Sparkling Ice's Glowing Growth Story

How an also-ran beverage company became a supplier to watch

Published in CSP Daily News

SEATTLE -- In one of the great beverage stories in recent history, the maker of Sparkling Ice admits to a lot of hard work, but he also credits the fates. "You need the moon and stars to align to get growth like this," Kevin Klock, chief executive officer of beverage company TalkingRain, told Fortune.

In this scenario, the two things that lined up just right were Klock's management of TalkingRain's Sparkling Ice brand and consumers' changing drinking habits. The end result was the $337 million in sales that Sparkling Ice--a zero-calorie, carbonated water that comes in 17 flavors--recorded in the 12 months ending in April 2014, according to IRI, a Chicago-based market research firm. That's up from $2.7 million in 2009, according to the report. It was the second-highest grossing sparkling water company, behind only Nestle Waters.

In 2009, Klock was senior vice president of the company, but he was catapulted into the CEO role in May 2010 after the company's CEO, president and vice president of sales all left the company in a six-week span. After moving into the CEO role, Klock sought to address the company's slacking sales and decided to focus on Sparkling Ice alone. His rationale: "The brand had good margins and a strong following in the Northwest," he told Fortune.

That decision prompted a redesign of Sparkling Ice, using its top-selling Orange Mango variety as a prototype for what it wanted all its flavors to be in terms of bottle design, taste, color, smell and even the sound it made when opened.

But image wasn't the only problem that needed fixing. If Sparkling Ice was going to be TalkingRain's standalone product, the company needed to ramp up production to meet what it hoped would be increasing demand. By April 2012, sales of Sparkling Ice had reached $43 million, and that summer, the company expanded its manufacturing operations from one plant outside Seattle to six in the United States and one in Canada. This spring, it finalized its direct-store-delivery network, which is made up of Anheuser-Busch, Miller Coors and independent distributors.

And as sales of carbonated soft drinks wane, healthier--or perceived-healthier--beverages are reaping the benefits.

"Consumers want a healthier beverage that's not water," said Harry Balzer, chief industry analyst for food and diet at NPD Group, a consumer research firm. "I have no doubt that the drink of the future is water that's carbonated and flavored. I just don't know what brand it'll be."

Click here to read the complete Fortune report.