The allure of Mexican traditions meets modern innovation in the vibrant world of tepache, a drink with ancient roots and a fresh, contemporary twist. I sat down with Alex Matthews, founder of De La Calle, to discuss his journey from curiosity to creation, bringing the authentic flavors of Mexico to the U.S. market. We delve into the challenges of introducing tepache to American consumers, the evolution of the brand, and the strategic decisions driving its future growth.
Dave Knox: What inspired you to launch De La Calle?
Alex Matthews: I’ve always been intrigued by Mexico. Coming from the UK, Mexico has always seemed exotic. After moving to California in 2000, the country’s allure grew, leading to frequent trips—initially as a tourist with my wife and later on more adventurous journeys, like dirt bike trips to Baja and Guadalajara. Over 10 to 12 years, I noticed tepache being sold by street vendors and in local markets across Mexico. I thought it was delicious, but it wasn’t until a lunch conversation with a friend about fermented foods that the idea really took shape.
As someone with a background in food and beverage, I started thinking about celebrating different fermented drinks from around the world. Tepache, a traditional Mexican beverage, was on our list. While on a trip to Mexico City, I visited a local market, found a tepacheria, and was struck by how many locals were enjoying the drink as part of their daily routine. This got me thinking—why isn’t tepache more widely available, especially in the U.S.?
Digging deeper, I learned that tepache dates back over a thousand years, originating in pre-Aztec Mexico. Initially made with corn, the recipe evolved to include pineapple, fermented with local spices and sugar. The story behind tepache—its history, health benefits, and regional variations—fascinated me. I shared my thoughts with a friend who’s an investor in the food and beverage space, and we decided to explore the potential of bringing tepache to the U.S. market.
In early 2020, the three of us raised a small amount of money and set up a pilot plant—just a thousand square feet—where we started fermenting our own tepache. Over the course of a year, we developed five different flavors, each inspired by the diverse regions of Mexico, and began thinking about how to introduce this historic drink to the U.S. market. That’s how De La Calle began—an idea sparked in late 2018 and brought to life in 2020.
Knox: When introducing tepache from Mexico to the U.S. market, what challenges did you face?
Matthews: From the start, we knew that “tepache” was an unfamiliar word for the U.S. market. It wasn’t something you would find on shelves here. We also knew that our company name, “De La Calle,” which means “in the street” or “of the street” in Spanish, would require some education, as it’s where you typically find tepache in Mexico—literally in the streets.
Our initial challenge was twofold: How do you pronounce it, and how do we make it intriguing enough for people to pick up off the shelf? We initially felt that kombucha had paved the way for fermented beverages in the U.S. market. Kombucha, which was once a completely new concept, had gained a strong foothold, and you can now find it in almost every grocery store in America. We hoped that tepache, as another fermented beverage, could follow a similar path to popularity, even though it was a new idea.
Tepache is made with pineapple rind to kickstart fermentation, along with Mexican sugar and spices. The flavor is naturally appealing—far less vinegary and intense than kombucha. It almost tastes like a Mexican soda. We were banking on the idea that its unique profile as a fermented Mexican beverage would intrigue consumers.
Our biggest initial challenge was educating consumers about what De La Calle and tepache are: a traditional Mexican drink with health benefits, but with a new word and concept for most Americans. This challenge has been our focus for the first three years of the company’s life, and while there have been other challenges, this was certainly the most significant one at the start.
Knox: You recently mentioned a branding refresh. What led to that decision, and what changes are you making with this update?
Matthews: When we first launched De La Calle, the brand’s growth was explosive—over 100% year-over-year for the first few years. We quickly gained distribution across every state, with our products now in around 8,000 stores nationwide. Whole Foods played a big role in kickstarting this back in 2021, seeing an opportunity to introduce something new to their customers. That success led to other major retailers like Target, Walmart, H.E.B., Kroger, and Albertsons following suit.
Initially, the signs were extremely positive. But by year three, I began to reassess our positioning. One concern was that our association with kombucha could hold us back. Kombucha has plateaued and may even see a slight decline in the coming years. We needed to distance ourselves from being seen as “just another kombucha.”
Another factor was the growing Latino population in the U.S., particularly Mexicans, who make up a significant portion of that demographic. Tepache is familiar to many within these communities, and the education barrier is much lower for Spanish-speaking consumers. However, we had been positioning ourselves as a premium product, similar to kombucha, which didn’t align with how tepache could be perceived by this audience. We weren’t effectively reaching the Latino customer base during our first three years.
The third realization came from examining the Mexican soda category. There’s a high demand for Mexican sodas in the U.S., but there are only two major players—Fanta, owned by a large corporation, and Jarritos, which has seen massive but somewhat quiet success since the 1980s. No one had really thought about how to modernize a Mexican soda. When we introduced tepache to the U.S., we modernized it—canned it, carbonated it, lowered the sugar, increased vitamin C, and got it organically certified. But I thought, “How can we modernize this further?”
We needed to position tepache as a modern Mexican soda, something healthier with functional benefits, yet still connected to its heritage. We also needed to lower our price point to be more in line with the better-for-you soda movement, appealing to both Latinos and other ethnic groups, while distancing ourselves from the kombucha comparison.
These three factors—distancing from kombucha, reaching the Latino market, and modernizing Mexican soda—led us, at the start of 2024, to firmly push for repositioning tepache as a modern Mexican soda.
Knox: When will this new branding fully hit the market?
Matthews: We’re in the middle of the launch right now. We’ve updated our can art to emphasize “modern Mexican soda” and adjusted the copy on our packaging to reflect the new positioning. We’ve also lowered our price point nationwide.
However, changes at the retail level take time. It’ll be another four to five months before you only see the new cans on shelves. Our marketing has already shifted to focus on the Mexican soda aspect, and we’re working with retailers to update displays and in-store promotions to communicate this change.
Knox: As you focus on changing De La Calle’s footprint and market presence, what other changes will you drive in the next six months to support the modern Mexican soda positioning?
Matthews: Changes in grocery and retail are gradual, often taking six to nine months to fully implement. While price points and can designs are being updated, it will take four to five months before the new Mexican soda positioning is fully visible on shelves. We still have existing inventory, both at the retail level and with our distributors, so the transition won’t be immediate.
From a marketing perspective, we’re now positioning ourselves clearly as a Mexican soda, which is a significant shift for us. This adjustment is an evolution for De La Calle, and since we’re already a national brand with widespread retail presence, it’s easier for us to make this change and benefit from it.
New consumers will be attracted by our lower price point, and existing customers will have a clearer understanding of what tepache is—a Mexican soda. This clarity is crucial. Early success stories in the better-for-you soda category are encouraging for the market, and we see our unique positioning as complementary to those trends.
While some competitors focus on American nostalgia, we’re leaning into our Mexican heritage, which is highly popular in the U.S. There’s room for diversity on retail shelves, and major retailers like Target, Walmart, Kroger, and Albertsons recognize the need to cater to the Latino demographic, which is projected to be 25% of the U.S. population by 2028. De La Calle speaks to that heritage, and we believe this will lead to sustained success in the U.S. market. These are some of the key initiatives we’ll be driving over the next six to nine months.
Knox: You’ve mentioned a lower price point, which is notable given the recent inflationary period where nearly every brand has been raising prices. How are you planning to communicate this more approachable price point to consumers and leverage it to your advantage?
Matthews: There are some well-established methods for this, primarily through our retail trade programs, such as net tags and labels. However, retailers are becoming stricter about what can and cannot be done in-store. Our primary focus will be on building prominent displays. We need to stack our product on the floor with clear signage that highlights both the new price point and our positioning as a Mexican soda. These displays are crucial for us to effectively communicate our price in-store.
Additionally, we’ll use social media and the digital media platforms that many retailers now offer, including in-store apps and their existing media channels. While these platforms can be expensive—especially for a growing brand like ours—we plan to take full advantage of them to reach our audience.
Knox: Beyond the rebrand, can consumers expect any new innovations or flavors from De La Calle?
Matthews: De La Calle was born out of HERE Studio, an agency I started in 2018 that works with consumer brands in the food, beverage, and hospitality space. We’re constantly in touch with trends, and that helps us innovate.
We have a new flavor coming that we see as a gateway to tepache—a familiar taste that bridges traditional Mexican sodas with tepache for different generations. We’re also working on improving our formula to enhance flavor and make it more soda-like while keeping it low in sugar, organically certified, and craft fermented. We want that drinking occasion to feel more like a soda drinking occasion and you can expect some exciting innovations from us in the next six months to support that.