Probiotic juice shot maker So Good So You is getting a boost of its own with today’s announcement that the Minneapolis, Minnesota-based company has closed a $14.5 million funding round led by Prelude Growth Partners.
New York-based Prelude’s portfolio includes investments in CPG (gluten-free pasta maker Banza), supplements and personal care products. Other existing, unnamed investors also participated in the round.
“The wellness shot category is growing exponentially due to consumers’ rising demand for convenient, functional product offerings with clean, plant-based ingredients,” said Reda Daneshzadeh, co-founder and managing partner at Prelude Growth Partners, in a press release. “Our proprietary consumer research indicates So Good So You resonates deeply with Millennials and has the highest repeat rate in the industry driven by its delicious and nutrient-rich products.”
The investment comes as So Good So You, which markets a 9-SKU range of 1.7 oz. cold-pressed functional juice shots with added probiotics, is riding a wave of consumer demand for immune support products in the wake of the COVID-19 pandemic.
“We’ve seen consumers respond organically to the category as a whole, which has been really energizing,” co-founder Eric Hall told BevNET earlier this week. “When we look at SPINS data and we see year-on-year growth for the category being over 200%, and when we see our performance being up over 400%, we have great comfort with how consumers are responding to our products and optimism about the future.”
That growth has been a long time in the making: Since founding the brand, originally known as Juice So Good, in 2014, Hall and his wife and co-founder Rita Katona have watched as refrigerated cold pressed juice shots, at the time found mostly in fresh juice cafes and boutique natural stores, has become a powerhouse segment within refrigerated beverage. Along with California-based brands Vive Organic, KOR and Suja, So Good So You’s shots, launched in 2017, are one of a handful of products that have taken the format into national brick-and-mortar distribution, including in conventional, club and drug stores. The brand is now sold in over 4,000 retailers nationwide, according to its website, at chains including Safeway, Target, Publix, Sprouts and Giant Eagle.
“For years we’ve seen that consumers are looking for something that is easy to understand. They want to know what the product does for them,” Katona said. “The shots are a really beautiful intersection of them understanding the functionality, the form factor of a simple dose, and the potency of the ingredients.”
Within those stores, So Good So You is benefitting from buyer’s enthusiasm for the shot category; shots are driving most of the growth within the functional beverage cooler, Katona said, outpacing large-format juice and kombucha while taking up a fraction of the shelf space. Velocities have been strong enough thus far — So Good So You is the top performing item in Publix’s refrigerated beverage set, the company said — that any potential concerns over merchandising the product in or near produce (rather than point-of-sale coolers to drive impulse) have been allayed. The high repeat purchase rates cited by Daneshzadeh helps confirm that fact further.
“The consumer is purchasing (shots) on a different hierarchy than perhaps other juice beverages,” said Hall. “In other products, flavor profile tends to drive initial purchase and repeat. In this category, it’s function first and then flavor brings back the repeat purchase. Realizing that, you can look at a retailer’s assortment and recognize that you can over-index on one need, but that this is more of an assortment strategy that allows for multiple needs and multiple purchases being made by different consumers.”
Capitalizing on that opportunity has been the company’s focus, and one that it said required the temporary suspension of direct-to-consumer sales via its website as of earlier this year. Hall framed the decision as “a conscious effort” to prioritize execution for the company’s wholesale partners during a time of increased demand, and said the platform will be revived at some point in the near future. The virus also caused So Good So You to push back the launch of its Mind Tonics line, originally slated to debut at Expo West 2020.
Being able to make those kinds of pivots while maintaining control over product and customer experience is one of the primary reasons why So Good So You is committed to always manufacture 100% of its products, Hall said. The company’s current facility, currently running at under 10% capacity, has room to expand as it scales. Since becoming profitable in July 2019, the company has reinvested part of those profits back into production upgrades, such as the installation of a custom high-speed line for refrigerated shots earlier this year. Shifting its packaging to BtrBtl — a type of treated PET that biogrades over 30% faster in landfill conditions than non-treated PET — has also been a major milestone for the brand this year, and one which it said has helped strengthen the messaging behind the mission-driven brand.
With backing from Prelude, the company believes it can make that next step. Katona said the company quickly connected with like-minded female business leaders in Daneshzadeh and her co-founder and partner Alicia Sontag, calling them “powerhouse women.” The brand will use the funding to deepen its presence within existing chain partners and drive its innovation pipeline.
“This category was not on anyone’s radar two or three years ago, unless you were really in the industry,” she said. “Even with the success that we’ve seen, it’s still very much in the infancy stages.”