As travel rebounds, Delta is bringing more food and beverage startups on board
Yoni Reisman founded the startup Tip Top Cocktails in September 2019 with the goal of offering a premium cocktail experience efficiently in a can. 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 was re-launching its in-flight beverage service that the conversation took off. And as of April 2021, Delta began serving Tip Top’s canned old-fashioneds and margaritas aboard its domestic flights.
Tip Top is one of several start-up food and beverage brands that Delta started offering when it reintroduced in-flight services following pandemic-era restrictions in 2021. By partnering with one of the country’s biggest airlines, the founders say that they have been able to raise brand awareness, hire more staff and bolster their existing business.
Reisman said recent customer surveys show about 20% of Tip Top customers discovered the brand on a Delta flight. Big Boi from Outkast shouted out the brand on social from a flight, as did chef Kevin Gillespie.
“Because we’re on Delta, a lot more people know Tip Top exists,” Reisman said.
Delta specifically focused on working with underrepresented populations and those that take a conscious approach to their businesses. Some are newer startups, while others more established. Mike Henny, the managing director of Onboard Services Operations, told Modern Retail in an email that when it was considering its new offerings, Delta sought out smaller, values-aligned brands with unique products.
“We really want to create meaningful relationships in addition to providing the very best customer experience.” Henny said.
But pairing bespoke brands with one of the world’s biggest airlines doesn’t happen overnight. Delta has more than 4,000 flights a day and serves roughly 200 million customers annually. That meant the brands had to figure out to scale up their production.
In Tip Top’s case, the company operated in Georgia. But the deal with Delta required a fast expansion in order to be able to get the product on planes in a timely fashion.
“Very quickly, we had to get distribution in a bunch of their loading markets,” he said.
But this challenge turned into an opportunity. Once production ramped up, it allowed Tip Top to increase its reach in the markets where it had to create the new distribution deals, Reisman said. And there’s already expansion: Tip Top will be offered on international flights beginning this summer.
Another brand that’s seeing expansion from the Delta deal is Kate’s Real Food, which was founded in Wyoming in 2011. The brand offers certified organic, gluten-free and kosher snacks, and its dark chocolate cherry and almond bar have been on Delta planes for about three months. Later this summer, the offering will switch to lemon coconut bars.
“It’s been a great opportunity to bring exposure to our products,” said sales director Michael Richardson. “People get to try something that’s unique, something that they may not see on their regular shelf.”
But getting there came with logistical quandaries. Kate’s had recently opened a new production facility in Bedford, Pennsylvania, which helped the company create enough bars to meet the Delta demand. Additionally, the orders are much larger than they used to be, which required finding bigger trucks for shipment.
Reviving a spirits business
In the summer of 2020, Chris Montana had already lost most of the business that he and his wife Shanelle had been building for the past seven years. The pandemic had shut down their distillery business, Du Nord Social Spirits, cutting out 60% of their revenue. The George Floyd protests that swept through Minneapolis set literal fire to his inventory.
Then, he learned Delta was trying to get in touch with him. The airline wanted Du Nord, the nation’s first Black-owned distillery, on its flights. At first, Montana hesitated. He didn’t have the capacity to provide the millions of mini bottles required by an international airline.
“There was no chance, at that time, we could do business with Delta or anyone else,” he said. “Our priorities were somewhere else.”
But weekly meetings ensued. Du Nord got back up and running. It took over a year, Montana said, but a plan took shape, including setting up distribution agreements 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 on just $60,000 of the founders’ own investment, it was a massive scale-up. Du Nord’s mini bottles started being served aboard in October, Montana said, and the deal is already opening new doors. Du Nord is now available in Atlanta, where Delta is headquartered.
“It took so many people saying that ‘this is what we want to see happen,’” he said.
For Montana, his business isn’t just about the product but bringing diversity to the historically white and male spirits sector. The Delta deal has allowed him to hire more staff: Du Nord went from two employees plus Montana to nine, with a focus on bringing new entrants into the industry.
“It’s not just about the booze in the bottle, and we think that investment in our community and the next generation of entrepreneurs is very much worth it,” Montana said. “We’re not used to that being reflected back at us, and that’s what happened here.”
Broadening brand reach
Before the pandemic, retail startups were increasingly looking at partnerships in the travel sector as a unique way to get their products in front of customers. Copper Cow Coffee for example had signed a deal with Hilton Hotels to have its products featured in sole locations. Meanwhile, Farmer’s Fridge, which sells salads and other meals through vending machines, targeted airports.
But the pandemic largely put many of those initiatives on ice. Now, more startups are looking to resume partnerships in the travel space. The International Air Transport Association reported this month that demand is rapidly returning to pre-COVID levels, with a 78.7% increase in demand compared to April 2021, in large part bolstered by demand for international travel.
Luggage startup Away is one such 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 deal is meant to provide “comfort and quality” while travel demand soars.
When Cason Crane launched his Explorer Cold Brew business in 2020. he said his products were designed with travel in mind; Explorer’s cold brew comes in 32-ounce bottles as well as single-serve two-ounce bottles.
“There are some customers who prefer to have single-serve for flexibility and portability,” he said. “But even at that point, it never occurred to me an airline would want to serve it on board.”
Then in the spring of 2021, Delta called. The company had come across the concentrate organically, Crane said, and wanted to know if Explorer could come aboard as its 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 capital funding. As of June 2022, Explorer’s single-serve two-ounce concentrates are being offered on select coast-to-coast and Hawaii flights.
“We’re tracking mentions on Twitter and Reddit, and it’s so energizing to see how excited folks are to finally get a premium, elevated cold brew coffee experience on an airline,” he said. “It’s been incredible.”
For other brands that partner with Delta, a business-to-business approach was the goal from the outset. Thrive Farmers International, which has its English Breakfast tea aboard Delta flights, began being offered about a month ago. The certified B corporation 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’re having in farm communities, and it’s hard to get there small chunks at a time,” said the company’s president Tom Matthesen. “So these types of partnerships are really critical.”