Success in the beverage industry is often a journey of adaptation, trial-and-error and finding a brand’s true calling. For cold coffee manufacturer Snapchill, that journey has led it from its roots in the Northeast to a new production hub in the Midwest that’s the lynchpin of its ambitions to become a major disruptor in the ready-to-drink space.
The concept behind Snapchill has remained the same since the Massachusetts-based company launched in 2017: a proprietary system for quickly cooling hot coffee without dilution (also known as “flash brew”), a process uniquely suited for preserving the unique flavor notes and aromas of premium single-origin coffees.The company has tried a variety of tactics to exploit that technology with limited success, except when it came to acting as a co-manufacturer.
In the last two years, the brand has added larger clients to its national network of artisanal roasters and utilized strategic partnerships to help bring more specialty brews to the growing RTD coffee category.
Formerly named Elemental Beverage Co., Snapchill began as a passion project for co-founders David Dussault and Michael Corrado in 2011. Using Dussault’s background in mechanical engineering the two developed a business around making quickly chilled coffee using a process similar to air conditioning or refrigerator technology. The patented Snapchill tech rapidly cools hot-brewed coffee, maintaining the nuances of flavor without watering it down with ice or the time and additional beans necessary for cold brew.
During its six years, the company has tried a variety of business paths from a commercial, instant cold coffee machine to a number of branded and co-branded canned varieties. But the last year solidified what had already been brewing for some time. The team realized its tech is best used to bring unique house blends of regional coffee roasters to grab-and-go cans thus providing an easier path to market for specialty brands.
Along the way, it has added larger accounts to its client list including an upcoming partnership with Chicago-based brand Intelligentsia Coffee.
The opportunity in the cold coffee category cannot be understated. Daily cold coffee consumption has increased 8% between late 2022 and October 2023, according to a survey by the World Coffee Portal. Younger consumers (under-35) are driving sales in iced coffee, with 79% of the demographic typically purchasing an iced beverage at least once a week.
In May 2022, distribution and logistics provider Englewood Marketing Group (EMG) took an equity stake in Snapchill becoming an “equal partner” with ownership of roughly half the company, Dussault told BevNET.
Since then, Snapchill has closed its smaller Watertown, Massachusetts facility and centralized production at a new 20,000 square-foot manufacturing center and distribution hub that can utilize EMG’s larger shipping, logistics and ecommerce services — as well as EMG’s two fulfillment centers in Savannah, Georgia and Los Angeles — to better serve its coffee roaster partners.
“It was a natural fit,” said Kyle Bosshardt, Snapchill’s director of business development, with Snapchill increasing its capacity to 25 million cans annually in the bigger space and the opportunity to extend that production to 50 million in coming months.
Dollar sales in RTD coffee have been on the rise. In the last 52-week period ending December 30, the category notched $3.8 billion, an increase of 2.2% during the period, according to an analysis of NielsenIQ data by Goldman Sachs Equity Research. Though sales are up, volumes last year were down -1.9% with average pricing rising 4.1%.
The need for more space and manufacturing muscle became apparent this past summer when the brand partnered with brand strategy consultant and accelerator The Hatchery Group in a pilot program that dramatically accelerated Snapchill’s growth by linking it to Walmart.
The Hatchery Group’s pilot program was two-fold. The first half included Snapchill collaborating with Oatly and Local Hive Honey to produce a new RTD coffee product called In A Snap that was sold in about 800 Walmart locations.
The second part of the program teamed Snapchill with 20 roasters from Hatchery’s Local Collective program to produce cans of cold coffee and sell them in about 2,200 Walmart stores.
Through its work in the second half of last year with In A Snap and the Hatchery pilot program, “we learned a lot about placements…what works and what doesn’t,” Bosshardt said.
In A Snap was discontinued as “sales were good but not great,” he said; Walmart suggested that Snapchill refocus from launching a new brand and, instead, expand its partnerships with established roasters through ecommerce.
With help from The Hatchery Group, Snapchill is in the process of building a regional ecommerce platform on Walmart.com that will launch in February and bring the coffee company’s network of around 300 specialty roasters into the retailer giant’s online store.
How it works is similar to how Snapchill currently operates as a co-manufacturer and distributor. The company works directly with a local roaster on the specs of the canned product from label design to liquid. Snapchill purchases the beans from the local roaster, creates the product and dropships each order as they come through the Walmart.com platform.
The brands chosen for the Walmart collaboration will include those already on the site, ones that show good velocities in ecommerce and companies that are able to keep up with rapid expansion. All of the featured products will have Snapchill logo and name on the can as well as an explanation of the co-packer’s production process listed in the online product description.
“The hurdles to get a small roaster into large retail are quite significant,” Bosshardt said. “Which makes sense because a retailer needs to make sure that whoever they get in can support whatever business ends up happening.”
Snapchill can work as a middleman between the roaster by co-manufacturing and fulfilling orders while also “buffering” the relationship between Walmart and the smaller businesses that have less experience working with a retail chain of that scale, he said.
“The largest benefit for Snapchill is increased exposure to the consumer,” Bosshardt said. “Ultimately, our only hurdle is to continue educating consumers on what the Snapchill process is and why it’s superior to other cold coffee production methods. The best way to increase consumer education is to increase exposure. Having the cans integrated into both Walmart.com and brick-and-mortar stores will reach larger audiences nationwide.”
Through the initial Hatchery-Local Collective partnership, Walmart has expressed interest in investing in local communities and opening up opportunities for emerging brands. In the RTD and cold coffee set, the retailer recently brought in Chamberlain Coffee’s oatmilk lattes and added Pop & Bottle cold brew concentrates in 2022.