Hans Schatz CEO & President of CULT Artisan Beverage Company, Arizona’s largest coffee roaster, joins the guys to talk about the awesome business attitudes that exist in Arizona that make it an amazing place to build a coffee roasting business.

Learn more about CULT over on their website: ilovecult.com

 

Contact: Mike mike@resoundcreative.com or Chris chris@resoundcreative.com

Discuss at https://www.facebook.com/azbrandcast/

The show is recorded at the Resound offices in ever-sunny Tempe, Arizona (the 48th – and best state of them all).

Show Transcript

Mike Jones:
This is the AZ Brandcast where we explore Arizona’s brand and the brands that make Arizona. I’m Mike Jones.

Chris Stadler:
And I’m Chris Stadler.

Mike Jones:
All right, everyone. We’re super excited for a new episode of AZ Brandcast. It’s our first one of 2021. Thank goodness it’s a new year, Chris.

Chris Stadler:
I’m glad you got the day right, man.

Mike Jones:
I know I almost did the 2020 thing.

Chris Stadler:
Did you write any checks with 2020?

Mike Jones:
I don’t think I’ve done that quite yet.

Chris Stadler:
I don’t think I’ve written a check in a few years.

Mike Jones:
It’s coming, so… And to kick things off this year, we have an amazing guest who has come on very graciously to hang out with us this beautiful Wednesday afternoon. It’s Wednesday, right? Okay.

Chris Stadler:
Yes.

Mike Jones:
Sometimes the days get a little lost for me.

Chris Stadler:
Yep.

Mike Jones:
Hans Schatz.

Hans Schatz:
Yeah, let’s go with Wednesday. That works for me, too.

Mike Jones:
Yeah. Thank you so much for coming on. We’re really… I’m really excited. I don’t know about Chris, but I’m really excited about the conversation, we got to meet and chat a few weeks ago and had a, I think just a fantastic conversation and it made me go-

Hans Schatz:
For sure.

Mike Jones:
… I don’t know why we wouldn’t invite you on. That would be foolish of us, and you were very gracious to say yes. So, we’re excited to have a conversation about you and your leadership within CULT Artisan Beverage Company and what you guys have been doing over the years, and what you’re going to be doing this year. That’s what I’m very excited to get to.

Chris Stadler:
Well, if I wasn’t excited before, when he came in with boxes of product…

Mike Jones:
There’s no easier way to win us over.

Chris Stadler:
As a coffee lover…

Hans Schatz:
That I’m actually leaving.

Chris Stadler:
Right.

Hans Schatz:
We’re going to leave it.

Chris Stadler:
Right.

Mike Jones:
So, a real quick intro for our guest. Just excited to have you on. You are President and CEO of CULT Artisan Beverage Company, which we will now be calling CULT for the rest of the show-

Hans Schatz:
Perfect.

Mike Jones:
… just for the sake of my mouth and my tongue.

Hans Schatz:
And ears.

Mike Jones:
And ears. Yes. You lead the organization, which is awesome, and you guys have built a really interesting company in that you are one of the most cherished coffee brands in Arizona, and the number… you roast the most coffee here in Arizona, I believe. Is that right?

Hans Schatz:
We roast… we’ve got some really great competitors that roast a lot of coffee as well, but one of the things I’m super proud of is that those bags you see, we have a little different version that goes into retail. That’s a wholesale bag, but we’re the number one retail coffee bought by a local roaster in Arizona-

Mike Jones:
That’s awesome.

Hans Schatz:
… by virtue of a great relationship with a handful of places. One of them, which is Fry’s grocery store chain.

Mike Jones:
Yeah.

Chris Stadler:
Wow.

Hans Schatz:
Yeah.

Mike Jones:
We made sure, actually, at our recent ownership retreat that we had CULT coffee-

Hans Schatz:
Should have told me.

Mike Jones:
… for the whole weekend.

Hans Schatz:
I’d hooked you up.

Mike Jones:
Oh, we went to-

Hans Schatz:
It pays to have friends in the business.

Chris Stadler:
That’s right.

Mike Jones:
We wanted the full customer experience, so we went to Fry’s, picked it up out of the bulk bin.

Hans Schatz:
Great. That’s awesome.

Mike Jones:
It was awesome. It was a great experience.

Hans Schatz:
Thank you. Yeah. I appreciate that.

Chris Stadler:
Is it all of Kroger or it Fry’s for…

Hans Schatz:
It’s… well, we were talking to Kroger and then this thing happened back in last March. So, the retail world, they exploded. They all went to work from home. The transitions that happened slowed that down. We will reconnect with them. We’ve got some… a couple of brands… they were talking to us about… that are regionally close, one out of Utah and headquartered there, and the California. Then, so yes, we’re excited to talk to them more.

Chris Stadler:
Yeah, because we don’t have Fry’s in Idaho.

Mike Jones:
Yeah, but you have Kroger, right?

Chris Stadler:
But we have Kroger.

Mike Jones:
All right.

Hans Schatz:
Are you from Idaho?

Chris Stadler:
I’m going to Idaho.

Hans Schatz:
Where?

Chris Stadler:
Twin Falls.

Hans Schatz:
Oh, my gosh. Do, you know how many times I’ve been to Twin Falls?

Chris Stadler:
No. How many?

Hans Schatz:
I ran a big company in Boise.

Mike Jones:
Oh really?

Hans Schatz:
A big food. It’s part of my background… in the Meridian and Food Services of America. I have a lot, a lot, a lot, a lot, a lot of history in Idaho. I used to help plan the bowl game there.

Mike Jones:
Oh really?

Hans Schatz:
I knew every mayor. I knew the governor. I got pictures with them. Mike Simpson-

Mike Jones:
That’s awesome.

Hans Schatz:
… from Idaho Falls is a friend of mine, former congressmen-

Chris Stadler:
All right.

Hans Schatz:
… and helped start a great nonprofit in Idaho that’s still thriving today, for at risk youth. I just… a lot of love for Idaho.

Mike Jones:
Dude, that’s awesome.

Chris Stadler:
We’ll talk later.

Mike Jones:
Yeah. I feel like there’s a whole conversation there.

Hans Schatz:
Evel jumped in the Snake River.

Chris Stadler:
What?

Hans Schatz:
Evel Knievel people jumped into Snake River at Twin Falls.

Chris Stadler:
Oh, yeah, yeah. Were you there for that?

Hans Schatz:
No, that was in the ’70s. I was… I wasn’t in a diaper then, but I wasn’t driving cars

Chris Stadler:
Okay. Yeah.

Hans Schatz:
But Nick Knievel, his nephew is a friend of mine.

Chris Stadler:
Nice. Are they from there?

Hans Schatz:
Yeah. I’ve got a lot of weird history, so let’s just not go down that [crosstalk 00:04:27].

Mike Jones:
Yeah. That’s a whole nother episode. [crosstalk 00:04:28] That’s another episode-

Hans Schatz:
Yeah.

Chris Stadler:
Yeah. Sorry.

Mike Jones:
… which we’ll have to come back and do on the AZ Brandcast.

Chris Stadler:
Yeah, I’ll do it from Idaho.

Hans Schatz:
Great place.

Chris Stadler:
The next one. Yeah.

Mike Jones:
We’ll do that. Hans, tell us a little bit about CULT, the story of CULT, your kind of story with CULT. I want to hear all this.

Hans Schatz:
Yeah, gladly. Thank you, and thanks, gentlemen, for having me on. It’s an honor for me personally, and for our company to get to share a little bit of our story and what we’re doing. Hey, we have a great company because we have great people. We have great customers and we have a great supply chain. We have partners that go back 20, 25 years from the coffee and the tea side of things in South Central America, Asia, Africa, and China. All of those nodes make up what’s a thriving, vibrant company. We treat them all like family, from seed to cup, and that’s part of the ethos of our company. The company’s been around.

Hans Schatz:
It was incorporated in 1996 by a family that moved here and said, “Hey there’s a big opportunity. We’re going to start this coffee company,” and they did. The Grayson family, they did a phenomenal job. Parent company is Coffee Reserve. Some people that have been around for a while are familiar with it, but they did a lot of co-pack, or what’s called white label. So, creating products for other people. So, great products, great business, but no name, no brand. And I come out of big food business, kind of like Shamrock Foods, which was a really good friend of mine growing up in a business, and Cisco Foods and US foods, that industry, and moved all over God’s green earth, including Alaska for five years.

Hans Schatz:
And had a great, great opportunity to learn a ton about the business and ended up a young division president in Boise, Idaho, which is per my stories. Then got moved to a corporate… I was a corporate guy. It’s what move me to Arizona in 2008. Did that for a number of years, flew around in private jets and really literally worked myself to the bone on the road five, six days a week, sometimes seven, and great admirable business. Just got a little wore out and wanted to go start my own thing. I did. I started a technology company for food service, sold it… which is a sad story, but sold it. Then I was like, okay, what am I going to do next?

Hans Schatz:
One of my dear friends said, “Hey, you’ve got to go talk to this coffee company, because they’re doing something like your company you just sold with some guys out of Australia, and they needed American, god, dude, that knows the business.” So, I did, I interviewed. They hired me as a COO. Worked with them for a while. They didn’t quite get the… couldn’t get the company off the ground, but in the process, one of the key investors was the family that owned Coffee Reserve. Got Ember Grayson. We talked. Super nice people. Super nice man. He’s like, “Hans, I got some challenges in my business. Would you take a peek under the hood?” That was in late 2015, and I did a little consulting work because I’d been doing some consulting work for whole year in Hawaii. It was incredible, but…

Chris Stadler:
Sounds rough. Far worse places to be doing consulting.

Hans Schatz:
It was rough. They paid for everything and they just told me where to go out to eat every night, but… So, I took a look and he said, “Would you be interested in doing this?” I’m like, “Yeah, you’ve got a great company, but there’s five really big things we’ve got to work on.” So, we put a deal together, in the spring of 2016, I took over the helm of what was Coffee Reserve then, and one of the first things we did is we gave the company identity, gave it a brand, and that’s where CULT was born right in my office. We created the… our graphic design guy was meeting with me and our beverage guy, who is really the heart and soul of a coffee and tea company, right? He looked right at him and says, “Okay, what are you trying to do?”

Hans Schatz:
I am going to say that I’m a recovering corporate executive, so please don’t hold that against me. I had written on my big prior board ‘culture’, ‘cultivate’. I was like, we couldn’t trademark it. There’s a billion companies, right? So, the guy said… looks at my product guy, says, “Okay. Chris, what is it you’re trying to get accomplished at this company? You’ve got one sentence.” That’s an easy answer. I want to create products that are so good, it creates a cult-like following. He looked at the word ‘culture’ and he erased it down to CULT, got on his little laptop and literally in six minutes, he goes, “Okay, I’ve bought six domains, blah, blah, blah, and I’ve got this going with the state of Arizona,” and we got this.

Hans Schatz:
We’re off to the races. It was initially CULT Coffee Roaster, and then it evolved the CULT Artisan Beverage Company, because we do more than coffee, and that’s where we are today.

Mike Jones:
Yep, and that’s what we want to talk about. Yep.

Hans Schatz:
If you look at the way our bug is, we have a design so everything can fall off. So, the CULT becomes like our Nike logo, our Nike swoosh, right?

Mike Jones:
That’s good. That’s good future thinking on that. I love that. I love when people are thinking ahead on their logo and all the aspects of the brand.

Hans Schatz:
Well, I had a smart guy helping us.

Mike Jones:
That’s good.

Hans Schatz:
Is a longtime friend of mine that came out of the corporate business that I did, and started his own gig and trusted… A guy that could tell me, “Hans, you have really bad breath. Will you do something about it?” You know those kind of friends that are really great to have, right?

Mike Jones:
Yes.

Hans Schatz:
So, you cherish their honesty most of the time. Yeah, and he’s…

Mike Jones:
Yeah Chris, most of the time.

Hans Schatz:
Yeah, and he’s really good at what he does.

Chris Stadler:
I was going to ask if you thought about giving the Twitter handle, too but-

Hans Schatz:
So, that’s kind of how we got started, and I said there was a handful of things we have to do. We got great product, but the industry is exploding. The consumer is excited, and we have an opportunity to get into some new categories and extend the lines in some of our existing categories, and the company made great coffee, great roasters. The guy I was telling you a story about retired, but the guy that apprenticed under him at our company for 10 years has been with the company for about 19, runs this thing now, and he’s a master coffee roaster. He’s been roasting coffee for 28 years. He’s one of the top guys in the western United States. I was like, “Okay, here’s some stuff we’re going to tackle. Are you ready?”

Hans Schatz:
He says, “Let’s do it.” So, they already had great coffees. We started blending teas back in 2000. A quick little story. PF Chang’s was a long-time customer of ours, and when they birth PayWay, that was their little step-brother, redheaded stepbrother. PayWay has been sold. They’re now out of Dallas. They’re still custom, but they came to us and said, “Hey, could you,” create their teas? Custom teas for them? “And we’re looking at these couple…” and we’re like, “Yeah, sure.” This was before my time, but yeah, sure. So, they did the… we have an innovation lab. People can come in and throw products around, and we created two, a Mandarin orange green tea and a chai black tea, and they loved it. Well, 19 years later, they still… 18 and a half years later, they still use the same thing that we…

Mike Jones:
That is so cool.

Hans Schatz:
All across the country, right?

Mike Jones:
That’s so cool.

Hans Schatz:
So, that’s one of our national chains, and they’ve been bought a couple of times. If you’re in a business, you know when one of your clients gets bought, you go through this sweaty moment, or the new guys are going to come in and go, “Well, we’re getting rid of all those suppliers. We’re putting all of our suppliers in,” and it’s a multi-six figure customer for us. So, I talked to the guy and he says, “All right, Hans. I know what you want to ask.” I says, “Okay. Do I have to say it?” He was like, “Look, we did intercepts at a bunch of our stores and you’re going to be happy. We were dismayed that your teas always end up in our top 10, but it should be our food. So, we decided that you are a legacy brand that we’re not going to touch. Can we work…”

Mike Jones:
That was fantastic.

Hans Schatz:
So, the conversation got really good from there going forward.

Chris Stadler:
That was fantastic. I thought you were going to say, they stopped selling food [inaudible 00:11:42].

Hans Schatz:
We’re just tea shop. So, and we play with some of that. That has led us to, really, a name change, getting very, very involved with the community through events and some other things, which I’ll explain, and then really launching… Just saying, “Okay, the industry is moving fast. What do we have to… what do we need to do? Let’s think about this.” So, we launched our nitro kegs. First it was just coffee. Then it was our botanicals. Most recently, it was a black tea… a raspberry lemon black tea. First one in the market in Arizona. We launched our CULT brew can. We were the first Arizona roaster to do so, and it’s authentic. It’s not pasteurized. It’s made in the most amazing piece of equipment that a man made by hand. Then we kind of got forced into doing single serve cups or K-cups by some of our resort clients, because they’re buying stuff. They’re like, “Hey, the stuff we’re buying is terrible.”

Chris Stadler:
Yeah. No, they want it.

Hans Schatz:
Right. “It’s just terrible. We want a better experience for our guests that come in.” So, we did that and we’ve added a bunch of coffees, and then with this botanical category came up about six years ago and we can get into that whenever it’s the right time.

Mike Jones:
Yeah. I want to take one quick second, because we talked about the CULT brew and you brought some with you. So-

Chris Stadler:
Let’s hear it.

Hans Schatz:
Oh.

Chris Stadler:
Oh, dang.

Hans Schatz:
Man.

Chris Stadler:
Dang, that sounded good.

Hans Schatz:
Just like in the movies.

Mike Jones:
Well, that’s very smooth.

Chris Stadler:
That was amazing.

Mike Jones:
It’s designed…

Hans Schatz:
It took us a year to come up with the formula for it.

Chris Stadler:
Sam, had to take a drink.

Mike Jones:
Whew. No, this is very good.

Hans Schatz:
It is. Thank you.

Mike Jones:
I like this a lot.

Hans Schatz:
We get a lot of… give it a little one-two shake and we get a lot of really great feedback. We’ve done a ton of taste tests and we’re proud of it. We’re getting some amazing traction and then COVID hit and that messed some things up, but we’re fortunate because Hensley Beverage, which is the Anheuser-Busch InBev distributor for Arizona, distributes our kegs and our cans, and they will do our RT… our other product we’ll talk about later, but they do on-premise and off-premise, and cover the entire state. So, they’ve been a great partner for us. They’re a big, big company. Of course, they got hurt, too, like everybody, because they service food service and retail, then venues and whatnot, but we’re proud to be with them. It was interesting when I signed the contract, the signatory from the Hensley was Chris McCain. So, just… so, I didn’t get to meet him, but we at least signed the same piece of paper.

Mike Jones:
That’s cool.

Hans Schatz:
But yeah. Yeah, yeah.

Mike Jones:
That’s very cool. Yeah, so in that whole process, there’s a lot of innovation, right? There’s a lot of innovation that’s going into how you guys are thinking about what’s next. How has that innovation really played a part in building brand?

Hans Schatz:
Yeah, that’s a great question. Innovation is equal parts inspiration and equal parts a little bit of luck, right? So, not everything is exactly right. We did a hot tea line that just kind of… because we made it too good.

Mike Jones:
Yup.

Hans Schatz:
A little too expensive. You can get two or three cups out of it. The restaurateurs didn’t want that. People sitting too long, but it really brought us into new categories, to new customer classes. Introduced us to new consumers, right? So, our whole thing is that food and beverage is experiential. Yeah, you eat because you’re hungry, but we want people to consume our products and just go, “Wow, man. I going to be of an… give me a sticker. I’m putting it on my water bottle, my laptop,” all this kind of thing. So, it’s everything with us.

Hans Schatz:
We look through the operator to the consumer and say, how can we make this something where they just go, “This is really good. I want to get more of it. I’m going to become an evangelist.” Okay. So, when we started our innovation, we had to really look and see what was going on out there and say, okay, the whole thing about can we kind of look around a corner? Arizona is behind some big markets. There’s some things happening on the West coast that take a while to get here in the Midwest, and the East coast that take a while. When we launched our nitro coffee, [inaudible 00:15:48] about five years ago, ish, we built a little… we bought a bike down in Mexico. We chopped the front of it off. The three-wheel thing with… you know?

Mike Jones:
Yep.

Hans Schatz:
And we had a kegerator built to go on the box. It has four taps on it. We take it to events all over the state. We would introduce and people would be like, “Is that beer?” We’re like, “No, it’s coffee.” They’re like “Oh, it’s coffee? Is it hot?” “No, it’s actually…” We give them the little 15 second elevator pitch-

Mike Jones:
Yeah, the whole spiel.

Hans Schatz:
… because 20 seconds was too long, and they’d be like, “Well, I suppose I’ll try it,” and they drink it and then they’d be like, “Wow, this is unbelievable.”

Chris Stadler:
Did you just do a Southern accent for Arizona people?

Hans Schatz:
Yeah. I know. I did.

Chris Stadler:
I get it. I get it. I understand what you’re doing. I just wanted to make sure.

Hans Schatz:
I’m actually a Southern boy, so that’s a little know secret.

Mike Jones:
There’s a few cowboys left here.

Hans Schatz:
There is a few. I work with a couple, but even to the point that the funny point… because when you pour nitro, it’s cascading and it’s effervescent, and it almost looks like… This almost looks like you put something in it. We were… University of Arizona is a good customer of ours, and the president of the university at the time said, “Hey, can you come do my private tailgating party with your nitro bike?” I says, “Yes, ma’am. Absolutely. We’d love to”.

Mike Jones:
You couldn’t say no.

Hans Schatz:
So, I was there, and I do most of our events because I want to see the actions of our customers, and because you learn a lot, right?

Chris Stadler:
Yep.

Hans Schatz:
I poured. This lady come up. She goes, “Well, I’d like to try that nitro coffee,” so I poured it. She goes, “Oh, I’m lactose intolerant,” or something to do with dairy and, “I can’t drink that.” I said, “Ma’am, it’s just coffee.” She goes, “No, clearly there’s something in there.” I said, “Ma’am, I promise you, it’s just coffee,” and she set the cup on the top of our thing and said, “You know, I just don’t like people like you,” and turn around and walk off. I’m like, oh, what do you do? So, that’s how awesome it looks. It looks like it has those things in there.

Mike Jones:
Yeah, it’s very [crosstalk 00:17:34].

Hans Schatz:
It’s creamy and smooth, and we have a bunch of coffees that we do, from a dark roast to a medium roast, to a light roast, to organics, and we even do a flat cold brew. So, we pushed that.

Chris Stadler:
You should have said, “Let me take the cream out,” and then take it out like a pencil, like a magic wand. Like bippity, boppity, boo. “Here you go-“

Hans Schatz:
Yeah. There’s just sometimes you…

Chris Stadler:
… but she really wouldn’t like it.

Hans Schatz:
Sometimes you just have to smile and say, “Have a nice day.”

Mike Jones:
Yeah.

Hans Schatz:
So, we really were pushing the envelope, and again, there’s great coffee companies in Arizona. There’s great coffee companies around the world, in the United States and in Arizona. We don’t produce it in our… we have a partner that finishes it with us. The reason why we do that is because they have… they work under SQF specs and they have highly specified equipment that’s actually got patents on it, and they produce a product. Our kegs actually could be stored at ambient, which blows everybody’s minds-

Mike Jones:
That is crazy.

Hans Schatz:
… because it’s under such an unbelievable environment that they’re kegged under, and there’s no oxygen involved. There’s no hand. Everything’s done mechanically, and we have a long shelf life on it, which crushes everybody in the industry. That’s why we… I don’t know that we’ve lost a cutting. Or when people taste it side by side, that’s what we call it a cutting in the industry. And I’m proud of that. We start with great coffee, we roast it beautifully, and it gets kegged through an incredible process. Then our customers and their clients drink that and say, “Yeah, this is the best I’ve ever had,” and it’s easy for them to store because they don’t have to keep it chill. They just have to chill it to serve it.

Mike Jones:
Yep. It does feel like… and correct me if I’m wrong. This innovation, a lot of it is also driven by your partnerships with some of these… as you’re doing wholesale deals, you’re working with customers to understand what’s going to work best for them, craft new ideas based on what they need, as well as your own innovation ideas.

Hans Schatz:
You are spot on. We created that botanical category because one of our big chains came and said, “Hey, our soda sales are crashing at a hundred and something locations. People just aren’t drinking sodas like they used to. You make great teas for us, but they both have caffeine in them. So, people don’t want a soda or caffeine. They’re getting a glass of water, and the problem for me as a restaurateur, I don’t do my menu engineering figuring out that, “Hey, I’m going to sell a glass of water,” which actually has a cost because I got to wash the darn glass when you’re done. Every menu has a beverage, because beverages have an 80%, 90% gross profit. Right? So, it was hurting them and they said, “Can you produce this product?” and that’s how we were like, all right. We went back into our innovation lab. We did a bunch of research.

Hans Schatz:
We found some products that acted like tea, but they were caffeine free, and they were natural, 100% natural. So, we played around for a few months and came up with this thing. We called it a Botanical Infusion. Understandably. It was a little confusing. We laugh inside. We call it Botanical Confusion. People were like, “Well, what’s that? Botanical Infusion, that sounds like… I don’t want any of that.” No, it’s a great beverage. It’s just doesn’t have any… it acts like tea. It looks like tea, performs like tea, but there’s no tea in it, so it’s naturally caffeine free. So, we created this, we pitched to them. They’re like, “This is awesome, but we got over it. We’re good. We’re not going to add another SKU.” So, we are like, “Well, we’re going to take it and run with it.” Yep.

Chris Stadler:
I notice that you don’t have a Southern accent when they like your tea.

Hans Schatz:
Right. We do a sweet tea, but it’s natural. It’s made with Stevia.

Chris Stadler:
Touché.

Hans Schatz:
So, then we found out that people… and again, more by a little bit of dumb luck, a little bit of hard work, just taking it out…

Mike Jones:
It’s always all that.

Hans Schatz:
Right. Taking it out and saying-

Mike Jones:
And trying it.

Hans Schatz:
“Hey, this is a new thing. What do you think about this?” Because we have very good relationship with our clients. We have customers that are in the restaurant business, that are in the coffee house business, college and universities. We have healthcare facilities. We have resorts, golf courses. We have catering companies. I’m proud to say that the Arizona Cardinal’s use our products in their corporate offices and their training center.

Chris Stadler:
Nice.

Hans Schatz:
In the last year, we were able to acquire great really awesome people.

Chris Stadler:
Well, that explains… I mean, they’ve been doing better.

Hans Schatz:
When they were-

Mike Jones:
That’s it.

Hans Schatz:
… five and two, I was like, god, [inaudible 00:21:44] then… and things ended at eight and eight. It’s like, well, yeah, that’s…

Mike Jones:
We got you. We got you.

Hans Schatz:
Yeah, we’ll… you’ll do better next year, but… So, we did get…

Mike Jones:
That’s when they went get back on the Gatorade.

Hans Schatz:
We did get a lot of feedback, and that feedback loop is super important. We get people in our building… You guys are welcome to come out any time. We have a thing called a Company Lab… all our equipment. It’s where people come in and try our products. Almost every day, we have people in our building, and they’re starting a new business, or they’re an existing customer that wants to do something new. Yes, something like that, or they’re training their people and they come into our place so we can show them what we do. They get a little like, “Wow, it’s a Willy Wonka Factory,” because we’ve got about a 16,000 square foot facility. So, that’s a big, big part. Some of it, we just take a little risk. Some of it, we get some feedback and then we do some really neat things along the way that help us know that we’re going in the right direction. The botanical was… people were overwhelmed with how crisp the flavor was, how it was… there’s no… There’s a lot of healthy drinks that just don’t leave a great experience in your mouth, right?

Mike Jones:
Yeah.

Chris Stadler:
Yep.

Mike Jones:
Yep.

Hans Schatz:
Let’s be honest about that. Then there’s drinks that aren’t healthy, that you… like a Dr. Pepper. I mean, I will admit. I have one a month and at the ripe age of 57-

Chris Stadler:
Careful.

Hans Schatz:
… that’s right. It’s like, man, I’m just going to really save for this, because it’s 29 more days till I have another one. Unless it’s a leap year, then I can… anyway. So… but I know it’s terrible for me, and no knock on the Dr. Pepper people, but it’s not a good thing to put in my [crosstalk 00:23:12].

Mike Jones:
That’s not what it’s intended for.

Hans Schatz:
Right. It’s not. It’s just refreshment. So, when you look at it, you got that all the way down to strict health, and there’s categories in between. We realized that, man, we really have something. So, we started working. The botanical thing really grew. It’s our fastest growing category, and in about a year and a half ago, we started working on a bottle format. We had a lot of people telling us, “Hey, you guys ought to bottle of that. Hey, you guys ought to bottle that. Hey, you guys ought to bottle that.” We’re like, “Yeah, we’re a wholesaler. We don’t do that.”

Chris Stadler:
That’s like Sam’s work ethic. We try to bottle that, and maybe you could help us later.

Hans Schatz:
He’s not going to like it, but it’ll work.

Chris Stadler:
He will like the process?

Mike Jones:
It’s like straight out of a super human movie.

Hans Schatz:
You got to think about outcomes. Everything’s purpose driven right? So yeah, I’m sorry. I know I’m bouncing all over for your audience, but-

Mike Jones:
No, this is great.

Hans Schatz:
… I get passionate about it because you can’t… the consumer doesn’t sit still ever, right? Things are constantly moving, and way faster than anybody sitting in my shoes, or probably in this room, can keep up with, but we can watch the echo. Sometimes we’re really smart, and we get a little bit of sprinkle of luck on there, and we pace with some of that. Or, we create a vortex that people go, “Hey, I want to be a part of that.” So when we pivoted and got lucky, and got into the retail industry about two years ago, at an event I was at with Hensley serving nitro coffee from our bike next to BJ with BJ’s Brewhouse. That was at the Strong Man Beer Festival, because they made a beer with one of our coffees. I’ll tell you about that in a second.

Chris Stadler:
Oh.

Hans Schatz:
And this guy walks up and says, “Hey, is that nitro coffee?” “Yes, it is.” “Can I try it?” “That’s why I’m here.” “Oh, it’s the best I’ve ever had. I love you,” and he’s like, “I’m going to send one of my coworkers over. He’ll be here in a couple of hours. He might be a little drunk,” but I’m like, “Hey, we like drunk people. That’s no big deal. We’re in the beverage business. It’s like cousins.” Sure enough, a couple of hours later, a guy comes up, “Hey, I’m so-and-so. Are you Hans?” I’m like, “I am Hans.”

Chris Stadler:
Well, he’s not speaking with a Southern accent, but he did call you Hans.

Hans Schatz:
He did call me Hans, and he’s ride. I can’t say his name. I don’t call them out. He worked at Fry’s. He now works at Hensley Beverage, but he’s just a-

Chris Stadler:
So, you know who you are.

Hans Schatz:
… crazy dynamic guy. He’s like, “I’m supposed to blah, blah, blah.” Anyway, that chance encounter turned into us putting our nitro in their wine bars, and that didn’t go quite where they had hoped it to, because people go there to drink beer, but it opened the door for us to do their coffee and their bulk bins, which you were talking about. We were able to take over that business from a big, big company out of Minnesota and branded CULT, locally roasted, made in Arizona. We love ‘Made in Arizona’ tagline. All of our national stuffs has ‘Made in Arizona’, by the way. We have people say, “Why do you put that on there?” Because it’s true. Because now you actually know your stuff’s coming from. Arizona iced tea. You know where it’s made?

Mike Jones:
Origin matters.

Hans Schatz:
New Jersey.

Chris Stadler:
Yeah.

Mike Jones:
Yeah, origin matters.

Hans Schatz:
All right? Hey, let that sink in. Anyway, nothing against them. So, that pivoted our company and it was fortuitous, because two years ago, nobody could have predicted that the food service side of things would be taken to their knees. Our big clients, like BJ’s Brewhouse… and Wildflower Bread Company has been a customer for 19 years, and Biscuits Cafe and PayWay, and Pieology, and other regional… They all just got their legs taken out.

Mike Jones:
Yeah.

Hans Schatz:
So, our retail business went… and that’s what opened the door. We were like, “You know what? We can bottle that botanical. We do have an idea,” and this is breaking news, because nobody knows, by the way. We haven’t done anything for…

Mike Jones:
Okay. You heard it here first.

Hans Schatz:
You did. You’re literally hearing it here first, which is a little nervous… nerve-wracking for me-

Mike Jones:
A little nerve-wracking. All right.

Hans Schatz:
… a little bit, because we haven’t said, “Hey, look, who’s coming.”

Mike Jones:
All right. Sam, bleep that out.

Chris Stadler:
No. No, no, don’t bleep it out. We’re scooping everyone.

Sam Peggle:
[inaudible 00:26:50].

Mike Jones:
Do-do, do-do, do-do, do-do, do-do.

Hans Schatz:
Yeah, that’s… So, for us, it’s exciting and it’s scary. A huge capital investment. We’re actually raising some money right now. We’re doing a capital round and got some really amazing people get involved in our company, and we’re talking to big national mass, grocery chains, big C stores, some help from Hensley, some help from some of our big brokers we’ve signed. We signed a broker in Bentonville, Arkansas. You’ll probably figured that one out. We’ve got a guy in Texas, in North Carolina, and a really great guy here locally. So, we have a lot of activity going on for our little company. We’re getting stretched in a bunch of different ways while keeping a close eye on what we do every day, making sure that our quality is what it is.

Hans Schatz:
I think we’re the only coffee roaster in Arizona that gets a federal inspection for HACCP, Hazard Area Critical Control Points. We actually pay to have them come in once a year, and it’s painful. They’re in for about 12 hours. They go through everything, including all of our reporting. We just were inspected in December and got a 94.

Mike Jones:
That’s awesome.

Hans Schatz:
We had two things we could cure. We could end up with a 96. It will be our highest score ever.

Mike Jones:
That’s awesome.

Hans Schatz:
It is more than awesome. What it does is it lets our customers know that they can have full confidence in our food safety. We follow the food safety modernization act and we’re doing things the right way. Then we have some of our big clients say, “You’ve got to be… We want you to do this. You don’t have to,” but-

Mike Jones:
But it makes it easier. It definitely makes it easier.

Hans Schatz:
… we feel better if we do, and our QC people don’t have to come in and do it ourselves if you’ve given us an NSF score, which we do every year. So, big stuff for us.

Mike Jones:
Yeah.

Chris Stadler:
Can you talk a little bit more about the ‘Made an Arizona’ thing? So, you said because it’s made in Arizona, but I sense there might be a little more behind that.

Hans Schatz:
You know, I wasn’t born and raised in Arizona. I’ve been here… this is the longest I’ve ever lived in any state. I grew up a military kid and I think people love having… identifying with something that has an identity. That’s not a nebulous, right? A lot of products out there, you can try really hard and you can’t find where’s the soul of this thing? What makes this thing? Why is this cool, or how do I connect with it better? So, we started putting that on it when we changed our name, ‘Made in Arizona’, and we got an overwhelming response that that’s super cool. We thought it was cool, because we were made in Arizona. The company was started here, launched here. It’s still family owned by the same family.

Hans Schatz:
We thought, you know what? There’s not a lot of… Yeah, there’s the ‘Made in Arizona’ bug that goes on a lot of crafty stuff and whatever, but there’s not a lot of big players that claim that. So, we’re going to claim it because, well, number one, Arizona is a phenomenal place. I lived in Vegas back in 2000 when they were 6,000 families a month moving in. For my job. I got moved around a bunch. That was one of my two years… I had a lot of two years tops. That was one of my two year stops, and everywhere you look, they’re pushing dirt. And I see that here, and this is a more wholesome community. This is a more thriving community. It’s a great business environment. Just how business functions and the tax law, all that stuff that helps businesses be successful. Arizona is a great place.

Hans Schatz:
That’s why you see a lot of big manufacturing coming in, and we just said, “Hey, Arizona is special. We’re going to help do our part to, A, claim it and then tell people why it’s special, that we’re proud to be here. When we go to different places… We’ve had some brokers in other states be like, “Are you sure you want to leave that on there?” and we’re like, “Yes.” Then when the people there, when we get feedback from the actual people that are buying the product, they’re like, “Oh, this is super cool. Glad to know you guys are from Arizona. What a great place,” and, “That’s where the Grand Canyon is, right?” It’s like, “Yes, that’s where the Grand Canyon is.”

Hans Schatz:
It’s really become a part of our brand as much as our name, because when you see what we do… almost everything we have… We have a couple of variations of things that it says ‘Made in Arizona, Made in Arizona’. And a couple of people that push back, I basically told them to pound sand, that we’re not taking it off.

Mike Jones:
Well, and ultimately it’s those… the end customer, right? If they’re giving you that feedback, that this is a point of connection, it’s a point of… whether they really understand maybe all the depth of it that you have behind it, they’re connecting with it. Even if it’s just as simple as, “That’s where the Grand Canyon is.” I can think about where you’re at and I can relate that to something I already know, and that’s huge. That’s really huge.

Hans Schatz:
Right. Yeah, and it’s not an overused thing here.

Mike Jones:
No.

Hans Schatz:
And when you see… We’re a great local company. We do it regional, but we see an opportunity to become a national name, a big national name, and we think that that’ll be part of what people will remember. People love the CULT thing. That was a whole nother story because the owner almost passed out when I told him what we were doing. His sister, who’s now 80… she’s a sweetheart. She was a marketeer in Madison Fifth Avenue, by the way. She did Oreo jingles. That was her claim to fame-

Mike Jones:
Oh, wow.

Hans Schatz:
… that were national jingles. She used to be in vaudeville with Judy Garland and those people.

Mike Jones:
Oh, wow.

Hans Schatz:
She’s awesome. She’s like, “Well, I think they’re going to think you guys buddied up with that Jim Jones fella, because you make a thing that looks like punch.” I’m like, “Hey, that’s a great idea for a t-shirt for [inaudible 00:32:11], right?” But-

Chris Stadler:
Yeah, it is.

Hans Schatz:
… but we softened it a little bit. We call it becoming part of the CULT crew, not joining the CULT. So, it’s a little bit… and people just love it. They love it. They love it.

Chris Stadler:
So, obviously, Seattle is coffee, right? How do you see it playing, or maybe, how do people react, given that tension between, okay, but you’re not Seattle. So, why Arizona?

Hans Schatz:
We get through that when people try the product, and they try it and they go, “Wow, this is really good.” They do a little bit more research and they find out we have people… like our senior roaster has been with us for 15 years. That’s just unheard of in this business. He apprenticed under our master roaster for 10 years while the master roaster apprenticed under the guy that helped us come with up with the name that retired at 60, by the way. The guy was a genius in the beverage industry. He’s well-Known across the East coast, West coast. So, we have really, really good people. So, that’s a great question, and people get their paradigm shattered all the time, right?

Hans Schatz:
Where, yes, Seattle was an epicenter and Starbucks paved the ground for a lot of companies like mine, but today, people will push Starbucks out of the way to go find a local regional specialty coffee roaster. No knock on Starbucks, but you get big and you’re now using these giant vats, and you’re roasting, and [inaudible 00:33:38]. All this mechanized process. We have three big roasting machines. It’s all done by hand. Yeah, there’s a little technology that helps, because we’ve got some really tough customers that they have… We’ll actually measure the [Agtron 00:33:49], which is the color [inaudible 00:33:51] your eyes can’t see.

Mike Jones:
Wow.

Hans Schatz:
We do that for every roast because we have to for HACCP, so we say on top of all of that, but I think it comes down to getting to know us and then just trying the products. When we launched this bottle, it’ll say if… You can look right at the packaging. It says CULT on there, but it’s Botanical Infusions and what it is, and people will… Probably what we’ll be known for in the next two to three years, coast to coast, is that botanical. We’re bringing something to a category-

Mike Jones:
It’s super unique.

Hans Schatz:
… that doesn’t exist.

Mike Jones:
It’s super unique.

Hans Schatz:
It’s like Buy. When Buy, there wasn’t a coffee cherry drink, and you can think of a couple of others that kind of fall in that category. So, we’ve modeled some things after some people who have gone before us and some of the tough things that they had to fight through, and some of the things that they didn’t know they were doing really well, that they could have leveraged sooner, and that kind of thing. So, we’ve done a lot of research. As a matter of fact, I’m on the board of two different universities, the Hotel Restaurant School at NAU and the Technology Entrepreneurship Management School at ASU in the West New Mexico campus in Mesa, and GCU is a huge customer of ours. And U of A is a great customer of ours.

Hans Schatz:
So, when we started working on this project, I went to all four universities said, “Hey, would you guys like to partner with us?” They all had a little different reaction, but they all said yes. ASU their W. P. Carey bachelor’s degree program put a class on it, and came back and did a deep, deep dive on consumer segments and what they’re looking for, and what are the key things? It was unbelievable. NAU took their upper level marketing class and said, “Here’s some digital marketing strategies.” GCU did something like that, and then U of A gave us … They were an early adopter with our botanicals and had been serving it on campus for almost five years. Gave us some feedback why and said, “Let us be an activation spot for you.”

Hans Schatz:
So, we have this… I don’t know that it’s ever been done in America, right? We have these bright, smart, unbelievable students giving us information and spending the entire semester taking a deep dive, telling us, “Here’s what we found. Here’s what the consumer is looking for. Here’s your customer segments. Here’s the hot buttons. Here’s what they like. Here’s what they don’t like.” So, we used all of that information when we developed our label, what it says… Because as you know, in the beverage industry, the front panel, you have about half a second, maybe less, to garner somebodies attention. We’re new and Botanical Infusion, what the heck is that? I almost said another word. You had to bleep me.

Hans Schatz:
So, the front panel has to be interesting enough, so they grab it, they flip the bottle over and they look at the check boxes. It has this, it doesn’t have that. It has this, it doesn’t have that. Our check boxes are amazing. Has natural antioxidants, natural electrolytes, no sugar, no caffeine, low to no calories, one carb, so it’s keto friendly. It’s all natural. It’s clean… The way we make it, our extractor and bottler, they take it through this one hour slow steep.

Hans Schatz:
Now, keep in mind, they make 4,500 gallons at a time… one hour slow steep, a flash pasteurization, which means they bring the temperature back up. So, we have to add nothing to the label. If you pick that up and read the ingredients on the label, there’s no-

Mike Jones:
It’s just pure, natural…

Hans Schatz:
… not one single chemical.

Chris Stadler:
That’s awesome.

Hans Schatz:
All 100% natural. There is nothing like it in the marketplace. Here’s the kicker. It tastes good.

Chris Stadler:
Filtered water-

Mike Jones:
That is the kicker.

Chris Stadler:
… hibiscus, green rooibos, butterfly, pea flower. I’m almost done elderberry, natural flavors, all natural, Stevia leaf, cinnamon. That’s not complicated.

Hans Schatz:
It’s not complicated. People will look at it and they’ll check their boxes and they’ll be like, “Try.” The big thing for us is to get a trial, right? The bottle has to bring them in. The flavor, it’s got to bring them back. I’m sorry. I went down another rabbit hole.

Mike Jones:
No, no, it’s fantastic.

Chris Stadler:
[crosstalk 00:37:45] That’s good, but I was curious though, because I wanted to go back to the Arizona thing, because I think that…

Mike Jones:
Chris hasn’t given up. He’s riding the bull.

Chris Stadler:
[crosstalk 00:37:52] no, no.

Hans Schatz:
“So, you have an Arizona company?” “Yeah, we do.”

Chris Stadler:
I like a… Yeah. Well, so what I want to know is, in your opinion… so, looking around at Arizona, you guys are one of the few who are saying, “Hey, all right. Yeah, sure, coffee is… it’s been Seattle, but we’re an Arizona company and we’re standing on that.” As you look around at Arizona and you’re looking at other companies, and you’re seeing them almost kind of maybe avoid… kind of avoid taking that stand, what kinds of industries do you think could really maybe benefit? I mean, based on your understanding of why you guys are standing… taking that stand for Arizona, what other industries are just like, “Man, you guys should be doing this. You guys should be… put the label on?”

Hans Schatz:
I’m going to answer that in a holistic way.

Chris Stadler:
Okay. That’s all right.

Hans Schatz:
I think companies are fearful of taking a position on a lot of things, and they say things that are very common, that lots of other… their peer groups are competitors could say, right? So, there’s no real good point of differentiation, and boardrooms… boards… you order a horse, a camel comes out, right? Because you’ve to satisfy all these different opinions and-

Chris Stadler:
Designed by a committee.

Hans Schatz:
… designed by a committee. That’s right. So, I think that companies are victims of that, and you’ve got companies on the fringe, which are hard to talk about, so they never make it in the mainstream. They’re cool, but they’re fringe companies, and you’ve got these big companies over here that have been around and they’re big. They move a little slower in whatever sector they’re in, apparel, electronics, food, beverage, entertainment. I think that you have to look at your industry and you’ve got to look through your industry to your client, to your customer. Who are you trying to make excited? Then ask the question, is this an important part of our brand message? I think for the answer for a lot of industries… the answer would be yes, depending on can you stand on that? Are you truly… It’s like Arizona Ice Tea. Stuff’s made on the East coast.

Chris Stadler:
Yeah. They can’t really stand on it.

Hans Schatz:
So, it’s just the main play, right?

Chris Stadler:
Yup.

Hans Schatz:
So, we tell people, “Hey, we’re from Arizona. We know a thing or two about hydration. It gets freaking hot here.” If you don’t hydrate, you’ll die, literally die. We service some hospitals, some cancer centers, and they are so ecstatic about that product because they found out it hydrates their cancer patients better than anything they’ve ever used, because it’s radiation chemotherapy kill you from the inside out, right? They’re killing cells and they’re literally burning your body. So, they put them on like Pedialyte and all the stuff that has terrible stuff in it, and they know it, and water can’t hydrate you enough.

Mike Jones:
No, it doesn’t have the electrolytes.

Hans Schatz:
If you know the science about water… So I’m going to come back and answer you. If you know the science about water, all the water we drink-

Mike Jones:
Just goes right through.

Hans Schatz:
… is going through some kind of purification process. Well, water is super smart and has a memory, and it rebuilds itself when you drink it. So, it starts pulling salts and minerals out of your body, and if you drink a ton of water, you’re stripping… you’re not help… Yes, you’ve got a lot of water, you’re going to go to the bathroom a lot, but you’re stripping things out of your body your body desperately needs. That’s why that drink, that Botanical Infusion that we’ve created is one of the single best hydrating beverages you could ever drink. You can drink as many as you want all day long, because there’s no chemicals on it. There’s no sugar in it. There’s no caffeine in it-

Mike Jones:
And it tastes great.

Hans Schatz:
… and it tastes great. Right. So, I think it’s a very personal decision. It can’t just be a marketing meme? right. A meme, as my young son says. It has to be something that you believe in, that you put your arms around it, and it becomes something that you do, and you don’t say it in an apologetic way, right? You say it in a bold way, so we’re proud to be from here. This is our roots. This is our epicenter. We’ve got great customers. We’ve got a great marketplace, but we’re going to take this product. We’re going to share it with other people, and we’re going to tell them a story that, hey, we are an Arizona company. We don’t have to be in Seattle to roast great coffee. Just try it. We just want trial. Everything we do is we want trial. When people try it one time… because we know when they try it one time, they’ll become an evangelist. In most cases, they love our products in whatever category it’s in.

Chris Stadler:
You guys should do a story-

Hans Schatz:
Honestly, I was a little nervous about it, because I didn’t know… I felt passionate about it, but we started getting people in California and just crazy place say, “I love that about your… I love that on your branding, that it says ‘Made in Arizona’.” It’s was like, “Wow, do you really? Because I really like it, too.” Part of it, we kind of balanced out the logo and we’re like, “Hey, put that up there.” So, it’s just become part of our story.

Chris Stadler:
So, I was wondering if you guys had a story where you bought some coffee beans and you left them in the car, and then… you didn’t even have to roast them, and then you make coffee it was just like…

Hans Schatz:
Well…

Chris Stadler:
Because I’m just wondering if there isn’t some kind of story-

Hans Schatz:
Like a sidewalk skillet?

Chris Stadler:
… like a-

Mike Jones:
I mean, Arizona is basically one giant roaster.

Chris Stadler:
… a campaign. Like, “So dry, the coffee roasts itself.”

Hans Schatz:
You know-

Mike Jones:
Get the wind blowing.

Hans Schatz:
… that’s a great idea. I’m going to steal that from you, by the way, but we roast… Coffee roasts at around 450 degrees. So, it’s-

Chris Stadler:
Yeah, [crosstalk 00:43:00] perfect.

Mike Jones:
Well, not quite there. Not quite there yet.

Hans Schatz:
Right. [crosstalk 00:43:02] the right spot at the right time, with the right kind of pan and light coming in-

Mike Jones:
Give it a few more years.

Hans Schatz:
… yeah, that’d be kind of fun. Yeah, like a skeleton trying to roast coffee.

Chris Stadler:
Yeah. It was like, Seattle cannot even begin to say anything like that.

Hans Schatz:
Seattle can’t touch this. That’s right.

Chris Stadler:
Yeah.

Mike Jones:
Maybe at Chernobyl.

Chris Stadler:
Yeah. [crosstalk 00:43:15]

Hans Schatz:
Hey, can I share with you-

Mike Jones:
Yes, please.

Hans Schatz:
… some really… With all this excitement, we’ve got some really interesting collaborations that are in process that are coming out soon. If you’re familiar with SanTan Brewery, they have a great group over there and they’re also a distillery. We had some people approach us and say, “Hey, we love your coffee. Can you guys do a coffee liquor?” and we’re like, “No. We don’t do liquor. However, we have some friends,” because they give us their empty whiskey barrels.

Mike Jones:
Oh, that’s cool.

Hans Schatz:
We age coffee in it,.

Mike Jones:
That’s cool.

Hans Schatz:
We put green coffee in for about 60, 70 days.

Mike Jones:
So, you age the beans themselves?

Hans Schatz:
We let them sit inside the essence of the whiskey barrel.

Mike Jones:
That is cool.

Hans Schatz:
Green coffee is like concrete. If you bit it, you’d break your tooth. Roasted coffee, you could bite and it would crumble.

Mike Jones:
Yep.

Chris Stadler:
Okay.

Hans Schatz:
So, these green beans…

Mike Jones:
I roast my own coffee actually.

Hans Schatz:
You should have told me. I would have brought you some.

Mike Jones:
No, that’s all good. It’s all good.

Hans Schatz:
We’ll hook you up. So, we let the green beans soak in here and we roast it. We’ve been doing that for a while and people go gaga over it. It’s whiskey barrel aged coffee and we have a big e-commerce customer that’s going to put it under their own brand and sell it all over, and do it as an LTO, because we only produce so much at a time. However, we went to SanTan and said, “Hey, we got these people. They want to do coffee liquor.” They’re like, “Awesome. Bring us five different coffees.” We did. We went through this whole process. Right over the holidays, they said, “Look, we got down to two. We picked this one with this particular coffee of yours. Try it,” and there was… Our customer was there. That’s a new restaurant group that’s about to open.

Hans Schatz:
They’re going to build a bunch in Arizona, and they buy this product out of Australia. I’ll leave it nameless, but dead rhino guts, SanTan’s product. I mean, it was so drastically different. The guy said, “Yeah, that’s why we don’t want to serve it. It’s terrible.” He’s got stuff all over in Florida and the Caribbean, and he wants to sell it. So, SanTan’s going to… they’re going to do 50 case runs for now, but they’re going to co-brand CULT on their bottle

Mike Jones:
That’s awesome.

Hans Schatz:
They’re saying that cool throwback label they do. That’s one. Number two, I just mentioned, BJ’s, a big customer of ours. We service all 210 of their restaurants across America. Their head brewer was here, went to Reno, which is one of their prime brewing places. He got a bronze medal in the North American Beer Brewers Festival, making a beer with one of our coffees. They love it so much, they’re going to can it and put it in their beer club.

Chris Stadler:
Oh, that’s cool.

Hans Schatz:
They just started this beer club. Starting in California. They have 60 something restaurants in California, but they have thousands of people that have signed up for it and they’re co-branding with us on the cans.

Mike Jones:
That’s awesome.

Hans Schatz:
They’re going to roll it across the country. And the last one is we love the … our friends, the Mother Road Brewery up in Flagstaff and Michael’s. They’re just amazing. I think that what they do is amazing, and there’s a lot of great people in this industry, but we’ve gotten to know them, so of course, we’re passionate and we’re biased. They’ve been using our botanical to do a beer and everything they do is Route 66. This is a working name where they have a beer called Low Beam. They serve it in kegs, in the restaurant, Low Beam-

Chris Stadler:
Love it.

Hans Schatz:
… but they’re trying to get it, so it’s a hundred calorie or less beer, so they can call it a low cal beer, but they’re using our botanical to do that.

Chris Stadler:
That’s cool.

Hans Schatz:
They’re going to can it, too-

Mike Jones:
That’s awesome!

Hans Schatz:
… and they’re going to co-brand with us. These aren’t things you plan.

Mike Jones:
No.

Hans Schatz:
These are just super cool things that happen-

Mike Jones:
You build relationships…

Hans Schatz:
… because we get involved with the community.

Mike Jones:
Yep, right. You build relationships, people trust you, they know you have a great product, and you’re going to do them right.

Hans Schatz:
And we love them and we all become like family. So, those are just really cool things… and to your point, it helps build our brand. Is that a sales thing for us? Not really, because raw materials and we do it… we help them out. We do it at cost.

Mike Jones:
But it puts CULT out there, and in front of an audience that needs to know about CULT.

Hans Schatz:
Right.

Mike Jones:
So, that’s really cool. I’ve got one serious question before we get to a final, not so serious question.

Hans Schatz:
[inaudible 00:46:56] shredder.

Mike Jones:
All right. So, my final serious question is all these innovative ideas, all these new products, all these collaborations that I think are just phenomenally awesome, how do you stay true to the CULT brand in the midst of that?

Hans Schatz:
That’s a good question. I think the CULT brand embodies taking risks, and not having a point of stasis where this is just who we’re going to be and we’re always going to be like this. And again, there’s no knock. There’s some coffee companies out there that have a coffee product that’s their legacy product. They do two or three coffees and they’ve had them forever. People love them. That’s great. Our aspirations are to be an amazing Arizona company, but we’re looking over state lines, right? We want to be an interstate company. We already are. We have products in about 30 states today through our chain partners.

Hans Schatz:
We’ve got some other conversations going on the coffee side and I’m under NDA, so I can’t… as bad as I’d like to say who they are … And in the botanical. That’s going to be a national launch for us bottle, that bottle, that RTD, and probably at the latter part of this year. I think for us, again, watching the consumer and trying to really pay attention to what do people like? What do they want? Then saying, hey, can we do that really well? Or can we go in… can we create a category that doesn’t exist, and that we can be… that when people think of this, they’ll think, “Oh, you got a CULT, or you got a botanical,” and somebody’s going to come up with another new name. They’re like… well, they’re still going to call it botanical.

Hans Schatz:
It’s like making a Xerox. “You’re going to make a copy machine?” “No, I’m just going to make a copy.” “Oh, you’re making a copy.” “Yeah, Xerox.” So, that’s an exciting opportunity for us. I’ve got some really smart people that work in our company, and so, they can pace. We run a little frantic sometimes, but it’s a really good question, because the core is always that three legged stool. Our suppliers are critical to us and we’re very close with them. We just got back from one of our… well, last January, a year ago, before COVID hit. We were visiting one of our coffee suppliers in Honduras, women owned and operated 100%. The dudes work for the ladies. An amazing organic coffee. That’s a big, big coffee for us.

Hans Schatz:
Those relationships are critical. Our teams internally, and then our customers, and I know… not that it’s any big whoop, but I know most of our people by first name, and I email back and forth with the CEO of BJ’s and do special projects. And I coach some of our clients that are new in the business with their business plans, all that kind of stuff, because I come out of big business and I spent a lifetime helping run a $3 billion company, so I can take some of those learning’s… Not that I was super smart at it, but you experience stuff. You learn stuff.

Mike Jones:
Yeah. You’ve learned things.

Hans Schatz:
Right, right.

Mike Jones:
Yup. That’s fantastic. All right. Final question. This is going to put you on the hot seat. So, we’re big fans of creativity, and one exercise that we like to do to inspire creativity is Improv, and there is a game in Improv called Name 10 Things. So, if you’re game, we’re going to play Name 10 Things with you on the hot seat. Are you down for that?

Chris Stadler:
Are you game?

Hans Schatz:
I’m going to do my best.

Mike Jones:
Okay.

Chris Stadler:
Yes!

Hans Schatz:
I hope my wife’s not listening.

Mike Jones:
So, I’m going to give you the theme or the category, and you need to name 10 things as quickly as possible, off the top of your head. So, the category is going to be name 10 products that’ll never have CULT on them.

Hans Schatz:
Cigarettes.

Mike Jones:
One.

Hans Schatz:
Tires.

Mike Jones:
Two.

Hans Schatz:
Shotgun shells.

Mike Jones:
Three.

Chris Stadler:
Aw.

Hans Schatz:
Paring knives.

Mike Jones:
Four.

Hans Schatz:
Well, I was going to say running shoes, but I’m not going to put that one out there because there’s a possibility for that.

Mike Jones:
What?

Hans Schatz:
Automobiles.

Mike Jones:
Five.

Hans Schatz:
Airplanes.

Mike Jones:
Six.

Hans Schatz:
Cats.

Mike Jones:
Seven.

Chris Stadler:
Cats!

Hans Schatz:
Baby bottles.

Mike Jones:
Eight.

Chris Stadler:
Okay.

Hans Schatz:
Electronic equipment.

Mike Jones:
Nine.

Hans Schatz:
And nuclear bombs.

Mike Jones:
Yes, 10! I love that last one. The 10th one is-

Chris Stadler:
Nuclear bombs.

Mike Jones:
… always the dinger. It’s the one that’s the furthest out there and just…

Hans Schatz:
So, it’s a super easy question to ask until you have to answer it.

Mike Jones:
Yeah.

Hans Schatz:
Right. So, thanks for making me sweaty.

Mike Jones:
Thank you. Thank you for sweating for us. I enjoyed that at least. Hans, is there anything else that you want to let our listeners know about that you’ve got coming up? I know we’ve run through the gamut of a lot of things that you guys are doing.

Hans Schatz:
We did. Hopefully I didn’t put anybody to sleep. I did run right over the top of a product we’re right in the process of launching, that you’ll see… actually, Fry’s is going to launch it. Some of our local food service operators will launch it, but it’s a … It’s just called a coffee single. It looks like a hot tea packet, right?

Mike Jones:
Right, we’ve got one right here.

Hans Schatz:
We’ve got it right here.

Mike Jones:
We’re looking at it.

Hans Schatz:
It’s in an overwrap. It’s in an envelope. You open it up. All you need is hot water. It’s an amazing product because you can now have specialty grade CULT coffee anywhere, anytime. If you’re on a road trip, if you’re in your RV camping, if you’re hiking, hunting, fishing, if you’re in your private plane, you’re going into FBO, in your dorm room, in your office, because it’s COVID friendly. Only you touch it. So, it’s our amazing specialty grade coffee. We’ve got three that we launched with the decaf and two single origins. I would encourage anybody to try it. I’ve told people that if you reach out to me, I’ll send you a sample. So, I’ve been sending samples out like crazy.

Mike Jones:
Yeah.

Hans Schatz:
It’s a technology that we licensed, and the company is a B Corp, and the packaging is a hundred percent compostable, the overwrap and the sachet that the coffee is in, you can take the whole thing and throw it in your garden.

Mike Jones:
That’s so cool.

Hans Schatz:
It’s made with vegetable link. It’s sealed ultrasonically. There’s no glue, there’s no staples, but here’s the thing. It is literally a factor of a hundred times better than a K-cup. Anything that’s on a pod, anything that’s done quick like that… because coffee needs a little bit of time to steep to pull those really rich flavors from out of. This coffee is amazing. My friends say, “Hey, this is better than the local coffee shop I go to,” outside of Arizona, of course.

Chris Stadler:
I have always wanted this. I’m serious. I’m like, why-

Hans Schatz:
Your dreams have come true.

Mike Jones:
[crosstalk 00:53:01] have it, Chris.

Chris Stadler:
… has this not happened before? But the one in my hand is an Organic Honduras [kamyu 00:53:07] cap. Is that how you say it?

Hans Schatz:
Beautiful.

Chris Stadler:
Milk chocolate, hazelnut, low apple-like acidity.

Mike Jones:
Medium roast.

Hans Schatz:
And it’s an incredible coffee.

Chris Stadler:
Can’t wait.

Mike Jones:
That’s awesome.

Hans Schatz:
So, that’d be the last thing, and I just want to thank you guys very sincerely. with all the fun. This means a lot to us, to be able to talk about our story and what we’re doing.

Chris Stadler:
Thanks for coming on.

Mike Jones:
I’ve thoroughly enjoyed it for the second time around. It was great conversation the first time just one-on-one, and I have loved it for the second time round, and there were some new stories in there, some new things I learned, which was really good. If people want to find out more about CULT, ilovecult, C-U-L-T.com.

Hans Schatz:
Super easy.

Mike Jones:
That’s a great place. Obviously, all of their products are in all sorts of places that people should go and find, and try-

Hans Schatz:
Absolutely.

Mike Jones:
… and fall in love.

Hans Schatz:
Yeah.

Mike Jones:
Thank you, Hans, so much for coming on.

Hans Schatz:
No problem. Absolute pleasure.

Mike Jones:
This was fantastic conversation.

Hans Schatz:
Yeah. [crosstalk 00:54:01]

Mike Jones:
I want to thank all of our listeners for joining us again for another episode of AZ Brandcast. As always, you can find us on all sorts of platforms like Apple and Google Play, and Spotify. Pandora, actually. We’re on Pandora now. Which is really cool.

Chris Stadler:
Crazy.

Mike Jones:
If you want to find out more about our show and what we do, you can keep in touch with us at azbrandcast.com. Get signed up for our newsletter there. You can get every episode, or just get it through whatever podcast app you like, whatever works for you. Don’t forget everyone. You are-

Chris Stadler:
You are remarkable.

Mike Jones:
… remarkable.

Chris Stadler:
The AZ Brandcast is a project of Resound and is recorded in Tempe, Arizona with hosts Mike Jones and Chris Stadler. It’s produced and edited by Sam Peggle. Music is produced and provided by Pabrid, an Arizona based music group. You can find us on Twitter, Facebook, LinkedIn, and at azbrandcast.com. If you’d like more episodes, subscribe on iTunes, Stitcher, Google Play, or wherever you prefer to get your podcasts. To contact the show, find out more about AZ Brandcast or to join our newsletter list to make sure you never miss another episode, check out our website at azbrandcast.com. Copyright Resound Creative Media, LLC, 2020.