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Canned tequila-seltzer brand Onda just cracked open a fresh round of funding. The company secured $12.5 million, led by Aria Growth Partners, with 25Madison, Sweet Leaf Tea and Deep Eddy Vodka founder Clayton Christopher, and Revolve’s CEO Michael Mente and Chief Brand Officer Raissa Gerona also participating.
- Onda, which has raised $18.75 million to date, is partnering with Revolve to be its exclusive tequila seltzer, CEO and co-founder Noah Gray told Retail Brew, so expect to see the brand all over Insta—especially during NYFW this fall.
The brand was co-founded by Gray, COO Max Dworin, Chief Creative Officer Kelli Adams, and actress Shay Mitchell, who serves as chief brand officer, in the summer of 2020, when RTD (and on-the-go) cocktails rose in popularity. Onda offers a premium ($2.49 per can, or $19.99 per eight-pack), spirits-based alternative to malt liquor-based bevs like White Claw or Truly, Gray said.
“We were collectively really interested in this growth in a better-for-you drinking culture that combines high-quality, healthier ingredients in a really convenient package,” he said.
- Onda declined to disclose sales figures, but Gray said it’s seen “well over 100% YoY growth” in 2022 thus far.
- The RTD cocktail market saw $875 million in sales for the 52 weeks ending February 21, per IRI, up ~41% YoY.
Cocktail hour: Onda will use the $$ to grow its nearly 30-person team with a handful of sales hires, Gray said, plus start work on new product development for 2023. It’ll also double down on marketing, split between content creation—leveraging Mitchell’s 33.6 million Instagram followers and the Revolve partnership—and field marketing through in-store tastings and demos, an opportunity it didn’t have when it debuted during the pandemic’s peak.
“With early-stage companies like ours, while you’re still building national awareness, you really have the most opportunity to convert someone into a customer at point-of-purchase,” Gray said.
That’s the spirit: Onda achieved 700% distribution growth last year, according to the company, expanding to 10,000 retail locations including Publix, Walmart, Trader Joe’s, and Total Wine across 31 states.
- Its strongest markets are California, Florida, and Illinois, Gray said, and it hopes to go deeper into the Northeast and Texas this year.
Onda wants to make a stronger push, particularly in grocery, Gray said, but has some tricky regulations to navigate. Spirits-based RTD cocktails face different tax rates and varying state laws on grocery sales, which he admitted can be “awkward and clunky” for brands, buyers, and retailers. As popularity for this category grows, “you’ll probably see, further ahead, regulatory change catching up with where the consumer is,” Gray said.—EC