How to get $90 million from Coke for your big idea

I have been fortunate to be around many breakthrough consumer products brands over the last decade, initially as an investment banker at Goldman Sachs and now generally as a board member, advisor and investor. One such brand is Suja, the high-pressure pasteurization (HPP) juice company that recently followed in the footsteps of Honest Tea, Zico and Illy by selling a stake to Coca-Cola.

I have gotten to know the founders and CEOs of all the aforementioned, but there is no one-size-fits-all magic bullet to get the attention of, and ultimately sell to, a large strategic like Coke.

With Suja there were early signs it was going to be a winner.

Suja Essentials
Source: Suja Essentials
Suja Essentials

I remember being at the Natural Products Expo West (the Super Bowl of trade shows for the industry) several years ago, and I heard everyone buzzing about this Suja brand. The level of buzz surrounding the company was strong enough that it attracted investors, myself included, and it thereby created a "who's who" of consumer packaged goods (CPG) experts involved with Suja in some capacity.

This kind of network is invaluable and tough to put together organically. I don't think that most people invest based on "buzz," but occasionally there are products that create such a stir it's human nature to say, "Well, if person A, B and C are all in this, there must be something to it."

In Suja's case, the substance matched the hype, but the viral PR effect helped a lot in the early stages. Of course, you can't rely on buzz, but if you follow the advice below, you should increase your chances and might even be the next Suja.

1. The term disruption is overused for good reason.

Technology and connectedness are giving almost every industry a chance for a reboot, and consumer products companies are starting to become the beneficiary.

In Suja's case, the technology was in the form of creating organic high-pressure pasteurization juices and filling a need for consumers with busy lives who wanted something beyond your standard OJ. Do you know many millennials that drink orange juice?

For years we've been hearing that we need to eat more fruits and vegetables. I don't think that there's a person on the planet who isn't aware of that, but the practicality of doing so is hard for three main reasons: cost, convenience and nutritional value. Eating a big, varied mix of fruits and vegetables can be quite expensive. Even worse, it's not particularly convenient to cook/steam a bunch of vegetables if you aren't cooking meals at home, and having raw vegetables on the go isn't often easy. Finally, many people believe that, depending on how you prepare your fruits and vegetables, they can actually lose a lot of their nutritional value (through heating, mainly).

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Enter HPP juice and Suja. Some of Suja's juices cost as much as $8–$10, but when you consider the amount of fruits/vegetables included, it's not a bad deal. Even more encouraging, Suja has an Elements line with an MSRP of $3.99. This is truly for the masses, and Coke realizes that this could literally appeal to anyone who has a desire to be healthier.

The HPP process is still new, so not all experts are aligned, but I believe that a significant portion of the nutritional integrity is maintained, certainly more than many traditional cooking methods.

2. You can't be everywhere for all people when you start—but you need to be smart about selected distribution markets.

As anyone who has ever tried to start something knows, to say distribution is the key would be an understatement.

True story: I once got an investor update with a page entitled "Strategy," and all the page said was "Distribution, Distribution and Distribution x100000000000000."

With consumer brands, you have to put the product in danger of being purchased, but it's really hard to be all things to all people and get the brand everywhere, especially early on. Bigger players know this, and most good brands rely on the "proof of concept vs. runway" strategy: A brand needs to get enough traction in selected major markets while still leaving enough runway that the potential acquirer says, "They sold X in only this many markets; imagine what we can do once we get it into XYZ number of doors."

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Suja did a great job building its brand in California and New York, especially through its Whole Foods partnership. Many organic/natural products have moved toward a model of giving Whole Foods an "exclusive" for a period or, in some cases, even consulting with Whole Foods as they develop a product to get "buy-in" before it even launches. The goal is guaranteeing shelf space and other benefits. Suja did a great job going all-in with Whole Foods. They were named one of the grocer's "Brands of the Year" the first year they were in the store, almost unheard of for a new brand.

The prospect of taking Suja mainstream clearly excited Coca-Cola. Despite Whole Foods seemingly being everywhere, they are still a relatively small part of the overall grocery industry. So Coca-Cola can help Suja increase its ACV (All Commodity Volume is jargon for market penetration) in conventional channels, while Coca-Cola gains credibility because there is a faction of Whole Foodies who don't think that brands owned by Coke, Pepsi, etc., should have any place in the store. They need to keep showing that they can be progressive.

3. What big brands fear most may end up being your buy factor.

Have you heard of FOMO (fear of missing out)? I'm stealing a phrase that I see all over my social media, but I think it has merit in this case.

The big boys have occasionally nailed it with trends, but they have equally missed the boat on plenty. In many CPG industries, the larger strategics have started to buy up brands (generally minority stakes if they are earlier stage) with a "rent with the option to buy" mind-set given the cost of them missing out on a whole new category (e.g., the coconut water craze). They have to believe this about your brand and category, but it's also your job to sell them.

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When a strategic approaches a brand like Suja, it's pretty clear that there is interest and they have at least shown their hand to a degree. Suja did a great job of being "seemingly everywhere," as I heard one person say. The reality is that they weren't, but they did well in key markets (as discussed, NYC, LA), showed well at industry events and trade shows (also mentioned above) and found just the right balance of staying on the radar of Coke and some other key strategics so that they didn't have to show up one day and say, "OK, we're ready to be bought," because it rarely happens that way.

4. Think you can scale all on your own? Good luck—many have tried; few have succeeded.

You might ask, Why sell a stake rather than go it alone if it's proving successful?


Despite having huge top-line growth, a brand like Suja can't make money in the way it went to market until it gets to scale. Although some brands do get to scale, I think that most brands are wise to sell with significant "runway" left rather than try to get to scale on their own. It's just too hard. Coke brings that scale and also creates synergies that make it a win-win.

By Courtney Reum, founder of VeeV Spirits, Suja investor and a member of the CNBC-YPO Chief Executive Network. Suja was not consulted during the writing of this article.

[Editor's note: The Coca-Cola stake is reported to be $90 million for a 30 percent stake in Suja with an option to buy the juice company in three years. The merchant banking arm of Goldman Sachs also invested $60 million for a 20 percent stake in Suja, which is valued at $300 million.]

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