Drink Monday is raising a Crowd SAFE at a $7 million valuation with no discount. This is a fairly reasonable price, particularly when compared to other overvalued crowdfunding campaigns from DTC brands with much less revenue. At $1.38 million in revenue for 2020, investors are receiving a fair revenue multiple on a business with decent brand recognition and potential for growth. However, the lack of discount is somewhat unusual and less favorable for investors’ prospects. All together, the price score for Drink Monday is high.

The no- and low-alcohol market is growing rapidly, thanks to increasing evidence that Americans — particularly younger Americans, including millennials and Gen Z — are less and less interested in heavy drinking. A recent report indicates that consumption of no- and low-alcohol beverages is expected to increase 31% across 10 major markets in the next four years. Americans spent 34.8% more on nonalcoholic beer specifically in 2020, bringing the market size to $1.7 billion. Overall, the nonalcoholic beverage market is still niche when compared to beer, wine, and spirits, but it is growing explosively. Drink Monday has the opportunity to own the nonalcoholic spirits niche within this expanding space, and thus its market rating is above average.

Drink Monday was co-founded by Chris Boyd (CEO), Ben Acott (CMO), and Marcelo Kertesz (Chief Creative), whose 60 years of combined professional experience — mostly in entrepreneurship and branding — is undoubtedly key to the company’s success. 

Boyd received a business administration degree in the early 2000s and then worked at Vertex Pharmaceuticals in a variety of roles for almost 10 years. He subsequently founded a competitive events business and a startup consultancy before launching Drink Monday in late 2018. Acott began his career in digital marketing, founding a marketing agency and later serving a brief stint at Facebook before launching his own e-commerce wine brand in Australia. He subsequently joined MANSCAPED as Senior Vice President of Product & Growth, scaling the company for two years before leaving to focus full-time on Drink Monday. Kertesz has had more than 20 years of experience in creative design and marketing, founding or serving in leadership roles at various agencies. He currently works as Senior Vice President of Content, Brand & Design for MANSCAPED and appears to work part-time for Drink Monday. 

Overall, the Drink Monday team is extremely well-prepared to grow and scale a memorable DTC brand, and their extensive experience is reflected in the company’s excellent aesthetic and marketing content. The three co-founders have expertise as founders, have witnessed rapid growth at a leading DTC brand, and even have some experience in the alcohol industry specifically. Therefore, Drink Monday’s team score is very high. 

It’s perennially difficult for DTC brands to truly differentiate themselves, as their products are typically not strongly proprietary and consumers are liable to choose among several similar brands within a category. Drink Monday falls into this same trap. While the company’s flagship nonalcoholic gin product is very strongly branded with distinctive labeling and positive customer reviews, there are several other nonalcoholic beverage companies that also offer pretty labels and strong testimonials. In addition, many of these competitors offer several varieties of nonalcoholic liquor, from gin to tequila and whiskey. Drink Monday currently offers just one product — nonalcoholic gin — leaving consumers liable to become loyal to a different brand that can better serve their wide variety of tastes. Therefore, Drink Monday’s differentiation score is its lowest across all five metrics. 

Drink Monday launched its product less than a year ago and has already gained major traction. After an oversubscribed Kickstarter campaign, Monday Gin debuted in April 2020. It generated $1 million in sales after just 200 days and $1.38 million total between April and the end of 2020. Unfortunately, Drink Monday hasn’t shared full financial data from 2020, so all investors have to go on is topline revenue. It’s unknown whether the company is turning a profit. The company reports that each bottle sold generates a profit, but that assertion assumedly covers only COGS, not overall expenses. 

Outside of financials, Drink Monday is showing signs of long-term viability. The repurchase rate is 32%, which is much higher than average in e-commerce, and that repurchase rate drives a $172 customer lifetime value that is only expected to increase in 2021. The company also leads in site traffic and conversion rate among peers on Shopify. 

Drink Monday has done very well over the last nine months. However, 2020 financials aren’t available, and the ratio between marketing spending and revenue is an important missing data point. Therefore, Drink Monday’s performance rating is high but not quite as high as ratings in other areas.

Drink Monday’s biggest risk is its lack of product diversity. The company has been selling one product and one product only for nine months. While that product is doing very well, Drink Monday could be losing ground to nonalcoholic beverage competitors who are moving faster to introduce tequilas, whiskeys, and a variety of other liquors to better satisfy any and all consumer needs for nonalcoholic spirits. 

In addition, it’s not clear how much Drink Monday is spending on consumer acquisition cost (CAC) compared to lifetime value (LTV). The CAC:LTV ratio is a critical one for DTC companies, and all too often the ratio is unsustainable. If Drink Monday is spending too much to acquire customers, its performance might not be as rosy as it appears from 2020 revenues alone. 

Between these two risks, it could be too soon to tell whether Drink Monday can lead the nonalcoholic beverage category. 

Drink Monday generated $1.38 million in revenue in its first nine months after launch, and that figure is impressive enough to spur optimistic predictions about the company’s future. It’s not often that a DTC brand finds product-market fit so quickly. Drink Monday has clearly developed a brand and product that resonates with a growing segment of consumers interested in the sobriety and moderation trends. 

The company’s success is likely due to its deeply experienced founding team. CEO Chris Boyd and his two co-founders have very strong expertise in entrepreneurship, brand building, and ecommerce marketing, which is reflected in Drink Monday’s beautiful website and packaging and its strong performance on Amazon. 

Drink Monday is planning to launch an additional product line — nonalcoholic whiskey — in coming months and also has its eye on premixed, canned mocktails featuring its nonalcoholic gin. Introducing these new products to a loyal, frequently-repurchasing customer base will likely create more value very quickly, positioning the company even better for a potentially lucrative exit in the next two to three years.

Americans of all ages are realizing that it’s no fun to wake up with a hangover and that traditional alcoholic beverages are packed with sugar that doesn’t help the waistline. They’re more and more interested in reducing their alcohol consumption or eliminating it entirely, aided by a growing selection of nonalcoholic beverages that mimic boozy standards without the alcohol content and calories. 

Drink Monday is at the forefront of this no- and low-alcohol trend. The company has developed a product that a full third of customers like so much that they repurchase, and buzz around Drink Monday’s beautifully-branded launch drove $1 million in sales in just 200 days. All of this progress was spearheaded by Drink Monday’s deeply experienced founding team, which is leveraging their expertise in startups and ecommerce to pilot the company toward profit and an eventual exit. Therefore, Drink Monday has been rated a Deal to Watch. 

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