Bottled water producer Kona Deep Corporation announced Tuesday it has secured a $5.5 million investment from Danone Manifesto Ventures, Grand Crossing Capital and local Hawaiian investors. This is the fifth investment from the year-old funding arm of Danone, which focuses on supporting innovative and healthy food and beverage companies.
Founded in Hawaii in 2014, Kona Deep manufacturers a premium bottled “deep ocean” water sourced from the Pacific Ocean. The water is desalinated but retains its naturally occurring electrolytes and minerals, a quality that CEO Patrick Turpin said gives the brand an edge in the rapidly growing premium water category, which is dominated by either natural spring waters or performance waters with added electrolytes. The brand has is currently available primarily at retailers on the West Coast, but Turpin told BevNET that the new investment will help the brand expand to new regions in other areas of the country.
“Danone as a partner, from our standpoint, brings a lot to the table given their deep experience in the premium water set globally,” he said. “They believe as we do that there are some deep ocean water opportunities both internationally as well as in North America.”
Turpin, previously the founder and president of snack company Popchips, added that he felt Danone shared Kona Deep’s commitment to environmental sustainability and health, and that part of this funding will go toward those efforts.
Earlier this year Kona Deep entered the Chicago market via local chains such as Mariano’s and Fresh Time. The company plans to launch in the Northeast some time in the first half of 2018, Turpin said, noting that the brand’s current focus is on securing placements in the conventional and natural grocery channels.
“Our primary consumer is a healthy active consumer who is looking for more from their water,” Turpin said. “And in the channels that kind of consumer shops at, which is primarily natural and grocery, premium water tends to sell well.”
In addition to retail expansion, the funding from Danone will go toward increasing bottling plant capacity in Hawaii. The company is also expanding its team for new markets, as well as hiring additional sales and marketing personnel.
Launched in September 2016, Danone Manifesto Ventures has previously completed investments in France with Yooji and Michel et Augustin, as well as U.S. based companies including salad-dispensing vending machine startup Farmers Fridge and venture fund Accelfoods.
The investment in Kona Deep also gives Danone another addition to its portfolio of premium waters; the company owns spring water brands Evian and Volvic.
In a press release, Danone Manifesto Ventures managing director Laurent Marcel praised Kona Deep as a strategic fit for the firm’s portfolio, adding that the brand has created a new water category with its deep ocean source.
“We hope the relationship is very close,” Turpin said of Danone. “One of the things that we have noticed with some of their other investments so far was a focus on real collaboration with their portfolio companies, and that was something that was a real appeal to us. We think that collaboration will only help us in the long run.”