Inside BRĒZ: Brand Growth with Aaron Nosbisch and Dan Gelshteyn

Introduction and Team Growth

0:00big numbers don't scare our team across the board. It's kind of amazing, but really it's just reverse engineering those goals into smaller sprints for our entire team. So, we're so clear on the direction that we're going as a brand and we just want to get there the quickest, most efficient, the most profitable way, risks that we might face and ensuring that we're budgeting for those risks and finding the right people that can solve those problems. like we have the best consultants also helping us out throughout the way to ensure that we get to that result in the least bumpy way possible. We've grown our team in the last quarter from 30 to 50. It's just like a feeling with every person on like exactly what they're going to be doing within the organization. The

Challenges in the Cannabis Industry

0:41hardest part of selling Breeze today is probably the fact that there's THC in it. not because of roadblocks, it's that people have stigma and fears over the idea of cannabis. Think bigger. Like

AI and Innovation in Business

0:50way bigger. Like you guys are some of the smart people in the entire world. Like you have access to superhuman capabilities and some of us are wasting it on dog pillows. No offense, but it's like what are we doing here? We're at the forefront of AI revolution with the most powerful attention engines in human history. What are you going to do with that?

Meet the Founders

1:18How's it going, guys? So, what's been cool? What's been really cool is that high as right now. He's been breezing. Has anybody had any drinks today yet? Okay, I've seen some faces. Anybody have a black lid? Anybody drink black lids yet? I know the iron neck guy did. I think we ran out, but we have six more cases coming, so we'll have a good time later on today. Black lids are potent. Definitely hit those. 10 milligrams. I want to I want to start with who am I talking to and who am I talking to? I'm Aaron Nosfish. I'm the founder and CEO of Breeze and I'm honored to be amongst you guys. I think I know a lot of you and this is like my favorite community. I think you guys know and I just want to give flowers to Nick for a moment because dude, the community that you have brought together in the internet marketing, the internet entrepreneurship world over the last decade is insane.

2:14and I know personally you've added a ton of value to my life and I think I probably speak for most of us. So really, thank you. Thank you, brother. Thank you. And I'm Dan. I'm the CEO at Drink Breeze. I'm honored to be here, too. So, this is this is where I like to

Building a Strong Team

2:29ask is when you have a founder who's trying to do really, really big things. Where do you find a COO to be able to help implement those things? How did this start? Totally. So I mean we were so I guess it started with I knew that I was going to need someone who was willing to do like most of the CEO job even you know like like my head's really kind of in this big picture how we're going to integrate into culture how we're going to shift culture and how all that's going to work together and it's hard for me to like stay the consistency that I need on the day-to-day. So I knew I needed someone really exceptional that was willing to play not just the traditional COO role but something bigger. Didn't know what that was going to look like. and I had a guy Dan apply and I thought, "Okay, yeah, smart guy. He's really cool, you know, but whatever." But I mean then it persisted to like like

3:15he would just like show up in my hometown and it's like, "Hey, you want to get coffee?" I'm like, "Don't you live in New York?" And he's like, "No, no, I'm here." I was actually in Miami during the time, just for the record. So, so you know, you just was super persistent. And I think like, you know, sometimes it takes something like phenomenal like that for you to know. And that was Dan's persistence. and I knew that that was the the guy and that was definitely the right bet for me. I've been building better for you brands for such a long time and just seeing the impact that both of you guys have been having for so long has been so amazing. I knew I had to be part of this team. But but this is brand new. Like this is not this is [ __ ] that's not this is the thing that makes no sense to me now even being inside this beast is that this hasn't been done before. So why why

3:58are you making it better? You could have gone you literally could have gone anywhere. Like I knew where you else you could have gone and why this. Yeah, but

Scaling and Achievements

4:05you guys achieved already. I joined a year ago and you guys were already at 400,000. Now we're at 4.3 million one year later, but that's still [ __ ] impressive for the speed that you did. No, this is I will I'll bring this up again is like we're fully remote. We're fully distributed. We're selling beverages and we're launching products almost weekly at this point right now. The biggest thing we got so I remember Aaron Aaron came on this is before we went to the overall team. And he goes, "What do we do? First year we're pacing to like 20 million." He's like, "Okay, I think we should do a h 100red million."

4:39And I go, "Yeah, yeah, for sure. We should definitely do that." And then he didn't break smile. Then he just kept it and he's held it. And then I was like, "Fuck, he's actually serious. Like, this is what we have to do." When you get these goals or lawfully areas and then it's like, "Oh, Dan, we need to make this happen. How do we even do this?" Honestly, big numbers don't scare our team across the board. It's kind of amazing. But really, it's just reverse engineering those goals into smaller sprints for our entire team. Also, we're so clear on the direction that we're going as a brand. And we just want to get there the quickest, most efficient, the most profitable way. So, that's it.

5:15Yeah. It's funny because it's like, yeah, I think people think of me as like this like, oh, big vision or we're trying to get these crazy numbers, but like I don't get any resistance from Dan on that at all. Like, I'm like, dude, I think we can get to 100 million. Like, I think it's possible. and and and and then Dan like backs that up with a framework of how it could actually happen. And it he presents it to me in an interesting way. It's very much like it's possible, but we have to do all of these things exactly this way. and I think that's what you really need out of a a second in command, a COO. It's like you need someone who like isn't going to like question you or like like or doubt you is going to say like if it could happen, this is how it would happen. and then create that framework for them to live into. and you do that exceptionally well. I think the part that I don't fully understand is

6:00like the team wasn't really that big.

Product Expansion and Retail Strategy

6:02How did you know and I still struggle with this even building the the small team I have when he says something has to get specifically done this year. Retail is a big push for us. We none of us are major retail guys outside of your juice shop days which is a little bit different. How are you even thinking about who to hire and where to hire? Like how does this process go through you? I think it starts off with the risks that we might face and ensuring that we're budgeting for those risks and finding the right people that can solve those problems. Like we have the best consultants also helping us out throughout the way to ensure that we get to that result in the least bumpy way possible. We've grown our team in the last quarter from 30 to 50. and it's just like a feeling with every person on like exactly what they're going to be doing within the organization. Has there ever been something that you are like, "Yo, we we need to do this." And you're

6:53like, "I don't think that's going to happen at all yet." I Yeah, I don't know any specific You're saying like an idea of like this is what I want to do. And Dan's like, "No, better not." Yeah. I mean, I want to spend a ton of money on events. Stop spending money. I'm like, you know, we just did South by Southwest. Yeah. Tell me about Southby. How did this come to the number? That was crazy. Like, I mean, we invested $150,000 to activate South by Southwest, which is nuts. and we passed out, I think, 35,000 cans, something like that. 30 35,000 cans, which whatever that average is, $5 a can or something like that per person. I don't It's hard to quantify these things, you know? It's like it's Was there a direct return from that? And was it immediately profitable? I don't know.

7:34I mean, like, we're just we're changing culture and giving people new drinks that make them feel better without feeling worse and we're trying to get them to consider that over alcohol or instead of alcohol or instead of So, how do you do that? Like you can run ads to people all day long, but until people are like at an event kind of like we're at now and drinking the products and like realize like, yeah, maybe he's a little buzzed, but he's all right. You know, it's like that that type of like integration that happens in the physicality rather than the digital really ties the whole thing together.

8:00And and so it's also nice because a lot of people already are exposed to the brand before they have the experience of trying it in person. So that's just like a we should talk about that, dude. That so so there's a quote. So, has anyone ever done beverage before? No. Okay. I'm Me either. so it's my my first rodeo as well. It's a [ __ ] Like, it is expensive as hell. It is heavy as hell.

8:23and I think the only reason we're probably successful in beverage is because we knew I didn't know any rules about beverage. Like, I knew direct to consumer. I knew e-commerce. I understood that unit economics needed to be high enough and that subscription needed to be first. I knew that we had to sell on these outcomes, you know, like I knew. So, we were building a wellness product in a can. was kind of like the the angle there. So, the reason I I say that is there there's in in beverage most people fail. It's extremely expensive. like 2% of businesses in beverage succeed and the ones that do they typically get really big really fast. Does anyone know how big Monster Energy is on market cap? 60 billion dollar. 60 billion. some of the biggest companies in the world.

9:08Annheiser Bush I think is 120. Coca-Cola is 100. so reason I I say all this is these guys talked about how long it took to build a brand. one of the CEO I think it was a a Pepsi said it takes seven years for a brand to to to become a a mainstream brand. Those guys never had access to Facebook ads. Those guys never had access to AppLoving. They never had access to these efficiency like we have the ability to harness the most powerful attent efficient attent human attention machines in in history and like so I think what's curious to tie this back in like we go to these places like South by Southwest where we're making a big jump to to but everyone who comes up to us knows us like they already have heard of Bree they've and like not because they've seen on the shelf because we bought 650 million impressions last year you know it's like that has never really existed before. I was talking to the Javi coffee

10:01guys about this as well. I think there's just massive opportunity for the ecom players in retail that is just not being realized by current retail entrance and would highly recommend leaning into it. But they're they're coming around to it nowish because I think like the Tik Tok shops, the products that are going viral there. I talked about Sour Strips' virality and their exit earlier. You see Alani New which was heavily influencer led then Celsius came and swooped them up. you even the rock zoa energy drink brand like all these that have some sort of engine that's driving them it's extremely important to do that but that just makes it more validating for you to be like no it's 100% possible we have to do this and so when I I go back to Dan and ask you on the being virtual but selling a physical product and growing the retail what has been like the hardest thing about your role so far and what do you think will get easier you mean about working like remote or I

10:51think remote or just building the brand in general at the speed that we're trying to do. Yeah. It's like we talk about threading the needle. In this case, we're threading like a thousand needles a day and solving massive problems. I think it's just orchestrating it all. Everything has to work perfectly at the same time. and the other thing is like because we've scaled from zero to 28 million last year and now right now we're pacing to 55 trying to go towards 100 million this year. that foundation that we build every single time it stabilizes I don't even feel like I can stabilize it. We already need to upgrade that. So that's just been generally a challenge I guess for us and we have to adapt really quick to that. Lately it's been like so we did all this product expansion you know. So like so we had the small and then we had the tall can.

11:35Now we have a 10 milligram can we have a spirit bottle we just came out with shot bottles we just came out with and I think we have four more products releasing in the next 30 days. so it's like, you know, I didn't realize how much that costs. Like it's pretty pretty damn expensive. I don't know if you realized either, but like we ended up, you know, like even though we're profitable and we're bootstrapped, we had five six million of cash flow just tied into new product expansion. I mean, that's probably been one of the more challenging things. Yeah. I think when you are in it every single day, you don't realize how many initial or units you need to order for a new skew. Like when we were going about it, we started I started ordering from the cash flow that we had and realized we sold out in two days from our spirit product. So that's why we had to find external financing to help us kind of build up our inventory of all these new products

12:24that we're we're launching into the world. Can you talk about the product

New Product Launches

12:28effects? Because what's new and different what we're trying to compete with? We had two core SKs. One was an effect, one was not a full effect. And now we have to expand. And this was a big debate that we all sat I wouldn't say debate I would say strongly opinionated discussion in South by Southwest with Brian you and Dan and you guys do we workshop that thing for two whole days non-stop and where did you land and why do you feel that way? Yeah, that was kind of curious. and I think this set the scene for everyone as well.

12:56Yeah, absolutely. I think this so you know when Breeze launched and probably what a lot of you guys if you've know of Breeze this is probably how you know of it. It's we kind of launches this micro dose cannabis and mushrooms in a can. This idea of you know feel good without feeling worse. This five minute euphoric happy uplifting effect that lasts for 60 to 90 minutes. exciting and fun and because it was legal THC federally and we were able to distribute this across the globe and sell it through ecom like that was a major you know moment but it was and what I learned this experience is that was really kind of our emerging positioning our emerging market moment and I think that more brands should be doing this I think we got really focused on one thing which is that you can drink this cane and you're going to feel good and it makes a great alcohol alternative and that's what we sold for quite a while but Now that we're

13:43maturing, honestly, like the hardest part with selling the hardest part of selling Breeze today is probably the fact that there's THC in it. not because of roadblocks. Like we're good at that stuff. It's that people have stigma and fears over the idea of cannabis. You know, it's like they had that one bad edible experience in college and they've never let it go. You know, it's like it's always a gummy. It's always a gummy. It's always a gummy. See, everyone's like, "Fuck the gummies." My wife calls it and I don't think we should launch gummies, by the way. I think it's a bad idea. I was like kind of vibing like maybe you want to put a gummy and get really toasted. I don't know. But like Pepsi does not have gummies. You know what I mean? Like not just read Coca-Cola. What are they on the candy? I don't know if they did that, but so so so you know what we learned in that and I was so I had this broader

14:24vision for Bree more fundamentally that I I knew that the world I know that the world is fundamentally moving towards function not because it's something new. It's more of like a revelation we're all kind of having. the reality is we already are consuming for function. Like we have coffee in the morning because it gives us energy. We have maybe beer in the afternoon because it provides us relief, tea to help us go to sleep, what whatever it is like food even just for energy or health. So we're just like just telling it as it is. This is a So my point with that is we've now bridged this gap to what we did to initially get into the market to where we think the market is going, where the puck is going. and what we're calling that is just breeze feelood tonics. and we're creating a range of craft experiences that will enhance any moment through a variety of effects both with cannabis and without cannabis. maybe we can give a little tidbit.

15:16okay. So, we have four new products coming out. Okay, keep this quiet. we have four turn that [ __ ] off. we have four new products coming. two in the non-infused space, so cannabis free. One's going to be called elevate which is an uplifting energetic tonic that has guaya and maca and jins singh. So it's going to give you this uplifted happy feeling. And then we have a rest tonic or sleep tonic called dream. It's going to be cherry chamomile a tart cherry and chamomile and rayi and passion flour. So rich in these very powerful active. So that's in the non-infused alongside flow which is here. I highly recommend it which is our more social cannabis free tonic. All three of those will be rolling out in all 600 sprouts stores on June 1st, which is crazy because we're really a cannabis brand, you know, like that's crazy. It's like Whole Foods selling weed. but this is why you have to shift the to where the new positioning

16:11is. Exactly. And that's I think, you know, something that we're really learning a lot in this process is like what do we what are we trying to build actually? What we're trying to build actually is for a better way for people to feel better. like I I want people to have options that allow them to enrich their lives in ways that are they're generative. So, those are three non-infused. We have two more infused and more energizing tonic and then a hypnotic tonic that has blue lotus and things in it that will be coming out pretty soon. So, the cool thing about this is like the reason why those products were launching, a we needed to, but b it gives the retail guys ammunition to play with and it gives me on the subscription side stuff for me to play with. Well, it turns it into a platform brand. And like I also think this is something that's super underrated in the e-commerce world is people get so I think it's because we all came for a lot of us came from like

16:56affiliates and like drop shipping and [ __ ] that like people have kind of forgotten what it means to like innovate and build something real and longasting rip and run. Yeah, exactly. Rip and run, flip it. I mean I don't know what are you going to do with the money that you exit invested in a business? I'd rather build it, you know, like and I I I think that there's there's a lot of opportunity in doing so. so like our plan is using this momentum that we've created with Breeze in order to shift it into more of a platform brand. I mean the reality is there's 50,000 different herbs, mushrooms, adaptogens that will make you feel something that are fully legal. and this can is quite the delivery device for those types of products.

17:35So our intention is to build something that you know I think the most obvious example of this is like Apple you know it's like does an Apple are they it's not iPhone it's it's not MacBook it's you know it's it's Apple and like that allows them infinite possibility and adaption that makes the company fundamentally more value and if if there's anything that I've learned in entrepreneurship and e-commerce that I would pass over to my my friends is like think bigger like way bigger like you guys are some of the smartest people in the entire world right Like you have access to superhuman capabilities and some of us are wasting it on dog pillows. No offense, but you know like it's like like what are we doing here?

18:14Like we this is we're we're the forefront of the AI revolution with the most powerful attention engines in human history. What are you going to do with that? This is the crazy thing is like I get access to this. Dan gets access to this. And Corbin, if anybody gets your emails, Corbin's a real person. Corbin in the room. Raise his hand. Okay. He's getting breeze from downstairs actually. He's actually sending emails. He's a real guy, not a fake guy. But when you don't get access to this type of stuff on an ongoing basis, but you still get the information and you still need the team to understand how they need to execute and operate, you have to inform there how they need to run, but you can't really micromanage the like how they're executing things. How are you finding out taking the emotion, the energy, the expectations from Aaron and then going like, "All right, activate the entire team because we have a product launch that is now on May 15th."

19:00Yeah. I mean, our team is so good about

Hiring Philosophy and Team Dynamics

19:02autonomous action, honestly. Did you were you hiring for quality of execution, like proven people, or you going like, I think they have upside, go for it. Aaron has like an amazing philosophy on hiring that he passed on to me that I use all the time. It's either a hell yes or a hell no, and we apply that to everyone I hire. It's some people are like come with 30 plus experience in the industry and they're amazing. Some people just have this like ability that's craving to learn more and to just be best-in-class in whatever they're doing. And we bring them on, too. And they've been all around. It's been incredible building this team.

19:38That's what I learned with Malia. So, she sent me two people for customer experience. She's like, "This one, she doesn't have any experience, but she's got a lot of enthusiasm. She feels like she gets it. And this gentleman has a lot of experiences. We should talk to both." I was like, "Okay, he's a dick. He's rude, but he got he's great at And this I would actually open this up to a couple questions people from the audience is like can I can I riff on that just real quick before you just you know one thing Dan I I think actually this is probably one of the more profound things happening in Breeze today is like we have no [ __ ] clue what we're doing like like no clue like I've never done this before. He's never done this before. He's never done this before. Like we've done other things and we're applying that knowledge to it but it's it's that like self-awareness. Look at the breeze rolling in right now. This is Corbin. Corbin is a real person,

20:21dude. Corbin, we're just This is Corbin from Breeze. All right, we got you guys. [ __ ] yeah. Tonight's going to be sick. So, okay. We don't know what we're doing. And but the thing we do know is that we know that we don't know. And we know that it's going to need us rebuilding ourselves personally and professionally over and over and over again. And we know that we're gonna have to rely on all of our friends to teach us what we what we're missing and to poke holes in our visions and our ideas.

20:50And like that is so understood. Like I I know that Dan's never ran a billion-dollar company, but I also know Dan will run one positively. Like there's not even a doubt. And and you know who else knows that? Dan. That's true. Dan [ __ ] knows that. And if he doesn't, good [ __ ] love, buddy. I have a question. I think once you solve so many problems on a sing on everyday basis, you just kind of get used to solving problems. You just get really good at it. And that's across our entire team. That's the common common thread. I was just talking to Corbin about this like literally outside. Okay. Be vulnerable with me.

21:25What has been one so far you're like, "This is rough. We almost ran out of

Financial Struggles and Quick Solutions

21:29money 3 weeks ago. That was rough. I didn't get this text message." Yeah. Me either. I told him, "Figure it out and then text me." We got a million dollar loan. Real quick plug. Wavefire [ __ ] showed up for us. This is true. This is true. $10 million line of credit in 72 hours at a stupid APY. I don't know if that's for everyone though. It was I mean subscription based businesses I think make make underwriting a lot happier and like more confident in your abilities kind of thing. But this is 100% true. So this Yeah, this was I remember I got this message. This is what I get from Dan. So we do a daily

Daily Revenue Reporting and Urgent Needs

22:00reporting of revenue and pace of spend on all of our channels. I get this. He's like, "Hey, what's up?" little bit of pause and he goes, "We need like $450,000 in like four days." I go, "Do it." I go, "Nice. Who's doing that?" And he's like, "I think it should be you." I go I go, "What?" I was like, "What? I didn't know that." And then we had to figure it out. So that part was kind of rough. I do We do get some of those. He asked you for 450 or to generate 450.

22:29There was a gap. There was there was a little bit of gap. The revenue gap. There was a gap. The numbers might be a little bit different, but that that conversation is pretty frequent as we come in. But I think that that's the fun part about building something. You're like, "Dude, this is kind of crazy. We're doing this. We'll find a way of doing this." Hey, thanks for investing in Breeze, by the way. Yeah, no worries.

22:44It's been fun. It's fun. Anybody questions for for these weirdos on stage right now? Yeah, Nick, come on over to you. Such an interesting perspective because you can get the vision and then you can get the execution in both questions. So, what's up guys?

Building in Public: Transparency and Benefits

23:01One thing you guys have been notorious for is this notion of building in public, publicizing your numbers, publicizing the the the progress and so on. Can you walk us through sort of the thought process? Was there a thought process of just like just sharing everything because it's it's dope to see. Yeah. I don't know if I would do it if we were like this size and then started building it public. I was just talking to the Javi guys about this and I'm like I I don't know if I would start building the public if I was Javi today.

23:28but I think the way we did it was brilliant, inspired by Nick primarily. and I I I would highly recommend it if you're starting something new. you know, like the fundamental idea kind of wrapped around three points. One is that like none of us believe in competition. Like I I think it's a yes or year idea. I think that like people can try to rip you off and they can chase your tail all day long, but they're never going to be able to like see what you necessarily see and build towards that. And like even if they could, oh, I told them next product, so they're going to jump to that gun. Like but do you see what's beyond that? Do you see what's guiding that fundamentally from my heart? like you don't and like and you can't and you shouldn't. You should see whatever you see and like you should go pursue that cuz I can't do that either. Only you can. And like that's where real magic

24:10and power comes from fundamentally. One. Two is that the benefit of being top of mind. This is really what I learned from Nick. You know if has anyone ever were you at a GeekOut event ever? some of these Yeah. amazing events that Nick held all across the country or not this country. Sorry, like 10 different countries. and Nick was just like he would, here's what he would do. He would go to people like Van Oaks or me and he'd say, "Hey, what's what's really working? What's the secret sauce that no one else knows that you really know?" And we would tell him. He's like, "Great. You're going to talk about that in front of 200 people." And I'm like, "What?" He's like, "Don't just trust me.

24:43Just trust me." And and he was right. Like when you foster this energy of just like giving and sharing, there's something metaphysical about it that just turns it back around to you. like another way and and it it part of it is you become top of mind with a lot of people and because you're so open about what you're succeeding in and what you're struggling with, everyone becomes a resource to help you solve those problems very quickly. If anyone follows Nick or me on Twitter, like when we're facing issues with Breeze, we'll just say it or post it and like within hours we'll have solutions to it. Like that's crazy. Like I have 20 I have hundred investors right now that would [ __ ] give me a check any day just because they see our stuff online and on social.

25:23Like it's there's there's a lot of value in doing that. The third is like I the reason I like to geek out, the reason I like this event so much is because people are telling it as it is and they're keeping it real. They're not gateating gatekeeping information. And something that I really struggled with whenever I was in my comeup is figuring out what's actually working. And it was so secretive and I thought that was so lame of people. So I thought, you know, if we ever got more successful, we would just tell people how it is so that they didn't have to go through so much [ __ ] I also I also think it's tough that in our age there's a there's half of the group that wants to make money from the information that you're trying to share and there's other half it's like, dude, I just wish someone told me this when I was doing it and I just want someone to hear me out. And I think that

26:07is that that building publicly as much as you can is important for the nextgen to be like, oh, this is actually possible. And that's also why I think I was at YPO yesterday and I sat in the room and I felt like very very like this is mine. Like this is the thing that I have that I can't get rid of because if if you learn it, you might do it bigger than me. And I don't like that attitude.

26:25I don't like again close mouths don't get fed. There's not there's plenty enough for all of us to eat and win. And that that is super true. And I and even bigger is like we're in a space that needs a lot of advocates for the positivity of what we're trying to build. And the only way you do that is by coming from a person like Breeze can't be re launching ideas or concepts from the brand. It has to be come from the person that is leading the brand. So I think that's you know to like something that I think we're all kind of learning together is like what does it mean to build a category? You know it's it's one thing when you're building a brand within a category it's a new thing when you're like changing and making something fundamentally new. And one thing that I'm learning and and I kind of learned early on with the CBD world and then that applied over to the THC world. It's if you're leading the category, the bigger the category gets,

27:12the bigger you get. Like that's how that works. If you're at the top of the pyramid and the pyramid becomes wider, you go higher. Not not always. people can like trade positions with you, maybe top five, but like the bigger the category, like I if everyone starts drinking feel-good tonics and there's a bunch of brands that offer them and Breeze is the largest of those, like Breeze becomes a very, you know, it's like Pepsi made Coke bigger in in in in tandem like because more people started drinking soft drinks and so these are like big ideas that I were learning on the fly very quickly. and u, but but I think they're worth considering. And I that's what I was saying earlier. It's like I think that one of the biggest traps of ecom is the echo chambers we put ourselves in. Like there's big business out there. We have tools that they have no [ __ ] clue how to use. and so leverage them and become the big business and then let's

28:02run this [ __ ] and like do it our way. Any questions? Anything else? Beautiful. Oh, we got one coming done.

Supply Chain and Production Challenges

28:16supply chain supply chain and sourcing like did you start out with one c-acker? When did you make a decision to diversify? How how are you guys doing forecasting? And then are you shipping directly from your c-acker or do you have multiple 3PLs across the country? A little bit about that. Great questions. Let me do first six months and then you do everything else. Okay. So first six months of the business like was tough like I like you know luckily we met Travis who's not here unfortunately but he's he's actually the guy who made Breeze like he's the chief formulator and product officer. Travis had like a small canning line in his house. And so like the first 500 cans we made were just like hand canned you know and he happened to be connected to an office of a guy who happened to have a nano emulsion ultrasonic lab you know standard. So so that worked out. and so like we were able to do small production runs in beverage which is

29:12usually really expensive and and rarely possible. so that was super helpful. And then you know like we got scrappy with it. We found breweries like you know the thing about beverage and functional and new age tonics and things like this is there's a lot of breweries out there and they beer's not doing that hot. so it's a good time to like leverage all of their equipment. So we so we did some small runs there.

29:33and so that was the first six months. But fast forward one year and we're producing two million cans a month. We have Yeah, we have a couple different How many pallets is that? 4x4 pallets, dude. I 200 something like that. Yeah. like 25 truckloads each production. Semi-truckss. Yeah. Which is the craziest thing because we're [ __ ] playing on our computers. Yeah. So, we have multiple co-ackers now across the country for specific product lines. we're going to continue expanding that one network. We're also going from one 3PL to four at the end of next month. so that's going to be a big shift for us as well. Supply chain part of the challenge of launching really innovative products. you have to find the supply. So, and we want to make sure that it's the highest quality and something that we could also scale. And that's really been the trickiest part about launching all these products. you know, like our cacao comes from Peru and our lions mane comes from the forest. So, it's like we we go through a

30:33lot of effort to find the best supply and then work with the partners to scale it up with them. but yeah, that takes the longest amount. I also think that like you need to think ahead like you need to realize you need to you need to know that you're going to be successful before you achieve that. Like you know where you're going to go and trust that you're going to get there and think through your partnership deals ahead of time with that. And I think that's a lot. I think it's challenging because people are very like responsive to whatever is happening in the moment or reactive to what and we made some mistakes there. I mean we had some supply chain partners that I don't know if they were necessarily the best people and we built their companies and then they could leverage that against us. you know, it's like so you got to be very mindful of like what you're what you're doing and and and and trying to pre-plan as much as that as possible.

31:18There's like there's a grace you have to have with yourself because like when you're scaling especially quickly like this, you're kind of just trying to make sure the whole thing doesn't fall apart. you know, but yeah. What about price? Will talked about price. Do you guys think about price and how you're kind of creating a category? Yeah. Like how much does that play? price of our products or sourcing or both? Both. Both. I'll talk about the price on the product. You talk about Cogs. So, on the price, so you know what I told you earlier is like I I'm clueless in beverage. Like, this is my first rodeo. I had a few friends, a guy Jimmy Coffee, he's a buddy of mine, and he gave me like his two years of experience in a two-hour phone call one time, and that was like pretty much what I knew about Bev. but what I didn't know is I I know ecom like it's back of my hand. I've been in ecom since

32:02I was 13 years old. Big cartel in MySpace. Like, it's my bread and butter. So, I knew that regardless of what we were selling that I needed to have a unit economics nec that would facilitate my ability to buy customers online at scale. you know, Ryan Dice had a quote that I really liked which was he who can pay the most per customer wins. It's true. It's an auction like you're bidding. you know, so so how do you solve for that? You build a product that will be successful with what any individual offer. You have it so that it can be stacked up to a strong AOV. you focus on bundling and continuing to increase that opportunity over time and you you become religious about subscription immediately like if you want to succeed in ecom that's how you do it regardless if you're selling flowers or breeze or whatever. So, so I think you know so so and then here's the other question like what do you pay for a can of cannabis and

32:54mushrooms it's it doesn't exist you know and like if you compare it to the five other guys they'll tell you whoever can sell it for the cheapest and at the highest what you know but I think that we think of it differently I think that we're we're we're trying to make as valuable as a product first and I know we think about this a little bit in the college is we're focusing on just like making the best possible product that's even possible posible in humans kind based on what we're doing and then we pull back on the cogs and we optimize for and unit economics that support ecom truly for the volume that we're doing right now we have an ops team of two people and expanding right now so not excluding excluding you excluding me yeah yeah so I mean we're right now 22% cogs I think that can be optimized massively over the next couple of months and that's a huge undertaking for us for changing our cans over to be

33:48crowned. That's going to be literally drop our packaging cost in half. But also due to necessity of just like how fast we're growing, we had to source everything as much as possible locally. And then specialty ingredients obviously come from like South America and other places. But yeah, supply agreements like we we're really late to the game on supply agreements. Like duh, you know, things like that. I got one in the back. You have Are you gonna say it? Don't be scared, bro. Step up.

Remote Work and Company Culture

34:18I was just gonna ask about the decision to go all remote and any drawbacks you've seen from that. I like to travel a lot and Nick does too. And like, you know, the thing is my my wife, she's a which really, by the way, is truly the foundation of this whole thing. Like, I don't even I'd probably be dead if it wasn't for her. But somewhere in the world, somewhere some I don't know or like Yeah. I don't know.

34:42Wouldn't be good. So, but my point though is so my wife, she's a travel writer full-time, so she writes for travel and leisure and these other people. And we're spending six months of the year on the road and have been doing so for the last 10 years of our marriage. and so I think like we were really early into the digital nomad thing. Nick was really early into the digital nomad thing. A lot of us were, I'm sure. and so like you know, we just kind of built our own lives traveling a lot and and I think we got better at doing that and we just decided there that that was too valuable to us to trade off. You definitely lose some [ __ ] Like don't get me wrong, like being with people in person like we always probably talk yesterday. Yeah.

35:22It's magical every time we get together and we're like, "Wow, we should be doing this much more often, you So you you missed something but but also like people get to live their lives the way they want to and and often that leads to more fulfillment and more fulfillment leads to better work and better work is just how you create great great things. Like this took off the day my son was born like or the year two like it really really started going and I was like really really really really nervous about this first kid don't really know what the [ __ ] I'm doing trying to figure it out and if I didn't have that flexibility to be able to plug in really really aggressively be intentional because when you when you're with someone all the time working in office you kind of take it for granted like you're not really spending with them talking with them doing the things you need to be with them and then all of a sudden you go to a Southby where we have

36:0511 executives there and it's so intense and intentional and you kind of leave a little bit rejuvenated and I think that like hybrid relationship that might be actually very good secret sauce for people because you want to stay remote you still want people to exist Dan's in New York Aaron's in Palm Beach I'm in California half the team is in there there will be little hubs around each other like we know New York will pull off we know we have a couple more people in in South Florida is too expensive and weird so we don't probably won't do too much there but maybe Texas so I think there's areas that we can kind of call into anything on How you good? Yeah, I've never worked in an office in my life, so I can't imagine doing that now, but I do think it works really well for us. And we have a lot of moments even across the company, like we do happy hours every two weeks with our entire team at 420.

36:51and we're going to start doing more things in person as well, like throughout this year. I think this year is going to be big shift towards that. and we should be doing more of it now, too. The way you say that, it's like people have to get high to work at Breeze. It's like 420 on the dock. and they want to which fortunately this year if anybody parttook in it was also Easter so the dynamics was very unique. Final question. All right. Hey guys

Future of Beverage Industry and Brand Building

37:15question on looking at like how the healthy prebiotic sodas have really taken off and you look at you know Poppy's valuation and lollipop and how it seems like the big soda is responding. Do you guys think that that may be a foreshadow for next generation with alcohol brands or what do you see the future this generation for alcohol brands? Do you see him pivoting or dying or drinking? Fighting words. You're going to get me in trouble. Such a good question. You know, you know, alcohol is like literally the mafia. Like actually the mafia like no not [ __ ] Like these this was the mob. Like these guys were the boot Jack Daniels was a person.

37:53Jim Bean, like these were I don't know, maybe not everyone on this person, but these are real moonshiners that that ran gangs and and then operations and then the government had to break them up through the three- tier system so that they didn't have too much of monopoly on the entire country. [ __ ] up [ __ ] and they're still the ones in charge. so yeah, I think about it a lot. It's it's a little but you know, I think here's what's here's what's fundamentally changed in in society is before access was the vehicle of brand building. meaning like if you wanted to be the popular soda in New York, you needed a distribution system that would facilitate your your product being available at the stores, right?

38:32And then like if your product was available at stores, when I went into the stores, that's where the that's the product that was available. The brand became notorious. So that's how you did it. So what happened is a lot of these powers existing powers that be are in this mindscape of that as long as I control access then I run the world. And that's just not true anymore because we're all [ __ ] that [ __ ] up like hard. Like like the fact that we have these attention engines and the internet and we can break the means and the molds and we can transfer information at speeds that that have never been possible. It allows like I said earlier to do things like build a brand in two years while we're on 2,000 shelves. Like that's weird. and that's not so so so my thought is that I think that I think that I think that most of the big players in beverage are going to have to acquire or partner with the

39:27brands of the future. I don't think they're going to be able to make them. And I think that's what we're seeing with Poppy. I think that's what we're seeing with Lollipop. I think that's what you're seeing with Happy Dad. I think that's what you're seeing with Alani New Alani New Prime. you're like, you know, it's like why? Because like like I like even whenever I mean I know that those big beverage companies have launched pre-biotic sodas that I have no clue what they are. Do you know what I mean? But I know Poppy and I know Lollipop and and and I think Pepsi just bought Poppy. also and I knew right and dude and these companies trade like [ __ ] crazy. Like that's the thing. Most brands fail in beverage but if you win it's like a lottery ticket generally speaking. I mean, we have a lot of headwinds with regulation and things that we have to navigate, but the these these brands trade at like 5 to 10x of run rate, you

40:14know, so that's like that would mean Breeze is worth something like 200 to 400 million today. Did you ever hear about the the drink Tropicana launched? No, that's what I thought. Yeah, it's terrible. It's it's literally Tropicana like probiotic soda. Just there's like no innovation there too, right? It's like, oh, we own the existing infrastructure and the distribution channels. So, if we launch Prebiotic, we can just boot them out of the way. But that's not that's not how it is anymore.

40:40I have a relationship and an affinity and understanding of Poppy and Lollipop and you know, and those guys don't use Facebook ads. Like, imagine if they did and they had a unit economic system that could support it. I think that's why we're getting such outsized returns. It's not just I Facebook ads is kind of a totem for digital advertising for trading attention and building a system that supports it and and that I I think that what's going to happen is Breeze is going to I I think that Breeze has created a fundamental new playbook for what's possible within beverage. And I I don't mean that so braggadociously just very clearly that seems like that's what's happening. And I think that it's going to become the future of how CPG products in beverage and not in beverage become mainstream scalable CPG products. Awesome. Thanks, guys. Aaron,

Conclusion and Final Thoughts

41:25Dan, thank you boys and thank you guys.