How We Started A $68K/Month All-Natural Hard Seltzer Brand

$68,000
revenue/mo
4
Founders
5
Employees
product
Tolago
from Los Angeles, CA, USA
started December 2019
$68,000
revenue/mo
4
Founders
5
Employees
2.15M
alexa rank
118
followers
market size
$1.68T
avg revenue (monthly)
$36.3K
starting costs
$43.8K
gross margin
54%
time to build
12 months
average product price
$10
growth channels
Word of mouth
business model
E-Commerce
best tools
Instagram, Google Alerts, Dropbox
time investment
Full time
pros & cons
32 Pros & Cons
tips
8 Tips
Discover what tools Nick reccommends to grow your business!
Discover what books Nick reccommends to grow your business!
Start A Beverage Company

Hello! Who are you and what business did you start?

My name is Nicholas Greeninger. By title, I am the CEO of Tolago Hard Seltzer, but in spirit, we are a group of 34 like-minded artists, musicians, athletes, and creative entrepreneurs. Tolago is a California based, all-natural hard seltzer that reverberates with our values.

We sustainably source all of our fruit juices, purées, botanicals, and only use 100% organic agave from Mexico in the formulation of each flavor. Our four smooth, refreshing flavors are Agave Lime, Guava Mango, Ginger Pear, and Cherry Rose. Tolago is gluten-free; does not contain any artificial flavors or additives; and is 5% alcohol, with 100 calories per serving.

how-we-started-a-68k-month-all-natural-hard-seltzer-brand

Our overall goal was to create a better-for-you hard seltzer that we can proudly stand behind. We offer a delicious hard seltzer while adhering to our environmentally conscious values, from production to packaging to our annual commitment to 1% for the Planet.

Tolago is a pandemic baby! The decision to create Tolago became official in December 2019. By February 2020 we were in full process: conceptualizing the brand, developing formulations, securing licenses, and all the other backhouse needed to start an alcoholic beverage business. In March 2020 COVID hit, but there was no way we were stopping.

While COVID definitely threw us a lot of curveballs, we were so sure of our convictions that we pushed ahead. I am not going to lie: it was tough. We had to adjust and learn new ways of doing things every day.

By August we were canning; by September product was with our first wholesale distributor, and by October consumers could find Tolago on store shelves. We launched our website and social media that month, generating 250,000 profile views across our channels in the first week. We had more than 68,000 unique visitors to the Tolago website in the first four days and now average around 26,000 unique visitors monthly. As of December 2020, we have pulled in more than $220,000 in revenue.

how-we-started-a-68k-month-all-natural-hard-seltzer-brand

What's your backstory and how did you come up with the idea?

I received my Bachelor of Science in Integrated Marketing Communications & Business from San Diego State University-California State University, and while studying took an internship at Rip Curl, which changed my life. After graduation, I worked my way up the ranks at Rip Curl.

After that, I helped launch Saint Archer Brewing Company, while managing athletes. Saint Archer was a slow build – as many startup businesses are – but eventually, the business merited my full focus, and I became the Director of Marketing. In 2015, we sold Saint Archer to Miller Coors. After a year of consulting for several regional beverage brands, I was tapped by Future Proof to lead their marketing nationally. With an all-star team and distribution in 18 states, my time with BeatBox was an incredible experience. And then . . . it felt like the time was right to launch a better-for-you product rooted in California lifestyle, Tolago Hard Seltzer.

Pre-selling brand awareness is not common in the liquor industry. Rather, most brands wait to start promotion once their product is in stores and available for purchase. We chose our own, different path, which allowed us to come out of the gate with built-in consumer pull.

Leading the creation of a brand was something people in my circle had always pushed me to do. This time, I saw the right people coming together for something special. The white space was there, and the people around me saw the vision for the business as clearly as I did. We wanted to create a hard seltzer that was different from what was available and mainstream. Our mission was to create a hard seltzer made from real and organic ingredients. We were dead set against the chrome finish and chemical aftertaste which you find in most hard seltzers. Not Tolago.

As another point of difference, Tolago was created – and is being built – collectively. Our high profile owner advocates have invested their money in the business and have taken an ownership stake in the company. We all share a long-term, vested interest in the success of Tolago.

The third point of difference is our pricing strategy: we were a leader in driving a super-premium product and price into the hard seltzer category, and we are now seeing others align with that, which is great news for everyone. Ultimately, the success of any product lies in the hands of the customer. With Tolago, we aim to provide customers with the best hard seltzer money can buy. I know that those who buy Tolago find it well worth the extra few dollars.

The creation of Tolago represents the moment in my career when I was able to associate myself with the right people to create the right brand around a unique product. The group shares a common vision, and we see the opportunity in front of us. It was not a true “aha” moment; it was more of being in the right place, at the right time, and having the right people come together to see it through.

how-we-started-a-68k-month-all-natural-hard-seltzer-brand

Take us through the process of designing, prototyping, and manufacturing your first product.

The first step in the process was figuring out what product to make, which was pretty quick: we knew we wanted to make the first hard seltzer based on real fruit juice and organic agave nectar. My years spent working in the brewery paid off. I was able to communicate clearly with our production team to create the product exactly the way we wanted. A clean, crisp, refreshing hard seltzer made with real fruit juice and organic agave nectar – free of the chrome aftertaste – was the obvious way to elevate the hard seltzer category.

Our values were next. The founding group and beverage industry team grew up in California, and we drew inspiration from everything our home state has to offer. We all surf, skateboard, or snowboard, so have strong values tied to the environment and sustainability. We are aiming to set new industry standards for environmental awareness and social responsibility, so we weave this into everything from our packaging to our messaging.

We then had to figure out the look and feel of the brand, which also included naming it. Graphically, our co-founder and creative director Matt McCormick drew inspiration from the gritty reality of downtown LA, as well as the homestead towns, gold rush bonanzas, and 1920’s Hollywood glamour that captivate popular imagination. The name is inspired by the Spanish influence felt throughout California as well as my hometown of Capitola. The creative was, and is, as important as the juice. Getting the creative done was a major undertaking, a huge achievement, and truly set us on our path forward.

how-we-started-a-68k-month-all-natural-hard-seltzer-brand

Next, we started our flavor trials. We definitely did not want to work with a flavor house that pumps out “natural flavors,” derived in a lab. This is how most hard seltzers are flavored. Instead, we had to find a formulation specialist who shared our vision and was committed to procuring high-quality ingredients, sustainably. Once we found the right professional and agreed upon the flavors, we then had to clear the formulation, ingredients and processes with U.S. government agencies including the federal Alcohol and Tobacco Tax and Trade Bureau (abbreviated as TTB) and the alcoholic beverage control boards of states within which we planned to do business.

Once all of that had the go-ahead, we had to find a co-packer that would produce the alcohol to the standard we desired. Their organization had to be willing to adapt to and use our desired process, to yield the best product. We needed the base to be completely neutral, so the flavor of the real ingredients could shine through.

It was extremely rewarding to get a final, natural-tasting product we enjoyed. Only seven months after we started work, we were ready to go to production and push it live.

Describe the process of launching the business.

We took a unique approach to our October 2020 launch.

First, even before production was underway, we had aligned with a major wholesaler in California, Young’s Market (now RNDC), which gave us instant availability statewide. RNDC is one of the biggest wine and spirits distributors in the world, and we are their only hard seltzer, which is a key component to the “fast-paced mentality” we take in everything we do.

Also, before production was underway, we tapped into our owner advocates to launch Tolago. Pre-selling brand awareness is not common in the liquor industry. Rather, most brands wait to start promotion once their product is in stores and available for purchase. We chose our own, different path, which allowed us to come out of the gate with built-in consumer pull. For example, some members of our group have very strong social followings, so just sharing Tolago with their communities had a huge impact, especially as authenticity is everything these days. This push was a crucial success factor in shaping our early growth trajectory.

Another key focus of our launch was ensuring Tolago was available via delivery and eCommerce, as well as in traditional stores and restaurants. We have had amazing opportunities from the start for which I am very grateful.

For example, on the delivery side, from the start, we aligned ourselves with PinkDot, an iconic California retailer that was one of the first companies to deliver alcohol. They started this way back in 1987, and they do it all themselves. We had the wonderful opportunity to have Tolago sold in their eight retail locations, as well as featured on their website, and it is going great. We have also taken advantage of advertising through delivery channels such as PostMates and GrubHub, both of which are moving fast and shaping the future. In no time, getting products delivered will be the norm, and we are trying to get a head start.

Our principal e-commerce driver right now is Drizly: the day Tolago became available to consumers in October, we literally saw pent-up demand being released via this channel. This in turn helps the brick-and-mortar retailers, as the Drizly platform points to traditional retail for fulfillment. We started seeing stores selling 30 to 40 cases in just a few days, which led to more reorders. Our accounts continue to reorder; in fact, 42% of our accounts have reordered 3-6 times in the first 60 days, and we have to believe that this is a depressing figure as restaurant sales were almost nothing during this time period due to COVID. Amazon is up next!

Since launch, what has worked to attract and retain customers?

Our first focus was to create an easy to navigate, visually appealing website. Next, we set up an email database for “direct mail” from the brand. Then, for our owner advocates, we put a text app into place – Community – which allows them to communicate and interact with customers directly.

The biggest thing I have learned through this project is that to succeed, you have to have the right people around you, as well as a strong will to persevere.

Our strongest tool to attract and retain customers is word of mouth. We started this pre-launch, as described above, to build demand for Tolago before it was even available. Similarly, social media has allowed us to engage with people looking for a better hard seltzer. The majority of our early social growth was organic, and now we are also doing a lot of geo-targeted digital advertising to key regions.

how-we-started-a-68k-month-all-natural-hard-seltzer-brand

How are you doing today and what does the future look like?

I am very proud and happy to say that Tolago is in a great place and is doing terrific. We shipped our first case less than three months ago and are already seeing traction. I have to give credit to the team for having a great mindset and wanting Tolago to succeed. We have momentum in our favor and are now seeing emails from accounts stating they are moving 50 cases of Tolago every few days. This is such a rewarding message to receive. The best part is that when our distributor partners see these, they get more involved, so success is breeding success.

We are seeing consumers gravitate toward Tolago because there are not really any other elevated hard seltzers on the market. Now that the public has a hard seltzer they can relate to, one that aligns with their views and values, there is a huge demand. This is showing us that there is a bright future for Tolago, and we are expanding. We are getting requests for Tolago from all around the United States. The next state we will open is New Jersey, on Jan. 10th, with New York to follow soon after. In the west, we are looking at Arizona and Nevada, and then potentially the Pacific Northwest. We are ready and eager to go as fast and hard as needed, while methodically moving into states that we know will have demand for a product like Tolago.

Through starting the business, have you learned anything particularly helpful or advantageous?

The biggest thing I have learned through this project is that to succeed, you have to have the right people around you, as well as a strong will to persevere.

Launching in the middle of the pandemic was extremely difficult. The world was shutting down; again and again and we had to react and adjust quickly because it was sinking or swimming. Even seasoned entrepreneurs had to rearrange their toolboxes to get through 2020. Just a few of the hurdles we had to overcome were changing the way we sourced and obtained ingredients; navigating strained supply chains; and adapting to a fast-changing retail landscape.

Additionally, a shortage of aluminum cans was and will continue to be a challenge for all beverage manufacturers. The pandemic was obviously uncharted territory, which was both intimidating and exciting. It forced us to find new ways around traditional systems. There was a lot thrown our way all at once, and it looks like the second wave will be just as tough. What we do as a company will hopefully set many precedents for the years to come, so we are very driven to continually push for innovation.

how-we-started-a-68k-month-all-natural-hard-seltzer-brand

What platform/tools do you use for your business?

We like to keep it simple. In addition to the text app I mentioned above, Community, we use Shopify for our website hosting. While we do have the option to set up an eCommerce page to sell our products through our site, we would much rather support the work of our distributors and retailers by selling only through them.

Day to day, we use Gmail for emails and calendars, Google Docs to share and collaborate on documents, and DropBox for large file and image sharing.

For project management, we use Evernote and Wrike to keep teammates on task and to collaborate on all projects. The CRM we use is called VIP, which is a CRM specific to alcoholic beverages.

What have been the most influential books, podcasts, or other resources?

Knowledge is power. The more information you seek out, the more comfortable you will be with all that comes up in daily life. I am a big fan of self-help and entrepreneurial books and have three favorites that helped me become a stronger leader:

The first is Principles by Ray Dalio: this is a phenomenal book about structuring life and business, as well as interacting with people in general. It offers a way to prioritize your goals and is a really great read for entrepreneurs managing others.

I also recently read Algorithms to Live By, by Brian Christian, which makes you think about yourself, how you do things, and the bigger picture. It made me ask myself, “What else am I missing?” and really pushed me toward optimizing tasks I had previously struggled to complete.

The third book I recommend is Never Split the Difference by Christopher Voss. It is a terrific book about how every conversation is a negotiation.

Something to remember is that we all have to make our own choices. These books provide perspective from people that have been through it before. Take the little nuggets to help in your own decision making, but never assume these people have all the answers. I also listen to the podcasts of Michelle Obama and Joe Rogan; they provide a refreshing perspective on life from a truly genuine and insightful place.

Advice for other entrepreneurs who want to get started or are just starting?

The best advice I can give is to go after your passions because those are the things that will keep you driven. Enjoy what you are doing so that you can put in all your effort to achieve success. Doing something you don’t like inhibits you from doing your best.

Sometimes the hardest part is believing in yourself and visualizing your end goal, which brings me back to having the right team around you. They can really help push you in the right direction. Finding the right team is also crucial to help you execute your ideas. In my experience, it is really important to take the time to find good people.

It is only natural to come across roadblocks and moments of discouragement; after all, starting a business is daunting. Yet the constant encouragement and effort from peers that you respect really make you push yourself. Behind every flourishing business is never just one person; rather a group that works well together. Of course, steady leadership is important, but success requires a strong base, to begin with.

Are you looking to hire for certain positions right now?

We are looking to add sales representatives to the Tolago team. These full-time, paid sales positions are available for eager, fast-paced individuals that love to interact with customers and potential customers. Tasks include visiting accounts and making connections with new accounts. In early 2021 there should also be openings on the operations side as well.

Where can we go to learn more?

-  
Nick Greeninger,   Founder of Tolago

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