Sparkling tequila cocktail Onda has closed a $12.5 million funding round led by existing investor Aria Growth Partners, the company announced today.
Aria originally backed the brand in its $5 million Series A round last May, and is reinvesting on the back of a strong performance over the past 12 months, during which it has surpassed 10,000 total doors across more than 30 states. Two other existing investors, Clayton Christopher and venture studio 25madison, also participated in this round.
A previous BevNET Award winner, Onda markets an 8-SKU line of tequila seltzers in 12 oz cans available at national retailers including Publix, Total Wine, Trader Joe’s, Whole Foods, Walmart, Costco, Wegmans, Circle K, Rite Aid and others.
“We are thrilled to be Onda’s partner,” said Trevor Nelson, co-founder at Aria Growth Partners, in a press release. “As the clear leader in premium tequila seltzer, Onda’s elevated brand and refreshing taste are bringing a whole new group of consumers into the market while offering existing ready-to-drink consumers a more enjoyable and satisfying option.”
The new funding confirms that Onda’s strategic partners align with the brand’s long-term vision, co-founder and CEO Noah Gray told BevNET yesterday. Having enjoyed success thus far with national retail accounts, the brand is focusing on supporting those partners with a more muscular sales and marketing operation.
“Between supporting our distributors and our national accounts business, it’s an expensive endeavor,” said Gray, adding the brand is running “several hundred” demos per month. “We’re investing in building up the sales team, in trade and field marketing, and a lot of the dollars are going into local activation. ”
Gray said that the company is seeing its highest ROI on marketing dollars by sampling the beverage at the point of sale or at local events.
But after posting 700% growth in 2021, Gray said Onda is looking to pace itself in the short term by cultivating its presence in existing markets. He credits wholesaler partners Breakthru Beverage Group and Republic National Distributing Company with helping drive growth in select markets, and pointed to the hiring of Tom Schlachtenhaufen — a former sales executive at craft distillers Sagamore Spirits and High West Distillery as well as conglomerates Stoli Group and Diageo — as President in March as indicators of the brand’s positive trajectory.
“We’re kind of turning a corner on strategy looking to double the account base, and we’re well on track to do that.”
Meanwhile, Onda will continue expanding its lifestyle credentials by partnering with online fashion retailer Revolve as its “exclusive tequila seltzer.” Revolve’s CEO, Michael Mente, and Chief Brand Officer, Raissa Gerona, have also invested in the beverage brand, while Onda co-founder and actress Shay Mitchell has a long-standing relationship with Revolve.
Onda first partnered with Revolve as a sponsor at the retailer’s pop-up store in Los Angeles last winter, an indication of the type of experiential marketing Gray is aiming to continue developing. The brand also sponsored a dedicated bar area at Revolve Festival, an ancillary event to the Coachella Music Festival.
After launching the four “Paradise Collection” flavors last year, Gray said the drinks themselves won’t likely see more innovation until sometime next year, though the brand is exploring the potential for increasing the can size to stimulate its on-premise turns, which is around 10% of its total business.
“I think 80 (off-premise) 20 (on-premise) is going to be the right ratio for us, and that’s going to take a push and some new strategies, like a larger format, single-serving can, like a 16 oz. It’s kind of a new space for cans and you kind of have to look at the strategies that the beer teams have been using — bucket programs, [for example]. That’s where we are finding success, looking at what works for beer.”