There’s been a major shift happening in the adult beverage space over the last decade.
It has household beer brands frightened.
They should be…
It all began when craft beers started gaining traction and pulling beer-drinkers away from traditional light beer.
Then came Mike’s Hard Lemonade, hard seltzers (think White Claw), and other pre-mixed ready-to-drink beverages.
Well, guess what?
The next startup my investing group The Boardroom will be backing has played a major part in the disruption of the adult beverage space.
I’ll be sharing more over the next week or so as we approach their investing campaign launching.
In the meantime, I suggest you download a FREE copy of my latest investing guide, the Startup Investor’s Playbook.
How big of an opportunity does this startup present?
A recent study (Grand View Research) showed that the hard seltzer market alone was valued at more than $4B in 2019.
And as people continue to seek drinks that are gluten-free, have fewer carbs, and less sugar…
This market will continue to grow.
Over the past five years, angel investors and VCs have funneled loads of money into startups that disrupt the alcohol industry.
Since the end of prohibition, the alcoholic beverage market has been pretty much the same. The same old drinks were made by the same old companies — a handful of big businesses that became stagnant and stuck in their ways.
Just now, finally, the market is ready for innovation, and there is a new troop of entrepreneurs to make it happen.
With all that’s happening in the beverage world, I wanted to whip something up to show you why you should be watching. So, here is my breakdown of what you need to know about the adult beverage industry.
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Advantages of New Beverage Startups
It seems like the demand for change has been here for years but the big guys were just too slow. Nimble startups, on the other hand, weren’t. They can steal market share because they aren’t afraid to think outside the box and bring the industry up to date.
For example, e-commerce is one area that startups consistently win in. People are thrilled that they can finally order drinks for a party from their couch and have it delivered to the door. The startup world is dominating this model while the traditional alcohol companies are totally out of the loop-
The difference in taste, lifestyle, and values of younger generations shape this space. This is why companies are turning to innovative marketing tactics, new business models, and new drinks to capture this market. Their customers are so responsive to these novel ideas that loads of new niches have been created out of nowhere.
The New Adult Beverage Industry
Drinks that fell out of favor a hundred years ago are now fully in vogue, appearing at trendy cocktail parties and get-togethers. Meanwhile, as technology creeps in, some brewers are trading their aprons for lab coats.
I’m going to show you some of the essential pillars of the new adult beverage industry. If you haven’t heard of some of these, I don’t blame you. These things have popped up very quickly and very recently.
Here are some products and services I think you should be aware of.
- Craft spirits – I’m sure you’ve heard of craft beers — beers brewed by independent owners in small batches using traditional methods with a focus on flavor and quality. Well, this is the same, but with spirits or hard liquor.
- Anti-hangover solutions – As the name implies, these drinks rid you of a nasty hangover. They use herbs, vitamins, or even probiotics to prevent or cure hangovers.
- Delivery services – These e-commerce businesses bring your drinks of choice right to your doorstep, on-demand.
- Subscription services – Subscription services bring drinks right to your door but with a twist. The company sends you specially curated drink options. You can order weekly wine selections from experts based on your preferences, a bundle of local craft beers, or anything in between.
- Alcohol appliances – These range from poring machines that perfectly aerate the wine and bring it to the ideal temperature to home-brewing machines.
- Cannabis-infused drinks – With more countries and states legalizing cannabis each year, it’s only natural that new cannabis products like this will pop up. There non-psychoactive CBD drinks as well as regular old cannabis drinks designed to give you that extra kick.
- Low alcohol and alcohol-free wines and spirits – More people want to enjoy a drink without the buzz or hangover. Startups are capitalizing on this by making a variety of new options for those avoiding intoxication.
Top Adult Beverage Startups
Now that you have a feel for the space, let’s look at a few examples. Here are some of the best startups the new adult beverage industry has to offer.
To partake in the ancient tradition of sharing a drink with friends you don’t need unnatural ingredients and loads of alcohol. This is where Haus comes in handy.
Haus’s drinks are low in alcohol and are made with all-natural ingredients with a focus on taste and complexity. The drink they make is called an apéritif, something that has been popular in Europe for centuries by never quite caught on in the U.S.
Haus caters to the way many Millennials drink, partaking in the ritual of drinking without trying to get drunk. The beverage is perfect for dinner parties and hanging out, even if you have work the next morning.
Haus offers all its products online and even has a membership program for a customizable monthly subscription box.
So far, Drink Haus has finished a seed round and earned $4.5 million in funding.
Drizly is the world’s largest alcohol marketplace despite being relatively new to the industry.
They partner with retailers in over 100 cities across North America to offer customers on-demand delivery of a huge selection of drinks.
It’s hard to imagine why this is only just now becoming a thing. A huge portion of drinking has always happened at home, far away from bars and restaurants. Imagine you are planning a party. You are already bogged down with so much to do, being able to complete your long and complex drink order in a few clicks is a much-welcomed luxury.
And with the rise in e-commerce due to COVID-19, Drizly has flourished. It was already well-positioned to cater to this growing market before the shift in buying habits.
Drizly is backed by an incredible $119.6 million in funding.
Finally, we have a spirits tasting club with a classic, classy feel to it. This startup gives customers the chance to taste a huge array of fine, rare, and unique spirits.
Think about this — when you go to the liquor store, there are only a few dozen brands on display, max. Meanwhile, there are over 15,000 different spirits on the market today. Flaviar thinks people need access to this rich environment that exists outside the big name brands.
Flaviar helps grow tons of craft spirits startups that could also be on this list. The club is revitalizing the hard liquor market while enriching and educating passionate members.
Flaviar has raised a total of $5.7 million so far.
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