Creating unique but not too unique beverages

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[00:00] SPEAKER_00: Welcome to Canada's Entrepreneur, where we talk to the entrepreneurs who are making it happen
[00:05] SPEAKER_00: across Canada and deliver the news, trends, knowledge and opinions from entrepreneurs and business
[00:13] SPEAKER_01: influences across the country. Hello, I'm Mario Tonogusi, managing editor of Canada's Entrepreneur,
[00:21] SPEAKER_01: joining me today on Calgary's podcast is Johnny Erisman, who is co-founder and director of brand
[00:27] SPEAKER_01: for Gradient Beverages. Thanks, John, for joining us today. Yeah, thanks so much for having me.
[00:33] SPEAKER_01: Okay, let's talk a little bit about the company. Tell me what it is that you folks do.
[00:40] SPEAKER_02: So Gradient Beverages, we produce a line of different ready-to-drink beverages, so
[00:45] SPEAKER_02: term as an RTD. So think like white claws, cocktails and a can, that kind of thing.
[00:54] SPEAKER_02: And how, and they're all alcoholic? We actually do a range, so we've got some alcoholic ones,
[01:00] SPEAKER_02: we do non-alcoholic, we produce products for ourselves and we also do cold backing for other brands,
[01:06] SPEAKER_02: some that are already out there making their products and just want some support with the ready-to-drink
[01:13] SPEAKER_02: space, so some breweries come to us and want to have a ready-to-drink. And then some people
[01:19] SPEAKER_02: that just have a dream, they want to launch a new product that will come to us, we offer
[01:25] SPEAKER_02: lower minimum runs, so it's a good place for them to test the waters. I see. So when was
[01:34] SPEAKER_02: the company founded and started? So we started in 2020, basically started with an idea,
[01:42] SPEAKER_02: so it's a family business, it's my sister, her husband and myself, an idea that we had at a
[01:47] SPEAKER_02: Christmas party, so we were drinking together and we were like, hey, we should start a drink company.
[01:54] SPEAKER_01: And what exactly, I'm just curious, especially a lot of the kind of smaller
[02:03] SPEAKER_01: whatever distilleries or whatever you want to call them out there in breweries,
[02:07] SPEAKER_01: what is it that you have in place and like, where is this stuff made?
[02:12] SPEAKER_02: Yeah, we've got a facility in Southeast County, we're what you'd call a mixing and canning
[02:18] SPEAKER_02: facility, so we don't actually do any distilling, we bring in all of the alcohol from different sources.
[02:26] SPEAKER_02: Basically, that's like a fire code thing, but it allows us to be really focused on the mixing,
[02:33] SPEAKER_02: so coming up with great recipes, and then we've got a really good cannyline, it's called a
[02:38] SPEAKER_02: counter pressure cannyline, which allows us to do a really dialed in carbonation, and we can
[02:44] SPEAKER_02: also do nitro infused drinks, so uncarbonated drinks as well. So where do the, I guess,
[02:55] SPEAKER_01: what we call recipes, I guess, come for these drinks, how do you come about?
[03:00] SPEAKER_02: Yeah, we've been learning along the way. We learned that there's actually people that you can
[03:07] SPEAKER_02: ask to develop recipes for you. We don't really know that going in, so my brother-in-law, Josh,
[03:16] SPEAKER_02: he's a geologist by trade, but really just a scientist by nature, and developed a recipe, so he
[03:24] SPEAKER_02: figures out how to scale up from just something we would do as a little bench test to something that's
[03:31] SPEAKER_02: shelf stable with preservatives, and he's been learning along the way and won a lot of awards
[03:38] SPEAKER_01: while doing it, so he's doing great. And in terms of the distribution, where is
[03:46] SPEAKER_02: where are your beverages sold? We're in Alberta, BC, Saskatchewan, and we're working on Manitoba as well.
[03:57] SPEAKER_02: We've got some different product lines that are focused on different channels, and
[04:02] SPEAKER_02: that was a big part of our learnings, is like coming up, having a niche that is specific enough
[04:08] SPEAKER_02: that we can drive sales, so early days we found that just selling to a liquor store wasn't enough,
[04:16] SPEAKER_02: so we introduced a product line called Sunday Session, which is focused on golf courses,
[04:21] SPEAKER_02: and there's nowhere else in the world that's better to sell a beverage to than a golf course.
[04:27] SPEAKER_02: Usually people are drinking three or four drinks around,
[04:31] SPEAKER_02: free sampling, and just being able to get people to try the product without having to set up a
[04:37] SPEAKER_02: tasting booth in a liquor store and hope to hit like 20 people. Yeah, yeah, no, that's cool.
[04:44] SPEAKER_01: So what were you doing before you got into doing this?
[04:49] SPEAKER_02: I was in advertising, so I've been advertising since 2010 as a copywriter, so I've had a bunch
[04:58] SPEAKER_02: of different beer and alcohol brands that I've worked with over the years, so I kind of got like
[05:04] SPEAKER_02: a taste of the space and also got a taste of the things that they wouldn't do, and so being like
[05:13] SPEAKER_02: kind of a salty creative and thinking, oh, I can do this better, so now I've actually
[05:18] SPEAKER_02: like trying to do it better and learned all of the reasons why they would say no to things
[05:23] SPEAKER_02: along the way, so it's been a good learning lesson. Yeah. Yeah, so when you
[05:32] SPEAKER_01: you folks started the business up, what was the biggest challenge in starting up a business?
[05:41] SPEAKER_02: I mean, our first product that we had, and the reason we call our company gradient,
[05:48] SPEAKER_02: the idea was that we would have these gradually reducing alcohol mix packs,
[05:53] SPEAKER_02: so you'd buy a six pack of ready-to-drinks, and there would be less and less alcohol
[05:59] SPEAKER_02: percent in each can, so you'd get an 8%, a 7%, a 6%, a 4%, 3%, and 2%, so the idea behind that
[06:08] SPEAKER_02: was that you could start strong, get kind of a good buzz going, and then gradually reduce,
[06:14] SPEAKER_02: so you'd maintain that good feeling without going overboard, or kind of tagline on that,
[06:21] SPEAKER_02: was get silly not sloppy, and that was right off the bat. Sounds like a cool idea.
[06:30] SPEAKER_02: Me explaining it, like hopefully that makes sense to you, but as a product on the shelf,
[06:35] SPEAKER_02: that's really a complicated product to explain to somebody without me standing next to it and
[06:40] SPEAKER_02: explaining it, so as a product didn't quite work, as a production, as something that you'd actually
[06:47] SPEAKER_02: produce, extremely complicated, we had three different flavors that we wanted to do, so we had a
[06:53] SPEAKER_02: Raspberry Lemon, we had Align and a cucumber mint, so that's 18 different SKUs, like 18 different
[06:59] SPEAKER_02: canyline, cany runs, in order to just make that first run. So we overcame that, where basically
[07:08] SPEAKER_02: no brewery and no cany facility would give us the time of day to do that, they're like, we're not
[07:14] SPEAKER_02: going to give you a quarter of our year on this untested thing to produce all this product for you,
[07:19] SPEAKER_02: so we decided to build our own facility, that would allow us to do it because we were convinced
[07:25] SPEAKER_02: that this product was going to change the world, but all of the lessons that we had to learn after
[07:33] SPEAKER_02: that, where how hard it is for distribution, how complicated of a story it is, so really the lessons
[07:42] SPEAKER_02: that we learned were, with that one, not to have too crazy, not too unique of a product,
[07:49] SPEAKER_02: that it's complicated for people to understand, but we did have some really success where
[07:55] SPEAKER_02: people would give us a shot to get it on shelf because it was unique, the beverage space is so
[08:04] SPEAKER_02: saturated, and you have to come into it with a unique idea, otherwise,
[08:09] SPEAKER_02: ires are just going to say, well, what's different about this from a white claw or twisted tea,
[08:15] SPEAKER_02: and you have to have something unique, but it can't be so unique that people don't get it,
[08:20] SPEAKER_02: so finding that balance, finding the niche was something that we had to learn over time.
[08:26] SPEAKER_01: Interesting, yeah. When you look at running a company out of a Calgary and in Alberta,
[08:37] SPEAKER_01: what benefits are there of being a business in this province in this city?
[08:46] SPEAKER_02: Well, Alberta is, they call it the Wild West for a lot of things, and it's the Wild West for
[08:52] SPEAKER_02: the beverage industry as well. There's not any rules or provincial bodies that have to approve
[09:00] SPEAKER_02: an alcohol product to get into the liquor, into what's called liquor connect.
[09:07] SPEAKER_02: So it's basically the distribution channel where all the liquor stores buy from.
[09:11] SPEAKER_02: If you're going to go into BC Saskatchewan, Ontario, you have to basically be approved by the head
[09:19] SPEAKER_02: buyer in the province in order for your product to even show up on shelves at liquor stores.
[09:26] SPEAKER_02: So here, anybody can launch an idea, and anybody from around the world can launch an idea here.
[09:32] SPEAKER_02: So it's great because you don't have to get over that first hurdle of getting approval,
[09:38] SPEAKER_02: but then you're up against everybody. So you've really got to stand out. So it's interesting,
[09:45] SPEAKER_02: you've got a shop right off the bat. You can pitch an idea, but then you have to make it work.
[09:52] SPEAKER_01: Now, tell me, if you've seen the benefits, I guess, of the buy local, buy Canadian movement that
[10:02] SPEAKER_01: we're seeing all over the place in the country these days.
[10:09] SPEAKER_02: I think so. This year has been better than most in the previous years. So
[10:16] SPEAKER_02: hard to say if that's just us figuring our stuff out or if it's just the timing of things, but
[10:23] SPEAKER_02: there's a lot of times when I go into a tasting and people's first question is where is this from?
[10:31] SPEAKER_02: And it's basically like, it seems like a mental check that people have to do. It's like, oh,
[10:35] SPEAKER_02: it's Calgary. Even I was at a tasting in BC. And in past years, it's been maybe a little bit
[10:44] SPEAKER_02: of a provincial thing where people are hoping that that local check would come from like a local
[10:49] SPEAKER_02: producer to the province. But now it seems like people are just local to Canada. Has that just
[10:55] SPEAKER_02: first thing to be like, okay, good. And it opens people's, it opens them up to be a little bit more
[11:01] SPEAKER_01: receptive to the idea, I think. Now, I'm curious also about consumers these days. Do you find that
[11:11] SPEAKER_01: there's, you know, I know when when even stats Canada puts out its numbers at all the time about
[11:20] SPEAKER_01: alcohol consumption, you know, beer is always number one up there. But are you finding that
[11:26] SPEAKER_01: more and more people are drinking sort of the spirits and the cocktails these days rather than beer?
[11:38] SPEAKER_02: Yeah, we've seen some studies where the beer is kind of the craft beer movement is kind of
[11:45] SPEAKER_02: going over the hump and starting to go down. And now it's hoping up space for some more premium
[11:52] SPEAKER_02: cocktails. Our entry into that space is our inversion lines. These are little tiny cans that are
[12:02] SPEAKER_02: full strength cocktails. We wanted to, basically people are wanting to drink less but better
[12:10] SPEAKER_02: is what the studies are showing. So instead of drinking drinks where it's just a bunch of like
[12:17] SPEAKER_02: 5% cocktails, the kind of tastes like something they want a full flavor drink, full alcohol strength
[12:25] SPEAKER_02: drink that is like what they would get at a bar. So with this drink, we've basically no
[12:31] SPEAKER_02: compromise. It's a nitrogen infused. You actually, it's a shaken cocktail. So this is a shaken
[12:37] SPEAKER_02: elderflower gin chap, gin sour. You actually shake the can hard. This infuses nitrogen gas into
[12:44] SPEAKER_02: the liquid. You crack it gently and pour it straight down into a cocktail glass. And this gives you
[12:49] SPEAKER_02: that texture and that foam of a shaken cocktail that you'd expect from a bar. So with that what we're
[12:57] SPEAKER_02: trying to do is give people a proper cocktail experience like they would get at a bar but make it
[13:03] SPEAKER_02: more cost friendly. There is a lot of issues right now. People are watching their wallet a little
[13:12] SPEAKER_02: bit more closely. So we've the bar and spending $20 on one cocktail is okay. But when you have two
[13:19] SPEAKER_02: or three, then you're looking at like an $80 bill. With this, we're selling these four packs and
[13:25] SPEAKER_02: it's about $20 and you get four full strength cocktails. So we're trying to kind of find a space
[13:31] SPEAKER_02: where people want to drink better. Have these experiences where they're not necessarily binge drinking
[13:37] SPEAKER_02: but they're just having like a fun cocktail with friends, having that like having the experience
[13:43] SPEAKER_02: that they're looking for. But without having to go to a bar every time. Yeah, I mean, interesting.
[13:49] SPEAKER_01: What advice would you give an aspiring entrepreneur?
[13:56] SPEAKER_02: I would say have a team of people that have different strengths than yourself. I think that if I
[14:06] SPEAKER_02: like I'm kind of the marketing side of things, my sister is the finance and the compliance. So she
[14:12] SPEAKER_02: handles all of the AGLC, all the liquor laws, all the yeah, that stuff. Josh does all of the production,
[14:18] SPEAKER_02: recipe development. And it's great because we stay out of each other's way to an extent.
[14:25] SPEAKER_02: But we also trust each other to make sure that we've got our bases covered and that we can focus
[14:32] SPEAKER_02: on our ends of it. I would say if we could have another person, it would be have somebody who's
[14:38] SPEAKER_02: great at sales. If we had a fourth person, have a salesperson who likes to hit the streets and
[14:43] SPEAKER_02: get out there and do that. Like a four person team would have made our team so much better.
[14:50] SPEAKER_02: Basically, we've had to kind of outsource that working with agencies to help with outside of things.
[14:57] SPEAKER_02: And with launching a product, I would say make sure that it's unique, but not too unique.
[15:03] SPEAKER_02: As I was mentioning before, if you can have a niche where it's like very specific to a group of
[15:08] SPEAKER_02: people that will buy a lot of it, that's great. Focus on that channel.
[15:15] SPEAKER_02: And yeah, if you can see into the future a little bit of like, what's not what's the product that's
[15:20] SPEAKER_02: going to be popular in five years, but what's the product that's going to be popular in two years?
[15:25] SPEAKER_01: You know, you're the way to do it. Yeah, interesting. What do you do, John, to kind of relax,
[15:32] SPEAKER_01: away from the business? What kind of interest are they have?
[15:39] SPEAKER_02: I've got a three-year-old son. So he takes up a lot of my time. Just play In Spider-Man,
[15:47] SPEAKER_02: and my wife and his dad go into the park or go into the pool. That's pretty much the three-time yet.
[15:53] SPEAKER_01: Is it tough? Is it tough juggling the two like being a small business?
[15:59] SPEAKER_02: Yeah, that might actually be another piece of advice that I would say is that if you're young,
[16:04] SPEAKER_02: that would be the time to like, before you have kids and a family, like that would be the time to
[16:10] SPEAKER_02: launch business. Yeah, my son was born basically, I don't know, I'd say maybe a couple months before
[16:20] SPEAKER_02: our first production run was done. And it was like a lot of sleepless nights and a lot of,
[16:26] SPEAKER_02: there was a lot of learnings. I had to learn how to be a dad and learn how to be a beverage
[16:31] SPEAKER_02: company, salesman at the same time. So maybe try to time your life help better than I did, but
[16:38] SPEAKER_01: you do what you can. I'm just curious. Have you ever been in a place just on your own and
[16:49] SPEAKER_01: seen somebody pick up one of your products? And if you have a just curious feeling that you got
[16:57] SPEAKER_02: when you saw that first time? Yeah, I mean, yeah, I was at a liquor store last summer.
[17:05] SPEAKER_02: And there was actually a person that came in and asked the teller where the product was.
[17:13] SPEAKER_02: And I didn't even know that our product was available in that store. I was actually pitching,
[17:16] SPEAKER_02: so we've got different lines and I was pitching a different one. And it was a crazy feeling.
[17:21] SPEAKER_02: I didn't know if I should act like it was my product or if I should then be like proud of it or
[17:29] SPEAKER_02: just be like, oh, hey, how'd you find out about this? I'm another customer. So I didn't know how to
[17:34] SPEAKER_02: act, but it was a great feeling. And I definitely told Trish and Josh about it. I have to over.
[17:40] SPEAKER_02: Yeah, it's nice when you start to get some steam and people start to discover it.
[17:46] SPEAKER_02: Then after that, it's yeah, how do you get more people kind of doing that? So yeah,
[17:51] SPEAKER_01: it's so well, thanks so much, John, for joining us today. Yeah, thank you so much. I really appreciate
[17:57] SPEAKER_01: the time. Okay, that was John Erasmen, who is co-founder and director of brand for gradient
[18:03] SPEAKER_01: beverages and Calgary. I'm Mario Tonoguzi, managing editor of Canada's Entrepreneur. Thanks for
[18:09] SPEAKER_01: joining us today.