June 7, 2011 / 10:34 AM / 9 years ago

Mother creates unsweetened solution to "boring" bottled water

SAN FRANCISCO (Reuters) - Struggling to wean herself off soft drinks, Kara Goldin inadvertently discovered her own bottled water business.

Kara Goldin, founder and CEO of flavored-water startup Hint Inc. and her husband and COO, Theo Goldin (L), at their company's office in San Francisco, California on March 30, 2011. REUTERS/Natalie Armstrong

“I was drinking a ton of Diet Coke, vitamin waters, a lot of things that I thought were actually hydrating me, but were not,” said Goldin, the 43-year-old founder and CEO of Hint (http://www.drinkhint.com), whose business started innocently with her adding fruits such as lemons, limes and raspberries to “boring” bottled water.

What began at her kitchen table six years ago as a way to get healthier has morphed into a serious business with 26 employees and millions in revenues.

“This year our retail sales will be about $30 million and next year, barring a huge capital infusion, it would be $50 million,” said Theo Goldin - Kara’s husband - and parent company Hint Inc’s chief operating officer. He noted that Hint doubled its sales from 2009 to 2010, mostly through same-store sales increases.

The San Francisco-based company’s products are now found on the shelves at more than 15,000 retailers across the U.S. and Canada, including Whole Foods, Lowes and Starbucks. Hint also just launched a carbonated version, Hint Fizz, at The Fresh Market stores in the southern U.S.

“Unlike some of the other so-called waters out there, this really is water,” said Goldin, a mother of four whose goal was to create a healthier beverage for her family, like her father Bill Keenan did in developing Healthy Choice frozen dinners for ConAgra. “We use real fruit, sometimes it’s the rind, sometimes it’s the peel and sometimes it’s the actual fruit that we use in order to create the essences.”

Hint, which comes in 10 flavors including such exotic-sounding combinations as pomegranate-tangerine, mango-grapefruit and honey dew-hibiscus, is advertised as being made without sweeteners, preservatives and calories. A 16-ounce bottle retails between $1.69 and $1.99, but sells for as much as $4 at some outlets.

Initially HINT targeted 35-year-old mothers, but the demographic has expanded to people who want to maintain a healthy lifestyle and others with health issues, said Goldin.

“They’re drinking it because they’re diabetic, they want to lose weight, they’re child is obese, they are an athlete and they don’t want all the sodium in their system.”

THE PITCH

A recent report by the International Bottled Water Association (IBWA) shows overall consumption of bottled water increased 3.5 percent in 2010, after slight losses the previous two years due to poor economic conditions. Bottled water accounted for 30 percent of the U.S. beverage industry last year, according to the report.

Hint’s biggest challenge is getting proper shelf space for its products, Kara Goldin said, adding that while Hint made it onto the shelves at Starbucks, the coffee chain only stocks its blackberry beverage.

“Unless the retailer is willing to put four or five different flavors of Hint on the shelf, consumers often can’t find it,” she said.

Theo Goldin said Hint doesn’t need to take market share away from the bigger, established flavored-water brands. “In fact, one of the things that drove Starbucks to adopt Hint was that they realized it’s incremental sales,” he said. “We’re really competing against everybody for shelf space but we’re adding to the bottom line for retailers.”

Slideshow (3 Images)

Hint, which was initially bootstrapped with $50,000 of Kara Goldin’s personal savings, has raised more than $10 million in outside capital from individual investors and European venture capital firm VerlinVest SA. Theo Goldin said he expects Hint do another private round of fundraising by the end of 2012.

Hint is looking to hire more sales people to make sure retailers understand the product and know how to better position it in stores.

“We’re serving a need of people who want to drink more water but find plain water boring,” said Theo Goldin, insisting Hint is not competing against bottled water. Despite the challenges, he added he expects the business “to grow between 70 and 100 percent year-over-year for the next three to four years.”

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