EVERYONE LOVES A HALFDAY
In mid-2021, our team of formulation Mercenaries was thinking of ways to disrupt the ready-to-drink (RTD) iced tea category. We all grew up drinking Arizona and Snapple, but we realized that they either changed the formulas from what we remembered or our tastes and preferences matured – probably a little of both. At any rate, we set an entire day aside to taste every tea product on the market and find a “way-in” to dominate the iced tea category with a modern approach. We were disappointed with every single product we tasted, so we didn’t think it would be challenging to crack the code. The full-sugar versions tasted like corn syrup, the sugar-free versions tasted like gasoline, and the half-tea & half-lemonade versions could only pass for table cleaner. We started strategizing about a formulation solution that would rock the category. “Let’s reduce the sugar with natural sweeteners,” said one person. “Let’s use real tea,” said another. “How about we include prebiotics and make it gut-healthy,” shouted someone else. Then, we discovered a box of tea cans in the corner that we hadn’t tried yet. It was a brand called HALFDAY. We started reading the label and couldn’t help but laugh at the coincidence – the product had all of the features we had just determined would dominate the future RTD iced tea market. “Yeah, but I bet it tastes awful like all the others,” said someone. We cracked some cans, and all took swigs. “Damn. They did it. I guess we can go home early.” Except, Mercenaries never take a HALFDAY.
MERCENARY FUNDING FORCE™ – DIRECT INVESTMENT
We’ve had a lot of great products over the last 20+ years in the food and beverage industry, but I’m not sure any of them hit home like HALFDAY did the first time we tried it. Great flavor and cool design are important, but we don’t make investments in products or brands – we invest in founders. Trends can change, ingredients can go in and out of favor, and packaging formats can be villainized one day and celebrated the next – the only thing you can bank on as an investor is a strong founding team to navigate all of the complexity. In the same way their product floored us at first sip, Kayvon Jahanbakhsh and Mike Lombardo floored us at first impression. Intelligent, hungry, thoughtful, and determined were just a handful of the positive traits we witnessed during our first meeting with them. We knew that it would be easy to help these superstars grow this amazing brand, and we wrote a check on the spot.
MERCENARY FOLLOWING FORCE™ – FOUNDER 911™, HIRING STRATEGY, TALENT EVALUATION, AND TEAM RETENTION & DEVELOPMENT
It takes time to grow the right following. HALFDAY was lucky to have two (2) amazing founders that complimented each other’s skill sets, but it takes an army to win in a large category like RTD Iced Tea. Mike and Kayvon came to us to ask some questions we hear from founders all the time, “What position should we hire first, should we hire someone inexperienced and cheap or experienced and expensive, and how should we structure the offer?” These are all excellent questions that unfortunately don’t have a cookie-cutter answer because it depends on the company’s size, scale, growth rate, industry, location, and, most importantly, the skillsets of the founders. We always recommend that founders prioritize hires that take time-sucking work off their plate so that they can focus on their “superpowers”. No work is more important than others – it all has to get done well, but founders need to spend time doing what makes their company an outlier. We helped HALFDAY place a superstar in a critical position so that Mike and Kayvon had more time to shine as marketers and operators.
MERCENARY FRICTION FORCE™ – FOOD SCIENCE+ AND MASTER FORMULATION
In early 2022, Mike and Kayvon started kicking around with us the idea for a new innovation and product concept they had in mind. Can we do it? Absolutely. It made perfect sense, it was going to have extremely high gross margins, and it fit perfectly with the brand pillars, so we got to work on it right away. After a few rounds of formulation, we collectively realized that our approaches to the new product line could actually improve the scalability, consistency, and gross margins of the current RTD lines. We immediately pivoted our efforts and reformulated the legacy flavors – we also formulated a few new ones. The general consensus? We hit the trifecta: Quality/Taste Improved, Margins Improved, and Ease/Consistency of Manufacturing Improved. Never stop perfecting.
MERCENARY FULFILLMENT FORCE™ –QUALITY & COMPLIANCY AND CONTINUOUS IMPROVEMENT
Complexity is the enemy of cost savings and consistency. Too many formulators and food scientists make complex recipes that are difficult to manufacture. If you use 20 ingredients in a product formula, you create 20 opportunities for mistakes in sourcing, weighing, batching, or filling. Simple operations are realized more easily with simple formulas, and our new formulas helped to eliminate most of HALFDAY’s supply chain challenges with a process that we call, “Kitting”. We like to let co-manufacturers and co-packers do what they do best, fill and package products at scale. Don’t force your co-packers to weigh and measure liquids and powders with precision unless you are comfortable with mistakes in the outcome. It might seem counterintuitive and more costly to send your ingredients out to a blending house to be “kitted” before sending them to your manufacturer, but we can show you a hundred examples of measuring mistakes that ruined production runs at a cost far greater than a small blending fee. Let us show you the way.
