Family-owned investment firm Continental Grain Company (CGC) has taken a minority stake in Joyride Coffee Distributors for an undisclosed sum, the first outside investment for the keg distribution house.
Speaking with BevNET on Monday, Joyride co-founder and CEO David Belanich said the company had spent its first eight years building a business that now provides coffee, kombucha, tea, and sparkling water in kegs to office and restaurant accounts in four markets including Northern and Southern California, Massachusetts, and New York, which are collectively serviced by two production facilities and four distribution centers. In January, Joyride announced it would begin producing and distributing Starbucks brand draft cold brew and nitro cold brew for the coffee giant’s foodservice accounts at hospitals, bookstores, colleges and offices in New York, Boston, San Diego, San Francisco and Los Angeles.
To take the company to the next stage of its growth — including a planned West Coast expansion in 2020 — Belanich said Joyride had to look to outside capital. He said he and his brothers and co-founders, Adam and Noah Belanich, were looking for a long term minority investor that would allow them to retain control of the company. Like Joyride, CGC is family-owned, and the firm understood the Belanichs’ wishes. CGC will take a seat on Joyride’s board of directors, he added.
According to Belanich, the scale of the business was growing beyond what the brothers could keep up with on their own. The new funding will immediately go toward constructing a new production facility in Bakersfield, Calif. which will allow the company to produce 20,000 gallons per week with room to triple the capacity over the next few years. The facility, he said, will meet Joyride’s product needs for the next decade.
“We’ll be able to produce kegs for tea and coffee for more brands across the country looking to get into the cold brew game,” Belanich said. “Over the past few years we’ve had many, many more requests than we’ve had the ability or capacity to pursue, which has meant saying no to some really great opportunities.”
Joyride plans to open more doors in its existing markets in 2019, he added, with a focus on fast casual restaurant chains.
Over the past year, Joyride has benefited from distribution partnerships with established brands, most notably Starbucks. According to Belanich, the partnership has given Joyride access to accounts it “normally wouldn’t have had access to,” including major universities and Fortune 500 companies. The company has also venturing further outside of coffee, producing its own cold brew teas and growing its draft kombucha business with brands like GT’s Living Foods and Whalebird Kombucha.
“Our cold brew teas, we’re very happy with them,” he said. “It was hard at the beginning but now people are very convinced by the format. Draft beverage is now something that cafes, when they’re being built, make room for a kegerator in their space from day one. So it’s no longer so much us coming in there and showing them the kegerator, it’s shifted now. Offices expect to have them. And that goes for the JP Morgans of the world to tech companies.”
Partnering with CGC also offers Joyride connections to beverage strategics including JAB Holding Company, of which it is a capital partner, as well as Nestlé, PepsiCo, and Anheuser-Busch InBev. However, Joyride doesn’t intend to sell to a conglomerate for the foreseeable future.
“[CGC is] familiar with the industry, but we didn’t necessarily want to become a Nestlé-allied or JAB-allied business but to forge our own path and continue to be a provider to everybody,” Belanich said.