00:00Today on Forbes, how Surfside became the fastest-growing alcohol brand in America.
00:07The backstory of Surfside, this summer's most popular ready-to-drink spirits beverage,
00:12starts with trash, and particularly what vodka entrepreneur Matt Quigley noticed on the streets
00:17of Philadelphia, a lot of discarded bottles of iced tea. Quigley, the 41-year-old president
00:24of Pennsylvania-based Stateside Brands, says, quote, people just don't naturally digest their
00:30surroundings enough. If you look at what is smashed on the curb and the street, I'll tell you a lot
00:34about what the people of your city are actually drinking. And in Philadelphia, that means it's
00:39a ridiculous amount of iced tea. You'll find twisted tea, yes, but you'll also find Snapples and a lot
00:46of other brands. Quigley brought the idea to his business partner, Clement Pappas, Stateside's
00:5251-year-old CEO, and they set out to produce alcoholic iced teas and lemonades to compete with
00:58hard seltzers and other canned drinks, as better-for-you versions of the classic twisted tea
01:03or Mike's Hard Lemonade. And now with Surfside in its third summer on the market, customers are
01:09crushing Surfside after Surfside, especially along the beaches of the Northeast Coast. So far this summer,
01:16Surfside cans were the fastest-growing of any beer or ready-to-drink cocktail, or RTD cocktail,
01:21with an increase of $70 million in retail sales year-to-date. In July, Surfside hit the milestone
01:28of topping 5 million cases sold in 2025, besting what sold for all of last year.
01:35Pappas tells Forbes, quote,
01:37I've been on a flat-out sprint for three-plus years now, trying to keep pace with it.
01:43Surfside is expected to sell as many as 12 million cases this year,
01:46which would mean hitting revenue of as much as $300 million.
01:51The RTD cocktail brand ended 2024
01:54with $100 million in estimated revenue,
01:57and as the fastest-growing brand across all alcoholic beverages,
02:01according to Nielsen IQ,
02:03hitting more than 360% sales growth compared to a year prior.
02:08Those financials have made Surfside and its parent company,
02:11Stateside Brands, a hot acquisition target.
02:13Pappas and Quigley, along with their brothers,
02:17Zach Pappas, a board member,
02:18and Brian Quigley, Surfside's chief sales officer,
02:22are the company's four co-founders,
02:23and they have already turned down several acquisition offers this year and last.
02:28Pappas and Quigley tell Forbes they have no intention of selling.
02:32Pappas says, quote,
02:33He says they have bootstrapped the business this long
02:39and continue to be well-capitalized.
02:41The four co-founders together own 90% of the business,
02:45with the Pappas brothers as the primary investors,
02:47though no co-founder owns an outright majority.
02:50A few friends and family who invested early on make up the remainder.
02:54Thanks to Surfside's runaway success,
02:57Stateside is quite profitable,
02:59with estimated EBITDA margins of 30%.
03:02Stateside declined to comment on the business's profitability and valuation.
03:07But Pappas confirmed he has reinvested much of its profits back into the business,
03:11which Forbes estimates is worth at least $500 million.
03:16Pappas says, quote,
03:17We have the opportunity with Surfside to build ourselves into a company of substantial scale
03:22and distribution, and all the things that go with that.
03:25All the marketing partnerships, and the scale and the capital to launch other brands.
03:29But Surfside is our ticket to the dance.
03:31If we don't succeed on that, we don't have that scale and that distribution,
03:35and these connections with the Costcos and Walmarts and Targets.
03:39Pappas believes that we are now living in the golden age of canned spirits.
03:43The number of outlets that sell RTD cocktails has soared in recent years,
03:48as legacy companies have launched canned competitors.
03:52Legacy brands have leveraged their muscle to push convenience stores and smaller shops
03:56to carry the cans when they had previously only sold beer.
04:00And since White Claw and many others are made with malt liquor,
04:03the stricter regulations on spirits don't apply.
04:06In eight states, including Stateside's Pennsylvania,
04:09laws have also recently changed to allow canned cocktails to sell more freely.
04:15That's why Pappas and his team are moving quickly.
04:18In the past year, Surfside, with its no bubbles and 100-calorie marketing,
04:22has ambitiously pushed into all 50 states,
04:25thanks to a network of 198 sales representatives and distributors.
04:29In an effort to stay ahead of High Noon,
04:32Boston Beer's truly hard seltzer,
04:34and its legacy business, Twisted Tea,
04:36as well as Anheuser-Busch's Cutwater Spirits,
04:38pouring money into hard tea and lemonade competitors.
04:42For full coverage, check out Chloe Sorvino's piece on Forbes.com.
04:48This is Kieran Meadows from Forbes.
04:50Thanks for tuning in.
Comments