“Non-alcohol is not a fad, and the need for balance in our consumption is really a movement. I think we see that illustrated not only in press and discussions, but frankly in sales last year. We outsold our projections by 80% and our Q4 numbers were three times the volume of our Q1 numbers. So, the growth in the category is unmistakable,” Marcus Sakey, founding partner of Ritual Zero Proof, told FoodNavigator-USA.
He adds that he credits most of the company’s growth last year to “creating meaningful partnerships with brands,” which is a play he will pursue again this year with brands including V8 Campbell’s, Spartan Races, Recess sparkling water, and Peloton instructor Matt Maggiacomo of Love Sweat Fitness.
A key element of all the partnerships is that all players share the same values and each side brings something of value to the table, both of which Sakey says is essential to a successful partnership.
For example, when Campbell’s approached Ritual Zero Proof to be its official partner for Dry January, Sakey said he was drawn to V8’s shared experience of bringing to the collective conscious a new idea that might be risky, but held a lot of promise.
“As a legacy brand, V8 has a lot of history behind it, but there was a time when I think what it was doing was not that different from what we are doing wit the non-alcoholic movement. There was a time when it was putting forward a vegetable powered juice that was unfamiliar to many consumers and a bit risky,” but ultimately helped launch a full-fledge movement that now holds a significant share of the beverage market, he said.
In addition, he said, both brands “are really aimed at the same thing, which is finding some balance and living a healthy lifestyle.”
But shared values alone are not enough to ensure a successful partnership. Rather, Sakey said, each participant needs to offer something of value that will benefit the collective.
“You want to make sure that a partnership goes both ways, because it is a partnership. So, working with V8 we have a strong social brand and a very established aesthetic. So, we drove the creation and photography. While V8 drove a lot of the publicity and growth and lends the credibility that a legacy brand like that has. So, we both genuinely benefited,” Sakey said.
The team created signature cocktails and mocktails that blend Ritual Zero Proof's non-alcoholic whiskey, tequila and gin with V8 products for easy, healthy and flavorful beverages that consumers can make at home during Dry January and beyond.
To get the most out of partnerships, Sakey said Ritual Zero Proof strives to ensure the outcomes and components that went into them can be used in multiple ways to maximize their impact and return on investment.
For the partnership with V8 that means creating cocktails, photography and other marketing materials that can be used across press and social media platforms and can continue to live on in different ecosystems long after the partnership has concluded.
“If possible, you never want one thing doing just one thing,” Sakey said.
Red-flags that signal a ‘partnership’ isn’t worth it
When evaluating proposed partnerships, Sakey said there are a few red-flags that signal the arrangement might not be as balanced or fruitful as desired.
“When looking at influencers, many of which have become their own brands, you want to do the obvious, which his check that there is true engagement and that they don’t have a large but disengaged following. Really, the audience size is far less important than how much the audience trusts the influencer or brand,” Sakey said.
He also cautions entrepreneurs against imbalanced partnerships that give an outsized benefit to the other player.
“We have refused a number of partnerships because we felt like they were just trying to tic a box or ride our coattails, but didn’t actually care about our brand or the arrangement,” Sakey said.
Finally, he said, if money is one of the first talking points in a proposed partnership – run away.
“If someone starts talking about money right away, watch out. They are just selling space on their billboard, and you may as well buy an actual billboard at that point,” Sakey said, emphasizing that these arrangements “are different than a partnership.”
Retail challenge: Create a non-alcoholic in-store destination
While partnering with other brands and influencers can build engagement with consumers, Sakey said it is important to treat relationships with retailers as partners and not just as a transaction for shelf space.
With this in mind, Sakey said, Ritual Zero Proof is hoping to expand into grocery and is looking for retail partners that will accept its challenge to create a non-alcoholic set in stores.
“There was a time when there wasn’t a gluten-free section or a dairy-free section, and now there is, and there is no going back because they better serve consumers, which drives sales for brands and retailers alike,” he said.
Hoping to follow that model, Sakey wants to see standalone non-alcoholic sections in grocery stores that feature premium products and are a destination for shoppers – an arrangement he is trying to sell by pointing in part to the success of the non-alcoholic beer segment.
“If you look at non-alcoholic beer, it has grown sales nationally 35% year-over-year, and now it is 2% of the entire beer market. It went from being something that was embarrassing to buy, to something that is common now. Even the bodega down the block has non-alcoholic beer. And I think the same will happen with spirit alternatives,” Sakey said. “The question for grocery is: do you want to ignore all the customers who want that, or do you want to serve them and make a profit from it?”