Koa Ceases Operations, Founder Joins Dirty Lemon as COO

Unable to secure the necessary funding to continue production of its uniquely formulated beverages, Koa has shut down. Launched in 2009, the company developed a proprietary process to extract sugar and calories from a blend of fruit and vegetable juices, resulting in a clear, nutrient-rich drink that Koa marketed as “olakino.” Founder and president Adam Louras has moved to Dirty Lemon Beverages, a maker of detox and wellness drinks sold direct-to-consumer, as its COO.

Despite making meaningful strides in distribution and consumer education during the first half of 2016, Koa filed for bankruptcy in January, a decision that came a few months after the company’s initial investors pulled a planned capital infusion, according to Louras. With the support of Koa advisor Ken Sadowsky, Louras had attempted to secure funding from several CPG-focused private equity firms, but was unable to agree on terms with the company’s board.

“The original idea of ‘we’ll fund this thing till the end of time’ started to evaporate,” Louras said of Koa’s investors. “[We’re still] iterating and pivoting and trying to get the education side of this down, which is the ultimate challenge for Koa. If we could just crack that code, we could explode; that was the belief. We needed potentially $10 million-plus to keep this thing going.”

Koa raised approximately $1.4 million in February 2016, but the funding and cash flow were not sufficient to support its operational model, which included production at company-owned and custom-equipped manufacturing facilities in Dallas and San Diego. Louras estimated Koa’s burn rate at $45,000 a month.

Koa’s physical assets have all been sold and Louras anticipates bankruptcy proceedings to wrap next month. But Louras himself has already moved on: he took up the reins of operations at Dirty Lemon at the beginning of the year. Dirty Lemon co-founder and CEO Zak Normandin became acquainted with Louras several years ago and the pair developed a mutual respect for their respective companies and skill sets.

“He’s the best demand creator I’ve ever met in my entire life,” Louras said. “Zak has a magic of getting on the pulse of what consumers want and delivering it to them on a silver platter. Operationally, [Koa] was very tight, very sound. We were working on a shoestring budget, and I feel like we had everything running at 100 percent. That was my strength, and I think he knew that about me and we really just complemented each other.”

Louras began advising Dirty Lemon in an informal capacity before joining the company in January. He’s now preparing a move from Dallas to Los Angeles, where, along with New York City, a significant base of Dirty Lemon’s customers reside. With distribution centers in New Jersey and Northern California, Louras said that the company is focused on delivering the freshest possible product via same-day or one-day shipping.

“The goal is a hub-and-spoke model where we’ll manufacture as close as we can so that it gets [to the customer] as fresh as possible, in consumers’ hands within 30 days of the manufacture date,” he said.

Louras is enthusiastic about the future of Dirty Lemon and its innovative sales and distribution model. And while he’s disappointed about the end of Koa, he’s buoyed by a steady flow of outreach from loyal customers.

“I still get emails today from people who want to know ‘When is it coming back? I’m so excited!” he said. “I still write back to all those people to let them know that unfortunately, it’s not on the market anymore. But it feels good to know people loved it.”