The Switch: Changing it Up in Schools
May 1, 2005
The Switch: Changing it Up in Schools
By Elizabeth Fuhrman
When California lobbyists were fighting to remove soft drinks from their school systems, they also were battling to keep a particular carbonated beverage. The Switch, based in Richmond, Va., offered the school systems a 100 percent juice alternative with nutrients that were attractive to adults and a bonus to entice kids – carbonation.
The Switch’s first move into California schools came from a group of nutritionists, parents and legislators in the Santa Barbara area, who saw and sampled the product in local retail outlets. The group’s issue in removing soft drinks and other snacks was obesity in the schools. “They were trying to get these kids off of non-value-added sugar and salty products and get them into products that are healthy,” says Bill Hargis, co-founder of The Switch.
Hargis acknowledges from an obesity standpoint that juice is pretty high in calories. “The reality is that the best drink for the human body is water,” he explains. “Not all this other nonsense in the water, but just plain water. But kids haven’t been drinking water.”
The California group approved water, milk, juice drinks containing 50 percent or more juice, or isotonics that have less than 40 grams of sugar for their schools. The Switch products more than met the group’s requirements. But what The Switch also offers is vitamin C, vitamin A and other vitamins, minerals and nutrients that products in the schools were not providing.
The Switch’s moniker has been “get off the hype” since its beginning in 2000. Hargis, who previously worked for Guinness, says he got out of the beverage business about 12 years ago because of a lack of innovation. Then five years ago, Hargis met up with his partner, Mike Gilbert, who had the idea to carbonate 100 percent fruit juice, but needed Hargis’s expertise in the beverage industry. Hargis, in turn, cultivated the brand, image and packaging of The Switch.
“My concept was that if we had a distributor, a retailer and a manufacturer invest, then I think we have something solid,” Hargis recalls. “The first three guys we went to we got to invest in the company.”
The Switch – whose name derives from a conversation with skateboard fanatics talking about “switching things up” – debuted in five flavors on retail shelves in Richmond. Now with 11 flavors and national distribution, a couple major factors have attributed to the growth of this five-year-old company. The first was developing a hybrid system of distribution.
“When we first started, the big question was: ‘What is it?’” Hargis explains. “‘Is it a juice? Is it a soda?’”
After the first presentation with a retailer asking those questions, Hargis decided The Switch fit best in the new age beverage section.
But growth really came because of a Richmond natural health food retailer’s suggestion to attend a natural foods show. The Switch eagerly was taken in by the health food industry because of its all-natural ingredients and the fact that the product contains no preservatives. Hargis wasn’t familiar with this industry and found it very different than traditional direct store delivery. The Switch entered into a broker network that gave it distribution in natural food outlets across the United States. “The natural foods market was a market that significantly helped our growth,” Hargis says.
On the DSD side, a California distributor approached Hargis because he thought The Switch would be perfect for The Golden State. The network was beginning to build when the group that was removing soft drinks from schools discovered The Switch.
“When these bills started passing about taking soft drinks out of schools, it just exploded our business,” Hargis says. “Just about every school in the state of California either has the product or is in the process of getting the product.”
The school business distribution prompted two other firsts for The Switch: United States Department of Agriculture (USDA) approval and the move to cans. One of the California school group directors told Hargis that The Switch should get USDA approval to be in federally funded school lunch programs. The USDA has a regulation against carbonated beverages in the program, but Hargis submitted The Switch products, and the USDA gave the company an exemption. From there, foodservice networks took care of distributing the 12-ounce cans in three channels: over the counter, a la carte and in vending. The Switch now appears in schools in California, Connecticut, Maryland, Minnesota, Nevada, New Jersey, New York, Pennsylvania and Washington.
With the school business growing steadily, The Switch also has seen the national account business progress. This month, The Switch will begin appearing nationally in Target stores, and the line is available in Starbucks in Canada. “Those types of accounts have really been helping us in not just awareness, but in samplings and with the retailer across the street calling us so they can get their hands on the product,” Hargis says.
Due to consumer and retailer demand to buy and sell the product in bulk, The Switch soon will be available in four-packs. And a new Tropical Punch flavor recently joined Orange Tangerine, Watermelon Strawberry, Fruit Berry, Apricot Peach, Citrus Blend, Lemonade, Cranberry Ginger, Black Cherry, Grape and Orange Mango.
“If you do what marketing and creating products is suppose to be about, you create a product to fill a need in society,” Hargis explains about The Switch. “The need has been out there and when enough people tell us what they want, let’s give them what they want.” BI