Altitude Beverages, a Bend-founded businesses, is changing its flight plan.

Co-founder Thomas Angel realized a few months ago that the original product line, a coffee beverage, wasn’t selling well. It is a crowded marketplace for a grab and go coffee beverage, even if the product is infused with turmeric, lion’s mane, chaga and CBD.

Like any good entrepreneur, Angel pivoted. This fall, he dropped the coffee line and focused on the mocktail line — non-alcoholic beverages infused with other ingredients like white tea for immunity, or gaba to create calmness or L=thianine for relaxation.

“We realized we were selling more of our mocktails,” Angel said. “I think it’s a combination of things. The category stagnated a bit since we started in 2020.”

The ability to chart a new market is a hallmark of a true entrepreneur, said Todd Laurence, Oregon State University-Cascades adjunct lecturer of business. Going into an adjacent market is a true pivot and happens all the time, Laurence said.

“The emphasis today on entrepreneurs is product market,” Laurence said. “The lean startup methodology for entrepreneurship actually has pivoting based in it.”

Angel’s actions have earned him recognition. Altitude Beverages was named a finalist in the Oregon Entrepreneurs Awards, which each year recognizes entrepreneurs in various stages of business growth. The competition is sponsored by the Oregon Entrepreneurs Network, a nonprofit that helps entrepreneurs start and scale their businesses and connects them to mentors and funding opportunities. Altitude Beverages was named a finalist in the development stage.

This is the second time Angel’s beverages have achieved acclaim in the entrepreneurial world. The first was in 2022 when his company was among the semifinalists in the annual Bend Venture Conference competition.

“Entrepreneurs across the state are visionaries and dreamers who bring brands, experiences and life altering products to market fueled by passion,” said Cara Turano, Oregon Entrepreneurs Network president and executive director.

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“Every Oregonian is lucky to have such a robust group of entrepreneurs that see into the future to fill a need while generating jobs as their companies grow.”

How it all started

Angel and his wife, Laura Melgarejo-Silva, founded Altitude Beverages in the middle of the pandemic. They came up with the idea of making CBD-infused beverages after the stress of traveling from China in the early days of the pandemic. Stressed, they turned to CBD, the cannabis compound that is usually derived from hemp and does not include the psychoactive ingredient THC.

First they decided to try it in their coffee. Then they added it to their non-alcoholic drinks featuring white teach for relaxation and CBD for calmness.

The coffee drink did well enough among consumers on road trips or camping, but for those wanting a cup of joe for their morning routine, Angel said he met the proverbial brick wall.

“We learned during the pandemic that people were making their specialty coffee at home,” Angel said. “People have a morning routine when it comes to coffee. People are habit based.”

It was with that knowledge that Angel decided that dropping the coffee line and pivoting to this mocktail line was the way to go.

The non-alcoholic beverage industry is growing, he said. According to NielsenIQ, a consumer ratings analytics company, the sales of non-alcoholic drinks grew 20.6% from August 2021 to August 2022.

Non-alcoholic spirits grew the most in that same time frame, according to Nielsen’s study.

“We want to be social and hang out with friends and unwind with a beverage,” Angel said. “There weren’t a lot of option. The non-alcohol category is mostly beer.”

Mocktails surge

The non-alcoholic market is attracting a lot of attention, said OSU-Cascade’s business professor Laurence. More events are including non-alcoholic options when serving beverages, he said.

“This happens all the time with young businesses that find a product market fit in a way and can find natural tail winds to make growth and expansion easier,” Laurence said. “It’s part of the lean start-up methodology. You need flexibility and constant adaptation to market forces.”

Altitude Beverages developed three flavors of non-alcoholic drinks: a Paloma, a Blue Hawaiian and a Mountain Mule. The drinks taste like a craft cocktail that’s layered, sweet and sour and they have CBD. The couple found that bars really are excited by their product, which opened up an entire market to them that doesn’t require shelf space or a grocery store.

Unlike the purpose built mixers that are high in sugar, contain one flavor note and designed to be paired with alcohol, the mocktails are designed to be drunk alone, he said.

And they can now market to liquor stores, cafes and restaurants for on-premise consumption.

“We’re seeing growth because people are becoming more health conscious now and it’s really being driven by people wanting to reduce their alcohol consumption,” Angel said. “People are looking to unwind. It’s a buzz without booze. Get a chill but without the alcohol.”

Retailers and bars are reaching out the business after hearing about the product, he said.

The product is produced in Portland now and is being distributed to about 400 retailers, bars and restaurants.

And come January, Altitude Beverages will launch a non-CBD version of its mocktails, Angel said.

“We’re looking to incorporate other functional elements — relaxation and calming effects in the production,” Angel said. “The functional portion is important.

“There are a lot of things you don’t know, that’s the journey of entrepreneurship. You have to listen to the consumer. Moments like this help validate your belief that you’re doing something that has real impact.”