Skae Beverages International: Water Company Turns Over a New Leaf
By SARAH THEODORE
For Eric Skae, managing director of Skae Beverages International, founding a new company in the fast-moving beverage business actually was inspired by a desire to stay in one place. The veteran beverage sales executive had moved around the country representing brands such as Arizona, Hansen’s, Fresh Samantha, Saratoga and Naked Juice. When he landed back in his native New York, Skae decided to stay put and launch his own business.
“I decided it was time to do my own thing,” he says. “I didn’t want to move my children anymore. I told my kids when we went to New York, we’ll stay there.”
In 2002, he found that opportunity when he acquired the U.S. distribution rights for Iceland Spring bottled water. The brand had a somewhat shaky history in the United States, but it had the potential to be a player in the emerging premium water segment.
As the name implies, Iceland Spring water is bottled in Iceland, near Reykjavik. The location boasts a reputation for purity, as Iceland is known for its environment and use of clean energy.
“What was great about it was that it was called Iceland Spring,” Skae says. “The marketing is kind of done for us in the name.”
Skae launched Iceland Spring initially through the natural foods channel and says the natural foods consumer recognizes the significance of the water’s source. “That consumer understands that Iceland is a clean environment. You don’t have to sell them on that,” he says.
Iceland Spring is bottled by Egils Skallagrims-son, which is both a Pepsi-Cola bottler and a brewer in Iceland. After distributing Iceland Spring in the United States, Skae went into partnership with Egils as an owner of the brand.
According to Skae, sales of Iceland Spring are up 60 percent so far this year, and “It’s finally off of a good base,” he says. “In the past, when we were growing 70 or 100 percent, it was off of a small base. It’s finally off of a larger base.”
In addition to the Iceland Spring brand, the company offers an exclusive brand to Walgreens drug stores under the Iceland Pure label.
Although he was finding success in the bottled water business, Skae found he couldn’t shake his feelings for his first love, tea.
“I always loved the tea business,” he says. “I don’t drink coffee; I drink tea every day. And having spent a lot of time in natural foods markets, I noticed something going on.”
Many natural foods retailers have limits on ingredients such as high fructose corn syrup, he says, yet many of them were carrying teas that used the sweetener.
“I saw what I call the under-30-calorie teas,” he says. But a gap existed in sugar-sweetened products that had a similar sweetness profile to mainstream teas, he says.
Skae developed New Leaf Tea in response. The line contains organic cane sugar and all natural ingredients. New Leaf is offered in Plum and Ginseng green tea varieties; Ginseng & Honey, Honeydew Melon, Strawberry and Tangerine white tea flavors; and Lemon, Raspberry and Peach “blue” tea flavors. Blue tea is actually oolong tea and takes its name from the blue hue of the leaf before it is steeped.
Skae got the idea after seeing blue tea listed on a restaurant menu. “I asked the waitress what blue tea was and she didn’t know,” he says. “She got the chef and he brought me out an envelope of oolong tea that I still have today.
“A lot of people have done oolong tea, but none of them have called it blue,” he adds. “In this business, I believe you’ve got to be different, and I put out the first blue tea on the market.”
The blue tea line launched last year. This year, Skae plans to add two diet varieties to the New Leaf line, as well as some black tea offerings.
While he was happy to use organic sugar as a point of difference for New Leaf, Skae says he has resisted making the product completely organic. “You kind of ‘niche yourself,’” he says. “You don’t see a whole lot of organic selling in convenience stores and gas stations. We want to be the better-for-you tea that’s made for the mainstream consumer.”
But, he says, “At some point, we’ll go into full organic offerings.”
Getting the word out
Marketing for Skae Beverages has so far focused on distribution.
“Seventy percent of the decisions are still made at the cooler door,” Skae says. “We want to be at eye level, and we want our signs up.
“And we want to be in the right stores,” he adds. “They don’t need to be in every store, but they have to be in the right stores — the ‘visibility stores.’”
Iceland Spring is available nationally through natural foods outlets, and the company has been in the midst of a distribution push into those other high-visibility outlets such as gourmet grocery stores and on-premise locations. In addition, the product is available in airports in Boston, New York, Philadelphia, Washington, D.C., and Tucson, Ariz.
During the past several months, New Leaf has added distribution partners in North Carolina, Georgia, Virginia, Maryland, Florida, Illinois, Missouri and Massachusetts.
As far as consumers are concerned, the company prefers to reach out through sampling and sponsorship of nonprofit organizations that have a health-awareness goal. For Iceland Spring’s “The Inside that Counts” campaign, it has partnered with the Multiple Sclerosis Society, the American Lung Association and AIDS awareness programs, among others.
“I believe in sampling because once people try New Leaf, they typically love it and will buy it,” Skae says. “I like to go into a place that’s a destination spot and do a big promotion.”
To further promote its brands, the company recently added a number of new people, including Steve Parano as vice president of sales, Rob Watkins to handle metropolitan New York, Clem Daly, who will handle New York City, and Chip Lucas as New England division manager.
As it grows across the United States, the company is entertaining requests for international distribution as well. New Leaf soon will be available in Canada, and is on the market in Costa Rica. Iceland Spring is available in Japan, the United Kingdom, Denmark, Kuwait and Italy, and the company is considering a move into China. All of that, of course, is great for business, but it means Skae may not realize that goal of staying in one place anytime soon.