As the only remianing independent of the “big three” juice brands that deploy high-pressure processing as their marketing and innovation hook, SUJA knows it’s facing deep-pocketed competition from Hain-owned BluePrint and Starbucks-owned Evolution Fresh.
If SUJA doesn’t have the deepest pockets at the table, however, it’s sure got access to a lot of them.
Mere months after picking up an $8 million investment at a valuation of $100 million from Boulder Brands’ venture capital arm, the cold-pressed juice company has pulled in another, undisclosed investment from investment fund Alliance Consumer Growth (ACG), a consumer-product focused group that tries to find next-generation versions of existing categories and deploy minority growth capital as fuel for their growth.
ACG has invested recently in enterprises like Evol frozen burritos, Krave Jerky, and Shake Shack — all three of which fit the fund’s model of looking for “2.0”-type brands in established categories (like frozen dinners, beef jerky, and fast food). With SUJA, the move is to take over the next level of the high-end juice category, long the province of products like Odwalla, Naked and POM. The investment closed shortly before the end of 2013.
“[SUJA has] got a dynamic we like a lot,” said ACG co-founder Josh Goldin, who will become a board member at the juice company. “They’re playing in a really big category that has been largely the same group for a number of years, and then a few companies come along and really innovate a next generation with better benefits and a better value proposition.”
Bust establishing that proposition is one that is capital-intensive at its earliest stages, said SUJA CEO Jeff Church, who noted that the investment will go to help pay for the rest of the company’s investment in juice processing equipment. As demand has grown over the past year, that investment has gotten larger, primarily because the capacity of the equipment has had to increase pre-installation.
“Because of the type of product this is, it’s not something that’s easily copacked,” Church said. “So virtually integrating the manufacturing is something that costs money that normal CPG companies don’t have to spend up front. The con is that it costs money to do — but the pro is that it’s a barrier to entry and in the long run, as you get over your fixed cost structure, your margin is more significant.”
The San Diego-based company is not more than two years old but had a tremendous 2013, bouyed by key retailer Whole Foods’ recent commitment to developing the next level of the juice business that Evolution, Suja, BluePrint, and a myriad of regional players represent. Over the course of the year, SUJA has quickly professionalized its staff from an entrepreneurial core to one that has added veterans from across the beverage business, and expanded from its “Classic” line of mixology-based juices to a smoothie line called “Elements.” That’s an advantage, according to Goldin.
“It’s a credit to the quality of the products, the momentum, the business, that they’ve been able to attract really high-quality beverage talent,” Goldin said. “Jeff has done a great job of expanding the team.”
As for the speed at which the company has closed rounds, Church said, it’s strategic.
“My philosophy is to not take on too much at one time,” he said. “Companies that tend to take on too much too fast tend to squander it. It’s more prudent because it’s not as dilutive to existing shareholders, and secondarily, I think it encourages more careful fiscal management — which is always prudent.”