Event Coverage

By BevNET Staff

BevNET Live Winter 2022 Recap: Adapt to Survive

After a year of upheaval and uncertainty, beverage brands and entrepreneurs must be more active, adaptable, and careful than ever before as they seek to reach consumers with their unique products. That theme permeated the presentations and discussions across drink categories during BevNET Live Winter 2022, held December 5-6 in Santa Monica, California.

At the start of 2022, the world was still emerging from two years of living with COVID-19, and still grappling with fears of more variants bringing new waves of infection. But after the invasion of Ukraine sparked a global inflation crisis and concerns over spiraling costs-of-living, beverage brands have new challenges to take on.

During the opening day’s first presentation, Janica Lane, managing director at Piper Sandler, cited the impact of a potential forthcoming recession as a chief macroeconomic stressor of food and beverage companies today. Within an interconnected economy, that has had knock-on effects on the stock market and companies’ ability to access growth financing. And while economic cycles are nothing new, Lane noted that “it feels like every year since 2020 has been more uncertain than before.”

“If you guys are looking at the sell-through data and looking at growth from pricing versus volume in almost every single category, it’s price and not volume that’s driving the growth,” she said.

Examining how pricing has influenced his brand’s recent gains, Sanzo founder and CEO Sandro Roco explained how his product has benefitted from intentionally starting from a higher price point ($2.49 per 12 oz. can). That decision was partly driven by margins, but also helped to stress test the brand’s potential.

“It was also a challenge to say hey, is this product, is the brand unique enough? Can we build a community around this that justifies that level of premium, so that we aren’t having to have these conversations that other brands may be having?”

Later, Fawn Weaver, the CEO of Uncle Nearest Premium Whiskey, discussed her personal and corporate mission to diversify and disrupt the primarily white, primarily male spirits industry.

Founded in 2017, Uncle Nearest is named for Nathan “Nearest” Green, the first Black American master whiskey distiller. The company is on track to report $100 million in revenue for 2022 and launched a $50 million venture fund in 2021 to support BIPOC and women-owned alcohol brands. So far, Uncle Nearest has invested in bitters producer Hella Cocktail Co. and The Equiano Rum Co., with a third investment expected to be announced in the near future, Weaver said on stage.

“When I look at the industry overall, there have been six spirit conglomerates that more than 90% of the volume – at least in our country – is controlled by,” Weaver said. “They are all white male founded, owned and most continued to be led, at least at the highest level they’re still led [by white men]. There has never been an opportunity for a spirit conglomerate to be built by someone who wasn’t a white male

– until now. I don’t have a whole lot of time to get that done in my lifetime, so I don’t have the flexibility or the luxury of not being this energized.”

As both a brand owner and an investor, Weaver said she’s not interested in quick exits and will likely never sell Uncle Nearest, having repeatedly turned down past offers from various suitors. Likewise, for her investments she has no requirement for brands to exit, preferring to instead nurture them into large independent companies with the potential to exist indefinitely (although, she clarified, she is not opposed to her portfolio brands selling should they choose to).

After much anticipation, BevNET Live Winter 2022’s mystery guest was revealed to be actress and Goop founder Gwyneth Paltrow, who sat down alongside Equitea cofounder Quentin Vennie to discuss the canned tea brand’s mission to make better-for-you products available to consumers of all backgrounds.

Vennie discussed founding the brand after his own yearslong health and wellness journey, which began after surviving a drug overdose and multiple suicide attempts. Vennie said he embraced exercise, clean eating and meditation, helping him to find a new balance in life. But it was when his son was diagnosed with ADHD at age 7 that Vennie said he set out to create Equitea in order to provide a natural aid to mental health struggles so his son wouldn’t one day experience the same crises he did.

“There’s no separation for me between self care and survival,” Vennie said. “As someone who lives with debilitating anxiety, someone who was struggling with a life-threatening addiction, showing up for myself better prepares me to show up every day for my family, for the people I love, for my business, and for those that I serve.”

Paltrow came on board Equitea as an investor while seek- ing to support minority-owned businesses during the Black Lives Matter protests in 2020. After connecting with Vennie through social media – “I believe I slid into his DMs,” Paltrow said — she is aiming to support the brand however she can, but is cautious not to overshadow Vennie or the brand with her celebrity name recognition.

“I think I’m just like, kind of a – I don’t know – fairy godmother in the corner,” Paltrow said. “Quentin is the most incredible founder, the brand is incredible, and for me it’s really just about Quentin being able to have a platform to tell his story. Watching the way he works and goes store by store, telling the story, I’m just in the reserves to kind of help out where needed.”

During the event’s Best Of Awards presentation, Liquid Death was recognized as Brand of the Year following a breakout 12 months which saw the company expand its distribution, secure growth capital, bring on new key partners and reveal its ambition to evolve into a bigger, broader beverage platform. Accepting the award on stage, Liquid Death founder and CEO Mike Cessario attributed much of the brand’s success to its team.

Also honored during the show was Seth Goldman, cofounder of Eat the Change and the driving force behind Just Ice Tea. Having watched his former brand Honest Tea get discontinued by Coca-Cola over the summer, the CPG veteran quickly assembled a new supply chain and route to market for his second foray into the tea category, going from concept to launch in a matter of months. That decision proved fortuitous for consumers seeking a lightly sweetened organic tea option, but also retailers and growers who had been blindsided by Coke’s decision.

NOSH Live Winter 2022 Recap

During the first day of NOSH Live Winter 2022, held December 1-2 in Santa Monica, California, Melissa Urban, founder and creator of elimination diet Whole30, opened the show with a sitdown discussion on building a brand through community.

Throughout the conversation, Urban emphasized the deliberate choices the Whole30 team made to create the cult following the nutritional philosophy has today, which enabled the platform to later extend into the world of CPG with a line of salad dressings. As an elimination style diet, she said followers often use Whole30 as a “self-experiment” with the understanding that it is not a diet intended to be a continuous part of their lifestyle. Even so, consumers keep coming back year after year. According to Urban, those who revisit Whole30 often do so because of the support of the community and the inclusivity that has been fostered by the brand’s leaders.

She also highlighted the importance of rhetoric when it comes to every aspect of copy associated with the brand. Citing an example from Whole30’s early days where the program labeled foods as compliant, she explained the word “compliance” gave a “militant” connotation leading the team to later adopt the phrase “Whole30 compatible” instead. The brand has made the conscious decision to be outspoken about topics that span beyond food, but impact the lives of many of its followers, which further helped develop a sense of community around the program. Urban explained that in taking an active stance on social media, the team knew it may lose portions of its audience but made the deliberate decision to do so anyway and it paid off.

Following Urban, Jared Stein, co-founder of Los Angeles-based private equity investment firm Monogram Capital Partners, spoke about capital efficiency, stating that it had not been a major factor for many investors until recent years. He said a business that has grown efficiently without taking on outside finds is alluring to many investors in today’s market, as it shows grit and a willingness to build a business no matter what.

Supply chains have now become a point of interest for investors when assessing a brand’s health and long term sustainability. Stein said in today’s market, an analysis of each piece of the puzzle that gets a product to market is required to assess the overall health of a business. This includes relationships with co-manufacturers which are increasingly being offered to join investors in fundraising rounds. Giving a co-manufacturer a financial stake in the business can help with a brand’s margins and help “whittle out” the toll rates that come with outsourced production. Meanwhile businesses that self-manufacture bring an added complexity when it comes to an investor assessment as these brands are often running two businesses under one roof. Many may want to see plans to diversify how the manufacturing business operates outside the brand itself, such as with private label products or offering comanufacturing for other businesses.

Day one of the event also featured a presentation from YouTube sensation-turned-entrepreneur Emma Chamberlain, who provided insight into how she turned a love of coffee that she developed “at an inappropriately young age” into a rapidly growing CPG brand that has a multitude of SKUs, ranging from whole bean coffee blends to flavored matcha. Chamberlain, who has amassed a social media audience of more than 35 million followers, emphasized during the discussion the importance of establishing a brand that could stand on its own. The 21-year-old said it was important for her that the specialty coffee brand’s audience didn’t just “see her face everywhere” when they visited its social media pages.

Additionally, Chamberlain stressed the importance of recognizing when you need help, especially in the situation of creators making their first foray into the CPG world. Last year, she brought on Christopher Gallant as CEO. Following Gallant’s appointment, Chamberlain Coffee raised a $7 million dollar funding round to fuel omnichannel business growth.

For the second day of NOSH Live, better-for-you foods made with functional or upcycled ingredients were a common theme as speakers on Friday brought up the importance of reaching consumers who are shopping for natural products that are good-foryou and good-for-the-world.

Frozen Greek yogurt maker Yasso’s CEO Craig Shiesley shared insights from a 30-year career helping build sustainably-grown CPG food businesses. His brand-building strategy follows a sixpoint plan: Brand Power, Loyal Consumer Base, Distribution Upside, Industry-Leading Margins, Growth Potential and Strong Fundamentals. Shiesley laid out Yasso’s progression to becoming a $240 million company in 2021. It followed a three-phase approach utilizing his brand building strategy, leading the brand to a place where it can utilize its margins to maximize growth potential through innovation and prove its strong fundamentals.

Ex-professional skateboarder and TV personality turned CPG investor Rob Dyrdek also took to the stage on day two to discuss how he balances his investment strategy with his life philosophy.

“The same way you do a five-year projection on the growth of your business, you should have the same design and focus in your life, so you will grow your business and your life together,” Dyrdek said. “When you find success in business, you find success in life.”

In 2016, Dyrdek launched his venture creation studio Dyrdek Machine, which has invested in 16 brands and exited six companies so far. The portfolio runs the gamut from apparel to wellness and beauty to food and beverage; the latter group includes Muertos Coffee Co., THC-infused beverage brand Leisuretown, Outstanding Foods and functional snack brand Mindright.

Outstanding Foods produces dairy-free, plant-based cheese ball snacks and Mindright makes nootropic-infused snack bars and chips that promote brain health. Even though Dyrdek regularly wakes up between 3:30 a.m. and 5 a.m., he cautioned entrepreneurs that maintaining energy and not “running on the edge” will provide more clarity to building a business. Many entrepreneurs can run into the problem where they fall in love with the idea of their product and assume that consumers will automatically love it too, he said. The key is doing the work to understand why a consumer will connect with and see value in a product.

Most important to Dyrdek’s investment strategy is connecting with the founder and finding products that have the highest probability of success. This starts with finding partners who are focused on a business’ fundamentals.

“Creating a business is the most exciting, incredible thing in the world – unless it doesn’t work,” he said. “Then it’s a nightmare. An ongoing, chaotic psychotic nightmare that you hang on to until you finally lose belief and give up.”