As the COVID-19 pandemic has effectively shuttered the office channel for beverage providers, Joyride Coffee Distributors has temporarily ceased operations as it finalizes a deal to secure new financing, the company told BevNET this week.
Founded in 2010, the New York-based company offered keg service for office and food service accounts in select New York, Massachusetts and California markets, selling its own coffee in addition to distribution partnerships with brands such as Starbucks, Peet’s and Blue Bottle.
President and co-founder David Belanich told BevNET on Thursday that Joyride leadership made the decision to pause operations in July in order to preserve capital and extend the brand’s “runway, in terms of options.” Though Joyride did have some accounts that have continued to operate during the pandemic, including hospitals, he said the company’s strategy had been to target “knowledge workers,” such as tech and other white collar office accounts — the vast majority of which have been working from home since the spring and will continue to do so for the foreseeable future. Though some offices have reopened, many of Joyride’s largest accounts have announced they will not be back in-person until summer 2021 at the earliest, he said.
“We’re a small business and it’s tough when you go from beating the year to 5% of revenue in two weeks, especially on a business with real operating costs and assets,” Belanich said. “It’s tough, tough math to make work without access to public markets.”
Belanich said the company is in the final stages of closing a financial deal next month with an unannounced partner with nationwide distribution capabilities. Rather than offices, Joyride’s focus will be on serving consumer-facing channels with its own line of cold brew coffee products. The company’s co-packing operations will provide additional revenue, he added.
The new partner will resume distribution to Joyride’s existing customers in all current markets, Belanich said, in addition to securing new accounts. The deal could even extend Joyride into new markets the brand has not yet entered. Under the new management, the Joyride brand name may take on a more boutique positioning.
Belanich said the company intends to continue distribution deals with partner brands affected by the suspension of operations — which includes Verve Coffee, GT’s Kombucha and Health-Ade.
At its height, Joyride had close to 100 employees. According to Belanich, the company secured a PPE loan in the spring but has had to lay off or furlough the bulk of its staff, opting to operate with a “skeleton crew.” Under the new partnership, some former employees will return. As well, production team members and some office staff will come back.
In April, in a move to quickly pivot, Joyride launched a bag-in-box cold brew coffee available direct-to-consumer online. However, that business has also been paused and the company’s website is currently offline but is expected to relaunch in the near future. Ecommerce will be the focus of the CPG business to start, but Belanich said that the goal is to eventually roll out into traditional retail outlets.
“This is what we’re calling Joyride 3.0,” Belanich said. “If the truck was 1.0 and the distribution business was 2.0, then 3.0 is going to be more of a branded beverage company.”
Joyride is also exploring single serve options, but Belanich said the company has not yet finalized its product portfolio plans.
“These are tough times, but in the end this is not a bad outcome for us,” Belanich said.