The cult canned iced tea and vodka beverage, led by Clement Pappas and Matt Quigley, could bring in $300 million this year—in the golden age of ready-to-drink cocktails.
The backstory of Surfside, this summer’s most popular ready-to-drink spirits beverage, starts with trash, and particularly what vodka entrepreneur Matt Quigley noticed on the streets of Philadelphia—a lot of discarded bottles of iced tea.
“People just don’t naturally digest their surroundings enough,” says Quigley, the 41-year-old president of Pennsylvania-based Stateside Brands. “If you look at what is smashed on the curb and the street, it’ll tell you a lot about what the people of your city are actually drinking. And, in Philadelphia, that means it’s a ridiculous amount of iced tea. You’ll find Twisted Tea, yes, but you’ll also find Snapples, and a lot of other brands.”
Quigley brought the idea to his business partner Clement Pappas, Stateside’s 51-year-old CEO, and they set out to produce alcoholic iced teas and lemonades to compete with hard seltzers and other canned drinks, as better-for-you versions of the classic Twisted Tea or Mike’s Hard Lemonade. And now with Surfside in its third summer on the market, customers are crushing Surfside after Surfside, especially along the beaches of the Northeast coast. So far this summer, Surfside cans were the fastest-growing of any beer or ready-to-drink (RTD) cocktail, with an increase of $70 million in retail sales year-to-date. This month, Surfside hit the milestone of topping 5 million cases sold in 2025, besting what sold for all of last year.
“I’ve been on a flat-out sprint for three-plus years now, trying to keep pace with it,” Pappas tells Forbes.
Surfside is expected to sell as many as 12 million cases this year, which would mean hitting revenue of as much as $300 million. The RTD cocktail brand ended 2024 with $100 million in estimated revenue, and as the fastest-growing brand across all alcoholic beverages, according to NielsenIQ, hitting more than 360% sales growth compared to a year prior.
Those financials have made Surfside and its parent company Stateside Brands a hot acquisition target. Pappas and Quigley, along with their brothers Zach Pappas (a board member) and Bryan Quigley (Surfside’s chief sales officer), are the company’s four cofounders, and they have already turned down several acquisition offers this year and last. Pappas and Quigley tell Forbes they have no intention of selling.
“We’re masters of our own destiny at this point,” says Pappas.
He says they have bootstrapped the business this long and continue to be well-capitalized. The four cofounders together own 90% of the business, with the Pappas brothers as the primary investors, though no cofounder owns an outright majority. A few friends and family who invested early on make up the remainder.
Thanks to Surfside’s runaway success, Stateside is quite profitable, with estimated EBITDA margins of 30%. Stateside declined to comment on the business’ profitability and valuation. But Pappas confirmed he has reinvested much of its profits back into the business, which Forbes estimates is worth at least $500 million.
“We have the opportunity with Surfside to build ourselves into a company of substantial scale and distribution and all the things that go with that—all the marketing partnerships and the scale and the capital to launch other brands,” says Pappas. “But Surfside is our ticket to the dance. If we don’t succeed on that, we don’t have that scale and that distribution and these connections with the Costcos and Walmarts and Targets.”
Pappas grew up south of Philadelphia in Vineland, New Jersey, one of three sons in a family with a wholesale fruit juice business called Clement Pappas & Co., named for its founder, Pappas’ grandfather, an immigrant from Greece, who started the business in 1942. And the third-generation Pappas ended up taking it over as CEO in 1999. Then amid pressure from some family shareholders, Pappas architected the sale of the business for $400 million to Lassonde Industries in 2011. (It’s now known as Lassonde Pappas.)
After he and his family cashed out, Pappas stayed on for a few years as CEO but it “wasn’t working out,” he recalls. “I had never wanted to sell.”
And then in 2014 he was hosting his 40th birthday party at his townhome in Philadelphia and Quigley devised a plan to have his business plan crash it. A friend of Quigley’s was invited and Quigley, who grew up in Philadelphia as a hobby distiller in his parents’ basement before spending two years learning how to distill spirits at several apprenticeships, sent along with him a copy of his business plan for a Pennsylvania-made vodka company.
The mutual friend snuck the presentation in Pappas’ office, and Pappas called Quigley the next day and said if Quigley wanted to discuss it, he had better come over right away. With a fresh shower and shave, Quigley made it to Pappas’ house within 30 minutes. Two and a half hours and a few drinks later, they had hit it off.
“It was a fun first date, if you will,” recalls Quigley.
After another six months of development, the Quigley brothers signed with the Pappas brothers. As development continued, in July 2015 tragedy struck: Pappas and his wife lost their premature son, Peter. (The parents of two other sons, Paul and Joseph, created a foundation with the mission of curing preeclampsia by 2050.)
But Pappas kept moving forward. By October 2015, Stateside vodka started selling. The first full year saw under 600 cases of vodka sold. But they kept at it, and sales grew. And then by 2018, Stateside became the biggest spirit made in Pennsylvania with nearly 5,000 cases sold. The next year, sales grew nearly four-fold with more than 17,000 cases sold.
When the pandemic hit, Stateside was in a rare position, as one of the few manufacturers of vodka in the only state in the country that deemed alcohol a non-essential business. When the state government shut down its state-run alcohol retailers, it essentially forced out producers located outside of Pennsylvania. And so with limited competitors for roughly two months, Stateside sold its vodka made with 100% U.S.-grown corn to as many Pennsylvanians as they could. From March to June 2020, Stateside hit $2 million in sales.
“It was almost like prohibition and bootlegging. I mean, it was all above board,” recalls Pappas.
The push added $1 million to the business’s cash balance so Stateside purchased a new still to double its output and started thinking about what comes next.
In 2021 Pappas and Quigley made their first attempt at a canned drink with Stateside Vodka. But in 2022 Quigley’s iced tea idea struck, and after whipping up some samples in the distillery and getting Pappas’ sip of approval, they spent six months more of development and launched as Surfside at the end of 2022. By the end of its first full year, Surfside sold more than 1.3 million cases.
Pappas believes that we are now living in the golden age of canned spirits. The number of outlets that sell RTD cocktails has soared in recent years, as legacy companies have launched canned competitors, such Gallo with its High Noon brand. Legacy brands have leveraged their muscle to push convenience stores and smaller shops to carry the cans when they had previously only sold beer. And since White Claw and many others are made with malt liquor, the stricter regulations on spirits don’t apply. In eight states, including Stateside’s Pennsylvania, laws have also recently changed to allow canned cocktails to sell more freely.
“That window of opportunity wasn’t necessarily open 15 years ago and it probably will not be open 10 years from now,” says Pappas. “The flood gates are open and now you’re starting to see the laws catch up to where the consumer is. We can now be sold pretty much anywhere beer can be sold.”
A Man, A Can, A Plan: “We’re out in front of them,” says Surfside cofounder Matt Quigley of the RTD competition. “And when they think they have figured us out, we’ll change direction on them.”
Surfside
That’s why he and his team are moving quickly. In the past year, Surfside—with its no bubbles and 100-calorie marketing—has ambitiously pushed into all 50 states, thanks to a network of 198 sales representatives and distributors, in an effort to stay ahead of High Noon, Boston Beer’s Truly hard seltzer and its legacy business Twisted Tea as well as Anheuser Bush’s Cutwater spirits pouring money into hard tea and lemonade competitors.
“We’re out in front of them,” says Quigley, who is a surfer. “We will continue to make them second guess what they’re doing and we’ll make them overspend. And when they think they have figured us out, we’ll change direction on them.”
The competition is on, particularly because alcohol sales—from spirits to beer and wine—have been sluggish in the past, thanks to the rise of non-alcoholic and low-ABV drinks.
“Surfside has been able to establish a strong foothold out of the gate in these expansion markets which is particularly impressive given the increasing intensity of competition, both from national brands and the myriad of regional contenders,” says Dave Williams, the president of Shelton, Connecticut-based Bump Williams Consulting.
RTD cocktails like Surfside are one of the few areas that are actually growing in the alcohol sector, says Duane Stanford, the publisher of Georgia-based Beverage Digest. Drinkers are switching from flavored malt beverages like White Claw and legacy hard teas and lemonades: According to NielsenIQ, hard lemonades made with malt declined nearly 10% so far this year, and hard malted teas dropped over 4%, whereas the spirits-based hard lemonades grew over 96% so far this year and the hard teas grew over 168%. “Young consumers are moving to canned cocktails and they want flavor. Drinks like Surfside are leading this trend,” says Stanford. “The use of crafted vodka and big flavor have been part of the secret to its success.”
In the more premium segment of spirits-based lemonades and hard teas, Surfside is maintaining significant market share: In New Jersey, Surfside has over 76% (and it overtook leader High Noon this year as the top ready-to-drink brand in the state); in Maryland, it’s 75%; in New York, it’s 72%; in Virginia, it’s 68% and in Florida it’s over 50%. In all, Surfside currently has more than a 7.5% share of the $2.8 billion spirits-based ready-to-drink segment, up nearly 5 percentage points from last year.
As the brand expands farther west in only its third summer season, Pappas and Quigley are investing heavily in taking share in California, Texas and Illinois. Part of that strategy relies heavily on sports stadiums—Surfside is now sold in 12 Major League Baseball stadiums, as well as two NBA and 10 National Hockey League arenas, and more than a dozen university stadiums.
For now, Surfside’s position is strong. And the business, Pappas notes, is about to hit a major milestone: “I feel very fortunate that we’ve been able to scale this thing up so fast to the point where, this year, this company will be larger than my family business ever was, after being in the family for 70 years.”
