The Future of Cannabis-Infused Beverages and Addressing Generational Gaps with truss beverages' Scott Cooper

Scott Cooper made the move a year ago from Molson Coors to the start up, truss beverages, to reimagine what the cannabis market could look like. An experienced business leader, marketer and innovator with a track record of breathing new life into businesses & brands and unlocking new opportunities, Scott brings great insight into his new chosen path and what kinds of generational opportunities and limitations he faces in changing the landscape of cannabis-infused beverages.

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Transcript

Leon Goren: 0:00

Special thanks to Aryn and Berlis for helping us bring you today's PEO lea ership snippet podcast. Wel ome to our snippets podcast. I'm Leon Goren, CEO and pre ident of PEO leadership North America's premier peer to peer network and leadership advisory firm. Today we welcome Scott Cooper present CEO at truss beverages. Scott has been leader in the CPG industry for many years having worked both in Canada and the US. Prior to trust beverages. He served as a global Chief Innovation Officer of Molson Coors for four years. On his return back to Canada from Denver, last year, he joined our PEO Leadershi Committee, and I know both hi advisory group in our communit are very happy to have him o board. Scott, it's great to hav you with us today. Yeah, it' great to be here. Thanks fo inviting me looking forward t the discussion. So I thought I' kick it off around th transition to a company lik trust, and where you're th president, CEO, maybe you jus walk us through a little bit o how that happened. And mayb some of the differences betwee those roles or any surprises Sure, yo

Unknown: 1:02

know, I think probably the most jarring transition for me was for becoming the head of innovation globally, I was the chief Commercial Officer for the Canadian business. And in that role, you've got a lot of resources, you've got a lot of big company support around you. And moving into that role as head of global innovation, it was really about creating new capabilities for large organization, and innovation, and particularly startups, it's just a fundamentally different skill set, then large companies typically have and a part of the four year journey there was setting up those capabilities, bringing in a different team, setting an agenda. And then in a lot of ways, transitioning to trust it was it wasn't easy, but it was almost a relief, I guess is the word I would use it was a chance to to, you know, building capabilities in a large organization to start up small companies. You're fighting against the the current and everything that's in that company systems process capability is built for something else. And then so then being able to come in and actually run one of those small companies, and apply some of those disciplines of being able to move quicker, you know, certainly being informed by data, but but not getting to 90% certainty before you move. It was really enjoyable coming into it.

Leon Goren: 2:20

So you bring up an interesting point. And I know a lot of companies are sort of trying to figure this out. But when you were with Molson Coors and you're running innovation. Do you have autonomy? Are you were you, like, influenced under the big header between the two companies? And because everyone talks about, they feel stifled within those large organizations, sometimes when you're running innovation, right? So yeah, you got innovation, but you're still having to support the whole larger organization. So sometimes it's not as innovative as you hope it to be.

Unknown: 2:52

Well, specifically, the most important, we were given a fair bit of autonomy, in even including the somewhat the degree of autonomy that we wanted. And at the time, we were just coming to an end of an era where a lot of large companies had set up air quotes garages in Silicon Valley, and they set up these incubators. And our observation at the time was you actually, it's not a good thing for large companies Innovation Group to have that much autonomy. And almost none of them succeeded because they were disconnected from the commercial needs and goals of the business. And they were almost too creative. So I am getting that balance, right of being connected to the goals of the business, in the case of Molson Coors, staying very focused on beverages, but starting to look beyond alcohol, and staying closely connected to the business units themselves, the operating units, because ultimately, they're the ones who need to lead and commercialize any innovation that a central innovation teams going to come up with. And if they're not on board, early and in passionately, then that's gonna undermine the success of of anything they come up with. So having the autonomy and being somewhat removed from the day to day pressure of the of the p&l is important. So you can think creatively and outside of the parameters of the business. But equally being connected is also very important.

Leon Goren: 4:18

So you started though, as the chairman right of trust, what sort of what spurred you on to take on the presidency? Oh, because it was it's a major shift for you, right? You've been in the commercial, you were the Commercial Officer, your chief innovation. And now you went into that startup, and you actually understood the startup because you guys were the one incubating it. Any nerves jumping in to that small startup to get it going?

Unknown: 4:42

Of course, at the time that I stepped into it, we didn't have a plant built do with COVID was just hitting. There's still a lot of restrictions around what you could and couldn't do with the new legislation. So yes, it was there was no proof of concepts didn't know if consumers are going to like our product, even if we could make good products at that point in time, so definitely stepped off the legend and jumped in the water on that one. But if I kind of wind back, this was an initiative that we kicked off in 2017 when we've gone to the executive team at Molson Coors, and then subsequently the board and, and pitched them the idea of getting into cannabis, and specifically cannabis infused beverages. So we've been looking at it for a long time, we've done a lot of research, we did a large study with McKinsey with about 10,000 consumers in North America to really understand it. So as much as it was a risk with a lot of unknowns, we also also had a lot of confidence, based on the consumer research and data that we had. And we've made a lot of progress since 2017, around some of the base technologies and making ingested cannabis bioavailable, and feeling the effects quickly quick onset. So yes, I was despite some of those nerves and uncertainties quite confident taking the taking the role and actually really excited to pioneer something. How many times do you get to lead a business that has literally never been done in the world before?

Leon Goren: 6:19

It's amazing. It's funny, because I, we often have been doing this a lot of years. And so I often had the hired guns who are always looking at and going, that entrepreneurial, and it looks so fantastic, but often very nervous to sort of jump into it, right? Because they, they look at it they admire, but rarely do they jump and then some of that jump actually sometimes sit back and go, Oh my god, I had no idea that it was going to be like I had all these resources before and now I got no one and I'm doing it out. And it's overwhelming sometimes for them. So

Unknown: 6:51

I guess I'm a little bit lucky in that I know, I got to step into a startup that was well capitalized. We've got two large shareholders with Molson Coors, and, and hexo in the cannabis space. So I, I admire those who take it. As much as I took a leap. We have good backing and those who take a true leap to kind of start from scratch is, I think, a different thing entirely. And just tremendous respect for people who choose to do that.

Leon Goren: 7:17

No, it's great. So you've been at it now for a few years. And it's and we've almost all of us on the sidelines have been watching this whole cannabis space grow. And and listen to the media and stuff. Let's talk about the size of the business because the perception at I think a lot of people look at it. It's growing. But we don't know how fast it's growing. We see retailer showing up everywhere. Is it meeting expectations in terms of let's go back to that McKinsey study you guys did years ago, in terms of size of market versus alcohol in terms of consumer adoption? Is it coming as fast or have we run into a few barriers,

Unknown: 7:56

it is not coming as fast. So they started the highest level of total cannabis retail sales, in 2028, was around 2.6 billion and most had been forecasting around 3.1 3.2. In advance of that year, and this year, looks like it's going to come in around 3.8 to 3.9 ish, maybe a little bit higher. That mean COVID has definitely made it difficult to predict things. But but on tracking roughly people were forecasting by 2025, about an $8 billion business. So it'll be kind of in that I think six to seven by them. So significant and and still challenging, large established industries like alcohol for scale and size, but not merging emerging quite as quickly as people had forecast and expected.

Leon Goren: 8:48

And is it the consumer like the consumer, trialing it? That's sort of the biggest challenge.

Unknown: 8:55

Yeah, I can speak specifically to cannabis infused beverages because obviously that's where our focus and expertise is. And when we launched the business, where we really were excited as cannabis infused beverages, overcome a lot of the social stigmas that are associated with smoking, and the other you know, the primary forms of cannabis consumption. And we thought that there would be both current cannabis consumers would gravitate towards beverages and use us for occasions where they didn't want to or couldn't smoke. But we also thought that there would be an equally large group of consumers that were interested in cannabis but didn't want to smoke it would come into the category. And what we've found for our business is it's been very much the former group, the current cannabis consumers, adding beverages as part of their repertoire, and very little of new consumers coming into the category via cannabis infused beverages. So that that has not grown as quickly as we thought it would. Although on the current cannabis consumers we're seeing Really, really strong trial, and about 85% repeat rates once people have tried the products,

Leon Goren: 10:07

so it's more. Okay. So if I understand it, it was the the new consumers who had never really done this before, still were hesitant really to sort of jump in and give it a try.

Unknown: 10:18

And still are. So I think that's probably the gap between what industry was forecasting from overall growth to to where we are today. I think it'll still come, I think it just change and behavior takes time. And I know the first time I would not, there was not a category consumer before stepping into this role and trying some of our products for the first time, you really don't know how it's gonna affect you. And so there's, yeah, it takes time to create space to try it. And I think everyone kind of has to go on that journey and, and find a way to ease into it.

Leon Goren: 10:56

Yeah, no, I agree. It was almost like a stigma that you've been brainwashed for so many years that it took it takes a while because I've done the same thing. I was on the outside, right? Never have done and want to try it. And then once you try it, you're like, Okay, this is like alcohol and in many respects, right. But there's still a lot of people out there who haven't really are nervous about it. It's almost like a generation gap. We got to go through here possibly, very much.

Unknown: 11:23

There was an interesting study that was done in the US probably about a year ago, where they asked millennials and Generation Z versus Gen X and boomers, if you could have only one of alcohol or cannabis legal, which would you choose? And for Gen X and boomers, two thirds chose alcohol and for Gen Z and millennials two thirds chose cannabis. So there is a there is a divide there around attitudes and perceptions for sure.

Leon Goren: 11:51

That's awesome. Well, Scott, thank you so much for joining us today and thanks for sharing your insights on the industry and even on your transition. If you're interested in our live webcast, the way forward live and or any other snippets, please take a moment and visit us at PL leadership comm you'll find on our site various previous recorded webcasts, which include the guests as Morgan housel, Professor Janice Stein, Harvard Torres, Beth Kanter, Michel goldheart, Dr. Jason south, and we cover such topics as Mental Health Leadership, world reset and a host of others. Thank you for joining us today and we look forward to seeing you again shortly.