As the COO of Brooklyn-based distributor Master Beverages, Aleks Veygs is, by his own admission, picky about the brands he chooses to partner with. That’s not surprising; beverage distributors everywhere, but particularly in a highly competitive market like New York City, know that miscalculating the potential popularity of a brand or category can spell major headaches. But he also acknowledges the added value he, through his experience in product development and pilot runs, and the distributor, via a network of relationships and partnerships throughout the industry, bring to the brands they work with.
“We’ll only take brands that will help us in order to help the other brands in our portfolio,” he said. “Ultimately, Master Beverages is not only a distribution company, it’s a network.”
As such, Master Beverages offers brands two options: pay a sign-on fee, or bring something intangible to the table — a retailer relationship or access to resources, for example — that could potentially be mutually beneficial for all the brands in its portfolio. That flexible approach has helped helped the distributor navigate the unique challenges and obstacles of DSD beverage service in New York City. The company currently services 6,208 accounts in the city’s five boroughs, and has some presence outside in the city in Westchester, N.Y. and the three major airports that service the Tri-State Area. The distributor’s current team consists of 11 sales reps and a fleet of eight trucks, with another three to be added soon.
As Veygs sees it, shifts in the marketplace have made his experience in product development and small run production more valuable than ever. Before joining Master Beverages in November 2017, Veygs had already spent years working in the beverage industry, having launched several of his own brands and worked on pilot runs for several fast-growing companies, including MatchaBar and Detoxwater.
However, after several stops and starts with his own projects, Veygs became more interested in learning about the brokering and distribution side of the industry. With a veteran sales team working accounts up and down the street, Veygs has been able to focus on bringing in business on the back end, where his experience has given him an edge with young brands in need of a partner.
“My experience works as an asset because there are some brands that need help with fixing their formulas, adding more SKUs, improving manufacturing, or other issues,” he said. According to Veygs, the company has grown four-fold over from November 2017 through this May. “I figured out a way to grow at a maximum level with minimal financing.”
The distributor is betting that its low cost, high impact strategy will pay off, even as it competes with powerhouse New York suppliers like Big Geyser, Dora’s Naturals and Rainforest. Recently, according to Veygs, the distributor has enjoyed strong sales from brands selling zero-calorie sparkling waters and sodas, such as Polar and Zevia, and in premium juice. On the other hand, specialty teas are faring less well. “We have juices at 12 oz. that are at $5.99 MSRP that are selling better than the tea that’s 12 oz. at $3.49,” he said.
Veygs said the company is looking to grow in a healthy way, meaning it has held off on entering trendy categories like cold brew coffee and kombucha that require cold chain distribution. The company’s only refrigerated beverage brand is premium limeade Limation, which has a six-month shelf life. Veygs said the company will likely be ready for cold distribution by next summer, but noted that a product’s functionality is ultimately more important than its shelf stability.
“My thought is that if [a product] doesn’t have functionality, don’t market it,” he said. “Through my experience, I know how much the functionality is going to cost to implement; it’s very inexpensive to do. If you are going to do another juice, energy drink or anything that’s been mainstream already, give it a base of functionality to stand on — give consumes a reason to spend that money to buy a 12 oz. bottle for $3.99.”
Veygs is following that principle with is own independent beverage products that he is developing, which include Genesis, a nano silver-infused water; Mex 2o, a mainstream version of traditional Mexican agua fresca; and Bolder, a “full recovery beverage” from the Boulder Beverage Company that combines elements of sports drinks and meal replacement beverages. Each brand is independent from Master Beverages and each other, and Veygs retains a stake in each separately.
The system of trading favors isn’t without its own challenges, however. Veygs said Master Beverages is currently looking for two other distributors with whom it can share warehouse space and potentially sell some of each other’s products. The company has plans to purchase its own space in the future, Veygs said, but he noted that its short term priority was to direct the majority of cash flow towards buying more product.
“I enjoy a good challenge,” he said. “Because of our experiences and our connections, we know exactly what’s happening in the market. We are that traditional distribution model and expound it to every other channel that we can get into. We’re not doing what Big Geyser, Dora’s Naturals, Rainforest or the other guys are doing. We are doing it the Master Beverages way.”