Bevscape: The Latest Beverage Brand News

Keurig Dr Pepper (KDP) in October announced a long-term partnership with Mexican beverage company Grupo PiSA to distribute fast-rising sports drink Electrolit across the U. S. , filling a major hole the KDP’s portfolio that’s been missing since watching BodyArmor flee into the arms of Coca-Cola back in 2019.

In a press release tied to the release of the company’s Q3 earnings report, KDP announced that, starting in 2024, it will sell and distribute Electrolit in the “vast majority” of its DSD territories and across all channels of trade. “Electrolit has experienced exponential growth in recent years, stepping up in a competitive category driven largely by consumers who discover & love our product’s unmistakable efficacy. Keurig Dr Pepper — a known leader at the forefront of an iconic brand roster — was the right choice to partner with as we enter the next phase of our growth trajectory,” said Caridad Ochoa, President and Chief Executive Officer of Electrolit USA.

After decades on the market in Mexico, Electrolit entered the U. S. in 2014 and has spent the last decade carving out a foothold in the category for its rapid-hydration drinks in square 21 ounce PET bottles.

The company’s RTDs generated over $394 million in dollar sales (MULO plus-c store) in the 52-week period ended August 31. In September, the company launched on-the-go powder sticks. After splashing the cash on Bai and CORE Hydration in the late 2010s, KDP’s growth strategy has since centered around finding and aligning with high-growth-potential brands at the right stage of their developments rather than outright M&A.

And lately, that’s served them well: roughly a year after investing $863 million for a 30% ownership stake in C4 Energy parent brand Nutrabolt, along with distribution rights, dollar sales for C4 are up 72. 6% year-over-year in the 52 weeks ended August 31. That was followed by similar deals with Polar in 2020, Athletic Brewing, and most recently this July when KDP took a $300 million stake (33%) in Philadelphia-based coffee roaster La Colombe and picked up licensing, manufacturing and distribution of its cold brew RTDs.

The company also picked up a bonanza in 2021 off of its minority investment in Body Armor, which then sold to Coke. But, similar to the evolution seen in energy, the sports drinks category is changing in response to a new set of consumers and need states. As seen at NACS in September, both Pepsi (Gatorade) and Coca-Cola (BodyArmor/Powerade) have used those brands as sub-platforms to push further into different formats and product types (water, energy, rapid hydration, protein, powders), while names like PRIME — already the fourth-largest category brand with well over $450 million in dollar sales this year — and GHOST are only getting started.

Don’t forget there’s notable upstarts like Barcode, Local Weather and Lance Collins’ Recover Organic Hydration 180 vying for dollars here, too. KDP’s timing on the deal is also key: Electrolit’s gains — growing 18% and now sitting as the fifth-largest brand with an over 3. 6 share of the category, according to Circana data — have come as Coke’s sports drink portfolio has been in decline.

And Electrolit has moved the category quickly, opening the door for the rapid hydration segment. With KDP’s machine behind it, Electrolit will be expected to keep gaining ground — could more innovation and a potential design makeover be part of the plan? The Pedialyte-esque bottles in plastic wrapped labels have a somewhat medicinal feel, though the square shape hasn’t apparently been a major hindrance to velocities, clearly. Moving Electrolit into KDP’s distribution system will have a ripple effect on DSDs as well, much like what was seen when C4 joined.

But as also seen with C4, New York distributor Big Geyser looks certain to continue working with Electrolit, according to an internal email viewed by BevNET. KDP commented in the release that Electrolit will be “building on its Hispanic heritage and regional strengths” to capture a “broad multi-cultural consumer base”; note that the company already has strong ties to Mexico via its partnership with Red Bull and Peñafiel brand, which is being reintroduced in the U. S.

next year as a flavored sparkling water line. Without knowing details of the financial agreement — is KDP a shareholder in the deal? — the longer-term implications, at this point, are unclear. Sports drink maker Barcode has partnered with New York City DSD house Rainforest Distribution, setting the stage for the L.

A. -based brand to build a presence on the East Coast. The partnership marks a homecoming of sorts for Barcode founder Mubarak Malik, the former director of performance for the NBA’s New York Knicks.

Malik told BevNET that he launched the hydration beverage brand in Los Angeles because there was a clearer path towards building a brand in chain retail stores than in the more diverse, independent-heavy New York market. To prepare for its Northeast launch, the company has brought on regional sales manager Andrew Braun whose New York CPG sales experience includes turns at Sanzo, US Foods and Brooklyn Food and Beverage. “New York City is all about relationships,” Malik said, citing Braun’s experience in the market.

Founded in 2020 and positioned as a better-for-you fitness drink, Barcode produces a line of hydration beverages made with ashwagandha, magnesium, vitamins and minerals and just 2 grams of sugar per 16. 9 oz. bottle.

The startup brand has partnered with pro athletes, including this year’s top NBA draft pick Victor Wembanyama, to help grow awareness. According to Malik, Rainforest now marks Barcode’s largest distribution partner to date. To date, Barcode’s largest footprint has not been L.

A. , but Texas, where the drink is distributed by Glazer’s Beer and Beverage, Dynamo and Silver Eagle and is set to roll out to H-E-B stores within the next 30 days. However, New York now serves as a focus for the brand.

Joining the call, Braun said the brand is employing third party merchandising company Boost to support Rainforest’s distribution and will also be hiring a demoing company to help recruit brand ambassadors. The brand is already set to launch into accounts like Gourmet Garage, West Side Market and Fairway, Braun said, and is looking at getting into key locations like Food Emporium in Midtown Manhattan. “You know how New York is structured, it’s not necessarily a lot of chain stores,” Braun said.

“We’re tackling them one rep at a time, I’m going in and riding along with them and we’re introducing the product. ” With Malik’s basketball roots, Barcode is also hoping to sell into gyms and other fitness accounts, he said. The brand marks Rainforest’s first sports drink in its portfolio and Malik and Braun noted that the distributor only has limited relationships within that channel, however Braun is now working to make introductions between Rainforest and key gym locations.

“A lot of [Rainforest’s] products are better-for-you and I think it’s just a sector they haven’t really captured yet,” Braun said. “So I’m actually in discussions right now about if we can bring this gym business to them. We’re gonna navigate and see if it’s the right fit, and if not we’ll sign on a gym distributor.

” Manna Beverages & Ventures (MB&V) is set to acquire California-based co-packer Nor-Cal Beverage Company for an undisclosed sum. The deal is subject to due diligence and approvals. Based in Kentucky, MB&V is an affiliate of Manna Capital Partners, an investment firm founded by former NBA star and businessman Ulysses L.

“Junior” Bridgeman and investor Kevin Attkisson. Bridgeman is also the founder of bottler Heartland Coca-Cola, which services Kansas, Missouri, and Southern Illinois, and the owner of more than 200 franchise restaurant outposts, including Wendy’s and Fazzoli’s. MB&V has aimed to build a portfolio of beverage manufacturing facilities for both alcoholic and non-alcoholic products, and last year announced plans to build a new $600 million, 1.

7 million square-foot beverage production plant in Montgomery, Alabama. That plant, which is expected to create around 280 jobs, is scheduled to go online in 2025. Founded 86 years ago, Nor-Cal Beverage is one of the largest independent beverage co-packers in the Western United States, operating two locations in California and specializing in teas, chilled juices, water, energy drinks and ades with capabilities to produce cans, PET and glass bottles.

The business also offers warehousing and logistics as well as specialized equipment services. “We are excited to add the Nor-Cal Beverage Company business to the Manna Beverages & Ventures portfolio,” said Derrick Register, MB&V President, in a statement. “By continuing to serve as the solution for major brands, we will capitalize on what Nor-Cal Beverage Company built while opening doors for expanded opportunity.

” According to MB&V, the acquisition is expected to allow Nor-Cal Beverage Company to expand its capabilities. A press release did not specify what new additions might be made, however. “We are pleased to soon see the positive impact that this impending transaction will have on our employees and customers,” said Shannon Deary-Bell, Nor-Cal Beverage Company President and CEO, in the release.

“We will continue providing our brands with the best products while expanding opportunity, capability, and resources for our employees and customers. With new opportunity on the horizon, I am proud to see how this acquisition will change the trajectory of this business. ” The Coca-Cola Company will be able to challenge Gatorade’s electrolyte content on Powerade labels after the National Advertising Review Board (NARB) ruled in favor of the company in November regarding Powerade’s claim to have “50% more electrolytes vs.

the leading sports drink. ” The NARB ruled that Powerade may continue using the claim so long as it calls out Gatorade by name. Their new recommended phrasing is “50% more electrolytes vs.

Gatorade Thirst Quencher. ” The decision overturns a prior ruling from earlier this year that advised Coke to cease using the claim altogether, arguing that it was unsupported by evidence. Powerade had featured the original call out on its packaging, as well as in two video ads and social media posts, which were reviewed by the NARB and the National Advertising Division (NAD) of Better Business Bureau National Programs.

One social media post, which included a “strong arm emoji,” was also called into question as suggesting that drinking Powerade will make a consumer stronger than if they drank Gatorade. Coke appealed that decision in August and, although the NARB advised against the original wording, this new ruling represents a victory for the beverage giant. In a statement, the company said it “applauds” the decision and will make the recommended changes, as well as discontinuing the past video ads.

While the NAD originally believed that the “50% more electrolyte” claim “overstated the significance of the nutrient difference” between Powerade and its chief competitor, the NARB panel found that Powerade’s recent reformulation – adding addition sodium and potassium – did, in fact, prove the claim true. Powerade contains 240 mg of sodium and 80 mg of potassium per serving, compared to Gatorade Thirst Quencher which contains 160 mg of sodium and 50 mg of potassium. While Gatorade is the leading sports drink in the U.

S. by sales, the NARB advised Coke to specifically cite the brand’s core “Gatorade Thirst Quencher” line by name, in order to clarify which Gatorade product the claim applies to. As well, the NARB cleared Coke of wrongdoing with its strong arm emoji post, stating that the post does not communicate “a superiority claim, but merely draws attention to the fact that Powerade increased its electrolytes.

” Startup kombucha brand Better Booch is moving to finalize its first acquisition as it has signed an agreement to acquire the assets of fellow fermented drink maker Live Beverages in a move aimed at reaching profitability. Live was founded in 2012 as Live Soda and produced a line of probiotic sodas in 12 oz. cans that served as a pioneer for the gut health soda category that has emerged in recent years with brands like Olipop, Poppi and Culture Pop.

The brand’s current portfolio features a line of organic sparkling probiotic kombuchas in 12 oz. glass bottles featuring soda-style flavors like Root Beer, Cola, Lemon Lime and Cream, among others. According to Better Booch co-founder Ashleigh Lockerbie, Live’s owners had shifted its focus towards other parts of its portfolio, leading the firm to seek a buyer for the brand.

In 2016, Austin, Texas-based Live raised $2 million in financing from Boulder Investment Group Reprise. Since at least 2019, Live had been owned by Great Point Brands, which had showcased it at trade shows alongside other portfolio brands like the now-defunct Daily Greens. Great Point Brands is a private equity-backed investment management firm which, according to LinkedIn, touts several Dr Pepper Snapple Group veterans as executive leaders.

Live is expected to be absorbed into Better Booch and no current Live team members are expected to stay with the brand, Lockerbie said. Better Booch has already begun manufacturing and distributing the products. The additional revenue from the purchase is now expected to make Better Booch profitable within its first month in the portfolio.

The unpalatable alternative to the acquisition for Better Booch was downsizing its team, a decision Lockerbie said the company did not want to make. “We’re trying to think outside the box,” she said. “I believe the playbook for CPG has changed.

The last 20 years of top line growth at any cost is not the playbook anymore, and I think that’s actually really good. Things are coming into more parity and more alignment, and we’re going to see the brands that have real value succeed. ” Similar to Live, Better Booch was also founded in 2012 by Lockerbie and her husband Trey Lockerbie, former touring musicians who began the brand as a small business selling homemade kombucha at Los Angeles area farmers markets.

In 2019, Better Booch raised $2. 5 million in a round led by Crush Ventures and brought in an additional $2. 5 million in a seed round last year.

According to Circana, in the 52-weeks ending August 13, Better Booch grew retail dollar sales of its refrigerated kombucha products 45. 1% to $2. 8 million.

Live Soda, meanwhile, reported sales down -34. 2% to $3. 3 million in the same period.

That data does not include ecommerce and may not cover all SKUs sold by the respective companies. Lockerbie said there are strong synergies between both brands that Better Booch will now look to tap into. While Better Booch is widely established in the natural channel, for example, she said Live has been focused on conventional grocery.

“Buyers that we weren’t able to get meetings with before are now taking meetings with us,” she said. The strategy going forward is to “lean in” regionally where each brand is already most successful. For Better Booch, that’s the West Coast, while Live has most of its distribution in the Southeast and the Northeast.

The company is now working on a rebrand for Live and is also aiming to relaunch the probiotic soda line, which Lockerbie said was discontinued during the pandemic due to canning shortages but is now on trend with the rise of the prebiotic soda set. As well, Better Booch this summer launched its own twist on the gut health beverage trend, a canned prebiotic sparkling tea line called Cha. Going forward, Better Booch will remain the company’s main focus and Lockerbie said she believes that brand is better positioned as a nationwide product, while Live is more likely to remain as a regional play.

The stretch goal is for Better Booch to expand its footprint in conventional grocery alongside natural channel growth and it recently added retailers like Meijer and Fresh Thyme. Meanwhile, Cha is sowing its seeds in West Coast natural stores, most recently launching in Bristol Farms and Lassens. As the momentum behind zero-proof drinks shows no signs of abating, leading non-alc retailer Boisson is taking steps to secure its place within the expanding category, bringing on a new CEO and announcing in September that it has received funding in a $5 million bridge round from Convivialité Ventures, the VC arm of Pernod Ricard, and Connect Ventures.

As Boisson’s new chief, Sheetal Aiyer, a former executive in startups and growth-phase CPG companies, will usher the company into its next era as an omni-channel platform, now equipped with more funding to fuel domestic and international expansion, strategic partnerships, and curated product collections. As the principal and founder of Vik Charles Consulting, Aiyer has helped scale multiple companies including Cardinal Spirits, Eureka Heights Brewing Company, and Sixpoint Brewery. The new CEO has a longtime friendship with Nick Bodkins, founder and president of Boisson.

Bodkins described the transition as a necessary step in Boisson’s long-term ambitions of becoming a three-prong business: retailer, e-commerce site, and wholesale distributor. “I think that Sheetal’s experience in the next stage of growth is something that I will be able to learn from as a founder, as we now think about what it looks like to go from here to three-times or four-times from here,” Bodkins said. Boisson is part of a new generation of businesses growing the burgeoning no-and-low alcohol segment in the U.

S. Non-alc beverage sales were about $510 million in the last 52-week period ending July 29, up 31. 2% versus a year ago, according to NIQ data.

Since launching in NYC in 2021, Boisson has expanded to eight storefronts across New York City and California, in addition to growing its ecommerce platform, partnering with Drizly, and increasing its revenue 300% from 2021 to 2022, according to the company. Bodkins will continue to oversee the long-term vision for the company as founder and president, and explore new opportunities for the business internationally. “While we’re seeing tremendous growth here in the U.

S. , I think it’s really important for us as we think about what our footprint looks like as curators of this movement, to be able to have a better sort of pulse check on what’s going on everywhere else,” he said. There are no specific plans to launch a store or e-commerce internationally yet, but Bodkins is aiming for the company to have a “better chest of available resources” for bringing international brands into the U.

S. or vice versa. The expansion points to the company’s overarching mission to be a curator at the forefront of the non-alc movement.

While Convivialité Ventures invests in companies beyond Pernod Ricard’s traditional wine and spirits offerings, Bodkins argues that non-alc’s emerging relevance as an additive category to the alcohol industry was a factor in funding alignment. The venture arm backed another non-alc company, Sober AF, earlier this year. “Boisson plays a key role in the fast-growing non-alcoholic category, by discovering and curating the best NA brands for consumers’’, said Brandon Yahn, partner at Convivialité Ventures.

“The company helps the leading NA brands expand their business across Boisson’s retail, ecommerce, and growing wholesale channels. ” The store’s other backer is Connect Ventures, an investment partnership between entertainment and sports agency Creative Artists Agency (CAA) and global venture capital firm New Enterprise Associates (NEA). The tech VC has funded startups such as Typeform, TrueLayer, Lifebit, Oyster and Kheiron.

For Bodkins, the next stage of growth is furthering its “verticalized approach to the market” and leveraging Boisson’s flexibility outside of the three-tier system to continue to sell direct to consumers, into bars and restaurants, and specialty grocery. “We always had ambitions to grow beyond the traditional three tier system because we don’t have to participate in the three tier system,” he said. Part of that expansion is continuing to be purposeful in their partnerships and how to advocate for the category, specialty grocery for instance where there’s a lens of discovery for consumers.

The founder is skeptical on the rush to grocery by “factions within the category. ” “The grocery teams are reliant on a gigantic CPG machine that has been developed over a long period of time, and it’s a lot more about low prices, margin and a focus on four-foot sections,” he said. “I think we are still in the second inning.

” The Coca-Cola Company is taking another step into the beverage alcohol market, announcing the launch of a global partnership with spirits conglomerate Pernod Ricard to introduce Absolut Vodka & Sprite as a ready-to-drink pre-mixed cocktail in 2024. Available in Sprite and Sprite Zero Sugar varieties, the product will enter select countries in Europe — including the U. K.

, the Netherlands, Spain and Germany — early next year. Per a release, the global benchmark for alcohol by volume (ABV) is 5% but will vary depending on the market. The release marks another instance of Coca-Cola teaming with a spirits company to integrate one of its top-selling IPs into a ready-to-drink product.

Last June, the soda giant partnered with Jack Daniel’s Tennessee Whiskey to release a pre-mixed Jack & Coke in 12 oz. cans (5% ABV), becoming the first alcoholic drink to carry Coke’s official branding and packaging. The line debuted in Mexico before launching in the U.

S. in March. Coca-Cola also licenses its brands to third parties for use in alcoholic drinks; Topo Chico Hard Seltzer and Simply Spiked Lemonade are produced via partnership with Molson Coors, while Constellation Brands makes Fresca Mixed.

“We keep consumers at the center of everything we do as we continue to develop our portfolio as a total beverage company,” said Coca‑Cola’s chairman and CEO James Quincey in a statement. “We are expanding in the alcohol ready-to-drink space, including products that use select brands from our core portfolio. We are excited about our new relationship with Pernod Ricard and look forward to the introduction of Absolut & Sprite.

” Meanwhile, Pernod Ricard has made RTDs a growing focus in recent years; in 2022, the company acquired French startup Cockorico and invested $22 million to add its first-ever canning line for pre-mixed cocktails. Along with products in other spirit categories from brands like Jameson and Malibu, Pernod Ricard currently markets a line of vodka soda RTDs under the Absolut label. “This very promising and pioneering project brings together two leading companies who are committed to offering their consumers new experiences around premium products,” said Alexandre Ricard, CEO of Pernod Ricard.

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