When its wholesale business dropped off at the beginning of the pandemic, it took about two weeks for Liber & Co. to shift gears and throw its weight behind selling directly to consumers.
That pivot has resulted in heightened sales, and now the Austin-based company making cocktail mixers is getting ready to triple its warehouse space.
Prior to March 2020, 70% of Liber & Co.'s sales came from wholesale. The pandemic flipped that script, pushing the business to sell more to consumers online, including through Amazon and Shopify.
"They say alcohol is recession proof," Liber & Co. co-founder Chris Harrison said. "If the bar down the road is closed, what are you going to do? You’re going to say, 'Well, I’m going to make drinks at home.'"
Liber & Co. was founded in 2011. For the six years prior to the pandemic, it grew revenue about 50% per year. But in 2021, it grew revenue 80%. Sales volume actually dipped last year, but the higher price point of consumer sales made up for it.
The move also helped profit margins. As Harrison explained, going the wholesale route means profits are split between Liber & Co., a distributor and a retailer. Shipping can inflate direct-to-consumer costs, but if Liber & Co. sells 100 bottles online as opposed to in store, the company will pocket higher revenue, Harrison said.
Since then, Liber & Co. has returned to closer to pre-pandemic sales patterns, with about 60% to 65% of business being wholesale. In 2022, the company's again on track to grow about 50% year-over-year.
But the experience of the pandemic opened new revenue streams that are sticking around — another example of a company adapting to difficult times and emerging stronger on the other side.
As a result, Liber & Co. has almost run out of warehouse space. The co-founders — Chris Harrison and Adam Higginbotham and Robert Higginbotham, who are brothers — plan to leave their 7,000-square-foot Northeast Austin facility and move into a newly built 21,000-square-foot space in Georgetown by year’s end or in early 2023.
Construction is slated to begin on the facility at 4045 Airport Road, near Georgetown Executive Airport, in the next few weeks and last four to six months. Troy Martin of NAI Partners was the company's broker on the deal.
That will mean much more space for producing the company's cocktail syrups, which come in flavors such as grenadine, toasted coconut and caramelized fig.
The space was cheaper than other options in Austin proper, Harrison said. Plus, industrial space is much harder to find in Austin. Industrial vacancy in the Austin metro tightened to 3.3% in the first quarter of the year, the lowest ever recorded rate by NAI Partners. The Georgetown-Round Rock submarket had the highest vacancy rate found by NAI in the region, at 6.5%, whereas Northeast Austin had 2.4% vacancy.
"In addition, we had to deal with the fact that many of the new industrial developments are designed for large, bulk space tenants and that the existing building inventory, especially in the core Austin area, is often being converted to more office heavy build-outs, or would require extensive reworking of the infrastructure in order to meet the requirements of a manufacturing group," Martin said.
These factors drove Liber & Co. to Georgetown even though its 11 employees live closer to the current facility. During the shift into the consumer market, marketing focus changed so Liber & Co. added more workers to the team.
Next for Liber & Co., the company will enlarge bottle size to 25 ounces, up from 17 ounces, which has been requested by bars. Additionally, Harrison teased the possibility of expanding into alcoholic beverages with a blend of liquor, bitters and other ingredients, although that plan has not been finalized.
A new bottle supplier hasn't been selected but Harrison said the company may stick with its current supplier in Mexico, as it makes for fast overseas shipping and is of high quality. Liber & Co. customers include a bar on the island of Nevis in the Caribbean.
