Becoming successful AF: A conversation with AF founder Lisa King

A timeless brand that is redefining the non-alcoholic beverage space.

In a world increasingly mindful of health and wellness, AF stands out as a trailblazer in the non-alcoholic beverage industry. Co-founded by Lisa King, AF has achieved remarkable success, particularly in the competitive US market, by making not drinking well, cool AF.

I caught up with Lisa recently to look forward to the company’s latest raise and back to exploring how the brand has captivated consumers and challenged traditional notions of drinking.

She offers invaluable advice for aspiring founders on global expansion, underlining the importance of confidence, authentic brand identity, and realistic capital planning. With a new launch in the UK and continued growth in the US, AF is poised to further redefine the non-alcoholic landscape.

Answers have been edited for length and clarity

Congratulations on the surging success of AF to date, what do you credit it to?

First and foremost, particularly with a product like ours, it’s taste. Everyone has had bad experiences with non-alcoholic products, so that was a huge barrier for us to overcome. We spent a lot of time perfecting the taste to make something that actually feels like you're having an elevated cocktail experience. Then, there's our secret ingredient, Afterglow, which delivers that spirit burn and warming feeling you get from alcohol. People are often surprised there’s no alcohol. It’s still really big because we're seeing lots of new launches in the non-alcoholic space, particularly in the US. People think it's just canning some water or flavors, but it's not that simple. The brands that have done well are delivering that full drinking experience. Afterglow is a trademarked ingredient, and we haven't seen anyone else with an ingredient that delivers the same mouthfeel and feeling, which we think is so important.

The other part of it is the brand. It’s so beautiful and hasn't changed its architecture since we first started four and a half years ago. It feels like a real heritage brand with a lot of timelessness, mixed with the modern, cheeky vibe of the brand name itself, AF, and how we bring the communications to life. We’ve had people stop by our stand at trade shows saying, "I don't even know what this is, but I just love the brand, so I wanted to come and find out." So, yeah, I think it's a really modern, fun, cheeky brand that anyone would be happy to be seen with.

Talk more about that. What are some of those elements of the brand that you add to that timelessness?

We were always clear that we wanted a global brand. Our drinks are manufactured locally where they’re sold, so we never wanted to be tied to a specific heritage back in New Zealand. The brand very much stands on its own. We use classic marble patterns, which we create ourselves using the old printmaking method of oil and water, making original prints. We took a lot of inspiration from perfumes, with the classic box, like Chanel No. 5, and similar fonts. We worked with Arch Macdonnell, one of the best graphic designers. There are subtle cues to timelessness and what you'd expect from a really old brand, like the little gold emblem on the front. But if you actually read it, it says "established AF," with no date. Design is funny because it's all the little elements that add up to a person's impression of it. We get so much feedback, particularly in the US, as they have quite a different aesthetic. Some packaging there looks like it was done in PowerPoint.

One thing that strikes me about AF as a brand is that you manage a clever balance of promoting health without being scoldy - can you speak to that?

Absolutely. We are not a judgy brand whatsoever. Early on we looked at other categories like smoking. You could talk to people all day long about how smoking is bad for you, and people will still smoke. People don’t want to be preached at or judged. So, we’re very, very conscious that you’ll never see in our communications us talking badly about alcohol, or saying "you shouldn't do this or that." We took the opposite approach: actually, if we just made it so freaking cool and sexy and fun to not have to have alcohol, and show people doing the same things – partying, socializing, and just having a really great time, but they just haven’t spent on alcohol – if we could create this aspirational world and make people want to be a part of that, then that’s how we’re going to bring them in. People aren’t going to stop drinking; it’s been around for how long? I think that’s why we will never talk about or try to tell people not to drink.

How do you see the movement in this sector over the last couple of years, and how has AF been intersecting with it?

I think it's become more socially acceptable not to drink, whereas before it wasn't at all, as you yourself experienced when you first stopped drinking. So, I think there's that. One of the things we try to do at AF is share stories of well-known people who have a different relationship with alcohol, and you kind of go, "Oh, Pharrell doesn't drink, and Bradley Cooper doesn't drink," and all these amazing people don't drink. More and more celebrities are coming out saying, "I'm not drinking now." So it's just become this more socially acceptable thing that's going on. And then now, there are better options. Five years ago, you couldn't really find anything in a bar. I remember going to a bar when we first launched and we're like, "What are your non-alc options?" They're like, "Oh, Red Bull." You're like, "I don't want to drink that all night." And so now, there are definitely more options, and we're seeing particularly in hospitality, they're catching up with what people are asking for. It's gone from something acceptable to something aspirational, which is such a good key shift.

What do you hope other founders take from the success of AF?

I think our biggest success has been being able to take AF to the US. It's such a huge market, and I think it's always felt really daunting for Kiwi brands. Not a lot of Kiwi brands have made it in the US, particularly in our space. So, one of the things that I'm getting a lot of Kiwi founders ringing me about is, "How did you get into the US? How did you go from 400 to 4,000?" I think when we went over to the US, you always feel like this little Kiwi, you don't know anything, you don't know anyone. And actually, not to say it's easy, because it's really difficult, but it probably wasn't as massive and daunting as I thought it was going to be.

Once you're in the market and you start making connections, just like in New Zealand, one person leads to another, and you start quickly getting the hang of how things work in the US. So, I think just approaching it with a little bit more confidence. Everyone always says, "Oh, you know, Kiwis, they're humble, and they need to learn to promote themselves a bit more and sell themselves like Americans do. They're so amazing at selling themselves." I actually feel like our humbleness is quite a refreshing change for buyers. I go to every single buyer meeting and I haven't changed; I'm not like a loud sell-sell-sell American. I think they actually appreciate that. We've had every buyer meeting be a "yes." You can get caught up in "Oh, you gotta be like this or be more American." I think us bringing a bit of that "Kiwi-ness" to the American scene can be a huge advantage.

Probably the other advice I'd give founders, particularly looking to expand globally, is it does cost a ton of money. I hear founders talking like, "Oh, we're not gonna do a raise," or "Oh, look, we'll just go over and, you know, maybe with a few hundred thousand dollars." And I'm like, no. If you want to get big, particularly in the consumer space, and you're dealing with retailers and all the different layers that they have here, it's going to cost you. You've got to be prepared for that. Ever since we launched in the US, we've been on a continual capital raise; it's nonstop. Particularly in a market like that, it takes a lot of investment to make noise and for your product to stand out and to reach consumers. So, while the opportunity is there and you can do it, be under no illusions about the challenge and expense of it.

Speaking of investment, where are you at now? You've got a raise coming up in New Zealand; wholesale investors can get in. Could you just talk a little bit about where you're at there?

Yeah, so we went into Target and Walmart last year, into 600 stores each. And then, thankfully, AF has performed, and they've doubled the number of doors. So just recently, we've expanded into 1,200 Targets and 1,200 Walmarts, which is awesome. We also just got ranging into Kroger, which is the largest retailer in the US. We're looking to get into 500 stores hopefully sometime this year.

Another opportunity that's come up for us is we were contacted by Tesco's in the UK last year. They are very ahead in the non-alc category. They have tons of non-alc beers and spirits, but surprisingly, they don't really have non-alc RTDs. They were realizing that the people coming into this category want more convenient formats and they want more modern, relevant brands. There was nothing like it in the UK. So we actually have ranging with them, and we're launching in the UK in October. That's super exciting for us to get into one of the bigger markets for the category, and again, with the opportunity to be one of the first in the non-alc RTD space.

We're raising money right now to fund the growth in the US and this new launch in the UK. We're looking at raising $2 million US to support these massive initiatives that are coming out for us. This is a seed round, so pre-Series A.

The opportunity here is to set up the next level of growth - where is that coming from?

We're wanting to really focus all our resources on the big opportunities, which are the US and the UK. Australia is definitely there, and we've been in touch with Woolworths a couple of times. They're wanting us as a strong second player to the market because it's dominated by one brand. But again, just in terms of the size of the opportunity for us, in the US, there are 40-odd thousand stores, and we're already at 4,000. Target has over 2,000 stores, and we're at 1,200. So there's just huge room for growth and other retailers as well that Kiwis have never heard of, which have thousands and thousands of stores. A lot of these retailers are now trying to catch up and get into the category, and we're definitely one of the leading brands there. So for us, that room to grow and prove ourselves makes this a really great time to come into it. We doubled our revenue in the US year on year, and we're looking to do similar again this year and also the following year.

What's the North Star over the next three years? Is it any different from your founding North Star? What does success look like for you?

When we started AF, from the outside, everyone saw it as an alcohol-free drinks company that we're selling cans of. For us on the inside and for the founding team, this company is all about changing behavior and that cultural change from where alcohol is the center of everything. We're actually having choices and not needing alcohol to be at the center of every social interaction and occasion.

We always said success would be amazing if you actually walked into a supermarket, and there were as many non-alcoholic options as there were alcohol. Because right now, it's walls and walls of alcohol, and this tiny little section of non-alc. It's getting better, absolutely. Or, when you go to a bar and on the menu, a lot of times, if they have any non-alc options, it's like the last two things at the back of the menu. Or when you're starting to see concerts and sporting events being sponsored by non-alcoholic brands, or not by alcohol brands, those to me would be the indicators of success. We want to make drinking so cool that everyone wants to be a part of it.

I think we're already starting to see that, and that's changed a lot faster than I thought it would. So, yeah, we're definitely on the right track, and we're getting there. And it's so nice when people email us and they're like, "Oh my God, I just love this so much. It's now so easy for me to be part of going out and being with friends and not feeling like I'm missing out because I've got something just as good."