Tio Gazpacho raises $1.25m on CircleUp led by Gen Mills/301 Inc, plans new $4.99 range
CEO and founder Austin Allan told FoodNavigator-USA that the new line – launching later this year - would still use “high quality, organic ingredients and high pressure processing”, but would likely come in a 10oz (rather than a 12oz) bottle, and use more affordable core ingredients as a base in order to achieve a $4.99 price point (the 12oz range retails at around $7.99).
The strategy had proved successful at Suja and many other brands that had started in the natural channel but branched out to build a presence in the conventional channel, he said.
Tio Gazpacho - which launched in Miami in September 2014 in juice bars and independent retailers – has since picked up business in the North East with larger retailers such as Whole Foods, Kings, Balducci’s and Fairway, where it has been able to build strong partnerships and demonstrate the kind of velocity that impressed investors on CircleUp, said Allan.
“We were dealing with a lot of independent retailers in several states, but we’ve actually scaled back a little bit over the past six months to focus on our core customers, natural, organic and gourmet chains in New York, New Jersey and Connecticut.
"However, we have a lot of retailers in the pipeline so we hope to have some exciting news about increases in distribution that we can talk about in the next few weeks."
“Tio Gazpacho offers a new soup experience with its refreshing and vibrant high quality ingredients served in a drinkable and portable bottle. We strongly believe in brands eager to make a difference in the marketplace and are thrilled to work with Tio Gazpacho to maximize its success within the food industry.”
John Haugen, VP, General Manager, 301 Inc
On the merchandising front, the data shows very clearly that Tio Gazpacho – which can serve as a hearty mid-morning or afternoon snack/beverage or a meal replacement, especially at lunchtime – performs the best if retailers put it in the produce section, the chilled grab & go beverage set, or by chilled soups and other fresh prepared items, he said.
“We have sometimes been placed in the meat alternatives set by meat replacements and tofu and that’s not a great place for us, but we perform well in the grab & go set.”
*The funding round also includes investments from other private investors in CircleUp’s marketplace, and from the Growth Fund, an investment fund managed by CircleUp.
Tio Gazpacho uses high pressure processing (HPP), whereby foods or beverages are put into a high-pressure chamber that is flooded with cold water and pressurized (hence the term ‘cold-pressured’) in order to kill pathogens without heat.
This enables the brand to produce products that tastes exactly like fresh gazpacho you’d make at home, with no preservatives or added flavors, and a shelf-life long enough to secure national distribution, says founder and CEO Austin Allan, who spent time in Madrid while studying Spanish literature and marketing at college and was so bowled over by Spain - and gazpacho - that he moved to Barcelona after he graduated and spent another three years there before heading back to the US.
While some trend watchers predicted gazpacho would take off more rapidly than it has in the US market, it's easy to forget that it's still a novel concept to most Americans, although it ticks all the right boxes when it comes to healthy eating on the go, says Allan.
"We have to support the product with demos and promotions when we enter a new store or chain, but once people try it, they fall in love with it."
Tio Gazpacho drinkable soups are manufactured by FreshBev in New Haven, Connecticut, which has an HPP machine onsite. They come in three flavors: Clásico (vine-ripened tomato, green pepper, and cucumber), Gazpacho Verde (kale, spinach, avocado, and mint), and Gazpacho de Sol (yellow tomato, yellow pepper, and carrot).
A fourth flavor – Rosado (pictured) – will hit stores by May 1.
