Money Australia - August 2019

INTERVIEW

GEORGE

FETTING

W

alkdowntheaisles
ofanysupermarket
orcheckoutdrink-
dispensingmachines
andyou’llseeplen-
ty of productswithbig-brandlabels.
Whetheryou’reaftersomethingfizzy,
a sportsdrink,flavouredmilk,juice,
iced teaorplainoldwater,chances
are you’llrememberthemakers’
namesfromwhenyouwerea kid.For
a challengerbrandlikeNexba,there-
fore, therearebighurdlestojump.
TroyDouglasandhisbrother-in-law,
DrewBilbe,setupNexbain 2010 withper-
sonalloansandfamilybacking,andtheir
drinkscannowbefoundinconvenience
storesandsupermarketsacrossAustralia.
Theyhavealsojustsigneda dealtosell
throughSainsbury’s,thethirdlargest
supermarketchainintheUK.Europe,and
perhapstheUS,beckon.Saleshavedoubled
in eachofthepastthreeyears,andthey
don’texpecta slowdownanytimesoon.
“Waybackwhenwestarted,wewanted
our productstobebetterforyou,”says
Douglas.“Weusedreducedsugarand
marketedthat,butwewerealsodeveloping
the abilitytobenaturallysugarfree.We
believedwecouldmakeanimpact.”
Nexbahasachievedthatgoal,now
sweeteningitsproductswitha formula
they inventedusinganextractfromthe
steviaplantanda glucosederivedfrom
cornorwheatstarchcallederythritol.At
a timewhensugaris increasinglyshunned
by consumersbecauseofitshealthimpact,
Nexbaclaimsanimportantedge.
However,it takesmorethannatural

sweetenersandzanyflavours– suchas

watermelon,cucumberandmint– toslay

shoppers.Peoplesimplyaren’tdrinkingas

muchsoftdrinkastheyusedto.

IndustryresearchgroupIBISWorldsays

thatsoftdrinkmanufacturinginAustralia

is expectedtohaveshrunkslightlyoverthe

fiveyearsended2018-19tomakeannual

revenueof$4.4billion. The two largest

players, Coca-Cola and Asahi, account for

nearly 70% of the market. Private labels,

while growing in popularity, have to face

the discounted pricing tactics used widely

by the majors. Despite these challenges,

IBISWorld concludes that private labels

will continue to reduce industry concentra-

tion over the coming years.

Douglas’ and Bilbe’s vision goes back

to when they were studying at university.

Bilbe got the idea while holidaying at a

hotsurfing spot, Rio Nexpa, on the Pacific

Coast of Mexico. The unique ice teas there

impressed him, so he convinced Douglas

to be his partner in a business to make

them in Australia. “I was studying law and

communications and working full-time in

marketing when Drew came back,” recalls

Douglas. “I always wanted to go into busi-

ness, so when he outlined the concept it

made a lot of sense. We could see that sugar

would become the new tobacco. It has been

a fascinating experience connecting and

reaching out to retailers.”

Their iced teas taste different and have

sleek and unique packaging. They opted

for tall, slim cans and imported their own

canning line to make them. Most of their

combined $400,000 initial investment went

into the canning machinery and, with the

help of friends and family, they cranked out

the first 100,000 units.

The drinks were stored in a warehouse

while they beetled around schools and

Gaining

an edge

STORY ALAN DEANS

First job, at 14, was making coffee at Gloria Jeans;

interrupted his law and communications degree to join

close friend Drew Bilbe in setting up Nexba. Invests

with his life partner in owning four units that are

rented through Airbnb; uses superannuation for

“more exciting investment strategies”. Has a

strict health routine of running on the

beach or swimming.

Troy Douglas

Co-founder of soft drink

maker Nexba. Aged 29; lives in

Sydney’s Bondi.

Fact file