Spiked seltzer has been the go-to summer drink, but the inclusion of mystery alcohols and cheap ingredients has created opportunities for premium canned cocktails to emerge in the market. One of the latest high-quality drinks is the sparkling tequila beverage line launched by Onda. Unlike hard seltzers that are made with neutral malt alcohol, Onda’s beverages are made with blanco tequila from a woman-owned distillery in Jalisco, Mexico. Onda currently offers two flavors – lime and grapefruit – each with 5% alcohol, zero sugar, zero carb, and 100 calories. Onda also offers a member-only, virtual vacation space called Onda Beach Club, where members can gain exclusive access to new products, merchandise, future product drops, and creative collaborations.
AlleyWatch caught up with Cofounder and CEO Noah Gray to learn more about launching a beverage company in the middle of a pandemic, the company’s future plans, and recent funding round.
Who were your investors and how much did you raise?
We raised over $1.2M in Series Seed funding from 25madison and other strategic investors.
Onda is a spirits brand for a new generation of drinkers. We launched a line of canned sparkling tequila beverages, starting with two flavors, lime, and grapefruit. We were inspired by two classic drinks – a lime margarita and a grapefruit paloma – but we’re putting our own spin on it. Both of our flavors are made with blanco tequila from a woman-owned distillery in Jalisco, Mexico. The tequila is carefully mixed with sparkling water and real fruit juice to create a finished drink that tastes light and refreshing with just a hint of tequila. Each 12 oz. can is 5% alcohol, 100 calories, zero sugar, zero carb, and naturally gluten-free.
What inspired the start of Onda?
We saw many of our friends drinking hard seltzers, but these products are made with mystery alcohol and cheap ingredients. We wanted a product that was meant for a healthier, more balanced lifestyle. So, we created Onda to raise the canned beverage bar and developed a product with high-integrity ingredients we actually want to drink.
Also, our favorite drink is tequila soda, and we wanted to create a premium, ready-to-drink option that’s light and refreshing enough for all-day occasions, like beach hangs, pool parties and backyard BBQs.
How is Onda different?
Onda is light and refreshing like a hard seltzer but made with a distilled spirit base. This is different from most hard seltzers in the market that are made with neutral malt alcohol, which is fermented like beer. Our brand’s vibrant visual identity, anchored by its signature Onda orange, also stands apart in a category defined by a sea of white cans.
What market does ONDA target and how big is it?
Onda sits at the intersection of the fastest-growing categories in the alcohol industry: hard seltzer, canned cocktails, tequila, and e-commerce. Hard seltzer sales are expected to double to $3.5B in 2020. Tequila has long been the fastest-growing spirit in the US with sales exceeding $9B in 2019.
Who are your competitors?
Onda is an early mover in the sparkling tequila category with few established competitors. Our use of tequila together with our vibrant and elevated brand identity enables us to stand out from other RTDs and hard seltzers as a more premium option.
What’s your business model?
We operate a hybrid wholesale and “DTC” business model. Onda is available for purchase online at our website and is shipped directly to your door by licensed retailers. We also have a physical presence in select retail locations throughout the greater NYC area.
What was the funding process like?
We launched Onda in partnership with 25madison, a leading startup studio. 25madison is both a capital provider and a hands-on execution platform. We were fortunate to benefit from their advice throughout the funding process, which helped us close our round even in the midst of the market disruption caused by coronavirus.
What are the biggest challenges that you faced while raising capital?
Thankfully, we had experienced advisors by our side and a product that tapped into the biggest trends in our industry, which made our fundraising process go smoothly. Coronavirus caused a lot of disruption in all capital markets, but we were fortunate to have a group of investors who believed in our team and the long-term opportunity for Onda.
What factors about your business led your investors to write the check?
There are a few factors that helped us in fundraising. First, we invested over a year of work into market research, product development, and branding before going to investors. Second, we intentionally designed a product and brand that tapped into the biggest growth opportunities in our industry. Third, we assembled a team uniquely qualified to execute on our vision for Onda. It was really the combination of upfront work, long term vision, and founder-market fit that led to our first checks.
What are the milestones you plan to achieve in the next six months?
We’ve been blown away by the response to Onda we’ve received in the first week since launch – we completely sold out of our e-commerce inventory. Now, we’re looking forward to expanding distribution, launching new flavors, and developing merch & apparel to keep building momentum behind the Onda brand.
We’ve been blown away by the response to Onda we’ve received in the first week since launch – we completely sold out of our e-commerce inventory.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
This is a time of unprecedented disruption coming from so many different directions. Whether you are a new startup or a Fortune 500, you have to adapt to survive. We originally planned to launch Onda through traditional retail channels, with tastings, parties, and other in-person events all summer long. As a result of COVID-19, we had to completely shift our strategy to prioritize e-commerce and a digital-first launch. I believe that agility and resourcefulness even more than fresh funding will be what tips the scales.
Where do you see the company going now over the near term?
We’re going to deepen our presence in New York this summer while planning our expansion to California where two of our other cofounders, Kelli and Shay, both live. We’ll also be building our presence online and fine-tuning the shipping and delivery experience.
Where is your favorite bar in the city for an after-work drink?
My favorite bar is the mezcaleria La Milagrosa in Williamsburg, though it’s best late at night for music and dancing.
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