Updated: Dec 8, 2022
Connecticut-based spirits portfolio company The CoreBev Group has acquired RTD cocktail brand The Cocktail Chemist in its first M&A deal, the company announced last week. Terms of the deal were not disclosed.
Founded in 2017 by CEO Stelios Stavrianos, CoreBev is a startup spirits producer that launched into the Northeast market with “ultra-premium” vodka brand Cylinder, which Stavrianos had been personally developing on his own since 2012. Since then, the company has added its own canned cocktail seltzer brand, Pasha’s, to its lineup and is preparing to launch a canned espresso martini brand called Moonlight Barista in the near future.
The Cocktail Chemist is also a Connecticut-based startup, founded in 2020 by veteran bartender Dimitrios Zahariadis, who is also the co-founder of the New Haven chapter of the United States Bartenders Guild. Made using premium ingredients, the craft spirit-based brand offers four flavors – Mojito, Espresso Martini, Vodka Soda with Cranberry, and an original lemon and vodka-based drink called “Something Good” – each with 10% ABV per 200mL can.
To date, the company has been limited to a local presence in Connecticut, with Zahariadis as its sole employee. According to Stavrianos, he and Zahariadis have been longtime friends and offered to acquire The Cocktail Chemist in order to tap CoreBev’s resources and scale the brand quickly.
“Dimitri was in the same place I was 10 years ago, where he was just getting started growing his brand and going from account to account,” Stavrianos said. “And I’m like, ‘Let’s get the big boys, let’s hit the restaurant groups, let’s hit One Hotel Group, let’s get The Cocktail Chemist all over the country.’ … So I realized Dimitri has fantastic products, an amazing reputation, but although he had the formula to success he was missing some key components that me and my team have spent years developing.”
Stavrianos said the brand is currently on track to sell 7,000 cases in 2022 and will launch at least two additional SKUs this year. As well, CoreBev is currently working on rebranding the line with in-house designer Alyssa Halton designing new labels.
While the RTD cocktail category is still emerging, the space has seen a sharp influx of new brands from both large companies and other startups fighting to carve out market share. Stavrianos, however, said he’s confident that The Cocktail Chemist can succeed based on its premium, high quality ingredients that adhere to professional bar standards.
The purchase comes one month after CoreBev closed a seed fundraising round, led by real estate investment firm HAVN Ventures, the first institutional raise for the company which had until now been financed via bootstrapping and an early friends and family round. Stavrianos said while he was initially unsure of partnering with an investment firm specializing in real estate, he said the relationship has been fruitful, noting that HAVN has strong relationships with the various restaurant and hospitality groups CoreBev is now targeting.
As well, HAVN has provided support for CoreBev as it seeks to expand into new markets this year, including Florida, Texas and California, helping it to establish sales and distribution models to handle cross country expansion. CoreBev’s products can currently be found in Connecticut, Massachusetts and New York.
“Every introduction that they’ve made, so far, has completely panned out in every way,” Stavrianos said. “HAVN’s strategy going forward is also going to be, now that they have this investment in in CoreBev, they will be thinking in a much different way when they’re doing investments because now they could focus more resources on, say, a restaurant investment, and kill two birds with one stone.”
Currently, CoreBev has six full time team members, including Stavrianos and Zahariadis, who will continue to run The Cocktail Chemist and also move into an expanded sales role. According to Stavrianos, the company is now looking to hire additional team members to support its growth and currently contracts out field sales and marketing.
The company is also beginning to expand internationally, with Cylinder now rolling out in Aruba, and has hired a full time brand ambassador in the Dutch territory to help grow the brand. He noted that with so much of Aruba’s alcohol sales coming from tourists, the expansion may also benefit sales back home as travelers discover Cylinder abroad and then purchase it locally later.
Looking ahead, as CoreBev hopes to establish itself as a national player, the company is also now looking into non-alcoholic offerings as well. In the coming months, CoreBev will launch its fifth brand, a mocktail line that will debut with a canned zero proof Mojito.
But although innovation is a key focus for the company, Stavrianos said that expansion into stronger markets with year-round warm weather will be the key to CoreBev’s long term success.
“Right now, our strategy is getting into non-cyclical markets, from a temperature standpoint,” he said. “Pasha’s is a cyclical item here in Connecticut because no one’s really drinking vodka lemonades in the dead of winter. So our immediate goal is getting into warm weather states and the states where Pasha’s can thrive and the states where The Cocktail Chemists can thrive.”