New Money, New Markets

FOR A BEVERAGE WITH A SHORT name and a simple purpose, mix1 leaves a lot for the marketer to explain. The product blends fruit concentrates, whey protein, fiber and – believe it or not – olive oil into a drink that packs elements of a macrobiotic diet into 11 ounces. Add that to the brand’s friendly, brightly-colored packaging, and it may be difficult to believe that mix1 is meant for athletes – until you see one of the men behind the brand. Co-founder Dr. James Rouse, a naturopathic practitioner and local television personality, follows such an intense workout routine that, at a recent Major League Baseball General Managers’ meeting, his Atlas-like figure reportedly stirred the fascination of the New York Mets’ athletic trainers. To say that he’s the poster-boy for mix1 would be more than a figure of speech. Each of the brand’s promotional videos features Rouse, who is living, muscle-bound proof that you can be simultaneously hardcore and holistic.

Even with its unique pitchman, mix1 has taken a long time to catch on. Rouse and his partner, Stroh brewing family scion and IZZE co-founder Greg Stroh, have tinkered in their native Colorado for three years, trying to convince consumers to accept that a pre- or post-workout meal replacement drink can also pack fruit, salad, and, yes, one of the key elements in salad dressing.

Recently, things started to click. Last year, the company added a CEO to handle operational tasks while Stroh and Rouse focused on promoting the brand and positioning it to reach its target consumers. Their efforts attracted the attention of Highland Capital Partners, which boosted the brand with a $6 million capital infusion and a go-for-it attitude that echoes that of Stroh and Rouse. Armed with that cash and the connections that come with a financial partner with investments in firms like City Sports, Pinkberry and owater, mix1 now aims to build a national brand – traditionally an uphill climb for products trying to break out of the natural products channel.

To scale up, the company has taken a market-by-market approach. At the start of 2010, mix1 blitzed Boston, Atlanta, Florida and Boulder, Colo., a suite of markets CEO Bob Pinkerton said contain a high concentration of receptive consumers, an anchor retailer or distributor and the infrastructure to spread the brand’s message quickly.

“Getting that message to consumers in an efficient way when it’s also combined with deep distribution is kind of the one-two punch,” Pinkerton said. “Pretty soon, you’re able to handle large national retailers.”

The company has already demonstrated its ability to ramp up. After previously appearing in just a few hundred stores in 2007, was slated to be in more than 10,000 stores by the end of 2009. In the Boston area, Stroh said, the product appears on the shelves at all Shaw’s and Stop and Shop supermarkets. The brand’s web site also lists more than 700 stores in Florida – mostly Publix locations – as well as placement at about 300 Publix and Kroger stores in Georgia.

In support of that roll-out, Rouse has worked with professional athletic trainers to try to place the product in Major League Baseball clubhouses. Meanwhile, his feet on the street are reaching crunchy-leaning amateur athletes with a penchant for healthy eating where they train. In Boston, for example, Rouse said mix1 will focus less on big events like the Boston Marathon and more on networking through trainers, clubs and gyms.

“There are so many running groups around Boston,” Rouse said.

He and Stroh said they encourage local staff to embrace a healthy, active lifestyle to help them better understand their consumers and speak from a position of authenticity and authority. Stroh said the company is also working with Lone Star Distribution to place mix1 in gym coolers and drive trial where their consumers are most likely to be interested.

And it’s finding the consumers where they are that is they key for a functionally brand like mix1.For example, Haley Roose, general manager at Tunies in Coral Springs, Fla., said bottles of mix1 regularly cross her checkout counter, but Wes Cooke, grocery manager at Mother Earth in Gainesville, Fla., said his company recently dropped the line because it didn’t sell. Cooke personally liked the products, he said, but, even after passive sampling and price promotions, his clientele didn’t cotton to it. The difference? Tunies shares a palm-shaded street with an L.A. Fitness location, and Roose said her customers usually buy the product on the way to or from the gym. Cooke said his store caters mostly to retirees and stay-at-home moms.

While mix1’s experience at Mother Earth might constitute a setback, Stroh said he expects his company to wander down a few dead-end streets. He and Rouse are giving its field marketers the latitude to call the shots in their local landscapes. Each market is different, he said, and therefore each will grow differently.

The brand has an edge in Boston, though, where Pinkerton said it benefits from Highland’s local connections. The company also boasts other built-in advantages. Calling crunchy-Mecca Boulder, Colo. home lends credibility to the brand, Rouse said, and its founders, are uniquely qualified to promote natural, nutritional beverages. Stroh boasts his history with IZZE and Stroh Brewery Co. Rouse, in addition to his medical credentials, has written several nutrition books and hosts the Optimum Wellness TV program in several western cities. He also appears on news programs as a nutrition expert, a platform he has used to subtly give exposure to mix1.

Going forward, Stroh said mix1 will work with retailers in its maturing markets to roll out multi-packs and cases. The company will also lean on Highland’s expertise in choosing new target markets, mentioning California, Texas, Arizona and Chicago as places that might make sense.

Making sense is an important concept for mix1, as it grows and tries to reach out. One way it will try to do so is by keeping the brand simple. The brand debuted in 2007 with four flavors of its protein drink. It later added a fifth flavor, and, In late 2008, mix1 debuted a two-SKU line focused on fiber. Stroh and Rouse said their field marketers will only have to manage those seven varieties for the near future. While they have ideas for new products, they said, developing nutritionally complex organic supplements takes time. The company is currently more concerned with creating a deep footprint rather than a wide one. When mix1 does announce a new product, though, Rouse said it too will address the needs of the athletic community.

By that time, the brand could boast a deep presence in a handful of markets. Stroh and Rouse’s field marketers could take new varieties straight to the same gyms, trainers and athletic clubs where they’re already introducing mix1’s fiber and protein lines. First, though, they need to find more consumers eager to accept that their fiber and protein can come with a salad.