Tru has spent 10 years building bridges with stakeholders and is now “doubling down on fruitful relationships.”
The functional beverage brand company recently closed a $4.6 million funding round – $3.1 million in cash and $1.5 million in “commercial value” – that strengthens its ties to Polar Beverage as the brand prepares to launch into powdered stick packs and “focus on what’s working,” in the words of co-founder and CEO Jack McNamara.
One thing that has worked has been its relationship with Worcester, Mass.-based Polar, which led the round. Previous investor Btomorrow Ventures also participated on the round as well as a number of new angel investors that were introduced to the brand through early shareholder Jennus Innovation.
A second $1.35 million tranche of the round is still open for the next four months with “additional investors very interested and in due diligence,” McNamara said.
For its first five years, Tru competed in the energy shot category. With help from Polar Beverage, Tru expanded into 12 oz. slim cans with carbonated varieties in 2020. Now, the brand is moving into the powdered, functional beverage set with four of its best performing offerings: Gut (Peach), Focus (Kiwi), Energy (Mango) and Dream (mixed berry). A 12-stick pack box retails for $40 on Tru’s website.
In terms of Tru’s ecommerce strategy, it was previously “throwing pasta against the wall” across many platforms, but has since zeroed in on Amazon as the most efficient place to invest marketing dollars.
“When someone goes on Amazon and purchases a Tru product, then we have essentially just run a demo with a return on investment,” he said. “Now, when they go into a Kroger or Costco and see Tru, they will already know that they love the brand.”
Despite a $6.5 million investment in 2023, Tru realized it needed to build itself “differently” because “if you look at the stats and follow the same path as others, we will fail,” he said. “We’re not in the business of gambling but in the business of creating something sustainable.”
In diving deeper into how it could refocus the business, Tru made the challenging decision to reduce general and administrative spending – including payroll where the team agreed to take equity in exchange for paycuts – to focus resources on other parts of the business.
Tru’s different path forward included McNamara going to Polar Beverage’s leadership team – president and CEO Ralph Crowley, COO/CFO Michael Mulrain and SVP sales John Wetzonis – to discuss how the functional drink brand could better align with the family-owned seltzer company.
The group came to an agreement that gave Tru added warehousing and distribution support along with the manufacturing Polar had already been providing.
“Those three parts of the business are unbelievable levers to expedite our path to profitability,” McNamara said. “This has been a match made in heaven for a young founder and company based out of Boston.”
Breaking into new regions can be difficult with larger retail chains, which often require proof of a strong distribution network while DSDs also ask for retail partnerships to prove volume will move, McNamara said. Polar’s scale and support has provided reassurance to new partners that Tru is a valuable brand to carry.
The company is strategizing this year around DSDs in the Northeast and a reliance on direct delivery and mainline distribution throughout the rest of the country. The brand is currently focused on the opportunity in Texas where it is anchoring around Central Market.
After ten years, McNamara said learned ways to increase margin without having the same scale as larger beverage brands. One strategy has been cutting back on its marketing burn rate. The team has taken a granular approach to its pricing structure focusing on how it can drive trial and move volume while also be profitable on nearly every sale.
“In the past we have run anything and everything, but not every promotion is created equal,” he said. “For example, if we were running a three-for-five, we might be in the red; versus a two-for-four where we’re in the black.”