Turning a drink that people associate with 7-11 into a trendy product is impressive. Growing a single food truck into a national wholesale business in three years is a masterpiece.
We talked to the ex-lawyers behind Kelvin Natural Slush Co. to find out how it started and how they're doing so well.
After meeting on their first day at a law firm, Zack Silverman and Alex Rein hit it off and soon began bouncing business ideas off each other.
Silverman told Business Insider that the original idea for Kelvin Natural Slush came from the two friends going out for drinks. After yet another mediocre frozen cocktail and the realization that they liked slushies better than Frappuccinos, “we said, ‘why can’t we make a better, more grown-up, all-natural slush?'”
They didn't leap right in. But eventually, the world gave them the push to get started.
“We were working on securitization loans, which evaporated overnight. Because of the recession, Alex ended up getting laid off, and then we decided to take a chance on this idea,” Silverman said.
Silverman joined full time last year after six years at his firm, despite having the potential to make partner. “People were definitely pretty surprised ... we’re both super happy. we both work super hard — in some ways harder than we used to,” Silverman said.
That's paid off in a big way. Their mixture of “base flavors” like tangy citrus and black tea with fresh fruit purees (a favorite combo is a citrus/tea “Arnold Palmer” with white peach mix-in) built them a growing fanbase and hours-long lines at Brooklyn Flea's Smorgasburg.
But the big break for the business came from moving beyond the truck. Food trucks aren't an easy business. They're ideal to get started, “a cheaper, lean startup way” to get going.
But they have their limits.
Silverman described the food truck industry in New York as a bureaucratic “nightmare,” a sentiment echoed by a recent New York Times article on the city’s plateaued industry.
“We’ve had lots of parking tickets, we try to pay the meter but it’s really hard. Last year, on the food truck, our engine blew up right in the middle of the season, Silverman said.” Of course, in the middle of a heat wave. “We would have made a lot of money. Basically, a $40,000 swing, with lost revenue, and a huge expense on the truck to replace the engine.”
And people aren't terribly into slushes when it's cold out, making a store a difficult option too. “Our retail business, the truck, all the outdoor stuff, completely shuts down by October. For a few years, we made zero dollars between October and the beginning of April,” Silverman said.
Those difficulties, and the fact that the slush is a natural fit for alcohol, had the pair thinking about wholesale. “Along the way, people would always bring alcohol to the truck and the cart, Silverman told us. “We would always joke about it, but then people would literally show up with a flask or a mini-bottle, and we’d be like ‘whatever you do, we can’t stop you.’”
That trend, and the abundance of mediocre frozen margaritas in the world, led the pair to start reaching out to wholesale partners, bars, and restaurants. Then a massive partner reached out to them. A representative for Whole Foods, the Austin-based organic supermarket chain, offered them the opportunity to be featured in their stores.
“We’ll definitely take some luck on that one,” Silverman said.
Not just luck, but a smart business shift. In 2012, wholesale revenue only accounted for a small fraction of the company’s growth, according to Silverman. Since shifting the brand’s focus from mobile to wholesale, however, profits have increased dramatically.
“Year-to-date, wholesale has grown so much, so from a revenue perspective, [wholesale and mobile sales] are about even,” Silverman said. “We expect that by the end of the year, the wholesale will have grown to outdo the truck.”
They're available in eight states at Whole Foods, and bars and restaurants around New York.
Talking about the company’s future, Silverman said that plans included growth in the wholesale sector, targeting “three top markets”: Las Vegas, Miami, and Southern California.
“We’re not exactly sure when we’ll enter those markets, and if we’re going to expand the trucks, but for now, that’s where we hope the evolution of the business will take us.”