After six years of bootstrapping, cocktail mixer and cannabis beverage maker 18.21 Drinks is targeting rapid growth through a rebranded product portfolio rolling out now.
Georgia-based 18.21, founded in 2014 by CEO Missy Koefod and COO Kristin Koefod, launched in 2014 with a line of bitters, syrups and shrubs. Since 2017, however, the company has increasingly looked toward ready-to-drink formats to drive growth and is now ready to cut almost the entirety of its flagship line in favor of a broader portfolio of tonics, spiked seltzers and CBD and THC-infused cannabis beverages, the latter of which will be marketed under the brand name CNBS.
“We’ve seen, especially with COVID, this boom in demand for off-premise liquor stores and grocery stores, and also direct-to-consumer,” Missy Koefod told BevNET. “In fact, our direct-to-consumer has increased 90% since this time last year. So we’re seeing huge demand for our carbonated product including in some national distribution channels and national liquor retailers that want to pick up the line.”
The brand’s new core tonic line features eight flavors — Original, Club Soda, Coconut Lime, Yuzu Herb Tonic, Cucumber Melon, Italian Cola, Ginger Beer and Rosè Elderflower — priced at $5.99 per 6-pack. The products are relaunching this month in new packaging. As well, 18.21 is launching a line of malt-based spiked seltzers (less than 5% ABV) for $9.99 per 6-pack in Spiked Ginger Beer, Spiked Yuzu Herb Tonic, Spiked Rosè Elderflower and Spiked Cucumber Melon varieties.
The CNBS line features similar flavor profiles, including Balance (Rosè Elderflower), Social (Yuzu Herb), Creative (Ginger Lime varieties) and Nature (Cucumber Mint). The line will be available nationwide with 23 mg of CBD per 12 oz. can and will retail for $3.99 per unit. In select California dispensaries, the product will be available in versions containing 4 mg of THC and 7 mg of CBD for $4.99 per can.
18.21 will continue to produce some bitter and tincture products in order to fulfill current distribution deals, but Koefod said those lines may be discontinued entirely in the future.
“We’re a beverage brand that’s meeting the needs of the modern consumer,” Koefod said. “And the modern consumer may want a cannabis beverage one day, may want to have a cocktail with a friend another day. Sometimes I like to sit in the backyard with my sister-in-law and have something that’s already made for me because I’m feeling lazy and we just want to have something tasty.”
The six-year old startup this month launched an equity crowdfunding campaign on Republic with the goal of raising up to $1,070,000. The platform allows individuals to invest any amount (minimum $100) directly in the company in exchange for Crowd SAFE (Simple Agreement for Future Equity) shares; since launch, the campaign has raised over $120,000.
The Republic campaign is the first time 18.21 has sought out investment, Koefod said, as the brand was initially bootstrapped and has strived to always remain profitable with a slow-rolling approach to growth. But as the company seeks broader distribution for its multiple product lines, Koefod said crowdsourcing the funds allows consumers to gain a sense of ownership in the brand. 18.21 is also opening a concurrent priced round alongside crowdfunding.
“I really like the equity crowdfunding format, because it democratizes the investment process and anyone from my next-door neighbor to my mom to your grandma can invest in startup companies where they otherwise previously didn’t have access,” Koefod said. “So we really like that people who are passionate about our company are able to get involved as owners, and I think that that’s a really, really neat thing.”
According to the campaign, the company has assigned itself a valuation cap of $10 million and has generated over $5.5 million in revenue to date and $1.5 million in revenue annually. The brand is available in 48 states and six countries, with liquor distribution in 28 states. Margins are projected to reach 64% in the next two years.
While some of the financing will go towards adding to 18.21’s team — the company currently only has five full-time employees and outsources much of its sales and marketing efforts — Koefod said the company also hopes to build out its ecommerce platform, particularly for the CNBS line which has a more limited path to growth in retail.
Koefod added that 18.21 has also lined up several higher profile investors to be announced in the coming weeks, including those in the music industry and sports world, who will serve as brand ambassadors and participate in marketing campaigns.
“It’s just a really capital intensive product,” Koefod said. “We’re on a 70 day cash cycle, typical for our type of product, and we have to buy truckloads of cans. And that costs capital. So we are raising capital now so that we can meet the demand and if we’re able to raise $2 million, we can do about 10 times the sales of what we’re currently doing just based on the pent up demand that we are unable to currently sell.”