Not every idea for a baseball-themed product is a home run. But a new startup selling customized beer mugs made out of the barrels of baseball bats thinks it has hit out of the park.
Winter Haven, Florida-based Dugout Mugs became an officially licensed partner of Major League Baseball after the conclusion of the 2018 regular season. Its merchandise is now available in 70 stadiums across MLB and Minor League Baseball. The company’s partnership with the MLB Players Association also enables it to work with baseball stars to promote its product.
“Our founder Randall Thompson was a former pitcher in the Toronto Blue Jays organization and got cut,” said Kris Dehnert, CEO and co-owner of Dugout Mugs. “While coaching at Florida Tech after, he saw a coach cut a baseball bat in half for a hitting drill during practice; that’s where the idea came from.”
Thompson went on to launch one of Dugout Mugs’ current competitors Lumberlend in 2016, before leaving months later amid disagreements with his partner over the direction of the company. Dehnert and Thompson then crossed paths at the end of that year to hash out what would become their go-to-market strategy.
First on the docket was to change the name of Thompson’s new venture – Thompson Mug Company – to one that more accurately described what it offered. After 10 weeks of research and development, Dugout Mugs also got a new website, logo, and hired additional staff.
“I didn’t want to just jump back in and put more juice into a broken system,” Dehnert said, adding that Dugout Mugs had only earned $60,000 in revenue before taking orders again in March 2017. Dugout Mugs is also Dehnert’s seventh business launched across several industries in his career, including restaurants and retail.
Dugout Mugs projects total revenue in 2019 will eclipse $3.5 million, according to the company. That is a 59% increase year-over-year, and more than triple the amount of revenue earned by the company in 2017. By the end of next year, Dugout Mugs also expects to have its merchandise available in 110 baseball stadiums in the U.S, including the four remaining MLB parks it does not have a presence in yet.
“At MLB, we always want to offer our fans a wide array of products to support their favorite players and teams, so we’re constantly looking for great partners that help fit that mold,” said Josephine Fuzesi, MLB’s vice president of global consumer products. “Dugout Mugs has created a unique item that lots of fans have taken to, so we’re pleased to work with them and hope they can enjoy continued success.”
Dugout Mugs makes the bulk of its money through its license agreement with MLB. The company regularly fulfills orders placed by Fortune 500 companies for customized mugs as gifts for employees and sells limited-edition mugs signed by current and former baseball players – such as Luke Voit, Ivan Rodriguez, and Ozzie Smith to name a few past examples. Both Fanatics and Lids are also distributors of Dugout Mugs.
“We make our own wood in Quebec City in Canada, and ship it to Florida,” said Dehnert. “It’s the same wood used to make baseball bats, but we produce three barrels at a time instead of one bat.”
Examples of other MLB licensed partners include FatHead and 5th & Ocean, a division of New Era. Each vendor also works with other professional sports leagues to maximize revenue.
While league partnerships do help increase awareness for niche retail brands, what helps successful companies stick in the minds of consumers is a strong social media and marketing strategy, according to Stephen Shapiro, associate professor of the Department of Sport and Entertainment Management at the University of South Carolina.
“Traditional advertising is very expensive and effective digital and social media advertising can be costly as well,” said Shapiro. “So the second important factor for licensed products to stick out among the competition is effective targeting. These companies need to know which segments of the sport consumer market are more likely to connect with the product and create targeted marketing efforts to expose those segments.”
Lack of awareness or ineffective targeting could easily cause unique ideas to fail, Shapiro added. But a failure to establish a transparent distribution channel is even more costly.
“There is significant clutter in the niche product market,” he said. “Dugout Mugs is a really interesting and creative product that seems to fit nicely with the MLB sports consumer market. However, if the product is not easily accessible and consumers are not aware of where they can purchase the product, it will be challenging to generate consistent success.”