There were several factors that made ready-to-drink (RTD) canned cocktail Fishers Island Lemonade an attractive acquisition target for E. & J. Gallo: premium positioning, high reorder rates, excellent taste and founder Bronya Shillo’s pioneering vision for canned cocktails. The New York-based brand agreed to be acquired by Spirit of Gallo, E. & J. Gallo’s spirits division, earlier this month.
Now Fishers Island joins other RTDs in Spirit of Gallo’s portfolio including leading spirits-based hard seltzer High Noon, media company Betches’ Faux Pas, and LIQS cocktails and shots. Spirit of Gallo was launched last year as a distinct brand to focus on the development of spirits and RTDs.
Fishers Island is named for the New York island where Shillo’s family owns the Pequot Inn; the product itself is a canned version of the inn’s popular signature cocktail. The 9% ABV drink contains vodka, whiskey, lemon and honey. Shillo had the idea to package it after seeing how frequently Pequot Inn bar staff had to replenish 15-liter batches on busy summer weekends during her stint as the bar’s manager.
That approach led to one of the “best crafted canned cocktails on the market by far,” according to Britt West, the senior vice president and general manager of Spirit of Gallo. Consumers overwhelmingly indicate taste as the first motivation to drink the cocktail, he added.
“I think that her [Shillo’s] experience as a bartender, as someone who really focused on wanting this to taste exactly like a cocktail that was made in a bar, is unique and I don’t think that’s the place that most people start from when they’re trying to make a canned cocktail,” he said.
Several bar veterans have staked a claim to RTDs, launching brands like Crafthouse Cocktails, LiveWire Drinks and Vervet. But Fishers Island debuted in 2014, after West ironically told Shillo ten years ago that the product was a bad idea. That was well before the RTD segment became as large as it is today. Off-premise sales of RTD cocktails reached $4.8 billion over 12 months through last August, according to NIQ, with spirits-based cocktails like Fishers Island growing dollar share by 55%, beating out malt-based seltzer’s decline and single-digit growth by flavored malt beverages.
Since cans of Fishers Island launched, Shillo has expanded the brand family to include Half and Half, Pink Flamingo and freeze pops, all of which clock in at 7% ABV. The brand launched two new flavors, Blueberry Wave and Nude Peach, as well as a new variety pack on May 16.
The brand’s 4-packs run a few dollars more than other full-spirit cocktails, but consumers have shown they’ll pay for it, said West. The higher ABV and premium price compliments High Noon’s positioning (4.5% ABV), although the brand’s draw was less about filling a gap.
“I look for things that truly connect and breakthrough with the consumer, and her reorder rates and her velocities in stores were very high,” he said. “If we were seeing within a defined universe of accounts, just that true traction and velocity — that’s the uniqueness of the brand.”
Fishers Island was also a fit because its regional traction could benefit from a distribution boost, according to West. The cans are available direct-to-consumer across the U.S., and sold via Drizly in Colorado, Connecticut, Delaware, Florida, Georgia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, South Carolina, Rhode Island, and Vermont.
“It seemed that we could be a good fit because what she needed a lot was distribution muscle, and the canned cocktail space is a game where you have to do volume,” he said.
Initial expansion will be conservative, however, as spring resets have passed and the category’s seasonality will slow distribution efforts heading into winter. For now, the company is focused on expanding distribution in existing markets. As it moves into new geographies, grocery will become the main target channel for growth.
Shillo will remain involved in guiding the brand and will serve as its official spokesperson, as will much of the original Fishers Island team going into summer, said West. The brand’s marketing will continue to take from Shillo’s playbook — heavy event activation and experiential opportunities in festivals, outdoor events and places that have traditionally been dominated by beer.
In addition to the wine and spirit company’s distribution prowess, much of High Noon’s success can be attributed to understanding its usage occasion, said West. The brand launched in 2019 and early in the pandemic partnered with Barstool Sports, a digital sports media platform with a social audience of 189 million. That audience of sport lovers synergized with a brand boasting “real” spirits and low ABV. But Fishers Island represents a different demographic, said West.
“You look at something like High Noon — low ABV, high sessionability — and Fisher’s with higher ABV making it therefore, to some degree, lower sessionability,” he said. “And so we will apply some discipline around usage occasions and what the opportunity is to carve out pathways for when the consumer wants a higher ABV product and when the consumer wants a lower ABV.”
After a few years of rapid growth and new products, West believes the RTD category is still in its early stages. Though Spirit of Gallo represents the fourth largest spirits supplier in the U.S., including brands like E&J Brandy and Tequila Komos, the company has not strategized canned cocktail offerings around distilled spirit brand extensions, save for New Amsterdam Vodka’s Wildcard, which launched last year. It’s too early to tell if the high awareness of big spirit names will transfer successfully in the long run to canned cocktails, said West. Brands like High Noon and Cutwater dominate as spirit-based RTD top sellers, although canned cocktails from Jose Cuervo and 1800 have also ranked in top-10 lists.
“My hypothesis would be that consumers actually don’t want one brand across everything that they drink, because ultimately, consumers believe that brands say something about themselves, like all brands do, and that they want different brands during different occasions to express something differently about themselves,” he said.