← Chew on This - Digestable DTC Content
Chew on This - Digestable DTC Content
The Next Billion Dollar Industry No One is Talking About...
00:46:35
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- [00:00]
Justin Tidwell
Once we went viral, we sold a million dollars of that product. We went from this is a cool idea and pet project to holy cow, this is a real business and we need to capitalize and move on this. The great thing about viral is that for $0, you're driving revenue and awareness to your brand, but it's sparing. Right? So it could be. One day you have two viral videos, the next month you have zero. Right. So then we really took a hard look at paid media and said, how can we have a strategy where nowadays is always on and where people are always seeing us?
- [00:32]
Host 1
Welcome back to another episode of Chew on this. Today we have Justin, who's founder CEO of Nowadays, which is a brand you've probably spotted around your grocery store or maybe you've seen online. But they're going up against the grain in a category that isn't easy to scale in. So, first of all, Justin, thank you so much for coming out all the way from the west coast. For the few viewers who maybe don't know about your brand, don't know about you, give them a little bit of history of you're also a serial entrepreneur. So maybe give us a little bit of that background. Then we can jump into what you've been building with nowadays the last couple years.
- [01:04]
Justin Tidwell
Perfect. Thanks for having me, guys. Really appreciate it. The setup is like first class. So it's been awesome for you guys to have me out. Yeah. My name is Justin Tidwell, co founder, CEO of Nowadays. We're the first ever nationally available THC infused spirit. So basically the easiest way to think about it is you take a tequila bottle, a vodka bottle, take the alcohol out, you put THC in, it gives consumers a nice buzz, but you don't have all the negative after effects, from a hangover to a tough night's sleep. We launched the product in March of 2023. Super limited funding. Just went to market, wanted to see what people thought of the product and had the benefit of going viral on TikTok. In our first 90 days, we did a million dollars in revenue. So it was kind of like, this is a fun pet project to. Wow, this is real. Really?
- [01:48]
Host 1
Wow, that's really cool.
- [01:50]
Host 2
90 days, first million.
- [01:51]
Host 1
Yeah. Crazy. Well, we've got our headline for the pod. You obviously started this. What seems like a. Maybe it was a passion whatnot. Did you know going into it how challenging it would be given the fact that you can't just set up an ad account and start running ads tomorrow? That first 90 days looks like you had a little bit of things hitting the right way, but had they not? And even just certain months where it's not hitting certain way, what are you kind of looking at and saying, hey, like, how do I go about marketing this?
- [02:25]
Justin Tidwell
So I think the saying ignorance is bliss is probably true, especially when you're starting a business. Because if we knew every single hurdle we'd have every single month over month, if we knew that all this started, it would have probably freaked us out and we would have never started. Right? So for us, it was really about diving in head first and believing in the product. My co founder and I, we were at that phase that I think a lot of people hit, which is basically, we've been drinking through college, late nights, partying. We were like, we just can't keep doing this. Like, we have jobs, we have responsibilities. And we pretty much were out there ourselves looking for an alternative product. Didn't see anything that checked the boxes of like, we could still have a good time, but without all the negative after effects. So that pretty much started him and I just going like, what if we could put cannabis into a drink? And it just started with that overall idea. And at that time it was like just about product development and nailing the product. It took us about 18 months to actually develop nowadays, because if you can imagine, if you've ever had cannabis before, smoked it or vaped whatever it may be, putting that weedy flavor into a drink, you could imagine it's not an easy thing to do. So that took us a good amount of time. And then once we nailed the product, we really launched from there. And our focus was appealing to consumers on platforms in the ways that we're able to. So we can't go on Instagram, can't go on Tick tock and say, try this cannabis drink, it's THC infused.
- [03:51]
Host 1
Right?
- [03:51]
Justin Tidwell
But what we can say is, are you looking for an alternative? Are you looking for something that gives you a buzz without the negative after effects? And we focus on the consumer benefits rather than the actual, like functional ingredients in the product. And that's kind of from the start. We kind of stumbled into that accidentally. And it's really been the pillar of our marketing ever since then. And it's helped us scale a lot on each of these platforms, for sure.
- [04:14]
Host 2
Wow, that's huge. So it sounded like kind of started first with like maybe an organic viral moment. Can you walk us through what that maybe piece of content maybe was? How did you guys kind of capture that demand and what did you guys do with it? Post kind of that viral moment, 100%.
- [04:33]
Justin Tidwell
So first thing was, is like we looked at our target demo and in our opinion, we felt that like any new cool product, it was always the girls that brought it to the party, if it was a new drink, if it was a new food, whatever it may be. So we kind of said like, we want our brand to lean like 60, 40 female male, and that was to kind of drive the female consumer to the product. So with that in our TikTok marketing, our Instagram marketing, it's more female led. And that first viral video, it's kind of the old saying, like short and sweet, right? So a girl was holding a, like a cocktail glass and basically just said like drinking without a hangover and like a nice viral tune on it. And we checked it, literally within 30 minutes it was already at 100k views and it just started to run. And I think the tip about that is like having viral content needs to be very quick to the consumer and intrigue their interests. And then from there you can drive them to your site, your landing pages and use that time to educate them, but you really need to grab them in that moment. So that was kind of like out of the gate what our focus was. And since then, like it's been a major focus of our marketing is like intriguing their interests, showing them it's different, and then driving them to education at that point.
- [05:44]
Host 2
So tactically, when that video started to pop off, were you guys just directing people? Like, oh, there's a link in bio. Like go shop now. Like, what was like, how did you, how did you just start getting orders?
- [05:59]
Justin Tidwell
Yeah. So we did our first production run. We made a thousand bottles, which in our world equates to about $80,000 in sales. So we had a million dollars in demand, 80 grand in product. That's worse than having no demand at all, to be honest, because you're looking wait. People want it but we can't give it to them. So we literally overnight had to pivot to a pre order model. So when that demand started coming in, we were like, we don't have the product. Like, we're going to have to shut this thing down and like not take orders. My co founder is like, let's just see if people are willing to wait like 90 days for their product. So we changed on our site, pre order, notified the customers quickly. And the thing that we saw and we realized was that like number one, people were willing to wait and they kind of understood our early story. Like we literally sent an email that was like, hey, we're a brand new business. We've been around a month. We'd love to send this to you, but we just can't. Like, are you willing to support us? And wait. And the cool thing was, I think consumers respect that transparency. So from there, basically, we held on to all those pre orders and we got with our manufacturing partner and said, like, hey, we know we said we're probably going to go from a thousand bottles this year to 2000 next year to the three, but we need you to produce 50,000 like now. And that guy, honestly, like, hats off to him. And I think it shows the early founders, like, if you sell people on your vision, you can get people behind you, because that person was a large vodka producer. And we went to them with this crazy idea of, like, just make this THC drink and let us know, like, like, just go on this ride with us. Let's see if it's something interesting. And now he's turned off all his production lines for vodka. He's only producing our product, um, and really been able to lean on that manufacturer. But I think we communicated with our customers and they're still around today. And I think that's the key is, like, you're not going to be perfect as a business, but communicate to your customers they're real people and they'll get it, you know?
- [07:49]
Host 2
Love that.
- [07:51]
Host 1
Walk me through. Kind of even just like, the product creation. Right. I know you guys have the cans now, too, and correct me if I'm wrong, the cans are newer.
- [08:00]
Justin Tidwell
Yeah. That's a launch in the last six months.
- [08:03]
Host 1
Yes. And so the bottle. Right. And I actually, I have a striking memory of this because it was very recent. We had a poker night at my house, and I was doing dry January, and I brought out that bottle because I was like, all right, this is what I'm going to have while everyone else was drinking. You know, it's. First of all, I think the looks I got was like, wait, what is this? This looks kind of like the same experience of a cosmigos bottle. Right. Or like the tequila bottles you're used to or a vodka bottle. And I think that part is really cool because, like, you're now, like, shifting people very little from what they probably want to be closest to, which is that experience are used to. So I'm curious, like, was that. Was that intentional? And have you guys had to, like, modify that? Did you guys work on that? I'm just curious on, like, how that product development and. And that design and branding kind of worked.
- [08:52]
Justin Tidwell
So going back to when we launched on social media, we knew that we had to appeal the subtle nuances to consumers. We also knew that the cannabis industry to date has done a really, really good job of selling products to people who want cannabis products. So, you know, 100 milligram edible, you know, a super high chocolate bar, whatever it may be. But for people like myself, I had actually and still haven't ever smoked a joint, haven't ever taken an edible, other than drink cannabis drinks at this point. So we created a product that felt like we could bring it to our grandparents house and say, hey, try this drink. And they would accept it and bring it in. So like, number one was like, it needs to feel like a mass market product. You'd see at Whole Foods, you'd see, you know, at a Target, because that's how we're going to tap into the 80% of the market that's never used a cannabis product before. And then second was now that it looks familiar, we kind of need it to look a little unfamiliar to intrigue your interest rates. Like, I think that's like, I love hearing that. Because our mindset behind the bottle was, let's have someone bring this to a party. They feel like it fits in on the bar cart, but they look over and they go, hey, what's that one over there? Like, why does that look a little different? Right? So like, we're trying nowadays to be in the mainstream but stand out a little bit. And like, that kind of goes into our marketing, our product development. So for us it was nailing the flavor. And then from there we said, okay, we have a delicious product. Like, people are going to reorder it because you could have the best marketing in the world, but if your product's not good, right. Going to get that first sale and be done. And then second, from there it was about designing a packaging that stood out. And we really looked at like every single liquor bottle. You could imagine the amount of total wines, Stu Leonard's, that I've walked down, examined, taking a picture of every single bottle. It's like actually a sickness at this point how much I've done it. And we really took the time to see, like, how can we stand out on the shelf? And that's what got us to our end product, which is that kind of beautiful frosted bottle that, that definitely stands out on the shelf.
- [10:51]
Host 1
Very cool.
- [10:52]
Justin Tidwell
That.
- [10:53]
Host 2
Okay, so went viral. Product is now placed, orders are shipping out. Yeah, take us through the next few steps of how you now kind of start to get into maybe some of the Paid channels or other channels. What ended up being like the distribution to getting in front of more customers.
- [11:11]
Justin Tidwell
Yeah. So once we went viral, we sold, you know, $1 million of that product. We went from this is a cool idea and pet project to holy cow, this is a real business and we need to capitalize and move on this. So from there we kind of had two mindsets. Number one was like, it can't just be Anthony and I in a laptop answering customer service emails, calling the co packers, you know, moving like trying to get everything done ourselves. So from there it was like bringing in a few core employees, like help us get some stability. And then from to the second piece of that was getting more of an evergreen strategy. Right. Because the great thing about buy is that for $0 you're driving revenue and awareness to your brand, but it's sparing. Right. So it could be one day you have two viral videos, the next month you have zero. Right. So then we really took a hard look at paid media and said, how can we have a strategy where nowadays is always on and where people are always seeing us? And we were able to utilize the strategy of really not speaking directly about our products, but letting consumers know, here's the product benefits you're going to get and driving them to our site and then diversifying platforms so that if you're having an issue with one, you can drive more to the other and kind of have a full circle approach. So once we had an evergreen strategy when it came to Direct to consumer and we had viral videos that would drive a ton of awareness, our second shift was, okay, we have data that people want these products because direct to consumer has proven that people want to buy them. We're able to then go to alcohol distributors and basically say, hey, we have data to support consumers want these products. The first couple, when it was early on, we were definitely laughed out of the room, like, well, you're telling me you want my 100 person sales team to sell weed bottles in a liquor store? Like get out of my office. So it was definitely a little bit of trial and error and appealing to our target market. But once we have a few distributors that believed in us, we proved the concept that consumers will buy these in liquor stores and in traditional outlets where other products are. But that's when our business started to really take off. Because we were available in stores, we were available online, we're always at front of mind for consumers. Incredible.
- [13:23]
Host 2
So with the, with the strategy of being kind of omnipresent.
- [13:27]
Justin Tidwell
Right.
- [13:27]
Host 2
So DTC retailers, where do you see the shift going to like, do you guys want to be primarily in retail and maybe use D2C to kind of fuel that fire? Maybe like a, like a break even and just try to, you know, drive awareness there or the other route which is maybe a subscription model for, for online. Because I know with, with beverage it's tough, right? Shipping costs are high, margins are amazing for dtc, but what's, what's the end goal for you guys?
- [13:56]
Justin Tidwell
So the beautiful thing about our direct to consumer business and why I always push founders to try to go the organic route as far as hard as it can be, is that it's allowed us to build a profitable base for our business. So we had a 500,000 person email list who subscribed from those viral TikTok videos. So we built a massive base of people that basically wanted to come to our site for free. That gave us the ability to utilize those profits that we got for free and then use it to scale the brand. So our D2C business is still first time profitable even with customer acquisition when it comes to paid and we've been able to use that as a base. But what we see in the beverage category is that people are still buying beverages in person. It's, it's the weirdest thing like I'm sure, sure you guys see with supplements like people will buy online but for some reason for beverages like your main driver of revenue is in person experiences. So we feel that D2C is like a short term way to scale very fast and that wholesale is a long term investment. So what we've done is we've essentially made a huge bet with our profits from direct to consumer to go build a distribution and wholesale business. So we're basically using profits today to build what we see as the future of the category. Wholesale, as I'm sure you guys know, is extremely, extremely expensive. You need sales reps, you have returns, you have, you know, rebates, the whole nine. So it's more of a long term place. So we have a sustainable approach to D2C with an investment approach when it comes to wholesale. And eventually I would estimate that like it's going to come closer to 50, 50 in the category when it comes to D2C and retail channels.
- [15:37]
Host 1
When you let's break down paid a little bit more, right? Can you maybe talk a little bit about the channels you're on? I don't know if you're testing things like Applovin or if it's just meta or if it's Snapchat. Some of some of the actual channel strategies that you're doing and if there's any cool tidbits that you have that that's working really well across those channels.
- [15:57]
Justin Tidwell
Yeah. So funny enough, I was very new to like paid digital marketing. I came from the B2B world before this. And so this is a brand new learning curve for me as far as like content and how to put it out there and what works and what doesn't. For us, meta's still our top platform. Like it's probably got about 70% of our spend. I think consumers on meta, in my opinion, if you have what I would consider a social product, meta is the way to go because consumers are kind of in that mindset when they're on the platform. So for Meta, what I've learned is that content is king. So you have to have your content library, like refresh, refresh, new, new, new. There's a lot of fatigue that could take.
- [16:37]
Host 1
Are you doing all that in house or you guys.
- [16:39]
Justin Tidwell
We're utilizing an outsource agency for that. What we've realized is that, like, we can only handle so much bandwidth internally. What we can do is pump out content. So we always have shoots, we have videos, but then sending it to an agency to cut it up and kind of keep it fresh out there. I do think that Applovin is going to be a major platform if it kind of sustains this RO ship growth that it's on. We were recently approved to go onto the platform. And the nice thing is there's far less restrictions for THC products on AppLovin. Right. And for us, like, we're super focused on being kind of at the forefront of compliance as well too. So when customers find us, whether it's on Meta, Applovin, they're not able to purchase from our site without being ID too. So that's kind of a big part of marketing on these platforms is like we want to take a very kind of compliant approach and make sure that people we're working with are all 25 + and we're able to kind of ID on each purchase because we are growing quickly and we're making a new category out of nothing. So it's like we need to be super compliant and super ahead of the game and self regulate because we know that eventually those regulations are going to be in place.
- [17:46]
Host 2
Makes sense. So you're facing a lot of hurdles, right? There's regulatory, there's compliance with like some of these paid channels. And then on top of that, you are one of the first to have to educate the consumer that something like this exists.
- [18:02]
Host 1
Right.
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Host 2
How do you guys strike that balance between not being able to fully say what you are, but having to also educate the consumer on, like, what it.
- [18:13]
Justin Tidwell
Is you're actually saying? 100%. Yeah. So I think it comes in a couple different phases. So first one is that our product is extremely, extremely low dose and safe for consumers. That's intentional because we knew that we're selling something to somebody that probably has never tried cannabis before. And we've all heard those stories of our friends that are like, I took an edible and it was the worst experience of my life. Right, that would be me. Yes, exactly. So we wanted to be the company that avoided that situation. So number one, like, the products we have are extremely, extremely safe, extremely tested, extremely low dose. So you could chug our microdose bottle entirely and like, you might, you know, sleep like a rock, but you're not going to, you know, have any issues past that. So number one was like making sure the product experience was really good no matter how much education they read from us. Then number two is like, in a normal business, you want to show them the product, you want to sell them the product. Right. For our team, I tell them our job is show them the product, drive interest, educate them, what is the product, how do you use it? And then sell them. Because we want the consumer to know exactly what we're doing and what's what we're selling. And that comes into really first is that interest. You drive them to that site or that landing page. From there, it's education. So most websites are like, we need to have, you know, our conversion rate optimization. I'm like, we need to teach them exactly what this is and what it does for them. And then we want to drive them to purchase and then post purchase while that product's on the way, we're going to be sending you emails and information about how to use the products before it actually lands. And honestly, to date, you know, we have not had any bad consumer experiences. Like, all the emails we get are like, this changed my life. Thank you. I had a great experience. And then they try that microdose and then they tend to level up and kind of get a little more brave and try a little bit of the stronger products.
- [20:03]
Host 2
I love that. So is there, are there like certain things that obviously you can't say, like, oh, this is a cannabis infused spirit.
- [20:13]
Justin Tidwell
Yeah.
- [20:14]
Host 2
Which will give you the feeling of being high.
- [20:17]
Justin Tidwell
Yeah.
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Host 2
What is the alternative? Like, how are you guys kind of getting around that and like what exactly are you saying instead of.
- [20:23]
Justin Tidwell
So like a good like example would be the exact one you just use. Try this cannabis infused spirit that will get you high. We'll all sit in a room and say how else do we say that? That is a better way to attribute to consumers that we're not going to have any issues of how we're marketing our product. So we would sub in. Try this plant magic that will give you a lift. Right? So it's like, you know what I'm saying? But I don't have to go and directly say what I'm saying. Right. So like in a lot of our marketing we go that route and consumers are smart. Like they're on social all day. They're seeing the gardening trends, they're seeing like people on social that basically come up with a community of like how to talk about the products they want essentially. So it's, it's about appealing to that consumer. How are they talking about it? And that's how we're going to talk about it. It's kind of the easiest way.
- [21:10]
Host 2
Love that.
- [21:11]
Host 1
True on this is sponsored by if you want to build a profitable E comm brand these days, then you need retention. Lifetime value is the lifeblood of your brand, especially when cacs keep going up. Being first purchase profitable is great, but you only really start to print money when that customer comes back over and over and over again. It's why subscriptions are such a big piece of our strategy here at oppvie. There's a big reason brands, no matter the size, are using a tool like Recharge. What we like is that they're not just adding a subscribe button on your site. They're a complete subscription engine, helping you convert buyers to subscribers, preventing cancellations, winning back churn customers and they're even driving more revenue through smart upsells. That's why big brands such as Dr. Squatch and even Vital Proteins are using Recharge. So if you're looking for a powerful all in one subscription platform, head over to get Recharge today to see how you can pump up your LTV for your brand. Now let's get back to the episode. So I'm curious on the attribution game, right, you're obviously started online, you've grown the B2B and retail piece heavily and going into this year going to be a bigger sector of it. How do you think of attribution? How do you think of the efforts that are going into different places? Do you worry a lot about that? Do you like, hey, what's my dollar going to turn into here versus over here? Because I think for D2C brands, right, I think attribution becomes a huge thing. Even going from one platform to another. It's like some people won't even do it because they're too nervous about being able to understand how the return will be. How do you think about it given that you're also in this alternative category where almost there isn't too much noise either, but you get to kind of see what's coming about.
- [23:03]
Justin Tidwell
So I think like number one for us and I, I always recommend this is like, we have a long term outlook on our business. Like, we grew super fast, we went from zero to 100, you know, really quick. But we have to look at things and say we have to try a lot of things, we have to fail at a lot of things. If we have a month where we're upside down on our paid media, like, we need to prepare for that as a business because we have a new product in a new sector that things are changing every single day. So for us it's like number one, we have that mindset of like, we might fail at a few things to learn how we're going to get it right. And then second is once we get it right, we double down until it's not working anymore. So that's kind of been our strategy since day one. And like we've had things where like our ad account was shut down or this video was taken down or whatever it may be. We just have to understand that we're in a new business in a new segment. We need to pivot. And then I think secondarily is having a diversified strategy where you're not overly reliant on one channel or platform. And that's where I think people can go wrong, is like, but our return is, you know, twice as much on Meta as it is on TikTok. It's like, but if that stops, what are you going to do next? Right. Versus if you had a decent return on TikTok and you ran that up, sure. And you still focus on your great return on Meta, you're going to have a backup plan in case things change. So I think it's like be okay to pivot, have your business set up sustainably so that you could take a step back one month and you're okay. You're not, you know, hand to mouth, so to speak. And that for us has been super successful so far. It's really cool.
- [24:32]
Host 2
We were talking about this right before the Podcast. But influencers curious. You know, obviously you understand the, the importance of having like this organic presence and something that can drive revenue and brand awareness. So that obviously, you know, DTC picks up. It has that halo effect on retail. How are you guys looking at influencers? Is it, you know, something where kind of building an army or are you working with specific people? But walk us through what your strategy is there.
- [25:02]
Justin Tidwell
So my approach to influencers has been one of, like, a lot of education and learning. So we first kind of focused on like, okay, if we pay this person X amount, what are they going to post and what does it look like? In my opinion, it came across very inauthentic and consumers pick up on that. Like, we'd have a video with 100,000 views where the influencer was like, buy this drink, it's delicious. And it wouldn't convert to sales. So I think consumers know what they're being sold and they know what they're being like, actually reviewed and told. So we stretch switched our strategy completely to sampling. We send over like a thousand samples a month to influencers. And going back to those little bottles. Yeah, the little shots, the bottles, whatever. Basically, whatever an influencers want, like, we'll send. And it goes back to, like, having faith in your product, having something that stands out because we're such a. We're first to market and we're very unique. Influencers are posting our products, like 70% of the time we send them. So we're getting a ton of free kind of exposure that way. And what we've realized is that the video of, hey, buy this bottle, it tastes good. They paid me to say it versus I'm going to try this new drink. And whether it's a positive review or they're giving us feedback, those generate way more sales. Just because I think consumers know, like, okay, this is the influencer's real experience with it. So I think for us, like, seeding has really led the charge. And you can also create like an evergreen strategy with seating. Because if you're seeding enough, you have enough backlog of people that have got that product. They're going to be posting consistently. Then that helps you keep your socials, like, on trend and your stories always have something going. So that's been a major focus for us and honestly has been a huge way for us again, to go back to building an email list and a customer base profitably and then using that to scale.
- [26:51]
Host 2
Got it. So the strategy here is get it into the hands as many people possible. The brief is the Most important part, right? Because it's as soon as you send out the product, it's basically asking them, you know, what exactly that they should post.
- [27:08]
Justin Tidwell
Right.
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Host 2
But how do you guys strike that balance between just getting into somebody's hand without any expectation and then hoping that they post? Or like, what is, what is that part? Because I feel like that's the part that a lot of people struggle with.
- [27:22]
Justin Tidwell
Yeah.
- [27:22]
Host 2
It's like, oh, I'm doing all this seating.
- [27:24]
Justin Tidwell
Yeah.
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Host 2
And nobody's posting.
- [27:25]
Justin Tidwell
Yeah.
- [27:25]
Host 2
What do I do?
- [27:26]
Justin Tidwell
Yeah. So two parts to that. So specifically to our products, go back to educate. Right. So it's like, hey, we're sending you this bottle. We don't want you to have a bad experience. Here's how we suggest you try it, how you use it. We have a much more hands off approach and I would say much riskier than most brands. We believe that creators know what they do better than we know what they do. We send them the product, we educate them, tell them how to use it, and we say, speak your mind. And that's putting ourselves on the line because if somebody didn't like it, they could blow us up too. Right. So for us, like we've noticed with particularly working with creators, they don't want to be micromanaged, just like any of us do in our business. So it's telling them about the product, showing them why it's unique and different and then seeing if they post it. I think if you're in a more saturated category, let's say like you're trying to sell, you know, a vitamin or whatever it may be, I think you, when you're seeding influencers, you really need to be specific about what's unique about your product, what's different. Hammer that home before they're getting it. Because that's going to come to mind when they're posting and talking about it. And also creators want to entertain their audience. That's what they're there for. They're going to post about products that entertain their audience. So if you look at your products and say, I need to craft these for the digital age, which is how do I entertain people? People are much more likely to post it.
- [28:49]
Host 2
Got it. And then finding the right people, how are you guys going about kind of making sure that you're getting the right person with the right audience? I don't know if you guys are going for like micro.
- [29:01]
Justin Tidwell
Yeah. Macro.
- [29:01]
Host 2
What does that look like?
- [29:03]
Justin Tidwell
For us it's about finding people that we feel like speak to that audience. So going back to that like 60, 40 female to male, kind of more of the like younger demo that's focused on switching away from alcohol. So that's kind of we, we check those boxes. Then second is now that we do have like an internal team, we dig a little deeper and say okay, what's this person's engagement like? How much actual organic activity are they getting? Okay, they check that box, then we send it. So it's really like match the target demo for us. We tend to focus on like influencers anywhere from 2,500 followers all the way up to you know, 100 million followers. Right. So we'll go a very like wide net because a lot of the times what we've seen is that person with a hundred thousand followers may only get like a hundred comments on their posts and they're people that don't know them. But the person with 2500 may get every single one of their friends commenting on it because it's actually like their tight knit group and those convert just as well. So I think it's just about like having a wide net when it comes.
- [30:01]
Host 2
To that makes sense.
- [30:03]
Host 1
So I'm curious on obviously now going into the cans and, and you'll continue to product develop and whatnot. I'm curious, how do you look at kind of the next, you know, next five years, right? Because I think the, the evolution of, of the category I think is something you had a vision to which is I think people are naturally either moving. It's, it's not just all people are moving away from alcohol, they're moving to this. But naturally people are wanting to be healthier, find ways to be, you know, sober conscious or sober curious. This and that. I'm curious, like how do you continue to feed into that? Right? Is it necessarily outside of THC or will it always be around that? How have you thought about like because at the end of the day also you're, you're curating a customer base that now fit has a Persona, right. Which is like again fits into their super curious or moving away from alcohol or THC lovers but don't want to smoke anymore. Like yeah, you have all these different Personas that are fitting into that. How are you going to build around?
- [31:06]
Justin Tidwell
Yeah, so what I tell our team like basically when we start our management meetings is what Red Bull and Monster are to the energy category is what nowadays wants to be to the functional beverage category. And I specifically say functional beverage on purpose. I don't say THC beverage because we are setting up a platform for people that are Interested in alternative products. Right. So I think THC Beverages is a, is a great flagship product that actually has the effect you tell consumers it does. What the future holds for us, I think that's definitely an interesting question. And do we dive into other categories? Do we go deeper within the THC segment? It's definitely something we're continuing to eyeball, but we need to have ingredients that actually give consumers a real impact and a real effect. I think if you're selling something that doesn't back it up, you have the sizzle but not the stake. Like it's not sustainable. So if we see something like THC that can give consumers that same effect and it delivers safely what it says it does, that's definitely an option for nowadays down the road. But right now we have so much ability to scale and we feel that we're just like scratching the tip of the surface when it comes to people interested in THC Beverages. We're going to go deep and focus on that. And then from there, I think secondarily is we're selling a product that still does not have a carved out industry and regulations. Right. Every single state is different. So we need to lead the charge on putting sensible regulations in place throughout the country and federally. And that's going to be a major focus on for us because we want consumers to have these products, we want them to be tested, we want them to be safe. But we're gonna have to go do that work with all the local governments to make it happen. So the next five years for us are going to be incredibly busy. And I would say there's a good amount of job security for my co founder and I because we're going to have a lot of work to do. Where that goes from there, I think sky's the limit for sure.
- [32:59]
Host 2
It's really cool as, as the industry does grow, right. I'm sure there's going to be competitors that kind of come up and are trying to sell the same thing. Obviously you see the, the, the alcohol industry is super competitive, right. You go to like any liquor store. If you know anybody who runs a liquor store, like the margins are so low just because everybody's. It's a race to the bottom, right? How are you guys thinking about that? Obviously there's still time before it kind of becomes as competitive as alcohol. But like what are you guys thinking in terms of how you can still stand out but be, you know, competitive?
- [33:39]
Justin Tidwell
So it's funny you say that. We've had over the last few months like a ton of Knockoff products come on the market, like I'm telling you, like they're trying to basically like deceive a consumer and look exactly like us. So. And I think that's natural for all early to market founders and especially if you've experienced some like public success, that people are going to try to come after you. Right. And that's very normal. So building the category 100%. So like that, number one, is like you're going to have competition and that's a good thing. And like you need to think of it of like iron sharpens iron.
- [34:09]
Host 1
Yep.
- [34:10]
Justin Tidwell
And as soon as we, you know, popped off, so to speak, I was already thinking about that question of what happens when it gets competitive. Right. So I think for us it's number one, it's maintaining we're a premium brand and a premium product. We're not going to get in the mud and fight over being, you know, if you look at the alcohol space, the cheapest tequila. Right. We'll leave that to somebody else. Like that's not our interest. We look at the brands that have staying power over time. Clasamigos, those type of brands, they bring something more to the consumer than just the cheapest tequila on the market. So for us, how do we do that? It's really about brand building at this point and then building the most quality supply chain product we can. Because if there's cheaper products with a lower quality, like if that's what the consumer wants, they can go for it. We have a feeling that people want a safe, effective product that has a real brand behind it. So it's about building in person activations, partnering with large names, kind of putting gasoline on the fire, so to speak. And where we're going to differentiate long term is going to be brand and not price.
- [35:14]
Host 2
The one thing you said was partnering with large names.
- [35:17]
Justin Tidwell
Yeah.
- [35:18]
Host 2
Any cool campaigns that you guys have run or any stories you can tell around that.
- [35:22]
Justin Tidwell
This was actually a good example of organic seeding. So we actually sent a free bottle to a large kind of name, Bethany Frankel. I don't know if you. She's been very successful. She sent her a free bottle and the cool her is she's very honest about her products. On Social. We sent it to her knowing, let's see how it goes. She actually had the experience that we talk about, which is she drank too much of our product, posted about it on Social. Like I thought this was, I was supposed to drink the whole bottle, but I know I just realized it's a per shot serving and she's quirky, too. Yeah, exactly. She's awesome. And she ended up posting like a series of five videos, got over 5 million views, kind of together, um, drove a ton of sales to our website. But the last video is my favorite ever. She said, I didn't read the instructions, I drank too much, and I still had a great experience. So going back to like, letting consumers be honest about your product, talk about it, and then that's a great example of like a seating partnership that could eventually turn into something more as well too. But it's cool to see big names like that entering our category talking about it, and it definitely gives us a large consumer awareness. I can't tell you how many, you know, friend, my mom's friends that text me and said, I didn't know this was your product. Congrats, that's awesome. So that's cool. Yeah, it's definitely going to be a focus for us of, like, leveling up when it comes to who's trying our product and talking about it.
- [36:46]
Host 2
Love that.
- [36:46]
Host 1
I think in that same breath, I'd love to maybe jump into a little bit of, like, other cool things you've tried tested, maybe hacks you're doing online, whether it's on the creative end or on the landing page and the website, and maybe some of the, or even just different campaigns you've done that. I, you know, I think some of the, sometimes when you, you hear ideas, it inspires so much more creativity. Others. So, yeah, any, any other cool campaigns or, or tricks and hacks that you've kind of been doing over the last couple of years.
- [37:15]
Justin Tidwell
Yeah. So I think, like, for us, what we've done a really good job at is having a halo effect around the brand, having things going on organic, having things going on paid influencers, talking about us, live events happening, and just letting it, like, always be circulating consumers. That's worked really, really well for us. I think for us, it's like, how do we take that organic traction and have consumers see us like 24, 7 all the time is interesting. Actually. I saw a data point from our team the other day. A consumer needs to see you 8 to 11 times to consider purchasing you. So it's like, if you really think about that, like, that's a lot of work to get each of us with everything on our phone going on to see us eight to 11 times. So I think it's like creating that circle around your brand within the market you want to target and then just letting things run at that point. And then the more product you Sell, the more word of mouth you get. So it kind of like works as a wave of momentum around your brand is like the more you're doing, the more you're able to do.
- [38:18]
Host 1
I'd be really curious about, you know, when you look at the way consumption happens online versus offline. Right. Offline. I mean, my behavior is probably like once a month, sometimes twice a month, I'll go to Stu Leonard's and buy a bottle. And it's. It's like, it's right when I'm about to be done, and I'm like, all right, I don't want to be done.
- [38:40]
Justin Tidwell
Right.
- [38:40]
Host 1
So I want it there. But I'm three minutes away from my store, and I'm usually going there twice a month anyway. So it works out you have the online buyer that maybe doesn't even know you're in store or whatnot. How are you guys thinking about retention? Maybe subscription? Give me a little bit more into that world of just getting that repeat, given that you guys have focused on building such a good product.
- [39:05]
Justin Tidwell
Yeah. So going back, we launched and went from, you know, zero to a million dollars in sales in 90 days. We were not thinking about how do we have the best subscription, you know, policy, how do we do all this? We were just like, let's keep up. Now we're at that phase of our business where I think for online businesses to sustain that subscription is like, number one importance, because that's money in the bank. The next month, the month after that, the month after that. So I think it's kind of two strategies is number one is the customers for us that we know go on and randomly buy a bottle every month. We're trying to attribute to them of, hey, buy a bottle, we'll give you X, Y, Z, free ad, a free shirt. Attribute to why do I want to get on that subscription and what's convenient for me? And I think there's never, like, there's never a lost opportunity. Right. Because you have that email list, you have the customer searching for you. So I think it's attributing to them, but it's really focusing on targeting subscription. For a product like ours, we have kind of different consumers that are going and buying our product. The normal type of consumer is like, hey, I want to go to a party and I want to impress my friends and have a good time and I don't want to drink. They're buying that product and it's more one off. Like you're talking about that person's not necessarily a subscription target. But the people that we notice that are purchasing frequently, they could be using it for, in their mind, a medical use. They could be using it for sleep, whatever it may be. Those are the people particularly we want to focus on and say, you have a day to day need for this product. Let's get you on a subscription. I always prefer to try to go the route of like, I think it's easy to just say, like, we're going to discount this and, you know, buy it more frequently. That works. And like, you should do that because if you can get somebody guaranteed to buy your product, you know, every single week or every single month, like it's worth giving away 10, 15%. But first, maybe there's another reason that that person will subscribe to your product. That's going to be a big focus for us. We're actually switching from WooCommerce to Shopify. Oh, wow. And I think Shopify does a lot better job of being able to push subscriptions. Absolutely. And so when we switch to that platform, it's definitely going to become a focus for us. It's really cool.
- [41:09]
Host 2
Outside of maybe a focus on subscription or other retention strategies to get people to come back, how about product expansion? What does that look like? What does that, what does that roadmap look like for you guys?
- [41:21]
Justin Tidwell
Yeah. So we launched our flagship product, which is our 750ml bottle. What we noticed was that, like, consumers love that product. They're buying it a lot for taking it to a party in home use. But people want like that cool, refreshing drink in the summer. So we launched cans as basically like a moat strategy of, hey, they love our bottles. They're now interested in THC beverages. Let's not give them an option to go somewhere else. Let's. Let's service the demand that we know is there. So I think first is like, what is our consumer want in building products around them versus forcing a product down their throat that they may not necessarily want. It's kind of been interesting to see because our first run of cans, we actually did a million cans and sold out D2C within like two weeks. Weeks is wild. But I think now for us, you do hit a point in your business where it's like, you can't have the shiny object syndrome and you want to do this, you want to do that, and you want to be everything to everyone. We're kind of going to double down and focus on like what we have and more focus on like expansion versus trying to have a bunch of SKUs and then having Kind of a quarterly strategy of what we call LTOs, which is like a limited time offering. We see that keeping consumers engaged. So it's like, hey, this three month segment, there's a cherry flavor available for you. The next one's the holiday one that keeps things fresh but you're not having to always like have a SKU that's going to be there forever.
- [42:43]
Host 1
Yeah. And then I'm very curious on, you know, you talked a little bit about activations, right. The, the world of activations for most C2C brands probably starts and ends at like, hey, I'm got into Walmart, let me do a trial or sample at Costco for you. I mean it can go down to something like, you know, a concert coming up or you have south by Southwest, you have some of these huge events. I feel like it actually becomes harder to choose where to be. Give me a little bit of maybe like either something that you've learned from, from maybe doing the wrong activation or something that something great that's come out of doing the right one.
- [43:23]
Justin Tidwell
Yeah. So we've definitely kind of leveled up. Like starting with my co founder and I walking into a liquor store and passing out bottles to our next event coming up in May, we're sponsoring a Formula one event. We're going to have, you know, a hundred people on the racetrack. It's very large. You have to start small, see what works and go from there. I think if you went straight into the Formula one event, you're going to waste a lot of money and do it the wrong way.
- [43:49]
Host 1
Sure.
- [43:49]
Justin Tidwell
And then I think focusing on who is your target demo, who are we trying to get to be interested in this product, post about this product, talk about this product and then focus on the experience and not so much on like taste this, taste this tastes, but make it feel like the brand while you're there. And that comes down to the people passing out the product to what you're talking about it. And then the last piece is using that time with consumers. If you have somebody's attention in today's like economy, that's huge. Right. Using that time to educate them on what's the product, why do they want it and where to go and purchase it. Right. So like for us we're focused on events actually driving value from those. And I think it's really going after that target demo and then using that time you have. Cool.
- [44:35]
Host 1
Before we jump into true, just curious, more fun fact question, how often are you drinking nowadays?
- [44:41]
Justin Tidwell
So like going back, I literally was like the most straight edge guy you ever met. Like I'd be, I'd be the guy in the college dorm room and the other guy is smoking weed and I'm like, why are you doing that? What's wrong with you? So I kind of went from that guy to now like, like leading the charge in the THC beverage category. So it was a huge flip. But for me, I honestly with nowadays it's three, four days a week for me now. I rarely drink. I do still think there's a place for alcohol and like that's why I think like we don't come out and say don't drink alcohol. We just say we have a great alternative for you when you want it. But for me, three, four days a week, like I'll pop in the jacuzzi at night, pour it on a glass and just like sit there and enjoy myself. So I'm actually a fan of the product which is pretty cool.
- [45:26]
Host 2
It sounded really nice. Love that. I mean love your story. It's, it's really interesting to see how you kind of took something that was a complete white space and turn it into to what you have for the listeners and viewers out there. Is there one thing that you want them to take back and implement in their business today? What would that one thing be?
- [45:51]
Justin Tidwell
I think in my opinion it's easy to get even with stories like ours from the outside looking in. Wow, they did a million dollars in 90 days. They're growing super fast. They're doing all this like run your race, focus on what your business needs today and go step by step. And those little steps lead to huge leaps. And that's really for us for nowadays was not we didn't want to be a one hit wonder and do a million dollars and then disappear. Right. So it's about every single day improving our business, tweaking it and I think that's the advice I'd have to any founder is just focus on that and it's going to show over time.
- [46:26]
Host 2
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