Ready-to-pour cocktail DRNXMYTH has secured $3.7 million as it prepares to manufacture its innovative packaging in the U.S. and expand its retail footprint. The Series A round was led by an unnamed beverage venture firm, with Red Door Capital announcing an investment of $975,000 to close out the round on Tuesday.
Co-investments from other familiar names in the beverage alcohol space include Goat Rodeo Capital, a venture fund focused on beverage alcohol, non-alcoholic drink and premium snack brands, and 99 Proof, which includes canned wine Archer Roose and several craft distillers in its portfolio.
Launched in 2020, the California-based company has made its bottled cocktails among the most unique by using proprietary packaging and high quality ingredients. The unique bottle has delivered a solution to one of the RTD industry’s biggest challenges — offering the flavor of a freshly made cocktail — by keeping the spirit and a cold-pressed juice-based mixer separate until the time of consumption. Longtime friends Brandon Schwartz and Lawrence Cisneros worked with top bartenders during the height of the pandemic to develop cocktail flavors. Since then, the company has launched 25 cocktail expressions and sold more than half a million bottles.
The funds will primarily be used to bring production of the company’s patented packaging from China to the U.S. The decision to change production locations was made in mid-2022 when the company shifted its e-commerce focus to a regional distribution model, which is showing “incredible velocity numbers,” according to Cisneros. Production in the U.S. will ensure product availability, reduce COGS and create a profitable margin profile, preparing the company for national distribution in Q3 2023, he said.
By moving production stateside, capacity is estimated to reach seven million units a year and the company is expecting to shorten lead times. Bottling operations will continue in Los Angeles.
The company is planning to scale at regional and national chains, particularly through natural grocery, through a combination of beer wholesalers and wine and spirit wholesalers. Initial focus will be on California, Nevada, New York, Texas and Florida, and the products will make their debut at Whole Foods in Orange County, California, this month.
“Additionally, our success in the hospitality and on-premise channels in Los Angeles will continue to be a strong layer of revenue, as well as discovery and trial for consumers,” Cisneros said.
Since the pandemic fueled a wave of RTDs, more canned craft-like cocktails have emerged on the market, some also touting recipes from known mixologists. But DRNXMYTH has not only stood out for its packaging, but the lengths it has gone to build its supply chain, enabling the cocktails to offer top-notch ingredients such as cold-pressed juices, Cisneros told BevNet. The company’s facility is one of the few with the food safety certifications to handle fresh citrus and other ingredients, as well as the Alcohol and Tobacco Tax and Trade Bureau (TTB) and Alcohol Beverage Control certifications to bottle bulk spirits.
“We have never seen the combination of product and patented technologies create such a level of interest, it truly is a game changer in the ready-to-drink alcohol category,” said Richard Wolpow, managing director of Red Door Capital Partners, in a statement.
Red Door Capital Partners now has a board seat with the company, and will have ongoing involvement with the entire executive team across all operations, he added. Doehler Ventures, Spiral Sun Ventures, and Vamos Ventures are also investors.