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Hello and welcome to the advice line on how I built this lab.
I'm Guy Raz.
This is the place where we help try to solve your business challenges.
Each week, I'm joined by a legendary founder, a former guest on the show, who will help me.
Try to help you.
And if you're building something and you need advice, give us a call and you just might be the next guest on the show.
Our number is 1-800-433-1298.
Leave us a one minute message that tells us about your business and the issues or questions that you'd like help with.
All right, let's get to it.
Joining me this week is Bill Creelman, the founder and chair of Spindrift.
Bill, welcome back to the show.
Thanks, Kai.
Great to see you.
It's great to have you.
You were first on the show back in 2020 to talk about the origin story of Spindrift, and then you came back on later on, during the pandemic, I think.
And if you guys missed either of those episodes, we'll drop a link to them in the show notes.
Just a great story.
Before Spindrift, you actually had a whole different life, Bill.
In the 90s, you were selling smoked fish and jams and ice cream.
And then you eventually pivoted into cocktail mixers.
You start a small little brand, which became a big brand, and you ended up selling that to Diageo.
And then there was a period of time where you were kind of drifting and trying to figure out what to do next.
And You started squeezing fresh lemon juice and grapefruit juice into seltzer water.
And then that led to a new idea for a new kind of soda.
And before long, of course, Spindrift was born.
And we talked about how you got into Trader Joe's.
And that was sort of the first big step toward building an amazing and iconic brand that I am a big fan of and I consume many cans of every day.
So just an amazing story.
Well, thank you.
Yeah.
And so it goes.
I mean, trying to... find seams from the consumer side, from the business side.
And it's been a circuitous journey, but one that I've really enjoyed.
And the big news this year is that a majority stake of Spindrift was sold to a private equity firm called Griffin.
The deal reportedly valued the brand at around $650, $700 million.
So congrats on that.
Yeah, thanks.
We're thrilled.
I mean, it's you know, We really think about it as a partnership kind of the next stage in the business.
Griffin's coming at an important time as we're gearing up for our next stage of growth.
So it's been really fun to have their input and new ideas around the table, which is, as you know, is so important for growth.
Bill, before we bring our callers in, I want to ask you a couple of questions.
And one of them, because it may come up today, was – and this was –
Anybody who hasn't heard this episode should go back and listen to it, because one of the most interesting parts about our conversation years ago was the discussion we had around the challenge of basically making shelf-stable seltzer water using fresh juice, squeezed juice and not chemical or even quote-unquote natural flavor enhancers, which a lot of the other brands were doing.
And this was a huge challenge, right?
You had to kind of overcome, even though it would have made you know you could have probably gotten away.
I mean there are lots of brands out there that do it with just using quote unquote natural flavors.
Why were you such so hard line about that, about not, you know, not doing that?
Well, you're right.
I mean, you know, sparkling water is an old category.
There are lots of products that were flavored with natural flavors.
And so, you know, we really first we thought it was important from a kind of a foodie perspective.
You know, I am stubborn about ingredients.
And in the beginning, that stubbornness led to all kinds of challenges.
I mean years and years of how do we do it, building a supply chain around it.
You know, really kind of laboring against the odds.
What ultimately emerged is really our key point of difference.
And today, you know, we've really embraced that idea.
We sort of stand still kind of on our own but really is sort of where we believe you know food and ingredients should go which is as unprocessed as you can make them.
Yeah.
Well, in the early days of Spindrift, you actually had two products.
One was basically the Spindrift that we know today.
And the other one had sugar.
It was kind of more like soda.
And that sweeter one actually outperformed the Spindrift one.
But you dropped that.
You dropped the sugary one, which seems almost counterintuitive, right?
Why would you drop the one that's selling better?
But, of course, it was a decision that would bear out.
But why did you – can you explain why you made that decision in the early days of the business?
Well, we did it because we thought it was – going to be confusing ultimately for, you know, to have somewhat similar products, one with sugar, one without, but it was, it was really going back to the learnings from stirrings.
You know you just can't do it's hard enough to make one brand successful, but to have two brands you know early stage brands succeed mean something for the consumer.
Go on to really gain scale and traction is is really almost unheard of.
And, And I think what we felt was that the sparkling water brand was eventually going to be recognized as being just as delicious as the soda.
It just was going to take consumer a little while to get there.
And, you know, that was that belief that really led us to that change.
But you basically were saying, let's cut off a significant revenue stream.
Yeah, about half our revenue.
I mean, it's kind of nuts, right?
But you believe that in the long run, of course, that would pay off.
Yeah.
We had no evidence.
It wasn't like we did a consumer study or we didn't talk to the market.
It just for us.
It was, as sugar was starting to become more and more on people's radars.
2012 13, 14 years.
And really the people that were enjoying the sparkling water were in love with it.
You know couldn't get enough, or buying it hand over fist.
It was like a tiny group of really passionate people.
And what I always refer to as sort of the white hot center, just seemed a lot clearer on the sparkling water than it did on the soda.
The belief we have is that, with the sparkling water, we are able to to bring people along and have them not miss the sweetness.
And it took some time.
Obviously, here we are 15 years after starting the business.
But we think there's the opportunity with some of these other categories.
Sugar is a very one-dimensional flavor.
So if you can introduce other flavors alongside, a little sweet, a little tart, we think you won't miss that big hit of sugar.
That's really kind of the starting point for all of our development.
Awesome.
Cool.
Bill, you ready to take some calls?
I'm ready.
All right, let's do it.
Let's welcome our first caller.
Please tell us your name, where you're calling from, and just one line about your business.
Hey, Guy and Bill.
I'm Josh Jankowitz calling from West Hollywood, California.
I'm the owner-CEO of Donna's Pickle Beer, and yeah, it's exactly what it sounds like.
We mix pickle brine with a light, crisp lager, and it's named after my mom, Donna.
I love it.
Josh, welcome to the show.
Donna's Pickle Beer...
And it is exactly what it sounds like.
It is beer flavored with pickle juice.
Exactly.
We make a light lager and we make pickle brine about 20 miles away from the brewery.
Yeah.
After we brew the beer we put the brine in and we put in a really fun packaging that has a nostalgia feel from the 1940s.
I got to say there's something about those flavors that is working for me, because I love pickles and I like a nice light lager, especially on a hot day.
All right.
How did this...
How did this even start?
Tell me the story.
How did you come up with this idea?
Because it's so weird and cool.
A pandemic idea.
I had been running cocktail bars around the country for years.
And during the pandemic, I couldn't sit still and I became a mailman in West Hollywood.
And while I was delivering mail, I really didn't have the opportunity to be creative.
And it's all I like to do.
So I was coming up with different business ideas.
Just throwing toilet paper up at the ceiling, seeing what would stick.
And I happened to be on route one day, and Donna's pickle beer kind of popped in my head.
And I drew our can out on a piece of paper and I sent it to my business partner my now business partner.
I said, what do you think about this?
And he said, this is amazing.
So Donna's your mom and I'm looking at your website and you've got sort of a retro look, which I love.
But how did you...
I mean, what in your brain happened, where you were like pickles beer pickles beer, pickles and beer together?
Like, you know, chocolate and peanut butter.
Well, they made Reese's peanut butter cups, right?
How did you?
I mean, it was just out of nowhere it came up.
Or were you eating pickles and drinking beer?
Well, more specifically, I was in Palm Springs, sitting in the pool of the Ace Hotel with a couple of my friends, drinking beer, eating pickles, snacking around, just talking shop about ideas, since i don't really get.
I didn't get that opportunity at the time since i was always on on foot, walking 30 000 steps a day, delivering mail during, you know, the pandemic, the holiday season, the election.
So yeah, i was just kind of kind of messing around with with different things and enjoying my day off.
I mean, it makes sense right, we like salty snacks with beer.
Okay and, and tell me a little, so you, you started and where did you start brewing this?
So I hit up about 20 to 30 breweries and everybody said no.
Yeah.
This is weird.
They were like, I don't, this isn't going to work.
Is that what they were saying?
Yeah.
Yeah.
They didn't want to do it.
So I finally found a brewery called pilot project and they're based out of Chicago and Milwaukee.
And I pitched them the idea and they immediately said yes.
And we started R and D and it got to the point where now, when people say no to me, it kind of makes me a little happy because I want the person to say yes.
And where is the beer sold right now?
We're now in 16 states.
We should be in 19 states by the end of the year.
We're just waiting for a couple of contracts to come through.
Right.
You gotta go state by state and you can't obviously sell this direct to consumer because it's beer.
How are you, are you, tell me about the flavoring.
I mean, it's you're brewing the beer.
Okay.
That I understand.
And then are you, where are you, are you buying the pickle juice?
Like how are you doing that?
Yeah.
So we're making everything through co-packers, but to our own recipe.
So I threw a pickle party one day before we got this brand launched and tasted my friends on like 20 different pickles until we could finally figure out the best one for this beer.
And then we tasted through a whole bunch of different beers with the brewery to find the flavor profile that fits best.
Got it.
Okay.
So what is your, and tell us before I forget, what's your question for us?
Yes, our brand is growing fast and, as we scale, we're having deep discussions about maintaining authenticity while being conscious of costs.
Specifically whether to keep using our fresh pickle brine made with real dill and garlic, or to switch to an all natural flavor house version.
The fresh brine tastes better and feels truer to who we are, but it's more expensive and less consistent.
The Flavor House option would scale easier and cost less, but it feels less authentic.
Got it.
Okay, so right now, just to be clear, you are using fresh pickle brine?
Yes.
Cucumber essence, that's basically an extract of cucumbers or what?
Yeah, just so we're not throwing so many cucumbers or composting so many cucumbers.
Okay, so basically it's an extract.
So, okay.
All right, Bill Creelman, I want to bring you in here because this is right up your alley.
I mean you guys.
You struggled with how to make sure that you didn't have to use anything but fresh, real fruit.
First of all, questions for Josh.
Well, I mean, this is the great dilemma that happens in beverage over and over.
You start with a great recipe and you're faced with all these sort of shortcut decisions.
And which ones do you opt in and out of?
So you're asking all the right questions.
Like Guy, I love the idea.
I love pickles.
I love marinating with pickles.
You know, we make pickle products at home, so I think the idea has real legs.
I guess...
You know, one of my questions, maybe to start out.
I don't know if this is a category or not, but are you sitting in the set with all the other beers or are you in your own sort of flavored section of the beer set?
We're in with other beers, but, you know, we're mostly on-premise.
We're about 90% on-premise.
It's how I chose to build the brand.
So we are sitting next to, like a lot of Miller Highlifes and a lot of, you know larger, more common beers.
I would say is there a premium attached to to it or are you line priced with some of the beers you mentioned?
Um no, we're a little bit more premium.
Yeah, so bars are buying us for about 39 a case, which ends up being a buck 60 a can, and then usually selling it for about seven, eight bucks.
But we mix really well, Bill.
We mix with whiskey and in micheladas or with hot dogs.
So people pair Donna's with a lot of different items.
How is the business doing, by the way, Josh?
I mean, are you self-financing this thing?
So we're in our first fundraising phase.
We're about halfway through it right now.
But sales couldn't be any better.
We started with 400 cases two years ago.
And now we're selling anywhere from 5,000 to 10,000 cases a month.
The cases are 24 packs.
So yeah, we're doing really good.
It obviously starts as a novelty idea.
I mean, it sounds like something you would see at a fair or something.
But I mean, pickles are hot.
I mean, even if you read any of the trade magazines, pickle, that flavor is performing really well.
I think it's an amazing idea.
I think, To go directly to your question, I mean, I think you know, if you're familiar with Spindrift, you know probably what my answer is going to be, which is like, what is hard right now for you is going to be your point of difference later.
So trying to figure out how to make this brine using all of the ingredients that are called out on the label will only – bear fruit down the road.
Someone's going to come out with another similar product.
It's a real copycat category and you you need something that you can defend.
Ultimately, when you know bars or retailers eventually are making a choice between your brand and something else, in essence will be very easy to add.
If you come up with a brine that's uniquely your recipe, it's going to be, you know, make it much, much harder for someone to repeat it down the road.
Yeah um, You know, when you think about a product like this, this is a really unusual product that jumps off the shelves.
It's like, you know, it's like it's so unusual.
Pickled beer.
Like if I saw this and I guess it's that you have them at some Whole Foods, right?
Yeah, we're in actually a decent amount of chains.
Nothing national, but we have Whole Foods, Albertsons, Total Wine, BevMo, Trader Joe's.
Right.
OK, so if I saw this in the shelf, I would buy it right away just to try it.
But, Bill, I mean, he Josh is going to have to make.
He can't build a company around one flavor, one brand.
Like you couldn't build Spindrift around grapefruit.
That's it, right?
He's going to have to think about, in addition to what he's doing now, the next steps.
What excites me about the product is everyone knows pickles, you know, and I think pickle beer just on its own is relatively self-explanatory.
I haven't tried it.
I would do as much as you can with one product.
I mean, in the beer category, Corona had basically one SKU for a number of years.
So what I also love about it is that if you can build the company and distribution with one SKU, when you come out with your next SKU you'll already have a base of business.
I think it's that interesting actually that there'll be enough of an audience there and your distributors will love you, because you're not asking him to carry 30 SKUs.
You're really asking him for one pallet position in their warehouse.
And I imagine the sale is really easy for them to make.
And if the product pays off flavor-wise, I think you've really got something.
And how does he think about protecting the brand?
I mean, if this really takes off, it's just a matter of time before the other beer manufacturers produce a pickle-flavored beer.
And that's really, I think, why you want to go in.
You want to move quickly.
You want to lock up distributors, ideally, if they're willing to.
You want to try to get some sort of exclusivity everywhere you can.
Maybe you can get a pickle beer exclusivity at your distributor.
You can start to really become synonymous with that category.
And I do think all that's in front of you.
What's happening now is these things are happening really quickly.
With social media and virality, people are learning about products.
So you just want to be ready to move so that there aren't two pickle beer players.
There's only one.
Yeah.
For sure.
Awesome.
Awesome.
Josh, any last thoughts before we let you go?
Just want to say thank you for your time.
Awesome.
Josh Shankowitz.
Congrats.
Donna's Pickle Beer.
Good luck, man.
Have a nice day.
Wow.
That's cool.
It's something that I just have not.
You know, when you see something that you just have not seen before, it doesn't happen that often.
It's a great mashup.
I mean, really, it's kind of... The beer category is looking for new innovation.
I think that could be a really fun entree.
Yeah.
And it's interesting what you said about Corona, because you're right.
I mean, it is one product that we think of, right?
I mean...
Boston Beer Company, you know, started with Sam Adams and then you know they've got tons and tons of different brands.
But I would imagine that Sam Adams is still far and away their bestseller.
It's a big enough category that you have the luxury of having one product and building a really big business around it.
Yeah.
We're going to take a quick break, but when we come back, another caller, another question and another round of advice.
I'm Guy Raz.
Stick around.
You're listening to The Advice Line on How I Built This Lab.
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Welcome back to the advice line on how I built this lab.
I'm Guy Raz, and today I'm taking calls with Spindrift founder Bill Creelman.
Bill, are you ready for our next call?
I'm ready.
All right, let's do it.
Please tell us your name, where you're calling from, and just one line about your business.
Hey, Guy.
Hey, Bill.
Thanks so much for having me.
I'm a huge fan of the podcast, long-time listener.
First-time caller?
First-time caller.
Yeah, that's right.
Okay.
My name is Zach Will.
I'm calling from Marshfield, Massachusetts.
It's a town about 30 minutes south of Boston.
And my company is Kona Brand.
We're an apparel company that makes flannel shirts with tropical aloha.
So we take the cozy feel of your traditional flannel and swap out the plaid and checkered patterns that you're used to for fun.
Aloha shirt designs.
Awesome.
Welcome to the show.
Bill, you know Marshfield probably well because I think you started Stirrings in New Bedford, right?
We did, yeah.
Yeah, I remember that.
Down the south coast.
Yeah, not too far away.
I always think of you when I think of New Bedford.
You and Moby Dick.
That's right.
Two important things.
So, Zach, these are Hawaiian shirts but flannel?
Yeah, exactly that.
We took our traditional New England flannels that's our fashion staple and just swapped out those plaid checkered earth tone colors for the fun.
Vibrant tropical colors and designs of Hawaiian Aloha shirts.
I mean, what a mashup, New England and Hawaii, right?
Like flannel New England.
And then I'm looking at your website so you've got like the hibiscus, you know the classic Hawaiian flower, the hibiscus kind of.
You see that Trader Joe's look a little bit.
How did you come up with this idea, flannel and Hawaii?
Yeah, so it actually started off as a little high school class project.
My junior year, I was 17 years old.
In my marketing class, my teacher told us to come up with a random business idea, but it had to be based off a problem that New Englanders have.
For me.
I have a closet full of Aloha shirts and I only get two three, maybe four months out of the year to wear them before it's flannel season again.
I thought, all right, what is something that New Englanders wear basically year round?
Flannel shirts.
So it just seemed like an easy one plus one equals two.
Make Hawaiian patterns on a flannel shirt.
So like heavy cottons, basically.
Yeah, yeah.
So it's exactly like the flannel that you got in your closet, like same feel, same softness, everything.
But we just swap out the designs.
I love it.
All right.
So you started this as a high school project.
How old are you now, by the way?
I'm 25 now.
Just graduated from college two years ago.
And now I'm living up in Cambridge.
Okay.
So this is what you're working on 100% of the time?
Oh, yeah, yeah.
I took it from high school into college at UConn.
And from there, I entered a bunch of like Shark Tank type grant competitions.
And Yukon gave me $19,000 in funding to get the brand started.
And when I finally graduated, a few years later, I decided to take that leap and make it my full-time job.
Amazing.
So how are sales?
What do you expect to do this year?
So this year, we just broke $140,000 and we expect to do $300,000 by the end of the year.
I found that 80 to 85% of our yearly revenue comes from the holiday season.
So we're in a good spot.
Nice.
And where are you finding most of your success?
I mean, it's direct to consumer, but I imagine you don't have a huge budget to do ad spends.
Are you doing in-person events?
How are you getting the word out?
Yeah.
A lot of it is the digital marketing, meta, Instagram ads, all that.
I just started doing that.
And it really helped Kona Brand jump up and start to scale.
But since the start of Kona Brand, since I got my first flannels in, I've been doing craft shows, music festivals, weekend markets, anything that I can get my hands on, to kind of get the flannels into the hands of the people.
Cool.
All right, before we dive in further, what's your question for us?
Yeah.
So last year, one of my main focuses was finding a marketing manager.
And I interviewed 12 people.
I eventually found one person that I thought was a great fit.
But after a month, I found we didn't partner too well.
So we parted ways.
And since then, I've been very hesitant to hire again.
How do you think I should hire the right person for a part-time role that's usually full-time, like a marketing manager, without burning cash momentum?
Because I don't have the... budget to afford a full time hire.
And you're probably just buried under all everything.
You're doing everything yourself.
You're collecting the boxes, you're shipping stuff out, you're doing all the packaging plus you're trying to run a business.
Okay Bill, this is a perennial challenge for, you know, early stage entrepreneurs.
You're doing everything and you need to hire somebody, but you also can't really manage somebody because you don't have the time to do that.
And also, you have to find the right person.
It's really hard.
Where do you start?
It's really hard.
And I have to say, just off the top, it seems like you're doing everything right.
You're being really smart and conservative and not spending money that you don't have.
A couple of questions, I guess, just to help answer that.
One is, you're going to do $300,000 in sales.
It sounds like a lot of that revenue is going to be generated by DTC.
Are the shows and your event sales...
50-50 with DTC?
What is the breakdown of the sales between the two channels?
Yeah, it's pretty cool.
So last year I would say that my online DTC sales, compared to my show DTC sales, were about 50-50, maybe a bit more leaning towards the in-person shows.
But since starting my online marketing, my paid ads, it's completely switched.
I'd say it's about 75, 80% online ads and then 19, 20% in-person events.
And then I just dabble a little bit in wholesale.
Okay.
Selling to stores.
Yeah.
And how is your supply chain?
Are you?
You know if, if your business were to 10 X next year, would you be able to support that kind of growth?
Hmm.
That is tough.
I'd say that cash flow is another one of my big problems.
Because I am cash flow positive, I'm profitable, but because I buy in bulk all at once, it takes a huge chunk out of my cash flow and leaves me scrambling for a little bit until I start selling those flannels again right away.
So I don't think I could handle a 10x scale like this time next year without taking outside investment.
I don't think.
Zach, you mentioned that you want to hire like a part-time marketing manager, right?
So let's just kind of dive into this for a moment.
I mean, is there a specific thing that you need that person to do, or like what would the priority be?
Probably to run the social media aspect and the paid advertisements.
I'm a very numbers-oriented, analytical person.
I do not have much of an artistic brain.
You need a creative.
Yeah, creative brain.
So that's been a huge struggle for me and I feel like my time is better suited towards the business aspect of the business rather than the creative.
You know, again, I...
You're a couple hundred thousand dollars in sales.
You've got a neat product.
Right away, I'm a fan.
I'm a New Englander.
Fisherman chic is right up my alley.
And so I always think the founder should do as much as you can early on, even if you're not comfortable doing it.
I bet you're great selling the product.
Only you can talk about it the way you do.
And you're going to be uncomfortable.
But sitting behind an Excel spreadsheet is not going to help sell more Kona.
And so you know, I would really encourage you to keep pushing as hard as you can, while you can, without hiring.
But in the meantime, be folding some of the things that can be automated, that can be outsourced you know, third party fulfillment, things that are just not behind the scenes, the customers are not going to see so that you can get as much revenue through the door as you can.
300000.
If you bring someone in and you hire them, that's going to eat up a fair bit of your profit.
I don't know what your margins look like.
And there are third parties that can get you to the next level, whatever that looks like, without having to take on the expense of the employment costs and insurances and all that kind of thing.
And lastly, I'll just say, you're a young guy.
I assume you're a little bit risk adverse.
You're not looking to leverage an apartment or a house.
And so I think the more you can kind of test and learn on your own dime, if you will, and keep the overhead down when you do go out and raise money, you'll really be in a different position of strength than if you take a big swing early on with more and more overhead.
So I think there's no question.
I help dialing up your.
You know you're in a rare category where you can build a big business online and through events.
And I think as a founder, you want to be in front of the brand as much as you can.
But I do think that he I mean you are looking for somebody who has sort of chops making social media clips and coming up with sort of some branding ideas, right?
Is that fair to say, Zach?
Yeah, yeah.
I want someone who can handle that side of the business and maybe talk to micro-influencers and help me just come up with ideas for the creatives that go behind these posts and videos.
Yeah.
I mean, I wonder whether it's worth reaching out to your old alma mater, right?
I mean, you went to the University of Connecticut.
Clearly, you were in some kind of entrepreneurship program.
Maybe, maybe not, but you were around kids like that.
I wonder if it would be worth reaching out to some of your old professors and saying hey, do you know, just like a red hot, you know grad kid graduating that might be interested in in this as their first just you know gig for a little bit, you know, I mean I would, I would just try that out.
And this is something that they could even do remotely for some time.
I mean I, because the reality is the.
The tools that younger people have now to build social media assets are amazing.
So I think that could be worthwhile.
There's one other piece of advice I have for you.
And this really sucks.
And Bill, you may have been there.
I've been there.
It sucks.
I hate doing this.
It's so tedious.
But I would document as much as you can what you do.
Write down what you do.
Write down what works.
I know you're really tired at the end of the day, but write it down.
Log it down.
How do you write copy?
What's the tone of the brand?
Almost like you're building a brand Bible.
Which audiences resonate the best?
What's the voice of the brand?
Like a playbook, a brand Bible.
So then when somebody does join you, even temporarily, they can refer to that and understand what you're trying to do.
I love that idea.
I didn't even think that.
I use ChatGPT sometimes to catch my brand, voice and stuff, but I never even thought of writing down my notes to use as a reference for future employees, to kind of get the better.
A living document, right?
Yeah.
Exactly.
By the way, this is what a lot of brands do.
Bill, do you guys have a brand Bible?
Sure.
Oh, yeah, absolutely.
And so when people join Spindrift... they can refer to it and they know what you stand for.
I love that idea.
Yeah, I think exactly right.
Yeah, because as soon as you identify that kind of marketing message, their first question is be okay well, tell me now what you want.
What voice should I adopt?
And it's going to be yours.
It's going to be the work you've done so far.
So get started on that now.
I think that's a great recommendation.
Yeah.
Awesome.
Awesome.
Zach Will, the brand is called the Kona brand.
Good luck, man.
Congrats.
It's a great idea.
I love it.
Thank you, guys.
Thanks so much for having me.
Yeah, I love that.
I mean, who's going to wear a Hawaiian shirt in the middle of January in Marshfield, Massachusetts?
Unless it's flannel.
There's a lot going on there.
I like that approach, though.
I think it's a neat concept.
New England is a really tough place to...
To dress for, because the weather seems to change every 90 days.
Yeah.
And if I'm remembering correctly, you grew up in Western Mass, right?
I did.
Yeah.
I grew up in the but I live yeah, as you could memory on New Bedford.
I spent 15 years down in Fall River, New Bedford.
And I remember, I mean, kind of like this story, you got a grant, right?
Like that's how you started.
That's right.
Yeah.
The city of Fall River and the city of New Bedford.
Both were kind enough to help me in the early days.
That's so cool.
And they look at you now.
Yeah.
All right.
We're going to take a quick break, but when we come back, another caller, another question and another round of advice.
I'm Guy Raz.
Stick around.
You're listening to The Advice Line on How I Built This Lab.
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Welcome back to the advice line on how I built this lab.
I'm Guy Raz, and today I'm taking calls with Spindrift founder Bill Creelman.
Bill, are you ready for our next call?
I'm ready.
All right.
Please tell us your name, where you're calling from, and just a line or two about your business.
I'm Jean-Pierre Parent.
I'm in Portland, Oregon, and in 2009, I opened Soma Kombucha.
Cool, cool.
Welcome to the show, Jean-Pierre.
Jean-Pierre Parent.
Yeah.
That's your name.
Soma Kombucha.
Okay, so...
I'm assuming you sell kombucha and what, where do you sell it?
And yeah, tell me about a little bit about the brand.
Sure.
Yeah.
So we sell to stores through distributors, which used to be our main business, but that's dwindled a lot.
We also have tap rooms.
There's five kombucha tap rooms across the Pacific Northwest.
The ones in Washington are kind of cool in that they're unstaffed and automated and folks open the door with their phone and get in and help themselves and check out on their phone as well.
Wow.
You can literally, Oh, it's like going to get cash from a cash point.
You swipe your card, you go in and you just get kombucha whenever you want.
And there's no staff in there.
Yeah.
Yeah.
Yeah.
That's great.
That's wild.
Okay.
Tell me a little bit about how you started this kombucha brand 2009.
You said, so you've been around for a while.
A little while.
Yeah.
So my mom was brewing kombucha in the 80s and had some really great health benefits.
And so the whole family got into it.
I was teaching yoga moved to Portland, started bringing kombucha after yoga class because people would be kind of like shy and leave class.
And I thought well, let's find a way to get people to gather up and have a little community after class.
And it just went from there.
Awesome.
Okay, so you and you launched this kombucha brand.
And you've got tap rooms so people can go and get draft kombucha.
Tell me a little bit about the business.
How's it doing overall?
Yeah, it's actually.
It's been a rough last couple of years with pressures from COVID and supply chain stuff.
We've had a bunch of you know distributors go out of business.
We changed our packaging a couple times, which was really challenging and lost us a bunch of shelf space and stores.
Sales at the tap rooms are down and all of the expenses are much, much higher.
And so, yeah, I was doing a million and a half dollars a year for several years.
And the last few years, that's really been dwindling.
I started contract manufacturing for other beverage brands in the last six months and that has brought its own challenges.
I also do leverage development and RD for other brands, which is great, but it's just kind of like a one-time project when we do it.
Yeah, so I'm really looking for the next step.
Cool.
Well, lots of questions to ask you, but before we get to them, what question do you have for Bill and I?
Yeah well, so the four revenue channels that I just mentioned, I'm wondering what you guys think is the best channel for me to focus my efforts on.
Got it.
Okay, cool.
Bill, a lot of challenges here, right?
The business that was doing a million and a half a year, substantially down.
There are a variety of reasons why that happens.
Questions, thoughts?
Yeah.
No, it sounds... I mean, my parents were product hippies in the 70s and 80s.
And I love hearing your hustle.
It sounds like you love the space.
And so it's a little bit of like, how do I make a living?
And so I...
Totally relate to that.
It's a hard business, low margin business, super finicky.
I guess a question like, where do you see yourself in 10 years?
What would success look like on the other end of this?
Yeah well, I would like to be doing less jobs and be doing a better job at the ones that I'm focusing on.
So I'd like to either cut some things out or I'd like to get some more help.
I definitely would like to not be stressed about making payroll every two weeks, you know, and paying the rent.
And so, you know, I mean, I could do a lot of different things.
There's a lot of different things that I do well.
There's some things that I that I don't do that well.
And, you know, also, I've recently become a solo father of my eight year old special needs kid.
And I just, I really just need that to be able to make this company work, so that I can punch out and focus on his needs.
That's a lot going on, especially being a solo dad.
I guess, without going into all the different margins and sort of the structure of the four businesses, which do you have the most confidence in today?
Is there one that you feel you have a real heart for and are energized by?
Well, six months ago, I definitely would have said tap rooms.
I love building them.
I love interacting with customers directly.
I love how nimble the flavors are and just being able to make something and put it out.
And we curate other wellness products.
And so I'm really passionate about that.
But my local business neighbors, tons of them are going out of business.
Like I said, our sales are down.
I've never really done any marketing and I've started doing that.
And I haven't really seen that move the needle.
I opened a tap room in Seattle, which I thought was gonna kind of save everything.
And that has not.
That's just barely breaking, even after eight months, which is shocking because none of the other stores, like they all after three months, were profitable.
So I'm just, I'm a little unsure about where to put my limited energy and resources.
What about the margins on the R&D or the contract manufacturing?
Yeah, on R&D, they're high.
On contract manufacturing, they're low.
But there is a lot of contract manufacturing work, and it's very consistent.
It comes with its own challenge as well, just managing the expectations of founders, especially if the product is kind of unproven and they give it to me and I follow the instructions and it doesn't turn out like they expect.
And now I'm kind of financially on the hook for that.
And so trying to mitigate those potential pitfalls.
Is there any?
I mean, if RD and contract manufacturing are fairly robust, would it make sense in any way to sunset the other businesses, the tap rooms, for example?
Yeah, I would be open to letting go of the brand, which is selling into stores like that has become increasingly challenging, you know, and we're competing with larger and larger companies which are getting into this space and you know shelf space is getting really expensive, as I'm sure Bill knows.
Yeah.
I had the same, same thought.
Again, I really relate to the situation.
We have an expression here called simplify to amplify, and And I'm not sure there's a better example than this of we really need to distill it down into its most simple form and then build it back up, which sounds like your instinct here.
I mean, if you're making money on the consulting side and you're sort of keeping the lights on paying the bills with some of the contract manufacturing, that's probably not the destination right.
It seems like you really have heart for building a brand.
You want to get back to the growth years.
You know, maybe that kind of brings it back to zeros, or at least to the baseline, and then allows you to start to build back up again.
I, i had 15 years of, you know, trying to figure it out some sort of similar amount of time to you, before we really were able to focus, and so i, i guess my my, early advice would be around distilling it to the simple one or two things you can do, and do profitably, and sort of quiet any of the expense overruns or the noise, so that you could then begin to rebuild.
Yeah, I agree.
I mean, we've done so many episodes of the show where the founders had to shut down part of the business.
It was painful, right?
Bill, you had to do that with one of your early products.
And And then ultimately, it made sense.
It was sort of the obstacle that was preventing the founder from flourishing or the business from growing.
You know, I think when I think about what you do, Jean-Pierre, I don't think about kombucha.
I think about probiotics.
I think you're in the probiotics business, you know, the gut microbiome business, if you will.
Even though there may be more competition in kombucha as a product, the probiotics business is actually better growing.
You see this in yogurts.
You're seeing it in other products where you know people are really promoting probiotics and the gut health side of their products.
And I wonder whether, if you start to think about you and your experience in probiotics now 16 years in, that to me seems like a pretty interesting consulting gig.
You know where you've got small founders, small food companies, brands looking for help and advice on how to think about and produce a product.
Is that something that would fit into your wheelhouse?
Yeah, kind of.
The thing that has set Soma apart from other kombucha brands this whole time is that we have billions more probiotics because there's no special long fermentation process that I do.
The thing is though, is that, like the lab grown probiotics that people are used to in capsules, those are really different than wild fermented product.
I believe in wild foods and wild fermented products are going to be a lot more beneficial, but it's a little bit less easy to quantify in terms of probiotics.
And so, you know, and it's interesting, it's always been my focus is the health side.
People are.
I feel like people are really focused on the taste and they want something that they can drink that happens to be good for them.
So we focused on the taste too.
And I've won best kombucha in Portland a bunch of times because of that.
I've been so focused on kombucha and fermentation that I could certainly move into other wild fermented products.
But it's kind of its own beast.
Yeah.
I think you're right on about wild probiotics.
I mean, you're looking at brands like Nancy's Probiotic Yogurts.
There are all these brands I'm seeing where there's a real emphasis on wild probiotics.
It could be a really interesting next step for you.
Yeah, I agree.
I mean, in some ways the world is starting to open up to the way you've been thinking about it for this whole time.
Yes.
I think it's a really exciting time.
But I do think that simplification process, you know, even if there's an opportunity right in front of you, it's going to be hard to see it if you have four or five different.
You know records spinning at the same time.
You've got an eight-year-old at home that's going to want, you know, need attention too.
So I just you know, the more you can quiet kind of the noise and not be so divided, you'll be able to I think – really be opportunistic with whichever the ideas you decide to go big on.
Interesting.
So you think that consulting and R&D should be what I focus on?
Well, I just I empathize, you know.
I just picture the early days of, like you know, as much as you want to do certain things, The reality of keeping the lights on paying the bills often kind of wins the day.
If that's where the margin is, you have a consistent revenue stream.
Maybe you sort of pause the other businesses where there's more risk, more uncertainty, so that you can really focus on you know what Guy said is you know this probiotic, this real like where is wild probiotic going?
It could be a version of what you're doing.
It could be something different.
It's hard to evaluate that until you really settle, kind of calm the seas, so to speak.
Absolutely.
Absolutely.
Jean-Pierre, looking forward to hearing how it goes.
Keep us posted.
Jean-Pierre Parent, founder of Soma Kombucha.
Good luck, man.
Thanks for calling in.
Thanks, Gus.
Really appreciate it.
Bill, lots of interesting challenges out there.
I mean, you know.
It's like, and you were there.
I mean, you were selling smoked fish, right?
And you're like, this is interesting, but it's not really moving the needle.
And then it was like oh, but these.
Because you started to sell these like flavored salts and for cocktails.
And then that was the thing that was getting traction.
And you're like well, maybe I shouldn't be doing smoked fish and jams and maybe focus on this thing.
You know, the passion can cloud everything. your decision making.
I love food.
My weekends and my weekdays look very similar.
But you need to almost be of two minds.
One is, what do I love?
The other is, what's going to be a good business?
And it can be really hard to see those clearly at times.
Yeah, for sure.
Bill, before I let you go, if you now, knowing what you know, you started in the late 90s, right?
And literally at a fishing boat off Nantucket um, and here you are, you know, 30 years later god, does that sound crazy 30 years later.
Uh, if you, if you go back in time, knowing what you now know, what's something that you would?
You would be able to say to your past self?
Well, it probably would have been some of the advice that we talked about today, like don't try to do everything.
You know i i, i took take a lot of time to get to where we are, 30 years, as you said, and you know, some of it was valuable, but I think a lot of it probably could have been solved by not trying to wrap my arms around every problem, being more selective early on and really trying to solve the big problems, knowing that there was going to be a solution on the other side.
You know, I think it's so easy to get caught in.
I need to solve all 10 problems equally, when the reality is it's probably one or two.
That is holding the business back.
That's awesome.
It's founder of Spindrift, Bill Creelman.
Bill, thanks so much for coming back on the show, man.
Thanks.
Nice to see you, Guy.
And, by the way, if you haven't heard Bill's original How I Built This episode, you've got to go back and check it out.
We will put a link to it in the podcast description, the show notes.
And here's one of my favorite moments from that interview.
I knew where... the risk was, or at least I thought I did.
But ultimately there's just risk embedded in between the coolers and going up against the big soda guys and trying to do something really different in terms of the ingredients.
All of that just was going to be challenging.
So yeah, it was terrifying.
Thanks so much for listening to the show this week.
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This episode was produced by Carrie Thompson with music composed by Ramtina Ramblui.
It was edited by Andrea Bruce and our audio engineer was Kweisi Lee.
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