Bossa Nova may be falling victim to its own success, founder and CEO Alton Johnson told BevNET last month.
According to Johnson, the functional sparkling water brand has struggled to secure the necessary financing to maintain its business despite good margins and high velocities at its natural channel retail partners.
The brand is sold in about 2,000 Sprouts Farmers Market doors as well as chains like Central Market and H-E-B. At Sprouts, Bossa Nova has received reorders for “20 truckloads” at a time thanks to its strong performance on shelf, Johnson said, calling pull-through sales at some stores “crazy.” But he said the costs of growth are now outpacing the company’s working capital.
“If our sales were going down we’d be fine,” he said during last month’s BevNET Live Summer 2023 event in New York.
Johnson said that the current financial environment, where potential investors are more focused on brands showing profitability than growth, has made it more difficult to secure the necessary financing. While some potential investors have told Johnson they would be interested in participating in a Series A for the company, he said the brand is still too young for that type of round.
Bossa Nova was originally founded in 2001 as an aḉai juice brand and is credited with helping to bring the aḉai trend to the United States after launching in 2005. It was acquired by Beverage Holdings LLC in 2009 and placed in the same portfolio as Sunny D, but the original product was discontinued in 2013.
Johnson reacquired the Bossa Nova IP in 2017 and last year relaunched the brand with a wholly new product: a line of flavored sparkling waters made with different functional properties, such as Immunity, Energy and Relax. He also brought in industry veteran Neil Kimberley, who had recently ended a nine-year run as Chief Strategy Officer of premium water brand Essentia, to serve as president. The company currently has seven full-time employees.
While the situation at Bossa Nova is pressing, Johnson said the company still has breathing room as it seeks out new investors, with at least a year’s worth of cash on hand and incoming revenue to maintain the business, but securing that investment will be paramount to its future.
“You don’t get to choose how you grow,” he said.