- Soccer-themed energy and sports drink producer Golazo shut down production at the end of December after several years, which demonstrates the frustrations startups can face in crowded industries.
- Golazo was not able to reach profitability or secure enough capital to "take it to the next level," Golazo founder and CEO Richard Tait told BevNET.
- Since its founding in 2010, the company had developed a loyal following, had continued growth in natural and conventional retail stores, and had secured endorsement deals with Major League Soccer stars, but it wasn't enough for Golazo to reach the revenue and profitability levels expected by its investors, Tait said.
Golazo's experiences illustrate the situations that many food and beverage startups find themselves in. Their products, once a buzzword in conversation among loyal consumers, disappear from retail shelves and are quickly replaced with the next up-and-coming brand.
Golazo had beginnings that mirror those of startups who have made it, including investments from Starbucks CEO Howard Schultz and the Moretti brewing family, owners of the Inter Milan soccer club, which contributed to almost $4 million in initial funding. Golazo started out as a single product, a natural sports drink, and expanded its product line as business picked up. After 18 months, those products could be found in 1,600 stores in eight Western states, including all Safeway and Whole Foods stores in that region.
However, Golazo had entered a crowded energy and sports drink market, dominated by the likes of PepsiCo's Gatorade, Coca-Cola's Powerade, Red Bull, and Monster. While Golazo's products were selling, they weren't selling enough to disrupt these industries and take market share away from major competitors. Plus, some of these competitors have begun to develop products in the natural space themselves, including organic Gatorade, which further puts startups like Golazo at a disadvantage.
Capital is a common challenge food and beverage startups share, which has given rise to crowdfunding efforts like CircleUp and industry specific investment groups like Edible Ventures and General Mills' 301 Inc. These investors make it easier for startups to have the cash to be more disruptive in their market segments, but startups will also need to prove to investors their potential for reaching sales goals and profitability.