Automated Webinar Transcript

 Alex Maxwell: Hello everyone, and thank you for joining us at Highlight Spark, an event for product innovators and renovators. I'm Alex Maxwell, a research director on the Highlight customer enablement team. And I bring my background in sensory and consumer science from my experiences at Nestle, Purina, Danone, and Anheuser-Busch to support the incredible research our customers are doing here at Highlight.

Today's session is all about high impact innovation, and there's no better guest to speak on that than Jon Silverman, Senior Vice President at Spindrift Beverage Co. Spindrift is one of the most compelling category disruptors in beverage today, known for using real squeezed fruit and bringing fresh thinking to a saturated market.

Jon, thank you so much for being here with us.

Jon Silverman: Thanks, Alex. It's great to be here.

Alex: So let's begin with a little background. Jon, would you mind sharing about your personal career path and what your experience at Spindrift has been like so far?

Jon: Yeah, thanks. I started out in food. I was in the restaurant world in culinary school for a while, and then I, um, had a long run at Williams Sonoma.

Started out in food with Williams Sonoma and worked across a bunch of other categories and, and really learned the other side of the food world. You know, how do you think about food at home and that experience and kind of home keeping and entertaining and, and how to up level your lifestyle, you know, to bring real high quality products into the home. And did that across food, kitchen gadgets, cookware, glassware, books, et cetera. And I spent some time overseas with Williams Sonoma working with a lot of great, um, European, I was, was based in Italy and spent a lot of time with like, family run European companies that were making products for Williams Sonoma.

And then I spent six years at an environmental company called Grove Collaborative. We were in the sustainable home cleaning and personal care space. Making laundry detergents, hand, uh, personal care products, shampoos, things that really, you know, thinking about reduction in plastic, reduction in chemicals, kind of clean products that we sold on our site.

And then I joined Spindrift about two and a half years ago. And in some ways, Spindrift's a continuation or, you know, evolution in my career path. You know, Spindrift, as you mentioned, is, is all about real ingredients. It's kind of about the, I dunno, both the simplicity of real ingredients, but the complexity that they can bring to products like sparkling water and spiked product and now sodas. And so I've loved that, that celebration of the ingredients. You know, we work with farmers and juice processors and we work with an industry of people that are, um, you know, it's not an easy world, you know, to grow this fruit. Some of it designed for the fresh market, some of it's gonna find its way into juice and purees, which we use.

So I just love our celebration. We call "proudly made the hard way" - that celebration of finding these ingredients and folding them into products that consumers all around the US are enjoying every day.

Alex: Amazing. So it sounds like a lot of your past experiences kind of gotten you to this point with that environmental stop of, you know, getting to the source and having that clean ingredient piece into it, and bringing a little bit of that from William Sonoma of, how do you have that great at-home experience, and how do you kind of up-level something that's already been done? And so I think that's really great. And kind of getting into kind of the core of what we're talking about today.

And so in the description of our session, we described Spindrift as a category disruptor, and that's not easy to do in beverage because it is so saturated, and we're wondering how did Spindrift make that massive impact that it has within this very saturated category?

Jon: Yeah, it's a great question and, and I think one that, you know, we ask ourselves a lot because, you know, being a category disruptor is really fun and exciting, and there are days where you're like, gosh, we've made it hard on ourselves.

And we were, we talk about that constantly. Our founder Bill, he had previously had a beverage company in the cocktail mixer space, and it started to really learn about just the impact that fruit can have in cocktail mixes and then that really started the foundation for Spindrift was on real squeezed fruit, not from concentrate and how that can bring so much, both a little bit of indulgence and impact and joy and celebration of natural ingredients to life.

And we started out, our origin was in a, a slightly sweetened soda that had to be refrigerated. Wonderful tasting product, a little bit of sugar. And the challenge was, you know, glass bottles that had to go through cold chain all the way, mostly to kind of quick service restaurants. That's a challenging business to be in, particularly when you're starting out.

So we evolved over time to be, you know, as hopefully many of you know, you know, shelf stable, sparkling water business. But we kept that real squeeze fruit, you know, ethos. And I think that part of the motivation for us then and now is still, if you look at the sparkling water category for the most part.

And if you, we have this image where you're looking from above at a bunch of different glasses of kind of the same flavor of sparkling water across a number of top brands. And then you have Spindrift there as well. And you see eight glasses and seven of them have a clear liquid in them. And, you know, they are indistinguishable from one another.

And then you have our Spindrift, raspberry, lime, or lemon or whatever it may be. And you see this very nice, vibrant, you know, pinkish purple liquid that comes from raspberry puree. I think that we're always surprised in a way that there's so much flavor variation and the celebration of flavor and art in, on cans and multipacks.

In the sparkling water category, that's so, you know, evocative of fruit and you know, what fruit gets you. And none of those products have have real fruit juice in them. And so for us it's, it's always been at the core in that point of differentiation. Once you can find that, you know, lean into that as, Hey, consumer, this is the reason why you should think about Spindrift, and choose us over a very busy category and brands that have done quite well. Here's that point of differentiation. We've been able to lean into it more and more and more, get better at how we source that fruit, how we process it, how we keep it in its cleanest form as much as possible. Um, you know, get the vibrancy and color and taste and smell out of that fruit.

And so it, it just, we kind of wake up every day knowing that what we do more than anything is not from concentrate juice, and we fold that into different categories of beverages in a way that we think basically no one else has done before or done since.

Alex: Great, great. And you've mentioned flavor so many times and how that's been a true driver of how Spindrift has been so different from those colorless but fully flavored competitors on shelf. And so one of the things that Spindrift is really known and loved for is the steady stream of new flavors. And while consumers surely enjoy the novelty, those of us in the industry behind the scenes know how much hard work that requires to get all of those flavors to shelf. Um, especially with my experience in beverage RD at Anheuser-Busch, the windows of opportunity in beverage are so narrow. And speed was the name of the game for all of that, especially when you are innovating within existing and growing categories. Why do you think it's so different and so hard for some CPG companies to move quickly while innovating, and how can they overcome some of those barriers?

Jon: Boy, that's a great question. I think that we're in a category that is not terribly expensive and also is a relatively big footprint and it weighs quite a bit. And so what that means is, it forced us to be much more of a brick and mortar player. We have a strong business on our website and on, and some digital channels, but we really mostly operate, you know, on store shelves and that's great.

And one of the forcing functions of that is there are key customer, the groceries, the mass merchandisers clubs of the world. They have one or two windows a year where you can present new product. And that product is then gonna flow on shelf. And while we sometimes don't like that, you know, we wish we could do that any time of year, it does force you into knowing how to think about your year and planning. And I would encourage folks to identify, you know, what are your core channels that you either are already successful in and can lean into more - those that you're not successful in yet, but you feel like you have real opportunity or you know, if you don't know, align on where you think you want to be successful.

And that will help drive not only how you think about and kind of plan your year and product development life cycle, but also what is your opportunity size for newness. You know, if you're on an Amazon digital shelf and you're gonna go fulfilled by Amazon as a third party supplier, you can have as many flavors as you want, as many SKUs as you want out there. You can launch them whenever you want. And for some, that may be the strategy that works. If you're going to be, hey, if you wanna lean into the club channel a lot, make that a core place for you to play. What club is in and out and is very, very small SKU count. It's variety packs. So you're gonna think about your world differently.

I think it's hard for folks because. A variety of reasons. And look, Spindrift suffers from this as well. Really being incredibly clear about who your consumer is, why you are different from what they're choosing today. You know, have that conversation with consumers, you know, literally in focus groups, but also, you know, play those out - Hey, why do you shop this today? They're the category leader. We're gonna compete with that category leader. We understand you do that. We bring greater variation. We bring different price pack architecture value. We go about our ingredient sourcing differently. We bring another health profile.

Really identify that for yourself and like, and hold yourself to that. Make sure that for a couple of years, that guides all of the innovation that you're doing as much as possible. Now, every so often, you may need to refresh that vision and say, you know what? Value is not as much of a part of our DNA, we want to become more of a premium player.

And so we're gonna lean into the ingredients a little bit more, but be very clear with yourself about why you're different and, you know, be sober about it. You're not gonna have 11 differentiators versus the category. Think about who the leaders are and what are the one or two things that you're doing differently and you think and hope are doing better than others.

So I think that's one piece I think that folks frankly get the larger you get. You can get complacent, and end up getting kind of flanked by the younger, smaller folks that are digitally native, willing to fail fast. And we think about how we came to be.

We've been around about 15 years and our brand awareness, and you look at brands like Poppi and Olipop, who are not in this sparkling water category, but they, for them to get to kind of almost ubiquity around brand awareness, it happened much more quickly. They were digitally native. They came up in these channels where you can broadcast your message, um, you know, very differently to a lot of people much more quickly than Spindrift did.

Starting out in quick service for restaurants, going into Trader Joe's, into Target, and so, you know, just think about how you want to position yourself that way. But again, some folks get a bit complacent. We really wanna have that mentality of kind of who's coming after us and how do we stay fresh in consumer's mind, how do we hit on both mental availability and then also that physical availability so consumers are thinking of us and also able to find us.

So I understand why it is challenging for folks and we experience we experience that as well.

Alex: Great. Great. So tons of things going on with, you know, there's a lot of barriers out there and it's kind of choosing what are the priority ones to overcome and kind of what makes you different be between going premium or kind of battling your own internal complacency there.

There are a lot of things that play out here and in that, you mentioned a lot about consumers and how consumers are kind of at the heart of what you guys are doing. Do you have a specific example of how consumer feedback led you to launch a flavor, take a flavor out, or even rethink a product as a whole?

Jon: You know, we really have, at Spindrift, we have a pretty broad sparkling water portfolio for us. We see there's kind of subsets of that. We have our core water business, we have a tea business that at its peak had three flavors. We have a lemonade business where we now just launched our fourth flavor in lemonade, and then we have kinda what we call mocktails.

So we've got about four flavors kind of in the, in the mocktail category, and they all live in the same part of the store today. But we know the usage occasions can be different, and why consumers reach for them can be different. And so when we launched, before we launched Nojito, which we launched in January of 2020, February, 2023, we were thinking about calling that product "lime mint" because that's what it is, it's lime and mint. And we'd always called our products generally like what the ingredients are. And this just predates me. I joined Spindrift in 2023. But some of my colleagues were thinking about this really does evoke a mojito, like this is a mojito. Obviously it doesn't have the simple syrup and it doesn't have the rum.

And so we thought about, let's go out and let's put in front of our Spindrift.com community where we talk to our community, we also talk to our customers, consumers, and we sell product. And let's also talk to our key customers. Let's put it out there as a Nojito and let's understand how consumers are gonna react to that and how they inform that strategy. We were a little bit nervous about, you know, we're very straightforward about what we call products to date. You could read, you know, every one of our cans and know exactly what was in it. And even with Nojito, you know, we went, excuse me, from mojito to Nojito, that no being no alcohol.

And, and that's pretty clear what's in it. But still it's a different, you're entering maybe a slightly different emotional territory. And so we went out, we talked to consumers, we talked to our own drifters as we call them. We talked to some of our key customers, meaning our retailers. We put that product out there and we were amazed at the enthusiasm for it.

The, like, Hey, I already know what to do with Spindrift products. They're broadly applicable throughout the day when it comes to usage occasions. But Nojito really just triggers something in me, and most people don't use it as a mixer. We know that some do, but it just takes them to a place. It's a vacation, it feels a little bit more, there's relaxation base, you know, it's a moment away.

And so that's where we really dove into, you know, the consumer and what they're thinking about the product. You know, when they're gonna use it, what they're already, how are they? What do they have for that occasion? Today, again, just two and a half years ago, it may feel, kind of seem crazy to say this mocktail notion it was almost under undeveloped.

Alex: Totally.

Jon: You know, there's the Athletic beers of the world, but most of the non-alcoholic cocktail brands that you see today didn't exist two and a half years ago. And so there wasn't, you know, consumers didn't exactly know how they were gonna respond to it, but they just saw something in it that that resonated with them.

And then since then, you know, we've launched Island Punch, Cosmopolitan, Berry, Bellino, other flavors, and, and it's held true that consumers, this notion of like, oh, I love knowing what to do with this. I know that knowing that it feels like, again, this kind of respite or moment, um, has continued to resonate.

Perfect. And I know when I was, um, on that kind of research piece that that trend of low and no alcohol was starting to really boom about two years ago. And a lot of focus had shifted from, you know, those heavy IPAs that we had in the early 2010s, mid two thousands. And we're kind of swinging that pendulum back so.

The introduction of those flavors that signal a cocktail or a mocktail or bringing that sense of I'm gonna have a 15 minute vacation here at my desk is really kind of serving the consumer on one trend or another. And with that piece on low and no alcohol, Spindrift has also kind of done a touch in alcohol with Spindrift spike and having the first kind of touch into that beverage alcohol space and even leading into the soda category with the new Spindrift soda.

Alex: And so when you're doing kind of that category hopping from one part of the, the aisle to another, what did you learn about launching a product in these categories that really surprised you, created some of those barriers that you didn't know about? And was a completely different game, especially compared to the sparkling space that you existed in.

Jon: Yeah. It's a wonderful question. There's so much there when it comes to spiked - I will say with spiked - and so I think one of the things we learned is that we didn't do enough consumer research. We just didn't have conversations with consumers, both quantitative and qualitative ways.

I think that for us, that's a function of being in the sparkling water space for a long time and really having a strong innate sense as to what's working for us, what consumers, you know, what's resonating with them, and then how to push that further. But you're in the same category when it came to spiked.

One of the big differences with Spiked is the route to market. You can, we cannot call on, you know, a retailer and directly sell them an alcohol product. We have a three tier system in the US and so it's just a different way of working. We sell our sparkling water direct to many of our large customers, you know, grocers, club, et cetera.

And so you, you can't do that. And so how you service that business, how you communicate what's different and your messaging. We do have conversations with the alcohol buyers at some of those retailers, but that was different, you know, and so we were able to share exactly how we were able to talk about sparkling water, exactly how we wanted to, to consumers, to customers, et cetera.

And with the alcohol based product, you can't quite do that. Alcohol also, you know, people buy alcohol in very different places compared to sparkling water. All 50 states, 50 different rules of what can be sold and what can't. People are buying independent liquor stores, so you rarely go to a place. That has a thousand doors like some of our grocery chains do.

So it's much more dispersed selling and that has its advantages, disadvantage, you can go and test things in independent liquor stores, that you can't maybe do in the non-A space, but you also can't get that critical mass and that efficiency of selling. And so that was a key learning force.

You also go back to that kind of consumer insights. I think we, we knew in sparkling water we knew what that difference was and they're really, it's a monochromatic category. I mean, I think that many of our competitors are quite similar to one another. We know consumers switch between those, those brands quite frequently. Not a lot of loyalty. And they do that with Spindrift as well. In the alcohol space, the drivers are different. Alcohol is the reason that a lot of people are there, and so the differentiation we have in real ingredients and fruit is still very much present in the seltzer space.

But there's also this core thing of, you know, some people are like, Hey, I'm looking for four to five, six percent alcohol, and that's my key driver in purchasing this. And so we are not different in our alcohol than some of the other players in the seltzer space. So we had to think about that differently. I think maybe asking some of those questions that consumers ahead of time would've helped on the soda side, you know, that's very fresh. We launched that about 90 days ago, so we're going through some of those learnings. Highlight has supported us in some of those learnings. Some of those unfortunately are happening post-launch versus versus pre-launch, and, you know, we wanna do as much as we can upfront, and the soda space is huge and we know that people are leaving the traditional soda category.

It's unhealthy. Everyone's known that there's been diet for decades even that isn't very healthy. There's a better few soda category that's coming up. Many, many folks are doing that. There's the modern soda set and some retailers. And so if you know what we, what we knew was that we wanted to lean into our differentiation around real fruit, real ingredients, no added sweeteners, and for us, dietary fiber, you know, bad and sweeteners weren't going to be a thing. We feel that consumers are going to, that the trend is moving in the direction of real ingredients and consumers are gonna get there. But we knew that not all consumers are gonna move to a fruit-based soda on day one. What we learned is that we should talk to consumers about that.

Alex: Perfect. So it sounds like there's a lot going on, especially with Spindrift going into these different categories, going to different places on shelf. Keeping up with a consumer that changes their mind from month to month, even day to day, um, between product to product. And so using a product testing platform like Highlight, how is that bringing value to your innovation process and staying relevant with the consumer, but also getting those insights that you need to help make those longer term decisions?

Jon: Yeah, look, I mentioned it hasn't been as core to our process as it should be. I think we'll be moving forward and the way it helps is, you know, there's, there's relative speed to it. There's obviously a number of different ways in which you can, you can use insights or, or the Highlight platform.

There's product tasting, there's concept reaction, there's packaging, there's a combination thereof. And so Spindrift is always going to be a category disruptor. I mean, we just wouldn't go into a category if there was somebody in there doing something very, very similar to what we would do and the way we approach building products, I think, I'm not worried about that.

I mean, we just generally, we approach it differently. You know, again, real juice and purees not from concentrate. It's just not being done kind of much at all. In some sense, we wish there was maybe a bit more competition 'cause it would signal. This movement to real ingredients, you know, more and more and consumers shunning some of these things that are, you know, sugar and non-sugar sweeteners and ingredients that just aren't real and good for them.

And so, because that's how we think about these categories, a lot of folks are not, the first sip is not gonna be a home run. It's gonna be different. It's gonna be less sweet, it's gonna taste different. You know, a lot of people outside of orange juice, have had no experience drinking, not from concentrate juices, it's just, that's the reality of some consumption habits.

And so working with a Highlight, you know, any consumer insights platform gives you the ability to ask a lot of questions, put a lot of the risk on the table before you go to market, when the decisions you're making are costing you, you know, thousands of dollars as opposed to millions of dollars when there are, when there's product all over the country.

You don't wanna learn when you're in 10,000 doors. I mean, you want to continue to optimize, but you want to have the bulk of those learnings happen when you're in experimentation mode. Hey, we made a few hundred cans of a product, you know, that aren't labeled, that consumers say like this one, don't like this one, this one needs a little bit improvement.

You want to put all of your packaging ideas out there in front of consumers when they're on a a digital slide as opposed to on a hundred thousand printed cans. You wanna test your taglines, your statement of identity, your reason for being, that is all work that needs to happen. If you're doing any kind of, again, disruption, new category, exploration.

If you're just coming out with a seasonal flavor, I don't think you necessarily need to do, you may do a less of it, you may do none of it at all. But if you're trying to pave a new road, those are questions that we're all gonna come to grips with. We can do it, you know, for years up until launch. We can do a do it just ahead of launch.

We can do a post-launch, but walking down that road, those, those decisions just become much, much more expensive. The later in the process you do, and look, there are brands and obviously that haven't asked those questions. They're out there and that product goes away forever or you know, maybe a couple years comes back, but often forever.

And that's an expensive decision. If you put that markdowns and expired products are just obsolete. Products you gotta dispose of or pull back from retailers, whatever it may be, that is orders of magnitude more expensive than asking those questions upfront. You know, when you think, oh geez, do I have enough budget to drive some insights?

Right now you, you do. Sometimes you gotta find it because if you have to spend, you know, 10 times that later on, well, you know, then you got, then you think to yourself, wow, I wish I'd done that upstream.

Alex: Yeah, a hundred percent. And that's been my name of the game. Working on that product side, insights of making sure that we are winning with consumers and making sure that we're having that touch point of making sure like, hey, while we can make, you know, a 50 gallon batch, can we get some insights in here before we go run a whole line?

And we have cases out the door and we don't know if the consumer is really accepting of these products. So winning with consumers, I've heard so much about on kind of what that process is with you and how you're driving some of those decisions little by little with those insights in the forefront of that innovation process.

Yeah. And now switching a little bit more towards the other side of things, on winning with retailers, because it's one thing to get on shelf. It's another thing to stay there. Yep. And so once a brand like Spindrift lands a retail partnership, what are the things that you guys prioritize to ensure that long-term success in that retailer relationship?

Jon: Yeah, it's a great question and you're, you're absolutely right. To get on shelf oftentimes can be the decision of just, you know, a handful of people. That doesn't mean - it doesn't translate necessarily to consumer success. I will say, before I talk about staying on shelf, keeping in mind what we were just talking about with the insights piece, leveraging those insights into getting on shelf should also be a core part of anyone's work.

Walking into that buyer, category, manager, whatever it may be, and saying, Hey, this is the work that we've done with consumers and we have a great deal of confidence that this is gonna resonate with consumers. Hey, buyer, I'm showing you version 26 of this product, and you know what? I put the last few versions in front of consumers, both packaging, designs, the concepts, the reasons to believe the liquid or the food, whatever it is.

And so know that I go in, you know, fully committed because I've gotten signal from consumers that this is gonna work. And by the way, I got signal on the three previous prototypes and that signal wasn't great. And so we optimize and we're now in front of you with this one because we feel we are now ready.

I think that does a great job to convince that that buyer, category manager, et cetera, that you, that they should take that bet. Because if you go in with version one, sure it could be the right one, but  the consumer, they may love it, but the buyer's gonna say, well, how do you have any confidence that you're ready?

But once you get that shelf space secured, that's really when the work does begin. How do you broadcast your message as a brand or new category to consumers? I mean, you're still having direct dialogue with the consumers on your own website, through your social channels, through ad spend.

Maybe it's spend on Amazon, you know, a lot of brick and mortar retailers don't love Amazon, but it does get the word out and there's kind of ubiquity there. Everybody who shops that retailer is also shopping Amazon. How do you play into that retailers channels? They've got loyalty programs. They may have influencers you can work with. They want you to participate in promotional activities. You know, like Target has their MV, excuse me, Costco has their MVM program. There's buying end caps, there's participating in seasonal programs. They want you to be invested in it. And so know that you have to keep building that, that 360 story of your brand.

And part of that is driving the flywheel within the Walmart to Target to Kroger, whatever your key customers are driving the flywheel that resonates with them. In addition to just your brand. If you're only taking one of those approaches, if you're just saying, Hey, we're gonna go, Kroger's our big customer for the first year, we're gonna only play into Kroger accounts.

Well, you run the risk of, you may not be in Kroger forever, or when you're going into other retailers, they're gonna say all of that work you did with your Kroger partnership, whoever may that may be, doesn't really help us now that you're in our doors and if you only build your brand, you know, without any kind of customer channel focus.

Again, some of your key customers are gonna say, yeah, but you need to participate in our program as well. Like, we want you to do some work with, not just on social, not just on your own digital platforms.

Alex: Great, great. So much going on on that, that retail side, and it's almost like once you have that relationship, you have to continually date that retailer to keep things interesting, to keep the conversations going so that you don't just kind of fall into the wayside and are just having shelf space within a store.

And so one of the things that I heard you bring up quite a bit was the reason to believe, and that was both with the retailers and with the consumers. And one of the things that you had mentioned at the beginning was one of the things that sets Spindrift apart is the use of real squeezed fruit, and that obviously creates a very different kind of supply chain within the sparkling space.

And I'm really interested to know a little bit more about how Spindrift works with farmers and suppliers to source your ingredients. And what are some of those values that drive those partnerships?

Jon: Yeah, great. I can go on for hours about this, so I'm very glad you asked. It's a passion of mine and of Spindrift.

The supply chain is more challenging because of it, you know, to start it. And we have a company ethos, "proudly made the hard way." It's something that we talk about with consumers. We use that language. Our new cans that are just rolling out have our proudly made the hard way with real squeezed fruit and a badge on there.

And so we do some work directly with farmers, you know, and we do some with what, you know, with juice processors. And so, you know, much of the fruit in the US is grown to be sold fresh fruit that you buy. I mean, in grocery stores a little bit of it has grown. You know, Concord grapes. We have a grape ade product that we launched a year and a half ago.

It's Concord grapes. Love that product. I think it's a great flavor. Concord grapes, for the most part are grown to be juiced. And you've seen, you know, Concord grape juice is out there in markets. And so there we have a relationship directly with farmers. But in other cases, you know, strawberries that we buy, that fruit was grown by farmers who are hoping that a hundred percent of that will go as fresh strawberries. They make more money because of that, you know, when it's sold fresh. But they have called what's called grain outs. Visually, it doesn't look great with the strawberries. Perfectly good. And that goes to people who then juice or puree that product, and we work with those folks as well.

We're trying to increase our relationships directly with farmers. You know, I think that the country, for the most part, particularly fruit farmers. And people love them. You know, we buy the majority of our fruit from US farmers. A lot of them are smaller. The values that we look for are, you know, people that, that are doing the right thing, that are treating the land right.

We hope that they're thinking about regenerative practices where they can, you know, we've recently formed a partnership with Kiss The Ground, who's promoting and helping farmers convert their land to regenerative practices. So not all of the juice processors or farms we work with are that way. It's still a small movement, but we wanna work with farmers who, you know, are looking to the longevity of the ground on which they work.

And the vast majority of of them are, who wanna have a relationship with, who is excited to tell their story. You know, we hope at some point in the future. You know, with some of the product we sell that you may be able to scan a QR code on that can and see where that fruit was grown and see how it was transported, where it was processed, you know, turned into, you know, you know, the sparkling water that you, or soda that you buy in your store.

And so we really do value those relationships. It matters so much to us. It makes it harder, as I mentioned, 'cause fruit is seasonal, you know, it doesn't grow - the vast majority of fruit doesn't grow year round. And so if there's a harvest a year, maybe there's two harvest a year. So we've really gotta think about how much of this stuff do we need, like for the next 12 months. We need to know that now. As I mentioned, there's very few folks that are using not from concentrate juice, and so many of these people that buy these grain outs of fruit, they will concentrate that just shrink, literally shrink the volume. You know, they'll take it from every six gallons might go down to one gallon.

They can freeze it, it takes up a lot less space. Well, once it's been concentrated, we're obviously not gonna buy it. And so we've gotta plan ahead. We've gotta make sure that we're working with partners who are open to holding, not from concentrate juice for us, maybe for an extended period of, you know, for the whole year until we can get new stuff.

So it adds a lot of complexity, but we have found nothing but joy out of it. Some of these partnerships are, are just incredible and you know, some of these farmers didn't even know that. Like they could see that connection from their fruit that they grow going all the way into a Spindrift in stores.

Many of them don't know the Spindrift brand, you know, they're like, oh my God, now I'm gonna buy this stuff. Now we go back and we see Spindrift in their offices. Like, we're so proud of the fact that this, that our fruit made it into this can. That's amazing. That's a connection that they don't quite have when their fresh fruit is showing up on grocery shelves.

Alex: That is music to my ears. As somebody who grew up in middle America, rural America, having that farm background of, you know, you guys went direct to the source where that fruit is grown to translate that into a great product that any consumer can buy on shelf. And there's a lot more to it than, you know, giving some sparkling water, a kiss of citrus to deliver that real fruit promise.

And one of the things that you mentioned was your partnership with Kiss the Ground and having a lot to do with sustainability and having that deep connection to nature. And here at Highlight, one of our main purposes is to build better products for people in the planet. And looking towards the future with your partnerships.

How is Spindrift thinking about sustainability as a differentiator and are there any other initiatives that excite you on that front?

Jon: Yeah, there is a ton and, and it's something we think a lot about. You know, we know because the way we build product, that we are connected to nature, like it or not, and we like it, but you can't buy the volume of fruit that we do and not be connected to nature. And so those relationships matter and the sustainability of that matters. And we like the fact that, again, when, if farmers had nothing to do with the product that isn't, you know, viable to go to the fresh market that looks quite perfect, the economics would get even harder for them.

And so we just see what we do as in some sense, you know, sustaining their business. It may not be your traditional definition of sustainability, but it does help sustain their business 'cause there's an outlet for that. And we want them to know that we are here to buy really high quality fruit most of which has grown in the US and there's an outlet for it.

When it comes to sustainability, we do product LCAs lifecycle analysis, understand what's the impact of the products that we build. We do our Scope one through three emissions and understand what's our impact from a carbon standpoint. We haven't publicized those results, for no other reason than we just, we haven't built a full annual impact or sustainability report, but we'll refresh our carbon emissions for fiscal year 2024, and we want to start to feed that information to consumers.

We also, we see the main goal there is to drive continuous improvement. What can we do? How do we decrease the distance from where we buy the fruit? To where it gets processed to where gets put in a can to where it gets delivered to, to retailers and consumers. What can we, you know, what steps can we take there?

How can we give back to farmers? Part of the partnership with Kiss the Ground is that a portion of all of the sales of our spend of soda, we'll go to Kiss the Ground again, that has two functions. One is just to go straight to farmers through grants that either allows farmers to get educated about how to convert to regenerative practices or funds to buy equipment and other needs to convert to regenerative. And then the other half of that money to Kiss the Ground really goes to promoting the regenerative movement. You know, getting consumers like us to understand what regenerative means and to shop those brands and products more, because we know that those farmers are doing things that where the ground is going to be healthy, they're kind of putting back into it for decades to come. That's really important for us. We've had a partnership with 1% for the Planet for a number of years sponsoring certain events and initiatives so that we are again, trying to give back.

But, you know, a lot of what we hope to do, and, you know, it's ambitious, it is, you have more traceability kind of farm to can, as we like to call it, and make sure that consumers know what's going on and how do we enable farmers, empower them. To take some of the steps that they have wanted to take, you know, to improve the practices, whether it be regenerative or otherwise, just things that sustain the land.

You know, how do we participate in this? Somebody said to me a number of years ago that offsets, and we, I think many of us know about offsets, you know, offset really is, you know, it's just doing something outside of the scope in which you work, sponsor a wind farm or you know, buy carbon offsets somewhere.

Insets are really what you want to think about. And an inset operates, you know, within the world that you are impacting if you're impacting the world through the purchase of fruit. And that fruit does need water, and it might need some, you know, fertilizers in order to help it grow. Well, how do you give back within that space? You know, make the land as healthy as possible. I like to think about that inset concept, and I hope that informs many of our sustainability practices moving forward.

Alex: A hundred percent and talking about a lot of these practices help sustain the businesses, provides you with quality ingredients at the end of the day.

And I wanna zoom out on a few things, and probably the biggest topic of 2025: those macroeconomic things that are really affecting us, because there are inputs for your business, for your ingredient suppliers as business, and everyone's seeing pressures around inflation, supply chains and tariffs.

With all of that coming into play, especially this year, what advice can you give to brands navigating this kind of uncertainty as they're trying to innovate and disrupt within their categories?

Jon: It's a great question and it's a tough one. I think that, you know, literally this, you know, the last couple of weeks, the tariff rollercoaster is unsustainable.

I think it's unmanageable for people to try to orient themselves in that direction. But I would think, you know, diversification and optionality does help when it comes to sourcing and supply chain. Even if there weren't tariffs, have backups, sometimes have backups of your backups. Think about ways in which you can go to market, you know, with suppliers that are, that are good partners.

You wanna find that balance of, you don't want to have all those eggs in one sourcing or supply chain basket at the same time. You want to approach it where you're meaningful to people if you spread your volume too thin across so many different suppliers, you won't be meaningful to them. And that level of partnership that you may get out of them or may not be great, they may not be willing to partner.

So find that balance of, you know, maintaining some optionality, but at the same time, be meaningful to folks, think about can you simplify your business in some ways? Are there certain categories of business that, the 80 20 rule a little bit - Do you have a long tail of your assortment? - that really isn't providing margin accretion, top line revenue, et cetera, that you feel like, hey, you know what, now might be the time to hit pause on that. We just don't need it 'cause we've really got a core that we can lean into. Can you look at other markets where you might be able to source or be open with your overseas partners if tariffs  are currently or potentially a part of that business, just have a dialogue with them.

What are you folks doing? How should we approach it? Let try to be more planful and how do we think about making your life easier? Fewer production runs that are, that are bigger, so you gain efficiencies as opposed to our monthly runs. That might be a little bit taxing to you. You know, you're not as efficient wherever you make the product.

So like turnover, every rock when it comes to your supply chain, how you build who you buy from, you know, how you transport the goods. And, and just be open about what we can change. And look, it's okay to identify this is a change we can make, but gosh, we're gonna be, need 24 months to do it. That's fine.

Put it on the list of things that you're gonna work on under the radar, and hopefully drive some slow change and look at the things that you can change immediately and be open to it. It doesn't mean the decisions that you made a year or three years ago are bad. It just means that some of them aren't gonna lead to as much success in 25, 26, 27 as they were for the past few years.

And be humble about that and say, look, this is a, a reminder of constant evolution and we need to keep doing that.

Alex: I feel like you're bringing in so many points that are really hitting home with a lot of people in CPG especially, with all of the strategy that goes into staying afloat and having that sustaining business longer term.

And now that we're done with the heavy stuff, I think it's, let's lighten it up a little bit and talk about flavors. We've talked about flavors. We've talked about juices throughout this chat, and I have to ask, what is your personal favorite flavor of Spindrift?

Jon: I mean, that's hard. I love all my children equally, but, you know, I guess I'm a little bit, because we launched our sodas about three months ago, spent a lot of time there, and we have a ginger ale that's part of that soda launch.

And I just think, I really do like, I'm a ginger ale drinker and I've drank other ginger ales on the market, but I just think it's fantastic. We've got this ginger juice that we source. We've got just a little bit of apple in there and lime, and I love that ginger ale. It to me is like the perfect balance of refreshment, a little bit indulgent.

It delivers exactly what you'd expect from a ginger ale. I think people drinking and say, wait a second, why have I been drinking this thing that's been called ginger ale for so long? Like this is my only ginger oil moving forward. So that's my favorite.

Alex: And since you shared yours, I'll share mine. You brought it up earlier in the chat. But it's a really controversial subject on my research team that I love grape flavor, so I'm a huge fan of the grape ade. It has all of the like, childhood nostalgia around that, like what I would call purple taste. Yep. Of like the freeze pops and those grape soda, but. With the ingredients in that real fruit juice, it's kind of childhood all grown up, and can really get into that, that concord grape flavor without all of the medicinal cotton candy type notes that you would usually get out of that.

So I thank you for, for bringing that to the market to kind of appease the, the 8-year-old in me that still lives on.

Jon: Awesome. Thanks Alex. We appreciate the support and you're preaching in the choir in a great bit. I love it as well. Beautiful.

Alex: So Jon, thank you so much for joining us and this has been such a rich conversation, bringing your insights on innovation, execution, and staying true to your brand values.

And they're really inspiring both for those key industry players that are out there and also for those brands that are trying to disrupt in their own categories. And to anyone that's watching. If you're thinking about what it means to build something bold in today's market. I hope this session gave you fuel for your journey.

Thank you again and enjoy the rest of Highlight Spark.