Rick Sweeney, general manager at Straub Distributing Company, doesn’t hold back when discussing Stumptown Coffee Roasters. Even though the Anaheim, Calif.-based Anheuser-Busch wholesale company focuses primarily on beer, Sweeney gushes about the margins of Red Bull and Monster, a Straub brand. And he sees a parallel between the energy drink emergence of the early 2000s and that of cold-brew coffee. So as Sweeney analyzes his recently formed partnership with Stumptown, which has recently moved deeper into an RTD cold brew play, the ceiling can be hard to see.
“We do believe, at some point in time, Stumptown will be in all the major grocery stores,” he said.
He’s talking Vons and Safeway. He’s talking Albertsons and Ralphs. Stumptown is already in Whole Foods, Bristol Farms and Gelsons. And because of Straub’s expansive footprint, which covers Orange County, a portion of West Riverside/San Bernardino County, and the I-15 corridor that stretches to San Diego County, Sweeney and his team of merchandisers and sales reps have already established strong relationships in the region’s major accounts. With Stumptown, Sweeney offers retail partners a new dimension from a burgeoning category. This increases the amount of time that Straub employees spend in these accounts, thereby strengthening the connections. Another added bonus: the same beer bars that pull from Straub’s craft portfolio are reserving precious taps for Stumptown on draft.
“We think Stumptown Coffee is a little bit like craft beer,” said Sweeney, who compared the consumer bases because of their shared passion for trendspotting and brands with good stories.
The partnership with Straub, which began in January, serves as one piece of Stumptown’s growing distribution network. It’s a significant piece, but this marks just the beginning of what Stumptown president Joth Ricci envisions as a national juggernaut.
“Our ability to get really good at distribution management is going to be critical as we grow,” he said.
Ricci’s already begun working with Columbia Gorge Organic, the juice company with its own wholesaler operation, Cogo Northwest. Cogo distributes to Whole Foods in the South (Atlanta/Carolinas), Midwest/Chicago, Rocky Mountains/Denver and Southern Pacific (Los Angeles, Arizona, Nevada), Ricci said.
In early April, Stumptown partnered with Columbia Distributing, which covers much of the Northwest with the brand’s cold-brewed coffee kegs, foodservice growlers, and grab-and-go-ready stubbies. The deal with Columbia might have been expected. Beginning in the fall of 2000, Ricci worked with Columbia, eventually becoming the company’s general manager of the Oregon and Washington markets. As he oversaw the day-to-day business in both states, dealing with beer, wine and a range of non-alcoholic beverages, he grew an appreciation for distributors that can balance a diverse roster of brands.
Now working as the president of a cold-brew coffee brand, Ricci is still very much immersed in the world of distribution.
“The distributors are starting to become our biggest customers,” he said.
With years of wholesaler experience on his resume, what does Ricci look for in a distributor? Consider this the Stumptown distributor checklist:
He looks for portfolio management. As brands and distributors grow together, it’s critical to manage the stable, especially when dealing with emerging categories and new brands, he said.
He seeks distribution houses that have proven an ability to build brands across different categories. Straub, for example, distributes beer, energy drinks, water and now cold-brew coffee.
He wants a distributor that’s willing to invest in the partnership. This distributor understands that every category has its nuances and, therefore, the distributor expresses a willingness to adjust its business model to ensure a smoother route to market.
Ricci has made an investment of his own with these new distributor partners: his trust. While Stumptown Cold Brew Coffee with Milk is distributed by dairy suppliers with cold trucks, the majority of Straub and Columbia trucks aren’t refrigerated. Ricci said that his company has conducted its own tests of temperature and time to establish how long a cold product can last in a non-refrigerated truck. The measurements vary by a number of factors, such as weather and driving route. But at the core of the deal is Ricci’s trust in the efficiency of his distribution partners. It’s what enables the higher price point. It’s what continues Stumptown’s visage of premium quality.
“They’re determined to maintain an extraordinarily high level of quality with their product,” Sweeney said.
While Sweeney’s prognostication of “all the major grocery stores” hasn’t yet come to fruition, Stumptown continues to swell. The brand will soon be in all QFC stores. After a successful, gradual test in Fred Meyer, Stumptown will be chain-wide by the end of June.
“We’re seeing the next wave of acceptance in this business,” Ricci said. “Not just acceptance, but people wanting it.”
Energy drinks followed a similar trajectory. So too did craft beer. Seems that it may not take long for Sweeney to back up the talk.