BUST: No-Booze Retailers

Although the alcohol-free cocktail market is on the upswing (over $162B in revenue this year), MULO (multi-location) retailers devoted to booze-free beverages seem to be struggling.

Boisson was founded in Brooklyn in 2021 and expanded to Miami and Los Angeles. Although the company was planning on international expansion, it recently filed for Chapter 11 bankruptcy and closed all eight locations.

But one can’t assume that the category is dying. The data would indicate otherwise. Mocktails abound, and general retailers like Target, Whole Foods, and Walmart still stock their shelves with booze-free alternatives to liquor-based beverages.

Perhaps the lessons we can glean from Boisson’s financial troubles are:

• Just because a category is growing, that doesn’t mean that it can support dedicated brick-and-mortar stores. (I fondly remember David Letterman’s visit to Just Bulbs, where he grilled the salesperson about what else they sell beyond light bulbs.)
• Retailers who scale rapidly are often caught off-guard by the expenses required to sustain a complex operation. Boisson’s founder, Nicholas Bodkins, even posted on LinkedIn, “No one should consider this anything other than what it is: a failed venture-backed startup that grew too quickly, made mistakes, and wasn’t able to find capital fast enough to continue to build three businesses at the same time — bricks-and-mortar retail, e-commerce, and wholesale import/distribution — which in hindsight proved to be impossibly hard to execute.” Currently, the company will focus primarily on wholesale and e-commerce operations.
• Sometimes, concepts are just before their time. As booze-free beverages catch on, new retailers may emerge at a time when the market is ready to embrace the category.

The beverage industry is undergoing a massive transformation. In addition to the mocktail frenzy, we see a range of other new taste trends driven partly by health and wellness. For example, NIQ reports:

• A boom in functional beverages (e.g., drinks that contribute to energy or other mood- and health-related outcomes.
• Personalized options. Many beverage dispensers allow consumers to create their own flavors. Swig is an example of a MULO retailer jumping on the “make your own soda” bandwagon.
• Plant-based drinks (like non-dairy milk) are now available at many quick-serve restaurants, retailers, and groceries.
• Sustainability is prevalent throughout the food and retail worlds. From sourcing to packaging, manufacturers are introducing solutions that appeal to today’s eco-conscious consumers.
• Global tastes are impacting food and beverage in the U.S. Next time you visit your local grocer, pay special attention to the beer, tea, and soda brands imported from other regions.

Whether your drinking tastes lean to the “dry” or the “cold, wet, and refreshing,” today’s beverage industry is destined to evolve — with or without alcohol!