SipMARGS, a ready-to-drink (RTD) sparkling margarita brand has revamped its liquid and landed $3 million from new investors, including powerhouse social media influencer Alix Earle.
Launched in Spring 2021, the 12 oz canned cocktail line sports five flavors — Classic, Mango, Coconut, Mezcal, and Spicy — as low-sugar and low-calorie options with 5% ABV. The company raised $2 million in 2023 with plans to expand distribution, but has struggled to scale in a saturated RTD market, according to CEO Justin Nabozna.
“When we were evaluating the business this year, we asked, ‘how can we really take the company to that next level that gets you over that hump, or at least gets you to that growth mode?’” Nabozna said.
To fuel that next chapter, the company has turned to new investors: Palm Tree Crew is joining the company’s existing investor group, Speight Family Ventures. It’s not the first foray into RTDs by Palm Tree Crew – the entertainment, lifestyle, and hospitality company co-founded by producer Kygo and his manager Myles Shear has also backed a leading canned cocktail, the Finnish Long Drink.
Earle, who counts 7.3 million followers on TikTok and has been known to cause endorsed products to rapidly sell out (dubbed the Alix Earle effect), is now the company’s largest individual investor. The mega-influencer is “leaning in on the marketing and creative direction of the company,” Nabozna said.
The influencer announced via social media in February that despite previous offers, she struggled to find a bev-alc brand that was the right fit for. However, in the summer of 2024, she was approached by a brand that has “been around for a few years but never really took off.”
Followers will now start seeing Earle in SipMargs campaigns, and should expect her to “have her hands on how we appear on social media and those types of things,” added Nabozna.
The new investors are accompanied by a roster of backers including Michael Rubin, CEO of Fanatics; Aoki Labs; John Green, former executive chairman of Founders Brewing; venture capital firm the Anti Fund; PressOn Ventures; Brad Garlinghouse, CEO of Ripple; football player (and Earle’s boyfriend) Braxton Berrios; and musicians Blondish and Gryffin.
With fresh firepower, the SipMARGS team took a step back and surveyed its consumers on the brand’s liquid during retail activations and through social media. As a result, the RTDs are now lower in carbonation, more fruit-forward, with upgraded tequila. Packaging, as well as the SRP of $10.99 for a 4-pack and $18.99 for an 8-pack, remains the same.
Distributor Southern Glazer’s Wine & Spirits (SGWS) also plays a role in the RTD’s next move. In addition to rolling out the new product in current markets of Connecticut, New York, Massachusetts, Michigan, and Virginia, SipMargs will begin distribution in Florida this month before possibly expanding to New Jersey and Nevada via a national distribution deal. The new products will be available for pre-order starting Tuesday, and will launch online and in-stores on March 17.
The semi-relaunch comes as spirits-based RTDs continue to drive sales, up 26.5% in 2024, with juice cocktails (12%) and margaritas (10%) leading in share behind simple mixed drinks (40%), according to NIQ. Tequila-based RTD sales rose 17.7% last year, although an independent share-leader has yet to emerge in the subsegment beyond top RTDs High Noon and Cutwater, with Gallo-backed VMC next in line according to NIQ data in the 52-week period ending February 22.