Found Treasure: Ublendit 2.0’s Seltzers, Tequila and Surreal Expansion

February 25, 2022 – The story of the upstart startup with the corny-yet-fitting name (UBlendIt Spirits) was already bordering on the preposterous when I came across it in early 2020. 

UBlendIt’s innovators, flavor makers and collaborating barkeeps were upending decades and decades of liquor tradition by refusing to stick to the status quo. When I spoke to industry pros, they rejected the premise. No way it’ll work, they told me.

Now UBlendIt 2.0 is proving those doubters wrong with an expansion that takes the plot from preposterous to bullish—and outright unbelievable. More on that in a minute.

First it’s helpful to review what Edible reported with a Winter 2020 print piece about UBlendIt and Santa Cruz-born-and-bred Westside Water Straight Bourbon Whiskey.

At that time Aptos entrepreneur John Spagnola had an idea for an app. Consumers could customize their own flavored spirit, design a label and have it home delivered. The problem was: Producers cannot legally sell directly to anyone without a liquor license.

So Spagnola started over, and began visiting with those with licenses—namely, bars and restaurants. They dug the idea, but also unleashed a torrent of gripes over how Big Liquor works.

As I reported, they told Spagnola: “Good quality spirits are hard to find at a reasonable price. Certain minimums are required for delivery and/or discounts from distributors. Costs for things like shipping and tax can be hidden. And the games distributors play—requiring purchases of less desirable spirits in order to access nicer whiskey options, for instance—get old quickly.”

Spagnola smelled opportunity. “It got me thinking,” he recalls. “Can we have a customer service experience that’s all about what the bars want?”

That birthed Ublendit 1.0. By carefully vetting all the options for the purest base spirits available from big and experienced producers like J.B. Thome and Midwest Grain Products, UBlendIt could take an affordable starting product, proof it down with quality distilled water, and apply thoughtful house recipes (and optional barrel aging) at their own distillery. 

Then they could take the resulting nectar and work directly with restaurants and bars, sidestepping distributors and their markups and sales traps. 

The first wave of development meant a groundswell of stylish spirits made by restaurateurs and bartenders specifically for their bars and restaurants. Think Catalyst Vodka at (yes) The Catalyst Club; Chuck Oliver Vodka at Number 1 Broadway in Los Gatos; and branded rum at Hula’s in Santa Cruz and Monterey, among many.

It also involved some UBlendIt house spirits like the Westside Water and Hideout Vodka, which have become big-value best sellers at Grocery Outlet and beyond.

Now to the present, and the second UBlendIt wave, which is a tidal in size. I went to UBlendIt’s new Scotts Valley headquarters a few weeks back to see it first-hand. 

The uptick in scale is stunning. They’ve traded their 6,500-square-foot production space, labs and office for 72,000 square feet, and it feels like more in person. 

Buoyed by a brisk round of capital raising, the multi-story complex sits in Scotts Valley not far from Sky Park, somehow hidden in the back corner of an industrial business park. 

It’s largely empty for now, but that’s changing fast. 

A brand new canning line, shrink-wrap machines, pressurized tanks for seltzers, 150 barrels for bourbon and blended whiskeys, tanks and totes of tequila, automated bottling machines, 40-foot-long containers of glass bottles, pallets of seltzer packs and a client tasting bar with a 50-foot redwood bar slab are already there. 

Next come more advancements including tunnel pasteurization machinery that expands what elixirs can be canned safely, and more advanced custom shrink-wrapping technology for a client, like a nightclub or bar, to have their own designs on canned mixed drinks.

That gets at another development that should go big for UBlendIt: better-tasting ready-to-drink (“RTDs” in industry speak) canned cocktails using the brands it has already built.

That includes a Bloody Maria with the new Tres Paraguas tequilas, which are sourced from the Jalisco Highlands and are becoming a fixture on shelves in Grocery Outlet. I tried some at the Scotts Valley facility, and they deliver a spot-on classic small-batch tequila quality—and bite—at a fraction of competitors’ prices. The añejo is even better, a steal at $30.

While this expansion is happening relatively quietly, the ramifications for spirit lovers will be loud and far-reaching. New distribution hubs in San Diego, Los Angeles, Sacramento and Las Vegas are already active or activating soon, so UBlendIt’s reach is growing like bamboo in a greenhouse.

In on- and off-premise venues, as UBlendIt enters its fourth year of sales, people are starting to take it seriously as a distributor. “It’s exciting to walk in and not feel like a tiny company that has one vodka and might go out of business,” Spagnola says.

Meanwhile, Hideout seltzers are halfway into the first month of availability in liquor venues around Northern California.

Back in Scotts Valley, plans are in place to add a cantina-beer bar-spirits tasting lounge on the loading dock. 

“What we’re always trying to do is keep to our original mission—to help bars, restaurants and retailers be more successful—now with more capacity to give clients and ourselves way more options for creativity, customization and…coolness,” Spagnola says.

As this is all happening, Art Mueller has gone from UBlendIt’s Santa Cruz sales point person to overseeing the UBlendIt benevolent eruption across the wider west. He puts the 2.0 action in perspective. 

“It all means we’re going to keep disrupting the industry and people are going to start understanding we can create a higher-grade spirit without breaking the bank,” he says. “That’s the key.”

More at hideoutvodka.com.