June 2017
Vol 5 | Issue 126

Q&A with Blair Bentham

Founder and CEO of Formula Four Beverages Inc.’s OXiGEN™

Principal Series:

Family Office Insights sits down with Blair Bentham, Founder & CEO of Formula Four Beverages Inc., to discuss the health benefits of an one-of-a-kind beverage, OXiGEN™ Water, and its proprietary oxygen concentration that is leading in international licensing agreements.

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Tell us about your background and your company, Formula Four Beverages Inc., and your product, OXiGEN™.

My family has been in the beverage industry for the past 26 years, specifically in the “white label” co-manufacturing space for 16 of those years. We started in the 90s in Western Canada in the home/office water delivery business, and built up a company that we eventually sold to Culligan, a home and business water treatment system in Canada. In that sale, we were able to keep the small pack individual bottle business, which we turned into a contract packaging company that packaged beverages for other clients. With 8 beverage plants in the US and 2 in Canada, we’ve seen many brands come and go, as well as grow to be major players in the industry, including Smart Water and Vitamin Water.

Prior to becoming President of the family company, I was in private equity for about 8 years before returning to the company and growing it to where it is today. About 15 years ago, two men from California who are now my partners in Formula Four Beverages, approached me about their oxygenation technology. They wanted to commercialize the technology and bring it to market. Red Bull and Monster Energy were already early players in the industry at that time, and the market wasn’t quite ready to be introduced to something more natural. I knew though, that this was something I wanted to revisit later. Four years ago, Formula Four got the exclusive global and distribution trademark rights to use the oxygenation technology called ASO® (activated stabilized oxygen).

In 2014, I founded Formula Four Beverages Inc., and its first products, OXiGEN™ water and OXiGEN™ shot, in a separate holding company outside the family business. Our family company is a white label manufacturer packaging other brands with no single front-facing brand image or story, and I believe that Formula Four is so unique that it deserved its own brand and focus. Circumstantially, the family company had been successfully operating at capacity with long-term clients that we didn’t need to expand operations by adding a new line of beverages to our business.

ASO® is the proprietary O4 ingredient that makes up the science behind the OXiGEN™ water and OXiGEN™ shot. O4 technology was first developed for water treatment applications as a safe all-natural alternative to chlorine. The solution contains bio-available oxygen molecules (O2) that when bonded together form a highly stable O4 molecule in a very high concentration. This remarkable O4 molecule is non-toxic and sterilizes pathogens on contact while remaining completely stable in water. Originally used for water purification, its balanced pH, non-toxicity, and high oxygen content makes it the most versatile and safest stabilized oxygen solution available today.

OXiGEN™ is a completely unique product that’s made up of oxygen, distilled water, and sea salt. Our oxygen concentration is so high that if you left the bottle uncapped for 6 months the oxygen level would remain the same. OXiGEN™ water contains 100x more oxygen than regular water. OXiGEN™ shot, a 0.5 fl oz oxygenated shot, has 5x more oxygen than OXiGEN™ water. It aids in recovery from workouts, alleviates jetlag and hangovers, and restores energy without sugar, caffeine, calories, or unhealthy additives.

Who is your target audience?

Although water and oxygen is essential for everyone, we are focused on the healthy active lifestyle consumer. Our target consumer is female, aged 24-39, young active soccer moms. We focus on males and other demographics as well, but about 65-70% of our marketing has been effective towards young females. In terms of consumer buying habits, generally 80% of household good purchases are dictated by females, so by default, we get the husbands, boyfriends, brothers, and children demographic as well.

What are some of the challenges you face in this market?

The water category is massively oversaturated. There are 1,500 bottled water brands in the US alone. While bottled drinking water with no functionality is becoming a commodity, we are in the premium category, but more importantly, with functionality. There are products from the past with claims regarding oxygenated water that have zero efficacy or proof that left a stigma around the oxygen water concept, with many unbelievers. What’s unique about us is that we have scientific evidence and published studies that show how we are different with solid facts. In order to overcome the challenge of a saturated and stigmatized market, our marketing strategy is 50% brand awareness and 50% consumer education—explaining why this isn’t a gimmick or marketing ploy, but a proven benefit for consumers.

Who are your key competitors and how are you different?

Others in the functional water and premium water space like CORE Hydration, Essentia (alkaline water), coconut water brands, and Fiji have the target customers that we are competing for. All these players that exist in the space are “me-too” products, while we are in our own white space and category. Fiji is a great cache product that hydrates you with no other function beyond that, and from an environmental standpoint, it’s shipped from 10,000 miles away.

When we speak with retail buyers and consumers, we aren’t compared to anything else. The fact is, we have scientific evidence and have been peer reviewed, which is rare in the natural food space. In terms of taste, the water has so much oxygen that consumers tell us it’s smooth, crisp, and not mineral-like. There are other products in the market that’s made with purified water that are flat and tin-like, but ours is fresh and rolls off the tongue.

In building brand awareness, we have partnered with kathy ireland® Worldwide to drive global awareness through brand, marketing, and promotional support. Kathy Ireland serves as OXiGEN™’s Chief Branding Advisor, brand ambassador and business consultant. She has established herself as one of the foremost authorities on lifestyle branding and marketing worldwide. She is also recognized as one of the Top 10 Women’s Health Advocates in America, a designation that is wholly aligned with OXiGEN™’s values. This strategic partnership also opens us up to her vast array of resources related to marketing, production, and sales and distribution networks.

Currently our products are distributed throughout the US in 4,500 retail locations in 34 States, on track to be in 20,000 US stores at the end of this fiscal year. We are also active in Mexico and the Middle East, with talks to launch in India, China, Taiwan, Japan, and South Korea. Since we are a Canadian corporation, we have access to Export Development Canada (EDC), Canada’s export credit agency that is Government owned. EDC supports and develops trade between our country and other countries to bring opportunities for Canadian companies in the international marketplace. Our overseas relationships come with a full backing from EDC, which helps us to launch OXiGEN™ overseas. That’s the beauty of our licensing business model, the zero cost structure. Our partners overseas pay us a royalty on monthly production for becoming exclusive manufacturing and distribution channels for Formula Four. We ship the concentrated formula to our partners, never giving up our secret sauce, which requires a 100-step manufacturing process to develop. We worked with University of Rome, University of Florida, and University of Utah’s Biochemistry department to make sure our formula is stable and there’s no chance to reverse engineer it.

How are you changing the landscape of your industry?

We have massively raised the bar on efficacy. We have the assets to be a game changer. Gatorade claims to have a ‘science centered’ brand but it is purely sugar and salt. The benefits of oxygen are so advanced in terms of what it does to your organs, skin, eyes, etc. that there is nothing like it on the market today. We can disrupt the landscape by asking the average Joe consumer to pay a small premium for the massive benefits of oxygen, while taking a huge market share from the premium and functional beverage industry.

Who is your ideal investor? How much capital are you looking to raise?

This is a unique Series A raise as we have all the infrastructure, manufacturing, technology, and R&D for the product in place; we are raising for growth capacity to expand our US presence. Of the total $8M raise, we’ve raised $3M in cash from friends and family of our current investors. Our full raise is $8M for about 20% of the company, and ideally, we would like to have 5 investors for the balance $5M. We have been strategic when choosing investors to work with because we believe that this is a strategic investment opportunity for our investors as well.

Our ideal investor is someone with an entrepreneurial sense interested in investing in a high growth startup company with experience and knowledge in the beverage industry, retail, distribution, and in the international distribution space. This is a big plus for us to help expedite our expansion in the US. Our management team is speedily focused on looking to hit terminal value in 36 months. We are focused on working with investors who understand the value that’s created with exponential growth. Ideally, we would like individuals and Family Offices interested in investing in medium-term investments about 36-48 months.

Two of our investors are Family Offices based in Los Angeles. We’ve found that they are far more entrepreneurial and not subject to making decisions based on investment boards and committees. By default, they’ve made their wealth from companies they’ve built and have an understanding of branding, marketing, and sales, which is an asset. We’re not looking for active investors, but rather those who bring us great business and investor relationships by word of mouth, which has been massively beneficial to our company.

What’s your mission?

Our overarching focus is health and wellness. We strive to become the beverage of choice for every man, woman, and child, providing a natural product with undisputed health benefits.

What’s next for you?

We’ve already launched internationally in tandem with the US. With our strategic partnerships overseas, we are fast becoming a licensing entity and brand owner. Currently in Kuwait, Mezzan, the largest bottled water manufacturer and distributor in the UAE market, has the exclusive rights in the Middle East with plans to launch in Dubai and Abu Dhabi. Six weeks ago, our Family Office partners in Mexico launched with discussions to expand into GNC and 7 Eleven. We are also in talks with Tata Global Beverages in India for exclusive rights and are set to close in the next 60-90 days. In China and Taiwan, Reignwood Group is a monstrous partner that distributes to 4 million points of retail monthly, which is also our next partner for exclusive manufacturing and distribution rights.

We are on a high growth trajectory with overseas partners, yet we are still nimble and focused on the marketing, sales and brand development of the company. Our focus is building the value of the brand because that’s where the value is in the long run.

Blair Bentham

Blair Bentham’s family has been in the water business for the past 26 years, and more specifically in the “white label” co-manufacturing space for 16 of those years. Having been the President of the family company for 12 years, Blair’s experience in beverage manufacturing, distribution, logistics, and overseeing a team of sales, marketing and manufacturing professionals, provides Formula Four Beverages with the hands on experience that most well established brands have come to enjoy after many years of operation. Prior to running the family business, Blair worked in private equity for six years with a boutique, family firm in Vancouver, BC, where he learned the business from a successful family that focused on real estate, mining and mergers and acquisitions. Beyond the “nuts and bolts” of manufacturing, distribution and logistics, Blair’s focus is building, supporting and focusing the team at Formula Four Beverages to execute on building a world-class brand delivering an exceptional experience to our customers all over the globe.

For more information, please reach out to Blair at blair.bentham@formula-four.com.