In the second of a two-part series examining how beverage brands focused on building at colleges and universities, we discuss how pureLYFT is using its unique format to build a buzz at schools via social media, as well as how Up Dog Kombucha and Sunniva Super Coffee plan to retain their student customer base after graduation.
VIEW FROM THE OUTSIDE
As beverage brands seek out new ways to capture the market for millennials, penetrating the college retail segment would seem like a natural objective. The nature of exclusive partnerships between universities and companies like Coca-Cola and PepsiCo to supply beverages on campus, however, can make the process a challenge.
Yet it also leaves the door open for innovative brands that can play in between category and format lines, such as pureLYFT, an all-natural caffeine “stir stick” that can be dropped and mixed into any beverage. By focusing on a specific target audience — students who want ‘clean’ natural energy on-the-go — the product provides an easily understood functional benefit.
“We are really putting the functionality up front and really heightening the customization aspect of ‘energize anything,’” said CEO Erik Elfstrum. “It opens the doors of opportunity for people to take the beverage that they choose, or even food, and energize it.”
To promote pureLYFT on campus, the company uses a network of over 100 college brand ambassadors, who hand out their weekly supply of 20 sticks per week at places like the school library, sporting events, cafeterias and other gathering places for students.
“Because it’s on this little eco-system of college campuses, we’ve found that not only brand ambassadors want to work with a startup such as ours, but that it is really taking hold in the college sector,” said Elfstrum. “We feel like it could go viral on a particular campus quite quickly and easily.”
As smartphones continue to play an outsized role in shaping how young people communicate, the importance of staying ahead of the latest trends and apps in social media has become critical to pureLYFT’s marketing efforts, in particular at schools where it does not have an ambassador.
“We rely on our students. They know the fabric of the social media landscape on a particular campus,” Elfstrum said, noting that the company’s most recent hire was a recent college graduate with a wealth of experience in social media. The vast potential for customization and the visual appeal of pureLYFT’s “pop-and-pour” format also plays towards what Elfstrum called the “viral nature” of students, whom he noted have been active in sharing short videos of themselves using the product via Instagram and Facebook.
Having established its credibility with college consumers, the next challenge for pureLYFT was navigating the path to on-campus retail. The brand found a distribution foothold at university-run Barnes & Noble bookstores and has since expanded to food service and college convenience stores, the latter of which was brokered by its distribution partners. The brand is currently at over 1000 campuses, representing about 40-60 percent of total sales, according to Elfstrum.
Still, Coca-Cola and PepsiCo remain the dominant forces in the college segment, bolstered by lucrative exclusive deals to supply beverages in both foodservice and university-owned retail locations. However, as a beverage enhancer merchandised near customer checkout, pureLYFT does not compete directly against energy drinks from either of the two soda giants.
“We hope they don’t see us as a threat,” said Elfstrum, adding that the company has seen consumers use pureLYFT with both Coca-Cola and Pepsi products. “One thing that we are hoping that we do is not cannibalize other beverages. We hope we are just an additional item that a student would buy, because they know they’re going to need an energy option, but they may not know with what and when they are going to need it.”
As successful as university-based beverage startups such as Up Dog and Sunniva may be thus far, college doesn’t last forever. The next challenge for both nascent companies is to build on their on-campus wins and retain their respective student consumer bases as they move on to post-graduation life.
Having developed strong ties with faculty members and fellow students at Wake Forest University, Wolff and Miller, who graduated this month, are still working closely with their alma mater. Along with continuing to solicit advice from professors and members of the school alumni network, they recently brought in a summer intern who will work 40 hours per week and receive a stipend paid for by the school’s entrepreneurship program. More significantly, the school has also been the source of seed funding in the form of grants that have allowed Up Dog to scale up.
“We’ve never had to take out any massive loans or give away any ownership of our company for money; we’ve just been able to bootstrap our business with the help of some small, couple thousand dollar grants from Wake Forest over the last two years,” said Miller, explaining that the funds allowed them to complete an 8,000 bottle minimum order when it moved from out of the dorms into a commercial kitchen space. “It would have made our lives a lot more difficult to not have had that.”
On campus, Up Dog will still be available on draft and in bottles at Campus Grounds, a student-run coffee shop located at a residence hall. The store is not regulated as part of the school’s agreement with foodservice distributor Aramark, but Miller and Wolff said that a representative of the company recently reached out to them and has opened currently ongoing negotiations to bring Up Dog into Wake’s on-campus convenience stores. With a new production facility in Winston-Salem, N.C., that can produce up to 2,500 gallons of kombucha per week, the company now has the ability to meet increased demand.
Off campus, the brand is currently available in 12 oz bottles, priced at $5, at 21 locations and on draft at 30 outlets, with some overlap between them.
Meanwhile, in Philadelphia, DeCicco has already found a national distribution partner in Compass Group to help Sunniva claim a larger stake of the college retail channel.
“As we expand, the main challenge for us will be finding the schools that aren’t Pepsi or Coke exclusive, and once we are on those campuses, making the most out of it,” he explained, noting that Compass Group’s distribution reach will also allow the brand to follow graduates from the classroom to the office. Sunniva’s college ambassadors will also continue to play a pivotal role as the brand’s eyes and ears on the ground. “Compass may serve 10 spots on campus,” DeCicco said, “but students will let you know that only two of them are popular or worth your time, so you can get more students going to one or two spots. Once we have that list, we’ll get it into the most popular convenience stores on campus.”
As for the company’s structure, Sunniva is decidedly a family affair. After taking a year off from school to focus on building the brand in 2015, DeCicco, who participated in New Beverage Showdown 12 at BevNET Live Winter 2016, brought in his older brothers Jimmy, 24, and Jake, 23, to serve as CEO and COO, respectively. The company, which now has six full-time and seven part-time employees working from its home base in Washington D.C., will be launching a rebrand this July, and plans to expand to more colleges in the Mid-Atlantic and Northeast regions later this year.
Considering he managed to get the company off the ground while averaging over 15 points and 4 assists per game for the Philadelphia University Rams this season, DeCicco has had an impressive semester all-around.
“At first it was definitely stressful, but I had a lot of help from my brothers and Philadelphia University did a great job with my classes. They understood my situation and so did my coaches,” DeCicco said. “The great thing is I’m passionate about it. I’m excited to do these things, and that’s what keeps me going.”
For these young entrepreneurs, their experiences running a beverage startup in college may turn out to be as valuable as their actual degrees.
“One of the biggest things that people ask me is how did you start a startup in college? How did you have time?,” said Miller. “My answer always is how do you not start a startup in college when you have so many resources at your fingertips?”