Refreshment Services Pepsi
In 1924, the Vecchie family founded a small, independent business in Kincaid, Ill., geared toward distributing quality, name-brand beverages and food products. Now, 90 years later, that business, Refreshment Service Pepsi (RSP), has grown and diversified immensely.
RSP now operates across six locations in Decatur, Ill., Quincy/Macomb, Ill., Burlington, Iowa, Terra Haute, Ind., Tallahassee, Fla., as well as Key West, Fla. With more than 400 employees, the business serves restaurants, concessions, schools and other establishments with a wide range of products from a diverse set of vendors.
“We started as a beverage distributor,” explains Mike Bartel, current president of RSP. “Back in the day we had maybe 40 stock-keeping units [SKUs] between glass bottles and cans. The original lineup included the basic, Pepsi, Diet Pepsi, Mountain Dew and the like. Today, we are pushing 600 SKUs between all of our beverage products, which include teas and juices. Three years ago we branched into brewed coffee, brewed tea and concentrate tea. Our company has also recently created our own beef stick and jerky line under our name and we are in the process of rolling that out.”
Standing apart from competitors
Carbonated beverage distributors are not exactly difficult to come by in the United States, where the average citizen consumes one to two cans of soda each day. Bartel explains, however, that the distinguishing factor between RSP and its competitors is the focus on customer service.
“We are relatively small,” he elaborates. “We focus on doing a better job of listening to our customers and responding to their needs. We put our customers first. When we help them grow their business, they help you build your business.”
RSP’s loyal customers, beyond the retail customers, who make up the majority of the business, include: concessions, bars and taverns, health and fitness centers, offices, churches and anywhere else someone may want a bubbly drink in Iowa, Indiana, Illinois and Florida.
The business offers a full product portfolio of water, flavored beverages, juices, sports drinks, such as Gatorade, teas, coffee products such as Starbucks’ bottled Frappuccino, and all of the classic Pepsi soft drink flavors customers have come to expect from vendors.
Looking beyond the soda fountain
Of course, the company cannot be, and will not be, restricted to beverages alone. “We are always interested in expanding our boundaries,” says Bartel. “We have the coffees and teas, but our biggest current innovation is our line of beef sticks and beef jerky named Hungry McGee. When we roll out new product lines, we measure it across two benchmarks: No. 1 being the new revenue stream should not be fully cannibalistic against our carbonated soft drink line. No. 2, if possible, we want that revenue stream to be complementary to our soft drink line up.”
He goes on to explain that the company’s meat sticks and jerky make a great adjacent category. “We can promote it alongside our beverage lines,” he continues. “In the past we could only offer a deal with two sodas for $2.50. Now we can switch that up, offering consumers a deal where they can buy a Dr. Pepper and a beef stick or a Diet Pepsi and beef jerky at a reduced price. We can also move these products beyond retail accounts, into schools, bars, offices and concessions. There is a large market available.”
RSP is in the process of building relationships with other bottlers and distributors across the country. Bartel and his team hope to move Hungry McGee into new territories by working with people in the same industry and showing them the benefits of adjacent marketing for these products.
Moving in new directions has helped to keep the business growing steadily in an age where soda sales are in decline. “Carbonated soft drinks are not doing as well both from a revenue and case-buying perspective,” Bartel explains.
The solution has been to make more options available. Coffees, teas, juices and sports drinks are steadily filling the revenue gaps left by the drop in soda sales over recent years. Moving further into snack territory has helped boost revenue, as well. “We are showing that a beverage bottler can be successful with food products,” Bartel explains. “This model can work and over the next several years, it will be interesting to see how other distributors pick up on it.”
In the coming years, Bartel and his crew are looking ahead to new opportunities in food and beverage sales. He touts his crew as flexible, innovative and customer-focused, traits that have set RSP apart from the very beginning and continue to do so today. With a growing product line and expanding footprint, Refreshment Services Pepsi has success ahead as the business transitions through another generation of quality family business.