How they became kings of coolers - Michael Crete, Stuart Bewley

Nation's Business, Oct, 1985 by Richard Steven Street

With production climbing, Crete and Bewley decided to tap the largest possible market by selling their beverage through beer distributors. The distributors worked with retail outlets ranging from family shops to the big chains' supermarkets.

Beer distributors climbed on board the California Cooler bandwagon for obvious reasons. The cooler was packaged like beer, handled like beer, warehoused like beer and required no changes except to carve out a spot in the cold box. Also, distributors like the profit potential. At a little less than $1 a bottle, California cooler offered a 33 percent wholesale margin--typical for wine products, but far greater than the wine products, but far greater than the standard 20-22 percent margin for beer.

It took about a year for California Cooler to blanket California. In 1982, with minimal advertising California Cooler sold 180,000 gallons worth $1.4 million. In 1983, after the company went into Texas and Arizone, sales zoomed to 5.4 million gallons worth $26 million wholesale.

Today California Cooler is in every state except Oklahoma. It is marketed through a network of 500 beer wholesalers, and experts predict sales of more than $100 million in 1985.

The company has attracted a pack of imitators. The largest is Gallo, the Modesto, Calif.-based giant, which introduced its Bartles and Jaymes "premium" cooler with a massive advertising blitz early this year.

With competiton heating up, Crete and Bewley moved to protect their position as cooler industry leaders. In October, 1984, they hired the Los Angeles-New York advertising firm of Chiat/Day, Inc., and bankrolled a $9 million campaign.

Is California Cooler just a passing fad? Says Bewley: "What we've done is carve out a new niche in alcoholic beverages. We're here to stay."