Episode Transcript
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(00:02):
Welcome to the Empire Builders podcast, teaching business
owners the not so secret techniques that took
famous businesses from mom and pop to major
brands.
Stephen Simple is a marketing consultant story collector
and storyteller
I'm Steven Side kick and Business partner Dave
Yum.
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(01:28):
death com. Welcome to the Empire Builders podcast.
Dave Young here, along with Stephen Simple, and
we're sharing stories about empires.
Business empires, brands that were built and and
grew really big and figuring out what what
they did to make them grow really big
and Stephen just mentioned today's topic,
whispered it in my ear as the recorder
(01:49):
was counting down, And you said that I
probably
haven't seen this in a while, but I
feel like it's maybe still around but tires
root beer.
Hires root beer. Yeah. Tires root beer and,
I mean, I was I was kind of
a root beer sn when I was a
kid. Almost so much anymore. Right? But but,
like, I would like, I knew the difference.
(02:09):
Between hires and dads and A and W
and, you know, all all the big root
beer brands. Which was your favorite? There was
nothing that compared
to an a and w root beer coming
out of a fountain. Not a can, like
going to a and w and having a
root beer in a giant glass
cold mug. But we're here to talk about
(02:29):
hires root beer. Yeah. Which is now owned
by a and w. I do not believe
that hires... Is still available in Us. You
can get it still in Canada.
But at 1 point, they were the largest
in United States and
hires is actually kind of the inventor of
the root beer business.
And today is like 600000000
(02:52):
a year of
Sold. So I saw that a root beer.
I thought it was worth exploring because this
is... This is the origin of root beer.
So Okay. It's severely 18 seventies, and the
population in the United States is booming due
to massive
immigration. And sanitation is becoming a huge problem
(03:12):
and in cities.
Polluted water is spreading disease, and people frankly
turn to alcohol for safe drinking. On the
average American in at that time was consuming
7 gallons of alcohol a year. Primarily beer
and things along that lines, but Part of
it was because of water. So in 18
74,
(03:32):
protests start around
alcohol. The anti alcohol movements,
start. But the challenge is there's no good
alternative to water. And so Charles
hires is a pharmacist.
And he was always had these little side
hustle and was always looking for opportunities. And
Wall he's on his honeymoon.
He's served this beverage called root tea. And
(03:55):
it's made by ferment, so it's carbonated,
but the fermentation is cut off before alcohol
forms, and it's really popular in these rural
areas, but not in urban areas, and he's
a member of the temper movement,
so he knew it was hard to find
good alternatives.
To alcohol. So he starts to experiment on
recipes for root tea, and he felt this
(04:17):
could be a temper drink. Because it had
the feeling of a beer. Mh. And it
could be sold, you know, sold in stores,
and it was delicious. And he felt he
could create
a shelf
stable version. The first version of it was
this powdered mix that you would boil, add
water, add sugar,
add yeast, let it ferment, cut it short,
(04:37):
and there it would be. Right?
And so he met with this local
Reverend Russell Carmel,
and he was sharing with him
this idea of this root t
And what the good reverend said to him
is men here do not drink tea. Mh.
So he looked and says, it looks like
a beer.
It's brew like a beer.
(04:59):
So let's call it a beer. Let's call
it root beer. Honestly, as a little kid,
that was part of the All. Right. Right?
I'm drinking beer. It's root beer. Look at
me. Yeah. And it's this whole idea, when
you have something as unfamiliar,
If you can attach the familiar to the
unfamiliar,
(05:19):
it actually really works, so he took the
familiar beer
attached it to an unfamiliar root tea made
it root beer. Mh. Brilliant. Now it's a
centennial fair of 18 74 comes to his
hometown of Philadelphia. And Centennial fares at these
times were just huge. Like 10000000 people
were came over a 6 month period of
(05:40):
money. And he spent all of his cash
to debut this product. There were 14000
businesses on display at this fair. Where Philadelphia?
Wholly to moly things. Yeah. And if you
think about a Philadelphia in the early stages
of the United States was a very important
city, you know, that's where the Mh. You
know,
constitutional square is there and all that other
(06:01):
stuff. Right? So the first telephone and type
writer debut there, it's very exciting.
And he gives away free samples of his
powder. It's packaging these little packages with directions
how to make it home And when people
try it,
They really like it, but they don't like
the powder. Like he only sells like 864
packets
in the entire fare. So he's got no
(06:22):
money, no customers and he's stuck with a
lot of product. So it's 18 77
in the last ditch effort he gamble everything,
and he advertise on credit. It advertising a
drink in Mass media had never been done
before. The market You know, the market just
didn't exist. So he post these ads and
local
(06:42):
newspapers.
It's the healthy
moral
alternative.
And he talks about the healthy benefits is
so healthy it's good for you. And orders
slowly start to come here. And he was
able to pay off his debt and he
was able to build some popularity in Philadelphia.
And because it's a powder, it actually starts
(07:03):
becoming national, and it really is considered kind
of 1 of the first national drink brands.
I mean, way easier to ship powder than
bottles.
Yeah. So he goes from
11000 packs a year eventually grows to 1
and a half million packs, and then sales
flat line. Any wonders, why did it flat
line? And what did it was the soda
(07:24):
fountain comes in.
And I don't really realize this, but the
first soda fountains were actually in pharmacies, and
they sold all sorts of bad stuff. Heroin,
cocaine,
all sorts of crap was put into these
early soda fountains. And really, they became the
social replacement for the sal,
The soda.
Okay. In pharmacies. And there's was also around
(07:45):
this time
but the drinking straw was invented.
But hires notices this trend. What he needs
is a soda fountain recipe. So he needs
a syrup that's pre sweetened
and ready to use. So he puts that
together.
But before he launches it nationally, he tested
out with a couple
of local
(08:06):
soda fountains.
And it's not being done right. There's no
consistency. And so he says you know what?
I gotta fix that. So he develops his
own machine to dispense it. It's white marble
with silver pipes. And it's really the
precursor to these branded
soda machines up today.
Because before that, the soda
(08:28):
fountain guy would do all the mixing.
This new soda fountain machine basically
did the mixing. Took that out of his
hands. Yeah. Took it out of his hands
any he brandon. And he sells like a
thousand of these machines. And he wanted the
trademark
root beer,
but he wasn't able to trademark root beer.
So he decided to change the name of
(08:48):
the product. So up to this point, It
was marketed root beer root beer root beer.
So we changed the name to hires root
beer. Okay. And frankly,
this revolutionized how things were named. Like products
were not named that way. It was always
just the product name, product name rather than
attaching his name to the product. He was
1 of the first to do that. And
(09:09):
so he becomes number 1 in the United
States, and he starts them wanting the bottle
his own product and shift that, it becomes
a bit of a challenge, but he discovers
the bottle cap, and he's 1 of the
first use a bottle cap. So there's all
sorts of things that happen, but then he
hits a really funny moment. Well, funny to
me, not funny to him. Stay tuned, we're
gonna wrap up this story and tell you
(09:32):
how to apply this lesson to your business
right after this.
Hey, Rick. You feel like yeah. Yeah. I
do. Spin on my wheels, get no traction.
I was going to say, like, we're part
of a computer simulation. You know, like the
matrix? Oh,
I guess. Your business sales and growing.
Nope. Working harder,
spending more, going down rabbit holes, but not
(09:53):
growing. Exactly. Going through the motions. Like Neo
at the beginning. While you could talk to
the host, the guy on this podcast, sounds
like he's figured out all the secrets for
growth. I mean, These stories are interesting. It
doesn't cost anything to talk to them. That's
true. Maybe I should get plugged in. Come
on. Do it. I wanna hear what you're
at. Sound like when they play at the
beginning of this podcast. When you say stuff
(10:14):
like that, it does sound like we're in
the matrix. Watch this?
Take the blue pill, Dave.
Let's pick up our story where we left
off and trust me you haven't missed a
thing. The women's Christian temper movement, boycott
his product.
Because the term beer bites him in the
ass. They go, this is a beer, and
(10:36):
it's fermented
so it should be boycott. Probably made it
more popular. No. It actually created a problem
for him. It did hurt him. Okay. But
here's what he did that was really smart.
So remember how
he attached the familiar to the unfamiliar? Sure.
Yeah. Root tea became group beer. Mh. Well,
he decided
to pick bread and did a study on
(10:58):
bread
because bread is fermented, how much alcohol is
in bread
Well, what he found was, he had basically
no more alcohol in his root beer than
was in bread.
So instead of saying the people... Hey, it
only has this much alcohol in it, which
no 1 would understand. Mh. He was then
able to say,
(11:20):
It has the same amount of alcohol in
it has baked bread. Some people go wait
a minute.
Baked bread has alcohol in.
Silenced it. Yeah. You can't get drunk on
bread. Right. But again, attached
it to something familiar and accept it didn't
just do I'm gonna educate people. Yeah. Matched
(11:41):
it to something that they could touch and
feel and understand. By 18 94,
they're, like, selling 15000000
gallons
of root beer. They're doing great. And then
the 19 60, the hires family sells the
company to consolidated
foods, and it changes his hands a bunch
of times, and it's not really what it
what it used to be, but it is
(12:02):
the birth of
root beer.
The first of root beer is hires as
root beer. So I thought that that was
really interesting. But to me, the thing that
I thought
that was 2 really interesting things. 1 is
the
standardization, like, how we recognize if I send
this or a boat. It's not all being
done right. So before I send it out,
(12:24):
what I need to do is I need
to create a way to ensure
standardization. And what he understood is, it wasn't
gonna be training, so he created a machine
for. Which also created a branding opportunity because
it had the hires logo on the machine.
So anytime you went into 1 of these
places you just saw the hires logo, But
the whole idea of I've got sell people
on an idea,
making it
(12:45):
simple,
touching it to something they already know
and are familiar with
you know, really reduces that resistance to to
the ideas, and he did it twice, so
it wasn't an accident. He did it twice.
Yeah. I love the story and I I
love
I love tying it to the amount of
alcohol in a loaf of bread.
(13:05):
The brilliance of it just goes a couple
levels deep. Right? It it makes people stop
and go wait a minute. Alcohol and bread
I never thought about that. Yeah. There's yeast
that's ferment. I got sure. I guess that's
how that works. And I suppose in a
laboratory,
you take a freshly baked loaf of bread,
all those little bubbles that form the the
(13:29):
the basis of bread,
have probably carbon dioxide and a little bit
of alcohol in them. Yeah. Tiny trace amounts.
Well, that's why
probably why bread just has this nice aroma.
It's being carried
a loft by,
alcohol molecules.
Well, and when you go into a dis
You smell bread? Yeah. Yes.
(13:51):
Yes. You do. Yeah. Because it's the action
of the yeast going on. It's it's eating
a liquid instead of of
a paste of dough. And he could have
done with so many others would have done.
Here's the level of alcohol in it, and
then he would have lost at that moment.
Because the claim was there's alcohol and root
beer. Yeah. And they go, well, yeah. There
(14:11):
is, but it's only at this level and
it won't get you trust me It's very
tiny.
He would have lost that argument. Mh. His
brilliance was
same amount as what's in brett. Yeah. There's
all these memes
about how the United States will use anything
to measure something besides the metric system.
(14:32):
Right? We will not tell you how many
meters long something is. We'll tell you,
you know, that it's
it's it's the length of 60 trash cans
or
a hundred and 90
root beer bottles.
Right? So how much alcohol is in it?
And, it's got less than a teaspoon? Well,
(14:53):
we're not interested that. How what... How about
comparing it to a loaf bread? Oh,
Less than that. Alright, we'll drink it. But
it makes it simple.
It makes it concrete.
It makes it
familiar.
Yes. It's also an unusual comparison, so it
made it interesting and people would pay attention
to it. What I'm saying is anytime We've
(15:15):
got something where we're trying to educate the
consumer on it. I just new product. The
more we can find something that is simple
and concrete.
The easier it is for somebody to get
their head around, even if it's not exact,
because a lot of times people go, well,
that's not... Close enough that I now get
the idea. Yeah. And when things are complex,
(15:37):
that becomes really important.
If we want somebody to embrace the thing
that we're trying to convey. And there was
0 chance that the temper movement was gonna
start
lump in bake bread on their list of
Right. Life things that they wanted to ban
right.
Sorry. I don't think we can get people
to stop eating bread.
(15:58):
And we're not going to and that's ridiculous,
but it was that moment all of a
sudden it went away. The argument
Yeah. Went away. And the other part that
makes it also interesting in terms of, he
wasn't arguing that them saying you're wrong. There's
no alcohol. They were factual correct.
Alcohol of it. Yes, there is. Same amount
as in baked bread. Yeah. Argument over. I'm
(16:19):
glad that it worked out for him.
Otherwise, I would not have had my childhood
moments of getting a frosty a and w
root beer mustache on my face as I
drank out of a ice cold mug the
size of my head. It's all thanks to
hire root rupees. All delivered by a, a
young girl
and and set on tray on on the
(16:40):
window of my dad's car as it was
really part way down.
It was amazing experience. Yeah. You have hires
the thank for for all of it.
Alright. Well, thank you for sharing this story,
Steven though that that was fun.
Alright. Thanks, David. Thanks for listening to the
podcast. Please share us.
Subscribe on your favorite podcast app and leave
us a big fat juicy 5 star rating
(17:02):
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