Despite challenges building awareness and educating consumers about its uniquely formulated calorie- and sugar-free juices, Koa is making headway using a carefully planned marketing strategy to carve out shelf space in specialty and natural retailers in Southern California, Texas and parts of the Northeast.
Beginning with a blend of fruit and vegetable juices, including pomegranates, bamboo, mint, lime, amla fruit, annatto, guava, holy basil, red sea lettuce, lemongrass, carrot and lemons, Koa’s beverages are produced akin to how skim milk is made. The blend is run through a centrifuge, which separates its components, and derived from the process is what Koa calls “olakino,” a vitamin- and nutrient-laden liquid that contains no color, sugar or calories. Marketed as Koa Natural Olakino, the line comes in three flavor varieties: Original, Raspberry and Lavender.
Packaged in a transparent plastic bottle, the olakino looks like water — except that it’s not. Countering the resemblance to water is a main focus of the company’s marketing efforts, including in-store promotional material and social media, which attempt to position Koa products as healthy juices.
“Koa is a high education product,” said founder and CEO Adam Louras. “You can’t just put a slogan on a bottle and think people are going to understand what it is, because there’s nothing you can compare it to. Except water, which we’re not, and that’s the most frustrating part.”
Using a simple statement of “no, it’s not water” as one of its primary taglines, Koa employs nine brand ambassadors located in various parts of the U.S. where the brand is sold. Their job is to educate target consumers — primarily health- and fitness-oriented women — about what makes the beverage different. The ambassador team is a critical piece of the company’s marketing strategy: meeting consumers in-store offers a key sales assist for the clear liquid, which retails for about $5 for a 12.7 oz. bottle.
Making the sales pitch in new markets requires a similar approach, albeit with an emphasis on patience. Louras said that when Koa makes its debut in new city, the company has a year-long vision for cultivating a consumer base. It is broken down into three parts. The first is simply telling people that Koa is not water (“it’s the most they can digest” at the outset, Louras said.). After a few months, the messaging shifts to “it’s sugar-free juice; it’s unlike any juice you’ve ever had before.” The final phase focuses on creating an emotional connection, or as Louras puts it, the “Why do I care? What is it for? What are the benefits?” part.
“Nobody’s really interested to hear [the third] part, until they’ve digested what it actually is and what it’s not,” Louras said.
Along with the addition of new distribution partners, the measured approach to sales and marketing has been key to Koa’s expansion strategy, Louras said. Koa is now sold in more than 100 retail stores, primarily at specialty, natural and independent grocers, including Dean & Deluca, Bristol Farms, Balducci’s-owned banners, Gelson’s and Kings. The brand is also represented at The Ritz-Carlton and a handful of luxury hotels.
Dean & Deluca was the first chain retailer for Koa, and in 2014 it launched the brand in 10 locations across the U.S. The specialty grocer operates five locations in New York City and after a short period of Koa shipping direct to the stores, Louras, who noted that “you can’t dabble” in the region, signed with natural/specialty DSD wholesaler Gourmet Guru, which distributes Koa products in metro New York and Boston. Gourmet Guru also carries a range of other small entrepreneurial beverage brands as part of its portfolio, including Pure Brazilian Coconut Water, HPP lemonade brand Sweet’Tauk and cold-pressed juice brands Juici and Love Grace. Louras praised the distributor for its retailer relationships and reach in the Northeast.
Koa also works with a number of other DSD partners, including Bertrand’s in the Dallas-Ft. Worth and Houston markets, Monterrey Food in San Diego and Comfy House Foods for Los Angeles and the Southern Pacific region. While Koa had gradually expanded its reach beyond its home market of Dallas, Louras sees big opportunity to stay within the borders of Texas and recently landed a deal with natural wholesale giant KeHE, which now carries Koa beverages in its distribution center in the state.
Distribution growth has resulted in Koa nearing $1 million in sales run rate, Louras said. Now the company is in the midst of securing new financing that will be employed to get Koa to its “next big goal” of $5 million in sales. Louras said that Koa is close to finalizing a new $350,000 capital raise and hoping to complete a $2 million funding round in April.
Part of the funding will be used to support new innovation, including a sparkling line of products that is in development. Aiming to launch the line next year, Louras noted that because of the complex process to produce the still line, it’s been a more difficult process than simply adding carbonation. Nevertheless, he views it as a worthwhile project that will pay big dividends as the market for zero-calorie carbonated beverages continues to expand.
While he’s upbeat about the company’s development and plans for the future, Louras says that he tries to stay grounded and keep perspective in the rough-and-tumble beverage business, often paraphrasing a quote from boxer Mike Tyson when describing his current journey:
“Everybody’s got a plan ‘till they get punched in the face,” he says.