A podcast from Startup CPG - highlighting stories from founders working towards a better food system and industry insights from experts to give you a better chance at success.
Sean Lynch
You have to understand that the DSD world, especially if you go into one of the bigs, whether it's like Coke, Pepsi, KDP, Anheuser Busch course, you have to understand the markets that you're launching in. You also have to understand that these folks are as an emerging brand or a partner brand. You have to understand where their heads are at alignment with those teams. And so it's really critical that you understand any of their portfolio, their way of working, be that you have some momentum in line of sight, that you can actually create a market for them because you can go in there and they're going to ask a lot of these folks. You may think that the job's done once you sign an agreement with a DSD partner.
00:46
Sean Lynch
But if you don't have a strong presence within a market and you're aligned with that internal sales organization and team, it seems to be frustrating for them. But most importantly, it's gonna be frustrating for you because you're just gonna lose time.
01:02
Daniel Scharff
Hello, CPG ers. A wonderful welcome to all of you and I'm so excited for you to hear today from an absolute legend. It's Sean lynch. After a four year stint leading sales at liquid death. He recently joined half day ice t this February as president. I wanted you to hear all about the story behind the monstrous sales growth at liquid death and how he'll use those learnings from that direct store delivery model. Now at a half day, I especially wanted to hear how he's thinking about the role of his field sales team. This is actually a two part series that we're doing on field sales. The second part will drop later this week. Thanks a lot to our friends from simply Depot for sponsoring the series.
01:37
Daniel Scharff
They make the software that powers field sales teams to find customers, digitize orders and merchandising, and you can contact them@infoimplydepot.com or check the show notes for the spelling. Make sure to mention the startup CPG podcast. Enjoy. Welcome my friends, and a special welcome to Sean lynch. He's the president of half day ice tea. His sales credentials are world class. They include stints at Red Bull, Bywater, Califia farms and a lot more. And Sean is just a real dude. He's a friend of mine. I remember we initially bonded at just egg over our love of Nike Air Force one's. Sean, I've been hounding you for months to come and tell the liquid death sales story especially, and I'm so grateful to have you here.
02:21
Daniel Scharff
So I think I actually last saw you for coffee in San Diego back in October, but a lot has changed since then. Can you tell me about the new story here and what's going on at half day? I'm just seeing you guys everywhere.
02:31
Sean Lynch
Awesome. And, yeah, thanks, Daniel. Yeah. After catching up with you in San Diego, I was on kind of like a journey to find what was going to be next and spoke to probably between 25 and 30 brands and was fortunate, had some folks send me some samples a half day and I've always been super interested in gut health space. Obviously, it's a huge category, makes a lot of noise, and the future looks great for gut health. And so had a great opportunity to join Mike and Kiba over half day. Joined February 5.
02:58
Daniel Scharff
What's the story of the brand? Cause, I mean, I know I've seen them at UNFI shows, and it seemed like they were making good progress, but I never knew a lot about the brand, but, like, when did it start? And kind of what was the stage of it when you decided it was a good time for you to join?
03:12
Sean Lynch
Yeah, those guys have been at it. Mikey and K Bond have been building this brand for quite some time under a few other brand names. Has certainly taken its own path, most recently over the past few years. They really honed in on due to some, issues that came, some health issues that K Von had. They really were focused on gut health. And obviously with, you know, brands like Ollipop and Poppy, kind of like clearing the brush in terms of education around prebiotics, they semi pivoted into this better for you, gut health and reimagining what all your classic iced teas that are littered with 30 grams of sugar. North how they could kind of reimagine them in a healthy better for you.
03:48
Daniel Scharff
Awesome. Well, that definitely vibes with me. Anyone who's watching the YouTube can see I'm drinking a poppy right now. Maybe. I know. Well, yeah, I got to switch over. I know I can get it at air one. So I'll pop over today at lunch and grab a couple. Awesome. And can you just tell me a little bit more about the half day iced tea products? Like, what's the format? What are the flavors? All the good stuff.
04:07
Sean Lynch
Yeah. So right now, our core, we've got a core starting lineup of four skews. So we quite like. You're not looking to boil the ocean here. Stick with your traditional iced tea, classic iced tea flavor. So we have a lemon, peach, raspberry, and cream. Humidity.
04:20
Daniel Scharff
Sounds delicious. And so from my perspective, like, outside in, man, they're getting a big level up bringing in somebody like you. I mean, obviously there were a lot of brands pretty interested in you coming out from liquid death. I don't think anybody really needs to be told the story of what happened there during your tenure there. So obviously they're gearing up to go pretty big. What are your goals this year or the next couple of years? What's on your plate?
04:44
Sean Lynch
Yeah, I think first and foremost we are right now building a world class team. I think part of the reason for bringing me in, Mike and Kayvon, obviously first timers to the beverage game. And as were talking before the interview, you see so many brands just go in and blow their legs off and then just run out of capital. So I think the thinking behind it was bring somebody in who can help you avoid the landmines and quite frankly, hope you can extend your capital and the money you have without making kind of some mistakes, some classic mistakes and honest mistakes that you see so many people make. They can set you back a few years and take you off, you know, strategy or off trajectory. Yeah.
05:20
Sean Lynch
So I think for those reasons, I think Mike and Kevin were eager to get somebody in who has seen a lot of kind of different situations and could accelerate the growth. We are nationally one of the, you know, the first prebiotic iced tea to hit the markets, obviously with a great national launch with Whole Foods, Alvars and Safeway and Kroger. So we see a great need to, a build a world class team, but to speed, especially with all the momentum Bob and poppy, you know, have right now and get out there and get out of it as soon as possible without just making some boneheaded votes.
05:49
Daniel Scharff
Got it. Okay. Amazing. So, well, I know you're poised to just crush it there, especially with all the experience that you have and knowing where all those landmines are, having just lived that story. So maybe let's go back in time a bit to when you were just joining liquid death back in 2020. I remember seeing. So can you tell me what stage were they at when you joined as kind of maybe your first time taking on such a big role, probably on the, in the retail side?
06:14
Sean Lynch
Yeah, they had just wrapped up, I've been talking to Mike and junior for a little over a year, and they had just wrapped up their first year on Amazon where they were looking to establish proof of concept. And so that certainly when I heard from Mike and Mike mentioned the numbers that they were doing, it was certainly eye opening. And, and then we just started to engage again and they were doing just around 3 million. When, when I joined pre, all pre brick and mortar. That was all Amazon.
06:37
Daniel Scharff
That's amazing. So there basically was no actual sales structure in place at that point. Is that right?
06:43
Sean Lynch
There was. I think, you know, I think Mike's challenge was he had this brand that just didn't match the team that he was building. And so that was the first thing that he asked. It's just like, I need a sales team that matches the brand that I'm building, and it just didn't exist. Early days. And so that was an opportunity which was super exciting for me, is Mike gave a lot of Runway to go build this thing. And so I knew he assigned it and went out and dubbed and did it.
07:08
Daniel Scharff
So what did. What did you start doing exactly? Cause obviously the dream was big there. You could see that the product was resonating pretty well with people. There was a lot, probably a specific kind of consumer early adopter, just, like, latching on really strongly to the brand. So what was that kind of sales structure that you thought you needed to build, and how did you go about starting to do it?
07:26
Sean Lynch
Yeah, I think the first thing is we knew that look, the brand was, took all the brand design and psychology behind liquid death was all imagined and taking cues from beer, existing beer brands. So it was very like the brand was very intentionally built. And so they had started down the path of developing a national DSD network, which was the playbook and the playbook that Mike wanted to get into. And so we had to find a. I had to find somebody who knew DSD really well. But also you start to find some of the channels that we need to get into. You need to find experts. You need to also gut check, kind of from an investment perspective, how fast they want to run.
08:03
Sean Lynch
What's the kind of the temperature in the room in terms of, is everybody on the same gauge and speed was everything. And so we needed to build a team where a, we had real smart people that dealt with DSC and then a great retail team that had a dealt within c store world and then eventually putting together a world class resulting. But it really started with a strategy as well, because that also dictates where you need to be, what parts of the market you want to be in, what channels you want to be in, and then just hope everything can come together.
08:33
Sean Lynch
There's certainly a lot of, there are a lot of components that go into it, but, yeah, I would say just finding the experts in the DSD world and the retail world and channels that you want to go be great were real critical early days.
08:44
Daniel Scharff
Okay, so just to catch anyone up who isn't familiar, DSD meaning direct store delivery. So rather than going the route that a lot of brands, let's say starting a natural channel, we'll go with like Unfi or Khee, kind of delivering more centrally. Like DSDs typically deliver yet more directly and they'll actually get the product like on the shelf instead of delivering to the kind of back of the store. Right. So how do you initially then go and make sure you have all the right partners? Do you guys just already know who all of them are? They're all reaching out to you? Are you just tapping deep into your network, asking around, like, how do you actually find those partners?
09:16
Sean Lynch
It's a great question. I mean, I think you have to understand that, like the DSD world, especially if you go into one of the bigs, whether it's like Coke, Pepsi, KDP and Azerbush course, you have to understand the markets that you're launching in. You also have to understand that these folks are as a merging brand or a partner brand, you have to understand where their heads are at alignment with those teams. Those folks, take AB, for example. Those teams are classically trained to go to the beer aisle, not to the water aisle or the iced tea aisle. And so its really critical that you understand, a, their portfolio, their way of working. B, that you have some momentum in line of sight, that you can actually create a market for them because you can go in there and theyre going to ask a lot.
09:57
Sean Lynch
Theyre going to, you know, you need to understand what your assets are in terms of like, can you deploy field teams to support these DSD partners? A lot of these folks, you may think that the jobs done once you sign an agreement with a DSD partner, but if you don't have a strong presence within a market and you're aligned with that internal sales organization and team, it's going to be frustrating for them. But most importantly, it's going to be frustrating for you because you're just going to lose time. And without that focus and ability to properly manage a DST partner, I've seen it far too many times that it just year later, they're just sputtering and everybody's kind of chit chatting about things. They can't get it done. This brand sucks in execution.
10:33
Sean Lynch
So I think that getting out ahead of it, if you're lucky enough to kind of build it from the jump and really lay the DNA and the roadmap in there, that can help speed the process up and avoid some of the sudden delays or setbacks.
10:45
Daniel Scharff
So does that mean that you are aligned with one specific system like the AB, Anheuser Busch type distributors or the Kurg Doctor pepper distributors or you were kind of mixing and matching?
10:56
Sean Lynch
You kind of. You mix or match? I think certainly early days. I mean, I think that there's a couple ways you can scan it. I think if you have a strong enough brand and you haven't gone out to build that network yet, there certainly, I certainly would swing for certain conversations with some DSD folks. I think at the time, though, it's rare that you're probably going to get an audience where you can get on a truck that quickly in a national sense. I think there's a bit of test and learn, develop some key strategic markets and then build that, build the networks accordingly. The strategy internally at LD was we want the best ESD partners in each market and we knew we wanted to be our beer trucks.
11:30
Sean Lynch
So that somewhat narrows it down in terms of what brands and their teams in markets were great to work with. And that market is our network, excuse me, primarily was ad network, but we also piecemeal that in with some non alps in certain markets where they were the best option for us and had the best execution. So we didn't go out and really do that. Classic equity based DSD model for brands are growing quickly. We went out and we really just, we built it like one distributor at a time and one market at a time. And sometimes that's really challenging because you may have some good distribution in certain markets, but poor distribution, especially early days in other markets, and then you just build that momentum story.
12:10
Sean Lynch
We identified three strategic markets that we needed to be great in and then went out and were great in those markets with an absolutely killer team. And then the word just spread. We knew what were doing. So you could say, hey, please call or reference name a distributor if you want to see how we operate. And so were very fortunate that we had a team that went out there and just absolutely hammered it, and then we could utilize those partnerships that we had built in those markets to basically give credibility to the strategy, instead of just saying, hey, these guys are disjointed and dont know what theyre doing. Theyre like, hey, theyve got a strong team, they know how to execute a market and know how to run the playbook. And theyre aggressive.
12:46
Sean Lynch
And that was while it took almost two years to really finalize. It was the right thing to do without giving up any equity and probably slower than we wanted to. But I think in the end looking back at it was the right foot. We believed in ourselves instead of going in and giving away a lot of equity we just believed in the fact that we could go get it done.
13:02
Daniel Scharff
Thats super interesting. I think thats a really important point also about having references to give for the future distributors. Yeah that makes all the sense in the world. If you go to a bunch of distributors in other markets and you can say hey call up our other distributors theyll tell you whats up. That seems extremely strong. Okay. For somebody whos done it before, now youre at half day man youre going to call all the people youve been talking to you that you've known for a long time now who know you know that you execute well.
13:27
Daniel Scharff
But let's say you know your first time around or if you are someone who doesn't just already have all those pre existing contacts, I mean is it like literally googling in each market like hey who are the, what's the name of the Abi or KDP distributor in this market? Or you know like how could somebody without knowing the contacts do that?
13:43
Sean Lynch
I think it is a bit of that. I think there's enough people out there that can probably share some documents of best in class by market. But whats interesting, I say we built a DSC network at LD, were taken a bit of a different path and I think thats also interesting. Here at half day were looking at more of a broadline model and there are reasons that at LD were a brand that was based off of beer and the image and the look and feel of beer brands. We were water and iced tea. At half day we are prebiotic iced tea. It was hard enough getting buy in from a lot of these distributors just although we looked like beer to get into the water and iced tea gain, let alone a prebiotic kind of function.
14:21
Sean Lynch
So we are looking to build this network in unfinekey which weve been fortunate to do with some national distribution with our partners. And so its a bit different. I mean right now were building, were acting like a DST organization in the field with a different network with more broadline focus and then really looking at the strategic markets where we need to be in and then deploying almost like a tier two distributor in certain markets wherever we wont have to get into any long term exclusive agreements were able to be mobile. I think thats the biggest thing early days is that we want that flexibility to be mobile and to move from distributor to distributor, especially if youre an early stage brand that hasnt gone down this path before. Everybodys got a different perspective.
15:04
Sean Lynch
Hey, this distributor worked great for me, but not so great for Daniel. Quite honestly, it all comes down to execution. A brand is your brand working because the field team can only do so much if youre not getting pulled off the shelf. And then b, are you, a, is it working? B, are you getting the right channels of business where these distributors are going? And then at some point if you feel like, hey, weve got enough momentum here, weve built this thing, then you start to think about, okay, does this make sense to go talk to a strategic where we have a path to hypothetically 5000 million dollars, then start. Then its interesting. Youre bringing something to the table. You can also negotiate from a position of POW. Youre not going in with your tail between your legs and begging.
15:41
Sean Lynch
Youre going and saying, hey, listen, we're bringing material business to your business and let's partner the right way.
15:47
Daniel Scharff
So you mentioned building out a DSD network and the kind of people that it takes to do that. I think you talked about kind of DSD managers. You also talked about a retail team like field sales team. Can you explain a little bit more about who are all these people that you actually need to run that kind of, let's say DSD network and what do the people actually do in the market? What's the difference between a retail team and the field sales team? What are they doing all.
16:10
Sean Lynch
Yeah, so I think as it relates to Lv and I can probably do a side by side comparison. I think first and foremost you have to establish what your rattle market is, which will predominantly dictate how you're going to structure your team. If you're going down a DSD, anheuser, Bush or Coke or Pepsi, you certainly are going to have to put in place distributor managers. So what that looks like is you put in a traditionally, like we put in Mark Scherer, vice president, fuel sales distribution. So he oversaw all things execution and stores. How we showed up in terms of like with distributor partners, how we supported them, joint business planning, annual business planning. And then we divided and compared.
16:49
Sean Lynch
I mean we split the country up in year one into four basically, and put RSM regional sales managers that were essentially distributor managers that had field sales responsibility. So you would have RSM the northeast quadrant and then they would oversee anywhere from five to 15 field sales reps. And then so predominantly day to day, week to week, RSM will be overseeing execution, deploying KPI's making sure that all the KPI's for ireetailler are very clear to the field sales team, how were going to execute those, how were going to execute that and communicate to all the distributors? I mean, at the end of the day, we built a network that was almost 280 different distributors. So communication is critical. And you can imagine with so many of these big DSD partners, theyve got north of 30 brands in there.
17:40
Sean Lynch
So these brand managers are just getting peppered with communication all day. So making sure that youve got the right routine, the right cadence, the proper clear communication so that the entire system is well oiled and everybody is chasing the right things. Depending on what markets are you focused in and executing in the right retailers that may be on promo plan for that month and selling in ahead. So communication was everything but rsMs, day to day managing distributors and overseeing kind of championing the field team. And then fsMs, some people call them asms. Those are the folks that the frontline folks are in the stores building displays, getting secondary, getting cold placement for you, working directly with the distributor, field teams to see where we can go build big pile displays and just go better in store.
18:27
Daniel Scharff
Okay. So just to make sure I understand then. So you have like, you know, let's say higher level distributor manager people on kind of the central team and, you know, managing higher level stuff, getting started with distributors, kind of top level relationships with them. And then you have regional managers, rsms, you said, who are in specific areas, and they're not just tied to distributors, they're overseeing the field salespeople that you have, they're communicating with distributors, but also doing a lot of other stuff, communicating around KPI's and basically just responsible for your overall performance in that region.
18:57
Sean Lynch
Right. Performance in stores like de Essence and fsms are literally going into stores anywhere between ten and 20 stores a day, making sure that displays are built, promotional activities being represented. We're able to get secondary placements. Those are the soldiers in the stores.
19:10
Daniel Scharff
Okay. And so when it comes to those people who are in the stores, because as you build and have a lot of people like that, how do you actually manage them? How do you track what's happening? I mean, you know, it's like tough to verify exactly what happens in the stores beyond those beautiful pictures I see you post on LinkedIn of ridiculously awesome looking displays. But like really, how do you make sure that all of those people are doing the things that they need to do every day?
19:32
Sean Lynch
Yeah, I think the teams I've worked with have advertised it's basically a trust and verify. I also think that it depends on the channel that, you know, the route to market that you utilize. So currently we use at half day where our focus, our strategy is broadline distribution. So unfi, ke dpi and then some tier two, folks. What we're utilizing, you know, we utilize go Spotcheck, whether it's reps, ly, shelf space, go spot check, name it. You're basically just verifying that the work is being done. They're answering the right survey questions. We've got the right skus on shelf. Have we won? Yes or no? But it's not tied into the back end of the Unfi or the back end of KT or Dpi.
20:09
Sean Lynch
So it's basically a reporting tool so that we can analyze and that the RSNs can analyze weekly to make sure that their teams are doing the right thing, that they're selling in the right items that a, they're performing. And so that we can take these quote unquote surveys and then manage them weekly and stack rank them and scorecard everybody to make sure that everybody understands at the end of the day, weekly based on sales. And so making sure that you've got dashboards and let people know who the performers are, what's working, what's not. So that kind of like backwards or kind of like reporting the news is something that you're forced to use to go spot checks and the reps leads in the shell space.
20:44
Sean Lynch
Now, if you look at the, on the other side of it, on the DSD side, specifically in the beer world, there's a software system called vip, which is actually tied into most distributors nationally. So what's beautiful there is, you can start to see, hey, what's in store. You can start to see what's been shipped. So you can kind of, it's easier to validate and verify shipments that have. I'm going to send in a palette. We can go online and your team can see in their handhelds that, oh, listen, that pallet was shipped yesterday. I sold it in on Friday, it shipped Monday. So you really have that instant feedback. That's a much easier feedback loop in the DST world with that software because its connected to distribution. You can see inventory. So its like real time.
21:24
Sean Lynch
Youre actually able to, you can be smart and either load up or ship more product if you need to, but it just doesnt fall into that dark hole that trust and verify, which is more like on that broadline distribution world.
21:35
Daniel Scharff
Okay, so thats a lot on the verify part. And then what about the trust part? I remember talking to you early on in your time there about what kind of people you were hiring, and it seemed like you actually had a pretty unique approach to it, where maybe passion came first, passion for the brand and kind of some unique type of characters that you were really interested in bringing into the organization. Can you tell me anything more about that?
21:54
Sean Lynch
Yeah, I mean, I think for sure, I've always been a huge passion, especially within, like, the field team, the folks going into store. If you can find the people who are passionate and are mission driven, that to me, like, you can teach this game pretty much to anybody. So if they have the kind of wherewithal, the curiosity, the passion to go be great, the passion for the mission that liquid death was like, death, the plastic. Most people can get around that, right? They see the problem. They're bought in. They love the brand. Like a challenger brand, like us. So you gotta almost build that David and Goliath mindset where people are like, hey, we know who we're fighting. We know what we're about. We're dead focused on who we are. But also, I mean, it also depends on the brand. Look at liquid death.
22:34
Sean Lynch
We had, It was fun. You could go in and get those people who kind of had a chip on their shoulder, didn't come from your traditional background. And that was super fun. I mean, we just were looking for people who were super curious. And quite honestly, like, early days will still to the date. Like, it's a liquid death. It's a cult following internally. It's a cult following externally. And that is not hard to recreate. And so I don't know if it was one part luck, but, or one part being through the curse, but were also fortunate. We built this thing. We launched in Whole Foods literally the week that Covid was shut down.
23:05
Sean Lynch
And so we started finding your non traditional kind of players in this world, because if you had a role and your work was shutting down, you weren't about to leave that role for something especially called liquid death. Early days with COVID kind of running rampant. So it's like you had to find those. We had some folks who were bartenders who came because all the bars shut down. So they were looking to transition from a four in the afternoon to four in the morning role. Well, they couldn't even do it anymore to wake up, go be in sores at five. And so were fortunate to have some awesome players, early days that really built that kind of culture of curiosity and passion to win.
23:39
Sean Lynch
Also, we didn't need that somewhat naturally happened where it was like this competition internally is also very rare where people just wanted to, like to kill each other on the other side of the country. I mean, were jabbing on text, jabbing on slack, and it was just a beautiful thing to see that people would be like, I did 22 calls a day and this was like, cool. Im going to go do 27 calls a day. Wed parachute people into different markets and that would, whos getting up at 03:00 in the morning. It was a bit insane. But creating that culture and passion, early days and getting people, I think the most important thing is getting people bought into whatever your mission is, right.
24:14
Sean Lynch
You have to have that those people bought in because if theyre not invested in that mission or theyre not curious, its like youre, its hard to trust and verify people who you havent dont really live that with you. And I say it all the time. I was like, hold me accountable to the same kind of standards that I hold you accountable to in terms of just the passion, the drive, desire to win, the curiosity. And we also, this sounds a little harsh. Its also hire fast, fire fast. Its hard to make good decisions all the time. And, I certainly don't have the best track record, but my, but we had adapted and were very transparent to most of the team and just said, hey, listen, this isn't for everybody. Here are the expectations.
24:52
Sean Lynch
If we're not hitting these things, you know, if you're not hitting them, then we're going to have to move on. And I think there's so many brands that just don't lay it out like that and don't have these kind of like monthly check ins or it's like, hey, how are you doing and how are things progressing? And am I hitting the standards and making sure that they're the, you're clear and honest? I think with all those things, honest transparency, passion, desire to win, desire to align it within the mission, that all makes kind of that early stage culture and alignment so much easier and easy, much easier to build a team and then recruit.
25:23
Daniel Scharff
It probably also helps a lot when things are going well, right? Like when you have such good momentum and everyone's so excited about it. I bet it's a lot easier to get people bought in fully to the mission and go away and above and beyond, like you were saying.
25:35
Sean Lynch
Yeah, I mean, certainly success is a beautiful thing and momentum is a beautiful thing in early stages. First, we have six, eight months. We, we saw all the signs that, like, things were going pretty well. And you just start to add gas to the fire sort of thing. And we started to find, you know, each team, it takes a bit for teams, as you develop teams. I mean, we're going through it right now. Right. It's like, it takes time. I've been there for just over four months. It takes time for a team to kind of gel and to understand the way of working where you can bring these people up in the organization and then give them the autonomy to fly into a market and just start opening markets. We're a lean team.
26:08
Sean Lynch
We're a lean team back at LDS, but we knew early days that we had to, we started to figure out, like, who the leaders were within the organization pretty early and started to just empower them to go do their thing. And they, we had guardrails, but they were somewhat loose guardrails, which I think is right. We allowed them that kind of long leash to go do what they needed to do. But certainly momentum, certain successes, plays a huge role in a. How much fun the organization can have and obviously success of the brand.
26:33
Daniel Scharff
Yeah, I think fun is the right word. Cause it just, it looked like a good time on the outside. Like, I was so excited when I saw you moving over to liquid death. And then I remember seeing, I think, one of your posts about a launch at Publix, and it was just basically a bunch of people dancing. And maybe it was Walmart, I don't know.
26:48
Sean Lynch
Walmart.
26:48
Daniel Scharff
There's a bunch of people. Yes. Dancing in grim reaper costumes in front of Walmart. I'm like, that looks like a good time. Do you need somebody to go there and dance in one of those room Reaper costumes? I'm in. I'm free. I just want to do it. I mean, it just. Yeah, it just looked like fun. Like, you guys were obviously working very hard and having a lot of success, but also having fun while doing it. And success is fun, too.
27:07
Sean Lynch
Yeah, I think that's a look. I mean, those weren't field salespeople dancing in the grim Reaper office, but we certainly had pallets of product waiting for whoever went into stores, you know, waiting for them. I think that was the ballet. Right? It's like you. We were fortunate to have Mike at the helm of marketing, and that guy's alien from a different planet, which is in a great way and certainly makes our jobs much easier. Early days, it was a slog, but we hit that right stride where it was just like, you know, were getting stuff on the shelves and being great in store and also had, you know, a killer marketer run the company, so makes life a lot easier, too.
27:37
Daniel Scharff
So obviously, things went extremely well for you guys, but were there any things you would do differently if you could have rewound it back to the start? Like, yeah, maybe we should have gone into this market sooner or tried to find this kind of person a little bit faster or this kind of external help. Any lessons?
27:53
Sean Lynch
Yeah, I think so. Man, it's so hard. I mean, looking back on it, sure, if it's an option, probably just slowing down a little bit and getting, maybe delaying certain markets sometimes that, you know, and I don't know if that would have hurt or helped. It just felt like sometimes were getting out ahead of a little bit. And so as great as the marketing is, sometimes people just don't like that awareness. Like, you kind of live in your silo, you think everybody knows who you are, and then you go into a certain region of the country and, like, never heard of you guys. Right. And so that's the delicate dance of like, hey, how fast do investors want to push? Is this the right time to strike? Are you first to market it? There were a lot of considerations.
28:32
Sean Lynch
I think, looking back at it, no regrets. It felt like things just were there to go at all the right time. Not to sound too woo. It was just like we had the right people available at the right times and we just went flat out and here we are. So I don't know if there's any real regrets. I think the team was right. I think the strategy was right. Maybe just slow it down a little bit. Could have. Might have been helpful, but who's to say they're.
28:55
Daniel Scharff
Yeah, I mean, when you have a business that's doing well, that's well funded. Right? And, like, also just the opportunity is enormous and who knows when, like, how quickly other brands are going to come. I mean, it actually surprised me. It seemed like it took a lot longer for some of the legacy CPG companies to respond with something in cans, you know, interesting stuff. I feel like they still haven't really responded, actually. Did it seem, didn't you expect that they would actually come for your growth a lot sooner?
29:21
Sean Lynch
I thought for sure. I think they came and I think, in short, yes, I think they're out there. I think that it's just hard once you get out there first and we just happen to be out there enough ahead of the others. But quite frankly, I mean, that's getting the right brand and having a brand with soul and that connection to people is so critical because that is an extremely hard thing to recreate. And so Mike really had that. So we have a massive competitive advantage, or lD has that advantage in just terms of like people are part of this cult and it is you're either in or you're out. And if you're out, that's fine, we'll do us. And if you're in, that's also fine, we'll do us. They're certainly sold there for sure.
29:57
Daniel Scharff
It's tough if you're at a big CPG. I worked at Mars forever. And when you see innovation coming, I mean, the first thing is, the first reaction is to be defensive, like, oh no, our, like plastic is not as bad as they're saying. And here are the reasons that we're trying to be responsible about it. And like that probably is where more of their energy and being in denial about it for a while probably comes first versus the actual part where they get around to, okay, we're going to launch some stuff in cans because this is an emerging format of emerging pack format. It looks like people, the consumers really care about it. So, yeah, pretty interesting. And then another question I wanted to ask you is, you know, what do you see as the role of trade shows?
30:29
Daniel Scharff
Because I always saw you with liquid death showing up in force at the trade shows. You know, you've got like the liquid death coffin. You've just got product everywhere. Everybody's walking around drinking liquid death cans. If you're working a booth, you know, to go refill over there. So like, what trade shows were important to you early on? Which ones did you expand into and what do you think are the most relevant ones for a brand? Liquid death. And now for half day again, I.
30:52
Sean Lynch
Think at the time when were doing well, ill back up to liquid death. I think for us, Expo west was a big one because we knew coming out of COVID there hadnt been a lot of trade shows. We quite frankly needed to talk to retailers or at least show up and have those in person conversations. And so we utilize that. A one part is marketing. It was a big marketing play for us to get cans in hands at Expo west. But I think, Daniel, it really depends, man, on like where you are, what stage, what network you have, what retailers you have before you go make an investment like actual West. I mean, actual west had a bare minute, especially if you're a beverage and you're handing out either cans, I mean, you're in for 7500 grand if you're being like real.
31:32
Sean Lynch
Quite frankly, it's like I don't know that a lot of brands need to do it. I think were well capitalized. It was a moment in time. We wanted to get cans in hands, people to understand who were. So I think it all depends. Any advice would just be it's really brand to brand and kind of where you are within your lifecycle of your brand, I think is the most critical thing. And then Nax. I mean, for us, we needed to win. C store knacks was a must for us. So naps, Expo west and then nightclub and bar. Like we had a huge strategy for on premise, was to win and dominate, displace Fiji, displace avion at all the premium nightclubs and bars, naturally.
32:07
Sean Lynch
And so there were nightclub and bar, Expo west, which really was a catch all for most retail channels at that point or at this point.
32:14
Daniel Scharff
And then Max, for nightclub and bar, that's one big trade show like an expo, or it's a bunch of regional ones or different ones, kind of split.
32:21
Sean Lynch
There's a couple of. There's same. It's like regionals. There's a big one here in Carlsbad where a lot of the brands go to. Then there's a big one in New Orleans. It's bar nightclub, which is really where all the brands really show up. Houses down there. It's a big. Where all the bartenders kind of go down and see all the new brands. So, so there's some regional and there's some nationals. It just depends on who the audience is. For some of these, it was retail focused. For some of it was bartender focused. And so we wanted to go win the minds and hearts of bartenders because a lot of times they're making key decisions in a lot of these strategic venues that we wanted to get into.
32:55
Sean Lynch
And so we wanted to go win there and also partner like, were not only just watering nightclub and bar, but were an ingredient for vodka soda, vodka lime. So for those reasons, those are just some of the exports or trade shows. But again, comes down to where you are, how much money you have. I think for us, quite frankly, at half day, we decided not to do a booth at expo. We had a booth and then we opted not to do it. We had great retailer acceptance and quite frankly, we knew that we couldnt take on. We didnt strategy for this year was not to take on more. So there may be a time when Expo west is right for us, but this year just wasnt right for us. And quite frankly, we have $145,000 to go burn.
33:34
Sean Lynch
And I didnt think it was the right spend. Attended, sat on the sideline, took meetings in the halls.
33:39
Daniel Scharff
And I was a little sad because when I looked at the floor map early on, you were actually at the edge of the startup CPG section. We got a couple of rows there. I was like, oh, we're gonna party. It's gonna be great. But, yeah, that makes sense. I mean, obviously, yeah, the cost can add up, right? I mean, you can go bare bones and get, you know, a booth for eight grand or something. Or actually, we have half booths this year in the startup CPG section. But then, yeah, when you're talking about, okay, you gotta fly the whole team out there, you gotta start sending product. And I also always remember unloading at expo and just seeing the huge wooden crates of liquid death with the cool stamp on it and everything.
34:11
Daniel Scharff
So, I mean, you guys come with a lot of product, a lot of ice, a lot of people, obviously. I mean, you're just, you're growing, and when you're growing that fast, I mean, there are a lot of people you need to have there, so, I mean, that makes sense. And then you got to have a bigger booth to represent the brand that's growing as well. So it seems like it's such a quickly sliding scale from just the, like, bare bones entry package. Let's say you can get it done for like ten or 15k up to big booth, big product, big people. Yeah. Like getting up to, you know, almost to six figures.
34:38
Sean Lynch
Yeah, I mean, I think it was a moment in time. It was the right thing coming out of COVID a lot of energy, excitement coming back to expo. And also for us, I mean, in that during that time, like, look, demos were shut down, everything was shut down. So we just wanted to get cans at hands. Right. This was a, it was a marketing, like, obviously, the product, the box, very intentionally designed, probably over designed, right. With the beautiful art on the bottom. I mean, it's a beautiful build. And quite frankly, that was one of Mike's around building that brand. It was so critical to have a brand that was beautiful, to stand out and retail. Mission accomplished. So we wanted trial, we wanted excitement, energy. We're lifestyle brand too.
35:12
Sean Lynch
We also, we sold tons of merchandise in store, which was displayed on our booth so we could get that excitement around it. Yeah, it was fun, but not for kind of got to pick your times and moments to go do it, if it makes sense.
35:24
Daniel Scharff
Yeah, okay, perfect. Makes sense. So. And then now back to half day. So, you know, you've been at half day for I think four months now. What's your plan for the structure there? So you said you're going the broadliner approach, you're going unify Kehe getting like obviously natural channel, conventional channel. You know, it sits probably more in like functional beverage or better for you soda like areas with a tea set and. Yeah. What's your kind of like sales stack? Like do you use brokers, do you use merchandisers? What do you think you really need to do to just keep accelerating the growth for half day?
35:58
Sean Lynch
Yeah, so we use all of them. All the above, I think right now, as I mentioned earlier, we are, we're taking the DSD mindset of field team and applying that to the broadline, the UNFI and the key ease of the world, which coming from a DSD organization can be somewhat frustrating only because in the lag number of lag in distribution, the complications in getting orders to stores from whether that's in store buyers, team, merchandisers. So, so our approach and kind of how we're building this out is our own field sales team in the strategic markets where we know we have to go in. And so we will deploy doing the same thing. We cut the country into fours, we have rsms and then depending on strategic markets within each quadrant, we will deploy certain asms depending on that market. So we have asms.
36:45
Sean Lynch
We've got three asms in Southern California. Southern Cal is a must win market for us. And then we also layer on merchandising teams nationally in the must win channels that we need to win in. We need to win in natural. We're a natural first product, so we need to go be great natural. So we have merchandising support where they go in, they hit stores where maybe our team just can't hit in certain markets where we don't have field teams. So we use all of them. We use merchandisers, we use brokers on the retail facing side. And then we have our own team. And it's very detailed in terms of by market. We go in and we know we need to win in these stores. We deploy spreadsheets. We need you guys to go hit these stores.
37:25
Sean Lynch
Our team's going to go hit a segment stores. We need you to cover the b stores. Then maybe we'll focus on c. It's a ballet. We could not do it without merchandising and broker partners for sure, at least at this stage.
37:36
Daniel Scharff
Amazing. And obviously you guys have the benefit of some funding to be able to do all of that. And it sounds like a great setup for this stage of the business where it's time to hit the accelerator. So I guess I'm just kind of also curious. Let's say you're talking to a newer brand and let's say they have, I don't know, a million in funding or 3 million in funding, and they're really just trying to get going in a. A smart way. You mentioned that at liquid death, maybe you would have actually said going slower could have been good. Let's say they don't have all the pressure that some brands might face from external sources. What do you think is your ideal way for a very early brand to start growing?
38:12
Sean Lynch
I think you need to identify where your tribe lives. For us, for example, we need to own natural. And the hub of natural, quite frankly, is southern California, at least the west coast. So I think for smaller stage brands that may not have capital or the resources you need to really hone in on a certain retailer. So ill take SoCal, for example. Robert, if winning at Lassens and Eran and Jimbos, if that is your strategy of pure play natural, you have to win there before you start to overextend yourself. Ill tell you ive been on the sideline and had a pretty close up view to the Alipop and how Ben and David built that brand. That is a master class in terms of like, they weren't going to be pushed out ahead of their skis. I know they wanted to win.
38:53
Sean Lynch
You know, the Oakland or Bay area, they wanted to win LA. They had to before and they kept it there until it was just like that pent up kind of demand in other markets started to kind of get frothy and then they moved. And it was, they basically moved from west coast to east coast. And it was super methodical in building out that we must win natural. Belliver tribe have that tribe be your kind of like microphone and platform of just like amplifying the noise and then just run. When you saw the signals, it, okay, it's here. Then that's when you just pour gas on it. So it's a more economical way. But it's like you're also going to figure out if, like, your, whatever's in your mind in terms of how you think this brand is going to go.
39:31
Sean Lynch
You also, you know, you get to test and figure out like, hey, is this a natural first brand? Am I thinking about this the right way? If I can't prove it in what I think is my tribe, what's the point? Or you just have to regroup and kind of figure out where your tribe or your folks are, that can amplify you. But I think thats critical. I just see too many brands that get out ahead of their skis and then are just trying to backpedal or kind of right size the ship to get it right and youre burning cash there. But I also understand its like, look, this is 90% of brands who kind of get out there, right. Its like its rare that you have that opportunity to do everything perfectly.
40:05
Sean Lynch
But I think with what Ben and David went through with their first brand, Obisoda, they saw some things right, and they were able to, this was like their second goal of it, and they said, hey, we're not doing this. We're not going to be forced into that. So I think that's a, there's a big lesson in how that brand was built and the speed and the pace that they went at it. I think it was smart.
40:21
Daniel Scharff
I think that's really insightful for me, just thinking about the brands that I've been close to and worked with. And, I mean, it can be tough also, because you might say, like, hey, those are, that is where our tribe is. But those friggin retailers won't let me in the store, so I need to go grow somewhere. Let me go to this other place then. Oh, no. Okay. It's not as good for us. So, I mean, it totally makes sense. And I hope everybody has the fortune to be able to get distribution where they think their tribe is. What? So when you say winning at last, what does that mean tactically? Like, let's say you do find your tribe there and you get in there, like, what do you need to do it to win those kinds of stores there?
40:53
Daniel Scharff
It's not a huge chain, but it's an important one. And what are you talking about? Like, demos or doing promotions or getting displays? Like, how would you rank the top? Couple of things you need to do.
41:03
Sean Lynch
So I use Lawson's just as an example. But if you are a natural brand, and you certainly need to win at Lassens and Jimbo's and Bristol and lazy, you know, the classic and Erwin, all the classic Southern California natural food stores, but I think there's everything, I think that you need to get out there and you need to get secondary displays. Once you are on shelf, you need to use your brand as a billboard. And so eyeballs and trial and points of interruption and all the cliches, what it looks like is building out your best in class kind of execution. So having it available for cold, if you're, you know, a cold beverage, that's a no brainer. So being available on cold having, again, that billboard, that was our whole thing.
41:39
Sean Lynch
We wanted just to create in store billboards that was first and foremost and be available cold, that was like, check the box one. If we could get there, then at least people, the higher percentage of success of people pulling it out of the cobalt. Right. And also, it's just a free, I don't say free billboard, but a billboard in stores where people at least see the brand, where it's like, okay, every time I go shopping, oh, I keep seeing that. Or, yeah, I've heard liquid death. Where do I see them? Are they a beer? Are they an energy drink? I mean, I can't tell you how many times our team, we heard that, right? It's like, I know I've seen you in store.
42:07
Sean Lynch
And so eventually you just hope that repetition and then that billboard just lasts that impression to where you finally drive them to go purchase.
42:14
Daniel Scharff
And being available in cold is what every beverage brand wants, right? If they say if it's cold, it's sold. Cause, you know, you sit on this shelf and you definitely don't get the turns you get in the cold set. So being available in cold, what are the actual things you're doing to encourage that? It just means you're opening up a little bit more budget to talk to the buyer about it. Like, hey, if you can get us in that cold set, we'll do more displays or do this kind of support or what are you doing to make that happen? Happen?
42:37
Sean Lynch
Yeah, I think it all depends on the retailer. There are so many different kind of rules or guidelines. Some retailers strict planograms within cold. So you hoping you fight for, if thats the right strategy for you fight to get, thats your distribution or thats your home base, your planogram business award. But then if you get an ambient position and you have a retailer that is open to kind of has more of a flex space within that cold fault, you show up, you go throw cases for a retailer, help them help the store team. Look, the end of the day, if we want to get real, labor is a challenge. And so if you have a team within a market, go in.
43:13
Sean Lynch
And if your focus and goal is to get a secondary placement within cold, which as you know, Daniel is so valuable, then go in there, help them throw cases with another brand or help a merch for 1520 minutes and just be persistent. Show up every week. So many brands just will throw somebody in a store one time. They don't see them for three months. It's just like this job is pretty easy. If your folks show up and you get in stores when you say you're and do what you say you're going to do and show up when you say you're going to show up, I hate to say the storage yours, but you pretty much will.
43:42
Sean Lynch
You have earned the respect of most managers who see so many brands come and go, and once you burn them, once you're like, you just lose all credibility. So yeah, it's working within the. Sometimes outside of the rules and sometimes within the rules. And just showing up that more times than not, that's 90% of the battle. And just have a good team that understands a brand and can share some of the key bullet points and how it's going to make them money. You show up to that, you should be in pretty good shape.
44:06
Daniel Scharff
Amazing. Spoken by a true legend. There's a lot of wisdom in these answers. I think probably everybody can hear that. So, Sean, I just want to thank you again for joining us here. I mean, there's just so much you can learn from this really accelerated career and these brands that you've been working on. So I know you guys are going to crush it at half day taking all of those lessons. I'm really excited to watch all's progress and yeah, hopefully crack a cold one of a half day with you at the next trade show that I'll see you at. So what's do you guys have? What are your trade show plans this year then? Probably, I guess we'll see you at Expo west next year. Anything else?
44:40
Sean Lynch
TBD on Expo West. I think we've got some things. I think there are ways to go to show up and maybe we'll be in Anaheim, but maybe just in a different. A different way. All right, so TBD, I guess I'll leave it there. But we've got some great things coming up at half day. Super, super exciting, man. So appreciate your time. Dale. It's awesome.
44:56
Daniel Scharff
Incredible. All right, Sean, thank you so much. Bye, everyone. All right, everybody, thank you so much for listening. If you enjoyed the podcast today, it would really help us out if you can leave a five star review on Apple Podcasts or Spotify. I am Daniel Scharff. I'm the host and founder of startup CPG. Please feel free to reach out or add me on LinkedIn. If you're a potential sponsor that would like to appear on the podcast, please email partnershipstartupcpg.com and reminder to all of you out there we would love to have you join the community. You can sign up at our website startupcpg.com to learn about our webinars, events and Slack channel. If you enjoyed today's music, you can check out my band it's the super fantastics on Spotify Music.
45:40
Daniel Scharff
On behalf of the entire startup CPG team, thank you so much for listening and your support. See you next time.