Mexican start-up carves out niche in craft soda category

By Niamh Michail contact

- Last updated on GMT

© Buho Soda
© Buho Soda

Related tags: sugar reduction, Natural flavors, start-up, Native ingredients

Búho Soda is Mexico's first all-natural, low-sugar soft drink made using locally-sourced ingredients, according to its manufacturer - and inspiration came from the country's booming craft beer movement, the start-up founder says.

The founder and CEO of Queretaro-based start-up Mima Sodas, Roman Gaa, originally comes from Germany but got to know Mexico when studying in Mexico City and then on a trip in 2014.

“One of the first things I noticed was all the fresh fruit and vegetables on every street corner. But something also made me very curious: the impressive soft drink consumption. It is such a big part of the culture here. At every meeting, reunion, and party there are massive volumes.

“I thought ‘how is it possible that a country can be so rich in natural resources - fruit, agave, stevia – but doesn’t use them to make a good soft drink?’”

At the same time, Gaa noticed the booming craft beer movement in Mexico, with new microbreweries opening all the time.

To him, this indicated that consumers were interested in craft, artisan products made with natural ingredients.

“I took the ideas of the craft beer movement and put them into a non-alcoholicbeverage​,” he told FoodNavigator-LATAM. “I went back to my job [as a logistics consultant] in Germany but it took me about half an hour to decide to quit. I had no connection to food or the FMCG industry but liked the idea of this product.”

After several kitchen experiments and 'sensory testing' trials with Mexican friends living in Germany, Gaa traveled back to Mexico in 2015 and founded Mima Sodas, launching the first product of the Búho Soda brand in 2016.

Natural & local ingredients 

Flavors include coffee kola; tamarind & chili; mango & passionfruit; hibiscus & pomegranate; lime & mint; and original kola.

.py
© Buho

The start-up is currently working on new flavors and hopes to launch at least two more in 2019.

Sweetened with natural sweeteners stevia and agave syrup, Buho’s drinks contain around 60% less sugar than other commercial varieties.

“People know stevia and agave and see it as positive. Our customers are very curious, they are used to checking labels and reading ingredient lists, and sometimes ask us questions.”

“For example, we are the only Mexican soda drink without any preservatives and people appreciate that. When they ask how why we don’t need them, we explain [...] that we pasteurize our products.”

“As much as possible, all the juices are from Mexico and the final product contains between 95 and 98% locally sourced ingredients. We buy the organic blue agave syrup from Jalisco, for instance." 

'The tax made people aware soda has too much sugar'

Asked whether Mexico’s sugar tax has helped companies like his making lower-sugar products, Gaa said: “I’m convinced the answer to those kinds of questions [such as Mexico’s obesity crisis that has reached epidemic proportions] should come from the market, and that’s what we are doing. Let’s give people the choice between products with lots of sugar and more natural, healthy ones.”

However, the entrepreneur recognizes that the public debate around the country’s sugar intake triggered by the sugar tax “definitely helped us”.

“It made people aware they are drinking soda with too much sugar.”

Mass Challenge 2018

The start-up struggled to find a distributor in the first two years after its launch but taking part in Mass Challenge start-up accelerator last year helped it take off.

It now has listings in Mexico’s major retailers, including City Market, Fresko and La Comer (although most of its sales come from foodservice channels such as bars, and restaurants).

In Mexico’s “highly competitive​” soda market, Gaa preferred not to disclose revenue or sales figures but said around 60% of its business comes from sales in

xbm
© Buho

Mexico with the remaining 40% from international markets, although its export business is growing more quickly.

Mima Sodas exports its soda to 16 countries, including the US, Canada and all over Europe but no Latin American countries so far.

Gaa attributes this to the premium price and glass bottle format.

“We didn’t want to use plastic but glass is heavier, more expensive and can get broken. When you include the cost of shipping, we can’t compete in markets where people want cheap options.”

In Mexico, Búho Soda is between 50 and 70% more expensive than Coca-Cola (depending on the format) while there is a 10% price difference between Buho and imported soft drinks.

“Of course, if it is possible we would like to bring the price down but prices are increasing in Mexico at the minute because of inflation, and our suppliers are raising prices. At the minute, we are looking to offer other formats, such as aluminum can and bigger bottles, which could bring the price down.”

This could also open up new markets around Latin America, he added.

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