New Slice Ventures, a Pennsylvania-based group that re-launched carbonated soft drink line Slice earlier this year, announced yesterday it has acquired caffeinated sparkling water brand Somerset, the second sparkling water in the company’s portfolio.
With the acquisition of Somerset, New Slice Ventures looks to expand the brand’s distribution and co-packing abilities, develop new flavors and add manpower to Texas-based company Somerset, which was formerly a “one man show,” New Slice Ventures Chairman Joseph Gioconda told BevNET.
After acquiring the rights last year to the Slice, formerly owned by PepsiCo, New Slice Ventures re-launched Slice as a low calorie, better-for-you sparkling water flavored with organic fruit juice. When seeking to expand further into the sparkling water category with Slice, Gioconda said the company wasn’t sure if adding a zero calorie option would make sense for that brand.
“Somerset offered a great way for us to expand further into the category but without undercutting the value proposition of Slice as an organic juice-based product,” said Gioconda. “This was the perfect way to diversify within the portfolio.”
Somerset was brought to the attention of New Slice Ventures CEO Mark Thomann through a connection with Daniel Liu, director of career management for the MBA program at the University of Texas at Austin. Somerset founder Brook Stroud was an MBA student and member of the McCombs Entrepreneur Society and the MBA Food & Beverage Innovation Club at the university. He was provided compensation and a working space to develop Somerset through a McCombs Summer Fellowship, and launched the brand in spring of this year.
“He created a wonderful brand that I admired very much, but he didn’t have the ability from a capital standpoint to take it to the next level,” said Thomann.
Gioconda said New Slice Ventures was drawn to Somerset’s “authenticity” and noted that the product was “an impressive development for someone new to the space.” He said they appreciated that the product came from an MBA student with help from the Austin community, rather than a “corporate boardroom.”
With the acquisition, Stroud will step back from day-to-day duties with the brand but will serve as a senior advisor and will have equity in the company.
Thomann said he believes the caffeinated sparkling water category is “trending the right way,” and that several of Slice’s retail and distributor partners in the natural channel encouraged the addition of Somerset to the company’s portfolio.
Gioconda said New Slice Ventures will focus on increasing Somerset’s distribution, with opportunities to gain nationwide distribution both in the conventional and natural channels.
While Slice is a more “mainstream” product that he said “fits well into the natural channel,” Gioconda believes Somerset is a “very strong proposition” in the natural channel, especially because of its millennial-aimed branding and slim can format. He said the new brand rounds out the New Slice Ventures portfolio without being directly competitive with Slice, allowing them to assist in distribution without “undercutting” its other product.
New Slice Ventures will also assist in the development of flavor formulations and expanding with co-packers. Gioconda said the company will improve upon Somerset’s three existing varieties — Moroccan mint, peach lemon verbena and grapefruit elderflower — and expand the line with additional ones. He said the relationships with existing co-packers will allow the company to scale Somerset from a packaging and co-packing standpoint, allowing the brand to work with multiple co-packers rather than a single one.
Thanks to the introduction of products from brands such as Phocus, Ugly, Caribou Coffee, Limitless and others, the nascent caffeinated sparkling water category is beginning to pick up momentum. As the market continues to grow, Thomann believes Somerset’s flavor profile, as well as its understanding of the category and its consumer base, will differentiate it from other caffeinated and zero calorie sparkling waters.
“It’s a challenging category but with the capital and expertise that we have, we’re willing to roll up our sleeves and hopefully make it a big brand,” Thomann said.