Vital Juice Ceases Operations, Founder Seeks Buyer

Vital CitrusEdward Balassanian will tell you: the cold-pressed juice category just ain’t what it used to be.

Vital Juice, which differentiated itself from other cold-pressed juice brands via a unique regional production and local marketing strategy, has ceased operations. Balassanian, the founder and CEO of Vital Juice, told BevNET that the decision to shut down was the result of several factors, one of the most significant being the remarkable pace at which the category is evolving.

“When you’re looking at a start-up and a small company in this space, the small company has to have the advantage of speed,” Balassanian said. “And the timing has to be perfect; you have to hit the wave at the right time. If you’re too early or too late, then your smallness can work against you. I think that’s where the cold-pressed juice space is right now.”

Balassanian said that since the launch of Vital Juice in July, 2013, change in the cold-pressed juice category has come fast and dramatic, particularly with regard to the number of brands in the segment, rapidly falling price points, co-packers entering the space and a scarcity of quality produce. The result has been to the detriment of small companies like his.

Vital Juice had predicated its business model on the development of small, regional production facilities that it called “micro-juiceries” as a way to give it greater access to local ingredients and faster delivery of its organic, cold-pressed juices to retail customers. The company had operations in Seattle and Los Angeles, and in December announced that it had entered the New York City market. Once produced, the juices would then be sent to a local high pressure processing (HPP) toller.

By January, however, Vital Juice had liquidated its facilities and began to work with regional co-packers and HPP tollers to produce its products. At the time, Balassanian cited a quicker turnaround in production and processing of the juices as the reason for the significant shift in the company’s business strategy.

Speaking with BevNET yesterday, Balassanian explained that there was another key reason behind the pivot: readying the company for a potential sale.

“A lot of that was really structuring the business so that we’d be in a better position to sell,” he said. “The focus was really… on the core things that mattered, which is really sales and marketing. When we looked at it, it didn’t make sense for us to continue running the business as an aggressive start-up. It makes much more sense to get it in the hands of a sophisticated player that can bring their existing infrastructure to bear and lay us on top of it.”

Balassanian said that he is currently in acquisition talks with to a “very large national beverage brand that does not have a cold-pressed juice story right now.” There are also talks with several food retail partners, he said, that could layer “Vital on top of what they already do.”

“Ideally what we’re looking for is a buyer that basically wants a turnkey beverage brand to bring to market,” he said. “We essentially developed 18 different flavors, we did all the packaging, all the branding, all the labeling, all the outdoor design, the vehicle wrap, the website, the RP platform; everything is basically packaged up, ready to go with distributors and top-tier customers, like Costco, waiting for the product.”

Balassanian referred to “market testing” of Vital Juice in New York, Los Angeles, Seattle and San Francisco as proof that the company identified the right price point, nutrition and package size for the brand.

“The buyer is getting a huge head-start,” he said. “It would be at least a year of R&D to get to where we got to, and a significant amount of capital as well.