Sowing THE SEEDs FOR NON-ALC

DISTILL VENTURES

AND SEEDLIP

A C A S E S T U D YS E E D L I P

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A C A S E S T U D YS O W I N G T H E S E E D S F O R N O N - A L C : D I S T I L L V E N T U R E S A N D S E E D L I P

Since its founding in 2013, Distill Ventures has been on a mission to support entrepreneurs and grow the drinks brands of the future.

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The introduction led to a meeting, which quickly led to several more, and then an investment which enabled Seedlip’s launch, sparking a revolution in how the industry regards and serves people who – for whatever reason – might not be looking for an alcoholic drink.

This case study looks back over that journey, and how DV was able to help Ben Branson provide the solution to the dilemma of “what to drink when you’re not drinking®”.

Frank Lampen, Shilen Patel and the DV team were searching for innovative drink brands and founders who were on a mission to change the industry and the world. Before long, this search brought them to Ben Branson.

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Where it all Began

Feeling frustrated by the lack of choice available at bars and restaurants when he wasn’t drinking alcohol, Ben wanted to make a change. If those around him were being offered exciting drinks, served beautifully, why were water, juice or soft drinks the only options available to those not consuming alcohol? With a family background in both brand design and farming, Ben wanted the craft, the intricacy, the ingredients, the history, the versatility of spirits – but without the alcohol.

BEN’S BREAKTHROUGH CAME FROM A 17TH CENTURY BOOK.

In The Art of Distillation, he discovered a vital fact: historically, distillation wasn’t just about concentrating alcohol into spirits. It had also been used to extract flavour or function from plants to make non-alcoholic herbal remedies. This insight led to experiments macerating and distilling in his kitchen with herbs from his garden.

In 2014, Ben was introduced to Shilen Patel, Co-founder of Distill Ventures.

"FROM THE OUTSET I COULD SEE BEN’S INCREDIBLE CHARISMA. HE WAS HUMBLE, MEMORABLE, LIKEABLE AND HIS STORY WAS COMPELLING. BUT MOST IMPORTANTLY, I BELIEVED IN HIM AND HIS VISION. HERE WAS AN ENTREPRENEUR WHO WAS GOING TO CHANGE THE INDUSTRY.

" Shilen Patel

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"I WANTED TO CHANGE THE WAY THE WORLD DRINKS AND THAT MEANT CAREFULLY CONSIDERING EVERY SINGLE DETAIL OF THE DRINKING EXPERIENCE, FROM THE BOTTLE, TO THE INGREDIENTS, MENU PLACEMENT, PRICING, THE PROCESS, THE SERVE, THE BRAND, THE DESIGN. ALL OF IT HAD TO SCREAM QUALITY AND SOPHISTICATION TO BE TAKEN SERIOUSLY.

" Ben Branson

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Securing Cash Investment

Supporting and working with the most exciting founders in drinks is why DV exists. The support comes through three distinct pillars, the first of which is investment. Helping a founder work out what level of investment is required to realise their vision is a crucial first step in making an investment case.

"WHEN WE SHOWED HIM SOME EXAMPLES OF GOOD BUSINESS PLANS, BEN WENT OFF AND COMPILED ONE OF THE BEST BUSINESS PLANS I’VE EVER SEEN WITHIN JUST A FEW SHORT DAYS.

" Shilen Patel

Shilen says, “One of the things that impressed me most about Ben was his drive and the speed at which he worked. He had this incredible conception of the product, the brand and the experience. But at that point he hadn’t created a business plan."

The vision – supported by that business plan – unlocked the first investment for Seedlip. The minority investment from DV's backer, Diageo, enabled Ben to hire the first members of his team and make his first full production runs. It also enabled Seedlip to access the full range of DV support including personal mentoring and access to industry expertise.

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The Early Days

What was notable about the reception of Seedlip was how many people embraced the concept of a non-alcoholic spirit immediately. Indeed, the response of many consumers was “what took you so long? I’ve been looking for a sophisticated non-alcoholic drink forever”. Seedlip’s mission had clearly struck a chord.

IT’S EASY TO FORGET, THOUGH, QUITE HOW REVOLUTIONARY IT WAS.

Although Ben took full advantage of his own and DV’s network to fully immerse himself in the drinks industry, that didn’t provide a playbook for launching something that looked like a spirit, was served like a spirit, priced like a spirit… But with no alcohol.

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"BEN THREW ALL HIS EFFORTS INTO DELIVERING THE FIRST 1,000 BOTTLES TO SELFRIDGES, AND THE BRAND PROGRESSED FROM SELLING 1,000 BOTTLES IN THREE WEEKS, TO SELLING 1,000 BOTTLES IN THREE DAYS, TO SELLING 1,000 BOTTLES IN THREE HOURS. INFLUENCERS, MICHELIN-STARRED RESTAURANTS AROUND THE WORLD, LIKE THE FRENCH LAUNDRY, AND HIGH-END BARS STARTED REQUESTING STOCK. THE CONSUMER DEMAND WAS CLEARLY THERE AND IT QUICKLY BECAME APPARENT THAT SEEDLIP WAS TAKING OFF.

" Shilen Patel

Everything had to be invented - how to produce the liquid, how to ensure it was shelf-stable before and after opening, legal requirements for labelling. Then there were the specific challenges not faced by new brands launching into established categories, such as where to place Seedlip on a menu or in-store. While it's status within the wider drinks industry is now clear and seem obvious, in the early days it wasn’t clear who should be evaluating Seedlip: the beer, wine, spirits, or soft drink buyer.

KEY TO BEN’S VISION FOR SEEDLIP WAS THAT IT SHOULD BE MADE, PACKAGED AND SERVED LIKE ANY SPIRIT.

Getting input through the development process from a range of people deeply embedded in the spirits and hospitality industries helped in this regard. And along the way this also recruited the brand’s first advocates – multi-award winning bartenders, Ryan Chetiyawardana and Erik Lorincz and Michelin-starred chef, Tom Kerridge.

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"HAVING SUCH INTEREST SO EARLY ON WAS CLEARLY A POSITIVE, BUT IT DID PRESENT A CHALLENGE. HOW TO SCALE EXTREMELY QUICKLY TO MEET DEMAND?

" Shilen Patel

IMPLEMENTING A FLEXIBLE APPROACH TO ENSURE RAPID SCALING.

Once the challenge of supplying a brand new type of liquid in the face of strong demand had been overcome, thoughts turned to where else short-term focus and energy was required. At the same time a roadmap for the development and launch of new variants needed to be created.

An introduction to Dawn Davies, then head buyer of wine and spirits at London department store Selfridges, led to Ben finding his first retail partner and the place where he would launch the brand.

Ben spent many hours conducting tastings in Selfridges, trying out different ways to describe Seedlip to consumers. In one conversation he found himself summing it up in the phrase “it’s what to drink when you’re not drinking”. The message landed and realising the power of the phrase, Seedlip’s tagline, which is now the brand’s trademark, was born.

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A Customised Way of Working

Distill Ventures prides itself on working in just the right way for each of the founders in the portfolio. In Seedlip’s case, Ben used weekly meetings to talk through what he was focused on, what he was concerned about, and where he needed help. Shilen and the Distill Ventures team offered support whenever and wherever needed, whether Ben wanted advice on how to deal with online reviews, how to react in the event that copycat brands hit the market, or how to ensure continued demand.

"WE KNEW BEN HAD AN EXCEPTIONAL PRODUCT AND HE WAS AN ENORMOUSLY TALENTED FOUNDER WHO WOULD MAKE THIS WORK. BUT WHILE IT OFTEN LOOKED EFFORTLESS, THE REALITY IS HE ESSENTIALLY INVENTED A CATEGORY AND THAT REQUIRED TAKING CALCULATED RISKS BASED ON A HEALTHY COMBINATION OF GUT, LUCK AND THE BEST ADVICE AVAILABLE.

" Shilen Patel

of consumers surveyed reported they want better choice when it comes to Non-Alcoholic drinks.‘Non-Alcoholic Drinks: A Growth Story’ from Distill Ventures, May 2019.

61%

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As Seedlip started to gain traction, Distill Ventures committed to expanding its portfolio of non-alcoholic drinks, convinced that the reception of Seedlip demonstrated that this was a huge untapped opportunity. Non-alcoholic brands account for around a quarter of the total DV portfolio, while its bursary programmes have allowed a wider selection of talented people to take their first steps to becoming successful drinks brand founders.

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With sales continuing to grow, it was essential that Ben’s company expanded. “There is an enormous difference between companies producing a few thousand and tens of thousands of bottles. Seedlip was shifting gears. In the early days, you feel shoulder to shoulder with the founder but that has to change as the team builds and specialists are onboarded to look after different areas of the business. During this transition the founder’s time becomes increasingly limited. It’s vital that ways of working are implemented so each team can function effectively without the founder's direct or constant involvement,” said Shilen.

Ben recalls: “Shilen and the team helped me navigate this key stage of Seedlip’s growth as I had to start working more on the company and less in the day to day. My focus had to be on leading the business, the team, the culture, the future.”

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1For full methodology and data sources, please download ‘Non-Alcoholic Drinks: A Growth Story’ from Distill Ventures website: distillventures.com

To track the development of the non-alc opportunity, Distill Ventures has worked to engage with and survey the trade. Our published research, in June 2019, showed that more than 55% of restaurants in London and 40% in Los Angeles now provide sophisticated non-alc options. The research also revealed that 55% of the most influential bartenders surveyed in New York, Los Angeles and London believe the no- and low-alcohol trend will grow over the next 12 months1.

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9 7,500WORLD'S BEST BARS, RESTAURANTS, HOTELS & RETAILERS INCLUDING THE MAJORITY OF:

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By August 2019, less than four years after it was founded, Seedlip’s team had grown exponentially and the brand was now stocked in over 7,500 of the world’s best bars, restaurants, hotels and retailers, including the majority of the world’s 50 best cocktail bars and over 300 Michelin-starred restaurants. Together, Seedlip and Ben had fundamentally transformed the drinks industry. They were now ready for their second act, on an even larger stage.

"SUPPORTING THE FOUNDERS' VISION IS WHAT WE’RE SET UP TO DO AND IN SEEDLIP, BEN HAS TRULY CREATED A PRODUCT WHICH HAS REVOLUTIONISED THE INDUSTRY. COLLABORATING WITH AN ENTREPRENEUR AS INSPIRING AS BEN WAS A REAL HONOUR AND WE EXPECT SEEDLIP TO GO FROM STRENGTH TO STRENGTH WITHIN DIAGEO’S PORTFOLIO.

" Shilen Patel

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DV’s First Non-Alc Exit

In August 2019, Diageo acquired a majority shareholding in Seedlip, marking an important milestone in DVs’ partnership with the brand. It was the first acquisition of a non-alcoholic brand by Diageo and a further opportunity for Ben to change the way the world drinks.

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"SEEDLIP IS A GAME-CHANGING BRAND IN ONE OF THE MOST EXCITING CATEGORIES IN OUR INDUSTRY. BEN IS AN OUTSTANDING ENTREPRENEUR AND HAS CREATED A BRAND THAT HAS TRULY RAISED THE BAR FOR THE CATEGORY. WE’RE THRILLED TO CONTINUE WORKING WITH HIM TO GROW WHAT WE BELIEVE WILL BE A GLOBAL DRINKS GIANT OF THE FUTURE.

" John Kennedy, President Europe, Turkey and India at Diageo

"DISTILL VENTURES AND DIAGEO'S SHARED BELIEF IN OUR VISION HAS ENABLED US TO BUILD A BUSINESS THAT'S READY TO SCALE EVEN FURTHER AND I'M EXCITED TO CONTINUE WORKING WITH DIAGEO TO LEAD THE NON-ALC MOVEMENT.

" Ben Branson

D I S T I L LV E N T U R E S .C O M