[00:00:03] Ray Latif: Hey, thanks for listening to the BevNET podcast. I'm Ray Latif. I'm here with John Craven and Jon Landis. Thank you so much for listening.
[00:00:09] John Craven: Thanks.
[00:00:10] Ray Latif: So a bit about the BevNET podcast. If this is your first time listening, welcome and thanks so much for joining us. The podcast is sort of a weekly thing that we do that explores current trends and news from the food and beverage industries and features discussions with us, the BevNET team, as well as interviews with entrepreneurs and a range of industry experts. So yeah, that's what we do here. If you have any ideas on what kind of things we should cover in the future, we do have an email address for you to send those kinds of things.
[00:00:40] John Craven: Putting that at the beginning instead of the end, just because, well, who knows if you'll get there.
[00:00:44] Ray Latif: And, you know, sort of because this is a new way of doing things. We're going to change up the format of the podcast a little bit. Don't worry. We're not going to tweak it too, too much for those of you who love the podcast. But for those of you who have been sending us hate mail, hopefully this will change up, you know, your feelings on what we do. No one's been sending us hate mail. Please don't send us hate mail if you hurt my feelings and Jon Landis might start crying. No, I can handle it. Okay, well, good. Yeah, so, you know, we have a few different, you know, individual segments that we're going to try out. Jon Landis is going to be leading one. This is a thing called, why is it a thing? We're also going to be doing something a little different as it relates to what we're drinking this week. But, you know, we're going to continue the main thrust of what we do, which is, you know, interviewing interesting folks and talking about interesting topics that are really relevant to the world of food and beverages, more specifically beverages right now. So what we do here? Last week, John Craven and I went and visited the a new startup in the Boston area, which produces a smart water cooler designed for offices. That company is called Bevi, B-E-V-I, and they're located in the Dorchester neighborhood of Boston, sort of in the cross between innovation and industrial district of that area, of that neighborhood.
[00:02:00] John Craven: Yeah, it's I mean, it's interesting just going to a place where they're developing hardware. I think that that more so than honestly, the water cooler aspect of it is what kind of drew us into it. And you know, they basically are a company that's building technology to have a fully connected water cooler that creates customizable products. So sort of to put it into perspective, think like a way, way fancier, like SodaStream that's also way, way easier to use all the way down to like, they know how much you're consuming and they send out the service guy and refills and all that. So like, you don't have to do anything. You know, it's a pretty impressive looking device. So kind of made sense to go make the trek over and visit a local company to see what they were doing.
[00:02:44] Ray Latif: Yeah, and one interesting thing they're doing is partnering with some beverage brands to include those kinds of products in their machine, a la the Coke, what am I blanking on? Freestyle. Yeah, a la the Coke Freestyle. Anyway, without further ado, I'm going to stop talking about it because we're talking about it a lot in the next segment.
[00:03:01] John Craven: You're going to give away the interview. I'm going to give away the interview. Let's roll the interview.
[00:03:03] Ray Latif: Yeah, let's roll the interview. All right, we're at the offices of Bevy with CEO and co-founder Sean Grundy. Sean, thanks so much for having us. Thanks for coming over. So Bevy is a pretty interesting new, well, not necessarily new, but a pretty interesting concept where it dispenses different flavored and sparkling and sweetened waters and drinks. sort of akin to the freestyle machine that Coke produces, and you guys are based here in Boston, sort of the nerve center for the company. For those of our listeners who are not familiar with Bevvy, can you kind of give us an overview? Sure.
[00:03:37] Jon Landis: Bevvy creates sparkling and flavored water machines for offices, and these days actually for offices, hotels, and gyms. Our product filters tap water And then through a touchscreen interface lets people get regular water, sparkling water, or a variety of fruit-infused waters, flavored seltzers, and similar drinks. We were started three and a half years ago. I started the company with two friends of mine, really with initially an environmental goal rather than a business goal. We weren't your typical beverage entrepreneurs who were passionate about kind of the beverage industry per se. We were very passionate about reducing environmental waste and finding ways to eliminate what we viewed as kind of the needless use of disposable plastic bottles. And initially we were focused just on water and we thought if we could create a really good point of use water machine with a good purification system and design it correctly, then we could get people to stop buying water in plastic bottles. That was the initial goal. And we realized that that very quickly and kind of easily translated to a much broader variety of beverages. Your typical soda is really maybe 10% concentrate, 90% water, and we realized it would be much more efficient to just transport that concentrate and then mix it with purified water at the point of use than it would be to mix it in a plant, put it in a container, and then truck that container. It's a pretty simple concept, but we think we executed on it better than competitors.
[00:05:10] Ray Latif: Yeah, it's a pretty innovative, intuitive machine. Again, for those of you who are trying to imagine what this looks like, you know, we'll have links on the website. It does look a little bit like the Coke Freestyle machine. It has an interface where you can choose from five different options. The ones we tried today at the office, you had a coconut flavor. Blueberry cucumber. Blueberry cucumber. Lemon lime. Lemon lime. Some were sweetened, some were not sweetened. Some were sweetened with stevia, some were sweetened with sugar. And then there were also just still water and sparkling water options as well.
[00:05:38] Jon Landis: Exactly. And actually at most of our customer sites, more just plain still and sparkling water gets dispensed than all the flavor drinks combined. Interesting. So at most of our sites, it's something like 60% just still in sparkling water, which to me actually makes sense because basically we're dealing with repeat users who are using these machines every single day they're at work. And the typical behavior we see is someone will drink maybe two to three cups of regular water a day and then one cup of something else, like one cup of a flavor drink.
[00:06:07] John Craven: And it's also pretty neat. You've got kind of a touch screen on the front where you can customize the flavor or strength of the flavor as well as still or sparkling. I guess. Do you see sort of any difference of use or use trends on those particular things?
[00:06:23] Jon Landis: What we found so far so yeah right now we let people select their flavor strength so kind of varying from having like just a hint of lemon to say like a pretty strong lemon taste in the drink. What we tend to see is that people turn off the flavor as much as possible. It's actually kind of interesting like like we tend to see that most people prefer the strong drink Although at the same time, it really does vary so much person to person, which kind of justifies the reason for having that slider where you can choose your flavor strength. Because we also meet a lot of people who, for example, want to drink more water. Like they have this goal of being hydrated and know they're supposed to drink a few glasses of water a day, but just hate water or find it really boring. Those users will often pick the lightest setting because they just kind of want some mild flavor to like distract them from the fact that it's water and make it tolerable for them. That's pretty normal as well. And actually we're moving toward, well, I don't have a specific date yet, but we're moving toward variable carbonation too. Like the same way you can set your flavor strength, we want to do that with carbonation strength. Because we noticed that people are just extremely particular. And if we do like a survey at a customer site, and we ask questions of like, is the flavor just right, too weak or too strong? Or like, is the carbonation just right, too weak or too strong? You could survey 50 people and get 15, 15, and 20 answering for each category. So people are just very particular.
[00:07:47] Ray Latif: That's a really good idea because I'm really sensitive to carbonation. I think we just had a drink in the office before I got here and I was saying, this is not as carbonated as I want it to be. Can I make a suggestion on what to call the carbonated? Oh, yeah. How about burp factor? That's awesome. I'll expect a check in the mail, I'm sure.
[00:08:03] John Craven: This is why you do the podcast and you're not a marketing guy, right?
[00:08:07] Jon Landis: It's funny, like we actually have it mocked up because we always have mock ups of kind of upcoming features. And we've been, we've actually been like playing around with language of what we're going to call it. Cause like some people view it as like bubble size. Like we meet a lot of people who will tell us either like, I like really light bubbles, like Perrier or San Pellegrino, or I like really strong bubbles, like polar seltzer. But yeah, we've, we've been playing around with that language and it's a little bit awkward. So yeah, I kind of like it. Okay, well, there you go. There you go. Maybe I do have a good remarking, John. Okay, never mind. I retract that. I feel like our tech customers, like the tech companies might like it.
[00:08:39] Ray Latif: Yeah. As far as, you know, you mentioned a couple of the flavors that are included with every machine. I mean, you've got a wide range of options and only five per machine at any given time. Yeah, really four per machine plus water.
[00:08:52] Jon Landis: So five options, yeah.
[00:08:53] Ray Latif: So, you know, what are some of the other flavors and how many do you actually have? And, you know, what are some of the ones that are, you know, standing out among consumers at this point?
[00:09:01] Jon Landis: So you tried coconut, which is, I think it's the newest one. And that one's been very polarizing. Our customers more often compare it to like bias coconut water or coconut flavored water. Like we get a lot of comparisons to that. That one's been super polarizing. Like some people love it and tell us that it's their favorite. Others tell us they wish it were more like a Zico or a Via Cocoa or something like that. So that one's been really polarizing. Blueberry cucumber has been super popular. That's been a really big one. Our most popular is honestly just old fashioned unsweetened lemon. Like we have a completely unsweetened lemon flavor that it's pretty much as simple as you can get. It tastes a lot just like putting a slice of lemon in your water.
[00:09:41] John Craven: It's like the classic flavored water flavor for sure.
[00:09:44] Jon Landis: And that's our most popular across all sites. And then I do know we have some interesting ones in the works, like we have a grapefruit in the works, which sounds awesome.
[00:09:53] Ray Latif: Yeah. Talking about the flavors and, you know, talking about some of the partnerships you have, I want to get to that in a second. But, you know, you're talking about some of the most popular flavors that you have and, you know, who drinks what, because you get all that information. Yeah. They're all Wi-Fi connected and you get real time information, what people are drinking and how much you're drinking, et cetera.
[00:10:11] Jon Landis: Yeah, we're collecting really a massive amount of information. So all our machines are internet connected. They're all reporting back information every five seconds to this central console that we have. We capture a lot. We capture literally every touch to the touchscreen. So we know how people are customizing their drinks. You know, we can look at say we want to look at unsweetened lemons performance, we can look at that in hundreds of machines and see how it does versus other options. So say we're choosing between like two concentrate manufacturers, like say we're choosing between two flavor developers, we could basically put one version of a flavor in 200 machines, put another version of that flavor in 200 machines, and then we could just compare and kind of see how well they do. or even put two flavors side by side and see what's more popular. So it's really helpful for making decisions. It's really helpful for deciding in a fast way how well could this flavor do. And actually, one of our goals is to get to the point where working with a new beverage company or working with a flavor manufacturer, you typically start with some kind of sample. We'll typically start with a sample of maybe 30 containers of concentrate that would let us serve, say, 30 machines for about a month. And then you'd have to commit, you know, you could get that sample. And then if you liked it, you'd have to commit to a pretty large minimum order quantity. Or if you didn't like it, you'd have to like bail on it. And one of the goals we're working towards, we can already do it a little bit, but we could get a lot better, is being able from that initial sample to make a really quick decision. you know, do we commit and really like produce a lot of this or do we tweak it or, or do we cut it entirely? And when I think long-term about what one of our advantages will be versus say traditional beverage companies, it's really that real-time access to data, like that ability to decide really quickly, this is working well, this isn't, or even like this is working well in certain regions of the country or in certain demographics of users. And you can do that to some extent in traditional retail with bottled beverages, but I think it's a lot harder. Like with us, it's a lot faster and easier.
[00:12:21] John Craven: And can you talk a little bit just about the actual, you know, business model and sort of the size of, I guess, how many of these are installed right now?
[00:12:30] Jon Landis: Yeah, sure. So we have over 500 installed right now. That was last month. So I don't have, I don't have this month's numbers, but, um, we're in. Got to be like 400 companies. I was going to say, don't quote me, but I'm on there. So I'm quoting myself, but I would have to check the precise numbers like thereabouts. The business model is we lease the machines to offices and we then sell the concentrates and we actually do two different business models. So it's a little, it's a little complicated. In the simplest and what's becoming the most common business model, we lease the machines for, depending on the size of the office, around $300 a month. We'll lease the unit, and that'll come with sparkling water and with all filter changes, which again, all of that is done proactively. That's also really the huge benefit of being internet connected is we can show up proactively. We know exactly when it's time to change a filter. We know exactly when it's time to change a CO2 tank, and we do that. And then on top of that base machine lease, which comes with water and sparkling water, we'll sell concentrates and concentrates for all the different flavored drinks at a typical office. Kind of average would be around a hundred, $150 a month. That's what it would cost you. So like safe approximation of how much Bevy would cost the company would be like. you know, $400 to $500 a month, but the range goes more like $325 to maybe even $700. Like the range is a bit broader depending on how many people. We have sites like we're in some big corporate cafeterias on the West Coast where each machine is serving like 700 or 800 drinks a day. And then we have sites, you know, that are like 15 person offices where we serve maybe like 20 drinks a day. So big variance.
[00:14:14] Ray Latif: Where regionally are the machines placed?
[00:14:17] Jon Landis: We got started in Boston. So the first year we were only the product was only available in the greater Boston area. New York became our next big market. And then we've been growing really fast in the Bay Area, San Francisco, San Jose, like that whole area has gotten big for us. And what we're finding is amazing is you have these big corporate campuses out there that used to spend tons of money. They used to spend shocking amounts of money on Polar Seltzer, LaCroix, Hint Water, similar brands. And in a lot of those companies, some of them have continued to offer our product alongside those bottled beverages in parallel. But other companies have just made the decision, like we're getting rid of all bottles. Like we don't want to spend time ordering anymore. We don't want to spend time managing or checking inventory. We don't want to have to deal with the recycling. And then they just get our service and we'll come in and replace everything. So we're finding the opportunity in the Bay area is big. And then actually. I think the press release is coming out tomorrow about this, but we just signed a partnership with canteen to do nationwide distribution. So actually Bevy is now as of like kind of now available everywhere.
[00:15:24] Ray Latif: So, it sounds like there is a logistical aspect to having to refill and service the machines. You mentioned before we got on that you have three offices, one here, one in New York, and one in the Bay Area. Do you have to outsource service or how is that going to work?
[00:15:40] Jon Landis: Yeah, yeah. Basically, that's really where like companies like Canteen come in. They're now just in terms of kind of size of their company and their reach, they're like by far our biggest servicing partner. But we've, we've worked with a number of kind of small to midsize office coffee and water services, like pantry services before that handle all those logistics. So yeah, in most parts of the country, with the exception of those three places where we have offices, like San Francisco and New York and Boston, and even in those regions, like we're quite geographically limited, like in New York, we can service machines, but only in Manhattan up to, I forget like what street, but not even the whole Manhattan. And in the Bay Area, again, we're like very restricted where we have our own capacity to service. Everywhere else, we need to outsource all the logistics. And the way that'll work is we'll send machines in bulk to like an office coffee service company's warehouse, and then they literally handle everything from there. They do the installations, they do ongoing maintenance, they service machines. Our team's around to provide support, but they basically, they handle everything. And they actually, the way we work with them is they'll actually handle the billing of clients too. They become true distributors, like on the, in terms of how the revenue works out, as well as in terms of logistics.
[00:16:59] John Craven: Very cool.
[00:17:00] Ray Latif: Let's talk partnerships. You've inked one partnership with a beverage brand to date. That's Agua. Yeah, we saw that on the machine. It's they've got what flavors they have.
[00:17:09] Jon Landis: We did we did two flavors with them. And we actually still did this as like, it's still in the very early like preliminary learning stages. So we're figuring out what are the right flavors. But we did a peach mango and we did a lime mint mojito. And actually, they both did quite well, like in terms of judging their popularity versus some of our other drinks. Their peach mango was really popular. And actually, I know that Agua people have a couple of other flavors coming our way for us to test, for us to see if we can get them to work well in our machine before rolling out. And that kind of partnership with existing beverage companies is something we really hope to do more and more of. Like I would say with our machine, right now we do water, sparkling water, flavored seltzers. And the beverages we offer are really like a choice rather than, you know, some kind of limitation of the machine. If you were to take like Pepsi or Coke concentrate and throw it in here, I don't know about the legality of that, but like we could produce a really good tasting Coke or Pepsi. It would work well. It would work well from a technical perspective. I can already hear my phone buzzing with the lawyers. Yeah, exactly. Exactly. But we could make it work. So there's really no, I shouldn't say no limitation, but we have a lot of flexibility with what kind of beverages we offer. Moving forward, one of the things we'd love doing, especially after we've built up our own brand a little more and gotten our own brand awareness a little stronger, is to partner with branded beverage companies that already have kind of powerful brands and meaningful messages and groups of followers that would, you know, be looking to get this in their office as well.
[00:18:44] John Craven: What about functional beverages? It seems like you're, we're talking a lot about things that are delivering flavor, but that's certainly a big trend in the beverage industry.
[00:18:53] Jon Landis: We'd love to get involved in that. We have offered drinks before that have a number of vitamins in them and are kind of meant to be like slightly functional, I guess, but the true functional beverage industry would be really exciting for us. Like that would be really cool. Especially actually, we're just literally just this month, we've started getting outside of offices and expanding our footprint in hotels and gyms. So we're actually now in several hotels, several gyms. And as we think about the gym market, A really good way to add value there would be to partner with some of these functional beverage companies.
[00:19:28] John Craven: And where is someone using this like in a hotel? I guess a gym application sort of seems a little more maybe obvious to me.
[00:19:34] Ray Latif: So far, hotel lobbies and hotel gyms.
[00:19:36] John Craven: Gotcha.
[00:19:37] Ray Latif: So with the partnerships, it's almost like you're walking a fine line and they're kind of walking a fine line too, in terms of the brands and then your company, in that You're giving up some branding. Yeah. And they're sort of giving up some branding. You know, you talked about in some of the offices which had previously stocked Hint or LaCroix, those got pushed out and your brand kind of came in. What's the upside? What's the real upside for some of these brands do you see? Is it giving them a fountain option that just didn't exist for them before? I see a couple of upsides.
[00:20:07] Jon Landis: As well as downsides, to be frank, for beverage companies that want to work with us. I mean, the biggest upside are companies that aren't already selling their product in bulk into our markets. And it's interesting because I'll talk to founders or executives of branded beverage companies that are doing really well, like brands that I would recognize or that, you know, I've tried in convenience stores and some of them will come and like, Oh man, like offices are so hard. Like it's so hard to get distribution in, in offices. Cause really like a handful of companies is basically like Aramark, Sodexo, Compass Group. Right. They, for the most part control, like what products are available to offices or not because they have the contracts. What I've realized, like we can add a lot of value by getting this footprint in different locations, like first offices, but eventually like more types of locations. We really can kind of like meaningfully offer reach to beverage companies, both for the purpose of brand building, for an extra revenue source, that can be really valuable to them. I'm also realizing that our data can be really valuable to them too. And we found some companies are more open to this than others. Some companies will say like, people are going to be allowed to tweak your beverages. They'll be able to change your flavor strength. They'll be able to mix and match them. And some will say like, uh, no, we would want you to like lock the flavor strength slider and set it to our exact formulation. Cause we've put a lot of effort into figuring out the right formulation. And I totally get that from their perspective, but others will be more open and they'll say like, yeah, awesome. Let us know, let us know how people tweak it. Let us know, would they rather have it stronger? Did they like our drink sparkling? Like maybe it could help them kind of. improve their product or even develop alternative lines. We can also help them, I realized, figure out their target market, you know, like we can very quickly put their product into many geographies. We could very quickly put them into locations with very different kinds of user demographics and give them feedback on just like where it did well and where it didn't. I think longer term, that kind of data offering will be a big part of, of what we do.
[00:22:13] John Craven: Well, one, I guess, logical question in response to what you said, though, you talked a little bit about the difficulty of getting into offices. So how exactly does Bevy get in there if it's difficult? What's sort of the marketing strategy for this?
[00:22:27] Jon Landis: One of the things I'm really glad about, even though we're very focused on growing successfully through distributors, I'm really happy that we just started ourselves. So just direct sales. We just started with kind of old fashioned, cold calling, cold emailing, like old fashioned direct sales and started kind of building up an office following and building up customers that like this. And really what I realized that we can offer, given the nature of our product really as a machine. as opposed to as a traditional beverage company is that we can save the office managers and the facilities managers and all the people within a company who kind of spend time or money on beverages. We realize that we can help them very directly. Like someone in an office spends an inordinate amount of time. If this is like your typical tech company or law firm or financial services company that kind of has budget for this stuff, someone there spends an inordinate amount of time checking inventory in a refrigerator of different beverages, moving those beverages from a storage room to the refrigerator, handling recycling, placing new orders. Like someone spends a lot of time dealing with it and it's also very expensive. We were able to go to these people and say, However much time you spend on this, you can have back. You're never going to have to place another order. You're never going to have to check inventory again. You're never going to have to carry a box of beverages or carry a bottle or lift a jug of water. And we're going to cut your budget. That kind of message resonated really well. And what's cool about it is it kind of puts us in a perspective where we have a really good relationship with the people making food and beverage decisions. Now that we have that access to the customer base, like now that we have this kind of direct access to people in the office, we can offer them new things that maybe Like Agua is an interesting example. If Agua had called up an office manager and tried to get them to buy their drinks instead of La Croix or instead of like vitamin water, which is a funny example, because the Agua people were the vitamin water people. But the office managers might not feel that big of an impetus to make the change. Like probably they'd be interested. Probably they'd be curious to try the new drinks, but like they have a lot of other things to worry about. And chances are they'd say like, no, we're fine with vitamin water. I don't want to spend time on it. But when we go to them with this pitch of we're going to personally save you time and hassle, and we're going to cut your budget, like we're going to save you money that resonates with them. And then once we're there and once we like really have the ear of the office manager and you know, we have a relationship with the customers. If then we say, Hey, we have this drink. We think you'll like it's Agua. Would you be willing to try it? Would you be willing to give us feedback? They'll be happy to do it generally.
[00:25:11] John Craven: So that's the, I guess, initial sort of direct sales approach. I mean, you guys have evolved beyond that though, right? I know there's kind of a big, uh, sort of experiential, uh, marketing thing you're doing at one of the, uh, train stations. Yeah. Can you tell us a little bit about that?
[00:25:26] Jon Landis: Yeah. Basically what we learned, it's hard for people to get excited about our products without trying it. Honestly, like, unless you are that specific decision maker who deals with food and beverages as part of your job. It's hard to really get excited about it. And what we found is that trade shows and events were really the best form of marketing for us. Like we found just physically getting our product in front of people, giving them the full experience, because it's not just about cost savings, or it's not just about saving plastic bottles or saving time. To get the full experience, you have to try the different drinks, you have to use the touchscreen interface, like you have to really kind of interact with it to appreciate it. And one of the things we learned from our trade show circuit last year was that we did just as well at trade shows, not geared at all toward the decision makers, like meaning like food and beverage decision makers. We did just as well at kind of random industry trade shows where we would show up, provide beverages for an event. And these could be like for finance people, engineers, people that never make a food and beverage decision for the office, like not the people that order the water or the coffee. We found that we did just as well there. As we did at events geared toward food and beverage decision makers, because what was happening is people would try the machine, especially engineers, right? Like they try the machine, they would think it was cool, and then they'd go and ask for it at their work. And they would tell their office manager about it, and often those regular people who like never were previously involved in a food and beverage decision would make our product happen, you know, like they'd get us into these companies. And we realized like, well, if that's the case, why do we even have to wait for trade shows? Let's just like go to places where there are a lot of professionals, especially young kind of millennial professionals, and let's just market to them in general, whether they're in a work environment or not. That's really the idea behind South Station. It's really like we're deep in Boston's financial district where around tons of kind of professional people who work in offices that could be good target customers. And we just want to give them exposure to the product. So it's basically an installation of machines for public use. Oh, yeah. Sorry, I didn't explain at all what it was. Yeah. Yeah, we have two machines. Just trying to do it for the people listening to this. Thank you. Yeah, we have two machines at South Station. They actually go down, I think tomorrow is the last day, but we've had them up for almost two weeks and we're basically giving away free beverage samples to anyone who comes through the train station and wants a drink.
[00:27:51] Ray Latif: Well, it's pretty intuitive, your touchscreen. So are you finding that customers are able to use it with limited need or know-how?
[00:27:58] Jon Landis: Yeah, the learning curve is pretty fast. The average learning curve is like less than 30 seconds. People figure it out pretty quick.
[00:28:04] Ray Latif: Cool. I did want to ask you about new partnerships that you did mention. And whether or not this is going to be something that we're going to see more of in the future. I mean, let's say a beverage company listening wanted to contact you and say, hey, you know, what's your process like? And what do we have to do to be, you know, part of your service? You know, what's the next step for them?
[00:28:22] Jon Landis: I would love it. Could I get my email here? Of course. Yeah, they could just email me directly. I'm like always on my email. So it's just Sean at bevy.co. S-E-A-N at bevy.co. You could just email me and I would be super interested in talking. And I would just say kind of bear with us, like this is a little bit new for us too. It might take us a little longer to do it right now than it would six months from now. But it's something we're really excited about, like expanding the beverage offerings and bringing more brands to our customers.
[00:28:51] Ray Latif: Cool, cool. We have like about one minute left. Talking to you for the last half hour, it's pretty interesting to hear you and how, I don't know exactly what your background was, but your life as an entrepreneur right now is sort of the intersection of tech, sales, and beverage. What's that been like, and how did you get into this business in the first place?
[00:29:10] Jon Landis: So this is actually, it's kind of like my first serious company that I'm a part of, if you can call us a serious company. I was an environmentalist. So I did nonprofit environmental work, actually like working at nature reserves in China right before. Typical beverage entrepreneur. But this is a little weird, but I discovered that, I've only spoken to him on the phone once, but I discovered that my background is like eerily similar to the Zico It's like creepily similar. Like he also was like nonprofit and then also went to business school. So I did an MBA at MIT. And then coming out of MIT, I started this business with Eliza who you met outside and with Frank who's in California right now. But basically it was really the environmental mission that got us all together. Eliza was a designer from Rhode Island School of Design. So she's really the one behind the whole kind of look and feel and smooth and intuitive experience of the product. Frank has a background in both manufacturing and marketing before business school. So he was sort of like our jack of all trades, get everything done kind of guy. And then from my perspective, I view myself as like kind of the default CEO because it was like, okay, someone needs to design the product. That's Eliza since she went to RISD. Someone needs to like handle operations. That's Frank because he worked in manufacturing. And then like someone needs to kind of get money and sell the product and that kind of thing. And that became me by default. You also have the MBA from Sloan. So yeah, but I've been learning on the job. Like I've really been learning a lot on the job. And we have a lot of good a lot of good mentors, advisors. And these days, these days, our investors are like, quite active in supporting us. So so it really feels even on the business development side, it really feels like a team these days. Great.
[00:30:55] Ray Latif: One last question for you. I'm gonna put you on the spot. If you had one beverage brand that you could align with, you know, that is on your touchscreen, what would it be and why?
[00:31:06] Jon Landis: That's a tough question since I'm- I'm putting you on the spot. Yeah, that's a tough question since I'm currently doing outreach. A real answer, I'm really interested in Purity Organic. I like their products a lot, just in terms of quality, taste, and they fit in really well with our customer base, who are these kind of like young millennial tech company workers. I just think it's a good fit. Also, this is more of a fake answer, but I don't know, like Tito's vodka, Grey Goose vodka, some kind of booze would be ideal.
[00:31:35] John Craven: All right. Well, Ray, that was a great interview, don't you think?
[00:31:38] Ray Latif: I thoroughly enjoyed going there. That was a lot of fun, and I think that was a great interview. I really appreciate Sean's hospitality.
[00:31:45] John Craven: Side inside note on the interview. Their office is sandwiched right next to a company that makes hot fudge. Oh my god, yeah. And a company that makes the prepared pizzas for grocery stores. We're sitting in this room right past the wave of hot fudge and pizza Roma, which actually don't really go well together. But some interesting stuff in there. Hope you enjoyed that that interview that we did there. So I guess now we have the Do we call it a world debut? I think we should call it a world debut of Jon Landis' first global worldwide international exclusive here.
[00:32:24] Ray Latif: I think we need like cannons and like a seven, what do they call those? A six shooter salute?
[00:32:28] John Craven: I don't know. I hope our audio guys make a sweet theme song for this thing. But anyway, here goes the discussion of, well, moderated by Jon Landis, the why is this a thing? So here goes.
[00:32:41] Sean Grundy: All right, folks, this is a new segment that we have on the BevNET podcast. Why is this a thing? My name is Jon Landis. You might recognize my voice from previous episodes earlier in 2016.
[00:32:52] Ray Latif: Or earlier in the most recent part of this podcast.
[00:32:55] Sean Grundy: You also sound more serious now that you're in segment mode. I like this. Let's roll with it. With great responsibilities. I don't know what I'm saying, right? I mean, we basically put the gun to your head to do this segment. So you're going against the wall. So I'm rolling with the punches. So yeah, so we like this idea. Why is this a thing? We want to just talk about a bunch of different things. We think you guys like this. And since we just came back from San Francisco, we're gonna say why is the fancy Food Show a thing? Why does this show matter? Really? What's the purpose of the specialty food channel? for entrepreneurial food and beverage brands today. After just walking around the floor, I want to pose that question to you guys right now. Why is the specialty channels important? And why do we pay attention to it?
[00:33:40] John Craven: Well, first of all, I would just say that it is funny that there is something called the fancy Food Show in 2017. It's one of those things where in sort of normal life. It's like, I'm going to San Francisco, telling friends, whatever. They're like, what are you doing? I'm like, I'm going to the fancy Food Show. And they're like, okay, like, seriously, don't be a jerk. Just tell me what you're really doing there. Because it sounds sort of ridiculous. you know, whatever it is, what it is. We're never getting back into that place. I probably won't get a press pass again. In all seriousness, though, first show of the year. I personally love going to San Francisco in January. You know, why is specialty food important? There's obviously this hyper focus on some of the national retail chains. You know, I feel like we probably mentioned Whole Foods. You know, you could count how many times we say Whole Foods in every episode. Whole Foods But I mean, it's all of those independent, regional, smaller chain stores that the concept of New Age beverages that has now morphed into whatever you want to call today's, you know, high-end natural beverage set. These are the stores that basically built that stuff. Right. And I think this is a show where people are able to connect with a different type of retailer than say, you know, the convenience store show or even Expo West and East. So I think that's sort of its reason for being important.
[00:35:02] Ray Latif: Yeah, you know, it was a few years back that we did a Beverage School segment called, why is the specialty channel important for your brand? And we had a few folks who were walking the floor, a few industry veterans respond to that question. And most often the response we got was that this is a channel that allows brands to incubate. and allows brands to grow at a relatively short and easy pace. It's not something where you're going to have to rush in and go into the conventional channel and deal with slotting fees and all the other competition that goes along with that. It's a channel where you can sort of learn the business and learn the ropes. The other thing about this is, you know, the specialty channel used to be, what was the best example of a specialty store back in the day? And probably still today is Trader Joe's. I mean, but Trader Joe's, like a lot of these specialty retailers has evolved. And you're starting to see that on their shelves. I mean, you have been seeing that for a long time. I mean, a lot of their stuff is geared toward a healthier offering and a more enlightened consumer as it relates to health and wellness. And that's sort of where this fancy Food Show has gone over the last few years. You're definitely seeing this evolution where everything isn't just indulgent and good tasting, it's good for you.
[00:36:20] John Craven: Yeah. And I mean, the lines have kind of blurred a lot. I mean, there are definitely people at these shows that talk about seeing national retailers and You know, some of the specialty guys are trying to get a piece of natural, you know, since they're somewhat close in some cases, but. You know, at the end of the day, I think, you know, what you have with the fancy Food Show is something that I guess to some extent feels like it exists in the shadow of Expo West. It's a warmup and you can actually talk to people at it, which is nice.
[00:36:47] Sean Grundy: I want to go back to the first two points that you each made, John, being that it's a, it's a place for innovation where, uh, you know, you can kind of go to the small independent stores and see a lot of this stuff before it hits more mainstream shelves. and racing, that it's an easier channel to break into, it's less price sensitive, the retailers are more friendly to new entrepreneurial brands and whatnot. How many of these people that that kind of marketplace caters to are able to cross over into conventional, into clubs, into these higher volume, higher growth channels? And is there a risk of, you know, kind of being pigeonholed to a degree, working with people in such a manner, and working with the high premium price points and getting comfortable?
[00:37:35] John Craven: Well, I think in the old days, the answer was yes. Nowadays, not so much just in that most conventional retail has some place for these types of products, you know, at least as far as beverage and, you know, some of the packaged food products go. So I don't really think that that's the case. I mean, it's proven to be a successful strategy, you know, where you can go into a Whole Foods and work your way out in new conventional. And back when You know, I remember, I think it was around the time when maybe Steve started, you know, they were one of the first brands that just said they were going after natural. And that was something that at the time was looked at in kind of a strange way as though, you know, you're going down this path that you can't get out of. But I don't think that's the case anymore.
[00:38:39] Ray Latif: and grown in conventional and natural as well. So that transition has become much easier. You still, I think if you're a cocktail mixer brand, you want to start in specialty, and a lot of them do, and grow from there. But that transition getting into grocery and natural has become much easier and much more accepted.
[00:38:55] Sean Grundy: I personally noticed, this is my third time in San Francisco, that it was a much busier show this year. I don't know if you guys felt the same way. I feel like a lot of shows since 2015, 2014 have been getting much busier in general. Do you guys think that seeing a busy fancy Food Show early in the year is indicative of the shows that we're going to see all year? Are we going to see pretty stacked and busy shows?
[00:39:19] John Craven: Yeah, I mean, I think that's a great question. I mean, obviously, we have this time of uncertainty or whatever, you know, people want to call it. So I guess it's hard to say definitively, yes, but I do think that companies coming out of the gate strong for 2017 means that we're in a position where funding and just companies' ability to kind of get their stuff together and, you know, do it in a professional way, like we're in a good spot. Not really hearing a lot from people who are saying, oh, we're cutting back this year. You know, it's much more like companies are in growth mode. So I feel like the vibe of the show was overall really positive. So yeah, I think that's a correct assessment.
[00:40:01] Sean Grundy: I want to bring it back to the growth of the show and the vibe and seeing more people and more traffic. And should we be waiting for that to flatline? And what will that look like? And will that have any kind of impact on the industry if these shows start to decline again? And what should we be preparing? Because that's inevitable, right?
[00:40:21] Ray Latif: Well, I do want to point out one thing. I mean, like, the show from a beverage perspective, I think was pretty much consistent with recent years. I think, you know, this is not a huge show for beverages. It's an important show for beverages. But this is a very huge show for food. You know, and if you look at the Project Nosh coverage, our sister site, Project Nosh, the Instagram page was, I don't know, there were like almost a hundred new products that were covered. And it seemed like a lot of the exhibitors who were food exhibitors were very excited and willing to kind of showcase new products and new innovation. I think as far as the show goes, I think there's a lot more opportunity and growth for some of these entrepreneurial brands on the food side and the beverage side.
[00:41:03] Sean Grundy: But I think at this point, we're just about out of time and want to wrap it up. If someone.
[00:41:08] Ray Latif: We're going to cut John out. John had a comment.
[00:41:09] Sean Grundy: I want to ask John a question. You know, John, countless people walk up to you in the middle of the show floor and they say to you, you know, what's the coolest thing you've seen today? Or what's the coolest thing you've seen at the show? And you really, that irks you. Can you explain to me why?
[00:41:24] John Craven: Well, I'm going to start working on my segment called Why Is That Annoying? No, just kidding. No, it doesn't. It doesn't irk me, really. It's just, you know, one of those things where people put you on the spot when, you know, we walk like, I don't know, nine or so miles, says my Apple Watch at these things in a given day. And, you know, to sort of have to on the spot, distill it down into like the one takeaway from the show, it's, you know, it's really hard and few shows quite honestly have like, you know, just one takeaway that surpasses them all.
[00:41:53] Sean Grundy: I agree with you. Sometimes it does bother me when people ask me that because I feel like they're evaluating me really quickly and want to know exactly what is the BevNET product that everyone's looking for. I don't feel really comfortable being represented that way. And also, most of the time at these shows, I'm most excited for the people that I've known for years and are continuing to grow and they're getting big gains. And they're getting funded, and they're getting national distribution in some cases. So to me, that's some of the most exciting stuff after seeing some of these people for a few years kick the wheels and figure it out and really begin to really, really crank it forward.
[00:42:29] Ray Latif: All right, well, this was the first. Jon Landis, can I make one more quick comment on Fancy Food Show? This is probably the biggest indicator of how quickly and how much this show has changed for me. So on my Instagram account, a day before the show, I took a picture of this really incredible donut from SuperDuper Burgers. If you're in San Francisco, you have to try it. Their burgers are tiny, 81 cents. It was amazing, it changed my life. And I tweeted it and I included the hashtag WFFS17, which is the hashtag for the Fancy Food Show, and someone, wrote back to me and said, hey, have fun at the show. Stop by South 44, stop by their booth number if you want a nice, healthy snack, hot miso soup. And so back in the day, people would have congratulated me and said, you found the best, most indulgent products in San Francisco. And now, you know, I'm getting comments that, hey, if you want to try a healthier option, that's also available at the show.
[00:43:18] Sean Grundy: Well, it does really seem to me that natural is invading I can go into it a little bit longer at some other point. I do believe that natural is a similar channel as specialty. It is very friendly to entrepreneurs and there is a lot of crossover. A lot of these specialty channel, traditionally specialty channel brands need to charge a premium and today people are paying a premium for healthy. and fresh and organic. So I do see a lot of that crossover and it doesn't surprise me that, you know, in reply to your tweets, you're getting pitched to come try some soup. Did you get the soup?
[00:43:53] Ray Latif: My, my, my, I didn't, I didn't get the soup, but, but once again, I got super duper burgers.
[00:43:58] Sean Grundy: If it's a place I'm thinking of, they have a whole miso soup bar and you can do like all the accoutrements there. And it was like, make your own like custom miso soup. And it was really good. I know.
[00:44:08] Ray Latif: It's my loss. I love a cooking loss.
[00:44:10] Sean Grundy: Well, anyways, thank you for joining us for this first edition of my segment, the Jon Landis segment, the why is this a thing segment, the we really need to name this something good soon segment. I feel like we need to end this with the Joker being like, why so serious? So tune in next week, and I'll have something else for you. And if you want to reach out to me and have some ideas, you know where to find me, podcast.BevNET.com.
[00:44:38] Ray Latif: All right, great stuff, Landis. Thanks so much for doing that. I'm looking forward to hearing about why is that a thing going forward in 2017? There's a lot of things. There are a lot of things.
[00:44:48] John Craven: You know what else?
[00:44:48] Ray Latif: There's a lot of things. There's a lot of new beverages, so let's talk about those. All right, so this is the first What Are We Drinking segment for the podcast post-first convention of the year, which was the Winter Fancy Food Show in San Francisco. And so we taste a lot of really cool things, brought back a few things. Things are being sent to us right now that we're sampling in the office. And yeah, some really great stuff that came out of that event. Jon Landis What are you drinking this week?
[00:45:17] Sean Grundy: I've been drinking a lot of sparkling water this week because we have a new machine in the office that dispenses some really reverse osmosis sparkling water.
[00:45:26] John Craven: I know, it's kind of weird, right? I'm not even someone who picks up seltzer, sparkling water, and all of a sudden I can't stop drinking.
[00:45:33] Sean Grundy: It's so good. I go to Russo's down the street, their produce distributor has a little market, and they get a blood orange or a lime or something, and I just squeeze some fresh fruit juice in there. It's really good. So that's what I've been drinking here in the office. I do want to give a shout out though to Thirsty Buddha because when I don't feel like cutting open those fruits and making my own sparkling water, they sent us some sparkling coconut water that's really good. And they have a new watermelon flavor that really rocks that they're rolling out throughout Canada right now and should be hitting the U.S. in the next couple months, I think. So thanks to Thirsty Buddha for sending those. Those were really good. And at the fancy Food Show, though, I would say What I really liked, it was in that innovation alley, you know, like the weird little hallway, the La Casina incubator, little hallway area. There was this little shot of like, it was like a Fire Cider kind of product called Fire Brew. And they had shots and large format bottles as well. And it was... Really good. It wasn't nearly as intense as fire cider because I guess they're selling it in two ounce glass shot bottles So I don't think it needs to be that intense when you're giving it that serving size But it was different cut they had two three different colors. It was really really nice looking product and Some really interesting story behind those entrepreneurs that hopefully we can tell one day cool John Craven you got a couple products in front of you one was at the show one was not and
[00:47:01] John Craven: Oh, thanks for reminding me of that. Two things for me, well, two buckets or whatever. One, I don't know, I just grabbed this juice served here, the Cali. It's like a grapefruit-based, grapefruit, pomegranate, orange. Got a cold right now, kind of exactly what I need. I'm personally a fan of grapefruit. I think it's kind of an underutilized juice as far as a lot of the cold-pressed juice products are out there, so really enjoyed that. I think that was, you know, just in terms of like, I don't know, what I'd actually want to drink on a daily basis of, you know, stuff that I saw at the Fancy Food Show, that is definitely up there. The other one, and I guess, you know, just sort of talking about two products, one of which is, well, you have it in your hand, The Forager Project Cashew Gurt as well as the Harmless Probiotic, I think those are both really interesting in that I would say both have really nailed the flavor of a drinkable yogurt but they're dairy-free, which is something that for me I just don't like drinking a lot of dairy. So the products that have been out there either had dairy in them or just didn't taste good and it's kind of interesting Almost simultaneously, you have two products kind of addressing that with, you know, slightly different ingredients, coconut versus cashew for forager and, you know, different packaging size forager being a multi-serve and harmless being a single serve. But I think they're both really neat innovation. Really enjoy both of them.
[00:48:25] Ray Latif: Yeah, you know, I didn't try the Forger until yesterday. I think some of the products came into the office a few days ago and I was pretty blown away. I mean, how good it tastes. I think the consistency is pretty impressive for a cashew-based offering and it just tastes really good. I think it's pretty great. I think it would be cool to see it in a single-server format. I hope they come out with one of those pretty soon. What is in a single-server Single-serve format, excuse me, right now is the harmless harvest, harmless coconut probiotics. I think they just absolutely nailed it. Everything from outside and inside the bottle, I mean, I don't think I'd change a thing. They have the four SKUs. I'm holding the strawberry right now, and it's really, really tasty. And, you know, what stands out for me is the execution on the label. just that alone is pretty impressive and would make you want to pick it up and at least take a look at it for a few seconds. Beyond that, you know, I was looking at my Instagram account and some of the things that I kind of featured from the show and I almost overlooked the Calafia Farms nitro cold brew machine that they had at their booth and I would drink from that thing Daily three or four times a day probably I mean if we had it in the office So hey Greg if you want to send this one, you know, I'm not gonna argue with you Yeah, I mean, I really enjoyed that. And I feel like that's the kind of thing that is kind of a game changer for offices. There's that big food service movement right now to bring more bottled products into offices. And if you could position that as something that's in every office in America, I think it would be really impressive. But I don't think that's really their strategy or positioning with that product. From what they've told me, it's more of a way to kind of market that line for them, that nitro line that they have, so. Great stuff. All right, those are our favorite beverages of the week. And hey, if you have any favorite beverages of the week or things that you think that we should pay attention to that we haven't covered in the past.
[00:50:21] John Craven: Or want us to try.
[00:50:22] Ray Latif: Or want us to try, send us some or just email us at podcast.bethnet.com. All right, that wraps up this edition of the BevNET podcast. Thanks so much for listening. Lots of stuff upcoming. You know, it's the only January and we got quite a bit of stuff coming up this year.
[00:50:36] John Craven: Well, I guess we've got our, well, of course, probably like half our listeners got the trip to Expo West.
[00:50:41] Sean Grundy: I'm putting together the beverage news planner this week. So if you guys are exhibiting, you can feel free to shoot me a note. I literally just pull the full list of exhibitors and go through it one by one and pull out all the beverages.
[00:50:53] John Craven: We save you a lot of time with a show planner of Okay, I was I was taking credit. But in all seriousness, that's only geez, I guess it'll be a couple weeks away. Six weeks, four weeks, whatever. But we'll be out there certainly covering the show, but also doing some podcasting. I'm sure. So we've got that. What else?
[00:51:14] Sean Grundy: We're taking a trip to New York. So we got some cool podcasts coming up from New York City, right?
[00:51:20] John Craven: We do. And I guess we're planning some other trips, I think. That's another reason to always reach out to us. We're not just sitting here in our conference room. And then, of course, we have our conferences only one month away.
[00:51:31] Sean Grundy: I was saying, you know, this whole month of February, I'm basically preparing for conferences and preparing for Expo West. That's like my entire life this entire month.
[00:51:39] John Craven: Yeah, well, I mean, it's always funny in these things. It goes from seeming like, you know, it's four months away until, holy crap, it's like three weeks away. But I guess if you haven't seen on our website, we have one week jam packed with Project Nosh on a Monday, I think that's June 12th. And then we have BevNET Live on the 13th and 14th. And then we have our Brewbound session for craft beer on the 15th, all nicely situated in I guess the Hell's Kitchen area of Manhattan, so hope to see you there. Jon Landis can help you out with that.
[00:52:11] Sean Grundy: We're basically on the poop deck of the Intrepid, right?
[00:52:14] Ray Latif: Yeah.
[00:52:14] John Craven: Yeah, if you fell off the Intrepid, you'd be at our conferences.
[00:52:16] Ray Latif: I knew you'd find some way to say poop on the podcast, Landis. Anyway, I was going to say if you attend all three events, you get a special prize, and that's a week away with Landis. Good stuff. All right. As John Craven mentioned, if you have some news, ideas, anything that you want to send us related to your company, whether it be what's going on, if you're exhibiting at Expo West, or you just got a new product that you want to talk about, or you have an idea for the podcast that you think that we should cover, please send us that information to podcasts at BevNET.com. We really appreciate it. And for those of you that have already done that, we read those emails and we really incorporate them and we really appreciate them in everything that we do. So thanks again. And this is Ray Latif signing off the Bed and Out podcast with John Craven and Jon Landis. We'll see you next time. Thanks.
