Home Stock market Episode #336: Startup Series – Hugh Thomas, Ugly Drinks, “This Is The Result Of Two 23-Year Olds In A Pub In London Having A Couple Of Beers” | Meb Faber Research

Episode #336: Startup Series – Hugh Thomas, Ugly Drinks, “This Is The Result Of Two 23-Year Olds In A Pub In London Having A Couple Of Beers” | Meb Faber Research

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Episode #336: Startup Sequence – Hugh Thomas, Ugly Drinks, “This Is The Outcome Of Two 23-12 months Olds In A Pub In London Having A Couple Of Beers”

 

 

 

 

 

 

 

 

Visitor: Hugh Thomas is the co-founder and CEO of Ugly Drinks. Use code UGLYMEB for 20% off your order. 

Date Recorded: 7/7/2021     |     Run-Time: 46:02


Abstract: In as we speak’s episode, we hear how Hugh fell in love with the beverage business a lot that he began an organization to offer folks with a wholesome drink at an reasonably priced worth. What began with him strolling round London to promote drinks one retailer at a time has now reached over 15,000 shops across the globe! Hugh shares the story of the model and advertising and marketing with the ‘ugly’ title, why there’s such a necessity for a wholesome drink out there, and what it was prefer to embrace direct-to-consumer throughout COVID.

As a particular provide for listeners of the present, go to uglydrinks.com and use the code UGLYMEB to get 20% off your order.


Sponsor: The Idea Farm offers you entry to over $100,000 value of investing analysis, the type often learn by solely the world’s largest establishments, funds, and cash managers. Be a part of as we speak and get entry to quarterly CAPE ratios, an excel quant backtester and your complete analysis library. And better of all, there’s a 30-day free trial interval.


Feedback or strategies? Electronic mail us Feedback@TheMebFaberShow.com or name us to go away a voicemail at 323 834 9159

Fascinated about sponsoring an episode? Electronic mail Justin at jb@cambriainvestments.com

Hyperlinks from the Episode:

  • Sponsor – The Idea Farm
  • 2:00 – Intro – Go to uglydrinks.com and use the code UglyMeb to get 20% off your order
  • 3:03 – Welcome to our visitor, Hugh Thomas
  • 4:39 – His profession within the beverage business
  • 10:21 – What impressed Hugh to start out Ugly Drinks and the way he began making the primary samples
  • 13:20 – Ugly Drink’s first taste and the way it was obtained by the general public
  • 14:18 – Studying the well being and security rules aspect of the enterprise
  • 16:35 – How he constructed out the sale channels for the corporate
  • 19:18 – Deciding on taste profiles and constructing distinctive takes on classics
  • 21:28 – Caffeinated choices and direct-to-door supply
  • 23:00 – The origin story of the title
  • 27:35 – Distribution by way of brick and mortar shops within the US
  • 29:19 – Direct-to-consumer, retail and eCommerce development
  • 31:05 – What the previous yr of the pandemic has been like for Hugh
  • 33:31 – Issues in regards to the environmental affect of aluminum cans
  • 35:29 – Mocktails and ideas on entering into the cocktail recreation
  • 37:00 – Plans for the long run and elevating Sequence A funding
    38:56 – What they’re planning for Ugly as they give the impression of being out to the horizon
  • 40:07 – A number of the weirdest taste requests they’ve needed to date
  • 41:17 – Probably the most memorable a part of Hugh’s journey
  • 42:13 – Study extra about Hugh; uglydrinks.com; Instagram, Twitter and TikTok @uglydrinks; Hugh on LinkedIn, Twitter, Instagram; @uglyhugh

 

Transcript of Episode 336:

Sponsor Message: At present’s episode is sponsored by The Idea Farm, my very own personal, curated analysis service that offers buyers entry to analysis studies typically utilized by the world’s largest establishments, funds, and cash managers. These studies come from a few of the most revered outlets in investing, a lot of them costing hundreds of {dollars}. We additionally ship our favourite investing podcasts from the previous week, and so you possibly can make sure to solely hearken to the most effective of the most effective. Additionally included within the subscription, we ship out our quarterly valuation updates just like the CAPE ratio, so you possibly can see which nations look like the most affordable for brand spanking new funding {dollars} within the inventory markets all world wide. We even have the Quant backtester, which lets you consider numerous strategic and asset allocation methods going again in time. So all this may be yours with a subscription to The Idea Farm, and better of all, you possibly can strive it out for a free, no-risk 30-day trial. Are you prepared for an investing edge? Go to theideafarm.com to study extra.

Welcome Message: Welcome to the “Meb Faber Present” the place the main focus is on serving to you develop and protect your wealth. Be a part of us as we talk about the craft of investing and uncover new and worthwhile concepts, all that will help you develop wealthier and wiser. Higher investing begins right here.

Disclaimer: Meb Faber is the co-founder and chief funding officer at Cambria Funding Administration. As a consequence of business rules, he is not going to talk about any of Cambria’s funds on this podcast. All opinions expressed by podcast individuals are solely their very own opinions and don’t mirror the opinion of Cambria Funding Administration or its associates. For extra data, go to cambriainvestments.com.

Meb: Welcome, podcast listeners. At present we have now one other episode on our podcast Founder Sequence the place we invite kick-ass entrepreneurs to speak about their experiences from the entrance strains of beginning an organization. We cowl every little thing from newly minted startups nonetheless struggling to make it out of their storage all the best way to the elusive unicorns which are both remodeling conventional enterprise sectors with progressive concepts or creating solely new ones by way of cutting-edge applied sciences. Both approach, the consequence might be whole catastrophic failure and chapter or tons of of hundreds of thousands of {dollars} of income and a valuation value north of a billion {dollars}. Pay attention in to listen to the tales of blood, sweat, and tears as these founders tried to vary the world. As a disclosure reminder, I’ve invested in most if not all of those startups and can look to take a position extra as they proceed their startup journey. Please benefit from the subsequent episode on our Founder Sequence.

Meb: What’s up, y’all, we bought an effervescent present for you as we speak. You’ve undoubtedly heard or seen this model earlier than as I drink their water in virtually each episode over the previous yr. Our visitor is the founding father of Ugly Drinks, a beverage firm that makes drinks with no sugar, no sweetener, no energy, and is making an attempt to reveal the ugly fact about massive beverage. In as we speak’s episode, we hear our visitor fell in love with the beverage business a lot he began an organization to offer folks with a wholesome drink at an reasonably priced worth. What began out with our visitors strolling round London to promote water one retailer at a time has now reached over 15,000 shops across the globe. Our visitor shares the story of the model and advertising and marketing with the Ugly title, why there’s such a necessity for a wholesome drink in the marketplace, and what it was prefer to embrace direct-to-consumer throughout COVID.

As a particular provide for listeners to the present, go to uglydrinks.com and use the code UGLYMEB to get 20% off your order. Once more, that’s uglydrinks.com, and use the code UGLYMEB for 20% off your order. I promise you’ll love these waters. Please take pleasure in this episode with Ugly Drinks’ Hugh Thomas. Hugh, welcome to the present.

Hugh: Meb, thanks for having me. It’s a pleasure to be right here.

Meb: The place do we discover you as we speak?

Hugh: So, regardless of the accent, I’m within the U.S. I reside right here in New York, in Brooklyn. Been right here about 4 years. Yeah, it’s good to be chatting to you.

Meb: You might be reworked right into a hipster, you bought a beard already, I think about ingesting a $10 espresso. I like Brooklyn. I miss New York. I can’t complain in regards to the espresso costs, I reside in L.A., so. When’s the final time you’ve been residence to the U.Okay.?

Hugh: Truly, due to COVID, I’ve not been again in virtually two years at this level. So hopefully they carry a few of these restrictions within the subsequent month or so I will get again and see some household and buddies. However I believe I’ve been right here in my residence operating Ugly for the final 18 months at this level like many individuals I’m certain listening or watching.

Meb: So we’ve been badgering to get you guys on the present. You guys match right into a class for buyers of what I type of name the Peter Lynch technique of choosing shares. And also you don’t know this however I’m a quant. So every little thing I do is computer-based apart from product firms I have a tendency to like and there’s solely been a few dozen of those. And I’ll put you in the identical class again within the day of Lyft, Not possible Meals, HotelTonight. And now Ugly Drinks, so that you’re in good firm. In prep for the present, I’ve a…what do we have now as we speak? I bought the orange soda, listeners, and I bought a cherry, and we’ll discuss all about this. Longtime listeners most likely have seen me crack these throughout many a podcast and suppose I’m simply crushing beers for the previous few years as a result of, you recognize, the can is putting, but it surely’s truly glowing water, y’all. All proper, let’s hear about your origin story. You began off within the coconut water world or one thing like that. Give us slightly rewind.

Hugh: Yeah, so clearly, grew up within the U.Okay. Once I was a pupil at college, I used to be the Vitamin Water man. So you bought…you bear in mind the model, the colourful liquids for 50 Cent that bought to Coca-Cola. Once I was 18, I used to be the man with an residence filled with Vitamin Water drinks. Like, I had a sofa made out of the Vitamin Water circumstances that have been delivered to my residence. In order that was my first slight foray into beverage and that’s after I fell in love with it. I used to be attending events, giving out drinks at halftime at school sports activities occasions. I used to be giving out drinks in college libraries when folks have been revising for and learning for exams. And I simply fell in love with the variety of contact factors.

After which after I left college, I went to work in a giant CPG. So I labored for Heinz ketchup. I used to be within the European advertising and marketing crew there, which is clearly an enormous model, I realized so much about how massive enterprise runs the entire processes, the best way they use knowledge. However clearly, being younger and entrepreneurial, I used to be annoyed by that. Didn’t have a beard at the moment both. I used to be truly very clean-shaven and wore a go well with to work. I’m now very totally different to that. Realized an enormous quantity however working in a giant firm, wished to eliminate a few of the course of that I felt was stifling me. And now paradoxically, I’m making an attempt to introduce most of that course of again to our startup.

So I left Heinz to hitch an upstart beverage firm referred to as Vita Coco, the coconut water enterprise. And Vita Coco was exploding right here within the U.S. after which was launching in Europe and the Center East. So I used to be the primary advertising and marketing rent there, I used to be in a crew of 4 folks in a tiny workplace in London. We grew that enterprise from lower than half 1,000,000 income to $50 million income within the Four years I used to be there. We launched in 45-plus markets throughout Europe, the Center East, we launched in South Africa, we launched all throughout Western Europe, all throughout the U.Okay. We went as far east as Pakistan and many totally different markets the place we took coconut water to. And I used to be fortunate sufficient to spend time not solely in these markets but additionally visiting New York’s head workplace right here. After which additionally I used to be fortunate sufficient to go to Tokyo and see the model launch in Japan as properly.

So I actually type of noticed what it meant to be a part of a worldwide drinks firm, and I fell in love with it. I like beverage. I like the best way once you maintain a can or a bottle, it says a lot about you. And I like the best way working in that crew felt like being on a sports activities crew. Everyone has a special place, it’s a must to have a stability of EQ and IQ in beverage. Not everybody can handle the books and do the accounting. And never everybody can stroll right into a retailer within the Bronx and promote a case of coconut water to a retailer supervisor. So you want to have a mix of personalities and a mix of traits with the identical type of cultural DNA, and I discovered that fascinating.

After which I suppose the final a part of the origin story of Ugly is that I started to be actually conscious of sugar and sweetener in beverage and the way massive of a problem it’s. My mother is a diabetic nurse again within the U.Okay. and he or she all the time taught me you’re what you drink as a lot as what you eat. And the way most of the sufferers she was seeing who have been newly identified with Kind 2 diabetes have been due to overconsumption of hidden sugars, and particularly in soda. And I appeared into it, and I used to be like the scale of those markets is so massive. Within the U.S., it’s a $90 billion soda market. Within the U.Okay., it’s virtually a $10 billion soda market. And that’s simply two nations. I imply, you have a look at locations like Mexico, the capita consumption of soda merchandise is off the size.

And I checked out it and everyone was speaking about well being being a development. And also you truly notice that weight problems and folks being obese percentages have elevated because the ’70s like in an insane quantity. I believe within the U.Okay., 6% of individuals are overweight in 1976 and in 2016, it’s extra like 30%, 20% of 12-year-olds within the U.Okay. are actually overweight. And it’s simply you have a look at this stuff and everyone’s speaking about investing in wholesome foods and drinks and pure foods and drinks. And I simply felt so a lot of these issues are costly. So many wholesome merchandise are 5 bucks, 10 bucks, 5 kilos to purchase, obtainable in Santa Monica, Manhattan, and London. And actuality, individuals are common folks working exhausting for his or her cash, selecting merchandise that they will afford. Definitely, during the last 12 months, folks have actually been squeezed on their revenue. They should make wholesome switches which are reasonably priced and accessible. They usually wish to purchase from manufacturers that talk to them like common folks.

And so I grew to become obsessive about this concept of taking over massive soda with a model that was wholesome however positioned like a soda. And spoke to folks prefer it was your pal and didn’t inform you you wanted to go and do yoga and Pilates and drink a inexperienced juice to be wholesome. You possibly can drink glowing water and drink extra water and eliminate 40 grams of sugar from a soda each time you swap a can out. That was, type of, the actual driving power. And every single day after I get up now I’m enthusiastic about how we slowly introduce extra shoppers to water and get folks ingesting water as a result of it’s enjoyable and refreshing versus ingesting soda, and in order that’s what I’m motivated by.

Meb: That’s humorous. I imply in the event you suppose again within the U.S. after I was rising up, used to have this meals pyramid the place on the backside was like you want to get 10 servings a day of pasta and bread and like grains. And hey, as a wheat farmer, I’m okay with that, however as somebody who understands slightly bit about vitamin, that’s most likely the inverse of what you need it to be. And data compounds over time, we realized some issues. I grew up ingesting soda. I imply, my God, I bear in mind even being in school and I might put down like six Food regimen Cherry Vanilla Dr. Peppers a day after I was interning. And folks can be like, “Meb, however you recognize that food regimen’s no higher for you.” I’m like, “Look, I’m very conscious. I simply love…I believe I like the bubbles and I like that there’s a special style than the water and, in fact, spring a great deal of caffeine.” Anyway.

So okay, you got here up with this concept, you’re like, “Look, this area, it’s so apparent.” I imply, it’s considered one of this stuff that’s identical to, “Look, sooner or later, you’re not going to be ingesting the sugary drinks. It’s epidemic, actually right here in addition to elsewhere.” However what gave you, form of, the chutzpah, I don’t know, inspiration of claiming, “Possibly I could make my very own drink?” And the way did you begin doing it? Are you simply in your kitchen beginning to experiment? How did it even get began?

Hugh: No, that’s loopy wanting again. I imply, I used to be 23 on the time in a small residence sharing with different folks in London, nonetheless in a full-time job. Had this concept and flavored glowing water existed within the U.S., however there’s nobody doing it in a can in Europe. And clearly, I used to be all the time bold about going international with this, which ultimately introduced us right here. I began with the very first thing I did, which is a hack I all the time inform new entrepreneurs, we’re organising a pretend area title and having an e-mail deal with that wasn’t my Hotmail or Gmail. As a result of I used to be discovering folks weren’t replying to my Hugh Thomas no matter embarrassing Hotmail deal with that I’d created after I was 15 or one thing like that.

Meb: It’s humorous you talked about that as a result of, like, there’s a component now the place in the event you’re advertising and marketing to a selected demographic, aka older, rich folks, you truly need the AOL addresses, I believe as a result of it identifies as being anyone who’s outdated and doubtless has some huge cash. Anyway, preserve going.

Hugh: I used to be emailing factories and co-packer buyers, and I used to be CEO of no matter holding firm we created on the time and that began to open doorways for us. So folks felt we’re severe that I used to be the CEO of an organization, though I used to be sat in my bed room in London. And simply began utilizing Google to grasp methods to begin an organization. Like very merely, I had no thought what I used to be doing. All the things’s been becoming a member of the dots and self-taught throughout.

Clearly, I had a little bit of expertise in beverage after I was younger. I assumed I knew what I used to be doing, however discovered, began batching up drink, began experimenting with merchandise began studying about meals science and complexity of co-packing. Then realized the minimal order portions of constructing merchandise like this, which was like, oh, okay, I don’t have that a lot cash to supply that a lot product. Which is my first expertise of understanding the necessity to increase capital and Ugly is the results of guys of their early 20s studying as we’re going.

So there’s quite a lot of errors we’ve made alongside this course of. However we’ve additionally realized from quite a lot of our errors. And one of many issues we all the time discuss is being stoic. And there’s a guide by Ryan Vacation, “The Impediment Is The Manner.” And any of these errors long-term in the end turned out to be issues which have taken the enterprise within the route we’re in now. So sure, it’s been a wild journey, began initially, very first manufacturing run, did a small household and buddies funding spherical, type of folks my dad performed golf with, uncles and aunties, everyone put a small sum of money and we didn’t rise a lot in any respect, did a manufacturing run. After which it was a case of strolling round central London knocking on doorways making an attempt to promote drinks, and that’s the place it began. And as we speak, we’re in 15,000 shops world wide. And I’ve bought on-line in every single place however…

Meb: What was the primary taste, do you bear in mind?

Hugh: So we did a spread, we did a lemon-lime and we did a tropical-flavored grapefruit and pineapple drink within the U.Okay. And we launched that into Selfridges, which is the massive division retailer in central London, which is our very first cease store. So not a nasty place to launch. They’ve a meals corridor there. And we actually walked into the workplace within the constructing, knocked on the door and dropped samples off to get that itemizing, there was no magic behind, it was as a lot of a hustle as that. And once we first launched in that retailer, we did demos, we did samplings in-store every single day.

And we truly met our first greater buyers doing that demo. They have been strolling by way of the meals corridor on a lunch break, noticed us pitching it, didn’t inform us who they have been, after which we bought an e-mail a few weeks later, and now they’ve been our lead investor till as we speak. So that you by no means know. There are moments of serendipity and inside the enterprise, did we get fortunate or will we create our personal luck? I imply, who is aware of? However that’s how we began, actually.

Meb: So how does one go about…I imply, the good half about you as a founder is you’ve type of been by way of it slightly bit. You chop your tooth with some Vitamin Water, hanging out with 50 within the membership, slightly bit the coco drinks, which was my favourite, coconut water. I believe that was the most effective of the lot.

Hugh: Yeah, I nonetheless prefer it.

Meb: How does one even go about beginning to create a few of these? Like, I assume there’s some fairly important regulatory high quality management conditions the place you’re like, “Yeah, I simply raised a pal and household and began promoting soda.” Nevertheless it sounds so much less complicated than it most likely was.

Hugh: I believe with some foods and drinks manufacturers, you possibly can possibly produce it in your kitchen with some well being and security regulatory stuff and make some jars of peanut butter or chutney or jam or no matter you’re going to take all the way down to the native farmers’ market. Once you’re speaking about cans of beverage, it’s much more scientific, clearly. And I didn’t have a full canning line inbuilt my residence. So step one for us was discovering somebody who had a type of canning strains. A number of co-packers mainly stated, “No, we don’t wish to work with you guys, two 23-year-olds,” me and my co-founder, Joe. “Two 23-year-olds knocking on our door, you’ve by no means performed this earlier than.”

Enjoyable truth is we now work with all these co-packers, so now they’ve modified their thoughts 4 or 5 years later. However on the time, it was like who’s going to work with us who could make this for us? Finally discovered a small co-packer, satisfied them to work with us, ordered the primary batch of cans, needed to pay upfront for half the product, which was painful, like utilizing quite a lot of that investor’s cash. After which we had a warehouse filled with drinks and checked out one another and stated, “Properly, higher promote this then.” And it’s one of many causes we began promoting on-line so early was that we had a fairly good Instagram account early on, simply naturally telling the story by way of Instagram.

And we had folks throughout the U.Okay. discovering us and realizing they’d a zero sugar various to sodas that they might order. And so we stated, “Properly, let’s arrange a Shopify web site.” That is in 2016, ’15, ’16. So within the final 12 months, everyone’s promoting B2C, however on the time, I believe it was simply mattresses and razor blades being bought direct-to-consumer. However we felt we may convey that to beverage. And we simply began constructing out from their one retailer at a time, one buyer at a time on-line. And ultimately type of actually constructed up some momentum to type of rebrand, introduce extra flavors, after which increase capital to increase the enterprise.

Meb: I used to be making an attempt to determine how I got here throughout you guys. And I do know I used to be tweeting about y’all and a few of these different merchandise that I like, meals and type of cooking style. And I believe the unique approach I ended up shopping for a few of your drinks was by way of Amazon. After which now you possibly can simply purchase them out of your web site, which I don’t suppose was all the time the case. Are you able to give listeners slightly instance of the way you constructed out…? As a result of it appears unusual, I believe, for lots of people to be like, “Hey, I’m going to purchase glowing water on-line.” However we get it on the workplace the place we’ll get like eight circumstances that come into the workplace, so.

Hugh: Yeah, you guys are good clients. Yeah. So for me, after I first moved to the U.S., particularly, I’d stroll round a grocery retailer and also you’d see folks type of placing circumstances and circumstances of glowing water within the trunks of their automotive. Once I first moved to New York, I spotted that in the event you reside in a fifth-floor walkup in Manhattan, the concept of carrying 48 cans of seltzer up 5 tales isn’t that thrilling. So is there a world during which you simply set and neglect and subscribe in your workplace or your own home, your self, to supply? I imply, it’s one thing that everybody within the household drinks, you wish to load up the fridge, it’s not overly costly. And also you simply need folks to drink cans and cans a day, proper like, you do in your workplace. As soon as it’s there, folks take pleasure in it. It’s not unhealthy for anybody.

And in order that’s why we actually determined to introduce the direct-to-consumer providing. And we’ve added to it as we go. And now one of many attention-grabbing issues we do is provide distinctive flavors simply to that group. So in the event you’re signed on to our mailing checklist or our textual content message checklist, you’ll get early entry to the flavour of the month and we create a brand new taste each single month on our web site. At present, we simply introduced our butterscotch taste of glowing water, which has gone reside this afternoon. And it’ll promote out within the subsequent couple of days. We’ve performed cherry cola, we’ve performed marshmallow, we’ve performed a root beer flavored, grape soda, all zero sugar, zero sweetness.

And it simply what it’s performed for us is create this wonderful group of those that come to us immediately, get our emails, they reply, we have now interactions with them. We truly crowd supply a few of these flavors, too. So we requested our followers what flavors they wished to see from us and we’ve made them. So truly listening, we’re having a special relationship. And that’s very totally different to the suggestions course of that if we have been to place this product, which we do as properly, however in shops, it’s very exhausting to speak one-to-one with somebody who’s picked up your case and actually perceive why they did it, what they like about it, which flavors they’d prefer to see from us subsequent.

And so direct-to-consumer has been type of a giant core by way of constructing our group and getting the phrase on the market, which is how we’re having this dialog is discovering us on-line, assembly. I imply, the actual fact we’re on this name and I began this in my residence in London, type of, 5 years in the past is weird. The web has made this occur, proper. And so we’ve been leaning on the web ever since we began the enterprise.

Meb: Properly, I’m not going to lie, the butterscotch sounds completely atrocious. However we’ll strive it. We’ll undoubtedly get it. I didn’t even know subscription was a alternative. We’ll undoubtedly get signed up. Grape soda, oh man, that’s bought out. That seems like one thing…new grape. I bear in mind ingesting new grape as a child. Marshmallow, root beer, all proper, you’re going to need to put my request. You formally get to place my request, the food regimen…it’s not food regimen, so it’d be cherry vanilla Dr. Ugly. I do know you bought the Dr. Ugly, however the cherry vanilla, that’s Meb’s request.

Hugh: I simply bought my pen out and I’ve written it down right here.

Meb: Yeah, properly, it’ll most likely be much less in style than the butterscotch. That’s cool as a result of, like, it offers it a component. Like, how do you guys…like, is that this, like, worldwide flavors? Is there an organization the place you’re identical to, “Look, we wish this particular taste profile?” They usually’re identical to, snap their fingers and like, we bought that within the queue. They’re like, “Dude, we may provide you with something you presumably need.”

Hugh: Yeah, we went with a lot of totally different companions to do this. I imply, the concept middle is inside our group. So we’ll ask our followers what they need. They usually’re by no means saying tangerine or passionfruit. It’s all the time concepts such as you simply had, Cherry Vanilla Dr. Ugly. You most likely miss that taste that you just had once you have been youthful that you recognize that it’s most likely not one thing you possibly can have six cans a day of anymore. But when we made one thing that tasted fairly shut and was wholesome, you’d be into it. So once we go to these taste homes, we’re saying we wish to take Meb again to being that age when he had six cans a day. So that is the flavour we’re going after. That is the reminiscence that once you style it, style and reminiscence are so interlinked. We wish to take somebody again and provides them permission to take pleasure in that factor once more.

So I’m ingesting the fruit punch now, and we took the Hawaiian fruit punch taste and we stated, “Match this as shut as you possibly can.” And now that is like ingesting a zero-sugar, zero-sweetener pure fruit punch drink, it tastes identical to it and it’s scrumptious. In order that’s how we do it. They ship us again a lot of little bottles. Now we’re doing it at residence, not within the laboratory anymore due to COVID. We do on Zoom, all of us have our bottles laid out. We do correct sampling like we’re sommeliers with a spit bucket and issues like that, and write our notes down and work with them and collaborate. And that’s how we’ve created such wonderful merchandise.

Meb: The fruit punch is attention-grabbing. I imply, I bear in mind being a child, I used to be going to camp in North Carolina, Camp Seagull, Camp Morehead, shout out, I don’t suppose Morehead exists anymore. However every single day for lunch and dinner, the children basically had Kool-Support. Like my, God, you’d most likely get arrested for giving those that this point in time. However that’s the nostalgia, precisely what you’re speaking about, the fruit punch, form of, orange soda, Sunkist, takes me again. The one soda that I nonetheless permit myself, and longtime listeners know as a result of I name it my redneck Purple Bull, is Food regimen Mountain Dew. I’ll nonetheless deal with myself anytime I’m on a highway journey and podcasting, Food regimen Mountain Dew offers me the caffeine I would like.

Hugh: Properly, we’ve simply launched an power water, which is 160 milligrams of caffeine, seems slightly like this. And we have now a Mountain Dew taste referred to as Mountain Ugly, zero sugar, zero sweetener.

Meb: So what’s the equal? Is that once you say…what number of grams, 160, is that like a cup of espresso? Is that like 5 cups of espresso?

Hugh: It’s a 16-ounce can, so it’s like 2 cups of espresso mainly within the can. You’ll actually really feel it.

Meb: I’ll strive, we undoubtedly have these within the workplace. And it’s good you distinguish it as a result of it’s bought a special coloration. So I’ll strive it later after I’m dragging. You should be universally loathed by supply males in every single place. Now it’s offloaded the somebody being on the Complete Meals to hastily simply displaying up in your door.

Hugh: No, I’m certain there are some supply drivers that don’t prefer it, and others could also be getting greater biceps by the week.

Meb: Yeah, that’s a superb level. They only offload their exercise.

Hugh: Yeah, precisely.

Meb: What’s the origin story on the title? I imply, you clearly have performed a very good job on the advertising and marketing and the branding. It’s a really distinct…I’ve had lots of people, once more, ask me, “What are you ingesting?” Was this it from day one? Was this like an A/B check of 20 totally different names? How’d you guys provide you with it?

Hugh: No. And I believe that is the results of two 23-year-olds in a pub in London having a few beers. Let’s be sincere. That’s the magic, and branding and advertising and marketing is science and artwork. And generally there’s slightly little bit of inspiration. And I’ll inform you about that. And for us, we wished to create a model that took on the established order. We knew the massive firms would by no means do really disruptive advertising and marketing, they don’t wish to take that threat.

And we have been arising with this model across the identical time that the phrase “pretend information” and “various information” was launched. And it felt, for me, like there have been quite a lot of similarities between, type of, that idea and taking a look at massive soda advertising and marketing, the Olympics or the Soccer World Cup and sponsoring grassroots soccer like they do within the U.Okay. And I simply felt which you can have taglines about making folks comfortable, making folks lovely, however in the event you’re loading them up with 45 grams of sugar, you’re probably not doing that. So I wished to construct a model round telling the reality and being clear and we have now this concept round telling the ugly fact.

And there’s a quote from George Orwell within the guide “1984,” which is, “In a time of common deceit, telling the reality is a revolutionary act.” And that quote, for me, was like a light-weight bulb the place it’s like going into this subsequent decade into the 2020s, the web goes to democratize every little thing, folks can discover out what’s unhealthy for them, discover out the elements. The massive soda firms have marketed down folks’s throats spending all their cash during the last 100 years telling them that soda makes you content and soda equals happiness. And I simply wished to inform it as it’s. That is flavored glowing water, no sugar, no sweetener, no false guarantees, no advertising and marketing gimmicks, and that’s what it’s. And that’s what we’ve been making an attempt to do ever since then.

And so folks have actually resonated with it. I don’t know if you recognize Seth Godin’s purple cow story the place you’re on a practice going previous fields and fields of cows and one of many cows is painted purple. And somebody asks you after the practice journey, “What do you bear in mind in regards to the discipline of cows?” You’re going to recollect the purple cow. So Ugly is a purple cow. Once you go to a beverage fridge within the U.S., a few of the shops listed below are so massive, you’ve hundreds of cans on the shelf, what are you going to recollect? What are you going to remove?

We’re a small firm, so each time our package deal is on the shelf, it has to work for us. It has to seize folks’s creativeness and stimulate somebody choosing it up, exploring it, possibly making an attempt it for the primary time. And so for us being referred to as Ugly, and with the brilliant, vivid colours that we have now on the packaging, it simply opens that up. After which folks fall in love with the honesty, the transparency, the actual fact we don’t take ourselves too severely, and simply the sense of enjoyable we have now across the model.

The opposite factor we do is we additionally use brilliant colours and cartoon characters. So that you received’t see my face on the web site or my signature on the can telling folks to get wholesome. We use cartoon characters, we use road artwork type to actually be subversive and talk issues in a very attention-grabbing solution to shoppers that feels approachable. And so type of these two issues collectively takes that fairly exhausting title of Ugly and actually softens it to a approach that individuals discover charming and enjoyable slightly than aggressive and in your face.

Meb: Rolling Stones coming after you guys for the tongue trademark, or what?

Hugh: I imply, if Mick Jagger desires to sue me, he is aware of the place to search out me. I’m the most important fan. So hopefully he’ll give us a break. However a lot of folks have used tongues in advertising and marketing through the years, so I don’t suppose we’re the primary, and it’s truly the U of the Ugly anyway, so.

Meb: Properly, you’ve seen a serious development over the previous decade of…you noticed this with 50. I believe ‘ an ideal instance of celebrities, athletes, singer-songwriters, musicians, actors turning into enterprise folks. And so in some circumstances, it’s simply your capacity to market and branding. However in different circumstances, it’s funding. And so half the time on the cap tables now, you see NAS, or Kevin Durant, or George Clooney, or Joe Montana, on and on. And I believe possibly 20 years in the past, it was a sign in the other way the place you noticed anyone like that in cap desk, like, “Oh, god, that is going to be a catastrophe.”

Now, I believe it’s a sign in the other way most of the time that quite a lot of these buyers are extraordinarily savvy. And in the event you have a look at dozens and dozens of examples, they’ve made far more cash in enterprise and investing than they’ve as their precise profession. So, Mick, in the event you’re listening, let’s get you on the cap desk for Ugly Drinks. You guys can do a collaboration.

Hugh: I’d love that, the dream investor, and my mother may meet him, I believe that’d be the most effective factor I may ever give her.

Meb: Good. So that you guys had some massive information, proper? You might be beginning to roll out within the U.S. by way of some brick-and-mortar shops. Inform us slightly bit about it.

Hugh: Yeah, so one of many issues final yr was once we launched a few of these limited-edition flavors that we simply spoke about, a few of them bought so rapidly we had massive retailers beginning to attain out for a few of them. So a type of was CVS was one of many first retailers. We truly launched into 6,500 CVS shops final week right here within the U.S. So you’ll find us just about in each CVS within the nation. Now we have a retailer locator on our web site, if anybody’s listening and desires to test it out and it’ll inform you your nearest retailer stocking Ugly. And it’s the primary stage for us by way of actually taking these merchandise that we’ve been refining and honing with our group to mainstream retail, which is all the time the objective.

As a result of as you’ll have heard, the mission we began with was to actually tackle soda and provides folks a wholesome various. And the easiest way to do this is to be obtainable and to be available in shops the place common Individuals and folks incomes their hard-earned cash store. And that’s why CVS was one of many first to come back to us. However now we’re starting to actually roll out past that. We’ve launched one other 4,000 shops within the subsequent month. And also you hopefully will begin to see Ugly popping up in a retailer close to you as we increase over the subsequent couple of years with extra flavors, extra merchandise, extra codecs.

However actually now having constructed our core base of shoppers on-line, we’ve bought the suggestions, we refined the packaging, we refined the liquids, we realized, we talked to them. After which the massive retailers have come to us, in CVS’s case, and stated, “We wish to put you in an enormous chunk of our shops out the gate.” And really honored to be in that place the place most individuals most likely reside, I don’t know, inside 30 minutes driving of a CVS retailer. So anybody who desires to present us a go can go and discover it. And that feels fairly cool, to be sincere, coming from the place we’ve come from.

Meb: We bought one immediately throughout the road from my workplace, I’ll take an image and offer you a shout out, see what flavors they bought. So what’s the composition seem like for you guys? I imply, is it…and I’m certain it’s modified over time however so far as direct-to-consumer, so far as retails, form of, third celebration, how’s that, form of, pie look? Is there a choice? I think about direct-to-consumer has the very best margins however not as a lot attain. What’s it seem like?

Hugh: Yeah, so clearly final 12 months has been a bit warped with coronavirus, that means lots of people are at residence and shopping for on-line. So we had a very sturdy yr with our B2C and Amazon enterprise. They each, the U.Okay. and the U.S. each grew over 500% yr on yr final yr, a lot quicker than we have been anticipating to develop. And now we’re seeing retail actually begin to recuperate. Predominantly, we’ll be about 80% of our enterprise might be retail this yr. E-com could be very sturdy for us. We’ve performed quite a lot of work on that. However the scale of retail, significantly on this nation, is so massive that the variety of accounts, variety of circumstances you possibly can promote by way of that channel is critical.

So we’re all about availability, we’re really omnichannel, folks uncover merchandise in a lot of other ways. I’m certain, Meb your self, I imply, you’ve most likely purchased merchandise on Amazon on DTC and in retail within the final couple of months. And shoppers are not any totally different. So for us, our enterprise technique is consumer-centric. The place a shopper is discovering merchandise, is it after they’re watching TV and scrolling on Instagram? Is it after they’re on Amazon searching for one thing, or is it after they’re within the native grocery retailer?

And in the end, we got here to the conclusion that every one these channels are interlinked. As you probably did, you found us on Amazon after which transfer to DTC. Some folks will uncover us on DTC and discover us in CVS, and vice versa. So we’re making an attempt to ensure we’re accessible, very similar to a can of soda. In order that at that time of thirst, whether or not that’s at residence or out and about, we’re obtainable as an alternative choice to soda at an identical worth level. In order that’s type of what actually drives us.

Meb: You talked about final yr, what was that like? I imagined provide chain disruptions, you talked about you possibly can’t return throughout the pond, what’s the final yr been like for you guys?

Hugh: It’s been very robust because it has been for a lot of small companies the world over. And I believe on the time, there have been so many unknowns. And it’s straightforward to look again at hindsight now having ridden out the storm and have a special perspective on it. However on the time, we didn’t actually know what was occurring, proper. And in March final yr, there was virtually a wave of reports, I believe I bear in mind on the time, it was going to be 4 weeks, it’s going to be six weeks, after which we’ll transfer on. And really rapidly, I believe I spotted as CEO that this was going to be not less than a 12-month problem that’s going to have an effect on us the world over, our crew instantly went absolutely distant.

And at the moment, you’re worrying about folks’s well being, not solely our personal crew however the well being of society as properly. And ensuring that we’re doing the precise factor to guard everyone, not solely our personal staff however everybody. So instantly, you’re in emergency mode, making an attempt to guard everyone, you then begin worrying about your online business. We’re a giant enterprise in foodservice, we bought quite a lot of product in workplaces the world over. And a few of these channels are solely simply starting to put orders once more as a result of the workplaces have been empty for 18 months. And so we needed to react, we in a short time realized direct-to-consumer goes to be massive for us. However we didn’t wish to ram adverts down folks’s throats while they have been panicking a few international pandemic. And so we’ve tried to be smart, tasteful, shield our crew.

And we’ve additionally had a lot of different societal points come to the fore this yr which were conversations inside our crew the place we’re making an attempt to study and be higher. You recognize, clearly, what’s type of gone on with Black Lives Matter during the last 12 months has been a giant space for us to ensure we’re doing the precise issues there. Range of employees and genders internally continues to be a giant factor for us. And so we’re all the time studying, all the time progressing with a global crew. We had folks in several positions elsewhere the entire time. We had some staff in states within the U.S. the place coronavirus was handled very in a different way to another cities and massive city areas. So at totally different levels, we’ve had folks in several positions.

And as CEO, I’ve needed to react and study and perceive {that a} blanket message wasn’t essentially proper on a regular basis and ensuring everybody was secure and reacting to their environments. And understanding how everyone was has been an actual studying curve for me as a pacesetter. However I’m happy with how our crew caught collectively by way of every little thing. And hopefully now, contact wooden, popping out the opposite aspect as a society, proper, with the rollout of vaccines and issues like that.

Meb: Yeah, the ESG angle, you recognize, it’s attention-grabbing, we’re speaking about firms, but additionally their merchandise. You guys actually have a serious societal profit to the extent that individuals begin substituting soda for drinks. Do you ever get any pushback in regards to the angle from folks…and like, I might most likely be the use case right here the place you’re like, hey, hastily I’m ingesting 5 of those a day. So far as aluminum cans, is {that a} consideration about environmental affect recycling?

I do know aluminum tends to be one of many…and this jogs my memory, after I was a child, my dad used to ship me out the storage and we had like a sledgehammer, and it was my favourite factor to do, and I might crush all of the cans. I imply, his have been most likely Coors Gentle or Coors Banquet beers, we have been in Colorado, and take to the recycle machine. It was a lot enjoyable to place it and it was like this massive, big transformer-looking factor. And I might get, I don’t know, $2 again or 50 cents again or one thing. What do you say, do you ever get these considerations? Or is it one thing that’s ever talked about?

Hugh: Yeah, no, I imply setting is a large a part of one of many causes we’re in aluminum cans within the first place. I imply, there’s no single-use plastic in our U.S. provide chain. We made an enormous effort to keep away from that. Aluminum cans are infinitely recyclable. So you possibly can repurpose a can an infinite variety of instances. The extraction course of out of the earth, it undoubtedly must be improved. And I do know quite a lot of the aluminum firms now are taking a look at, type of, carbon-neutral aluminum extraction. However generally, it’s very straightforward to move. It’s very space-effective in the case of transportation. Aluminum retains merchandise contemporary for, in our case, 18 to 24 months, there’s no UV mild entering into the product, there’s no oxygen entering into the product.

So by way of, type of, maintaining issues contemporary for an extended time frame, and one thing that’s absolutely recyclable and portable, aluminum is an incredible format, wonderful product format. I believe the factor that’s being dated about aluminum is the liquids inside. And that’s truly the most important concern. And so that you’ll see aluminum water manufacturers now as an alternative of plastic bottles, which is a large concern. And so for us, it’s a step in the precise route. There are all the time issues to be improved. If we will swap somebody ingesting a plastic bottle of water or a plastic bottle of soda for an aluminum can and pop it in recycling, and that’s an enchancment.

Meb: Yeah, I actually was a La Croix man earlier than I grew to become an Ugly man. However I’ve efficiently transformed about half a dozen co-workers and members of the family, they arrive over and often take a pair to go after they’re leaving. They usually’re nice with cocktails, by the best way, it is a little secret, like, angle for you guys that you may begin. I used to be chatting…we simply did a podcast with a pal who has a boutique gin distillery in Mississippi, and it’s truly made with rice. However versus utilizing considered one of these extraordinarily sugary tonics, and so forth., you possibly can provide you with all types of cool flavors with Ugly. You guys going to start out getting them into bars and eating places too?

Hugh: There are such a lot of utilization events for seltzer. I imply, if you’d like a zero-calorie cocktail mixer, it’s excellent. And yeah, you possibly can combine it with slightly little bit of fruit juice in the event you wished, you possibly can combine it with just about something you need. We’ve made a bunch of mocktails too in the event you’re not ingesting. And lots of people after they’re out in bars or at barbecues they usually don’t wish to drink for no matter cause, chuck a couple of circumstances of Ugly within the cooler and nobody is aware of that you just’re not ingesting a beer, they usually’re type of a lot of flavors, a lot of refreshment as an alternative of ingesting a bunch of lagers and even going beer then seltzer retains you straight. So yeah, it’s nice in all types of events. We noticed a bunch of individuals ingesting over this July 4th weekend at barbecues and issues like that.

Meb: We had it at our cooler on the seashore, our annual brouhaha on the ocean. All proper, so that you guys are clearly firing on all cylinders. It’s been an amazing development story to this point. What are the plans now? I think about it is a very capital-intensive enterprise. Are you continue to maxing out your bank cards, you guys seeking to do extra funding? How’s that work?

Hugh: Yeah, and clearly, a lot of my private bank cards have been maxed out over time. However I believe we’ve developed from that place now. We’re truly actively elevating a Sequence A funding spherical proper now to actually develop this enterprise to the subsequent stage. We’re in 15,000 shops globally now, we have now logos world wide to increase this as we develop. And yeah, you possibly can see final week launching into 6,500 CVS type of shops is only the start for us by way of the retail rollout, the variety of flavors we’ll be producing over the subsequent 12 months, and studying with shoppers extra.

So it’s nearly enlargement now for us, we have now all of the programs and provide chains, the crew in place to develop this. And so fueled with the precise companions and capital, there’s no cause we will’t actually chip away at that $90 billion soda business. There’s a lot area to go after. In order that’s type of the place we’re at proper now.

Meb: Good. Please CC me in your increase so I can squeeze in on the cap desk. I promise I would be the smallest entry. However shopper product VCs which are listening, you guys can hit up Hugh on Twitter and elsewhere. You recognize what, each time I take into consideration you guys, you’re not going to know this, I’m assuming, however a few of our older listeners will. There was a film, I believe it was “Wildcats,” which is an outdated Goldie Hawn film from the ’80s. However they’d a cheerleading scene, and also you guys can google this, they usually do a “you’re ugly” chant. They are saying, “U-G-L-Y, you ain’t bought no alibi, you ugly.” They usually’re simply speaking junk to the opposite crew. The film I bear in mind being pleasantly common, however that chant caught in my head. So once more, there’s one other co-branding.

Hugh: Could be my new ringtone.

Meb: Yeah. It’s so good. It’s undoubtedly on YouTube. All proper, so fundraising, what’s the horizon seem like for you guys? What would that capital be used for? What are different belongings you guys bought caught up your sleeve as you look to the long run? Is it merely development and entering into new channels? Or do you guys have another concepts you’re cooking up within the kitchen?

Hugh: Yeah, so we’ll be constructing our crew out. As we increase, we’ll be launching in a lot of totally different areas across the nation. We launched in Los Angeles final month, we’re launching in Portland this month. So each time we launch in a brand new market, we wish to be hiring a crew that may be on the market introducing clients and shoppers to Ugly. And so each time we do this, we’re actually supporting the crew to make it work. We have to put money into advertising and marketing too. I imply the model’s in an amazing place with this checklist of inventive concepts internally that’s longer than a CVS receipt.

Now we have so many alternative ideas and totally different concepts that individuals are going to like, whether or not it’s content material, advertising and marketing concepts, new flavors. However for us, it’s actually about driving the core enterprise into extra retailers and making this as accessible as doable. Whether or not it’s the massive grocery shops or comfort shops and even new markets, we’re going to try to make Ugly as extreme and as ubiquitous as something we will. And that’s type of actually the place we’re going to be spending the capital alongside constructing the crew to assist us to do this.

Meb: So we’ll wind down with a pair extra questions. What’s been a few of the weirdest taste requests you guys have had? I imply, butterscotch is up there, however is there some the place you’re like, A, that’s so bizarre we have now to make it, or B, that’s so bizarre, disgusting we may by no means ever make that?

Hugh: We’ve had peanut butter and jelly, Nashville sizzling rooster, cheese pizza. I did truly counsel we attempt to do, but it surely’s not an amazing expertise.

Meb: Oh, my God.

Hugh: The checklist goes on. I imply, something you possibly can think about. I’ve even tasted a rain taste. You recognize that when water hits sizzling tarmac in the summertime, anyone created that taste for us, a taste home. And it was attention-grabbing, I’m undecided we’d promote 1,000,000 circumstances of it. However yeah, there’s a lot pleasure and suppleness with it. However we’ve had all types of stuff are available. And customarily, I’m like a giant baby so I’m additionally on the identical web page of I ponder what pizza-flavored water tastes like. So there’s nothing too loopy for us to truly check out.

Meb: You simply bought to get the precise pizza, you recognize, Hawaiian pizza possibly, or sausage and mushrooms, or fried egg on high. Listeners, hit you up Hugh on Twitter together with your strategies. He stated he’ll ship you a free case in the event that they use your suggestion. He stated he guarantees.

Hugh: Yeah. Maintain me to that, you possibly can maintain me to that.

Meb: What’s been probably the most memorable a part of this journey? It may very well be good. It may very well be unhealthy. It may very well be in between. Is there something that’s like seared in your mind as one thing that you just look again and also you’re like, that was a giant one?

Hugh: I imply, for me, each time I’ve ever walked on the road in New York or London and seen somebody ingesting a can, or seeing a can within the rubbish, within the litter, it blows my thoughts. Particularly once you’re simply someplace the place you don’t anticipate to see it. I usually will cease the individual on the street and ask them how they discovered the model. And that’s all the time, to me, what blows my thoughts probably the most is once you see it within the trash or somebody ingesting it on the road. And each time I ever see that, I don’t suppose it’ll ever get outdated. And I do know that’s not some loopy expertise. However for me, when somebody spent their hard-earned cash on a product we created in a bed room in London, it’s prefer it’s fairly insane. So for me, that’s all the time the factor. And hopefully, there’s extra of these come.

Meb: I imply, you guys even have the potential to have little Ugly gear, hats, shirts.

Hugh: It’s coming.

Meb: I might put on one. Ship me a hat once you guys make one. All proper, Hugh, this has been tremendous enjoyable. If folks wish to purchase some drinks, in the event that they wish to comply with together with what y’all are as much as, what’s the most effective locations to go?

Hugh: So in the event you go to uglydrinks.com, we’ve created a particular code for listeners. So it’s UGLYMEB, all in caps, U-G-L-Y-M-E-B, that provides you with 20% off in the event you’re within the UK or the U.S. on every little thing. You possibly can comply with us on Instagram, Twitter, Ugly Drinks, we’re on TikTok as properly, Ugly Drinks. And you may comply with me, I’m UglyHugh just about in every single place on the web. So if anyone desires to achieve out you’ll find me on Twitter, LinkedIn, Instagram, drop me a DM, I’d love to listen to from folks. I all the time try to reply to every little thing that is available in. So we’d love to listen to from you. And in case you have any questions, the crew at HelloUglyDrinks is all the time keen to assist or can level you in the precise route for our enterprise as properly.

Meb: Hugh, it’s been a blast. Thanks a lot for becoming a member of us as we speak.

Hugh: After all. Thanks for having me.

Meb: Podcast listeners, we’ll submit present notes to as we speak’s dialog at mebfaber.com/podcast. In the event you love the present, in the event you hate it, shoot us suggestions at suggestions@themebfabershow.com. We like to learn the critiques, please assessment us on iTunes and subscribe to the present wherever good podcasts are discovered. Thanks for listening, buddies, and good investing.

 





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