“I was used to dealing with established brands with 100% awareness, which is a very different experience from trying to build a brand from scratch where there is zero awareness, trying to build distribution, and fighting tooth and nail for every single dollar you’re owed,” he told FoodNavigator-USA.
But while he doesn’t have the big bucks, he does have a product with attributes that really resonate with consumers, and where he has secured space on the shelf, the products are moving nicely, he says.
“I think the writing may be on the wall for some large beverage brands because they just have such negative baggage that they have become the poster child for diabetes and obesity, which to me is not necessarily fair, as obesity rates rose when soda consumption declined.
“But they haven’t done a great job of changing the story, and while they are trying different sweeteners, they are still seen as artificial with no nutritive value. I think maybe if they used only cane sugar and kola nuts people might see the attributes differently, but I don’t see them changing their core brands along these lines.”
He adds: “So much more space is now being allocated to beverages that are seen as less processed and more natural, more simple, more transparent.”
The ready-to-drink tea market is so much more price competitive now
For Luks, having a tablespoon of raw honey in every bottle has been key to the success of the Honeydrop brand from the beginning, and definitely inspired Whole Foods to give his first products - honey-infused teas - a shot very early on, he says.
“There are a lot of products that say ‘honey’ on the front of pack, but when you look at the ingredients, half of them are using high fructose corn syrup or refined white sugar and just adding honey flavor. We use a tablespoon of honey in every bottle.”
But his latest product line – cold pressed juices with local raw honey or Manuka raw honey (from New Zealand) - is where he thinks the big potential lies.
“The ready-to-drink tea market is so much more price competitive now than it was when I started and it’s hard to stand out.”
Unlike the Honeydrop teas, which are hot filled, his new line of cold pressed beverages are high pressure processed (no heat, only pressure), so he is able to promote the fact that the honey in them is ‘raw’ on the front of pack, which has proved a key selling point, says Luks.
“Around 18 months ago, we had requests from retailers to develop a drink where we call out the fact that we are using raw honey. Our ability to communicate the fact that we are using raw honey is differentiating us, whereas we can’t say that about the tea because of the heat treatment.”
Four simple ingredients
The HPP process also means he can keep his ingredients list ultra-simple (Honeydrop ‘Apple, Ginger, Lemon’ has four ingredients: organic apples, organic ginger, organic lemon and raw manuka honey; while ‘Lemon Cayenne’ contains water, organic lemons, local raw honey, and organic cayenne pepper), says Luks.
Meanwhile, the 10.5oz bottle means he can keep the price at $4.99 (in line with other HPP products such as Suja Elements and Essentials or Harmless Harvest raw coconut water) and keep the calorie count low despite the honey content.
The juices are available at Whole Foods, Fairway, Fresh Direct and other natural and gourmet stores in New York, New Jersey and New England, but are also gaining traction in the mid-Atlantic and the south and will hit the west coast shortly, says Luks, who says he got great feedback from retailers about four new additions to the range launched at Expo West: Matcha Lemon, Strawberry Lemon, Turmeric Lemon and Kale Cucumber.
HPP is definitely in vogue right now
The biggest ongoing challenge, says Luks, who presses, fills and HPP treats his products at the same location in the northeast, is “How do you create awareness and emotional connection to your product when you don’t have Pepsi or Coke dollars to spend?”
That said, the space allocated to HPP products is growing, and the raw honey message gives him a real point of difference, he says.
“HPP is definitely in vogue right now, in part because of the phenomenal taste profile but also because you don’t have to add preservatives and colors and you can just use recognizable ingredients.”
Another thing that’s changed since he first launched Honeydrop is what is in – and out – of the cooler, given that space is at such a premium, he says:
“When I launched, every coconut water from Vita Coco to Zico was in the cold cooler, but today they are in TetraPaks on the warm shelf. Retailers realize they don’t need to put these pasteurized products in cooler, which is unfortunate for those players as they are not getting the impulse purchases and immediate consumption trade that they used to.”