To put into perspective just how much Los Angeles-based Greenbar Distillery has changed over the past 12 months, consider this: around this time last year, the company discontinued its line of orange bitters, an acknowledgement that it had struggled to “convince enough people that it was different,” according to co-founder and CEO Melkon Khosrovian. Fast forward to today, though, and Greenbar is making more orange bitters than ever, even if you still can’t find it anywhere in stores.
“Ironically we are simplifying our spirits offerings, and, doubly ironically, using some of them more than we ever have as ingredients in our RTD line,” said Khosrovian, in reference to Greenbar’s non-alcoholic Orange Bitters + Soda in 12 oz. cans. “More and more we are becoming our own customers because this is how we make the drinks. They’re not based on some formula or flavor that we buy; they’re based on our own recipes.”
For Khosrovian, who created Greenbar in 2004 with his wife Litty Matthew, the shift in their business towards RTD products has been dramatic. Prior to the pandemic, he said, the company’s primary goal was simplifying craft cocktail preparation for busy restaurants by “cramming a lot of ingredients and flavor” into its spirits, thus allowing bartenders to make drinks with fewer steps. Prior to 2020, on-premise sales represented 80% of its total business, spread across a wide portfolio of organic bottled spirits along with liqueurs and bitters.
The distillery’s attempts to build outside of on-premise were a different story. Despite persistent efforts to bring its message of simplified mixology to home users through a variety of mediums, Greenbar couldn’t make it work until it settled on an even simpler concept: just put the cocktail in a can. For the first year of its launch in 2019, the company’s line of 12 oz. session cocktails — City Gin + Tonic (8% ABV), Coastal Rum + Cola (7% ABV) and Single Malt Whiskey + Soda (7% ABV) — represented around 20% of its total volume. This year, fueled by a 384% sales increase in 2020, the now-expanded family of RTDs is expected to be above 80%.
Greenbar isn’t the only brand to see such a spike; according to a report by market research group WGSN, RTD cocktail sales “accelerated” during the pandemic, helping global consumption to rise 43% in 2020. Yet Khosrovian sees current trends as the continuation of a “dream” from long earlier.
“In so many ways, this is the fulfillment of the cocktail dream that a bunch of bartenders had 20 years ago,” he said. “If you look back — New York, San Francisco, LA, that whole cocktail renaissance in the early 2000s — I think if you extend the logic of having people be able to drink better, this is what it looks like. Since we learned cocktail making from those bartenders, we’ve taken that same approach to our drinks.”
That approach has influenced not only how Greenbar makes its drinks, but also how it has assembled its RTD portfolio to fit different occasions. Along with the session cocktails, the company markets a three SKU-line of sparkling cocktail spritzes in 12 oz. cans, each at 6% ABV. But it is also aiming to use its bartender-first approach to break into RTD categories on the other side of the alcohol divide: the aforementioned bitters and soda line, sold in Orange, Lavender and the soon-to-be-released Earl Grey, represent one piece of that strategy.
More ambitious is its forthcoming line of non-alcoholic cocktails in 12 oz. cans, starting with UnGin + Tonic and UnRum + Cola. For the former, Khosrovian explained, Greenbar boils off the alcohol in real gin; for the latter, it ferments molasses and distills it as it would a rum. Both processes are intended to capture the true source flavor; or, as Khosrovian put it, “These are actually how a distiller would make non-alcoholic drinks.”
For distribution, Greenbar has looked to cultivate an association with food and dining by focusing on developing ties with grocery and specialty food retailers. The RTD products are currently sold in select liquor-licensed Whole Foods stores in 23 states, along with chains such as Safeway, Vons and Albertsons. A recent test program with Ralph’s, a division of Kroger, represents a step towards its goal of adding more national grocery outlets.
“We love working with supermarkets because it’s so much of who we are,” he said. “Our product makes a lot of sense to go with the whole eating and drinking experience, and we are expanding to non-alcoholic drinks because we see the public wants that experience of something interesting and complex, the way a distiller would put it together versus a soda company would put it together.”
Greenbar has also added fuel to its RTD ambitions behind the scenes. The move from a mobile canning unit to in-house manufacturing is projected to cut production costs by $1.29 per can at current volume, with ample room to grow beyond the 85,000 to 100,000 cases of RTD products the company expects to ship next year. To support that expansion, Greenbar has hired a national accounts salesperson as well as a programming and distribution manager to assist with in-store merchandising and promotions.
But as pandemic restrictions gradually ease, Khosrovian is most eager to get back to sampling Greenbar’s products, which he views as the ideal opportunity to highlight its distinct craftsmanship to both consumers and retail buyers within an increasingly crowded category.
“It becomes very easy to confuse the public with a fancy looking can, but is it any good? Probably not,” he said. “So many of these products are made by the same co-packers and have the same flavors from the same flavor houses, so they will all sort of taste the same. Unless the consumer can taste the product and taste the difference, we don’t think we can be really successful.”
Despite having to recalibrate his company around a new business model and consumer paradigm, Khosrovian is approaching RTDs as an opportunity to bring Greenbar closer to its founding principle of democratizing craft cocktail culture. As RTD spirits continue to proliferate, he’s adamant that the early authors of the trend — the bartenders, mixologists and distillers who helped ignite the explosion of interest around craft cocktails — have their say.
“From our point of view, to get the real dream of this category fulfilled, it has to be some nexus of craft distillers and bartenders,” he said. “These are the people who brought you the whole cocktail revolution. It wasn’t the giant liquor companies. As craft distillers, as bartenders, we can bring that to the public in an honest, transparent and authentic way.”