What do you d

What do you drink when water is not good for you and your only other option is alcohol? Well, you rename root tea to root beer.

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.

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Dave Young:

Welcome to the Empire Builders podcast, Dave Young here along with Stephen Semple, and we are sharing stories about empires, business empires, brands that were built and grew really big, and figuring out what they did to make them grow really big. And Stephen just mentioned today’s topic, whispered it in my ear as the recorder was counting down, and you said that I probably haven’t seen this in a while. But I feel like it’s maybe still around, but it’s Hires Root Beer.

Stephen Semple:

Hires Root Beer, yes.

Dave Young:

Hires Root Beer, and I was kind of a root beer snob when I was a kid.

Stephen Semple:

Oh, were you?

Dave Young:

Not so much anymore, right? But I knew the difference between Hires and Dad’s and A&W and all the big root beer brands.

Stephen Semple:

Which was your favorite?

Dave Young:

There was nothing that compared to an A&W root beer coming out of a fountain, not a can.

Stephen Semple:

Yep.

Dave Young:

Going to A&W and having a root beer in a giant glass cold mug. But we’re here to talk about Hires Root Beer.

Stephen Semple:

Yeah, which is now owned by A&W. I do not believe that Hires is still available in the US. You can get it still in Canada. But at one point, they were the largest in the United States. And Hires is actually kind of the inventor of the root beer business. And today it’s like $600 million a year of root beer sold.

Dave Young:

Wow.

Stephen Semple:

So I thought-

Dave Young:

That’s a lot of root beer.

Stephen Semple:

I thought it was worth exploring.

Dave Young:

Yeah.

Stephen Semple:

Because this is the origin of root beer.

Dave Young:

Okay.

Stephen Semple:

So it’s the early 1870s, and the population in the United States is booming due to massive immigration. And sanitation is becoming a huge problem in cities. Polluted water is spreading disease and people frankly turn to alcohol for safe drinking. The average American at that time was consuming seven gallons of alcohol a year.

Dave Young:

Wow.

Stephen Semple:

Primarily beer and things along that lines, but part of it was because of water. So in 1874, protests start around alcohol, the anti-alcohol movements start. But the challenge is there’s no good alternative to water. And so, Charles Hires is a pharmacist, and he always had these little side hustles and was always looking for opportunities. And while he’s on his honeymoon, he is served this beverage called root tea. And it’s made by fermenting, so it’s carbonated, but the fermentation is cut off before alcohol forms. And it’s really popular in these rural areas, but not in urban areas.

And he’s a member of the Temperance Movement, so he knew it was hard to find good alternatives to alcohol. So he starts to experiment on recipes for root tea. And he felt this could be a temperance drink because it had the feeling of a beer, and it could be sold in stores. And it was delicious, and he felt he could create a shelf-stable version. The first version of it was this powdered mix that you would boil, add water, add sugar, add yeast, let it ferment, cut it short, and there it would be. Right? And so, he met with this local Reverend, Russell Conwell, and he was sharing with him this idea of this root tea. And what the good Reverend said to him is, “Men here do not drink tea.” So he looked at it and he says, “It looks like a beer. It’s brewed like a beer. So let’s call it a beer. Let’s call it root beer.”

Dave Young:

Honestly, as a little kid, that was part of the allure.

Stephen Semple:

Right.

Dave Young:

Right? “Ha ha, I’m drinking beer. It’s root beer. Look at me.”

Stephen Semple:

Yeah. And it’s this whole idea, when you have something that’s unfamiliar, if you can attach the familiar to the unfamiliar, it actually really works. So he took the familiar beer, attached it to an unfamiliar root tea, and made it root beer.

Dave Young:

Mm-hmm.

Stephen Semple:

Brilliant. Now it’s the Centennial Fair of 1874. It comes to his hometown of Philadelphia. And Centennial Fairs at these times were just huge, like 10 million people came over a six-month period of money.

Dave Young:

Wow.

Stephen Semple:

And he spent all of his cash to debut this product. There were 14,000 businesses on display at this fair.

Dave Young:

Where?

Stephen Semple:

Philadelphia.

Dave Young:

Holy moly.

Stephen Semple:

1876. Yeah. And if you think about it, Philadelphia in the early stages of the United States was a very important city. Constitutional Square is there and all that other stuff, right? So the first telephone and typewriter debut there, it’s very exciting. And he gives away free samples of his powder. It’s packaged in these little packages with directions, how to make it home. And when people try it, they really like it, but they don’t like the powder. He only sells like 864 packets in the entire fair. So he is got no money, no customers, and he is stuck with a lot of product. So it’s 1877. In a last ditch effort, he gambles everything and he advertises on credit. And advertising a drink in mass media had never been done before.

Dave Young:

Oh, wow. Okay.

Stephen Semple:

Yeah. The market just didn’t exist. So he posts these ads in local newspapers. It’s the healthy moral alternative. And he talks about the healthy benefits, so healthy, it’s good for you. And orders slowly start to come in. And he was able to pay off his debt, and he was able to build some popularity in Philadelphia. And because it’s a powder, it actually starts becoming national. And it really is considered kind of one of the first national drink brands.

Dave Young:

Way easier to ship powder than bottles.

Stephen Semple:

Yeah. So he goes from 11,000 packs a year, eventually grows to 1.5 million packs, and then sales flatlined. And he wonders, “Why did it flatline?” And what did it was the soda fountain comes in. And I don’t know if you realize this, but the first soda fountains were actually in pharmacies. And they sold all sorts of bad stuff: heroin, cocaine. All sorts of crap was put into these early soda fountains. And really, they became the social replacement for the saloon, the soda fountains in pharmacies.

Dave Young:

Yeah. Okay.

Stephen Semple:

And it was also around this time that the drinking straw was invented. But Hires notices this trend. What he needs is a soda fountain recipe. So he needs a syrup that’s pre-sweetened and ready to use. So he puts that together, but before he launches it nationally, he tests it out with a couple of local soda fountains. And it’s not being done right. There’s no consistency. And so, he says, “You know what? I got to fix that.” So he develops his own machine to dispense it.

Dave Young:

Oh, okay.

Stephen Semple:

And it’s this white marble with silver pipes, and it’s really the precursor to these branded soda machines of today. Because before that, the soda fountain guy would do all the mixing. This new soda fountain machine basically did the mixing.

Dave Young:

Took that out of his hands, yeah.

Stephen Semple:

Took that out of his hands. And he branded and he sells like a thousand of these machines. And he wanted the trademark root beer, but he wasn’t able to trademark root beer. So he decided to change the name of the product. So up to this point, it was marketed root beer, root beer, root beer. So he changed the name to Hires Root Beer.

Dave Young:

Okay.

Stephen Semple:

And frankly, this revolutionized how things were named. Products were not named that way. It was always just the product name, product name, rather than attaching his name to the product. He was one of the first to do that. And so, he becomes number one in the United States, and he starts then wanting to bottle his own product and ship that. And it becomes a bit of a challenge, but he discovers the bottle cap, and he’s one of the first to use a bottle cap. So there’s all sorts of things that happen. But then, he hits a really funny moment. Well, funny to me, not funny to him.

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.

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Let’s pick up our story where we left off. And trust me, you haven’t missed a thing.

Stephen Semple:

The Women’s Christian Temperance Movement boycotts his product, because the term beer bites him in the ass. They go, “This is a beer and it’s fermented, so it should be boycotted.”

Dave Young:

Probably made it more popular.

Stephen Semple:

No, it actually created a problem for him. It did hurt him.

Dave Young:

Okay.

Stephen Semple:

But here’s what he did that was really smart. So remember how he attached the familiar to the unfamiliar?

Dave Young:

Sure. Yeah.

Stephen Semple:

Root tea became root beer.

Dave Young:

Mm-hmm.

Stephen Semple:

Well, he decided to pick bread and did a study on bread, because bread is fermented.

Dave Young:

Okay.

Stephen Semple:

How much alcohol is in bread? Well, what he found was he had basically no more alcohol in his root beer than was in bread. So instead of saying to people, “Hey, it only has this much alcohol in it, which no one would understand,” he was then able to say, “It has the same amount of alcohol in it as baked bread.”

Dave Young:

Some people go, “Wait a minute. Baked bread has alcohol in it?”

Stephen Semple:

Silenced it.

Dave Young:

Yeah. You can’t get drunk on bread.

Stephen Semple:

Right. But again, attached it to something familiar and accepted, didn’t just do, “I’m going to educate people.”

Dave Young:

Yeah.

Stephen Semple:

He attached it to something that they could touch and feel and understand. By 1894, they’re selling 15 million gallons of root beer. They’re doing great. And in the 1960, the Hires family sells the company to Consolidated Foods, and it changes hands a bunch of times and it’s not really what it used to be. But it is the birth of root beer.

Dave Young:

Wow.

Stephen Semple:

The birth of root beer is Hires Root Beer. So I thought that that was really interesting. But to me, the thing that I thought that was, two really interesting things, one is the standardization; like how he recognized, “If I send this syrup out, it’s not all being done right. So before I send it out, what I need to do is I need to create a way to ensure standardization.” And what he understood is it wasn’t going to be training, so he created a machine for it; which also created a branding opportunity because they had the Hires logo on the machine. So anytime you went into one of these places, you saw the Hires logo. But the whole idea of, “I’ve got to sell people on an idea, making it simple, attaching it to something they already know and are familiar with,” really reduces that resistance to the ideas. And he did it twice, so it wasn’t an accident. He did it twice.

Dave Young:

Yeah. I love the story. And I love tying it to the amount of alcohol in a loaf of bread. The brilliance of it just goes a couple levels deep, right? It makes people stop and go, “Wait a minute. Alcohol in bread? I never thought about that. Yeah, there’s yeast that’s fermenting. Sure. I guess that’s how that works.” And I suppose in a laboratory, you take a freshly baked loaf of bread, all those little bubbles that form the basis of bread have probably carbon dioxide and a little bit of alcohol in them.

Stephen Semple:

Yeah, tiny trace amounts.

Dave Young:

Well, that’s probably why bread just has this nice aroma. It’s being carried aloft by alcohol molecules.

Stephen Semple:

Well, and when you go into a distillery.

Dave Young:

You smell bread, yeah.

Stephen Semple:

Yes. Yes, you do.

Dave Young:

Yeah, because it’s the action of the yeast going on. It’s eating a liquid instead of a paste of dough.

Stephen Semple:

And he could have done what so many others would have done, “Here’s the level of alcohol in it.” And then, he would have lost at that moment.

Dave Young:

Yeah.

Stephen Semple:

Because their claim was, “There’s alcohol in root beer.”

Dave Young:

Yeah.

Stephen Semple:

And they go, “Well, yeah, there is. But it’s only at this level and it won’t get you… Trust me. It’s very tiny.” He would have lost that argument. His brilliance was, “The same amount as what’s in bread.”

Dave Young:

Yeah. There’s all these memes about how the United States will use anything to measure something besides the metric system, right? We will not tell you how many meters long something is. We’ll tell you that it’s the length of 60 trash cans or 190 root beer bottles, right? So, “How much alcohol is in it?” “Well, it’s got less than a teaspoon.” “Well, we’re not interested in that.” “How about comparing it to a loaf of bread?” “Oh, less than that. All right. We’ll drink it.”

Stephen Semple:

But it makes it simple, it makes it concrete, it makes it familiar.

Dave Young:

Yes.

Stephen Semple:

It’s also an unusual comparison, so it made it interesting and people would pay attention to it. What I’m saying is anytime we’ve got something where we’re trying to educate the consumer on it, about this new product, the more we can find something that is simple and concrete, the easier it is for somebody to get their head around, even if it’s not exact. Because a lot of times people go, “Well, that’s close enough that I now get the idea.”

Dave Young:

Yeah.

Stephen Semple:

And when things are complex, that becomes really important if we want somebody to embrace the thing that we’re trying to convey.

Dave Young:

And there was zero chance that the Temperance Movement was going to start lumping in baked bread on their list of…

Stephen Semple:

Right. Right, zero.

Dave Young:

Of things that they wanted to ban, right?

Stephen Semple:

Right.

Dave Young:

I’m sorry. I don’t think we can get people to stop eating bread.

Stephen Semple:

And we’re not going to, and that’s ridiculous. But it was that moment where all of a sudden it went away, the argument went away. And the other part that makes it also interesting in terms of he wasn’t arguing at them saying, “You’re wrong. There’s no alcohol in it.” They were factually correct.

Dave Young:

Yes.

Stephen Semple:

The was alcohol in it. “Yes, there is. Same amount as in baked bread.”

Dave Young:

Yeah.

Stephen Semple:

Argument over.

Dave Young:

I’m glad that it worked out for him.

Stephen Semple:

Yeah.

Dave Young:

Otherwise, I would not have had my childhood moments of getting a frosty A&W root beer mustache on my face as I drank it out of an ice cold mug the size of my head.

Stephen Semple:

It’s all thanks to Hire’s Root Beer.

Dave Young:

All delivered by a young girl and set on a tray on the window of my dad’s car as it was rolled partway down. It was an amazing experience. Yeah.

Stephen Semple:

You have Hire’s the thank for all of it.

Dave Young:

All right. Well, thank you for sharing this story, Stephen. That was fun.

Stephen Semple:

All right. 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. And if you have any questions about this or any other podcast episode, email to questions@theempirebuilderspodcast.com.