Less than a year into launching, custom coffee and beverage brand Frazy is furthering its mission to to bring cafe quality drinks to at-home consumers by expanding beyond its line of defrostable, ready-to-drink cups and into shelf-stable concentrates.
The San Jose, California-based company launched in 2022 ships its flagship customizable frozen cups, Frazy Cups, direct to consumers. The cups – available in varieties from coffee to mocktails to tea and boba drinks – range in price from $5.99 to $7.99 per cup and are designed to be defrosted overnight, ready for the next day.
“The whole concept behind Frazy [is] we wanted to bring this one click away experience to get your custom beverage at home anytime you want,” Frazy founder and CEO Balaji Krishnan told BevNET last week. “It is personalized for you.”
The company claims to have generated over $100,000 in revenue and 40% repeat customers in its first five months in business. But as appealing as the unique format has been, Frazy’s customers soon began asking for an on-the-go, shelf-stable version.
Frazy Bottles, sold in 2.75 oz packages, extends the basic brand concept, which allow customers to build drinks to their exact specifications by choosing the kind of coffee or tea drink (latte, Vietnamese coffee, chai, etc.), the caffeine level, milk preference (whole, almond, oat, coconut, etc.), sweetness level, and flavoring (vanilla, white chocolate, lavender and others). The flavorings are premixed into the concentrate and the milk is sent dehydrated to be added along with hot or cold water depending on the type of drink. The bottles retail for $24.99 per six-pack on the website.
According to Krishnan, the aim is for Frazy Bottles to eventually replace Frazy Cups altogether, helping the company to save on cold-chain shipping costs. Further down the line, the company plans to develop retail-ready products featuring some of the brand’s top selling drinks, but for now the customization aspect is what sets it apart from other at-home drink making CPG items.
“If you look at all these concentrates, especially coffee concentrate companies, what they offer is just a black coffee concentrate with an infused flavor of vanilla or whatever,” he said. “But what we are offering is a fully prepared specialty drink.”
The idea for Frazy developed during the pandemic, when Krishnan was unable to get his favorite coffee – a red velvet latte with almond milk, extra sugar and two extra espresso shots, in case you were wondering –- every morning at his local Starbucks.
Frazy is Krishnan’s first beverage venture, though he has launched a series of businesses spanning the advertising, tech and consumer electronics industries. The company is privately funded by Krishnan who said he is not looking for outside investment at the moment but expects to eventually add investors with institutional beverage experience to the cap table.
Although stepping away from frozen DTC could be a smart financial play due to the added expenses that come with shipping, some companies have successfully built brands within the segment, most notably Daily Harvest, which launched with frozen smoothie cups but eventually expanded into meals, snacks, desserts and a variety of frozen products. Frozen baby food maker Tiny Organics has also found traction, raising $11 million in 2021.
But Krishman isn’t out of Frazy ideas: the company is working on innovation that will merge the software element of the company’s customization platform with a hardware component currently referred to as “Frazy Bot.” Krishnan declined to give details on the new product but said bringing his experience in tech to the beverage industry will make Frazy a “unique company” for larger beverage makers to partner with.
“There’s a lot of things that we are doing which will literally bring baristas and bartenders to the kitchen,” he said.