The Hidden Art of CPG Formulation: Secrets from Leyline Labs

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Hello.

Good morning, everyone. Welcome to Drink Up on this Saturday the 14th. Clearly having some technical difficulties, but we're here. We're doing a thing with Charlotte and Matthias from Leyline Labs. Welcome, folks. Thanks first and foremost to our sponsors, Sam and Alicia with Bev Assets, myself and Alias Advising, Ryan Halliman and On the Rocks Advisors, and Jay Williams and Freebird.

Hello.

Sam, do we have our obligatory showcasing of a Freebird cam this morning?

I do.

There we go.

Nice.

So welcome one and all. Sam is, uh, feeling a little under the weather, so you might have to hear a little bit more of my voice than normal. But, uh, Charlotte, Matthias, uh, welcome. Tell us, we'll start with you, Charlotte, a little bit about yourself and, and how Leyline came to be elevator pitch style, and then we'll get into the, you know, the long and storied journey as, uh, the show goes on.

Ah, sure thing. So I'm Charlotte Mizrahi, co-founder of Leyline Labs, which is a product development agency that focuses on general wellness products and snacks, a lot in the better-for-you category. I've been in R&D for over a decade, starting in confection. So I did bean-to-bar chocolate and bakery products, and through my career moved into all sorts of different categories, including pet, beverage, supplement. Um, and throughout all of that, there was always a, a huge disconnect between a lot of the service providers that need to work together to make a product come together. Design, marketing, formulators, ops people had a lot of struggle interacting with each other, especially when it comes through a, a brand or like just a marketing team plopping information and hoping for the best. Um, And that's why we started Ley Line Labs, was to create a cohesive system for all of the different parts to work together so that way the end result of the product makes sense.

Dare you. How dare you? Uh, and Matthias, where do you fit into the puzzle at?

Yeah, well, we, Charlotte and I actually met at another formulation lab quite a ways into our respective careers in R&D. So we were already frustrated when we started working together. Um, we hit it off pretty immediately, but the problem is largely Charlotte and I come from a culinary background, a fine culinary background. And we got into this line of work from a craftsman's perspective rather than a scientist's perspective necessarily. So our—

Both.

Both. Yeah. But our intention is always to, because of how we were trained and how we entered the space, is to make Beautiful things like products that are effective in terms of the taste, the texture, how they complement branding, who they're targeting and why they're targeting them. And then we're sitting around in lab spaces and we're like, none of this has happened. Like we're being told to make a lime-free, sugar-free, sake-based canned margarita, which, you know, is something that I'm just going to have to atone for. On the other side.

Yeah.

When we got together with a sales specialist friend of ours, just to like sit at a specialty grocer and just like shake our heads at what we were— the lack of holistic thinking, the easy next step was just like, well, we should, we should just do this so that we can actually do the things that we want to do. And it's allowed us at this point If someone comes to us with an idea that's interesting from a technical and flavor perspective, like a client of ours at Spritzos that just launched, Bless It Bee, there's enormous advantage advantages from the technical formulation side and from the craft flavor development side. And we, as you know, the co-founders of the lab are just like, let's go, let's do it right now. So it's, you know, it's the flexibility to make products right and the power to make the products that Are right, if that makes sense.

Makes total sense. And I think, uh, you know, A, you guys' reputation precedes you. I spoke with, um, Josh and I'm blanking on his last name now, but Josh at, uh, 9th Planet yesterday. And, uh, they happened to ask, uh, he and an associate that I was talking to were like, you know, so from a foreign relations perspective, who do you work with? And I said, well, I've started doing a lot of work lately with Leyline. He goes, oh, how are those guys doing? I was like, fine. He goes, yeah, I talked to him on X, Y, and Z. I'm like, of course you did. 'Cause I fucking know everybody.

Right.

That is why, uh, we were, we were a little nervous about the kind of like, you know, uh, pseudo subculture name to begin with, but it's really playing into our, you know, system now. It, it really works. Of course.

This is happening with you, Adam, as well, actually, where—

Very kind.

We'll get a recommendation for a client. And we'll recommend them to work with Adam, but they're already working with you.

That's happened to me a few times. We had, we've had clients that, uh, decided not to work with us and they ended up working with one of our, um, you know, people we know, then they're recommending back to us. Actually this morning it was like, hey, we're not the right stop, but our sister agency, you should talk to them. And I was just laughing this morning. I'm like, this is awful, man.

Nothing better.

Well, I think it's, it's indicative of the, which is my second point. Like it's indicative of the, not that any of us want to be, you know, self-serving in that, you know, we're always trying to expand our networks. We're always trying to include new partners, but we do want to be a little self-serving in the fact that, you know, speaking for myself, and I think you guys all appreciate this as well, we only want to work with people who understand that nothing exists in a vacuum. Like formulations doesn't exist in a vacuum. Sales doesn't exist in a vacuum. Ops, marketing. Web dev, e-commerce, like none of it exists on its own. And so we only wanna work with people who are willing to play on the team. And so the team ends up knowing each other, right? Just naturally.

Yeah.

The, I like to explain it to like people who don't really understand, who might be like outside of CPG development in some way. I was like, when you watch a movie at the end, it, it runs through 5 minutes of all of the people that worked on this.

Yeah.

You didn't see all of those people.

That's a really good analogy.

But you saw their work. Yeah. And CPG is very much the same way of, it takes—

Oh, I love that example, by the way. I'm gonna use that.

It takes so many more people to make this work than people realize. You'll just, you'll just pick up a little thing at the supermarket and be like, oh, cute little thing. Okay. And then maybe I'll buy it. You know, maybe they'll read the back or something and look at the ingredients, or maybe you'll see the founder's story on TikTok or something. But there was hundreds of people that made that happen.

Right. Yeah. Oh, that's a brilliant analogy, truly. So I wanna, I wanna, cuz we could, I mean, we could sit here and bullshit all day long. I do want to get a little pointed for the sake of promoting you guys. Cuz I know the answers to some of these questions, but I want to hear you say it for the sake of, of, you know, the— you touched on it in your, in the initial kind of intro on Leyline, but gimme a little bit more on the products that you guys, products and projects that you guys do work on, and more importantly, things you don't work on. And why, for example, right? Like obviously you don't do coffee, not because you don't drink it or enjoy it or promote it or support it, but you don't have the equipment. Right. And that's a very important distinction. So do with that question what you will.

Actually speaking on the coffee thing specifically, because you're right, we don't do coffee at all because coffee— except for espresso, except for espresso, because coffee is typically retort. And I disagree with retort in most circumstances from a development perspective. I spent a lot of, we spent a lot of our time trying to talk people out of the spritzo, um, retort.

Out of the spritzo, out of retort. We try to talk everyone into a spritzo.

Yes. Um, the reason for that is one, we don't have the equipment and two, the risks are heightened. in an already risky business. Just the, the more limited options of manufacturing partner, the increased cost, all of that stuff limits creativity just in terms of total operating budget and also forces a more cautious approach, overcautious approach, I would say, to flavor and positioning that we just prefer not to work with.

Also, that kind of heat does tend to damage the flavor, unfortunately.

Selfishly, please.

It's just kind of sad if you've really crafted this like beautiful product and then it just gets beat up before the consumer gets to try it, which it needs to be for safety reasons.

But I hear from every founder about flavor. Like, I'm the best tasting, the whole bit. This is really good. I was just on with a client yesterday. He was at a co-packer and they were making, they were doing all their testing or whatever. And he's like, oh, these flavors are just awesome. You know, they're ready to go. Uh, so it really does start with formulation. That's what y'all do and the flavor, right? That goes in the can. So are you a co-packer too? Are you working closely with co-packers?

We work closely with—

Yeah, we don't ourselves have a production facility currently. And that is frankly primarily because we're in New York City and that kind of real estate's not super available here. Although there is a lovely cannery, Brooklyn Cannery in Brooklyn. Obviously, but also because we work on a lot of different product types, like Adam mentioned. So, um, I would say the majority of what we work on is beverage, what we call composite beverages. So that would be essentially like multi-component beverages that get put together.

Yeah.

So not something like beer. We're not, we don't have like beer brewing equipment, but we do design formulas for composite beverages for the majority of our work. But we also do powdered like supplement or drink blends and some snack products depending on the format.

And so from a, just cause we've, and I won't, I won't name names brand-wise, but you gotta start naming names, man.

Come on.

No, no, no. Cause a lot of them are startup brands and I wish them the best despite maybe their, um, misaligned expectations on what the world is going to look like. But for example, I'll talk about a product category. We have spoken at length about, uh, you can work on protein beverages, but also if you have to taste your 17th of the week, you might go bang your head against the wall, right?

Yeah.

All due respect to the protein founders out there, but in terms of—

Why is everybody a protein founder? Wait, I just gotta say, I'm sorry. I know you get your question out there. Oh my God. Everything opened up is like, my wife was all excited. I got you a matcha protein. I'm like, what the hell is a matcha protein? And then she has like these crackers and it says protein on 'em.

Everything's protein.

I do have to say just my stance currently on like the protein and fiber maxing trend is, hear me out, guys, beans. Right.

Legumes. Yeah. 100%.

I'm not against like trying to make things innovative and creative, but also like if you're, if you're nutritional goal in life is a combination of fiber, protein, and possibly micronutrients. Beans.

Spam and beans. I'm going to throw some Spam and beans today on a piece of white bread and mustard.

It's almost, it's almost like it's really simple. So, you know, in terms of maybe things you've worked on recently that you're at liberty to discuss that have excited you in the functional health, wellness, whether that's beverage powders, whatever. Like, can you speak to some of those?

Yeah, I would like to say we're not, not like a, you know, toot our own horn, not trying to be too cocky, but all of the brands that we've worked with, including all of the brands that have launched and will be rolling out over the next year, are cool with us talking about the fact that we worked on their product and we've gotten good feedback from, from all of the clients we've, we've worked with. So we could definitely call out the brands that have Produced, although there's gonna be a lot more in 2026 rolling out.

I know.

Get a big Q4.

Yeah.

Are y'all the starting point when you think about this? I've been doing this with Adam for a while. Is formulation the starting point of a brand? Like, do they talk to you? Are you the first stop?

Fucking should be.

I love that question. As Charlotte knows, order of operations is—

I'll have Matthias take this one.

Or the, the sequence where concepts are built is a huge part. I have on my wall all of our like sequencing drafts for, for when we were building the business. Yes, formulation should come first. Absolutely. But so does ops and so does sales and positioning. And so does print. I am a very, very big fan. Or less of a fan, more of a believer in holistic design. So I went to Parsons School of Design for my undergrad and to make a product like this, it's a thing with many. It's a visual medium. It's something you taste. It has sculptural elements. People are getting bottles. People are holding it and looking at it, moving it around. There's so much diversity in variables that you have to consider when constructing the thing that To start with just your branding and then bring everything in later is going to create problems. And starting with just formulation and then bringing everything in later is going to create problems. So the best way that I know to do these kinds of things, to build something as complex and beautiful as a fully realized CPG product, is spend a couple of months talking to everybody, talking to the ops people to make sure, like Adam, We bring Adam in as much as we possibly can so that he can say like, you're not gonna get that packaging. So you need to figure out a solution. Or like, here's an alternative packaging type that's more producible, cheaper, and can get you in the places you need to be.

Great.

Or that formulation you just created is gonna leach through the can. I've heard him say that, by the way, talk about like the type of product that goes in there could be problematic.

Yep. Yeah. We spend a lot of our time, so On a technicality, yes, we're formulators. But given Matthias's and my background, we've both done a lot of concept work. Matthias actually started in concept work before going into formulation, and I did a couple of years in licensing. So licensing, the formulators also do a lot of the concepting work.

Mm-hmm.

And because of that, we realized that that is such a key element to product development that needs to be done in conjunction, which is really like the ethos of, of Ley Lines is this like risk analysis at the upfront and creating a really comprehensive product brief. So that way when you do start doing anything that's tangible or cost related, you know what some of the problems might be and you've already troubleshooted.

So are you, do you, when you say that, are you looking, so you're starting as a formulator, are you looking at like at a forecast with them? Okay. This is how I'm going to formulate this. How many, this is how, this is what my forecast is, what I'm going to sell. You do all that work with them as you're building that in?

Much detail as humanly possible.

Yeah.

Yeah. We start kind of beforehand. Most of the bullet points that we look at during that original kind of concept brief building risk analysis phase include things like market position, competitive analysis, the types of packaging they could use, what their innovation driver is going to be, their value proposition, what makes it special to the brand founder too, because now more than ever over the past, like, let's say 8 years or so, or maybe a bit longer, social media has really driven that consumers want to connect with a brand on an emotional level. And that includes why the founder started the brand. So that kind of authenticity. I'll use Air or Aire. I keep pronouncing it in English instead of Spanish, which is one of our brands that just launched. The founders are from the beverage industry, beverage industry vets. One of the founders for medical reasons went NA, even though he was working at Diageo. He went NA at a point in his life and started the non-alcoholic bottle shop in Chicago, In Good Spirits. And recently they wanted to start their own in-house brand. All of the founders are. Of Mexican descent. That is their culture, and they wanted to do something very culturally forward. And we wanted to make sure that because that was their passion and like why they were connecting to what they wanted to do, that that was shown through everything, not just their logo and their name and maybe some flavors, but everything. The reason they started this brand, to showcase their traditional Mexican roots. So when they asked us to make a functional product. And they were like, okay, these top 4 things that we see sell at the store, these botanicals that like are in everything. I was like, okay, hear me out. Traditional Mexican medicine. And we worked through this process with them, which inevitably led to them saying, oh yeah, I think my abuela had these like in the, in the house. And that's what I want to hear.

It's amazing. So you get into their head. You get into, you know, and you determine kind of their, where they want to go, right? And then based on where they want to go and what's in their head, the formulating, the formulation starts to be created, right?

Exactly.

And it's funny, after they go through you and Adam, Adam's like, hey, meet my friend Sam. And I do this thing called a commercial strategy, right? But, uh, it's funny, I tell everybody, you've already developed it. By the time you come to me, you already know what your commercial strategy is. You just don't know how to organize it. So think of me as the organizer. Because you just talked about, you talked about the competitive analysis, you talked about getting in their head. A lot of that stuff's already there. They just don't know how to organize the effort. So that's what we do on that side. So I just wanted to hear that every step that they're going, and Mathis, you were talking about this, is you kind of almost have to do them together, right? There's a sequence of events that has to happen, but at the end of the day, you have to anticipate, okay, I'm gonna make this formulation. Okay, this is the ingredients that have to go into this, how much ingredients I have to buy, all that. And then I need the number of cans and labels, and this has to be pressure tested, all this stuff. That's gonna inform the number of cases. Oftentimes when people arrive with me, they already know the cases they have. Like, I got 2,000 cases and I gotta move 'em. I'm like, well, yeah, but how'd you arrive at that? You arrived at it because they talked to you. Um, Mathis, you Charlotte, and you Adam. And now they arrived at me. Now I have a problem, or I have, I have to solve the 2,000 cases. Am I off-kilter here? What I'm saying?

Right, right. And that's in an ideal world. They're talking to you at the same time they're talking to me and Adam and Charlotte. So that at any point, like the best example I have for this sticking point, and honestly, what Charlotte mentioned, the impetus of starting the business in the first place. We are way back on like the other side of the beverage development process.

Yeah.

And then our on-the-ground, like B2B on-prem sales specialists are all the way on the other side. And we hang out together because we're in the same industry. And they're like, guys, what are you making that they're making me sell? Because like, I can't sell this. This is ridiculous. Like it went all the way through production. Like it went from formulation to bottling, to branding, to manufacturing, to packaging, to 3PL, all of that. And then it gets to the sales guy and they're like, well, this, I can't sell this to anybody. And then, so you're like, and that can happen. It's to your point, Sam, at any point where you arrive at a certain specialist and they're like, well, obviously this is going to be a problem.

Well, yeah. And then you look at cost of goods, which Adam and I always talk about, right? They're like, my cost of goods were $2.50. I'm like, yeah, but the category's at $14.99 and you work that backwards. They're like, well, I can't get the $14.99. My story is the reason I'm at $19.99 is because X, X, and X. I'm like, the consumer doesn't care.

So, so dial us back to brass tacks a little bit. Uh, and, and another gentleman that we all know or know of, Mr. Colangelo, uh, posted a poll on this on LinkedIn recently, but in your opinion, and again, there's a million variables here, but generally speaking, from an expectation setting standpoint, What should it cost to make a formula? Let's say one single SKU, right? Like what should it cost? A, B, how long should it take?

This is an interesting question. And the phrasing you're using, I really like because the what should it cost is interesting because of the many variables. I hesitate to give an exact number, but I will say this, it should cost money. It should not be free. And I'm not saying go with us or pay our rates or anything like that. Like, I love the work we do. I'm very proud of our products. And there are a lot of formulators out there who do excellent work. They don't do excellent work for free. So—

Well, here, I'll throw one at you. You, uh, you work on commission? That's an inside joke.

I hate that question.

By the time they arrive at us, they're like, yeah, we just pay for commission and performance. They just like, they've paid all these hundreds of thousands of dollars to bring the brand to the market. Right. We're the, we're the first mile, by the way, for like, they're like, you work on commission. We're like, no.

I mean, also this is just generally not a low overhead industry. So if you're going to haggle on, let's say your formulator or your graphic designer, what happens when you get to production? Because you're not haggling with Your factory, that's not going to happen. Your production run is going to cost what it's going to cost. Retailers are going to have their markup across the board for everyone. That's going to be exactly the same. You know, it's not, this is not an undertaking that you could afford to not invest in. Like, You will just be paying somewhere else down the line. Oh wow. If you use a formulator who theoretically gave it to you for free. Mm-hmm.

I feel sorry. No, I, I will, I will. Oh, go ahead.

Yeah.

So like, you're good, Sam.

Something we hear a lot is the co-man's gonna formulate it for free.

Mm-hmm.

Or the, the flavor house will do it for free and they're not doing it for free. They're doing it at something called the loss leader because you're paying them for a bigger Things that they make money on later, whether that's buying the ingredients at a flavor house or, uh, you know, the manufacturing run. It's not to say that the formulators who work at these places are bad formulators. That is not at all what I'm saying. There could be phenomenal formulators in a bunch of different places. It's just that it's not technically free. You're just paying for it at a different point. It's deferred payment. It's a credit card situation.

It's an issue of motive as well. Where like some of the flavor, some of the flavorists and formulators at flavor houses are like incredible. The work they do is incredible. We work with a lot of flavor houses that provide us with raw materials that we absolutely adore, but their job is to sell flavors, not necessarily tangentially. It's to sell the product that flavors are in, but that's it. There's, there's distance between those 2 variables.

Mm-hmm.

So part of when we started the lab, it was important to us that we have no extant financial arrangements with any of our ingredient partners. Because the point is, if a product is the best for the formula, that's the product we're gonna use. Both Charlotte and I have worked in a number of different spaces where those financial constraints exist, where Behind the scenes, we're supposed to use a particular flavor house.

Yeah.

Because there's an arrangement behind closed doors. But that means that like some flavor houses do the best herbs and their citruses struggle. Some flavor houses do the best citruses and flowers, but their like red fruit struggle. So if you're trying to run everything through one house, it just, you're not gonna get the best possible product every time, which is Yeah.

Well, it's better to diversify your stands on, and then as you're building your flavor.

Pardon me?

It's better to do it with, do it with multiple people.

It's better to find—

it depends on the scenario. Mm-hmm. Sometimes you can work with one flavor house, which is great because operationally, I'm sure Adam could weigh in, like you're shipping everything from one location. Sometimes you'll get cost breaks. We've seen, you know, like one of our brands was able to get like The flavor house gave them an MOQ break on something that they weren't using a lot of because they were purchasing another ingredient that was much more costly at a higher volume. So it helped like minimize waste. So sometimes it could, like, it could be beneficial, but it's not worth sacrificing the quality of the product just because someone might be getting a kickback or you don't wanna ship from 2 places.

Yeah. And I wanna, I wanna chime in here to say, you know, so, and this is gonna make me sound So old. I've been trying to learn Reddit because a friend of mine mentioned it, and there's a subreddit called Beverage Industry, which, for example, couple couple threads looking to speak with food and beverage brand owners or managers. Anyone here have experience with big brands? First time beverage founder looking for mentorship. Stuck after creating formulation. The thread is fairly small, but it's growing. The reason I bring it up is one of them in specific. A couple of days ago said, so I've created a formulation for these beverages, which I feel are very unique in terms of taste, blah, blah, blah. I've spent a little shy of $20 grand to get formulas solidified. The rest of it doesn't matter for the sake of the story. Point I'm getting at is $20 grand is a very realistic number depending on what you're making and the number of SKUs and all those things. The rest of that thread goes on to explain, like, I'm running low on money. Right. And what always slays me about that is whether formulations is, is $2,000 or $20,000 or it's free or whatever, to Charlotte's earlier point, right? Like that cast of characters that rolls with the credits, right? You as the brand owner are footing the bill for most of their salaries in some form or another. And so if you're going to, you know, if all of you have, if all you have is $30,000 and you drop $20,000 on formulation, you have a problem. Right. And I, I, it pains me to see brand owners meet me then as opposed to before then. So we can help understand where all the pieces of the pie need to be split. But that's ultimately what unfortunately ends up happening a lot of times. Right.

Yeah.

They arrive at my desk and they're like, yeah, we're ready to go, but we have no money. Will you work on commission? I'm like, first of all, you can pay me commission, right?

We get that a lot of people who come over to the friend thing.

But by the way, and this is another one, by the way, then they get distribution. They're like, well, the distributor will take all the risk now. I'm like, no, they want, they just like, you gotta pay them too. And you gotta pay the retailer. It takes a lot of money to bring a brand to market.

Yes, sir. It does.

Yeah.

It's why we, oh, sorry, Char. Oh, you go ahead.

Oh no, I was just gonna say, uh, most of the time in the circumstances where people come to us and it's unfortunate that they came to us when they did is a lot of the time the 2 circumstances we see are either they did like all of their branding, like their Their logo design, all of that. And then they have a thing that they can't make for like technical reasons. And we feel terrible because we have to like be like, you did all of this work and you spent all of this money and you like can't put like raw milk in a can ambient or something crazy. I don't know. But, um, and then we basically are like, you have to rehaul your project. For like health and safety or money or technical reasons after they've just spent thousands with like a designer or—

So they should start with formulation to make sure that you get all those things answered first before you design and put all this other money into marketing and you purchase the cans and you find, oh, I have all these cans. I just bought a truckload because I guess that's the going market, right? Adam, you have to buy a truckload of cans to start. You have this truckload of cans and labels sitting there and you didn't talk to the formulator first.

That's why we keep our costs for this earliest stage as low as possible. So just for, I don't know if it's gauche or anything to mention this on this podcast, so apologies in advance. We bill lower. It's a fraction of our formulation cost. to do the concept building, which we bring in. And most of, a lot of that cost is going to the other specialists that we bring in just to have a peek at the concept, give their advice, and then make the changes they have to. And we, it's no, it's not a required thing that you move forward with us. We do this process and a lot of the time we tell 'em like, no, like the product won't be possible.

Mm-hmm.

We're gonna put you in touch with a specialist that that really focuses on this highly technical specific thing, or we tell them like, in our professional opinion, this isn't scalable or producible. And I'm not going to take your money to make it because we're just not in the business of robbing people. We want all the brands we make to work. And if we spend all of our time, like both Charlotte and I are, we get very emotional. It's a little cheesy, I guess. But when our products are running off the line, like it's, it's It's incredible stuff we've worked on. It's, you know, it's as close to Willy Wonka as a person is capable of being in this lifetime. So we want that to happen. And if we can't get that done, we'll know it at the earliest stages before we even formulate, before we even bill anybody.

How many people do you tell no then out of the percentage or percentage of brands that come talk to you with their dream? What percentage is it doesn't work?

We tell about half of them that an element of the product needs work, but I'm very, very proud to say that I think, Tara, would you say maybe 2 or 3 in the entire span of our business we have not been able to convince to do something in a way that's producible?

Yeah, cuz most of the, I would say it's not that half of the clients that we do this risk analysis for don't end up in formulation. That's absolutely not the case. Almost all of them do. It's more along the lines of we see what may or may not be producible or scalable or effective for their brand goal even, because sometimes they come to us and their vision's just a little all over the place and it needs to be refined. It's a lot more of refining and possibly pivoting than it is saying a hard no. For example, that—

Right.

Brand, the brand that I mentioned earlier, we absolutely made the product. I was just like, hey, can I change this? This one thing that I think would be a better fit for you.

Or in contrast, sorry.

It's mostly the dairy products that have rested, to be honest. There's the most of the products that didn't move forward were dairy.

It's also, or gummies. We don't touch gummies never again.

Yeah, but we could pass those off. It's, it's dairy because dairy has such an impeccably high cost. to enter that a lot of startup founders end up having.

What about the non-dairy dairy products?

Same problems. The raw material will be a little bit cheaper, but your preservation and formula development challenges will be almost the same if the acid's still in that range.

Yeah. I want to— so Cogues asked a question. We've got— I want to give a shout out. We got Cogues, we've got Mr. Halliman, we've got Alicia Duncan. Good morning all. And thank you for joining us. So Hey, before we forget to drop it in. So Coke said, what other flavor providers are in the big flavor zone in addition to Givaudan? And he said TFH, who actually I'm not familiar with, but you know, from my perspective, I would say folks, you know, Synergy, Sensient, you can maybe add Allen Flavors to that list. I think the, you know, obviously for Charlotte and Matthias, please name drop as needed to answer Coke's question, but I think the The question comes up and it's less about telling people no, at least in my experience, and more about the way you're approaching it isn't doable, right? Like dairy is a prime example of, hey, what you're describing can clearly be done. Like there are dairy-infused things on the market, but they're made by people with names like Starbucks. So like, how much fucking money do you have? That's probably one of the conversations we start with, right? So to Charlotte and Thayas, lest I continue rambling. What are some other flavor houses maybe that you've had, you know, good experience with that you wanna give a shout out to? And then when it comes to no, or maybe not that way, what does that look like?

Well, flavor houses, I'll let Char take the one I think she's thinking of, but we work closely with flavor producers. We have for a long time. They're awesome. They're, we'll go to them cuz we make in like new and interesting things on purpose. So, you know, like very as on the, on the edge of, of the flavor experience as we can. So sometimes we're asking for like, we would like, tomato vine, slightly acidified, and they'll be like, okie dokie. And they'll get us something that works.

Yeah. Whoop Pacific also, like, they're a smaller company, but absolutely excellent. And also shout out to their rep Lori, who is one of the nicest people and one of the first women to have a corporate cookie patent. Just gonna put that on the table.

Isn't it one of the coolest ladies in the world? She's, she's rad. And the Blue Pacific flavors themselves are like, but they do something I really respect, which is their library isn't like pages and pages and pages and pages, but the things in their library, perfect. Like if we want rose or, or a floral generally, they do really sick florals. Yeah.

Yeah.

There's a lot of also something to consider with your flavor houses is MOQ. For example, in the past we've worked with like Abele, who's actually now purchased by T. Hasegawa. So I think their MOQs might've changed cuz I think T. Hasegawa's MOQs are actually lower than what Abele's used to be.

Okay, sure.

I mean, I liked Abele's flavors very much. Our rep was delightful, like their specs were on point. However, their MOQ was so high at the time that a lot of Smaller brands were just not able to use them. The same thing with Sensient. Do they have phenomenal products?

Sure.

Can a startup who's still wondering if they could afford a $20K production run afford a 100-kilo MOQ per ingredient? Probably not.

Right, right.

So it's, there's a, there's just a million variables to everything is the unfortunate answer to CPG. Totally.

No, but I think to your, to the point we're all driving at, right? It's, it's the, um, God, who can I pick on? We've spoken to recently. It's, you know, I had a conversation with, uh, with you guys, with, with Matthias and a brand that you're trying to help frame this for. Uh, you know, the comment I'm paraphrasing, but the comment that we made was essentially like, hey, there's no perfect route. To get done what you're doing. Like, it can be done. You're going to have to pick which level of difficulty or which area you want to be difficult because like, if the, you know, for example, if the formula is simpler, production is going to be harder. The MOQ is going to be higher, right? If you make the formulation, you know, more robust to make, you know, maybe production easier down the road, that's fine. And presumably production would be simpler, but formulations is going to take longer, cost more, be more involved. Like, There's no world in which both are simple and we wash our hands of it and get to production in 4 months.

Exactly. You've gotta pick one.

Everything is a balancing act.

Yeah.

I would actually love your, your, both of your opinions on this as well, is, um, we see a lot of like early brand founders or, or people who are just starting about like thinking about starting a brand, but haven't really gotten there yet. A lot of what they do to try to educate themselves is like read up on or listen to a podcast or whatever on stories of brand founders who have been successful and they're like, let me try to emulate that. And I always think that that is impossible.

Oh, they all think they're gonna be Olipop and Skellet and Salt in 3 to 5 years. Every one of 'em.

I mean, whether or not they will, I think my, the reason I think it's impossible is because like there were so many things that had to lead up to that brand becoming successful or not successful. Even if they're reading up on a brand that failed, like The reasons are always gonna be different for everyone cuz everyone has their own network resources and also like freaking luck and timing.

Yeah.

Like we started working in non-alcoholic beverage 6 or 7 years ago when people weren't really talking about it in the US and we got lucky, frankly, that we started in it When there wasn't that many formulators really focusing on it. And now it's like the hot beverage trend is non-alc and alc alternatives and functionals. And that, that could have not happened. It worked in our favor, but it's very possible that Matthias and I would've focused on functional beverages and it didn't hit it big in the market.

We started in 2010 or something. I do wanna shout out as well, specifically—

2010, not 2020.

If, if we had started in 2010, I mean, we would've been on the early side. Uh, with this in mind, like this whole conversation, I think one of our, our New York favorite, like really, really, really, really well-experienced and excellent sales professional, Rob Novick. He, he operates here on the East Coast.

I know Rob.

Yeah, the man. He said something on a call once that like really stuck with me and he, he'll talk to people and he'll always He's a direct, clear, very professional guy, but he's like, listen, this is doable and it's been done, but you don't see the mountain of skulls, which never fails to make an impact. Because it's like, yeah, there's Olipop and Poppy and they, they went to the retailers and they grew and they took on Series A and they expanded and did all that stuff. But you don't see the mountain of skulls at every stage. There's a mountain. of people who tried the same thing at the same time and something didn't work right.

I love that. And it's not like they have to be in the Mountain of Skulls. They pay attention to Charlotte and Mathis and Adam, and you really are methodical about what you— if you understand basically your destination and the costs associated that you have to invest in order to get there and the time, Then, you know, the possibility of you, your success, or you minimize becoming a skull. So many don't pay attention and so many don't listen. And that's why we do this podcast, quite frankly, is to bring experts like you so that hopefully these founders or these people that have the dreams find you and Adam and Charlotte, right? At the end of the day, because that'll keep them out of peril and out of trouble and actually set them on a path to success.

There's ways to avoid it.

Sorry.

I love it so much.

I also think the, the, so I'm gonna use this to parlay it into the end here. So you asked about brand owners going to podcasts or these days ChatGPT or whatever, right?

ChatGPT is open Claude, man. You don't, ChatGPT is the biggest Claude.

Well, I think what I've experienced and, you know, maybe this will ebb and flow over time is like, for example, you go to a podcast and it might be, it might be a CPG founder, but maybe they did it in food. Right. And I learned this as recently as 2 years ago with, you know, my friends at FoodOps, like, or our friends, we all know them now. Right. But like, food is an entirely different animal than like, you can make a cake mix in a commercial kitchen and be in retail for years before needing to get to a co-packer, depending on the size and scope of the brand. Right. Beverage is not so forgiving and there is a give and take to that relationship. And so if you're a beverage founder thinking like, oh, well, You know, the popcorn people did it themselves for years. I'll do it by myself. Nah, except you won't, right? Like, there's just an entirely different mix to what's needed. So before we run out of time, A, where can people find you guys?

LinkedIn, Instagram, um, website.

Spelled out, so Leilai Lamb Labs? Oh yeah.

Yeah, our website's, uh, leilailabs.com. We're very, very happy Proud of our website. One of our branding partners we work with for products designed for us, just like a proof. Heck, at Vicious Studios, he's the man. I, we like to talk about this stuff longer than is necessarily wise. If people want to just talk about an idea they had, they saw something funky at the supermarket, they tasted a protein beverage and are frustrated about it, we'll talk. If you look at our Firefly meeting records, we We were talking.

We're both certified yappers, 100%. Um, to the point where my physical therapist told me I need to stop talking so much cuz it's hurting my throat. But we, uh, yeah, we always happy to talk about these things and, and see what's out there and meet other people in the industry, which is crazy cuz it feels like this industry is both so many people and also somehow small at the same time.

100%. You're just mentioning people that I know, which blows my mind, but it does. I mean, it's, you know, Mr. Kovacs, he's worked with us on a couple of brands in New York. So we definitely know who he is.

And, um, we're also, we're New York City based. So if anyone's New York City based, we're usually bopping around the bottle shops, like Spirited Away minus Moonshine, both locations. Um, and, you know, various events. So we're definitely around. Matthias and I will always talk formulation and brands. Depending on what you wanna talk about, find either one of us. Matthias will yap more about market positioning and I will stand on a soapbox yelling about functional safety for the rest of my life.

Good combo.

Yes.

Good combination.

Oftentimes ramble.

All right. LinkedIn, Leyline Labs, bouncing around New York City. Sam, you want to ask the million-dollar question?

Yeah. Thank you. And thanks for your patience with me this morning. I'm fighting. I need some functional. What's the best? First of all, it's not the question, but what is the best functional beverage I should buy for a cold and sinus congestion? Any suggestions?

Mullein. Mullein. She's the champ for congestion. Mullein makes a wonderful tea too.

And where do I, where do I find that?

Some of our Favorite, just like if you just want like the raw material as a tea, we really like Monterey Bay Herb Company.

Big fan of Monterey.

If you're in New York, Kalustyan's. I could spend hours lost in that place.

Yeah. Okay. Okay.

Well, here's the important question. What is the difference between success and failure?

That's fun.

That's such a personal standpoint. I feel like that's so personal.

Do you mind if I jump on this one? It should be personal.

Yeah, go for it, Matthias.

For us, we—

Do you wanna think about it for a second and I'll give my answer? Okay. I feel like it really depends on, on what you feel connected to. I've been told throughout all of my career that I take success like a grandma. I get very excited when people are just enjoying the products I've worked on. So I feel like Matthias is kind of the same way. For us, success, I feel successful when somebody's like, I tried this drink and I loved it, or I took this supplement and I felt a ton better. That to me personally feels like success. So for example, we have a friend who is self-producing, so they don't produce a lot of bottles here in New York called a drink called Parentheses, super unique product. They self-produce, so they sell less. Like, they're just, they're not a huge scale product. You won't ever find it in Target. But I could still consider them successful because they do something super unique. They're going through the challenges of self-production, which is really, really hard, and most brand founders cannot produce their own product. And so even though they're technically not selling like Poppy in like volume, The way people resonate with their product and the way that they're able to manage their business to me looks like success. And so that's how they feel as well, is they're not trying to be in Target. They just want people to love what they're making at the scale they're at, and they're not trying to be an international brand. So success is really to the individual. What makes you feel good about what you've done? Whether that's being proud of self-production, people just enjoying what you're working on, or seeing your product everywhere and on billboards and on TV. It's so, it's like a personal, almost emotional kind of question what success is.

Add to that a little bit. I was a sculptor before I entered the beverage world for, you know, economic reasons because they haven't really paid sculptors since like the late 1800s or so. Long downturn in the sculpture world.

Artists don't make money until they're Dead, right?

Yep. But to me, a product is successful. Any part of this world and anything that we, each of us here on this podcast as individuals do, can be done well enough to be art. A beautifully orchestrated product launch is artistry. The, the can art, obviously the design, that's, that's very clearly art, but all of these things working in concert with each other. To make a cohesive, impactful, flavorful, interesting thing out in the world. I mean, CBG products, not for nothing, is one of the things in the world that people are most in front of all the time, holding, standing near it, being pictured with it. It's, it's a backdrop to life. And it's enormously important to me that something that present and that significant In the world and society generally is done beautifully. So if it's done beautifully, that's success.

I said, my dogs were barking. I said, that is an artist's response if ever there was one. I like it though.

The artist and the grandma, I guess.

Right, exactly.

Kind of our vibe. I want people to feel good and enjoy products, and Matthias wants beautiful art. That's, that's what we're doing.

Well, in our last couple minutes, is there, is there anything we haven't asked, whether it's about you guys or your business or what you do, or All the above that you want to share before we let everybody get to their Saturdays?

I would love to quickly, because Charlotte mentioned this, this is a big soapbox for me, research. Don't look at Mintel. Run from Mintel. If you see a trend in the Mintel quarterly newsletter, don't do it. Even if you want to do it, don't do it. Once it's—

We say no offense to Mintel.

No, they're great. See, the problem is Mintel's accurate and because Mintel's accurate, once they can see that hibiscus is trending nationally, we're going to be getting 6 pitches a quarter for hibiscus, which means that all of the other formulators in the country are also getting 6 hibiscus pitches. And then if you look at the timelines, right, hibiscus grows, becomes more popular, it becomes nationally visible, and Intel picks it up and puts it in their newsletter. Great. Then you start producing, and at the fastest, 8 months later, you hit the market. 8 months after the trend has hit its peak. And now with a ton of competitors, it's like, it's your, it's a worst case scenario pitch for like, I'm gonna launch a brand when it's less relevant than ever and with the most amount of competition possible. But, uh, don't avoid that.

You can't. We're very anti-trend chasing.

Some of the most successful— oh, sorry.

Well, trends Like you said, it's by the time you get there, you're late. And also you're, that doesn't necessarily mean you have staying power. We always see these bubbles in CPG as a whole. And it's not just in beverage. It happens. My friends who are cosmetic chemists and everything, something is really popular. A million people do it. Eventually it bursts. Half those brands die out because all they had that they were banking on was that. trend that they chased and they didn't have anything else going on for them that set them apart, or they were too expensive, or they didn't taste as great. They couldn't be as cheap. Walmart eventually did a private label and you're not competing with that price and like visibility. So not to have something you're connected to, not to mention that has more staying power.

Nick at Espritzo launched recently, so we're mentioning him a lot. Because we're, we're big fans of his and, and the product, but I'd like to use him as an example of how this is done properly, which is Nick was like, this is a product that's awesome. And I know it's awesome. I drink it myself. It's radical. I think it has a place in the market that isn't filled. So if someone comes to us like that and we look at the market, we're like, it isn't filled there. There isn't a flavor experience like this here. That's, then you have something. That's where, where the, where the real goodies are.

Yeah. Also, yeah, every brand founder, even with the resources, is going to go through parts of doing this, not just formulation, just the, the brand existing. At some point it's gonna be really fricking hard and you're gonna not feel great. You're spending a ton of money, you got a bunch of nos from retailers, you know, whatever you're Working 14-hour days and haven't seen like the outside. At some point it's gonna get really hard. And when you're trend chasing, you're kind of just doing it for like cash and clout, and that's not gonna get you through the hard times. Feeling connected to what you're doing is gonna get you through the hard times.

Yeah, no, I completely agree. And I think my parting thought for the day is, you know, for everybody who's like, well, X thing is super hot right now and I wanna get in on that. Great. Had you started 2 years ago? You'd be perfectly lined up, right? Awesome. You'd have a little bit of brand recognition. You'd have a formula, you'd have product. But if you start now and it's not still a trend in 2 years, you've just wasted 2 years of time and money, right? And that's a difficult conversation, but also a very honest one, right? Sam, any parting thoughts from you for the day?

First of all, it's always been a great education for me to talk to a formulator because I talked to Adam all the time and Again, we're, we're at least not commercial. We're talking about getting distribution, getting customers, importing, exporting. We do all that stuff. So to, it helps center us and center me when I'm talking to those brands and they arrive. I start to understand kind of all the, the, the steps they went through in order to arrive at us, right? And there's a whole lot to unpack there. So that helps us when we start to talk to them when they say, now I want to go to market. You know, I have this great brand and now I understand how they arrived at that. So thank you. Um, and also thanks for sharing what the difference between success and failure is. And I love what you said, Charlotte. This rings to me is when you see someone say, hey, I really like this flavor. This really tastes good. That's, that's basically the feedback you get. And I was like, wow. Okay. So what I put into that, actually I'm getting that feedback right now. I love that, that you shared that.

Thank you both so much for having us on, by the way. Formulators are often not visible. We're way— we're up in the lab, but all of us are. We don't— we're often not very well-equipped, formulators in general, at like this kind of reaching across and out to the public. So it's a real pleasure to be on the show with you guys.

We were glad to have you. We were very glad to have you. Um, beautiful. Sam, you wanna wrap us up? And then Charlotte, Matthias, stay on cuz we wanna make sure everything downloads.

Sure.

Yeah.

Thanks everybody for joining us. Uh, thanks, thanks Adam for, uh, organizing this. And, uh, Charlotte and Matthias, always thanks for joining us on a Saturday morning. And everybody that has joined us today, get to your Saturday. We're get— we're hunkering down here in Minnesota. We got the big Coming about 22 inches. I think it's going to start at 4 PM today. So get your walks in now, uh, before the weather hits.

Beautiful. Thank you, everybody. Have a good Saturday.

Thanks for having us, guys.