Why Caribe Decided to Invest in Their Own Manufacturing
Caribe, a cold-pressed juice company started by an MBA student at the University of Virginia , has grown quickly since launching in 2015. Luis, Caribe’s founder, set out to bring the delicious flavors of the Dominican Republic, that he grew up with, to the United States. In just a few years, Caribe has expanded nationally, including in WalMart and internationally into the Dominican Republic.
While Caribe, as with all businesses, has made many pivots, undoubtedly the most impactful was shifting from a co-manufacturing in the United States to building their own production facility in the Dominican Republic. Why was this a catalyst for Caribe’s success? Read below to find out!
Cold-pressed juice, like what Luis grew up with, is challenging to sell in stores because of how quickly it goes bad. Luis had two choices: invest in expensive high-pressure-pasteurization (HPP) machinery to extend how long the juice stayed good for or look into a co-manufacturer. Luis decided to outsource the entire juice process, from recipe blends through packaging and shipment, to a co-manufacturer. What Luis didn’t realize was how a co-manufacturer would impact his product and that incredible taste he grew up loving!
The co-manufacturer pushed Luis to modify the recipe closer towards what other clients making juice were doing. This optimized the process for the co-manufacturer, but not for the quality of the product. The juice turned into something very different than what his mother made growing up or what consumers indicated that they wanted during the initial launch, and the co-manufacturer began dramatically increasing costs on short notice.
Luis lost a lot of money and was dropped by a number of accounts. Furthermore, he was making less and less on each unit he did sell. Caribe was not sustainable in the current arrangement and was on the verge of going out of business.
At this point, Luis needed a hard reset. He had to take back control of his manufacturing. After interviewing a couple other co-manufacturers, he decided to open his own factory in the Dominican Republic. He wanted to make his product his way.
Luis’ investment in a factory reduced his production costs so much that he was able to lower his retail price from $4.99 to $1.99 and launch with WalMart. The Caribe factory now produces 250,000 12oz bottles of cold-pressed juice every month and Luis is able to offer a wide array of juices. In fact, Luis is opening a second production facility to meet growing demand.