Dive Brief:
- Closed Loop Partners recently announced an investment in startup Aerflo amid its launch of Aer1, a portable system for sparkling water. It features a refillable bottle that carbonates water via a reusable CO2 capsule with the press of a button. Consumers return and replace those cartridges by mail using their original packaging and a pre-affixed label.
- Aerflo projects that a 12-pack of its carbonation capsules can displace 67 12-ounce cans or 40 20-ounce bottles. Each reusable capsule, which can carbonate four bottles’ worth of water prior to replacement, can displace more than 330 cans in its lifespan, the company estimates.
- CLP, which helps finance efforts to grow a more circular economy, did not disclose the size of its investment. Aerflo raised more than $10 million in venture capital with rounds led by Lerer Hippeau and Torch Capital, with additional investment from Amity Supply, Good Friends, SWAT Equity Partners, WISE Ventures, Bluestein Ventures, RiverPark Ventures, Palm Tree Crew and others, an Aerflo spokesperson said.
Dive Insight:
The sparkling water market has been a noted source of beverage business growth for packaging companies like can-maker Crown Holdings. Closed Loop Partners cited market research projecting a compound annual growth rate of 12% for sparkling water in the U.S. between 2023 and 2032.
As sparkling water’s popularity has risen, packaging innovation hasn’t necessarily kept pace. For sparkling water fanatic households, this can mean disposing of dozens of single-use beverage containers weekly to enjoy their favorite drinks.
CLP says that over the past decade, it’s reviewed hundreds of reuse models through its Closed Loop Ventures Group and its Center for the Circular Economy. Earlier this year, it released research conducted with the U.S. Plastics Pact into consumer sentiment around reuse and how to make it a habit, which found convenience and design appeal as among the most important factors. Reuse remains a vast frontier for big brands; the Ellen MacArthur Foundation reported last year that only 1% of major brands’ plastic packaging is reusable.
In a statement Thursday describing the rationale behind its investment, CLP acknowledged other sparkling water innovations over the years, like SodaStream, which PepsiCo acquired for $3.2 billion in 2018. “But for consumers who want sparkling water on the go, single-use has been the only option,” wrote CLP’s Danielle Joseph, managing director and head of Closed Loop Ventures Group. The Aer1 bottle enables consumers to carry around either still or sparkling water at any time.
Aerflo launched in late August for preorder. The upfront Aer1 system is priced at $99, and its capsule replacement packs are priced at $25. They will be available for online purchase in early October. Aerflo’s operations are based out of New Jersey; its facility cleans, inspects and refills the capsules.
Asked about the higher upfront cost of sparkling water through Aerflo, Joseph noted that Aerflo drinkers don’t need a subscription or commitment, and it offers better value on a per-liter basis than bottled carbonated water.
