Mike Tierney - Staff.
Sunday, April 16, 2006

 

 

Friends figured he'd lost his mind. Colleagues flashed him that you're wack look. 

 

Hussein Warmack forsook a mid-management job at Coca-Cola --- hefty salary, stimulating travel, hanging with celebrities --- to hatch a beverage company whose launch nearly plunged him into personal bankruptcy. 

 

Which brings Warmack, on a cloud-spitting Saturday, to a sidewalk outside the south Decatur Wayfield Foods store. Perched behind a table lined with plastic bottles of NuSouth, his fruity, lemonade-based libation. 

 

Warmack and aides coax shoppers to stop and sip. He immerses a hand in a high-rise cooler of ice, digs out their preferred flavor, offers it whole or pours mini-samples. And listens. 

 

"Delicious."

"Very good."

"Nice, refreshing taste."

 

Nelkisa Duffy takes a swig of the azure stuff and advises her friend, Ayanna Dowdy, "That blue one is the bomb." 

 

So, everyone thumbs-up NuSouth. So what? This could be the nectar of the gods, and it may never get sufficient exposure to slake America 's thirst. 

 

Warmack knows it. "The failure rate [for drink makers] is astronomical," he says. 

 

One hurdle tall enough to block out the sun is Warmack's previous employer. Coke, along with Pepsi and Cadbury Schweppes, are the beverage bullies whose wares dominate shelves. Some stores may charge a company rent for the space. Even those who don't are hesitant to reduce their supply of established goods from loyal clients and create vacancies for unproven start-ups. 

 

Dating to his youth as a door-to-door candy peddler in Detroit , when he "bought" territorial age-group rights from a schoolmate salesman who controlled the kindergarten-through-fifth-grade segment, Warmack, 35, aspired to own a business. And play in the National Football League. The guy dreamed large. 

 

While working out of the soft drink fortress on North Avenue , Warmack soaked up ideas like a sponge wiping a spilled soda. "When the checklist was complete," he says, "it was time to go." 

 

Skip out on Coke, where he got to groove with athletes and musicians while overseeing a multimillion-dollar marketing budget? He distills all of the reactions from acquaintances into one: "People cut off their right arm to work there, and you're leaving?" 

 

"But," he says, "I wasn't afraid. I had the best training in the world." 

 

Idea is the thing 

 

A few feisty independents have squeezed out a small patch of the whistle-wetter playing field. SoBe, for example. Four partners who introduced the health-inspired drink with ginseng and gingko 10 years ago now churn out a multitude of choices, available internationally. 

 

"With a good idea, you can make a go of it," says John Sicher, editor and publisher of Beverage Digest. "But it's not going to work," he adds, without four cornerstones to lay the foundation: distinctive taste, committed long-term financing, savvy marketing and wide distribution. 

 

Persistence helps, too, which Warmack demonstrated in his past life as a running back. He arrived 17 years ago at Iowa State University , a confident sort with "The Mack" spelled across the back of his high school letter jacket. 

 

A vicious knee injury jeopardized his career. But after a marathon rehab that wiped out two seasons, he returned for his senior year. His farewell game was his finest. 

 

"I didn't make it to the pros," he says, instead earning a master's degree in marketing at Clark Atlanta. "But I didn't give up." 

 

Such gumption has served Warmack well, post-Coke. He resigned in 2003 and founded NuSouth's parent, United Beverage Group, a one-man show for the first 15 months. That meant, among other duties, playing lab chemist, mixing ingredients in different proportions to concoct his drinks. Lemonade became the constant, blended separately with blueberry, peach, mango, watermelon or strawberry, all noncarbonated. 

 

Some formulas remain works in progress. Outside the Wayfield, passersby were asked to vote among three fresh versions of the peach. (NuSouth's menu also includes a pure lemonade, plus carbonated grape and orange drinks.) 

 

Meantime, Warmack courted potential investors. The Hantz Group, a full-service financial holding company centered in Michigan , bit. Until outside funding flowed his way, Warmack cleaned out his 401(k) and savings, borrowed from family and friends, and stretched his finances to the breaking point with equity loans. He won't say how much he has sunk in the beverage venture. 

 

Finding money was a chore, but a promotional blueprint came easier to Warmack. 

 

Hoping to tap into what he perceives as a groundswell of pride in the South, he linked a flavor to different states --- peach for Georgia , mango for Florida --- indicating the geographic link on the bottles. 

 

And NuSouth connected with street rappers, its logo appearing on the artists' fliers and CDs. The company's psychedelic van showed up at their autograph sessions. 

 

Warmack's years at Coke taught him that young consumers base their spending on the hip factor. Coolness is defined by the clothes on your body, the songs in your iPod, the drink container in your hand. He identified a target group, ages 12 to 24, and sought to link his product with the prevalent soundtrack of the demographic, crossing racial and economic boundaries. 

 

"People say, 'Is [NuSouth] black or white?' We just say it's teen and young adult," says Warmack, whose favorite marketing buzzword is crossover. 

 

Linking rap, NASCAR 

 

With his benefactor's guidance and checkbook, Warmack has odd-coupled the rap link with auto racing. Hantz created a Racing Group, sponsoring race cars and events, and matched NuSouth with driver Steve Wallace (son of Rusty) on the ARCA level, a circuit a cut or two below NASCAR. 

 

The NuSouth emblem was plastered on Wallace's car Saturday at the Nashville Superspeedway for the first of seven races this year. 

 

Cutting-edge rap and race cars. Whassup with that combination? 

 

"You can't take on the behemoths head-on," he says. "Like fighting Muhammad Ali, you can't go toe-to-toe. You have to go outside the box." 

 

As for auto racing, Southern style, "I don't see it as a redneck sport. I see it as a sport of lots of people." NASCAR jackets, he points out, are hip in Harlem . 

 

Warmack also offers a line called Southern Sippers, three non-lemonade fruit options. Launched simultaneously with NuSouth, it is geared toward a middle-of-the-road crowd. 

 

His drinks are distributed in five states, with the heaviest penetration in metro Atlanta --- 400 stores, mostly mom 'n' pop. Growth will be stunted unless he can crack the chain stores. This month will mark a modest start. 

 

Wayfield, with 14 outlets in the area, hears pitches from 10 to 20 new products a week, says Thomas Holder, director of buying and merchandising. Most get the trap-door treatment. 

 

Holder was so intrigued by Warmack's presentation that he agreed to stock NuSouth on a trial basis. 

 

"He seems to have an aggressive, well-planned marketing campaign," Holder says. "It feels like he has an item that might sell." 

 

Wayfield is not tossing out Sprites or Dr Peppers to make room. NuSouth will get free-standing displays. 

 

Warmack doesn't sell energy drinks, which are all the rage; he only acts like one. Hear this trash talk, beverage-biz style: 

 

"We aren't some hoity-toity company in an ivory tower. . . . We're going to make a lot of large companies scared very soon." 

 

Will enough customers drink to that?