After establishing its consumer base and hiring a seasoned beverage industry COO, hydration brand Barcode is preparing for a larger distribution push and to introduce new innovation in 2023.
Having launched just before the pandemic scrapped many CPG startups’ first year plans, the Calabasas, California-based brand spent the past two years focused on learning where the plant-based, fitness-oriented water lives in stores, who the target audience is and, most importantly, who can help it grow to its full potential.
“Think about it like this: If Vitamin Water was to launch today, it would be Barcode,” founder and CEO Mubarak “Bar” Malik told BevNET. “We’re Gatorade minus the artificial ingredients and Body Armor minus all the sugar.”
The coconut water-based beverage has something of a foot in both the new and old sports drink models: it has enhancements familiar to the category – B vitamins, Vitamin D, magnesium – plus more contemporary hot ingredients, like ashwagandha to promote recovery and relaxation. The product initially launched in Watermelon and Lemon-Lime but has added Concord Grape (originally Pinot Noir) and Black Cherry flavors to the mix. A fifth variety is set to be released in March.
Barcode comes in 16.9-ounce bottles that sell in 12-packs for $39 on the website; significantly more than the $7-to-$12 that a 12-pack of Gatorade retails for online.
Making a lane in the next-gen hydration and performance drink category was never going to be easy, but Malik sees the brand competing with brands like Roar Organic or Electrolit on store shelves. The brand was co-founded by NBA basketball player Kyle Kuzma and is backed by celebrity investors like recording artist Kelly Rowland and NBA athletes Monte Morris, Derek Fisher and Jordan Clarkson. Armed with Malik’s expertise as the former director of performance for NBA team the New York Knicks, Barcode has positioned itself as a better-for-you, premium sports drink that targets a younger, gender-neutral demographic.
Along with its professional athlete and celebrity investors, Barcode has garnered institutional investment from Panoramic Ventures and Debut Capital as well as Southern California natural grocery chain Erewhon. The partnership with Erewhon has opened significant marketing opportunities for the brand and helped Barcode create a “retail launch playbook” which it has used in other distribution partners, including LA Distribution, in the city, Malik said. In total, Barcode has raised about $3 million so far.
The product is available online, but Malik and his team have deliberately kept a small retail footprint in specific metropolitan areas like New York, Los Angeles, San Francisco, Miami and parts of Texas to build a buzz before trying to go national. Currently, the brand is primarily located in specialty/natural retail locations like Bristol Farms where Malik insists the price point yields higher sales margins compared to some of its conventional grocery partners.
Barcode is also available on Amazon as well as in Central Markets in Texas and ShopRite locations in the Northeast. Malik said the brand is projecting to be in 5,000 doors by the end of 2023.
The push to grow into mainstream national retail chains led Barcode in January to hire a new COO: Mac McAvoy, who brings experience growing startup brands in the cannabis, software and beverage industries, including stints as VP of operations at cannabis-brand West Coast Cure as well as at beverage companies Iris Nova/Dirty Lemon.
Malik said that one lesson learned in running a startup beverage company is that a founder “trying to do everything” without a team around them makes things harder.
“If you think about a house, in order to make sure there aren’t any cracks in the foundation. You need to bring in people like Mac (McAvoy) who has experience managing teams, building culture, and, more importantly, making sure that there are enough redundancies and things in place to minimize some of the early pitfalls beverage brands can experience,” he said.
McAvoy was drawn to the brand’s “authenticity” built around Malik’s unique experience. Along with his time working in professional sports, Malik helped consult on other nutritional supplements like Lebron James’ Ladder product line.
On a broader scale, Barcode is one of several brands carving out a niche as an everyday hydration beverage that can be easily accessible to anyone looking to “improve their mental, physical and recovery prowess for the game of life,” Malik said. Meanwhile, Kuzma is helping to drive awareness of the brand through his online channels, similar to how competitor sports drink PRIME has leveraged Logan Paul’s influencer credentials to build momentum.
Looking ahead, McAvoy is seeking to capitalize on the foundation Barcode has built thus far to eventually move into convenience and gym retail channels as well as foodservice, claiming that demand will elevate and a shift to bi-coastal manufacturing will help ease distribution in the brand’s core markets. For now, production is still located on the East Coast even though Malik moved himself and the company from New York to L.A. in 2022.
With the move, Malik finds himself spending more time on the road building brand awareness and flying between East and West Coasts for meetings
“We’re at this critical inflection point for rapid growth and the team size right now is right where you can actually influence culture and put good processes in place,” McAvoy said. “It has good bones…where we can experience rapid growth and keep it on the shelf and selling through the register without any hiccups.”