In the surging premium water category, Essentia continues to set the pace.
The Seattle-based brand, which markets an ionized alkaline water with a pH of 9.5 or higher, is hardly the newest or shiniest brand to claim a piece of the premium water market. Founded in 1998, Essentia enjoyed modest but consistent growth as premium water slowly expanded from a niche sub-set of the water category into one of the fastest growing segments in beverage.
Fast forward to the present, and Essentia amongst the category’s leading brands; the company brought in over $124 million in retail sales in 2017, and has rode that momentum into this year. In a 52-week period ending on March 25, retail sales totaled over $136 million, representing an 84 percent increase over the same period last year. Just in the first quarter of this year, it added a further 22,000 points of distribution (with another 50,000 expected to join in the next three months) and drove approximately 30 percent of growth in premium waters. Overall in that period, according to IRI, MULO and C-store sales of premium water were up 16 percent, compared to an increase of 6 percent for all bottled water products.
Even with those positive numbers, for CEO and founder Ken Uptain, Essentia’s 2018 strategy remains the same as in prior years, even as his own role has changed. The goal is to continue to drive growth, all while making tweaks and improvements to the engine itself.
“My job running the company has evolved more into managing the company in a culture and sales kind of way,” said Uptain in a call with BevNET. With 125-130 current employees (“We are hiring more almost every week,” Uptain said) and 45 new distributor partners added so far this year, Uptain is the captain of a much bigger ship now, which brings new challenges. “I spend a lot of my time maintaining the culture of the company that we’ve built over these years which is vital to what we do,” he said.
After establishing itself as the top premium water brand in the natural channel, much of the brand’s new distribution has come in convenience, mass and club stores. By the end of June, Uptain said the brand will have achieved its years-long mission of creating a full national direct store delivery (DSD) network, which he characterized as the “number one priority for our distributors.” That group includes the likes of New York’s Big Geyser, Massachusetts-based Polar and The Honickman Group of New Jersey. Essentia also moves through Anheuser-Busch and MillerCoors distributors in select regions, such as Hensley and Co. in Arizona.
As the company has grown, Essentia has also evolved how it presents itself as a brand. In prior years, the brand emphasized the specific health benefits of drinking alkaline water; just last year, for example, it touted a study published in the Journal of the International Society of Sports Nutrition that stated Essentia was almost twice as effective at rehydrating adults who consumed it after a period of exercise-induced dehydration.
Yet while Uptain is still keen to tie Essentia’s success back to the product itself, he also acknowledges it has pivoted towards a lifestyle brand. He praised the 2015 hiring of experienced marketing executive Karyn Abrahamson for leading last year’s brand overhaul — which included a new logo, new tagline (“Overachieving H2O”) and multi-city advertising campaign — to target millennial consumers aged 18 to 34. Within that demographic, Essentia has enjoyed unsolicited support from athletes like Washington Wizards All-Star point guard John Wall and members of the Philadelphia 76ers.
“We are basically a sales and marketing company,” said Uptain, adding that Essentia is entering new retail doors at a rate of about 2,500 per week. “Every year we are doubling our marketing efforts — outdoor, indoor, full 360 marketing. This year, we’ll be doing seven markets; next year, we’ll be at least doubling that, if not more.”
Despite the recent gains, Uptain has taken a measured approach to growth. He dismissed the potential for flavored or sparkling line extensions, noting the potential for confusion from consumers and adding how Essentia’s sales team “loves having just one product to sell.” He also shot down the prospect of taking on an external role, be it as an investor or board member at another company. “Being focused has been one key to our success,” he said. “I don’t get distracted, and I think that’s respected by our team.”
Part of that focus for Uptain includes not worrying about rival brands — such as Dr Pepper Snapple Group allied brand CORE, or PepsiCo’s recent LIFE WTR offering — and managing his own expectations for the future by taking a methodical approach.
“We hardly ever over expect things to be bigger and better than they are,” he said. “By doing that, we have a solid foundation where we don’t get in trouble with supply or people resources or financial resources.”