There’s never been a better time, or a more dangerous time to be an investor in a beverage start-up!

Early in our careers, we helped companies like The Coca-Cola Company, PepsiCo, Kraft Foods, Anheuser-Busch, Safeway and our other clients create new brands, clever marketing programs and highly-effective promotional ideas to gain shelf space, new customers, and market share.

We quit our jobs, told our wives not to worry, and then set out to launch our own brands, working our butts off, and putting our own money and life savings at risk in the process. Soon, our products were being consumed by consumers across America. Distributors and retailers welcomed us on to their trucks and store shelves coast-to-coast, even as we refused to pay slotting fees. We raised nearly $30 million from investors to help those businesses grow.

All that money is gone now. But the lessons learned remain entrepreneurial DNA. We consider every cent of that money (most of which wasn’t our own to begin with) to be our “tuition” to the hard knocks school of beverage industry knowledge. Our investors, have an entirely different phrase to describe those dollars: “Total write off”. You and your brand can benefit from what we have learned. Plus, we now own a collection of healthy, better-for-you beverage brands that have been consumer and market tested, and have survived attacks by some of the world’s largest beverage companies.

Whatever you choose to call this investment of dollars and time we put into developing these brands, a lot of expensive – and now very helpful — lessons were learned about what works and what doesn’t work in the ready-to-drink beverage business. You should pick up the phone and call us.

Now. the multiple, multi-year and multi-million dollar legal assaults against our brand, from PepsiCo and Gatorade, and later from The Coca-Cola Company as it relentlessly attacked our VOLT® trademark in Federal Court, trying (and failing) to cancel it and strangle our start-up while it was still in the cradle, we have survived these multi-million dollar legal assaults by these industry Goliaths. In the process, we had our Intellectual Property rights, validated by the courts and grow stronger and more valuable in the process. Defending our rights against these huge companies was not easy. They have deep pockets and an endless stream of lawyers. But, eventually, the jury ruled in our favor. We had just defeated the largest beverage company on the planet, but as our founder walked out of court he asked his lawyer “If we won, why do we all feel so bad?” Simple answer to that question, mate! We felt bad because after battling Coca-Cola in court for 3 years, we were flat broke and our business was in shambles! Coca-Cola had spent over $16 million dollars trying to kill our VOLT® trademark. They failed, just as PepsiCo and Gatorade’s earlier attacks had failed. We felt good because we stood up for our rights and won. But what next? Stay tuned. With the help of some well-known and much-liked former NFL players we are relaunching VOLT®, along with some other nifty brands we own.

Winners don’t quit and quitters don’t win!

In a lot of ways, new product development and launch in the beverage business is a lot like Las Vegas. The “house” (e.g. the large retailers that control shelf space) are both your partners, and then if you succeed, your competitors. Although social media and e-commerce delivery systems are changing this retailer-dependent scenario, no one has yet built a successful 10X exit for their investors that did not include strong consumer endorsement and significant retailer shelf presence.

For over 30 years we’ve been developing winning brands, formulations, market positioning, and market entry strategies for beverage companies large and small. We learned a lot and now we are learning even more!

When we do autopsies on the hundreds of beverage brands launched in the last two years that are now belly up and written off as misguided failures, we identified 3 reasons that new beverage brands fail.

First: Bad strategy. This reflects lack of focused trade and consumer research the absence of which leads a founder to trust his or her instincts. The enthusiasm and passion of that committed founder can eventually attract early-stage customers, distributors, and retailers, and also investors. Too bad. Because most of these passion-driven ventures fail. It’s a statistical fact, 92% of beverage products introduced in 2015 are no longer in the market.

Second: Not having a great CFO/COO and Bad branding. A strong CFO keeps his eye on the bottom line and helps the entrepreneurial founder realize his or her vision. (And, by ‘bad” branding we mean inefficient branding.) Explained in next blog.

Third: Bad luck. (e.g. Timing, product recalls, picking investors that don’t share your values and goals, etc.)

We’re happy to share with you our experience and knowledge at length, over a cold beer that you pay for, but if you want the sound bite advice, here goes:

“KNOW YOUR DATA.
TRUST YOUR GUT.”

While a handful of brands have cashed out big time (Bai, being the latest Unicorn example.) most died a slow death as the founder’s passion collided with the reality that fervor alone does not sustain and grow a brand long term. In fact, after the first 12 to 24 months, it interferes with progress.

So, if you have a promising start up that struggling to get to the next level, maybe we can help? Better yet, maybe we can combine our consumer and market tested brands with your infrastructure to build something amazing?

You’ll never know if you don’t call.

Owen Ryan
Founder
(646) 812-5109