BeatBox, the wine-based party punch sold in tetra packs, doubled its volume last year, co-founder and CEO Justin Fenchel shared during a discussion at Beer Business Daily’s Beer Industry Summit.
“2022 was beyond all of our wild expectations,” he said. “We had huge expectations coming into the year and wanted to double the business again. We actually more than doubled to about 2 million cases shipped in 2022, up from about 800,000 in 2021.”
The company is now entering its fifth year distributing through beer wholesalers, which are better equipped to serve convenience stores than wine and spirits distributors. In its early days, BeatBox only worked with two beer wholesalers (in addition to wine and spirits wholesalers), and pulled in $2 million in revenue and employed 10 people.
Since then, the company has grown to $40 million in revenue, 100 employees and works with 250 beer distributors, Fenchel said. Forty of those employees were hired in the last six months, and the company plans to hire an additional 20-30 workers in the next six months. Volume is expected to reach 100,000 barrels in 2023.
At the retail level, BeatBox has increased velocity, thanks to its network, Fenchel said.
“We went from 4 to 4.5 cases per store per month to now 5.5, 6,” he said.
BeatBox pivoted its package format early on from large format to single-serve, which allowed the company to tap into the convenience channel, priming it for growth, co-founder and COO Aimy Steadman said.
“We started with the big five liter bag-in-box, and we were with the wine and spirits wholesale network originally,” she said. “Our consumer shops in convenience, so that was one of the early lessons that we didn’t know early on that we got.
“We switched to the single-serve, and then got our first taste of convenience in that dusty cold wine door with the land of misfit toys that are there,” Steadman continued. “Over time, that door became premium real estate in the store. We’ve got all kinds of RTDs in there, but we brought high velocity to that door because that door had a higher profit margin with those wine and spirits products. But they didn’t have that velocity, and that’s what BeatBox brought.”
In 2023, BeatBox will return to its bag-in-box roots with a 3L version in two flavor options (Fruit Punch and Blue Razzberry), as well as capitalize on the popularity of hard tea with a tea-flavored offering and introduce a pink lemonade collaboration with pop punk star Avril Lavigne, CMO Brad Schultz said. Each product is 11.1% ABV.
One thing that won’t be on the horizon for BeatBox is a price increase, Fenchel said.
“We feel we’re in the sweet spot because we’re $3.99,” he said. “Most convenience store channels can be two for $7 or in grocery three for $10. We don’t want to deviate from that so we haven’t taken any price. We’re not going to take any price. We’re in this hyper-growth mode where we’re continuously acquiring new customers, and we want to continue to do that.”
As consumers feel the crunch of inflation, many are beginning to calculate how many servings or how much alcohol they get with each package, as industry consultant Bump Williams pointed out in an earlier panel and dubbed it “stupid beer math.”
“We call it the ‘party math,’ so we try and make it a little more fun,” Fenchel said. “It’s basically what am I getting for what I’m spending?”
In October, BeatBox closed a $15 million investment round led by Concentric Equity Partners, a private equity investment firm based in Chicago, bringing its total raised to $30 million since its 2011 launch. The brand initially gained awareness after a successful pitch on ABC’s Shark Tank in 2014, which led to Mark Cuban investing $1 million for 33% equity in the company.