Digital Social Hour - Ex-4 Loko Founder, Now Drinks THIS Daily?! 🤯 | Chris Hunter DSH #697

Episode Date: September 5, 2024

🤯 Discover the surprising daily ritual of Chris Hunter, the ex-founder of 4 Loko, as he transitions from the wild world of alcohol to the health-conscious lifestyle of Koia! Tune in now to the Digi...tal Social Hour with Sean Kelly, where Chris spills the tea on his journey from party drinks to plant proteins. 🌱 Don't miss out on this engaging and authentic conversation that's packed with valuable insights into the beverage industry, celebrity endorsements, and the challenges of building a brand from the ground up.   Ever wondered what it takes to succeed in the competitive world of drinks? Join the conversation and find out how Chris navigated the turbulent waters of entrepreneurship, all while balancing family life and wellness. Watch now and subscribe for more insider secrets. 📺 Hit that subscribe button and stay tuned for more eye-opening stories on the Digital Social Hour with Sean Kelly! 🚀   CHAPTERS: 00:00 - Intro 00:24 - Chris Hunter’s Journey 01:27 - What's in Koia 03:34 - How to Make a Drink 04:17 - Celebrities in the Beverage Space 07:11 - Koia’s Flavors 08:17 - Developing New Flavors for Koia 09:02 - Raising Capital for Koia 11:10 - Product Shelf Time for Beverage Companies 13:11 - Profitability Timeline for Drink Companies 14:04 - Exit Strategies for Beverage Brands 14:58 - Once Upon a Coconut 17:08 - Risks of Expanding Beyond Core Consumer 19:24 - Effectiveness of In-Store Demos 20:54 - Importance of Mentorship 24:25 - Getting Kicked Out of College 28:30 - Where to Find the Book   APPLY TO BE ON THE PODCAST: https://www.digitalsocialhour.com/application BUSINESS INQUIRIES/SPONSORS: Jenna@DigitalSocialHour.com   GUEST: Chris Hunter https://www.instagram.com/__christopherhunter__/ https://www.instagram.com/drinkkoia   SPONSORS: Deposyt Payment Processing: https://www.deposyt.com/seankelly   LISTEN ON: Apple Podcasts: https://podcasts.apple.com/us/podcast/digital-social-hour/id1676846015 Spotify: https://open.spotify.com/show/5Jn7LXarRlI8Hc0GtTn759 Sean Kelly Instagram: https://www.instagram.com/seanmikekelly/ Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript
Discussion (0)
Starting point is 00:00:00 Just this morning, I was in, I went to one of the smoothie shops around and I got a green juice and I saw they had wheatgrass. And I was talking to my wife after and I'm like, oh, my stomach feels a little weird. And I was like, it was crazy in my mind. I'm like, is that organic wheatgrass or was it sprayed with something? You know, and isn't that crazy? Like you can do better by having a wheatgrass shot and you still don't know if it's like crazy. Yeah. All right, guys, we got Chris Hunter hunter founder of koya and also for loco
Starting point is 00:00:28 right yeah yeah what a transition it was a wild one you didn't want to stay in the alcohol space uh you know the the deeper stories i was forced out of my own company oh wow my partners and i had a essentially just different view of the world over years and um i woke up one day and i was fired from it oh yeah as a founder as a founder yeah you hear stories of that yeah i mean look we were 25 when we started the company so we did legal zoom docs it was majority rules i brought the guys together i thought i'd always be in the majority and i suddenly wasn't and it kind of worked out though because i was transitioning in life i was married i had two kids you know health and wellness was more important to me and so koya made made a lot of sense. Yeah. Now you're pushing
Starting point is 00:01:08 a great product that you can stand behind. People are drinking it and you could feel good about it. Absolutely. And, and from a lifestyle perspective, like I always think of how do I incorporate, I have three young kids. How do I incorporate life and work together? You know, we get to go to like Spartan races that we're sampling the product at and the kids get to go and run versus, you know, spring break for, for locusts. I love it. Yeah. So talking about Koya, what's in it that makes it healthy, right? Yeah. Yeah. So it's a blend of, of plant proteins. So pea rice and chickpea protein, which makes it a complete amino acid profile. That's usually the knock on plant-based products. And, um, it's in almond milk or coconut milk, usually almond milk. And, um, it tastes, I mean, you've tried it, right?
Starting point is 00:01:46 It tastes really good, but it only has four grams of sugar. So most people are shocked because I believe with beverages and with food in general, you can have the healthiest thing. But if people don't like it, if it doesn't taste good, they're just not going to sacrifice, right? So we started with taste. We made it taste really good, really easy.
Starting point is 00:02:02 And then it's kind of like, oh, this is healthy. I'll keep drinking it. What's your thoughts on guys like Dave Asprey going after these almond milks, these oat milks, saying they're not good? Look, I mean, I get it. I mean, the glycemic impact of oat milk I get, you know, I think there's different ways to attack everything. And so there's the environmental impact.
Starting point is 00:02:23 Are they more environmentally friendly or not? Like, are they more, uh, bioavailable? You know, there's all kinds of different ways to go after it. I'm not about exclusiveness. So like we don't, it is vegan, Koya's vegan, but we don't pitch it as that. We don't pitch a vegan lifestyle. Like I have a steak one night, grass fed, you know, high quality. And then I have a Koya for the, for breakfast the next morning. So I think you can have both. Nice. You could use it as like a meal. Yeah. I mean, technically it's not a real meal replacement, but it's really high in fiber. It's an excellent source of fiber. And so it fills you up. And so it can act as a meal. Yeah. Yeah. I had a doctor on, he said there's a major fiber issue right now. People don't eat enough fiber. Exactly. I mean, I think I'm going to mess
Starting point is 00:03:01 up the percent a little bit, but I think it's about 30% of your daily intake of fiber is available in one Koya. Wow. Yeah. That's impressive. Yeah. How many do you drink a day? I'll drink two, maybe three. Dang. Okay.
Starting point is 00:03:12 So I'll drink one in the morning mixed in with coffee. Yeah. And so like we're now in Starbucks. And so one of the drinks that people make is they take a venti cup, fill it with ice, put a shot of espresso in it, and then pour Koya in it. You get protein and coffee. It's like satiating. So I have one then, maybe one before or after a workout. Some of our flavors are pretty decadent, so you can even have it as a late night snack. That's cool. So what's the process for making a drink? Do you just come up with stuff on paper and then you sample it? How does that work? Yeah. So most people start with co-manufacturers. I mean, we now own our own
Starting point is 00:03:45 manufacturing facility, but it's really expensive to do that. So you can find facilities that produce whatever you want. So a lot of times people will make whatever they want in their own kitchen or hire a formulator and come up with something that they, that kind of like fits what they want. And then you take it to a co-manufacturer and you can produce it at scale. Got it. So look, the reality is right now, it's easier than ever to make a food or beverage product. There are so many support companies out there that can formulate it for you, produce it for you, all these things. But you still got to know where to start. Right. And you see a lot of celebrities trying to enter the beverage space right now, right? A lot, a lot. I don't think that's totally new. Look, the ones that are really doing well are the ones that are really living the brand. So what the old model of like, have a
Starting point is 00:04:30 celebrity talk about the brand or throw them on a billboard or in more modern times post about it, it's transparent. Everybody knows that's not authentic, but the ones that are really like aligned with it, as an example, Chris Paul is an investor in our company oh nice he's a plant-based consumer he was organically drinking koya before he ended up investing his own money we don't have him as the face of the brand but he is a celebrity and an athlete that is aligned with the brand right you have others like i think like logan paul and ksi like they live prime yeah that's why it's working right they live it 1.2 billion it's crazy for fastest ever yeah and it's uh i mean the rock with taramana right he lived it it's not like you were asking him to make a post right doing stuff mcgregor too yeah exactly right with proper 12 yeah yeah
Starting point is 00:05:17 and then the nelk boys with happy dad yeah exactly all those guys yeah you really got to be in alignment with it you can't just throw it up on your Instagram post. Exactly, exactly. And if you don't build a good foundational business, what I think some of these celebrities had to learn is like they may have thought or the person bringing them the deal may have thought, like I have this celebrity, it's done. Beverage is a very complex industry. I mean, you have to have distributors on board
Starting point is 00:05:42 for the most part, right? Because D2C doesn't usually work that well for beverages because they're heavy. And if you take products like Koya, they're also refrigerated. So you have that double whammy of shipping. Retail is really the channel to play. And if you don't have the infrastructure with distributors, with know-how at the retailer, all of that stuff, I don't care how many people know about it. They're not going to buy it if it's not available. So retail is super important for this type of product. I believe retail is really important. Now, look, we we've been a hundred percent retail focused.
Starting point is 00:06:11 We've gone in and out DTC, never profitably, but I'll say that as we talk to our customers, our number one request is how do we buy it in bulk? Because right now we sell over 2 million bottles a month. It's one bottle at a time. Wow. Yeah. No six pack or nothing, right? One bottle at a time. So that's a ton of trial. It's a nice place to start, but our customers are saying, well, how do I buy it in bulk? Right. It's clumsy to carry up four or six bottles to the checkout. And then the second request is how do I get it delivered? And so what we did, we took that feedback and we developed a shelf stable version of Koya. It's got 20 grams of protein protein it's got vitamins and minerals in it and we're launching that on amazon this week oh nice it's like a powder this month uh no no it's a ready to drink it's like in a tetra pack and like
Starting point is 00:06:53 the uh you know what a tetra pack is is that the plastic thing with the it's like it's like the almost like the cardboard boxes oh yeah yeah you know like box water would be in it or whatever other protein drinks come in it so so we're launching that and then we'll continue to expand categories, but, um, that'll be our first entry into like a delivery multi-pack. Yeah. And you got a lot of flavors now, right? Whenever I go to sprouts, I see. Yeah. Yeah. So flavors have been really been important. Look, there's always like your, your core flavors, our core vanilla bean, cacao bean and chocolate banana. But then we have like a tail uh some perform better than others like i'll give you an example we we created a cold brew coffee flavor of koya
Starting point is 00:07:30 seven years ago we immediately thought it would be number one it sat at probably like number eight like our worst selling product for for five years all of a sudden this protein coffee thing hit and it wasn't something we started it's just a trend and it became our number four product okay so having like a lot of lines in the water from a flavor perspective i think are important and then two sometimes we do flavors that are just they create a lot of buzz they're cool and unique will they be here in two years like we launched a cereal flavor line like uh almost like fruit fruit loops and that kind of stuff i don't know if it'll be here in two years but there's a buzz about it right now. Right. Yeah. I could see that. I was at Target the other day and Native, the brand that does body wash and stuff. They have a collab with Girl Scout Cookies right now.
Starting point is 00:08:12 There you go. Crazy. It's probably not going to be there next year, but whatever. Got some buzz. Yeah. That's cool. How much research goes into new flavors? Like, is there a whole team that's doing the taste tests and like research and all that? So we have an amazing woman on our team that has developed like over 2000 beverages. Wow. So she can do the science behind it, like figuring out the flavors. Cause you know, there's a lot of stuff, the raw ingredients, the flavors, all that that goes into it. Um, it's not that scientific of an approach from us as a company. We will either look at stuff that's working at retail. So as an example, we saw cereal kind of having a comeback. We knew cereal was unhealthy. This was a good way to get a play on nostalgia. So we came up with that idea and then she makes
Starting point is 00:08:49 it happen. But somebody might be out, one of our team might be out in stores and have an idea and share it. Or we may have some investors or even a retailer bring us an idea and say, Hey, we think you should launch a, as an example, a matcha flavor, but we can easily do that. Because of your success with Four Loko, were you able to raise capital pretty easily for this? Yeah. So we didn't really raise money at Fusion at Four Loko. And it was one of the things I wanted to do at Koya just to have the experience. To be quite honest, it came from a point of like, I felt a little bit insecure about not having done it. And so I did it and now we've raised more money than I wanted to raise. And so I'm good. I don't want to raise any more money. It did help. Uh, there were a couple of things that helped one, the
Starting point is 00:09:27 success, you know, the track record I had with, with four loco. Um, and we created another brand called not your father's fruit beer that we sold to Pabst. So both of those helped. The second was we had investment very early from a guy named Bill Moses who started Kavita, which is a essentially like a kombucha that sold. I think I've seen that one. Yeah. It's out everywhere. It's sold to Pepsi six years ago or so. Got it. And so he helped validate me and our product in a new category, which was non-alcohol as well. So both of those helped. And you were able to scale into retail. I feel like that's super hard. Yeah, it's super hard and it's slow. By comparison to digital products and companies, people that do that can scale overnight, right? For us, there's a review cycle, maybe two every year. Let's say right now,
Starting point is 00:10:10 there's a review. It might take four months before that retailer puts it on their shelf. Wow. So even when we have, which we did, like great sell-through data and the product's working, it just, it takes time. It's a slower process. And you have to front the money, right? Because they're on net terms. That's right. They are. Yeah. So you have to produce it. We sit on the inventory.
Starting point is 00:10:27 Then they have, you know, some of them have net 10, but they get a discount at that. Usually they're on 30 days. Got it. I've heard of net 90 on some stores. Yeah. Some ask for that. That's crazy. And some actually go as far, they haven't done this to us, but some actually go as far
Starting point is 00:10:41 as consignment. Oh, so only per sale. They want you to give it to them and whatever sells off the shelf they'll pay you for that's risky yeah i mean we're a perishable product it just doesn't work that way yeah so how long does it last on shelf 120 days oh that's pretty long actually for a drink on yes it's not too bad but it has to stay refrigerated the entire time got it so it costs money for them it costs it costs money for us to make sure it stays refrigerated like shipping we can't just throw it in any truck. And there's always risk, right? So when they unload the truck, it could sit outside.
Starting point is 00:11:09 But anyways, that's how it is. Any new products or flavors planned this year? Yeah, so our most exciting launch, like I was mentioning, is that shelf-stable version on Amazon. So we'll have a presence on Amazon. We get 5,000 searches a month for Koya, and we sell zero of them. What?
Starting point is 00:11:24 We don't have a product. Wow. So we think this should be really, really big just organically to offer the customers what they're asking for. We'll continue to expand categories. So we're looking at things that make sense. What we know about Koya is it's about delicious plant-based protein. So where can you go from there, right? So we can go into Shelf Stable.
Starting point is 00:11:43 We're looking at kids. I have three kids. Yeah. They all drink Koya. Of course it's in our house at all times. I just find half drinking bottles around my house all the time. Right. Cause it's a lot of protein for little kids. So we're going to do a kid's line and then we'll expand into different categories as well. You ever think about doing subscription? Cause I signed up for magic minds. So they send 30 a month, check a hundred bucks a month. Well, again, so with us not shipping them, then we haven't been able to do that, but on Amazon we will now. So we'll have subscribe and save and we'll have a subscription model, which I think will be really valuable
Starting point is 00:12:11 because here's the reality. We learned this over, over COVID. Like if you have a bottle or two in your fridge, you'll drink a bottle or two. If you have 12 or 20, you'll drink 12 or 20. Right? So we're forcing people to go to the store every day to drink a Koya where now they can just load up their fridge or pantry and drink it multiple times a day. Absolutely. Do you have an end goal for this? I mean, look, I've ultimately wanted to have a strategic sale at some point on one of the companies. We still own Fusion and Four Loko. We still own this as well, or I still own this as well with the investors. But we pivoted, I'll say two years ago, two and a half years ago from a high growth,
Starting point is 00:12:51 high burn company to a self-sustaining profitable company. It was absolutely necessary for us to do. And the nice thing that that gave us is time and optionality. So we're not in a rush. Someday, whenever that is, when we build the best company and have the right, you know, opportunity, I'm sure we'll sell it. We have investors who want to return. Nice. But I didn't know that was a common thing where drinks were operating at a loss like that. It's very common in drinks. I mean, some of the biggest brands that you've ever heard of may have never made money. Wow. Yeah. Never made money. Like Gatorade? Yeah. Maybe, but that's really a really long time ago. Like maybe like a body armor or like a vitamin water. And, and these guys probably could have,
Starting point is 00:13:31 but they consciously chose to keep reinvesting. Now I don't know the specifics. They may have made some money along the way, but Suja is an example. Oh, I love Suja. Yeah. Yeah. So they never made money. So they sold. Yeah. Yeah. Oh, they sold? They ended up selling. Yeah. Oh, was that recent? There were a couple of different situations, but I would say a couple of years ago. Oh, got it. Yeah. They were the first drink sponsor I've ever had. Oh really? Five years ago. They sent me those and they're really good. Yeah. They're good. Yeah. Wow. I didn't know they sold good for her, man. She was running that stuff alone. I forgot her name, but super impressed with that story. Yeah. I knew some of their other, some of their other team,
Starting point is 00:14:04 but, uh, cause I was in San Diego for a while. That's cool. So is it common? Cause there's, there's a big few drink players, right? Like all the, like maybe five companies or is it common for them to just buy out people? Yeah, it's pretty common. I mean, there's been a lot. So we're in a niche of the beverage space where we're refrigerated. So that takes different capabilities. And so we're now in a place where there are more people interested in refrigerated products because it speaks to fresh. You don't have to add all these things into it. But traditionally, that was like kind of a question. Did people want to get into refrigerated?
Starting point is 00:14:35 If you're just a general beverage that doesn't have to be refrigerated, it's Pepsi. It's the big players you would think of. Now, I will say that other people are taking kind of a different strategy right now with like a roll up and building their own platform strategy. And a couple of companies like Vitacoco have gone public on their own. And so there are other options now.
Starting point is 00:14:54 I didn't know Vitacoco was public. Yeah, yeah. Wow. I love coconut water. There's one upcoming brand called Once Upon a Coconut. Yeah, I've seen a lot about it. Why is it different? They've done well with the celebrity aspect where the celebrities are actually behind it. So they
Starting point is 00:15:08 got Damon John, they got Charlie Rocket, they just got Gary Brekka. Okay. So they got major faces and just marketing, social media marketing, they've crushed it. Yeah. That's a huge thing. I tell you, I like the brand Harmless Harvest. They actually recently sold to Danone. Oh, they sold? They did, but they have been involved in that brand for a long time. So I don't, I don't think anything will change. Got it. Um, but it was, it's, that's a great story. That's a great brand. It's the pinkest coconut water I've seen in stores. Yeah, exactly. And I remember when it came out, it was like eight bucks a bottle and that's like eight years ago. Right. So it was, it was crazy, but people paid
Starting point is 00:15:42 it. It tastes great. They just dropped out sparkling water. Did you see that? No, I didn't. Sparkling coconut water. Really? Yeah. Have you tried it? Yeah, I just tried it. It was decent. Yeah, I like sparkling water.
Starting point is 00:15:50 But yeah, my fear with these brands, because I'm very health conscious, a lot of them when they sell to bigger companies, they start making more profits. They remove certain ingredients. Yeah, I remember back in Chicago, my early days of the beverage industry, I had a friend who worked at Kraft Heinz
Starting point is 00:16:03 and he was telling me that like every year they had to hit certain metrics and they had to increase their margin or at least maintain it regardless of, of input costs. And he's like, so sometimes you just have to take a little more ketchup out and put a little, or a little more tomato out and put a little more high fructose corn syrup. And it's like, that's scary that that's what happens. It's the game they play though. They're all margin and money. Yeah. Yeah. It's, it's, I actually, just this morning I was in, I went to one of the smoothie shops around and I got a green juice and I saw they had wheatgrass and I got a wheatgrass shot. I was talking to my wife after and I'm like, Oh, my stomach feels a little weird. And I was like,
Starting point is 00:16:37 it was crazy in my mind. I'm like, is that organic wheatgrass or was it sprayed with something? You know? And she said, isn't that crazy crazy like you can do better by having a wheatgrass shot and you still don't know if it's like crazy yeah so your body's that sensitive where you can tell if it's not the highest quality stuff i you know who knows it could have been a bunch of things but something was definitely a little bit off yeah there was a big wheatgrass phase i don't know what happened to it yeah it's it's not the easiest right i mean you you kind of have to have the shop to to make it i don't think you can i don't think it stays the point is is I don't think you can bottle it and sell it. Absolutely. And there's a lot of health fats. So you're probably tempted to launch new flavors all
Starting point is 00:17:10 the time. Always. And so we've done some of that and we've gone a little too far away from our core consumer. So as an example, we launched a, um, a functional coffee line that had MCT oil in it and like ashwagandha and these other popular ingredients. And I love all those, but as an entrepreneur, I think you have to know what the brand is about and what the consumers of that brand want and expect. And so we launched it. It did okay. It didn't do great. It didn't do horrible, but it was not selling like our, our protein was. And so we ended up sunsetting that and, and focusing on our protein. So I think you have to be a little bit careful. We've learned some lessons. The biggest one I think was we launched, this was consumer driven.
Starting point is 00:17:50 We launched a low sugar smoothie line. So to compete with like Naked and Bolthouse, if you know those brands. Well, Naked has a lot of sugar though, right? 57 grand, like as much as a Coca-Cola. Now granted theirs is from fruit and Coca-Cola's is from high fructose corn syrup, but the point is it's a lot of sugar.
Starting point is 00:18:04 And so we're looking at the insights. were asking us for fruit flavors. So we launched this like low sugar smoothie line, lower in protein and it did okay. Ultimately I realized we had some self-inflicted wounds because if that was how you became familiar with the brand, you may not have crossed over and become a long time consumer of it. We took our own shelf space as an example to get that out there. We thought it had a huge opportunity. And then sometimes it didn't work and we had to pull it out
Starting point is 00:18:29 and then we had to rebuild. So you have to be careful with, I mean, there's a ton of opportunities, a million flavors you can come out with, a million line extensions, but like what really makes sense. Yeah, because there's that balance you play of what percentage of people actually care this much
Starting point is 00:18:41 about that health aspect, right? Yeah, exactly. And I think, you know, some brands have tried, some have done it successfully, but some brands have tried to expand into every category out there. And it's like, I don't know, how many brands do you think of that? You're like, I buy this as my coconut water. I buy this as my protein bar. I buy this as my, right. I would say none, none, right. There's very, there are a few, but there's very few. And so I think there has to be a red thread between them all. And for our brand, that red thread is plant-based protein.
Starting point is 00:19:09 So plant protein, low sugar, and that has to taste good. And so that gave us permission to go into shelf-stable drinks, which is still a drink. So it's only like one degree away. We have some other innovation that will take us out of categories, but it will still be true to that. That makes sense. Do you have any data on what percentage of your customers are return repeat customers? I don't know specifically. It's a little bit harder to tell at retail, right? But we know it's a pretty high repeat rate. So we'll do a lot of like in-store demos to get people to
Starting point is 00:19:35 try it. And we'll see, of course, you always see a spike during times like that, but we'll see like kind of a new base level set after that. And so we believe we have a pretty high retention rate, 60, 70% of consumers that try it. So really it's an awareness and trial game right now, which is why launching Starbucks was so important. I mean, I think they said they have a hundred million people walk through a Starbucks store, or at least go through the drive-through every week, every week. And you're in all of them. And we're, well, we're in 9,000 in the U S there are 16,000, the other 7,000 are what they call license stores so like inside of a target or inside of an airport okay and we're not in all those got it so those are separate from the main
Starting point is 00:20:14 locations that's right they're just managed a little bit differently okay interesting yeah wow yeah i don't realize that you know that's not only uh that's what i call revenue generating marketing like they buy the product, they sell the product. We make a margin, they make a margin, but it's exposure like beyond what we could generate otherwise. I'm surprised how effective the demos are. I didn't know those were increasing numbers like that. Yeah. And they're, they're not necessarily efficient.
Starting point is 00:20:38 So, you know, you won't get a return on those right away. You need labor costs and right. It's almost like understanding your lifetime value on, on digital, right? We don't necessarily have the ability to completely understand that at the store, but that's the only way that demos make sense is if you look at the lifetime of a new customer. Yeah. Did you have a mentor? Where did you learn all this? Cause this is super impressive to me. Uh, trial and error. I mean, I started in the beverage industry. It's, it's the only thing I've ever done. So when I was 23, I got my first job working for some guys with a startup vodka company and they came from Seagram. So they had a lot of experience. I kind of got a bit of a mentor.
Starting point is 00:21:15 There was a guy who ran a company called White Rock, which created two vodka brands that sold. One was called Three Olives and one was called Pinnacle. So I've heard of Pinnacle. Yeah. So this guy had done what I wanted to do. He sold over a billion dollars of alcohol brands. And so he put me in touch with a business coach early on who did some behavioral assessments and kind of helped me understand myself better. So that was really helpful. And then really just asking a lot of questions as I was growing different companies. Nice. Kind of learned, right? Yeah. And one of the ones I shared recently is, you know, there can be a false sense of success in beverage when you think about just your sales. Because I usually sell to a distributor. The distributor then sells to a retailer. The retailer then sells to the end
Starting point is 00:21:59 customer, right? Wow. So it goes through three levels. Multiple layers. And in alcohol, it's called a three-tier system. You have to have that. I can sell directly to, let's say, a Kroger in non-alcohol. But the point is, if I'm just measuring my sales to them, that's a false sense of security. Because if it's not selling off of the shelf at a specific rate per day per slot, you're going to run into a dead end. Right. So the metric is called dollars per TDP or dollars per total point of distribution. And so I was talking to early beverage entrepreneurs
Starting point is 00:22:30 explaining like that is the metric. It tells you everything. If it's high, you can expand because people want things that are very productive on their shelves. If it's low, you need to focus on awareness and trial because people aren't buying enough of it. If you expand distribution, that metric will usually go down for a little bit and then it should come back up as people try it.
Starting point is 00:22:50 If it doesn't, maybe you expand it to the wrong area. Right. Without experience, you wouldn't know that's the one to pay attention to. That makes sense because you could expand too quick, right? For sure. And you can expand into the wrong channels that are very costly but also don't return that well right right so like um uh a channel that i'll talk about you know like the drug channel like walgreens and cvs is there are a lot of those stores yeah people aren't usually buying the most uh beverages at
Starting point is 00:23:17 those stores they might buy some and by category maybe they buy energy drinks more than they buy something else yeah the point is it's a, it depends, right? It depends on if you want to expand there, if you're looking just for more doors or if you're looking for highly productive doors. So you have to ask yourself that question because it's not cheap. Yeah. From a consumer point of view, me in a pharmacy, I'm not buying a healthy drink at a pharmacy. Right. Most likely. You're probably picking up your prescription or band-aids or whatever. I don't know. I'd rather buy that at Whole Foods or Sprouts. Just mentally, it makes more sense to me. Yeah. I think that's probably pretty common. Yeah. But that's a good point because people could get excited by like a huge purchase
Starting point is 00:23:50 order from like a Walgreens, see this many stores. Yeah. There's thousands of them. Right. And that's great. But if you're turning one bottle per store per week, I mean, is it really, you know, in a product like ours that's perishable, it may spoil there right so has that ever happened to you uh occasionally not very often when it our product moves pretty quickly when it has spoiled it's usually been from abuse and what i mean by that is like um you know if it gets left out if it comes off the truck and it sits out for a couple hours it gets warm like it can't it's like milk it can't sit out yeah so it's usually spoiled out that way not because it hasn't sold through i'm like there are occasions i was watching you on another interview. You got your frat got kicked
Starting point is 00:24:28 off campus when you were in college. Yeah, it did. It did. Yeah. We were, uh, our fraternity was called Kappa Sigma at Ohio state. And, um, we had this legendary party on campus before I was there. It was called reggae fast and they used to pull up beer trucks in the driveway and sell, you know, keg beer. And, um, it was just, it was wild. Right. And then it got too wild and it got banned from campus. Well, we decided to bring it back. And our fraternity was pretty wild anyways. I guess it's probably no surprise that two of the founders of Four Loko were from that fraternity. But we decided to bring back Reggae Fest. And there were a couple of rules. And one was we couldn't have alcohol. And there were some other things. We brought in Ziggy Marley. We had, do you know OAR?
Starting point is 00:25:11 OAR, no. They're a band that played a lot in the Midwest. And so we had them come. They've gotten really famous at the time. They played, I think, for free. Wow. But it was a huge event. And we weren't supposed to have any alcohol.
Starting point is 00:25:23 And it just so happened that at that time, there was a reporter from Rolling Stone on campus and he was reporting on hazing in sororities. And it was Greek week. And so he was following all these sororities around. He heard about our party. He came to the house. Somebody decided to show him around.
Starting point is 00:25:39 No one knew who he was. And he took him to all the wrong places. He took him to the green room where there was alcohol. He took him to the house next door that sold all the drugs he got hammered throughout the day and made some really offhanded comments and that got published in rolling stone oh my god i put i put it i wrote wrote a book i put it in the book about it um and it was pretty it's pretty wild so that was like the first kind of uh thing that got us going the second thing that essentially really got us kicked off as thing that essentially really got us kicked off is they they entered our house during hell week and they saw some oh they saw some who
Starting point is 00:26:09 did hazy going uh people from nationals uh capesic nationals so so the way fraternities work is there's a national chapter there's like a headquarter somewhere and then each campus has a is like a local chapter so the nationals had come in because they saw us in rolling stone and then they saw us in hell week and but the nationals know about in because they saw us in rolling stone and then they saw us in hell week and but the nationals know about the hazing i mean that's yeah everybody tries to turn a blind eye but i think these things go through cycles right so they're like look we got kicked off and then a couple years later they brought people back and it was a very different mentality our fraternity was like the hard partying a lot of of fun, athletic guys. When they brought the fraternity back later,
Starting point is 00:26:46 it was more like a business philanthropic, you know, so it changes over time. Yeah. I went to Kappa Sigma parties at Rutgers. Oh, nice. I think they got banned for like a year or two. Exactly. Right. And then, you know, it happens. Somebody else got banned two years after us. But overall you think fraternity was a good move for you?
Starting point is 00:27:01 It was, I mean, I, Ohio State's huge, right? So I thought it was nice, a i um ohio state's huge right so i thought it was nice a nice way to get like a core group of people that you got to know really well i liked the rituals that you went through of like of having to know everything about your fraternity brother like like i know the guy's first middle last name i know his family i know his brothers and sisters names i know you know and you had to do that as part of the initiation there's like 100 guys in the fraternity yeah and you had to do that as part of the initiation. There's like a hundred guys in the fraternity. Yeah. And you get tested on it. That's the only way you go through. And so I think it's pretty cool that you get to know people that way,
Starting point is 00:27:31 especially at a young age. Cause at least for me, it was like, you know, it was very surface level a lot of times. So did you make it all the way through college all four years? Yeah. I ended up five years. I went to Miami, Miami of Ohio, my freshman year. And, um, and I thought I five years. I went to Miami of Ohio my freshman year. And I thought I hated it. I did really well. But I thought I hated school. And I realized what I hated was I was homesick. It was the first time I was ever away from home. And so long story of kind of a crazy upbringing.
Starting point is 00:27:59 But I transferred to Ohio State, quickly found out I couldn't stay at Ohio State because my money was taken by my mom, who was struggling with addiction at that time. So I had no money to pay for college. So I went back to Youngstown, which is where I'm from, Youngstown, Ohio. Lived with my aunt, started working in construction and selling cars and all these things and realized that that wasn't for me. I needed to go back to school. I always got good grades and went back to Youngstown state for a quarter and then transferred to Ohio state permanently and did my four years there. But what ultimately ended up
Starting point is 00:28:30 being five years. Wow. What a story. And all that's in your book. Yeah. Yeah. So it's, it's very candid. It, uh, I share everything about who I am, how I grew up, uh, for loco, uh, business wins, you know, setbacks, uh, Koya and kind of how I approach life now. I love it. Where can people find the book? It's on Amazon and, uh, and Barnes and Nobles. Awesome. Anything else you want to promote, man? Uh, no, just check out, check out Amazon, check out our new Koya. Um, look at drink Koya.com. I've got the book and that's it. Cool. It's a great drink guys. Definitely check it out. Thanks for coming on. Yeah. Thanks for watching watching see you guys tomorrow

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