As an entrepreneur in consumer packaged goods, Steve Fortuna has traveled far from his engineering roots. With bachelor’s and master’s degrees in electrical and computer engineering, he began his career at preeminent defense firms Raytheon and MITRE, where he held top secret government clearance.
After receiving an MBA in finance from Columbia, Steve leveraged his background into technology equity research on Wall Street. Over the years, he held increasingly responsible positions at PaineWebber, Deutsche Bank Securities, Merrill Lynch, and Prudential Equity Group, becoming ranked #2 on Institutional Investor’s 2001 and 2002 All-America Research Team.
In 2006, Steve crossed over to the investment “buy-side,” as portfolio manager at Stratix Asset Management, a top-performing New York City hedge fund. With the trading acumen gained there to complement his analytical strength and industry knowledge, Steve then decided to make the leap to entrepreneurship, co-founding S2 Capital Management, a $125 million long/short equity fund specializing in technology and energy.
After a while, Steve realized he was feeling more satisfaction from his newly expanded business-building duties than from the investment work. Coincidentally, he was spending more time in the Massachusetts Berkshires, renovating the gardens of his 1815 Lenox home to be better attuned with the area’s history and ambiance. There he came to know several business owners catering to local demand for foods and beverages that were not only natural and healthy but offered unique appeal.
A foodie himself, the exposure eventually inspired Steve to do something similar, something that would also allow him to feed his growing passion for establishing and nurturing all facets of a new business enterprise. When the inspiration struck while planting in his garden, again he took a leap, becoming Founder and President of Blossom Water LLC, to create a novel drink infused with flower botanicals. In 2013, Blossom Botanical Water™ launched in the metro-Boston area, and has since expanded to other parts of the country.
How did you get started in your industry?
My summary biography connects all the zigzagging dots!
How do you make money in your field?
We sell to what are called direct store delivery (DSD) distributors as well as larger, wholesale distributors, who in turn sell to the various retailers, ranging from small independents to multi-store local and regional chains on up to the larger national chains. All our sales are at wholesale prices to allow the distributors and retailers their necessary margins.
How long did it take for you to become profitable?
Who said we were profitable? Seriously, a rapidly expanding CPG firm must rely substantially on investor capital during the early phase of its lifecycle. As the firm scales, both gross and operating margins increase, and the business becomes increasingly self-funding through net profits.
When you were starting out, was there ever a time you doubted it would work? If so, how did you handle that?
With something as inherently complex and risky as starting a new business, it’s only natural to have doubts. While it sounds trite, my way of handling doubts is to take things one day at a time. I look ahead to strategize, of course, but I always come back to what I can do today to strengthen the business model and execute against it. I’m fond of the Winston Churchill quotation, “Success is not final, failure is not fatal: it is the courage to continue that counts.” This keeps me grounded during my confident moments and motivated during my anxious ones.
Do you remember how you got your first client?
Most early retailers who bought our product for their shelves became enthusiasts after sampling our drinks at trade shows and other event venues. Of course, our real “clients” are the consumers, and we’ve been blessed with a devoted and fast-growing fan base.
What is one marketing strategy that you’re using that works really well to generate new business?
Consistent with the product itself, our packaging is highly differentiated. It’s essentially our on-shelf billboard and, in many cases, consumers’ first touchpoint with our brand. You’ve got to encourage trial, and a crucial way to do that in a crowded marketplace is through shelf visibility. Of course, once you get it in consumers’ hands, the trick is making sure the liquid in the bottle is good enough to generate repeat purchases. But no one is going to know that if they don’t buy it in the first place.
What is the toughest decision you’ve had to make in your professional life?
I recently had to scale back some people go due to disruptions that have occurred during the COVID-19 pandemic.
What do you think it is that makes you successful?
My extensive background in both engineering and finance enables me to bring a systematic and comprehensive approach to entrepreneurship. The concept for this brand was perhaps whimsical in its origin, but my tackling the nuts and bolts of running this firm is anything but that.
What has been your most satisfying moment in business?
Most satisfying are those moments when I’m struck afresh with the recognition that I’m actually transforming an innovative inspiration — infusing water with floral essences for a new spin on traditional fruit flavors — into a commercially viable drink that truly resonates with consumers.
What does the future hold for your business? What are you most excited about?
I’m most excited by the ongoing trend of botanical use in food and beverage. Botanicals add an authentically natural “pop” to familiar tastes, such as fruit, as well as layering in appealing aromatic attributes. We’ve been a first mover in the use of flower botanicals for the beverage category. Our introducing them to the U.S. marketplace is not unlike what happened with coconut water several years ago. Coconut water was a staple drink in South America long before it was marketed and became a success story in this country. We’re doing much the same with floral essences, taking what’s been appreciated in many other parts of the globe, and making it available here in a fruit-plus-flower combination that’s simultaneously traditional and novel.
What business books have inspired you?
Zero to One by Peter Thiel and Blake Masters. It really puts the focus on innovation and differentiation when creating a new company and brand.
The Lean Startup by Eric Ries. This book embraces the uncertainty inherent in any new organization, emphasizing the importance of adapting both to changing marketplace dynamics and customer feedback on your product.
Mission in a Bottle by Seth Goldman and Barry Nalebuff. This is an entertaining book by the founders of Honest Tea that provides anecdotal support for how perseverance and creative problem-solving can lead to success within the highly competitive beverage space.
What advice would you give to your younger self?
Take risk – dare to be different, a first mover even. Be flexible – don’t be afraid to make changes to your product or your business model as you learn and circumstances evolve. Persevere – Churchill’s quote says it all.