Vital Performance: Success by taking small sips

By GREGORY ZELLER //

One of Hofstra University’s most entrepreneurial thinkers is diving into the sports-drink market, and if Gatorade isn’t worried, it’s OK – that’s actually part of Allon Avgi’s master plan.

Avgi is a big man on campus these days, having led the team that won the $15,000 undergraduate-level first prize in the spring installment of the Hofstra University CPXi Venture Challenge. They won with Look, an app that digitally updates the age-old staring contest, with Venture Challenge judges saluting the team effort behind the app and its go-to-market strategy.

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Vital Performance co-founder Allon Avgi

Still basking in that victory, Avgi is now readying his next big thing: a high-end sports drink to be marketed under his Vital Performance brand, which is already carving a retail niche with a line of weight belts and athletic apparel.

Avgi – who co-authored the novella “In the Mind of a Young Entrepreneur” with writer Michael Gentile when he was just 18 years old – has already placed Vital Performance gear in LA Fitness health clubs and other retail outlets. And he has big ideas for his sports drink, though his goal is not to topple Gatorade or other top-selling sports drinks.

“The plan is to be one of the big players in the sports-drink category,” Avgi noted. “We want to be No. 3 on the list, behind Gatorade and Powerade, and to be the No. 1 high-end sports drink in the gym industry.”

Avgi cofounded Hempstead-based Vital Performance Inc. last spring with his brother, Anthony, the first step in a long-term plan leading to this year’s anticipated drink debut. The idea, he said, was to slowly integrate the brand with gym-based audiences via T-shirts and other apparel before introducing the beverage line.

“We weren’t going to just go into this industry blind,” he told Innovate LI. “We wanted to get some recognition first, with the logo and the name, and build a following on social media, so when the drinks come out people will already be comfortable with who we are.”

The innovator actually started formulating his beverage line two years ago, asking athletic-gear retailers their opinions on what’s good, and what’s not, about existing sports drinks. He took his findings to a professional “formulation team” at an FDA-approved lab in California, and ultimately came up with a recipe that incorporates “way more expensive ingredients than Gatorade.” And way less sugar.

Partially sweetened by stevia – a sugar substitute extracted from the leaves of the plant species stevia rebaudiana – Vital Performance beverages incorporate ingredients like coconut juice and include just 22 grams of sugar per 16-ounce bottle, about half of what comes in a same-sized bottle of Gatorade.

All told, Avgi self-invested about $30,000 to create the basic formula and get Vital Performance off the ground, including production and distribution deals with a Brooklyn-based manufacturer of men’s and women’s shorts and sweats and other apparel sporting the distinctive VP logo and “No Limits” tagline. He’s also struck deals with New Jersey-based flavoring and bottling companies, who will be ready to roll when the Avgi brothers finalize their distribution plan.

The cofounders are preparing to announce a deal with a major national distributor; Avgi is keeping the details bottled up for now, but said the gym crowd should expect to see Vital Performance beverages in regional clubs and retail stores by the end of the year.

“The plan isn’t to go mainstream in the beginning,” he noted. “We’ll be strictly in gyms and GNCs and vitamin shops, and we’re only going to distribute to the tri-state area at first.

“That’s the killer for a lot of beverages,” Avgi added. “They try to appeal to everyone instantly. You can’t appeal to everyone. You have to establish your niche.”

The entrepreneur is definitely interested in securing outside investments in his burgeoning beverage enterprise, but has experienced some frustrations. He’s in talks with angel investors – including Texas and California and on Long Island – but “they’re trying to take too much right off the bat,” according to Avgi.

“They all want an enormous percentage, after I’ve done all the work on this for the last two years,” he noted.

Avgi said he has enough funding to cover an initial production run – LA Fitness has already committed to ordering beverages for 120 of its regional smooth bars, he noted – comfortably so if he waits until winter, the sports drink off-season, when production costs drop by as much as half.

But if the drinks catch on – and that’s the hope and plan, of course – Vital Performance Inc. won’t have enough cash on-hand to keep up with demand, and “that’s unfortunate,” Avgi noted.

“There’s so much potential at this early stage,” he said. “Say it really sells well at LA Fitness and they demand another 12,000 cases. I’m not going to have the $144,000 to put up front.

“If demand turns out to be higher than what we can afford to supply, we’re going to lose out on all that potential growth.”

The brothers are still hopeful of securing investments at a more reasonable rate, and Avgi noted talks with a group of Texas-based angels that may be willing to buy in at a low enough percentage to make a deal fly. But whether or not investors sign on, the plan is to start circulating three flavors – Lemon Lime, Tropical Force and Blue Raspberry – before the end of the year, at a price point of about $2.50 per bottle.

In fact, Avgi and his brother – the only other crossover from the successful Look team –  are already planning a fourth flavor: Red Rush, which according to Avgi will have “a touch of caffeine,” making it more of a “jumpstart beverage.”

If the brothers are ambitious, they’re also measured – as evidenced by their slow-and-steady approach to formulation and marketing, and their unwillingness to sell out to investors eager to take too big of a gulp.

“Once we’re ready to go national, we’ll hit it hard with a ton of distributors and go mainstream as hard as possible,” Avgi said. “But we’re definitely going to establish that niche first. Vital Performance is going after a target that I don’t feel has been sought after yet.”

Vital Performance

What’s It? Healthier, high-end sports beverages

Brought To You By: Cofounders Allon and Anthony Avgi

All In: $30,000, self-invested, covering formulation, trademarks and logo and bottle design

Status: Stay thirsty, my friends. It’s coming soon


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