[00:00:05] Melissa Traverse: Hello and thank you for joining. I am Melissa Traverse, Director of Community here at BevNET & Nosh, and I am excited to welcome you to the Nonbase Podcast, a podcast built to help CPG owners and operators navigate growth challenges and build more profitable businesses. Be sure to check out nonbase.com, BevNET's platform built for the CPG community, where you can find this episode and so much more. Between shifting manufacturing options, trade and tariff uncertainty, rising input costs, and evolving consumer expectations around formulation, operators are having to make harder decisions in their growth journey than ever before. Today we're talking about how beverage brands can set themselves up for growth in 2026 by making smarter, more strategic moves today. We'll break down what's changing in the market, where hidden risks and opportunities are showing up, and what operators should be doing next to protect margins and unlock more flexibility and scale. Our guests are Beth Brown, David Van Weese, and Tim Neer from Aggregate. Aggregate partners with beverage producers and suppliers to deliver strategic sourcing, procurement expertise, and market intelligence that brands don't usually have access to on their own. Today, we are going to explore practical decisions around co-manufacturing, tariffs and trade, formulation trends, sweetener strategy, and supply chain risk management that CPG founders and operators should find useful immediately. Well, David, Beth, and Tim, thank you so much for joining us from Aggregate. I'm going to start off with a few introductions so that our audience can get to know you a little bit. David, please, please start off and please tell our audience what you do at Aggregate and how Aggregate serves the CBG community.
[00:01:54] David Van Weese: Awesome. Well, thank you so much for having us on your show, Melissa, and look forward to a conversation. As you said, David Van Weese, co-founder of Aggregate together with Tim Neer. We founded Aggregate in 2016. So we've been, this is our 10th year of operation. My background, always in the beverage industry, more on the commercial side of the business, sales, marketing, general management. having done things like run the Stellar R12 brand globally based out of Belgium, and new product development for multi-country application for the company that's now ABI, again, based out of Belgium. All in beverages, but now Tim and I for 10 years have been working and building and have great teammates like Beth along with us. We're focused, as you said, on helping beverage producers improve their bottom line and do that through their sourcing of direct materials and packaging and ingredients and transportation. And we do that through our data and information. We have a really deep data set on information and we're constantly learning about things like tariffs and I know we'll talk about that coming up. disciplined process of working through cost structure and how to improve that bottom line. Very often with beverage companies, $1 saved at the bottom line is worth $10, $15, $20 depending on your margin structure of top line sales. We have a vast network across North America of fantastic suppliers that we've worked with and can access. And ultimately, you know, our expertise is around sourcing and then really understanding ongoing the embedded commodities within your cost structure so that you can plan out your short, medium and long term very accurately with regards to your cost structure. So that's a little bit about what we do at Aggregate. And I'll pass it off to the next introduction.
[00:03:59] Melissa Traverse: Thank you so much, David. And as a matter of fact, folks can go over to non-base to our data hub to see an Aggregate data report. So we certainly appreciate that partnership. And it's some great information. Tim Neer, please tell us or tell our audience a little bit about yourself and what you do.
[00:04:16] Tim Neer: Tim here, one of the co-founders with Dave of Aggregate. Like Dave, long-term food and beverage, mostly beverage, exact, always on the supply chain, operations, procurement side of things, working for companies like Nielsen's Dairy, now Saputo. When I was much younger than Quaker Oats, when we had both the cereals, as well as Gatorade and Snapple before Pepsi bought us, I was head of procurement for a country for them. And then I went to the company called Interbrew, which was then InBev, now it has a Bush InBev, where I did things like RAND. the direct material procurement group and set that up over in Europe, ran the supply chain and logistics for North America for that entity and did collaborations between companies like Pepsi and ABI. So I've been doing this for 30 years, which seems like a long time and nice to be here Melissa, thanks for having us.
[00:05:12] Melissa Traverse: Thank you, Tim. Certainly so much expertise. And Beth, you have plenty of expertise in the CPG industry. Please tell our audience a little bit about yourself.
[00:05:23] SPEAKER_03: Well, I'm excited to say that I just realized it's been a year and a half since Tim, Dave and I started working together and supporting aggregate and their strategic sourcing areas. And like Tim, my background's in supply chain procurement and operations and have been mostly in beverage, but a little bit on the food side and really just in, you know, work for some big beverage companies, but more on the non-alcoholic side, Pepsi for 10 years or so, and Diageo then got into the spirit side, and lots of other types of beverage companies. So that's why we have a lot of similar backgrounds, but also we complement each other. And I have a lot of, Tim and David have a lot more background on the beer and alcohol side, and I have a lot more background on the non-beer and soft drink side and excited to dive into the topics that we're going to talk about today.
[00:06:24] Melissa Traverse: Well, without further ado, let's do just that and dive right in. The first topic will certainly be of special interest to our audience, and that's around manufacturing and co-manufacturing as it applies to breweries. you know, manufacturers that are functioning as breweries right now. But as we have seen in your data reports and, you know, and others, certainly craft beer, beer sales are soft. Breweries have unused capacity, but some are becoming co-manufacturers for other beverage businesses. Please tell us a little bit more. Beth, what are you seeing here?
[00:07:02] SPEAKER_03: What we've started to see is that the breweries are wanting to fill their limetime in two ways. So some are learning more about different types of beverages and expanding their capabilities of what they can run on their equipment. And then the second is that they're doing a lot of innovation, expanding beyond beer into other alcoholic drinks and salsas. And even into non-alcoholic soft drinks, a lot of the aggregate clients are starting to broaden their portfolio of beverage so that they can try their best to keep their lines running and also keep their products selling a broader portfolio across different categories.
[00:07:47] Tim Neer: It's a good slash bad situation. It's a good thing that breweries have a lot of capacity. The bad part is I'm sure they would have liked to fill that up with their own brands. The craft beer industry, especially in North America, It was growing rapidly for quite some time, and I think there was an expectation maybe that was going to continue. It didn't, coming out of COVID particularly. So what that means is there's all this really nice capacity, sometimes with very good equipment. with very good people that know how to run it that are looking to be used. And sometimes this is well-known. In other cases, it's not. It's just an opportunity. What we find is if there's an opportunity for somebody to look at maybe expanding into a new geography, instead of putting a new location there, look to where capacity might exist in that geography before building out. Might be a good opportunity. Or if you're looking at a capability for a beverage you don't currently produce, breweries are very good at producing lots of different beverages. And in fact, sometimes something that's just blended and mixed from a brewery perspective is an amazing opportunity because they don't have to take up tanks fermenting for weeks, which is part of the normal brewing process. So there's a lot of opportunities there to help the whole system there, these win-win-win scenarios where you can not have to maybe invest in a new capacity or market. You can get access to wonderful expertise and equipment, and you help the brewery that has capacity with some of the revenues that they thought they were going to get from their own product, but maybe they have to get in a different way. The trick is, Melissa, just finding the square pegs in the square hole. Sometimes there's very specific requirements, or sometimes there's Some breweries are better at articulating what they have available than others, where it might be a little bit more difficult to find. But we see a lot more of this happening. It's already been happening a lot, but a lot more of this happening as we go into this year and beyond.
[00:09:53] David Van Weese: And I think I would just add as well, and you touched on it, Tim, the people at the craft breweries, you know, very knowledgeable, passionate, skilled production base. So great, great group to tap into. But additionally, they have a history and a knowledge of producing high quality products that are branded. And a lot of times new products coming into the marketplace are a higher level quality, whether it's packaging or the liquid, of course, both, and having a branded component to it. And so beyond the capacity, there's also a cultural component that dovetails very nicely with new beverage brands coming into the marketplace.
[00:10:38] Tim Neer: I would also be remiss if I didn't say there's lots of other capacity that aren't breweries out there. Traditional co-manufacturers, ones that are putting in fantastic equipment, large, small, and everything in between. So there's been a lot of investment in capacity and co-manufacturing in general, and breweries are one compelling part of that. But this seems to be a growth area, Melissa. You also have to be very efficient, very quality focus, very service focused, all those things that are, you know, entries to the game.
[00:11:12] Melissa Traverse: Certainly the capacity is helpful for beverage brands. I mean, it doesn't seem like that long ago where it almost seemed impossible to get on a line. So knowing that there is this opportunity is great, especially for those emerging brands who may not be able to run the minimum order quantities that larger manufacturers require. And then on the flip side, for breweries who are trying to win more of that non-beer work, Are there any investments that you're seeing and whether it's equipment or otherwise that are really helping move the needle in winning that additional work?
[00:11:47] Tim Neer: Generally, I would say that here's the overriding rule. If you're going to compete in the co-manufacturing world, number one is you've got to have the service, you've got to have the quality, you've got to have, it's got to be in the right place. Okay. So if you don't have your place, If somebody needs something in the West Coast and you're in the Midwest or the East Coast, it's not going to work. So that's number one. Beverages are expensive to move sometimes, so you got to take that into play. But number two would be you have to be efficient. So some of the breweries are not as efficient as they could be because they focused on other things, growing beautiful brands, developing amazing liquids that are more value added maybe than you're running the lines as quickly as possible. So you have to have that efficiency piece and that efficiency mindset if you're going to be effective. as a co-manufacturing brewery. And this is all the way from your production lines to your manufacturing processes to the way you might interface for even taking orders or shipments and all that back office IT stuff. That takes some work. And then the last bit I'm going to say like equipment and tanks and that sort of thing, that's obvious. If you need to run a CANS and you don't have a CAN line and you've got to find a solution to that, that's obvious. But the other thing we see is you may have to invest in some sort of customer service capability or interface that you may not have had before. You've been working with customers for your product, but not necessarily customers for your uh for your your production and that's a different mindset it's a business to business mindset sometimes it's particular like i said if you've got a brand and you're co-packing that brand through somebody else that's that's your equity that's your baby that's your lifeblood that will keep you up at night because you're giving control to somebody else to produce it you need the right interface to manage that and i think a lot of breweries They're not used to thinking that way. And that's, that's a capability that needs to be invested, invested in possibly even some resources that need to be invested.
[00:13:51] SPEAKER_03: I would talk about data. They're used to managing their own data, their own inventory. What I'm seeing more and more is that they need to be able to be, like you said, it's one data sharing, customer service related data, but then it's about, you know, raw material inventory, finished goods inventory, and finding the most efficient ways to track their own separate from their clients, right? So that's what I've seen is typically a pain point. And then sometimes it's just being more flexible around who's buying the ingredients and what model works best, whether that's, you know, they're sourcing themselves or whether it's hybrid. So sweeteners is one that I find there's a lot of synergies where unless it's really unusual, sometimes they'll offer to source it for them or some of these natural preservatives or citric acid or CO2. I mean, there is definitely opportunities to partner together, whether it's for your own product and then offer to the clients that you're trying to manufacture for. And then the last thing I'll just add is that packaging, I've seen more, the better, Manufacturing operations are adding a bit of investment on variety packs. It used to be really hard to do that. More and more are adding some capability. And then also on the can side, more sizes and packaging options for cans, since cans has really taken off compared to bottles, just in terms of a lot of the emerging and smaller brands.
[00:15:32] Melissa Traverse: Excellent. And for those folks who are running beverage brands and running manufacturing for beverage brands out there, if they are looking to perhaps be in touch with a brewery who is taking on some of that additional work, would it make sense for them to reach out to Aggregate to find out who they are? Is that the sort of connection that you facilitate?
[00:15:55] David Van Weese: Yeah, it is one of the things we do, Melissa. So absolutely, we'd welcome a call from folk to do our best to connect to the right fit. Like Tim said, you've got to find the square peg for the square hole. So we would do that. But absolutely, we'd welcome calls.
[00:16:13] Tim Neer: Yeah, and not just for breweries, Melissa. Anybody that's looking for co-manufacturing, sometimes There's a lot of entities that are not breweries that have capabilities as well. So yeah, feel free to give us a call if we can help.
[00:16:28] Melissa Traverse: Let's move on to a topic that we certainly are hearing a lot about still. Global sourcing has gotten trickier, tariffs and supply disruptions have not gone away, and they are influencing supply chain more than probably any of us would like. What tariff or trade changes in the last six months have most directly affected beverage margins?
[00:16:52] Tim Neer: Well, I'll take a crack at this, and Dave and Beth know this has been a huge part of our life for the past year, maybe more, but certainly in the last year. Nobody was surprised that the tariffs came, okay? It was well articulated that in the change in administration, that was something that was going to happen. But I think there was a surprise, number one. at how fast and how volatile they've been, okay? So they're on, they're off, they're this, they're that, they're 25%, they're 50%, they're that country, this country. So that's been tough, okay? Because supply chains often don't move that quickly, especially if you've got long lead time items, or let's say an agricultural crop that gets harvested once a year, right? So that's been a learning. The second piece I think that's been also I guess a knock-on effect or consequential effect has been the underlying cost of that commodity, whether it's been affected by tariffs or not. So the uncertainty that's been driven into the market by what is going to happen next year, I think has created some inflation. in addition to the tariffs that we didn't expect would be as big, as fast as it was. There's a couple of great examples of that. Aluminum, other metals, silver, copper, but aluminum is used in beverage cans, so that's really close to home for us, has been a great example of that. We've also seen fairly significant oscillations in the cost of freight. There was a big bump last January. just over a year ago in the cost of freight as people rushed to get their goods across the border. That created some short-term spikes in demand for freight, and then the months after that quickly came down the other way. That's unusual in a large market like North America to have those very quick oscillations up and down. What we've tried to do, Melissa, and what I would encourage all the people watching this podcast to do is number one, understand which areas you have the greatest exposure in, either on the cost of the tariff itself or the cost of the underlying commodity that's being driven by tariffs or availability of that item, if there's an availability concern. Number one, identify them, and number two, take some action. A lot of folks that took action are glad that they did, Maybe purchase things before they got too expensive. You don't want to be the person that brings something over a border the day before. Actually, you do. You do want to be the person that brings something over the border the day before the tariffs go in and not the person that brings it in the day after, right? Some of these are even tactical decisions that can make a significant difference in your cost. Those are the things that they've added an extra level of complexity, and most importantly, an extra level of action that needs to be taken in order to get ahead of these things. Net though, we don't see them changing in a beneficial way downward quickly. We actually thought some of these might have been resolved more quickly than they have been. it looks like we've got a long-term disruption. Now, it's been over a year, and we expect it to continue. Last point is, and I'm sure Dave and Beth have some thoughts around this, we still have plenty of trade negotiations happening. The USMCA is a great example of that. I used to know it as NAFTA, the North American Free Trade Agreement. The US-Mexico-Canada Free Trade Agreement is up for renewal in June, and the discussions have already started. All of those categories that were in there, were immunized, safe from tariffs, and maybe they won't be anymore as of June. And these are huge trading partners with the U.S. Canada, Mexico, and the U.S. It's the largest trading bloc. Certainly, it affects us most directly for many of the things that we use as beverage producers. Anything from raspberry juice from Mexico to glass bottles to grains to paper. So this is something that's really continues to be on our radar. And we think that this coming year may be even more choppy than 2025. I hate to say it, but that's what we think is coming.
[00:21:07] David Van Weese: Just to play off a few things Tim talked about, tariffs right now are creating instability and a destabilized marketplace. However, if you look back, whether it was a Ukraine war affecting supply chain or demands in certain products, or whether it was COVID, we've had now pushing half a decade or a bit more of turbulence in supply chain. Versus the 10, 15, 20 years before that was very static inflation, guaranteed supply. Everybody was going towards just-in-time management and taking inventory out, which is a higher risk. And we've gone into a new era, and Tim touched on it, we don't foresee that changing. With tariffs in particular, but in general, I think it would be wise if you're running a company to expect turbulent times and to expect or plan for that and have resiliency in your supply chain. where you see blips, take advantage of those blips. Treat your entire cost structure as your opportunity to take costs out of your business because you know one or two categories at any one time are going to have an inflationary aspect to it. So manage your whole cost structure accordingly.
[00:22:33] Melissa Traverse: And are there any ingredients or packaging components that you can point to and help our audience understand that they may be more or less exposed to future trade volatility? Tim, I heard you mention aluminum cans. I feel like we just got past that as well. Are there any things that pop out in your mind that are on your radar for things that folks should really keep an eye out for if they're part of their supply chain?
[00:23:00] Tim Neer: Well, let me talk about aluminum for a second. And then, Beth, I know you've got some specific ones you've been thinking about from places in Asia, for example. Aluminum's been, I don't think we're past it. There's elements of the aluminum cost that are four times, 4x, what they were this time last year. So there's a North American premium on aluminum. It's normal. It's been there for a long time, and people love it or hate it, but it's there. And it's now trading in the high $0.90 per pound, where this time last year it would have been in the 20s. And that's not because of the direct impact of tariffs. That's the financial market that's helping to manage that. And now I think Even speculators are involved. We've seen an even bigger bump with silver, which aluminum tracks sometimes against silver and commodity. And at the same time, copper, I should have said. At the same time, our demand here in the United States hasn't really shrunk at all. We're still buying as many beverage cans. We're still buying as many aluminum cars, electric vehicles would be the driver there. And there's not been a lot or any capacity added to it. So that's a 50% tariff on imported aluminum that's now driving this really significant run up in pricing, even for aluminum that's not imported. And then I also look at some of the big items that are being imported from places like Canada and Mexico. Glass bottles would be a good example of that, where right now they're under the umbrella of that USMCA I mentioned earlier. But there could be some risk associated with that. On the flip side, I do see more and more items available in the United States. There's a wonderful hop growing community. Almost 40% of the world market of hops is grown here. Likewise, a lot of other agricultural products, packaging items, etc., but there's just not enough capacity here to take everything that would have been imported and make it here. Like I said, an agricultural crop is a once-per-year thing. So, you have to wait for the next crop year for that to catch up even longer with something like hops, which might take two or three years to mature. So those are some of the broader themes of bigger items, but Beth, I know you've got some items you're particularly worried about.
[00:25:29] SPEAKER_03: you know, the advice on just understanding country of origin, whether it's packaging or, you know, ingredients. Ingredients like citrus fruits have been a bit volatile and tighter than normal. Depends upon the citrus. Florida was not able to sustain, you know, production and the groves are not yielding what they did. So we're importing a lot even beyond Mexico. So South America, You know, there's many different places citrus fruits come from. And as well as there's some very particular fruits, more exotic fruits are being used in beverages. Those are coming, you know, from overseas, as well as, you know, pineapple comes from Thailand and Indonesia. And there's other places that, you know, monk fruit as a sweetener, the sweetener category. whether it's sugar that we don't produce enough in the States and we're always importing between Mexico and into Canada, as well as, like I said, some of these other alternative sweeteners that are being used in the more natural beverages today. There's just, I would say there's a long list, but it's more just about making sure you're clear about Where's the country of origin? Is there an alternative country of origin? You know, just tracking what's happening with the terrorists related to those countries, strengthening your supplier relationships, and really just making sure that you're flagging those potential ingredients, whether it's sugar packaging, you know, or citrus. But it's just keep an eye on it. And it's not a panic situation, but it's the more you understand where your ingredients come from and the capacity within the region and within your supplier network makes a big difference.
[00:27:24] Melissa Traverse: And is the best place to get that information that will help you really map the country of origin, is the best place to get that information with your supplier? Is it somewhere else? How tricky is it to get the real information that you need?
[00:27:37] SPEAKER_03: I would say it's not particularly tricky, although you have to sort of you know, do the five why's, they always teach the questions, you know, the way you ask questions, because you're required to have spec sheets along with, you know, any of these ingredients and packaging and, you know, certificate of analysis, which comes along with the product that tells you, you know, what the product is and where it's coming from. But what sometimes happens is that when they get repackaged, so for example, you could get a product in from overseas that comes in through a distributor, And that distributor will repackage it and they will put their own name on the spec sheets. And so sometimes you actually have to ask, what is the actual country of origin? And where is my product coming from before it got repackaged? So sometimes if you know you're working through a distributor versus a direct grower or supplier who gets it direct from the farm or from their internal company, you might want to just double check. But it's not, they should be transparent and the information is absolutely available. So I would say for the most part, it's available on the spec or the COA. And if it's not, if you're getting your product, if you're smaller and you're getting it through a distributor, just ask them and they will tell you.
[00:28:56] Tim Neer: Take a look at not just the ingredient itself or the package. but the components as well. So if you're buying something and 90% of that is coming from that country and 10% value added here in the United States, that one's going to be fairly significantly exposed to. So go a level or two up, look at what other options are available. If you really need that thing from overseas or is there a North American solution to it as well? It could be. That might take some reformulation and testing. And number three would be maybe now's not the time to be just-in-time inventory on some of those exposed items. Maybe hold a little bit more, or if it's a long lead time item, maybe get some more orders than you normally would just to get ahead of some of this disruption so that you're not reacting but being a bit proactive there. There's many solutions. Those are three lead ones I'd suggest that people look at to help.
[00:29:44] Melissa Traverse: Great advice, Tim, and hopefully this conversation will help folks out there do just that. Beth, I heard you reference sweeteners, which brings us to our next topic. That's beverage formulation and sweeteners. And are you see formulators leaning towards any particular ingredients? I mean, I know here at BevNET, we're seeing more and more brands use maybe a little bit of sugar in addition to some allulose or some monk fruit. blended sweeteners certainly is something that you all have talked about. We certainly see a good amount of allulose and monk fruit combined. What are you seeing in terms of ingredient trends out there?
[00:30:22] SPEAKER_03: Stevia historically has come a long way, but it's had a sort of, you know, some folks love it or hate it relationship. I think that there's definitely some education to the consumer because stevia, you know, what it was, it didn't taste just like sugar. And now there's, you know, definitely newer types that mimic that taste a bit more. Like you said, combining them with monk fruit, some allulose options, And even honey and date syrup are getting used in very small amounts. It's not a big trend, but we're seeing more and more natural alternatives, like you said, combined with some of these other sweeteners to really round out the flavor and to meet the consumer where they're at. That's what they're looking for. The newer, you know, Stevia, The glycosides are basically what makes up the different, the way they extract from the plants. And the more expensive stevia is becoming less expensive. So what used to be everyone was using Rev-A and didn't taste so great. And then Rev-M came out and Rev-D. folks are finding it's cleaner, it's less bitterness, but they're still finding it's not quite the same as sugar, which is why. One, they're combining them, but also what they're finding is that high-quality stevia from one manufacturer to the next isn't all the same, so it's always best to test and to do that as part of your formulation. Then last, I'll just say that In the product process, it's good from a sourcing perspective to make sure that you understand, it's almost like the more complex your sweetener profile is, the more robust it is. So if one ingredient all of a sudden is not, you're not able to source monk fruit, it's easier to pull it out than if you relied solely on monk fruit, or if you only were sourcing stevia and the price goes up dramatically, it gives you a little bit more flexibility to dial one up or dial one back. And that has been really powerful.
[00:32:35] Melissa Traverse: I've certainly heard a couple of beverage brands recently talk about the higher quality stevia and that they're using that in their formulation. How would someone identify whether that's what they're looking at or not? Like, how do you differentiate between the higher quality stevia and the other stuff when you're going, maybe you're doing a reformulation, maybe you're formulating for the first time? How do you figure that out?
[00:32:59] SPEAKER_03: Well, one is just making sure that you're, you're having your suppliers educate you and you're asking to, you know, you want to see the spec sheets. You want to understand how pure your product is. So typically there's somewhere in this 95 to 99%. range in terms of high purity and single sourced or single source, sometimes they combine them. So some of these suppliers will combine what they call Rev A and Rev M together, like they'll create their own blends. And so each supplier Has different ways of either giving you a pure strain or they can blend them. So it's really just about. Talk to suppliers asking questions, you know, work with partners and even, you know, when you want to make sure that you're understanding, it's all about taste and flavor. So it's. Getting sample, all suppliers are very interested and able to send samples along with those spec sheets so that you can test and taste. I know a lot of times I've started to see some of the aggregate clients who are really interested in testing in their new formulations as they're exploring sweetener options. And the only way is to get the information from your supplier, the spec sheet, and then try it in your formulation.
[00:34:20] Tim Neer: There's a lot here on sweeteners and we do a sweetener 101 session or 201 session because sometimes, especially the brewers, this is a world they're not familiar with, whereas a soft drink manufacturer, this is. normal bread and butter for them. Don't forget about just old-fashioned organic cane sugar or the corn sweetener. There's a lot of that out there, too, and also the sweetness that comes from things like fruit juices you might be able to add in there, which comes with its own complications around other technical needs. But there's a lot of ways to execute sugar and sweeteners. It needs to tie into your brand promise. I mean, if you're all natural or organic, you better make sure you're all natural and organic. Or if you've got gut health, then you better focus on that. So those are the sorts of things we also help with. But just understanding the entire universe of sweetening options, I think, is It's a bit bewildering, frankly, and don't assume that there's just this one or that one or the other one. There's a lot of ways you can accomplish the goal. So I would start really high level and understand what's available before you go down a particular path. That's been a key learning even for me over the past couple of years as we've had new options come available, but the traditional ones still exist. is what are you looking for for the beverage and how does this universe of options apply most appropriately to you?
[00:35:49] David Van Weese: Very similar to the picking the co-man, Tim, that we talked about where have your internal strategy and direction set before you go down that path of what's the best sweetener. Think about if you go to a grocery store today and you'll have a double-aisled 60-foot set of beverages and stand in the middle of that and then ask yourself a question, which is the best beverage? Well, it's like, well, it kind of depends, right? What am I looking for? What's the occasion? What's the need? So it's a little bit like that with, you know, whatever product you're developing or, and then the choices of the inputs to that product. It's a big world out there.
[00:36:27] Melissa Traverse: It is certainly a big world, but I feel like you all are making it a little bit smaller in a really great way with the information that you're providing. This brings me to our last topic. Now, everything that we've talked about here today really does focus on supply chain and how to minimize supply chain risk. One of the ways that brands can do this is by finding backup suppliers. This was a tip that you all provided that I think is really interesting. How should operators prioritize which of their inputs need backup suppliers? And I think, again, this is really especially helpful for those brands who are maybe more in the emerging phase and maybe aren't able to get backup suppliers for every single ingredient they have. How should operators prioritize which inputs that they need those backups for?
[00:37:13] Tim Neer: The easiest is number one, but it's the one that most people forget. What's the one thing that'll shut you down? It could be the least expensive thing you buy or the small, it could be like an ounce or something. If that's gonna prevent you from manufacturing and selling your brand, that's the one you need a backup supply to. And if you don't have a backup supply, that's the one you need a supply chain strategy to manage that risk, because that's a high risk component. And maybe that's a bit more inventory or something. But number one, understand your risk profile, even on the very small items, especially on the ones that can shut you down. Number two, and this is the more common one that most people look at, What's the most expensive or most costly item? And then make sure you've got, and that's more obvious, I think, but understanding what you have in place in terms of backups. Also making sure you just don't have the backups like in your contacts, but you actually can use them. Are they qualified? Do you have a commercial relationship? Do they need to do a credit check on you before you can make the first deal? Maybe from a smaller brand, unless you mentioned startups. Maybe you might have to pay cash on delivery for some of these things as well. So just understand what it would take in order to get those high cost, high dollar amount ingredients in place. And then the last one I would say is make the appropriate formulation choices. And any time, and Dave, you and I have joked about some of the things we used to do where you had some very specific ingredients. they get on the label and then now you have to have those that all of a sudden that crop gets hit by a hailstorm or that country is affected by a tariff or something like that. So, if you don't have to have a specific thing on there, like from this country or this specific ingredient, don't do it. Just please don't put it on your label because that means you have no choice. You've actually you've made your supply chain more, that's a name I just. I was gonna say. I like it, I like it.
[00:39:16] David Van Weese: I'm calling it a grammar check on that one.
[00:39:18] Tim Neer: Coming out of COVID and in this world going forward, you wanna build as much resilience into your supply chain as possible. So do yourself a favor and try to do that right back to the formulation and branding standards.
[00:39:29] David Van Weese: Well, and Beth gave a strategy on that. Don't be 100% committed in one ingredient. have a mixture of ingredients, you can dial one up or one down more easily than if you're 100% committed. You know, Tim always kind of, in a way, jokingly challenges, what's the most expensive thing you have in your supply chain? And the answer is the one you can't get, right? If you can't get a can, and you need cans to fill your product, well, it's pretty damn expensive because you're out of business.
[00:40:02] SPEAKER_03: Right, and I'd say it's most expensive, longest lead time.
[00:40:06] Tim Neer: That's right. And Beth, you were reading my mind there. Anything that you have to consider putting on an airplane for air freight because the lead time's too long to put it on a boat or a truck or a train, those are the ingredients. You've got to find alternatives as fast as you can because you know they're going to continue to come back and create problems for you, even in a stable supply chain environment. which we're not in right now. We're in a risky time right now. Lots of great discussions on that one, Melissa. I think just in general, as a North American supply chain before COVID, pick the industry, pick the category. The focus was how can we be as lean as possible, just in time, close supply chains, no inventory, concentrate into one supplier to drive scale or efficiencies of transactions. Maybe we went too far because we took all of our buffers out of the system there. And then when we have events like we did at COVID or back to the Ukraine war, like we are with tariffs, you lose your flexibility, and that was a bigger problem, I think, than we realized, unfortunately. Supply chains like stable, steady states, and we're not in a stable, steady state right now, so we have to change our behavior appropriately.
[00:41:23] SPEAKER_03: And working with your partners is the one, and that's why I'll leave you with that, is that the, ask your partners, both your co-mans, your raw ingredients suppliers, your packaging suppliers, to work together to see where synergies exist and they can help eliminate some of the risk or some of the lead time.
[00:41:41] Melissa Traverse: Well, we certainly may not be in a stable, steady state right now, but we certainly appreciate all of the information and advice that three of you shared with our audience today. Thank you so much, Beth Brown, David Van Weese, and Tim Neer from Aggregate. For any folks out there who want more information, Aggregate, A-G-R-O-W-G-A-T-E, partners can absolutely help you with anything that you need, that you heard over the course of this conversation. So thank you so much to the three of you for all of the excellent advice. And for everybody out there in the audience, thank you so much for joining the Non-Based Podcast. And we'll see you next time. That concludes another episode of the Nambase podcast. If you enjoyed the show, please leave us a review and follow us on your listening platform of choice. You can also watch and listen to past episodes on nambase.com and don't forget to join our Nambase Slack at slack.BevNET.com for company updates, industry networking, and community discussions. See you next time.
