Challenge
The largest flavor house in the U.S. was looking to develop a beverage alcohol division of their business to put their work to the true test. Specializing in developing and manufacturing citrus flavors, organic flavors, beverage flavors, essential citrus oils, and many others across the food, beverage, and consumer space, they had the idea to take on the market themselves by controlling their supply chain.
Solution
Extensive category research and consumer segmentation work needed to be completed to give us an understanding of where to launch the brand. Originally, the hard seltzer category was targeted as the lemon juice provided the ability to compete in ABV but have lower calories than competitors. However, the hard seltzer category was beginning to soften and retailers/distributors were looking for solutions. The RTD challenge was finding margins in lower volume launches. Spirit-based RTD’s were the trend, but tax implications made profitability difficult without scale. We ended up building a brand platform with the flexibility to launch with both hard seltzers and RTD’s to test the market, with an added option to go the non-alcoholic route in the future once equity was built behind the brand. Aspirations to take the beverage market by storm drove the decision to test in key markets to understand adoption, and evolve the business from there.
Results
Structure and positioning helped shape the acquisition of Mighty Swell Hard Seltzer to position a better route-to-market approach for Lemoh.
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