Q&A: How Preston’s little Talking Rain is taking it to Coke and Pepsi

Since 1987, (what once was) a little water company founded out in Preston has been cranking out flavored bubbly water and other beverages.

Over the years, Talking Rain became a local favorite, but struggled to overcome its reputation as a quaint local company, especially in its own backyard.

But things have changed dramatically for the company over the last few years. Its Sparkling ICE flavored waters have became a national, and even global, sensation. With President and CEO Kevin Klock at the helm, Talking Rain saw annual sales explode from $10 million a year to more than $350 million in the last four years.

Going up against the likes of Coca-Cola and Pepsi, Sparkling Ice has become the fastest growing beverage in the U.S., with sales projected to reach nearly $500 million by the end of the year.

This week the company launched a new line of Sparkling ICE Tea in test markets across the country, with a national roll-out planned for 2015.

So how did this company from rural King County become a global powerhouse in the beverage industry? MyNorthwest.com chatted with Klock this week to find out:

MyNorthwest: In 2010, you had three top executives leave the company, and got elevated to CEO. At the time, Coke and Pepsi were dominating the market with healthier drinks like Vitamin water. What did you decide the company needed to do?

Kevin Klock: We created a vision. Our vision was to be recognized as a living beverage company and creating brands that people trust and enjoy.

All those words carry a lot of meaning but what it basically came down to we went from being a company that constantly created all different kinds of brands, constantly was changing graphics, private label, co-label, and we decided to become a branded organization and we had a product called Sparkling ICE that had been successful in the Northwest and we got focused.

Once we created our new brand experience we saw organic growth and then we got some great breaks nationally. And once the numbers started showing up all the retailers wanted to have us.

MyNorthwest: You caught a lot of people off guard.

Klock: One of the defining breaks was where we finally said it’s time to define what Sparkling Ice was. And what that meant was what going to be the taste profile, what was going to be the look of it, what was the brand promise.

Once we defined what Sparkling ICE, was we could create other flavors that met that same definition and we were able to hit on kind of a trend in the industry.”

MyNorthwest: How is that different from any other company?

Klock: I think companies can become distracted, even more so today with the big global companies, with so many brands to pay attention to. It’s difficult to give that level of attention to one. I think it’s something companies forget about.

MyNorthwest: With the company still headquartered in little Preston, is that a disadvantage when you’re competing against the big dogs?

Klock: It’s both good and bad. I think it’s part of the reason why we exploded very rapidly without people catching on. It was not expected that a small little beverage company in Preston that had been around for 20 years could suddenly show up on the scene.

Today though we produce products all over the country, warehouses all over the country, and employees all over the country. So certainly what used to be a little Northwest based regional company has become somewhat a global company.

MyNorthwest: When people talk about the big Seattle area companies, it’s usually Starbucks, Microsoft, Amazon. Do you feel like a lot of people here don’t have any idea what you’ve become?

Klock: “One of the challenges we’ve had is communicating to our local regions that Sparkling Ice is actually a Talking Rain brand since 1992. So that has been a challenge for us. And so when you ask somebody about Talking Rain, most people when you ask them that, they go ‘oh that little water company.’ In fact our business cards, once we leave the Seattle-area, say Sparkling ICE and not necessarily Talking Rain.”

MyNorthwest: Does it bother you at all?

Klock: It doesn’t irritate me, it just tells me we need to do a better job of marketing in the Seattle area.

MyNorthwest: What about you personally? You have been extremely successful, yet you don’t seem to have the same kind of CEO celebrity status in Seattle that others have.

Klock: “It’s interesting, within our industry CEO’s are certainly granted a lot of attention. I think for me it’s just that I’m not around. We have got our heads down and we are busy and we’re focused. We’re up against great competition, you know two really global brands, so I think we’ve just been so focused on execution.

When you’re laying down the tracks in front of the train there’s a lot of work that needs to be done. We’ve been out in the community but it’s not one of those things we’ve put our focus on [promoting Klock.]

MyNorthwest: Coke and Pepsi spend millions on marketing every year. How do you compete?

Klock: “In 2013 we did our first big media campaign where we actually did national television ads, we had outdoor media in about 15 major markets in the country. This year we backed away on the television side we knew the competition was coming so we focused a lot more on the street.

Klock: Going into 2015 you’ll see a much larger breadth of marketing out of Talking Rain than you’ve ever seen. One of the biggest excitements is Kevin Durant, MVP of the NBA, joined our team this year. He wanted to be a part of Sparking ICE, that’s all he drinks.

Much like our competition we are going to have to have that breadth of marketing. Now we don’t have that kind of money so we are going to have to be very smart about how we do it and make sure everything that we do delivers volume.

MyNorthwest: You’ve focused almost exclusively on Sparkling ICE, but don’t you need to add more lines to compete with Coke and Pepsi in the future?

Klock: I think we’ll prove with tea that we can brand extend, and as long we don’t break the brand promise, which is fun and refreshment and great taste, we’ll continue to expand the Sparkling ICE line.

As we become a larger beverage company, it’s going to be important for us to develop other brands and who knows, maybe acquire another brand.

MyNorthwest: You got started in business sweeping floors at a shop in Wenatchee. Did you ever see yourself in the big chair running a multi-million dollar company?

Klock: I always wanted to be a CEO and went off, got a degree in chemical engineering, thought some day I’d go back for my MBA.

It’s kind of interesting. As I’ve gone through my career on the operations side, I kind of found that if you wanted to be a CEO, there’s a better chance if you’re in finance or marketing.

I kind of had not necessarily given up on that shot, but kind of put that aside for awhile, when we had a CEO, president and vice president of sales all leave within six weeks in 2010. The owners were grateful and gave me a shot to take the helm of the company.

MyNorthwest: What’s in the fridge at the Klock house?

Klock: I’m an Orange Mango fan, my wife is a Lemonade fan, my son is a Cherry Limeade fan. Then we have numerous teenagers visiting the house, so we have to keep the fridge pretty well stocked.