One of the hardest hit companies through Covid have been the independently-owned fitness centers across the region. But many thanks to a now award-winning marketing campaign by O2 Restoration, numerous of people gyms have been equipped to continue to keep their associates in the course of the lockdowns. I sat down with Dave Colina, CEO and Founder of O2, to speak about their #StayForMay campaign, which not long ago received BevNet’s Finest Advertising Campaign award many thanks to just about 60,000 shoppers having to pay their dues to 1,918 fitness centers.
Dave Knox: What is the tale driving O2?
Dave Colina: O2 is a restoration drink and as a brand name, we make purposeful hydration and recovery items that taste seriously, genuinely good, and are thoroughly clean and all-pure. The first plan started in 2011. I was exploring for a better choice to all the sports activities and strength beverages that I was consuming and could not discover anything that I liked. I approached a friend who’s a physician about efficiently making a much better mousetrap and combining the points that we liked about athletics and strength drinks and excluding the stuff that we did not like this kind of as the higher sugar. And so that was the initial premise for our products. And then he arrived across some actually powerful healthcare literature that showed the accelerating results of ingested oxygen on the liver’s rate of metabolism of toxic compounds. And which is when it became a recovery drink. We’ve had a strong presence in the fitness scene considering that we launched. Our existence in the exercise scene just came as a consequence of my staying a CrossFit mentor. That was anything I started to do after I remaining my working day occupation to assistance make finishes satisfy.
Knox: The conditioning scene has been just one of the toughest strike industries during the pandemic. How has O2 responded to that?
Colina: Our sturdy presence in the exercise scene has been rooted in unbiased health and fitness center proprietors, so CrossFit health and fitness center homeowners, boot camp health and fitness center homeowners, yoga studios, locations like that. They had been among the our first retailers of O2 when we introduced and have considering the fact that played a really, really massive function in setting up up the brand. When 2020 rolled around, we had at minimum over 50% of our small business coming from our exercise channel exactly where fitness centers have been paying for O2 from us and marketing it to their users. And inside a subject of about a 7 days of Covid, that channel disappeared completely. We have generally been a incredibly values-oriented organization. So when Covid strike, we decided that we had been going to lean into this and do all the things that we could to support our main clientele, which are the independent health and fitness center homeowners, for the reason that we feel that the fitness center entrepreneurs are between the most important associates of our modern society, especially appropriate now, mainly because they hold us in shape and balanced. We announced a plan on March 18th referred to as the 50/ 50 initiative in which we fully commited to pledging 50% of our revenue from each individual acquire of O2 that was completed on the net, back with the purchaser’s neighborhood fitness center owner. And within just three times, we had done far more income on line than our ideal thirty day period ever. And around the study course of about five weeks, we brought in a several other manufacturers to be part of us in this initiative and finished up becoming a member of producing in excess of $230,000 to give back to about 2,100 participating gyms.
Knox: As a startup, every single dollar counts for your enterprise. What gave you the self-assurance to study in and donate that sum of revenue to the gyms?
Colina: This was not a determination that was pushed by a spreadsheet or driven in purely economical motives. Usually, I think any CFO in America would have claimed, “Really don’t do this.” This was one thing that was driven by a experience of moral obligation to do the ideal matter. When our fitness center channel shut down, that channel was about 50% of our profits, but we nonetheless experienced two other income channels that ended up properly wonderful. One particular was the grocery channel, and grocery was finding crushed in March. Folks stocking up on products and solutions, specially hydration-based mostly merchandise. And then the other channel was our website channel, drinkO2com. And we could not genuinely impact what transpired in the grocery channel, but we could influence drinkO2. com and what we do with it since we very own that channel. So it felt like the appropriate detail to do in that scenario, knowing that fitness center users have been going to continue purchasing O2 apart from in its place of obtaining it from their fitness center since their gym was shut down, they have been heading to purchase it from us on drinkO2. com. It only felt like the appropriate detail to do was to share the upside from that transaction, with the gymnasium proprietor that would have normally been earning that sale. It wasn’t something that we thought was likely to get off in the way it did. Frankly, we were being all a little amazed and delighted that it took off the way that it did, but unquestionably amazed. And it also wasn’t anything that we felt represented a tremendous chance to us for the reason that we continue to, even while we have a to some degree large existence these days as a brand name, we only have a number of men and women that perform on the staff. There is certainly not a ton of overhead that we needed to include, so we could find the money for to share 50 % of our profits above the system of a few months with some definitely deserving individuals. So that is what we did. And the good news is for us, it paid off in a really massive way.
Knox: What has separated O2 in the beverage industry?
Colina: There are a few points. A person is the product or service. The product or service, it just tastes actually, actually excellent. And I know that seems extremely simplistic, but you’d be astonished how several useful merchandise really don’t flavor that excellent. O2 is a purposeful hydration solution, which signifies it’s received a large amount of electrolytes. It truly is received 50% a lot more electrolytes than Gatorade, for case in point, but it only has one particular gram of sugar and it will not have any synthetic components, but it tastes truly, actually, truly superior. So not only does it operate perfectly in phrases of assisting you hydrate more rapidly and get better speedier, but it also just tastes incredible. That is on the item side.
But I consider even additional unique is the organization and the kinds of matters that we do for the group. We’re a firm that is values-driven. We only have a few values, but we’ve taken every single really, truly severely. It can be honesty, humility, and hustle. And so we set these values ahead in every thing that we do. And I’ll give you an case in point. In April, we were out in the marketplace with this 50/ 50 earnings-sharing campaign that we have been performing. And we were talking to all the health club proprietors that we function with and just gauging how they were sensation about Covid and their company in basic and how issues were being heading to unfold in the month of May possibly. And the too much to handle consensus was it is really been a seriously, really constructive practical experience observing what my group is carrying out, observing my users rally, and viewing models like O2 rally to guidance me. But gosh, I am terrified of what is actually to occur if I’m even now compelled to keep my gym shut down. Gyms have been just having difficulties to obtain techniques to give their users benefit while their gym doorways were being shut. We went back again to the drawing board and we bought innovative, which we do rather nicely at O2. And we claimed, “What can we do to support gyms keep much more users as the thirty day period of Might unfolds and as gyms are even now forced into these obligatory shutdowns.” We came up with an strategy we identified as Continue to be for Might. O2 and three other fitness models pooled our means and collectively stated, “We’re going to donate a $25 present card to our sites.” So throughout 4 brand names, that aggregated to $100 present card to each gymnasium member in America who belonged to a person of all those 2,100 collaborating gyms… as lengthy as they retained their health club membership in the month of May well lively. When we announced that, we had both equally health club house owners and customers telling us it was the most amazing factor that they’d at any time witnessed. It was trying to keep men and women in business. It was keeping users engaged with their health and fitness center. And it in the end ended up remaining a massive earn for all events involved simply because it assisted gyms retain and reward their users for their loyalty and it served customers get a pleasant reward card to manufacturers that they were being currently buying things from, and it aided us obtain a bunch of new buyers absolutely organically. The points that make O2 special are certain the product or service, but it is also the kind of points that we do for the local community and the styles of things that we rally driving as a smaller staff.
Knox: As a rising manufacturer, how do you stability your 3 distinctive retail channels of gyms, grocery and direct-to-customer?
Colina: Well, we have observed more than the years that they are quite complimentary. So luckily, there is definitely no channel conflict. What we see is that persons who buy O2 in their gymnasium, they are getting solitary cans on their way out as they get better from their exercise routine and head home. And that is a unique buy situation than individuals who are purchasing O2 on our web site when they are obtaining total scenarios of solution. And that is a unique buy situation than persons who are purchasing O2 at Complete Foodstuff or Kroger when they are up and down the aisle and see a special deal, or they are just thirsty as they do their grocery purchasing. It is the same type of particular person, but it is a very diverse use event. And we know that when our health and fitness center income are solid, near to a grocery retailer, that that grocery retailer is heading to advantage from it mainly because men and women explore O2 in gyms and they will acquire it there, but they will also obtain at the grocery retail outlet. And then the similar can be reported for online. Geographies in which our on the internet profits are solid, those people are the areas in which we win at retail and acquire in the fitness centers. So the channels are not so a lot conflicting as they are complimentary.
Knox: The beverage marketplace has constantly been fierce and aggressive. How do you see it evolving in the 12 months to arrive?
Colina: Well, we have been fortuitous in that we have gotten a good deal of reps in when it arrived to managing challenging cases top up to 2020. Like you mentioned, beverage sector is a actually aggressive space and we have by no means been a model which is been super effectively-funded or undertaking-backed, or a model which is acquired all these insane partnerships in position with stars. We are a fantastic old fashioned Midwestern brand. And we function really hard and we generate every thing that we get. Luckily, this year has been something where we have been in a position to flex our strongest muscle groups and get inventive and scrappy and resourceful when we had to. And I you should not assume that which is genuinely heading to alter considerably in 2021 possibly. I think that Covid has sort of leveled the actively playing discipline in a whole lot of methods for distinctive makes.
Just one issue which is going to be regular is that individuals are buying for foods and consume on the internet. And I do not think that’s going to adjust at any time before long. And which is some thing that we embrace for the reason that we know how to increase and keep our customers that way. We have developed our direct purchaser business, actually 10X from wherever it was past calendar year, which suggests we have 10X the contacts and 10X the relationships. This genuinely robust D2C business enterprise is now serving as anything of an incubation channel for us to exam new products. As we think about what the innovation pipeline appears to be like like, it is likely to arrive down to what we are good at and what we consider in as a model. Basically, we make a damn superior drink and we make items that are inside the practical hydration category, and that are cleanse and lifetime-providing products that flavor actually, really great. For instance, we a short while ago released a hydration combine, an on-the-go hydration packet that are very similar to O2’s recovery drink, but without the need of the oxygenated h2o. We know that our customer is on-the-go and the on-the-go hydration mixes out there just will not style definitely superior. That’s some thing that we assumed was a superior opportunity for us, mainly because like I mentioned, we can make a damn fantastic consume. We launched those people on Black Friday and the overpowering consensus has been, “Wow, this things preferences outstanding.” There are a number of other classes that we are psyched about in 2021, but at the end of the working day, we’re seriously listening to where by our clients want us to go and permitting them sort of chart that study course for us.
And the a person point that we are searching forward to viewing change is people today finding back again to the fitness center. We are not able to wait around for that to transpire simply because even while that has not been a enormous portion of our enterprise this calendar year, that is going to be a massive aspect of our organization upcoming calendar year. In the meantime, we’re heading to go on to do anything that we potentially can to help health and fitness center proprietors who have been negatively impacted by Covid simply because a person, we sense it is the suitable issue to do. And two, when their doorways are back again open, we’re going to be prepared to rock it out with them as their desired consume of alternative.