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Three Brothers Take Life's Lemons and Start Their Own Lemonade Company
By Carla Thompson, Special to AOL Black Voices
Montgomery, Alabama-based Ensemble Beverage Company is a growing and still unknown African-American business but the owners, three brothers of Omega Psi Phi fraternity, hope that Heritage Lemonade and other assorted flavored drinks will become the beverage of choice for people across the country and around the world.
Robert Smith, partner and director of marketing, and James Harris, president, Alabama State University grads, along with their partner Nate Shaw are trying to make a mark in highly competitive yet rapidly growing industry with their Down Home Country Juices whose flavors include blackberry and watermelon, as well as lemonade.
While it has been widely reported that sales of carbonated beverages have been relatively flat, fruit and fruit flavored drinks were relatively flat, fruit and fruit flavored drinks were the leading category in new drink launches in November 2005 to January 2006 with 90 percent more beverages released under this category in the same time frame last year," according to ProductScan Online. And according to the most recent figures from Beverage Digest, "Americans spent roughly $91.4 billon annually on refreshment beverages."
Obstacles to Opportunity
In 2001, James Harris was laid off from his position at Coca-Cola. He didn’t have a job but he did have a plan -- an old business plan for a beverage company that he developed as part of an MBA class at Auburn University. Smith and Shaw signed on and the three started creating their first flavors.
After a series of fits and starts, including purchasing equipment for a plant only to discover it did not have running water to a key part of the facility, they began to have limited success. One of their first customers was Calhoun Foods, an Alabama-based black-owned grocery store chain. Barber shops and other small stores also began to carry their product.
Since Ensemble Beverage was a small company with a "zero marketing budget" the partners had to find more creative ways to penetrate the market and increase sales volume.
As luck would have it, the company was selected as a featured commemorative beverage at Governor Bob Riley's inauguration in 2003 which prompted state-wide press coverage. And as luck would have it -- bad luck this time -- Ensemble Beverage Company attracted the attention of the state health department and other regulatory agencies. According to Smith, although Ensemble had a business license, they had not registered with those agencies.
'We weren't actually selling bottles at the event," said Smith. "That’s what saved us." If they had been, the business would have been shut down.
Subsequently, they filed the appropriate paperwork and established great relationships with the agencies, says Smith, 39. This attracted the attention of a co-packer who assisted them in producing, bottling and shipping their beverages.
“Mastering the art of understanding and solving problems is invaluable. When you are solving problems, you are creating opportunities,” says Smith. “Every time there is a problem there is an opportunity in that problem. No don’t always mean no. It means find another way,” says Smith.
Doing Business Internationally
"We never thought about doing business internationally," says Smith. But he and his partners knew they needed to take their business to the next level.
Now, they have accounts with Winn Dixie, Albertsons, and Kroger in Atlanta, as well as Calhoun Foods and were selling their juices at state-side military bases and the state’s Hyundai plant.
Harris, who is also a PhD candidate, was working in Kuwait and teaching at an American university. There, the idea of supplying American military bases in that country was born. There was one catch, though. According to Smith, the Department of Defense (DOD) must purchase all its supplies from Kuwaiti businesses which in turn supply U.S. bases. So, Ensemble Beverages established a mutually beneficial relationship with a Kuwaiti business which was able to obtain a contract with the Department of Defense.
Everything was set to go until another problem arose. Ensemble Beverage's co-packer changed the size of the bottles used from 16 oz to 10 oz. The Department of Defense wanted the juices in 16 oz bottles.
It was June and the product had to be shipped by August to get to Kuwait by Labor Day. They had to find plan B…and in a hurry. Harris found a business card from a company he met a year prior.
Once again turning obstacles into opportunity, this co-packer, although smaller, had experience shipping goods internationally unlike their previous co-packer.
"We didn’t know tariffs," says Smith. "“They did everything for us."
A Closer Bond
As the business has grown, so has the friendship between partners.
"He's a true friend. Greater than a brother," says Smith or Harris, with whom he corresponds daily via e-mail. “Obstacles can bring you close together or pull you further apart. We laugh about being happier being broke (but we are having) unbelievable fun in our lives.”
Their ideas about what defines success have changed as well.
"At first, we wanted to get rich," says Smith. "Now it's not really about (us) but about generations that come behind (us). (We) want the ability to generate funds and opportunity."
"One pitfall of small and minority businesses is that we don't set specific goals," says Smith, goals for profit. (Minority businesses) are in it for making a lot of money. We want the bling, bling but the Lexus and the BMW are not making money for us."
They still hope to have a factory and will expand their markets to Philadelphia and Chicago Albertsons stores. They will also purchase more vending machines/refrigerators to be placed in grocery stores and businesses which can cost approximately $6000 for each one, including graphics.
With gross revenues of over $950,000 in 2005, they anticipate becoming profitable in the next two years.
"Now we don’t have to take out loans to get stuff," says Smith, who, along with his partners, do not take a salary. "We are still in debt but we are paying down debt. We are not in the black but we are not in the red either." Regardless of how busy his day may be and how many challenges he may face, Smith remains optimistic and enthusiastic -- loving the life of an entrepreneur.
"You wake up in the morning, you may not know what you are going to eat for lunch, but you know one day you are going to eat like a king," says Smith. "It feels good being a player in your own destiny."
Bruhs Starting a Successful Lemonade Company
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