Waterbird Spirits RTD Cocktails Take Flight

Wilson Craig has a founder’s story that should be familiar to many in the beverage space: Dissatisfied with the available options in a category, he set about creating his own product to fill the “blind spot” in the market — in this case, ready-to-drink spirits. While working in real estate finance in New York City, he and his friends noticed “their bodies starting to change” as calories and carbs from drinking light beer began to catch up to them. The answer? Waterbird Spirits, a line of premium ready-to-drink cocktails in 12 oz. cans.

Yet in speaking with Craig last month, it’s clear his vision for the brand has gotten much bigger. Fueled by a fast start in its home market, the Charlottesville, Virginia-based company has expanded its offerings from vodka to tequila-based drinks, and from three to 30 states, aligning itself with distributors such as Columbia (Pacific Northwest) and Gold Coast Beverage (Florida) along the way. The mission now isn’t just about filling a white space in the market, but inspiring a mass movement toward the cocktail-in-a-can concept.

“We aren’t just another brand,” he said. “We are going to completely redefine spirits as we know it, and the reason we do so is because the consumer demands it.”

Before the product could reach shelves, however, Wilson and Waterbird had to navigate an even more complex challenge: convincing Virginia legislators to change the state’s laws around the sale of alcohol, specifically to allow distilleries to produce low-alcohol, spirit-based beverages (under 7.5% ABV) and sell them to beer wholesalers, and to allow non-Alcohol Beverage Control (ABC) licensed retailers to sell them. Craig testified in front of the state Senate in support of a campaign to amend the law, which went into effect last July.

Soon after, Waterbird started production at its facility in downtown Charlottesville and signed its first distributor, Blue Ridge Beverage in Virginia. The brand has been off and running since. After launching with Moscow Mule and Vodka Soda & Lime, Waterbird added three more vodka-based items — Watermelon & Basil, Cucumber Mint and Citrus Squeeze — last summer, before moving into tequila-based offerings with Ranch Water and Tequila Margarita this year.

Those latest entries, alongside a vodka variety pack, are at the tip of the spear for Waterbird’s national expansion plans. The company entered Georgia (Savannah) and Tennessee (Lipman), both considered part of its home market along with Virginia, but this year its distribution push has already seen it sign with Columbia Distributors in California and Washington, Craft Beer Guild in New Hampshire and LDF in Kansas, with Florida (Gold Coast) set to go online in May.

Amid a rapidly expanding field of hard seltzers and other low-alcohol beer alternatives, Craig believes the quality of Waterbird’s ingredients and craftsmanship will distinguish the brand from its competition. For its tequila cocktails, the brand is distilling its tequila in Mexico (bottling occurs in Virginia), a process Craig said is more expensive and complex in its supply chain, and using real lime juice. Rather than developing complex recipes or edgy brand positioning, the company’s innovation strategy is governed by its consumers’ needs: see its most recent launch, a canned ranch water (tequila, sparkling water, and lime juice) at 5% ABV. While its focus is on RTDs, Waterbird has also brought the source spirits to market as standalone items.

In focusing on quality, Criag believes that Waterbird stands to benefit from its unique and premium positioning relative to the wave of malt-based RTDs that have come to market in recent years. According to data from market research group IWSR, spirits-based products represent around 5% of the total U.S. RTD spirits segment, while malt-based drinks account for 95% and are on-pace to surpass more than 300 million cases this year. As a side effect of COVID-related closures of bars and restaurants, RTD cocktails in particular have soared this past year, growing 86.8% year-over-year through August 8, 2020.

“What’s cool to see is the explosion within spirits, particularly in our target demographic [ages 25-55], people who want a high quality product but also want to know how they are going to feel after,” said Craig. “That’s a huge aspect of ready-to-drink spirits that goes overlooked sometimes.”

For Wilson, the company represents a homecoming of sorts. Born and raised in Charlottesville, he’s excited to play a role in boosting the city’s profile as a hub of food and beverage, alongside local companies Snowing in Space and Champion Brewing Co. (the latter’s founder, Hunter Smith, serves as a company advisor).

With capacity maxed out at the distillery’s manufacturing base in downtown Charlottesville, Waterbird signed with Lakeland, Florida-based co-packer Brewhub to produce more than 1 million cases per year, while projecting for more growth in the years ahead. Yet Wilson said the company — currently composed of around 10 full-time employees — has no plans to leave its headquarters in Virginia and will remain “lean and aggressive” in its approach, even as it targets big goals, including campaigning for change in federal laws around the standard of fill for distilled spirits, which would allow Waterbird to explore additional packaging sizes and formats.

“I think what’s really cool is to go into uncharted territory,” said Craig. “No one is doing on a national scale a really high quality tequila that’s made in Mexico, with real lime juice, and that’s what we are excited to do.”