CRAIG MARGULIES is hoping to strike it rich in the grab-and-go beverage cases on the Upper East Side of Manhattan.
A 36-year-old with a master’s degree in industrial psychology, Mr. Margulies left a corporate career to become a sales representative for Guru energy drinks, a new company started by a bunch of old Canadian high school pals.
It might seem like a strange career switch, until you consider that the investors in the last beverage sensation in Manhattan — Glacéau, the makers of Vitaminwater — split $4.1 billion last year after Coca-Cola bought it.
“Bust my hump and get some equity in the company,” Mr. Margulies explained. “That’s what we are all here for.”
Guru, which is already selling in Canada, is trying to crack the New York market by zipping around the city in electric minicars painted like Guru cans and hiring cheerful, attractive young women to offer samples at convenience stores, health clubs, supermarkets and delis.
But most of all, it is relying on the skills of salesmen like Mr. Margulies, who in three months on the job has received a quick education on how to win coveted shelf space in beverage cases around the city. It requires a gift for schmoozing, a comfortable pair of shoes and armorlike skin.
The nonalcoholic beverage market, in New York City and elsewhere, is tough. For decades, it was dominated by the soft-drink giants Coke and Pepsi, with a few other brands scrambling for the leftovers.
An enormous variety of drinks, a hundred or more even in small delis, have picked up the slack. And energy drinks, where Guru believes it has found an opening offering products with all natural and organic ingredients.
The explosion of new beverages has been marked by stories of regular folks who started small and made it big with a new drink that they hustled to local stores. Three New York friends created Snapple, which was sold to Quaker Oats Company in 1994 for $1.7 billion. Arizona tea was mixed up by a couple of Brooklynites who first tried flavored seltzer and malt liquor.
Glacéau’s Vitaminwater was the brainchild of J. Darius Bikoff, who insisted on selling his vitamin-spiked flavored water beside regular bottled water rather than in the soda section.
The four founders of Guru Beverage have a pretty good story, too. But the ending remains far from certain. While creating a drink in a blender and finding a bottler is relatively easy and inexpensive, making it a successful brand is difficult.
“Frankly, some of it is luck,” said Gary Hemphill, managing director of the Beverage Marketing Corporation. “Being at the right place with the right product at the right time.”
Bankrolled by the founders’ savings accounts, the company sold its first can of Guru at a small deli in Montreal in 2000. By the end of the first year of production, nearly one million cans had been sold, mostly in Montreal. By 2005, Guru was being sold throughout Canada, and the company was looking to sell in the United States. New York City was selected because it was the largest market, it was fairly similar to Montreal in terms of its many independent retailers
“If it doesn’t make it there, we would rather know up front rather than later,” Mr. Jolicoeur said. He said it was important for the company to prove to itself “that the Guru concept has legs.”
The company’s strategy in New York was similar to what worked in Montreal: trying to get the product into as many retail locations and company cafeterias as possible in a small area to create buzz, and then expanding.That kind of small-scale approach works to a point. But eventually you need to have a good distributor.
When he started, Mr. Goldman was driving cases of his tea around in a van, trying to persuade retail stores to try it. He realized that to gain any scale he needed a distributor who had a fleet of trucks and well-known relationships with retailers.
“You go into a store, and you’re asking a guy to take a brand on,” Mr. Goldman said. “Who are you? How are you going to get in there?” But if you are connected with an established distributor, he said, the relationship is already reputable.
Guru chose Exclusive Beverage as its distributor, hoping Guru would receive more attention with a smaller company...Steve Gress, Exclusive’s president, said his portfolio consisted of small start-ups like Guru. Asked what makes a hit, he said, “I wish I knew because I’d be a lot better off.”
Mr. Gress credited Guru as being “very hands-on” and willing to listen to advice on how to succeed in New York. “You need the company support,” he said. “You need to get it in people’s hands and get them to try it.”
The company started selling its drinks downtown last July. It has advertised in The Village Voice and Time Out New York, sponsored art and fashion shows, and scooted around the city in its electric cars to promote the idea that the car and Guru offer “clean energy.”
David Kessler questioned whether Guru was distinctive enough to rise above the growing pack of beverage choices. “We’re marketing guys,” Mr. Kessler explained. “I don’t know if it’s differentiated enough to get my attention to say it’s really unique and I’ve got to have it.”
Mr. Kessler’s comments crystallize the challenge for Guru’s salesmen, who must convince the managers of company cafeterias and health clubs, vitamin stores and bodegas that they must have Guru on their shelves. “There are so many drinks out there,” Mr. Margulies said. “The only niche we have to play off is that it’s an all-natural product.”
Yet Mr. Margulies exhibits considerable skill as a salesman. “The product is the product, but if you don’t sell yourself it makes no difference,” said Mr. Margulies, a Long Island native who is newly married. “You’ve got to make an impression in the first five minutes or you are done.”
