In 2014, when BeatBox Beverages’ founding trio showed up on ABC’s Shark Tank with their original stereo-shaped bag-in-a-box party alcohol, Mark Cuban sensed a game-changing opportunity to cash in on.
A decade later after Cuban invested $1 million for a third of the company, one of the largest deals in Shark Tank’s history, BeatBox Beverages is now worth over $200 million in value, generating $100 million in sales last year, and is on track to double that revenue in 2024.
BeatBox’s original pitch was simple: when Justin Fenchel, Aimy Steadman, and Brad Schultz studied for MBAs at the University of Texas at Austin, they were tired of limited alcoholic options available at parties — it was either traditional beer, flavored malt-based beverages, or boxed red or white wine.
“The concept was merging these fun flavors and centering this brand around music because all three of us are obsessed with music festivals,” recalled Fenchel. Primarily targeting young partygoers, BeatBox started with blue ‘razzberry’ lemonade and cranberry limeade with an 11% ABV, and each five-liter box equivalent to 34 glasses of wine retailed for $25.
Shift To Single Serve & Beer Networks
In the early days, BeatBox operated out of an 800-square-foot facility in Austin, and self distributed as a winery prior to outsourcing its manufacturing through a third-party distributor partnership in 2014. But it wasn’t long before the team realized their retail price was expensive and pack size remained intimidating to most consumers.
“So we launched a more approachable single-serve trial size in 2017,” said Fenchel, which made BeatBox a trailblazer in adopting Tetra Pak for its ready-to-drink cocktail. These 500mL boxes that come in a variety of flavors, plus BeatBox’s shift to beer distributors from the previous wine and spirits networks, helped the company take off immediately — earlier reports showed their sales reached $2 million in 2018, and doubled to $4 million the following year.
The change in distribution strategy had its own merits, according to Zech Francis, the VP of global marketing at BeatBox: For one, wine and spirits networks predominantly cater to high-end restaurants and liquor stores; while beer distributors shine across c-stores, such as 7-Eleven, where BeatBox’s Tetra Pak hits a stride; additionally, BeatBox’s higher margin and velocity than traditional beer brands in turn helps these beer distributors grow their profit.
“After switching to the beer networks, we sold more cases in the first two months of 2018 than the entire year of 2017,” Francis mentioned. Together with other malt-based seltzers, including White Claw, Truly; spirits-based RTDs, notably High Noon and NÜTRL, BeatBox has evolved to become a driving force of what Nielsen called “the fourth alcohol wave.”
Commenting on BeatBox’s hockey stick growth, beverage consultant Taylor Foxman from The Industry Collective attributes to the company’s laser focus on “building what has become a true disruptor,” not only within the beer space, but across all wine, spirits without any signs of slowing down. BeatBox also onboarded Shaquille O’Neal recently to be its investor, upping its consumer-centric marketing through social media and celebrity partnerships.
Strategic Moves To Fuel Growth
With products available across 107,000 retail locations throughout all 50 U.S. states, BeatBox currently accounts for 22% of the RTD category growth, according to NIQ Scan data. The company sales are also increasing by an average of 129% each week in 2024, with only 3.9% household penetration.
The party punch icon plans to make strategic moves to supercharge its growth over the next five years, including hiring Celsius executive Toby David to be its new board of director; and Christine Perich, former CEO of New Belgium, to join its advisory board.
“We really admire what Toby has done to Celsius,” said Steadman, “so having somebody on the board, who has been an operator through explosive growth similar to what we’re experiencing, is super helpful.”
Additionally, BeatBox is diversifying its flavors to reach a wider audience, including a recently launched Orange Blast, and a single-serve Cherry Limeade slated to launch in January.
“We’ve reached strong profitability; we are looking to bring on a new strategic, like a family office, to help us [grow] during the next five years in the more mainstream market,” Fenchel said.
“BeatBox is just getting into the largest retailers, whether it’s Walmart, Target, or Publix, but we’re not in these places in a meaningful way yet. We’re having more fun than we’ve ever had since we started, and and we think the sky’s the limit with this brand.”