In late March of 2020 – what will be known as the beginning of “that year” – I connected with my direct reports to discuss what was happening to our business. Like many other execs at the time, we tried to predict the future.
I launched Hint in 2003, seeing a gap in the beverage market for flavored water with no sweeteners or preservatives. It was an idea that I had concocted in my kitchen, and over the ensuing 17 years, we had built the brand into the largest independent non-alcoholic beverage brand in the United States. Having fought our way through the 2008-9 financial crisis a decade earlier, I had a feeling we were in for another major upheaval in our business.
Item number one on the team’s agenda was the fact that our corporate food service business – supplying Hint to companies like Google, Facebook and others – was about to disappear overnight. Companies were going remote, sending their employees home to work. Fifteen percent of our revenue gone. Some were predicting a short period of quarantine, but we had to be prepared for offices to remain closed for at least several months.
Plus, there was that other pandemic issue to solve: supply. Store shelves were empty due to customers hoarding products.
Fortunately, nine years earlier we had made one pivotal decision. And it was about to pay off. Back in 2011, there was no direct-to-consumer channel for beverages, but we had some big fans at Amazon. A buyer from Amazon reached out to us when they were launching their online grocery business. They thought Hint would be a great addition to their offering. We were thrilled and decided to give it a try.
I soon learned, though, that the buyer at Amazon was not willing to share information about the sales that they made when they sold our product. Amazon was really no different than other retailers. While they didn’t have a physical presence, they owned the inventory and sold our product to their customers as business-as-usual. When I asked for the data from the Amazon buyer, he laughed and said, “Does Costco or Target or Starbucks give you the customer information on who bought Hint?” The answer was (and is), “No.”
So, I had a choice. Forgo a direct relationship with the customer to instead just focus on sales? Or could I do both?
The decision was made before I landed back in San Francisco from my meeting with Amazon in Seattle. Build our own site, our own DTC business – with a mission to have a relationship with our customers. The first incarnation of our online Hint store was bare bones. It was a classic example of not letting perfection be the enemy of the good – just get started and iterate from there.
Fast-forward to 2020: we had vastly improved our ecommerce site – and built up our CRM database to over one million customers who had bought Hint over the past several years.
With the corporate food service business drying up, we decided to pour gas on the DTC fire and focus our resources on supercharging our e-commerce capabilities.
We were fully stocked and ready to ship. We sent an email to the one-million-plus customers in our database, acknowledging the availability problems customers were experiencing at their local stores. We activated our customers to be our eyes on the ground and asked them to let us know where Hint was missing. And if they wished, they could order directly from us at www.drinkhint.com.
The response was overwhelming. We saw an 80% response rate on that email. Within a couple months, our DTC business had tripled. The convenience of having Hint delivered to our customer’s door was finally realized. By the end of 2020, direct orders comprised over 50% of our total revenue.
The model also allowed us to address the supply issues with retailers – in many cases sending product directly to stores and sometimes bypassing distribution centers, which unfortunately was the pain point. And unlike other brands that source components such as cans from outside of the U.S, we have an “all-local” supply chain, which was critical in landing a few major accounts, including Costco. The word quickly spread that Hint was ready to deliver no matter how the customer wanted to receive it. The DTC business did not cannibalize retail – it increased overall demand.
We confirmed something very important last year: focus on serving the customer. Our customer. Our customers were in control of how, where, and when they purchased the product. They were still going to the store, either themselves or through Instacart, and if they saw their favorite flavor or that special multipack, they would buy it there too. A win-win for all.
Now, as we slowly emerge from this crazy year, people ask me how business might change. When do we plan to “go back” to operating as we were?
The answer? We’ve moved forward. We’ve learned. We’ve adapted. We confirmed that consumers want choice. They want to shop in stores. On Amazon. And directly from our website. We won’t change that. We look forward to when employees can enjoy Hint with colleagues in person. And we will look for other opportunities to connect with customers and fans.
But the biggest lesson we took from last year? Embrace challenges. Leverage technology to serve the customer. Do what you need to do. Don’t be complacent. And remain undaunted.
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Kara Goldin is the Founder and CEO of Hint, Inc., best known for its award-winning Hint water, the leading unsweetened flavored water.
