Björn Öste of Good Idea Drinks
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Speaker 1: 00:00 Thanks for joining us on the cultured meat and future food show. This podcast is for anyone interested in cultured meat and future food technologies. We’re excited to have Björn Öste as the guest for today’s episode 2020 is packed with events in the cultured meat space in March: Industrializing cell based meats comes back to San Francisco in April: The new food conference from ProVeg takes place in Berlin. This July: The new harvest conference is taking place on July 10th and 11th back at the MIT media lab in Boston. Registration will be available email@example.com October the sixth international scientific conference on cultured meat is scheduled for October 11th through 13th in Moscow. Lastly, the cultured meat symposium or CMS [inaudible] is taking place on October 29th and 30th in San Francisco this year. Topics of regulation, automation and scale will be discussed. Learn more and register at www dot CMS [inaudible] dot com find the latest events and firstname.lastname@example.org the last 21 years Bjorn has spent traveling the globe and building markets and supply chains.
Speaker 1: 01:21 His focus has been on the business development side of things, identifying industry partners, investor groups, various subject matter experts across multiple fields and markets and disciplines. He sees virtually endless opportunities in the high tech food industry where the incumbents have surrendered product innovation to small focused and dedicated expert companies like the ones he represents. He finds it exceptionally rewarding to be able to work with products on a global scale that make real and meaningful differences in the daily lives of many individuals. Bjorn, I’d like to welcome you to the cultured meat and future food show.
Speaker 2: 02:02 Thank you, Alex. It’s great to be here. Yarn. Tell us a little bit about your background and also a little bit about good idea drinks. Sure. I’d be happy to. So I a S could be guessed from my name. I’m Swedish by origin. I came to California about five years ago. And the, I’m here now setting up my companies that I’ve developed and started back in the U S I’ve been in the food industry and in the non dairy industry for the last 20 plus years. I been working with my brother who is a professor in food chemistry and back in 1994 95, he patented, he filed the first patent on a process to make milk from oats. I thought that was an outwardly crazy idea. I was kind of at that time in the software industry and building a software company.
Speaker 2: 02:56 Actually I had a lot of business with the big companies down the peninsula here in California. So I traveled a lot to this part of the world already back then. But anyway, I thought I sold myself for a company in 97 and I figured I should go and help my brother with his crazy out outwardly leash idea of converting people from dairy protean consumers to oat pro thin. How about that? Huh. And it’s funny, I mean, in the beginning everybody thought I said goat mail when I said oatmeal, but it ever heard about that before, right? So cutting forward, in 2001, we formed a company called Oakley and launched a consumer branded oatmeal product and set out to change the world. First 10 years were, were pretty slow. I think we were very early in the market. But the last 10 years it’s been an explosive growth and it’s been an absolutely amazing journey for us.
Speaker 2: 03:56 And there, there’s a lot to be said and a lot to talk about there. What I do want to say though in that the whole company, it’s science driven. It’s a lot of research clinical studies, patents. We took the R and D department out of Oatley and formed a separate R and D company back in 2008 called Aventure. And in this company we’ve been focusing on developing food products with very clear health properties that we document clinically. So we’d been working very hard and clinical proof all the time. And we develop in our network of scientists, we develop processes and products that we can patent, protect. We have since 2008 successfully launched a number of companies and some actually also not so successful. So we have gone through a couple of different experiences, put it that way.
Speaker 2: 04:58 All along of course I’d been very involved in, in in the development of Oatley. I’m currently on the board and work a little bit with the team here in the U S at times. But as I say, my daytime job is is to launch a company called good idea which is one of the the inventions that have sprung out of our research at the venture. And good idea is a slightly flavored sparkling water that you, if you drink it with your food, it will help regulate your blood sugar and in fact, reduce your blood sugar, spikes it extremely effectively with the somewhere between 25 to 30%. And that effect has many multitude of positive health benefits for, for everybody. But you and I would probably notice Alex immediate effect if we drink it with lunch and, and you’ll stay much more awake and alert after lunch. I think first time you and I met was that you are a cultured meat show in, in summit or conference in San Francisco. Right. we were happy to sponsor that with with our beverages. And I think we had a very alert conversation after lunch there.
Speaker 1: 06:12 Yeah. And actually, so on that note, I have a good idea to drink with me and I’ve been wanting, I’ve been wanting to you know, test out, opening it on air just because of the crisp. I mean, of course it’s just an a can, but just open it up, Chris sound of that. But when you have good idea with lunch, it keeps you alert, keeps you awake afterwards. Usually you kind of feel a little bit sluggish, a little bit drowsy after lunch. Is it totally fine to drink it even if you’re not eating food?
Speaker 2: 06:43 Oh, absolutely. You can drink it anytime. It, it’s the thing is the active ingredients here it may sound like magic. How can it go in and regulate blood sugar? What kind of weird stuff do you put in that thing? But the beauty is really that, that they active components are all very natural and things you and I need in our diet every day. In this particular case, our scientists identified five amino acids. So the building blocks of proteins these particular five amino acids are essential meaning, yeah, we have to have them in our diet. The body can’t synthesize them internally. We need to consume them. And it just so happens that we’ve discovered that if you consume them in liquid form, they’re extremely rapidly absorbed by, by the body. They in fact kicks to help kickstart the metabolic processes.
Speaker 2: 07:43 So trigger an early incident release. So when carbs that you eat, if you eat together with a drink, right, the carbs converts into sugar very rapidly and ultimately to do glucose that comes out in the blood. But the liquid amino acids are even faster, so they, they run past in the line right now, the fast carbs on helped kickstart a process. So when the carb, the glucose from the carbs come out in the blood, the system is primed and ready and can process it much more effective than the last ingredient with other ingredients we have, which is also an essential meaning you have to have it in your food. Is the mineral a very important mineral that in fact most Americans don’t get enough off. And that’s chromium. And chromium is in the scientific world, extremely well document. It has extremely well-documented F effects on what we call incident sensitivity did.
Speaker 2: 08:39 Meaning it makes your incident and the system far more efficient works much better in processing your blood blood sugars. So this double whammy effect of the amino acids in chromium resulting in the blood sugar curve that is far more elongated and lowers. So, so well what the scientists would say, they are under the curve, the total blood sugar in your blood from your food, we will be reduced 25, 30%. Now your question is what happens if I don’t eat than drink it? Well, if there’s no blood sugar to regulate, there’ll be no particular effect on the blood sugar. And you will in for you as an experience. It’s just a tasted beverage that you can drink as much as you want though. I mean the quantities that we have in the product are, are way under a, you know, you need, I think you need to drink 16 cans per day to come up to what’s recommended daily intake of the amino acids. So, so knock yourself out. I did it. There’s no danger on overdosing, so to speak.
Speaker 1: 09:44 Here I go to open up the can regarding the taste. I will say that the first time I, I had a good idea drink and it was the sparkling lemon lime and that’s the one I have here. It took me a second to, to kind of think about what it was. Right. And so I was expecting, I guess more of like a sparkling water, but then it has a nice, I don’t want to say kick cause it’s not like a, a big effect, but a nice subtle flavor to it. And it took me maybe the second or third one for me to really start liking it. And so can you talk a little bit about how you guys developed the, the taste and, and the whole process of developing for taste? Sure.
Speaker 2: 10:36 It’s, it’s in some sense, I mean we’re obviously a European company, right. And on in Europe it’s been very common for, for a very long time to drink sparkling water and, and weed food. Typically, you know, had you been in Europe, let’s say 20 years ago, it would be very common to squeeze a little bit of lime or a little bit, little bit of lemon with your sparking water and consume it with your food. And when we develop good idea, I mean the active ingredients, amino acids in the chromium we could put them theoretically in pretty much any beverage, but probably we were looking for was to put them in a beverage that’s in some sense the least common denominator for the most number of people to be something easy to consume with food. And so from our European prep background, that immediately landed us in, in flavored waters.
Speaker 2: 11:32 We had to add flavor to mask the otherwise bitter amino acid flavor. And I think the fact that there is a, I mean I’m asked is that have sort of flavor components in their own right ads in effect more body, more volume to, to, to the the water which this effectively I the consumer experiences I’m sure you can witnesses to. It is exactly that will drinking a as parking flavored water possibly with a bit more body in the flavor itself. Although what we also did with our European heritage, we decided we don’t want to over parfum it. We don’t want it to be too strong of a flavor because it’s going to match with food. So it needs to have that subtitle light flavor. And we also learned when we started testing this on American consumers about two and a half, three years ago, that that here you probably have an an anticipation expectations of very strong, pungent, you know, strong flavor effectively and, and you know, traditionally this is sodas.
Speaker 2: 12:41 ER, it’d be in lots of sugar and you know, it’s, the food companies here tend to put a lot in it, right? And, and the benefit of that in some sense is probably when you drink the beverage on its own, it might be desirable to have a bit more punch, so to speak. But wood food, we’ve seen that it really works better with, with a, a little lighter flavoring. And it’s funny what you said, that it took you one, two, or maybe three tries to really get to enjoy it. And I think we see that all the time that, that people that drink it, that they, you know, the more they drink it, the more than love it. And it’s almost like people get addicted to good idea over time. You know, the, the most critical consumer test we did was when, two years ago when I invited over my daughter at that time, 13 then probably 10, 15 of her classmates, all 13 year old girls, right? And they’re all drinking LaCroix. Lacroix was sort of the big thing and we did blind tastings and comparisons and everybody 100% prefer good idea over LaCroix. And when you had that kind of critical consumer, right, we felt like, okay, this might work actually. So, so yeah, there you go. That’s the backdrop. We want you to drink it with food. It should appear with food very well. But of course if you’re thirsty, drink it anytime.
Speaker 1: 14:10 Personally, I, I have a little bit of dry mouth, so anytime I’m eating I always have to have a drink with me. So if you, you would offer me a cookie, I would have to say no, I don’t have any milk. Right. And so, so yeah, cause they had open milk. So, so for me that, that concept was very interesting in the comparison to LaCroix also very interesting because I look, Roy has I think a higher level of carbonation and this one has a nicer level of carbonation, I think. So how did you guys figure out the ideal level of carbonation?
Speaker 2: 14:45 I think it was, I don’t know. I think, again, maybe a little of our European heritage there, it’s very natural for us to look at lower carbonated waters. It’s, you know, if you look at the carbonated water category and the prestige, the higher end carbonated right
Speaker 3: 15:03 Waters that are, you know, they’re really premium products
Speaker 2: 15:07 Tend to have less carbonation. You know, add a lot of carbonation is a cheap way to, to, to hide things and to make, you know, again, it’s that add a lot to it. Give it a lot of punch. It’s an eat, you know, cheap thrill in Samson’s, but may, may be a fun first time, but over time I think we’ve seen again and again and again that people actually do prefer lower late levels of carbonation. So, you know, we don’t know if we’re right or wrong or too, you know, but that we believe strong in that. And so far it seems to be working through advantage. So I want to track back to what you were doing in the mid nineties. You said that you were in tech. What kind of tech were you working on back in the mid nineties? Oh, I started a software company back in Sweden in the late eighties after graduating from engineering school. We started developing
Speaker 3: 16:08 Crypto crypto solutions and compete for computer security.
Speaker 2: 16:12 And quite quickly, actually made some pretty major breakthrough with the sun Microsystems and you’ll at Packard at the time that ended up selling our products all over the world. Particularly through our target market, quickly became banks and government organizations across the world. So what we thought we were the coolest things on the planet. We did a cryptography public
Speaker 3: 16:37 Cryptography and had sophisticated solutions early on. I’m just surprised to see this 30 years later. It’s still the same problem.
Speaker 2: 16:45 Mum’s up there, so I’m not sure. But we, we ended up selling the company to to a California based company called RSA security. And that’s a, that was in 97 and that’s when I left the secure software industry. I went into food and consumer products and it really, what, you know, we used to go to all the cool computer conferences around here and we thought we were the coolest kids, obviously on the computer. Software was the place to be. But I had an epiphany one,
Speaker 3: 17:16 Dave and I in, I was happened to be in London and my brother actually showcased oatmeal for the first time in a food
Speaker 2: 17:24 Show in London, Earl’s court in London. And the funny thing, you know, when, if you ever experienced the software industry, when you show a software package, whatever it is, and people come in and they’ll say, well I don’t like this or that doesn’t work well don’t worry, I’ll take care of that in the next version, right? This is just a beat or whatever and I will fix the bugs in the next release. Well, try that at a food show if you like. If people come in and they actually eat your product, it’s sort of no room for IOL. We have another release coming soon. Don’t worry, don’t worry. Stay with us. Right. Doesn’t work that way. It’s that sort of immediate kind of a, I dunno, it intrigued me. I loved it and, and I left the high tech industry or, or I shouldn’t say that high tech because I think what would be or doing is high tech food. But we left the software computer in high tech, that type of high tech industry behind and never looked back since.
Speaker 1: 18:23 So we know it’s difficult to market a product, whether it’s, you know, whether it’s a tech product or it’s a food product, but when it comes to marketing a, a food product, how important is it that the branding and the marketing is successful before even the product is successful? Because we know sometimes it takes many years, many iterations on the packaging, maybe even changes to the product itself. But can you describe a little bit about the process of marketing a food product and, and the importance of branding and marketing?
Speaker 2: 19:02 Absolutely, yes. So I think what’s happening is that it used to be in the food industry, particularly in the U S right. That it was, it wasn’t really, I mean, you know, the big food companies will disagree with what I will say, but, but it was never about the consumer. It was never about marketing to the consumer. And building trust and a relationship with the consumer has never been. It was all about logistics and owning distribution. And then broadcasting your messages using TV commercials and other types of commercials. You know, if you were a Coke, you owned a shell space, you had a strong relationship with the retailer, forget coming in and that environment does a newbie, right? And so they bought the shelf space and then they got the consumers to go there and, and pick their products off shelves by brainwashing them with, with expensive TV, commercial campaigns.
Speaker 2: 19:58 So that’s how the traditional food industry built its platforms. And I think part of the backlash by pretty much no consumer, no one in this part of the world today, trust big food companies. You know, if you go out and ask, people don’t trust big food companies. And I think that’s a consequence of that old model that, that, you know, it was, it was all about tricking you into products because we, we brainwashed you with TV commercials. So over the last 10, 15 years we’ve seen a dramatic change would think emergence of new distribution channels and the realization of the need for organic and healthy products. And this has created a flurry of new innovation, a new product. And all new innovation, I dare say a hundred them challenged me if you can. But all new innovation comes from small upstart companies, from people that are not within the food industry.
Speaker 2: 20:56 Because the traditional, you know, big food companies have fostered an army of people that have been trained in the traditional way of doing things, right? So that’s why you see new innovations. Look here in California for example, all the new cool American food companies, they are started by lawyers, by software engineers, by bankers, by people large, nay from outside of the food industry where, where they’ve seen a need and they decide because you have a culture of starting companies and doing stuff here, right? To see you identify a need, Soylent, whatever, right? Look at them. And, and you said about to solve it. This is Colin, of course, with the margins of Amazon and alternative channels that you’re less dominated by or you were less dependent than succeeding in retail. You know, you could get your products to the market, different channels and ultimately led the traditional retailers to force to change attitude and accept to bring in smaller companies and new products and you know, give up shelf space for, for the new cool brands that ultimately their consumers want.
Speaker 2: 22:06 Their consumers don’t want necessarily only the big brands from the big companies that they don’t trust. So, so in that context, marketing or food products have become extremely important in a very different way. And I think you still see a lot of companies struggle with that here. And I think I, you know, working closely with Oatley, I think we learned extremely much about how, how to succeed with, with branding and, and branding. It’s not just slapping a sticker on you and come up with a cool slogan or something. It becomes more of the true authenticity of the company behind who are you? I mean, you have to be the one you say you are, you have to live your story. And the closer to really being who you are and being honest and transparent, transparency is so important today. Right? And all aspects showing what are the ingredients, where did it come from, how are they made?
Speaker 2: 23:08 You know, what’s your real story here? Of course everybody in one way or the other want to make money, but it’s also about something else. It’s about, you know, providing, in my case, we are all so excited about our products because we can deliver true health benefits to people that really need it. And that’s, you know, we’re not just peddling a beverage that happens to taste great. It actually delivers a really important health benefit. And for example, now with good idea, when we get emails here, we just read an email yes. Or on Friday at the office from a mother of a 16 year old daughter that has diabetes type one. And you know, we’re all sort of sitting there listening to her story, how we dramatically changed the quality of life for that one person. You know, that’s what we’re all about. And, and this all translates into, you know, market. We need to convey that story. So, so when you launch a product you need to have your, your, your message and who you know, your authentic message about who you are and what you want to do. It needs to be there day one. I think consumers expect and demand that more and more
Speaker 4: 24:20 [Inaudible]
Speaker 2: 24:21 And that’s also how we can differentiate ourselves from the big ugly food companies that nobody trusts.
Speaker 1: 24:28 I think when you said that you need to live your story and that needs to come out through the brand, I think that really hits home. And I think that, I think you’re right, a lot of people do just slap a label on it and, and think that they can make it run. But you really have to live your story and believe in your story.
Speaker 2: 24:47 I think it’s so critical. Right? And in, in, you know, in the case of Oakland, I would see a lot of new oatmeal looks hitting the market here in 2019 and it’s fun. It’s for me to see how some of these bigger food companies completely changing their marketing to try to be something that they really aren’t. Right. Just because I think Oakley is out there and has defined in its honesty, in its transparency the way it is, they are now. Now they’re forcing everybody to sort of kind of move in a way where they come communicate and engage with the consumers in a very different way. Remains to see who will succeed in that.
Speaker 1: 25:28 We talked about patents for the different PR food products that you guys have been working on. Is the, is good idea patented?
Speaker 2: 25:35 Yeah. There are three different patents involved. We have the patents are being approved in some 20 odd countries by now. I think some of them are still pending here in the U S but it tends to be, you know, a rather lengthy and unfortunate also a rather costly process. But for us it’s critical because if we do clinical studies and prove that something we’ve invented or you know that it actually has health benefits. We, we can’t really, as a small company, independent company, invest millions in clinical studies unless we know that we actually at least have some kind of advantage when we launched the product so that, you know, bigger companies, but deeper pockets can’t just make a copycat day after the day after and ride on the same benefits that we spent so much time and in perfecting
Speaker 4: 26:30 Right.
Speaker 2: 26:32 So, so therefore, two cornerstones in everything to do is patentable processing or products on the clinical proven.
Speaker 1: 26:43 So how many flavors of good idea drink are available now? We launched [inaudible]
Speaker 2: 26:47 Three flavors. We feel that that’s the amount you need when you start launching into retail and, and food services. We have I think five or six flavors that we have tested and worked with that. So we’re ready to launch more flavors when, when we have the inertia and the movement in the market. But currently we have three flavors, dragon fruit, orange mango and lemon lime
Speaker 1: 27:14 And being based in the U S where is the best place to pick up good idea of drinks. The easiest place to get good ideas
Speaker 2: 27:23 For anyone today is to go to Amazon and just look up good idea drinks and you buy it off Amazon. We are in about 200 retailers right now. We launched in retail in last summer and we are distributed by a, a national distributor called K. He that has taken us in on, into eight of their distribution centers by now. But by the nature that the way how things work in the retail industry, the first customers to bring us on board are, are typically smaller independent retailers because they can make purchase decisions right there. And then very quickly, we’re of course working with, with the bigger retail chains. But you know, they have reset schedules and then a bottom line is that can take eight, 10, 12 months before, you know, they make a decision until you are your on shelf.
Speaker 2: 28:25 So, so if you happen to meet in the middle Valley for example, you can go to mill Valley market and, and there are other stores up in, in Marine County. We’ve been servicing a number of supermarkets in Santa Rosa, San Rafael and neuron here directly. If you’re in Southern California, you can go to a place like Lassens in the Midwest. We have quite a lot of the smaller independent chains. Plum market happens to be one jump with gyms and other one for those out there that happened to listen in that part of the world and recognize them. We’re also in rolling out in in food service. So we are actually gonna address Ansel director to a lot of the offices and companies here in the Bay area
Speaker 1: 29:14 For lunches have, so you can have it with your lunch. And I know that you had mentioned a couple of different flavors that you guys were experimenting with, but are there any new products that are planned to come out or, or products that you’re working on that you might be able to discuss?
Speaker 2: 29:31 In good idea you mean? No, we, we we have the three we have on the market now and we have other flavors ready to launch when when we have more scale and more presence in the market. So, so it’s really not so much to say that more than that. Yeah, there’ll be more flavors. Don’t worry. And I want to kind of start the closing by really asking what advice do you have for those interested in starting a new food company? Patients, patients, patients. It, it don’t expect an overnight success. It takes time. And that’s the frustrating part of it. You know, that aspect. I can at times look back to the software industry and, and you know, if you’re have a software package, you can scale it very quickly if you’re successful. Right? And that’s obviously very difficult in, in the food industry for, for obvious reasons.
Speaker 2: 30:34 So, so I think you, you need to expect that you know, three, five, six, seven years to from start to, to start to get to, to you know, 30 to $50 million business somewhere in that range. Of course, there are exceptions. There are occasional, you know, outliers that, that make this much quicker. But as I said, just the inertia in their retail, it can take a year to get into retail, right? To bigger chains and unless you yummy, you gang get into occasional, you know, test markets and whatnot, quick care and independence as I said, but the independence are by definition typically much smaller and don’t generate the big volumes. So you need to sort of earn your way by succeeding and independence and go up to the smaller regional chains and show traction. Then shows show a successful sell through rates, then you’re going to start get accepted by bigger retailers and Ana, it just takes time.
Speaker 2: 31:36 It’s really hard to, to come up with a shortcut there. I mean obviously a way around that you people would argue would be setting online and which we are doing. I just mentioned Amazon, right? But, but also we had a water for example, or water beverages. Online distribution is not super easy because we have pretty heavy products. So the ratio value to weight is not favorable. If you’re in dietary supplements, for example, it’s a very, very different story, right? So there are many successful dietary supplement companies that only sell online. That’s not quite food though. But if you have a food product like bars or other things where you have more value per weight, online business can be a really good way forward. And as I say this, there are starting, we’re starting to see some beverage companies that are very successful in their online business and build an online presses
Speaker 3: 32:40 And have that online presence help drive their, their their brick and mortar presence.
Speaker 1: 32:48 You can get in touch with Bjorn on LinkedIn and learn more about good idea drinks at www dot. Good idea, drinks.com, Bjorn, thank you so much for being with us today. Are there any last insights you might have for our listeners? Oh yeah. It’s take, it takes
Speaker 3: 33:04 Longer time and it costs more money, but yeah,
Speaker 1: 33:06 That then they’ve heard that before. Right? So, so otherwise, I think being in the food industry is one of the coolest places to be in right now. It’s a, it’s an industry that needs change drastically.
Speaker 3: 33:21 We’re all, the major incumbents basically resigned any innovation. So it’s a, it’s a wide open space for innovation.
Speaker 1: 33:30 And I encourage people to look at it. I think it’s a great spot to be in going. Thanks so much for being on the show.
Speaker 3: 33:37 Thank you, Alex.
Speaker 1: 33:38 Really cool. Thank you very much this year I was Alex, and we look forward to being with you on our next episode.