← The CPG Guys
The CPG Guys
Shaping Nutritional Wellness with Plane Crash Survivor and Lucky Energy CEO Richard Laver
00:49:01
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- [00:00]
Shree Rajagopalan
Chain Drug Review's focus is on reaching the key decision makers across all retail channels, delivering comprehensive coverage of the latest shopping trends and in depth category analysis on health, beauty, over the counter products and wellness. Whether it's the latest trends, emerging technologies, or strategies for adapting to new consumer behaviors, Mass Market retailers deliver the critical information retailers need to navigate this dynamic environment. To subscribe to the newsletters of CDR and mmr, simply follow the hyperlinks in the digital liner notes of this episode. Chain Drug Review and Mass Market Retailers are published by Retail Media iq.
- [00:40]
Richard Laver
Hi, my name is Richard Laver. I'm the Founder and CEO of Lucky Energy. You're listening to the CPG Guys Podcast.
- [00:51]
Shree Rajagopalan
Welcome to the CPG Guys Podcast. Your host, Shree Rajagopalan and Peter V. S Bond explore how brands and retailers engage consumers in an increasingly digitally driven world. And now, here are the CPG Guys.
- [01:11]
Peter V. S Bond
Hello and welcome to this episode of the CPG Guys Podcast. I'm of course SRI Co Founder, co host of the CPG Guys and co founder and partner of Think Blue, your key to unlocking your profitability potential. As builders, connectors and amplifiers, we shape the future of commerce to drive your growth. Get in touch with us at sri thinkblueconsulting. That's co not. Com. Please do listen to my older daughter Rhea Raj's music www.riaraj.com her new song Pray on It and Hot Couture have been around now about a month and a half and yesterday proud dad moment for me as she just had a co written song with adam Levine and Maroon 5 with the K pop sensation from Blackpink Lisa and my younger daughter of course Lara Raj as a member of the Geffen Records Universal Music Group Cat's Eye, the hit song Gnarly at the time of this recording was released earlier this week while at Seoul, South Korea. I had the fortune of being there. In fact I just got back late last night and that song has already hit number one trending on YouTube. Five million views in less than 24 hours. So looking forward to seeing how they both do in these both these songs. Not able to join me today is my fellow co founder Peter Vs Bond and he's not co hosting this podcast. He serves as Head of Industry and Client Engagement at Flywheel, the E Commerce acceleration division of Omnicom. Before we get to our guest today, I want to ask you to consider following us in your preferred podcast listening app. If you already don't do so. What this does is it ensures you automatically receive new episodes as they're released. While you're at it, follow our sister podcast, the FMCG Guys and CPG Scoop. And now I'm going to ask you for one other little thing. Please, please, please give us a rating on the Apple podcast. The rating tells us how we're doing. The review tells us are we having the right conversations with the right people on the show? At the end of the day, you shape the show. Now over to our main event on this episode. Our guest is Richard Laver, a serial beverage founder, philanthropist, and CEO of an unorthodox Better for you energy drink that is well on its way to appending and transforming the category. Lucky Energy takes a less is more approach to the drinks gone while ethos most energy drinks have overwhelmingly adopted. And coming from a music background now, I can't wait to uncover drinks gone wild. Please join us in welcoming Richard Lever to the show. Richard, man, how you doing, man? Up in Park City?
- [03:29]
Richard Laver
Yeah, Park City, Utah. It's good to be here. Got a little bit of time to reflect in my Park City house when I went back to work. I've been on the road a lot, but this is where I thought I was going to retire after my last enterprise.
- [03:41]
Peter V. S Bond
But don't be all say that, man. I've said that four times. And here I am in la. The entire CPG industry is east of the Rockies, which means I'm on a plane every week. And as we speak tomorrow, day after Sunday, I'm flying all day just to get to the northeast because the CPG guys with Cornell University launched the industry's first retail media executive education program. Anyway, in any event, Richard, before we get started with our Q and A segment here, can you give us a quick overview of Lucky Energy and then what you do at Lucky Energy?
- [04:12]
Richard Laver
Yeah. So I was in the 85th floor of Goldman Sachs building during the series C round of Kate Farms, the company I founded to save my daughter. We can get to that in a little bit. But, and I, and I was reflecting on the, the authenticity of Kate Farms and how everyone had felt that it was a love story, but really it was a rebel story. I was an outsider that didn't have a doctor's degree, dietitian's degree, and, and I felt that brands were starting to become like boy bands. You know, stories were just sort of put together and everyone was trying to have this authenticity piece, but there was an emerging anti brand idea from a water company. Don't want to name the name, but everyone can probably get to it. But it was really an Idea of standing in front of the world and telling a story about sort of a punk rock anthos. And it really appealed to me because my story was misunderstood and it was really about a rebel story. And I felt that the category was of energy was was bros and workout and there wasn't a lot of storytelling and it was the storytelling that was there from some of the legacy brands were motocross and jumping out of airplanes that necessarily weren't connecting with a modern audience that was younger, that was struggling and that was rewarding, authentic, non tick the box branding and loving that authenticity. We're craving it. So I felt from a brand perspective we had this crowded category but reality was we had very few anti brands that were willing to stand for something and stand out there and really tell a rock star story. And then from a product story I really felt that the world I came from in the organic world it was you had to do everything right, like the product had to be incredible. You know, you had to be beyond great in everything you did story everything just to build a hundred million, let alone a billion. But for some reason in energy like the world was craving these new stories and products but it was delivering the same usual thing which was a workout, not a lot of content. And I felt like I could disrupt on the product product side by having less ingredients, sort of RX bar philosophy which was let's deconstruct the energy drink and make it less approach, less SC airy and more approachable and make it a little bit more soda like but still giving the performance that everyone wanted with with an entertainment, with an entertainment company ethos as well.
- [06:44]
Peter V. S Bond
Awesome. Thank you for that. In the digital liner notes of this episode, we'll include links to your LinkedIn profile, your company's corporate website for listeners to access while we go on with our conversation. So let's get to know you, Richard. So you mentioned founding a previous company. You mentioned your daughter briefly over there. So let's understand what that was. Give us your life story summary and the anchor behind how something you founded for your daughter resulted in the anti brand. And then I'd love to know which will come back to what leadership principles have you anchored your own life story on.
- [07:17]
Richard Laver
Yeah, great questions by the way. That's really cool. And I'm going to keep it really simple for the listeners nuggets that they might be able to connect with my story. I mean my story was plane crash when I was a kid, one of the worst plane crashes US history. Delta 191136 people died around me.
- [07:34]
Peter V. S Bond
Wait, wait, you were part of a plane crash? Delta 191, you said?
- [07:39]
Richard Laver
Yes, I was the youngest survivor. I'm one of only. Dude, like when was this so August 2, 1985. I was, I'm one of three people to ever be thrown out of a 747 jet. Well, it was an L1011. I'm trying to give sort of the size of the plane exploded on hitting a water tank. Everyone on my row died and I flew out of the plane. So that set the stage.
- [08:03]
Peter V. S Bond
So you were ejected out just due to the, just due to the force?
- [08:06]
Richard Laver
Yeah, well, I didn't have my seatbelt on, so that saved my life. So prior to crashing, I went into the bathroom and something said, don't put your seatbelt on when we go through.
- [08:15]
Peter V. S Bond
What are the odds like you didn't wear your seatbelt, you get ejected out. They tell us all our lives that if you don't wear your seatbelt you have no hope. And you're like the anti, anti brand. There's something start to form here, man.
- [08:28]
Richard Laver
Well now you can see it, right? Like you can see what, how that happened after that something like that happens and I didn't, you know, I, I went on to have a healthy life. I had to go through a lot of mental anguish and pain. But one of the things that you, you learn about is I'm fearless, right? I, I've gone through hell and back and, and, and so that allowed me to be a rebel into where everyone was going into another place. I went on my own, my own journey. And so by the time, you know, I had a lot of failure in my life in my 20s and teens, obviously trying to come up with, to me, finding faith in God, some substance abuse, perhaps light substance abuse, some little stints of homelessness and just sort of a not winning a lot in life because I really didn't know what my purpose was when searching. And so I found it with Kate Farms. So Kate Farms was My daughter was 15 pounds when she was five years old. Doctors labeled her with a condition called failure to thrive. And that's a blanket condition that says we can't figure out what's wrong with this child or this senior citizen. But no matter what we put her on, she keeps losing weight. So I put her on a high calorie diet and she kept losing weight. And so I read a book called the China Study and I laid the book down. I knew what was wrong with my daughter. And so the main ingredient in a lot of Elmer's glue back in the 60s and 70s was casein. And it creates sort of a glue like substance in your body. So for you and me, when you're super healthy, we can sort of work that dairy out of you. But as you get older, you see those autoimmune disorders pick up even in healthy individuals.
- [10:09]
Peter V. S Bond
But isn't casein an everyday regular day?
- [10:12]
Richard Laver
But yeah, and so these are things that we can eat. They're not like a poison. It's just the fact that if you're not running and walking and moving like my daughter was in a wheelchair. She had special needs. She was born with cerebral palsy. So she's in a wheelchair and she's not running around and doing these things. So it was forming a glue in her body.
- [10:29]
Peter V. S Bond
Good heavens, man. And you, you discovered this through the journey of just treatments for her. Was there a magical moment that a doctor told you this, that casein is the enemy here?
- [10:40]
Richard Laver
Yeah. So the magical moment was putting down the book China Study and understanding that Katie hit a hit, a tipping point of, of immune issue and autoimmune. No matter how many calories, the doctors, what they thought was no matter how much weight she was losing, she, we put her on more calories. But what was happen, she wasn't absorbing the nutrients because there was like a glue in her body. So I wrote this paper called Tree of Life. And Tree of Life, I said, I went to the blender and I came up with this sort of elixir of plant based formulas, cleaned out all her body. She was on 11 medications. 30 days later, Katie was off 90% of her medications and she was thriving. She had bottle rot, she was throwing up. She was literally, I felt like £15 at 5 years old is you're going to die soon, right? So she was losing half a pound a month. And so I wrote this paper and said we have to clear out in these senior citizens that are like, he was a strapping man, 6 foot 4, 200 pounds. Why is he in a senior citizen home 160 pounds and he's wasting away and he's eating the same diet as he did when he was 40. And so my paper just discussed about the idea of that the formulas out there weren't giving you the photonutrients that you could get at Whole Foods. So you and I go to Whole Foods and we want to get better. We can have all these beautiful shakes and all this stuff. But the hospital, the sick, they were just getting basic delivery of protein fats. There was nothing to support and so what I wanted to do was go around the world and put all these nutrients into one shake. And so I created the world's first plant based shelf stable shake in an RTD category. And so before orgain they were a grass fed company before they went into plant based. And so I was the guy that created the first one but it was high calorie and high carbohydrates. And so I went, I knew the doctors weren't listening, they said, who are you? So I went into the retail environment. But the problem with the retail environment was I wasn't going to be able to create a big business there. But it bought me time to get all the studies together and do all the things so I could attack the medical community. Now Kate Farms is number one plant based meal replacement shake in the world in medical. So it's a lot, it's a lot there.
- [12:55]
Peter V. S Bond
Wow. Quite a start to forming Cape Farms.
- [13:00]
Richard Laver
Right.
- [13:01]
Peter V. S Bond
So I did want to ask you what leadership principles have you observed over the years have you learned yourself? And what if I were to ask you what advice would you pass on just to humans in general? Just listening to your story.
- [13:12]
Richard Laver
Yeah. I mean if you look at my success track record that was minimal When I was younger there we, we all have these dreams at night that we have and then when we wake up in the morning, you, the dreamer doesn't, doesn't take action. And so, and it's because there's a underlying confidence problem and that whether you're special or not or that you can achieve these things. And I think that once a person transforms themselves into realizing that whether it's your daughter's is, could be the next. I hate to, I don't know the names, whatever Kanye or whatever it is is that something about these individuals believe that, that they learn that no one's that special and that the specialness is in the ability to take action and believe that they have a vision for the future of where you're going. For me, I like to look at the end of what I'm doing, what it's going to be, what this company is going to be at the very end. So I visualize that I'm the store, I'm the star in the movie. We all visualize about it, we all want to be the hero in the movie. And if I believe that I'm going to let, for instance, with lucky energy, I'm going to ring the bell one day, then what steps would I need to take to ring the bell? If I'm developing the product on Day one. So I don't do what people, a lot of people say to do. Let's start here and find your mentor. I start with the hero is the end of the story. And that means that if I'm going to be that guy, then I better find an incredible gross margin because I need to raise money. Why am I so successful with Lucky raising money? People think, oh, it's just a great story, great, it's all those things, but it's really about a great business story. And the great business story is year two, 57% gross margin. That's unheard of. So that tells you how I've been able to raise $40 million and how I'm going to raise another 60 is because people believe that I've engineered a path to profitability. So if I've got that engineering ready, then I know I'm going to hire the best people, I know I'm going to get the best packaging. Everything is a turning the stone over from what I think is going to be the exit which is, which is a multi billion dollar company.
- [15:21]
Peter V. S Bond
So Richard, there's a saying I have, it's we get what we deserve, not we desire, not what we desire. And the difference between desire and deserve is connecting ambition to action. Rightfully pointed out, when you connect ambition to action, you get outcomes. When you don't, you get what you deserve. So I'd love to learn what the portfolio of Lucky Energy is. So what kind of beverages are included? How many SKUs do you have? And then what's big for 20, 25 from an innovation perspective.
- [15:52]
Richard Laver
Yeah. So the first, first part about it is I wanted to have a blue ocean strategy. Less, less ingredients, 33% less ingredients. Bring new people into the category that were scared of energy drinks. So that's a big thing. And then to deconstruct the down to its basic components. Sort of what Rxbar did in the, in the bar, meal replacement, meal replacement, bar market and what's resulted from that is an innovative drink that's cleaner, that's soda like and gives you all the highs that you have without having to put copious vitamins and everything. So what I really did is I took, I married the organic world that I come from into the legacy world. We sell our products in gas stations and omnichannel but, and grocery. But what happened was everyone was going either natural or they were going into all the gaskets. So what I want to do is take the maca from which is a Peruvian miracle ingredient, all your vitamins, all your Sexual health, all these wonderful things inside MACA is there to support your vitamin journey instead of having to add all these copious amounts of things. And what that did was it gave me also a superior gross margin with less ingredients. So from, from an innovation standpoint is I felt like everyone was going way too sweet, way too everything. So I wanted to find a little bit of a medium place which was a great clean soda like experience and participate in the zero sugar with no aftertaste. We put no aftertaste on our cans. I think I delivered it and I did it. I sort of have a proprietary way of the way I did it. And we are, we launched, we have seven SKUs right now and we are basically moving this company into a platform company. I can't tell you the product but in about 3 weeks launching contribution margin product on D2C with a limited retail to sort of test where it's going. But my vision for the future of the company is beverage first but I want to, I want to move into some things that are really trending and innovate there that, that, that could be really great for the market.
- [17:57]
Peter V. S Bond
There's a word I use founderitis and what I mean by that is a founder they stick to my product is the best. And they don't focus on margin. They focus on making the best product that they think they have in their back pocket. At the end of the day investors care about one thing and when you take someone's money you must do your best to give it back. And with the promises you made, I love that you've used the word margin about five times and you gave me numbers like 57% so we live in a world now which is almost 100% digital. From a consumer standpoint that's. You mentioned TikTok in a different conversation we had. The consumer today discovers innovation almost exclusively on innovation. I know large box retail the world I come from General Mills, PepsiCo, J&J Revlon working with the Walmarts and KRoger still believe NCAPs drive innovation? They do to some extent but they discovered online TikTok even meta Instagram reels etc YouTube many many places. Right. And so in that kind of world how are you looking at omnichannel holistically and coaching your teams that actually executing in the marketplace on building for an always on 360 consumer.
- [19:10]
Richard Laver
Yeah I think that being the father of your daughters are going on to being superstars is that and the fact that you're thinking about that there's two, two things that are going on here. There's the performance and the talent and then there's the business strategy that literally is going to make the difference between whether how far, how far they go and thinking. Thinking about both of those things is vitally important. You have a world where we have so many options and the companies, a lot of great companies that we see, they start thinking about margin and things. The idea is we'll get there, we'll find that place in year three or four. What I wanted to do was put the cart before the horse. If I knew I had the product market fit and I knew I had the velocity, okay, now I got that. So now I want to make sure that I have the team. And then the next thing is to make sure I have a gross margin, which is a great gross margin. Quickly is a declaration of war in the industry. Because really what will happen is it gives the investors the confidence that you can always shape the business at once. You get to fifty hundred million revenue to maximize your potential for different dual path exit. Whether it's public markets or these other things, to not do these things is the biggest crime that's going on in this business right now. You have these founders and you have these big that thousands of companies, you go to Expo west and they don't understand if they're not architecting these things early. You've just diminished your ability. Because the idea that a company is going to set fire like the, you know, some of these companies have been selling lately, poppies and all this stuff is, you're just, that's hard to do. And number two, you need to give yourself the optimum in your investors because at the, the optimum chance to go dual path and to do these things because all the leverage is in the strategics hands right now. They've got the control of the, of the entire game. Right. Because they know you're looking for it. But if you architect dual path in the beginning, it's a vicious strategy. You've got a place where you can have all kinds of ways to transact your company. And so the having an ability to think like that. So that's number one, owning Omnichannel and really understanding the DTC path and understanding your customer. I brought over from LD Liquid Death, I brought Hamid Saifi, he was employee number two over there over to Lucky and he's been able to throw on.
- [21:44]
Peter V. S Bond
Yeah, I think we're gonna have Hamid on the show maybe in a couple quarters. So I'm looking forward to that as well.
- [21:50]
Richard Laver
Yeah, I mean he's one of the greatest talents I've ever seen as an executive. He's, he's just a brilliant genius and humble as you can possibly get. But Hamid, you know, he's able to to cultivate a love affair with the consumer and really touch them and really give them stickers in the boxes and really make them feel special and get a great email list and you. To us, that was more important than just having Amazon and just having so. And we could really see how this business could fly if it worked in omnichannel. So by having large format and by having C store and by having direct to consumer having Amazon, we've been able to understand that this brand really is playing at a lifestyle level that very few brands can. Because the holy grail of this whole thing is this. Look, if you're a performance marketing company and you don't have the talent to sort of put the cart before the horse and build the team, do all these things that are going on, you could be disrupted so easily. All it takes is a better gummy to come along or a better bar to come along. And if you don't transact quick enough, you could be disruptive. But guess what? The P L on these things looks so genius in the beginning because you don't have big gna, you don't have all these things. But when you bring someone as talented as Hamid to having a love affair and have the relationship with the customer, your ability to have performance marketing anchored into that as well, it becomes the holy grail of the whole situation. Now, Hamid, in 2021, 2022, these guys, investors were throwing tens of millions in the idea that this founder will figure it out and we'll get to the gross margin. But now what I'm really trying to do is say, Hamid, I'm going to give you the ability to have your storytelling be so potent and get you the money. Because I'm able to get this gross margin out in front and a possibility for the contribution margin to get us to 60% and to investors now they feel a little bit more taken care of by the founder.
- [23:58]
Peter V. S Bond
No debate there whatsoever. But then I start thinking about you're in a category which is one of the largest categories in retail, period. Not just in grocery. You know, the multi trillion dollar GDP that grocery is. Beverage forms one of the largest segments and then snacks follow after that. But that said, you're competing with competitors who have very deep media pockets. You just talked about gna. How do you match up against these abnormally oversized media budgets and become the challenger that can actually show up and talk to the consumer.
- [24:34]
Richard Laver
Yeah, I mean you're, you're real. These questions are, it's really great. They're very thoughtful. And I think that you have a hundred billion dollar category. You have what? You have a theory. I'm going to slow down here and give. This is a very important answer. You have a cat, you have a category, it's 100 billion. And if you were just sort of had deal flow across your desk and you had all the things that the first default switch would be, this is just all these guys have so much money and it's a crowded category who need. Why does the world need another energy drink? How about that? And so what I would say back is I entered the category because as everyone is running out of the burning building. I believe like the plant based category when I entered it was, there was no big, it was farmer stand guys like Justin, Justin's not butter. It was probar power bar. It was like, like there was, there was not these conglomerate companies that were going to come along later. And I said this is the biggest opportunity in history of the world. Plant based. Plant based is not that opportunity right now anymore. And I created 60% gross margin over there. So. But, but the thing about it is I believe this is the greatest opportunity in the history of the world of beverage because we are growing like mad in energy. Because 50% of the world simply doesn't want coffee and they want energy drinks. And in a sea of all these me too bands or me too drinks, I saw a way for me to be completely disruptive and more importantly connect with the young consumer. So if the young consumer we thought when we came into this business that it was going to be 18 to 26 years old. It's actually because of the blue ocean strategy. Making a, what we felt was a safer drink, a little bit less high, less taurine, less caffeine perhaps than some of the bigger ones, but still highly caffeinated enough that that gave it sort of an advantage to attract new people into the category. But what's really the big thing here is that we thought also it was going to be 90% male and 10% women. It's actually 40% women and 60% male. And so we got that wrong. And it was a diverse group. But, but I think that what's going on is there's a sea change in the way that legacy energy drinks are connecting with their consumers and the young people are wanting to get behind something. If, if, if brands are similar or then what are you doing for me lately. And so for Lucky we look to create mischief, mayhem and to inspire everyone to connect with our brand. So you never know the content you're going to get out of us. And so I think that all things said we're offering something a little different differentiated in the market and it's obviously our hyper growth is saying that. So I believe we are in five years the top three energy brands are going to be in for quite, they're going to be look at quite a big change and we've already seen that with some of these and it's just the beginning. We're going to see a big change in this.
- [27:56]
Peter V. S Bond
You know, having been on the team that launched rockstar energy at PepsiCo, I can't even remember how long ago at this point I look forward to the change you'll bring in the industry. My biggest pet peeve now that I'm an entrepreneur myself and I left corporate America approximately a year, exactly a year to the day tomorrow sugar is a major issue. While I don't want to comment about politics, I do think an outlook on healthier, better you use the word clean eating is important in this nation. So reminded to audience that I'm speaking to Richard Laver, founder and CEO of Lucky Energy. So Richard, another one that comes to my mind is startups are a lot of fun because you're actually creating something meaningful. What you and I have discussed so far, you're creating something not just meaningful but also with purpose to consumers on the clean side. But you have to worry about the 57% gross margin that you promise which and you have to make payroll every single week. It's the one, one thing a founder can never fail at is making payroll. So when, when I start thinking about it, it's fun and then not so much what challenges have you encountered and then what did you do to mitigate them immediately?
- [29:09]
Richard Laver
Yeah. So the founder this day and age, unless you're inventing a new category. I think that like I went back to plant based meats, they had two incumbents that started the whole industry or to this the soda boom that's going on, it was only two to start off with and you know that's a, it's different. Right. So when you're coming into to what I'm doing is the founder, you need to be comfortable making hundreds of decisions that others would be fearful to make. And so when I'm putting together the car, the rocket if you will, all the components have to come together as you're building the rocket. And if Any of the components are sort of, I'd say if the top 10 components, if you're not hitting nine out of 10 of those components, putting together the market fit the cogs, the team, and you're not able to get all these things together. You could sit on a drink that you've invented and you could have the greatest drink in the world. You've raised seed capital and you're on the way to the Series A and you're just not able to put on the show that you need to, to gain the recognition and the stores and things are going on. You're going to be sitting around with a couple million dollars of your seed money and you're going to have a hard time breaking through, to break the. There's absolutely an opportunity for the right company at the right time, with the right product, with the right team to break through and to change the game. But, but the reality of it is, is that you're going to have to attract everyone to the enterprise. And when I a players typically attract a players. So to a control freak founder, if you have so many good things, but you just haven't had the ability to let go of control, you're not gonna be able to grow this, grow the enterprise fast enough to be able to, to, to move the ship, to push the boulder up the mountain. And so part of what I want to do is if I, if I hire the best like a Hamid Sci Fi or Matt Rickert, who's our operator, then I don't need to micromanage them and I can de risk the operation by giving them power to make decision and moving those things along the way. But if I'm a guy that's trying to protect my moat and I'm uncomfortable giving power to the right people and I don't have the ability to do that, investors can see right through that, employees can see right through that. And you're going to have a really hard time. So as, as hard as this is for a lot of people, it's not that hard once you get it right. And you're going to have to become uncomfortable with the runways and things that you're going to be doing. Because to break through in a crowded field, you're going to need to be aggressive. You need to go to believe in yourself and everyone around you. And you said something very, very critical earlier. I've never lost investor dollars. And that's important because a lot of times a founder will sound good, everything will be great. But soon as the hardship comes, his family or his wife or something say I'm not putting myself at risk here. Investors really want to know that you're willing to die for the enterprise and they'd rather die than put money in your pocket. And so. And I've had existential crisises three times in my career, four times. And I'm going down with the ship period. And that comes across and you need to, that's grit. That's the grit that you need to, to win. And I think that's for your daughters to the, as they go through their, their, their arc is that grit to go get it is going to be that thing that's going to take them over the edge for you guys.
- [33:05]
Peter V. S Bond
Listen man, in 1985 you were ejected out of a plane. Now you know, I know every single listener is now on safari on their iPhone googling your name and checking out when the crash was how many survivors they were. But I got to say it's been 20 years since that moment, I guess or close to 20 years come August. But if that's what you went through and where you are today, I'm going to say you're probably a pretty safe bet. And one other thing Richard. The best leaders surround themselves with people who are smarter than them, amazing them and you use the word empower. They empower them to lead and be successful. When that happens, usually the concocted outcomes are pretty cool. So let's talk about the actual target consumer. Who is your target consumer? You mentioned a little bit about male versus female. The difference 60%, 40%. Is that the, is that the gym bro? Is that everyday consumer like me? And then why would your brand be attractive versus others in this crowded category? Obviously it's clean but are there other functional benefits? Who is your target consumer?
- [34:09]
Richard Laver
Yeah, so it's, it's like I said, 60% male.
- [34:14]
Peter V. S Bond
There's one other word I wanted to throw in there. There's a gym bro but there's also the tech bros in front of the computer 12 hours a day and is looking for nutrients in a beverage.
- [34:23]
Richard Laver
Yeah, let's get to the product. So I deconstructed from my experience. I mean Kate Farms was probably the most complicated beverage ever consumed. You could live without food the rest of your life on 60 ingredients shelf stable for two years. It was a miracle drink saved my daughter's life. She hasn't had a more. She hasn't eaten food since she was five years old and has perfect blood work. So no one really understands because it was in the community and it was driven to help patients. How crazy that innovation was. But this was I, what I wanted to do is deconstruct the energy drink, bring it down to max performance without having to give you the jitters crash afterwards. And so, so everything in there was. I felt like beta alanine was a super ingredient. One of the problems of beta alanine is if you dose it too high you're going to get these flush niacin flush and sort of feel nervous and out of control. But it's a, it's an incredible, incredible. If you dose it right with taurine lower the combination will allow you to go out and mow the lawn, feel amazing and hit that euphoric feeling without the energy drink crash. So once I knew that, right. Once I knew I had that, I knew what the repeat rates were going to be. Right. So the repeat rates are the most important thing. So you know our repeat rates in March were in digital were 56% which is beyond elite. Like elite is 30, 35 in beverage. So our repeat rates are.
- [35:49]
Peter V. S Bond
I'm familiar with those numbers. It is.
- [35:51]
Richard Laver
So you know what I'm talking about. Once I get you in the basket and I get you on that euphoric feeling that's going to drive you to, to have the, want the energy drink more so. And so what more on the question were you asking too? Where was.
- [36:07]
Peter V. S Bond
I was, I was jumping more into the world of, of why it's attractive. You said euphoric, but who's your exact target consumers.
- [36:16]
Richard Laver
Yeah. Thanks. So. So as we, as we look to place that, you know, as you know, Kate Farms was medical patients. We had a targeted consumer. We weren't going to scale in retail out of like $5 million. Business went into medical and it blew up. Right. But here what's tough about it is that we thought it was gonna be 18, 26 year olds. Actually it's 18 to 45 year olds, 60 demos, 60 male, 40% female. But what's interesting about it is one of my advisors was telling me is that we're in a 16 ounce can. We think that potentially if I was in a 12 ounce sleek that all of a sudden that that demographic could switch to 70% female and 30% male. And so we're playing around with the idea for large format being able to go into the pantry for mass buying, that people are the addiction of the product. And it's feelings. Clean feeling is driven mothers to really want it. But it's a large can that we're in. In addition, when we put it into a gym format, we're out selling Leading brands right away because it's got the beta Alanine, which is a pre workout, but again, I dosed it down for lifestyle so that you don't feel like you're just going to be too off the wall drinking it. Our consumer is, you know, they're on the go. It's workout, it's lifestyle, it is office, it's gamers. And so that becomes a little bit of a tricky thing for Hamid because he's got everywhere we put it, it sells. And that's obviously the holy grail, but with limited dollars, you need to be careful with that as well. So we've decided to go for the C store, the gas station, which is the $14 billion target market. We have a drink called OG Luck. We're grabbing a lot of monster consumers that seem to love our drink and gas station. Eight billion people on earth, they all want to be lucky. So they may grab it for lucky for the name Lucky, but they come back to it for its taste and it's good feeling. Large formats and $8 billion category. We were launching in nine divisions of Albertsons as we speak, and we're being very careful about that. We had two test stores with Sprouts and we outsold the number three brand in the category three to one last month in those two stores. So we are coming to grips with the idea that we're lucky. Wherever we put Lucky, it seems to be selling. And that's another thing. I need to put a lot of sophistication behind the operations now and that's why I'm going to need to raise quite a bit of money to go after what I'm doing.
- [38:58]
Peter V. S Bond
Awesome. So we talked up front about startups could be fun, but not so much, etc. So if I asked you to give me a quick summary, what advice would you give? People listening to the show and they're like, hey, I want to start the next CPG brand. What are some do's and what are some absolute don'ts that you've learned over your career?
- [39:19]
Richard Laver
When you're the founder and you're the CEO, it's one of the greatest things you're ever going to go through in your life. And it's one of the worst things you're ever going to go through your life. And I'll tell you what's really incredible. You're going to be asked to share the experience and you should. Like you said, you need to get everyone into the enterprise that believes in you and you need to build them and you need to be there for them. And you need to give them the credit for what they've helped to bring to the enterprise. Because without them you can't go anywhere. The investors, I always say this dreamers like me can't build anything without the right investors. The whole idea of venture is a little different for some companies don't need it. But for me, the way I build things, I need venture capital. So you need all those things. But when you're coming down to an existential crisis that you will face in one form or another, many times if you're not, if you're not experienced like I'm experienced, it'll be the big ones, which is the production and the, and the opera. The op side is what sinks a lot of these companies. But if you're great at that and that doesn't hurt, you can be. Something's going to be an existential crisis and you're going to find something that's going to be incredible to you. You're going to be all alone. There's no one there. Because we build founders and CEOs up during the great times and we asked to share the whole journey with them. But when it's a crisis or something's gone wrong, you're all alone and everyone's going to turn from you and ask for you to figure it out, to save the baby. And so just know that there will never be more of a weight in the world other than saving your child that you're going to face and you're going to be tested your character. Perhaps you will be tested in nerves in your marriage. Or maybe you're going to go out and have 100 cigarettes or whatever the hell you're going to go through. But if you never give up and you sit there and you fight to the very end, people are going to gain confidence in you that you're, that you're going to be that guy that they need to be behind. And then you'll find out that maybe you're not ready for that. And because it is a terrible place to be.
- [41:25]
Peter V. S Bond
It's been a year I've been an entrepreneur now with my own consulting firm, with other partners and then the CPG guys obviously scaled into a near full time media channel. But yeah, you're right. There are days I do feel alone because it's my business and it's up to me. And if I, like I said, you know, ambitions and actions have to totally come together. Otherwise you get what you deserve, not what you desire. Right. So let's wrap this one up. Richard, by me asking you what are things you're seeing in the industry, you know, what bothers you, what are you following and what matters the most from a consumerism perspective?
- [42:01]
Richard Laver
What matters most to the consumer or to consumerism?
- [42:04]
Peter V. S Bond
Consumerism, especially since you're a founder, you've curated brands. This is not your first rodeo, this is your X rodeo. What do you think is the number one thing on consumers minds these days?
- [42:15]
Richard Laver
Well, authenticity. You know, they. It's wild how you can say the weirdest things and do the weirdest things, but if people see that you've got grit and gut and that you, you're not being fake, they seem to get behind you and respect you even if they're not believing exactly what I'll tell.
- [42:31]
Peter V. S Bond
You, Richard, some of the largest brands in the world think they're authentic. The only reason they're in store and they have the scale and they have the oversized market cap is because of their price point. The day that changes the value to a consumer evaporates in minutes and seconds. Right. I rarely find authentic brands other than ones that have been founded. D2C. Why is that?
- [42:57]
Richard Laver
Yeah, I think that the founder that's really authentic doesn't need approval from other people for their ideas. They don't look at trend reports to come up with their ideas. They don't look at this category is big. So now I'm going into it because usually you're too late if you're going to start a clean soda company. It's like they've all been funded. Like, it's like, you know, you need to have a thesis and a reason for why you exist and just because like we started in the beginning of the, of the podcast which was, you know, why do the world need another energy drink? And I said to you that it was the biggest opportunity in the history of beverage. Right now, right here is where I'm at. And so that's going against the grain. And so I think that consumers are looking for products that can improve their lives. And a POV from the founder on a passion for how that's changed their life. How has that meant something to them? So for me it was could I use the greatest canvas on planet earth, which was $100 billion category, to tell my story, which was the belief that all of us are special. You need to find that special authentic voice and to inspire people to never give up and that to, to fight back no matter where you are. If you're 60 and you've fallen down, you, there's a path to greatness inside of you still. And I felt that as an artist, what am I really? I'm an artist. And so the canvas is imagine 50 million cans with my story on it to inspire people is a high. Instead of sending selling one Andy Warhol painting, I get to tell this painting on 50 million cans. It's a high for founders. But where, where we get, where it gets lost is, is, is is finding out the, the best interviewers, the best sounding founders, they're not necessarily the ones that are going to make the difference and break through. It is the ones that have that sort of deep connection to authenticity and a story with their consumer. And D2C is a great way for you to express that and be able to be build a micro community that grows and create those numbers that you just understood from me, which we were super excited about, which was, you know, breaking through to 50s repeat rates from 30 in December to 50s and back, back to back months means that the rest will take care of itself. Once we have those type of numbers, that means that our right to exist and find the, to go get the capital to compete against these big legacy players, it's time for that to happen. And so I think founders, sometimes they get lost in networking and I've never networked in my life. I didn't like, I didn't have add any LinkedIn people on my LinkedIn in 10 years. I was a guy that sat by myself and use the pain and experience in my life to get rid of all the loud noise and quiet myself down to what I thought the world could be. And I really think that a lot of the disruptive founders that have really succeeded do that, that thing.
- [46:11]
Peter V. S Bond
Awesome. Thank you so much for that, Richard. A reminder to audience that you can find all of our content simply by going to a web browser and typing cpguys.com and if you think you or your company has some thought leadership to contribute to our community discussion, please do drop us an email@contactpguys.com again that email is contactpguys.com and maybe you can join us on the podcast just as Richard did today. Don't forget to drop us a rating@cpguys.com on the navigation bar up top. The rating actually tells us how we're doing. The review tells us are we having the right conversations with the right guests to all our followers, I can't thank you enough for joining us on the podcast, for clicking, liking, sending us DMs, making recommendations, recording podcasts with us on the road, offline online without you there is no show. To all our sponsors. Thank you thank you thank you for your all your participation in the CPG Guys. Richard it was a pleasure to host you today and I wish lucky energy you and your family much luck as you scale this brand.
- [47:13]
Richard Laver
Yeah I really just want to say the last thing is the questions were just really entertaining and for a founder it was just great to I'd love to come back and I'm excited for you to speak with Hamid. I think he's going to be incredible for your listeners. So thank you for having me. I'm humbled to be honored to be on your show.
- [47:30]
Peter V. S Bond
Thank you so much Richard. But what were you expecting from a previous CPG veteran from some of the largest oversized brands and now in the entertainment world with what my daughters and my wife are doing. But thank you. That's a wrap of this episode. See you soon on another episode of the CPG Guys.
- [47:59]
Unknown
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