SipCraft with Wes Sitser, #128 of Together Talks

We were featured in “Together Talks” from KLS, check it out below!

Some Background on SipCraft Beverage

Today's edition of "Together Talks" campaign, KLS had the opportunity to interview SipCraft Beverage and Repeak Energy Seltzer Co-Founder, Wes Sitser.

How they are different - The Entire Supply Chain:

Other companies only offer a portion of supply chains solutions. Such as manufacturing, cans, or ingredients. SipCraft can provide them all, and more.

Points of Contact:

They are a small team. Your direct contact will be with one of the owner's of SipCraft. AKA other beverage entrepreneurs.

Low Volumes and Cost

It can be really expensive to start a beverage company. They are 1/3 of the traditional start-up costs.

When did the company begin?

Middle of 2023.

Story of how it was created?

My business partner and I, we've been in the beverage industry. We started off by importing a coconut water from Australia, that taught us the business especially the marketing distribution. We didn't know much about manufacturing, but were working with a copacker in Vietnam. When we went to go make our own product, after working with them for about a year and a half, we pivoted to creating a brand called Mela Watermelon Water, my business partner and I created that.

Working with the copackers we started to understand and analyze price points and flexibility. Their business model was unique to what was being offered by copackers here in the US. Often, you're responsible for supply chain and procurement. But the company we were using did everything in house as sort of a turnkey solution. The biggest selling point for us was the ability to create a product with relatively low costs, but not sacrificing the flexibility for minimums.

They were offering lower costs, lower minimums, and ultimately that led to lower total costs of a project. This was eye opening and we saw an opportunity in the space for young, start up companies. We also understood that generally speaking, working with international companies can produce hurdles mainly with communication. We had to figure out how to navigate those challenges, but it afforded us such a great opportunity to get started and keep costs low.

We then sold our brand and decided we wanted to create another brand. We were in the process of finding another manufacturer and discovered a company in Sri Lanka. We made countless visits and started developing this brand. As we got more introduced to the company and the people, we thought they would be a great partner. We paused on our brand and transitioned to developing a manufacturing company with them.

We pitched him the idea because he had the expertise in manufacturing and we understood the market in the United States. We upgraded his manufacturing facility and started pitching this concept of lower cost, more flexibility, with lower minimums. We are able to provide all this while removing any concerns with language barriers. And we also believed in this pitch so much that we continued creating our new brand, REPEAK - energy seltzer.

What separates your company from competition?

Procurement: We'll do all that for the customer. But also, we have access to really unique things that you can get in the US, but it's not as high quality. For example, our own product, we use a lot of ingredients like passion fruit, pineapple, mango, and we are getting those right at the source. They aren't diluted or shipped in concentrate, losing a lot of quality.

Sourcing:

We're close to India and China where a lot of different things are produced like cans, for example, are much cheaper. The supply chain, we have access to the unique things, but also at lower cost.

Creating a beverage:

We assist with beverage formulation, graphic design, packaging, anything that allows your business to be more streamlined we bring value to.

Importing costs?

There are other costs than just freight. While we do have to ship it internationally, if you still break it out on a per-can or per-case basis and compare your cost of goods, our model is still significantly lower.

Not only from a cost perspective on a per-unit basis, but from a logistics perspective of not having to ship all these ingredients is another huge benefit. Because we're handling a lot of the procurement or we have it already in our warehouse, it is one less thing a client has to manage.

Reflect on a goal you set and how it made you feel to accomplish it?

Systems implementation. Procurement has so many moving parts. This was a larger undertaking than I had imagined. Coming from our experience of creating the brand and product to handling the manufacturing we learned what was required. As we developed this company we learned how important systems were, especially to scale. Going through that trial and error and correcting any systems that weren't fully functional was necessary. I believe it has positioned us to make a strong, aggressive push in the second half of this year.

Goals for upcoming year + Next phase of the company?

I believe we're in a position to scale. We will continue to focus on our processes and the customers that we have. Although our systems have been implemented and are producing very well, we will continue to evaluate if we can be even more efficient. By keeping that focus and trajectory that will allow us to focus on sales and customer acquisition. Onboarding new customers will be the first step of our scaling process. Our goal is one customer per month, which doesn't sound like a lot. However, when the process is as in-depth as ours it is a little longer sales cycle. Ultimately one new account per month would be a great start for us.

What were your concerns about making this transition?

it is always what you don't know. When it comes to actually the functions and what needs to be done I think that's the biggest concern. The beverage brand we created was different than our manufacturing company. There are some things that still apply or overlap which has been helpful. But the biggest thing we have learned is what it takes to build from scratch and implement systems to properly scale.

How did the beverage brand help during the transition?

We understand the pain points of a beverage brand very well. We were there, we experienced it. In the beginning, every dollar matters. When we pitch to a customer that our low minimums and costs allows them to control their inventory and still allow them to be profitable it is so impactful. A lot of companies are running at a negative trying to scale and get their company big enough where the volume they order makes them profitable. But if you can't sustain operations to reach that level, your company can't succeed.

This is a huge issue and we know our structure will allow many more companies to not only enter the market, but be more sustainable. Our experience is pretty invaluable and understanding the customer's thought process has been very pivotal.

How have you grown as a leader?

When you've done something once and then you do it again, you realize that there's just so much you don't know. There's not one silver magic bullet that's going to solve all your problems. Instead it is a constant challenge to learn, evolve, and adapt. We talked about efficiencies of our systems, but that also applies to me as a Co-Founder and leader.

Describe the journey of being an entrepreneur?

Figuring what it means to be the CEO. Even if you're the only employee, still invest the time to learn what that entails. I believe that is one of the biggest ways to unlock a way to scale your company. It isn't just making decisions, but understanding what is required to execute and having a plan to actually implement and follow. Understanding where to invest not only resources, but time is arguably the best way to track ROI and make your business operate as optimally as possible.

When was the first moment you felt like you could breathe?

We haven't put a dime into paid digital marketing. When we started having requests come in through our website that was the moment we took notice that we have some traction. People went out of their way to say they found our concept interesting or were referred to us.

Do you have a moment that brings you the most joy?

Definitely the first production runs we do,. We go through all the quality control steps and at the end the products taste amazing. That is the biggest win because we know how much goes into it to get the product to the finish line. Having all of our systems and processes firing on all cylinders and complete a production run without any issues is the best feeling for us.

REPEAK - Energy Seltzer?

There was a company and their idea was a sparkling water with caffeine. Often times drinks in this space can be unhealthy, we did some market research and felt like there was an opening in the market. There are tons of energy drinks that claim they are healthy but end up tasting like candy. Even though they claim zero calories or zero sugar or whatever, in order to get there usually it includes some unhealthy ingredients. We decided to create a product that taste good, uses only real fruit juice, under 100 calories, never any added sugar or sweeteners, and has caffeine.

We believed it would appeal to consumers who go after energy drinks because ours still offers sweetness, but it isn't so sweet like traditional energy drinks. The fact that in the space it has only natural ingredients also makes it very unique. Anyone who wants a healthier choice, we are providing that.

Piece of Advice

Building systems and understanding what it takes to be a CEO.

That doesn't necessarily mean you have to build automations or anything, but just going through and really understanding what a CEO is and requires. Even if you're an employee, understanding all the parts of your role and breaking it out. Identifying which are most important and being clear on the highest objective. When you can highlight the objectives with the highest ROI, you can maximize your output and efficiency.

It took me way too long scrambling around doing different things. Sure I was working, but it wasn't structured or with a plan. When I started understanding where my time was best spent and how to maximize my efficiency it was night and day. I think it will make a huge difference for a lot of people because you're really clear on what needs to be done from a high level.