Scotmid and Scottish Enterprise pump six figures into Scots firm behind alcoholic flavoured water

A Scottish firm behind alcoholic flavoured water has secured a six-figure investment involving retail chain Scotmid and Scottish Enterprise.

The Alcoholic Water Company was founded in late 2019 by a team of experienced drinks industry entrepreneurs with a view to launching a range of hard seltzers.

The new venture is a collaboration between Glasgow-based The Start-Up Drinks Lab and drinks-marketing agency Whitelabel Group, which is based in London.

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Craig Strachan and Hannah Fisher of the The Start-Up Drinks Lab have partnered with the founders of Whitelabel – Drew Shannon and Greg Saunders – to secure the funding boost.

The Alcoholic Water Company was founded in late 2019 by a team of experienced drinks industry entrepreneurs with a view to launching a range of hard seltzers.

Nick Baxter has also joined the team as UK head of sales and brings more than 15 years’ experience across multiple channels in the industry for Coca-Cola, Britvic and most recently Jagermeister.

Edinburgh-based Scotmid Co-op is purchasing a minority stake in The Alcoholic Water Company as part of the investment raise.

The retail group’s chief executive, John Brodie, said: “We are delighted to be partnering with the founders to establish this start-up. They bring not only experience but drive and passion to the brand.

“We can see from our retail insight that this is a fast growing sector of the market and there are opportunities to establish a brand at the premium end.”

Jan Robertson, interim director of growth investments at Scottish Enterprise, said: “The founders’ industry experience and entrepreneurial vision has seen them recognise and quickly capitalise on a great opportunity in the drinks market.

“This investment will help them build on their solid start by supporting the growth of their footprint in the UK and overseas.”

Hard seltzers have become a major growth category in the US drinks market, where they are seen as a refreshing alcoholic drink that is low in calories and lighter in alcohol strength. The UK hard seltzer market is currently worth about £10 million but is projected to grow to £75m by 2023.

Fisher, who is managing director at The Alcoholic Water Company, said: “We have had a strong start, securing luxury listings with both Harrods and Caviar House & Prunier along with exposure in international markets including Scandinavia and Spain.

“This seed investment will support our ambitious growth plans including extending our presence in UK grocers, expanding internationally and cementing our commitment to a better future for all through achieving our B-Corp accreditation.”

The company, which is registered in Port Glasgow, has already launched its first brand, Lilo, described as an “elevated, premium hard seltzer”.

The drink is crafted to be lighter in calories and lower in alcohol (3.5 per cent ABV), using natural ingredients, soft Scottish water and “bespoke” botanical spirits. In the few months since its launch, Lilo has picked up two awards for taste, winning masters and gold awards in The Spirits Business Hard Seltzer Masters.

Melita Kiely, editor of The Spirits Business magazine and chair of The Global Spirits Masters, said: “To receive two medals – one master and one gold – in one of the most competitive subcategories, spirit-based hard seltzers, is a true testament to the quality of Lilo’s products.”

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