Ready-to-drink canned cocktail maker Ohza has closed a $4 million funding round led by CircleUp Growth Partners. The financing is expected to help the brand scale nationwide as it partners with distributors such as Southern Glazer’s Wine & Spirits and Breakthru Beverage group.
What is Ohza?
Launched in 2019, Ohza is a Boston-based RTD cocktail maker specializing in champagne-based drinks such as mimosas and bellinis. The brand is currently available in roughly 2,500 stores in 42 states, with its footprint deepest in the Northeast through retailers such as Whole Foods, Wegmans, Hannaford, Market Basket, Shaw’s, Roche Bros. and Star Market, in addition to a slew of independent accounts.
Ohza’s product portfolio includes Classic Mimosa, Cranberry Mimosa, Mango Mimosa and Classic Bellini flavors. Each 12 oz. can checks in at 5% ABV and contains 130-140 calories, 30% juice. The products retail for $9.99 per 4-pack.
According to founder and CEO Ryan Ayotte, the brand is now working on growing its presence across the country, with a focus on states such as California, Florida, Arizona, Washington, Indiana and Georgia.
In January, Ohza brought on former Constellation Brands regional sales director Matt Giese as EVP of sales and beer industry vet Jeff Janisse as its director of national accounts. Ayotte said their combined experience in the beverage alcohol industry has helped to open doors for Ohza — including making connections to major distributors and national retail chains.
“Between the two of them they’ve each had over 20 years experience in either wine, spirits or beer and both have different skill sets,” Ayotte said. “So I think that brings a lot of value to the table when we are entering these markets and really feel like we know what we’re doing despite being a young brand.”
How will this financing advance the brand?
In addition to CircleUp, the round included funding from Branch Venture Group, Ruttenberg Gordon Investments, Riverside Ventures and individuals such as 10K Projects founder Elliot Grainge and existing investor Austin Rosen, founder of Electric Feel Management. CircleUp Growth Partners general partner Pat Robinson has also joined Ohza’s board of directors.
Ayotte said CircleUp will be able to support Ohza through access to market data and help guide the company on hiring and budget among other strategic decisions.
“[CircleUp will] really allow us to do what we do best, and that’s to create the brand, be scrappy and do things, and not try to dictate everything going on,” Ayotte said. “Same with everyone else, too. I think they’re all really great believers in what we’re building and it’s nice to have that support when you need it.”
In addition to expanding in retail, Ayotte said Ohza will also work to expand its direct-to-consumer online business and hire “proven” e-commerce brand builders. As well, some of the financing will go towards marketing and R&D initiatives, he added.
What does this mean for RTD alcohol investments?
The RTD cocktail category has emerged in recent years as consumers seek new and better-for-you alcohol innovations like hard seltzer and canned wine. With that, investors are beginning to pay more attention to the space.
Last year, 18 RTD alcoholic beverages (including seltzers, wines and cocktails) received institutional investment totaling $31 million, Thomas Sineau, manager of consumer retail at CB Insights, told BevNET. So far, 14 brands have received investments totaling $47 million to date in 2021, including Ohza, as well as companies like canned wine maker Bev ($14 million), Two Robbers Hard Seltzer ($6 million), sparkling tequila soda Onda ($5 million) and seltzer brand Mighty Swell. Sineau noted that CB Insights’ tally of investments only includes brands that publicly announced their financing or shared their data with the firm.
Sineau said the total number of deals in this year is on track to nearly double from 2020, but noted that the size and number of investments in the category is still relatively small compared to broader food and beverage financing activity. Many of these brands are early stage and thus require smaller investments, he said. While the rise of hard seltzer brands is now beginning to point investors in the direction of RTD cocktails, most of these investments went to seltzer brands with cocktails only beginning to receive attention.
Much of the growth in RTD cocktails today is coming from e-commerce sales, Sineau said. However, Ayotte believes for Ohza to grow the brand needs to build an omnichannel strategy both online and in brick-and-mortar to succeed.
Ayotte said he has already seen some grocery buyers overhaul beer coolers to make more room for RTD cocktail displays (notably Market Basket). Although Ayotte envisions a marketplace in which the category can eventually mirror craft beer — with dozens of highly differentiated brands all co-existing on shelf — he noted it is still difficult to secure cold box space in the bulk of stores.
“On one hand, because it’s such a new category and it’s sort of a cross-section of everything, it is a challenge,” Ayotte said. “It’s not as straightforward as ‘Oh, you have an IPA, every store you’re in it goes in the IPA section.’ But I think, over time, more and more people are of the conviction that canned cocktails are here to stay.”