Chameleon Embraces Versatility As Path to Total Coffee Platform

Versatility is a chameleon’s greatest strength and, in that sense, Chameleon Cold Brew is living up to its name.

Even before its acquisition by Nestlé last year, the Austin-based coffee company has been active in exploring ways to translate its brand identity into new formats and styles, both in ready-to-drink and dry packaged coffee. According to data from IRI, Chameleon was the best-selling coffee concentrate, with approximately $13.7 million in MULO plus C-store sales, during a 52-week period ending on March 25. During that same period, Chameleon RTD products brought in over $4 million in sales.

Having established itself with RTD cold brew and cold brew concentrates, Chameleon has subsequently entered other sections at grocery stores. Last year, the brand launched a pod-based product for at-home cold brew preparation as well as a variety of whole bean coffees. At Natural Products Expo West 2018 in March, the company shared its first dairy-added product, a three-SKU line of organic coffee and whole milk blends in a 46 oz. multi-serve bottle.

Speaking with BevNET, Chameleon co-founder and CEO Chris Campbell explained that the recent moves were part the company’s strategy to build a strong brand identity that could be translated across various retail channels and product use occasions.

“What we do at convenience stores is not necessarily what we should be doing at a conventional grocery store or a natural retailer,” said Campbell. “We want to make sure we have appropriate offerings where consumers can find us in any of those channels.”

With the backing of Nestlé, the world’s largest coffee company, Chameleon has the resources to match its ambition: to position itself as an emerging coffee platform and not just a cold brew company. Campbell noted, however, that the deal has not been a major point of discussion with retailers as of yet, and emphasized that Chameleon hasn’t changed its management structure or team since the acquisition.

“We have access to resources we never even contemplated in the past, in terms of research, development, manufacturing, data analytics, training, personnel development and recruiting,” he said. “When we need them they are there.”

In an increasingly competitive coffee market, those resources could be vital. While Starbucks continues to lead the RTD category through its North American Coffee Partnership with PepsiCo, consumers interest in premium coffees and different use occasions has fueled the growth of emerging brands such as High Brew, La Colombe, Stumptown and Califia, among others.

While he admits that coffee brands are “all looking at each other all the time,” Campbell said that the shared attention has helped push Chameleon towards trying different things, even within well-worn segments. To illustrate the point, he traced the inspiration for the new dairy-based line back to a drink he tried a local cafe while on a coffee buying trip in Costa Rica. “That was where the inspiration came from, not from ‘well, there’s a lot of people who have milk with coffee,” he said. “In some sense, we will probably attract a consumer that’s buying somebody else’s product that was looking for less sugar, or organic [ingredients], or more coffee and less dairy.”

Likewise, Chameleon’s sparkling cold brew line, first showcased at Natural Products Expo East 2017, was born out of the company’s staff making their own bubbly cold coffee drinks during the sweltering summer months in Texas.

“We’ve been doing Topo Chico plus simple syrup and flavor in the office and at the demo table since the first summer we started the company,” said Campbell, adding that the sparkling line had been in development for over a year before it was shared with the public. Like Stumptown’s sparkling cold brew, Chameleon’s product is still in a pilot phase, according to the brand.

“We go places that we think have opportunity,” he said. “We do survey the market to try and be a little bit different; if we come out with a flavor profile that’s unique and not another ‘salted caramel hazelnut’ whatever, then we’re going to try and do that.”

Beyond retail, Campbell said Chameleon is also in the early stages of exploring opportunities in food service, an area which he noted presented a unique challenge for the brand: finding a place for branded coffee in a channel where restaurants and retailers can make their own brews at a higher margin.

“How do you get cold brew into those accounts where it’s good for the brand, as in it’s a branded item on the menu, but the economics are still very good for the retailer?” he asked. One possible way is to present it as a premium ingredient in a high-demand menu item, which Chameleon has done with milkshakes at Colo.-based fast-casual restaurant chain Smashburger, which operates approximately 350 outlets nationwide. “With Nestlé, we have access to some fantastic people in food service. That’s certainly an area we’re going to go after and have to learn a little bit [about].”

As Chameleon looks to push further into all areas of the retail coffee business, Campbell said the brand’s progress will be measured in its ability to stake a claim to new areas while retaining its hard-earned gains.

“Without giving away our strategy, we’re going to protect what we have,” he said. “We want to continue to do well and support the retailers we have with the products we have. And then when we see new opportunity in RTD or other areas, we support them, but not in a crazy stupid way. We’re not going to throw money at things just to throw money at them.”