Advice Line with Bill Creelman of Spindrift

0:00 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 like help with. Alright, let's get to it. Joining me this week is Bill Creelman, the founder and chair of Spindrift. Bill, uh welcome back to the show.

0:41 Thanks, Kai. Great to see you. You were First on a show back in 2020 to talk about the origin story of Spindrift, and then you came back on. um later on during the pandemic, I think. Um and if you guys missed either of those episodes, we'll drop a link to them in the show notes. Um just a great story Before Spindrift, you actually had a whole different life, Bill. Uh in the n nineties you were selling smoked fish and jams and ice cream and then uh you eventually pivoted into into cocktail mixers. You start a small little brand.

1:11 which became a big brand and and you ended up selling that to Diaggio. And then uh there was a period of time where you were kinda drifting and trying to figure out what to do next. And He started squeezing fresh lemon juice and grapefruit juice into seltzer water, and then that led to a new idea. For a new kind of of soda, uh and before long, of course, spindrift was born. And we talked about how you got into Trader Joe's and and that was sort of the first big step toward toward building an um amazing and iconic brand that I am a big fan of and I consume many cans of uh every day. So um just an amazing story. Well thank you. Yeah, and so it goes. I mean, uh trying to

1:47 Fine seams from the consumer side, from the business side, and it's been a circuitous journey, but one that I've really enjoyed. Um and the big news this year is that a is that a majority stake of spindrift was sold to a private equity firm called Griffin. Um the deal reportedly valued the brand at around uh six hundred fifty, seven hundred million dollars. Uh so congrats on that. Yeah, thanks. We're 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.

2:16 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 Um you know, new ideas are on the table, which is as you know, is so important for for growth. Bill, before we bring our callers in, I I wanna ask you a couple questions. And one of them,'cause it may come up today, was uh and and this was

2:36 Yeah. Anybody who hasn't heard this episode should go back and listen to it because one of the most interesting parts about the our conversation years ago was that the discussion we had around the challenge of s of basically making shelf stable Seltra water. Using

2:52 fresh juice, squeeze juice and not you know chemical or even quote unquote natural flavor enhancers, which a lot of the other brands were doing. And this is r huge challenge. you had to kinda overcome, even though it may it would have made

3:07 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 f first we thought it was important from a kind of a foody perspective. You know, I am

3:32 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.

3:46 What ultimately emerged is really our our key point of difference and today, you know, we've really embrace that idea we we sort of stand Still kind of on our own, but really is sort of w where we believe, you know, food and And ingredients should go, which is as as unprocessed as you can make them. Yeah. Well in the in the early days of Spindrip you actually had

4:09 two products. One was uh basically the spindrift that we know today. And the other one had sugar. It was it was kinda more like soda and and that sweeter one actually outperformed. the spindrift one, but you drop that. The the you drop the the sugary one, which seems Almost counterintuitive, right? Why would you drop the one that's selling better?

4:30 But of course it it you know, it was a decision that w that would would would bear up. 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 gonna be confusing ultimately. Um for you know to have somewhat similar products, one with sugar, one without but it was It was really going back to the learning some stirrings. You know, you just can't do It's hard enough to make one brand successful.

4:54 But to 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 un 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.

5:17 It just was gonna take consumer a little while to get there and You know, that that's really that was that belief that really led us to that uh to that change. But you basically were saying let's Cut off. a a a s significant revenue stream.

5:31 Yeah, about half our revenue. I mean it's kinda nuts, right? But you believe that that in the long run, of course, that would pay off. Yeah, we We had no evidence. It wasn't like we did, you know, uh Consumer study or we didn't, you know, talk to the market. It just

5:45 for us, you know, it was as sugar was starting to become More and more on people's radars two thousand twelve, thirteen, fourteen. And 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

6:04 What I always refer to, 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 fifteen years after starting the business. But We think there's the opportunity with some of these other categories. Sugar one dimensional flavor. So if you can introduce other flavors alongside it, a little sweet, a little tart.

6:32 We think you won't miss that big hit of sugar. Um that's r 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. Uh let's welcome our first caller. Please tell us your name. Uh 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.

6:53 I'm the owner CEO of Donna's Picklebeer. 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 pickl juice.

7:11 Exactly. You make a light lager. And we make pickle brine about twenty 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 nineteen forties. I gotta say there's something about those flavors that is working for me. 'Cause 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 Yeah,'cause it's so it's so weird and cool.

7:41 A pandemic idea. I had been running Cocktail bars. Around the country for years. And during the pandemic, I couldn't sit still and became a mailman in West Hollywood.

7:52 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 uh I happen to be on route one day and

8:09 Damas Picklebeer. kind of popped in my head. And uh I drew our can out on a piece of paper. And I send it to my business partner, my now business partner. I said, What do you think about this? And he said, This is amazing.

8:21 How did you so Donna's your mom and I'm looking at your website and you've got like sort of a retro look, which I love, but but how did you I mean what wha what in your brain happened where you were like pickles, beer, pickles, beer, pickles of beer together, like you know, chocolate and peanut butter. Well they made Reese's peanut butter cups, right? How did 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 Spring sitting in the pool of the Ace Hotel with a couple of my friends.

8:52 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 thirty thousand steps a day, delivering mail during, you know, the pandemic, the holiday season, the election. So yeah, I was just kind of Kinda 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 twenty To thirty breweries, and everybody said no. Yeah. This is weird. They were like, I don't this isn't gonna 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.

9:41 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 kinda 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 sixteen states. We should be in nineteen states by the end of the year. We're just waiting for a couple of contacts 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 you Doing that.

10:13 Yeah, so we're making everything through Copackers, 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 twenty 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 what's your question for us? Yes. Our brand is growing fast, and as we scale

10:45 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 fine 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.

11:09 But it feels less authentic. Got it. Okay, so right now just to be clear. You are using fresh pickle brine. Yes. That's basically an extract of cucumbers. Or what? Yeah, just so we're not throwing so many cucumbers or composting so many cucumbers. So okay. All right, Bill Krillman, I wanna bring you in here because this is uh right up your alley. I mean you guys you struggled with how to make sure that you didn't have have to use

11:37 Anything but fresh real fruit. Any qu 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

11:50 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. I I like Guy, I love The idea. I love pickles. I I love Marinating with pickles. I you know, we make pickled products at home. So I'm I'm I think the idea is real. Real legs. I guess.

12:09 You know, one of my questions maybe to start out, I don't know if this is a category or not, but it are you are you sitting in the set with all the other beers or are you in your own sort of flavored Section of the of the beer set. We're in with other beers, but You know, we're mostly on premise. We're about ninety percent on premise. It's how I chose to build the brands.

12:29 Um So we are sitting next to like a lot of Miller Highlife and a lot of You know. Larger More

12:39 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 thirty nine dollars a case.

12:53 Turns up being a buck sixty a can. And then usually selling it for about seven, eight bucks. But um 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 you're Are d are you self financing this thing?

13:15 So we're in our first fundraising phase. We're about halfway through it right now. Um, but sales couldn't be any better. We started with four hundred cases two years ago. And now we're selling anywhere from five to ten thousand cases a month. The cases are twenty four packs. So yeah, we're we're doing really good. I it obviously starts as a novelty idea. I mean, it sounds like something you would see at a

13:41 At a f you know, fair or something. But I I mean pickles are hot. I mean even you know if you read any of the Trade. magazines, you know, Chipic, all that flavor is performing really well. I think it's an amazing idea. I think To j to go directly to your question, I mean, I think you know if you're if you're familiar with Spindrift, we know

14:00 probably what my answer is gonna be, which is like What what is hard right now for you is going to be your point of difference later, you know, so trying to figure out You know, how to make this brine, you know, using All of the ingredients that are Called that on the label.

14:18 Well only Someone's gonna come out with another Similar product. It's a real copycat category. And you you need something that you can s defend. Ultimately when you know bars or or retailers eventually are making a choice between your brand and

14:35 Something else. In essence, it'll be very easy to add. If you come up with a brine But uniquely your recipe. You know, make it much, much harder for someone to repeat it down the road. Yeah.

14:46 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. Pickle beer. Wha like if I saw this, and I guess it's a you have'em 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, okay. 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 gonna have to make b he can't build a br a br a company around one

15:18 Flavor one brand. Like you couldn't build spindrift around Grapefruit. that's it, right? You ha he's gonna 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 and I think pickle beer just on its own is relatively self explanatory. I haven't tried it.

15:40 Yeah. I would do as much as you can with one product. I mean in the beer category, Corona, you know, has one had basically one skew for a number of years. So I also 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 I

16:01 I I think it's that Interesting actually that there'll be enough of an audience there And your distributors will love you. 'Cause you're not asking him to carry, you know, thirty SKUs. You're really asking him for one And

16:16 I imagine the sale is is really easy for them to make and it and if the 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 if this really takes off, it's just a matter of time before you know, the other other beer manufacturers

16:35 produce a pickle flavored beer. And that's and that's really I think why you wanna go in, you wanna move quickly, you wanna lock up distributors ideally if they're willing to, you wanna try to get some sort of exclusivity everywhere you can. Maybe you can get a pickle beer exclusivity to your distributor. You know, you can you can start to really become synonymous with that category. And And I I do think all that's in front of you. What's happening now is these things are happening really quickly, you know, with social media and you know, virality, people are learning about products. So you you just want to be ready to move, you know, so that uh so that there aren't too pickle

17:12 Yeah. For sure. Awesome. Awesome.

17:18 Josh, any last thoughts before we let you go? Just wanna say thank you for your time. Awesome. Josh Schenkowicz Donna's pickle beer. Good luck, man. Have a nice day. Wow, that's cool. It's it's something that I just have not

17:30 You know you when you see something that you just have not seen before. It doesn't happen that often. It's a great mashup. I mean it really it's kind of Yeah, the beer category is looking for new innovation. I think that could be a really funny. Entree.

17:44 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, start with Sam Adams and then you know, they've got a tons and tons of different brands, but I would imagine that Sam Adams is still f 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 gonna take a quick break, but when we come back, another collar, another question, and another round of advice.

18:13 I'm Guy Raw, stick around, you're listening to the advice line on how I built this lab. Welcome back to the advice line on how I built this lab. I'm Guy Roz, and today I'm taking calls with Spindrift founder Bill Creelman. Uh, Bill, you ready for next call? I'm ready. Alright, let's do it. Please tell us your name, uh where you're calling from and just one line about your business. Hey guy, hey Bill, thanks so much for having me. Uh I'm a huge fan of the podcast, long time listener. First time caller.

18:54 First time caller. Yeah, that's right. Alright, my name is Zach Will. I'm calling from Marshfield, Massachusetts. It's a town about thirty 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.

19:13 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'cause I think you started stirring in like New Bedford, right? We did, yeah. Yeah. I always think of you when I think of New Bedford, you and Moby Dick. Um so Zach tell tell so these are

19:38 A Hawaiian Shirts but flannel? Yeah, exactly that. They we took our like traditional New England flannels. That's our like fashion staple. And just swapped out those plaid checkered earth tone colors.

19:53 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 the tr you know, the classic Hawaiian flow, the hibiscus kind of you see the 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 uh high school class project My junior year

20:23 I was seventeen 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 and For me, I have a closet full of Aloha shirts.

20:37 And I only get two, three, maybe four months out of the year to wear them before it's flannel season again. So I thought all right, what is something that New Englanders wear basically year round? Flannel shirts.

20:52 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.

21:09 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 twenty five now. Just graduated from college two years ago and Now I'm living up in uh Cambridge.

21:23 Okay, so this is what you're working on a hundred percent 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

21:37 UConn gave me nineteen thousand dollars in funding to Get the brand started and When I finally graduated. Uh a few years later. I

21:47 decided to take that leap and Making my full time job. Amazing. So how how how is you uh how are sales? What do you expect to do this year? So this year Uh we just broke a hundred forty thousand and we expect to do three hundred thousand by the end of the year. I found that

22:05 Eighty to eighty five percent 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. Like where I mean it's direct to consumer, but

22:17 Uh imagine you don't have a huge budget to to do ad spends. Are you doing in person events? Like how are you get 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

22:32 It really helped Kona Brand. jump up and start to scale but since the start of Cona Brand, since I got my first Flannels in, I've been doing craft shows, music festivals, uh weekend markets, anything that I can get my hands on. Uh. Yeah.

22:49 Get the flannels into the hands of the people. Cool. All right, before we we dive in further, what's your question for us? Yeah. Last year one of my main focuses was finding a marketing manager. And

23:02 I interviewed twelve, 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 sin I've been Very hesitant to hire again. How

23:18 Do you think I should hire the right person for a part time role? That's usually 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 the stuff out, you're doing all the packaging, plus you're trying to run a business. Okay. Bill, um, this is a uh they a a uh perennial challenge for

23:46 you know, early stage entrepreneurs. You you're doing everything and you need to hire somebody, but you also can't really manage somebody'cause you don't have the time to do that. And also you have to find the right person and it's really hard. Where do you start? It's really hard. And I I have to say, like just off the top, I mean, it seems like you're doing everything right. You're being really smart and conservative and not spending money that You don't have

24:07 A couple of questions, I guess, just to help answer that. Like one is So w you're you're you're gonna do three hundred thousand dollars in sales. It sounds like a lot of that revenue is gonna be generated by DTC. Is it Are the shows in your event sales fifty fifty with D T C like what is the breakdown of of the sales between the two channels? Yeah, it's pretty cool. So last year I would say that

24:31 Uh My Online D to C sales Compared to my show D to C sales were about

24:39 Fifty fifty. Maybe a bit more leaning towards the in person uh shows. But since starting my Uh

24:48 Online marketing, my Paid ads. It's completely switched. I'd say it's about Uh seventy five, eighty percent.

24:57 Online ads and then Nineteen, twenty percent. 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

25:09 You know, if if your business were to Ten X next year, would you be able to support that kind of growth? Mm-hmm. That is tough. I I'd say that cash flow is another one of my big problems because Uh

25:24 I am cash flow positive, I'm profitable, but Because I It's takes a huge chunk out of my cash flow. And

25:35 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 ten X.

25:47 scale like it this time next year without taking outside investment, I don't think. Zach, what you mentioned that you you wanna hire like a part time marketing manager, right? So so let's just kind of br dive 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 what would the priority what would their priority be?

26:11 Probably to run. Uh the social media aspect and the paid advertisements. I'm a very like numbers oriented analytical person. I do not have much of an artistic brain.

26:23 You need a creative creative. Yeah. Creative uh brain. So that's been a huge struggle for me and I feel like my time has Better suited. Uh towards business aspect of the business rather than the creative.

26:36 You know Again, I You're a couple hundred thousand dollars in sales, you've got a neat product. I'm a I'm a R right away I'm a fan. I'm a New Englander Fisherman Sheik is right up my alley.

26:47 And so I you know, 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, you know, only you can talk about it the way you do. And you're gonna be uncomfortable. But You know, sitting behind a

27:02 An Excel spreadsheet is not gonna 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 but in the meantime, be folding some of the things that can be automated.

27:17 That can be outsourced, you know, third party fulfillment. Things that are just not behind the scenes the cost the consumers aren't gonna see so that you can get as much revenue Through the doors you can. You know, at three hundred thousand dollars if you bring someone in and you hire them, that's gonna uh you know, that's gonna eat up a fair bit of your profit. I don't know what your margins look like. And there are third parties, you know, that can get you to

27:41 You know to to the next level, whatever that looks like, without having to take on the expense of you know the employment costs and insurances and all that kind of thing. And lastly, I'll just say You know, you're a young guy.

27:54 you you probably I assume you're a little bit risk adverse, you know, you're not looking to You know, leverage an apartment or a house, you know. And so I think the more you can kind of test and learn on your own Dime, if you will. Um, and keep the overhead down. When you do go out and raise money

28:12 You'll really be an immu In a different position of strength. than if you take a big swing early on with like more and more overhead. So I I think there's no question I agree with Kai, you need help dialing up your you know, you're in a rare category where you can build a big business online and through events. Yeah and I think as a founder you want to be in front of the brand as much as you can.

28:35 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 is that fair to say, Zach? Yeah, yeah. I want someone who can Alright.

28:50 handle that side of the business and like maybe talk to micro influencers and uh 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 you went to the University of Connecticut, clearly you were in a grand This is

29:10 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, gra 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 and this is something that they could even do remotely for some time. I mean I

29:34 Because the 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 this really sucks, and Bill You may have been there. I I've been there. It sucks. I hate doing this is 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 like Write it down, log it down. How do you write copy? How what's your t what's the tone of the brand? Almost like you're building a brand Bible. What w which audiences resonate the best? Um what's the voice of the brand? Like

30:12 A playbook, a brand Bible. So then when somebody does join you even temporarily, they can refer to that as You know, a and understand what you're trying to do. I love that idea. I Didn't even think that. I I use like Chat GPT sometimes to catch my

30:29 Brand voice and stuff it but I never even thought of like writing down my notes to use as a reference for future employees to kinda 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, as much'cause as soon as you identify that

30:57 That's the kinda marketing message, their first question would be, Okay, well tell me now what you want you know, how sh what voice should I adopt and it's gonna be It's gonna be yours, you know. It's gonna be the work you've done so far. So get started on that now. I think that's a great recommendation.

31:12 Yeah. Awesome, awesome. Seckwill, 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.

31:22 Yeah, I love that. I mean Who's gonna wear a Hawaiian shirt in the middle of January? In Marshfield, Massachusetts. Unless it's flannel. I I

31:32 I like That approach though. I think it's a neat concept. It is a New England is a really tough place to uh To dress for. Yeah, and if I'm r remembering correctly, you grew up in Western Mass, right? I did. Yeah, I grew up in the

31:50 And uh but I d I live yeah, and as you could memory on New Bedford, I spent fifteen years down in Fall River in New Bedford, so And I remember I mean kinda like this story, you got a grant, right? Like that's how you started. That's right. Yeah, for the t city of Fall River and the city of New Bedford both were kind enough to help me in the early days. So cool. Um and look at you now. Alright, we're gonna take a quick break, but when we come back, another collar, another question, and another round of advice. I'm Guy Ross, stick around, you're listening to the advice line on how I built this lab. Welcome back to the advice line on how I built this lab. I'm Guy Roz, and today I'm taking calls with Spindrift founder Bill Krillman. Uh, Bill, are you ready for our next call?

32:46 I'm ready. Alright, please tell us your name, where you're calling from, and just a line or two about your business. I'm Jean Pierre Parents, I'm in Portland, Oregon, and in two thousand and nine I opened Soma Kombucha. Cool, welcome to the show, John Pierre. It' uh John Pierre Parent. That's your name. Soma Kombucha. Okay, so

33:04 I'm assuming you sell kombucha and what would to where do you sell it? And yeah, tell me about a little bit about the about the brand. Sure, yeah. So we sell to stores, um, 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. Folks open the door with their phone and get in and help themselves and and check out on their phone as well. Wow, you can g literally oh it's like going to get cash from a cash point. You swipe your card, you go in

33:41 And you just get kombucha whenever you want and there's no staff in there? Yeah. Yeah, yeah, it's great. That's wild. Okay, tell me a little bit about how you started this kombucha brand. Two thousand nine, you said. So you've been around for a while. A little while, yeah. So my mom was brewing kombucha in the eighties and has 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 kinda like shy and leave class and And I thought well let's find a way to get people to gather up and have a little community after class and

34:15 It just went from there. Awesome. Okay, so you and you launched a this kombucha brand. And you've got tap room so people can go and Yeah. Draft kombucha. Tell me a little bit about the business. How's it doing overall?

34:27 Yeah, it's actually it's been a rough 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 of times, which was really challenging and Lost us a bunch of shelf space and stores.

34:43 Sales it at the tap rooms are down. And all of the expenses are are much, much higher. And so yeah, we were I was doing million and a half dollars a year for for several years, and the last few years that's that's really been uh dwindling. I started contract manufacturing for other Average brands.

35:04 In the last six months, and that has brought its own challenges. Um, I also do Beverage development and R and D for other brands, which is great, but it's just kind of like a one time Projects when we do it. Yeah, so I'm I'm really looking for The next

35:20 Stat. Cool. Well, lots of questions to to to ask you, but before we get to them, um what what question do you have for for Bill and I? Yeah, well so the four uh revenue channels that I just mentioned. I'm wondering what you guys think is the best channel for me to focus my My efforts song.

35:37 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 variety of reasons why that happens. Questions, thoughts, uh yeah.

35:50 No, it sounds I mean I My parents were Prada hippies in the seventies and eighties and I you know, I 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 it's a hard business, low margin business, super Finnicky.

36:09 I guess a question like where d where do you see yourself in ten years? You know, what like what would success look like? You know, on the other end of this. Yeah, well, I would like to be doing less jobs. And be doing a better job at at the ones that I'm focusing on. So I'd like to either

36:27 cut some things out or I'd like to get some more help. Um, I definitely would like to not be stressed about making payroll every two weeks, you know, and paying the rents. And so, you know, I mean I I could do a lot of different things. There's a lot of different things that I do well. Um, there's some things that I that I don't do that well. And Um all you know, also I've I've recently become a solo father of of my eight year old um special needs kid and and I just I really just need

36:58 To be able to make his company work. So that I can punch out and and focus on his needs. That's a It's a l a lot going on, especially being so dad. I guess Without going into

37:11 all the different margins and sort of the structure of the four businesses, like Which Which do you have the most confidence in today? Like is there one that you feel you you have a real heart for and And are energized by.

37:26 Well, six months ago I definitely would have said tap rooms. Um I love building them. I love, you know interacting with customers directly. I love How nimble the the flavors are and just being able to make something and put it out and you know and we we curate other wellness products and so I'm really passionate about that. But you know, my local business neighbors, tons of them are going out of business. Like I said, our sales are down.

37:52 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 kinda Save everything. Um and that has not And that's just barely breaking even after eight months, which is shocking because none of the other stores

38:10 Like they all after three months. We're profitable. So I'm I'm just I'm a little Unsure about. where to put, you know, my limited energy and resources.

38:20 What about the margins on the R and D or the the contract manufacturing? Yeah, on R and D they're high, on contract manufacturing they're low, but There is a lot of contract manufacturing work and it's it's very, you know, consistent. Um it comes with its own challenge as well, just managing the expectations of founders, especially if they If the product is kind of unproven and they give it to me and I follow the instructions and doesn't

38:47 Turn out like they expected 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 R and D and and contract mag manufacturing Are fairly robust.

39:03 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

39:20 competing with larger and larger companies which are getting into the space and You know, shelf space is getting really expensive. Um, as I'm sure Bill knows. Again, I I really relate to the situation. We have an expression here called simplify to amplify. And I'm not sure there's like a better example than this of like we really need to distill it down into like its most simple

39:44 form and and then build a 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 you know some of the contract manufacturing. You know, that's probably not the destination, right? You seem like you really

40:03 have hard for building a brand, you want to get back to the growth years. you know, maybe that kinda brings it back to zeros or at least to baseline and then allows you to start To build back up again. I I had fifteen years of you know trying to figure it out.

40:21 before we really were able to focus. And so I I guess my adv my early advice would be around distilling it to the simple one or two things you can do and do profitably. In in sort of quiet. You know Any of the expense overruns or

40:38 The noise so you could then You know, begin to rebuild. Yeah, I I agree. I mean, we've done so many episodes of the show where the founders had to shut down part of the business and it was painful. Right. Bill, you had to do that with with one of your early products. And Uh and then ultimately it made sense. It it was it was sort of the obstacle that was preventing the founder from flourishing or the business from growing. You know, I think

41:01 When I 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 growing. You see this in yogurts, you're seeing it in other products where, you know, people are really

41:26 promoting the probiotics and the and the gut health side of their products. Um and I wonder whether If you start to think about you and your experience in probiotics now sixteen 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 and produce a product.

41:55 D is that something that would fit in your into your wheelhouse? Yeah, and kind of the thing that has set Soma apart from other kombucha brands this whole time is that we have billions more probiotics because it's now. a special long 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

42:21 Product. Which I believe in wild foods and and wild fermented products are are gonna be a lot more beneficial, but it's a a little bit less uh easy to quantify. In terms of probiotics. Um And so you know, and it's interesting, it's always been my focus is the health side.

42:37 People are are always I feel like people are really focused on the taste and they w they want something that they can drink that happens to be good for them. So we focus 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 I could certainly, you know, move into other wild fermented products. Um, but it's it's kind of a its own Beast.

43:02 You know. Yeah. I think you're right on about wild probiotics. I mean, you're looking at brands like uh you know, Nancy's probiotic yogurts. Uh you know, there are all these brands I'm seeing where there's a real emphasis on on wild probiotics. I it it it could be a really interesting

43:20 Next step for you. Yeah, I agree. I mean in some ways like the world is starting to open up to the way you've been thinking about it for this whole time. You know and I think it's a really exciting time, but I do think that simplification process, you know, you Even if there's an opportunity right in front of you, it's gonna be hard to see it if you have four or five different

43:42 in a record spinning at the same time. Got an eight year old at home that's gonna want you know needs attention too. So I d I just you know, the more you can qu quiet kind of the noise and and not be so divided You'll be able to I think uh Up mean really be opportunistic with whichever the ideas you decide decide to go big on.

44:03 Interesting. So you think that consulting and R and D should be What I Well I I I just I empathize, you know, I I just

44:13 picture the early days of of like, you know It's as much as you wanna do certain things The reality of keeping the lights on, paying the bills often kinda wins the day. If that's where the margin is, you have a consistent revenue stream. Maybe you s you sort of pause the other businesses where there's more risk, more uncertainty, so you can really focus on You know, what Guy said is r you know, this probiotic this real like we're

44:38 Where is wild probiotic going? It could be a version of what you're doing, it could be something different, but It's hard to evaluate that until you really settle, kinda calm the C, so to speak. Yeah. Absolutely. Absolutely. Uh Jean Pierre Looking forward to to to hearing how it goes. Keep us posted. John Pierre Parent, founder of Soma Kombucha.

44:58 Good luck, man. Thanks for calling in. Thanks, guys. Really appreciate it. Uh Bill. Lots of interesting challenges out there.

45:06 I mean, you know. It's like and you were there. I mean you were You were selling smoked fish, right? And you're like, This is interesting, but He's not really moving the needle.

45:18 And then it was like oh but these sawted 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 your decision making. Like I love food. You know, my weekends and my weekdays look very similar.

45:41 But you need to almost be of two minds. One is what do I love? The other is what's gonna be a good business. And it can be really hard to see those clearly. Um at times. Yeah, for sure. Bill, before I let you go, um If you now knowing what you know, you know, you started in the late nineties, right, and um literally had a fishing boat uh off Nantucket.

46:02 Um and here you are, you know, thirty years later. God, does that sound crazy? Thirty years later. Uh If you if you go back in time, knowing what you now know What's something that's you would s you would be able to say the your

46:15 Past self. Well the advice That we talked about today. Like don't try to do everything. You know, I

46:25 I th I took I think a lot of time to get to where we are thirty 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.

46:43 Knowing that there was gonna be a Solution on the other side. Yeah, I think it's so easy to get caught in I need to solve all ten problems equally when the reality is it's probably one or two that is holding the business the the business back. That's awesome. It's founder of Spindrift, Bill Krillman. Bill

47:01 Thanks so much for coming back on the show, man. Thanks. Nice to see you guys. 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

47:17 Where The risk Was, or at least I thought I did. But Ultimately there's

47:23 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 gonna be challenging, so Yeah, it was terrifying. Thanks so much for listening to the show this week. Please make sure to check out my newsletter. You can sign up for it for free at gyras.com.

47:48 Each week it's packed with tons of insights from entrepreneurs and my own observations and experiences, interviewing some of the greatest entrepreneurs ever. And if you're working on a business and you'd like to be on this show, send us a one minute message that tells us about your business, issues, or questions you'd like help with. and hopefully we can help you with them. And make sure to tell us how to reach you. You can send us a voice memo at hibt at id.wondery.com or call us at 1800-433-1298. and leave a message there, and we'll put all this in the podcast description as well.

48:28 This episode was produced by Carrie Thompson with music composed by Romte and Louie. It was edit by Andrea Bruce and our audio engineer was Clacy Lee. Our production staff also includes Chris Massini, Alex Chung, JC Howard, Casey Herman, Sam Paulson, Katherine Cypher, Niva Grant, and Elaine Coates. I'm Guy Roz, and you've been listening to the Advice Line. on how I built this lab.

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