112. Launching and Formulating Beverage Products

G&B Filling Station

Jordan Buckner: [00:00:00] Starting a beverage company is one of the toughest categories to launch in if you are a food and beverage product, because there are so many unique attributes and circumstances, not only from the product side, but also the business side. For today, I wanna jump into what it takes to launch a beverage brand and business and how you can be successful and avoid a lot of the pitfalls that brands go through.

So for this conversation, I've invited on Brian Post and Greg Kaminski of G&B Filling Station. They've also launched their own beverage brands and really our experts in this space in terms of what it takes to launch and get started. So Brian and Greg welcome. 

Brian Post: Thank you very much, Jordan. 

Jordan Buckner: Brian, I'd love for you to jump in, just give a quick overview of what G&B Filling Station is, to revise , some context and maybe why you started it.

Brian Post: Sure. So G&B Filling S tation. Is all under one roof company that enhances the lifecycle of a beverage brand. We [00:01:00] provide services that include formulation, ingredient sourcing contract manufacturing, and then warehousing and logistics of the client's materials. What we saw is as a startup, And a small beverage brand is, it's really hard.

As we all know, when you start a beverage brand, you have to find someone to formulate and they go the formulator and then they give you a commercialization of how to commercialize it. And then you have to find a co-man and you go find your co-man. And the co-man that we found when we were doing cruise beverage to do a low minimum quantity, happened to be outside Atlanta, Georgia.

So we had to co pack in. Georgia Guy gave us seven days to get 25,000 cans out of there. And then where do we store it? So we know there's a lot of issues as a small brand and a startup, and we wanted to put all those services under roof, so, I guess really what came down to is it was very stressful and Greg and I are in the business and we co-packing or getting your beverage out should be fun.

It should be after you have your formulation, you're going to a co-packer, you're getting your product and they can't end. It's [00:02:00] exciting time. It should be fun. It should be you know, great. I'm getting my product. We're gonna go out and sell it and to take off. But it's a very stressful time, so we wanted to bring the fun back into.

Developing a beverage for a startup low minimum market quantities. Yeah, 

Jordan Buckner: You know, it's interesting. I remember when I was first starting my business TeaSquares right? Like I could create those, there are energy bars. I could make 'em a commercial kitchen, a very small scale, you know, one bar at a time, and then start scaling that up.

I remember at the time I had taught to a friend who's launching a beverage brand, and I think her minimum order quantity was 20,000 units per flavor. Which meant that she immediately had to launch into multiple, you know, hundreds of stores just to move that volume, otherwise the product would go bad and expire and she would lose all of that upfront investment.

And so it create this rush into market, which is really challenging and ultimately ended up shutting down because it was just too expensive to sustain for an early stage brand. So I know like financing is one of those things. Were there some of the [00:03:00] other challenges that beverage brands in particular face.

Brian Post: I was gonna say as a startup, they don't understand the business. Our clients, I would say are 50 50. Some are brand new to the marketing, have zero idea of what it takes and takes a lot of handling and others have an idea of what may be involved.

But I think they underestimate. What it takes and what's involved to get a beverage to the market. They think it's easy. 

Greg Kaminski: Yeah. We're still working with a client that were seasoned veterans, if you will, on this team. There's eight different people and they all came from different areas of the beverage world.

Most of 'em came from the wine world, but they were creating an R t D that they wanted to put out onto the market. They were surprised that A, how long it took for the actual formulation to be completed. Not because it was a hard formulation to do, but just to get, you know, eight consensus together on saying, what is gonna be this final beverage ?

What is it gonna taste like? What's it gonna look like? But then they forgot about all the other important things like, you know, what is the can gonna look like? What is the can gonna say? What is the marketing part of it gonna be? What's your road to the market. how are you gonna get all [00:04:00] this product into a distributor and how are they gonna get into the stores?

You know? So there's a lot of thought process that goes into you know, grading a beverage. It just doesn't start with an idea. It has to have lots of legs to it to get it to actually be successful. And like you said, you know, with 20,000 cans as an order that she's gotta deal with your friend, how to deal with..

That's an everyday issue. That's actually a kind of a low number. Some of the MOQs out there were 50,000 cans, you know, that we were looking at. That's why we ended up in Georgia, from Chicago, because that was one of the places we could find that had a small enough M O Q to do our run. And when you're doing something out of state like that in, you know, places where you're not familiar with, with people you're not familiar with, we didn't really have an opportunity to work with these guys before we went down there.

They can, you don't know what you're getting into. And what's nice about our customers today is they start with us from the beginning. They come to us with an idea for a drink, we formulate with them, they taste with us, we taste with them. You know, we pinpoint what the final product's gonna be. And then from there, We start talking through the whole time about how are you gonna distribute it?

 What's your marketing strategy? What's all this [00:05:00] gonna be? We don't do a lot of the marketing end of it, or, doing the actual distribution part of it. But we know context. We have people that do all that and as their profession, and we guide them to those people that we know that they're gonna be successful with.

And so it helps them out a lot. Whereas most places just say, yeah, here's your cans. Go, you know, get 'em outta my warehouse. Oh, Brian said. 

Jordan Buckner: So Greg, share some of the trends that are happening in the beverage industry now because we've seen a little bit of a shift over the last couple of years. 

Greg Kaminski: Yeah, you know, it was interesting we started our CBD brand right when Covid began, and that was really a tough environment for anybody to start a brand.

The biggest issue was that stores were trying just to keep stuff on the shelves. So they weren't interested in bringing in anything new. You know, you would come to 'em with a new product that it we're having a hard enough time keeping, you know, Coke, Pepsi on the shelves we're not gonna start bringing in, you know, a CBD drink for instance.

So we struggled with that. A lot of RTDs to be created because people wanted stuff that they could still have at home, that they were experiencing it maybe before in a restaurant or a bar. So that opened up a lot of things that's where the whole seltzer world started up.

Right. [00:06:00] And became very popular. Those were trending so hard and so fast that now they're starting to decline. A lot of the big players are getting out of this alter business because they can see that it's starting to drop off, but they're looking for alternatives, and that's where the RTD

alcoholic beverage comes into play. People are still looking for that convenience at home of having a drink in a can, ready to go as long as it's a premium drink. Tastes great, tastes like what they were used to, and it's not just a seltzer type of drink. I think seltzers are great for what they were for, but today people are looking for something a little more complex outside of alcoholic beverage.

A lot of people are now looking for wellness drinks now. Wellness used to mean like it had a whole bunch of stuff going on in the can. It maybe had protein in there or fiber in there. It had all this stuff that it was doing things for you or said it was doing for you. People aren't necessarily looking for that today.

What they're looking for is a beverage they can pick up that tastes great, that may have a functionality to it, but a simple functionality like they want to pick up a little energy and not necessarily a Red Bull where it's coming from caffeine [00:07:00] or Warren, but they want something a little more interesting to it, a little more healthier to it..

But has like a slight functionality to it as well. Adaptogens are really big right now, putting into beverage. We have lots of customers coming to us today asking for adaptogens, no tropics, anything that's gonna help them throughout the day feel better, have a little energy, feel a little more roeful you know, feel a little more ergetic.

In the day, but not necessarily buzzed on caffeine and things that are helping them in their body. You know, like they're getting more oxygen to their blood or they're getting more vitamins into their system that they're missing out on because of diet or their eating habits or poor.

So it's not just the old fashioned workout drink, gimme a ton of protein and drink that tastes horrible. They want something that tastes great. Maybe it's nostalgic flavors, you know, that brings him a little comfort, a little more type of drink that brings him back home, for instance. So we're seeing a lot of those types of trends and then flavors are all really kind of zeroing in on ethnic kind of.

Backgrounds Asia is a big player right now. Heat, anything [00:08:00] that's got a little spice to it, a little kick to it is a big player. So we're seeing a lot of that going on. And then the old, you know, combination flavors are still pretty strong. Consumers are looking for stuff that, you know, maybe a little unique, but also has a familiar flavor to it.

So maybe it's a blueberry acai, maybe it's a you know, a cherry and Yuzu, which is like a citrus fruit from Japan. So, you know, they're still looking for, you know, unique things, but also comfort of home familiarity things like that.

Jordan Buckner: I think that's awesome. And I think that there is a rise in just like really unique but authentic flavors that come from a lot of areas.

I'm curious to know from an ingredient deck standpoint. How are brands where consumers even changing their preferences around what's actually in the can? Things like you know, natural flavors, artificial flavors, or not using unnamed natural flavors. I know there's been a little bit of a shift towards some consumers not wanting , the phrase natural flavors on the can or the bottle.

They wanna know exactly what's in there. Have you seen that [00:09:00] change? How formulation is playing?

Greg Kaminski: Yeah. You know, it's interesting because it's like you said, they don't want to just see natural flavors. They wanna see, like, if the product is called a certain name, they want to see that product have that named fruit in there, for instance.

Right. So, you know, if it's a Mandarin True juice strength that you're having, it has to have Mandarin flavor in there. You know, they wanna see that it's called out like that. If it has some kind of wellness effect to it, they want to know really, where's that's coming from?

You know, they don't want to hear that. It's just coming from, you know supplement. Proprietary ingredient things that people can put on cans these days to get away from, you know, really divulging what's in the can. They wanna know exactly what they're drinking. Consumers are reading labels today.

The millennials are really into knowing what they're putting into the body. They're the, our biggest segment of purchasers for any kind of new type of beverage coming out into the marketplace. You know, the older generation they're gonna stay true to what they're used to drinking, right?

 They're not really taking too many chances when it comes to. New beverage, but the millennials are really out there looking for these new types of beverages that [00:10:00] are you know, we don't call 'em healthy drinks. We kind of surround ourselves with the terms wellness drinks, or maybe even health Halo if you have to put a, you know, a healthy term to it.

Like I said before, it's just something where the functionality means something to that consumer and that's something that they've been looking for. And it's also interesting that they're looking for different drinks for different day parts. Whereas before you just have one beverage you're gonna drink, you know, in your favorite all day long.

They'll have certain favorite beverages that they have, maybe one in the morning, and now they've got their favorite beverage for the afternoon, and one that they can get nighttime. It's a sober curious part of the whole beverage industry has been turned upside down and people are really, really interested in finding out more solutions for that aspect of their life.

So the trends are all over the place today as different as they've ever been. And it's exciting for us as developers because we get to use lots of different tools and different things to make a unique beverage for them. But what they're looking.

Jordan Buckner: Yeah, I definitely love the areas of innovation and it sounds like there's a lot of opportunities for new brands and new entrants into [00:11:00] the market, so I think that's a really cool opportunity as well.

So Greg, but one thing I love about all those trends is there's a ton of opportunity , for founders and for brands to get started in this space. Brian, I'm curious, as you are seeing companies come in, how does a new beverage company go about testing their idea in market with some of the minimum or their quantity and financial hurdles that exist?

Brian Post: Yeah, what was important to us is to find the right partners that we could help a startup. And what's important is our minimum order quantity is 500 gallons, so I think pretty close comes to about 5,000 above ounce cans. We created a relationship with a company in Milwaukee. So we only do direct can printing, which we believe is gonna be a big game changer in the next couple years on rolling out beverages.

We get a turnaround from design to the can printed to deliver to us in five business days. So the price for one can to 10,000 [00:12:00] cans is. Pretty minimal. We actually have one client where it came out to 8 cents cheaper from doing a sleeve cam to going to this direct can printing. So that has allowed us to help the startup brands to do a test market or A soft product rollout, I would say for under $20,000.

Pretty easily. We were working with a client now that we have out of LA who was rolling out in Miami. And we did 10,000 cans for them Was quick, easy, cost, effective, and a way for them to test the market, put something into the market, get consumer feedback quickly. What's nice is you can change the can.

You're not stuck ordering a hundred thousand sleeve cans. You've ordered 10,000 printed cans. You wanna change something on the can based on consumer feedback. You don't have another 90,000 cans are sitting on that now are wasted cans. You can make quick changes, you can change the artwork, you can go back on consumer feedback.

We do a lot of [00:13:00] testing with our clients. Greg is great at sourcing ingredients. We have a lot of great partners who help us also make an initial either test run or initial rollout, more cost effective. We try to educate 'em. We have partners also in insurance in marketing.

Why we don't handle on that, we give them a data deck or data vault that they can then have the resources also to hopefully help them reduce their cost, whether it's marketing, insurance branding but we really try to keep that cost down as much as possible. We believe that eventually no one should ever have to run a hundred thousand cans if we're doing.

Business. Right. We're just on a schedule with the client. We're always providing fresh product. So it could be 25,000 cans every month. We can get the printed cans turned around really quickly. So we're helping reduce their cost or their cash outlay upfront, which as anyone who's done a beverage brand knows, it could be quite expensive.

Your initial run, especially when you gotta run 50,000 cans. Get 'em out to market and there's a good possibility you're not gonna be paid for at least 60 days. And if it sells great and you [00:14:00] don't get paid for 60 days, you're doing your next run right away with laying out the cash again. So our whole business model is to keep the stress, keep the cost down, and let the brand focus on what's Important.

Getting it into the retail, pushing through velocity and getting the consumer happy with their product. That's what they should really be focused on. They shouldn't be focused on all the little steps that we can help them alleviate. 

Greg Kaminski: Yeah. One of the things we saw right up front when we were doing our cruise beverage was lead times, not just for getting cans you know, blank cans or getting, say, sleeves made, but ingredients.

The lead time for ingredients went from, you know, you used to be able to get flavors out of a flavor house in 10 days. It's now five weeks to get a flavor from a flavor house. So what we like to do is we source all the ingredients for our customers. We actually are the agent to buy the ingredients for the customers.

We inventory their ingredients. So what happens is the customer can then set up with us saying, you know, we wanna keep a minimum quantity of say, you know, 10,000 cans in inventory at G&B at all times. So [00:15:00] when their level gets low, we're automatically now having flavors. Brought in without them even having to worry about it, that they're all getting there.

So then, they pick up the phone and say, okay, we're ready. We're already knowing that they're gonna need another 10,000, 20,000 cans made up. Right. So it helps them. Like Brian said, focus on their business of getting the product into the stores because that should be the hardest part about getting a beverage in there because that's where you have to talk to customers and talk to your distributors and, get all that going on.

Even once you have certain channels set up, it's only gonna be for one region and eventually you're gonna want to go to another region and that's gonna take new distributors and new time new efforts. So it gives the customer time to really focus on that stuff and let us do. All the, you know, the background work for them, making sure that their product is made correctly, making sure they've got it in stock and that we can get it, you know, sent out to wherever they need it to go, whenever they're ready for it.

Yeah,

Jordan Buckner: That was very helpful. Greg. One thing as well is there's a common phrase that's going around the lot founders say is, I don't know what I don't know. Right? When you're getting into doing something new, there's a lot of unknowns that you just have no [00:16:00] idea to think about. So what are some of the biggest mistakes you see founders make when they're formulating their beverage product?

Greg Kaminski: You know, a lot of times people, you know, come to us with a physical like recipe that's written down on a piece of paper that they make in their kitchen for their friends, and they think it's great and it's, you know, let's put this in a can. Well, it's not so simple. It's not like you can just go and take household common ingredients and.

Buy them in bulk and put 'em into a can and call it a day. Things have to be taken care of that, you know, if it's a fresh juice, it may need some preservation to it whether it's heat preservation or some type of chemical or natural preservation. If it's a color, is the color gonna really withhold, you know, it's lifelong span in a can of 12 months.

You know, that's usually your lifespan that you want to keep a product in a can. You know, if it's a high acid. Environment that the drink is in, it bread will not stay for, you know, 12 months in a can unless it's treated properly. And so there's a lot of things that a customer doesn't realize.

Happens to a beverage once it leaves their kitchen. Right. So that's our, our biggest thing is education and, you know, [00:17:00] teaching and making them aware of, you know, what happens to that beverage to make it a commercialized product. And we don't try to make it seem like it's too scientific for them or it's too heavy for them to understand, you know, we try to make it so that they understand just why we do those kinds of things.

And that's why Brian was saying it's important that they come to us, we work with them. They actually sit down with. They, you know, see things getting made. So they have a broader understanding. Like Brian said earlier, I've been in the beverage industry for a long time. I was in, you know the flavor world for 10 years, developing products for big customers you know, top 10 customers.

And even with that background, going into a co-manufacturers, the things that happen that they. You'd have to have, you know, a set of 10 eyes watching everything that's going on because they do stuff so rapidly and that you're not aware of that things happen I caught product that was going through a flash pasteurizer or a tunnel pasteurizer.

I'm like, why are there 350 cans of my product going through a tunnel pasteurizer right now? This isn't supposed to be a pasteurized drink. And I was standing there and the entire time watching what's happening. It just happened. Someone opened up some [00:18:00] gate on the line and then they started feeding into this tunnel without anybody even realizing it was going down the tunnel and getting passed away.

So stuff like that happens. And if you're not, you know, savvy with the beverage business and most of our customers aren't that, you know, savvy when it comes to that, a lot of 'em are coming from different backgrounds. You're not gonna know what's going on. You may not even be aware that now this product got just got pasteurized and you have it in a can and you're trying to sell it to consumers and it tastes like, you know, not what it was supposed to be.

You know, so, we try to take all those steps out of the way of the customer and make it simple for them. But also, like Brian said, make it fun. It has to be a fun, a fun thing to do this because it is a lot of fun. Brian and I have a ton of fun doing it every day, and we want our customers to have as much fun too.

Jordan Buckner: Yeah. And what I love about, about the two of you is that you have a brand that you ain't gotten into market and understand a lot of mistakes that come from that and have dealt with them. And so you also know from the larger view, like what it takes to like make and and manufacturer beverage because the mistakes that happen, especially in beverage, are [00:19:00] very expensive and can put you outta business before you even get started.

And so it's important to not just learn everything on the fly for this. So, 

Greg Kaminski: Yeah, we opened up a truck one day of a delivery coming in and it had a ton of, we were getting cans sent back that didn't get filled. So this was inventory that we were counting on using empty cans for our next run. And it's expensive.

They were sleeved already. You know, we're talking 50 cents of can that we have sitting on this truck. And there was probably, what, 10,000 cans? Brian, maybe even more. All of the cans in the truck were now flattened and laying inside the truck. They've all been crushed. The driver of the truck had to pick up a snowmobile or a jet ski that had gotten loose inside the truck. He was delivering it to some other customer, gotten loose inside the truck, and while he was driving from Georgia to here, the jet skis bumping all over the entire back of the truck, crushing all of our cans. He had no idea what was going on.

He didn't look, I don't know why, but he opens up the truck and all the cans come tumbling out. And Brian and I are just looking at each other going, what is going on? I mean, that was like one of a [00:20:00] 20 different mistakes that happened to pitch for that one run. So that happens, you know, that kind of stuff happens all the time.

 And we know what to do to prevent that. You know, a don't put jet skis on a truck with all your empty cans when you're shipping it from Georgia to Chicago. It's not a good. 

Jordan Buckner: Yeah. Something that you would never think that you have to let the trucking company know, but Right. You learned the expensive way.

Brian Post: Yeah. I think it's also important that what clients need to know that, and what's nice about doing a low minimum or quantity is if something goes wrong, you're not just out your cans, you're out, your ingredients, you know, you can fight the co-man, but you probably paid them a deposit, the 50% of what the co-man run is gonna be.

So if it's a big run and something does go wrong, you the brand and we, this happened to us and I know our insurance company would not cover it. We were out not only all the ingredients, but we are out. Also, the lost revenue of. Product going to a retailer, which is what it was, you know, we did the run for that's huge.

So, yeah. So it is nice to [00:21:00] be able to do a smaller run, make sure everything goes right, make sure it tastes the way everyone anticipates it's gonna taste after the product run. But it's an expensive mistake that no one wants to take responsibility for. Yeah. And as a brand, you gotta eat it most likely, which mm-hmm.

Is not in your budget. 

Greg Kaminski: Yeah. And it's a new brand. You're not necessarily gonna claim it as an insurance claim either, because the last thing you wanna do is have your rates go up on your first, you know, run of product. Now you're already putting a claim in and you're like, oh my gosh, this is gonna be a bad start to this.

You know? So all that stuff can be avoided. It definitely can be, Not happening. Whenever you're doing a run, it doesn't have to ever happen when you're doing runs. Can things be perfect every time? No. But if you're working with experts in the field, they know how to adjust and correct those problems as they're going on and fix them.

And if you're working with people that know what they're doing, you don't have to argue with them on a carbonation level and say, can you test it for me? Tell me what it is. And they say, no, we don't know how to test the beverage. You know, even though they're canning a beverage, how do they not know how to test a carbonation level and a beverage that they're carbonating, you know, go [00:22:00] figure.

But it happens every day. People see this every day. Even with the large comans, you know, you hear that all the time. So we try to alleviate all of those issues with customers. And like you said, it's just from experience and having it happen to us and hearing stories about. 

Jordan Buckner: Brian, Greg, thanks so much for being on the show today and bringing some light to these issues that happen in the beverage space, but also the opportunity that exists to people who are looking to get started.

Brian Post: Great. Thanks for having us, Jordan. 

Greg Kaminski: Yeah, nice meeting on.