Bev-Alc marketplace Flaviar has acquired industry fulfillment service provider, Speakeasy Co., bolstering its B2B capabilities as it aims to become a multi-billion-dollar global bev-alc e-commerce player. Terms of the cash and stock deal were not disclosed.
Speakeasy’s team will continue to run its agency and fulfillment services, which will fold into Flaviar’s direct-to-consumer platform (Flaviar Checkout), furthering Flaviar’s trade offerings, including digital advertising network Flaviar Ads and data project Flaviar Insights. Speakeasy executives will join the Flaviar leadership team.
Founded in 2012, Flaviar has outlived some of its competitor bev-alc online marketplaces as it grows its consumer and trade facing business divisions. The company started out with a sample-size spirits subscription service and in 2016 upped its capabilities and bottle sizes with the acquisition of marketplace Caskers. Flaviar has been on an acquisitions spree in the past 24 months, scooping up Barcart (now Flaviar Checkout) and Wine-Searcher, as well as announcing a partnership with Shopify.
Meanwhile, Speakeasy Co., founded in 2015, has focused its proposition on “elevated” e-commerce fulfillment experiences for bev-alc brands through the company’s order fulfillment model and marketing services. The company started by focusing on helping craft spirits brands, but more recently has attracted larger clients such as Tesla’s bev-alc brands, WhistlePig, and Constellation Brands.
So what does the merger mean for Speakeasy’s 250 or so new partners?
“All of our partners will have access to more marketing opportunities, such as the opportunity to be featured in Flaviar’s tasting kits, listing opportunities in Flaviar’s marketplaces (Flaviar, Caskers, and Mash & Grape), access to Flaviar’s ad network through Flaviar Ads, and so much more,” a company spokesperson told BevNET.
Operationally, Speakeasy expects a decrease in overall shipping fees for its partners and access to a new network of retailers. The merger allows Flaviar to use Speakeasy’s U.S. warehouses on both coasts, giving brands a choice of route-to-market: fulfillment through Flaviar’s network of retailers (which act as local fulfillment centers) or through warehouses.
Flaviar, which has offices in the EU, U.K., U.S. and New Zealand, will now more than double its brand partners to 600. For brands, the merger “will mainly create new opportunities for unique products and experiences, everything from engraving and merch to single barrel fulfillment, custom packaging, and more,” through Flaviar’s consumer marketplace.
Flaviar co-founder and CEO Jugoslav Petkovic said the merger was a “big step in further cementing our leading position in global bev-alc e-commerce” and that the company is well on its way to “accomplish our goal of becoming a multi-billion dollar global bev-alc player.”
As on-premise bounces back, alongside a shift back to traditional brick-and-mortar purchasing, a more moderate expansion is reflected in forecast growth rates for U.S. online sales, with the IWSR predicting 7% growth between 2023 and 2027. Online spirits sellers continue to face both regulatory and market-related challenges: as customers are going back to their normal purchasing habits they are also becoming increasingly price-conscious, with special offers and lower prices now almost as important to them as fast delivery times, according to the IWSR. Delivery charges are also one of the most significant barriers preventing consumers from buying alcohol online. Other e-commerce platforms haven’t survived the shift in behavior as players consolidate.
Still, major companies across the bev-alc tiers are working to catch the industry up to other CPGs: one of the country’s largest distributors, Republic National Distributing Company (RNDC), which signed a strategic agreement with Flaviar this year, announced this month the launch of Republic Digital (REDI), a digital accelerator designed to connect brands with online customers.