Advice Line with Peter Rahal of RXBAR

0:00 Uh Hello and welcome to the advice line on how I built this lab. Guy Rod. 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.

0:22 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. Send us a one-minute message that tells us about your business and the issues or questions that you'd like help with. You can also send us a voice memo at hibt at id.wondery.com. And make sure to tell us how to reach you. And also don't forget to sign up for my newsletter. It's full of insights and ideas from the world's greatest entrepreneurs. You can sign up for free. at gyros.com. And we'll put all this info in the podcast description. Alright. Let's get to it.

1:03 Joining me this week is Peter Ray Hall. He's the co-founder of the energy bar brand RX Bar and a new protein bar called David. Uh Peter, it's great to have you back on the show. Great to be here, guy. Thanks for having me. Um so of course you were a guest on the show back in twenty eighteen. We did a live taping in Chicago, super fun. Um and if if any of you uh missed that episode, the story of our expar, you've got to go back and check it out. It's a great story and we'll put a link in the episode description. Basically. Peter, you started our X bar back in

1:33 Uh twenty thirteen with your friend Jared Smith and the bars had really simple ingredients, such as dates and and nuts and a and like egg whites. And As the story goes, you sold the brand to Kellogg's. in twenty seventeen for uh over six hundred million dollars. An amazing story. Thank you. Um but before Peter, before we get to some of the collar stuff, I was hoping to ask you Just a couple of questions about about this story. Is that is it okay?

1:56 Yeah, of course. So all right, so in twenty fifteen. And we talked about this a little bit on the episode. you completely like overhauled the packaging. Right, which was a I

2:06 I think it was a game changer. I mean it and a lot of brands kinda ki w have gone on to copy it. And basically you focused on just like four things. It was like four dates. Two eggs. six pecans or whatever it was and no BS. T Tell me about the decision to do that and how that actually transformed the product. Yeah. So

2:27 We had a we had a marketing problem. We were really successful in our niche. Cross the gyms. Those were our early adopters, so they totally understood the product. Uh when we began to expand outside of that market into say conventional grocery or convenience store.

2:44 It it it didn't sell. It didn't work. And You know, it's a lesson in simplicity. So When you design the product like ours, You could claim Gluten free, dairy free, soy free. And so

2:57 Sometimes You kinda think more is the merrier in like You just want to like lay out all your differentiations and communicate it. And actually it's confusing. Right,'cause on the package you could have been like paleo friendly, but that doesn't people who are paleo knew that. They would know that it was paleo friendly.

3:14 Yeah, exactly. And a couple of insights were like In the bar market in general, if you just Study. You'll see they they reach out, grab the product and immediately flip it over.

3:26 Right. That was the real differentiation. It wasn't how much protein we had. It was that we were clean minimal ingredient. Product. And so that's what we led with.

3:36 Right. Um but we fundamentally knew that like We had a communication problem. And We need to really do something more bold to stand out in the competitive market. Yeah, and it was risky, right? It's not like you and your co founder sat there and like, We have all these this data and we know this is gonna work. Like it really was risky. It could have failed. Yeah, I mean people thought we were a different new company. W when you put them out, well.

4:01 It's an amazing story and and really just people who are interested in in branding, marketing, and packaging design. This is like a great case study. Um Peter. Your uh non compete. eventually ended with Callox and uh and then you are became free to re enter the protein bar space, uh and you're doing it. I've tried them. They're called David Protein Bars. You launched it I think last year.

4:25 Um, and these are bar bars high in protein. I think it's twenty eight grams of protein, a bunch of different flavors. Tell me about um w the decision to re enter the market. Why I mean, obviously you've got expertise, but tell me about, you know, starting a brand new Barbara, especially in such a super saturated Category.

4:45 Mm-hmm. Yeah, so I basically saw a pretty big Sort of a

4:52 The the optimal protein bar, which is which is w if you're going to design a a protein bar from pr first principles, you want as much protein as possible with as little everything else. And I guess the problem, or or maybe the opportunity in protein. Is A lot of protein bars are just stacked with sugar. Or carbs. Yeah, exactly. And

5:12 Yeah, like Protein's pretty it's like unequivocal the most important. Macronutrients. Not just for And so you

5:21 You just it's just a delivery system of protein that tastes delicious. One of the things that I mean, obviously this is a different playbook now because you've g been through R X bar and you're better resource now to to start David Bar One of the things uh that's interesting about it it's I think it's only direct to consumer, right? You're not selling in sh in stores mainly. We're just starting to. But yeah, most predominantly we're direct to consumer in Amazon. Yeah. We we wanted to start direct to consumer'cause you can

5:46 Service people directly. Um you don't have to plan your innovation around a retailer. Yeah. Super interesting. Um a lot to talk about and I think uh probably a lot that that will be useful for some of the callers. Why don't we bring in our first caller? Um hello and welcome to the advice line. You are on with me and Peter Ray Hall. Please tell us your name.

6:04 Where you're calling from and a little bit about your business. Hi Guy, hi Peter. My name is Christie Stewart and I'm from Calgary, Alberta, Canada. Yeah. And I'm the founder of Inner Wealth Supplements. We are the first supplement line that's dedicated to both alleviating PMS and perimenopause symptoms.

6:21 And increasing lean muscle mass in women. Well thank you for calling in and welcome to the show. Um So Christie, tell me a l a little bit about are these um pills, are they What's a form of the supplement? Yeah, so they're powdered supplements. Um, you just put it in your water, shake it up, and drink it.

6:36 And tell me a a bit about what what they are. Like what what do they offer? Absolutely. So one is a morning, one is an evening. Yeah. And um the morning one has to do with energy and vitality. So it helps. Provides sustained energy, adrenal support, helps reduce hot flashes and brain fog. Increases libido and helps with bone health. And then the evening formula.

6:58 It's called sleep cycle, so it contains ingredients that help with your sleep. And help um Bring the ratio of estrogen to progesterone. Back in context. To reduce the symptoms that women typically get in PMS and perimenopause.

7:13 Yep. And and so these are basically you're using different formulations of vitamins, minerals, um other sort of right other ingredients. Um that I I'm assuming is a proprietary blend that you came up with? Absolutely. My background is in molecular biology and biochemistry, and so I came up with the formula

7:32 Um I submitted it to Health Canada. Um Canada and the US have very different supplement regulations. It's very, very stringent and and strict in Canada. So submitted it to Health Canada, got the approval for the claims they wanted to make. Found a manufacturer and launched in June twenty twenty three.

7:50 Awesome. How is the business doing so far? Phenomenal. So in our first full year of sales. We hit five hundred thousand dollars in sales and just came off An incredible month in January. And tell me, how are you how are you getting I mean, where are you sell is this all direct to consumer?

8:07 It's all direct to consumers, so I I've got my my Shopify site like everybody else and I post on my Instagram. I don't have very many followers, but we've grown through just organic um social media and word of mouth and I haven't invested into advertising at all yet. Wow. I this is a huge and exciting and growing category. I did a I actually um led a panel at

8:31 uh at CES, a consumer electronic show in Las Vegas for AARP, the American Association of Retired Persons, on this very issue and this very topic and all this cool technology that's being developed around parametopods because it is a massive exploding business opportunity that has basically been ignored. Well, if you think about it, every single woman on the world if she lives to a certain age, is going to go through it and We

8:57 As women. you know, all the research is done in men, everything is done in men, and finally women have just I don't know what what has happened in the Zeitgeist, but it's finally come to fruition through some really great knowledgeable voices on social media. And the reason I got into it was I started I kind of hit that age. I'm 44. When I hit 40, kind of everything went off the rails. And I used to own a bunch of fitness studios. And so I worked with a lot of clients on nutrition and fitness and

9:24 Everybody started saying the same thing that was You know, I'm eating how I've always eaten, I'm doing all the workouts I've always done, and I'm starting to gain weight. And realizing that had to do with our hormones, so I dug into the research, I became a certified menopause support practitioner and just Realize that

9:41 by taking in certain vitamins, minerals, micronutrients can have a positive impact on the way Your body. Metabolizes, detoxifies, and excretes your hormones. And if you optimize those functions, all your symptoms go away.

9:55 And and increasingly we're hearing that um experts a around paramenopause, menopause are saying women need to increase their protein intake. So Peter, we'll get to you on that in a sec. Um before we bring Peter in Christie, tell tell us what what your question is for us. Absolutely. So I've I think I've reached my ceiling of organic growth. And I'm ready to scale and

10:17 For this time period I believe that um Online advertising is the best route for me to scale. But If I'm going to scale online, you know What are the benchmarks? What's an appropriate spend? What is an expectation for ROI? What do you ask agencies? Like just all kind of the general

10:34 You know, I know Peter you're advertising online now with your new company, so What is your blueprint? Yeah, I'll I'll um Answer your question very directly. How I recommend you think about it.

10:45 So one You want to prioritize like high intent. channels. So Mata. Google

10:52 and Amazon. Um those have been the most effective. Um you can scale in them. And then I would start with those like a very low budget, maybe like

11:02 Two hundred dollars a day, two hundred fifty dollars a day. And As you're You're you like get some data and figure it out. You can scale, but start super small. Um

11:12 You want to keep your Acquisition cost below a gross margin per order. So you want to be first order profitable. So make sure your unit economics work. That that's what I I would recommend. Um but I in and in general with anything I would

11:26 Just stay really close to it. And so you learn. Chrissy, are you in the US market yet or just in Canada? I have literally a handful of clients in the US. Um, I just figured out how to do really cost effective shipping to the US. So

11:40 I'd love, yeah, I'm I'm very ready to enter the market there. It's a I mean it's a growing right, there's a lot of um you know. smart entrepreneurs getting into this space. Absolutely. I mean I think one of the one of the the advantages you have is the the um the Canadian um rules are more more stringent. And you know that means something, especially to the kind of consumer that would be interested in this product.

12:05 Well it's interesting that you say that, guy, because absolutely. So before we can sell In Canada, we have to get rigorous third party testing. Um, even the claims that we have to say have to be approved by Health Canada and we have to show science to show that. So I think people can have a a really good confidence that when you're buying a supplement from Canada that If it's making a claim that it's going to do something, it actually will. Otherwise we're not able to sell in Canada. Yeah, Peter, you I mean

12:31 You really leaned into a tribe with R X Bar, CrossFitters, but now there's a new kind of tribe, a much bigger tribe, the protein tribe. And it's a growing tribe of people, right? Um and and again, I mean, especially you're talking about talking about women, you know, in their mid forties and over. uh both women and men, but but particularly talking about women now

12:50 We know that there's increasing evidence that they need to be consuming a lot more protein. T h how would you sort of suggest, Chrissy How should she be thinking about getting us out there. I would say one You need to get to the US market at some point. It's just so massive. Um

13:08 And then I think if your product's really good. I I would just get it into the hands of the right people. And I would start small. So Whether that's like mom

13:19 bloggers, like w like fine niche groups. And get your brand and yourself in front of them and get into these communities and If you have a good product, people will repeat and then

13:33 No. it they not only will repeat, they will share about it. So you want like viral word of mouth. That's the best use of of time and resources. Um

13:43 And then I think like on your product, like So I I look at you know um A G one. Mm. So

13:52 What they did was like an all in one. So if you have an opportunity to do like an all in one with protein Yeah. And some of these other benefits. I think that would be a great way because I think with your consumer they're like facing a problem.

14:06 You have the solution. And if you can make it really, really simple, that's like a very valuable thing. 'Cause if I'm have to take a protein shake and then I have to take your supplement or other things, it's a lot of work. So streamlining into one thing can be a r a real um value unlock that could be value. Yeah. So

14:23 When you said get it into the mommy bloggers, the influential Women. Would you recommend that we seed people first? Get that buzz going and then do the advertising because

14:35 I just you you hear stories that people are pumping money into ads with not a great return because I don't have any brand awareness. So it's like a chicken or the egg, right? Do you do the br get the brand awareness first through the ads or the Influencers. Yeah, it's a good question. Like

14:52 My bias is use the product And do it more in an organic way. And then 'Cause like one, you're starting a relationship off in a very generous way. Um, you're introducing yourself, they want to see, you know, you have it you have some influence, you know what you're doing, you've credibility. And that's what we did at R X and that's at David we're doing it as well. Like we're sam we sample like crazy. It's like trial's so important.

15:15 Um so I that's where I would go versus Going straight to advertising yet? And that's the one question I had. You said We've reached our ceiling and I want to go advertising and like my first thought was like are you actually how do you know you're a

15:29 Your ceiling. Like If you're extra ceiling, what would ads do to change that ceiling? That's I guess I meant I'm at my ceiling for I think m my organic reach on social media. But then As I just said.

15:43 We had an incredible month in January. Like thirty percent higher than we've ever had. And so that almost defeats that I'm at my ceiling, right? So Yeah. Yeah. Yeah, and I I would follow that cohort, like

15:58 'Cause if you have product market fit, you know that They should be sharing it. You should see organic growth come from that. Um But but at a high level like I think like Products over ads.

16:09 Yeah. That makes sense. The brand is called inner wealth. Thanks so much. Good luck. Thank you guys very much. Thanks for having me and and uh thanks Peter, thanks guy guy. I love

16:19 I love, I love, I love how I built this. I've listened to every single episode. I've learned so much. And thank you for everything you do for entrepreneurs. Thanks so much. Thank you both. Bye. Thank you.

16:30 Yeah, this is such an exciting category. When when I um did this panel at at the Consumer Electronics Show, I mean they were like All these entrepreneurs working on technology and products for women going through paramenopause and and it's such a Fascinating. area because there's so much opportunity.

16:48 Yeah. It doesn't seem like the market's being addressed. It's not, no, not at all. I mean it's just really starting to explode. It's like where energy bars were in like two thousand eight. Yeah, she's in a good place. Yeah. Alright, we're gonna take a quick break, but we'll be right back with another collar and another round of advice. Stay with us, I'm Guy Roz, and you're listening to the advice line right here on how I built this lab.

17:25 Welcome back to the advice line on how I built this lab. I'm Guy Raz, and my guest today is RX Bar co-founder and David Bar founder, Peter Rayhal. Peter. Uh let's bring in our next caller. Welcome to the advice line. You're on with me and Peter Ray Hall. Hello, welcome. Tell us your name, where you're calling from, and a little bit about your Product. Hey guy and Peter, my name's Eric Rukiski calling in from Los Angeles. California. I'm the founder of Squat Wedges. We build exercise products that enhance your lower body workout.

17:56 With our squat wedges and slant boards being our best sellers. Nice. Welcome to the show, Eric. So the s the wedge is a wedge that you put under your feet for I'm assuming for squats, right? Yeah, so the most common thing you'll use with a squat wedge or a slant board is to elevate the heel or elevate the whole foot to improve your squatting mechanics, make it easier to squat deeper, opens up those hips and the ankles. But you can also use it to train your calf muscles from a Toes elevated position so your toes go up the ramp instead. Uh, there's a lot more uses than just the squats, and that's what we're trying to show people that. They're not just for squatting because our biggest competition is weight plates right now,'cause people just elevate the on weight plates, I gotcha. Yeah. On a weight plat. Yeah. So we're trying to show people that one, it's way more efficient to use a wedge or a slant board. Uh, and you can also do way more other exercises than just squats on them. How did you how did you cut tell me about the the story because this is a you know, there are competitors here and we're gonna get into that in a sec, but how did you come up with this business idea?

18:54 So I've been training for thirteen years now. I've became a personal trainer at nineteen years old. Got my degree in exercise science from East Carolina University. did the strength and conditioning coach thing. Uh so I've been well versed in fitness. And if you've been in fitness for a while, you've known that there are squat wedges in the market. Yeah. no one was ever really making them affordable. Uh a lot of the products were too expensive, too heavy to move around. So in twenty twenty one we launched a Kickstarter.

19:25 to create the first ever uh wedgie And you know, I figure it was a good time to jump into the market. And Not just build a product, but build a brand around it and hopefully motivate people to exercise in general. Awesome. All right. How and how did you finance this?

19:40 Oh, you had the Kickstarter, I should say, right, you mentioned. So the Kickstarter, um, we raised about twelve thousand, twelve, fourteen thousand on the Kickstarter, but I've just been self financing it myself, using a little bit of debt for growth, not the best strategy. But um so just using your m uh your money as a personal trainer. To help finance it. Yeah, I'm still working. I still train. So I was able to make good amount of money then save up from there. And I pretty much just put all that into the business to keep our advertising efforts up and Finance all those purchase orders and stuff.

20:13 All right, so you've been so you've got this pr product and tell me a little bit about how the business is doing right now. We've been growing uh A ton over the last three years. So it's been great to see that. Nice. Um so last year we just had our Best year to date. We did seven hundred thousand in revenue. Uh, years before that we did around three hundred

20:33 Forty five. And then the year before that we did about thirty seven thousand. What's your margin on seven hundred thousand? So blended it ends up probably being around Like probably thirty three percent. Um that's my part of my question is today is the

20:48 You know, a four hundred thousand that was from Amazon, where our margins around like twenty one percent, tw eighteen to twenty two percent, and then the rest of that was on Shopify, which is after um advertising efforts, that goes down to around like thirty five to forty five percent. Just, you know. Based on r returns and website costs and affiliates and all that stuff. All right, so not not bad, pretty good actually. Tell me what your um before we bring Peter in, what's your question for us? So my question here is we've grown substantially through Amazon um But I don't love Amazon because I feel like it's limiting me in a way when it comes to talking to my customer and being able to potentially upsell them to our other good products and get them on my YouTube channel to see our free workout programs. But I love Amazon for the ability to drive a ton of revenue, drive growth for the company, and obviously cheaper advertising costs compared to

21:38 Instagram and Facebook. So my question is At a certain point as as a c growing company, can you step away from Amazon and just focus on your own website so you don't have to compete with others on Amazon with their lower cost options. Awesome. Okay, well, let me bring Peter Ray Hall in. Peter.

21:57 Something right up your alley. I know you like to go to the gym. So he's got um You know, he's got Amazon, he's got Shopify. Yep. He's trying to figure out Right, Amazon obviously great channel'cause it's Amazon. But the margins are lower.

22:11 What are your thoughts, Peter? Yeah. This is a common issue. We have it a David of How do these channels coexist? How do we optimize them? And Amazon's like a force of nature you can't avoid.

22:25 So It's not a I it should never be a question, are we on Amazon or not, I think. Um it should be how do we optimize it. And I think you're right. A direct website. with relationship with your customers and offer different things. So so one way to think about it is all right.

22:40 Amazon is like for volume. Like right, it's like your your hero skew is there, it's gotta be priced right. But like How do you differentiate and how do you create value on your own website to bring So

22:52 That could be through bundling. It could be through promotion, it could be through Education Um But I would look at it as like a product strategy across the different channels. But I I just don't

23:04 Amazon's you everything it's there's It's such a powerful, powerful e-commerce platform. You want to lean into it and and um you don't want to run away from it. Yeah, I guess my question for you, Eric, is why why is it one or the other? I mean Amazon, yeah, I I get it, you know, you're they're squeezing you and you know, listen, it's a it's a business, but it's also a great channel. On the other hand, I mean I'm looking at your website here, you've got YouTube channel, you've got all these free exercise routines that you're offering, um you know you've got other products here that you're selling.

23:32 So I I I guess my question is can't can't you do both? Yeah, we and that we've been doing both for the last three years. It it's part of it's come down to being able to keep up with the inventory like You know, on on Prime Day we kinda just ran out of inventory and one of the things has just been like trying to keep up inventory from a financing perspective because I'm paying for everything up front before it le we do build in China, uh before it leaves China. And as of right now we can

24:00 only order around like a thousand or two thousand units at a time. And the lead time on that is about Three. And the issue with Amazon is If you don't have enough inventory, you get charge fees. If you have too much inventory, you get charge fees.

24:17 Um and then the return issue as well. And I just I don't as of right now, I don't have enough I think inventory to potentially do both. Got it. Yeah, if if you have inventory constraints then then You'd want to keep it on the more profitable channel.

24:35 And Yeah, and just you have to accept that. people are gonna be searching for your product on Amazon and just gonna buy you're gonna you're not gonna capture those sales. But it sounds like it's more of a cash flow. working capital issue. I would I would focus on the

24:49 Profitable channel. And building your platform. I would spend more of my resources and energy in building Eric as an influential person in fitness and H

24:59 Yeah. Then you can create all the demand. Um, Eric, this is a little bit I mean uh uh going back to this idea of What you are giving your customers or your fans, or potential customers for free. And I know that you're doing these videos.

25:15 I I I wanna see more of that. Um coming from it because I think that's w when when when people see you as somebody who's a trusted voice, they're gonna want to support your products. I I'm tell I'm I just say this as a as a uh uh a focus group one here, but I have I do spend money on some of these these influencers who I feel are giving me really great free advice. And I have gone and purchased their courses or their products and they've been really helpful.

25:43 I I agree with Guy. Okay, I I really appreciate that. And also, uh Peter, I just want to say uh listen to the uh episode again. And uh hearing about the dyslexia stuff and some of the speech issues myself, I went to speech therapy for about six to seven years as a kid.

25:59 So it's pretty cool to see, you know, someone struggle with that as a kid to be so successful as you are now. So I I appreciate the inspiration and uh talking about that. Thank you, of course. Awesome. Eric, thanks so much for calling in. Squat wedges. Is the brand uh good luck, man.

26:14 Great to meet you, Eric. Yeah. Squats are so healthy. It's such a great Yeah, especially the full the full range of motion ones. Um Yeah. I love the squat.

26:26 Yeah. And super important. Peter, you will start to discover this as you get closer to fifty. That mobility is so key, man. It is like it opens everything up. If you're stuck, if you're Tight. I know. I spent the last like year and a half just focusing on stretching in addition to the other exercises, and it just completely It just opens all these doors. It's the best. Not there yet. You still have some grease in your joints and stuff. Okay. We're gonna take another quick break, but we'll be right back with another collar. Stay with us, I'm Guy Roz, and you're listening to the advice line right here on how I built this lab.

27:19 Welcome back to the advice line on how I built this lab. I'm Guy Raz, and today I'm taking your calls with Peter Ray Hall, the co-founder of RX Bar and founder of David Bars. Peter, let's get back into it and bring in another caller. Please tell us your name, where you're calling from, and a little bit about your business. Hello, I'm April Wactel. And I am calling in from Brooklyn, New York. And I'm the founder of Cheeky Cocktails. It's a line of badass cocktail mixers for the home and bar that make labor intensive cocktails a breeze. Welcome, good welcome to the show. Thanks for calling in. Okay, so cheeky

27:53 These are mixers basically, like you add this to Spirits and then you've got your drink. Exactly. These are professional grade, so they're shelf stable versions of what the pros use behind bars. And they're non alcoholic. So they can be mixed with spirits, non elk spirits, seltzer tea, water. Et cetera. And I'm on your website now. Love the branding. Yeah. And so I see espresso syrup, so presumably for like an espresso martini and Exactly. Um you've got some uh agave syrup, simple syrup, cranberry.

28:25 uh lemon juice. So basically I mean, are you covering the whole gamut of mo of sort of like fifty to seventy percent of what people order at a bar? Yeah. So that's part of the problem. It's part of the opportunity and it's part of the problem. Um and part of the question that I have for you, actually. Okay, we'll get your question in a second. Tell me a little bit about um How this started. How did you start this brand? Yeah. So um so my background, I basically grew up in bars and restaurants and then I worked my way up over many years, came up through bartending, craft cocktail, and then I became a brand ambassador for Bacardi consultant for Diageo and a cocktail instructor. So I've taught over twelve thousand students how to make cocktails. Um so so you you could come to this with like deep experience. Yes. And you decided when did you decide to start a business? Yeah. So I started tinkering with the first version in twenty fourteen.

29:16 ran a business for about four years, which I would consider to be a worse version of what we do now. Okay. So pulled that apart in twenty nineteen, put it back together in twenty twenty, and then launched into March of twenty twenty, into the first wave of Covid. Got it. And now you sell cheeky cocktails entirely direct to consumer? Online. Uh no, it's about twenty five percent direct to consumer. We're in uh thirteen hundred accounts, primarily brick and mortar, um, across the country, but we're in four and five star hotels as well. Nice. And are you mainly in smaller stores or any larger chains? Yeah.

29:47 Um, about half are small independent boutiques, independent liquor specialty grocers, and then we're in um Anthropology Nordstrom Home Goods um on the chain side. Got it. All right. So tell us what your question is for us. Yeah. So there's a lot of ways that Cheeky is distinct from the competitors, but I struggle to encapsulate all of those ways. Because we are speaking to trade, we're speaking to consumers and different people use us for different things. And I don't know if I just need to nail my messaging.

30:19 Better? Or if this is something that adds complexity and will prevent us from scaling. As we try to hit the gas. Badass cocktail mixers for the home and bar. Badass cocktail mixers for the home and bar. Yeah. I mean, it doesn't tell me anything. Right. So what is it that differentiates it from competitors? I mean there are other brands out there that are mixer brands. So how do you when you say we it just takes so long to explain it, what is it that's different?

30:46 So there's many things. For the professional bartender. There are very specific ratios and recipes that are used when they make ingredients from scratch behind the bar. And commercial options that are shelf stable on you know, sold in retail, don't ever say that.

31:01 We make our syrups to those specs so the professionals know what is in them and how sweet they are. And then the consumer. is able to replicate thales with certainty because we make the exact same products as the scratch ingredients. Got it. All right. Peter, I wanna bring you in here. Messaging is a challenge. I don't know if that's the main challenge here, but w what do you think? I mean, uh again

31:24 Badass cocktail mixers doesn't tell me anything. It's fun, but it doesn't tell me anything. So like your positioning and communication is a Reaction to the competitive landscape. Um it can never be done in isolation. Yeah, like I think

31:39 Badass cocktails is like a fun thing. But It's not a very telegraphic It doesn't like really communicate. And I one one of my um

31:50 It's a bit crude, but I think it's a very good Approach to Packaging design is like The consumers are are stupid and lazy. Uh stupid in the sense that they don't really care.

32:01 That much. The brand is supposed to make it easy for them. And then lazy in the sense they're not gonna like look at your package and like read the third point and then flip it over and read the story. So so

32:13 Question for you, if you're to boil down the value in a one statement, what is it? So this is part of where I'm getting hung up. So the packaging itself is really attractive, it's minimalist and it's premium. Nice. And so thank you. It looks like New York Art deco ish, really cool. Thank you. Yeah so so that I think for the consumer That is the first thing that catches their attention. It's relative to a very crowded, cluttered marketplace and competitive set, it pops out because there's a lot of white space. Like it's more relaxing to look at our packaging on shelf or if it's in your home bar or in a professional bar. So that's the the first thing. The second thing is

32:51 the ingredients quality is incredibly high. And we don't use preservatives, we don't use natural or artificial flavorings. So it's really Shelf stable versions of The ingredients the pros use. Where do you have the most success, like on premise or at home? So our our focus this year is the on premise. Um so food service.

33:09 For sure, yeah. Yeah. And is that is that because you're providing You're making the bartender's job so much easier. Is that the value? Um, I think it's a couple of things, one of which is if it's in a cocktail y yes, but it's if it's in a cocktail on a cocktail menu.

33:24 And it eliminates multiple steps, it improves consistency. You know. All of that fun stuff. Um Yeah, then it's of course e easy for them to use. Yeah, I I always say like

33:35 Strategy is choosing what not to do. Yeah. So one of the I It sounds like Your product's kind of working everywhere a little bit. Yeah. But it's probably one of those things where like if you really were to just focus on where it's

33:48 the highest demand is where people are like Oh my God, finally a product like this. Like where they're not price sensitive, where they forgive you if there's like a quality issue'cause it just there's Like the early adopters are there. No, you you've identified the issue, which is I have been conflicted because it is working everywhere. And so choosing up until this year has been difficult. You know, I'm looking at I keep thinking about this this you know, badass cocktail mixers and and and

34:11 I mean, I'm looking at your coffee um mixer for the Espresso Martinis and I notice in the back, I'm looking at the label here on your site, you're using a a very specific kind of premium coffee. You know, you're using really high quality ingredients. I mean you even name the coffee. Um, it it reminds me a lot of the story we did on Loka La Calom uh a few years ago, and when they launched back in the day, you know, w they they were making a very, very premium coffee and they started Bye. working with really the best restaurants in Philadelphia and New York, because when people tried it, it was just it was different. It tasted better. But I feel like

34:48 There's a way for you to convey that. You know, people use words like artisanal, which is overused, or um, you know, premium, but there's something around that idea that I think can really pop because The fact that you have sourced the coffee that you're using in your syrup mix Is really interesting to me. And I think that would be interesting to a certain set of p of c cocktail enthusiasts. Mm-hmm. Yeah, so there's two to two things. The trade gets it immediately. Like we we do zero explanation with the trade and immediately they're like, Oh my God, I cannot like this amazing. With with consumers, we used to call it bar quality syrups and juices, then we said professional grade syrups and juices.

35:33 So that was why we adapted it because the consumer reaction was like uh like another premium product. Right. And when we started saying badass, everyone just laughs. And that is more in the spirit of what of the reaction we want to get from people because it opens people up and then it's more of a fun conversation. Um versus just kind of groaning and saying, Oh yes, uh yet another of these. Cheeky is like English humor, right? Yes.

35:59 So you but so then but badass is like American. Yeah. So I find those two things are at odds. Like Yeah. Good brands have great tension, but I don't think those tensions really work. They're more confusing. Mm-hmm.

36:13 Re it's a really, really interesting insight. I I think that um You know, I mean, again, I it's not the answer, but something like, you know a mixers for for cocktail nerds, you know, uh some way to kinda convey that it's like You cannot get anything better than this. You know, like if you are

36:33 If you're into like watches or you're into Pens, right? There are people who are and there are a lot of people like that. They want the absolute best. And the good news is a lot of people who are really into making the absolute best cocktails. Mm-hmm. Yeah, I mean it's a it's a lot of food for thought. I think um because there's a lot of um sort of exclusionary

36:55 behavior associated with the highest quality craft cocktails. I'm trying to share a Like a more approachable version. And so that's the thing that we've been batting around for

37:07 a number of years at this point is like how can you be super approachable and fun and light and also Be very serious about what you do. The p one of the other puzzles. That's making this difficult is that You're talking to

37:22 The bar like on premise. It's a very different communication. than to the consumer. And you're trying to do both. Right. And so like one strategy would be like we're just gonna dominate on premise, they get it. We can just align our communication to prioritize them. And then guess what?

37:38 When you if you do that really, really well. the word of mouth, they'll see it on premise, like oh my God, the cocktail was great, what was it? It's cheeky. So I I kinda think you're just diluting yourself across those two different channels. And You know, it sounds like your DNA is on premise. You know it.

37:54 Yeah. It's like Cholula is a good example. Like Chulula just popped up in every cafe. Yeah. And then next thing you know, you start to see'em in grocery stores. Next thing you know, and it so There has been a history of that sort of strategy, um

38:10 So I I think this is a strategic question. And then your positioning and messaging should align with that strategy. And then As you scale, it's a growth area. Mm-hmm.

38:20 I think this is so interesting how like that was not my question, but you got to the actual question behind the question. April, um good luck. The brand is called Cheeky Cocktails, um, awesome. Um Congrats on on what you built and and we'll be we'll cheering you on. Thank you, and thank you so much to both of you. This is um such an honor and I'm such a huge fan of the show. So thanks so much.

38:42 Cheers. Thank you. See you. Yeah, I mean a product like this is particularly is positioned well because obviously still lots of people drink alcohol, but a lot of people are moving away from it. As you know, Peter, right, in your space, I mean a lot of people are just not drinking anymore. But they still wanna have something. They wanna have a c uh some kind of Cocktail like drink.

39:03 Well and and the thing is you're seeing On premise people prioritize non alcohol. Menus because It's a huge Revenue grab basically,'cause they could like s sell like you know, without the alcohol and charge twenty dollars, fifty dollars. Yeah, mocktails are super expensive. Or a lot of fancy restaurants are doing uh non alcoholic pairings where they're making these concoctions and they're just as it's still a hundred and twenty bucks in some of these super high end restaurants to get a

39:26 non alcoholic pairing. Um Peter, before I let you go, I want to ask you uh one question that I've I've been asking people to come on the show, which is, you know Now that you've got a a new brand that you're building and you've got a chance to kind of do things in a different way, right? And not make the same mistakes you you made in the first go around. Um but if you if you could go back to where you were or in the early days of R X bar now and say hey

39:49 This is the piece of advice I'm gonna give you. What do you think would have been helpful? For you to hear. Yeah. Um I was full of pride.

39:58 Uh when I first started. Meaning I was sensitive to criticisms, I was defensive, I was very proud of my baby. This product is my life. You know, like oh they don't you know my product's not the problem, you're the problem.

40:10 And so I would tell myself like removing yourself of pride is super important. And instead of like being defensive on criticism, you should actually seek criticism. Like It's about

40:22 finding what's wrong and fixing it. And so You just being super objective, pragmatic, and not emotional about your product and its position and is really, really prudent to be successful. It's great advice. That's R X Bar co-founder and David Bar founder, Peter Rayhall. Um Peter, thanks so much for coming on the show. Thank you, guy. That was amazing.

40:44 And by the way, if you haven't heard Peter's original How I Built This Episode, you've gotta go back and check it out. We'll put a link to it in the podcast description. And here's one of my favorite moments from that interview. You get this idea. You you have a plan. Did you think Yeah, let's go raise money.

41:01 So that was actually our initial plan. And I remember Jared and I like talking about like all right who we gonna raise money from, like I'm asking my dad like do you know any, you know, rich people that can like Yeah. You can connect me with who give you give us some money and

41:15 And my dad was like, he's old school, it's like super traditional. And he's like, You need to shut the f up. And sell a thousand bars. 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. 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, the 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.

41:58 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. This episode was produced by Chris Massini with music composed by Ramteen Areblui. It was edited by John Isabella and our audio engineer was Cena Lafredo. Our production team also includes Alex Chung, Casey Herman, Imon Maani, Elaine Coates, JC Howard, Catherine Cypher, Carrie Thompson, Sam Paulson, and Neva Grant.

42:32 I'm Guy Raz, and you've been listening to the advice line. right here on how I built this lab.

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