It is, to be sure, a Catch-22, and it’s one that’s been discussed repeatedly – and with ongoing frustration –by many a growing beverage marketer.
It goes something like this: the distributor I want won’t carry my product without major chain store approvals, but I can’t get chain store approvals without a major distributor.
One beverage veteran who thinks he’s got a way out of that pickle is Bob Groux, who has assembled an all-star team of retailing and distribution veterans at recently-formed Coast Brands Group as a way to represent brands to both sides of the equation.
Under the guidance of Coast Brands, beverage companies are represented to both large distributors in California and to some of the largest chain stores in the state, as well. Brands working with Coast pay a monthly retainer and a per-case fee — a levy that can keep Coast motivated to help the brands grow, as well.
“Our business is built around two things, distribution and authorizations,” Groux said. “And the distributors need authorizations – particularly in the chain-driven environment out west—and the retailers, they want to know there’s going to be a coordinated DSD network out there in regards to supply and promotions.”
To date, Coast has managed to grab a stable of clients that includes New Leaf Tea, Dad’s Root Beer, Celsius, a revived Kronik Energy, HER Energy, and OhYeah, a line of nutritional shakes and protein bars. Snack chips may also be on their way in the near future, as well as a smattering of new beverage brands. Groux said he is currently aiming for a roster of 10.
What Coast brings to the table for those brands it works with is a kind of instant web of chain store accounts and distributors who service them, according to Groux. That access is provided by well-networked retail and supply veterans like Dave Dimond, a former sales executive with West Coast powerhouse Milton’s Baking Company and Katia Chiporukha, a former beverage category manager for BP and its am/pm stores.
Between Dimond and Chiporukha, along with Bob McLeod, the former National Accounts director for AriZona Beverages, and Aimee Peters, a veteran of Straub Distributing and a corporate partnership manager with the Anaheim Mighty Ducks, among others, Groux estimates that his group has access to more than 70 chain stores accounts and can quickly gin up a network of between 15 and 20 of its 30 or so distributors to service them on a direct store basis.
For companies like New Leaf, which had been trying to establish itself statewide in California on a distributor-by-distributor basis, the potential for instant access made Coast appealing, even with the extra cost of retaining the company.
“The bottom line is that these guys have relationships on top of relationships,” said Bill Sipper, New Leaf’s COO. “They get the authorizations, they go to the distributors. It’s really interesting.”
It may be interesting, but for some companies, the financial outlay may not be possible – and for others who already have relationships with distributors or retailers in place, the instant connections offered by Coast might be unnecessary.
Nevertheless, one quick metric of the overall effectiveness of the Coast strategy of brand representation will be on display in late October, when the company and its suppliers play host to high-ranking distributors and retailers during a two-day wine, dine, and golf event in Newport Beach, Calif. The event, paid for by the Groux and his clients and called the Coast Brands Beverage Summit, is an attempt to get many of the brands in front of new distributors and retailers as well as to solidify their existing relationships. If the suppliers can use the event to get the sales opportunities they need, Groux will likely have a hit. Another success could come if a brand spreads horizontally, he said.
“We’ve got two or three brands with us right now who are trying to expand nationally – and the ultimate goal at Coast is to have national representation for DSD networks,” Groux said. “What we require to do that is having the right people and the right resources to support them.”