By Ray Latif
First Beverage Ventures, the private equity arm of First Beverage Group, today announced an investment in mezcal brand Gem & Bolt, marking the first time that the firm has invested in a distilled spirits company. The financing was drawn from its second fund, which also includes investments in Q Drinks and re-investments in Health-Ade Kombucha and Essentia. Terms of the deal were not disclosed.
In a call with BevNET, First Beverage founder and CEO Bill Anderson said that the firm, which has to date operated as an investor in non-alcoholic beverage companies and advised craft beer companies on financing and acquisition deals, is bullish on the mezcal category and will look for additional opportunities to invest in spirits brands.
“Our focus has always been on segment analysis, so that we’re certain to be investing in segments that we believe will provide high-growth and high ascension from distributors and retailers and, ultimately, strategic acquirers,” Anderson said. “And we’ve been very confident in our analysis over the last year that mezcal is clear to be one of the high-growth segments in the spirits industry going forward.”
Gem&Bolt was founded in April 2016 by self-described “artist-alchemist duo” AdrinAdrina and Elliott Coon. Jody Levy, the co-founder and creative director of WTRMLN WTR, is a partner and advisor in the company, which is led by CEO Lisa Derman, a longtime spirits industry executive who was most recently the COO of Stoli Group USA. Levy introduced Anderson to AdrinAdrina and Coon two years ago.
Anderson praised the brand as “led by four women who bring a rare combination of vision, purpose, style and execution,” adding, “I’m enormously excited about working with this team and this brand, and I couldn’t think of a better first investment in the spirits category.”
Distilled in Oaxaca, Gem&Bolt is made with 100 percent espadin and the Mexican herb damiana, which the company claims is said to have some healing properties. The brand is distributed in Texas, Los Angeles and New York City.
The company will use the proceeds from the raise to increase retail availability by expanding its sales and marketing efforts with key distributor partners in the United States.
“When I first came on board, we were looking at our distribution map and where we were going and marketing opportunities, and [it] takes a strategic partner to help accomplish that,” Derman said. “What I like about First Beverage and what the team in general loves about [the firm] is that they are focused on those core values that we share about authenticity and innovation.”
While Gem&Bolt is the first spirits brand in the First Beverage portfolio, Anderson noted the firm’s deep ties to the spirits industry. Jim Bareuther, the former COO of Brown-Forman, heads the firm’s corporate board, and the advisory board for its second fund is led by John McDonald, the former COO of Patron who is currently the managing director – international for Tito’s Vodka. Anderson said that Kristen Bareuther, a managing director with First Beverage Ventures and former executive with national spirits wholesaler Breakthru Beverage Group, helped shepherd the deal with Gem&Bolt. She will provide experience on a day-to-day basis as as the firm’s industry operating partner, Anderson said.
Anderson would not discuss strategic partners in the firm’s second fund, although its first fund includedinvestment from Coca-Cola’s Venturing and Emerging Brands unit. He noted Coke had a clause for the first fund that allowed it to opt out of certain investments. Anderson did say that First Beverage’s second fund will continue to pursue additional investments in spirits brands.
“I think it’s very likely that we’ll be making another one to two investments in the spirits category over the next six to 18 months,” he said.