Hello, and thank you for joining us.I am Melissa Travers, Director of Community here at BevNET and Notch, and I am so excited to welcome you to The Nombase Podcast.Be sure to check out nombase.com, the new platform powered by BevNET, where you'll find our partner directory, job board and press release hub, and of course, this very podcast, which is why we're all here together today.And today we are joined by Donald Wilkes, President, CEO, and founder of Blue Pacific Flavors, whose decades of experience in beverage formulation and ingredient strategy offer a unique lens on the evolving functional beverage category.In this conversation, Donald will share insights on how to navigate the balance between taste, health, and regulation, covering everything from sweeteners and taste modulation to the shifting energy drink category and what makes a functional beverage truly effective.We also get into how Donald and his team support brands beyond flavor, helping them assess ingredient risks, market gaps, and regulatory pressure points.Well, Donald, it is such a pleasure to have you here today.Thank you so much for joining us.You've been at this for quite a while.When did you create Blue Pacific Flavors?So I started with first of all, thank you, Melissa.It's great to be here.I've been a big supporter of BevNET over the years and very excited to have the opportunity to talk with you today.To be honest, it's been a very, very long journey.I started in a family business in the 1970s actually, dating myself.So I worked for my dad for years in his business.Got exposed actually to the beverage industry.Years ago, I used to call on a company called Frank's Soda, which was up in Philadelphia, and we sold them flavoring.So it was some of the old brands that we used to work with, with my dad's old business in the New York area.And so I always liked the beverage industry.And I always felt like one day when I start my own flavor company, I wanted to focus on beverages, because I always felt it was a fascinating area and a really great growth area, actually.So I started the company in 1993, and I've been very blessed and fortunate.We've grown over the years.Celebrating now our 33rd year, actually.So it's been quite amazing coming up, 33 years.So it's been a great journey, and happy to share a little bit of some of my old experiences and some of the things I've learned over the over 40 years I've been doing this, so.Well, you are a wealth of knowledge, and I'm really looking forward to picking your brain and pulling out some information to help all of the brands and founders out there.So 33 years, what's it been like to watch the evolution of the beverage category?It's been pretty wild, right?Yeah.As a company, we were very early.Being California based, we were very early, for example, in identifying trends.And California has kind of like been, always been a hotbed.If you look at Boulder, Colorado and California, those are generally a lot of the early, healthy, clean living, clean label trends started there.And being California based company, it really was great.We kind of saw those opportunities, particularly organic and the natural food trends.And we realized right away that for us to be in a strong position to compete with the larger companies, we wanted to carve our niche and focus.A lot of the larger businesses, the flavor businesses, didn't really look at organic very closely.And those are areas that we really kind of cut our teeth on and really kind of became well known in the industry for our expertise.And particularly, you know, in the area of plant-based milks, for example, we have a long history in that area and with some of the most successful brands, which was great because it gave us a lot of growth opportunities as a company.And it also positioned us to gain knowledge and experience and understanding how best to flavor some of these beverages.Well, being able to identify those trends before their trends, I'm sure has contributed so much to your success.And Blue Pacific is an organization.You're not just selling brands, flavors.You're truly working with them to help develop their formulations.Can you explain how you typically work with beverage companies and how do you collaborate with them?Well, first thing, you know, what we try to do is we when we look at companies that are emerging companies that we work with, we try to really understand what their brand architecture is, because that's really important.And the reason why I say that is that you really want everything to fit into the brand architecture.A lot of companies as a supplier, you many times feel disconnected from the brands.They are really more transactional.A lot of the large companies historically tend to just say, here's your brief or your project, which they may get to four or five other companies if they're core supplierless, for example.So what we like to do is we really like to understand how they think about what their brand is, how the consumers proceed their brand, and then we go work backwards to understand what flavors would fit within that brand architecture.So a lot of what we do is first we analyze them.Once we understand that, we will look at a combination of market instinct on flavor trends and data.We have a lot of knowledge on what we call nostalgic flavors, refreshment, and indulgent, for example.These are areas where you're seeing things changing and evolving, where consumers are beginning to look outside.You also see things that are flipping places.For example, alcohol and non-alcoholic.Historically, the non-alcoholic beverage industry didn't get into alcohol, and the alcohol industry never got into non-alcoholic beverages.You're seeing that really shift.It's, I think, a fairly dramatic disruption because of a lot of the changes in consumer habits.So we try to bring data tools that will not only give us some trend insights, but also work with, say, predictive analytics services.And then typically we'll take that outsourced data and we will aggregate it with our in-house flavor data.And then we really, by combining that, we really begin to understand really where we think the trends are going to go.And we will share that with our customers.As you talk about trends, I'm wondering when is the right time for a brand to jump into a trend?Like if you're looking and you're seeing that, you know, maybe gut health and probiotics and prebiotics are at a height of being used in other beverages.Is there a direction that you'll point beverages in if there's a trend that you see everyone jumping into?Do you join the pack if there is a trend that a beverage company might be interested in that you feel like is just burgeoning?Do you caution them?Like how do you know how to ride that wave?I think that's a really great question.And it's something that, you know, there's a lot of risk reward in that equation.So, for example, you know, if somebody is trying to jump into a fairly mature category, even though it may be six years old, the modern soda category is got, you know, some major competition in it.And I think from, you know, if you were looking at that category, for example, I would probably, if they were just coming up with a MeToo, you know, you know, low sugar fiber based beverage, I would tell them, you know, probably good luck on that one, because it's really going to be hard to get distribution.And I also feel it's hard to build consumer authenticity today.You know, the success of some of these other brands, because they were early and they were the first, you know, it's really hard to come in as a market follower when you're competing with very strong market leading, you know, brand situation.So I think, you know, the key for, if it's a, you know, smaller, early stage company, is to really have some unique IP in their product.I mean, they have to have something that has a compelling story, for example.It could have a, you know, proprietary ingredient, and that's FDA grass.It could have, you know, a great packaging ideation.It could be just brilliantly marketed.But in the end, I think the great success that you see today in the market, really, all those boxes have to be checked.So they have to execute at every level.So they have to have great brand management, and from a packaging design standpoint, how do you get your product noticed?You know, what is it going to take?Is it going to connect to the, you know, the desirable demographic that you're shooting for?And let's face it, a lot of people are looking at, you know, Gen Z, they love to be able to capture that market.But it's not easy, and of course, shelf space today is really tough.So we try to give them some, and we look at them really truthfully, as if we were going to invest in them, because we are, and we want to make sure that, you know, we think that they're going to be successful.We don't want to jump into something that is, you know, for example, we don't want to take somebody's money, and at the end of the day, they're not going to be successful.Well, we're going to get into some of those trends in just a minute, but you mentioned IP.The beverage category, as you mentioned, is so competitive, and they're certainly high stakes, as we see, you know, with a brand like Poppy, the brand everybody's talking about, a 1.6 billion.Please explain why Flavor IP is so important.Well, you know, I'd like to go back to the historic aspects of the carbonated soft drink business, which, you know, as we both know, we're really structurally founded by two of the major players, Pepsi and Coke.And, you know, when you look at the way they manage their IP, they recognized early on that they weren't going to, say, for example, patent their formula because everybody can open up a patent and, you know, some people can even re-engineer patents.So they treated everything as a trade secret.Why did they do that?A lot of reasons why, because the main reason obviously was that they didn't really want to open it and share it because they don't want people coming up with copycat products.But the other reason that's interesting about it and the way they manage it is really, I think, a legacy that is a foundation of any successful growth future for a beverage company.So if a beverage company today is looking at potentially being acquired by one of the big beverage companies, the top three or four, I think you've got to look at it and say, how do you manage, first and foremost, how do you manage your IP?So many companies, and we've seen this when you start up, is you're so focused on growth.You know, the back end of the business, which is really the supply chain and how the suppliers are supplying your co-packers.Because remember, most of these businesses don't have the assets to manufacture themselves.So the smaller, medium-sized companies are always, you know, tie their, they're tearing their wagon to co-packers.And that's great.And co-packers have done a phenomenal job in creating really a support mechanism for growing the overall, you know, new age beverage industry, you know, and bringing in people that generally would never have had the opportunity to compete in a space like this.But the challenge with it is that if you're looking at it from an IP area, if they don't manage that really closely, all of a sudden that co-packer could have people that work there left, got information.And so the how do you disclose and how do you work with these third-party companies really creates a risk factor for the potential acquiring company.In the case of a large multinational beverage company, they want to make sure that the formula, the flavors that are used are typically in escrow, for example, that they have an escrow agreement.So if something happens to the supplier, they can certainly access that formula to make sure that they can maintain supply chain and not have any hiccups or disruption in supply chain.But the other aspect of that is that they want to make sure too, that you've handled this with and treated it as a trade secret in your company, and you've done it externally as well with the co-packers or third-party people who work with your product.So those are really critical to maintaining, I think, a very like foundational aspect to intellectual property.Even as a startup, you have to have it, and you have to have the right NDAs, you have to have a good lawyer to draft those agreements.And we think that's really important because it also, in the end, is going to be a very important aspect of due diligence of the acquiring company that will eventually buy your business.You mentioned Coke as an example of a brand that certainly, you know, has a smart strategy around IP.Are there any other brands, you know, maybe more recently that stand out to you in that they manage that really well and it helped them grow and be successful?Well, I think any, any company, you know, flavor is, when you talk about beverages, flavor is really the intelligent side of the product.It's not going to be the juice.And it generally speaking is not necessarily going to be the sweetener system.You know, these are more commodity driven products.The flavor is not a commodity.So, and once you understand that, you realize the value and importance that a flavor places on making your product differentiated on the shelf.And so when you look at the kind of the landscape of multitude of beverages that are out there, if your product is easily re-engineered or duplicated, you're going to lose market share.And big companies obviously don't want to lose market share.They want to be market leaders.And to be able to compete effectively in that area, I think everybody has to treat their flavor as if they're smart, they're treating it as if it's very critical intellectual property to the end formula.We do see a lot of companies that do well in this area that understand that.And we also see companies that are a little bit lax in it.And I think we try to educate our customers in that area because we want them to understand that's a potential liability for them going forward if they don't manage it properly.If you're the founder of an emerging brand, you're probably still trying to figure out exactly what that brand identity is and what your brand strategy is.How do you help founders of emerging brands figure out what their flavor innovation should be?If they might still be trying to piece together exactly who they are and what they stand for, or do you have to have that down first before you can start crafting your flavor?Well, it's a really good question.It's actually a very amorphous process.I would probably define it as that, meaning it's not crystalline.My experience in the beverage industry is, particularly with entrepreneurs, is it's very rare that you will succeed with the first kind of iteration of your product.So, you know, over the years, I knew John Bellow, who, you know, I remember when he did Sobe, it was called South Beach at first.And then his daughter did a really nice graphic of a yin-yang chameleon, and they called it Sobe, which was the acronym for South Beach.And, you know, when you look at stories like that, and you understand that they were not overnight successes.I mean, there's always learnings that typically are required.In general, larger companies tend to have the ability to do market testing, markets, you know, analysis, and sometimes they can test till they kill it, and they sometimes test, and they're so risk averse, by the time they actually get the product out, they're no longer a market leader, they're a market follower, because somebody else who was a little bit more nimble, quicker the market, got a similar product out there.So I think in general, it's hard to navigate for some of these companies, because you almost want them to learn a little bit on through failure, but you want to mitigate the size of the failure.So, you know, you can get people advice, you know, we're not business partners, typically with our customers, you know, we can give them advice, and they can choose to take the advice or not.But what we try to do is we try to educate them when we can to understand the risk factors.Because if they understand the risk factors, that generally gives them some sense in knowing that, you know, it's like the little kid who's going to touch the electrical cord.He gets a shock, and he realizes he won't go back to that again.So I think in general, that's the way we look at it.We try to give them as much information as possible.We try to bring in data where we can to support our arguments on why they should be going a certain way.A lot of people fall in love with their idea.So it's really hard, you know, obviously to change them from that because it's become, it becomes part of their, their view, world view.And they, and they, it's really hard for them to change it.Is there an iterative process that you've seen work really well?Like maybe they develop an initial formulation with you, then they bring it to, whether it's a farmer's market or, you know, a few regional markets to test and see what the reaction is.Is there kind of like a best case scenario that you've seen really work where, you know, you're able to iterate on the flavor, really dial it in, make sure that you have product market fit, and then start to scale?I think iterative work is important.I think that in general, we find that most entrepreneurs don't have the time to do that.They tend to be like wanting to go quicker than somebody who's a little bit more pragmatic about understanding, really more understanding on the consumer side.I see iterative a little bit more with former CPG brand managers who jump into the beverage business, for example, or somebody in the brand space.They tend to have a little bit more consumer centric and also understand the risk association with launching something without really great consumer insights.So it's a little bit challenging sometimes for some of these smaller entrepreneurs who are really hell-bent on their way to the highway, and they're looking to have you execute.We will look at those opportunities, and we typically, if we don't think it's going to be successful, we won't do the work.We don't want to waste their time, and we certainly don't want to invest our, allocate our time to projects that don't reflect, I think, fundamental good business strategies and execution strategies around, whether it's the quality of the product, the branding strategy, distribution, obviously, critical, making sure that the packaging is the right people, they're dealing with the right co-packers and so forth.So there's a lot of nuances to the beverage industry that's important to share with our customers.And at the end of the day, if they don't want to listen, we can't, again, we're not partners in that respect.Well, I'm sure that careful collaboration has a lot to do with why Blue Pacific has the reputation that it does.Are there any green flags that you look for that you're now aware of that could help somebody understand whether or not they have it?Like whether or not they've really dialed in the formulation, they've dialed in the liquid, and it's something that they can feel confident about bringing to the wider public?You know, intuitively, because we've done this for so long, we do see, you know, people who come in and they've got, number one, you have to have somebody who knows the beverage business.I mean, or they have to have this massive ability and work ethic and passion.You know, passion is so important, but, you know, to me, these entrepreneurs that are the ones that win are the ones that just, they don't accept no, they literally grind, you know, seven days a week.And that's really the only way I see somebody moving ahead, who may not necessarily come from the quote beverage business, and they don't have necessarily the management experience or background in it.So I do see that.I mean, we typically look at a few fundamental areas of, you know, for example, we look at the management team.Do they have anybody who's got, is there a mentor involved, who's a beverage, ex-beverage person, that can give them, you know, because again, a lot of times we look at these projects, and they're going the wrong way, you know, they want us to develop the product, but we know that it's not going to be successful because they don't have the right non-flavor ingredients, if you will, or the business ingredients to be successful.So we really do try to assess the business and make sure that, you know, if I had to answer your question, what are the green check marks?It's going to be the experience of the team that they have, their understanding of the category, their packaging design, and their distribution, right?We know that we can execute on the formulation and the flavor.We've, that's something that we're not concerned about.What we're concerned about is some of the other areas.So if the packaging is wrong, for example, they've run into issues because there's an ingredient in there that oxidizes or whatever because, or they mislabeled it, you know, because of some of the regulatory issues, some people may wind up doing a, say, a self-affirmed grass ingredients, and all of a sudden, Kennedy is going to be changing that regulation, let's say, in the future.That could have a huge impact.Well, your comment about how, you know, working seven days a week, the never-ending grind, I'm sure that doesn't fall on deaf ears to our audience of founders.So for all the founders out there who, you know, we know you're working so hard, it can truly pay off in the end.So kudos to all of the folks in our audience who are doing just that.Well, let's get into some of those trends.I'm so curious to hear what you think.And you know, first of all, I'd love to hear what you think about what's going on in the world of sweeteners.What are you seeing as current trends and innovations in sweetener technology and how formulators like yourselves and brands are working on taste modulation?Sure.So, I mean, sweeteners is a really interesting area.The success of really the modern category, the modern soda category, I think, is very much tied to a reduction of sugar.The five grams of sugar per can, lower caloric than the traditional CSDs.I think it was a profound way of reshaping that whole category.And it's become obviously a fairly critical and growth area now for all the beverage companies in the space today.There's a dual edged sword with sweeteners.It's a very challenging time if you've got a new sweetener, you have to get regulatory approval, obviously, particularly in the natural non-nutrient sweeteners.But there's a lot of interesting, exciting areas that are emerging in that.One product is called honey truffle mushroom.It's by a company named Myco Technology.And I know that they've been busy working on a product.I think one of the interesting things about all the natural sweeteners and even some of the flavor modifiers is that they do work really well with a little bit of sugar.I'm a firm believer and I've told a lot of our clients this.We believe that it's really healthier from a metabolic standpoint to have a little bit of sucrose in a formula, whether it's five grams or whatever, than it is to do 100% non-nutritive sweetener or even a sucrose combination ASK blend.What we find with sweeteners in general is that even all the natural ones and including Stevia, finding the right blend to work with these types of sweeteners is really critical.We think that it's not one size fits all, which is one of the challenges with sweeteners.I think in some of the respect, the early products that were done with Stevia were not successful because it was really kind of a one-stop molecule.It was not something that people could get.You couldn't get your...It wasn't going to address some of the other perception issues of sugar that was missing.And I think a lot of consumers had an expectation and it didn't happen.I think what you see now is, you know, using blends is going to be much more successful, I think, for getting a consumer experience that will have a closer, you know, mimic to say sugar.But I do think from an irrational metabolic response, and there's been a lot of scientific studies on this area, believe it or not, that it is an issue with completely non-caloric sweeteners of natural or artificial nomenclature.I think it's really important that they look at combining some of our beverage formulations, we've been doing this, with really more of a low sugar area.We think that actually the body needs to recognize the sucrose in order to properly metabolize and not create a situation where you have an irrational metabolic response.That could be anything from eating more to, say, getting a headache and so forth.So I think that's something that we would recommend as part of our customer strategy when we talk to consumers, to know our products about our beverages.I didn't realize that adding a little sugar not only helps support the flavor, but also perhaps supports the way that your body digest the liquid.Exactly.It does.Well, I think in the end, if you're just pounding a diet soft drink all day long, you might find that you have some issues, relatively speaking.And I think for a lot of people, I think they used to blast, you know, to me, Aspartame was one of the best sweeteners.I never agreed with a lot of the science behind the fact that it had any negative health effect.But what I think, what is the smoking gun with all sweeteners?If you're consuming it and not eating anything, you're basically, your body is looking for the sugar, it's tasting sugar, and it's gonna literally trigger a lot of the receptors that are thinking that this is gonna create my metabolic response.And of course, your body doesn't get the sugar.The first thing you're gonna get is a massive headache, probably, because you're gonna get like a sense that you were supposed to get something and you didn't get it from a nutritional standpoint.And I do believe that a lot of that is pretty much tied to this irrational metabolic response.I don't necessarily believe that the, and this is my own personal opinion, that aspartame, which is a basically a dipeptide, which is L-aspartic acid and L-phenylalanine, those two amino acids that your body recognizes that are found in foods that your body can easily assimilate and understands and recognizes.I don't, I never thought that that was causing any issue, other than the fact that it was such a good sweetener, if you were consuming it at a high dose rate without any other sugar added or food, you might actually experience a irrational metabolic response.And certainly for folks who were, especially back then who were drinking diet sodas, that was a distinct possibility.Absolutely.Is there a sweet spot for the amount of sugar that you see in beverages if a brand really doesn't want to have the minimum amount of sugar, but they want to put enough in to achieve those goals that you're talking about both health-wise and flavor-wise?Well, yeah.First of all, I don't know if I put pure sugar in the product, but I think sucrose or rather glucose maybe is perhaps one way of looking at it.You want to find something that your body recognizes and assimilates.So I think that that's something that is not to me.I'm not a food scientist, but I think that I would be looking from a nutritional standpoint, finding something that would make sense.I think historically the sports beverages, the Gatorades of the world also understood that when they were looking at it from an assimilation standpoint, what's going to allow the body to hydrate quicker and rather than something that's going to take a lot of energy for the body to understand and assimilate.And what do non-nutritive sweeteners have trouble achieving that sugar is able to achieve?It can't be sweetness because when I taste a beverage that has stevia or allulose or monk fruit, they taste sweet.What is it that those non-nutritive sweeteners have trouble mimicking in sugar?To me, it's really the rheology or mouthfeel of it.So, rheology is really a fancy word for mouthfeel.And when you look at sugar, it has a structural property to it that is unique.If you can imagine, if you've had candy or even chocolate that doesn't have sugar in it, you'll notice it right away.You'll notice the texture is different.Obviously, to your point, the taste and the flavor release is different.Sugar does some really incredible things.And let's face it, your body recognizes it and understands it.It recognizes it and knows how to break it down.Fructose is obviously something that is in sugar as well.And that has the potential for people scrutinizing and wondering if it's...If you're looking at beverages, for example, that have high fructose corn syrup, those are things that have been addressed over the years where people have looked for that because they worry about, again, irrational metabolic response, where you're eating and drinking foods with fructose, and you tend not to be satisfied because that's an hormonal...It's not triggering the same hormonal response that say that actual glucose would trigger or sugar percent as opposed to 100% fructose.You mentioned earlier the honey truffle, Mycotex, kind of new sweetener solution.I've been hearing a little bit about this.What do you think is particularly exciting about what they're doing?I think they've got something very interesting.I think the whole narrative around mushrooms is very, very interesting.I think the idea of coming up with identifying that molecule and then being able to grow it naturally is really interesting.I do think that, as I mentioned, I think a lot of sweeteners today, their success is really gonna be part of a collaborative or blend strategy that will achieve the desired mouthfeel flavor.We talked about what sugar offers, but really there's a variety of different ways of addressing these issues.But typically, it's very difficult to do with just one product.So it's not a one on one placement for, say, let's say, aspartame.I think where you have the opportunity, with natural, you have a little bit more challenges.I think that they'll be successful.And once they get the approval, I think there could be a lot of opportunities for that type of sweetener.Because I think it's a great labeling claim, too, to say it's honey truffle mushroom is a really nice name for a sweetener, natural sweetener, and particularly because a lot of consumers are already oriented and are well aware of the health benefits of mushrooms.Absolutely.And last, what do you think about sweeteners that may be positioned as GLP-1 alternatives?I was hearing that a couple of brands positioning Allulose as being somewhat similar to GLP-1s and its effect on hunger.What are you hearing around that?I have not really heard all of what you just mentioned about how Allulose is now positioning itself in that area.I haven't seen any clinical data to support that point.So I would probably be air on the side of caution on that.I do know that there are certain molecules that will trigger a similar hormonal response that we can eat and consume.And there's a lot of work being done in that area.But I'm not really familiar on the sweetener side of it.And it's very possible it may have some ability to mitigate hunger, for example.But I haven't seen it, to be honest with you.Typically, protein does that.And that's where protein supplementation with, and I'm a big proponent, I think, of GLP-1.I think that whole area of science is fascinating.I do think there's an opportunity in the future.You'll see these ingredients beginning to get tested and even clinical studies being done on a potential ingredients with GLP-1 that could be used in a beverage or a nutritional shake.Are there any other ingredients that you've heard positioned as having some sort of effect on appetite?I think I heard that green tea has something.I don't remember what the specific chemical was, but is protein mostly what you think of when you think about that area?I mean, I do believe green tea is a fabulous product and does have an enormous amount of huge data on research, particularly from Japan on its health benefits.And a lot of it is legacy.People, it's got phenomenal antioxidant properties.It has a lot of interesting properties, some of which they're just finding out.They're doing more and more research on it.But I don't know, again, I think this whole area is fairly new, the GLP area.So I think you're gonna start seeing more and more testing where you get into more of the technology behind screening for these molecules and how it affects the human body.And I think AI will have a big place in that where it will speed the process up to identify some of these molecules and how they may cross relate to the specific health benefits or functionality of the ingredients on human health.Let's move on to energy drinks.There's a lot going on in that category.It sort of seems like, I don't know, we get so many beverages into BevNET, and sometimes I think, how is anybody going to innovate in such a saturated category?But you were talking a little bit about why the energy drink category is prime for disruption.Tell us a little bit about that.It's a really interesting category because it's a highly commoditized category today.I mean, there are challenges with margin on that category.And I think that one of the areas that consumers are looking for is clean label.And how do you address traditional caffeine and taurine in formulas where generally for years, it was like how much more caffeine can we put in these drinks?And how can we supersize them to get them to the point where you're at 300 milligrams of caffeine?And I think there's challenges with that.There's a lot more health scrutiny today because of some litigation in that space.I think there's now regulatory issues around health warnings now with products that are over 150 milligrams of caffeine, which is something that people didn't have to have on their label in the past.But I think these are all signs that the category is becoming a little bit more under scrutiny.So whether it's a regulatory scrutiny or consumer scrutiny, certainly that to me is ripe for disruption.And when I look at what the poppies and lollipop did to traditional soda, I don't think it's a far stretch to say that an ingredient that can give you energy that's natural, that doesn't give you the jitters, that doesn't potentially cause an irregular heartbeat.Or like taurine lately has been shown to increase cancer growth cells.I mean, so there's challenges with those traditional energy formulations.And I think one of the ingredients we're really excited about, we partnered with a company called Ketone Labs.And they have a worldwide patent on an ingredient called Beta Hydroxybutyrate.And the acronym is BHB.And some of your audience may know about it.It's actually, you know, nature's own ketone.It's actually the same exact ketone your body makes when it burns fat for fuel.It's just in a supplement form.So what's great about this ingredient, we're excited because we think this is the ingredient that could be the one major disruptor to this traditional energy drink platform.It's FDA grass certified.It's not a self-affirmed grass product.Very important today with the Kennedy administration.So it's not an ingredient that, you know, may or may make a question later on, which many obviously self-affirmed ingredients may be going through.And it's not a synthetic stimulant.It really does deliver energy in a ready to use state, which is very different than traditional sugar, even caffeine.So there's no liver processing, no jitters, no crash.I think one of the great things about it is, it really gets to energy at a cellular level and it's energy from within.It acts literally like a signal to your body that this is a better source and a quicker source for you to get your energy from than sugar, which requires you to go through a whole metabolic process even.It's a secondary source to BHP.We love it because we think the science is fantastic.I think there's a great story about the BYU men's and women's cross-country teams.They basically had won their dual NCA titles in 2024.We learned that they were actually on daily supplements of GO-BHP, which is the pure form of BHP, and they won.There's multiple placebo-controlled trials that are going on right now, and we're seeing results both increasing endurance, cognitive speed, and stress resilience.So we think it's great ingredient, really excited about it.And this, we think, is one of the reasons why the next category would be disrupted.I think in the big beverage industry, it's going to be energy.I'm just making a mental list of all the things I'm excited about.Honey truffle, BHP.And BHP, is that a form of ketone?What's the relationship again?It's literally a bioidentical version.It's a natural bioidentical version of the natural ketone your body produces as a signal for your liver to release glycogen, which basically allows you to burn fat and also maintain your, when typically you go into ketosis, you're not getting any nutrients or you're not getting sugar.Your body is basically looking at sources of energy.So the first source of energy goes to typically is going to be the fat.And so that's, what's exciting about this ingredient is that it also gives you mental clarity, for example.They're finding out now that the people who have been taking this, bike riders, have been finding that they have really sharp mental clarity.And I don't know if you've ever done this, but if you're speaking at a conference, for example, and you don't eat lunch and you wind up missing that lunch, and you give your body that like non-digestive phase where your body's not working on digesting food at the same time, you're trying to speak, you have this mental flow state that you have that's really unique.And I think that's one of the really beautiful benefits about using this ingredient.And we think that has both the potential for getting into brain clarity, brain health potential areas, and promoting mental clarity, obviously, but also obviously on the energy side, it could be a major force in disrupting the energy sector.So, this is certainly an early category of ingredients.We got a sample of a beverage that was based around ketones, and I won't say which one it was, but I have to say the flavor of it was very off-putting.Does BHB do ketones?Do they typically have that effect?There are competitive products that are claiming ketones, and as I mentioned to you, some of them are actually precursors, and some, believe it or not, are actually at toxic levels.So, I'll give you a little story.If you remember years ago, Dr.Oz came out with a show where he was promoting ketones, and one in particular he was promoting was a raspberry ketone, which is a flavor chemical that's used in the flavor industry.And that chemical in the flavor industry is used at a specific usage level, which it's been tested for genotoxicity for.So the flavor industry is very, very unique in that we have a fantastic science, independent science board that tests and evaluates the safety of our raw materials at specific usage of intended usage levels.So what Dr.Oz was promoting is using that same molecule, which was never tested to be used as an actual part of a beverage.It's used as a flavor, which means it's used at a very, very low level.And he was promoting it at a level that was basically toxic.Well, sometimes these things reappear.And we've noticed that some of these ketone products are basically kind of doing the same thing.They'll say that they're, quote, either grass or self-affirmed grass, and they're not, and they're using them at levels that are not safe, you know, comparably speaking, if you were looking at it from how our regulatory, the flavor industry would regulate these types of molecules.So I think what you tasted is also something that can be very sour or very better depending upon the type of ketone that they're using.The one thing about BHB that's very, very unique is that we don't have to use a high level of it to have function.It's purity is really world class.And the other thing about it is you can use two grams, for example.We're doing some clinicals with our friends at ketone labs on actually using two grams and seeing the functionality, which means that you could probably put this into a shot, for example, and other things where we have consumers who are looking for it in maybe different forms.So you've been talking a little bit about the functional aspects of beverages and functional ingredients.Let's dig into that a little more.What are some of the other functional ingredients that you are seeing trending right now?For example, I've certainly seen L-theanine in so many beverages, magnesium.What are some of the ingredients that you are seeing rise to the top of the pile?Adaptogens, you know, nootropics.You know, I think energy and hydration is going to be an interesting area.And I know there's some new products that are entering the market now in that space.You know, in general, there's going to be a lot of these ingredients out there.You really have to understand what a functional beverage is.You know, are you going to be marketing it specifically just to intersect nutrition, innovation and, you know, and consumer lifestyle or are you really trying to make a full-on health claim?And because when you make a full-on health claim, one of the big issues and risk factors is what we call the barrier of consumption.And, you know, as I mentioned that earlier, you can have a potential interaction with a, let's say, you know, some of the Gen Z kids are, let's say, on Adderall and all of a sudden they're taking this, you know, new beverage with has all these herbal supplements and functional ingredients in it.Unbeknownst to them, that drinking that product might actually impact the effectiveness of the medication that they're on.And so these are things that happen that a lot of companies don't think about, but it's very important to look at these ingredients, because if they're at a level where you're making a claim, you know, then you get into this kind of narrative, you know, food is medicine, and that's wonderful, but you also have to be wary of the fact that it could be a potential challenge depending upon the consumers that are consuming it.You just mentioned the convergence of categories.That also makes me think of the world of functional beverages and non-ALC.So many non-ALC positioned beverages also have functional properties.Are there any best practices you see there?Like, for example, does it make sense to try and use an ingredient that somebody might feel just after consuming once?Like, L-theanine seems to be like one of those.Caffeine, certainly.What are some of the best practices that you're seeing in the non-alc functional category?From a non-alc functional, are you thinking...I just want to clarify the understanding.Are you thinking of it in terms of a replacement for, say, a spirit product or a cocktail?Or are you thinking of more just traditional non-alcoholic beverages?No, exactly.Like, is there a replacement for an alcoholic beverage?You're at a bar, you're at a party, you don't want to drink, but you want to have something.We're doing some work with some really interesting products around combining adaptogens in that space and understanding even things like terpenes, where they have a direct correlation to what you perceive and honestly what you feel.I think they're really interesting products because they can achieve a certain mild buzz, if you will, but they're not necessarily making you feel like you drank alcohol or necessarily that drank too much.So I think the win on those products in the future are going to be having some real functionality.To your point, you can come up with a non-alcoholic product at a bar, but most of these are going to give you taste similarities.Let's say, for example, you can have a drink that tastes like a mocktail.That's great.It could be a variety of different mocktails.But at the end of the day, if you don't have some mild functionality that you could say, hey, this is nice, I feel a little bit chill or relaxed, there's some benefit to that, it's going to be more commoditized as a category.I do think that the area of IP is going to be interesting in that area because I believe that that could have a strong emergence.It has to be nuanced and subtle, but it has to work.Well, Donald Wilkes, I have learned so much, and I think our audience has as well.That was fascinating, and now I have a list of things that I'm going to be looking for in beverages because you made them sound so interesting.Thank you so much for joining the Nombase Podcast today.It was such a pleasure to have you.Oh, thank you.Much gratitude to you and your team and the BevNET group, and I'm happy to share anything I could on some of the questions you had, and look forward to seeing you at BevNET.Yeah, see you at BevNET Live.Donald Wilkes, president, CEO, and founder of Blue Pacific Flavors, thank you again so much for joining us on the Nombase Podcast.To our audience, thank you for joining us as well.Make sure you head over to nombase.com, and we'll see you next time.That concludes another episode of the Nombase Podcast.Many thanks to Nate Brescia, our recording engineer, Ryan Galang, our livestream coordinator, and Josh Pratt, our podcast editor.If you enjoyed the show, please leave us a review and follow us on your listening platform of choice.Want to be part of a live recording?Register at nombase.com/podcast to join the conversation.You can also watch and listen to past episodes on nombase.com.And don't forget to join our Nombase Slack at slack.bevnet.com for company updates, industry networking, and community discussions.See you next time.
