Kat Hantas, the founder of 21 Seeds, transformed a home hobby of infusing tequila into a $160 million brand, targeting moms. She started this entrepreneurial journey after switching from wine to tequila for health reasons. Hantas shares insights on overcoming industry challenges, the importance of storytelling in branding, and the unique approach of crafting tequila flavors appealing to women. Her strategic partnerships and innovative marketing not only disrupted a male-dominated market but ultimately led to a successful acquisition by Diageo.
Kat Hantas identified a gap in the Tequila market for women, particularly mothers, transforming her hobby into a successful business.
Navigating the complexities of tequila production, Kat secured a partnership with a woman-owned distillery to control product quality and scalability.
Targeted marketing strategies, including social media engagement and placements in retailers, were pivotal in driving rapid growth and sales for 21 Seeds.
Deep dives
The Birth of 21 Seeds
Kat Hontis transitioned from a career in film to founding 21 Seeds, an infused tequila brand designed to appeal to women, particularly mothers. After struggling to find a suitable alternative to wine due to its adverse effects on her health, she began infusing tequila with fresh fruits and herbs, initially engaging her friends with delightful home-brewed cocktails. Observing a trend where women were moving away from traditional alcoholic drinks, she identified a market gap for a female-oriented tequila brand. With her entrepreneurial spirit ignited, she set out to formalize her hobby into a legitimate business in 2018.
Navigating the Distillery Challenges
Launching a spirits brand like 21 Seeds involved navigating numerous complexities, particularly in sourcing and producing tequila, which can only be made in specific regions of Mexico. Kat and her partners faced significant challenges as they attempted to scale their production - equipment breakdowns and unsuccessful initial runs threatened their timeline. After discussions with various distilleries, they found a willing partner, a woman-owned distillery in Jalisco, ready to innovate with them, which included making necessary adjustments to accommodate the infusion process at scale. This partnership was crucial as it allowed them to control their product quality while navigating the obstacles inherent in the spirits industry.
Strategic Marketing and Distribution
To effectively market 21 Seeds, the founders focused on reaching women in places they usually shop, using targeted advertising on social media and collaborations with influencers to resonate with their audience. Gaining approval from BevMo, a major retailer, marked a turning point as it provided a significant platform for launching the product. The strategy included a comprehensive marketing plan that showcased product versatility and positioned infused tequila as an appealing choice for health-conscious consumers seeking alternatives to wine. The approach proved effective, leading to rapid growth in sales once the product hit the shelves.
Facing Competition and Growing Demand
As 21 Seeds gained traction, competition in the spirits market intensified, prompting Kat and her team to differentiate their product in creative ways. They leveraged initial successes, turning positive customer feedback and early sales into momentum with additional marketing efforts, including partnerships and social media campaigns. Notably, during the COVID-19 pandemic, the brand experienced significant growth as consumers turned to alcohol for comfort, and the team smartly increased their stock in anticipation of demand. By effectively managing their production and distribution, they transformed potential hurdles into opportunities for expansion.
Acquisition by Diageo
In early 2021, the momentum of 21 Seeds attracted unsolicited acquisition interest from major beverage companies, culminating in a lucrative offer from Diageo. The $160 million deal marked a significant milestone for Kat and her co-founders, allowing them to maintain influence over the brand as ambassadors while benefitting from Diageo's extensive distribution networks. This partnership not only provided the necessary resources for continued growth but also positioned 21 Seeds prominently in the competitive spirits market. Reflecting on their journey, Kat emphasized that diligent work, smart marketing, and timing were critical factors that contributed to their rapid success and ultimate acquisition.
Kat Hantas turned her home hobby of infusing Tequila into a $160 million business. Her story began when her nightly glass of wine started to give her headaches, and her doctor recommended she replace it with a distilled spirit, like Blanco Tequila. To soften its harsh taste, Kat infused it with fruit and herbs, and began sharing it with appreciative fellow-moms. She eventually realized that hyper-targeting to moms was the perfect way to break into the male-dominated Tequila business. In 2018, she recruited her sister and a friend to launch 21 Seeds, and despite multiple challenges, their mom-strategy paid off. Just three years after launch, 21 Seeds sold for $160 million to Diageo, one of the largest alcoholic beverage companies in the world.
This episode was produced by Carla Esteves with music composed by Ramtin Arablouei. This episode was edited by Neva Grant, with research by Olivia Rockeman. Our audio engineers were Robert Rodriguez and Gilly Moon.
