Using Local, Authentic Connections to Compete in a BIG Market

For an occasional camper or party host, pretty much any plastic box that can hold ice might be sufficient to meet one’s food and drink cooling needs, but for an outdoor enthusiast who spends more time away from modern conveniences, a higher caliber cooler starts to look more like a necessity. As a small, Flagstaff-based business, one might think Canyon Coolers would struggle to compete against the giants in the cooler manufacturing market, but majority owner Jason Reed Costello actually credits the company’s success to those very factors: “There seems to be room in the marketplace for this kind of happy, kind of funky, boutique cooler manufacturer competing against billion dollar brands.”

Over the last 11 years, the company’s unique designs have gained a foothold among high end cooler users in the Mountain West where activities like hunting, fishing, whitewater rafting, and camping are common pastimes. Participants in these activities who want to support small, local gear manufacturers, turn to Canyon Coolers. The high quality product, great customer service, and lifetime warranty have led Canyon to grow a base of loyal customers, many of whom own multiple of the company’s coolers and other items. These days, about 23,000 coolers pass through the Canyon Coolers warehouse each year.

Getting into the Business of Coolers

Costello’s entry into the cooler business came when a different cooler sales opportunity he invested in turned south. Left with stock he needed to sell off, he began the Canyon Coolers name and website. After finding some initial success, Costello decided to see the cooler business through, and eventually began customizing his design to meet the needs of his clientele who, at the time, were whitewater rafters.

A recreational rafter himself, Costello talked with his industry connections in outfitter and gear seller circles to find out what folks were really looking for from these products. After filtering through a lot of conflicting information, Costello landed on a design that satisfied about 80% of the requests he was given. One notable change Costello made was to scale down his product to make it a better fit for a wider audience of western rafters, most of whom use smaller boats than his initial group of primarily Grand Canyon rafters.

After establishing enough credibility in the rafting market, Canyon Coolers set its sights on western hunters. According to Costello, “Western-style rafting is an expedition, and there are some parallels to those hunters who go out for weeks on end or have to move a lot of meat without it going bad.” Despite these audiences seeming very different on the surface, when it comes to coolers, their needs are quite similar. Costello found support among hunting and conservation organizations in Arizona, and was able to expand into that market. As the company grew, the market broadened to include everyone who spends time outdoors. For Costello, “the neat thing about [the cooler business] is you’re really tied to people’s passions.”

The Authenticity and People of Flagstaff

Being in the high end cooler business in Flagstaff has turned out to be a real asset for Canyon Coolers. Easy access to the outdoors and the people who love them provides the company a boost to everything from marketing to staffing. “I think it lends our brand an authenticity that it wouldn’t have in Phoenix,” Costello explains, noting that when he needs to, he can take a cooler outside, walk a few feet, and take a great picture with it in the same kind of environment where his customers might use it.

Costello has also found that his employees choose to work at Canyon Coolers specifically because of its ties to the outdoor industry, which leads to less turnover: “I think us being in that outdoor space helps us because everyone here is into the outdoors. Whereas if I hire a guy off the street to work in my warehouse in Phoenix he’ll go to the warehouse next door for 25 cents more, the guy here wouldn’t do it because the warehouse next door isn’t an outdoors company.”

In fact, Costello has had overall good experiences with the people of Flagstaff, be they NAU engineering students contributing to the business through their capstone projects, business resource providers like the folks at NACET (now Moonshot), or just the people he does business with in town. Costello explains that he values building strong relationships with those people over the bottom line: “When it comes to business, it isn’t always about getting the very best pricing. It’s about having people that you can rely on around you… Knowing that I can rely on the guy, and that whether he likes me or not, he’s gonna run into me in the supermarket or a restaurant or something—I think that helps hold us all accountable.”

Drinkware and Local Artists

Apart from their coolers and cooler accessories, Canyon Coolers has also dipped into the drinkware market. Costello confides that he hasn’t contributed much in terms of innovation to the drinkware world, but rather that he got into selling drinkware as a way to offset the costs of “shipping empty boxes all over the country if not the world.” The business started out offering a copper-plated cup in homage to its “Copper State” origins, before adding a few other colors to the mix. More recently, though, Canyon Coolers has found a way to use drinkware to underscore the local feel of its brand: partnering with local artists.

The first two partners in the drinkware “artist series” are based out of Northern Arizona: Ashley Matelski, a Flagstaff resident whose pieces feature desert botanical designs, and Duane Koyawena, a Hopi-Tewa member whose work is a modern take on traditional Hopi pottery. Additional drinkware designs are currently being developed by Flagstaff-based graphic designer, Rod Cooley, whose work draws on his love for the outdoors and his Native American culture, and graphic designer and illustrator, Rachel Jung (Rayco Design), out of Southern Utah whose work reflects her self-described “adventure addict” nature. Costello hopes to have the two new designs available by the 3rd or 4th quarter of this year.

Costello seems to enjoy the challenge involved in finding the right artists to partner with for their drinkware. He explains, “It’s funny… because we have to think bigger than Flag to do it, but you have to be authentic, too.” It’s this focus on authenticity in all aspects of his business that has really helped Canyon Coolers compete by drawing in local community supporters, whether they are residents in Flagstaff carrying their artist series cups around town, or rafters in Oregon giving online feedback on what they’d like to see in the next generation of cooler.

Mistakes, Lessons, and Advice for Flagstaff Businesses

When Costello started Canyon Coolers, he knew a lot about building relationships but almost nothing about building a brand. He describes the early stage of the business as one in which he just tried to survive long enough to figure things out. As he puts it, “We made a lot of mistakes, and we tried to make them quick and own them and then move on.”

Some things he learned along the way include understanding the importance of cash flow and the high cost of growth, but the biggest lesson for him was learning to say “no” to arrangements that don’t actually benefit the business. In his case, being wary of the contracts offered by big box retailers and turning them down if they are not actually profitable has been pivotal to keeping Canyon Coolers thriving.

Overall, Costello recommends Flagstaff to other business owners. He says, “Flagstaff is a great place to do business,” even though it can be tough, particularly when it comes to hourly wages. For him, the trade off is in a strong workforce: “You do have smart, educated, worldly people here that will work for you for the right reasons, and do things for the right reasons, and I think that’s a lot of what Flagstaff brings to the table.”