While still in college in the mid-1990s, Sky Pace joined Snapple Beverage and his beverage industry journey began. Over the next 15 years, he witnessed the acquisition, partnering, and sale of many well-known beverage brands, including Snapple which moved through the hands of a number other companies, including Quaker Oats and Cadbury Schweppes. Finally, in 2007, Snapple and several other top beverage brands formed the third largest beverage company in America: Dr Pepper Snapple Group.
Pace was fascinated by the way newly acquired companies’ existing businesses models either did or did not mesh with the standardized model of the Dr Pepper Snapple Group during integration. But one acquisition in particular held Pace’s fascination the most.
When the Dr Pepper Snapple Group bought The 7UP Bottling Company of San Francisco, it decided to sell an entire department that did not quite fit into the Dr Pepper Snapple Group’s business model. This department was responsible for the distribution of bag-in-the-box fountain soda concentrates, and the rental of commercial foodservice equipment used in the beverage industry. It had 1,200 customers, some of whom had been loyal customers for 35 years.
Having grown close to these customers and possessing a deep understanding of the beverage business, Pace made a decision to separate from Dr Pepper Snapple Group and strike out on his own. The goal in mind was to take the fountain distribution business off their hands, and run it himself. The biggest hurdle was lack of business capital, so Pace joined with an associate who already owned a food service equipment leasing company and together they acquired the fountain distribution business from Dr Pepper Snapple.
Armed with big ideas and the direct authorization to distribute Dr Pepper and 7UP concentrate products, Pace named the company Brix Beverage. Brix refers to the level of sugar in any aqueous solution; the term is used when portioning the right amount of sugar to water when making beverages such as soda and wine.
Pace quickly encountered challenges. A partnership with the food service equipment leasing business allowed Pace access to a staff with beverage knowledge, but it required product, trucks, and other items. Pace needed financing to make such purchases.
“I went from being nobody in particular in the beverage industry to a guy who owned a company that sold $1.8 million in beverages – overnight.”
Pace had quickly gone from working for a massive company to having his own roster of consistent, long-term clients. He also wanted to manufacture his own Brix line of beverages that his customers – mostly bars and restaurants – bought as mixers. Pace also knew there was money to be made in leasing food service equipment to customers who couldn’t access the capital required to purchase their own, something he learned from his food service equipment leasing associate.
When Brix Beverage partnered with AT&T to provide ice and water machines for AT&T’s service locations where service staff meet to load their trucks with parts needed for maintenance, Pace needed to quickly purchase those machines upfront. In addition, he decided the time was ripe to expand his product line. And as the company continued to grow, it was also time for a new and larger facility.
However, without three years of financials, Pace found the banks would not lend to Brix Beverage.
“I even had a letter from Dr Pepper Snapple and the cash flow. Not to mention ample personal credit. Even still, my options were bad. There were factoring loans and accounts receivable loans, but I felt I wasn’t in the position where those options were the best ones available to me. I thought I deserved a conventional loan.”
Dealstruck thought so too. As a direct small business lender, Dealstruck was able to work with Pace to secure a business loan with fully amortized terms that work just like a traditional bank loan. And he was able to get through the process very quickly.
In late 2013, coinciding with his purchase and renaming of Brix Beverage, Pace filled out an online form on Dealstruck’s website, and submitted some financial information.
“Dealstruck called to ask for more details about my P&L and balance sheet. I submitted those items, and they were satisfied with the information. I was funded a few days later! The rates are incredible for the type of loan I have. After a detail-oriented, fast process, I got the help I needed quickly.”
Pace describes the plight of the entrepreneur without years of financials, who, even with a great credit score, will get lumped into the category of people who have bad credit.
“Until now – until Dealstruck – there haven’t been solutions for people like me. I just got our financials back from my accountant and I’m right where I planned to be.”
Pace says the only thing he needs now is more customers. “You should be able to give your customers what they want. That’s what Brix is here to help our customers do. Dealstruck seemed to care most about that, too – being able to help.”
There have been additional opportunities for Brix and Dealstruck with Pace securing additional funding, including a line of credit and a refinance of his term loan with an increased amount. Dealstruck is proud to have been there for Sky Pace when he was ready to grow Brix Beverage. And we look forward to his continued success.