Wandering Bear Raises $5M to Support Ecommerce, Drops Beans and Pods

New York-based coffee brand Wandering Bear announced this week that it has raised a $5 million funding round backed by existing investors. The new capital arrives as the company seeks to scale its online ecommerce business, which has become its main focus following a post-pandemic pivot.

Speaking with BevNET today, Wandering Bear co-founder and CEO Matt Bachmann said the funding will primarily go towards supporting the company’s growth online, as well as supporting its return to the office channel with kegs and bag-in-box cold brew. The company will also seek to hire in several key positions, including finance, supply chain and marketing.

“The majority [of the financing] is going to media and really supporting our continued scaling across DTC and Amazon, and really build up the CRM [customer relationship management], build up the email database, the SMS database and awareness that allows us to really thoughtfully expand the wholesale channel,” Bachmann said. “So we’re creating the crossover between DTC and office, creating the opportunity where we can, in good faith, go to a retailer in 12 months and say ‘Here’s the data from your market. Here’s the volume of customers we know we can bring to shelf.’ That really is the long term strategy.”

The funding arrives as Wandering Bear seeks to renovate its product portfolio to focus solely on ready-to-drink cold brew. The brand sent a notice to its customers this week that it is discontinuing its packaged coffee beans and K-Cup pods, which were introduced in August 2020, but will sell through its remaining inventory. Wandering Bear had previously dropped flavors for its single-serve 11 oz. RTD products (keeping a single black SKU) while expanding flavor options for its flagship 96 oz. bag-in-box line.

“We had launched the dry products, and they quickly found solid followings, but month-over-month they became smaller and smaller parts of the business,” he said. “What’s really been played back to us time and time again is that we are helping create a premium cold coffee occasion inside the four walls of a home or office.”

Prior to the pandemic, Wandering Bear utilized an omnichannel approach focused primarily on office and food service alongside an emerging retail business, while online only served as a relatively minor portion of its channel mix. COVID-19 lockdowns, however, forced the company to shift gears. Much of the brand’s time since then has been spent “with our heads down” slowly growing the direct-to-consumer business, Bachmann said.

Today, he said, the brand has increased revenues 3x since pre-COVID and ecommerce has gone from less than 1% to about 80% of the business. The other 20% is split between offices and wholesale, with a retail presence primarily in New York and California through chains like Whole Foods and Kroger.

The pivot allowed the company to operate with a leaner team; since 2020 Wandering Bear has reduced its head count to about 15 full time employees, with some senior staff being retrained and repositioned to focus on online sales and marketing.

As pandemic restrictions have eased and more U.S. companies have begun returning to offices, Wandering Bear is now working to reopen past customer relationships to rebuild its presence in the channel that at its pre-pandemic height provided more than 80% of its revenue.

“Having always been a leader in that space, we’ve gotten to be at the table with some of the key players in both real estate and some of the big tech and media companies, and the financial companies, to help create the set of amenities that employees will be returning to,” he said.

While office growth and a “very selective” retail expansion are both in the works, Bachmann said he doesn’t expect them to overtake ecommerce anytime soon. Digital will remain the core focus for the brand, he said, suggesting that the company isn’t “anywhere near the ceiling” of how large it can scale online and that Wandering Bear will “see this strategy through to its natural apex,” with digital and social marketing expansion being a top priority.

The company has an in-house creative team focused on generating content and also has about 1,500 micro-influencers and brand ambassadors who create organic content across social media platforms.

Recent changes in the ecommerce channel, including international privacy laws and Apple’s latest OS update for iPhones which allows consumers to opt out of tracking from apps, have disrupted the standard online growth playbooks for brands, Bachmann said, but Wandering Bear is looking to return to marketing basics going forward and the funding round will help support an expanded media strategy.

“I think we are moving past a stage where it can be purely quantitative,” he said. “The ‘throw it at the wall, see what sticks, trust that something is going to take off and drive a bunch of sales for you’ [approach] – I think that kind of low conviction, high volume testing strategy … was a very effective way to scale in these channels for a very long time. And now we’re getting back to marketing basics. Who is your target consumer? What is the message? What is the offer?”