Nombase Podcast: Don't Blend In. Make Your Difference Easy to Understand.

Melissa Traverse [00:05] Hello and thank you for joining. I am Melissa Traverse, director of community here at Bevnet CPG Media, and I am excited to welcome you to the Nombase podcast, a podcast built to help CPG owners and operators navigate growth challenges and grow more profitable businesses. Be sure to check out NonBase.com, Bevnet's platform for the CPG community, where you can find tactical content like this and so much more. Sahra Nguyen started Nguyen Coffee Supply in Brooklyn in 2018 with a mission to bring Vietnamese coffee and the robusta bean to the American market. She spent years building a community online before taking her ready to drink line into national retail. She's still scaling, still figuring out parts of it in real time, and has picked up a lot of hard-won knowledge along the way. Fane He started Lucky Ox modern Asian craft soda brand with bold authentic flavors last year as a co-founder. Lucky Ox has been delivering cases by subway, driving to Whole Foods Market grand openings just to get in front of buyers, demoing like crazy, and figuring out their product, their category, their place in the market all at the same time. They got into Whole Foods across the Northeast in under a year, and now they're trying to figure out how to move product in stores they can't get to. They're trying to figure out how fast to scale and what it actually takes to build a brand that translates beyond New York. Sahra has been a mentor to them since before they launched, and today they're gonna dig into all of this together. So, you know, if you're out there building a brand right now, you're probably gonna hear yourself in this conversation. Sarah and Fane, so great to have you here at the Nombase Podcast. Thank you for joining us today. Sahra, you've been building Nguyen Coffee Supply since 2018. Please tell us a little bit about yourself, where the brand started, where it is now, and what the mission behind it has always been.

Sahra Nguyen [02:08] So I was born and raised in Boston, Massachusetts, so shout out to BevNET HQ. And both of my parents are from Vietnam, and they are actually refugees, and they escaped to Vietnam shortly after the war ended. And so growing up I had a lot of exposure to Vietnamese food, coffee, and culture because they would bring me back to Vietnam throughout my entire childhood and life to visit my family abroad. And so I've always known that Vietnamese coffee was really, really unique and different and special from the coffee that I would see in Boston in the United States, right? And so around 2016 when I was visiting a lot of different specialty coffee shops, I noticed that Vietnamese iced coffee was becoming really trendy. However, I couldn't find a single origin fresh roasted Vietnamese coffee bean anywhere in the specialty coffee scene. And so that sent me on a whole journey to go back to Vietnam in 2016 and conduct my very first sourcing trips. And from that trip, we established our first direct trade relationship, whom we still work with today. His name is An Tian. And then in 2018 was when we first started to import. Our own green beans and roast them fresh in Brooklyn, New York. When we first started, we were entirely direct to consumer. We really built the brand online and through social media for the first couple of years. And then a couple of years in, we launched nationwide with Whole Foods Market, and now we have an entire, you know, retail channel for our business. And today, you know, we're still building with our coffee beans, we also have a ready to drink coffee line, and then we just recently launched our ground espresso canister.

Melissa Traverse [03:37] And you really changed the way that Americans think about the robusta bean.

Sahra Nguyen [03:42] Yeah, oh my gosh, that's right, because the thing that makes Vietnamese coffee really unique and different is the coffee species itself. So Vietnam is not only the 2nd largest coffee producer in the world, they're also the number one producer of robusta beans. And prior to all of this, you know, especially coffee culture in the United States was really centered around the Arabica bean. And so robusta and Arabica are basically like cousins in the coffee world, and so they're very different in body and flavor profile, and also in caffeine levels. Energy.

Melissa Traverse [04:12] Fane, we are so thrilled to have you here with the Lucky Ox. Please tell us a little bit about yourself and about the Lucky Ox, what you're making, who it's for, and where you are in the journey right now.

Fane He [04:23] Kyle and I started the Lucky Ox last year in 2025. You know, I grew up in my mom's Chinese restaurant. I was a kid doing homework in the back of the restaurant and helping out in the kitchen where I could, and that's really where I developed my love for cooking and just being super adventurous with different types of cuisines and stuff to experiment with. You know, my mom was always cooking up new things, bringing stuff from different restaurants for me to try, and, uh, you know, I always wanted to open up my own restaurant and uh met Kyle um at her first job out of college in consulting, and, uh, you know, we were pretty set on like trying to open up a restaurant. We would always cook together and that's how you know that we would work well together is because we just meshed so well in the kitchen together. And, uh, you know, eventually we just saw like just the day to day grind of doing the same thing, operating a restaurant and uh But we still wanted to do something to push the Asian flavors we grew up with forward, and you know, we didn't have any focus groups or anything, but we just launched a Vietnamese salted lemonade, like just a very hole in the wall recipe that you can really only find in a grandma's kitchen. And because we're in beverage, it's definitely a harder category to like build a D2C presence in. So me living in New York, I was just going door to door to every bodega, restaurant, cafe around town, and you know, shortly after Kyle and I built up to like our 1st 100 accounts, we didn't really know what we were doing. We had glass bottles and glass bottles would break in transit, so we'd have to deliver things on the subway. Then we finally You know, got some distributors and then we recently launched into Whole Foods Market and then yeah, we're in over 1000 doors along the east and west coast and like slowly building our way in Middle America as well. But you know, now we have 5 skews with really authentic flavors like Pandan coconut for us to push Pandan in a beverage form to the market, and then our two new skews we put Taiwanese pineapple cake and mango sticky rice into craft sodas.

Melissa Traverse [06:13] You know, something I think that both of you have in common is that you have beverages that are authentic to the culture that they come from. They're also delicious, you know, they're very appealing to people who may not know anything about where they come from or the origins of the ingredients. Kyle, you know, you and I have actually been talking about doing a show for a while, and, you know, I think one of the questions you've been asking. For a while is how fast to grow, you know, you've built a really strong business in New York City, and now you're seeing opportunities to grow a little bit wider, maybe a little bit faster, but you know, you've been trying to figure out what the right pace is. I, I'm going to hand the mic over to you. I know that this is a question that you've probably already talked to Sarah a little bit about, but I would love to, you know, hear your questions and what Sarah has to say about them.

Fane He [07:10] Definitely as a niche Asian beverage brand. Some people know about our flavors, and most people in the country don't. So I guess, Sarah, you know, I'm curious, as you've built your brand, how did you know, how were you able to build enough of a presence around the country to know, all right, here's, when can I expand beyond New York City, beyond coastal areas with higher Asian populations, and do you really think that the direct to consumer presence that you built through your bean business really helped to sort of inform that there was a demand?

Sahra Nguyen [07:41] Mhm. Well, I, I like to think that at the time, I knew, using the data from our GDC business, but then now being a couple of years into retail, it's kind of like, you don't really know until you do it, you know. So, you know, we launched, you know, the GDC business, which is primarily coffee beans in 2018, and then we went nationwide retail in 2023. So we really spent a solid 4 years building the brand awareness and equity through DDC and through social media. And So we had like, so when we would enter retail conversations, we'd have all these heat maps around like, here are our top regions and states based on our DDC audience, and when we launch, we're going to geotag all of like the ads and the retail ads, the coupons, etc. And so I do feel like we had a very informed approach to the best that we could when we're entering retail. And I think to some extent, a lot of that does help and it is true. However, What I've learned is not only from the channel of DDC to retail, but also the product lines of beans to RTDs. There's still just so much that you don't know until you go through it, right? And so I'd say, particularly with the products of like the beans, which informed you to see, which informed our retail strategy, which is really about the RTDs, it wasn't, it was like slightly transferrable because it was like, well, these are the folks who like Vietnamese coffee, who are culturally curious, but they're also very different consumers, right? The, the person buying the whole beans and grinding at home is very different from the person grabbing the razor and coffee, right? So though I, while I think that it's important to use that information to inform where you go, at the end of the day, there's still so much work and education that we still need to do, um, once we do get to the shelf, right? And so that's how we approach retail expansion, um, but at the end of the day, I really didn't think you just have to go through it.

Fane He [09:30] What were some of those, those tough lessons that you learned, you know, maybe more so specifically in markets where no one knows what Vietnamese coffee is. How are you going to convince people to buy your products off the shelf?

Sahra Nguyen [09:42] When we launched, we, we did launch nationwide, like all 50 states, right, with the RTDs, which is kind of, it kind of goes against like conventional wisdom of like, go deep before you go wide, right? Which I really still support in a lot of ways. But for us, just given our situation, we just had a really unique opportunity to go really wide. And there's so many things on the back end that we were considering. For why we would go wide, something as simple as getting enough scale so we can increase the MOQ, so we can increase our efficiencies, right? Like that was a factor in going wide and then also, you know, going wide so that we can also grow at a certain rate so that we can also fund that growth maybe more quickly, maybe by attracting investors, right? However, I think aside from like the, I guess adjacent benefits of going wide really quickly, In order to win when you're going that wide, I, I don't really know if it's like, unless you have, unless you're extremely capitalized, it's really going to be hard to win in all those markets when you do launch going wide, right? So for us, Our top markets based on our D2C channel, generally were the same as our top markets when it came to our retail and our TV business, right? And in the beginning, like we would try everything. We had a very multi-channel, um, marketing approach where we had the TPRs, we had the secondaries, we had the digital meta ads that were geotagged to our store list within like 1 to 2 mile radius. We ran like digital coupon ads. We ran ads for digital coupons to drive people in store. We had out of home, right? And I think after doing all of those different experimentations, I would say, if you have a lot of money, run them all, and I'm sure you could find some attribution model that creates like An argument for all these different halo effects helping each other, but I'd say if you are maybe a little bit more limited in your resources, I always believe in invest as close to the point of sale as you can. Like, if you had to put your dollars somewhere, put it as close to the point of sale as you can, and so that can be as simple as a yellow tag, a TPR, right? And yes, I think, let's say, you know, whether it's in a popular region or maybe in a region. Where there's less awareness or presence or brand presence, sure, a TPR won't really drive like the, the education that we may want that like a demo could, which is very expensive. But I, I'd say like in a lot of places, like the TPR like psychologically is very effective. It will get someone to kind of like stop at the shelf and maybe take a peek in a way that maybe like improved packaging won't, can't always do alone. Yeah, so those are some, some, some of the learnings we had immediately. Mm. What about you, Fane? I mean, I'd love to, so you went from like, I mean, you guys, like, first of all, when in the injection, I can't believe you launched last year cause you guys have done so much in such a short amount of time. So congrats again. It feels like you've been going at this for like at least 2 years. So you, you started like with New York really regional, then you went, you know, to both coasts now. Like, what have you found to be effective or challenging?

Fane He [12:36] I think the first thing that I would just, you know, like to acknowledge is it's the reason why we were able to sail so quickly. is because brands like you, Sanzo, Fly by Jing have paved the way and proven the demand for Asian products that can be, you know, sold to a mainstream market at a premium price point. And, uh, you know, I think that has really helped. And I think also with, you know, K-pop culture and everything, like Asian products and culture are just really hot in the media right now, and I think those were all tailwinds that really helped us to grow so quickly. Um, but going back to your question, Sarah, I think uh Yeah, starting off in the, you know, we're scrappy founders we had no experience in CPG so we just kind of thought, all right, we have to show up to every single thing. We didn't have any sales people or distributors at the time, so it was just door to door sales on during the weekdays, collecting invoices, checking back in with the accounts, you know, a couple weeks later, and then doing the demos for those accounts. Every single week and you know we just found that that is not scalable long term, you know, we're in over 1000 doors now and we can't show up to every single door. We're going to be continuing to expand to states that we're never going to be in, um, but yeah, I think, you know, to your point, TPR has been really effective. We've seen our Whole Foods velocity increase by about 40%. through TPR, you know, some of those stores in Connecticut and Jersey that we, you know, won't probably won't step foot in because it's tough to access without a car. I think it's that and then now we're really trying to dive deeper into ads, um, geo-targeting, you know, how do we build a brand digitally as well to just build that awareness and get people to come, go to the store to try the products.

Melissa Traverse [14:15] Sarah, I would love to hear you talk a little bit more about geo-targeting. Does it work and how have you found it to work?

Sahra Nguyen [14:23] The topic of like geotypes are running like say meta, Google ads that are geotagged to a particular region where you have stores, and then you can send them to a landing page where there's a digital coupon, so they can then use that digital coupon and redeem it in store. Usually it's like buy one, like, it's an offer where you get reimbursed, right? So that's a really long journey. Right? It's a long journey for one, someone to click through to get on your landing page, and it's a journey for them to actually remember the coupon and then go into the store, or be in the store in the room and to activate the coupon, and then a journey for them to upload the receipt, right? So does it work? Yeah, I'd say that if you, I'd say that you could throw enough money at anything and make it work, right? Like meaning you can get people to show up in the store, and you can get them to trial your product and um maybe even post about it. But like, does it work profitably or uh sustainably? It's just a strategy of like, if you're running a campaign to be break even or profitable, say, on the first purchase, I do think there's a limitation for a lot of earlier brands where our Economics are not as strong, but if you are running a strategy where it's like, well, we're willing to lose X amount of cents or dollars on the first purchase and just assume that we'll get paid back in 6 months or 9 months because of like the recurring rate, there should be ways to cut the strategy, and I'd say there's no right or wrong. The strategy is very much tethered to how capitalized you are.

Fane He [15:47] For us as a smaller brand, you know, that isn't isn't heavily capitalized where we can't, you know, be running those expensive. coupon programs and like super expensive ads, you know, I'm curious for these people that aren't aware of, you know, your products or just any Asian products in, in, you know, some of those harder to reach states, what's sort of the messaging, I guess, you know, if you're just going to do a general ad, you know, just to build awareness and education, what is, what is the messaging that you think have really stuck to trying to convert people to, uh, to try the product out?

Sahra Nguyen [16:21] Mhm. Yeah, that's such a great question. So one of the things that we were asking ourselves in the beginning was more like, was like, what really speaks to people? Is it the robusta bean narrative, the differentiation, the, the, the core ingredient, which is so much of our mission to elevate that coffee species, right? Or is it Vietnamese coffee, right? And so the way we explore this was A lot of like, one, just exploring Google Search console and seeing what people, what are people searching, and also like running ads or tests with the copier Robusta versus Venus Coffee and seeing what the click through rate is, right? So seeing what engages clicks on, on an ad. And We found out like this like different parts of the funnel and like, or like different consumers, right? There are consumers who really care a lot about mission and sustainability, and they care about the women owned aspect. They care about the mission like this, this like mission of like, wow, we're the underdogs, and we're like changing this whole, you know, industry through champion Robusta. And there are the consumers who maybe like, don't make a purchase. Decision strictly on that and maybe the camera a function like how is this coffee can or bean going to enhance my coffee experience. So then for those consumers we can lean more into functionality like robusta beans have double the caffeine content of Arabica. It's a great source of natural energy. It also has 60% less natural fats and sugar, so the flavor flavor profile is very bold and low. Acidic, right? So we just, you know, I think a lot of these earnings did come from running meta ads for our DDC channel, right? It's not transferrable to how retailers shop, but it does give us a little bit insight into like how our coffee consumers shop, right, um, when it comes to cans and beans. And another great thing, thing that we did, which I love to share is one time we exported all of our customers. Reviews on our website and we basically did a keyword analysis to see what keywords are people using to describe our product the most, like what's resonating with them, and because what I think is important may not be what's important to the consumer and how they're, what's driving the purchasing decision. So then we would just kind of use a lot of that back in our own marketing and our ads, right?

Melissa Traverse [18:26] Yeah. I'm so curious, what words did you find resonated.

Sahra Nguyen [18:30] Number one, smooth. Came up with, like, a very popular, smooth, bold, strong. Mhm, yeah,

Fane He [18:40] definitely seen that in your guys' packaging. Yeah,

Sahra Nguyen [18:43] it was flavor for sure, yeah, actually I would have had a rank in between because we toggle between flavor and energy a lot cause it's very different from Arabica. Flavor ranked a little bit higher than energy. So

Melissa Traverse [18:54] I know we were talking about this a little bit when we were preparing for the call, but I know you're already thinking a little bit about the center of the country, middle America. And how to penetrate that. I'm, I'm curious, Sarah, you launched nationally. What are your thoughts on how to enter the middle of the country? Are there certain regions that you found were more receptive to the product and the value proposition? How would you go about that as someone who's already launched in all states?

Sahra Nguyen [19:24] So we're Across the country with Whole Foods, we also have like a Midwest broker that's really specialized on those retailer relationships. And so for us it was interesting cause we never like intentionally We never were like, OK, now we're ready for the Midwest. It happened with Whole Foods, and then at that point it became a strategy of like, well, we have these DCs open now. We need to optimize these DCs that are located in the Midwest servicing the Whole Foods business. And so from there we layered on a Midwest broker to basically selling to accounts that are pulling out of those DCs, right? So It, it was, it was actually, I guess less of like a brand mission strategy, more of like a, I guess ops optimizing our DC strategy, which also helps for sustainability and efficiency as well. And then so that's how we landed, kind of landed in the Midwest. And now when, then when it comes to like how much do we invest in this market. So at this point in time, You know, we're still the strongest on the coast naturally. And so when it comes to the Midwest, like, you know, we don't have a field team out there, we don't have, um, ambassadors out there, so a lot of our attention really has really been driven through TPRs, right? So candidly, at this point we haven't really heavily invested in the Midwest. It's more of like, what can we do to Keep, like, the average within those regions healthy, right? So, maybe that means not investing in every store that's pulling out of that DC but figuring out, like, what is like the benchmark for units that need to be moved out of that DC which is different from the velocity benchmarks from your retailer, like a Whole Foods. And then figuring out, like, you know, as long as that DC is generally healthy, right, which will maintain, would maintain that account, that DC be open, figuring out like what are the top maybe 5, 1015 accounts that would just bring your average up for that region to kind of keep that DC open, if that makes sense. Yeah. So I guess it's like, yeah, not focusing on every store because we don't have the capacity or resources to focus on every store, but focusing on the right ones to keep the retailer like supportive and also the DC happy as well.

Melissa Traverse [21:31] And are there any regions that are more receptive to, you know, more interesting products than others, like, is the Chicago area, you know, a better mover than, you know, maybe other places?

Sahra Nguyen [21:45] Yeah, we definitely see Chicago being kind of like a very popular destination to be really responsive. There's also actually surprising a lot of Vietnamese coffee shops in the Chicago area as well, so there's actually a lot of awareness around the category there.

Fane He [22:00] Yeah, and I think that's just for any more flavor-driven Asian brand, you know, when it's a big urban area with a lot of higher-end modern restaurants and bars and cafes, I think Honestly, we all kind of, it's kind of a flywheel effect where, you know, they, people try those flavors, they're lining up for restaurants like Soother, right? Michelin nominated or starred Asian restaurants. They try those flavors in the restaurant and then they find us on the grocery store shelf or other way around. And, you know, I think we really work in tandem and that's why we really value our on-premise partners as well. I'm curious, you know, Sahra, as You scaled the RTD business and also just the bean business in retail, you know, um, do you think that there, given that there just aren't that many Vietnamese coffees on shelf currently, there once was, you know, a big competitor at the time, like, do you think that having some additional, uh, competition on, on like a shelf like at Whole Foods helps to just drive overall awareness for that category versus stores, you know, where you are the only Vietnamese coffee offering?

Sahra Nguyen [23:09] I definitely believe in like, the vision of a rising tide lifts, lifts all boats, right? Especially when it comes to a more nascent category like Vietnamese coffee within a larger category like coffee. Um, I like to draw a parallel often between matcha and boba, subcategories within a larger category, right? So, given this is a very unique point in time in our journey and in like The, the country's cultural expansion of coffee and global flavors, the more brands there are, um, the more Vietmese coffee brands there are, like educating and marketing and Tama Viennamese coffee, and increasing impression on the internet, and, you know, raising awareness, it's just gonna help all of us, honestly, right? And so, and honestly, I think like, When we get to the point where a retail buyer is willing to have two different Vietnamese coffee brands, RTDs on shelves, like, I think that's a huge win, right? Because right now, oftentimes, given where we're at in the category and it's still growing, a lot of the conversations have been more, a little bit more of like, well, I can only have one Viennese coffee brand because I already have one, right? Uh, and I'm sure at one point matcha was very similar to that, and now we have so many matcha brands and matcha skews on the shelf, right? So I would actually I think I would like for this to be more Venus coffee brands on the shelf, because that just shows that the category is, is, is growing, and the demand is growing, and like the reception across the board from buyers to consumers is also growing, right? Now, that's just like my belief in the category and my desire for the entire community of Vietnamese coffee growers, to producers, to Gravillas to do well, right? Cause we need to grow the pie together. Um, and then at the end of the day, it comes down to winning on the shelf, right? Like, Um, everyone at the end of the day needs to win on a shelf. So to get on shelf is great. More brands on the shelf is great. And if another brand, if, if I'm in shelf with another brand, and they beat me out, then like, you know, good for them because they did something right, right? And if our brand wants to stay in shelf, then we need to continue being great, delivering value, listening to our customers, you know, innovating, pushing things forward. Um, I don't believe in staying on shelf because you're the only one. I really believe in staying on shelf because you are the best brand.

Melissa Traverse [25:18] You know, I think the topic of category is a really important one, Sarah. I think you actually launched Nguyen Coffee as a cold brew, right? And you got told we already have 5 cold brews, and then you pivoted to being a Vietnamese coffee. Can you talk about that a little bit and talk about how you figure out Where where your home is,

Sahra Nguyen [25:41] we always were Vietnamese coffee, but when we first launched like our very first RTD, which was, you know, a black, this was like the very first can actually, we really leaned into cold brew messaging. Like we put cold brew on like the SOI and we use cold brew coffee, which is in the ingredient statement, and it says Venus coffee up top still. And our thinking at the time was like, well, let's meet people where they're at. Cold brew is extremely popular. Consumers know what a cold brew is, so maybe that could be like our, our, our access point. And then our differentiation is Vietnamese coffee, right? And we even won a Bevnet bestested product for our 100% robusta cold brew in 2022 because at the time, no one was doing a robusta cold brew, right? Um. Um, and, and then, but like, so that was like the, the line of thinking behind it. And, um, however, as we were in the retailer conversations, a lot of the retail buyers are like, we already have a ton of cold brews, we don't need another cold brew. And I was like, oh my gosh, like this is not working. So then like we pretty much now this is like our new, our new can, our new packaging. We pretty much stripped cold brew from the front of pack. I mean, it's not even in the SLI anymore. It's still in the ingredient statement because we still use cold brewed coffee, but now it's like the Vietnamese coffee is like so much bigger, right? from like this little tiny color here. The SOI has Vietnamese coffee in it to the cold brew, and so the learning there was really like Though I was trying to really meet consumers where they're at, again, like sometimes you just don't know until you go through it, right? All the data in the world can point you in a direction, but at the end of the day, you won't really know until you go through it. And then our biggest learning was just to continue leaning into our differentiation, um, and leaning into, um, you know, how we can bring value but also expand the category, expand the set, particularly for buyers. Um, and so that's been a huge learning.

Melissa Traverse [27:29] Us, how is the Lucky ox navigating category confusion? How are you calling yourselves and what does the evolution look like?

Fane He [27:37] When we first launched, we just, because we kind of took a very restaurant approach to things, we called ourselves a sparkler, and that's a very abstract term, I think, to a consumer looking at the shelf, right, where you see tonic and Soda, seltzer, um, whatever, non-alcohol around. So sparkler is just such an abstract term that we thought was really cool at the time, you know, we're coming from Nike, we just like these like cool trendy buzzwords. Then, you know, because we were just doing Something so unique we just like didn't really know. We didn't really want to call ourselves quite a soda because, you know, Ollipop and Poppy were like really carving themselves into that category. So we're like, OK, maybe we're sparkling juice. We have like a Vietnamese lemonade has like 20% juice content in it. So called ourselves sparkling juice for the longest time and then we found that people, the non-out crowd really loved us, the mocktail crowd, and even the cocktail, you know, mixer crowd, bars were using us as a mixer for, you know, for their drinks, and we kind of just were like in this sort of catch-all bucket. And then it was really during our launch with Rainforest when we did a ride along in the mid-Atlantic region that we just thought craft soda was just such a big category, and that's when we kind of just, you know, figured out our home. We're like, all right, you know what, we're not a functional soda. We still are a soda at the end of the day. We have a lot of versatile drinking moments between a meal pairing, a treat, and then also as a mixer. So, you know, sodas out there like Jones and Gus's and Reed's, right, those are all drinks that have really versatile. Drinking moments we're like, all right, let's just, let's hone in on this. Let's just define this craft soda category. We're doing new exciting flavors and bringing that to that specific category that, you know, really is just more high sugar legacy brands with like the same, you know, flavors kind of generally all around.

Melissa Traverse [29:25] I actually have a question for both of you. How do you deal with the difference between the way that consumers search for a beverage and the way that retailers are merchandizing them?

Fane He [29:38] For us, you know, what's actually really interesting is Whole Foods is actually expanding us within their cocktail mixer set, and you know, when we first heard that we were super excited. We were like, OK, great, we can, we have the opportunity to go really wide with Whole Foods, but at the same time we're like, Well, we're, we're still a soda, you know, we're a single serve soda. We're not the same as a fever treat. But you know, luckily I think for that specific category within Whole Foods, it is actually kind of a bucket of, um, you know, there's some functional drinks in there. There's some non-alps. It's not just your fever trees and your Qtonics as far as the merchandizing is concerned, you know, we're going to be there on the dry shelf bringing some new excitement into that specific set as a single bottle, it's easier to driver than buying a 4. Pack of whatever ginger beers, but at the same time we do thrive in the cooler ultimately, you know, a lot of stores have us next to their hot bars, maybe next to a sushi bar, where we're a great meal pairing because we're not, you know, an energy drink or a stevia, sweetened functional drink. We're there to complement a meal or just to act sort of, uh, you know, as a sweet treat in the middle of the day.

Sahra Nguyen [30:44] Mhm. I mean, when it's cold it's sold, right? That's the thing, um, we've definitely run into this pain point where, um, you know, for sure, anytime in the cold box we perform better because it's a ready to drink product. Um, and that consumer behavior of like, let me walk to like the back of the store and into the dry shelf and buy this one single can that's ready to drink, but it's warm, so I have to bring it home and put it in the fridge, and then I'll drink it, like, that's just not really how our consumers that we found quite purchased. So we've launched both in the coal box and on the dry shelf, and we've just found that being on the dry shelf for us doesn't quite work at this time in our state, in our company. Um, now, I think if there was another company with a different strategy that was more capitalized, if they want to fund that growth just through more aggressive TPRs, maybe take a loss on the unit because they're really looking for. Growth in scale, and again they can support a longer payback period. Sure, I think that could work for some brands, but for us that's not the approach that we could afford to take. And so at this point in our journey, like if it's on the dry shelf, we actually turn it down. We've just found just by trial and error that it's really not worth it for us right now to be in the dry shop because it's not sustainable for us, and we just also, we just don't feel like that's how consumers ultimately want to enjoy a right to drink coffee.

Melissa Traverse [32:07] Even if you find the perfect category for your brand, there are always merchandizing mishaps. Fain, you were talking about you found the product in backstock in one store. It wasn't even on the shelf. I think there was another one where the product was shelved next to clam juice. Can you talk a little bit about the merchandizing mishaps you've had and, you know, how you're trying to figure out your way out of that?

Fane He [32:32] Yeah, definitely, and I think that also just comes with just being such a unique cultural product whereas people sometimes just don't know where to put us, um, you know, a grocery store chain might have a completely different set and like merchandizing strategy than. Independence, which we have probably about 7 to 800 of those, and each of those independents is going to function very differently. So yeah, to your point, Melissa, you know, some stores we've been next to waters. Other stores we've been next to functional beverages like, you know, the vitamin waters, and then the other ones were next to clam juice and You know, it's, we don't know that until we're actually going into the store, but we're not able to go to every store. So I think fractional support, uh, merchandizing support has really helped to just increase that visibility into the at at the store level, um, obviously, you know, when we can. Trying to go and demo as much as we can and say hi and shake hands to people in stores, thanking them for carrying our products and stuff, and I think that really goes a long way and helps to also developing that relationship definitely helps to get some better shelf space too to get out of, you know, clam juice set. And on this little bus.

Melissa Traverse [33:45] Sahra, do you have, do you have any other tips that you could provide on how to make sure that you're merchandise correctly in those stores that you just can't, you just can't get to.

Sahra Nguyen [33:58] Yeah, I mean, so we're talking about like merchandizing strategy, and then there's also just like, before the merchandise fee, there's like the execution, like you mentioned, like, inventory in the back room. Melissa, we've definitely struggled with that as well, where some of our product just wasn't ending up on the shelves, um, and You know, when we look at our sales data, we're seeing like just inconsistencies with our velocities and so, you know, having merchandise going in to help, that's one thing. But then, you know, in the past we've actually paid like a, a, a team to do a store survey, um, to survey like 200 of our stores just to see what's happening on shelves. That's like a one-time effort. Um, and then we found that actually like over 50% of our stores were out of stock. Right? And so there's just like such a huge, and it wasn't due to um inventory issues, it's like execution, right? You know, one thing to solve kind of like a huge um out of stock, which is kind of like resetting or recalibrating um our inventory is, you know, we've asked our buyers in the, in the past, well, once you've done this survey, we have the data, we have the stores that have the gaps, we deliver that to our buyers like here are some huge issues and holes.

Melissa Traverse [35:05] And I think you mentioned that you actually paid a team to survey. It was like 500 stores or something like that, and you, when you found out that 50% of the stores, you didn't have the product on the shelf, was the plus out the answer to that? How did, how did you fix the problem where, you know, almost half the stores didn't have the product? What did you do about that?

Sahra Nguyen [35:25] Unfortunately, in that particular situation, a plus out was not um the solution. It wasn't quite possible with that particular experience. And so, the guidance in that situation was to literally have our folks go store by store and have and work at the store level to basically reset the inventory, yeah. So then the next step would have been getting people, contractors, etc. to visit each store again after doing the survey to reset the shelves, which, you know, is very expensive for emerging brands.

Melissa Traverse [35:58] So Sarah Fane was talking about some of the options that you have at your disposal to fix merchandizing issues like that. What, what solution did you use? Did you send your own people in there? Was it a fractional merchandizing team?

Sahra Nguyen [36:12] Yeah, it was a fractional merchandizing team where they can do store surveys as a service and then after the store surveys they can do like merchandizing support, working with the store leaders to place an order for inventory.

Melissa Traverse [36:24] And Fane, what do you, do you, is that typically what you do when you realize that the product isn't on the shelf? How do you solve that problem? Yeah,

Fane He [36:31] I mean if we can't actually physically visit the store, which you know we would prefer ourselves, yeah, then you know we're. Lucky to have uh third-party merchandizing teams who are, you know, out in the field every day, um, to check up on some of those problem stories that we have. There also was another chain that our, uh, merchandizing team doesn't touch. So, you know, at that point, I was like, all right, we got to call the store up and see, you know, talk to the grocery manager and then see if we're even on shelf. So, I think that's kind of the last, last resort is just, uh, give him a call.

Melissa Traverse [37:04] You have to be pretty resourceful to be the founder of a beverage brand. Fane, you know, one of the last topics that we were talking about as we were getting ready for this conversation is PR and there are so many ways to approach PR, especially with social media, um, influencers, you know, that kind of thing. How are you thinking about PR for the Lucky Ox? What are you investing in now and what are you trying to figure out? Like how are you thinking about it for the future? Like how are you trying to figure out where to go next?

Fane He [37:39] Something that's definitely always been a really tough part of beverage is scaling in D2C, um, and that's honestly the next challenge that we're really trying to take on. So, we're launching a small pilot run of cans specifically for D2C and online wholesale. Way easier to ship, um, than our glass bottles. But, you know, to really drive that D2C business, where we're going to start working with creators, um, affiliates, and then, you know, having, having like an affiliate plan. You know, just to help to drive some more awareness and product education for us, uh, really want to just test that out and then see if, you know, we can grow the numbers, um, on D2C and which will ultimately help to, uh, drive our retail velocity as well.

Melissa Traverse [38:25] Sahra, if you could provide the Lucky Ox with any advice based on what you've seen and done before, what would you say?

Sahra Nguyen [38:32] Yeah, before I answer the PR piece, I had a question for you, Fang. Um, I, I'm curious about how did you guys think about unlocking D2C? Like, did you find that that's where your consumers are shopping?

Fane He [38:44] Obviously with retail activations, right, it's definitely pretty slow, you know, um, just to get one big retailer to say yes and then finally being on shelf, right? So we just saw it as a quicker way just to like be able to grow the top line. Um, and also the brands like Gia, Little Saints, some of those non-Ak brands seem to be the strongest beverage brands on D2C. So we do appeal to that crowd a lot, you know, the people who are trying to drink less, people that want to use, try out a new mixture. So that's what we're really trying to hone in on is just targeting that specific crowd and also, you know, obviously the culturally adventurous foodie who is combing through the web and looking at whatever TikTok video. Of new trendy restaurants or mango sticky rice, for example, is a super hot trendy flavor right now at bakeries and cafes all across New York City. So hey, why not, you know, rather than telling those people, oh, go to Whole Foods and buy a mango sticky rice exclusive flavor, why not try to buy a case through TikTok shop because they're already posting on TikTok. That's kind of our rationale there.

Sahra Nguyen [39:51] Yeah, the new cans look great, by the way. Yeah, I love them. Yeah, for us as a brand, we heavily leverage PR as a marketing tool for our strategy. And so I get asked this question all the time. And so I would say PR is a really powerful tool, but it has to be, you have to be really clear as to why you're using it. Like PR alone may not move the needle on your sales, um, it's particularly not in retail because I think the, the, the, the journey is just too far. Um, and so the way about PR is like usually it's like you do. PR to get a headline, and then oftentimes you use that headline to get something else versus like PR being the end goal, it's like a tool to get to an end goal. So in a lot of ways that we use PR is for us in our category in our journey, because we use coffee um is such a young category and the robusta being is like, you know, a less popular coffee species. For us, we need a lot of education, um, around the category for us to really sell our products, right? And so the way for us to approach And that mass education was through PR. And once we had a PR piece, we could leverage that PR in our own organic channels to kind of like get more like juice out of it. And then we also, we would use PR to validate our vision and our mission in retail buyer conversations. We can use PR in our convos with investors. So that's how we've thought about PR. It's really a tool to get to another piece to a strategy, but PR alone, at least for us, like doesn't always move the needle on sales.

Melissa Traverse [41:17] And Sarah, I know that you've built your personal brand. Um, you know, very well in a way that enhances New coffee supply. How important is that?

Sahra Nguyen [41:29] Oh gosh, I wish it wasn't so important, honestly. I think there's, there's just so much pressure these days for founders to be content creators, um, because social media is such a powerful tool, and yes, while I've done that with my own personal brand and Nguyen Cough Supply, it a very like founder forward brand. It just worked out for us, but also because like our brand is very rooted in my heritage, in my family story, in my culture, it just felt like a natural progression, I guess, of, of us marketing the brand. I wouldn't say that it's necessary for everyone. I, I don't wanna believe it's, it's, uh, it's a requirement for everybody because it is very demeaning and taxing, and I want to believe there are many other ways you can market a brand without leveraging the founder. So in terms of like throwing that guidance out there, because I know how taxing it can be on the founder, I don't want to sit here and say like, you must do it. If it just doesn't resonate with you as a founder, and it's like really painful or it creates more friction in your way of being, I don't know. I want to believe there's another way to market your brand successfully as well.

Melissa Traverse [42:32] Shane, how are you and Kyle thinking about that? Is something, is that something that you're leaning into? Do you want to lean into it?

Fane He [42:38] Yeah, I think what's interesting between Kyle and I is our is our dynamic, you know, when it comes to the marketing piece. I think I'm more so just making a fool of myself on social media, you know, whatever, some eating challenge or or talking in Chinese, you know, Kyle can't speak Asian, you know, in any Asian language, so, you know, he's, he's not doing those like videos where he's making a fool of himself as much, but I think He is definitely doing, um, you know, a good job of sort of being the voice of our brand within the industry, where I meanwhile, I'm more so the voice of the brand, like to the to the consumer. So, you know, I think it's good having two founders to be able to have like different personalities to represent, um, you know, within the industry and then to consumers.

Melissa Traverse [43:25] Well, I think that shows a great example of how there is variety in the way that you approach it, so if one approach doesn't feel comfortable for you, then maybe there's another angle that you can use as the founder. OK, so the last topic that we are going to discuss today is innovation and flavor innovation. Fay, I know that the Lucky Ox now has 5 flavors and um Nan Coffee supply. Sarah, I know you've gone through multiple iterations and multiple SKUs.

Fane He [43:55] You know, something that is really interesting since we've been developing our SKUs is when we try just a little sample at a time. I don't think that really represents the full picture of how crushable is this drink, you know, can you finish the whole can, and you want to have multiple servings, you know, throughout the entire week. So, you know, Sahra, I'm actually really curious for you, how did you think about the crushability of your drink, because Vietnamese coffee is something that when you buy it at a cafe, it's very strong, it's rocket fuel, and Normally people probably aren't drinking like 5 or 6 a week. So how have you thought about, you know, increasing the drinking moment, the frequency for, for your products?

Sahra Nguyen [44:38] Chug is like a key metric in all of our tastings, as we're as we're developing new formulas, new flavors, and also reformulations, cause you're absolutely right, um, thing, where it's like, A lot of, you know, um, products, samples that we'll develop, like, they taste great. It's like, uh, you know, I'm always like talking with the team of like, it's not enough that it tastes great. It's like, is this chuggable and would you have it more than once? Because a repeat experience is so important for sales and velocities, etc. right? So when we first started, our very first skew was a 100% robusta cold brew skew. It was called Classic Black, and then we came out with condensed milk and coconut right after that. So condensed milk was a very traditional one, and then coconut is a non-dairy one with coconut milk. We've since iterated the names of the skews from classic black to espresso black. Because Classic Black, we found, you know, people are like, I already have my classic version. I don't need to change it. I know my go to classic for cold brew. And then we felt like classic Black didn't lean into the power of robusta, which is energy, right? So then after those learnings, like, well, people associate espresso with energy, so we actually reformulated. The coffee to be a bit more of an espresso profile. Um, and so then we, we named that espresso lats. It was, it just stood out a little bit more and it also conveyed energy. And then we've also iterated on the names of the skews from condensed milk. It used to say condensed milk. Now we've changed to condensed milk latte, because people are like, is this a can of condensed milk, right? You know, I, because sometimes it's like, You may think it's clear because it says Vietnamese coffee condensed milk, but it's not. Like, I feel like you can never be too clear, especially when you're going really wide with your distribution. So now it says condensed milk latte, so that conveys a coffee and milk drink. It also, we decide to also align the naming of our skews with how people generally order in a coffee shop, right? Um, so it's always a latte, and then we also changed our coconut drink to coconut latte, right? So now all of our sKU names, um, Earlier this year, we released a cinnamon coconut latte, so they generally all not have latte to kind of align with how people order in the coffee shop. And then our latest skew is the cinnamon coconut skew, and the way we came upon that was, one, our coconut skew is our, is our non-dairy option and it's, it was doing really well. Um, and also when we looked at the non-dairy space, there weren't really a lot of coconut milk options. It's still very much dominated by like Oat milks and um I don't know, maybe almond milk. So we want to build upon that by adding cinnamon coconut latte, which we also saw to be a really popular flavor profile in the coffee space, you know, or chaos have that. Um, it's also really popular in the category. So that's how we think about flavor innovation. Um, however, I think there is this tension for a lot of like really culture rooted brands of like how do we balance Innovation and what's like super deeply authentic to us with what is approachable, what's accessible? Is it too watered down? Is it too far out? So, like, man, I love to hear from you, like mango sticky rice. I was like, wow, that's a, that's a bold one. And how did you come across that? Do you ever feel like, is this too innovative? Is this too out there, like, now that you are expanding coast to coast? Well, yeah, how, how did you think about that?

Fane He [47:55] You know, with some of the safer flavors, right, we're talking yuzu, lychee stuff, those flavors are very common now, not just to Asian brands, right? There's some more conventional energy drink brands that are actually using those flavor profiles. So I think, you know, our play has really just been to innovate, bring a new version of something familiar, right? You'll see two skews have lemonade in them, one has coconut, the other has pineapple and mango, but let's add the Lucky spin to it. So with mango sticky rice specifically, you know, our 1st 3 skews matcha, Vietnamese lemonade, and Pandan coconut, you know, got us to, um, you know, it basically got us into, you know, all these retail authorizations, but we wanted to know, how are we really going to move off the shelves. So I think what we saw is people really like fruity flavors. So we wanted to do two, you know, more fruity flavors, and that's how we came with the pineapple and the mango, specifically with mango sticky rice and Taiwanese pineapple cake. We didn't want to call them that. Originally we were thinking of literally just saying Taiwanese pineapple cake sparkler, but You know, one of our sales guys was actually saying that cake just doesn't sound very good for a natural channel. Like it just sounds, it doesn't really fit in for that type of consumer. And same with like sticky rice might just cause a lot of confusion for people in a drink. So we're like going back to our, you know, the chef-driven approach of things rather than calling it pineapple cake, we're calling it Taiwanese roasted pineapple, you know. Highlighting the flavor profile. And then with mango sticky rice, we call it mango toasted rice. See how it just sounds a little bit better than sticky rice, which might throw people off about like the viscosity of the actual drink itself. So yeah, that's how we really thought about it. And I think, you know, all of our drinks really aren't just like single dimension sweet fruity drinks. It really has a lot of layer and depth to them, and I think that's exactly why people Like our drinks, you know, not only as meal pairings, but also as mixture and mocktail alternatives.

Melissa Traverse [49:53] Well, all this talk about flavor innovation is making me very thirsty. So, I just want to thank the both of you so much for this conversation. Thane, thank you so much for, you know, the idea to have an open discussion about building a beverage brand, and Sahra, thank you so much for joining and contributing such great learnings and such great advice. I really appreciate both of you joining the Nombase Podcast. Sahra Nguyen of Nguyen Coffee Supply and Thane He of the Lucky Ox. Thank you so much for joining the Nombase Podcast. For everybody else, thank you for joining, and we will see you next time. That concludes another episode of the Nombase Podcast. If you enjoyed the show, please leave us a review and follow us on your listening platform of choice. You can also watch and listen to past episodes on Nombase.com and don't forget to join our Nombase Slack at slack.bevnet.com for company updates, industry networking, and community discussions. See you next time.