What does your drink wear? Plenty, if Puffin Drinkwear has a say.
The maker of fashionable sweaters, hoodies, parkas, tees, and more for drinks tapped former Hydro Flask CEO Scott Allan as interim CEO to lead the Bend, Ore. company beyond its outdoor heritage, expand at retail, and get global. The company also just closed a Series A fundraising round for an undisclosed sum.
“We have great investors that are now backing the company with capital, as well as a network of expertise and resources,” Allan said. “The funding allows the company to pursue the next chapter of its existence with growth in sales, DTC e-commerce, product, upgrading our team, and scaling the brand.”
Allan, who also sits on the board of outdoor blanket brand Rumpl, sees similarities between the early days at Puffin and the early days at Hydro Flask. He joined Hydro Flask in 2012, and helped grow the water bottle maker 10x over the next three years. In 2016, he became senior vice president and global general manager following Hydro Flask’s $210 million acquisition by Helen of Troy.
Puffin is eyeing its own growth story now as the company transitions from what Allan described as operating in “survival mode” to a focus on longer-term strategizing.
The company’s annual recurring revenue has risen 53% since last year, with the business expecting what Allan said will be “strong double-digit growth” in 2023. Puffin, which launched in 2019, generates most of its revenue from wholesale accounts. The brand is in more than 4,000 stores, including Tilly’s, West Marine, REI, Bass Pro Shops, Williams Sonoma, Scheels, Eddie Bauer, Duluth Trading Company, and Public Lands.
While the company does have plans to grow e-commerce, it remains focused on wholesale.
“We think that wholesale and the experience of seeing it is important. That discovery. It may just be you’re a fan and it’s Dads and Grads season and you see the new products at retail, and it prompts the impulse buy,” Allan said.
He pointed to the company’s showing at Surf Expo in January as a good example of that brand discovery process. The trade show was Allan’s first with the company and he described seeing attendees countless times walk by the Puffin booth, back up, stop, and start laughing.
“That’s powerful,” he said.
That ability to grab attention from passersby allowed the company to gain traction among chain retailers, while also continuing to perform in core, independent shops, Allan said.
Puffin, for example, entered REI in 2019. The original expectation was a 4% sell-through at the outdoor retailer, but the brand ended up doing 35% in its first week on the floor. The activity prompted REI to put in a second order immediately following the first, Founder Tyrone Hazen said.
When Puffin first started, however, they approached much smaller shops.
“We were definitely old school. We hit the pavement and knocked on doors here in Bend,” Hazen said. “We’re lucky enough to be in a tourist destination and so we have retailers wanting fresh, new items in their stores.”
The Bend Store, a downtown gift shop with locally made items, was the first door Hazen tried. Tourist season had just ended and it wasn’t quite holiday when he pitched Puffin to shop owner Delia Paine.
Midway through the pitch, Hazen recalled a customer leaning over and asking to buy a Puffin.
“We backed away from the counter and left 10 of them there,” Hazen said.
A couple days later, The Bend Store requested 36 more and then 100 for the weekend. The following Monday, the shop called up to ask how much inventory Puffin had and if they could buy all of it.
“We knew we had something and we knew we had something that would sell at retail,” Hazen said. “That is why, to Scott’s point, we’ve had so much luck in the retail space, in brick-and-mortar stores, because you see an image and it just doesn’t quite do it justice.”
After all, Allan said, seeing one of the company’s designs in person prompts the question: “What would be the right Puffin for the occasion?”
Expanding Customer Base
Puffin releases new designs typically in the spring and fall, with occasional drops outside of those windows released in its direct-to-consumer channel.
New offerings in the company’s travel and leisure line, with a collection named “Time to Chill,” speak to Puffin’s ambitions to build out its styles and silhouettes. “Time to Chill” totals 10 SKUs, and includes robes, polos, and jean jackets in multiple colorways and prints.
“We view ourselves as an outdoor industry brand, but we want to start expanding out,” founder Tyrone Hazen said. “There are so many places we can go with identity here. We don’t want people to be left out. We’re trying to find those adjacent (markets) – what’s the next Venn Diagram circle out there that we can bring our product to.”
In the case of travel and leisure, this opens Puffin up to golf course communities, hotels, and spas, Hazen went on to say.
Collaborations will be another key to broadening the brand’s reach among new retailers and consumers.
“It’s interesting to look at the category and the products, and to think about a puffy jacket with a logo on it and where that can go,” Allan said of the potential that collaborations hold for the business. “I think some retailers and brands get it and see it, and see it’s a great way for them to team up with us to try and bring something new to their consumer.”
The company’s collaborations so far include with Ron Jon Surf Shop on a hoodie, the Pittsburgh Penguins National Hockey League team for a jersey, and a concessionaire at the Kennedy Space Center on a NASA spacesuit.
Interestingly, on that space center collaboration, Hazen said Puffin was approached three times before deciding to move forward. Most collaborations have started out that way, with other businesses reaching out to Puffin.
“So far, we have done very little outreach (to companies) simply because we didn’t have the resources to do it,” Hazen said. “It’s been mostly inbound and that’s one of the most exciting opportunities for us.”
The Economy and Gifting
While many brands and retailers have too much inventory on hand at the moment, Puffin had the opposite problem last year – it didn’t have enough to meet demand.
So the high inventory levels seen at some retailers is not with Puffin product, Allan pointed out. Sell-through remains strong and the rollout is also progressing with larger retail partners, he added.
It helps that a Puffin parka, suitably named “The Pahka,” with a faux fur-lined hood retails for $18.95 versus the hundreds of dollars a consumer could easily spend on the human-size version. As more CEOs discuss macroeconomic headwinds in analyst calls, Puffin’s price points (starting at $17.95) don’t give consumers the same level of pause at the cash register as higher priced items might.
It’s a potential competitive advantage for Puffin.
“People still gift. They still spend (during downturns). It doesn’t go to zero,” Allan said. “This is not $1,000. It’s not a $1,500 surfboard or backcountry set up. It’s fun. It’s cheerful. It’s at a great price point. It’s an easy add on for retailers.”
Hazen added the company’s strongest sales have historically been during gifting seasons.
“Gifting still needs to happen,” Hazen said. “So, even in a troubled economy where people are tightening their belts a little bit, there are always birthdays or anniversaries or Father’s Day.”