Lateral Capital Management, LLC

Acme Cider Beverages

Acme Cider Beverages (ACB) produces an all-natural, American-made incarnation of the “hard apple ciders” sold in Europe. With about 6% alcohol, it is a lightly-flavored, brewed product aimed at women and served over ice beer occasions. We did not invest in the company.

  • Assessment: The product was fine, but not ownably different from products in Europe or even wine coolers like Bartles & Jaymesâ; popular in the 1980s. The entrepreneur had extensive experience in this space, but we thought he set too high a valuation and wanted to pursue too many SKUs too early in a very crowded category with very limited shelf space.
  • Outcome: The Acme brand is now available in most U.S. states and is the U.S. market leader – in a declining category that turned out to be more of a fad than anyone anticipated. It was seen as creating an entire new category and sold to one of the 3 global brewers. But we believe it produced a very small return for investors; below the level which would have compensated for the risk of launching a new F&B brand, from scratch.
  • Learning: We really liked the entrepreneur here and he had previously been successful with a beverage business. That said, we didn’t agree with his “shotgun” approach to the category. We believe this held down returns to investors, because it loaded an distribution and product launch costs that “going deep” on one product would have avoided. But more broadly, we learned once again that the Food & Beverage business are probably not the best place for Early Stage investors.