In early 2005 Princeton residents Nancy Dince and Dimitri St. Phard saw a gap in the burgeoning sports drink market and decided to form a company to produce a product to quench it. Just 18 months later, their product is on store shelves. The process, they say, has sometimes been difficult, but always interesting.
Dince and St. Phard met several years ago through their mutual interest in athletics. Dince teaches spin classes. St. Phard is a personal instructor and soccer coach. They noticed that there was no sports drink available with all-natural ingredients. The drinks that were designed with some of the most health-conscious people in mind are filled with unhealthy ingredients, says Dince. High-fructose corn syrup, artificial dyes, and sugar substitutes are high on the ingredient lists of many of the products on the market.
“My clients would ask me if there was something out there that would be healthier,” says Dince. “A lot of people have told me that the regular sports drinks upset their stomachs.”
After looking into the market, St. Phard and Dince decided to develop their own all-natural sports drink, and formed their start-up company, Ritnorna Natural www.LIV-natural.com), and named their drink LIV. The company’s offices are at 125 Railroad Avenue in Hightstown.
The partners’ varied backgrounds have given them experience and contacts in two important arenas for developing a sport-related business. Dince has worked for American Express and the credit card division of Merrill Lynch, as well as University Alliance for Life-Long Learning, a venture into distance learning by Yale, Oxford, Princeton, and Stanford. When the universities decided to “wind that program down,” she began work as a consultant.
Dince holds a bachelor’s degree from Brown University in American Civilization. “I think studying American culture was really good experience for going into the business world,” she says.
St. Phard’s background is in athletics. A soccer player, he played at Rider, where he majored in business, and at professional levels in Europe. He now coaches soccer, works as a personal trainer, and has run several marathons and half-marathons.
Product development. One of the toughest things in a start-up company is “being smart enough to know when you need to look for help,” says Dince.
Neither of the business partners had the food and nutritional background to actually develop a formula, so they hired ABIC Consultants, of Fairfield, to assist. “That was a critical decision,” she says. “Before that we were mixing things in our kitchens. We would never have gotten to where we are now without bringing in someone with expertise.”
Their final product is “a carbohydrate-based electrolyte drink that contains no artificial ingredients; no artificial flavors, dyes or sugars,” she says. The pair claim that it helps people recover more quickly from exercise or any form of exertion.
All sports drinks contain some sugar to help the body to recuperate from exertion and to improve taste. But most sports drinks use high-fructose corn syrup, “an unnatural, unhealthy sweetener that can actually cause hunger,” says Dince.
The big difference between LIV and other sports drinks is that instead of using corn syrup and artificial sugar substitutes, it uses agave nectar. As well as being “an unprocessed source of sugar that the body breaks down more slowly,” it also takes less agave nectar to give a sweet taste, says Dince.
“The key problem with high-fructose corn syrup is that the body does not handle high-fructose corn syrup in the same way that it handles a natural sugar,” she says. “High-fructose corn syrup is processed more like a fat.”
In addition to the agave nectar, LIV also contains rice syrup, which provides “a healthy source of carbohydrates,” says Dince. “It is easy to digest, and has no cholesterol.” She says that is also has a “neutral flavor,” which doesn’t change the natural flavor of the beverage. LIV also includes potassium and sodium to replace minerals that are lost during exercise, a critical ingredient for any sports drink.
Currently LIV comes in one size, 20 ounces, and two flavors, berry and lemon. It retails for between $2 and $3 per bottle.
Branding. “Branding is one of things we’ve struggled the most with,” says Dince. “Our product appeals to a broad demographic — children, teens, adults, men, women. But they all have a very particular mentality. They are people who are active, health conscious, interested in higher end food products. We had a very specific psychographic,” she says.
They wanted a look that “had shelf impact to attract health conscious, affluent people,” but that also was “edgy and fun.” The process was painful, she says. “Dimitri in particular was very strong on saying, `We’re not there yet.’”
The result of their branding efforts is a logo that shows a cartoonish sketch of an athlete vaulting over the name of the drink, whose “L” is half-filled, on the diagonal, with a beverage. It clearly speaks to the effort — and the joy — of sweating up a storm.
Networking. “People have said to us, ‘you’re not from the beverage business, how did you know what to do?’ But my background has shown me that a lot of the process and issues are the same no matter what you are selling,” says Dince. “You know what the issues are in the big picture sense and apply it to that particular business.”
One of her first rules is, “When starting a business it is all about the power of the network.” She and St. Phard networked in the beverage industry, with bottle manufacturers, distributors, and beverage manufactures well before they needed them. “We tried to have our tentacles everywhere.”
Manufacturing. Finding someone to produce the product was another problem Dince and St. Phard needed to solve. “There is a real capacity shortage in the beverage industry,” says Dince. “It is tough to find someone who will make your product. The large beverage companies have a lot of the capacity tied up.”
Their networking paid off, however, and they found a California company that was willing to manufacture their product. They plan a second product run in early fall, which may be done at an East Coast facility. “We want to have producers on both coasts,” she says.
Financing. Dince and St. Phard have invested “a significant amount” of their own money in LIV, they say, as well as finding “about five angel investors,” who have put about $150,000 in to the company. This “founder’s round” of investors came from contacts the two had made through their work in finance and athletics.
Distribution. Warehousing and distribution had to be set up before the first pallet load of LIV rolled out of the plant. The first week in August 15,000 cases, 12 bottles per case, arrived. Dince and St. Phard have found a warehouse in Fairless Hills, Pennsylvania. It also handles distribution, although Dince admits that at this point, distribution sometimes means “throwing it in the back of our own vehicles and delivering it.”
Marketing. That is actually a part of their distribution strategy, she said, as they try to “blanket” certain geographic “hot spots” with their product. The first area they blanketed was central New Jersey, where they already have about 10 gyms and small stores carrying the product.
They are also blanketing St. Martha’s Vineyard, where Dince has been a lifelong summer resident. Their marketing strategy revolves around “creating a buzz around product.”
“We’re investing in public relations,” says Dince. “Paid media doesn’t make sense for us right now. We need to break through the clutter of advertising to reach our market.”
Their plan involves putting their product “in places that are hot spots, where the trendsetters are found.” The partners are hoping that word of mouth, also called “viral marketing,” will get LIV rolling off the shelves.
Their current marketing efforts are concentrated from Baltimore to Boston. “We want to look at the part of the sports world that is not already locked up by products like Coke and Pepsi,” says Dince. “We are looking at people in different kinds of sports, such as soccer, cycling, skiing, and running.”
Part of Ritnorna’s guerrilla marketing plan involves sponsoring sports events so that the product is right there, where athletes are working up a thirst. This month they are sponsoring the Chilmark Road Race on Martha’s Vineyard. They are also a sponsor for the Leukemia & Lymphoma Society’s Team in Training, a group that helps ordinary people to train for endurance sports events.
Dince and St. Phard are also looking into distribution in schools and in larger stores, and will have a booth at the Natural Products Expo in Baltimore this October.
Now that they actually have a product in hand, they are getting more bites from retailers. In its first month on the market, LIV was on the shelves at Small World, Cox’s Market, Olive’s, Lucy’s Ravioli Kitchen, Speedy Mart, Momentum Fitness, Aquatic and Athletic Center in Cherry Hill, Hoagie Haven, and George’s Roasters and Ribs, as well as a handful of stores in Massachusetts. Less than three months after launch, the pair of entrepreneurs have placed their drink in many more retail outlets, including a dozen in New York City and a couple in Pennsylvania. Among their new customers is famed food temple Dean & Deluca, which is carrying LIV in all of its outlets.
“When we first approached people we heard a lot of, ‘that’s interesting, come back when you have the product for sale.’ Now we have it,” says Dince. So far sales have been good, she says.
“In the first week we moved several pallet-loads of 102 cases,” she says. “Each day we are seeing bigger clients. The first week we sold two to 40 cases. Now we are talking to clients who want 40 to 1,000 cases.”
What’s Up with Bot?
Like Nancy Dince and Dimitri St.Phard, Brian and Cynthia “Cricket” Allen are also marketing flavored water, but the road to market for the Allens’ water, called Bot Beverages and aimed at children, has not been easy.
The Allens, who live in Lwrenceville, hired out everything — including the design, the flavors, the caps, the bottles, the labels, and the production — and had hoped to put Bot on supermarket shelves in Princeton by last August, but they had a hard time finding the right production facility (U.S. 1, August 9).
So far the Pennington Market is the only retailer selling Bot. Priced at $3.89 for a six-pack of eight-ounce bottles, it comes in three flavors — grape, berry, and orange, each with a cartoon character. The bottles have resealable sport caps, with valves to prevent spillage.
“The lag time is unfortunate but it seems to be par for the course with this industry,” says Brian Allen. Because of the liability, he says, production companies are leery about signing contracts for a certain number of bottles produced by a certain date. “And we are the little guy so we get pushed around.”
He had hoped to make 600 cases of each of three flavors at a production facility near Pittsburgh, but the result produced fewer bottles than expected, so Bot will go back into production in February.
Although they paid for the initial run themselves, at the approximate cost of a year’s salary at a mid-level job, the Allens are looking at a combination of banks and angel investors to finance $250,000 for the next phase, which will likely include moving into an out-of-home office and a much larger production run to reduce costs. The only other companies marketing products similar to Bot exist in regional pockets and not on a national level, says Allen. The real competition comes from juice box makers. Their water has 6 grams of sugar per 8 ounce bottle rather than the 24 to 42 grams in a typical juice box of the same size.