Pioneering a Brand New Beverage Category with Jeffrey Kaplan of Global Beverage Enterprises
Jeffrey Kaplan is the founder of Global Beverage Enterprises Inc.
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Javier: Hey there, beverage enthusiasts, my name is Javier Morquecho, and I'm the founder of specialtysodas.com, one of the largest craft soda and specialty beverage retailers in the U.S., as well as this "Specialty Sodas Podcast," where ambitious entrepreneurs and leaders in the beverage industry come to share their story. My mission is to build a community within the beverage industry so we can all meet and learn from one another, and connect for meaningful relationships. I'm joined today by Jeffrey Kaplan, the president of Global Beverage Enterprises, Inc. based out of Pompano Beach, Florida.
So Global Beverage Enterprises is the maker of many award-winning and unique beverages such as Mr. Q. Cumber, Sweet Blossom beverages, Sparkling Cow, and Mavi Power. So Global Beverages' mission is to offer one-of-a-kind healthy and delicious beverages that have never been seen on the market before. So, hi, Jeff, thank you for being here. Welcome.
Jeff: Well welcome, thank you for inviting me, Javier. Oh, by the way, it's Pom-pano Beach, it's like the fish.
Javier: Oh, okay, Pompano, Pompano.
Javier: All right, so let me just start out by telling you, you are the reason why I got into the beverage business. So I tried your Sweet Blossom and your Mr. Q. Cumber beverage -- which also comes in this size too -- but also your lavender and your elderflower. These drinks are the reason why I fell back in love with, like, drinking soda.
Jeff: Wow, thank you.
Javier: You know, they were so delicious, they were made with simple ingredients, had very low sugar amounts, but the flavor was so unique and different.
Jeff: Thank you, thank you.
Javier: Yeah, and this was back in 2011, and so I was amazed at how delicious the drinks were. And, yeah, just letting you know, you're the reason why, so thank you for making'em, I appreciate it.
Jeff: But if you're making money, I'm happy, so... If you were losing... Well thank you very much, that's very nice of you.
Javier: Yeah, so thank you and I wish you the best with these brands. I haven't tried the Sparkling Cow or the Mavi Power, but maybe later. But so, while it would be nice to talk about all of your brands, today we'll just focus on Mr. Q. Cumber. So for today's episode I wanna talk about the story behind the creation of this brand. And this is the first...America's first ever sparkling cucumber beverage, right?
Jeff: Correct. Well basically, Mr. Q. Cumber was...the inventor of the drink was a gentleman named [inaudible 00:03:02], who was from Romania, and he came to me in 2009 with a rose and a few other...add to Mr. Q. Cumber. Back then we didn't have the elderflower and the jasmine and the lavender. And he had a client, which was possibly your competitor, but a gentleman named John Nese out of California, who has a place called Galcos, and as like you, he's got a store full of delicious...hundreds and hundreds of bottles of sugar. His saying is, "Freedom of choice." He has no Pepsi, he has no Coke, and he helps thousands of people like myself, simple bottlers around the country. There's hundreds and hundreds of bottlers that could only sell their product in their neighborhoods.
So having places like yours in his, gives us opportunities to get our product across the country. When Lee [SP] came to me, he had John Nese try these flavors and he wanted to start doing a production run, but he didn't have the capital. So at that point we got into...you know, we incorporated and we got into the business, and we launched it around 2009. And again, way back then, you gotta remember, there was nothing like that out there, so coming out with drinks like a cucumber and a rose was way out of the box. And we had the one customer through him, but you can imagine what I went through for at least three years to try and get a distributor, because back then they would just look at you and say, "Cucumber?" because it's a flavor profile that just isn't common. You know, it's not a ginger ale, it's not anything like that.
Javier: Yeah, so let me just go through real quick with the flavors. So it's bottled in two different kinds but it's the exact same formula, right?
Jeff: Well the only difference is, the Mr. Q. Cumber in the 12 ounce, if you notice, it's got a green tint to it, so that product is only made for the Soda Pop Stop Company. He didn't mind having the artificial green in the drink. That's the only drink that has an artificial color. Still trying to find a natural green, it's very difficult to get that. So when I started bottling for myself, with the other 7 ounce Mr. Q. Cumber, you'll notice that's a clear liquid, there's nothing artificial in there.
Javier: Yeah, so let me...
Jeff: It's clear. See, there's no green whatsoever.
Javier: It's because the bottle's green, so it looks green.
Jeff: Exactly. Well, because when you see a cucumber, you think of green, so we went with that bottle.
Javier: So this is the more pure version.
Jeff: One hundred percent all-natural, they both contain the same extract. Which is another important thing is that, Mr. Q. Cumber is the only beverage on the market that I know of that has an extract. Everyone else is using a flavor.
Javier: Yeah, so can you tell us the difference between using a natural extract or natural flavoring?
Jeff: Is the price. The price of the product is much more...it's a distillant [SP]. It's much more complicated to make it, it's much more expensive to buy it. That's why we went with the 7 ounce because of the cost involved. Now we are making a longneck 12 ounce in the all-natural. So you probably haven't seen it around much, but we do have a 12 ounce in that green bottle, but a bigger version of it.
Javier: Yeah, I think I saw it online, and the label is a darker?
Jeff: No, the same thing, it's just a 12 ounce longneck, and it's a little better value for restaurants. When they offer it to the customer, a 12 ounce is a little better value for a restaurant instead of a 7 ounce. The 7 ounces are great for mixers and so forth, then it's that you little bottle that I love...people really like.
Javier: Yeah, so I would say, how would you describe the flavor of Mr. Q. Cumber? Because for someone who's never heard of cucumber drink, they're gonna not think it tastes good and...
Jeff: That was the hurdle for 2009 and that's the hurdle 2016, is that it's such a strange concept, that most people can't imagine what it tastes like. So whenever I do demos -- and this is a product that needs a lot of demos -- once a demo is done at a store, at a tradeshow, they grab 10, 12 bottles. It's a phenomenon. But the thing is, they have no idea of what the taste like, and when they do taste it, they're like...they can't believe it because there was nothing in their mental...in their mind to tell them what it tastes like. If they're afraid to taste it, I would say, "It's like a ginger ale without ginger, or a Sprite, but with cucumber." If was a young kid, "It's a cucumber Sprite," and then they'll try it, and then they love it.
Javier: Yeah, I can see what you're saying with that, and yeah, it does smell like a cucumber flavor, but there's over, I think, 600 varieties of cucumbers.
Jeff: Well that was the trick, that was one of the main things. Now, seven years after we launched it -- and I don't mind competition because it's made cucumber a mainstream flavor, and every Tom, Dick and Harry is trying to make a copy of Mr. Q. Cumber. But again, they don't know the variety, and a lot of times it just comes out awful, and they still put it on the shelf, which is surprising to me. That's our proprietary secret is...you know, is the right cucumber, and hopefully we'll keep it that way. And of course a trademark's important, but building the brand.
Javier: Yeah, so how did you find...come across the right flavor? I know you said you worked with Lee, [inaudible 00:09:15].
Jeff: That was with Lee, Lee had the contacts, and plus he met with the proper people to adjust it. So there's a lot of adjustments with putting more cane sugar, less cane sugar, your pH balance. There's a lot to it to get the right profile.
Javier: I'll just describe the flavor. ...Yeah, it's really good, soft, sweet cucumber flavor, but a very, very good cucumber flavor. Like you said, it's the Sprite without the lemon-lime flavor, it's the ginger ale without the ginger.
Jeff: And we're working on, right now, a mint. Mint goes perfectly with it. So we made a mint trial, and it's delicious -- cucumber with mint -- so it could be different variations of the cucumber. And again, also has a whole different venue as a mixer, with gin, with vodka. We were at the 2012 Wine & Spirit Show. What's that trade...the TV show?
Javier: Taffer. "The Bar Rescue."
Jeff: "Bar Rescue." He runs that show, and there were 600 booths there, we were the only one with a Mr. Q. Cumber, and we were the best product at the show. We got Southern Wine & Spirits as our distributor out of that, so going to these tradeshows are very important to people who are watching this, who what to launch a drink. And another important thing is, we were different. A lot of times I'll go to a tradeshow, and I'm sure as you know, you'll see copycats of everything. Once something takes off, like the coconut water -- copycat, copycat, copycat. We were so different from the beginning, but of course it's got its pitfalls in getting funding and getting out there when you're so different. Big obstacles.
Javier: Yeah, so I wanna talk about some of those challenges that you faced as trying to grow it as the leader and the first mover in a new category, but let me just go back a little bit more about your background. So you've been experimenting with creating beverages, from what I know, for the...for over 25 years ago. Like, in the '80s, in your apartment, right?
Jeff: Well, the early '90s. I'm from Brooklyn, so growing up I...one of the most favorite fountain drinks was an egg cream -- which unless you're from Brooklyn, it sounds awful as a cucumber drink. But an egg cream is simply seltzer, chocolate and milk, and it's just a...it's not a diet drink but it's a great tasting combination, and no one ever put it in a bottle. So back then I developed a Brooklyn egg cream, but again, the technology was not there yet, and the problem with a milk chocolate drink is, you tend to shake it, so the chocolate would settle to the bottom, and this was carbonated and the consumers would shake it.
Which, I didn't want them to shake it but they...out of habit, they did that, and when they would open the bottle it would explode all over them. I was getting dry cleaning bills. So the technology wasn't there until maybe 10, 15 years later, the technology caught up, because you have UHT, like Parmalat milk, where you can now carbonated dairy. In Asia it's one of the biggest beverages is sparkling milk. That's why I started developing my Sparkling Cow and so forth. Yeah, so that was one of my first drinks, was the egg cream.
Javier: Are you also the founder of the Egg Cream America?
Jeff: Egg Cream America, I always get that. No, Egg Cream America came after me, a gentleman named Jeff...
Javier: Yeah, also his name is Jeff too.
Jeff: Right, Jeff [inaudible 00:13:17], I believe it was. And he's out of Miami, and he came after me, after I stopped my drink. But the problem that he had was, he had the word 'egg cream' on the label, and when he would try to sell it to people in Idaho, they wouldn't buy it, so he changed the label to Jeff Sodas, you'll notice. But he did a great job, he's still in business, he's around, he uses the best chocolate -- which is U-bet, U-B-E-T -- which is the only chocolate you can use with an egg cream. It's a very sweet chocolate, unlike a Hershey's. So U-bet is the only chocolate that you can make with a egg cream, and Jeff, whether or not he's with the company, I don't know, but that company still uses that syrup. And he's got other flavors and it's a delicious product.
Javier: Yeah, and so your beverage is the Sparkling Cow.
Jeff: Well Sparkling Cow was, again, another project. It was originally called Kool Cow, K-O-O-L, and basically I took the technology from Asia, and I brought it to America and made the carbonated...Again, I didn't use 'carbonated milk' because the research showed it turned people's stomachs, that word, so we used 'sparkling milk.' But again, the same problem was, they never heard of it, you have to do the demos, and that was a beverage that tasted like a Sprite, again, but it had 10% milk in it. So we were targeting the kids, but unfortunately we ran into a legal problem with the name, which is K-O-O-L, Kool Cow. We had gotten an investor from Boca Raton, and we produced 20 containers of Kool Cow, went to the big trade show, launched it, everyone was excited about it, the brokers.
This is in 2005. After we got back, ready to fill the orders, we get a cease and desist from Kraft. And what's going on? And basically they own Kool-Aid, and they claimed Kool Cow was infringing on Kool-Aid, which is a total...So to make a long story short, try to fight Kraft -- you know, legal fees -- we had a settle, and that was the end of that name, and then we switched it over to Sparkling Cow. But sometimes the big guys, they try to step on the little guy, unfortunately, but we settled and that was the end of it. But Sparkling Cow was a project that's in limbo, because again, I'm one person, I could only do so much, so we started concentrating on the Mr. Q. Cumber only.
Javier: Yeah, yeah, and so I do also wanna talk about...you said the challenges, at least the legal challenges, because yeah, you own over 60 something trademarks, you have patents, you're an inventor.
Jeff: But that's a different company called Retrobrand.
Javier: Yeah, Retrobrands.
Jeff: Retrobrands USA. That company is basically, we locate dormant and abandoned brands that are quite famous, and they've been abandoned by the conglomerates, and following the statutes and the laws, once a brand is abandoned, anybody can take that brand and relaunch it. And there's some major, major brands out there that could be relaunched. And I tend to target the baby boomer consumer on my brands, I'm 57, so we try to find brands that were in the '60s, the '70s, or even the '40s and '30s, and people still remember the names, and that we get'em back on...But the challenge with that is, getting it back on the market, of course, and so forth. So yeah, I'm pretty busy.
Javier: Yeah, so you have the brand Chipwich and Musterole, and so many others. Pet food.
Jeff: [inaudible 00:17:25]. People who are watching this, again, they have to be over 50, so be proud of it. A Chipwich is a brand that if you...it was in the '80s, so that's more of a millennial person might remember the Chipwich. You know, the first chocolate chip ice cream cookie sandwich, which was owned by Nestlé's at one time and did over 1 billion units. In fact, Chipwich is shown every week on the ABC sitcom "Fresh off the Boat." It was nominated for an Emmy, I believe, and it's based in the '80s, the show, and one of the main characters of the show is a Chipwich fanatic, so we're always getting free publicity every week on that TV show. So it's a very interesting business model.
Javier: Yeah, so well, I'm really, really amazed, because you started so many businesses. Like in the '70s, you were doing advertising consultants, in the '80s, you operated video stores, in the '90s, you were opening up turnkey businesses for other people. As I mentioned, you have the Retrobrands, you have the Sweet Blossom, you have Mr. Q. Cumber, and you just said you're a one person operation. How do you manage all this?
Jeff: Well that's one of the problems that I've learned over 30 years, is that you can only do so much. I'm at a point now in my life that I know that you always have to have mentors, people around you, the right people. And back then I never did -- or I didn't know where to find them. You have to remember, back then we didn't have the internet, we didn't have social media. The youngsters nowadays don't realize how easy they've got it compared to the baby boomers. When I would try to do a product in the '70s, I had to put an ad in the magazine and wait for a response on a coupon. It was awful.
But nowadays, with a low budget and the social media, it's just so much easier today, but again, you could only do so much. I tend to see an idea a good four or five years ahead of its time. Like with the video stores, I opened the first Florida video store 1979, which was before...5 years before Blockbuster, and I was the first to do rentals, back then they would trade movies. But again, I didn't have the proper people around me to franchise and to take off. And again, when you're 20, it's a whole different vision that when you're 50...57 years old.
Javier: Yeah, so you said you didn't have mentors back then. So how important is it to have a mentor when you're launching a business, and how do you find it?
Jeff: Well again, if it's a new concept, the mentor really can't help you except for the basic business aspects of raising capital and networking. That's very important, no matter what. No matter what decade, networking, and of course having the capital. Having the idea is your own personal gift and sense, but to get that idea...And that's why shows like "Shark Tank" are so successful, because there's hundreds of thousands of people like me out there. I'm not unique, there are millions of adventures. The one obstacle we've always had is getting the word out, getting the capital, getting the connections, and that's why a show like "Shark Tank"...As a matter of fact, I was invited on "Shark Tank" for my Mr. Q. Cumber about two years ago, and I denied...I didn't wanna go because my numbers weren't what Mark Cuban would like or so forth, so I waited another year. And I'm very sure have gone on there, I probably would have blown them away.
Javier: Yeah, I saw you, in your Twitter feed you mentioned that you were...you could have gone on "Shark Tank" [inaudible 00:21:25].
Jeff: Yeah, they had invited me. Most times you have to go to a...they have around the country a cattle call, where everyone goes down and they show their product for three minutes. You got three minutes to show the product to the young man behind a curtain there, and they won't taste it, they won't touch it, and then hopefully you'll hear back from them. But with Mr. Q. Cumber, I guess the word got out there and I received a call from them to invite me on the show, and I said no, but that was another mistake, but it's all part of life.
Javier: Do you think you could still go on and...
Jeff: Well what happened was, I did go to the counter call that was about a...back last June they had it in Miami. And I went down there -- you get there 4:00 in the morning -- and I showed the gentleman the drink, and I mentioned that I was invited the year before, but I never heard back from them, so... They've got so many people presenting things, so it's my own personal fault. But you know, again, it's just another avenue of raising capital. And a a matter of fact, there was a colleague of mine...not a colleague, but a friend, like you, called...he had an almond drink and was on the "Shark Tank."
Javier: Oh yeah, I know, Victoria's.
Javier: Victoria's Almond.
Jeff: You know, it was embarrassing what he went through. But he got publicity, and maybe he got a connection out of that, so...
Javier: Yeah, with them, I saw it in the stores, but I haven't seen them lately [inaudible 00:23:05].
Jeff: Yeah, so I don't know what's happening with the company, but yeah, it's very, very tough. The thing with my company is, because it's so small, my overhead is very, very tiny, so...
Javier: So when you started the company, you made a press release in 2008 that you were doing a private placement of 1 million shares at $1 each.
Jeff: Well that didn't go through. Again, not having the proper people around me, not having the proper SEC attorneys. So we were gonna do that but it didn't go through.
Javier: Oh, okay. So what are the startup costs that you had to incur? Because I'm sure there was a ton.
Jeff: Yeah, well, I was kinda surprised because about a year ago, I really sat down and figured out my cost, what I've spent, and it's been over half a million. I've recouped, I'd say 98% of it by now, so yeah, I put the money...We're now profitable, the company's making money, but it took a good...But you gotta remember, the first...'9 to 2009 -- we didn't get our first distributor 'til around 2012, I was 3 years ahead of the curve, so my first distributor...And I'm spending money on trade shows and doing demos and getting the word out, I would go to a trade show in 2010, and I'm setting my booth up, and everyone's laughing. You know, "What is that? Cucumber?" And then after six hours there, my line is a mile long, the people laughing come over, "What have you got there?"
And then they would try it and, "Wow." So yeah, so you can imagine the expense -- the traveling, the employees -- to get a distributor, because we were so different. Luckily, Tree of Life -- back then it was Tree of Life -- they accepted the brand, and from then on it mushroomed. People started coming to me: KeHE, Haddon House, Southern Wine & Spirits, UNFI. So once you have a great product, they'll seek you out.
Javier: And so, do you feel that when you're starting a beverage company, you could have done it without going to the trade shows and started it a different route?
Jeff: I doubt it, I really doubt it. The trade show, to me, is the number one avenue to meeting the proper people. Major trade shows like Fancy Food, and Expo West, Expo East, you must go to those. And again, same thing, social media. Back then I didn't have a website, so that's also important. So it may be possible nowadays, seven years later, where you can launch a beverage without going to a tradeshow, through social media. But they still gotta taste it, they still have to see that you...you still gotta meet the distributor, you gotta shake hands, you gotta network. That doesn't change from 1930 to 2016.
Javier: Is there something that you feel you could have done differently when you were starting out?
Jeff: Again, more networking.
Javier: More networking.
Jeff: I'm more of a loner. More reaching out to people -- things like that. And less control. I need to give more control to the people around me, which is one of my flaws. But having the right team is one of the most important things for a startup.
Javier: And you're looking to raise money right now, still, right?
Jeff: Yeah, and as you mentioned, I've got so many projects that the...right now the Mr. Q. Cumber, the company is stable, we've got over 10 distributors. The base, the platform is set for this company to take off, it just needs the proper funding, it needs a company that's establish with the infrastructure, with the capital, with the salesman. I'm looking for a company that will take Mr. Q. Cumber, add it to their portfolio, give it to the salesman, and it would just take off. Because again, you still gotta go to the trade shows, and having an established company with these resources, and taking the leader, Mr. Q. Cumber, to the next level, would be the way to go for this company.
Javier: Yeah, so what are you doing right now to be able to get contact with these companies and...
Jeff: Well, again, same thing, social media. Here in Florida we've got Angel Investor Clubs, there's venture capital clubs. As a matter of fact, I think there's...we have a meeting in about two weeks with one of the Angel clubs down here, and again, I must show the drink to them, because even to this day they're still a little baffled. A lot of times I'll do demos at companies like The Fresh Market or Whole Foods -- we're in Whole Foods, Fresh Market. I'll do demos, and of course people will walk up to me -- they might be attorneys, they might be investors. It's just networking and getting the right person, and getting the right company behind you. This product is ready to explode, but again, it does need the people behind it.
Javier: Yeah, and so I'll just go back. When you were developing this, you called it a 'functional' beverage or 'botanical flavoring.'
Jeff: Yeah, I don't know what the category really is because, for example, I'll be at the SOHO show coming up in Orlando. The SOHO consists of thousands and thousands of mom-and-pop health food stores -- from the southeast. They're all going to be at Orlando at the trade show. That show is basically, think of 24,000 miniature Whole Foods, but these are all mom-and-pop stores, and they're gonna come to the tradeshow, and we'll sign them up. KeHE will be there, our distributor, in case they're using KeHE. So yeah, so going to these all-natural shows, you still got a voice. Mentioning these trade shows, but to me they're the lifeblood of distribution and getting the word out.
Javier: And so you found your first distributor, you said, in 2012, right?
Jeff: Well, that was Tree of Life, which is now KeHE. I believe they bought the company a while back.
Javier: So what was the process of getting into that distributor, and what happened from that?
Jeff: Well basically, again, I received a call from the account manager. Well, Tree of life, I met at a trade show, so that was...they were a little bit reluctant. Again, it's a new product, there's no budget for advertising, there's no budget for demos, so they were very reluctant because a lot of times they only wanna go with companies that have the capital. But it was such a unique and one-of-a-type of a drink, they felt that they could sell it, and it was a success. And from then on, it sort of mushroomed. We were able to get UNFI because...I'm trying to think...Oh, Safeway -- I remember -- Safeway was using KeHE as their distributor. This is what you call luck. So I think two years ago, Safeway switched over to UNFI, so sadly, KeHE lost a big account and UNFI took over Safeway, but Safeway still wanted Mr. Q. Cumber, so they told UNFI where so, I went into UNFI because I was with Safeway. So, it was good.
Javier: And so, when you are in a distributor and you're building market presence in a particular region, like I've seen... So, I've seen Mr. Q. Cumber in Safeway stores, or it might be a Kroger or a Ralph's here in California, but then I don't see them anymore.
Jeff: See, that is one of the problems -- one of the major, major, major problems -- not just my little company, but even conglomerates, like...Well not Coca-Cola, but big companies that are on the shelves is that, unless you have someone watching your shelf, you can lose your space, not intentionally. I'll give you a great example. We're in all 200 plus Fresh Markets, so we do receive a report from our distributor on the volume of every store, and I noticed that a good 30, 40 stores weren't doing one-third of all the other stores, and one of the stores was in Miami in Aventura, which is a very upscale neighborhood. So I took a drive down to Aventura, went into the store, went to the section where my Mr. Q. Cumber is supposed to be -- there's no Mr. Q. Cumber. There's no SKU.
So of course I got the manager, thank God he was there, and, "Oh, we had that few months ago." I go, "Well, where is it?" So it's not like Walmart, where you scan it and they automatically reorder. These companies, even these big companies, depend on the workers to fill the shelves and order the product, and sometimes they just don't do it. So because I didn't have a broker or the proper person to watch that store, for almost four months I had no product in that store. So boom, he put an order in, put the SKU back on, but now I'm thinking, 'How many other stores are like that around the country?' So that's a major problem if you don't have the capital and the people to monitor your shelving. A very, very major problem. And again, it's not just me, it's even the big companies.
If that chain doesn't have a reorder system, like a Walmart where they go...it goes to the cash register and it's automatically reordered, you have to stay on top of that or you'll lose a lot of money. Whole Foods, wonderful. They're on it every day. They've got dedicated workers there that make sure that thing is stocked. Wonderful company, wonderful company. I'm not saying that Fresh Market's a bad company, they're a wonderful company, but every so often a mistake by an employee could really hurt you.
Javier: And you need brokers to stay on top of it, or how else...
Jeff: But again, that's another problem. If you speak to all the beverage companies, not just myself, but brokers do their jobs to a certain point. You have to really stay on top of your broker to make sure that he has a person doing that. If they're a great broker they will have a person going into every store and checking on it. If it's a broker who sits on his laurels...But again, he's getting a commission, so you would expect him to do his job. Yeah, that's very, very important, you have to watch that shelf space, because once you're out of...once you lose your lower space, your competition puts their product in your slot. I went to the Aventura store on Fresh Market and there was a competitor in my spot. You know, that can drive you crazy.
Javier: And so, when you get shelf space, you don't buy the shelf space, or how are you [inaudible 00:34:36] shelf...
Jeff: Well they have what's called a planogram, every store has a planogram, so you have a dedicated slot in your...on that shelf, in that planogram. When we got into Whole Foods, again, it was very difficult. We were only allowed a few stores to prove ourselves, and thankfully it sold very quick. So boom, once it sold, we got all Florida. So since I'm in Florida, I personally went into every store, did demos and made sure the product was there, because it was moving well. But yes, you gotta...they follow the planogram. Most times there is a schedule, where the buyer will review a drink only maybe two months out of the year, when they decide where to put your product, if it's a new product.
With Whole Foods, because we had such a great product, we weren't restricted to wait 'til the buyer reviewed everything. The order came down, we just put it on the shelf, and they found a spot for me, you see? And once we were on that shelf, were kinda locked in for the planogram. And so how do you track and measure your success within the shelf space at different restaurants? Because you said some systems like Whole Foods or Walmart, they have automated tracking, they know how many are sales.
Jeff: Yeah, well I basically, through my distributors, we have a portal for every distributor. We have our own private...not me, but all the vendors could go into a portal and see the reports, see the movement of everything. It tells you every store, what their movements are, through the distributor and through the stores. So yeah, it's kept good. I mean, it's not 100% accurate, but it does keep you a pretty good parameters of what's moving around the country. And once you see a certain area of the country, they only sold one case in a month? Something's wrong. Then simply call the store, ask for the manager, or just say you're a customer. "I'm looking for Mr. Q. Cumber, I can't find it. Where is it?" And then you hear him on the phone talking to a worker, and so you're an irate customer, and they realize it's out of stock and they reorder it.
Javier: Yeah, so you mentioned that you have a portal with the distributor, so you've worked...you're working with, let's say, half a dozen or about a dozen distributors. Is every distributor have a sophisticated portal to track reporting?
Jeff: Well most of them. Yeah, UNFI does, KeHE does. Haddon House, I don't believe they have one, but they do send me a [inaudible 00:37:17] report, Haddon House, so I can keep...I think Haddon House was just purchased by KeHE, so most likely they're gonna upgrade their system and match it with KeHE, so we will have the portal. No the big distributor's all have that. Maybe the small mom-and-pop distributors around the country don't have it, but those smaller ones are more...they're more hands-on, so they know what's moving.
Javier: Yeah, and so what is your biggest benefits for helping to grow and track your progress from working with a distributor? What do you value in getting a distributor, that they have? They have their portal to track reporting, but is there any other services that you really value from distributors?
Jeff: Oh, of course, their sales force. You know, a great distributor like KeHE has got some wonderful people, every sales force has their own stores. John Smith from KeHE watches over every Publix, or you know, they all have their own account managers, and a lot of times they'll call me, "Jeff, we wanna do a special on the store. We wanna do some movement -- a two-for-one, or a 50 cents off. Or are you free for a demo?" So the sales reps, of course, they're the backbone of the distributor, making sure the product is out there, making sure that the stores know about it. Sure, they're very important. It's all working together, it's all one big team, your distributor, your sales force. And of course, if you have your brokers, it's your broker's job to do that. To keep in touch with the sales force.
Javier: And so you've made an equation for success with zero defects, perfect product quality, maximum cost and time efficiency equals total customer satisfaction. So can you tell us more about this equation?
Jeff: Well again, like anything else, you wanna make everyone happy if you get a complaint. Every so often I'll get an email for...Our caps are metal, our crowns are metal, so during the winter months, things are being shipped, they're being shipped in the cold, so if it's on a truck too long, you might get a little bit of rust on the cap because of condensation. So some people are concerned about that, but it's on the outside of the cap. So I had a call from one customer, she was afraid to drink it, she thought there was rust, so as a courtesy I sent her a case of soda. And she loved it and she's happy. You gotta make'em happy, the customers. I think that's the only complaint I've ever gotten in seven years.
Of course, that's my bottler, who does a great job. We're a very small company, so we have a bottler that handled it. That's another major problem for a startup, is getting the production done. Where do you go for your beverage bottling? Most big, big companies that do bottling won't even talk to you unless you order 10 container loads, so there are bottlers out there that are specialized for smaller companies like myself. Also, my drink is very unusual because we're still using...we pasteurize our beverage. A lot of companies don't do that, and a lot of bottlers don't have the pasteurization equipment. So that's also important.
Javier: Yeah, and so how were you able to find a bottler? Because your bottling is slightly different than the standard.
Jeff: Again, in the beginning with Lee, or [inaudible 00:40:58], in the beginning he had some relationship with a bottler that we had up in Boston, or Massachusetts, and that's what their bottles are in stock, so the two bottles we have there are stock bottles. If I wanted to make my own bottle, like a company called Q Tonic -- Q Drinks -- a very good company, he's got Q Cola, and Q Ginger, and I think about four different Q products. He can't have a Q Cumber, so he's a little upset. As a matter of fact, I even reached out to him. I said, "Listen, would you..." I forgot the name of the owner, but I said, "Would you like to buy my company, and we can grow and expand, and you'll have a Q Cumber, finally. No trademark infringement."
I think Siebert, his name is Mr. Siebert? Jordan Siebert? Very nice guy. But he spent a fortune, I believe, on his bottles, it's a gorgeous bottle, but you gotta make a mold and you've got minimums -- it can get very expensive. Where, these bottles that I'm using are stock bottles, they're always in stock and they're a lot lower price. Because again, beverage industry, you don't have much of a markup, it's a volume industry, you've gotta move product.
Javier: Yeah, and so the pasteurization, can you tell us more about the...I think you said it's tunnel pasteurization?
Jeff: Tunnel pasteurization, where basically, like a bath, it goes through a hot-water steaming process, which doesn't affect the flavor, it keeps our flavor unaffected by sterilization or ultra-heat or all the different technologies today, and we have a two-year shelf life. In that sense, it can go...this beverage could be there for 10 years. These beverages with the crown, they last a long time, but we put a two-year shelf life on our product. But you gotta have something on there, so we wanna...we put two years.
Javier: Yeah, and so when you receive the extract, it doesn't have any kind of a processing or pressurization on it as its own?
Jeff: Well the extract, and I don't really get into the technical part of that through the company. When we receive it, it's shipped, and we put it right away in the refrigerator, but we go through so much that there's no concern on expiration date. My main concern is not to run out of it because...I think I've got about 35 ex-movie stars from Oompa Loompa? Remember the..."Willy Wonka?" We have them squeezing the cucumbers, keeping the...you know, making all that extract for us. I'm just making a joke. We get people at the trade show, they say, "Where do you get the cucumber? Who squeezes the cucumber?" And then I bring up the Oompa Loompas, you know.
Javier: And it's only cucumber, right? Because I saw online somewhere that I think it's cucumber mixed with floral extract.
Jeff: No, no, no, just cucumber. Our other beverages, the rose, is a real from roses, the elderflower is from elderflowers, so those are real flower. And that's another category that's exploding, that's been on our back burner since 2009. We only do the Sweet Blossom run for our customer Galcos because he orders huge orders. Right now I don't have the financial resources to go into a whole new line, but the Sweet Blossom, now other companies are all coming out with elderflower and all these crazy flavors, and I've been doing it for seven years. But again, I don't mind, I was way ahead of the curve, and now they're all becoming mainstream, so it's much easier for me to now approach a distributor.
Javier: Yeah. And so I'll go back to the bottling. So you said the crown is much better than, let's say, the twist-off.
Jeff: I feel it's just a preference. I feel it's more old school, it's more upscale. The twist is nice for that bottle, we can put a crown on it, it's just a preference of the...of your company, whether you want the crown. I personally like the crown, because I'm old school.
Javier: But the shelf life is not affected, right, by the type of...
Jeff: Only with the cold, unfortunately. Only with the cold you can lose a little bit of gas, it all depends how cold it is. But if the shipper is doing his job correctly and moving the product quickly to your customers, it shouldn't be an issue.
Javier: Does it take, from when you get the extract to actually have it bottled, how long is that process?
Jeff: Oh, well again, it all depends on the schedule of the bottler. I use a very small bottler, he's very, very busy, so we keep track of our inventory, and when I'm getting low on my pallet counts, I place my purchase order. I keep in stock plenty of extract, plenty of labels, the bottles are in stock through the bottler, but my main two concerns are the labels and the extract. Keeping enough quantity on hand so when an opening in the bottling production run is available for me to do 40 pallets, I have the product ready to go. I mean, over the years I have had close calls where my bottler was doing a run, and he didn't check my labels, and I thought I had enough labels, I get a phone call during a run, "Jeff, you're out of labels." I go, "Oh, what, what, what?"
And they're doing the production run and the bottles are spinning and the caps are being put on, there's no more labels, so you can imagine the...One time I went to the bottler on a special run, I had a customer in Spain that wanted to do in Mr. Q. Cumber private label in Spain. So that order, I personally went to the factory, the bottling plant, to make sure there was no mistakes. And I remember getting there, like, 6:00 in the morning, 5:00 in the morning, and I was watching the guy put in the cane sugar, he pressed down the wrong lever, he started putting high fructose in. And if I wasn't in there, somebody would have complained and the whole thing have been in the garbage. So whenever I do a run, I send my email, my fax, "Make sure you get the proper..." They're human error. Human error can happen. Yeah, [inaudible 00:47:37].
Javier: Yeah, so what other close calls have you had? Because it seems like, with the retail space, with the manufacturing, it's a lot of human error, but...
Jeff: Yeah, but again, it's not just me, I'm no one special. Everyone goes through this -- Q Drinks, every company that has...the one with the almond milk. Everyone has these problems, situations. It's not unique. Everyone has their own little stories, and it's all a learning curve, you know, you just watch and you be careful. Sometimes you have to eat it. If the product comes out bad, then sorry. And of course, during the bottling run there's...during the run they test the pH, they make sure things are perfect, but once the formula is in their computer, there really can't be any mistake, once everything's mixed.
Javier: Yeah, and so for market growth, you said that, "These new types of beverage categories are growing faster than any other soft drink category"...
Jeff: I believe so.
Javier: ..."whereas the main brands are in decline." The main soda beverages seem to be in decline.
Jeff: Oh, oh, sure, that's why Pepsi is buying, Coke is buying -- they're acquiring everybody. I've reached out to Pepsi. I remember I got a letter from Indra, she was the...Is she still the CEO of Pepsi?
Javier: Oh, I think so, yeah.
Jeff: Indra Nooyi. I remember back in 2011 I sent her a letter about Mr. Q. Cumber, and it got to her, I was surprised, with all the...they avoid getting letters and everyone's sending them things, and she personally wrote back to me, "At this point we're not..." They just weren't interested. Now they might be. But again, it's getting the right person, it's just very difficult. There's a lot of barriers.
Javier: Do you feel that that should be the goal of the beverage...new startup beverage companies to be acquired by larger companies?
Jeff: Again, it all depends on the person. As you see, with my history, I'm the type of a person, I like to get a project going, get to a certain point and then move on to another project. But right now was Mr. Q. Cumber, it's still more of a pet project with me because I'm so concentrated on my Retrobrands, because that's exploding right now. I've got 24 brands, I've got 12 on the market already, so Mr. Q. Cumber is operating on a...it's doing well, but it could do 10 times better with the proper people. It's making money, it's out there, it's growing slowly, but I'm ready, personally, to hand it over to someone who can really take it to the next level. So with all my projects over my life I've always been like that -- get to a certain level, move on to a next project.
That's just me personally, but a lot of entrepreneurs would never give up their company. They love it so much, they'll stay with you forever, and they'll even get equity from a big company, but they'll still run the company. Which is an important thing, because a lot of big companies will not buy your company if you take off, they want you to keep running the company, see? Me, it's a little bit different. My company could be run with a company that's already established, that has the infrastructure. It's just an additional product for their portfolio.
Javier: And so what stops these big companies from just developing another Mr. Q. Cumber type of beverage?
Jeff: Well they can, and they've...I'll give a great example with Coke, and it's mind-boggling to me sometimes what goes on. When I had my sparkling milk drink way back in 2005, I approached, I think Coca-Cola once with that, sent them samples. I got this simple form letter, "We don't accept outside." Six months later they came out with a drink called Vivio or Vio, V-I-O. It was in a metal can, it was carbonated milk, it was a sparkling milk, and they must have spent $10 million -- it was 6 months, off the market. Instead of taking my concept -- we were talking to children and it was a great product -- they went ahead and did it themselves.
And another company out of England called Britvic -- I think one of the biggest beverage companies in England because my Sparkling Cow was even known over there -- and we reached out to them, and they said no. And then one day I read a big article, they actually built a factory to make their drink, and it had a crazy name -- and to make a long story short, it flopped and they lost £30 million. Sometimes these big guys try these things and it just doesn't work, it just doesn't work. It's proprietary, the formula, and of course the name as well.
Javier: And I guess it has to be grown organically from...and built locally to build a following, get brand awareness, and just get people to...
Jeff: And then they come in, you know? Sometimes they ruin it, [inaudible 00:52:49] with Snapple decades ago -- they sold Snapple, the Quaker Oats, and the whole company imploded -- and then the CEO got Snapple back. And even to this day, do you hear about Snapple? It's out there, but you know...
Javier: Yeah, so how would you feel, like, if you were acquired by a company and then it implodes, you say?
Jeff: I would be upset, but again, that's why you gotta be very selective of who you want. I wouldn't want a company that doesn't have similar products. I would want a company that has these types of unusual products and see what they're doing with it. Yeah, I'll be upset but of course it all depends on what the compensation I received when I gave them the company. But yeah, that's all part of it. Like with the video store, I could have been the Blockbuster back then, so I don't hold grudges, I had 22 stores and sold them, and then Blockbuster came in and became...But look what happened to Blockbuster with Netflix. They dropped the ball. And look at Kodak with Polaroid. Polaroid now is making more money with their trademark licensing of Polaroid, than they actually did with the Polaroid camera. And Kodak, of course, went under, and now they're trying to do the licensing with their products. So you really can't look back at mistakes that are made.
Javier: Yeah, so when you started Mr. Q. Cumber, did it come out of the Retrobrands?
Jeff: No, Retrobrands started around 2011. That was a whole different [inaudible 00:54:25] project. I came across that by reading an article about...there was a brand called White Cloud. I don't know, you may not remember, but it was Procter & Gamble's...for 20 years it was their number one toilet paper, called White Cloud. And in 2009 Charmin came out, there's a Charmin toilet paper, and their decision was to discontinue the White Cloud in favor of the Charmin. So they abandoned the trademark, and a company out of Boca Raton, got the trademark -- it was a big article on the news -- he licensed White Cloud to Walmart as an exclusive house brand. You can only get White Cloud at Walmart. And it's been 25 years, it's a $1 billion brand for Walmart. And Procter & Gamble is...you know, they wanna kill themselves because they gave up...So that got me into Retrobrands. I said, "If that's one brand, there's gotta be more brands out there."
Javier: Yeah, because I feel like that's really cool, it's almost like an incubator company, where you're finding these brands that can be...well, yeah, be revived, and see which one can be a spinoff and create it on its own.
Jeff: Well a lot of things, but the Retrobrands is, even though they're iconic brands, a lot of times you've got to change the formula. We licensed a brand called Tegrin, it's a dandruff shampoo, which had tar in it, you know, it was sulfur, and it was...in the '80s it was number 2 after Head & Shoulders. People like Pete Rose, Lyle Alzado, Jim Palmer, they were all the spokesperson on Tegrin, so we licensed it to a company that manufactures and owns Mr. Bubble, one of the biggest children...you know, for the bathtub. And they took Tegrin, they re-packaged it -- gorgeous -- they reformulated it with tree tea...tree tea oil, and it's in Walmart, it's on Amazon. So you could take a brand and reformulate it. And of course the biggest example, I know we're off the track with Mr. Q. Cumber, but one of the biggest brands is Old Spice. Old Spice was my generation, and now go into any store, Old Spice is a $1 billion brand. But at your age, you can find brands that you grew up with, that you miss, and you could very well with it.
Javier: Yeah, that seems like a really cool...It's fun.
Jeff: It's fun, it's a fun business model.
Javier: Yeah, I just want to talk a little bit more. You said there was a challenge of being the first mover, and you said, "Now if you approach companies, cucumber is a more common...
Javier: ...drink, mainstream drink. So I guess, what are some of the challenges? And do you feel like you may have lost some opportunity by...
Jeff: Yes. Again, because I didn't have the proper financial, or don't have the proper financial people with me and going public or doing private placements, I could have had a more out there than I do. But still, doing it the way I did it, we're still the leader, which is...I'm proud of it, but it would be...If you've had 9 people, 10 people, [inaudible 00:57:47] people, they never heard of Mr. Q. Cumber so there's a tremendous opening out there for...to put Mr. Q. Cumber. I mean, there's hundreds of thousands of locations, not just supermarket and big-box retailers, but restaurants. Wherever you see a San Pellegrino in a restaurant, there should be a Mr. Q. Cumber. It's a sparkling water with cucumber. Everywhere there's a Perrier, there should be a Mr. Q. Cumber. So think of the volume of San Pellegrino or Perrier, we can reach that. We have an opportunity to get to that volume with Mr. Q. Cumber.
Javier: Yes. Is there any sacrifices that you've had to make personally, just growing this business? Because you said it's profitable now and it's making money, but in the early days, what did you have to sacrifice and what did you have to...
Jeff: Well I'm not married. I used to work in my video store 22 hours a day, I lived there when I had the video stores, but I've always been like this, and that's been one of the reasons why I'm not married. And so personal life, yeah, doing the projects like this every day, nonstop, that's just the way I am. I enjoy these challengers. But of course, when I meet my friends who are married, they're very unhappy. "You're lucky, Jeff, that you're not married. My wife is driving me crazy," or "My daughter's driving me crazy. Jeff, you're lucky you're not married." I hear this constantly, you know. But yeah, like any businessperson that's dedicated to their work, there's always the personal losses that you have. I think that's with everybody, not just me.
Javier: And do you feel that maybe you do wanna get married someday, or...
Jeff: Well, it gets to a certain age, I'm 57, I've still got time, you know. So yeah, I would like to, of course.
Javier: And for people who are starting companies, they lose sleep, they lose friendships, maybe they have to say no to a lot of family events. How do you deal with that?
Jeff: It's your inner person. I'm a very extrovert, very outgoing person, I don't get mad at people, I'm not jealous of people. I notice a lot of people who, when you have good fortune, they're jealous of you. They don't say they're jealous of you, but they are. This is all just human nature that's been around forever, but it's the inner person. Whenever I have a meeting, I'm there a half hour...I leave an hour to go to my meeting thinking there might be a car breakdown, there might be traffic. I'm never late for a meeting. I get to the meeting, of course they're late, but I'm there in the car waiting, reading my documents, ready to go. I've always been like that, even in the school days. I'm always ready to go hours beforehand, but that's just your inner self.
Whether your parents raised you that way, or I don't think so, but just the inner person of you. Dependable, showing up on time. One of my pet peeves when I had my video stores, when I would hire young people to my store -- young people, they were my age -- but they never had a pen. They're filling an application, "You have a pen, sir?" That would drive me crazy. You don't bring a pen with you? You get your little pet peeves.
Javier: Yeah, so growing up, did you have inspiration from other entrepreneurs in your family or...
Jeff: No, I know I did some crazy things. I remember, goodness gracious, when the breakdancing was around. Remember the breakdancing days? I remember going to a thrift store, buying shoes, polishing the bottom of the shoes with this sliding gel to make it slippery, and then I put an ad in the magazine selling breakdancing shoes. I think I was 14, 15, and it cost me 200 bucks, I saved it up, and I was selling breakdancing shoes. It's always something that was part of me and I've always done that things. I remember when the video store started -- you gotta remember, when the video came out, again, it was new, exciting -- a video recorder cost you over $1,000, and you could only get'em through mail order.
And I remember spending a ton of money and putting a little quarter page ad in "Playboy" for a video recorder with a toll-free number, and then of course the problems started arising when the credit cards were all stolen, and I was getting debited from the credit..."I'm 20, what's going on? All these thieves out there." So you learn at an early age that there's a lot of bad people out there, but it's all part of the experience. So as you get older, you know not everyone is honest, not everyone is upfront and good to you. But again, I never get jaded, I'm always positive and make sure...When I go to work, I meet people, it's always in a good mood.
Javier: And that's happened to you before, where you've gotten burned or something...
Jeff: Oh, sure. Burnt, and even you get disappointed with people, you kinda get jaded. I remember one time, which is very...I had my first video store in 1980 and I had a burglary. When John Lennon died, I remember, John Lennon died, the store next to me was making counterfeit John Lennon T-shirts. The next day I got a phone call from my worker, "Jeff, someone's broken into our store through the wall of the T-shirt guy." So I went in there, it was a little hole in the wall place selling video equipment and movies -- back then you would just buy a movie -- and I remember the BSO came to my door and started doing the police report, and he says...He picks up one of my video machines -- I've got two left -- and the wires hanging, and he put the machine into his trunk. And I said, "What are you doing?"
And he says, "Oh, this is evidence." And he stole my VCR. You know, I was 20, I didn't say anything, I just added it to my insurance, and he walked away with my...And to this day I still remember that, a BSO officer did that. He wanted a video machine because it was the hottest thing on the market, and he goes, "This is evidence." And I was 20 years old and I said, "Look at that." I didn't argue or anything, but the put an impression in my mind, here's an officer doing that. Of course I never reported it or anything, but that was 30 years ago. But yeah, little things like that tend to really stick in your mind.
Javier: Yeah, so how do you stay positive, how do you stay motivated, still looking for ideas and...
Jeff: It's just natural, I'm always...I'll give you a great example. I find my brands, I'm always looking for brands, and I was at a store yesterday called IT'SUGAR, it's got [inaudible 01:05:04], it's got 70 stores, his name is Jeff Rubin, and I wanted to see his operation, he's like me probably, he's an entrepreneur, and I went into the store and so I started doing some research on discontinued bubblegum, and then I see people talking about a brand called Freshen-Up. Freshen-Up was the first gum, you bite into it and it explodes in your mouth. It came out in the 70s, huge brand, and it was supposed to be owned by Kraft or Mondelez, whatever. So I went to the trademark office, it's still registered they own the trademark.
I do my due diligence, I started contacting candy stores around the country -- Amazon, everybody -- no one has Freshen-Up, it's been discontinued. So boom, I thought, 'I'm gonna launch it, I'm gonna make a Freshen-Up.' I'll store my process and another new brand for me. It discontinued it almost 10 years ago, they still have the name -- which is illegal -- and these are the ways I get these ideas, is going around, seeing things, and then the brand comes to me. I saw the commercial on YouTube, the Freshen-Up commercial, so yeah, it's just always being positive and keep an eye out for the next thing.
Javier: Sidenote to Freshen-Up, you said the trademark was discontinued and you were able to pick it up or...
Jeff: Well the trademark is still registered with the company that owns it, so what they are doing is, they're claiming they have it on the market, but they don't have it on the market. They're basically breaking the law.
Javier: Oh, oh, oh, I see what you mean, yeah.
Jeff: It's not a federal offense, but they're saying to the government, they're still making it. As a matter of fact, everything is online, it's all documented. When you have a trademark, every 10 years you have to tell the government you're still making the product. You have to sign an oath, and attached to the oath, a specimen of the product that you're selling it. So I went online to a USPTO office and looked at last year, they filed their maintenance for 10 years saying they're still making it, so I clicked on the picture of the item that they submitted -- this is their lawyers. What do I see? I see a Freshen-Up package that's kind of ripped, from 2002, and I know it's from 2002 because it has the label 'Adams Candy.' Adams Candy owns the brand and sold it to Kraft in 2002.
So they used a picture of something saying they're making it, and they're not making it, that's fraud. They figured, no one's ever gonna look at this, no one's ever gonna investigate it, you see? So really, they don't own Freshen-Up anymore [inaudible 01:08:02], been off the market for 10 years, so I have to right now to apply for it and to fight them legally and get the brand for myself, and relaunch it.
Javier: Oh, okay, makes sense.
Jeff: [inaudible 01:08:13], it's a very interesting process.
Javier: And it's really capital-intensive to do this?
Jeff: Yeah, again, it could be capital, but I tend to look for licensees. But basically I'm gonna contact Jeff Rubin at IT'SUGAR, he has his own private label brands of candy. He's doing $70 million a year, and when I meet with Mr. Rubin, say...he's my age, "You remember Freshen-Up? Let's work something out, you've got the capital, let's put it in all your stores, let's distribute it around the country, I'll license it to you." And he'll say, "I remember Freshen-Up." So these are the things [inaudible 01:08:56], he says, "No, I'll go to someone else," and that the bottom line is I can do it myself. I have enough capital to do a production run of bubblegum.
Javier: I know we're going a lo of off-topic...
Jeff: [inaudible 01:09:09]
Javier: ...but when you license, what kind of fees do they pay, or do they pay something upfront? Do you have to pay them to...
Jeff: No, no, no, I would never pay them. Basically a lot of times I'll get money upfront, I'll get...and an advanced royalty, I'll get a commitment that you have to do so many units in three years. I gave them some time, it takes two, three years, then they have to reach a plateau, I'll give them part ownership of the brand because of course they're gonna say, "Listen, we're building the brand. And you own the brand and you're gonna sell it one day for millions?" So we have a point where they get to a certain performance, they get part ownership of the brand, because they're building the brand, you see? I give them an option to buy the brand before it takes off, so yeah, I make it very good for the licensees to...And I have a licensing agency in New York, Lisa Marks and Associates, she's a very big company, and she just got...We have brand called Hai Karate, it's a cologne, like an Axe.
It's the girl attack the geek and it's a great...on YouTube, the old commercial. And we just signed a deal with American Apparel, which is one of the biggest T-shirt companies in America, so you're going to see, in all the stores, the Hai Karate T-shirts for kids and everybody, so yeah, it's a lot of fun. And as you can see, how am I working Mr. Q. Cumber when I'm doing this? That's why Mr. Q. Cumber is not exploding because I'm not out there like I was in 2010. It's kind of rolling now, nice, but it can really take off with a proper...with the proper company.
Javier: Yeah, and so for the licensing, how much do they pay you? Is it tens of thousands or...
Jeff: Well, it could be, it could be. It all depends on how great the brand is, it all depends if the brand is unknown. Sometimes you can't get a licensee, like the brand called Musterole, which is a very old brand from...the older baby boomers in their 60s. It's the only vapor rub like Vicks VapoRub, but it's got mustard seed oil in it. It's the only one in America, it's from 1905, and we reformulated it, and I'm making it and I'm selling it, I have it on mail order companies, I think we just got it into Bed, Bath & Beyond, we're working on it. So yeah, so certain brands, I've gotta do myself, but with other brand, everyone's different. It could be $10,000 upfront, it could be an option to buy for $400,000. And again, I'm not the only one doing this, there's other people doing this, there's quite a few companies out there, you know.
Javier: Given that, yeah, you're doing so many cool ideas and you said Mr. Q. Cumber's now at a level where it's stable. How do you know when to focus 100% of your time on just that one brand?
Jeff: Well, it's a daily operation. In my office every day I'll receive my purchase orders and I gotta put the orders in and I gotta keep track of it. I do it every day, it's not just once a week, I'm on it every day. So I work that in the morning, I do my orders, I do everything. It's just a 24 hours in the just working your schedule and keeping it busy. But I do fully understand that I'm hurting the brand by not concentrating on it 100% percent, but that's just the way...the person that I am. So really, Mr. Q. Cumber's an opportunity for someone out there who really could see the potential of this brand could be huge. And we'll find someone.
Javier: Yeah, yeah, I'm sure, because it's a really good drink, you just need somebody...
Jeff: And that's another thing is, again, I'm not promoting it, everyone else is. You go to YouTube, there's some great videos of people with Mr. Q. Cumber. There's over, I think, about 35 of them. And there was only one bad YouTube video, some young girl didn't like it, but before she drank it she says, "I hate cucumbers." Why are you even drinking my drink when you hate cucumber? And of course she hated it. But everyone else is, "Wow!" and it's some great videos, and tons of people see that, so they're doing it for me. Thank God for social media.
Javier: Yeah. And so you said that you did a private label with a company in Spain. Is that for the Mr. Q.?
Jeff: That one, they did two container loads, but it was a partnership of two young ladies, and they had a falling out and their company got dissolved, and it didn't...
Javier: Oh, okay.
Jeff: But we are doing a private label here in Miami. There's a company called Ocho Rios. It's like a Goya. You heard of Goya Foods? It's Ocho Rios, it's a Jamaican brand. They do very well, they're in tons of supermarkets, so we are doing a private label for them called Ocho Rios Sparkling Cucumber. So it's exactly the same drink, but...And I don't mind, because it gets it into the ethnic neighborhoods that KeHE is not approaching. There are many, many neighborhoods and avenues, like the Asian market. You know what this would do in sushi places? So there's a tremendous opportunity to get my drink and the distribution into the Asian, into sushi bars. And of course food service, like Sysco and Cheney Brothers and McLane -- they all go to major restaurants. So again, I always mention San Pellegrino and Perrier in a restaurant, there should be a Mr. Q. Cumber there.
Javier: Have you thought about putting it in a bag-in-box format and...
Jeff: That was one of the things that Lee, back in 2009, we were looking for that, but that's a whole different [inaudible 01:15:12]. You're taking the extract, it's a whole different process, and it was way too...It could be done, I'm sure, for the bars, but...And again, that's another thing, people don't know the story of Red Bull, Red Bull was in the same...Red Bull, nobody wanted Red Bull. In 1980s, they were laughing at him, nobody wanted Red Bull. A dollar? Two dollars? He started by getting the trucks, the vans, and going to the bars. And that's how he started, with the bars.
And then as a mixer, and then of course it took off. But same thing, he went through the same thing, I look at it now, it's...And again, a million copycats. I remember when there were 700 energy drinks, I was gonna start collecting the cans, and after, like, 100 cans I said, "Forget this." You know, it was 700 of them. Now there's five? Same with the coconut water, how many coconut...You get the shakeout, you know. This drink, there's no shakeout because I don't have that much competition, thank goodness for that. Maybe five people. But again, their flavor is a whole different thing.
Javier: Yeah, private labeling is one route for people. If they want to reach out to you, they can...
Jeff: Private label. Yeah, but again, private label has to be certain minimums, because a bottler will not take...I had one gentleman had a bar, he goes, "Oh, I want a private label, one pallet." I said, "I can't do one pallet, it just...it's not gonna work." And of course that's another problem, I get a lot of emails for people in Alaska. This is glass, it's heavy, if I don't have a distributor there I just can't ship them, it just doesn't...It's freight, it kills you, it's very expensive, very expensive.
Javier: Yeah, and so you're doing international export, though, to England, Australia, or Caribbean?
Jeff: No, I don't know how it gets there, but it's there. It's in the Caribbean, it's everywhere. Either people take it with them, I don't know. Well, the Caribbean, KeHE does export. KeHE out of Miami, they have a trade show every year, and they cater to the people on the islands and the restaurants, supermarkets, so they'll consolidate a bunch of products and put it on the boat. So it probably be, I'm in Miami, it's easy, but Europe, that can get quite expensive.
Javier: So now, yeah, as we're coming to the close of the interview, I could spend all day talking to...
Jeff: Yeah, I'm sorry, you may have to edit this a little bit.
Javier: I know. Yeah, there's so many cool ideas and so many cool projects you're working on. And yeah, I know we wanted to talk about Mr. Q. Cumber, which, is this your most successful brand?
Jeff: For a beverage, yes. For a beverage, yeah.
Javier: Oh, okay.
Jeff: [inaudible 01:18:01]
Javier: I wanna wrap-up with some final questions. Maybe, like, five questions or so. What's the most fun thing about being the founder of the Global Beverage Enterprise, and what's the most challenging part?
Jeff: Well the most fun thing is, I had a...as an example, I had a customer call me, she was from Chicago -- and I'm in Florida, and a lot of people have family here. And she called me up, she says, "I'm flying in to see my kids or my grandparent," whatever it was. And, "Can I get a case?" because I have a small warehouse here. And I said, "Sure." I gave her the address, and then she pulled up, and they were all white, they were typically from...you could tell they're from up north and very pale. It was Florida, you know. And yeah, I gave her the case and she was like I was a movie star -- she wanted my picture next to her, hold the bottle. It's just a soda. Let me tell you, the fans, when they like something, they really get crazy.
But it's a soda, that's all it is. To me it is, but to them, they really, really become wacky when they like something. Which I don't mind, but that's the most fun, is, "You're Mr. Q? You're Mr. Q. Cumber?" I go, "Yes." "What are you doing doing demos?" I go, "Well..." They think I'm in an ivory tower because it's in Whole Foods, I shouldn't be doing demos, you see? And they like that they can send an email and get the president. You can't do that with Coke or with Pepsi.
Javier: And I think that's really cool because you just have to tell your story and people will learn more about who you are and who Mr. Q. Cumber is -- which is you.
Jeff: And a lot of times, these people that come to me have their own, and they ask for advice. I get a lot of people, I'm doing demose, "I got an invention, how do I..." They want the advice, so...and I don't mind giving that.
Javier: So here's the next question, what do you think is the biggest factor to Mr. Q. Cumber's success or Global Beverage success?
Jeff: That it's out-of-the-box. It's not a copycat. I'll take a drink that's exploding and just make a copycat, like the coconut water. Coconut water has been on the market...when I did my sparking milk back in 2004, you can get coconut milk...water from Grace, from so many companies. They've been out there for 30, 40 years. It wasn't until the money came in, and the Coca-Cola's and adding the flavor to it, and the hype. But look what happens -- 50 guys come out, millions and millions are spent, and you end up with 2 or 3 of them. So, my success has been so unusual, but again, it's a success, it's a two fork...you got success but there's also being, it's difficult when you're the first, when you're unique. It's like any person out there, when you're the first and people laugh at you, but just stick to your guns. If you feel it's a winner, stick to it.
Javier: And so, what is one of the biggest challenges you face right now with...
Jeff: Well my biggest challenge is, it's again, the platform is laid out. My challenge is to get the proper team and the proper company to take Mr. Q. Cumber to the proper level that it deserves to be. I mean, from what I've accomplished with one person, with no budget, to me it's kind of been amazing. Most companies go out of business within two to three years, and I've stuck it out and put a lot of money into it and I've recouped my losses, or my investment, but it's gone to a level where the main thing now is to get...I want everyone to taste it. The way it is now, 9 out of 10 people don't know Mr. Q. Cumber. And I want you to walk into a restaurant and have it on the menu -- like I mentioned, San Pellegrino, Perrier, or Mr. Q. Cumber. Or walk into a supermarket, and there it is.
Javier: And so you said you're a success with a one-person operation. How much sales have you done in the life of the company?
Jeff: Oh, it's millions. It's been in the millions here, over seven years. But again, you gotta remember, my outlay at the beginning was tremendous: trade show, trade show, trade show, samples. A priority mail box is $12? And you ship out sample, after sample, after sample, and it sits on the floor or the secretary drinks it, and you never hear back from them -- very expensive. It can get very expensive with a startup. I can imagine what the almond drink people went through, and what everyone goes through. Very, very expensive.
Javier: Yeah, so you've put up, I think you said half a million or so?
Jeff: My own personal funds, yeah, personal money.
Javier: And how long did it take to recoup that? How many years?
Jeff: Around '14, 2014. So it took quite a few years.
Javier: Ten...or no, no, five?
Jeff: Five years? Maybe five.
Javier: Five years.
Jeff: Yeah. I'm not in every store in America, it's just this small...it's a small company, so...
Javier: So what are your plans for the future?
Jeff: Well right now, again, my Retrobrand is my main, main thing I do see right now the biggest thing in 10 years with ice cream. Franchising of yogurt stores, 10 years ago, you walk into the yogurt place and you put your own little toppings, and there were over 50 different companies, now they're like...they're in the 5. You've got [inaudible 01:24:00] and you've got Pinkberry and a few other ones, and that's about it. That market is saturated for franchising, but right now...And to me it's kind of...it's wild because the kids nowadays who...the ice cream lovers, the young kids, never had ice cream sandwiches, they never knew what a Chipwich is. And the biggest thing right now, Mintel just did a report that ice cream sandwiches is the biggest thing right now in the world...in America, and two companies are opening franchises.
You walk in, it's a hybrid bakery and an ice cream store, so you walk in and you're getting a Chipwich copycat, basically. You order your cookie -- there's, like, 10 cookies -- comes out of the oven nice and fresh, then you pick out the ice cream you want, then you roll it in sprinkles or cotton candy or whatever, and you got a beautiful ice cream sandwich, and there's a few companies out there that are franchising. My goal is to franchise Chipwich -- because that's the name, is Chipwich, these are all Chipwiches. So buy a Chipwich franchise, and the lines are out the door at these places.
Javier: Yeah. So I'm also curious, what would the world would have been like without Mr. Q. Cumber?
Jeff: You would see less faces with a perplexed view on their face. I mean, when I give a sample to a person, I always watch their face when they drink it and it's like, everyone is the same. People are so predictable. You get that face, they go, "Wow." And they're honest. If I'm watching the YouTube videos you can see that, they go, "Wow," because it's not what they expect. And there aren't too many products out there like that, where because it's so...When you say, "Well, here's an orange," you know it's an orange, you know what it's gonna taste like, but it's a such a weird thing that, when they do taste it and they're...I've got people who hate cucumbers and they still like it. There was one guy on YouTube, him and his family did a rating, and he hated cucumbers, he still gave it a plus, even though he hated the drink...the cucumbers.
Javier: And is it because the kind of cucumber that you're using for the extract?
Jeff: It has to be, because I'm sure if it's a different...If they took my drink next to...I hate to say competitors, but who's one of my competitors? I'm trying to think. Oh, DRY Soda, he has a cucumber, and you put mine next to him, they're not gonna go, "Wow." They're gonna go, "Wow," to mine. As a matter of fact, and this is the truth, I don't mind saying it online, I got an email, I didn't save the copy, but DRY Soda sent me an email asking me, "Where do you get your extract from?" I said, "What the [inaudible 01:26:58]?" I don't know who it was, but it was somebody, trying to find out where I got my extract.
Javier: Yeah, so I'm actually interviewing the founder of DRY Soda in a few days.
Jeff: I mean, I don't wanna doubt his product, he's doing more sales than me, but he's got a lot more money, he's got a lot more contacts, he's changed his bottles many times. I mean, with the proper team, we would change our bottle, we would change the label, we would improve it, we would do more marketing and research. It's all money, money, money to do it properly.
Javier: The founder is...or it's a female, her name is Sharelle Klaus. Do you have a question you would like me to ask her?
Jeff: Well I don't think she's gonna wanna [inaudible 01:27:43] the cucumber, but [inaudible 01:27:45]. Yeah, she might be interested. They did send me an email that [inaudible 01:27:49]. But again, I think I've gotten more publicity than them. I mean, if you type in 'Mr. Q. Cumber' on Google and see what I've got, and 'DRY Soda,' and compare what I've put into the company -- they put millions, I'm sure, millions and millions. I put half a million in 10 years.
Javier: The flavor of the two are completely different.
Jeff: It is, [inaudible 01:28:10], yeah, yeah, yeah.
Javier: So it's, I guess going after a different market. Now that you know what you know now, what advice would you give to yourself when you were first starting out this Mr. Q. Cumber?
Jeff: Not go into 8 million different projects. Again, that's my own personal flaw, but stick with that one project, and not do anything else. And again, social media, social media and networking. Whatever event is around, town or a trade show, you've gotta just spread yourself out and not be shy. At a trade show, they walk by, "Excuse me." You gotta stop that person and have them taste your drink or your product. They're gonna walk right by you because you're a small guy and nobody to them, you know, a buyer of a big chain. Sometimes you go to a trade show, which is one of the most frustrating things, they go right by you, going to the big guys. Step out in front of'em, it's embarrassing, but, "Here, try this," because once he tries it, he's gonna turn around and come back. You've got to have cojones.
Javier: Getting people to taste your product, is the number one...
Jeff: Yeah, well again, because mine is such an unusual product. If it's a raspberry, you know...As I mentioned, I was going to SOHO, the health food, they're more into the health-related reasons for drinks, and with cucumber you've got...My comeback to that, "What good is this for you?" It has pectin [SP], cucumber has pectin, it helps you reduce...you know, if you're inflamed, it helps you with digestion. So be ready for the answers when they give you a question on your product. Even a question that you're not expecting. I would never expect someone asking me the medicinal properties of cucumber, but I know the answer, and they're like, "Ohhh."
Javier: You know what? I forgot to even ask that. The fact that it's extract in here, are there properties...
Jeff: Yes, as I mentioned...
Javier: Hectin [SP]?
Jeff: ...cucumber, it's called pectin, it's one of the most...And of course it's got vitamins and so forth, and it's hydration, but pectin...It's in a cucumber, it's called pectin, very important. That's why people put the cucumbers on their eyes. At trade shows when I say that, I'll take a bottle and then I'll put the bottle on the eye of the girl. They laugh, so you gotta have fun with it.
Javier: And so would that be something you would want to do, put health benefits on your package?
Jeff: It all depends where the placement is. If we get a client like GNC, for example. I've been trying to get this into GNC -- 10,000, 20,000 stores? They're health-oriented. So, eh, a cucumber drink. So maybe for them, a special label -- 'The Benefits of Cucumber.' So you gotta play to your customer if you have to, for a big customer like that.
Javier: And so I wanna know, who do you think and who are you grateful for? What people or what associations or trade journals that have helped you with your success?
Jeff: Oh, well of course everyone knows BevNET. When I came out with Cucumbers to Cucumbers, they gave me 4.5 stars back in 2009. "Beverage World" gave us an award -- Best Product of 2010. I got a gold medal, one in the publications of "Beverage World." Again, at the trade show with, what's his name? I keep forgetting his name, the chef, "The Restaurant Wars." Or what was his name again? I'm so sorry.
Javier: Oh, Jon Taffer?
Jeff: Right, Taffer, exactly. Yeah, having the publications. Again, and they're honest. If it's a bad product, they'll say it's a bad product, but thankfully it's a great product, and at least they show that. Because most times you would think, unless you advertise with these people, they won't put anything good about you. That's not true. If you got a great product, they will put that in there, you don't have to pay for advertising.
Javier: So yeah, the mission of "The Specialty Sodas Podcast" is to share stories with other entrepreneurs and leaders in the beverage industry, and I feel there is a lot of value of learning from people like you, learning from others, and just everyone sharing their knowledge. And as you said, people constantly reach out to you asking for advice and help. So the goal of this show is to be able to let everyone know who is behind the company, what their mission is, what their values are, and what advice they give to other people to build a community. So is there anybody specifically you admire and you would like to see as a future guest on this show?
Jeff: Well, yeah, have you had...or he might be your competitor, but have you had John Nese on yet [inaudible 01:33:21]?
Javier: I haven't had'em, but I'll reach out to him.
Jeff: He's a very nice man, he's also...to me, he's a leader. He was, years before anybody else, with that concept, and there's a lot of stores that are doing this now. I was even thinking about make a franchise of stores like that, you know. But he is one of the most nicest men I've ever met, he took...he was the first customer I ever had, took a chance on a crazy drink, ordered pallets of it, paid upfront -- no 30 days. Wonderful, nobody would do that. And he's giving people like myself, and hundreds of other little private beverage companies, the opportunity to have a place, an outlet, to sell your product. Plus he's mail order, so you can get the product out. So yeah, I would recommend John, if you could possible...that would be a great guest.
Javier: Yeah, so okay, I'll reach out to'em, and I've met him a few times, so I'll ask'em. So lastly, if anyone wants to reach out to you or learn more about your products, how can they do that?
Javier: Okay, and are you on LinkedIn or Facebook?
Jeff: I believe I'm on LinkedIn. Facebook, not really. To me, it's still...I just never did that, but I know I should.
Javier: Yeah. And on Twitter you're at @mrqcumberdrink, right?
Jeff: I think it's mrqcumber, yeah.
Javier: Yes, so I'll link all those up in the notes, so if people wanna reach out to you, they can.
Javier: All right, so once again this is Jeffrey Kaplan, he's the president of Global Beverage Enterprises, Inc. based out of Pompano Beach?
Jeff: Pompano, you got it. Pompano Beach.
Javier: Pompano Beach, Florida. So they're the maker of many award-winning beverages, like the Mr. Q. Cumber here, and also, yeah, the Sweet Blossom -- which this one is really good, I like this drink a lot --Sparkling Cow, Mavi Power. So they wanna make delicious, one-of-a-kind, healthy beverages that haven't ever been seen on the market, and as you heard from this story, Jeffrey's a great guy, he has so many businesses.
Jeff: Watch out for the book.
Javier: Yeah, for the book, he has a book coming up. Yeah, so well, it would be interesting if you did make a book, so yeah, if you do, reach out to me, I'd love to read it.
Javier: So if you guys in the audience enjoyed this conversation, please feel free to like and share this episode. You can also subscribe to "Specialty Sodas Podcast" in iTunes and Google Play, you can also join our email list so you can be updated of future shows that are going on or new deals. And don't forget to leave a review or join the discussion by leaving a comment. We look forward to seeing what you have to say about the show, and we'd be happy to reach back out to you. So thank you, Jeff, for being here.
Jeff: Thank you, Javier.
Javier: And thank you everybody for being part of "The Specialty Sodas Podcast." All right...
Javier: ...see you guys next time.