At a grand-reopening celebration at Stateside Live!, Stateside Vodka president Matt Quigley’s wife, Megan, grabbed his arm and beckoned to the crowd around them in disbelief.
Nearly half the revelers were drinking a Surfside, Stateside’s wildly popular take on hard iced tea, or a Super Lyte, the company’s latest canned cocktail.
“She goes, ‘What the hell did you guys do?’” Quigley recalled with a laugh.
The couple noticed an abundance of the colorful cans while walking around the Philly stadiums’ renovated bar complex, for which Stateside had recently bought the naming rights.
“It was just such a prideful moment of like … we’re here to stay,” Quigley said.
Just a couple years earlier, fellow cofounder and CEO Clement “Clem” Pappas looked around Citizens Bank Park to see as many Surfsides as Miller Lites in the hands of Phillies fans: “Holy s —, this is happening,” Pappas recalled thinking at the time.
At their massive new Center City headquarters last week, Pappas and Quigley said Surfside’s astronomical rise still feels surreal.
In 2015, the area natives founded Stateside Vodka in a distillery near Kensington with their brothers, Zach Pappas and Bryan Quigley. The company started selling canned vodka sodas in 2021. But they launched into a different stratosphere when they debuted their spiked teas and lemonades in 2022.
Branded as lower-calorie, better-for-you booze, the Surfside cans took off. The cofounders said they sold 200,000 cases in the first year, then 1.3 million in 2023, nearly 5 million in 2024, and a whopping 11.1 million cases last year.
The “slammable” 4.5% ABV cans, as Matt Quigley describes them, are particularly popular in the summertime, a three-month period that accounts for about half the beverage company’s retail sales.
So far this year, Stateside is on track for 70% growth in overall sales, and a 65% growth in Surfside sales, according to the company. That comes after a record year in which the company recorded 111% overall sales growth.
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As a private company, Stateside does not have to publicly disclose earnings, and executives declined to share specific sales figures.
While Surfside has accounted for about 90% of sales in the past year, the top executives are bullish on their latest invention, a sports-drink-inspired canned cocktail called Super Lyte. They said the new beverage had sold nearly 400,000 cases in three months, meaning it could outpace Surfside’s early growth.
“The initial response is way beyond our expectation,” Clem Pappas said. “It feels like another hit.”
Stateside is ascending despite a historic decline in drinking, with just over half U.S. adults saying they imbibed last year. Beer, wine, and spirits are decreasing in popularity. Ready-to-drink cocktails are the only major segment seeing consistent growth, and Surfside has been leading the pack.
The company has achieved this success without the backing of an alcohol giant like Anheuser-Busch InBev or Molson Coors, which together manufactures hundreds of brands.
Quigley, 42, and Pappas, 52, said they’ve been approached by nearly every big beverage company, but they have no interest in selling anytime soon.
“As long as you’re still having fun, I see no reason to hang up the metaphorical cleats,” Quigley said.
“I don’t want to sit on the bench. I want to be in the game,” Pappas said. “We still think it’s early days.”
Stateside keeps Philly at its heart amid national growth
In Stateside’s earliest days, Quigley recalled confiding in Pappas about a pipe dream: “If we ever get super successful, I want a sick office in a high-rise in Center City.”
More than a decade later, they have moved from a temporary office in Feasterville-Trevose, Bucks County, to a chic new headquarters at 11th and Ludlow Streets in Market East.
The company plans to stay put for at least 10 years, the cofounders said. For now, about 80 employees work there four days a week with room to grow.
On a recent day, the office was humming during a new-hire orientation. While everyday operations include the same mundane tasks required of any business, the top bosses pride themselves on keeping the vibes light. “We’re not selling, like, car insurance,” Quigley said.
The bright industrial-style space occupies 34,200 square feet across two floors. It is centered around a long bar with a backlit Stateside marquee, a replica of the one at the tasting room. Nearby, there’s an open lounge with couches, underneath a miniature Jumbotron. Ads for Surfside, Super Lyte, and Stateside rotate on the screens.
Office happy hours are a given.
“That’s part of the special sauce,” Pappas said. “We’re in the drinks business.”
Philadelphia has always been at the heart of the company. It’s where they landed their first partnership with the Phillies, which fueled Surfside’s rise. At Citizens Bank Park, the cans have been the top-selling spirit since 2023, according to Stateside executives, citing figures from concessions provider Aramark.
Across the city, the cofounders still run the 7,500-square-foot Kensington-area tasting room and distillery, the latter of which they hope to turn into an event venue.
The distillery has been outgrowing its space for a while. But the need intensified in the past year as the vodka’s retail sales increased 120%.
They attribute the boost in part to greater name recognition thanks to Stateside Live! They said they hope to move vodka production to a larger facility somewhere in the Northeast.
The cofounders have also stayed local: Quigley, a Fort Washington native, lives in Kensington, and Pappas, originally of Vineland, is in Haddonfield.
Stateside’s reach, meanwhile, has expanded far beyond the region. The company employs about 340 nationwide, up from around 30 in 2022, executives said, and they sell in all 50 states through a network of more than 200 distributors.
Across the country, Surfside has racked up 170 partnerships, including with MLB teams, music festivals, and colleges. Super Lyte has already acquired more than a dozen partnerships, too, including at Penn State, where they said it will be sold at Beaver Stadium this fall.
In many ways, the cofounders said, they’re trying to replicate the strategy that proved successful with Surfside at Citizens Bank Park: Connect with consumers somewhere where it feels only natural to grab a refreshing, familiar-tasting beverage.
“You’re at a hot baseball game,” Pappas said. “You got a hot dog. You got a soft pretzel. You got an iced tea” — or, rather, a Surfside.
Compared to seeing a new canned cocktail at a beer distributor, he added, “It’s more of an authentic, emotional connection.”
Surfside succeeds with familiar tastes
When customers first sip a Surfside or Super Lyte, the taste is likely familiar, perhaps even comforting. It’s similar to iced tea, lemonade, tea cooler, or Gatorade, drinks that for many have been staples since childhood.
That’s intentional, Pappas and Quigley said, and is one of the reasons they think their products have become so popular.
“If you remember your first beer, it was like, ‘Oh God, who wants that?’ It’s bitter. It’s foreign,” Pappas said. “It’s an acquired taste.”
But when it comes to these canned cocktails, “these are not acquired tastes,” he added. “They’re light. They’re easy.”
Quigley said he got the idea for Super Lyte after years of mixing vodka into Gatorade and throwing the bottles into beach bags on summer vacations. He recalled thinking: “I can’t be the only person in America that’s been doing that for a long time.”
The initial uptake of Super Lyte confirmed that, he said.
Super Lyte launched in March with four flavors: fruit punch, orange, lemon-lime, and blue chill.
Surfside now has 16 variations of iced tea, lemonade, iced tea-lemonade, and green tea. A 12-ounce Surfside contains 100 calories, 2 grams of sugar, and no carbonation, while a 12-oz Super Lyte contains 90 calories, no sugar, and no carbonation.
While the health risks of drinking and smoking differ, Pappas said he sees a parallel to the historic decline in the U.S. smoking rate amid the skyrocketing popularity of oral nicotine patches like Zyns.
In the alcohol industry, “we’re meeting what was previously an unmet demand,” he said. It’s “all the convenience and the alcohol level of [a light] beer, where you can drink a few of them and you’re not getting sloshed.”
Even younger consumers — who are least likely to drink alcohol, according to recent surveys — are gravitating toward Stateside products, with high sales in some college towns.
Pappas and Quigley said they don’t see drinking rates declining much farther. Instead, they predict an evolution in the market, with an even greater focus on ready-to-drink cocktails.
So Stateside’s leaders plan to keep crafting new products, they said, which is one of the reasons they have turned down acquisition offers.
“Big, publicly traded multinational companies just aren’t great at innovating,” Pappas said.
Stateside has now established “enough of the back-end capabilities to really compete pretty effectively,” he said, without losing “that entrepreneurial spirit” and the drive “to innovate and disrupt.”
At the moment, he said, they are working on several beverage ideas, none of which are ready for publication.
But it seems unlikely they’ll dabble in nonalcoholic drinks. As Quigley noted, “then it would just be iced tea.”
