Anything But Disposable
It’s true what they say: A good idea can come when you least expect it.For Ken Kreafle it was while catching his breath from lugging another 24-pack of bottled water up three flights of stairs to his home. He and his future wife were buying several big packs a week.
He considered the effort, waste, and cost, and thought, “There’s gotta be a better way than this.”
That was in 2006. Almost twenty years later, that initial thought has become Reduce® reusable water bottles. Based in Atlanta, they’re a major player in a highly competitive category and found on store shelves around the world.
“When I started the company, drinkware wasn’t nearly as big as it is today,” says Kreafle.
But Kreafle was no stranger to the business. He had worked in product development and as a buyer in the drinkware industry for many years. “I knew I could make a pretty good impact with my background,” he says.
Getting It Off The GroundInitial capital came from an SBA loan with a large bank and funding from a factory in China where he had a strong relationship. The factory owners gave him seed money, with an exclusive deal to produce there. Relationships like this would prove vital to Kreafle’s success.
As with many new ventures, times were tight as first. Kreafle had left his previous job to focus on starting the business. He recalls, “It was a very shoestring operation, I would go to China and stay at youth hostels basically and look for something that I could bring to market that I thought was new and different.”
First Sip Of SuccessHis first product was a hydration system called Waterweek. It was a container for the refrigerator holding five water bottles, one for each workday.
Kreafle developed other products and had good initial success, landing a large retail account in Canada.
But the breakthrough came when he developed the Reduce water bottle. “I saw a void for fun functional, stylish drinkware in the market.”
While other players were coming in at higher prices, Kreafle saw his opening. He sees Reduce’s success as, “Really good quality at a really good price. The value is there, and we think of value as you get a lot for your money.”
Retailers agreed. Kreafle’s strategy of selling to big box retailers first instead of mom-and-pop stores paid off. Along with a stylish, well-made product, his relationships with buyers were helping him make inroads.
“People knew me and trusted me. I’ve grown the business heavily on that. People would put their faith in me, along with the product. I think that’s really helped us grow.”
While his relationships were steadily helping place more bottles on the shelves of retailers like Costco, Kroger and Target, Kreafle’s relationship with his bank was souring.
A Needed ChangeKreafle’s company used a large bank for the first six years, which he described as, “completely transactional. I couldn’t even find anybody to connect with.”
Having weathered a couple of tough financial stretches, Kreafle knew a change was crucial to keep his company strong. His search led him to SouthState.
The difference was noticeable. Kreafle says, “Everything changed when we went with SouthState. There was an immediate understanding of the business.” His reaction was, “Wow, this is what I’ve needed for a long time.”
Kreafle also credits SouthState with better communication and being a real partner for his business. The SouthState team provided SBA financing with a long-term working capital loan to free up cash for other uses. The new capital allowed Reduce to take some important steps. The SBA team then introduced Kreafle to Grady Kendrick, SVP, Commercial Banking Relationship Manager. With Kendrick’s assistance Reduce was able to obtain additional growth capital through a conventional line of credit.
On the relationship with Reduce, Kendrick says, “They’re really an open book to us, which helps us provide the right products and services to them.”
In an industry that demands innovation and trend setting, Kreafle and Reduce stay out in front. And he sums up the importance of working with SouthState for his success, “The relationship has been huge.”