CEO Kevin Selvy aims to take the concept of a spirits portfolio into the craft sector.
The company’s first acquisition, gin-focused Lee Spirits, was started by cousins Ian and Nick Lee in Colorado Springs in 2014. It outgrew its second location — a speakeasy named Brooklyn’s on Boulder Street — and moved production 20 miles north to a onetime auto shop in Monument in 2020. The bar remains open in downtown Colorado Springs.
“I just got to know Ian when we’d be out working various trade shows around the world,” says Selvy. “I immediately was just taken aback by the quality of their products and his passion and insight. When I set out to start my own spirits company, I immediately thought of Ian.”
The ensuing conversation led to the formation of Sonder Libations and its acquisition of Lee Spirits in spring 2021. “We said, ‘What does a partnership really look like?'”
The result — ” the market’s first independent craft spirits portfolio” — defies industry norms by focusing on “middle-tier” brands, says Selvy. “Think of what Diageo Brands does or what Proximo does. We replicated that model on a micro level.”
With COVID-19 in full swing, the tasting room in Monument closed soon after opening, but has reopened in 2021. The distillery pivoted to canned cocktails in response.
“Last year, they started getting into the RTD [ready to drink] game,” says Selvy. “That’s really one of the things that started them on a very steep upward trajectory. . . . They became one of the fastest-growing spirits brands in the state, largely because they had new capacity come online but also the demand for not only their gins but also their RTDs was just through the roof.”
Beyond Lee Spirits, Sonder Libations has two more acquisitions finalized; the distilleries will be announced in fall 2021. “Our approach is we didn’t want to go into super-crowded categories and go head to head with big whiskey brands and tequila brands,” says Selvy. “We’ve put together a playbook of niche products, emerging products, innovative products that can come into accounts and fit specialized needs. . . . When we find really cool liquid with a really cool story, that’s what’s interesting to us.”
It follows that Lee Spirits will streamline its catalog by moving away from whiskey and embracing its gins (many of which are infused with botanicals and peppers), its Creme de Violette and other liqueurs, and its canned cocktails.
Production will remain at the distilleries in their home countries — which are not the U.S. “They have to be produced in certain regions of the world from a legal standpoint, so we can’t produce those in America.”
Canning of all three brands’ cocktails will take place on a Wild Goose line in Monument alongside Lee Spirits’ production, and all three brands will be available at the tasting rooms in Colorado Springs and Monument.
Selvy describes a 90-day campaign to triple the number of accounts for Lee Spirits in Colorado (from 600 to “nearly 2,000”) by early fall followed by launches in Arizona, Minnesota, and Texas. “I think the focus for us over the next six months is getting Lee Spirits to a place where they can catapult into being a national brand,” says Selvy. “What we’re really going to be doing for the next couple of years is figuring out how we tell the Lee Spirits story in markets outside of Colorado. Once we have that dialed in, we can take the brand from four states to all 50.”
The name of the company has a deep meaning, he adds. “The word sonder means ‘the realization that each random passerby is living a life as vivid and complex as your own,'” says Selvy. “The word sonder can be used to describe those subtle moments of connection that lead to deeper and more fulfilling bonds. That is why we named our company Sonder — because our products are complex and created to compose amazing experiences for people as they spend their own complex lives building profound relationships.”
Challenges: “How do we really understand the world coming out of COVID?” wonders Selvy. “It’s both an opportunity and a challenge. How do we build an on-premise business when it’s fluctuating so much and the uncertainty over the next six to 12 months is so great?”
“It’s an interesting time to have started a new company,” he adds. “It’s been a really challenging and interesting and rewarding experience to get something off the ground in such challenging times.”
Opening up new markets is another challenge. “Every state is basically its own country,” says Selvy.
Opportunities: “The opportunities right now are huge,” says Selvy. “I think the biggest one that excites us the most is we’re really the first people to do what we’re doing. There hasn’t been anyone who’s come in and utilized a portfolio strategy on a micro level. We’ll be able to maneuver quite quickly, we’ll be able to pivot on a dime, whereas it takes big portfolios more time to reshuffle their strategies.”
Selvy outlines a four-year plan to get to national distribution, and hopes exports will hit a target of 15 percent of sales. “In the next 12 to 24 months, we’ll be opening markets in Europe, Asia, and South America, and Canada and Mexico,” he says.
Beyond the initial three acquisitions, Sonder could expand and buy more brands, but that’s not yet set in stone. “We don’t want to be a brand-collecting portfolio,” says Selvy. “We don’t want brands that conflict with one another’s trajectories or agendas. We’re very conscious of that, but if there are other opportunities in the future that fit our broader strategy and enhance the brands we have in the portfolio, we’ll certainly entertain those. But we’re not looking to have 100 different brands.”
Needs: “Our biggest need right now is probably labor,” Selvy says. “It’s challenging to be hiring people right now.” He says he needs to hire about 10 employees by mid-September 2021.