Transcript of How Honey, Hustle, and Hard Lessons Built a $10M Brand | Jack Espy

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What is it What about Honey? Because it seems like everything you do is Honey-related. And obviously, you've tapped into a differentiator in the various beverage brands that you have that we're going to talk about. And I want to dig into them and really talk about your entrepreneurial journey. But what was it about Honey as a sweetener that you decided to really leverage it as much as you have as a differentiator in your brand?

Totally. Yeah, I mean, I get that question a lot. It's funny because I've always loved Honey ever since I was a little kid. From putting it into... I mean, even today, I wake up, I don't know if you've ever tried this, but Honey and Coffee. That's my main sweetener. Then I put it on steak. I mean, I pretty much only eat meat and fruit, and I put honey on steak. I put it on everything. And how it all started was, it was in the middle of the pandemic, and the job that I just had out of college, I ended up losing it, which was in real estate finance. What do I do at this time? Like everybody else, I was at home mixing up one too many quarantine cocktails. One night, I was mixing my two favorite drinks at the time, which are Moscow Mules and Mexican Mules. I was making these drinks with my friends, and they were like, damn, Jack, these drinks are really good. You should can them. Little did I know. I didn't know anything about business. I knew nothing about starting a company or like that. Naive Me was like, Why not take a stab at this?

We're all thinking about different names for this new brand that I was going to create. I was like, Well, what about the name mint B? They all go, Dude, that is the stupidest name I've ever heard of, but why mint B? And I was like, Well, because there's mint and a Moscow mule and B because Moscow meals and Mexican meals are sweetened with honey. They're like, what are you talking about, dude? So little did I know I was making these drinks wrong. But because I have that honey addiction, I was just happening to sweeten my Moscow meals and Mexican meals with honey, not even knowing that that wasn't even an ingredient. And then to your question, that's when the light bulb went off my head and I was like, Well, what if I took a different approach to this whole industry? Instead of sweetening these drinks with synthetic sugars like Aspartame, Sucralose, et cetera, even like, I don't like the taste of Stevia, and I know a lot of people also don't like that taste. I was like, Well, what if I sweeten it with the world's first natural sweetener, which is honey, and it tastes amazing.

So that's how I started Spirited Hive and also ended up sweetening the brand with honey. And then also my other brands, Strive Soda sweetened that brand with honey as well.

And Spirited Hive was first, correct?

That was first, yeah. So that was my first point at creating a brand. I started with that brand and built that up, and that started in 2020. Got that to market in May of 2022. It took about two years to get it on the shelf. Built that brand as a Tennessee, so a Nashville-based brand. One thing that's always been a pillar in my life is health and fitness. I always wanted to create a better for you beverage within the soda category because As I was building this brand, I saw the same thing happening in multiple other beverage spaces. A lot of better for you, which was all about calories and low sugar or no sugar. For me, I was like, Well, that doesn't mean it's better for you. Just because it has zero calories and zero sugar doesn't mean it's good for you. It means you're ingesting different ingredients and synthetic ingredients, which I don't want to have in my body. That's why I started to strive soda, which was a better for you soda that was using Honey as a sweetener and also eating in hydration as well, because we walk around dehydrated every single day without even knowing it.

So why not have a great tasting soda that also hydrates you throughout the day?

So talk to me about those first two years, because that seems like you got to have a lot of faith building a brand for two years before you actually put it out into market and actually try to make any money on it. So what were those first two years like in getting this thing off the ground? It was a lot of...

At the time, I thought it was a lot of failure because I was throwing all the spaghetti at the wall, nothing was sticking. I was trying to figure it out. I knew nothing about the beverage alcohol industry. I knew nothing about starting a brand. I knew nothing about being a founder. I knew nothing about being a leader, all these different things. It took a lot of time to get the product to where I wanted it to be because I didn't want to just release a product that had okay branding, had an Okay, product, tasting product. I wanted everything to be perfect, and it took a really long time to get there. But all these failures, which now I've framed my mind a little bit different to look at these failures as lessons, because all those the lessons that happened over those first two years, I wouldn't be where I am today if I hadn't made those mistakes or if I hadn't have learned those lessons. So first two years, I wouldn't change it for anything. I think it took a lot longer for us to get to market because I was trying to learn as I went and I had to make those mistakes and I had to learn those lessons.

So it took two years to get there where a lot of other founders who have been in this spot before may have been able to get a product to market in six months or a year. And realistically, it was more like two and a half years to get there. But again, going through all those pitfalls and speed bumps along the way got us to market in a way that the product was amazing. But also, too, I learned so much along the way, which I would have made those mistakes at some point, but I'm glad it happened early on rather than obviously now.

Now, when you got to Strive Soda, were you able to take those lessons learned building spirited Hive and get out to market faster?

A hundred Yeah, we turned that brand around a lot quicker. And still, we're still tweaking the product to this day. We released with one point of branding about a couple of months ago. We're already tweaking it to something, and we're probably going to tweak it again. And it's just always changing. But we got that to market much faster because I knew the blueprint. At least I created that blueprint that I was like, okay, cool. Let's do exactly what we did, subtract interacting all these pitfalls that I had to get this product to market a lot quicker, whereas before, the blueprint was nothing. I was like, I have no idea what I'm doing. I'm just trying to figure it out as I go.

What was one of the big obstacles with spiritedhive that you were able to step around with Strive?

I think the biggest thing was... That's a good question. I think the biggest pitfall for me was figuring out the steps that were involved from having an idea to creating an idea in your kitchen or creating a product in your kitchen, then producing that on a large scale and getting that to market to then get that on the shelf. I think for me, I saw that as one big hurdle, not all small little hurdles. And that's what I broke down in my brain was that's not one big hurdle. We had to break that into multiple steps, conquer each one of those steps to then get the end goal of getting it on the shelf. And once I broke that down, because now I knew how to get a product from an idea to having package design, having printed cans, and getting that product produced to then, Okay, now we have to get this in front of some distributors. Maybe we start selling it independently, which now we can do because it's not the beverage alcohol market. So that was a whole like, oh, my gosh, this is amazing. Now I can actually sell to Ryan if you had a convenience start like that, which we couldn't do with beverage alcohol.

So everything was definitely expedited a lot quicker in that process to And now people can actually have it on the shelf and purchase it a lot sooner rather than me trying to figure all that out with not knowing where to turn next. Once I completed one step, I was like, okay, now what do I do? I have no idea. So that definitely helped.

That makes a lot of sense. So I think one of the areas of entrepreneurship that I have not spent a lot of time is retail product creation. So versus, say, a tech startup or a professional services startup shop, et cetera, what are some of the unique characteristics of creating a retail product that you think most founders or entrepreneurs in that space... When I think about this, I'm like, I don't know. I've had a million ideas for something you make in your... Like you see, you make something in your kitchen, you come up, it tastes good, people tell you... I mean, people say that crap all the time, right? But you heard that and you turned it into something that we can now buy on shelves at stores. Where do you think most people start to go? It just feels like such a big leap. I don't know why, and maybe it's just because of the space that I'm in, coming up with an idea for a tech product or an app or something and getting it out into the market, it makes a lot It makes sense to me. But with a retail product, it seems so overwhelming.

There's so many cans and so many gas stations. How do you get that shelf space, which I know is really tough to get? It seems like this monumental effort to get a retail product on shelves and actually have it consistently be bought. So where were those places where you were able to get past that step, where most people get dashed across the rocks?

Yeah. I mean, the two biggest things in this industry is distribution of marketing. You have to get the product on the shelf, and then you have to leverage marketing to pull that product off the shelf. And I think a lot of the most wonderful time of the year to save with Rackuten.

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Terms and conditions apply. Brands, and I'll do a big full circle to answer your question is, a lot of these brands today that may have a successful product to getting it onto shelf, but may... Because a lot of these brands try to go big super quickly. They're like, Oh, we'd have this new beverage. We just raised $30 million, and now we're trying to go after all 50 states or all lower 48 states. That's great, and they may put up some really good revenue numbers for the first maybe 18 months. But the big thing is, is Just getting product on the shelf doesn't mean anything. When things actually come in and like, Oh, wow, that brand is actually doing well, is when they start to get repeat orders and their veloc are going up. And veloc, I mean, purchasing It's like points of purchase per store. If your veloc are two, three, four cases per store, okay, now you're doing well. But if you just try to cast a really wide net and try to leverage your points of distribution without your velocity, then your company is going to implode in a matter of no time.

We just saw that over the past couple of years. There's been a big restructuring within the beverage alcohol space, mainly within cans, because so many brands try to cheat the system and go after growth rather than profitability. We're taking a different approach at that. That's why we've been around for five years is because we're taking a slow approach where we're trying to grow market over market independently rather than cast a really wide net and go after multiple different states at one point in time. Because realistically, we're such a small company that we couldn't do that. I could have the ability to raise a ton of money and go after a bunch of states, but it wouldn't be done in a way that would make sense and grow because we want to own each market that we go into. Nashville, Tennessee, we're slowly starting to own that market. We've been in there for three years now, and it's taking that long. It takes a long time. To your point, it is daunting. I didn't know that. I was super naive to this industry before getting involved in it. Sometimes it's beautiful to be naive because if I knew all the headache and all the hoops to jump through, I wouldn't have gotten involved in this industry.

I would have done something else. But I think it's beautiful to be naive because I am doing and I love what I do. But to your point, in some states, it really is like you have to attack every point of distribution you have and you have to manage every point of distribution you It's a huge task and it's a huge undertaking to be able to grow a product that actually is a viable product over time. Those two things have to work hand in hand, distribution, getting product on shelf, and then marketing, being able to have good marketing techniques and campaigns, et cetera, to get that product pulled off the shelf, because then people are going to come back for more. I mean, that's the biggest thing is if your product tastes good enough, if you get them to buy it the first time from a campaign or great shelf placement or whatever that is, they'll keep coming back. But the thing you have to worry about is the other products that are coming to market because it's a fickle industry. Some people will be like, Oh, yeah, I love that high product, but did you see Surfside just came out and they have a new thing?

Let's go try that. And then it's always working against you.

So that's interesting. So the idea there would be you'd rather have a shelf in every store in a market than being in a couple of stores and a whole bunch of markets. And while it may look better on a scatterplot, at the end of the day, that density create... People are seeing it everywhere. They can't get away from it. Every gas station they walk in or every beverage store they walk in, et cetera, depending. That's the idea is be very dense in one market, and that's how you get traction?

Yeah. What we look for is whenever we're doing a general sales meeting or talking to distributors or sales reps or whatever it is, it's always we We don't want to be everywhere. We want to be in the stores that are actually going to sell our product. Because a lot of these brands go into these general sales meetings and they pitch like, okay, we're putting a sales incentive on X amount of pods, and pods are points of distribution. They're going to go out there and they're going to get all these pods. But of the, let's say, 200 pods they get, only 75 are good accounts that will actually keep your veloc up and keep selling your product. When I go in with my head of sales, we take the approach of, Hey, we want to go after your top A and B accounts. We will put a great incentive plan together for you guys to get those 75 accounts. Then we're not wasting money on the other 125 that maybe get a single purchase through, but then never reorder again. Then take that same mentality across multiple states that... Because we want to live within an ecosystem of around 8-12 states.

We're in six right now. We only want expand to 8-12 states because then the idea is to get acquired. If there's not enough meat on the bone for one of these beverage acquisition companies to come in and be like, Oh, wow, you're in 48 states, but your velocities are one case per store, they'll sniff through that immediately rather than, Oh, you're in 8-12 states. You're doing six cases per month in each one of your stores. That's a viable product, and there's enough meat on the bone for them to come in increase economies of scale, decrease cost of goods, put you through their whole distribution pipeline, and they can do that overnight, whereas I can't, obviously.

So that large beverage roll-up that organization has is obviously pulling in all the shared services into one. So they have, like you say, economies of scale. But then they also have a tried and true distribution model set up that they're requiring you to basically plug your brand, your product into this machine that they've built. And then that machine goes out and almost guarantees the distribution to a certain extent, as long as the product is good and maintains its quality. Is that the idea?

Pretty much, yeah. It depends on the beverage acquirers. There's the Big Five, which I love for them to come in at some point because then that is what they do. There's other ones that don't have that distribution or the cost of goods to lower that. But for the most part, the Big Five or six, like Constellation, Diageo, Gallo, those big brands, they can easily do that. Then also, two, I think something that is interesting is one big piece of the puzzle is if you're in all 48 states, these big partners work with certain distributors. So if you're signed with 48 distributors, and of those 48, they work with 22 of them, I'm like, Crap, now we're going to have to spend all this money of getting this brand out of these contracts to then sign with them in the states that make sense to us that we work with. That could be a no-go on a deal. There's all these different things that you have to work through and think about rather than, Oh, Rhode Island wants to bring us in. Let's go with Rhode Island. Before, three or four years ago, I was doing anything to get distribution.

I didn't care about velocity. I was like, It doesn't matter. Let's just get as much distribution as we can. I need to satisfy investors. I need to make sure that we're still going, going, going, and growing month over month. Whereas now I'm like, Okay, We got to think about this strategically. What states are actually going to do a good job for us? What distributors are going to do a good job for us? And how can we work together with these distributors to hit our veloc? And that comes down to us at the end of the day, not them. They It doesn't help us get there, but it's all about us working as a team to increase velocity, increase sales month over month. So now, since I'm learning so much more about this industry, I'm taking a different approach than I was three, four years ago.

Now, did you start the business with selling in mind, or was that something that as you started to get into it, started to understand the beverage marketplace as a whole, that you were like, look, we need to be thinking about how this is packaged up? Because a lot of the things that you're talking about, I don't know that a lot of people would think that far out ahead while they're in growth mode, right? A lot of people would just be like, grow, grow, grow, grow, we'll figure it out when that becomes a problem. But it's seemingly you are taking a very thoughtful and tactical path to set your business up to be as well positioned to be bought in the future as possible. Why that mentality versus just, as you've stated, growth at all costs, get revenue up, take every opportunity. Was that a mentor? Was that something you just came to? I feel like that's a fairly unique, especially this early in your career, that's a fairly unique perspective.

Definitely a I've talked to a bunch of people that I've met in the founder space within Beveridge, and their biggest piece of advice... And it was funny because the first time I heard it, I was like, What the fuck is this guy talking about? I was like, No, I'm going to grow as fast as I can. And then kept on hearing it from founder to founder to founder because it's not sustainable. And that's the thing. It's like, if you're in this space, the margins are too thin for you to grow that quickly without having to raise a ton of money year over year or a quarter over quarter or whatever it is where it's like, you can be digging that hole very, very quickly if you want to grow that quickly. So it's all about how quickly do you want to grow. Again, things have changed a bunch within this sector in the past, in its expedited, in the past three years. I mean, three years ago, we saw a bunch of brands get acquired because they were just chasing as many cases as they could get. It didn't matter what their veloc were. I mean, obviously, you still want to have good strong velocity, but they were going after pods.

It was just like, How many pods can we get? Let's grow this thing. A lot of these beverages acquirers were like, Oh, wow, look at these Let's eat as many of these up as we can. In the beginning, I was like, Let's chase growth. Let's go after growth as fast as we can. But the industry slowly started to change because it was like, this isn't going to be like that. It's almost like the craft beer boom back 15, 20 years ago. It's the same exact thing, whereas a lot of brands got ate up pretty quickly, and then it was like, Okay, wait, hold on. Now we need to see the viability of this, not only these brands, but the industry in general, the ready to drink can cocktail industry. Because you look at soda, the soda space is completely different than what I'm talking about with high. High is specifically beverage alcohol. It's changed. In those changes, that's when I've changed my strategy is, Let's Let's grow slow, let's grow smart, let's go a mile deep and an inch wide rather than the opposite, and let's see what happens. Let's keep going after these veloc and putting these small little goals in place with like, Hey, let's try to hit this velocity in Let's try to hit this velocity in this state.

Let's try to get this campaign off the ground. Let's keep doing this with the end goal of year over year, trying to get a certain case goal. Because case goals still matter to us, but it's like, How did you get there? Because... And sorry if I'm spending so much beverage knowledge.

No, this is great. Thank you.

But there's two ways to get to end revenue or end case goals. You have your points of distribution and your velocity. You can have a super high point of distribution with a low velocity gets you there, or you can have vice versa, or you can have both in the middle. And that's what we're going for, is both in the middle, balancing each other out to where it's showing that we have steady growth from a point of distribution standpoint, that we're going after more points of distribution with a good velocity with us. Because if a beverage acquirer saw that we were just going after points of distribution, they'd be like, no, I can smell through that. I know exactly what you're doing. But if it's too much the other way, it's like, okay, you're not growing quick enough. Like, Why aren't you growing faster? Why aren't you opening up new markets? Because they want to see both working in tandem. So I don't know if that answer your question.

No, I think that's phenomenal. And I think it translates to many other businesses. So my home industry is the insurance industry, specifically the property casualty industry. So home and auto, commercial insurance, stuff like that. And the exact same thing is true. It's slowing down a little, but 2020 to 2022 was a It's a huge M&A cycle for insurance agencies, very similar to what you're saying, right? There's these large roll-up organizations, and they're constantly looking for either new brands or new models to roll into this shared service model, et cetera. It's exactly what you're talking about. It's similar but different. There's a way to grow an insurance business, an insurance agency that is very attractive to rollups. And then there's another way of growing, which would be similar to your focus on point of distribution, where you have a bunch of scattered different policy types, different carriers that you've written with, like accounts that maybe only have one policy, et cetera, that show maybe, yeah, you're growing, maybe your top line number looks good. But managing this book of business on the back end is so much work and has so much a cost that you have a lower EBITDA, or your margins are lower, and now you're less attractive.

So what I love about what you're explaining in detail, and details are great, man, don't hesitate to go as deep as you want, is that The lesson here that I'm taking from what you're describing is you can be an early-stage entrepreneur. Inside of five years would still, I think, be considered early-stage, especially since you just launched three years ago with a spirited vive, was you can be early stage and be thinking about packaging and how you grow to be attractive to potential buyers at the same time. It doesn't have to be this chaotic, hell-bent on growth, nothing else matters. We'll figure all that problem out. That's one way to go. But it also seems like you may be exchanging early stage growth and maybe vanity metrics for some ticking time bombs in your business down the road. Is that what I'm hearing from you?

Totally. I mean, because for us, we have to stretch every single dollar we can. Because, again, we're still growing, which is amazing, and we're growing in the right direction, which is great. However, we're still a small brand, and I don't want to do any serious serious raises. If it makes sense in a couple of years where it's like, Okay, now to get that next step, we're really going to have to bring on Series A and really go after it, then we'll do it, whatever it takes. But we're trying to stretch every single dollar. We're trying to be as smart as we can on what we can do from not only altering current business on, hey, producing, what should we do? Should we continue to produce with this co-backer? Should we go somewhere else that allows us to free up some more cash, do smaller runs? Or do we increase our minimum order quantities with our distributors? All of that is thought through, whereas before I was just like, I don't know, whatever is the industry standard. I think it's okay to go against industry standard as long as it works for your brand on what you're trying to achieve.

Yeah, it's awesome. Now we're trying to leverage marketing as much as we can. Now, that was the biggest thing that took us only up until six months to a year ago to really figure out was so much of the industry and a lot of these brands think that once they bring a distributor and once the cases get on the shelf, their job's done. Now it's up to the distributor sell it through. It's like, no, you have to put all these campaigns out there. You have to get those three points where someone sees it three times for them to buy. And that is the hardest part by far. I mean, if people think that distribution is hard, yeah, distribution is hard. But getting people to buy your product is very hard because there's so many products out there. You go to a beverage. If you go to Total Wine, you look at the shelf, you'll be inundated with all these different brands. What do you choose? You choose the ones that you know. You go to High Noon because you've seen that. Go to Sun Cruise because you've seen it. Spirit of high, I've never heard of that.

Why would I buy that? So that's why we always have to be in front of the consumer from paid ads to marketing incentives, like campaigns on the shelf, like enter in to win a trip to Nashville or whatever that is, or events, activation is getting people to try it. That's somewhere where we've shifted our budget more towards marketing on helping us go through more product quicker and increase our velocities from a retail standpoint. In my head of sales, you talked about mentors. I brought on my head of sales about a year and a half ago, and he's changed everything because he's taught me so much on not only sales, but marketing as well, on how to leverage campaigns to not only get good shelf placement, but also to deplete product off the shelf. Like, you can kill two birds with one stone. So it's been awesome. That's the biggest thing for me with building this brand, not knowing anything about it on the way or starting it is, what can you learn from other people and who can you bring on that you put in the seats that really know what they're doing and can help you get to your end goal.

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The liquor store that I go to. So again, we'll talk spirited high before we talk strive, right? This is relatively new, last three to five years, but this can cocktail boom has been, like you said, similar to the craft beer boom. Now there's two entire... Jeez, they got to be 24-foot sections inside this place that are just nothing but four and twelve packs of canned cocktails. So as you think about spirited vive and how you separate, How do you start to craft that message? Why would I go with a spirit of high versus a surfside, versus a high noon, versus a lucky one that Dave Portnoy just came out with? If you're sitting next to those brands, what are the things that you're actually doing as a D2C brand to stand out? What is the marketing? How does the messaging work? How does the placement work on the shelves? Is it slipping the guy a fin on the side when he's stacking the shelves? Or how does all that actually work?

Totally. I mean, it was interesting because, and it's funny to think back on this, but when I first started this brand, I wanted to be the quote unquote, better for you can cocktail that's 100 % sweetened with organic wildflower honey. So that was our hook. Every single time was, We're the better for you can cocktail, 100% sweetened with honey. And it's stuck with us ever since. Because we're more of like, obviously our flavors are amazing and they're unique, but our big selling point is that we're utilizing a different sweetener to sweeten your product, to sweeten Our product that isn't synthetic, doesn't leave an aftertaste, and is a better for you product rather than all these other ones that I just listed. When I first went into my first multiple distributor meetings, even to this day, I get called out for it. They're like, Better for you? How is this brand better for you? Your calories aren't super low. Although our calories are relatively low, we're 7% ABV or around 160 calories. So nothing crazy crazy because we're especially at 7% ABV. I was like, Well, what's your definition of better for you? He was like, Well, I want to see zero sugar.

I want to see really low calories. I was like, Okay, cool. That's great. We're going from the standpoint of better for you ingredients rather than calories. It was like this for the first year. No one was really claiming better for you in that space because a lot of the people that drink alcohol don't care. But there is a segment of the market that's more of a white space of people who love health and fitness, just like myself and probably like you. I don't know if you drink, but for me, I love health and fitness, but Thursday night, I'll probably have a drink tonight with my family, or I have a high tonight, or I have a couple of hives the other weekend. To me, it's all about balance. And embracing the balance in your everyday life. So it took a long time for that to happen. And you've gotten a lot of pressure on that, which is great. I mean, some of it was negative in the beginning, but now it's turned to more positive. And now you look at the space, everyone is claiming better for you. Even products that have the worst ingredients ever are claiming better for you.

And it's on every packaging across most of the RTD category. So that was our big call out. But our main call out is that we're 100 % sweetened with honey. And from shelf placements, where we can tie people in is, one, they like to see that, two, in Tennessee, for us, our big selling point is we're a Tennessee, Nashville-based company. A lot of people, when they go to Nashville, whether they live there, they want to drink local, or if they're coming in, they want to experience Nashville. They want to go to Broadway. They want to do all these different things, but they want to embrace that honky-tonk vibe. This is one of our new merch lines we launched is Raison Hockey Tonk & Hive is our big thing that we're pushing. So they want to drink local. And it's always figuring out, okay, what is a cool campaign that we could do that can be at retail level, eye level, that someone sees that have never seen this product before that's like, I want to buy this. And one of the things that we did up in Michigan was we're in a bunch of Meyers up there, which is the major grocery store chain up there.

And one thing we did was the Rays on Honky Tonk and Hive campaign, which is win a trip to Nashville. So you entice the people to come in to see that, scan to enter in to win. And then, oh, I'm going to give this a trial. Let's see what this tastes like. And we really pride ourselves on that our products are so good that they're going to come back for a second time. But you still have to stay in front of them because it's not so much that your product isn't good enough. It's what other campaigns or these other brands running that will take their attention off of Hive onto a new brand. So you always have to stay in front of them. And I think to your point earlier, it's so daunting this space is you're totally right. And I didn't know any of this. It's always staying in front of the consumers 24/7. And it's so hard because you can lose an account like that if you take your eye off the ball. And there's so many different ways to get into that, from marketing to distribution, all those things. But it's like a dual product approach, distribution and marketing, to be able to stay on top of that.

Yeah. The placement piece to me is so interesting because there's another liquor store that I go to sometimes that's a little more convenient, but it's very small. And all of their products that would be in your category, they have one cooler, the very standard national brands, like a Surfside or a high Noon are in there. And then every other brand is stuffed in the bottom of the cooler or is The air is warm on the side of the cooler just sitting there. And I'm like, Man, if you walk in and you're just looking for a four-pack and you don't want beer, but you want something canned, maybe you just like the way you feel better the next day. If you have a vodka, tequila, or whatever instead, head of a beer, you're just going to take the cool four-pack that's sitting inside the fridge, even if it's not exactly what you came in for. And again, I apologize if these are too nerdy, but I'm just interested. I'm so interested in the business because I don't know that much about it. You get the distribution point, right? So the distributor, I'm assuming, says, Hey, tell me where I'm wrong in here.

Says, I have 20 locations. This is the average volume, whatever metrics they give you, right? So you go to that distributor and you say, Hey, We're willing to do this deal. We want to be in Michigan. How then does it cost you money? Is it the quality of the product? If you start hitting a certain amount of volume, do you then not have to pay for the placement? How do you actually get that distributor to make sure that your product is... It's like eye-level, center-cut is where you want to be or something, right? How do you make sure that your product actually gets seen by the people when they walk in the store?

So the super interesting thing about beverage alcohol industry is what you describe of trying to pay to get on the shelf is completely illegal. You can't do that. So that goes against tight house laws. And these laws are back from Prohibition. So it's super archaic. It's Super archaic. Where it's like, Stripe Soda. Because that's a San Diego-based brand. I was in a store, and he was like, I like this brand. It tastes good, but what's in it for me? What are you going to do for me? I was like, Well, we want this shelf placement. If I buy out this other product, can we get it on the shelf? He's like, Yeah, there's two cans left. I'm like, Okay, cool. Let's buy those two cans and we'll put it on the shelf. Then there's always something in it on that end. There's obviously gray area, obvious in the beverage alcohol industry. We always try to stay away from that because we truly leverage and we truly believe that our product is good enough to be able to withstand and go against these big guys, and it is. But the interesting thing is to answer your question on how you get it on the shelf, when we go into these distributor meetings and we pitch to these distributors on general sales meetings on We have a new product releasing in the spring, so we're getting our annual operating plan all ready to go to start pitching to all these distributors.

The big thing is, we come up with these campaigns, it's high of a clock. It's high of a clock all summer long. We want to do a giveaway or we want to have a big shelf display that calls out all these different things that makes us so much better, and it's an enter to win or whatever it is. That allows us to get the distributor to go out because we put an incentive behind it. Ryan, you're a distributor rep. If you go get 10 of those displays, we'll pay you 100 bucks for each display. That gives you your free to go hunt and get as many as you want. That will get us onto those campaigns. Well, one, it'll be attracted to distributors because they're like, Oh, wow, this is awesome. They've got their stuff together. Two, it gets the sales rep out there into the market to go start getting that onto the shelf. However they do that, that's up to them with their relationships that they have with these liquor stores and chains and all those things. Then three, what that does for us isn't even the campaign. It's more or less getting the product in front of the consumer, having things around it, bells and whistles, being like, Hey, draw your attention to here.

It's a big display versus, to your point, being on the side of the cooler sitting there. It's like, I don't know what that is. It what it does, it gives it credibility. It shows like, oh, wow, how did this brand get this when all these other brands are just sitting here on the side? And that's really hard to do as well because you have to stay in front of your distributor to be like, Hey, we've got these campaigns going. And that's what my head of sales and my head of marketing have taught me over the years and over the past couple of months is like, We always have to have a campaign in place because if you don't have something in place, then that shelf placement is going to go to a different campaign from a different company that's going to steal your spot. You always have to be staying in front of it because that will help with your velocities, too. Always having a big shelf placement. The The biggest thing for us is if you're not cold, you're not sold. And it's specific in this industry within beer and cane cocktails. You always have to be cold because no one wants to go in to go buy a warm four-pack because usually, they're buying that for later that day.

They had to crack one when they get home, yeah. Or in the car, depending on where you are located. Depending on where you are, you never know. I thought I'm advocating for that, friends. So can you sell, and I just don't know the laws here, could you sell If I wanted to go on your website, could I buy four packs and have you mail them to me? Is that legal?

Yes. So it depends on the state, and it's ever-changing. So that's really interesting. So we sell in Connecticut. And through Connecticut, you're allowed to ship out of Connecticut to most states. I think it's like 36 states, and that literally changes day to day. Some states get added, some get taken off. So since we have distribution and we have a really good, two actually really good distributors up there, we can sell out of Connecticut and ship to you. What state are you in? New York. Yeah. So we can send to New York. We actually used to distribute it in New York in liquor stores, but it's such a tough market because it's very pay to play where it's like, again, look at all this shelf space. What are you going to do for me? And we just didn't really get involved in that whole pay to play because I was like, I don't want to... If we're already starting business off on that foot, I don't really want to continue that. It's like a hostage situation. If I'm going to give in here, at what point does it end? So we're in a lot of states where...

And then you look at New York, which is only in liquor stores. Then you look at Tennessee, which is a franchise state. So it's only liquor stores, and you can only have two per liquor license. So let's say, Ryan, you owned a liquor store. That gives you the right, or you own liquor license, that gives you the right to have two stores. So now just think about that. We have to go then manage all of those stores with my reps. Florida is different. Michigan is different. Those are chain states. So chain states, we just got into publics liquors. So we had to make one presentation. And obviously, there's so much more than just one presentation. But we gave a really great presentation, and we are there to help our distributors sell through at Publix to be able to hear the velocities help them. But we got 370 stores from one pitch, and those get managed by our distributors. Same thing up in Michigan. Each state is very different. And then you have states that are Class C states or Class B states, which is where I'm at right now, South Carolina and Texas, where on-premise accounts, like bars and restaurants, have to buy through the liquor store, not through a distributor.

It all boils down to this idea that the United States is the United States, but at the end of the day, each state is pretty much its own country, not only from beverage, alcohol laws, but like gun laws, everything. Each state has its own laws. And that's what I've learned a I thought of is like... I never thought in a million years I would know like, oh, class B state. Yeah, yeah, yeah. Oh, franchise states. Oh, yeah. And then control states, which is the state actually buys the alcohol. So that's like New Hampshire. That's like North Carolina.

Those are the places with package stores, right? Don't they call... Most of the states call them package stores still?

Yeah, exactly. Yeah.

So because you can sell direct and you're also trying to constantly bring people back to buy more, are you doing direct, and I'm going to use the word community, but like community in the virtual sense? Are you pulling people into a newsletter, your social feeds? Are you doing online? Are you doing anything From a digital or content marketing standpoint, where you're drawing someone in who maybe buys a couple of four-racks in Michigan and sees on the packaging, they can get on some newslet. Do you have campaigns to draw them in to then You can stay in front of them digitally as well?

So lifestyle marketing with Hive is definitely a lot harder than it is for Strive, because Strive, for us, direct to consumers, huge. We're about to get Amazon up and running. We're about to get Walmart up and running, because this brand is a lot newer. We just launched three months ago. So we're starting to grow our direct to consumer, not only through our website, but also through Amazon, also through Walmart. And then we're still going after retail in San Diego because it's a San Diego-based brand. And we're trying to just take that same approach, grow small but still go after chains. We're not so much constricted by state laws, really, because we're free to hunt, really, wherever, but we still don't want to go too big too quickly. With that brand, we're trying to build this community not only through through email, SMS, but we're trying to build this community around the product. So trying to do a lot of events, trying to get people trying and really get it out there, which is a breath of fresh air because I could go do a little pop-up tent on the side of the street here in Charleston and sample my product.

If I did that with Hyve, I'd be arrested immediately. You can't do that. So there's things with this space that's much easier But also harder. And that's a lot that I'm learning most recently is that it's not apples to apples, it's apples to oranges. The beverage alcohol industry has much more constraints, but at the end of the day, is very supplier-focused to a certain extent, whereas the non-alk industry is much more like Wild West. But there's just a lot of complexities in it, too, that I'm We're slowly starting to learn as I go. Do I work with Kehian Unify? Do I go DSD, distributors? How do I do that? I'm getting all this knowledge as I go, and I'm still learning those lessons and making those failures as I go because it's new. It's something that's different than the beverage alcohol industry, which is super exciting. I'm very happy that I'm learning these as I go because we're still so small. We haven't even really got our feet underneath us yet on the Strive side. But trying to take as many lessons I've learned in high to bring that over to Strive so I don't make those mistakes again on this brand.

Have you done anything with influencer marketing? It seems like with D2C brands in general, influencer marketing can play a huge role. I mean, the right person puts your can down in the shot in a podcast or whatever, or or a set or on their Instagram or whatever. And now you can see massive lift. So have you dipped your toes into that space? And how does that work for you?

So with Strive, yes. So we're getting into that right now. We haven't done anything recently because I guess there's a couple of different things, a couple of different reasons why. We launched middle to end of August. So we've been in market September, October, for two months. Initially, when we launched, we weren't fully, realistically, we weren't fully sure how we were marketing the product because it's a new industry. We didn't know if we wanted to go full in on soda, if we wanted to go hydration, if we wanted to do a balance. Now we've realized that we are soda. That's how people drink our product. And hydration and honey are just additional benefits that come with having a great tasting soda. So now, since we know that, then we've been able to really fully update our website to really portray that. And now we're ready to bring people on because we didn't want to bring people on too early to where they could be messaging something that we didn't want them to message and that we weren't even sure about. So now we have this really good brand book that we're like, Okay, awesome. This is how people are drinking our product.

This is how they love to have it in their everyday life. Now let's have our influencers come on and start portraying that message, use that UGC whitelisting, all that stuff, get out there. So that's something that we're going to start doing in the next couple of months. On the Hype side, we had a kick ass influencer program that I ran for a little while, brought someone in to run it, and it was doing really, really well for a while. The thing that we didn't really realize is people don't really buy ready to drink cocktails online. It's something that it's just like... We didn't know until we actually tried it. And it was really fun building that program. We had some amazing influencers on there who really love the product and just really believed in it and believed in our mission. This whole idea of who's your hype, who's your community, who the people that you love to be around is your hype. It could be your close friends, your new friends, your old friends, work friends, really whatever. Or bringing this sense of community together and creating that hype. And that's what we really try to portray online through social, et cetera.

We did an amazing job doing it, but at the end of the day, we're in the business of making money. From a from a direct-to-consumer perspective, it just wasn't coming through. We were still doing great month-over-month from our sales perspective, but how much we were paying all these influencers versus how much we were making from this play from direct-to-consumer, it wasn't working. And the problem with that is, too, is, and to your point, with most of all these other industries, whatever marketing tactic you use, you pretty much have something that you can look at from a statistics standpoint and be like, Okay, We launched this marketing campaign and we received $100,000 in revenue from that marketing campaign. It's not as easy within consumer product goods because we don't know, let's say you're one of our influencers, Ryan, and we saw that you made on one post, you brought in two grand worth of revenue from direct consumer. But we have no idea of your followers who went out and bought that at retail level. So it's so hard to really judge that because you can look at it two ways. Like, is the idea for this campaign for influencers on the high side?

Is it all about revenue and that's it? Or is it getting the product out there, getting people seeing it? Because for a while, we were really going after health and wellness influencers, which again was seen as like, why are you doing that? But within that space, everyone knew Hive, which was amazing. Everyone knew it. And we do anticipate bringing that back at some point in time. But our main focus right now is getting our ambassador side of Strive and Hive up and running and then getting our UGC and whitelisting up and running for Strive to really test that out. Because, again, Strive Soda is so much more of a direct to consumer product than Hyve is. So we're going to hopefully see a much bigger uptick in revenue from launching that program than we would with Hyve.

So do you see your, and I'm assuming there's a parent business that sits over these two brands. Do you see yourself as like a... I'm going to take beverage as a whole, not just alcohol or none, but this beverage space as a whole. Do you see this as you're like a beverage brand incubator? This is something every couple of years, you'll bring a new product out? Or do you think between strive and high, if you have enough to do that it'll be more flavors and more variations inside of that? Or now that you have this roadmap, I guess, do you become almost like an incubator to be bringing new products out to market because you have now a template for doing it in a way that is successful and also is packaged up properly and et cetera. Do you see that as a potential path for you?

That would be a dream. I mean, honestly, like Honey Holdings owns both brands, which is a fun name. Yeah, that is a fun name. I would absolutely love to continue building brands. My bandwidth won't allow that. I mean, I'm already tapped out as it is juggling both of these brands. I think once it gets like, Hive is either acquired or is at a point where there's a new CEO running it or whatever it is at some point, my whole idea is to keep innovating and building brands. I think the reason I would have never built Strive if I didn't see that gap in the market where I was like, This is what I really like. I really want to create a better for you product. Is it a soda? Is it a hydration beverage? That's only sweetened with honey because no one's done that. I was like, Do I do it? Do I not? I was like, Screw it. There's no time like the present. If I'm in over my head, I'm in over my head. But to do that a third time, I just wouldn't be able to do that. I think one thing to your point, which we're already innovating, I've got an innovation call next week with my team on what are the new products we're releasing.

Like I said, we have a really exciting product that we're actually releasing with Hyve in the spring, which I'm super pumped about, which is very new. Do you know when this episode will be released?

A couple of weeks?

A couple of weeks? I mean, it's not really a secret. We're coming out with a T. All of our products are 7% ABV. We have three core products, which is our take on a Mexican mule. It's a ginger and lime-infused honey. We have our take on a Cosmo, which is our best seller. The girls are absolutely obsessed with that one. That's a cranberry and lime infused for our vodka. My favorite, which is our take on a Tom Collins. So that's a lemon and juniper barrier-infused honey for our gin. And all those are 7% ABV. Again, only sweet with honey. But we're releasing a new version, Which is a little bit different. It's going to be 4. 5 %. And again, that's because of all these beverage alcohol laws. Some states don't allow you to sell. So like Florida, for example, if you're 5. 9 and under, you can sell in grocery. So since we're at seven, we can only sell in liquor stores. So now we're going to be free to hunt at grocery stores and convenience stores, et cetera, in Florida. So this is a 4. 5. It's a spiked tea with a Vaca base sweetened with honey and a little bit of lemon.

And that, I don't know if you golf, Ryan, but perfect golf drink.

I was going to say it sounds like an amazing golf cocktail.

The whole plan that we're doing behind it is the Honey Hills Country Club. So we're doing all this merch that's going to be releasing around spring, early and throughout the summer. But it's promoting a perfect summer beverage. So super excited to release that. And then we've got some new innovation on the Strive side. We're going to be releasing two new flavors next spring, spring-summer. That's super exciting. And then there's ideas underneath Strive that may be not liquid form, which will be really cool. So we're working on some very exciting stuff on both brands.

That's awesome. Now, one last question for you. So you've taken the lead on, as you've mentioned a couple of times, better for you. And ultimately, I think even probably the bigger differentiator versus that language is the honey, sweeting with 100 % honey. Have you seen and/or how do you handle mimicry? I mean, I'm assuming someone has seen, Hey, these guys are seemingly differentiating and doing pretty well with this honey-only sweetening. Have you seen people start coming out to the market with a similar formula, a similar branding, or trying to be the honey sweetener play as well? Or do you guys still own that space? And when people do start mimicking you, how do you keep yourself separated?

I mean, it's a form of flattery always. If someone's trying to mimic you, you're doing something right, which is awesome. And yes, we've had a couple of brands in the past and present that have taken our same play from a sweetener form, but also to... I always look at it as the more the merrier, because then that's only educating more people, opening up that space to be bigger within the category. I mean, yes, we'll be able to have a smaller market share of that, but at least it's expanding it. Because if we're just one brand out there that's only sweet with honey as a soda that's hydration, people are like, Oh, cool. That's awesome. I love that drink. But if multiple brands are doing it, then it's like, Okay, that's expanding. Also, too, from a selfish perspective, I'm like, God, damn, I would love to be the only one in the space. Maybe with these other brands, we'll grow more. But also, too, my whole thing at the end of the day is I want people to have better for you products that are actually better for you. If that means there's more products that are coming to market, so be it.

I don't really care. We're seeing honey being used all over the place in new protein bars that it's like, Sweet with honey rather than sucralose, aspartame, all of that. For me, I'm like, Oh, heck, yeah, that's amazing. Let's keep that innovation going because it's leading in that direction. At the end of the day, I care about health, I care about fitness, I care about feeling my best, and I also care about other people feeling their best. The only way to do that is to have more products in the market for it to be more viable. On the Hive side, we've had multiple brands in the space that have been sweetened with honey, and I think it's totally fine. I think When it gets to the point where packaging is being copied and that stuff, that's when I'm like, Wait, hold on, let's figure this out here. That's always tough because you got to get lawyers involved in all those things. Obviously, try to avoid that as much as you can, but you're never going to be free of it. It's always going to happen. If you're doing something right, people are going to copy you.

And we've seen it at the high level. I don't know if you've been looking, but Anheuser-Busch has copied Was it Sun Cruiser or Surfside? They came out with a brand that looked identical to it.

Yeah, I saw something. I saw an article, a headline.

Yeah, so it's going to happen regardless. And that's the main point of flatter right there. When a massive brand is copying you or massive beverage conglomerate is copying you, then you know you're definitely doing something right, but you still have to protect your best interests at the end of the day.

Dude, I know there's a lot of people that health and wellness is important to them to listen to this show, and I know there's a lot of boosers as well. And people that are always looking for products like Strive Soda that they may enjoy their afternoon soda that they have. And jeez, if I can get rid of all the sweeteners and feel good about what I'm drinking, I think there's a lot of people that are going to be interested in what you're doing. If they want to get deeper into your world, learn more about the products, buy the products, see if they're in their area, et cetera, or see if they can have them ship to them, where should people go? How do they get deeper into both your world, like you, specifically, if you're doing anything or talking about this stuff online and/or the products themselves?

Totally, yes. So if you're interested in spiritedhive, just @spiritedhive on Instagram and spiritedhive. Com. We ship to around 37 different states 37, 36. So go on there. And then if you are in Michigan, Florida, Georgia, Tennessee, Texas, and Connecticut, we sell in liquor stores in all those states. And then on Strive, we're just getting kicked But if you guys live in San Diego, we sell in most of the convenience stores and grocery stores in that area. And then you can also buy us at strivesoda. Com. And then if you want to get in touch with me, I'm on social media a good amount. So if you want to shoot me a DM on any questions you have or founder questions or anything, it's @jackesby, ESPY.

Dude, appreciate the hell out of you. I really enjoyed the depth. I could have gone another hour with you here. I really love the depth that we got into in the business. I appreciate you taking the time and I think, nerding out because I think even if someone's not in the same business as you, I think a lot of the problems that you're approaching and how you're thinking about them, you're doing in the right way. And so much of getting better at what we do individually is learning from other spaces that aren't our own. So I love these episodes, especially when we go deep like this, and appreciate the hell out of you and your journey, man. Thanks so much.

Awesome. Well, Ryan, I really appreciate you having me on. It was a great conversation, and I love getting deep, too. I love educating people on an industry that I knew nothing about only so long ago, and it's just getting other people to know it. I mean, it's business advice, even if it's not, like you said, even if it's not in your industry. It's business advice at the end of the day or what you've learned, what you Lessons you've learned along the way. So I really appreciate you having me on. I've had a lot.

Yeah, no, I love it, man. And I think the other thing from your story that I think is really admirable is that, like you said, five years ago, you didn't know a single a thing about this space. And I think so many people have ideas, things they want to do, an entrepreneurial spirit inside them of something they may want to build. And we don't realize that while five years at the start feels like a long time, but five years in looking back to you probably feels like yesterday to a certain extent. So it's not as long a time to bring your dreams and turn them into something tangible that you're actually making money at and doing every day. And I think it's a wonderful story. So thank you so much, bud.

Of course. Yeah, Ryan, I'll leave you with this. I think one thing about a piece of advice, if I could give any potential entrepreneur, this is mainly for people who are scared to take that first step. I think I don't always want to look at my story, but my story is different to your point. I knew nothing about beverage alcohol industry. I knew nothing. My whole background was real estate finance, real estate development, to go work for someone else. So I had never I had a job. I knew nothing about business. I took that step. It doesn't matter if it's a well-calculated step or if it's a super messy step and you have no idea what you're doing. The biggest thing, and I know it sounds so cliché, is just taking that step but going full in. It will be super scary, but you'll learn it along the... If it means a lot to you, you'll learn everything you need to know about that industry, and you'll become a pro at it in no time. But you just have to take that first step to do it.

I love it, bro. I love it. Nothing but success to you. Appreciate the hell out of you.

Awesome. Well, thank you so much, Ryan.