Why we invested in Air Up

Shaping the beverage industry transition to no single-use plastic and no sugar

At Five Seasons Ventures we have been looking for a solution to solve two major problems in the beverage industry:

· Sustainability: moving millions of litres of water in plastic bottles from A to B is an obsolete and unsustainable business model

· Sugar consumption: move away from sodas and sugary drinks

Convinced that tap water is the right starting platform in Europe, we have been actively looking for solutions that make tap water better, tastier, and more interesting to drink. But here either consumer hardware constraints (high initial cost, maintenance, lack of kitchen space) or the downside health effect of additives (like added sugar, salt, chemical flavours and colouring agents) often got in the way of a solution that is affordable and better for the consumer, and better for the planet. Until we discovered Air Up, kills two evils (sugar and the plastic) with one stone.

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Taste through scent only (and nothing else)

Air Up is a Food Tech company with patents that cover a system including a simple-to-use but clever bottle and its aroma pods. The system is capable of delivering ‘taste through scent’ by giving the brain the illusion of flavour thanks to the aroma contained in the pod. Through an application of the Venturi Principle, the aroma is released and perceived through the nose of the customer (this is also known as retro nasal scent), who is actually drinking plain (tap)water from a bespoke straw inserted into the bottle. The bottle is reusable, and the pods deliver flavour for several litres of water. Through offering multiple unique flavour experiences (our favourites are clementine, peach and coffee by the way), customers can personalize their water with pods that fit their taste. Say goodbye to calories, sugar, and single-use water bottles.

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Gadget or business model?

At first glance we thought the system was a cool gadget. But looking at Air Up’s retention rates through the lens of our experience with DTC food and beverage companies, we found convincing evidence that users would come back to order more pods with high frequency or buy bottle accessories or starter kits (a bottle and 3 flavoured pods) for friends. Once again, we believed in a Food Tech company that figured out how to go to market with a digital-first, direct-to-consumer business model that works.

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The bonus points: lifestyle brand with an engaged tribe
Air Up has a fast-growing online fan base that share pictures, ideas, and consumption moments with the #thinknewdrinknew tribe on Instagram and YouTube. Especially Gen Z and Millennials show high engagement and keep recommending the brand to others, resulting in a high word-of-mouth share in the marketing mix. The brand is shaping up towards a beverage lifestyle brand with a surprising experience, and health and sustainability as core values. Values which are in line with the sustainable investment principles our team has been applying as criteria for the selection of all of our 10 portfolio companies.

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The future is… Scent-based flavour
Perhaps the best part of the Air Up story is that we are just at the beginning of it. There is a full pipeline of new products to be brought to market, because their patented retro-nasal technology allows for expansion across different categories and formats. All very exciting, all without sugar and additives, and all without single-use plastic bottles, of course. On to the beverage 2.0.

We are ready and looking forward to supporting the Air Up team [Chris, Jannis, Fabian, Tim, Simon, Lena] in changing the beverage industry for the better. #thinknewdrinknew

Five Seasons Ventures
nicolas@fiveseasons.vc
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