Episode #336: Startup Series – Hugh Thomas, Ugly Drinks, “This Is The Result Of Two 23-Year Olds In A Pub In London Having A Couple Of Beers” | Meb Faber Research

Episode #336: Startup Collection – Hugh Thomas, Ugly Drinks, “This Is The Consequence Of Two 23-12 months Olds In A Pub In London Having A Couple Of Beers”









Visitor: Hugh Thomas is the co-founder and CEO of Ugly Drinks. Use code UGLYMEB for 20% off your order. 

Date Recorded: 7/7/2021     |     Run-Time: 46:02

Abstract: In as we speak’s episode, we hear how Hugh fell in love with the beverage business a lot that he began an organization to offer individuals with a wholesome drink at an inexpensive value. What began with him strolling round London to promote drinks one retailer at a time has now reached over 15,000 shops across the globe! Hugh shares the story of the model and advertising with the ‘ugly’ title, why there’s such a necessity for a wholesome drink available in the market, and what it was wish to embrace direct-to-consumer throughout COVID.

As a particular provide for listeners of the present, go to uglydrinks.com and use the code UGLYMEB to get 20% off your order.

Sponsor: The Idea Farm offers you entry to over $100,000 value of investing analysis, the type often learn by solely the world’s largest establishments, funds, and cash managers. Be part of as we speak and get entry to quarterly CAPE ratios, an excel quant backtester and your entire analysis library. And better of all, there’s a 30-day free trial interval.

Feedback or solutions? E mail us Feedback@TheMebFaberShow.com or name us to go away a voicemail at 323 834 9159

Curious about sponsoring an episode? E mail Justin at jb@cambriainvestments.com

Hyperlinks from the Episode:

  • Sponsor – The Idea Farm
  • 2:00 – Intro – Go to uglydrinks.com and use the code UglyMeb to get 20% off your order
  • 3:03 – Welcome to our visitor, Hugh Thomas
  • 4:39 – His profession within the beverage business
  • 10:21 – What impressed Hugh to start out Ugly Drinks and the way he began making the primary samples
  • 13:20 – Ugly Drink’s first taste and the way it was acquired by the general public
  • 14:18 – Studying the well being and security laws facet of the enterprise
  • 16:35 – How he constructed out the sale channels for the corporate
  • 19:18 – Deciding on taste profiles and constructing distinctive takes on classics
  • 21:28 – Caffeinated choices and direct-to-door supply
  • 23:00 – The origin story of the title
  • 27:35 – Distribution by way of brick and mortar shops within the US
  • 29:19 – Direct-to-consumer, retail and eCommerce development
  • 31:05 – What the previous yr of the pandemic has been like for Hugh
  • 33:31 – Considerations in regards to the environmental affect of aluminum cans
  • 35:29 – Mocktails and ideas on entering into the cocktail sport
  • 37:00 – Plans for the long run and elevating Collection A funding
    38:56 – What they’re planning for Ugly as they appear out to the horizon
  • 40:07 – Among the weirdest taste requests they’ve needed to date
  • 41:17 – Essentially the most memorable a part of Hugh’s journey
  • 42:13 – Be taught extra about Hugh; uglydrinks.com; Instagram, Twitter and TikTok @uglydrinks; Hugh on LinkedIn, Twitter, Instagram; @uglyhugh


Transcript of Episode 336:

Sponsor Message: Right this moment’s episode is sponsored by The Idea Farm, my very own personal, curated analysis service that provides traders entry to analysis reviews usually utilized by the world’s largest establishments, funds, and cash managers. These reviews come from a few of the most revered outlets in investing, lots of them costing hundreds of {dollars}. We additionally ship our favourite investing podcasts from the previous week, and so you’ll be able to make sure to solely hearken to the very best of the very best. Additionally included within the subscription, we ship out our quarterly valuation updates just like the CAPE ratio, so you’ll be able to see which nations seem like the most affordable for brand spanking new funding {dollars} within the inventory markets all all over the world. We even have the Quant backtester, which lets you consider varied strategic and asset allocation methods going again in time. So all this may be yours with a subscription to The Idea Farm, and better of all, you’ll be able to attempt it out for a free, no-risk 30-day trial. Are you prepared for an investing edge? Go to theideafarm.com to study extra.

Welcome Message: Welcome to the “Meb Faber Present” the place the main target is on serving to you develop and protect your wealth. Be part of us as we talk about the craft of investing and uncover new and worthwhile concepts, all that will help you develop wealthier and wiser. Higher investing begins right here.

Disclaimer: Meb Faber is the co-founder and chief funding officer at Cambria Funding Administration. Attributable to business laws, he is not going to talk about any of Cambria’s funds on this podcast. All opinions expressed by podcast individuals are solely their very own opinions and don’t mirror the opinion of Cambria Funding Administration or its associates. For extra info, go to cambriainvestments.com.

Meb: Welcome, podcast listeners. Right this moment we’ve one other episode on our podcast Founder Collection the place we invite kick-ass entrepreneurs to speak about their experiences from the entrance strains of beginning an organization. We cowl all the pieces from newly minted startups nonetheless struggling to make it out of their storage all the way in which to the elusive unicorns which might be both reworking conventional enterprise sectors with progressive concepts or creating solely new ones by way of cutting-edge applied sciences. Both approach, the end result might be whole catastrophic failure and chapter or a whole bunch of tens of millions of {dollars} of income and a valuation value north of a billion {dollars}. Hear in to listen to the tales of blood, sweat, and tears as these founders tried to alter the world. As a disclosure reminder, I’ve invested in most if not all of those startups and can look to speculate extra as they proceed their startup journey. Please benefit from the subsequent episode on our Founder Collection.

Meb: What’s up, y’all, we bought an effervescent present for you as we speak. You’ve undoubtedly heard or seen this model earlier than as I drink their water in virtually each episode over the previous yr. Our visitor is the founding father of Ugly Drinks, a beverage firm that makes drinks with no sugar, no sweetener, no energy, and is making an attempt to show the ugly fact about huge beverage. In as we speak’s episode, we hear our visitor fell in love with the beverage business a lot he began an organization to offer individuals with a wholesome drink at an inexpensive value. What began out with our company strolling round London to promote water one retailer at a time has now reached over 15,000 shops across the globe. Our visitor shares the story of the model and advertising with the Ugly title, why there’s such a necessity for a wholesome drink available on the market, and what it was wish to embrace direct-to-consumer throughout COVID.

As a particular provide for listeners to the present, go to uglydrinks.com and use the code UGLYMEB to get 20% off your order. Once more, that’s uglydrinks.com, and use the code UGLYMEB for 20% off your order. I promise you’ll love these waters. Please get pleasure from this episode with Ugly Drinks’ Hugh Thomas. Hugh, welcome to the present.

Hugh: Meb, thanks for having me. It’s a pleasure to be right here.

Meb: The place do we discover you as we speak?

Hugh: So, regardless of the accent, I’m within the U.S. I stay right here in New York, in Brooklyn. Been right here about 4 years. Yeah, it’s good to be chatting to you.

Meb: You’re remodeled right into a hipster, you bought a beard already, I think about consuming a $10 espresso. I really like Brooklyn. I miss New York. I can’t complain in regards to the espresso costs, I stay in L.A., so. When’s the final time you’ve been residence to the U.Ok.?

Hugh: Really, due to COVID, I’ve not been again in virtually two years at this level. So hopefully they elevate a few of these restrictions within the subsequent month or so I can get again and see some household and mates. However I feel I’ve been right here in my house working Ugly for the final 18 months at this level like many individuals I’m positive listening or watching.

Meb: So we’ve been badgering to get you guys on the present. You guys match right into a class for traders of what I form of name the Peter Lynch technique of selecting shares. And also you don’t know this however I’m a quant. So all the pieces I do is computer-based aside from product firms I have a tendency to like and there’s solely been a few dozen of those. And I’ll put you in the identical class again within the day of Lyft, Inconceivable Meals, HotelTonight. And now Ugly Drinks, so that you’re in good firm. In prep for the present, I’ve a…what do we’ve as we speak? I bought the orange soda, listeners, and I bought a cherry, and we’ll discuss all about this. Longtime listeners in all probability have seen me crack these throughout many a podcast and assume I’m simply crushing beers for the previous few years as a result of, you understand, the can is hanging, nevertheless it’s really glowing water, y’all. All proper, let’s hear about your origin story. You began off within the coconut water world or one thing like that. Give us somewhat rewind.

Hugh: Yeah, so clearly, grew up within the U.Ok. After I was a scholar at college, I used to be the Vitamin Water man. So you bought…you keep in mind the model, the colourful liquids for 50 Cent that offered to Coca-Cola. After I was 18, I used to be the man with an house stuffed with Vitamin Water drinks. Like, I had a sofa made out of the Vitamin Water circumstances that have been delivered to my house. In order that was my first slight foray into beverage and that’s once I fell in love with it. I used to be attending events, giving out drinks at halftime in school sports activities occasions. I used to be giving out drinks in college libraries when individuals have been revising for and learning for exams. And I simply fell in love with the variety of contact factors.

After which once I left college, I went to work in a giant CPG. So I labored for Heinz ketchup. I used to be within the European advertising group there, which is clearly an enormous model, I discovered quite a bit about how huge enterprise runs the entire processes, the way in which they use knowledge. However clearly, being younger and entrepreneurial, I used to be pissed off by that. Didn’t have a beard at the moment both. I used to be really very clean-shaven and wore a swimsuit to work. I’m now very totally different to that. Realized an enormous quantity however working in a giant firm, needed to eliminate a few of the course of that I felt was stifling me. And now sarcastically, I’m making an attempt to introduce most of that course of again to our startup.

So I left Heinz to affix an upstart beverage firm referred to as Vita Coco, the coconut water enterprise. And Vita Coco was exploding right here within the U.S. after which was launching in Europe and the Center East. So I used to be the primary advertising rent there, I used to be in a group of 4 individuals in a tiny workplace in London. We grew that enterprise from lower than half 1,000,000 income to $50 million income within the 4 years I used to be there. We launched in 45-plus markets throughout Europe, the Center East, we launched in South Africa, we launched all throughout Western Europe, all throughout the U.Ok. We went as far east as Pakistan and many totally different markets the place we took coconut water to. And I used to be fortunate sufficient to spend time not solely in these markets but additionally visiting New York’s head workplace right here. After which additionally I used to be fortunate sufficient to go to Tokyo and see the model launch in Japan as nicely.

So I actually form of noticed what it meant to be a part of a world drinks firm, and I fell in love with it. I really like beverage. I really like the way in which if you maintain a can or a bottle, it says a lot about you. And I really like the way in which working in that group felt like being on a sports activities group. All people has a distinct place, you must have a steadiness of EQ and IQ in beverage. Not everybody can handle the books and do the accounting. And never everybody can stroll right into a retailer within the Bronx and promote a case of coconut water to a retailer supervisor. So it’s essential have a mix of personalities and a mix of traits with the identical form of cultural DNA, and I discovered that fascinating.

After which I assume the final a part of the origin story of Ugly is that I started to be actually conscious of sugar and sweetener in beverage and the way huge of a difficulty it’s. My mother is a diabetic nurse again within the U.Ok. and she or he all the time taught me you’re what you drink as a lot as what you eat. And the way lots of the sufferers she was seeing who have been newly recognized with Kind 2 diabetes have been due to overconsumption of hidden sugars, and specifically in soda. And I regarded into it, and I used to be like the scale of those markets is so huge. Within the U.S., it’s a $90 billion soda market. Within the U.Ok., it’s virtually a $10 billion soda market. And that’s simply two nations. I imply, you have a look at locations like Mexico, the capita consumption of soda merchandise is off the size.

And I checked out it and everyone was speaking about well being being a development. And also you really understand that weight problems and other people being chubby percentages have elevated for the reason that ’70s like in an insane quantity. I feel within the U.Ok., 6% of individuals are overweight in 1976 and in 2016, it’s extra like 30%, 20% of 12-year-olds within the U.Ok. are actually overweight. And it’s simply you have a look at these items and everyone’s speaking about investing in wholesome foods and drinks and pure foods and drinks. And I simply felt so lots of these issues are costly. So many wholesome merchandise are 5 bucks, 10 bucks, 5 kilos to purchase, out there in Santa Monica, Manhattan, and London. And actuality, individuals are common individuals working laborious for his or her cash, selecting merchandise that they’ll afford. Actually, during the last 12 months, individuals have actually been squeezed on their revenue. They should make wholesome switches which might be inexpensive and accessible. And so they wish to purchase from manufacturers that talk to them like common individuals.

And so I turned obsessive about this concept of taking over huge soda with a model that was wholesome however positioned like a soda. And spoke to individuals prefer it was your buddy and didn’t inform you you wanted to go and do yoga and Pilates and drink a inexperienced juice to be wholesome. You’ll be able to drink glowing water and drink extra water and eliminate 40 grams of sugar from a soda each time you swap a can out. That was, form of, the true driving power. And day by day once I get up now I’m serious about how we slowly introduce extra customers to water and get individuals consuming water as a result of it’s enjoyable and refreshing versus consuming soda, and in order that’s what I’m motivated by.

Meb: That’s humorous. I imply if you happen to assume again within the U.S. once I was rising up, used to have this meals pyramid the place on the backside was like it’s essential get 10 servings a day of pasta and bread and like grains. And hey, as a wheat farmer, I’m okay with that, however as somebody who understands somewhat bit about vitamin, that’s in all probability the inverse of what you need it to be. And data compounds over time, we discovered some issues. I grew up consuming soda. I imply, my God, I keep in mind even being in faculty and I’d put down like six Weight loss program Cherry Vanilla Dr. Peppers a day once I was interning. And other people could be like, “Meb, however you understand that food regimen’s no higher for you.” I’m like, “Look, I’m very conscious. I simply love…I feel I really like the bubbles and I really like that there’s a distinct style than the water and, in fact, spring a great deal of caffeine.” Anyway.

So okay, you got here up with this concept, you’re like, “Look, this area, it’s so apparent.” I imply, it’s one in all these items that’s similar to, “Look, sooner or later, you’re not going to be consuming the sugary drinks. It’s epidemic, definitely right here in addition to elsewhere.” However what gave you, kind of, the chutzpah, I don’t know, inspiration of claiming, “Possibly I could make my very own drink?” And the way did you begin doing it? Are you simply in your kitchen beginning to experiment? How did it even get began?

Hugh: No, that’s loopy trying again. I imply, I used to be 23 on the time in a small house sharing with different individuals in London, nonetheless in a full-time job. Had this concept and flavored glowing water existed within the U.S., however there’s nobody doing it in a can in Europe. And clearly, I used to be all the time formidable about going international with this, which finally introduced us right here. I began with the very first thing I did, which is a hack I all the time inform new entrepreneurs, we’re establishing a pretend area title and having an e mail tackle that wasn’t my Hotmail or Gmail. As a result of I used to be discovering individuals weren’t replying to my Hugh Thomas no matter embarrassing Hotmail tackle that I’d created once I was 15 or one thing like that.

Meb: It’s humorous you talked about that as a result of, like, there’s a component now the place if you happen to’re advertising to a particular demographic, aka older, rich individuals, you really need the AOL addresses, I feel as a result of it identifies as being any person who’s previous and possibly has some huge cash. Anyway, maintain going.

Hugh: I used to be emailing factories and co-packer traders, and I used to be CEO of no matter holding firm we created on the time and that began to open doorways for us. So individuals felt we’re critical that I used to be the CEO of an organization, regardless that I used to be sat in my bed room in London. And simply began utilizing Google to grasp the best way to begin an organization. Like very merely, I had no concept what I used to be doing. Every part’s been becoming a member of the dots and self-taught throughout.

Clearly, I had a little bit of expertise in beverage once I was younger. I assumed I knew what I used to be doing, however discovered, began batching up drink, began experimenting with merchandise began studying about meals science and complexity of co-packing. Then realized the minimal order portions of creating merchandise like this, which was like, oh, okay, I don’t have that a lot cash to supply that a lot product. Which is my first expertise of understanding the necessity to increase capital and Ugly is the results of guys of their early 20s studying as we’re going.

So there’s lots of errors we’ve made alongside this course of. However we’ve additionally discovered from lots of our errors. And one of many issues we all the time discuss is being stoic. And there’s a e-book by Ryan Vacation, “The Impediment Is The Manner.” And any of these errors long-term finally turned out to be issues which have taken the enterprise within the route we’re in now. So sure, it’s been a wild journey, began initially, very first manufacturing run, did a small household and mates funding spherical, form of individuals my dad performed golf with, uncles and aunties, everyone put a small sum of money and we didn’t rise a lot in any respect, did a manufacturing run. After which it was a case of strolling round central London knocking on doorways making an attempt to promote drinks, and that’s the place it began. And as we speak, we’re in 15,000 shops all over the world. And I’ve offered on-line all over the place however…

Meb: What was the primary taste, do you keep in mind?

Hugh: So we did a spread, we did a lemon-lime and we did a tropical-flavored grapefruit and pineapple drink within the U.Ok. And we launched that into Selfridges, which is the large division retailer in central London, which is our very first cease store. So not a nasty place to launch. They’ve a meals corridor there. And we actually walked into the workplace within the constructing, knocked on the door and dropped samples off to get that itemizing, there was no magic behind, it was as a lot of a hustle as that. And after we first launched in that retailer, we did demos, we did samplings in-store day by day.

And we really met our first larger traders doing that demo. They have been strolling by way of the meals corridor on a lunch break, noticed us pitching it, didn’t inform us who they have been, after which we bought an e mail a few weeks later, and now they’ve been our lead investor till as we speak. So that you by no means know. There are moments of serendipity and throughout the enterprise, did we get fortunate or can we create our personal luck? I imply, who is aware of? However that’s how we began, actually.

Meb: So how does one go about…I imply, the great half about you as a founder is you’ve form of been by way of it somewhat bit. You chop your tooth with some Vitamin Water, hanging out with 50 within the membership, somewhat bit the coco drinks, which was my favourite, coconut water. I feel that was the very best of the lot.

Hugh: Yeah, I nonetheless prefer it.

Meb: How does one even go about beginning to create a few of these? Like, I assume there’s some fairly important regulatory high quality management conditions the place you’re like, “Yeah, I simply raised a buddy and household and began promoting soda.” But it surely sounds quite a bit less complicated than it in all probability was.

Hugh: I feel with some foods and drinks manufacturers, you’ll be able to perhaps produce it in your kitchen with some well being and security regulatory stuff and make some jars of peanut butter or chutney or jam or no matter you’re going to take all the way down to the native farmers’ market. Once you’re speaking about cans of beverage, it’s much more scientific, clearly. And I didn’t have a full canning line in-built my house. So step one for us was discovering somebody who had a type of canning strains. Lots of co-packers mainly mentioned, “No, we don’t wish to work with you guys, two 23-year-olds,” me and my co-founder, Joe. “Two 23-year-olds knocking on our door, you’ve by no means accomplished this earlier than.”

Enjoyable truth is we now work with all these co-packers, so now they’ve modified their thoughts 4 or 5 years later. However on the time, it was like who’s going to work with us who could make this for us? Ultimately discovered a small co-packer, satisfied them to work with us, ordered the primary batch of cans, needed to pay upfront for half the product, which was painful, like utilizing lots of that investor’s cash. After which we had a warehouse stuffed with drinks and checked out one another and mentioned, “Effectively, higher promote this then.” And it’s one of many causes we began promoting on-line so early was that we had a reasonably good Instagram account early on, simply naturally telling the story by way of Instagram.

And we had individuals throughout the U.Ok. discovering us and realizing that they had a zero sugar different to sodas that they might order. And so we mentioned, “Effectively, let’s arrange a Shopify website.” That is in 2016, ’15, ’16. So within the final 12 months, everyone’s promoting B2C, however on the time, I feel it was simply mattresses and razor blades being offered direct-to-consumer. However we felt we may convey that to beverage. And we simply began constructing out from their one retailer at a time, one buyer at a time on-line. And finally form of actually constructed up some momentum to form of rebrand, introduce extra flavors, after which increase capital to increase the enterprise.

Meb: I used to be making an attempt to determine how I got here throughout you guys. And I do know I used to be tweeting about y’all and a few of these different merchandise that I like, meals and form of cooking style. And I feel the unique approach I ended up shopping for a few of your drinks was by way of Amazon. After which now you’ll be able to simply purchase them out of your web site, which I don’t assume was all the time the case. Are you able to give listeners somewhat instance of the way you constructed out…? As a result of it appears unusual, I feel, for lots of people to be like, “Hey, I’m going to purchase glowing water on-line.” However we get it on the workplace the place we’ll get like eight circumstances that come into the workplace, so.

Hugh: Yeah, you guys are good prospects. Yeah. So for me, once I first moved to the U.S., specifically, I’d stroll round a grocery retailer and also you’d see individuals form of placing circumstances and circumstances of glowing water within the trunks of their automotive. After I first moved to New York, I spotted that if you happen to stay in a fifth-floor walkup in Manhattan, the concept of carrying 48 cans of seltzer up 5 tales isn’t that thrilling. So is there a world wherein you simply set and neglect and subscribe on your workplace or your house, your self, to supply? I imply, it’s one thing that everybody within the household drinks, you wish to load up the fridge, it’s not overly costly. And also you simply need individuals to drink cans and cans a day, proper like, you do in your workplace. As soon as it’s there, individuals get pleasure from it. It’s not unhealthy for anybody.

And in order that’s why we actually determined to introduce the direct-to-consumer providing. And we’ve added to it as we go. And now one of many attention-grabbing issues we do is provide distinctive flavors simply to that group. So if you happen to’re signed on to our mailing checklist or our textual content message checklist, you’ll get early entry to the flavour of the month and we create a brand new taste each single month on our web site. Right this moment, we simply introduced our butterscotch taste of glowing water, which has gone stay this afternoon. And it’ll promote out within the subsequent couple of days. We’ve accomplished cherry cola, we’ve accomplished marshmallow, we’ve accomplished a root beer flavored, grape soda, all zero sugar, zero sweetness.

And it simply what it’s accomplished for us is create this wonderful group of folks that come to us straight, get our emails, they reply, we’ve interactions with them. We really crowd supply a few of these flavors, too. So we requested our followers what flavors they needed to see from us and we’ve made them. So really listening, we’re having a distinct relationship. And that’s very totally different to the suggestions course of that if we have been to place this product, which we do as nicely, however in shops, it’s very laborious to speak one-to-one with somebody who’s picked up your case and actually perceive why they did it, what they like about it, which flavors they’d wish to see from us subsequent.

And so direct-to-consumer has been form of a giant core when it comes to constructing our group and getting the phrase on the market, which is how we’re having this dialog is discovering us on-line, assembly. I imply, the actual fact we’re on this name and I began this in my house in London, form of, 5 years in the past is weird. The web has made this occur, proper. And so we’ve been leaning on the web ever since we began the enterprise.

Meb: Effectively, I’m not going to lie, the butterscotch sounds completely atrocious. However we’ll attempt it. We’ll undoubtedly get it. I didn’t even know subscription was a selection. We’ll undoubtedly get signed up. Grape soda, oh man, that’s offered out. That appears like one thing…new grape. I keep in mind consuming new grape as a child. Marshmallow, root beer, all proper, you’re going to should put my request. You formally get to place my request, the food regimen…it’s not food regimen, so it’d be cherry vanilla Dr. Ugly. I do know you bought the Dr. Ugly, however the cherry vanilla, that’s Meb’s request.

Hugh: I simply bought my pen out and I’ve written it down right here.

Meb: Yeah, nicely, it’ll in all probability be much less standard than the butterscotch. That’s cool as a result of, like, it offers it a component. Like, how do you guys…like, is that this, like, worldwide flavors? Is there an organization the place you’re similar to, “Look, we would like this particular taste profile?” And so they’re similar to, snap their fingers and like, we bought that within the queue. They’re like, “Dude, we may give you something you probably need.”

Hugh: Yeah, we went with plenty of totally different companions to try this. I imply, the concept heart is inside our group. So we’ll ask our followers what they need. And so they’re by no means saying tangerine or passionfruit. It’s all the time concepts such as you simply had, Cherry Vanilla Dr. Ugly. You in all probability miss that taste that you simply had if you have been youthful that you understand that it’s in all probability not one thing you’ll be able to have six cans a day of anymore. But when we made one thing that tasted fairly shut and was wholesome, you’d be into it. So after we go to these taste homes, we’re saying we wish to take Meb again to being that age when he had six cans a day. So that is the flavour we’re going after. That is the reminiscence that if you style it, style and reminiscence are so interlinked. We wish to take somebody again and provides them permission to get pleasure from that factor once more.

So I’m consuming the fruit punch now, and we took the Hawaiian fruit punch taste and we mentioned, “Match this as shut as you’ll be able to.” And now that is like consuming a zero-sugar, zero-sweetener pure fruit punch drink, it tastes similar to it and it’s scrumptious. In order that’s how we do it. They ship us again plenty of little bottles. Now we’re doing it at residence, not within the laboratory anymore due to COVID. We do on Zoom, all of us have our bottles laid out. We do correct sampling like we’re sommeliers with a spit bucket and issues like that, and write our notes down and work with them and collaborate. And that’s how we’ve created such wonderful merchandise.

Meb: The fruit punch is attention-grabbing. I imply, I keep in mind being a child, I used to be going to camp in North Carolina, Camp Seagull, Camp Morehead, shout out, I don’t assume Morehead exists anymore. However day by day for lunch and dinner, the youngsters primarily had Kool-Help. Like my, God, you’d in all probability get arrested for giving folks that this point in time. However that’s the nostalgia, precisely what you’re speaking about, the fruit punch, kind of, orange soda, Sunkist, takes me again. The one soda that I nonetheless permit myself, and longtime listeners know as a result of I name it my redneck Pink Bull, is Weight loss program Mountain Dew. I’ll nonetheless deal with myself anytime I’m on a highway journey and podcasting, Weight loss program Mountain Dew offers me the caffeine I would like.

Hugh: Effectively, we’ve simply launched an power water, which is 160 milligrams of caffeine, appears somewhat like this. And we’ve a Mountain Dew taste referred to as Mountain Ugly, zero sugar, zero sweetener.

Meb: So what’s the equal? Is that if you say…what number of grams, 160, is that like a cup of espresso? Is that like 5 cups of espresso?

Hugh: It’s a 16-ounce can, so it’s like 2 cups of espresso mainly within the can. You’ll actually really feel it.

Meb: I’ll attempt, we undoubtedly have these within the workplace. And it’s good you distinguish it as a result of it’s bought a distinct colour. So I’ll attempt it later once I’m dragging. You should be universally loathed by supply males all over the place. Now it’s offloaded the somebody being on the Complete Meals to rapidly simply exhibiting up in your door.

Hugh: No, I’m positive there are some supply drivers that don’t prefer it, and others could also be getting larger biceps by the week.

Meb: Yeah, that’s level. They only offload their exercise.

Hugh: Yeah, precisely.

Meb: What’s the origin story on the title? I imply, you clearly have accomplished a extremely good job on the advertising and the branding. It’s a really distinct…I’ve had lots of people, once more, ask me, “What are you consuming?” Was this it from day one? Was this like an A/B take a look at of 20 totally different names? How’d you guys give you it?

Hugh: No. And I feel that is the results of two 23-year-olds in a pub in London having a few beers. Let’s be sincere. That’s the magic, and branding and advertising is science and artwork. And typically there’s somewhat little bit of inspiration. And I’ll inform you about that. And for us, we needed to create a model that took on the established order. We knew the large firms would by no means do actually disruptive advertising, they don’t wish to take that threat.

And we have been arising with this model across the similar time that the phrase “pretend information” and “different info” was launched. And it felt, for me, like there have been lots of similarities between, form of, that idea and taking a look at huge soda advertising, the Olympics or the Soccer World Cup and sponsoring grassroots soccer like they do within the U.Ok. And I simply felt you could have taglines about making individuals glad, making individuals lovely, however if you happen to’re loading them up with 45 grams of sugar, you’re not likely doing that. So I needed to construct a model round telling the reality and being clear and we’ve this concept round telling the ugly fact.

And there’s a quote from George Orwell within the e-book “1984,” which is, “In a time of common deceit, telling the reality is a revolutionary act.” And that quote, for me, was like a lightweight bulb the place it’s like going into this subsequent decade into the 2020s, the web goes to democratize all the pieces, individuals can discover out what’s unhealthy for them, discover out the elements. The large soda firms have marketed down individuals’s throats spending all their cash during the last 100 years telling them that soda makes you cheerful and soda equals happiness. And I simply needed to inform it as it’s. That is flavored glowing water, no sugar, no sweetener, no false guarantees, no advertising gimmicks, and that’s what it’s. And that’s what we’ve been making an attempt to do ever since then.

And so individuals have actually resonated with it. I don’t know if you understand Seth Godin’s purple cow story the place you’re on a prepare going previous fields and fields of cows and one of many cows is painted purple. And somebody asks you after the prepare journey, “What do you keep in mind in regards to the area of cows?” You’re going to recollect the purple cow. So Ugly is a purple cow. Once you go to a beverage fridge within the U.S., a few of the shops listed here are so huge, you might have hundreds of cans on the shelf, what are you going to recollect? What are you going to remove?

We’re a small firm, so each time our package deal is on the shelf, it has to work for us. It has to seize individuals’s creativeness and stimulate somebody selecting it up, exploring it, perhaps making an attempt it for the primary time. And so for us being referred to as Ugly, and with the intense, vivid colours that we’ve on the packaging, it simply opens that up. After which individuals fall in love with the honesty, the transparency, the actual fact we don’t take ourselves too severely, and simply the sense of enjoyable we’ve across the model.

The opposite factor we do is we additionally use brilliant colours and cartoon characters. So that you gained’t see my face on the web site or my signature on the can telling individuals to get wholesome. We use cartoon characters, we use avenue artwork type to actually be subversive and talk issues in a extremely attention-grabbing method to customers that feels approachable. And so form of these two issues collectively takes that fairly laborious title of Ugly and actually softens it to a approach that individuals discover charming and enjoyable slightly than aggressive and in your face.

Meb: Rolling Stones coming after you guys for the tongue trademark, or what?

Hugh: I imply, if Mick Jagger needs to sue me, he is aware of the place to search out me. I’m the most important fan. So hopefully he’ll give us a break. However plenty of individuals have used tongues in advertising through the years, so I don’t assume we’re the primary, and it’s really the U of the Ugly anyway, so.

Meb: Effectively, you’ve seen a serious development over the previous decade of…you noticed this with 50. I feel ‘ an ideal instance of celebrities, athletes, singer-songwriters, musicians, actors turning into enterprise individuals. And so in some circumstances, it’s simply your capability to market and branding. However in different circumstances, it’s funding. And so half the time on the cap tables now, you see NAS, or Kevin Durant, or George Clooney, or Joe Montana, on and on. And I feel perhaps 20 years in the past, it was a sign in the other way the place you noticed any person like that in cap desk, like, “Oh, god, that is going to be a catastrophe.”

Now, I feel it’s a sign in the other way as a rule that lots of these traders are extraordinarily savvy. And if you happen to have a look at dozens and dozens of examples, they’ve made far more cash in enterprise and investing than they’ve as their precise profession. So, Mick, if you happen to’re listening, let’s get you on the cap desk for Ugly Drinks. You guys can do a collaboration.

Hugh: I’d love that, the dream investor, and my mother may meet him, I feel that’d be the very best factor I may ever give her.

Meb: Excellent. So that you guys had some huge information, proper? You’re beginning to roll out within the U.S. by way of some brick-and-mortar shops. Inform us somewhat bit about it.

Hugh: Yeah, so one of many issues final yr was after we launched a few of these limited-edition flavors that we simply spoke about, a few of them offered so shortly we had huge retailers beginning to attain out for a few of them. So a type of was CVS was one of many first retailers. We really launched into 6,500 CVS shops final week right here within the U.S. So you will discover us just about in each CVS within the nation. We’ve a retailer locator on our web site, if anybody’s listening and desires to test it out and it’ll inform you your nearest retailer stocking Ugly. And it’s the primary stage for us when it comes to actually taking these merchandise that we’ve been refining and honing with our group to mainstream retail, which is all the time the purpose.

As a result of as you’ll have heard, the mission we began with was to actually tackle soda and provides individuals a wholesome different. And one of the simplest ways to try this is to be out there and to be available in shops the place common Individuals and other people incomes their hard-earned cash store. And that’s why CVS was one of many first to come back to us. However now we’re starting to actually roll out past that. We’ve launched one other 4,000 shops within the subsequent month. And also you hopefully will begin to see Ugly popping up in a retailer close to you as we increase over the following couple of years with extra flavors, extra merchandise, extra codecs.

However actually now having constructed our core base of customers on-line, we’ve bought the suggestions, we refined the packaging, we refined the liquids, we discovered, we talked to them. After which the large retailers have come to us, in CVS’s case, and mentioned, “We wish to put you in an enormous chunk of our shops out the gate.” And really honored to be in that place the place most individuals in all probability stay, I don’t know, inside half-hour driving of a CVS retailer. So anybody who needs to present us a go can go and discover it. And that feels fairly cool, to be sincere, coming from the place we’ve come from.

Meb: We bought one straight throughout the road from my workplace, I’ll take an image and offer you a shout out, see what flavors they bought. So what’s the composition appear like for you guys? I imply, is it…and I’m positive it’s modified over time however so far as direct-to-consumer, so far as retails, kind of, third celebration, how’s that, kind of, pie look? Is there a choice? I think about direct-to-consumer has the best margins however not as a lot attain. What’s it appear like?

Hugh: Yeah, so clearly final 12 months has been a bit warped with coronavirus, that means lots of people are at residence and shopping for on-line. So we had a extremely sturdy yr with our B2C and Amazon enterprise. They each, the U.Ok. and the U.S. each grew over 500% yr on yr final yr, a lot sooner than we have been anticipating to develop. And now we’re seeing retail actually begin to recuperate. Predominantly, we’ll be about 80% of our enterprise might be retail this yr. E-com could be very sturdy for us. We’ve accomplished lots of work on that. However the scale of retail, significantly on this nation, is so huge that the variety of accounts, variety of circumstances you’ll be able to promote by way of that channel is important.

So we’re all about availability, we’re actually omnichannel, individuals uncover merchandise in plenty of other ways. I’m positive, Meb your self, I imply, you’ve in all probability purchased merchandise on Amazon on DTC and in retail within the final couple of months. And customers aren’t any totally different. So for us, our enterprise technique is consumer-centric. The place a client is discovering merchandise, is it once they’re watching TV and scrolling on Instagram? Is it once they’re on Amazon in search of one thing, or is it once they’re within the native grocery retailer?

And finally, we got here to the conclusion that each one these channels are interlinked. As you probably did, you found us on Amazon after which transfer to DTC. Some individuals will uncover us on DTC and discover us in CVS, and vice versa. So we’re making an attempt to verify we’re accessible, very similar to a can of soda. In order that at that time of thirst, whether or not that’s at residence or out and about, we’re out there as an alternative choice to soda at the same value level. In order that’s form of what actually drives us.

Meb: You talked about final yr, what was that like? I imagined provide chain disruptions, you talked about you’ll be able to’t return throughout the pond, what’s the final yr been like for you guys?

Hugh: It’s been very robust because it has been for a lot of small companies internationally. And I feel on the time, there have been so many unknowns. And it’s simple to look again at hindsight now having ridden out the storm and have a distinct perspective on it. However on the time, we didn’t actually know what was taking place, proper. And in March final yr, there was virtually a wave of stories, I feel I keep in mind on the time, it was going to be 4 weeks, it’s going to be six weeks, after which we’ll transfer on. And really shortly, I feel I spotted as CEO that this was going to be not less than a 12-month problem that’s going to have an effect on us internationally, our group instantly went totally distant.

And at the moment, you’re worrying about individuals’s well being, not solely our personal group however the well being of society as nicely. And ensuring that we’re doing the fitting factor to guard everyone, not solely our personal staff however everybody. So instantly, you’re in emergency mode, making an attempt to guard everyone, then you definately begin worrying about your enterprise. We’re a giant enterprise in foodservice, we offered lots of product in workplaces internationally. And a few of these channels are solely simply starting to put orders once more as a result of the workplaces have been empty for 18 months. And so we needed to react, we in a short time realized direct-to-consumer goes to be huge for us. However we didn’t wish to ram adverts down individuals’s throats while they have been panicking a few international pandemic. And so we’ve tried to be wise, tasteful, shield our group.

And we’ve additionally had plenty of different societal points come to the fore this yr which have been conversations inside our group the place we’re making an attempt to study and be higher. You recognize, clearly, what’s form of gone on with Black Lives Matter during the last 12 months has been a giant space for us to verify we’re doing the fitting issues there. Range of workers and genders internally continues to be a giant factor for us. And so we’re all the time studying, all the time progressing with a global group. We had individuals in numerous positions elsewhere the entire time. We had some staff in states within the U.S. the place coronavirus was handled very in a different way to another cities and large city areas. So at totally different phases, we’ve had individuals in numerous positions.

And as CEO, I’ve needed to react and study and perceive {that a} blanket message wasn’t essentially proper on a regular basis and ensuring everybody was protected and reacting to their environments. And understanding how everyone was has been an actual studying curve for me as a pacesetter. However I’m pleased with how our group caught collectively by way of all the pieces. And hopefully now, contact wooden, popping out the opposite facet as a society, proper, with the rollout of vaccines and issues like that.

Meb: Yeah, the ESG angle, you understand, it’s attention-grabbing, we’re speaking about firms, but additionally their merchandise. You guys definitely have a serious societal profit to the extent that individuals begin substituting soda for drinks. Do you ever get any pushback in regards to the angle from individuals…and like, I’d in all probability be the use case right here the place you’re like, hey, rapidly I’m consuming 5 of those a day. So far as aluminum cans, is {that a} consideration about environmental affect recycling?

I do know aluminum tends to be one of many…and this jogs my memory, once I was a child, my dad used to ship me out the storage and we had like a sledgehammer, and it was my favourite factor to do, and I’d crush all of the cans. I imply, his have been in all probability Coors Mild or Coors Banquet beers, we have been in Colorado, and take to the recycle machine. It was a lot enjoyable to place it and it was like this huge, large transformer-looking factor. And I’d get, I don’t know, $2 again or 50 cents again or one thing. What do you say, do you ever get these considerations? Or is it one thing that’s ever talked about?

Hugh: Yeah, no, I imply atmosphere is an enormous a part of one of many causes we’re in aluminum cans within the first place. I imply, there’s no single-use plastic in our U.S. provide chain. We made an enormous effort to keep away from that. Aluminum cans are infinitely recyclable. So you’ll be able to repurpose a can an infinite variety of instances. The extraction course of out of the earth, it undoubtedly must be improved. And I do know lots of the aluminum firms now are taking a look at, form of, carbon-neutral aluminum extraction. However on the whole, it’s very simple to move. It’s very space-effective relating to transportation. Aluminum retains merchandise recent for, in our case, 18 to 24 months, there’s no UV mild moving into the product, there’s no oxygen moving into the product.

So when it comes to, form of, retaining issues recent for an extended time frame, and one thing that’s totally recyclable and portable, aluminum is an incredible format, wonderful product format. I feel the factor that’s being dated about aluminum is the liquids inside. And that’s really the most important subject. And so that you’ll see aluminum water manufacturers now as a substitute of plastic bottles, which is a large subject. And so for us, it’s a step in the fitting route. There are all the time issues to be improved. If we are able to swap somebody consuming a plastic bottle of water or a plastic bottle of soda for an aluminum can and pop it in recycling, and that’s an enchancment.

Meb: Yeah, I definitely was a La Croix man earlier than I turned an Ugly man. However I’ve efficiently transformed about half a dozen co-workers and members of the family, they arrive over and often take a pair to go once they’re leaving. And so they’re nice with cocktails, by the way in which, it is a little secret, like, angle for you guys that you might begin. I used to be chatting…we simply did a podcast with a buddy who has a boutique gin distillery in Mississippi, and it’s really made with rice. However versus utilizing one in all these extraordinarily sugary tonics, and many others., you’ll be able to give you all kinds of cool flavors with Ugly. You guys going to start out getting them into bars and eating places too?

Hugh: There are such a lot of utilization events for seltzer. I imply, if you would like a zero-calorie cocktail mixer, it’s excellent. And yeah, you’ll be able to combine it with somewhat little bit of fruit juice if you happen to needed, you’ll be able to combine it with just about something you need. We’ve made a bunch of mocktails too if you happen to’re not consuming. And lots of people once they’re out in bars or at barbecues they usually don’t wish to drink for no matter motive, chuck a number of circumstances of Ugly within the cooler and nobody is aware of that you simply’re not consuming a beer, they usually’re form of plenty of flavors, plenty of refreshment as a substitute of consuming a bunch of lagers and even going beer then seltzer retains you straight. So yeah, it’s nice in all kinds of events. We noticed a bunch of individuals consuming over this July 4th weekend at barbecues and issues like that.

Meb: We had it at our cooler on the seashore, our annual brouhaha on the ocean. All proper, so that you guys are clearly firing on all cylinders. It’s been an ideal development story thus far. What are the plans now? I think about it is a very capital-intensive enterprise. Are you continue to maxing out your bank cards, you guys seeking to do extra funding? How’s that work?

Hugh: Yeah, and clearly, plenty of my private bank cards have been maxed out over time. However I feel we’ve advanced from that place now. We’re really actively elevating a Collection A funding spherical proper now to actually develop this enterprise to the following stage. We’re in 15,000 shops globally now, we’ve emblems all over the world to increase this as we develop. And yeah, you’ll be able to see final week launching into 6,500 CVS form of shops is only the start for us when it comes to the retail rollout, the variety of flavors we’ll be producing over the following 12 months, and studying with customers extra.

So it’s nearly enlargement now for us, we’ve all of the methods and provide chains, the group in place to develop this. And so fueled with the fitting companions and capital, there’s no motive we are able to’t actually chip away at that $90 billion soda business. There’s a lot area to go after. In order that’s form of the place we’re at proper now.

Meb: Good. Please CC me in your increase so I can squeeze in on the cap desk. I promise I would be the smallest entry. However client product VCs which might be listening, you guys can hit up Hugh on Twitter and elsewhere. You recognize what, each time I take into consideration you guys, you’re not going to know this, I’m assuming, however a few of our older listeners will. There was a film, I feel it was “Wildcats,” which is an previous Goldie Hawn film from the ’80s. However that they had a cheerleading scene, and also you guys can google this, they usually do a “you’re ugly” chant. They are saying, “U-G-L-Y, you ain’t bought no alibi, you ugly.” And so they’re simply speaking junk to the opposite group. The film I keep in mind being pleasantly common, however that chant caught in my head. So once more, there’s one other co-branding.

Hugh: May be my new ringtone.

Meb: Yeah. It’s so good. It’s undoubtedly on YouTube. All proper, so fundraising, what’s the horizon appear like for you guys? What would that capital be used for? What are different belongings you guys bought caught up your sleeve as you look to the long run? Is it merely development and moving into new channels? Or do you guys have another concepts you’re cooking up within the kitchen?

Hugh: Yeah, so we’ll be constructing our group out. As we increase, we’ll be launching in plenty of totally different areas across the nation. We launched in Los Angeles final month, we’re launching in Portland this month. So each time we launch in a brand new market, we wish to be hiring a group that may be on the market introducing prospects and customers to Ugly. And so each time we do this, we’re actually supporting the group to make it work. We have to put money into advertising too. I imply the model’s in an ideal place with this checklist of artistic concepts internally that’s longer than a CVS receipt.

We’ve so many various ideas and totally different concepts that individuals are going to like, whether or not it’s content material, advertising concepts, new flavors. However for us, it’s actually about driving the core enterprise into extra retailers and making this as accessible as doable. Whether or not it’s the large grocery shops or comfort shops and even new markets, we’re going to try to make Ugly as extreme and as ubiquitous as something we are able to. And that’s form of actually the place we’re going to be spending the capital alongside constructing the group to assist us to try this.

Meb: So we’ll wind down with a pair extra questions. What’s been a few of the weirdest taste requests you guys have had? I imply, butterscotch is up there, however is there some the place you’re like, A, that’s so bizarre we’ve to make it, or B, that’s so bizarre, disgusting we may by no means ever make that?

Hugh: We’ve had peanut butter and jelly, Nashville scorching hen, cheese pizza. I did really recommend we attempt to do, nevertheless it’s not an ideal expertise.

Meb: Oh, my God.

Hugh: The checklist goes on. I imply, something you’ll be able to think about. I’ve even tasted a rain taste. You recognize that when water hits scorching tarmac in the summertime, any person created that taste for us, a taste home. And it was attention-grabbing, I’m unsure we’d promote 1,000,000 circumstances of it. However yeah, there’s a lot pleasure and suppleness with it. However we’ve had all kinds of stuff are available in. And customarily, I’m like a giant baby so I’m additionally on the identical web page of I’m wondering what pizza-flavored water tastes like. So there’s nothing too loopy for us to truly take a look at out.

Meb: You simply bought to get the fitting pizza, you understand, Hawaiian pizza perhaps, or sausage and mushrooms, or fried egg on prime. Listeners, hit you up Hugh on Twitter together with your solutions. He mentioned he’ll ship you a free case in the event that they use your suggestion. He mentioned he guarantees.

Hugh: Yeah. Maintain me to that, you’ll be able to maintain me to that.

Meb: What’s been essentially the most memorable a part of this journey? It may very well be good. It may very well be unhealthy. It may very well be in between. Is there something that’s like seared in your mind as one thing that you simply look again and also you’re like, that was a giant one?

Hugh: I imply, for me, each time I’ve ever walked on the road in New York or London and seen somebody consuming a can, or seeing a can within the rubbish, within the litter, it blows my thoughts. Particularly if you’re simply someplace the place you don’t count on to see it. I usually will cease the individual on the street and ask them how they discovered the model. And that’s all the time, to me, what blows my thoughts essentially the most is if you see it within the trash or somebody consuming it on the road. And each time I ever see that, I don’t assume it’ll ever get previous. And I do know that’s not some loopy expertise. However for me, when somebody spent their hard-earned cash on a product we created in a bed room in London, it’s prefer it’s fairly insane. So for me, that’s all the time the factor. And hopefully, there’s extra of these come.

Meb: I imply, you guys even have the potential to have little Ugly gear, hats, shirts.

Hugh: It’s coming.

Meb: I’d put on one. Ship me a hat if you guys make one. All proper, Hugh, this has been tremendous enjoyable. If individuals wish to purchase some drinks, in the event that they wish to observe together with what y’all are as much as, what’s the very best locations to go?

Hugh: So if you happen to go to uglydrinks.com, we’ve created a particular code for listeners. So it’s UGLYMEB, all in caps, U-G-L-Y-M-E-B, that offers you 20% off if you happen to’re within the UK or the U.S. on all the pieces. You’ll be able to observe us on Instagram, Twitter, Ugly Drinks, we’re on TikTok as nicely, Ugly Drinks. And you’ll observe me, I’m UglyHugh just about all over the place on the web. So if anyone needs to achieve out you will discover me on Twitter, LinkedIn, Instagram, drop me a DM, I’d love to listen to from individuals. I all the time try to reply to all the pieces that is available in. So we’d love to listen to from you. And when you’ve got any questions, the group at HelloUglyDrinks is all the time keen to assist or can level you in the fitting route for our enterprise as nicely.

Meb: Hugh, it’s been a blast. Thanks a lot for becoming a member of us as we speak.

Hugh: In fact. Thanks for having me.

Meb: Podcast listeners, we’ll put up present notes to as we speak’s dialog at mebfaber.com/podcast. In the event you love the present, if you happen to hate it, shoot us suggestions at suggestions@themebfabershow.com. We like to learn the evaluations, please evaluation us on iTunes and subscribe to the present wherever good podcasts are discovered. Thanks for listening, mates, and good investing.


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