Greg Steltenpohl knows how to create a beverage empire. He's done it before. This time he wants to disrupt the dairy case — and the food system.
Steltenpohl co-founded Odwalla in 1980 and built it into a successful juice company before selling to Coca-Cola in 2001. Now he's back with his latest venture, Califia Farms.
The brand started making juices but in seven years has expanded to almond milks, non-dairy creamers and cold brew coffees. Out of its 76 total products, 28 are coffee drinks.The category as a whole is growing, and Califia is trying to capture the plant-based corner.
Almond milk still represents a sliver of the nearly $16 billion milk category. But its market share is growing, as more people eat and drink less dairy or drop it altogether for health and sustainability reasons.
"We don't like to be dogmatic about it," said Steltenpohl, co-founder and CEO of Califia Farms. "We want to make it easy for people to go plant-based and dairy-free with better packaging, more enticing flavors and the exploratory aspect of it."
Steltenpohl wants to infuse creativity into the dairy case that he criticizes as only being differentiated only by things like skim, whole and chocolate. Some of Califia's flavors include cinnamon horchata, chocolate coconut and even holiday nog.
The packaging could lure the casual consumer who notices Califia's bottles are shaped differently than traditional milk cartons or jugs. Their necks are skinny and their bottoms curve out. Their labels could entice the more health-conscious consumer with buzzwords like soy free, dairy free, gluten free and carrageenan free.
Steltenpohl argues that nut milks naturally present more opportunity for innovation and experimentation than their dairy peers.
"There's cashew, coconut, oat, almond, toasted variety. It just puts us into a much more creative realm than the udder of a cow," said Steltenpohl, who was honored at Goldman Sachs' Builders + Innovators Summit last month.
As a category, almond milk's sales reached $1 billion for the 52 weeks ended Oct. 8 for total U.S. multi-outlet with convenience stores, according to IRI, a Chicago-based marketing research firm. That's up nearly 7 percent from the previous year.
Overall, Califia sold 31.2 million units, generating $128.5 million in revenue, during that same time period, for total U.S. multi-outlet with convenience stores, IRI said. Dollar sales grew 33 percent from the previous year.
The brand is available in more than 20,000 stores nationwide, from specialty retailers like Whole Foods to conventional stores like Kroger. Convenience stores are a big opportunity for Califia's ready-to-drink coffee products, and it's in the process of expanding its distribution network.
Califia produces about 1 million servings of nut milks per day. That may sound like a lot, Steltenpohl said there's still plenty of room for the brand, and the category, to grow.
"We're still in the early days," he said. "Household penetration is just over 50 percent, so half of the country still has to try plant-based milk."
As for how Califia plans to get more people to try its products, Steltenpohl said he has no plans to sell this time around. At least not now.
Califia already has solid investors. Sun Pacific, producer of Cuties clementines and Mighties kiwis, holds a majority stake in Califia. Steltenpohl and other key employees hold minority stakes. Private equity firm Stripes Group holds a minority stake that's roughly equivalent to that held by Steltenpohl and the other employees.
That doesn't mean Califia isn't a target. The industry is looking to acquire and invest in brands that are perceived as healthy and produce foods and drinks from plants.
Danone bought WhiteWave, producer of nut milk brands So Delicious and Silk, earlier this year. Dr Pepper Snapple bought antioxidant drink brand Bai earlier this year. PepsiCo acquired kombucha brand KeVita last year.
Regardless of who owns Califia, expect the brand to continue its quest to conquer the space. Steltenpohl wants to continue expand into new categories and grow internationally to become one of, if not the leading brand.
Califia tries to reach consumers in a number of ways, including more traditional strategies like using social media and partnering with influencers and nutritionists. It has also sampled more creative techniques like opening a pop-up shop inside a Bandier retail store in New York this spring and working with artists to paint murals in San Francisco, Brooklyn and Los Angeles this fall.
"Where Califia comes in is to disrupt the usual pattern and stand out symbolically and stand apart from companies of the past," he said. "You have to do it with some kind of style and sense of energy and enthusiasm and passion. And the consumer responds to that."