The following interview is part of our series focused on brand builders and leaders in the CPG Industry. We recently spoke with Salim Najjar, Co-Founder of SOUND Brands, a manufacturer of sparkling teas and tea-infused sparkling water based in New York City.
Legend has it you met your co-founder, Tommy Kelly, while working at a nuclear power plant. Tell me that story.
Salim Najjar: It’s true! We were both working as engineers at Indian Point Energy Center, which powers a good amount of New York City (itself located about 45 miles south of the plant). Tommy was a mechanical engineer and I was an electrical and computer engineer, but working as a mechanical. We were two of the youngest employees there and had similar interests, especially when it came to health and wellness, so we bonded right away. We were both born and raised in the Hudson Valley, not far from the nuclear plant, and we graduated college the same year. We actually learned later that we had played basketball against each other growing up but never formally met until we started working together.
During work breaks, Tommy and I would enjoy unsweetened hot tea for the functionality, and he was a huge fan of bubbles. We stayed away from sugars (and still do) but we noticed that the people around us were all opening sodas, Red Bulls and Monsters for a caffeine fix. One day Tommy came up with a brilliant idea and engineered a dream beverage by marrying tea and bubbles. He bought a Sodastream along with some high-quality loose leaf tea and experimented with the two at home. He tinkered with the formula for about a year and when he brought it in for me to try, it was love at first sip.
And just like that you went all in to launch a purpose-based sparkling tea brand?
Well, the first thing you should know is half way through my engineering degree I realized I didn't want to be an engineer. I wasn’t made for the cubicle life. I started immersing myself in books to find out what topics I was passionate about, and I became infatuated with health and chasing energy. I truly believe the universe presented me with the perfect match, from my business partner to the mission-driven products we've created today.
After Tommy presented the initial business plan, my passion for his vision went beyond falling in love with his home-crafted sparkling teas. I believed in his brand vision and how it is reflected in the actual product.
We wanted to create a brand that changed the way people viewed and consumed sparkling beverages.
We wanted to create an unsweetened sparkling beverage made with clean ingredients—something offering complete transparency and respect for the consumer. Most zero-calorie sparkling beverages on the market were “naturally flavored” or naturally sweetened with stevia or erythritol, which gave us both headaches. Meanwhile, for products that were marketed as tea-forward, the actual ingredient of tea itself was often not even one of the first three listed.
We saw a clear gap in the booming sparkling beverage category. Tommy’s extensive research not only illustrated that what we desired in a beverage didn’t exist, but more importantly, also showed me just how passionate he was about the overall mission of the brand he was hoping to create, which was born out of our personal ethos. In early 2015, after five-and-a-half years at Indian Point, we ditched the cubicles and went all in. We funded everything out-of-pocket.
What was your initial go-to-market strategy? What lessons have you learned along the way that have become integral to your business and brand identity today?
Our original brand name was SōDTERRA, or “soda of the Earth.” We wanted the name to convey our belief that tea blends are inherently delicious and functional; that less is enough. We pitched it as soda evolved—a healthy carbonated tea to make you feel alive, calm, or refreshed, depending on the flavor.
We thought it was brilliant yet every advisor told us, “Good concept, but the name is horrible.”
We quickly received a crash course in what being an entrepreneur is all about. We had zero experience in the CPG space and had no idea what we were getting into in terms of retail. We hit the pavement hard and did tons of demos ourselves, which was invaluable in understanding what customers were looking for. We failed a lot but more importantly, we learned through each failure. We spent money on the wrong things. We produced way too much. We paid brokers too much. We knew nothing about MOQs or TPRs or free fills or hip-pocket deals. We learned what it means to “pay to play.”
We also played the chicken-and-egg game between retailers and distributors, where one wants a commitment from the other but neither wants to commit first. Eventually, we got into Whole Foods—our first was in Danbury, CT—through their local foragers program (we bottle our products in Worcester, MA). After we got commitment from seven Whole Foods locations, a Hudson Valley-based distributor named McMahon’s Farm took a chance on us. Their owners are amazing.
When we got into Whole Foods, we thought, “We’ve made it!”
Then we got sued: A company claimed our name infringed on theirs even though we were in totally different spaces.
Wow, that took a turn. How did you go from being sued and essentially nameless to being on the shelves of every Whole Foods in New York City?
Although we perceived it as a “failure” at the time, the lawsuit was actually the biggest blessing for us. We didn’t have the money to fight it. We gathered ourselves. We polled the people in our lives—family, friends, and advisors—and landed on a new name: SOUND.
Taken as an adjective, “sound” describes just about everything we stand for, from the ingredients we source to the way we operate our business and the partners with which we associate, like Wellness in the Schools, a national nonprofit that educates low-income youth on the importance of healthy nutrition.
Ever since the aforementioned “failures,” like spending way too much money out the gate, our retail strategy has been geographically focused. Our approach is to grow mile deep, inch wide in the Northeast, focused on volume and turns and building quality relationships with our partners. Outside of Northeast retail, we’re in Erewhon Market in California, but that’s it. Rather than try to get our products everywhere, we want to support our existing accounts as much as possible, from honing our marketing approaches to making sure our velocity is healthy.
Are your sights set solely on growing steadily in retail or are you pursuing other sales channels as well?
We’re also building our top-line in the corporate channel, which currently makes up about 60% of our business. Ultimately, we need to build brand equity in retail, but pantry (corporate offices) has been an economically effective way to get SOUND in the hands of our target customers, who essentially get our products for free. And if they like it, volumes can be huge.
Retail, in the end, is where your customer will most likely be finding the product, but it’s also the most competitive and expensive channel. We’re being patient as the category grows and matures. We pioneered the sparkling tea category and we had to do a lot of educating up front. Now you can find entire cooler sets of botanically-based sparkling beverages at retailer stores, similar to what you saw with coconut water not long ago. Sparkling water is booming, as evidenced by Pepsi and Coca-Cola launching their first internal brands in years. We see this competition as a good thing!
Our original line of Sparkling Tea in glass bottles is more premium and tea-forward than others on the market. Our bestselling rose tea-cardamom-lime flavor, for example, is inspired by my Lebanese heritage and a drink my grandma used to make. To further our presence in the space, in 2019 we launched a canned line of tea-infused sparkling waters that are more flavor-forward and lighter in body. With price still being king in mainstream, we foresee the cans moving more volume and really driving our mission of getting an affordable, objectively healthy and clean beverage to all walks of life!
Anyone who meets you knows the kind of positive energy you exude. How do you produce and maintain your focus and zest for life? Can you translate your approach to your own personal wellbeing into advice for CPG entrepreneurs?
The most important advice I can give aspiring entrepreneurs revolves around mental health and your mindset. I wholeheartedly believe reality is created by our minds and the mind is the only barrier preventing anyone from achieving their dreams. I know that sounds cliché, but there is plenty of scientific research out there actually proving just how much our perception of reality actually shapes the reality we live in.
I’ve always lived my life with the simple equation: energy out equals energy in. And if you can have the mental discipline to consistently put out positive energy, the universe will work for you and return that energy. A perfect example of this is our NYC Chapter of Foster Nation, a non-profit focused on empowering foster youth. I started our local chapter two years ago with a group of incredible volunteers and it’s become a passion project, along with SOUND, that brings me so much joy and gratitude!
Obviously maintaining this positive energy consistently is a lot easier said than done, especially when you’re in the startup grind. Here are some tips that have helped me along the way:
Accept, then act. Three simple words from Eckhart Tolle, the author of one of my all-time favorite books The Power of Now.
Whether it be issues with a co-packer, losing your first run of new product due to the truckload flipping over (this actually happened to us), or any difficult situation with a family/friend, no good resolution comes from a place of non-acceptance.
When you fully accept whatever the situation at hand is, it allows you to have a much different, much less stressful perspective when trying to tackle the issue. In the long run, this will always lead you down the right path because at the end of the day, every path is the right path if looked at from the proper lens.
Think positive. This is extremely difficult in today's society. Social media, TV, news—it’s all the junk our eyes take in for our brains to process on a daily basis. Instead, I fill my mind with books that inspire or teach me new things about health and ways to improve my body and energy, as well as my approach in business and the ability to keep a positive mindset with our partners even when they make mistakes. We’re all human! Showing compassion during those times will almost guarantee that the mistake won’t be made again. Here are some favorite books that I’d recommend to anyone:
- The Untethered Soul by Michael Singer
- Becoming Supernatural by Dr. Joe Dispenza
- The Celestine Prophecy by James Redfield
- Grit by Angela Duckworth
- Tribe of Mentors by Tim Ferriss
- The Power of Habit by Charles Duhigg
- The Happiness Advantage by Shawn Achor
- The Miracle Morning by Hal Elrod
- The Prophet by Kahlil Gibran
- Tao Te Ching by Lao Tzu
You are what you eat. Considering food is energy for our bodies, wouldn’t you want to fuel it with the cleanest, most SOUND ingredients, giving you the ability to work the grueling entrepreneur schedule of 18+ hour days, 7 days a week? I don’t believe there is one “perfect” diet (I’ve gone vegan, vegetarian, pescatarian, paleo, keto, you name it!). I now like to say I’m on the “real/whole food” diet where I try to only eat food that our ancestors ate for thousands of years before the Agricultural Revolution… It’s how we evolved to become the most dominant species on Earth with the most sophisticated brains. (An incredible documentary I recommend to explain this is The Magic Pill.)
Silence and meditation. This is the most challenging tip but for me the most rewarding, especially once I got past the initial discomfort of meditating and incorporated the practice into my daily ritual. The phrase “monkey mind” has been used to describe the 1,000+ thoughts per minute of an average human. That absurd amount of noise keeps our autonomic nervous system in a sympathetic state (fight or flight), constantly producing adrenaline and spiking cortisol levels. It basically creates mind-made stress which, at a cellular level, is the root cause of all disease and death (outside of accidents).
The ability to quiet these thoughts sounds impossible—and that’s precisely because our minds want us to think that! We must instead think of the mind like a muscle and consistently train to push and improve it day after day. As a species we put a lot of emphasis on our physical bodies and exert tremendous amounts of energy to maintain them. But let’s just say, hypothetically, that reality is in fact shaped by our minds, and the only barrier to achieving your dreams is your own mind. Wouldn’t you want to put more of an emphasis on training your mind than anything else?