REDEFINING THE NON-ALCOHOLIC COCKTAIL

The founders of Parch, Ila Byrne and Rodolfo Aldana, spent the majority of their careers in booze. Byrne worked for industry titans like Treasury Wine Estates and Diageo while Aldana ran the agave portfolio for the largest spirit company in the world, helping the company grow Don Julio and acquire Casamigos. So why did two alcohol industry veterans then decide to start a non-alcoholic cocktail brand?

A few years ago, Aldana was diagnosed with an aggressive form of cancer. He left his job to focus on treatment, and he also chose to give up all forms of alcohol. Aldana thankfully went into remission, but when he started socializing again, he found himself disappointed by the options non-drinkers like himself had to choose from at parties or events. Nothing delivered on what he had enjoyed about the mezcal and tequila traditions he had spent his career in. He wanted something adult (no sugary Shirley temples), something indulgent (plain seltzer wasn’t cutting it), and something complex (non-alcoholic beer just tasted like beer). Everything he tried felt dumbed down, artificial and immature. What if he made his own?

Enter Ila Byrne. From her position at Diageo, Byrne watched as new and exciting NA brands like Seedlip hit the market at the same time as many consumers were beginning to re-examine their drinking habits. She knew there was an opportunity to be found in the NA sector, but she wasn’t sure what role she had to play in it.

A few years later, having left Diageo and working as a consultant, Byrne received a message from Aldana: What if we made a non-alcoholic beverage that offered the same quality as a cocktail you might order at a mixology bar?

As they began ideating, Byrne and Aldana agreed: the NA category was offering consumers a compromise. “You can drink something that kind of feels like alcohol, but it’s downgraded. The narrative was that non-alcoholic drinks are less than the real thing. We wanted to offer consumers more, providing a beverage people were actually excited to drink — not just appeased.” Furthermore, they wanted to create a beverage that allowed non-drinkers like Aldana to partake in socializing without feeling left out: to give them a drink they felt proud to hold in their hand and share at a party. And with these goals in mind, Parch was born.

WHAT IS PARCH?

Parch is an agave-based non-alcoholic cocktail inspired by the tequila and mezcal traditions Aldana was steeped in and the “lush biodiversity” of the Sonoran desert. As they developed their flavor profiles, they looked to the desert for unexpected combinations including prickly pear cactus and other desert botanicals, practicing the ethos, “if it grows together, it goes together.”

At first, Byrne and Aldana tinkered with their flavors at home, getting feedback from friends and trusted bartenders. But, Byrne explains, “It’s one thing to try the product in your home kitchen, but it’s an entirely different thing to commercialize it.” To move their product out of their homes and into the hands of consumers, they worked with a liquid developer with a background in functional beverages who helped them land on drink formulations they’d be able to scale.

After a year of development, Aldana and Byrne launched two flavors in 2022: Spiced Piñarita (a smoky, spicy sparkling pineapple drink with mole bitters and cocoa extract) and Prickly Paloma (a cocktail with grapefruit, orange bitters, prickly pear cactus, hibiscus and more.)

If it sounds like each drink packs in a lot of flavors, it’s because they do; each of their drinks has 12 to 15 different natural ingredients, including herbal powders, frozen puree, juices, and botanicals. Byrne and Aldana also worked with herbalists to include four adaptogens in their cocktails: ashwagandha, American ginseng, Gaba, and L-theanine.

“Since we’re taking out the alcohol component, we wanted to give something to people to help them feel relaxed. We don’t want to get you high, put you to sleep, or put you into a state of euphoria. We just want to give you that feeling a glass of wine provides — a nice deep breath.” Still, Byrne is clear that the adaptogens in their drinks are not a quick fix: “It’s not like popping a pill. Adaptogens work with your body and build up in your system over time.”

Once the liquid inside of the can was established, Byrne and Aldana moved on to branding, another area where they sought differentiation. “This category can be very puritanical, mimicking the styles of clean beauty brands that are very minimal, using only whites or pastel colors. We wanted to push against that and lean into something that felt optimistic, intriguing, sunny, and lush.”

Their can design includes rich reds and greens, while their site portrays idyllic imagery of the Sonoran desert and people enjoying Parch in chic glasses rimmed with salt. Parch drinkers are a part of the party, not separate. Abstaining from alcohol, Byrne says, “should never feel embarrassing.” The Parch can, with its bright colors and celebratory graphics, fits in at any gathering without a second thought.

THE (BUMPY) ROAD TO LAUNCH

Parch officially launched in June 2022 — and the road to launch was not exactly smooth.

First, the complexity of Parch’s beverages made it challenging to find a co-manufacturer. “Not everyone wants to make Parch. Most co-manufacturing facilities want to make flavored water. It’s the easiest thing to make and it’s super profitable. Parch uses 12-15 natural ingredients and is much more complex to make.”

When they finally found a co-manufacturer, they pushed forward. They initially planned to launch in glass bottles, but couldn’t acquire glass anywhere — so they pivoted to aluminum cans. As it turns out, getting cans was challenging, too. “We ended up having to import [cans] from China at a huge bulk scale.” To make matters worse, the cans they imported were shipped in one of the container ships that got stuck in Southern California for months on end.

Eventually, the cans arrived and they released a product they felt proud of. But of course, another hurdle arose. After the first production run, their co-manufacturer backed out. “They said, ‘you’re too complicated. We want to go back to making flavored water & energy drinks, so you’ll have to find someone else.’”

Their co-manufacturer backed out at the same time that they received a huge opportunity with a national grocer who wanted to stock Parch. Byrne and Aldana then spent six months chasing after a new co-manufacturer. “I begged people. I didn't cry, but I was ready to.” After months of chasing or, in Byrne’s words, “stalking,” a new partner came through who they are now happily working with.

Even with a new co-manufacturer locked down, more issues presented themselves: their freight company left behind an entire truck of juices and another shipment of juice went missing in transit. “It seems like this is just the life of a start-up,” Byrne confesses. Because of this, Byrne tries to remind herself and her partner not to sweat the small stuff. “Sometimes there’s an issue with a label that is not perfectly printed and you have to suck it up because you’re working so fast. As long as it’s safe and still tastes great, that is the most important thing for consumers. But the perfectionist in me panics, thinking, ‘Oh my god, this line is slightly blurry.”

Bringing Parch To Consumers

As Parch grows, they have been working diligently to get their drink into as many people’s hands as possible. In some ways, this process is easier for an NA brand. They don’t have to go through the dreaded three-tier system, making it easier to distribute Parch across the country at a much quicker pace.

However, Byrne has found most liquor distributors are still quite resistant to taking on a NA brand, which makes it challenging to get Parch and other NA drinks into large liquor stores. “[Liquor distributors] make so much money on alcohol distribution that they haven’t seen the need [to stock NA].”

The problem with this, Byrne argues, is that liquor stores are likely where the

NA category will see the most growth. Data from Nielsen shows that 82% of people who buy non-alcoholic beverages also buy traditional alcoholic drinks. NA drinks like Parch are “an additional basket purchase for most people. Maybe they’re buying for someone else in the household, but most likely they’re buying for themselves to add into their repertoire on days they don’t want to drink or as the third drink of the night.”

Byrne hopes to see liquor stores start dedicating entire sections to NA beverages, and she references the dairy industry as an example of what she hopes will come: “The dairy fridge has changed dramatically over the last decade, with plant-based milk alternatives alongside cow’s-milk. We believe the same will happen for NA.”

Until the liquor distributors catch up, Parch is focusing on the locations they can launch in, which includes 46 states and 450 stores across a wide range of categories: non alcoholic liquor stores, wineries, breweries, small bottle shops, natural grocery stores, yoga studios, boutique hotels, and more. They also sell Parch on Amazon and have a DTC option on their site www.drinkparch.com.

Above all, their focus is on getting Parch into as many people’s hands as possible. “When we look at our business plan from 2020, the revenue we thought we would generate from DTC was much more than it actually is. We’ve seen way more conversion from reaching real people in real life at real events.”

In light of this and to cut costs, Parch cut their PR partnership and their Instagram, Facebook, and Google ads, which didn’t provide the results they had hoped. Now, all of their marketing money goes into sampling and in-person events. They use their seven-person team located across the country as brand ambassadors for sampling and have connected with sober communities through partnerships with events like Daybreaker where they’re able to reach as many as 1200 people at sober dance parties. As they build, they plan to take on more partnerships and events.

“Consumers want that tangible interaction with the product,” Byrne says. “Whether it’s Pop-up Grocer or Foxtrot or any number of stores, people are going there for the community.”

JUST BECAUSE ITS NON-ALCOHOLIC DOESN’T MEAN ITS CHEAPER

Setting a price that consumers can understand is another challenge NA brands like Parch have to contend with. “People think that non-alcoholic means you've taken something out so it should be less expensive. But it’s actually extremely hard and expensive to make a great-tasting NA product.”

Heineken has aided in consumer education by pricing Heineken Zero (their NA beer) at the same point as their regular beer. When such a large brand indicates to consumers that NA is not necessarily cheaper, consumers will hopefully begin to better understand NA price points.

Parch priced its product at $5 a can to reflect the quality of the product and the ingredients that have gone into it. Furthermore, pricing it any lower would set them on the same level as your run-of-the-mill soda, which they felt would devalue their offering.

“We want this to be affordable, but it’s an affordable luxury. Our four-pack is more expensive than most beer or soda, but you're also getting so much more in return.” Not only are consumers getting a healthier beverage, but NA drinks like Parch also allow non-drinkers to socialize. “You get to be a part of the social situation without harming your body. We're offering people the opportunity to be included and feel good about their choices. And people will pay for that.”

WHAT DOES THE FUTURE HOLD FOR PARCH?

As the NA space continues to grow, Parch hopes to be one of the pioneers of the next generation of NA offerings and has exciting plans to launch a new product this summer. “we call ourselves the third wave of nonalcoholic beverages,” and they are excited to see the offerings for non-drinkers continue to evolve as consumer attitudes toward alcohol shift.

“The awareness people are gaining about the overconsumption of alcohol is inspiring,” Byrne says. “We don’t have to remove it from our lives entirely, but we should be more respectful of how we drink it — taking the time to savor nice wine or a delicious mezcal cocktail, instead of guzzling cheap stuff. We want to respect ourselves, respect alcohol, and find ways to enjoy life that don’t have to include alcohol.” And one of those ways, Parch and Aldana hope, will be by opening a can of Parch, pouring it over ice, and sitting back to relax.