Bend startup Altitude Beverages is at an important crossroads.
The growing company has found a product line that resonates with consumers and sees big distribution opportunities in the second quarter of this year.
Founders Thomas Angel and Laura Melgarejo Silva are now deep into fundraising to raise a pre-seed round to get the company to the next step.
“We started with $20,000 when we moved to Bend (to start the business). Once we saw the market fit we went all in, we put every single penny we had into this,” said Angel, noting that he got conflicting advice on whether that was a good idea. “I don’t know how else we could have done it. We don’t come from money.”
Altitude makes a line of what are called “functional beverages.” These are drinks that contain different supplements. In the case of Altitude, the company’s drinks contain CBD and super foods including mushrooms like lion’s mane, chaga and reishi and spices like turmeric.
The company makes three versions of its Everything Latte as either nitro cold brew coffee, nitro matcha green tea or nitro chai tea. All three contain oat milk in addition to CBD and the other supplements. They have also rolled out a line of non-alcoholic mocktails that also contain CBD and other supplements. All products are gluten-free, non-GMO and plant-based.
The company launched in June 2021 and is sold in 650 retail locations including the Sprouts Farmers Market chain and Market of Choice. The startup uses three different contract manufacturers to make the product.
Last year, the company had about $300,000 in revenue and this year it expects to hit $1.4 million to $2.2 million if it can follow through on a couple of big partnerships.
Which is where the current fundraising comes in.
Angel and Melgarejo Silva have made the funding rounds in Oregon and found some investors. However, they have also learned that as a consumer packaged goods company they need to look in other places like California and New York.
“We are in a stage of no longer being just an idea. We have revenue and traction and retailers but we aren’t $5 million in annual revenue so traditional VC funds or private equity (aren’t ready to) come in,” Angel said.
Their plight of having success but not enough capital to push even further is a common one in food and beverage manufacturing. Last year, the duo raised a small friends-and-family round to cover the purchase order and marketing that went along with the Sprouts deal that got them into 200 stores.
Angel and Melgarejo Silva, who are married, moved to Bend in 2020 to start the business. They had been in China for Angel’s job with Boeing for the previous two years. The couple were supposed to be in China for five years, but when the coronavirus and the pandemic emerged they came back to the U.S.
What they found when they got back, were friends and family who were enthusiastic about adding supplements to their diets and CBD to anti-inflammatory regimens.
“This was like my mom, not the friends on the crystals spectrum. My 67-year-old mom is taking CBD everyday for her tennis elbow,” Angel said. So they decided to try it too.
They worked adding CBD and other super foods to their morning coffee routine. They ended up concocting a drink that also contained oat milk and agave and they found tasted really good, he said. At the same time, he saw an opportunity that could scratch the entrepreneurial itch he has had for some time.
The couple are fans of "Shark Tank," and Angel was involved in Startup Weekend events in Seattle, even winning one in 2014. But, he wasn’t in a place to pursue those ideas. Fast forward, and he had years at Boeing under his belt and Melgarejo Silva was a software developer and they had some money saved up, he said.
The couple has found support in the beverage manufacturing community in Bend which is home to dozens of breweries, Humm Kombucha, Riff Coffee as well as Sisters-based Laird Super Food.
“There are a lot of people with experience and insight,” said Angel. “And because it’s Oregon, people are nice and generous with their time.”
