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While it’s a fact that business failure is common, this tale centres on a firm that’s in serious trouble in an increasingly competitive field. There are lots of industries where direct-to-consumer alcohol is available, but buying it online and having it delivered to your door was a little slower to catch on.
It took a bit longer for direct-to-consumer booze to come into fashion due to some old delivery restrictions. However, thanks to a few creative loopholes in state law, as well as some updates, direct-to-consumer alcohol sales were beginning to sound like a great business idea in 2019. Haus, a startup that produces aperitifs, was not very pleased with the last few weeks.
In addition to the fact that we mentioned that the company’s series A funding had fallen through and that it would be closing down, its Ceo and founder, Helena Price Hambrecht, announced that the company’s series A funding had fallen through and that the business would be closing.
Many things worked in Haus’ favor. The alcohol content of its beverages is lower than that of hard liquor. And youthful millennials and Gen Zers were drawn in by flavor combinations like strawberry, basil, and grapefruit jalapeño.
And thanks to its DTC business strategy, it was simple for a whole new generation to join the wine club and experience parental love. Haus did not, however, have any funding.
According to Bon Appetit, instead of declaring bankruptcy, the company has entered a thirty day voluntary phase during which a financial firm will assess its assets and look for a new owner. Debt can be settled by selling assets.
Constellation brands, the company behind drinks including Corona light and Pacifico, had agreed to lead Haus’ $10 million series A investment, but the agreement appears to have fallen through for no apparent reason other than scheduling, according to Haus CEO Hambrecht.
Haus was deprived of a big source of funding.
And we certainly wouldn’t fault Hambrecht for having mixed feelings about the whole thing. But as she acknowledged to Bon Appetit, Hambrecht is dedicated to enhancing the market for low-alcohol by volume beverages and is proud of what she has accomplished.
The market, she claims, is starving. You may argue that she is thirsty for businesses like hers, but how did she “just got unlucky”? Empathy Wines is another DTC alcohol firm that may have had a little bit better luck.
That brand only offers premium wine at affordable rates by working directly with outstanding farmers rather than distributors and retailers. Constellation Brands, who you may be familiar with, purchased Empathy in the year 20. They praised its high-end merchandise and e-commerce ability. Although it seems that Empathy Wines’ story has a happier conclusion than Haus’ does.
It doesn’t look like the direct to consumer alcohol industry is slowing down anytime soon which means with the right resources, we just might see a slate of new companies raising their glasses soon.
What do you think of those DTC alcohol services? Let us know down in the comments.