Exiting to Vita Coco, the Functional Future | BJ McCaslin, Highlandia

Speaker 1: 00:00
Welcome to Shelf Help. Today we're speaking with BJ McCasslin, co-founder of Holy Water, functional beverage brand that integrates ketones, functional mushrooms, nootropics, adapt engines, and in some SKUs, THD as well. BJ is a serial entrepreneur, longtime beverage operator prior to Holy Water, started Cocoa Cafe, which he sold pretty quickly to Vita Cocoa, which is one of the leading coconut water brands, among other ventures, which we'll probably dive into at some point. So a lot of great experience. Really excited to get into it. Um yeah, first off, BJ, just for the listeners that aren't that familiar with Holy Water, love to kind of get just a quick lay of the land in terms of kind of origin story, why behind the brand, core products in the lineup, and maybe just a few places if people get their hands on them, and then we'll go from there.

Speaker: 00:47
Lee, I appreciate you having me today. It was great to get your background a few minutes ago, and we were just talking about welcome to your first winter.

Speaker 1: 00:54
Yep.

Speaker: 00:55
LCOs. Yeah, so holy water is uh a concept that I I worked on um with uh a PhD biochemist partner of mine, Jeremy, and we got into we had a project before this where they raised um, you know, 18 to go attack an FDA clinical uh regiment for psilocybin, micro-dosing it for traumatic brain injury as well as PTSD. And it was with some athlete friends of ours, and I was exiting my canned wine projects. When I exited Vita Coco, I had a runway with them, and I I moved to India and I brought back an esoteric spirit. That that project ran its course from essentially 17 to 23 for me. And when we were getting out of the psilocybin piece, my thought process for the canned wine company, which I was just a consultant on at the time, it was a joint venture, but they didn't want me around too long. So I said, this is where we need to go, right? We lived in the the space that was a four-foot canned wine set, but it it it bookended to the the non-alcoholic set and and the mixers traditionally, but now the non-alk set. And I saw that evolution. So when you look at my background, you know, just really quickly, I played sports as a youth. As I told you, my nephew's the top quarterback recruit in NorCal right now, Drew Cumby, uh, 16 years old, St. Francis. And for me, it was like I've always identified trends and innovated and brought them to market in a very bootstrapped fashion. And one of my my idols is Jeff Rubinstein, right? The old CMO at Vita Coco and and um Poppy, the president, and now at Cloud, where my wife lives off of Cloud popcorn. I said make yourself look bigger than you are. And so that is is something I'm really good at, right? It's so I'm I'm I'm happy to have taken that advice and I think about it every day. And I told the team over at Coastal Spritz, now say less spritz, and we were doing a lot of alternative venue activation, right? NASCAR, Wrigley Field concerts with Live Nation and Legends LLC. I said, we gotta make something that complements. You know, I was in the boneyard at Forecastle, we were sponsoring it in Louisville, and we're crushing our canned wine cells. It's really, really cool. And um, I'm making a joke, like I'm 40 selling wine coolers, right? But at least I was seeing Rufus DuSoul that day, and I'm just thinking in my mind, what can complement liquid death? Right. And that's why we came up with this name Holy Water, which in turn is a terrible name. And I'm changing it because nobody likes it. You know, the retailers don't like it. And I feel like I've said this before. I feel like I've talked that that rhetoric before I'm actually saying it out loud. This is the first time I'm saying it out loud where you're gonna be able to disseminate that information. Um, yeah, it's just not well received. And the concept was to be a positive affirmation to liquid death because we compliment each other. And I was really, I was sitting, you know, in the boneyard seeing liquid death, and then I went to a really good friend's bachelor party, or no, his birthday, his bachelor party, but he's 50. And it was a Grateful Dead show. And it was like my 12th tall boy of the day, and we had taken some microdoses or doses of psilocybin. And I'm just like, listen, like I don't need any more of anything right now. My mind's telling me I don't need more of anything, but like, what do I want? And I wanted like I still wanted things. I'm I'm very like, if you look at me right now, like I got this, I've got this, I've got, I just took an energy gumming, I just took this, right? I'm at a client's office right now, I'll tell you more about them later. But I wanted, I wanted something like this, and this is my favorite thing ever. So we're we're gonna evolve the label, we're gonna evolve the concept of it. Um, but it's still it's still based in the same realm. It it's a it's a non-alcoholic opportunity that you can drink on premise. And then it's a it's a mood-boosting energy drink from ketones and not caffeine, right? And and what is a ketone? A ketone's a molecule. It is the best molecule in the world, and it's a gut microbiome that allows your body to start burning fat instead of glucose for energy. But not only that, you know, I just left this week with the the guy who holds a holds the IP on beta-hydroxybutyrate, Rob Rogers. He's an amazing entrepreneur, an amazing individual. Just I look up to him so much and blessed to have the opportunity to work with him. We use R13 butane dial. I'm going all to BHB. Um, there's just so much positive white paper on BHB, and and the whole concept there is it's cognitive, it's metabolic, and it is something that's going to help you be less tired, right? And so that's our concept. It's like, what does everybody what's what what's the solution that we're looking for? And what's the problem? And it's like it's energy is the solution, but what's the problem is we're all tired, and that's what this does. And so when you look at layering the mushrooms, it's great for the neuroplasticity, the nootropics, right? Relaxation, anti-stress. And then we have amino acids. Like I made this formula. I'm actually drinking the old formula here. It's it's got bee pollen in it, milk thistle, um, really cool stuff. And then I I really I really cation of it. And I wanted to come out with this being one for a function of this, one for a function of that, one for a function of this. But then I went and met with the sprouts buyer, um, Brady, and he's a dope dude. And he's like, that's confusing. He's like, and I've seen that on the shelf. And he's like, that doesn't work too well. And so I was like, all right, I'm gonna listen to you, Brady. You know, you know what you're talking about. So ended up just simplifying the formula, making it, you know, uh natural. It was always natural. But then even like as I started, right, it was sorbate, and then sorbate, you can't use it. So I wasn't used to that. So I took it out, I pasteurized it anyway. I didn't need that, but then I reformulated this sweetener flavor, right? And then I put urethrol in it, and you can't use urethrol anymore. So it's like now I moved it to date syrup and monk fruit because people ate stevia. So it's always just this really conceptual evolution, and so that's what I wanted to do. And that's what I said when I'm looking at the shelf. This is what I want to do with the canned wine. Those guys told me to kick rocks. So I started this with the guys from the Psilloside Project, and it's been difficult, man. It's been extremely difficult because of the name, because of you know the time frame. We've raised a million two, definitely not enough. Um we're 14 months old, and and the execution has really been a blessing to do a lot of B2B through online sales, but through retail, it's been extremely difficult. And I think that is because of the name, because of the newness of the concept of ketones, the THC thing, people think because we use a functional mushroom that it's it's THC infused, and then I sell THC, right? But we're actually removing that concept as well. So just steadily evolving left and right.

Speaker 1: 07:05
Yep, got it. I mean, you just kind of touched on it a little bit. I was gonna ask about the commercialization process. And was it hard to find a Coman manufacturing partner that would go through RD with all these kind of unique ingredients? And I'm just kind of curious what that commercialization process was to actually get the first cans off the line.

Speaker: 07:22
It took me a year. It really did. So we started this project and we started with an Amanita Muscaria mushroom. And then I told the team really quickly that I don't think that was a super viable ingredient and commercialization. So we we moved on quickly from that, and I started making this with another friend. I brought on Matt Hughes, the old vice president of New Revenue from Coca-Cola, my biochemist. And I do all the formulation, I really dig it. I I love it. I learned how to do it uh making the Bite of Cocoa Cafe in in 09, and and I really take a lot of pride. And yeah, it took me a year. So I started it in in like October of 22 working on it, and I launched it in July of 24. So it took me a significant amount of time because the ketone, the molecule tastes like shit, right? It tastes like aluminum and like gas. The functional mushrooms taste like dirt, you know, and then the nootropics taste like metal. So, and people want low sugar, and I love juice, right? I love added sugar from juice. So I was able to have that blessing. So I always take my formulation. I work with a really dope lab in Louisville called Clarendon. They're amazing. Um, Brad and Courtney and Richard, they're just amazing, amazing people. They did my liquor for me, they did another thing for me, they did another thing for me, and so formulated it. And then I went and knocked on my neighbor's door next door, a pilot project. And Dan Abel is my neighbor, he's a cool guy. I think he beat me in fantasy football, which is annoying. I never play it, and now I'm getting crushed. It's my second time. And I just was texting Dan. Dan's an amazing guy at Pilot Project, and you should look at that. You should get him on this. You would love that dude.

Speaker 1: 08:54
Oh, yeah, for sure.

Speaker: 08:56
Yeah, and so he made it and you know, did a great job. And like we came out with a 16-ounce can because we wanted to sell it on premise, and we sold like four pallets to the Coliseum and it was cool. And then it's like, oh, we don't need a 16-ounce can. So just all that evolution. Um, but yeah, the the formulation process was super gnarly. Now I'm I'm really comfortable using these flavors, but like I said, the urethrol pulled it out. And I just spoke at Supply Side West, so I found some really dope date syrup that I never really thought of, and it's low on the glycemic chart, and it's super, super dense too. So I'm really high on the date syrup right now, and and that's kind of where we're at. I'd love to use sucralose, but I can't, you know. So it's it's kind of where I live. And I love where we're at, but we're still like a couple years behind of people understanding what a ketone is. You see kin, parts, de soy, recess, higho, those are my complimenting brands. Like those are my family, right? And then I have my competitive set, which is ketone IQ, but I love that guy. I love Michael Brandt, kinetics and another amazing brand. And so those are like the people I compete with per se, but I really love because there's only three or four people in the world using the ketone molecule.

Speaker 1: 09:55
Yeah, totally. Yeah, I love the ketone I guess, ketone IQ guys too. They're all great people.

Speaker: 10:00
He's super cool, yeah. He's so cool.

Speaker 1: 10:02
Yeah, super cool. Uh, from a brand identity and a brand design standpoint, based on just kind of what I've read doing the research doing research, it seems like you kind of approach brand building from kind of an anthropological standpoint. I mean, you like really like to immerse yourself, hit the streets, go door to door, really try to catch a vibe to a certain extent from your point of view. How important is it to really dig into the culture? And what do you miss by just doing a bunch of research and market analysis online and saying, okay, cool, this seems like a good hole in the market. Let's try something.

Speaker: 10:32
Yeah, like I hate AI. I like it to correct my emails, right? Because I don't spell well and I played football in college and my grammar's poor. But like it with I like I've been looking for a new name. I don't even have one yet. So I'm working with Paula from Suite 9C, and and it's like I I put it in AI and it gives me the most generic bullshit I've ever seen. And so when you think about like what I did here with the mushroom cloud, I actually this idea is from another investor we have, Ryan Perry. He just did the Wild AF brand um with Charlie Sheen. He's from a place called Silent Studio. My wife's a CMO and traditionally from the real estate side, COMO Sotheby, CMO of Berkshire Hatway has their own company now. Um, and CEO, CMO of another company who crosses it in Chicago. And for me, it's like that's what I love. And I'm a street guy, right? So I'm always in the streets. Like this last summer I took on this aspect of me that's new is a consulting aspect. Like I'm a president of this really cool company making the brand right now called Herb and Highlandia. And I'm a street guy, right? I'm a distributor-minded retail. Really, when I land somewhere, like my friends are secondary to my accounts because they're really the people that are the lifeline of me. So you own a liquor store, David in Venice Beach, Rose. That was my best friend, man. You know, you talk about Ricardo at Star Liquor in LA. Like, these are the people that I look at on the set, like, where do we live? How do we differentiate? And it's funny because I don't I build differently. When I was with Rob this last week, he showed me a deck of some really cool brand. I was like, that brand's dope. I was like, what's the ingredients stack? He's like, they don't have one. I was like, what do you mean they don't have one? And he's like, I'm like, I built differently. I build the product, and then I go to my I go, like you said, I hit the streets, I see what's what's the what's the flow, and then get with the team. I'm not creative at all. And so I let them really just run wild with it. Like, I love this vertical, I love this, I love that like we're gonna change this logo up a little bit. You can see on this evolution of this can. Obviously, it's hard to see with the label of the film, but like we've changed all this stuff up. Enhanced ketone hydration. We took all that off. And it's funny because you look at the go look at the guys from Vital Proteins, they're their brand called Love, who came out. I've seen it, yep. A very small after ours, and you tell me how different their branding is than ours. Yeah. Even and my lawyer, God bless his soul, he passed two months ago. And he's like, we can't sue them for that either. There's nothing we can do, it's just called trade dress. So it's it's norm. Interesting.

Speaker 1: 12:47
That's good to know.

Speaker: 12:48
Yeah, yeah. So I mean, how much that dude raised like a hundred million right out of the gate for that thing, and like I'm watching Mr. Beast on his his his blog a thon and what's in the back? B Love. And people see B Love at freaking these concerts, and like, oh man, this guy's drinking holy water. I'm like, no, he's not. He's drinking a B Love.

Speaker 1: 13:04
Man, yeah.

Speaker: 13:05
It's gotta be frustrating here and there. You know, but that's that's the reality. That's just how we saw we saw the design, they saw our design, they loved it, they copied it. But that's that's love, man. Literally. Imitation's the best form of flattery, right? Doesn't this? Yeah, but like that's what we saw on the shelf making it a little bit of a difference. And we love the white too. You know, we love the white popping. I mean, we try to do the ton of different things, inverted cans, different colorways, but we love the gradient and it was just cool. And like you said, I got that vibe from being in the festivals, being in the street, seeing what would differentiate myself from the marketplace and getting with my team, and and we came up with it, you know, in a year. And so it wasn't like it was quick.

Speaker 1: 13:41
Right, totally. For maybe some other entrepreneurs that are just in the early stages of building their first CPG brand, they need to learn really fast. What's kind of the best way to do so? What have you found the best way to kind of immerse yourself and learn something quickly?

Speaker: 13:53
Like, look, I I was blessed to have this opportunity in in 13 to partner with Vita Coco. Like you said, I sold that thing in 90 days. I opened it in November and I sold it in January of this of that next calendar year. And it was because I loved Vita Cocoa. And I was on the beach in LA, met my partner Elon in on Craigslist. You know, that November, that December, we had the BevNat Forum, and I we were blessed to win Best Innovator of the Year there. And Kerbin was the man of the year there. So I went and sat behind him and Sadowski, Ken, and I had like my six-pack, and we put organic on the first bottle, and you can't, because my buddy told me you could, and you can't. So we stickered all 200,000, 185,000 tetra packs. And I sat behind Mike and gave them this coffee coconut water, which they easily could have done on their own. And Mike's like, that's cool. And then he got up and left to go to his flight, and I followed him out there. And I was like, listen, man, like I'm like you send me the cease and desist because I hired that dude, and I'm not gonna hire anybody, but can I hire that person? And he's like, No, you can't hire that person. And so I was like, perfect. Like following up on that, I'm like, I'm broke. I was like, I don't know what I'm doing. Can you help me out here? And he's like, I'm like, I'm like, would you buy this from me? Or I was like, even secondarily, if you don't buy it, like I'm broke, I need a job. Like, would you give me a job? And he's like, Let me get your number. He's like, I kind of like what you're talking about. And so then from there, we just started texting, you know, a segue into specifically what you asked. It was like, I just became a sponge. Like I slept in the Baitecoco office. Like I literally would be there every day. Um, I moved to New Yorking before the deal was done. And when I got my money, I remember I went to the store and changed and took off the clothes I had because they were so beat up and put the new clothes on and left that store. And I really just we had Jeff Potkin as our leader. We had amazing, you had Tim Dwyer, you had Brian Arcus, you had some of these amazing leaders, right? Tim's at this incubator now. He did Flow Water. You have Arcus who's running Lemon Perfect. And then you had Jane Pryor, who's like the best CMO in the game still at Bite Cocoa. And then you had all these amazing people, JB and Goldie. Then you had like a lower level at that team, like John Van Steenberg and Jeff Stahl, Brian Johnson, like Chris Borganoni, like those guys were street level guys. Like, and that's who I went and rode with. The whole time at Bite Coco for three years, I did a new market every week. And I just I literally was a sponge to understanding distributors. And that's like when you go talk to what does a new person need to know in CPG? It's how to manage their distribution, right? It's how to manage not only like the theatrics of it, but it's like the personalities of it. And I learned that really well from managing the emotions at my restaurant when I was 21 to 24. So I was a terrible manager for the first year, like super emotional, super reactive. And then some of the sorority girls that I'd fired would come back, like, you're such a dick. And then I was like, dude, I am a dick. What am I doing? And so I really learned how to be a better leader. And then when I got with them, like I had no understanding of the business at all. So I really was just a sponge, man. And and it really taught me about distribution. So, like that's what I love. And when I talk to a lot of people, it's like the demographics of the nation and how your distributors are, it's so different. If you're in Miami versus Boston and Boston versus Austin, and Austin versus LA and Vegas, it's so different. And that's really what I I, you know, you gotta go deep, is what they say, but then you gotta make money. Like you can't go, you know, it's like not everyone can make a million dollars in Chicago selling a drink up and down the street. It's just hard. So it's managing the distribution and it's understanding, you know, and getting the liquid to lips and and figuring out, you know, that consumer and identifying that consumer for the distribution to get to them. But now it's tech, right? So like this thing I just gave you, don't even listen to that. Right right now, it's figure out your D2C route, and that's the way to go.

Speaker 1: 17:25
Yeah. That definitely seems to be the trend is launch D to C get break-even that way, also prove the numbers. You can then bring those numbers to retail and show, hey, put us on the shelf.

Speaker: 17:32
Adam, write that in a book and sell it, man. That's it, right? I can't, I still can't sell D2C for shit. I don't know how to. I've hired numerous firms, they don't know how to. I don't know what is going on.

Speaker 1: 17:44
Some of your SKUs have THD, some of them don't. From the beginning, was the plan to have both THC and non-THT SKUs, or did that vision evolve over time?

Speaker: 17:53
Always. Yeah, no, always. When I was at the wine company, I I saw THC coming up. Uh like I did the deal in 22. 21, I told them no, because it was a shit deal and it proved to be a shit deal. And 22, I um uh did the deal and I said, This is the future. I these THC drinks are crushing. And and I wanted to make a Cope of Cafe, a coffee, coconut water with THC. And then I wanted to make a shot with the nootropic. So I did it backwards, and and I flipped it when I got over here because I then I had the sessionable drink at the venues versus the lightweight, high margin, um, really psychoactive shot. Like that shot, I got like an 80% margin, and I just shipped the shit out of it. I'm like in 2,000 stores with that shot. The velocity is low because I picked the wrong color bottle. I picked the blue bottle, and it looks just like feel-free kratom. So I really effed myself there. Uh, but the the product is amazing, man. My my formulator partner, Jeremy, that's where he really came into play because he's a mycologist and he's got a lab in Colorado. We use this THC P molecule, and then we we emulsed it with some CBD, and then we put in uh the nootropics and the ketones and the BHB and the functional mushrooms, and it is amazing high. Like my buddy who runs the Monster Brewing, he's like, dude, I took that shot on Friday at Wrigley to see Pearl Gem, and I was high till Monday. That's not a great experience, but yeah, no, that shot. I take it and I go ride the bike because it gives you that instant high. And we got a really cool guy on social media that shows you how low my social media following is, but he uses these these THC drinks to go work out, and that's like what I do too. Like I've I've used cannabis, I've been an athlete for a scholarship. I I use cannabis since 15 years old every day in a very incremental process. And I still do, right? Like I microdose cannabis per se, and even though it's not a thing, but that that to me was what I wanted. I always wanted something that was actually psychoactive and and not just mood boosting and metabolic. And but that's why you see the rise of a big hemp, right? That's why you see they just got screwed. I mean, because they were just taking over that that psychoactive place. Like my buddy, not my buddy, a guy that they he sold some packages. This kid's a wrestler at Wisconsin. He came in, his kid's 18 or 19, and in Wisconsin, you can drink with your parents at that age. And he's like, let's go have a beer. We don't do that here at the University of Wisconsin. We don't do that here. He's like, but if we could get I'll take a THC drink. So yeah, I always saw that as an avenue and I love it. And that's why, like I said, my current client is a hemp company for like 10 years, herb, and they're amazing. Like they are the diamond standard of what's going on in hemp and things. It's really cool to see I'm making their drink firm right now, and we're launching it next month here in Wisconsin.

Speaker 1: 20:29
Oh, that's awesome. That's great. Have you found that the consumer groups that purchase your THC skews versus the consumers that purchase the non-thc skews, are they fairly distinct, or is there is a fair amount of crossover and everyone's buying both?

Speaker: 20:43
Well, look, there is a fair amount of crossover, but that's specific to my route to market because I I invested a lot of time in the counterculture and the gray market and the smoke shops because that's where I saw the velocity with the THC early on. I came out with the THC shop first, and that was where I started getting the instant revenue, right? We 500,000 in our first year. So still really, really small. Um, you know, but that's where I've got my I got a big pop of like 200,000 in my first three, four, five months from the THC. So I put the Holy Water, you know, cognitive drink next to it, and it's still the same customer, but really that it's not that's not gonna be the same customer over time. Like I want the the the metabolic drink for holy water is for endurance athletes and biohackers, but I'm trying to make it more sessionable where I'm not gonna send it. I'm remiss, I apologize. I didn't send it to you. So you didn't know where is it? Well, I didn't even think about it, man. I've I've been on a literally five trade shows in five weeks, it's just non-stop. Yeah, PLMAs, supply side, knacks, champs, and then an um another one. It was just crazy. So it's a blessing to have all these people in front of you, but yeah, it this should the the the metabolic should evolve more into the endurance athlete, but also I need it to get more. We're finally getting like it's a non-alk, right? So I want it to be conceptually used as a non-alk, not a mixer, but not psychoactive either. So is it's like the recess, it's like the parts. Will it give you some feeling? Yeah, but will it give you like a Truly visceral feeling? Like, no, it won't. You know, you're not gonna drink it, feel it, you know. You might feel something, hopefully better. Totally.

Speaker 1: 22:07
How are you processing strategizing around this hemp band thing and you know, have whatever 350-ish days left? How are you kind of thinking about this, processing it, strategizing around it?

Speaker: 22:16
Look, these guys that I'm surrounded by are super smart and educated in that way. So I don't want to say anything that I I don't know about. Like what I do know is there's five sessions of Congress. I ran for office twice in Illinois. I got on the ballot and I the party I ran with kicked me off the ballot for no reason other than they don't want me to that's politics. Yeah, the Windy City. So they didn't want me to run against their incumbents. So it it's an uphill battle, is what it looks like to me. You know, when you talk about big distributors, big beer, big cannabis. I don't know how it changes me. I was always borderline, you know, does THC fit my model? And this clearly showed me that no, it doesn't. Sure. Just for the reasons that is it gonna be there? I don't know. And and do I need to build a brand based on that? No, I don't. So we're done with THC. We're making shots and then we're making stick packs with ketones. Yeah, and there's already someone else did it, you know, Aubrey Marcus did it, but like my concept's cool. And so if you see anyone else do it, just know they copied me. If anyone makes ketones in creatin or ketones in collagen, ketones in colostrum, ketones in hyaluronic acid, they copied baby Jesus. But that's what we're coming out with now. So hopefully we'll get to market first with that. And then a two-ounce shot, like just like I told Michael Brandt, ketone IQ, like that's where our consumer is based at. So we've got to get them, get them that. Yeah, but no, the THC to me, it's it's tough because I love the the health benefits of C V D and that plant, and it's it's really sad to see that politics can, especially these old fools, man, like Mitch McConnell. Like, can that guy even talk? Like he's the one that brings it in it, like what are we doing with that? So it's crazy. It's so wild. It's so wild.

Speaker 1: 23:47
Um, another question I had for you, and I was like, um, pretty sure I've heard you talk about how with true microdosing, I think I've heard you talk about things like Sheila Jeet as an example.

Speaker: 23:57
Like I love Sheila Jeet.

Speaker 1: 23:58
Those type of things where you don't, you don't necessarily really feel anything, but that doesn't mean the product isn't working. Yeah. In my experience, I feel like generally, like the the general consensus, what you hear from people or hear, you know, thought leaders say is that a company should or a brand should focus more on offering what they would call painkillers, you know, things that have a noticeable, fairly immediate acute effect versus what they'll call vitamins, which build over time, which I get why. What's your take here?

Speaker: 24:25
Look, I think you hit it on the head. I I agree with what you're saying. I think it's always function over flavor and function over whatever you're taking. You know, in a couple different stories, I saw a guy yesterday post on LinkedIn because I'm always active on LinkedIn. It's funny, my friends in in real life, IRL, they're like, Who are you on LinkedIn? I'm like, that's me. And they're like, no, it's not. I'm like, yeah, it is. Um, I just found it as a great tool when I, you know, was in opening our wind energy company, and it's clearly been proven to be a great tool. That's how you and I met, right? It's like, and it's authentic and it's real versus like a DM on Instagram or an email that now you get so many freaking spam emails. It's like, come on, man. So yeah, like I I saw someone post, it's like, hey, we're getting function washed, and we really are. When you go talk about, you know, some of the people that are putting these nootropics and functional things in their brand, I'm at 13,000 milligrams. 13,000. So 13 grams, right? Thousand grams, milligrams in a gram. I didn't know that for until like last year. Um but other people are at like 350 milligrams and they're saying the same thing I'm saying. So, like, and you're gonna sell it, you're gonna buy it for the same price. And then I saw someone who makes an RTD liquor drink, and they're like, Why are non-alk so expensive? My formula costs me like 70 cents. Your vodka cost you three cents. So let's do the math there, you know, and it and his last line was come at me, like easily. Like, then no, I'm not because you're that person. So we're using really, really top of the line, you know, functional, you know, futuristic, metabolic, cognitive, really, really cool stuff. And so you get that function, but then a lot of people say this tastes like shit, man. Like when I put it online and I sold it on Amazon, I'd get like horrible reviews. And so we literally put it a disclaimer like this does not taste good. And so now, as I'm formulating, like I'm really my cans are gonna move down in ketone execution because it just I need the flavor. And so that guy was right online, like it is flavor over function. Yeah, you know, like in and do you feel it? So going to your specific microdose thing, like you know, I I have a ton of experience in psilocybin and using microdose. You don't feel a microdose, you feel like a spark of joy, you feel happier. Like whatever your ailment is, it kind of alleviates itself. Yeah, but if you're feeling your microdose, then you're just tripping, you know. Right?

Speaker 1: 26:32
That's not a microdose.

Speaker: 26:33
No, I'm with my I'm with my buddy Kyle Cook, the DJ, right? And from Loverboy in San Francisco one night, my wife, you know, she's she's taking her microdose Nutella that like her person gave her, and she's like, dude, the room's spitting. And I was like, What did you do? And she's like, I took this Nutella, I'm like, how much is in it? And she told me, I'm like, dude, you're just high. Like you're tripping. Like, it's like under the covers. So yeah, a microdose, you shouldn't feel it. There, that's why even if you take five microdoses, you shouldn't feel it, right? Take like a dose, you'll feel it. And so that's why when you take my stuff and holy water and someone's, it's not an energy drink. Like, you're not gonna feel that touring guarana caffeine kick. You're just not gonna feel it. You're gonna feel better, you're gonna feel less tired, and you're gonna feel healthier. But yeah, it's a weird, it's a weird trade-off because like, am I gonna feel better? But this actually tastes like shit. And I'm drinking something I want it to like satiate and taste good right now. But that's why I think the THC drinks crushed it because those guys at Pilot Project and Virtosa and not pilot project, but uh perfectly dosed, like they've done such a good job with their emulsification. I remember when we started emulsifying THC in like early 21, like it tasted terrible. Yeah, it tasted like car, and now it's like it's beautiful.

Speaker 1: 27:39
Yeah, yeah, there's definitely a lot of improvements on that front, that's for sure. You kind of talked about it a bit, but it definitely seems like the Sea Store channel has been a pretty big focus for you throughout your various kind of beverage ventures. What's unique about this channel compared to I guess more tradition other traditional retail channels and kind of what's the key to winning in Sea Stores versus others?

Speaker: 27:58
I mean, shit. You talk about these retailers, I was so blessed to be with Buite Cocoa and not see the bills they had to pay to get my brand on shelf. Some of these guys, they want me to go into their stores and give them give them thousands of dollars. I'll never make. And then I won't have the velocity at that store. Now, not only do I owe you money, which I don't have because I didn't make it in your store, the data is gonna be so low that you're gonna kick me out. I'll never get it go back in there. So when you talk about like that's again going back to who I am, it's like my my route to market strategy, innovating, make myself look bigger, and the Jeff Rubenstein strategy. It's like you've got to play where you can where you can go and not pay. And that's really, you know, it's knowing like I've lived in numerous cities, you know, LA, Vegas, New Orleans, Atlanta, Boston, Miami, Chicago, New York. It's like I know what the people think in those markets. I know where they shop, I know where my consumer shops. So, and I know the hybrid from like a really nice health and wellness or a bottle shop, you know, where both of these things fit, down to like what's the grimiest little C-store I can fit into in a dirty little neighborhood that can actually have the right consumer there. And so that's that's where it's like you lay, it's the lay of the land. It's like seeing the matrix. I always say, like, when you walk into a bar, it's like super dark, and by like your third corona, you're like, man, this is awesome. It's so clear. I love this bar, you know. But you were you're a little trepidatious when you walked in there. So I I accumulate or I attribute my my understanding of each market that same way. It's like, what's my lay of the land? Where do I go? What's the demographic here? And it's typically like the sea store is where I'm finding that neighborhood, right? Like in LA, it's that whole strip up and down Santa Monica. Then it was that one strip up in West Hollywood, then it was that strip in Echo Park, then it was that strip in Hermosa Beach, and then it was that strip in Orange County, and then that strip, and then it was that strip up in Malibu, and then it was that strip in the Palisades, strip in the valley. So it's literally one strip turns it now to a parallel, then it turns into this, and now you're like, okay, you go to Rainbow Acres, you go to Mother's Markets. I was doing demos at Erwan when it was still like an ethnic grocery store in LA, right? Now Erwan won't even take my brands. So shout out to Erwan. But it's like, to me, it's like that's that's it. It's really understand your route to market, understand your lay of the land. And there's a really cool young lady up in San Fran, and she's got a brand called Drippy, and she's always out there hustling. And I sat next to her CPG event um from Startup CPG and Daniel. That guy's amazing, too, by the way. Like that community is insane. That dude's amazing. His energy is insane. And but his community I'm in that Slack channel. I think I think there's like 50,000 people in there at this point. It's bro, I used to live on that Slack channel until I got too busy. I was in that thing, man. I was soaking up everything, screenshot it. You go through my phone, and I love like the LinkedIn culture too. It's because everybody posts like who did what for them, what buyer did this, what distributor did this? My phone is full of thousands of screenshots of everybody who's done everything for everybody. And the same thing with that startup CPG Slack. It's like, what a what a use, what a what a resource.

Speaker 1: 30:50
Yeah, it's great. What does the the functional beverage category landscape look like in the Sea Store channel? And how has it evolved over the past few years?

Speaker: 31:00
I live in the burbs, right? So like I have to I love Heinans, I love Sunset Food, I love Pete's Market. I'll die. The Pete's Market buyer is amazing. So when you look at your regional groceries chain in the Sea Store, that's kind of what they've grown into, is that regional grocery is kind of your Sea store play now. But when you look at like sea stores in Chicago, they're all liquor stores. In LA, it's the same thing, but LA is different because LA is is super motivated for health and wellness. They really cater to their neighborhood. You know, like Tupac always said in LA, there's a liquor store on every corner. You know that, Oakland. But I mean, they're they're different. They're more affluent, they're more progressive. The sea stores here in Chicago are all liquor stores. And so we have like the foxtrots and we have the go grocers, which are amazing, but I still kind of conceptualize those as sea stores. Super competitive. Like I can't get a foxtrot either. I can't get in go grocer because they're just so competitive. So I'll go to the liquor stores, and then in that set, it's just so unorganized. Like, where does it go? It goes in the energy set. So I'm next to Celsius, I'm next to Monster, but that's not my consumer. So I'm not getting that pull. So where do I gotta go? I got to go off shelf. And so that's always been my methodology. And it's the same thing, like you get into your one regional chain. We got into Jewel Osco, and it's like, what do I do? I go to every jewel we're in and I make sure that I'm tight with the manager and get in, not my mod, but the open air cooler, the produce set, another set. You know, so you have to get four or five points of sale. And that's what you have to do with these C stores too is figure out the food service channel. You look at what Wild Wonder is doing. You look at like this young lady here in Chicago, Space-Time T. Uh, we just got brought into all the the Discover um campuses through Pod Foods. Like that is really where you want to build your brand in that food service channel and in the functional space. Uh, we sold a palette to Meta, so it's really, really cool.

Speaker 1: 32:39
From your perspective, how can a brand truly partner with their distributor to really maximize success and really try to build a true partnership with them?

Speaker: 32:45
Yeah, I mean, you touched on the broker piece too. Like, I love key account sales. Like, I learned it from my father, he's a project guy. I love key account relationships. Like, that's how we got into jewel, but we got into jewel through the Kahee rep, right? So when you look at like again, your out to market, like Kahee's an amazing place to sell your brand and they're super, super progressive. I actually got to make an ad for KE. I gotta write that in my hand because I'm gonna forget. But and I'll use AI for that. My designer's off, but it like that aspect of harnessing that distributed relationship is they need anchor accounts, they need key accounts. They don't want to go sell your brand up and down the street because they're too busy, right? They're not making money on it. Um, but the K He refs are amazing. So that's obviously why in the natural world you started a K he started a UNFI, and then you don't, I think, you know, overshoot really what your goal is. You really have to create realistic goals. And these goals suck, right? Like that's why I'm at where I'm at. I'm 500k LTM, but I'm break-even. Like, you know, I didn't I didn't raise any money this year, you know. So I'm I'm not I'm not blowing dough and I'm not getting paid, but I'm not making any money. I'm not spending money where I'm 500, but I spent a million or two million. Like I'm not doing that. So it's really having a very narrow focus. And I've utilized some brokers and I went way too big with them. And I said, you know, let's let's attack these seven regions. But it was like, well, we sell through UNFI here, or we sell through this distributor here. And I was like, Oh, I only have K heat, I only have this DSD. And so it didn't align with their broker strategy. And then, you know, even the food service is tough. Like you want to get in Canteen, VISTAR, etc., but need anchor accounts, and and then, you know, unless you can hammer that, and I'd have broken for that too. And, you know, we had we had some conversations and the same conversation for three months. And, you know, it's just because it's not because it's their fault, it's because it's my brand's fault, right? My brand doesn't have the messaging that really allows these food service accounts until I get in front of them with other data, like you mentioned, to make really relevant sense. So that's why I love layering DSD in with the broadline. I didn't know what broadline was either for some reason, but broadline's like K Heat, right? They're this they they essentially call it direct because it's lower margin, it's easier to get in their warehouse, and then they hit those stores all the time. Where DSD is your Anheuser Busch, your your wine and spirits distributors, or your your Normans and your Romanos, like locally here in Chicago, that crush. And so that's what you got to find. That's why I got really lucky and I partnered originally with Tony Harlombos and his team in Atlanta, and then they did so well for me back in 2012 and 13. Like they build brands back then, like, and I still would yell at them, you don't build brands. I remember yelling at Ron from Great State, like he sold like 2,000 cases this first month, but I was with Vita Cocoa, and I only had a a specific run rate with Vita Coco before they were gonna buy me out. So I was super aggressive. And um, it's just like they were doing really, really good shit back then. And so now it's like, you know, now now these distributors collect brands, get you into a contract, play with your life, like Pitbull says. But it's like it's at the end of the day, you know, you got to know what you're getting into, and and you've got to know the market, you know, to get in there too. And I have an amazing broker, J and W sales. It's this dad and his two kids, and they are freaking the best. Like you talk to Nate Cooper, who's my neighbor also, but he's always busy, and um they built Olipop, right? When when that stuff wasn't even relevant, right? And now you look at like what is apple cider vinegar, everybody consumes it. And it's the same thing with me. Like this this broker, JW, they've got me in Pete's, they've gotten me in this other chain, they got me in this other chain because they have these sales reps that are truly still getting in the doors with the buyers face to face, and they're like, BJ, come meet me here, have this meeting with me face to face, where you don't get that a lot, you know, not to also go back to the startup CPG world. That's cool that they do that because we don't get that a lot, especially COVID removed that from everybody's really, you know, egos.

Speaker 1: 36:18
What's the best way for newer brands to diligence and really validate a broker's retail relationships to understand if they really have those deep relationships that really are gonna be able to help you make some inroads?

Speaker: 36:29
Oh my gosh, man, it is it's tough, it's hard, you know, because you want help and you want to trust that what that person's saying is gonna be delivered and and and a lot of times it it's it's management, right? It goes down to expectations and it's gotta be realistic. Like Jade Street consulting, that lady crushes critical mass, that dude crushes. Like you talk about Greenspoon, they do a great job. PMI, like my buddy's brand, Bill Wyland's a good friend of mine, just sold a platform, like they crush, but those people are all massive, like they're massive, and like I'm not ready for that yet. So I have to figure out you know what is my real route to market. Like we had a girl in LA, she got deported. Um, so we moved our our focus to Austin, right? It was like Austin made a lot of sense for us, and I was down there a lot. I had a rep down there, I couldn't afford them anymore, so I just kept trying to go down there, and then it was like, I can't touch this brand every day. So then now that I can touch it in Chicago, it's really, really helpful for me to be able to touch it. So I think that's the first thing is like that you are in arm's reach, or somebody on your team's at arm's reach from where that broker's actually executing. And if you're not, then it's just not it's really not for you. And don't think it is. Just because Wegmans is the top place you want to be, or HEV is the top place you want to be. Like if you don't have someone touching those stores or have bass makers, then just don't do it, you know?

Speaker 1: 37:40
Yeah, totally. Yeah, that makes a lot of sense. I got one one more question for you. Any brands specifically or just kind of trends in general in the CPG space overall that you've been kind of particularly got excited about lately, or kind of things you're tracking closely?

Speaker: 37:55
Uh yeah, I mean, look, I love Wild Wonder. I love DB's popsicles. My son's addicted to them. I love I love Little Spoon because I think it really relates to like what your your life is. Uh I love cloud popcorn. I I'm really obviously a beverage geek. I I love my Coke. I made a cola. It's I think it's the best. I'll send it all to you. Shoot me your your address and you tell me. Obviously, but I love what like Vita Coco is still doing, and I'm not trying to like toot their horn, but like they're a group that they had supply chain issues and they just blew everybody off the map. Like their group projects what they're doing, then they created treats, then they created milk, then they created all these different, you know, um the creamer. I like the the non-dairy creamers. Uh my wife has our whole fridge full of these non-dairy creamers from minor figures and Calafia. Who else do I love? I mean, like anything Ken Sidowski touches, I love, right? Like that thing, he has his hands in a lot of different things. What was he talking about? I love the little shocks that give you a feel. I'm even, you know, I'm more into the gummies and stuff. And with this client here with herb, like they're doing really, really cool stuff in the nootropic space and people are really pushing the envelope. You talk about like supplements, like I don't the grunts thing kind of is like amazing to me, right? Like, so is the athletic greens thing.

Speaker 1: 39:06
Totally.

Speaker: 39:06
But it's obviously for that boomer person, right? Who like wouldn't be able to get into it. So I wish I would have looked into this question because I have so many fun brands that I love.

Speaker 1: 39:14
You named a bunch of them. That was great.

Speaker: 39:16
Yeah, yeah. No, I mean, I I'm a geek, right? Like my my wife's only allowed to drink certain drinks because I have I have rules. But yeah, man, I'm pretty, pretty I I love the the beverage space right now.

Speaker 1: 39:28
For sure. It's it's exciting. Well, yeah, that's been great. BJ, you definitely got a lot of great insights here. What's the best place for people to follow along with you and all your expertise? And then what's the best place these days for people to follow along with Holy Water as well?

Speaker: 39:39
Yeah, I mean, LinkedIn is big for me. Obviously, I'm there, easily accessible. I love to reach out. I was teaching entrepreneurialism in a university setting for the last year until I started, you know, evolving more into the the consultant space. But where we're at online with enjoyholywater.com, um, you know, we've gotten some really good, we get really low traffic. It's crazy. We'll get like 30 people a day, but we'll get 10 sales. So that's like really where in Amazon is where you can buy holy water right now. And try the cola. Look, if you love cola, use the code always50. It's half off. So yeah, it's an amazing cola. It'll change your life. Well, it's been great, BJ. I really appreciate the time. I think that's it. I appreciate you, man. Thank you. Thanks for there. That's the pod.

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