BevWire recently read about Icelandic Glacial’s expanded distribution network: a home delivery partnership with the LA Times and Sun Sentinel to deliver water along with their newspapers. It’s an interesting partnership to say the least – piggyback on the news delivery trucks and save on carbon footprint. However, with actual hard copy readership on the decline and digital editions on the rise, is this a sustainable business model? There’s also a variety of other questions, like responsibility for product breakage or damage en route for delivery. Or how about how payment is collected? And what about whether the delivery trucks will need to be re-fitted to store the beverages on the delivery trucks?
Having reached out to Icelandic Glacial’s PR team, their forwarded press release provided some details into this business arrangement. Icelandic Glacial will be utilizing the current newspaper delivery infrastructure, making use of truck space and delivery routes. This means that any customers receiving their news through these newspaper delivery trucks will have the opportunity to purchase the bottled water as well. Icelandic Glacial will also leverage on the newsprint media company’s customer service system, indicating that payment may go directly to LA Times or Sun Sentinel first and then remitted to Icelandic Glacial. Given that the payment and delivery trucks are borrowed assets for Icelandic Glacial, it would appear that any damaged product during delivery may be under the LA Times or Sun Sentinel’s responsibility. At the end of the day, this will still come back to Icelandic Glacial – it just means that they will be reimbursing the damaged product that the newspaper company may have to pay to the end consumer.
In spite of where responsibilities rest – beverage company or newsprint organization – the main question still remains whether this business model is good idea and sustainable. Given that readership is on the decline, this should be seen as a win-win for both parties as perception shows they are looking for ways to reduce their carbon footprint. For Icelandic Glacial, this opens up additional distribution and translates to a larger customer base. Being able to promote your product through a trusted media source is helpful as well. For LA Times and Sun Sentinel, this is an opportunity to offer hard copy readers an incremental benefit as well as open up a new revenue stream. Fewer readers translates to more delivery truck space, which can now be filled to deliver bottled water along with the news. And from the reader’s perspective, getting newspaper along with a refreshing bottle of water is just added convenience.
This is a good idea but may also represent a short to medium term solution for LA Times and Sun Sentinel. Consumers can already get their news online or on their phones, so delivery trucks will eventually have more room for bottled water or other products aside from newspapers. The longer term solution may require transforming the entire business model to focus on the “distribution” aspect, leverage the customer base and provide a wider assortment of products to the end consumer. Beyond newspaper and bottled water, other alternatives may include coffee, fruit, and grocery items.
Time will tell but it’s likely that this is the start of many partnerships for newspaper companies to stay relevant and remain profitable.