Cans is a Czech Republic-based soft drink start-up that has built its business model on the building wave of health consciousness among consumers and, particularly, the interest in no-added-sugar products.
The business was set up in 2023 by Jaroslav Beck, Jan Rambousek and Dominic Rice, a former Red Bull executive.
Outside its home market, the Prague-based company sells in Slovakia and Germany. Last month, Cans entered the UK and the group is lining up a trial launch of its beverages in three US cities in May.
The company, which markets three flavours (apple, cherry and lemon), employs around 60 people.
Eighty per cent of Cans’ sales come from a combination of on-premise and off-premise sales and the remainder from e-commerce.
The business sees a particular opportunity in the e-commerce channel and is, for example, selling through Amazon in Germany, as well as via its own website.
By the early part of this year, Cans had, since it started, sold a million units. It does not disclose revenue and is yet to turn a profit.
Just Drinks sat down with Rice, Cans' CEO, to discuss the company’s strategy to stand out in a crowded market for no-added-sugar soft drinks and its wider expansion plans.
Eszter Racz (ER): Where are your products available at the moment?
Dominic Rice (DR): We have quite a broad distribution in terms of the types of outlets. We are present in grocery stores, large-format stuff, all the way down to more bio-focused small supermarkets. We're in petrol forecourts and in convenience stores, so we are there in every kind of every channel where you would expect to find a Coke or a Diet Coke. We are also in coffee shops, bars, restaurants, offices and schools as well. We are just trying to broaden distribution because our mission is about to give people choice.
We are available in big supermarkets and in Costa Coffee in the Czech Republic, we are present in [supermarket chain] Albert in Slovakia. We are in Starbucks in Slovakia and about to launch there in Germany, We are available in some online retailers like Rohlik, which is like the Ocado of the Czech Republic.
ER: Why did you choose the UK and the US as your next targets?
DR: We think that if we want to have any impact in terms of helping to reduce the overconsumption of sugar and sweeteners, we have to be in the biggest markets. And the biggest markets are the UK, the US and Germany, at least in the Western world.
We're going to have the chance to help build the category of non-sweet drinks, which we think, in people’s minds, doesn’t exist yet and it’s always the US and the UK in particular that tend to lead the world in FMCG thinking. It's not just about having a practical impact in terms of consumption. It’s also about ‘thought leadership’. We have to help to create that in the UK and the US, otherwise it will be harder to create this movement. We hope people will join us on that because we can't do it alone, the trendsetting aspect of it. If it becomes bigger in the US and the UK then you tend to see that the rest of the world eventually follows.
ER: What sweeteners do you use?
DR: We have concerns about sweeteners. We have this whole category [no added sugar drinks], which is talking a lot about diet, and ‘zero calories’ but there are studies that show when you drink those things you don't lose weight. You actually put weight on. I'm not an expert but I'm just saying: is it really the right thing to do? We use real fruit in there. There is a tiny bit of sugar from the real fruit and it's extremely low. It’s less than half a gram in a whole can.
We are really just focused on the essence on the flavour front. You get the smell, which is nice, but you don’t necessarily have so much in taste. But I would say that it's not sweet at all compared to if you drink a sugar-sweetened beverage. Whenever we talk to consumers, we explain to them that it’s not sweet at all, otherwise they will assume it’s going to be sweet.
ER: The UK and the US are particularly competitive in terms of better-for-you options and low-sugar beverages. How is Cans going to stand out?
DR: I think we're the only company talking about a non-sweet category. We're the only ones really with the mission of trying to reduce the overall consumption of sugar and sweetness and create a product that has nothing in it that can kill you or harm you. So that's one thing.
In terms of our current range that we're launching with, I think they're quite similar to [drinks brand] Dash in the UK. Ultimately, if we are going to make a difference, we need to offer options that are non-sweet across different occasions or usage functions or whatever it’s going to be. Something I say to the team is that ultimately want to kind of be the Coca-Cola of non-sweet drinks. They have both categories, artificially sweetened and regular sweetened, and they have an offering across multiple subcategories.
And if we're going to succeed in the long run, that's also what we need to do. We're very much already in the process of developing a lot of other drinks so that we are offering different options across different subcategories. People will hopefully start to understand that Cans stands for a certain quality but also the non-sweet aspect of it.
Right now, we're very product focused in our communications, which is deliberate because people don't know who we are, and don't know what product it is, so we need to generate that basic understanding. But we'll try to stand out as a brand as well in terms of what we do and how we do it.
ER: Where do you see your main growth opportunities?
DR: There's a lot of brands who historically have broken through in one particular channel, or sort of owned it and dominated it, and then used that as a basis for their success. Our approach is really not to think of it in channel terms. Our approach is really to think about it in terms of where our consumers are? It's been really interesting to try to find targets. Because it’s for everybody.
Where the products are available, we see, if you look at age, if you look at some of the typical targeting metrics, to see what sort of people love our product, it’s not really about those things. It’s more like a psychographic profile of somebody who is really looking for an alternative, who is thinking about their health and trying to balance their intake. We try to focus on where do they spend their time, where do they shop and try to start there in terms of where can we find them. That means you can end up in kind of any channel.
Ultimately, our long-term ambition is to be available but in terms of starting it's really about finding the right partnerships in trade. There will be certain businesses who will be the right fit in terms of who their customer base is and who really want to work with us. Often that's the best way to start. Sounds simple, like, you go to where the water is flowing but we really try to find where the consumer is and try to be there, both in terms of marketing and distribution.
One of the things I’m really careful with the team is that demand and product availability are in sync
In the beginning, even if we have the best launch campaign in the world, our penetration in terms of market awareness will be like 1% right? It takes time to build consumer awareness.
I think in the Czech Republic, after 18 months we probably have general awareness now. It’s at 10% which is great, but on day one, we had zero, so it's really important to grow the awareness of the product in line with distribution.
I see it time and time again, where people walk through the distribution door simply because they can but they don't have the marketing, they don't have the consumer base to back it up. Then you end up in this cycle of “we need to push sales”, so your only levers in that situation are promotions like display, which can work, but are not necessarily the tool to build a health brand from a price and value perspective long term. One of the things I’m really careful with the team is that demand and product availability are in sync, because if they go out of sync, either way, you start to have problems, which are hard to recover.
ER: Can people order Cans’ soft drinks from your own website?
DR: Yes, we have almost over 1,000 subscribers already. People who subscribe get an average of two cases every three weeks. There are different roles for subscription versus physical supermarket distribution in-store. There is home-stocking and there is impulse shopping. I don’t think there is a major overlap between the two but we find that one tends to grow the other in terms of consumption. When I’m home, I don’t plan very well in terms of how my day is going to go when I’m out of the house. In a perfect world, I could take some cans from home and I could plan that I’m going to drink those but that’s not realistic. And anyway, it wouldn’t be cold, right?
ER: How do you price your drinks?
DR: We don't want to be overly premium, I would say we want to be sort of premium but affordable. The margin build-up is really driven by the channel, rather than us, who is selling the products at the same price. From memory, I think we're targeting £1.39 in the UK. [Cans' drinks sell for Kč31.90 in the Czech Republic, €1.39 in Slovakia and Germany].
ER: Are you planning to expand anywhere else than the UK and the US in the next 24 months?
DR: We have a lot of work with those models, and in an ideal world, of course we would, but it would be impractical. We need to give the UK and especially the US the attention it deserves. These markets are long-term projects for us, so we really have to focus on them.
ER: What do you have in the NPD pipeline?
DR: We are launching new flavours and new types of products, which I can’t tell you about yet.
JD: What funding has the company had so far?
DR: So far, everything was financed by the founders but that will change. We have quite aggressive expansion and the FMCG model requires a lot of investment. So you can imagine, we are scaling up in the UK, Germany and the US, so we will need to do some fundraising towards the end of this year.
"“We want to be the Coca-Cola of non-sweet drinks” – Cans CEO Dominic Rice" was originally created and published by Just Drinks, a GlobalData owned brand.
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