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I Will Drink To That: The New Agave Spirit that Gives Back

It’s Not Mezcal, It’s Not Tequila - It’s Xoma

Xoma is the US market’s first pulcatta beverage, a spirit derived from the agave plant, similar to Tequila or Mezcal. The flavor is not similar to either however. Xoma offers a fresh, creamy taste that drinkers can savor alone or in a cocktail. Xoma’s novelty goes beyond being the first of its kind in the US market. It is also produced using sustainable farming methods, and sales of each bottle support a cooperative farming community in Mexico preserving the ancient tradition of pulcatte production.

Uncovering Ancient Traditions: Distilling the Idea for Xoma

Xoma was founded by Iacopo Santini and Anthony Morano, both joint Wharton MBA and Lauder MA International Studies candidates. The pair met on the first day of school and bonded throughout their eight weeks abroad in Latin America over a mutual love for local, traditional gastronomy and pursuing a venture while at Wharton. After Anthony returned from a trip to Mexico with some bottles of pulcatte, he invited Iacopo for a blind taste test. And there was the aha moment: how can such a smooth-tasting agave spirit that is rooted in a social and cultural mission not be in the USA yet? The idea for Xoma was born.

So what is the story behind the brand? Prior to Wharton, Morano traveled across the world to document traditional food preparation methods, in the hopes of uncovering more sustainable approaches. In Mexico, Morano was introduced to a farming cooperative organized to empower the local farmers and the community. The farmers from the coop, leveraged milpa farming. Milpa farming is a pre-Colombian agricultural method for growing maguey, corn, bean and squash on one piece of land. By growing multiple plants, versus just one, the nutrients in the soil are not depleted and the land is able to remain arable without the use of harmful pesticides and fertilizers, for longer. One of the initiatives of the cooperative was the preservation of farming the maguey, or agave, plant. The plant, grown throughout the Central American plateau for thousands of years, has been leveraged for food, medicine, building materials and more. One strategy to promote the maguey plant was the distillation of it into a spirit called pulcatte. Inspired by the preservation of tradition, sustainable agricultural methods, and the support of the local farmers, Santini and Morano partnered with the cooperative to help them to commercialize pulcatte in the US market. The pair created a brand for the new spirit in the US: Xoma.

Mixing It Up: How Xoma Stacks Up Against the Competition

According to IBIS World Reports, the global spirits market generated $114.8B in 2019. While growth in the market is sluggish, Xoma captures three positive trends in the space that better position the spirit brand for success. First, Xoma seems to have launched at the perfect moment, as there is currently a shortage of the blue agave plant used to make Tequila. Nielsen predicts that in its absence, “raicilla, bacanora, sotol and pulque will all find themselves thrust into the spotlight” this year.

Second, US consumers are increasingly embracing more new, authentic, and premium brands when making alcohol purchases. The latter constitutes “premiumization,” a trend whereby consumers switch from the brands they would normally purchase for more premium variants. Though growth in the spirits market is slow, some premium spirits are seeing double-digit growth in revenues. In addition, smaller craft brands are increasingly entering the market and being embraced by US consumers. According to Barron’s, craft spirit brands “are no longer a niche industry”. Similarly, Grandview predicts the global craft spirits industry to generate $80.4B in revenue by 2025, driven primarily by “consumers' growing preference for premium and authentic drinks with unique tastes.” Xoma is authentic, novel, and arguably premium given each batch is hand-crafted and artfully packaged.

Lastly, Xoma captures the consumer’s increased concern for the environmental impact and sustainability of the brands they purchase. Many food and beverage brands are responding to these concerns with social responsibility programs and by espousing socially-driven mission statements and values. Xoma goes beyond this by incorporating sustainable practices and social responsibility within their core business operations, from ingredient sourcing, through final production.

Feeling Spirited: Xoma’s Approach to Growth

So where is Xoma now? Despite the hurdles posed by the COVID-19 pandemic, founders Santini and Morano have made significant progress. They secured the licensing required to import and distribute the beverage and worked on the formation of the Xoma brand. Morano and Santini initially planned to market Xoma via live events hosted at local restaurants, capturing the hyper-local and community-oriented feel for the brand. Paused by the pandemic, the pair have quickly pivoted to securing a distributor and launching online DTC sales, making Xoma available to purchase in 32 states.

Xoma has already received recognition by winning the annual Contrary Capital Pitch Competition, the Jacobson Venture Award, and both the Wharton Innovation Fund Launch and Innovation Awards.

‘Next One’s on Me’: Xoma’s Path Forward

Though the beverage space is crowded, Xoma brings a brand new spirit to the market. This, coupled with their socially-conscious mission and experience-driven go-to-market strategy, differentiates the brand by appealing to increasingly socially-conscious consumers. Iacopo Santini and Anthony Morano have created a brand and business model that are compelling to today’s consumer to rally behind and support. Those looking to try this more sustainably distilled spirit can order a bottle on Xoma’s website, which is now available in 32 states. We look forward to seeing how Xoma’s path unfolds, and in the meantime - let’s raise a glass to Xoma!

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