In the words of the Whispers and Sonny & Cher: “the beat goes on.” At least for BeatBox Beverages.
The wine-based hard fruit punch brand from Future Proof has shipped 900,000 cases (about 65,322 barrels) so far in 2022, on track to more than double its annual shipments for the third consecutive year.
BeatBox came into 2021 on a high, after doubling its business in 2020, co-founder and CEO Justin Fenchel told Brewbound. The company then exceeded its goal to double shipments again in 2021, increasing shipments +160% to 850,000 cases (about 61,693 barrels). Now it plans to do it once more, aided by new markets, “fine tuned” distribution, and increased demand.
In the last 18 months, BeatBox has expanded distribution into numerous states, including all six New England states (Massachusetts, Rhode Island, Connecticut, New Hampshire, Vermont and Maine). This month, it will also launch in liquor stores in New York, marking the company’s 47th state.
BeatBox has also restructured some of its distribution partnerships, transitioning from the Reyes Beer Division to Anheuser-Busch InBev’s (A-B) network in California in August 2021. Due to these changes, sales have increased +1,200% in the state year-over-year (YOY), and last month, California was the company’s top state in sales, surpassing BeatBox’s home state of Texas for the first time.
In June, BeatBox also relaunched with the A-B network in Washington and Oregon. Next month, the company will begin distributing internationally for the first time, crossing the Canadian border into British Columbia.
In the past year, BeatBox has more than doubled its retail accounts, with about 35,000 accounts buying in the last 90 days, compared to 18,000-19,000 this time last year, Fenchel said. The company has a goal of retaining 67,794 accounts buying per month, making it a $100 million business, and a top five ready-to-drink (RTD) offering in the U.S., according to its founders.
Beyond account expansion, another “big reason” for the company’s “over-delivery” this year is a 20%-25% increase in off-premise sales velocity YOY, Fenchel said. In the past few months, velocity has increased across BeatBox’s network from 4.5 cases per store per month, to 5.5 cases.
“[BeatBox has] gone insanely viral, to be frank,” Brad Schultz, BeatBox co-founder and CMO, told Brewbound. “We’ve had, in the last 90 days, almost 400,000 searches for the product nationwide. That’s people coming to the BeatBox Beverages website, typing in their zip code and looking locally for it.”
BeatBox dollar sales increased +90.5% YOY in the last four weeks (ending June 5), in multi-outlet and convenience channels, according to Schultz, citing IRI. The company’s growth far outpaces growth of the total RTD segment, which increased +20% YOY in the same period in IRI-tracked channels.
In the last 52 weeks, BeatBox’s dollar sales have increased +86% YOY, to more than $26.5 million. In the same period, four of the brand’s offerings ranked in the top 100 RTD SKUs by dollar sales: No. 44 Blue Razzberry (+86.9% YOY); No. 48 Fruit Punch (+73.7% YOY); No. 62 Tropical Punch (+69% YOY); and No. 71 Pink Lemonade (+22.5% YOY).
Packaged in 500ml resealable cartons at 11.1% ABV each, BeatBox hard punches thrive mainly in the convenience channel, Schultz said. In the last 52 weeks ending June 5, BeatBox ranked fourth in RTD dollar sales in the convenience channel, increasing +78.4% YOY with nearly $81.9 million in dollar sales. Beating out the brand in the period were BuzzBallz (+78.4% YOY with nearly $81.9 million in sales); E&J Gallo’s High Noon Sun Ships (+181.2%, $37.8 million); and Atomic Brand’s Monaco Cocktails (+19.4%, $34.3 million).
“And we’re still in only 10% of all the stores we can be in,” Aimy Steadman, co-founder and COO of Future Proof, told Brewbound. “We already have eight flavors, and most stores only have like two or three, so we really need to focus on that.”
“It’s no longer ‘Is there a product market fit? Do we have the right flavors? Do we have the right marketing mix?’” Fenchel added. “Everything is there, it is merely, ‘How can we open up more accounts?’”
As a wine product, BeatBox also has the ability to ship direct-to-consumer (DTC) across the U.S. However, DTC is “nowhere near a focus of the company,” Schultz said. Instead, it’s used as a “Trojan horse into markets” where they have yet to establish a retail presence, such as Hawaii.
BeatBox launched in 2011, and gained widespread attention in 2014 when Fenchel, Schultz and Steadman appeared on the entrepreneur competition show “Shark Tank,” earning a $1 million investment from show host and billionaire Mark Cuban. The launch was long before RTDs had the exponential growth they are having now.
“I think we skated to where the puck was going two steps too early,” Fenchel said. “Now everybody’s catching up.”
As early adopters, BeatBox struggled at first to explain what a wine-based RTD was, and to spark communications between beer wholesalers and buyers at potential retail partners. The company found itself dealing with wine buyers at big retailers such as Walmart, Target and Publix, who were not accustomed to dealing with beer wholesalers.
“It’s a big part of the industry that needs to catch up,” Fenchel said. “Because these beer distributors are carrying more and more alternative products that don’t just get sold to the beer buyer.”
Fortunately for BeatBox, some retailers have begun to adapt to category convergence.
“Total Wine [has] an RTD buyer now,” Fenchel said. “Gopuff, a great partner of ours, they created a Hard and Spiked Division, because it’s no longer wine, beer and spirits: those categories have really come together. And I think there’s a lot more education, or a lot more willingness to listen by these big chains to brands talking about RTD, which there wasn’t three years ago [when] we even had to explain what RTD was.”
“The stores that show up, the early adopters of the BeatBoxes – the Circle Ks, the Quik Trips – they’re getting rewarded with insane velocities,” Schultz added. “And now this is a question of, can we get into more accounts to fulfill the demand?”
Despite increases in competition within the RTD segment, the company’s founders said BeatBox is still able to maintain and grow share by making sure to check three boxes for consumers: “Does it taste great, is it high in alcohol, and is it priced right?”
“Of course, the brand experiences will put you over the top,” Fenchel said. “But the cost of entry is those three things, and we’re always surprised by how some of the competition we see coming in from these large companies just misses the mark on at least two of the three of those metrics.”
“There’s been blue raspberries launched right next to ours, there’s been fruit punches launched next to ours, and we’re winning and growing,” Schultz added.
Through BeatBox’s growth, the company has avoided out of stocks, Steadman said. Additionally, the company has yet to take price, with no increases planned, while maintaining the ability to deliver “two and a half times the gross profit of domestic beer to [its] wholesalers,” on average, according to Fenchel.
“We’ve been able to be really consistent in terms of our operations,” Steadman said. “And so that’s really been helpful to a lot of our channel partners that have struggled with some other brands.”
BeatBox has also avoided focusing too heavily on innovation, so far only launching one new SKU in 2022: Juicy Mango, a new 11% ABV punch which launched across 20% of the company’s account base, and is now BeatBox’s No. 1 velocity SKU. The company also plans to launch an offering in an unnamed new category next spring, in which “the people that have tried to disrupt it” have been approaching it “the wrong way,” Fenchel said.
“If the wholesalers aren’t excited and the retailers aren’t excited, and it doesn’t matter what the consumer thinks,” Fenchel said. ”I think our wholesalers are very pleased that we’re not throwing more and more and more at them. They have enough as it is.
“The biggest challenge we face is share of mind with the wholesaler network,” he continued. “We’re still with these huge wholesalers that have dozens of priorities from the big companies that keep the lights on. So we fight that fight every day, but on a pound-per-pound basis, we’re out-kicking our coverage in share of mind.”
To support growth, BeatBox increased its staff from 30 employees in June 2021 to 70 in June 2022. By the end of this year, Fenchel expects that number to be around 100 people, with additions to its field marketing, chain sales and events teams.
BeatBox does a great deal of marketing through music festivals, with sponsorship presence at more than 15 in the next couple months, including Rolling Loud in Miami, Florida and Float Fest in Gonzales, Texas. At Electric Daisy Carnival (EDC) in Las Vegas this May, the company sold more than 8,000 cases of product, doubling the 4,000 cases it sold during the event in 2021.
“[Festivals are] not only a driver of sale, of revenue, but a mass explosion of awareness for us,” Fenchel said. “And it’s such an authentic way. We’re BeatBox Beverages, we built the brand because we love music, we love music festivals – the whole point of the brand is to bring people together and have fun, centered around music. We’re connecting so authentically, with so many people that are wanting to share that.”
The festival presence also fuels BeatBox’s large social media following, which has increased consumer demand. The company has more than 162,000 followers across Instagram, TikTok and Twitter, and 1.1 million likes on TikTok.
“We don’t expect every buyer to be on Instagram and looking through TikTok, but if you did, you would see this insane virality and passion and engagement,” Schultz said. “And that’s how this brand has been built. It’s been built on the word of mouth.
“We’ve always said of our consumers, it’s about your friend telling you this brand is cool, not necessarily a TV commercial [during] the Super Bowl,” he continued. “And it’s sometimes hard for us to tell that story through the traditional media world, where the decision makers make their choices.”