+ Drink better, live better: An interview with VeeV founder Courtney Reum

We're very excited to share this interview with Courtney Reum, co-founder of VeeV. VeeV is the world's first açaí spirit, but it's more than an innovative beverage. What's so compelling about VeeV is the fact that the company is built on authenticity, honesty, and a foundation of values that are incredibly rare, even in comparison to other sustainable products. I feel like I asked Courtney some pretty tough questions, questions that most other companies would have dodged or given me a canned answer to, but Courtney never did. Not only is that refreshing, but as consumers become increasingly demanding of so-called sustainable companies, I think it will give Veev a long-term, sustainable competitive advantage that will lead them to success. Please do yourself a favor and check out what he has to say. Visit the VeeV site for more information.


Can you tell us the VeeV story in a nutshell?
I started this company with my younger brother Carter. We're both original Chicagoans, and moved out to New York when we were 17 and 18 to go to Columbia. I'm two years older, so I'm 28, he's 26. After college, we kind of always knew we wanted to do our own thing, but when you're right out of college, you don't have any skillset, any contacts, or any money, so it's probably not the best time to jump right in. I decided I was going to take the finance route, so I went to Goldman Sachs, where I was doing investment banking, and my brother followed.

After about five years of doing that, four years in New York and one year in Sydney, I had always focused on the consumer products space. I worked on the Procter & Gamble/Gillette merger, and more notably worked on a bunch of startups. I did the first Vitamin Water deal where a little private equity shop in San Francisco put in $20 million and took out $600 million, I did the IPO for Under Armour, then in spring of 2005 worked on the Allied Domecq/Pernod Ricard merger, which was a $12 billion deal. In the context of that, doing the due diligence, I looked at the space and said "Wow, a Bacardi or Diageo would never do something as innovative as Veev for a variety of reasons."

They're very slow to market, it takes a lot of money for them to give a new product a chance, and they're very risk averse. There's a liability to it, because if you're Bacardi, you can just launch Bacardi Super Melon Gold and you don't have to take the chance of launching something like VeeV. Now, it probably won't be a home run, but it will probably be a double or a triple, so they usually just stick with brand extension or line extensions.

On the flip side of that, as a consumer living in New York, I was usually drinking Red Bull and vodkas because I was tired from work all the time. I was just really bored with the things I was drinking. So the combination of those things made me think it would be great to come up with something different that, as our motto suggests, was a better way to drink.

So we just started out on that idea of a better way to drink, without any real proposition or any particular ingredients in mind. The first step was to backsolve and figure out which ingredients would fulfill that proposition. The first one that came to mind was açaí, the Brazilian fruit. My brother and I discovered açaí on a surfing trip in 2003 and really loved it, and when did a little research, we said "Wow, this is the next big thing." You see that it has all the attributes of pomegranate, but it's much healthier and has a better backstory from Brazil. We saw that it was about to explode, so that became our keystone ingredient.


So what are some of the properties of Açaí that make it that perfect keystone ingredient?
Açaí is filled with antioxidants- 57% more than pomegranate. It's also generally touted as the most well-rounded fruit or vegetable on the planet. Whereas if you eat an orange, you get a ton of vitamin C but very little else. If you eat açaí, you get very real amounts of protein, fiber, essential fatty acids, and antioxidants. They call it the Amazon Viagra, "nature's vitality" in the Amazon, and it's incredibly healthy.

It only grows in the Amazon rainforest, and if all that wasn't enough, Oprah just named it her number one superfood. So that's what got us started with açaí. We really liked it because it has a healthier taste profile- very exotic, like a dark berry with a hint of chocolate, but it also has a taste that's just familiar enough yet just exotic enough that it's a little different.

Obviously sustainability is a core part of the VeeV brand. Can you tell us more about that?
I don't profess to be a member of the green movement for 20 years, because I'm only 28, but our parents always raised us to be conscious and aware. They instilled us with the idea that what affects one of us affects all of us. There was that element where I asked if the alcohol business was really what I wanted to do. If so, I wanted to make it a little more meaningful, a little differentiated, and nobody in alcohol space was doing anything remotely green or eco-friendly. We're really trying to be the first, be the pioneers. I'm sure- hopefully- people will start copying us if we have any success. If Bacardi and these other companies start mimicking VeeV, that's good for everybody and the planet. Our motto is "Better your life, your conscience, and your cocktail."

On the green front, our biggest initiative is that we donate $1 for every bottle we sell, right off our top line, back to the rainforest where açaí comes from, to help offset our carbon footprint and help provide sustainable, organic açaí through a farming project that we co-fund with Sambazon, who is the main purveyor of non-alcoholic açaí juice. If you saw our press kit, all our materials are on recycled paper printed with soy ink. Everybody in the company either drives a hybrid or is carbon-neutral. Our distillery is the only one in America that gets at least 25% of their power through wind generation, and their distillation uses about 200% less energy than a traditional hot still. The last thing is that VeeV is the only alcohol brand that's a member of Business for Social Responsibility, and several other leading green organizations like Co-Op America and Social Ventures Network.

VeeV launched in May of last year in Los Angeles, a couple months after that in San Diego, about two months ago in San Francisco, and actually as we speak, in Miami.

My understanding is that acai production is limited to Brazil. With that in mind, can you talk about your long-term sourcing strategy?
Açaí is only available from the rainforest in Brazil. That's the only place it grows. If you ask people in Brazil, they think China's going to start growing it, but it's unlikely that will actually happen. There's a bee that's key to the fertilization and pollination process that they don't think the Chinese will be able to mimic, so it's only from the rainforest. In some ways that adds to the mysticism, allure, and exoticism of the berry.

There's been this trade off between high-end and green: is this going to be luxurious, or is it going to be green? The two have been mutually exclusive for a long time, and people are just starting to find ways to use green to add to the brand rather than make it a detraction.

In terms of sourcing, currently less than 1% of all the açaí that's out there is currently utilized. So there's a ton of wild, unharvested açaí, so there's no issues with sourcing or anything to worry about as far as cutting down trees or anything. In fact, the açaí boom has been really good for the rainforest. As we all know, the Amazon rainforest became deforested because it was planted with soy and other agribusiness, but the way açaí is harvested is sustainable. You kind of cut these little branches at the top of the tree, you don't actually cut down the tree or do anything else to harm the surrounding flora or fauna.

One of the really remarkable things about VeeV is that aside from having really innovative, functional ingredients, it's all wrapped in a great brand. Is "glamorous green" important to VeeV?
It's really important. As you pointed out, that's been the shortcoming of a lot of green products. There's been this trade of between high-end and green: is this going to be luxurious, or is it going to be green? The two have been mutually exclusive for a long time, and people are just starting to find ways to use green to add to the brand rather than make it a detraction.

There's a fashion designer named Linda Loudermilk that we do a lot of stuff with, and she coined the phrase "luxury eco." She's the first designer in her space to have very high end clothes that are also very eco-friendly. I'd put us in the same category. Our brand is very appealing and high-end, but we're able to capture both the high-end and green markets without asking people to make a sacrifice or tradeoff.

Corporate social responsibility is getting a lot of press right now. How does CSR play out for VeeV in comparison to mainstream products? Do you see CSR as a competitive advantage for VeeV?
Yes, I definitely see it as a competitive advantage. With all due respect to what anybody is doing, because even small things are great if they help further the cause, when I see brands that I know are not making money say "A portion of the proceeds go to charity," I'm a little skeptical. What does that really mean? First of all, if they're not making any money, so 100% of zero is still zero. Second, "charity" is kind of a nebulous thing, and maybe I'm a cynic, but unfortunately there's a lot of charities out there that don't use their money wisely. So our mission was to make it a really real, digestible story.

We wanted to make it ring true and hit home, because consumers are very astute. People are going to wise up to claims like "a portion of proceeds," whereas ours is very tangible and specific, and nobody can really question where it's actually going.

There's companies out there like 1 Percent For The Planet or Patagonia that are donating 1% of their sales. We're donating $1 dollar for every bottle, which is a heck of a lot more than 1% of our sales. A bottle goes for $34.99, and that's the end price, not the price we sell it for.

We wanted to make it a very real amount, so nobody could accuse us of not being green or not living up to what we say we're doing. To have this go back to the rainforest where açaí comes from, and for it to help offset our carbon footprint and provide sustainable açaí, that's a much tighter, more tangible and real story. We wanted to make it ring true and hit home, because consumers are very astute. People are going to wise up to claims like "a portion of proceeds," whereas ours is very tangible and specific, and nobody can really question where it's actually going.

Consumers used to give companies an "A for effort." If you did anything, they gave you a pat on the back. But now they're asking a lot more questions.
For sure. From our side, we do a lot of events, so we get lots of calls from people that ask use to sponsor their "green event." And even just six months ago, we probably would have said that if you're doing any kind of green event, we probably want to be a part of it, but now we have to ask what you're really doing. Just having recycled napkins isn't enough, you know?

On the other hand, I do applaud anybody for taking the first step and doing something. It's just that using recycled napkins doesn't constitute a green event, and I can't sponsor everything, but it's certainly better than nothing.

One of the challenges for niche, lifestyle brands like VeeV is "crossing the chasm": making that transition to a mainstream product without losing the credibility of the core consumers that got them there in the first place. Do you see that as an issue for VeeV in the future?
Well, it's hard for me to say because we haven't crossed that chasm yet. But if you look at our press, the events we've attached ourselves to, the celebrities we've been mentioned with- like we were just in People for doing Matthew McConahaughey's birthday- it's been people like Drew Barrymore, Adrian Grenier, or Leonardo DiCaprio. We're not selling our soul just to get someone to hold a bottle, it's people that know VeeV, they're often very green conscious. I don't know the answer to your question, but I hope that by doing it the right way, we're aligning ourselves with the right people and making it more authentic and it will resonate with consumers as it becomes a more mainstream product.

The unfortunate reality is that the green product space is full of myths, hype, and snake oil. How can consumers sort through all of it?
At the end of the day, it's got to come down to consumers being more educated and having a more discerning eye. There will always be people claiming things, that's just the nature of industry.

All we can do is be very honest about what we are and what we aren't. If someone asks me if this is healthy alcohol, I don't know about that. It's still alcohol, and over the course of time, it will do more harm to you than good. But is it healthier? Is there a little bit of nutrition? Are there better quality ingredients, meaning 100% natural or organic, thus making it a better option? Absolutely, and I would never advertise it as anything other than that.

I would put it in the same category as red wine. A couple glasses in moderation can be good. We're providing people with a better option.

We are what we are, and we aren't what we aren't, and being honest about it is the only way to do it. People will see that our product is authentic, and even if we have shortcomings, we're offering a better option. Whether it's the product, or as a company, are we perfect? No, but we're absolutely not fake, and that's the human side of it.

I'm really impressed with your honesty. It seems like you're doing everything you can to make VeeV 100% authentic and transparent. Is that a key part of your brand?
Yeah, it really is. For example, any celebrity you see with VeeV, if you ask them, I guarantee they know what VeeV is.

The worst thing you can do in general as a marketer is mislead the consumer. As soon as you cheat them, or make them feel like they were duped, you'll never get them back. That's the last thing we want to do. We are what we are, and we aren't what we aren't, and being honest about it is the only way to do it. People will see that our product is authentic, and even if we have shortcomings, we're offering a better option. Whether it's the product, or as a company, are we perfect? No, but we're absolutely not fake, and that's the human side of it.

Will the competition adapt to these new consumer expectations, or are they always going to be stuck where they're at?
I hope so, at some point. But having dealt with them, and it sounds like you have too, there's just so many layers of the onion to peel back. You can get me on the phone like this and I'm going to be honest with you, but if you go to Procter & Gamble and ask them about the trans-fatty acids in Pringles, you're going to have a tough time getting someone on the phone that's going to really level with you. Half of it is that you can't even get the person on the phone to speak to them.

So I don't know if they'll ever get there, but the only way it will work is if consumers demand it. If consumers demand authenticity and real answers, then I think someone's going to have to step up to the plate and talk to you about Pringles or Twinkies or whatever.

It seems like these big, public companies just don't have it in their DNA to be as responsive as consumers are asking them to be.
That's the advantage of being a small company, we can be nimble and change course. We haven't drastically changed course, but you're always navigating the waters and adjusting a little bit. It's not always an advantage to be small, but being nimble and quick to react is what we bank on.

So what's next for VeeV?
I'll tell you what's not next. There's currently no new products in development, because I think VeeV is already unique enough. It's already challenging enough to get the word out about VeeV in the right way that we don't want to confuse the market. At least in the next 12 months, there's no plans for any new products.

Our launch strategy is to deepen before we broaden, and we're looking to expand our presence in the markets we're in. For example, in Los Angeles, we're in all of the tastemaker and influencer spots, but we're not everywhere, so that will start to trickle down into other markets. We're expanding into Miami this month into the end of the year. Looking into 2008, we'll be expanding into Chicago and Vegas, and New York will definitely be on the docket shortly thereafter, and a number of other areas like Colorado and Arizona.

VeeV has worked because we've expanded fairly aggressively to expand into four cities in six months, but we haven't tried to overdo our presence in any of those. We've just gone after our demographic, the right demographic- the people that set trends. It makes it a lot more digestible to go for that market and hope it trickles down. We just don't have the budget of bigger companies, so we have to do it smarter rather than just with more dollars.