With a career spanning over 20 years in the beverage industry, Greg Stelenphol has experienced his fair share of ups and downs.
Founding his first company; healthy juice brand Odwalla, in 1980, from the back of a VW van, the entrepreneur grew his bootstrapped startup into a multimillion-dollar business. To avoid bankruptcy, following a case of contamination, he made the tough decision to sell a controlling stake to a group of private equity firms. Eventually, the company was sold to Coca-Cola for $180 million.
Instead of giving up on his passion, and with his love for pioneering beverage brands still firmly intact, in 2010 Steltenpohl founded his second enterprise — Califia Farms.
Known for its commitment to supporting healthy living, sustainable sourcing, and mindful nourishment, today Califia Farms is one of the fastest growing natural beverage companies in the US.
On track to surpass $100 million in annual sales, not only has the company consistently achieved double-digit year-on-year revenue growth, its Almondmilks and ready-to-drink Cold Brew Coffees are the sales leaders in the natural beverage category across the US.
Now, following a minority investment of $50 million in 2015 by Stripes Group, a New York-based consumer and technology growth equity firm, the brand is expanding into the UK – a very real threat to current players.
Ultimately, Steltenpohl says his goal is to create beverages that both retailers and consumers are proud to have on their shelves, and this time around he is confident about building a company that will stand the test of time.
Here, he explains exactly how he is navigating that journey.
What was the catalyst for the launch of Califia Farms? And why plant-based beverages in particular?
There is no way to understate the rate of change in the food industry today, with consumers adopting more of a plant-based diet and seeking sustainability values in the food they buy. The best form of marketing is giving consumers what they want, and so Califia is on a co-creation path with consumers— listening to what they want and enjoy while expanding their options and choices.
The company’s reason for being is to provide innovative ways of nourishing people and to contribute to the continued development of strong plant-based food system.
You’ve got a rich history of launching beverage brands, what did you do differently this time around?
In business, I believe that if you do things for the right reasons, no matter what the obstacle, you’ll always get another chance. I’ve learned too many lessons throughout the years to count but the key things that I have taken away are:
- Trusting my own entrepreneurial instincts much more: We entrepreneurs are usually trying to do something unique and all too often this gets pacified by the bigger corporate world, but really the uniqueness is what sets you apart and creates success.
- Getting the balance right: Entrepreneurs have a tendency to be single-minded with an obsessive characteristic. This can be great for business but not so much for the other elements of your life, so you have to figure out the right ways to nourish yourself.
- Building a team that truly shares the vision and is culturally compatible: In my early days I thought you had to hire people from large corporate environments. Now I realise that what’s important is building a team that not only has the skills, but understands the vision of the company and collectively shares the passion. It’s imperative to create a high functioning, high-performance team that keeps their eyes on the ball, but also knows how to have fun with one another and who aren’t there for the wrong reasons.
How have your goals changed since first launching Califia Farms?
We’ve certainly grown, but the mission remains the same – to offer ‘something different, something better’.
Ultimately, we want to offer progressive good-for-the-world food innovations to our consumers and give them the choices that they deserve, at the same time as ensuring we are dedicated to direct trade and sustainable sourcing. We’re also constantly innovating and as we have grown our goals continue to increase in terms of how far we can extend the brand into new wellness categories.
What have been your biggest hurdles since launching Califia Farms and how did you overcome them?
We are experiencing growing demand from today’s consumers which means that Califia Farms’ plant-powered beverages strongly appeal to them. However, when there is a high demand or “trend” for these simpler, cleaner foods, this can attract some unwarranted scare-mongering.
For example, some media outlets have challenged the environmental benefits of consuming almond milk and reported on the high water use within almond farming. However, this is rarely put into context – farming dairy milk is two to three times more water intensive than farming almond milk and that’s excluding the other factors to consider, such as the total carbon cycle for both the feed and the animal.
That said, today’s Califia Farms consumer is savvy and the media and social media platforms that are accessible to us right now allow us to tell our story of sustainable farming and water management and overcome issues such as these. We can put the message out there that our water supply should be used for plants that can be consumed as plants.
Name one key strategy that is central to the day-to-day running of Califia Farms
Califia Farms is an ever-growing company and we have made the decision that we will keep running as an independent company, because thanks to our collective expertise and dedication to continuous improvement, no one can run it better. This is an important strategy for us as we want to remain true to ourselves, our vendor and our consumers.
You are constantly expanding Califia Farms’ product portfolio with new and innovative options. How important is innovation to the brand and how do you foster it?
Innovation is the lifeblood of Califia Farms. We like to ‘disrupt with beauty’ and that means disrupting the typical supermarket shelf with our uniquely designed bottles, right through to shaking things up with our marketing execution.
Within the Califia Farms company culture, we also innovate daily through what we call ‘huddles’. This is where team members of all levels and all areas come together to learn from one another and think outside the box on how we can continuously innovate with the brand.
One of your previous businesses Odwalla was acquired by Coca-Cola for $181 million, do you have any plans to sell Califia Farms?
We have no plans to sell Califia Farms. The decision to sell Odwalla was made by investor groups at the time that had gained control of the company. Even though Odwalla is still around after 37 years, this time around I’m confident that we are building a company that will stay creative in its DNA and truly stand the test of time.
You’ve enjoyed rapid growth with Califia Farms, how have you managed that growth both internally and across multiple markets?
We have a very sophisticated team of people with diverse experiences, ages and backgrounds, from most of the major food and beverage companies in the world. And we work very hard to manage our growth in a sustainable way.
It’s a different skill set to manage something that is growing so rapidly and it takes a lot of energy and focus. To that end, we have formed a dedicated people power team to make sure that we are getting the balance right.
Another of our success factors is that we have our very own custom built beverage plant, so we can be responsive to demand. Many smaller companies reply on 3rd party manufacturers to make their beverages, so they are not as in control of their pace of growth.
You recently launched Califia Farms into the UK. How important is the UK market to the brand and have you had to change anything to cater to the new demographic?
Our UK launch is a great step for the brand. The UK are a nation of coffee and nut milk lovers and we’ve noticed increased demand from consumers who are looking for simpler, cleaner foods with a lower environmental impact, while at the same time expecting these products to taste great.
We have carefully curated a range of zero added sugar Almondmilks and unsweetened to lightly sweetened Cold Brew Coffees that have recently launched in Sainsbury’s and Whole Foods market. This range brings excitement to the refrigerated aisle, waking people up to what was mundane before!
We have had to make some adaptions to the labels to ensure we are compliant with local regulations but other than that we have found health and wellness is a global trend with consumers aligned around the world on seeking no or low sugar plant-based beverages.
As a beverage industry veteran, what is your overall view of the market and how do you see it developing? In particular in the plant-based category?
We will continue to see exponential growth in dairy alternatives, as consumers continue to adopt a more mindful way of life. We can see this simply by looking at the supermarket shelf or in eateries and also by dissecting industry statistics. For example, according to Mintel, the dairy alternative market is booming, with household penetration growing from 27.3% in 2013 to 55% in 2016. The almond milk category is also projected to grow 36% by 2020, while dairy milk sales are projected to decline 8% by 2020.
What are your future plans for Califia Farms?
Califia Farms is already available in multiple markets through distributors and the UK launch is a key move that is paving the way for further expansion in the future.
Our sole reason for being is to provide nourishment to people. We want to remain close to the consumer through our sustainable sourcing methods and of course, have a positive effect on the beverage industry. We believe that providing consumers with what they want is the best form of marketing and we see ourselves knitting together with other positive food and beverage companies around the world, to be the change that consumers demand.
How has your idea of success changed since launching your first ever beverage business?
I don’t think the principles of success have changed, but you could say my horizons have expanded, and the pace has become more rapid. At Califia Farms we have been able to achieve in under 5 years what previously took me 20!