With the recent success of young entrepreneurs like Mark Zuckerberg, Chad Hurley and Darius Bickoff behind fortune 500 companies like YouTube, Digg, Vitamin Water and Facebook, it’s no surprise that the movement has inspired a growing group of young, energetic, and self-reliant hopefuls that wish to attain immediate success and financial security.
The recent trend in the global entrepreneurial boom has contributed to the increased number of Millionaires in the United States. Meet Matt Llewellyn, a 23 year old entrepreneur from North Hollywood California. Llewellyn, a 2007 graduate from Pepperdine University is the CEO/Founder of Lluvia Bottled Water, the first all Spanish bottled water product sold and distributed in Los Angeles.
Matt Llewellyn’s moment of inspiration stemmed from a Marketing/Business course at Pepperdine University in 2005. The purpose of the course was to teach students how to effectively market an innovative product/service targeted towards a niche market.Llewellyn did much more than just think of a product. He developed and launched a brand that was so culturally relevant that it was the first bottled water to be labeled entirely in Spanish in Southern California. Because a large percentage of Mexican Americans prefer to purchase their household items in their own language, it made perfect sense. In America, bottled water makes up 17% of the non-alcoholic beverage business.
Llewellyn began his venture analyzing statistics, researching consumer purchasing habits and absorbing as much information as he could about Mexican American consumers. His first summer was spent prospecting Hispanic supermarkets, developing relationships with buyers and learning about the saturated market of the bottled water industry. Although the market seemed saturated, Llewellyn knew the per capita consumption was still on the rise.
In mid July, Llewellyn worked with one of the largest bottle manufacturing companies on the West Coast. A month earlier, Llewellyn worked closely with friend and associate, Charlie Edmiston, a graphic design artist from Pacific Palisades, California developing Lluvia’s company logo.
After months of trial and error, Matt was satisfied with the overall look of the product. In late August, Matt sent over the request order forum to produce 2,000 samples of water. Once the water arrived, Llewellyn wasted no time reaching the controllers, CFO’s, shipping managers and buyers from Numero-Uno, Villarta and Liborio markets, three of the largest Hispanic supermarkets in Los Angeles.
Weeks later, Llewellyn conducted a test market at Numero-Uno to evaluate the products performance. A 24-pack of Lluvia bottled water was listed at $3.0. Depending on the season, a pallet of water can sell out in four days. To the buyers’ surprise, Lluvia’s pallet of water was gone in less than two.
The success of the test market confirmed Matt’s presumptions about the need for an all Spanish bottled water product. Competitors from other markets began to notice and contacted Llewellyn about his new brand.After the test market was complete, Llewellyn pursued several major players at Western Grocers, one of the largest food/beverage distributors to Hispanic markets in North America.
Despite the overall success of Lluvia’s test market, several barriers prevented Llewellyn from reaching his goals. The bottling manufacturer Mr. Llewellyn was doing business with increased their prices, which meant lower profit margins for owners in the SMB sector. The cost to produce a bottle of water is minimal, but when you take into consideration the cost of production, distribution, product placements, slotting fees and retail markup, the slightest increase in margins makes a significant difference.
This was an issue Llewellyn was aware of, however; he was not prepared for the struggle to find a new manufacturer with similar prices. Llewellyn spent weeks researching small independent bottling manufacturers, but the profit margins were all to low. Llewellyn was left with no choice, he reached out to the biggest in the industry, Coco-Cola, Nestle, Niagara Waters and Crystal Geyser. He found that some of the profit margins were possible, but the minimum requirement of an order exceeded two-million 24-packs annually, which meant millions of dollars and lots of storage space.
After several weeks of research, Llewellyn spoke with several venture capital firms to finance his business venture. Matt spoke with several Executives from major venture capital firms all over the United States. Many companies wanted a large percentage of ownership, something Matt was not willing to negotiate.
Several months later, Llewellyn reached Inka Investments, a large venture capital firm based in South America. Inka Inc negotiated a multi-million dollar deal with Llewellyn in October of 2007. After weeks of debate, an agreement was finally reached. Llewellyn was offered a $2.1 million dollar deal, which included future stock options. The deal was finalized in exchange for the exclusive rights and marketing campaign of Lluvia bottled water.
Llewellyn is one of many young entrepreneurs that have reached an abundance of wealth and success in 2007. As for his future, he plans to attend Princeton University next fall to receive his MBA in Business Finance.
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