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Perfect Hydration's Jared Smith: Building a National Alkaline Water Brand · Ready To Drink Podcast

• 0:00
  SPEAKER_00: Jared Smith, uh president of Perfect Hydration Alkaline Water and Star City Beverage.
• 0:04
  SPEAKER_01: Well, Jared, tell me uh a little bit about your structure because a lot of times we get one-on-one brands in the sense that they have one brand and one mission.
• 0:12
  SPEAKER_01: You kind of have some multiple brands and kind of talk about kind of just initially what drove you to kind of build a little bit of a portfolio aspect to what you're doing.
• 0:20
  SPEAKER_00: Well, so um compared to most founders, I have a little bit more of a unique uh support system.
• 0:25
  SPEAKER_00: I have a parent company that kind of funds it all.
• 0:27
  SPEAKER_00: And we're we're now standing on our own two feet.
• 0:30
  SPEAKER_00: So parent company is Golden West Food Group.
• 0:32
  SPEAKER_00: It's a mostly a food company.
• 0:34
  SPEAKER_00: Um, and we started out with Star City Beverage, which is our private label company.
• 0:38
  SPEAKER_00: Um, and I came over to run that.
• 0:41
  SPEAKER_00: And the culture of Golden West is very similar.
• 0:44
  SPEAKER_00: They do a ton of private label, but then oftentimes what they do is around the capabilities on the private label side, they go and find a licensed brand or they put an in-house brand over it and they go and sell against that on the branded side.
• 0:56
  SPEAKER_00: And so um, I was about six months in at Star City and kind of realized that was the culture.
• 1:00
  SPEAKER_00: And I kind of raised my hand and said, Hey, can I start a brand?
• 1:03
  SPEAKER_00: And they said, What do you want to do?
• 1:04
  SPEAKER_00: And I said, and we pack a bunch of private label alkaline water and I said, I would love to start an alkaline brand.
• 1:10
  SPEAKER_00: And really not knowing the resources that it would take to get into water, everybody said yes.
• 1:16
  SPEAKER_00: And so we started ideating and we commercialized something in about six months, and perfect hydration was spit out.
• 1:22
  SPEAKER_00: And so um, this was back in 2016, so almost it's been almost 10 years.
• 1:29
  SPEAKER_00: Um, and when I first started, Star City was probably a about a$10 million portfolio company for Golden West Food Group.
• 1:39
  SPEAKER_00: Today we'll do close to 40 million this year, so it's almost as big as Perfect Hydration.
• 1:44
  SPEAKER_00: Um, and for the first few years, I was a really a salesperson of one for both the brand and this and the private label side.
• 1:51
  SPEAKER_00: And then we were piggybacking on the resources of the Golden West Food Group ops team.
• 1:57
  SPEAKER_00: Um, and then leading right up to the pandemic, we finally kind of scaled both to a size where it's like I raised my hand and I said, Hey, I can't do this anymore on my own.
• 2:06
  SPEAKER_00: I would like to start hiring out a team below me.
• 2:09
  SPEAKER_00: And of course, the ownership of Golden West took that as you don't know what you're doing.
• 2:13
  SPEAKER_00: And so they hired a CEO above me.
• 2:16
  SPEAKER_00: And um, at the time I was a little disappointed, but then when I found out who they hired, it was really a blessing in disguise.
• 2:22
  SPEAKER_00: They handed they hired Dan Ginsberg, um, who was the previous CEO of Red Bull um from about 2000 to 2008.
• 2:29
  SPEAKER_00: And so, I mean, literally a living legend, and he's been my mentor now for the last six, seven years.
• 2:34
  SPEAKER_00: And he and I have really built out the brand, and now we've got a team of about 35 under us from merchandisers up to VPs.
• 2:43
  SPEAKER_00: And then just in the last six months, they finally uh gave me the reins as president.
• 2:48
  SPEAKER_00: Um, and I'd always been acting at that capacity, but really I think Dan is now going to take a step back for more of a like a chairman role and advisory role and allow me to run the company.
• 2:58
  SPEAKER_01: Excellent.
• 2:59
  SPEAKER_01: And and for you, like, I mean, was this always how fast?
• 3:03
  SPEAKER_01: Give me a timeline of like when you we also talk a lot about leadership and things like that.
• 3:07
  SPEAKER_01: Like when you go from like an employee of something to really an entrepreneur essentially and what you're building out as far as that goes.
• 3:13
  SPEAKER_01: So, when did you what year did you kind of make that transition and what was going on?
• 3:17
  SPEAKER_00: You know, they always allowed me to be kind of an entrepreneur from the beginning.
• 3:21
  SPEAKER_00: Um, I was making decisions that were probably well above my pay grade at the time when I first started, and um we just we we scaled it slowly.
• 3:30
  SPEAKER_00: I think that's my biggest advice was is I mean, um, previous to to this role, I was director of sales at Cavita and call it 2012 to 2016.
• 3:40
  SPEAKER_00: It was, I mean, most people know in Beverage, you could sell everything at a net loss, sell it off to private equity, make hundreds of millions, and pay everybody back.
• 3:48
  SPEAKER_00: It's really not like that anymore.
• 3:50
  SPEAKER_00: You can't just grow at an unreasonable rate hoping that you're gonna get acquired.
• 3:55
  SPEAKER_00: And so now it takes some strategic steps to doing it and not getting ahead of yourself.
• 4:00
  SPEAKER_00: And really, um, I think when I raised my hand, it was just the capacity of the company was beyond me, and I needed more resources, and that's what I was really raising my hand for.
• 4:12
  SPEAKER_00: But ultimately, leadership really stepped in and kind of backed me on that.
• 4:16
  SPEAKER_00: And so we started building out a sales team right around the pandemic that supported grocery.
• 4:21
  SPEAKER_00: Um, we tried not to jump too far ahead, call it into convenience or drug at the time, and really tried to scale the company regionally first before we took it national.
• 4:31
  SPEAKER_01: It's it's um I do with a lot of I've worked with hundreds of brands in my career.
• 4:36
  SPEAKER_01: I've been in alcohol space and then in the hemp space uh for the last 21 years.
• 4:41
  SPEAKER_01: And it's uh started this business 17 years ago.
• 4:43
  SPEAKER_01: So it's uh it's been a long haul as far as that goes.
• 4:45
  SPEAKER_01: I started out with a full head of hair and uh, you know, here we are now.
• 4:48
  SPEAKER_01: I'm only 40, but I feel like one of the oldest guys in the beverage business because of what I've seen.
• 4:52
  SPEAKER_01: But what I want to say to you is that's the defining factor every time.
• 4:56
  SPEAKER_01: I've worked with hundreds of brands.
• 4:57
  SPEAKER_01: It's the ones that work, and as suited, as silly as this is uh sounds, it's like it's the ones that have the strategy.
• 5:04
  SPEAKER_01: Because a lot of times we come in and it's uh we call we used to call it a t-shirt and a dream.
• 5:08
  SPEAKER_01: You know what I mean?
• 5:09
  SPEAKER_01: Where it's like they come into the boardroom and you're sitting there, and I was a brand manager, and I ran like a$50 million wholesaler, and we're sitting in that boardroom, and every day it was brands coming in uh to pitch their stuff.
• 5:18
  SPEAKER_01: And you you had to find a way to show them that the product was great, but the infrastructure needed to drive the product home and really get it to scale was lacking.
• 5:27
  SPEAKER_01: And you can only bootstrap things so far.
• 5:29
  SPEAKER_01: And I don't mean this as a dig, I mean this as a preparation for others that are aspiring to build their own brands.
• 5:34
  SPEAKER_01: Do not ever underestimate the capital intensity that's needed to do it right.
• 5:39
  SPEAKER_00: I mean, honestly, I get a lot of people come to me that want me to advise them on how do you scale the brand and all of that.
• 5:45
  SPEAKER_00: And it's like just expect to lose a lot of money.
• 5:47
  SPEAKER_00: You're you're never really gonna make money in this business because you're going against the Pepsi's and the Cokes of the world that have basically, compared to you, unlimited resources.
• 5:56
  SPEAKER_00: And so um, one big thing is we never hire ahead of something, we always hire after.
• 6:01
  SPEAKER_00: So we'll go get the sale first and then find ways to support it on the back end rather than trying to hire somebody that promises that they can go get all of this business.
• 6:10
  SPEAKER_00: And then what happens is they most of the time end up falling short.
• 6:13
  SPEAKER_00: And so oftentimes we'll figure out how to bootstrap it and get it to that point before we have to hire them, and then we'll we'll hire somebody to support it afterwards.
• 6:23
  SPEAKER_01: That's uh the the beginning, most of the time when uh when I left the wholesale world and started working directly with brands, that's what we were doing was call market development.
• 6:29
  SPEAKER_01: Um, so I was working with brands and go out and then they wanted to launch a new area, so I would go door to door and open everything up and then build the strategy.
• 6:36
  SPEAKER_01: And uh you'll find this interesting.
• 6:38
  SPEAKER_01: We uh we took things at a wholesale level level.
• 6:41
  SPEAKER_01: The next level was I actually flew out to every new brand we were recruiting, and I spent multiple days in their community and then worked alongside them to build localized marketing for launching the brand in our community.
• 6:52
  SPEAKER_01: Yeah, like figuring out what resonates with them, and literally would sit in the coffee shop and just tick on like listen to conversations and start not nodding in as far as what topics were in that region of the country and things like that.
• 7:03
  SPEAKER_01: Absolutely.
• 7:04
  SPEAKER_00: And um, I mean, it used to be a mindset is like go get as many customers as you can, and now it's the beginning.
• 7:10
  SPEAKER_01: That was the beginning of it.
• 7:11
  SPEAKER_00: It was good as yeah, and now it's like it's it's being strategic about which customers you work with, making sure they have your demographic and your consumer within it.
• 7:19
  SPEAKER_00: Otherwise, you're you're spending marketing dollars and slotting dollars and free product trying to make something work that's never going to work.
• 7:26
  SPEAKER_00: And something else I've learned since starting this brand is that I mean, coming from Cavita, it took the very traditional route, starting in natural channel, building into grocery, and then grocery beyond.
• 7:36
  SPEAKER_00: And now the way we started Perfect Hydration, I've learned that there's no real box that you have to play in.
• 7:42
  SPEAKER_00: I mean, it's it's go find your consumers and how you scale the brand the most efficiently.
• 7:47
  SPEAKER_00: Um, it doesn't necessarily need to start at Whole Foods anymore, where I think uh about 10 years ago, everything had to kind of start there, incubate there, build a story, and then you take that story to bigger customers.
• 8:00
  SPEAKER_00: Now, I mean, our first customer with perfect hydration was Costco.
• 8:03
  SPEAKER_00: And when we first did that, I thought we were nuts.
• 8:05
  SPEAKER_00: I was like, Well, how this is never going to work.
• 8:07
  SPEAKER_00: But really, looking back on the approach that we took, it really was an established category being alkaline water.
• 8:13
  SPEAKER_00: Ascension had already led the way in and people were now trying to find other brands within the category.
• 8:20
  SPEAKER_00: And the best way to do that was to add value through Costco and get scale to market through Costco.
• 8:25
  SPEAKER_00: And so it was actually a great customer to launch with rather than what when I originally started, I was like, oh man, I can't believe we're starting here.
• 8:31
  SPEAKER_00: But really, it helped us build out a region and go 10 miles deep within that region because of the consumer awareness of the brand.
• 8:38
  SPEAKER_01: I want to talk about your story, but uh your life story.
• 8:41
  SPEAKER_01: But first, I want to do when you talk about perfect hydration.
• 8:44
  SPEAKER_01: I want people to understand.
• 8:45
  SPEAKER_01: You hear a lot of times where people are like, water, water, water's water.
• 8:49
  SPEAKER_01: So kind of walk through as much as you can share about the benefits of your product, uh, not necessarily from a sales standpoint, but talk about what the product is and what you what your mission is behind the product and what what consumers can look for in it.
• 9:01
  SPEAKER_00: I mean, the beautiful thing about perfect hydration, it's an alkaline water.
• 9:04
  SPEAKER_00: Um, so it's it's more of on the functional side of water.
• 9:08
  SPEAKER_00: And so the pH 9.5 plus is the big differentiator.
• 9:11
  SPEAKER_00: I think most consumers are now starting to figure out their own benefits to it.
• 9:16
  SPEAKER_00: Um, but really, um, and and thank you, thanks to one of our competitors, Essentia.
• 9:21
  SPEAKER_00: I mean, they did a white paper study that said that alkaline water is three times more hydrating than any other water.
• 9:26
  SPEAKER_00: So your body tends to absorb it more.
• 9:28
  SPEAKER_00: And so there's some functional aspects to it that make it a little bit easier and beyond just water.
• 9:33
  SPEAKER_00: Um, some ways that we've differentiated, call it, from some of the other alkaline waters, I think, um, surround the electrolytes that we put in.
• 9:41
  SPEAKER_00: Um, most of the national brands have some component of sodium or chlorine, which I think personally gives an off taste to the water if you're being really particular about taste of water.
• 9:51
  SPEAKER_00: Um, we use potassium carbonate, potassium bicarbonate, and magnesium sulfate.
• 9:56
  SPEAKER_00: It tends to just, I think it makes our water softer, softer to the palate.
• 10:00
  SPEAKER_00: It's got a cleaner taste to it.
• 10:02
  SPEAKER_00: And then because we ionize our water, we don't have to add as much electrolytes into it per se.
• 10:08
  SPEAKER_00: Um there's two different types of alkaline waters, right?
• 10:10
  SPEAKER_00: So there's ionized alkaline water, which is literally charged and physically altered, and then there's chemically altered alkaline water, which is tends to be alkaline water that's overdosed with electrolytes and is really using the electrolytes to achieve the alkalinity.
• 10:25
  SPEAKER_00: We use an ionization process, so low TDS.
• 10:27
  SPEAKER_00: So again, talking about that mouthfeel and flavor, um, it's really, really a clean water.
• 10:33
  SPEAKER_00: Um, and then the other big thing that I think we really did a great job of differentiating on was the branding.
• 10:39
  SPEAKER_00: Um, with consumers knowing that they want to an alkaline water, I think the intent to purchase at at least for the water category is made at shelf.
• 10:48
  SPEAKER_00: I mean, sure, marketing dollars will drive awareness, but ultimately when consumers go up to the shelf, they're looking at it, they're saying, I need a, I want to do an alkaline water.
• 10:57
  SPEAKER_00: I think we have pH really big on our bottle.
• 10:59
  SPEAKER_00: I mean, if we could have named it pH water, we would have.
• 11:02
  SPEAKER_00: And but it worked out really well with our logo and the name of the branding is perfect hydration.
• 11:06
  SPEAKER_00: So you know it has something to do in that realm.
• 11:09
  SPEAKER_00: Whereas, like you look at like an essentia or some of these other alkaline waters, and I don't mean to call them out, they they've built the category, but you don't really know what it is, and it it forces you to really kind of explore the label where we just kind of stand out.
• 11:22
  SPEAKER_00: I mean, you can you can see in our gallon skew, I mean, you can just see it.
• 11:28
  SPEAKER_00: It's a pH 9.5 really big.
• 11:30
  SPEAKER_00: And so I think a lot of our branding does does a lot of the selling at shelf, and that's that's what that's what we attribute a lot to our our new consumers and being incremental to the category.
• 11:39
  SPEAKER_01: I'm a I'm a huge advocate of blunt directness, and and I think that and that it's important on labels, and you nailed it, and it's not a dig on anybody, but the fact is we've gotten very romanticized in our branding and our packaging, and I stand inside of convenience stores and listen to consumers while they while they look at the shelves all the time.
• 11:58
  SPEAKER_01: And I do it, I do it intentionally because I want to hear that.
• 12:01
  SPEAKER_01: And that's number one what it is.
• 12:02
  SPEAKER_01: It's like they'll be holding this can, they're like, I know this is a drink, but what the hell is it for?
• 12:06
  SPEAKER_01: And what is it gonna be?
• 12:07
  SPEAKER_00: You know, it's like it's it's really I I respect the bluntness of what I talk to other founders that are trying to ideate new brands, it's like keep it simple, yeah, because the more complicated you make it, the more you're gonna have to market it and educate the consumer.
• 12:21
  SPEAKER_00: And so, path of least resistance is making it obvious, right?
• 12:25
  SPEAKER_01: Exactly.
• 12:25
  SPEAKER_01: No, it's uh and then and then it's just like the the next level of geniusness of actually putting the benefits as the brand and then having it be that blunt is just perfect.
• 12:33
  SPEAKER_01: You know, I mean there's no question as what is this purpose?
• 12:35
  SPEAKER_01: Oh, that's what it's for.
• 12:36
  SPEAKER_00: It was like, and some of the fun things we talked about is like how do we become Kleenex, or how do you become Coke?
• 12:41
  SPEAKER_00: Because how many people call a soda a Coke, even though they're not necessarily looking for Coke, or how many people reach for a tissue and call it Kleenex just because that's what it is?
• 12:50
  SPEAKER_00: And so that's where the idea was is like, how do we call this pH water without calling it pH water?
• 12:54
  SPEAKER_00: So that's perfect.
• 12:56
  SPEAKER_01: Well, walk me through, like you said before, uh, walk me through a timeline of um your career.
• 13:01
  SPEAKER_01: Like, let's go back to 18 years old.
• 13:03
  SPEAKER_01: Jared is 18, 19 years old, graduating high school.
• 13:06
  SPEAKER_01: What's what's going on in your life and and what do you what's your career life looking like at that point?
• 13:11
  SPEAKER_00: So, my you know, um going back to my family, my dad was always in sales, he was always very entrepreneurial.
• 13:17
  SPEAKER_00: He had his own business when I was first born, and then he moved on to corporate sales and worked for IBM.
• 13:23
  SPEAKER_00: We always said IBM meant I'd been moved, and so we moved around and I got to see him firsthand kind of work from home and be a sales guy, and he was very successful at that.
• 13:31
  SPEAKER_00: And so I knew going into college that that was probably what I wanted to do is I wanted to be sales kind of a self-starter, not really be in an office as much, wanted to work remotely.
• 13:42
  SPEAKER_00: And um, so when I went to college, I uh I ended up getting a degree.
• 13:46
  SPEAKER_00: I went to the University of Arizona and I got a degree in engineering because I felt like at least that would differentiate myself.
• 13:52
  SPEAKER_00: Um, getting a business degree just cooled me with a bunch of other business degrees.
• 13:56
  SPEAKER_00: And so um I chose engineering, not with the intent of becoming an engineer, but just being more kind of critical thinking.
• 14:04
  SPEAKER_00: And when I graduated school, one of my first jobs out of college was with Campbell Soup.
• 14:09
  SPEAKER_00: And so um I started at Campbell Soup in the Bay Area um as a retail business manager or glorified merchandiser.
• 14:19
  SPEAKER_00: And I've always said that that was my pedigree.
• 14:21
  SPEAKER_00: It really was CPGU.
• 14:23
  SPEAKER_00: It taught me all the basics, all the four Ps, and really just figuring out taught me how to get a product all the way through distribution to shelf and how to execute at shelf and how to do promotions and all of that.
• 14:36
  SPEAKER_00: And um I was probably about two or three years in and realized that I hated selling something that I didn't consume myself.
• 14:43
  SPEAKER_00: Um, my wife and I are very organic-minded and and very holistic in the way we we treat our bodies.
• 14:49
  SPEAKER_00: And so um I jumped over into produce, and that's probably what really turned us on to that lifestyle was is I jumped over to Earthbound Farm selling value-added organic salads.
• 14:59
  SPEAKER_00: And I was a uh a guinea pig position at that point, a territory sales manager with kind of a hybrid merchandising role, calling on smaller regional chains.
• 15:09
  SPEAKER_00: And I showed success really early on, and they allowed me to hire more territory sales managers.
• 15:15
  SPEAKER_00: So I ended up hiring, um, hiring about five or six other territory sales managers across the country and managing a really small team.
• 15:20
  SPEAKER_00: I then was promoted and moved down to Southern California where Are you in your 20s at this point where you're managing a team?
• 15:27
  SPEAKER_00: Yeah, yeah.
• 15:27
  SPEAKER_00: You and I are 40.
• 15:28
  SPEAKER_00: I'm 40 like yourself.
• 15:30
  SPEAKER_01: I was gonna say, I'll I'll jump in after, but we have a very similar track I'm gonna connect with you on, yeah.
• 15:34
  SPEAKER_00: And so um got down to Southern California.
• 15:37
  SPEAKER_00: I was promoted to a regional earthbound farm.
• 15:40
  SPEAKER_00: Um, and I knew I wanted to get I always wanted to work in beverage, and I had this opportunity to go work for Cavita.
• 15:46
  SPEAKER_00: And the produce background really aligned well with Cavita because at that time the kombucha category was booming and it was in the produce department.
• 15:55
  SPEAKER_00: And so um Cavita at that point was kind of incubated in natural channel and looking to make their big jump into grocery, hence kind of my thought process on how to build brands is natural to grocery, and so that's what I was taught early on, and so I helped scale Cavita from about 14 million to 65 million in about 18 months.
• 16:17
  SPEAKER_00: I mean, it was it was a wild ride, and so um Bill Moses originally hired me on as a uh a regional sales manager.
• 16:25
  SPEAKER_00: Um, I was managing the Southwest.
• 16:26
  SPEAKER_00: I got I was about six weeks in, and I landed my first Kroger division, which was Ralph's.
• 16:31
  SPEAKER_00: I landed a meeting, I should say.
• 16:34
  SPEAKER_00: And um, at the time, my boss, the director of sales, was on paternity leave.
• 16:38
  SPEAKER_00: And so I ended up taking the meeting, and Bill Moses, the founder, was like, Hey, I want to come along.
• 16:44
  SPEAKER_00: And so we went and pitched uh Ralph's together, and we landed, or I should say I landed, like I think it was like 14 to 16 skews on the spot.
• 16:54
  SPEAKER_00: And at Cavita in those days, it wasn't about like, I wonder if we'll get in.
• 16:58
  SPEAKER_00: It was like, I wonder how many skews we could push push through.
• 17:00
  SPEAKER_00: And so I landed a almost a whole shelf at Cavita um at Ralph's.
• 17:05
  SPEAKER_00: And so I remember walking out of that meeting and Bill Moses laughing over my shoulder, and I looked over and he I go, What are you laughing about?
• 17:13
  SPEAKER_00: And he goes, I'm gonna fire your boss, I'm gonna make you director of sales.
• 17:16
  SPEAKER_00: And I, of course, I my personality is like I defended my boss, and I was like, No, you don't want to do that.
• 17:21
  SPEAKER_00: He just had a baby, that kind of thing.
• 17:23
  SPEAKER_00: Well, unfortunately, I mean, my to my benefit, uh, about three weeks later, let him go and they made me director of sales.
• 17:30
  SPEAKER_00: And I think I was maybe 28 at the time.
• 17:33
  SPEAKER_00: Yeah.
• 17:34
  SPEAKER_00: And so I was director of sales of this fast growing company with a very large team reporting up under me.
• 17:40
  SPEAKER_00: I mean, at the time, we probably I think we had probably 35 merchandisers, let alone regionals and all that.
• 17:48
  SPEAKER_00: And so I'm managing a very large team, 28 years old, and I bet you 50% of the team was older than me.
• 17:54
  SPEAKER_00: And so it was an interesting time for me, a lot of learning.
• 17:58
  SPEAKER_00: Um, and so we scaled it very fast and exited to Pepsi.
• 18:02
  SPEAKER_00: And right at that time, I knew I didn't want to go work for Pepsi or a big company.
• 18:06
  SPEAKER_00: I'd worked for Campbell Soup, kind of become just a number working for the larger.
• 18:10
  SPEAKER_00: And I loved the entrepreneurial spirit of being part of a startup.
• 18:14
  SPEAKER_00: And at the time, uh Golden West Food Group, the parent parent company I work for now, um, I know the CEO and the founder of that company, and his wife and my wife were best friends since second grade.
• 18:26
  SPEAKER_00: And he had always reached out to me curious to what I was doing, and he happened to give me a call and said, Hey, I've got a private label beverage company on autopilot, basically being just run by my meat company operations, running private label for a very premier private label retailer.
• 18:44
  SPEAKER_00: And uh he's like, It's doing about 10 million, and I don't have anybody really doing it.
• 18:49
  SPEAKER_00: He's like, Would you come over and run it?
• 18:50
  SPEAKER_00: And so I came over and I'd never done private label, and I just remember them called the first day sitting down at the desk and them saying, Okay, open your Rolodex and just start calling people.
• 18:59
  SPEAKER_00: And I was like, that is definitely not how this works.
• 19:03
  SPEAKER_00: And so it was I was a bit of a deer in the headlight, and I remember going home and even kind of crying, being like, Oh my gosh, I made a mistake, I left Pepsi, there's no chance I can do this.
• 19:11
  SPEAKER_00: And so slowly I started to scale it and had some success and started getting some wins.
• 19:17
  SPEAKER_00: And at that time, I was about six months in after I landed my first like private label account on my own.
• 19:23
  SPEAKER_00: And that's when I I kind of tapped them to say, Hey, can we start a brand?
• 19:26
  SPEAKER_00: And they thankfully agreed, like they had confidence in me.
• 19:29
  SPEAKER_00: And um, when we launched Perfect Hydration, it was December of 2016, and our first customer was Costco LA, and we we sold a million bottles in the first month, and it was like light bulb.
• 19:40
  SPEAKER_00: It was like it was like, holy cow, we're on to something.
• 19:43
  SPEAKER_00: And they took us on as a legacy brand.
• 19:45
  SPEAKER_00: I mean, we haven't faltered in Costco since that day.
• 19:48
  SPEAKER_00: And I slowly over the next couple of years just really focused on Southern California, building really deep.
• 19:55
  SPEAKER_00: Um, and so we ended up knocking off each of the chains, and it just kept getting bigger and bigger and bigger.
• 20:01
  SPEAKER_00: And then uh come like 2019, right before the pandemic, we got national Kroger, and that's when I raised my hand, like I mentioned before, and I was like, hey, I need help because Kroger is not a one-stop distribution thing.
• 20:14
  SPEAKER_00: It's like I've got to go build out DSD under 14 divisions, I can't do that or manage that by myself.
• 20:20
  SPEAKER_00: And so that was where I was like, I need help.
• 20:23
  SPEAKER_00: And so we started to scale the company from that point on.
• 20:26
  SPEAKER_00: Now we've had ups and downs like crazy.
• 20:29
  SPEAKER_00: I mean, I'm I'm one of very few brands that I would say we've had national Kroger distribution three separate times, it's been taken away from us twice.
• 20:37
  SPEAKER_00: And so, yeah, it's so um we launched our one leader nationally at Kroger, and then we went a year, and because the DSD was not solid and we didn't have the correct team, and this is getting over your ski trying not to get over your ski tips too early.
• 20:53
  SPEAKER_00: Um, we lost that distribution.
• 20:55
  SPEAKER_00: They pulled us back to like two or three divisions, and it was kind of like resetting again.
• 21:00
  SPEAKER_00: And we got it, and then we innovated, came out with the gallons, got another national distribution opportunity with a different skew with Kroger.
• 21:06
  SPEAKER_00: It didn't do so well, pulled back.
• 21:09
  SPEAKER_00: Then finally, just a few uh probably about three, three years ago, we had the second or the third opportunity, I should say, on the gallons at National Kroger.
• 21:17
  SPEAKER_00: We had success really early on, and they expanded to two SKUs, and so we haven't looked back on Kroger since and we've been supporting the business really well.
• 21:24
  SPEAKER_00: But it's because there's a time and a place for a brand, honestly.
• 21:28
  SPEAKER_00: It's and and trying to force it in somewhere when you're not ready, it can cost you.
• 21:34
  SPEAKER_01: No, you're exactly right.
• 21:36
  SPEAKER_01: It's um it's the thing that a lot of a lot don't understand is is when we're having these discovery meetings and and we do a lot of fielding.
• 21:42
  SPEAKER_01: I do a lot of free consulting every once in a while where people can just hop on for 30 minutes.
• 21:46
  SPEAKER_01: And if it's open on my calendar, it's open on my calendar.
• 21:48
  SPEAKER_01: And they'll be like, I got this question about the you know, the how to do this.
• 21:51
  SPEAKER_01: And a lot of times I think it's that it's just understanding the difference of next month and next quarter, and then five years from now.
• 22:00
  SPEAKER_01: And then trying to figure out how much can we build the infrastructure of five years ago or five years from now, now.
• 22:06
  SPEAKER_01: And then getting that mentality, because the hardest part, and I don't want to say like revenue scales and all that stuff, because a lot of people throw it around like, you know, a million to 10 million is the hardest thing.
• 22:15
  SPEAKER_01: It's actually all relevant to how your business is structured and the infrastructure.
• 22:18
  SPEAKER_01: Because if you got a house of cards at 1 million, 10 million is not even an option.
• 22:21
  SPEAKER_00: Like, you know what I mean?
• 22:22
  SPEAKER_00: Like and look at look at there's so many brands right now pulling back because at 20 million, they're losing 25% a year on the 20 million, where at 10 million, all of a sudden they're super, super profitable.
• 22:34
  SPEAKER_00: And it's like, that seems way more appealing nowadays than than losing money and trying to chase chase the profitability.
• 22:41
  SPEAKER_00: It's like build it early in and grow off of that rather than get ahead of yourself, lose a ton of money learning and have to take a step back, anyways.
• 22:49
  SPEAKER_01: It's always a flag when we do discovery meetings too, because I tell people that I'm very selective of the brands.
• 22:54
  SPEAKER_01: I don't blame brand collect at all.
• 22:56
  SPEAKER_01: And a lot of times people will be like, Well, why wouldn't you just get all the brands you want?
• 23:00
  SPEAKER_01: And I'm like, because again, you don't understand the people do not understand all the mechanics that go in.
• 23:04
  SPEAKER_01: And once you drop the ball in customer service, when you drop the ball in the attention to detail, you can just mess up one small detail and it might be 50 locations, and that's your that's your month.
• 23:13
  SPEAKER_01: You know what I mean?
• 23:14
  SPEAKER_01: So totally it's just yeah, it's just really important for everybody to to understand that and for our audience as well.
• 23:19
  SPEAKER_01: You know, our audience is industry focused, so all the relevant terminology that we're using is all relevant to everybody that's out here.
• 23:25
  SPEAKER_01: Um, 40% of our followers are founders, CEOs, and senior executives in in the area and stuff like that.
• 23:30
  SPEAKER_01: So this is a perfect kind of I love this high-level conversation that we're having as far as that goes.
• 23:34
  SPEAKER_01: And to connect with you on uh on life story there, yeah, starting it out in breakage.
• 23:38
  SPEAKER_01: Uh, if you ever heard of breakage in the back of the warehouses where they fix all the cases.
• 23:42
  SPEAKER_01: So I was 19 years old and started out in breakage, and uh then I worked into merchandising for a long time, and same exact thing you said, that's why I was smiling so much.
• 23:49
  SPEAKER_01: A sales rep went on maternity leave and they needed somebody to go in for a couple weeks, and I was like, Yeah, sure, I was going to school at university.
• 23:56
  SPEAKER_01: Yep, and all of a sudden I was hooked and uh improved out, and she ended up not coming back and wanted to stay at home, and it worked out perfect and turned into a full-time job in sales while I was there.
• 24:06
  SPEAKER_01: I was 21 years old, and they literally I won't say the big brand, but it was a major beer brand, one of the big three, would give us$250 for every bar we went into to spend at the bar.
• 24:16
  SPEAKER_01: I'm 22 years old, and I'm in Philadelphia, downtown, and I and I did it was unlimited.
• 24:23
  SPEAKER_01: You just had to log it in, and so I would walk into bars and we'd just be handing out drinks and stuff like that.
• 24:28
  SPEAKER_01: And I I connect with you on the on one piece I want to be vulnerable with.
• 24:32
  SPEAKER_01: I want to talk about you mentioned about how everybody was older, and I want to say, like, I don't say this as a bragging thing, and I want to connect with you on that for anybody listening.
• 24:41
  SPEAKER_01: Is when you advance, like we have at a at a in your 20s to as vice president and and president, and you're leading dozens of people, and the age demographics are mostly weighted older than you.
• 24:53
  SPEAKER_01: I I want to connect on how challenging that is and how a lot of people don't understand not just the imposter syndrome, and this isn't a victimhood standpoint.
• 25:00
  SPEAKER_01: I want people to all understand, and I want 20-year-olds that might be in this situation to listen and get confidence behind them.
• 25:05
  SPEAKER_01: That while there's an imposter syndrome sometimes, it's really hard also to keep the noise out and try to figure out what it is you're supposed to do while also being 20-some years old, not knowing what we're supposed to do.
• 25:15
  SPEAKER_00: It's a little bit of fake it till you make it, but it's also earning the respect of those, and there's a reason why you're being put in that position.
• 25:22
  SPEAKER_00: Um, because you've earned somebody else's respect.
• 25:25
  SPEAKER_01: Yeah, it's uh it's a challenge.
• 25:26
  SPEAKER_01: And I want anybody that that feels like that, and and I I get a lot of content from people and guests and stuff like that that are like, I don't know what I'm doing, I don't feel like it.
• 25:33
  SPEAKER_01: I I need people to say exactly what we just said, is you're there for a reason.
• 25:37
  SPEAKER_01: You know, if you if you drew straws in the in the break room and you pulled the shortest straw, then that's a different scenario.
• 25:42
  SPEAKER_01: But majority of people are put there for a reason.
• 25:44
  SPEAKER_01: So yeah, it's um it's grow growing up in in the industry and doing that, it's it's exciting to meet people like yourself that understand the scale that it that's involved in everything.
• 25:53
  SPEAKER_01: And I appreciate you taking the time today to have this conversation.
• 25:56
  SPEAKER_01: Are you guys you guys in every single state at this moment with perfect hydration?
• 26:00
  SPEAKER_00: Perfect hydration.
• 26:01
  SPEAKER_00: I my new thing is it's easier for you to tell me for me to tell you where we're not than where we are.
• 26:06
  SPEAKER_00: Uh so um, yeah, I mean, you can find us in National Kroger, National Safeway, National Walmart, National CVS.
• 26:13
  SPEAKER_00: We've got a few, a couple few source bots like Publix and Meyer and um a few of the others, but I mean for the most part, you can find us everywhere, and obviously on Amazon.
• 26:21
  SPEAKER_00: I mean, it's an it's a it's a whole nother part of the the industry right now that's just absolutely exploding.
• 26:27
  SPEAKER_00: I mean, it feels like just this past year, consumers are going digital.
• 26:32
  SPEAKER_00: I mean, we started our year out at 10% of our sales at Walmart were through Walmart.com and we ended somewhere close to 30% by the end of the year.
• 26:40
  SPEAKER_00: So there was a massive shift, and we're seeing that shift across other retailers as well.
• 26:44
  SPEAKER_01: There was a time where it was like five to five to seven percent revenue opportunity, and it's just really blown up.
• 26:50
  SPEAKER_01: Some of our clients are seeing some excellent growth in the DTC uh e-commerce section.
• 26:54
  SPEAKER_00: Well, and it helps that Walmart's invested, and I think they've truly come to compete against Amazon.
• 26:59
  SPEAKER_00: I don't know if anybody else had the resources to necessarily do that, and Walmart seems to be the right place to do it.
• 27:05
  SPEAKER_00: I mean, that they've got the the local distribution with the stores being able to deliver locally, and you've got a familiarity with most consumers on what they carry, and it just makes I it makes a natural fit to compete against Amazon.
• 27:19
  SPEAKER_01: Yeah, it does.
• 27:20
  SPEAKER_01: And and once even before Walmart kind of rolled out the e-commerce, they they when it came down to smaller brands and stuff like that, they have a really they I like the strategy that they have.
• 27:29
  SPEAKER_01: You know what I mean?
• 27:29
  SPEAKER_01: They don't roll, they don't roll a lot of stuff out in big bulks, they very much strategically try to keep it to your to your home base and build out your local community first.
• 27:37
  SPEAKER_01: And I like that.
• 27:38
  SPEAKER_01: Let's talk a little bit about uh with Star City, what you guys have going on, and everything's kind of new for the public.
• 27:43
  SPEAKER_01: So anything you want the public to kind of know about that brand.
• 27:45
  SPEAKER_00: Absolutely.
• 27:46
  SPEAKER_00: So Star City Beverage is a better for you driven private label company.
• 27:51
  SPEAKER_00: We don't we don't thrive in a commodity market.
• 27:54
  SPEAKER_00: We are very innovative, oftentimes more functional beverages.
• 27:58
  SPEAKER_00: We're definitely not going to be the cheapest and compete on again on like a commodity scale, but we will we win out with customer service, with innovation development.
• 28:08
  SPEAKER_00: All in all, just the follow-through is a lot different than I think than most other private label companies.
• 28:12
  SPEAKER_00: Um, we tend to play more in the natural space because of the innovation side.
• 28:16
  SPEAKER_00: So we play we do alkaline water, we do prebiotic sodas, we're developing around protein sodas.
• 28:21
  SPEAKER_00: We're really on trend when it comes to private label beverages.
• 28:25
  SPEAKER_00: And oftentimes we say we do private label beverages and we get tons of bids, but I know we're not going to compete already, honestly.
• 28:33
  SPEAKER_00: Um, we we we really do win out when it comes to innovation.
• 28:37
  SPEAKER_01: It's one of the uh it's the best quality over quantity scenario you could have.
• 28:40
  SPEAKER_01: I mean, that's really what it is.
• 28:41
  SPEAKER_01: Chase chase into the bottom has never has never really worked for anybody.
• 28:44
  SPEAKER_00: We've yeah, we've never really wanted to pack for everybody.
• 28:47
  SPEAKER_00: We've got a few very strategic relationships where we want to go, again, 10 miles deep.
• 28:52
  SPEAKER_00: And if we can pick up some some of the smaller regional customers that struggle.
• 28:57
  SPEAKER_00: And another thing I think we do well at is we, because of our strategic uh relationships that we have with our packers, it allows us to get our minimums lower than most as well.
• 29:07
  SPEAKER_00: And so we can work with some of those smaller regional customers that have trouble sourcing private label as well.
• 29:12
  SPEAKER_00: So we play for the big guys, but we also I think we're an advantage to some of the smaller retailers as well.
• 29:18
  SPEAKER_01: Um, just for my own personal thing, too, do you guys mess around with the hemp infused beverages yet or kind of wait until regulation shakes out and all that?
• 29:25
  SPEAKER_00: Definitely should wait until regulations shape out.
• 29:28
  SPEAKER_00: It's just and it's it's interesting on the it's it's I think on the private label side, I'm I'm not sure if it'll ever make it there.
• 29:34
  SPEAKER_01: I'm I don't I don't expect it on that.
• 29:36
  SPEAKER_01: I was just curious about co-packing and private label, yeah.
• 29:38
  SPEAKER_01: We we've exported that I can see retailers doing it, but that's about it.
• 29:41
  SPEAKER_01: Yeah, yeah, yeah.
• 29:41
  SPEAKER_00: We've exported on the branded side, but it's just not within our portfolio.
• 29:45
  SPEAKER_01: No, that makes complete sense.
• 29:46
  SPEAKER_01: Um, where when you guys are looking at you guys have uh multiple co-packers across the area.
• 29:51
  SPEAKER_01: I think I was looking at the site and saw multiple states and stuff like that.
• 29:54
  SPEAKER_00: Yeah, so um we we we have we take a uh an interesting approach with with our um our packers and and the facilities we work with.
• 30:01
  SPEAKER_00: We don't um we don't outright own any of them, but oftentimes what we do is we look for, and I don't want to say struggling facilities, but facilities that have kind of hit their peak and need help with growth beyond that.
• 30:11
  SPEAKER_00: And so we'll come in as a strategic partner, invest money, CapEx money in regards to equipment, um, resources for the facility.
• 30:20
  SPEAKER_00: And then oftentimes with that, we'll take us maybe a small piece of equity in in the facility.
• 30:25
  SPEAKER_00: But with that, we take the exclusive um on the relationships with the retailers.
• 30:29
  SPEAKER_00: And so we'll allow the facility still to pack for all the national brands and kind of control their destiny on that side.
• 30:36
  SPEAKER_00: But we ask that they do not interact with the retailers and allow us to be their private label, call it retailer arm.
• 30:42
  SPEAKER_00: And it's worked out really, really well for us.
• 30:44
  SPEAKER_00: Um, it allows us to control our capacity.
• 30:47
  SPEAKER_00: And if we need more capacity, it doesn't limit us.
• 30:49
  SPEAKER_00: It allows us to go out and find more facilities within our network.
• 30:52
  SPEAKER_00: But we've built out a really nice network with multi-capabilities, and oftentimes it it positions us to be a little bit more boutique and customizable from what we're able to offer on the private label side.
• 31:04
  SPEAKER_00: So we've got capabilities around water and canning, and we're even looking into powders now and even some sauces potentially and some snacks.
• 31:12
  SPEAKER_00: So we might even move into food a little bit, but um, it's always been beverage and better for you.
• 31:16
  SPEAKER_01: Yeah, we see a lot of that.
• 31:18
  SPEAKER_01: I'm in Pennsylvania, so I saw that on your list as far as that goes.
• 31:21
  SPEAKER_01: So I was kind of I was trying to figure out who it was that you were connected with there.
• 31:24
  SPEAKER_01: But but no, it's um we've seen a lot of success with that.
• 31:26
  SPEAKER_01: I mean, um, you know, in different areas and stuff like that.
• 31:28
  SPEAKER_01: But co-packing is the future.
• 31:29
  SPEAKER_01: I think there was a period where it hit a big spike and then it disappeared for a bit, but it's back up again.
• 31:34
  SPEAKER_01: And I think I don't know you know what what the factors were and stuff like that, but I think it's it's one of the best things that that's going for in the beverage space.
• 31:41
  SPEAKER_01: So I'm excited to see you guys doing that in the vertical integration port.
• 31:44
  SPEAKER_00: Yeah, and I mean oftentimes those capabilities kind of coincide with the brands.
• 31:48
  SPEAKER_00: So I mean, we're looking to move into cans, we'll go make relationship with canning facilities, and so it works really well for both the brand and the private label side.
• 31:55
  SPEAKER_01: When you guys uh are how how involved with the brands, like do you end up having to do DSD and market support when you do private label, or is that something where most of the time they're handling it all in their own internal?
• 32:06
  SPEAKER_00: It's all dead net.
• 32:07
  SPEAKER_00: I mean, we uh oftentimes you still need to be the lowest price, and it's got to compete against the national brand at a value level, and so it tends to cut out all the marketing support, all the slotting, and it really puts it back on the retailer to support it themselves at the cost that we give it to them.
• 32:21
  SPEAKER_00: Oh, that's awesome.
• 32:22
  SPEAKER_01: What um are there anything else, Jared, you wanted to cover or anything like that?
• 32:25
  SPEAKER_01: I'd leave the floor open on the on the tail in there.
• 32:28
  SPEAKER_00: No, I mean, I we covered it all.
• 32:29
  SPEAKER_00: I mean, it's it's been a it's been a wild ride.
• 32:32
  SPEAKER_00: I definitely think what we do on the private label side is very unique.
• 32:34
  SPEAKER_00: And then the brand, I mean, it's just on fire right now.
• 32:37
  SPEAKER_00: It's one of the fastest growing waters in the country, and uh we'll continue to support it and grow.
• 32:41
  SPEAKER_00: And I'm really excited for some of the innovation that we're gonna be launching in the water.
• 32:44
  SPEAKER_00: I mean, it's it's tough to describe what what innovation looks like in water.
• 32:49
  SPEAKER_00: So it's like new sizes, and I'll tease a little bit up, but possibly some flavors launching later this year.
• 32:55
  SPEAKER_00: But um, yeah, really excited about what we're doing.
• 32:57
  SPEAKER_00: I think what it's very different from what most brands and companies do.
• 33:00
  SPEAKER_00: Awesome.
• 33:01
  SPEAKER_01: I really appreciate it.
• 33:02
  SPEAKER_01: Uh, I close out with this at every time.
• 33:04
  SPEAKER_01: I try to remind people as well that there was no prep.
• 33:06
  SPEAKER_01: There was we do not know each other.
• 33:08
  SPEAKER_01: Jared and I have never shaken hands, we've never looked each other in an eye without a screen.
• 33:12
  SPEAKER_01: Uh, and I want people to understand that we're talking about fun stuff.
• 33:15
  SPEAKER_01: We're talking about like advancing your career, leadership, different brands that are going on.
• 33:19
  SPEAKER_01: But at the end of the day, we want to remind everybody to be a good human being, to look people in the eye when you see them on the street, open a door for a stranger, don't be an asshole, and just be out there and just be a good person.
• 33:31
  SPEAKER_01: And that we curse a little bit every once in a while.
• 33:34
  SPEAKER_01: And I gotta lay it out there because the world's getting crazy, and uh the comfort in life is beverages.
• 33:39
  SPEAKER_01: And I really appreciate you know, brands like you producing stuff that are high quality and bring positive things to the world, and that's the thing that I think people need to understand is you're bringing a benefit and the benefit of what it is.
• 33:50
  SPEAKER_01: It's not something that it brings people down, it doesn't do anything like that.
• 33:53
  SPEAKER_01: You're bringing positive energy out into the world, and and I just really appreciate it with the way things are, and I want to end it on a good note is that uh I really appreciate the time meeting you.
• 34:01
  SPEAKER_01: You made this really easy, and uh, I tell I tell people I have to publicly tell you that I give you credit because not many people actually use the amount of emails I get where they they don't have prep and there's no questions, and they're like, I'm not.
• 34:12
  SPEAKER_01: So I gotta give credit publicly to the courage that you had for coming on, and I hope it was painless for you.
• 34:17
  SPEAKER_00: So no, it was an easy one.
• 34:19
  SPEAKER_00: Thanks, Nate.
• 34:19
  SPEAKER_00: No, you gave me mostly softballs.
• 34:22
  SPEAKER_01: Exactly, exactly.
• 34:23
  SPEAKER_01: Sounds good.
• 34:24
  SPEAKER_01: Well, yeah, anytime somebody sits down and says, Talk about you, I said easy peasy, man.
• 34:28
  SPEAKER_01: Let's go.
• 34:28
  SPEAKER_01: Yeah.
• 34:28
  SPEAKER_01: So uh perfect, man.
• 34:30
  SPEAKER_01: Well, Jared, I really enjoyed meeting you, and I love the family love our uh parallel lives we lived and different things like that.
• 34:35
  SPEAKER_01: And I'm uh this won't be the last time we'll talk for sure, man.
• 34:37
  SPEAKER_01: I look forward to getting to know you.
• 34:39
  SPEAKER_00: Hopefully, hopefully we can meet in person one of these days soon.
• 34:41
  SPEAKER_01: That will happen.
• 34:42
  SPEAKER_01: That will happen for sure.
• 34:43
  SPEAKER_01: Hey, Jared, you have a good rest of your day.
• 34:44
  SPEAKER_01: You enjoy yourself, man.
• 34:46
  SPEAKER_00: Thanks, Nate.
• 34:46
  SPEAKER_00: You too.
• 34:47
  SPEAKER_00: Take care.