Tastefully Disrupting The Enhanced-Water Beverage Market

Some companies start with a dollar and a dream. Yanni Hufnagel from started with a dream to alter the way the US drinks beverages and . . . lemons In 2016, when the founder and CEO of the Atlanta-based company Perfect lemon company was a basketball coach at the University of Nevada at Reno, he began a ketogenic diet routine that required starting each day by drinking organic lemon water.

Although he was annoyed at having to squeeze his own lemons every morning, he found that drinking the fresh lemon water made him feel great, so he went with it. One day, he noticed that all the players and coaches in the locker room were drinking a popular antioxidant-infused water, and a lemon-shaped lightbulb went off in his brain: How about combining great taste with something good? for you? ? Something that could even make the US a healthier place? And so Lemon Perfect was born.

sweetening the deal

Hufnagel says that for him, “sugar is the root cause of much of the destruction of (the) health of the American consumer, and it is much more difficult to eat five hamburgers than to drink five sodas. The truth is that much of the health dislocation in America, especially in the most underserved communities, is due to what people drink, not what they eat.” This, he says, gave his company the opportunity to “eliminate millions of pounds of sugar from the American diet.”

Much of the US population lives in food deserts and communities with too few healthy options available, leading to rampant diabetes and other negative outcomes, including poverty.

However, because our beverage ecosystem is still dominated by high-calorie, high-sugar options, Hufnagel knew he had to “deliver sweets to the market.” “Otherwise,” he says, “people aren’t going to keep coming back.” So he set out to create a brand that offered the flavor profile of many of those conventional drinks but with an innovative, healthy twist: a real organic fruit squeezed drink.

Wanting to stay as far away from anything artificial as possible, he focused on the use of natural sweeteners. While its main competitors use synthetic versions of erythritol and stevia leaf extract, Lemon Perfect sources organic, non-GMO versions of those sweeteners for its certified organic, keto, vegan, kosher, and gluten-free beverages.

And its flavor profile has clearly won over consumers. Since its launch in 2017, Lemon Perfect has captured the seventh largest market share in the multi-billion dollar enhanced water category, becoming the fastest growing brand in that category over the past year as of June 2022. The company aims to scale to more than 40,000 distribution points by the end of 2022, and will shift its focus to retail and foodservice channels in 2023 and 2024.

Healthy body, healthy planet

But America’s addiction to sweetened beverages hasn’t just harmed its people; it also contributes to the deterioration of the planet’s health. Here, too, Lemon Perfect is leading the way. In addition to being carbon neutral and making its bottles with recycled PET (polyethylene terephthalate) plastic sourced from previously recycled plastic bottles, the company plans to become “plastic neutral” by October 2022.

This is particularly important to him, explains Hufnagel. “Whether you are using 100% recycled material or 100% virgin material, you are still producing a form of PET that is coming to market.”

He wanted Lemon Perfect to go one step further, he says. “So now we are going to remove the equivalent amount of plastic from the environment, one by one.” Going plastic-neutral is an effort that will cost millions of dollars, but it will be hugely important to the company as it scales its business, Hufnagel says: It will make Lemon Perfect the first plastic-neutral brand in the enhanced water category.

“We want to continue to be at the forefront of positive change,” says Hufnagel. “Any time we have the opportunity to lead the way and be innovative, we want to jump through that circle.”

There are no “lemons” here

Having spent 10 years as an assistant Division One men’s college basketball coachHufnagel knows something about teams. The most important thing, he says, is to surround yourself with great people and believe in what he is doing and what, collectively, his team can build.

Lemon Perfect is “building something that people put into their bodies every day that gives them the opportunity to live a healthier lifestyle,” says Hufnagel. And at the same time, “we can create a business that can have a billion dollar enterprise value, and then in the middle of all that we have these amazing people,” she says. The team of 72 he has assembled strongly believes in the brand.

Hufnagel has tried to keep hierarchy to a minimum so people can interact more like teammates. The key to this dynamic is that everyone in the company owns stock, which he believes is a major motivator. He makes the members of the Lemon Perfect team feel, he says, “like they’re really building something of their own.”

Says Hufnagel: “We’re building a great business and we’re building a business that can do real social good at the same time.”

If you want to dig deeper with more purpose-driven companies like Lemon Perfect, check out the Lead with We podcast hereso that you too can build a company that transforms consumer behavior and our future.

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