SB meets… Mark Livings, Lyre’s CEO

The CEO of non-alcoholic ‘spirit’ Lyre’s tells us about how he built a ‘pandemic-proof’ business and his ambition to put the brand behind every bar in the world.

Lyre’s is now valued at more than £100 million (US$138.7m). What has led to the company’s huge growth over the last few years?

“There’s a confluence of factors. The non-alcoholic ‘spirits’ sector is a black swan event in the consumer goods category. I don’t think we’ve seen anything as disruptive in beverage alcohol since Bacardi Breezers back in the 80s.

“The second thing that we’ve done is we’ve structured our business from the beginning to be global. We didn’t take the usual pathway of sending it into our own market and trying to make it work in one geography and then scale beyond that; we knew that we wanted to be global.

“Thirdly, we’ve built the business like a Silicon Valley tech startup. It’s filled with absolute rock stars that are enormously capable, professional and autonomous. I’ve got the Navy SEALs of the beverage industry in our team.”

You’ve had a number of crowdfunding drives. How much funding have you raised and what will you use the funds for?

“The first fundraiser was a small family and friends round of £1 million [US$1.4m]. The second was a seed round and we raised £9m [US$11.5m], and we’ve just raised £5m [US$7m] in our third round, so it’s a total of £15m [US$21.1m].

“The most recent round was a bridge round, simply because we’re growing faster than expected. We need a little bit more capital to deal with that growth and to get on top of global supply chains right now, which have been particularly brittle. We need to build our inventory and availability in our markets, and ensure that we can keep enough product in line with the growth that’s happening.”

Will you launch further fundraising drives?

“We fully expect to do one more major round, most likely next year at some point.”

How much would you be looking to raise?

“Depends on the business performance. I fully expect a Series B quantum, so anywhere from £25m to £35m [US$35m-US$49m]. It certainly depends on if we continue to see this exponential growth. And if we do, we may need to raise slightly more just to continue to deal with it. We’re stretching our production capabilities already, so that’s probably the one thing that could hold us back.”

Are you looking to build your own production sites?

“The great thing about how we make our product is we can use third-party co-packing. We currently manufacture in four locations, two in the UK, a US site and an Australian site.

“We’re looking at additional locations just to shorten the supply chain. It also gives us a much smaller environmental footprint by manufacturing in market and it takes a lot of the supply chain risk out that we’re experiencing in the world of 2021.

“In terms of our own site, we’ve definitely approached the point where we’re delivering volumes that brings it into the realms of possibility, and it’s something that we’re actively analysing at the moment.”

Are there any markets that you’re focusing on?

“We’re available now in 43 countries, and 60 within the next two quarters. We will be entering Africa and South America.

“We will be launching across the GCC this quarter. We continue to increase our footprint across Asia – we’re already available in five Southeast Asia countries and Mainland China.”

Are you looking to move into other drinks categories, such as low-alcohol?

“It’s a hard no to low-alcohol. It’s a confusing proposition for the consumer. We will continue to focus on spirits.

“We’ve launched our new ready-to-drink (RTD) products into Australia and the US, and will be launching into the UK and the EU in July this year.

“We have the Classico RTD which is our homage to Prosecco, the Amalfi Spritz which is our homage to the Aperol Spritz, and a G&T.

“We’re just about to launch an additional two RTDs: the Dark and Spicy, which is our take on a Dark and Stormy cocktail, and American Malt and Cola.

“We’re planning new products will suit the different flavour preferences of different parts of the world. There will be a raft of new product development over the next 12 months.”

How do you see the non-alcoholic ‘spirits’ sector developing over the next couple of years?

“Non-alcoholic ‘spirits’ will be equally as disruptive as non-alcoholic beer has been to beer. I think it will be equally as disruptive as plant-based milk was to traditional dairy, and plant-based protein to traditional animal protein.

“If you look at the total spirits category by value globally it’s a US$300 billion to US$350bn category. Within five years, non-alcoholic ‘spirits’ could take at least 5% to 6% of that, so I think it will certainly become a US$15bn to US$20bn category within the next five years globally.”

What are some of the challenges facing non-alcoholic ‘spirits’ producers?

“It’s extraordinarily difficult to make a high-quality non-alcoholic ‘spirit’. A lot of that is to do with how do we keep it stable in the bottle, and how it travels through traditional spirits supply chains.

“The second challenge is education and understanding. The third is that we’re in a pandemic and dealing with global supply chains is very difficult. That’s going to be challenging for anyone who has the ambition to scale at the moment – it’s very difficult to develop international markets.”

How has the pandemic affected your business?

“We were really lucky in a couple of ways. We accidentally built a pandemic-proof business. We didn’t have any offices anywhere; the business was entirely virtual from the beginning by design. We were a digital-first business so we put enormous amounts of our investment into building capability online.”

What are your priorities for the next 12 months?

“We want to see a bottle of Lyre’s behind every bar in the world. We wanted to be the most available [non-alcoholic ‘spirit’] in the world and we’ve already achieved that in under two years.

“We want to retain our leadership in taste, and we now have more than 200 international wine and spirits awards to our name, significantly outperforming every other non-alcoholic ‘spirit’ in the world.”