He still wasn’t sure if the brand would take off. A hopeful sign came when he exhibited at the Canadian Restaurant and Foodservices Association trade show in Toronto, going all out with a booth made up like a seventies’ rec room. Tears welled in the eyes of visitors as they shared memories conjured up by the brand.
But he knew boomer nostalgia alone couldn’t carry his venture, since it’s young people who buy most soda pop. Beverage World’s Kergl doesn’t sugar-coat the challenge: The market’s current sweet spot is energy and so-called functional drinks such as vitamin water. “Most [store]buyers would ask, ‘Why do I need another brand of soda?’” Kergl says. “They look at Pop Shoppe as a me-too to Jones and Dad’s.”
Consider this, says Kergl: A typical 7-Eleven or Rexall pop fridge has eight doors. Coke and Pepsi each have 1 1/2 doors; Gatorade has another; after water, dairy and other categories, you’re left with one door for premium drinks. Each brand wants to commandeer one of the six shelves, but that’s a tough sell when there’s a new product on the market every few days. “The buyers are always looking for something new, niche, innovative and functional,” says Kergl. What’s more, the slotting, or listing, fees that some chains charge just to take on the product can be prohibitively expensive for a small company.
The Pop Shoppe’s unimpressive packaging didn’t help matters. “Nobody was telling us, ‘Listen, your package is crap, that’s why we’re not listing you,’” says Alger. “They’d just say no.” Cue some more Alger luck: In 2005, determined to find a new bottle company, Alger attended a beverage trade show in Orlando…that happened to be preceded by a major hurricane. In the nearly deserted hall, he came upon the booth of Vitro Packaging, one of the world’s biggest glass manufacturers, tended by a bored-looking guy with his cowboy boots up on a table.
After Alger explained his problem, the man gave him his card and the name of a sales rep. “I look at this guy’s card and he’s the president of Vitro,” says Alger. “I call the sales rep; now he thinks I know one of the top guys and agrees to bring me on as a client.” A big break: Companies like Vitro usually demand minimum runs and a long corporate credit history; Alger would have stumbled on both hurdles.
That same year, Alger got a call from a new Toronto design company run by three young guys who loved the old brand and had heard of its revival. Great, thought a weary Alger; maybe they want to buy me out. He’d have been happy to walk away at that point: “Oh yeah. It was such a struggle.” Instead, the trio behind Amoeba Corp. offered to refresh the brand at low cost, seeing it as a way to establish themselves. They updated the logo and conceived grassroots marketing tactics like having Alger drive around in a 1978 VW van handing out pop on the streets.
By 2006, Alger had his premium package and things started to turn around. The Pop Shoppe got picked up by Costco, Kitchen Table and Hasty Market, and then Zellers took it nationwide. Restaurants, however, remained a problem. Food service distribution is ruled by two companies—Sysco and Gordon Food Service—and they wouldn’t take on the Pop Shoppe.
Luckily, a restaurateur in a remote corner of New Brunswick, who was buying Pop Shoppe retail at Zellers to offer it to his customers, persuaded Gordon to add it to its regional listings. While Alger is hopeful this will lead to a national deal, it’s a limited market for him because Coke has a stranglehold on restaurant beverage sales. Any eatery with a Coke contract is prohibited from selling other carbonated drinks. Alger knows someone with a chain of poutineries who can’t get the Pop Shoppe into some locations. “And he’s one of my best friends!”
Another sales channel that’s proven difficult is supermarkets. The high product-listing fees—as much as $100,000 per product just to secure shelf space—are risky. “If Loblaws came to me today and said, ‘We’ll give you four facings in our beverage aisle, you pay your listing fee and we’ll see how you do,’ I don’t think I’d take the business,” says Alger. “You gotta sell a lot of Pop Shoppe to pay back that listing fee, and if you don’t do it in a short time, you’ll lose your listing, and you’ve lost your listing fee.” Besides, while a convenience store or gas station shopper may drop $1.79 on a bottle of pop, the supermarket consumer is looking for deals, and $12 for a case of Pop Shoppe is almost double what a private-label or mainstream brand goes for one shelf over.
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