In two years, Loverboy has expanded distribution of its hard teas from four states to 44, partially initiated by retail partnerships with Total Wine and Kroger. To support the rapid expansion, the company is focused on “trying to grow into [its] own shoes” in 2023, founder and CEO Kyle Cooke told Brewbound.
“To some extent, we bit off more than we can chew when you look at our expansion effort, and the fact that we didn’t go out and raise a shit ton of venture capital,” Cooke said. “[2023], it’s really about growing into our shoes and executing on the foundation we’ve been building.”
The company plans to reach 47 states in the next few months, and – with the addition of its canned spritzes and wine-based ready-to-drink canned cocktails (RTDs) into the market – it is “on track to be a million case brand.”
“We’re less than 4% in distribution from an ACV [all commodity volume] perspective right now, so we still have just barely scratched the surface,” Cooke said. “2023 will be our first true year where we’re actually able to execute on a nationwide mandate from a national retailer.”
Loverboy announced nationwide expansion through Total Wine in August, followed by Kroger in September. The deals led to the company adding about 25 states to its distribution network this year, which is now made up of more than 170 distributors – up from five distributors two years ago. The deal with Total Wine was also the first national retailer deal for the sale of Loverboy’s entire product portfolio, including its spritzes and RTDs, which were previously only available through the Loverboy’s website with direct-to-consumer (DTC) shipping.
“We have way more distributors, quite frankly, than we can effectively manage right now,” Cooke said. “Thank God, they’ve been patient, but we’re just building out our capabilities at this point.”
Loverboy had unconventional beginnings – first seen by consumers and promoted through the Bravo reality television show Summer House, in which Cooke stars with his wife and Loverboy creative and branding director Amanda Batula, and VP of sales Carl Radke. The brand launched in 2018 with its hard teas, offering a “better for you” alternative to the existing segment.
With its launch, the company focused more on DTC. Now, as it has shifted its focus to filling out retail shelves with all its products, it’s adjusting its DTC model.
“We had committed to building out a network of beer wholesalers, and DTC with wine-based cocktails was an easy way to leapfrog that and give something to our kind of diehard fans that just wanted to try a Loverboy product,” Cooke said.
Although “most DTC businesses are unprofitable,” with startups using it as “a means to an end” to get traditional distribution, Cooke said Loverboy never spent money on marketing the channel, due to the products’ presence on the show and on social channels.
Now that the company has a national footprint, its DTC site will evolve to a “super diehard VIP” option with an eventual subscription service that can compete with retail prices. It will also serve as a testing platform for new products that won’t require “wholesale and retail buy-in.”
Loverboy Expanding Team to Support Expansion; Revisiting Partner Conversations
Loverboy is “about to turn on” distribution in Montana, Alaska and the Dakotas, while battling legal hurdles in West Virginia and Utah. With its rapid distribution growth, it has added team members quickly, growing from a seven person team a year ago to now around 20. Still, its team is “a fraction of the size of most up-and-coming brands that have mirrored national coverage,” Cooke said.
In 2023, the company plans to add several more team members, including market managers for the Southeast and Florida. The company also plans to focus efforts on “chain-heavy states” such as Florida, Texas and California, where Loverboy received full-state coverage this year.
Loverboy is also “revisiting” some of the conversations it’s had with possible future partners that can help “future proof” the company.
“The fact that we’re profitable kind of makes us a total outlier, not just in alcohol, but CPG,” Cooke said. “We continue to have very interesting conversations about people that do want to partner.
“If we’re gonna go down that road, it’s not about the money: We don’t need the money, we’re profitable, we don’t have a burn rate that we’re obsessing over,” he continued. “It’s really about how do we turn Loverboy into a household name? Can we do it independently? Or should we do it through growth equity partners? Or should we tap a strategic [partner] since this industry is so complicated? That’ll all be TBD.”
Branding ‘Gets Botox,’ Beginning with New Innovations: Variety 8-Pack and 19.2 oz Cans
Loverboy’s original branding was created “in a sprint” in 2018 in order to be featured on season three of Summer House.
“I knew if I had a shot at featuring this new startup of mine, and getting samples and cans in the hands of my friends on Summer House … I basically have to come up with a name of the brand, three formulas and get into sample cans in 10-12 weeks,” Cooke said. “Back then it was easy to stand out. It was a sea of 10 or so hard seltzers, all in white cans.”
Four years later, the rapid growth of the beyond beer category, the hard seltzer slowdown and the entrance of large beverage companies into beverage alcohol has forced Loverboy to step up its game.
“This year has been one of those transformational years for the fourth category,” Cooke said. “It’s not just small startups that have been innovating, you now have not just big beer and big alcohol, you have massive CPG conglomerates – like Pepsi and Coke – that have jumped in headfirst.
“Now you’re gonna need some real big pockets to push out what was really easy to push out a couple years ago,” he continued. “I’m excited by the consolidation and rationalization that’s going to have to happen because it was too easy to go raise a bunch of money [and] push out a product that, on its own, it’s just never going to have a chance of holding.”
To stand out on shelves, Loverboy is rolling out a brand refresh, with brighter colors and new packaging. The refresh launched this fall, debuting on the company’s first variety pack.
The variety 8-pack features four new 4.2% ABV hard tea flavors that “cover a spectrum” of consumers interests:
- Pineapple Hibiscus, the light, fruit- and tea-forward offering of the pack;
- Mango Pear, a flavor that attempts to end the perception of seasonality for hard teas with pear’s popularity in colder months;
- Half & Half, a “better-for-you,” flavor-forward hard tea offering that is a “direct shot at some of the big boy hard teas”;
- and Black Cherry Vanilla, which “borderlines hard soda” like cherry cola or Dr. Pepper, but with 80 calories.
The variety pack is “strictly about variety for brand new flavors,” rather than the “value packs” that populate beyond beer shelves, Cooke said. Drawing inspiration from High Noon Sun Sips (E. & J. Gallo), the company chose an 8-pack to maintain a “premium brand,” but avoid the $20+ price tag – a “threshold that not many people are willing to go” past.
Loverboy has also released its first 19.2 oz cans, beginning with three flavors: Half & Half, White Tea Peach (its No. 1 6-pack) and Strawberry Lemonade. The company plans to expand its convenience channel presence with the single-store offerings, directly targeting consumers looking for the flavor and convenience of existing hard tea products – such as Boston Beer’s Twisted Tea – but “without the guilt,” with each can checking in at or below 150 calories.
“That hard tea big player has got like 40% of the single-serve market in c-store,” Cooke said. “That’s insanity. So, it’s time things changed.”
Loverboy’s other hard tea offerings will debut refreshed packaging later in 2023, as the company ordered “a colossal amount of cans” during the aluminum can shortage that will take them “well into 2023” – the “nature of supply chain bullshit,” Cooke said.
Its canned spritzes have received a “slight tweak” to packaging with a now vertical and bigger logo, but still a “more elegant and upscale” design compared to the hard teas, “like something that people put on their bar cart or give someone in place of a cliche bottle of wine,” Cooke said.
Loverboy’s canned cocktails – Espresso Martini and Cosmopolitan – originally featured altered versions of the spritz packaging, but now have their own branding, and have been moved from slim to squatty 8.5 oz cans.
Editor’s note: Kyle Cooke will be a panelist next week during BevNet Live, Brewbound’s sibling publication’s annual business conference. Cooke will discuss ready-to-drink canned cocktail strategies. Follow the link for more information.