Q&A: The sweet taste of sugar-free success

This week we chat to Troy Douglas, CEO and Co-founder with Drew Bilbe of Nexba. Voted Telstra Micro Australian Business of the Year in 2015, the company’s naturally sugar-free drinks are about to hit the shelves in over 500 of Sainsbury’s large-format supermarkets in the UK.

ISB: What was the inspiration behind starting a business producing naturally sugar-free beverages?

TD: My brother-in-law Drew was studying abroad in Rio Nexpa, Mexico when he noticed the huge impact that soft drinks (specifically both sugar and artificial sweeteners) were having on increased rates of diabetes and obesity, especially in children and low socio-economic communities. Upon returning to Sydney, he hit me up with his idea and Nexba was born!

We had a vision to create naturally sugar-free beverages that contained no sugar and nothing artificial. We are on a mission to tackle diabetes and obesity by being Australia’s “naturally brave” brand delivering naturally sugar-free innovation to the world.

ISB: How have you funded the setting up and growth of the business?

TD: Nexba was bootstrapped for the first six years, with lots of effort going into building strong foundations and processes to support innovation and, recently, international expansion. We initially invested about $500,000 of our own money in the first few years of Nexba’s operation and took out two mortgages between us to fund the business before scoring our first major contract with 7-Eleven.

After having landed our first international retailer with Sainsbury’s in the UK we are finalising our Series A round of $6 million drawn mainly from private investors whom we are proud to call our Nexba Legends. They offer strategic advice that supported our business and brand acceleration as we transitioned from start-up to scale-up.

ISB: How have you managed to make Nexba consistently stand out in such a competitive market?

TD: We launched Nexba from a genuine belief that we could help the everyday Aussie make a simple lifestyle change which could help drastically reduce their chances of developing diabetes or becoming obese by swapping sugary soft drinks for great tasting naturally sugar-free alternative.

Since our inception the market has obviously become much more saturated but we combat this through constantly innovating and the fact Nexba has a proprietary Natural Sweetener blend. Myself and Drew are both experimentalists at heart and we love to push the boundaries when it comes to flavours and product innovation. We now stock naturally sugar-free ranges of soft drinks, sparkling water, tonic water and more functional ranges including kombucha and probiotic waters, with some exciting new launches on the horizon for 2019!

ISB: You’ve recently won a deal with one of the UK’s leading supermarket chains – what was the trigger for focusing on that particular market?

TD: Richard McNeil and the Sainsbury’s Future Brands team believe in our market leading position, and Nexba strongly resonates with the sugar-conscious UK market; a recent Nielson study revealed that reducing sugar has become the UK’s leading healthy eating concern with 42 per cent of 25-34 year olds specifically looking for sugar-free household products.

The UK was particularly on our radar after the introduction of the soft drink levy in April 2018. The levy has already seen a rise in artificial substitutes as brands seek quick fixes to maintain ”sweetness” so we saw a natural market gap here to bring consumers a product that wasn’t simply replacing one bad thing with another.

ISB: And what was the biggest challenge you faced in transforming your brand from a domestic one to an international concern, and how did you overcome it?

TD: Our focus has been on proving the brand in Australia. The last nine years have been the tough years, but the next phase, from start-up to scale-up, is the exciting time as we continue to accelerate growth and find the best way to scale internationally. All I can say is what this space – it is a no brainer that every category that is either high sugar or artificial will end up having naturally sugar-free alternatives. This is what excites us and motivates us to find the most appropriate pathways to share our Australian brand and innovation to the world.

ISB: Finally, what is the #1 piece of advice you’d give to those who are considering starting their own businesses?

TD: Start your business for change – not money. Success in business requires relentless passion and perseverance. Peter Baron, whom Drew and I call the Nexba Godfather, instilled in us that success is the by-product of doing business right. If it’s clear you’re in it for the wrong reasons you won’t appear authentic…integrity is everything to maintain the support of your clients, customers and, ultimately, the people you want to fall in love with your brand.

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