The Cautionary Tale of Tervis: Navigating Market Disruption and Consumer Shifts in a Competitive Landscape

In the ever-evolving world of retail, even established brands are not immune to rapid market changes and shifting consumer preferences. Tervis, the iconic Florida-based company renowned for its double-walled tumblers, recently filed for Chapter 11 bankruptcy, underscoring the challenges that even legacy brands face in today's competitive landscape. As a Florida business deeply rooted in its community, Tervis’s story serves as both a cautionary tale and a lesson in resilience, adaptation, and the importance of market foresight.

The Downfall: A Perfect Storm of Challenges

Tervis’s struggles didn’t happen overnight. The company, founded in 1946 and based in North Venice, Florida, built its brand on quality craftsmanship and innovative designs. However, the last decade has seen tremendous disruption in retail and consumer habits—disruptions that Tervis struggled to navigate.

One of the significant factors contributing to Tervis’s bankruptcy was the closure of key retail partners like?Bed, Bath & Beyond. The loss of these brick-and-mortar outlets, coupled with the rapid growth of competitors like Stanley, Yeti, Hydroflask, LARQ, and Owala to name a few, created a perfect storm that Tervis was unable to weather. In 2023, the company listed?$32.8 million in secured and unsecured liabilities?and only?$15.7 million in assets?in its Chapter 11 filing. This marked the culmination of years of struggle in trying to stay relevant in a changing retail environment.

While the closure of?Linens ‘n Things?in 2008 had little impact on Tervis, the downfall of Bed, Bath & Beyond in 2023 proved far more consequential. The retail giant had long been a significant distribution partner for Tervis products, and its absence left a gap in Tervis’s retail reach that was difficult to fill. The tumbling market share of traditional retail outlets compounded the problem, as e-commerce and direct-to-consumer models rapidly became the dominant shopping method.

Competition and the "Status Symbol" Effect

The rise of?stainless steel water bottles?in 2014 signaled a shift in consumer preferences—one that would eventually impact Tervis significantly. Despite entering the stainless steel market in 2017, Tervis’s partnership with a supplier who failed to meet quality expectations forced them to terminate the relationship the same year. This misstep gave competitors like?Stanley?and?Yeti?a considerable head start. By 2022, Stanley’s 40-ounce Quencher bottles were being hailed as "the new office status symbol" by?The Wall Street Journal, drawing consumers away from Tervis’s products.

The changing consumer landscape also played a role. During the COVID-19 pandemic, Tervis saw an increase in online sales as more people turned to e-commerce. By 2021,?21% of Tervis’s global retail sales?came from online purchases, up from?15% in 2019. However, this boost was short-lived. As pandemic-related restrictions eased, consumers shifted their discretionary spending from products to experiences and services, leading to significant year-over-year declines in Tervis’s e-commerce revenue.

The Bed, Bath & Beyond Blow

While many challenges compounded over the years, the bankruptcy of?Bed, Bath & Beyond?was particularly devastating. The widespread closure of these stores in 2023 dealt a major blow to Tervis’s revenue. As an established distribution partner, Bed, Bath & Beyond had long provided Tervis with access to a broad customer base, and its absence left a vacuum that Tervis was ill-equipped to fill through its direct-to-consumer efforts alone.

Tervis found itself unable to keep pace with brands like Stanley, which thrived in a competitive retail environment. In early 2024, the frenzy surrounding Stanley products reached a boiling point, with consumers lining up outside Target stores to buy limited-edition tumblers, even leading to physical altercations. Tervis, meanwhile, was left in the shadows of this rapidly evolving market.

The Path Forward: A Return to Core Values

In response to these challenges, Tervis has recognized the need to refocus its strategy. Instead of continuing to compete head-to-head with trendy, on-the-go water bottle brands like Stanley, Yeti, and Hydroflask to name just a few, Tervis is returning to its roots as a family-owned, locally invested brand. The company plans to focus on products for?at-home occasions, a niche where it has historically excelled.

But will that be enough, when there are dozens of other customizable tumblers to have for any occasion?

Before the Chapter 11 filing, Tervis launched a new sub-brand called?TervisHome, and the company was planning to introduce a melamine product line by 2025. This shift in focus reflects a desire to carve out a unique space in the market, where Tervis’s reputation for quality and craftsmanship can shine without being overshadowed by newer, trendier competitors.

In court filings, the company expressed optimism that this bankruptcy process is a means of ensuring its "continued existence and operational success in the decades to come." By leaning into its strengths—long-standing relationships with vendors, a consistent family culture, and a focus on everyday, casual dining occasions—Tervis aims to rebuild its foundation.

Lessons Learned: Market Awareness and Adaptation

The fall of Tervis highlights several key lessons that businesses, especially those in competitive consumer markets, should take to heart:

1. Stay Ahead of Consumer Trends: The rise of stainless steel water bottles in 2014 and the subsequent success of Stanley’s Quencher bottles show how quickly consumer preferences can shift. Tervis’s late entry into the stainless steel market and its inability to maintain quality underscored the importance of not just reacting to trends but staying ahead of them.
2. Diversify Distribution Channels: The reliance on brick-and-mortar retail partners like Bed, Bath & Beyond was a double-edged sword for Tervis. While partnerships with large retailers provided significant revenue, the collapse of these partners left the company vulnerable. Diversifying distribution channels—both online and offline—is crucial for long-term stability.
3. Adapt to Digital Transformation: While Tervis did see initial success with e-commerce during the pandemic, they were unable to sustain that momentum as consumer spending habits shifted. Brands must continuously evolve their digital strategies to maintain relevance in an increasingly online retail world.
4. Refocus on Core Values: Tervis’s decision to pivot back to its core identity as a family-owned, locally focused brand could provide the differentiation needed to survive in a crowded marketplace. Sometimes, returning to your roots and focusing on what you do best is the key to survival.

A Hopeful Outlook

While Tervis’s bankruptcy is a cautionary tale about the dangers of being slow to adapt to market changes, it’s also a story of potential reinvention. The company’s commitment to its foundational values and its focus on at-home occasions offers a glimmer of hope for its future.

As a proud Florida-based business, Tervis has the opportunity to bounce back and continue contributing to the local economy. If they can successfully navigate this transition and learn from the lessons of the past decade, Tervis may well secure its place in the market for years to come. For other businesses, the Tervis story serves as a critical reminder: Adaptation and foresight are essential in today’s ever-evolving market landscape.

About the Author

Jeff Philbin is a multifaceted professional with a diverse background spanning television hosting, culinary excellence, and strategic brand leadership. As the host of Dinner Deeas, a top-rated television show in the Tampa Bay market, and a former contestant on FOX TV's MasterChef, where he secured the position of the 5th best home cook in America, Jeff brings a unique blend of creativity and expertise to the table.

In his role as Partner and Director of Business Strategy at Schifino Lee, a leading Branding and Advertising agency in the southeast, Jeff serves as a catalyst for growth, leveraging his extensive leadership experience to drive client success. With over a decade of experience, he has a track record of developing and implementing effective brand strategies that amplify brand awareness and drive market share growth.

At SL, Jeff focuses on cultivating strategic partnerships and delivering creative advertising and media solutions that yield mutually beneficial outcomes. Prior to his current role, Jeff held positions as Marketing Director for various organizations in industries ranging from hospitality to construction, including notable brands such as Front Burner Brands, GrillSmith, and Burger 21. His career journey also included a stint in the IT sector, where he honed his skills in strategic planning and execution.

Jeff's contributions extend beyond the business realm; he is actively involved in community initiatives and serves as an American Marketing Association board member. He has previously served as Vice-Chairman of the board for Habitat for Humanity. He has been recognized as an "Up and Comer" on Tampa Bay Business Journal's prestigious "Top 30 Under 30" list. Additionally, he is a Leadership Tampa Bay 2018 graduate, further solidifying his commitment to leadership and community engagement.

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·????? “Consumer Spending Shifts: From Products to Experiences.”?Harvard Business Review, July 2021.