Building Beverage Businesses
I recently went one on one with Chris Hunter, the co-founder and CEO of Koia and co-founder of Four Loko.
Adam: Thanks again for taking the time to share your advice. First things first, though, I am sure readers would love to learn more about you. How did you get here? What experiences, failures, setbacks or challenges have been most instrumental to your growth?
Chris: I was in my early 30s when my first son was born. I was looking for something that was a little more aligned with my evolving lifestyle. Craft beer was trendy at the time, and it still is, so I found a small craft brewery outside of Chicago that was creating an alcoholic root beer. I formed a relationship with the creator and founder. We used our subsidiary, Innovative Brewing, to partner with the company -- and created the brand, Not Your Father's Root Beer. We ended up selling that brand to Pabst shortly after.
At that point, life was changing again, and my second son was born. He was born dairy intolerant, so we became a dairy-free household. My wife was studying to be a nutritionist. We were starting to eat a lot differently. My workouts changed from when I was younger, from typical gym days to doing yoga and triathlons. I was much more aware of health and wellness in general. I started investing in some small, better-for-you companies and products, from meal delivery kits services to a product called Raw Nature 5, which was the original form of Koia. It just so happened that the product was in my gym, and I had been drinking it.
As I started to do my due diligence, Raw Nature 5 wasn't a great name and had an unattractive bottle and label. But it was selling well and in 30 stores in Chicago. I started to dig into it a little more, and one of the stores told us it was their best-selling product and sold for $6 a bottle. When I stopped into Whole Foods, I noticed a fair amount of shelf space dedicated to this product and overheard a consumer pitch it to another consumer. Many industry veterans, including Mark Rampolla, who created Zico, invested in the product, so I invested alongside them. I was the local guy who had some entrepreneurial experience, so I formed a good relationship with Raw Nature 5's co-founders. As they started moving along, the company got into a difficult situation: running out of money.
We collectively decided to pull Raw Nature 5 off the shelves because it wasn't a scalable product at that point. There wasn't a process in place to sell it nationwide. But I believed in the product so much that I decided to invest a significant amount, at least from my perspective, to help keep this idea alive. I talked about wanting to bet on myself and take the reins. So I came in to help pivot the company and co-founded the new company and new product, which we collectively rebranded as Koia.
Adam: How did you come up with your business ideas and know they were worth pursuing? What advice do you have for others on how to come up with great ideas and effectively test them?
Chris: I found that I enjoy working on things that align with my personal beliefs and lifestyle. Therefore, my ideas usually come from filling a need that my family or I personally have. I also get the most inspired when I’m doing something entirely unrelated to my industry. In those moments when I find “eureka” happens for me, inspiration from different places ends up merging into a more crystallized idea.
Adam: What are the key steps you took to build brand awareness for Four Loko and Koia? What are your best tips on the topics of branding?
Chris: First and foremost is the product itself. It has to deliver on its promise and not require sacrifice. Brands also need to understand their consumer and communicate with a clear, simple, and authentic voice. Package design is the first step to doing this. It requires the brand to clearly and concisely provide the key points of interest and differentiation. The packaging itself should also have the ability to be iconic.
Adam: More broadly, what were the key steps to growing and scaling your businesses? What advice do you have for others on how to take their businesses to the next level?
Chris: There are multiple ways to launch and grow a business, and indeed, surrounding yourself with the right people is an excellent place to start. Many companies will saturate one particular market like New York or L.A. or wherever and prove out their story and then launch nationally. At Koia, we were fortunate that we had an opportunity to launch nationally with Whole Foods. And we couldn't turn that down, but it's an expensive way to go. We had to take on investment and grow the company quickly.
My advice is to think through what you want, the outcome of your company and product to be, and what route to market best fits that, whether it's a regional build or national rollout.
Adam: In your experience, what are the defining qualities of an effective leader? How can leaders and aspiring leaders take their leadership skills to the next level?
Chris: I believe an effective leader makes those around them better. You can only do that by empowering your team and building real, personal connections at all levels. It is vital to developing shared trust and a fundamental building block for a strong culture of accountability and exceptional performance.
Adam: What are your three best tips applicable to entrepreneurs, executives and civic leaders?
When it comes to success in business, you can never go wrong if you:
Continuously challenge yourself, your team, and your thinking
Always trust your instincts
Prioritize action over perfection
Adam: What is your best advice on building, leading and managing teams?
Chris: Building the right team comes down to business goals and recognizing your own (and the existing team's) strengths and weaknesses. Sometimes it requires you to be a bit creative. For example, at Koia, instead of building the team from the bottom up, I choose to search for and hire experienced leaders who then had the autonomy to make their teams as they chose. It was a more expensive approach, but these individuals instantly proved their value and brought a level of experience and expertise that made our company better.
Adam: What are your best sales and marketing tips?
Chris: It's essential to value partnerships more than selling (to our retail partners). There's also a need to understand and recognize there is no silver bullet in marketing, so the approach should include a blend of many disciplines coming together to build momentum for your brand. I also think finding ways to pleasantly surprise consumers makes it easy to gain word of mouth support. As an example, Koia promises to deliver a healthy, low sugar, convenient plant-based beverage. When consumers try it, they are shocked at how good it tastes and that no sacrifice is required to “do better.” That surprise factor makes them outspoken advocates.
Adam: What is the single best piece of advice you have ever received?
Chris: I've received some excellent advice over the years, but someone once told me to "get comfortable with being uncomfortable." Each day, I challenge myself and my team to do just that.