Nantucket Nectars Case Study

Topics: Entrepreneurship, Nantucket, Massachusetts, Dr Pepper Snapple Group Pages: 5 (1725 words) Published: September 20, 2010
Nantucket Nectars' "Juice Guys" Bottle Formula for Success With Quality Ingredients

The island of Nantucket is known for its entrepreneurial spirit. Tom Scott and Tom First caught that fever nine years ago when they started peddling Nantucket Nectars in the island's harbor. Now the self-proclaimed "juice guys" hold the number-two spot in the New Age beverage market.

To say the juice guys started their company, Nantucket Nectars, on a shoestring budget would be an understatement. The two Toms built a multi-million dollar company with an initial investment limited to a $170 bottle-cap hand press, recycled bottles and an assortment of fruit. They had no formal business training and conducted no market research. Their business was born from trial and error.

First, a Boston native, says it was a willingness to learn every aspect of the business, along with their own naiveté that kept their dream alive in the early years. "If we had ever written out a business plan in 1992, we would have gone to do something else," admits First. He says since the duo didn't know how to do a cash flow projection and had no idea that their business was sinking. "In the early 1990s we ran the business out of a cash box, and if there was anything left in the cash box at the end of the day, we thought we were making money," he muses.

Nantucket Nectars products are now sold in 30 states, Canada, Latin America, Europe and Asia. Compared to mainstream titans in the $15 billion fruit and tea beverage industry, the Toms are still a niche operation. However, their company is increasing its growth rate each year and expanding its product line as well. Besides juice, the company now offers a line of teas, as well as Super Nectars, nutritionally enhanced juices that include food additives like gingko biloba.

The story of Nantucket Nectars blossomed from a desire to break tradition, to shun the corporate world, with its suit-and-tie lifestyle. The Toms have succeeded in doing this with sheer determination, creative marketing and most of all, a high-quality product. This combination has gained them attention from both consumers and the media as the undisputed "juice guys." And First says they are still having fun.

Squeezing Out an Idea
Nantucket Nectars holds the second place in the New Age beverage market, trailing only behind Snapple. But the road to this distinction has been long and sometimes bumpy. Although both First and Scott hold college degrees, neither had any hard-and-fast business experience before starting Nantucket Nectars. Scott graduated with an American Civilization degree, First in History. But the two knew they didn't want to enter the American workforce and spend their lives climbing a corporate ladder.

So they began their pursuit of a business they could call their own while still attending Brown. Scott, a Maryland native, sought a way to live on a seasonal Nantucket year round. He quickly started Terrapin Painters on Cape Cod. While he says it was far from an ideal job, he still preferred it to working for someone else. And even though his painting business brought in enough to pay the bills, Scott was soon distracted by what he saw as a better opportunity.

With the many vessels entering the harbor, an obvious need arose for a service-oriented business. Boaters had to come to shore to eat, refuel, restock, do laundry, and run various other errands. Scott's idea was to deliver essential items to boaters via his own boat. He recognized the possibilities of this idea and went straight to First. Shortly after, in 1989, the two twenty-something entrepreneurs began offering a boat-to-boat delivery service in Nantucket Harbor called Allserve. Customers would radio Allserve with a request, and the Toms would sail in their 19-foot red Sea Way directly to the boater with supplies. This saved the customer hours of time each day and made Allserve an instant success.

The Toms would do almost anything to keep their newfound...
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