Twin sisters Joyce and Raissa de Haas have always had an interest in beverages, earning the nickname the Tonic Twins while they were growing up in the Netherlands. After writing an award-winning dissertation, they were granted a head start in creating their drink business, Double Dutch, right out of graduate school. Now some of the youngest entrepreneurs in their industry, they are bringing vibrance and innovation to the world of mixers and tonic waters. Starting a business so young comes with some unique challenges – listen as they discuss the evolution of their business plan and how they overcame these challenges together.
Sam [00:00:07] Our guests today were destined to start a beverage brand, given their childhood nickname, the Tonic Twins.
After studying tech entrepreneurship in the U.K. with a Prize-Winning dissertation on the business concept that ultimately became their company, twin sisters Joyce and Raissa started Double Dutch in 2015. Revenues have doubled every year, and now Double Dutch is in 25 countries and soon to launch in the US. Joyce and Raissa, it’s a pleasure to have you with us on the show today.
Joyce [00:01:03] Thank you. Thank you for having us.
Sam [00:01:05] So let’s start at the very beginning. The two of you are among the youngest entrepreneurs, particularly so in the drink space. Tell us a little bit about your journey.
Raissa [00:01:19] We always kind of had a really big passion for spirits growing up in the Netherlands. So we knew all the local distilleries there, but we didn’t really like the mixer’s iconic waters on the markets.
So when we were students, we always used to make our own tonic and own soft drinks for friends and families. And we experimented with different types of flavors. And we were known as the tonic twins. And then we decided to move to London from the Netherlands about six, seven years ago to study a second Master’s in tech entrepreneurship. And it was the year, basically, that we devoted ourselves to doing more research in the food and beverage industry. And we wrote my dissertation about a new type of tonic water, Double Dutch. So when we graduated, we won an award for best business plan with our dissertation and our university gave us our initial investment to produce our first batch. And we got a first year of free office space and some other stuff. And that really kind of gave us the validation to start Double Dutch.
Sam [00:02:20] That’s amazing. And I love the name, by the way, the nickname The Tonic Tonics Twins. It’s almost like you were both predestined to do this. So it’s fabulous.
When you left the Netherlands to come to the U.K., you would come from different academic backgrounds. You both had this interest in technology, entrepreneurship. Talk a little bit about how you’ve woven technology into the company and into the set of products that you make and sell at Double Dutch.
Joyce [00:02:58] Well, I think for us, definitely the most in technology entrepreneurship helped us a lot to study like entrepreneurship and business plan and valuations and that side of the business. But the technology really helped us to find new ways of research and development and how to hold production of our mixes could be more innovative than other mixers in the market. So in the end, all our recipes are based on molecule pairings. So what we basically do is we look at ingredients morphing from a molecular aspect.
So, for example, pomegranate and basil, both of them have at least eight keys in mass. And then we make our recipes with double flavors that at least share five. The key I will make fit in with each other. And that really makes flavors that are really well within each other but are easier to mix with a third ingredient, which is a spirit for us.
Raissa [00:03:53] What helps is what I think was the best thing about our course was definitely the entrepreneurship part. I think the technology part helped us be more specific. But I think what was really great about that is that they helped this form the model.
Joyce [00:04:08] Starting your own business from setting up literally just that kind of legal aspect up to doing your marketing brand plan, how to build a brand, but also raising investment. And I think that really helped us a lot.
Sam [00:04:24] And did the two of you always know that you wanted to go off and become entrepreneurs? Was it also sort of always your intention to work together? It’s not often that siblings end up working together professionally.
Raissa [00:04:37] We always knew or we always said to each other that we would start a business eventually. But the two of us. But I’d say it definitely happened much sooner than we expected it would be. When we graduate, it’s when I did finance and I did economics. I started working in corporate banking for a little while and I went into private equity.
Joyce [00:04:59] I think we initially always thought that we would just go and have like our own careers and then eventually let’s get our jobs and go and have our own business together. But we never thought that we would do it that early on and do it straight off to university.
Sam [00:05:16] So was sort of a happy coincidence in a sense, and partly the value of the program that you guys both did in the U.K. that really got you launched. You know, coming straight out of the Masters program.
Raissa [00:05:28] Yes, exactly. It was more of a coincidence that I think the validation from UCL and our university gave us our initial funding. We just thought, let’s try it, fly it, see how it goes. And then it just really took off.
Sam [00:05:42] That’s fab. So you created this plan. You got a lot of feedback and validation from within University College. What did you do to test your idea? Test your product? And how did you start to find your first customers?
Joyce [00:06:03] I think for us, we launched really quickly.
Raissa [00:06:08] We decided to launch some of this Miskito. We launched with a product which we knew that our branding wasn’t really finished. Our labels weren’t really where we wanted to be. Our recipes were almost finished, but not really exactly where we wanted it to be. But we kind of basically needed to launch because London is that expensive and we just needed to start getting some kind of revenue or income. So we were forced to launch quite early on. And I think that really helped us going out to customers, getting proper customer feedback. And along the way, we created a product and our branding and our kind of marketing and everything around it to what consumers and customers were really looking for rather than if we would have waited. I’m kind of a perfectionist and it might have taken us at least another six months that we would have finalized the concept to vote how we thought it would be perfect, but then we wouldn’t have taken into consideration proper customer feedback and customers that were already big for the products. I think that really helps this. That’s our idea. And then just be super open to changing everything about it.
Joyce [00:07:19] Basically.
Sam [00:07:21] It’s funny, you know, I hear entrepreneurs say this so often that I think everything about our education and the training that we get from particularly working in larger companies is to sort of aim for the perfect plan before you get out and launch. And the reality is that perfection is often the enemy of sort of good enough. You know, I think you guys got out there six months earlier than you might have wanted or been comfortable, but it allowed you to start gathering some feedback immediately and then sort of iterating on making your product and packaging better.
Raissa [00:08:01] Yeah, for sure. And I think on the one hand, because we didn’t really put that much time and investment money wise into, for example, packaging, we also weren’t that attached to it. We were super open to listen to the feedback and implemented it as much as possible. But also on the other hand, I think our customers felt super valued and really recognized because we had like fifteen bartenders. We also asked all of them: What do you think about the liquid? And then we have 10 other people, potential customers that we also asked if they would list Double Dutch as a favourite drink. How would you really want to have our labels look like? And I think they really thought that was super nice from a different aspect where they can have like proper feedback and initiative into an impact into our business.
Sam [00:08:50] Valuable. Really valuable to you sort of partnered with a lot of these initial stakeholders and made them feel very invested in the process.
Raissa [00:09:00] Yeah, for sure. And I think we still do that. Now, if we launch, for example, a new flavor, we always start with about 40000 bottles and then we try with our current customers. We see what their feedback is. They get to be the first to try it. And I think it just helps to get a community like us. It’s kind of a small community where people feel valued. And I think that’s like a nice thing that smaller firms can do compared to like bigger firms.
Joyce [00:09:33] Very true.
Sam [00:09:34] So you land your initial customers, you’ve created this really great feedback mechanism and the product is doing well.
What were a couple of the things that you did to then begin to scale the business, more customers, you know, kind of greater order volumes. How did you think about that?
Raissa [00:09:56] I think for us, it was definitely kind of identifying where we had the best successes, which was kind of in a really small area in London, in a particular type of outlet, which was quite high end, but with no reasonable price point in the central parts of London.
Joyce [00:10:15] And in more, everyone’s gone off to the countryside. So we focused on getting more traction in a smaller, dense area. So there’s that, I think.
Raissa [00:10:27] Some people thought that we were bigger than we were just because we had good traction in a really small geographic area. So it looked like we had lots of customers. But in reality, we didn’t really have so many.
Joyce [00:10:40] I think that definitely helped.
Raissa [00:10:41] And then we needed to get economies of scale in our production side. So we started exporting quite early on. And just try to get customers’ blogs to get our production up and find the right production plans to work with us.
Joyce [00:10:58] We are quite low as an asset light business. So we work with third party manufacturers so we don’t have to invest, necessarily get the price of homes into the investment production plant. So that made it slightly easier.
Raissa [00:11:15] Yeah, I think from identifying our first customer, it was more about expanding the type of customers in terms of where we first went from were like independent looks, we were splitting them into smaller pub groups that had like eight to 12. And then slowly went into LEKS medium sized hospitality clubs that have maybe 30 restaurants on our ahead guarder and really expanded from there. We’ve always been super clear and focused on the entree to very much business-to-business. Our consumers for the first three years will always feature restaurants, hotels and just expand our customer base within that segment. And then after two years, we went into retail and then travel and airlines and expanded from there and then geographically went from one country to two countries and then think of countries that expanded from there.
Sam [00:12:12] So as you look back, did everything sort of go according to plan or were there maybe a couple of assumptions that you had made or or things that you had put into your business plan that then you had to subsequently revise or pivot away from?
Joyce [00:12:31] I think almost nothing.
Raissa [00:12:37] One of the big things in the beginning was that we thought that our business was based upon the fact that we would supply better bars and restaurants and hotels directly. But we soon decided that we needed to have a distributor or a wholesaler in between because otherwise it’s so difficult to scale. So we didn’t calculate that into our pricing and our margins in the beginning, which made it really difficult to change the pricing.
Joyce [00:13:08] But it kind of helped in the end. And I think in the end that was by far the best decision. I think our price point, what I said has changed over the years. We initially really launched it super expensive, like a 30, 35 percent premium of our main competitor or benchmarking the market back then. And we needed to become more price competitive to our competitors over a couple of years, but I think that’s also a natural cycle. And I think it’s cute that we started small because it gave us more room to get wholesalers on boards and more distributors on boards.
Sam [00:13:46] That’s a great segue into ‘Who do you feel is your competition?’ And how do you differentiate yourselves from them? And, you know, kind of who do you see and come across most often in the marketplace?
Raissa [00:14:04] I think that the tonic water category is definitely growing a lot over the past year. And I think we’ve got a lot of competition, both in the tonic water and mixer category, but also soft drinks brands we basically see as our competition as well. But I think in general, I think increased competition gives better choice and better quality in the market and kind of drives quality up. So I do think that the increased offering in our category has definitely helped go to get angry as well. So I think it’s definitely getting for us our main USP on what we focus on compared to competitors is that we are focused very much on flavor innovation. So we use flavors like cucumber and watermelon, pomegranate and basil…flavors that no other mixer or tonic water offers. Our recipes are based on molecules Bering’s to develop our recipe. So we look at it more from a technical point of view. We don’t use quinine in our mixers, so we are to order tonic water, not using that really bitter aftertaste. And the reason for that is because we compared ourselves to most of our competitors. They focus very much on the gin high while we go a lot on the effect of making cocktails really easy at home. It’s better for bars and restaurants to make cocktails really easy without needing staff training. So increasing margins for them. So I think that’s kind of our key UPS. And then as a company, we find it super important that we’re low in calories and low in sugars. We’re working to become carbon neutral, which I’m really excited about. And I think that definitely the whole sustainability move is definitely a really important thing for us moving forward.
Sam [00:15:52] I mean, this is such a rising trend, right? Consumers buying brands that they view as putting sustainability into their brands as a core value. So it’s such an essential. Other brands that you admire. Between the two of you, are there brands that you look around at and think, gosh, these guys have done something really well?
Joyce [00:16:18] There are so many, so many, I think, in the food and beverage industry to, for example, have here in the UK hip and nuts. It’s peanut butter, but they made it completely organic and really healthy. And we saw the Food Dinner Awards and Richard Branson together with her. Back in 2015. So we’ve seen her grow. I think she has done amazing. Really opened up a new category.
Raissa [00:16:44] I think Sead Lip Nonalcoholic Spirit is an amazing completely open the new category as well. Blue Dog in the coffee beer industry took over that category massively forward, I think.
Joyce [00:16:57] But there’s so many I think, for example, in Melati Soul House, they’ve opened up a whole new category in hospitality, which I think has been amazing. Heineken, which is a really old company. If they still stand for amazing values there, like 50 percent of their board is female. I think so many brands and companies are doing exactly what they should be doing, big or small, especially in our industry.
Sam [00:17:25] So I have to ask, how is it working together?
Raissa [00:17:30] I think it’s actually really great because I think with us, because we know each other so well, obviously. But also there’s never like tiptoeing. And I think what the great thing about us is that it’s super efficient to work together because we say what we want to say. You never need to think like all this comes across maybe too direct. You never need to think about how you’re gonna say things. And I think the great thing with us, too, is that our long term vision is really similar, but our short term is quite different. So we do really discuss a lot and have different opinions. And I think that’s only really helping the business forwards.
Joyce [00:18:15] How do you resolve disagreements between the two of you?
Raissa [00:18:19] I’m eleven minutes older, so I always win.
Joyce [00:18:27] We’ve got a great team that we can rely on and they can help us a lot. I think it’s mostly our team.
Sam [00:18:37] The team ends up becoming the tiebreaker. And do you do live together as well or do you live separately? Because that must be hard otherwise?
Raissa [00:18:48] No, we’re living separately. I mean, temporarily or just for a few months living together. But normally, we’ve lived separately for the past eight years.
Sam [00:18:58] Got it. And you know, the Coronavirus pandemic has affected so many businesses that we talk to all the time. What would you say the biggest impact has been of the crisis for you?
Joyce [00:19:14] I think so for us normally, our business, about 75 percent goes to bars, restaurants, that has obviously completely gone into lockdown. So we’ve seen it shut down literally from day one. But I think the other side or the upside of it, a silver lining, is that we have seen our retail and our online sales go up by 500 percent in the last couple of weeks. And I think the fact that we had such a good team and a smaller company.
Raissa [00:19:44] So we were able to give it quite quickly in a couple of days to focus much more on online sales. We launched our own Web shop last Monday, and it’s now just really focusing online. Digital social media is becoming more and more important.
Sam [00:20:00] Are you starting to go direct-to-consumer as well as a result?
Joyce [00:20:04] Yes.
Raissa [00:20:04] So we didn’t go direct-to-consumer before the crisis, but we are doing direct to consumer ads moments from now on.
Sam [00:20:15] Are you finding it sort of a radically different model or discipline? I mean, in so many ways, going direct-to consumer is so different from B2B.
Joyce [00:20:25] Yeah, I think it’s definitely very different. We’ve only been doing it for a week now. So ask me again in a few days. It’s still OK. I think we’ve got quite a good loyal following, so that’s helping.
Raissa [00:20:43] But we definitely need to see how it’s going in the next few weeks, months.
Sam [00:20:48] Here’s an interesting piece of data. Europe has the lowest female involvement in early stage entrepreneurial activity of every analyzed region at six percent and the lowest gender parity.
Do you both feel I mean, it’s relatively rare, right, to have a company in your space in beverages started by two women. Do you ever feel that? Do you feel that you’re sort of unusual in that regard or it doesn’t come up?
Joyce [00:21:25] No, I think it’s definitely a male dominated industry. And of course, there’s some kind of challenges with it. But I do really believe in having a positive outlook to these kinds of things that I think if you look at it from a positive point of view, it will become something more to the advantage.
Raissa [00:21:47] And I think that we stand out. It’s more than just another guy on the street, and I think it’s more memorable.
Joyce [00:21:56] I think our story is slightly more relevant, maybe more recognizable.
Raissa [00:22:04] So I think in the end, there’s definitely challenges by being a woman in a male dominated industry. But I think probably the benefits outweigh the negatives.
Sam [00:22:15] Yeah, for sure. Here’s another fact you need to know. Female founded digital startups outperform male founded ones. They do 63 percent better. But investors are still more likely to invest in male founded companies. Thanks to the Global Entrepreneurship Monitor and Forbes for the data cited in today’s show, Deusen Ricer. We love your products and hearing about your collaboration building Double Dutch together. Thank you so much for being here with us on the show today.
Joyce [00:22:46] Thank you very much for having us. I can’t wait to start the launch in the U.S.