Coast Brands Starts Incubation Program

There’s a new small-brand incubator in town, but it’s attached to a much larger brand engine: Coast Brands Group.

Coast, which went into business last year as a way to network beverage brands into chain accounts and direct-to-store distribution networks simultaneously, had largely focused on companies whose scalability seemed immediate. Brands like New Leaf Tea, Dad’s Root Beer, OhYeah!, Celsius, and Activate have all either attempted to develop or shore up their national presence at least in part through the Coast network.

But founder Bob Groux also has a background in working with smaller entrepreneurial brands — he helped launch PRE and was an early part of the national rollout of Snapple, for example — and he said that several of them have beaten a path to Coast Brands’ door, even if they can’t afford the company’s monthly representation fee.

“We’ve got a brand that shows up literally every day,” Groux said. “Some are very unique, but they need to be incubated and educated before we roll them out across 10,000 or more stores. So instead of turn them down, we can offer them the incubator for a fraction of the price, and really see whether or not the brand works.”

So Coast has begun a lower-cost program that will place developing brands in a select set of between 25 and 100 retail accounts where they can be closely monitored by his sales team for a 3-6 month period. Another option in lieu of fees would provide Coast with equity in the brand.

“With this, we do the distribution ourselves to our test stores, we monitor their performance, we’ve hired a demo company,” Groux said. At the end of the test period, he said, the idea is to get a new brand onto the Coast roster.

“If the brand’s ready, then it makes all the sense in the world to roll it out in California, Arizona, Nevada,” he added. “It costs a lot of money to launch in California, and it’s a big crapshoot if a brand doesn’t make it. This gives them a chance.”