Non-Alcoholic Drinks: A New Opportunity

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Photography by: Video from Distill Ventures

Non-alcoholic is the new drinks category on the block and its emergence has inspired Distill Ventures, the Diageo-backed spirits accelerator which helps bring new brands to market.

They're interested in discovering exciting non-alcoholic options that slot into a sophisticated drinking environment, be that an elegant restaurant or an upscale bar. And so they're offering a one-off investment of £10,000 / $12,000 to drinks industry entrepreneurs with a new, non-alcoholic product or idea they'd like to explore.

The category can be said to have been created by Seedlip, the non-alcoholic spirit founded by Ben Branson. Distilled from ingredients including allspice, grapefruit, cardamom, cascarilla bark and American oak, it's a very adult alternative to the sugar-water and fruit juices Ben, who doesn't drink alcohol, found himself supping to be social. And, under two years after launch, it's already all over the UK, in more than 75 key US accounts and heading out across the globe.

For Distill Ventures, complex and interesting non-alcoholic drinks are a massive opportunity. "There's clearly a big trend among people who are more engaged in thinking about health and welfare in a holistic way," explains co-founder Frank Lampen. "Two elements of that impinge on traditional ways of drinking. The first is to have a varied repertoire of drinks that includes alcoholic and non-alcoholic, and the second is not defaulting to sugary drinks if you're not drinking alcohol."

For the consumer, be they pregnant, planning to drive, religious, allergic, enjoying Dry January, taking a week off, on a diet or just looking for a different type of flavour, there needs to be more to life than mineral water. And that's true for businesses as well. So bars, restaurants and hotels need to be selling their non-drinking customers something more expensive and more profitable than ye olde eau minerale or lime and soda.

"There's a big number of people who are choosing to manage their drinking," says Lampen. "When they're all out in a bar or a restaurant they're increasingly looking for experiences that are the same as the community that's drinking in a bar or restaurant: a well-made drink, with a good flavour profile, served in nice glassware, but it doesn't always have to involve alcohol. That's the core insight."

That's a sector of the market that Seedlip has catered to spectacularly well. Mixed with tonic, it creates a flavour profile way beyond tonic with a slice of lime; it has the bitter, botanical, adult edge that today's classically honed palates prize; and, of course, there's the artisanal, independent brand story that plays well across the globe. (Founder Ben Branson cut his teeth in innovation and advertising, particularly booze.)

Yet for now, even while titans like Britvic are throwing money at innovative botanical-led soft drinks, Seedlip stands alone. Distill Ventures would like to grow and nurture the non-alcoholic category and, seeing the number of bartenders who are designing boutique brands and creating their own in-house mixes in the bar, the industry is a natural place to turn. (The team are London and New York based but invest in brands around the world and hope to see applicants from across the globe.)

"One of the things we noticed is that a lot of the individual bartenders who are making interesting ingredients are just making them on a bar by bar basis," Lampen says. "Given this is an opportunity area which is only just emerging right now, we thought there might be some people out there who've got something they've tried making a few times, which is maybe not ready to pitch for investment, and who'd like some support to help develop their product."

Launching a new product does not come cheap - although costs vary widely depending on minimum quantities needed, whether ageing is required, raw ingredient prices, packaging costs, and the like. "We've seen people who've gone to launch with as little as £20,000 ($25,670) or £30,000 ($38,345)," says Lampen. "But if you're looking at production and going into market in a way where you can do a 6-month test, that's going to be £100,000 ($128,000) to £200,000 ($256,000)." So the investment won't bring products to launch, but hopefully will bring entrepreneurs to the stage where they're ready to seek investment.

Distill Ventures want to see products that help people who don't want to be drinking alcohol in a restaurant or bar - and give bartenders a tool to help craft non-alcoholic drinks with style and flavour. "Obviously bartenders have an embarrassment of riches when it comes to spirits from gin and vodka, to whisky and eaux-de-vie," says Lampen. "But the options they have available to make non-alcoholic drinks have traditionally been sugar-based or bitters. We want to give bartenders something to play with."

The team have a few ideas as to areas prospective brand owners might want to explore, although applicants need not be limited by these. "It could be using a process associated with alcohol, like fermentation or distillation, so there's some of that complexity there," says Lampen. "Another interesting area is having drinks that are served in a way that might deliver the mouthfeel or foamy head that you associate with alcohol."

Yet, at the heart of it, Distill Ventures want to discover how the theoretical product is going to help create a great bar or restaurant experience for someone who's not drinking alcohol - be that temporarily or permanently. "Basically, we're going to give you some money to tackle the big questions of setting up a brand," says Lampen. "You can go talk to some experts, meet manufacturers, chat to distillers and see what's possible, and we'll help you take it from there."

YOUR BRAND STARTS HERE

Submissions for the first round will close on 31st July.

To apply, please visit the Distill Ventures website. Your pitch should include: details about your proposed product, how your product will help create a great bar or restaurant experience for someone who's not drinking alcohol and how you would use the investment to develop your idea. You can also upload marketing material, branding or presentation decks to your submission.

Successful applicants will be contacted by 14th August.

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