Corporate Venture Capital in the Beverage Industry

The adult beverage sector remains a lucrative field, drawing numerous investors eager to back both established firms and startups as part of their strategic investment plans. The influence of consumer preferences is pivotal in deciding which companies secure funding, leading to significant changes in how venture capital is pursued. Let’s delve into what this evolution involves and who stands to be affected.

Venture Capital Investing in Beverage Startups

The adult beverage industry in the U.S. is lucrative, and many venture capitalists are testing out the waters by investing in businesses. Henry McNamara from Great Oaks Venture Capital illustrated the financial impact of the industry in a recent article by saying: “Wine in the U.S. alone is $35 billion annually, liquor is something like $46 billion annually, and the higher margins on alcohol make this a compelling market.”

The technology sector usually leads the investment landscape; nonetheless, with advancements in technology and shifting consumer preferences, bridging the gap has become essential. Americans spend $104 billion annually on alcohol for home consumption, yet fewer than 10% of these companies and brands maintain an active online presence. The beverage industry is still striving to establish a distinctive presence in the online market. Meanwhile, our European counterparts, unfazed by strict regulations, have made significant strides by integrating online liquor delivery services with their consumers. Although the U.S. adult beverage industry faces substantial regulatory barriers, some companies are making progress.

Minibar, a startup hailing from New York, is transforming the landscape of on-demand services for consumers. By offering immediate access to various services, including liquor delivery, Minibar is creatively addressing legal hurdles. Their collaboration with Booze Carriage enhances the efficiency of the search and delivery process, overcoming many of the logistical obstacles commonly encountered in the industry.

Growth in the Beverage Industry

A group of investors is seeking to challenge venture capitalists by exploring new opportunities. Corporations are also entering the investment arena, aiming to penetrate similar markets. The significant costs primarily impact early-stage deal growth. For instance, the non-alcoholic beverage company Bai Brands was acquired by Dr. Pepper Snapple for $1.7 billion after raising $38 million prior to the acquisition.

How are beverage brands getting money? There are a couple of different ways, but one is through crowdfunding. Many brands are getting their foot through the door by utilizing these online services to attract other investors. The popularity of the brand launched through the use of sites like CircleUp and CrowdCube proves to VCs that these companies are worth the investment. Don’t forget the impact of a well-established social media account. Beverages work well on a visual level for social-media-based marketing.

Who’s Investing in the Adult Beverage Industry?

Finding the capital needed to launch a successful beverage product can be possible when you work with a venture capital firm. Fortunately, there are a few to choose from that can help find success.

First Beverage

A successful firm based in Los Angeles, this company requires some information from its clients. It typically looks for businesses with revenue averaging between $1 and $10 million and showing robust and sustainable growth.

Winklevoss Capital

Winklevoss Capital collaborates with startups and mid-sized companies, offering not only financial support but also valuable guidance. While they actively seek out potential businesses, entrepreneurs can also pitch their ideas.

Sherbrooke Capital

Sherbrooke, with its established reputation dating back to 1999, focuses on investing in companies that already have products in their lineup. They typically seek out businesses with revenues ranging from $5 million to $25 million.

Great Oaks

Great Oaks is another Venture Capital firm eager to collaborate with startups. Established in 2005, it has already invested in over 200 companies. Its focus is on early-stage businesses, and it typically provides seed money ranging from $50,000 to $500,000.

Our team at Brindiamo has helped raise millions of dollars for entrepreneurs. We’re successful because we understand the challenges faced because we’ve been there, too.