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[00:00:39] Ray Latif: Hey folks, I'm Ray Latif and you're listening to the number one podcast for the food and beverage industry, Taste Radio. This episode features an interview with Chris Hunter, the co-founder and CEO of Koya, a fast-growing brand of refrigerated, plant-based beverages. It's rare for an independent consumer brand to generate $100 million in annual revenue. Chris Hunter has built two of them. Chris is the co-founder of plant-based beverage company Koya, a maker of vegan protein shakes and smoothies that are sold nationwide at retailers including Whole Foods, 7-Eleven, Sprouts, Publix, Kroger and Safeway. Koya recently picked up another major retail partner in Starbucks, where the brand's Vanilla Bean and Cacao Bean protein shakes are now available in the cafe's cooler cases. In this interview, Chris, who co-founded Koya in 2016 and previously co-created and helmed controversial alternative brand Four Loko, spoke about the importance of goal-setting in his personal life and that of his business, lessons from an aggressive retail strategy early into the brand's development, why self-manufacturing is key to profitability and the company's future, and how to optimize the roles of celebrity partners. Hey folks, it's Ray with Taste Radio right now. I'm honored to be sitting down with Chris Hunter, the co-founder and CEO of Koya. Chris, so great to see you. Great to see you as well. I feel like we always run into each other at trade shows, bump into each other, say hi for like a couple of minutes. And then always in that quick two minute conversation and say, we got to, we got to meet up. We got to do another podcast. Cause the last time we had you on the show was 2017. Lots been going on with Koya, lots been going on with you personally in the past six years, and I want to unpack as much as possible. So I hope you're all buckled up because I got a lot of questions for you.
[00:02:36] Chris Hunter: I'm ready for it. It's crazy. Time flies. That was six years ago.
[00:02:40] Ray Latif: Yeah. I had to check the, I had to check the episode date because I thought it was, I thought it was like 2018 or 2019, but no, it was 2017.
[00:02:49] Chris Hunter: You know, that's one of the beauties of this industry, not time flying, but you mentioned running into each other. I think that it was pretty shocking, surprising, exciting for me to jump into this industry and realize how much of like a community there was around it. I feel like a lot of my best friends are from this industry now and developed over the past six years. So anyway, it's great to be reconnected. Absolutely.
[00:03:14] Ray Latif: So Chris, uh, you know, I walked into my local Starbucks here in the Boston area and, uh, got to say, I was a little surprised to see what I saw in the cooler case. And that was a bottle of Koya. Well, more than one bottle of Koya. And, uh, I was thinking, Oh, is this a test? Is this a regional kind of thing where Koya is in Boston area, Starbucks or what's going on here?
[00:03:37] Chris Hunter: Yeah. You're starting off with a bang here. Um, Yeah, we're really excited about any level of support and partnership with Starbucks. And it's been something that's been in the works for literally seven years since day one with Koya. And so, like, as an example of that, when I go back to the early days of Koya, it was a blend of proteins that included hemp protein. And we talked to Starbucks really early on and realized that hemp, although federally illegal, was going to be an issue for them to ever put in the stores. And so we made that adjustment seven years ago in preparation for what we didn't expect to be such a long, you know, exploration period. But seven years later, we have have started to work with Starbucks, and you'll see Koya nationally in Starbucks stores over the next few months. So really exciting partnership. It's kind of one of those things that I look at. It's the perfect fit, right? I mean, the stat that we heard from the CMO of Starbucks is that 100 million people walk through Starbucks stores globally a week. And I know this is only in the US, but when you think about that level of exposure and awareness, this is truly the prime example of what I call revenue generating marketing. It's like we're selling the product. They're selling the product. But the exposure in those locations is just unprecedented and very validating for a brand like ours, but also a perfect fit. I mean, when people go into Starbucks, they're looking for, you know, a healthy snack on the go to accompany their coffee. So we're really excited about it. I'm glad you saw it.
[00:05:16] Ray Latif: Very exciting stuff. Did you approach them seven years ago and you've just been continuing that conversation since?
[00:05:22] Chris Hunter: Yeah. So if you remember back at that time, there was a woman named Deb Hanna with, uh, with Starbucks and she was working with hippies and some of the other brands. And so, um, I flew out to Seattle to meet with her and then she transitioned out of that role and Starbucks went through their own kind of changes and then COVID hit. And so it was really just a long, um, wait and see period, I guess, in between Deb and now, but it was something that I personally took on as my, my project and goal to get us into Starbucks.
[00:05:52] Ray Latif: Well, congratulations on achieving your goal. And that's a great segue, because I do want to talk about goals. And, you know, I think entrepreneurs often see headlines on LinkedIn or on BevNET and Nosh, and they're like, wow, you know, this company did this or that company did that. And, you know, look at all the revenue they're generating, look how much money they raised and so on and so forth. And it almost feels like. They're losing sight of their own vision and their own goals and their own hopes and dreams for their brands and for themselves. And I want to talk to you, Chris, cause I know goals are important to you. How do you goal set as a father, as a husband, as a, you know, in your personal life and how do you do it in your professional life and how do both impact the way you lead, Koya?
[00:06:35] Chris Hunter: Great question. Look, I think. Myself, like probably many entrepreneurs, life just feels so busy, right? And I can get wrapped up in the day-to-day of three young kids running a business. There's a lot going on. We're growing fast. And so what we have found as a family is taking the intentional time to set goals at the beginning of each year. And so how that looks for me personally is my wife and I will take an overnight trip that can be to a local place or or traveling somewhere with the sole focus of recapping the prior year and planning the next year. And that looks like, what do we want to do together? What are my personal goals? What are my personal growth goals? What are my business goals and hers, right? And it starts there. And I think the parallel there is like, It takes time and intention and intentional focus to establish goals for the company as well. And much like I'll keep you on the parallel between personal life and the business life much like personal life. You know there are seasons or phases and recognition of that is really important. So I'll give you an example for me right now. that my sons who are 11, 9 and 5 will only be 11, 9 and 5 once is really important to kind of solidify the season of life I'm in, right? And so keeping that front and center is really important to everything else I do. Well, it's all that parallel to the business. You know, early on we were in a high growth, high burn, macro environment, but also like phase of our company. And the macro environment has changed, right? I would say about two years ago, it really focused on hunker down profitability. You need to prove it out, not just have a model to show how you can become a real sustainable company. And so we're now in that phase of the company. That doesn't mean we're not trying to grow. That doesn't mean we're not trying to generate awareness. It just changes the way you do things, right? And so Back to your original question around goal setting, for me, it starts with the highest level lens that you're going to set on whatever it is you're looking at. So for family, it's like this is the season, right? It's about optimizing while the kids are a certain age and maximizing that. And in the business right now, it's about like making sure we're a long term, sustainable and break even or profitable company, right? Versus growth at all costs. And, you know, we'll just go raise more money if we need it. So that's where I would start. I would say digging in deeper, the next level for me personally is like, how do you check in on that? And I'll start this time with the business perspective. But we have an amazing team. Our president, Mike, has done a really good job of setting a culture of transparency to really hone in on ownership. And so what we do is every Monday morning, we do a leadership call and we have our leadership notes. And it starts out with our quarterly goals. Which are individual, right? So my quarterly goals are going to be different than, let's say, the VP of operations, but it's going to be that it's going to be our priority accounts. So, for me, you know, a list of the top priority for the company, but another person may have whichever ones they cover. And then we go through our open items. And the point of that is there's a weekly check-in and accountability to where I'm sharing it with the team and they're sharing back if there's misalignment or if they feel like we're operating kind of out of alignment with what we're saying. Our goal is this, but we're doing this. So I think that frequency of check-in is how we help maintain kind of the the GPS towards our goals same with with family li at it. But the idea is o we sit down and look at k
[00:10:21] Ray Latif: That type of reflection is so important to know that you are either ahead of what you're trying to do or behind or right on target. When you talk about quarterly goals, can you give an example of one of those goals? I mean, is it revenue based? Is it distribution based? How do you think about the kind of goals that you do want to set for the company?
[00:10:43] Chris Hunter: So it'll be all of the above, right? And there is no right or wrong goal in our eyes, right? So for me, as an example, one of the goals for the last quarter would be to move 100% of production in-house. And as you know, a year ago, we vertically integrated. And as you're probably aware, that doesn't immediately mean day one, you produce all of your product, but there's a transition phase to that. So that's an example of a goal. It's like, how do we get 100% of our production coming out of our own facility. Another may be revenue or velocity growth in a particular retailer or channel. Another may be successful execution of a marketing program. So it's really For me, it's company wide, because I view my job as the co-founder and CEO as really the problem solver for the top priorities. And so, as I always tell my team, sometimes I'm going to be really deep in ops, and I'm going to be on calls that I'm normally not on, and I'm going to be digging in, and that may feel uncomfortable to me and to them, right? The next month I may be on none of those calls because it may be a marketing focus and we may be exploring big initiatives there. So they can be pretty broad and diverse in terms of what the goals are.
[00:11:57] Ray Latif: Bringing production in-house is a huge step. It's a huge decision. It's riddled with challenges and risks, and it doesn't necessarily seem like the best path for a lot of non-alcoholic beverage companies. I mean, typically you see self-production in beer, wine, spirits, some fermented beverages like kombucha, but traditional beverages, coffee, tea, smoothies, what have you, it just feels like It's a hurdle that's almost too overwhelming for most companies. Why was it such an important thing to do for Koya and how does it help line the path for your future?
[00:12:37] Chris Hunter: Yeah, so I definitely come from the school of thought of like asset light, don't own production. Why would you vertically integrate? Again, the president of our company, Mike, he was the CFO over at Fusion. So we had a long working history together. And when he joined this company, what, six years ago, we both said the same thing. We do not want to own a manufacturing facility. And, you know, I think a key to to keeping a company afloat is being open to changes and new information and assessing the current reality. And what we assessed really driven by Mike during COVID was that we were in a really risky situation and it felt comfortable, right? Because we had a co-packer, we had a redundant co-packer, we checked all the boxes that incoming investors or people would say you need to check to have stability In production but what we knew is that there wasn't a ton of stability in some of those copackers and so as an example, Columbia shut down a septic solutions about a year after we had transitioned out of that and it became something vertically integrating became something that was. A bit contrarian at the time we were kind of fighting an uphill battle with ourselves with investors about why it made sense to suddenly becoming like an essential or it made us look really smart. Right. And. When I look back, some of the things that Mike had pointed out were, you know, COVID exposed all kinds of things, you know, issues and concerns around reliability of ingredient providers, reliability of our co-packers, whether that meant the quality of the product or the timeliness of the production. And so just it really made us susceptible. And then I think the icing on the cake, not the driving factor, was that we could really control our potential to achieve our margin targets. I mean, for a product in our space, the goal is 50% gross margins, 40% net, right? And as we looked at that, the only way to do it was to bring a lot of these things in house and start chipping away at them. And I will say that it has not been easy. I don't think I underestimated the lift that it would be, but I still underestimated it, if that makes sense. Like, even as much as I knew it would be tough, I still underestimated just how difficult it was. And so to the credit of our team, I mean, look, The beverage industry is hard, as you know, producing beverages is hard. Producing low acid beverages is quite possibly one of the most difficult things that you can get into. And our team has navigated it amazing. So, you know, look, I'm not saying it's perfect even today, but all the credit to even getting us to this place goes to to our amazing team, because if it were only me, there'd be no chance that we would be vertically integrated because I have no clue about manufacturing.
[00:15:48] Ray Latif: But it seems to be working. You had mentioned that Koya had its first profitable month recently. And, you know, you talked about the importance of your margin structure and how vertically integrating fits into that. You know, it's interesting because I think in the past, it really was about top-line growth and to attract certain investors. But it seems like those investors do want to see healthy margins, solid fundamentals.
[00:16:17] Chris Hunter: Yes, I think one of the dangers for entrepreneurs is getting too wrapped up in whatever the mentality of the day is from investors or from strategics. It's like high growth at all costs, all top line. Now it's all about profitability. The reality is that they always want both. And there's going to be a few degrees of fluctuation of how important growth is versus profitability, or at least a path to it. So what I've come back to, and believe me, I've meandered in this train of thought over the years, what I've come back to is like really just doing what we feel is best for the fundamentals of the company. Sustainability of the company is what's best. And if we're running a business that we really believe in and that we're really showing has success in the market, And the consumers are demanding any of that stuff, meaning investment or acquisition or partnerships will come right. And I think. Look, I think it's proven to be true. Let's call it six months ago, we made the comment, maybe eight months ago, we made the comment to our internal investor base and to some other potential partners that we were talking to that we're going to go heads down. We're not going to distract ourselves with anything except for executing on our plan. We're not going to talk about getting profitable and show you a model that gets us the profitability. We're going to get profitable. And fortunately in July we were able to show that we had a first our first profitable month. I'm not going to suggest that it's all roses from there. Right. It's a business. There's ups and downs. But we proved it. We wanted to not talk about the idea that we were going to launch in Starbucks. Let it happen. Right. What happened since then is some of these things start to happen. And then all of a sudden you're getting a lot of inbound calls and requests and congrats and things like that. But it's because we were focusing on the business, not because we were focusing on what investors or strategics told us was the key.
[00:18:16] Ray Latif: The allure is still there though. And I got to think that Some of your investors and probably some folks in your team are thinking, Oh, well, Hey, we got this offer or, you know, I'd love to be involved with this firm. But, you know, as the CEO of the company, you know, a lot of that I think lands on your shoulders about who you want to be in business with. How do you vet potential partners and how do you think about how you might want to be involved with them in the short term versus the long term?
[00:18:45] Chris Hunter: Just like you you've got you know potential investors and team members. You know it's through conversation. And I think we've I've learned a lot over the past seven years. You know back at Fusion we barely raised any money. And the little bit of money we did raise I didn't leave that. And so With Koya, I've been very active. We've raised quite a bit of money. I've had a lot of conversations. I've learned quite a bit. And some of the learnings out of that are like, look who you get in the negotiation process is who you get as a partner. Right. And so don't don't assume that if they're really tough and beating you up, they're going to change their tune once you're once your partners. You know, there's a bit of that. There's a bit of like start to focus on what, you know, or like gating conversations. Like if, as an example, somebody says, look, it's super important to me that you have X velocity in this channel, or I don't even want to have a discussion, whether that's an investor or acquirer. Like, get that out early, and then you can know whether this conversation should go further or not. Because I will say, like, fortunately, I have a really good team that supports me and frees me up to have some of these conversations. it can take over conversations with potential strategics or investors or partners or whatever it may be. And so it's always alluring. It's always interesting. We have investors at some point they expect a return, of course, but I think everyone would agree in general, but especially in the current climate, like running a good, sustainable business is the number one priority. And so that's how we keep our focus or try to. Vibrant Ingredients is the natural ingredient partner powering food and beverage innovation, delivering flavor, function, and protection through a science-backed portfolio. Vibrant delivers purpose-driven solutions that help brands create extraordinary experiences. Discover what's possible with Vibrant today. Visit VibrantIngredients.com.
[00:20:49] Ray Latif: Among your investment team or roster are several celebrities. You have quite a few actually. Perhaps the best known is Chris Paul, the NBA superstar who is now with the Golden State Warriors. Are you a Warriors fan now?
[00:21:04] Chris Hunter: I'm not a huge basketball fan, but I'm a Chris fan.
[00:21:08] Ray Latif: Gotcha. You know, when you think about your celebrity partners, how do you optimize their role and their impact in the development of the company?
[00:21:18] Chris Hunter: Yeah. So, I mean, look, we have a lot of celebrities involved in the company in one way or another. Chris is a good example of someone who was actually helping us more proactively, whether it's gain awareness or with relationships. Another person is Kevin Love and his wife, Kate Love or Kate Bach. And then there's a lot of investors, you know, well-known people, but they literally put their money into the company. There's no requirement or deliverables. And so they're treated very differently. Right. I mean, we We look at all of all of the investors, but especially the ones that have an audience or a high profile. And we try to figure out what works best in their lifestyle that can help us gain some awareness or exposure. And it's as simple as that. There's no requirement to do it. But if we can provide them products for an event or or whatever it may be, that's great. With people like Chris or Kevin or Kate, we look a little bit more specific on what is going to move the needle and drive the business forward. I think many people, including me in the past, look at these types of partnerships as pure awareness play. They have 11 million followers on Instagram or they have X million people watching them every night of the game, and so they can help gain awareness for the product. I think that's valuable. But I don't think that's always the most valuable. And I'll give you some examples. Chris, as an example, joined the call with Walmart and firsthand expressed how much he supported the product, how it fit into his lifestyle, and how he felt that it was a good partnership to have healthier plant-based options to a broader array of people that may shop at Walmart versus, let's say, a Whole Foods or something. That was really valuable. You know the buyer enjoyed hearing firsthand from Chris. You know Kevin and Kate have done similar things. So sometimes a non obvious way of supporting is actually even more valuable than than the obvious kind of like mainstream awareness perspective. And then the reality is all of the people that are invested in our company, whether they're traditional investors, celebrity investors, or more forward-facing people like Chris, Kevin, and Kate have a lot of connections. And so, you know, figuring out what opportunities exist through their connections and where they can like kind of grease the wheels to make things happen. Those are some less weighted, but highly valued opportunities that I think a lot of people may miss.
[00:23:44] Ray Latif: You'd mentioned that Chris had been on the call with Walmart. How do you know when to enter conventional? How do you know when you'll be able to support the brand adequately in those channels?
[00:23:58] Chris Hunter: Yeah, I mean, it sounds very methodical and well planned in retrospect. And at the time it was. And then you face the reality of the world and life. And it's really hard to say no when you have the opportunity to go into a big retailer or a place like that, that maybe is a leap for you. I'll give you an example. When we first launched, I think, which I shared with you a while ago, but We launched Whole Foods nationally. Our second large customer was Wegmans. Our third was Giant Eagle. I was scared to death to go into Giant Eagle, a traditional retailer from my neck of the woods where I grew up. I didn't know if it would fit. Again, it was hard to say no. So we took the leap, and then we made sure it worked. We oversupported. So I don't know that there's a real that there's a real formula to know exactly when to do it. What I will say is there is one metric if I'm ever looking at a deal to invest in or even in our own company the one metric that is. As telling as it can be is velocity or dollars for TV. And so we look at it now on a where do we rank on dollars per TV versus competitive products. And we set our own internal benchmarks. And if we meet or achieve that that internal benchmark from a velocity perspective we Assume and expect expansion and so the reason I think that's that's so important is because if you look at it that way again, it sounds perfect, right? It has not been perfect over that. It's really hard to say no, but when you look at it that way, it doesn't become. a pitching thing. You're literally just presenting to retailers what is best for you and them, right? I believe in win-wins. And so I think that's the way to think about how you can support on a broader channel. I'll give you an example of that. We entered into Ralph's, which is a Kroger banner, as a test. is in our backyard of sout not my backyard anymore, kind of origin backyard a able to go in and support product was on the shelf, samplings, things like th three skews, so our van and our chocolate banana one, number two and numbe that channel or in that r as of today. And that's o set of all the nakeds, bo whatever else is categoriz That made our conversation with Kroger Corporate a lot easier and different than it had been if we were kind of at the bottom of that velocity range and asking for expansion. I think that's how we think about it. Look, we've made some mistakes in the past. You know, we've gone into some retailers, assuming that we had a lot of awareness and momentum and maybe under supported them. And that's a mistake I would caution people against because it's much harder to go back and fix an issue rather than just address it on the front end and never have an issue. So I guess maybe to answer your question, another way to think about it is, What does your budget look like? And can you give that retailer the full support that you know it needs to 100% be successful and not take a chance on it?
[00:27:06] Ray Latif: Well, there's a lot to unpack there. I want to go back to Giant Eagle and saying, you know, you made the decision to over-support Koya in their stores. What does over-supporting look like? What does that mean?
[00:27:18] Chris Hunter: So we hired, so we had a broker in place. We went through a DSD initially. So, you know, normally it's often, I should say, it's one or the other. It's a DSD or a broker or a merchandiser. We did all of them. We did brokers, we did DSD, we did merchandises. We had internal people focused on the account. So that's what it would look like in terms of a support from manpower or focus. We went heavy on temporary price reductions or discounts to gain trial. So, you know, our view has been the deeper you go, the more trial you get. And if we're going lighter on reductions, we're going to get more like kind of pantry loading, or in our case, refrigerator loading. And so we went deep on a lot of promos, high frequency at the beginning, just a heavy touch and heavy spend towards that account for the first year to make sure it worked and it was justified to be there.
[00:28:13] Ray Latif: When you've said you've made mistakes and under supported the brand in some places, is it just the opposite of that where, you know, you didn't do those things or was it more that you just didn't have people on the ground supporting the brand in stores?
[00:28:27] Chris Hunter: I mean, not in all cases. I think there's some recently successful brands that maybe don't have all of those pieces in place and have still been successful. But I look at it in terms of creating the perfect storm. And so let's put as many checks in the boxes that we know can have an impact as possible. It's really expensive to put feet on the street in every market. So you have to be selective. We have an amazing team. That team also travels to give us broader coverage. I think there's a lot of different things that that could mean in terms of under-supporting. You know, it could be that we don't have enough frequency of store visits, whether that's an external merchandising agency or internal people. It could be, I feel like this is a common mistake, that we continue to view the data from a macro, chain-wide level. For me, like the data by store, by SKU, and even by day level is the most telling. And I'll give you an example of why it matters so much. You could have a store that says, oh, we're doing great. We're selling six units a week. Maybe that's good for them. And we would say, that means you're selling one case and you're likely out of stock. And if we dig into the data, on Monday, they may sell four bottles. On Tuesday, they sell their remaining two, and their order doesn't come in until Sunday. So, when we talk about that, like, hierarchy of velocity, like, we're losing five of the seven days in sales, and while it looks good enough from headquarter level, digging in on that store level data matters, because, and then digging in even further. Right. And what I mean by that is sometimes the data says we're not out of stock. But when we have somebody go into that store, it's sold out at noon. And yes, it came back in the next day, but we missed from noon till close for sales. So that level of detail is really important to drive success in a retailer. Adequate inventory is a huge one. Like we some of the mistakes we've made is not prepping and aligning with the accounts ahead of time on the potential velocity. I would take 100 percent responsibility and liability for the product if it spoils because ours is obviously perishable to double the inventory in the store especially in that first year because we've seen it you know, a dozen times, where stores project the velocity, they assume that's what's gonna be, they under-order, and you can almost get in this vicious downward spiral of like, their algorithm is only ordering enough to sustain a slow decline for your brand. So that's a bucket of things I would say in under-supporting. The other mistake we've made, which may go into under-supporting or may be overly aggressive on our part, is leading with innovation. And we've had to get disciplined over the years. Like every time we come up with an innovation, we're excited about it, of course, otherwise we wouldn't put it out. But we have a very proven number of SKUs that are our highest velocity in every retailer. And what happened, whether that was at the company level or maybe a particular person's level is they may have said, well, I'm interested in these fruit smoothies, so let's put these in first. Or I'm interested in these different flavors that may be half of the velocity of others. Allowing that to happen has created a lot of self-inflicted wounds, and then it's really hard to go back and explain that to the retailer later after it doesn't work, right? So those are kind of the examples that come to mind when I say under-supporting or not launching correctly.
[00:31:57] Ray Latif: Leading with your core, from what I'm hearing, is always really important from the outset.
[00:32:03] Chris Hunter: Absolutely. And establishing innovation partnerships and how they work is really important as well. So, you know, we always want to lead with our core. We have a wide variety and assortment of flavors. We would prefer to get to five items of our core protein line, which I can talk about the evolution of our products if you'd like in a bit, but of our core line before we consider anything new. I give you an example of how that works really well is like Whole Foods has been an innovation partner of ours since launch. They have our entire lineup. So we meet with them. We brainstorm on ideas and concepts. Sometimes they want exclusives. Sometimes they don't. But they fully support us in our lineup. So we launch incremental items. Where it doesn't work is where a new retailer may say, hey, I want these two items and then I want something exclusive or new. It's just tough for us to justify that until it's proven.
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[00:33:48] Ray Latif: I do want to talk about your innovation strategy. I want to get back to data. You talked about how much data you use to make important decisions, store level data included, but that type of detail is expensive. And I wonder how your investment in data has evolved over the years and what has given you permission to invest more as you've grown.
[00:34:16] Chris Hunter: Yeah, it's expensive, right? And so at the beginning, at the early phases of the company, you know, you're big borrowing, stealing any data you can get. Someone might show you something, you write it down, or maybe a retailer will let you peek at their data. It definitely is a, can be a large line item. We try to evaluate consistently what's the most usable data and what's just kind of like there, but irrelevant to decide how we spend on it. Not only the data, but I think you also have to have internal resources that can synthesize the data. And so we have an amazing team around data. The head of that team came from Spins, so really understands how to slice and dice the data. puts out weekly, monthly, and quarterly reports. But myself and Mike are both data hounds as well. So my favorite day of the month is when the new report comes out and I can dig in and look at velocity, growth, competition, all that kind of stuff. I personally think it's really important because early on, you're selling on passion and belief in the brand. But as you grow, you're selling on data and proof. So if you don't have the data or the proof, it becomes really tough. I want to go back, this kind of ties into data, but to talk about channels. You mentioned how we had this very pragmatic approach to natural, then specialty, and this expansion through. And it didn't necessarily go that way, which ended up working out just fine. Maybe it was a little more expensive, maybe it wasn't, I don't know. But But when I look at what our goal was from the beginning, it was to establish a brand that was viable in all channels. Because for us to be the size, scope, and make the impact that we wanted to make, it couldn't be something that was a top brand in natural, but it didn't go beyond there. And so when you asked about how we measure that, we look at it right now, we're top three brand in natural. And again, we're looking at our competitive set. top three brand in natural. We're number six in food. We're number six in Mulo. We're one of the only brands that has crossed all the way over from a top brand in natural into convenience stores with 7-Eleven and some upcoming expansion with Wawa and places. And so that is really validating. Look, there's a lot of room to go. There's a lot of opportunities still. But to see it working in all those channels kind of proves out our initial goal to have something that worked in that large of a range of channels.
[00:36:48] Ray Latif: It's a slippery slope though. I think there's a lot of experts or consultants that'll tell entrepreneurs, look, you want to be specific in one channel, dominate in that channel, then move on to another one, or just realize that maybe you're not a mass convenience store brand and avoid those channels because it's just not going to work.
[00:37:07] Chris Hunter: I would agree with that. And I think it depends, which is always the answer.
[00:37:10] Ray Latif: Right. Right.
[00:37:11] Chris Hunter: I think back to the craft beer days. And I remember when we launched Not Your Father's Root Beer, it was at the kind of height of craft beers. Like, did anybody care about the 500th, you know, West Coast IPA? No, nobody cared. So that model really wasn't going to wasn't going to work. But if you wanted to create your own local craft brewery that dominated whatever market, you know, Milwaukee, Wisconsin, like that can be a very viable, you know, approach. And so I really think it depends on what you're trying to accomplish at the onset. Ours was much broader and bigger, right? We knew from day one, that's what we were trying to accomplish. Other brands, I would agree, like maybe it's so cutting edge that you really just need to dominate natural and maybe 10, 20 years down the road, the rest of the market will catch up. So I'm not suggesting that should be the path for everyone.
[00:37:59] Ray Latif: It depends on who you want to be and what you want the brand. I think you nailed it when you said, look, we want to make this type of nutrition. Well, now, now I'm putting words in your mouth, but I'm getting the sense that this is the type of brand where you wanted this type of nutrition, this type of product to be accessible to consumers across the United States, because there wasn't that kind of, there wasn't this kind of product available prior to that. And certainly not at the price points that you're at right now.
[00:38:25] Chris Hunter: No, I mean, I had somebody call me the other day and they said, man, we see you guys popping up in airports all over the place. I love it. I don't know that that'll ever be like a massive revenue driving channel. And it did take a lot of work and it still does. So it could theoretically be viewed as detracting from our core focus or initiatives. But there's a huge need and opportunity for better for you options in that space. I travel all the time. it's the time I eat the worst usually. So the availability in those locations serves a little bit of a different purpose. Of course, it always comes down to the growth, revenue, and profitability of the company, but like not all distribution is created equal in my mind. Like sometimes there are awareness distribution points and they may not be as profitable or may not be profitable at all. And then there are your, because of what it costs to get in there, what you have to spend to support it. And then there are your real volume and revenue driving accounts. And that's the purpose that they kind of serve. So.
[00:39:26] Ray Latif: Well, I got to tell you, uh, when I'm getting ready for that early morning flight and I'm walking through the airport here in Boston and I'm going to Starbucks and I see that humongous line, I see people and no, no knock on Starbucks. Cause I love, you know, some of their case items, but you know, a sausage, egg and cheese, you know, when you want to get protein for the, and get ready for the day may not be the best option for you. Having a bottle of Koya, if that's an option, might be a good thing for a lot of folks. So excited for that. Nice option. For sure. You know, innovation, I will fully admit we are innovation. freaks over here at BevNET. We love to see new products. We love when brands come out with stuff that we haven't seen before. And we spend a lot of time talking about those brands. I mean, it is what it is. We highlight brands that are coming out with new things. I mean, it's just part of our DNA. Whenever we visit trade shows, we're always looking for brands that say, okay, hey, we have this thing there, that's this thing there, so on and so forth. And sometimes, you know, innovation is not the right thing for a brand at a certain point, no matter who's watching, no matter who's paying attention or writing about it. All that being said, you know, your innovation strategy at Koya has been pretty robust, as you pointed out, and there's a lot of new products coming to market on a pretty regular basis. I mean, your most recent one is your cereal-inspired flavors, which are fantastic products, ones that we highlighted in a recent episode of Taste Radio. Is it something where, you know, it is again, data inspired how you think about trends and innovation, or, you know, is it something where, you know, something developed internally or an idea developed internally can end up being the next line extension or brand extension for Koya?
[00:41:14] Chris Hunter: So I would say for us it's a lot more of an art than it is a science. There's a bit of feel around it. And some of the successes and definitely some of the failures in terms of innovation have have helped us. All of them have helped us in different ways. And so it's part of our culture and DNA. We love to despite the fact that we've launched a lot of new items and lines over the past six years, we've had a lot of restraint not to do more. So the ideas can come from anywhere, right? We have a team that's out there in stores daily that may see something, whether it's in our category or not, and say, you know, did we ever think about this? We may be reviewing data. We may have some of our, you know, ingredients suppliers or partners propose ideas. And then a lot of the innovation that actually makes it to market is driven by either retail partners or specific purposes. So I mentioned Whole Foods earlier. We'll have ideation sessions with Whole Foods where we'll say, here's, you know, five different things that we're thinking about. And in the past, that's gone even outside of our category. And then we'll start to talk about, like, what do we think makes sense for the brand and for your store? Where are the gaps, right? And we're trying to establish more innovation partner relationships by channel. We have a few of them, but those are always fun, right? So, as an example, we have this idea of the cereal line. We saw cereal, you know, re-emerging. I think it was, what, five years ago, I was talking about cereals dead and no one's eating it in the morning. And then you have Lovebird and Three Wishes and, you know, Magic Spoon all come out and amazing products. They're in my house. And we were talking about, this could make sense, right? And so we presented that to Whole Foods just as an idea and they really loved it and they wanted to launch it with us to really pilot it with us. And so that was that was a year ago that we presented that. And so we were patient to make sure it stayed with them and launch. And so far it's been a really big success. It taps into the nostalgia that you mentioned earlier. It's unique. It's healthy. So this idea of like playing on something unhealthy with a healthy you know, actual delivery, I think is interesting. And so early signs, right? But this one seems to be going well. What we've learned over the years about the ones that haven't is that we have to be disciplined in our approach. The example of that would be We had a lineup of five different product formats or lines that we could launch. We had a Thrive line, which was very adaptogen forward and adaptogen oat milk based. We had a functional coffee, think of like Bulletproof, but with some plant protein in it. We had a low sugar smoothie line. We had, you know, we had all these different lines and we showed some of them. And I think during the uncertainty of COVID, people started saying yes to things just to like, bolster their business. Now, shame on us. We should have been more disciplined and not launched everything because back to the point of supporting it, like, you know, I've seen people in our industry or category introduce one new flavor in an entire year. And their Whole Foods around innovation is on that. And I applaud that, right? That's the lesson of learning. I will say there's always some silver linings. And so we initially launched way back, like six years ago. That's way back in our world. we launched our fruit infusion line. It was three flavors. It lasted maybe nine months. We discontinued the line, but what we saw was this shining star of a chocolate banana flavor that we ended up rolling into our protein line. And now it's a top three item for our entire portfolio. We knew early on that keto probably wasn't going to be something that was around forever, but we were going to take advantage of being the first plant-based keto shake on the market. And we did that, and we wrote it out for a while. What we realized with that is that the flavor profiles really helped the keto name did not anymore. And so we let that line go and launched our organic line, which still focuses on those same, you know, decadent flavor profiles. So there's always some like learning and silver lining of it. We launched a 32 ounce multi-serve last year of our best selling flavors, our Cacao Bean and Vanilla Bean. We tested that with sprouts. It was in the top three items in their multi-serve. So We'll be relaunching that. It looks like it could have been something that came and went, but now that we're vertically integrated, we have to figure out how to produce different pack sizes and such. that'll be back out early next year and we'll expand our offerings into maybe different places in the store, different usage occasions and different pack sizes. So I guess to summarize, I would say we're not afraid to fail. I don't think any of the innovation we've done have been a failure because we have learned multiple things from it. Sometimes it's a flavor that works or an item. Sometimes it's what doesn't work. Sometimes it's reinforcing who we are. So the fruit smoothie line, The low sugar smoothie line that we launched maybe what a year and a half or two years ago. We were really excited about it. All the data said that this was needed. The data supported by it should be on the shelf. And then consumers liked it. I mean it's always hard to discontinue innovation because there's always someone who loves it. But what we realized is that's not who we are. And so that lesson helped us center back in who we are, which is delicious plant protein. And if that's not at the core of it, we're not gonna do it.
[00:46:53] Ray Latif: Delicious plant protein, but does one matter more to the other? I guess, what have you learned about your consumers and how they perceive Koya as a functional beverage versus a flavorful beverage? And I know the answer is probably, well, they think of it both ways, but is one more important than the other?
[00:47:11] Chris Hunter: I think the balance is important. So yes, it's always going to be about balance. But for me personally, I think flavor is number one. People will, as much as they say they will, they will not sacrifice taste or flavor for health.
[00:47:25] Ray Latif: I mean, I would 100% agree. Having tasted thousands of beverages in my time here at BevNET, I have never gone back to a beverage that did something for me, but didn't taste good. So I would 100% agree. You know, Chris, it's funny. There was a video on YouTube that made the rounds here at the office a couple of weeks ago, and it was a parody of you actually on Saturday Night Live, where you were being interviewed as the founder of 4LOCO. It was just like 10 years ago. And you know what would be great is if Saturday Night Live did another parody of you as the co-founder of Koya and just showed all the amazing things that you've been doing with the brand. I hope that they can have the, I guess, decency to do something like that. It wasn't terrible, but it wasn't necessarily the most flattering parody of all time either.
[00:48:18] Chris Hunter: Let's call up our contacts over there. Let's make it happen. Would love that. But I look back at that and yeah, of course they were going to make fun of the product and of us for our positioning and statements around it. There's not many products and not many people who get to get spoofed in that setting. And so I'll take it all as a win. I will use for local as an example, though, you know, you said you said there's not many beverages you've gone back to that made you feel a certain way that didn't taste good. And, you know, back at four local, we had ourselves convinced that this tasted really good. And then the reality is like it was good enough because it got the job done. I think of two other prod a lot of credit too becau feel free shot. That was it recently. But I tried t something. It tastes horrib and then the other one is with this ketone Iq, whic phenomenal mentally clear. a line that can be cross a clear enough function,
[00:49:39] Ray Latif: You shared a couple of great examples, but the one that always comes to mind is five hour energy. I mean, you're not, you're not drinking that for refreshment. You're not drinking that for flavor. You're drinking that because you want 150, 200 milligrams of caffeine immediately. Right. So exactly.
[00:49:53] SPEAKER_??: Yeah.
[00:49:54] Ray Latif: Chris, I can't thank you enough for taking the time. I know how busy you are. You're doing some amazing things with Koya. And I really, really appreciate everything that you've shared with us on Taste Radio today. So many great insights that I know are going to be so valuable to our audience. So thank you very much.
[00:50:10] Chris Hunter: Thank you. I always appreciate you and the rest of the Taste Radio and BevNET team. So thanks for all the support.
[00:50:16] Ray Latif: See you at BevNET Live in Marina del Rey. Sounds good. I'll see you there. All right. See you soon. That brings us to the end of this episode of Taste Radio. Thank you so much for listening. Taste Radio is a production of BevNET.com, Incorporated. Our audio engineer for Taste Radio is Joe Cracci. Our technical director is Joshua Pratt, and our video editor is Ryan Galang. Our social marketing manager is Amanda Smerlinski, and our designer is Amanda Huang. Just a reminder, if you like what you hear on Taste Radio, please share the podcast with friends and colleagues. And of course, we would love it if you could review us on the Apple Podcasts app or your listening platform of choice. Check us out on Instagram. Our handle is bevnettasteradio. As always, for questions, comments, ideas for future podcasts, please send us an email to ask at Taste Radio. On behalf of the entire Taste Radio team, thank you for listening, and we'll talk to you next time. you
