The Startup CPG Podcast

Aaron Nosbisch
The reality is, as fun as alcohol is, it's a pretty costly thing. If you zoom out of those great times, you see a lot of hangovers and regrets and unfortunate experiences that people are waking up to is something that maybe they don't want in their life, or they want an alternative, or a little bit of space from breeze comes to solve that problem. We're giving people a truly efficacious alternative to alcohol, where they can have a social, uplifting buzz, but not with the same consequences and costs. So identifying a great product and an important problem to solve, that's first key. So, one of the issues with cannabis, as therapeutic of a product as it is, a lot of people smoke it, and when you smoke it, you're inhaling burnt plant matter. So that's kind of a negative thing.

00:45
Aaron Nosbisch
So breathe is also short for breath easy. So Brez is breathe easy. And the idea there is it's an alternative way to consume cannabis that allows you to breathe easy.

00:55
Daniel Scharff
Hello, everyone. I hope you're taking it easy. Feeling breezy? Cause today's episode is with Aaron Nosbisch, the founder of Breeze, which is a total e commerce first rocket ship in cannabis. They seemingly came out of nowhere to hit something like 30 million in annualized revenue. Their functional beverages come in two lines. One is infused with hemp derived THC, the other is non infused, and it just features the 2200 milligrams of lion's mane. They come in these beautiful, shimmering, rainbowish cans. You've gotta go to their website and check them out. In today's episode, we talked about, how did this happen? What was the regulatory environment that they launched in? What was Aaron's background in cannabis that prepared him to do this? What was the process of creating the liquid, the branding, and really, what were his core competencies beforehand? It's an awesome story.

01:41
Daniel Scharff
I can't wait for you to hear it. One note is that since recording the episode, Governor Gavin Newsom did issue an emergency order that actually banned hemp derived THC in California. So surely that'll be fought by a lot of people in the industry through the courts. Currently, breeze is shipping 244 of the 50 states. Okay, enjoy, everyone. Hey, everyone. I am so grateful. For those of you leaving reviews on Apple podcasts. I just want to shout out a few of the people who are doing it. So Ken Grain free wrote, this is a must listen pod for anyone in the CPG industry, and even casual foodies he likes. The buyer spotlights the best. Andrea wrote, this is my go to resource. As a CPG marketer the startup world is not easy, and it's great to know there's a whole community of us out there.

02:24
Daniel Scharff
Marcus Montgomery wrote, as an emerging brand, I love listening to these podcasts to find inspiration. Thank you so much. If you can leave a review, I want to shout you out here. Your brand, your company. So please make sure you mention that in the review. Thanks, everybody. Now back to the show. All right, here we go. Okay, Aaron, it is great to have you here on the podcast. I had heard about Breeze from a few different people in the industry. I see it a lot now on LinkedIn also, and I know very little about the cannabis space and even less about functional mushrooms like lion's mane. So I'm very happy to have you here so I can get some education here, I think, directly from somebody who is, like, right in the barrel of it.

03:04
Daniel Scharff
And I think a lot of people will enjoy listening as well. So do you mind just first up, can you share a little bit about your background?

03:11
Aaron Nosbisch
Yeah, absolutely. Well, first off, thanks for having me. And I think your podcast is awesome, and I'm super excited to be here and to kind of merge this kind of line between CPG and cannabis that I think has been trying to get merged for a while. And I think it's finally the time. So, a little bit about me. My name's Aaron. I'm the founder and CEO of a brand called Breeze. Breeze is the fastest growing cannabis beverage in the market today, and also one of the fastest growing beverages in general. And kind of unique about us is we focused on direct to consumer, which is a bit a traditional for the beverage industry, and have found a lot of success in doing so. We've scaled very quickly. We started about 15 months ago, and we're doing about 2.5 million in monthly revenue today.

03:47
Aaron Nosbisch
And moving. I think we moved about 4.5 million cans so far and heading towards maybe seven or eight for the year. And it's an exciting and thrilling and challenging, and no one really warned me how different, really, beverage it was of a vertical in the CPG category. It's not the same, and it's challenging, but it's a lot of fun.

04:04
Daniel Scharff
These are crazy numbers, Aaron, probably like, I bet, you know, because you talk to other people who are beverage entrepreneurs, they're just like, what? No, that. No, that can't be right. That's crazy. How do you. How do you even plan operationally to be able to grow that fast?

04:20
Aaron Nosbisch
That's a great question. I think, unfortunately, a lot of it's reaction, you know, I wish a little bit was a little bit more planning. That might save us some headaches. But I think I have a lot of experience in e commerce. I come from about a 15 year history of e comm and scaling direct to consumer brands. And I've been through this cycle of scale before, so I'm a little familiar with what it looks like to have this kind of breakneck pace. That being said, I hadn't done a beverage before. And beverages, a product that's big, you got the pallets of it gets put on trucks and gets shipped around. And the shipping, it's also heavy. So honestly, I don't know if there's a lot of planning. One of the key principles is I try to keep it simple.

04:58
Aaron Nosbisch
You know, like at the end of the day, e commerce is making a product, selling and shipping it. So if I can stay core to those principles and just refine those aspects of it, that makes a lot of the rest of it a lot easier.

05:08
Daniel Scharff
So, yeah, okay, so just before we get into the whole breeze story, tell me real quick, because you sound like a total ecom pro. What's your ecomm playbook? You don't have to give away all the good stuff, but just generally if I'm like, okay, I'm going to go and start a snack company, like what's my ecom playbook? What do I have to do to try to get a portion of the success that you've had?

05:28
Aaron Nosbisch
Yeah, honestly, it's pretty standardized at this point. There hasn't been a ton of major innovation in the e commerce landscape. Today, I would highly recommend a platform like Shopify. Shopify I think is just amazing. It has a really great ecosystem. A lot of people call it the e commerce operating system. So a lot of the tools that you would need to go and find other solutions for with other platforms, you'll just get native in Shopify. So I highly recommend Shopify. When it comes to acquisition sources, meta is still the king. So meta advertising has really great data. It's been doing it for a long time. They've been working in the AI field for a very long time and have really advanced technology that allows you to show your ads to people who are highly relevant. So meta advertising is still king.

06:10
Aaron Nosbisch
Google is also a great source. The new entrants to the space are things like TikTok Shop, which is a huge opportunity for CBG products. You're able to work with other users on TikTok who can promote your product. They get a commission of those sales which essentially makes the entire TikTok user base a potential affiliate pool for you to source new client, new customers from. So that's a big opportunity. You know, outside of that, it's kind of a traditional playbook. You want to be looking into SEO, you want to be looking into email marketing. You know, that's a real key. One is email marketing and making sure you're serving your customers there. SMS and push notification marketing, Pr. So public relations. Affiliate. Affiliate is another channel that you'd be looking at.

06:46
Aaron Nosbisch
But I just strip it all back and make it what I like to call. Keep it simple. Stupid, really. You need an e commerce website, this is your store. And you need an advertising channel to acquire net new traffic. And meta is where you should start. Just picking that as a single channel and a single solution and optimizing for, you can build a ten, $20 million company a year just doing that and really nothing else. Maybe that plus email marketing sounds simple.

07:09
Daniel Scharff
I think I should just hang up now and go and give it a go and build a ten or $20 million company. All right. And just, I guess last question on that front before we move on is what's the percentage, I would say, of like users or revenue that's coming from those different channels for you from like d two c from TikTok shop, any of those other big ones for you?

07:28
Aaron Nosbisch
Yeah. So, okay, so to start, like e commerce versus retail, about five to 10% of our sales come from retail. So the other 90%, let's call it d two c, of that 90%, I'd probably say close to 50%, is meta advertising. So Facebook and Instagram, they really are the king. They have a better solution than most anyone. And for better or worse, that's just kind of the name of the game today, direct to consumer e commerce. From there, I think TikTok Shop probably does another portion of maybe 20%, something like this. And then from there we have subscription built into our storefront as a core aspect of the business. So repeat purchase and subscription is probably another 30% of revenue. And email fuels all that. There's some kind of crossover that goes into that, but that's about how the breakdown would work.

08:12
Daniel Scharff
Okay, now we've got a little bit of the frame still. Probably everybody is like, what, though? How did, I mean, how'd you grow it so fast? So can you just tell us a little bit more about like, what is the story of Breeze? Like, what is this brand that has resonated so well with people, you know, obviously aligned with your e commerce playbook also.

08:30
Aaron Nosbisch
Yeah. I mean, so it starts like it's with every great product. You know, you really have to start with a really fantastic product. Like, it's not just putting, you know, so this kind of rise to this cannabis industry is kind of important. They have the cannabis industry. Youve had the alcohol industry for a very long time. Theres this new category class coming out, which is hemp derived THC beverages. And what theyre doing is in 2018, the Congress made hemp, specifically hemp, with below 0.3% THC by weight, federally illegal. So if you extract your THC from hemp and you put it in a beverage where its below 0.3%, that becomes a legal THC.

09:03
Aaron Nosbisch
Part of it is not just taking THC and putting it into a can, but actually really focusing on the craft cocktail experience, a really complex and beautiful flavor profile, a great smell profile. And then for us, we use what we call coactive. So we've taken Lion's mane and a unique extract in form of it and infused it with our THC to create a really unique effect. When you try breeze, it's very nice. It's a happy buzz that's euphoric and uplifting and social and, you know, it's a combination of creating an amazing product, but then identifying a really important problem to solve for that product. So for us, the reality is, as fun as alcohol is, it's a pretty costly thing.

09:39
Aaron Nosbisch
If you zoom out of those great times, you see a lot of hangovers and regrets and unfortunate experiences that people are waking up to is something that they maybe they don't want in their life or they want an alternative or a little bit of space from. And breeze comes to solve that problem. We're giving people a truly efficacious alternative to alcohol, where they can have a social uplifting buzz, but not with the same consequences and costs. So identifying a great product and an important problem to solve, thats first key, then the marketing is all just amplification on that. So for us from that point is how do we craft a brand that really articulates that without even saying it?

10:14
Aaron Nosbisch
How can you just look at our product and feel thats where deep design, deep branding, trying to play with shapes and colors and curves that other people arent that invoke a feeling in the user without us even having to say anything, was really core to the brand building process. From there, building a direct response friendly website, make it simple for people to buy your product. This is like obvious, but yet people struggle with it. And I think that if you don't do the table stakes right, you'll never be able to get to scale. So you have to do those things right initially. So building a really, for us, it was a very simple website. You know, we had a product page, we had the core homepage.

10:49
Aaron Nosbisch
We had one landing page for our advertising, and that was it, you know, and optimizing that to be very fluid and frictionless from there amplification sources.

10:58
Daniel Scharff
So where did it start? Was it like, hey, I want to do this, and let me work on the product first and figure out how to drive the THC from hemp? Or was it like, I have this idea for a brand and then trying to, you know, match it with a product, like, which came first, and then how did you go about developing the branding, which is very cool and evocative.

11:17
Aaron Nosbisch
Thanks, man. Well, for me, so I've been in the cannabis and the e commerce space for a very long time. One of my other companies is called Lucid, which is the largest cannabis social advertising agency in the world. Today, we do about 90% of all ads for cannabis brands and hemp brands most particularly. So I had a lot of experience in this hemp advertising, hemp marketing world, and I had tried a couple of these new hemp THC beverages that were coming out, and I realized, as a previous pro drinker, I would say I realized that this is really an effective alternative. This is something I can take with my friends and family and feel like im part of the party without having to consume alcohol. And so that was a revelation first that led me wanted to pursue this path.

11:52
Daniel Scharff
And those, the other ones that you tasted like, how are you thinking about those ones in terms of taste profile versus breeze?

12:00
Aaron Nosbisch
Yeah, I think a lot of them just tasted like a Lacroix or a seltzer. And personally, I'm not that big of a fan of La Croix or seltzers. Like, I wanted something a little bit more pleasant, but not so pleasant that it's so sugary and yucky like a soda might be. So it's finding that right balance there where it's. And I like kraft cocktails. I like a complex flavor that allows me to kind of explore it and enjoy it as more of an experience.

12:22
Daniel Scharff
So, yeah, I agree with you on Lacroix. I don't really drink it because it just, for me, it seems like a very, like it doesn't have any body to it, but then the flavor comes in kind of, it doesn't taste so good.

12:33
Aaron Nosbisch
It feels a little bitter.

12:35
Daniel Scharff
It's not so good. So I. Okay, so I've got breeze here first. For anyone who's just listening to the podcast and not watching the video, I want to encourage you to go and check out what the branding looks like. But I've got two of the skus here. So I've got the first one, which is the live free one that has the microdose, cannabis and mushrooms in a can. And it's a very cool, like, kind of rainbow, like, holographic looking fun design. And if you look at their ads online, you'll see it's. I mean, that's what they're showing. And it looks cool on there, too. So it makes. That'll be like, okay, yeah, I could see why that would hit pretty well online.

13:10
Daniel Scharff
And then the other sku that I have here is the one that just has lion's mane in it, which I might drink during the day when I'm recording podcasts and then maybe switch the other one at night. So, okay, when I taste this, let me tell you what I taste, and you can tell me, you know, if I'm getting this right. So I'll take a little ASmr sip here.

13:32
Aaron Nosbisch
This is the infused one you're having.

13:35
Daniel Scharff
Starting with the pure fun one. Yeah. Okay, so what I get from this is it, like, definitely citrus, acidic, you know, like a little. Yeah, a little acidity to it. I get a little bit of a, like, grassiness, I think. And it's, overall, it's a very pleasant taste. You know, it's not exactly familiar to me, but something in between, like a ginger ale or, like, you know, something like that. But then there's something new in here also, right? And it's nice. And everyone that I know has tried has been like, oh, that tastes good also. So let's see, did I. Did I get any of that right, or am I losing my beverage chops?

14:14
Aaron Nosbisch
Oh, hey, man, I think, you know, whatever your experience is, right, how I typically associate it is like almost like a lemon lime soda without the syrupiness. You know, there's like that ginger ale kind of bite, but it's. There's that lemon kind of zest. I used to drink a thing called ski in, like, southern Illinois, which was like a lemon lime soda. And squirt was another one where it kind of has a little bit of that, you know? And I was going for something that was, like, mainstream, accessible, yet unique and fun to drink. And then from there, our goal was novelty. I think this is what really a lot of consumer packaged goods products miss, is that they replicate what is working rather than try to create new.

14:48
Aaron Nosbisch
And creating new is scary, but when you do it and you succeed at it, then you have novelty, and novelty is a surprise and delight sensation for the consumer when they drink it. So, like you said, it has that kind of citrus forward, flavorful, almost like sweetness to it. But then there's a bit of a bite at the back end, and some people maybe say it's grassy or herbaceous is what we often use. And there's a little bit of a bite which kind of gives you that sense of drinking an adult beverage. You know, just like with alcohol, you have a bit of a sting, and with the infused one, you have a little bit of that bite at the back end. A little less than the lion's mane, I think. Right?

15:19
Daniel Scharff
The lion's mane one? Yeah. I mean, I guess I don't. Yeah, I don't get the grassiness on it, but I mean, it's. Yeah, it's pretty. It's pretty smooth. I would say it's. It tastes kind of like a similar profile, but it doesn't have exactly that component of it. Is that about right?

15:32
Aaron Nosbisch
That's right, yeah. And elderflower is a unique one, too. I don't know if you've ever had a gin and tonic with, like, St. Germain. They use, like, an elderfire liqueur that was also an inspiration is kind of that, like, you know, I wanted that sweetness, but with a little bit of uniqueness. And I have a really great partner, Travis Duncan, who's the master formulator here at Breeze. And he really kind of just explored and played with it for a long time until we got something we thought was, you know, familiar enough but unique enough to succeed.

15:58
Daniel Scharff
That's cool. There's almost nothing for me as fun but also stress inducing as beverage formulation. Like, giving the feedback, can we settle on this? Like, oh, God, no. What if we get it wrong? There's so much product that we're going to get out here, but, yeah, you guys did a great job. I'm excited to hear from everybody else who gets to try it also. Okay, so we've got a cool branding now that. How exactly did you get to that branding? Like, did you get an agency or was just you guys doing the work and like, to, you know, even get to the name and the overall feel of it?

16:31
Aaron Nosbisch
Who.

16:31
Daniel Scharff
Who was coming up with that stuff? What was the process like?

16:34
Aaron Nosbisch
Yeah, so most of that was me. You know, I have a skill set in marketing and branding and e common. I always tell people when they're starting their businesses, like look and identify where your skill sets are and really lean into that as kind of your launchpad. So for me, that was branding and design and look and feel, and a lot of that comes from what, you know, I like to look and look at and how I like to feel. And so. So for that one specifically, I was trying to come up with a name and I was in a small airplane on a vacation and I opened the window and I felt the breeze while I was flying over this thing. And I'm like, my breeze? That's it. It's a refreshing idea. It's clean, it's fun, it's healing, it's therapeutic.

17:09
Aaron Nosbisch
You have this kind of happiness that I think is associated with that name. But I wanted to do it in a way that was different than the word breeze. In branding, I often think if you can come up with unique words that don't mean anything actually, then you can instill the meaning in them. And so, you know, when you see breeze, it doesn't look like breeze as you're familiar with it. So it gives you, us, the opportunity as a brand to tell you what that means and show you and let you feel it, so that way you can understand it more directly. It also, this is something I think you'll get a kick out of.

17:36
Aaron Nosbisch
So one of the issues with cannabis, as therapeutic of a product as it is, a lot of people smoke it, and when you smoke it, you're inhaling, you know, burnt plant matter. So that's kind of a negative thing. So breeze is also short for breathe easy. So Berez is breathe easy. And the idea there is, it's an alternative way to consume cannabis that allows you to breathe easy.

17:55
Daniel Scharff
Okay, amazing. So now, just from the functional standpoint. So my first question is, I don't know, honestly what lion's mane is. I think I saw a photo of it once. I know it's a big deal and people are talking about it a lot these days, but can you give me the just 101 on what is it? What would the amount that's in here help somebody do, obviously, with the amount that's in here?

18:21
Aaron Nosbisch
Yeah, absolutely. So lion's mane is this big white mushroom, maybe it can be pretty large, and it looks like a brain, and that's a good way to remembering it. Lion's mane kind of looks like a brain. The reason that's a good way is to remember it is because it's very supportive of your brain. So lion's mane is the most studied cognitive enhancing mushroom on the market in the functional mushroom category, its known to do something which is stimulate NGF. NGF is neural growth factor. And so the stimulation of neural growth factor is also the precursor to building new brain cells in the mind. It also increases neuroplasticity. So its your ability for your mind to change its mind, to learn new things, to incorporate new things. Now thats more of the science of what it is.

19:00
Aaron Nosbisch
And it has a whole host of benefits, including anxiety relief and stress relief. And its an adaptogen, which adaptogen means help your body adapt to stress. And so its very therapeutic in those regards. What I think most people feel when they drink, it is a sense of clarity, maybe a refreshed kind of stress relief calming effect, sometimes a sense of focus or motivation. And we use a pretty concentrated amount of it. And then we have also nano emulsified it, which means that you're going to feel it quickly. Most lines means are not like that. So you don't feel it very quickly. Where ours you will. I think that's in an infused one.

19:32
Aaron Nosbisch
By combining that with the THC, you get a synergistic effect where you're getting the both benefits of the THC from hemp and the full spectrum cannabinoids from that hemp, as well as the lion's mane, which creates a third effect, which is like this uplifting, clear and social feeling. So you get a buzz, but you're not out of your mind like you might be with alcohol.

19:49
Daniel Scharff
Okay. And I'm definitely focused and motivated to drink more of it. It's great. And I'm feeling. I'm feeling that. Yeah. And then on the hemp derived THC side. So that's super interesting. I did not know about that. Probably a lot of people do. But then, in terms of the effect that it has on you, is it just pretty similar to other kinds of THC? And it just happens to be that because of the regulation. Like, you can just do it this way, but it's really the same thing as the other stuff, and it's like a loophole.

20:17
Aaron Nosbisch
So yes and no. So the yes part is THC, no matter if you get it out of a joint in your dispensary or an edible that your friend has or from hemp, is still tetrahydrocannabinol. Delta nine. Tetrahydrocannabinol. So you hear this delta nine words said a lot, right? Delta nine is actually just the prefix on the word THC. So delta nine tito, hydro, cannabinoid. So they're the same compound. But what is interesting about these beverages is us and other beverages in the category we use a nano emulsified form of THC. And what that means is the particles get broken up to be very small, which means that they absorb quickly and then they wear off quickly. So how that's different is if you smoke a joint, you kind of get this really high really fast, and then you kind of fall off pretty quickly.

20:59
Aaron Nosbisch
If you eat an edible, you're on this kind of 30 to 60 minutes, and then you feel it, and then it lasts four to six hour. Part of that is how it metabolizes in your liver. It creates another compound. It's called eleven hydroxy, but it's a different effect. But when you drink a breeze or a product comparable, you feel it within about five minutes to 15 minutes, and then it goes away in about an hour to an hour and a half. So it's much more comparable to the effect curve of alcohol. And then due to the induction of lion's mane, introduction of lion's mane into the beverage, you get this, like, social, uplifted, happy feeling initially, which also then leads to a relaxed, calm feeling from the THC on the backside, comparable to alcohol.

21:33
Aaron Nosbisch
When you drink a beer, you're getting a dopamine hit initially from the ethanol, but alcohol is actually a relaxant. So you're ultimately going down, getting sleepy and tired. And so our goal here was to make a real alcohol alternative to something that could actually compare and scratch the edge for people. It needs to be similar in the effect profile and the effect speed and onset and offset. And I think that's really what we optimized around in order to fit the existing behavior of consumers.

21:58
Daniel Scharff
I like the mechanism, and, you know, I'd always heard people were kind of excited about beverage just as a way to like, you know, how much you're getting also. And it's kind of like a more consistent amount. I remember way back in college once having a brownie, and it just didn't kick in for so long. I think it was like 2 hours later. I had totally forgotten even that I had eaten it. And then I was in a music class, and all of a sudden wondered why I could not stand up. Oh, jeez.

22:24
Aaron Nosbisch
You hear that a lot, too. It's unfortunate, you know, like I often say, like, unfortunately, the current state of the cannabis industry is like walking into a liquor store without labels, grabbing something off the shelf and drinking it. Like, you don't really know what you're getting, you don't know how you know, so that's why this is such a unique innovation, not just for breeze, but for this category is, like you said, it's a cap dosage, so there's only so much potency in this. You can't go beyond it, you know? And so you know what you're getting as you go into it. And just like alcohol, you kind of feel your drink as you're drinking it. So you kind of can titrate how much you're consuming to how you want to feel.

22:55
Aaron Nosbisch
And that's really not been very possible with cannabis before, other than smoking, which a lot of people at bars and restaurants might find offensive if you pulled out a joint and started smoking.

23:06
Daniel Scharff
You know, I don't really smoke a lot, but I still do enjoy the smell. I was like, at an event last night, and somebody was just smoking a joint near us. I was like, I just kind of enjoy the wafting of it, as long as, you know, it's not too much. And so you selected five milligrams as the amount to have in the can, which, you know, seems like a good amount. Like, I, man, I saw one of those pabst blue ribbons in California. Their cannabis one that had ten. I'm like, holy smokes. Like, if someone doesn't know what that dose is and just picks one of those up, they're going to be rocked.

23:36
Aaron Nosbisch
Absolutely.

23:36
Daniel Scharff
Well.

23:37
Aaron Nosbisch
And you see, you know, the issue there is that cannabis has been restricted to the dispensary channel for such a long time. And the people who are often going to dispensaries, marijuana dispensaries or cannabis dispensaries are looking for high doses. Theyre looking to get a pretty intense buzz. They want to get high. Often when you go in those markets, theyre really only selling the products that people are going into there to buy, which are high dose. But thats not the mainstream market. The mainstream market, the alcohol consumers, the rest of us were not looking to necessarily go to the moon. Were looking to feel a little bit better.

24:06
Aaron Nosbisch
And thats what we optimized for, is a beverage that will give you a good dose, but you can still maintain a sense of clarity and consciousness ableness, but then you can stack it if you want. So if you want to go up there just like a beer, have a couple more.

24:18
Daniel Scharff
It makes sense. It's not like we all go to the bar and order ever clear 151 shots just to get the best bang for buck. We're trying to enjoy the drink, have a good time, more measured. So it makes sense that people are looking for different things when they specifically go to the dispensary. Okay. So in general, you basically can ship this anywhere. It sounds like that. The way the regulations are, like the way that you've made the product generally. Yeah, most places that you want to send it to.

24:46
Aaron Nosbisch
Yeah, that's right. There's a few states that have created laws that prohibit hemp drive, THC, for example, Alaska, Idaho. This is a couple of them. But other than that, yeah, we can ship them most everywhere. There's a federal law that made this legal on a federal level. And then now states are introducing additional infrastructure and regulation that make it both safe and accessible. And we're trying to support that and.

25:06
Daniel Scharff
Just a little bit more about, like, the context that this came out of. Were there already drinks when you guys launched that were making an aggressive play for this space in the d to C business? Or were you really one of the.

25:16
Aaron Nosbisch
First, not so much in the d two c side. A little bit. So kind of, it really started in 2018, and you probably remember some of these brands. So 2018, the farm Bill passed, and in 2019, new CBD products started popping up. And that was the legalization of CBD, and that's where that proliferated for a while. So you had brands like mad tasty come out, which is a really cool product. There's a lot of these awesome CBD products that came out, but they weren't really giving anyone a buzz. And that's what a lot of people were looking for is like a light buzz or a diet weed, let's call it, you know? And that wasn't happening. So when we got into space, there were a few other players. Can. Was one of them c a n n? They're great.

25:50
Aaron Nosbisch
Great brand, great product, great team. And they had just gotten into the hemp space and they actually had come to our advertising agency looking for some support, and we helped them and helped generate a lot of success for them. So that was probably one of the first early movers in the direct to consumer space, but no one was really focused on it. And I mean, frankly, rightly so. Beverage is not traditionally a d two c channel. You know, like our d two c product. Like, there's. There's been very few beverage companies who have succeeded at d two c and definitely not at scale. And so that was kind of like, hey, can we take our unique skillset? And honestly, some of our naivete of just not knowing the rules of beverage to try to make this work.

26:23
Aaron Nosbisch
And thankfully, we found a path that did work.

26:25
Daniel Scharff
Yeah. And so, okay, take can for example. I mean, I know they did do a lot of stuff in dispensaries, I think, but they also, I mean, they had to open up commands in a lot of different places. Right. Because there are rules about taking the product across state lines for what they make. And so it seems like your approach, I mean, at least, would be a lot lighter in terms of resources.

26:46
Aaron Nosbisch
They started as a regulated dispensary product can. They were kind of the first pioneer of kind of a low dose THC beverage in dispensary channels. But then I think they realized, and kind of everyone is that people going into dispensaries weren't really looking for a low dose anything. And so that was kind of the challenge. And then they released a hemp derived variation of their product, which would make it federally legal where they could ship it to more states. I think they only started with 30 states or something out of the gate and then expanded from there. So they were one of the first to kind of use hemp and then transfer from the regulated cannabis industry to this hemp industry, which made it much more accessible, far less barriers to entry, way less corruption and political nonsense.

27:22
Aaron Nosbisch
And so that's where a lot of that started. And now it's everyone. Now you see major msos like GTI, green thumb Industries, or Curileaf, which is top two cannabis brands in the world. They all have released hemp derived THC lines now so that they can have more access points for consumers.

27:38
Daniel Scharff
And I will say one thing I also just thought of that I appreciate about it is that you don't. Those, the, like, tabs that you have on the can and like, the PBR, they're like, I've never said, honestly, as a guy, I've never said this before. Like, I'm afraid of breaking a nail. You're like, how the f. Do I open this thing? For sure. Yeah. Just part of your nice, breezy experience. Okay, so in terms of who the consumers are, that, because you're obviously ripping on ECOM, like, your ads are doing great, who are the people that you're picking up so much? Are they like, people who. I mean, because you have the two different product lines. So. Yeah, who are the people? And is it different for the two lines or a lot of crossover?

28:23
Aaron Nosbisch
Yeah, it's a great question. So, you know, most people, when they're thinking about e commerce or just CPG is. It's really. Demographic, demographic. How can you identify who that demographic is buying your product? I didnt really come with that approach. I came with a little bit different approach, which I call psychographic targeting. So psychographic targeting, meaning what are the qualities about a lot of people in many different demographics that would be the same for us. And so for us, that was people who are looking for an alternative to alcohol that still feels good. The issue, I think, with the non alcoholic space is its all of the sugar and calories and carbs, minus the funeral. And I think theres a lot of people who are looking for the fun, minus the sugar, calories and the carbs, just in a more net positive way.

29:04
Aaron Nosbisch
So that was the real vision at the beginning, was theres this subset of people, and sometimes theyre older and sometimes theyre younger, sometimes theyre female and sometimes theyre male, sometimes they live in California or New York. But this group of people has this desire for a drink that will help them feel better at a much less cost and maybe even a net positive. And so that was the target is how can we speak to that consumer in using language just like I'm using right now on the show? And what happens is people who feel that way resonate and have an affinity towards that. And that doesn't really have as much demographic profile restrictions now as we've expanded.

29:39
Aaron Nosbisch
Now we're identifying cohorts of people who are, you know, older demographics, maybe like this one with a little less thc, younger or recently, we've identified that females buy more often, but they're often buying for their husbands as well. And so there's more details that we kind of are expanding into now that we're a bit bigger. But that psychographic targeting was really the heart and soul and still is of breeze is offering people, offering those who are consuming alcohol a solution that allows them to feel better without feeling worse.

30:06
Daniel Scharff
So do you think a lot of the people who are buying this are non drinkers? They're trying to cut down on their alcohol, which I'm just consistently blown away by how high the percentage of my friends who are trying to cut down on the alcohol is or have just cut it out completely. And like, what are they doing with it? Are they drinking it at home typically, like on a nightly basis or for a weekend or they're taking it to a friends house?

30:29
Aaron Nosbisch
Yeah, good question. So, honestly, it's mostly people who are drinking who want to drink less or not drink at all. That's. And what's funny is it's not very many cannabis users, like, I'd say 80% of our customers, rarely to never use cannabis. Like, they don't really even see us as a cannabis product, they kind of see us as a functional beverage or an alcohol alternative. And so it's a lot of people who drank and have came to maybe an increased awareness of the consequences of it, and they want a better solution that allows them to feel good still. And so that's where we see the majority of our users. Something funny about this is, I think there was a stat just recently, 43% of Americans in 2023 said that they were cutting back on drinking or stopping drinking altogether in 2024.

31:09
Aaron Nosbisch
And, you know, it's kind of funny. It started with the younger generation. I think they had the opportunity of seeing their parents and kind of modern society, and kind of the, if you look at alcohol from an objective view, it doesn't look very fun. It's only fun once you try it. And so I think a lot of them saw that. And then I think the Internet proliferated. This kind of collective understanding of the consequences and which has led trends. They go up, they don't go down. Grandma doesn't usually tell you what's cool. Grandson tells you what's cool. So I think the younger generation has kind of started the trend of not drinking, which has now led to the rest of us saying, yeah, maybe that isn't the best for us. Maybe we should look for other ways to feel better.

31:44
Daniel Scharff
Yeah, it's just so interesting to reflect on because, I mean, yeah, I lived in LA up until a couple weeks ago, and I would have parties at my house, and I was blown away by at least half the people when I had a party, it could be on a Friday night. We're like, oh, yeah, I'm really drinking. Do you have something else, like sparkling water or, like, I mean, I know if I had this in the fridge, they would have been like, oh, yeah, that's cool, though. You know, I'm pretty interested in that. And, yeah, I mean, I still am not totally sure why everybody avoids it, whether it's like, okay, me, like, I get super hungover now. Even I can get hungover from one drink.

32:15
Daniel Scharff
And it's like, I want to be able to have the drink and have a good time and not feel that way in the morning. But unfortunately, my body disagrees with me. And so, like, yeah, but I. Yeah, I, you know, I won't feel bad off this. I think it still has, like, unfortunately for me, any kind of, like, ThC will still make me eat things that I don't want to eat. But also, I think alcohol actually does that as well. I think it's more about just the, like, okay. Maybe your, like, willpower to be super healthy just goes down a little bit whenever you do something.

32:47
Aaron Nosbisch
The hangover thing is not really isolated to you. You know, it's everyone. Like, that's the thing is, like, alcohol is inherently toxic to the body. Like, that's just what it is. It's why it's intoxicating is because it's toxic to the. Towards the body. And so. So it's like your body has to process all that. Your liver has to do a lot of work depending on how much you're drinking. And the older you get, the more challenging that becomes. Then the. The length and the degree of the hangovers, they get worse. But, I mean, honestly, hangovers are sometimes the least of our problems when it comes to alcohol. Like, you know, like, the regrets, the things you didn't say, the drinks you spill over the glass, you know, the bruises you get maybe if you fall over. And it's not the same for everyone.

33:22
Aaron Nosbisch
And I'm not over trying to demonize alcohol. I just think it's kind of odd that for such a long time as a society, we've agreed that there's three drugs that we're cool with, which is, like, alcohol to help us fall asleep, nicotine, maybe, to get us through the day, and coffee to wake us up. And those ones, we're cool with everything else. I don't know. It's an odd thing. And I think as just like tobacco, we became more aware of the real impact it was having and kind of have evolved our stance of society on it. And I think that's coming for alcohol. I don't think it's about prohibition. I'm, in fact, anti prohibitionist. But I do think it's about real awareness of the real impacts of these.

33:56
Aaron Nosbisch
And then looking for, like, breeze is just one of many in a growing category of functional beverages that are looking to curate a new experiences for people that don't come at consequences. And that's exciting, man. I think it's about time that we all had access to a bit more. I mean, there's thousands of plants and herbs and fungi that can do all kinds of amazing things that are therapeutic for us and feel good. I think that's what the future of drinking looks like.

34:19
Daniel Scharff
Okay, so. And then what? The future of breeze. First, can you tell me a little bit about. Okay, you have a small percentage now that's retail. Are you planning to increase that? And what kind of outlets would those be? Can you go and sell in whole foods or you have to focus on certain states or certain channels. Yeah.

34:35
Aaron Nosbisch
So retail expansion is where beverage companies get big. D to c was kind of a unique path for us to become an emerging beverage quickly to break through. The whole beverage industry is kind of screwed up in the first place. It's kind of like a lottery. Like, you start a brand, hopefully you break through. Most don't, 90% don't. But if you do break through, you typically scale pretty big pretty quickly. And that's due to retail distribution. There's a lot of infrastructure in decade old infrastructure to distribute beverages through retail. So for us, d two c has been our channel to connect with the consumer and expand initially. But retail expansion is ultimately today, I think probably the only path to get real mass consumer adoption. So we're working with new beer and wine distributors. We're working with more functional beverage distributors, traditional grocery distributors.

35:17
Aaron Nosbisch
You can buy breeze in places like grocery stores, bodegas, liquor stores, restaurants. We have a lot of on premise locations that sell breeze. And the thing is, with a new category like this, there is some evolution of regulation that is at play here. You know, like currently it's not law that you would have to be 21 plus, but most, the entire category requires it to be 21 plus to consume or to buy our products. And so things like that, you know, there's new access points that are being created and new regulation that's ensuring that miners don't accidentally grab these or use these products. And thankfully that there's a lot of good actors in a very unified industry to make sure that's the case.

35:52
Daniel Scharff
Yeah, great. Okay. And so maybe like today you're saying you're, you are in retail already. So maybe it's in some states where the retail, like, probably it's like not even like a total legislators thing. It's just like what the retailers are willing to do at this point. And so you're probably picking up some retailers or states that are more progressive, and then probably eventually they're all going to come around and you'll be in a pretty good position when that happens.

36:17
Aaron Nosbisch
Yeah. So there's the federal that allows it, and then each state can make their own laws. Most are permitting it. Some are putting some restrictions on it. An example of a state that's very permissive would be Minnesota. Minnesota has just opened the gates and created regulation that definitely facilitates it. So many bars and restaurants, grocery are carrying it, and then beverage, especially an alcoholic and her adult beverage, theres a three tier system. So you have your brand, your distributor, and your retailer. And so a lot of distribution companies are now taking on these types of beverages, which is kind of the precursor to getting more mainstream distribution. So for us, I think were selling in maybe 30 or 40 states in retail locations were probably about 400, 450 different locations at the moment.

36:57
Aaron Nosbisch
And it's everyone from the grocery to liquor to, but ultimately, as long as the state permits it, I think it will be most places.

37:04
Daniel Scharff
Amazing. Yeah. And I mean, it's so hard to understand those regulations because I think it's harder to compare how you feel about like a, like cannabis versus alcohol or something when you're just like smoking one and drinking the other and like, hard to measure. But I feel like once it's in a can like this, I can pretty directly drink one can of this with nice twelve ounce sleek and I can drink 112 ounce sleek of like a RTD cocktail or now call and like, really understand the impact of the two. And they're not, they're not that different. Right. So it's hard to imagine for sure. Yeah, yeah. I mean, you know, like, people prefer different ones and obviously the benefits we've talked about of, you know, one versus alcohol and everything, but, yeah, so that's pretty interesting.

37:48
Daniel Scharff
And then how about, like, for you guys then? Are you going to be just focused on like, you've got the great products now and I'm just going to try to get them everywhere. Are you already evolving the product lines and, you know, responding to consumer feedback? What are your plans for breeze?

38:03
Aaron Nosbisch
Yeah, I appreciate. So we have our infused and our non infused line, and part of that was getting access to different distribution points. So, so, for example, Whole Foods might have not decided to or not to take on THC beverages yet, but they do carry a lot of lion's mane beverages or functional products like this. So. So our plan right now is we're working on a full lineup of both infused and non infused that will allow us expansion in both traditional retail locations, in emerging retail opportunities where we can sell the infused. So my goal in our team's goal is really to craft experiences. I think the thing that really makes us different is that's our full focus, is how can we curate and craft experiences that lead to people having a good time in a non costly way.

38:49
Aaron Nosbisch
And I think that you can do that in a lot of different mood states and effect states in a lot of different novel and unique ways. And so we're pursuing different adaptogens and botanicals and fungis and then modernizing those with new technology like nano emulsion and unique extraction techniques in order to pull out some of these active or feel good or fun or productive or beneficial profiles in effects and infuse those into something net new, which is challenging as hell and rewarding when you figure it out.

39:16
Daniel Scharff
Awesome. Okay, well, man, I'm just super interested to keep following along your guys journey. Just a couple of questions I wanted to ask you before we wrap up. One is you're in West Palm beach. What's it like there? What's the entrepreneurial scene like that? I spent a year and a bit in Miami, so I feel like I know a little bit what that's like. There's not a lot of CPG there, but there actually are some beverage companies specifically, and there are some other well known ones in Florida as well. Like Celsius came out of Florida, you know, a couple others. So, yeah. What's it been like for you there as a beverage company?

39:50
Aaron Nosbisch
Celsius is actually out of Palm Beach county, funny enough. So right here in my, in my neighborhood. But yeah, you know, I love Florida. Like, it is just a very free state. It is very focused on, like, individual liberty and, you know, business and free market. And so those are really good conditions for business, regardless of the category. You know, for a long time, Florida was not a startup hub. It was not an e commerce hub. It was not any of it. Not a CPG hub, really even, none of it. And then I think in the last maybe three, four years, that started to change. Miami's really took off. There's a lot of great entrepreneurs, a great scene there, and West Palm, it's less concentrated of scene just due to the populace.

40:24
Aaron Nosbisch
And I think the people who are often here, there's a lot of old money in Palm beach. There's a lot of more classic traditional industries that retire here. And then there's a lot of finance activity here. So banks and hedge funds. So there's been kind of like a gap between the entrepreneurial ecosystem and that. And I think it's changing quickly, but it's a great place to live. I don't know if it's the best place to build the business, but if you're, you know, the Internet kind of broke down a lot of those barriers. You know, it's like, you know, we're having this great conversation now, and that might not have been as frequent before, but I think now in this new age, I think it's less location dependent. It's more.

40:58
Aaron Nosbisch
So how can you tap into communities that allow you to further your education and learnings and then connection and amplify what you're working on. And so that's what I optimize for, is connecting with people online.

41:09
Daniel Scharff
Makes sense. And, you know, state tax also, it's pretty good. Florida, great benefit. And just like, personally, I'm curious, you know, you seem like a, you know, hip guy. Like, what do you do on the weekends in West Palm beach? What goes down?

41:24
Aaron Nosbisch
Absolutely. Well, I love board sports. I'm like a big skater. I like surfing. I like, I have. I don't know if you know, actually, I'll show you. You ever seen one of these? This is a one wheel great brand, by the way, great e commerce brand and CPG or my consumer brand. But it's essentially a board that's kind of feels like you're floating and you just kind of fly around. And so I, if I'm not working, I'm probably hovering around my city on my one wheel kind of cruising and listening to some eDm. When I'm not doing that, I like to go to cool events and music scenes. I'm going to Burning Man. I leave tonight, actually, so I'll be gone for a week.

41:54
Aaron Nosbisch
And, you know, I'm a big proponent and believer that if you're living your best life and doing fun things regularly, that you'll create really good work. And I think that great work and great creativity comes from living fully. And if I optimize for that wholly, is I looking for opportunities to have a lot of fun and connect with a lot of people and enjoy life? Because I think that bleeds into creating really cool products and really cool ideas.

42:19
Daniel Scharff
I love it, man. That's great. And so, okay, last one, just as a retrospective, you guys obviously are crushing it. Like, it's hard to imagine how it could have gone better. But is there anything looking back at the last 15 months or that, like, oh, you know what? One thing, actually, I would have done a little bit differently. Whether it's something operationally or on the sales side or marketing, like, anything you can think of.

42:41
Aaron Nosbisch
Yeah. Well, first off, I'd say, like, there's a quote by Steve Jobs I really like, which he says, it's always surprised him how long instant success takes. And it's like, the thing is, like, breeze looks so like we just came out battered overnight and succeeded. But I have 15 years of e commerce experience, and in e commerce, 15 years is a really long time because it hasn't really been an industry for much longer than that. And so that, and then we have a lot of background in the hemp space. So I'd say is like, I hope I don't make it seem a little too easy because there was a lot of experience that led in leaning our skillset, that led us to finding outsize returns faster than most do. And I think that's possible if you lean into whatever your skill sets are.

43:18
Aaron Nosbisch
But looking back, like the things I would have done differently is I would have prioritized a bit more emphasis on retail expansion so weren't so lopsided today, to be honest. Like if I could have got that moving a little bit faster, so that way I was a little bit more diversified in our revenue channels, id feel more confident and were playing a little bit of a catch up on the retail side to compare or even to just diversify our revenue. I think thats one, I think two is hiring really good people soon if you can afford it or if you can find them. I took a little too long to bring in some key players and then that could lead to some rework of the past rather than continue just progress into the future. Probably those two things I think.

44:00
Aaron Nosbisch
Ill say one last thing. A lot of people waste a lot of money because they think that they have to spend a certain amount on Facebook ads or they have to do. It's like SEO. You hear this in SEO. The most often you got to just work with an SEO team for six months and then after six months you'll get results. So then what happens is whether it's advertising or SEO or what have you in the digital landscape is you have brands invest six months of capital hoping that one day magically it's going to change. That's not how it works and you shouldn't listen to that b's. It's not really like that. For Breeze, were spending $100 a day and we did not increase that budget until were profitable at that budget. And then once were, we increased it.

44:34
Aaron Nosbisch
And I think that one optimization will save a lot of businesses from dying.

44:39
Daniel Scharff
I love it. For me, we actually had a webinar the other day and it was on balancing growth and profitability. And the thing that we talked about the most was actually like, hey, what did everyone spend money on that they shouldnt have? And its number one is marketing. And like, I think for a lot of people it's like, well we thought we had to build up our, you know, Instagram and like we would just had to spend money like this and it was okay that it's expensive. PR retainers also came up on that one of just like for sure oh, geez.

45:07
Aaron Nosbisch
So, yeah, I did really like money on PR and out of the gate. That cost me way more than I expected. Well, and I'll tell you one last one is creative. You know, a lot of people think that they got to invest a lot in video production or whatnot. Like just whip out your phone and shoot a video of you talking about your product and how unique and valuable it is. I mean, the top performing ads that have made us millions of dollars in revenue are literally me sitting in front of my phone telling people why I love what we built and why I think they will love it as well. And that works sometimes infinitely better than a high production, high cost video would.

45:37
Daniel Scharff
Yeah, that's for us. Those are always the videos that do best is me. Just like when there's good lighting, sitting down with somebody being like, just talk me through this product right now, and you get their natural ease and enthusiasm. I love it. Okay, Aaron, you guys are crushing it. I really appreciate you coming on the podcast and just breaking it down for all of us a little bit who are just like, kind of watching this rocket ship to get under the hood of it a little bit. So thank you very much, and I hope everybody gets to check out the product and we'll be feeling breezy.

46:08
Aaron Nosbisch
Thanks for having me on, man. I appreciate it. See you later.

46:11
Daniel Scharff
Thanks. Awesome. All right, everybody, thank you so much for listening to our podcast. If you loved it, I would so appreciate it if you could leave us a review, you could do it right now. If you're an Apple podcast, you can scroll to the bottom of our startup CPG podcast page and click on write a review. Leave your company name in there. I will try to read it out. If you're in Spotify, you can click on about and then the star rating icon. If you are a service provider that would like to appear on the Startup CPG podcast, you can email us@partnershipstartupcpg.com dot lastly, if you found yourself grooving along to the music, it is my band. You can visit our website and listen to more. It is superfantastics.com. Thank you, everybody. See you next time.