DRY Soda CEO Sharelle Klaus talks about the process of creating a popular consumer brand
For Marijuana Venture’s fifth annual issue highlighting women in the industry, we look at 10 leaders who will help shape the industry’s North American landscape over the next 12 months.
From marketing professionals and CBD producers to government regulators and community leaders, we are honored to be able to tell their stories.
Fifteen years ago, DRY Soda CEO and founder Sharelle Klaus set out to create a non-alcoholic, low-sugar beverage that would compete for shelf space against brands owned by the likes of Pepsi and Coca-Cola.
Conventional wisdom might have called her business plan a long shot. She had to essentially create a new category of consumer packaged goods without the benefit of a multimillion-dollar marketing budget. Would there even be a market for such a product?
It turns out, yes, there is a market, and today DRY Soda beverages are sold in 16,000 stores across the country — and Klaus’ journey from ambitious startup founder to successful CEO can be viewed as a lesson in perseverance and a blueprint for launching a consumer product.
“We are also extremely motivated by our purpose and the cultural movement that is happening as more people are actively drinking less (alcohol) in the market,” Klaus says. “We were at the forefront of this 15 years ago, working to elevate non-alcoholic drinking from an afterthought to a must-have for every celebration by finding unique, sophisticated options that are worthy of a toast or a meal.”
As part of Marijuana Venture’s fifth annual issue focused on women in business, Klaus talked about the keys to DRY Soda’s success, the best business advice she’s ever received and her advice for people looking to start or grow their own business — whether that’s a soda company, a restaurant startup or a cannabis company.
Marijuana Venture: In an interview with Imbibe Magazine, you mentioned the description “relentless.” Were you always relentless or was that something you had to learn?
Sharelle Klaus: Ha! I’ve always been this way. When I was 3, I wanted some Good & Plenty candy, but my mom said no. So I left and walked a few blocks, crossed a busy street and went into the store and took them — I promise it was the only time I have shoplifted in my life. My mom came frantically in the store and found me eating them. She asked me why I did that, and I just replied, “Because I wanted them, and you wouldn’t let me have them.” Clearly, I wasn’t going to let any obstacle get in my way of getting my Good & Plentys!
But I think being relentless is key for entrepreneurs. You have to be relentless in your belief in what you are doing and really get other people to believe in that and come along with you. A lot of things go wrong and there are always roadblocks, but entrepreneurs keep busting through, figuring out how we can come up with solutions to make it work.
MV: There’s probably been a fair amount of trial and error in building your company. Is there something you wish you would have learned sooner that would have helped the process?
SK: The biggest lesson I wish I had learned sooner is the idea of failing. I was under the impression that CEOs don’t fail — which I have since learned is totally false.
When you have that mindset, it keeps you from being as innovative as you need to be. It makes you afraid of taking some much-needed risks. I have learned that the key to failing is to go in with your eyes wide open and be prepared with some Plan B scenarios. And most importantly, when things don’t work out as expected, use that experience as a learning tool to improve your performance moving forward. Post-performance analysis of our execution is a key to DRY’s success.
MV: What was the company’s first big break and how did it come about?
SK: Our first big break came when QFC (a Kroger retailer) called and asked us about distribution. They had seen us in some restaurants and then read an article about us and recognized the potential. So I met with the buyer and he told me that I could go in and sell it into each of the stores that had wine stewards. So that is what I did. I packed up my car with cold samples of DRY and went in and sampled each wine steward. Once they gave me the go ahead, then I had to go in and set each store. It was very difficult and exhausting work. But our sales did really well in those 15 stores and soon the buyer had it set into the remaining 45 stores. And then we were off and running with other retailers in Seattle coming to us.
MV: How important was the branding and packaging for DRY Soda, particularly considering the well-known brands that dominate much of the beverage sector?
SK: It is one of our most important assets. The investment in the design and beauty of our packaging has not only telegraphed to people that this brand is more than “just” a beverage, but it has earned us followers and interest from the market from the beginning.
We have continued to build on this as we have launched our 750-milliliters into the market, making them truly look like they are wrapped as a gift to elevate the experience even further. We believe that breaking through in such a crowded market requires having a brand that people don’t just notice, but that they relate to and reflects their lifestyle, that they can really connect to.
MV: Once your products began to gain a loyal following and a certain amount of critical acclaim, what did it take to make the next jump to a commercial success?
SK: I started the brand in my hometown of Seattle and started to gain some real momentum there in the restaurant world. Getting into my first grocery store was the key to proving out the model. Buyers are looking for something new and interesting, but also want to have a sense that it will work.
From there, we spent time ensuring we had a supply chain to scale and as we built distribution out of the Pacific Northwest, we realized that we needed to support both our original businesses and the new businesses. You can’t pivot your resources just to the new thing; you have to continue to invest to keep your core business healthy as well.
Once you have success in a few retailers, that is when you start to see real momentum in gaining new distribution. With our success in a few Kroger retailers in the West, we were then able to get distribution nationwide with them.
MV: What is the best piece of advice you’ve received in your business journey? How did that help steer your mission?
SK: The best piece of advice I was given was by an incredible fellow who was one of the founders of Innocent Juice in the UK. He told me that my personal story of DRY and my mission of wanting to allow everyone to feel included when celebrating was the key to our success, that staying true to that vision and maintaining authenticity would allow DRY to truly impact the world in a positive way.
The key to that advice, though, is to also find the right marketing person to help you amplify that mission in all that you do. It is more difficult than it sounds. But earlier this year we brought in just that person and we are getting very focused around this original mission.
MV: This month, Marijuana Venture is focusing on women in the cannabis industry. What advice would you give to women who are thinking about starting a business or wanting to grow their existing business?
SK: I say go for it! The world needs more women entrepreneurs. We have good ideas and are value creators. Surround yourself with talent that complements your skillset. Be aware of what you’re not good at and figure out how to find that talent. I often felt as CEO, as a mom and as a woman I had to have all the answers and if I didn’t have all the answers, I couldn’t expect my team to have them. But I learned that it’s the complete opposite — it’s okay if I don’t have all the answers. That’s why I have a team.
MV: Did you ever receive any particularly bad advice during your journey? Did you follow that advice? How did it impact the company?
SK: The bad advice I got was to expand too quickly into new geographies. This was very early on at DRY and I was so uncertain about my own expertise that I was willing to listen to anyone with more. I was going against my own instinct and I have found that whenever I do that, things never go well.
MV: And finally, what’s next for Dry Soda? New products or flavors? Expanding retail reach? Any thoughts about creating a CBD product?
SK: We are very focused on deepening our connections with our consumers and exploring how we can explore and connect more. The team actually just kicked me out of the office for three weeks to travel around the country in my Airstream, Kevin (yes, I named my camper Kevin!), to build our relationships and have a little more fun!
We are also working on some new flavors for next year but are really focused on elevating the celebration drinking occasion for all by expanding our 750-milliliter programs, distribution and making DRY January something to celebrate instead of struggle through this year.
We don’t have any plans for CBD product today, but rather see ourselves as a freshening complement in the market.
This interview has been edited for length and clarity.