Having been in the beverage distribution business for over 25 years, Lou Ferraro thinks he has learned a thing or two about what makes for a successful beverage brand. Ferraro was one of the first employees at distribution powerhouse Big Geyser in New York and has been involved in the growth and success of dozens of entrepreneurial beverage companies. Earlier this year, in what is likely to be the final exam for Ferraro’s accumulated knowledge, he opened Preferred Beverage, a distribution company based in Glendale, NY that carries a variety of entrepreneurial beverage brands. Preferred services New York City as well as Nassau and Westchester counties through a sub distributor network.
According to Ferraro, Preferred tries to carry a number of entrepreneurial beverages brands that, in his words, “have a shot of making it.” The company particularly focuses on several brands with an organic component and those from a number of emerging beverage categories. Ferraro pointed out three key factors that Preferred is looking for in a beverage brand.
“The product has to fit into our portfolio, it has to be able to make it on the street, and the supplier has to have the desire and money to be able to build the brand,” Ferra
ro said.
Typifying Ferraro’s business approach, Preferred recently signed superfruit juice-maker Genesis Today to its portfolio. Ferraro said that he was impressed by the company’s focus on the quality of its products, a strong management team supporting the brand and the company’s position that it was not building a business specifically to sell to Coke or Pepsi.
“They make a great product, and it’s about time they got into New York City,” Ferraro said. “If they stick to their convictions, the money will eventually come.”
In addition to Genesis Today, Ferrraro is enthusiastic about the success that Preferred has had with distribution of MADE organic green teas with fruit juice. Preferred distributes MADE products to nearly 600 accounts and Ferraro said the line is selling “beyond [his] wildest expectations.” He noted that MADE has received great reception from retailers based on its packaging and because of the fact that it’s a product with consistent labeling of ingredients on the front and back of the bottle.
Preferred also carries coconut water brand C20, a product that Ferraro said has received a warm reception in New York. However, he followed by saying that it takes a bit more convincing for retailers to stock the beverage because it is packaged in a can – a similar container used by coconut waters with additive ingredients.
“Retailers see Tetra Pak as the best way to sell coconut water,” Ferraro said. “When we stock C20, we have to put up a sign that says ‘100 percent coconut water.’”
And while the coconut water category is currently dominated by a handful of brands, Ferraro said that “bigger beverage companies don’t scare me – never have.” As proof, Preferred competes in categories – specifically ready-to-drink coffee and energy shots – that are dominated by single brands. Preferred carries both Real Beanz Nutrient Enhanced Iced Coffees and E-Boost Natural Energy Shots, and Ferraro feels that each has enough differentiation (in terms of flavor and better-for-you qualities) to stand on the shelf alongside Starbucks and 5-Hour Energy products.
Yet Ferraro noted that distributors can only do so much by getting a product into stores. He made it clear that emerging brands need a “whatever it takes” attitude from suppliers to be successful in the long run.
“A distributor alone cannot build a brand,” Ferraro. “It’s my job to get a product on the shelf, but New Yorkers don’t like change – it’s not like on the West Coast. A person here could be drinking the same thing for 30 years. To get people to change, you have to be visible with promotion and demos.”
As for products that Preferred may carry in the future, Ferraro said that he negotiating with between 10 and 15 brands in several emerging categories, although he singled out aloe drinks as one primed for the greatest and most immediate growth.
“We’re in talks with five aloe brands right now,” Ferraro said. “I definitely believe it is the next category to explode.”