Peter: Hey, this is Peter from Fringe Sport again, and I’m privileged today to be talking with Dave Colina, the founder and president of Formula O2. I call it a natural recovery beverage. Is that what you call it, Dave?
David: Yeah. That works for sure.
Peter: Can you tell me a bit about yourself? What did I miss in that short intro?
David: Sure. Well, let’s see. I’m a Scorpio, I enjoy long walks on the beach, candlelight dinners are great. We’re based out of Columbus, Ohio, and I grew up in Ohio. I’ve been here for 33 years now. I’ve been in Columbus since 2002. I went to school at Ohio state and graduated in ’06. And when I graduated, I had no idea what I wanted to do. I went to OSU, straight into business school there, their business program, so I made the decision when I was a senior in high school to study business, which, in retrospect, who knows what they want to do at 18, much less 22. But I knew I wanted to do something cool where I could leave an impact, leave my mark. A little dent in the universe kind of thing.
So after I graduated college, I looked for the best job where I could learn a lot really quickly. And I was given the opportunity to work at Nationwide Insurance. I was in their corporate strategy group for about two-and-a-half years and I learned a lot there that really helped me advance my career quickly, and also think about problems and what I wanted to do, and more importantly, what I didn’t want to do as I developed my career. After I did my stint there, I started to work in marketing. So I had the best, coolest job at the company, at 27, making a pretty solid living, and I found myself really unhappy. That was mainly because I felt that I had spent all this time developing this skill set in strategy and marketing that I was using to sell a product I wasn’t passionate about. It’s hard to get passionate about insurance. It’s a product people have to have but it isn’t tangible and it’s a pain in the butt.
I started to think about what I could do. I’m a cocky 27-year-old, I have 5 years under my belt, and I’m making a good amount of money. What can I start to play around with? I was working long hours, it was pretty demanding, and I was working out a lot in around 2009, 2010. I wasn’t doing CrossFit yet, but I was doing the higher intensity interval training and I was eating clean. I had this robust and active social life and I was fueling it with Red Bull and Gatorade. I was doing this non-profit project in the evening with some friends. One of the guys I met in this project was a doctor. We became close friends quickly and I asked him what he would drink. And he said he also drank a lot of Red Bull and Gatorade. We both found ourselves in this unique situation where we had this problem we needed to solve but we didn’t know what we wanted to solve it with. Dan and I started talking about what we could drink instead of all this stuff. We both drink coffee, and I still drink coffee, but I drink it in the mornings. And coconut water is great in theory but I’ve never had a taste for it. We thought why not try and make things for ourselves, something all natural, tastes really good, and serves these functions. So fast-forward about 4 years and we launched FormulaO2 in February 2014 and we’ve been at it ever since. So that’s the origin story. Turns out it’s not that easy to make a drink that are those exact specifications we wanted. But we’ve been really pleased with where we netted out.
Peter: One thing I want to mention here, you and I had connected through a mutual acquaintance and friend, and he sent me some of the Formula O2. We had it in the office and we were trying it, and we were all surprised at the drinkability. It was funny—I was used to some of the other beverages in this market, a lot of carbonated beverages and things like that. And I was really surprised that it takes very drinkable water with a little flavor to it. So that was kind of interesting.
David: It took us a long time to get that taste where we wanted it. That was another thing. Before I left my 6-figure job in corporate America, I wanted to make sure I was leaving it for the right reasons, and I wanted to be sure I could put my name behind a product that was the best possible product it could be. The formulation is what took the bulk of the four years, but the taste testing itself, we spent a good 9 months of perfecting the taste of the two products we have now. That’s not an easy task. There’s so much garbage out there now and there are so many too, that we said from the outset that we’re only going to do something that’s really good and really different. So that’s what we’ve been after ever since. So it’s always really gratifying to hear that sort of reaction to it, so thank you.
Peter: We chatted a bit about this before we started recording: it’s got 20 calories per 16oz. can. But one thing that was a little bit confusing in our office is that it’s got 19 grams of carbohydrates and 2 grams of sugar, but then 20 calories. That didn’t really seem to add up so walk me through that.
David: We use an all-natural plant and fruit based sweetener system that is composed of organic sugar, erythritol, stevia, and monk fruit. Most people are familiar with stevia, some are familiar with monk fruit, everybody is familiar with organic sugar, but a lot of people aren’t familiar with erythritol. Erythritol is a really cool ingredient because it’s one of very few sweeteners that is really good for diabetics because it doesn’t spike your insulin. So you use erythritol as a part of other flavorings and in our case, we use about 14 grams of erythritol. But erythritol is unique in that it doesn’t have the same traditional carb to calorie ratio that most of us are accustomed to. Most of us are accustomed to 1 carb equalling 4 calories, whereas with erythritol, one carb equals .2 calories. So we have a good amount of erythritol we have to list on the carbohydrate side of the equation on the nutrition facts panel, but erythritol only contributes a calorie or two to our calorie count. The rest of the calories are coming from the organic sugar and then the flavorings.
Peter: Cool. That does make sense. Just out of curiosity, what kind of insulin response is that going to have? Is that something you’re knowledgeable about?
David: It doesn’t have one. I’m not a doctor, but it’s not a sweetener that spikes insulin, which is why it’s good for diabetics.
Peter: Awesome. Cool. Talk to me about how you launched the product. You talked a bit about why you developed the product—but one other thing, you mentioned this 6-figure job working in marketing—are you full time on Formula O2 now? And how long have you been full time?
David: Oh yeah. I’ve been full time on O2 for about 4 years now. I left my marketing job at the end of 2011. New Year’s Eve was officially my last day. 2012, I was pretty much on my own. I saved up a decent amount of money but the beverage industry is really capital intensive. So a lot of that, I had saved up to get O2 off the ground, so I didn’t have a lot to live off of. As a result, I ended up doing some freelance work and I was teaching martial arts on the side, which got me into CrossFit, and I started coaching CrossFit as well. I was buying stuff on clearance at Target and selling it on Amazon. I was doing what I could to stay afloat, but I started to make a salary from O2 in late 2013. So I guess you could consider me full-time, 100% focused on O2 since it started paying my bills, in 2013.
Peter: Awesome. Tell us a bit about the launch and who your best customers are, that sort of thing.
David: We have found a really solid set of customers in CrossFit gyms and the types of folks who shop at Whole Foods stores. I would love to tell you that was the plan from the outset but we really just fell into that. So when we launched, I mentioned I had been coaching martial arts, and as part of that, I had people in Columbus who owned gyms and were connected into that community. Well, when we first did our production run, it was late January, early February of 2014. That timing is important because every year, in late February, early March, about 250,000 people come to Columbus for the Arnold Sports Festival. It’s a huge fitness and sports and nutrition industry event. As fate would have it, I have been a judge for the CrossFit portion of that event for a few years now, and I had been at the time as well. In fact, I was signed up to be a judge in that year, 2014. The timing worked out as such that we were getting our shipment of O2 in right around that same time.
So if you’re familiar with the Arnold, the booth costs are outrageously high, like 5 to $10,000 if you want a booth to launch a product there. We didn’t have that laying around, so I asked my buddy who was putting on the CrossFit portion of the event if I could bribe him with some free cases he could give to his athletes who were finishing on the podium in return for sneaking us in to set up a booth at the Arnold. And that’s exactly what we did. So our first official launch day was the first day of the Arnold in 2014. So I always joke that I’m sure I was the worst judge there because the entire time, I kept looking at our booth to see if people liked our drink. This was the first time anybody outside of our friends and family had tried it. You really don’t know until you’re in the market with something, how people are going to react to it. Your friends and family are going to tell you it tasted great no matter what. So we got to a point where it was go time and I had my girlfriend manning the booth at the time, and we were flying through product at such a rate that we ended up going through our entire weekend’s supply in the first four hours of the event. And that largely set the pace of us for the year, as well as the next few years as well.
One of the things I did when starting to launch O2, I was selling to anybody who would buy it. It was me driving around Ohio in my Prius, pitching it to anyone who would listen to me and selling cases to anyone who would buy it. I quickly realized these CrossFit gyms—we had I think 5 of the 6 that received O2 as a prize—they contacted me the next week to start carrying O2 at the gym. CrossFit became one of our first customers. So as I’m driving around, pitching to mom and pop gyms and more traditional gyms and convenience stores, I’m also seeing how much CrossFit gyms were selling and it was outrageous. We would have CrossFit selling 2, 3, 4, 5 times as much as a small grocery store. It would take me just as much time to drop off their order as it would to drop off to a convenience store, but the CrossFit gym would sell a bunch more and I was only one guy, so I had to focus on the channels that would drive the most revenue. So our launch was let’s throw a bunch of stuff at the wall and see what sticks, and it quickly became apparent that CrossFit stuck and store like Whole Foods as well. That one, I planned for. I hoped for that one.
When we were making it, I wanted to sell at Whole Foods, so the first store it was sold at was right down the street from our office, which was the closest to where I lived at the time. I went in there with a backpack of O2 in the summer of 2014 and asked to talk to somebody I could pitch. A couple months later, we were in that store and approved in the entire mid-Atlantic region.
Peter: I love that hustle. So from an entrepreneurial standpoint and pushing the brand, what do the next 5 years look like for you guys?
David: 5 years sounds like a heck of a long time. I can tell you what next year and the year after looks like. We have so much upside to achieve just within CrossFit and Whole Foods, that that is where we’re going to double down. We’re in a few CrossFit boxes right now and as you know there are 8,000 in the US alone. We’re in 15 to 20 Whole Foods stores, of about 500 in the US. We haven’t even scratched the surface of our potential, so we’re going to continue to focus on those two channels, while exploring some other channels, like other fitness outlets and other brick and mortar outlets, and also online is going to be a big push for us as well. We’ve had a great response with some online initiatives we’ve been doing, business to consumer, and that’s something we’re going to really explore in 2017. Then after that, 2017-18, your guess is as good as mine.
Peter: You’re taking over the world. Cool. If people want to find our more, your website is DrinkO2.com. Who do you think is the best person to go there? Someone who owns a box and is looking at distributing, someone wanting to try the beverage? Who do you recommend? Or just everybody?
David: Somebody who is tired of the norm when it comes to energy, sports, and recovery drinks, and is looking for something new and healthy. Box owners are a huge focus of ours. I like to think we have the best customer service in the industry and know our box owners better than most out there, and can serve them better than most as a result. We always welcome box owners, but also people who are working out at home, or people trying to kick their Monster habit, or looking for a change from Gatorade. There’s a big market out there for a drink that’s clean, healthy, non-carbonated, and has a good dose of caffeine. That’s who we’re trying to deal to.
Peter: Awesome. I love it. That’s about what we’ve got time for. Is there anything else you’d like to say?
David: This has been a lot of fun and I look forward to getting to know you and your audience a little bit more and we’re excited to what that brings in ’17.