[00:00:03] Ray Latif: Hey everyone, it's Ray Latif from the managing editor of BevNET. We're back here for another edition of the BevNET podcast. Joining with me as always, John Craven, the CEO and founder of BevNET and Jon Landis, our beverage specialist. Let's just call him the specialist. How about that? All right. You know, last couple of times we did the podcast, we talked about what we're drinking this week and we ended the audio with that. I think today let's start about what we're drinking this week and talk about some of our favorite beverages, our favorite libations as it were. Jon Landis, you want to start?
[00:00:34] Jon Landis: I want to give a shout out to Polar Seltzer. You know, it's a big New England thing. My girlfriend just moved here from Milwaukee and didn't really know anything about seltzer and I got some for her at the store and it's really, really refreshing and delightful. It's been very, very hot here. They have not sent us any in the office to my knowledge recently, but nevertheless, buying some, making some cocktails with it and it's, Really, you know, I think it's, I mean, La Croix is probably what I think of when I think of the best seltzer on the market, but Polar has really got some great flavors and they're doing a good job.
[00:01:09] Ray Latif: Yeah. Interesting that you say that your girlfriend doesn't know what seltzer is. I think that's because in the Northeast we call it seltzer, but in the rest of the country, it's just called sparkling water.
[00:01:17] Jon Landis: Yeah. Sparkling water, club soda, something like that. But, you know, general idea wasn't even, it doesn't seem like a thing that they consume nearly as regularly out there as we do around here.
[00:01:27] Ray Latif: And I wouldn't worry too much about them sending us, it's what, like 50 cents a pop? It's still pretty inexpensive. John Craven, what are you enjoying this week?
[00:01:36] John Craven: Well, I've got the new dry sparkling flavors here. The serrano pepper and this watermelon, malali watermelon, excuse me. Don't even know how to pronounce that exactly.
[00:01:46] Ray Latif: It's brand new. It's okay.
[00:01:48] John Craven: So brand new. Um, the Serrano pepper one is in particular is really enjoyable. Um, this label here says it's spicy, bright, and savory. I don't know. You know, it tastes like Serrano pepper. And, you know, as far as, uh, sparkling flavored beverages right now, like this is something that's pretty different and tasty. It's not quite a savory flavor, but it's also not sweet in any way, even though it's got a little bit of sugar in it, but 14 grams of sugar, 14 grams of sugar, but I mean like the, the pepper flavor itself. So really like that.
[00:02:17] Ray Latif: Yeah, on trend in two different ways. Certainly with the spice, people starting to see a little bit more of that going on in beverages and relatively low sugar for a soda. You got that going for them as well. And it seems to be every time we hear about dry, it's always a good thing. It doesn't seem to be a bad thing these days.
[00:02:32] John Craven: Well, and they're speaking in our upcoming BevNET Live in just a short little bit of time.
[00:02:36] Ray Latif: The CEO and founder, Cherelle Klaus.
[00:02:38] John Craven: Klaus? Klaus.
[00:02:39] Ray Latif: That was a close one. Sorry, Cherelle, if you're listening. I almost made a mistake. All right. What am I drinking? You know, I've been on a crazy kombucha kick of late. I've been drinking a lot of kombucha. It's one of those things where it's weird. I'm starting to drink it with meals. And they always said, you know, kombucha is going to be one of those beverages everyone starts to drink with a meal. I was like, get the heck out of here. No one's going to drink kombucha with meals. And lo and behold, I'm drinking with my meals. I drank it last night. I had it with my dinner. Really, really good. I'm also drinking some of this Mojo coffee, which is a local cold brew coffee brand here in Massachusetts. The founder dropped by today, the day of our broadcast here, and dropped off some samples of her new single serve product. Pretty darn good.
[00:03:19] Jon Landis: Pretty tasty. Yeah, I love the labels and the design that they've done too. It's really bold branding and it calls out to you and just feels good in your hand almost. When you get a design that feels good in your hand, that's a winner. Do you know what this is HPP? I don't think so. No, they're manufacturing in a dairy facility right now. She told me that they're actually investing in buying their own filler because they have some co-packers in mind for the future, but they're not ready for their level of production yet. So in this kind of weird in-between growth period, they're going to invest in some equipment for the time being.
[00:03:49] Ray Latif: Yeah, interesting how this small sort of 10 ounce bottles become ubiquitous. And anytime there's something filled in it, you start to think it's HPP.
[00:03:56] Jon Landis: Yeah.
[00:03:56] Ray Latif: Yeah. All right. Onto the main topic of discussion for today. It's come up in the office a few times that we hear about a new brand or new product that comes out in the market and it's inventing a new category. Or it's talking about itself in a way that is different from what else is on the market in terms of the category that it actually belongs to or that is most commonly associated with. And we just kind of wanted to flesh this out and talk about some of the things that might not have worked in that regard as it relates to some of the call-outs that have been made and some of the taglines that have been produced. John Craven, I think you have a pretty strong opinion on this, or at least an opinion on this.
[00:04:35] John Craven: Yeah, I mean, I think it's something that is sort of a damned if you do, damned if you don't type of thing that entrepreneurs deal with. On the one hand, you know, there are well-established buckets or categories, what I mean by buckets, where pretty much any product fits into some established category that's out there. Even things that were, you know, sort of extreme when they were new, things like kombucha, well, that was a tea technically, right? But, you know, it's something that I think, you know, a lot of entrepreneurs want to go out and create, you know, new things. They want to have a category that they've created be the leader, own it, et cetera. On the other hand, that's a pretty big upfront challenge of trying to educate and create that category. But if you don't do that and you just say, hey, I'm another organic tea, well, then where's the excitement? So what we've seen over time are certainly new categories that are created that are more successful than others. And here we're just talking about categories that are essentially manipulation of words or brand or positioning rather than something that is legitimately a new category. So anyway, I'll kick it back to you.
[00:05:39] Ray Latif: Well, yeah, I mean, it's interesting. You know, again, I think we're going to try to avoid some specific brand names on this one. But you do hear about anything from a sports drink to a juice to a coffee. And I'll come out to the market and they'll say, we're worth this. You know, almost trying to say that they're not part of the category. And a lot of times, I'd say in most cases that we've seen, it turns out that they revert back to what people are familiar with, what people know and are accustomed to seeing, especially as it relates to the bottle shape, the color of liquid, the flavor, what to expect. So it's almost like, yeah, you want to be different, but you don't want to be so different. You don't want to try to spell out something that people just aren't going to understand right from the get-go. It's very, very difficult to say that you're going to get out and you're going to be a new category and you're going to start this wave of differentiation just based on your brand and only your brand. It's a pretty uphill battle.
[00:06:34] Jon Landis: Yeah, I think to john your point, a lot of entrepreneurs have seen 10 years ago, there wasn't a coconut water category. And now there is kombucha similar things. So to them, it almost seems kind of natural to say, You know, we're creating a new category, but like you said, those were categories. Those are products that have existed for a really long time. Now they're just being bottled, single serve, being delivered in that format. That's a way different conversation to have than saying like, I have this functional product that's packaged in an eight ounce can that looks like an energy drink, but it has this special ingredient. So therefore it's not an energy drink per se. You know, we're coming out with something that's going to take the world by storm. But it is really tempting for entrepreneurs having seen the explosive growth of things like coconut water and kombucha to say, we're creating a new category. Look, it can be done. You know, I think it puts people in a tricky position, especially when, like you said, the point of its uniqueness is a very big point to get someone excited about a new brand. But as you scale up and you start reaching larger markets and going into more conventional retailers, they don't want uniqueness. They want you to fit into something that's predefined.
[00:07:46] John Craven: Well, unless you've established
[00:07:48] Jon Landis: Right.
[00:07:48] John Craven: That on your own. I mean, I think it's something that for a lot of brands hits them pretty early on. I mean, I don't know. It's sort of just combinations of words that don't mean anything. You know, I don't know. Energy, hydration, elixir. Geez. I mean, I hope no one out there has used that, but it's something that it kind of tells you a little bit about it. But energy means something. Hydration means something. I don't know. Elixir doesn't mean a whole heck of a lot. But and, you know, it's a it's a word that works for certain purposes. But putting all that together like that isn't just because you put words together like a new category. And I think that's something that, you know, a lot of brands get pretty hung up on is just trying to make it clear that they're leading and not following. But point being, I don't think that's done through the words that you put on the can or what category you say that you're in. It's kind of what actually is inside the product and so on and so forth.
[00:08:35] Ray Latif: And the big exception to the rule are those companies and those brands that are coming in with a lot of money to create a new category. I mean, there was a time in this country where energy drinks were coffee, you know, energy drinks were any kind of caffeinated beverage that was familiar for the last 400, 500 years or even longer than that. But energy drinks, when Red Bull first came to the United States in 1997, that was the first time anyone had ever heard of that kind of a product.
[00:08:58] John Craven: In the U.S., energy drinks existed in Europe for sure before that.
[00:09:02] Ray Latif: Right. But to educate the U.S. consumer, I mean, they had to spend a lot of money to come into this market and teach people about what it did as a function.
[00:09:11] John Craven: Well, they did. And I think the other thing that, you know, you could note about energy drinks is that the category wasn't built just because of Red Bull. I mean, there were tons of other companies and there were plenty of other, you know, European imports and even American upstarts like Hanson Natural Energy back in the day that having competition going after that same category does effectively establish and legitimize whatever, you know, nascent category you're after. Point being, again, that if you're going to go and create a category, if it is just something that you're kind of inventing out of thin air, as opposed to something like a coconut water or a kombucha, which those are actual real things, it's just going to be that much harder to get anyone else to jump in the water with you. And I think that is kind of, you know, the whole point of what I'm trying to convey is that sometimes, you know, depending on what your product is, you just can't invent something, a whole new, you know, bucket for it.
[00:10:04] Ray Latif: What are some examples, I mean, what are some examples that you guys have seen of brands that have been able to be successful in leading a category from the get-go? I mean, I think, you know, there are some obvious examples, Mama Chia in the chia beverage category. You know, you're seeing some gazpacho products that have kind of taken the lead, even though it's still a very, very tiny, tiny category. But for those brands who are just so stubborn and want to say, this is what we're going to do, we have to create a new category to be able to exist in the first place. What are some of the ways that they can be successful with that? And this often comes up at the New Beverage Showdown.
[00:10:39] John Craven: Well, but I think even, you know, one of your examples I'd take issue with in Mama Chia, I wouldn't say there's a chia beverage category. I mean, it's a juice drink with chia, which is sort of like a platform ingredient being its point of differentiation and nothing wrong with that. I mean, it's a perfectly, you know, great product, great brand, but you know, I don't think they need to be in a different category for it to be successful. And again, that I would use that sort of thing as an example to prove my point.
[00:11:04] Jon Landis: I think that it's important to note to entrepreneurs out there, too, that, like John's saying, it's a juice drink, so you're going to go to the juice buyer, you're in the juice section. It's actually not a disadvantage for you to identify with the juice category. As you are starting your new company in beverage and are building it, You're going to find a lot of efficiencies because you fit into an already established category. You're not going to retailers and trying to pitch them a whole new thing. Like that's a real pain in the ass for those guys. I mean, to be honest, but to answer your question, Ray, for me, what I love, the newest thing that I love that I've seen out there that I'm not sure if it's a new category or not, but it's maple water. I think that that coming out of the gate, they're facing a lot of adversity being compared to coconut water left and right. I don't think that's really fair to them. And I think it's a completely different product. Will it be a whole category in the industry or for consumers? I'm not certain, but it does seem to be continuing to grow and it is a really refreshing product.
[00:12:02] Ray Latif: It is, but at the same time, I mean, I think it's one of those things that's, again, an uphill battle. And if you didn't have the competition, if you didn't have a lot of two or three brands in the category at this point, if it was just a single maple water, now I have in front of me a cactus water. There's a couple of cactus water products on the market too, but it's not easy to market that kind of brand. Even if you are, even if your intentions are good, if you're not trying to like fool someone into thinking that's something else, you know, it's still going to be pretty tough to do it without a boatload of money or some other competition.
[00:12:30] John Craven: Well, I think Jon Landis's point, the maple water, for example, like maple water, again, is a thing, you know, it comes out of a tree, right? Some of these other waters that, you know, we have and, you know, sure, cactus, aloe, whatever, you've got rosewater here, you know, there are things that are basically still, you know, manufactured by man, right? ingredients from a plant that are turned into a water, like it's not, you know, water that comes from a rose or from an aloe plant or a cactus for that matter. So I think those are more of the things that seems easier to question. Will this be a real category or not? You know, the story of something like a maple water, just one ingredient from a tree, like that's pretty, I think, sellable. And it seems like that's proven to be true. So I don't know. I mean, I think to me, it's more like the functional stuff that You could point to as places where it hasn't worked, the things that I think have worked are things that are often like innovations on an existing thing. Cold brew or nitro coffee being, you know, one that's kind of current. I think, you know, some of the HPP juices, you could say drinkable soup, whether or not that's a, you know, a long-term viable category. Again, it's something that's like an evolution of a category. So I think the ones that are generally more successful in creating something new are ones that, you know, are taking some established thing as its roots.
[00:13:43] Ray Latif: Yeah. So what are some words that are no-nos for new beverage brands then? Are we set on elixir? So should no one say elixir anymore? I'm okay with that.
[00:13:51] Jon Landis: I mean, I don't know if it's a word as much as just, you know, being able to say, yeah, we're for athletes in recovery. So we're a sports drink instead of trying to say like we're a rehydration beverage, just kind of own it, come out and don't skirt around it and say like, we're so innovative that. You're going to need a whole new category for us. We're not going to fit in the sports drink category. We've heard that a lot of times in this industry, and it's kind of just gotten a little old. And especially if you're one of these people that, like we say, is just trying to use words to market your product a little bit differently. But the use occasion, the shelf space, it's all going to be the same as the category that you're trying to avoid, so to speak. I would caution people against that. Yeah, John Craven. Asking me for words still?
[00:14:38] Ray Latif: I'm asking you for a word. I'm trying to hide over here in the corner, hoping you don't call on me. How about bioactive? I see a product here that has the word bioactive on it. I mean, I think that's another thing too, is like you're pretty limiting or you're pretty limited by using words that most people just aren't going to understand. I don't even know what bioactive means for crying out loud.
[00:14:56] John Craven: Yeah, I mean, there's a lot of those words that are sort of industry. I wouldn't even say they're industry words. They're words that are very technical, I guess I would say, you know, bioavailable, biodynamic for that point.
[00:15:07] Ray Latif: Bioavailable, I know what that means.
[00:15:08] John Craven: Anything bio, I think is sort of, I don't know, for whatever reason, it doesn't sound like something that makes me want to like eat something.
[00:15:15] Ray Latif: Doesn't wet the palate as it were.
[00:15:16] John Craven: Does not wet the palate.
[00:15:17] Ray Latif: And you're big on that. It has to wet the palate.
[00:15:19] John Craven: Yeah, I mean, I think, you know, with a lot of these, it's like there's this kind of complicated equation that for a consumer ends in either, it's like binary, it's like buy or don't buy. And it's packaging, it's flavors, it's the stuff on the label, it's, I don't know, all these different things. Someone could probably figure out exactly what all the different components are. But for me, one of the big, like, things that I always feel like is a turnoff is when you got this copy on a bottle that has all these complicated words, which is kind of a, I think, unintentional way of like over-promising and under-delivering. And I think those are, you know, just things that consumers are turned off by. So stuff that's really like simple, again, looking at this dry sparkling, it's like spicy, bright, savory. Joking about it before, but I think that's a pretty good three word, you know, summary of what the heck's in this bottle. And that to me is, geez, like, I don't know, that sounds great. It sounds like something you want to drink. Yeah, again, you know, to the point of not wetting the pallet, that does wet the pallet.
[00:16:12] Ray Latif: There you go.
[00:16:12] Jon Landis: I echo that. I think that, you know, there's so much limited space on a package. You want to have colors and designs and you want it to explain what your product's all about. And if you use all of that space for functionality and you completely overlook flavor, taste, experience of consumption, that kind of thing, nobody knows exactly what it is that they're about to get into. And you don't want to put a consumer in that place.
[00:16:34] Ray Latif: Yeah. By the same token, people do want to know that their beverage is functional in some way or another. I mean, I think there's been study after study proving that, not proving, but showing that consumers want some sort of function, call out, something that's going to do more than just satisfy their thirst. And one of the big things that we've seen often is antioxidants and some beverage companies have gotten in trouble using that word. But John Craven, in terms of the antioxidant call out, is that effective at this point? You've seen thousands of beverages, you know, it's a pretty evolved word at this point.
[00:17:08] John Craven: Sure. I mean, I think it's a word that at this point is certainly to some extent noise, depending on how it's executed within a given brand. especially when it starts getting into, you know, how much antioxidants in it and comparing it to like eating blueberries or whatever it might be. But I think on the other hand, in the positive, it is a word that is kind of synonymous with healthy and it's a vague sort of healthy, but it is something that means healthy. So I think on the right product, if it's standing next to one other product that is effectively the same and you know, yours has antioxidants in it, is that better? Probably with some consumers, that's better.
[00:17:43] Ray Latif: It's worked for buy.
[00:17:45] John Craven: No, it's worked for by it's worked for, you know, a lot of different brands. It's worked for green tea and stuff like that pretty successfully. But, you know, I think that's one example. I mean, for me, the bigger turnoffs are like these brands that it's almost they're selling you like you're drinking like a liquid CVS drugstore or something, you know? And I don't think anybody wants that. I mean, that also is saying, hey, this this isn't going to taste good. Right.
[00:18:07] Ray Latif: I want to see that as a tagline. We're a liquid CVS drugstore. Trademark. Trademark. Yeah, for sure. Well, that's an interesting point about antioxidants sort of equating the word healthy at this point. It's interesting, though, I mean, a lot of the companies that end up using that use that based on what the FDA believes is okay to use when they're calling out antioxidants. And that usually involves a specific vitamin like vitamin C. And you see brands add vitamin C to their products so that they can use the word antioxidants without regulatory anger, I guess.
[00:18:42] Jon Landis: But in my point of view, antioxidant equals healthy, to me, doesn't mean that consumers understand what antioxidants are. It's just been marketed that way to them for so long. If you ask the average consumer who likes to buy stuff with antioxidants, how do antioxidants actually work inside your body? What do they do? What's the science behind them? I doubt most people would understand any of that. It's just been marketed to them for so long.
[00:19:07] John Craven: But that's true with anything. I mean, what actually happens to you when you consume electrolytes? Like that's not something a consumer could rattle off or caffeine. I mean, the difference is that they understand the outcome of it.
[00:19:18] Jon Landis: And at least with caffeine, you can feel the difference.
[00:19:20] John Craven: That's what I'm saying. They understand that there's like a tangible benefit to it. So I don't really think explaining, you know, the science of what it, how it works or whatever, but just again, why you need it. Right.
[00:19:29] Jon Landis: I definitely agree with you that I don't understand what the different milligrams or dosages of antioxidants are good or anything like that. It seems a little silly to me.
[00:19:38] Ray Latif: Well, that's all we have for today's edition of the BevNET podcast. Thanks so much for watching. Thanks so much for watching. Why do I keep saying that? I think it's because I really hung up on those video calls. I'm still in video mode.
[00:19:50] Jon Landis: You're getting into a BevNET livestream lounge mode.
[00:19:52] Ray Latif: Yeah, exactly, exactly. That's a short time away. But no, thanks so much for listening. As always, please send us comments, questions, ideas for future topics to news at BevNET.com. We'll take it, we'll eat it, and we'll consider it. All right, thanks so much.
