Jasmine Lee-Zogbessou: How important is venture capital for companies in the drinks industry?

Lauren Jupiter: I think it goes without saying that venture capital is a pretty dominant force right now behind any emerging company in the US, but certainly beverage companies. I think beverage can be pretty capital-intensive and reliant on external capital to fund growth in the early days.

Beverage companies often have to commit to high minimum quantities when they’re ordering products from co-packers and bottle suppliers. There are quite significant cash outlays that beverage companies need to make, particularly in the early days relative to the volumes that they’re selling. Beverage is an extremely competitive area of the market, so growth is often dependent on sales and marketing activities. It can be a pretty people-intensive part of the industry where companies really need to have feet on the street selling product to gain and maintain shelf space.

JLZ: How exactly is your funding model unique within venture capital?

LJ: We’re not just capital and I think that that is really important. When we invest in companies, we are collaborative partners. We’re very hands-on and really want to work with brands as they need us to be operationally focused and work with them on the tactical execution that they need to scale. That’s everything from our team rolling our sleeves up and getting in there with brands to connecting the dots within the broader food and beverage eco-system. We help these brands get the resources that they need so they can quickly and strategically scale and bring their products to market. This includes making introductions to retailers and distributors and to other large corporates. We really surround them with the eco-system that they need to move more quickly than they could do on their own.

JLZ: What are the main factors that would encourage you to invest in an early stage drinks company?

LJ: We want to partner with people that we think have the ability to scale a brand but also people that are doing things the right way from day one – building infrastructure and thinking about quality controls in their product supply chains. For us it’s about finding founders that we feel aligned with and that we want to be long term partners with. We look at what we call ‘challenger brands’. We want to work with brands that are doing something different and maybe it’s because of the product and a unique ingredient profile, maybe it’s because of the brand and how they’re approaching the consumer or maybe it’s because of the route to market. But in some way or other, these brands are challenging the status quo.

JLZ: Can you tell us about some of the beverage companies you have partnered with?

LJ: About a third of our portfolio is beverage. One beverage that we’re really excited about right now is called Koia, a refrigerated, protein beverage. It’s a fresh, almond-based beverage that includes a proprietary blend of plant proteins, brown rice, hemp and pea proteins. It really is a delicious product with a tremendous nutritional profile. It’s dairy-free, soy-free, and gluten-free and it really delivers on a pretty clean and impactful, functional product, while still staying true to an enjoyable drinking experience.

Another one that is near and dear to our hearts is Rethink Brands. Rethink is a water business that makes organically flavoured kid’s water in juice boxes, with no sugar, no calories, and no sodium and the idea is to be an alternative to juice. Something a little more exciting than just plain water for kids, and it’s one that I think will benefit from increased focus of the millennial mum on taking sugar and juice out of kids’ diets. We think it’s one that has a lot of potential in the US and we certainly see the application in our day-to-day lives.

JLZ: Venture capital is a heavily male dominated space, what is it like as a woman in this business?

LJ: It’s definitely not without its challenges but I think it’s a really exciting time to be a woman in venture capital and a woman in the food and beverage space more broadly. For us, food and beverage is one where the consumer is really dominated by women. It’s typically mums doing the shopping and making those purchasing decisions. I think it’s a unique perspective that we bring to the space, as women, as working mum’s, of how we’re thinking about products and ingredients and convenience and all of those things that are really driving consumer purchasing decisions. We embody those things every day and so it’s a pretty exciting part of our job that we get to bring those products that are delivering on those needs to mums and busy parents across the country.

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JLZ: With soda brands losing market share worldwide, would a company like yours be actively looking for other opportunities to invest?

LJ: We are pretty actively seeing the larger companies diversify outside of soda into better-for-you options. I think Koia and Rethink are great examples of diversification outside of a soda and a key part of that being consumers are looking for a beverage they can have on their nutritional, day-to-day.

One of the things moving consumers away from soda is not just the sugar but artificial ingredients that we see in most of the major soda brands out there. It’s ingredients like phosphoric acid and high fructose corn syrup or other items that people can’t pronounce or don’t want to be reading on their label. With that, there’s a brand in our portfolio called Tractor Beverage Company and they’ve built a portfolio that really challenges how beverages have historically been consumed. Tractor makes carbonated soft drinks and non-carbonated drinks that are all certified organic and non-GMO. Every beverage has functional ingredients in it like apple cider vinegar. They’re really working on challenging the soda that you’re seeing at your local restaurant and putting in place these organic, all-natural options, which have much half the sugar of any soda on the market.

JLZ: In that case, would you say healthier brands have an effect on your investment?

LJ: Absolutely. I think that a proper portfolio invests in products that are all-natural. We really avoid artificial ingredients and we look at the ingredient profile of something that we would bring home to our families. We think about two key demographics that are really driving decision making, the millennial mum, looking for healthy options and then the baby boomer population, who’s also really looking for healthy and better-for-you options as a way to use food as medicine as opposed to pharmaceuticals.

JLZ: How do you work around the risks in investing in early-stage drinks companies?

LJ: We’re looking at every investment with that lens of ‘obviously there’s risk’ and what we think the potential outcome and reward could be. I think our role and what we try to do is help work through those risks in a bit more of a straight line than they would be able to do on their own and navigate a little more smoothly. We try to work with them on everything, from their sale strategy and showing up to their supply chains, to making sure that their financial reporting is clear. We really try to act as a risk navigator as they’re building their business.