Aplós - If a Fashion Brand Made a Spirit

Rose (00:01.656)
Hello everyone and welcome to the Story of a Brand podcast. This is where we spotlight some of the boldest minds shaping consumer culture. I'm Rose Hamilton, founder and CEO of Compass Rose Ventures, where we help founders scale brands that are built to last, not just go viral. Today, we're talking about breaking category codes. And I have to say, I feel like this could be a very exciting conversation because we're looking at building a modern adult beverage brand and it's not...

just competing. It's redefining the space. To me, that's the most exciting part, is we're talking about a redefinition. I'm just thrilled to welcome David Fudge, who is the co-founder and CEO of Apolos, one of the most talked about players in the non-alcoholic space right now. Welcome, David. So happy to have you here today.

David Fudge (00:50.6)
Thanks, Rose. Great to be here. Thanks for having me.

Rose (00:54.038)
Yeah, well, I've really enjoyed our conversations and you just have such a wonderful background in terms of where you came from and a vision around where you're taking this brand too, which gets me excited. And I think many of the things we've talked about are things that I would love for listeners to hear about because they're things that I think people can really learn from, whether you're starting a brand, scaling a brand or reinventing a brand that's been around for a while. I think there's just a lot of lessons that you bring that are fresh to this point of view in this conversation.

And I have to say, your samples, I'll just show a couple of them, really blew me away. And as someone who's been working on, advising, helping support, investing in health and wellness over the last 15, 20 years, I think what you're doing is really very novel. There is a sophistication and I think an intentionality to what you're doing that is very special. And I think founders who are in the midst of doing something similar in different categories could learn a lot from it.

So give us the origin story. I think there's more to it than just having a product and fixing a problem. You've got, like I said, a lot more intentionality to this origin story. So please do tell us, give us a little background.

David Fudge (02:02.268)
Yeah, sure. Happy to. So I have been in startups since 2010 and fortunate enough to work alongside a couple of really great founders and go through a couple of exits. then in the second exit, I knew I wanted to start something myself. really felt like I thrived in the startup environment and really enjoyed building something. And my dad's an entrepreneur, my brother's an entrepreneur.

And I've never been a big drinker. You know, I lived in New York City for 11 years. I'm in Miami now. but when I was in New York in my twenties and early thirties, I really enjoyed the experience of going to a great cocktail bar and sitting down and feeling like that was kind of a small affordable luxury, right? Like sitting and looking at the menu and ordering something and then making it in front of you. And there was a real kind of craft and care put into it.

the garnish and placing it in front of you, felt like a really, like I said, of like affordable luxury. And there were many occasions where I didn't really wanna have alcohol, but when I would ask for something non-alcoholic, they would offer me a sugary soda or they would offer me something that was just like a soda or something that...

Occasionally I would get like an eye roll and kind of an assumption that maybe I had a drinking problem. And so I thought there's a real opportunity here to elevate the non-alcoholic experience beyond the moniker of mocktail and really be at the same level as the world's best traditional cocktails, right? Alcoholic cocktails. so

How can we leverage the craft and heritage and history of great cocktail making to create something that's new? So that was kind of one insight was elevating the category. The other is really, you know, we drink, I believe, because we're the stress, we want to have fun. Like, no one likes a hangover, but everybody likes the way it makes you feel in the moment. And drinking has for, you know, a century plus been sort of the default way we connect socially and unwind.

David Fudge (04:23.202)
And I think this sort of wellness movement that's taken over most major categories for the last 20 years or so hadn't really touched the beverage alcohol space. And so I felt like there was a real opportunity to create a better way to unwind while giving people still everything they loved about the ritual drinking and sort of the depth and complexity and sophistication of a great cocktail. And so that curiosity led me to

talking to as many bartenders and people in the Bevoutke industry as I could. Over the course of a couple of years, I ended up meeting someone called a woman named Lynette Marrero, who is a very well-respected and well-regarded mixologist globally. She did the master class for mixologist. She's a James Beard honoree. And my co-founder and I, who we met at a previous startup,

we really connected with her. I knew the product had to be paramount and we don't come from beverage, right? And so I knew we had to bring people in who really knew and understood what they were doing there. And so that really set us on a path to create really something that we felt was not imitating alcohol, but innovating in the space, sort of taking a format and creating a product that felt familiar, but new at the same time.

And so we launched in December, 2020, kind of in the middle of COVID with our, yeah, with our first spirit. And it's been a wild ride ever since. And it's funny, I think the momentum obviously has really picked up the category has really grown. There's new entrants every day, but, people say to me, well, your timing is great, right? But it's, this is something that we've been working on for about six and a half years now. And so.

Rose (05:50.414)
I'm going to say.

David Fudge (06:14.93)
you know, we feel like we're starting to our stride. But that's kind of where it originally came from.

Rose (06:22.798)
It's an amazing story. And I think it's so truly unique that you're coming out of a non-beverage space and inventing and disrupting. And I want to talk about some of those category codes here in a second. But there's also something important in what you're saying is that you're creating advocates. And the work that we do at Compass Rose is always connecting brand truth to the real cultural relevance. And so when you're describing, it's not just about your timing, but it's

it's that culturally it became very relevant to reestablish and think about how a cocktail, how a spirit fits into an experience. And you're creating truly advocates with what you're doing. And it's a different way of thinking. And something that I'd love to go a little deeper into is the term category codes. You and I had a really fascinating conversation about this, which I think is just a really good umbrella. So I usually like to say we shouldn't disrupt in categories where we don't know anything about them.

But I think that would be disputed with what you've done here, because you actually have been very intentional, going back to that word, around which codes are we breaking and which ones are we keeping. And I think we like to call that a discipline, let's just say discipline disruption. Discipline disruption, I think, is the best way to describe it. Where founders often want to reinvent everything. But in my viewpoint, the smartest ones and the ones who are successful and really grow, like you,

know where to innovate and where to anchor. And those are two very different things, innovation versus anchoring. And that's the kind of strategic muscle that I think is really key and cornerstone to all emerging growth brands today because creative courage plus marketing wisdom equals staying power. So I'd love to know your reaction on how you thought about which codes to break.

How do you learn the codes, then which codes to break and which ones to keep? Because I think that's a big part of how you're strategically evolving and creating some great brand advocates.

David Fudge (08:21.842)
Yeah, sure. think with any startup, mean, six plus years ago when I started on this journey, again, I didn't come from beverage. And so I knew that it was in many ways an advantage to not come from beverage because I'm not sort of encumbered by being set in my ways in certain ways of operating, right? I can think of new and innovative ways to do things. But at the same time,

I knew I needed to understand the rules to the game. And so that was kind of across the category, right? And so I have for years intentionally sought out experts in the space to really understand how the industry works. And that's kind of across a lot of areas of the business. And so as I mentioned, first it was bartenders, right? I always viewed bartenders as kind of the gatekeepers of the industry because they're on the front line, so to speak, and they're the ones that know what

consumers are asking for, what they're enjoying, what they like, what they don't like. And so with the product, was always trying to impress the bartenders first, because I knew if I was impressing them and they like working with the product, then it would trickle down to the consumer. And so that led me to meeting Lynette and really trying to understand what are the building blocks of a great cocktail from a flavor and sort of a texture, sort of what are the elements of a great liquid?

Right. And I was meeting these people from the dev out industry, honestly, just some like cold emailing them, reaching out on LinkedIn, literally reaching out to everyone I knew in my network and asking if they knew anyone. And I got introduced to a lot of really smart people that have been really successful in this space. a couple of them are now on our board. One is Matt Brun, who was at Diageo for many years, and then he was the president of Pabst Brewing and,

He, I loved Matt with the first time I met him. He was like, I don't understand this not out thing. I think it's garbage. Like why would anyone want this? And I sort of told him our vision with that blows. And he felt that the functional piece was really crucial and, differentiated at the time. Obviously now it's much more prevalent and popular. but you know, it meeting people like Matt meeting people like Chalene Patel from.

David Fudge (10:44.658)
Diageo as well and Andy Fennel the former global CMO and Helen Michaels, you know, and they're investors in our brand now and I meet with them regularly and I actually sold the word codes from Helen and Andy and Shalene who very early on intently said to me like you need to understand the codes across the industry and that comes and that's when it comes to the liquid the packaging the marketing approach the distribution strategy

and understand the rules of the game and understand where you're going to break those codes and where you're going to adhere to them. Because any business when you're a brand, when you're disrupting an industry, you know, you have to do a certain level of education. And if you're starting from scratch, it's kind of a losing battle, right? Like you have to tell the consumer everything, like what kind of product business, how do I use it? Like when, how does it fit my life? Like, how do I mix this?

If you're starting from scratch and trying to reinvent everything, it's pretty impossible. And so, you know, when it came to the packaging and the liquid, we, for example, knew we designed our bottle so it looked like a spirit bottle. You know, the first bottle that I actually developed and designed before I had talked to some of these advisors, when I brought them in, they said, that kind of maybe looks like a beauty or a shampoo bottle.

Like do consumers understand it's a spirit? So we ended up developing a custom bottle. And then, you know, the format of the product, like our spirits, you drink just like you would any other spirit. He mixed neat on the rocks or mixed in an infinite number of cocktails and it's roughly a shot size. Right. And so we didn't want to reinvent that. And then also, you know, there's no ethanol in our product. And so stability and shelf life is important.

And I really considered customer experience, not only for the end customer, but for bartenders. And so I knew that it needed to be shelf stable so that you could put it on your bar next to a vodka and not have to worry about it going bad in a week. Right. And so not only is that important for the consumer, but it's important at on-premise accounts because you want the back bar presence to get that sort of branding exposure. Right. And so.

David Fudge (13:06.031)
All of these elements trickling down even into our distribution strategy where we again need to really understand the codes of the category and the distribution model. But we are breaking that distribution model in some ways. And that's an advantage that we have over beverage alcohol, which has to work in the three tier system. And again, even with like launching Indeed a C like alcohol brands cancel direct to consumers. and so.

You know, I have well over a hundred thousand customer profiles and I understand, you know, when they bought what they bought, like what they like, what they didn't like, I have thousands of pieces of feedback and we leverage that to really inform our growth strategy, our innovation strategy, our distribution strategy, our product innovation strategy. And so all of these things again, are like going into any industry, I think.

It's an advantage to come at it with fresh eyes, but you also have to respect and understand the ecosystem as it exists because you also need a lot of those stakeholders to buy into what you're doing, right? The bar directors at on-premise accounts, the buyers at retailers. And if you're completely dismissing every single code of your industry, you know, it's going to be hard to win those people over.

so, you know, there's a lot of ways you could approach this idea of codes, but we've spent years and years really trying to understand the codes across the business and being really intentional. We're going to stick with this code, but we're going to break this one and really understanding why we're breaking it.

Rose (14:53.368)
Well, and one of the codes that's universal and is timeless, it doesn't matter if we're talking about TikTok or some new social media platform, is listening to the customer. And what I love is your very clear segmentation of, even though the end user is a consumer, the bartender is your gateway in. And if you can get the bartender, they're the ones that are like, they're your sales force at the end of the day, and they get the ball rolling as your advocate.

David Fudge (15:03.559)
Yeah.

David Fudge (15:11.772)
Yeah.

Rose (15:18.988)
And then from there, you're going to reach the consumer. And I think that that is just super smart. And I the other approach I love in your breaking of codes is the distribution. That's very non-traditional. I love it. You're building an infrastructure that doesn't just support a brand. The on-premise and off-premise amplifies it. And so I think the next logical question for me is I'd love to hear more about your go-to-market strategy because I think you're doing some unique things on that front too. And...

I should just mention to listeners, if anybody checks out David's background, he has quite a bit of marketing in his background. And so I'm sure that that experience also helps you offset when you start to think about go-to-market strategy as you're in a new category that you are breaking codes in, so to speak.

David Fudge (16:01.98)
Yeah, yeah. Well, from a marketing perspective, we actually invested quite a bit, not only in the product and the liquid initially, but the brand foundation. Because I really strongly believe that you need to really understand who you are before you put your brand in front of consumers. Because if you don't have, know, and I think of brands like People, right? Like, they're multi-dimensional and multi-passive, right? The way you dress, the way you look, the tone of your voice.

the cadence of your voice, how you present yourself, where you present yourself is all really important. So we invested a lot in that early on. And then how we position the brand from a marketing perspective to the consumer. And so if you look at traditional spirits, just visual imagery and videos and even the kind of marketing they do, we broke a lot of those codes intentionally because

you know, we wanted to create something that a brand that felt like it was a brand that makes you dream that kind of shows more than tells, that really had an emotional core to it. that could connect with consumers emotionally. at the same time, aside from kind of that brand foundation, you know, the, from a go to market strategy standpoint, my co-founder and I come from direct to consumer.

And so with limited funds initially and with COVID, we were kind of forced to go into direct to consumer to start. And we viewed our job in the first year was to really understand the core unit and economics of the business in that channel and get customer feedback so that we could refine the product and the experience. And so we did that and direct to consumer is great for that because you can understand quickly.

cost of acquisition, your repeat rate, your average order value. Like does this business fundamentally work? And interestingly, most people will tell you that beverage doesn't work in e-commerce because we launched in the, the multi-serve spirit format. We could be lower volume, higher margin, right? When you're selling cans online, it's a little trickier. You know, you.

David Fudge (18:18.814)
It's the liquid is heavy. It's hard to make the unit economics work. Some will tell you it's possible. We're doing it. But then in distribution, really in 2023, we started working with a traditional beverage alcoholic distributor. And we ended the year really only in a couple of markets, one distributor. And really last year for us was about opening up distribution. And so we...

We launched there with two distributors. ended the year with six in nationwide distribution, but we're not just using beverage alcohol distributors. We're using food distributors. We're using a produce distributor in one market. And, you know, it allows us to learn things really quickly and see kind of what works. And then on the on-premise side, we're really focused on high-end bars, restaurants, hotels that are going to build our brands and be points of discovery.

Right? Anyone in beverage alcohol will tell you, you build the brand in the on-prem, you sell it in the off-prem. And so we've been really intentional with the brands that we partner with. know, Michelin star restaurants, really high-end bars and restaurants and hotels. We're nationwide at Soho House. We're in the Four Seasons. We're in the Mandarin Oriental. We're in addition hotels. You know, and we're in some of the best bars and restaurants.

in the country and sort of starting at the high end there and points of discovery and places that really have a focus on their craft cocktail programs and complimenting that with the right retail placement. And we've been really kind of measured and focused on our expansion into chain retail specifically, because that is a channel that is.

You know, a whole ball of wax in itself in terms of really understanding how to drive a healthy velocity that is scalable. Right. Yeah. So, I mean, I could talk about this for days. But you know, our go-to-market strategy, it's evolved over time. Right. I think that we've always been convicted in our vision of what we're building and we've had to be malleable in our strategy based on what we learn. And so.

David Fudge (20:40.478)
You know, that's continuing to evolve, but we're at a point now where we opened up distribution. have a robust product assortment that serves many consumer cohorts and many occasions. And we're seeing, you know, exponential growth in 2025.

Rose (20:58.572)
That's amazing. One thing I want to double click on that you said that was really interesting to me is about, I like brands that make you dream. And this is such, it's a rare statement, I think, in today's world. It's where everything is optimized and over explained in today's world. But the dreaming aspect and the aspirational part of it, inspiration in the brand, you were so intentional to take your time.

David Fudge (21:08.423)
Yeah.

Rose (21:25.868)
and didn't race through it. So can you share a little bit more about what inspired that dreamlike aspect? And one of the areas I'd love to make sure you talk about is fashion. And how do you think about fashion? Because I think you have some unique points of view there.

David Fudge (21:38.685)
Yeah.

David Fudge (21:42.908)
Yeah, yeah. mean, so, aplers, aplos is a Greek word. It means simple. And in many ways, I think aplos is a manifestation of my sort of personal journey, right? And we always wanted aplos at its core to be about a celebration of the simple things in life, which we think are more kind of connection with people, experiences, doing things with their hands. You know, it...

It's derived from a Greek word in many ways because I love kind of the beauty and simplicity of Greek life and sort of the heavy importance of family, even the way they eat their food is like olive oil and salt. It's very simple. The architecture is really simple. And so, you my background is in fashion and lifestyle. And I love kind of the aspiration of a lot of those brands and

Rose (22:24.494)
So close.

David Fudge (22:40.018)
building a world that you want to be a part of, right? And so we thought about that approach with Applos. We often think of the brand as if a fashion brand made a spear, what would it look like? Right? And I think it's like a unique lens that we look through with anything that we're doing, right? And so at the same time, like fashion are big pillars for our brands. We work with

Rose (22:53.1)
I love that. I just, that's great.

David Fudge (23:09.17)
you know, really interesting artists to create things for the brand. We just did an announcement for Total Wine and we work with an artist that makes things out of paper with his hands and miniature form. And he made like a little miniature like statue of Aplo's product with like a Total Wine sign on top. have a really interesting campaign and we're coming out with for summer where we're working with an artist. We're working on a product for

down the line that I'm really excited about that's gonna have kind of more of an art design angle. And so, you know, I think that it's always been something that I've personally gravitated towards. I think as my business coach would say, I'm a very aesthetically driven person. I think that your environment really does for me at least affect my mood.

And so I want to surround myself with things that enhance that and help you be the best version of myself. And so, you know, I think. Applos and what we're trying to build with Applos is and any entrepreneur we're trying to build the kind of world we want to live in. Right. And we're trying to give people more choice so that they don't feel the pressure that they have to drink alcohol if they're in a socialist occasion or they go to a bar or they want it.

have a drink at the end of the day because they're stressed and they want to unwind. And, you know, we think giving people an alternative and making their life a little more beautiful is a positive thing to do and to put into the world. so that's kind of how I think about it from a very high level.

Rose (24:53.58)
Yeah, and I think as I reflect on our work and our practice on a daily basis, there's so much that we're doing of bringing a brand compass framework to the stage for a lot of the brands we work on, which is something you've clearly done. And how I define that is it's really about bringing, I will call it like a system along with inspiration and intuition. And that's what I'm hearing you be a great example of, which is one of the reasons why I wanted to get you on the show, because I think you are someone who's example.

Your business, your brand you're building is an example of that. You found the systems to scale, but you're also finding that emotional resonance that is connecting with consumers and it's connecting deeply into their lives. So it's not just a product, but it's a lifestyle. And then you're partnering up with the people who will help you distribute that product in the best way to reach your customer and your audience. know, something else inherent in what you're describing is you need to be bold.

David Fudge (25:46.014)
Yeah.

Rose (25:50.338)
So another topic I'd love to just take a moment and chat on is testing, learning, and foundership is how I would describe it. So we know you've made some bold choices. You know they're clearly working out. So what's something you've tried maybe that hasn't worked that you've had to pivot on? Is there anything you can share with us?

David Fudge (26:11.442)
Hmm, so many things. Let me think if I could think of a specific example. Yeah. Yeah. something we've tried that's not necessarily worked. mean, I think we've tried some gifting initiatives for holiday that we felt like didn't really land. And I think that, part of that is I think beverage isn't the first category people think of when they think of holiday gifting. you know, I think there is an element of.

You know, we've done some things where we position as like, Applos is a great host gift, which I think is a better angle to that, right? Instead of taking, when you go over to a friend's place for a dinner party or, you know, an event, like you often bring a bottle of wine and we think a better proxy for that rather than specifically like holiday gifting is like bring a bottle of Applos instead. So that's maybe one example. I mean, we've tried some channel tests like on

connected TV that I think we were, you know, not big enough for, we didn't necessarily have the right creative for. Like I've definitely learned many times that it's, you can't really retroactively fit creative that you shot for something else into a meat, into another medium. I actually learned this when I was at Bonobo. like the first time we did a lifestyle shoot. Our founder wanted to do a catalog with it and I,

we ended up doing it and it was quite successful, but I realized how difficult it is. when you want to create a catalog, you need to shoot into a catalog. Similarly for social media, like what works on Instagram is not necessarily going to work on TikTok and what works on your website isn't necessarily going to work on Instagram either. Right. And so, you know, I think, I think that I always try and frame these things with our team is like, you know, you,

You need, some people call it failure. I actually stop my team always and say it's not failure, it's a plot twist. And what can we learn from this? Right. And like you don't, learn so much more from quote unquote failure than you do from success. And so I was trying to frame it as like, what is the opportunity here and what did we learn from this? Um, but back to your first point of like making bold decisions when it comes to the brand.

David Fudge (28:37.66)
You know, I think when you are building a brand and you're competing on desirability in many ways, right? Like we're not competing on price necessarily or utility or convenience. we're competing in desirability in many ways. you know, you have to put a stake in the ground. If, if everyone likes you, no one loves you. You can't be all things to all people, right? Especially in this type of media environment where.

It's monoculture doesn't really exist as much anymore. does kind of here and there, but they're niche communities and you need to figure out how to reach those niche communities. and so you really have to make bold decisions and have a point of view. Cause when you're trying to please everyone, it kind of falls flat. I actually love it when I see feedback that's very viscerally negative on our product.

Rose (29:09.613)
Mm-hmm.

David Fudge (29:32.39)
I think we're doing something right if we're doing that. We get obviously a ton of positive feedback, but if it's just kind of middle of the road, like, yeah, this is good. Like, you know, they're not going to buy your product again, right? You need people that like love, love, love you, which means that there are going to be people who really, really don't like you and that's okay.

Rose (29:53.486)
I think I just, love that. And you know, one, one thing that I think about that's like almost a mantra for me is that flexibility is really the mark, I think of a successful founder, a successful leader is that flexibility and not being so rigid. And I think you and I talked about, you have a phrase that you use. There's one that I use and it's very similar, which is vision is non-negotiable, but strategy has to be iterative. And if it's not, you're die.

So without vision, if you don't have the vision, you're going to be executing against who knows what and you're going to get lost. And then if you are executing against a vision, but you're staying too rigid when times change, COVID's a perfect example, it doesn't mean your vision goes away. It just means how you support that vision might need to evolve and change. And I think if I recall correctly, you have something similar to that in terms of how you think about things.

David Fudge (30:29.725)
Yeah.

David Fudge (30:52.542)
For sure. I mean, I say you have to be convicted in the vision, but malleable in your strategy based on what you learn. And people always ask me about competitors and who I'm afraid of. like, you know, it's really not a PR answer when I say I'm not afraid of anyone because we have a strong vision. It's like, we're running a marathon here, right? You don't run a marathon looking to your side or looking behind you.

Rose (30:58.904)
Love that.

David Fudge (31:19.548)
Right. And you can tell the brands who are like just seeing, this brand did this thing. Maybe we should do the same thing as well. And then like a few months later, they, they come out with something similar now, because we are in a similar category. There are is serendipity and like some, I don't know if you would call it that, but like, you know, we have a Negroni, like we have a point of view on the Negroni, but other brands have that as well. But it's through our vision and point of view that we develop that. And,

And so, you know, I think that it's, it's can be easy to spot the brands who don't have a clear vision, who are just chasing other brands. And it's, you know, if you're always making decisions through the filter of what someone else is doing, it's like, it's, it's kind of a recipe for disaster. It's like these brands that, you know, like when Samsung does brands that are all about like

Rose (32:06.668)
Gosh.

David Fudge (32:15.4)
kind of mocking Apple, you're kind of putting yourself in the second position there. Same with Pepsi and Coke, right? Like Apple's never doing an advertisement that's referencing Samsung. It's vice versa, right? So, you know, I think it's really having that conviction in your vision and executing towards that versus, you know, constantly being distracted by what other people are doing and letting that...

cloud your vision because if you don't have strong conviction, that will happen.

Rose (32:52.982)
Yeah. Well, and I like what you're saying that if you... can't tell you how many times I've seen businesses that go, brands that go after something they saw the competition do and say, we got to go chase that and be just like that. And then all the investment goes, and then all the effort and focus goes to how do we take what they're doing and do it even better as opposed to saying, but who's our customer? What matters to them?

And just because this other brand is attracting attention over here with this approach doesn't mean we need to follow them at all. We actually need to create our own differentiated strategy, our own differentiated way of breaking through. And I think what is also unique in some of the things that you've shared with me is that, yes, you're not a non-alcoholic beverage. Okay. That doesn't mean everything you do has to mimic the alcoholic beverage space because you actually have white space.

David Fudge (33:23.58)
Yeah.

Rose (33:44.716)
Because you're not going to follow what's happening there. You're creating your own, which goes back to the code breaking, so to speak, and choosing which codes do you want to category codes do you want to focus on. And you're almost finding, I'd say, like you are a new category. It's not to say that non-alcoholic beverage isn't out there, but the way you're marrying it, I think, with spirits and you're marrying it with a lifestyle makes it far more attractive and higher lifetime value.

I think there's something else you said earlier in our conversation that I just want to circle back to, which is it's easy in CPG if you go retail first to say, my marketing expense, can't really, it's top of the funnel. I can't measure it. I don't know. So let's just whack marketing dollars if times are tough and we need to get to more profitability, we need more margin. But what I find fascinating is if you

entered into the world as a brand that's direct to consumer, your KPIs and your metrics are going to look like cost per acquisition, lifetime value, and the relationship between the two. You also talked about unit economics. I can't tell you how many businesses I've worked with that don't really know their unit economics. And one of the first things we tend to do is say, let's figure out what's your lifetime value, what's your cost per acquisition, what do those numbers actually need to be?

to fit the formula of how this is a scalable business versus turning a blind eye to the marketing spend and saying, we'll just measure it based on return on ad spend, which masks so much of what you get when you look underneath the hood on a direct to consumer business. It's very different than a retail business. And I don't know what your, I'd love to hear your experience on this, but what I've noticed is those that start DTC first and then expand into retail tend to have a better time.

with scaling because DTC is more complex, frankly, and retail has a lot of capital investment involvement in it, but it's hard to know how you're actually driving the volume there. So at least if you have your DTC numbers and you have your pool, as you described of 300,000, however many customer profiles you have, like you know this customer, you own that relationship versus if you're working in the retail space, your real relationship is with the buyer.

Rose (36:05.036)
and you hope you have a good relationship and they'll sponsor you, they'll support you with extra velocity promotions, but it's not direct to the consumer. So I'd love to know your point of view of when you think about retail and direct to consumer. If you're a new brand coming to market, and again, it might depend on what category you're in, do you think it's better to start DTC versus retail? And what's your point of view on that?

David Fudge (36:28.444)
think it really depends on the category and the kind of your vision and the value proposition and frankly your expertise, right? Like I think I always encourage people to lean into their superpowers and supplement the people they bring in around them with people who have other superpowers, right? And so it just happened to be a channel that we were more comfortable with, but also was really

applicable for the time in the middle of COVID, right? When people were, it accelerated trends towards buying things through e-commerce and mobile. And so it, so many things work in our advantage to our advantage. And so many times in startups, a lot of it is about timing, right? You have to have a great idea, but it is about timing. Retail is a whole different ball of wax. And I have learned so much about it.

over time. mean, I still believe going back to your earlier point, it is really staying connected to your customer. And I think you can do this even in retail, like not being too proud, even at the founder level to go and do tastings in a retail store and talk to consumers and really understand what do they like? What do they not like? listening.

Rose (37:42.766)
Yes.

David Fudge (37:49.79)
Not leading them too much. Like I love to hear what they say first when they try it without me even asking anything. And then people who love us, like you buy from us twice or more, you actually get an email where you can book time to speak with me. And I love talking to boomers because I love asking them like, why, why do you like Apple? It's can be really open ended because then it helps.

Rose (38:06.88)
yet.

David Fudge (38:15.452)
Based on their answer, I really understand how they frame our brand and our product in their mind. Like if they go to flavor first, if they tell me about they're trying to lose weight or something like that, it really gives me a window into what to tip them over to buy. But in relation to retail specifically, I find it much more complex, I think, because I'm a lot more comfortable in D2C.

Right. And there are more tools coming out every day that allow you to have more. The great thing with digital and DTC is attribution is can be cleaner. No one has really solved attribution in a perfect way. Like especially multi-touch has for attribution, but you have a lot more data at your disposal than you do at retail. Right. It's hard to know in retail, like where did the person who came in, how did they hear about you? Maybe they just saw you on shelf when they came in. Maybe they tried you at a tasting.

Rose (38:56.397)
now.

David Fudge (39:13.34)
maybe they saw an ad on Instagram or signed up your email list and then they came in because they found out you're a total whine now. It really kind of is harder to measure. And you know, the typical tools in retail are merchandising, pricing, promotion, you know, the kind of key things and packaging, right? Like how do you look on the shelf? And so, you know,

It's interesting. I talked to entrepreneurs who really good at DTC and they build really beautiful brands, but then you put their product on a shelf and the packaging doesn't really work for a retail shelf. Whereas it works beautifully on Instagram or it works beautifully on a product page on your website. But like you're not communicating the core value proposition or the thing that's going to make someone pick it up off the shelf and look at it on the front of pack. So it's, it's a different.

muscle and skill to learn retail and really what works there than it is e-commerce. And they're just so different. And frankly, it's ever evolving. Like this is also why I think kind of copying marketing strategies or campaigns or other brands is kind of a futile exercise because, you know, what works yesterday won't work tomorrow. we, we,

operate and live in a culture that moves so quickly. you know, consumers are changing so quickly as well and consumer behavior. And there are some constants, but you have to be constantly evolving. you know, I don't, I know a lot about retail now and we're learning a lot now. And I always view my job as an entrepreneur who's decided to take outside investment. So it,

Is it fiduciary for our investors and wants to show them a good return? My job is to build value in the business for a successful outcome of some sort, whether that is, you know, for some brands, it's going public for some, it's a majority buyout or an acquisition. And I view my job as almost building a playbook, right? Whereas I understand what are the core channels in.

David Fudge (41:32.894)
for our business and what are the growth drivers in those channels? And how do I create a repeatable model? So I know we work really well in this specific channel that speaks to these kinds of consumers and this is why, and this is how we make the channel successful. And these are the unit economics for this channel. So the unit economics are different for a Michelin star restaurant than they are for a bar, than they are for a DTC, than they are for Amazon, than they are for a chain.

in the natural grocery space versus a chain in the big box space versus a chain and beverage alcohol. They're all different. And so, you know, it's, there's, there's no silver bullet and the retail again, I find to be more complicated because there's more stakeholders involved. There's distributors, there's, you know, the charge backs with distributors. There's the buyers at the retailers. There is even

for the tastings like the managers at the store level. And so, you it's just, you have to serve a lot more stakeholders, I think, when you get in traditional distribution than you do in DSE.

Rose (42:47.502)
think that's really right. It's true. The channels, they do matter and each of them is unique. You can't just cookie cutter one thing and put it in another and expect it to work and all. I think there's something else that you mentioned in there that I'd love to click on, double click on, which is around investment strategies. So there's quite a crop of, interesting to me, influencers who are now investing in businesses and then they are...

helping to grow the businesses. And so their wealth is coming out of having invested in the direct to consumer business. And they're helping on TikTok, influence everywhere with it, which is an interesting approach. It's interesting. And I remember hearing you say you've got a mixologist. You've got some really smart people, both on your investment side, as well as on the board side. And I know much of your success has been how well you've built a community around you.

with getting to know this category. So how do you think about investors? How do you think about building boards? And granted, every category is different, but are there any best practices as you've been thinking about how you're building this business and what's been important to you?

David Fudge (44:00.83)
Yeah. Yeah. Well, my approach, I think the benefit I have of working alongside of a couple of other founders going through this earlier in their careers and in their lives is kind of being able to see where they, you know, maybe made mistakes or what, what they would have done differently. They would tell you themselves. And so my approach as a leader as, and as an entrepreneur has always been that, you know, the

the best leaders don't know all the answers. The best leaders know the right questions to ask and they surround themselves with people that are much smarter than them in areas that aren't their superpower. And so it's really having a strong understanding of what you're very good at and what you're not good at and being open, right? And so, you know, I think knowing is the enemy of growth, right? And so you want us to really open to

What is, you know, what are you learning? And so I've made a conscious effort to try and give ourselves as many unfair advantages as possible. And for me, that means bringing people in that have been incredibly successful in beverage alcohol and in building businesses broadly, have many entrepreneurs on our cap table that, you know, are informal advisors and

help me out, you know, and bringing people onto the board that we think really will add a valuable perspective and really are aligned with our vision and really understand our ultimate goal for the business. Right. And so, you know, our board is Matt, who's an investor in our brand as well. And I met a few years ago and then it's also Vanessa K who was at LBMH for many years. was the

general manager and CMO of their US business. And so, you know, really successful executives from the incumbents in our category that really understand how they operate internally and what they value and the kind of businesses that they know have run. You know, and on the investor side as well, just on the advisor side, it's people like Andy and Alan and Shalane from Yaujiao who

David Fudge (46:27.058)
You know, Andy was the global CMO of Diageo and really understood, you know, the fundamentals of their kind of full funnel marketing strategy, go to market strategy and distribution strategy. so, you know, and then on, knew the liquid had to be great. so Lynette is our liquid creative director. And then we have a technical formulator who is, I think the best in the world, obviously I'm biased, but

you know, comes from beverage alcohol and has created some of the most iconic liquids in the world, both in, in alcohol and non-alcoholic, non-alcoholic. So, you know, I've tried to build a dream team around the liquid development and then tried to build an advisory board around me and my co-founder, Emily, who, you know, can give us perspective and also, you know,

understanding too when you don't have to take every piece of advice. I think this is something I learned also as an entrepreneur. Everyone has an opinion, but if you don't have a strong point of view and a conviction in your vision, then you'll also drive yourself crazy because you'll be like, this person says we should do this. I'm to go over here and then I'm to go over here and then I'm going to go over here. You can't do that either. And so you have to have a level of confidence in your vision.

Rose (47:51.318)
I think that that is exactly right. And on the topic of how moving into the founder space, co-founder space, entrepreneurial space, I know you've come out of startups. So how did you make that transition so eloquently? And what did you learn about yourself going through that?

David Fudge (48:13.254)
Yeah. Well, I mean, I moved into startups when I was 28. And I think in hindsight, the story is always more linear and feels more perfectly packaged. And the reality is in the moment, it's kind of messy, right? Like, I mean, I moved to New York City after college. I was always much more interested in the work than I was actually the school part. So every summer in college, I had an internship in New York City.

Rose (48:26.224)
Yes.

David Fudge (48:38.738)
I went to school in Auburn. grew up in South Georgia on an Angus farm, like in the middle of nowhere. And so I was in New York every summer interning, networking. I moved to New York without a job and I literally registered at three temp agencies and was filling in for assistance to Tiffany and Cartier for the first three months I was there. Then I ended up getting a job at MTV, which I had interned at.

I'm on the marketing team, which was amazing for me because I got the rigor of a big corporation and I worked in a department that worked with production and consumer marketing and talent. And I got to work with all of these different departments. And then, you know, it's part of it's my personality. I'm like a relentlessly growth minded person for good or bad. And I always am super antsy, like I have to be doing something. And so I was like,

I want to learn a different thing. So I went to the magazine world. went to Hearst and worked at Esquire. And then I met someone at Esquire that worked at Gilt Group. We did a partnership with them when we were at Hearst. And then he ended up going to Bonobos. And, you know, I was eager to move to a brand because I figured out it was better to be the client than to have clients. And I also wanted to, I also wanted to

and have the experience of focusing on one brand and focusing on building one brand. so my contact that I had met at Gilt went to Bonobos, he brought me over, met Andy. Literally the day I went in, they offered me a job and I just took a chance and said, yes. I mean, I think it's like, like I think.

I just read in a garden's memoir, be ready when luck happens. It's like, I think I was just a yes person. I got, I was a little bit lucky and I was like, yes, I'm ready for this. Let's do it. And I was employed 38 at Bonobos and it grew like a rocket ship while we're there to like, I mean, I think it grew six, 700 % from when I started to when I left and then sold to Walmart for over 300 million. And I just.

David Fudge (50:56.062)
understood innately when I went there, the pace at which startups move and also the, if you are an entrepreneurial person, a growth minded person, putting someone like that in an environment like that for the first time, it's like an unlock. it's like, I remember being like, I'm never going to a big corporation again, because I can have an idea.

executed myself and immediately see an impact. And because it was D to C, you could literally see the sales. And so, you know, I remember I had this idea when we started early to do this April Fool's joke like thing, which at the time wasn't really a thing for brands. Now it is every year. And we created this idea called the girlfriend gene where I was like, would it be fine? Cause there's a boyfriend gene for girls. If we did like a girlfriend gene for boys, it's a spoof. then like,

created a mock product page and made people think we were really selling it and actually had them go through the funnel of like buying it. And it got a lot of press and like that was one thing I did early on where I was like, this was really fun. Also, it drove a ton of traffic and revenue for the brand. And so that was kind of my entry into startups. And then it was just, I've always had this mindset of like,

I want to do something else. want to learn something else. Right. And when I left Bonobos, a lot of people were really interested in bringing me into other menswear brands. And it was not super interesting to me because they just wanted me to do what I did at Bonobos. And I was like, that's not fun for me. Right. Like I'm not learning anything. And so I ended up going to a travel startup and then we sold that business.

And I was like, I knew if I wanted to start something myself and I had kind of been talking to Emily who I met at Bonobos on and off about ideas. I knew because working alongside other founders, how grueling it was, at least I thought I knew. then, so I knew that I had to be personally connected to the problem I was trying to solve. Otherwise I would get bored and like not care and like be over it.

David Fudge (53:09.058)
and I knew it was going to be kind of a rocky ride. Then I learned like even if you're literally sitting next to the founder doing fundraising until you're accountable yourself and you're in the seat, you really don't know.

Rose (53:22.868)
really true.

David Fudge (53:24.284)
I'm not sure I would do this again in hindsight if I knew what I knew now. Actually, I probably would. But again, like I'm so passionate about what we're building with Aplos and we're doing so many new things every day and I'm learning so much every day that it's so fun for me. And like, I get to work with super smart people and that's so rewarding to have a team that is so diverse and supported in terms of background and experience.

And so, you know, this is fun for me, but I imagine at some point, I obviously am very convicted that we're gonna have a really successful outcome for Applos. And my vision is that like, I'll be traveling to Tokyo at some point and I'll go in a bar and there'll be Applos right there behind the bar. And it will be, you know, a staple across the world that if you have a bar, it's like Grey Goose, you'll carry Applos.

Like that is our vision. And I have ultimate conviction that that will happen. And if at some point I won't be doing Aplos, then I'm pretty sure people will be like, hey, do something else in beverage. And I probably will be like, no, I'm going to do something else.

Rose (54:41.518)
Well, you just answered one of my questions that I wanted to make sure I had before we end, which is, what is the bar of the future going to look like? What's your vision?

David Fudge (54:49.468)
Yeah, yeah. I mean, I have my vision, right? Whereas I think, you know, the cultural grip that alcohol has had on us for so long as that kind of default way to unwind. And I remember in my 20s, like having girlfriends, it would be like, if somebody didn't drink, they would date them, right? And I think that that...

there was kind of a shame if you didn't drink and that's really loosened a lot in the past few years and it's gonna continue to loosen. You know, I think there could be a point at some point where alcohol has kind of looked down on as cigarettes are now. I don't know that it'll be that extreme, but I think in 10 years you're gonna go into a bar and maybe 30 % of the options will be not out.

Right? It's about giving people options and making them feel included in the experience. Like they can treat themselves and they can socialize. That behavior isn't going away. Like when we're with people, we like to have a delicious treat beverage. And we like to, at the end of the day, when it's stressful, we like, I need a drink. Right? Like, and, maybe you don't want alcohol cause you're taking like this morning I took a Pilates class. Like, you know, I

didn't want to be hung over. don't drink a ton. I drink a little bit still, but I think that bar of the future is just more inclusive, more choices, and a range of options that still provide that function, right, that we crave. And sort of the core reason we drink in the first place, right, is to connect, to unwind, to socialize.

Rose (56:34.602)
I I love it. think it's so spot on. And I think before we wrap up, any words of wisdom that you would give people who are building and scaling their businesses like you are, things that they might not know that you would highly suggest that they're aware of.

David Fudge (56:54.386)
Yeah. Well, that's a broad question, but I think I talked to a lot of people who say to me, like, I want to start something, but I'm not sure where to start. And my, my point of view is always, I always try and give like my experience rather than telling people direct advice, like here, you should do this. But for me, it was just about having a conversation with someone.

and following my curiosity. And that conversation led to two other conversations, which led to six other conversations. I think don't trip yourself up in overthinking it, right? I can be an over thinker. Just start and start following your curiosity. And if it's the right thing, will lead you to building something.

it does take a certain type of personality, I think, and type of person that can thrive and a curious growth minded person, a resilient person. you know, cause you are exposing yourself in many ways to, to criticism and you know, it's a vulnerable thing to like start a business in many ways. but I always say just, just.

Rose (57:53.204)
curious.

David Fudge (58:15.442)
Don't overthink it and start somewhere and have a conversation, reach out to someone. The worst someone can say is no. I was cold emailing people on LinkedIn and most people didn't give back to me, but a few people did. And you're gonna find the people who will champion you and will support you. that it only takes...

Rose (58:39.98)
It only takes a few. You don't need an army.

David Fudge (58:43.41)
It only takes one, right? Like, and so, you know, just, just start and don't ever think it. and you know, I think that a lot of people I'd talk to, they just like, they build it up in their mind to be such a complicated thing. And I would have to, if I would, if I would have known back then where I am now, like I would have been like, how do I get there? And it's like,

You know, if you get in a car from New York and you want to go to LA and you don't have your phone or a map on you, you can get there. You may not know how you're going to get there, but you can get there and that's okay. Right. And so, you know, I don't know if that's the best analogy, but, you know, I'd say just, just get in the car and hit the gas and you'll figure it out along the way.

Rose (59:37.932)
I love that. Well, this has been a wonderful conversation and thank you for being so open and honest and transparent. It's just been, it's been really great. And I just commend you on all the success and wish all the best. And I can't wait to have you back on the show again, because I think it take two on this could be really interesting.

David Fudge (59:58.524)
Yeah, for sure. It's changing fast, so I'm sure I'll have some new things to say in a year. Yeah.

Rose (01:00:05.238)
I can't wait. We'll be, hanging on. Well, thank you so much and I'm looking forward to the next conversation.

David Fudge (01:00:12.966)
Awesome, thanks so much, Roz.