[00:00:03] Ray Latif: Hey, this is the BevNET podcast. I'm Ray Latif. I'm here with Jon Landis and John Craven, and we're in the offices of a movie studio. How'd we get here? Well, we're going to ask Danny Stepper, who's our guest on the podcast today. Danny Stepper is the co-founder of LLABations. And Danny, what are we doing here?
[00:00:21] Jon Landis: Greetings. Hello. We are sitting in the offices of Madvine, which is a brand marketing agency that sits inside a movie studio of Relativity. And Madvine effectively markets our brands and other brands to the marketplace.
[00:00:38] Ray Latif: Very cool. And your brands being L.A. Libation brands.
[00:00:43] Jon Landis: Yeah, so LA Libations, and there's a lot of owners of all the brands, but each brand is its own LLC. I think that's one misnomer that everyone thinks that LA Libations owns all the brands. We certainly have an ownership stake in all the brands, but in many cases, You know, there are other owners.
[00:00:59] Ray Latif: And L.L.A. Bations is a brand incubator. You help brands sort of accelerate. Your brands include Aloe Glow, Ariba, a few others. I mean, and the ones that, others that you, that are already sort of part of Coke's system. Coke is a minority investor and L.L.A. Bations as well. That happened early this year. What are some of the other brands that you're working with and, you know, what's really growing in your portfolio at this point?
[00:01:20] Jon Landis: Yeah, so our model is simply this. Our reason to be is to prove concepts. And we're very much aligned with our partners on that. So we are a beverage incubator. We either create our own brands or we partner with entrepreneurs. We met with over 200 entrepreneurs last year. It takes a lot of these guys and gals not too long on the internet to figure out that we're in business with Coke. And none of these people, as it turns out, are looking to build these brands and pass them on to their grandchildren. They all want to sell them. So we play in that very early stage. It may come in as an idea. It may be $1 million in revenue. It may be a little bit larger. And we try to take it to what's truly proof of concept, which we consider roughly around $10 million in revenue.
[00:02:12] John Craven: You met with 200 people last year, entrepreneurs, different brands. What are you looking for?
[00:02:19] Jon Landis: So first of all, I didn't personally, I did a lot, I did a lot of them, I did a lot of them, but between Pat and Dino and Paul and now David, and we're all out there and we're very much by design out there. We take every single meeting. We waste a lot of time, quite frankly, but if you're going to be the emerging beverage category captain at the biggest retailers in the world, they expect you to go out and kiss a lot of frogs and find some princes and, and, and be the subject matter expert. And you can only do that if you're in it, living it.
[00:02:48] Ray Latif: Yeah, so take us through that. So a brand comes to you, you end up partnering with them. What is it that LLA Bations does for these brands?
[00:02:56] Jon Landis: So really the DNA of our company, and we can go back and talk about how and why we started the company, but it really started based on our relationships with retailers, which really started with Dino and Pat and I when we were working at Coke, junior guys at Coke. And then when we regrouped at Icelandic Glacial, that was really eye-opening. So when I left Coke in 2003, and there was no going away party for me when that happened, ironically. But when I left, I was managing Coke's business with Costco. So I was the subject matter expert in Costco, and I knew more than anybody at Coke about Costco. But I didn't know about any other customers, because I was living in Seattle just dealing with Costco. What Icelandic Glacial taught us is when Anheuser-Busch made the investment in it, we basically were charged to go up 550 Anheuser-Busch distributors. And we need to put a do not disturb sign on the door. We opened up 550 AB distributors and 30,000 retail accounts. And we did that. We went too big too fast and all those sorts of things. But we really got to build relationships with all of the retailers. I had never called on Publix before. So you go to Publix and it's either the worst day of your life or the best day of your life, because they either say, great, you're in, or they say, come back and see us next year. We might consider it again. So we started building these relationships with retailers and they saw us as, you know, underdogs. They were rooting for us. We're a little bit different than, you know, a lot of the middle managers at Pepsi and Coke. We have kind of a colorful history in Hollywood, which we leverage, you know, quite frankly, and they like it. A lot of the big retailers have been here. They make it a stop when they're in LA. And so we started building up these relationships with retailers and we had an idea. So when I was at Coke managing the Costco business, we got this edict down that we needed to be the carbonated soft drink category captain at every major retailer. So my boss was like, you got to go become the carbonated soft drink category captain at Costco. And I'm like, good luck. So I basically went in to Costco and begged Mr. Craig Jelnik, can I be your category captain for carbonated soft drinks? And he goes, Stepper, we don't even buy categories. We buy items. No, that's ridiculous. And I'm like, Craig, I really need this one, please. And he's like, fine, you got it. Whatever that means, get out of my office. Just trying to get rid of me and then of course I sent an email and got all kinds of accolades that we were now that So as we're building these relationships, I'll never forget. We were in our warehouse in Arcadia could barely make payroll and There's like seven of us in the company at the time And we're just trying to find our way and I told everyone like we're gonna become the emerging beverage category captain
[00:05:44] Ray Latif: At what point in this was, what year was this for Elevations?
[00:05:47] Jon Landis: This is early days. So I think I first went on Fox News with Mary Ellen Adcock from Kroger, where she said we're their category captain, which was a big day for us. I think that was four and a half years ago.
[00:06:01] Ray Latif: Okay.
[00:06:02] Jon Landis: And it's really interesting how that whole thing started, because I was at the Ralphs in Manhattan Beach by my house, and I was talking to Mike Quinones, who's a district manager for Ralphs. Great guy. I used to beg him for displays when I was 25 years old, you know, when he was a grocery manager. And now he's a big district manager there. And we're sitting outside the store, and this beautiful woman comes walking out of the store with her grocery cart. And he hits me, and he's like, look at that woman. And I'm so messed up in the head, I say, look what she's drinking. And she was drinking a G.T. Daves kombucha, which they didn't sell in Ralph's. But across the street, across Rosecrans at Whole Foods, they did sell it. And I said, this is crazy, man. This is completely nuts. It's the same consumer that's shopping in these stores, and their habits are changing. So that led me up to Cincinnati, and we got the attention of Mary Ellen Adcock, who was the head of natural at Kroger at the time. She's now been promoted quite a few times since then. She's very senior there. And we said, we just basically said, look, people are changing with their habits. And we basically said the same thing that everybody says, you know, when Coke did that big study and put it on their website, that 40% of the growth is coming from brands and categories that didn't exist five years ago. So if you're a buyer in Cincinnati or Bentonville, Arkansas, you're like, duh, let's buy all the new stuff. The problem is there's a 97% infant mortality rate with these new ideas, so your better odds going to Vegas. How do you know what to bring in? So, you know, we make a point to show the retailers what's trending, what's happening, and we just immersed ourselves in that world kind of at the right time, kind of right as BevNET was blowing up, right as all that was happening, we were positioning ourselves as the emerging beverage guys. The problem was we couldn't make any money at it because we're a broker, basically. And, you know, with the emphasis on broke, because we couldn't make any money. Because when you're making commissions on emerging brands by design, they're tiny. And therefore the commissions are tiny. So we had to keep tweaking our business model. And we started building a reputation in the trade. And Anheuser-Busch called the Nice Street Beverage guys, who remembered us from Icelandic Glacial. And they said, can you be our non-alcoholic broker? Which sounded really sexy and great, because it's Anheuser-Busch. The problem was they had brands like Borba and 180. And we tried with Margaritaville. But it did give us some credibility at that point. But the big moment was, and it's a thread throughout my entire life, is Coke came and saw an opportunity. And it was with Illy, specifically. They were trying to incubate outside the Coke system for the first time, and they needed some help in LA. and wrote a terrible deal for us, but for us it was so huge and it was a coming out party. In fact, the day we started LA Libations, Dino and I flew to Atlanta and we snuck into the lobby, the little VIP lounge. We didn't have any meetings. And we just started calling people. And I called a guy called Clyde Tuggle, who I had a crazy week in Moscow with when I was making movies. And Clyde said, you got to go meet with Derek Van Rensburg. So we walked into Derek Van Rensburg.
[00:09:19] Ray Latif: Who was the president of VEB. He was the president of VEB. Venturing and Emerging Branch, which is the incubation unit of Coke.
[00:09:25] Jon Landis: Exactly. So we told Derek, we wanted to start a beverage company. This is literally the first day of the company. And he's like, what's your big idea? And we said, we kind of looked at each other and we said, we want Barks root beer in a glass bottle. And he goes, what? And I said, yeah. I said, there's eight feet in every grocery store in America that is not a DSD business. And things like IBC, I mean, it's like a direct business. Give us that. We could build a big business. And he looked at us like we were completely crazy. He said, look, thanks for your business cards that you clearly made at Kinko's this morning. We'll keep it. If we need your help, we'll give you a call. And so we just went out and disappointed and rejected and just started building the business. Six months later, Derek called. And it was a very different Derek. It was actually Matt Hughes called and said, hey, you know, we're struggling with Illy in LA. And so we instantly got involved. And that's where my third relationship with the Coca-Cola Co started. The first one being when I started there. I started there as a merchandiser. So did Dino, so did Pat. We wore uniforms. I drove a dented Dr. Pepper truck that didn't have air conditioning. And they put me in Pacoima because they thought I was Mexican, even though I'm Italian. And, uh, true story. And literally, we met the truck at the back of the store at 5 in the morning, filled the shelves, spun the cans, did all that, worked there for nine years, and had a great run. But they made the mistake of putting me through graduate school. And that's my first time to kind of breathe, because when I got out of college, I was scared to death. I had a bunch of college debt. And my plan was to find the biggest company that I could find and work my way up. And that either meant in LA you go work in the mailroom at one of the studios, or somehow I found an ad for Coca-Cola merchandiser, and so I chose that route. But when I was at graduate school, it was my first chance to breathe, and I realized You know, this has been great, but you know, I'm frustrated. I'm starting to get to be really rough on the furniture. I'm an entrepreneur. People still have a ton of stories. When I see people in Atlanta that were there back then, and some of the stuff that I was trying to do with the Costco business, when I told them I was leaving, they were like, thank you. Like, good luck.
[00:11:42] Ray Latif: There's a lot of former Coke employees in the beverage business. I mean, Coke is clearly the biggest beverage company in the world, and so there's a lot of folks that have come through that company. I mean, Rohan Oza is a good example of that guy. It sounds like a kind of a similar story where, you know, he wants to do things that the organization wouldn't let him do. And it sounds like your kind of career path has been taking you to the ideal position that you're in right now, which is trying to evolve constantly, trying to find what is the next big thing and make it even bigger. And it sounds like that's kind of where LA Libations is at this point. especially now that you have the kind of backing that Coke is giving you with their investment. And you know, you've invested in some pretty interesting concepts at this point. I mean, you've invested in a bone broth company. getting back to like, you know, your story and, and how LA Libations kind of like works as a category captain as sort of a table captain. What does that actually mean? I mean, like, what do you, what do you guys do inside these places, inside of Costco, inside of Kroger that can actually really benefit that retailer and benefit the category overall?
[00:12:48] Jon Landis: Yeah, so it's not like a traditional category captainship. Like, you know, if Coke is the category captain at Safeway, for example, they have people in-house crunching numbers, all that. We don't do that. What we do is basically have quarterly taste tomorrow meetings where they're starting to get really large now because they're super fun meetings. So like at Walmart, like 30 people show up for this taste tomorrow meeting. And basically we just show them that crazy people in LA are drinking activated charcoal water and just all the crazy tip-of-the-spear stuff that you guys all know very well. I mean, they're sitting in Bentonville. They don't have their finger on the pulse. They're managing billions of dollars of sales and trying to make those decisions. They don't have time to go look at these little ideas, but that's where the growth is. So we do that and then we make recommendations. And usually those recommendations aren't our own brands. They're brands that we don't have no relationships with. Like, you know, when I see Ken Kurtz at trade shows and stuff, he often says, thank you. Because in the early days of buy, we said, this is a good brand. Like, we don't have any relationship with the company. We have no financial anything with them, but we think this is a winner. And we opened a lot of doors for that brand.
[00:13:55] Ray Latif: Buy is on its way for sure.
[00:13:56] Jon Landis: Looks like it. But don't sleep on core.
[00:13:59] Ray Latif: Oh yeah?
[00:14:00] Jon Landis: Don't sleep on core, yeah.
[00:14:01] Ray Latif: Okay. Well, we'll talk about your relationship with the core in a little bit. But as far as some of the other brands that you guys are working with right now, so Brew Broth, you most recently sat invested with. It's a bone broth and juice blend that is sold ready to serve, ready to heat? Is that what it is?
[00:14:17] Jon Landis: Ready to heat and drink.
[00:14:18] Ray Latif: Ready to heat and drink, yeah.
[00:14:19] Jon Landis: Two great entrepreneurs. So I think like Brew and Obi are two really good examples of brands that with great entrepreneurs.
[00:14:29] Ray Latif: Obi being a probiotic sparkling drink.
[00:14:31] Jon Landis: Obi probiotic soda, which I'm really excited about. But in both those two cases, there are four great entrepreneurs, you know, David and Ben at Obi and Suha and Marya at Brew came to us and, you know, like a lot of entrepreneurs do, and said, you know, how could we work together? In both instances, we've developed a pretty good capability for creating our own brands. We'd prefer to create our own brands. But I didn't know where to start with bone broth, which is trending. I mean, when I look at bone broth, it reminds me of the early days of Zico, when we were working on Zico, where the press, especially here in LA, was outkicking the coverage of the actual sales, right? Everyone's like, coconut water, coconut water, coconut water. And you look at the sales, no one's buying it. But as we watch with coconut water, pretty soon that catches up. And that's what we believe is going to happen with brew. And we looked at the bone broths out there, and we said, this is the best mousetrap. I mean, this is the best one we've seen. And we had no desire to go figure out how to do that on our own. And then Obi's another one. I mean, what Ben created with David at Obi is a really special thing. I mean, that brand's got a lot of legs. And Ben was just immersed in that world for so many years. And I believe he is the subject matter expert when it comes to water kefir. We helped commercialize that with them. I mean, it was basically, I'll never forget, I first met David Lester at Shade in Manhattan Beach, and it was a benchtop sample and an idea. There was no trademark, there was no nothing. So we worked closely with them, and now it's getting real, real traction in the marketplace. And we look at that, like everything, we look at Obie as kombucha for the rest of us, right? We don't believe that kombucha is gonna be a big idea in a 7-Eleven or a Walmart in Iowa, ever. It's just too polarizing of a taste profile and mouthfeel. So just like we don't think a lot of Americans are going to want to drink aloe with pulp. So we're about taking these emerging trends and really mainstreaming them. You know, everybody asks us, well, you got all these great relationships. How come your stuff's not in Whole Foods? And the reality is the whole world is doing it now and doing it very well. I mean, Costco is an incredible organic retailer. Walmart, I mean, what Zach and Ashley have done at Walmart with the organic stuff, following the trends and not, I mean, they're still selling deep fried Twinkies, believe it. But they are, I mean, just the brands that they're bringing in and the adventure that they're taking, it just shows you the focus of the world, of that competitive advantage of natural and organic wasn't sustainable because everybody's doing it now.
[00:17:12] recently sat: Right. Well, then there's a lot more volume to be had at those big retailers than Whole Foods, plain and simple, right?
[00:17:17] Jon Landis: Yeah. Whole Foods, I mean, I love that place. My wife shops there. I don't like the bill she spends paying, but it's great. But at the end of the day, it's 400 grocery stores.
[00:17:28] Ray Latif: Right. Right.
[00:17:30] John Craven: But you touch upon like two separate things when you talked about brew and OB, which is the mainstreaming a trend and then also investing in a leader. So is it really like 50 50 or does one take precedent over the other?
[00:17:46] Jon Landis: So the entrepreneur is the most important thing. I mean, to be honest, like you see great brands that have bad entrepreneurs and they're dead on arrival. You see great entrepreneurs with pretty good, decent brands that can work. So, and it's the full picture. It's also, you know, are they opening to our suggestions? Do they have capital? Do they need capital? Are they willing to give up some equity and make some of those hard decisions when they need to? You know, and also their vision. I mean, Mark Rampolla as Zico, we laugh about it all the time, but we had this really, I guess we'll call it healthy tension, where I wanted to go faster with Zico. Like, you know, I want like, let's put it in Walmart, let's put it in these places. And he was very, methodical and strategic about how fast we went. And it turned out to be a really smart decision and got him to the promised land.
[00:18:42] Ray Latif: Yeah. You touched on Algalo. Algalo is a beverage that you guys created and you launched. It's still pretty much your baby.
[00:18:49] Jon Landis: Yeah.
[00:18:49] Ray Latif: Well, you have that in the Coca-Cola Co now. That was a big step for you guys. I mean, the Coca-Cola Co a minority investment in the company. Was it in June?
[00:18:58] Jon Landis: No, no, when they bought, well, they just invested in Aliglo in June. But they invested in Ali Libations. What's the date on that, BevNET Magazine? It's right around the same time that you guys called us the alpha dogs. That was like the biggest month of our lives. We were on the cover of BevNET as the alpha dogs, and Coke invested in our company.
[00:19:18] Ray Latif: Right, so Coke was already a minority investor and bailed out patients.
[00:19:20] Jon Landis: We could still barely make payroll, but man, we felt like we were on top of the world.
[00:19:24] Ray Latif: So indirectly with Aliglo, but then recently sat year, they bought a specific investment in Aliglo.
[00:19:29] Jon Landis: Yeah, and I don't want to get too into Koch's strategy. It's a mutual strategy. We're very in lockstep on how we do it. I don't want to reveal a lot of that. But basically, they invested in us as people, I think. I mean, I love that company to death. They gave me my first job ever. They supported me on four of the seven movies that I made. And now they've invested in two companies. It's amazing. And it's the people. And when I left the industry to make movies, I didn't miss Coke necessarily, but I missed the people at Coke. I really missed it. And that's why I think I've got the best job in the world right now, because I'm not a Coke employee, but I'm in it with them. I'm invited to all the meetings and all that. And it's really a great place to be. And they've really honored their word. So when they first invested in us, I'll never forget Jack Sinclair, who's the head of all food at Walmart. He's no longer there, he now runs the 99 Cent stores, but he's a good buddy. And he said, look, I told him, this is great news, Coke's going to invest in us. And he goes, you cannot turn into Coke. Do not let them turn you into Coke, because then you have no value to me anymore. I already have Coke. I need you doing what you're doing. And so when we were negotiating the deal, we communicated to Koch that that was a fear. I mean, it was a lifelong dream to be an employee there and then to go have them invest in your company. It was one of the greatest days of my professional life, for sure. You know, we told Matthew Mitchell and Scott Uzell and Derek Van Rensburg, we told them that. And they said, we're not investing in you to be us. We're good. We are us. Go be you. Go do what you do. And they give us a pretty long leash. It's actually gotten longer. I remember when they first invested, Scott would call me and was like, all right, reel it in. You're too far out there. I'll probably get that call after this podcast, actually. But now they're rooting for us. And I think a lot of that is because Matthew Mitchell really laid out a strategy for why we did this. He kind of inherited us. and kind of hit the reset button when he came out. And it really orchestrated a strategy that we are completely and 100% aligned to. And we still get out there. And I still get phone calls. And they say, oh, why did you do that podcast or whatever? But for the most part, it's just a really great partnership. And there's no victory laps yet by any stretch. We have a long way to go. But them investing in Alloglow was a huge one. I remember that when we told him we were starting Alloglow, Scott Uzell said, this could be the end of our relationship because now you're a brand owner and you're a competitor. And it was a big risk for us to do that because really all we had was Coke at that time. But we, Dino and Pat and I, we held hands and we said, let's do it. Let's be entrepreneurs. That's what we do. And we were able to navigate all that. Now we're completely aligned and we're on Coke trucks. I mean, it's amazing.
[00:22:23] Ray Latif: So Elo, tell us about what's going on with that category.
[00:22:26] Jon Landis: Yeah, so I think it's important to figure out why we started the brand. Because when we saw Mark getting rich and- Mark Rampolla. Yeah. On the back of LLABations. No, look. I mean, we deserve a little bit of credit, but not that much. But he did it. But by nature of what we do, when we got Zico into Walmart, It made the bottling system have to decide, do we want this on Coke trucks or not? And when they said yes, that had a huge impact on the timing of all the things that Mark had spent years and years way before he met us doing. So we did play a role, but I don't want to over-rotate and take too much credit for Vizico, of course. They had a whole company doing that stuff. But when we saw that was happening and that we were creating some value and we weren't getting that value that we were creating back, we said, of course. If you're Tom Cruise's agent, it's great until he walks down the hall and finds a new agent, and then you've got nothing. And that's kind of how we felt with our brands. They could easily come and go. And by design, once they get big enough, they want to get rid of us anyway because they want their own company. It's cheaper to do it that way. So we said, we want to create a brand. But what is our first one going to be? What space are we going to play in? Which is pretty dumb, right? Because we all know you can't just create a brand to make money. There needs to be some authenticity, some reason. But we didn't have that authenticity. We didn't have that reason. So we were just going to find a good space. Well, the opposite happened. I was surfing, and my surfboard hit me in the head and cut my head open. You can still see the scar a little bit. I remember that. Yeah.
[00:23:57] Ray Latif: Yeah. It was pretty brutal.
[00:23:59] Jon Landis: It was gnarly. So the guy was stitching me up, and I said, hey, can you make me not look like Frankenstein? My wife's got to look at me the rest of my life, I hope. And he goes, sure. He goes, you definitely need to use aloe vera. I said, of course. Where do I buy aloe vera? And he goes, go to Whole Foods. They sell full leaves of aloe vera. That's the real stuff. He's like, get the inner fillet and rub it on your forehead. And I'm like, OK. And then I'm walking out, and he goes, and you should also drink it. And literally, the needle hit the record. I'm like, what? I'm like a beverage guy. What are you talking about? He said, the same thing that aloe vera does from the outside in. By the way, I'm not claiming this. Aloe Glow's not claiming this. This doctor claimed this. The same thing that aloe vera does from the outside in, it does from the inside out. I went straight to Whole Foods with a bandage on my head, and I looked at all this stuff that's out there. Believe it or not, I used to be a lot fatter than I am now, and I'm reading the labels.
[00:24:57] Ray Latif: You look wonderful, Danny. Thank you. Our podcast viewers can't see it right now, but I'm assuring our audience, Danny, you're a good-looking guy who doesn't have to worry about anything.
[00:25:06] recently sat: He's the nicest-dressed guy in the room, that's for sure.
[00:25:08] Ray Latif: Absolutely.
[00:25:08] recently sat: Very spelt. He's got the pocket square and everything.
[00:25:10] Jon Landis: That bar's pretty low, guys. I'm glowing from within is what's going on. There it is.
[00:25:15] Ray Latif: Always on brand. Well done.
[00:25:17] Jon Landis: Yeah. So, so I went to Whole Foods and I started, sure enough, you know, all the, all the brands from Asia were there and they're all in the same green bottle. And I look at the calories and the sugar. I mean, there was 46 grams of sugar in one of these bottles. And I was like, I am not doing that. So I literally called Dino and Pat and said, this is what we're going to do. We're going to play in this space. And we just became obsessed with Aloe Vera. It's like all we think about. We almost submarine the rest of our business because we were just obsessed with it. Dino's running to Mexico and meeting with farmers. You know, we're meeting with food scientists, and it turns out selling beverages is a lot easier than making them. And we had never learned that. And we were pretty good at selling them, but we made every single mistake that every entrepreneur makes. We picked the wrong bottle, we had mold, we had, you know, all the things that happened to every entrepreneur happened to us. It was very humbling, because we like to think that we're smarter than everybody, but we clearly are not. We changed the bottle five times, but it's a true family affair. I mean, like my wife named the brand. My sister did the packaging, which is good. We're going to do a refresh, I think, here soon. I think Dino's making that decision to do a refresh, which I think is a good call, but it's gotten us to here. I know Algalo is sold nationally at this point. Yeah, so I don't really want to get into our strategy, but yeah, we started in LA, but we put it everywhere in LA. Every channel, you could find it everywhere. You could find it at 7-Eleven, you could find it at Ralph's, you could find it at Vons. And we did that all through DSD, through our partner, Tony Haralambos, where we incubate a lot of our brands. And we have six guys that start their day there every day at Haralambos. And because we believe, that if you win in LA, there's a very good shot that you can win everywhere. Whereas New York, great influencer market, you can win in New York, it doesn't necessarily mean you're going to win everywhere. And you can lose in New York, by the way, it doesn't mean you're going to lose everywhere. But LA, because every major retailer has a footprint here, you can see it extending. And that's what happened with Aloe Glow. So we started at Ralph's, and then other Kroger banners started seeing the numbers, and we get incoming calls, and we make the decision to go, and then we ask the retailer to switch Swiss cheese it, which is never easy, right? Because we want to stay DSD and Southern Cal, but we want to be direct everywhere else. We don't have the resources and the money to go everywhere else and do that. So that's really kind of how we built the brand and we just went a mile deep in LA. We did the opposite of what we did with Icelandic Glacial. It's worked out pretty well and it's been slow and it's taken a lot of self-control for us because we know we can put it on the shelves a lot faster in a lot more places. we've learned our lessons in the past. We broke our own rule with Ariba, all right? And we launched Ariba on the front door of 8,000 7-Elevens.
[00:28:02] Ray Latif: A horchata energy drink.
[00:28:03] Jon Landis: Yeah, it's a horchata energy drink. Yeah. So we outsmarted ourselves. We broke our own rule because 7-Eleven, as you know, at 7-Eleven, you have to sell things a couple times, right? You have to sell it at headquarters where we're really good. We have really strong relationships there. But then you also have, the franchisee still has a lot of decision power to make. And so we figured out, Actually, I don't know if I should say this, but I got my hands on a franchisee agreement, and I read it, and the one thing they have to do is put the POS kit up in the store. And so we said, that's what we're gonna do. We're gonna launch the brand on the front door on a door strike. And we talked Dallas into letting us do that. And you have to be kind of a dumb franchisee to have two for four Arriba horchata on your front door and not have it in your store, right? So we drove 100% distribution. But we made a huge mistake. We went in the energy door, right, which is completely DSD. And as soon as that door strip came off 30 days later, I mean, we just got crushed, you know, so we went boom splat. So we're retrenching with that brand. We actually hired my first boss from Coke that hired me at Coke, Robert Macias, and he's living that brand. And we're really winning in the 400. We're not even going to Ralphs and Vons with it. We're winning in Vallarta, Northgate, all the Latino places. And the VPOs are awesome. I mean, it's still small overall because the universe of stores is small, but we're getting really good proof points. That's giving us a lot of confidence to start expanding it.
[00:29:31] Ray Latif: Right. We're very, very close to being out of time, but I do want to ask you one quick question. You mentioned a few different times now. You were a movie producer right after you left Coke. You know, what kind of parallels do you see between making movies and being in the beverage business and being an entrepreneur?
[00:29:46] Jon Landis: So I will tell you. that everybody in the movie business wants to be in the beverage business. And most people that are in the beverage business wouldn't mind being in the movie business. It's very funny. But there's something that's really, really happening here. And I think Red Bull is the tip of the spear for it. I mean, Red Bull is a studio, right? And brands have realized, and it's really the existence of Madvine and what Madvine is all about. Brands have realized that the age of interrupting content to talk about your brand to consumers, it's over. It's sunsetting because we now have control as consumers to zap right through. So those budgets aren't going anywhere. They still have to connect with consumers. So the only other solution is to become part of the content. And so that was my first foray. When I left Coke and I moved to Europe to make Goal, that was financed by Adidas and Coke. So that world is definitely coming in. I mean, the idea of brands becoming publishers and content creators, we like to think we're at the tip of the spear of that. So we merged the two worlds, and it's obviously where we're sitting here today. It's why we're here.
[00:30:59] John Craven: Do you feel because obviously smaller brands don't have the resources to do a lot of that content creation? But they might have some capital to do some sponsorships or anything like that. Do you feel like that is comparable in any way to you know,
[00:31:13] Jon Landis: You can create content. You can make content for a price. I mean, the stuff that's being created on iPhones is amazing, right? And if you can get something to go viral, it's free marketing. It's the biggest conundrum for small brands is marketing, right? So you just don't have the capital. And even if you do have the capital, To spend money on marketing is stupid if you're telling people to go to the stores and the brand's not in the stores yet. So it's this great chicken and egg that you have to do. Now what we, the path we chose is, and by the way, the chicken and eggs in producing a movie and making a beverage are, they're both crazy. Like for example, If you go to a distributor to get your product, the distributors say, great, where am I going to put it? Go find some retailers that I can deliver to. So you go to the retailers and you say, all right. And if you're lucky enough that they want it, they're going to say, how are you going to get it here? So you have to break through that chicken and egg. And how we do it is through the retailers. It's always been the DNA of our company. is we go get the retailers. And we have a good enough relationship now that the retailers will give us a hunting license to go get distributors. And that's been really important for us as we've grown the company.
[00:32:23] Ray Latif: All right. We've gotten to the end of our podcast, unfortunately. But Danny, really great talking to you. And I really appreciate the time. Learned a lot. Learning quite a bit. By the way, I didn't mention, great office.
[00:32:36] Jon Landis: Thank you.
[00:32:36] Ray Latif: It's not enough that you're in Beverly Hills. You've got a pinball machine in your office. Well done.
[00:32:40] Jon Landis: It's pretty fun. No, we really appreciate you guys. You guys have obviously great for the industry. You don't write things too bad about us, at least not yet. But you're really an asset to the industry. So I appreciate that you guys even care to listen. Thanks to say that.
[00:32:53] Ray Latif: Thank you so much. All right. Thanks so much for listening and hear from us next time. All right.
