Boundary Waters Brands' Joia adds variety to a flat soda industry.
Bob Safford was enjoying a cocktail when the idea for Joia, a new line of natural sodas, came about. As he savored his drink, he thought about having a soda with the same rich, complex layers of flavors.
Inspired, Safford founded Boundary Waters Brands in 2010 to develop the Joia product line, which was released last summer.
After several focus groups and ingredient experimentations, Safford's team produced four flavors: pineapple coconut and nutmeg; lime hibiscus and clove; grapefruit chamomile and cardamom; and blackberry pomegranate and ginger.
Safford, a former marketing executive with Kraft and General Mills, said these flavors give Joia a competitive edge.
"Taste is what primarily sets us apart from other sodas," he said. "It's a very competitive industry, but we felt like there was room for a product that was more sophisticated and had more unique flavors."
Joia sodas contain no preservatives or stabilizers. Nor are there any artificial ingredients or flavors, Safford said.
St. Louis Park-based Boundary Waters Brands is just one of many companies -- big and small -- offering "alternative beverages" in a growing trend of natural and functional sodas that have emerged across the industry.
Beverage Digest, a trade publication that covers nonalcoholic beverages, values the U.S. soda market at about $74.2 billion per year. But sales of carbonated soft drink sales fell in 2011, and overall industry sales have remained relatively flat since 2004.
This decline is attributed to an increase in more educated and health-conscious customers, many of whom abandoned sugary sodas for beverages that are greener and healthier, according to industry reports. This includes sodas that have functional uses, such as boosting energy or acting as a dietary supplement.
Joia received positive feedback during samplings and focus groups, Safford said, and sales for all four flavors have increased.
"Minnesota was the perfect market to launch Joia, because of its higher-end retail markets that are not dominated by mass-market groceries," he said. "There are also more co-ops and more sophisticated customers who would be open to a product like Joia."
Debbie Leland, a veteran specialty foods buyer at Kowalski's Markets, said she's never seen anything like Joia before.
"It's a good fit for Kowalski's" Leland said. "Our customers love it. It's selling faster than I thought."
The soda is currently sold in premium retailers like Lunds, Byerly's, Whole Foods and Kowalski's. It retails for $1.69 per bottle or for $5.99 per four-pack. Other distribution outlets include bars, restaurants and coffee shops.
Getting any new beverage line up and running is difficult. Joia's complex ingredients and glass bottle, among other aspects, created additional production and distribution barriers.
"It's difficult to produce Joia because it has so many natural ingredients that need to be carefully mixed and pasteurized. It also comes in glass bottles, which is difficult to transport," said Carleton Johnson, a founder and the chief marketing officer at Boundary Waters Brands. "Very few distributors want to go through the hassle." Yet partnering with distributors is crucial.
"Having good distributors is the success factor in this business," Safford said.
The company currently works with five distributors in Minnesota, three of whom are with Anheuser-Busch. Joia is bottled in Brighton, Mich.
The company's strategy for distributing its soda is deliberate and gradual: Enter a market, saturate it, expand it with product samplings and event sponsorships, and then seek new markets, Safford said.
Thomas Belich, a marketing channels lecturer at the Carlson School of Management at the University of Minnesota, said this strategy presents challenges.
"Specialty drinks come and go, so it's difficult to build a national customer presence gradually, because the flavors are often linked to specific areas. Some call these 'cult brands,''' Belich said. "Brands with a small but loyal following."
Brad Blum, the founder and executive chairman of Blum Enterprises and one of Joia's investors, is more hopeful.
"I've been in the restaurant business for a number of years now, and it seems like Joia has lots of potential," said Blum, who formerly led Olive Garden and Burger King as chief executive officer. "It could potentially be sold in restaurants, not just grocery outlets. I could even see this going internationally, primarily in Europe and East Asia."
Sunny Thao is a University of Minnesota student on assignment for the Star Tribune.