From:Businessweek


Courtesy Y Water Inc

In 2008, Y Water, an organic, vitamin-infused water for kids, began selling at Whole Foods (WFM) stores around the country. It charmed the press, including Bloomberg Businessweek, in large part because the plastic packaging, designed by Yves Béhar, was shaped like a tetrahedron and doubled as a toy; it interlocked with other Y bottles to form molecular-like structures. There was just one problem: The whimsical bottle proved too difficult to fill, and in 2010 the company ceased operation until it could find a better container. Now, Y Water has relaunched in a unique milk-carton design that dates to 1940s Europe.

Courtesy Y Water/Original Y Water container design

Thomas Arndt, the Los Angeles-based company’s founder and chief executive officer, says the Béhar-designed bottle, while beautiful and clever, was a manufacturing nightmare: It turned on the conveyer belt while being filled, making it impossible for the company to scale up without investing millions in new equipment. That prompted the entrepreneur to revisit his original plan of selling his product in the plastic-lined tetrahedron-shaped packages he remembered from his German childhood. But Swedish company Tetra Pak wasn’t yet ready to introduce its packaging business to the U.S. So Arndt waited. Last year, Tetra Pak  began manufacturing its signature pyramidal carton out of Queretaro, Mexico, for American customers. “Y Water was their first commercial customer,” Arndt says.

Béhar, who joins with startups in exchange for an ownership stake, continues to work with Y Water and consulted on the Tetra Pak decision. Although the new paper containers aren’t as fun to play with, they have added environmental benefits: They require a minimal amount of material to produce—one of the design’s innovations—and are fully recyclable.

Riding the wave in popularity of vitamin-laced drinks for adults, Y Water is a more wholesome substitute for sugary drinks that kids love but that can also contribute to obesity. It comes in four flavors, each containing vitamins, minerals, and electrolytes targeted to different parts of the body: the brain, bones, the immune system, and muscles. Bone Water, for instance, includes calcium, fluoride, and vitamins A, C, and D.

Courtesy Y Water Inc.

 The company is starting the rollout at Walgreens (WAG) in Southern California and Whole Foods stores in Northern California and plans to widen distribution across the country. Arndt says that Y Water was initially “very, very successful.” The startup sold a million bottles in the two years its drinks were on the shelves at Whole Foods. He expects to sell half a million units this year at $1.19 per 5-ounce carton. (In 2008 the product was priced at $1.69 for a 9-ounce container.)

Parents might scoff at spending money on fancy water for kids when the same nutritious benefits can be achieved more efficiently with a pediatric vitamin and a cup of filtered water. Arndt argues that his beverages are engineered with enough flavor to entice kids away from soda. They’re also sweetened with a little organic sugar. “That is the trade-off,” he says. “Otherwise they wouldn’t drink it.”