With sales of big soda brands in a sustained freefall, it’s a fair guess that most would be wary of new investment in the carbonated beverage category. Yet where some see a perilous position for soda, some see opportunity, particularly when it comes to innovative brands. It’s that line of thinking that has garnered Spindrift, which produces a line of premium-positioned sodas and seltzers made with fresh juice and purées, a new round of funding worth over $2 million.
Based in Charlestown, Mass., and with production facilities on both coasts, Spindrift is now preparing to ramp up distribution beyond the Northeast and California and extend upon its approach of strategic partnerships with like-minded retailers and restaurants, said company founder Bill Creelman.
Creelman said that Spindrift began its search for new capital at the beginning of the year and was advised by Silverwood Partners, a Sherborn, Mass.-based investment bank. The deal is first as part of a long-term strategic relationship between the two companies. Health and wellness-focused venture capital firm Prolog Ventures led the financing round, which also included funding from several other industry-focused angel investment firms, including New Ground Ventures and Warbros Venture Partners.
Spindrift has seen sales of its products double in each of the last two years, according to Creelman, who expects to see a similar leap in 2014. Some of that boost will come from a foray into the Southeast, where the company expects to make a big push this year backed by the recent hire of a regional sales director for the region. He said that while the company has been “hyper-focused” on its two primary areas of distribution, California and the Northeast (80 percent of Spindrift sales have come from the two markets, he said), Creelman expects the investment to have a big impact on broadening the availability of the brand.
“We see a huge opportunity to be doing what we’re doing in other places around the country,” Creelman said. “Logically for us, the Southeast is an interesting market. But we’re getting a lot of interest all of over the country. We just want to be thoughtful about how we go forward.”
In addition to new distribution, Creelman said that Spindrift, which uses the tagline “a fresh take on sodas,” will look to refine and advance upon its branding and messaging. He noted that the company has leaned on its retail partners to educate consumers about the brand and will to continue to work with its carefully selected retail and foodservice partners — which include the Starbucks-owned bakery and café chain La Boulange, Chop’t, a line of vegan-focused restaurants, Whole Foods, and hundreds of small independent retailers — as well as new ones that can help the company “tell the fresh story together.”
Michael Burgmaier, Managing Director, Silverwood Partners, noted that Spindrift’s deliberate and cautious approach to retail partnerships and the availability of its products is a key element of its overall business strategy, and a very attractive one at that.
“Spindrift has been very methodical — and I think there’s a lesson here for other beverage companies — in how they built their distribution, in how they built their plan,” Burgmaier said. “They’re very methodical about who can take their product; they say ‘no’ a lot. They know a lot in terms of where they want to go and what they feel they’re ready for. Even though they’re doubling [sales], they could have been growing more quickly, but there’s a smart path that can be chosen and executed, and Spindrift is doing that.”