At the northeastern base of the Mauna Loa volcano, just south of the town of Hilo on the Big Island of Hawai’i, a persistent flow of rainwater spills down steep slopes of volcanic rock, through the soil, and into the Kea’au aquifer each day. This natural filtration process and a 1.4 billion-gallon-per-day recharge rate are what make the area an abundant source of clean drinking water, while giving the water a distinct, naturally alkaline profile. They’re also the principal reasons why Waiākea Water chose to bottle its water there and set up a beverage company.
Waiākea Water set up a bottling plant near the source of its water, the Kea’au aquifer on the island of Hawaii.
Courtesy of Waiākea WaterCEO Ryan Emmons says the company’s “drink healthy, drink sustainably, drink ethically” brand promise is what helped Waiākea Water break into the crowded premium water space when he launched the company with cofounders Matt Meyer and Alex Preston in 2012.
Inside an 8,000-square-foot facility surrounded by the Waiākea Forest Reserve, 24 of the company’s 40-person staff manage the production line with its twists and turns of piping, electrical conduit, and fast-paced packaging equipment. Staff are tasked with checking various tablet stations and control panels for production rates as well as readings on the water’s dissolved solids, mineral content, and alkalinity before and after an ultraviolet filtration machine filters out nanoparticles or viruses.
“That’s all we do,” Emmons says. “We don’t want to touch our water composition, because that’s a big part of what gives it its clean, smooth, and soft-mouth feel.”
Since 2016, the company has averaged a year-over-year growth rate of 51%, and forecasts a 98% YoY growth rate by the end of this year.
Tackling the ‘Hard Stuff’
Despite its rapid expansion, startup growing pains and runaway expenses were draining the company’s reserves back in 2014.
“We had no money and were scrambling to improve cash flow, just so we could break even,” recalls Emmons, noting that company executives deferred their compensation for months in order to pay the company’s plant team.
After purchasing $150,000 worth of used bottling, packing, and labeling equipment at auctions, “we were only able to get half of it working,” he says. “We were literally bleeding money.”
While the company was still getting orders out to its customers, Emmons says its operations were plagued with 40% to 50% downtime and 20% scrap every day. Its facilities were often shut down for two weeks at a time: “It was a [expletive] nightmare.”
Tracking orders, inventory, and financials was equally brutal, says Adam Schechter, vice president of finance. The business ran—barely—on a customized CRM app, an accounting tool, and spreadsheets. “We had no real way to trace our costs back from their initial order to getting product out of the warehouse,” he says. “We couldn’t even track our stocks, so our inventory levels rarely synced with the records from our third-party logistics partners.”
Waiākea Water needed a life raft, and soon found one in the form of a $2 million loan. Yet, with a monthly burn rate of $200,000, Schechter says, “we didn’t have much time to get this right.”
The first thing the company did was hire beverage consultants who helped reconfigure the layout of Waiākea Water’s assembly line and storage areas. The consultants helped the company replace much of its equipment, and integrate quality systems and programmable-logic control panels with its new cloud software, Oracle NetSuite.
Before choosing Oracle NetSuite, Schechter and Emmons looked at a lot of other enterprise resource planning (ERP) software platforms. But most “were crazy expensive, looked really old-fashioned, and would take 6 to 12 months to implement,” Schechter says. “We just couldn’t justify putting our future on hold for that long.”
After looking at NetSuite, Schechter says he knew immediately that this was the platform that Waiākea Water needed. “We’re a fast-growing company, and with NetSuite’s flexible platform, we can easily add demand planning, or advanced manufacturing as we grow,” he says.
Starting in 2016 with NetSuite’s cloud manufacturing software for startups, “we were able to create all of our sales and purchase orders, track inventory and logistics, and also manage financials and accounting in one system,” Schechter says.
A year later, to help support further growth, the company adopted NetSuite’s midmarket manufacturing edition. Last year, Waiākea Water upgraded to NetSuite’s advanced manufacturing platform, and now is running its entire manufacturing facility and integrated third-party warehouses on it. With a new tablet interface, the company will soon add modules for bar-code tracking, digital demand planning, and electronic data interchange integration, for all of its retail partners.
“In addition to the flexibility it offers, the cool thing about NetSuite is its robust ecosystem of partners. If we need functionality added, we have many options,” Schechter says. He adds that his favorite part of attending events such as SuiteConnect San Francisco is the opportunity to connect with partners and discover new ways in which Waiākea Water can unlock growth.
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November 18, 2019 at 05:00PM
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Waiākea Water’s Growth Formula: Volcanic Water, Plus Better Data - Forbes
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