HOW TO GET A HEAD ON AN APPLE

There was this new apple drink that foams like beer, and these two whiz-kid entrepreneurs, so green they didn’t know their idea couldn’t work. So what did they do? Cracked the tough soft-drink market wide open, that’s what

January 1 1969

HOW TO GET A HEAD ON AN APPLE

There was this new apple drink that foams like beer, and these two whiz-kid entrepreneurs, so green they didn’t know their idea couldn’t work. So what did they do? Cracked the tough soft-drink market wide open, that’s what

January 1 1969

HOW TO GET A HEAD ON AN APPLE

There was this new apple drink that foams like beer, and these two whiz-kid entrepreneurs, so green they didn’t know their idea couldn’t work. So what did they do? Cracked the tough soft-drink market wide open, that’s what

NATURALLY, everybody capable of munching on an English pun has heard about Apple Corps — the international RAND-type corporation formed by The Beatles to exploit the inventive genius of under-30-year-olds. But so far only a few amazed marketing men and about 10,000 thirsty teenagers have heard of an equally imaginative company called Apple Brau (rhymes with “dapple cow”) Toronto Limited, recently formed by two under25-year-olds.

“Since we launched Apple Brau on the Ontario market in mid-June, we’ve been selling about 5,000 cases a month and repeat orders are flowing in,” says Raymond Aaron, the 24-year-old vicepresident of the company.

So what is Apple Brau already? It’s a fizzy, amber-colored soft drink that develops a whopping head just like beer. Even the cans it comes in are designed to suggest the contents were produced by a Munich brewery (Bräu is German for “brew”). But the only alcohol involved is in the mind and the taste is pure apple. “There are 2,000,715 apple cores in each swell glass of Apple Brau,” runs one of the far-out radio commercials used to promote the drink.

Presumably, the remarkable demand for Apple Brau, which was invented by a Denver, Colorado, soft-drink bottler, has something to do with its crisp new taste. However, experts in the marketing field are more inclined to attribute the drink’s success in Canada to the exuberance and drive of Aaron and his associate, Jon Elliott, the company’s 21-yearold president. This fresh-faced team of entrepreneurs have pulled off something considered impossible. Starting with no organization, no distribution system, no research facilities and absolutely no idea of what a cash-flow analysis meant, they took an unknown product and cracked the tough, tooth-and-nail soft-drink market wide open.

The Elliott-Aaron partnership is like a Yin-Yang symbol, a harmony of opposites. Elliott, tall, fair-haired and with a quippy, quick-silver mind, is the man with the wild ideas. He left school after grade 12 and by 19 had his own mer-

chandising company in the direct-sales cosmetic business. It grossed more than $65,000 in its first year. At 20 he became marketing manager for an American franchising firm and traveled around the continent drumming up new business, setting up sales offices and training personnel.

Aaron is short, dark, meticulous and academic-minded. He entered the University of Toronto on a scholarship at 17, and graduated with honors in maths, physics and chemistry. After graduation he wrote a university textbook on calculus and published it himself. It was made compulsory for some 600 firstyear students before he had finished the last chapter. Later he helped to write Ontario’s new college-entrance exam in mathematics and almost incidentally picked up a government scholarship to study computer sciences for his doctorate. But he never took up the scholarship: the business world held more attractions. He went into cosmetic merchandising and that’s where he met Elliott.

Their brainwave about Apple Brau came after a college friend told them it was the sock-it-to-me drink all over Utah. Figuring that Canada was an apple-conscious country that might go for it, too, the pair flew down to Denver and came back with the Ontario franchise and firstrefusal rights for the rest of Canada. Then the whiz kids ran into their first blank wall. Almost everybody in Toronto connected with the soft-drink trade advised them to get lost or forget it. As the boys tell it in their Bob-and-Ray style:

ELLIOTT: “The president of one bottling company said we’d probably sell 5,000 cases over a period of months and close our doors. Another man at a canning company said we might move 6,000 cases in a year.

AARON: “And die.”

ELLIOTT: “Or wither into a Coke

bottle. Nobody wanted us to muscle in.”

Eventually, they found a fatherly friend at Crush International and Crush got the contract to manufacture Apple Brau from a concentrate imported from Denver. The next break was a firm com-

mitment from a chain of 170 jug-milk stores to buy the product as soon as it became available. All they needed now was money — about $50,000 — and for six months they made the rounds of backers. The reception was always the same: “As soon as we came to the question of what percentage the backer wanted, they would come out with 75 percent or 80 percent or 51 percent. And since we had no desire to become puppets . . .”

Finally, they heard about Charterhouse, a Toronto venture-capital firm that normally lends amounts of more than $100,000 to well-established firms. But the people at Charterhouse liked the boys’ style and asked to see their prospectus — adding that of course it would show a cash-flow analysis and things like that. Of course.

AARON: “We didn’t know what those things were. But we stayed up all one weekend getting pointers from our friends, typed up the thing Sunday night and took it in to them on Monday morning.”

ELLIOTT: “We sprayed artificial dust on it.”

Charterhouse went for the idea, took some shares, but left control of the company with the two principals. Apple Brau went into production two months later. The next step was to create a demand. The partners spent $8,000 on radio commercials, but it wasn’t until September’s National Supermarket Show — at which Apple Brau gave away more free samples than Coke and Crush combined — that they made any impact on palates. By the end of the show Elliott and Aaron had lined up five more Ontario wholesalers, had taken up their option on the Quebec franchise and were making plans to market the drink in western Canada (where it will probably be known as Apple Dew).

How rosy is Apple Brau’s future? Well the partners are now toying with the idea of manufacturing the flavor concentrate themselves in Canada, and they have registered the trade name for a new low-calorie apple drink. It will be called Low Brau. What else? □