Consumers are becoming more health conscious, leading to a rapid rise in sales of bottled water and a decline in sugary carbonated drinks. It’s this space that Troy Douglas and Drew Bilbe, co founders of beverage company Nexba, wanted to target.
The idea came from Bilbe’s time as an exchange student in Mexico in 2010.
“While I was over there I noticed that the Ice Tea category, but most importantly the ‘better for you’ beverage space was just such a big part of their market. It was about 12-14% of that Mexican market,” Bilbe says.
Meanwhile, the range of these kinds of drinks available in Australia was both proscribed as well as dominated by a few players. On a national level, the market was dominated by NesTea and Lipton, made by Coca Cola Amatil and Unilever.
“If you think of carbonated soft drinks, they are owned by Coca Cola and Schweppes. If you think of energy [drinks], that is owned by Red Bull and V,” says Douglas.
“What Drew and myself identified is that there is no brand both locally and globally that owns ‘better for you beverages’.”
So the two started making ice tea in a factory near where they grew up in Sydney’s north. The factory was only capable of producing 2,000 cans an hour but it was enough to validate their idea. They took their new drink to cafes and schools.
“We got everybody that we knew involved in the whole process. We were working around the clock. My Grandpa was probably one of the hardest workers,” says Bilbe.
Initially, the Australian market wasn’t ready for what they were making. And they couldn’t advertise widely either. Douglas talks about the enthusiasm for healthier products, and for making healthier products, but this wasn’t backed up by purchasing behaviour. This has changed over the past year.
“When we first launched we had stevia (a sweetner) in our products. So, over 4 to 5 years ago. But we never actually called it stevia on our products cause no one actually knew what stevia was,” says Douglas.
“And then Pepsi and Coca Cola [started] started smashing out what Stevia is and we are kind of riding that. Their advertising budgets.”
Nexbia now has deals with Coles, Woolworths and a number of other chains. But it’s trying to remain small and nimble. It has ditched the manufacturing operation and is now using contractors so it can focus on product and branding.
Douglas and Bilbe talk about creating small, exclusive and niche product lines, potentially based on drink “trends” and seasonality. It’s a way of differentiating from larger competitors.
“It’s easier for us to be nimble and listen to consumers and make changes and produce products that are on trends,” says Bilbe.
For example, the company is launching a series of exclusive drinks just for Woolworths over Christmas — Passionfruit, Cranberry and Apple ice tea flavours. Something a larger, slower moving company wouldn’t be able to do.
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