I first discovered mood33, a most revolutionary and tasty beverage through mutual friends who know about this marketplace of both CBD (Hemp) and THC infused liquids.
I was doing research on the industry for my keynote speech at the Cannabis Drinks Expo held last year. I wanted to find out who leading the world of cannabis infused beverages in this nascent industry. I tasted a couple cans of a new product named mood33 and found it to be quite refreshing and therefore memorable. This non-alcoholic beverage proved itself to be worthy of my notice. It really sticks out as something I want to share with friends, or drink alone if need be.
All of the beverage products within this marketplace are creating a new dialogue in both CBD and THC infused formats. This makes me very proud to have tasted mood33 in the infancy of this genre. I think mood33 is one of the RTD (Ready To Drink) drink business leaders as they put the finest ingredients into each sip of their crisp and effervescent liquid.
This CBD infused quaff is something to taste, then buy again because I believe it is quite bemusing, therefore worthy of your hard-earned income.
Warren Bobrow=WB: Please tell me about your background in the industry and how you found the path to CBD-infused beverages.
Eric Schnell=ES: My journey as a beverage entrepreneur started over 20 years ago running a small herbal tea brand where I was able to learn about Chinese Herbal Medicine and Ayurveda, as our products were all geared towards healing and nurturing the body. We sold that company to Kikkoman and then I co-founded Steaz, the world’s first organic certified green tea-based soft drinks brand. For over 14 years, we built a portfolio of better for you tea-based beverages under the Steaz brand and sold the company to a strategic acquirer in 2016. Over the last 10 years, I have partnered with many young tea brands, such as Runa Tea, where I was able to gain even more knowledge on other fantastic ingredients that can heal the body and bring them to market in the US. When I first tried CBD in 2014, I was hooked instantly on how it changed my “mood” and made me more relaxed within a few minutes. That “aha” moment set me on a journey to find a way to infuse CBD into great-tasting beverages and eventually launch a brand honoring this amazing plant. mood33 began forming its business plan back in 2016 and the Farm Bill passing in late 2018 is what finally allowed me to bring these products to market on a more national level.
WB: What opportunities do you see opening up in the current market?
ES: There is still time for the right brand with the right jockey to come to market and build a huge business in hemp and CBD beverages. With only about 20 states being “friendly” to these products being on conventional beverage shelves, we are already seeing a few breakout brands doing over $1M in revenue monthly. For a typical iced tea or soft drink startup, by comparison, that is a fantastic accomplishment. I believe you will see more “functional” formulations come to market as the entrepreneurs figure out how to build a brand that allows for CBD to be paired with complementary botanicals and herbs that can fit into different usage occasions during the day.
WB: What is mood33’s overall strategy for growth in the short term? Long term?
ES: Our home market is NYC and we are super focused on owning our backyard here first and then smartly expanding out to key cities where we believe CBD infused beverages will find an aware and excited consumer demographic. We work with best-in-class beverage distributors that we know in these key markets and are focused on testing and learning as much as we can in 2020 to get a better understanding of how consumers in different markets react to these products. In NYC, we are seeing immediate adoption in up-and-down the street delis and bodegas, especially office buildings where people are consuming CBD throughout the day to handle stress. We see cafés and foodservice being a big opportunity as well, and have just launched South Florida distribution aimed at targeting over 400 of these types of accounts. We are on queue for national distribution with some of the larger natural foods industry distributors, who have already approved the brand, but are just waiting for their legal and compliance departments to greenlight hemp/CBD infused products. We anticipate this happening the latter half of 2020, and when it does, our forecast is to gain speed-to-market in over 5,000 retail accounts, most of which my team has relationships and has already shown mood33 to the buyers.
WB: What challenges do you face and how do you plan to navigate them?
ES: Every entrepreneur I speak with who is pioneering this new category in beverages agrees it’s like the “Wild West”. All conventional beverage best-practices are pretty much scrapped when it comes to how to market these types of products. For one, labeling is a major issue and each state that seems “safe” to sell into may have its own unique label requirements. For example, we didn’t use QR codes on our first production run but when we went into Florida recently we realized we need these now on the bottles in order to be compliant with their brand new state regs. In my 20 years, I have never encountered this much pivoting and navigating on a regular basis and it’s important for investors to realize there will be constant issues challenging brands and founders. The brands that can successfully keep cash strong and runway long will be the ones that survive this next critical year for the category.
One of the hardest things I have had to do in my career as a beverage entrepreneur was to destroy thousands of perfectly good cases due to the milligrams being off just slightly from what the state would allow to be sold. There is no precedent for that in a conventional beverage category as the FDA would not make you dump product due to an ingredient being slightly off. Investors need to stomach this, but those that will have a big prize waiting for them over the next few years as things settle down and the category is allowed to mature.
WB: How do you anticipate mood33 contributing to the future of CBD and consumer wellness?
ES: Our goal with mood33 is to create the “Gold Standard” in CBD infused consumable products. We are showing the industry already something no other brand is doing: talking about supply chain openly on our packaging and website, and sharing whom we buy from and why we are creating a better economy for the farmers. We partnered with Evo Hemp and our supply chain is a Native American grown story focused on the Lakota Tribe in South Dakota. We have educational content and videos on our website designed to teach new consumers the benefits of this amazing hemp plant and how to use it as part of your daily nutritional strategy. Our management team is comprised of beverage industry veterans who know how to safely market new health products. One of our partners is a leading U.S. Registered Dietician who is going to be at the forefront of this educational platform for the brand. We see a day not too far off where hemp/CBD beverages will be just as large a category in the U.S. as energy products are.
Thank you Eric for your time. I appreciate what you are trying to do and I know how hard it is to launch anything new. I am positive you will be achieving your goals with the quality of your products. I wish you great success.