San Francisco, California
Alcohol-free canned cocktails
In 2018, Knight made a bold decision. Not only did he give up drinking alcohol entirely, but he also left a nearly two-decade career in the alcoholic beverage business to go out on his own and launch an alternative cocktail start-up.
"I worked in the wine and spirits business for 18 years for a large producer in California," Knight explains. "I even got a winemaking certificate from UC Davis. So, I had pretty good exposure to adult beverage from a variety of angles. But during that time, I was also a pretty heavy drinker. I drank every day for a solid 20 years. And getting closer to my 40s, I realized that alcohol just wasn't for me anymore."
With a mission to rethink beverages for adult social occasions, Knight began researching other options. He soon settled on the idea of distilling a spirit from tea.
"Throughout history, tea has been used as a replacement for alcohol," he says. "In Victorian times, they would have little tea bars that they would put up, and folks that weren't consuming alcohol could make tea. There is also a little bit of fanfare and ritual associated with making tea, and that kind of fits with the idea of a cocktail. It also has a bitter characteristic that's great for sipping."
Knight began "playing around" in his backyard and soon "landed on a very simple tea distillation, which I developed in a one-gallon pot still," he continues. "I technically can't call it a distilled spirit because there's a legal category for that. But it utilizes condensed hydrosol distillation to create spirits distilled from tea."
SPIRITY Cocktails currently works with co-packers to produce its tea distillate and mix and can its cocktails. The company offers four products -- Mindful Negroni, Mindful Apricot Sour, Mindful Margarita, and Mindful Mule -- to satisfy a variety of palates.
"Our margarita is about 40 percent of the business," Knight says. "And then there's the Moscow Mule. Both of those are two of the top five most commonly ordered cocktails in the U.S. The apricot sour, which was added about a year ago, was my mother's favorite cocktail when I was growing up. It's traditionally made with apricot brandy and sour mix. I decided to recreate it with real apricot juice in my spirits distilled from tea."
Though Knight has experimented with a variety of different teas, he's currently working on sourcing a tea from a plantation in India that is certified elephant friendly by the Wildlife Friendly Enterprise Network.
"Elephants often use tea plantations to navigate the forest," Knight explains. "They might go through and tear up irrigation systems or pumps or get into the fertilizers and pesticides that are used. That causes a lot of conflicts with the farmers. But this one plantation we're working with has made changes to their irrigation ditches. They've secured their fertilizers. And they've created lanes through which the elephants can travel without creating damage. They've done a very good job at helping to promote the coexistence of the elephants and the tea plantations. We're trying to secure sourcing and will hopefully be able to label our products as elephant friendly within the next year."
Challenges: Knight says both consumer and retailer education are challenges for the company. "It's a new category, so retailers don't really know what to do with it," he explains. "Should it go with the alcoholic beverages? Or should it go with the sodas? It's kind of confusing, so they're trying to figure out the best way to position this type of product."
Knight says that he hopes all the producers in the non-alcoholic canned cocktail category can work together to "make sure it doesn't go 50 different ways. We need to make sure the category is solidified and not fragmented."
Opportunities: To date, SPIRITY Cocktails have only been sold on the company's direct-to-consumer website and through Amazon. "We haven't done a single retail sale yet," Knight adds.
However, breaking into the brick-and-mortar retail market is top of mind for the company. "We're in the process of raising money with Seed Invest under a Reg CF and a Reg D crowdfunding campaign,” Knight says. "We're trying to raise the money that we think is going to be necessary for us to properly go into the retail channel. We're working towards a national drug retailer, and when that opens up, I think there's going to be some interesting things that happen."
The brand has sold 50,000 four-packs, or about 200,000 cans, of its cocktails over the past two years -- generating $630k in lifetime revenue since 2020.
"We need to have products on the shelf in front of consumers and be able to show our retail partners and investors that people will see the product and pull it off the shelf," Knight adds.
Needs: "It's always capital," Knight says. "Right now, 90 percent of my focus is on fundraising with Seed Invest to make sure we have the rocket fuel to make this thing work. This round of funding closes on September 23."