Welcome to part two of our video replay of BevNET Live’s special “Building Sweet Leaf Up and Out” case study.
While the first video featured Sweet Leaf founder Clayton Christopher talking about bootstrapping an entrepreneurial company, the second in this series takes an external look at what Christopher and partner David Smith had constructed: a growing company that was beginning to attract attention from the venture capital community.
In this presentation, Catterton Partners’ Michael Farello outlined why, when the company had already looked at the RTD tea segment for three years, Sweet Leaf eventually became a target for investment. Farello also discussed some of the elements that could be preserved and adjusted to help scale the brand, as well as what kind of partnership and exit strategies began to emerge as Catterton invested in the brand.
One of the key characteristics of Sweet Leaf’s attractiveness was that it had said “no” to some national chain accounts in favor of trying to prove out its viability as a brand in limited markets, according to Farello.
“We see so many brands that try to chase national distribution before they really demonstrate that they can win,” Farello said, adding that Sweet Leaf had demonstrated those wins by running deeply in its home state of Texas.
Still, he added, entrepreneurs now have it tougher than even a few years ago when dealing with retailers who have large regional footprints, saying that those retailers often want brands to ship to the entire chain before they will put it on shelves.
Farello noted that he believed the Texas numbers indicated that the Sweet Leaf brand was ready to scale nationally — but that the company itself needed some changes to make that happen. Please watch the video hear about those changes, as well as the rest of the analytical perspective that Catterton brought to bear on Sweet Leaf as it considered investing in the brand — and the kind of company-focused initiatives that followed.