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Today I’m thrilled to have Kevin Rutherford on the show. Kevin is the CEO of Nuun life, a company that sells hydration tablets that turn water into a Gatorade like drink with very few carbs.
Nuun is a product that I personally use every single day to stay hydrated and feel productive. And today, we’ll learn how Kevin has grown Nuun into a behemoth of a company.
Enjoy the show!
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What You’ll Learn
- How Nuun got started
- How Nuun grew to an 8 figure company
- What were the primary strategies to grow the business
- How does Nuun generate its sales
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Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle so you can spend more time with your family and focus on doing the things that you love. Here’s your host Steve Chou!
Steve: Welcome to the My Wife Quit Her Job Podcast. Today, I’m thrilled to have Kevin Rutherford on the show Now Kevin is the CEO of Nuun life a company that sells hydration tablets that turn water into a Gatorade like drink with very few carbs, and I’m actually addicted to these tablets actually take them twice per day and I can’t really describe the feeling that I get but after drinking Nuun for some reason that I instantly feel better and perhaps it’s because I am dehydrated for most of the day and I don’t even realize it but the stuff works amazing. I always take it before I start my day. Now in any case Kevin has grown noon into a behemoth of a company and I’m excited to hear his story and how he’s grown it and with that welcome to show Kevin. How you doing today?
Kevin: it’s great to be here. Thanks for having me.
Steve: So Kevin. I’d like to start with kind of the origin story. I know you kind of took over the company after it was established, but I was wondering how Nuun got started to begin with and how did the name happen to be like Nuun as a pretty unique name.
Kevin: Yeah, well, there’s a few parts that question. Let me break it down and tell you a little bit how it started and then I’ll finally get back to the brand names here point. So Nuun was started roughly 15 years ago and it was formed by a couple of triathletes that were in training and they were they were really looking for a better solution. So if you go back 15 years just think about this for a moment there were really not very many Alternatives when it came to hydration and sports drinks really the most known still to this day of course is Gatorade. And so what they did is they were there trying to find an optimal solution oddly enough. They’re also going to school like it was Dartmouth if I’m not mistaken. I apologize if I’m off on that data point,
Steve: It’s okay.
Kevin: but I’m it’s a certain and it was actually a business case meets personal need and they came up with this idea of creating this noon tablet. It was based on some research that suggested the optimal way to hydrate and fuel yourself for training long Distance races is you need to separate your hydration from their fuel. And so if you think about that for just a moment the way that you if you’re taking in a sports drink a traditional sports drink like a Gatorade, It’s a combination. There’s a lot of carbs and sugars in there which is meant to be fuel to go with your hydration. So let me let me just kind of give the give the audience a little more detail on this time in its then you go will hold on so that seems to make sense because that’s easier to take in it is easier to take in but it’s harder for your body to work with it.
This is what the research suggested and so if you think about if you actually go back to I think it’s 1964 when you actually Gatorade was invented at the University of Florida in Gainesville, from what I understand back then the product was actually closer and composition to what Nuun is terms of electrolytes and carbohydrates than what the traditional Gatorade product is today. And so yeah, so it’s evolved over time and I think it’s evolved over time both for taste palate because it’s much sweeter with the sugars. There is a book written on it also suggests that there was an artificial sweetener in it back in the time to keep the calorie count down and then when that was banned by the FDA, then I think that’s when they put in different heights, you know, basically some high sugar content.
Steve: So basically, it’s very high fructose corn syrup
Kevin: Right. Yeah, exactly. So that’s the challenge now so enter in Founders at the time and when they were looking at this and they’re going okay. Well, there’s got to be a better way in the science says, oh by the way, I didn’t finish on the physiology. I meant to do that. So in the physiology of your body when you’re consuming liquid some over simplifying this but when you’re consuming liquids, it goes eventually down to your stomach like to your small intestine and that’s what it wants to go and in Balance of 95 percent water. So if you take concentrated sugars and put that there over time that’s going to cause intestinal distress plus when you think about when you’re working out you’re putting stress on your intestine and just like just bodily functions. And so you would want to use a different pathway for fuel. That’s what you want when you want to use food potentially poles and other methods that people use for when they’re working out and hydration is all about electrolytes.
You do need a little bit of sugar to help you absorb the electrolytes but not a lot and when again when you combine the two it wreaks Havoc so long story short these guys basically said this is a better way. Let’s just develop this on our own obviously did very well in the business case to the way. They said let’s just launched. Once this product the name Nuun. So, the truth be told it’s defined as nutrition uncompromised. It’s a made-up word N U U N will tell you I have talked with the founder of the past on this and I think he actually likes to leave it up to mystery. And so what’s funny is there’s stories that have shown up on this one woman on our team that to me Kevin, do you know what Nuun means in Nepal and I’m like what? Yeah, then the Polly’s translation for it. She goes it means salt and I go and so sure enough I’m Diggin I’m Diggin. I find it even Wikipedia you can you do have to kind of dig to find it, but I found it and it’s actually spelled Nun but pronounced noon and it is the translation for salt in Nepal
Steve: I can’t be a coincidence.
Kevin: I wonder if exactly right because the most essential electrolyte that you need to replenish is salt. So I found that quite humorous. I don’t know if that’s how it started. So I’m love to be transparent and honest about it. Okay, I will tell you that we think of it as nutrition and compromise but you know, there’s all kinds of stories out there about what the brand means. I also think that the founder just really love the symmetry of the N the U of U and the N all lower case. I think he just kind of like symmetry. But again, I don’t know for certain. I wish I had a better answer for you guys and I want..
Steve: A couple more questions about the founding story and then we’ll move on but I was just kind of curious if these guys know they the product at all before they just start making and selling it in bulk.
Kevin: Oh well, the validation absolutely validation was really among the fund themselves because they were triathletes but also among their peers and friends. So small-scale testing, yes. And then actually to that point they did consult with a physician and a sports scientist who was living in Australia. I don’t know where that connection came from, but I do know that because it’s oddly enough this position. I introduced with some introduced himself to me at a bike show. He’s like Hey Kevin, you know, I forgot his name. It’s so bad. He was super nice and he goes I’m so and so one night. I was actually part of the science in terms of understanding the composition of the product and worked with him in the folks that started the company. So there was some validation there and there was also real world testing in terms of training for adventure races and training for for Iron Man and a long distance Triathlon races.
So that was the validation then it was hey we’ve got something here and like what you said at the opening you really can feel the difference when you try this product, that’s the cool part and our whole Mantra when it comes to Innovation and how we improve our products is hydration that you can feel we kind of work at the science. And then we validate it just like the US and still to this day.
Steve: You know, I notice I don’t feel that way when I drink Gatorade is it because of the sugar component?
Kevin: Well, I think there might be two reasons. I don’t you know, obviously everyone’s body is different.
Kevin: The sugar you would actually would think you would feel a difference pretty quickly because we just think about the injection of a sugar high. However, that being said the electrolyte level in noon is higher.
Kevin: Than a Gatorade and that could be why and I think the reason why when you’re doing this at rest while you’re feeling the difference of Nuun right away is realize that but we’re just not putting enough liquid in our body and so Nuun will replenish that much quicker and the composition of the electrolytes is designed for basically what your body needs and where you’re going to be most efficient. So I think that’s why, so it’s a bit of the composition the electrolyte levels higher and Nuun the sugar may or may not be a reason out of the gates why you don’t Difference because I think over time that you would notice the sugar drop rate falling off the cliff.
Steve: Yeah. Yeah.
Kevin: But I would think it’s actually I would think would actually help you feel better.
Steve: Okay, I’m just kind of curious. What does it take to make one of these tablets? Like if someone out there were to just make a product along the same lines. Does it require any sort of FDA approval or anything like that certifications in order to sell some of these things?
Kevin: My hesitation on that one is you know in today’s world. I guess if you were to sell products online, I think you can you wouldn’t really need an FDA approval. You could probably get around that system. But I guess long story short, We do go through FDA approval. We also work with different retailers and get approval for them in terms of agreement as to what ingredients we use. So I you could do it you could do it in probably skirt around a lot of Regulation pretty easily.
Steve: because I do know that people who make those protein powders. I don’t think there’s any regulation on those it seems.
Kevin: yeah. I know I think you’re right. I think that’s the chat one of the challenges with the you know, supplements in general. So one of the things that we did to counteract that one and actually it’s great that you’re aware of that. I wish more people were aware of that. So one of the things that we’ve done is we said don’t just trust us, right? take these validations. So we actually go through the effort to make sure that you know that it’s non-GMO project certified we go through the effort to make sure it’s gluten-free certified. It’s vegan certified its kosher and certification and last we have another certification that’s around safer sport which basically means we have every single batch has tested so that you know that there is no contamination that could have a banned substance in it.
Kevin: But again, the certifications are to give you confidence to say and which cost a lot of money and time but sure that way you look at and go what they say is what they’re doing.
Steve: Okay so they’re not required but you guys do it as an extra confidence level for consumers.
Kevin: That’s true. Now when you start to go internationally, right, so maybe that’s every Canadian like some people know their Canadians except me but as we as we ship our product across the border to Canada Health Canada is much more strict. And so we do ship there. We do ship to the UK and Australia New Zealand and all of those countries do require much more regulation to be passed which obviously we do.
Steve: Okay and then once you have the manufacturing down or at least of the founders, like how did they generate the first sales? Like, what does the overall marketing strategy to get a product like this? Because there’s just tons of these maybe not tablets per se but there’s a ton of hydration products out there.
Kevin: When you think of a tablet, they didn’t really exist roughly 15 years ago when the company started. So in this case the like consumers like what the heck is this? Right? And how does it work? And is it safe? So there’s a lot of Education when you think of when you first start how you have to do this?
Kevin: So I think that the recommendation that I would say on this one and how to approach it and it’s probably pretty consistent, you know feedback that you’ve had in this is exactly what the founding team did is they started small I think of who is this product relevant for who are we targeting and it was the athlete so it’s the adventure Racers of the triathletes. I believe the first store that ever carried Nuun is called First Ascent in the on the north side of Seattle and which is where I’m located in Seattle right now. You go to that store and you convinced basically kind of persuade them to give it a shot likely you give it to them Free and just kind of prove it out and then get in store in Sample and I think starting store by solar one by one you start expanding and you start to get momentum. You also hear the consumer feedback over time and in the store feed back and then that’s where you start building from.
I think truthfully I think the big mistake that people have is they want to go big so fast and I think that you really want to start small and focus and learn and adapt and accordingly and this case you’re not really probably going to die that much on the product that you’re going to adapt on how you communicate it.
Steve: You know, it’s interesting you said so they went to the retail channels first, I guess online wasn’t really huge back then would you have done the same strategy today?
Kevin: I would have done a combo. What I would do is I would I would try to find curated distribution meaning Nuun today. If I were to start I would go and work with some of the hot trendy like in the sport for run for Triathlon for bike. I would work with them. I would probably work with you know, the local natural stores as well because we use all clean ingredients and then I would also take the same strategy targeting that same consumer online. The reality is a lot of businesses are being built through online first, but I think you can do both one of the things that will happen is discovery in the store then kind of relay over to conversion fairly quickly and then that can build your online sales. I think I can go both ways. I think a lot of us think of online is the the way but I think a combination of the two is actually more more powerful most consumers today still treat most of their shopping in store.
Kevin: And I’m not seeing the trend isn’t changing. I agree it is but the data would say, hey most people still The store.
Steve: I think I would agree with you. Like if I just saw some random supplement in a Facebook ad for example, even if it was a free sample, I’d be reluctantly to try it unless that kind of happened to glance over and see it in a retail shop. So I think they do work together for sure.
Kevin: Yeah, absolutely.
Steve: So, okay. So back in the being they start out in small retail shops and then Target a small community presumably the triathlete community.
Kevin: Yeah, absolutely that in adventure racing was a bit of a component / for the brand as well adventure racing. If you’re not familiar with that is because you’re basically doing a race that has orienteering involved in it to get two different touch points and you’re racing somewhere like could be 24 48 72 hours over some pretty rough terrain. So the torture test is if this thing works for that or an Ironman athlete then guess what this has got to work for me and that’s kind of the approach they took go for the torture test. Yeah. That was that was actually the approach.
Steve: It kind of spread via word of mouth and write these athletes were using them and then they were recommending them and then soon other athletes were using the product as well.
Kevin: Yeah, exactly. And here’s the other interesting thing is there’s two there’s two components. There’s word other the word of mouth is the overarching which I agree with you. That’s that’s absolutely what happened to spread word amount. There’s through the athletes. Then there’s the influencers at the time that it wasn’t influencers. Like we think of Instagram today that didn’t exist. But it’s the same concept in this case. It was the influencers were the store managers or the store owners of these kind of leading independent stores that lead in Triathlon or cycling or run. And if they’re recommending this Nuun hydration, it’s got to be good. Right? It’s that kind of concept and so that’s what that word about what happened and then of course, they’re sampling and sore and being a races in sampling. They’re introducing its people.
Steve: So by the time you took over the company, we were there getting most of their sales from and what was the marketing strategy at the point where you took over?
Kevin: Yeah, absolutely. So I took over, you know, it’ll be coming up to six years and the primary source of where we were selling the product was at least the predominant Channel. I was starting to expand from there. But the predominant channel was really the sport specialty side of things is what we call it or sports stores. So think about again as I mentioned the trap on shops on child’s bike shops, but also really good customer for us. It’s been around to this day phenomenal customer for us is REI.
Kevin: Which is an outdoor retailer and they’ve been a really good partner. Which not only is it a good partner for Revenue but these retail stores are in many ways distribution is marketing and so they’ve really helped really help give us credibility because of who they are and through Association we did have some distribution in grocery as well. But was growing the time obviously it’s much more significant today than what it was. So I would say that and then even the online sales were starting to build through Amazon at the as well we were real early adopter again. Those were obviously much much smaller at the time but the predominant volume first coming from the sport side of things and then the grocery was starting to build the digital was starting to build and gain momentum, but that was kind of where the volume was.
Steve: How do you get into REI? What does it take to get into REI?
Kevin: I don’t know how we got in originally truthfully. I actually don’t know how that happened. I do get that question a lot by the way, REI in particular. And I think to get an REI today, what you want to do is you’re going to want to prove your brand and other places first because REI is not going to likely take the risk on a start-up not likely but they will take it on a small new and emerging brand. So Noon would still call it an emerging brand. It’s not the billions of dollars that Gatorade is today. So I think today REI probably a lot more sophisticated on their choices of nutrition than what they were, you know, 10 years ago is actually when I think we wanted to REI so it’s pretty long time and like I said still like a critical customer to this very day and the future for our plans. So I think you gotta prove it out likely in some of these sports stores.
I would even I don’t know if you can do this, but the one of the ways to get into some of these chains, you have to be really Scrappy about it, but can you build relationships at a store level and it’s kind of going around the rules so hopefully REI doesn’t get mad at me for saying it. I don’t know if we did this REI, if you’re listening. I say this because I think of at Whole Foods and how the team kind of works that is at store level and starting to get some proof points and you’re basically talking almost like a an independent store owner in this case. It’s a store manager and can you get that relationship to just get a shot to see if this thing works does it sell and I think you could do that REI which then could filter back up to the headquarters where you can have a shot to get in there.
I think it’s REI is no different than any other retailers long story short, is kind of find your proof points start small and then yeah then how do you how do you if you can’t even if you can sneak it into a store and show that actually moved their store that I think that kind of bodes well.
Steve: So what you just said is in line with a lot of the other people who are in retail you start at the small boutique shops, you demonstrate sales and you take that data and try to get into a couple of tests stores and like Whole Foods or whatnot and then hopefully the sales are good and that’s how you get in. I was just kind of curious what your perspective was. But yeah, it sounds like it’s in line.
Kevin: Yeah, well and again it comes back to you actually want to curate the distribution anyway, because you’re finding these Boutique shops as you called it and so, you know use it on one of the brands that have recently got acquired as I’m a big fan of this brand is Sun balm, which is think it is like sunscreen suntan lotion rights on care and these this group built this brand their Boutique equivalent was surf shop and how do they build it there? And then it kind of went to hospitality but they get those proof points, right and they build the brands together with this so they it’s a win-win that helps the boutique shops. If you will the surf shops and helps the brand and then you build it together and then you go. Okay. It’s time for us to expand the picture. We’re more available in the proof points are critical for those bigger stores.
The data is what ultimately is the proof point. You can only go so much on gut. So if the consumers picking it up and that’s why you want that data point then there were more likely to lean in the further removed you are from a business. The more you need data is kind of My Philosophy with the team.
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Interesting. So does that imply then that starting a company like this purely online is would be extremely challenging.
Kevin: Well, I think I think nothing is easy. I don’t think there’s any shortcuts. I think that’s a misnomer so I don’t think it’s easy at all. But I do think it can be done and there are a lot of examples of brands that are building through digital and building from the ground up so it can be done but it’s also very you know, and it’s very accessible because anyone can do it sure but that also means the barrier for entry is very low. So the Clutter is really high.
Steve: The competition is high. Yeah
Kevin: Yeah. So so I think it can be done long story short, you know, it’s Interesting as well that you know, I grew up in a more traditional CPG, you know consumer packaged Goods environment SC Johnson and I worked at Miller Brewing. It was a cauchy which is owned by Kellogg. And and what’s interesting about that is when you look at marketing skill set of what you needed then is is very different with the emergence of happening of the digital world. And so when you think about Talent those that work in it could be multi-level marketing to direct consumer marketing brands in the past where you go that’s not and I’m paraphrasing and kind of making this up but it’s almost like I was aren’t real marketers, but it turns out it turns out that that’s probably a better skill set than a traditional CPG today when it comes to the digital side of things sure. It’s just interesting how it’s changed a lot and pretty quickly in the last like even just like takes five years.
Steve: It’s changed a lot. Oh, yeah for sure. And actually that was kind of a Lead into my next question. So you got this company you take over it’s already got sales in a bunch of different channels. What was your strategy to grow it as much as you did in the past five or six years?
Kevin: The key Point here is I didn’t grow it. We did and I say that truthfully here’s the deal. There was a lot working for news. So something changed, but I will tell you that the foundation of what the product is what the philosophy was behind. It was really great team that was in place was also a really interesting because I thought it was really strong. So my Approach was this when I came in I actually first started not to try to change anything. I really just wanted to get in here and understand what was going on. And first what’s working. Where can we put a megaphone on it? How do we amplify that and then secondly then what do we need to stop doing? And then what do we need to start doing? Like what do we need to do differently?
Kevin: So that that’s kind of creepy. So when it comes to what’s working, I’ll tell you why I’m saying this is not going to be rocket science for the listeners out there, but I’m such a big believer that Biggest Difference Maker in every business, it comes back to the people. It just comes back to the team. And so I think what I helped bring to the table was a belief in what we were doing as a company to the team because they worked the team would like the business was growing when I came in but it was the growth rate was slowing if that makes sense
Kevin: And admitting not declining but it wasn’t growing nearly as fast and yet the business is still not that big so it shouldn’t have been slowing and growth which is part of the reason for a change. And so I think the number one thing that I hope I helped get a different lens for the team was to believe in what were we trying to accomplish as like kind of a mission for the company but secondly to believe in each other and ourselves and I think that’s where the self-doubt might start to happen. And that’s a vicious cycle which is why I think culture is the ultimate competitive Advantage not very exciting when people are looking for what’s the business strategy it truly is like that that’s Ultimately will sustain winning or not winning.
Steve: Interesting. Okay.
Kevin: Absolute conviction on it from my perspective. So that was that was one too. So then it was saying well, what do we need to put a megaphone on? What do we need to do? And so we were doing some really great things on the support side of things and what happens with a lot of businesses is some teams start to think about well, where can we take this where we go next and they think broad versus depth, right our breath forces death and I really wanted them to make sure that we were keeping focused. Like let’s all keep focus and not lose what we’re really good at. Let’s amplify that so let’s amplify the relationship with REI. Let’s amplify the relationship that we have with bleep feeds or any see in Canada. Like what can we do more with that? Not necessarily. Where do we need to go next? I’m not saying we don’t go other places, but that you start first with where your strengths are.
Steve: Can you give me an example of like amplification with REI? For example, like what does that mean? Exactly?
Kevin: Yeah, you know, so what we did on the REI friend is we came back to them and talk about doing unique items. We started to plan with them and give them a preview as to the future of what we were doing with Innovation. And how can we partner together? We weren’t doing that with that system before right? Once we launch with them. We were doing really good things, but we weren’t thinking of them as a strategic partner may be in part because we didn’t think maybe we didn’t believe that we had the right to do that because we were little tiny noon instead we came in and saying no, we’re like a leader in hydration growing clearly the number one tablet at the time and still up by far the number one tablet now and Cohen with a leadership position say Hey, how do we grow together?
And so then we started to develop plans together and then we started doing things with rei.com that we were never doing before terms of sampling. We increase the number of demos we did in store. So again to drive more velocity
Steve: I see.
Kevin: So we just did a lot deeper on Partnerships. We were doing some of it. We just went deeper and double down and put more Investment there.
Steve: Okay, that makes sense. And then the volume is naturally grew and the partnership’s grew deeper and presumably they would Market your products more too, okay.
Kevin: Absolutely, you know, one of the things we’re really proud of the teams just done such a phenomenal job you if we use REI as the example. Last year, we were we were runner-up for vendor of the year at REI, which is pretty wild knowing there’s a lot of different brands in our category and our category by the way was bigger than just nutrition. It’s like think of it as like water bottles and that whole kind of segment over there in the store and we were put up for vendor of the Year. And that was basically it came back to how we work with them how we treat them how we interact with them how we invest time energy and resources with them. So yeah, we went deeper and works for and I think for both of us.
Steve: Cool. What were some of the other aspects of the business that you Amplified?
Kevin: Yeah. So like I said that the idea of believing in ourselves really drives even better and faster. Execution in store. So it’s really the quality of execution. So that’s why I started with culture for you. One of the other things though that we did is that was to get momentum back. There isn’t massive change their here’s where the change really have and where the magnifying effect happen for the team is like, okay, We got her groove back. We got our stride back. I’m a big believer that momentum builds momentum is a Mojo builds Mojo. And so we got this momentum going great. While that was happening, We re-trenched ourselves and said what’s our nutritional philosophy in and basically the mission that we have is we Inspire everyone to move more our nutritional philosophy is to basically give you what you need and nothing that you don’t which is hydrant. You can feel this wasn’t formalized before and so what I did with the team was we step back into what does that look like?
That led us to having this whole live clean clean product claims Planet Clean Sport, and so we realized then I go. Okay. What ingredients Again in the current Nuun tablet that we launched with 15 years ago. Now what is in here that is inconsistent that we need to do better with our product because no one ever wanted to change the product. This was an interesting one, a lot of resistance to change a lot because people loved what we had and the reality was is we had when it launched originally an artificial sweetener, which because that kept the calorie count down in that capacity to keep the calorie count down that made it’s consistent with the science. We had a preservative in there for longer shelf life. We just had some ingredients in there that made sense of why it was developed but then we need to develop a nutritional philosophy and if it’s all about clean ingredients, I’m like, okay, we can’t have this anymore.
Truthfully, nothing’s easy as I told you before when we went to go develop this and we had our Kuroko manufacturer. They basically said you can’t develop a tablet with the philosophy that you’re doing. Are you I kid you not I believe the words were it is impossible and I’m like no we’ve got to do it. Otherwise, we’re gonna have to go find somewhere else to do this. We’ve got to figure it out and we did it,the team did it. With them. We did we completely broke down the Paradigm and said well, how would we do it and worked out it worked at it? And the reason I bring that up is you when you start with the strategy of the philosophy the mission and you go. Okay, what is consistent and what is inconsistent? Because good strategies not only what you will do, but it should be what you want do and so when we took those ingredients out change that we had a whole new platform meaning now, we’ve got a product fit has the performance and you’re not compromising on any ingredients, sweet. So then we go at that opened up a whole new market for us.
Steve: I see.
Kevin: From a business sense and the way I would position this when I’m talking to our board in our investors. Is this going to open a whole new market what really drove it honestly is what’s the right thing to do? What do we want to do? And if we make this for ourselves, this is how we do it. This is our mission that actually, what drove it. When you communicate your audience’s you need to make sure you talk in a language that’s relevant and matters to them. So when I talk for investors here’s the market that is going to open up to which was true. And that’s what happened. And so then after we went to an all natural all cleaning product, we ended up taking that momentum that we had proof points at the REI in the sport especially and went to all Whole Foods Across the Nation all Sports stores, and it was a whole new market for us.
And now we’ve completely changed the game. That was that was probably the game changer right there where it went to a whole different level and then and then we just keep on putting the gas down even harder because we’ve got to think we’re so confident in who we are and what we’re producing and why we believe it’s the best thing for you that it’s just it just keeps on it’s a self-fulfilling prophecy.
Steve: So since we’re on this topic of product since I’ve been a Nuun consumer for quite some time now, I noticed relatively recently You guys started introducing an a lot of varieties whereas in the past. There’s only two and it was easy for me to find that right. I just want the hydration after one. I’m going to have and then I remember when all these different varieties came. I was a little bit confused as to which one I should get. What was the philosophy behind that decision?
Kevin: Yeah. So that’s a really good point. Right arguably. You could say why even add any other products just so more of what you have which is the optimal hydration product that you’re talking about which was designed with the torture test of Adventure athletes an Ironman athletes in mind. Right like the people that are basically sweating and it works when you’re not sweating too which is what you’re talking about first thing in the morning. You’re like, you know, as you were talking about you’re saying I just take this first thing in the morning cuz it makes me feel really good and it’s because you’ve been dehydrating overnight to set also probably makes a lot of sense. The idea here is we said well is this product designed optimally for kind of daily Health occasions? And that’s where we were starting to think through hydration is needed. We need to hydrate throughout the day. How can we help that and what are different needs states that we can address through hydration?
And when we looked at what we’re now calling sport but original product is now cleaned by ingredients obviously, which we did many years ago now. That product is designed for if you will sweat preparing to sweat recovering from sweat, but it’s all around that sweat occasion. And so the other product we launched we said, okay, so we introduced we actually introduced if you’re called as a caffeinated version called Energy.
Steve: Yep. Yep.
Kevin: It’s the same product as just what caffeine and some B vitamins in there that was kind of an introduction. It’s like okay that makes sense the problem with that from a communication perspective which consumers didn’t totally understand. They thought they didn’t know it was the same product just with copying. So with one of the things that you’ve seen is we’ve had to simplify our communication, but I’ll talk to you through the portfolio really quickly and then I’ll say here’s the communication then we did a vitamin product. It was basically about daily health and it’s like the electrolytes are in their same complete electrolyte profile, but we lowered it because you don’t need as high as sodium levels. You don’t need 300 milligrams of sodium when you’re not sweating you do need it if you’re preparing for during or after the split, but if it’s just like I’m working away at my desk or if you you and I are talking to podcast, you know, I’d probably I’d love some electrolytes because it will make the water work harder for me get at the same time. I don’t need it as high.
So that’s when we came up with that and we added in 11 different vitamins and minerals that the research suggested that most people were deficient in so that way you’re constantly getting in vitamins and electrolytes while you’re hydrated throughout the day so that was the idea but it’s causing confusion back to your point. In fact since then, we’ve also launched an immunity product which is, you know, we looked at air born in emergency and we said well, what about these situations and we felt like what was happening with the current competition? And we have this philosophy of we had to start all over again. How would we do it? When you looked at the immunity side of things these products were basically getting an a vitamin C arms race. I’ve got 1,000 milligrams. I’ve got 2,000 milligrams. The problem with that is you can’t actually absorb all that.
Kevin: So that’s when we developed some pretty, so long story short. We have all these different products and it was causing confusion. So what we’ve done since then and just like in the last two months is flowing through it shelf and that’s what you’re saying is we have a Nuun sport that’s fpr sweat occasion, we have Nuun vitamins daily health and it calls it out on there. We have immunity to boost your immune system and even most recently just launched a rest product to help you get a more restful sleep. So there’s just different ways to hydrate throughout the day you need to hydrate throughout the day. Maybe we can encourage people to hydrate more for more Optimal Health and we can address different need states at the same time. That’s kind of the philosophy. We just have to be really clear on when to use it. Like which one do I use and when.
Steve: Yeah, so I guess what confuses me and this is kind of outside the scope of the interview but like if I’m taking a hydration do I need to take a vitamin one then or should I take both if I take the restful or the immunity that’s like four tablets, I guess right there which seems a little..
Steve: And so that’s where the confusion, I’d rather just take one and cover, you know, 3/5 of that
Kevin: Yeah, so if I was if you were to just pick one product, I think you would work with what you’ve been always drinking the Nuun hydration Court product a high electrolytes because it’s really good for any occasion. Is it excess electrolytes? Yes, because its water soluble you’ll just pee it out whatever you don’t absorb, but you don’t always need that high. So for those that want to dial in for that’s what we find is our consumers very involved. It’s like what do I need for what occasion and how do we deliver on that? Again, did you only what you need versus what you don’t and that’s why we have two different products for different occasions. So it’s a very fair comment though. Like I completely understand here because here’s the flipside the downside is so vitamins is a phenomenal product, but it’s not designed optimally if you are about to go out for a century ride bike ride because the electrolytes are going to be high enough.
Kevin: But it’s perfectly designed for you know again you and I having a podcast discussion right now. I’m just kind of relaxing and chatting because the electrolyte levels are optimal and I’m getting vitamins. I don’t need you don’t need even more electrolytes at this point.
Kevin: So I realized maybe a small confusion but..
Steve: I was just kind of curious what the business decision was. But I mean the business decision really is so you can move into new markets essentially, right?
Kevin: Yeah, kind of exempting from a personal perspective. You’re right. So from a business perspective what it would tell you this is when we launched vitamins and when we’ve launched immunity and then now rest they’ve all been highly incremental in terms of business volume to the current sport product the sport product continues to grow and then these additions have been incremental but also Nuun Markets new need States is what we’re addressing.
Steve: I mean now we’re essentially tackling multivitamins as well as Airborne, correct, right?
Kevin: That’s true. Yep. So it’s a new way to enter into the brand.
Steve: Exactly. Yeah and basically piggyback on what you have that’s already successful. Because I know for a fact that time are you taking Nuun every day instead of taking Centrum. For example, I might just take a vitamin, Nuun.
Kevin: Yeah, I think that’s fair. I think that’s fair.
Steve: So, okay. So back to the original thing we were talking about. So what were the things that you decide to cut out? So you we talked about what you Amplified? What did you not amplifier but decrease essentially?
Kevin: yeah what do you stop doing? Right? And so one of the things that I mentioned to you as we made the change in the product that was one of the things that we we really stopped doing was we said, how do we change the product and and turn this a different way the other thing that we did was we stopped looking for fast channel extension at the time. Now, we’re doing more Channel expansion because we’re ready for it, but we weren’t ready for it. So whether that’s the club channel the drug Channel we were going down those paths and behind the scenes and actually entered into stores and we weren’t doing great in those and so how do we pull back from that and that’s that’s kind of where we collectively said we need to Stop doing that and let’s go deeper where we are and really retrench to get stronger growth rates and then start to expand but don’t go too far out.
It’s those closer and adjacencies, you know, the reality is as our consumer tends to be highly involved. They want to read the ingredients. They want to know what it’s for which is why we can do different need States. If you go too far down the path of a conventional General market, we may not be relevant for them yet at this point and that’s what we are finding. So that’s one of the things that we did differently stop going after drug. Stop going after Club.
Steve: I guess that makes sense. I mean when you go after too many things you don’t do any of them well, and so I guess your philosophy was to just go deep and then once you’ve saturated that particular Avenue then look to expand.
Kevin: Yep, exactly. And by the way, you won’t really ever know a few saturated it because there’s always likely a bit more room to grow. So, I think it’s I think it’s when you feel like you’ve got and somewhat of an over index and now you’ve built up in a without a lot of data being smaller companies, you’re going on a little bit of intuition to say, I think I think we’ve got pretty good awareness now. :et’s go to the next adjacency of consumer and reach and then that’s when you go to the next channel.
Steve: I guess you can measure diminishing returns though, right?
Kevin: True. You’re right.
Steve: Absolutely. Maybe that’s it. Okay, cool. I feel like I caught you kind of like an inflection point right You released all those new varieties relatively recently. I want to say so what is the next growth face that you see for Nuun?
Kevin: Yeah, I believe there’s still a few more needs dates that we believe that we can extend to for hydration, like taking the tablets hydration plus so think it as electrolytes but lower level than the sport electrolytes plus this so electrolytes plus immunity electrolytes plus to deliver on a more restful sleep. So there’s a few more indeed states that we have in mind that we want to do on that. There’s also some different platforms that we think we can build from and reinvent a few different categories out there. So I can’t talk too much about that. But if you think about nutrition uncompromised and take it from a supplement perspective, but that probably should be a good indicator of okay. So what are some sleepy categories kind of stale and stagnant that that really need to be reinvented and so we’ve got our eyes on a couple of different categories where we’ll build a platform to reinvent.
Kevin: I’ll give you an example for that. That’s not that’s not Nuun, but it will give you a chance to give you context, you know. Kudosuour friends over at Justin so whichever one probably those that know it and most people do now as an almond butter. If you go back in time when they went into the category, it was a stale peanut butter category selling for a buck .99, $2.99 a jar. Now people are buying anywhere from $7.99 to $11.99, $14.99 for almond butter because it’s a better quality and it changed the whole category from peanut butter to nut butter and I think we can go into a few different sleepy categories and get you to rethink the approach in terms of better nutrition higher quality and but just more efficacious.
Steve: Okay one last question for you that I was just kind of curious about in terms of your online versus brick and mortar strategy, which do you put more emphasis on which is doing better for you and just kind of what is your outlook on that?
Kevin: Well, there’s no question in my mind. That digital is where the fastest growing Market is period out there in terms of consumables and beyond that. In fact, I have a fundamental belief that two things here, passes. The world is moving today will never it’ll never be too slow again. So if you haven’t got your digital capabilities up you’re already behind and you better get caught up pretty quickly. So that should let you know that I think digital is definitely work emphasis needs to go that being said, there’s still a lot of room in grocery and traditional channels where people are shopping and and it’s it is the bigger part of our business still to this day. I believe the bigger growth area of our company over time is definitely digital.
However, I think there’s still a ton of growth in the more traditional bricks-and-mortar area. So it’s the answer is it’s a little bit bag. It’s yes, it’s yes on both but I would lean digital because I do think that digital did not see other philosophy is digital is changing everything. In life, period. So we really need to make sure we capitalize on that. We’re seeing growth happens pretty close on both. It’s a little faster on digital but it’s also a little bit smaller base granted It’s over time that the gap closing.
Steve: was going to ask you was on the digital side. What is there left for you to do in terms of growth? Is it just doing more which you already have or are there additional avenues that you have to try?
Kevin: Well, I think one of the things that we’re learning that we need to get better at is our own direct to Consumer website. I think that less is revenue but more about learning whether that’s data science Performance Marketing. We are all those terms out there. We’re OK at it. We’re absolutely focused on how do we get better at it? And the idea here is how do we learn more about our consumer? How do we offer more toward loyal consumers which will drive higher retention and loyalty and I think that’s a really big area for us to get better at and get better at quickly on the digital side of things.
Kevin: Yeah, you know, there’s obviously Amazon and online stores or out there and we’re growing really well that’s not going to change but I think the area that’s very different for us is through our own website because at that point you have you own all the data and then now we can really build a deeper relationship and understand what we’re doing well and what we’re not and in their consumers need.
Steve: You know one thing I just noticed because I was shopping on your site earlier. I‘d buy Nuun and I consumed it consistently, but I’m not on a subscription and that was actually looking on the site for a way to save money on a subscription but it wasn’t maybe already have one but I could not find it at least for me as an avid consumer. Like I think if I was incentivized to get on a subscription basis, then I would join instantly. But anyways..
Kevin: We’ll make, I agree with you. I agree with you. It’s definitely in the center part.
Steve: Okay, so can kind of conclude this interview where can people find more about your product and if they have any questions for you or want to contact the company directly. Where can they get a hold of you guys?
Kevin: Yeah, absolutely. You know, we’re really fortunate you can find us in a lot of stores online. We already mentioned we talked a lot about REI. The fleet Feats of the worlds are also at Whole Foods and Target, Kroger stores. So we’re basically going to find us a most of most of the grocery stores and stores where you shop today most and then obviously online look us up on any social media handle. So Nuun hydration is the handle for I think all of them being Instagram, Twitter, and well Facebook just look up your hydration. If you want to find me personally, my name is Kevin Rutherford in my Instagram and Twitter handles a little bit different. It’s the clean_lantern that’s clean underscore lantern and the team the team called me that one and it was all about Beacon of light for her planet the planet and humans and all the earthlings that share it with us. So that’s the idea. So but yeah, you can find us there and really appreciate the time. It’s been really fun chatting.
Steve: Yeah. Cool. Thanks a lot of come the show Kevin really appreciate it.
Kevin: Thank you.
Hope you enjoyed that episode. Now, I personally love getting an inside look at how my favorite hydration tablet company has managed to grow to an eight-figure business. For more information about this episode, go to mywifequitjob.com/episode273.
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