Iris Nova, the beverage startup backed by Coca-Cola, has laid off half its workforce as the coronavirus wreaks havoc on direct-to-consumer and other companies.
The company, with nine drink brands including its flagship Dirty Lemon and organic iced-tea Minna, made the cuts as its retail and wholesale business took a hit due to the pandemic, CEO Zak Normandin confirmed to Business Insider.
"This was a very sad and unfortunate situation... not because of anything that has to do with the company, but obviously due to the circumstances that nearly every company is dealing with right now," Normandin said. "We lost some really great people and it's been a very challenging situation."
Nine employees were let go in total, with the impact spread across teams. No warehouse workers or drivers were impacted, said Normandin.
Iris Nova is best known for its text messaging-based platform that lets consumers order crates of drinks via SMS. While that business has grown in recent weeks as more people stay at home, its retail and wholesale business, which made up nearly 50% of its business, has taken a massive hit, said Normandin.
Like other DTC brands that expanded their brick-and-mortar presences and retail partnerships to get to profitability, Iris Nova opened a storefront called The Drug Store in New York's Tribeca and struck wholesale retail partnerships with restaurants, hotels, cafes, and bars.
With the store and a majority of those hospitality partners closing as part of the mandated shutdown of all non-essential businesses during the pandemic, the company has shifted focus back to its direct delivery business, which has become more important in light of the pandemic, Normandin said.
Iris Nova has a customer base of 200,000, and its DTC business has jumped 200% in the past week and a half, he said. Iris Nova also is hoping to grow revenue through its wholesale business with Walmart, whose stores remain open.
"We had a big wholesale business that basically went away entirely overnight," Normandin said. "So what we've done over the past two weeks is focus on cutting costs and driving revenue in some channels we weren't optimizing as well before."
Last year, Iris Nova announced plans to spend $100 million on expanding and launching new drinks and investing in outside brands that it would distribute. It's now reevaluating that strategy as it tries to mitigate potential losses.
"I wouldn't consider this a pivot; it's just a reaction to what's happening in the market that's outside of our control," Normandin said. "This isn't going to last forever. Coffee shops, restaurants and hotels — all the things that we enjoyed in our life before this are going to reopen."
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