One Man’s Trashed Mash is Another Man’s Cash

This transcript was generated from the episode audio and may contain minor errors.

[Music]

Dun, dun, dun. Welcome back to Side Hustle School. My name is Chris Guillebeau. Now, listen up, today's story begins with two college freshmen on a quest to change the world. Or actually, that's not quite right.

It is more like a quest to get around the legal drinking age. Okay, well, that is, of course, a time-honored tradition for young college students everywhere. Now, interestingly, they not only achieve that goal, which would not be a great success story on its own, pretty typical. They also go on to start a profitable side hustle that turns into a profitable business with a true life-changing mission to increase sustainability in the world of beer brewing. They do this by finding a way for the spent grain products that are used in the making of beer and then often discarded by breweries because they don't know what else to do with it.

So as with a lot of things in life, the early vision is not necessarily super clean or pure or even strategic, but then as they go along and make discoveries and experiment, it does turn into something much, much more than they ever imagined. Stay tuned. Here's a quick thank you to our sponsor, and then I'll bring you this frothy, hoppy, and intoxicating success story. [Music]

When UCLA freshmen Dan Kurzrock and Jordan Schwartz started brewing beer in the comfort of their frat house, they weren't planning on it leading to a side hustle. They were just trying to not get arrested, but like the great foamy head of a freshly tapped keg, a money-making idea began to rise to the surface.

Although both were on the fast track to earning their degrees in economics, they also had a keen interest in sustainability and environmentally friendly practices, which meant that the brewing process posed a moral dilemma that had nothing to do with their underage drinking. Each five gallon batch of beer they brewed was generating roughly 15 to 20 pounds of grain waste. The technical term for this byproduct is spent grain because it's no longer capable of producing beer once it's been used. With a little digging, Dan and Jordan learned just how nutritious this spent grain really was. All of the sugar had gone into their favorite beverage, leaving behind an abundance of protein, fiber, and micronutrients.

That's when something else started to brew, that money-making idea. They began to brainstorm different ways of using the grains so they weren't ditching it in the dumpster each night. Since beer is essentially bread in liquid form, it seemed only natural that they would try to use it to bake bread. Maybe they could even find a way to sell it to their peers and fund even more brewing. With a little experimentation, they landed on a recipe, and soon they were selling roughly 20 loaves a week, more than enough to keep them swimming in the brew that began at all.

But although bread seemed like a natural application for this spent grain, Dan and Jordan quickly realized that they didn't wanna be a bread company. It was far too labor intensive for their school schedule, and it wasn't something they could easily scale. Since bread wasn't gonna be their long-term plan, Dan and Jordan had been experimenting with a granola bar recipe. A boom in the craft brewing industry had led to a surplus of grain, and the breweries were practically giving the stuff away. Since nobody else seemed eager to get their hands dirty, Dan and Jordan had decided to glove up.

But first, they needed a name, and since they were essentially giving this grain new life, they called it regrained. Now, by this point in our story, a couple years have gone by. Lots of beer had been consumed, classes had been taken, exams passed, and both Dan and Jordan had graduated six months early and began careers. Dan is a sales manager for a tech startup and Jordan managing a string of food businesses in the Bay Area. But on the weekends, you could find them baking up a hoppy storm thanks to the passage of a California cottage law legislation that made it all possible, or at least made it all legal.

Not that that was a problem when they first started, but I digress. Each weekend was a delicious opportunity to bake up a batch of bars and get feedback from friends and family. Too sweet, not chewy enough, add more cinnamon. All opinions were taken into account and helped them tweak their recipes until they were sure they had some real breadwinners. Most popular options were a honey cinnamon IPA bar and a chocolate coffee stout bar.

Once they finally felt they had the kinks worked out, they began to reach out to local shops and co-ops. Dan said if you're persistent, it's easy to get in touch with food buyers, and a lot of them were eager to give a chance to sustainable companies like regrained. But of course, a chance does not guarantee success, especially when you're competing against dozens of other new bar companies. In fact, some aisles of grocery stores these days look like the great wall of bars. So in other words, you might be able to get in, but you really need to sell it yourself.

So Dan and Jordan did demos. They hustled, trying to get everybody they could to try it. They felt if they could get people to try it, the product would then speak for itself. Now, since their brand was centered around the fact that this was a beer-borne granola product that encourages you to eat your beer, one of their first large-scale customers was called Mancrates, a gift box company that packs their boxes full of the manliest products around. Naturally, a granola bar created from one of men's favorite beverages fit right in.

Suddenly, they went from a handful of stores, stocking a few dozen bars at a time, to this pretty substantial company purchasing hundreds to add to their subscription boxes. They tried to find more opportunities like that and played on the whole eat your beer novelty concept. They knew that they didn't wanna be a novelty product long-term, but they figured this could be a way to get their foot in the door and generate some revenue early on. Dan and Jordan didn't spend a dime on advertising or marketing. Their unique and innovative concept that they created opened them up to a multitude of opportunities, including being featured by the Washington Post, Forbes, and Fast Company, among others.

And of course, side hustle school, let's not forget. They ended up having to upgrade their operations to a commercial kitchen, and eventually, both Dan and Jordan hung up their aprons after a successful crowdfunding campaign through Barnraiser. Barnraiser is the Kickstarter of food and healthy living, and the $30,000 they raised helped them upgrade their recipes and packaging. What started as an operation pumping out a couple dozen granola bars at a time turned into one that was churning out thousands, and then tens of thousands. These days, regrained is close to having their products in a thousand stores all over the US.

And as always, remember, although they're a substantial business now, regrained comes from humble beginnings. Their base product of spent grain was essentially free, so it's a $0 startup, or at least a very low-cost one, because all they had to spend money on in the beginning was pantry essentials to help them make their bars, the honey, the cinnamon, the quinoa, et cetera. Over time, they would spend a few hundred bucks here and there to improve their operations, but for the most part, it was self-sustaining, and they didn't rely on it for money since they both had day jobs. Even though they are able to rely on it to provide good incomes now, they say that if you're looking to break into the food industry, a side hustle is absolutely the best way to do it, and that's what we've heard from many other features as well. In their case, they didn't set out to change the world or the way we look at food waste.

They were just two college friends looking for a loophole and who decided to take action when faced with an idea. Or, as Dan puts it, when life gave them beer, they made bread. [Music]

Awesome, congratulations to Dan and Jordan. The power of storytelling is so important in building a brand, especially in a competitive industry, such as the nutrition bar industry. We've looked at that a couple times recently, and you really have to do something unique to stand out.

You have to have a great product, but also, ideally, you need to have a great story as well. And to have a two-word phrase that encapsulates your business, which is what they have, eat beer. It's also something that, there are t-shirts for it, hats. It's the kind of thing that's very catchy and people talk about it. That is ideal.

However, as mentioned in the episode, a good story and a good catchphrase is important for getting you in the door, but then you really need to have a great product. I was looking back on an episode we did quite a while ago about these guys who create these paleo bars. And this was, let me check and see which episode that was. Yeah, that was episode 219 about two friends who start a $25,000 a month paleo bar business, which also is, of course, a side hustle and eventually it becomes their full-time thing. But they also started on the cheap and they're very frugal and they make 100 different iterations of their product before they actually put it out to market.

So again, you have to just really dedicate yourself to this if that's your thing. So fortunately, these guys have been able to do it too and are quite successful. I don't know if I have seen their bars before myself, but now I will be on the lookout. They also have an interesting equity crowdfunding model, which I didn't talk about in the episode. I just noticed it on their website now when I was looking.

So equity crowdfunding is a bit different than your typical Kickstarter or Indiegogo. In this case, it is done through Indiegogo, but instead of just paying some money and maybe getting a reward, with equity crowdfunding, you're actually buying into the company. So it's a way to become a shareholder without necessarily buying stock, but contributing in a different way. So I thought that was interesting and we'll link that up in the show notes for those who are curious to learn more. Well, listeners, I hope you're having a good day wherever you are in the world.

Don't forget, inspiration is good, but inspiration with action is so much better. Those aforementioned show notes will be at sidehustleschool.com/606. That is for episode 606. We're just rolling along here, so much more is coming up. Also, I have a promotion, some notes from our production team, free beer promotion.

So you can get some free beer, but the promotion is only valid tomorrow. So when you come back tomorrow, I think that promotion will still be valid just for tomorrow, the next day. Thank you for listening, as always. I hope you'll continue to join us. My name is Chris Guillebeau, and this is Side Hustle School.