Bottled cocktail maker Drnxmyth shutters
Fresh bottled cocktail company Drnxmyth has shut down due to wholesaler challenges and high operating costs.
Los Angeles-based Drnxmyth produces spirit-based cocktails with fresh pressed juices sourced in California, using high-pressure processing technology that stabilises the juice for up to eight months in a fridge.
It uses technology where consumers twist the bottom section of the 200ml bottle to release the juice, which is then mixed with the spirit. It can make two 100ml drinks when poured over ice after shaking the bottle.
In a statement on LinkedIn last week, founder Lawrence Cisneros announced that the business had “come to an end”.
The post on 6 August read: “Over a decade ago I had a dream to create a drink that I actually, truly, desired to consume – and upon further conversation with others – a drink that everyone else wanted as well: a fresh, craft cocktail in bottled form.
“No one had ever done it, and not even close. It seemed like a challenge worth putting my legal career on ice for.
“I pinched myself that we even made it to market, and that it turned out even cooler than originally envisioned.”
He added that the company had partnered with brands such as Diplomático Rum, Soto Sake and BarSol Pisco on creating products.
“I met so many people from every part of the beverage industry, travelled the world, and partnered with world-famous bartenders, DJs and other tastemakers,” he recalled on LinkedIn. “I can tell stories for days. I lived so many lifetimes I often forget what happened before.”
In a letter to shareholders and potential partners, he revealed the challenges facing the business.
He explained that the longer-term need to refrigerate the cocktails in stores was “difficult to acquire”.
To date, the company had approximately US$7 million in gross revenue over five years, with US$10m of capital invested over a decade. One of the company’s investors was AB InBev’s ZX Ventures arm.
Cisneros noted that the business had hoped to lower its margins eventually, however “pursing growth with low margins required significant financing”, which it could not secure without experiencing further growth.
He explained in the letter that while it had gained major backing from AB InBev, that the funds had “subsequently shrunk 95%” and it received no new investments.
“Additionally we found AB InBev to focus more internally on in-house operations owned by them, rather than continue supporting external businesses that may cut into their market share,” Cisneros continued.
“As the lead investors in the Series A round, ZX’s non-involvement thereafter significantly hampered our ability to grow and attract investment.”
‘Not sustainable in the long term’
Cisneros also noted how retailer and wholesaler opportunities “dried up” after the Covid-19 pandemic struck two months after its launch, leading to the business pivoting to e-commerce.
“Despite the high gross and contribution margins, resulting in US$1.7m and US$3.7m in revenues during our first two years, demand faltered as Covid waned and changes to Apple’s privacy setting made it more costly for us to advertise online,” he said.
Drnxmyth returned to physical stores but the business was “burning too much cash in 2022” and a year later the company decided to exit e-commerce marketing and start developing a cheaper bottle (which was finished in summer 2024).
However, while the move away from e-commerce “significantly decreased cash burn”, the founder noted this was “not sustainable in the long term” and impacted revenue and hindered financing opportunities.
Cisneros also explained how refrigeration was a hurdle among major US distributors.
He claimed that Southern Glazer’s and Republic National Distributing Company (RNDC), two of the biggest alcohol distributors, refused to add refrigeration to their warehouses despite others already doing so, citing Breakthru Beverage and Reyes as examples.
“Lack of wholesaler refrigeration reduces the potential for collaboration with major liquor brands, since this would require a co-branded Drnxmyth to be moved through the Southern/RNDC network,” Cisneros said.
In March this year, the business stopped selling cocktails in stores due to the cost of producing more inventory.
He concluded that the business now has a “pathway to lower the cost and scale profitably” and is “looking for creative solutions to this situation”.
Cisneros continued: “The company needs to be restructured to realign the incentives and hurdles to achieve financial success.”
In August last year, ZX Ventures sold Master of Malt, Atom Brands and Maverick Drinks back to their founder, six years after acquiring the businesses.
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