Entrepreneurship Zone: 20 December 2023 :: South African soft drink brand taps into global health trend

Wed Dec 20 05:17:46 CAT 2023

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Entrepreneurship Zone: 20 December  2023 :: South African soft drink brand taps into global health trend

 <https://www.firstcapitalbank.co.zw/> 

Three years after launching into its local market, the South African lower-calorie, lower-sugar soft drink, Pura Soda, is already available in 13 countries, including the US. The drinks have flavours such as Seville orange, cucumber and lime, and lemon and elderflower.

Founder and CEO Greig Jansen ascribes the company’s growth to hard work, planning and market research, but acknowledges that the startup has been fortunate to ride the global wave of increasing demand for healthier beverages. At 11.6g per 330ml can, Pura Soda contains less than half of the sugar that average soft drinks have.

The idea for Pura Soda came about when Jansen attended a Coca-Cola conference in Mexico in 2013. At the time, he was the CEO of Coca-Cola Beverages Africa in Ethiopia. Jansen, who competes professionally in off-road triathlons, had been considering a gap in the market for a drink that offered good flavour options but contained less sugar.

“We were discussing the trends coming through, such as sugar taxes and changing consumer behaviour, with customers wanting something more natural with interesting flavours,” says Jansen. “It sparked something in my mind. The world trends were reflecting what I, personally, was looking for too.

“After leaving Ethiopia, I spent some time in the US investigating the idea. I concluded there wasn’t really anything out there that offered a better-for-you product, that was still tasty and refreshing, had all the natural credentials but more importantly, was sold at an everyday price point. All the healthier products either did not taste good or were expensive. There was a blue-sky opportunity that started to appear.”

Two years of market research followed before Jansen registered the company Pura Soda in South Africa in 2015 and trademarked the brand name.

Once these building blocks were in place, Jansen approached angel investors to back his dream.

Networks, market insights and a strong team

Jansen jokes that his career has been built on “fish, chips and Coca-Cola”, referencing the companies where he gained experience before venturing out on his own. The relationships and networks he established have served him well. “The whole world works around amazing relationships.” He believes entrepreneurs have to nurture their existing connections and relationships or work hard at building new ones to achieve success.

His initial approach proved this point. Face-to-face pitches to angel investors – demonstrating his passion for his dream while selling the idea – was how he secured additional funding on top of his own investment. Pura Soda appeared on shelves of major retailer Pick n Pay and convenience stores at Engen fuel stations in South Africa because of in-person meetings, where Jansen convinced executives that Pura Soda had an answer to an emerging market need.

He also recruited industry experts into the team to help with speed to market and growth. “The people we brought into the business were all from the beverage sector. Our employees are ex-AB InBev, Coca-Cola and Red Bull. We bring people in who’ve previously shot out the industry lights. The thinking now is that perhaps we will only learn the lessons one-and-a-half times again, not twice,” chuckles Jansen. “But on a serious note, you get speed to market because, in theory, you know what to do and you’ve got the networks. There is less figuring out what to do, and more strategising about the plan and implementing it.”

The team was built in parallel with the meetings to find funding. By the time Jansen approached angel investors, product development was well underway and the potential look and feel of the brand and packaging were in place.

“I have to stress the importance of doing your homework before you start a venture. At some stage, however, it becomes important that you ‘fall forward’. It’s better to be roughly right than perfectly wrong. You have to start. This is where you take a leap of faith, back yourself and speak to people who believe in the dream,” advises Jansen.

Pura Soda has flavours such as Seville orange, cucumber and lime, and lemon and elderflower.

Products on the shelves

Jansen and his team approached the retail listing of the product strategically. “We picked one major retailer and one convenience store. When presenting our proposition, we had a strong product, brand approach and available samples. We backed it up with a sound plan to get the product off the shelf. While it is always difficult to get listed and included in a retailer’s product offering, we were able to offer them a solution to a challenge they were already facing: a need for a healthier soda solution and we could offer them that product.”

Jansen says that with consumer needs changing over to healthier drinks, Pura Soda is not in competition with the market that drinks Coca-Cola or Pepsi. “Those customers are still drinking that. We had market acceptance from the start.”

Manufacturing strategy

Exports to the Middle East and Namibia followed in the year the product was launched.

Pura Soda outsources its production to three facilities in South Africa – Cape Town and Johannesburg mainly, with a backup factory in Durban in case of any continuity challenges.

“We outsource production because we want to make sure our money goes towards sales and marketing where it has the biggest impact,” says Jansen. “We manufacture out of Cape Town for export because of its proximity to the harbour which lowers logistics cost.”

The company’s bottles and cans come from local South African suppliers, but the flavours that have won them recognition are developed by three different bespoke flavour houses in either the US or the UK.

“Essentially those flavours are cold-pressed extracts of fruits. We get them from abroad because the technology does not yet exist in South Africa to extract the flavours we need to bring that natural taste to our product,” explains Jansen.

Building a global brand

“We’ve spent a lot of time developing a robust brand. It is all based on the concept of ‘living a little Pura’. Everyone has healthy life goals but it is much easier to set those goals than to keep them. But what if all it took was a new exciting soda?”

Jansen adds that it helps if a buyer understands what the product is, without having to spend a lot of marketing budget to explain it to them. “We didn’t have to spend a lot of money and time to describe what our product does,” he says.

Within five years, Jansen wants Pura Soda to be a billion US dollar brand. Expansion into other markets is through a combination of feet on the ground or using well-known agents or distributors to get the product onto the shelves. The team of 27 employees largely reside in South Africa.

“The non-alcoholic beverage market was just under a trillion US dollars last year. To get to our goal of a billion-dollar brand in the next five years, we need just a small slice of that market,” adds Jansen.-Howwemadeitinafrica.

Greig Jansen

Howwemadeitinafrica

Invest Wisely!

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DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

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