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Credit to Author: Louise Matsakis| Date: Mon, 28 Feb 2022 12:00:00 +0000<\/strong><\/p>\n Louise Matsakis<\/a><\/span><\/span><\/p>\n To revist this article, visit My Profile, then View saved stories<\/a>.<\/p>\n To revist this article, visit My Profile, then View saved stories<\/a>.<\/p>\n In the summer<\/span> of 2020, Lauren Chitwood and her two cofounders, Abbey Ferguson and Lexie Lancaster Larsen, discovered their new company had a problem. A few months earlier, the trio had officially launched Spiritless, a nonalcoholic beverage brand based in Louisville, Kentucky. Its first product was Kentucky 74, a spirit with notes of caramel and vanilla that\u2019s meant to resemble bourbon. \u201cAll of a sudden we realized, and we didn\u2019t know who, but somebody had grabbed and purchased Kentucky74.com,\u201d says Chitwood.<\/p>\n At first, the URL only led to a blank page. But before long it began rerouting to the website of another nonalcoholic spirits brand called ArKay Beverages. Chitwood says she was familiar with ArKay from market research but was surprised and confused that it would choose to aggressively come after such a new business. \u201cAnybody who knew about Spiritless was a shock to us at that point, to be honest,\u201d Chitwood says.<\/p>\n She would later find out that the Kentucky 74 domain was only one part of an elaborate effort seemingly orchestrated by ArKay\u2019s founder, Reynald Grattagliano, to sabotage other brands in the fast-growing nonalcoholic spirits industry. Over the course of more than two years, multiple founders of nonalcoholic beverage companies have accused Grattagliano of buying up copycat domain names, sending out false press releases, and launching misleading ecommerce sites. The efforts appear designed to discredit his competitors or confuse customers into thinking they were somehow connected to ArKay.<\/p>\n \u201cI was quite strangely fascinated by what was going on,\u201d says Ben Branson, the founder of Seedlip, another nonalcoholic spirits company that was targeted by Grattagliano. \u201cHe thinks that everybody has copied ArKay.\u201d One of the first times Branson noticed Grattagliano\u2019s activity was in 2019, when a website appeared online under the domain name BenBranson.com. It featured a picture of Julius Caesar alongside a paragraph accusing Branson of spending \u201ctwo meticulous years\u201d ripping off ArKay.<\/p>\n In response to detailed questions from WIRED about these allegations, Grattagliano accused his competitors of publishing \u201cfake news\u201d because they don\u2019t acknowledge that ArKay predated them. \u201cMy competitors are upset at ArKay, because they cannot accept the facts that Arkay is the creator of the alcohol-free spirits category and concept,\u201d he wrote. \u201cArKay is not discrediting its competitors, Arkay is just putting the record straight.\u201d<\/p>\n ArKay was founded in 2011, several years before the current generation of nonalcoholic spirits brands that have flooded the market. But newer companies insist they took no inspiration from the company. Instead, they were responding to the changing tastes of consumers.<\/p>\n Over the past few years, whether for health reasons or to avoid a hangover, some millennials have begun drinking less booze<\/a>. In response, more alcohol-free bars<\/a> and beverage stores have started popping up. The market for no-alcohol beer, wine, and spirits grew in volume by 8 percent between 2016 and 2020, according to the research firm IWSR Drinks Market Analysis. During the same time period, the alcohol-free spirits category alone expanded by almost 300 percent in terms of both volume and value.<\/p>\n Some alcohol-free beverage brands have begun attracting investments<\/a> from major spirits companies, including a few of ArKay\u2019s targets. The multinational giant Diageo, for example, owns a majority stake in Seedlip and a minority stake in another brand called Ritual Zero Proof. \u201cIt\u2019s still almost like the Wild West. Everyone's really trying a lot of things. A lot of people are jumping on the bandwagon,\u201d says Duane Stanford, the editor and publisher of the industry publication Beverage Digest<\/em><\/a>.<\/p>\n Chitwood says she and her business partners got the idea for Spiritless a few years ago while they were running a marketing agency that worked with traditional alcohol brands. When they threw events, people would often ask if there were any nonalcoholic options available that were more interesting than, say, soda or juice. \u201cThat really was the aha moment for us,\u201d she says.<\/p>\n The three cofounders were living in the heart of bourbon country and decided that their first product would honor their state\u2019s signature potable. Kentucky 74 launched in spring of 2020, just a few months before Chitwood says she and her cofounders discovered the Kentucky74.com website. Afterward, they bought every domain they could think of related to Spiritless, hoping to prevent ArKay from getting to them first.<\/p>\n \u201cBut ultimately, we probably let it lie for a few months. It didn\u2019t feel like he was doing much,\u201d says Chitwood. Then Grattagliano appeared to take actions that were harder to ignore.<\/p>\n ArKay began sending out press releases thanking other nonalcoholic beverage brands for entering the market. \u201cIt does feel great to see that the idea of alcohol-free spirits is now a trend that is expanding worldwide,\u201d read one. Another syndicated by the Associated Press said that Grattagliano was a visionary leader with \u201csimilarities\u201d to Elon Musk. Sometimes the releases linked to websites about ArKay\u2019s competitors, like BenBranson.com.<\/p>\n The press releases were mostly trolling at first, but as the months went on they escalated to include elaborate fabrications. In one, ArKay claimed it had reached a deal to acquire Seedlip and Ritual. A spokesman for Diageo says the company \u201cwas never considering selling Seedlip, nor a stake in Ritual, to ArKay.\u201d<\/p>\n \u201cIt\u2019s like me putting out a press release that I've joined the Beatles and claiming credit for \u2018Hey Jude,\u2019\u201d says Marcus Sakey, a founding partner of Ritual. \u201cIt doesn't mean I can sing.\u201d<\/p>\n In September of 2021, another press release confusingly announced that Kentucky 74 was launching a new product called ArKay. It listed Kentucky 74\u2019s official business website as Kentucky74.com\u2014the imposter domain Spiritless had found the previous year. A follow-up press release said ArKay had taken \u201cfull control\u201d of Kentucky 74. Grattagliano says he holds the trademark for Kentucky 74; records show that he appears to have successfully registered it in Mexico in 2021, more than a year after Spiritless launched the product. Spiritless, meanwhile, holds the Kentucky 74 trademark in Canada and international markets. The United States Patent and Trademark Office listed applications from both as \u201cpending\u201d as of late February 2022.<\/p>\n \u201cThe moment where it struck me is when someone sent me a [release] that had been syndicated on Yahoo,\u201d says Larsen, one of the cofounders of Spiritless. \u201cI was like, \u2018What the heck, why is this guy talking about us?\u2019\u201d<\/p>\n Around the same time, yet another press release announced the launch of NOLOalcohol, a new ecommerce marketplace for alcohol-free spirits. It had supposedly been founded by Sylvie Grattagliano, Reynald\u2019s wife. (He says the couple is in the process of divorcing.)<\/p>\n The now-defunct site included products from a range of brands, but if you tried to add any of them to your cart, it would say they were out of stock\u2014and invite you to try one of ArKay\u2019s instead. Lancaster says that as the campaign intensified, she and her cofounders heard from several customers who thought they had bought Kentucky 74 but wound up never receiving anything, or receiving bottles that didn\u2019t look right.<\/p>\n A week after NOLOalcohol launched, Grattagliano announced that a nonprofit corporation he had started, called the American Alcohol Free Spirits Association, would start to \u201chold brands accountable\u201d for introducing nonalcoholic drinks that actually contained some alcohol. (Many of these brands are .5 percent alcohol by volume or less rather than literally alcohol-free; the Food and Drug Administration considers this to be a \u201ctrace amount,\u201d and views them<\/a> as nonalcoholic beverages.) The AAFSA soon announced investigations into Ritual Zero Proof and Seedlip, the latter of which it accused of \u201cIMPERSONATING REYNALD GRATTAGLIANO AND STEAL AWAY HIS IDEA.\u201d Branson says he did not impersonate Grattagliano or steal his idea.<\/p>\n \u201cIt\u2019s like me putting out a press release that I've joined the Beatles and claiming credit for \u2018Hey Jude.\u2019\u201d<\/p>\n Marcus Sakey, Ritual Zero Proof<\/p>\n The AAFSA website currently lists Reyland Grattagliano as its sole founder. One of its only members appears to be an ecommerce site called Drinksalikes.com, which sells knockoff versions of Kentucky 74, ArKay, Seedlip, and Ritual Zero Proof, claiming on each product page that it is \u201cnot connected in any way\u201d with any of the brands. The About page for Drinksalike.com includes a product photo of ArKay\u2019s alcohol-free vodka and says, \u201cArkay started in our kitchen lab more than a decade ago.\u201d Grattagliano acknowledged the site was his project but says, \u201cSo far we don\u2019t promote it.\u201d<\/p>\n Grattagliano may have come up with the concept for the AAFSA from his own experiences. In 2019, a trade group called the Scotch Whisky Association said it was investigating ArKay over how the company had labeled its nonalcoholic version of whisky, arguing that it could mislead consumers and damage the reputation of the category. ArKay later said it had changed its product descriptions to emphasize that they weren\u2019t actually made using the liquor.<\/p>\n Grattagliano has previously been accused of registering domain names associated with his competitors. In the late \u201990s, when he was working in the perfume industry, Grattagliano and the businesses he ran were sued by at least two competitors for trademark infringement, according to public court records. One of the affected brands was Calvin Klein, which accused Grattagliano of creating a knockoff of its Ck One fragrance line. (He later agreed to stop producing it.)<\/p>\n The other was Jean Philippe Fragrances, which settled with Grattagliano\u2014who has also gone by the name Reynald Katz\u2014after accusing him of purposely buying up domain names that infringed on its trademarks, including jeanphilippefrangrances.com and jeanphilippe.com.<\/p>\n