|STRATEGY: Tio Gazpacho Prepping Subline Targeting $4.99 Price Point; May Be Close to Concluding Capital Raise|
|Just 14 months in market, Tio Gazpacho bottled organic soup line is in for some significant changes as founder Austin Allan looks to find right matrix on packaging, positioning and pricing sides. Youthful entrepreneur believes that, after 9 months of effort, he’s close to concluding $1.25 mil capital raise that will include unnamed CPG player to help fund flavor addition to core line, addition of lower-price subline and geographic expansion. Looking back at past year, Austin said, “2015 was all about understanding the product and how it’s merchandised and why people are buying it.” Fortified with knowledge, he’s ready now to move aggressively forward. Encouragingly, in some suburban-NY Whole Foods locations – say, more middle-brow Westchester town of Portchester – Tio Gazpacho turned as many as 20 units per week of each flavor.
Recall that Tio Gazpacho was inspired by 4 years that former training and banking exec had spent in Spain. While there he saw many pre-packaged gazpacho soup entries, including PepsiCo-owned market leader Alvalle, and didn’t see why better-quality version wouldn’t thrive in US. He launched USDA-certified organic brand from Fla base, then relocated to NY once brand entered that market. He’s currently got sales/marketing rep in place in each market.
So far, Tio has been available in 3 savory flavors in 12-oz plastic bottles that recently added colored background to packages, coded for each flavor: Gazpacho Clasico (vine-ripened tomato, green pepper, cucumber, in red pack), Gazpacho de Sol (yellow tomato, yellow pepper, carrot, in orange pack) and Gazpacho Verde (kale, spinach, avocado, mint, in green pack). Now Allan is ready to tilt toward sweet side of taste profile with new Gazpacho Rosado sku that he’s still putting finishing touches on, using watermelon and other ingredients for more refreshing impact, in pink-hued pack. They go for $7.99 at Whole Foods, a dollar more elsewhere.
Coming down the line, hopefully in time for intro at Natural Products Expo East this fall and on-shelf appearance in early 2017, is as-yet-unnamed subline that will lessen reliance on organic tomatoes and other pricy ingredients and slightly downsize pack in quest of $4.99 shelf price, Austin told BBI during visit to co’s WeWork space in NY’s Flatiron District. New line will stick with savory tilt, in part to lessen reliance on sugar, and seek to tap into burgeoning movement of some consumers away from juicing in favor of “souping” (BBI, Feb 8). Move would put Tio Gazpacho in synch with fresh-juice providers like BluePrint and Daily Greens that have used smaller sizes to attain more approachable price point without unduly diluting product proposition.
Brand currently is available in 8 Whole Foods stores in NY area, designated as local item thanks to copacking at Fresh Bev in Conn, but expansion is imminent. As of last month brand also was available throughout Fairway chain and via city’s dominant online delivery service, FreshDirect. Other retailers it’s cracked include King’s and Balducci’s. Brand gets to market via DSD house Gourmet Guru in NY and network of small distributors in Fla. It’s in broadliner KeHe and Allan hopes to relaunch UNFI in spring after earlier alliance proved a bit too ambitious. Allan has been advised on capital raise by Scottsdale, Ariz-based consultant Jim Tonkin. Go To Top
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