Soup-in-a-bottle brand Tio Gazpacho is aiming to wrap up a $500,000 round of funding that will be used primarily to expand sales and marketing of its high pressure processed, organic gazpacho products, according to company founder Austin Allan.
Launched in 2014, Tio Gazpacho has over the past year ramped up distribution beyond its homebase in Miami. The brand, one of a handful operating in the nascent category of bottled soups, is now represented in retailers in the Northeast, Mid-Atlantic and South Florida. With its tagline of “no bowl required,” Tio markets its products as healthy and convenient meal replacement beverages and has carved out shelf space in the produce departments of natural and specialty grocers.
The plan for 2016 is to support current and new distribution with consumer education and marketing initiatives that will be crafted using sales and survey data that Tio has culled in recent months.
“This year has been a learning year for us,” Allan told BevNET. “So we took it a little slow on the sales side to figure out everything from velocity to placement to customer perception to buyer perceptions. Now that we have data under our belt, our 2016 plan is to really go for the gold. It is a product that requires a little bit of demos as we go into a new retailer, it’s a product that requires a little bit of consumer education, because they’re not necessarily familiar with drinkable gazpacho, or drinkable soup at all. And we’re going to do a little bit more PR and kind of fun things to get people aware of our brand.”
The new funding will also be used to support the launch of a new watermelon gazpacho that Tio is developing, Allan said. The company plans to introduce the product in early 2016 with the aim of having a significant distribution presence by spring.
Tio began its search for new capital in July and has since drawn interest from a range of potential investors, with Allan tapping a personal network of contacts at the outset of the raise. The company has also derived some investment opportunities from CircleUp. Allan noted that the online crowdfunding platform has offered the company a good place to market the raise, though Tio has yet to finalize any agreements through the service.
Pricing the round at a half-million dollars was a key aspect of the company’s funding strategy; Allan was concerned that a larger amount could result in a lengthy and complicated raise.
“My strategy was… a fair, but attractive number, to not spend too much time fundraising because I have so much that I’m working on,” Allan said. “I wanted to make it so we could move through the process quickly and not get caught up in negotiating over $50,000 and half a percentage point and things like that.”