Jersey to Germany How Pratos took Joe Tea global

Gabrielle Saulsbery//November 26, 2018//

Jersey to Germany How Pratos took Joe Tea global

Gabrielle Saulsbery//November 26, 2018//

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A cafe in Copenhagen, Denmark. An airport in Frankfurt, Germany. Joe Tea is a small New Jersey company with a big international reach. When husband-and-wife team Steven and Ann Prato started the company out of the backseat of a Dodge Intrepid in 1998, they had trouble tapping into the local market. But by making some creative inroads they have…

A cafe in Copenhagen, Denmark. An airport in Frankfurt, Germany. Joe Tea is a small New Jersey company with a big international reach. When husband-and-wife team Steven and Ann Prato started the company out of the backseat of a Dodge Intrepid in 1998, they had trouble tapping into the local market. But by making some creative inroads they have since put millions of bottles of ice tea and lemonade on shelves in more than 20 countries.

We sat down with Steven Prato to figure out exactly how this scrappy Montclair company became a global enterprise.

NJBIZ: You initially found it difficult to penetrate the local market. How do you feel about your position now?

Prato: The New York metro is our game now. We play it, we love it. We’re tough enough to play this game, but we needed a brand that wasn’t a newborn baby to play it with. You can’t take a brand that’s ready for kindergarten and take it into the big time. New York metro is really the big time. That’s why a lot fails. Or you give up too early, tap out of money, or you’re in an iteration that needs to be changed or fixed but you’re hyping it as if it’s the answer.

The easiest is to get it produced. The other 99 percent is to get it consistently in the marketplace, and that’s where most get tangled.

NJBIZ: You started your own distribution company early on. How did that factor into your business model?

Prato: We created our own distribution company in part because when we started no one wanted to do distribution for us, and those who did couldn’t sell or couldn’t pay. If we didn’t do it ourselves, there was no chance whatsoever.

The first delivery vehicle was the back seat of a Dodge Intrepid, and with the willingness to keep going, we organically grew from the back seat of a car to a van to another van to partners with vans. It was the natural progression. It’s far more common to use lack of distribution as why one’s great brand isn’t conquering the competition. It’s not easy to do, and wasn’t easy to do, and it took probably 10 years to even have it look like it was possibly working.

What it’s allowed us to do is manage some distribution for others. We work pretty close with Boylan’s Soda and manage a good part of their distribution in New Jersey. Recently, Snapple and Fiji Water parted ways, so we’ve become more involved with Fiji Water.

I cringe at the thought of getting it out there that we do distribution because then people think we’ll distribute theirs. But we’ve evolved as a company.

In 2019, we’re planning to have our first warehouse in Europe that we will coordinate and that will put us in a better position to grow our European business. Theoretically that model could then allow us to do similar versions in other parts of the world. Our thing is to be hands-on, to a point. We’re more hands-on than most want to be.

“It comes back to distribution and placing product. … We specialize in cutting through the clutter. … We kept doing things until the brand got its own following, then we just guide it as opposed to any-thing else.”

– Steven Prato, Joe Tea

NJBIZ: So you’ve said you have no social media presence, but I’ve seen your brand on Instagram. What’s up with that?

Prato: It’s someone else! @joeteaofficial has nothing to do with us. We’re an authentic, old-fashioned, word-of-mouth brand. It benefits from the version of social media that used to exist when someone went to a movie and they liked it, so they told their friends to see it.

NJBIZ: Without social media, what’s been the most integral part of spreading your brand to places like Istanbul and the Czech Republic?

Prato: What has worked with us is the patience to be a discovery brand where individuals discover it for themselves and make their own decision about it instead of having something that’s directly brought their attention to it in terms of a big public marketing campaign.

We go into every year with essentially no budget for marketing. That’s not to say we don’t do things over the course of the year but we don’t have a marketing department or sales force.

It comes back to distribution and placing product. A lot of people theorize about these things. We specialize in cutting through the clutter. Getting product in, and once it’s in, it sells and they want me. … Conversely, you kind of make your own luck. We kept doing things until the brand got its own following, then we just guide it as opposed to anything else.

NJBIZ: As a small brand that has expanded its influence internationally, what cues can other small food brands take from you?

Prato: A lot of domestic companies don’t look international because they have such an untapped market in the U.S. Why should I devote the effort to do this when I should perhaps just operate with what’s under my nose? I think there’s a pretty strong argument for that.  And it’s one of the reasons why a lot of smaller brands focus close to home.

[But] I have always been a parallel thinker. Who says there has to be sequencing? It’s going to take 20 years for the oak seed to grow and it can’t grow until you plant it, so you might as well plant them and water them. In our case, most of our competitors are better positioned in the U.S. than internationally, so we have closed the gap just by playing the game.

NJBIZ: How is Joe Tea better positioned in the international market?

Prato: Sometimes the mass-market American brand is perceived as a premium brand overseas even if they’re a discount brand in the U.S. We’ve always been positioned as a premium brand — but if you’re presenting yourself as premium but you’re actually a discount product, I believe that comes to haunt you when the actual premium product comes to compete. That’s what we’re doing with products around the world. I didn’t say the word “Snapple,” … but we’re just hitting them at the ankles wherever we can.