From the brand name to its distribution strategy to its caffeine content, everything about Blackeye Roasting Co.’s approach to cold brew coffee is on the slightly aggressive side.
The Saint Paul, Minn.-based company, founded in 2014 by Matt McGinn, has found a receptive audience in the Midwest for its line of shelf-stable regular and nitro-infused canned cold brew coffee, which are sold at over 1,000 locations, including retailers like Whole Foods and Hy-Vee. But as the company looks to use its new 28,000 sq. ft. production facility as a springboard for further retail expansion and product innovation, Blackeye is aiming to take on the likes of Starbucks and Monster Energy inside convenience store coolers.
“We are branded more like an energy drink than a coffee,” McGinn told BevNET, noting the potent caffeine content in both its regular (200mg) and nitro (260mg) SKUs. “We are going after rural market, high-chain convenience stores. We are getting placements in some large supermarket chains across the country as well, but our primary focus is getting placed right next to Starbucks in the cooler, letting them teach the world what cold brew is and then have us next to them in our sleek 12 oz. can.”
The key to this positioning is creating preservative-free, shelf-stable products that do not require expensive cold chain distribution, a strategy that brands like High Brew and La Colombe have pursued in recent years. Blackeye’s 12 oz. cold brew cans have a 16-month shelf life, which has enabled the brand to partner with beer distributors — which might otherwise decline to distribute perishable non-alcoholic beverages — subsequently opening the door to placements in gas stations, convenience stores and a broader range of retail locations. The brand’s products are currently distributed through the Anheuser-Busch network in both Wisconsin and Minnesota.
“The way we are making our brews basically allows us to distribute with anyone in the country,” he said. Having established a foothold in the Midwest, the brand will expand to Missouri, Texas, Kansas, Ohio and Pennsylvania in the coming months, with the goal of being in 25 states by next year. He continued: “The difference between us and any other company that does cold brew is that they might get into the local co-op or Whole Foods, but they are never going to get into the gas stations. Our model was always direct store delivery (DSD) distribution with a shelf-stable product that can compete with energy drinks.”
Blackeye’s new $2 million production facility is a critical component of its expansion strategy. McGinn said the plant will output between 100,000 to 200,000 gallons of cold brew each month, and has enough room to potentially double or triple that capacity in the future. Moreover, the facility will enable the company to produce coffee concentrates, explore further innovations, and provide unique co-packing and product development services.
“We have positioned ourselves to be a proof-of-concept prototype facility,” said McGinn, noting that the company works with beverage business consulting firm BevSource to create prototype packages for clients. “If you are a beverage company and you want to finalize the package of what you are looking to do but you just want 200 cases instead of 100,000, we do that for a fee. It’s expensive, but nobody in the country can get you your proof-of-concept in the actual can or bottle with the label. We’ve done it once, we’re going to continue to do it and try to turn it into a business.”
McGinn said the brand is planning further RTD innovations, including non-dairy chocolate and white chocolate varieties that will contain under 160 calories each. A protein-infused cold brew SKU — which will contain 25g of protein, 200mg of caffeine and under 200 calories per can — is also forthcoming. “It hits on all the points in the industry that people want,” McGinn said, noting that the new variety will include more than twice the amount of protein as High Brew’s protein cold brew, which has 12g.
As Blackeye pushes further into RTD, which represents about 85 percent of the company’s business, McGinn admits that other aspects of the business have become less of a priority. The company provides hot coffee service to offices and at its two cafe locations in the Twin Cities, but McGinn characterized Blackeye’s brick and mortar presence as more like a taproom where the company can interact with its customers. It also offers cold brew on draft to food service, though the company encourages bars and restaurants to buy its cans to reduce the expense of transporting and preparing kegs.
Along with marketing, distribution or even new flavors, McGinn sees product safety as one of the most pressing issue in the development of the RTD cold brew category. Last month, nitro cold brew company Death Wish Coffee made headlines after it issued a recall of its nitro cold brew following a peer review that showed their canning process could potentially lead to the growth of clostridium botulinum, the bacteria responsible for botulism. Citing the case, McGinn predicted that other cold brew companies could potentially run afoul of FDA regulators for not properly sterilizing their products.
“It’s the Wild West,” said McGinn of the current regulatory landscape for cold brew manufacturers. To address the issue, Blackeye installed a retort machine in its new facility, which McGinn said can be used a a tunnel pasteurizer to heat treat any kind of can, or potentially a bag-in-box format. “We are going to have regulation in the industry, and we are ready.”
Yet Blackeye is already looking beyond its core product; earlier this year, McGinn, along with two partners, launched an alcoholic cold press coffee brand called Bad Larry’s. Sold in 4-packs, each can contains 180mg of caffeine, 19g of sugar and 6 percent alcohol by volume. Though McGinn said that sales have been slower than expected after the brand received extensive press coverage upon launching, he expects turns will increase this fall when the company unveils two new SKUs: salted caramel and a citrus mango cold brew. Blackeye also sells its coffee concentrates to Bad Larry’s.
With the new facility up and running, McGinn sees a range of new opportunities being unlocked for Blackeye.
“In terms of production and capacity, we’re soon not going to be considered just a craft cold brew company,” he said.