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It takes Bawls to compete
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July 17, 1998: 1:00 p.m. ET
25-year-old soda entrepreneur faces the bottling giants with guts and moxie
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NEW YORK (CNNfn) - In the bottled beverage industry where competition is fierce and a handful of players with deep pockets ensure that newcomers rarely get a fighting chance, 25-year-old entrepreneur Hoby Buppert of Bawls Guarana is something of an exception.
With his company in its second year and seeing annual revenue of $400,000, Buppert shared his take on Bawls' origins with CNNfn's "Business Unusual." Here is a partial transcript of his comments.
BEVERLY SCHUCH, CNNfn ANCHOR: Well now, 25 might sound really young for somebody to be starting their own business. But for you, it's sort of like a mid-life career change because you've had several other businesses before, haven't you?
HOBY BUPPERT, FOUNDER & CEO, BAWLS: Yes, I have. But this is the first since I graduated from college. And there's a certain need to have a job after you graduate.
SCHUCH: Now you are taking on the big guys in this very competitive industry. How can you get a foothold in it?
BUPPERT: Well, with the product, Bawls Guarana, the idea here is that it's quite unique and different from other things that they're offering at the moment. I feel quite often, that the other big soft drink companies over-focus-group concepts to death, so they become sort of watered down and less exciting than the other soft drinks that could be out there.
SCHUCH: Well, the name is unusual, first of all. How did you get the name?
BUPPERT: The name represents a state of mind. Bawls is a very common slang term -- to be bold and daring -- and that's how we see the product. It's also the job of a brand name to remain on the consumer's mind, and I think it's very difficult for a consumer to forget a product called Bawls Guarana.
SCHUCH: OK, I could see some conversations at local bars going back and forth. But what's unique about the product then?
BUPPERT: The main ingredient is guarana, and the guarana is a berry that comes from the Amazon. It's a small berry similar to the coffee bean that naturally contains caffeine.
SCHUCH: It has a lot of caffeine.
BUPPERT: Yes, actually the caffeine found in guarana is more powerful than the caffeine found in coffee, and the caffeine found in coffee is what is used to caffeinate drinks like Coca-Cola (KO), Mountain Dew, Jolt.
SCHUCH: How did you get the inspiration for it, though? How did you find out about this bean?
BUPPERT: My senior year, while I was at Cornell University, I noticed that there was a popularity of highly caffeinated soft drinks in Europe for a more adult market, which we really don't have here in the United States.
SCHUCH: So they get a nice little kick, too, huh?
BUPPERT: Exactly.
SCHUCH: And where did you get the seed money to start the company?
BUPPERT: Got a loan from a bank. It was not easy.
SCHUCH: Did you have a proposal or just an idea?
BUPPERT: Yes. I did. Actually, I did the business plan for Bawls Guarana when I was a senior at Cornell.
SCHUCH: It was part of your thesis?
BUPPERT: We don't actually have a thesis, but I did it as an independent study.
SCHUCH: So that's good. So while you're at school, you put it all together and it gets graded and approved and edited and, I would think, upgraded a little bit. Then you present it to a bank. How long did it take to actually walk away with the money?
BUPPERT: Almost a year. . . . There's many ways you can get capital so I had to sort of feel it out and, I mean, this is a high risk, potentially really. I mean, it's a lot of . . . costs in developing a soft drink.
SCHUCH: And now, how many years later?
BUPPERT: We're a year and a half.
SCHUCH: And the company's worth . . . ?
BUPPERT: Our sales for the first year were $400,000, and this year, we're hoping to double that plus some.
SCHUCH: $400,000 the first year?
BUPPERT: Yes.
SCHUCH: Most businesses don't make anything for a couple of years at least.
BUPPERT: Those were our revenues, not our profits.
SCHUCH: And profits, how are they?
BUPPERT: Profits are good, but as with any upstart, as quickly as it comes in, it goes right back out again.
SCHUCH: Is it tougher or less difficult finding investors today?
BUPPERT: I honestly think it has to do with the nature of the business. I think if I was selling a technology or something like that, investors are more open to (it). The soft drink business has been done before and it's not quite as exciting.
SCHUCH: With the kind of growth potential -- doubling your revenues in the second year of business -- you must have had some interest from the big guys -- Coke, Pepsi (PEP)?
BUPPERT: We have not, as of yet.
SCHUCH: Well, maybe they'll hear about it on the show today and be knocking on your door. What kind of plans do you have for growth? Do you have the 5-year, 10-year plan down the road?
BUPPERT: We have a 5-year plan. I mean, it changes weekly. But, yes, we do have a 5-year plan that we're trying to stick to.
SCHUCH: And when you started, when you looked at potential markets, what seemed the most potentially growth-oriented to you?
BUPPERT: We started with the product in Miami, back in November of '96. And the reason we started there is first off, you have a large South American population there that was already familiar with guarana.
Secondly, you have less seasonality there because the weather typically is good for cold beverages any time of year as opposed to in New York or other places in the country where the winter is not very (conducive) to hungry buying.
SCHUCH: Who are you aiming this product at? I would think young people.
BUPPERT: We skew a little bit older than I think most soft drinks would say. We skew about 18 to 34, males and females.
SCHUCH: And that's who you're going for?
BUPPERT: Yes.
SCHUCH: And then take them through? As they get older, they'll be drinking it and give it to their kids in their bottles and other kids . . . ?
BUPPERT: Well, not to their children. The idea here is that this is a light and refreshing alternative to coffee. Or any time of day for people who don't like to drink coffee. That it is a natural caffeine. It makes a light and refreshing soft drink similar in taste to ginger ale or cream soda. And it's a nice alternative.
SCHUCH: How do you get the shelf space in supermarkets?
BUPPERT: Supermarkets? That's an interesting problem that we've had to deal with. Slotting fees are usually an issue as far as getting shelf space. We've been one of the lucky few to not have to pay any slotting fees as of yet, and we've gotten shelf space in supermarkets. Just for a company of our size, we can't afford to be buying shelf space or end aisles, you know, as Coca-Cola or Pepsi could do.
SCHUCH: So where are you? What supermarkets are you in now?
BUPPERT: Each supermarket chain in each market we've gotten in, we've gotten in a different way. Either we've been noticed by someone in the management of the supermarket who just finds the product intriguing and thinks that it will appeal to their consumers, or, in other cases, we've (been) taken in as an ethnic beverage since it comes from South America.
SCHUCH: And how do you avoid being a passing trend, you know, it's the beverage of the month kind of thing?
BUPPERT: Right. Well, guarana's been popular in South America for years. It actually makes up 25 percent of all soft drinks down in South America. And used as an additive in many other soft drinks and other beverages. So I think there's a lot more to it than just your running fad.
SCHUCH: Do you export it, as well?
BUPPERT: We actually export quite a bit all over the world, and that keeps our business fairly interesting. We never know who is going to call us next. But through our Web site, that sort of opens us up to the world.
SCHUCH: Do you think your age -- 25 -- has helped you or hurt you, in business so far?
BUPPERT: I think it's helped as much as it's hurt. I mean, there are certain occasions where it doesn't necessarily work in my favor. Actually my partner in the company is also my age, and for the both of us, I think that our age has given us the opportunity to maybe get through some doors that might have been more difficult if we were older. 
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