As consumers slowed down to spend more time at home as the pandemic spread in 2020, Drinkworks was pressing the accelerator on its expansion plans.
Established four years ago as a partnership between Anheuser-Busch and Keurig Dr Pepper, Drinkworks allows consumers to make alcoholic drinks at home in seconds. Similar to the way a Keurig brews coffee after inserting a pod, the do-it-yourself platform can make drinks such as an Old Fashioned, White Russian, Long Island Iced Tea or mojito in much the same way with the press of a button in fewer than 60 seconds.
Drinkworks was gradually being rolled out before COVID-19. But the growth in e-commerce — particularly in alcohol — the closure of restaurants and bars, and consumers' interest in creating in-home experiences provided a springboard to bring the platform to even more people, said Drinkworks President and CEO Nathaniel Davis.
Home usage, which makes up the lion's share of Drinkworks' consumer base, more than offset a sharp drop in sales to restaurants, hotels, VIP suites and other public establishments that were shuttered or experienced a sharp decline in business because of COVID-19.
"We saw a huge lift and a huge pull as people were seeking a version of an elevated at-home experience" with alcohol, said Davis. "We hit the gas on national expansion."
Drinkworks started 2020 in nearly two dozen states before fast-tracking its expansion nationally in the middle of the year. In the 12 months since the brand went national, total sales have doubled, according to Drinkworks. The company also sped up development of its second-generation Drinkworks machine released in October that is smaller and easier to use.
Consumers can purchase the pods on the brand's website and at more than 800 retailers across the U.S. The new machine used to make the drinks costs $300, with pods running at roughly $4 to $5 a drink. A 16-pod Drinkworks variety pack costs $75 while a four-pack of pods to create mojitos or old fashioned cocktails, for example, costs $18.
The company paid more attention to expanding its drinks portfolio to include more cocktails. Drinkworks, which typically offers up to 50 drinks for sale at any one time, put more emphasis on partnerships with spirit-based brands like Absolut vodka and Jack Daniel's Gentleman Jack whiskey to bulk up its offerings in that segment, Davis said. The platform now serves an estimated 250,000 cocktails a month.
Drinkworks targets consumers who typically like to entertain and enjoy making cocktails but are turned off by the complexity that comes with making them or the cache of ingredients like syrups, liquors, bitters and juices they need to purchase beforehand. Drinkworks provides consumers with a powerful purchase motivator since it solves a problem, the Davis said.
While Drinkworks has dabbled in beer through a test with AB InBev-owned Golden Road, the beverage and other RTD offerings do not provide most people with a compelling reason to purchase the machine if they can just as easily pour them from a can, Davis said.
"We're really focused on cocktails for a number of reasons. One is the huge runway. We've just getting going," he said. "I don't just want to pod something for the sake of putting it in a pod. I want to bring the experience."
He said Drinkworks could eventually decide to add beer, health tonics or even soft drinks to its portfolio, but said further expansion would most likely target beverages such as complex mixers or mocktails.
Davis, who has experience in the alcohol space as a brewmaster at Anheuser-Busch and bartender in London where he made many of the same drinks dispersed by his Drinkworks machine, said his prior experience provides him with a valuable lens through which to think about the consumer. Instead of spending his time mixing drinks, he's able to socialize with friends while letting them enjoy the experience of making their own drinks.
"I can sit there and mix drinks all night long," the self-described beer, wine, spirits and cocktails "nerd" said. "I see it more for the value that I get in the personal connections. I am unhooked from having to be bound from having to make drinks."