Coca-Cola Co., facing shifting shopping habits that have roiled the food and beverage industry, is taking a minority stake in Iris Nova, the company behind a cashierless New York City store where customers pay for drinks via text message. Coke, now the startup’s largest investor, led a $15 million investment round that values Iris Nova at about $60 million. Iris Nova is the maker of Dirty Lemon, a line of upscale drinks, including a recently discontinued one made with CBD, that found traction with customers on Instagram before the company launched its first retail location in Manhattan this year.
Coca-Cola is leading a $15 million funding round in the trendy direct-to-consumer beverage startup behind Dirty Lemon
Coca-Cola's investment in Iris Nova comes at a time when the beverage industry giant is looking towards new categories and strategies for growth. In recent months, Coca-Cola has invested in sports brand BODYARMOR, purchased Australian kombucha maker Organic & Raw Trading Company, bought juice company Tropico, and invested in healthy beverage company Made Group. Coca-Cola also spent $5.1 billion to buy Costa Coffee, a coffee chain with almost 4,000 locations.
Fitter, healthier, happier? How wellness drinks took over Instagram
In 2015, entrepreneur Zak Normandin was intrigued by the direct-to-consumer space. Normandin, who founded children’s snack company Little Duck Organics, witnessed the skyrocketing success of startups such as Glossier and wondered: why isn’t anyone doing the same thing for food and beverage? After all, beverage consumers make emotionally-based decisions numerous times a day. Meanwhile, millennials are increasingly health-obsessed, with cold-pressed juice and kombucha replacing the vacuum left by sugary sodas. Nielsen reports that 67% of Americans say they prioritize healthy food purchases.
Dirty Lemon, a beverage brand with a cult-like following on Instagram, is opening its first store
Dirty Lemon, a beverage brand that was born online and developed a cult-like following via millennials' Instagram posts, is opening its first store this week. The charcoal, matcha, rose and ginseng-flavored beverages once only attainable online will finally be on shelves for shoppers to touch and feel in New York. Moving somewhat in reverse, Dirty Lemon is opening its first bricks-and-mortar location as many brands are trimming back their physical footprints. The store will put Dirty Lemon's health-conscious drinks more within reach for New York customers, to start, and help raise awareness of the trendy brand beyond social media and the internet. "A lot of brands are struggling in retail right now," CEO Zak Normandin told CNBC. "They are starting to shift marketing dollars into digital to keep customers engaged. That creates a challenging situation for us, because we have relied on digital marketing to grow our following, but we are ironically now shifting dollars to physical retail."