De La Calle’s fermented tepache brings Mexican street food culture to the United States with $7 million fundraiser
Fundraising led by private equity firm KarpReily, which partnered with HERE Studio and DrinkPAK to launch De La Calle via a joint venture, will help the company, which launched last year, expand the distribution and to introduce new flavors so more Americans can experience what a co-founder describes as a longtime Latin American secret.
De La Calle co-founder Alex Matthews and the entrepreneur behind HERE Studio told FoodNavigator-USA that he can’t wait for more Americans to try his company’s lighter, updated version of tepache. , partly because it offers much-requested health benefits, but more because its flavors can transport them across Mexico and Latin America to taste a different culture.
He explained that when he first tried tepache in Mexico City, he was immediately struck by its bold taste and how it seemed to appeal to everyone around him. After Matthews’ waiter retrieved the fermented pineapple drink from a wooden barrel and passed it to him in a plastic bag tied with a rubber band around a straw, he turned to serve it to a middle-aged man and then to a separated family with children, Matthews recalls.
“I had never had tepache before – or even heard of it…but I immediately saw its potential in the everyday lives of people around me,”and knew it would appeal to many Americans who seek products with natural features, such as those that accompany fermented beverages, he said.
The only hiccup was the high sugar content of around 50 grams per 12 ounces, which he says “is a lot.”He also knew that, as authentic as the bag and the straw were, the drink had to be canned to be made in America.
Working with third-generation tepache producer Rafael Martin Del Campo and his colleagues at private equity firm KarpReilly and contract maker DrinkPAK, all of which launched De La Calle through a joint venture, Matthews said the team was able to “modernize” tepache to appeal to more health-conscious American consumers.
The result was a lightly carbonated, organic, fermented drink that’s low in sugar, thanks to the substitution of erythritol, has less than 40 calories per 12-ounce can, and has natural probiotic and prebiotic properties to support gut health. .
While the drink can easily sit alongside emerging better-for-you sodas like Poppi, Olipop, or ready-to-drink fermented kombuchas based on its health benefits, De La Calle is trying not to hit consumers over the head. with the health of the drink. benefits.
Yes, the can exclaims that the drink is “Certified Organic!” », « Fermented! and contains “Live Probiotics!” but Matthews says it doesn’t go “crazy” with functional and health claims like many up-and-coming brands.
Rather, he wants the drink to stand out for its authentic flavors from areas where many Americans, who have been locked down for years during the pandemic, are eager to learn more.
With this in mind, the company’s original line is inspired by the traditions of different states of Mexico, including Mango Chili, Ginger Manzana, Tamarind Citrus, Orange Curcuma and Pineapple Spice. The latest fundraiser also allowed the company to add four summer flavors – Watermelon Jalepeno, Cactus Prickly Pear, Grapefruit Line and Chamoy.
While this strategy may seem counter-intuitive in today’s health-benefit-obsessed world, the approach appears to be paying off for De La Calle, who has won multiple awards for its product and packaging and quickly expanded. to 2,000 doors in one year.
The fundraiser will also support expanded beverage distribution in five Whole Foods regions, including Southern California, Northern California, Rockies, Northeast and Mid-Atlantic, Matthews said.
The drink is already sold in 2,000 stores in 34 states through select Whole Foods, Erewhon, HEB, independent grocers and others.
Build a diverse team
Fundraising will also help De La Calle “put bums in the seats” and bolster its team to support the company’s expansion, Matthews said.
He explained that the company is “very aware of its recruitment policy because it wants to be multicultural. And so, we prioritized people of Latin American descent,”which is important to him given tepache’s connection to Mexico and Latin America.
Beyond that, he is looking to complement his sales team, strengthen his back-office staff and his operations and logistics teams.
A strategic partnership protects against difficult macroeconomic headwinds
Starting a new business is never easy, but the current macro-economic environment makes it exponentially more difficult. But De La Calle’s partnership with DrinkPAK, which boasts the most technologically advanced canned beverage facility in North America, has shielded it from some of the most adverse headwinds, Matthews said.
He explained that DrinkPAK’s significant buying power and operational knowledge of sourcing, batching, processing, filling, packaging and distribution has helped protect De La Calle from supply shortages. supply, distribution issues and inflation that have weighed on other CPG players.
In addition, De La Calle also controls its fermentation process. Thus, there is no need to outsource to co-manufacturing, which also helped prevent the young company from being driven off the lines – a fate that befell many startups as the biggest CPGs were forced to outsource production due to labor constraints.
But rising costs still hit De La Calle hard, Matthews said.
“The cost of ingredients went up and the supply of cans was extremely bad in 2020 and 2021. But it got a little easier towards the end of the year,”he said.
However, the higher costs prevent the company from lowering its prices, which Matthews says is the company’s biggest obstacle to achieving its goal of being widely available to people of all income brackets.
Currently, a can of tepache costs $3.29, which isn’t as expensive as a competing product – Big Easy Tepache, which sells for $8.34 for an 11.5-ounce glass bottle on Amazon. But it’s also not as accessible as other branded sodas the company hopes to compete with.
But Matthews is optimistic about lowering the price and, in doing so, scaling up to make the drink available to everyone in the United States, just like in Mexico.