First Stage Investor

New Pick: A Sparkling and Refreshing Take on Non-Alcoholic Beverages

New Pick: A Sparkling and Refreshing Take on Non-Alcoholic Beverages
By Andy Gordon
Date September 2, 2021

Deal Details
Startup: TÖST
Security type: Crowd SAFE*
Discount: 0%
Valuation (cap): $12 million
Minimum investment: $150
Where to invest: Republic
Deadline: October 1, 2021

About a decade ago, a good friend asked me what makes a great food and beverage company. Here’s what I said.

It’s about standing out. The vast majority of consumer packaged goods (CPG) products get lost among the dozens or hundreds of items competing in the same space. Taste is important. But it’s not nearly as big a separator as brand is. A strong brand can be built on new or different use cases (or occasions). The food or beverage must be appealing, and its ingredients must also resonate. And brands are only as good as the trends that give them their opportunity. Enduring trends like healthiness or nutrition work well. And competing in terms of price doesn’t matter. 

My answer still applies today, though I’d update the list of trends driving CPG products to include simplicity, natural ingredients and sustainability. 

Not uncoincidentally, a couple of my recent CPG recommendations have most of those qualities. Ayoba, which makes South African-style jerky called biltong, is healthy, nutritious and low on sugar. And it competes on the premium end of the jerky market. 

Another recent recommendation, Genius Juice, also operates in the premium part of the market. It has a lot of use cases — meal replacement, snack, thirst quencher, pre-workout treat and breakfast food. It’s also highly nutritious and made from natural ingredients.

But TÖST checks off every single box I mentioned so many years ago. TÖST is the latest in a bumper crop of superb CPG companies raising money via crowdfunding. The company makes a great tasting non-alcoholic sparkling beverage. It comes in two flavors: TÖST and TÖST ROSE. Both are delicious. 

Let’s go through my investment criteria one by one and see how TÖST checks all the boxes. 

A Sparkling Performance

Brands are not built overnight. And TÖST has been around since 2017. It’s had time to construct its brand — and it’s done an excellent job. 

TÖST has carved out a unique position built on a beverage that is sophisticated, yet simple. It’s perfect as a non-alcoholic champagne substitute to celebrate the important occasions in life. And it’s equally suitable as a refreshing drink you can enjoy in front of the TV. 

There are plenty of non-alcoholic beverages out there. But none like TÖST. The company rightly says it’s occupying a “niche of its own making.” It’s a premium brand, but not so premium as to render it an overpriced once-a-year kind of drink. 

It’s a fine line. But TÖST nailed it. Its revenue — which is doubling every year — is proof. This year, revenue should come close to $3 million. That’s nearly five times 2020’s revenue. Next year, the company expects sales to hit $9 million. 

Right now, TÖST products are in 24 states and seven countries. And it’s adding more states and more countries every month. 

A surprise winner for TÖST is Iceland. The country loves its beverages. Iceland’s two biggest grocery chains carry TÖST products, and bottles are flying off the shelf. TÖST expects sales in Iceland to reach $400,000 next year. 

TÖST’s original beverage includes white tea, cranberry, blue agave, ginger, citrus extract, citric acid, natural flavors, quinine and, of course, carbonated water. It’s low in sugar. And, lest you forget, it has no alcohol. What’s more simple than that? 

TÖST operates at the high end of the market. Its 750ml bottles go for about $8.99, though prices vary by region. The cost is more at places like New York City and Los Angeles and less at places like Maine and Vermont. 

TÖST is not trying to undersell other non-alcoholic brands. As a matter of fact, the company’s climbing revenue suggests that it’s found product/price fit. Though several of TÖST’s distributors are not convinced. They believe TÖST’s beverages can be sold at a higher price without denting demand.  

That demand, by the way, is bolstered by a couple of strong trends emphasizing health and wellness. More than 30% of Americans don’t drink alcohol. And more than 50% want to reduce their alcohol intake. 

There are some decent non-alcoholic beverages out there. But not for special occasions. A can of seltzer, bottle of water or glass of orange juice simply doesn’t measure up. 

The need to fill this gap has become so obvious, I’m convinced that if TÖST were not doing it, another company would be. There’s no higher compliment paid to a company than the rueful plea, “Why didn’t I think of that?”

What’s Next

TÖST has made all this progress on a bare-bones budget. Nearly all its growth has been organic and inbound — meaning customers are coming to them, not the other way around. And it continues to make significant headway. It’s increasing sales not only in Iceland but also  Korea, Australia, the Netherlands, Portugal, Iceland, Canada, the Bahamas and Niger. Singapore goes live this month. Japan will be coming on board in 2022. Several other countries have shown interest, including the United Arab Emirates and Italy. 

It recently signed with a major distributor to cover all of New England. It’s also signing up bigger accounts elsewhere. It’s steadily increasing velocity in Whole Foods, Wegmans, Fresh Market, specialty grocers, top restaurants and hundreds of independent single and multi-store customers.

And there’s more! TÖST’s next big target is California. BevMo! — a large specialty beverage retailer on the West Coast — now carries its beverages. Using the money from this raise, it will also target Chicago, Austin, Miami, Charleston, Seattle and Toronto. It plans to beef up its sales team and increase ad spend and money for marketing, especially for direct to consumer (DTC) sales. Right now only one-third of its sales is DTC. TÖST wants to increase that to at least 45%. 

Besides its slew of marketing initiatives, the company also wants to introduce new flavors for both bottles, a new line of canned beverages and 250ml bottles (this month) to complement its 750ml bottles. And at some point, TÖST wants to develop alcoholic products.

If TÖST does half the things it wants to do over the next 12 months, then its goal of achieving profitability in 2022 is well within reach. The strength and versatility of its brand is the key. And what’s stronger or more versatile than a brand that is coveted by both the Met and Coachella? 

The non-alcoholic beverage space is still new and fairly small. But for TÖST, it’s absolutely the right time to make a brand that can grow along with this burgeoning industry.

How to Invest

TÖST is raising up to $1.07 million on Republic. If you don’t already have a Republic account, you can sign up for one hereOnce you verify your account and are logged in to Republic, visit the TÖST deal page

Then click the blue “Invest in TÖST Beverages” button. Enter the amount you want to invest, starting as low as $150, and proceed through the required steps. Be sure your investment is confirmed, then you’re good to go.

*NOTE: The security you will be investing in is a Crowd SAFE. A SAFE is a Simple Agreement for Future Equity. An investor makes a cash investment in a company, but gets company stock at a later date, in connection with a specific event. The Crowd SAFE is a modified SAFE that is better suited for crowdfunding.


This opportunity, like all early-stage investments, is risky. Early-stage investments often fail. TÖST might need to raise another round of funding in a year or two, if not sooner.

If it executes well, this shouldn’t be a problem. But that’s a risk worth considering when investing in early-stage companies. The investment you’re making is NOT liquid. 

Expect to hold your position for five-to-10 years. An earlier exit is always possible but should not be expected.

All that said, I believe TÖST offers an attractive risk-reward ratio.

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