Carbliss quenches consumer thirst for spirit-based canned cocktails
Juiced up!
Styling By Shalene Enz / Photographs by Shane Van Boxtel, Image Studios
Carbliss, co-founded by Adam and Amanda Kroener, has grown into an eight-figure business since it launched in 2019.
Somewhere in Fond du Lac, a woman has Carbliss tattooed on her arm.
It reads like brand lore, but Dan Werner, executive vice president of sales for the wine and spirits distributor Badger Liquor, saw it with his own eyes.
“I literally saw a woman who had Carbliss tattooed on her arm. You’re kidding me,” says Werner, who has been Carbliss’ distribution partner since it launched in September 2019. “I walked up and asked her, “Is this about the brand?’ She said, ‘Yes, this is the best thing and it’s all I drink.’ No joke.”
It takes a certain type of enthusiast to imprint a canned cocktail’s branding forever on her body, but Werner says that’s the kind of diehard fandom Carbliss creates.
“It’s one of the best brand stories of my career,” he says. “The feedback we get is like nothing we’ve ever seen before.”
Worth the squeeze
Adam and Amanda Kroener couldn’t have predicted that the vodka-based cocktails they began mixing in their kitchen would grow to an eight-figure business within its first three years.
The husband and wife team from Sheboygan County had been looking for a ketogenic-friendly alternative to sugary, carb-laden, malt-based beverages and flavorless hard seltzers. When they couldn’t find what they were jonesing for on the shelves, they made it themselves.
“We were on a keto diet and some strict versions would say that you shouldn’t drink alcohol, but we’re in Wisconsin and so we do our own version of keto here,” Amanda says. “We both tried [different seltzers] that had the nutrition panel we needed and were just not impressed with the flavor.”
Amanda’s background in finance (she is currently CFO for Van Horn Automotive in Sheboygan) and experience working with startups throughout her career came in particularly handy as she and Adam began writing a business plan for a spirit-based ready-to-drink (RTD) canned cocktail with zero sugar, zero carbs and only 100 calories.
Werner recalls at the beginning of 2019 when Adam approached Badger Liquor with the beta version of Carbliss in glass liter bottles.
“The RTD category was very young, in its infancy. There weren’t a lot of spirit-based RTDs at that time. We had nothing in that category except 1.75 [liter] ready-to-drink margaritas,” he says. “But what was intriguing to me was his drive and the urgency to be the best and put the best product on the shelves. You could tell by speaking to Adam that he was determined to make this something.”
Ready-to-drink beverages are exactly what they sound like — drinks that require no additional preparation or mixing prior to consumption. Simply crack open a can or twist the top and sip.
The RTD category has skyrocketed since the pandemic, as consumer behaviors have shifted to favor three key factors — convenience, wellness and premiumization. Adam says Carbliss hits all three of those global macro trends by being conveniently canned, zero-sugar and zero-carb, and made with a base of premium spirits and a premium flavor profile.
According to market research from NielsenIQ, RTD consumption has grown more than 104% in the past two years while all other alcoholic beverage segments have contracted in their percent of equivalent volume. While spirit-based RTDs like Carbliss are a small segment of the category, NielsenIQ reports they are growing the fastest at nearly 58% in 2022, versus hard seltzers that shrank by 10%. Sales of RTD products topped $10.7 billion in 2023.
The growth of Carbliss reflects these trend patterns. In its first year, Carbliss sold about 2,200 cases. By 2023, it topped 1.6 million. In 2024, Adam projects Carbliss will sell more than 3.4 million cases, the bulk of which will be sold May through August.
Fast growth and the Carbliss brand have become somewhat synonymous. The company has received both local and national recognition for its impressive scaling. Carbliss was ranked No. 1 on Inc. Magazine’s list of the Midwest’s fastest-growing private companies in 2024 with two-year revenue growth of 7,127% (yes, that’s a comma, not a decimal.) Not to mention, Carbliss secured the fifth spot in Insight’s 2023 Fastest Growing Companies Awards.
But scaling quickly comes with its own challenges, particularly cash constraints and inventory management.
“It is just having enough money to have enough inventory. Last year we doubled the amount of product in our sales forecast and we still ran out in June. We are now partnering with a national bank, which has allowed us to invest in a ton more inventory,” Adam says. “Cash is no longer a constraint at this point to keep rolling. We will not run out this year.”
‘Backyard to backyard’
Three years ago, Adam had memorized all of Carbliss’ accounts, which totaled about 300 at the time. Ask him where to buy Carbliss in Wisconsin and he could tell you everywhere to buy Carbliss in Wisconsin.
Today the company’s accounts have outsized Adam’s memory, a result of the brand’s “backyard-to-backyard” growth strategy, a method that has landed the brand in 12 states — Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin — with more in the works.
Carbliss’ Executive Vice President Mike Dempsey joined the company in 2021 as its second-ever employee. He brought with him more than 30 years of industry experience growing major brands, including Gallo Winery and Mike’s Hard Lemonade.
When Dempsey came on board, he was focused on growing Carbliss’ distributor network. He saw the need to focus on building brand awareness in a core market to better understand what the brand reacts favorably to in order to expand more effectively.
“We’re very fast-growing, but it’s done tactically and strategically,” he says.
Carbliss’ backyard-to-backyard growth strategy works like this: When Carbliss enters a new state, most of the time it’s bordering a state where the product is already distributed. They focus on opening three to 12 counties at a time until those are fully saturated. Adam says it can take anywhere from two weeks to two years to reach market saturation, but when they do, it creates a groundswell of word-of-mouth demand.
“For a startup, it’s patient, it’s methodical, but the payoff in the long term is pretty great. When we launched Minneapolis, 90% of the places I walked into said, ‘Holy shit, it’s about time you’re here,’” Adam says. “For a new brand that five years ago nobody had ever heard of because it didn’t exist, that’s hard to come by.”
Amanda says Dempsey helped them understand how to grow Carbliss’ distributor network and, importantly, select the right distributors for the product.
“There’s very few canned beverages that have the amount of on-premise exposure that we have — the amount of bars and restaurants that we’re in is a big differentiator,” she says. “Having a distributor that believes in that, and sometimes they have to see it before they believe it, but once they do, it’s incredible.”
For the remainder of 2024, Adam says the priority will be increasing distribution throughout Illinois, Missouri, Nebraska and Ohio.
Dempsey says so many beverage startups fail because they let ego drive their go-to-market strategies. For example, Carbliss is building out distribution throughout Illinois before launching in Chicago, which will be the last market they tackle later this year.
“Most folks rush to the primary markets and then they fail. But this is slow, methodical growth — east to west, distributor to distributor — all designed around the idea that this is a hard business. Launches are very hard, but we can make it easier on ourselves by already having some brand awareness as we go into these new markets,” Dempsey says. “In terms of proving the concept, that concept has proven to be successful for Carbliss.”
The little can that could
Carbliss partners with manufacturers in Wisconsin, Iowa and Ohio to produce their line of slim-can vodka cocktails in flavors like black raspberry (the most popular), pineapple, cranberry and peach. Last year Carbliss launched a classic cocktail collection containing a canned Moscow mule, paloma, strawberry margarita and mojito. They also offer a margarita variety pack in four flavors.
Carbliss works with a California-based flavor house to develop new flavors using fruit extract blends exclusive to the company.
“We sample items and tweak a few things, whether it’s mouthfeel, the way it smells, how the carbonation bounces on your tongue,” Adam says. “We get that finalized, we get a formula and then it’s still about a year-long process to get it to be a manufacturable product.”
As the ready-to-drink category expands, so does the competition — Dempsey says big wine, beer and spirits companies with deep pockets want to get a piece of the growing spirit-based RTD pie. Anheuser-Busch launched NÜTRL Vodka Seltzer and Gallo Winery introduced High Noon hard seltzer, for example. Standing up to the competition from major brands will be a challenge, but one Carbliss is proving it is ready to meet.
“In Wisconsin, we’re the number one spirit-based ready-to-drink — we outsell High Noon, we outsell Crown Royal, we outsell every other brand in our category,” Dempsey says. “We’ve got little Carbliss competing with the world’s biggest brands that have almost unlimited amounts of money. And for us to not only be competing with them, but beating them, is really incredible.”
Even with all of Carbliss’ success, Adam is most proud of the company’s culture, which he says is “not about ping-pong and pool tables,” but rather how his 45 employees feel showing up to work each day.
Creating an empowered, engaged workforce is accomplished by valuing each member as an individual as well as offering some unique perks, like an annual vacation stipend. The company gives every employee $5,000 annually to be used toward a week-long vacation. Adam says it doesn’t matter if it’s used for an all-inclusive trip for two or subsidizes a family Disney excursion, and it doesn’t count against the employee’s regular vacation time.
“Every company will tell you they care about you. Every company will tell you to take your vacation,” he says. “But how many companies put their money where their mouth is? Pretty much none.”
Dempsey says Carbliss’ recipe for success has been based on hiring (and appreciating) the right team members, a sound strategy based on category growth, a competitive distributor network balanced with hard work, grit and determination.
“It’s amazing what this small group of people can do in the face of competition from the biggest companies in the world,” Dempsey says. “At the end of the day, they are just great people who came together for a cause and they can do great things.”
Adam and Amanda Kroener may have ditched their Keto diet, but the business it inspired has become a lifestyle beyond their wildest expectations.
“What we’ve done with limited cash resources in this space and then becoming a national player in dollars in such a small geographical footprint in such a short period of time,” Adam says, “that amazes the shit out of me.”