A comedy bit tells of a fictional inventor who “created a soft drink called 4-Up” that went through several iterations—“5-Up, 6-Up”—but never caught on, and the man “gave up and died, brokenhearted”—followed by a pause and the punchline, “Little did he know how close he came.”
Tyler Merrick’s ahead of that naming curve. His San Clemente ventures are gourmet candy maker Project 7 Inc., and Seven Degrees LLC, which sells sparkling water.
Names come not from six prior goes, but from social needs he backs—the environment, housing, hunger, clean water, education, healthcare and antibullying.
Care Package
Project 7 launched a decade ago to be like Newman’s Own, the profits-to-charity venture of the late Paul Newman.
Merrick did “a bunch of different products,” from coffee to gum, and, “It failed.”
The problem wasn’t just an overfull cart but that “it was all about the cause.”
Packaging indicated that, “You can provide a meal, you can plant a tree,’ Merrick said. “The product was a supporting actor. They’d buy once, then go back to their brand.”
Merrick still talks that way—a web page laying out his seven causes sounds like a recitation of the Roman Catholic corporal works of mercy, but the five years since his epic flameout—“We lost Walmart, Target and 7-Eleven in six months”—have been a refining fire.
Wholly Broken
What was broken?
“We weren’t known for anything,” Merrick says—an irony, given the avowed purpose of founding the business.
“A ‘pity purchase’” doesn’t build a brand.
He kept the gum as his sole product and undertook an arduous examination of what Project 7 was and did.
The call: “What would I do differently if I had to do it over again?”
The response: “We made it all about challenging the category [and] we came out with exotic flavors.”
Current options include “birthday cake” and “grapefruit-melon.” The “rainbow ice” is like a sno-cone, “kettle pop” is a sweet-and-salty treat, “half-and-half” is Merrick’s take on an Arnold Palmer.
Target and Stater Bros. carry the product.
Two years ago, Merrick added bear-shaped “gummies,” most flavors along a clear theme: mojito, mimosa, Moscow Mule, Manhattan, and Old Fashioned, and sold in Starbucks.
Project 7’s latest is Chewies—similar to Skittles—rolling out this month at Whole Foods.
Church, State
Eventually they’ll be on Amazon—which seems obvious, given Whole Foods’ ownership, but Merrick says product buyers at the same retailers, or different retailers owned by the same company, not only don’t guarantee shelf space but won’t even win you an audience with the right high official.
“They don’t push you on other category buyers,” he says. “There’s no inside job.”
He found this out in starting beverage company Seven Degrees six months ago.
“The beverage buyer at Whole Foods doesn’t care that you have a candy item,” he says. “It’s like church and state.”
Mind, Body
Bubbly water is a sparkling category with the success of Le Croix by Fort Lauderdale, Fla.-based National Beverage Corp. and numerous knockoffs. It has a sweet ticker—FIZZ—and a $5 billion market cap.
Merrick’s flavor palate paints full-bodied frescoes around even “pamplemousse,” Le Croix’s grapefruit offering: fruit sangria, lime-mint mojito, orange mimosa and grapefruit Paloma, the last after a tequila cocktail big in Mexico.
The product is in 500 Western Kroger-owned sites, including Ralphs. Starting next month, it hits Whole Foods and Target.
Missed Marks
Merrick presaged wider food trends—beef jerky in sweet flavors, energy bars in savory—but as much as he “turned around in a big way”—the Business Journal estimates annual revenue at more than $10 million—it hasn’t prevented failure.
“Candy companies, with all the data and insight for Latin-inspired products,” crossed a line with consumers, trying “mango, chili, papaya.” He said “chocolate and vanilla” are still tops in ice cream.
He’s heard the words “too weird for gum” more than once. The margarita flavor is on its way out.
And even for ones that make it, flavor lifecycles are short.
“When you push the envelope, you have to be willing to fail—fast.”
