Lyre’s latest funding round has seen the non-alcoholic spirits brand’s valuation increase to $500 million, up from $185 million earlier this year. The $37 million raise was led by D Squared Capital and existing investor Morgan Creek Capital Management.
Lyre’s co-founder and CEO Mark Livings said the pace of growth is “exceptional”.
(Image source: Lyre's)
“We sold our first bottle in 2019 and today we’re selling one at least every 30 seconds. On our current trajectory, Lyre’s is set to become the fastest independent beverage brand to reach unicorn status,” Livings said.
The valuation positions Lyre’s as the most valuable brand in the no/low alcohol category in the world, the company said. Lyre’s is now expected to be annualizing $92 million in revenues by December this year.
D Squared Capital managing director Daniel Grossman said: “The no/low alcohol beverage market is one of the fastest growing markets in F&B and is showing similar characteristics to plant-based milks, meats and other mindful consumer categories.”
Other backers include DLF Venture, VRD Ventures and Maropost Ventures.
From launchpad to unicorn
The company launched in March 2019 after two and a half years of R&D. They released an ambitious range of 13 variants, differentiating themselves from the young market that was predominantly focused on gin-style products.
In the mid-2010s, Livings and co-founder Carl Hartmann saw a growing consumer trend for low/no alcoholic beverages.
In August 2019, Lyre’s was selected for Amazon’s Launchpad store, a platform to help SMEs expand their reach and develop ecommerce capabilities.
(Image source: Lyre's)
At the time, Livings and Hartmann told Food & Drink Business they started Lyre’s because they were seeing an “incredible, tectonic macro-shift in people leaving the alcohol category”.
In the last 12 months, the global low- and no-alcohol drink market grew almost tenfold. NielsenIQ said off-premise sales in low-alcoholic and non-alcoholic wines, beer and spirit categories reached $4.2 billion this year, up from $400 million last year.
The 2021 IWSR Drinks Market Analysis No- and Low-Alcohol Strategic Study shows volumes in Australia increased by 2.9 per cent in 2020. Overall, the no- and low-alcohol market outperformed regular alcohol, which registered a volume decline of -1.4 per cent over the year. IWSR is forecasting that the no- and low-alcohol volume in Australia will grow by 16 per cent from 2020 to 2024.
Data from Endeavour Group, the parent company of BWS and Dan Murphy’s, shows sales have increased more than 83 per cent in the past 12 months at its stores. In October, the company announced a partnership with DrinkWise on a pilot program to position no-, low- and mid-strength alcohol at the front of select stores.
DrinkWise research found people aged 18-44 were twice as likely to consider zero or lower strength alcohol options than those aged 45 or older.
Livings told Food & Drink Business: “There are a lot of parallels here with animal-free meat products. People are looking for consumption experiences that they’re familiar with, such as eating a burger, but wanting to make a more ethical, or healthful choice.
“As such, alcohol free spirits are giving people the option to enjoy beautiful, adult-flavoured beverages in the same environments, such as bars, pubs or entertaining at home but without alcohol - whatever their reason for electing not to drink an alcoholic beverage at the time.”
In September 2020, Lyre’s seed round funding secured $16 million. It’s funding raise in May brought in $179 million, positioning the company as one of the fastest growing brands in the no- and low-alcohol spirits category.
“Millennials and older Gen Zs are drinking less alcohol than any generation before them, but the mindful drinking movement transcends generations and cultural borders. We’re not only growing our business – we’re expanding the whole category, entering territories like the Middle East and Far East virtually uncontested,” Livings said.
Expansion, maturation, innovation
Since its launch in 2019, Lyre’s is now available in 60 countries, with production facilities in the UK, US, Germany, and Australia. While born in Australia, the company is now headquartered in the UK, one of the most mature markets in the sector.
Livings and Hartmann were determined to be an international brand from the outset, spending around 200 days a year travelling. Securing Southern Glazers Wine & Spirits, one of the largest beverage distributors in the world, for accessing the US market in the early days was a particular highlight.
The latest funds go towards marketing and increasing its team size by more than 50 jobs in sales and marketing, production, logistics, finance, and ecommerce.
The company said it would also continue to co-invest with manufacturing partners to expand production capacity.
Lyre’s has also established an R&D division in partnership with beverage technology specialist Döhler, developing a new product pipeline and ensuring continued innovation.
