Where gut health meets hypergrowth with Ben Goodwin from Olipop

18 Mar 2024 (8 months ago)
Where gut health meets hypergrowth with Ben Goodwin from Olipop

Introduction and two truths and a lie (0s)

  • Becca and Dom introduce the podcast and discuss their favorite types of soda.
  • Dom doesn't drink soda regularly, but enjoys it occasionally when he goes back home to Florida.
  • Becca mentions that they will be speaking with Ben Goodwin from Olipop, a company that produces a gut-healthy, low-sugar, high-fiber soda.
  • They play a game of two truths and a lie, with the options being:
    • Ben started in the kombucha business.
    • Olipop's revenue last year was $150 million.
    • Ben is the CEO and still in charge of creating all the Olipop flavors.

Olipop introduction (2m12s)

  • Olipop is a new type of soda, the first major innovation in the soda category since diet soda in the 1980s.
  • It is called a functional soda with 2 to 5 g of sugar per can compared to over 40 g in traditional soda.
  • Olipop contains 9 g of soluble fiber per can.
  • It tastes like regular soda but provides health benefits supported by research from Purdue and other leading universities.
  • Ben Goodwin, the founder of Olipop, dropped out of college at 20 to start a kombucha company.
  • He was attracted to the health and wellness industry due to his own childhood journey of being overweight and anxious.
  • At 14, he changed his diet and approach to health, which positively impacted his emotional and cognitive functioning.
  • This led him to learn about the microbiome and the brain-gut axis, inspiring him to create Olipop.
  • Olipop aims to make empirically validated ingredients and nutritional strategies accessible to as many people as possible.

Researching the microbiome (5m42s)

  • Olipop's nutritional strategy is based on research showing that fiber, prebiotics, and nutritional diversity benefit the microbiome.
  • The company conducted its own independent research, focusing on the viability of probiotics and identifying key factors in non-industrialized diets that are missing from industrialized diets.
  • Olipop established a Scientific Advisory Board with experts in the microbiome field to guide their research and ensure scientific credibility.
  • The company published a mechanism of action white paper with 152 citations supporting their product's nutritional strategy.
  • Olipop's research confirmed that their product ferments beneficial short-chain fatty acids, leading to an invitation to the White House Hunger Nutrition Summit and opportunities for insurance reimbursement networks.
  • Olipop is now a reimbursable product for about 25 million Americans through Medicare and Medicare Advantage, increasing accessibility to their premium product.

The industrial diet in America (11m34s)

  • The industrial diet is the post World War II Western diet.
  • Advances in hybridization, petrochemical, and food additive technologies during World War II have led to:
    • Drastically decreased micronutrient concentration in the soil and food, including fiber.
    • Increased natural and artificial flavors, colors, and preservatives.
  • This combination sends a message to the brain that it should be getting critical micronutrients, but they are absent from the underlying food, leading to nutritional depletion and an overabundance of calories.
  • The industrial diet contributes to the high prevalence of type 2 diabetes and digestive distress in the US, with significant emotional, physiological, social, and economic implications.

Transitioning from research to product development (15m3s)

  • Most entrepreneurs commercialize research immediately without implementing scientific scrutiny.
  • Olipop's approach involves combining research with commercialization to ensure a quick turnaround of research-informed products.
  • Brands and flavor profiles can create powerful emotional relationships with consumers, making behavior change challenging.
  • To encourage mass adoption of healthier products, companies must make it as easy as possible for consumers to transition.

Product nostalgia and marketing (17m49s)

  • Nostalgia is a key factor in getting people to make healthier alternatives.
  • Olipop's watermelon lime flavor is an example of how they incorporate nostalgia into their products.
  • The nostalgic anchor is the starting point for flavor development, and then the flavor is evolved to be ownable and push the category forward.
  • Soda has deep resonance for customers because it was there for them during core developmental memories.
  • Olipop is trying to speak to soda's place and its own place as a part of people's social and familial experiences.

Market share in the beverage industry (20m29s)

  • Olipop's founder, Ben Goodwin, believes in focusing on the quality of their product rather than worrying about competition.
  • Olipop's product has multiple reasons for entry, including great taste, fun packaging, compelling nutrition facts, and a nostalgic feel.
  • Goodwin believes that many new innovations in the beverage market have flaws that will prevent them from scaling successfully.
  • Goodwin cannot comment on whether the big soda industry has approached Olipop to copy their product or buy them out.
  • However, he acknowledges that Olipop's disruption in the market has likely caught the attention of these companies.

Olipop’s 200 million dollar year (23m26s)

  • Olipop grew from $74 million to $200 million in revenue in one year.
  • This growth was achieved in less than 30,000 retail doors, which is unusual for a company of its size.
  • Increased shelf expansion, successful marketing strategies, new flavors, and increased organic demand contributed to this growth.

Targeting food deserts (25m44s)

  • Olipop plans to address food deserts by expanding into small format stores and convenience stores, which are often found in these areas.
  • Partnering with insurance offerings and local organizations focused on hunger and nutrition can also increase accessibility for low-income communities.

Time management as CEO (27m36s)

  • Goodwin still manages new flavor creation despite his leadership role.
  • He enjoys the creative outlet and direct customer connection that formulation provides.
  • Goodwin recognizes his strengths (vision and leadership) and weaknesses (management) and builds his team accordingly.
  • He emphasizes the importance of continuously adapting to the changing environment to succeed.

Fundraising and pitching investors (31m6s)

  • It's wise to speak to CPG investors when pitching a CPG product as they have different expectations for scale and return dynamics.
  • CPG investors tend to be more methodical and picky, aiming for a higher success rate and a different return on investment.
  • The fundraising process involves considering the length of the runway, what should be accomplished by the end of it, and the timing of the next fundraising cycle.
  • Olipop has been fortunate to have more investor interest than they could accommodate, due to their operating team, product strength, industry experience, and connections.
  • Fundraising decisions have focused on choosing the right investors to work with, structuring governance and board matters, and ensuring adequate differentiation to warrant continued investment.

What’s next (33m32s)

  • Olipop plans to introduce new flavors, including one tied to a fun partnership.
  • They aim to significantly expand their retail presence, potentially doubling the number of stores they are available in.
  • The company will focus on developing their "Real Love Makes Us" platform, sharing stories, and involving customers in the conversation.
  • Ben Goodwin attempted to create a lemon peel serrano pepper flavor inspired by a lemon peel drink he tried in Japan.
  • The carbonation caused bits of pepper to go up into the nose when smelled, resulting in sneezing.
  • Goodwin has since figured out how to address this issue.
  • Goodwin currently has a five-way tie for his favorite Olipop flavors: tropical punch, classic grape, cherry cola, lemon lime, and watermelon lime.
  • These flavors are his go-to choices and are always in his fridge.

Host commentary (36m3s)

  • Olipop, a health-conscious soda brand founded by Ben Goodwin, achieved $200 million in sales, surpassing its initial projection of $150 million.
  • Despite being a relatively new player in the competitive beverage industry, Olipop has secured a notable 10% market penetration in households.
  • Goodwin personally develops all of Olipop's flavors in a lab, demonstrating his hands-on approach to product development.
  • The growing focus on gut health and microbiomes has contributed to the increased demand for products that address digestive issues, aligning with Olipop's offerings.
  • Discussions have emerged regarding the potential deductibility of Olipop for medical purposes, although further clarification is required due to the complexities of working with large medical and insurance entities.
  • Olipop's success is attributed to its appeal to consumers seeking healthier alternatives to traditional sodas, tapping into the nostalgia factor while offering low sugar content and no caffeine.
  • Despite the competitive beverage industry, Olipop has found success and is available at various grocery stores, including Whole Foods.

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