Welcome to our live show!

Morning everybody and welcome to another Saturday episode of Drink Up with myself and our co-host Sam Anderson. Morning, Sam. And Caress, who may be having some technical sign-in issues, but she's here, our producer if you will. And our guest today, good friend and local formulator Ryan Bachman. How you doing, Ryan?

Hey, glad to be here. Thanks for inviting me, man.

So I'll try and get my shoutouts right. Sam usually does this. I'm, you know, on the fly. Obviously, Bev Assets, Sam Anderson and Alicia Vargo, thank you for sponsoring Drink Up, as well as, you know, Alias Advising and my side of things. Also, Sam, do you have a Freebird can handy? You can showcase Jay Williams. There it is, every morning. Boom. Morning, Jay Williams. So with that, with the sponsorship, the commercial out of the way. Boom.

You forgot yourself. Did you say yourself? I think you did.

I said myself. Yeah. Uh, also, if anybody's wondering, I'm not at home and I look like this because I slept like shit because I'm not at home. Uh, so bear with me on the way I look this morning. Uh, Ryan Bachman, welcome. Um, we have known each other for, I'm gonna say, 5 years, but we've only really reconnected in the last, I'm gonna call it, 10 months because you were smart enough to reach out on LinkedIn and say, hey man, it's been a hot minute. So with that, Fucking tell us who you are and what you've been up to.

Yeah, so, um, I'm Ryan. I run a small, uh, it's a boutique product development and commercialization firm called Chem Chefs, um, and I've been in the food and beverage industry for like 13 years now. Um, I got into this because I started a co-packing business, a branded company, and then which became a co-packing business, and really only started doing what I do now out of necessity. Um, to be honest. And, um, yeah, so day to day what I do is product development for new brands. Um, I also work on like reformulations, and then a lot of what I do is like really process-focused, trying to help people make things easier to commercialize and, uh, have less issues at the co-packer.

So. Absolutely. So how'd you, uh, and I've heard this story, but I want other people to hear it because I find it interesting, uh, How'd you get to— you know, your mom was a chef, if I recall correctly. Yeah, right. Yeah. How did you— how did you get to being in CPG, food and beverage, whatever you want to call it? Because that was not where you started.

No, it wasn't. I have a chemistry degree. Um, I had no intentions of coming back into the food industry. I grew up working in the food industry, um, everything from working in like meat processing— that was one of my first jobs I was helping break down animals and then clean processing equipment, which I would not recommend if you don't have to. And then I worked in restaurants, right? And so when I went to school, I got a degree in chemistry. I got to work on like published research, which was really fun. And then I got a job working while I was still in school. I got an internship with 3M as a— working in one of their groups. And then I got to work in a corporate research environment. after I was done with that internship. And I struggled a little bit with the corporate lifestyle, we'll say. And I had an opportunity come across my plate. A friend of mine was a big coffee guy, right? He was really into cold brew coffee, and he had started this company where he was bottling cold brew coffee and distributing it around the Twin Cities. where I'm from. And, um, and so at some point he was like, hey, I need help with, you know, uh, first of all, making nitro cold brew. Uh, he had been trying to like carbonate it with CO2 and beer gas, which tastes terrible.

Yeah.

And so I showed him how to do it with nitrogen. He'd come back to me and ask, you know, more questions. And, and at some point, um, the opportunity arose where I could go work with this guy, and we ended up raising a bunch of money and we built I think it was the first of its kind, but a small commercialization and product development business that was focused on that brand. And we built a retort facility. Anytime you do kind of the first retort facility, it's super highly regulated. There's a lot of— it's a steep learning curve. It's really expensive. And so I got this huge crash course on entering the beverage business for a brand and at the same time, you know, learning about HACCP for the first time, learning about, you know, I became a PCQI and then I started working kind of a little bit as a process authority for that business as well. And so I got the experience to eventually start running that business and then I helped sell that company to a private equity group several years later. And so I, you know, otherwise my career trajectory was— has been kind of crazy because of that, right? It was a really unique opportunity.

Sure.

And, um, but as I said before, I started formulating, you know, for that company, basically offering formulation services for like no money to be able to bring volume into the plant. And our capabilities were I would say, um, new enough where there wasn't a lot of formulation options outside of what we were trying to do. And so I started doing that really out of necessity and trying to make sure that we were building products that could really work well on the line. And that's become kind of like my operating philosophy, um, as I work on new products. Um, I think it's the right one.

Totally. I wanna I want to pause us there and take a second because I think it's a good point to interject the, uh, the comment that Sam made this morning on LinkedIn, which was— we talked about before we started— he did intentionally as, uh, you know, stoking the fire of this conversation. You'll hear, you'll hear, and I'll try and paraphrase it. So you'll hear various arguments on, you know, the liquid is everything, right? And then you'll hear flip side arguments on the liquid can be as amazing as possible, but if everything else around it is, you know, kind of a dumpster fire, right? The, the sales and distribution, the advertising, the marketing, the quality control, the so on and so forth, it doesn't really matter how good the product is, it's, it's going to fall to hell regardless, right? And so one of my favorite things about you and the work you do, I'd love for you to talk a little bit more about as we get started, is formulating with an eye for the business at large, whether that means things like, you know, the simple stuff that comes to mind, like, hey, what certifications are we trying to meet? Do those have value for the brand? So on and so forth. But also just, is this going to work smoothly at a production facility? Because unfortunately, and this is not a knock to those people, but a lot of formulators maybe don't have that firsthand facility experience, and so they're not able to bake that knowledge into what they make. So I'd love to hear your perspective on that a little bit more.

Yeah, I think it's important. There's a lot of really good formulators out there that do have, I think, a better feel for how things should be manufactured. There's people that are more experienced across more categories than myself too. And, you know, the area that I kind of came up in was, you know, like plant-based beverages. Most, most of what I've worked on in my career is beverage-based. And, um, but because there was no desire from other companies at one point, I got, you know, first access to some really interesting new stuff, and a lot of that was in the plant-based world related to coffee.

Right.

And anybody that knows me well knows I'm a huge coffee nerd. I've been, you know, learning about coffee chemistry was kind of like my— that was my main focus in building that first facility. And so understanding, I think, the job that's required of the materials you're putting into a product is really important. And whether or not the, you know, the business is going to accept that, there's better people than I to make those assessments, certainly, that have a lot more experience. And, but, you know, when I, when I was running that, that business, I did have some firsthand experience selling into retailers with the branded product that I had. I was working with distribute— distributors and building a co-packing business that has a brand. all at the same time. Like, it's— I think it's a unique set of things to balance, right? And so I definitely have this, you know, my desire as a formulator is to have, you know, if a small company wants to start a product business, I want them to be successful, right?

Mm-hmm.

And if I'm over-extractive at the beginning, that leads to more challenges. If I'm not considering their business and the, you know, the shelf space that they're going into in some way. I think that's also maybe if I know something about that, I'll at least share it, right?

Mm-hmm.

And so I'm— I try to be really pragmatic about this stuff, um, you know, and, and, and I want them to be able to, to succeed. So, you know, if I have experience with stuff, I'll share that openly and It's not always relevant, right? Sometimes it's just anecdotal, uh, mistakes that I've made, or, you know, it's things you learn.

Um, I think the, you know, to again, to pull on one angle of that, like one of the things I love that you do, and I'm not saying other people don't, but I, I am saying some places struggle with this because it is a more involved lift. And I think this is maybe one of the things that Sam meant with his comment, and I'll let Sam kind of, you know, explain a little bit more, is Costing, right?

Yeah.

Super easy to understand, a little more difficult to put in practice. But, you know, one of the things I love about you is, is one of the first questions you'll ask, one of the first comments you'll make is either, you know, hey, I heard you, brand owner, tell me that we need to have this in the beverage. Well, that's a fairly expensive item that's going to make your COGS, you know, closer to this maybe per can. Or you might just say, okay, you know, I know you need to be, or you want to be under X number of cents per can on the liquid, like, I will do everything I can to make sure that happens as I'm formulating it, lest we get to the endpoint, which I'm sure is what Sam struggles with with some brands where their liquid COGS are 70 cents a can, which is outrageous. And I'm being facetious, right? But it's some ridiculous number.

Yeah.

And then they get to Sam's door and they're like, hey, my cost of goods per can is insane and there's no way the math's ever gonna work. But I'm paying you, Sam, go sell it. That's gotta be easy, right? Just go sell it. Yeah.

Right?

Do you struggle with, Sam?

Yeah, it's funny. I appreciate the call out and I like being the thinker today. You know, I'm just, I'm listening to what you're saying, Ryan, and I very much appreciated that you're more than a formulator. You've developed brands, you've gone through distribution, you've talked to customers, and so you understand what we're talking about. And really, I think it comes down to 3 things: taste, story and value. Because at the end of the day, if it doesn't taste good, they're not coming back.

Yeah.

They're not coming back. Let's just call it what it is. And if you don't have a story, they're probably never going to shop you anyway. So you have to create the story, but then you hit me of the value. If there— if I'm— and there's, there's 2 gatekeepers in this equation. Sometimes there's 3, but there's distribution's gatekeeper number one. So you got to get past them, right? To say, okay, here's my taste and Here's the story and the value. Then you got to go to the customer. I mean, the account that sells to the consumer, right? And you got to tell them the exact same story ultimately to get to the consumer. So, and I think the consumer nowadays is looking for value as well. So all 3 of them are looking for those 3 things. So I'd be interested if you could take us through taste, story, and value and share that with us.

Yeah. Yeah, and I'll say this, you know, I've worked on a lot of different products. There are some that, you know, I have a ton of creative freedom around when it comes to taste.

Yeah.

There are others where I have zero creative freedom when it comes to taste, you know, and I've been involved in, you know, there's been multiple trends since I've been in the beverage business that I've, you know, I've had more projects come up in these different categories. You know, there's, hey, for a while it was let's formulate everything with erythritol. which can be a tough sell from a flavor standpoint for a lot of people. Um, you know, today it's more, you know, I'd say monk fruit, stevia, and then reduced sugar, not zero sugar. That's kind of where we're at today. And so I think in some ways, when it comes to taste, you know, as you do more products, you get a better feel for how things should flow. I, I think, um, I also spend a significant amount of my time cooking. Not out of necessity, as I love cooking and I love creating new things outside of my day job, right? And so I have a, I'd say, a fairly good feel for, you know, how to build something that's going to be pleasurable, that feels craveable, you know, those kinds of things. And part of that's understanding, especially with small brands that don't have buying power, you know, right away from an ingredient standpoint, is how do you build something that's cost-effective that also tastes really good so that they have a fighting chance out of the gate? And that's not always been possible with certain products I've worked on. You know, there are products I've worked on where the liquid cost was really high and the customer said, I still want this to be exactly what this is. You know, companies that have maybe other businesses that are tangential to the brand or they're doing other things with that brand, maybe have a different allowance, right, than somebody who's starting a beverage company and it's all in on the beverage company. And so I've seen a good mix, um, a good mix in terms of, you know, having something that tastes really, really good, that has the, you know, the liquid cost where maybe I think it should be based on working back a, you know, suggested retail price really and the distribution model. And, um, and also, I, you know, I was lucky I had a of, uh, so a bunch of brands that I was working with when I was running that co-packing business when e-commerce was still like affordable. So I got to watch that transform into becoming like a really, really challenging mess to try to make money doing e-com with heavy liquid, uh, like beverages. And, um, and so I think these are all, all things that when I work with a client, I try to have under consideration.

Is, uh, you know, you're looking at the cost of goods to get to minimize those because you've worked the price backwards. It's interesting. I won't say it's, uh, a brand, but this brand, they believe that they can command a price double beer in the NA category.

Hard. Yeah, I, I don't know how—

I don't think they can do it. I, I just, I, I, I think that it's, it's of, um, Athletic is at $12.99 for a 6-pack, and then this one has to be $24.99 for a 6-pack. I think the story has to be there and possibly have the story and the taste, but well, I think there's too much of a separator on the value.

And is that what consumers want to, you know, I mean, is ultimately, you know, somebody's willing to pay something because of that value, right? And if the value in that category You know, it's— I think it's hard when you're, when you're making something like, uh, say an NA beer or an NA cocktail brand.

Yeah.

You are, you are going against something that inherently, if it's the alternative is an alcohol product, that inherently has a different value proposition than the NA product, right? And in the NA product, you're up against pricing from other NA products whether you like it or not.

Yeah, I, I believe, I believe so. And, you know, the— it's just interesting. So, um, sticking on value, so in order to get that value proposition, you work to reduce your cost of goods on the brand. So how do you— so how do you get a really good product and still be a really good tasting product as you're rolling out? Because your cost of goods are always going to be higher when you're a new brand.

Yes.

Because obviously it's called what it is. The more volume you do, you're Cost of goods go down.

The word compromise comes to mind, and I don't mean to say like that it's just about me telling them what's what and that there's no say in it. Like, it's a dialogue every time, you know. I think for the most part, there are a few occasions where somebody's come to me and said, here's an idea, I want you to just create that completely without any direction. Um, I like doing those. It's kind of like when you go to a tattoo artist and you're like, hey, Make me something that's going to be cool instead of being controlling over the entire process. It's a different— when it comes to creative things, I think it's a different process overall. So, um, I always—

Do you tell your tattoo artist to just make me something really cool?

I have at least half of my tattoos where I said, here's a concept, just whatever it is you want to do.

Motion seconded.

For anybody that's not— They're my favorite tattoos. It's the ones that I had an artist do their thing on, right?

Yes.

And I'm not saying I'm an artist, it's different, right? But to some degree, for people that have, you know, maybe more experience on sensory, right? And more experience on, you know, how to get to, you know, when I say, you know, a product that has a lower cost of goods sold, like there's a difference in using, you know, lime juice versus using citric acid or malic acid or tartaric acid in a product to get pH down or something, right? And so there's multiple ways to get to a product that can taste really nice, that has really good balance. And part of that's thinking about how you build the platform and then ultimately leverage, say you have 3 or 4 or 5 SKUs, you're going to have consolidation on a bunch of items and then you're differentiating on these based on whether it's the flavors or— smaller changes within the set that allow you to have, you know, higher flavor impact in the direction you want, but you're not spending on each independent SKU for all new or different items, right? And that's, that's pretty common across almost all formulators, I would say.

Okay.

That it's, you know, you build a platform. And one of the things I, I always focus on, right, and this is where chemistry is really helpful, is can I build something that's really, really stable? Because a lot of the projects that I've had over the years There's quite a few where there wasn't like an analog to that that I could look at and say, here's how I worked that backwards. It was, this is a new thing and we're, you know, it requires more testing, it requires more due diligence in building that new platform and having a solid understanding of chemistry, especially for like thermally processed foods and sterilized beverages like retort beverages.

Mm-hmm.

Um, and it's not perfect. I'm not perfect with this by any means, but, um, you know, that's part of that balance of, of—

it's—

there's feasibility on the liquid of like, hey, can these things go together? Can they be processed together? And does the pricing of these things work to where you tell me your SRP is going to be $3.99 and you're going to go DSD? Like, There is a limit of what you could put in that can from a cost perspective.

So you start with a formulator then? You just, you say basically, if you want to hit $3.99, these are your choices.

It's sort of, it's, it's, it's always part of the conversation and not everybody is aligned all the time about what that means. And, and, you know, you know, one thing I do try to do well is I try to build the liquid COGS outside of shipping, right? I don't calculate shipping for, for the client to Typically, but, but I try to build the liquid COGS on a worst-case scenario. Like, here's the absolute MOQ, everything's MOQ, um, and making sure that that price works within the roadmap to the SRP that they're trying to use, right? And if everybody's taken 30% along the way, maybe an additional 5% or, or 8% on brokerage, like, having those things calculated or just having gone through that. You know, having that muscle memory, I just think is valuable. And not everybody wants to hear it, but it's something that at least I try to think through.

Do all formulators do that, or is this really unique to you? Because you're really considering—

I think there's others that do that. No, it's not just me. Yeah.

I think, and again, I'll let, I'll let, you know, Ryan give his 2 cents too. But the piece I want to call out for anybody that's listening is I think a lot of new brands Prime example, right? People I've worked with in the past, they'll come in and be like, I want— you know, Ryan mentioned lime juice— like, I want lime juice in my beverage. And you go, why? And not because— I tell people all the time—

I thought you were gonna say pickle juice because you were on pickle juice for a few weeks.

Uh, but you know, you go, why? And they get offended, or they might. They may— well, why, why not? Like, well, no, that's not why I'm asking. Like, I'm not asking to challenge it, I'm asking for clarity. Because even from an operations guy's perspective, like, Do you want lime juice because you need to call out that it's made with real lime juice, or do you want lime juice because you think that's the only way to achieve a lime flavor with a full mouthfeel, with the sweetness, with the tartness? Because if that's the case, there's other options, because people like Ryan and others exist who understand the chemistry and can backdoor their way to that same flavor without maybe having that juice component. And not that there's anything wrong with the juice, but again, if it's thermally processed That juice is gonna age. Other things may age differently, better, worse, whatever. But that's the, that's the education that has to start at the beginning. And all of that ties into cost.

So what, so remember the sangrita we talked about? And I think Ryan, you were familiar with this too. It's the sangrita. And they use all natural ingredients and stuff. And I believe, uh, maybe the two of you or Adam, you tried to tell them, hey, if you wanna scale this thing, you can't do it the way you're doing it. You know, and then plus it's like $19.99, and you look at the competitive set, there's a big separation by $10. I mean, everybody else is like at $10.99. Let's call it what it is, it's Bloody Mary mix called Sangrita, you know.

Yeah, you remember that product, right? You talked to those guys a few times, right?

Spoke to them.

Yeah, they're super cool, first of all.

And yeah, they are.

Yeah, where I try to also I think part of, part of what I need to do too is, is make sure I'm not overpowering the conversation when it's inappropriate.

Sure.

The, the thing that you guys might have a better feel for, right, is like I'm, I'm very much on the front end a lot of the time, right? And, and I'm not in the day-to-day when it comes to scaling from, you know, half a million to $50 million in sales, right? And so in terms of, of how the, the product is It's working in the market, how it's being received, the actual mechanics of how they're distributing and getting paid for that product. I'm not involved in those things day to day. And so, you know, when it, you know, a product like that comes across my plate, I'll have suggestions certainly on ways to make, you know, within the subset, instead of using fresh ingredients, maybe there's concentrates or there's multiple ways to get at least some cost reduction in place that doesn't fully cheapen the product in terms of quality.

Yeah.

Um, and at the same time, you know, there, there are certain products that the quality and the craftedness of it maybe is a huge advantage for them at that time that nobody else can replicate. And so I, I try to be, um, practical certainly and helpful when it comes to how to evaluate some of those things, but I'm not the deciding factor either when it comes to that often. And so again, if it's something that has, you know, fresh, all fresh ingredients, like, you know, if it's tomatoes, if it's peppers, if it's onions, you know, being able to scale that from a manufacturability standpoint, those are things maybe I'll bring in suggestions to offer as well as like, how do you go from one co-packer that's small? At some point, you're maybe going to need 2 different regional co-packers.

Yeah.

And how do you bridge that, right? How do you manufacture your product at a certain scale where you're not tied to a very expensive process in the same way, if that's something that's allowed within the project scope and within the product's, you know, the overall value of the product? Because I also don't want to cheapen somebody's—

Yeah, I mean, you just gotta call it what it is. There's, there's, there's a definitely segment of consumer that's going to pay $19.99 for that product.

Yeah.

You know, there's also— I would argue that if you want to do something from scratch, make it from scratch. If you want something all natural, make it yourself. Go out to my garden, pick the tomatoes, pick the onions, get the peppers, put it in the blender, and blend it up. And that is truly a from scratch, all natural ingredients.

Yeah.

Maybe you understand where I'm going here.

So— Totally. Yeah. I mean, it's how I do it.

I'm buying a can or a bottle of something, I don't expect it to be all natural ingredients. I just need something really fast. So are we putting too much time and energy on this?

I think that's a really good question. And, you know, I think working in CPG and then, you know, I know like the way I, you know, for example, the way I feed my family typically is there's some consumer products that are, you know, in rotation, but we make everything from scratch for the most part. And, and I have the luxury of doing that, right? Like, that's, that's not You know, from a time perspective, that's not the fastest way to feed your family. It's not the fastest way to, or have a, you know, a party. You know, if I'm gonna spend 3 days cooking for a party with 50 people, that's not— not everybody has that.

Where's our invite?

I'm coming. Yeah, Ryan's house, it was amazing. So if you ever get an invite, don't turn them down.

I won't. I appreciate that. That's the most flattering thing I think I'll hear today.

It was so good. It was— every time you post, I'm jealous. Like, Bree's a good cook, but Jesus Christ, man.

Ryan's thinking I'm attacking formulators out there. I am not. I think you're the most important step of the process is be clear.

I don't know about that, but it's, uh, I mean, I want to—

so Ryan, this is something you and I have gone over, whether it's with the St. Greeter or some of these other folks. I think it helps tie in, you know, tie back in kind of something you mentioned in the beginning, which was your facility experience, right? And that is Um, whether it's the Sangrita gentleman we talked to, who, by the way, the product was delicious. Uh, they were super cool. They're based out of Texas. Um, wish them nothing but the best. Uh, but like them and a few other folks, I think there's a— there's maybe an opportunity for you to talk a little bit based on your facility experience of like, you know, whether it's the people who come in and say, oh, I want to use, you know, fresh limes or fresh jalapeños or whatever, and I'm doing it, you know, with a brewery. And you're like, okay, there's equipment and there's processing that's needed to do that in a food-safe manner in a scalable way that even I was unaware of that you've talked me through. In addition to even other things like, you know, people not understanding what retort is. That was news for me a handful of years ago, you know.

For everybody at some point, retort is news. Right.

And so You know, I guess like just talking people through as we get into this, because it comes up a lot, right? This whole, um, natural or better for you, which I'm not talking shit on. Like, there's a lot of benefit to those types of products. But maybe, you know, give us a little bit— and I know you could talk for hours on this— but give us a little bit on like, if you're a new brand and you're looking to do things as, as naturally as possible, you know, tunnel pasteurization is kind of the low-hanging fruit, but there's so much more to that in terms of ways to handle fresh produce or ways to make sure you're not using preservatives. And so like, what are some of the things that you're commonly seeing or getting asked in that sense?

That's a really good question. I'm going to try to remember the question as I answer so that I don't get too far off topic. Um, yeah, I mean, I prefer to try to work on things that will be more natural and more digestively, um, understandable by the body, the things that'll make sense on the palate versus Things that would be, um, on the more synthetic side. I don't really work with synthetic ingredients for the most part anymore. Um, most of the brands— this is unfortunate to do— is most brands don't want that anyways, um, that I work with. So, you know, I think I, I typically don't work on things other than if it's like a natural extraction of something, which I have a lot of experience doing, you know, coffee being the number one thing of You know, I have batched, I don't know how many hundreds of thousands of gallons of coffee in my career or been involved with, you know, batching coffee and making extract from coffee.

Sure.

You know, that's one good example where, you know, the analog of, you know, doing a custom extract can be better from a sensory standpoint than, say, using, you know, what used to be available for, you know, maybe instant coffee or soluble coffee. And if I take that same rationale against, you know, using fresh produce versus from concentrate, there's certain things by the time you get to, you know, a finished, you know, coming out of the tunnel pasteurizer that you can't tell the difference.

Mm-hmm.

There's some things that you can, right? But in the bridge of, you know, if you're allowed to use natural flavors or natural extracts as part of that equation versus saying, entirely whole food type ingredients like lime juice or tomato juice or something, you know, there's— those are 2 very different ingredient builds in terms of the allowance, so to speak, what you can use.

Can we play a game? Yeah, go ahead. So I'm looking at— I guess where you're talking about like what's in the can, I don't know what's natural and not natural. Like, like, I think you educated me this, um, a few months ago, but can I read some ingredients?

Yeah, I mean, we can, we can do— I hopefully I know all of them, or I'm about to.

One of them is your product that you made. I won't show the product on the screen, so some pressure now.

If it's something I made that you've seen, it's going to be all natural ingredients.

All right, so carbonated water is a processed food.

Yes, but it's in—

it works.

Agave nectar.

Yep, natural.

Okay, blood orange juice from concentrate. So from concentrate, I see that a lot. So what does that— what does that mean, from concentrate?

Well, in order to make things easier to transport and easier to use, oftentimes in the juice world you're removing water as part of the process from processing the fruit. You know, if you were to ship not from concentrate versus from concentrate by mass, for the concentration level you might need in something, it's totally different. As well as it allows you, you know, in a from-concentrate environment, allows you to use a lot less of that thing in the product mix versus, hey, all of my water is coming from all of my juices. You don't have the same ability to formulate with those 2 different, uh—

Okay, so, but it's all natural. So concentrate—

It's all natural. Yeah, you're just removing the water.

Got it. Cane sugar, lime juice from concentrate, cranberry juice from concentrate. This is— this like sounds really good. Sodium citrate, is that—

Sodium citrate, yeah. It's, it's what's called a— it's a salt of citric acid.

Okay.

And it's used for usually for pH adjustment. Um, you know, a lot of citric type sodas or citric Okay. Um, you want to nail a pH that's going to be really constant, and that allows it to go through processing, allows us to stay on the shelf and not have organoleptic and sensory changes over time in the same way. So it's kind of like how you build, you know, in dairy products you'll see phosphate buffers. It's a similar concept of stabilizing a system based on its level of acidity so that it doesn't go up or down. Much.

So that product we just went through is one of the ones you created. So they should promote that more somehow because I look at the label— let me read another label. This is another product.

Okay.

Um, okay, so carbonated water, organic agave syrup. The word syrup, is that okay?

Syrup and nectar in this case are both on the— you know, if you see a spec sheet from that ingredient, they'll typically both be And is that—

so again, I think I know the answer to this, but actually it's a good question. Uh, you know, so if concentrate as opposed to just the standard juice is just the removal of water, is the syrup in this case essentially— I might be oversimplifying it— but just a further concentration of the things such that you remove so much moisture that it's now more viscous? Is that a fair assumption?

Uh, some— well, some syrups are just made from sugar and water. Naturally occurring, you know, maple syrup, for example. Yeah, you're taking and removing water and you're—

That's what I'm thinking of.

Concentrating, increasing the Brix. Part of the reason why you make syrups out of some of these things too is that the water level in that is part of what is contributing to the ability for, you know, mold and bacteria and yeast to grow. And when you have a certain moisture level or below, or water activity level, Those organisms can't grow. So, for example— That's a big reason for syrups existing the way that they do.

So, for example, in years past when I've had people tell me that they want to make a maple water beverage, right? And it's been several years since I've gotten one of these, and they're, you know, against the idea of using maple syrup. There's actually a There's a fair argument to be made for, for a more concentrated syrup being safer based on what you just said.

For storage, transport.

Yes.

Yeah, I mean, there's also powder versions of like most of these, you know, say coconut water or maple water. There's, there's, um, either drum-dried or spray-dried ingredients now of these things where, where you can get that form, and that's Maybe a safer bet actually than using the syrup, as long as there's no binders in there that— or carrier powders that they don't want to have on the label.

So, okay, very cool. Sam, go on.

Yeah, I think so. I think like this product, I think— well, here's one I'm going to print. A glycerol of ester of wood rosin.

Are you reading a Gatorade bottle?

This one does have— it's funny you said that because they have 3, uh, no less than 3 grams of sugar. And it also has all-natural flavors and electrolytes. So that must be the electrolytes that they put in there. And then monopotassium phosphate, that must be electrolyte as well.

Well, it technically is an electrolyte. It's also a buffer. It's a chemical buffer. Phosphate salts typically help buffer a solution near a pH of 7. Which is useful for especially things that have like proteins in them.

And it looks like to get color in there, they're using red cabbage juice concentrate for color and then sweet potato extract for color as well. So they use natural— so people use natural ingredients these days for color. They don't just drop in color for—

There are so many good liquid, uh, colors. You know, not all of them are affordable at small scale. Certainly. But there are flavor companies and natural color companies that have done like a lot of really good research into this and how to stabilize these more vibrant colors in particular.

Interesting.

Instead of having to use synthetic colors.

So for the most part, the beverages that are in the shopping aisle, are they mostly all natural ingredients these days?

The ingredients that are— sorry, the beverages that are what?

So I'll walk— I'll go into like Lunds today. Or a Kowalski's and I walk the beverage aisle.

Sure.

What percentage of those brands in the beverage aisle— I'm talking about functional beverages stuff, we're talking about NA products— are all natural?

I think there's a lot more. You still have a lot of products, especially because of this movement towards sugar reduction.

Yeah.

Not everything tastes— you know, you're not going to have the same flavor typically with monk fruit as you will with, you know, Ace-K or sucralose, which are synthetic sweeteners.

Yeah.

So, you know, if you're looking at functional energy, there's, there's a mix where you have, you know, natural ingredients in tandem with synthetic sweeteners, and then you have, you know, products that are entirely natural ingredients. I do think the continuation of natural colors from, you know, fruits and vegetable type ingredients is going going to continue to expand. And then I've done a lot of work with blending different natural sweeteners together. And there's certain sweeteners that are not allowed in Whole Foods, for example, like allulose. And then there's others that they're just— I think the comparison point for a lot of these products, especially acidic products, is either citrus or berries or something that's going to be like naturally tart and have sweetness to it. And not every sweetener can be used at, you know, in isolation to, to imitate nature, so to speak, and have something be really like— the way I think of it is, you know, part of what I do is try to trick the brain into understanding, you know, in the most natural way what's happening on the palate.

Got it.

You know, using sweeteners and blending those You know, for example, cane sugar with monk fruit is easier to make something taste great than just monk fruit by itself.

Wow. Can you, uh, can you make a whiskey and a whiskey taste like whiskey?

There are flavor houses that have gone to crazy levels with this stuff now. And, and I don't do, um, you know, I— so I don't, I don't build natural flavors from scratch. There are other people out there that do.

Yeah.

I typically work with flavor houses to either work with stock items. Sometimes for new brands, that's helpful. Depending on what the product is, there might be enough of an IP moat on top of, you know, that, that it's not a problem. And then I've worked on customizing natural flavors. I have a background in analytical chemistry where I was doing chemical characterization, which is helpful talking to flavor houses. And so, yeah, it's, um, I think I answered your question. I don't remember. It just—

I think you have the ability to do it.

So his question was, uh, was could you make an NA whiskey taste like whiskey? And the short answer, Ryan, is yes, you can. Yeah, yeah, in partnership with some other folks.

Yeah, exactly. It's selecting the right ingredients. And, um, I, I've been almost freaked out before with some of the flavors that I've tried, with how accurate they are to like a Kentucky bourbon or something. It's pretty crazy now. There's brilliant flavor scientists out there that have created all sorts of stuff.

Is there— let's just go down that path and we wanna, with the remaining time too, we wanna have you maybe share some things you wanna share with everybody that's watching you today. But on this creation of the N.A. products, try to replace, you know, spirit, wine, and beer. And I get it, you know, people are being mindful. I understand that. But is there a risk in that too? In other words, you're starting to put all these ingredients in there to try to make it taste like something that comes from nature. Because for me, like, you get a wine, it's, it's from nature. I mean, for me, it's from, it's from a vineyard.

Yeah.

You know, and they, you know, they, they, they go through their whole process and shows up in a bottle, right? From, you know, from the farm to the table, literally, right? It's— and there's a lot of care that goes into it. There's not a lot of stuff that's added to that. But now we're trying to replicate that. Is there a risk? Like—

I think the most, the most, uh, useful kind of example I would use, and that I probably have the most experience with, is going from dairy to non-dairy.

Okay.

All the different things that non-dairy can be. And so I think you can build things responsibly, both from a manufacturability standpoint as well as nutritionally, but they're never going to be the exact same thing as what, what it, you know, comes from nature. Ideally, you know, if you could be drinking milk from the cow that's in your— that's on your property that same moment, like right after it was milked, that's probably an ideal situation and not even having to process further. Um, I'm not advocating for drinking raw milk as an entire— I'm not saying that. Um, I don't know enough about that. I, I'm not, I'm not gonna get there, go there. Um, of all the things that are possible or great or not, I'll stay out of it. But, um, I think, you know, there's one of the questions I wonder is, you know, it's like Is there demand for the product? And then how do you get there in a reasonable way? And I think there's ways to do that responsibly, and there's ways to do that less responsibly. I try to do it responsibly where I don't want to work on a product that's going to be digestively confusing for people, that's going to cause them problems, or especially it's for, you know, a lot of products I've worked on historically have been marketed between, you know, 18 to 35-year-olds. And when you're 18 and your body is still developing digestively, it's, you know, I don't want to work on something that's going to screw somebody up. So, you know, that's my general approach to it, I think.

But I mean, I think just those 2 questions are, um, and I'm blanking on the exact verbiage of the first one, but basically like, does it have value and how do you get there reasonably?

Right.

Yeah.

And they're so simple and I'm sure you said 'em just, you know, thinking through it, but like even that alone, as I talk to new brands, like I don't know that a lot of the people I talk to have answers to those questions, right? Or have even thought to ask themselves, right? So I, yeah, I just think it's a phenomenal point because we're gonna run up on time and the 3 of us are all notorious for this going long. A, Sam, do you want to ask Ryan the question that we always ask?

Yeah, I can take the question.

All right, you take that one. We'll start there.

Yes, uh, you got to give this some real thought here, Ryan. We ask everybody that comes on the show or the podcast to, uh, answer this one question. It's the most important question we'll ask you today.

Okay.

Do you know what it is?

I'm forgetting, but I believe I've heard it before.

What's the difference between success and failure?

Um, I think I, I— that is a constantly changing answer for me these days. Um, I think that I, I'll say this as a person that is not— I'm not a money-motivated person. I'll just say that out loud. I need money for my life and to make things work. But, um, I think if you're doing something that you truly care about, you're invested in and you get to make a difference. You know, for me, what that means is trying to like leave things better than I found it. If I'm in that space regularly, um, and adding value and kind of like adding to the stream of life versus taking away from it, that feels like kind of my, my main objective to success. And it's being useful, it's being helpful, it's, it's not getting, you know, um, distracted by all the other things. It's maintaining that kind of overarching, uh, barometer.

So that's, that's awesome. You're evidently a giver, which is awesome. We need more of you on this planet. What keeps you going?

I have— I think is— I think if you, if you're in CPG long enough, you'll get resentful at CPG sometimes. You know, like, I think I see opportunities for there to be more success among small companies. Like, you know, I'd rather be contributing to a bunch of smaller companies being successful than— I'm not a huge— I don't do a lot of business with any, you know, international conglomerates. I don't do any business with the multinational food companies. Um, I don't think they want my help probably either, so that's totally fine. Um, but I, I genuinely like creating things, and I like seeing somebody take an idea and be able to like build something with it. And often I'm not the idea guy, right? I'm, I'm the facilitator. I'm, I'm, I'm a helper, you know?

Yeah.

And so, um, That, you know, especially when I'm working on a lot of smaller brands, I'm getting to, you know, add value and know that and be— have it not be in question because I know we're doing something that's helpful. Um, that'd be— that creates kind of a workflow and like a personal flow that feels fulfilling.

That's awesome.

Yeah, that's, that's awesome.

So good, good.

Well, I was just gonna say, so, uh, I mean, we could do this for hours, as you well know, Ryan, because I'll plug you for information all day long. Uh, what do you want people to know about you, your business? Uh, maybe I'll mute myself after I say this. I'm getting some feedback. Uh, you, your business, and, and where to find you, how to work with you. Like, what do you want to tell folks in the last, you know, 5, 10 minutes here?

Yeah, I think, you know, What I'd love for people to know, especially if they're looking for like technical help, or whether that's formulation, or it's, hey, my product isn't working on the line super well, or I'm having manufacturing issues, or, you know, I'm running into a cost problem because of inflation or because of, you know, maybe tariffs or something else, is, you know, I try to be as value-added as possible. Possible with what I do here. And I'm not the most expensive formulator by a long shot. You know, I think I try to work with companies where I know for sure that I'm not the first point of over-extraction in their ability to be successful. And so I like having, you know, the ability to have a reasonable conversation and, you know, get to a point where it's, hey, this is what they need. This is specific enough and it's not going to be Adding you know superfluous things, and so I you know I did create a website. It's it's not that cool yet. I'm still working on it, but the website is chemchefs.com.

How do you spell that?

D H E M C H E F S dot com.

You got the the chat on the podcast, Sam. I'm gonna throw it in LinkedIn.

I'm gonna see if this— I'm gonna stream it and tell me if that's right. Is that right?

That's right.

Perfect.

Yeah, so, um, you know, I can be reached by, uh, LinkedIn or on the website. Um, if somebody's just curious about what it, you know, what would a formulation look like or a new product, uh, you know, add to a lineup looks like, I'm always happy to have those conversations. Um, you know, I think where, where I, I try to be, um, focused again is on natural products. If people are looking to do things that are, you know, unique and have, um, maybe some additional layer of complication, I've worked on a lot of those things. So, um, but yeah, I love doing, you know, I love doing this. I feel really blessed for the people that I get to work with that are also involved in kind of the early stage uh, you know, setup and brand building phase like you guys.

Yeah.

Um, and so I think part of it's, um, you know, the, the small network that I have are like really mighty people, right? People who are really impactful with their abilities. And, um, and so I, uh, I look forward to talking with more brand owners that are trying to get into the space.

And, uh, that's, that's, that's great. I mean, I, I, we always talk about 4 things. It's, uh, test it, build it, scale it, and sell it.

Yeah. So do you—

are you— I mean, you're probably all— are you all part of those phases? Are you more like in the, the test it phase and you kind of hand it off? Are you coming back and adjusting as you go too?

So it depends. Yeah, it depends on what it is. You know, there's some products, if it's something that's, you know, for the lack of a better word, novel, right? Something that hasn't been done before, there's more test it phase than there is You know, just, hey, you're, you're on the line and it's, you know, there's certain products where it just requires more evaluation before you can get out there and start selling the product, right? And I'm always an advocate for doing testing and for especially like real-life shelf-life data if possible, not just accelerated testing for certain product categories.

Measure twice, cut once.

Yeah, exactly. And, you know, the re— the The resource intensity of launching a beverage brand is harder when you're launching and then relaunching and then relaunching, right? If you're iterating at scale and there's things that weren't incorporated before, it's really expensive and it's really risky, especially for new founders. It's a quick way to run out of money.

Well, it's funny. Can I ask a question on that?

Yeah.

This may be an Adam question too. So I have a brand called Viventus. And we've raised like $80,000. I'm not going to hide anything. So, and we're like, well, we need $150,000 to launch. And tell me if I'm wrong. I said, we've already done the formulation. We know it's in the can. Heck, we got Bob Murray, Dr. Bob Murray from the Gatorade Institute, right? We got— Wayne opened up Pepsi in 67 countries. Greg Villa worked for Procter Gamble Sports Division. We have a great team. We're having a hard time raising money. So I told her, I said, hey, we got $80,000 on the table. Let's create it. Is that a mistake? I said, let's just create it and go.

I don't know. I mean, I, I don't think I have enough information to give you probably unwarranted advice.

Um, I'm just like, don't do it.

I've seen— I don't know, I've, I've seen people start with a very small amount of money and be successful. I've seen people start with a lot of money and be unsuccessful. I don't know what the, what the magic is and like the I don't know how much timing matters versus product-market fit versus, you know, I, I'll try to stay out of that part of it because I think there's— there are truly better people that maybe have more of that gut feel than I do on that stuff. I have a lot of anecdotal evidence around things I try to focus on.

Yeah.

And try to incorporate. And, um, you know, it just— I think it depends. It really depends. Um, I'm sorry, I just didn't answer your question at all.

No, I mean, I think you're— I think you did, you know, maybe, maybe, uh, covered, I don't know, a broader range of topics. But, you know, Sam, you and I— and Sam and I talk about this all the time, and Ryan, you and I have too. Like, we have what, Ryan? You and I have personally now in the last 10 months, which is wild if we go back and think about it, we've worked on 1, 2, 3, at least 3 projects together.

Yeah.

And which is not a bad clip. And obviously I hope for there to be several more, but, um, I think for, for 2 out of those 3, they're, they're in that, you know, I'm gonna call it $80 grand or less bucket, right? In some cases it's a lot less, right? Um, but, you know, going back to what you were saying before, like, if, if if it's built well in the beginning, and I mean several things by well, meaning if it's built in a cost-effective manner, if it's built, um, with a wonderful sensory deliverable, if it's built reasonably in whatever reasonably means, right? And then you stay, and this goes back to what Sam and I have talked about before, you know, hyper-focused on, you know, mile deep, inch wide of like, okay, I don't have a half a million dollars to go open the entire major metro that I live in.

Yeah.

But I'm gonna kick this shit out of the, you know, half-mile radius around my house until, you know, the people in this neighborhood know it, and then I'm gonna expand from there. That might be doable for $80 grand, $50 grand, for, you know, $100 grand. But if you try and go too big too fast, of course it's gonna fall on its ass, right? But it has to start with, with a reasonable foundation, and I think that's where you come in, right?

That, that, and, and then, you know, I think one thing that's really critical for, for founders, you know, new brand owners to, to evaluate is what does it look like to physically cash flow production, right? And understanding like, yes, there's my per unit cost, but how many units am I going to have to create in order to launch this thing? And there are more small-scale co-packers today than there were a decade There's more people that are able to deal with complexity in small volume co-packing as well, which is really cool. Because I think to some degree, you know, if you're doing something and you have protection from an intellectual property standpoint based on the formulation, that can be really important. Other products, maybe that doesn't matter so much, but, but I've seen that matter for a few brands that I've worked with for sure. Um, well, let's go. Oh, can I, can I physically get this thing made for what is in my budget? Can I do it twice, right? Am I going to be, you know, again, for a lot of first-time brand owners, you know, you're not getting credit terms for stuff, probably. So if you're paying for everything—

My thinking was just get the product out there, pick a market to build it, and then, then there's interest, and then we have proof of concept, and And then people like investors that we've been talking to, it's like, well, no, I've been on DTC, I'm in this market, I'm selling, I've gotten reorders, I got velocity in these 10 stores. Now I just need you to step up and have it. I believe if we do that, and I told the founder this, you've met Wayne, Adam, I said, look, let's just go for it, man. Let's just like, let's stop. Let's just shit or get off the pot. Let's go.

Yeah.

You know, and I mean, that's risky, but I'm like, you know what, we all put money into this thing, let's do it. Um, so I appreciate the insights, but I'm sure we'll talk more over the last couple minutes. What would you want to go around the— we'll go around the room here. Uh, Ryan, what would you like to leave the audience with? You know, what points would you like? I know we talked about how to contact you, but anything that we didn't cover that you want to leave them with?

I don't know, I feel like we covered a lot. There's nothing that immediately pops into my mind.

Okay.

I think, I think it's important that, that the, the whole process is thought through and not just what I do, right? But, but thinking through when you're gonna start a brand, trying to understand or learn as much as possible about how that actually happens, right? And being able to say where, hey, I, I I'm not the expert in this thing. I'm not the expert in this thing. Knowing where to defer to other people or hire, if it's subcontractors, there's more, you know, opportunities now for more affordable options there, which is really important for small companies to be successful. They can't be hiring consultancies for $25,000 a month, right? Everybody can probably agree on that.

Yeah.

You know, and, And so I think understanding when you, when you find somebody, whether it's me, like if somebody works with me, there's a good chance that they're going to meet Adam shortly thereafter, right? Because I know Adam, I trust his process. I know I've seen how he works and he's great with new, new brands, getting them set up and operationally healthy. So I think making sure people are, are really thinking about, you know, am I entering into a network to that's going to help serve me because of those connections. Like, this is a super small industry when it comes down to it, and there's a lot of people I know that have probably really good karma in terms of how they've operated and how they've approached this. And, um, you know, the other opportunity being, you know, you can develop lifelong friends, uh, and people you love working with in CPG. That's been true for me. So yeah, that's great.

Yeah. Adam? Yeah, I mean, I, I think I would echo everything Ryan said. I, I've been telling everybody lately, you know, they ask the question you asked, Sam, of what makes you want to keep doing this, and my answer has been, this was the party I never thought I'd get an invite to, and I'm not fucking leaving early. Um, I'm just not. Uh, you're gonna have to show me the door if you want me to get out. Um, uh, but I think, you know, more to the point, right, I'm gonna go back to something I said, and, you know, Ryan's been a wonderful illustration of it this morning, is I think a lot of, a lot of new founders think, for whatever reason, I'm not saying they're always wrong, but they think, you know, I want to make this beverage and I have to approach it in this way because they don't know any better, right? Meaning, you know, I have to use real lime juice and they don't know that there's other options, or I have to use, you know, uh, um, you know, not from concentrate juice, or I have to, you know, like juice is the easy one to pick on because there's so many different variations of it. But they get, they get themselves into holes because they start there on their own or whatever, not realizing that even if it's, you know, whether you contract Ryan to do your full formulations or you pay him for a few hours of his time to talk you through stuff and just walk you off the ledge and tell you there are other options available. Like, those conversations hold immense value, and I do it all the fucking time. I mean, right, I do it all the time. I'll pick his brain like, hey, is this the only way to do this? He's like, no. Okay, I'll pay you when I need a fuller answer, but I just needed to know that there's other ways to do this, right? And I think that's what I would encourage people to take away from it, is exactly what he said, is whatever you're doing, like, there's a bite-sized way to educate yourself on the fact that there's a bunch of different ways to do it that doesn't break the bank, that you can still pay people for their time and go from there and then build upon that relationship. Because if you start there, your odds for success are just highly increased. And I'll leave it at that.

Yeah, well, thank you. Thank you both. For me, you know, I said it on my post this morning, I started with taste, if you notice.

Yeah.

And I talked about story and value. So Formulation does freaking matter. So I want to emphasize that with everybody, because if you don't, if it doesn't taste good, if it's not, if it's not in the, if it's not in the, in this, they're not coming back. Jay, you definitely have to give the consumer what they want.

Yeah.

And I think that's part of the story, right? And I also think that's part of the value. And I really very much appreciate, Ryan, when you, you were actually, you talked about as a formulator talking about MSRP and working it backwards.

Yeah.

And then that would actually inform the ingredients that actually go in the package. So, I'm hoping that the founders and the dreamers out there that want to come up with a brand, they really just give this a real listen. I would go back and I'd listen to this podcast because what was shared today was a lot of good information for you to consider. And I would encourage you to reach out for Ryan, and then Ryan's going to actually connect you with Adam. And hopefully, once you guys get to test it and you're ready to build it, you know, give me a call and We'll help you get distribution and customers out there. But this was a great— I'm glad, Ron, thanks for your flexibility and joining us today. Yeah, I asked both of you to remain on the line because Adam is always slow load up to the thing. So if you leave, we can't get the podcast loaded. But thanks everybody. Thanks for joining us on this Saturday. And until next time, we'll talk soon.

Thanks everybody.

Thanks.