Best Practices
Aug 5, 2022
TLDR
BrüMate, led by founder Dylan Jacob, quickly scaled in the beverage holder market by employing innovative strategies. Jacob's prior entrepreneurial experience enabled him to develop cost-effective approaches to product development, resulting in $36 million in revenue in three years, later growing to $100 million. He embraced a mix of online direct-to-consumer (D2C) sales, Amazon, and physical retailers, with a strong online sales focus. Key strategies included creating demand before product development, experimenting with distributors after building a D2C base, and using multiple distribution methods to boost brand awareness, allowing BrüMate to thrive in a niche market while retaining full ownership.
There are many options for coffee mugs, water bottles, and thermos out there. But what if you needed something to hold your beer? (We don’t mean the meme, but there’s that too!)
For BrüMate founder Dylan Jacob, starting the company was not his first rodeo. His experiences from two previous businesses helped him in figuring out more efficient - or “scrappy” - ways to develop new products, while keeping costs low. So much so that in three years he hit $36m in revenue - all while retaining full ownership of the company. Two years later, he has managed to scale the business to $100m.
Much of his success comes from Jacob’s passion for invention, and drive to create never before seen products - such as the idea that sparked it all, a beer koozie that could hold 16oz cans. While starting a business with newly created products may seem daunting to a first time entrepreneur, Jacob was unfazed by the challenges of catering to a niche market. He was prepared to introduce his products and grow demand for it on his own.
Jacob maintains a mix of online D2C sales, Amazon, and physical retailers to keep his business expanding rapidly. However, he believes that the online market is the key to his success. As seen below, traffic to their website has been rising steadily over the past few months, with 1.1m visitors in June. (Source: Similarweb)
While the company’s growth potential is created by constant innovation of new products, it is the growth strategies that led the business to success. Let’s look at three growth strategies Jacob uses for his business.
Create demand before creating products
With limited starting capital, Jacob wanted to be sure that he would have buyers for his new creations. For his first product launch in 2016, he started by collecting about 7000 email addresses of interested buyers. Then, he invested under $10k into inventory of the initial prototype, and started collecting pre-orders with around 2-4 weeks of manufacturing lead time. By doing his own version of Kickstarter, as it were, he was able to get products into customers’ hands without too long of a wait. The results? In November and December of 2016, the first two months of business, he made $270,000.
Jacob was using Facebook Ads as his main promotion tool, although with increased costs of advertising he has since moved on to other avenues. In 2018-2019, he started putting 25% of his marketing budget into new channels like TV, podcasts, SMS, and Snapchat ads.
Experiment with distributors only after building a solid D2C base
Jacob started testing sales on Amazon only after gaining success with his own store. While he faced concerns about Amazon cannibalizing his own direct sales, the growth opportunity was too great to ignore. In 2019, the company also experimented with trade shows as a means of growing their wholesale market.
The way Jacob sees it, each of BrüMate’s three distribution channels represents a different kind of customer. “There’s overlap,” says Jacob. “But all three channels can survive on their own… as long as you separate out the channels appropriately and make sure that each channel has something unique to offer.” As an example, the BrüMate website will always be the first to drop new product lines, restricting access to direct customers during launch period sales.
According to an unofficial report, D2C sales are estimated to be $20m-25m, which means Amazon and wholesale retail distribution make up the remaining $75m-80m of BrüMate’s current revenue.
Improve your DTC game. Sign up for weekly tips.
Use multiple distribution methods for complementary results
Jacob’s efforts in working the three distribution channels are paying off in more than just actual revenue - it’s also helping with brand awareness. Sales outreaches and distribution on larger platforms is allowing more people to know about BrüMate, and hence find them organically online through direct or search channels.
Not one to rely solely on inbound marketing, Jacob made sure that BrüMate was present at several trade shows around the United States during the pre-Covid period in 2019. They have permanent booths at three gift shows, namely Atlanta, Dallas, and Las Vegas, which they have found extremely valuable to the growth of the business. Additionally, they have a contract sales force of 12 independent groups and ~100+ reps across the US whose work is to grow and service wholesale accounts.
The results are paying off. With the brand awareness raised through the abovementioned efforts, BrüMate is enjoying a whopping 50.8% of direct traffic to the site, with another 36.5% coming in from search. (Source: Similarweb)
BrüMate’s story shows that no matter how niche a market may seem, a successful D2C brand can be created by combining prior experience and knowledge with a drive to constantly push for growth.
These pre-designed analysis can make you understand your customers in more detail to help prioritize strategies to attract them:
