Kevin Klock has more than 23 years of experience in the food and beverage industry. Last year he took Talking Rain to its most successful year in the history of this 29-year-old company, which is now one of the world’s fastest growing beverage companies. An engineer by training, he helped the business grow 500% in revenue in the first two years in his role as president. Claire Phoenix spoke to him about achieving profitability by balancing business acumen with operational efficiencies.
What is your business background?
I am a graduate of Oregon State University with a BS in chemical engineering, and my approach to business management marries this operational and scientific background with a passion for building strong teams that collaborate to achieve success. I have a keen understanding of the food and beverage industry from many perspectives and expertise in turning around businesses.
My first opportunity to lead a business to success was at Ralston Purina, soon after graduating from college. From here I spent seven years in a variety of operations and leadership positions at Nestlé. I moved on as a plant manager for Dairy Farmers of America in a facility producing Frappucino for the Pepsi/Starbuck’s joint venture.
What enables you to turn a business around?
There are two main elements. The first is recognising the importantance of people and never underestimating the team around you. I also have a unique ability to see a global view of the business due to my background – as the production supervisor at Ralston Purina overseeing international operations, and turning around an unprofitable manufacturing facility as the production manager for Nestle’s Food Services Division. I always have a 360 vision.
What has been your role at Talking Rain?
I joined the company in 2006 as vice president of operations, becoming senior vice president in 2010, then president in 2011, to the position I currently hold as president and CEO in 2012. We were faced with an investment hold from our ownership team and were given a goal to come up with an idea of where we needed to put our resources. We decided to strategically focus on Sparkling Ice beverages – a brand that had been around since 1992. It was the drink that we always had in our fridges at home and was the most requested beverage when guests came over. Our goal in 2012 was to secure 40 top retail partnerships, at the end of the year we had secured 39 of the 40. With new national retail partners and an out of home campaign focused in our key markets we grew from $10 million to more than $500 million in retail sales in just four years. With our accelerated growth, we then needed to build an infrastructure internally and externally to continue the momentum. Building a network of distributors and co-packers was crucial to our success. Internally we needed to build out each department including customer marketing, category management and field marketing. Our supply chain department went from one person to a group of 35 and we focused on advancing our information technology infrastructure.
What is special about Sparkling Ice and what does the range comprise? ie in what formats and flavours is it sold?
When we first launched in the US, we noticed that there was a category that had yet to be defined. Everyone was familiar with the colas and lemon limes, that there was definitely category fatigue. What Sparkling Ice does is raise the bar for soft drinks all round, being packed with a flavours and subtly carbonated, creating a much more refreshing and enjoyable experience. The consumers receive the same experience as they would when they drink a soft drink but without all the calories. We combine sparkling water, natural flavours, fruit juice and vitamins to offer a great tasting lightly carbonated beverage. The look, taste and smell are all consistent with the consumer’s expectation of what they should experience. It delivers ultimate refreshment. With the success of our single-serve business in the US, we’ve been able to grow the business to where we now produce not only single-serve but 8oz can fridge packs, multipacks and variety multipacks.
Currently in the UK and Ireland, Sparkling Ice is being sold in 500ml bottles and available in three of our top selling bold flavours, Orange Mango, Peach Nectarine and Black Raspberry, at an RRP of £1.49 in the UK and €1.99 in Ireland. We’re also looking to introduce the Kiwi Strawberry flavour into the UK market by the end of the year.
How is it produced? Hot fill, cold fill or aseptic?
Cold fill – to achieve the flavour profile we’re looking for it provides the best method.
What is your view of the obesity epidemic?
Years ago we decided only to produce beverages that are low in calories and that do not contain cane sugar or high fructose corn syrup. It’s a complex social issue worldwide and looking at the shopping cart added sugar is throughout all food and beverage; so focusing in on one industry and its affect on people’s lifestyles won’t solve that problem.
What are your plans for Sparkling ice? Is it already available in Europe?
We are planning to test selected foreign markets and develop a proof of concept, allowing us to continue to push globally. Our UK and Ireland launch is the first time the brand is available in mainland Europe, so this is an exciting step for us. Entries into the UK and Ireland markets follow successful international expansions in Canada, Mexico, the Caribbean and Australia.
Research into soft drinks markets in the UK and Ireland has shown a wealth of opportunity for ‘better for you’ alternatives like Sparkling Ice flavoured sparkling water, particularly as the category moves away from full-calorie carbonated soft drinks to lower calorie options.
What channels does it sell through and how has this helped achieve growth?
The fact it was in grocery stores en mass early on helped it grow rapidly because of exposure. Major markets of food service and convenience stores ensure the consumer is aware that we can be found there. Our overall goal is ‘anywhere you can buy beverages, you can buy Sparkling Ice’.
We have partnered with leading manufacturers and distributors based in the UK and Ireland, including Norbev a contract manufacturer of soft drinks that has been based in Northern Ireland since 1919; ‘Richmond Marketing, a consumer-focused premium brand builder and distributor serving the Irish market; and Red Star Brand Revolutionaries, an independently-owned distributor that specialises in identifying and introducing innovative drinks brands to the UK market.
What are your plans for 2016 and beyond?
The launch in UK and Ireland is currently a focus. We are also launching black cherry in the US as well as new unsweetened essence products, which we’re very excited about. We want to expand our flavour extensions as we see fit. At some point, new and acquired brands will come into light moving forward.
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