After a solid first year on the market, De La Calle is looking ahead to further growth in 2022, closing a $7 million growth funding round while preparing to roll out four new varieties in its line of ready-to-drink Mexican tepaches.
Since launching in January 2021, the Los Angeles-based brand has gained a following for its line of lightly carbonated fermented drinks in brightly colored cans, marketed as an authentic RTD version of one of Mexico’s most popular traditional refreshments. With the brand now sold in around 3,000 locations across 34 states nationwide, co-founder Alex Matthews said De La Calle is now positioned to use the new funding to fuel growth through a combination of new distribution, consumer education and product innovation.
The effort kicks off this spring with the release of four new flavors — Watermelon Jalapeño, Cactus Prickly Pear, Grapefruit Lime and Chamoy, bringing the total lineup of 12 oz. cans to 9 SKUs — and brick-and-mortar retail placement at almost 300 Whole Foods Markets locations across five regions: Southern California, Northern California, Rocky Mountain, Northeast and Mid-Atlantic.
“There’s this opportunity for us, to actually use this cash to educate the natural grocery shopper that there’s this new delicious fermented product that’s not kombucha, that is actually good for you and that tastes incredible,” he said. “But then there’s a whole other set of people, which we’re building towards as a brand. And that is, if you’re Spanish speaking and you live in America, this product is a no-brainer.”
The new funding arrives not as the result of running a process but rather as a product of the company’s structure: De La Calle is a joint venture between Matthews’ creative agency HERE Studios, private equity firm KarpReilly and California-based manufacturer DrinkPAK. The approach, Matthews said, has allowed each of the four principals to play to their respective strengths. While Matthews and co-founder/chief of fermentation Rafael Martin Del Campo bring beverage branding and marketing experience, Alan Karp has a deep background in CPG investment and, as CEO of DrinkPAK, Nate Patena, formerly of KeVita, handles production.
Even as the brand courts American consumers, Matthews is keen to highlight the brand’s Mexican connections. De La Calle continues to source as many organic ingredients from Mexico as possible, and its last three senior level appointments were individuals of Mexican descent. In terms of flavor, the approach goes deep into unique regional flavors and ingredients, resulting in flavors like Watermelon Jalapeño and Chamoy, the latter being a sweet and spicy combination of sugar, chilis and dried apricots that was inspired by a recipe stumbled upon at a roadside taco stand in Mexico.
“Mango Chili was, because it’s so popular, I think a cue to push more into the chamoy kind of zone because it’s sweet and spicy. But the chamoy is a little bit salty as well, so it’s kind of got that energy about it,” Matthews said. “But we didn’t know what we had until we had it.”
In contrast, despite the recent proliferation of gut-friendly CSDs on the market, Matthews downplayed the functional elements of tepache, which are highlighted by callouts for “Probiotics” on the can.
“I think brands have become just overly obsessed with functionality,” said Matthews. “I think that in all honesty, we’re winning right now because (the product) just tastes incredible. And there’s a great story about tepache.”
Simplifying De La Calle’s message to highlight taste and authenticity is part of Matthews’ plan for unlocking the brand’s commercial potential: he counts fast-casual chain Chipotle as a “dream partner,” while positing that De La Calle could work as an option in fast-food restaurants owned by Yum! Brands.
“Jarritos sells around 10 million cases a year in America. And it’s a great product, but it hasn’t gotten past this sort of taqueria/Mexican restaurant circuit and some Latino grocery stores,” Matthews said. “I think [De La Calle] has the ability to go past that and be available in wider places, and hopefully, have people drinking a healthier option that still tastes really, really good.”