Santa Cruz New Tech MeetUp: Verve Coffee in Tokyo, LifeAid on Inc 500
By Jondi Gumz, Santa Cruz Sentinel
Colby Barr slept on partner Ryan O’Donovan’s couch for a year when the bootstrapping duo set out to create one of the best coffee companies in the world.
The enterprise they founded, Verve Coffee Roasters, will be 10 years old in the fall.
How it has grown: Nearly 200 employees, four cafes in Santa Cruz, three in Los Angeles, one in San Francisco and another in Tokyo; wholesaling and supplying Silicon Valley giants such as Facebook, eBay, PayPal, Yahoo and Pinterest; partnering with Manresa Bread of Los Gatos for baked goods; online sales where buyers can pick beans from a country, Costa Rica, Ethiopia, Kenya, or a grower such as Juan Benitez of Honduras.
”On our bags, we say ‘made in Santa Cruz’ — we want to remain independent,” said Barr, who spoke Wednesday night to 240 people at Hotel Paradox at the Santa Cruz New Tech MeetUp showcasing lifestyle companies.
He recalled building Verve’s first cafe on 41st Avenue in Pleasure Point without a contractor, spending $160,000 and opening with less than $3,000 cash on hand.
Now that newly remodeled cafe has added Manresa biscuits and avocado toast to the menu.
“We hope we can improve the quality of life for the farmers and for the customers,” Barr said.
Aaron Hinde, 41, who started LifeAID Beverage Co. with fellow father and golfing buddy Orion Melehan, reported the 6-year-old startup made Inc’s fast-growing 500 last year and will be in the top 100 this year.
“We took on the conglomerates selling sugar water,” he said, explaining each LifeAID drink has a different set of ingredients from green tea and yerba mate to vitamin C, echinacea and zinc.
With eight new hires, LifeAID has 54 full-time employees in Santa Cruz and 50 part-time brand ambassadors in locations across the U.S.
At the start, the future was far from assured.
The food scientist hired to work on the formula had to be persuaded that sugar was not needed to create palatable drinks.
“How did you make them taste good?” came the question from the audience.
“Trial and a lot of error,” said Hinde, whose staff handed out free beverages.
Taylor West, 28, co-founder of Humble Sea Brewery in 2014 with two 20-something buddies, worked out of a carport in Ben Lomond.
They raised more than $1 million, including a $500,000 Small Business Administration loan from Heritage Bank of Commerce to fund their brewhouse and tap room seating 25, which opened on Swift Street on March 17.
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They invested $130,000 in brewing experiments, testing 60 recipes in 2016, and putting on 30 events to find out what people like to drink.
It costs $3,000 to brew 300 gallons of beer that can be sold for $18,000, West said.
Now Humble Sea Brewery has 14 employees and an expensive piece of stainless steel brewing equipment not yet operational.
“Our equipment can’t run without power,” said West. “We’re waiting for a PG&E upgrade.”
John Felts, 31, co-founder of Cruz Foam, got a big round of applause talking about a new biodegradable material made from shrimp shells to shape a surfboard.
The next step is to raise $250,000 and make a full-scale prototype in Santa Cruz.
Caitlin Davies, 36, a UC Santa Cruz alum, is launching her startup, Mountain Sea Adventures, taking groups on moonlight hikes and stand-up paddling after working seven years as a guide. Trips range in cost from $55 to $250.
She plans to give back by taking young women out on adventures, with the first group from Digital Nest in Watsonville.
UC Santa Cruz student Vernon Cole gave a polished demonstration of a new app called Real Time to help college students meet students who share their interests.
Afterward, tech veteran David Dennis complimented him, adding, “We should talk.”
Verve’s story made an impression on Cameron Lowe, 20. He has a startup called Stickify Brand, which turns logos into decals.
TECH OPPORTUNITIES
Here are some tech opportunities from Wednesday’s Santa Cruz New Tech Meetup:
Conscious Living: Santa Cruz-based company offers a taste of conscious living 1 p.m. June 8 at Scotts Valley Hilton, 6001 La Madrona Drive, Scotts VAlley.
OutSite: Inspired by a visit to Santa Cruz, founder offers eight properties for co-living and co-working and plans to expand to 100 locations by 2020.
Small Business Week Food Slam: 4-6 p.m. May 6 at Food Lounge, Center Street, Santa Cruz.
Fields and drones: Demonstration 2-4:30 p.m. May 7 with Drone HIV, Transition Robotics, Aero Vironment and InspecTools
at Monterey Bay Academy, Watsonville, mixer at 5 p.m. at Elkhorn Slough Brewery, 65 Hangar Way, Watsonville
Startup Challenge: 24 finalists pitch at 4 p.m. May 12 at Cal State Monterey Bay.
Abbott Square: Six new restaurants, two bars, performances and a secret garden opens June 2.
Get hired: Santa Cruz New Tech MeetUp 6 p.m. June 7 with Amazon, ProductOps and three big companies whose names will be announced later are looking to fill 500 local jobs.
Accelerators: Santa Cruz New Tech MeetUp Aug. 2 with first companies to participate in the new Santa Cruz Accelerator.
SOURCE: http://www.santacruzsentinel.com/business/20170504/santa-cruz-new-tech-meetup-verve-coffee-in-tokyo-lifeaid-on-inc-500
Santa Cruz New Tech MeetUp: Verve Coffee in Tokyo, LifeAid on Inc 500 By Jondi Gumz, Santa Cruz Sentinel Colby Barr slept on partner Ryan O’Donovan’s couch for a year when the bootstrapping duo set out to create one of the best coffee companies in the world. The enterprise they founded, Verve Coffee Roasters, will […]
LIFEAID Beverage Co.
Develops and sells nutritional sports and energy drinks. It's PartyAid is popular at Burning Man.
2016 INC. 5000 RANK: #396
3-Year Growth: 966%
2015 Revenue: $4.4 M
Location: Santa Cruz, CA
Industry: Food & Beverage
Launched: 2011
INC. 5000 HONORS
#24 - Top Food & Beverage companies
ON THE WEB
Web site: lifeaidbevco.com
LIFEAID Beverage Co. Develops and sells nutritional sports and energy drinks. It’s PartyAid is popular at Burning Man. 2016 INC. 5000 RANK: #396 3-Year Growth: 966% 2015 Revenue: $4.4 M Location: Santa Cruz, CA Industry: Food & Beverage Launched: 2011 INC. 5000 HONORS #24 – Top Food & Beverage companies ON THE WEB Web site: lifeaidbevco.com
Updated July 21, 2016 6:16 p.m. ET
LifeAID Beverage Co., a maker of nutritional supplement drinks, said it secured an investment from private-equity firm KarpReilly to fund the company’s expansion efforts.
Terms of the deal, described as a minority position, weren’t disclosed in a news release.
Santa Cruz, Calif., company said it would bolster its sales and marketing teams as well as expand its footprint in conventional retailers.
Orion Melehan, a co-founder at the company, said LifeAID had been approached by other private-equity firms before choosing to partner with KarpReilly. He said firms had heard of the business because of its presence in the CrossFit market.
Aaron Hinde, also a LifeAID co-founder, said the influx of capital would help the company hire more employees and invest in marketing and expanding its inventory base. Additionally, the founders noted that the company aims to expand into the golf market and grow its burgeoning food product division.
LifeAID’s performance and recovery supplement products include FitAID, FocusAID, PartyAID, TravelAID, GolferAID and FitAID Fuel Pouch.
KarpReilly invests in companies in the consumer sector, targeting retail, online commerce, restaurants, branded products, apparel, natural products, foods and beverages. The Greenwich, Conn., firm makes equity investments as small as $3 to $5 million and as large as $75 million.
KarpReilly said in February it acquired Zola, a maker of coconut water drinks, Acai juices and dark chocolate-covered fruit.
-Laura Cooper, Dow Jones reporter, contributed to this article.
SOUCRE: http://www.wsj.com/articles/karpreilly-backs-lifeaid-beverage-co-1469119927
Updated July 21, 2016 6:16 p.m. ET LifeAID Beverage Co., a maker of nutritional supplement drinks, said it secured an investment from private-equity firm KarpReilly to fund the company’s expansion efforts. Terms of the deal, described as a minority position, weren’t disclosed in a news release. Santa Cruz, Calif., company said it would bolster its […]
Gina Hall | Jul 22, 2016, 11:28am PDT
Beverage startup LifeAID raised an undisclosed round of funding on Thursday to pump up its growth.
KarpReilly led the round and now maintains a significant minority position in the Santa Cruz company. The private equity firm has also backed food ventures such as Sprinkles, The Habit Burger and KeVita.
Santa Cruz fitness drink maker LifeAid has raised money from private equity firm KarpReilly.
CEO Orion Melehan and President Aaron Hinde co-founded LifeAID in 2012 after meeting each other at a CrossFit gym. The two partnered up to fill what they say was a gap in the market for premium, healthy and convenient nutritional products. They now sell five specially-formulated low-sugar, natural supplement beverages and a protein/carb food pouch, each designed to boost performance and speed recovery for fitness enthusiasts.
“We are building our brand to serve consumers with functional products that fit their lifestyle,” Melehan said in a press release. “There is a momentous shift happening in the beverage market. Consumers are waking up to what they are putting in their body, demanding alternatives to traditional sports drinks, energy drinks and sodas.”
The company sells its beverages at more than 7,000 domestic outlets and in more than 22 countries. A prime target is non-traditional retail outlets such as golf courses and CrossFit gyms. But it also sells in The Vitamin Shoppe, H.E.B and atWhole Foods.
The company said it will use the new funds to add to its sales and marketing teams and support the company’s footprint at conventional retailers.
Gina Hall | Jul 22, 2016, 11:28am PDT Beverage startup LifeAID raised an undisclosed round of funding on Thursday to pump up its growth. KarpReilly led the round and now maintains a significant minority position in the Santa Cruz company. The private equity firm has also backed food ventures such as Sprinkles, The Habit Burger […]
LifeAID co-founders hiring, plan to expand to conventional stores
SANTA CRUZ >> For Orion Melehan and Aaron Hinde, the 40-something co-founders of healthy beverage startup LifeAID, year five may be their breakout year.
The day after their FitAID brand drink sponsored the Crossfit Games after-party for 2,000 people, the pair is on their way to a “flavor house” in Los Angeles where they will finalize a blend for a daily beverage.
This one will be called LifeAID.
“It’s a diet cola replacement,” said Hinde, a chiropractor and the company’s formula expert.
Check the FitAID label: 45 calories and 9 grams of sugar, lower than most carbonated drinks. You’ll find glutamine, glucosamine, CoQ10, turmeric, magnesium, vitamins C, D and E — ingredients athletes value.
Melehan pops in to mention the company’s two new blends, FocusAID to enhance workplace acuity and TravelAID to boost the immune system. Each recipe is slightly different; both are low in sugar and calories.
Both debuted in March at Expo West in Anaheim, which is the largest trade show for the natural, organic and healthy products industry.
The new products joined their first one, GolferAID to help golfers maintain energy, and FitAID, targeting athletes especially those at CrossFit, and PartyAID to feel good on your night out.
“After Expo West, we had a whole host of parties soliciting us, interesting in partnering with us and investing,” said Melehan. “We bootstrapped this from the beginning, we needed more money to scale.”
Last week, they announced an investment from KarpReilly, a private equity firm in Greenwich, Connecticut. This will fund their plans to bring their products, which are at New Leaf Community Markets, Whole Foods and have authorizations at multiple Albertsons/Safeway divisions to independent grocers, convenience stores and mom-and-pop markets. They have signed an agreement with Elyxir Distributing, which serves Santa Cruz County, and last week pitched grocery giant Kroger.
Currently, LifeAID has 26 employees and is hiring in sales, customer service and logistics. Hinde expects that number to grow to 40 by year-end.
The exact amount of the KarpReilly investment was not disclosed but Melehan said it’s in the “high seven figures.”
Melehan ticked off several reasons why the East Coast firm was a fit.
KarpReilly has taken 16 companies public.
KarpReilly invested in The Habit, a burger chain ranked as best by Consumer Reports and based in Santa Barbara. Melehan was a regular while attending UC Santa Barbara.
KarpReilly was co-founded by Allan Karp, who graduated from UC Santa Cruz with a chemistry degree before going to MIT. Karp has joined LifeAID’s board.
The investment allowed early shareholders to get some liquidity, “over 1,000 percent return,” Melehan said.
Are the LifeAID founders considering going public?
“That’s years down the road,” Melehan said.
Hinde recalls how Santa Cruz juice startup Odwalla was acquired by Coca-Cola.
“We don’t want to dilute our method and our brand,” he said. “We want to change people’s habits for the better.”
The Santa Cruz venture launched as consumers began to seek out healthier alternatives to soda.
Among the newcomers: KeVita, based in Ventura, selling cocoanut organic probiotic drinks, and Spindrift, based in Massachusetts, which offers fruit seltzers, and Suja, based in San Diego, specializing in organic, non-GMO, cold-pressured juice and a new line of drinking vinegars.
Carbonated soft drink sales sank to a 30-year low in 2015, Beverage Digest reported in March.
That trend, Melehan said, was evident to KarpReilly, which saw soft drink sales declining 10 percent a year in their portfolio of restaurants.
Glenn Ely of Elyxir Distributing expects to have FitAID in his Watsonville warehouse by the end of next week.
LifeAID BEVERAGE CO.
What: Manufacturer of premium, healthy and convenient nutritional products for active people.
Headquarters: Wrigley Building, 2833 Mission St., Santa Cruz.
Founded: 2011.
EEmployees: 26.
Leadership: Co-founders Aaron Hinde, president, Orion Melehan, chairman.
Information: Lifeaidbevco.com/ and 888-558-1113.
LifeAID co-founders hiring, plan to expand to conventional stores By Jondi Gumz, Santa Cruz Sentinel Wednesday, July 27, 2016 SANTA CRUZ >> For Orion Melehan and Aaron Hinde, the 40-something co-founders of healthy beverage startup LifeAID, year five may be their breakout year. The day after their FitAID brand drink sponsored the Crossfit Games after-party […]
SANTA CRUZ, Calif., July 21, 2016 /PRNewswire/ -- LifeAID Beverage Company has secured an investment from private-equity firm KarpReilly, LLC (Dollar Tree, Sprinkles, The Habit Burger, Kevita, Zola…) to fund its continuing path of growth. The total amount of the transaction remains undisclosed, although represents a significant minority position according to company reps.
LifeAID's line of "better-for-you" products includes FitAID, FocusAID, PartyAID, TravelAID, GolferAID, and the FitAID Fuel Pouch.
LifeAID co-founders Orion Melehan and Dr. Aaron Hinde considered other PE firms before selecting KarpReilly as the ideal partner. "The team at KarpReilly understands current consumer trends and passionately supports the functionality and nutritional value of our products. Additionally they were impressed with our go-to-market successes in non-traditional channels such as golf courses and CrossFit® gyms," stated company president Dr. Hinde.
CEO Melehan added, "KarpReilly has a long-view approach and an impressive track record of scaling consumer brands. With their capital investment and imitable expertise, we now have greater resources to continue on our roadmap. We are building our brand to serve consumers with functional products that fit their lifestyle. There is a momentous shift happening in the beverage market. Consumers are waking up to what they are putting in their body, demanding alternatives to traditional sports drinks, energy drinks and sodas. LifeAID is the answer."
"We were impressed with what Orion, Aaron and the entire team has done in such a short time with the resources they had available," says KarpReilly co-founder Allan Karp, who will be joining the LifeAID board. "LifeAID is full of tremendous promise and is a great addition to our beverage portfolio. The writing is on the wall... functional beverages represent an evolution, we are betting on the best suited team to lead that change."
The proceeds from this raise will expand the LifeAID sales/marketing teams, supporting LifeAID's growing footprint in conventional retailers through a DSD network. The brand is currently sold in The Vitamin Shoppe, H.E.B, and Whole Foods, with authorizations at multiple Safeway/Albertsons divisions. The natural channel will continue to be serviced by UNFI.
About LifeAID:
LifeAID is the leading manufacturer of premium, healthy and convenient nutritional products for different active lifestyles. Products are currently sold in over 7000 domestic outlets and in over 22 countries. For more information, visit www.lifeaidbevco.com
About KarpReilly:
KarpReilly, LLC is a private investment firm, founded by Allan Karp and Chris Reilly, whose primary mission is to partner with premier small to mid-size growth companies and help them achieve their long-term vision. KarpReilly currently manages funds and affiliates with capital commitments in excess of $500 million. Over the past 15 years, the principals of KarpReilly have invested in, sat on the boards of and nurtured over 25 growth companies. For more information, please visit www.karpreilly.com.
SANTA CRUZ, Calif., July 21, 2016 /PRNewswire/ — LifeAID Beverage Company has secured an investment from private-equity firm KarpReilly, LLC (Dollar Tree, Sprinkles, The Habit Burger, Kevita, Zola…) to fund its continuing path of growth. The total amount of the transaction remains undisclosed, although represents a significant minority position according to company reps. LifeAID’s line of “better-for-you” […]
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LifeAID, a functional beverage brand based in Santa Cruz, California, has completed its first capital raise outside of friends and family with an investment from private equity firm KarpReilly.
After announcing the news in a press release last week LifeAID co-founders Aaron Hinde and Orion Melehan discussed the investment in a call with BevNET on Tuesday, indicating the amount of the raise was in the “high seven figures.”
“Building out our distribution and sales networks is an endeavor and we knew it would require an institutional partner to back us,” said Melehan.
The duo went go on to discuss how the investment came about, as part of the company’s ongoing move beyond the targeted, niche communities – Crossfit gyms, golf courses, music festivals – where it’s built a following into more conventional channels of distribution, including Vitamin Shoppe, Whole Foods and several Safeway/Albertsons divisions.
“The plan was always to first build the consumer base and brand awareness in the on-premise market and dominate those niche channels,” said Melehan. “This raise will really help bridge the chasm between our niche communities and conventional.”
“Instead of pushing our way into conventional we’ve gotten pulled into conventional,” added Hinde. “How is it we’re doing so well at H-E-B? Well, Crossfitters shop at H-E-B, golfers shop at H-E-B, the Burning Man community shops at H-E-B. Our community is already intact and already shopping at these retailers and they’re demanding our product.”
The company’s move into conventional retailers will also see the introduction of a more mainstream, less specialized addition to its product line. Later this year the company will launch LifeAID, a beverage high in antioxidants and natural anti-inflammatory ingredients, targeting the soda consumer looking for better-for-you alternatives.
“This is a beverage people could easily swap out their daily diet soda habit for and then they’ll continue to have their FitAID with their fitness, and FocusAID at work when they need a pick-me-up, and PartyAID on the weekends,” said Hinde.
For KarpReilly, its investment in LifeAID is the latest addition to a growing beverage portfolio. The firm has previously invested in Kevita and Spindrift, and in February of 2016, the firm announced its acquisition of Zola.
SOURCE: https://www.bevnet.com/news/2016/lifeaid-founders-discuss-karpreilly-investment
Neil Martinez-Belkin | Jul. 26, 2016 at 5:49 pm LifeAID, a functional beverage brand based in Santa Cruz, California, has completed its first capital raise outside of friends and family with an investment from private equity firm KarpReilly. After announcing the news in a press release last week LifeAID co-founders Aaron Hinde and Orion Melehan discussed the investment […]