It’s an international brand, and now, with cash in hand, it’s time for international growth.
That’s the way Icelandic Glacial CEO Reza Mirza categorized this week’s news that the brand had received new equity funding from a group of new and existing investors. Reached by BevNET after his return from Europe this week, Mirza said the new financing and investment partners will position the brand for significant growth in the U.S. and elsewhere over the next year, with plans to expand its sales and marketing teams across channels and increase capacity at its Iceland production facility in order to meet demand and fuel innovation.
“We have been showing strong double-digit growth with very constrained resources,” Mirza said. “So now with this investment which is coming in, our team is very excited to not only have the right product selection for the channel, but for us to really invest in sales and marketing. Our marketing budgets have been so small all these years that now we really want to invest in building the brand and achieve the ambition that we have as an organization.”
The investment, announced Wednesday, saw the nearly 20-year-old brand sell a “substantial stake” in the international brand to Iceland Star Property Ltd., a holding company based in Liechtenstein. The deal also included additional funding from existing investors, including the brand’s founders and Blackrock’s U.S. Private Credit team, which converted and reinvested the bulk of their existing debt in the company into equity.
As part of the deal, a new board of directors was appointed with incoming chairman Johan Dennelind, who has previously served as president and CEO of Swedish telecom multinational Telia.
Icelandic Glacial produces a line of naturally alkaline spring waters sourced from Iceland’s Ölfus Spring. In addition to still water offerings in various formats, including plastic and glass bottles, the brand has recently expanded its portfolio into flavored sparkling waters and, coming this fall, canned still water.
According to Mirza, about 75% of Icelandic Glacial’s business is in the U.S. where the brand has around a 60%-65% ACV in the conventional grocery channel. Because the company has been working from limited funds for years, Mirza said he has taken a channel-by-channel approach to the market to avoid spreading resources too thin.
With this new round, Icelandic Glacial is now setting its sights on convenience stores, as well as an expanded presence in on-premise and foodservice. Its upcoming 11 oz. canned line, Mirza said, will be a focus for both channels while its glass products – which are once again in production following a supply disruption last year – will be pushed for on-premise.
The company will be expanding its sales and marketing teams, he added, and has already finished hiring new positions in Los Angeles with the next target being a larger headcount on the East Coast and in Chicago, seeking area and regional sales managers. In particular growing the on-premise team is a goal – the company currently only has one person running that channel.
“Our strategy is to put people in markets where we [already] have retailers,” he said. “I’ve seen too many brands put in people and then they wait for the business to come; our strategy has been to get the business and then start the people.”
Internationally, Icelandic Glacial has around a 65% market share for bottled water in its namesake nation of Iceland, while the U.K., Canada and the Middle East are “growing significantly,” Mirza noted. Across all countries, he said the international business is up around 180% year-over-year.
The new investment group is expected to be helpful in opening up new opportunities in the European market, he said, and has already introduced the company to several major retail chains there.
The company is also putting funds into its manufacturing expansion, which it intends to expand by 30,000 square meters (about 323,000 square feet). That growth will also support Icelandic Glacial’s ability to innovate; Mirza said the brand is aiming to become an “all-around hydration” platform with “an Icelandic essence.”
“The heart [of the brand] is all about Icelandic and the purity,” he said. “That is going to be part of the factory expansion – to really supply all the innovation that we are going to be launching.”