Vol. 14, No. 10, September 10, 2001

 Thriving in a World of Consolidation
 With Bubbles McLean

McLean, Evison, Barnes, Martin
[L to R]: Speaker Doug McLean talks with Brian Evison, Chuck Barnes, and Paul Martin after Friday’s meeting.

Talking Rain CEO and President Doug McLean brought with him memories of being a member of the BBRC. “It’s been almost seven years since I left the Club. I brought gifts with me, because I know you’ll be easier on me!” Doug had outfitted everyone with a ticket stub and conducted a raffle as the first order of business. Bob McNulty won a stylish Talking Rain blanket; Dick Clarke won a case of AirWater; Carol Hoeft won a case of flavored sparkling water. Before the morning was over Doug had raffled off about a dozen items. Everyone received the patented Talking Rain plastic bottle.

“There’s big consolidation going on in business in general and especially in the beverage business,” said McLean. “Major retailers in the grocery business have combined to form about five large retailers. Early on, Talking Rain was a regional company, but consolidation has forced us to look for partners to meet the needs of the larger firms. We are looking for other distribution partners. Our firm has national presence now, with all Sam’s Club and Costco Warehouse stores carrying our products. Where we have problems is in the area of Direct stores delivery (DSD), where the company delivers product to the neighborhood stores. We don’t have that capability yet, but time will tell.”

Doug said there was “little presence in schools, hospitals, etc. So, we opened a new company, called Raging River, with trucks with the RR logo moving out into non-licensed accounts. The future is partnering with other companies.”

McLean also said that Talking Rain has gone about marketing its products in a different way. The decision has “set us apart in the way we choose to go to market. Most beverage companies use TV. We chose another path, which was to become involved in lots of small, local events. Our reasoning was to introduce Talking Rain to as many people as we could, asking them to try our product. We also associated ourselves with certain charitable causes in each community. Talking Rain has participated in over 300 events a year over the past several years, and this effort has made us the top choice in the Pacific Northwest.

Doug pointed out the list of events the company has become involved in. He asked, “Does the BBRC have an event that Talking Rain could partner?” Didn’t take much longer than two seconds for the crowd to respond – the BBRC Golf Outing and the BBRC Raffle! Doug replied that was exactly what he wanted to hear and said that this method of marketing has been a “tremendously successful project for us. We’ve also linked up with Special Olympics, Boy Scouts, Fred Hutchison Cancer Center, and others. We’re very proud of our record of community support.”

One unique way to market the product is to partner with the retailer for space on the floor, with a special donation as a percentage of sales going to United Way. “We began this program with Costco three years ago to moderate success. Now, Costco has made it a mandatory program in all U.S. Costco Warehouse  stores. By going nationwide on this program, we expect to raise $150,000 for United Way across country.”

With the time remaining, Doug showed how TR has evolved. In the mid-90’s all product was sold in glass. “We introduced apple-flavored 4-packs but were hit by the Alar disaster. Sparkling water was first product in a plastic container and we found that plastic at that time would suck up the carbonation. The beverage industry is changing to larger glass bottles. Glass was very successful for us.

We can do things the big guys can’t do. So, we do special things, like Private Labels. The challenge is working with exclusive contracts.

Talking Rain is available in cans in vending machines. Microsoft is a big client. The employees like to recycle.

The present day 20-ounce bottle in plastic holds up well. No calories, just a hint of flavor. We’re big in California and Arizona and a huge success throughout Costco. Water is so competitive and cheap. We made the decision to not drop prices. Our product is real spring water, all natural, so, we decided to make an up-scale package, a custom patented bottle. The new shape is popular with people using the product outdoors — hiking, bicycling etc. Talking Rain is getting recognized because of this shape, as well as its new, exciting products, like Airwater oxygenated.

Doug showed some new plastic shapes, such as a bottle shaped like a military canteen. “We’re doing lots of crazy things. We’ve got ‘Good For You Water,’ with vitamins, minerals, and herbal additives. Innovation is the name of the game.” President Goldfarb presented Doug with a certificate indicating a gift of 600 pounds of food has been made in his name to Rotary First Harvest.

Thanks to Bob Holert for his introduction.