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  • Nexba is predicted to hit $10 million revenue in 2017. (SBS Small Business Secrets)
Few businesses are brewed over a cold drink on a Mexican beach - then again, Nexba is no ordinary company.
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Source:
SBS Small Business Secrets
5 Mar - 5:05 PM  UPDATED 12 Mar - 5:35 PM

From the distance, there is a crashing sound; rollerblades, 1980's styling and a whole lot of attitude.

Nexba naturally sugar-free soft drinks founders Drew Bilbe and Troy Douglas greet their friend, (a pseudo hero in a lurid, coloured costume) with enthusiasm; "Nexba Bro, how are you doing?"

The two created this mascot for their growing business, which they created in 2011 when they were just 23 and 21, respectively.

"I was drinking an iced tea that didn't have sugar on this beach in Mexico and I just started to think, there is nothing like this in Australia," Troy said.

A quick call to his now brother-in-law Drew, and the two came up with a plan for a better-for-you beverage business.

"At the time there was only Lipton and Nestea both in 500 mL bottles, and we came out with a can that was low in sugar, so there was a very clear market proposition for iced tea," Drew said.

 

The fast-moving consumer goods, or FMCG industry, is notoriously difficult for small businesses to crack, and having an idea was one thing - capital was another.

The pair went to family and friends, pooling their savings and came up with a total around $400,000, which they used to launch the business and buy a small factory.

"The factory was important, because we could stand on our own and produce enough, I think it showed how much we backed our product," said Drew.

The gutsy move paid off; they spent their first years knocking on doors and selling their naturally low-sugar iced teas from the back of a rusty old Kombi van.

They set their sights on mass distribution early, concentrating solely on the wholesale market, and emailing supermarkets and petrol stations to spruik their unique product.

 

A meeting with retail chain 7-Eleven changed everything.

"We waited for 18 months, ringing, emailing and we finally landed a meeting with 7-Eleven - and coincidentally BP happened on the same day," Drew said.

"We leveraged one off the other and said, "Look guys, we need an answer today... so we got both!" Troy said.

It was a success they hadn't bargained for, and demand soon outstripped supply.

Nexba sold its factory and began to outsource manufacturing, a move that required a third investor.

"We approached Peter Barron, who invented Sippah flavoured milk straws. He had been a mentor from the start, and loved the sugar-free, natural products, so he came on and supported our growth for the next stage."

 

Fast forward and the company has an estimated 6 million Australian customers, and sold 3 million of its drinks in 2016 - and it's no longer just iced tea.

Long awaited orange soft drinks range with orange, cola and lemonade hit the shelves in 2016; sans artificial sweeteners, or sugar.

"I think if we launched immediately with soft drinks we would have come up against the big multi-national budgets and it would have been difficult for us to be successful," Drew admitted.

Waiting has paid off; the company made $2.3 million in 2016, but the new soft drink range brought a slew of new customers, and is expected to bring their 2017 revenue to $10 million.

"At that point, we actually would only have broken even, which sounds like a long time after six years, but we are building a long-term, global business," Drew said.

Nexba has again outgrown its means, and its three original investors will be joined by others, with a goal of raising at least $20 million to fund expansion into the United States.

"But we will always be about Australia first, it is our main market and it is our home, but yes that Aussie brand does play well overseas, people love the lifestyle," Troy said.

Drew and Troy call themselves the Aussie Boys and have aligned with Surf Lifesavers Australia to promote its volunteers, and create a community around their drinks.

"The idea is that we are a better-for-you beverage, and we promote health and being naturally brave," Troy said.

It seems the slogan #naturallybrave is more than a hashtag - by expanding overseas, Nexba will take on brands like Coca-Cola and Pepsi Co on their own turf.

In-house commercial director and former Pepsi staffer Steve Smyth said; "This company is hitting the shelves, standing out against ones like Coca-Cola who can spend millions just on convincing the chains to put a product on the shelf."

"But the beauty of this market is if a brand with sugary drinks or artificially-sweetened soft drinks starts to try and sell a natural alternative, they will erode their existing business, which they won't risk."

Nexba Bro is the latest member of the family, and unlike Sugar Man, (a white lycra suit with an anonymous person inside), he is allowed in the company's North Sydney headquarters.

"Sugar has no place here, " Troy announced with a laugh, "so, sorry but we can't let Sugar Man in."

Fair point.

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