Essentia drives push into convenience channel as premium water category catches fire
“When I started back in 1998, I thought it was pretty disruptive, but I quickly realized that I was way ahead of my time.”
Aside from the ionization, electrolytes and high pH, the fact that Essentia is sourced from municipal water that’s been purified – as opposed to spring water – was also fairly novel in the market, he tells FoodNavigator-USA.
“At the time most bottled water was ‘source water’ and so when I was getting a lot of deer in the headlights looks when I started [pitching Essentia].”
Undeterred, Uptain persevered and “just let the company grow organically… I didn’t really do any marketing, I just took the orders and kept the brand out there.”
2008: ‘It was time to go to work…’
A decade later, however, Uptain sensed things were changing. Orders were picking up fast, and it had become clear that the market had caught up with him.
“Orders were going up, I was getting a lot of calls and it was time to go to work and hire sales people to really get the brand moving and in 2009 and 2010 we started to branch out beyond the natural channel and move into conventional grocery as well.”
By 2014, the Washington State based brand was exploding and Uptain sought external funding for the first time, with private equity funds First Beverage Ventures and Castanea Partners taking an (undisclosed) equity stake although remains the largest shareholder.
Essentia is the #1 selling bottled water in the natural channel
Today, Essentia is the #1 selling bottled water in the natural channel with a 15.5% share (SPINS), outselling brands such as FIJI – and the #4 selling premium unflavored bottled water brand in conventional grocery, says Uptain, who says sales really picked up in 2012 after a packaging refresh, while a new 700ml format with a sports cap for the c-store market that hit shelves in January 2016 has given sales a further boost this year.
“Essentia is up 123% according to IRI [multi-outlet and c-store] data in the latest 52 weeks – and that’s coming from great velocity and new distribution.”
“Our ACV in natural is around 95% but there’s still a huge opportunity to increase our distribution in conventional grocery – where all the retailers are allocating more space to premium waters because they are growing the fastest and they deliver better margins. Hardly anyone is saying no!
“But now that we’ve got direct store distribution (DSD) deals in place nationally – we’ve now got about 60% of the populated areas covered by DSD - our big push this year is into convenience. We’re also getting into the drug channel – we’ve just got authorization to go into CVS nationally and we’re also working with Walgreens. Next year we’ll probably look at [the] club [channel] as well. We get a lot of requests from international companies but we still have so much headroom in the US.”
We’re not pushing the alkaline water angle
But what is all of the fuss about? And why is Essentia [strapline: ‘Hydration Perfected’] resonating with consumers?
While the high-pH (9.5+) of the water - which is highlighted on the front of pack, and described in several blog posts on the website as conferring health benefits - is clearly contributing to its appeal for some consumers, Uptain argues that superior hydration is the brand’s key point of difference.
“Health Onvector did a clinical study in 2014 [a double blinded crossover trial with 100 adults] which showed that Essentia was more effective at re-hydrating people [after exercise] than regular purified bottled water [blood viscosity returned to normal levels faster with Essentia after moderate exercise - athough the study, which has not been published in a peer-reviewed journal, does not explain how clinically significant this is].”
“There are players out there adding minerals to water to increase its alkalinity and using this as their primary point of difference, but to my knowledge there is no scientifically proven health benefit to that," says Uptain.
“At Essentia, we purify the water first [using microfilters, reverse osmosis and UV light], then we add electrolytes [trace amounts of magnesium, potassium, calcium and sodium bicarbonate], and then we use a proprietary ionization process to remove bitter-tasting acidic water ions – which raises the pH, so we just happen to be alkaline as a result of the ionization process. Our product just re-hydrates you better, it’s better absorbed and it’s because of ionization.”
We have a very loyal customer base
Asked how meaningful these benefits are to the average consumer – as opposed to endurance athlete – and whether most of us can stay hydrated with plain old tap water, Uptain said: “Once people discover the brand, they tend to stick with it because it just makes them feel better, so we have very very loyal customers that drink nothing but Essentia for all-day hydration.”
And the target audience? The core consumer is in the 24-35-year age bracket, says Uptain, although the reach is much wider.
“Essentia is a mainstream product. We’re not just going after athletes or fitness enthusiasts.”
