Call it the culmination of a long-term courtship: fast growing natural brand Xing Tea has partnered with Coast Brands Group to try to expand its presence in national chain accounts.
Those kinds of accounts are supposed to be the key competency of Coast, helmed by long-time beverage industry player Bob Groux and staffed by sales executives with a deep history of dealing with chain buyers.
Groux and brothers Tom and Scott Lebon, who own Xing Tea, have known each other for more than 20 years, when Groux was helping to build Snapple’s national profile and the brothers were working for a local Denver 7-UP distributorship. Now, however, the brothers own a nationally-distributed brand whose next step in terms of volume is a deeper presence in high-profile national grocery and convenience chains.
“The thing they have are just so many chains,” said Xing Tea co-founder Tom Lebon, who also owns New Age Beverage, a Colorado-based distributorship. “And the thing that the chains liked is having one group they can deal with on a lot of different products.”
In the past two years, Groux has assembled a portfolio of brands, including Activate, Oh Yeah!, Celsius, and Kronik, among others, into a loose-knit confederation of distribution houses with near-national reach, but Xing’s extensive network makes it the best-established brand in the bunch.
Of course, adding Xing, which showed about $14 million in sales last year, as per data from Symphony/IRI, which does not include many smaller, “up and down the street” accounts and Wal-Mart, came with some caveats, because the brand is already established in many of the distribution houses in the Coast network. So Coast won’t collect a fee for dealing with Xing’s existing accounts.
Nevertheless, according to Lebon, the transaction makes sense from a value point of view — with a national imprint, opening key chain store accounts would have required hiring several regional key account managers, so Coast offered a solid outsourcing option.
“They’ve provided a list of targeted accounts in each region,” Groux said. “Each of our people are going to work with their folks in the area.”
According to Groux, the partnership has already paid off, with Xing getting eight SKUs into the cold boxes of more than 250 Southern California Albertson’s stores. As for other brands in the Coast portfolio, Groux points to the OhYeah! line of protein drinks as a fast mover.
“Same store sales continue to grow,” Groux said. “That brand is opening a lot of doors for Coast Brands Group.”
The Xing deal also provides Groux with some options to fulfill the needs of distributors and retailers who have been waiting for another Coast Brand RTD tea, New Leaf, which has had a series of financial and supply setbacks. While still a client of Coast, New Leaf’s supply of products has been slow to arrive for many months and CEO Eric Skae has been struggling to keep the company afloat.
A key opportunity for Xing, Groux believes, will also come via the sale of larger-format gallon containers of the product. Two Coast employees, including Coast President Bob McLeod, have previous experience with the AriZona gallon jug business.