Adult non-alcoholic (ANA) brand TÖST recently added over $1 million in bridge round funding as the brand grows its DSD network and targets on-premise retail with its new canned format.
The Vermont-based brand would not disclose details of any new investors. Founder and CEO Brooks Addington reported the round was “mainly follow-on from existing investors, and another $455,000 should be closing in the “next few weeks.”
The new capital will support the brand’s recent launches in both its multiserve, glass bottles and its expansion into canned RTDs.
Founded in April 2017, TÖST was an early entrant into the then-nascent ANA category, and that “longevity” has proved to be an asset as the brand moves deeper into retail, Addington said.
“One of our brand pillars has been accessibility. That is not only about location, but it’s price point, he said. “Our goal is to be the product that is commiserate with non-alc options that are premium, sophisticated and meaningful, but aren’t necessarily at a price point that’s unreachable for everyone.”
Constellation Brands’ minority investment in 2023 has aided the brand in achieving that goal so far. Still, Addington also credits his team’s pragmatic approach to growing distribution and a slower innovation timeline.
Despite only releasing two varieties in its first four years, the brand has picked up the pace in the last year. In January, the brand launched its RTDs followed by Sangria in its signature 750ml champagne bottles in May.
“We felt that if we went too early, we’d be too confusing,” Addington said, referencing why the brand waited nearly eight years to launch a canned option. “We didn’t feel like we could have the can story and the bottle story at the same time, three years ago, because we didn’t have the distribution. We weren’t widely known.”
In the last 18 months to two years, the brand has supplemented its mainline distribution partners with a wide DSD footprint that spans about 38 states and over 10,000 doors. In the last few months, TÖST added Union Beer and T.J. Sheehan Distributors while also opening up fourteen new territories with Southern Glazer Wine & Spirits in the last year. The interest among DSDs is representative of the elevated demand coming from consumers.
“Five years ago, we had to twist arms to get major partners to demand from their DSDs and to bring a product like us in,” Addington said. “They had no interest.”
That evolution is also seen in how retailers are merchandising ANA products. The move by Target and Walmart to build dedicated ANA sets are setting a precedent for other retailers, Addington said.
“Two years from now, we’ll probably be in all the non-alc sets,” he said. “Take Wegmans as a great example: We started in sparkling, went to mixers, and now we’re in their dedicated non-alc set. That’s a six-year relationship.”
That elevated visibility in grocery and added distribution among DSDs will potentially help TÖST break into “the harder sell” of on-premise accounts, Addington said. The brand’s new cans are also targeting those channels where a large-format, glass bottle will not work.
TÖST is focused on growing its presence in casinos, cruise ships, event spaces and other places where aluminum is preferred if not required.
“It closes the gap on saying we are a brand for anytime, anywhere and everyone,” he added. “If we’re committed to that, but we really can’t get there solely on bottles. The cans get us there and that really important for us as a company.”