BRAND SECRETS AND STRATEGIES

PODCAST #86

Hello and thank you for joining us today. This is the Brand Secrets and Strategies Podcast #86

Welcome to the Brand Secrets and Strategies podcast where the focus is on empowering brands and raising the bar.

I’m your host Dan Lohman. This weekly show is dedicated to getting your brand on the shelf and keeping it there.

Get ready to learn actionable insights and strategic solutions to grow your brand and save you valuable time and money.

LETS ROLL UP OUR SLEEVES AND GET STARTED!

Dan: Welcome. Thank you for listening, as always. I want to remind you that there's a free downloadable guide for you at the end of most every episode of my podcast. I always try to include one easy to download, quick to digest strategy that you can instantly adopt and make your own, one that can help you to grow sustainable sales and compete more effectively. Remember, the goal here is to get your product on to more retailer shelves and into the hands of more shoppers. If you like the podcast, share it with your friends, subscribe, and leave a review on iTunes.

Today's story is about an entrepreneur who continually pushed himself beyond his comfort level, stretching himself, as he says, learning from his mistakes, and always being curious about everything around him, always trying to solve and figure out things. He talks about his creative side and he talks about his love for engineering and how things are built. Today's story is about an entrepreneur who found a way to push beyond his comfort zone to create two disruptive brands, two brands that are really changing the way consumers buy products.

I want to thank Zak from coming on today, because you're going to hear Zak candidly share all the challenges and all the mistakes that he made, and believe me, he made a lot. Not only did Zak manage to get beyond the bottlenecks, but he managed to succeed and thrive in a couple of categories where most brands struggle. At the heart of today's message you're going to hear about perseverance and how not giving up, never giving up is the key to success. Having a winning idea, always being curious, pushing yourself beyond your comfort level, stretching yourself, learning from your mistakes. This is the recipe for success. This is the recipe that every brand should be following. I know you're going to find today's episode really inspiring.

If you'd like to meet Zak in person, both Zak and myself are going to be speaking at NatchCom, 2018, in Boulder, Colorado this October. I have a special promotion for you on my website, on the Resources page if you're interested, to save you some money, to a show that's going to help you gain valuable insights from Facebook, Google, Amazon, and many other iconic brands and thought leaders in the industry. Here's Zak with Dirty Lemon.

Zak, thank you for coming on today. I really appreciate you making time for me. Can you start by telling us a little bit about yourself and your journey to where you're at today? Specifically, how did you go from the Coast Guard to Little Duck Organics to Dirty Lemon?

Zak: Yeah, so thank you very much for having me, Dan. Yeah, so my background, I've been in food and bev for about 10 years. Started, I grew up in rural Massachusetts. Was just very, I guess, interested in after high school. I actually wanted to become an architect, but loved spending time in the water. Ended up spending four years in the US Coast Guard and ended up getting trained in engineering, and went from the US Coast Guard to work as an industrial designer. I was designing test equipment for airplanes. And then just to make extra money on the side, I was doing consulting work. Sorry, I am trying to retrace in my head what happened over 10 years ago. So, was taking on consulting work and I was doing some food packaging work for specifically a woman who sold a cookie company into Whole Foods Market. And basically went through a redesign process with her for packages and was really kind of fascinated by that whole experience. When I got out of the Coast Guard, I never knew I was going into food. I really kind of settled into this world of just designing products. But it was much different types of products. We were working with aluminum and steel, stainless steel and these big industrial assemblies. And it really wasn't until I started kind of dabbling in these other areas.

So, I was designing products as a designer, an industrial designer, that mainly ... they were big assemblies. We were working with steel and aluminum. It really wasn't until I started picking up some side projects that I started to see this world of CPG and specifically food and beverage, which was very exciting to me. So, I did a consulting project for a woman that wanted to redesign her packaging for a cookie product that she made that was sold in Whole Foods and went through that process with her and ended up kind of seeing through the course of that project, what it took to take a food product on paper or design something on paper and then have it produced and then subsequently see it on store shelves around the country. That was just a really exciting process for me.

It was around that same time I had two daughters. I have three children now, but I had two daughters, and I was shopping as a young dad in all of the grocery stores and was buying snacks and cereal products for them. And none of the brands that I saw on shelf really spoke to me as a young parent. It was at the time, this was 2006, 2007. It was just Gerber's, the only really kind of interesting brand was Earth's Best. It was around that same time that Plum Organics and Happy Baby were both kind of coming up and starting to build their brand awareness with consumers. And some of the natural foods channels back in 2008, not to really date myself but it was in there. I'm sure you'll remember this. It was just such a different time in food and beverage and so much has happened since then.

So yeah, that was 2008. Really now interesting to look back now and I tell this story often and people say, "Wow, that must've been a really tough time to start a business, 2008." And to me, it didn't make any difference. I was totally oblivious to the financial state of the country and everything else. I just wanted to see my ideas come to life, and so very naively started a company in 2008, Little Duck Organics, and maybe ... I don't know if you want to cover anything up until that point, but that was basically my path to food. And from there to where I am now is, I guess, the most exciting part of the story.

Dan: Well, I'd love to expand upon it. So, let me go back a little bit. First of all, you're younger than me so you're not dating yourself, so don't worry about that. But when you're talking about going into business at 2008 and everyone's saying, "Well, that's maybe not the best time to do it." The reality is this, the trendsetters are the ones that look for the opportunities that others avoid or skip over.

And my background, many many years ago, I was actually an analyst for Standard & Poor's, and so I am very familiar with the markets and how that stuff works. And where I'm going with this is that you buy during times when… other people panic, smart buyers. And you look for opportunities that people normally would be overlooking. So the fact that you started during that time, I think is brilliant. And it shows a lot about your courage and your commitment to making a difference, and then more importantly, being able to look and see what's out there and see a real need.

So, let's back up and talk about your journey through understanding the packaging. I love the way you said that from on paper through beginning on to a store shelf. So Zak, what were you responsible for? What was your interaction in this process? And then, how did that teach that or how did that excite or motivate you to want to take on that responsibility for yourself?

Zak: Yeah, so like I was saying before, as a kid, I always wanted to be an architect. I grew up and remember vividly seeing my grandfather who was an architect designing ... Basically, I remember his drafting board at their home, at my grandparents' home, and I remember seeing him draft up house plans. I think in some way I was just always drawn to that field. I don't remember what it was. Looking at the past 15, 20 years of my life, I think that I'm more, what I'm most fascinated by actually is the process of creating. But I do think as a kid, the only thing I knew, the only career field I knew of that would allow me to draw something on a piece of paper and make it into a real thing was architecture.

So anyways, going back to that project that I did for the brand in Whole Foods, I think that was the first time in my career where I had really, I saw the process of drawing something on paper and creating a product that people could enjoy. I think that that's another big piece of where I've ... something that I enjoyed doing in my professional, or I've enjoyed doing in my professional career is really creating products that consumers enjoy. I love being creative and thinking through the psychological impact of brands and how consumers connect with brands and that direct connection that consumers have with brands has shaped a lot of what we're doing now with Dirty Lemon.

But yeah, I think that was the first time that I really saw that process of creating and then seeing consumers enjoy the products. And yeah, I think that's what kind of created this spark in me 'cause I started applying these new learnings to different categories that I was shopping in and really thinking through ways that I could build something for myself. I saw the opportunity in kids food just because at the time, it wasn't a very cluttered category. And there was truly an incredible amount of opportunity to disrupt the way that ... It was mostly product related and brand related. There wasn't really a distribution innovation. We were going through all the standard channels that everyone typically goes through. But the products that we were offering were very unique.

We had the first organic freeze dried fruit line, which was a really big innovation because Gerber had been selling these freeze dried fruits for a long time and no one ... And this was kind of right at the tail end of really the mainstream consumer coming around to really understanding the value of organic. We went ahead and said, "Hey, we're going to take a product that we know is already selling well by a very big company, a very large company, and we're going to make it organic, and we're going to apply a really fun brand to it." So we did that, and that product was incredibly successful.

And then we created the first product that had plantable packaging that we won a number of awards for. So, we created a kids cereal product that you could plant the entire package in the ground after you were finished with it and it grew lettuce, tomatoes or carrots depending on the product that you bought. And then subsequently, we created about 30 different kids products over time that I was with the company. But yeah, it was very exciting.

I still remember, I tell the story often, but I remember I was in my basement in New Hampshire. We weren't in any stores with Little Duck. I remember sitting in my basement. I had found a packaging supplier on Alibaba, and a supplier that would make a gusseted pouch, which is what I needed to fill the product with or to put the product into. And I remember the initial order for this gusseted pouch was around $20,000 and I didn't have access to that capital at the time, but I had a bunch of credit cards and I remember doing ... This was back when they, and they may still do this, but back when you used to get cheques in with your credit cards.

So, I remember writing myself a cheque, depositing the cheque myself into my bank, allowing that money to clear, and then wiring the money over to China so I could get my first packaging run done for Little Duck. I mean, I learned so much from that. I had designed all kinds of stuff. I didn't realize that organic oranges specifically are very challenging to source, and I ended up making, I remember, a pineapple orange skew that we actually couldn't source the raw materials for because you have to buy futures on organic citrus, and then freeze drying creates all these other problems. But anyways, it was just a very exciting process.

I've kind of always been pushing forward in making those decisions in my professional life where I've been putting myself in uncomfortable situations that I had to then work through and get to the next stage of. I mean, this is happening even now with Dirty Lemon. We're pushing ourselves into retail, which is a very new area for us and there's a lot of different exciting things happening. It's really all because we're trying to really push the boundaries of what can be done in CPG and specifically with direct consumer and the way that consumers connect with brands, which we think is evolving and changing very quickly.

Dan: It is. Well, my background, I've worked in Kimberly-Clark so I'm very familiar with the baby category, and I know exactly what you're talking about. There's not a lot of excitement. And back when I started, this was a few years before you, there really wasn't much of anything. It was the same old, same old. And so to bring in an organic freeze dried brand whether it be the first on shelf, that's impressive.

I love the fact that you said that you like working, if I can paraphrase this, you like being a little bit uncomfortable, and stretching yourself and pushing yourself, and working through problems. So, tell me a little bit about how you got the first freeze dried organic fruit on shelves? How did you convince the retailer that this is the future of the category and where they needed to go?

Zak: Yeah, so I ended up working with a manufacturer in Chicago. I didn't really know what I was doing when I first started. I produced the product. I got all the packages in. I ended up working with this manufacturer in Chicago that was gracious enough to help me. I don't think I would've been able to get away with what we were doing now because there's so many food start ups and there's a lot of people trying to get their brands off the ground. But at the time, I went into one of the largest producers of, definitely freeze dried products, but potentially fruits and vegetables as well in the United States.. I just basically sent them an email and said, "I'd like to produce my product and I was wondering if you're open to letting me use your facility." And they had all the freeze drying equipment. I was able to source ingredients through them as well.

So, I went to that facility. I ended up producing or getting samples first, and I didn't know anything about the buying at work or how to present products to buy, as in get approvals and all that stuff. What I ended up doing was just sending out to all of the grocery stores that I could find in the north east, I ended up sending a case of samples with a nice handwritten note and a piece of marketing material basically like a sales sheet on the products. I sent it out to probably over 100 different grocery stores in the north east. So it's like Market Basket, Hannafords, all the independent natural food stores. I remember, I didn't get any calls back for-a while from all of the samples I sent out, except for one grocery store, which was Philbrick's Fresh Market in Portsmouth, New Hampshire, which is a beautiful grocery store. And they were really kind of, for the north east, especially New Hampshire ... Now there's a Whole Foods in Nashua, it's like the industry has evolved and there's a Trader Joe's and all that stuff. But back then, they were probably the closest thing for that region to a Whole Foods until you got to Boston, where you were able to ... where you actually had a Whole Foods stores. So, it was a very nice store.

And I remember, I was at a wedding in Florida. I got a phone call on my cell phone and the woman said, "I'd like to place an order for Little Duck Organics." I said, "Well, absolutely. I'm happy to take your information." I said, "Let me get back to you and I'll let you know when we begin to fill it." We hadn't even produced the product. I was selling the product. We were hand packing these samples in my kitchen at my home in New Hampshire and shipping them out to all the buyers and then really just hoping for someone to buy the product. I really didn't know what to do. And it wasn't 'til later on.

So, we ended up months later, I ended up fulfilling that first order and then basically I ended up building a small network of other stores that we were available in. So, we were probably in about 20 stores or so. And I remember a friend of mine who owned another natural food store in New Hampshire as well, Peterborough, said, "A friend, this guy, Ben, you should talk to him. He could potentially get your product into Whole Foods." That was my first introduction to a brokerage and really this idea of working with someone to present the product to a buyer. It's interesting as I'm saying all this is really the system that I'm explaining right now is what we're working to disrupt with Dirty Lemon.

So, this system of having to present a product to a buyer and then wait to get an approval. And all of this is really to ultimately be able to connect with consumers and sell your product. We think that that process is very antiquated-

Dan: Yes, it is.

Zak: We think that there's a better way to connect with consumers directly and actually provide them the most innovative products very quickly. So anyways, all that being said, I ended up meeting with this guy Ben. He ended up getting us into Whole Foods. And then that really just started, as I'm sure you know, it's like once you get into one region, then other regions want to pick it up and the product was selling really well, and we grew very fast.

I sold that company in 2013 and we were selling nationally in Whole Foods and Target and Safeway and Kroger, and all of the big retailers. So, we did a really great job of building a strong brand over that time. But the thing that was really, very challenging for me was that we were creating a new innovation and we always had new ideas. We created juices and new cereal products and all these different things we did, and ice cream for kids. We did all these things and we were always dependent upon buyers to get those products to consumers. So, we could innovate all we wanted. And even if we got approvals for the innovation, it still would take sometimes up to a year to get the products onto store shelves.

So, in that process, what I realized after post sale, was that consumers were becoming conditioned because of social media and all these direct consumer brands that were coming up. They were becoming conditioned to be always looking for something new and different, which means that as a food company, you need to develop innovation and present it to consumers faster, which is something I wasn't seeing. The current infrastructure allowed for, which basically was the framework for Dirty Lemon.

Dan: I'm really going to enjoy talking about that. That's something I definitely am interested in, because I agree with you. The systems that are out there today, they're so antiquated and they make it so difficult, especially for small brands to succeed. And that's part of why I'm doing the podcast, to help brands navigate around that or help get through some of that bottleneck. So, I definitely want to go there.

Let me back up though. You said first plantable packaging. Can you talk about that? I'm really interested in packaging, sustainable packaging. And I think that that's an opportunity that the industry as a whole really needs to get behind, especially with all the waste that we have. So, can you talk a little bit about that? And then you said that when you plant it, you would get seeds. So are the seeds embedded in the packaging? How does that work?

Zak: Yeah, so we were using, we had single serve oatmeal, like an oatmeal product that was made from a PLA-based, so it's a corn based plastic that composted in, I believe it was 90 or 120 days. It was a relatively short compost period. And then the cardboard, which is the outer packaging for the product had seeds embedded in it and you could plant the cardboard in your garden and grow vegetables.

Dan: Love that.

Zak: Yeah, it was very innovative. But the challenge that I've found with packaging in general is that the packaging technology really has not caught up to consumer demand. Consumers want more eco-friendly solutions, but the packaging technology that's currently available, in many cases doesn't allow for that.

So, we're dealing with this right now with Dirty Lemon where in order to serve customers with the highest quality product at a reasonable price quickly, we have to ship plastic. Glass would be too heavy and too fragile to be able to build the brand direct consumer. And we're working now on a way to enable a more convenient recycling for consumers that do purchase the product frequently. 'Cause what I've realized over time is that the bigger issue is not rubbish. Waste is a huge issue, but the biggest issue is actually the improper disposal of plastics and different materials which have obviously a significant impact on the environment. And if we can figure out a way to curb that through the proper handling of post-consumer waste, then I think that's probably the best that we can do at scale right now because the technology does not allow for a compostable bottle that we can use for our current product line.

So anyways, this is something I'm thinking about all the time and we're always researching new materials. And again, with listening to the podcast, it has access to new packaging materials. Whereas working on anything interesting is something that as a company, we're dedicated to really pursuing whatever we can in that area. But yeah, we haven't found anything comparable to what we were doing with Little Duck. And even at that, we spent a lot of time developing that product line. And yeah, it's definitely challenging to work through the most efficient, eco-friendly solution for packaging materials.

Dan: Yeah, I agree with you. This is so difficult. And the other thing is, people don't really understand or appreciate that a lot of the stuff that we throw away that we think we're recycling gets thrown away. I've got a good friend, Kelly Williams, that I've been having a lot of conversations of. He's been teaching me a lot about packaging. So, I'm going to table that because I'm making notes here. But he's definitely on the forefront of that, and he showed me some products that you can put in the ground, and they completely compost. Don't plant seeds though, I love that idea. That's very creative. But that's definitely something I want to come back to. I was told that if I put something in my recycle bin, and the truck picks it up, there's a very good chance that it's going to end up in the landfill, which is what we don't want.

Zak: Right, yeah.

Dan: So, let me circle back around to that too. Self funded via credit cards. That's gutsy. That's really, really gutsy. And I've heard of companies doing that. I love the fact that you've made so many mistakes, learned from them, grown from them, from your learnings and then gone ahead. I can't imagine any advisor would say, "Go ahead, rack up a bunch of debt on your credit cards." But I appreciate the vision and where you're coming from. So, when you did that, how scary was that for you? Were you able to stay on top of things, or once you started getting some traction on shelf, how did you get additional funding to keep going? Because I would hope that, I would imagine it was probably not all credit card driven.

Zak: Yeah, no. We ended up, similar to just the food industry in general, I hadn't raised any capital before. And with Little Duck specifically, one of my cousins was working for a guy that I knew was an investor. I ended up at another wedding, and I remember knowing that he was an investor. I had the product selling in probably a dozen stores or so. I made it a point to introduce myself to him at this wedding. I said, "I'd like to talk to you about my company. I heard you're an investor." He actually had never invested in any food companies. He was an investor in technology and a bunch of other companies.

But anyways, we ended up connecting after the wedding, and he ended up becoming our first investor. And through that process, I ended up learning how to raise capital. I had some very gracious mentors in the beginning that led me through the process of reading a terms sheet and understanding how to negotiate with investors and understanding there's so much that you just don't know until you know it type of thing.

Dan: True.

Zak: I think fundraising for me was something very early on that I wanted to understand better because I knew that was a gate for me to be able to continue to develop new ideas that I had. I never had personal money that I could invest in any ideas that I had. So I was relying upon just being scrappy. And whether that was credit cards or asking other people for money. I realize this wasn't really asking people for money, it was actually offering them an opportunity to be a part of an idea and seeing that idea come to life. And then obviously the intention through any investment is to actually make money.

So, I realize that it wasn't really asking people for money, it was more selling the opportunity and really painting a really big vision and picture around this specific opportunity, which was kind of the key to fundraising. And anyways, I learned all of that without going to school for anything like that. I was just doing it on the job as I went and kind of reacting to things that were happening within the company, and the needs that we had. We do that now, it's the same exact thing. It's like, we have a new challenge, we want to launch in a new country or open a retail store in a new state, or whatever it may be.

There's all kinds of challenges and this is really just business 101. But there's all kinds of challenges that you face that you're going to have to kind of overcome and then you build a team and you leverage your network and resources and all this stuff to solve for. Yeah, I'm very thankful for those early experiences because I think they taught me a lot of skills that I'm still using to this day.

Dan: Very inspirational. And I can see the tie back to being an architect and then being an engineer. And where I'm going with that is that the architect, I remember taking drafting classes in high school and a couple classes in college too. I love the creative side. And so, you're able to take that ability to create something, to dream big and design something and then turn it into something that people could actually benefit from. And then the engineering piece, from my standpoint, from my perspective, that's how you connect the dots. That's how you take it from a two-dimensional drawing into a three-dimensional package that someone's able to buy. So, all this makes sense how you were able to really leverage this. And I love the fact that you've been so resilient along the way.

I'm work with a lot of brands, Zak. Some of the many challenges that they face is, where do I go next? They get so stuck on one thing or hung up on, well, how do I do this or how do I do that, that they're not thinking about all the other things that they need to do. And obviously, you've figured out how to do this. I'm so thrilled that you're here sharing this with us today because this is inspirational.

This is exactly why this podcast exists and why I put out the content and as we're going to get to in a minute, this is exactly why I'm trying to teach brands like you are, how to be more effective in terms of getting their product either on to more retailer shelves whether it be online, on your online store, or Amazon or whatever, or on a traditional brick and mortar store. So, can you talk a little bit about how you sold Little Duck Organics and then you started Dirty Lemon? What was the genesis of that project? What caused you to want to go down this path to get into something totally different?

Zak: Yeah, so following Little Duck, I started an agency actually, which I ran for a couple years. And I always excelled in more of the packaging side of things. And when I sold the company, I had a lot of people reaching out to do consulting projects, and I decided to roll that into a small agency. We were working with entrepreneurs and established brands to create products, basically create consumer products. We would typically sit down with a brand and we would kind of collect information from them, do like discovery phase where we come up with and brainstorm some new ideas to present to them. And then, one of those ideas or several of those ideas we would move forward with and then we would create prototypes that were fully formulated and designed, and essentially ready to present to the buyer. 'Cause what I was trying to solve for in this process was, again, trying to access the consumer with innovative product faster.

So, my idea through the agency was not just to be a design agency, but to actually bring a product all the way to the edge of from going back to my past experience, to the verge of maxing out that credit card or like making that final production run, or that final product to buy rather, to order your packaging. I was trying to get concepts to that final stage. And then as soon as the buyer said yes, we can turn on the machines. We can get it to market very fast.

So, that's what we were selling to a lot of brands because that was actually the frustration with a lot of brands is that they would start the process with the buyer, they would present some high level ideas that weren't really fully formulated. And then they would have hiccups in the process of getting an idea that they had sold to a buyer to a place that was production ready. We were solving for all that stuff very fast before the product was ever presented to the buyer. And yeah, that was valuable to brands. But through that process, I learned that the agency world doesn't creatively fulfill me. Working on my own brands and my own projects is really seeing ... It was always just very disheartening to me to see an idea that we had worked on for a long time be handed off to a larger company and not knowing what would happen with that idea.

We created many dozens of products over a couple of years and I don't think that any of them are on shelf right now. And it's not because they weren't good products, but there's just a lot that happens. Creating the product is one thing, but then distribution and actually selling the product is something else. And that's something that we didn't have control over, which was ultimately why I wanted to start another brand. But the good thing was that through that process, I ended up building a network of manufacturers and not distributors, but manufacturers and different vendors that sell packaging material, and ended up doing a couple different beverage projects, and so was able to get to know a beverage production facility and the team there that ended up being our first co-packer for Dirty Lemon.

Basically through that experience, ended up thinking through as I was working with these other brands, all of these different ideas and I started sketching, I think it was probably the beginning of 2015, I started really thinking about Dirty Lemon. And the inspiration for Dirty Lemon really came through really seeing what was happening in this whole cleanse new movement, which started really with BluePrint funds. I remember still, I was in Columbus Circle Whole Foods and I remember seeing the bottles of BluePrint Cleanse being put on the shelf at $10 a bottle. And we were in Whole Foods all the time checking on our products. I still remember to this day, the guy putting them on shelf and me asking him, "Is that stuff selling, $9.99 a bottle?" And he's like, "Yeah, we can't even keep it on the shelf."

That was a moment that I really took with me that the elasticity of products in the beverage category specifically, everyone's always racing to bottom dollar where it's like, to get to mass. But we've kind of taken a different mindset that consumers, if you provide them a valuable product with functional ingredients, and that was the big key thing is that consumers that were buying BluePrint Cleanse were not doing a cleanse, they were actually buying the product with the intended result being a functional benefit to their body. So, they wanted to detox their body or they wanted to lose weight or gain weight, or all these different presented claims of the juice cleanse.

They were buying single one-off bottles to achieve that, which is not the way that BluePrint had ever intended on selling the product, but that's actually arguably I think where they achieved the most scale was in selling basically this idea of achieving the benefits of the juice cleanse through a single bottle purchase. And obviously, they were very successful, and now they sold the company to Hain.

But it always struck me that it was odd that the consumers that were buying juice cleanses, that they were never actually doing a cleanse. They were drinking a juice in the morning and then they were eating a salad at lunch and maybe doing a workout class in the afternoon. But then at nighttime, they would be having pasta and drinking wine. And I think that, I realize through that that it was all about balance. There was, you want to feel good about ... Everyone's going to eat ice cream or have a hamburger or eat pizza or whatever it is from time to time, but it's all about balance and making sure that you're offsetting that with something healthy. I think for a lot of people, that beverage or a cleanse type beverage did that.

So, Dirty Lemons is much less about cleansing. We have nothing to do with cleansing. We do have a charcoal product which was for detox and that was the first product that we ended up launching on kind of as the anti-cleanse. So, we really wanted to reinforce this idea that we're going to present you a product that fits into your lifestyle with functional ingredients that have a significant benefit. And that was really the basis of the Dirty Lemon brand. And then we subsequently ended up launching collagen and ginseng and matcha.

Now, we have a lot of products that are with highlight ingredients that present obviously functional benefits depending on what the ingredient is. And the brand is all based around convenience and making sure that it fits into your lifestyle seamlessly because what we were observing with Dirty Lemon, and I know I'm jumping ahead a little bit, but what we were observing in advance of launching the brand was that a lot of these ingredients that were kind of on the bottom shelf of natural food stores for a really long time kind of were coming in and out of fashion with consumers seasonally or annually. So, you look at chia seeds or turmeric or matcha, even. These are things that have been available in natural food stores for a very long time. But then, consumers, for whatever reason they didn't have access to them, or they weren't available. They weren't popular in a mainstream way.

So, our idea was to kind of spot these trends early and put them into a beverage that took the guesswork out of consuming some of these ingredients. Instead of having to take a collagen supplement that you put into your smoothie or have an activated charcoal pill that you would drink after a heavy meal or eat after a heavy meal, our idea was to take the perfect amount of that ingredient, blend it with a familiar flavor profile, which for Dirty Lemon is the lemon base, and present it to consumers as a convenient way to be able to take advantage of functional ingredients. Yeah, that was very successful and I'm sure you'll want to cover some of that. But that whole idea and that mindset of presenting convenient access to functional ingredients through a ready to drink beverage

Dan: I think it's really interesting. I do a lot of work, or I've done a lot of work in the supplement space. And so a lot of the raw ingredients that you're talking about, the core ingredients, that's what you find especially the whole food vitamins. What I'm getting at is that those are where the future of supplements are. Consumers to your point want products that they can know, like and trust. They want to be able to use these products different than the way that they'd been used previously before. So, I see a lot of opportunity for this. In fact, we drink a lot of matcha tea and collagen and so on and so forth. So, I get it. I get it completely. Why Dirty Lemon, why that name? Is it because it's a lemon base?

Zak: Yeah. Dirty Lemon, the name. I get this question a lot and I don't have a really solid answer. I mean-

Dan: Just make something up.

Zak: Similar to a dirty martini or something like that. We kind of look at ... So the base of every one of our products is lemon juice, ocean minerals and sea salt. That's the lemon base. And then what makes it dirty is the functional ingredients, whether that's collagen or ginseng or rose, or whatever it may be. We have eight beverages now. CBD, which is our latest. It's like there's something added to it that kind of gives it that added boost, or that functional benefit.

So, yeah. That's it. It's a really straightforward name, but I think that over the course of the last few years, it's come to represent a lifestyle and we've done a really good job of building brand awareness around the Dirty Lemon brand and I know the consumer very much resonates with the products that we're offering and the lifestyle, the balance and convenience and obviously continued access to innovation.

Our goal this year was to launch one beverage every month for the foreseeable future, and we're doing that right now. So, we just launched CBD. We have a turmeric beverage coming out next in September. And yeah, it's very exciting to see now all of this past experience realized in a way that we're able to actually present products to consumers in a very convenient way. We should talk also about ... So, the entire company and the platform was developed with a very heavy technology component. I would actually say that we're probably more, at this point, of a technology company than we are a beverage company. But we developed a platform, which enables consumers to place orders for our products exclusively via text message, so they have direct access to the brand at any time. And all of the ordering happens over SMS. We have a website and we have obviously web presence and social media and all that stuff, but when it's time to place an order for the product, that starts basically the process of us developing a relationship with you. And through that process, we're collecting data on customer preference and consumption behavior and all this stuff. And this is data that all of the large beverage companies have never had access to.

And that's what is really the most compelling part of Dirty Lemon is that through the process of connecting with consumers, we've actually developed an alternative direct channel of distribution, so we're not selling any of our products in Target or Whole Foods or any of the channels that I previously sold into. We're actually focused now exclusively on building that direct relationship with customers and being able to provide them the best quality experience possible, which we believe happens through our ability to manage the point in which they find out about the brand through to when they receive the product and all those steps in between. So, yeah.

Dan: I think that's brilliant. I love the idea. In fact, I love the idea that you've been able to figure out a way to carve out a niche, create a disruptive niche, create a disruptive brand, disruptive, I guess, community around what you're trying to do so that you're not having to be reliant on, like you said earlier, that you go to a buyer and you've got to wait to get the product on the shelf and it takes a lot of time, and all of the challenges and the bottlenecks and the issues. Whereas you can your product into a consumers home virtually instantly. So, I think that that's really great. And the fact that you're creating a database to help you better manage your data, really think that's amazing too. That's brilliant.

And then that you're building, I'm assuming, it sounds like you're building everything just in time. You don't have a warehouse of products sitting around some place getting old while you're waiting to sell it, but rather you're able to build what you need based upon forecast needs et cetera. Is that correct?

Zak: Yeah. I mean, we've ... because ... and this has taken some time, but now we're at a place where we produce a product multiple times per week in multiple different locations. And yeah, we're producing enough to meet demand. And then if we need to, because we're producing so frequently, if we need to wrap our production on any given week, we have this system worked out.

I mean, this is a very operationally complex business because we've essentially merged together not only a beverage company, but also an entire distribution in logistics infrastructure that you would find with or whatever it may be. Where we've merged that together and we've merged together obviously production as well. So, yeah. We are just in time right now. We haven't had a production run spoil in well over a year, which is great. We're not overproducing. We're selling enough.

Dan: Good.

Zak: Actually sell out of all of our production runs, which is a huge for anyone who's in food. There is a lot of waste early on because you unfortunately just don't have the sales demand to justify all the units that you need to produce right off the bat. But yeah, so we've done incredibly well at managing operations and logistics in a way that has ultimately allowed us to, like I said before, provide an amazing experience to the consumer. A lot of that is with the ... Because we're producing it so frequently, the customer's getting a really fresh quality product.

Yeah. There's so many benefits to doing business this way and I'm very proud of the fact we were very much early front runners, if not really the leader in this race to kind of bypass the traditional distribution network. I think before us, there was ... Soylent - did an incredible job of building a fanatical following and fan base or customer base. And they really kind of, I think, in the beverage space led the way. They're not focused as much now on direct consumer.

What they built very early on was very inspirational and they'd told me that if we could merge together the loyal following of this brand and then kind of merge it with this, and we apply to it this demographic, that there's opportunity there. And there certainly has been, which has given us a lot of momentum and yeah. It's a very exciting business to be building right now because like we talked about before, there's just so many changes happening in the industry right now.

Dan: Well, you should be very proud of it. I'm impressed. Hats off to you. I think that this is brilliant. I mean, the fact that, and I talk about this a lot of content my classes, all of the podcasts et cetera where you first have got to meet the consumer where they're at. And you've got to develop a loyal following. Once you do that and you provide real value, which you're doing, then you're a lot more to a retailer than an ATM machine or to a broker to a distributor, whatever.

My point being is that delivering real value, consumers will pay a premium, in some cases even a super premium for products that best meet their needs. And by the way, that was episode number nine where I talked to Kelly Williams and Tom Dunn. And actually, I was a keynote at one of his events, talking about packaging and how important that is. The reason I wanted to bring that back up again is because you said early on that you had to borrow on a credit card to buy packaging to be able to support what you were doing.

And so anyone who's listening, if you're not aware of this, you have to buy the packaging ... The old way of doing it is you buy the packaging, you set on what it is you're going through it, but you've got to have a lot of extra sitting around so that you can continue to make products and survive and grow and whatever else. But you've got to spend that money upfront. Whereas what I was talking to Kelly and his friends about is more of a just in time model. And so, that's changing that equation. But what you've done, absolutely love the fact that you've been able to develop a just in time model that takes the product from the factory and delivers it to the waiting consumer almost instantaneously.

So when you're doing that, when you're setting it up, you made the comment, if I heard you correctly, that you're looking to get into retail. Why, first of all? And then secondly, what are you thinking about doing? Where do you want to go with a brand if you are thinking about a retail play?

Zak: Yeah, so when I say retail, it's not the retail that we're both used to, which is brick and mortar retail, which is Whole Foods and Target. We're using retail, our own curated retail experience, as a way to market the products and actually connect with consumers on a deeper level. So, we launched-the brand on social media. We were on Instagram first and we built a following there and then we expanded our presence to other platforms. But being a digitally native brand has a lot of benefits, but also there is that lack of a connection with the consumer. As you know, the grocery industry or food and beverage rather for many years, a lot of brands expand its growth through demos, right? Where you can have a brand rep or someone directly from the company basically sampling the product and communicating with the customers, and really teaching them about the product and the brand and everything else. We look at retail as kind of our way of connecting with consumers physically and teaching them about our products, but doing it in a way that's relevant to them.

So, last year in New York City, we opened a retail store in Nolita and we basically, we've taken a lot of inspiration in the Dirty Lemon line from the cocktail community. Different craft cocktails share a lot of the same structure as the Dirty Lemon beverages. We're using fresh lemon juice and muddled ginger and sea salt, and all of these different ingredients that are actually very common in cocktail bars. We decided to open up a cocktail bar of our own.

We called it The Drug Store and we had bartenders making homemade versions of all of the Dirty Lemon beverages behind a bar. We did that all of last summer, and it was incredibly successful. We had the food network come and film a show there. We had several different, actually like music videos and different things that were shot there because it was such an iconic space. We had celebrity bartenders. It was just a very fun summer activation. We were all really kind of sad to see it go at the end of the summer. We had previously only did it for a summer just to test out the concept. We closed it down at the end of the summer and we really immediately started thinking about how we could bring that concept back and what we would do differently. We're really excited to announce that we're going to relaunch the product ... or, I'm sorry, the retail concept in Tribeca this fall.

Dan: Great.

Zak: So, that same craft cocktail experience and that same ... What consumers were able to experience last year, we're going to have open actually for an extended period of time this year and yeah, we're very excited for it. There's several layers to The Drug Store, which if you're ever in New York City, we'd love to take you through. But it's going to be a very exciting launch for the company. That's an experience that we're looking to take to other cities. It's becoming a much more relevant now part of our total strategy to market the products to consumers.

Dan: If you've got some content links et cetera, pictures of what you did before your prior event, I'd love to put those in the show notes and in the podcast webpage. So, if you could send that to me, that'd be great.

Zak: Yeah.

Dan: I think that sounds amazing. It sounds like a lot of fun. So, you're having a great time doing this. That's what I really enjoy. I'm enjoying listening to you talk about is that this is fun. This is no longer a nine to five, got to punch the clock. This is something that you were looking forward to. You were using your creative, your engineering, everything else and you're being able to really dream big. Again, my hat's off to what you're able to do. The concept is amazing. I mean, in terms of the way you're putting this together.

When you think about mission driven brands, everyone's really struggling with the packaging. How do we get around that? Zak, I appreciate you sharing everything with us. Is there anything left that you want to share that we haven't discussed today?

Zak: No. I mean, we covered a lot. I would encourage everyone ... We'll be opening The Drug Store early September. By the time this podcast is out, we'll have it open and I would encourage everyone to come by and grab a bottle of Dirty Lemon. Yeah. Outside of that, I truly appreciate the opportunity to share our story, and yeah. On the packaging side, if anyone in the packaging space wants to shoot us an email, we'd love to learn more about the latest innovation and technology in the packaging side of things. Yeah. I think that that about sums it up for us. A lot of big things to come with Dirty Lemon.

Dan: It sounds like you've got so many things that are on the horizon and that you're working on. So, again, thrilled that you made time for us today. Thank you so much, and I wish you all the success and I'm certainly looking forward to hearing about The Drug Store when it opens in September.

Zak: Cool, thank you very much again and have a great day.

Dan: I want to thank Zak for coming on the podcast today and for sharing his insights. More importantly, I want to thank Zak for coming on and candidly sharing the fears and the frustrations, the challenges and all the different things he faced and how he overcame them. How perseverance and curiosity helped him overcome all of his challenges and build two amazing brands. I'll be certain to put a link to Dirty Lemon on the podcast webpage and in the show notes. You can get there by going to brandsecretsandstrategies.com/session86.

Today's free downloadable guide is my retail scorecard. This would've helped Zak immensely, and it'll help you too. What it is is probably the most under utilized, but yet most impactful tool any brand should have in its arsenal. It helps you identify not only what needs to happen to achieve any objective, but more importantly, it helps you identify who's going to be in charge of it when it needs to be done to keep you on track, to keep you focused and to help you achieve your objectives. You can get it instantly by texting “retailscorecard” to 4422 or by getting it on today's podcast show notes. Again, I appreciate your listening, thank you for being here and I look forward to seeing you in the next episode.

DIRTY LEMON https://dirtylemon.com

DIRTY LEMON is the first consumer brand in the world to sell products exclusively via text message -- We’re harnessing the power of natural conversation and machine learning to change the way consumers buy beverages and interact with brands. Our unique SMS-based text-to-order system allows for seamless communication between customers and the company, frictionless reordering, and--above all--instantaneous insight into the trends which drive purchasing behavior with new beverage products. The company is backed by an incredible team of thought leaders & innovators, aligned around a compelling vision to disrupt the ($100b+) beverage industry.

The Drug Store, a retail concept located in Tribeca, personifies a walk-in vending machine where customers are able to purchase single bottles on the go without ever taking out a credit card. Rather, the customer’s cell phone is the “register.” It will be open daily from 7a - 8p and is located at 293 Church Street NYC

This episode's FREE downloadable guide

Scorecards are powerful goal setting tools. You’ve probably heard that “what gets measured gets done”. Scorecards map out objectives in bite-size manageable chunks that keep you on-track and focused. They're what you need to succeed.

CLICK HERE TO DOWNLOAD YOUR FREE STRATEGIC GUIDE: Retail Scorecard

Thanks again for joining us today. Make sure to stop over at brandsecretsandstrategies.com for the show notes along with more great brand building articles and resources. Check out my free course Turnkey Sales Story Strategies, your roadmap to success. You can find that on my website or at TurnkeySalesStoryStrategies.com/growsales. Please subscribe to the podcast, leave a review, and recommend it to your friends and colleagues.

Sign up today on my website so you don’t miss out on actionable insights and strategic solutions to grow your brand and save you valuable time and money.

I appreciate all the positive feedback. Keep your suggestions coming.

Until next time, this is Dan Lohman with Brand Secrets and Strategies where the focus is on empowering brands and raising the bar.