Creating One of the Largest Specialty Beverage Distribution Companies with Danny Ginsburg of Real Soda in Real Bottles, Ltd.
Real Soda in Real Bottles, Ltd.
Danny Ginsburg founded Real Soda in 1991 to bring back great bottled sodas to the mainstream after experiencing a decade of beverage degeneration which made it necessary!
Real Soda believes that soda pop should be an occasional treat. It is maximized when consumed in an appropriate container. That being a cool glass bottle.
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Javier: Hello and welcome to the Javier Morquecho podcast, where entrepreneurs and corporate executives and thought leaders come to share their stories. Check out javiermorquecho.com to learn how to start, grow, and scale your business online from leading experts who wanna help you succeed. I'm Javier, your host for the day.
We're joined by Danny Ginsburg, the sodas sommelier at Real Soda and Real Bottles Limited. Danny founded the corporation in 1991 and grew it to be one of the largest specialty beverage distributors in the United States with affiliates all across California and beyond. His company is perhaps the most substantial purveyor of glass bottled soft drinks in the United States with over 2,000 specialty beverages sourced from all over the world. If you ever had a beverage in a glass bottle, you can be sure it was provided by Danny and Real Soda, a soda-licious paradise of effervescence excellence.
So, hi, Danny. Welcome, thank you for being here today.
Danny: Hello, Javier. You sound like you're a very good student of my "popaganda."
Javier: Oh, okay. I am a good student of your "popaganda." In today's conversation, I wanna talk about how you started, grew and scaled your business. But before getting into your story, I want to talk about...start by asking, what is the number one challenge of being a distributor?
Danny: The number one challenge of being a distributor? I guess it's essentially trying to maintain a sustainable business where you can provide to the customers that which, you know, is your mission to do and be able to pay for the cost of doing of it, and keep the business doing. I think that's the one thing that... You can have an idea, but if you don't really have some business sense behind how to keep it alive.
You know, sometimes people just go all out, you know. There are two ways. One is that someone can just go and just say, "Oh, you just charge less than everyone else." You know, and I've have had people like that, do that, even in the realm that I deal with. And then at some point, their engine block cracks and suddenly they haven't set aside any money for that and they just stop, just disappear overnight.
But then you have other people that bring in all these investors and so forth. And they go to where they basically spend tons of money to show their numbers and to impress people with, "Oh, we got here, we got there." But they don't mention, like, "Well, we have to pay it, you know, $10,000 slotting fee and we have to hire brokers for this, and so on and so forth."
So, you know, I do mine more conservatively. But most importantly, you know, you have to know when to say no. Like when people say, "How about if you give me buy five, get three free?" You know I do the math in my head really quick and say, "Well, I only lose $1.70 a case that way, you know." And I've had people say, "Yeah, I know but you'll make it up in volume." I'll go, like, "What? If I do volume, I'll lose less?" Because if you get a large volume at a loss, it's just a large loss.
Javier: Yeah. Can you just talk about being a distributor? You mentioned slotting fees and other things, so for people who aren't familiar with that, what is the terminology and what is being a distributor to you?
Danny: Well, slotting fees, or... They're kinda like paying a tax to get into a place. So most major supermarkets and chains in general, you can't just go and say, "Hey, try this root beer. I swear you've never had such a good root beer in all your life. And I'll let you taste it. And I'll write down the number of cases you want on your opening orders. I know you're gonna buy it." They turn around and say, "Well, you know, you have to pay so much per skew, which is like the barcode on the bottle, in order to be listed in our place."
So they're not concerned with whether it tastes better or not. Like, you could bring in a very inferior root beer, but if you have money to back it, in it goes. So that's why when you go to really large supermarket chains and so forth, you will see, you know, these really kind of what I would consider, like with the variety that I have, not worth ever opening and drinking the products, just, you know, floor stacks of them.
Because every part of... Those markets are much more kinda like a mobile home park, you know. And if your mobile home is parked near the swimming pool, it might be a higher space rent than if it's parked over in the corner near the dumpster. But the bottom line is, they don't just let you park there and spend the night and drive away and say, "Hey. Thanks a lot." `
So it's the same thing. Now, when you're selling sodas or beverages, or anything really, to some corner store, something like that, it's much more of a traditional sense. That you just walk in there, you say, "Look at this. Taste it. What do you think? Here's the price." And then they'll say, "Okay, I'll take a case or I'll take 10 cases," or whatever it is. So it's, that's why a lot of...if you're looking for, and at least in the beverage industry, specialty, quality, good beverages, and of course you'll find bad ones too... So, you just gotta discern, but you got to go these independent places where the persons standing at the cash register is probably the same person who orders and owns the place.
Javier: Yeah. I like that. And, yeah, because as you do go into major stores, you see a lot of the same product. And what would your advice be for beverage companies or just any kind of consumer product companies to get into to large retail stores? And is that even a goal that they should have to get into the big chains? Or should they focus on the smaller stores to get into?
Danny: Well, the smaller stores are usually where everything, where people notice the new things. So, you know, if you have not even gone into the smaller stores and you go to a supermarket with a product, and you say, "I want you to try this and add it. But I'm not giving you a slotting fee." I mean, your chances of getting in there are like, it's like, man bites dog. I mean, it's just like...it would just be a miracle.
The difference with, well, I guess with like everybody to an extent, you have to be...You have the person who makes the decision has to like you. Not just your product, but they have to like you and your idea. And they have to like the idea of working with you. So there will be, like in our case, we've had supermarket buyers who have seen what I'm dealing and say, "You know something..." Like, they'll say to themselves, if I bring this in even without a slotting fee, the sales are gonna make people pat me on the back and say, "Wow, you really are a visionary. You found something good. And you got us in first, before all the other supermarkets."
So, and I've had people like that. And so, but at the same time, sometimes, someone like that moves on to another place. The new person comes in, who used to work for whatever, and they've got their friends, and whatever there. And they'll just remove your section or they'll be very, like, rigid or they'll be, you know, like, "Yeah, we're gonna keep it. But we're not gonna add anything to it."
There's a lot of personality that goes into it that has little or nothing to do with what you're actually selling them.
And it's irritating because sometimes because people come in and you have that meeting with them. And you say to yourself, "Well, let's see. At this place, I've been working with these people 20 years, they've had 6 people in this position. So that means the average life of one on these people is three years." And you basically say, "For the next three years, I'll try to stay here until the new one comes." And it really is like that.
Javier: And do you feel that it's a similar process for beverage companies trying to find a distributor, that they should go with the smaller distributor first? Or they should self-distribute or how...should they go to big distributors? How can they get their product out when they're just starting out?
Danny: Well, that depends a lot on what...how they're put together. For example, you know these ones that have investors or that are built by investors, where the people running it aren't even necessarily investors, they're just getting a big salary, whatever, those type of people are gonna wanna show big numbers and fast. And so they're gonna probably want to go with a big distributors.
But the big distributors, usually, require the supplier to pretty much do all the work and they operate more like logistics. And you know, if you have a product that you want to have the distributor actually learn about it, talk about it, talk one on one with people to try sell them on their own, without necessarily your help or with maybe, you help a little bit or have one person in the street helping out, you need to go with somebody who's going to be more personable.
The big distributors, usually...independent places don't like them because they don't treat them like they're important. And in a way, they're not important to the big companies because the big companies are concerned with, you know, driving around, you know, like a semi or a side loader truck and delivering large quantities and some place that's on the corner that buys five cases to them is not worth it. If it's an alcohol distributor, for example, they... If a place isn't licensed to sell beer, wine or spirits, or whatever, they won't even bother, you know. And so the problem is when someone's sign up with someone like that, they sometime bar themselves from a lot of places.
On the other hand, you know, if they sign up with a small distributor who has no money, then they end up getting in a situation where they might get their stuff out there but gradually a bill will be build up that never gets paid. And then they'll lose their distribution and all the money from the bill not being paid.
So that's another...it's a little Russian roulette, but it's the same way, you know, in a roundabout way, it's a microcosm of what a distributor deals with. We're trying so hard to get someone to get their product. They buy it. They get a few deliveries and then never pay the bill. And then you gotta take them to court, you know, and so it's a... But business, I guess, in general is that way, you know, you have to... There's a lot of psychology in it really, you know.
Javier: So who is your ideal beverage company that you want to take on to be a distributor for?
Danny: Well, it would be a company that... Well, it depends. One, if it's a product that everybody wants that hasn't been available, that you can somehow figure out how to get, then that's always very attractive. Because there are some brands which... You know, I mean I can think of some off the top of my head that people remember from the past but have been bought by large companies that have just shelved them. And if I had them, people would buy them like that, you know. So those are, of course, very attractive.
But the other ones are, where they have like an owner or a manager. Well, you know, generally, the actual owner, who is personally involved that wants to grow with you. Like, when we do a contract with the supplier, we set it up so that they're incentivized to assist us initially in selling it. Because when, for example, if you have even a small company where the owner will say, "Come out to Los Angeles and ride with me on the road and visit my customers with me." People are impressed when the guy says, "Yes, I invented it. I did this and that. And I added this and I tried it this way. And I did that. And then I got this machine." And, like, you know, they tell the whole story. You know people feel a connection and they're motivated to sell this stuff and even the shopkeepers will tell people, "Yeah, the guy that invented this came into my store."
And, you know, and these are... You know, when you're trying to sell all kind of specialty types of sodas, people, the story behind it, the ingredients, whether it's made locally or not, all these things, they play into it, you know, especially when you're, you know, trying to appeal to, let say, hipsters. And so when hipsters like a good quality product, but they like a good story to go with it. They don't just like some...and they don't like it if it's owned by a major company that everybody knows. They like...oh, I'm not gonna say they don't like it, but they prefer one where they feel at least that they're helping, you know, sort of an artisan sort of person.
Javier: And do you have any certain number of sales or some minimum quantity that the company needs to have before they reach out to you?
Danny: A minimum quantity that like...?
Javier: Like number of sales that they make on a yearly basis or every month or how many stores they're already in before they...
Danny: Before we take them?
Danny: No. I mean, we have people that say, "I'm gonna create the soda." They haven't even created it yet and they talk to me about it. And I go, "Yeah, I'll buy that as soon as it's..." I mean, I base it on, you know, basically the people, the product. And it really matters to me if, I mean, if they won't do a contract with me, I'm a little skeptical because, unfortunately, distributors can be used by people as a stepping stone to get to the big guys, so to speak.
And, which is not necessarily an evil thing. But when you do that and then you take all of the goodwill that the little guy's done and just give it to the big guy or entice the big guy with it and don't compensate the little guys, it's really not fair. So I have a contract that I do with it. And most of the people, if I...my contract, I mean, I wrote it and it's just a two-page contract, but it's very basic and very obvious. It asks for the things that people who want to work together to build something would expect of each other.
And when somebody says, "Oh, like, I'm not gonna sign that." You know, to me, it's like, well, that's a blessing because, you know what, what if I brought this on, you know, the guy would take it from me, give it to someone else and we'll be arguing and screaming and calling each other names. And so, it's better not to work with someone like that from the beginning.
Javier: Yeah. And so, a lot of what you said earlier is a lot of how the business works. It's related to people and working with people. And you said, like, the buyers at the...like the grocery stores or other supermarkets, they have to like you and they have to like your story. And so I want to talk about, like, what is your story? And just what is Real Soda anyways?
Danny: Oh, well, okay. First of all, I'll grab a drink of Santa Lucia. Santa Lucia, gee it's good to see you. Ah. Oh, in Italian, you say Santa Lucia il medio, can't you see it. That was an Italian guy, when I said that, he said that to me right off his head. I'm like, "Oh, my god, that's perfect. It rhymes."
So, well, yeah, basically, here's the thing, my history is very unusual, okay. So ever since I... When I was a, like, a toddler, I collected the lids off of baby-food jars. Okay, and this was many years ago before they had the, you know, pouches or any of this kind of stuff, you know, that they have today. And they used to stamp the, there was...and they didn't have best before dates then, but they used to stamp stuff on top off the lids. Like, and the numbers and letters they stamp where a code. And that code always was the flavor of the baby food, or whatever you call it, you know, like, creamed corn or custard pudding or whatever.
So what I was able to do is I was able to look at that little code. This was like before I was old enough to, like, read or anything like that. And I was able to look at it and tell that's creamed corn, or something like that. And my relatives used to actually quiz me on it, going to the closet and stuff, you know, the pantry and read them to me, and I would tell them what it was. And they'd be like, "Wow."
So, but what happened is that, you know, my brothers and I, we got too old for baby food and so this...I was really like into this. And then suddenly, the only time I would ever get any of these lids was when one of our babysitters, who worked at someone else's house, would bring me a bag full of lids from some other baby. And then it got to where it was, like, I remember one day, we just went to the recycling center, you know, and just pour them all down all the shoot and that was the end of it.
So I ended up kind of like, "Ew," like that. And my mother, when we're on a camping trip, we saw a Pepsi bottle cap on the ground. And I said I was bored and everything. And she goes, she says, "Why don't you collect something? There's something you can collect. That's a bottle cap. It's kinda like a lid but you'll always have those all your life. And so I picked it up, and I started collecting them. And, you know, I did that, you know, for...like, I still do it today, so, obviously, forever.
But what happen is, as I was growing up, the bottles were disappearing and the cans were coming in, and the plastic, and so forth. And so, it kind of drove me into a direction of like, if I go and buy a beverage, it has to be in a bottle with a pry off cap because, otherwise, I mean, I'm helping the death of my collection, you know. It's like by buying the other than bottled things. So I got to where, like, when I got a driver's license, when I was 16, they had really gotten rid of returnable bottles in Los Angeles, but they still have them in other cities.
And so I started driving my car to, you know, like Bakersfield and to Tijuana, Mexico and stuff, and buying soda in bottles and bringing it back so I can that I can ensure that every time I had a soda, it was in bottle. And so when I would bring the sodas to school, when I was in high school, in my backpack, and these other people would be drinking their, you know, their diet coke in a can, or whatever it was back then, which... Because it was kind of a new thing even to drink soda, like, you know, in the morning. And so, which is for me, was no big deal because I figured, "Hey, it's another bottle cap. Why not?"
And so, these kids would see me drinking glass-bottled soda, but they'd be the bottles that you see only see in the TV advertisements, that you would never see actually in the store. And so I... The kids would say, occasionally, you get some kids who would say, "Hey. How do you get those? You know, is there a way to get me one?" And I'd be like, well, if you give me 35 cents, I'll buy one of these, I'll bring it to school, you drink it, you give me back the bottle and the cap. And it's 35 cents. If you don't, I'm gonna charge you for the deposit."
You know, and so basically, I started doing that. And at some point, I ended up with an entourage of people that it was a daily routine to bring that there. I had matched the 35 cents for a 16-ounce returnable soda to the price of the fountain drink that school had. Because in those days, they didn't ban sodas and so forth. So, it was cheaper...it was the same price as that, but it was better quality and it was much more liquid, you know, and less ice, obviously.
So, basically, I started doing that. And I started going to street fairs and things. It started like, I was driving out to other places, procuring soda and finding venues to sell it. And by the time I was in the university and everything, they would hire me to do these like functions where I would serve things, But I've only charged for the bottles that were open, so on and so forth. And by the time I was ready to graduate, it basically...I had, you know, like, a kind of sprawling little customer base and so forth, and I decided, essentially, you know, why don't I get a business license and see if I can actually make a living doing this. That's kinda how I started.
Javier: Yeah. So, in the beginning, why were you so fascinated about collecting bottle caps?
Danny: Well, I don't know why, exactly. I mean, even my little daughter right now, she'll like...Like, if I had my shirt here, it's got the Real Soda cap, you know, and she'll, like, reach up and touch it, you know. So it must be something in our genes, I guess.
But the thing is, that it just... I don't know. You know, it's kinda like collecting stamps or coins or anything like that. You know, you go around and you're like, "Oh, here's one that has a red circle around the outside. And this, the other one, has a blue circle on the outside. Or here's one that's Pepsi Cola Bottling company of Torrance, California. And this one is Pepsi Cola Bottling Company of Bakersfield." And then after a while, let's see, okay, I've got LA County, I've got, you know, like, Kern County, Fresno County, etc., but I'm missing Kings County. Oh, there's a 7Up from Visalia. Yeah.
So I would, like, get a geological survey map and I would basically color in the counties. And then it comes, like, "Hey, I don't have any from this county." And it'd be even like, you know... Like for example, when I got my driver's license, I would get these friends and we would go on a road trip to that county to see if we could find any beverages made there, you know. I mean, you know, it's just kinda one of these things we did. And it just, you know, everything it came to like getting all the different states, you know, getting all the countries, you know, kinda like, you know, filling in all the gaps. And it got me interested in languages because I would like to find bottle caps from around the world. And I would try to identify all the different...
Daughter: Hi. Mommy.
Danny: It's my little daughter.
Danny: So, basically, yes, I would try to get all these things and, you know, basically, it just, you know, if I would go on travelling, for example, like even with...it doesn't matter where I'd be going like Europe or I could go to Brazil and something like that, you know. And, you know, instead of raising over the Louvre or whatever, I'm like, "Where's the supermarché?" You know, I gonna go find, "Oh, look, they have Jimmy in bottles here," you know, and so on.
And so that was my thing, is that...and it always is. I mean, even to this day, wherever I go, it's like, if I go to a place where everything's in cans and plastic, it's like, "Ah." It's like, "What am I gonna drink here?" You know, it's like, it becomes like really an important thing. I'll even...now, because we have the internet and everything, I'll look up in advance, like, what do they have here, like try to find out so I can estimate, you know, and if I don't know the place, you know, how can I can I quickly get a stash of bottled sodas with crown caps on top for my general consumption.
But what's interesting when you do that is you discover new and interesting things. So when you're able to discover new and interesting things, I mean, in around of way...Like I say when we talked about, like, how the business is derived from this. When I was just buying things to get the bottle cap, I realized there's a lot of great stuff out there, which, if I didn't, you know, didn't buy this to get the bottle cap, I would never have ventured forth to try it, you know, because it's just one of those things.
So, basically, you know, that's kind of what got me into, like, when I got my business license, I'm like, well, I'm gonna try to get like, for example, Cheerwine from North Carolina. It's like I had the bottle caps, but I never try the drink. And so I went through all those trouble, it was before the internet, the early '90s, like 1992, to try to find out what's the phone number for Cheerwine, you know, in North Carolina. I found it, called them up, I asked to speak to, you know, the owner, and his name was Mark Ritchie. And they're like, "Who are you?" You know, like, you know, "Where are you calling from? California? They don't have Cheerwine in California." "You know what? But, like, yeah, but we could."
You know, and so, it was really exciting. It cost me a ton of money to get that and like Ale-8-One from Winchester, Kentucky was another one, you know. And I would, but I had, like, I actually had letters from these people from when I was a kid and I'd sent letters asking for bottle caps. So, I was able to, like, and those was before the internet or anything, fax them the letter and they're like, "Wow. You know, like, way back in like in 1978, we've sent this guy stuff. I can't believe it. He's like, he wants to buy from us, you know."
So I started going in and getting these things and just getting entourage of glass bottled sodas. And, you know, when I would go to certain places like in Hollywood and stuff like that, and I would basically, you know, show them to people and so forth. And people would, like, just be absolutely, like you know, amazed at all the different things and so forth. And they'd want to try them out. And when they would put it on their shelves in their little refrigerator and so forth, just random customers would come in and try these things and be like, "Wow. This stuff's great. I never had anything like it." Or you get the people who were from, say North Carolina or wherever it was, and they would go and they're like, you know, tell their friends, "Hey, you know where you can this stuff?" you know and so on.
And gradually, that's kinda how the business started growing is that I basically was able to get things and get them into more and more and more places...I'm sorry. Okay. And the...
Javier: Yeah. I was gonna ask, yeah, since, yeah, your baby was there, like, how is it running the business and being a father and a husband? How do you maintain your business life and personal life? Does the business consume all your life? Or how do you make time for your family and all that?
Danny: Well, it always has to an extent. I mean, I met my wife after I was already in business, you know. So, basically, yeah, she started working with me. She was a human resources psychologist and of course, we have to hire people at our business.
And that is one part of the business I don't know really like, is the procurement of employees, and so forth. I mean, we have some really good people we've had for years and years. And they're wonderful, you know. But the, you know, the looking for people and the ones that come and work for a little while, and then they get all mad or whatever because, whatever issues they have, you know. And we're just...
You know, it's interesting, you know, employees to an extent, you have the ones that really wanna work and be part of a business. And you have the other people that just wanna get that paycheck and go. And there's some that have the concept of, "Let's do what the company says, get the paycheck and go." And then the are some, "I just want the paycheck and I don't care what the company does. And I don't care about their survival and I don't care about their image." And, you know, for me, it's hard to deal with that because my mindset does not, you know, understand really the concept of receiving money from someone and not doing what I'm paid for. You know, it's like, I really, don't really know how to reconcile that it my mind.
And so for that reason, it really helps me to have my wife handle that. And she handles also things like, you know, whatever, insurance and all these, you know. I'm focused on soda and the basic accounting logic and things like that. You know, when it comes to all those side things, it's not that I don't know how to do them, but I'm just thrilled that she does that for me because it's just not...It's not my area of interest, not my area of expertise.
And, you know, like our little daughter, she's very small, so, you know, it took, for the first year, we didn't even give her any soda because we didn't want to per se get her hooked on just soda. But boy, when she started tasting it, you know, now, everytime we open something, she wants to have a sip of it or something. So she's definitely experimented a lot of things, although some of them, really esoteric things, she doesn't like. But it is interesting to see how some of it...it doesn't necessarily have to be really sweet or lite, she will like a pretty big variety of the drinks.
It is a little awkward sometimes, you know, when, like, with anybody, I'm sure in any business, whether they're the owner of the business or employee or whatever, you know, when you have a little baby or toddler who's...you know, wants your attention and you're torn between I have a deadline, if I don't do this, or I'm gonna be fine, you know. It's awkward, you know. But you have to do what you have to do.
And to an extent, you know, it's like she's too small for me to take her on my delivery route because the delivery route is...you're dealing with, you know, sometimes, like especially now, high heat. You know there in Pasadena, it went up to 109 at one place, it was...I couldn't believe how hot it was, you know. And you can't take a little baby toddler on that, you know. And so, you know, and not to mention there's a risk of, you know, you're lifting cases and wheeling things across streets, where there's cars and everything. When you have a toddler that needs to be holding your hand, you can't do that.
So, the only time she's been with me on anything like that was when she and my wife are with me and we're delivering maybe something out of my wife's car. We intend to have reason...I don't have like a passenger car. I only have a huge delivery van and my wife has an SUV. So, sometimes, we deliver in her car with my daughter along. But, and so she's seen that. We've done a couple of festivals but the festivals don't allow little children because they're afraid you'll give them beer or something. So it's a little awkward because before she was born, we did all of that together, 100%. So now, I have other people, you know, I've all these beverage people that will accompany me to those but it was kinda nice to do them with my wife, you know.
So, I don't know, as she gets a little bit older, you know, I wanna involve her in it. I already helped...have her like when we're stamping checks. I'll put the stamp on top of the check and then she'll bring her little hand over and boom. And so I'm trying to teach her that because a) it's fun, you know, the kids love to do little things like that. But I definitely want to, I mean, I see... Like I say, we're talking about employees, you know, there's some good ones and some not so good, you know, and I like the idea of teaching a child from day one, that, you know, the way you earn your survival is by learning how to do things and doing them right. And understanding, you know, everything, the finances and responsibilities and accountability and all that other stuff.
So it's very important to me that while we're raising her, and she's obviously too young now, but as she gets older, we want her to understand these things. And we can give her maybe little, like, interesting tasks to do. And say, like you do this, we'll give you like a dollar or five dollars or whatever. Just because, I think it's very good for the formation of a person to sort of have that understanding from an early age.
I think that's, like when I...the employees that we have that are good, they get that. They totally understand that. They understand if we're desperate to get something done a certain way, it's not because we're, you know, mean or whatever, it's because it's what needs to be done. And there are people that don't understand that. And that's very hard to work with people like that because you can't clarify or explain to them in any way. And then they get angry at you. And you can't...you know, you're at a brick wall, you can't...I mean, realistically, they move on, you know. And it's a...so that's a part of the business that's not really my favorite. I just like to focus on the beverages and the customers and that sort of thing.
Javier: Yes. So, you still do deliveries where you're actually going out and doing the deliveries of the beverages, so why do you still do deliveries?
Danny: Well, I like to do delivery and the journal. That means I like to finish up before it gets dark. But the thing is, that why do I do it? Well, first of all, I always have so I would have "quit doing it." And what are the various reasons?
Well, for example, a lot of these customers that I have, I've had for years and years. I've had them for so long that they've had...I've seen them have a baby and have the baby grow up and get married and have their own kids. It's almost like being like, you know, the milkman or something. You get to know these people really well. I really like my customers, in general. I mean, it's fun. It's really hard work, but it's actually a release from the stress of being, you know, writing emails, and all of this other stuff.
You know, I like traveling and it's not exactly traveling to drive up to Pasadena or West Lake Village or whatever, but it's a, you know, they're parts of it on my route, you know, I get to catch a nice sunset on the coastline coming home. You know, but it's not just that. It's also exercise, I mean, I like to eat what I like to eat and drink a lot of soda, you know and stuff like that. And, you know, if you're not active, you know, it grows on your belly, you know.
So, basically...and then, of course, what's really important is, you know, the beverage industry has a ton of new beverages coming all the time, new beverages, new distributors, etc. And on top of all that, Los Angeles, which is where I'm based, is one of the places that pretty much everybody eyes as the prize. Everyone wants their stuff to sell in Los Angeles.
The killer is that rents are high here and everything, and people don't have the shelf space. I have 3,000 different drinks. The only place you're gonna find all of them is in my outlet center in Gardena because there's no store that'll make space for 3,000 drinks, you know. So even the ones that sell 300, 400, or 500 different sodas, they're great, they're wonderful, you know, like, I guess, avenues for me to sell, but someone goes there looking for a bunch of things that I sell, there's a bunch of them that these places don't have.
So, you know, I mean, it's an interesting thing. I mean, Los Angeles is one of those places that there's a lot going on and if I weren't on the road, going in and out of these stores, a lot of things would happen unbeknownst to me. So it behooves me to be aware of all of these things, to be aware of, you know, competition encroachment.
I have, you know, when I started out my whole business, I mean, I got a lot of flak from people like, "You know, hey, kid, you're living in the past. You know, the future's can and plastic." And I really say, "Hey, don't be so negative about the future. It doesn't have to be that way." You know, and people would laugh and say, you know, you're just a kid collecting bottle caps and you know, you think you're gonna make the business doing this." And my parents too, the very beginning, they were like, "This is...like, you're educated and you're doing this, a waste of all of our money, etc., etc., etc."
And it took time, you know. And it was a milestone each time, you know, it's like a... I think it's my mother was convinced I was doing the right thing earlier than my father was. It took longer for my father to be convinced, you know. But there were certain points where each of them kinda like pretty much, you know...Well, I always liken it to, when they went from complaining to bragging. That's pretty much when I figured, "Okay, I've got that covered. Check that one off as done."
But you know, it's interesting, is that it went from being the sub-secure guy selling all these unusual things and so on, you know, of being like, sort of a, you know, a corny distributor of obscure products to one of some of the bigger...the beer companies and some of the other food service, and like grocery companies, taking in some of the brands we had. Part of the reason why I end up getting contracts now is because a lot of the really good stuff that I had was taken away from me after I had built it. And to this day, I still have these images in my mind from the early '90s, of, you know, the Italian distributor wheeling a stack of San Pellegrino into a place that I had convinced to buy it, you know, but then, they had it too and they were able to beat me on the, you know, buy five get one free or whatever.
There was also, I mean, it's just so many things. There's circumstances where a supermarket chain would have my entire set removed and replaced with a somewhat similar set by a competitor, you know, that they had, whatever relationship with or that they've gotten some deal from, and so on. And so, it's a, you know, in a way, it kinda showed me, "Okay. Well, I guess you're accomplishing something, if you have people willing to take it away from you like that." But on the other hand, it kinda sucks that you go through all that work and that kinda thing happens, it makes you, you know...the people that owned the companies that agreed to that, you know, makes you upset at them and the whole nine yards.
So, you know, part of my reason, that I have a lot of where I had contracts with people is mainly to make it more of a collective effort. You know, to make it so that they're happy to work with me. And when I get to a large amount of sales, instead of them taking it, they say, like, "Well, like, we have like a buyout clause." So they say, "Will it be too expensive to get rid of you?" Well, it's not like they just keep me because its expensive to get rid of me, but if they're contemplating it, they might look at that and say, "Well, it might be better with this other distributor. But, gee, what else would we have to pay all these and he's done all these building." And it's, we're not doing bad, and what the hell, just leave it, you know, which is what I want.
Because when I'm out there, distributing all of these products, it's embarrassing to be selling something to someone for years and years and then say, "Guess what? We don't have it anymore." You know, it's...after you've been telling him how wonderful the product is for 10 years, you want to keep selling it, right?
So, you know, there's a...but I guess, the difference to this, you know, I'm the type of person that I'll probably be doing this until I'm like, you know, old and walking with a cane and so on, you know. I don't...it's much more common for people to start a business now because they want to impress somebody and sell it off for X number of thousands or millions of dollars and move on to something else. And a lot of people, their life plans are like that. They don't really plan on starting something when they're in their 20s and doing it when they're 80, 90 years old, passing them on to their kids, if that's what they're interested in, and so on and so forth.
But I'm, I guess, more old fashioned that way. I don't really... You know, like someone once asked me, "Hey, would you like to get investors?" And I'm like, "No." You know, and then, "Would you like to, you know, sell your company?" And I remember my response was, "What would I do?" Like, I'm not old so why will I like to sell it and do what? You know, take the money and throw it in the trunk and run around and go to the supermarket until I'm 100, or what...you know, I mean, I don't... You know, to me, the concept of selling it is foreign, you know. But there are a lot of other people, they just want to reach some number where they can impress somebody and sell their company, you know.
So, I guess in that sense, it really...everybody's different, you know. Who's to say that my mindset is the same as someone else's? But on the other hand, when, you know, when companies are selling me their products to a large extent, you know, I think a lot of them are impressed with the fact that they know that if they're selling me something, you know, today, and they're still in business in 2050 and I'm still in business in 2050, I'll still be selling their product, you know. I mean, I won't say, "No, I'm sold off. You know, the Coca Cola company bought me, you know, or whatever company, you know, I don't know, you know, whatever, you know, AT&T. I don't know, but whatever."
It's like, I'm not doing that, you know, because I'll make my company sustainable so it will enable me to pay for my living expenses and stuff like that. And at the same time, so I don't have to, per se, sell it. And I don't...It's like I, you know, I'm not like rich but I'm not poor so, you know, it's a good situation for me. And, you know, I would assume, you know, I mean, I can't imagine it getting so, per se, bad, that I'd have to, like, consider closing it or something because I have really solid, you know, clientele.
And you know what? If I lose someone for one reason or another, I mean it happens, because remember all these, you know, a lot of people like, for example, distributors talk about accounts. Like, this is my account. Okay. And in a way, it is because you have your computer and their list are there with their name and their number and their resale number. And in a sense, you're account. But what people forget is those are the people who own its accounts. You know, actually, before, they're yours. Okay. So, like, if somebody owns a store on the corner, that's their account, you know, if they choose to use you as a purveyor, that's their choice. But they could choose to use you or two or three other people and, you know, and so on.
And it's interesting how that all works, you know, but the reality is if you lose too many of those people... How do you lose them? You lose them because your prices are too high or your service is bad or your attitude is bad or whatever. Sometimes you lose them because they have financial issues, and they don't pay their bills, or maybe they have a bad attitude. I've actually... you know, I've heard the customer's king, you know, but there's some kings that are pretty bad, you know.
So, you know, there are some that are benevolent and some that are not, you know, so, but generally speaking, my business, over the years, except for a couple of times that they've been a couple of lows, usually connected to the economy. It's generally been growing consistently. And so, we have a very large number of, like, of clients. That even like if someone comes in who'd buy five get one free of the same exact thing we have, where it would make total economic sense for sense to go to the competitor and they still don't, I mean, that means a lot to me, you know, because it means they're really loyal, you know. And the...but you're only gonna get loyal like that if they like you because your service is good and you're...
And to an extent, like, yeah, maybe if the price is sometimes a little higher for some things, you know, let's take a product like Mexican Coca Cola, which used to be, you know, something that I had to get through sort of the gray market, which now is sold by Coca Cola, okay. You know, I would always tell everybody, you know, this is better than the Coca Cola we have here.
And Coke Company hated that. And I used to get threatening letters from the lawyers and all that. And then one time, you know, they wrote about me in the "Wall Street Journal" because I was shipping some to Atlanta to a store. And I made some comment, like, I don't know why they're sending their lawyers to harass people for selling this when they have all the technology and design and trademarks and everything and they can just do it themselves.
And a year later, they did. And I have no idea if they did that because they read that article. It was nationally available. But there were all these David and Goliath blogs that were writing about it, saying, you know, Coke and Pepsi are out of touch with the consumers because look how they're giving this guy a hard time for shipping Coke to Atlanta, you know, Mexican Coke.
But, you know, nowadays, of course, you can go and find that in everywhere but you can find it in big clubs, you know, for like, whatever, 19.95 or whatever it is, 19.99. And I can actually match or beat that price sometimes. But I'm close to it. But sometimes they'll have a deal where if you show your little club card, you know, between the dates of this and that, you can get two dollars off, or whatever it is. And some of our customers will go and do that and go, "Ha, ha, ha I paid two dollars less."
But of course, a lot of times they go and they're like, "Ha, I'm not going order from Real so I'm gonna drive over to the club," and buy and they drive there, and park their car and they go in and they show their little card and they push their cart to all the way to whatever. And there is the empty pallet because someone else bought it all. And they're not getting a delivery for three days. And they go back empty. And they do that once or twice and they say, "You know something? This guy is consistently 19.95. What the heck with going to this stupid place, you know."
And so, you know, we have that kind of thing happen and so even as common as that we sell trucks and trucks of it. We sold tons and tons of it. So, you know, it's interesting when you're out there. But, like I say, when I'm on the road, delivering, I catch all this stuff because I catch my own customers doing it. Most of the time, if they do it, they'll be like, it's funny, they'll come in to be like, "I'm sorry. I'm so sorry. I did this. You know, I didn't...you know, you have to understand, you know..."
I mean, it's...you know, and I tell 'em, "Look, I wish you buy everything from me. I mean, I wish you would buy everything from syrups, to waters, to sodas, to juices and teas, and everything, and eliminate everything else. And even get rid of all of your potato chips and just fill it with soda. But, like, you have the right to do that because you own your own business." You know, and I said it, "I do appreciate you, like, apologizing to me for buying it elsewhere." I said, "You don't have to apologize but that's really nice. And I enjoy working with you and so on..."
And normally speaking, they're like, you know, I say this kinda like relationship I have with a lot of people, you know what I mean? There are some that are just really all about the bottom dollar. And you know and when the bottom dollar works with my stuff, it works. And when it doesn't, it doesn't. And you know, I'm not as excited about working with those people as the other ones. But it's like order for me. I deliver to them when I have a smile on my face and I come, [inaudible 01:07:57] on.
And so, for us so, I mean I think that's the way people should do business, generally. I think if you do stuff that way, you have good products, a reasonable price, a positive attitude and reliability and accountability. Why would someone not want to work with you, you know?
Javier: Yeah, and so, you've been in the business since the 1980s, since you were a kid and even before you founded Real Soda as a company. And you've seen so many beverage companies come and go. What are the top traits of successful companies that you've seen that came out and are still here and are a success?
Danny: Well, obviously, reliability and consistency are very important. You know, you can have a great product and all these other things going for you. But if you come up empty all of the time, that's a problem. We have a huge variety, if we come up empty on something, we usually have 25 alternates available of the same flavor. So, you know, that you can never... you know there are people that will always try to you for, "Oh, are you out of this or that?" But when you're dealing with 185 suppliers like I am, you're gonna have that problem.
Now the problem with a lot of companies is that a) they don't go with the flow. In other words, like, if you take my product list from 20 years ago and my product list today, the products that were available on my list 20 years ago that exist today, 99% of them are still on my list. Okay. So that's consistency.
There's a lot of stuff that's not available today that's because it doesn't exist anymore. So I can't be blamed if somebody stopped making pineapple flavor, whatever it is, if they stopped, it's over, you know. There are things that I call temporarily unavailable. And these are things that are, you know, that they don't...the manufacturers don't make with California as an accepted destination on their list. And you have to wait until the circumstances change, almost kind of like India had to wait 20 something years to have Coca Cola back because they had a rule that had to do with like Indian ownership of a brand and so on. And then when they change that rule, back came Coca Cola, right?
So I have a bunch of things on my list that I would classify like that. That there are some, you know, outer reason that's holding it, but that I believe that over the course of years, it's gonna come back, so I leave it on my list. And, obviously, when some tries to order that, and we don't have them, we say, "Well, hey, here's our substitutions that we have for that." But then, you know, the thing is, that, like, you take really large companies, failure to listen to what the consumers want. You know, like, if you take one, you know, any of the large companies, you know, the Coke, Pepsi, Dr. Pepper, Snapple, etc., which we buy from all of them. You know, some of them, you know, are really...have really just bad connections with their customers. I mean, they're really big and they have that kind of attitude, like, that, well, you know, we're this and that company, you know, nothing can stop us. We're too big to fail, you know, right? You know this kind of thing.
And so what happens is they give either bad customer service or no service. You know what I mean? I guess I get to say that, you know, like, Pepsi Company for example, I mean, I don't know normally mention all the companies, but we haven't bought anything from them in a year because we ordered stuff and they never replied to it. And then when they replied to it, they gave out a date of a price increase. And they didn't respond, didn't respond, didn't respond, until after the increase has gone through. And I've been ordering a large order to beat the price increase because I have to notify my customers. And they refused to sell it at the old price after that.
You know, and I was able to send them back emails that showed, "Look, I sent here in, you know, December the 18th, December 21st, December 25th, you know, etc., all that stuff and you ignored me and then you try to raise the price and so on." And then they stopped responding to my emails completely. And I just simply...they're still on my list but I'd...just always out, you know, because of that thing. So, to me, it blows me away that a company could be that size and that detached from their customer base, you know.
On the other hand, all those other company, the large companies, they have all these weird price structures so, like, you'll go to, like, sometimes in Albertsons or something. And you could buy like 2 12-packs of cans of whatever, for whatever price they're running. Let's say, it's maybe, you know, like 4.99 for 2 12-packs of something, you know. And you could buy an entire or you could send like your grandmother there to pick those up for you and pay the sales tax and everything. And then you buy as a distributor, a, you know, semi-filled with 24 pallets of those same things, and your price would be higher per case, okay?
Because this is the type of problem, you know, and they...and when you're buying from them, they will complain that you don't sell enough and all these and that. And if you don't reach this tier, you're gonna get, you know, hurt even more. And so what ends up happening is a lot of the supermarkets and clubs end up selling major, major portions of their stuff to distributors because these big companies, they have like structures, like this person's in charge of chain business, this person's charge of club business, this person's in charge of cash and carry, this person's in charge of the ethnic stores, this person's in charge of up and down the street, this person's in charge of food service, whatever, you know, grocery.
You know, and they have all these different people and they have all their quotas and marketing budgets and whatever, and so they have this Mickey Mouse thing where the same product has a different price for different people. And they'll tell me, "Well, you're classified as a whatever like that. And I'm like, that's funny, I don't think I have a tattoo on myself saying that. It's like, why don't you just tell me what it is, I'll have a little baseball cap made with that written on the visor, put it on my head, and get that price." You know, how idiotic.
You know and it's like, you know, like, what does your board of directors do? Drink Jack Daniels? I mean, like, you guys are not...I mean, I don't, like, I say, I... Who am I to say they don't know what they're doing when they're billion-dollar companies and I'm not? But I can still stupidity even from a really big company. And so, that...and don't get me wrong, the representatives I have from, you know, at least Coke and Dr. Pepper, Snapple group are very friendly to me and they're nice, you know, they'll occasionally will give me...a couple of them have given me, like Coca Cola Company even gave me a cooler because I have this interesting room that got a lot of interesting old Coca Cola memorabilia in it. The guy from Dr. Pepper and 7Up gave me a bunch of interesting old signs and things.
So, you know, they're nice people. I, you know, no issues of that. But that's just the company structure and how they'll decide, like, okay, in this city, you can have this brand, and the next city, you can have that brand, and so on. And they don't understand that, you know, old American brands have an appeal from people to their childhood. And these arbitrary corporate decisions to have this one available in LA and not one available in Phoenix, or whatever, they, you know, they don't want that. They just want what they want, you know. And the company will own all of those brands. They'll buy five or six competing root beer brands and they'll shelve a couple of them, you know, that easily would sell with minimal effort.
And I could I say, it's just, I don't know. You know, and so what the thing... back to your question about, you know, what makes some companies fail, for example, is, you know, there's a growing disdain among, let's just say, hipsters or whatever. But hipsters are drivers of thought, you know. Whether you agree with everything they say or not, it's not the point, they have a disdain for that kind of stuff. They don't like seeing things like that. And so, it makes them motivated towards the more craft artisan-type people.
And, you know, I can see some of these big companies potentially just someday losing so much market share. A lot of them, they do, they admit fully, they go around and they buy up all these companies and that's why you have a lot of people that start a company with the intention of making it attractive to one of them. And then, you know, it's like some of them have these, like, subsidiaries co, like VEB, something like ventures of emerging brands, and this kind of thing. Okay, and they basically, they know that they're so innovationally constipated that they will actually, rather than invest in research and development, just have people look for stuff like that. And so because they're looking for stuff like that, you've all these people trying to become the one they find.
And you can see, and I operate completely differently than that, you know, so it's like, don't get wrong. Some of those people have been found, you know, like Glaceau Smart Water, you know what I mean? The guy there got, you know, billions of dollars. You know what I mean? So, and he was a great guy and he deserved it, you know. But I'm just saying that there's a... it's different, you know, it really depends.
You know, it comes from some of the smaller companies, what makes a lot of them fail...or first of all, one thing that can make you fail is having a bad product. You know, that's first and foremost. You can pump a lot of money into a bad product and in the long run, it probably is not gonna survive.
But if you have... But the other thing that makes people fail is a lot of times, they aren't really sustainable as a company. They don't match...they don't, you know, they want to get their stuff out there and so on and they don't really add up the numbers as to what the cost of just doing that. And whether they'll be able to sell once they're not giving the free case or whatever. That's a...so you see, a lot of those ones come and go.
We've had companies that sell us stuff that we've actually gotten involved in their production and all because they were basically telling us we're gonna call it quits because we can't afford to stay in business, and we're selling a ton of their soda. But they have all of these expenses, you know, people hiring, brokers, and this and that. And with us, see, people don't need broker. They just need to sell us the stuff, you know.
So, I tell them, I go, "Well, you know..." There's like, for example, in addition to the very large Coke, Pepsi and Dr. Pepper, you know, you have... In retail, you have these really large companies that cover, for example, they're kinda like a mini Mafia, you know, so you have, like, you know, UNFI, that's United Natural Foods Industries, or whatever. It's a huge behemoth, okay, pretty much controls a lot of the health food stores. Them and also KeHe is another one, a big, big, big company.
And when Amazon bought Whole Foods recently, supposedly, the stocks of these companies went way down. I don't even like keep up with it, but everyone was telling me. And, I just thought to myself, well, you know, these are companies that generally speaking won't work with someone like us because there are arrangements they have with these big companies, you know. Another one is like Unified Western Grocers, which is also called Market Centre, you know.
And so these very, very, very large companies there's like a structure that all these people have, but it's like very volatile. Like, one buyout or one something or other, and they can just disappear off the face of this earth. The problem is that one of things that supports them in a roundabout way, sadly, is a lot of these really small companies that feel that they have to be in the chains and they have to be here and they have to be there, sell their stuff to those sort of behemoths.
And what ends up happening, is the behemoths charge them back for everything. You know, you bill them for 10,000 or whatever, and they say, "Well, we have a broker fee of 1200. We have a lumper fee at our place of 500. We have, you know, a slotting fees of this much and so on." And they send you a check, you know, $126. And then they say, by the way, here's our next order." You look at that and say, "Well, I'm not even coming close to breaking even on that, you know."
And a lot of times, you know, the second that you say, "Well, I'm no longer gonna be doing that. You can no longer deduct stuff." They just discontinue your product. So, you're...and I don't know how many companies I've had that have very good products that have been really borderline bankrupted by companies like that because of their policies. In fact, we ourselves sold...we were told by the four Safeways sold to Albertsons, where the previous people said that we had to take the set that we had put in there and we had to run it through UNFI because that's just how it had to be.
And I was reluctant, but I said, "Okay. I'll do it." But what ended up happening is when the smoke cleared and all the deductions and whatever, I, you know, I can't really go all into details, it would take forever. And, you know, but we didn't even breakeven on that. It was a total loss, waste of time, you know.
So the thing is, I do try to tell some of the small companies, "Don't be so quick to try to get into all these things." You know, what if, like, for example, you have... Okay, you were mentioning sometimes, like, if someone has like a bad product, how do you tell them? Okay, that's one thing.
But what if someone has a good product but it's only meant to be a niche product, is that so bad? It's not. Okay, sodas I make...I make a teriyaki beef jerky soda. Okay, it's called Beef Drinker. It is not going to overtake Coke and Pepsi. I'm not gonna try to sell it to India, for example, because it has beef in it. But the thing is, that... But it's cool. It's just a niche product. So I'm gonna sell it where it belongs, like, there's beef jerky stores that buy it, there's like chains like BevMo! that buy it, and so on. That it has curious people that'll go in and buy it. And I tell people, like, Slogans [SP] like it. Makes every sandwich a French Dip and stuff like that. It's fun. It's worth trying, okay.
Is it something that people are gonna buy constantly? Maybe there'll be a few people that will but probably not. But it's not something that's like, bad. it's just not meant to be huge. So we make small productions of it. And we make it available and it's a cool thing to have, you know. But there are so many people who will make a great beverage that it's just like an occasional treat, like, a weird thing. You know, something, to a large extent, is just try it once for fun. But try it and have a good enough experience that you'd sell someone else you should try it. Or try and your friend who likes whatever might like it and so on.
And I tell people, so, you don't go and get the brokers and hire those behemoths and all these other stuffs, and... The heck with all that. Just get yourself decent distributors who'll get it to work, needs to go. That's where online retailers are great because you have something that's very niche. The best place to buy something very niche that you can't really, like, put it in all the markets is do an online retailer. It can ship you one bottle or 12 bottles or whatever it is.
And even if it's really expensive, you know, think about it. Like, something like teriyaki beef jerky soda, if you get 12 bottles of that, and let's say you're paying only like, you know, $15 or $20 for the soda, but it cost you 30 bucks to get it shipped to wherever you are, that might be a $45 or $50, and you say, "Oh, my god, and it's like $4 a bottle at the end of the day."
But, what's 45 or 50 bucks for something that you're just gonna just gonna be experiencing. You can maybe like take those 12 bottles and share them with a bunch of friends and just have fun with them. It's 50 bucks, I mean, you could go down have a steak dinner at a restaurant, it will cost you more than that. I mean, it's not that big of a deal. Is it something that you're gonna drink, like, you know, three or four bottles every day for the rest of your life? Probably not. Then there's nothing wrong with that. But that's great thing. Do you want to not have niche products at all now? No, you wanna have them.
But the thing is, well, I try to tell people, like when they ask me for advice about stuff like that, I try to tell them to identify what they've created. And what it really is. So that the choices they make are commensurate with being sustainable and continuing to have the product, you know. And admittedly, that's not gonna be for the people that wanna build it up to X and sell it to Coke or Pepsi. That's gonna be much more for people that wanna have fun with it. Make a little money on the side, kinda thing like that, you know. Or maybe, they may come up with the 20 to 30 niche products and the collective of all of them is enough to pay for their, you know, lifestyle or whatever. That's fine too, you know. So there's many ways to look at it.
Javier: Yeah, what would you say is the minimum price for someone wanting to start a beverage company? Let's say, someone has a cool idea, they wanna start a beverage company. What do they need to do first and how much money should they have saved up? And, yeah, what, how, what are the steps?
Danny: Oh, okay. Well, again, it really will depend heavily on what their plans, expectations are. Okay. But I've had people that have gotten me involved in production of their stuff just because when you wanna start really small, really small, the minimum orders on a lot of things are high. So that's a big problem. But, like with what we do, we make like, 70 or so drinks that are of my own concepts, okay.
So, because of that, what I do is I buy bulk glass and bulk boxes and bulk crown, which are the bottle caps, which, of course, I keep some for my collection. And what I do is...and, you know, labels all these things. So I have relationships with all these companies. So I can buy these things at the most optimum price. Maybe not the price Coke or Pepsi would pay, but a pretty good price. And I work with bottlers who have a vested interest in working with me because I produce a lot of product for me.
So, let say, for example, if somebody, wants to make like. For example, if somebody wants to make, like, for example somebody once wanted to make a cinnamon cola. Okay, and they wanted to make a small production because he wanted to have the product for a movie that he was making, primarily. And then he also wanted it to be a viable product that people could sell. Okay. So, he's concern was, "I don't wanna do some big productions. I don't wanna spend a lot of money. But I just want to have this beverage, you know, and make a..."
And you know, even a minimum run, it is still a pretty, quite a bit, although I have said, I am working with a guy on putting tigether a very small, like, kinda hand, do-it-yourself bottling machinery where you could make someone like 10 cases or something. Perhaps, it would cost more than doing, you know, like, say 500 or whatever cases. But, normally, if you try to make less than 500 cases, you really have to almost hand do it because, you know, just to fill the tanks and the tubes and everything at the bottling plant, you know, it's just one of these things.
So, let's say, you want to do 500 cases. Well, 500 cases is really like only 7 pallets. It's like one third of a truck. It's not that much. So, and if you have someone like us, per se, distributing it, 500 cases of anything, unless it's just absolutely rancid, horrible, eventually will sell. So basically, what I've done for some people is to say, "Okay. Make your label idea, etc. etc."
Basically, you know, get the concentrate made, you know, flavored chemist can make the concentrate. I have a flavor chemist who will make things for me. It's hard to find a flavor chemist who will sit down and work with you on stuff because their time is valuable. I'm lucky that I met a guy that...he, I guess, he thinks what I'm doing is kind of cool and stuff. And I really like working with him and vice versa. It's just fun. You know and I think he's willing to put up with me because he thinks it's fun. You know, which I'm really, really lucky because most people won't do this.
But I can bring him something, like, someone else's idea. I can bring it in there and have it actually made. So, here's the thing. A flavor doesn't even cost all that much, okay. Like, if you make, for example, an average soda, like, just say, like, let's say, a strawberry soda, you know, with cane sugar, whatever. The actual flavor component of it per case is usually less than 50 cents. It's very little, two cents a bottle. The flavor, not counting the sugar, the sugar is more. The sugar might be a like a $1.60, $1.70, so you're talking, you know, probably, you know, between the flavor and they sugar, you're up to $10 cents a bottle, right?
Okay. But you have to buy the bottles and the box and everything. So, all that stuff, so basically, to crank out 500 cases, you're probably looking at maybe $12 or so, per case, say, $6,000. And then you've got your trucking from the location to wherever it's going. You know, and then again, like, I mean, if we're distributors, and we can just truck it to our warehouse, it's certainly easy, you know. In the truck that we fill with other stuff so it's not like a less than load trucking because everything makes a difference.
A truck that cost $1200 to ship full, if you were to send it in three increments of 6 or 7 pallets apiece, they might cost you $700 a time, each time, and that's 2100, instead of 1200, which drive the price up of the case up a dollar, right?
So I'm all about efficiency. The great thing about efficiency is it's also environmentally conscious. You know, people say, "Oh, you're cheap." I say, "No, I'm environmentalist because you have a less of a carbon footprint when you are efficient." So it actually goes hand in hand. If you really...now, there's some people, like, they're environmentally conscious because they have 27 different colored recycling bins in front of their house. And so they say, "Well, that's make me environmentally conscious."
But actually, not extending resources is the most environmental way you can be. So, I'm all about doing that. So, I could, you know, basically, you could take someone... they could make their label design do the whole nine yards, make the 500 cases even the trucking, everything for under $10,000. So, that doesn't include, obviously, going out and selling it or making t-shirts and hats and billboards and whatever, you know. But I'm just saying that it's not that expensive.
Javier: And so, you actually have an announcement to make. You have something exciting that you wanted to share.
Danny: Oh, no, well. yeah. Like I said, we make a lot of interesting sodas. I've been working on a bunch. It's taken me awhile. I had a bottler that I was using that stopped doing co-packing, which is what's it called when you take something to a bottler to have them fill it. Kinda like, co-packing is like, let's say you have a cookie recipe but your oven's on the blink so you go to someone who has an oven. You say, "I know you're gonna use your gas and your whatever, electricity for this. So I'll give you $10 cents for every cookie I cook in your oven. " So, it's basically, that's what a co-packer does is you bring him all the materials and say turn the machines on and I'll pay you.
So, anyway, so I'm doing that. I have four new things that I just came out with. I just have the prototypes here because the actual shipment of the full pallet hasn't been commenced yet. But I'll have them in about, you know, mid-July, I would say. And so, I'll show you right now. Let's see.
One of them, this is a very sweet Concord grape soda and it's called Orthodox Jooce. And it has 59 grams of sugar in it. So it's not meant to be a diet soda or anything like that. It is a treat. It's meant to be, probably, drunk once in great awhile, a niche product. But it's a lot of fun. It tastes really good. It's kind of like, if you can imagine, and I don't know if this company is still in business, there was a brand called TreeSweet Grape Juice when I was kid that was very sweet Concord grape juice.
And then there's also this wine that they have it, like, Passover called Manischewitz or Mogen David, which are very sweet Concord grape wines. And the flavor of this is meant to be similar to those. So, it's a...and you can actually make a very nice float with vanilla ice cream because it's very sweet and very flavorful, you won't lose the flavor with ice cream. So you could make like a purple float with this. That would be awesome. And so, that's our Orthodox Jooce.
Javier: Oh, can you show that one again, just a little closer?
Danny: Oh, yes, sorry.
Javier: Yeah, just maybe just a little closer so people can see. So it's Orthodox Jooce Concord Grape Soda.
Javier: Nice. And so, why did you create this one?
Danny: I created it because someone even said something...I was talking about how it would, you know, there are these sodas which are kosher sodas and I mentioned how, you know, we sell brand-like Dr. Brown's, for example, which is really famous. And I said, "You know, it's very expensive to actually be certified kosher because you have to have rabbis try it and so forth. And I once met the rabbi that was checking out the Dr. Brown's and so it was interesting talking to him.
And I remember, I said, it would really be neat to make like a Concord grape soda that will be similar to like the wines and stuff that they have, you know, that they have at Passover but would be accepted by Orthodox Jews. Orthodox Jews, oh, my god, there we go. Yeah, that's really it. And sometimes, it does happen. You say something like that and it just hits you, like, "Wow."
So, anyway, then I thought, well, I better spell it J-O-O-C-E. And so that for...well, actually I had the idea for probably two years. And then, it went...typically, when I'm on my delivery route, if I don't have a ride along with me, I will scribble ideas down on a... I usually have like a box next to me when I'm driving of sodas that I'm showing that I'm showing people. And I'll write on the flaps, ideas for messages inside bottle caps or for things to be written on the label.
You know, a lot of times, it's a combination of, do you come up, with a flavor idea first or do you come up with label first. Because a lot of times, you come up with, "Oh, I'd love to have something called this. I have to think of a flavor that matches it." You know, so anyway, and so I do have one like that. This is actually...
Javier: Just a question...is that one Kosher, the Orthodox Jooce?
Danny: It has Kosher ingredients but it's not been certified by a rabbi. The cost, actually, more than a thousand dollars last, I heard. So, I thought, you know I wonder if we're gonna sell enough of this to pay for that. Who knows if we would? But what I did do, the Orthodox Jews would appreciate, although they probably won't drink it because it's not certified. Because it does have what's called the bais hey [SP] on the label there, you know. And that's something that Orthodox Jews write on papers that are not religious related. I know a few people would do that. And so, I thought that would be, kind of, good to have on the label. So at least, it's a start. Now, what would be really nice is if a benevolent rabbi were to say, "I'll certify for you that for free or in exchange for a case." I would give a case to that rabbi.
Javier: So what is the other three beverages that you have?
Danny: Oh, okay, I…
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Javier: So what are the other two?
Danny: Okay, then the other one…this one I made to taste kind of like a Roy Rogers, and it's called…
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…with grenadine and cherry extracts.
Danny: So usually if you go to a restaurant that has like a Shirley Temple for kids, they might have a Roy Rogers for kids too. And I thought to myself, there's so many things that are trademarked that have Roy Rogers in them, and I didn't wanna use that name, but I wanted that flavor concept because there's so few people that use that flavor.
Javier: Yeah, can you show it just one more time, but in the center of the screen? It took it, yeah, just right in the center and, yeah, that's perfect. That's good one. So Roger, and then maybe scroll it around. All right, so that looks good. And so it tastes like, it's lemonade. What, what's Roy Rogers?
Javier: Oh okay.
Danny: Yeah, Cola with grenadine and cherry extracts. So they make in restaurants like for kids, they made like a Roy Rogers, like by mixing grenadine syrup with Coca-Cola or something like that. And when I was a kid, there was a restaurant that we use to go to that…like for our birthday that was called The Velvet Turtle. I don't think it's around anymore. But they had like prime rib and all this other stuff. And you know, you had to wear like your little suit and so on to go there. And for little girls, they could made a Shirley Temple and for little boys they would make a Roy Rogers.
And so in any case, I would always try that and I thought it was delicious. And I've had cherry colas which are good, but the cherry colas don't really taste the same. They're just similar. And so I thought, you know, I wanna make something that tastes…
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Javier: And the last one?
Danny: Okay, this one, depending on everyone's politics, and this is meant to appeal to everybody, including people that hate each other, Make America Grape Again. So this is, of course, grape soda and it mentions right here, don't settle for fake soda. Get real soda.
Danny: And it says…
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Purple United States of America. And it's a really good grape soda. So again, part of my mindset on making sodas is I love having fun with the ideas and everything, but I wanna make sure that the actual product itself is something that you'd be tempted to go back and buy more of based on the flavor.
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Javier: And how many beverages have you created under your own brands?
Danny: About 70 altogether.
Danny: Some of them are very, yes. But very niche products, you know? I mean when I say niche, I mean some of them I made it once. But usually I made most of them at least twice. But sometimes it might be a couple years in between manufacturing. But being that these are sugar…
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…but there's other ones where it takes many, many…
Javier: What are some of the other ones that you've made besides Leninade?
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Nice. And any other ones that you're proud of making?
Danny: Yes, I make one for local here, so…
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Javier: Yeah, and so going back to you collecting beverage caps, or bottle caps, as a kid, if you look behind you, you have different bottle caps and lots of different beverages. So how many bottle caps or beverages do you have…like how big is your collection?
Danny: Well I have almost 9 million…of those there…
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Javier: All right, so it was really fun talking to you, and I wanna wrap it up with a few final questions. I probably have like 10 questions. So let's see. What do you do to continue improving your skills as a business person and also as someone who scouts out new beverages, or skills to grow your business to the next level?
Danny: Well, I look…
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Javier: Yeah, and you've come a long way from when you first started. You had told me earlier that your first year in business, you were working 12 hour shifts like nonstop, 7 days a week, and you made $11,000. And I think for someone starting a business, that's a really good accomplishment, but I'm sure there's been a lot of challenges you faced. So what kind of obstacles have you faced along your business? And what keeps you going to continue?
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Yeah, so what is the biggest challenges or sacrifices you've had to make growing your business?
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Javier: And so are there any interesting shocks or surprises that you've learned about the beverage industry or the beverage business that maybe someone from the outside wouldn't know?
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So that's kind of what I've learned is just that, you know, realities versus perceptions, and it's a constant learning process.
Javier: Yeah, and you even have like waters. There's so many different kinds of waters that you sell also. So it's not just sodas. But going back to the treat idea, it's like ice cream, or cookies, or brownies, or hamburgers, all kinds of things as long as you have it in moderation, it should be good. And…
Danny: Yes, it's true. Almost everything in life is that way. I mean there's some things that maybe our…
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Javier: Yeah, so what insights have you learned about the different skillsets needed to run a business when it's just starting to now running a huge like soda empire?
Danny: Well it seems a sort of empire until you look at some of the really big one…
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So you know, you have to cater to people…
Javier: Yeah, so what books or people have inspired you?
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Javier: What are your plans for the future of Real Soda?
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Yeah. For my understanding, I think you created the whole special beverage industry starting here in LA, and spread over to the United States. Is that what you're most proud or what are you most proud of in your journey?
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Javier: And what advice would you give to yourself knowing what you know now about business, and also what advice would you give to someone just starting out in any business?
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Danny: …It was.
Javier: Okay, sorry. Yeah, all right. Yeah, I had it on mute. All right, so on your professional journey, I'm sure there's people, companies, or professional groups that helped you become successful. And I know you mentioned your customers are a really big source of your success, but are there other people you wanna thank along your journey, and your family, and just…
Danny: Oh yeah…
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Javier: Yeah, and AJ Stuff and Melon is one of my favorite beverages. I really like the melon flavor. And so also, I guess your mission, one of the missions of your company is having fun, making friends. And the mission of this podcast…
Danny: [inaudible 01:17:55] is having fun, making friends, refreshing people with discerning tastes. Because there's two meanings. One is that we are refresh…
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Javier: Okay, no, no. Okay yes, I cut off the whole mission. But okay, actually maybe before the mission, you were drinking Santa Lucia, right? So why do you like that beverage? And I'll drink Boxed Water Is Better.
Danny: Boxed Water Is Better. Well I'll tell you, you know, for us to sell something like boxed water is not in a glass bottle, you know? It's very interesting. Boxed water at first, I thought it was a box. And that one you have is like the milk carton. You know, I have a beautiful picture of my little daughter drinking that. She just loves that little milk carton, or I should say boxed water carton. But our customers love that. It's one of our bestselling items. And the thing is what I always tell…I made my own slogan for it. It's my own. It's my real soda registered slogan. It's not registered, but it's my slogan. And that is think outside the box, but drink from it. You know, and I am blown away by how well that sells. It's a fun product. I've gotta say, for something that's not in a glass bottle with a crown cap, that is a really fun product and, you know, and it appeals a lot to people for environmental reasons because it is a biodegradable box. And it looks different.
And you know what's funny is that there's been a couple of these…people have come out with these like tetra-pack waters and stuff that look like the coconut water things. And yet this one's unique. It's the original one, and we're, to an extent, also a lot about being original, you know? I love having things that we're like the first innovation of its time, you know? And that's one of them definitely, the boxed water.
Javier: Yeah, and so Santa Lucia, what do you like about that drink?
Danny: You know, it's interesting thing about it. Back to my story about the truck that was delivering the San Pellegrino to the place that I had opened up, that they didn't order it for a while, but they were still ordering Orange Crush. And then when I came there, there was a truck blocking where I normally park with a big ramp. And he was wheeling down a huge stack of San Pellegrino. That was like one of those many sort of epiphanies you get in business. And I went up to the fancy food show in San Francisco that year, and I think it was 1994. And I went over to the Italian section, which everyone does because they have all that prosciutto and the parmesan cheese and stuff. But they also, a lot of them have a mineral water. And so you'll see like the San Pellegrino and stuff, but you'll see like, you know, Lugrisia [SP] and San Benedetto, and all these other things.
So I went over there and I said, "Okay, I'd like to have a brand that's as good or better than San Pellegrino that no one has but me." You know, this is part of like I say about learning that I had to be exclusive with certain things because I couldn't count on loyalty of everybody. I mean, you know, it'd be nice, right? So I went and I tasted all the waters. There were like, I think, 12 or 13 of them there. Of course, since I collect bottle caps, I was going around like give me your bottle caps, blah, blah, blah. And San Lucia was a guy…
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Javier: Just that's so unique. It's so different, the flavor is so different.
Danny: Side by side, totally different.
Javier: Like the water, it's so funny. Like even glacier water tastes so different than, yeah.
Danny: It does, it does. And but that other one you see is the Antipodes from New Zealand. That's also a really good water. Very expensive by the way. That one's sparkling I guess, the sparkling one. Yeah, there you go, sparkling.
Danny: You see, it's from New Zealand but it doesn't have a Kiwi aftertaste. But the thing is that what's really interesting is like the Hawaiian water, we actually went there. You have to go down like this mineshaft with a hardhat all the way down, and you actually can get to the aquafers under 200 feet of volcanic rock, you know? And right, you know, right outside of Honolulu, you know? And it's where they have the Menehune Water Company, which is what makes all the bottled water for the mainland and so on, even in those like five gallon jugs and so forth. So we've been to various water manufacturing places. I've not been to where boxed water's made, but I've been to Ty Nant, and I've been to Hildon, and I've been to the Hawaiian water, which is Menehune Water Company. And I've been to a bunch of other interesting ones.
And the thing is, you know, another one that we do really well with right now, is really in style, is the Topo Chico Mineral Water…
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You know, and it really…in Texas for example, it's hyper-popular there. And I got it maybe about a year ago here, and I've always known the brand. But I sell a lot of that, you know? And they have ones with essence of grapefruit, and essence of lime, and so on…
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…sell as well. So you know, like I say, it sells better even than Santa Lucia, you know? But it's amazing. I mean, there's just so many wonderful beverages. And like I said, what I like about this job in addition that it sustains our family and everything is that, you know, basically I get paid to do what I like, you know? I love sampling all this stuff, trying it. I admit that probably about half the beverages that I drink are samples that get sent to me because there's so many of them out there that, you know, unless you just take a sip and dump it out, you don't have room in your stomach for what you're normally drinking, right, because you're drinking all these samples…
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…so it's a lot of stuff…
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…so it's like you know…
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Javier: Yeah, so have you… you've been to Spain before, right?
Javier: Have you have Vichy Catalan?
Danny: Oh yeah, Vichy Catalan? Yes, I love it.
Javier: That's one of my favorite beverages like ever.
Danny: I used to sell it. I can't get it anymore. I don't know if it's still imported here, but there was a guy that was an import company down in San Diego that had it. And he kind of sold…
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Javier: And so yeah, this mission of this podcast is to share the stories of entrepreneurs, corporate executives, and thought leaders because there's value in learning from those who came before you. So Danny, is there someone you wanna see on this show next?
Danny: Ooh, on this show next.
Javier: Or in the future at some point.
Danny: Well, I'd have to think about that. Let's see. The one guy that might be interesting to interview if you could ever do it, and he does live half the year in San Luis Obispo, which is not that far away, is Randy…
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…you know, there's a lot of interesting people out there. I have to probably think about it, like which one not only have really good products, but that have, you know, an interesting personality, and an interesting story to tell. But there's definitely some people.
Javier: It doesn't even have to be in the beverage industry, just anyone who maybe you admire, or who you think would be cool. So…
Danny: You could talk with like, if you could get him to do this with you, like Adam Fleischman, the guy that invented Umami Burger. He's a fascinating character. He once asked me to go to his house to taste weird stuff…
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Javier: Yeah, and so this one in particular is called The Corner Store in what city?
Danny: In San Pedro.
Javier: Oh, San Pedro, oh okay. And so finally, if someone wants to reach out to you, how can they do that?
Danny: Oh, it's real easy. Just Danny@realsoda.com.
Javier: All right, so once again, this is Danny Ginsberg, the founder of Real Soda in Real Bottles Limited. It's one of the largest specialty beverage distributors in the United States. And today's episode, I hope you had a chance to learn about his experience starting, growing, and scaling his business. And I hope you're inspired after hearing his story, and reach out to him to say thank you, or maybe pitch your next beverage idea. So if you enjoyed this conversation, you can subscribe to the podcast in iTunes, and Google Play, and you can join our email list to stay connected. Please like and share this episode and spread the word. And finally, we're here to continue the conversation with you, and want to discuss topics that are important to you. You can visit javiermorquecho.com to leave your questions and comments. And we look forward to hearing from you. So thank you Danny for being here.
Danny: Thank you Javier.
Javier: And thank you everyone for being a part of this podcast. See you all next time.
Danny: Take care, man.
Javier: All right, see you.
Danny: See you.