Hydrogen-infused water maker Susosu has closed a seed round backed by food and beverage accelerator Union Kitchen, marking the Virginia-based brand’s first ever outside investment. Terms of the deal were not disclosed.
Founded in 2018 by digital marketers Jheen Oh and Nadia Lizarazu, Susosu produces a premium hydrogen-infused mineral water in a pouch. Since its launch, the brand has quietly been building its business online, selling direct to consumer and on Amazon, Walmart.com and through Kroger’s ecommerce platform, and has been entirely bootstrapped by the founding team.
Speaking with BevNET today, Oh said the brand has grown annual revenue by triple-digits since the beginning of the pandemic, when online sales spiked. The new funding and partnership with Union Kitchen will enable the brand to roll out into retail for the first time.
“The main thing that really attracted us to Union Kitchen was their industry expertise, and their proven track record with all the brands they’ve worked with,” Oh said. “Aside from having their own distribution, they have connections with many different retailers, many different distributors, and I feel like they provide the guidance and knowledge and industry expertise, which is something that Nadia and I, as young entrepreneurs, don’t really have as much experience in.”
Union Kitchen, which specializes in incubating startup brands and scaling them to $1 million in revenue, will support Susosu as it begins targeting brick and mortar accounts this year. As well, the funding will go towards expanding the company’s marketing team, Oh said.
Oh and Lizarazu began Susosu after Oh’s father brought hydrogen-infused water home from a trip to Korea. Oh said he was struck by the product’s various health benefits – including increased hydration and natural energy – and worked with Lizarazu to develop a brand they could introduce in the U.S.
The company produces a single SKU of mineral water in 10.5 oz. pouches, which sell for $22.99 per 10-pack online and will retail for about $2.25-$2.50 per unit in retail.
Although hydrogen-infused water has remained a fairly niche innovation thus far, Susosu’s expansion comes as functional beverages and sustainably-packaged waters are growing and similar products are helping educate consumers; a Mintel report from this year showed that 31% of consumers said they were willing to pay a premium for waters with added health benefits.
Earlier this year, hydrogen-infused water maker HFactor went public and in February the brand announced it had brought on comedian Kenan Thompson as an investor and brand ambassador. Last week, HFactor announced it would add 125 Winn-Dixie stores in the Southeast to its more than 5,000 door national footprint and the company has also rolled out an expanded product line including flavored options and cans.
Oh acknowledged HFactor as Susosu’s biggest competitor, but said he was glad the brand has helped educate consumers on the benefits of hydrogen-infused water and that Susosu can now tap its digital marketing expertise to quickly expand.
“One thing that I feel like we’ve done better [than HFactor] is just to leverage our digital footprint,” Oh said. “And right now it’s time to really compete with them on the distribution and retail side.”
Susosu will be cautious and methodical in rolling out to brick and mortar stores, he added, by focusing primarily on natural and specialty channel accounts. There are no plans to change product formats or introduce new innovations; instead the brand will lead with its signature pouch and support the launch with digital marketing campaigns and promotions.
As well, Oh said Susosu also hopes to benefit from increased consumer interest in Asian food and beverage products. As brands like sparkling water maker Sanzo and chili sauce producer Fly By Jing have seen rapid adoption, Oh intends to continue focusing on Susosu’s Korean roots through its branding and messaging as a means to connect with shoppers. Though the brand recently updated its packaging, removing some of the Korean language copy on the front of its label, it retained the Korean version of its name under the larger English logo.
“With Squid Game and all those Korean series and movies like Parasite coming to the mainstream, I feel like Korean cuisine, Korean shows, movies, and even music – like those guys in BTS – there’s just more room,” Oh said. “That’s kind of been recent in a way, so I feel like it’s also perfect timing as well as for the first major Korean premium water brand.”