Word On The Street

Pop Stars

Soda-preneurs put the fizz back into the cola wars.

By Debra Phillips

Coke isn't it. At least, that's what fledgling soft-drink companies strive to convince thirsty consumers of--surprisingly, with some success. "You're supposed to be able to do that kind of thing in this country," says Chris Payne, 45, co-founder with his wife, Ginger, of the Evergreen, Colorado-based soda company Ginger's Kitchen LLC. "I say that tongue-in-cheek, but we do believe it."

No reason not to. Even as Coca-Cola and Pepsi gulp down the lion's share of soft-drink sales, a steady stream of soda-preneurs are proving it's possible to burst these cola titans' bubbles--if only a little. And considering the billions of soft drinks consumed each year, a little in this case can add up to quite a lot.

"Through hard work and lots of luck, we've come out with a product that's successful," says Bill Dunman, 40, co-founder of Philadelphia-based Hank's Root Beer Co. How successful? Hank's line of soft drinks tapped into sales of nearly $2 million last year. Claims Dunman, "People are looking for something other than Coke or Pepsi."

Ironically, Dunman reached this conclusion while serving an 11-year stint at Coca-Cola. "They were like `You're nuts, Bill,' " says Dunman, recalling former colleagues' reactions to this piece of blasphemy. "But [Hank's Root Beer] was something I wanted to do."

By way of contrast, fellow soda-preneur Peter van Stolk doesn't dispute charges of craziness--if anything, he welcomes them. "It's a difficult industry," says van Stolk, 34, founder of Urban Juice & Soda, a $4 million Vancouver, British Columbia, beverage company. "How do you capture the attention of the consumer? You make it fun."

Fun, to van Stolk, means getting his employees to dress up in orange jumpsuits or as Elvis impersonators and hand out samples of his soft drinks. And if that isn't enough to go against the flow, van Stolk sells his products in alternative hangouts such as tattoo parlors and skateboard shops. "I don't believe you can be successful in the beverage industry if you play by the rules," van Stolk says, "because the rules are set by Coke and Pepsi."

"The soft-drink industry has to be one of the most monopolized [industries] out there," agrees Ginger Payne, 46. The Paynes' company is making a splash with Revel--a unique soda blend of fruit and spices. "It's a very tough market."

Even so, this isn't keeping companies the likes of Ginger's Kitchen, Hank's Root Beer and Urban Juice & Soda from stirring up sales. Distribution is difficult, as is convincing rut-entrenched consumers to try something new. But an ounce of innovation is worth as much as a gallon of tradition. "You don't go into something thinking you'll fail," says van Stolk. "And we're not going to fail."

Sounds like the real thing to us.

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This article was originally published in the February 1998 print edition of Entrepreneur with the headline: Word On The Street.

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