VMG Partners has led a $20 million Series B-2 funding round for Spindrift, a Massachusetts-based sparkling water company that flavors its waters with only real fruit. Other investors participating in the round include Prolog Ventures, KarpReilly, RiverPark Ventures, and additional unnamed existing investors.
Founded in 2010 in Newton, Massachusetts, Spindrift makes triple-filtered sparkling water flavored with only real fruit that has been squeezed within days of harvest, and with no added sweeteners or flavorings. Its product line flavors include Half & Half, Strawberry, Orange-Mango, Grapefruit, Blackberry, Cucumber, Lemon, and Raspberry-Lime. Over the past 36 months the company has seen 1000 percent growth in revenue and is expecting to triple its distribution this year to 5 million cases shipped to more 25,000 locations.
“We are thrilled, and humbled, by the ongoing support toward Spindrift’s mission to provide a real alternative to the sparkling water category,” said founder & CEO Bill Creelman. “Our brand has been successful in getting consumers to rally behind our values of authenticity and simplicity, while expanding across major retailers like Whole Foods, Starbucks and Kroger.”
A Sparkling Outlook
Although it has been on store shelves for decades, sparkling water is having its day. As health conscious consumers look to alternatives to sodas and soft drinks, sparkling water, being sugar, salt, and calorie-free, is filling the void.
As lifestyle and consumer habits shift, sparkling or carbonated water sales in the U.S. have jumped by 42 percent since 2012. Meanwhile, as of 2016, sales of carbonated sodas and soft drinks had fallen for the eleventh straight year, and as of 2015 per capita consumption of carbonated soft drinks fell to its lowest point since 1985, according to a report from Beverage Digest.
From its roots in 1971 when Perrier launched its sparkling water in Europe, the popularity of seltzer has ballooned to where American consumers are drinking 10 million gallons of it each year, and flights of limited edition seltzers are on the menu of Sweet Cheeks, a Boston restaurant, reports NPR.
“We’re now at a point in American history where seltzer is more popular than it’s ever been,” Barry Joseph, author of Seltzertopia, told NPR’s All Things Considered in August of last year.
Riding the Wave
Riding this market wave, Spindrift plans to use the funds gained through this round to support the launch of its first national campaign geared toward highlighting what sets it apart from even other popular sparkling waters, its use of only “real” ingredients. The company is also planning to invest in upgrades including silos at its production facilities, and to strengthen its supply chain of fresh fruits and ingredients.
When speaking with BevNet, company founder and CEO Creelman noted how important VMG Partners’ backing has been to the evolution of the brand.
“In sparkling water right now, it feels like daily there’s new entrants coming in. For us, VMG has been able to provide that extra edge as we’ve grown, whether it’s on the hiring or team side, or the supply chain side, or in expanding our trademark. All of that we have done better, quicker, smarter because of their involvement.”
Joining In
Aware of the loss of consumer loyalty, some of the largest soft drink and even beer companies have made moves to capitalize upon the changes in the market.
USA Today reports that Nestlé, which owns Poland Spring, has its Sparkling category; PepsiCo, which owns Aquafina, has launched a sparkling line of waters; Coca-Cola spend $220 million in September of last year to acquire Topo Chico, a leading sparkling water brand; and Anheuser-Busch InBev’s portfolio includes Alta Palla – a line of sparkling waters and juices.
Considering the parent companies, it remains to be seen if consumers will view these products with a more skewed eye compared to smaller, more transparent entrants to the category.
-Lynda Kiernan