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Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

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by Beth Ewen
October 2005

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How Joe Heron, Ardea Beverage, tries to create a worldwide brand from soda pop

The idea: a soda to boost people’s immune systems so they wouldn’t get sick on airplanes. The company: Ardea Beverage Co. in Hopkins, selling Nutrisoda to relieve stress, boost energy, increase focus and more to spas, restaurants and high-end hotels. Joe Heron, president and CEO, says the company will hit $3 million in sales its first full year, an impressive amount for any new company but just a blip in the beverage market, he says.

“We make probably the world’s most functional soda. It’s big in Japan. This type of product is mainstream in Japan but they taste terrible.

I was running Novartis’ medical nutrition area. My wife suggested a nutrient drink for people who fly a lot. Protection from Seat 33B — that was the idea that caused me to lose my mind and start a business.

Most of the things that have happened have been through serendipity. We started to think, well, who would need drinks on a plane beyond ‘immune,’ our first one. That grew into four areas: immune, calm, focus, energize.

I woke up in the middle of the night and said, ‘We sell Nutrisoda.’ I went downstairs and Googled it, and the only thing I found was a vegetarian restaurant in San Juan. We’ve only been selling for six months. In this business your intellectual property is your brand. We spend a lot of time protecting it.

We also have cocktails that use our product. We trademark the drinks: the Facelift, the Bikinitini, the Spatini.

We make products that have enough nutrients to deliver functionality, and then we make them taste good. We don’t sell ourselves as a health product. We sell ourselves as the world’s best soda.

No. 1, taste; No. 2, functionality; No. 3, a fashionable image are where we work. People say, ‘You’re a health drink.Why are you mixing it with alcohol?’ Because our products are for enjoyment.

I’m a huge fan of Red Bull. Not the product, but what they did to make the market, because without them we wouldn’t exist. They sold a soda with lifestyle marketing.

The things that are enjoyed in a spa, in a bar, in high-end hotels, that’s how we market. So we try to create a consumption moment.

Everything’s different, compared to my old job. There’s no learning process that can teach you to be an entrepreneur. Inherently you have to be a little bit dumb [laughs]. The real difference is, you go to college, you join Bristol- Myers, you’re trying to manage risk in big companies. In a small company, you manage the opportunity, and you go after it with rose-colored glasses.

Our revenue this year will be $3 million. It’s a blip, $3 million, in this industry. But is it a blip for me? Do I notice? Shit, I notice every order.

We are where the market’s going. We sit at the confluence of four trends: health and wellness, obesity and managing weight, self-medication, and everyday luxuries. If you have a good product and you’re at this confluence, you have a shot at success.

Our first customer was Target. Target is a fabulous company to work with, if you have a product that’s leading-edge, fashion-forward and successful.

Distribution is everything in the beverage business. There’s multiple access models that you have to manage. For us to get to a supermarket chain like Target, you go through a distributor.

I come up with the nutrients. I write down the paper formulation. There’s a company in Louisville, Kentucky, that we work with. They say some [ingredients] won’t work in that concentration, some are not possible, they taste bad.

It gets made at the Gluek brewery in Cold Spring. Then it’s shipped down to MDI, Minnesota Diversified Industries. Their mission is to create employment for mentally challenged and physically challenged people. We get the orders in, and we electronically communicate to MDI.  They pack it and send to the customers.

Our new person to handle international sales started last Friday [in July]. The volume of inquiries is such that we are becoming interested in it. We haven’t shipped anything yet overseas.

Our strategy? I’d hope that we get to a sustainable level of income that’s more predictable, and that we’ve consolidated our national image. The main strategy is to pay the mortgage [laughs].

We have angel investors. In terms of where the real money is spent, it’s in product development. What’s happening to you as you drink that soda? Your immune system is being boosted tremendously. Let’s count how many things, 12 different nutrients, and every one is chosen because it boosts your immune system.

Our different markets all require different sells. Zelo, for example, the local restaurant that sells our cocktails, is about delicious cocktails that add to a dining experience. To a spa, we’re about the original spa in the can. And then to the beauty editors, the next trend in beauty is performance.

How do I develop the messages? The best practice is selling the Cub Women’s Expo for three days.

We’ve changed. We’re much more fashionable than the original idea. We’re cool, hip and healthy.

As for the impact so far, it’s not even a period on the end of a sentence about the beverage market. I think it will be an exclamation mark [laughs].

But you can’t focus on that. You just do the best you can for your customers. Customers like to work with us because we’re normal people. They also appreciate that we do approach it with intelligence.  When you lose that enjoyment you lose your soul. I’ve got the enjoyment back.

—As told to Beth Ewen

[contact]
Joe Heron
is president and CEO of Ardea Beverage Co. in Hopkins:
952.934.0096; joeheron@ardea-beverages.com; www.nutrisoda.com