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The Spoon

Daily news and analysis about the food tech revolution

liquor

Bartesian, Maker Of Home Cocktail Robots, Raises “Seven Figure” Round From Beam

Bartesian, a cocktail robot startup, has received an additional round of funding from Beam Suntory, the company behind such brands as Jim Beam, Maker’s Mark and Knob Creek.

This is the second investment by Beam in Bartesian. The first came just over a year ago, and the latest round was a result of a contingency written into the first deal that allowed Beam to acquire more equity in the company.

Bartesian CEO Ryan Close told the Spoon that Beam “had a provision on the original investment that allowed them the option to invest x future dollars (7 figures). They liked what they have seen with regards to production ramp up, quality, and most importantly taste of the finished product – so they decided to execute that option.”

Bartesian’s system utilizes flavor capsules and chambers to hold the liquor and other mixers. The system mixes the spirits and mixers from the four chambers with flavors from the capsules to make a variety of cocktails. According to the company, the Bartesian capsules do not use powder, but instead a variety of real fruit juice concentrates and non-alcohol liqueurs.

It’s an interesting investment for a spirits company like Beam Suntory, one of the world’s largest spirits conglomerates. Beam hasn’t historically invested in technology startups, but a product like Bartesian could extend their reach into subscription services as well as give them a better understanding of what consumers are actually mixing at home. Perfect Company has shown that by extending the reach into the actual cocktail making opens up a treasure trove of data for spirits companies.

The company is expected to ship in 2018. Another home cocktail robot startup, Somabar, is also expecting to ship next year.

You can see Ryan Close talking about the growing use of technology for the home bar in a 2016 Smart Kitchen Summit session video below.

The Smart Bar: HomeBrew to BartenderBots from The Spoon on Vimeo.

You No Longer Have to Leave Home to Find a Drink. That’s Great News for Liquor Stores

Once an option reserved for the very lazy, ordering booze online and getting it delivered to your doorstep is now how many choose to stock their liquor cabinets.

For consumers, alcohol-delivery via an app is yet another convenience of our on-demand culture. It also widens the business opportunities in this industry considerably. Popular as the alcohol industry may be, the alcohol industry’s business model is one largely untouched since the end of Prohibition, especially in terms of technology. And when it comes to offering delivery services, the complexities involved usually outweigh any benefits of starting an ecommerce and/or operation.

Thanks to a bunch of apps, that’s changing.

Currently, Amazon is using Prime Now to experiment with delivery services in Ohio and Washington. Postmates has operations in California. And Saucey, who recently raised $5.4 million in Series A funding, is just one in a slew of startups now involved.

It works like this: the service processes the order and payment via its app. Some companies provide the actual drivers; others even handle licensing matters. All of them simplify the transaction process between consumer and retailer.

Why now? A number of factors provide the right backdrop for doing this kind of business:

  1. Consumers now demand choice as a right.

With brick-and-mortar liquor stores, consumer choice is at the mercy of those who stock the shelves. That’s fine if you live near BevMo. But many have to drive awhile to find selection, or rely on whatever the nearest store chooses or is able to stock.

Companies in the alcohol-delivery app space pretty much all tout brand selection as one of their benefits. Drizly does it especially well, offering local and rare brands as well as the mainstream ones, through thousands of retailers. In an age where most of us exit an app within seconds if we don’t see something we want, nothing sells like giving consumers choice to make them feel in control of the transaction. Drizly’s proof of that: the company is currently in over 70 U.S. markets and also moving its way through Canada.

  1. Millennials are of age, and they buy booze differently.

In the U.S. alone, there are over 75 million millennials, and all of them are now of age. That explains some of the growth in the alcohol sector.

But it’s not just that more of the population can legally order booze. Millennials, especially those on the younger end of the generation, have more or less grown up in this button-tapping, on-demand culture, and they expect to purchase most, if not all, of their goods this way. After all, if dinner arrives from Seamless and your movie is on Netflix, why wouldn’t you get the accompanying wine without ever having to leave the house?

  1. It’s a lower-risk way to do ecommerce.

With many alcohol-delivery services, the overhead is low and the risk much less than traditional hospitality businesses, especially for the retailers themselves.

Saucy handles everything from order processing and payments to couriers to scanning IDs upon delivery. Minibar, one of the bigger players on the market, doesn’t provide its own drivers, but it handles just about everything else. It will even deliver you a bartender, should you need one for your event. All the liquor store has to do is provide the booze and, occasionally, the drivers.

And, for both the liquor store and the service handling deliveries, this business doesn’t hang on the state of the economy. Alcohol-related industries may not be fully recession-proof, but they are generally “recession-resilient,” the 2008 recession being a prime example. If you want to dip even further back in history, part of the reason alcohol was legalized again in the 1930s was because many believed it would create jobs during the Great Depression.

  1. It’s an easy branding opportunity.

If you’ve gone anywhere near a marketing department in the last five years, you’ll know that everyone from Tesla to the local pet store is trying to figure out how to grow a brand using content. Beer, wine, and liquor brands are getting a boost here from many of the alcohol-delivery service apps, who offer users a kind of education about their drinks.

Thirstie, for example, has a slick blog full of features and interviews that sell a lifestyle as much as they sell vodka for the party. Liquor brands that partner with the company can do the same, without having to allocate budget towards their own content teams. Other apps include seasonal recipes, facts about making beer or spirits, and other information that educates customers and makes them more likely to return.

Sure, certain parts of the alcohol-delivery model are still complex, and no business is completely foolproof. Alcohol-related industries are heavily regulated, which means it takes more steps and organization to get a business off the ground in this area. Some states, like California, are pushing for more legislation around regulating alcohol-delivery services. In other states, it’s still illegal to ship any alcohol.

Solving those challenges should prove one of the more interesting moves these companies make over the next few years. Whether that’s through more apps or an entirely new process or technology remains to be seen. You can be sure of one thing, though. The ones who can offer selection, education, and convenience in one place will be the ones on constant demand, whether it’s to explore the latest tastes in whiskey or stock the house for that last-minute dinner party.

Can You Make Hooch At Home? Not Yet. Here’s The State Of Home Distilling in 2017

If you want to create your own booze, I have good news for you: With home distilling kits widely available online and an abundance of of information about how to make liquor through books and websites, it’s easier than ever to make hooch at home.

But there’s still one problem for all you aspiring Jasper Newton Daniels out there: It’s a federal crime to distill liquor at home for personal consumption.

Of course, it shouldn’t be that way. At a time when millions of people make their own beer and wine and the legalization of pot in many states has also opened the door for people to grow their own cannabis, the federal law against home distilling seems like an antiquated holdover from the prohibition era. While the authorities point to the fact that these regulations have been put in place to protect consumers – it can be dangerous after all to make liquor at home without the proper precautions – most home distilling enthusiasts believe the real reason both the state and federal governments haven’t changed the law is fear of what such a change would have on the billions of dollars in tax revenue liquor sales generate every year across the country.

One only needs to look at the continued growth in demand for craft beer to realize this is a ridiculous argument. Not only has the craft beer industry exploded since home brewing was legalized in 1978, home production has also served as a training ground for many creative entrepreneurs who have helped reshape the craft beer and broader beer industry as a whole.

There have been signs of hope on the legislation front. Two years ago, a bill was brought up in Congress (H.R.2903) sponsored by Minnesota Congressman Erik Paulsen that would have legalized home distilling of liquor for personal consumption.  The bill, which spawned a similar bill in the Senate (S.1562), was called the Craft Beverage Modernization and Tax Reform Act of 2015 and was focused in large part on streamlining and reducing taxation of the burgeoning craft distillery market. Nestled in that bill was also a stipulation that would have made home distillation legal at the federal level.

While seeing fairly strong bipartisan support, both the House and Senate bills never made it out of committee. However, both the bills have been resurrected this year with the same sponsors of both the House and Senate, but the problem is both curiously left out the provisions for legalization of home distilling. Given the strong anti-legalization posture around marijuana coming from Jeff Sessions’ Justice Department, one has to wonder if the backers of these bills predicted strong headwinds against the legalization of home distilling under the Trump administration.

All of this ignores the fact that there are hundreds of thousands of people that make their own spirits at home today. Home stills are legal to sell under the guise that people will make such concoctions as hop oils (which are legal), not spirits such as whiskey (currently illegal for home production). The reality is most people who buy home stills use them to make booze. The reason they can get away with it is local law enforcement have bigger fish to fry than chasing after home distillers (unless, of course, they sell their wares to others).

One possible route towards legalization in coming years could be at the state level. Missouri has already made it legal to make spirits at home, and given what we’ve seen in the cannabis world, there might be a movement towards doing so in spirits. There is also a push by home distilling interest groups to get language inserted in the current bills up for consideration to allow for home distillation, but so far there’s no sign that the sponsors of those bills will make any amendments.

Bottom line? If you want to make booze at home, you easily can, and soon there might even be innovation by some aspiring entrepreneurs to make doing so easier. Just make sure to tell anyone who asks that you’re making “essential oils”.