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Growth
Business Observer Friday, Jan. 28, 2011 10 years ago

Cup Runneth Over

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Tervis Tumbler executives are ecstatic about future prospects at the company. Managing the growth is the looming challenge.
by: Mark Gordon Managing Editor

REVIEW SUMMARY


Business. Tervis Tumbler, Venice


Industry. Gifts, retail, manufacturing


Key. Company has an overhauled management team to lead new growth strategy.


By the numbers. Click here for revenue information from Tervis Tumbler.



Despite his occasional streak of dry humor, Barry Wolfson is steely serious when he talks about the growth potential at Tervis Tumbler.


Wolfson, named CEO of the North Venice-based drinkware manufacturer in December, says his goal of a Tervis cup in every home in America is no joke. That's 115 million households.


“I really think this company has that kind of potential,” says Wolfson. “We are starting to build a nucleus of people who will dream big.”


The company has already accomplished what might seem like a dream the past few years, considering the recession. Revenues, for one, are up 213% since 2006, from $24 million to more than $75 million last year. The 425-employee company is also one of the largest privately held firms in the Sarasota-Bradenton area and a rare Gulf Coast business with double-digit percentage revenue increases five years running.


Plus, Tervis, which turns 65 years old in 2011, is in the early stages of a dream-big expansion project at its factory, a few miles from Interstate 75.


The company plans to add 35,000 square feet to the 55,000-square-foot facility — work already underway. It further plans to hire at least 100 employees over the next five years and spend more than $7 million in production equipment and manufacturing and information technology to meet the expected demand. Tervis will receive performance-based incentives for the job growth from Sarasota County.


“Tervis has the opportunity to become a dominant consumer brand nationally,” says Norbert Donelly, chairman of the company.


Donelly plans to do more than hire employees and pump in money to achieve that dominance. The strategy also includes a revamped executive team, with Wolfson, 61, in the lead as president and CEO. Wolfson was an outside consultant for Tervis for six years, a role he took on after he ran a $100 million specialty chemical products firm in Marietta, Ga.


Laura Spencer, who had been CEO since 2006, is now the company's chief financial officer, a role she held in the early-2000s, back when the company was under $10 million in annual sales.


The new executive team at Tervis also includes Chief Operating Officer Wayne Varnadore and Rich Kaplan, chief sales and marketing officer. Varnadore's challenge is to make sure capacity meets the demand, while Kaplan will make sure demand doesn't grow too wide, too fast.


“We don't want to oversaturate the market,” says Kaplan. “We want to penetrate it correctly.”



Passionate fanatics


It's a lot of transformative commotion behind what is at its core a cup.


But to the legions of Tervis customers-turned-fans, so-called tervomaniacs, tumblers aren't mere cups. The cups, which the company calls “virtually indestructible,” rarely crack, melt, shatter or chip. An old company motto, keep cold drinks cold and hot drinks hot, remains a calling card. And the company's lifetime guarantee to replace any cup that breaks is a big customer favorite.


“The people who know Tervis are fanatics,” says Wolfson. “It's the most amazing thing I've ever seen in business.”


It makes sense then that the first leg of the growth strategy, Tervis executives say, is to significantly build on its brand awareness. The company is going through a brand overhaul, says Kaplan, which started with a new carefully chosen colorful logo. “It's a new face, look and feel,” says Kaplan. “We felt we had to take the heritage of the business and extend it to the future.”


The logo colors, which include red, purple and green, are the result of months of focus group research, says Kaplan. It was designed to show the passion and fun that both customers and employees have in Tervis.


The branding campaign also has an updated website with an emphasis on social media that includes a large presence on Facebook, where the company has more than 26,000 “like this” fans. Tervis' website links to its Facebook page, where it encourages tervomaniacs to share stories and photos. The official definition of a tervomaniac, says the company, is someone who has at least 12 tumblers. “All valid tumblers apply to the final count,” the site states, “including those in the dishwasher.”


Then there's Phil-Up, the mascot side of the branding campaign. Phil-Up has his own website, www.thedailyphil.com, and a blog to keep fans updated on his exploits.


Moreover, the company plans to introduce a new line of products, including serveware at some point, says Kaplan. Executives declined to provide more details on specifically what kind of products are in development. “In general,” says Spencer, “we feel like Tervis product offerings would be well received in many areas of people's on-the-go and at-home lives.”



'A unique culture'


Additional product lines would fit another phase of the growth strategy — boldness. Says Varnadore: “We need to keep the continuous improvement mindset.”


Varnadore joined Tervis in the summer of 2009. He worked in senior management roles at Bradenton-based Bealls and Venice-based PGT Industries before Tervis. “We have a great and unique culture here,” says Varnadore “We are not afraid to try new things.”


Wolfson, to that point, says he encourages employees to take risks and make mistakes they can learn from.


The Tervis strategy, says Spencer, also contains an element of studious long-term planning to keep the company on track of its varied goals. “You want to make sure you are doing things in an orderly way,” says Spencer, who recently completed an executive management program with the Harvard Business School.


The initial strategy 65 years ago at Tervis didn't involve anything close to a $75 million company with grand growth plans. Instead, the business focused mostly on local sales for its first 50 years.


Frank Cotter and G. Howlett Davis, a pair of Detroit engineers, created the first tumbler in 1946 when they designed a double-walled insulated cup. The Tervis name is derived from the last three letters of their names.


Casey Key entrepreneur John Winslow bought the company in the late 1950s and moved it to Venice. Donelly, a banker and salesman who married Winslow's daughter, then bought the company in 1988, when it had 12 employees and $380,000 in annual revenues.


Growth came slow in the 1990s and early 2000s. A key move came in 2003, when Tervis signed a deal with Bed Bath & Beyond to sell the tumblers in the chain's stores. More turning points came a few years later, when Tervis began to sign licensing agreements with sports leagues, college sports teams and entertainment entities such as Disney.


The licensing deals provide hundreds of ways for customers to personalize their cups and become more devoted to the brand, says Kaplan.


Wolfson was even a fan before he became CEO. In his career as a consultant for other businesses, Wolfson met a Tervis saleswoman in 2004 and began to learn about the inner workings of the company. He soon met Donelly and Spencer, and the trio bonded over business philosophies. Wolfson says the combination of the just-right product made by just-right people motivated him to do more with Tervis.


“I've worked with a lot of companies,” says Wolfson, “and Tervis was always one of my favorites.”


Tumble For You


Encouraging customer feedback can be a risky proposition, but Tervis Tumbler executives embrace the concept.


The company has been successful in using social media to both spread its message and hear from customers.


The North Venice-based firm, which manufactures and sells drinkware, solicits stories from customers on its Facebook page. The hits come in often, from pictures of toddlers with Tumblers to dozens of suggestions for new designs.


Tervis likewise utilizes Twitter and LinkedIn to hear from customers. A recent request for new product ideas on a LinkedIn page for Sarasota business professionals, for example, quickly generated more than 50 responses.


Two of the most popular suggestions from that LinkedIn discussion: To make a thermos-style shaped tumbler that works like a water bottle and to sell tumblers with local high school logos and team colors.

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