“Naturally, when we launched, the vast majority of our sales were direct to consumer (DTC), but over time, as more and more people have found out about us, we’ve seen the B2B channel grow significantly as well. As far as plans for the digital side of the business, we’re just completing an overhaul of our website which includes some exciting new features, which nobody else in the market is doing. It will probably be launched by the time this interview is published, so you’ll see,” she explained.
In the summer of 2020, Ma co-founded Only Beverages with her business partner, Jonathan Der. In May of 2021, the business launched Only Vodka Soda, Hong Kong’s first 0 per cent sugar, 0 percent carb, naturally flavoured, premium vodka soda in a can, with 4.5 percent alcohol-by-volume (ABV) and 80 calories.
RTD beverages are pre-mixed spirits in pre-packaged form with a base spirit like vodka or whisky.
The alcohol segment was one of those categories that saw tremendous increases in sales during the height of the pandemic. Only Vodka Soda experienced “micro” cycles during that time with the constant ebb and flow of social distancing restrictions being lifted and then being put back in place.
“While Hong Kong is a saturated market in the sense that there’s no shortage of alcoholic beverages available, RTD products were still relatively unheard-of when we launched Only Vodka Soda,” she explained, adding that in Hong Kong, most of the existing products in the market were high in sugar and calories.
“Asia is a fascinating place, given the broad array of cultures we have on the continent. When we were starting, we definitely looked at what was going on in other countries in Asia, and found that the RTD market was more developed in some (i.e. Japan) than others, like Hong Kong. There are also wildly large differences in consumer preferences when it comes to both taste profiles and the desire for healthier alternatives to traditional alcoholic beverages.”
So, while the business did not have to deal with the challenges of introducing “yet another” product into a saturated market, they had to deal with other challenges. It came down to educating the Hong Kong market about RTD products, which is still a continuous challenge.
Ma credits the company’s DTC channel as a critical component during the country’s social distancing measures, as it allowed for company growth and introduced the products to a new legion of consumers. “Relatively liberal” regulatory frameworks around liquor sales in Hong Kong was a major catalyst for sales of Only beverages and the business could start selling their products immediately through their website, she said.
As a result, the company received more inbound requests from venues and event sponsors for stock once restrictions were lifted. There were also requests to expand on-premise activities to selective locations in line with the Only brand, an area that the company will focus on 2022 and beyond.
Developing a formula
Ma saw the trend of consumers gravitating towards hard or spirit-based seltzer categories in North America back in 2018, but she noted that consumers not only wanted products that were better for them, but more importantly, they wanted a drink that tasted good.
So the business gave their development partner very clear guidelines on the core product elements – only natural flavours and premium vodka – and the brand created a zero-carbohydrate product which also tasted amazing.
“With Only Vodka Soda, we were adamant from day one that our product would not be a compromise – we wouldn’t sacrifice taste or quality just for the sake of creating a health-conscious product,” she said. “We were involved at every step of the development process in Australia remotely from Hong Kong to ensure this aim was achieved.”
Only products contain no artificial flavours, preservatives or artificial sweeteners. They are also gluten-free, vegan and keto-friendly. These features along with the fact that the drinks are manufactured in Australia with premium ingredients puts the company a step above the competition. There are now three flavours available, namely tahitian lime, yuzu ginger and guava hibiscus.
When the time came for manufacturing, the developer shipped multiple samples for each flavour from Australia to Hong Kong. Blind taste tests among their friends were conducted to evaluate each variant based on a lengthy set of criteria, and the exercise was part subjective and data-driven.
“We spent a painstaking amount of time getting to the final version of our flavours, but as it’s clear from our customers’ reactions, we feel confident that we’ve succeeded,” Ma said.
Challenges and future plans
Only Beverages was not spared from the supply chain and logistical nightmares that have been a global scourge since the onset of the pandemic.
“One of our key selling points is that Only Vodka Soda is made in Australia from ingredients sourced there and elsewhere in the world. Having to coordinate that from Hong Kong was a challenge to begin with, never mind Covid,” Ma said.
“For starters, during our beverage development process, every time we create a new flavour, we need to have several Zoom meetings with our development partner in Australia, after which they courier rounds of samples up to us in HK for testing, then we give them comments, etc.”
At one stage, the business even ran out of stock faster than they had initially predicted and had to scramble to source ingredients from markets as far away as the UK to produce their next batch of products.
“The main lesson we learned – or were reminded of here – is to plan as far in advance as possible and try to account for the unforeseen,” Ma elaborated.