Birch water maker TREO announced this month it has raised $5 million in a financing round which will support a distribution expansion focused in the Northeast.
According to founder and CEO Robert Golden, the company quietly closed the financing round — which consisted entirely of individuals including friends and business partners involved in real estate — late last year and has since used the funding to hire eight new employees to support expanded distribution and marketing efforts. The round marks the first investment for the brand, which to date had been bootstrapped by Golden.
“I wanted to wait to prove my concept out before I took anyone else’s money,” Golden said. “I’d rather risk my own money before I did any investors.”
Founded in 2016, TREO produces a line of organic fruit-flavored birch water beverages made with juice concentrates and are available in Blueberry, Kiwi Watermelon, Orange Apricot, Peach Mango, Raspberry Lemonade and Strawberry varieties and are sweetened with erythritol. Each drink contains 10 calories and 1 gram of sugar per 16 oz. bottle.
TREO is now available in over 15,000 retail stores nationwide, Golden said, which includes the addition of 4,300 stores through a new partnership with the Pepsi-Cola Bottling Company in New York in December. Since then, the company has also built out its DSD network with the addition of Canada Dry, servicing the Mid-Atlantic region from New Jersey to Virginia, and Polar Beverage in New England.
According to president Brian O’Byrne, the company has begun adding Anheuser-Busch InBev (AB) wholesalers nationwide. The brand is currently available in 11 AB DSD houses and will add three more over the next couple weeks, he said.
“What we did initially was we got this great retailer acceptance with a broker and we used KeHE and UNFI,” O’Byrne said. “However, we realized that really you can’t build a national brand or a major brand on that system alone and that really what we needed to do is to go to DSD, which is obviously more expensive, but 100 times more effective.”
The company will put some of the funding toward innovation, Golden said, including new flavors.
Though the COVID-19 pandemic slowed TREO’s growth during Q2, Golden said the brand has invested funds in increasing its online presence, including digital marketing campaigns and its ecommerce platform. Though he said retail remains the core focus for the company, particularly due to the high costs of shipping beverages, Golden noted that the brand is available direct-to-consumer and on Amazon and that ecommerce sales have grown “tenfold” since last year.
Golden said the brand relies heavily on sampling initiatives to drive trial and though field marketing campaigns in grocery are on hold Treo has now introduced a “vintage 60’s truck” which can drive around to public events to hand out bottles. As states begin the reopening process, the company has targeted safe outdoor activities such as drive-in movie theaters to continue sampling.
The brand is also waiting in the wings for on-premise accounts, including schools and food service which had been high volume channels, to reopen in order to immediately resume sales. This Spring, the company also entered several airports through airport restaurant operator OTG. Despite significant reductions in air travel Golden and O’Byrne said they see the channel as a strong opportunity once the channel bounces back from the pandemic.
“When your brand is in an airport, where there is very limited supply, it’s a badge of honor,” O’Byrne said. “It’s certainly saying ‘Wow, this must be a good brand.’ So the fact that we’re in 11 airports and about 90 different shops, it’s a testament to how good the brand is.”