Anheuser-Busch and Keurig are teaming up to make a $399 'Keurig of cocktails.' Here's how it works.

Madeline Stone/Business Insider

Drinkworks aims to be the Keurig of cocktails and other alcoholic beverages.

• Keurig and Anheuser-Busch teamed up to create a "Keurig for cocktails."
• Drinkworks, the beverage giants' joint venture, transforms pods of distilled cocktails into single-serve drinks such as gin and tonics, Mai Tais, and Old Fashioneds.
• At $399, the machine isn't cheap - but executives say the demand is there, and the cocktails pass our taste test.

As Americans ditch beer, cocktail culture is thriving. And, beverage industry giants are ready to cash in.

Keurig Dr. Pepper and Anheuser-Busch teamed up to found the joint venture, Drinkworks, which aims to be a Keurig for cocktails and other alcoholic beverages. Spouting out single-serve drinks such as gin and tonics, Mai Tais, and Old Fashioneds, Drinkworks aims to act as an automated bartender for home entertainers and other cocktail lovers.

Read more: Anheuser-Busch CMO breaks down how Bud Light and Budweiser are facing 'brutal facts' as millennials ditch beer

"You can get a cocktail in a can, but it's not the same experience," Drinkworks CMO Val Toothman told Business Insider. "Cocktails ... are a culture. It's an experience. You want something crafted, freshly made."

Business Insider recently had a chance to speak with Toothman and test out the Drinkworks "home bar." Here's what it's like to use the $399 cocktail making machine: