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This time is the charm, serial entrepreneur Lance Collins is insisting after completely upending the biz model of Zen WTR, the vapor-distilled brand whose core credo is to reuse plastic that might otherwise be ocean-bound. Over past year and a half or so, LA-based bev junkie has slashed the payroll of parent Zen Beverage from roughly 70 to 10, cutting $2 mil in annual burn, while exiting much of brand's DSD network to pursue more hybrid distribution model. He's cooked up an alliance with AriZona Beverages to use in-house network to service Walmart chain, which isn't keen on getting its NAs from beer houses anyway, and to reach foodservice customers. And while some investors may be showing signs of fatigue, that doesn't seem to be true of endorsement roster that ranges from athletes Jason Kelce and Maxx Crosby to entertainers Ellen DeGeneres, Zoe Saldana and 2 Chainz judging by flow of content from some. Under Collins' direct stewardship, brand is close to break-even, he told us, and gunning to be cash-flow-positive next year even as it aims for mid-20s in revenue. "It's a whole new company," he told us yesterday. "It's all been redone." He said several multinational players have expressed interest in investing or acquiring Zen Beverage. Tho Collins boasts conspicuously successful exits from Fuze/NOS, Core Hydration and Body Armor, most were tortuous slogs to get there, and he doesn't shy away from a dogged commitment to bring all his concepts to finish line even when some of his own allies among investors and distributors wonder whether he shouldn't instead just enjoy the rewards of his prior successes. We recently updated his efforts behind two other long-term projects, Accelerator Energy and Recover 180 sports drink (BBI, Oct 10 and 24).For Zen WTR, Lance stepped back into day-to-day leadership a year and a half ago, injecting over $15 mil more of his own capital, bringing his personal capital invested to date to close to $45 mil. Recall it had launched with much hoopla with investment in supply chain to support novel concept and on-ramp into Molson Coors wholesaler network if premise seemed to resonate (BBI, Mar 16 2020). Doing national landgrab, it attained gross sales as high as $15 mil in 2023 before hitting a wall.In retrospect, Collins believes its mgrs overexpanded, overhired and made some careless bets. Brand failed to turn in its biggest retail partner, Kroger, and was bounced from there, along with Wawa and Publix. Prior team bet big on Pepsi bottlers in Calif, Nev and Colo backed by nearly $6 mil in marketing, but elevation to CEO job of Ramon Laguarta spelled end of that experiment and Zen ultimately had to write $2 mil in buyout checks. So Collins did a thorough rethink. He exited most DSD, leaving Northeast as only region comprehensively covered by DSD via Honickman (in both its Canada Dry divs as well as its Pepsi NY div) and Polar Beverage. Instead, brand tilted more toward direct shipment to retailers like QuikTrip c-store chain, where brand has risen to #3 premium water behind Smartwater and Collins' own Core, now owned by KDP. Since Zen ships direct there, it's priced under Core. Brand also has been performing well at 450 or so Walmart stores, doing avg 30 units per wk, and Collins is hopeful of adding stores and sku's next year, he told us. To reach those stores directly, he's forged that alliance with AriZona iced tea marketer AriZona Brands, cementing commitment by sharing some of his own equity with AriZona to incent partner without diluting other Zen WTR shareholders.Tho early steps were on rationalization side, there have been plenty of affirmative components to new strategy too. Tho Zen mission is about recycled plastic, it's added resealable 16-oz Alumi-Tech aluminum bottle to serve some customers' requests. And given AriZona partner's reach into thousands of foodservice/on-premise (FSOP) operators, it's devising a glass bottle to serve those occasions. As we reported earlier this yr, Collins also added sibling brand Water+ to stable that dials down the pH to 7.5 from Zen's 9.5 pH so as to avoid portfolio conflicts with Bud houses that retain Essentia alkaline brand. Tho separate businesses, the two are pooling resources.By now, he says evidence is unmistakable that ocean message resonates with younger consumers. In rescuing ocean-bound plastic for its items Zen WTR is in mode of other CPGs like Adidas, SC Johnson, Patagonia and New Era. "Gen Z is responding," he stressed. An avid Trump supporter these days, Collins said he's been networking with administration officials including EPA chief Lee Zeldin to coax out grants or loans to add plastic collection centers to augment the ones in countries like Singapore, Thailand and Ecuador. Also key to marketing effort has been product placements across The Kardashians (Khloe is an investor), Real Housewives of Beverly Hills and recent reboot of Happy Gilmore. Brand's garnered plenty of eyeballs when, say, Taylor Swift has been spotted holding a bottle while watching fianc&eacute; Kelce at work from owner's suite in Kansas City.

STRATEGY: Zen WTR Rebuilding Momentum after Big Reset That Slashed Staff, Moved to Hybrid Distribution, Enlisted AriZona as Ally, Founder Collins Declares; Close to Breakeven

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