Poppi: Allison and Stephen Ellsworth. From Farmers Market Vinegar Drink to $2B Soda Sensation

[MUSIC] Expo West is a really big event in CPG, especially in better for you. >> Yeah, it's a big convention and a home. >> And we were using this temple event as being our launch. So we had spent a lot of our money on, I think like almost $90,000 on building a booth. You have to pay for the space, you have to get product out there. It was like our big bet. And we ship out to launch Poppy March 3rd, 2020, the first week of COVID. And then a day into it, they canceled the entire thing. And at that moment, it was just so devastating for us because we're like, goodness this was our moment, where do we go from here? [MUSIC] >> Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. [MUSIC] >> I'm Guy Ross, and on the show today, how a mom and pop beverage made with Apple cider vinegar got remade as Poppy. A soda sensation that sold to Pepsi for nearly $2 billion. [MUSIC] Okay, I'm going to tell you about something I do every morning. And I'm going to qualify this by telling you that I have zero standing or expertise or academic training to give any advice on what to put into your body. All I know is what works for me, whether it's real or imagined or just witchcraft, it works. So every morning, after I get a little morning sunlight, thank you, Andrew Huberman, I pour water into a tall glass and drop a tablespoon of Apple cider vinegar into the water. And then I drink it. It's supposed to be really good for regulating blood sugar. And all I know is that I think it makes me feel pretty great, but that's just me. For a lot of people, the taste of diluted apple cider vinegar is a non-starter, which brings us to today's story. Because about 10 years ago, Allison Ellsworth was doing a version of what I do as well. In her case, it seemed to help with digestion and chronic stomach issues. The problem though, least for Allison, was the taste. So she started to add fruit juices to her vinegar and water mix and eventually started to share her concoction with friends. And soon, Allison's husband Steven joined to help out as well. Now you probably know what happened next, because as these things go, enough people liked what Allison was making that it occurred to her she might have a product and a business. So Allison applied to a local farmer's market in Dallas and started bottling her home-brew vinegar drink and called it mother beverage. It doesn't quite slip off the tongue, but it was a start. One day, Allison and Steven found out that shark tank was coming to Dallas looking for perspective guests. Now, I'm not going to unravel this whole story here because you are about to hear it. But this is the story of how a farmer's market vinegar drink became poppy, a prebiotic soda that eventually sold to Pepsi for nearly $2 billion. Think about that. In less than 10 years, the brand went from a mom and pop curiosity at a Texas farmers market to a $2 billion sensation. As for Steven and Allison, they didn't start their careers in the beverage industry or even in the health and wellness space. They both grew up in the 80s and 90s Allison in Texas, Steven in Wisconsin. After attending the University of Utah, Steven worked briefly in the corporate world, including a stint at Wells Fargo, but he didn't like it all that much. Yeah, that's right. I'd like to say that I was unemployable in the corporate world. I've always had the ability to earn money from a young age. I got a paper out when I was 11 and that's very autonomous, mowing lawn, shoveling driveways. And I never had to go work for someone to get that. I just had a really difficult time taking direction when I just had such a clear idea of what I wanted to do and the way in which I wanted to do it was oftentimes better than what my boss was recommending. And Allison, when you graduated, I think pretty much right out at a college went to go work in the oil and gas industry if I'm not mistaken. Tell me what you did. Well, when I graduated college in 2009, I didn't want to go like Steven was saying, go work for the man or some corporate job making 30,000 a year. So I was like, okay, my dad has these resources. I can go work in oil and gas and so he did work in oil and gas and you start off with a really young age making like 500 bucks a day. Right? It's really good money. You're working seven days a week. You're working from dawn to dusk, though. It's really, really not the easiest job, but for me, the hustle was there and I love just making money, honestly, I think that's a big driver of that self-starting mentality that just kind of was instilled in for me from a really young age. I love that you say that because you know, a lot of people are uncomfortable saying that, right? Because it, I think there's a perception that saying, I money was important to me. It sounds like it's greedy, but actually I'm assuming that from your perspective, it's freedom. Like you didn't grow up with anything. Yeah, I didn't grow up with a lot of money. Even though my dad had money, I loved him to death, but we didn't really reconnect until after college and so I never knew I didn't have money, but I knew I didn't have as much as everyone else. If that makes sense. So for me, it was really big piece was the freedom and working in the industry, it wasn't like you were working on drilling rigs or like you were, tell me what you were actually doing. Yeah, so it's kind of similar to what people call as like a land man, obviously, as a land woman, but I would go into court houses and these small towns of about 3,000 people and I would research basically incestries of where the government or the United States or the state gave land to that settler back in the 1800s and then I would track that forward and I would just see who owns those minerals and then you would go and track those people down. I would negotiate with them on whether or not we could drill for oil on your land or do research. We did a lot of surface research and seismic activity and water research. So it's very self-starter, no one is actually there with you. So I'd be in this town in the middle of nowhere by myself and you have to be very on top of it and hit your deadlines. So you're doing this work and Stephen, you don't last that long in the corporate world, you're in Utah and you, and I guess you would eventually go work at a ski and snowboard shop. Yeah, so I guess it was a sabbatical from the corporate world. When I went to school, I was a good student. I tried to rearrange my schedule so that I could ski as much as possible or snowboard as much as possible. So I went and was a buyer and a manager at the snowboard shop and so got to test out all of the latest gear, got to buy the gear for the shop and ultimately got to do what I was super passionate about. So this store that you would go eventually work for, this was in Salt Lake City. There was. It was in Salt Lake City at the Gateway Mall. And one of the projects when I was working was in Utah and I happened to be at the mall walking in to that snowboard shop and that's where me and Stephen met. What were you doing there? I actually do enjoy snowboarding as well, not as hardcore as Stephen. And I went into my backpack. I think I was looking at some bindings and he was the one that helped me and I didn't know a single soul. I was living two hours outside the city in a teeny town called E from Utah and he said to me, do you, can I get your number? I would love to take you to ice cream. Wow, that's, that, let's just pause for a sec because Stephen was that something that you would normally do like just ask a customer out. No, so that was honestly, it was the first time and I was actually pretty, pretty intentional about not doing that because I felt it sort of broke the professional barrier. But I just couldn't pass up the opportunity when I saw Alison come in. What, what, what, I mean, she was looking for a backpack and what, I mean, it could have just been an ordinary transaction and we would never even be having this conversation like she would go in. And I didn't even buy the backpack. Yeah, I'm a terrible salesperson. Honestly, when he gave me his number and said, do you want to go to ice cream? I thought to myself, obviously, he's probably Mormon and I grew up seventh-day Adventist, which is also kind of a stricter religion. And so it's, you know, similar, no drinking and, you know, work. Very healthy lifestyle also, right? Yeah, and no, it was, it was great because I think we had a lot of those similar values right? So that first, so when he first asked you to go for ice cream, that was not, you weren't like, oh, yeah, you were thinking, okay, he's clearly a member of the church because he's not asking me for coffee or for a beer. Yeah, that's right. I'm from a big happy Mormon family and I don't say that cheekily. Right. You know, you get religions such a huge piece of dating and I, the second we hung out, I realized that he was very different and it wasn't such a big thing. Like it just moved really quick and then we got engaged seven months into it and just, I don't know, you just like, when you know, you know. Yeah, for sure. All right, so you guys get married in 2014 and I guess Stephen, you wound up quitting your job at the snowboard shop and going on the road to work with Allison doing similar work like oil and gas work, right? Correct. Where were you guys actually living at this point? We ended up moving into a teeny motorhome for a few months and we moved to Wyoming, we're working on all of these different things and honestly, this is why I started poppy because on that road, I kind of felt ill and all right, let's back up back up a little bit. He'd be feeling ill like stomach issues, digestion, like what were you, what were your symptoms? Yeah, I just look back at pictures and my whole body was inflamed. So red puffiness, my skin, horrible acne, horrible tummy problems. I was allergic to all perfumes, all makeup, shampoos, my eyes would swell shut, horrible. You're traveling, you don't have access to be able to work out consistently, you're not sleeping consistently and then you don't have access to good food and I think that was a huge piece of why I didn't feel good and going to doctors that just kept writing me off saying you're fine, like women problems, right? Yeah. All right, so you guys are working and Allison, meantime, you're dealing with just this frustration about not feeling well and I guess at a certain point, maybe you found something online, you started to experiment with the apple cider vinegar, like to take, I guess to dilute it in water and see if that would make you feel better. Yeah, I ended up doing a full elimination diet where I cut out sugar, dairy, gluten, all the things and then I slowly started introducing those foods back into my diet and the consistent thing when you're doing that to help with the cleansing, what they call process was drinking apple cider vinegar every day. And so going through that process, it was just life changing before I gave up all the food within two weeks is just having the apple cider vinegar, I felt 50% better and I just discovered that food can really affect the way that you feel and the only problem with the apple cider vinegar is it's just a really harsh taste and so I was putting it in this big, huge thing of water, adding lemon and cayenne pepper to it and just like almost choking it down daily knowing I had to do. I wasn't like looking forward to it and I just like was like I got to make this taste better. There just has to be a better way. Yeah, I mean, I guess we should pause and talk about the apple cider vinegar for a moment because I take it every day and I take a shot of it and dilute it in like eight to 12 ounces of water. You're not supposed to drink it straight. It's not actually, it's not actually, it's not going to give you a throat. But there's a lot of research that shows that it does have an impact on insulin sensitivity, which lowers blood sugar. It's a really great and people, right, there's people have been using it for a long time. Yeah, and at the time, I had no idea about any of the research or anything behind it other than maybe my grandma told me to take a shot when I was sick, right? Yeah. And growing up and I just felt different, but I was also trying to get Stephen to drink it. I was like, you have to try this and he's like, you're crazy. I'm not drinking that and I was like, okay, I'm going to make it taste better. That goal, I will make you try this somehow some way, but in creating, I didn't want to take away from those health properties where I could have just added orange juice or a ton of sugar or a lot of other things. So for me, it was really important to try to keep the sugar really low and then the ingredients, basically ingredients that you can love and pronounce and just the ingredients people could know. All right. So you are, this is having an impact and like any time people find something that starts to really help them, they get really passionate about it because I've been in this position too and I'm sure you're just like talking up apple cider vinegar to anybody who would listen, but to some people, they might be like, that's weird. That sounds weird. You're doing what? Everyone thought I was weird. I remember I had one neighbor who she was having some health problems as well and then she started knocking on my door and I was making her mason jars of it weekly. It was this thing I was like, wait, this is interesting. Other people are interested in it and then soon after that, we went home for Thanksgiving to Texas and my sister and brother-in-law and my family, like everyone's there and I bring it with me. And I just think everyone's going to be just as excited as me and I set it up as like a tasting in the sun room and the only person that shows up to try it is my brother-in-law. Nobody else would even try it. They're like, apple cider vinegar, like, no, thank you. I have nothing to do with it and they all called me crazy. And as you're doing this, order some of the other things that you're doing to make it more palatable. I actually love the taste of apples. I buy those giant bottles of Costco, you get three or four, but it sounds like you did not love the taste of it in water that you were trying to mask it somehow. I was trying to mask it and you're a rarity, not a lot of people like it, right? Like you're a little crazy. No. With the process and I'll be honest. I remember trying all sorts of things. I remember, like it was yesterday, simmering raspberries to make purees. I tried essential oils. But really what we landed on in those early days was I used to infuse the vinegar. So I would get like real raspberries, real rose petals and I put the vinegar in it and I'd put it on the table and it would infuse. So it would take on the flavor of those and then I would literally use sparkling water or soda stream and then the main sweetener at the time, stevia and some of the first flavors that I made. Honestly, one of them we still have today, which is raspberry rose. I remember doing an orange cinnamon with like real cinnamon sticks, lavender lemons, right? So really just flavors that I thought would go really well together and some worked and some didn't. All right. You're making this. This is like 2015ish. Tell me how, what even get because making it for yourself is one thing. But deciding to pursue this as a business is another thing and oftentimes you need outside validation. You need people who are telling you, hey, you have something here. So was that happening? Who was saying that? Yeah. So I remember going through this. I was really passionate about it. At the same time, I was feeling better, right? I talked about just the way I personally felt and both Stephen and I lived to each other. We'd be married for a little bit. We're like, maybe we want to start having a family. And so I remember sitting at the table one night. It was me, my dad and Stephen, and we were just like, what are we going to do next? Like if we want to start a family and we don't want to be on the road, maybe Stephen could stay on the road. Well, I'm home, but that nobody wants to live that life either. And my dad goes, why don't you sell your hooch? And I remember him calling it hooch and it kind of hit us like, wait, could this be a business? It was still a hobby at that point. So we got up and we bought a place, we moved to Dallas. We moved in December, and I got pregnant right away in January. It was a lot quicker. But I think it was really interesting as you sort of talk about fate and some of these things that really align. Thankfully we had a long project that we had been working in Wyoming. And the project was sort of winding down. So Allison was going ho, she, you know, we finished the project, she didn't go back to work. She started doing this. I found a local job in Dallas to pay the bills. And so this is what I would do during the day and then at nights and on the weekends, Allison and I would work together. We just started buying equipment. We started maxing the credit cards out pretty early and just kind of putting our life savings into what we just wanted to do. So I remember our guest room, right, I'm like three months pregnant at this point, our guest room on the bottom floor had like four vats of vinegar that were what, 50 to 100 gallons. So our entire house smells like vinegar. We have upstairs on our main floor. We have a table that we've basically make shifted this bottling unit together. I mean, I remember like when we first started doing it, it was exploding on the roof of our brand new house. It was this whole thing. And we would literally measure the vinegar with just like these, I don't know, what do you call it? A syringe. And we would put it into them each one and we would measure the exact amount and then we'd fill it with water and then we'd cap it. Fill what? A bottle? Yeah. Just bottles at that time. We had no labels. We were working through like, what is the name? What do we call it? What do we want to say? What are our values? So I just want to understand this. First of all, how did you even learn how to do that? I mean, because right, there's like a science to it and the pH levels and obviously you trial and error with the exploding bottles. But how did you know what to buy and how to make it? Was it just purely like Google research? So that's, I'm kind of a science nerd and my brain is really linear. And so I dug into the science of it and so I had an understanding of what a little bit about fermentation. I was really into kombucha, even in college. I think I started drinking kombucha like in 2006. We would brew beer in college and so I had an idea of like fermentation and, you know, sugars and yeast and these other things is what ultimately cause fermentation. And so it was honestly trial and error. We had really rudimentary understanding and we just gave it a whirl. And you would buy, and these were like 12 ounce bottles, like glass bottles. So really funny story is we were filling these one by one. The equipment we had was essentially like what the inside of like a soda fountain looks like. You've got this little machine that takes in water. It's got to be at a, you know, temperature that took a little bit to find out. It has to be around 40 degrees in order for like the carbonation or the CO2 to really sort of dissolve within the water solution. And it would shoot out as carbonated water. So think about a more efficient soda stream. And so we were doing this and I remember Alison, we got these bottles. They were square. They were really, they looked great. They were amazing. And we put it in there and we sealed it. And you know, maybe the next day we were taking some photos of it with some fresh fruit around it and start bringing the brand to life. And probably like 10 minutes in the bottle just blew up and we're like from the pressure of the carbonation. Yeah, exactly. And so that's what led us to discover that not all glass bottles now can handle carbonation can handle carbonation. And so so we ended up just getting a standard sort of 12 ounce soda bottle. So how much initially in that the first sort of six months of 2016 would you estimate you invested in equipment like was it that expensive? Was it really expensive or was it relatively cheap? I think it was it was relatively cheap looking back and I think the pallet of bottles was probably the most expensive thing that we bought, but the equipment that we had purchased was maybe a couple thousand dollars. Yeah, I want to, I mean, how did you, I mean, is at that point you need some money? Did you go around asking people to invest in your business? Yeah, so I went to my sister who's always been a really big believer in me and she ended up giving us $30,000. My dad gave us $30,000 and then we put $30,000 in of our own money. So basically a total of $90,000, which was everything we had. Yeah. All right. So tell me about the name that you came up with and and and even the sort of the look of it, what then because you called a mother beverage, right? So that was the first thing. Tell me about that name. Yeah, so we named it mother beverage after the mother of vinegar. So there's just like floaty stuff in the bottom of vinegar, kombucha has something similar called the scoby, but in vinegar, it's called the mother of vinegar. A lot of people are like, oh, it's because your mother yourself, no, not really, but we do love calling it mother beverage at the time. All right. So you, by the summer of 2016, you are ready, or I guess maybe even earlier than that, you're ready to kind of debut this at a farmer's market in Dallas. And tell me, tell me Allison, what was the plan? I mean, you would just set up a table and put them there and what was the, what was, what were you selling people? What were you, what was the promise that you were making that it was going to make them feel better? Like it made you feel better? Yeah. I think a little bit of that, but the beauty of apple cider vinegar is almost everybody's heard of it. There's not a lot of education around that as an ingredient. So people see it. They've either tried it, someone's told them they need to drink it, or they drink it for years and they do it every single day like you. So they like immediately got why we're doing it. And so I didn't really have to sell like my story. It just was an easier way to consume apple cider vinegar and people just related to it and got it right away. Yeah. And you keep on talking about this plan, there wasn't really a plan. It was just, it was just one foot in front of the other. And this is also at the time where kombucha is on the rise. And so as we think about sort of marketing or positioning ourselves adjacent to kombucha, it was a beverage or a product that had similar attributes to kombucha, but with less sugar. Right. Like a sort of a soury taste that people were already kind of used to. And so when you put like you set up a table at the farmers market in Dallas, I mean, who was buying it? Who, I mean, was it just curious people who were like, I'll try this and or what? Like, who were they? The farmers market is a place of discovery that people are more willing to just try things that they typically wouldn't do. I think that people going there are seeking those type of products. So some people actually did not get it and they thought we were crazy and they didn't buy. And then we get the people immediately got it. And I will say we were selling out like every week we would make it, we would sell out. The next week we would make, you know, that and a half, we would sell out. So we were like, okay, something's working. And how much was a bottle? It was pretty expensive. It was $4 a bottle. $4 a bottle. $399. $399. I mean, how quickly, because a farmer's market was once a week, right? I'm assuming. Every Saturday. All right. Tell me the story. Whole Foods buyer. Whole Foods based at Boston initially. Start Boston now, of course. And a buyer comes to the farmer's market. Mm-hmm. Kelly Landr. What does she say to you? Does she say? I mean, was it at that moment where she says, would you guys be interested in coming to Whole Foods? Yeah. And it's not as simple as that, right? She gave us her card and said, there's nothing like this in Whole Foods. You guys have to be in Whole Foods. But we didn't have good labels, we didn't really have nutritionals and done the testing to where you have to be at the level to be in a grocery store. One, you can't make it in your house to be in a grocery store. So we thought, oh my gosh, we got this card. We made it. Little did we know. We weren't even on shelf till 10 months later. Yeah. And she was offering you what, one Whole Foods or two Whole Foods or what? No. We thought it was national Whole Foods. She was offering you a few Whole Foods stores. We didn't even get into the planogram. So we, from the moment we got the card from her, we at that point went and got a lease. We opened up our own manufacturing facility thinking we were going to be nationwide Whole Foods. For them to say, no, no, no, no, you don't even have Dallas. We've given you a license to go hunt for it. And what that means is you actually now have to go store to store and sell in your product to every single store at that time, and it was 14 Whole Foods, Dallas Fort Worth. And so we went all in thinking, oh my gosh, we've made it. We're going to get all this. Little did we know. We didn't get anything. It was still had a lot of work to do. What we come back in just a moment, Allison and Stephen are told that they're branding totally socks. Stay with us. I'm Guy Roz, and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Roz. So it's around 2016, and a buyer at Whole Foods has encouraged Stephen and Allison to ramp up production of Mother Beverage. And you'd think that they'd find a bottling plant to partner with, but they don't. They end up renting their own warehouse because no co-packer wants to work with them. So there was one big hurdle. We were totally unpassurized. We wanted to have raw, unfiltered, apple cider vinegar in our product. And so there's many reasons why come manufacturers don't want to do that. There's many reasons why even craft breweries who were smaller and, you know, were more willing to maybe do something at a smaller scale for us, were unwilling to do it. You know, raw, unfiltered, apple cider vinegar unfiltered. You've got the floaty stuff in there so we can get in their lines. It could potentially contaminate other products of theirs. The raw factor, it's got a cedar factor in there. And so that can cause their beers to sour. That can cause other issues in other products, as I mentioned. And so being unpassurized, being raw, and being unfiltered, they just weren't coming in new factors that were honestly willing to take us on and take that risk. But really for this first initially run at Whole Foods, maybe even the first year or so, sub being made by hand, basically. Correct. You were like pouring vinegar into vats, and what pouring fruits into the vats. Like what, tell me about the process of working in the warehouse. It was kind of crazy. Remember being on the bottling line, and it's really difficult to bottle a carbonated drink. It seems like such an easy thing. What do you think about it? You go to the soda fountain. What happens? You pour it in your cup. The bubbles, you know, foam's over. It goes everywhere. And so we were just like, we were racking our brains, like how, like how does this, how does this happen? And it was really interesting. It was probably one of the most frustrating sort of experiences and journeys for me to like get the carbonated product into the bottle without it foaming over in a timely manner. Yeah. I mean, how were you doing that? It was like, it was like a soda fountain. Like you go to a burger place and you've got your soda fountain and you just put your cup under it. Was it a version of that, but with bottles? Not like a forehead filler, right? Like a professional forehead filler where you put all of the glass bottles underneath it's supposed to suction it so tight that you fill it and the air doesn't get in, it's supposed to fill. And you had that. We did. We had two of those. So we could do eight bottles at a time. We had two lines set up and we would just try to figure out a way to get this, but it would work for like 20 minutes and then not work for three hours. And we would be there for hours, just filling product to maybe get, you know, a couple hundred bottles out the door. It was, it wasn't scalable. And I would say that was the hardest part of the business was the filling, the making it. I mean, you know, the, the steeping, the quote unquote syrup was the easiest part of it. All right. You're sort of working on this for many, many months and now it's time to go into Whole Foods and, and did you start with just one Whole Foods in Dallas? So we, we were able to, to sell them in two. I think we got into maybe eight of the stores from the beginning. Correct. But the beauty of getting into Whole Foods opened up a whole their avenue on the distribution side. So you can't just self distribute to someone like a Whole Foods. So opened up UNFI, which then opened up other accounts. Unify is a distributor and they required you to work with a distributor like Unify. Yeah. And it's hard to even get into them. It's like the chicken or the egg. Like get into Unify. If you don't have a retailer, if you don't have a retailer, you can't get in. So it was kind of nice for us right from the beginning to kind of have Whole Foods that they took us in. But then that opened it up to be able to get into other accounts around the Dallas area. So we got into the Royal Blues of the world, which is like a Dallas grocery store. We were able to get into some natural grocers and, you know, just local sandwich shops. And so we had a good presence in Dallas, not just the 14 Whole Foods. And when you were in a case, when you started out Whole Foods, right, you got a distributor because that's part of the requirement. How did you then get people to be aware of it? Would you go in? I mean, by the way, you're also the two of you also have a baby, a brand new baby at home. So tell me what you were doing. You were going in and setting up a table and just asking people if they wanted to try this new product. Anything. Anything honestly. We were doing Instagram posts, gaining followers, I think we had like 10,000 followers on Instagram. We had a little website. We were selling the product on our website as well, which was really difficult if you think of how do you ship glass bottles that are liquid through the mail. We did that. I mean, it was just like anything and everything, but we didn't do any paid media or have any know how to do anything like that. We also had no money. Yeah. How about employees, Stephen? I mean, I mean, both of you guys are running this business together. And then I have to assume you could physically do everything and load the bottles into the car, into the cases and all this stuff like did you hire temporary people or did you start to hire like full-time people to help? Yeah. So we had, yes, we started to hire folks that would manage the farmer's market stands on the weekend. And then I hired a crew of maybe six or seven sort of production members. They were, most of them were 10.99. There was a few W2 employees, but they would, they would do everything. So they would come in. We would probably work nine to 12 hour shifts, five days a week. Yeah. But we weren't paying ourselves. So keep in mind, quote unquote, yes, we put our jobs. But Stephen found a job that he could do at night to pay our mortgage. So he was still working a second job, basically, at this full time. Yeah. It was really what allowed us to reinvest everything that we were making at the time. All right. You're, this just sounds like a crazy life, right? Because you are trying to expand the business. You're trying to get people to buy the product for, how was it doing? I mean, was it a hit at whole food? I mean, hit is a relative term, right? Because you, you know, it's not like all of a sudden, you know, there's a windfall of cash, but was it successful more or less at Whole Foods right away? Yeah. I honestly think we had some, some really great traction, right? It wasn't at this massive scale, but every week, every month, our sales would continue to increase. We would get more notoriety. We'd get better shelf placement in Whole Foods. We would move from the dry shelf to the grab and go coolers at the front or we would get an end cap or something like that. And so, you know, we were starting to really see that progress and people started to notice so much so that there was a segment called Shaping DFW, and ABC actually reached out to us. They said, I love what you guys are doing. I really think that you guys are in the forefront. You're helping to really shape this new wave in DFW, Dallas Fort Worth area, of better for you, sort of health and wellness. It's a local TV, like news to channel. Yeah. It was a seven minute segment. Honestly, that was a really beautiful piece for us to be able to take that and say, hey, this is going to be on the networks, give us more shelf space, give us more Whole Foods, right? And so, I think the category review was coming up and they had basically accepted us into more of quote unquote Whole Foods, what would be called like a global rollout where each individual region has to accept you. And I think we ended up getting into seven regions across the US. So obviously something was working. And this was like the next step where we're like, okay, we're going to go into nationwide. We need money. And so we kind of were looking at each other like we need to figure out manufacturing. We need money. It was crazy. What kind of sales were you doing in the first year, like over half a million dollars? I wouldn't say it was that much. I think when we went under Shark Tank, I think it was, we had done about a half a million dollars in revenue in the previous, I don't know, 12 to 18 months, something like that. So we were putting together, like, you know, a couple hundred thousand dollars. All right. So the product really launches in 2016. And I want to talk about Shark Tank. Is this happens? Your episode appears in 2018, I don't know when you filmed it. Tell me about the Shark Tank strategy, because clearly this was a strategy to get attention and maybe to attract some investment and to kind of supercharge the brand. How did that? Was it a conversation that the two of you had that you thought, "Hey, let's try our hand or Shark Tank." No, we actually had someone approach us who was a fan of the brand, wanted to invest, and it was, he was going to give us around $200,000 and had no resources. He didn't know anything about CPG. He had no employees, no retailer connections, nothing, and it just didn't quite sit right with me and Stephen. He just had money. He just had the money. And I think, like, as any entrepreneur, the saying of, like, don't take dumb money was always something I think most people know, right? That's not anything new. And I was on my phone, I think, like, two days later, after him offering this money, and I saw Shark Tank was coming to town, and they had open casting calls in three days. So we went and stood in line amongst hundreds of other people. It was an eight-hour ordeal, and we just pitched our hearts out, and immediately after pitching our product, which you only get two minutes to pitch elevator pitch, they were like, "This is a fantastic product. You guys are definitely going to make it to the next step." And then it goes dark. And you're like, "We're going to make it on Shark Tank." And then you don't hear anything for a few weeks. And then they're like, "Oh, hey, fill out this paperwork." And then they go dark. And it's just like a very long process, but at that point, even the thought of getting on Shark Tank, we did tell that other investor, "Hey, we have to see this through and see if we can get a deal on Shark Tank." And so we said no to him. And so you find out that you are going to go to LA and appear on Shark Tank. And usually, the way it works, based on conversations we've had on this show with other people who've been on it, is that you film it. And then a few months later, it airs, and you're not always sure whether you're going to be on it. I mean, usually they kind of give you a heads up that you're going to make it on. But they do cut people out. I guess 2018, you both fly out to LA to film your episode. So I was pregnant with our second. I was three months pregnant with our second when we did that elevator pitch. And then it basically took six months for us to go through that process for them to finally say, "Hey, you guys are going to be on Shark Tank." So I ended up being nine months pregnant on Shark Tank. And the thing is they wanted us to be matched up with a certain shark, right? Then to the day the show wants you to be successful. They want you to get a deal. And so through the ups and downs and learning through all that, we fly out to LA the night before they tell us who our sharks are. And then we go in the next day and we pitch. You go on, you go on, I know that you don't normally meet the sharks until the screen opens and you walk on stage and you start pitching. And one of the sharks was a guest shark, Rohan Osa, who had been involved in branding around Coke for Coca-Cola products and he was involved in buy and he had been involved in other, I think, vitamin water. I can't remember exactly what. Tell me a little bit about, so you make the pitch and people can see it. And did you feel like, I guess sometimes they're not always so nice. Did you feel like they were nice to you guys? No. Mr. Wonderful called us an apple cider vinegar roach. They didn't get that we were an apple cider vinegar drink, like what were we doing? Who are we? Someone else that was on, was Bethany Frankel, who kind of has some beverage experience as well. And we're really excited about her, even though she was screaming at us the whole time because we made her take a shot at apple cider vinegar and she wasn't too happy about it. And they didn't like it? No, they didn't like it. Orange is also very difficult. It's very capital intensive. You don't, if you don't know how that world works, it's hard to find the right investor and honestly, the right investor for us was Rohan Oza. Was it clear to you right away that he was interested that his questions were different from the others? You know, it's hard to track that on whether or not he was asking serious questions. But I also know sort of looking back, he was definitely playing it cool, right? He was definitely not trying to show his cards. You know, he leaned in and he was basically like, you know, the product is great. You know, he's like, I'm interested in this thing, but he's like, it's going to cost you a lot more than what you're asking for. What were you guys hoping for? I think we initially went in there asking for $400,000 in exchange for 10% of the business. So you were valuing your business at $4 million? We knew it was high, but I mean, we had worked with the producers. You should basically say, hey, listen, like you can't go and ask for the number that you think you're going to get. You got to start a little high. And so ultimately, I think we ultimately landed on what I think was a fair valuation and definitely gave Rohan enough skin in the game to be energized and excited about being helpful. So looking back, that's not normal to walk in and ask for that amount of money. Usually people ask for 50, 100, 200,000, it's a lot easier for a deal to get done. So us walking in and asking for $400,000 is quite high. And so he did come up to the 25% and I'll be honest, we looked at each other and we immediately said yes. Because we just knew he was the right partner for us to really take it to the next level. So when he offers you for a grant for 25% of the company, but the other thing, I guess, is that Rohan says to you guys, hey, this has to, you need a complete overhaul, a complete rebrand. Tell me about what he said to you and how you react it to that initially. He basically said, look, you have a fantastic story. You have a fantastic product, but your branding is shit. And honestly, it didn't offend us because we knew we had spent so much time on the product. We'd never thought about the brand or the marketing piece of it. And it was such a piece that we were so desperate to kind of figure out that we were like, yep, let's do it. We were like, let's change the name. Let's do the whole rebrand. We were so here for it. And what did he say needed to change everything? But we were okay with that because we had already decided that we were going to change everything. We wanted to change the name, the positioning. At this point, it was Apple cider vinegar drink. And he was like, no, this is so much bigger. This is soda. And at the time, we were like, well, we don't know for soda. That's a big word to chew on. That's a huge category. So let's find this functional soda space, which is like a whole new category that no one had really been able to figure out and kombucha had tried to take on soda, sparkly water, had tried to be an alternative to soda. No one had quite figured out this disruptive soda space, right? And so we're like, let's play adjacent to soda and be better for you, soda. So we took about nine months and we did a huge brandy and exercise, like what is, if we're a car, what kind of car are we? If we're a girl at the party, are we the cool girl? Are we the girl dancing on the table? Like what is the personality behind us? Are we approachable? Are we funny? So we did all of this work. It was me, Steven Rohan and Rohan's partner, Stevie. And it was just us four for about nine months. What are we changing the name to? We landed on Poppy, which is a playoff of soda pop. We weren't sure if we were going to do white cans or colored cans, right? Because white creates this like healthy halo. It's clean girl aesthetic, it's, you know, clean and fresh, whereas color kind of screams flavor, it screams fun. And we wanted to approach health and wellness from a fun lens versus a niche better for you lens. It's probably one of the bigger disagreements at the beginning. Me and Rohan were leaning more on the white side because I was like a purist. And then Stevie and Steven wanted to do colored cans. We ended up printing the cans and we took them to the grocery store and we placed them on the shelf and we stood back and we were like, which one looks best and hands down. I will say I was wrong. Colored cans were the way to go. It just popped off the shelf and no one was doing better for you as color at the time. So okay. I want to get to that. But in this long period of time between the time you signed an agreement or got Rohan as an investor and you relaunched it, you were still selling mother beverage. But I'm assuming when the Shark Tank episode came out there was a lot of interest in mother beverage. We did have a spike but on the back end we started to do road shows at Sam's Club. The business continued to grow, so we really had to do both. We had to rebrand, reposition to all of that great work while keeping the core business in steady state. We still had bills to pay. We still had a warehouse. We still had overhead. Well, we went through all of that stuff of Whole Foods had taken mother from the 14 Dallas Whole Foods. We were in the local shops. Now they've accepted mother beverage into seven regions of Whole Foods. So then we basically had to go back and say, "Just kidding, we're changing the name. We're changing the packaging. Will you guys still take this?" And so there was a lot of risk to that to basically have the grocery store that kind of gave you your start saying like, "We love what we did but we're going to give you guys something completely new." And then we realized like, "We're going to call ourselves Soda. We can no longer be in glass bottles. We 100% have to be in 12 ounce Soda cans." And so we had these manufacturers set up and basically what we were like two days away from our renewal and you had to call them and basically cancel the whole PO. It was quite a crazy deal. For the glass bottles. Yeah. Yeah. We ultimately decided to go 12 ounce Soda cans, colored labels. But the tricky part about that was is we had a national sprouts roll out. We had a, you know, almost national roll out at Whole Foods with no manufacturing. So we basically had six weeks worth of inventory to basically sell through our mother beverage keep our current customers happy. While setting up a new supply chain with new co-manufacturers learning that whole thing within six weeks to get ready for a launch. When we come back in just a moment, Poppy's big launch in March of 2020 is completely derailed. Stay with us. I'm Guy Raaz and you're listening to How I Built This. I'm Guy Raaz. So it's March of 2020 and mother beverage is rebranded as Poppy. And it's ready for its maiden voyage at one of the biggest trade shows in the country. Expo West in Anaheim, California. We were using this temple event as being our launch, right? So we had spent a lot of our money on, I think, almost $90,000 on building a booth. You know, you have to pay for the space. You have to get product out there. It was like our big bet to come out and meet retailers and really put Poppy at the forefront of everyone's mind. And we ship out to Anaheim and we are one of the brands out there, half of the people don't show up because I think on our flight to Anaheim, there's 10 cases in the U.S. And we're like, oh, this is going to blow over in a week, like we've put a year into this and, you know, years passed with mother, like we're doing this. And so we get out there and then a day into it, they canceled the entire thing. And at that moment, it was just so devastating for us because we're like, oh, goodness, this was our moment. Where do we go from here? We pack up the booth. We get back on our flight and on our flight home, there was hundreds of cases, right? We just had escalated really quickly within COVID. And we were so thankful that we had loaded in a ton of product into Amazon grocery stores basically told us we're not going to cut you in. We're more concerned with putting toilet paper on the shelf. So we kind of just focused on Amazon. We didn't do anything on our own website for the first little bit. And it was the first time everyone in the world was thinking about their health and wellness. We were thinking, hey, how can I pantry load on things that are shelf stable and that they taste good? And so we just really leaned into that thinking for the first, you know, month and a half of business before everyone kind of started figuring out this whole COVID thing. And I mean, imagine initially you were really nervous, you were worried. We were devastated. I think, Allison and I were talking about this. I think one of like the entrepreneurs are slightly delusional, right? We don't have, we're delusional optimists. And so I think it was, it was, we were in a good position because we didn't have a ton overhead. We didn't have a ton of employees to support. You know, we were, we were a really lean team and we were growing, right? And so we didn't have a ton of things to support. And so it really left us in this opportunistic situation where we were able to be agile and disruptive in our approach to market and how we interacted with consumers. There was a lot of pressure, but it honestly like forced us to, to think really outside of the box. All right. So there's an update on Shark Tank. I think that there's an April of 2020, just kind of an update on what's going on with your, your brand and that I think, I think instantly you get boost, right? And on most of your sales at this point are through Amazon direct to consumer. Yeah. So we were mostly on Amazon and then in April grocery store shelves were starting to do the load-ins kind of had gotten their feet underneath them. We're kind of starting to hit the retail shelf and we had filmed an update on Shark Tank about pop being the brand and it aired Friday night, second week of April and it just blew up. So we hit number one on Amazon's hot new product list. We're doing like 3,000 on Amazon quickly over the next few months, doing 250,000 on Amazon a month. It just like absolutely blew up our business and really it was really eye opening for us to have a national commercial month too, basically. National commercial is a Shark Tank basically, yeah, free commercial basically. You know, so this was really the big spike in our business and as Allison said, we were thankful that we had onboarded Amazon. We had shipped in what we thought was a lot of product into Amazon. I think we honestly sold out of that in like the first couple hours after it launched. Tell me about, I mean that, you know, and we've heard this before which is a Shark Tank episode can really boost sales but then it can slow down. Then things can slow down and people stop ordering. I think for you guys what really helped in some ways because it's still COVID and people are still not, you know, people are going grocery stores but not, you know, it was a different experience. I think for you guys, social media really became a lifeline, especially TikTok. Tell me a little bit about how you started to use TikTok and yeah, how did, how you used it? Well, for us at that point, I remember at the update Shark Tank, there were some TikTokers dancing in the Whole Foods that were filming in and some, one of them grabbed my phone and downloaded TikTok on my phone and I remember getting on it and playing with it and it really was no brands, no brands around TikTok at this time. A lot of people were introduced to it through COVID and kind of were bored at home and started creating. So it was like this creator platform and I just in my head kept thinking there has to be a way to market to people on here. There's hundreds of thousands of people now, you know, millions on there and it's free marketing. So I remember being like you guys to talk to the next wild, wild west, we got to do it. Rohan and Stevie, including like Stephen, he was like, I don't know, sure, like no one really got it and I just was like, okay, I'm going to get on. I'm going to spend my nights and my weekends and I'm just going to start posting. So I started doing recipe videos. I was dancing. I was doing transition. I had my kids running around in it. I made Stephen be in him with me and I was just trying literally anything and honestly, one night I sat down on the couch and I just told my story. I did it in one minute or less of, started this in my kitchen, got a deal on Shark Tank. It's five grams of sugar, it's apple cider vinegar, it's this, and I posted it and went to bed. And when we woke up, we'd sold $100,000 on Amazon that night and everyone started calling. Where did this fight come from and no one thought to look to TikTok? And so I was like, you guys, we went viral on TikTok. And then everyone's eyes were opened from that moment. That's amazing. I mean, the growth of the product really just kind of explodes after the launch, the rebrand of the launch in 2020, you know, by 2023, it's 100 million in sales and then, you know, it's like, you know, the next year, I think it's 500 million in sales, I want to, I'm curious, were you, were you thinking that, that regular soda was your competition or did you think that sort of better, quote unquote, better for you drinks or less sugar, lower sugar drinks were your, your, your competition? Look, I think we created a brand new category. So when we had Poppy going to grocery stores, they didn't know where to put us. So in the early days, they put us next to sparkling water. They put us in the enhanced water set next to the buys and the vitamin waters and the coconut waters. You know, just a little bit of a higher price point because if you were to put us at that point with the product that was kind of not quite proven, not a lot of consumers knew about it and you put it at $2.50 can next to a 99 cent soda can, there would have been a disconnect. So for the first few years, we worked with the retailers figuring out what is Poppy and what category does it live and even though on our end, we always knew our mission was to revolutionize soda for the next generation. And so as we grew, as our awareness grew, we slowly started to carve out space within the soda sets. And now we have an entire new set called the modern soda set in retail and in grocery stores that did not exist five years ago. Yeah, and I think it's really interesting. It goes all the way back to the positioning work. We were the first ones in the functional, you know, sort of modern soda to actually call ourselves a soda. We call ourselves a prebiotic soda. We were the first ones. And at that point in time, it was crazy because soda was at the pinnacle of a dirty word, right? It was sparkling water. It was like, ooh, who drinks soda? Like, that's so bad for you. Like, why would you ever do that? You know, so it was really a bold decision for us to put prebiotic soda on the front of the pack. And as Alison said, I think it was just building on building year after year, month after month, as we as we gained a bigger audience. I'm curious. I mean, better for you is a tricky word because, you know, a lot of people clean in other other terms that are, they're not, you know, sort of technically legally sort of defined. But obviously, Poppy has considerably less sugar than a can of coke, right? A can of coke has what, 25, 30 grams of sugar, maybe more, Poppy on average, I think it's five grams of sugar, and it's got a little bit of two grams of fiber. So how would you identify the people who were buying it? Were they buying it because they felt like it was healthier or were they buying it because they liked the taste or, like, what did you start to find out, like, about the people buying it? Were they buying efforts for what it's perceived functional benefits or for the completely different reasons? Well, basically, we were able to lean into the brand versus, hey, drink this because it's better for you. Nobody likes to be told to do that. They want to, we were intentional with the consumer journey. We wanted someone to see the can and be like, that's so cute. We wanted them to sip it and say, wow, this taste amazing. And then we wanted them to flip around and read the nutritional and say, whoa, this is better for me too. So when did it start to become clear to you guys that, and I'm assuming when Rohan got involved, part of the conversation was, well, there's got to be an exit here, right? Maybe it's an acquisition, or we go public, or something like that. And I imagine that once you hit 500 million, maybe even once you had 100 million in sales, you start to get interest in potential acquires. Yeah, I think we've had one of the fastest journeys in sort of beverage history. We grew triple digits year-over-year until we sold, once we rebranded from Poppy. I think that we were in a really interesting period of time. We were operating in a COVID supply chain. Can's now cost 11 cents. We were paying 40 cents for a can during COVID. We were shipping containers of essentially air, empty aluminum cans all the way from China just so we could fulfill the demand. And so I really think that that was when we thought that we had something as far as an acquisition goes. But I think every year, we just continue to see the business more than doubled. I mean, honestly, from day one, we knew we were going to sell. Yeah. So basically in the world of beverage and in particular soda, you have two avenues. You can sell to a big strategic or you can go IPO. Well IPO is great, but you don't gain distribution partner like Pepsi. So for us, we, let me just give you an example, we are the official soda of the Lakers and we're not allowed to be sold in that stadium because of contracts. So now us getting bought by Pepsi, which is incredible. We now can go from 50,000 locations to 350,000 locations, right? Because they have massive distribution. And I think it's not a secret Pepsi acquired poppy in March of 2025 for almost $2 billion, which was just incredible. I mean, between the time you launched and March of 2025 was essentially five years. And it's interesting. When we first started out, it was just us and our story and poppy for the first few years. And then a really big tipping point for us was doing our first Super Bowl ad, where we really gained that cusp of we said we were a soda, the future of soda is now. We kind of put like our flag in the ground in our ad, we said soda 17 times and that we were the future of soda. And after coming out of that, our awareness tripled overnight. We started getting some interest from the strategic, which was always the goal. And we kind of like went from mom and pop brand to challenger brand to establish brand, which is real. And we did it really quick to your point in five years, which is absolutely unheard of. You know, we thought we were going to double the business from 22 to 23. And instead, we forexed the business. And in large part, it was because of the Super Bowl ad. We planted our flag and we said we're soda. And we had also been seeing that with how consumers were repurchasing the products and the retention that we had. But it was really like our big coming out moment. When Pepsi approached you with such a, I mean, approach to a company with such a huge offer, I mean, it must have just been mind blowing to imagine that that was going to be the outcome. Honestly, when you go through these things, a lot of people don't know is you spend over a year. It's almost like a dating process. It's not like they just give you an offer. And like two days later, you say, yes, let's do this. And their motto, which consistently is what we're still hearing is let popy be poppy. And I think as a founder, when your biggest fears going through that is that the brand will lose itself for it'll change. Like I have all those fears, our consumers have all those fears. And Pepsi just, I feel like the big strategics they've done it wrong before. And they didn't want to do it wrong with poppy. And so we just kind of like got that from them. And so it was stress. I've never felt sad, happy, stressed, excited, like all within the same day, multiple days in a row for weeks, right? It's a toll. It does like a tool on your body, definitely going through something like this. I'm curious, as you were building the business, right, in the early days, you were a couple, right? And a lot of times, we've on this show, you know, if I've asked people, would you work with your partner, and there are different kinds of responses. But I would say, and I work with my wife, but I would say a lot of people say, I'll never work with my partner. I can't. You know, it's too complicated. I mean, were there ever moments where your business relationship created tension, or do you think just your personalities are just naturally matched to make the business side work, too? Early on, when, so okay, early on, when we were really early in mother beverage days, and it was really hard with working multiple jobs, having a family, well, scaling a business, I remember you skipped really upset when Stephen wouldn't take time out of the day to get me flowers. Or why do I not get chocolate on Valentine's Day? And we finally sat down one day, and it was just like, we got a pick, right? Is it marriage, kids, or the business, and what do we, like, we, this is killing us. And I honestly, at that moment, we looked each other and said, our marriage is great. We love each other. We want to be partners. Let's focus on the kids in business and just know that we're good. And once we kind of let go of that expectation, a lot of the pressure went away. So then when he did get me flowers, it was extra special. It wasn't because of a holiday. And so that was really early on in just like understanding that it was okay and that just to show up where we could. And I wouldn't do it again without him. Yeah, absolutely would do it, would do it over again. I think the biggest thing about Allison and I think why we work is because we're 100% committed at all times. It was really hard. Like I said, there was dark days. We didn't have money, like, we didn't have, we were technically unemployed. We weren't paying ourselves a salary. We didn't have health insurance. And I think that we've done the best that we could and still very much in love with Allison and very much excited to do this in the future together again. When you think about the journey you took, you know, you just, you know, this was really started in 2016 and here we are, 2025, and really started in 2020, we branded. And it's been a massive success. I mean, how much of that and your journey do you attribute to the work and the grind and how much do you think had to do with luck and timing and circumstances, people being open to this product today? Steven? Yeah, there's a quote that's always top of mind for me. The harder I work, the luckier I get. And so I really think it was a recipe that required all of it, timing, luck, hard work, grit, passion, intensity, it required all of those, all of those elements. Yeah. And for me, I really struggle with saying it was luck because we worked really hard. I do think there were a lot of doors that opened that maybe a lot of people would say were really lucky, but I just know all the hard work that went into that. I think it was us knowing where to push, where to take the help, and kind of where to step back. It was a really big piece in allowing other people to come in and help, right? I think that it's a lot bigger, like Steven said, of this once in a lifetime generational brand. Not a lot of people can say that they created a product that our kids and grandkids are going to know as soda. And I just think that's just so much bigger and cooler than saying we got lucky. That's Allison and Steven Ellsworth, the co-founders of Poppy. By the way, Allison is heading back to Shark Tank once again for its new season, but this time, she'll be a shark. She's one of just two former contestants to ever appear in that role. The first one was also a guest on this show, Jamie Siminoff of Ring, which is a great episode, by the way. Hey thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, please sign up for my newsletter at gyros.com or search for gyros on substack. This episode was produced by Ramele Wood with music composed by Ramteen Arableui. It was edited by Niva Grant with research help from Alex Chung. Our engineers, Patrick Murray and Jimmy Keely, our production staff also includes Casey Herman, Chris Messini, Carrie Thompson, Catherine Cipher, Carla Estevez, Sam Paulson, Andrea Bruce, and Elaine Coates. I'm Guy Raaz, and you've been listening to How I Built This.