Almond water has been a runaway success story for LA-based start-up Victoria’s Kitchen. But not because it's the next big thing in functional beverages. It isn't, says CEO David Meniane, who stresses that his product should not be confused with almond milk, or coconut water. "If you are looking for electrolytes, you’ve come to the wrong place.
“It will not give you wings, it won't make you more energized nor relaxed; it will simply quench your thirst and make you happy!”
Indeed, this no-nonsense approach could help to explain why his distinctively packaged products have gained momentum - securing listings at Target, Kroger, H.E.B., Whole Foods and Amazon as well as a host of natural chains and independents - while many new ‘functional’ brands gather dust on the shelf.
Almond water - “made for taste and refreshment like lemonade or sweet iced tea” - debuted at the Fancy Food Show in January 2012, and since then “everything just exploded”, says Meniane. “It’s been almost unreal.”
Buyers like the fact that it’s natural - but not functional - and is based on a recipe that’s been in his family for generations, which makes its look “vintage and European looking”, adds Meniane, who grew up in France drinking his grandmother Victoria’s home-made almond water and started making it for friends when he moved to the US in 2000.
I used to make almond water the way my grandmother did
“I used to make almond water the way my grandmother did, which is a long process involving boiling and straining almonds,” adds Meniane, who is a certified public accountant by trade and worked in real estate for the best part of a decade before he decided to find out whether his family recipe might appeal to a wider audience.
“But to make a shelf-stable ready-to-drink product on a commercial scale that wasn’t $4-5 a bottle, I knew I’d have to make changes,” he recalls. “I also wanted something a bit less sweet than the version my grandmother made.”
A conversation with Honest Tea co-founder Seth Goldman helped him find a co-packer, and the final recipe was nailed down: Purified water; cane sugar; natural flavors; natural almond, vanilla, and rose extracts; and citric acid.
The original almond water has 110 calories per 16oz bottle; the almond water coconut variant has 100 calories; and the brand new semi-sweet organic lemonade with cold-pressed ginger and cayenne pepper has just 40 calories - the last two developed because retail customers wanted more skus, he says.
“If you want more real estate, you have to have more products.”
Meanwhile, the “#1 piece of retail estate” he’s targeting is “the cold box at the front of the store next to the lemonade and the iced tea”, says Meniane. “But we don’t want to be next to the HPP juices or the kombucha.”
The main beverage aisle is tougher, he says. “We want to be there when people come into the store for a sandwich and a drink, not when they are buying a six pack of something.”
Saying ‘No’ as often as saying ‘Yes’
As for the trials and tribulations of running a start-up, having his wife and co-founder Deborah to balance the load has made a huge difference, he says.
But they have also been careful to grow at a manageable pace, which has meant saying ‘No’ as often as saying ‘Yes’ and means the brand is probably in fewer stores than it might have been at this stage - in part because they have been trying to put off raising outside capital for as long as possible.
But steady growth is OK, he says. “We often get calls from people on the east coast that want our product and we say yes - but the timing isn’t right for us now. At the moment, we’re more focused right up and down the west coast; we’re building up one customer at a time and supporting our brand.”
Pay more per unit and start small
As for advice to other budding beverage entrepreneurs, start small, he says.
Take your first deal with a co-packer, which says the minimum number of units for your all-important first production run is 60,000 units: “So people think, my product has got 12 months of shelf life so I’ve got a year to sell it. But if retailers want 75% of that shelf life, you’ve only got three months.”
So while it might cost more to start with a smaller run, it might be a wiser choice to pay a little extra per unit.
Meanwhile, echoing comments made in our recent beverage entrepreneurs forum - click HERE - it’s critical to be prepared for all of the hidden costs distributors and retailers will throw at you, from slotting fees to manufacturer charge backs, in order to negotiate effectively, he says.
As for mistakes, he’s made a few, but that’s how you learn, says Meniane: “We did have an almond water with mint and licorice, which did really well in demos, but when people saw it on shelf [and they hadn’t sampled it], it scared them a bit, and it didn’t take."
Click on the links below for the highlights from our recent Beverage Entrepreneurs forum: