Dan Abbate is a Contributor on the Price of Business on Business Talk 1110 AM KTEK on Bloomberg’s home in Houston (learn more about Dan at www.robotaton.com).
Dan recently interviewed Ken Uptain, founder and CEO of Essentia Water. Since 1998, Ken has managed the vision and top-level business side of Essentia Water. This includes developing and implementing strategic objectives; leading and motivating the company’s executive, finance and sales teams; overseeing growth initiatives; and providing direction for Essentia’s overall brand essence. One of Uptain’s proudest accomplishments as founder and CEO of Essentia is perfecting the technology behind Essentia’s process to bring to market a product that contributes to proper hydration and can truly help people feel better. He is also proud of Essentia’s high employee retention rate, with half of his staff having been on board since the company’s inception.
KEN: Today Essentia Water is the no. 1-selling bottled water brand in the natural channel and fastest growing top 10 premium bottled water brand at traditional grocery. Essentia is a privately held, owned and operated company based just outside of Seattle in Bothell, Wash. The company employs just over 20 fulltime employees. Essentia also has partnerships with a range of outsourced services and companies, including PR, advertising and marketing consultants. Essentia contracts with third-party co-packers to produce its water, using a unique three-step process. This result is a hydration-perfected™ electrolyte-enhanced water with an alkaline 9.5 pH. Easily absorbed in the body, Essentia hydrates, restores and balances to promote optimal health.
Essentia Water has come a long way since first launching in 1998, back when I had a strong gut inkling that we were onto something special with functional, high pH water. But back then consumers were only just starting to accept source water and couldn’t yet fathom the benefits of electrolyte enhanced, alkaline water. At the time, our growth strategy focused on educating and penetrating the natural channel. We grew the brand organically by focusing on grassroots retail education in the natural channel reaching brands like Whole Foods and Sprouts.
DAN: Today’s interview is all about companies in active growth phases and how they manage that. Can you tell me about your current growth. What’s your strategy? What will your company look like at the end of this phase? How are you managing this?
KEN: FoodBev revealed the global flavored and functional water market is projected to reach $36 billion by 2019. As health conscious consumers embrace functional bottled water, Essentia is preparing for rapid growth into mainstream markets. Essentia is rapidly building our DSD (direct store delivery) system. We anticipate having full distribution across North America within two years.
Essentia is careful to scale our growth efficiently. We maintain our commitment to grassroots education and organically growth. This approach carried through to everything from how we hire to how we market the brand. Even amid rapid growth, we are careful only to add overhead as growth allows. We recently welcomed several longtime consultants as fulltime members of the Essentia family. This includes Paul Curhan, VP of Marketing & Innovation; Neil Kimberley, VP of Strategy & Market Development; and Tahne Davis as Creative Director & Brand Manager. These executive-level positions were added in response to the brand’s accelerated growth.
We are taking a methodical approach to growth. We are going market-by-market and region-by-region, focusing on core markets from coast to coast. Along the way, we make sure to maintain the position as a premium brand with a focus on consumer education and building an authentic, premium customer base.
DAN: In your experience, what was/is the most important thing for you to consider in developing your growth strategy?
KEN: It has been extremely important that Essentia Water stick to our company’s values regardless of how fast we grow. We have built Essentia on passion, belief in the product and by developing a following of loyal customers.
Early on Essentia opted out of pricey consumer marketing and endorsements to invest in training retail employees to talk about the product, and rely on real customer word of mouth to tout the product. Essentia only recently announced the addition of its inaugural team of Hydration Specialists. These brand evangelists spread the word about Essentia in key markets. They are trainers, yoga instructors, chefs and others with a strong belief in the brand. They have the background to serve as credible hydration educators.
This grassroots approach is a stark contrast to how many other beverage brands market. For instance Talking Rain, which markets the SparklingICE brand of water, just signed Kevin Durant for an undisclosed amount of money. Kobe Bryant recently invested millions in emerging sports drink BodyArmor, whose team includes A-list athletes. Many athletes like MLB pitcher Brandon McCarthy and professional golfer Natalie Gulbis drink Essentia. But we stand by our approach that empowering loyal consumers to build authentic word of mouth is a more credible way to build our brand versus expensive endorsements.
DAN: What is one thing that a company seeking to enter a growth phase should keep in mind? What pitfalls are there to avoid?
KEN: My best piece of advice for companies seeking to enter a growth phase is not to grow too fast. Understanding the market, exercising patience and managing growth at a deliberate pace is a less risky approach than exploding exponentially in a manner that has the potential to backfire. This includes everything from monitoring the market pulse to planning distribution, production and sales support.
One pitfall to avoid is assuming you will succeed in each new market and growth area in exactly the same manner you did in the previous market. Just because one demographic embraced your brand does not necessarily mean the next one will. And even if they do, you still need to be ready to adapt your branding and marketing strategies to meet the changing needs of new markets.
Another pitfall to avoid is employee burnout. Don’t be penny wise and pound-foolish when it comes to good staff members. Try not to set them up for failure with too big of a region to cover or not enough support staff to allow them to do what they were hired to do. If you are leery of bringing on too much overhead, outsource first.
DAN: What does a high growth rate demand of your organization and staff? How are you addressing this?
KEN: As Essentia comes off the heels of a successful, yet slow and deliberate 10 consecutive years of growth – eight of which are double-digit – we are now ready to commit to a more rapid brand expansion. This growth has required our longtime staff to embrace new hires, new responsibilities and new approaches to reach growth goals. We have created and hired for several new sales and marketing team positions in key regions across the country. By having dedicated staff to support our brand’s accelerated growth into mainstream retail channels, we are able to ensure the continued quality of our messaging that has historically focused on retail and consumer education about the benefits of functional, high-alkaline water.
In addition to hiring a dedicated sales and marketing staff, we have formed new distribution partnerships with ties to some of the mainstream convenience and grocery channels into which we are making inroads.
DAN: Where can folks go to learn more about your product?
KEN: To learn more about Essentia, please visit www.essentiawater.com.
Essentia is available at natural foods markets and grocers throughout the United States, and online at Amazon.com. In Texas, Essentia Water is available at a range of retail outlets, including: Whole Foods, Central Market, HEB and Sprouts among others.
DAN: Thanks so much for taking the time to talk with me today, Ken. I appreciate you sharing your experience and knowledge and I love hearing about interesting people and companies doing interesting things.
Do you have advice on growing your business? Tell me about it! Email me at dan (at) robotaton (dot) com.