IN FOCUS: Small Business – 'Making soda fun again'

Posted on Jan 1, 2013 :: Small Business Spotlight
Sharon Verbeten
Posted by , Insight on Business Staff Writer

Co-owners Dave Talo, left, and John Mathison have brought returnable bottles back in the soda business with their New London company Flavor 8 Bottling. The eco-friendly returnable packaging and use of real sugar in their mix have been attracting the interest of consumers.

After being turned down by 29 lenders, Dave Talo was beginning to think his dream of reviving nostalgia and “making soda fun again” was all for naught. But when a childhood friend also saw the potential in Talo’s glass bottling idea, the Menasha natives – who grew up loving ice-cold bottled sodas at neighborhood block parties – teamed up to create Flavor 8 Bottling in New London.

“We came up with the idea about three years ago with the modern take on it,” says Talo, who co-owns the business with John Mathison. “(We thought) it’s like everyone loves this product; why isn’t it around?”

Launched in early 2011, Flavor 8 delivered 21,000 cases of soda, at 24 returnable glass bottles per case, during its first year. In a 4,800-square-foot New London facility, the company bottles a case a minute, averaging about 500 to 600 cases per week of their sodas (or “pop,” depending on your lexicon), made with real sugar.

While the core of its business is in the Fox Valley and New North, a recent agreement with Johnson Distributing in Stevens Point will extend Flavor 8’s reach to 10 counties in central and north central Wisconsin.

The goal is to sell the soda statewide, Talo says. But Talo and Mathison faced a big question as they sought an outside distributor: “Do you want to be a delivery service or a bottler?” That was the question facing Talo and Mathison when deciding to find an outside distributor. He notes that while it’s not inexpensive to work with a distributor, Johnson Distributing’s larger account base is a boon to a small company like Flavor 8. Johnson picks up the product in New London and serves accounts on a route.

That agreement has freed up Flavor 8 to focus on what it does best – bottling old time refreshment in a way that is piquing a lot of consumers’ interests right now.


Old is new again

Getting back to naturals is a trend many major manufacturers are embracing and touting, and that hasn’t gone unnoticed by Flavor 8. “People want sugar-sweetened soda in heavy glass bottles,” says Talo.

Why? According to Talo, the taste difference between sugar and high-fructose corn syrup is noticeable. Also, people just feel better using products in recyclable packaging, such as glass. Using authentic vintage equipment to create the product enhances the nostalgia factor, and Flavor 8 uses a restored 1950s bottling line found in a warehouse in Kentucky to create their sodas, using an old-school, syrup-drop method.

Nostalgia and equipment alone, however, weren’t enough to make Flavor 8 a reality. Talo and Mathison’s partnership seemed ideal: Talo brought with him mechanical experiences, and Mathison’s background is banking, so they were able to divide the responsibilities in a meaningful way.

And after securing a $3,000 grant from the Wisconsin Entrepreneurs Network, Talo began working on a small business plan, with the help of Quick Start in Menasha. “That worked out really well,” he recalls.

Still, being self-schooled in the bottling business, Talo – a first-time entrepreneur – realized it might be helpful to find a mentor. So he walked right into Twig’s Beverages in Shawano, which bottles Sun Drop and is one of only three returnable glass soda bottlers in the state, and queried owner Dan Hartwig.

And Hartwig – who is now the last returnable-bottle Sun Drop bottler in the nation – was happy to help, seeing camaraderie, not competition. “His products are not competition with mine; I have a franchise that nobody else can bottle that product.”

Hartwig also saw the benefit potential in bulk buying. “There are not a lot of returnable bottlers,” he says. “The more of those that we can have, the better it will be to buy bottles and buy crowns [tops], etc., so we can be stronger. There’s just not enough of us out there.”

Hartwig took Talo under his wing, teaching him the ropes; the two now share resources and attend trade shows together.

“In the marketplace, the more people who have returnables on their mind, the better. Everyone is treated the same,” says Talo of the bottling industry. “It’s a great little fraternity.”

Talo believes Flavor 8 is the first returnable glass bottle soda company to launch in about 40 years. It is among only 13 companies in the United States in this niche; most are on the East Coast, though Wisconsin also is home to Little Seymour Beverage in Seymour. “All are small mom-and-pop companies,” Talo says.

Even though Flavor 8’s flavors will be reaching a larger market through distribution, Talo is pleased to remain a small company with a simple goal – “making soda fun again.”

“We’re local, we’re simple, we taste great and we keep the price down,” he says.

“It’s a feel-good thing.”



Flavor Faves?

Obviously, the company’s name comes from the fact that it bottles eight flavors: grape, orange, cherry, black cherry, lime, fruit punch, blue raspberry and cream soda.

But co-owner Dave Talo notes they’ve recently added root beer to their offerings, and several other flavors (strawberry? lemon?) are under consideration. Even though they’re considering making up to 11 flavors, says Talo, it’s not likely the company would change its name.

What’s Talo’s favorite flavor? Working the line, Talo taste-tests sodas every day, but his fave remains black cherry.

“On ice, at night, with a bowl of organic popcorn. That’s a slice of heaven for me,” Talo says.