An alcoholic beverage forming apparatus operable to dispense an alcoholic beverage having a desired flavor, proof, temperature, and volume mixes water and alcohol with a flavor medium to form an alcoholic beverage having a desired flavor that may be dispensed from the apparatus. The apparatus includes a capsule holder, a water supply reservoir and an alcohol supply reservoir. The reservoirs are operable to respectively supply water and alcohol to a mixing manifold of the apparatus to such that the water and alcohol are combined in the mixing manifold to form an alcoholic beverage mixture which is subsequently mixed with a flavor medium contained in an interior of a beverage capsule. A dispenser is operable to dispense an alcoholic beverage therefrom during operation of the alcoholic beverage forming apparatus.