 This is SerbStarFriend. The kombucha category grew from $1 million in sales in 2014 to $1.8 billion in 2019. Between being positioned as a better for use soda alternative and the large marketing spend, it's no wonder how kombucha quickly skyrocketed in popularity. But the problem with kombucha is that the flavor is polarizing. For example, Mark Cuban is simply not a fan. To fill this gap, other probiotic drinks fought to capture market share. When today's guest Rosa Lee, founder of Wild Wonder, appeared on Shark Tank, the big fruit flavors combined with the pre and probiotics packed into a can was a hit. Kombucha skeptic Mark Cuban gulped down his entire can. Wild Wonder is the world's first sparkling prebiotic and probiotic beverage for gut health. It tastes more like a fresh juice than a fermented drink. Today we chat with Rosa about why she left her prestigious finance job to start a consumer packaged good company, the importance of diversifying everything, and how her Shark Tank appearance couldn't have worked out more perfectly. All right, welcome to the podcast on today's show. We're talking to the founder of Wild Wonder. Rosa, thanks for coming on the pod. Thanks for having me, Diego. For you who don't know, what is Wild Wonder? Well, Wild Wonder is a sparkling drink that combines herbal wisdom with whimsical flavors. We're the first drink to combine both prebiotics and probiotics. And we're here today, you're launching a new product and you've given it to us today. And so Pineapple Paradise, where are you launching it? Give us a little window. Definitely. So Pineapple Paradise, our newest flavor, we just launched online D2C on our website as well as Amazon. It's currently in retail exclusively at Sprouts for the three months. For people listening, so for me, so I'm from Peru, and it reminds me of this drink called Inca Cola, which is like a pineapple soda that they used to have. It was like the best drink ever in Peru. And then Coca-Cola would go on to acquire them, but it's like the drink of Peru. And so if you're happy to be proving or know this drink, this will give you a, this is a much healthier version. That's great. I will say that. That's what we strive to do is healthier version of something nostalgic. Yes. The nostalgia. That's what I was. Yeah, it brings me back. So let's go to the beginning. What made you want to start this company? My grandparents raised me for the first 12 years of my life in China while my parents immigrated to the States. Grandma brewed these healing tonics with a symphony of wild herbs and botanicals that were really good for my health. So she really taught me the philosophy of food as medicine from an early age. And I started my career in finance, so investment banking, and then went on to Prev Equity and Venture Investing. What did you learn? Let's go back. Everybody that I know that seems to be successful at some point. Investment banking breaks them or something. Something happens. What things did you learn during your investment banking, private equity days that really sort of resonate today? Yeah, yeah. I was staying in the office until like two or three a.m. Yeah, you're working here. Yeah. Constantly. And you know, both days on the weekends, I, you know, evenings and just non-stop. And I would travel a lot. So at one point I actually went to my doctor during my annual checkup and he said to me, wow, you're the first girl who over reported her weight by 15 pounds. And that really shocked me. And I was like, well, I didn't realize I was losing weight and I wasn't sleeping well. So started really reading more about gut health. I definitely had some health issues that stemmed in my gut and actually learned more about gut health and just overall wellness and got my microbiome tested. Really became a true believer in gut health. And I also went back to grandma's herbal tonics and this whole Eastern herbal philosophy. And after business school, I decided to just do something I'm personally passionate about and that's really turning herbal wisdom and heritage inspired and gut health ingredients to something that's very delicious and accessible. Was there something during the business school days, like for me, when I went to business school at every class at some point, you have to do some presentation, some thing, right? So I was like, analyze this company or do this thing. And so what I would do is when I was in business school, I was like, I'm done with the days of let's take a hypothetical company or a company, let's take Disney from the nineties and let's analyze them and then let's pretend to tell them what to do. Like I was done with it. And so what I would do is that I was in Boston. So I would just go to a Boston company and I would say, Hey guys, it's a bunch of MBA students. We have to do an analysis. Can we do it on your firm in real time? Same exact concept, but then present it to you. And luckily I got my team to agree. And so we always made like real world presentations. It was never some fake thing because that's how I operate. Like it bothers me to do all this energy for this hypothetical situation that doesn't exist with a known solution that bothered me. That's not why I'm going to business school. And so when you were in business school, did you ever think like, okay, like did this company come about through some things in business school? Good question. So I actually didn't start this business in business school. During business school, I was very focused on learning about startups because so when I was doing investing, I started in pre-equities as late stage and then like, like BC stage. So I started, I mean, my portfolio companies range from the pre-revenue stage all the way to Fortune 500. So when I was in New York, I started my career at Warbrook Pincas and focused on very late stage businesses, definitely post revenue. And then when came out here to San Francisco and focused on early stage pre-revenue companies, so it was fascinated by growth stage and it was fascinated by startups, but I didn't have any operating experience. I was overseeing portfolio companies as an investor and it was very well versed on the investing side. So in business school, I was very focused on learning about startups and actually doing something more hands-on. So I literally volunteered at all these startups during school and basically help them with whatever they want. They need help with. So I kind of just worked my way. I worked part-time essentially all for free labor and learn a ton about e-commerce startups and worked in marketing. And after business wash, I helped a friend launch a business in Asia. So basically got my hands dirty with consumer product startups and then decided that I personally want to do something I'm passionate about. What were you seeing with these companies? Like what was the thing that most of these companies kept messing up? Well, you know, I'm very data driven and, you know, especially coming from finance, what I realize is a lot of startups because everything is so busy is running at such fast pace. Most people aren't looking at the data. So what my value add was really analyzing everything at a higher level and turning data into strategy. People simply just didn't have the time to look at data. And now I'm running my own startup and I can see how important data is. And a lot of people still aren't looking at data because, you know, we can get weekly, monthly retail data and figure out, OK, are we doing the right thing in retail? Do we have the right promo strategy, pricing strategy, you know, executions? Yeah, I think the thing I see a lot is I think talent blinds you. And so you can be a really talented founder who has found market product fit and is seemingly doing some things right, but they don't know why and they don't care to know why. And no one on their team is like digging into the data. Yeah, it's the one thing that can it's great for a little while, but you have to get really sophisticated at some point in order to get to that to ascend. Otherwise, that talent will run out. Yeah, and then especially if you're doing well, you actually don't see a lot of problems because you're doing well and you're not really analyzing every aspect of your business. That's why I love these downturns in the economy. That's right. It makes things simple. All right, so so you launched this company what year? We actually launched while wonder literally the first year of covid. So 2020 great timing on my part. Well, in some ways it was like everyone's worried about their health and everyone's in the grocery store. Well, maybe at the beginning, they weren't. So, you know, if you think about the beverage, it's grab and go. So this moves the fastest when you're out and about. And so when people are at a cafe, when people are at a restaurant, when they're in a park and they grab a can 2020, the entire world shut down. So no one was going out. So the beverage category actually dropped significantly because people weren't shopping. They weren't out and about. So it was actually very hard. And on top of that, my my launch and distribution strategy was food service. So the health conscious offices cafes. So I had large PO's going out to these offices that got completely wiped out. I think you mentioned that on a chart tank, right? You were at Facebook, had a big PO. Yeah. And then that got shut down. Yeah. And we were we had relationships with a lot of these offices that large PO's. I was super excited to launch because that's a great channel for brand awareness, for product trial and all of a sudden the entire business. I mean, that was a hundred percent of my strategy and that got wiped out. So it felt like I had a really restart and we did. So we basically build our Shopify site, you know, within the first three months. I actually didn't want to do online because it's a beverage who wants to ship liquid across the US. It's very heavy. But I would say COVID actually impacted us in a way. It means it was really hard short term. But in the long run, it was very good because it really accelerated the growth of our channel strategy. Yeah. How long did it take you to figure out that pivot? Was it almost immediate? Because everything shut down anyway. And so there's yeah, I had to figure out cash flow. So yeah. And you had caused an existing inventory. You're sitting on all this inventory. Yeah, you got to move it. Definitely. It was this have to be refrigerated or is it or can it be at room temperature? Yeah. So it's a refrigerator product. And here's why we were the first can and product to put both prebiotic and probiotic in the same can. So I don't know if you know much about gut health, prebiotics. The world. Yeah. Prebiotics is a food for probiotics to thrive. So without prebiotics, all the healthy gut bacteria actually don't function as effectively. So a lot of people have been, you know, looking into fermented foods, kombucha, drinking vinegar, all the probiotics, they're great for you. You know, don't stop taking them. But just like humans, we function better when there's food in their system. So prebiotics nourish the probiotics. So they actually interact and we need to keep everything, you know, the functional benefits more sustained and keep everything stable in the same can. Okay. Going back to the business. So what was the first step once you realized this retail, I guess you had, you had to change. So what happened? Yeah, we had to pivot really fast. There's kind of like a bomb ticking. And I immediately started building our Shopify site. So the idea is look at all these relationships that we had in food service. So how do I turn that into revenue? It's very much focused on cash flow. So I basically built our Shopify site within three months and started taking care of our office, food service customers in the comfort of their homes. So we would turn those revenues, ship products directly to people. And but I was still contract with the companies and say, Hey, let me ship these care packages through you. Yeah. To, to your employees. Really smart. Well done. I like that pivot a lot. Yeah. So first year was a lot of online revenue and all organic too, because we didn't do any pain marketing. And, and I know a lot of people's sales just skyrocketed when they had Shopify, but I didn't have Shopify prepared at the time, but we were able to build it within three months and started generating revenue within three months. At the same time, I was going out into the field and literally visiting every single grocery store possible. That's around the San Francisco Bay area. So while everyone's quarantine at home, I was driving in my car and knocking on doors and helping the grocery store managers stock their shelves while I was introducing our products. So by the end of sort of like real boots on the ground, you're really going into probably wearing a hazmat suit. I was wearing double masks and it was definitely high risk, but I had to survive. So I visited something like over 200 stores within the first three months and all the independence. And by the end of year one, so that was 2020, we were in over a hundred stores, including our local Whole Foods. Wow. Molly stones, Molly stones, Lunarities, all the independence Northern California is blessed with a lot of independence similar to, you know, so Cal. So, you know, all the corner stores had our products. And are you still trying to figure out at this time? So you're getting into the stores, but is your mind going? Obviously, the D to C is way higher in terms of valuation. So is a part of your brain going, if I go direct to are you still pursuing the direct to consumer route or are you just now going pure CPG? So, yeah, good question. So if I learn anything about from COVID, it's diversify. So diversify everything from our suppliers to our co-packers to our distribution channel. So we actually have a very diversified channel strategy since the beginning, since COVID. So, you know, a part of our business and food service and that continues to be a big part and a part of our business is in retail and a part of it is online. Online is divided between Amazon and D to C. So everything is intentional. It just didn't just happen this way. We're very intentional about investing in these multiple channels and have that omnichannel strategy. The idea is really to touch the same customer throughout their day from when, you know, you're shopping online, you're browsing on Facebook, Instagram to when you're shopping in the grocery store to when you're working in an office, having lunch in the cafe. So more impressions, more brand awareness, more product trial. Hard to do, but really smart. And I see how COVID did that. It's intelligent. At what point do you start thinking, maybe I go on Shark Tank, did they approach you? How did that happen? Yeah. So they reached out to me. They actually reached out to me at the beginning of COVID. I believe it was 2021, maybe. I can't remember exactly when, but at the time, I was literally just in survival mode. And I was like, we weren't ready for this. I'm not going to do Shark Tank, because we're, first of all, during COVID, our co-packer actually shut down. So we were out of inventory for a few months because we couldn't produce. So like, there's just so much going on at the time. I didn't think that we would be able to afford a national TV exposure. Got it, because you know what it would mean if it did air, yeah. Yeah. And I kind of knew, but I didn't quite know until I aired and I was like, wow, this is so impactful. But fast forward, 2022, I can't even keep track of everything now. It's like a blur to think about the last three years. Yeah. But basically, last year, we were in the kind of the right stage for more exposure. We hadn't invested that much in marketing. We started building up infrastructure to scale. And then I also had multiple co-packers that can scale us. And then we've iterated the product so much that the velocity started to prove itself in retail. So I said, okay, great repeat purchase, great product, great shelf presence from the packaging, and really good velocity. So you felt ready, mentally, right? Like you had a good product, something investable. I felt ready. I felt like this is the right time to step on a gas pedal and put some marketing behind it. So then I responded back to the very initial email that they sent me and I said, I know this is like a whole year late, but you know, we're interested. Let me know what to do. And then we started to go through the entire application process, which I'm sure you've heard multiple times from brands that you talked to. And we had Mindy on, who I'm sure you've met from casting. She told us the whole process. But yeah, okay, so then. So we taped last September and we aired initially in January and we had a recent re-air as well. So that was massive impact. Before you get on the show, you personally, are you doing your due diligence on like which one of them has invested in CPG? Are you targeting a certain shark? Who did you ultimately want to get a deal with? Obviously we'll talk about the rest of it, but before the show, like who were you really trying to get? Yeah, so I didn't find out about my shark panel until I want to say it's one or two weeks before taping. So they wouldn't tell you anything on the end. You knew Tony was gonna be on it. I did not know until like a week before. So obviously, you know, like Shark Tank, they tried to match you with the best fit. And they said, okay, there's gonna be a judge, I think be perfect for you. He's in food tech, not food. And actually, when they said this, I was like, oh, wouldn't it be wonderful if it's something like DoorDash? Because then I could be on DoorDash. But that was such a random thought. I just kind of thought to myself, you know, that'll be so funny. And then they told me Tony Shoe, DoorDash, I was like, oh my gosh, like that'll be a dream. So as you're going into the show though, are you thinking, all right, Tony's obvious that you, it's probably on your kill list. Who else is on that list? Tony's the only one on list. Tony's the only one. I definitely went after him. I actually didn't want anyone else. I mean, I fully respect all the Sharks. I just thought Tony would actually bring in such good value for us from a distribution perspective. What I love about this conversation that we have on the podcast is the more companies that we talk to that have been on the show, the more I realized like, it's actually kind of the entrepreneur that has the upper hand. And I don't think they know that. Like all the entrepreneurs I've spoken to that have sat in your chair, what's cool about it is they've all done the research and they all have a Shark that they want, which means they have five or four Sharks they don't want. And it's a really interesting thing to think about. Cause I think most people from the outside when you're watching the shows of viewer, you're thinking like, wow, this entrepreneur is, they just want to take any deal, you know? But that's not true. Like you guys are sophisticated enough to know like the power dynamic, it's kind of the reverse of what most people think. That's something that I love about these conversations, which is pretty cool. All right, so you get on, they try it. They immediately start bashing you because of CPG. They're all scarred from CPG. Sounds like you watched the episode. You gotta watch it. For people who haven't, please go. You can YouTube it. It's on your website, I think too. It's not on our website, but if you YouTube it, there's plenty of people who have shared it. Yeah. Like what I liked about it is I invest in CPG. So obviously there's a part of me that understands the tremendous amount of efforts that you guys are about to go through and the amount of capital required to make the successful for me as an investor and for you as a founder and some luck along the way. And so they're all like sort of scarred from this, like Mr. Wonderful. Oh, I knew going in that they were not going to like beverage. There's a specific thing everyone talks about. The minute you bring a beverage on the show, everyone hates on beverage distribution. That was expected. I mean, I hate on beverage distribution and it's not easy. So that's why I was really going for Tony because he could actually bring additional distribution for us. My goal for the show was not to get a deal from everyone. My goal was to have everyone like the product. So that was really... Which seemed like that happened, by the way. It seemed like that. And Mark Cuban chucked an entire can of strawberry and he said, I just drank this whole thing. I really like it. I'm going to order it. I hate kombucha and this tastes so much better and everyone loved the drinks, loved the taste, which is, that's my first priority. My second priority was to, okay, actually locking a deal with Tony. Yeah. And so you go there, I think, what was the answer? You were trying to get 500,000 for 5%? Yeah. Something like that. It's been so long. Yeah. And so then I think you guys end up at 500 for nine, but three of it's like advisor shares. Yeah, I negotiate something. I didn't want the valuation to really affect our internal valuation because we had also other deals with other investors. There's only so much I can do there. So I essentially offered something that would give him what he wanted, but also doesn't hurt our valuation so much. What year was that? Or what day? Do you remember the day that was happening? This was September last year. Of 2022. Yeah. And so still a weird time in terms of investment, still a weird time in terms of the economy, a lot of uncertainty. And so in some way this is like perfect timing for you, for a company in your position. Yeah, I mean, I think it was more importantly was perfect timing because we're in the process of scaling. So this was great marketing, great brand awareness. Obviously the cash helps, but I would say we weren't desperate for cash. We had, we had cash flow from business, we also have outside investors. So I didn't care as much about the money, but I cared more about the value they could bring. So you and Tony on there, you make a deal and then does the deal go through? Did you guys end up completing it? Yeah, so he actually is truly an investor and an advisor to the business. That's amazing. Yeah, we're very excited. What happened, did anything unique happen as it relates to DoorDash specifically? Yeah, so we're actually in talks with DoorDash the goal is for us to be on DoorDash's platform. So they're helping us to gain more distribution and imagine you order your lunch from a restaurant on DoorDash and you pull up the menu. There's very limited beverages. There's water, there's a Coke and then there's really nothing else. So there's over a million restaurants on DoorDash platform and think about Wild Wonder being the only non Coke water beverage out there and that's hugely impactful and that's what we're working towards. And obviously I'm not gonna do a million restaurants all of a sudden and we can't do that but we'll start region by region and there's a lot of other platforms within the DoorDash platform that will be really helpful for us as well. And that's something that Tony actually pitched to us on TV. You didn't see this part because that's edited out but when we're talking, I was in there for over an hour and I was actually asking him, okay, what kind of value can DoorDash bring to Wild Wonder and there's so many. So you're interviewing him. Well, if I'm giving him equity. Yeah, yeah, yeah. I wanted to know what I'm getting into. So good. That's awesome. Yeah, so he shared a lot about what they can do and connecting me with different people at DoorDash as well. What are the other sharks? Are they saying anything? Are they trying to keep the conversation to them? What's happening on the other sharks? I think at that point I was really just, I mean, you can tell I was really going after Tony and they were all listening to how DoorDash can help Wild Wonder grow. And give people a window into, so then you air, you said January? January, earlier this year. Okay, so earlier this year, Q1, and then what happens to the company? What do you see? How do the velocities go? Yeah, I mean, obviously, you know, there's kind of the immediate impact to sales and then there's more importantly, the long-term impact. So, I mean, we have such huge sales over the weekend. I can't remember the exact numbers, but it's, we had 150,000 visits to our website all of a sudden. And I know that people were looking for the products. We have a store locator, so I know people were looking for products in stores near them. So, they were like typing their zip code, you know, address to see if it's their Sprouse, is their Whole Foods. There's 30 to 50,000 searches on our store locator. And I know that's a big range, but we had some like really large numbers and then I remember thinking at the time, this is so impactful. We were out of inventory on Amazon within a few hours. So, when East Coast aired, that was, you know, 5 p.m. Pacific time. We immediately went out of inventory, so then we had this huge influx of people coming to our website and huge boosts for our online sales. And I think we made a whole year's worth of online sales in one month. It's very impactful, but what's really impactful is really the long-term growth, right? So, Shark Tank, the way I think about it is really catapulted us to a different level. We've iterated our product so much that now it's really ready to scale and it didn't just, you know, our sales didn't just peak and then come down. It really elevated our baseline. So, we've quadrupled our monthly sales at the beginning of the year and every month it just continues to increase. So, it didn't actually come down. That's amazing. That's pretty crazy. Yeah, it's crazy. In relation to like, did you raise capital after it aired? Were you in the process of raising? I didn't raise, we weren't worried about money at the time. The main thing was inventory, actually scaling up inventory because if you have that much sales, we like scaled up our production capacity, like 4X, like immediately and that's not easy to do. So, we were just very much focused on, let's make sure we have products, let's make sure we don't go out of stock, let's service every single customer and make sure everyone has product. So, it's all about distribution at that time. Yeah, and how's that going? Have you figured it out? It's going, well, do you have a new area, a new location where you're canning and doing all this? Well, we have a very good partner, our co-packer, like I mentioned earlier, we're very diversified in everything. We have multiple co-packers that we work with. We have multiple suppliers. Even still. For every ingredient. You're hedging, you're always hedging. Always hedging. My investor hat on is like, you always want to mitigate risk. Even when you don't think there's risk, preempt every problem. So, we continue to diversify everything. It's the job of an entrepreneur. That's the whole thing, risk mitigation. Yeah, yeah. So, we're good on the, we're very happy that we actually didn't go out of inventory, didn't go out of stock, we have inventory and we continue to grow our inventory and grow our operations. I want to get people a window into your talk about, so there was a, we had, I forget what company came on here, but basically they make like a gluten-free product and they're working with one farm and something happened where the wind blew the wrong way and all of a sudden this product was no longer gluten-free and because they were only sourcing from this one farm, they had to effectively discontinue all of their products for a small amount of time. Obviously, this is a huge issue to a business and so you're pointing around diversification, case in point, right? That's why I may be working with a company. You never know. Like one coal power can catch fire, you never know. Yeah, that's true. So, what's next for the company? What are you working on now? Obviously, you've mentioned this flavor before, but is there any growth plans? Yeah, yeah, I mean, I would say it's product innovation. We're constantly innovating and we just launched this pineapple paradise flavor. We're already working on a new flavor for next year and most of the excitement comes from distribution expansion. So, when I first started, we've always had this strategy to go deep, not wide, to really penetrate every region we're in. So, when I first started back in 2020, I was only focused on North Cal. We launched Southern California at the beginning of 2022. And now it's our largest region. We're now stocked at Whole Foods, Sprouts here, or Sprouts nationally, but also Target, a lot of these really awesome retailers that like Irwan, Bristol Farms, everything that you can probably think of around here. Now we are ready to scale more, I would say, to the East Coast and the Midwest. So, from a distribution perspective, we have some massive expansions coming up in the summertime that we're really excited about. We're also launching in different regions. So, one of the things we learned from Shark Tank was the Midwest is actually a really great geography to expand to. My parents live in the Midwest. Where specifically? They live in Indiana. So, you know, you think about... How do you get to Indiana? That's the whole goal of the start-up. I've been asked... How do you get to Indiana? If you get to Indiana, you win. I know. I mean, it's funny because a lot of innovation starts from the coastal regions, right? So, I say this, people think I'm joking, but it's like I'm being serious. Like, if you figure out Indiana, I think you've done it. Well, so last year, at the end of the year, very end of the year, I launched at Fresh Time, which is an awesome natural retailer in the Midwest. And all of a sudden, my parents realized I was doing something with my life. Yeah. They're finally proud of you? Well, they didn't know. They were like a little confused why I quit finance. And I think this really brought it home. Once they see something on store shelves that they can actually shop at, then it becomes more tangible. And obviously, they were super excited to see me on TV when we aired on Shark Tank. Sure. Once we expand more to the Midwest, and I think that really proves the thesis that we had in the beginning, because we're here to expand the market for kombucha with no fermented taste, right? It's gut health beverage. Most of those have an acquired taste. You think about the kombucha as drinking minigas of the world. And we actually offer the same benefits with very approachable taste profiles. So, we're here to really serve the more average consumer who's not necessarily shopping at a health food store. Sure. What's the price point for people listening? 3.49. So, it's competitive to, you know, kombuchas and other functional beverages. Yeah. And I have to ask, how's grandma? Grandma's great. She's in China. Is she on the board of advisors? Well, she is an inspiration for the brand and... Does she have a favorite? Does she have a favorite here? You know, she hasn't tasted everything, but she did say my drinks taste way better than the herbal tonics that she used to brew. So, mission accomplished. I love it. Thanks for coming on the podcast and sharing your story. Thank you for having me. Appreciate it. I'm glad grandma's happy. And thank you. Good luck. Thank you. If you made it this far, I bet you loved the episode. So, you should join our YouTube channel membership for only $2.99 a month. This gets you access to one, the whole unabridged conversation. Two, you get the episodes on Monday, one day earlier. Three, you get two additional entries to our giveaways. Check out our Instagram to see what we've given away. And four, you get access to seasons one through three. 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