In a sea of functional beverage trends, powdered drink mix startup Fave is going back to basics with its better-for-you flavored blends which landed the brand in 500 Sprouts Farmers Markets nationwide and garnered a $1 million seed round.
Fave’s seed round was backed by Supernatural Ventures, which previously backed early-stage funding for CPG disruptors Poppi, Goodles, Bachan’s and Siete Foods.
Fave’s Founder and CEO Ryan Raish is a CPG executive with 20 years of experience, who helped build and scale better-for-you brands like Guayakí, Honest Tea, popchips and Chloe’s Pops. Within the crowded functional beverage space, Raish identified an opportunity to create the flavor-first Fave drink mix made with organic ingredients.
He says that while functional beverages “are doing an excellent job serving their target consumer,” the “everyday beverage category” has yet to evolve.
Fave’s powdered drink sticks are what the company describes as a modern alternative to conventional powdered beverages. Each 0.27-ounce stick is USDA Organic certified, Non-GMO Project Verified, contains 6 grams of organic sugar cane and is devoid of artificial flavors and colors. The lineup is available in four flavors: Lemonade, Strawberry Lemonade, Fruit Punch and Tangy Orange.
Fave’s funding will support retail expansion, e-commerce growth, marketing, inventory and growing the team, in addition to increasing retail velocities.
“The goal isn’t simply more distribution, it’s building a brand with lasting consumer demand,” Raish emphasized.
Why investors backed Fave
What drew investors to Fave was the opportunity to develop the clean-label drink mix category within the natural channel and a better-for-you alternative in conventional grocery and mass retail, Raish explained.
He points out that he spent nearly two years developing all aspects of Fave from packaging, supply chain and funding. Prior to the seed round, Fave was selling on Amazon, Thrive Market and QVC and recently landed in 500 Sprouts Farmers Market doors nationwide
Raish’s experience, preparation and proof of scale made the brand “retail ready with real momentum” and not just an idea when he connected with investors, he said.
Fave raised a pre-seed round last year through The Angel Group, which Raish says gave him the chance to “demonstrate what Fave and I could accomplish with limited capital.”
“My background gave investors additional confidence. I’m not the typical first-time CPG founder. … I understood what it takes to launch successfully, build meaningful retail partnerships and execute over the long term. That combination of category opportunity, consumer validation and operating experience resonated throughout the fundraising process,” Raish said.
Fave’s aim to modernize a legacy category with limited innovation was a differentiator for investors, Raish said.
“Investors spend a lot of time evaluating emerging beverage brands, and one comment we heard consistently was how refreshing it was that Fave wasn’t another functional or ‘super’ beverage,” he explained, adding that investors in functional beverages didn’t want to back another competing product.
“More importantly, they shared our long-term vision that flavor is timeless,” Raish said.
One question investors raised about Fave was whether consumers were willing to buy a better-for-you drink mix “traditionally dominated by low-priced legacy brands,” he explained.
Raish says he addressed concerns by showing strong repeat online purchase rates, growing retailer interest and landing the Sprouts launch, underscoring that consumers are open to trading up for a premium product that delivers on taste.
Why powdered beverages are ripe for innovation
Gleaning insights from consumer panels, conversations at tradeshows and category trends, Raish identified a core message: Not every drink needs to be functional.
“People wanted something they could enjoy throughout the day, a fun, great-tasting drink for the whole family without wondering if they’d had too much caffeine, too many adaptogens or another functional ingredient,” he said, noting that the market has room for both functionality and simply flavored beverages.
Raish points out that despite the size and growth rate of powdered drink mixes, the category has largely been left untouched in terms of innovation compared to RTD beverages.
“The format offers tremendous advantages: it’s lightweight, affordable, pantry-stable, sustainable to ship and allows consumers to mix exactly what they need,” he said.
Powdered beverages are ubiquitous within convenience, but Raish sees the category expanding into “a platform for premium, clean-label products,” exemplified by Fave’s ingredient deck and certifications.
Fave aims to create an innovation platform “across multiple product occasions over time,” Raish added.
