Food and beverage startup Free Spirits is making nonalcoholic drinks for drinkers

Milan Martin says he is tapping into a brand new

customer set for his company’s nonalcoholic beverages: drinkers. Not teetotalers or recovering alcoholics, the traditional purchasers of nonalcoholic products, but those who like to drink alcoholic cocktails but feel over-served by today’s drinking culture. He wants drinkers in social situations to be able to order another drink, without the side effect of getting drunk.

“There was never once in my life, where the intention in an evening was to get drunk,” Martin said. “The intention was always to continue having a good time. You’re out in a great place with fun colleagues or friends and you’re out at a beautiful cocktail bar or at somebody’s house and when your glass is empty, and somebody’s like, ‘Hey how about another round?’ The the answer is always ‘yes.’”

Martin is the CEO of the Free Spirits Co., a company that produces nonalcoholic spirits ideal for mixing cocktails. Part of his goal is to tweak drinking culture so it’s commonplace on a night out for a drinker to have one or two alcoholic drinks, but after a certain point migrate to nonalcoholic cocktails.

Before founding Free Spirits in 2020, Martin was an over 20-year veteran of the advertising industry, but became overwhelmed by the outsized role alcohol played in entertaining clients and bonding with coworkers.

“It was a work-hard, drink-harder industry,” he said.

So he founded the company to give drinkers and nondrinkers alike an avenue to go out and enjoy cocktails in a more moderated way.

He initially bootstrapped the company with his own money, formulating the recipe out of a facility in Mill Valley. What began with online only sales has expanded into grocery stores like Safeway, Hy-Vee and most recently Walmart. The company has also opened its own manufacturing facility in Los Angeles and expects to do around $10 million in revenue within the next year.

The company has raised just under $1 million from angel investors so far and is actively fundraising to accelerate growth and eventually land a strategic partnership for distribution with a large alcoholic beverage company.

Part of what makes Free Spirits unique is its attempt to replicate the bite in alcohol, as opposed to simply trying to mimic the flavor of a whiskey or a gin.

It does this with a host of different flavorless spices that encourages drinkers to slow down when consuming the cocktail.

“If you take something on the Scoville scale like a jalapeno and remove its external flavors, at the core of it, is this key that we use in a concoction to replicate the burden of the bite of alcohol,” Martin said.

The bite is key to the selling point of Free Spirits. Martin actually encourages bartenders using the product to charge a comparable price to its alcoholic equivalent. Unlike the traditional virgin cocktail, which is essentially just juice, Free Spirits’ hard-to-drink nature gives it more of an adult quality that bars and restaurants can play to their advantage.

The company is riding a wave of popularity in nonalcoholic drinks thanks to evolving drinking behavior and ever more health conscious consumers. However the market is still relatively small with $395 million in sales between August 2021 and August 2022, according to Nielsen IQ, with nonalcoholic spirits only making up 1.3% of the market.

Martin is banking on alcohol-free spirits gaining traction and envisions a world where every drink on the menu at a cocktail bar will customarily have non-alcoholic spirit options.

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