Ex-Nevada basketball assistant coach now has a $100 million water brand, Lemon Perfect
Yanni Hufnagel lasted only one season as an assistant basketball coach at Nevada, but brighter things were ahead in his future.
A few months after parting ways with the Wolf Pack, the long-time college assistant founded Lemon Perfect, a flavored cold-pressed lemon water brand. Last month, the company announced it had closed on $31 million in Series A investments, including from global star Beyoncé Knowles-Carter. That financing brought Lemon Perfect’s total funding to $42.2 million with a valuation of more than $100 million fewer than three years from the company's first sale.
The brand's first big boost came in January 2020 when an Instagram photo of Knowles-Carter’s limo had a bottle of the company's Dragon Fruit Mango in its door, leading to a viral push.
“She had posted a photo with it in her limo, and all of a sudden my phone blew up,” Hufnagel recently told TechCrunch. “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.”
Knowles-Carter, a 28-time Grammy winner, offered praise for the company in a statement released by Lemon Perfect announcing the last round of funding.
“I don’t typically enjoy drinks without added sugar, but Lemon Perfect is delicious,” she said. “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.”
Hufnagel's idea to start a beverage company had a couple of inspirations. He partially credits a chance meeting with a store owner who dreamed of being a basketball coach for the Lemon Perfect brand idea after the store owner gave Hufnagel a draft of his book on the Keto diet. The book included lemon water recipes. Hufnagel also said watching the locker-room drinking habits of his basketball players first got him interested in creating a water brand, which is basically a mixture of lemon water and Bai.
Lemon Perfect sells for $23.88 for a case of 12 ($1.99 per 12-ounce bottle) and is only five calories with zero sugar and no artificial flavors or sweeteners. It comes in flavors such as Just Lemon, Peach Raspberry, Blueberry Acai and Dragon Fruit Mango and battles in the same market as Hint, Bai and Vitamin Water.
“Nothing with our flavor and health profile is on the market today,” Hufnagel told TechCrunch. “And 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.”
Lemon Perfect quadrupled its revenue in 2021 to $21 million and projects a more than 100 percent revenue growth in 2022. Hufnagel believes the company will do $60 million in retail sales this year after doing roughly $600,000 in 2019. The Atlanta-based company has 70 employees, with Hufnagel believing he could build his company to a $5 billion valuation.
“Lemon Perfect has found product-market fit in a hyper-competitive category, and we are thrilled to support their growth,” Trousdale Ventures Founder and CEO Phillip Sarofim said in a news release. “We believe they can disrupt an American beverage ecosystem still dominated by high-calorie, high-sugar options and democratize drinkable wellness.”
Lemon Water was listed as one of the "best new products" in 2019 by BevNET's, a beverage-industry-focused website. Lemon Perfect's goals by the end of this year is to have 40,000 points of distribution (it is currently at 25,000). It's currently available on its website, on Amazon and in retailers such Publix, Fred Meyer and Mariano’s. It's expected to be in Costco this summer.
“Beverage is an expensive game, and access to capital is the only way to drive a fast-scaling brand forward,” Hufnagel told TechCrunch. “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.”
Hufnagel tapped his contacts in basketball as some of his early investors, including Lindsay Gottlieb, Channing Frye, Nick Young, Spencer Dinwiddie, Josh Hart and Kyle Kuzma, among others. Hufnagel came to Nevada in 2016 after a two-year tenure at Cal that ended when he was released from his duties following a months-long investigation into a sexual harassment claim from a reporter. Hufnagel appealed his dismissal before ultimately resigning during that process to take the Wolf Pack assistant position. He spent one season at Nevada, the 2016-17 campaign that saw the Wolf Pack win the Mountain West regular-season and tournament titles and reach its first NCAA Tournament in a decade.
Hufnagel was raised in Scarsdale, N.Y., and played lacrosse at Penn State before transferring to Cornell University, earning a degree in Industrial and Labor Relations. He was a student manager at Cornell and worked with the NBA's New Jersey Nets and in college at Oklahoma, Harvard and Vanderbilt as well as Cal and Nevada, the final stop of his coaching career. He was known as a strong recruiter for those programs.
For more on Lemon Perfect, you can listen to Hufnagel's podcast appearance on The Joe Pomp Show. He also had a recent appearance on Fox Business.