September 11-15, 2017

Personal Effects

Hint Water founder Kara Goldin always has been, in her words, “a problem solver.” “Someone just asked me the other day, ‘Do you consider yourself a beverage executive?’ and I replied, ‘I consider myself a problem solver,’” she says. “I’ve worked in multiple industries now: publishing, cable television, the Internet, I’ve run e-commerce groups, and now I’m running a beverage company. And all of these involved solving a problem for the consumer.”

The idea for Hint came to Goldin during some time off from running AOL’s e-commerce group to raise her kids. She credits that time with allowing her to take a deep look at her own life and her family’s. “I was thinking about not only what I wanted to do with my life but also what I was putting into my body. Watching my young kids I was thinking what am I going to be doing to help them start their lives off right?”

One problem she noticed right off the bat was that they were all consuming too much sugar. “I thought it would be great to just get them drinking water,” she says.

Plain water, however, just wasn’t the answer. None of them, including Goldin and her husband, Theo, took to it. “So, one day, I just took the fruit on the counter that we had been eating, sliced it up and threw it into a pitcher of water and the next day I came back and saw that everybody in my house was drinking the fruit water that was in the pitcher. And I started drinking it, and pretty soon two weeks had gone by and I hadn’t had a Diet Coke and my kids were drinking the water with the fruit in it and they weren’t even asking for juice anymore. We were all drinking more water.”

Goldin’s years of business experience kicked in; she smelled an opportunity. The first thing was a trip to the supermarket. “I figured there had to be this product out there already somewhere,” she says. She couldn’t find one like it anywhere. Then came her pitch to Whole Foods in San Francisco and a strong dose of reality. “He asked who my distributor would be and all these points that I had no idea what I was sort of getting into and no idea even where to look,” she says. Undeterred, she went home and told Theo she was launching a beverage company, “and that I was taking $50,000 out of our bank account and I’m buying bottles and caps and I’m doing it. And he looked at me like I had lost my mind and should be committed,” she says laughing. Theo, whose business background included the role of Netscape’s first intellectual property attorney today works for Hint as its COO.

Ordinary consumers like Goldin, most of the time with no previous experience in the beverage business, have searched the store shelves, walked away disappointed, and then had a eureka moment: ‘Hey, if they’re not making the drink that I want, maybe I should start one myself!’

Another was Honest Tea co-founder Seth Goldman. “I had been involved in political campaigns, I had worked on Capitol Hill, I had run a non-profit in downtown Baltimore, so I was somebody who was inclined to act on things I care about,” he says. “So this was another opportunity to act on something I cared about. And fortunately for me, it connected with the fact that I was thirsty,” he says, laughing, explaining that the need for Honest Tea occurred to him after a long run through Central Park and then a search in vain in a nearby New York City store for something refreshing that had fewer than 100 calories or so. “I personally identified with the need for the product. And at the same time, this was a vehicle for me to take some of that activist energy and desire to play a role in helping to create change.”

Goldman is quick to laugh when reciting his story, and, aside from passion and a drive, a good sense of humor seems to be one trait all these beverage entrepreneurs have in common: an ability to laugh at themselves and at the risks they have taken to launch their brands. In fact, many of them say if they knew how hard it would be they probably never would have tried.

Dreams Meet Reality
Beth Parentice, founder of Sipp Organic Soda, had a passion for mixology and working with ingredients to devise new cocktails as long as she could remember. She had been creating cocktail menus for restaurants, but after changing jobs suddenly found herself laid off. “I thought, ‘Do I want to go back into the corporate world again and potentially take the chance of getting laid off or really think about something else I wanted to do and create something on my own?’ So through a lot of thinking about the things I love to do and finding my passion and talking with friends, I realized what I really enjoy doing is creating cocktails, entertaining. So I decided to take what I was doing at home, creating innovative cocktails for people when I entertained, always using fresh and natural ingredients, organic when I could find it, and turn that into a business.”

The first iteration of what would eventually become Sipp was a website—which still exists—called Eco Bar. Through the website Parentice started getting calls to cater events with her natural cocktails.

“I realized from people’s feedback that they were really getting away from things that had coloring or preservatives, artificial flavor,” she recalls. “They really loved the fact that what I was creating was natural and organic and the fresh taste came through. People were coming up to me and asking, ‘Where can I buy this? How can I get it? How can I make it?’ Most were overwhelmed by having to get the different ingredients to make the drinks themselves. That was sort of the moment where I thought: ‘Maybe I have something here.’”

Rose Cameron, founder of the kids’ water, WAT-AAH!, says she was faced with a constant battle to get her two kids, Jack and Luke, big fans of soda, to drink healthier beverages. The idea for WAT-AAH! sprung from one night at the dinner table when her kids actually suggested she create a water for them, but with one caveat: “They wanted it to be cool, not boring like how they thought water was,” she says. Cameron’s decades of experience in advertising and marketing for clients like Coke, Chanel and other top names immediately kicked into gear. “With the growing awareness of childhood obesity and the fact that sugar and sodas are seen as one of the major culprits of that, I thought there was a big void there that maybe I should go after,” she says.

Christina Paganelli, founder of Drinkme, a line of high pressure processed kale drinks, was battling both cancer and M.S., when she turned to her background as a student of chemistry for salvation. “I created the product for myself because I was in a real situation with my health,” she says. “I wanted a drink for basically maintenance of my health. I had to find a way to live with cancer because you don’t normally hear the words cure and cancer used in the same sentence ever.” Hearing of the health benefits of kale and that it was being researched at Johns Hopkins University specifically for its ability to turn cancer cells off in the body, she began investigating it further. “I never set out to start a business, but people started witnessing transformations in my health and asking me what I was doing?”

And Chandra Davis, founder of Drink Chia!, was a dedicated athlete, training for a marathon, in fact, when digestive issues started getting the best of her. “I was basically using sports beverages on the market to hydrate with and was having quite a bit of issues with my stomach sloshing and cramping,” she recalls. Turned off by the sports drinks’ high sugar and calorie content, she came across information about chia seeds. “I was really intrigued because it’s called the running food,” she says. “It is amazing for hydration and endurance and has high amounts of omegas.” Upon further discovery that it could be made into a beverage, she started creating home brews and started feeling the difference it made in her performance. “As I started talking to other people, especially those in the running world, a lot of people were having the same issues and looking for something a little bit more natural out there,” she says.

But while each of these entrepreneurs had identified a need for their new beverages, making their ideas come to fruition would be another matter entirely.

“There were a lot of hurdles along the way that I could have easily walked away and just said ‘This is too much, I can’t do it.’ I felt that way like every other day,” Parentice now recalls. “But it was something I was really passionate about and I just persevered through. And each step of the way when it seemed like this was it, this was the end, something positive would happen and it just moved the business forward.”

Two turning points in her luck particularly stand out. The first: finding a flavor house to commercialize her formula and being told it would cost her between $25,000 and $35,000, money she just didn’t have. “But then I made a decision for one week I would call every flavor house I could find that had organic extracts and just tell my story and hope somebody would listen. And the third day I got somebody on the phone at A.M. Todd (now part of Wild Flavors) who would listen to me and I flew out to California and pitched my product and they have been working with me since the beginning, creating the formula at no cost because they believe in the brand. Really without that we wouldn’t have been able to move forward for the next step,” she says.

But Parentice wasn’t out of the woods yet. Eventually she was faced with a fateful decision: use her remaining money to do one more production run or to exhibit at that year’s Natural Products Expo. She chose the Expo. There, she would notice a group of European businessmen hovering around her booth, but keeping their distance. “I thought they were looking to take my idea and steal it and make it in Europe,” she says laughing. “Ok, this is great, we have no money, we’re here at the trade show and now I’m going to be ripped off by this European company.” As it turned out, the group of businessmen were not looking to steal her idea, but to invest in it. Emil Capital Partners would eventually go on to invest in Sipp and allow Parentice to realize her dream.

For Goldman, some of the biggest hurdles had to do with production. “All of the bottling plants we went to, when we said we wanted to brew the tea instead of adding a powder, they were like, ‘Well, we don’t do that,’” he recalls. “We bought in these large mesh bags where we thought we’d be able to brew the tea that way but the tea leaves didn’t get a full immersion in these filter bags and the bags would break and then the pipes would clog and the pipes would burst and then we’d end up with tea everywhere but in the bottle. But it just kept evolving. Every step of the way we said here’s how we can do it better.”

Help Along the Way
The business world often is viewed as cold, competitive, dog-eat-dog. And while this may be true to some extent, many of these drinks entrepreneurs say they were often surprised by the altruism of industry veterans they encountered. Parentice says especially helpful has been Steaz co-founder Eric Schnell. “To me he was like the beverage guru,” she says. “He’s the one that forged the way in organic certification with carbonated beverage.” One thing led to another and Parentice found herself in a meeting with Schnell, having him sample the Ginger Blossom version of Sipp. “He said it’s really hard but if you keep going you can do this, you have something here. And that really helped to inspire me to just keep moving forward to the next step. Later I asked him why are you helping me and he said when he started there were people who helped him.”

Not all encounters went as smoothly for these entrepreneurs, however. Recalls Goldin: “At one point I actually talked to someone at Coke who will remain nameless who told me that people don’t want products without some sort of sweetener in it. And somewhere along the way he called me ‘sweety’ and I think that actually encouraged me to actually go and launch the company.”

For Paganelli, the biggest initial boost came from not a person, but a country, namely her own, Canada, where she first launched Drinkme. She was able to win some government contests, which gave her the seed money to launch the company and then help re-launch it in the U.S. “I used the $10,000 in funds I received from my contest to support validating some of the research,” she says.

Finally, The Rewards
Perhaps surprisingly, none of these entrepreneurs cite the financial payback when listing the biggest rewards that have come from launching their businesses. For some of them, the simple reason is that the money is immediately being reinvested to grow their fledgling brands. But for many of them, it is reward enough to just see their hard work roll off the production line for the first time, or to savor the first time they saw it on the shelf of a store.

It is also the very real gratitude they receive from consumers. For Goldin, it is reading through the various emails each day from consumers who use Hint as a critical part of their diets as they battle everything from cancer to diabetes.

“They view our product as solving a problem for them,” Goldin says. “And that’s better than working for any non-profit that I can imagine. I mean, it’s amazing when you hear from people that you’re helping them.”

For Cameron, not only is the street cred WAT-AAH! has given her with her kids hugely rewarding, but some time spent recently with First Lady Michelle Obama as part of her Drink Up initiative, to get Americans to drink more water, hasn’t been so bad, either.

“Twenty years from now if they ask me what would you remember the most out of this entire experience, I’m telling you it’s meeting the First Lady, walking into the White House and helping their objective of fighting obesity and making kids healthy. I’m selling water and trying to get distribution, but at the same time I’m part of a group that’s really making a big difference, and that’s important to me.”

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