“That’s when I first heard the term,” recalls Alger. “I left feeling I just had to figure out what to do with it.” So heartened was Alger that he drove from the meeting straight to Holt Renfrew and bought his wife a Louis Vuitton bag she’d been hankering for. “After that, I didn’t make money for two years.”
A small man with blond-streaked hair, clad today in jeans, a lilac shirt and a black leather jacket, Alger is understated and down-to-earth, eschewing nouveau riche flash (though those streaks come courtesy of a swanky Bloor West salon). Sipping a coffee at a Tim Hortons around the corner from the bottling plant, he merrily chuckles at his early naiveté. A high school dropout, he’s been an entrepreneur all his adult life—starting with a fast-food delivery service at 19 and moving on through an importing business and an Internet café—but all were modest successes at best, providing him with little more than a job.
In 2002, he was sitting around with friends talking about the fate of various brands when the Pop Shoppe came up. The original company was launched in 1969 by two university grads in London, Ontario. They built a national network of franchised stores, to which customers took their empties for refills. At the peak, the chain was selling a million bottles a day. It became a cultural icon, with NHLer Eddie Shack as pitchman and Pop Shoppe coolers a staple of school dances and Little League games.
Selling at 10 cents a bottle, the Pop Shoppe was a discount alternative to Coke and Pepsi—until the two giants launched a price war in the 1980s. The subsequent ascendance of store brands squeezed prices even more. “By then, people found it a pain in the ass to go to the Pop Shoppe to get pop at a price you could get at Loblaws,” says Alger. The company went out of business in 1983.
After that chat with friends in 2002, Alger did some digging and discovered that the trademark had been abandoned by the venture capital company that had bought out the original owners in the late 1970s. So he re-registered it, with no plan beyond enjoying the bragging rights.
When he did poke around the soft drink market, Alger quickly saw that the supermarket mainstream was a non-starter for a newcomer. But the premium sector, where 355-millilitre bottles retail for around $1.50, offered some margin. He jumped in, learning everything he could about the business, attending trade shows and seminars. Looking up his notes from the earliest days, he sees scribbles like “what’s a CSD” with a huge question mark (that’d be “carbonated soft drink”). At one seminar, he listened to Peter van Stolk, founder of Jones Soda Co. “It was like seeing a messiah,” Alger recalls. “But he was so on a high horse up there. I was going, I’m surprised they didn’t rent a second hall just for his head.”
The Seattle-based company was near its peak then, doing some $30 million (U.S.) in sales on the strength of its alternative cool and innovative marketing moves, such as putting Jones fridges into youth-filled electronics stores. Alger wanted that success, but with a retro spin—a marriage of über-hip Jones and old-fashioned Stewart’s Fountain Classics.
In 2004, he relaunched the Pop Shoppe. He had obtained rough formulas for the flavours from a supplier to the original company, and also by buying unopened Pop Shoppe bottles from collectors on eBay and reverse-engineering the flavours. The first production run of Lime Ricky came out Frankenstein green. It turned out that Alger—for whom the flavour formulas might as well have been written in Greek—had got the colour formulations wrong. That was $1,500 literally down the drain. The first labels were also a disaster. Alger couldn’t afford painted bottles, and the labels he printed looked pale and washed-out. By year’s end, however, having spent almost $60,000 of his $80,000 in savings, he had a rented warehouse full of bottled pop. Now he just had to figure out how to sell it.
Distribution, beverage experts will tell you, is the toughest challenge for new brands. Alger soon realized as much. He sent information packages to gas station operators, supermarkets, convenience chains. No. No. No. Every distributor said the same thing—except Beverage World, a Hamilton-based distributor/wholesaler of niche drinks that had carried SoBe and Stewart’s.
When Alger showed up to meet with one of the owners—who, luckily for Alger, fondly remembered the Pop Shoppe—his primary concern was hiding his ignorance. His timing was good: Beverage World was looking for an exclusive deal with a new premium brand. Alger walked out with a contract and a huge sense of relief. Not only did he have a partner with established retailer relationships to handle sales, but Beverage World would also deal with warehousing, shipping, accounts receivable and other back-office functions. “I have just one customer,” says Alger. “Everything flows through them.”