Cup, basically. Yep. Yep. And that's one that was able to really interrupt people's lives and become something that made their lives easier. I think you and I both read a story this week that explained that it made One of the beauties of the K-cup is it made the habituation very cheap. So you're using one of these K-cups for less than a dollar. Right. Well, and that's also something where a lot of people are making coffee at home as opposed to, say, juice or soda in the case of SodaStream. And they've effectively made it cheaper and easier, which isn't necessarily the case here. So, you know, the most, I think, interesting thing to me was the line from Jeff Dunn which said, what was it, the value of Juicero is much more than a glass of cold-pressed juice, which I think is a sort of vision that we still have to wait and see if it pans out. Yeah, because what he went on to say is it also is the harried father making a juice reliably for his kids for breakfast. Now, you go to Expo East or Expo West, you find people who make smoothies for their kids for breakfast. We don't do it. I don't know a lot of people who do, but again, the bet is that more people will. Now, going back to the original question of, is this too much of a black eye to recover from? We all know that the price of the Juicero will come down. I think if you look at high-end luxury goods that can be groundbreaking, they tend to catch on in some instances. I mean, the cost of the Tesla originally was supposed to be prohibitive, and now it's more valuable than GM. So I just think that Doug Evans is probably hoping and praying that they'll install a Gucero in a Tesla. I don't know. I think he's jumping up and down somewhere with how much media attention it's gotten, but maybe I'm wrong, but I guess again, we'll have to wait and see. So I guess moving on from Juicero, if we may, what other things have been going on this week? Well, I think one of the themes this week is embarrassment and Juicero certainly took it on the nose. And another thing that I wanted to bring up was we saw a lot of operational embarrassments this week that can really sink a company pretty quick. And we ran stories on Stubborn Soda and Caleb's Cola, which are two new sub lines of PepsiCo that were forced to recall because they'd substituted in the wrong kind of sugar, as well as Soylent, which has just been through its own issues with a supplier over whether or not the product caused gastric distress, having to issue another recall. over the use of dairy in its products, something that, you know, they certainly don't want given the dietary issues of most of its target consumers. And we also saw a year-old operations issue from Reeds cost the founder his CEO post. And I think it speaks to the kinds of things that a lot of our readers face, which is, If you can't dial in your operations, your business is going to take a hit. And in some cases it can be a really fatal one. I don't think anyone is as concerned about Juicero causing gastric distress as they are about Soylent. But you just don't want to put a product out there that can make people sick or that will have your sales team selling something that they can't deliver. And that's what happened at Reed's, at least. Well, aside from Pepsi, which is a much larger operation, I mean, these are... sort of scalability issues, right? Sounds like issues that a company has as it's, you know, becoming bigger or producing more where operational controls maybe, I don't know, there are mishaps. Yeah, absolutely. And I think what happens is a lot of entrepreneurs tend to focus really heavily on sales and marketing. Certainly one of the things we've seen with Soylent lately is that they're really directing their marketing online and there's a campaign afoot, which means that resources and organizational attention is being devoted to this campaign. Sometimes you short. what's happening in the factory. Now, this wasn't a major issue, but at the same time, the previous one, which involved an algae-based protein, was marketed as a much bigger step forward for the company, which had wanted a kind of closed-loop resource cycle to decrease its environmental impact. In other words, it wanted to source non-animal protein from algae And then it just threw its supplier under the bus over the issue of whether or not people weren't feeling well when they consumed the product. You got to dial these things in from your supplier to your factory to your distribution. It also seems pretty interesting in the case of Soylent where you have like a really functional product That to me sounds, I don't know, maybe more of a risk for that company as opposed to Pepsi, which I think, what was it, they put in the wrong, like it was beet sugar instead of cane sugar or something like that? Yeah, no, Pepsi pulling that product from the market, which is, it's very small in comparison, may have been the first sort of decent press move that they've made in a while. I mean, it's funny, I'm writing about that this week, actually, that the one company that's even happier about Gucero is Pepsi, because this kind of issue is the one thing that caused people to stop talking about the Jenner commercial. Sure, or United Airlines, I think, was another one that was thrown in there as well. I think Sean Spicer's pretty happy for Gucero right now. getting political on us there, Jeff. Well, you know, it's instead of hold my beer, it'll be hold my juice. Nice, nice. Well, I don't want to take up too much more of your time, but any other stories or themes that are worth talking about? Yeah, John, I think there is one more macro theme that we saw this week, and that is there's a lot of change at the top. of these large food and beverage strategics. Some of it forced, some of it generational, some of it planned, but it indicates that these companies are aware that in order to survive they need to be entrepreneurial. Over the past week we saw Mondely's start planning succession for Irene Rosenfeld, And in the meantime, we saw the North American president depart and their CMO, who is highly touted, take off. Snyder's Lance, their CEO, Carl Lee, decided to retire just sort of out of the blue after a kind of beat earnings call, and they brought in another Another CEO, Brian Driscoll from Diamond Foods, which they just purchased. Change is coming at the top over Coca-Cola as well. And the new CEO there, or the soon-to-be new CEO there, James Quincy, was speaking a lot about partnerships and potential acquisitions. And the general mood is that being a single beverage company isn't going to cut it anymore. And I think that's indicative of the sort of shift in the old order and the way that these these companies are looking toward new brands. Well, I guess how much of that, if any, do you think is just because of all of the sort of innovation and excitement that's kind of at the lower end? You know, are these companies I don't know, maybe having a hard time keeping talent or keeping a team in place? Well, that's an interesting question. I'm not sure if it's that or if shareholders are just upset because they don't see potential for long-term growth except by cutting staff. Cutting staff and acquisitions, basically, right? Yeah, exactly. At the same time that we saw these people leave, you know, we saw the Nazi foods get picked up by ConAgra. We saw Sir Kensington's get picked up by Unilever. There's a super hot market for acquisition out there. People are aware things are changing and it may not be enough just to remarket the Oreo in a different flavor. Well, I mean, that buys you a little time, at least, right? Yeah, certainly. I mean, it's interesting. Even today, I saw a press release for a launch of chocolate Twinkies, which I was kind of surprised that they had never made chocolate Twinkies, apparently. You know, that's innovation apparently. So is that going to be a brand that's around in a year? That brings to mind one other story that I saw recently that I thought was super interesting and that is the one advantage that these large strategics do have is they have a global focus instead of just a national one. I saw on CNN that chocolate consumption in India is up 13% in a single year. And I would wager that the value of that chocolate that's being consumed in India far outweighs the acquisition price of both. Sir Kensington's and Thanasi Foods. Probably some good math there, I think. I don't add or subtract. I just estimate, my friend. There you go. Well, I appreciate you taking time out of your busy schedule, which I guess we'll talk about that for a second. We've got a pile of conferences coming up. We've talked about those in the podcast a little bit. You're the guy who is largely overseeing the content that is on stage, certainly at BevNET Live and at Nosh as well. What sort of insight can you give us there? Well, at Nosh Live, we're going to be looking at a lot of the deals that have taken place, in addition to speaking with a lot of the entrepreneurs. But we do have folks who are coming in from the recent deal space, the Nasi Foods private equity firm, Encore Capital is going to be speaking. We have one deal that hasn't been announced yet, but that will involve a speaker from that private equity firm as well. We're trying to get looks at what these deals mean in the context of the ongoing trends within the food system as well as what they mean for entrepreneurs and how they can take advantage of this particular situation and perhaps grow their companies either for exit or for independent operation. And on the BevNET Live side, we're going to be taking a very in-depth look at online retailing. We've got at least two of the most important online retailers out there in Fresh Direct and Peapod. And we're also going to be announcing very soon that we've added an important speaker from Whole Foods to look at the brick and mortar side of things. Awesome. Sounds like you've got your stuff together over there, Jeff. Well, I'm in what we call the conference death spiral now. There you go. Only 40-something more days, I think, till death or the spiral's over. I don't know. Until the spiral's over, it's a soft landing on stage and we all get to have a lot of fun. There you go. All right, Jeff. Well, thanks for your time. It's been great to catch up on the news here, too. So, look forward to having you on here again. Thanks very much, John.
[00:22:53] Ray Latif: Thanks.
[00:22:53] Jon Landis: We'll talk again soon.
[00:22:56] Ray Latif: All right, great stuff. Any last thoughts on what you guys talked about?
[00:23:00] Jon Landis: I think it's one of those times of the year where there are just generally a lot of things happening. I mean, we talked about changes at big companies, again, the Juicero thing. I don't know. I hope we can do more of those segments, just infusing a little news in there, too.
[00:23:17] Ray Latif: Yeah, for sure. I love when people come to the office because when people come into the office, we get to show the office out and, you know, they get to try beverages that are in our cooler and we get different perspective than just, you know, our little bubble that we live in here. And we don't have to go anywhere. Correct. We just had a couple of folks from Philadelphia come visit us. That would be Michael Zuckerman and Adam Dorfman from Zuckerman Honickman, which is a supplier of beverage containers and some food containers, and they've been doing this for a very, very long time. The company's been around for about 120 years. And they've supplied containers to some of the higher profile brands you've heard of in recent years. Vitamin Water, Buy, Honest, Tee, Fuse, Body Armor. And yeah, they came in and we were like, hey, let's talk. Let's talk about what you do, what you're looking at right now, and what's innovative and what's trending when it comes to packages. And what are your thoughts on what's next for not just your part of the industry, but the industry as a whole? So yeah, that's what we talked about. Chill dudes. Let's do it. Alright, we're here at the world-famous, world headquarters of BevNET in the conference room, and I'm joined by the two shining stars of Zuckerman Honickman. I'm here with Michael Zuckerman, who is the principal of the company. That would make sense, right? Zuckerman Honickman, Michael Zuckerman. There you go. Yes, and then Adam Dorfman, who's the general manager of the company. How are you guys doing? We're doing great. Thank you for having us. Thanks for being here. I think a lot of our listeners are familiar with your company. It's got a very long history, over 100 years. But Michael, I'm going to put you on the spot here. I'm going to ask you to give me a kind of a boilerplate, as it were, on what Zuckerman Honickman is all about.
[00:24:59] Jon Landis: So I'm going to give you the boilerplate. I'm going to consolidate 120 years of business into 120 seconds. Outstanding. As I think you know, the company was founded, turn of the century, two immigrants from Russia off the boat. And as the story goes, they were penniless. and started rinsing out returnable glass bottles at the time. They then resold them to local soft drink companies in Philadelphia, and one of those companies was Pepsi-Cola. And as Pepsi came out of their third bankruptcy, our founders built 12-ounce glass molds and really had one customer for the first 40-plus years of our company's business. And we sold all the independent Pepsi-Cola family franchises. When Pepsi went to global procurement and consolidation, we took sort of that same model that we had, where we were a buyer and reseller of glass and plastic containers to the beverage industry, and applied that to what we considered new age at the time. And that started with Mr. Joe Umbach with the wine cooler industry, which for us was Calvin Coolers that led to Mystic. Again, we've been humbled and lucky enough to participate with a lot of the major growth brands from Vitamin Water to Snapple, Sobe, Honesty. Fuse. Fuse. Take it over, Adam.
[00:26:19] Jeff Klineman: Buy, which was the most recent. Right. Jones Soda. I mean, there's a long list of them. Sure.
[00:26:25] Ray Latif: So we, again, we've been lucky, humbled that we've been able to participate with a lot of the country's largest growth brands. So pretty amazing history, you know, for 120 years and really timely story, I think, you know, for you guys working from the ground up, basically starting this company and really helping a lot of the companies, you know, that are the entrepreneurial companies starting from the ground up themselves. They're in need of a lot of help and a lot of advice when it comes to how to grow and from how to grow, how to scale. And so not only do you guys, you know, sourcing bottles and what bottles they might need. You also do a lot of consulting, but it's not really consulting. We talked a little bit about this before we got on the podcast. You've been doing this a long time and you're able to kind of give people a little bit of perspective on what it's going to take to find the right ingredients or to help them find the right distributor and so on and so forth.
[00:27:25] Jeff Klineman: Can you take us kind of through that process? At the end of the day, and a funny term that we like to refer to ourselves as unpaid consultants, because at the end of the day, we are a packaging supplier. Our main thing here is to help beverage brands get into a certain package and help them grow. But I think over the years what has happened in Zuckerman Honickman being around for over a hundred years is that we've built a nice long and extended network of people in the beverage industry, whether that's co-packers, distributors, label suppliers, et cetera.
[00:27:54] Jon Landis: Private equity people, you name it.
[00:27:56] Jeff Klineman: So we've been able to, you know, when I say unpaid consultants, we've been able to steer people in the right direction. You know, we'll sell them a package and then if they need help in other areas, we're there to somebody to hold their hand.
[00:28:07] Jon Landis: So our relationships, specifically in the distribution side, we don't promise our customers that we can get them distribution, for lack of a better term. We promise our customers that we will get them the appropriate introduction and the appropriate face time for them to sell themselves in their own brand.
[00:28:26] Ray Latif: Another big thing that a lot of brands need to be looking for is kind of unique packaging. They want to stand out from what's on shelf. Every single designer we've ever had at BevNET Live or Beverage School has been like, you need to stand out. You know, if people have two seconds, they're going to take two seconds to buy your product or to decide whether to buy your product. And you guys have, you know, recently, not recently, but you've put a lot of emphasis on innovative packaging and ways to kind of stand out from the competition, your competition and otherwise, which is interesting because it's hard to be innovative in packaging, isn't it? I mean, like, so what are you trying to do that's different? So what I would say is it's hard to be innovative domestically right now.
[00:29:05] Jon Landis: And Adam, I know you're going to get to some of our innovative packaging. I just wanted to say, when our customers are looking for unique shapes, They come with these great ideas, and what we have to do is add discipline to those ideas. So for example, we will tell someone with a beautiful looking bottle, that's great, and we could make the bottle, but it can't run on a production line. Furthermore, it can't get labeled and capped. So those are the type of disciplines that we bring to the design phase. Adam, you could maybe tell a little bit about our different technologies.
[00:29:38] Jeff Klineman: The funny part to me is that any new brand that we're speaking to the first thing they always want to do is come out with a new custom package, whether that's glass or plastic. The tough part is there's not as much education on the cost associated doing that. Not just in the package, but to Michael's point, on the Copac line. You know, because at the end of the day, no matter what you design, it has to fit on the Copac's line or you're in for a long list of costs involving change parts and all sorts of other stuff. Or you're in your kitchen filling a million bottles yourself. Absolutely, correct. So, to Michael's point, there is some discipline there. What we've tried to do is help our customers out by developing new custom bottles, whether it's glass or plastic, that we believe have been looks that consumers have consistently asked for. And we've been doing that on the hot fill side, on the cold fill side, and on the glass side.
[00:30:29] Jon Landis: So Ray, also furthermore, what we've done, and we did this initially with Smartwater, so you could say that they pushed us in this direction, but for plastic specifically, we took a business that was commoditized, running on high cavitation, very expensive molds. What's cavitation? Cavitation is the number of bottles that they make per cycle. So generally, the large soft drinker water companies are run on a 24 plus cavity machine. What we did with the smart water bottles specifically, because they were so fragile and they were straight walled at the time, or straight walled still today, we developed a small cavitation program. So where our customers are able to get into a custom package at a fraction of the cost. So for example, instead of building 24 molds that we just discussed, we're now building four and six and 10. And you do that at a fraction of the cost.
[00:31:25] Jeff Klineman: And it really has been a great program for our customers to take advantage of. And it's a speed to market thing too. So talk about the cost but also the shorter lead time in order to get a customer into a new package. And that's on the cold full side.
[00:31:38] Ray Latif: So some of our entrepreneurs who are listening right now are like OK well I'm about you know. six months in, 12 months in, I'm a little too small for these guys. And Adam, I know you had mentioned you guys take every call, no matter how small the company is or whatever. I got to ask, why do you take every call? And not to knock the entrepreneurs, but some of them are, you know, really, really just getting started and, you know, they're not going to need the kind of scale that you guys provide in some cases. So why do you take every call?
[00:32:10] Jeff Klineman: So I told you the story before we came on. It rings true and I laugh at it a little bit, but Michael's father has been in the business. How many years has your father been in the business? He would shoot me if I told how many years he's been in the business, so let's just go over that. He sat me down when I first started and said, Adam, make sure that no matter what, you take every call, you take every meeting because you never know. And that's a big theme to our company and I think to everybody that's in this industry because you don't know. I mean, I don't think anybody could have predicted some of the brands that have really taken off or some of the brands that didn't make it.
[00:32:42] Jon Landis: No, but Adam, why don't you share the Honest Tea story? Because I think that's a great one. Sure.
[00:32:47] Jeff Klineman: So those were two guys that came into our office with the Tupperware or containers, the coffee containers with their tea. There were thermoses with Dixie cups.
[00:32:57] Jon Landis: And again, this crazy idea that people were going to drink a healthy, organic, lightly sweetened tea. Right? We bought into it then and there. We believed in the founders. We believed in their philosophy.
[00:33:11] Ray Latif: This is 1998 when people weren't crazy about organic, right? Correct.
[00:33:15] Jon Landis: No question. I mean, we hear organic now. Organic in 1998 was the, you know, the apples where the flies were all around.
[00:33:24] Jeff Klineman: To that point, those were two guys that came in. You know, people might've looked at them like they had five heads, but we gave them the opportunity, put them in a glass bottle and you know, the rest is history. Yeah, for sure.
[00:33:36] Ray Latif: Okay. Well, that's an interesting story. I'm assuming you're going to get some calls after this and be like, Hey, I have the new Honest Tea and I want you guys to help me out with it. So, and who knows, it could be. Sure. Yeah. The other interesting thing is, you know, you must see a lot of beverage trends come and go. You must see a lot of really cool innovation that may seem like it's going to be groundbreaking or really going to make a big impact on the industry, and then it just doesn't. Or some things that you've seen, you're like, oh, that's interesting. And then it's huge. You know, I think Bayer is one of those companies that I think no one, probably even Ben Weiss, couldn't have predicted the, you know, just exceptional success that they've had. But having seen the beverage industry through your eyes for as many years as you have, What are you looking at right now in terms of trends that have staying power and why?
[00:34:22] Jeff Klineman: Well, and cut me off here if you disagree with me, but I think we have an interesting perspective because we don't actually see it from the store level of actually what's selling. We see it from the standpoint of who's buying bottles. But with that said, we see various different beverage concepts that are coming. Teas aren't going anywhere. People consistently still come and try to launch teas. I think we're seeing a tremendous amount on the protein side. Absolutely.
[00:34:45] Jon Landis: Plant-based drinks. If I had to make one statement, Ray, or one thought of the growth where we see growth in general, health and wellness. So you could arguably say you and I talked about the CBD industry prior to or protein, you name it. High pH is something that we hear a tremendous amount about as well. And there's no question, every growth brand that we represent has the underlying theme of health and wellness somehow.
[00:35:15] Ray Latif: Something that's better for you or functional as well, right? Absolutely. No question about it. You touched on CBD when we were in the kitchen, giving the nickel tour of the kitchen. of the office, we ran into our staff reporter, Brad Avery, who I don't even know how this came up, but we were talking about CBD beverages. And Michael, you had mentioned that there's a big hurdle for some of these products, at least in your eyes, in that there's a safety concern when it comes to kids. Can you talk about that? You know, what you were saying and how is it that these beverages can sort of overcome that hurdle?
[00:35:52] Jon Landis: Well, let me first say the CBD is obviously the non-psychoactive part of marijuana that we're talking about. And it's something that I believe in from a medical science perspective. I think it's just made phenomenal improvements, children with autism and a lot of different issues. So it's something that we support. Our number one concern though is these beverages and other candy products going to market looking just like the regular beverages that are out there. And our concern is how do we make them tamper evident? How do we prevent a kid or someone who's not prescribed the CBD products that they're not able to ingest it? And what we're looking at is marrying technologies that the pharmaceutical industry has used for a number of years with their pills and the beverage side of things. So we are in the process of putting together a plan with a co-packer, a bottle manufacturer, and a customer that marries all three of those concerns. And I think within the next six to eight months, you'll see this new packaging trend emerge in the marketplace.
[00:37:01] Ray Latif: Very cool. How long has this been in? in process, how long has this been in development? So this has been in development for the last four and a half years, Adam. Wow.
[00:37:10] Jon Landis: There was just such a concern, right, when we saw this industry emerge, that it would get into the wrong hands. And it was more of a passion project for Adam and I.
[00:37:21] Ray Latif: A passion project that might have some serious power for sure.
[00:37:27] Jon Landis: But you should know we both come at it. We're both fathers of three with young kids.
[00:37:31] Ray Latif: And that was what drove me. Yeah, very admirable. And hopefully it'll be something that we see on the market. I mean, as CBD beverages actually get on the market, we still haven't seen a great flood of those come out yet. But time will tell if that's something that is going to make it to market and make a real impact on the market. Guys, this has been a lot of fun. I feel like, you know, we've gone through 15 minutes and it felt like we could go through another, I don't know, hour and a half. I was just getting comfortable. I'm sorry, Adam.
[00:38:00] Jon Landis: I was just ready for a beer.
[00:38:04] Ray Latif: We'll get you a beer. We got a bar. You've seen the bar. We've got plenty to do and plenty to see and plenty to drink. But we'll do another 15 minutes or another hour and a half next time. How about that? Great. Thank you for having us. Thank you, Michael, Adam. All right. We'll talk to you soon. I thought it was really interesting to hear about the story of Zuckerman-Hanek and working with Honest Tea. Honest Tea walked into their office one day. Adam tells the story and next thing you know, they become a major supplier of Honest Tea. And this is when Honest Tea was tiny, like not even tiny. They weren't even real at that point. They came in with a thermos and little cups. Here's who's where they are now.
[00:38:39] Jon Landis: It's the beauty of what all these folks in the supply chain have to do. I mean, it's like they don't know who is walking into their door. They hope it's a, you know, an honest tea or a vitamin water or someone of that scale. But I think they have to give kind of equal attention to everyone, right? So, always need to hear those stories with, you know, some retrospect and lots of success.
[00:39:02] Ray Latif: Yeah, and it's interesting for us, too, because we see a new beverage brand almost every day, and it's like, oh, this could be cool, or this could be a big winner, this could be a really big success. And some of them are, some of them aren't. And it's really, I don't know, it's just so amazing to see a company come from nothing and make it, and hear about the relationships they build along the way, including companies like Zuckerman Honickman. Great stuff. Landis, you did another one of your, what are you drinking these days? And you did it with two of our oldest and most esteemed employees here at BevNET.
[00:39:41] John Craven: Yeah, my homeboys. Yeah, it's me. It's me. I'm in the sales department. I'm not shy about it. John McKenna is the director of sales and Adam Stern is a very senior sales associate as well. And, you know, we joked about it a little bit and, you know, they both have really great stories. They've been at this company for quite a long time and have seen quite a bit, quite a few products come and go. And this company has really changed a lot since when they started. So I thought it would be interesting to share that with you guys, get a little bit of grassroots, what's Bethnet all about from our sales department. All right, roll it. All right, everybody. I have two people here at the table with me who I spent a lot of time talking to here at the office, Director of Sales John McKenna and Senior Account Specialist Adam Stern.
[00:40:38] Jeff Klineman: Hello, hello. Hello, John. John, pleasure being here with you fine gentlemen.
[00:40:43] John Craven: So, you guys are some of the more tenured people here at this office. You're employee number one, John. That's right. And I don't think you even started when you met John doing sales.
[00:40:56] Zuckerman Honickman: That's correct. So, my story is an interesting one. My involvement with BevNET began when I went to an A&P store, a grocery store that was going out of business on Cape Cod back in 2003. And everything in the store was 75% off. So there were things like venom energy drink for like 40 cents a can. So I bought a bunch of these things, brought them back home, searched a number of them and BevNET came up. And I realized that BevNET was based in Cambridge, which is where I was living at the time. and realized that there was a contact on the site and I was doing contract writing at the time. So I reached out to BevNET, which turned out to be John Craven doing his part-time thing with BevNET while he ran another company and had a full-time job and went in, met with him. sort of ostensibly to pitch contract writing work and came out of it with a plan whereby I would do a market research report on energy drinks and sort of split things like two-thirds for me, one-third for him. And that sort of took off from there. Went for six months. What year was this? 2003.
[00:42:05] John Craven: Okay, so kind of the height of the energy drink craze.
[00:42:08] Zuckerman Honickman: It was, yeah, it was getting hot. We even did things like solicited samples from like 50 different energy drink brands and went out in Harvard Square and gave them out to people and got feedback from them.
[00:42:24] John Craven: That was your market research?
[00:42:25] Zuckerman Honickman: Yeah, it wasn't very scientific. So, at the time, BevNET was just Craven and Jeff was sitting in a small office with four other people that he worked with for a software company. And it was at the, what do you call it at Harvard? Like the meal houses or the, it's like the dinner clubs at Harvard.
[00:42:47] John Craven: Oh, okay.
[00:42:48] Zuckerman Honickman: It was at a former one of those. So, in the basement, there was a squash court. And we went down at one point and sat a bunch of these random people from Harvard Square that we pulled off the street and had them try these energy drinks and like took down their feedback. And it was like completely unscientific and hilarious because these people were sitting in the basement of this like, you know, dinner club house on Dunster Street in Harvard Square. Yeah, that was 2000. That was a summer 2003.
[00:43:20] John Craven: And then you started selling the white paper and it just kind of snowballed into selling ads?
[00:43:26] Zuckerman Honickman: Yeah, exactly. So I began selling the white paper and once that was John Craven's idea, which made a lot of sense, was, hey, we're not really a market research company. We're a publication. So can you sell ads based on the site? And I didn't have anything else going on. So I said, sure. So that was my story.
[00:43:46] John Craven: And what about you, Stern? What's your background? You don't have a marketing education or anything, right?
[00:43:52] Jeff Klineman: I've beaten this one to death, literally. But my background is in international development and biology. I had a stint at the UN for a bit and then was working at a biotech consulting company here in the Boston area and basically doing high-end biopharmaceutical reports on different verticals, targeted oncology, drug devices, and little did I know, I happened to have met John McKenna, and he was a freelance writer for company I was working for, and we kind of had chatted on and off, and the company got acquired, and basically my department got cut, and I felt like a phoenix rising from the ashes. I'm like, perfect time, be a ski bum for a little bit, and John reached out to me. I told him I'm no longer with company. And he said, oh, we just acquired this publication. And I believe this was in 2005 or 2006, I want to say. It was 2005, certainly. And, you know, I was looking for other opportunities. I'm like, you know what? Yeah, it seems like a legit operation. And, you know, I'm happy to come in. So and long story short, it's still here. I feel like the Statler and Waldorf of the beverage industry with my monocle up in the peanut gallery. You know, we've seen some crazy things.
[00:45:21] Zuckerman Honickman: Yeah, I have emails. We were just pulling them out of the archives the other day that I exchanged with Adam while I was working doing the contract writing for the company that he was at from 2004 that ranged through the start to the end of the pennant series where the Red Sox had their glorious 2004 comeback win versus the Yankees. So we were enjoying some of those. But yeah, yeah, we've been working together in one way, shape, or form for, I guess, 13 years or something.
[00:45:51] Jeff Klineman: Wow. I think after the Red Sox won the pennant, I think I, you know... I think I crashed my car the next morning because I was pulling out of a garage space and it was just, you know, just a disaster. But anyway.
[00:46:02] John Craven: But the company has certainly changed and it's continuing to do so. You know, from your roots selling, you know, web banners and magazine ads, it's really, that's not a huge focus of your day to day anymore. What do you guys spend more of your time doing now? Obviously, our events are a big thing. What else is a big product here that people should know about?
[00:46:25] Zuckerman Honickman: Well, we're doing sort of higher quality things nowadays, like this podcast, for example, which I might add needs a sponsor. There it is. But we engage customers across a number of different industry types from financial companies to ingredient companies, co-packers, whomever it may be, and are just really trying to help them figure out how to approach the different brands within the three CPG verticals that we serve. So whether it's a brewery or a beverage company or a natural food brand, that these suppliers want to reach, well, we have ways for them to do it. So that's really what we're tasked with. And we're not really talking so much to the brands, but really to the companies that the vendors that those brands use.
[00:47:17] SPEAKER_??: Right.
[00:47:18] John Craven: It's interesting you say that, because we go to some of these conferences like CBC, and some of the companies there, yeah, they serve the brewing industry, but they serve a whole slew of industries, and that just is kind of one subset. So something that we think about often is how we can make these verticals more appealing to some of these companies.
[00:47:38] Jeff Klineman: I mean, I'd like to add, I mean, it's really being so old and having so many ailments after being with this company for... Oh, geez, what, 10, 11 years now? We've really seen BevNET grow and really become an industry resource and like a matchmaker and a community for whether it be for BevNET, for beverage brands to meet service supplier companies and a real educational learning opportunity. So, and again, just kind of leveraging that to Project Nosh and then to Brewbound.
[00:48:11] John Craven: For the folks out there listening, the three of us operate as a very cohesive unit, where Adam and John are really focused on those supplier companies and service providers. And then my job is to get the brands there. And at the end of the day, in those rooms at those events, it's just a free-for-all of both sides intermingling, and that's what everybody wants. But you guys do see plenty of brand stuff. We get lots of stuff in here. Are there any products that you guys have been really digging recently?
[00:48:42] Jeff Klineman: What are you drinking? I mean, if I may digress a little bit for a number of years, I came on board in the height of the the energy drink craze. I mean, everyone could create an energy drink. And it's amazing how many brands there were. I mean, I think we even wanted to create an energy shot called Midnight Oil. You know, it was like a black cherry and called up Walter from... Exactly, yeah. I mean, the beds are burning, baby, you know. And called up Walter from NVE and said, hey, you know, can you create... My friends and I, you know, we were idiots, really. We didn't know anything about creating a beverage. And he's like, here are some samples. So... It is amazing to see kind of the life cycle and all these hundreds and hundreds of thousands of brands that we get in the office every week, every year. What are some of your favorites, Adam? I would say I'm definitely like, right, what am I drinking like right now? I love spice. I love heat. So I'm big into, you know, the Monfifo, the ginger. I mean, I could just down a whole box in a day.
[00:49:43] John Craven: A lot of us here can definitely do that. It's clean, it's crisp. You got any other spicy brands back in the day that you wish there might be around?
[00:49:53] Jeff Klineman: There was that one, and maybe it still is around. I don't think so. Hey, Mr. McCullough, where are you? Prometheus Springs. Shout out. One of those first capsaicin beverages. And I really enjoyed that. I remember this other one. I'm actually celiac. So when our old office in Harvard Square, there was that quinoa gold. You remember that one with Marcus? And it was a hundred percent quinoa beverage.
[00:50:17] Zuckerman Honickman: One of the first grain-based drinks.
[00:50:19] Jeff Klineman: Yeah. And maybe it was ahead of its time. I mean, I, I loved it. But right now, I really am, of course, cold brew coffee, loving La Cologne's Nitro. If I can get my hands on Highball, just really seeing those guys take off.
[00:50:38] John Craven: Yeah, big fan here. What about you, John?
[00:50:41] Zuckerman Honickman: Well, I think that I'm probably similar to a lot of people in the office that have had access to all sorts of drinks over the years and have pretty quickly determined that you should probably stick with the low to no calorie options because having a fridge full of caloric beverages at your disposal can lead to some bad things. But I love cold brew, love flavored seltzer. I definitely, if I go for something with some calories in it, will be like, I love coconut water. Some of the really good cold press juices are awesome.
[00:51:18] John Craven: You like that Mon Fifo though, but you don't drink it.
[00:51:21] Zuckerman Honickman: Yeah, that one's funny. At home, for example, if I get my hands on fresh ginger and some herbs, I'll often just like actually juice them. put them in a container cold in my fridge and use them to cook with. So I had the idea when I came in with that thing to actually just use it as a little splash of flavor for these horrible ramen noodles that I eat every day. And it was like, you know, a real revelation. It was absolutely delicious.
[00:51:49] John Craven: And now you have a little secret stash.
[00:51:51] Zuckerman Honickman: Yeah, I try to stash it, but people steal it.
[00:51:53] Jeff Klineman: It's one of those things. What was that Facebook thing from back in the day? It's like, I'll take what I can get. It's like your relationship status. I mean, that's kind of how I feel with these beverages. I think, you know, we're all being at BevNav. We get these brands and our friends are talking about it. It's like, oh, yeah, that brand, that's expensive. I'm like, oh, yeah, we get it for free. You feel like a VIP. I can take care of you.
[00:52:17] John Craven: I got a free beverage for you.
[00:52:19] Jeff Klineman: Come to my office. Yeah, I mean, exactly, exactly. But yeah, I mean, obviously the temple turmeric is, and the fire ciders and kombuchas. I love Revive, obviously HealthAid, coconut waters. I mean, there's just really, my taste changed. I'll try everything, but again, as McKenna was saying, like coffee and water.
[00:52:38] John Craven: Yeah, I mean, it's really funny that you say that because that's what I mean. I don't drink coffee, but I'm drinking water all day. I know a lot of people in this office drink water all day, and we don't really get many bottled waters in here. I don't think people would drink a whole lot of them if we did because it's wasteful. That's something that we're seeing around the market here in the United States is, you know, these beverages are good, but nobody wants to, you know, spend and waste to drink something all day, which is a big shift from like 20 years ago when nobody cared about that kind of stuff and we would just drink soda all day long.
[00:53:15] Zuckerman Honickman: Yeah, it's true. I think the bigger barrier to entry for me when I'm actually having to buy these things is the spend aspect. I used to be super cheap and I would only buy like Arizona iced tea because it was 99 cents a can. And that's why I was buying the 75% off like Venom Energy drinks at the A&P store. True value shopper. Yeah, I think some people are a little more eco-minded than myself. Definitely do have some problems with the sustainability and the eco-unfriendly aspects of consumer packaged goods in general. Yep, exactly. Beverages in particular, just due to their weight and some of the challenges was getting them around. But that said, I don't see beverages going away. People love them far too much. You know, they're one of the biggest things that brings people into, you know, apart from cigarettes and lottery tickets, into convenience stores. They're just, you know, a pleasure to have. Life would be more boring without our beverages, beers, or snack foods. So, I think we're covering some industries that are going to be here to stay. How some of those might address the concerns of sustainability, I guess that remains to be seen. It's true.
[00:54:34] John Craven: Well, I have to say I learned a lot from both of you in my four years working here. Honestly, you know, John, I don't know if you recall, but before I started here, I was telemarketing and I think when I first showed up and started making some sales calls, I was moving really fast and I was, uh, you know, kind of trying to wheel and deal a little bit too much. And you, I don't know, maybe some people can tell from the last 15 minutes, you have more of a slow kind of affect, you know, when you speak. But I really took that as something that, you know, you got to learn from. You can always slow down, pause, think about what you're going to say. And it's really helped me a lot. Adam, I mean, your personal skills, like the relationship building that you've done is always like, You know, that's, I like to end on these things, you know, why should we listen to this for 15 minutes? I have some lessons, some takeaways that you can take. And for me, it's, I'm trying to learn from everyone and I've learned a ton from you guys working directly with you. And for people listening, I think it's that, you know, you should try to talk to everybody because there's something to learn from, from everyone that you work with, everyone that you associate with. So hopefully they learned something from you guys and, Feel free to reach out to us if you guys out there are interested in what we're doing, want to chat with us. We're the chatters, we're the schmoozers. We're always happy to hear from everyone out there.
[00:55:54] Jeff Klineman: Always love hearing from our listeners, readers, new beverage brands, service suppliers. What do you have going on? Love to chat, love to... geek out on whether it be a novel ingredient or the next spice that's going to be encapsulated into a beverage. Capsule. Capsule. Yeah, I mean, it's been a fun, it's a fun gig. I mean, be yourself and have a good time.
[00:56:22] Zuckerman Honickman: Yeah. Yeah. And I'll say thank you to you because I've been waiting 14 years to tell this story. And now I feel like it's off my chest. And just if any of my friends do hear this, I am no longer writing about energy drinks. I haven't been since in 2003. I sell things on BevNET. Thank you.
[00:56:43] John Craven: If you guys enjoyed listening to this, hearing their stories, hit us up. You can hit us all, the three of us collectively. Shoot an email to sales at BevNET.com. That's where you can find us. And we'll catch you next time.
[00:56:55] Jeff Klineman: All righty. Thank you, John.
[00:56:57] Ray Latif: Thank you, John. I don't think it comes as any surprise that Adam and John McKenna are a good time at dinner. They have a lot to talk about and they're knowledgeable guys, but they're also, as Adam Stern would say, chill dudes. I think characters might be the right word you're looking for. Characters. Characters are welcome. Yes. Yes. Definitely. Yeah. Well, I want to end this with one minute, 60 seconds, because we haven't done this in a long time. What we are drinking, what are we drinking lately? I know we have a lot of stuff in the cooler that's come in of late. John Craven, give me 20 seconds on what you're drinking of late.
[00:57:34] Jon Landis: Well, I was out of the office for a week, which is great because there's a lot of new stuff. It's not like watching the paint dry normally. That's 10 seconds already. Uh, I would say out of this week, the two things that really stood out to me were probably the new, uh, Mon FIFO to Merrick shot and also the Stumptown sparkling. Okay. Jon Landis.
[00:57:54] John Craven: Yeah. Uh, Justine was kind enough to send us a few boxes of Mon FIFO. I found some in your fridge. Definitely grab some, you know, she tells me that some of them are for me. Take her at face value. So I've been definitely crushing those. In fact, I was just getting over a cold on Monday when they showed up. So it was really nice to get some ginger shots. Yeah. Wipe down the microphones. All right. Jesus.
[00:58:18] Ray Latif: I've been digging on the Evolution Fresh Coolers, those cold press juice and cold brew tea blends are really good. I'm that guy, like I think everyone knows this, I turn around and look at the ingredient label and I try to see how much sugar is in there. And it's really, it's not that bad, you know, it's 17 to 18 grams of sugar per bottle. depending on a variety and they're really tasty. And I feel like that's the kind of thing we need more of. We need more of those like really full flavor juices that aren't going to break your sugar bank, so to speak. And this goes without saying, but the harmless harvest that we have in the fridge has just been tremendous. When I see the cooler full of harmless harvest, well then all is right with the world.
[00:58:57] John Craven: Can I say one thing before we close up?
[00:58:59] Ray Latif: Yeah, of course.
[00:59:00] John Craven: Yeah, I know that there are a lot of entrepreneurs out there that listen to this thing. The summer events are coming up quickly, but more importantly, the application deadlines for the New Beverage Showdown and the Nosh Pitch Slam are very soon. If any of you out there are listening and want that opportunity to get up on stage and pitch at one of our events, you got to apply. And I'm happy to talk to anybody who has questions or just wants that shot. So please fill out an application, email me, whatever. Let's get these conversations rolling. Indeed.
[00:59:33] Ray Latif: Well said. And that's all we've said. And that's all we will say for the rest of this podcast. Good night and good luck. And we'll see you next time.
[00:59:41] John Craven: Adieu.
