The beer distributor route-to-market has served fourth category brands like BeatBox and Stateside Vodka’s Surfside hard tea and lemonade better than wine and spirits distributors, but getting in front of the right buyers in the fast-changing category is still “messy,” Stateside CEO Clement Pappas shared during the 2023 Brewbound Live business conference in Marina del Rey, California.
“Whatever guerrilla warfare we can do to get product in front of them, we’re doing,” he said.
Pappas shared the stage to discuss trends and opportunities within the fourth category with Aimy Steadman, co-founder of BeatBox, which has maintained triple-digit growth in scans, and Merrilee Kick, founder of BuzzBallz, a top 10 spirits brand in off-premise retailers tracked by Circana.
Fueled by the higher case values of spirits-based RTDs, beer distributors have been better for the Surfside brand in most markets. One exception was the vodka distiller’s distributor in New Jersey, Fedway, which “turned their operations upside down” and dedicated full days of delivery just to Surfside, according to Pappas.
After finding that consumers were searching for BeatBox in convenience stores and “next to flavor,” BeatBox made the switch to beer distributors, according to Steadman. By being a “chameleon” in the convenience channel with products that can sit outside the cold box, in the wine fridge or sold as singles by the door or cash register, BeatBox has been able to “prove and earn” its way into the eye-level cold box slot.
BuzzBallz’s three different alcohol bases (wine, spirit, and recently added malt) has allowed the company more control as it navigates the tax rates and compliance laws of the 50 states and 27 countries where it has distribution, Kick said. To win wholesalers over, BuzzBallz focuses on turn rates on the shelf, but the brand still has a lot of runway to go in terms of ACV, Kick added.
“We’ve got a great position but our ACV is really low,” she said.
After working up from one or two SKUs, BeatBox is now focused on selling six flavors in as many stores as possible.
“It’s been a grind for many years to show both the retailers and the wholesaler partners that they can make a lot of money with us and that we have what we call, beer velocity with wine margins for all of our partners,” Steadman said.
Each founder has found different occasions to peel customers away from beer — or competitors like High Noon. The majority (90%) of BeatBox drinkers also purchase beer, but choose the wine-based party punch for partying at home or enjoying outside recreational activities, according to data pulled by the company.
Stateside’s low-ABV RTDs have gained traction on-premise at venues such as the Philadelphia Phillies’ stadium, Citizens Bank Park, where drinkers are shifting from light beer to the hard lemonade. Offering a premium hard lemonade trade-up and a non-carbonated option has been a differentiator as consumers experience seltzer fatigue, added Pappas.
BuzzBallz has always appealed to consumers seeking cocktails over beer, according to Kick, and for 13 years has kept consumers engaged by offering new releases and building on its unique packaging with its multiserve Biggies (1.75 L) released this year.
“Flavor is the most important thing any alcoholic beverage brand could give to their consumer,” said Kick.