Though a recent warning letter from the U.S. Food and Drug Administration (FDA) remains an issue of concern, the team at Harmless Harvest believe they have good reasons to be celebrating as they head into 2016, not the least of which is the completion of a $50 million capital raise for the high pressure processed (HPP) coconut water brand.
Harmless Harvest co-founder Justin Guilbert and recently hired CEO Gianella Alvarez discussed the amount of the raise in a call with BevNET Monday, after initially announcing it in a statement published on Harmless’ website. The new funds come by way of increased contributions from the company’s original group of investors, alongside a new commercial banking partnership with Wells Fargo.
“We’re going to be able to significantly expand the footprint of our brand, not only in coconut water but also exploring quite a few other categories,” said Alvarez, who indicated future plans for Harmless’ coconuts beyond their juice. “We’re very excited about that.”
Alvarez would also reveal that Harmless Harvest has now surpassed $100 million in sales since the company’s inception, the majority of which has been achieved within natural and specialty grocery stores, leaving plenty of unrealized growth opportunity elsewhere.
“We have quite a bit of growth in the conventional channel ahead of us,” Alvarez stated.
Harmless Harvest has already begun allocating its resources by bolstering its senior leadership team, adding several seasoned industry executives as part of the company’s pursuit to make the brand a household name. In addition to Alvarez’s hire in September, Guilbert and co-founder Douglas Riboud brought on former POM Wonderful chief operating officer Brad Paris for the same role and Benedicte Bayi as the company’s general counsel. Alvarez has since hired Blair Cornish as chief commercial officer and is currently in the process of recruiting a chief financial officer.
The new funding will also go towards the development of Harmless’ new production plant in Thailand. According to Alvarez, the space will be 10 times larger than the company’s existing plant, allowing Harmless to gradually increase its operations within it over time as additional capacity becomes required to meet consumer demand.
Still waiting for resolution, however, is the company’s issues with the FDA. Guilbert and Alvarez clarified that the company’s decision to pause bottling operations at its existing plant was already in the works prior to the FDA’s warning letter and that the temporary suspension was not a result of the regulatory compliance issues. Nevertheless, the company will spend the winter making the necessary “process enhancements” to both the new and old facilities to meet the FDA’s requirements regarding the validation of critical limits to control microorganisms. While Harmless Harvest is most wary of maintaining a supply chain capable of keeping the product refrigerated throughout manufacture and sale, it is currently attempting to devise, with the FDA, a way to show that its proprietary processes — which include a mix of micro-filtration and HPP — can prevent spores from getting into the product. Alvarez said that she has been involved with the agency in regular discussions to substantiate the company’s methods.
“This is their process,” Guilbert said of the warning letter. “The FDA’s getting us to do improvements and this is the way they communicate formally and we’re responding formally. We have their answers.”
Guilbert said the company’s retail partners and distributors have been steadfast in their support and commitment to Harmless Harvest as it works towards meeting those requirements.
With new money, new digs, and new obstacles ahead of them, Guilbert, Alvarez, and co. will have their hands full in the coming year, but Harmless’ new CEO asserts the challenges are ones the company’s equipped for.
“We want to transform and change the food and beverage industries,” Alvarez said. “We’re trying to do so by bringing much better products to people in ways that use completely new approaches for processing that protect both the nutrient value and organoleptic profiles.”