Business Review 2021 - a strange year

The 2021 behind the scenes Rejuvenation Water business review from our Founder, Kris Ingham
Business Review 2021 - a strange year

As the Founder, it's easy to window dress the business, focusing on the positive news stories and leaving out the negatives, giving aspiring entrepreneurs, investors, customers et al a rose tinted perspective of business. 

I am not one of those entrepreneurs...

Regardless of the stage; Launching, growing, scaling, adjusting, pivoting - all come with almost impossible challenges. This has very much been the case in, my now, 6 years of Rejuvenation Water.

For Rejuvenation Water 2020 was all about survival. In March 2020, with five U.K supermarket listings, already running low of working capital prior to the pandemic, we were close to finalising a major funding round when the initial panic scared investors from the table. We had to make quick and decisive decisions to ensure our survival.

With the team set up for the food service channel and sampling, I had to furlough the team and allow our placement students to return home. In time, with the Food Service hardest hit, I had to let our food service manager go.

At the beginning of the pandemic, Rejuvenation Water, with just our still and sparkling water, was very much an impulse drink - Grab one in the gym, on the commute, with your lunch. With offices and gyms closed and queues outside supermarkets, our main impulse channels were hit. I saw an almost instant attitude change from the many of the major retailers that we were working with. We needed to adjust and quickly.

Immediately, we launched our e-commerce website and focused our resources to online selling.

In truth, I didn’t truly see drinks as a direct-to-consumer play. The weight to value ratio means that much of the revenue is lost in the shipping and, alongside our expensive to manufacture drinks ranges, we are skimming margin selling drinks online.

I’d started working on our Nespresso compatible Health Pods ranges well before the onset of COVID-19. The idea was all using plant-based Superfoods to create healthy, functional pods for your home Nespresso machine. With home working, the boom of e-commerce and the focus on health, the concept for the pods became more relevant. So, whilst adjusting the drink ranges for the impact of COVID-19, I began focusing on the development of our new range. Limited on budget, I could only afford to develop an initial single product in the range.

With 50% Vitamin C and Vitamin D, we launched our Nespresso compatible Turmeric & Beetroot Immunity pods in December 2020. I envisaged us having a further two products in the range, including the Matcha – Nespresso compatible Energy Pods, by Spring 2021. However, with a perfect storm of COVID and Brexit along with the Suez canal blockage and with a side the normal business-as-usual issues, 2021 proved difficult to make progress.

It took until October for us to launch our next Nespresso compatible Health Pods product, our first coffee product: Rejuvenation Coffee Keto Coffee.

keto coffee nespresso machine compostable pods

This innovative Nespresso compatible compostable coffee pod contains single-origin Brazilian Arabica enriched in coconut MCT oil. This creates a naturally, dairy-free creamy coffee akin to a bulletproof coffee but no need for blending, stirring or mixing. This is a product I'm really excited by. It's completely unique and, with the healthy fats from the coconut oil, suits the Keto diet, one of the fastest growing diets on both sides of the Atlantic. For the coffee lover, it provides an tasty alternative to your normal coffee; a coconut coffee without the use of artificial flavours used by market leaders. The coconut MCT oil also provides an almost instantaneous energy source making is great as a pre-workout drink.

What's usually the case with business, it's two steps forward, one step back. When pushing the boundaries of innovation, there’s naturally going to be issues and we’ve had our fair share. We’ve been experiencing issues with our original Immunity pod. Our Superfood powder blend, on occasions, reacts with humidity and solidifies within the pod, causing some powder to be left in the pods after extraction. This means instead of the vibrant, flavoursome shots, some customers have been experiencing weak, pale shots. We will shortly take our Turmeric & Beetroot shots off the market and reformulate to ensure that none of our customers have this less than perfect experience.

Trying to launch our Nespresso compatible Matcha pods has also been what feels like an endless series of challenges. We launched a limited-edition range of the Matcha pods in June and sold out almost immediately. On the back of the of this, I ordered 300kg of the premium, organic Matcha from Japan. Then, with a number of technical issues with the pod closures, we are still yet to fully launch. Now, with a new co-packer ready to produce, Brexit issues have our Matcha sat in customs within the EU. On top of this, with the Worldwide lack of cardboard, we have a 10 week wait for the cardboard packaging. With a waiting list of over 100 customers waiting to buy/rebuy, we will have to hand pack into our own gift boxes to allow us to launch to market.

The issues that we have experienced with shipping and the EU hasn’t been limited purely to crossing the UK-EU. As we produce our pods in the EU, in an attempt to avoid the paperwork chaos, we store some within the EU. However, in trying to ship our pods between the Netherlands and France, to Amazon, it took us months of bureaucratic nonsense to transfer the stock. Ironically, it’s been easier to ship pallets to Amazon US than it has been to ship to neighbouring Amazon EU marketplaces.

Our relationship with Amazon has also become increasingly strained. Banning our products, changing our listings, losing stock, removing reviews are just a few of the issues that we’ve experienced and the seller customer services are appalling.

Speaking of relationships, unfortunately, during COVID, we’ve had a number of relationships sour. Every business has been impacted in some way. But, for me, the way you deal with customers and suppliers during a crisis, will define relationships long after Coronavirus [eventually] blows over.

From sourcing ingredients, packaging or simply staffing production lines/warehouses, there will be very few supply chains that haven’t been stressed throughout the pandemic. With this in mind, relationships with co-packers are essential for the longevity of a business. We still have a great relationship with our original bottle co-packers who have always moved mountains to accommodate us.

However, our canning co-packers have greeted us with a level of arrogance and self-importance from the outset. This has intensified during Coronavirus. In Summer of 2021, being completely out of our Tropical range, we tried arrange a small production run in which we have to send ingredients to the production site ahead of booking a production slot. Once we managed to source the ingredients and send them to site, I tried to organise a production slot, only to be told, without any notice, that the production site is full until Spring 2022. Having had circa £5,000 of ingredients then stranded at the production site, we arrange to return and get some of our money back, only then to be told that the site had incorrectly allocated our stock to wrong customer had that customer has requested to dispose of our ingredients and it was our fault. Since then, the co-packer has increased minimum order runs from 12,000 to 125,000 cans per flavour per run and minimum can prints of 250,000 per SKU. With three flavours, it would cost us well over £100,000 to replenish our ranges. These volumes are hardly conducive to the uncertain backdrop of lockdowns and restrictions that all have implications to demand planning.

On the demand side, personally, more disappointing was the attitude of some of our customers, some of which that have worked closely with us from the beginning. At the onset of the pandemic, we were listed in five UK supermarkets. Today, we are in just the one. Having lost two last year, one who wanted to ‘concentrate on Coronavirus orientated product lines’ and another who said, in May 2020, that we needed to increase sales three-fold or we are coming out. My response was to ask simply to come out now.

One supermarket, that we’d been in for four years, despite numerous attempts, simply refused to speak to me. When I did get a response, it was simply to refuse the offer of a meeting as they have ‘urgent priorities’.  Even when we got delisted, we received an email from the buyer forwarded on from another brand, that they’d sent to by mistake.

We also had similar issues with some very large distributors who took over a year to pay us and, when they did, they netted out marketing support that we'd not received. Following this, they then returned the stock to us with a week’s life left on it at our expense.

With issues from supply and demand side, smaller, more innovative producers are getting squeezed from both sides. With smaller brands commonly driving health and innovation, I fear for innovation and the choice for consumer within retail. During the pandemic, many consumers switched from browsing the supermarket shelves for new products and, to the benefit of larger brands, reverted to buying bulk pantry items. With many retailers, in face of the HGV and other supply chain issues, optimising supply chains by rationalising and standardising product offerings, it means less trial opportunity for innovation and therefore a chasm for health/innovation within standard retail.

The rapid rise of e-commerce, normally seen to supplement a retail strategy, has provided some relief for smaller producers. This is something that we’ve experienced first. We’ve grown our website sales by over 400% in 2021 and our Amazon UK sales by over 100%. With our charity pledge, with 2 meals donated per website order, these sales have enabled us to directly donate almost 3,000 meals to FareShare.

As we start 2022, I'm excited but cautious. My focus is very much on our Nespresso compatible pods where we have some exciting products in the pipeline. But, product launches absorb a lot of working capital, making it easy to overstretch yourself especially given the costs of marketing products digitally. I've been working on the retail strategy which will come life towards the end of 2022 and into 2023.

I wish you all well. Have a healthy and prosperous 2022.

Kris - Founder. 

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