With a focus on flavorful, healthy beverages and on-the-go snacks, Yanni Hufnagel, CEO and Lemon Perfect founder, already had his eyes on the future in 2017. But a chance photo by pop star Beyoncé Knowles-Carter posted to social media took the brand from growing to a top market hit in 2020. Developed as a hydrating but flavorful lemon water option, Hufnagel’s focus on creating a keto and sugar-free option for popular consumption is on the fast track to outstanding financial success.
Beyoncé, known for her healthy lifestyle, had a bottle of her favorite Lemon Perfect flavor in her limo door when she took the now-famous photo. The dragon fruit mango bottle quickly soared across social media as Yanni Hufnagel had his beverage brand thrust into the limelight. “She had posted a photo with it in her limo, and all of a sudden my phone blew up,” Hufnagel said. “We came to learn that she was an authentic fan of the brand. A year later, one of our investors was in her house and saw her stash in the fridge and helped us build the bridge with her. It is beyond my wildest dreams to have someone of her influence being a fan of the brand.”
Building investor interest in a beverage venture is not always easily achieved. Fortunately, the pop star’s bottle of dragon fruit mango Lemon Perfect has helped promote the brand immensely. Rather than a coincidence, the superstar has a genuine love of the drink. “I don’t typically enjoy drinks without added sugar, but Lemon Perfect is delicious,” stated Beyoncé Knowles-Carter, “It was an easy decision to invest in something that not only tastes great and is healthy, but also, and most importantly, allows choosing a healthier lifestyle to be affordable and accessible to everyone.”
In its recent $31 million Series A round of investment, which includes not only Knowles-Carter but also Goat Rodeo Capital, Beachwood Capital, Melitas Ventures, Trousdale Ventures, and NNS Capital, Lemon Perfect has plans to continue competing with other beverage sector. Favorites such as vitaminwater, hint, and Bai have inspired Yanni Hufnagel, who as a former coach had often seen his basketball players drinking these beverages in the locker room. The University of Nevada, Reno basketball coach had also received a draft of a Keto diet book containing several lemon water recipes. Seeing the potential to enter the market using the same foundation as Bai, a no-sugar low-calorie beverage, Hufnagel started his Atlanta-based business in 2017.
The multi-billion dollar enhanced water beverage sector was ripe for new flavor and has projections of 9 percent annual growth for the next five years. In addition to dragon fruit mango, Lemon Perfect also comes in lemon, peach raspberry, and blueberry acai flavors. With a mere five calories while supplemented with potassium and vitamin C, the brand stands alone along with its complete lack of artificial flavors, sweeteners, and added sugar. “Nothing with our flavor and health profile is on the market today,” Yanni Hufnagel stated. “Our price point is at where a consumer anywhere and anytime can become a customer. It is very rare that you can have a total addressable market like we do.”
The new round of investment combines $16.5 million of an initial round as well as a $14 million extension funding, providing Lemon Perfect with total funding of $42.2 million and a valuation of over $100 million. The new funding was pursued to fuel growth. The brand was poised to scale to over 40,000 distribution points at the end of 2022, representing growth of 15,000 additional distribution points that include online as well as brick-and-mortar retailers and the need for a larger sales team.
Following Beyoncé’s 2020 post, Lemon Perfect quadrupled revenue to $21 million, with projections of $60 million in retail sales in 2022, a total growth of $35 million. Yanni Hufnagel anticipates doubled revenue in 2023 with a related boost in workforce from 38 to 70. “Beverage is an expensive game, and access to capital is the only way to drive a fast-scaling brand forward,” Hufnagel stated in a recent interview. “We want to be a disruptive player in a large category and want to put fuel on the fire. We felt like we were able to drive great execution, but still have room to grow and want to build a big margin story for tomorrow.” With backers like Beyoncé, Lemon Perfect’s future is certainly promising.
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