Nitro Beverage Co. is having a restless year: From launching cold brew coffee into specialty retailers such as Whole Foods and Bristol Farms to optimizing its cold chain through decentralized warehouses, the New Jersey-based coffee marker is now making a foray into the kombucha territory.
None of these were on their agenda when Mike D’Amico, his brother Paolo D’Amico started the business, alongside their friends Ali Mohamed and Kareem Elhamasy, with only three carts on the street back in 2016.
“We didn’t really anticipate to become a ready-to-drink brand while we were selling coffee on tap to beach-goers and commuters. Our goal was to simply provide the best nitro cold brew experience through quality ingredients,” Mike D’Amico recently told me at Natural Products Expo East. But as the consumer demand grew, pushing the company to upgrade from the original three-gallon kegerator to five gallon, and serve up to 100 locations, entering retail seemed to be a natural progression for the business.
Initially, a mobile beer canning company took notice and partnered with Nitro Beverage as its co-packer between 2018 to 2020. The coffee manufacturer has since switched to a larger partner as it transitioned from the standard soda can to the 12-ounce slim can, coupled with leveled-up distribution.
That occurred around the same time when the consumer awareness of nitro cold brew started to mature after the nitrogen-infused concept was introduced to the public in early 2010s. From consumer heavyweights to fast-growing startups, coffee players including Starbucks
SBUX
Today, nitrogenated coffee is a multimillion-dollar business thanks to its smooth taste and creamy texture with global size forecasted to reach $51.1 million by 2025, Grand View Research estimated. Nitro Beverage believes it’s well positioned to compete in this market due to its simple ingredients and freshness.
Nitro Beverage expands into the kombucha category after receiving new investment.
“It’s difficult to ship cold products, but ultimately, it pays dividends to our consumers because they enjoy a fresh coffee every time they purchase from us,” D’Amico explained. “We notice coffee consumers are becoming more and more conscious of what they’re drinking, and our products are clean label, made without additives or preservatives.” This mindset continues to resonate with the broader beverage shoppers, which is a key reason why D’Amico’s team decided to apply the nitro technology to kombucha.
“Our co-manufacturer essentially brought on nitro capabilities to accommodate what we’re building with our kombucha line. They help remove all the bubbles, creating a more palatable, less harsh product to the masses,” he told me. These products come in four different flavors: blueberry lavender, passionfruit, ginger, and apple spice, according to D’Amico, and they are currently available in the same retail accounts where Nitro Beverage’s coffee products are sold, including Central Market and Erewhon Market.
To fuel Nitro Beverage’s ongoing expansion, the company has secured a fresh cash injection from its previous backer VERSO Capital, the VC behind some of the trendiest food-tech companies in the world, including Impossible Foods and Eat Just. The new investment will also go into Nitro Beverage’s next series A fundraise, according to D’Amico. PitchBook showed the firm has amassed $1.5 million in a previous seed round at a $7 million valuation.
Additionally, Nitro Beverage anticipates to boost partnership with its Los Angeles-based distribution center to counter the increased shipping cost. “The freight price has increased significantly from $400-500 per pallet to $1,200-1,500. Once we close our next round, we’re effectively going to double down on production, and store our products in LA rather than shipping to the area,” D’Amico said. ‘That will be super cost effective.”
“We’re on track to achieve over seven figures in revenue this year,” he added, “and with the new product line, we’re looking to double that every year.”