As a result, in 2021, Speakeasy Co. is projecting revenue growth of more than 400% compared to the reported $4 million in revenue it made in 2020 and over 2600% from 2019, according to the company.
“Industry leaders agree that the digital transformation was inevitable in the alcohol industry, it just took a pandemic to really ignite it,” said Michael Bowen, co-founder and COO of Speakeasy Co. “At first, it was a forced innovation to thrive, but over the past year, brands of all sizes have realized that ecommerce and building a community presents a long term differentiator to thrive.
According to IWSR (a company that provides data and analysis on the beverage alcohol market), in 2019 e-commerce represented just 1% of liquor store sales. However, the growth we are experiencing is quickly transforming the landscape, and by 2024, this is projected to grow over 700%.”
Chris Timmerman, co-founder and CEO of Dano’s Tequila and a Speakeasy client, said the brand has seen significant growth since joining the platform; sales have increased from $4,600 in Q2 2020 to $25,000 in Q1 2021.
“The Speakeasy Co. marketing team has helped Dano’s Tequila accomplish a rare feat: scaling our business using digital advertising, investing more and growing even more and continually gaining ROI as our sales volume grows quicker than our spend,” he said.
Speakeasy Co. is a technology company and e-commerce platform for the wine and spirits industry that ships beverage alcohol brands directly to consumers. This enables brands to sell directly to consumers from their respective websites without disrupting the three-tier system of alcohol distribution. The three-tier system for distributing alcoholic beverages was set up in the United States after the repeal of Prohibition. The three-tiers are: importers or producers, distributors and retailers.
Previously, brands only had the option to sell either in stores or on-premises, meaning restaurants and bars, said Josh Jacobs, co-founder and CEO of Speakeasy Co. But this isn’t enough real estate to engage consumers, he said, especially for newer, smaller brands. The only online outlet that existed before Speakeasy Co. is the traditional online retailer, where brands can’t control the look, feel, design and messaging, said Jacobs, nor have the ability to track purchases and/or consumer behavior and trends.
What Speakeasy Co. does is it integrates a shopping cart directly onto the brand’s website so that the owner can sell directly to consumers while controlling the user experience from end to end, said Jacobs. This allows for no other brands presence, competition or distractions, he said, and, most importantly, ownership of the customer data to continue scaling.
This is the reason for Speakeasy Co.’s rapid growth, said Jacobs.
“The speed and momentum Speakeasy Co. has generated over the past year is surreal,” he said. “We are humbled by the milestone and grateful for the support of so many throughout this journey, but this is just the beginning for Speakeasy Co. The team remains as committed as ever to our mission of providing partners with the solutions and services essential to scaling their businesses.”
Speakeasy Co. was bootstrapped until August 2020, when it sought strategic venture capital funding to fuel the growth of the company. It eventually partnered with Goat Rodeo Capital, a firm that focuses on early stage opportunities in the alcohol beverage space. Terms of the deal were undisclosed.
Moving forward, Bowen and Jacobs hope to continue on-boarding new partners and making investments across the business with the objective of continuing to create a better solution for its customers.
CO-FOUNDERS: Michael Bowen, Josh Jacobs
HEADQUARTERS: Little Italy
BUSINESS: Direct-to-consumer platform for beverages/alcohol
NOTABLE: Reached 250 brands just last month.