“Bigger Than the Plant-Based Revolution”

Phillip: [00:00:14] Hello and welcome to Future Commerce, the podcast about cutting edge and next generation commerce. I'm Phillip.

Brian: [00:01:57] And I'm Brian. Today, we have a Seattle guest, Kevin Rutherford, CEO at Nuun Energy. Welcome to Future Commerce.

Kevin: [00:02:07] Yeah, thanks for having me. It's great to be here.

Brian: [00:02:09] We're happy to have you.

Phillip: [00:02:11] We haven't had someone with a legitimate podcast making the longest time. And not only that, the street cred you're bringing to this podcast is I guess we should offer you congratulations on a successful exit. You were just acquired by Nestlé Health Science. Congratulations.

Kevin: [00:02:30] Oh, gosh. Thank you. Yeah, it's a big milestone. Keynote: It's a milestone, not a finish line.

Brian: [00:02:36] Oh, yeah. I love that.

Kevin: [00:02:37] Yeah.

Brian: [00:02:38] Well, tell us a little bit about yourself. How did you get involved in Nuun? What's your background? Tell us all about what you've got going on.

Kevin: [00:02:49] For sure. Well, I guess I should start with say this is every Canadian wants you to know they're Canadian. So I am that. So we put the Canada flag on our backpack, as a lot of people have seen over time. Two, any plant based or vegan person wants you to know they're that. I'm also that. And then every Crossfit-er wants you to know they're a Crossfit-er, which I'm not strong enough to be that. So there is a little about me, if that gives you any context. Yeah, no, it's been quite the journey. I started at Nuun, it'll be eight years this Fall and gosh what a journey it's been. My career has really been focused on marketing through CPG companies like SC Johnson (A Family Company)...

Brian: [00:03:41] {laughter}

Phillip: [00:03:41] {laughter}

Kevin: [00:03:41] Miller Brewing Company. I like to say my first all natural product company, you know, Kashi, if you're familiar with that one. We dream of a world where everyone embraces natural health, which was the mission statement and life changing. I never looked at business the same way since. That took me over to become a CEO for the first time, taking over for a founder for the Caldrea company, which is known as Mrs Myers Clean Day. And that was me post exit, by the way. So SC Johnson, A Family Company, acquired them. And they brought me back. So I must have done something right there. And so I did that for a few years. And then here I am at Nuun and this is oh, my gosh, what a journey. This coming up on eight years, it's just been amazing. I've never, I've never, ever experienced an energy, a magnetic energy like I've experienced with the culture of the team at Nuun. Never. It's unlike anything ever I've experienced. And I think that is the key to success of what happened.

Brian: [00:04:43] That's incredible.

Phillip: [00:04:45] I mean, it takes an exceptional team to build the sort of market momentum that you had in creating a brand new category out of nothing. And that is the thing that when you look at the incumbents, they're all ready to drink and ready to drink incumbents in the CPG space beverage is, I think for many years people would say was impenetrable. And shocker, it turns out with all of this recent investment in CPG beverage, maybe that's not so true as it once was, bundling and unbundling. It sounds like the big CPGs are waking up to the opportunity here. Why Nuun and why now? And how did you, how did this team, create a product that was so prolific that it sparked an entire category of copycats and challengers?

Kevin: [00:05:41] Well, that's a lot. There's a lot packed in there. So let's dissect...

Phillip: [00:05:45] Brian taught me how to ask a twenty five side question. Sorry

Brian: [00:05:48] Yeah. That was a Brian question.

Kevin: [00:05:53] It's so good. I love it. So it's worth noting that Nuun started sixteen and a half years ago and the founder, who's no longer involved in the business, but the vision back then actually and some of the DNA that was there still exists within the brand today. And it was really focused on, at the time, endurance athletes. In fact, not just endurance athletes, this product, this company was focused on Iron Man athletes. It was focused on adventure racers where people are basically doing orienteering and everything you can imagine for like three, four or five days straight. That's what Nuun was developed for. How do we give you the hydration to help power you through right where it's portable, convenient for these athletes because you're going for such a long time? So you need it both efficacy for your body, but also this portability and convenience. All of that actually still exists today. And one other thing I would say is the concept of it back then from a category perspective, probably was still getting formulated. But there was... This is the game changer, I think that's happening today as well, is the category is actually more planet friendly than traditional beverages. So meaning traditional beverages, so RTD, Ready to Drink is a massive, massive category, and it's not really that conducive when you think about use of energy resources in order to get it from manufacturer, if you will, to the consumer. You're basically shipping around water because it's premixed. And so what we want to do and where we've kind of evolved, as we said, listen, we want to have a live clean philosophy. Clean product, clean planet, and then we've led with something called clean sport. It's kind of even broadened since then, so it's leveling the playing field. I can get into it if you want, but that one led to more around clean movement, basically democratizing movement. Because our mission is all about empowering the world to move more because we think if you move more... So society... So we started with the athletes. We go to everyone. If you just move more, then we'll have a healthier society because we'll basically eradicate or drastically reduce the chronic preventable diseases that happen. What's one way to do that? Hydration. You've got to do that. And so hydration is a key catalyst for that. And seventy five percent of the population is chronically dehydrated, including athletes. So there was a lot of opportunity there. I will say this, and I'll just make a quick soundbite. Then please lead me wherever you want me to go on this one. Something happened in 2020 that made this trajectory go to a whole different level. And that's when the pandemic happened, people paused and thought about a few things differently. And this is the accelerant that kind of took off. It was already doing great and we were redefining it. But it was strong and steady as opposed to rocket ship. [00:09:02] And what happened was consumers were starting to think about preventative health. They were thinking about how do we strengthen my immune system? What's the role of hydration within there? Oh, gosh, I'm not on the go anymore, so is there another way, a better way to do it? So let's just drop a Nuun tablet in my water to get there as opposed to I need a Ready to Drink every time. So all of a sudden these live clean philosophy and value pillars that we have became even more relevant to more people than ever before. And that's what's happening. And that's not going to go backwards. That's the good news. Right? So this accelerant is kind of got this adoption. Now it's retention to keep educating and then keep pressing forward. And that's what we're finding right now as the country starts to open up more and more is nothing's slowing down. [00:09:47] Does that help?

Brian: [00:09:51] That's incredible, yeah. I think there's so many things to unpack from what you just said. First of all, I just love the sort of ethos around the brand. And what you've built is everything that we talk about on the show, and have for many years, about what it means to actually connect with customers, to do things in a way that actually benefits them and to remain true to who they are and a mission. And so I think that there's just first of all, I commend you for for what you've been able to accomplish. The second thing that gets me excited about is sort of the future of this industry. I believe you're absolutely right. We're not going back. Healthy habits that have started to be established or the thought processes that have been put in motion are potentially just getting started. And so as we look ahead to sort of what's next for beverage and really not just for beverage, but for health, for fitness, you know, and we look at some of the other movements that are happening in this industry, like the rise, the Peloton and its copycats or competitors.

Phillip: [00:11:22] We can say copycats. It's fine. You're allowed to say that.

Brian: [00:11:27] {laughter} And we look at the sort of, you know, I think the rise in outdoor activity in general was a huge uplift for brands like REI and for outdoor brands. What does this mean for like... I mean, I don't want to go too big here. But for the way that people think about their purchasing. What in consumers minds, moving forward, is going to be markers of product that they want to purchase as it relates to their enjoyment, their leisure, their everyday, their work, their health?

Kevin: [00:12:08] There's so much has changed, to your point. I love the topic that correlates with us, an adjacency of connected fitness, i.e. Peloton, as you mentioned. Think about Peloton and all the connected fitness world. Mirror is another great one. And they basically decentralized the whole system. They've changed the whole thing. You don't need to go to a gym. You can just do this at home. In fact, think about this. This is what actually gets me so excited about what's happening right now in health, wellness, and fitness due to digital and connectedness is all of a sudden now the model isn't about cradle to grave or sign up and hope you don't show up because we don't have enough room for you anyway for a gym membership. Now, it really is about the value is for every new member. It adds value to the community and to themselves because it's learning about you. And that is like I can't stop thinking about that. Quite honestly. We haven't tapped into that at Nuun as well as I think we could. I look at that future looking going that's where we need to figure out of how can we be part of that solution and how do we get there? There are some really interesting things happening when you think of connected fitness. We talked about how about connected health, and I'll lean a little bit more on the athlete side. But look at a couple of companies out there. Supersapiens is one and another competitor of theirs is, I think, called Levels, where they're measuring glucose for you every day. And then what are the data points that helps you take control of your health? That's crazy exciting. I bring that up because that's going to reinforce when you asked about purchase behavior and digital and how that's integrated into our life, which has already happened. But it's going to keep getting more integrated. But it's exciting. Like I think some people get freaked out by going, oh, my gosh, someone's watching over me. No, you literally can have more control of your health because you've got the information at your fingertips. It's so exciting. And so that's what I think is going to just reinforce the purchase behavior. And I think purchase behavior traditionally has been in bricks and mortar stores. By the way, I don't think brick and mortar stores are going away. We're seeing foot traffic come back, you know, slowly, but it's coming back. And I think people will want to go for an experience and education there, yet the idea of, you know, shopping online, pick up in-store or just getting it delivered straight to your home. It just won't go away. It's just easier than ever before. The friction point has been removed and why would we want to add a lot of friction back to our life on that one? And so we're all in on on both. We really do have a truly an omnichannel approach, which basically means online and in-store. Sometimes I find in the industry when you say omni, everyone just assumes that's digital. I'm like, no, actually, it means you're meeting the consumer where they are. And so it's in-store and online.

Brian: [00:15:14] The whole idea is so exciting to me because you're actually touching on a trend, and I didn't think we would actually go here of, like leveraging body monitoring to optimize purchasing behavior that could be personalized for you. And that's a trend that we've been following for a while, really since the beginning of Future Commerce. What I hear you saying is that now we're starting to actually have the toolset to capture new data points so that we can actually optimize for our personal bodies. Is that accurate?

Kevin: [00:15:52] No, exactly. Exactly. And so the tool... I'm not a technology expert, so I'll preface by just saying that. So like, OK, I'm going to go way out of my comfort zone, start talking about that. But what I would say is this is when you think about technology and the advancements that we've had with our phone, our smartphone. Incredible. Right? I think what we're also realizing, though, is there are some limitations with that. And it's sometimes, it's so powerful, it actually might be become an issue for people, and so now you've got wearable technology. I'm literally wearing a Whoop right now on my wrist as an example, because I'm obsessed, obsessed with trying to understand sleep performance. How did I sleep last night? What was the quality of my sleep? But yeah, you get this information. So wearable technology in different ways, whether it's a ring or on your wrist or whatever that might be, or a patch, and then getting the data and then making it really easy to understand, to say, so what now? Honestly, that's what we do in business, right? When we go and assess the business and you're looking in the rearview mirror, you go, OK, that's what I learned. So what now? What's the indicated action moving forward? And we're teaching as an industry, teaching people to understand that and take action. Again, that is really, really exciting when you think about preventative health to hopefully eliminate or drastically reduce a lot of chronic diseases that are out there. That's like that's crazy exciting. Who saw this coming?

Brian: [00:17:24] It is amazing.

Phillip: [00:17:25] That's kind of the incredible thing about this opportune time of how you can leverage now a a larger platform with a partnership with a company at the scale of Nestlé Health Science that can help you kind of hit some of those loftier goals or you can bring some of that ethos to other now sister brands within the portfolio. In full disclosure, you know, I work alongside one of those sister brands in a consulting capacity. And so I work with Nestlé Health Science to some degree and benefit from that. So this is great for me. I'm so excited about this. But aside from that, when I think about, OK, this is a perfect, it's like perfect timing around pandemic, renewed commitment to personal fitness, more connectedness than ever. I think about the things that brought you over a 16 year journey. And it's a thing that I tell one of those Nestlé Health Science sister brands, Garden of Life, all the time, which is you may not think of yourself as direct to consumer from the modern, you know, the modern incantation of whatever that means. It's not necessarily digitally native. It's that you're meeting customers where you are. For many years, I would walk into a Whole Foods and Garden of Life had sales reps on the floor demoing product and answering questions and spending time with customers. And that is a direct to consumer relationship. You happen to be in a place of retail, but you're there on the floor with the customer and you have a one to one interaction with them. The other brand that I have seen for a decade that does that is Nuun. And there's very few others. And I think that you're sort of a product of the time in which the company gained broad market traction is that it was always about that interaction and that close interaction and the incredible passion that small communities had formed around Nuun and the promise of the products of the brand. But none of that is possible if you don't have a stellar product. So I'd love to kind of talk a little about how product innovation powers a lot of this stuff. Because no one just wants to rebuy the same thing over and over if it's a crappy product. And I'd love to give you an opportunity to react to that, because I have more of that I'd love to ask, but do you think that that's true? Do you see that that holds true as being sort of a product of your time? And really the power here is the evolution to bring the brand forward into this current decade? And is that part of like what you're hoping to achieve with this acquisition?

Kevin: [00:20:16] Absolutely, if I could do it in one word, it would be absolutely and by the way, I also I was thinking, Phillip, as you were talking about, did you get our strategic plan?

Phillip: [00:20:28] {laughter}

Kevin: [00:20:28] Talking about how different communities have built and, you know, in-store and we triangulate around the consumer of in-store, on screen, in-person. The in-person kind of went away over the last year and a half. But that will come back. That will come back. Yeah. So when it comes to innovation and being a key catalyst to us getting to this place and then where we're going is absolutely a fundamental growth pillar for us here. Here's how we approach it. If I could simplify it down to this question that we ask ourselves. And if you think about it, when you think about how Nuun started. If you had this question in mind, if we had to start all over again in the category that you're addressing. How would we do it? And so when you look at it that way, you go well, so we'll use a traditional sports drink that we've been competing against that's Ready to Drink over many years that is so big that everyone knows what I'm talking about. The lightning bolt. So think about this, though, surely if we had to start all over again, we wouldn't actually create our business model solely or almost predominantly on this Ready to Drink of shipping around water everywhere when you think about a clean planet. Surely we wouldn't create a product that had artificial dyes and artificial ingredients within there in order to get the taste or whatever it is you're looking for. Surely we wouldn't put such sugars in there that actually becomes less of a hydration product, which I can talk about the science on that if you want, as opposed to a fuel product. There's a reason why you want to separate your hydrogen from your fuel. And so there is all these different things when you look at it. And so when Nuun launched, it was addressing a lot of those. It's also worth noting we've changed and evolved over time as well. So internally, when we think of our product, we have the original product, which we call 1.0 internally at Nuun. And then we went to an all natural product. I'll explain that, gosh, about six years ago, and that was 2.0. And then we went to 3.0, which is now where we've been for the last couple of years. The difference was this. So when it first launched, it was all about efficacy, performance and needed to taste good and all that great stuff. And so that product was launched and did really well. I came in, and I actually worked with the team and said, listen here, here's what we need to do as a team. Let's think about this. What's the change we're trying to make in the world? Like, let's back up for a minute, because remember, it's a team obsessed with athletes at the time and all about endurance athletes. And so I was trying to broaden the horizon to say, hey, if it's biathletes for everyone, what would that mean? Like what translates here? And so when we went through this process, we came up with this mission statement, our why, which correlates again to the innovation of listen if we are hydration that needs to empower the world to move more, what are some values in nutritional philosophy that we need to do that? I kind of had a predetermined thing that I wanted to do, quite honestly, when we got to 2.0. But I wanted to take the team through the journey so everyone buys into this together. I didn't know what the end result would be, but I knew where we ultimately wanted to get to. And so here's what we did, is we came up with this live clean philosophy and said, Live Clean: Clean Product, Clean Planet, Clean Sport. OK, let's dive in a clean product. Clean product means we need to have every ingredient has a purpose. And we went through all these different things and then it goes, OK, now my question for your team. What's inconsistent with that? What would we change in our current product? Remember, if we had to start all over again, now we're doing it again to ourselves. We go, oh, OK. Well, I guess we change the sweetener that we're using to go to something that's natural. We'd get rid of the preservative to find another way to be shelf stable as opposed to having an ingredient in there. Oh, we'd get rid of this lubricant and find a natural lubricant. Like all these things. Worth noting, here's the thing. Change is hard, and I am going to take you a little bit back in time. This was really hard, hard to get people to buy in because once you've got something in place and you get used to it, you're really afraid of change because you're going to ruin it is what people think. And so the story goes, the truth be told, when we talk to our partners outside contract manufacturer to build this, they told us it was impossible what we wanted to do. I'm not kidding you. Someone in the industry said, what are you doing? This is crazy like this, you can't go down there. We tried. It was a distant competitor to us, but I knew them in the industry. And so internally there was like, OK, trepidation, but no one's really saying anything until we got it figured out, then it was different. Here's the thing. It was still a tablet. Everything to the consumer mostly was the same, mostly, in form. But the positive was it was cleaner ingredients. The downside was we actually arguably went a little bit down in taste in terms of if you went blind label and the dissolved time went up a little bit and it was like, oh boy. So what do you do? Do you go? Or do you keep tinkering with this and working with it? We went. Let's go. And we launched 2.0 and away we went. So I do want to show this one little story with you, because what ended up happening is it's now in market and now we're getting some feedback. What did you do to my Nuun? What's going on? Of the raving fan base. By the way, We brought in a whole new set of consumers, ie: think the natural channel shopper that was like, "I love this product," because they didn't know it before. It wasn't there. So all of a sudden you've introduced yourself to a new consumer and now how do you bring your raving fans along? And so you help them understand the philosophy of why we changed and why we've evolved is probably the better way of putting it to improve. And I remember this call. This moment. So if Jeff Dean, our Head of Operations in R&D, is listening at this point, he'll chuckle at this. And I was on the phone with him and I said, "Jeff, we need to get three points going." He goes, "Kevin, we just, like, literally hit the market." I go, "I know, I know. We need to get the taste improved. We need to get the dissolve time down. We need to get now a better sourcing of ingredients. Now we're all natural. Now, how do we get cleaner ingredients?" Ie: non-GMO project certified is where we went. I think those were the big three. Taste, dissolve time, and sourcing of ingredients. And then Jeff's like, "You got to pick one, like we can't do all. Like what one do you want?" And I said "Yes." And so away they went and they totally achieved it. Honestly, I think he was right. Like prioritize it. Little did we know we actually achieved all of it. It's a faster dissolve time. It actually had statistically significant wins on taste across the board. We tested it. It's such an amazing story. But my point here is [00:27:07] innovation is renovation. It's innovation for new need states, which is, you know, we've launched our new energy product roughly a month ago, and then we're looking at new frontiers of where could we go next? [00:27:18] And so it's kind of three pillars to that.

Phillip: [00:31:08] How did that 3.0 set you up for category innovation? Because you were a single form factor for the longest time and known as one thing, and now Nuun can be known as a brand. I mean, not that you weren't a brand before, but a brand, a family of products that address all kinds of modalities of the same idea. It's powder is much more desirable in some cases. Tablets are very desirable in a lot of others. Like watching you expand the category has really been a fascinating journey. Did 3.0 set that up? Or how does that come about?

Kevin: [00:31:47] 3.0 definitely set it up. You know, big, big props to not just the team on development, but also then the marketing team. The marketing team basically did a whole package restage to set up a functional hydration system. And that's where we completely changed the whole category. So people were doing powders and different things. Right? But we came in and said, listen, the platform is Nuun Hydration. It's about optimal hydration that will unlock your body's best. That's ultimately what we're trying to deliver. And what we needed to do was set up saying, listen if... It comes back to the problem we're trying to solve and this is where marketing team created this packaging architecture that speaks to the need states, that allows you to try many different products to help you. If I back up, here's the problem that they wanted to solve. So the problem was this. Seventy five percent of the population is chronically dehydrated. And the thing is, we all know we should drink more water. We all know it. Every one of us knows it. It's like universal. Yeah, I should drink more water then. You're almost hard on yourself. And there's three reasons, at least the way I distill it down, of why people don't do it. One, we hear from consumers water is boring. I don't want to drink water. It's like it's boring. Even more among women than men, by the way. And then two, on this one was, I call it a little bit of Sheriff Stomach. Again, probably more from insights from women. But it's like I'm full. I don't really want water right now. So then you avoid it. So the idea here is the first one, water is boring. Let's make it interesting. An effervescent tablet. Let's make it taste good. Two, in terms of Sheriff Stomach, let's make it count. This is where it leads to this functional need states that goes across energy, immunity, vitamin products, rest products, and of course, our sport electrolyte product, high electrolyte product. And then three, I forget to hydrate. So I think we're partially solving this one. That's the portability where we have ten tablets in a tube. You can take it with you wherever you go. So it's always with you, whether in the home or on the go. And so the format is really, really clever. And that's what we're trying to solve. So then this packaging architecture was there. Then I give big props to what's happening with our sales team and honestly, our retail partners. So if you go into whether it's a Fleet Feet, an REI, or call it a Target, the communication of Nuun in store, not just on packaging, but the system that we're creating for on shelf merchandizing is getting better and better because we're in sync. The sales team and their category management approach with retailers is in sync and helping the consumer understand, Oh, OK. So I just need to drink more water. That's what we're trying to do. And if I use a Bill Gates, right, he wanted a PC on every desk. That was his dream. Another Seattleite, I guess. Can we have a Nuun in every quarter or a Nuun in every other water? The point is, let's just get you to drink more water. And that's kind of where we're going again let's make it something you want to do versus you have to do. Let's make it count and let's make it like remove the friction points. That's where, by the way, connected fitness, connected health to me it feels like the future on that third one. I think we could figure that out. I don't have an answer here today, but that's what I'm thinking about. Does that answer it?

Brian: [00:35:12] Oh, yeah, yeah, and I think what I also hear you saying is that innovation inspires new channels as well, because not only are you sort of meeting the customers where they're at and finding ways to sort of overcome the challenges of the chronically dehydrated and overcoming Sheriff Stomach and, you know, and the sort of like, why don't I drink more guilt that's that's on all of us. But you're you're doing it, and so when you went from one out at 2.0, it was like, OK, now we can be in a new set of stores that we could have never been in before. Now we can address a new community that we could have never dressed before. True. And so  [00:36:06]innovation is not just better for your existing customer base, it unlocks entirely new sets of customers if you're doing it right. [00:36:15] Which is what I think you did. Let's tie this back to the recent acquisition, because I feel like, you know, Nestlé, as Phillip mentioned, Nestlé's got a long incredible history in this space and Garden of Life is a really great example of that. As you look to Nestlé and the acquisition, where do you sort of expect to see things accelerated by being a part of a multinational corporation like Nestlé?

Kevin: [00:37:05] I believe where we're going to accelerate really quickly is, and this may surprise some folks, but I think the one place where Nestlé is really, they've really bought into our live clean philosophy. It's really worth noting that they've bought into that, you know, everything around sustainability ESG initiatives. I believe that they are going to help us accelerate on that platform really quickly, which the reason I say that surprises people is that doesn't really speak to... Many folks may not think of that as accelerating growth on revenue. It actually will, because I think we're going to, it's going to further retain people because they're going to see the difference we want to make in the world. So think about this. Like, I'm just going to use this as an example. And by the way, I have not had this conversation in any depth with Nestlé because it's just brand new. So we're not at that stage yet to have that. But I could see this happening as going, "Do you have any learning?" which I know they do, "and maybe some resources internally where you've been discovering a different container for the tablets?" So can we evolve from the existing tube that we use today to be even more sustainable and basically, can we remove plastic entirely? Or what would that look like?

Phillip: [00:38:29] Yeah.

Kevin: [00:38:29] And then, you know, what can we do within our system? So I think sustainability is one of them. Two, I think global expansion. That one I know for sure. So if this is our mission around Live Clean: Clean Product, Clean Planet, Clean Sport, and it's working in the US and Canada, we are in different countries around the world. But our focus is those two, a Nestlé can allow us to take that mission and empower the world to be more like truly move this around the world. That will happen quickly. I think those are two like out of the gates scenarios. The other thing that's really fascinating to me, and so, Phillip, you talked about this one. So the other companies that they've acquired within Nestlé Health Sciences, we have a lot of shared values with Garden of Life, Vital Proteins. Persona is another personalized nutrition company here in Seattle. And so there is a lot of shared learning that we can do to help each other and learn from each other. I guess in some ways we probably compete with each other on the fringes, so that will happen as well. But in the grand scheme of things, it's there's not a lot of overlap. We have pretty distinct brand positioning. So I'm really yeah, I'm really excited about that as well. I think there's a little bit of like I don't know what I don't know, but I think we can share a lot and they can as well and it can accelerate. Those are the two areas though I think, I think change will happen really fast on those two. But there is a lot more too, if that makes any sense, which I can give you my thoughts there.

Phillip: [00:39:58] Is it sort of naïve to think that they could help you from like a distribution perspective? It seems like at the scale that Nuun has been over the last two or three years anyway, you've got distribution pretty well solved, at least in North America. Is there a benefit to global distribution that they bring from like a scale perspective or correct me if I'm wrong?

Kevin: [00:40:27] Well, I think you're right. So I think there's three things that I think about when I think about the power of working with Nestlé Health Sciences. One, I think the existing retailers, especially the larger retailers, where they have some deep relationships, we can work on visioning together at a whole different level that, you know, our brand just isn't big enough in the world of some of these retailers, use Target as an example. So I think we can really get to a higher level conversation of what are we trying to create beyond like let's add another SKU and how do we optimize this one? Can we add another flavor? Let's step back for a second. Like, what's the change we want to make and how do you want to evolve this category? I think Nestlé Health Sciences will allow us, give us the permission to have that conversation where we've had them sparingly. So I think this will help a ton. I think online, you know, they're really focused on a digital center of excellence. So I think we can bring a lot to the table on this one. Our team has, I think, got exceptional capabilities and I think we can share that. But I also think we can learn a lot from their very progressive Digital Center of Excellence group. And then three is global expansion. Without question. They're based out of Switzerland, first of all, so I guess I'm assuming they... I actually don't know this, but I'm assuming they over index in the EU alone. Granted, I believe, Nestlé, the parent company is the largest food CPG company on the planet. So, yeah, I think we'll have quick access to understanding how do we launch and scale this globally. There is no question. So those are the three things I think.

Brian: [00:42:17] Speaking of number two, digital excellence, I think you've got an incredible team, given that Ingrid Cordy is a big part of that. And so shout out to Ingrid. Thank you so much for getting us connected with Kevin.

Kevin: [00:42:31] Oh, yeah. I don't know if I have enough kind words in my vocabulary to describe Ingrid. What an addition to our team, she just made such big impact from capabilities and competencies, but just her overall energy. I'm so grateful that Ingrid's on our team and is a key leader for sure. She's so good.

Brian: [00:42:59] We agree.

Phillip: [00:42:59] We couldn't heap enough love on her. She's helped us, you know, really just the last couple of years, just coming alongside the show and helping give us a new perspective. I wanted to ask, Kevin, there's a whole series of questions I think that we could probably raise around you've effectively created this category. Nuun is the OG. You've created the category in hydration. And now we're seeing, I think, what would be a really charitable way of saying it, is like there's a lot of validation of the category you've created recently. A lot of venture money heading into the space. There's a lot of copycat brands. If I could be not charitable. You know, there's some that certainly have some scale and have copied the go to market. I think they are definitely going after the Crossfit-er type crowd. And then if you I mean, all it takes is like cruising through Instacart for a little bit to find, you know, seven or eight different folks, new brands, challenger brands, that have even sort of copied the form factor and the packaging. How do you I mean, certainly I think you could probably take the victory lap that, you know, an exit also solidifies the category and an exit that I think is undisclosed at the scale at this point. But the biggest name in the category maker just made an exit to a big CPG. I think others are going to look at that as massive validation and probably bring a lot more capital to this category. What do you think about all that? And does that sort of validate why you need to exist and that the pie is getting bigger for everybody so there's plenty of room? Or do you think that consumers are now going to have trouble differentiating from all the different players and all of their different various ethos and ideologies around why they should exist?

Kevin: [00:44:54] Yeah, such a great question. So I guess, yeah, it's maybe flattering to your point, putting a positive when a lot of new competitors come in and there is a lot of competitors. There's been a lot over the last couple of years coming into the space. And here's what I would say is over the years we've actually seen it's there's competitors that come in and then they leave and then they come in and then, you know, very few stick over time. And I say that because you see this across all categories, right? So there is something about a first mover advantage. And it's I think we have just that. So we are a category leader in the sports specialty stores. So your REIs, your run shops and bike shops. We're a category leader within the natural channel. So Whole Foods, Sprouts and those other really incredible natural retailers. And then when the conventional space, we're kind of surging in that space. So I think that's a really exciting spot where I think we're starting to establish as as a leader there as well. And then, of course, digital. And we're kind of at the front of the pack of that group as well. So we've got the presence, no question. Never underestimate anyone. So we wouldn't do that. By the way, I have this philosophy of I tend to think of our team as a sports team. And our arena is the the functional hydration space. And so, you know, we're always looking to compete. Yet we need to put our game plan together and just stay focused and keep pressing. We're not ignoring. We're watching. We're learning, we're observing, and we're adjusting. But keep focusing on our plan. And I think the good news is, for those that are trying to mimic what we're doing, it's probably worth noting, we're already working on 4.0. And, you know, we've got many other innovations in the pipeline. So the competitors are focused on where we are today. We're actually looking downstream of where we're going next and how do we do that. So in short, on that one, I guess I would say this is yes, there's competitors and some have stuck and a few will stick, but most won't. That's just business. They just won't. It won't be sustainable. So focus on what we're doing. And then this big leap forward with Nestlé Health Sciences, it's going to allow us to accelerate, like, truly. So validation for sure with the category for us as first mover advantage. In many cases, this is just going to allow us to accelerate. And that's I guess I'm not as you can sense, I'm not really concerned. I'm observing. Here's something worth noting that that I keep thinking about is there's functional hydration in validating this this category where there's a lot of competitors. Think about this, though, is what are we consuming to hydrate? And beverages is it is just so big. And if you think about the... If you can picture the physical store as opposed to eCommerce for a moment, which eCommerce probably has it more right, quite honestly. So in the physical store, there's so much space allocated to beverages, a lot of space, and rightfully so because it turns a lot of volume. That being said, as this continues to get traction, you're going to continue to see this expand. I believe this. I believe that this category so big, which is why I'm less worried about competitors coming in at this moment, because I think it's going to continue to expand that hydration, functional hydration, because it's a universal need is bigger than the plant based revolution that's happening within food. I truly believe that. I think what's happening is we will disrupt this overall beverages that people didn't think was possible. And it won't just be Nuun, it will be many brands. That's happening. It's just a better way. Again, I'm not suggesting it's going away. Just like the plant based revolution didn't eradicate dairy. It didn't eradicate meat. But it definitely is shifting. And think about one last [00:49:10] thing. Think about plant based milk alternatives, where it started. It was soy milk and a tetra pack in the center of a store. And eCommerce wasn't even really a factor then. Today, it's sold and surging within eCommerce, but also now positioned in the dairy case right beside the milk alternatives. And it just continues to surge. And so what I foresee happening is it's going to be looked at less as functional hydration as this is an alternative. It's going to be toe to toe, side by side with the way people look at beverages now versus it's "I have my beverages and then there's this functional hydration. I should do that sometimes." It's going to be basically a substitute, much like I think you're seeing in dairy alternatives and dairy itself. [00:50:00]

Brian: [00:50:02] Wow, I know we're coming up on time here. Just a couple of quick hits here before you take off, Kevin. Looking ahead to the next 18 months, what's one big challenge you're going to have to overcome? And what's one of your most interesting opportunities?

Kevin: [00:50:21] I would say, by the way, the one  big challenge we need to overcome right now at this moment, I believe, is how do we keep the stoke and drive the stoke in our culture? Here's the thing. So if I could quote one of my favorite business consultants out there, and he's the Red Bull of business consultants, Tom Peters. Tom Peters might be 78 now with the energy of a 28 year old. And so he said this. "We're in the business of serving people, people serving people, serving people." I use this all the time, all the time. And I have to give credit where credit's due. So I don't want to plagiarize. But I love that comment. And here's the thing. The pandemic to me has really made it challenging to have a deep connection as a team. And I'm now that I'm through this with the team, went through this process, coming out the other side of it and now joining forces with Nestlé Health Sciences, now my energy has come right back where my passion is about team culture. And I honestly think that's the biggest challenge. And it's not like we've deviated. I just think it was the most powerful, sustainable competitive advantage that we have. And I'm like, I want to like, inject that, bring that back, bring that fire to a whole different level. So that's honestly, I think it's the biggest opportunity and challenge. And the pandemic is definitely a factor on that one. I think the opportunity, by the way, here is this. So we've launched energy. We've got different innovations. I think the biggest opportunity is how do we really grow our awareness to a whole different level and get that to stick? If we can grow our awareness both around the brand and the category and help people understand it, that's where I talk about that transition that happened within dairy alternatives for the category. This is where I think we'll change beverages. It is the biggest opportunity in front of us because the the education awareness is still relatively low. Growing, validated. Yes. Now it's time to accelerate that. And I think we need to be the catalyst for that.

Phillip: [00:52:34] Oh, shoot, man, Kevin, we're going to have to have you back some time because that went way too quick. Thank you so much for sharing. What a pleasure to have you on. And thank you for opening up on the show, and congratulations on all your success.

Kevin: [00:52:50] Oh, gosh, thanks for having me on the show. I love listening to your podcast. My team knows I'm addicted to podcasts. Ingrid introduced me to you, and I started listening. And I just get a lot of nuggets and insights. And I really appreciate both of you and your teams. So thank you.

Phillip: [00:53:07] Thank you, Kevin. And thank you for listening to Future Commerce. Hey, you can find other episodes of this podcast at FutureCommerce.fm, and check out our newest report, which just dropped by the time you're listening to this. It's called Service Is The New Storefront. And we believe that you can create new, meaningful friction, good friction with your customer and engender a lifelong relationship with them by driving them to CX. You can find more out about that at FutureCommerce.fm/ServiceIsTheNewStorefront. Thank you for listening to Future Commerce. And we'll see you next time.

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