Nestled on a few acres in pastoral Lincoln Park, Ken VandeVrede has been growing football field sized plots of hemp since he landed a license two years ago. True to the Garden State moniker, New Jersey was one of the first states to jump at the opportunity presented by the 2018 Farm Bill that permitted states to create their own industrial hemp program and dropped hemp from scheduling under the Controlled Substances Act. VandeVrede was one of the first in state to be licensed.
The third-generation farmer isn’t focusing the sale of his product at local markets alone, or at his family’s Gro-Rite Garden Center nearby. In a year, he’s gotten it into the hands—and mouths—of thousands across 10 states in the form of Kaló, a hemp-infused seltzer billed as an alternative social option to alcoholic brands Truly and White Claw.
VandeVrede got the idea for a hemp-infused beverage after years in the cannabis industry out west. The former chief operating officer of Irvine, Calif. based Terra Tech first entered the industry in 2010 after growing in a more traditional farming family that for 50-plus years has provided bedding plants, mums, orchids, and poinsettias, and more recently lettuce and hydroponic basil, to supermarkets around the Northeast.
“I got to understand cannabis through the extraction side and I saw the beginning days of legal cannabis. First people were smoking it, and then eating gummies or eating chocolate. But at the end of the day, it wasn’t social. Your typical consumer wanted more of a social product,” VandeVrede said. “Women and over 55 were the biggest drivers in cannabis sales. Smoking isn’t something someone is going to do if they haven’t done it before, so what’s another form factor to bring a product to market? Beverages.”
He connected with Arup Sen, co-founder and CEO of Infusion Biosciences Inc., who patented a water-soluble hemp extract that Kaló (which, by the way, means “good” in Greek) has the exclusive rights to in the U.S. The result of this process, VandeVrede said, is a functional plant-based beverage that takes just five minutes to feel the effects of, and a crisp, clean profile that works well with flavors like Strawberry Watermelon and Lavender Lemon.
“The other brands out there saying water soluble aren’t water soluble, it’s water dispersible. That means using nano technology to make extremely small particles of oil and dispersing it. At the end of the day, the reason we’re so clean tasting is there’s no oil in our beverage. That’s the big difference between us and our competition,” VandeVrede said.
VandeVrede initially launched Kaló as a direct to consumer product, but he saw launching with traditional beverage distributors as the real path forward. He wasn’t wrong: In its first year on the market, Kaló cracked $1 million in sales, and 60% of cans went through beer distributors.
Kaló is now sold by 14 distributors in 10 states, including Konrad Beverage Co. and Harrison Beverage in New Jersey. The regulatory framework is state-by-state, so that’s the way VandeVrede’s growing it—if he’s in a state, he wants to get into as many distribution channels as possible there. And if a distributor he engages works within a state he’s not in, he’ll work on expanding the product into the state, and then building from there. As the product expands on the east coast and he eyes westerly expansion, he’s also keeping tabs on states whose regulations are friendly to hemp-infused beverages and jumping into the market there.
With each state VandeVrede brings Kaló to, a new label must be made. In Florida, for example, the cans must read as follows: This product contains a total Delta-9 THC concentration that does not exceed 0.3 on a dry weight basis.
The Rhode Island label is a bit longer: This product is not certified to be free of contaminates. It is derived from industrial hemp. This product is not medical marijuana and has not been analyzed or approved by the FDA for safety or efficacy.
New Jersey dictates no specific label requirements, making it, according to VandeVrede, “a very friendly state.”
Though its nonalcoholic, the majority of its business is in the beer and alcohol channel. To get in front of customers who aren’t going to liquor stores, VandeVrede converted two box trucks—previously used during the pandemic as a food delivery service he had piloted—into his own mini-fleet of delivery vehicles, filling the gap by bringing Kaló to delis, supermarkets, pizza places, natural markets, and CBD smoke shops.
“We have brand ambassadors that touch the accounts every other week, merchandisers that go in and make sure our product is displayed correctly, and we definitely have a team behind our sales force touching our product to make sure the end consumer store always has the product in stock,” he said.
As far as marketing goes, sure, Kaló is working with influencers. It’s 2021. Most brands are. But in a call back to the 1950s, a pilot will fly an aerial banner ad each weekend from Sandy Hook to Long Beach Island posing the question “Have you tried Kaló?” to those who gaze skyward. According to New York City-based banner company Arnold Aerial Advertising, the old school way boasts some big numbers: a consumer survey found that 88% of people remembered seeing the airplane aerial banner go by after 30 minutes, 79% could remember the product or service being advertised, and 67% retained at least half the message from the aerial ad.
“Is it translating to sales? We think so, but for right now, it’s really about brand awareness. We just want everyone to know Kaló,” VandeVrede said.
He also tapped Push Agency to give 70,000 cold cans of Kaló to beachgoers along the Shore this summer. This guerilla marketing tactic won’t be cheap—each can retails for $4.99—but he’s got faith in its potential.
“The best way for consumer adoption with a new beverage is a sample. The results we’ve seen at the Shore with giving out samples has been phenomenal,” he said.
In July, Kaló released four new flavors to its hemp seltzer lineup: Black Cherry, Ruby Red Grapefruit, Ginger Lemonade and Blood Orange Mango. Something else is in the hopper, too, though VandeVrede won’t share for when: cannabis-infused seltzer. It’ll be a social beverage like Kaló, but with THC in it, too, the main psychoactive compound in cannabis that gets people high. He said it’ll be on adult use dispensary shelves in several East Coast states. Effects hit in five minutes and last for 90 minutes.
“[A common] issue when you look at people consuming edibles is that [there is a] difference from one day to the next, or from one use to the next,” he explained. “That needs to be figured out. If you want a brand in the market, it has to be similar to how any other product works – when a consumer picks that beverage up, they know what the taste profile is going to be, what the effects are going to be. That’s what Kaló delivers on – consistent quality, onset, and taste.”
“We want a very social product. Our goal is to be almost like [offering] a non-alcoholic and an alcoholic [beer] – one with THC, one without, but it’s the same consistent product. In a state where [adult use is legal], during the day when you want a hemp-infused, you could buy at the deli; and at night you maybe want have the cannabis infused from the dispensary,” he said.