Anheuser-Busch InBev is pushing deeper into non-beer offerings, today announcing that its innovation and growth unit, ZX Ventures, has acquired the remaining stake in Swish Beverages that it did not already own.
Terms of the purchase were not disclosed, but Marina Hahn, vice president of new business at ZX Ventures, said the transaction would close “immediately.”
The relationship between Swish Beverages — which was launched by Internet celebrity Josh “The Fat Jew” Ostrovsky and partners David Oliver and Tanner Cohen in 2016 — began last year when ZX made a minority investment in the company.
Swish, which makes the popular line of “Babe” canned wines, as well as bottled “White Girl Rose” and “Family Time is Hard Pinot Grigio,” sells its products in 27 states and online.
Four-packs of the Babe product line sells for a suggested retail price of between $11.99 and $13.99.
To date, the company’s brands have benefited from Ostrovsky’s social media reach, and his somewhat unconventional approach to self-promotion. Ostrovsky — who has been called “The King of the Internet” — boasts 10.3 million followers on Instagram, where he posts a mix of viral videos, trending memes and half-naked photographs of himself.
Speaking to Brewbound, Ostrovsky attributes much of his company’s success to its knack for reaching millennial customers and speaking their language.
“We have an unprecedented connection with our consumers,” he said. “We have a focus group that we talk to on a daily basis. We listen to our customers because we are talking to them every single day.”
For his part, A-B chief sales officer Brendan Whitworth said the purchase illustrates the company’s growing interest in reaching “consumers as they navigate through different occasions.”
“Looking at the adjacencies within alcohol, this is the perfect opportunity,” he said. “We are a disruptive company, and this is a disruptive approach to wine.”
According to Nielsen, sales of canned wine grew 77.5 percent during the 52-week period ending April 20th.
Hahn, who described the wine segment as “very fragmented,” credited Swish with democratizing a product that was typically reserved for high-end occasions.
She also said the acquisition was just one piece of a larger broader strategy to build a portfolio in “adjacent categories.”
Earlier this year, A-B purchased San Diego’s Cutwater Spirits, which manufactures 14 different ready-to-drink canned cocktails.
A-B, via its ZX division, is also testing a “Saturday Session” wine product that checks in at 5.5 percent ABV and 100 calories, as well as a line of gluten-free, 100-calorie “b” beverages that check in at 3.5 percent ABV and are made with water, honey and fruit.
The company’s Beyond Beer Division also oversees sales and marketing for Bon & Viv hard seltzer, energy drink maker Hiball Inc., and has partnerships with Starbucks (Teavanna) and Drinkworks (Keurig).
Asked about future plans for Beyond Beer, Whitworth said the company’s long-term ambitions are “big,” but noted that it is “realistic” on the time it will take to build its business in other segments.
“All of these things fit into complementary propositions — whether it’s alcoholic or non-alcoholic — and break down consumer frustrations or needs,” he said. “They are all in spaces that we are comfortable operating within, and that can be incremental to our business.”
Ostrovsky, David Oliver Cohen, and Tanner Cohen will remain in their roles and continue to lead Swish Beverages, the company said.
A press release with more information is included below.
Anheuser-Busch and Babe Wine Partner to Further Strengthen Industry-Leading Portfolio With Increased Investment in Wine
Partnership Addresses Consumer Need For Innovative and Great-Tasting Wine
JUNE 28, 2019 — NEW YORK, NY — The country’s leading brewer, Anheuser-Busch, through its affiliate ZX Ventures, will acquire the remaining stake in the disruptive wine company, Babe Wine. Babe Wine’s partnership began back in 2018 when the company’s global growth and innovation group, ZX Ventures, acquired a minority stake in the company.
Since joining the Anheuser-Busch family, distribution of Babe Wine’s popular Rosé, Pinot Grigio and Red wine has increased dramatically, offering more consumers in more locations the opportunity to enjoy the portable and photogenic pop culture phenomenon.
Anheuser-Busch has continued to expand its roster in the Beyond Beer arena, leveraging its core capabilities to produce and distribute a portfolio of beverages designed to keep up with evolving consumer tastes. Babe falls under the beyond beer umbrella with other Anheuser-Busch brands like Drinkworks, Bon & Viv Spiked Seltzer, and, the newest addition, Cutwater Spirits. The expansion of this partnership is consistent with the brewer’s overall strategy to drive growth in the U.S. by providing consumers with winning brands for every occasion.
“We pride ourselves on putting the consumer first and evolving with them through innovation and cultural engagement, and Babe Wine is in a class by itself when it comes to understanding their drinkers and building brand loyalty,” said Michel Doukeris, CEO, Anheuser-Busch. “We’re looking forward to taking this partnership to the next level and using our distribution capabilities to share Babe’s great portfolio with more consumers around the country.”
Launched as Swish Beverages in 2016, Babe Wine founders Josh “The Fat Jewish” Ostrovsky, and brothers David Oliver Cohen and Tanner Cohen, developed a unique wine proposition that utilized their extensive social media following, empowering Babe to be one of the most photographed wines on Instagram.
“Anheuser-Busch pioneered the modern beverage landscape,” David Oliver Cohen, Co-Founder of Babe Wine said. “We have a dream to make Babe into America’s #1 wine, and A-B has the vision, the capabilities, the people and the network to help us get there.”
Babe Wine will continue to be led by Josh Ostrovsky, David Oliver Cohen, and their senior leadership team.