My "Hair of the Dog" Profit Strategy

By Matthew Milner, on Wednesday, January 3, 2018

Monday was a “hair of the dog” kind of day.

It was the first day of 2018, and my wife and I had been out late the night before drinking whiskey and champagne.

“Hair of the dog” refers to having a drink or two to lessen the effects of a hangover — and in this case, a Bloody Mary was our strategic choice.

There was just one problem:

One of my wife’s resolutions for 2018 was to be “gluten-free.” So none of the vodkas in our freezer (Grey Goose, Stoli or Absolute) would do the trick.

Thankfully, however, we found an excellent solution — and today I’ll show you how it could make 2018 a very profitable year for you.

“Gluten-Free” Catches On

Americans are increasingly embracing a gluten-free diet.

In 2017, sales of gluten-free products reached $16 billion. And by 2025, the market is expected to reach $33 billion.

In the midst of this mega-trend, millions of consumers are now seeking out gluten-free alcoholic beverages.

Historically, there hasn’t been a top vodka brand for gluten-free consumers.

But now a start-up is aiming to change that… 

Introducing: Devotion Vodka

The start-up I’m referring to is called Devotion Vodka.

Devotion has created the world’s first truly gluten-free vodkas.

In fact, its vodkas are the first in history to boast an official "Gluten-Free" label from the U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB).

The TTB is the official governing body that controls what's put on the label of alcohol bottles — so this is a major achievement.

To create its flavored vodkas, Devotion teamed up with Allen Flavors, the maker of Arizona Iced Tea. Its flavors include Tiki Tea, Blood Orange, and Coconut, which recently received a 90 Rating from Wine Enthusiast.

devotionvodka 

One Million Bottles Sold

Devotion has already sold over one million bottles through retailers including Whole Foods and Sam's Club, and has pulled in more than $13 million in sales.

It’s also won numerous awards, including the "Rising Star" Growth Brand Winner in 2014, 2015, 2016, and 2017 by the Beverage Information Group, and a “Top 50 Spirit” award by Wine Enthusiast.

In addition, it’s shown some impressive marketing skills, growing its Facebook followers to more than 100,000. (In comparison, Tito's vodka, which is a billion-dollar company, has only about 80,000 followers.)

Devotion is now aiming to become “the next household name in spirits.” Its short-term goal is to sell 100,000 cases in 2018.

To put that in perspective, Casamigos — George Clooney’s tequila brand — was selling about 100,000 cases per year when it was acquired by Diageo for $1 billion.

Indeed, it’s an excellent time to be in the spirits business — let me show you what I mean…

Have a Drink, Get Rich

Alcohol is one of the largest markets in the U.S.

Every year, it brings in about $200 billion in sales, with spirits making up about 37% of that amount, or nearly $80 billion.

And now, to capture more revenues and gain business efficiencies, the biggest spirits companies are buying out their competitors.

Since 2014, for example, Diageo has acquired three big tequila brands…

Jim Bean bought a Margarita mix called “Skinny Girl” for an estimated $100 million…

And Pernod paid $100 million to buy up the majority of tequila company Avion.

Thanks to these transactions, the founders and professional investors in those companies made fortunes.

But lately, ordinary crowdfunding investors like you are bringing home big profits from alcohol investments, too. For example, when craft brewery BrewDog was recently acquired for $213 million, investors like you took home profits of 2,765%.

Now Devotion is seeking to raise $1 million from investors like you so it can grow more quickly.

The valuation is $24.9 million, and the minimum investment is $150.

Should you consider an investment?

Pros and Cons 

On the “pro” side of a potential investment:

Devotion has carved out a leadership position in a big, fast-growing market…

It’s showing impressive sales growth…

And as you just learned, it’s playing in a market with lots of M&A activity.

But on the “con” side:

Liquor brands can take years to develop (for example, Tito's vodka came out more than 20 years ago, but it just started catching on recently)…

Devotion has about $3 million in debt and another $10.4 million in preferred stock that is “senior” to this offering (meaning, earlier investors would be able to take their profits before investors in this round)…

And finally, the company’s valuation is a lofty $24.9 million — which means Devotion would need to be acquired for about $250 million for investors in this round to make 10x their money. (10x is our profit target for any early-stage investment.)

Given recent transactions in the liquor market — including the $1 billion deal for Casamigos — a $250 million acquisition for Devotion isn’t out of the question…

But keep in mind: for an early-stage investment, a $25 million valuation is steep, and it might limit your upside.

To learn more about Devotion Vodka and this funding round, click here »

Happy “hair of the dog” — and happy investing!

Please note: Crowdability has no relationship with Devotion, or with any of the platforms or companies we write about. Crowdability is an independent provider of education, information and research on start-ups and alternative investments.

Best Regards,
Matthew Milner

Founder
Crowdability.com

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