Yesterday, protein-centric brand Powerful announced the close of a $4 million round. The capital is a combination of equity investment from River Hollow Partners and asset based lending (ABL) financing through Gerber Finance. The raise marks Powerful’s first institutional capital. The company has raised $3.5 in funding to date, including a round on investment platform CircleUp.
Currently the Miami, Florida-based producer of Powerful Yogurt and Powerful drinks, as well as an emerging product, high-protein Powerful Oatmeal, is in over 10,000 points of sale, including select Walmart, Target and Kroger stores.
CEO and founder Carlos Ramirez told NOSH that Powerful is on track to close out the year with $11 million in sales and he expects to double that to $22 million next year.
Key to that growth is the new round of funding. Ramirez said that more capital is needed in order for the company to keep up with demand and compete with increasingly larger retailers and competitors.
“We have a lot of stuff happening in the marketplace. You hear all these big companies say they are [investing] in the millennial consumer. On the other hand, you see the Walmarts and Targets and Krogers saying they are going to be doing less with these big companies and more private label and relying on small brands like ours,” Ramirez said. “And in reality, we are seeing it happen. We’re seeing Walmart and Kroger approaching us for new products and to infuse our brand DNA into different categories.”
Ramirez said he whittled down the investment process from 50 options to 30 and finally a final handful before choosing to partner with River Hollow — who he felt best supported his R&D strategy as well as his brand DNA.
That DNA has shifted since the company’s launch in 2013. Originally Ramirez positioned the company as a men’s brand, a move he now deems a “marketing stunt” to gain attention in a dairy category that he felt was “conservative” and heavily geared towards female consumers. The move paid off, yielding the company what Ramirez estimates at over $5 million in airtime and publicity. But now he is pivoting the message to make it more about any consumer who wants to feel powerful and lead an active lifestyle — male or female.
Originally launched as “Powerful Yogurt,” as Ramirez decided to move out of the dairy category, he chose to rebrand as simply “Powerful.” The hope is to one day be able to play accross the store and with a variety of protein sources.
For now, to stay true to its dairy roots, Powerful is primarily sticking with whey or dairy based protein. In January the company will launch a Greek Yogurt smoothie pouch along with a still under wraps snack product. Both will be exclusives with a major retailer such as Walmart or Kroger, Ramirez told NOSH.
But that’s not the end of Powerful’s R&D pipeline. Ramirez said the company is also working to release Powerful Water, which will feature added collagen protein and electrolytes. As part of this launch, the company in talks with an NBA player from the Miami Heat to invest in and represent the new line. A point of differentiation, Ramirez said, is that unlike other protein waters, which he finds “syrupy,” he hopes Powerful Water will be more refreshing — similar to a healthy, protein-infused Gatorade.
Ramirez learned the hard way about new product launches. Previously the company had a Greek yogurt-based, probiotic protein bar, but pulled the item off shelves in under two years. Ramirez told NOSH that the issue was that in a crowded category, he didn’t feel his bar was differentiated enough. At a certain point, he realized, Powerful would need to invest far more capital to stand out and compete against larger players. Instead he decided to leave the category all together.
However, the bar did open a new door for the brand that has continued over with Powerful’s oatmeal launch: e-commerce. Ramirez said that perishable drinks and yogurts don’t lend themselves well to the new retail medium, but oatmeal does, and has been proven to be successful online. As a result, he plans to use some of the capital to focus on e-commerce as well as the convenience channel.
While this may seem like a full innovation and retail pipeline, Ramirez says he’s very deliberate about next steps.
“[We want] a brand that can travel across different categories, as long as we can disrupt it,” Ramirez told NOSH. “Whenever we can infuse our brand DNA and create an impact and disruption, we’re going to do it it.”