התמלול המלא של Founder Feature: Caroline Howard Walker Brothers

with them. And so they began drinking kombucha as, like, antidote to that. And then, yeah, Luke was home brewing the kombucha and ended up, like, kind of experimenting with. With making a higher alcohol content kombucha. 06:14 Caroline Howard Because all kombucha has, you know, slight alcohol content in it because it's fermented. Anything fermented is whether that's kimchi or, you know, what have you. And to. To get that higher alcohol content, he added an additional pitch of yeast, and that allowed the alcohol content to rise. And so then we had this, like, hard kombucha. And that's actually what I tried first before I tried the non elk. And I just thought it tasted so good and was so interesting and complex, flavor wise. So, yeah, I really was really born out of the product and less so out of kind of like, oh, there's, you know, all these trends in the space. It was more like, this is what we want to drink and it tastes good and other people agree and let's build a business around it. 06:54 Caroline Howard And I think conveniently there were a lot of, like, customer, like lots of consumer tailwinds. I think that have really helped us interest in better for you beverage overall, folks wanting functional benefits. And so I think kombucha fits really nicely into that. And it was kind of the OG in the space, but I really think that it's, you know, having a bit of a renaissance these days. 07:13 Grace Kennedy Yeah. And I know you mentioned that the hard out or the hard kombucha was the first One you tried. So how did you get involved? Obviously, Sam and Luke are brothers, so, you know, that is easy for them to be involved. But how did you know, get involved with this project? 07:28 Caroline Howard So my husband grew up with Sam and Luke in Boston. I'm originally from Nashville, and I met Sam when I was in college in Nashville through my husband. He went to a different school in Nashville, so got to know him a long time ago, and then got to know his brother Luke, because his younger brother Luke was best friends with my husband's younger brother Danny. So really like family ties, for sure. Got to know them. And then, you know, I ended up leaving Nashville. John. John, my husband and I did, and we would come back, though, because my family lives here. And we would also see Sam and Luke, and were at their house, and, you know, Luke's like, here, try this. And it tasted so good, and we really liked it. 08:10 Caroline Howard And at that point, they were thinking about building a business around the product because they'd gotten so much positive feedback on it from folks that they knew. And they were like, you and John are pretty business savvy. Would you guys be interested in working on this with us? And we said yes. So we wrote the first check into the business, and then I got involved the summer before I started my MBA program and then stayed involved throughout the mba, and when that wrapped up, ended up joining them full time. So that's. That's how it began. 08:38 Grace Kennedy I love it. So you're, like, not a member of the family, but, like, closely connected? Kind of like family? 08:44 Caroline Howard Yeah, very closely connected. For sure. They feel like my brothers at this point. 08:49 Grace Kennedy Yes, totally. Also, I'm sure you guys spend a lot of time talking now that you run a full business together. So once they decided to build this business and you got involved, you know, what were some of the first steps from taking it from, like, this home brewing situation to, okay, we'll actually have a product sellable beverage? 09:07 Caroline Howard Yeah, that's a great question. Well, obviously, the first thing was kind of setting up a larger brewing facility. So we had a couple of iterations as were getting off the ground. The very first one was actually in Sam's garage. And so that was kind of just for V1, you know, samples to distributors, et cetera. And then during that time, were looking for a true production space where we could get started. Ended up finding that and built that out. So you have that one side which is very pure. Like, we just need a place to make the product. But then, you know, we also needed to figure out kind of what's our route to market? So I think with a lot of consumer goods, direct to consumers seems to make a lot of sense. 09:47 Caroline Howard But for a beverage that needs to be refrigerated and is, you know, heavy, you know, it's not like in a powder, the economics of direct to consumer don't work as well. So we knew that we would be going into retail first and then we used Sam's distribution connections to get distribution. So because all of Sam's experience had been in that kind of craft beer DSD distribution world, he knew that really well. And we had these two products, you know, one hard, one non elk. And so it kind of made sense to go that route because they could distribute both products. So that's the route that we followed. We kind of just took the page out of the craft beer playbook and said, okay, we're going to find a great local distributor here in Nashville and kind of build outward from there. 10:29 Caroline Howard And so that's really where we started and how we spun it up. 10:33 Grace Kennedy Yeah, absolutely. And as you've been, you know, since that first initial, like small, maybe in the garage, and then you got into a proper space, and I've been working with, you know, a local distributor through these connections. How have you continued to expand that distribution? Because obviously I know you have expanded your distribution. I'm in Philadelphia and I see Walker Brothers all over the place, which is really fun for me. But how have you guys expanded or continued to expand your distribution? 11:03 Caroline Howard Yeah, so we kind of think of distribution in two different buckets. So we have our DSDS or our wholesalers. So these are distributors that are more local, traditionally have distributed alcoholic

beverages, but also take non alka into their portfolio now they service a lot of independent accounts as well as on premise accounts. And for the alcoholic products they also distribute into grocery. And so that's. We run both our hard and our non elk lines through that. With the exception of non elk, that's going to chain grocery. That's going to chain grocery, as I'm sure a lot of folks listening to this podcast know, runs primarily through, especially in the natural sector, runs through unfi and ke. And so we call that our chain anchored distribution for our non alc. 11:48 Caroline Howard And, and the reason we call chain anchored is because really securing the chain is what anchors your placement and the distribution. So we have these kind of two different distribution tracks. And on the chain anchored side, we're obviously kind of going out to retailers, pitching to them, telling them, you know, our awesome velocity stories. All of that good stuff and then hopefully earning a spot on the shelf. And then that's what anchors the distribution through, you know, a Unfi or a Khe. And then we want to try to supplement that kind of chain presence out of that DC with smaller independents that also pull from there. So that's kind of how we approach it. On the non elk side, it's all kind of done pretty centralized. We work with a broker. 12:30 Caroline Howard Not a lot of boots on the ground there, but on the other side of things with these DSDs and with our alcoholic products in particular, really regional approach. So started out in Tennessee and then expanded to North Carolina and South Carolina. And so most of our. We have 11 states of alcoholic beverage distribution. Most of that is situated in the southeast with some in the mid Atlantic because you've had our product in Pennsylvania. And so with that's largely relationship based and the distributor actually kind of comes first in that relationship versus the retailer. So we've had investors make introductions to distributors. We've had distributors be in Nashville and try our product and get in touch about distributing us through their network. 13:11 Caroline Howard So that's really been, I would say, more organic and yeah, driven more by the distribution itself rather than the kind of stores that you're going into. And then within that, a lot of credit goes to Sam for building out that network of distributors and then also developing those relationships because, you know, he used to be the sales rep. So he knows what these people who are working as sales reps, what they care about, what really motivates them. And so he goes and does like ride with and gets people really excited about the brand. And then we are genuinely able to make those distributor salespeople, our salespeople. And when you can do that, it really gives you an unfair advantage because you're not having to have as many boots on the ground. 13:51 Caroline Howard Now we do have two full time sales reps, one in Tennessee and one in North Carolina, who really drive a lot of value. But in other areas we're really leaning on our distributors and their sales teams. 14:03 Grace Kennedy Yeah, it's interesting because you guys do very much have these kind of two pathways because obviously some places don't sell alcohol, so you're not going to stock the alcoholic version. But you're kind of. And alcohol and non alcohol are kind of very different, mostly for like the legalese in, you know, this country and every state is different and all the above. So it's interesting that you have to kind of juggle that. And I imagine it requires a little bit of like, tapping your head and rubbing your stomach in at the same time. And how do you kind of manage those two channels? 14:35 Caroline Howard I would say it's, yes, there is quite a lot to manage, especially on the compliance side. And for that, all credit goes to Caitlin. She's our director of operations. She keeps us up to date on all of our permitting and that stuff. But once you figure that out, I would say the two product lines can really reinforce each other. So, for example, in Nashville, we launched with our Non Elk kombucha because were still working on getting all of the relevant permitting and licensures for the hard kombucha. And so were able to get the Non Elk into, you know, amazing coffee shops and salad bars and places that people already had a lot of affinity for and. And establishments that had a lot of brand equity. And so when a customer would encounter our product there, they were already really predispositioned to like it. 15:21 Caroline Howard And then were able to get, when we did launch the hard kombucha, it was easier to get chain placement with the hard kombucha at first than it was with the non alk, because the process of selling into a chain for an alcoholic product is a little bit less bureaucratic than it is on the Non Elk side, and that a lot of chain stores reserve flex space for local products to accommodate craft brewers. And so you're able to sell into that flex space in your local region. And so were able to get our hard kombucha in Whole Foods pretty shortly after it launched, because, you know, were able to sell into that flex space and, you know, have strong velocities there. 15:58 Caroline Howard And, you know, people who had encountered our Non Elf brand, you know, in a salad shop or something, would then be shopping in the beer aisle at Whole Foods and see our product and be like, oh, Walker Brothers, I know that. And be kind of like more predisposed to take it off the shelf. So I do think that the two are reinforcing and then kind of separate or going on with that. When we did approach Whole Foods about our non Alt kombucha, they already had awareness of our brand and our stickiness, especially in Nashville, as a result of our hard kombucha, like, being in that flex space. So I think it. It really did. It did help. So, yes, they are different and different sales pathways, but

they can be reinforcing. And I think you see. 16:38 Caroline Howard You see a lot of brands doing that now. So when we first launched, it was very unusual to be one brand with an alcoholic and non alcoholic version of the product. But now that's much more common. Right. Like Toko Chico has it, Spindrift has it. Like all of these players have non al and hard versions. And I think that really is emblematic of today's consumer. People are more thoughtful about what they're consuming. Sometimes they want alcohol, sometimes they don't. But they want to have a brand that they trust no matter what. And I think Walker Brothers really fits into that nicely. 17:07 Grace Kennedy Yeah, absolutely. And I mean, even anecdotally for myself, your brand at Expo west and then I was at my local Whole Foods and I saw you guys in the alcohol case and I was like, oh, cool, Walker Brothers. And I was like, I didn't even know they had an alcoholic version. That's fun. So, yeah, even anecdotally I've seen that kind of like reciprocity workout with the alk and non alk. So obviously you have been expanding in these regions and I'm curious what other targets you have or any other expansion you're looking towards or that you can. 17:36 Caroline Howard Speak to for sure. So we're super grateful to Whole Foods. So they were the first chain retailer that brought us in. We started with an 18 store mandate in Tennessee and Georgia and we're able to grow that to 45 stores in the southeast region. So we're super excited about that. And then Fresh Market was our first national expansion. So we also love the Fresh Market. So had to give two shout outs to like our OGs. But what I'm really excited about is our non alcoholic product is launching in Texas in HEB stores. So we won't be in all of them, but we'll be in about 40, 41 HEB stores beginning in December, I think the day after this podcast launches. So if you're listening and you're in Texas, you can go try us at your local. Local heb. 18:20 Grace Kennedy Amazing. Yes. Everybody go try this. If you're in Texas at the HEB and or if you're in somewhere like me in Pennsylvania and you want to get it from Whole Foods, you can go there too. So another thing that I really like about the Walker Brothers product is honestly just the cans themselves and your branding. So I'd love to hear a little bit about how you guys developed your branding on the can and also the decision to do the can versus, you know, a lot of the kombucha comes in those like glass bottles. So a little bit about your decision around how you just package the product. 18:54 Caroline Howard Sure. So from the get go, we knew we wanted to be in cans rather than glass. So in Tennessee, which is our home state, curbside recycling for glass does not exist. It's very difficult to recycle glass. It has to be taken to the recycling center. And we're very environmentally conscious as a company and, like, as a founding team. And so we wanted to make sure that our product

was easily recyclable. So we kind of knew were going with aluminum cans right off the bat. And it's been interesting to see that a lot of other companies have either switched to cans or things have launched in cans. So aluminum cans have become more popular for kombucha. But, yeah, for us, it was like, we knew for sure that were going in aluminum cans. It wasn't much of a decision. We just. 19:33 Caroline Howard We knew that was a priority. And then in terms of the design Sam and Luke had, they'd always been really into beverage, and for Sam especially, I think he always had this idea that he might start a beverage brand one day. And about. I think it was about a year before we got started on Walker Brothers. They had been backpacking in New Zealand, and along the way, they had collected some cans and bottles from beverages that they had tried while they were there and brought them home, kind of like in an inspiration gallery, if you will. And so they had done this, you know, over many years, like, not just that New Zealand trip, but, you know, throughout their life. 20:09 Caroline Howard And when were looking for inspiration for the brand, the ones that the three of us really aligned on and really liked were all from that New Zealand backpacking trip. And I was like, well, let's just look up, like, what designer did these? You know, we looked it up, and sure enough, they were all by the same designer. They were by a designer called Make Bardo, based in New Zealand. And so we reached out to Make Bardo, and were like, hey, we're in the US and this was before people were doing, like, a lot of remote work, too. So we're like, we're in the U.S. Like, would you work with us on this? And they said yes. So that's how we picked the designer for the cans. And then the inspiration really came again from Sam. 20:41 Caroline Howard Sam had a bit of a dream whereby the design of our can would have, like, a bridge on it out of this idea that our company was bridging kind of the gap between kombucha culture and beer culture, with beer culture being really focused on community and, like, community wellness, and then kombucha culture being focused more on, like, individual Health and kind of figuring out how do we bridge those two gaps and bring, like, a more collaborative spirit to the kombucha space? And I think that's something that's been a real priority for us. Like, we've done a lot of collaboration products. One that I'm, like, most proud of is our Rishi collaboration. We did a masala chai Kombucha. It was a NXT finalist, so really have loved that. And then we also have one in market now that's a tangerine coffee collaboration with counterculture. 21:29 Caroline Howard So really just trying to, like, bring lots of parties in and. Yeah. Expand the goodness of Kombucha. 21:36 Grace Kennedy Yes, absolutely. That's so. It's such a sweet story on. On so many levels. And it's. The branding does feel both really chic, but also personal and approachable

in a way, but, like, still feels cool to hold and carry. And so that story kind of makes sense in learning more about them and you guys and where that comes from. 21:57 Caroline Howard And we wanted something, too, that felt more approachable as well, because a lot of Kombuchas, especially at the time that we had launched, had more of, like, an apothecary, hippie kind of vibe, and we wanted to have a bit more broader appeal. And I feel like the very kind of clean can design really speaks to that, and then it also speaks to the character of the liquid inside. I like to say that the liquid tastes as clean as the can looks. You know, like, just very, like, crisp and tart, but. But not vinegary, not too funky. Yeah, Just really good experience. 22:26 Grace Kennedy Yeah. And also those collaborations are with two, like, super amazing and cool brands, so that's really exciting. And I've tried the tea a little bit with. 22:36 Caroline Howard With the collabs. 22:38 Grace Kennedy What'd you say? 22:39 Caroline Howard I said we're punching above our weight a little bit with the collabs, but we have great partners. 22:43 Grace Kennedy Absolutely. I mean, hey, take the partners you can get. They're great brands, and I'm fans of both of them. So you've been in business for a few years now. I'd love to hear, you know, what's been one of the most challenging moments since founding this Kombucha company. 22:58 Caroline Howard Yeah. Well, with entrepreneurship, I would say every day there are very highs and very lows. So, you know, you get fresh challenges every day. I would say. 23:10 Grace Kennedy Yeah. 23:10 Caroline Howard So in terms of challenges, I would say for us, one of the most challenging pieces has been building out our own production. So as you can imagine, you know, we now have a 20,000 square foot production space that requires a lot of capex to build out. And that was money that we had to raise early on in the business before we had really proven ourselves as much as we have had today. And so that was definitely challenging. But we knew that we needed to have our own production in order for our reason to exist to really be valid. The reason that our product stands out above the rest is because of the way that it tastes. And that brew process can't really be replicated in a co packing environment. 23:51 Caroline Howard And so we knew that had to be a priority for us in building the brand and, you know, had to raise a lot of capital early on and use that primarily for production and not for marketing or sales or anything like that. So we've really relied a lot on, you know, organic word of mouth growth because a lot of our capital has been spent in production. So that was definitely a big challenge for us. 24:13 Grace Kennedy Yeah, absolutely. And fundraising is hard enough even later on in the game. So how did you approach raising that capital? And do you have any advice for other people who might be trying to raise capital?

24:24 Caroline Howard Yeah, I think my biggest piece of advice is understanding kind of what is on offer to the investor, kind of understanding where you're headed with your business and why that would be attractive to a specific type of investor and then using that to narrow down who you're talking to. So it might be that you're perfectly suited for a CPG VC firm and you know, you're going to grow really quickly and really push down all the doors immediately and that's great. Or it might be that you're taking more of a slow and steady approach and maybe better positioned for angel investor or a family office. That's kind of where we've found our sweet spot in terms of who's interested in our business from an investing perspective. 25:03 Caroline Howard Or it might be that you can bootstrap it like you have enough capital to get it off the ground and can be profitable early on and continue to invest that into the growth of the business. So I feel like understanding kind of how you intend to grow the business, what's required, and then also like what type of return you think is achievable based on how you're planning to grow and then use that to narrow down who you're speaking with because otherwise you can end up talking to a lot of parties that don't really make sense and then, you know, your time is the most valuable thing as a founder and so you don't want to be wasting your time investor conversations? 25:35 Grace Kennedy Yeah, definitely. And have you done any further fundraising since that, you know, initial moment, or have you guys been kind of just like riding that since then? 25:44 Caroline Howard Yeah, so we've raised a few rounds of capital. So we, myself and the founders, we kind of kicked things off with an injection of capital and then we did a small friends and family round in 2021. And then that bigger capital raise we raised ahead of moving into our brewery. And I think we'll probably raise again to spend finally on marketing and sales. So that's on the horizon. But yeah, that's been our financing history. 26:11 Grace Kennedy Yeah. Speaking of that marketing and sales, what has been. Obviously you've said you've had to kind of rely on word of mouth with marketing and sales, but as you potentially gear up to maybe fundraise to do more marketing, what is your approach and how are you kind of strategizing, you know, potentially increasing your marketing spend? 26:30 Caroline Howard Yeah, so for us, we're really focused on shopper marketing, so activities that can be undertaken in the store. We're not big enough yet to really focus on top of funnel. So we really want to focus, you know, when the consumer is at the store ready to make a purchase. So to that end, promotions are probably our biggest investment. And, and you know, again, just a shout out to Whole Foods, like, love that they make data available so you can see exactly how your product performs when it's on promotion and then after the fact and kind of measure that. And so what we've seen is that we can really increase our velocity, our baseline velocity after undertaking promotions. So we know that's effective. So we have a lot of confidence investing in that at other retailers too. So. 27:10 Caroline Howard So that's probably the main one and then kind of additionally to that demoing as well. So just another way to get people to try the product. As were talking about before, a lot of people, when they think of kombucha, they think it's going to be pretty vinegary or, you know, they really have to believe it's good for them to drink the whole can. And, you know, we want to show the world that's really not the case. Kombucha does taste great. So, yeah, any. Anytime that we can just encourage the customer to try the product, whether it's by, you know, a temporary price reduction or a demo, that's really where we want to spend. Spend that type of money. 27:42 Grace Kennedy Yeah, absolutely. So many exciting things coming down the pipeline for Walker Brothers. And do you have your eyes on any other, I mean, I know you're launching in HEB in Texas, but are there any other states you kind of have your eyes on? Yeah. 27:57 Caroline Howard So Texas is a big focus for us, like both because of HEB and then we're also looking at getting alcoholic distribution there as well. So kind of focus on the Lone Star State. And then we recently launched in Colorado, and we think that there's a lot that we can do in that market. So really for us this year, it's about kind of bolstering our presence in states where we already are. And then as you know, as opportunities become available to increase that DSD footprint, you know, we'll want to take those. And then on the chain side, we're just really focused on increasing velocities in the stores that we're in and, you know, kind of using that momentum to get new. New chain mandates. 28:39 Grace Kennedy Yes. So exciting. So my last question is thinking about if a founder were to come to you today and be like, Caroline, like, I really want to start either a beverage brand or just a brand in the CPG space, what would be your, like, biggest piece of advice to an early stage founder? 28:57 Caroline Howard Yeah, so when people ask me this and I, I swear you guys did not pay me to say this, point them towards startup cpg. I found Startup CPG about a year into my Walker Brothers journey, and it was such a huge resource for us because it aligned with when we were beginning to look at chain retail and I was able to learn so much about just how it all worked and, you know, the various things you need to be aware of and, you know, how to be savvy, approaching retailers and, you know, approaching distribution and being really thoughtful about it and, you know, the webinars are free and that you guys had partnered with Rodeo CPG to do this thing called Cart Camp that I attended. And I learned so much in Cart Camp. 29:39 Caroline Howard That's my number one tip is really just go consume all the content on Startup CPG and then come back and like, ask me questions. Because I feel like it's such a great crash course, especially for people that might not have had a career in CPG before or unfamiliar. I just felt like I learned so much from the platform. So that's my number one piece of advice. 29:58 Grace Kennedy Oh, wow. What a lovely way to end our show. A little shout out. But I mean, even if I didn't work for Startup cpg, if I were a founder, I would also use our resources because they're basically all free, so there's no point in not utilizing them. But I'm so glad it's been useful to you and useful to your team. And as you know, the startup CPG team is a fan of y'all and we're very excited to see where Walker Brothers goes next. So speaking of that, where can people learn more about Walker Brothers and see, you know, where they could buy it or follow along for when it'll be available in their state? 30:36 Caroline Howard So I would say we're social media wise, we're most active on Instagram. We're, we're a team of millennials. So Instagram is our home. You can learn a lot about us on there and get lots of fun behind the scenes at the brewery. We're a pretty goofy crew. It's kind of fun from that perspective. There are definitely some kombucha chugs on the Instagram account, otherwise you can catch us on our website. So drinkwalkerbrothers.com we've got a store locator where you can see where all you can find us. And yeah, we're just excited to be building this business and creating these products and hopefully, you know, bringing a little bit of joy to people when they crack open the can. 31:12 Grace Kennedy I love it. Well, I'm going to go, I think I have one more Rishi Chai Walker Brothers collaboration in my fridge, so I'm going to go crack one of those open. But it was such a pleasure to chat with you, Caroline, and really excited to see what you guys do next. And thanks for coming on. 31:28 Caroline Howard Thank you. 31:28 Grace Kennedy Cheers. 31:28 Caroline Howard Thanks for having me. 31:32 Speaker 3 All right, everyone, thank you so much for listening. If you enjoyed this episode of the podcast, it would help us out so much if you left a five star review on Apple Podcasts or Spotify. I am Grace Kennedy, the editor for Startups Depending. So feel free to add me on LinkedIn or reach out to me on Slack. I'm always on the hunt for new and exciting brands to feature. And if you're a potential sponsor that would like to appear on the podcast, please email partnershipsartupcpg.com and finally, as a reminder for anyone listening, if you haven't already, we would love for you to join our community on Slack and you can sign up via our website, startupcpg.com.