The adult non-alc industry was rocked in April when pioneering retailer Boisson shut its nine physical stores and filed for bankruptcy. Now, many non-alc (NA) brands are still asking questions about the closure, while others are finding opportunity in a growing landscape.
In early April, Boisson filed in the U.S. Bankruptcy Court for Central California for a reorganization of its operations under Chapter 11, subchapter 5 of the U.S. bankruptcy code, a type of bankruptcy that went into effect in 2020 designed to allow small business owners to reorganize debt and develop a plan to pay back creditors without ceasing operations.
To recap what led to bankruptcy: According to court documents, in 2023 the company generated a combined revenue of $10 million from its retail and e-commerce operations, alongside more than $1 million in wholesale revenue and an additional $175,000 from Boisson-owned brands. But Boisson was eventually unable to pay its debts when “faced with escalating operational costs, particularly from retail operations at its current nine traditional brick-and-mortar locations, and a competitive landscape that strained its financial reserves,” according to court documents.
At BevNET Live in June, founder Nicholas Bodkins, who doubles as chief brands operator, shared updates on the company’s future as the business shifts to an exclusively e-commerce and wholesale import and distribution operation. He also announced the rebound via LinkedIn with the help of a new financial partner. The company has also appointed new execs: Arie Gurevitch, former director of e-commerce for Southern Wine and Glazer’s national accounts, as CEO and Clyde “Tripp” Rea, as COO.
Meanwhile, some suppliers are grappling with supporting a partner that in many ways opened the first doors for them, while building back trust and lost revenue. The bankruptcy filing lists Boisson’s 20 largest unsecured claims, and the company’s largest creditors, including several NA brands such as French Bloom, The Pathfinder, Almave, Three Spirit Drinks, as well as NA retailer The Zero Proof.
Other suppliers are still waiting for word on the status of their product and payment, with amounts ranging in tens of thousands of dollars.
“I unfortunately have not heard anything from Boisson but they are still selling product of ours that they have yet to pay for on their website,” said Lily Geiger, founder of NA aperitivo Figlia.
Evan Quinn, co-founder and CEO of Hiyo, said he also hasn’t heard anything from the company, and “they still owe us a decent chunk of change.” He added that he wouldn’t work with them again until they paid off debts owed.
Others said they are in conversations with Bodkins. Under his new role, the founder has asserted on LinkedIn that he is focused on the “important process of overseeing payments to suppliers, continuing to help former employees who have been affected by this restructuring,” and “rebuilding relationships across the board and working to plot our path forward in a sustainable and responsible way.” He was restricted, due to the bankruptcy procedure, from commenting for this article.
Boisson filed a second amended plan of reorganization on July 17. A plan of reorganization is a contract between a debtor (Boisson) and its various stakeholders that once approved by the court replaces the debtors’ obligations existing prior to the bankruptcy filing date. Secured creditors, who typically in bankruptcy have the highest priority are first to be paid, will convert their debt into equity, with existing equity to be extinguished. Unsecured creditors, such as non-alc suppliers, are to be paid “as soon as practical” after approval of the plan the lesser of 10% of their claim and their pro rata share of $325,000. That comes to an estimated distribution of 7%.
Creditors are allowed to object to the plan, which may continue to be amended prior to a confirmation hearing scheduled for August 27. Assuming the plan is approved by the court and then goes into effect, Boisson will be free to move forward without further court oversight.
At BevNET Live in June, Bodkins told the crowd that the path forward to restructure as a wholesaler, importer and e-commerce operator was one of two options.
“I could let the company basically get sold for parts, or I could try to find a way through that is a way for us to pay suppliers and start to build those relationships back again,” he said.
As for the future, he added that the second wave of how non-alc begins to show up in retail is “going to be written” by other players, like Sèchey, and “hopefully, in our new second wave for ourselves, by us as well, to help retailers better understand that this category is an enigma.”
An Industry Moves Forward
But how Boisson’s commitment to build back relationships with suppliers will play out remains to be seen, especially as other channels pop up or gain relevancy.
Matt Milner, CEO and co-founder of Backbar Project and importer of liqueur brand Giffard, which released an alcohol-free version last year, said he was warned of the impending closure by some Boisson team members but was initially told the company couldn’t release any inventory. Backbar now has lawyers working to get that product, sold on consignment, back. Milner said he’s heartened by Boisson’s efforts to pay back suppliers, but “felt truly terrible” for the number of small businesses affected by the bankruptcy.
Milner questioned certain business decisions, such as investing in expensive real estate for retail stores and warehouses, but his complaints mainly stem from what he sees as the lack of transparency and sincere messaging from Boisson. The brand’s “reintroduction” post on Instagram was followed by numerous angry comments demanding more clarity and accountability.
“To that end, it’s going to be interesting to see who ends up working with them because they feel like they have to, and who refuses to just on a ‘why would we want to boost up a company that didn’t really care about its partners?’” Milner said.
The bankruptcy impact goes beyond suppliers to employees and contractors who weren’t paid for their work, and other retailers who have had to adjust.
“There was a ripple effect in Canada because of what happened with Boisson. Some of our suppliers shortened payment terms or removed them all together,” said Mike Norris, founder of Canadian NA e-commerce site, Designated Drinks, via LinkedIn.
In an email to BevNet, Norris said that the closure highlights the challenges many new businesses face, noting that “we’ve felt the impact on industry reputation and supplier terms.”
Milner is also concerned about the competition that may emerge for some independent NA brands as they regroup.
“By the time some brands hit reset and figure out distribution and what that means to them without Boisson, or in the interim while they lost distribution because of Boisson, I think a lot of the venues are not going to take the risk of running out of stock and are going to work with a larger brand from a larger distributor [instead],” he said.
On the other hand, Boisson’s stumbles may provide inroads for other NA focused companies to expand their services. Last week, InvestBev, a private equity firm in the adult beverage industry, announced a strategic investment in Sèchey, an NA brand, category curator, and marketplace. The collaboration is expected to “accelerate Sèchey’s market presence and drive further innovation in the non-alcoholic beverage space,” according to the press release. Sèchey has already helped the category build a footprint into major retailers by expanding its partnership with Target this year to curate an NA cocktail and wine set, after a pilot run that began in December.
Milner is also excited for other small-scale distributors that are popping up to fill the gap, such as Charlotte Beverage Distribution in North Carolina, founded by Casey Dolan who spearheaded Charlotte’s first NA mobile bar before moving into distribution.
“We’re excited to support someone that’s on the ground that we know is busting their butts,” Milner said. “And for every business like Casey’s that I do know, I hope there are ten more that I don’t know that are also taking this as an opportunity to get out there and build their own business around non-alc distribution, because it does represent a phenomenal opportunity.”