A long-rumored arrangement between Polar Beverages and O Water, the enhanced water/sports drink company started by Nantucket Nectars cofounder Tom First, is nearing completion, First confirmed today.
“It looks like an exciting entrepreneurial opportunity for both companies,” First said, although he would not reveal details of the arrangement beyond making it clear that the company would continue to be an operating entity.
A deal would likely allow O Water, a brand that has struggled to get traction outside of First’s home Northeast region, the opportunity to add financial and production heft from Polar while helping ratchet down pressure from investors, including Highland Capital. Provided that the massive regional distributor could relieve him of the headaches of raising further cash, it would leave First free to concentrate on marketing the brand.
Right now, Polar is O Water’s largest distributor, handling nearly 40 percent of the five year-old company’s volume. That volume has been increasing of late, heading toward nearly 140,000 cases and the company has moved into all seven divisions of Whole Foods from its previous three.
Starting from a split base of functional waters and high-purity “essence” waters, O Water has fought to gain purchase in what turned out to be a pair of highly crowded categories. While First’s marketing savvy and ability to maintain good relationships with distributors has allowed the five-year-old brand many extra bites at the apple, it has had problems finding its niche.
As it has fought to gain purchase in the crowded nutrition/functional water space, O Water has gone through a series of packaging and formulation changes. Investor pressure on the company’s bottom line also became an issue, and shortly before the start of the year several employees were let go.