Natale Olivieri wanted to sell bottled drinks so people could take them home. Noticed no premade chocolate milk, so… YooHoo!
Dave Young:
Welcome to the Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is, well, it’s us, but we’re highlighting ads we’ve written and produced for our clients. So here’s one of those.
[Central Heating & Air Ad]
Dave Young:
Welcome to the Empire Builders Podcast. Dave Young here alongside Stephen Semple. And we’re talking about empires, big businesses, big enterprises that have gone global, have gone ballistic and become huge, huge names. And Stephen whispered in my ear that we’re going to be talking about Yoo-hoo.
Stephen Semple:
Yoo-hoo.
Dave Young:
Not yahoo.
Stephen Semple:
Yoo-hoo.
Dave Young:
I thought he was just trying to get my attention when he said it. But no, Yoo-hoo. It’s a soft drink, right? Is it like the predecessor of Mountain Dew? Is it related?
Stephen Semple:
Somewhat. Somewhat but it’s a-
Dave Young:
I kind of remember drinking a bottle of Yoo-hoo when I was a kid.
Stephen Semple:
It’s a chocolate drink though.
Dave Young:
Oh, it’s the chocolate thing. Yeah, yeah. No, I don’t think I’ve ever drank a bottle of that.
Stephen Semple:
Yeah. Well, and the reason why it’s kind of a predecessor to a bunch of things is that it really was the first in the made to drink category. It actually invented that category of made to drink type.
Dave Young:
Made to drink as opposed to a soda fountain where you’re mixing the syrup and the soda at the point of consumption.
Stephen Semple:
Correct. Or an orange juice where you mix the concentrate. It was sort of, again, one of the very first made. Today it’s part of Keurig. And as we-
Dave Young:
Is it really?
Stephen Semple:
Yeah. It’s part of Keurig today. Yeah.
Dave Young:
I don’t know why that doesn’t seem to fit what I think of-
Stephen Semple:
Well, Keurig owns a bunch of things now, like their Dr. Pepper and there’s a number of things in the Keurig world today.
Dave Young:
I’m not keeping up with the… Pretty soon they’re all going to be owned by one company.
Stephen Semple:
Well, you’re not keeping up with the mergers and acquisitions?
Dave Young:
No, not at all. Try to hide from it. What are you going to do?
Stephen Semple:
Because Keurig doesn’t break out the sales, the estimates are somewhere between 100 million and 300 million in sales through Yoo-hoo. But what we do know is it’s a pretty big deal to be part of that group now. Now it was started by Natale Olivieri in 1928 and he sold it to Max Geller, who was an advertising executive in the early 1960s for a million bucks. But a million bucks in the 1960s was good money, right?
Dave Young:
Probably good retirement for the guy in the ’60s.
Stephen Semple:
And that’s basically what he did. He retired, moved to Florida, and didn’t work again. Natale’s an Italian immigrant and he’s a soda shop owner in New Jersey.
Dave Young:
That makes sense. That tracks.
Stephen Semple:
Yeah. And he’s making his own bottle of fruit sodas, but he’s struggling to differentiate from Orange Crush and Nehi.
Dave Young:
Okay.
Stephen Semple:
And his drinks are called True Fruit and he uses these high quality ingredients and they’re sold in these take-home bottles, which was unusual at the time. But what he noticed is a lot of people, he was losing a lot of business to the chocolate drinks sold at the soda fountain across the street.
Dave Young:
Okay.
Stephen Semple:
Because remember, soda fountains is where we used to go and get all sorts of things like milkshakes. Right?
Dave Young:
Yeah. But he was doing bottled drinks and take them home.
Stephen Semple:
Bottled fruit drinks.
Dave Young:
Fruit drinks.
Stephen Semple:
Yeah. Bottled fruit drink.
Dave Young:
Okay. Not sodas.
Stephen Semple:
Yeah. Not sodas. But he also looked around, he saw there was no pre-bottled chocolate milk on the market.
Dave Young:
Okay. Yeah.
Stephen Semple:
So he had this idea, what if I could make a shelf-stable chocolate drink that customers could have anywhere, anytime? All that sort of stuff, unprecedented idea, right?
Dave Young:
Sounds like a million-dollar idea.
Stephen Semple:
Yeah. It turned out to be, but there were some challenges along the way. The first challenge is people don’t have refrigeration. It’s not widespread. Milk spoils.
Dave Young:
Put some milk in a bottle and yeah, that seems problematic.
Stephen Semple:
Yeah. So how do you create a milk-like experience and taste without milk? That’s kind of challenge number one. So he experiments with a bunch of different things, and he comes across this whole idea of a milk protein and this dairy byproduct that he put together that suddenly created this milky flavor with lower fat and better freshness, had more shelf life. But despite that this was now whey-based, it was still not really and truly a shelf stable product. It was better than milk, but it was not yet what was needed.
Dave Young:
Got you.
Stephen Semple:
And in fact, he was working so hard on this that he started to kind of almost ignore his soda business and that actually began to falter. And he reached the point where frankly he almost gave up.
Dave Young:
Wow. Okay.
Stephen Semple:
So he’s at the end of his rope, he’s almost given up, and he got actually inspired one day when he was home and he watched his wife canning fruit using the hot fill method.
Dave Young:
Okay.
Stephen Semple:
Now what the hot fill method is, you heat the bottle interior and the liquid to just over 200 degrees Fahrenheit. I think it’s like 214 or something like that. And then seal it while it’s hot, which basically prevents bacterial contamination.
Dave Young:
The end result is when it cools, there’s a vacuum that’s formed and-
Stephen Semple:
There’s a vacuum that formed and also all the bacteria was killed.
Dave Young:
Yeah.
Stephen Semple:
Or a good chunk of it, enough of it that now the product is quite shelf stable. So he applied this to his drink and now he’s able to produce a shelf stable drink that’s smooth, cocoa flavored, dessert-like, sweet, all the things that he’s looking for. But he also realizes he has another problem. He can’t call it True Fruit.
Dave Young:
It’s chocolate fruit.
Stephen Semple:
Because that would be kind of confusing.
Dave Young:
My favorite chocolate fruit.
Stephen Semple:
Yeah. Kind of a confusing name for chocolate drink. So he decides to call it Yoo-hoo. And Yoo-hoo was inspired by a line in the song called the Indian Love Call. And literally the Indian Love Call, Yoo-hoo. Right?
Dave Young:
Okay.
Stephen Semple:
You can actually go back and listen to this old song. He heard the song and he said, “That’s what I’m going to call the drink.”
MUSIC:
Back in our days of happy childhood,
Yoohoo means please come out and play
I was so bashful in the wild-wood
Now I am bolder, I wrote and told her
You’ll hear me calling Yoohoo,
‘Neath your window some sweet day
You’ll hear me calling Yoohoo, Yoohoo,
Then you’ll know I’m home to stay
When I hear your cheery answer,
It will make my dreams come true
Because I know that Yoohoo
Means I love you
Stephen Semple:
Now here’s the part that I know, Dave, you would love about this. People were skeptic because it gave no clues to the product. Yoo-hoo doesn’t say chocolate.
Dave Young:
Yoo-hoo, try it.
Stephen Semple:
It doesn’t say drink. It doesn’t say any of those things. All it is different and memorable.
Dave Young:
Yeah. I think that’s great. And honestly, stealing a line from a song, not the worst idea.
Stephen Semple:
Yeah. Yeah.
Dave Young:
Especially if it’s in the popular vernacular.
Stephen Semple:
It was at the time. It was at the time. And the thing I loved about it is, Dave, how often do we talk about where people are trying to name things right on the money and it’s uninspiring and uninteresting and not memorable? Here’s a guy who I guess in a former life you were him because you called it Yoo-hoo.
Dave Young:
Yoo-hoo. I would’ve called something else Yoo-hoo, but he already did it. So no, I like that. And I think it just never became huge enough brand. I don’t know that I’ve ever seen it in a store.
Stephen Semple:
Well-
Dave Young:
But I could just not be looking for it either.
Stephen Semple:
There was a time it did get big versus everybody else, so we’ll talk a little bit about that next. So it’s 1928 Olivieri starts basically selling the world first shelf stable bottled chocolate drink. Now, why do we call it chocolate drink?
Dave Young:
Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.
[Using Stories To Sell]
Dave Young:
Let’s pick up our story where we left off and trust me, you haven’t missed a thing.
Stephen Semple:
Now, why do we call it chocolate drink? Because the FDA required it to be called chocolate drink because it contained no milk.
Dave Young:
Got you. So was that whey or milk proteins, the stuff in it?
Stephen Semple:
So that’s why they couldn’t call it chocolate milk. Yeah, it’s milk proteins and whey. So basically the FDA said, “You can’t call it chocolate milk because it’s not milk.” So it’s called a chocolate drink.
Dave Young:
So he invented… What he did is he invented the protein shake.
Stephen Semple:
Basically. Yeah. I guess I hadn’t thought about it that way, but yeah, basically. Yeah.
Dave Young:
CrossFit didn’t exist back then.
Stephen Semple:
It did.
Dave Young:
So there was no real market for crookie shakes.
Stephen Semple:
Yeah. That was called… They had a different name for it back then. It was called work.
Dave Young:
How do those people get away with calling that other one muscle milk?
Stephen Semple:
I don’t.
Dave Young:
I don’t know. I’m chasing a rabbit into the woods. Let’s get back to Yoo-hoo.
Stephen Semple:
Okay. So Yoo-hoo becomes a local hit. It’s pretty popular in New Jersey, then moves into Pennsylvania. Consumers like it. Restaurants start carrying it, starts getting onto grocery store shelves because people love the durability of it. And really again, this whole idea is the product created this new category. Ready to drink chocolate that’s shelf stable. Now through the Great Depression and into the 1950s, he scaled production. He got to the stage where they were pretty big. He got to the stage where they were manufacturing 250 bottles a minute.
Dave Young:
Wow, okay. Yeah.
Stephen Semple:
In the facility in New Jersey and in South Carolina, the facility in South Carolina, they were doing 300,000 cases a year.
Dave Young:
Okay.
Stephen Semple:
So pretty big.
Dave Young:
It’s a lot of Yoo-hoo.
Stephen Semple:
Pretty big. And basically one of the things that he did to make it popular, because what he knew was he was competing against Nestle and Hershey’s because they very quickly came out with things like that. So in 1955, comes up with this marketing idea because he’s now facing this competition. He’s no longer the only game in town. So he has this chance meeting with Yogi Berra. As we know, Yogi Berra was the winner of two American League MVPs. He was a five-time consecutive World Series champion, right? Pretty popular guy.
Dave Young:
Mm-hmm. And famous for his weird slip-ups with language. It was just these Yogi Berra-isms.
Stephen Semple:
Yeah, Yogi Berra-isms.
Dave Young:
Yeah.
Stephen Semple:
One of my favorite ones is no one goes to the mall any longer because it’s too busy.
Dave Young:
Yeah. Oh, that restaurant used to be really popular till everybody started going there.
Stephen Semple:
Exactly, exactly. Or my favorite one of his is deja vu all over again.
Dave Young:
Uh-huh. Yeah. So Yogi Berra becomes their spokesman?
Stephen Semple:
Yeah. And he actually created an endorsement deal that was innovative for the time, but has now been done a lot because he didn’t have a lot of money to give Yogi Berra. So what he gave Yogi Berra was stock options.
Dave Young:
All right.
Stephen Semple:
And that led to endorsements also from Mickey Mantle and Whitney Ford. So he’s got Whitney Ford, Mickey Mantle and Yogi Berra. And basically they start branding it the drink of champions.
Dave Young:
Okay. That’s cute.
Stephen Semple:
Right.
Dave Young:
Yeah.
Stephen Semple:
Predated the breakfast of champions, right?
Dave Young:
Yeah. That’s right.
Stephen Semple:
The drink of champions. But could do it because he had these people who were champions endorsing-
Dave Young:
They were champions. Yeah.
Stephen Semple:
… endorsing the product. So it’s the early 1960s and Olivieri has this opportunity to sell to Max Geller for a million bucks, which would be roughly like 10 million today, retires at Florida. Soon afterwards, now Max was a smart guy because soon afterwards they do a distribution deal with Pepsi.
Dave Young:
There you go. Yep.
Stephen Semple:
And then later Yoo-hoo would be acquired by Keurig. And at the time that the acquisition with Keurig happened, they were doing a hundred million bottles a year of Yoo-hoo. So still 100 million bottles a year is nothing to sneeze out.
Dave Young:
With my mouth, you’d think I’d stumble across one now and then.
Stephen Semple:
Yeah. And I’ve always just sort of thought maybe it’s not in Canada. I’ve not stumbled across it but-
Dave Young:
I think when I look at it and I think about the name and I don’t know the Indian song, so it just feels like a child’s drink.
Stephen Semple:
Yeah. Maybe. Maybe.
Dave Young:
Yeah.
Stephen Semple:
But I thought it was pretty cool from the standpoint of here he is and he’s seeing this thing happen and decides to invent this thing that no one has done before, which is this shelf stable chocolate drink and then decided to do this really fun name and then had this opportunity for the endorsement deal and didn’t go, “Oh, I can’t endorse Yogi Berra. I have no money.”
Dave Young:
Yeah. Yeah.
Stephen Semple:
Instead looked at it and went, “Well, wait a minute. If he endorses it and we do well, the stock price will go up, so why don’t I give him stock options?”
Dave Young:
So Yogi and Mickey and Whitey Ford, they did okay too.
Stephen Semple:
Yeah. I’m sure they did just fine. And that became a standard for endorsements going forward where celebrities much more, instead of taking the cash, would have royalties or shares in companies or things along that lines, which not only made endorsements more lucrative, but also opened the door for smaller businesses to be able to do it.
Dave Young:
Yeah. You see it all the time. Even movie stars are like, “Don’t pay me as much, but give me a percentage of profits.”
Stephen Semple:
Yeah.
Dave Young:
Yeah.
Stephen Semple:
And from what I was able to gather, the Yogi Berra was literally, if not the first endorsement done that way, one of the very first endorsements done that way, which really showed innovative thinking because it would be easy to get caught in the, “I can’t afford it” rather than, “Huh, what’s an alternative solution to this problem?”
Dave Young:
So next time you’re on the Wizard Academy Campus, I think you should bring a couple of bottles of Yoo-hoo and we’ll sip some Yoo-hoo. I don’t know, is it a breakfast drink or is that an afternoon… Because I would for sure make a cocktail out of it.
Stephen Semple:
Well, then it’s afternoon.
Dave Young:
I bet it tastes really good with Kahlúa or creme de cocoa.
Stephen Semple:
I’m sure. You know what? With Kahlúa, it’d be great, I think.
Dave Young:
Yeah. I think so. I think this is worth exploring is what I’m saying.
Stephen Semple:
You know what? I think we owe it to the world-
Dave Young:
We owe it to our audience to-
Stephen Semple:
… to do a little bit of experimentation on this to determine what is the best way to drink Yoo-hoo.
Dave Young:
Uh-huh. It can’t just be straight off the shelf because that’s just not how science works.
Stephen Semple:
It’s not. Well, and if we’re going to do science, we got to do a couple of different iterations.
Dave Young:
Sure. I mean, is it a whiskey drink? If so, is it an Irish whiskey drink? I feel like that might be good.
Stephen Semple:
Yeah. Yeah. We’ll give them Baileys, this Irish whiskey. I’m going to say it’s probably more of the Irish whiskey side.
Dave Young:
That’s probably where it’s headed. All right. Well, I’m looking forward to it now, my first taste of Yoo-hoo.
Stephen Semple:
We’re taking it from a shelf stable drink to a making us instable drink.
Dave Young:
When I say my first drink of Yoo-hoo, it makes me sound like that’s a word that you would use to bleep something else out. Right? I hit him right in the yoo-hoo. Oh, what a fun story. I hope he had a wonderful retirement in Florida and I’m looking forward to-
Stephen Semple:
I’m sure he did. I’m sure he did.
Dave Young:
… looking forward to raising a glass of Yoo-hoo next time we’re in the same room, Stephen.
Stephen Semple:
All right. Awesome. Thanks. Okay. Thanks, David.
Dave Young:
Thanks for listening to the podcast. Please share us, subscribe on your favorite podcast app and leave us a big fat juicy five star rating and review at Apple Podcasts. And if you’d like to schedule your own 90-minute Empire Building session, you can do it at empirebuildingprogram.com.
