Nosotros Tequila, started with two friends selling tequila out of their backpacks and became the largest self-distributing tequila and mezcal company in California at one point.
It was a Friday night in September 2015. Carlos Soto was sitting in a bar conducting a social experiment by watching what drinks people were ordering. His findings revealed two things: There were massive amounts of tequila-based drinks being consumed, and when patrons were asked which brand they wanted, the options were surprisingly limited.
But why was he at a bar conducting a secret survey?
Flashback to a few hours before, when Soto was in his class “Managing New Ventures,” at Los Angeles’ Loyola Marymount University. The professor had just given a specific assignment: Pitch a business idea unrelated to technology. Tequila was the first thing that came to mind.
“I saw so many millennials and young people coming in and ordering tequila, but there was a complete disconnect with the brands,” Soto recalls. “The brands were Patrón and Don Julio, and that was kind of the extent of it. There wasn’t really much else there.”
His experiment prompted him to look deeper into the industry, and he discovered tequila was experiencing quite a bit of growth. Today, nearly a decade later, it’s hard to imagine the tequila landscape as barren, but Soto says this was “before every celebrity and their mother had a tequila brand.”
“Casamigos wasn’t even a thing,” Soto adds, referencing the George Clooney-led tequila brand.
Origins of Nosostros Tequila
Soto, who was born and raised in Costa Rica, says he didn’t know much about the culture when he came to the U.S. on a college scholarship. “I’ve never been much of a beer person, and one thing that I really learned being here in California was tequila as a whole,” he says, adding that the large Mexican influence he was exposed to was most felt in the food and drinks.
“I fell in love with it,” he says, “and, really quickly, it kind of became my drink of choice.”
In December 2015, not long after that fateful class, Soto found himself in Mexico, visiting tequila farms and distilleries to better understand its production.
He found a small family-run tequila distillery in Jalisco willing to take a chance on a college kid with no resume in the spirits industry, and after using $2,500 of his savings, Soto returned home with seven different samples of a tequila blanco. He enlisted 13 of his family, friends and teachers to critique and rank them all. When the one Soto secretly favored was deemed a clear winner, the idea was cemented: He would create a tequila company.
Finding the right business partner
Soto knew if he was going to be successful, he had to have the right business partner.
Enter his college friend Michael Arbanas, who was a year behind him in school but was his equal in terms of vision, drive and talent.
Arbanas was interning as an analyst at a bank while earning a bachelor’s in finance, but he wasn’t happy.
“The reason why [partnering] was so attractive to me is we got to build the business from zero to one,” Arbanas says. He also knew that everything he was learning in his internship and finance classes could be applied to building a new business.
“The real kicker,” he says, “is we have very complementing personalities and skill sets,” adding that he and Soto “also spoke the same language in terms of business.”
Though Arbanas says he and Soto had no idea they would become so successful, he knew they had a big opportunity in front of them.
Nosotros Tequila enters the industry
“We saw the market shift,” he says. “We obviously didn’t have the funds that a lot of these big companies had to kind of do it quickly, but it was an industry that we loved, and it was very appealing.”
After Soto graduated in 2016 with a bachelor of business administration degree and a major in entrepreneurial studies, he went to Bank of America in Westchester and took out a personal loan for $18,000. It was just enough, he says, to make their first official batch of tequila.
Unfortunately, that was the easy part.
“We had tons of issues bringing back the bottles,” Soto says, pointing to incorrectly sized and placed labels. As a result, they didn’t sell their first bottle until January 2017.
That wasn’t even taking into account the regulations and hurdles to overcome in the alcohol industry both domestically and internationally since their product came from Mexico. They didn’t yet have name recognition and reputation in their favor, and perhaps the biggest detriment at the time was their age.
Soto says, because he and Arbanas were just 21 and 22 at the time, it was difficult to convince bar owners that they had a high-quality product. Their biggest challenge was convincing them to try it.
Arbanas remembers the challenge being made bigger by the fact that they were “selling out of our backpacks and not having enough product to leave behind at bars. So, if someone did give us the opportunity, we had to take it there and then.”
Despite a clear passion for their product and a genuine desire to build relationships and create community—the name Nosotros means “us/we” in Spanish—they didn’t have enough accounts. Soto’s visa was about to expire, and morale was running low.
Then, they heard about the San Francisco World Spirits Competition.
“We had $2,000 left in the bank,” Soto says. “It cost $500 to compete in that competition, so [it was] a little bit of a Hail Mary.”
Nosotros Tequila won the double gold, best tequila blanco of the show and best tequila blanco across all categories, which included major brands like Casamigos and Patrón.
“It kind of gave us that outside validation that we really needed as a brand,” Soto says. “Especially in our category of somebody else saying, ‘These guys have something that’s good.’ And from there, we were able to start setting these appointments…. It was just enough to kind of get that initial movement.”
Total Wine became their first major client, opening up the door to places like BevMo!, Gelson’s and Bristol Farms.
Leaders in the tequila industry
At one point, Nosotros Tequila was the largest self-distributing tequila and mezcal company in California. The brand was awarded $1.5 million in funding led by NewBound Ventures and valued at $40 million. Arbanas and Soto were named Forbes 30 Under 30 in 2023 and have expanded from just the two of them selling from backpacks to a staff of 26 selling in seven states.
Now, as leaders, they have more leverage to make decisions that matter. This means choosing to work with Citlali Ovalle, one of the few female master distillers in Mexico, at the women-run and -led Destiladora Del Valle distillery in Tequila, Mexico, co-owned by Celia Maestri, who is dedicated to promoting women in the spirits industry. They use 100% recycled glass bottles, corks made of sugarcane and labels made from agave fibers left over from the cooking process.
Much like the tequila they make, whose plants take years to mature, the profound changes that happen with time are realities they understand quite well. So, too, is the human element involved in the entire process, and it’s something they’ll never sacrifice in favor of volume or geographical reach. For them, the people part of tequila—the nosotros—is what matters.
“We didn’t start this yesterday, and we didn’t start this with $10 million,” Arbanas says. “When I get the privilege to talk to people [who] run restaurants or people [who] make cocktails, that’s the biggest thing I try to hit home.” He knows they’re serving up something far more valuable than the big-dollar brands by differentiating themselves because they prioritize “human capital and hiring good people—and just being good people.”
This article originally appeared in the July/August 2024 issue of SUCCESS magazine. Photo courtesy of Nosotros Tequila.
