Protein2o has completed an initial round of capital raising through a partnership with investment firm CK Capital Partners, which will provide the brand with more than $6 million in equity and working capital, according to a company release.
Protein2o has steadily expanded its footprint in the past few months, adding distribution in retailers such as Hy-Vee, Mariano’s and Vitamin World. The capital raise will help the brand meet the rising demand that comes with being a part of the versatile protein category, one of the fastest-moving segments in the beverage industry.
The category has experienced no shortage of innovation and competition in the past few months. Recently-sold Cytosport, Inc., which markets Muscle Milk, introduced Muscle Milk Organic, which is sweetened with a blend of organic cane sugar and stevia. In May, Monster unveiled its newest beverage, Muscle Monster, which combines 25 grams of protein with an unspecified dose of caffeine.
In the release, Protein2o co-founder and CEO Bob Kral said that despite his initial optimism, he didn’t expect this level of demand. The raise will help him keep up.
“Although it’s a great problem to have, ensuring we’re keeping up with our rapid growth is critical,” Kral said in the release. “For example, we’ve expanded into our second bottling plant and anticipate onboarding our third later this fall.”
The full release is below:
CHICAGO — The beverage innovators at Protein2o Inc. – a Delaware corporation – announced today that they have completed an initial round of capitalization with access to over $6 million in equity and working capital thru its partnership with CK Capital – a capital management firm specializing in actively managed investments.
Protein2o has prepared itself to meet the rapidly increasing demand for its naturally flavored waters enhanced with protein and electrolytes. After a period of testing in gyms and two regional convenience store chains at the end of 2013, the company began selling in earnest in 2014.
Co-founder and CEO Bob Kral stated, “The founders of Protein2o are all experienced Retail, Beverage, and Distribution executives so we knew we had to offer an affordable product rooted in a key consumer need. We also knew we’d have to serve our retail customers and other distribution partners with excellence. Even the best product won’t succeed if its poorly serviced and marketed—you have to flawlessly execute. Our preparation, including our capital plan, is allowing us to deliver on every aspect of the business as we tap into the latent consumer demand Protein2o is satisfying.”
Based on the success of its 2013 market tests, the firm sped up plans to begin selling through primary consumer channels. Beyond fitness centers and gyms, several convenience, grocery, drug, and specialty chains are now selling Protein2o – including innovative retailers like Hy-Vee, Mariano’s, Roundy’s, Sunset Foods, Fareway Foods, Woodman’s Markets and Vitamin World. Approvals and formal market tests with other national U.S. retailers across all distribution channels are entering next phases. Further, major national distributors like Eby-Brown and McLane have approved the products for their distribution network. The firm has also initiated shipments into Canadian markets and is nearing exporting programs into Europe and Australia.
Mr. Kral continued “We thought we were going to be successful, but even our in-depth planning didn’t foresee how much demand there is for a low-calorie, great tasting water infused with protein. Although it’s a great problem to have, ensuring we’re keeping up with our rapid growth is critical. For example, we’ve expanded into our second bottling plant and anticipate onboarding our third later this fall.”
Early sales volumes indicate consumers are seeking healthy beverages and low-calorie protein sources that taste good. In its first six months, Protein2o’s sales have already exceeded levels achieved by several other successful beverage start-ups in their first year of business – including the highly successful launch of Honest Tea, a benchmark comparison for the firm.
“When I was the SVP of Merchandising at Walgreen’s, I launched several products and I’ve never seen a product start as quickly as Protein2o with the exception of 5-hour Energy and Vitamin Water. Those products created a new category or sub-category by meeting a consumer need so it worked for the manufacturer, the retailer, and everyone in-between. We’re doing the same here,” concluded Mr. Kral.
Protein2o was born from the crazy idea that there’s a better way to consume the two most important nutrients to our body, water and protein. A way that doesn’t taste chalky and isn’t filled with calories, carbs or even sugar. Behold, Protein2o, crisp, clean water enhanced with 15g of protein to nourish your body and electrolytes to keep you hydrated. Our light, thirst-quenching flavors, Berry Splash, Grape Splash and Lemon Splash, will make your taste buds’ dreams come true and change the way you think about protein. To learn more, visit us at drinkprotein2o.com or join the protein movement @protein2o.
Protein2o Inc. is proud to be an employee owned company.