Natural Distribution Strategies That Actually Work | Ryan Emmons | Waiākea

Co-founded in 2012 by Ryan Emmons, his cousin Alex Preston, a Hawaiian artist and game designer, and friend Matt Meyer, Waiākea Hawaiian Volcanic Beverages is a premium beverage company from Hilo, Hawai‘i, offering volcanic water, sparkling water, and coffee, crafted with deep respect for the land, its people, and the responsibility that comes with both. 

Rooted in sustainability, Waiākea is setting a new standard for CPG, blending exceptional taste with conscious practices. From their certified B Corp status and proprietary 100% post-consumer recycled plastic, OceanPlast®, to their community-driven Kōkua Initiative nonprofit, Waiākea is changing the way we hydrate.

Inspired by the founders' long-standing work with clean water and education non-profits, the concept for Waiākea was to move away from singular profit and towards a triple bottom line model (circular packaging, sustainable sourcing, and commitment to the community). 

Their water embodies that mission with an experience that’s natural alkaline pH, 100% BPA & PFA Free, packed with electrolytes & minerals, light, crisp, and refreshingly clean.

In This Conversation We Discuss:

• [00:00] Intro
• [01:25] Turning sustainability into an advantage
• [03:28] Starting without industry experience
• [05:49] Sponsor: Electric Eye
• [07:00] Building a business from a class project
• [09:45] Self-distributing to reach early customers
• [11:57] Sponsor: Klaviyo
• [13:56] Building trust through consignment
• [15:12] Scaling distributions with good relationships
• [17:06] Callouts
• [17:16] Adjusting strategy based on performance
• [20:47] Sponsor: Intelligems
• [22:47] Managing supply chains for heavy goods
• [25:01] Balancing risk with growth opportunities

Resources:

• Subscribe to Honest Ecommerce on Youtube
• Alkaline Hawaiian Volcanic Water waiakea.com/ 
• Follow Ryan Emmons linkedin.com/in/ryan-emmons-8709871b/ 
• Book a demo today at intelligems.io/
• Migrate and grow more klaviyo.com/honest   
• Schedule an intro call with one of our experts electriceye.io/connect

If you’re enjoying the show, we’d love it if you left Honest Ecommerce a review on Apple Podcasts. It makes a huge impact on the success of the podcast, and we love reading every one of your reviews!

Transcript

Ryan Emmons 

If you're going to become a big brand, you have to incubate and be successful in natural channel. And what they don't tell you is that the natural channel is the most expensive and the most competitive channel to operate, especially in our categories. 

Chase Clymer

Honest Ecommerce is a weekly podcast where we interview direct-to-consumer brand founders and leaders to find out what it takes to start, grow and scale an online business today. 

Hey everybody, welcome back to another episode of Honest Ecommerce. Today I'm welcoming the show Ryan Emmons. He's the co-founder and CEO of Waiākea Hawaiian Volcanic Beverages. Ryan, welcome to the show. 

Ryan Emmons 

Hello. Nice to meet you, brother. Thanks for having me. 

Chase Clymer

Yeah, I'm excited to chat. So I guess quickly for those that are unaware, could you talk to us about the types of products you're bringing to market over there? 

Ryan Emmons 

Yeah. So we have a couple different water and coffee products. The whole premise for us is, we're primarily known for our premium water, which is the Waiākea Hawaiian volcanic water. So it's distributed in about 40,000 plus locations around Hawaii and the mainland US. But yeah, we're known for really our social impact, first and foremost, which is unusual in the premium water space. 

Chase Clymer

Absolutely. Now, I guess, take me back in time. We got a chicken or the egg question. What came first to you? Was it the passion behind the product or was it the passion behind the impact and finding a way to do that? 

Ryan Emmons 

The product was definitely the result of the impact and what we saw in terms of addressing a lot of market trends. And a need within bottled water and beverage towards better sustainability standards in terms of sourcing, packaging and a couple other categories. Obviously the backstory of me being involved in a lot of clean water and education NGOs going all the way back to when I was about 13. 

And so, yeah, and I was also a hydrology minor. So interested in all things water and really. I saw an opportunity to scale a beverage and create some pretty significant, hopefully at the time, industry change towards those standards. So 100 % use of 100 % post-consumer recycled materials. Again, better aquifer management from a sustainable yield and recharge rate perspective, use of renewables for manufacturing, and ultimately bring our community with us along the way. 

These are things that bottle water. A lot of people, we kind of get demonized on behalf of the overall beverage category, even though all beverages are 99 % water. So yeah, you really had to address a lot of those consumer wants and needs. And that was the opportunity that we saw. And one that hopefully would lead to us also scaling impact outside of just kind of our industry. 

Chase Clymer

Yeah. 

Ryan Emmons

But for our local community, etc. So yeah, I think it first started with those needs and preferences and trends. And then we created the brand to address that opportunity. 

Chase Clymer

Now, did anyone on your team have a CPG background or were you learning as you went? 

Ryan Emmons

We had no experience. My co-founder and I were in college. My cousin is this very famous Hawaiian game developer. This now goes by the name of his studio, called Heart Machine. Probably had the most experience just from the fact that he was just helping us with the design. So, but that was really it. So this was our feasibility project in our entrepreneurship class at USC. And we had zero experience. 

To be honest, I really do feel like it gave us a leg up because if we knew how gnarly the industry was, I don't think we would have done it. I don't think we would have pursued it. So that naiveté is definitely an advantage and just kind of a thirst to figure things out and to learn, I think, is why we're here. 

Chase Clymer

I wish I could list off the top of my head and AI is unfortunately not this good. I've heard from multiple, multiple guests on this show. They're like, “Yeah, if I knew what I knew now, I probably wouldn't have done it.” And it is that kind of blue ocean. Like, oh, this is all of this can be easy. We can definitely do this. And not to hurt any entrepreneur's dreams out there. But it's like, yeah, if you have an idea you're passionate about, do your best and just really give it that effort because the grass is always greener, I guess. 

Ryan Emmons

Yeah. And I will say, even though we didn't have professional experience in CPG, we have been doing 2 to 3 years of feasibility, analysis and business plan development. And we knew that there was a larger opportunity. So at the very least, we had qualified that. 

So my only recommendation to entrepreneurs is as much as it's like head down, you'll figure it out. You still have to make sure that you're qualifying for the larger opportunity and you're doing your diligence. 

Do you necessarily need to have a lot of industry experience? In our case, no. Which is an advantage and a disadvantage in a lot of ways. 

Chase Clymer

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So what you're talking about is in college, this was something you developed in class as part of going to school and then evolved from there into the business? 

Ryan Emmons

Yeah. So I was an entrepreneurship major. I made my plea to be able to get into some classes my freshman, sophomore year that normally you couldn't get into until junior or senior year. And yeah, we just basically started working on the platform, core values, purpose, brand ideals in conjunction with a lot of things that I already have been working on for a really long time personally. And then my co-founders and I graduated uh early to launch it full-time. We've been doing it ever since. 

Chase Clymer

That's amazing. And you mentioned you were looking at market trends and identifying the gaps in the market and the needs in the market. So you're essentially trying to validate the idea. And with that validation, it gives you something towards finding product market fit. Could you talk a bit about how you did that for folks out there that have an idea and they don't know if it's necessarily a good idea or if the market's a good thing to go after? 

Ryan Emmons

Yeah. So for us, I will say one of the advantages of being at school that a lot of people don't take advantage of is that you have access to hundreds of thousands of dollars worth of data and research reports that you can't necessarily find in the public sphere.

And so I really was a huge data nerd and was digging into things both relevant and not necessarily relevant to beverages. But I kind of was seeing how a lot of these things were kind of overlapping. Again, demographic trends and preferences. There was an emergent model in 2008 to 2012 that was called ALOHAS model. So lifestyle of health and sustainability.

Then you look at trends towards people being willing to pay a premium towards products with social and health benefits. There was a trend. We saw smart water. Started it obviously, which really kicked off, which was the first branded really functional ah water in the US. So that functional health category started to take off. Then again, lifestyles of health and sustainability. The sustainability movement. 

And there was really a lot of greenwashing and no one was really actually addressing the underlying issues that people were complaining about. And most of the premium water set was just origination, exotic origination stories and not addressing any of these overlapping trends. So that was the opportunity. 

Chase Clymer

Absolutely. So you guys found this opportunity. You believe it's going to be validated once you have something you can actually try to sell to folks. How long did it take for you to get the first bottle of water in your hand that you could actually sell? 

Ryan Emmons

Yeah. So we had a tiny little shoebox shed in Hilo. We didn't really have a lot of resources. And so we also launched at a tiny facility. They didn't actually let us produce because we had such little volume. So we were hand labeling. By the time the water got to LA, we were hand labeling and case stacking and palletizing ourselves off of a semi-manual line. And we would self-distribute in both places with U-Hauls. 

And so we had our first product sale at the end of May in 2012. I think within 6 months, we felt like we had something. Because when you're dealing with smaller distributors, you don't have access. You can't pay money for syndicated data, which is what the bigger brands do. You're able to look at, “Okay how am I performing across all these retailers in these channels based on syndicated data.” 

Which is like registered data that Nielsen and IRI and these different companies pay for and then sell to retail brands like us. And so you're talking to your distributors, you're talking to those small mom and pop shops and you're asking them, “Hey, how's it selling? How is it selling versus these brands, etc.” 

And for us, we saw very quickly that we were outselling a lot of the major brands, like Fiji, Evian, etc. And we were doing surveys of customers, we're doing a lot of demos, like Whole Foods and again even like liquor stores. So six months in, we were like, okay, we feel like we got something here. So let's let it ride. 

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And you mentioned that you made that first sale back in 2012. How did you get that customer? What was your guys' go-to-market strategy? 

Ryan Emmons

Our first customer was literally a very well-known liquor store on the USC campus. And our second customer was actually also a slightly nicer liquor store in Hilo. So both of them were the same. Were like, “Hey, can we sell this on consignment? Can we just give you a couple cases? And if they all come back next week, and if they haven't sold, I'll buy them all back. No questions asked.” And they all sold. And then we started to develop that rapport. 

We were setting up displays. We were really merchandising and serving that customer, I think, better than most brands. And that's what it was all about. It was just that most people are not willing to put in a big risk if you're a buyer at a retailer or a restaurant owner, etc. So consignment was the way that we did it because we knew that if given the chance, the product would sell. 

Chase Clymer

Absolutely. And how long was it just you and the other co-founders prospecting potential retailers and just going in and doing the consignment thing? 

Ryan Emmons

Probably the first 6 months ah where we were self-distributing. And then we basically obviously got away from the consignment model. Another 6 months where we were still self-distributing in U-Hauls. So probably 12 to 15 months, we were doing everything. Which was intense. And we had a lot of friends that were our unpaid interns that were just helping out, which was awesome.

And then we got our first small distributor. It was just like a guy that had like 2 trucks. And he had like 150 accounts that he serviced. And we were like, hell yeah. We just need anyone to take off so we don't have to keep on leasing these U-Hauls. And oh it's like one more piece of the business that if we could have someone that was a professional that could run it, it allowed us to focus more on everything else.

And that really then it becomes the game of scaling and helping that distributor and that distributor grows. And then, you're attending regional trade shows for natural and specialty like Expo West and Fancy Food Show. And you're basically trying to start, you start trying to grow your distribution footprint in channels that you're, trying to kind of penetrate that you think you're going to do well in.

And so it became, after that, basically trying to establish case studies in multiple channels and focusing primarily in the Southwest. And yeah, but it was the same model. It was to build up the distribution. Show that the product can be sold with that distributor, be a good partner. Expand and try to add on another distributor, and so on and so forth. 

Chase Clymer

Hey everybody, just a quick reminder, please like this video and subscribe. If you haven't, we're releasing interviews like this every week. So don't miss out. Now back to the interview.

Focus on one channel, and then just keep doubling down on it and focusing on it to optimize and just work the kinks out of the process. I find, obviously, the name of the show is Honest Ecommerce. A lot of brands that are on here that we talked to, they launched direct-to-consumer first. 

But they'll be the first to tell you that they went, I'm going to say wide. They went wider too fast where they didn't have enough bandwidth internally on their leadership team. They've got their own “.com” and then they're doing Amazon and then they're trying to do wholesale. And they're really not giving any of them their full attention. And they'd be the first to admit that that's maybe where they had a lull and it squandered some opportunities. 

But really, focusing on one thing like you guys did, which was this distribution, wholesale distribution, a more traditional retail play. You guys took that, I'm gonna guess, as far as you could. Before you started really looking at these other avenues? 

Ryan Emmons

Yeah. So an example is like in beverages, and a lot of food and beverages. I think, and some people can challenge this. But at least at the time, I was told that if you're going to become a big brand, you have to incubate and be successful in natural channel. And what they don't tell you is that the natural channel is the most expensive and the most competitive channel to operate, especially in our category. 

And so, we really focused on that for the first three or four years. And we realized, we were like, “Guys, what are we doing here? Have we actually looked at some of the other channels? Have we looked at how the margin might be different? How the distributors might be better? How the retailers might be better in terms of working with us in terms of margin and promotion?”

Because I will say that the natural channel can be especially challenging. Going into Whole Foods, you're dealing with UNFI and Kehi, which are very difficult distributors at times to work with. So we started to explore other channels as basically an existential imperative. And for us, we still have obviously a lot of luxury accounts and specialty and natural accounts are our fastest growing segment of our business.

But what really saved the business was we focused on a couple of high-end convenience store chains that had basically a limited set. Where we knew that if we were given the same shelf space, the same relative amount of facings as other brands, we knew that we could outperform. And ultimately, we were able to go direct with those retailers. They took a chance on us and we ended up way outperforming their wildest expectations.

And that saved the company. And so I would say don't be so at a certain point. If your kind of really focused strategy is not yielding the results and suddenly you're like, “How, this business model doesn't work.” If we hadn't started to try and figure out case studies and tests and looked outside and really looked at more of like, what is the only channel landscape? You know, we would have gone out of business like a lot of our competitors. 

So yeah, everyone is going to come to that point. Depending on whether their primary channel is economically feasible and has opportunity. 

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That gives me a great segue to direct-to-consumer channels. So your own .com or Amazon, etc. Water is heavy. 

Ryan Emmons

Yeah. 

Chase Clymer

Let's be real. 

Ryan Emmons

Sucks. 

Chase Clymer

How did you guys approach selling and shipping water to individual houses? 

Ryan Emmons

Yeah. So we were one of the first to do Ecom. So it still represents a pretty big part of our business. It's about 15 % of our business, which is for beverages, on the higher side, based on our size. But obviously, it's not like our primary channel. And I think that strategy has shifted over the years. I think for a lot of our primary partners, the rates based on weight have shifted dramatically. 

It becomes having that fulfillment in a warehouse network built into our existing, like all of our warehouse networks for retail are also fulfillment centers for Ecomm. So we're not having to do cross shipments to an Ecommerce fulfillment center, which is then costing more money. So we have to be just like really on top of our supply chain. 

But there are some challenges with giving over your business to Amazon. But I think for us, as the supply chain costs with FedEx and UPS, etc. started to increase. Because we were originally focusing on Shopify because we had a lot of that brand control. And now it's been shifted to where about 50% of the business is on Amazon just because vendor central is a better margin opportunity for us in the future. 

And so that's how we've looked at it. Because a seller fulfilled is tougher because of the weight versus them being able to pick up by the pallet or by the container load at our warehouses. They have much better fulfillment networks, much different cost structure. So that's the split for us is Shopify and then establishing a really good relationship with Amazon through vendor central that still allows for some margin. 

Chase Clymer

Absolutely. And I really appreciate your honesty there with how things break down. And it just goes to show, with all the interviews I do on here. It's like there's not one specific way to build a successful business, especially just with the variations of size and weight and shipping. How that plays into the direct consumer model is wildly different. But to that, is there anything I didn't ask you about today that you think would resonate with our audience? 

Ryan Emmons

As you said, a lot of your audience is going to be guys that are focusing on Ecommerce. And I would just say, definitely depending on the product line, if I were to go back in time, I don't think I would change anything because I'm happy with where things are. I have a beautiful family, two little girls. My business and the people that I work with are amazing. 

But I think beverage is heavy. If you can have an opportunity to really exist with great margin, and you don't have to necessarily deal with [retail]. Dealing with retail and dealing with distributors is a whole other ballgame. So having an Ecommerce specific product that's lightweight, that has some really good margin, and really having that full control of the customer experience. 

Having the ability to really establish, really sell loyalty depending on if you're building a brand the right way. It is pretty amazing. I definitely would continue to go all in on the thesis of if you have an opportunity to take more players out of the game, you're taking more risk out of the game. And the more control you have, the better. 

Suddenly, if you're hitting a ceiling and you know that you'd like to kind of expand in other categories, you're just going to have to be ready that an omnichannel strategy is going to come with a very different landscape. That is going to also come with more risk. So I'm a beverage. If I had other products that I could have, I probably would have gone all in a little bit more and a little bit earlier on Ecomm. And we have apparel and stuff that's done really, really well. 

But yeah, I would just say, if you're looking at Ecomm, then make sure you're designing a product that's going to do really well in Ecomm and go all in there. And for food and beverage, you have to be just really, really careful. There are just so many. Every channel is different. So make sure you're doing your research. 

Chase Clymer

Yeah. And I think that's, I love doing this podcast. But I think the one thing that I have learned out of all these interviews that I wish I didn't learn, it takes us right back to the beginning of this conversation. I know too much about what the bad things for every business model is from the founder's mouth. So now when me and my business partner are, because we're actively looking to buy a brand. 

I don't know if I've ever said it on the podcast. But reach out if you've got something you might be interested in. But I look at too many things. I just go, “This is why this is a bad idea.” And I can point at an episode of why it's a bad idea. I heard it out of this guy's mouth who owns roughly the same business. 

So the more you know, the less risk you want to take, I guess, going right back to the beginning of it. But Ryan, quickly, if I'm listening to this and I'm like, wow, the story behind this beverage is fantastic. I want to check it out. Where are some of the retailers that I could go and maybe try to find it? Obviously, you can find it on the website and on Amazon. But where should I go? What should I do? 

Ryan Emmons

Yeah, Amazon is obviously going to be the easiest. But we're in most Whole Foods, Walmarts, Sam's Clubs, Wawa's, 7-Elevens, Kroger's. We're in a lot of different places. have a store locator on our website. So definitely check it out. So, yeah, I would just ask that if you check out the brand and you see what we're about and obviously you try it, I think hopefully you'll be hooked and you'll feel good about what you're contributing towards. 

Because we do a lot of great work through our nonprofit partners and through our Kukula team. So yeah, just check us out and thanks for the support.

Chase Clymer

Awesome, Ryan. Thank you so much for coming on the podcast today. 

Ryan Emmons

Bye, Chase, thank you.