Functional mushroom drink maker Odyssey has raised $6 million in a new funding round backed primarily by family offices and individual investors, as the Florida-based company seeks to build on expansion gains from 2023 this year.
Founded in 2020, Odyssey produces a variety of 12 oz. canned beverages made with a blend of Lions Mane and cordyceps mushrooms. The brand has three lines, including its flagship Mushroom Elixir, made with 85 mg of caffeine per can, the Odyssey 222 energy drink line, containing 222 mg of caffeine, and the caffeine-free Revive line made with “mood-enhancing magnesium” and other functional ingredients.
The new funding brings the brand’s total cash raised to over $14 million, including a $6.3 million Series A round last year and around $2 million of personal investment from founder and CEO Scott Frohman.
This latest capital injection brings another energy drink entrepreneur to the table: Richard Laver, founder of plant-based medical formula brand Kate Farms and the recently launched Lucky F*ck. He joins Odyssey as a strategic investor via his equity firm Rocket Beverage Group. According to Frohman, Laver has since acted in an advisory capacity.
While Laver and Rocket Beverage are new additions to the brand, around 50% of the round came from existing Odyssey shareholders. Frohman said he has deliberately avoided seeking institutional financing, at least for now, as the brand’s revenue was not yet at a place where larger firms would invest. His preference is to work with smaller investors with whom he can have strong personal relationships and who are willing to allow him to maintain control over the business.
“We’re here at the ground floor, we’re the ones that are making it happen, we’re the ones that are really close to the consumer market, what’s taking place with the distributors, and retailers,” he said. “I think that’s the Odyssey way…. We have to be clever, I think that’s what happens when you’re an entrepreneur, when you’re starting a new brand and new business, and you’ve got to find your way.”
Since launching the 222 line last year, Odyssey has been increasingly focused on its energy drink portfolio. Although the caffeine-free Revive has performed well for the brand in the club channel, Frohman said its putting most of its weight behind the energy business.
“We’re straight up energy now,” he said.
Frohman said he saw an opportunity last year when Monster acquired Bang Energy to quickly grow the brand’s presence in the energy drink category, moving swiftly to expand its DSD network with some of Bang’s former distribution partners and hiring former Bang salespeople – ultimately bringing Odyssey’s total headcount to 44 full time employees.
Charting the Convenience Path
The new financing is going directly towards further growth, paying for new personnel and distribution, as well as increased production to fill the growing footprint.
Frohman said Odyssey has around 60% ACV in the natural channel, including retailers like Erewhon, Bristol Farms, Wegmans, Lazy Acres and Fresh Thyme, as well as a recent expansion into Sprouts. But with energy taking center stage, Frohman wants to take the brand deeper into the convenience channel.
Odyssey has recently added new DSD partners such as Heidelberg Distributing, which covers Ohio and Kentucky, and Savannah Distributing in Georgia. Frohman said the brand is also fully covered in Michigan and the Los Angeles area through DSD partners.
While it does have Molson Coors aligned DSD house J.J. Taylor to cover its Publix accounts and other Tampa Bay area stores, the brand is also self-distributing in Florida to some independent convenience accounts, Frohman added. The company purchased four trucks and is covering the state from North Miami to Orlando, plus Fort Lauderdale and Palm Beach.
In June 2023, the company hired former Bang national director of sales operations John O’Meara as its VP of sales, whom Frohman credited with helping build Bang’s own direct self-distribution network.
“I think there’s opportunities to get DSD down here, but you know what, we’re not going to rely on getting the DSD down here,” Frohman said. “We’re going to rely on our own abilities to sell with our own direct distribution, like Red Bull did, like Bang did. Maybe one day we give it to DSD, maybe one day we say ‘You know what, we’re not giving it up.’”
Odyssey is also available via KeHE and UNFI. As well, Odyssey has added wholesale distributor McLane to service 7-Eleven accounts where its core 85 mg caffeine line has been added.
With expansion, Frohman is also thinking more about production. He said the company has typically produced around 2.5 million cans in a single production run and has now begun doing runs monthly with the aim of more quickly turning over inventory.
In October, Odyssey hired former Bang senior supply chain data manager Lane Ory as its director of supply chain, who Frohman said has been diligent in increasing margins and lowering ingredient costs.
“The idea is to not only keep the expenses where they are, but we’re actually seeing some efficiency now to actually bring the expenses down and still continuing to increase our sales, and really pointing out that gap of loss. We’re seeing what it takes to really be profitable in this business.”