Overview
These juice guys talk about their growth from a dockside shanty on Nantucket into a multi-million dollar new age beverage company.
Off the Coast of Massachusetts
From the historic shores of Nantucket Island, two college friends and their love for that island embarked on a journey that would lift them from the seaside shanty that their marine service business operated from, to a nationally distributed new age beverage company competing with the likes of Snapple, Fruitopia, and Arizona Ice Tea.
Tom First and Tom Scott met each other at Brown University, and an intriguing similarity the two men shared was their extensive time spent on Nantucket Island during summers, and the desire to maintain a lifestyle on the island that they had shared for so long. Their endeavors after graduation from Brown led them to reside on the island where they employed themselves with a variety of small business efforts focused around the marine and boating industry of the island. What evolved was a small business called Allserve that sold groceries and convenience services to the boats that visited the harbor in Nantucket the two Toms had set up shop.
On a winter night in the late 80’s, Tom First was experimenting in his house with a blender and some fruit and juice products to recreate a peach beverage he had developed an affection for during a vacation to Europe. Upon completing the concoction the notion came to the two men that this product could be bottled and sold from their convenience store to the customers on the Nantucket harbor. This product concept ultimately donned the name of Nantucket Nectars and became an early entry in to the then non-existent segment of the beverage industry called New Age Beverages. In six years the founders have been able to successfully mass produce and mass market their beverage product to the extent of being carried in retail outlets in over 30 states, and to reach revenues in 1995 of $20MM dollars. As a result of this growth, the company has moved off of Nantucket Island to its current headquarters in Boston, MA and the company has grown in size to seventy-five employees.
The EM visited with Tom First and explored the journey that Nantucket Nectars has been on since the cold winter night on Nantucket. Topics that were covered include a host of issues the fledgling company went through to be where there are today including production issues, marketing plans, distribution efforts, supplier needs, and all of the woes that go with such activities. What resulted was a fascinating story of a small company that worked its way through a new-born industry to become one of the earlier and more significant players. Ultimately the company became positioned as one of the favorite brands in that market, beating out in various aspects more powerful and influencial brands including Snapple, Coke, Pepsi and Arizona Ice Tea.
Beginnings
The best way to describe the success and growth of Nantucket Nectars is with the word perseverance. In fact, as the founders of Nantucket Nectars learned from a radio interview with the president of the Young Entrepreneurs Association, perseverance is the trait most applicable to an entrepreneur trying to begin a successful venture. As Tom First put it, “Entrepreneur’s never fail, they quit. An entrepreneur fails all the time, they just have to continue trying another way.” Fortunately for them, their strong trait of perseverance helped them grow their dock side company into the successful business it is today. By the tales of their early days of operations, these two founders were able to overcome a lot of adversity to be where they are today.
Tom First and Tom Scott had spent many years of their lives on Nantucket Island and had developed a mutual desire to create a livelihood for themselves there. The Allserve service store was their first coherent attempt at trying to earn a living on the island. In fact, when speaking with Tom First, he reflects on what he considers his true desire for a livelihood which is to work on and around boats, “You put me on a boat to work on its engine or to service it and that’s where I feel most at home.” It was in that spirit that Allserve was formed to feed their desire to work in the marine industry in the place they very much enjoyed living.
From this small store on the dock of a Nantucket harbor Allserve established a small but effective retail outlet to the consumers that sailed into the harbor that were in need of supplies and service for their sailing trips. It was later on that this distribution outlet turned out to be the proving ground and channel that Nantucket Nectars would be initially introduced in.
The Founders
First and Scott were graduates of Brown University when they embarked on their full time lifestyles on Nantucket Island. First is a Massachusetts native and Scott hails from the state of Maryland. Upon their graduation from Brown, both majoring in History, they forsook the corporate route and did no interviewing for jobs in New York like many of their friends had embarked on. First cites he did not wish to pursue that route for a lifestyle, while his partner once said he did not ever want to have to create a resume. So underneath their romantic affection for the life on an island, the two had motivations of being the masters of their own destiny and to build something that they could call their own and help themselves to survive. “Initially for the first one and a half years I was driven by the desire to have a company and survive on Nantucket.”
In their current organization First and Scott prefer to call themselves by the titles of “Co-Everything”. On a more corporate perspective they go by the titles of Founders of the company, and amidst the growth of the organization they have split the responsibilities to allow each one to control the aspects of the business that they prefer. First runs the sales and operations side of the company while Scott runs the marketing side of the business. First’s duties include managing the accounting and production operations,while upwards of 80 percent of his time is spent on the road selling, setting up new distributors, opening accounts and working on major national accounts.
Scott on the other hand has developed a strong affection for the marketing aspects of the business. In fact, the company’s success and attempts to expand in various national areas has led Scott to relocate to New York where he is setting up a marketing organization to assist in the product’s expansion. “New York has become a big popular center for us. We felt the product was very New England centric so we are now trying to move it out to the New Jersey and Washington DC area and beyond.”
New Age Beverages
It was an evening in the winter of 1989 that Tom First created the first inklings of what was to become Nantucket Nectars. From a trip that he took to Spain he had become very fond of a peach beverage that he had consumed on a regular basis while he was there. On that evening in 1989 First and Scott began concocting an imitation of that beverage for themselves to enjoy back in their homeland. First recounts that time with vivid memories of the beach house they were living in and the blender work he performed that night to create his product. From the results of that home formulation, First and Scott began to ponder the possibility of making that product in larger quantities to sell out of their Allserve service store.
They began to produce the beverage, pasteurize and bottle it themselves. Nantucket Nectars was introduced to the public in the summer of 1990 from the Allserve store as well as being distributed on the island from two other retail stores. First views their initial efforts as what a large company would consider test marketing, “We were getting the product on the street to see what people thought about the fruit juice flavors and thought about the name.” Unbeknownst to them, First and Scott had created a product that would fit into the quick to grow beverage category called “New Age Beverages”. “We had never heard of it, and the consumers had never heard of it. It did not exist.” The only thing that existed at that time according to First were products from New York Seltzer and Soho. There was also a product localized to the mid-Atlantic states called Elliot’s Amazing, but nothing of the nature of Snapple Teas or Clearly Canadian.
The signals that they were on to something potentially big came from the customers that drank their beverages and enjoyed it. “We found out quickly that people were excited about high quality fruit juice drinks. Something that had personality to it and wasn’t a commodity item like Veryfine or Ocean Spray.” To capitalize on this consumer demand, First and Scott decided to mass produce their product in commercial facilities. With personal savings and family loans, First and Scott were able to fund their first large product run. 1,400 cases were produced at the cost of $9,000. Those cases were only able to last for a few weeks and added to the excitement of First and Scott that they had developed a marketable consumer product concept. “Two years into the company I remember at the time thinking this thing was going to be big. I expected to make it at the time…I always believed we would which helped drive me.”