Seeing Steve and Alexis Schulze at the podium at a Business Journal event is like NFL great Jim Brown arriving in the end zone—seems like they’ve been there before.
They have.
The couple’s Nekter Juice Bar Inc. in Santa Ana won as a Family Owned Business in 2013, and Alexis nabbed a Women in Business nod in 2014.
They’re so far the only three-peat Business Journal honorees, and their latest win comes on the strength of the duo’s plan to, as Steve Schulze put it this time at the podium, “reinvent the juice space.”
The business will hit 70 food and juice bar locations by year-end with revenues of $40 million.
It’s brought awards just about every year since they founded it in 2010, and they’ll be back at the dais to keynote this year’s Family Owned Business awards in June.
The First Kitchen
It wasn’t so clear that would be the case at the start of things. Steve said, “I didn’t buy into the idea of juicing, (because) it tasted horrible.” Then “Alexis started making some from home that tasted pretty good.”
The Schulzes launched their business from a home kitchen with startup capital of $35,000 in savings and $15,000 on credit cards.
“We looked at an old Diedrich (Coffee) location” in Costa Mesa that had become a Starbucks, then a sandwich shop, Steve said. “It was closed and broken down.”
An overseas owner had left $25,000 in equipment in the shop, though, and the Schulzes bought it all for $6,000.
They left the deli case and sinks in place and added “more of a courtyard environment” to the outside.
Community Focused
The Schulzes tapped handyman and landscape architect friends to help reconfigure the space. Steve and Alexis painted.
They wanted a community-focused place, “not so whimsical” as juice bar designs larded with “swirls and orange and green,” he said. “Health was serious and education-based—it’s not about whimsical.”
He was “feeling pretty good” from drinking the juice, and the Schulzes figured we’d benefit, too.
The earth-toned colors effort grew into a rustic dark-wood vibe in later redesigns, while that first 900-square-foot site on 17th Street has become the chain’s flagship location.
The first employee was the grandson of an insurance agent who worked above the store and who now runs Nekter’s cold-pressed juice operations, which produces 80,000 bottles a day.
The first day’s register tally was $650; the first year’s take $1.2 million.
Off the Ground
The store was selling 200 to 300 juice items a day early in the first year.
“We were starting to get a lot of demand,” Steve said.
The first store had opened in October, and by Boxing Day—Dec. 26—the Schulzes had signed for a second location in Corona del Mar that opened in March 2011 at a cost of about $70,000.
That summer the Schulzes sought a Small Business Administration loan, which closed in April 2012 and brought $550,000 to open three more locations.
A few months later, they got a call from Stephen Gordon of Irvine-based Opus Bank.
“He said, ‘We’re a young bank, we’re entrepreneurial. Stay in touch,’” Steve Schulze said. “We sent them our P&L statements every two months.”
Opus and Nekter signed a $1.2 million line of credit in December 2012. The bank’s backing is now at about $8 million: “a $5.5 million loan and a line of credit,” Steve Schulze said.
Sold Out
Nekter is 5 years old, with 54 locations and about 700 employees.
It initially eschewed franchising, signing only five outside operators in its early years. Some 70% of its locations are company-owned, but with a revamped franchising program this year it plans to flip that ratio—two-thirds of the 30 locations planned annually will be for franchisees.
Steve Schulze said Nekter has been honing its approach and now plans to tap local market expertise in other states as company-owned locations open close to the chain’s Southern California home.
He and Alexis take a similar tack toward trusting employees—“They’re Nekter. We’re just stewards.” And he confessed as they accepted their latest award that he and his wife “have no exit strategy” for cashing out of Nekter.
