Food and beverage consulting firm Cascadia Managing Brands has taken an equity stake in Pennsylvania-based enhanced water startup Krisp Drinks, a Black-owned brand founded by a former convenience store manager.
Launched earlier this year as KRISPwtr, the company has three product lines — Krisp Flava, an organic, keto-friendly drink sweetened with stevia and erythritol available in Strawberry Pineapple, Pomegranate and Blueberry Lemon flavors; Krisp Fruitish, available in Grape, Fruit Punch, Coconut, Mixed Berry, Strawberry and Watermelon flavors; and Krisp Natural Spring Water. All products are packaged in 16.9 oz. bottles. Flava retails for $1.89 per unit and Fruitish is available for $0.99.
According to Cascadia managing partner Bill Sipper, the firm has in the past taken equity stakes in brands (including coconut water Zico) but for KRISPwtr, it made the “incredibly unique” decision to waive all fees, instead offering to provide sales and marketing services in exchange for a share of the company. Sipper noted that he was impressed by both the drink and founder and CEO Sean Banks and did not want to charge money that the bootstrapped company couldn’t afford.
“We’ve never waived a fee before,” Sipper said. “It’s kind of a new ground for us. But being that this is a minority-owned company, I think we owe something back, especially now that current events have caught up with us. Tell me how many brands are in the beverage industry that are owned by African Americans, it’s just not a lot.”
Exact terms of the agreement were not disclosed, but Sipper said Cascadia has a double digit share of KRISPwtr. However the deal is structured to ensure Banks will always have at least 51% ownership of the company.
KRISPwtr was founded in 2018 by Banks, who at the time was working as floor-level manager at a Pennsylvania location of c-store chain Rutter’s. According to Banks, he became interested in starting his own water brand while observing consumer behavior firsthand, often questioning consumers at checkout about their buying decisions and carefully noting which brands were popular. One recurring theme, Banks noted, was that consumers often believed flavored waters were healthier than their actual ingredient panels suggested.
Also around this time, Banks’ mother was diagnosed with diabetes and was instructed by doctors to cut out sugary beverages, but she found that many of the brands that did have clean labels either had too weak or too strong flavoring. This prompted Banks to begin work on developing a full-flavored drink that his mother could drink.
“Everybody that I was talking to kept saying, ‘oh, this brand is good for me, this is healthy’ and I’m like yeah, okay,” Banks said. “It would be like this has sucralose, which is fake sugar. Or this has preservatives in it — things that were not healthy like the customer thought it was.”
KRISPwtr’s launch comes at a time when consumers are continuing to cut sugary beverages in favor of better-for-you options, providing opportunity for flavored water brands to seize market share. Last week, zero calorie flavored water maker Hint closed a $25 million Series D funding round. Banks noted that with KRISPwtr he aimed to create a more balanced flavor profile that was sweeter than brands like Hint without tasting like juice.
“My whole positioning was that I wanted it to be something that had flavor, had sweetness, but drank like water,” Banks said. “It’s a refreshing drink. I drink it when I get done playing basketball or running around with my kids. There’s a couple gyms that we have it in and people drink it during, before and after workouts. So it really has that flexibility to be used in all occasions.”
KRISPwtr is currently available in independent convenience stores in the Mid-Atlantic region, and is in discussions with several nationwide grocery and mass retailers, Sipper said. The company will also target the dollar channel and is beginning discussions with chains such as Dollar General and Dollar Tree. Cascadia is also working to get the brand into several Northeast and Mid-Atlantic DSD distributors. The drinks are also available online direct-to-consumer and will add Amazon in the near future.
Banks said he also hopes the brand will be able to give back and make a positive impact in the Black community. He cited an industry-wide lack of Black-owned food and beverage brands, and said there is a need to increase diversity among leadership. As well, Banks said the brand aims to introduce healthier products into minority communities, noting high rates of diabetes and other health issues among Black and Latino consumers.
“It’s four to one on advertisements to minorities for bad food,” Banks said. “In 2018, overall advertisements for sugary foods and fast food fell by 3%, but they increased by 50% to Black and Latino consumers. That’s crazy. Then they wonder why those communities have all these health problems and pre-existing conditions.”
During the COVID-19 pandemic, KRISPwtr has also initiated giveback programs, donating 2% of proceeds to organizations including Feed America, the Central PA Food Bank and the Boys and Girls Club with work directly with families and children in underserved communities.