Former Anheuser-Busch InBev executive Felipe Szpigel is merging his high-end, ready-to-drink (RTD) canned cocktail brand Five Drinks Co. into a new beverage venture platform called Better Drinks, that will bring several Brazilian brands into the U.S.
Better Drinks came together when Szpigel, the CEO of Five, and Felipe Della Negra (formerly of A-B, Red Bull and Kraft Heinz) brought Five to Brazil and subsequently formed the emerging beverage group. The new group will fuse Five with four Brazilian brands, attempting to grow them simultaneously in Brazil and in the U.S.
Beyond Five, Better Drinks’ portfolio includes Bear-Mate, which offers carbonated drinks made with yerba mate, apples, and natural caffeine, and canned water Mamba. On the alcohol side are Rio de Janeiro’s Praya, a craft brewer that markets itself as a natural, no-additive beer, and Vivant, the leading canned wine brand in Brazil.
“It was a clear next step because the brands were ready and Five already had this strategic alignment and market opportunity, and now there are more brands that are hitting global trends,” Szpigel said.
Szpigel identified the new products as aligning with a convergence of consumer interests on a global level: premium beverages, healthier and low/no-alcohol drinks, and ingredient transparency and sustainability. According to market research firm IWSR, no-alcohol beverages that offer mood-enhancing benefits, premiumization in the RTD category, portfolios that offer a variety of products to fit different consumption occasions, and sustainability are all trends driving the industry in 2022.
Szpigel is betting on the global consumer, arguing that the categories and trends taking off in the U.S. will be mirrored in other countries, if they are not already.
“As we look into the growing categories and growing segments, we’re likely going to bet on similar categories and spirits in Brazil and the U.S.,” he said, adding that craft and imported beer in Brazil are stable categories, and canned wine is growing the most in wine.
Five is part of the first wave of spirit-based RTDs in Brazil, a segment Szpigel said is smaller than the U.S. but growing at a faster rate. Five’s canned cocktails, which feature minimalistic branding and less than five ingredients, entered into a fast-growing spirit-based RTD U.S. market in 2019. Spirit-based RTDs in the U.S. grew by 53% in 2021, according to IWSR and the RTD volume share is expected to double in the next five years in top global markets, including Brazil.
“When thinking about Five Drinks for us, the interesting thing is instead of waiting another decade for the market to develop in Brazil, we’re offering innovation pretty much at the same time in both markets,” said Szpigel.
Five’s 6.8 oz cans mirror craft cocktail sizes, and since launching have boasted collaborations with cocktail NYC bar, Dante. The company also announced it will be debuting two new flavors. For the Brazil launch last year, the cocktails were tropicalized to meet the palate expectations of consumers.
While the company did not say when distribution would start in the U.S. for the Brazilian brands, Szpigel confirmed that the emerging brands will first piggyback on Five’s top markets, California and Florida. In Brazil, the company will focus on executing placements for all five brands in major city accounts where they have a footprint.
Szpigel, who led A-B InBev’s craft and high end division for four years, is one of five co-founders in the Miami-headquartered canned cocktail company. Better Drinks comes after spending more time in his home country of Brazil during the pandemic.
All founders and original investors of the incorporated brands are partners in the business, and there will be no changes in production. Former investors ZX Ventures are no longer part of the new entity.
“I can say that we’re very thankful for the investment and the support early on, and I would imagine they’re also very happy with that investment and the returns that they’re having for their early investment,” Szpigel said.