Ian Monat is the co-founder and CEO of Rhythm Sparkling Hemp Beverages, a functional wellness brand that develops and sells ready-to-drink beverages infused with adaptogens, superfoods, and U.S. grown hemp extract. Before entering the hemp space, Monat was a sommelier by day and gigging bass player by night. From playing in high school garage bands to studying music full time at the Musician’s Institute in Hollywood, music has always played an important role in Monat’s life. 

While on stage, he realized how much the clear, uplifting effects of hemp helped with mood, focus, and dexterity, but later was disappointed that every hemp-infused beverage option he tried tasted poorly or was loaded with sugar. That’s when Rhythm was born. Monat worked with iconic alcohol brands such as Dom Perignon and Hennessey as a business analyst for luxury wine and spirits supplier Moet Hennessy USA (LVMH). In 2018, Monat began connecting the dots between the wine and cannabis industry when creating Caliweedjobs.com, a job board for California’s cannabis industry that was later acquired by the digital marketing agency MediaJel.

Area Code 420 (AC 420): Talk about your new distributor partnership.

Monat: We have recently entered into two new distribution partnerships that we are very excited about. Here in the San Francisco Bay Area where I live, we partnered with SF Naturals, a distributor of natural and organic food and beverages since 2013. Not only does SF Naturals give us access to hundreds of new wholesale accounts in Rhythm’s backyard so to speak, but they are also very experienced with CBD beverages. They have worked with CBD brands for over five years at this point, with some of the leading CBD beverage brands in their portfolio.

Our other latest distribution partnership is with Republic National Distributing Company (RNDC) who is expanding our reach in Oregon, which is quite fitting for us since the hemp in our drinks is actually cultivated outdoors on a farm in central Oregon. RNDC has been around in one form or another since 1898 and they just began distributing CBD beverages last year. They also have some leading CBD beverage brands in their portfolio, but their sales team focuses heavily on wine and spirits, so the experience has been a little different compared to what we are used to.

AC 420: Would you say your brand has expanded quickly?

Monat: I would say we are growing organically at a measured pace with an inflection point up ahead. We told ourselves early on that we’d rather go a mile deep in our focus cities instead of expanding a mile wide and inch deep nationally. So far, we have done a good job of sticking to that gameplan. We’re in about 275 wholesale doors at the moment and I would like us to be in 2,000 to 3,000 doors by this time next year. We have some additional distribution partnerships that will close in late Q3 that will open up a few hundred more doors. We also just got listed on Amazon, which will help grow the direct-to-consumer side of our business.

AC 420: Are you seeing any beverage trends starting to emerge?

Monat: Interestingly, I am seeing the leading CBD beverage brands diversify out of CBD, pivoting their messaging and offerings to become functional beverage brands more broadly. For example, Recess has a CBD-free line of RTD beverages and powders called Mood that focuses on the benefits of magnesium. VYBES has a line of adaptogenic elixirs without CBD with ashwagandha and L-theanine and a blend of vitamins. And most recently you’ve got DayTrip launching a Bubbly Probiotic soda soon, similar to OLIPOP or Poppi. This trend is partly customer driven, but also partly business driven, meaning having non-CBD products allows a brand to advertise on Facebook and Google and establish relationships with mainstream grocery stores that are not yet merchandising CBD beverages.

AC 420: Your beverage line includes a variety of ingredients, not just hemp or CBD. Does this raise the price point?

Monat: Yes, as you know nutraceuticals are not cheap and have high MOQs (minimum order quantity). Hemp emulsions are a tricky ingredient and often are not compatible with other ingredients in the formula. Any of the nutraceuticals in a formula can trigger incompatibility, which could cause the emulsion to separate from the rest of the liquid. That said, not only do nutraceuticals raise the cost of goods, but they add layers of complexity, especially when it comes to hemp beverages.

AC 420: Does the public question the use of hemp and CBD ingredients in beverages?

Monat: I think a lot of people are confused about hemp beverages, and when you look at the different products on the market, it’s easy to understand why. On the one hand, you have widely distributed brands like Hemp2O that don’t actually have CBD in them, just a tiny amount of hemp seed oil. Then you’ve got CBD drinks, which don’t have label guidance from the FDA, so they are labeled in a variety of ways. The most common ones are CBD, nano-CBD, hemp, CBD from hemp, or hemp extract. And to complicate things even more, the hemp beverage market has recently expanded to include Delta-8 drinks and even Delta-9 drinks, both of which will get you high.

States are also implementing their own patchwork of rules. If you are in Utah, no hemp derivatives are allowed in commercial beverages. If you are in Minnesota, hemp Delta-9 in beverages is legal. But if you are in Oregon, CBD isolate from hemp in beverages is illegal. It is safe to say, hemp drinks are kind of a minefield for the casual customer at the moment.

AC 420: There are numerous hemp beverages in the market. What is your competitive advantage?

Monat: When we first started to think about what Rhythm should be back in early 2020, we looked at the hemp beverages on the market and saw they were mostly flavored hemp water. We were inspired by beverage brands like Life Aid and Neuro that had a specific function for each SKU in their portfolio. We imitated that strategy, but we wanted each SKU to be formulated around the various use-cases of CBD, and that is how we arrived at a portfolio of beverages for Energy, Recovery, Relaxation, and Sleep. That is our primary advantage. There is a Rhythm for all the parts of your day. Additionally, we work very hard on perfecting the liquid itself. With every formula we develop, we ask ourselves, “is this the best drink we have ever made?” If the answer is no, then we keep working.

AC 420: What has been your most effective marketing tactic or technique so far that helps move your products?

Monat: The best way to convert customers and turn people onto the brand is live demos where we can sample Rhythm and as they say in the beverage industry, get liquid to lips. It is much easier to get someone to buy a $5 beverage if they have tasted it first. Whether it is at a 2-hour demo supporting one of our retail accounts, or a weekend-long street festival, once people taste Rhythm and hear the elevator pitch about the brand, they typically end up becoming a customer, especially if the person is wellness-conscious from the beginning. Rhythm really appeals to a health-focused audience of consumers who diligently read product labels to know exactly what they’d be putting into their body.

AC 420: What are the top two metrics to which your company pays the closest attention?

Monat: The number of new retail accounts and the quality of the accounts, meaning how many cases are they ordering per month. If the account velocity is slow and performing below average, we will take steps to try to improve performance. This could be digitally, like mentioning them in a social media post or in our email newsletter, or in-store, where we will ensure Rhythm is merchandised properly with the latest point-of-sale materials. We might even schedule an in-store demo to introduce some of the store’s customers to Rhythm and get, you guessed it, liquid to lips.