After a half-decade spent seeding the brand, Massachusetts-based functional drink maker Tru is poised to move into a new growth stage with the closing of a $3.6 million funding round that includes participation by powerhouse New England beverage manufacturer and distributor, Polar Beverages.
Though its financial stake in Tru is only now being made official, Worcester, Mass.-based Polar — specifically company president Ralph Crowley and senior VP of sales John Wetzonis, who also sits on the board at Tru — have been informal advisors at the company for the last five years. Speaking to BevNET this week, Tru co-founder and CEO Jack McNamara credited them with helping guide product development and prototyping for the brand’s expansion from its original concept — a line of functional shots packaged in custom 1.69 oz. square-top bottles — to last year’s introduction of a 12 oz. RTD in slim cans.
Family owned and operated since 1882, Polar is one of the largest independent bottlers in the country, covering manufacturing and distribution for its branded products and for co-packing partners. Its flagship Polar Seltzer, distributed nationally through Keurig Dr Pepper’s DSD network, generated over $264 million in sales (multi-outlet plus c-store) through October 2021, according to data from IRI.
“Ever since meeting Ralph Crowley in 2015, Polar has generously championed our brand behind-the-scenes,” said McNamara. “Whether it was an intro to a retailer, a connection to a supplier, or a much needed insight, Ralph and John have always been there for us. Polar embodies all that is good in this industry and we are incredibly grateful to work with them.”
The convertible debt round, which closed in October, was led by Btomorrow Ventures, a division of British American Tobacco focused on investment opportunities outside of cigarettes. The venture group has been an active backer of functional beverage companies across different need states in recent years, having taken stakes in Unrooted, Moment and More Labs. McNamara said his company was first approached by Btomorrow to take part in its six-week brand incubator, the Consumer Delight Lab, before opening a conversation about a formal investment. He praised the group for allowing Tru to remain “flexible in the way that we want to launch or expand versus trying to force us into a cookie cutter approach.”
“How we explained it to them is that what Red Bull has done to energy drinks or Gatorade has done to sports drinks, we want to be the ones doing it to functional beverages,” he said. “There are some big players, like Fit Aid, who are vying for that position, but we don’t think there’s a clear-cut winner yet. And we know we needed to align with someone who kind of knew how to get there.”
The new capital is expected to fuel growth across Tru’s product portfolio, which now comprises its six-SKU range of functional RTDs — Energy, Focus, Power, Defend, Dream, Beauty and Rescue — that are also available as 2 oz. shots in redesigned circle-cap bottles, plus a dissolvable powder tablet (Defend only). Each will follow a different approach towards distribution: while the shots are being worked through broadline partners KeHE and UNFI, Tru spent much of the past year quietly building doors and velocities for the cans in independent accounts in Massachusetts via a two-man self-distribution team. That approach eventually helped Tru land placement at Roche Bros., Market Basket and Wegmans stores, which in turn inspired the launch of a seventh flavor featuring collagen and biotin, called Tru Beauty.
In 2022, the company’s DSD push for its canned line will begin in earnest when it launches with its first partner, Virginia-based Anheuser-Busch house Brown Distribution, which also took a minority stake in Tru in this latest round. With the tablets serving as Tru’s ecommerce-focused product, the idea is for the brand to eventually offer the same SKUs across all three formats.
Despite its growth, Tru remains a small operation with a staff of eight, still run from an office housed within a martial arts fitness studio.
“We’re staying very local, and we’re maintaining that bootstrap kind of philosophy despite raising the capital, because at the end of the day it’s a very difficult game that we plan so we need to make every decision as wisely as possible,” he said. “I think we’re doing that through innovation and being very frugal with the way we spend our investment dollars so that we can continue to prove (the brand) to investors. We’re just trying to get 1% better everyday.”