Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
The idea: a soda to boost people’s immune systems so they wouldn’t get sick on airplanes. The company: Ardea Beverage Co. in Hopkins, selling Nutrisoda to relieve stress, boost energy, increase focus and more to spas, restaurants and high-end hotels. Joe Heron, president and CEO, says the company will hit $3 million in sales its first full year, an impressive amount for any new company but just a blip in the beverage market, he says.
“We make probably the world’s most functional soda. It’s big in Japan. This type of product is mainstream in Japan but they taste terrible.
I was running Novartis’ medical nutrition area. My wife suggested a nutrient drink for people who fly a lot. Protection from Seat 33B — that was the idea that caused me to lose my mind and start a business.
Most of the things that have happened have been through serendipity. We started to think, well, who would need drinks on a plane beyond ‘immune,’ our first one. That grew into four areas: immune, calm, focus, energize.
I woke up in the middle of the night and said, ‘We sell Nutrisoda.’ I went downstairs and Googled it, and the only thing I found was a vegetarian restaurant in San Juan. We’ve only been selling for six months. In this business your intellectual property is your brand. We spend a lot of time protecting it.
We also have cocktails that use our product. We trademark the drinks: the Facelift, the Bikinitini, the Spatini.
We make products that have enough nutrients to deliver functionality, and then we make them taste good. We don’t sell ourselves as a health product. We sell ourselves as the world’s best soda.
No. 1, taste; No. 2, functionality; No. 3, a fashionable image are where we work. People say, ‘You’re a health drink.Why are you mixing it with alcohol?’ Because our products are for enjoyment.
I’m a huge fan of Red Bull. Not the product, but what they did to make the market, because without them we wouldn’t exist. They sold a soda with lifestyle marketing.
The things that are enjoyed in a spa, in a bar, in high-end hotels, that’s how we market. So we try to create a consumption moment.
Everything’s different, compared to my old job. There’s no learning process that can teach you to be an entrepreneur. Inherently you have to be a little bit dumb [laughs]. The real difference is, you go to college, you join Bristol- Myers, you’re trying to manage risk in big companies. In a small company, you manage the opportunity, and you go after it with rose-colored glasses.
Our revenue this year will be $3 million. It’s a blip, $3 million, in this industry. But is it a blip for me? Do I notice? Shit, I notice every order.
We are where the market’s going. We sit at the confluence of four trends: health and wellness, obesity and managing weight, self-medication, and everyday luxuries. If you have a good product and you’re at this confluence, you have a shot at success.
Our first customer was Target. Target is a fabulous company to work with, if you have a product that’s leading-edge, fashion-forward and successful.
Distribution is everything in the beverage business. There’s multiple access models that you have to manage. For us to get to a supermarket chain like Target, you go through a distributor.
I come up with the nutrients. I write down the paper formulation. There’s a company in Louisville, Kentucky, that we work with. They say some [ingredients] won’t work in that concentration, some are not possible, they taste bad.
It gets made at the Gluek brewery in Cold Spring. Then it’s shipped down to MDI, Minnesota Diversified Industries. Their mission is to create employment for mentally challenged and physically challenged people. We get the orders in, and we electronically communicate to MDI. They pack it and send to the customers.
Our new person to handle international sales started last Friday [in July]. The volume of inquiries is such that we are becoming interested in it. We haven’t shipped anything yet overseas.
Our strategy? I’d hope that we get to a sustainable level of income that’s more predictable, and that we’ve consolidated our national image. The main strategy is to pay the mortgage [laughs].
We have angel investors. In terms of where the real money is spent, it’s in product development. What’s happening to you as you drink that soda? Your immune system is being boosted tremendously. Let’s count how many things, 12 different nutrients, and every one is chosen because it boosts your immune system.
Our different markets all require different sells. Zelo, for example, the local restaurant that sells our cocktails, is about delicious cocktails that add to a dining experience. To a spa, we’re about the original spa in the can. And then to the beauty editors, the next trend in beauty is performance.
How do I develop the messages? The best practice is selling the Cub Women’s Expo for three days.
We’ve changed. We’re much more fashionable than the original idea. We’re cool, hip and healthy.
As for the impact so far, it’s not even a period on the end of a sentence about the beverage market. I think it will be an exclamation mark [laughs].
But you can’t focus on that. You just do the best you can for your customers. Customers like to work with us because we’re normal people. They also appreciate that we do approach it with intelligence. When you lose that enjoyment you lose your soul. I’ve got the enjoyment back.
—As told to Beth Ewen
[contact]
Joe Heron is president and CEO of Ardea Beverage Co. in Hopkins:
952.934.0096; jo******@*************es.com; www.nutrisoda.com
The use of fractional executives — those hired by companies on contract to work a fraction of the hours at less cost than full-time hires — has been on the rise for years. That accelerated during the COVID-19 pandemic. John Arms, co-founder of Voyageur U, helped establish the organization to help educate free agents on what it takes to make it as a fractional executive. He’s now put that knowledge into print, recently releasing the book “Consult Your Way to a Full-Time Job.” Arms joined Upsize Minnesota Editor Andrew Tellijohn to talk about how the book can help potential fractional executives carve their new paths.
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