Launching a bottled water brand can be daunting, especially with established giants in the industry already taking up shelf space. In 2015, Fortune reported an $18 billion loss for the top-25 U.S. food and beverage companies that was driven by Millennials seeking healthy alternatives with cleaner labels. But with an eye for sustainability and a belief in the sacredness of water, Waiakea Volcanic Water has had a tsunami impact and managed to grow this past year despite the challenges of the pandemic.
GHJ Partner and Food and Beverage Practice Leader Donald Snyder sat down with Ryan Emmons, co-founder and CEO of Waiakea Volcanic Water, to discuss what makes its water different, its rapid growth and how it continues to make waves.
THE ORIGIN STORY
Donald Snyder: How did you start the company and come up with your mission? What differentiates Waiakea from other waters?
The worlds of bottled water and beverage were not adapting toward consumer preferences and trends that had a need for LOHAS (Lifestyles of Health and Sustainability) brands. We also noticed the success of TOMS One for One model. With our background in clean water NGOs and community-based impact in Hawaii, we felt it was a natural fit to include social impact as the third pillar of our brand.
So, we ended up with live healthy, live sustainably, live ethically.
Growing up in California and Hawaii, I think you are just a little more exposed to environment preservation, and I had a different perspective on how we operate as a species. Ultimately, this translated to building a brand that could be powerful for consumers because no one was really doing that at the time. To this day there is still a lot of greenwashing going on, albeit less than there was when we first launched. The company allows me to feel good about what we do every day.
DS: We are seeing more companies start their own sustainability initiatives. Keurig pledged that 100 percent of its K-Cup pods would be recyclable by the end of 2020. Can you expand upon the sustainability model you created at Waiakea and some of the environmental initiatives the company has?
RE: When we launched, being 100-percent recyclable was a big deal for the entire consumer packaged goods (CPG) industry and bottled water. But at that point most bottles were already recyclable and BPA-free. I thought it was ridiculous that some companies would put a green leaf on their packaging that suddenly gave it green credentials.
The first thing we did was draw a line in the sand. We decided to become the first beverage to use 100-percent post-consumer recycled materials for our bottles and packaging in the U.S. It was super expensive at the time. It still is significantly more expensive to this day. But we have around a 90-percent smaller carbon footprint, water footprint and energy footprint because of it — it was an important step in the right direction. Our hope was that if we were genuine, it would pay off with customer loyalty and further justification of us being a slight premium to the Fijis and Smartwaters of the world.
Today, our company headquarters and all our product lines have been carbon neutral for almost seven years. We participate in a carbon audit every year through Ecometrica. They evaluate all the internal things that we do, whether that is our facility using renewable energy, our shipping, our back hauling or our tech-first logistics platform that has saved us over 100,000 tons of CO2.
Ultimately, you also have to look at the source. It is imperative to use water from a source that has a sustainable yield and recharge rate. We bottle 0.00001 percent of the sustainable yield, which is just a fraction of the percentage of that recharge rate due to it raining 360 days a year around Hilo on the Big Island. These are very important things to us as a company, a family, as well as to our consumers. We had to get it right.
NAVIGATING COVID-19 WATERS
DS: That is incredible. Let me shift gears for a moment and talk about the pandemic. COVID-19 created challenges for many companies, especially in food and beverage. Restaurants, fast-food locations and coffee shops were hit hard with sales declining by 27 percent. Did your business have to pivot at all last year?
RE: Our Hawaii business and foodservice business were affected, but we were able to keep things going and still grow by drilling down on e-commerce and other channels before the pandemic hit.
Our online business was already 20 percent of the total business before the pandemic — it will likely grow to about 33 percent by the end of this year.
I would say we dodged a bullet, but we feel good about our omni-channel strategy. We wanted to focus on our own e-commerce so that we could control the customer experience and focus on how to create loyal customers and grow our subscriber base. The fact we were able to do that and still support and employ more people in Hilo at our plant throughout the pandemic provided extra fuel for the fire for our sales team.
BUILDING A BRAND
DS: I saw a lot of our customers dive headfirst into e-commerce. It is tough to pivot and jump into the e-commerce space. You have to have a strategy.
RE: Right and it depends on the business, too. I think that online is a very different experience for a lifestyle brand than it is for a private label manufacturer. If you have a lifestyle brand, an online presence is a bit more imperative to have. If you have a B2B, you have to develop your own lifestyle brand to shift to B2C. It is just a different beast.
THE SUBSCRIPTION MODEL
DS: By 2023, it is expected that 75 percent of direct-to-consumer brands will offer subscription services. When did you start your subscription model? Was that always a part of your strategy?
RE: The subscription model is good if you have good lifetime value. We started building out our program at the end of 2016. It took a very long time to launch, but we made it a priority. We knew that to differentiate ourselves, we had to be a digital-first brand because it was the only way we could compete. We had to have the authenticity of our brand translate to more people because we did not have access to those eyeballs in retail like the larger brands do.
We saw where the industry was going. At the time the infrastructure was changing, so we knew that if we could forge the right relationships with carrier and fulfillment partners – combined with the tech integrations we were consistently bringing onboard – we could be put in a place where the company could control its own destiny.
For us, e-commerce is our most profitable segment. Most beverages will tell you it is their least profitable segment because of the weight of their package. It took a long time for us to get here, but we put a lot of effort into that side of the business.
DS: Twenty percent of new subscription box users
who purchased during the pandemic did so to have products on hand. Your team was really ahead of this trend. It is amazing you had the vision to pursue that.
RE: It really reinforced what we already knew, especially during the pandemic.
WHAT IS NEXT FOR WAIAKEA VOLCANIC WATER
DS: What is the next big thing for you? How are you innovating?
RE: All of our new products are launched and tested online. Based on consumer feedback, we will scale the product into retail. I am most excited about the sustainability breakthroughs we are working on when it comes to our packaging. We will also be launching a few different products on the beverage side that will be category extensions.
I cannot say just yet what those will be, but let us just say they will be an exciting pivot for us as a brand.
This has allowed us to de-risk the business and allow our core lines some room to breathe so we can build and scale.
DS: Who comes up with these big ideas?
RE: I do most of the innovation myself but then with buy in from sales, marketing and operations teams. That obviously is not sustainable, but I really love it. Having a great team around me lets me spend time on researching product trends and developing products that I know our loyal customers are going to love. That has been a blessing. It will not last forever; I will probably have to start onboarding an innovation team in the next 12 months.
Ryan Emmons is Co-Founder and CEO of Waiakea Volcanic Water. Born and raised in California and Hawaii, he gained an appreciation for the environment and the active lifestyle embraced in each. This combined with his longstanding work with clean water nonprofits led him to begin developing the concept for the water company with the hope of creating a transformation within the bottled water and the greater CPG industry. The company is built on a model that emphasizes people and planet. Its mission is to provide healthy, delicious, Hawaiian volcanic water to people throughout the world with as little impact as possible while contributing to and promoting conservation and access to clean water and education for people in need throughout the world.
Waiakea is the first American premium bottled water and beverage to be certified Carbon Neutral for its variety of eco-initiatives, including using 100-percent RPET packaging, sustainable sourcing and its regional reforestation projects. Every bottle bought guarantees funding through PumpAid.Org that provides over 650 liters of clean water to those in need in developing countries.