Innovator Tosses Out C02 to Create Shimmering Alternative. Other Categories in Sight.

La Colombe Co-founder Todd Carmichael recently stepped down from his role as CEO of the company to spend more time with his newest venture, Rebel Beverage Labs. His first launch under that entity is Loftiwater, which he describes as a shimmering bottled water, rather than a carbonated or sparkling water. That’s because the bubbly water contains no carbon dioxide gas.
Carmichael, 58, is borrowing some of the skills that he and his long-time business partner J.P. Iberti developed while building La Colombe from Philadelphia-based coffee roaster, to café chain, to canned coffee disruptor. Carmichael was instrumental in developing La Colombe’s ready-to-drink Draft Latte, a “nitrous-infused” cold brew that seeks to replicate the texture and flavor of a hot latte with frothy milk. Last January, Molson Coors Beverage signed a 10-year agreement to distribute La Colombe products in convenience and drug stores.

DETAILS. Launched this month, Carmichael and Iberti call their newest product, Loftiwater, “the third water.” The term is an homage to the ‘third wave” coffee trend the two helped propel in the US with La Colombe. Loftiwater contains water, a proprietary blend of infused gas, and natural flavor. (Ingredient panels for sparkling waters such as LaCroix typically list “carbonated water” and “natural flavor.”) Loftiwater is unsweetened. Flavors are Lemon, Grapefruit, Watermelon, Black Cherry, Strawberry, and Peach. The product was offered online in 16-packs of 14-oz PET bottles for $23.99 ($1.50 per bottle) until initial supplies ran out. “When JP and I went live with Loftiwater.com we hoped people would love our bubble as much as we do,” reads a pop-up notice on the website. “Wow, the reaction blew our minds, and well, our systems too. Time for an overhaul!” The founders also are laying groundwork for initial retail distribution in hometown Philadelphia and in New York, while they evaluate immediate expansion to select northeast retailers. Longer-term plans could include DSD distributors, and warehouse delivery to national retailers, according to Carmichael, who recently spoke to BD about the Loftiwater launch and his process as an innovator.

The following Q&A has been edited for clarity and space:

BD: You talk about “protected beverage space.” What does that mean?
TC: I like to create products that are innovative to the degree that I can patent them and
give myself kind of a wall or moat for a period. It allows me to run with it and build it before I have to get in the ring with anyone. It’s not a knife fight right out of the gate. I did that with the Draft Latte at La Colombe -- creating a foamy beverage, or dairy beverage in a can.

BD: Is that to have time to build a brand or seek distribution?
TC: Not only build a brand, but to perfect the product, really get deep into the data. Things are done in a very methodical way because a brand is a tender thing. It’s spirit and it’s a personality and it needs to develop at its own pace and be thoughtful. And when you’re trying to get that done in a year before launch, you’re not really putting something together that represents a true personality.

“Farm kid who knew how to fix things.”
BD: You sent me a brochure for Loftiwater that shows a whimsical picture of you in coveralls fabricating a beverage bottling line. Are you naturally a tinkerer?
TC: I don’t co-pack anything, never have. I like to build the factories. I came up through
the early days of roasting in the United States of America. We’re talking the eighties, early nineties, brother. If you didn’t know how to weld, you weren’t a roaster. You needed to take charge of the mechanics. And we were inventing things. I started out life as a farm kid who knew how to fix things, and it was a big part of who I am. And that’s what I use to create the different beverages I do. I know how to imagine, and I know how to create it. And I oversee the construction of everything. The Loftiwater factory is done now, and there is no nut or bolt or weld that I don’t know what it is.

BD: You referred to Loftiwater as “augmented” water. What do you mean by that?
TC: With most water-based products, you strip it back down to H2O, and then you build it back up with the stuff you want in it. And that’s the augmentation process. Whether it’s mineralized water with electrolytes or with vitamins or whatever. For me, there’s different forms of matter that can be dissolved in this fluid. One’s solid, one’s chemical, which
we see both of those in soda and mineral water. And the third one is the gas, that’s the effervescence. And I focused on that bucket.

“Argon is a beautiful gas.”
BD: How do you achieve your bubbles? They are different than anything I’ve tasted.
TC: If carbon dioxide has a unique footprint on your mouth – it burns, it bites, it’s salty, it’s sour – I wonder if everything else has its own flavor footprint? If I took all the other gases that I can put in my mouth, I wonder what they taste like? You start with that curiosity. I isolated every gas that’s food grade. When you start blending them, there is an entire spectrum of possibilities. Then you ask yourself the question: How do I do that at 600 bottles per minute? And that’s where the work comes in. Let’s move carbon dioxide aside, and let’s start looking at different things. Argon is a beautiful gas. It’s food grade, it’s nice. It adds a creamy slick mouth feel. You go, ‘Ooh, I can blend that in.’ And you then start building your flavor. Then I inject [the gas blend] at high speeds, high pressure.

BD: Your water has a sweet flavor even though it contains no sweetener. How?
TC: Sweet without the consequences. There is a gap between something being sweet and being perceived as that way when it comes to gases. Just the way those bubbles are coming across your tongue. But there’s nothing chemically sweet in it. There’s a little bit of enhancement, but what I believe is happening is that when you drink something with carbon in it, there is a dampening effect that happens because of carbon. It takes the flavor, and it just mutes it because part of the messaging that’s coming from your mouth is going to a different area of your brain. You’ve got this certain level of amperage that’s being sent off to that piece of your brain to figure out what’s going on. Now, the other part of it is going to the gastronomic part of your brain. And so, you don’t get the full signal. What’s really happening is you’re just actually getting all of it and you go, wow, it’s so much more flavorful.

BD: You describe Loftiwater’s mouthfeel as having viscosity and fatness. Explain?
TC: Each gas is going to have its own natural bubble size. I can create a water that tastes thick like a syrup by injecting the tiniest nano bubbles that hold. And it just fluffs it, but
it tastes thick. And then I inject it with this type of bubble that pops, to remind you this
is popping in my mouth. And I gear all of that towards a bubble that’s sweet. You’re just engineering.

BD: When you describe Loftiwater’s mouthfeel as ‘shimmering,’ what do you mean?
TC: You’re going for no burn, no salt. I don’t want a high acid; I want low acid. I’m looking for a sweet, and I’m looking for a smaller bubble backed up by a nano bubble that kind of supports the structure. One that stays effervescent throughout the drink. And one that you don’t leave half of the drink.

BD: Have you experimented with energy drinks, or soda, or hard seltzer even, using your carbonation process?
TC: We have four or five versions of each one of those, and we believe that nothing’s ever finished, but they’re to the point where I hand them to people and say, ‘Try that.’ Naturally,
the first was a ‘hard’ version. That just goes without saying. You wouldn’t believe how many people I handed Loftiwater to and they go, ‘Oh my God, you should put some Titos in that.’ I’m like, ‘Dude, already did it. Are you kidding? That’s what we had for lunch yesterday.’ Because if you make something, you want to see what it can do. You want to take it for a ride. Some of them are very interesting. Vitamins taste disgusting. And once you get over a certain level of electrolyte, your body wants it, but it tastes terrible. Well, not when you gas around it. When that vitamin liquid comes across your tongue, it’s leaving a bed of metals on your mouth that lay right over your palate. But when you lift it on a bed of gas, it doesn’t.

“I don’t want to make things just for people who are well off.”
BD: Is it wildly more expensive to produce this stuff?
TC: I wouldn’t say wildly. I can’t just point and click and get the machines I want. They have
to be built from the ground up. Everything does. And a lot of the injectors and all this stuff is painstakingly created in 3D CAD, and we get the machines milled for us. There’s going to be pieces of it that you just can’t buy off the shelf. But I don’t want to make things just for people who are well off. If it really is winning the hearts and minds of Americans, then you’ve got to keep this stuff at a price that makes sense. I’m constantly engineering with that idea in mind.

BD: What is the retail price for a bottle of Loftiwater?
TC: SRP $1.99. You’re going to see it pop above that in convenience, maybe drug. And in mass, it’ll go way lower. I’m very sensitive to price. I did the same with the Latte. Let’s look at where I’ve got to land to be a responsible CEO, but then let’s look at my family. When I was coming up, could my family buy this? I’m not a Mercedes dealership here. I’m trying to make water for America.

“They don’t have drivers, man.”
BD: Your distribution plan initially is to go narrow and deep in Philadelphia and New York to start. Why?
TC: Remember Bai? [Founder] Ben Weiss just went nuts in Princeton, NJ. You couldn’t go
to church without getting a Bai. It was everywhere. As soon as you left the city limits, it disappeared. He went deep. And that takes a lot of discipline, and it takes a lot of work, but when it came time to move out, he had this success that he could share with other cities, and with those people whose cooperation he needed to do the rollout. I really loved that. I didn’t do that with Draft Latte. Instead, I went natural channel. And then high-end retailers like Wegmans and Publix. We looked at it per retail channel, and then worked wider until we got down to military and vending. We went really wide within channels. I like the idea of a hybrid of those two paths.

BD: What retail channels are you starting with?
TC: I like natural. Everything from Whole Foods to Ralph’s. We have really good relationships with them over a couple decades. They have confidence in us and our ability to execute. Then, in the early stages, in Philly and New York, there are a couple of regional retailers there that will pick us up. I’m really close with the boys over at Wegmans. I would never leave them out. They were the first people to ever buy from me, period.

BD: At what point would Loftiwater move to convenience stores?
TC: There are opportunities and we’re looking at them, but it’s a difficult time for DSD. They don’t have drivers, man. They’re living a really bad experience right now. I would look to continue these conversations over the next three or four months.

BD: You plan to create a fleet of trucks to deliver direct in New York and Philadelphia. Why?
TC: I did that back in the day, when it came to roasted coffee. I never did that for [RTD] beverage. But I think right now with the challenges in cities and delivery, you’ve really got to get your small van fleet going, and you need to get behind the wheel. And the way I’m talking to the distributors about it is, I’ll build it. You can have it later. This is the right way to do it, plus I really believe in relationships, and to meet the guy who made the product. I’m going to do ride-alongs until the driver is nauseated by me. It’s the reason why chefs are always standing behind the doors in their kitchen looking into their dining room. They’re looking for that reaction. The ride-along is that for us, to watch people consume, and to hear feedback and support. In 10 years, when you’re just telling stories, I want to have that as part of our arc, that the old guys were out slinging cases.

BD: You built La Colombe with help from beer distributors. Did you get more bang for the buck with them than with non-alcoholic DSD?
TC: It’s an elaborate framework, a mosaic. You’ve got to speak in average. They kind of average out the same. You just have different challenges. And a lot of these old school beer guys, it’s hard for them to move forward. You need to spend a lot of time telling them you’re not the enemy. That’s not impossible, especially for a guy who started selling coffee when Sanka was at the top of the food chain. Converting people is what we did.