As travel resumes, Delta onboards more food and beverage startups

Yoni Reisman founded his startup Tip Top Cocktails in September 2019 with the goal of effectively delivering a high-end canned cocktail experience. Being from Atlanta, Delta Airlines was on his radar as a possible wholesale customer.

But it wasn’t until the middle of the pandemic, when Delta relaunched its in-flight beverage service, that the conversation took off. And starting in April 2021, Delta began serving Tip Top’s Old-Fashioned Canned Goods and Margaritas onboard its domestic flights.

Tip Top is one of many startup food and beverage brands Delta began offering when it reintroduced inflight services following pandemic-era restrictions in 2021. By partnering with one of the largest airlines in the country, the founders say they were able to increase brand awareness, hire more staff and strengthen their existing business.

Reisman said recent customer surveys show that about 20% of Tip Top customers discovered the brand on a Delta flight. Outkast’s Big Boi shouted the brand on social media from a robbery, as did chef Kevin Gillespie.

“Because we’re on Delta, a lot more people know Tip Top exists,” Reisman said.

Delta has specifically focused on working with underrepresented populations and those who take a mindful approach to their businesses. Some are newer startups, while others are more established. Mike Henry, general manager of onboard services operations, told Modern Retail in an email that when considering its new offerings, Delta looks for smaller, values-aligned brands with unique products.

“We really want to create meaningful relationships in addition to providing the best customer experience.” said Henry.

Scaling

But pairing bespoke brands with one of the world’s largest airlines doesn’t happen overnight. Delta offers more than 4,000 flights daily and serves approximately 200 million customers annually. This meant that brands had to find a way to increase their production.

In the case of Tip Top, the company operated in Georgia. But the deal with Delta needed rapid expansion so it could get the product on planes in a timely manner.

“Very quickly we had to get distribution in a bunch of their charging markets,” he said.

But that challenge turned into an opportunity. Once production ramped up, it allowed Tip Top to increase its reach in markets where it needed to create new distribution deals, Reisman said. And there’s already expansion: Tip Top will be offered on international flights starting this summer.

Kate’s Real Food, which was founded in Wyoming in 2011, is another brand seeing expansion through the Delta deal. The brand offers certified organic, gluten-free and kosher snacks, and its dark chocolate cherry and almond bar has been on Delta planes for about three months. Later this summer, the offering will shift to Lemon Coconut Bars.

“It was a great opportunity to get the word out about our products,” said Sales Manager Michael Richardson. “People can try something unique, something they might not see on their usual shelf.”

But getting there has been accompanied by logistical dilemmas. Kate’s had recently opened a new production facility in Bedford, Pennsylvania, which helped the company create enough bars to meet Delta’s demand. In addition, orders are much larger than before, which necessitated finding larger trucks for shipping.

Reviving a spirits business

By the summer of 2020, Chris Montana had already lost most of the business he and his wife Shanelle had built over the past seven years. The pandemic had shut down their distillery business, Du Nord Social Spirits, cutting 60% of their revenue. The George Floyd protests that have swept through Minneapolis have literally set his inventory on fire.

Then he learned that Delta was trying to get in touch with him. The airline wanted Du Nord, the country’s first black-owned distillery, on its flights. At first, Montana hesitated. It did not have the capacity to supply the millions of mini-bottles needed by an international airline.

“There was no way, at that time, that we could do business with Delta or anyone else,” he said. “Our priorities were elsewhere.

But weekly meetings followed. Du Nord is on the move again. It took more than a year, Montana said, but a plan took shape, including putting distribution deals in place and securing the Jack Daniel’s facility in Lynchburg, Tennessee, to fill the millions of 50 ML bottles of Du Nord’s Foundation vodka.

For a company that started with just $60,000 of the founders’ investment, this was a massive scale. Mini-bottles of Du Nord began serving onboard in October, Montana said, and the deal is already opening new doors. North is now available in Atlanta, where Delta is headquartered.

“It took so many people to say ‘this is what we want to see happen,'” he said.

For Montana, his business is not limited to product, but brings diversity to the historically white and masculine spirits sector. The deal with Delta allowed it to hire more staff: Du Nord went from two plus Montana employees to nine, with a focus on bringing new entrants into the industry.

“It’s not just about the booze in the bottle, and we believe the investment in our community and the next generation of entrepreneurs is well worth it,” Montana said. “We’re not used to that reflecting on us, and that’s what happened here.”

Expand brand reach

Before the pandemic, retail startups increasingly viewed travel partnerships as a unique way to showcase their products to customers. Copper Cow Coffee, for example, had signed an agreement with Hilton Hotels to showcase its products in unique locations. Meanwhile, Farmer’s Fridge, which sells salads and other meals through vending machines, was targeting airports.

But the pandemic has largely put many of these initiatives on hold. Now, more and more startups are looking to resume partnerships in the field of travel. The International Air Transport Association reported this month that demand is rapidly returning to pre-COVID levels, with a 78.7% increase in demand from April 2021, largely driven by demand of international travel.

Luggage startup Away is one example – the company launched new amenity kits on United in June for passengers in premium cabins on long-haul international and transcontinental routes. Luc Bondar, vice president of marketing and loyalty and president of MileagePlus at United, said in a press release that the agreement aims to provide “comfort and quality” as travel demand soars.

When Cason Crane launched his Explorer Cold Brew business in 2020, he said his products were designed for travel; Explorer Cold Brew is available in 32-ounce bottles as well as single-use two-ounce bottles.

“Some customers prefer to have a single serving for more flexibility and portability,” he said. “But even then, it never occurred to me that an airline would want to serve him on board.”

Then in the spring of 2021, Delta called. The company had discovered the concentrate organically, Crane said, and wanted to know if Explorer could board as the first-ever in-flight cold brew.

The timing was fortuitous. The deal with Delta would require doubling monthly production, and Crane was separately securing $1.5 million in pre-seed venture funding. As of June 2022, Explorer’s two-ounce single-serve concentrates are offered on select flights coast-to-coast and Hawaii.

“We’re tracking the mentions on Twitter and Reddit, and it’s been so energizing to see how excited people are to finally get a premium cold brew coffee experience on an airline,” said he declared. “It’s been amazing.”

For Delta’s other partner brands, a business-to-business approach was the goal from the start. Thrive Farming International, which offers its English Breakfast tea on Delta flights, began offering it about a year ago. The Certified B company has been operating since 2011 and aims to build more inclusive and equitable supply chains by giving farmers who grow coffee beans and tea leaves a stake in the sale of the product.

“We measure by the impact we have on farming communities, and it’s hard to get there in small pieces,” said company president Tom Matthesen. “So those kinds of partnerships are really essential.”

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