Vive Organic raises $13m to build wellness shots empire: ‘This category is exploding’
Founded in December 2015 in Los Angeles by Wyatt Taubman, Kyle Withycombe, and JR Simich, who met at the University of San Diego, Vive Organic shots first hit local stores in April 2016, and are now available in 8,000 locations including Whole Foods, Sprouts, Safeway, Wegman’s, Target, and CVS as more retailers build wellness shot subsets within their functional beverage sets.
The company does not disclose revenues but says sales have been growing by more than 400% year on year, with a big surge in recent months as consumers have sought out shots perceived to have immune health benefits, Taubman (CEO) told FoodNavigator-USA.
"When we started there wasn’t really a wellness shots ‘category,’ just a few brands, but more recently the category has exploded. It's now worth about $50m and it’s growing in the triple digits as these products become part of people’s daily routines.
"I see the opportunity for Vive as massive and would like to see Vive eventually reach $250m in net sales per year and then $500m and onwards."
E-commerce sales go from ‘virtually non-existent’ to ‘a sizeable chunk of our business’
While e-commerce sales barely registered a few months ago, they now account for “a sizeable chunk of our business,” said Taubman, who said a chunk of the money just raised will be going into supporting the brand’s sales on Amazon and on its new direct-to-consumer site, which encourages shoppers to seek subscriptions.
“The refrigerated piece makes it more tricky [Vive’s products – which go through the HPP high pressure processing process – require refrigeration], but we have managed to figure out a way to deliver our products quickly and cost-effectively and we have also recently established a subscription service, which has been growing quickly.
“With so many businesses doing refrigerated and frozen and knowing the value and importance of e-commerce, a lot of people are working to solve the inefficiencies right now.”
The Eureka moment
While the wellness shots category has heated up recently as more brands have entered the space, competition is a positive thing because it raises awareness and validates what Vive has been doing, said Taubman, who had a Eureka moment after slugging down a cold pressed ginger and turmeric shot at a juice bar in early 2014.
"It was the first time I’d tried one and it had this really powerful kick… I got really excited about the concept.
"I remember when we launched in Erewhon in Venice Beach in California and we were the only cold pressed wellness shot in the store, and now they are carrying about 11 wellness shot brands and dedicating around three large shelves in their functional cold box to the category, and we’re still the #1 player after all of those brands entered.”
Retailers, he noted, are big fans of wellness shots because they have strong velocity, premium price tags (usually $2.99-$3.99), and don’t take up much room (they cost about the same as larger beverages but take up a fraction of the space).
“Wellness shots are one of the most productive products that a retailer can put on shelf.”
Investment criteria: ‘Monogram really checked all of those boxes’
As for the latest investment round, the timing was challenging on several fronts, said Taubman.
"The week that they issued the stay at home order in San Francisco was the week we started our fundraising process, so just as COVID-19 really hit. Every [planned face-to-face] meeting had to switch to a zoom meeting or virtual conference.
“Meanwhile, our e-commerce sales increased by about 52 times, and we needed to increase production five-fold to keep up with climbing demand at retail, so there was a lot going on for the business.”
Investing has to be a win-win for both parties, added Taubman, who said he was looking for partners that could potentially write larger checks in future should they be needed, but primarily for a spirit of “integrity, trust, and partnership.”
He added: “We wanted people that could help with future M&A and input on financing should we pursue a liquidity events for our stockholders down the road, but would also be good fit with our existing board structure and members. Because of our growing e-commerce operation, we also wanted a partner with strength and experience in that channel, and Monogram really checked all of those boxes.”
