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Dirty Lemon parent Iris Nova will fund and distribute third-party beverages
Iris Nova, the Coca-Cola-backed startup that creates Dirty Lemon beverages, is announcing plans to spend $100 million over the next three to five years to expand its offerings.
Founder and CEO Zak Normandin said the money will go towards launching new beverage brands developed internally at Iris Nova, as well as investing in beverages created by other companies, which will then distributed via the Iris Nova platform.
“This is the way for us to compete with the bigger beverage companies,” Normandin said.
He added that he’s open to working with both established companies and startups taking advantage of the shift away from “high calorie, high sugar beverages.” Either way, they’ll get access to the Iris Nova platform, which allows them to accept orders via text message, and to distribute their beverages next-day or same-day to every major U.S. market.
Normandin said that by linking the investment and the platform partnership, Iris Nova is forcing itself to be “highly selective” about which beverages will be part of the portfolio.
He also said the company won’t work with directly competing products — for example, he won’t partner with two different coconut water brands, but he would work with a coconut water brand and a sparkling water brand. In exchange, the brands have to commit to using Iris Nova as their only e-commerce platform, aside from Amazon.
Although Normandin brought up The Coca-Cola Company several times as a point of comparison (“I think that if Coke were to start today, it would do things exactly the way we are”), he also emphasized that he isn’t trying to turn Iris Nova itself into a consumer brand. There will be advantages for consumers who order across the Iris Nova portfolio — namely, they won’t have to reenter their payment and shipping information — but Normandin said, “I don’t think there will ever be an Iris Nova marketplace.”
The company said it will start adding new beverages to the platform on July 1. The goal, Normandin said, is to introduce 12 brands by the end of the year. He isn’t sure what the internal-external mix will be, but he said the company has already made two external investments, while also having a few beverage brands of its own ready to go, including the Tres Limón line of non-alcoholic apéritifs.
“What we think is that billion-dollar brands will not exist in the future,” he said. “I have no specific loyalty to Dirty Lemon as a brand. Our goal is to meet the needs of consumers right now. Eventually, if it goes away, that’s fine — we’ll create new selections for that same consumer group.”
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A beverage company bought — and shuttered — the Poncho weather app
They say you can’t predict the weather. Acquisitions are often the same way. If you had told me yesterday, for instance, that adorable weather app Poncho was about to be acquired and effectively shuttered by a direct-to-consumer beverage company, I’d have told you that’s about as plausible as a cat who’s also a meteorologist.
And yet, here we are. Dirty Lemon, a high-end drink maker that sells products through text message for ~$10 a pop, has purchased the beloved app. The company confirmed the acquisition in a press release that contains the following buzzwordy quote from CEO Zak Normandin: “This partnership advances our vision to build a frictionless conversational platform by expanding our technological capabilities as an organization.”
Well, yeah, obviously.
Poncho was a bit more straightforward in describing what all of this means for the fate of the app. “It means no more weather…forecasts,” reads the note on the company’s front page. “Obvi there will still be weather, duh lol. And I hope you think of me every time you look at it, unless it’s nasty weather in which case pls think of a competitor weather service instead.”
As far as what this means for Poncho itself, the company’s CEO Sam Mandel will be serving as an adviser for Dirty Lemon, and the rest of the team will be folded into its parent company. The employees will work to help improve the drink company’s SMS-based sales model.
Mandel tells Fast Company that the service ultimately wasn’t able to monetize its product, in spite of raising $2 million courtesy of an appearance on Planet of the Apps last year. “We weren’t able to achieve critical mass,” he says. “It’s been a challenge […] to build a product that was independently compelling.”
The same, apparently, can’t be said for Dirty Lemon’s pricey beverage business.
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