All-natural protein smoothie company Mix1 is on the verge of shutting its doors, just three months after the Hershey-controlled brand announced a broad redesign.
Boulder-based Mix1 – known by its corporate name as Tri-US — is 69 percent owned by Hershey. The company spent $5.8 million to acquire a 49 percent stake in 2011, and another $6 million in 2012 to purchase another 20 percent. The company had been due to close on the final 31 percent later this year but the company’s board of directors – controlled by Hershey — apparently decided to let Mix1 close instead.
Employees were informed of the state of the company on Wednesday and an announcement is expected from Mix1 on Friday; calls to CEO Brian Murphy were unreturned. Hershey spokesman Jeff Beckman referred questions about the business and decisions made by the company’s management and board of directors to Mix1.
The company suffered through a tough 2012, including an FDA-initiated recall of 18,000 cases of its 11 oz. PET bottles due to the discovery of yeast and mold in the drinks. But the company also had recently invested behind the brand, redesigning its PET packaging to better suit convenience and grocery stores, and had begun to roll out a sales strategy behind that package. It had also hired advertising agency Walton/Isaacson to help market the products.
The brand was started in 2006 by entrepreneurs Greg Stroh, Dr. James Rouse, and Wes Brasher and had received $6 million in backing from Highland Capital Partners in 2009 before its eventual sale to Hershey. During that time it went through several leadership changes, including the departure of Brasher and Stroh, and a year-long period in which Highland general partner John Burns worked as the company’s CEO and Chairman. Murphy came from Hershey’s health and wellness strategy group to replace Burns in July of 2011.
The purchase by Hershey had been expected to provide stability to Mix1, which had struggled to establish itself as a natural alternative to products like Muscle Milk. Mix1, while small compared to other strategic beverage acquisitions, was also expected to help provide Hershey a pathway to developing its own foothold in the beverage business, as well as a platform for further strategic expansion into the health and wellness arena.
The product, which was packaged in both Tetra-Pak and plastic bottles, included a unique mix of whey protein, antioxidants, and even olive oil as a way of providing a healthy recovery drink and between-meals snack, and quickly achieved national distribution in Whole Foods. But sales were unsteady as it fought to establish its brand position, and sampling and production costs were out of step with the sales growth, according to sources.
The company had brought on beverage veteran Kevin Conrad to help shepherd its new, rounded-off bottles into a convenience-focused DSD network.
Conrad said in November that he was aiming for $15-$24 million in sales in 2013.
