Shaun Roberts, CEO of Hawaii-based KonaRed, was speaking to FoodNavigator-USA after inking three strategic deals he believes could propel his branded beverages from coffee fruit - the cherry encasing the coffee bean (seed) - into the mass market.
The first generates cash: KonaRed, which launched its first products in 2011 and became a public company in 2013, has just struck a deal with investment firm Lincoln Park Capital (LPC) Fund LLC giving it the option to sell up to $12m of equity capital to LPC during a 30-month period.
The second gives KonaRed national distribution. The firm, which currently sells its beverages in Hawaii, Texas and the west coast of the US - has just teamed up with Splash Beverage Group to sell and distribute its products across the US.
The third - a licensing arrangement with nutraceuticals powerhouse VDF Futureceuticals - is all about building the IP and science behind coffee fruit bioactives.
I believe KonaRed could be a $100m brand
“We’ve always believed that coffee fruit is the king of the superfruits and we think we can do for coffee fruit what POM did for pomegranates and Sambazon did for acai," claimed Roberts.
"Over the next 30 days we’re going to be in major retail chains across the US and I believe we could be a $100m brand.”
Coffee fruit tastes nothing like coffee
Of course KonaRed is not the only game in town when it comes to coffee fruit, he acknowledged.
Ben Weiss - the entrepreneur behind Bai (click here) - has built a highly-successful beverage brand around coffee fruit (sourced from Indonesia), and plenty of other firms are also convinced of its potential, he said.
“We’re definitely going to see more interest as awareness builds. Coffee fruit is slightly sweet, refreshing and clean-tasting, and despite the antioxidant levels, it’s not bitter.
"It also tastes nothing like coffee.
“I couldn’t believe it when I first found out that coffee is the #2 traded commodity in value [behind oil], but the fruit is just thrown away or used as fertilizer. Plantations were just dumping it.”
Paradise in a bottle?
However, KonaRed does have a couple of things that could give it the edge as more firms bid for a slice of the action, reckons Roberts.
First, it’s got a great origins story. It’s based in Kalaheo, Hawaii, and sources its fruit from Hawaiian coffee plantations - widely acknowledged as producing some of the best coffee in the world, he said: “Kona is known for its exceptional coffee beans, and KonaRed is known for its exceptional coffee cherries.”
Beyond generic ‘antioxidant’ claims and ORAC scores
Second, it has teamed up with VDF, which owns the patent-protected CoffeeBerry platform.
VDF has also pioneered clinical research into the health benefits of coffee fruit bioactives that could enable KonaRed to move beyond generic ‘antioxidant’ type marketing and drill down into more specific health benefits backed by clinical research on proprietary ingredients and manufacturing methods, he says.
While the word ‘antioxidants’ still resonates with consumers, claims based solely on in vitro ORAC values - which measure the ability of antioxidants to scavenge harmful free radicals in a test tube - are being viewed with more skepticism these days, he added.
So firms such as VDF are instead seeking to determine exactly which polyhenols and related metabolites in ‘super fruits’ such as coffee cherries actually gain access to appropriate cells in the body to exert biological effects, he said.
“We don’t really talk about ORAC anymore; we talk about bioavailability and absorption at the cellular level, whether antioxidants are capable of penetrating and protecting live cells from oxidative damage."
We got to know VDF really well and started to see numerous opportunities to work together
After years arguing over the validity of VDF’s patents (click here), the two parties gradually came to realize that they would be better off working with each other, he said.
“We got to know them really well and started to see numerous opportunities. They are a world class manufacturer and have global IP and we are experts at consumer products and marketing. Under the licensing deal we will be able to use their CoffeeBerry trademark [VDF, meanwhile, will earn licensing fees from KonaRed sales and can earn an equity interest in KonaRed].
“They have also done some really interesting clinical trials. Some of the most exciting research is around cognitive benefits.”
As FutureCeuticals executive vice president John Hunter observed, “Shaun and [his wife and KonaRed co-founder] Dana Roberts impressed us… it became immediately apparent that they are genuine people and terrific marketers.”
KonaRed original is shelf-stable and contains KonaRed coffee fruit liquid extract plus pineapple and apple juice from concentrate. It is sweetened with stevia leaf extract. (The ‘lite’ version has no pineapple juice and includes monk fruit.)
While the products are energizing, they contain no added caffeine, says Roberts.
“It’s not an ‘energy drink’ in that there’s no added caffeine, just a small amount of naturally occurring caffeine. But it provides energy and wellness that you can feel.”
KonaRed with coconut water and KonaRed with organic green tea are recent additions to the portfolio, while new powdered on-the-go sachets are set to launch at Expo West next month.