We're incredibly proud to announce that we've raised over $500k through StartEngine and momentum is strong! Approximately a month ago I shared a comprehensive update of our efforts this year and I think it would be wise to share with our prospective shareholders as well. Please read below on all the happenings with Acre Mezcal this year!
To Our Shareholders,
Very exciting times at Acre Mezcal! There has been so much happening with the brand, thanks in no small part to your investment. This is our first quarterly business update and it’s going to be quite comprehensive as there’s lots to talk about. I would anticipate that future update letters won’t be quite as long, but I would like to get everyone up to speed on what we’ve been working on.
As it stands we’re currently ramping our inventory up and preparing for a fresh push into LA, Vegas, Cabo and Australia. We have distribution partners in place everywhere but Los Angeles and are diligently working on filling that gap. To help our distribution succeed, we now firmly have in place our marketing and sales teams. They are preparing us for a strong entrance or re-entrance into our various markets.
As of today we’ve raised ~$385,000 for this project, with incremental increases every day and many months left until our raise is closed. We’re seeing an increase in the momentum of our raise and our partners at StartEngine have showed us that, historically, momentum really tends to pick up after approximately $500k raised. Our goal is still to raise the full targeted amount and we are confident we can achieve that goal, though we are prepared and budgeting for success under all scenarios. To the extent anyone feels comfortable sharing this opportunity with their friends and colleagues, we’d love the support! Please feel free to put me in touch with any potential future investors.
Q1 Update & Strategy
At long last the world (and particularly our home market of Los Angeles) is coming back to life! Restrictions on our restaurant partners seem to be lifting by the day and this is going to be enormously beneficial to us throughout the summer. As it stands, Q1 revenue was ~$33k, approximately flat with the average across 2020. Bear in mind that Q1 is seasonally the weakest quarter for liquor sales across the industry and for much of this time the market in LA was effectively shut down. With the city opening back up, orders from new distributors and our new sales staff we’re expecting dramatically better results in the quarters to come.
In the portfolio, we are making a strategic decision to reposition our double gold-winning Cenizo varietal as our main emphasis to on-premise accounts. It’s been a fan favorite of our customers, an interesting alternative to the typical espadín most restaurants will carry on their cocktail menu, and our producer has the ability to scale to many thousands of liters per month with us.
In the near term, our primary goal is to drive sales volume through cocktail menu placements and establish ourselves further around key accounts in our main markets. Cocktail menus are where customers and bartenders alike will really get to know our product, driving brand awareness and purchases in all other formats.
Our second primary goal is to find the right distribution partner for California. We want to be selective and patient as this is amongst the most important decisions our company will ever make and we will need a partner that shares our priorities and has the necessary market reach.
New Hire – West Coast Market Manager & Cabo Sales Representative
As we recently announced on StartEngine, we’re thrilled to say that we’ve brought on our first full-time market manager! Lauren Sanchez just started with us last week after 5+ years at The Back Bar Project and over a decade of industry experience. Her formal title is West Coast Market Manager and her primary responsibilities are going to include driving on and off-premise sales activities in LA, Vegas and any other West Coast markets we may enter, distributor management, and representing the brand at various trade and consumer events. Having now seen her in action first hand, I’m feeling extremely confident in her ability to expand our case volume and market reach dramatically.
Additionally, we’ve recently expanded the role of our wonderful Acre Resort mezcal expert, Jose Orozco. Some of you who have visited the resort may have met Jose via a free mezcal tasting while in Cabo. In addition to his nightly responsibilities at the hotel, Jose is going to be spending some extra time working with our distributor, Baja Wines, to expand our presence around major accounts in Los Cabos.
Over the last few months we have taken a hard look at all elements of our packaging and our overall cost of production. We’re making some key changes that we believe will both simultaneously improve our design and our margins for the long term. We’re going to have photos for everyone in a few weeks, but the key changes include:
- A more colorful, but still simple and refined label. With the current design we’ve realized that many customers don’t have the knowledge base to understand the differences between our 4 SKUs with all very similar labels. Color differentiation between the SKUs is going to make this easier and help us stand out more on a shelf or bar
- The new labels will have some of the same handwritten elements as well as fun product descriptions to give our consumers a fuller idea of what they’re drinking and tasting notes they can expect to experience
- Elimination of the string wrapping around the bottle. In speaking with Jorge, who produces our cenizo and packages all of our mezcals, the labor cost of applying the string is simply too high and with our more colorful labels, the white string doesn’t make quite the same impact on the eye. The money we’re saving here will be able to be funneled back into our marketing of the product.
- New (but still sustainable) label paper. As much as we love our agave fiber paper, we’ve realized that it brings with it serious problems around scalability, cost and quality control. We’re working diligently on a new sustainable paper source that we can use in the long term
We can’t wait to show you everything we’re working on here! Our marketing budget is largely going to focus on:
- In person & digital events
- Sales support
- Branded merchandise
- Promotions and giveaways in relation to the Acre Resort partnership
- Photo/video shoots for new content
Ultimately, we’re really waiting on the final packaging to come in to start rolling out many of these initiatives, but we’re very excited to finally have a real marketing budget to work with and will spend it wisely.
For those eligible for masks ($500+), totes ($1,000+), and copitas ($2,500+), we are going to wait until the fundraising is closed to begin shipping your goodies as we don’t know what quantities we will need as of yet.
For those eligible for bottles ($5,000+), please email me with your name and preferred delivery address. Depending on what state you live in, either I or our DTC fulfillment partner will be shipping the bottles. Please send an address where you or someone 21+ can personally sign for the package.
For ALL INVESTORS! – Your code to purchase bottles at https://www.acremezcal.com/shop-mezcal is [you'll have to invest to find out!]. 15% off of our product for life!
Consider Q1 the calm before the storm. Our journey is just beginning and we’re excited to be starting upon the high growth phase of our business. As we analyze the market, we’re feeling great about Acre Mezcal’s opportunity within the overall mezcal market and believe our truly high quality and differentiated product can compete with and succeed against anything else out there. Our team is passionate and committed to sharing our message with the world. And most importantly, we now have all of you as committed brand ambassadors! Please continue to spread the word on our project, word of mouth really does make a huge difference in this industry.
Thank you again for all of the support and please feel free to email me with any comments, suggestions or questions.