Sometimes it’s better to be right than to be early.
Before the no/low alcohol category grew into a $11 billion business, Haus, a low-ABV Sonoma-based aperitif brand launched to much buzz in 2019. But amidst the rise of mindful drinking trends, Haus abruptly shut down last August after its lead Series A round investor dropped out during the closing process. Now, its story continues under new ownership by The Naked Market, a San Francisco-based CPG food and beverage platform with an eclectic portfolio.
Haus, founded by Helena Price Hambrecht and Woody Hambrecht, launched as a direct-to-consumer brand, taking advantage of its position as a wine-based, 15% ABV beverage which allowed it to circumvent the three-tier distribution system. Its chic branding and social media presence bolstered the brand’s popularity: according to the company it cleared eight figures in annual online revenue and had expanded into brick-and-mortar retail in 24 states before closing. Despite its initial success, the costs of expansion led the company to run out of cash at a key moment.
Under its new leadership, the brand will now relaunch with four of its best selling SKUs including Citrus Flower, Rose Rose, Pomegranate Rosemary, and Grapefruit Jalapeño. As part of the relaunch, Sonoma winemaker Micah Wirth has joined the team to continue leading winemaking and R&D efforts. Haus will continue its direct-to-consumer sales model through its website, and retail expansion is planned in the near future.
“It’s incredibly difficult to build an iconic brand in the food and beverage space, but Haus did so and in short order,” said Harrison Fugman, CEO and co-founder of The Naked Market. “Our goal in acquiring Haus is to bring an outstanding brand back to market and build off of the strong community it created, with an increased focus on unit economics.”
While Haus had been at the forefront of the low-ABV movement, what stood out to Fugman was the “power and depth of the brand,” and specifically, how the core pillars of the brand can translate to other categories in food and beverage. But the CEO remained tight lipped about what those other categories might be.
The company was acquired in an Assignment for the Benefit of Creditors (ABC) process, an alternative to filing for bankruptcy in which the brand’s assets are transferred to a third-party trust that will then initiate an expedited sales process. Through an ABC, Haus’s executive team had no control over the sales process, instead the trust focused on selling the brand to the highest bidder in order to ensure a maximum return for the creditors.
“While we had no plans on our roadmap to enter the alcohol industry, [but] when the opportunity arose to take over a brand as strong as Haus, we quickly put the process in play to get a deal done,” said Alex Kost, The Naked Market’s COO and co-founder.
Haus will now join a diverse portfolio including ready-to-drink protein breakfast drink, Project Breakfast; crispy rotisserie chicken chips Flock; and Jonas Brother-backed Rob’s Backstage Popcorn.
Originally launched in 2019 by Fugman, Kost, and Tim Marbach, the better-for-you focused CPG platform has touted its data-driven technology – which gathers millions of data points from places like Shopify, direct customer feedback, Amazon, retail point of sale and search engine trends – to unearth category opportunities that can be pursued quickly. The company raised $27.5 million in a series A round led by Hong Kong-based Integrated Capital in 2021 to continue expanding its offerings through in-house brand incubation and acquisitions.
The new buyers are now focused on upholding the quality standards of the hero Haus SKUs and overall brand experience, while improving the cost structure of Haus. That focus means optimized fulfillment and logistics, having more of an emphasis on ROI-driven marketing campaigns, and optimizing supplier pricing and relationships.
“One of the benefits of integrating Haus into The Naked Market is that we already have the backend infrastructure in place to efficiently streamline marketing, operations and logistics to run a more optimized P&L,” Fugman said.
The Naked Market also plans to award 5% of the company back to previous Haus employees, founders, and investors that choose to opt-in through a phantom unit plan. At its height in 2021, Haus had 30 full time employees.
While it’s been off the market for less than a year, the brand is now reentering a fast-moving no/low category that’s since attracted the eye of major conglomerates and investors— although much activity has been focused on zero-proof products. Haus has also been credited with inspiring similar companies, such as a crop of new regional low-ABV aperitifs and amaro brands that have been using moderation trends to find a niche. No- and low-alcohol is projected to grow 7% in volume over the next four years, according to IWSR.
Just last month Stoli Group joined other global spirit companies who have brought no/low alcohol brands into their portfolios with its purchase of Hemp-Based Pathfinder. Constellation Brands also acquired a minority stake in TÖST, an alcohol-free sparkling beverage brand, last month as well.
Sources close to Haus said the departed investor last year was Constellation Brands, which had committed approximately $10 million to the round. However, Haus had run out of operating cash as the deal was closing and Constellation was unable to provide an advance on funding in order to keep the company running. Constellation has not responded to a request for comment.