OXIGEN bottled water raises $15m in Series B, enjoys velocity gains despite pandemic
Launched in 2015 by Blair Bentham, OXIGEN has grown revenues 300-400% year over year for the past several years and will use the proceeds of the latest round (which brings its cumulative funding to $28.5m) to build brand awareness through increased marketing and further scale national distribution, said Bentham.
“We’re on an extreme growth curve right now. We’re currently in around 47,000 points of distribution across all channels in all 50 states plus we’re also working with a couple of partners in Asia on a licensing basis, but our growth focus through 2021 will be on continued growth in convenience, gas, and drug channels.”
‘We’ve dramatically increased both our distribution and our velocity’
While some of these channels have seen a drop in foot traffic owing to COVID-19, OXIGEN had continued to perform well in such stores, said Bentham, who said the brand had switched from exclusively wholesale distribution towards DSD distribution across the country over the past year.
“In the last six months, we’ve dramatically increased both our distribution and our velocity. In some accounts such as 7-Eleven, we’re not just increasing door count but our velocities have gone up. Some people are shopping closer to home and I think we’ve also benefited from that.
"We want to be the #1 premium and functional water in North America."
While sales of some bottled water brands spiked during the March/April pantry loading period and then dropped off dramatically thereafter, brands at the more premium/functional end of the market did not behave in quite the same way, he noted.
Does hyper-oxygenated water confer any benefits?
Packaged in 100% recycled plastic and positioned at the functional end of the premium bottled water set, OXIGEN features 25mg of electrolytes from sea salt per 20oz bottle (distinguishing it from rivals that only add ‘trace amounts of electrolytes purely for taste’).
It also contains additional dissolved oxygen claimed to boost recovery by speeding the clearance of lactate produced during exercise.
Skeptics of hyper-oxygenated water – which has extra oxygen added before canning or bottling – have questions on three counts.
First, how is oxygen added to the water, is it retained, and do products on shelf contain the oxygen levels stated on pack?
Second, how do we know that ingested oxygen (ie. from drinking oxygenated water, which goes into our GI tract) gets into the bloodstream, given that the standard mechanism for oxygenating the blood is breathing (whereby our lungs transfer oxygen from the air we breathe into our blood)?
Third, if the extra oxygen does get into the bloodstream, what peer-reviewed science demonstrates that it confers a meaningful benefit?
One peer-reviewed study, two more in the works
On the first point, OXIGEN water and shot products contain a proprietary O4 stabilized oxygen molecule rather than O2 oxygen, which is a compressed gas that dissipates from any bottle when opened, notes Bentham, although he doesn’t explain the means by which the oxygen gets into the bloodstream following ingestion of the water.
“We’ve got shelf life studies showing the [extra] oxygen is still in there after 36 months. It’s a liquid oxygen concentrate manufactured in the US which we supply to our manufacturing facilities and it’s meter injected into distilled water at the point of bottling.”
On the third point – efficacy - he cites a peer-reviewed double-blinded, placebo controlled study conducted at Indiana State University with 25 athletes showing that ingestion of OXIGEN facilitated more rapid clearance of lactate and could therefore enhance recovery from exercise.
Two additional studies are also in the works, said Bentham.
While cynics might question whether the average person sipping OXIGEN during zoom calls from the home office – as opposed to Stephen Curry - would gain much from more rapid clearance of lactate, Bentham insists that it’s not just for elite athletes.
“We’ve been focused on the healthy active lifestyle consumer doing sports and working out, but it’s growing into a mass market product, so we’re really focused on all consumers that are buying premium functional waters but are looking for something different. Alkaline water is becoming a bit commoditized, and OXIGEN is a differentiated product. They feel there’s a value add beyond hydration.”
New investors Kevin Love and Brett Eldredge are "under no obligation to promote the brand on social media or other channels but have chosen to do so because of their belief in the product," added Bentham. (Kevin Love has posted on Instagram and Brett Eldredge has talked about the brand to a travel publication, for example.)
“As a young company, to have such a strong management team in place overseeing sales, marketing, logistics and manufacturing is unheard of in the beverage space. The fact that we control our manufacturing across the country and can meet the demands now, and well into the future for OXIGEN, all while delivering on quality, margin and scalability, puts OXIGEN in a position to capture significant market share.”
OXIGEN investor Anthony Pritzker, chairman and CEO, Pritzker Private Capital; managing director, Pritzker Group
Sustainability
While it’s arguably more sustainable – and a lot cheaper - to drink tap water, if you do choose to buy bottled water, OXIGEN has tried to reduce its environmental impact as far as possible, by packaging its wares in 100% post-consumer recycled plastic and using locally sourced municipal water rather than spring water trucked thousands of miles from the source, said Bentham.
“In almost every case, we blow the bottles on site as well, so we’re not transporting empty bottles around the country.”
Recover + Rise
OXIGEN has recently launched ‘Recover + Rise’ - a multi-million dollar media campaign celebrating frontline workers, said Bentham. "This speaks well to the product, which is about recovery, but it's also about the heroes of our day that are helping their communities to recover and rise through this pandemic and the economic turmoil."
*OXIGEN is also backed by Bryan Ezralow, CEO of The Ezralow Companies; Jonathan Glaser, principal of JMG Capital; Michael Meldman, co-founder of Casamigos Tequila and CEO of Discovery Land Co.; Victor Coleman, Chairman & CEO of Hudson Pacific Properties; Neal Moritz, Producer of the Fast & Furious film franchise; Anthony Pritzker, Chairman and CEO of Pritzker Private Capital and Managing Director of Pritzker Group; Daniel Yergin, Pulitzer Prize winning author of The Prize and The New Map; and Richard A. Gephardt, former Majority Leader and Minority Leader, US House of Representatives.
