Kalen Caughey, a 19-year-old marketing major in MSU's College of Business, is president and CEO of Guaraná Energia LLC. The company produces an energy lozenge that fills a new niche in the sports energy food market.
The company's first product, Guaraná ENERGIA lozenges, will debut nationally in September. Caughey largely developed his company during his first year at MSU.
"I came to college knowing that I wanted to start this company," said Caughey, a mountain biker, hiker and former competitive freestyle skier. "It's been my first priority."
Caughey's company is based on a Lifesaver-sized lozenge that packs a wallop of powdered guaraná. Guaraná seed is taken from a berry grown in the Amazon rainforest of Brazil. Caughey said that guaraná contains alkaloids also found in coffee, chocolate and tea that European studies have found to positively affect mental stamina as well as endurance during workouts.
Caughey will package seven of the shiny, individually wrapped lozenges in a compact tin that easily fits into a pant pocket or ski jacket. The tins will sell for $3.49 in natural food stores and specialty bicycle and ski stores, where the product is expected to compete primarily with natural energy drinks and bars.
The seeds for Caughey's product came on Christmas break in Montana during his senior year at Lowell Whiteman School, a boarding school for skiers in Steamboat Springs, Colo. Caughey was looking for a natural energy product that he could use during competitions that was portable, affordable and wouldn't slosh around in his stomach.
"There was no product like this," Caughey said. "So I decided I wanted to do this for myself."
Byron Caughey, a biochemist at Rocky Mountain Labs, lent a hand by helping his son find scientific research about natural energy products.
"He brought back papers about many natural stimulants from around the world, including coffee, ginseng and guaraná along with how they affect the body," Caughey said. "After pouring over the research, it became clear that Guaraná was the best choice."
The family was familiar with guarana. They had vacationed in Brazil and knew that guarana is popular product grown there. Caughey ordered some guarana berries over the Internet. Armed with pots and pans, grinders and a candy thermometer, he fiddled with a recipe, enlisting the help of friends and family for feedback. Friends made later at MSU's South Hedges Residence Hall were vital to helping him test the product during his 12-months of experimentation.
"I tried about 100 different products and formulations," Caughey said. "A lot of thought went into it."
A chance meeting with a friend, Aaron Leib of Darby, also helped. Leib's father, Gary, is in product development. The senior Leib mentored and partnered with Caughey, helping develop a prototype and find a Chinese manufacturer for the tins.
"Gary has provided an enormous amount of guidance, knowledge and skills across many aspects of developing the company," Caughey said. "Without that, moving forward would have proven far more difficult."
Caughy said it was tricky getting the product out of the kitchen into a manufactured product. He eventually worked with a manufacturer in Virginia who matched his recipes. Caughey also worked with a flavoring company to make the bitter powder palatable to American tastes.
His emerging company also affected his college search. Caughey looked for a school near outdoor activities that also offered courses in entrepreneurship and found both at MSU. Early on he went to MSU's Center for Entrepreneurship for the New West seeking guidance. There he ran into a helpful Rich Semenik, the center's executive director.
"He really helped me out," Caughey said. "He has been so nice to connect me to people and things I need to know." Only later did Caughey learn that Semenik was also the dean of his college.
"Kalen has all the features of a classic entrepreneur--passion, fierce determination and perspective," Semenik said. "We are proud to have him in the Alderson Program for Entrepreneurship. It would not surprise me at all if Guarana Energia turns into a global company."
Semenik referred Caughey to the Center's Gary Bloomer for entrepreneurial guidance as well as adjunct marketing professor Joe Long for business plan advice. Long was coaching teams to compete in a student business plan competition at the University of Montana and asked Caughey to enter. Caughey blew away the audience in the spring competition, which was dominated by teams of graduate students, Long said.
"How could you not be excited about his enthusiasm?" Long said. "He's just a bright kid who has a supportive family. He hasn't been limited by being told 'You can't do that.' He has been encouraged and told 'You can do that.'"
Long also says he predicts Caughey's product will crack a market demographic coveted by corporate America.
"He single-handedly tapped into the college-centric market," Long said. "It's word of mouth. Corporate America has marketing teams trying to crack that market and can't and he has cracked the market just being himself."
Caughey says he plans to market his product using college students, a concept he developed.
"I knew this had to be different from any other product to enter the food industry if I wanted it to compete, to be heard," Caughey said.
For now, Caughey's own competitive sports career is on hold while he channels his efforts into his new business. His goal is to make the lozenges the number one sports energy product in the world, and once he has done that he said he plans to work on another product.
"I'm the type of person that likes to think up something cool and different, make it and sell it," Caughey said. "It really is a kind of an exciting thing."
For more information on Guarana Energia, go to Caughey's Website.