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Talking Rain's Klock: Sparkling Ice's Exponential Growth(Audio) · Bloomberg Intelligence

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  Speaker 1: I'm Charlie Palatin. That's a Bloomberg business flash. You're listening
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  Speaker 1: to taking Stock with Kathleen Hay and Pim Fox on
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  Speaker 1: Bloomberg Radio. The beverage shelf is very, very crowded, from
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  Speaker 1: some very sweet ones like Coca Cola and Pepsi to
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  Speaker 1: a whole host of new, sparkling waters of all kinds.
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  Speaker 1: So how do you build your business in an environment
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  Speaker 1: like this? Well, Kevin Clark has done it pretty successfully
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  Speaker 1: so far. He's president and CEO of Talking Rain Beverage Company,
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  Speaker 1: and he's based out in the Seattle area. Kevin, welcome
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  Speaker 1: to the show. Thank you very much. So Talking Rain
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  Speaker 1: I've had your sodas. What do you say? I mean,
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  Speaker 1: I think a lot of people to say, listen, man,
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  Speaker 1: you know you get a club so that doesn't have sugar,
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  Speaker 1: you put some fruit flavor in there, They're all the same.
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  Speaker 1: What do you say makes talking rain different? Well, I
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  Speaker 1: think one of the things that we work very hard
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  Speaker 1: on is that everything from the color to the smell
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  Speaker 1: to the flavor that's consistent with whatever the name of
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  Speaker 1: the beverage is. And that is something that is very
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  Speaker 1: difficult to do, and that's why it probably takes us
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  Speaker 1: about two years just to develop a flavor, and something
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  Speaker 1: we spend on awful lot of time on. Ultimately, consumers
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  Speaker 1: want taste, and that's one thing we think we we
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  Speaker 1: master very well. Kevin, just taking a look at some
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  Speaker 1: research here, the non alcoholic beverage industry is a proxyly
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  Speaker 1: a hundred and eighty billion dollars in the United States.
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  Speaker 1: About thirty five billion of that is up for grabs
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  Speaker 1: for small brands such as yourself. Explain how you go
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  Speaker 1: head to head against larger brands such as Coca Cola,
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  Speaker 1: such as those items from PepsiCo. How do you get
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  Speaker 1: on the shelf and what does that do for your strategy. Well,
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  Speaker 1: one of the things we were fortunate we saw some
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  Speaker 1: white space. The sparkling water category was really being ignored.
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  Speaker 1: Well we jumped into it. Uh. The two big brands
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  Speaker 1: in this country did not have products in that space.
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  Speaker 1: And so one of things that helps certainly jump try
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  Speaker 1: don't try and go head to head too early, and
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  Speaker 1: so we were able to get in there and grow
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  Speaker 1: very rapidly, uh to get shelf space UH in an
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  Speaker 1: area that was really pretty much ignored. Now that we're larger,
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  Speaker 1: in the meantime, we've built a business where we have distributors,
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  Speaker 1: we have business intelligence teams, marketing teams. UM. We've now
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  Speaker 1: built the foundation of a company that's there to supported
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  Speaker 1: everything from category management to you know, some true good
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  Speaker 1: financing type of opportunities. So now we're able to operate
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  Speaker 1: as a beverage company. And now that we're in that
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  Speaker 1: mode and retailers are used to us, uh, it certainly
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  Speaker 1: gives us the opportunity. Now staying to to toe, how
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  Speaker 1: did you get into this business? Well, the company actually
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  Speaker 1: was founded back in uh are excuse me, in seven
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  Speaker 1: and our current owners, uh Don Klein and Larry Headner
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  Speaker 1: came in originally as uh kind of angel investors. And
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  Speaker 1: so there was a sparkling water business actually it's called
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  Speaker 1: Talking Rain today and UM was just a very entrepreneurial
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  Speaker 1: company and it was they saw things like Clearly Canadian
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  Speaker 1: and some other sparkling brands that maybe we're earlier on
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  Speaker 1: and I want to do similar things. But we really
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  Speaker 1: didn't make a push nationally until two thousand ten, Kevin,
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  Speaker 1: And why din't you could tell us the story how
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  Speaker 1: you got into a market like Ireland and what the
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  Speaker 1: reaction was, because I know you've told me the story previously,
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  Speaker 1: the reaction from many of the retailers and the consumers
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  Speaker 1: about getting into that market. Yeah, we actually went over
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  Speaker 1: there and asked the retailers if they'd be interested in
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  Speaker 1: the brand and were stunned at the reception that we
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  Speaker 1: got from the retailers. And then in April we started
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  Speaker 1: servicing the market and we're just blown away with how
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  Speaker 1: fast and what the takeup was. And what we discovered
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  Speaker 1: over in Ireland, for instance, is it's a very heavily
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  Speaker 1: soda dominated market. You certainly don't see the huge breadth
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  Speaker 1: of variety, uh, that you have in the US. I said,
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  Speaker 1: we've seen that they've been a little bit more aggressive
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  Speaker 1: over there on sugar taxes and and tackling some of
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  Speaker 1: those things. So the consumers over there didn't have much choice,
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  Speaker 1: and but it looks like they were ready, uh for
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  Speaker 1: a new brand to come over there to start giving
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  Speaker 1: them opportunity to get away from sugar. Well, I'm on
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  Speaker 1: your bandwagon. You have been for many years, Kevin clock.
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  Speaker 1: So this is a popular product in my household. How
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  Speaker 1: do you grow? What's next? Well, we've still you know,
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  Speaker 1: we've gotten very large and the grocery and mass in
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  Speaker 1: the United States, but there's plenty of opportunities still inconvenience.
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  Speaker 1: Most of the time, you should be about thirty of
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  Speaker 1: your business should be in convenience, and we're eight percent
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  Speaker 1: right now food services for instance, schools. We're one of
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  Speaker 1: the products that actually can be sold at schools, which
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  Speaker 1: is a great foundation for us. And we'll be in
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  Speaker 1: schools and forty six of the fifty states by this fall.
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  Speaker 1: So we've got plenty of play of room for our
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  Speaker 1: base brand to grow and plus international now though, as
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  Speaker 1: we have gotten a beverage company UH put together, we're
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  Speaker 1: now starting to expand into adding UH potentially other brands
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  Speaker 1: will come into the fold and certainly will continue to
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  Speaker 1: grow line extensions of Sparkling Ice, so lots of room
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  Speaker 1: to grow still. Kevin described the essential quality of the packaging,
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  Speaker 1: particularly when it comes to the beverage industry. Well, and
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  Speaker 1: you know, people forget, I think that consumers carry around
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  Speaker 1: the bottles in their hands, and so the product beverages
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  Speaker 1: tend to be more of a badge to somebody. So
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  Speaker 1: it's it's what they want to be seen, and so
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  Speaker 1: that's that's important. So it's gonna be something people are
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  Speaker 1: willing to be seen with in our particular case, by
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  Speaker 1: having the ability to see the liquid and the vibrancy
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  Speaker 1: in terms of how it comes out, it looks refreshing.
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  Speaker 1: So if you can, you know, you can make the
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  Speaker 1: package really display who you are so the consumer doesn't
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  Speaker 1: have to think about it. And in a particular case,
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  Speaker 1: you know, we are zero calories, and so the consumer
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  Speaker 1: likes holding something that's then it kind of reminds them
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  Speaker 1: of being zero cowers. Beg your pardon, Kevin, go ahead,
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  Speaker 1: alright to say the packaging is extremely important and conveying
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  Speaker 1: the message of your brand. All right, thanks for conveying
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  Speaker 1: your message. Kevin Clark is the president and the chief
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  Speaker 1: executive of Talking Rain Beverage, a company. The product is
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  Speaker 1: Sparkling Ice. They're based in Seattle. You can of course
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  Speaker 1: follow them on Twitter at Sparkling Ice and Talking Rain.
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