BevBlog: Jones Soda out at Starbucks

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1. 1 On June 15th, 2007, TheNOSDrinker said:

   The flavor selection of Jones Soda at my local starbucks was not very good. They are In Walmart now and I wonder if they need starbucks anymore.

2. 2 On June 15th, 2007, Darrell Duchesneau said:

   This is an opportunity for distributors. Many coffee shops will want to pick up the brand. We have found two basic attitudes by independants… They want Jones because starbucks has it or that is the reason they do not want it. Since the copy cats are already on board it opens up more stores. Starbucks was a direct program that avoided DSD. They also only carried a few skews and Jones needs the rainbow of 6-10 skews to get a decent drop density for the distributor. Money wise Jones will not get hurt. The volumes per Starbuck was small… but they did have many locations. Estimate 2 cases per week at each location… if they had 3,600 locations it would be 6 trucks per week or about $40,000 per week gross profit… Well, I guess that would hurt a little…

3. 3 On June 16th, 2007, Darrell Duchesneau said:

   I looked at the Starbuck US locations and the # is about 3x as many as 3600 so that means #120,000 per week. If the average in some states was lower than the states of Texas and California then we might be looking at 1 or 1.5 cases per location. So we are looking at a probable low of 3 million per year and maybe up to 6 million per year of gross profit. On second look, this might hurt more than the brand recognition and status loss. Of course assumptions are made that all stores carried the line, and all ordered it and kept it in stock, and we are not including international stores or corporate rebates, co-ops, etc.; but this does look like it may be a major account for Jones. I guess we can look at their financials in the first quarter they do not have the account and see if they have grown enough other business to cover it, or if they just shrank a little bit. The cans are doing well in c-stores and are getting into grocery; so they are still a company that is moving forward. In this business it is common to loose 5% of sales annually through no fault of the company. That is why if you are not growing, you will die. Other companies row their own boat and sometimes you are not invited. At least they are not being kicked out for any bad reasons we know of.

4. 4 On June 19th, 2007, Alex Jonlin said:

   I don’t think that Jones Soda has to worry much about breaking up this relationship with Starbucks. It has recently struck a deal to provide beverages for the Seattle Seahawks, and has been contacted by several other professional sports teams to provide beverages at their stadiums. Selling soda at pro sports games will probably provide much higher profit, and raise Jones Soda’s profile a lot.

5. 5 On June 20th, 2007, Bernard Casey said:

   I recently visited a Barnes and Nobles with a Starbucks located at it’s center. The Starbucks offered an expanded menu featuring new cafe sandwiches. On the counter, an assortment of Godiva Chocolates. Godiva products were prominently displayed throughout the store. Jones Soda’s,Iced Tea by Tazo,two water choices Aquafina and Fiji. They were stocked in a lone, double door standing case. The Jones Soda selection was from the “organic” section of Jone’s offerings. Strawberry Manilow, D’Peach Mode , Limes With Orange. The Jones Soda product was well stocked. However,it was clear the other beverages in the case were moving better, at least for that day…Tueday after Memorial Day. Located next to the beverages is a pastry case featuring desserts from the Cheesecake Factory. The volume of commerce combined at that particular geographical location is staggering.
   The different agreements and arrangements entered into makes even the minor merchantilist weep with joy. In this day of free agency,
   short term gain for long term dollars is today’s governing principal of negotiation. Looks like it was win, win for all.

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