“There are many dozens of cold brew companies out there, but the thing to think about with cold brew is that there are low barriers to entry in the cold brew category. All you need is a decent brand, a bottle, coffee, and water,” co-founder Trevor Smith told BeverageDaily.
Within the RTD coffee segment, cold brew US retail sales have grown by 450% between 2015 and 2017 reaching an estimated $38.1m.
“You’ll find over time that a lot of these smaller companies, if they didn’t start early enough, they’re going to have great difficulties.”
Trevor Smith and his wife Rebecca were making cold brew coffee batches out of their home kitchen and selling it at the Los Angeles Farmer’s Market in 2011 when cold brew was still a new concept to many consumers.
“I think we made $75 for that first Sunday,” Smith said. “We spent all our time at the farmer’s market basically telling the story over and over. Luckily, we started with a product that people love already; people love coffee.”
Once Secret Squirrel became a popular stop at the farmer’s market, the company expanded to its first café, then local grocery store, and eventually a regional Whole Foods.
“We were growing faster than I had time or money to support,” Smith said. “It was necessary to either get a lot more money or find a partner that believed in the product and would help us grow.”
To support its growth, Secret Squirrel was acquired by Pure Steeps in 2016, a division of international specialty tea conglomerate Harris Freeman, with a focus on “new wave” beverages like cold brew coffee.
Now, Secret Squirrel can be found in major retailers throughout the West Coast and the Northeast region including Target, Whole Foods Markets, Safeway, New Seasons (in the Pacific Northwest) and other regional grocery stores.
“We expect some things to be happening for us in the Springtime. We just opened a UNFI distribution center in the Midwest –so that’s going to open up some opportunities for us there.”
Smith added he also working closely with Harris Freeman’s R&D team based in New Jersey on new flavors and product varieties.
“We’ve been growing, we’re scaling production of a consistent quality product and we have the resources to support the product.”
Business after acquisition
Aside from expanded distribution and access to expertise in R&D and production operations, Secret Squirrel had to adjust its production process, which included high pressure processing (HPP).
“As part of that acquisition, we basically needed to create a product that had less risk because up until then, I had not been pasteurizing the product and I had not been HPP’ing the product,” Smith said.
'It was necessary to either get a lot more money or find a partner that believed in the product and would help us grow,' says co-founder Trevor Smith.
“What we’ve experienced is that keeping heat away from our final product helps increase the quality and taste of the flavor. With HPP, we’re able to replicate that RTD farmer’s market experience in the bottles.”
Prior to the acquisition, Smith said he barely had time to visit the stores where Secret Squirrel was stocked and respond to consumer feedback.
“We’ve been able to support our current customer properly and that means actually visiting the stores, merchandizing our product, making sure it’s on the shelf,” he said.
Getting in store is half the battle
Tackling product merchandizing and positioning in-store was a challenge for Secret Squirrel prior to being acquiring, according to Smith.
“Getting the sell into the store is only half the battle,” he said.
“Some stores are very organized with merchandizing and making sure your product is stocked and faced properly on the shelves, and some stores are not at all and it’s really like the ‘Wild, Wild West’,” he said.
With support from Pure Steeps, Secret Squirrel has expanded its team to regional brokers, merchandizers, and employees conducting in-store product demonstrations.
“There is an expectation for a certain level of support of your product in stores like demoing, providing discounts, and promotions,” Smith said.
“That’s why it’s great to have a much larger company support us so we stretch and go to these places and properly support the products.”