[00:00:04] Ray Latif: Hello, and thanks for tuning in to Taste Radio Insider. I'm Ray Latif, the editor and producer of Taste Radio, and you're listening to episode 56 of the podcast. I'm with my BevNET colleagues, Mike Schneider and Jeffrey Klineman. We're recording From The Taste Radio studio at BevNET headquarters in Watertown, Mass. And in this episode, we're joined by Jason Shiver, the CEO of fast-growing sparkling water brand Waterloo, who discussed his strategy for winning within a crowded and highly competitive category. If you like what you hear on Taste Radio Insider, please share the podcast with friends and colleagues. And of course, we'd love it if you could review us on the Apple Podcasts app or your listening platform of choice. You know, I spotted the newest flavor of Hop Tea, which Mike is holding in his hand. I have it. If you're not familiar with Hop Tea, it's a brand of non-alcoholic hop-infused tea. That new variety is called the Hopple Moose One. Is that right? Hopple Moose One. Yeah, that's what it's called. And it has grapefruit in it. This is an interesting can. It's got a very vintage look to it with also modern pop. I like it a lot. Vintage and modern pop. Yeah. I mean, they're bringing, you know, different kinds of styles together on this can. And of course, it's got the not quite yet iconic, but perhaps soon iconic hoplark running bird.
[00:01:19] Jason Shiver: But I think what's most prominent with regard to this package actually is just how strongly it identifies with the craft beer tall boys that are out there. I mean, you know, hop tea came out of the founder's desire to drink something at a brewery while he was on some kind of master cleanse or Whole30 or some other millennial diet. But it's going out nationally in Whole Foods, so it's good to have a product that they can rotate in. I see this also made with a Simcoe hop, which I enjoy.
[00:02:00] Ray Latif: It also makes you double take when you're in Whole Foods because it's in a refrigerated end cap next to like, you know, yerba mate and things like that. So you're like, whoa, there's a beer. Oh, that's not a beer. But you might think it's a beer.
[00:02:12] Jason Shiver: Yeah, well, I mean, that would also be a great place for sort of a double placement. You know, you could have it in the cold section and in the craft beer aisle.
[00:02:22] Ray Latif: I tried it, DNS. DNS. DNS. Jeff, Melissa Hartwig Urban, who's the co-founder and CEO of Whole30, might take issue with you calling it a diet. And she explains why in episode 184 of Taste Radio. If you haven't had a chance to listen to that episode, now's your opportunity.
[00:02:40] Jason Shiver: I would love to hear your summary as to why it's not a diet. Could you give me the raised version of Cliff Notes?
[00:02:47] Ray Latif: This is a tease to listen to the episode. So Hopti was the winner of the 16th edition of BevNET Live's New Beverage Showdown competition. That was almost a year ago. Time flies, right? Because we're only about six weeks away from BevNET Live Winter 2019, which will take place on December 9th and 10th at the Lowe's Santa Monica Beach Hotel. A lot of great speakers already announced. Jeff, you're overseeing the agenda From The event. Who do we have on tap?
[00:03:14] Jason Shiver: Well, in addition to the folks we've already announced, we're going to be pulling in a discussion on licensing and sort of earned media and taking advantage of trends and also innovation, all in one panel that brings together the CEO of Dixie Elixirs and some of the creative team behind Arizona and also the guy who brought them together, who's actually their communications firm, and how you sort of knit together ways for brands to develop partnerships and get a lot of attention by leveraging not just one brand, but two. So can one and one make three for companies? Jeff, you said in addition to, who else do we have on tap? Well, those of you who are not receiving our emails on a regular basis. would know that Clayton Christopher and Tyler Ricks and Elizabeth Stevenson of Fiji Water and the owners of Brew Doctor Kombucha are all headed here.
[00:04:35] Ray Latif: Matt Thomas, chill dude.
[00:04:36] Jason Shiver: Yes, well you know certainly we're going to introduce him as a chill dude. With chilled product, we'll be speaking at BevNET Live along with many others.
[00:04:48] Ray Latif: Do you think he'll be all yerba mate'd up? Well, it'll be interesting to hear Matt's take, if this is a question you'll ask him, about shelf-stable kombuchas, given that, as you mentioned or alluded to, Jeff, that BrewDoctor is a refrigerated product.
[00:05:02] Jason Shiver: Yeah, we're actually going to be speaking about major changes that take place as brands grow and how you really think about your business in terms of priorities when you've moved from really early stage scratching it out entrepreneurial to scale and how you keep an organization together, how your brand platform changes and how you think about innovation.
[00:05:32] Ray Latif: Well, I'm attending BevNET live. Look at me, I get to go for free. I was going to ask if you're paying. I know. But if, but for those of you who are not employees of BevNET, if you haven't yet registered for BevNET live, now's the time to do so. You can save $200 if you register. Time's running out though, Ray. If you register by next Friday, that's October 25th. Also on my table here, I've got Owens Craft Mixers. The product I have in my hand is their grapefruit and lime variety. This company just raised $3 million in a Series A round of funding. You can read all about it on BevNET.com. Also, I've got in front of me a package of Wright Rice. This is a rice that's made from vegetables. It's a blend of lentils, chickpeas, peas, and rice. The founder is Keith Belling, who's also the co-founder of a brand many people know. It's called Popchips. You might recall our interview with Keith in episode 166 of Taste Radio. If you haven't heard it, check it out. Keith is also going to be speaking at Nosh Live at Winter 2019, addressing many of the common questions that entrepreneurs grapple with, including best practices like how to adjust a changing playbook and starting an emerging brand. Speaking of Popchips, there's some big news about that brand. Last week, VMG, the influential private equity firm, announced the launch of a new platform What Will acquire, incubate, and grow snack brands. That platform is called Velocity Snack Brands, and its first acquisition was, you guessed it, Popchips. Interesting move by VMG, which has invested in many successful and fast-growing food New Beverage brands, including Justin's, Spindrift, Humkombucha. What do you think of this decision by VMG to get into this business of acquiring and incubating brands?
[00:07:23] Jason Shiver: The big issue is can they create this sort of back office leverage that allows them to put a lot of brands out into the field while bringing certain functions like marketing and finance and operations together behind a centralized unit. It's interesting, because we've been talking about this for years, this idea of you could call it a roll-up, you could call it a sort of, you know, combined-use portfolio. But the idea that you could shrink some expenses and time costs into one back office has always been out there. Memorably, North Castle did it behind Naked Juice.
[00:08:17] Ray Latif: We see Halen brands, they do it with From The Ground Up and also Owen.
[00:08:21] Jason Shiver: Absolutely, that's a very good live example. Part of the question is, what's the ultimate end game there? There was a lot of talk of roll-ups in the past as something that you could take public or sell off. That happened with the company that was backing Skinny Pop, Amplify brands. I think that there's also changes in the private equity world right now, and folks are trying to figure out ways to create value for their limited partners in a variety of ways.
[00:08:58] Ray Latif: What sort of changes in the private equity world? Are you seeing a decrease in investment or increased investment?
[00:09:03] Jason Shiver: I think there are a few changes. One of them, I am going to give a shout out to one of my favorite news sources, Axios, right now. One of the discussions on that particular publication was whether or not an Elizabeth Warren presidency could really put the screws to the margins generated by private equity firms. Beyond that, there are a ton of brands out there. And there are a ton of people trying to play in food New Beverage. You know, you talk to the private equity and the VC guys, they all complain that valuations are way up. What Will think is interesting is that so many brands have been started that there are a lot of orphans. We saw that a few years ago when someone was able to buy sweet leaf tea back from Nestle. And for all the length of time that Popchips has been out there, it's kind of been an orphan walking around in these waves of different ingredient snack products. And it never really found a strategic home. It followed the sort of vaunted Rohan Oza playbook of get some celebrity investors on board. You know, memorably, it was Katy Perry pushing pop chips.
[00:10:29] Ray Latif: Such a nice person.
[00:10:30] Jason Shiver: Yes, delightful. And although, strangely enough, they didn't do a Bragg's tie-in to their salt and vinegar flavor. That would have been interesting. Could still happen. I'm sure she owns a lot of shares still. But the point is that. It never caught the velocity that Vitamin Water did and now I think it's seen much more as a building block kind of brand that you can start to add other products around as opposed to a high flyer that Pepsi or someone would immediately take out and give a lot of shareholder return. And I think there are a good number of brands like this that are floating around out there and that with the right operators and certainly Amit Pandey is one of the nicest guys in the business but also a very smart operator.
[00:11:35] Ray Latif: Amit who is the CEO of VSP.
[00:11:38] Jason Shiver: Yes. And the former CEO of Arctic Zero, one of the nicest guys in the business, also very intelligent, former private equity guy, he gets this. There are a lot of these brands that are starting to float around, and there are only so many that can get off onto the strategic exits. So, there may be opportunities within private equity for them to thrive if they're able to cut expenses and expand margin.
[00:12:14] Ray Latif: For me, it's a question of, you know, how much muscle are they putting behind this in the early going? What kind of hiring have they done? I mean, it's just a fascinating step for VMG.
[00:12:24] Jason Shiver: So one of the things that VMG specializes in is really building crews. And one of their most important value adds is in the talent department. Cassie Nielsen's department. Cassie Nielsen's department. And I think that that's one of the sort of hidden parts of this is that they'll be able to leverage a really strong Rolodex of people to build velocity behind these companies.
[00:12:54] Ray Latif: Yeah, I'll be curious to see if they can sort of breathe new life into Popchips because as you mentioned, it's sort of just been out there for some time and seemingly been passed by. other really innovative snack brands. I never let them pass me by on JetBlue.
[00:13:11] Jason Shiver: Are they still on JetBlue? No, Popcorners is on JetBlue.
[00:13:15] Ray Latif: Yeah, you're right. I got that wrong. I got that wrong. Popchips, Popcorners, that's a problem with these brands. It's just so close. Too much popping.
[00:13:22] Jason Shiver: Oh my God, too much popping. Once you start popping, you can't be stopping.
[00:13:26] Ray Latif: Okay, well, on that note, I think it's time to get to our interview with Jason Shiver, who, as I mentioned at the top of the show, is the CEO of sparkling water brand Waterloo. Waterloo debuted in September of 2017 and is positioned as a healthier and more flavorful alternative to competing brands. Backed by high-profile private equity firm Kabu Venture Partners and led by a team of experienced operators, including Jason, an industry veteran whose resume includes roles at Arizona Beverages, Glutino, and Skinny Pop, Waterloo has pursued an aggressive growth strategy. In just two years, it has become one of the leading sparkling water brands in the natural channel, and it's carried nationally at Whole Foods and The Fresh Market. In the following interview, I spoke with Jason about Waterloo's fast start, why he and not one of the brand's founders was tapped as CEO, how he's applied lessons from past work to his current role, and why the company set out to hit the ground running. He also addressed concerns about added natural flavors, the challenges of managing rapid growth, and how he establishes and communicates metrics for success. Hey folks, it's Ray with Taste Radio. I'm on a call with Jason Shiver, who is the CEO of Waterloo. Jason, thanks so much for taking the time to speak with me. And thanks for having me. So Waterloo, a relatively new brand on the market, been around for a couple of years. For folks who are not familiar with the brand, can you tell us a little bit about it?
[00:14:53] Venture Partners: Yeah, absolutely. You know, Waterloo was really the brainchild of a guy by the name of Sean Cusack, who, you know, it's a pretty personal story, so I don't answer this specifically. I definitely defer to Sean on some of this stuff. But somebody close in his family has a lot of health issues and really a lot of them being tied directly back to diet and just making poor choices and sugar being a big part of that. If you know Sean or if you've ever met Sean, he's a guy that's in great shape. He definitely takes care of himself. He watches what he eats. But one of the things that Sean noticed was the abundance of sodas, obviously, in the refrigerators of the places that he would go. And also, just really sparkling water wasn't satisfying him. He felt like he was sacrificing when he would drink it. So he had this idea, and he kind of got together with Clayton Christopher, if you don't know who he is. You probably do, I'm sure.
[00:15:45] Ray Latif: We've had Clayton on the podcast, the co-founder of Sweet Leaf Tea, of Deep Eddy Vodka, well-known now for being a venture capitalist with Kavu. So yeah, Clayton's well-known to us, but for folks who are listening who are not familiar, you should look him up because he's a pretty amazing guy.
[00:16:03] Venture Partners: Yeah, absolutely. And, and Raymond, you probably know, I mean, Austin's just a, it's a big, small town. And so everyone seems to know everyone here. So Sean reached out to Clayton, understanding the success that he had and, and he and Clayton kind of joined forces. And, and I got pulled in via Clayton and I, I just saw this great opportunity and you know, the branding around it and just the people that were going to be around and the quality of the, the folks that are, that were going to be around this brand. And I just said, this is something that I have to do. So I was super excited. You know, we, we set out to really We definitely don't want to be a Me Too brand. Hopefully, we've shown some leadership in that front because we did some things that were a little bit different when we launched Waterloo. We put some attributes around it that at the time weren't being widely used or used at all in non-Gmail project verification because of natural flavors, which I'm sure you're going to ask me about at some point in this podcast. But in addition to that, you know, the BPA free cans, we just thought that that was important as well, given some of the health concerns that people had around BPA. And then we also just talked about how can we do this without people feeling like they're sacrificing? So we know that there's a flood of people coming in from carbonated soft drinks, but there was really nobody that was really answering that question because most people, you know, some of the big guys, right, are just gonna follow what's currently in the marketplace. And so that's that real faint tasting, sparkling water, which had been around forever. And we just wanted to change it up. So while everybody was zigging, we kind of zagged and put out a bolder-tasting, better-tasting product, we believe. And taste, they always say, is subjective. But in this category, it's not really that subjective, we don't believe.
[00:17:43] Ray Latif: So you mentioned that Clayton brought you into the mix for Waterloo. You've had a pretty long career in food New Beverage. Can you talk a little bit about that career, where you've been, some of the roles that you've had and how they apply to your current job at Waterloo?
[00:17:58] Venture Partners: Yeah absolutely. You know just like many college kids right. I was going to University of South Florida getting ready to graduate waiting for all those mega offers that you think you're going to get. And when those didn't come I ended up literally running a route for Arizona iced tea and spent about a year and a half out on this route. really learning the business. And, you know, that was at the time of the New New Beverage wars with like SoBe and Snapple and Arizona all going after it. So it was a really interesting time in that space. And so I did that for a while, ended up rising through the ranks to national account manager. And then after a while, you know, I felt like I had done all that I could do there. And Don Voltaggio gave me, you know, like a really good education on really how New Beverage category works. And From The, I ended up, you know, during the low carb craze, I saw the rise and fall of Atkins and really the resurgence of Atkins as well. Did things like gluten-free with glutino, and glutino was kind of tip of the spear on the gluten-free side, just as that was starting to really rise up. And then, you know, ended up eventually at Skinny Pop, and we came in and helped the founders, Andy and Pam over there, wonderful people. But we went in there and we helped them build up their business, which led to a transaction eventually going public and then another transaction with Hershey's. And through that whole process, I felt like I got really a PhD in everything that can go right and everything that can go wrong. I feel like that. So hopefully we don't see anything else that's a surprise.
[00:19:28] Ray Latif: Well, hopefully indeed. It's interesting that you came on board as a CEO for a young company. I mean, you were on board pretty much From The launch, right?
[00:19:37] Venture Partners: I was, yeah. I started on the business in June of 2017. That's when I first started working on it. It was official August 1st of 2017. We shipped our first product in, you know, later August of 2017. And we were on the shelves in places like Whole Foods and Central Market, as an example, right out of the gates in September of 2017, approximately.
[00:19:59] Ray Latif: So usually when an entrepreneur starts a company, the founder is the CEO. Why did Waterloo start with someone who wasn't one of the founders as their CEO?
[00:20:09] Venture Partners: You know, it's a unique process. And I really think that was probably Clayton's influence. I mean, Clayton saw the opportunity as well that, you know, trying to bring Sean's dream to a reality and really Clayton's as well, because, you know, he's got a lot of foresight into this stuff. And he does know as, you know, some of us do know that when you're working with founders, there can be some challenges, right? And there's lots of potholes that people can step into. And so I think with our experience and some of the things that we've done in the past, you know, we can give it a much smoother ride And so Sean being the humble guy that he is, he kind of stepped to the side and Clayton offered me the CEO position. So, and it was at a time that honestly, I really was not looking to jump right back into anything. I was wanting to take some time off because we had just fit so much into a short period of time over there at Skinny Pop slash Amplify. But when I saw this opportunity, I mean, something just told me that this was gonna be a lot of fun and it has not disappointed on that front.
[00:21:06] Ray Latif: So how does that relationship work between the founders and CEO? I mean, what's their role in the company now, given that they are not in charge of day-to-day operations?
[00:21:17] Venture Partners: Well, I mean, they're board members. And so I think that that's an important position for them because they certainly, they're people that I can lean on on different fronts, right? I mean, Sean really didn't have your classic experience in this industry. So, but he offers a different perspective because a lot of times it's not the perspective of what you expect. I don't know if that makes sense, but it's from a different angle. And Clayton is somebody that speaks the Queen's English to me, right? So when I, you know, talk to Clayton, I understand exactly what he's saying, because he's been in the industry for a while. So they've been helpful on the board from a board front. And I talked to, you know, both of them regularly, and Sean, I talked to on a daily basis.
[00:21:57] Ray Latif: Waterloo launched with relatively significant resources for a startup. Can you talk about the importance of coming in and launching a brand with the necessary financial resources to get off to a quick start?
[00:22:10] Venture Partners: I have so much respect for those entrepreneurs right there that try to go it alone. It's really difficult. And I think through the first process they end up giving away a big portion of their business because they make the common mistakes that many do. Right. I mean it's it's very daunting to try to launch a product. But you know I think for us specifically. just having the necessary resources to not only be able to get the brand off the Ground Up also put the necessary people around the brand. And so I've had the good fortune of working with a lot of really, really good people through my years. And I would say probably 65 to 75% of this company is comprised of people that I've worked with in the past. So we put some good people around it, not only from a sales process, but also that really understood how to go out there and market the brand, but also from an operation standpoint, because we didn't to stub our toe, right? If we go out there and we go get Whole Foods, Kroger, Walmart, Central Market, HEB, you know, in the early terms, the last thing you want to do is go out there and not have the product to be able to give to them or you have some quality issues. So, we want to make sure that we avoided all of that. So, it was necessary for us to be able to launch like that because otherwise you're going through this angel investing, friends and family, you're going alone, you're making lots of mistakes in the early term that costs you a lot of money in the long term. So, We felt like that was absolutely necessary.
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[00:24:07] Ray Latif: So it sounds like it was really important to start running From The get-go. Is that just the nature of the sparkling water category, or is that sort of your approach to food New Beverage in that you've got to run as quickly as you can?
[00:24:24] Venture Partners: Sure. You know, that's a great question because, you know, for us, as we entered this thing, many people will start in a particular channel and really try to rise up through that channel. And we had the good fortune of having Whole Foods take a chance on us early on a national basis. And so that's probably the reason why within the first two years, we're already the number two sparkling water and all of natural. And so, you know, getting going quickly became apparent, I guess, once we started to launch the product, because when we looked around, we saw a closing window on sparkling water. And that may sound weird because you say, gosh, you know, sparkling water, all of a sudden it just became this huge phenomenon in 2017, 2018 is really, you know, as it started to ramp. But I mean, there was a huge influx of private label that came in. There was Pepsi that launched with their bubbly product. And so it started to really close off the shelf space. And so if we didn't move quickly, and if we didn't get people to really believe in us, then we were going to be on the outside looking in. Not to mention the fact that you're trying to work with co-packers that have minimums. And many of these co-packers, they started to get squeezed last year from a capacity standpoint. And we have the good fortune of working with a great co-packer. And had we not had the volume that we had From The early stages, we could have been one of those brands that they consolidated, right? And we would have been left out there with no production or very limited production or some pieced together network that would compromise our quality. So thankfully, we moved at the pace that we did, but that was out of necessity in this category.
[00:25:50] Ray Latif: Nobody has a crystal ball. You can make predictions about what a category is going to look like, but when you are running or sprinting, how do you do that when you're not totally sure of the road ahead?
[00:26:03] Venture Partners: I just, I think that once you have a product and you are who you are, right? I mean, it's in your DNA and it's in the DNA of this brand and this company. I mean, we had a very specific mission that we set out on. And so we're going to stay true to that mission. We have the discipline to be able to do it. Believe me, there's lots of things that get thrown at us on a daily basis that sound very cool. There's probably volume and dollars associated with it, but we're not going to chase that. What we want to be, is something that people can drink every single day. It's them making those small healthful choices that can add up, right? So if we can be a part of that, that was something that we wanted to be a part of without them feeling like they were sacrificing. So what we do know is that people are slowing down their consumption of carbonate soft drinks, but they're not eliminating it. And so what we wanted to be was that alternative for them, right? We can still be that treat. We can even still be a pathway to them eliminating carbonated soft drinks altogether because, you know, as you drink our product, you really, you know, I have a hard time believing that somebody would leave or finish a can and be unsatisfied, but we just wanted to make sure that we were the best at what we did on that front. And so that's been very important to us. We're not trying to guess where the category is going. We're trying to forge ahead with the vision that we had From The start.
[00:27:17] Ray Latif: The category itself, though, is pretty mature and continuing to grow, a lot of it driven by the success of LaCroix. And, you know, we haven't mentioned LaCroix yet, but how do you consider that 800-pound gorilla when you are crafting your business strategy?
[00:27:32] Venture Partners: I mean they're definitely a consideration. I just think that you know one thing that we wanted to be careful of is not to be a me too product. And we also wanted to show leadership. I think that we did that when you consider our attributes right now that you know many are starting to mimic. Right. I mean we've seen you know spend drift move into the BPA free cans and non GMO project verification or you know we've heard rumblings of others that are getting ready to do that. I think it made a lot of sense to us in the beginning because we used to read tons of posts that were, or reviews that were written about every single sparkling water brand, big or small, it really didn't matter. But you also have to be fearless. And I think that because we've done it so many times, I mean, when I was at Skinny Pop, we were competing against Frito-Lay and that's a behemoth, right? And we're seeing those same guys here in this category with Pepsi's bubbly as an example. and LaCroix being a major player out there. We just felt like we could compete with a better product because when you think about a product, I mean, if people have a great experience with that product, they're going to come back for it. And we just knew that if we did all of the small things right, they would add up to one big thing, which would be the best tasting sparkling water that's out there. And if we can get it in their hands and get some awareness around the brand, then we could be a real disruptor in this category. We've done it in the past, and we're finding that same success again here at Waterloo. So call it stupidity, call it arrogance, call it fearlessness. I don't know what it is, but it's something that we just felt like we could challenge the marketplace on it.
[00:28:59] Ray Latif: You mentioned earlier natural flavors and there's been some concern among consumers about what natural flavors represent and particularly in the case of LaCroix, which is by all accounts been negatively affected by this concern. You know, how does that factor in or have you factored that into your growth plans? And if, you know, have there been questions about natural flavors in Waterloo products and how do you address them?
[00:29:26] Venture Partners: what we tried to do on that front, because we didn't see that. I mean, when I was telling you that we were reading all of these reviews, we saw so many of these reviews that mentioned this whole natural flavor concern. And so, was it a consideration for us when we came in? For sure. And that's really what drove us to do the non-GMO project verification, because we asked a third party to come in. and just verify that the products that we're putting into our can are in fact non-GMO and that there's a third party that's verifying that because many times if it doesn't matter who you are in this category many times what you're doing is you have a relationship with what they call a flavor house and you're probably familiar with that and that's a very transactional process We take that process, I would say, many steps further in the fact that we take whatever is being sent to us, and then we start tweaking the formula with other flavors, and we constantly work with it and massage it. I'll use our strawberry as an example. It was probably 100 iterations that we had of strawberry before we got it right, and it was one thing that we changed that really put us over the top. And we typically have those aha moments on these flavors. But the way that we wanted to, and the obviously the flavor houses aren't going to tell you, you know, line by line exactly what's in there, but they will tell a third party. And that's what was important to us. I was shocked that people weren't doing that before this.
[00:30:46] Ray Latif: You mentioned you've been involved in a lot of different food New Beverage brands, and that with Waterloo, it's about doing a lot of things right. It's also about, I'm guessing, not making the same mistakes that you made in the past with other brands, and then maybe you made no mistakes, but that would be a first, I think.
[00:31:06] Venture Partners: I wish.
[00:31:07] Ray Latif: Yeah. So, you know, when you're looking back on some of these other roles that you had with these other companies, are there any comparisons to challenges or mistakes or pitfalls that you had encountered in those companies and those brands that you can apply to Waterloo and say, okay, we see this as a potential problem. Let's avoid it.
[00:31:30] Venture Partners: Well, first of all, certainly I've made mistakes in my past, and I've also witnessed the mistakes of others. And so when you get close enough to it, like I was with Atkins, and I would say that was the one where I was like, wow, man, I've never been through something like this. That was where I felt like I got my PhD, because I'd been through this crazy growth where we quintupled our business overnight. And then this free fall that happened afterwards for a lot of reasons. But I would say that management team had some ownership of that. And I was being promoted as this stuff was happening. And I really got an opportunity. I mean, we went through bankruptcy. There was a lot of things that we did. We went through an acquisition process. But at the end of the day, I can say that A, when you're in a explosive growth company, you really need to invest in not just your sales team but really in your ops team. It's a big part of our business that we have a lot of sophistication around. You know we didn't want to disappoint our retailers. We also don't want to disappoint our consumers that might have a poor experience because we're not keeping our eye on the ball on quality or we get with the wrong copacking partner. So we drew upon a lot of these experiences from our past. to help us through some of that stuff. And also there was a rapid amount or an explosive amount of new SKUs that that Atkins launched all at one time. I want to say gosh I mean we had over 100 SKUs at one point. And I just said this is crazy. Like it's really hard to focus on all those things that I just talked about if you have way too many SKUs. So we're not going to be that sparkling water brand. that's going to be running around out there with 20 SKUs. That's just not us. But what we will do is we'll have a nice base, call it 10 SKUs or 10 flavors that are going to be just high volume, you know, 10 SKUs that are going to have a great taste. And we'll have, you know, a focus on every aspect of making that product as perfect as we can make it.
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[00:34:33] Ray Latif: Brands that say they are building to sell. When you're talking to your team about metrics for success, and sort of a long-term goal, long-term vision From The brand. How do you talk to them about that? What does that sound like?
[00:34:47] Venture Partners: Well, I think what we've done really is we've established a great work environment here. We take care of our folks. We pay 100 percent of their medical and their benefits. We have, I think, a really great culture and people talk about it, but our culture is real because a lot of us have worked together before in the past. They kind of know what the end outcome could be, but that's the reason why every single person in our company is an owner. And so that's a little bit different than some of the other places. Listen, you know, we could try to hoard those shares for senior management or for investors. And we don't do that. We actually share with the employees of the company because if in the event of a sale and that's a that's an if we can't tell if this, you know, if in any situation it's going to sell. But I would be disingenuous if I told you that it will never sell, because I think that I don't think that there's really many people, if any, I can say that. But if there is a sale, then there's an opportunity for people that have worked really hard for you over the course of years, and they're spending time away From The families, and they're spending a lot of time trying to build what they believe is the best brand out there. Then you can change their family's lives in the event of one of those sales. So that's the reason why we share with everyone. That's just kind of the environment that we've always wanted to build, and we're proud of that.
[00:36:07] Ray Latif: As far as I can tell, and I could be wrong, this is your first role as a CEO, right?
[00:36:13] Venture Partners: It is. It is. Yeah. Thanks for noticing.
[00:36:16] Ray Latif: Well, I mean, you've been, you were the president of Amplify Snacks, president of North America, but, um, you know, sort of climbing that corporate ladder, whether, you know, not necessarily the same company, but getting to this point of running a company, did you always want to become a CEO and, you know, how did you prepare yourself for this role?
[00:36:37] Venture Partners: You know I would say ever since Atkins I had an opportunity to be a major voice in any decision that was made at any company that I've been with. But I wasn't the ultimate decision maker. And that was always something that I wanted something that Clayton was gracious enough to give me the opportunity to do. Because I've always thought about things just slightly differently than some of the others that you know were before me as my CEO. So I always had tremendous amount of respect From The CEO that I that I work for. But at the same times I many times I had differing opinions on on some of the things that they were doing and some of the ways that I would like to approach it. And so this has been really the culmination of lots of thoughts. And I wish I could do this. I wish I could do it. Now I can do those things. And so I'm feeling really good about this process. I think I've been prepared over the course of time. This has probably been a long time coming for me. But I also stayed in those roles because I love the people that I was working with. I also love the brands that I was attached to. And so maybe I could have had this opportunity. And I know I could have had this opportunity before this. But I just think that, you know, there's a time and a place and this was the time and this was the place. And again, Clayton and John were gracious enough to give me this opportunity and hopefully they're happy that they did that. And, you know, I think that we have a lot to be proud of.
[00:37:53] Ray Latif: Well, it sounds like you had some pretty good mentors working with Don Viltaggio and then with Clayton Christopher. Absolutely. Any tips that they gave you as on your journey? And if so, could you share any of them?
[00:38:06] Venture Partners: Yeah I mean you know working with Don he's a street smart guy. You know he always was captivating. He's a great storyteller. You know I love some of the things that you know that he would tell me. But I think just in general and the people that you respect when you're working with them I think that you know, it's okay to be a plagiarist every now and then, right? Because there are certain things that you hear and the way that they're being said that you say, my gosh, man, I really, I really like that. I like the way that that, that sounds. And I also like the way that they perform their, their duties, but it's just a little piece of all these different people that, you've been around in your career that you really respect and that you you know you admire. So whether it be Clayton or whether it be Don saying very specific things the one thing that I would say is that they've they've allowed and empowered me to do some of the things that I've learned From The or others. And they've kind of gotten out of your way a little bit. Clayton will redirect me here and there. And I think that's all really helpful good stuff. But ultimately just having trust in one another. And I'm not answering your question specifically I guess. But I am saying that ultimately it's not just Clayton and Don. It's been a lot of people that I've kind of taken a little piece of that I've admired in my career. And so that's kind of helped guide me through this process.
[00:39:21] Ray Latif: Well, if we can take a moment, I'd like to flesh out this notion of trust and people getting out of the way of people who can actually, who are actually doing the job.
[00:39:30] Venture Partners: Yeah. I mean, trust is, trust is huge and it doesn't, it's my trust in the, in the people that are, that are with me because I do trust and empower. I think that that's really important. I want to be treated the same way by the people that are above me, but there has to be a certain level of trust because you're taking somebody's idea And you're taking maybe millions of dollars of people's investment that they've worked hard for. And you're trying to put all that together. And they need to trust you. That's one of the first things. The board needs to trust you. Your major investors need to trust you. The founder of the company needs to trust you with their baby. There's a very personal thing there. When you're taking somebody's idea and you're trying to bring it to reality, but that same goes true or holds true From The folks that are that are around me that we talk every day, but I defer to them because they are specialists and their respective. disciplines. So, but there's a tremendous amount of trust that I give to them on that front. And you just have to, if you don't have that, then you're going to be a micromanager. You're going to be somebody that's trying to dig into everything. And that's not a great work environment. If you have really good people around you, which I do, they just make you so much better. So, if you just focus on the lane that you're supposed to be in and then let everybody else keep the lane that they're supposed to be in, I think it just makes for a much better experience through the process.
[00:40:45] Ray Latif: Well said, and well said throughout this conversation. Jason, really, really appreciate the time. Good luck going forward with Waterloo. I know we have it here in the office every so often, and it goes pretty quickly. So I have a feeling there's a bright future From The brand.
[00:41:00] Venture Partners: Thank you so much, Raymond. I appreciate your time and giving me this forum.
[00:41:03] Ray Latif: Outstanding. That brings us to the end of episode 56 of Taste Radio Insider. Thank you so much for listening, and thanks to our guest, Jason Shiver. Please subscribe to Taste Radio Insider on the Apple Podcasts app, Spotify, Stitcher, SoundCloud, or Google Play. As always, for questions, comments, ideas for future podcasts, please send us an email to askattasteradio.com. On behalf of the entire Taste Radio team, thank you for listening, and we'll talk to you next time.
[00:41:37] SPEAKER_??: you
[00:41:43] What Will: Hello, I am Melissa Traverse, here From The Taste Radio podcast, talking about some of the biggest tension points that CPG brands and founders face when they're scaling a brand, and those are financial accounting and inventory management. I am joined by Matt Lynn, inventory accounting guru from Belay Solutions, and he is going to shed some light on all of this that is going to help everybody out quite a bit. Matt, thank you so much for joining us today.
[00:42:13] Ray Latif: Thank you for having us, Melissa. It's great to be out here at Expo West and it's great to sit down and be able to chat this because it's kind of a passion project of ours, working mainly with CPG brands and hoping to help them scale.
[00:42:25] What Will: It's been such a pleasure chatting with you and the team and learning all about what you do over there at Belay Solutions. Can you tell us a little bit about yourself and what your role Foods and The kinds of solutions that Belay gives to CPG brands and founders?
[00:42:40] Ray Latif: Yeah, absolutely. My role with Belay, I'm actually our inventory accounting manager. I run our inventory department, so we work with CPG brands, taking them from spreadsheets, putting them on inventory management systems, and really helping connect their tech stack between their sales online marketplaces to that inventory management system, even down to their financial systems like QuickBooks. Belay overall is kind of an outsourced accounting firm. And with that, we're helping teams. We have different levels with bookkeeping, controller level work, even high level into CFO type items. So we really help those brands in any way that they need financially. And then I just have a subset of a department where we're really just laser focused on inventory.
[00:43:23] What Will: It's certainly a complex topic and there are plenty of places to go wrong. Let's start by going right and start super simple. Can you tell us what some of the biggest red flags are that would help a founder understand or, you know, the person running a brand understand that it really is time to get some help with some of these areas?
[00:43:44] Ray Latif: Yeah, absolutely. I think some of the early red flags is just everything is chaos. So when they're looking in their financial software, maybe they don't really have an accounting background, and they're kind of just piecing it together and doing their best. And what they'll see is that reconciliations take forever, if they even happen. They have a lot of transactions that don't get coded, or they just put them into placeholders to just get rid of it so it's not an eyesore. they'll notice they have revenue but no cash or they notice that they have a good amount of cash but their blind spot is really seeing the vendor invoices that are sitting there just needing to be paid and so they just lack that clarity that's going to really be around the corner.
[00:44:21] What Will: You know, you were talking about one of the red flags that comes up that I think makes so much sense. When somebody asks you what your numbers are and you can't come up with the right number, that's a big problem because that's something that you really should be able to share with decision makers who, you know, you're ideally looking to do business with. What should you be able to call up at a moment's notice?
[00:44:45] Ray Latif: really at any time, you should be able to know an accurate margin. It's amazing how many founders we end up talking to that they can tell you their revenue numbers, they can tell you their selling price, and then the minute you start talking about cost or their cost of goods sold, they just get a deer in headlights look. So really it's very hard to tell, am I even making money? or if you don't know your entire landed cost. Maybe you know what The Fresh cost is, the duties separately, but you're not really getting that as part of your unit cost. So it's really hard to tell. Am I even making money or am I losing money From The very beginning?
[00:45:18] What Will: And do you recommend that founders are able to call up a margin by channel?
[00:45:23] Ray Latif: Absolutely. And depending on the number of products and channels, you kind of want to know what are your best sellers, which ones are making the most and which ones maybe you're not making as much. But especially if you're branching out and you're doing D to C with B to B, absolutely want to know that.
[00:45:40] What Will: Gotcha. You mentioned that when things feel really chaotic, that's probably a red flag. I would say that it probably almost always feels chaotic if you're running a CBD brand. And I know this may be hard to quantify, but is there a revenue number? Is there a number of doors number that would help a brand understand whether or not it makes sense to bring on a partner like Belay? Understanding that so many brands are bootstrapped or they might be tight for cash. What is that friction point?
[00:46:10] Ray Latif: 3 3 3 3 3 But as you're growing, as you're getting to those six-figure revenue numbers, and especially as you're approaching seven, you want to make sure you've got good financials. Because as you scale to that point, most likely you're going to be looking to raise capital. And investors, the first thing they're going to look at is your books. And are they clean? And do they show a clear picture of your business?
[00:46:43] What Will: You know, another area that folks might look to to organize some of the chaos are their systems. So many folks stick with Excel spreadsheets for a good amount of time. How do you know that you need to outsource some of your accounting to an organization like Belay Solutions versus maybe signing on to a Synth7 or NetSuite or something like that?
[00:47:05] Ray Latif: Well, that's actually something we really help with when it comes to that cost question. That's something that trips people up. And sometimes if you just have a turnkey business, you buy and sell a finished good, you can maintain with spreadsheets. And we've had clients with million dollar revenue that can do that. But we see so many brands nowadays are using contract manufacturers. and they're just sourcing certain parts of their product. So when you start talking cost, they have no idea exactly what their unit cost is. So that's where we come in and we kind of understand, we'll speak with the customers and the clients and get their needs. And then if we think they're ready for a system, then we'll help put them on that system so they can get some of that clarity. And it's not something we force on anybody. There are plenty of times where founders come to us and we'll tell them bluntly, you're not ready for it right now, but we'll let you know when we think you are.
[00:47:51] What Will: That sounds like excellent advice. What should a founder or somebody running a brand look for in an outsourced accounting partner? Are there certain checklist items that they should make sure that their partner be able to execute or be able to help them understand?
[00:48:08] Ray Latif: Absolutely. I think one of the keys, there's, there's a lot of outsourced accounting firms out there. Some focus on service-based SaaS companies, but if you're a CPG founder, you really want to make sure that your accounting firm has CPG experience. I would ask them, you know, what kind of brands have they worked with? And even beyond that industry specific, because there's so many subsets of CPG. And that's something that I think is great about what we do with Belay is that we kind of run the gamut. It's kind of like the insurance commercial. We know a thing or two because we've seen a thing or two across a broad spectrum.
[00:48:38] What Will: Probably getting references is always helpful, right? Absolutely. All right. So this all sounds great. I think we have a really good understanding of would it make sense to hire an outsourced partner? You know, what some of the things you should be looking for are. What does offloading this kind of work mean From The brand? What can this do for lightening the load of a founder or lightening the load of a brand operator? Like, how does that help them in their everyday business?
[00:49:07] Ray Latif: It just tries to really help quiet the chaos. So what we're looking to do is just take some of the weight off that founder's shoulder, let them focus on building the brand, building the business, getting that exposure. If you don't have sales, you really don't have anything. So we want them to be able to focus on that while we take care of your back end office work. And we can just present that to you on a monthly basis, you can help make decisions, you can take that to investors. And really, you can just focus on growing your business.
[00:49:33] What Will: I feel like I felt Foods and The folks who are running brands collectively sigh. A breath of relief just hearing that. How can people learn more about Belay Solutions?
[00:49:44] Ray Latif: So people can text TASTE to 55123 for their free inventory guide to get started.
[00:49:49] What Will: Matt Lin, Inventory Accounting Guru at Belay Solutions. Thank you so much for joining me here at Expo West. It's been such a pleasure to chat with you and learn about what you all do over there to help founders and brands with their financial accounting and inventory management. For everybody else out there, thank you for listening to the Taste Radio podcast. I am Melissa Traverse and we'll see you next time.
