Bevscape/NOSHscape/Brewscape Brands Form ‘Alliance’

Liquid Death Raises $75M, Preps Flavored Line Launch

California-based canned water brand Liquid Death announced in January that it has raised $75 million in a Series C round led by startup studio Science Inc. The new funding brings the brand’s total financing to about $125 million since its founding in 2018 and is aimed at helping the company scale its presence in the conventional channel and support a new flavored sparkling water line launching in January.

The round also includes investments from Powerplant Partners, Live Nation Entertainment (which first invested in the brand in 2021), Access Capital and Nomad Ventures.

According to co-founder and CEO Mike Cessario, Liquid Death was up over 300% year-over-year in 2021 and reported about $45 million in topline revenue, up from $3 million when the brand launched in 2019. Its products are currently sold in about 29,000 retail locations nationwide, including Whole Foods, 7-Eleven and Target stores.

With Albertsons already onboard, the company is seeking to grow its presence in grocery stores, with much of the new funding set to go towards building out its field sales team.

“As you can imagine, everybody at the beginning, BevNET included, was skeptical of Liquid Death and I think it’s taken retailers more time to come around and realize it’s not some niche thing,” he said.

At the end of 2021, Liquid Death had a retail ACV of about 9% nationwide, though Cessario noted that for most of the year the brand averaged a 6% ACV.

The company is also preparing to launch its first flavored line, set to debut online at the end of January. The new sparkling waters will be sold in Liquid Death’s customary tallboy 16.9 oz. cans and come in three flavors: Berry It Alive, Severed Lime and Mango Chainsaw. The drinks are made with the brand’s mountain spring water and will also be sweetened with agave syrup and contain 20 calories per can.

“The most important thing is, we want to make something that you absolutely call a healthy beverage, but let’s make the taste significantly better, or better is a relative word, but a little more intense or bold than Lacroix and Bubly and all of the zero-zero-zero [calorie] flavored sparkling waters out there,” he said.

Mark Rampolla, co-founder and managing partner of Powerplant Partners, told BevNET in a statement that he has “never seen anything like Liquid Death” throughout his time in the food and beverage business, pointing to its swift crossover success in both the conventional and natural channels, as well as with a diverse array of consumers. While Liquid Death has worked closely with lead investor Science Inc., which first took a stake in the brand in 2018, the new partnership with Powerplant is also poised to open additional doors within the beverage industry through the firm’s experience in the space.

“It’s scaling so fast, selling as well in Whole Foods as 7-Eleven and resonating with a wide audience ranging from heavy metal to country music fans and soccer Moms to skater kids,” Rampolla said. “Many entrepreneurs think they are building lifestyle brands, but how many of those brands have consumers sporting tattoos of them? Mike and his team are building the next Red Bull by making water cool and along the way will eliminate mountains of single-use plastic and pull tons of sugar out of our bodies. That’s a mission we’re excited to support.”

Dan Gluck, managing partner of Powerplant, echoed Rampolla’s comparison to Red Bull, noting that despite early skepticism from many in the CPG industry that a brand built around death could connect with mainstream consumers, he didn’t believe Liquid Death had a ceiling. Citing Powerplant’s internal data, Gluck said 291 bottled water brands launched in 2019 and Liquid Death is now outpacing all of them.

“M&A is always part of our diligence,” Gluck said. “And we’ve seen where transactions have taken place, the multiples, and this is going to be a very attractive asset to acquire one day.”

As has been the brand’s main claim to fame thus far, Cessario said the company drove a significant number of sales last year through earned media. One of the most successful recent ad campaigns, he said, was the release of a limited line of skateboards made using ink mixed with the blood of Tony Hawk (also an investor in the brand). A video for the campaign cost about $10,000 to produce and roughly $5,000 was spent on the physical boards he said, but its viral success ultimately generated roughly $10 million in earned media (as well as revenue from selling the boards).

Going forward, merchandise and apparel will also play a bigger role in Liquid Death’s strategy, including plans for a wholesale business. Last year, apparel sales passed $3 million, up from $700,000 the year before, and branded clothing is also being sold in Urban Outfitters stores. According to Cessario, about 52% of direct-to-consumer purchases last year also included an item from the brand’s online merchandise store.

“Merch is a very serious part of our business, just like it is for Metallica or Travis Scott, or any of these huge artists where merch and apparel is a huge part of what they do, even though technically what they do is make music that people consume,” he said. “They’re not clothing manufacturers, but I think it all goes hand in hand and not many CPG brands know how to really take advantage of that.”

Kids Drink Brand good2grow Acquired by Wind Point Partners

Atlanta-based kids drink brand good2grow was acquired in December by Chicago-based private equity firm Wind Point Partners, which purchased the brand from its owner Kainos Capital. Terms of the deal were not disclosed.

Founded in 1997, good2grow produces clean label, RTD juices, fortified waters and flavored milks and has now emerged as one of the fastest growing brands in the kids drink space. In addition to its better-for-you positioning, the company has driven growth through its collectible bottle tops, featuring cartoon characters from Disney, Hasbro and Nickelodeon, to name only a few of the brand’s licensing partners.

Since 2018, good2grow has been part of the Kainos portfolio and, according to the firm, has doubled in size.

“We chose to partner with the Kainos team in 2018 with the belief that their sector knowledge and network of relationships – in particular in the c-store channel – would be invaluable, and this proved to be true,” good2grow CEO Gunnar Olson said in a press release. “They are a great team to work with, and they execute with speed and certainty.”

Under Kainos, the brand expanded its DSD distribution network nationwide, added to the product portfolio with the launch of waters and milks and revamped the brand’s marketing strategy with a stronger focus on in-store activation.

But it was the expansion of good2grow’s brand marketing partnerships with kid-friendly companies that has been one of its biggest growth drivers. In May, VP of marketing Edrza Gibson told BevNET that the growth of streaming services and increased home viewing during the pandemic was a significant booster for the brand as families watched more content and became familiar with new properties. In particular, sales spikes can often be times towards big film releases, as the brand saw its Trolls and Scooby-Doo licensed drinks rise in time with the releases of the films Trolls World Tour and Scoob!

According to NielsenIQ, good2grow’s flavored water retail dollars sales were up 77.9% to $31.8 million in the 52-week period ending November 6. On a two-year stack basis, those sales were up 86%. IRI data for the 52-weeks ending October 3 showed strong dollar sales in MULO plus convenience, with flavored fruit drinks (+33.2% to $51.6 million), apple juice (+29.8% to $88.4 million) and fruit juice blends (+41.8%) all up double digits.

Wind Point Partners is a private equity firm focused on consumer goods, industrial products and business services. Its portfolio includes companies such as Stir Foods, cookies and crackers brand Nonni’s and Bakery Chef.

After Pace-Setting First Year, ZOA Aims Higher

For the past half-decade or so, Dwayne “The Rock” Johnson has broken box offi ce and social media records on his way to becoming the “Most Likable Person in the World.” It turns out he can make a pretty good energy drink, too.

First announced last January and launched in March, ZOA has broadly managed to live up to the lofty goals it set for itself upon entering the market, becoming the fastest-growing new energy drink of the past year. This year, the brand is looking to leverage that momentum to continue expanding its audience with the release of two new zero-sugar fl avors — White Peach and Tropical Punch — and a 12 oz. can format.

“I’m proud to say that ZOA is an A-plus product. From our formulation, to taste, to our health and wellness benefi ts to the story and ethos that is ZOA,” Johnson told BevNET in an email.

The new fl avors and format, fi rst teased at the National Association of Convenience Retailers (NACS) trade show in October, are designed to nudge ZOA toward a slightly more mainstream audience; recall that the brand originally was given an early access exclusive with GNC last March, where it plays on the shelf with other fi tness-oriented, “performance energy” brands in 16 oz cans, including C4, Bang and A.M.I.N.O. Energy. Through its nationwide distribution agreement with Molson Coors, the line has since migrated to 40,000 locations spanning across channels, from Kroger, HyVee and Albertsons to Circle K, CVS and Speedway.

But according to the brand, 16 oz. cans currently account for just over half of the energy drink category, meaning there’s plenty of white space to capture new consumers under the brand’s ethos of celebrating the “everyday warriors” that “champion positivity.” In a survey of 2,000 adults commissioned by the brand, results showed that 79% of Americans want to make decisions that are best for their bodies, but are often forced to turn to less than ideal options like sugary caffeine drinks or multiple cups of coffee in order to keep their energy levels elevated, while 60% of respondents said they didn’t believe they could make it through the day without sugar.

The brand remains “rooted in fi tness,” said co-founder Dave Rienzi, but its messaging is now leaning more into callouts of “clean, natural energy” that “doesn’t mean you have to be in the gym to be a ZOA Warrior.” The ingredient deck refl ects that mix across both the sugar-sweetened (100 calories) and zero-sugar varieties: there’s natural boosters like turmeric and camu camu, alongside the requisite caffeine (from green coffee and green tea) and B vitamins.

With that in mind, the 12 oz. can is “the perfect size to appeal to a broader demographic audience,” according to CEO Michael Pengue, with a lighter caffeine payload compared to the 160mg in the full size can. The brand is leveraging the smaller size to target the addition of another 60,000 retail outlets this year to pass the 100,000 mark: major chains like Target and Walmart — both of which requested a smaller size for their shoppers — are coming onboard, along with 7-Eleven, Murphy Oil, Kum & Go, Walgreens, Chevron, Giant Foods, Food Lion, GPM and others. Both new fl avors will be available in singles, 4-packs and 12-pack ($29.98). The brand’s ecommerce ambitions are equally high, Pengue said, noting the goal is to “more than double our business” on Amazon (where it currently ranks as the top-selling energy drink), ZOAenergy.com and other new online stores this year.

Looking ahead, there’s not much to indicate that ZOA will do anything but continue to rise. The overall energy drink category continues to expand (+15.2% year-over-year through the end of December, according to Nielsen), while Johnson himself will have plenty of cross-promotional opportunities with the release of “Black Adam” (based on the DC Comics character) later this summer.

That’s even better news for Molson Coors and its evolving non-alcoholic beverage segment (alongside names like La Colombe and ZEN WTR), of which ZOA accounted for roughly half of the 2 million cases of non-alc product shipped by the beer giant over fi rst nine months of 2021. Crossover between the beer and energy drink spaces isn’t new in itself, but with big names on either side getting more involved with each other — see Anheuser-Busch and GHOST Energy or, more recently, Monster Energy’s acquisition of CANArchy Brewing — the stakes continue to climb.

“We created a healthier for you energy drink that has become the #1 fastest growing energy drink in the market,” Johnson said. “A kick ass product that men and women of all demographics absolutely love. Much more work to be done as we grow the ZOA brand and expand our healthy offerings.”

Better-For-You Brands Form ‘Alliance’ to Reduce Sugar Consumption

As sugar reduction continues to be a top priority for food and beverage manufacturers, seven low- and zero-sugar brands are banding together to form the Alliance to Control Excessive Sugar (ACES), a new business group dedicated to promoting better-for-you products.

The group was conceived by its chairman, Super Coffee CEO Jimmy DeCicco, and includes his own company alongside mini cookie maker HighKey, prebiotic soda Olipop, lemon water brand Lemon Perfect, protein drink Koia, ice cream and cookie mix brand Enlightened, and low-sugar cereal Three Wishes.

“These brands are solving the same problem, and the problem is that food can taste good while being good for you,” DeCicco said. “I think we’ve been inundated with too many carbs and sugars, especially in our drinks, from big, big sugar corporations like Coke and Pepsi and Dr Pepper – and there’s no doubt that sugar and flavor is addicting. But what we do at Super Coffee, and what ACES is all about, is to remove as much sugar as we can, but still make our favorite products taste flavorful.”

ACES launched in January with a website, sweetaces.org, where consumers can read about the project and sign up for themselves or a friend or family member to receive a free “Passport” style coupon book, which includes $30 worth of manufacturer discounts for each of the seven brands. Each brand has pledged up to $1 million in discounts for their products.

Margaret Wishingrad, co-founder and CEO of Three Wishes, noted that the program purposefully has a “discovery” component built in which, through the website, will help consumers learn about new products.

“For someone who knows brands like Super Coffee and Olipop, maybe they haven’t tried Three Wishes or vice versa,” she said. “I think it’s a really good way to find what brands are like other brands.”

DeCicco noted the broader goal, however, is to draw in new consumers who have not yet made the leap to a betterfor-you lifestyle and help to push more brands across the food and beverage sector to reduce the amount of sugar in their products.

“It’s not just ‘Hey, try our products and hopefully you become a customer’ it is ‘Hey, is there somebody in your life who you want to see live a healthier lifestyle?’” he said. “If you know somebody who can’t put down the Coca-Cola, or the Cinnamon Toast Crunch or the Oreos, then definitely send them a health passport with all these free coupons from ACES brands, introducing them to the healthy options that still taste good.”

According to DeCicco, the ideas behind ACES date back to 2018 when Super Coffee wanted to adopt a charitable mission, but could not afford to donate money as it needed to invest its cash back into the company to maintain growth. Instead, the brand began promoting approximately how much sugar it had “removed” from consumers’ diets by comparing its sales to more sugary competitors, which for 2018 was estimated to be around 1 million pounds.

Now, ACES is borrowing a similar model, touting on its website that Americans consumed 11 million metric tons (24 billion pounds) of sugar in 2021. The site also includes a “manifesto” calling for better tasting products that use less sugar and features an interactive easter egg where users can type in the chemical formula for sugar to reveal a slide comparing Super Coffee’s nutritionals to other bottled coffees.

Sugar’s longstanding public enemy status has continued to fuel the growth of better-for-you brands as consumers increasingly seek to reduce their sugar intake. A 2021 Euromonitor report found that 53% of respondents said they aimed to “eat less sugar” as their chosen weight loss method in 2020. Fifty-eight percent of consumers looking to avoid sugar said it was “better for me to avoid it,” and 57% said a low sugar diet “makes me feel healthier.” Even among the big food and beverage companies that have often taken the blame for proliferating unhealthy diets are embracing the trend, as “Zero Sugar” sodas fuel growth for companies like Coca-Cola and PepsiCo (the segment was up 19.5% in 2020, per Mintel, doubling 8.4% growth for sugary sodas).

According to DeCicco, ACES currently plans to grow awareness through the individual brands’ social media channels, as well as tapping their respective celebrity influencers to promote the website.

While ACES’ current focus is on education and providing discounts on products from its partner brands, DeCicco said that he hopes the project will eventually grow into a major industry organization. In its announcement, the group has put out a call for other low and no sugar brands to join and DeCicco added that he hopes that consumers will get engaged and nominate their favorite brands to get involved.a

“Ultimately, we want this thing to scale massively,” DeCicco said. “The more sugar-free or low sugar options that we get involved with ACES, the bigger the impact that we can all collectively make. Eventually, someday, I see this thing building out sets in grocery stores for brands that are a part of the ACES coalition. Instead of the Healthy Living set at a Wegmans, perhaps it’s an ACES set with brands that you recognize.”

Ugly Drinks Co-Founder Hugh Thomas Steps Down as CEO

Ugly Drinks CEO Hugh Thomas stepped down from his role at the sparkling water startup in December, citing a desire to “take a break and a deep breath before figuring out what is next.”

In a post on social media, Thomas wrote: “Being a Founder and CEO is an exhilarating, yet exhausting rollercoaster and I can honestly say I have put everything into this journey. Blood, sweat and tears. The brand is in my DNA and has taken every bit of my energy, heart, and soul to get it to this place, but now it’s time for me to step back and focus on myself.”

Working alongside co-founder and fellow Vita Coco veteran Joe Benn, Thomas launched Ugly Drinks in London in 2015, positioning the brand as a playful, inviting zero-calorie alternative to sugary soda. Since then the brand has entered into 15,000 stores worldwide, introduced an energy line, developed a robust hybrid D2C/retail business in the U.S., was backed by ZX Ventures, and won praise for its limited edition flavor drops inspired by classic sodas.

To date, the brand has raised at least $3.9 million in financing, according to Crunchbase. Investors in the brand include U.K.-based firms Pentland Ventures and Steadman Partners and California-based MAGIC Fund. Over the past year, the company has hired experienced operators to support its U.S. business, including former Coca-Cola veterans Brett Lanford as president and Jason Villano as VP of sales. “I’m going to be taking time out before figuring out what’s next,” Thomas added. “This is just the beginning. I love building things and remain incredibly passionate about startups and the people building them.”

A successor for Thomas was not immediately announced. His co-founder, Benn, also left the company last year, according to Linkedin.

Good Crisp Closes Funding To Push Into Conventional Retail

In December, salty snack brand The Good Crisp Company announced it has closed what it described as its largest funding round to-date as it seeks to make the jump from natural retailers into conventional grocery.

Good Crip CEO Matthew Parry declined to share the amount of capital raised, but said it was the company’s largest ever, coming roughly 18 months since it raised approximately $5 million in May 2020. Returning investors included CircleUp, Stonyfi eld founder Gary Hirshberg and Orgain founder Andrew Abraham, along with new participants including FF2032 (the venture arm of Lotus Bakeries), Vitality Capital, Goat Rodeo, RCV Frontline, Native founder Moiz Ali and Thrive Market founder Nick Green.

“Most of our [previous] investors have been angels or founders and really bring some expertise — I was really keen to continue along that model,” Parry said of the investor group. “For me, some real world experience is valuable.”

Parry said the capital is largely needed to help support the brand’s push into conventional grocery. The brand’s chips will launch into 1,500 Kroger stores in January as well as H-E-B, and its cheese balls, which were introduced in 2021 online and in smaller independent stores, will enter 2,700 Walmart locations in March. To support these efforts, the company, which currently has six full-time employees, plans to also invest in its fi eld marketing, fi nance and sales teams.

“[It’s a] big leap from natural into conventional,” Parry said. “This is our fi rst key [jump] into that so we want to make sure we are capitalized to be able to do that and really win in conventional like we have in natural.”

The funding will also help the brand further build its e-commerce business, he added, which currently accounts for 10% to 15% of sales.

Though there are plenty of traditional potato chip manufacturers, Parry said there are very few manufacturers who can produce canister chips, which have a different texture. Furthermore, Good Crisp’s exclusivity with Mamee for the North American market takes the number of copackers even lower, he said.

In part because of this lack of competition, Good Crisp is able to command a price point of $3.36 to $2.99, roughly a dollar more than Pringles. The other part of the brand’s success, Parry said, has been the simplicity of its value proposition — especially amidst the sea of health claims and functional foods found on other grocery products.

Coolhaus Sells to Perfect Day, Will Transition to Entirely Animal-Free Offerings

Alt-dairy ingredient provider Perfect Day has reached an agreement to acquire ice cream brand Coolhaus from investment group Sunrise Strategic Partners for an undisclosed fee, the company announced in December.

The deal will make Coolhaus part of Perfect Day’s CPG arm, The Urgent Company, and transition its dairy-based line to use Perfect Day’s animal-free milk proteins in place of its current dairy-bases. The brand’s dairy-free products made with pea protein will remain the same.

Coolhaus CEO Natasha Case will also join The Urgent Company as its president of brand experience, while CFO Ryan Bennett will join as SVP of operations and integration. Other employees have been offered positions at Perfect Day or the Urgent Company as well, according to Paul Kollesoff, GM of The Urgent Company.

While the acquisition of one emerging brand by another may seem unusual, Steve Hughes, founder of Sunrise Strategic, said that the path to acquisition has shifted.

“Five years ago large strategics were apt to take flyers with emerging brands before they got the scale,” Hughes said. “If you want to sell to a strategic [now], you need to have $100 million in revenue and be making [over] 15% EBITA. I think the strategics have proven to themselves that they don’t have the fine motor skills they need to scale these emerging brands. So now, emerging brands have to be scaled brands to be attractive to them.”

Coolhaus will join The Urgent Company’s current slate of brands, including fellow ice cream brand Brave Robot, Modern Kitchen cream cheese and California Performance Co protein supplements – all of which use Perfect Day’s animalfree dairy ingredients. The consumer division has been on an innovation tear in recent months, launching cream cheese, baking mixes and sports supplements, as the previously announced integration of the Urgent Company into Perfect Day has begun to bear fruit.

Though Coolhaus, which is sold in more than 6,000 stores, and Brave Robot, available in over 5,000 stores, have some overlap in customers including Kroger and Sprouts, Coolhaus has its own unique relationship with Whole Foods Market. The retailer does not currently sell products made with Perfect Day proteins — which also cannot be classified as non-GMO because of their use of synthetic biology. Urgent Company executives said discussions with Whole Foods are ongoing but also noted that it will continue to produce Coolhaus’s pea protein-based ice cream.

Coolhaus also produces novelties using cookies and cones, and these too will eventually transition over to being “animalfree,” Kollesoff said. But, until then, only the ice cream will be vegan.

Despite their apparent similarities, Kollesoff broadly noted that Coolhaus seeks to “inspire the next generation of diverse creators …. [and create] ice cream for positive change,” while Brave Robot “exists to make more sustainable products without compromise.” As an example of further synergies, The Urgent Company said it plans to launch an exclusive animalfree dairy Coolhaus x Brave Robot co-branded novelty with “a key national retail partner.”

However, the agreement will give Perfect Day the ability to immediately place its brand on the packaging of a trendy ice cream brand, versus having to create a brand identity from scratch, as it has tried to do with Brave Robot. Perfect Day previously partnered with Graeter’s, but that brand tends to lean on its midwestern roots for branding and messaging.

The Urgent Company also noted that the acquisition will allow the two to share “resources and structure,” — though declined to provide specifics — which should result in efficiencies for both brands, a sentiment echoed by Hughes.

Green Circle Capital Launches Hormel-Backed Food Tech Venture Fund

In December, Green Circle Capital Partners announced it has raised $13 million for its fi rst fund in a new venture capital division, Green Circle Foodtech Ventures (GCFV), with an anchor investment from Hormel Foods’ VC arm 199 Ventures.

The new investment vehicle will target early stage, innovative food tech companies working across a number of spaces, including food safety, sustainable packaging, sugar reduction, food waste and supply chain effi ciency and – to a lesser degree – “tech-enabled” food and beverage brands. According to Green Circle founder and managing director Stu Strumwasser, the fi rm expects to write checks between $250,000 and $5 million per investment, with an average size of about $1 million, and will primarily participate in seed and Series A rounds.

Prior to the closing of the fi rst fund, GCFV has already invested in two startups: California-based alternative protein company The Better Meat Co. and Israeli animal-free dairy protein maker Imagindairy. The fi rm is now aiming to grow its fund size to around $25 million.

Founded in 2013, Green Circle Capital is a New Yorkbased investment bank focused on the natural products industry, including food, beverage and supplements, restaurants and – appropriately – foodtech.

According to Strumwasser, as GCFV marks an extension into principal investing for the fi rm, the new fund will only invest in technologies while Green Circle Capital will continue to service brands as a middleman for acquisitions and capital raises.

In addition to Strumwasser, GCFV’s partners include Graham Anderson, who brings experience in technology investing, and Green Circle Capital director Bakley Smith. Operational advisors include Green Circle associate Francesco Lorenzetti, Rao’s Specialty Foods CEO Eric Skae, Honeydrop Beverages founder David Luks and Explore Cuisine CEO Gregor Forbes.

The fund received an anchor investment from 199 Ventures, a division of global branded food company Hormel Foods. According to Strumwasser, Hormel’s involvement is a sign of the conglomerate’s dedication to plant-based innovations and sustainability.

In addition to Hormel, Strumwasser said several unnamed family offi ces invested in the fund. He noted that while GCFV’s initial fund may be smaller in the grand scheme of venture capital, portfolio brands will also have access to connections at Hormel and 199 Ventures or the family offi ces may provide additional sidecar investments.

While the food tech sector may be past its fi rst inning, Strumwasser said it’s “still the second or third” and that “many of the best opportunities are still early stage.”

According to a 2021 report from Emergen Research, the global food tech market size was estimated at $220.32 billion in 2019 and is expected to reach $342.52 billion by 2027, at a CAGR of 6%. The growth is being driven by rapid adoption of new technologies within the food industry and pointed to new innovations in robotics, processing techniques and data technology as new growth opportunities.

“Food is the biggest industry in the world and it’s the least indexed for technology,” Strumwasser said. “And if that wasn’t gonna change, I thought there’s nothing I could do about it – I can’t start a revolution. But I started seeing that it looked like there was a revolution starting, and with that I thought that this is probably the biggest economic opportunity of my life, maybe, since the internet.”

In particular, Strumwasser said he is interested in fermentation technology, namely as a way to create better plantbased alternatives to meat and dairy products. That’s the tech at the heart of The Better Meat Co., in which Green Circle Capital invested in 2019, prior to the offi cial formation of GCFV, and in October announced a partnership with 199 Ventures.

Strumwasser also pointed to shelf-life extension technology that can help reduce food waste, plant-based fat alternatives and plastic replacements as other areas of interest.

Constellation Brands and Coca-Cola Partner on Fresca Branded Canned Cocktail

Constellation Brands has entered a brand agreement with The Coca-Cola Company to manufacture, market, distribute and launch Fresca Mixed – a spirit-based ready-to-drink cocktail based on the citrusy soft drink.

“The Coca-Cola Company’s Fresca brand is not only trusted by consumers, but also directly delivers on consumer preferences for refreshment, fl avor, and convenience – attributes that also play well within beverage alcohol and where we can leverage our expertise,” Bill Newlands, Constellation president and CEO said in a press release.

Fresca, a zero calorie soda with citrus-inspired fl avors, is the fastest growing soft drink trademark in Coca-Cola’s U.S. portfolio, according to the announcement. The new Fresca Mixed product – which will be released later this year at a yet-to-be-determined date – will “balance the Fresca fl avor consumers expect with quality spirit bases rooted in Constellation’s expertise.”

“One of the core tenets of our innovation strategy is a belief in the power of extending strong and trusted brands in thoughtful ways to bring to market unique products that resonate with consumers,” Mallika Monteiro, Constellation’s chief growth, strategy, and digital offi cer, said in the release. “This is an exciting agreement that allows us to continue expanding our premium portfolio in ways that deliver distinctive consumer value propositions that include things like more fl avor, different alcohol bases, and functional benefi ts.”

Other than being spirit-based, no other details of the alcohol base were released. Constellation will use its own distribution networks for Fresca Mixed.

During Constellation’s third-quarter earnings call, Newlands said more than half of Fresca’s consumers already use the diet soda as a mixer with spirits.

Fresca Mixed isn’t Coca-Cola’s fi rst foray into beverage alcohol via the RTD segment. Last year, the beverage behemoth partnered with Molson Coors Beverage Company to launch Topo Chico Hard Seltzer, a sugar-based offering based on its popular non-alc mineral water. After a successful launch in select markets, Molson Coors announced that it would take Topo Chico Hard Seltzer nationwide and expand the brand with a ranch water version.

Tilray Acquired Green Flash and Alpine for $5.1M; Dissolves Anheuser-Busch JV

SweetWater Brewing parent company Tilray paid $5.1 million in cash and stock to acquire Green Flash Brewing and Alpine Beer Company in January, according to fi nancial forms fi led with the U.S. Securities and Exchange Commission.

A purchase price of $5,133,000 for the San Diego craft brands values their combined 2020 output of 34,000 barrels at $150.97 per barrel – far less than the $1,149.42 per barrel Tilray paid to acquire Atlanta-headquartered SweetWater in late 2020.

Tilray CEO Irwin D. Simon shed some light on the acquisition during a conference call to discuss the company’s second quarter earnings.

“Right before year-end, SweetWater announced the acquisition of Alpine Beer and Green Flash, iconic West Coast craft beer brands to be brewed in our new Fort Collins facility for West Coast distribution, all which complements SweetWater’s existing product offerings and give us a strong foothold in California and the west part of the United States, the largest state economy in the U.S. and the largest legal cannabis market in the world,” he said.

The $5.1 million Tilray paid to WC IPA LLC, the investor group that acquired Green Flash in April 2018, includes the brands’ intellectual property and inventory. Green Flash and Alpine beer will be brewed at SweetWater’s Fort Collins, Coloradobased production facility, which Tilray acquired from Red Truck Brewing in July 2021.

Also last month, Tilray acquired all membership interests in Cheese Grits LLC, the limited liability company that owns the real estate SweetWater occupies in Atlanta, for $30.6 million. The deal included “the assumption of outstanding debt” and the issuance of nearly 1 million shares of Tilray stock.

Tilray remains bullish on the prospect of federal legalization of cannabis in the U.S. and that its acquisition of three American craft breweries and Colorado-based Breckenridge Distilling will help it recruit American consumers through infused beverages, once legal. However, the company plans to support its beverage alcohol brands in their current forms.

“One of the big things you can’t do is wait for the U.S. to legalize,” Simon said. “I think what the important thing is is us being in adjacency categories, that [have] got growth, that [have] got accretion, that give us opportunities in the marketplace.”

Meanwhile, Tilray and Anheuser-Busch InBev have parted ways on the joint venture they launched to explore cannabisinfused beverages for the Canadian market in 2018. The world’s largest beer manufacturer was not interested in pursuing THCinfused beverages and the JV became “a major money-losing relationship,” Simon said.

Fluent Beverages, the brand created by the JV, is now a wholly owned subsidiary of A-B-owned Labatt Breweries of Canada, and Tilray will operate as its co-manufacturing partner, Labatt director of communications Tamar Nersesian told Brewbound.

“We do not expect these changes to have any signifi cant impact on Fluent’s day-to-day operations as it remains focused on commercializing CBD-infused non-alcohol beverages in Canada,” Nersesian said.

At its launch, both companies invested up to $50 million in the JV.

Kings & Convicts to Acquire Saint Archer Facility; Molson Coors Discontinues Craft Brand

The San Diego craft brewery scene is once again getting shaken up by the Kings & Convicts. After acquiring the Ballast Point brand from Constellation Brands in 2019, the company is acquiring the brewing facilities and taprooms of Saint Archer from Molson Coors.

Molson Coors announced the deal and plans to cease production and distribution of the Saint Archer brand on its blog.

“The Saint Archer team has built a distinct brand that has a very loyal following in Southern California. Unfortunately, the overall business has struggled to grow despite investing significant resources behind its production and commercialization,” Paul Verdu, VP of Tenth and Blake, Molson Coors craft division, said in a press release. “We’ll maintain ownership of the Saint Archer brand as we determine the best longterm plan and remain focused on growing our regional breweries that continue outpacing home-market competitors.”

In the blog post, Verdu added that the company “tried to do everything we could to keep the brand going, but it just wasn’t financially viable to continue operating.”

Enter Kings & Convicts, which will acquire the 50,000 sq. ft. brewery with its 40-barrel brewhouse, 5-barrel pilot system, cellar, canning line and a 1,200 sq. ft. satellite taproom in Leucadia. The company plans to take on Saint Archer’s operations and tasting room employees.

With 1 million barrels of beer brewing capacity at its Ballast Point facility, why does Kings & Convicts need another San Diego brewery?

CEO Brendan Watters explained that the company wanted a headquarters for Kings & Convicts, where its beer will be produced, as well as small batch Ballast Point offerings and other craft beverage products. He added that the Ballast Point facility with its 300-barrel brewhouse was “too bloody big” for Kings & Convicts, and the Saint Archer facility made more sense.

Additionally, Watters said Saint Archer’s packaging line was an upgrade over Ballast Point’s existing line, giving the company back capabilities it lost when it sold the Scripps Ranch facility to hard kombucha maker JuneShine.

With the soon-to-be former Saint Archer facility, Kings & Convicts will scrap its planned facility in Pleasant Prairie, Wisconsin. The Kings & Convicts brand is only sold in select markets in Illinois and California, where it is self-distributed.

Watters added that the acquisition of the facility is about creating capabilities and flexibility within a beverage alcohol industry that is in the midst of a convergence.

“For us, it’s much more important to ensure that we grow a profit,” he said. “I don’t care about rankings. I care about what’s sitting in the bank account. And so part of this is really thinking about a profitable, sustainable company with brands that allows us to do stuff and be more nimble, quite frankly, as we start to develop new products, and we come to market with new products.”

Molson Coors acquired Saint Archer in 2015, marking the company’s first craft acquisition in California, the country’s largest craft beer market. Under Tenth and Blake, Saint Archer’s volume peaked at 65,000 barrels in 2019.

Saint Archer’s output declined -15%, to 55,000 barrels in 2020, making it the fifth largest brand among Tenth and Blake’s seven craft breweries.

Molson Coors placed significant investment in Saint Archer Gold, the company’s health-and-wellness challenger to Anheuser-Busch InBev’s Michelob Ultra, in early 2020, promoting it with a Super Bowl ad that featured pro skateboarder Paul Rodriguez skating from store to store in search of the beer while whistling along to Guns N Roses’ “Patience.” But the company was impatient with the new product and announced its hibernation seven months later.

and get feedback and just see how it does for now,” she said. “And then see where it goes in the future.”

Should Hop Splash graduate to retail, the brand would face competition from several existing hop waters, including Athletic Brewing’s Daypack, Lagunitas’ Hoppy Refresher, Hop WTR (with a minority investment from Constellation Brand), Hop Lark, H2OPS, HopTea, Aurora Superior Sparkling Beverages and Oregon Hop Springs, among several others.

Until then, Hop Splash will be sold directly to consumers through e-commerce. Sierra Nevada ramped up its DTC sales capabilities over the last two years of the COVID-19 pandemic, shipping beer directly to consumers in eight states. The infrastructure built during the pandemic and the lack of constraints on sales of non-alcoholic beverages has allowed the company to offer Hop Splash to consumers in 48 states.

Sierra Nevada Enters Non-Alc Fray with Hop Splash Sparkling HopInfused Water

One of the nation’s largest craft breweries is dipping its toe into the non-alcoholic beverage space. Sierra Nevada Brewing Company has launched its first non-alcoholic product, Hop Splash, a sparkling water infused with Citra and Amarillo hops.

Sierra Nevada began pre-selling Hop Splash (zero calories, carbs and sugars) via its website on January 3. Shipments will go to the lower 48 states with orders limited to no more than four 6-packs at $10 apiece, plus shipping costs ($5 for up to two 6-packs).

Robin Gregory, Sierra Nevada’s director of communications, said the craft brewery is testing the product first with direct-to-consumer sales to gauge interest and gather feedback before exploring taking it to retail.

“We felt pretty confident that we could launch this online