How Nékter Knows Its Customers With Steve Schulze, President and CEO at Nékter Juice Bar
Steve Schulze is the President and CEO of Nékter Juice Bar. Since co-founding Nékter in 2010, Steve has grown company sales to over $100 million with 180 locations in the US and another 150 in the development process. He is a leader and pioneer in the elevated juice bar experience. Steve is also a sought-after expert speaker on various topics related to the restaurant business and franchise industry.
Here’s a glimpse of what you’ll learn:
Steve Schulze explains what problem he needed to solve when he co-founded Nékter Juice Bar
The reason Nékter was chosen as the brand name
How Nékter Juice Bar grew to 180 locations across the US, with another 150 in development
Steve shares how aggressive growth through franchising nearly put Nékter out of business
What shifted for Nékter Juice Bar during the pandemic and what was learned as a result
How Nékter Juice Bar uses its app to personalize customer relationships
Steve discusses the process of learning the benefits an app could provide
The worst advice Steve has ever received
What you’ll learn in this episode:
Do you know the advantages of having an app for your business? What are some of the ways you can reap the benefits that an app can offer?
Nowadays, it's common for people to place restaurant orders using an app or through a third-party delivery service. Not only can you use an app for taking orders, but you can also communicate with and personalize your customer relationships. As an experienced restauranteur, Steve Schulze's orders at Nékter Juice Bar have more than doubled since the onset of the pandemic, allowing them to discover customers' favorite foods and beverages and encouraging them to choose new ones. How are you personalizing communication with your customers?
On this episode of From Persona to Personal, Roger Hurni welcomes Steve Schulze, Co-founder, President, and CEO of Nékter Juice Bar, for a conversation about starting a business by filling a gap, the process of growing a business, and personalizing your communication with customers. Don’t miss this informative and inspiring discussion!
Resources mentioned in this episode:
This episode’s sponsor:
Today’s episode is brought to you by Off Madison Ave. At Off Madison Ave, we create meaningful moments of brand trust and influence how people interact and engage with brands.
There is a science behind tapping into your audiences’ desires and motivation. After all, if you’re not changing your audiences’ behaviors, you can’t truly unlock all of your brand’s potential.
The proven models and methods of Behavior Design is the strategic foundation for your brands’ success.
Episode Transcript
Intro 0:02
This is From Persona to Personal podcast. Today's episode is brought to you by Off Madison Ave. Off Madison Ave creates meaningful moments of brand trust and influences how people interact and engage with brands. The science behind their approach taps into your audience's motivations and desires. After all, if you're not changing your audience's behaviors, you can't truly unlock all of your brand's potential. Now, let's get started with the show.
Roger Hurni 0:31
Hello, everyone, I am Roger Hurni, the host of this show where I get to speak with top leaders in the food and beverage space. Before we get to today's guests though this episode is brought to you by Off Madison Avenue. At Off Madison Ave, they use behavioral science to create meaningful moments of brand trust which influences how people interact and engage with companies. Their behavioral approach taps into your audience's motivation and prompts them to shift behavior. After all, if you're not changing your audience's behaviors, you can't truly unlock all of your brand's potential. These proven behavior models and methods are the strategic foundation for your brand success. Today I have with me Steve Schulze, who is the president and CEO of Nékter Juice Bar. Nékter Juice Bar has more than 180 locations across the country and another 150 in development. From what I understand. As co founder and CEO, Steve has grown the company to more than $100 million in sales and obviously, a clear leader in pioneering champion in the elevated Juice Bar experience, which is I now have found out through my research is a $2 billion industry. Prior to launching Nékter, Steve worked for consumer-based companies and various sales and marketing, and magic capacities. He is also a very sought-after expert speaker on various topics related to the restaurant, business, and franchise community. Steve, welcome to the show.
Steve Schulze 1:56
Roger, I appreciate it. Looking forward to it. Thanks for having me on.
Roger Hurni 2:00
Oh, no, it's always great. In full disclosure, it seems like they do this with quite a few guests that I get because I'm fans of their brands, just so that everybody knows I am going to your, one of your franchisees on 44th Street in Indian School in Phoenix, Arizona, like once a week for açaí berry bowls. So you know, I love the brand. So clearly the questions are going to be about, about the quality of the brand. To start, I really, I love the name, we always make sure we have that accent on the E. We're Why did you use that variation of, of Nékter?
Steve Schulze 2:41
I'd love to say that there was some great epiphany that we had, you know, nectar obviously, “Juice of the Gods”. So the name, you know, made sense to me as far as when we were searching for names. And then the phonetic spelling. When I looked at the phonetic spelling, I said if done right, you know that could in fact be our logo instead of having a separate logo. And sure enough, it's, it's become that and the upside down “e” and the accent has become very recognizable, and it worked out.
Roger Hurni 3:09
Am I the only one who butchers the name?
Steve Schulze 3:13
Nah, most people get it right.
Roger Hurni 3:17
All right, well, now that we have the easy question out of the way, let's dig into the meat of it. You founded in the, in 2010. And from what I've read, there's this promise to reinvent the restaurant category. Because there was a feeling I could have lost its way from my research, what was the opportunity that you saw that others didn’t?
Steve Schulze 3:40
But I think a lot of people that are successful in business look to solve a problem. And that's what we were doing, we're looking to solve a problem. And the problem was is the legacy brands really sold their soul and you know, they probably started off with great authenticity, but by the time they got to 2010 You know, you go to legacy brands, which I won't necessarily name but the ones that we've all heard of, you know, it's you know, Welch's apple juice and yogurt and ice cream, just I mean, you might as well have gone to a Dairy Queen, so to speak. So there really wasn't anything fundamentally healthy about going to a juice bar, although they were touting themselves as a health space. So I just thought that was wrong. And so what Alexis and I did was we wanted to go and reinvented by reinvented, we want to get rid of everything processed, we wanted to be authentic, we wanted to be approachable, we wanted to be accessible. And we wanted to be true to the consumer with transparency and so we basically came up with three categories and that was it. We had six juices which, parsley, kale, spinach, apple, and had fresh produce delivered daily. Our smoothies about six smoothies give or take. We have more now, but about six smoothies, and the only fillers in those smoothies, that we have are coconut water and house-made nut milk that we make in each and every location every day. And then our açaí bowls that we were the first juice bar in the country to introduce açaí bowls as a category in it of itself, using organic açaí. And so, you know, that's how it started was, you know, I, there was a seismic shift really and, and there has been for a long time how people view, view food. If you remember back then you had the proliferation of Whole Foods and Trader Joe's and Sprouts and all these different places. You fast forward 12 years its 12 years next week that we've been open. And you know, our mission and what we set out to do is frankly, more prevalent today than, than it was, was back then. And it's held true and the winds at our back, sales are great consumers are enjoying it, the franchisees are doing well. So we're happy with the progress we've made.
Roger Hurni 6:02
Well, first, congratulations on the, on the twelve years, that's always a milestone getting past ten. You know what actually getting past five, most of the time, it's the stat is something like 90% of businesses fail in the first five years. So once you, once you get past that marker getting to ten is great. And clearly, there's going to be another few decades in your, in your growth, I suspect. Being only 12 years old, you had what most businesses would relish in terms of rapid growth. What, what started that, what was the tipping point, basically, because you don't just start off with 100 stores, right? You. you started off probably with a handful or one or two, what led to the rapid growth to get you on the trajectory that you're on?
Steve Schulze 6:55
Yeah, it's, well, it's kinda like those people, you hear people sometimes in Hollywood or other businesses, the overnight success or things like that. And, you know, when we talk about 100 locations, or 200, it's taken a while to do it. And the way that we've done it really is through basically, aggressive but consistent growth, we didn't want to, I think far too many people grow to pass they, you know, they want to, you know, they want to get to the finish line. And for us that wasn't the case, as an example, we started with one location and two and three, as we've discussed.
And Alexis and I discussed franchising, and we were very concerned whether we didn't know anything about franchising at the time, and we didn't know whether they'd be able to carry over the brand standards, the quality of the product, how we would handle it for people that are out of state and such. And so in 2012, we decided to award six franchises, and then sit on it two years and not do a thing. And we want it was a very iterative process and the relationship, we want to see how they reacted with us how we reacted with them, make sure we made money and make sure they made money, made sure everything worked well. And, and it did. And we took 2014 to basically tighten up things. And then started really formally franchising. Fifteen is when the growth accelerated beyond the traditional growth. And I think that, you know, some mistakes that people make, I think in franchising was one of the things I don't understand, and this is sort of an annoyance that I've had, as I see a lot of franchise brands out there that have one location or two, and they have 1,000 franchises give or take 500 franchises, and one corporate location, you know, in my opinion, what's, what value are you, what is the system, you're teaching these franchisees that have paid you $35,000 are paying you 6% or 8% per month, you have one location what, what do you really know? And so for us, you know, there isn't really an issue from labor to supply chain and marketing advertising that we haven't been through. We've been through it all. So when a franchisee calls us, we have an answer. And so I've just never understood that. It's just sort of a little side note, but I've just never understood so. So we felt that we needed to have the experience we need to go through the ups we need to go through the downs. You know, we went through a cycle there in 2013 or 14 I think in which I personally wanted to grow 30 stores in the year and it almost put us out of business basically it's I spread staff too thin, I spread capital to then we recovered from it. And then then then we took growth as a you know as a step by step basis, but it wasn't growth for growth's sake it was growth in an intentional way. I mean, we could be a lot bigger than we are today. But we've resisted going to certain areas, certain states because we can feel the timing was right. And we have a lot more stores coming forward as we speak. But yeah, that's where it is today.
Roger Hurni 9:57
Well, I mean it's, it's a great combination of fast growth and yet being careful and caring about that growth, I think a lot of companies don't end up doing that you're, they end up doing growth for growth's sake, and then they try to figure out down the road, how do they get consistency. And I don't, I've never believed that all the work I've done with franchisees, that's always that's ever been a good model. So, congratulations there, the, you're 10 years into it, things are starting to go swimmingly, you hit the hockey stick trajectory that businesses love to hit, and then slammed with the pandemic, what, what shifted in the business during that time, and in what did you learn?
Steve Schulze 10:43
you know, the pandemic was interesting, the first, you know, just like everybody, when a pandemic first hit, you know, we got hit just like everybody else did. Our team, you know, we, we bared down a lot, our team got very, very close. We were, you know, looking at things daily, weekly, on Zoom, and whatever calls that we had. And it simultaneously, you know, it allows us to look at our ingredients then are menu, many we we limited some of the menu items, we re-, we had a sort of a cross-pollination of ingredients as well, where we only had say one ingredient that we had to supply for one drink, we eliminate that ingredient. So we're able to cut some costs there without sacrificing the integrity of the product. And then by the time the pandemic was, you know, not over, but by the time we got the end of ‘20, going to ‘21. Frankly, our sales were off the charts, we're now we've had 23, straight months of positive same-store sales. And so, and part of that being obviously that with a pandemic, health and wellness is top of mind. People are more interested in their health than they've ever been. I think that people that are 70 are probably eating healthier, and eating better. And in some cases better shape them when we're 50. So we have people from all generations we have, you go to your Phoenix, Scottsdale area and you go to our say our, our store down on second and central by Brophy and Zevia. There, and you'll see 20 or 30 kids in there, you know, high school kids, just, you know, just going crazy and having a great time. And then you'll see other locations, we'll see people that are more your age, my age, whatever. So I think it's a good sign of where we are today and a good sign of where the future will be for us.
Roger Hurni 12:41
I know that because you mentioned it, and I do all my work around consumer behavior. The pandemic shifted our behaviors, as you said, people, looking to be healthier. There are individual behaviors, you string them together, you do them for a longer period of time they turn into habits, which is I can see where you did end up getting sustainable growth from because those, those customers end up going to your store more regularly. Given, given those shifting consumer behaviors around food, as it, has it shifted anything with you, or you're just at that perfect crossroads of consumers wanting to be healthier, and you happen to have, you just happen to be there at the right time at the right place.
Steve Schulze 13:33
Yeah, we certainly, we were there at the right time to replace, but we also had things that were, that were necessary meaning and, you know, I think that we were smart in getting ahead of some things meaning in 2016, before really anybody in our space, had an app and online ordering, do we invested a lot of time a lot of capital to develop an app for online ordering. And so, therefore, you jump out of the shower, you can hit your order, and 10 minutes later be ready for you just pick it up, and away you go. We started out, and prior to that was the punch cards, Okay, you go to the yogurt shop, you know punch and stuff. And you know, so we started out in 2016 with about 10,000 people, loyalty guests, and online order members. And right now, I believe we're over 1.2-1. 3 million people on the app, which is just a tremendous amount of very powerful and allows us to, you know, allows the consumer not only to and the guests not only to order but allows us to message them and provide offers and insights and things of that nature quite easily and communicate with our, communicate with our guests. And it also shifted as to COVID that also shifted, you know, the ordering process, meaning that you know, pre COVID, we were saying 20% you know, 22% maybe online orders being through DSPs like Postmates, DoorDash, you know, and our own app, you know now We're over 50% and we remain there.
Roger Hurni 15:03
Over 50% on the app itself?
Steve Schulze 15:06
Either on the app or through a DSP through a third party, DSP, which then has allowed us to have smaller out our new buildouts, rather than having 1,400 feet, we can build 1,000 square feet. So it reduces our build-out cost reduces our labor and does a lot of different things.
Roger Hurni 15:22
But most, most companies, honestly, that I come across, do not understand the value behind their app. And they don't see it as that communication channel, it's, it's utilitarian, you're, you're seeing seem like you're using it in more of a full communication model, it's like it's another marketing channel, not just a convenience for the customer, but for a way to you to to manage that relationship. Are you doing any kind of personalization through that app? In either using, you know, location or POS data so that you are speaking to individuals as opposed to cohorts or mass communication?
Steve Schulze 16:10
Yes, so what we do is we take that data, and we work with a company actually, I don’t know if Starbucks owns it, I can't remember who it is. They analyze all the data that gets put into about 18 different buckets. And so somebody like yourself, for instance, prior to the conversation, I think you said that you liked the açaí berry bowl. And I have the greenie so based on the data that they have, you would get a, we might have you know how many endless different messages but it might be a message to you, for an açaí berry bowl, and a you know, protein poppers or shot of ginger or whatever, for me will be a greenie plus x. So the orders are customized based upon what the, what people are purchasing I mean, I go to Starbucks, I get an americano every time. So I don't care how many times they sell me a send me an email for say a cold brew coffee, I'm still kicking Americano. They might as well send me an Americano and say I want to get some egg bites with it. And I'm like, oh, cool, I'll try that. So we basically do the same thing and plus a variety of other things, but that's just one example.
Roger Hurni 17:21
But that's a great lesson for others in your industry because even through my consulting, people do not recognize the power of those behavioral shifts and how you can drive that down to a level of personalization. And all honesty that you can't find in any other communication channel, you're never going to find that level of personalization in social media, or general advertising in brands just don't recognize the power of a native mobile app. And how that is just this one-to-one communication tool that allows you to do a super, super deep level personalization. Did you, did you set out to do that? Or, like, how did that come about? How did you recognize the power of that app?
Steve Schulze 18:12
Just like anything else that evolved and we didn't really know what we had on our hands in 2016, and took a few years to really grasp what we could do with that data. And then going into ‘23 people will expect probably within the first quarter we'll be releasing, we're developing an updated/new app, and which will provide a lot more features that will allow more tracking of your health and possibly fitness records, I'm not exactly sure, we haven’t narrowed down exactly what it is. But things that give, our fundamental goal is that just going back to the very beginning, was that if we could get somebody go into Nekter just once, and they enjoyed the drink. And that night because they enjoyed something healthy instead of say, you know, a cheeseburger or something. And that night, they went home and they had chicken or fish or ate slightly healthier. Because they went to nectar, we feel we've done our job. And our goal is really trying to get people to eat 10% healthier and our belief is that, hey, if we get everybody just to eat 10% healthier, think about how much better society would be and healthcare, the joints, the diabetes the, everything else. And so if its nectar can be the impetus for that, yeah, that's terrific. And that's kind of the way we look at is, one guest at a time, one drink at a time, one person at a time, one store at a time, one franchisee at a time. And yeah, so that's how we attack things.
Roger Hurni 19:43
Yeah, it sounds to me like while you get somebody in for a single behavior, like trying it, you've got a system set up. Honestly, getting anyone to buy anything is actually pretty easy getting a customer for life, having them shift from behaviors to habit Is is really hard, and sounds like you've got a really great path for that amongst the growth. That being said, what kind of challenges are you facing now with that growth?
Steve Schulze 20:16
Well, you know, I'm not sure if it's, it's a matter with the growth, the growth we've we've been able to maintain and handle, I think that the ELD, the outside white noise is what's affecting everybody, it's really white noise, it's real, real noise in the sense of, you know, we've been inflationary pressures, obviously, we've had supply chain issues, you know, cost of goods, you know, we've got a product that you can't just endlessly, you know, people aren't gonna pay 15 bucks for a cup of coffee or 15 bucks for a smoothie. And the way these some of these prices are going, you've got to find ways to save money. So, therefore, you have to be innovative and, you know, in your operations, and so that challenge, you know, for us and for the franchise by and a soft labor market. You know, obviously the, you know, it's been, it's hard to get people to go to work for you, you know, it doesn't matter what business it is, but it's hard to hire people. And I would say even right now, we're probably 70% capacity where we really want to be, and that's based solely on money on the aspect of not being able to hire enough qualified people.
Roger Hurni 21:22
Yeah, I know, that's a challenge with so many businesses that just getting, getting people in the door to be your employees has been a challenge for a lot of companies. What, what gets you excited now, like, what's, what's happening now in the business that really, you'd love to tackle every day?
Steve Schulze 21:44
You know, the I, I've always been my background has always been, my background has always been marketing. And so I always do, and the reason I've like marketing is because it never, you don't like take out one ad or one message and you stop, it's you got to have a ne-, new message the next day, the next week, next month, next year. And for Nékter, what the challenge is, what does next, what does Nékter 2.0 look like? We were going to introduce Nékter 2.0 and 2020, but due to the pandemic, we didn't simply because it wasn't the right time. So we'll be introducing Nékter 2 point, 2.0 throughout 2023. And our, and our belief was that we needed to reinvent ourselves within that space, a lot of copycats came along, not that any of them impacted a whole lot. But they came along, I think that the legacy juice bars, I'm trying to follow what we did, but then went back to, you know, offering things that just aren't fundamentally healthy. And we think that there's opportunities within our space that, that should be available to be made to the consumer. And so we spent about the last year doing a tremendous amount of research working with outside consulting companies doing deep dives into consumer guest analysis. And so you'll see which I can't really go into the details of it, but you'll see Nékter 2.0 Is it rolls into ‘23. So that's what I get excited about. I get excited about that, I get excited about being with franchise partners meeting, talking to them and it just charges me up each day.
Roger Hurni 23:22
Yeah, that sounds great. You, you have a wonderful business model. And I, I love the approach that you've taken. I think there's a lot of learnings for people listening to the show. You can consider that all great advice. So a few shows ago someone in a conversation, we were talking about advice because you've given so much good advice. People often can learn from bad advice. So my question on this wrap-up is, what's the worst advice you've had ever gotten? Doesn't even have to be in business.
Steve Schulze 24:01
What is the worst advice I've ever got? Okay, what the worst advice I've ever gotten, as it relates to Nékter was from a friend/consultant who was a little bit involved in the company, and he came from a conservative CPA background and we had three locations. And he felt that we need to have enough money in the bank to build three, three locations, which was a million dollars before he would open a single other location. And, you know, we just couldn't have grown we couldn't have evolved. I just didn't understand that, you know, that, that we couldn't evolve as a brand and figure out a way to grow rather than just be stunted in our growth, I think that you know, there's tons of other bad advice because I you know, I think one of the problems with bad advice is that, is that you know, whether it's your idea or my idea or anybody listening, know quite frankly what to do, is they look for validation as to friends or family, whatever, and quite frequently, 90% of the time it's a negative response. So, you know, and unfortunately, too many people listen to that white noise. And so if you can go to good advice, the good advice is, don't listen to the white noise. Stick to your principles, stick to your ideas. Move forward. Don't pay attention to those naysayers. And frankly, if you want to tell them great, you don’t want to tell them, I don't really care one way or another, but too many people I think, looking for validation. And all of a sudden they get a couple of no’s and think I guess I won't do it. You know, whatever the business may be.
Roger Hurni 25:36
I like it. You turned my question into a positive piece of advice, but good job. All right. Well, I have been speaking with Steve Schulze, the CEO, and co-founder of Nékter Juice Bar. Steve, where can people learn more about you and Nékter?
Steve Schulze 25:54
Nékter Juice Bar obviously we've got a website and an app, nekterjuicebar.com, n-e-k-t-e-r and then I have an Instagram, Steve_Schulze_official. And we'll see, we'll start posting a lot more material there coming up in short order. And then, you know, obviously, we have our Instagram account that stays very active and reels and things like that.
Roger Hurni 26:20
Wonderful, wonderful, and I'm looking forward to Nékter 2.0. And again, thank you very much for being on the show. I'm Roger Hurni, this is From Persona to Personal and subscribe in you will catch great interviews like this every single week. Thank you again, Steve.
Steve Schulze 26:40
Hey Roger, really appreciate it thank you.
Outro 26:43
Thanks for listening to From Persona to Personal, the podcast that takes a closer look into how organizations personalize their marketing. We'll see you again next time and be sure to click Subscribe to get future episodes.
