Having completed a $5 million capital raise, launched a new production facility and brought on a proven food and beverage veteran as CEO, 2014 marked a year of transition for Urban Remedy. The company, which leans heavily on e-commerce to market its range of organic, raw food and cold-pressed, high pressure processed (HPP) juice products, also introduced new wholesale and retail storefront initiatives intended to build brand awareness and a new pipeline for sales and customer acquisition.
Earlier this month, we had a chance to sit down with Urban Remedy CEO Paul Coletta, to discuss first his few months on the job, why the company has expanded its offerings beyond cold-pressed juice, his vision for Urban Remedy to become the preeminent marketer of raw foods and beverages, and how the company plans to execute on its strategic goals for 2015 and beyond. We condensed our interview with Coletta, which took place at the company’s recently launched brick-and-mortar storefront in San Francisco’s Cow Hollow/Marina district, into a question and answer format.
BevNET Managing Editor Ray Latif: What’s been your primary focus since coming on as CEO?
Urban Remedy CEO Paul Coletta: I came on about eight months ago, and the primary focus was really to build an operational foundation that we could scale from over the next 5-10 years. And that’s been… the new production facility in Point Richmond, and, as important, the team. We’ve put together an amazing team in our corporate office, which is also co-located in Point Richmond. And then lastly, a lot of the systems, processes and procedures that we needed to make sure that we had the best quality product and the ability to logistically manage that across the nation; we’re a national company today.
RL: While direct-to-consumer e-commerce sales represent the chief focus and largest source of revenue for the company, Urban Remedy has slowly built a brick-and-mortar business as well. Tell us about the progress.
PC: We’ve opened a store on Union St. [in San Francisco], which is one of our flagship locations, and that’s doing very well. In 2015, our plan is to open at least 3-4 additional retail brick-and-mortar storefronts, as well as potentially a number of pop-up [stores]. And those will all probably be in California. We’re not looking outside of California in 2015. We’ll assess that and continue to move forward next year and look at other new markets.
RL: You’ve described the brick-and-mortar storefronts as “3-D billboards” for the company. What’s been the effectiveness in use of the storefronts to drive awareness and sales for Urban Remedy’s online business?
PC: Sixty percent of all of our business comes from repeat [customers]. So, we’re big believers that if you are aware of Urban Remedy and try Urban Remedy, you’ll come back. And not only that, you’ll advocate to other consumers. So, retail, for us, is all about driving trial and online acquisition, and we’ll continue to do that through cross-promotions, in-store, that give you an incentive to get online. For those consumers, it’s really about a convenience; it’s “if I’m at the office or don’t have time to pop into one of your stores, I can go online and get anything.” Everything that is in our stores is also available online.
RL: What percentage of brick-and-mortar consumers does Urban Remedy expect to convert into online buyers?
PC: Ideally, I’d love to turn them into online consumers immediately. [It’s] less capital-intensive. Number two, the margins are better. And number three, we own that customer data; we know 10 times more about you when you purchase from us online than if you walk into one of our stores. And that, to me, is the most compelling reason to remain an online company.
RL: How do you expect your e-commerce business to evolve in 2015?
PC: One of the things that we’re working on is a recurring revenue model with our subscription platform, which we launched a couple weeks ago. For all of our food kits and juice cleanses now online, a consumer can subscribe and save 10 percent by buying into a monthly or weekly shipment. And that’s going to be a big part of our program going forward.
RL: You’ve spoken about Amazon.com as the key to consumer awareness and education about buying perishable food online. Can you elaborate?
PC: Amazon is going to teach people how to buy a head of lettuce [online] as easily as they do a book or a razor blade. Not overnight, but I believe that they will. When they do, there’s going to be a lot of opportunity for companies like ours to own a segment of that business. And in our case, that’s organic, delivered to your door, ready-to-eat. That’s who we are.
RL: Who are the target consumers for Urban Remedy?
PC: It very heavily skews to 35-45 year-old women that are active, that have higher incomes and are willing to spend a little more for better quality food and beverage. It’s no mistake that we’re sitting here on Union St., where they are everywhere around us.
RL: There’s been some concern within the beverage industry that the cold-pressed juice category might be facing some “consumer fatigue” in 2015. How do you address that concern?
PC: That’s why I’ve been so adamant about the transition of this company being an organic food company; I really think that’s the bigger opportunity. Juice plays a very important part of our portfolio, but this is really an organic food company that does juice, not a juice company that does food. I would say that if you looked at us a year, maybe two years, ago, our focus was juice. We did some food, but we’ve dramatically increased our mix. And we don’t see anybody really playing in this space of home delivery, organic food and ready-to-eat. We really see this unique opportunity at the intersection of those three need states that we can own and that we can define.
RL: Do consumers understand what “raw” means as it relates to Urban Remedy’s use of the word? What level of education, if any, is needed to support your definition?
PC: Most consumers, if you asked them to define raw, would say “not cooked,” not using heat. And that’s certainly the case with any of our products. We don’t own an oven. [Education] depends on the market. In this market (San Francisco), you probably do have a high percentage of people that understand and appreciate raw. But I don’t think that’s the case in a lot of markets.
RL: You’ve referred to cold-pressed juice products as “third-wave juice.” Can you explain what you mean by that term?
The first wave was my time at Jamba Juice when we were selling the consumer a better product. It made the consumer feel good because they weren’t drinking a milkshake; they were drinking fruit. The second was my time at POM, where it was all about antioxidants and this idea that you could live forever if you have enough polyphenols and you drank enough juice. I think now the phase we’re in is cold-pressed and the whole idea of “raw.” And the cold-pressed juice space right now is a perfect platform for us to build this food business. It really is an entry for the consumer to get into vegan, plant-based nutrition.