Current directors and large shareholders accounted for over 45% of the latest capital raise, “signaling confidence in our business plan and current management," said CEO Kevin Sherman, who has steered the business through a challenging period in which it lost many retail accounts as it transitioned to a new bottling partner (leading bottled water supplier Niagara Bottling).
AquaBall - a zero-calorie, vitamin-infused beverage for kids sweetened with stevia that has done licensing deals with Marvel and Disney – is now bottled using a hot-fill process in a newly designed bottle that has enabled it to ditch preservatives such as potassium sorbate and clean up its labels.
Hot fill process: New bottle design, no preservatives
However, the transition was painful, with net sales for the quarter ended Sept 30, 2016 down 27% year on year as the initial production run with Niagara was not ready for shipment until the beginning of June, which “greatly hindered our ability to get the new product on the shelves during the second and third quarters of fiscal 2016,” said Sherman.
“The retailers wanted the new bottle. We’re a public company so they had all seen the news that we were switching to a new bottle and formulation. But the timing was the problem. You sell in for summer in early spring but we had no [new] product to give them because the new bottles weren’t ready for shipment until June, so we lost essentially an entire selling season.“
A calculated move
However, the new easier-to-hold slimmer bottle design means AquaBall (which debuted with an unusual spherical bottle design pictured left) is now able to fit into glide racks used in c-stores, while the preservative-free formulation makes the zero calorie product more appealing to schools and many other potential buyers, said Sherman, who took the helm after CEO Lance Leonard resigned in December 2015.
“If you're going into schools you are much more likely to get a meeting if you are in the all-natural realm.
"It was tough, but it was a calculated move and it was worth it because we knew our 2017 and 2018 was going to be substantial, and don’t think it didn’t cause indigestion.
"But now we have a superior product."
AquaBall has 70+ DSD partners in 44 states and is now sold in over 9,000 convenience and grocery stores including 7-Eleven, Albertson’s, H.E.B., Rite Aid, Piggly Wiggly, Shaw’s, Food Lion and Stop & Shop.