Growing up, Spencer Hoddeson said he mostly heard the term “gay” in a negative context. Now, he wants to destigmatize the word and create representation in spaces that traditionally don’t have LGBTQ-owned products, one Gay Water at a time.
The ready-to-drink vodka soda debuts at an auspicious time, coming on the heels of anti-trans legislation across the country, as well as a boycott of A-B’s Bud Light brand led by right wing influencers and political figureheads following a one-off influencer promotion with a transgender woman in early April.
As other major companies also reevaluate or retrench their LGBTQ+ inclusivity efforts— particularly regarding transgender people—many BevAlc companies continue to align, although perhaps more carefully, with LGBTQ+ events or campaigns, including major vodka brands during last month’s Pride activities.
Now Gay Water – named for a popular cocktail in queer bars – joins Supergay Spirits in the small cohort of spirit brands founded by an LGBTQ+ entrepreneurs that are proudly sharing their identity on the label. The two brands claim to differ from major companies that engage in “rainbow washing” – using branding attempts to attract LGBTQ+ dollars without making long-lasting commitment to queer causes. As some major brands stumble to please everyone, these brands have a clear target.
It’s a big one, too, and attractive to both the entrepreneurs and the big companies. The targeting of a demographic with growing social capital and financial clout is nothing new for BevAlc, and the purchasing power of LGBTQ+ people is expected to climb. World LGBTQ+ annual spending power currently stands at $3.9 trillion, according to research from activist investment group LGBT Capital. One in five Gen Z adults identify as LGBTQ+ — and that number is only expected to go up, according to a Gallup poll released last year. Younger consumers are also more prone to make purchasing decisions that promote sustainability, diversity, and align with their values on social issues.
Can A Hyper-Focus Win?
The fruit-flavored vodka sodas in Gay Water’s colorful 12 oz. cans isn’t what will differentiate it from the many RTDs on the shelf, and it’s not necessarily the point, according to its founder.
“We don’t just think of ourselves as a vodka RTD – our mission isn’t product-focused or beverage-focused, it’s community-focused,” Hoddeson said.
A queer influencer and former marketing and branding specialist at Yahoo and Verizon, Hoddeson said his eight years in entertainment and tech gave him exposure to companies who only supported LGBTQ+ communities during Pride month. By taking a colloquialism for a vodka soda, the founder aims to make “gay” a frequent word at restaurants, bars, liquor stores, or grocery stores year-round.
With its name and overtly sexualized taglines, the company seems to be focused even more specifically on younger gay men, said Joanna Schwartz, professor of marketing at Georgia College & State University, who teaches a class on LGBTQ+ marketing. As a niche product, the brand has potential to be successful, she said, as typically spiked seltzers aren’t as specifically focused on men, but Gay Water’s strategy is hyper-focused.
“It’s really over-the-top in terms of trying to own a very specific identity in the market,” she said. “It’s not going to be a big brand, it’s not meant to be, that doesn’t mean that it can’t be successful in its niche.”
Gay Water has just launched online in 35 states across the U.S. and on-the-ground in New York, New Jersey, and California. The company will be focused on New York on-premise first, reaching out to queer and queer-allied spaces including “bars, restaurants, liquor stores, national retailers, hospitality groups, festivals, or even LGBTQ+ employee resource groups at companies first,” said Hoddeson.
“We plan to focus on serving our community first and foremost,” he said.
Gay Water will face tough competition in its category: only one SKU in the top 20 RTD cocktail SKUs is not a vodka- or tequila-based vodka soda, and leading the pack are nationally distributed brands like High Noon and Cutwater, who also lead on-premise sales. At bars and restaurants, which represent a small percentage of RTD sales, the appeal of its branding will have to outweigh the need for a bar to bring in a canned version of a relatively cheap and easy drink to make (single-flavor 6-packs of Gay Water retail for $18.25). RTDs are mostly consumed at home (82% of occasions), according to NIQ data, with the next most popular occasion being someone else’s home. While many RTDs are targeting specific on-premise occasions where cocktailing is challenging, like golf games or flights, Gay Water is marketing demographic-first, although it’s clearly got novelty credibility as well.
Supergay, based in New York, has taken a different approach. Co-founder Tom Jackson, who previously worked in creative advertising with brands like Stella Artois, Cointreau, and Budweiser, also runs Gayletter, a publication chronicling queer art, culture and nightlife in New York City. In 2020, the two careers dovetailed into the vodka brand.
“The goal was to create a great unique and interesting spirit that brought a little bit more fun and joy to the craft spirit world, which can often take itself a little too seriously,” he said.
The founders spent a year developing the vodka recipe—a longer than average timespan for a typically quick-to-market spirit—in order to produce a premium product made from organic corn that matched the fun and eye-catching label.
“We wanted to exceed people’s expectations with the quality of it, because I believe that’s how you create long lasting relationships with your customers,” he said.
Its early ambassadors were industry veterans after the company sampled and self-distributed for a year. In 2021 it got distribution with craft distributor Skurnik in New York and Los Angeles, and since then has grown to 12 states. The brand is soon to add D.C. with Breakthru Beverage Group, its first national distributor. Sales have grown 100% in on-premise channels, and 50% off-premise since last year. Last month it landed a collaboration cocktail with 60 restaurants across three New York City-area airports.
Jackson has found that his audience is much larger than queer spaces, and instead includes younger and craft-seeking audiences. Many queer bars or nightclubs are using more affordable options for vodka, so it’s the independent and more innovative restaurants, specialty retailers, and hotels that have been champions of the brand. It’s not going after Tito’s top spot, but like other vodka brands, looking to appeal to drinkers as a premium, sustainable option in a stagnant category.
“It’s the tastemaker spirit, wine and liquor stores who want to have local products, want to have more sustainable products, and products that have a bit more of an authentic brand story and are led by founders that are doing things differently from a bigger brand,” he said.
So far any negative feedback on the name or anti-gay sentiment has been limited to an occasional comment on Instagram.
That lines up with expectations from GCSU’s Schwartz around Gay Water.
“There may be mainstream retailers who might feel that it would put off customers, but as a specialty seltzer with a small footprint it’s very much like other niche brand Pride products, such as craft beers, that remain in liquor stores now,” she said. “Nobody’s boycotting Bev Pride or Identity or House Wine, because those products live in an LGBTQ+ space.”
Authenticity Positioned
Despite some pullbacks, major liquor brands still target LGBTQ+ consumers. A glance at the sponsor page of The Dinah, an upcoming five-day event that bills itself as the largest queer, lesbian, non-binary event in the world, includes Bud Light, Tito’s and Jack Daniel’s Tennessee Apple, among others. But Absolut remains the mass alcohol brand that tries to market toward the LGBTQ+ market, said Schwartz.
“Absolut has a 40-plus year history of supporting the LGBTQ+ community – and no intention of stopping now,” said a spokesperson for the brand.
The company said that during Pride month – and all year long – they’ll be celebrating the power of allyship and supporting the bar and restaurant community, “the heart of their business” in their efforts to be “strong allies of the LGBTQ+ community every day of the year, so everyone can go out with no discrimination.”
This year’s Absolut Pride campaign, Out & Open, focused on uplifting LGBTQ+ bars, businesses and safe spaces and includes a $175,000 donation to the National LGBT Chamber of Commerce. Smirnoff also ran an inclusivity-focused campaign this June, although past global campaigns have included language more directly targeted at supporting the LGBTQ+ community with prominent members featured in campaigns. Smirnoff and Skyy, which have also sponsored Pride events in the past, declined to comment for this article. Overall, mentions of Pride during earnings and financial calls were down among U.S. companies this year.
Both Jackson and Hoddeson see an opportunity to differentiate from larger brands as LGBTQ-founded brands grounded in their communities, rather than trying to market to their communities (Supergay also donates a percentage of proceeds to LGBTQ+ organizations). That may strike a chord with younger drinkers, who are quick to see through performative activism.
“There are always opportunities to appeal to niche markets in ways that major brands can’t,” Schwartz said.