Like countless other beverage companies, XED (pronounced “crossed”) Beverages saw its growth plans for 2020 turned upside down with the outbreak of the COVID-19 pandemic last spring. Now — one year, one rebrand and one reformulation later — co-founders Zeke Bronfman and Nate Medow are looking to pick up from where they never got a chance to start.
XED’s debut product, a line of 6% ABV cocktail-based spiked seltzers called Sesh, is set to launch in February in four varieties: Gin & Tonic, Mojito, Moscow Mule and Paloma. Each SKU contains no sugar, 1 gram of carbohydrates and 120 calories per 12 oz. can. Sesh will carry a suggested retail price of $9.99-$11.99 per 6-pack and $16.99-$18.99 per 12-pack.
While roommates at Williams College in Massachusetts, Bronfman and Medow conceived Sesh as an adult beverage that could tick the boxes for low-carb, low-calorie and low-sugar callouts while offering a more robust and spirit-forward taste profile. That product was originally due to be released as XED in March initially in New Jersey, but after the pandemic began to spread in early spring, the co-founders set about retooling and refining the company from the top down.
“We went back to the drawing board and we improved every single aspect of this business,” he said. “I think we’ve used this time really, really well and we are excited to finally go to market. It has been a long wait.”
That work was mostly done with the liquid itself: Bronfman and Medow said they continued to workshop the drink even after the original formulations were set, creating a further 18 iterations of each SKU’s recipe in search of a “more nuanced, complex” flavor profile. The review process also saw a Vodka Soda flavor scrapped in favor of a Paloma.
Outside of the can, the company also reshaped its plans to launch initially in a section of New Jersey by expanding to include the entire state as well as New York, Illinois and Ohio.
Finally, Bronfman and Medow made two key hires in Jen Mauerman as CMO and Brian Sedra as COO, both of whom bring prior beverage experience in both alcohol and non-alcoholic drinks from their respective tenures at Anheuser-Busch InBev. The company has since hired a head of operations, procurement and logistics, and has looked to bring on employees with a background in wine and spirits to manage Sesh’s individual markets.
That past experience with AB has already proven particularly relevant for Sedra as he has leveraged his relationships within the industry to build partnerships for Sesh with beer houses SKI Beer (New York), Windy City Distributors (Illinois), Heidelberg Distributors (Ohio) and Fedway Associates (New Jersey). The product itself is being manufactured through a long-term contract with “one of the oldest brewing and manufacturing partners in America” based in one of the company’s key markets, according to Sedra.
At retail, the product will be sold at stores including Kroger, Total Wine, Binny’s and via delivery service goPuff.
“We are picking four very specific states for very specific reasons — it’s the way the shopper interacts with RTD (cocktails) and seltzers in those markets as it relates to a percentage of total alcohol sales,” he said.
In attempting to combine two distinct beverage alcohol types, Bronfman believes Sesh is poised to attract consumers from both hard seltzers — a rapidly commoditizing $4.14 billion category with limited premium options — and higher-calorie RTD cocktails, a market estimated to reach $1.2 billion this year.
As those categories grow individually, they are also beginning to blur: in May, Lone River Beverage Company released its RTD version of “Ranch Water,” a tequila-based sparkling cocktail popular in Texas, while startups like Two Days and Volley have sought to integrate vodka and tequila, respectively, into low-ABV sparkling beverages. As those options proliferate, Bronfman argued, consumers have leeway to choose products based on specific attributes — chiefly “low calorie, authentic flavor and affordable price point” — rather than seek compromises.
“Consumers are getting ready to trade up out of the standard spiked seltzers and into a more premium option,” he said. “On the cocktail side, consumers are loving those, but they are starting to wake up to the fact that they have (high) sugar and (high) calories, and they are trading out of those options. We fit right in the middle.”
Though Bronfman and Medow are just getting started in their careers, the two young entrepreneurs are backed by a cohort of notable industry players including former CBS chairman Strauss Zelnick and Adam Zoia, founder of digital recruiting firm GloCap, as well as Bronfman’s uncle and former CEO of Seagram, Edgar Bronfman, Jr. The pair declined to comment on the company’s financial backing.
While he praised board members for their support thus far, Bronfman noted that the “business is run by the people on this call.” Indeed, both he and Medow are set to relocate and join Sedra in Cincinnati in February to help get XED off and running. By the end of this year, the company expects to have launched two additional brands on the market.
“We believe in better-for-you and better tasting beverages across many different occasions,” Medow said. “We want to create multiple brands that connect with our audience across those values.”