Alcohol-free drinks firm signs deals with US retailers
Non-alcoholic drinks company AF has signed distribution deals with US retail giants Walmart and Target, taking the number of North American stores it is sold in to 2100.
The Auckland-based business now does 90% of its business in America. It expects to make one million more four-packs of its non-alcoholic ready to drink cocktails to service more than 800 Walmart stores and 700 Target stores over the next 12 months.
AF went on sale in Walmart, the world’s largest retailer, this week and in department store chain Target at the end of March.
Founder and chief executive Lisa King said signing contracts with retailers of this scale would catapult the business and its sales to new heights, with production significantly scaled up to meet weekly supply.
The business has been making product in advance since October.
“The spread of distribution from these deals is huge. And the number of people that are going through these stores to do their shops in these big retailers is huge,” said King, who has been visiting the US frequently.
“This is a huge deal. It’s really exciting and also daunting at the same time because these retailers are very data driven – it’s all about sales and they’re looking at it every week, so if you don’t meet their benchmarks you’re gone.”
Target was impressed by AF and had approached the company for distribution, said King.
AF launched in the US a year ago, and has quickly become a leading player in the market. The business launched in 2020, inspired by King’s own experience when she decided to go alcohol free, and in four years has established a 40% share of the local market, outstripping local sales of more established players such as Seedlip.
It is on track to triple its revenue in the next 12 months.
The global non-alcoholic drinks market is fast growing, with the number of sales and new players picking up pace. The no and low-alcohol market is now valued at $13 billion, and grew by about 5% over the past year.
The category was transitioning from a niche product into the mainstream as it had become more popular with consumers in recent years, and retailers were taking notice, King said.
AF expects to be stocked in 4000 stores by the end of the year.
“Timing-wise, we’ve been very fortunate to have entered the market at the right time to be one of the first handful of brands in that category, and that’s I think why Target asked for us as we had already proven ourselves in the US.”
King said AF was gearing up to launch into other retail chains this year.
AF makes its drinks for the US market in Waverly, just aside of New York.
“We entered the US thinking we would launch into 50 stores on the West Coast, do a little trial, get some data and learn.To now have distribution in two of the biggest retailers in the US, that was definitely not on our radar. Our growth has moved at an incredible pace.”