Episode 001 | Hugh Thomas of Ugly Drinks - Dirigo Collective | Marketing Agency

Episode 001 | Hugh Thomas of Ugly Drinks

Hugh Thomas shares his story of breaking new ground in the seltzer water industry with Ugly Drinks. A UK-based company that is now worldwide in their distribution, Hugh shares the importance of staying resilient and persistent in our first episode of Renegades & Mavericks.

To learn more about Hugh Thomas you can follow him on Instagram @UglyHugh

To get the Ugly truth for yourself you can head on over to the Ugly Drinks.

Be sure to check out the non-profits that Ugly Drinks supports at Girl Up and Oceanic Global. Also, the book that Hugh referenced in this interview is The Obstacle is The Way by Ryan Holiday.

TRANSCRIPT OF EPISODE

Hugh Thomas 0:00
Even though in the in the moment you’re just like how we’re going to get out of this and so I just think staying patient staying resilient that you know if you keep those principles and stick to the reason you originally started the business and I think you’d be in good shape

Intro by Kevin Oates 0:16
From Dirigo Collective This is Renegades and Mavericks, sharing the stories of people interrupting the status quo and breaking new ground in their field.

Kevin Oates 0:31
Welcome to the very first episode of Renegades and Mavericks from Dirigo Collective. I’m Kevin Oates. This may be an odd sentence that you normally don’t hear, but the topic of seltzer can be a controversial one. You either can’t stand the taste, have had it here or there. Or if you’re like me, it is all you consume. Well, in 2019, the bottled sparkling water industry was a $564 million industry in the United States with private labels owning 80.5% of those total sales. Well, just one year earlier a new player entered the US market from the UK and disrupted how we consume and view seltzer. That new player was Ugly Drinks

Ugly Drinks Explainer Intro 1:10
The world is sometimes an ugly place. Fake news, alternative facts, ‘alternative facts are not facts.’ They’re false words, corporations dodging tax, airbrushing and fashion fads, aspartame and tacky ads. But you know what really grinds our gears? Sugar. Sugar is everywhere. But you knew that already. No, you’re here for the truth. The Ugly Truth, because it’s about time someone put the big dogs on a leash. No unobtainable lifestyles, no ridiculous promises and it won’t make you last longer. I mean, we’re not a dream. We’re a drink. Just sparkling water with real fruit flavor. No sugar, no teeth whitening, no sweetener, no convertibles, nothing artificial and absolutely no boat. We’re calling the world out on all its ugly truths. And that’s the way we like it. So can the other cans because we’re crushing it, it’s time to get real, it’s time to get ugly.

Kevin Oates 2:13
They approach the selter demographic and marketing completely differently and went straight to a digital campaign trying to captivate a younger demographic. As you’ll hear later on in this episode, Hugh Thomas and his co founder, Joe Ben, came from the UK where seltzer just wasn’t an option. And instead of joining the mainstream beverage industry, they went against the grain and launched an all natural clean seltzer just four years ago and have since expanded to the United States and are now the number one seltzer company in the UK, and have since taken over the direct consumer seltzer market, having subscriptions of the robust flavors delivered right to your doorstep. It’s time to learn all about the Ugly Truth.

Hugh Thomas 2:53
It’s it’s good to hear we’ve made our way to Maine. Obviously, as a Brit in New York, it’s always makes me feel pretty good when you find like people like yourselves we’ve not met before, but I feel like you understand everything about what we represent. So it’s just nice when the brand resonates for somebody like yourselves. So that’s nice to hear. It means a lot. Yeah.

Kevin Oates 3:16
I’d love to kind of go back on a lot of the interviews you’ve done focus on, you know, the start of ugly drinks but I’d love to go back before that, you attended University of Warwick. Business School. You did Management Science, correct?

Hugh Thomas 3:29
Whatever that means. Yeah. Yeah, I guess it’s a posh name for business, business studies or business, whatever that is for undergraduate. It was great, though. You know, when I left when I left school, high school, I knew that I wanted to. I knew I had that entrepreneurial gene, I guess and I’d done the other side hustle and sold stuff and you know, I don’t know what you call them in America like a junkyard sales and stuff like that car boot car boot sales, we say in the UK. And played around on eBay to the detriment of some school grades one year and stuff like that. But um, I think, you know, what I left school going was actually I need to learn some stuff here. And that course was a general business overview. And I still use a lot of the lessons today, you know, organizational development, a lot of the structuring of business, the finance classes, I did the stats classes, like it’s funny how these things like crop up 10 years later, but it just, you know, in what it did was introduced me to a peer group of people, you know, I’d say 50% of the guys and girls in my class are founders and entrepreneurs now. So you know, you by set me saying that you can tell the sort of people I was mingling with, and it just fueled the fire further. So it’s kind of the main benefit I got from it, really.

Kevin Oates 4:48
And do you feel that like going to business school was like a necessity for you to kind of looking back now?

Hugh Thomas 4:55
Yeah, I mean, I was I’m from a small town in England, called Worcester, where Worcester sauce is from or Worcestershire or whatever it is. And there’s Worcester Massachusetts too, right? Not far from you, I don’t think. But yeah, no, I’m from there. I mean, so so I’ve kind of grown up in the countryside, very rurally, and I think going into business school put me with a group of people from all around the world, my course was 80% international students. So, you know, people from all over Asia, China, all over Europe, American students, and so, and a lot of people from London and more kind of built up UK cities. So it gave me more of a, you know, just a totally different view on the world coming from like a rural town. So I guess that was the first part and then just, you know, learning some of the lessons about markets, business brand building, you know, these are things that you don’t learn from a peer group in a small rural town because most of the people’s jobs aren’t in that. So I think it was, you know, I don’t know do you think going to university is essential, it’s case by case really, but for me personally, I grew up a lot in those in those three years. And have a network and that network has paid off, still pays off. My friends, I’ve done interesting stuff, we collaborate, we make introductions, you know, you move to New York and the three or four people from my course who’ve moved here too at different times of their lives. So I just think from that point of view is paid off massively. Whether you can put it down to the individual lectures that I probably skipped or not, I’m not quite sure, but um, I survived that.

Kevin Oates 6:28
We all do, let’s be honest, yeah. So for a transition, finish school, you go on and you’ve actually worked in a lot of beverage based jobs, right?

Hugh Thomas 6:38
Yeah. When I when I was a student, so when I was at University or college, I was the vitamin water guy on campus. So my apartment was the one that had cases in cases of that stuff stacked in the corner. And I used to take on campus used to have it at parties, give it to sports teams, etc. Also did it a bit of that work for Unilever, too. So had Pepper Army, Axe deoderant, everything a college student needs to survive.

The Vitamin Water one was I was the first brand ambassador on campus. And I remember looking, I always wanted to have that sort of experience because for whatever reasons, love brands and associated with them. And then I started reading about beverage brands, I’ve always loved a lot of these big iconic brands. And yet, that was right when Vitamin Water was exploding, I think after it just may be just sold in America. So it just started getting that capital in the UK. And I started reading about that 50 Cent was involved and the list goes on. And that was that was pretty exciting for me at the time and yeah, learn a lot and then you realize that brands mean a lot to people and there’s a lot of different ways that The food and drink and drink in particular can play into different into lives in different ways, whether it’s sports, music, just lifestyle stuff, and I just really loved that at the time. And then after university I went to work for Heinz. So my, you know, as most students do, and they’re trying to leave and move to I was trying to move to London and trying to get that new life started after you leave the college bubble and move, you know, move away from that totally. Heinz ketchup actually offered me a job in my last year of college, which took nice beverage choice there. Which actually took a lot of pressure off that final year of University because I didn’t have to have the job interviews at the same time as final exams. So I’d already got the job. And you know, it’s the opportunity to work on two of the UK’s most iconic brands and Heinz beans and Heinz ketchup. So I actually went from like working on a Vitamin Water which is a brand like whilst I was a student, which was like four or five years old at the time to working on Heinz ketchup, which is 140, probably years old, maybe older. And there’s lessons from both. And so that was kind of my first job. And I started the job with a beard, day two somebody anonymously left a razor blade on my desk like you have to shave when you work here, wear a suit to work. And so, you know, on day one of working in a big company, I knew it wasn’t for me, but I worked there for 18 months and learned so much. And then eventually got my way back to beverage like you say. So yeah.

Unknown Speaker 9:32
The more I read Vita, Coco.

Hugh Thomas 9:34
Yup

And Joe was there as well. Your co founder, correct. Yeah, so

Unknown Speaker 9:38
I worked at Heinz ketchup for a couple of years. You know, got some amazing experience. You learn why those brands are, what they are, what a brand means to people, families. That Heinz ketchup taste, why that’s so powerful and how that brand has endured for as long as it has, 100 plus years. It’s pretty incredible for any company to last that long, let alone a brand like that. So loved that experience. But I was frustrated because I was naturally entrepreneurial, and I could spot opportunities that weren’t necessarily moving fast enough in a big company. You know, certainly the way social media was evolving at the time was frustrating for me, set up the Facebook page for Heinz, but I could see Instagram coming, I could see Twitter coming. And getting that approved was was frustrating me and I just realized that I could only go so far in a company where there were that many layers of approval, and I’m a control freak, and entrepreneurial. So, you know, it was just a recipe for disaster long term. And I actually love my experience of a lot of friends and Heinz that I’m still in touch with too, but saw the job of Vita, Coco, which I knew was beginning to explode in the US. So joined the team there. When there are five or six people I was the first full time marketing hire there. And Joe was already there. So Joe had been there out of college. He’s here like we’re around the same age, so he’d kind of gone straight there as the first sight, field sales guy who knocking on doors in London selling them coconut water for the first time, which was an acquired taste for many people. And we were in, you know that that brand was nowhere at the time in the UK and we both work through an explosion for that company. The business went from less than a million revenue to 40 million revenue in the three years we’re there from five employees to 60. And obviously, Joe and I both in our very early 20s kind of rose with it and got more and more opportunity and more more responsibility as we as we got sucked in and also became best friends because we spent all our time at work because we were loving it. Spent all our time socializing my group of friends now, you know, my out of 50% of my closest friends worked at Vita Coco at the time, it was that sort of environment. I’ve got a co founder out of it. And actually there are you know, four employees that Ugly who formerly worked at Vita, Coco. So, you know, forever thankful for the experience that gave us we learned how to expand the beverage brand across Europe in the Middle East. And then also got to spend some time in the US learning from the head office here. So we’ve got a balanced view of a global view. It’s just what something once we caught that bug and seen how it was done. The only way for Joe and I next was to do our own thing. I couldn’t go somewhere else after that experience. Yeah.

Unknown Speaker 12:16
And so so this is now the kind of the beginning stages of Ugly Drinks you were seeing in the UK that there was a lot of sugary drinks out there, you were realizing like there wasn’t a healthy alternative for that next generation of a beverage drinkers. And so like, let’s make an all natural seltzer. Now, did you have any idea how to make an all natural seltzer in the first place?

Unknown Speaker 12:37
No, I think it’s funny. So Joe and I were 24 or 25 when we had the idea for the business, there was never really a conversation going, let’s start a company. It was just beginning to happen because we were hanging out, going around Whole Foods, looking at products thinking we could do things better. And we also recognized that consumers didn’t want to drink sugar like you say, the reason coconut water was doing so well is because it was a healthy alternative to juices, smoothies, sports drinks, regular soft drinks. But we thought, Well, you know, when you actually don’t want to drink any calories at all, you know, you’re faced with a bottle of water, which is often expensive or comes from mountain ranges or has, you know, kind of quite fancy claims or even comes from, you know, islands in the Pacific. And we just felt that, you know, soda consumption such a big thing, it’s such a great price point and the brands are so iconic. That you know, you have people across the US and across the UK buying, you know, dollar less than $1 big bottles, big family packs cans when they’re in restaurants of sodas. And really, if you don’t want you know, we felt that was a huge problem. I think one in three Brits and one in three Americans is pre diabetic, which means they’re on the way to type two diabetes, which is a huge tidal wave from the health system. And generally, you know, you look at it you realize when someone drinks like a regular can of soda that has 40 grams of sugar in it, you know, it’s it goes into your body, so fast, there’s no fiber to digest. There’s no there’s no chewing, there’s no nothing for your body to break down. It’s just straight, pure liquidized sugar that goes into your body. And you know, there’s there’s families where they’re buying liters of soda a week, everybody’s having a can of soda, everyone’s drinking it, you know, lots of people drinking every day, having that sugar spike, the insulin spike and then the crash afterwards. And we just felt that that was stated, We just got frustrated by they sponsor the world’s biggest sports events. They sponsor, the world’s biggest musicians, they advertise on TV and everyone in the adverts is young, healthy and smiling. But we knew in the background, there’s this huge type two diabetes and obesity wave that is making a lot of people sick and a lot of people unhappy. And so what we thought was how can you make a product that feels like a soda brand, but doesn’t have any of the bad stuff in it? And that’s really where the idea came from. And obviously being two young guys in the in their 20s calling a brand Ugly made sense. But we had no idea as you say how to make a drink at that point, and in many ways still don’t really know what we’re doing. And it’s been a case of figuring out as we as we go along, and I think if anything when we started we’ve obviously had the amazing experience of Vita Coco and I think being again, two guys in their early 20s who think they can conquer the world. Probably had a bit of that youthful arrogance is probably the word naivety is the real word, thinking we knew what we were doing and actually since then, we’ve probably made a mistake many you know, list of mistakes is a that’s a four or five hour podcast in itself. Probably longer than that. So I think we’ve just learned by doing and learned by making mistakes since then, we’ve made some good decisions as well along the way but really, it’s just been a case of learning and adapting as we go and figuring stuff out. You know, so it’s been a it’s been a wild ride and a real roller coaster.

Kevin Oates 15:54
Now at the time were their competitors as in the seltzer realm in that healthy drinks in the UK.

Hugh Thomas 16:00
No so we we are the number one flavored sparkling water in the UK, at the time there was, again for US listeners, there’s no Lacroix in the UK, there’s none of the other seltzer brands that you’ve seen here. So, you know, we were trying to work out a way how can you make people drink water who are drinking soda currently, and that like nice ice cold can for less than the quid in the UK a pound or less than $1 over here, just such a great like replacement for 40 grams of sugar. If I put 40 grams of sugar in a bowl with a spoon, you would never touch it. I mean, asked me to finish that it’s like 13 teaspoons of sugar just be incredibly unpleasant. But actually once you start drinking seltzer like you guys in your office, you don’t really look back. And that’s like such a, such a kind of great experience for people to then be like, I don’t need to drink soda anymore. And so, we’ve been introducing that occasion to British consumers. So previously they’ve big soda drinking market and diet soda. So the first time someone tries an Ugly in the UK, they’re going wow, this isn’t sweet at all. It’s not got sugar or sweeteners in it. Some people obviously, that’s quite a shock. Whereas for others that really now and we’re beginning to see the results of our work now going, I’d never go back to soda. Because now when I drink a soda now and like, Wow, this is so insanely sweet. I don’t drink that often, by the way, maybe one sip a year, just to remember what it tastes remember why I don’t like it. And so in the UK, that’s been the journey we’ve gone on is introducing this new thing to consumers, whereas you come to America, everybody here pretty much has tried a can of seltzer or flavored sparkling water without sugar or sweetener in it at some point. And then there are people here buy in cases in cases of this stuff. So the job for us has been slightly different to introduce ourselves as a new brand with a bit more of an attitude and some exciting flavors as well. So yeah, but in the UK, we’re still we’re still the number one flavored sparkling water in that market.

Kevin Oates 17:56
And with that, I mean, how is the entry point I mean, it’s wasn’t a thing. Here’s this young company Ugly Drinks in the UK, there has not been seltzer there before. And you’re going kind of like almost door to doors and to the stores saying, ‘Do you want us?’ Were you fought with a lot of like ‘no we’re good?’ Or was there like, was it pretty welcomed because of the way you guys branded and approached it?

Hugh Thomas 18:20
So it’s always a challenge building a new brand from scratch, we had the same challenge on coconut water. Where you know, shops and stores would try it for the first time and say, you know, this tastes crazy. And it takes a lot of different elements to build a brand. You need to have an amazing team with lots of energy that can convince people and so we’ve been focused on building that for the last four, four years. In both countries. A lot of that comes from being passionate about what you’re doing, and winning people over and a lot of people say no, we still get no’s every day. But you have to keep going and a lot of people who said no to us initially whether it’s manufacturers warehouses, retailers, customers… And now beginning to say yes, just through pure persistence and grit and determination. So the UK still very early on, we think there’s lots of potential ahead because there soda is so big. So big. That’s what we’re going after. In the UK, it’s a $10 billion market in the US is $80 billion is spent on soda every year. Every venue, every restaurant, every cafe, every shop sells lots of soda. So for us, like that’s kind of what we’re focused on, on giving people an alternative to so we’re just getting started. But you know, it’s fighting against those big companies and those behaviors people have been in for 20, 30 years takes a lot of work and a lot of passion and determination. So we that’s what our team has and does every day.

Kevin Oates 19:45
Before we kind of talk about the subscription model, which is really kind of new, especially for a lot a lot of beverage companies. Let’s back up a little bit. So 2015, 2016 new launch ugly, correct?

Hugh Thomas 19:56
Yeah, in the UK. Yeah.

Kevin Oates 19:57
In the UK, and then we’re looking at fastforward two years and you kind of make your your 2018 your US entrance point where you do have competition and a lot of it.

Hugh Thomas 20:08
Yes. Yes, exactly. So in the UK, our competitors are the soda companies. And in the US our competitors are some of the same companies but with flavored sparkling water brands. But that that two year difference between launching in the UK in the US, for me felt like a decade, lost most of the hair on my head with juggling the two businesses at once. But, you know, our mission to help people avoid drinking soda takes us to this market. So obviously, there are so many consumer soda consumers here this is the home of soda consumption, where it was invented. And we wanted to come to the backyard and see if we could make it happen like for no other reason, really, then we feel like consumers here deserve more choice and they deserve brands that speak to them. And we felt that a lot of sparkling water brands are great. It’s flavored sparkling waters, but they’re not really saying Hey, stop drinking soda. Try this instead, they don’t really have that passion and that mission behind them to do better. And so that’s that’s really what we thought we could come here and bring to it and bring something different and an attitude that’s different and then make a product was different. So our product here versus you know, some of the other sparkling water is a slightly more carbonated so more like a soda. We’ve tried to make it very flavorful. So it kind of if you are a soda consumer, making that switch feels easy. And so for people that are drinking six to eight cans of soda a day, which there are many, this is such a great way to cut out, you know, 2000 3000 calories without really noticing it. And so that’s kind of what we’re focused on is winning people over one by one. And yeah, the US is a daunt- for anyone for coming from the UK as an entrepreneur. It’s a daunting market. It’s so big 300 million people take six hours to fly over the whole thing. So you know, many people in the UK go how where do you start and for me, it’s just been breaking it down. You know, like any big problem, you can’t eat the whole thing in one. So you have to go okay state by state, city by city, consumer by consumer store by store. And now as we start, we started with that mentality. It’s beginning to work now. But you know, it’s a long old journey this, you know, I started work at a company that took that is about 140 years old. So I know it’s not going to happen overnight. So yeah, we’re right at the beginning of that journey now.

Kevin Oates 22:26
So did you start in New York City as far as the first location?

Hugh Thomas 22:30
Yeah, we we launched online, which I think we’ll talk about but also in retail too. Landed in New York. I moved here. First employee was former colleague of Vita Coco as well at Joe and I’d known for like, last five years. He’d worked for them in New York, so we knew he had the hustle and the heart that everyone at that company does. And we we started with a small distributor selling in stores in Williamsburg in Brooklyn and parts of Manhattan. started getting the ball rolling alongside starting to ship products online to consumers in the US, like yourself. And yeah, we learned a lot you learn a lot anytime you put a product on the shelf like you learn stuff instantly that you then want to change whether it’s packaging, flavors, price point, etc. So the first year, I’d say in this market was very much a learning year in terms of, okay, which factory do we want to use? How do you get products around the country? Are we set up legally correctly? If I got the banking right, are we paying taxes? We do, I think. Don’t chase me down if we’re not doing it properly, but we’ve definitely looked into it. And yeah, so it’s a big learning curve. And it remains to be a big learning curve. But you know, I look back to when I first got off the plane with a suitcase with a one way ticket. Staying in a friend’s apartment here in New York. We’ve come a long way. And sometimes you forget to realize how far you’ve come and how much you can learn when you really work at something, you know, day in, day out. So Started with like, 50 stores in New York. And now we’re in about 10,000 stores in the US. So, yeah, I forget those numbers sometimes. But yeah, it’s, you know, it’s like a snowball, you start with a small one, keep it rolling. And as long as you keep pushing, sometimes it’s incredibly painful, but we just keep going. We’re by nowhere, done or even started to be honest, but at least it’s progress.

Kevin Oates 24:23
I just want to back up when you guys were the UK, it was just you and Joe doing everything?

Hugh Thomas 24:29
When we first started the business, it was Joe and myself in my apartment in London with a couple of laptops. And then we actually hired a couple of interns who and Allah who’s actually one of those is is a runs our direct to consumer business. Now she’s been in the company from that since day one. We kept a very tight team throughout this

Kevin Oates 24:50
Amazing.

Hugh Thomas 24:50
You know, in the UK, we launched the US business and we were running a UK business full time with a team of four in the UK. So we had two continents. Running out of an office in London, before we moved here, which is pretty insane. And then I moved over here and now we have a much, much bigger team. But um, yeah, it’s it’s been a real case study and getting people who are passionate and fully engaged. And you can really do a lot with a small team. And I think maybe given what’s happened now, remote work and maybe having smaller teams is maybe the world or where the world will head in the future. So, you know, we’ve always had that philosophy, and it’s worked quite well for us.

Kevin Oates 25:29
And so now, let’s transition back to the subscription idea. Was this an idea from the start? Or was this kind of like solving a problem? Like, how do we bring into the market easier? And is this a way to kind of get around that?

Hugh Thomas 25:42
Yeah, so so we always wanted we were always ecommerce focused in the UK, and we ran a regular ecommerce store where you could buy cases one off and also subscribe and save, as most […] seed businesses are. In when we first launched in the US, we felt there was an opportunity to initially and it was always the plan to use it initially to bring in subscribers because there are seltzer addicts here who drink a lot of sparkling water who don’t necessarily want certainly in big cities like New York where you have to carry your groceries home or carry it out four flights of stairs don’t necessarily want to carry big heavy cases of seltzer home from the store every week, every two weeks every month. And we felt there’s an opportunity and certainly offices the same like your office where you guys there’s a lot i’m sure like drinking a lot of cans, even going to the grocery store and picking that up is like painful whereas you can just set it and forget it and that will arrive in the stores fridge is never empty and nobody’s ever complaining you’ve run out. So we launched with that. People drink seltzer every day, so much like taking daily vitamins or brushing your teeth or something like that. It’s a you know, you people are drinking five, six cans a day. And then whilst that started building, we got a lot of requests for people who wanted to try it or at one off try different flavor. And so once we felt the groundswell was there we’ve had, you know, by the time we launched a regular commerce part of the business, we’ve had orders in every state in the US at that point. In every major metropolitan city, we decided to introduce regular commerce. So now people can buy one off cases, but also subscribe and there’s a lot there’s a lot of benefits for us benefits for our subscribers coming as well. So we’re about to launch a next week, we launched the first of our limited edition flavors, subscribers to our product get first access to that before it sells out. And they get they get access to better pricing as well and discounts and special offers and things like that. So we still we still value our subscribers massively and people who kind of supported us certainly from the beginning to we always try and look out for as well. So we’re just beginning to expand our footprint, but that was the initial strategy.

Kevin Oates 27:47
And I don’t know if the off the top of your head. Do you know about how many subscribers there are for ugly drinks at this point or-

Hugh Thomas 27:55
It’s in certainly, you know, around the 10,000 number. It’s growing at the most because a lot of people at home we’ve realized they can’t get seltzer from the office at the moment. So you know, we’re adding quite a fair amount in the last month or so both direct to consumer businesses have been in hundred multi hundred percent growth yet month over month. So it’s a it’s a new world we’re living in right now. And you know, even I’m one of them. I suppose I was working in our office where we have fridges full of seltzer every day. I started working at home due to COVID. And I realized something’s wrong. Why am I workdays feeling different? And I do, I do have Ugly in my apartment, but I was like, I used to drink like six, seven cans a day of this stuff. So I need to increase my subscription here because normally I just had enough product for the weekend or, you know, friends visiting whatever. So now I’m like a paid fully subscribed subscriber to because I miss the product because you need like helps pass the time. Like it’s refreshing to have any guilt around it. So you know, there’s a lot of people beginning to realize that now and realize how good home delivery is too. So we’re seeing a surge in it at the moment, but there’s a lot of subscribers out there, offices and individuals, which is exciting.

Kevin Oates 29:05
So let’s talk about your audience for a second. So like you really you guys made a really smart move because you went for that millennial Gen Z demographic and went purely digital as far as your marketing campaigns correct?

Hugh Thomas 29:18
Yeah, pretty much. We felt there was an opportunity for I mean, we still do stuff in stores. People are still thirsty this until pre Coronavirus world we could do more in store demos meet consumers getting to try again for the first time. That’s a lot harder now. That actually validated our move to be more digital because obviously everyone’s spending time on their laptops, their phones right now engaging with content that way. Yeah, we felt that there was an opportunity for a brand to really build a digital footprint really engage with consumers and build a community in the sales space, which we felt maybe hadn’t been done by flavored sparkling water brand before and I still feel like we’re leading the way on that front. Yes, it’s a I guess, Gen Z millennial aesthetic. As such, and that’s our, you know, primary when you look at our data the the people picking up Ugly and engaging with us. But, you know, for us it’s a it’s a psychographic, really it’s the it’s the consumer that wants to believe in something better, we donate money to some fantastic causes a gender equality cause on the core product and ocean cause as well, that removes plastic pollution from the ocean. So, you know, anybody that wants to buy into like that post soda world where, you know, drinking that feels old fashioned, is more than welcome of us. Generally, you know, it has felt like that’s a younger demographic as people again, you know, I don’t drink soda. I’ve never drank soda all my life. But you know, there are a lot of consumers from all age groups that really engage with the vibe and the aesthetic of the brand we’ve created, which is fun and I think it’s just shows that, you know, online like we met you, there are just people everywhere who can engage with what we stand for, and it just breaks the status quo from big companies, certainly with you know, what I believe bland messages that have been around for a long time that people can begin to see through now. Everybody knows that opening, opening a can of soda doesn’t necessarily make you happy. And they’re beginning to realize what’s in it. When you turn around the back of the can, you know we Ugly is what stands for the Ugly truth. We wanted to highlight the ugly truth in soda particular but some other things as well. We felt that you know, when you read fake news, or to hear the phrase, fake news, whatever political belief you have, everybody just wants to know the truth ultimately, so they can make their own decision to make their own mind up. And we felt it’s the same with food and drink when you look at the back of a pack and you can’t pronounce the ingredients or have any idea where it’s come from. It’s a little bit unnerving. However good the product tastes. And so we felt that there was a move for that online consumer and that’s initially what Joe and I were frustrated at is that we wanted to create something clean that people knew what it was and they can make a decision on it. And we’re just providing an option. If people want to continue drinking stuff they can’t pronounce that’s fine with us, but at least we’re showing them what what the truth looks like a little bit.

Kevin Oates 32:04
Right? And look at the back of your kid it is two ingredients

Hugh Thomas 32:07
Two ingredients. And, and you know, it’s simple and it’s natural, and it is what it is. There’s no calories. It’s flavored sparkling water. We didn’t want to overcomplicate it, we didn’t want to promise to keep you awake all night, make you run faster, make you run for longer, make you beautiful, make you happy. I mean, it’s just ugly. It’s refreshing. There’s nothing bad in it. And it shouldn’t cost you a fortune either. So it’s kind of what we started with.

Kevin Oates 32:34
That was kind of based on us kind of founded the company. Also on the idea of, like you said, transparency and trust, like you want to have a relationship with your consumers. When you guys have grown quite fast in four years. I mean, it’s

Hugh Thomas 32:35
Yeah,

Kevin Oates 32:35
quite an impact, especially like you said, you’re in 10,000 stores in the US and that’s just since 2018. That’s not even a full two years.

Hugh Thomas 32:54
Yes, exactly. Yeah.

Kevin Oates 32:55
So when you’re building this team on transparency and trust, and you hired some of the different people you knew from Vita Coco, as far as trying to keep that that those values consistent with all your employees, especially when you’re working remotely like has that been a challenge to kind of keep that the kind of the company values at the core of your employees when you’re trying to when it comes to the hiring process?

Hugh Thomas 33:17
It’s a great question. And I think, as a leader, something I’m thinking about a lot and always learning and I’d say getting that, that jigsaw, right, it’s always a work in progress. And you know, we make mistakes as as leaders and founders too. And you learn things and the world is changing the way people have different age. I mean, we have people from lots of different backgrounds working at Ugly we have. We have different backgrounds, different ethnicities, you know, and so it’s a real mix of people, which we think gives us a unique edge that we have different opinions and different points and different ways of thinking about the world. But that also can take a little bit of management because we didn’t want everyone to think the same you therefore have different opinions to navigate in different ways of working to navigate too, whilst trying to have, as you say, values and principles at the core of everyone’s behavior. So you know, there are very kind of, as you said, truth, honesty, transparency, being open, at Ugly, there aren’t any organizational politics. This was the most refreshing thing. Everybody knows what they’re working towards. Nobody’s trying to climb over each other for promotions, because we’re a small team, and everybody knows their role and where we’re trying to get to. And so, you know, we try and be open and transparent. We try and treat people with respect and as they wish to be respected. And we found a lot of success hiring people through that network and hiring people who are trusted and known before putting it out maybe to the world that way. And that’s helped us keep some consistency but I’d say with the world way the world’s moving remotely now. Even in the last nine weeks since we’ve been in isolation or eight weeks, whatever it is, could be six weeks. I have no idea Feels like 20 weeks, we’ve learned so much about remote work that we were I mean, we were even talking this morning, how can we make this better? How can we make some of these things more efficient? And we’re a company that’s been working remote for two years. Plus Really? were two co founders into the country so you’re always tweaking and always learning things and always adapting to what’s out there and luckily have a team that’s that’s been willing to do that so far. But yeah, building a building a culture is like a full time job and something to think about 24 seven.

Kevin Oates 35:30
Let’s look at the the two nonprofits you mentioned. So we have Girl Up. Which is basically a cent from every can that is sold is donated to Girl Up. How did you find this nonprofit? How did you guys build this this relationship?

Hugh Thomas 35:46
Yeah, no, it’s, I’m glad I’m glad you mentioned it. It’s a phenomenal organization as a UN Foundation, charity partner focused on promoting gender equality, particularly supporting girls In parts of the world where it’s hard to be a girl, but they also do a lot across the US across the UK as well with college campus groups and girls in the US, not only supported by the charity, but also raise money for those in parts of the world. One of the schemes that money’s gone to recently is a bicycle scheme for girls in Malawi, so they can cycle to school and get get the education that many of them miss out on as they’re growing up. And so, you know, it’s quite was one of the reasons we were attracted to it is that it empowers girls locally in the markets where we’re sold, but also we’re donating money to people in parts of the world who are less fortunate. And so it’s really nice to find a cause like that where you’re actually doing both and helping both and providing, you know, the other part of what we wanted to do is actually give money back and a cent sounds like not much but it’s actually for us as a business it’s, you know, like a large amount of cash we’re donating every year. 10s of thousands of dollars, over last like, three months alone, you know, it really adds up when you’re selling as many cans as we’re selling. We didn’t want to donate a percentage of profits because a lot of startups don’t make profits. And so we committed so that when when the consumer picks up a case or a can, you know, physical money from that case you’ve just picked up is going to a good cause. Gender Equality was a big thing. I think as, as two male founders, we made a decision very early on to focus on building a diverse team. And I think the female leaders that we’ve brought into Ugly have totally transformed the business. There’s no bro culture, there’s no you know, as to male founders, that you can go in the very wrong direction very quickly and there’s many startups that have made some of those mistakes and, you know, half our top kind of core leadership team is female, and they’ve driven the business in a much more progressive direction. And so we felt that this was something in the industry that we work in which can be particularly male dominated or has been in the past. But also a lot of brands that have been, you know, run by men, maybe maybe made some mistakes. So we felt this very core to principles of our culture internally where we have respect for everyone of all backgrounds. And this felt like a cause that really resonated with us at the time and was also selected at a time when change presidents here and maybe there was a little bit more of a culture around kind of Me Too, that was building as well. So it felt like really part of that cultural Zeitgeist. And it’s just something we fundamentally believe in. I’m very proud that we donate to it. How do we get in touch with them, just tweeted them. And I think a lot of people put these things, build them up so much. I sent a tweet and got a reply. And within two days, we were talking to the decision makers, and we weren’t even that big at the time. We’d only just launched in the US. This is very early on. And now I’ve been to that. I’ve been to their conference in Washington, DC we’ve all met in person they have events in London’s we’ve been able to support them in two countries now physically with drinks for events, but also donate money back. And it’s pretty special to build something like that over the long term. And I know that our consumers really value that about that about us. As many of the big seltzer companies don’t donate any profits back from my knowledge, let alone money from every can they sell.

Kevin Oates 39:19
You guys launched the Ugly plain, Ugly still,

Hugh Thomas 39:23
yes,

Kevin Oates 39:23
and Ugly Sparkling.

Hugh Thomas 39:24
Exactly

Kevin Oates 39:25
And just plain Ugly what you guys marketed as, and that goes towards Oceanic Global, right?

Hugh Thomas 39:29
Yes, exactly. So another another cause that’s an ugly truth in the world. So on the on the first range, we felt that gender inequality and the way the world is, you know, moving with Me Too, and the way things have been run was a n ugly truth beyond us just focusing on soda we felt the same with plastic bottled water and that you have a body of water put into single use plastic bottles that can’t be recycled or are put into landfill, and also plastic bottled water that shipped from around the world, whether you can be in New York and drink a bottle of water from a South Pacific Island or a Norwegian spring or a French mountains, why why would you, you know, not have something that’s kind of produced more locally. And so we produce we’re trying to produce Ugly Plain and all our Ugly products as locally to the consumer as possible so it doesn’t travel too far. And we also use aluminium packaging, which is 100% and infinitely recyclable. And then we felt, I think, one of the large soda manufacturers are the world’s biggest plastic polluter in the oceans. And so you have one of our direct competitors, with a lot of non biodegradable packaging, piling up around the world and washing up on beaches. Why would we not partner with a charitable cause that are focused on taking that packaging out of the ocean and educating people on the on the damages of plastic in particular, it’s plastic kind of, what people don’t realize is plastic causes a lot of damage in the oceans whether even when you wash your clothes. You know, plastics leave your clothes go into the water system that eventually finds its way into the ocean, which affects global warming because of the way water absorbs carbon dioxide and sunlight. But also pollutes coral reefs, fish, etc. And you know, plastic consumption is a real issue. They say the average American eats the equivalent of a credit cards worth of plastic a week and microplastics within foods within the system. And when I heard that stuff, I I couldn’t believe it because a credit card wouldn’t be an easy thing to eat. I haven’t tried. I don’t know about you, Kevin. But

Kevin Oates 41:41
that’s a challenge.

Hugh Thomas 41:42
That’s a challenge! I’ll leave that one for you to try out or in it. Please don’t if you’re listening, not worth it. But when we read that, we were just like, well, this is something that needs to change. And so yeah, we partner with Oceanic Global. We donate the same amount as we do with Girl Up from every can of that sold and that money directly impacts taking plastic out the ocean. So again, by switching from buying a plastic bottle of water to what to our product, you’re making an active decision to change that thing about the world. And, you know, we’re just a drinks company that’s we’re but we’re trying to do our bit and trying to give people we’re trying to help people make simple decisions that affect their health. And also by picking up our can, we’re gonna give back.

Kevin Oates 42:22
Every startup, every entrepreneur kind of faces these moments where it’s a humongous uphill, everything’s against you battle. This is going into four years like you’re still this is still like the baby stage, and so much has happen. You don’t have to go into it if you don’t want to. But what has been the biggest takeaway from some of those times where it has been like, I think it’s all gonna go under. I think we’re really in trouble or whatever it is, what have been some takeaways with you individually, but as like you and Joe as co founders and working together across seas.

Hugh Thomas 42:58
It’s a it’s an amazing question I think it’s the first thing to note is that being an entrepreneur and founding a business is the biggest personal growth challenge I’ve ever taken on and learning every day and reflecting on myself and reflecting on my leadership style, the way we’re running the business, maybe some of the mistakes we’ve made and learning from those on a daily basis. And so it’s such a period of self exploration of self exploration that is fascinating and kind of, in many ways, hope lots of people get the chance to experience and you know, Coronavirus is a great example. No point when Joe and I were building the business plan, even building our business plan for 2020. Like at the end of last year, did we ever factor in a global pandemic, that would mean everyone has to sit at home for a few months, and then a global recession after that. So there’s always something coming and there’ll be something after this that’s an that’s an obstacle. And I think one of the books Joe and I read early on in our process is a book by Ryan Holiday called the Obstacle Is the Way which is perfect timing to read the book. And Joe and I actually read this when we first started the business, our very first production run. This is kind of four years ago now, we had a shelf life issue with it, and which led to us actually destroying all of the stock we made on the very first run four years ago, issues we’ve since solved. But at the time, you know, looking back now the size of the business now and the size of the problems we have now, I would take that in my stride right now. But back at the time, just starting out, it felt like a world ending, you know, decision problem, these processes and the things we learned from that problem, have now led to the way we produce the product today, which is be much more scalable. So those problems always lead to solutions, and hence the obstacles the way and I think we’ve had that mentality as a business. So when Corona virus hits and retail stores are impacted, because less people are going to them. You know, we’ve been able to double down on the direct consumer business because, you know, it’s an opportunity for us to really improve that now. An d really learn, build that part of the business out. And so yes Corona virus is an obstacle, but it’s going to show us a new way and a different way of doing things whether we, you know, improve the way we work remotely, whether, you know, even employees, like will learn things about themselves in this process. I know before we started talking Kevin, we’re talking about, you know, having time to read reflect. You know, that is an opportunity, if you look at it that way, if you look at it as a negative and pessimistic thing, then you can take it that way, but it’s a huge opportunity to reflect take stock as a business owner it’s been the same you know, where are the process is not working? What can what software can we use to fix this problem that’s just emerged and I can’t remember whose quote it is, but yeah, never never pass up a good crisis as an opportunity. So I think that’s the big learning and that’s that’s happened all along. Every single problem when I look back at it, at the time felt like the biggest thing in the world. Then you go past it and something else comes and you’ve totally forgotten about the last one and you’ve probably given the choice take the last one back again because there’s always something coming and I think these problems if you’d spin them in the right way always create opportunities and there’s happy accidents and there’s happy long term things that have happened and you know, we make a lot of mistakes but our team has learned to be resilient and tough against them so I think that’s the big learning.

Kevin Oates 46:23
In the past gosh, seven seven months you guys really have done a lot in the US you launched Ugly Energized you then I think it was only two and two or three months back you launched. Ugly Still and Ugly Sparkling. Those tall boys going to Oceanic Global’s turns out a cent from each one. What do we have? I know he talked about coming up next few weeks that those live in addition cans Do you have like huge things set in mind for Ugly as, or like something that’s a whole new pivot as far as the company or just as far as what do you see as the next year in your mind as Ugly drinks…

Hugh Thomas 47:01
Now I think it’s a great question again. And I think we’re very happy with the range of products we have now I think innovating for our consumers online, and our subscribers will be exciting. So launching limited edition flavors that only they can buy, feels really good and rewarding our community that way. But I think given given with the way the worlds turned in the last few months, certainly kind of really trying to focus on what we have, we have a lot already, and really trying to make that better and make that work harder for us. It’s going to be the focus certainly over the next 12 months. And we may add some more flavors to the core range that you’ve seen. But I think the three ranges we have in market now is more than enough for us to be getting on with. And then as those things are proven successful, we’ll improve them at the flavors and maybe take them to the UK as well who who don’t have the energy in the plane. And my friends text me every day about it. So yeah, I think I think for most businesses at the moment, it like it’s about focusing on what you’ve got really making that work being sensible and being sensible with innovation. Actually. makes sense to the consumer. So some of the ideas we had a probably being pushed back six to 12 months but I actually think again obstacles the way that’ll be a good thing for the, for the consumer and good thing for the business that we’ve built well because we’ll be focusing on improving what we have, which can only only work for us in the long run.

Kevin Oates 48:17
I want you to take just a quick second and just think back to 2016 version of you with Joe starting to say goodbye to Vita Coco, starting up the seltzer company and just think every time you go into a store now or you find someone post about it on their social media like what is like how how does that gratification like that every time you see it does it’s like a very humbling moment. Like What’s that? What’s that feeling? Just seeing your product that’s something that you guys made yourselves come into the world and and then that’s just take off and become a movement?

Hugh Thomas 48:51
Yeah, I mean, thanks for the kind words sometimes it doesn’t always feel like that and we’re perfectionists and like always striving for more, so it’s nice to hear somebody say that but anytime you ever see anybody picking up a case paying money for it, drinking it, you know, every time I get the Shopify notification still because it feels good when you’re solving a problem for someone that you’ve never met, and they’ve even in a place you’ve never even been so even talking to you on this and hearing that you guys love it, like it’s just made my day, you know, there’s lots of challenges and so hearing that, you know, me and you never met before, from different parts of the world can can end up talking. It’s just like, so cool. And the best the best feeling for for a founder remains when you you know, we’ve had it a few times in the UK, certainly where you’re walking down the street and you see someone drinking a can. Joe certainly, I’m maybe a little bit more nervous around them, but Joe will always go and get a selfie or take a photo with them. See why they picked it up. I try and respect people respect human space a little bit more. Now I’m joking, but I’m that It’s just such a special moment, it literally is the makes it all worthwhile over all the hard bits. But the most satisfying bit honestly of running, the company is watching, watching the employees we have grow. And so someone like Allah who joined us out of college and university, who’s now running our total global direct to consumer business, kind of in four years, five years, who’s still in her early 20s. That’s the best bit because, you know, the development when you reflect on where she’s come from, you know, it’s just phenomenal. And I like that we’ve been able to give her that opportunity. And I’m sure sometimes she hates working at the company, and it has to do long hours and do things that none of us enjoy, but I’m sure when she reflects on the experience too, and the bond we have together now like it’s pretty special and very, very hard to recreate at a bigger company. So that’s definitely the best bit so those two things combined make this special and make all those like terrible decisions we’ve made and painful experiences kind of worthwhile.

Kevin Oates 50:59
If you have If you had one, like one bit of advice four years, in all your years in, in these great companies building up your way, followed your entrepreneurial, you know, kind of tendencies and your gut. And it’s one thing guys like you guys really did break the mold as far as your industry, you really did do something different. Do you have any advice for anyone who wants to pursue that themselves that they feel like it’s uphill battle, because they’re doing things that’s not inside the box, which does, which can be very challenging, but there’s something that you can really that from your experience…,

Hugh Thomas 51:32
These are these are great questions. Yeah, you’re on fire right now. I think I’m the world’s most impatient man in many ways, and I’ve learned to be more patient as I’ve gone through the process. I’m still impatient and my team is listening to this even watching me open an Amazon package I’m sure is excruciatingly painful because I will just rip the whole thing apart like a like a toddler. And that kind of plays out in many of the things we’re always striving for. Always looking for more always think not satisfied with there is but I’ve learned to get better at dealing with that and let things go a little bit more. And understand that this is a marathon and not a sprint. I think it’s the ultimate advice four years, as you say, is a very short amount of time, even though to me that feels like a long time. Four years is just a, you know, we’re just getting started, as you say. And so I’m sure for people just starting out, you know, six months in, this is hard. It’s not going anywhere. You keep plugging away every day for four years and you don’t give up and you keep knocking on doors, it will happen. It will happen eventually. And I think most businesses fail probably because people give up. And there’s always a solution. There’s always a way around it and there’s always there’s always a way of doing things that you’ve not thought of and that is consistently the big thing that I think about when I’m when when I reflect on it that every time we’ve come up against an obstacle, we thought it could be the The end of it, there’s always been a solution. And so we’ve always been able to find a way around it. Even though in the in the moment you decide how we’re going to get out. So I just think staying patient staying resilient. You know if you keep those principles and stick to the reason you originally started the business and I think you’d be in good shape.

Kevin Oates 53:17
To learn more about Ugly Drinks and their mission, go to uglydrinks.com you can follow them on social media @uglydrinks. And you can follow Hugh Thomas, their co founder @uglyhugh. Renegades and Mavericks is production of Dirigo Collective. To find more bonus footage plus other episodes from this podcast visit renegadesandmavericks.com. To learn more about Dirigo Collective visit dirigocollective.com or follow us on social media.

Benn Marine 53:42
Up next on Renegades and Mavericks.

JeanMarie Gossard 53:45
But where we were in like boonie-ville, Georgia, Mississippi, Louisiana, Texas, Arizona, people were like, What the bleeping F are you doing?

Unknown Speaker 53:56
To hear more about what Jeanie was doing in the South tune into the next episode of Renegades and Mavericks.

 

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