Finding Sweet Success with Sugar Free Beverages

One fateful dinner party led Cristina Ros Blankfein and Jennifer Ross to ideate the zero sugar beverage products behind Swoon. The ladies got to chat about Jennifer’s type one diabetes diagnosis, and the two of them wanted to create sweet beverages without the health impacts of sugar. In this episode of Shopify Masters, Cristina shares with us their approach to finding and working with flavor scientists, manufacturers, and trade shows.

For the full transcript of this episode, click here.

Show Notes

• Store: Swoon
• Social Profiles: Facebook, Instagram
• Recommendations: Privy (Shopify app), Klaviyo (Shopify app), Postscript (Shopify app), Yotpo (Shopify app), Loyalty Lion (Shopify app)

How one dinner party led to a multi-product beverage business

Felix: Tell us about the evolution of the business. Where did it all begin? 

Cristina: We came up with this because my partner Jen is type one diabetic. We're very mission driven in wanting to decrease sugar consumption, but also realistic in knowing that we have to create a product that still gives you that taste and feel–that super celebratory happiness of sugar. It feels great, and that's why people turn to sugar all the time, but we all obviously know the negative health impact. So we wanted to replicate that feeling. We got started because we were in business school and Jen came over to a dinner party that I was hosting. I love to host. I'm Cuban. I was making a mojito, and as I'm sitting there looking at my diabetic friend, I’m pouring in a cup full of white table sugar to boil it down to make the simple syrup. I realized, "Oh my goodness.” It made me realize how bad a lot of the things that we drink are for us.

Then we hopped in the car, rushed over to Whole Foods, thinking, "Whole Foods, great ingredients, great products, it's healthy enough," right? We couldn't find anything that made sense for her, other than, quite literally, soda water. That really set us on our journey. Our first question was, "Do things like this not exist because they can't be made?" From the beginning, we were super hyper focused on the taste profile. We have a line that includes simple syrups, cocktail mixers, and then most recently we've launched iced teas and lemonades.

Felix: Were you in business school with your partner? 

Cristina: We were. We were classmates and we were actually seatmates, which struck up our friendship. A little bit of happenstance got us here.

Felix: Were you both interested in entrepreneurship specifically? 

Cristina: Honestly, no. We were both open to it, but we weren't like white-boarding, like, "Let's just come up with an idea." We really came at this as consumers.

The highs and lows of a two year research and development phase

Felix: You discovered that there was a need here, and that there currently wasn’t any solution. The next question was “why hasn’t anyone invented this yet”? Where did you go from there? 

Cristina: We started off by trying to create all the flavor profiles that we wanted to make with kitchen ingredients, including sugar, obviously. Then we took it to flavor scientists to help us understand how to make it, but without sugar. We used monk fruit. We did a whole battery of tests knowing that our true north was that we are going to have a zero grams sugar product. What are all the different alternatives? We very much wanted to be plant-based. We didn't want to replace one thing that's not great with something else that's not great, like aspartame.

So we really looked at the world of what makes things sweet, that’s plant-based, that has no glycemic impact. We did so many trials and testing around different alternative sweeteners, and landed on monk fruit as the ingredient that we felt blended the best and created the smoothest flavor. Making the simple syrup was a two year R&D process, because it is so challenging. Sugar is a pretty powerful ingredient, and it's so challenging to hit the rounded taste profile of sugar. We really worked closely with bartenders and baristas–all the places that simple syrup is used. We were lucky enough to get to go to the Bon App test kitchen, and really do so many blind taste tests to understand how to replicate that full mouth feel of sugar.

Felix: You mentioned you started in your home kitchen and then took the idea to the chemists. How do you find a flavor scientist to work with?

Cristina: When we started this, we were like, "A what? How do we even go about that?" We were in business school, so we were lucky enough to have access to what was called the iLab. It was an innovation lab that brought together entrepreneurs, and operators in many different industries to help students out. We were in Boston, which has a really interesting tech scene, but also an interesting food tech scene. Through that, we connected with somebody who put us in touch with the first flavor lab we worked with.

Felix: It took two years to create the simple syrup. What did that process look like? 

Cristina: It took the flavor scientists and a bunch of other trade specialists to hit the flavor because monk fruit is 200 times sweeter than sugar. You're using small, precise amounts. We use things to make it sticky, a little bit tacky, to give you that lingering sweetness. A lot of high-intensity sweeteners have this “bam,” peak. I’m sure all of us have experienced it. It's not fulfilling in the same way. That's what we really wanted to achieve. It was a lot of tinkering, a lot of measuring, and tweaking.

It’s an art as much as a science, with precision. The other thing we've learned–and I'm sure any chef, bartender, or barista would also say–is ingredients and taste all come together differently. When you reduce the sweetness a little bit, all of a sudden, the impact is that it's actually sweeter, because in changing that balance, you shifted the citrus–the acids and bitters. All of these things come together. It's a really complex process.

The other part of commercializing food and beverage products is that you can get something to taste great and be extremely balanced in a lab setting, but taking that and making large quantities of it can also change the flavor, because of the way we heat the product in order to not use artificial ingredients as preservatives. We have to create a vacuum, and so we heat it and create a vacuum, but the way that's done on a small scale versus a large scale alters the product.

Felix: There are lots of considerations to make as you scale. You’ve now developed the product line to multiple products. What was that development process like, introducing new products? 

Cristina: We ended up introducing the simple syrup in 2019. We took the approach of focusing on the food service world. We had developed some great relationships. We're also based in New York where the food scene is amazing. We worked with some top bartenders and baristas to really help us out. That's where we introduced the product initially–through the trade–and for customers to be able to interact with it. Things drastically changed for the trade-in 2020 when COVID hit, especially in New York, where we had a lot of shutdowns. We ended up launching our mixers under the Swoon name, in March 2020. That ended up being pretty online. Later on, in August 2020, we launched our line of lemonades and ready-to-drinks.

A lot of it was just following the consumer. We got to the simple syrup because we were making mixers, but our trade partners kept saying, "I'd love to use a monk fruit simple syrup instead of the full blended mixer," because that gives them much more flexibility. We launched the simple syrup. In working with the simple syrup, we would often tease people at trade shows and sampling events with a lemonade because it was the easiest way for us to show how smooth and well-balanced the simple syrup was. We’d put one part Swoon simple syrup with one part fresh lemon juice, and then dilute it with water. It couldn't hide behind the bitterness of a coffee or a tea or the complexity of a cocktail. When we would make that, everyone would say, "Wait, I want that outcome. I want to bottle this lemonade." That took us to the lemonades.

How Swoon won over baristas and bartenders

Felix: You mentioned that you started out working with bartenders and baristas. What are the pros and cons of introducing a product to the world through the service sector? 

Cristina: There’s a few things. One is that you have to develop your partners, not only as your buyer, but also as your sales team. When you go to a bar, the bartender really is the gatekeeper. When you go to a coffee shop, of course people often have their order, but they still ask for advice and opinions. It's this layered relationship where you both are looking to these gatekeepers to bring in your product, but then ultimately sell it in a slightly different way than is the case when you're talking about a CPG product at retail. Obviously online, some of those gatekeepers don't exist.

Felix: I can imagine there needs to be some sort of incentive for a barista or bartender to introduce a new product to their customers. What was your approach to that? 

Cristina: It really comes down to relationships. At least that's how we've conducted our business. At the end of the day, people want to do business with people that they like and trust. The majority of our focus was in developing those relationships, more than anything. You're absolutely right. A lot of selling and sales strategy is understanding your customer.

One of the hard things, when you're at a bar, a coffee shop, or a restaurant is that they have so many demands coming at them from so many different angles. They're on a tight timeline, and really streamlining operations is super important. Adding new products and new steps is really hard, and pretty unappealing. We need to understand their pain points and figure out, how to create a solution instead of adding another step? That was important for us in terms of the bottle shape and size and just making sure that it worked with their operations and what they were trying to deliver to their customer.

Felix: You mentioned your initial vision or intentions to launch were cut short pretty early on. When did you realize it was time to think about pivoting? 

Cristina: We had been working on those relationships for about a year, and selling for about a year. It was less of a pivot and more of a shutting down. There were these moments in the summer where we started to get reorders again and hear from our food service partners. Going back to those relationships is super valuable. It was kind of needing to change all of us together. Those tracks that we laid are obviously going to continue to work through.

Managing B2B and B2C relationships in one business

Felix: What have you learned from your experience with the food service world? In a sense, you’re running a B2B and a B2C company. How do those relationships differ?

Cristina: The operational piece was really valuable to hear and understand. You can't have a product that goes bad once you open it. Or how to store it. There are a lot of components that impose different considerations when positioning toward the end consumer versus the service sector, because they have so much going on and they're so hectic.

The food service space has tight margins. I didn't realize how down to the fraction of a penny each bar thinks about when considering the cost of their drink and the different ingredients that they're putting into it. They work off very narrow margins, and so they're pretty precise about understanding how to create an offering that the customer wants and at a good enough price, but is not so expensive for them to make.

Felix: Is it typically the bartenders and baristas that decide whether to order your product? 

Cristina: Sometimes. It really depends on the restaurant group and how things are run, in terms of who does the ordering. You're right, there's oftentimes a general manager that does all of the ordering at these shops. There's several different parties to speak to.

Felix: What did the transition look like, when COVID hit and you had to start pivoting toward focusing on a B2C model? 

Cristina: We already had our own DTC presence on Amazon and also in some retailers. We weren't caught totally off guard. It was mostly just refocusing on those pieces. One of the hard things was, like many people early on, we just didn't know how long it was going to last. We did a lot of reshuffling of our team. We had people who are core infield sales team members who liked social media running a whole influencer program for us, and really being flexible and dynamic.

That was a really wonderful outcome within our team to see, just so many different people stepping up and challenging themselves in different ways. And having the mindset of, get it done and do what it takes. One of our lessons learned was the value of diversity in your business. Oftentimes you hear, don't have just one big customer that you rely on. I think we also learned, don't have just one sales channel that you rely on.

Boiling beverage sampling down to a science

Felix: You mentioned that a lot of your product development was guided by consumers. How were you gathering that feedback?

Cristina: This was a real challenge in COVID. We love sampling our product. We really stand by the taste and flavor of our product. We believe that the best way to market our product is to have people try it. Especially because it is a zero-sugar product. People hear that and they think, "Oh, gross, it doesn't taste good.” Or, “Is it actually good for me?" Being able to express–in this experiential way, "Hey, it's delicious," is super valuable to us. A lot of the feedback that we get is in sampling. In normal times, we run sampling programs, whether they be with our retail partners or in and around the cities that we are in and have a presence.

That's where we get the majority of our feedback. We also have our own site, and so we do reach out to our customers. We take customer calls. We survey our customers–trying to keep it always short and sweet. We email customers to develop those conversations. We also have a VIP Facebook group for some of our super fans, where we can dip in to ask questions and understand what problems that we can help with.

Felix: In order to do the sampling–do you just reach out to the venue to set up a sampling event? 

Cristina: Yeah, that's right. Some of it is understanding what events are already happening and reaching out to see if they want a beverage partner. Some of it is partnering with other brands and being on their shortlist for when there's a need. Some of it is working directly with our retailers to set up sampling events.

Felix: When you’re doing these sampling events, do you ask any specific questions to prompt feedback, or are you just trying to get their immediate reactions?

Cristina: We mostly just want people to taste it and to have exposure to the product. To be able to introduce our product on our terms, to give a little bit of the education behind it, a couple talking points. Having a nice branded experience is obviously also important. But really it’s just about having people taste it.

Felix: Were you able to develop marketing or educational content around the feedback you received? Did that go on to inform your marketing strategy? 

Cristina: Yes, absolutely. One of the things we learned early on in the lemonades and iced teas–which we launched in the middle of August last year–was that one of our products wasn't sweet enough to people and didn't deliver on the full flavor promise. The feedback was pretty immediate and based on that, we made it sweeter.

The key to surveys: Keep them short and sweet

Felix: What kind of questions are you asking in your surveys to optimize the business? 

Cristina: We really try to be short and sweet. We understand people are busy and we want to be able to get statistically significant responses, so we try to keep it short. We will survey differently based on a very clear set of criteria. We'll have a survey around, "What flavors do you want to see next?" And that'll be the extent of the survey. Then we'll have surveys around, "How'd you hear about us?" So we can understand what marketing channels are working. We have a survey around, "Where do you want to see us in terms of shopping? What is the best way for you to get our products?" We try to segment it so people have clarity on what we're asking/ trying to get out of it. Don't ask too many questions all at once. We see drop-offs sometimes when we have longer surveys.

Felix: Has there been any feedback in these surveys that have surprised or enlightened you? 

Cristina: One thing that is always extremely encouraging is the number of people that hear about us through word of mouth. Early on that is always a surprising metric to have. To have any word of mouth, let alone a significant amount of it, is surprising. We'd love to see that grow over time. The most important thing for us is to develop people who fold our product into their lives. That really helps us accomplish our goal of decreasing sugar consumption. When they're using our products, they're not having a sugary beverage. Seeing those word-of-mouth numbers are always the most encouraging, and still sometimes a little bit surprising, because you're like, "Oh yes, it is working!"

Felix: You also mentioned a Facebook group for super fans. How did that come about? 

Cristina: It’s a trend to talk about communities. For us, it really was about creating a group, because of our product. We wanted to understand the different ways people are using it, the different recipes, what brought them to it, what keeps them with us. We can have those conversations in our Facebook community. The other piece is not just having conversations between us and the customers, but between customers. Recipe sharing was one of the reasons that we originally started it.

Felix: You just built it up with an email blast? 

Cristina: Exactly.

Judge your production partners by how they handle mistakes

Felix: You mentioned the product line took two years of research and development, and that you’ve now expanded with three or four new products. What have you learned along the way that has helped streamline that process? 

Cristina: So much. There's so much that you learn after you do it once. A piece of advice that we got very early on that we stuck to is quality and having really strict quality control guidelines. That's something that eventually becomes second nature. What that means is when you go to a factory, what are the right questions to ask a manufacturing facility. What does their storage look like? All of those pieces you learn along the way. Over time we've gotten so much better at vetting our partners by knowing what to look for. That holds true across everything. The relationship piece as well. It's so much easier to be able to pitch a new product line extension–or even a new product line–to people who believe in our mission and see the value of our products.

Felix: What are some of the most important kinds of questions to ask when you’re vetting new partners? 

Cristina: A lot of it comes down to what happens when there is an issue and how do they spot the issue. Early on, we were at all of our runs, but at the end of the day, you want to get to a place with your partners where they're running it without you. You want to understand what their processes are, and their checks and balances throughout the process, to make sure that everything is going well. Understanding their internal processes is extremely important. Understanding how they react to finding something wrong. One of our early partners, and we'll always have so much respect for them because of this, but they caught an issue one time where basically they were taking an ingredient that was for one of our SKUs and putting it in the other SKU. They flagged that to us and they reran it on their dime. That level of integrity, of issue spotting, was extremely important to us.

Felix: You mentioned quality control guidelines. What are the most important things to pay attention to or talk to your potential partners about when creating a food or beverage product? 

Cristina: A lot of this can be very product specific, but to keep it more general, we have very strict recipe instructions around the product to make sure that it creates that vacuum seal that I had mentioned. It's not really a vacuum seal, it's more just to make sure that there's no air in the product so it doesn't spoil. Again, we don't use artificial ingredients. We need to make sure that they have tight boundaries on understanding the temperature that they're running our product at, what's acceptable in terms of receiving product, and how they store product. All of those go into their quality control guidelines.

Felix: How do you enforce these guidelines and make sure they’re being followed? 

Cristina: We still do go visit. We try the products and inspect all the products off the line. Obviously what matters to us the most is the integrity of the product. We care about the whole brand experience. This goes right down to labeling and having a slim margin of what's acceptable of proper labeling onto the cans and bottles, too.

How email automation and organic media help with retention 

Felix: Now, I know you had an online presence before COVID. What are some of the ways you’ve been able to drive that direct-to-consumer traffic? 

Cristina: We do a whole spectrum of organic and paid. We also really focus on the retention piece. We have loyalty programs. We're really excited about our loyalty programs, even though no one uses it this way. I'm so excited for someone some day to use it. Our loyalty program actually counts purchases that are made both online and in-store. We were excited about that piece. We built it out almost entirely with our email list and SMS.

Felix: How do you keep track of both online and in-store?

Cristina: With the receipt.

Felix: You have a big emphasis on retention. What are some of the ways you’ve brought customers back? 

Cristina: We review them all the time. We have design in-house, which helps to create that fast-switch ability to do a lot of segmentation and automation on email which has helped us with retention. Being clever and testing out different calls to action to bring people to site, really understanding the reorder cadence of the different SKUs. Then also making it a very specific reminder based on that, are all ways that we have reminded people to come back into the funnel.

The other part of it, too, is social media, right? The organic side does support, as does retail presence. Some of it is just reminding people of things like, "Oh yeah, I liked that. I should order that again." If they see a beautiful photo, an influencer posting about it, or they see it in-store, all of those for us are different touch points, even if they don't seem like they're as integrated with the direct call to action for retention.

Felix: Repeat customers are a bit initiative for you. Do you have an email flow for when you think they might be getting low on products? 

Cristina: Exactly. We’ll say things like, "Hey, you're probably running low at this point." 

Felix: You must have a great email drip campaign. Are there certain things you’ve found work really well for encouraging repeat purchases? 

Cristina: Giving people occasions and reasons has been helpful. We do pay attention to the holiday calendars, and create other use cases and occasions for people to purchase. Being mindful of why the customer would come back, and trying to answer that question, then marketing it in that way.

Felix: What platform does your team invest the most in for organic?

Cristina: Instagram has been the platform that we've invested most in for organic. We can really showcase beautiful photography by nature of some of our products, the ingredients. We design in-house, which also allows us to focus on a channel that has a lot of visual appeal. One of the things that we have always wanted to do is to make people feel the sugar without actually drinking the sugar. Using a lot of visuals to cue “celebration” has been important for us.

We are also enjoying dipping our toes into TikTok. It’s a really fun information exchange channel. One of the things that's interesting about TikTok in a way, as compared to Instagram, is that people actually learn stuff from it, and use it for educational purposes. Of course, there's all the silly dances and other content on TikTok. But again, just by the way that they're stitched together, there's a lot of blurbs and call outs as well. The speed of information makes it a really strong education channel. We're playing around by telling our take sugar down story and more humorous sort of zippy ways on TikTok.

Outsourcing content creation to the professionals–the influencers

Felix: What is your content creation process like for Instagram and TikTok? How do you ensure you’re churning out high quality content? 

Cristina: It's honestly a real challenge. Content creation is extremely labor-intensive, and takes a ton of creative time to have a point of view on it. Even just posting it. We really value content creators and the work that goes into it. We currently create in-house, but are increasingly reaching out to do gifting and influencers with content creators so that we can repost a lot of their work.

Felix: How do you identify influencers to work with?

Cristina: We consider a combination of things. We have influencers who've been wonderful partners of ours that we've built up over time who we go back to often. Really starting to develop and focus on those relationships is important. I'll be honest, I think this is an area that we can definitely do more work on, and want to do more work on over time. It’s a work in progress. We've worked with a great influencer agency to help us build out that roster. But some of it's as simple as getting on social and reaching out to people ourselves, as well as having inbounds from people who want to work with us.

Felix: How do you ensure that the influencer is emphasizing the health aspect of your product, and not just the fact that it’s a tasty new drink? 

Cristina: The reality is, you have to think about the influencers as really knowing their audiences and having their own brands, too. We don’t ask for that much control. Because what will work and resonate with their fans, they know best, not us. When it comes to the mixers and the simple syrup, we have a bright line rule, which is, if you're making something with our products, please don't make it with things that add sugar. That's our one request, because of why we started this and what we're trying to accomplish. We want to be able to show and showcase recipes that don't have sugar in them. Otherwise we really leave it to the content creators to create.

Felix: Speaking of the imagery, I really love the packaging. Talk to us about the development process behind designing the packaging. 

Cristina: That is more art than science, for sure. I know I've said this a few different times–we design in-house. We have two women on our team, Hannah and Brittany. And Hannah has really led all of the creative for all of our packaging. And it's so powerful to have somebody who is so steeped in the brand, really believes in the brand to do packaging. Because at the end of the day, we think our liquid and our packaging are actually kind of, one and two, our best marketing tools. Right? If it tastes great, people would just buy it. And if it looks great, that really helps to pull it off the shelf and communicates what it is.

And so going back to your question of having some experience. I think we've been able to develop tighter and tighter briefs over time of exactly what the call outs are and what matters for shelf appeal. And knowing that customers have like nanoseconds of time to glaze over the shelves. And making sure that our key points come through. Some of it is in language, but a lot of it is just overall look and feel impact.

How to differentiate SMS from other marketing channels 

Felix: What did the creation of the website look like? 

Cristina: We actually haven't done that much on our website since we launched in 2019. We've done some iterations to add SKUs, and a little bit of merch. The reality is, in terms of our DTC business, we do have specialized landing pages. We've iterated on those. That's been helpful, because that is something that we do keep refreshing based on feedback and conversion metrics. The overall website has stood the test of time, which goes back to the importance of building a powerful brand visually. If you have a strong point of view of what the brand is and how it looks, then it lasts.

Felix: Are there certain apps or tools that you rely on to help you run the business?

Cristina: Yeah. We use email capture apps, which helps with privy. We use Klaviyo. We think email is such a powerful tool for us for retention and communicating our brand, values, and products, so we use Klaviyo for email. We use LoyaltyLion for our loyalty program. We have reviews with Yotpo. We definitely use a lot of different apps.

Felix: Talk to us about the messaging you send through email versus SMS.

Cristina: Yeah. SMS right now is the wild west when it comes to marketing. It's just not super developed in the US right now. Any customer whose phone number we have, we feel a responsibility and like we really have to take care of that. We use SMS sparingly, and mainly for something that is of value to our customers. For example, we use SMS when we have a new product launch. We have exclusivity for our SMS list and our super fan customers to get the product first and have early access to it. We use SMS for deals. Again, something that's a real value to the customer. We don't use SMS as abandoned cart reminders or other things like that, just because we don't want to overload people on that channel.

Felix: One thing I love on the website is you have a section dedicated to recipes. When did you introduce that into the website? Have you found that it increases conversions? 

Cristina: We did it really early on. It comes down to being an ingredient. We wanted to give people ways to use it. It's definitely been a help for us throughout, and we see increased conversion rates with users who visit that page first. We've solicited recipes from our customers, from different trade partners, and really do like our recipe page a lot.

Felix: What do you think is going to be the biggest challenge for you and the business that you're focused on tackling this coming year?

Cristina: The reality is that we sort of are at this inflection point where we have historically had a strong online presence for sales. We're shifting to have our retail be larger than our online presence, just by nature of getting more distribution and bringing on new retailers. This year, one of our challenges is shifting a little bit the center of gravity for the whole team to think more about retail and the retail customer journey, retaining and talking to that retail customer. Digital is a very great tool to market to and to have communication with our retail customers, but it definitely creates a more arms-length relationship than when it is direct on our site, or even on Amazon. That'll be our big challenge–shifting the team, the culture, and the marketing to take care of and grow the retail channel.