Bottled water brand PATH has raised $30 million in a Series A funding round led by Altos Ventures aimed at expanding its nationwide distribution footprint and supporting a new East Coast manufacturing facility.
Speaking with BevNET this week, PATH co-founder and CEO Shadi Bakour acknowledged that Altos Ventures – a Silicon Valley fund that has invested primarily in tech companies such as DigitalPath and Chowbus – may not have been an obvious partner for a CPG brand, but that PATH and the venture group aligned on their shared ethos around sustainability and market disruption. The firm will gain a seat on the brand’s board of directors, and will likely help PATH to unlock doors in the sports, tech and restaurant spaces through their network, Bakour said.
PATH co-founder, President and COO Amer Orabi cited PATH’s success in forging brand partnerships across industries – crafting custom bottles for a diverse array of companies like State Farm Insurance and Alo Yoga – and the brand’s emphasis on having consumers reuse their bottles as key differentiating factors from the rest of the bottled water category that helped to attract a tech-focused firm like Altos.
“I think from our end the idea has always been similar to what Impossible and what Beyond Meat did to the meat market on a global scale,” Orabi said. “That’s what we’re after with PATH.”
Additional investors in the round include Blue Investment Group; celebrities such as Ryan Seacrest, Guy Fieri and Ninja; and HartBeat Ventures, a venture fund founded by comedian Kevin Hart, among others.
Founded in 2015, PATH has positioned itself as an eco-conscious water brand – offering still, sparkling and flavored varieties – by promoting its aluminum bottles as being reusable. Earlier this year, the company opened its first East Coast manufacturing plant in North Carolina in partnership with Unix Packaging, the brand’s second production site overall. Orabi said the facility accompanies the company’s existing California plant and will “dramatically change how we operate from an order fulfillment and scalability standpoint” by cutting down on shipping costs and distribution time, as 60% of the brand’s sales come from the East Coast.
PATH is currently sold in over 50,000 retail doors across the country and is now targeting a 100%-300% increase in its footprint over the next 18 months. According to Orabi, the brand is available nationwide in chains such as CVS, Rite Aid, Whole Foods, and Sprouts and has launched regionally in Target, Walmart, Costco business centers and 7-Eleven. The convenience channel makes up about 75% of the brand’s total distribution, versus 25% in grocery, leaving a long runway to grow in the conventional channel with plans to expand nationally with existing regional partners.
The financing will also support increased marketing efforts, including field and sampling efforts as well as national ad campaigns. Co-founder and CMO Ali Orabi said PATH is hoping to tap into its base of celebrity investors, with entertainers like Hart and Fieri at the cap table, to promote the brand more.
“We have a lot of celebrity backing, and we haven’t really put them to use,” Ali Orabi said. “Next year, we have some major campaigns and major activations coming up that will utilize all of these networks that we have to drive as much as brand awareness to stay the leader in this space.”
Amer Orabi said the company currently has around 50 full time employees and expects to roughly double its headcount over the next year, including sales, marketing and administrative positions.
Beyond traditional retail, PATH has also continued to build out its business in foodservice, hospitality and travel. Orabi estimated the products reach over 40,000 individual hotel rooms through partnerships with 1 Hotels and Four Seasons, among other major hotel chains.
The products are also sold in over 2,500 gym accounts including Orange Theory, Equinox and Barry’s Bootcamp; over 2,000 schools including UCLA and Harvard University; and more than 200 corporate clients with accounts like Dropbox, SpaceX, Sony, Disney and Tesla. PATH is available at national parks such as Yellowstone, Niagara Falls and the Hoover Dam, and the brand is an official partner of the NBA’s Sacramento Kings and the NHL’s New Jersey Devils, as well as an exclusive bottled water partner for the MLB playoffs.
Ali Orabi said co-branded bottles created with these corporate partners have continued to be a strong revenue stream, while also serving as a “billboard” for PATH. Bakour said the company has moved to trademark the phrase “Partnering to Save the Planet” which appears on all co-branded PATH bottles.
PATH has now expanded its custom bottle business to consumers as well, Ali Orabi said. Earlier this year, the company reduced the minimum order size for customized bottles from palettes of 25,000 to just nine, allowing small businesses or consumers to design their own PATH bottles online for special events or gifts.
“PATH water is making [the corporate partners] look like rock stars by putting them in that halo of sustainability, and we’re able to also lean on their brand as well,” Bakour said. “Together we feel like we can make a change, rather than trying to be selfish with our brand equity as brands have been traditionally, understandably so. But because of the reusable aspect of the product, it allowed it to all the sudden become more than a bottle of water or a reusable container. It’s a very exciting division for us right now.”