Hoplark Restructures, Founder

Eberhardt to Lead Innovation At Labs Division

Colorado-based beverage maker Hoplark is separating into two subsidiaries: Hoplark, which will oversee the core brand as it currently exists, and Hoplark Labs, a tech-driven division that will launch new beverage brands and products under the leadership of the company’s founder, Dean Eberhardt.

The restructuring, announced to employees, which went into effect on January 1, represents a significant new chapter for Hoplark, which debuted its flagship line of non-alcoholic hopped teas in 2018. Created by Eberhardt as a flavor-forward alternative to craft beer, the brand has become one of the fastest-growing names in natural CPG, and has since expanded nationwide into categories including sparkling water and nonalcoholic ‘beer.’

Hoplark Labs is intended to use the company’s learnings from the past four years as fuel to continue pursuing beverage innovations that go beyond the core brand proposition, Eberthardt told BevNET in December. In turn, the move will put the Hoplark brand in experienced hands of former DRY Soda and General Mills executive Betsy Frost, who was promoted from Chief Commercial Officer to Hoplark CEO.

“It’s a super exciting thing for me because it’s really my core passion and the thing I love more than anything,” Eberhart said. “It’s not a normal thing to do four and a half years into a crazy beverage startup, but I think it’s the right thing — clearly the right thing for me and I think clearly the right thing for the company.”

Over the years, Hoplark has built its identity around creative flavors, unique label designs and limited edition varieties like its “explorer” series, and Eberhardt remains committed to those as foundational elements. But he also acknowledged that his “desire to push the envelope on stuff might be a bit distracting.” At the same time, promoting Frost, who joined the company in May, to the top job brings operational expertise at a time when Hoplark is doing “way more than we’ve ever done,” including onboarding 3,000 new doors in an eight-month period.

Eberhardt will remain in his executive chairman role at Hoplark and continue to “support the team at the executive level and at the innovation level,” as well as tinkering with process engineering as needed.

“That cultural separation allows for, most importantly, the Hoplark brand to really finds its identity and lose a bit of some distracting elements of trying all the stuff that we try and different things that have been going on and really focus directly on this incredible market opportunity,” he said.

In Eberhardt’s new role, creating “distractions” is unlikely to be an issue. Though the two subsidiaries will share the same parent company and ownership, he explained that Hoplark Labs plans to create its own brands and products in other beverage categories that will “probably” be separate from the Hoplark brand, in addition to designing and creating beverages for clients. The Hoplark brand will continue to run its own R&D department, but there will be some “overlap” between the two organizations, and Eberhardt didn’t rule out Hoplark Labs developing a product that “gets reinserted back” into its eponymous brand.

“We’re picking our spots for where we think we have a really strong brand voice and perspective, but going to also create it for others,” he said.

As for what may come out of Hoplark Labs, Eberhardt said to expect drinks featuring “real ingredients brewed with craft techniques,” and created with patented tech IP and applications. The past four years have yielded significant learnings on how to work with fresh ingredients — the company does not use flavorings, extracts or concentrates — that have encouraged Eberhardt to push further into bold flavor experiments, some of which require going further downstream in the supply chain. He cited the challenge of finding fresh juniper berries — hard to find in a market set up for dried berries used in gin.

“The other thing that we’re able to do with the technology is extract different layers of flavor than other people are extracting right now,” he said. “So we can extract fresher, brighter flavor notes and characteristics because of how we process it, and because of how we source it to actually turn an ingredient that might be thought of a certain way into a completely different experience.”

Hoplark Labs officially got off the ground in January, but Eberhardt has already laid the groundwork for new partnerships that will be announced within the next few months, he said, likely followed by “thoughtful” product rollouts in specific regions by summer.

On a personal level, the pivot has been unexpectedly revealing for Hoplark’s founder, particularly after spending the last 16 years operating his family’s manufacturing business.

“Although I may be really quite good at (operating and building businesses) the unexpected result of launching Hoplark might be that it’s possible that I’m great at developing innovative taste experiences that connect to market opportunities. I did not totally see that coming.”

KDP to Invest $863M in C4, Enters Long-Term Distribution Pact

Keurig Dr Pepper (KDP) has entered a strategic partnership with C4 Energy producer Nutrabolt and will invest $863 million for a 30% ownership stake in the brand, along with distribution rights, the company announced in December.

Based in Texas, Nutrabolt produces a variety of fitness and workout powders and supplements, including C4 Pre-Workout and post-workout recovery brand XTEND. C4’s ready-to-drink energy line, introduced in 2018, has become its fastest growing product – with retail dollar sales up 140.4% to $299.2 million in the 52-weeks ending November 19, according to NielsenIQ.

According to a press release, the deal is expected to “meaningfully increase retail availability and household penetration” for C4 as KDP onboards the energy drink for mainstream retail distribution. The transition will begin next year.

Nutrabolt will continue to distribute C4 both directly and through its existing distributors for the specialty, health club and fitness channels, as well as continuing to work with some of its existing beverage distribution partners in select markets.

“This partnership represents a win-win transaction between our two companies,” KDP CEO Bob Gamgort said in a statement. “KDP gains significant presence in the rapidly growing performance energy drink market and Nutrabolt gains access to a strategic investor with extensive sales and distribution capabilities to further accelerate its growth.”

KDP’s cash investment was expected to close by the end of the year and will reflect approximately $740 million net of anticipated cash tax benefits. The conglomerate will receive preferred equity with 5% annual coupon paid in cash or inkind and its 30% ownership stake will make it the second largest investor in Nutrabolt, behind founder, chairman and CEO Doss Cunningham.

The investment “represents a multiple below 4x estimated 2023 net sales” of C4, which are expected to surpass $650 million, the release noted.

KDP will also have the opportunity to “earn additional equity tied to in-market execution” and will gain seats on Nutrabolt’s board of directors. KDP also will have the ability to increase its ownership stake in the future “under various capital raising scenarios.”

“This strategic partnership will supercharge C4 Energy’s current growth trajectory by accelerating household penetration, enhancing distribution and strengthening our overall commercial capabilities. We will also be partnering with a talented and ambitious leadership team who shares our values, our competitive spirit and has a similar philosophy of disciplined growth and maximizing overall value creation,” Cunningham said in the release.

The deal marks another major shift in the performance energy space, following PepsiCo’s breakup with Bang Energy and its subsequent $550 million investment and exclusive distribution agreement with CELSIUS last summer. It may also be another blow to independent beer distribution houses who have been subjected to major flux over the past several months as CELSIUS exists and Bang has worked to rebuild its independent network.

It wasn’t immediately clear what the role of influential New York DSD house Big Geyser may be for C4 in the future. While Nutrabolt said it intends to retain select distribution partners for C4, no specific companies were named. Big Geyser previously secured an exception to CELSIUS’ PepsiCo partnership in order to continue distributing the brand.

Among the top selling brands in the new generation of better-for-you and performance energy, C4 was one of the few without a strategic partner. As the space has accelerated, corporations like Anheuser-Busch (GHOST) and Molson Coors (ZOA) have aligned with independent brands.

C4 is not the only performance energy brand in KDP’s portfolio either; the company previously partnered with entrepreneur Lance Collins to launch A Shoc in 2019 and serves as the brand’s national distributor. While A Shoc closed a $29 million Series B funding round in 2022, the brand has often struggled to break out within the crowded energy category. According to IRI, A Shoc sales were down -18.9% to $51.5 million in the 52-weeks ending October 2.

The announcement comes over a year after KDP said it intended to increase M&A activity and improve its distribution network, during an Investor’s Day webcast in October 2021. The company previously acquired Canadian non-alc canned cocktail brand Atypique in June.

An August report that KDP was in talks to acquire Bang Energy at a $2 to $3 billion valuation was swiftly denied by the company.

Ahead of the partnership, Nutrabolt boosted its leadership team; in November the company announced a new CMO, veteran marketer Robert Zajac, and new EVP & Chief Growth Officer Sabba Naserian.