PURCHASE, N.Y. — Karsten Idsal said he looked at PepsiCo, Inc.’s North American Nutrition Greenhouse program as “C.P.G. 101.” Mr. Idsal had practically no experience in consumer packaged goods, including foods and beverages, before co-founding Hapi Drinks.
“That was one of the biggest benefits of the Nutrition Greenhouse, getting mentorship from people who did have a lot of experience and had been working in C.P.G. either their whole career or a large chunk of it,” he said.
Apparently, he learned well. PepsiCo on April 24 selected Hapi Drinks, Austin, Texas, as the recipient of a $100,000 grant. Hapi Drinks offers Hapi Water, a sugar-free drink aimed at children.
“Hapi Water demonstrated all the core aspects of what the Nutrition Greenhouse stands for: collaboration, nurturing the entrepreneurial spirit and strategic business acceleration,” said Daniel Grubbs, managing director of the PepsiCo Ventures Group. “Karsten and his team were outstanding partners, working with their mentors to truly focus on driving the business forward.”
Purchase-based PepsiCo launched its North American Nutrition Greenhouse program last year to discover and support emerging brands in the food and beverage sector. Ten selected companies received advice in strategic planning, brand optimization, product development, supply chain management, customer acquisition and distribution from PepsiCo mentors during a six-month program.
The PepsiCo program especially helped in developing a marketing plan, Mr. Idsal said.
“I had been kind of chipping away at different initiatives on my own, not having a deep background in food or beverage,” he said. “We were able to look at the situation on the ground, look where our product was and how it was distributed and come up with a plan to support that. That was a major ‘a-ha’ moment.”
K.B. Parkes, a dentist in Nashville, Tenn., created Hapi Drinks. Mr. Idsal met Dr. Parkes through a mutual friend and began investing in the project. Then in November 2014 he left his financial job to lead Hapi Drinks. He moved to Texas since his family lives there. Hapi Drinks, with Mr. Idsal as chief executive officer, was launched as a company based in Austin in September 2015. Dr. Parkes is still a partner in the company and remains a dentist in Nashville.
The company initially was successful in getting Hapi Water into H-E-B and Whole Foods Market retail outlets in Texas. Now, Walmart is the company’s largest customer, and Hapi Water is sold on Amazon. The product is sweetened with erythritol and stevia. Other ingredients include water, citric acid, vegetable juice for color, natural flavor and ascorbic acid (vitamin C).
Having worked as a research analyst for a banking company, Mr. Idsal had financial experience before leading Hapi Water. He also previously served as an infantry officer in the U.S. Army.
“The military is an awesome place to learn a lot of the essential skills in being an entrepreneur, namely perseverance, fortitude, just putting your head down and working through problems and not getting too high or too low,” Mr. Idsal said. “There’s no better training ground than the military for that, and that’s kind of what entrepreneurship is all about.”
Hapi Drinks and the other nine finalists all received $20,000 from PepsiCo last fall. During the six-month program, the 10 companies grew their revenues by an average of 200%.
“We were looking for companies that are helping transform the food and beverage industry,” Mr. Grubbs said. “We looked at the product and brand qualities and chose brands with a clear focus on consumer wellness, a scalable business model, and were unique in the marketplace.”
The finalists were:
- Bohana, a Boston-based company that reinvented an ancient high-protein snack with popped water lily seed;
- Hapi Drinks;
- IQ BAR, a Boston-based company that offers a nutrition bar formulated for cognitive energy, function and health;
- Remedy Organics, a company based in Englewood Cliffs, N.J., that offers plant-based functional beverages made with ingredients like ayurvedic herbs and botanicals along with protein and probiotics;
- Rule Breaker Snacks, a company based in Brooklyn, N.Y., that offers bean-based treats with protein and fiber that are gluten-free, vegan, non-G.M.O. and free from the top eight allergens;
- Sophie’s Kitchen, a company based in Sebastopol, Calif., that offers plant-based seafood alternatives that are gluten-free, soy-free, non-GMO Project verified and kosher;
- Too FIT, a company based in Fort Worth, Texas, that has a lifestyle brand for nutritional supplements;
- Torii Labs, a company based in Calabasas, Calif., that offers plant-based functional beverages;
- Wildway, a San Antonio-based breakfast and snack food company that offers better-for-you products;
- YoFiit, a Toronto-based company that offers plant-based meal solutions, one of which is a patent-pending chickpea milk alternative. The product is high in omega-3 fatty acid content and offers 40 grams of protein per container.