WAIĀKEA HAWAIIAN VOLCANIC BEVERAGES

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Speaker C: Welcome to Contender Cast, a global leadership and consumer industries entrepreneurship podcast centered on shining a light on bright ideas. And now here's your host, Justin Hahnemann.

Speaker E: Thanks for listening, thanks for tuning in, thanks for downloading, thanks for subscribing, following us. Justin Hahnemann, Contender Cast for shining a light on, um, bright ideas today in the water space. I mean, I was excited. Before the podcast, I'd done my homework on the brand and whatnot. And then I started reading some of the reviews on the product and I'm like, oh my God, I can't even wait to jump in. We're gonna be talking about Waiakea, Hawaiian volcanic water. You can check it out on Amazon and so many other places. And on the podcast today is Ryan Emmons. So great to have you with us, man. I can't even wait to dive in.

Speaker F: Thanks for having me, man. Appreciate you.

Speaker E: So cool that you're here. I appreciate you making time on a Friday. Uh, great to connect with you and I can't wait to talk about your brand and your background. And that's where we'll so, um, share with our audience a little about you and how you got into the industry.

Speaker F: Yeah, um, so we started, um, I mean, we started Waiakea about 14 years ago, we just had our 14 year anniversary. So congrats. Overnight success.

Speaker E: 14 years everybody. Right. Not one year.

Speaker F: You know, I think people need to realize that, you know, it might take some time. Um, but we, you know, we built out a really good business. You know, over 50,000 points of distribution, a team, over 100 people, um, you know, doing around $70 million. So we, um, you know, we're, we're feeling very grateful and lucky to be here. But it took obviously a lot of effort and uh, and grit and uh, tenacity because it's a really tough industry.

Speaker E: No doubt.

Speaker F: But if you have staying power and you're here for 14 years, then, you know, typically that means that, you know, um, you're doing something right. So, um, but you know, I, I originally started kind of working on the concept. I went to usc. I was in the entrepreneur program in the Marshall School of Business. Um, my background on my mom's side, um, grew up basically splitting my time between Hawaii and Santa Barbara, my whole life, um, uh, several generations in Hawaii, Um, all my, uh, you know, basically a mixed family. Uh, and um, for me specifically, unfortunately, very, uh, very howly. Uh, but, but yeah, grew up and was really a part of the culture and um, you know, ultimately

Speaker D: kind, um,

Speaker F: of saw an opportunity in beverage. Uh, I was a hydrology minor and there's, there's kind of a social impact program in the entrepreneur program at usc. I was really involved in a lot of clean water NGOs um, in high school, um, and kind of wanted to put everything together, uh, into a brand that basically was synonymous, uh, with a lot of uh, Hawaiian values as well. Um, and so that's what we did. So we developed it with my co founder for, basically did feasibility analysis and um, looked at the space for about three years and then felt like, okay, uh, we're going to go all in. And uh, we had a rough last year. Graduated a year early, uh, to launch it and never really looked back.

Speaker E: Wow. Amazing. I love these stories. This is why I love doing this podcast. Um, so many questions. Okay, so we'll rewind the clock. So back 14 years. Why the water category? Because there were some other players in that space. It's obviously evolved quite a bit since then. But what was it about the category you saw as the opportunity and how were you going to kind of, what was your unique play?

Speaker F: Yeah, so at the time there was this like emerging, um, thing called the Lojas model that was happening internationally, uh, which is lifestyles of health and sustainability. So we basically predominantly, you had in the premium water category you basically had um, you know, the regional brands um, that are like high volume, low cost, like purified water, like Niagara, um, and then you had, for the premium single source waters, um, they were all just really differentiated based on source and none of them were addressing kind of environmental concerns, social impact trends, community, um, development, et cetera. But at the same time simultaneously you had um, again you had basically bottled water um, is like demonized on behalf of all of beverage, uh, or some of, for some of the environmental concerns. But every beverage has the same issues, right? Um, every beverage is still, you know, 95 to 99% water. Um, so when it comes to packaging, shipping, sourcing, right. These are, these are industry wide issues and they're also the same issues really for CPG at large. Sure. But at the time it didn't seem like anyone was really addressing like in if you're going to be in the bottled water category you have to go above and beyond, um, to address some of those concerns. Um, because of just the nature of again it's very easy to point the finger and no one was really doing shit. There's a lot of greenwashing. Um, and ultimately at the time Smart Water was obviously rising really fast as the first kind of branding really marketing its functionality. Uh, now we know that functionality is largely BS because they now have the tagline of electrolytes added for taste. But at the time we had vitamin water, Smart water and so you had this other movement kind of focused on functionality. So the thesis behind the brand was let's really kind of address some of these functional talking points. We have this incredible water, right? Um, but because of that volcanic filtration, it's enriched with all these trace minerals, it's naturally alkaline, uh, it's electrolyte rich. Um, so let's really kind of bring those forward to address that kind of functional trend. But at the same time can we also be the first to kind of draw a line in the sand uh, with some commitments in terms of environmental stewardship. And so one of those was our commitment to 100% post, uh, consumer recycled materials for all of our packaging. So we were the first one in the US to commercialize that 14 years ago. And so we've kind of ever since, um, we've kind of tried to up the ante with certain initiatives on the way and then hopefully we have the industry follow. And so since then there's been about a 20% plus increase in recycled content adoption and beverage. So we'd like to think that we played a small part in that.

Speaker E: Absolutely.

Speaker F: M. And then we also, um, you know, we. The next kind of launch that we have been working on for the last five years is we just launched the first, um, algae based, uh, inks, uh, for all of our packaging that are carbon negative that we were the first to commercialize in the world. There's a number of other things that we've done until then, but that was kind of the thesis is, hey, bottled water and beverage is not going to go away anytime soon. How can we basically be a catalyst for change? Um, this is cliche, but better to light a candle than curse the darkness. And throughout all of that it's also okay. Simultaneously we got to make sure we're bringing our community with us. Right?

Speaker E: Absolutely.

Speaker F: Hilo like benefiting people in Hawaii like that. That was the whole idea. We launched our award winning Kokua initiative which we still have a whole team that's dedicated to impact, um, affected almost 200,000 people last year through that program. So that this is the core of the brand and it really has stayed consistent basically over the last 14 years.

Speaker E: Amazing. Um, okay, so when you started, did you know what volcanic filtration was? Or was that something you had to sort through and go, yeah, I think we have something here.

Speaker C: It's unique.

Speaker E: Like what again, early days, like what did that look like?

Speaker F: Yeah, so I mean you have sources that are, you know, in areas that have volcanic rock.

Speaker C: Right.

Speaker F: Um, but none of them are really positioned, have really, we're really differentiating and really pushing, um, you know, volcanic water. Um, and so that's, you know, we wanted to kind of set our, set ourselves, you know, apart in that way. But one of the ones that you might have been, might be familiar with that, uh, you know, is probably, until us was probably the most famous internationally volcanic water was Volvik, uh, in France.

Speaker E: Sure.

Speaker F: Um, but ultimately they didn't really do the best job and again in really presenting the functionality attributes that come with being filtered and being percolating and basically the water percolating through the volcanic rock, the naturally occurring silica, all of the other, um, the rest of the mineral profile. And so that's, you know, we kind of wanted to bring that more to the surface. Um, when we first launched. Um, yeah, got it.

Speaker E: And so, okay, early days, you know, so, you know, you're thinking about the category. You see this opportunity for growth and differentiation. Did you focus on a certain market? Did you go direct to consumer? Like what was the early days in terms of entrance and how did you Know, you're starting to get uptick in terms of, you know, trial and purchase behavior and whatnot.

Speaker F: Yeah. So we had, we had a truck, um, and a tiny facility. Uh, it was really like a shack with us. Well, with our first, with our well, source, um, in Hilo.

Speaker E: That's crazy. I love hearing that.

Speaker F: But our first commercial market was like, in terms of like a bigger market was la, uh, um, and we, um, we basically, we had U Hauls and we were self distributing.

Speaker E: Like that's crazy. I love it. Like case back water. Like 12, 12 packs, 24 packs. What does that look like?

Speaker F: But obviously being sold. Um, we had, you know, we had this, um, I went to usc. So one of our accounts was, was uh, a liquor store called Kalmar in L. A. Uh, which is like on us basically on USC's campus. We had a couple accounts downtown and um, you know, we really wanted to focus on. On SoCal as our primary kind of launching market. Um, and, and, and the goal was that we could scale and eventually, uh, when we proved out that the product could sell, that we could build out a larger facility at the Source in Hilo. Uh, but, um, and we, and that's basically what we did. The whole thing was just like we scaled, got enough accounts, make enough cases, move, distribute and we, we were just like on. We built out a really good account, you know, between Hilo and LA of you know, about 100 accounts and we were able to then get our first distributors and then attending, you know, all the trade shows and. Yeah. Um, and that allowed us to kind of continue to onboard more customers. And you know, again it's. You're just, you're trying to kind of stay pretty hyper focused at first, but the goal was just getting it out there because ultimately we had a really good kind of in that first hundred accounts we could see, hey, if we're able to get our, you know, get Waiakea as a brand next to Evian, you know. Sure, etc. We know that we can compete with these brands. Um, and so I think that was kind of. That gave us a lot of confidence in knowing if we can just to build some accounts. Um, and if we're given the chance for an equal playing field. Right, right. Because we don't have that many resources, we know that the brand can do the rest.

Speaker E: Sure, no doubt. Wow. Amazing. Um, okay, so fast forward so you're getting off the ground. At what point did you know, okay, this is real and we can actually make money? You know what I mean? Like, when did it go from. I mean, like, literally, you're doing the distribution and whatnot. I mean, it had to be expensive. When did it go? Like, okay, I think we have a business here that we can scale.

Speaker F: Um, I think. I think our biggest kind of like, pivot, to be honest, was we were just like. So everyone told us that we had to build a brand in natural and specialty.

Speaker E: Okay.

Speaker F: Had to. We had to build a brand in Whole Foods. Um, and it was. It was bankrupting us. Like, we were. It was so such an expensive channel. Like, it was just ruthless. Every and everyone else is throwing money at the wall. Right, Right. So to be honest, I feel like our big opportunity was typically, uh, the C store channel. You know, convenience stores are like the last, um, foray for a brand, uh, as like a proving ground. It's typically one of the most difficult channels to penetrate and still make while still making sure that you're having velocities, uh, that can compete with the top brands.

Speaker D: Okay.

Speaker F: And we, um, you know, I was. We were kind of looking at this and spending a lot of. We love. We have so many great mom and pop customers.

Speaker E: Absolutely.

Speaker F: And like, specialty food stores, and they're awesome. But, you know, early on we were spending the same amount of time on some of those, you know, some of those mom and pops in the natural channel as we were. You know, we then realized, wait, we can get a really good premium convenience store channel chain that has 200 stores, totally spend the same amount of time and not have the same distribution fees, uh, with Unifi Kahi etc. So we, you know, we basically took a shot and tried to go after the number, you know, the number one premium C store in the country which has a lot of loyalty back east, which is called Wawa.

Speaker E: Oh, yeah, very familiar.

Speaker F: And, uh, we've been in Wawa as one of their top premium waters and top beverage items for now, um, about over 10 years.

Speaker E: Amazing.

Speaker F: They gave us a shot. They gave us a trial. We blew it out of the water. And, um, um, that really kind of changed the business where we realized we don't have to be channel dependent. We should really pursue. We're ready to pursue an Omni channel strategy. You know, we kind of need to dictate our future based on, you know, making sure that we can survive off the right margin. Right. Uh, versus just hoping and praying that one day, um, you know, our scale and natural would unlock something. Um, so, yeah, uh, that. That was, I would say, our kind of our biggest moment, our biggest unlock in the early days of Realizing we have something, um, and it really kind of changed everything.

Speaker E: Wow. Amazing. And then fast forward to today. I mean lots of places you can buy your product. And then as I was saying when we kicked off, I was so blown away. Like on Amazon, your 24 pack is um, I mean it's overall pick positive. And then like the reviews, like more than almost 12,000 reviews. It's so hard to get reviews anywhere. I mean just, I uh, mean I'm so impressed. Um, what has worked and maybe you shared some things that have been working but like anything hasn't worked. A couple things that you thought would be a total hit and there was a total miss over the last couple of years.

Speaker F: Yeah, I mean we had candidly, uh, like one of the reasons why I think we have been successful is that we didn't have that many new products. We kind of just focused into our

Speaker E: core, narrow the focus.

Speaker F: Yeah, I wish we had like launched you know, multi packs a lot like way longer, like a long time ago, um, six packs, et cetera. Because a lot in a lot of those other channels, like grocery, like the multi packs are where you're you know, driving a lot of volume. But we just started penetrating grocery in a significant way the last like couple years. Um, but ultimately, you know, some, some products that I didn't quite land like I was hoping, uh, because the, the margin is a little bit tough. Uh, we had launched a uh, bag in box coffee items.

Speaker E: Oh, uh, interesting.

Speaker F: We have some coffees, uh, some single source, uh, beans and then we have our ready to drink coffee, our lattes.

Speaker E: Okay.

Speaker F: And we just couldn't get the cost to work so.

Speaker E: Got it.

Speaker F: It was a great like you know, in theory.

Speaker C: Right.

Speaker F: It was like uh, you know, basically cold brew coffee, you know, in a, in a box. You know that was basically a 5 and a 10 liter. Um, but it just, we couldn't get it to work. So we had it for a year. Um, that and then trying to think of what else. We just decided to hold off on a lot of innovation more so than actually launch and then cancel, which I think is good.

Speaker C: Right.

Speaker F: Because we're not necessarily wasting time. But the way that we kind of look at innovation is we always want to make sure we're doing small runs and we're basically proving it out before we're actually ultimately scaling it into our primary facility. So we'll like test with co packers and then basically incubate. We'll do a trial with some of our best customers and if it doesn't work, you know, we're not, we're not necessarily, you know, in a bad, in a bad place in terms of inventory, et cetera. Uh, allows us to be more flexible and really kind of have this like MVP minimum viable product. Um, but we got some exciting SKUs that are in the pipeline that I'm pretty pumped for that I feel good about that are going to be released in the next couple of months. So those goes. But maybe they won't uh, do as well. We think they will and that's fine. Again, we're doing lower volume runs to test them out.

Speaker E: That's so cool. Yeah, I love your packaging by the way. Great colors and whatnot. Anyway, very, very eye catching. Um, how did you decide on the name Waiakea?

Speaker F: Um, so it's an ancient subdivision, uh, in um, Hilo. And that's actually um, the translation more or less is broad waters, um, which has to do with the sustainability of the system. Um, it rains in the area of our source about 360 days a year. Um, you know the kind of general recharge rate of the aquifer system is about 1.4 billion gallons a day. And then our specific aquifer, you know, uh, is about um, close to 400 million gallons a day. Um, so wow, it's like an incredible abundant source and in our charter, you know, we can only bottle less than 0.01% of that. Um, and so, and that's, that's really important to us. Um, but, but yeah, it also, you know, that subdivision, you know, originally there, uh, it's all. So it's all. Basically there's a Waiakea forest preserve. Um, so it's just a really beautiful area. Um, but there was also a royal pond, uh, originally, um, that was reserved for the royal family. Uh, that was the Waiakea Pond. But anyway. But um, yeah, very cool.

Speaker E: Love the name. Again, very memorable. Um, um, you mentioned some of the upcoming innovation. Anything you want to share now or is that something you want to come back on and share down the road?

Speaker F: No, it's fine. So we're going to be launching um, ah, a line of kind of luxury mixers um, that have industry leading amount of recycled glass. Basically it's called cullet material. Post consumer recycled glass. Um, so still kind of maintaining kind of our um, threshold in terms of are we leading in sustainability if we're going to launch in any single item? Um, and so that. So similar. If you've seen, you've probably heard of Fever Tree. Um, so yeah, so we're pretty excited. We think it's going to do really well especially on the west coast and our home market of Hawaii. Um, but yeah it'll be simple to start. It's you know basically you know a club soda tonic, um and um, a ginger beer but all sourced with you know, Hawaiian inputs. Our water. Um, so just a really smooth profile and more of like a very kind of um, you know a good fine dining experience. Um, but we're excited about that and we just launched our glass line as well for sparkling and still.

Speaker E: I noticed that yeah. On your site. So that's also like more premium.

Speaker F: Yeah, yeah, yeah. And also industry leading call it recycled glass content. Um so now those we're kind of doing our first foray um, into glass. Uh but still obviously super committed to our ocean plus line.

Speaker E: You mentioned earlier some of your uniqueness around sustainability. You mentioned ink. Talk a little bit about that and like I didn't really, I had read about that before today. But talk about what that is and why that's unique.

Speaker C: Yeah.

Speaker F: So uh, um, we just got a nice little feature with Forbes and Surfer magazine did um, several pages. Uh, which is awesome. Um, but we um, we had worked with uh, I developed a relationship with this guy Scott. I was working on algae based polymers for the last like 10 years. Um and to kind of look at okay, what is the next foray. Recycled content ultimately is still a much better environmental profile. Um, we still haven't been able to really scale uh algae the way that we'd like to with rigid plastics. But when you look at, you know, talk about something that's universal, talk about how can I make the biggest impact ink is on everything. Um and all of, and the predominant, you know, the most widespread ink that is used is obviously black and ah, it's a carbon based petroleum black. Um and so what we did is over the last five years with the help of my friend Scott over at Living Inc. Is we basically trialed for Litho and Flexo labels um, which are relevant to all uh food and beverage. Um, the first use, commercial use uh, of a carbon negative algae based alternative to petroleum uh block. Uh so we had, we brought on some, some commercial partners on the labeling side, on the commercial um, ink side. Um, and we basically open sourced that uh, so that anyone that wants to adopt that we didn't patent it. Uh, we just wanted it to be widespread uh, for everyone to use.

Speaker E: Wow. Amazing. Really, really cool. And another unique angle to your product which I think is I just love the kind of how you think about the full cycle. Right. Making products Selling product, recycling, reuse. I mean, amazing. Um, before we kick off today, I share with you, many of our listeners are entrepreneurs and leaders in the industry. Um, what would be two or three lessons learned you'd share with them from your time building, growing this brand.

Speaker F: Um, you know, I would say it's, you know, go with the flow. It's, you're gonna, there's gonna be a lot of that happens. Um, and it's all a part of your journey and embrace that and kind of take it and take it in stride and take it in a context of like everything that you go through is going to put you where you're meant to be. Um, so I think a combination of, you know, there's a little bit of a belief in fate, but also you control that fate, um, by kind of, you know, the mindset that you're employing on a day to day basis. Sure. And then like, I mean for me, if you can launch a business and also like help people along the way and that can become like core to your business, I'd say if you have an opportunity to somehow weave that in, it's not for, you know, not every business is going to be that. And some of those businesses, you know, it's enough to be able to support people's families and provide them, you know, a living, a living wage. But um, I have found that if, if, if for a lot of these brands and companies that really have a tangible, um, social impact mission, ah, that's measurable. Um, I feel like it really helps with employee retention, company culture, morale. Uh, um, I have such an amazing leadership team and a big part of that is this kind of shared value system and kind of a pride in seeing every week all the people that we're impacting through our programs. Um, so again, it's not going to be relevant to everyone. But I think that people often don't think about the intangibles and that's really important later on in your business when you're developing that leadership team, you're looking at ENPS scores and you know, the cost of losing good people. Um, so anyway, yeah, powerful.

Speaker E: Wow. Um, man, so exciting, uh, where you are, where you've come from, um, the brand packaging, like your mission, you know, driven business. I think it's super, um, impactful and you're doing great things in the industry and it's obviously coming through in terms of your growth, which is, um, man, I'm just excited about where it's headed for you and you gotta come back on down the road and Share more with us. Um, before we go though, how about share with our audience where they can find you, connect with you, buy product, etc.

Speaker F: Uh, we got store locator online, but they can find us in, um, you know, obviously Amazon, but also, you know, Walmart, Wawa, Sam's Club, Whole Foods, Sprouts. Um, you know, go check out our store locator. We're in every state. Um, a lot of convenience stores that might surprise you. And uh, yeah, I appreciate the support, Justin. Thank you so much for having me on.

Speaker E: Oh, um, man, so good to have you. Ryan Omens, co founder and CEO of waiake, a Hawaiian Volcanic Beverages. I mean, super exciting, uh, business and cool story where you've come from. Um, and thanks for sharing that with us today and look forward to having you back on down the road.

Speaker F: Man, thanks so much, brother.

Speaker A: Bye.

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