As the only remaining independent of the “big three” juice brands that deploy high-pressure processing as their marketing and innovation hook, SUJA knows it’s facing deep-pocketed competition from Hain-owned BluePrint and Starbucks-owned Evolution Fresh.
If SUJA doesn’t have the deepest pockets at the table, however, it’s sure got access to a lot of them.
Mere months after picking up an $8 million investment at a valuation of $100 million from Boulder Brands’ venture capital arm, the cold-pressed juice company has pulled in another, undisclosed investment from investment fund Alliance Consumer Growth (ACG), a consumer-product focused group that tries to find next-generation versions of existing categories and deploy minority growth capital as fuel for their growth.
ACG has invested recently in enterprises like Evol frozen burritos, Krave Jerky, and Shake Shack — all three of which fit the fund’s model of looking for “2.0″-type brands in established categories (like frozen dinners, beef jerky, and fast food). With SUJA, the move is to take over the next level of the high-end juice category, long the province of products like Odwalla, Naked and POM. The investment closed shortly before the end of 2013.
“[SUJA has] got a dynamic we like a lot,” said ACG co-founder Josh Goldin, who will become a board member at the juice company. “They’re playing in a really big category that has been largely the same group for a number of years, and then a few companies come along and really innovate a next generation with better benefits and a better value proposition.”
Bust establishing that proposition is one that is capital-intensive at its earliest stages, said SUJA CEO Jeff Church, who noted that the investment will go to help pay for the rest of the company’s investment in juice processing equipment. As demand has grown over the past year, that investment has gotten larger, primarily because the capacity of the equipment has had to increase pre-installation.
“Because of the type of product this is, it’s not something that’s easily copacked,” Church said. “So virtually integrating the manufacturing is something that costs money that normal CPG companies don’t have to spend up front. The con is that it costs money to do — but the pro is that it’s a barrier to entry and in the long run, as you get over your fixed cost structure, your margin is more significant.”
The San Diego-based company is not more than two years old but had a tremendous 2013, buoyed by key retailer Whole Foods’ recent commitment to developing the next level of the juice business that Evolution, Suja, BluePrint, and a myriad of regional players represent. Over the course of the year, SUJA has quickly professionalized its staff from an entrepreneurial core to one that has added veterans from across the beverage business, and expanded from its “Classic” line of mixology-based juices to a smoothie line called “Elements.” That’s an advantage, according to Goldin.
“It’s a credit to the quality of the products, the momentum, the business, that they’ve been able to attract really high-quality beverage talent,” Goldin said. “Jeff has done a great job of expanding the team.”
As for the speed at which the company has closed rounds, Church said, it’s strategic.
“My philosophy is to not take on too much at one time,” he said. “Companies that tend to take on too much too fast tend to squander it. It’s more prudent because it’s not as dilutive to existing shareholders, and secondarily, I think it encourages more careful fiscal management — which is always prudent.”
Whynatte, an Atlanta-based start-up that produces a line of premium coffee beverages and mixers, has been selected as one of four companies to take part in an accelerated growth program launched by AccelFoods, a new food and beverage accelerator with a dedicated investment fund of $4 million.
Offering “engaged support to help packaged food and beverage entrepreneurs position themselves to scale,” the accelerator program runs twice per year, with a new round of four companies taking part every six months. Depending on their current top line sales, the four companies, which also include Exo Cricket-Flour Protein Bars, Jaali Bean Indian Side Dishes, KOLAT Nut-Butter Spreads, received an initial investment of $18,000 to $50,000, along with potential for an additional follow-up investment of up to $200,000.
Along with day-to-day operational support from AccelFoods’ management team, the half-year program is comprised of in-person seminars that take place at AccelFoods office in New York or via videoconference, as well as “the opportunity to speak with [company] mentors for weekly and bi-weekly one-on-one chats and meetings,” according to the company’s website. The mentor and advisory group is comprised of dozens of food and beverage industry veterans that reads like a who’s who list in natural/specialty food and beverage.
With backgrounds in angel investment, retailing, brand management and marketing, AccelFoods counts over 100 mentors as part of its team, including “Top Chef” producer and restaurateur Tom Colicchio, beverage attorney Nick Giannuzzi, Verlinvest investment manager Franklin Issacson, and Donald McIntryre, President – Western Region, United Natural Foods (UNFI). The accelerator program also offers a number of strategic corporate partnerships with well-known and established businesses, including Unisource, FreshDirect and JetBlue.
“The AccelFoods ecosystem will work to create a new generation of packaged food and beverage companies built with best practices in mind so that companies can scale more efficiently,” co-founder Lauren Jupiter said in a statement.
According to its website, AccelFoods “generally” takes a 9 percent equity stake in each company that it selects for the accelerator program. However, Jesse Altman, co-founder & CEO, Whynatte, said that because of existing shareholder commitments and the valuation of his company, AccelFoods’ interest in Whynatte is less than 9 percent. While specific financial terms were not disclosed, Altman explained that the potential opportunities created by the program made the deal “very fair.”
“They raise funds, invest in the company; that puts them on the same side of the table as me,” Altman said. “They’ve got skin in the game as well.”
“In the tech world, [accelerators] are a dime a dozen,” he continued. “That ecosystem doesn’t really exist in beverages. If I take advantage of the opportunities to network, there’s a lot of good, lasting relationships that’ll go on well after six months.”
Altman said that, in particular, it was the program’s opportunity to meet and develop connections with institutional investors that is especially appealing to Whynatte. AccelFoods’ co-founder Jordan Gaspar echoed that sentiment.
“It’s really in the later stages for real investment opportunity,” Gaspar explained, noting the potential for new funding during and after the duration of the six-month accelerator program.
Despite the potential to rapidly expand and scale his business, Altman explained that it was Jupiter and Gaspar’s dedication to the development and launch of AccelFoods that most attracted him to partnering with the company.
“Both left lucrative careers in law and banking and jumped in feet first,” Altman said. “Their commitment spoke volumes to me.”
Enhanced water could be the most muddled category in the beverage industry. Balance Water contains Australian wildflowers originally used by the Aborigines. Avitae has caffeine. A host of others are alkaline-infused. Aquation is made with xylitol to help your teeth. But if you ask Big Geyser, a renowned non-alcoholic beverage distributor in New York, the water of the future is black.
blk. Beverages, an Oakland, N.J.-based company that markets a fulvic-enhanced mineral water, has signed a distribution agreement with Big Geyser. In a joint release, the companies announced Tuesday a partnership that will take all blk. products into the five boroughs of New York City, as well as Westchester, Long Island, Nassau and Suffolk counties in New York.
“They’ve been on our radar since day one,” said Christopher Laurita, blk. president and CEO.
Laurita said that since the company’s launch at Natural Products Expo West in June 2011, he’s wanted to partner with Big Geyser, which he called one of the best distributors in the New York region. After years of back-and-forth dialogue with Jerry Reda and Lewis Hershkowitz, the COO and CEO respectively of Big Geyser, Laurita said that the company’s product extensions and maturation into a “buttoned-up” state made this the right time for a deal.
“We didn’t want to jump right in, especially into the most important market,” he said.
With distribution from UNFI, KeHE, Haddon House and Core-Mark, Laurita said that blk. can already be found nationally, with a focus in New York and New Jersey, in retailers like Wegmans, Sheetz and Stop & Shop. However, the deal with Big Geyser represents blk.’s first foray with DSD distribution.
“We like the way they run their business and handle their brands,” Laurita said. “We just want to be a part of that.”
He added that after meeting with Big Geyser this morning, the company will again meet with the distributor in two weeks to form a gradual route-to-market strategy for specialty, health-food and some chain accounts. Laurita wants to establish the brand in a few parts of New York before quickly expanding its footprint.
After establishing the route-to-market strategy, blk. will tweak the label of the original product in an effort to explain the benefits of the fulvic minerals, which creates the black liquid. By adding a new sleeve label, the company will have more real estate to help consumers through the packaging.
“We’re trying to make that education process a little bit more self explanatory,” he said.
The full release follows:
OAKLAND, N.J. — blk. Beverages today announced the signing of a new distribution agreement with Big Geyser, one of the largest distributors of premium non-alcoholic beverages and snacks in the country. Big Geyser will now act as the exclusive distributor of blk. Beverages (blk. and blk.+) with distribution throughout New York City, as well as the five boroughs of New York City, including Manhattan, Brooklyn, Queens, The Bronx, Staten Island, as well as Westchester, Long Island, Nassau and Suffolk Counties.
“We are excited about the partnership with Big Geyser and the support they will provide blk. and blk.+ in the New York City-area,” said Chris Laurita, CEO of blk. Beverages. “Big Geyser’s established influence with the biggest brands and products at retail will prove a valuable asset to us as we look to enhance our reach, depth of products, and service in this territory.”
blk. is a fulvic-enhanced mineral water that refreshes the body and balances pH without any calories, sugars or carbs. Big Geyser, a recognized brand-builder of leading non-alcoholic beverages, has serviced the New York City area since 1986 and has grown into a renowned brand that works with some of the largest beverage brands, including Vitamin Water, Honest Tea, ZICO, Monster and V8, among many others. The Big Geyser distributed products are routinely placed in leading retail chains such as Whole Foods, Duane Reade, 7-Eleven and Hess Convenience Stores, among others in New York City.
“We look forward to working with the entire blk. team. We have been watching the brand for some time and we believe it is has many features and benefits unique to our portfolio with great upside potential,” said Jerry Reda, COO of Big Geyser Inc.
About Big Geyser Inc.
Big Geyser, the premier and largest independent, nonalcoholic beverage distributor in New York is a family- owned and operated company founded in 1986. With more than 26,000 accounts within its territory, Big Geyser represents brands from Monster Energy, Coca-Cola, Sparkling Ice, Nestle, Campbell’s and other leading companies. Big Geyser has established itself as the “Go To” beverage distributor in the influential New York metro market and maintains a premium portfolio of brands. Big Geyser directly services all channels of trade in the five boroughs of New York City, Nassau, Suffolk County, Long Island, Westchester and Putnam County. Big Geyser prides itself on building brands and has cultivated an enduring reputation in distribution, delivering an unsurpassed level of customer service, operating 7 days a week 24 hours a day. http://www.biggeyser.com
Having recently announced its tenth consecutive year of growth, eight of which reached double-digits, Essentia is positioning itself for a booming 2014 — and well beyond. Earlier this year, Essentia, the top-selling enhanced water brand in the natural channel, raised $3.2 million in convertible debt and is perhaps prepping for a much larger round of funding later this year.
The debt raise, led by Silverwood Partners, follows an impressive year for Essentia, in which the high-alkaline water brand saw sales grow by 52 percent in the natural channel, as compared to 2012. Ken Uptain, President/CEO, Essentia told BevNET that the new financing came from a private investment group and individuals that are “closely involved with the brand.” Uptain also said that Essentia has been in discussions with private equity firms, “for down-the-line growth,” and indicated that another deal might be coming soon.
“At some point, we’re probably going to need a partner,” Uptain said.
Essentia, which today reported record sales for Jan. 2014, has proved to be one of the hottest brands in natural in recent years. SPINS, a leading provider of syndicated market research, pegs Essentia’s 2013 natural channel sales at $6 million along with a 35 percent share of the enhanced water category within the channel, according to Paul Curhan, Essentia’s VP of Marketing & Innovation.
However, the numbers do not include sales in Whole Foods, the number one retailer of Essentia water, which combined with retail sales of the brand in natural, grocery and online, totaled $15-20 million in 2013, Curhan told BevNET. Curhan noted that increased sales are mainly velocity-driven, with same-store sales, particular those in the Southwest, propelling sustained growth for Essentia. That said, Curhan pointed to the Northwest, South Central and Mid-Atlantic regions of the U.S. as fast-growing for the brand.
Although the majority its sales come from within the natural channel, grocery and e-commerce are quickly becoming significant drivers of sales growth for Essentia; Curhan said that the brand is up well over 100 percent in both channels. Essentia recently expanded its presence in Kroger by more than 750 stores and is currently the number one selling enhanced water brand on Amazon.com, according to Curhan. Among all bottled waters, Essentia is number two behind FIJI Water, in terms of total sales on Amazon, he said.
Essentia currently employs a hybrid distribution model in which the water is shipped via leading natural and specialty distributors UNFI and KeHE as well as direct to retailers in some markets. The company is, however, looking at select DSD operators as part of a broader hybrid distribution strategy, Curhan said.
In preparation for what the company believes will be another huge year for the brand — Curhan offered projections of 50 percent growth and $22-23 million in sales — Essentia has adopted a new tagline and is planning to significantly ramp up marketing efforts. Replacing “Superhydrating Water” with “Hydration Perfected,” Essentia is attempting to appeal to broader audience, Curhan said. The new motto is more consumer-friendly, he noted, and captures Essentia’s consumer proposition more succinctly.