Barrel Labs, the newly formed parent company of DTC customizable beverage brand ELIQS, announced Wednesday it has closed a $5.7 million seed round that will support its expansion into three business platforms intended to help it become a “customization platform for the entire beverage industry.”
The round was led by a group of CPG and tech focused firms including M13, Goat Rodeo Capital and Grishin Robotics. Additional investors included Gaingels, 75 & Sunny and Corp Capital.
According to co-founder and CEO Dave Goldman, Barrel Labs will now consist of three verticals: ELIQS, web3-integrated alcohol manufacturer barrelDAO, and brand incubator HouseOf. The funding will primarily support hiring and marketing efforts to expand the core ELIQS business nationwide and to help establish the new business units.
What is ELIQS?
Founded in 2019, ELIQS allows consumers and corporate customers to create their own can designs online that can be purchased in orders as small as 12 cans. The New York-based company provides a number of alcoholic and non-alcoholic beverage offerings, including craft beer, wine, hard seltzer, sparkling water and purified water. The startup has partnered with breweries Santa Monica Brew Works and SLO Brewing Company to produce the bulk of its alcoholic offerings, while the waters are sourced from Santa Monica Mountains Farmstead.
Goldman co-founded ELIQS with UCLA business school classmates Joseph Schwappach and Max Berg as a master’s thesis project and was inspired by a simple question: “Why can’t I put my face on a beer?” However, to create the company, Goldman said they needed to develop a unique print-on-demand manufacturing and small batch production process that allowed them to push label printing “as far down the supply chain as possible.” To launch as an e-commerce alcohol brand, ELIQS also needed to create a distribution and retail network that allowed it to ship direct-to-consumer.
The company has sold more than 200,000 cans in the last 12 months with consumers typically using the service to create original cans for gifts, weddings and other life events. Initially available exclusively in California, ELIQS expanded nationwide last month, Goldman said, and will put the new financing towards marketing to raise brand awareness. As well, he hopes to increase B2B sales, including brand and event partnerships.
While he acknowledged that the custom can design concept may seem like a novelty, Goldman said ELIQS has thrived by focusing on producing quality drinks on top of fun labels, which has led to repeat customers and brand loyalty. Now, he’s aiming to partner with other beverage brands to provide custom cans for familiar drinks on top of ELIQS’ flagship offerings.
“Today we have our own flagship beverages because we had to produce our own beverages just to kickstart the flywheel to build out the brand to get our initial customers in and to test out the different models of how this thing works,” Goldman said. “But we are already seeing loyal people who have written song lyrics about ELIQS, people love to post us on their social media, it’s a totally different level of engagement.”
What Are the New Businesses Being Launched?
Barrel Labs’ latest business units – web3 alcohol producer barrelDAO and brand incubation unit HouseOf – both build on the customizable beverage business the company has established with ELIQS, expanding on initiatives that had already begun prior to the restructuring.
BarrelDAO is a “community-governed web3 alcohol brand tied with on-chain e-commerce experiences” that will produce beverages for those in the web3 space. Launched earlier this year, the brand created its first collaboration product, a line of craft beers produced with NFT community Degenerate Ape Academy. Goldman intends for barrelDAO to produce products with a wide array of artists and online communities while leaving the length of partnerships – and whether the drinks are limited edition or permanent offerings – open ended.
“We think of [barrelDAO] more like a record label, where we have this ability to iterate a lot more,” he said. “It means that we can ‘sign’ an artist, we can ‘sign’ talents to our record label, and we can drop their first EP or we can release that first album. And that can end up being the start of the relationship or the end of the relationship, depending on how successful that first album release is.”
BarrelDAO was born out of Goldman’s personal interest in NFTs, however he said he waited almost a year to learn about the technology and feel out its long term potential before involving the interest in the space. The project aims to become a “global, crypto-native beverage brand” focused on beer, spirits and coffee, he added, and is currently in discussions with numerous NFT communities for upcoming partnerships.
Although the name would suggest it is a Decentralized Autonomous Organization – a business structure popular in the web3 space where communities decide business decisions through democratic voting – Goldman says barrelDAO is being run by the Barrel Labs leadership team until it can establish a community leadership model. Eventually, the company will release governance NFTs, which will grant holders a say in the business, but there isn’t a timeline for when that shift will take place.
“Decentralization for an organization is a goal – it’s not the starting point, it’s the ending point,” Goldman said. “So when you look at what we do for barrelDAO today, we act as a core contributing team. … It’s about building a mission and a vision and a community you get along with, and then we can all work together to get to that mission.”
The third vertical under Barrel Labs is HouseOf, an incubator that intends to work with existing brands, celebrities and entrepreneurs to develop new beverages. Since last year, ELIQS has offered brand incubation services and has developed a number of canned wine brands with influencers like Tana Mongeau (Dizzy), Daisy Marquez (Bare Wine) and Josh Campbell and Tim Chan (So Gay Rosé).
While celebrity brand development is one core pillar for HouseOf, Goldman said he wants the business to be open for anyone to use and will “go beyond” alcoholic drinks as well.
“There are a lot of opportunities to build out products with creators and with existing brands that have a very clear audience and a very clear brand positioning that allows us to test out formulations and test out new products that we really do feel can graduate into that retail distribution and go beyond a direct to consumer sale,” he said.