Popular investment wisdom tells you to put your money down on a company whose products you and your friends use, and the same is true for a business idea. Looking to start their own business, Brian and Cynthia Allen of Lawrenceville landed on an idea that came out of their experience as parents of two-year-old twins – a flavored water product they hope will become the Glaceau Vitamin Water of the toddler set.
The Allens’ twin girls, Emily and Lyla, were fascinated with water bottles, grabbing at them while still on all fours, and the parents were decidedly underwhelmed by the sugar-heavy, impossibly messy juice boxes on the shelves. "When they got to be the age of drinking juice," says Brian Allen, "we looked at juice boxes and were appalled at the sugar in them."
Like most of the parents they knew, the Allens watered down the juice they gave their kids. And, after having considered and discarded a string of potential products for their own business, this gave them their idea.
They were sitting on the beach last Labor Day weekend, trying to keep their daughters hydrated with sticky juice boxes, when they thought of a product that they knew immediately was "it" – lightly sweetened, flavored water for kids – with 6 grams of sugar per 8 ounces rather than the 24 to 42 grams in a typical juice box of the same size.
They dug into their pockets, developed a business plan, organized operations, and are hoping that Bot beverages will be on supermarket shelves in the Princeton area by the end of summer.
Cynthia, known as Cricket, Allen, the president of Bot Beverages, brings in 14 years of expertise in marketing, design, and positioning, including nine at the ad agency in New York where she will continue to work full time (which includes three days a week working at home). Brian, the CEO, handles sales and operations, sandwiching his work between gigs as an actor in television commercials.
Since that day last September when "the lightbulb went on" they have gotten their business to the point of launching a small test market in the Princeton area, in order to "tweak things" before going to a larger scale of production.
In January, they visited their ad agency in Colorado, owned by a friend Brian has known for 20 years. He connected the Allens with Greg Stroh, a member of the Stroh’s beer family and cofounder of IZZE Beverage Company, which makes sparkling juice, to serve as an advisor about the beverage business. They have a second advisor, Andrew Peloso, sharing lessons from his startup experience in his company, Onclave (U.S. 1, April 25, 2001). Peloso is married to a woman Cricket has known since preschool in Princeton.
"Their advice from the start," says Brian, "was: `you are in sales and marketing; you should subcontract everything else out.’" And they have done that: they hired out the caps, the bottles, and the labels; these get shipped to the bottler, who filled the bottles, glued on the labels, put them in packages, loaded it all onto a pallet and then shipped it.
So why water? "The water category has exploded over the last 10 years," says Brian, with adult flavored water and vitamin water. But the focus of Bot Beverages is kids, from infants through tweens. "Kids should drink water," he explains, "but we wanted it to be somewhat fun. They are kids, and they want flavor and something sweet. It’s a great way to get kids to drink water."
And medical sources confirm the value of water for children. The Yale-New Haven Hospital website’s Nutrition Advisor has a page titled "What’s To Drink?" that touts the health values of water. The site claims it is the optimal drink to replace fluids after sports activities; sports drinks aren’t usually necessary unless athletes have exercised for an hour or more. Soft drinks with caffeine act like diuretics. Juices, although a good source of vitamins, are also a great source for concentrated calories. The last paragraph begins: "Do you get bored with plain water? Consider one of the many flavored water products on the market."
Much of the Allens’ early research involved surfing the Internet and talking to doctors. One thing that stood out was the rising incidence of type 2 diabetes in a population where children are increasingly obese. Even items like yogurt targeted to children are highly sweetened, Brian observes, adding that he feeds his twins plain organic yogurt, which has only a fifth of the sugar of the baby-targeted products, and they love it. And he reminds people: "People’s palates form when they are children, and we are spoon-feeding our children sugar. No wonder there is childhood obesity."
"We’re not saying we’re holier than thou," says Brian, "but we saying you can have moderation and lightly sweetened beverages that kids will like and parents not feel guilty giving their kids."
Early on they also did an anonymous, online survey of 75 women: "It helped us evaluate what the need and temperament was for a product like this," says Cricket. The responses provided information about what customers were looking for in children’s drinks and whether they were satisfied with existing products, the sugar levels in their children’s diets, what they feed their kids, desirable design possibilities, and their child’s favorite flavor.
Their next step was to contract Allen Flavors Inc. in Edison (no relation) to develop just the right tastes. It was a back and forth process. Brian and Cricket made their requests, the company put together formulas, and then they would do taste tests on their own family, friends, and friends’ kids.
But when it comes to taste, things are not necessarily what you would expect. The first flavor they tried was apple, because their survey had put it at the top of the list, but it just didn’t work in flavored water. So they switched to No. 2 – grape – which is also Brian’s favorite. Their other two Bot flavors are berry and orange.
They also had to chuck calcium, which they had included in their first order. "It wouldn’t work from a flavor perspective," explains Brian. "The calcium gives a chalky taste and almost leaves an aftertaste, like tannin in red wine." They do add vitamins, but only a limited number; they believe that kids should get their most of their vitamins through what they eat. Bot is fortified with B vitamins, which are good for building muscle reflexes, as well as A and E, but they could not add iron because of its strong taste.
When it came to design, the Allens also looked to something simple, sleek, and organic. "We felt we could come up with something kids would identify with without being over the top," says Brian. He describes his own experience walking down kids’ drink, snack, or food aisles, with "things screaming from shelf." As a parent, he thinks, "They must have tons of crap, sugar, and they are probably very bad for you."
Their goal regarding packaging was a product that "stood out on the shelf but was not over the top." Their bottle design, therefore, is simple and esthetically designed. Brian explains, "We don’t want the brand to scream `pick me, pick me.’"
The agency came up with three simple, lined characters with faces, representing Grape, Orange, and Berry Bot (they will probably add more flavors later). They told their agency what they wanted the brand to be about from a design perspective, says Brian, "made by parents for parents with kids." Cricket describes the characters as humble and cartoonlike, with endless licensing possibilities.
Cricket continues, "We saw the product as something that would appeal to kids, and we believe the characters will be iconic to the brand, and we thought the packaging itself would please parents." The look, she continues, is, contemporary and sophisticated and uncluttered. Brian agrees: "I’m happy with the way the packaging came out. It looks like a premium product, with color and character."
Cricket sees their product aligned with a more general trend in children’s products, where the parents are considered in both design and function. "We borrowed what is going on outside of the beverage category," says Cricket. "Artists and designers are reinventing things for parents to use because it looks better in their houses and is more esthetically pleasing. This went into our approach for branding."
Look isn’t the only thing that is important to Brian and Cricket. Convenience is also critical. "I can’t hold a juice box without it spilling all over me," says Cricket. And, of course, sippy cups are regularly upended. As a result, they are using a resealable, molded sport cap, with a valve to prevent spillage. And they selected the eight-ounce bottle because it fits easily into a lunchbox.
Another part of the product’s design is its name. The couple kicked around several ideas, one of which was the relatively obvious Baby Springs. But then they remembered that the first word the girls had said – right before "Elmo" – was "bot," for their bottle. "What about Bot?" they thought. "It sticks and is short, and we liked it right away," says Brian. They immediately trademarked the name and ran it by their agency, where it got a thumbs up.
The first production run comprises 3,300 cases, with 1,100 of each flavor, and they have already learned a lot: "From the production point of view, things have to change," says Brian. "It’s too labor intensive and too costly." For example, the spill-proof cap is covered with a shrink band so that it is tamperproof; in the current run four people applied these by hand, and they need to find a machine for the future.
The next step is test marketing and the Princeton area seemed perfect for a number of reasons – beyond the fact that the Allens live here. First, it offers a goodly sample of their demographic, which Brian describes as kids two to eight and "parents who read labels." These parents check sugar, fat content, and other undesirable ingredients before making a purchase decision. "Some parents will give their kids sodas and Hi-C," she adds, "and they are not our customer."
For the initial rollout, therefore, they have targeted independent, upscale markets, including the Pennington Market; McCaffreys in West Windsor, Yardley, and Princeton; Marazzo’s in Robbinsville; and a strong possibility of Citarella, which has five stores in Manhattan and two in the Hamptons. Logistically, adds Brian, it is also easier to get hold of a guy who owns one store.
They have outsourced the warehousing to Herman Warehousing in Somerset, and Brian plans to personally supply the local stores; if Citarella joins, they will ship directly to the company’s warehouse. They will be sampling aggressively in the stores as well as at the Thursday night concerts at the Princeton Shopping Center.
Brian and Cricket view their competition primarily as the "juice box" makers. The only other companies marketing products similar to theirs exist in regional pockets and not on a national level.
They don’t view the big three – Coca-Cola, Pepsi, and Cadbury Schweppes – as competitors. In the children’s beverage market, which was $11 billion in 2003, a product as small as theirs, serving a niche part of the market – the two to eight-year-olds – would not be worth the R&D costs for these huge companies. They would simply acquire a company if they wanted to add a product like Bot.
As a result, the suggested pricing for their product is $3.49 to $3.79 per six-pack. The competition includes, among others, Juicy Juice’s 4.5 ounce at $2.99 for an eight-pack, Welch’s 10-ounce at $3.99 for a six-pack, and Tropicana’s 10-ounce at $3.49 for a six-pack, and Snapple’s 8 ounce at $3.99 for a six-pack. Another possible competitor is the regular water bottles that moms share with their kids. An eight-pack of eight-ounce bottles of Poland Spring, for example, is $2.99.
But Brian believes that it is the children’s juices that are his real competitors. "We are trying to get a share of their market," says Brian, who adds that at this point they just want to break even, which they hope to do within a year.
Both spouses are well prepared for their current business venture, each in their own way. It’s clear that Cricket, who has done a lot of work on branding, particularly on point-of-sale advertising, for brands like Tanqueray, Dom Perignon, and Moet Champagne, will be able to handle whatever marketing issues come her way.
One strength, she says, is her training in Six Sigma, which she describes as "a discipline that is used to drive out waste in a system." The agency she works for in New York uses this approach even though its product is creative and not tangible. "It allows us to become more process oriented, disciplined, efficient, and effective," she explains, "without sacrificing our creative product."
Her primary role is in marketing, she says, "steering that ship, evaluating, improving, refining, and better connecting with the consumers and our customers (the retailers)." She understands the retail environment and emphasizes that Bot Beverages needs to make sure that the product on the shelf is desirable to the retailers’ customers. "It has to move," she says. Consequently, with the sampling initiative that is part of their rollout, she says, "we are having an open dialogue with the retailers and learning what’s working and not."
Cricket grew up in Princeton and graduated from Princeton High School. She loves sports, and participated in field hockey and lacrosse in high school and college. "It was a great formative part of my identity," she observes. "I would definitely tell anybody that team sports are a great way to go as far as both confidence building and friendship."
Her father, Marmaduke Jacobs, who died while she was in high school, worked in annual giving at Princeton University; her grandfather was Howard Menand, the dean of engineering at the university. Her mother, Molly Jacobs, worked for the town, coordinating senior citizen transportation. Cricket graduated with the Class of 1992 at Hobart and William Smith College in upstate New York, and then went to work in New York and in advertising.
The applicability of Brian’s experience is not quite as direct as Cricket’s. Although his 1990 degree, also from Hobart and William Smith College, was in economics, and he started working in a retail chain in Buffalo after college graduation – that lasted only two days. "I looked in the mirror one morning, and I knew this was not what I wanted to do with my life. By noon I had my car packed and was on my way to New York."
Although he had never done acting before, he listened to an inner voice that urged him to do something he had always wanted to do with his life. "It was a life-altering epiphany," he says. "I didn’t want to be on my death bed saying `what if.’"
He called his parents, thanked them for the degree in economics, and told them he was going to try acting. "And of course they weren’t too thrilled," he remembers.
In New York he had bit parts in movies and episodic TV and did lots of commercials, but this taught him a lot about motivation and sales. "There is a lot of similarity between starting your own business and acting," he says, explaining that in acting, "if you are not self-motivated and pound the payment, nothing is going to happen, and you’re going to starve." Although initially he had to add restaurant work to make a living, "for the past five or six years I was able to make a living from it."
"Acting is sales," he continues, "trying to get job, selling what you have. Every time you walk into a casting director’s office, you’re looking for job." It also helps build the thick shell he needs now in business. As an actor, "for every 100 jobs you apply for, there are 99 no’s," he continues. "You learn not to take it personally and try again."
The experience of producing a small independent film is paying off now. "Producing a movie and getting a business together run into the same thing. Both have a lot of moving parts." Managing the various film locations in New York City was great preparation, he says, but so were all the little emergencies, for example, "keeping a level head when the police ask for your permit and take your camera, and you have a permit but the person responsible forgot it."
You simply learn to go with the flow, he explains. Giving a recent example, he says that they received 80,000 tamper-evident shrink bands, whose purpose is to protect the caps, but they were too small, and they were supposed to start production the next morning. Instead of typing ".52" millimeters, someone had mistakenly written ".50." But the story has a moral: Adjust and be flexible!
Probably the primary motivation for Brian’s switch from acting to big business, he says, was having children. "Not that what we’re doing has any sort of stability, but I wanted to do something that has the promise of building something. In acting you have no control over the next job." In fact, he estimates that over the next five years, the 30-second spots that have been his bread and butter – currently he is in a Claritin commercial where he plays the husband of the wife afflicted with allergies and in a Stouffers commercial where he eats a delicious panini – will disappear.
Brian and Cricket both graduated from the same college, but two years apart. They didn’t meet until 1996 in New York, on a blind date on New Year’s Eve. They moved to Lawrenceville in December, 2004, when the hardships of raising twins in a three-story walkup got to be too much. They chose the Princeton area because of Cricket’s connections; her mother and her sister still live here.
After their move, it turned out that Brian wasn’t as out of sync with his parents as they might have thought when he gallivanted off to New York to become an actor. His parents were in real estate in Buffalo, where Brian grew up, and when he moved to New Jersey he got his license. He currently has a couple of houses on the market with Henderson Sotheby’s. "The great thing about acting and real estate," he says, is that they are flexible enough so that he can also run Bot.
Although they have used a friend for childcare and recently added a nanny who had worked with triplets, it’s been tough juggling the babies. When his wife goes into the city and he has on one of his three hats – acting, real estate, or Bot – he says, "you start to work out mathematical equations on how things can work."
Part of the challenge of starting a new business is mastering the details of production. "There is a huge learning curve, with so many moving parts," says Cricket. They need to learn to better manage their expectations, she adds, anticipating problems and troubleshooting when they occur, so that they can improve the next time. They want the system to be as turnkey as possible for the next cycle, when they are hoping for a significant order from a chain account.
"The game plan is to secure the distributors that serve upscale groceries," says Brian. "We have initial contacts and are sending out products." As more people are exposed to Bot, he expects more channels to open.
The couple may conduct another online survey or else a focus group. They will asking questions that help them plan for the future, for example, about the benefits of the no-spill top for both parents and children. "The top is expensive," says Cricket. "If we are not seeing direct benefit, how does that play out for the next round?"
Their approach to marketing is organic, like their product. They are trying to figure out, says Cricket, "how you integrate yourself, but not in a force-fit way. How can we constructively give it to them so that they realize the benefit for themselves – not in an artificial, branded way."
They have several plans for public relations. "We see ourselves aligned with active sports kids are involved in – soccer, ice hockey, and gymnastics," says Cricket. "We see ourselves aligned with an active, healthy lifestyle."
Other potential venues include kid-oriented events, like little fairs, where the need for hydration is high; parenting and family magazines; websites like www.dailycandy.com and www.urbanbaby.com; and moms’ groups, including twin clubs.
Bot Beverages is getting a lot of help from other professionals, including patent attorney Dick Woodbridge, corporate attorney Ian Goldstein of Drinker Biddle, and accountant Scot Pannepacker. They also have a website provider and hope to have a page uploaded in time for the test marketing.
Although they paid for the initial run themselves, at the approximate cost of a year’s salary at a mid-level job, Brian and Cricket are looking at a combination of banks and angel investors to finance the next phase, which will likely include moving into an out-of-home office and a much larger production run that would reduce costs through economies of scale. Their exit plan is to be acquired.
The husband-wife team is learning as they go. "Working with my wife, I have to maintain a sense of humor about everything," says Brian. "We work in different ways." Cricket likes to do things carefully, taking the time for things like focus groups. In contrast, says Brian, "I’m more: This is my gut, let’s go with it." Eventually they arrive at a middle ground. "When we need a quick decision, I can do it," he says. "When we need to play it out, she talks me into that."
Brian says he is going to be shouldering most of the traveling and the workload, but he has the drive to get things done. "I have been self-employed all my life," he says. "If you don’t do the work, you don’t get paid."
They have also learned to follow their own instincts. As they began to get things going, they got a lot of well-meaning advice. Because they were novices, they would often modify their plans in response. "Then a month later we realized we were right," says Brian. "You have to put a filter on suggestions, and go with your instinct." And if you make a mistake, that’s O.K.
They are also able to follow their instincts in another sense: developing their own business has allowed each spouse to be creative in new ways. Brian observes, "There is a creative aspect to being an entrepreneur." Just as he did with writing, he has a vision in his head of the final product. "When my wife and I first thought of the product, I saw it on shelf. Seeing that product motivates you and drives you on the way," he says. "There is a spectrum of creativity – even if you have a vision of the world’s best stapler, it has a design aspect."
Brian and Cricket have a mutual vision and a great product idea. But they are not overconfident. When they got into this, they discussed the possibilities of failure, did their research, and felt they had determined a need in the market they were addressing. "You can do your homework, but ultimately the market decides," Brian says. "So many people have so many ideas, but the idea part is the easy part. The hard part is making it happen."
Bot Beverages, 12 Clementon Way, Lawrenceville 08648; 609-439-1537; fax, 609-530-1675. www.botbeverages.com