Will CBD beverages be the next big thing? Despite the benefits of CBD being well-known many people are uncomfortable with tinctures, gummies and vaping. Martin Guerrero the CFO of Rhythm Beverage Group joins Dan Humiston to talk about why beverages will eventually be the preferred method of taking CBD. He explains how each product in their line of functional beverages, addresses a specific need and most importantly, tastes great. Produced by PodConx MJBulls - https://podconx.com/podcasts/raising-cannabis-capital Dan Humiston - https://podconx.com/guests/dan-humiston Rhythm Beverage Group - https://drinkrhythm.com/ Martin Guerrero - https://podconx.com/guests/martin-guerrero
Will CBD beverages be the next big thing?
Despite the benefits of CBD being well-known many people are uncomfortable with tinctures, gummies and vaping. Martin Guerrero the CFO of Rhythm Beverage Group joins Dan Humiston to talk about why beverages will eventually be the preferred method of taking CBD. He explains how each product in their line of functional beverages, addresses a specific need and most importantly, tastes great.
MJBulls - https://podconx.com/podcasts/raising-cannabis-capital
Dan Humiston - https://podconx.com/guests/dan-humiston
Rhythm Beverage Group - https://drinkrhythm.com/
Martin Guerrero - https://podconx.com/guests/martin-guerrero
[00:00:00]
Dan Humiston: Today at MJ bulls, we are joined by Martin Guerrero, the co-founder and CFO at rhythm beverage. Goof Martin. Welcome to the show.
Martin Guerrero: for having me happy to be here.
Dan Humiston: Well, I appreciate you dropping by today.
Rhythm sparkling beverage drinks is a functional wellness brand that crafts and sells ready to drink. Beverages infused with us grown hemp extract Martin. , what opportunity or void did you see in the market that prompted you to launch a CBD beverage company? in 2020 during the height of the pandemic.
Martin Guerrero: Yeah, the, the COVID timing certainly posed a challenge for us. Honestly, the, the, the reality is, is that we wanted to get CBD in the hands of as many consumers as possible. I'm a big advocate and, and I'm highly convicted in the space. I'm a user of CBD have been for many years and other consumption formats, gummies, vapes, cetera.
They're not quite as ubiquitous as drinks are. One of our competitors once said, I, I [00:01:00] line that you don't a tin holder. You don't have a holder in your, what you have really bring this masses. We thinks is the right way. Wellness benefit.
Dan Humiston: Yeah. It's I mean, I think you're absolutely Right.
It's socially accepted. You always have a drink in your hand and it just makes sense. Rhythm. Isn't just sparkling water infused with CBD, though. You're committed to providing a healthy experience. It's sugar free. It's gluten free, it's vegan, it's keto friendly, and you only use natural ingredients, which is all really, really important, but how does it taste?
Martin Guerrero: Ha, well, there you keyed in on the second part of, of why we launched the company, which is, , there's a real lack of great tasting beverages out there. keying in , on your point , on launching during COVID here, it kept us in the, the lab with the food scientists while things were shut down, really perfecting the taste profile.
The aroma, the mouth feel the [00:02:00] nose, all of that is, is super important. And we were quite deliberate on making sure we hit on all of those points. And we, we think , that's the absolute baseline that you need to even be in the space if you don't have a great tasting product, forget about it.
And we started there , with that focus in mind and, and we think we've nailed.
Dan Humiston: Yeah.
I, I couldn't agree with you more like you could have the best. Most effective product. And if it doesn't taste great, , it will be hard to gain any traction. I know people use CBD for so many different things from relieving anxiety to sleep, to aches and pains how do you make it easy for people to know which of your products to select for which of their needs?
Martin Guerrero: Yeah. So we spent a lot of time and effort dialing in the labels to effectively communicate the use cases.
we're a functional drink provider. So it's, it's more than mixing CBD water and some flavor. We have a second element to our value proposition, [00:03:00] which is hitting on certain functions in the body.
as an example, we have , an energy drink that has caffeine. We have a sleep. Product called sleep that, that contains CBN a minor cannabinoid that's known as the sleepy time cannabinoid to help with sleep as well. We have one, that's got lemon, ginger and turmeric that that are all anti-inflammatories.
So, those are designed for reducing inflammation, pain body. And then, and then finally we have like a CBD Gatorade, which combine. CBD with electrolytes. So a really prominent labeling on the packaging using , not just those words. . Electrolytes as an example, but also iconography.
for example, if you were to look at , our rhythm hydrate drink you'd see that it's electrolyte enhanced based on the, the, the writing on the label, but you'd also see a little running man, So, we, we need to be able to communicate those use cases visually in a fraction of a second.
We use some of the best folks in the business from a, a marketing and labeling standpoint to help us effectively communicate that.
Dan Humiston: Well, and it's really well displayed on your website, which I gotta give you a lot of [00:04:00] credit for because it really explains it and I think the artwork on there is, very well done.
Martin Guerrero: Oh, thank you. Thank you that that's, that's not the first iteration. I mean, we've, we've been through numerous revisions across all of our visual assets, website or labels or marketing material all the above. So we're, we're continuing turn the dials and get better and, and become more effective in how we tell the rhythm story.
Dan Humiston: sure. And you can purchase the products right.
on your website, but I also see that you have many retail accounts or other distribution channels. Let's talk about your business for a second as a growth strategy, will that include growing your shelf space?
Martin Guerrero: Mm-hmm yeah, we, we think of our route , to market and , getting our product into the hands of consumers, ultimately like along a three-pronged strategy. So we have a direct to consumer focus. That's, the eCommerce, online ordering we also have. Very active independent wholesale [00:05:00] business where we.
Rhythm staff, working with merchants , all over the country. And primarily in our core focus markets of Phoenix, the bay area and the tri-state area in New York, they're knocking on doors and, and telling the, the rhythm story to merchants and getting in on the shelf there. And then finally we have a traditional distribution strategy.
So we have a, a network of distributors that, that also carry the product. I foresee that continuing in the future. Certainly as we scale the distribution side of things, we'll probably pick up more. And the, the other prong of that is that as we continue to, to drive the business forward, get more insights on what our consumers want.
We'll dial the levers in, , on the DTC side, the direct to consumer end as well, and really pick up the eCommerce side of things. So, yeah, we're, we're fighting every day to get more presence on the shelves. Absolutely.
Dan Humiston: that's great. That's great. You mentioned that you're in a, a number of different markets and now with the, with the price of fuel, as high as it is, do you have separate bottling facilities in those markets or, [00:06:00] or.
Martin Guerrero: Yeah. A as of now, currently we're produced , in one location, which is quite strategic to the core markets in the bay area in Arizona. But frankly is a little far from New York. But we have line of sight to multiple production facilities. So that particular co is the industry term for.
The folks that actually make the drinks and we send in all of our ingredients and they'll mix them there. That particular co packer that we're using does have another location in Baltimore and, and they have others as well. So , that was one of our real focus areas.
This past year was to set up the supply. So that we can effectively handle the scale , that we see coming down the, and, and grow it effectively and efficiently co-locating key suppliers in markets that we serve. So we're well, well positioned to do that.
Mm-hmm
Dan Humiston: Well, speaking of scaling, I mean, if you're just filling in the gaps between those markets that you're talking about, that's a tall order now and it's, and it's gonna be really challenging. [00:07:00] I suspect to do it outta cash flow. Will there be, will there be a capital raise in order to help facilitate
Martin Guerrero: Yeah. So we're, we're pretty traditional in the sense that we are on an annual capital raising cycle and we're entering into that again, for our next round, we, we did an earlier round. About a year ago and we're, we're moving back into raise mode as a means to enable us to grow inventory, grow sales and, and really drive the business forward.
Dan Humiston: Well, it's certainly an exciting time and I think. Cannabis beverage sector as a whole has nothing but green lights. I just think it's really the real opportunity there all the way across the board. And we're gonna have links to rhythm beverage in, in our show notes. So if anybody has any questions for Martin or, maybe you wanna talk to him about investing, you know, he, I'm sure there's somebody from his team will be happy to, to talk to you and at least buy a case.
a case of of sparkling hemp beverage. That would
Martin Guerrero: we'll take, take either or
Dan Humiston: Either or [00:08:00] either, or
Martin Guerrero: Yeah.
Dan Humiston: Martin great meeting you. I appreciate you being on the show today.
Martin Guerrero: Thank you so much for the time. I appreciate it. And appreciate your, your listeners. Yeah.