Startup: Genius Juice
Security type: Crowd SAFE*
Valuation (cap): $14 million
Minimum investment: $100
Where to invest: Republic
Deadline: September 16, 2021
One of the best things a startup can do is figure out exactly where the market is headed — and then make the perfect product for that future market.
And that’s exactly what Genius Juice has done. Its coconut smoothies are 100% organic, plant-based, protein-rich, filling, nutritious and tasty.
Juices and smoothies have come a long way since the days when it didn’t get any better than Tropicana. While brands like Naked Juice, Bolthouse Farms and others made some progress, their products still have high amounts of sugar and emulsifiers/gum. The majority of juices and smoothies are not organic, and some still use artificial flavors. And they have at least 10 ingredients.
If you want a peek into the future of juices and smoothies, take a look at the past of beers. As lacking as the juice and smoothie space is in quality and choice, beer was in a similar spot three decades ago.
Going from Schlitz and Bud to Michelob and Heineken seemed like a big step up at the time — just like how we now view going from Tropicana to Naked Juice. But beer’s advancement didn’t end with Heineken. As beers got much better, they also got more expensive. Taste trumped price. And premium beer brands flew off the shelf. Boston Beer ($1 billion revenue), Dogfish ($110 million revenue) and New Belgium ($50 million revenue) are just a few of the many beer makers that grew into large companies by riding this trend.
I see juices and smoothies going down this same road. I don’t know if Genius Juice will attain the size of Boston Beer or New Belgium. What I do know is that it has set itself up to be among the big premium brand winners in this space. And that’s easily good enough to warrant a recommendation.
Genius Juice’s product has two ingredients. Coconut water. And coconut meat. That’s it.
It’s a better and more versatile smoothie than what’s widely available today. Hungry? Dehydrated? Have a Genius Juice. It has five grams of protein, making it a great workout drink. And it’s also a healthy option for a breakfast substitute.
Genius Juice has done more than just create a superior product. It’s also created a sustainable, thoughtful business that has plenty of room to grow. Let me take you through some of the key aspects…
- The environment and sustainability. Genius Juice gets top marks here. It doesn’t just give to charity as a bolt-on gesture. Its business model is built around sustainability. It uses the entire coconut, husk and all. The husk is upcycled and used to generate alternative energy. Genius Juice’s products generate zero waste! As integral as this is now to the brand, it’s only going to grow in importance.
- Dietary health. The products are vegan, paleo friendly and certified kosher. They use no artificial ingredients while being rich in potassium, electrolytes and MCTs (medium chain triglycerides).
- Price/market fit. A better product usually comes with a higher price. And sometimes that price inhibits demand. Not with Genius Juice. Its juices are priced about a buck higher than the products of Naked Juice. That difference shouldn’t be a big problem. And the outlets currently carrying Genius Juice’s products are seeing sales velocity that’s about four times faster than overall sales growth in the juice/smoothie space.
- Room for both revenue growth AND profitability. 2020 was a horrible year for many startups — but not for Genius Juice. Its revenues jumped from $700,000 in 2019 to $2 million last year. This year, the company says its 2,800 retail outlets will rocket to 3,500 or more. Whole Foods, Albertsons/Vons and Costco are all planning to take Genius Juice into multiple regions. Whole Foods will likely be the biggest driver of revenue growth because it plans to put Genius Juice’s product into 25% of its stores. And Sprouts just launched Genius Juice in all 375 of its stores nationwide. Online sales will get a further boost when the company’s revamped website debuts in June. Revenues should at least triple, as a result.
And Genius Juice’s growth explosion has NOT come at the expense of profits. The company expects to begin turning a profit by October or November of this year. Now that’s impressive.
- Growing margins. For me, this is one of the company’s key achievements. I hate thin margins. They prevent revenue from turning into profits. The startup ethos often de-emphasizes profits. But to me, it doesn’t make sense for startups to pat themselves on the back for making $0.80 on every dollar they shell out. So how does Genius Juice measure up here? The year is less than half over, and the company has raised its gross profits from 25% to 30%. With a new and cheaper coconut supplier, it plans to reach 40% by fall. Economies of scales should then take over and enable it to reach 50% in the following one or two years. In founder and CEO Alex Bayer’s own words, “Scaling will bring down the cost of everything.”
Alex, by the way, is the brains behind Genius Juice’s impressive progress so far. He gets the credit for coming up with the simple idea of blending just two ingredients — organic coconut water and organic coconut meat — to make a creamy coconut smoothie. Then came the hard work. Alex has done a great job leading the effort in making the product, creating a company around it, signing up national grocery chains, making sure the product flew off the shelves and carving out a strong premium brand niche in the healthy beverage space.
I’ve had about a half dozen conversations with him. He often repeats how important it is to earn the loyalty of his customers first, followed by the trust of the grocery chains carrying his products.
You can’t argue with success. Genius Juice’s current stores are happy to bring its smoothies into more and more stores. And retailers like Costco, Target and Albertsons/Safeway are coming to them, not the other way around. Rapid growth is there for the taking.
Alex rightly points out the company is not doing the impossible. Genius Juice is merely following in the footsteps of other brands like Koia, Rebbl and Harmless Harvest. Those companies achieved $30-to-$40 million in revenue in around four years. Alex thinks Genius Juice can get to $50 million in revenue three years down the road. With a modest multiple of 3X applied to that $50 million, Genius Juice would reach a $150 million valuation — more than 10 times the company’s current valuation of $14 million.
There are no guarantees here, of course. But Genius Juice’s strong early traction has set it up for future success. And Alex’s steady hand is keeping the company on course. It’s all looking very promising right now.
How to Invest
Genius Juice is raising up to $5 million on Republic. If you don’t already have a Republic account, you can sign up for one here.
Once you verify your account and are logged in to Republic, visit the Genius Juice deal page. Then click the blue “Invest in Genius Juice” button. Enter the amount you want to invest, starting as low as $100, and proceed through the required steps. Be sure your investment is confirmed, then you’re good to go.
*NOTE: The security you will be investing in is a Crowd SAFE. A SAFE is a Simple Agreement for Future Equity. An investor makes a cash investment in a company, but gets company stock at a later date, in connection with a specific event. The Crowd SAFE is a modified SAFE that is better suited for crowdfunding.
This opportunity, like all early-stage investments, is risky. Early-stage investments often fail. Genius Juice might need to raise another round of funding in a year or two, if not sooner.
If it executes well, this shouldn’t be a problem. But that’s a risk worth considering when investing in early-stage companies. The investment you’re making is NOT liquid. Expect to hold your position for five-to-10 years. An earlier exit is always possible but should not be expected.
All that said, I believe Genius Juice offers an attractive risk-reward ratio.