Beer Marketer's Insights
Gorgie, the very aggressively female-leaning energy drink, said it's closed on a $6.5 mil pre-seed raise dominated by investors in founder Michelle Cordeiro Grant's prior venture, the Lively apparel brand. They included all her lead investors from Lively: Gelmart Int'l ceo Yossi Nasser, ex-Under Armor board member Harvey Sanders and the managing partners of GGV Capital, per announcement. Also in mix were names that are likely to be more familiar to BBI readers: Orgain founder/ceo Andrew Abraham, Food Should Taste Good founder Pete Lescoe and and Thinsters Cookies and ParmCrisps ceo Sammy Kestenbaum, some of whom we'd noted as investors in recent update (BBI, May 24). Also investing as Briogeo Hair Crafe founder/ceo Nancy Twine. No institutional investors were solicited, stance that Cordeiro Grant believes embodies her vision "of a brand with community at its core."
In last week's update on Boxed Water Is Better, we outlined how Mich-based brand has been seeking to drill deeper into key urban markets as its sustainability message resonates more broadly (BBI, Jun 5). One key step was imminent, its execs teased: new anchor distributor for NY. That now has happened, with brand enlisting independent route operators (IOs) who service Tropicana Brand Group in metro NY, as marketing vp Kavita Shah informed us today.
It's proving to be eventful spring at Classic Bev, amid overall distrib biz that's been in considerable flux in Southern Calif. Latest development to drop is that Classic Bev of San Diego will acquire Scout Distribution's San Diego biz unit, as cos announced Fri afternoon. Deal expected to close in Aug and move will result in Classic San Diego increasing to over 1 mil cases annually with new volume from Scout led by Harland Brewing (the brewery owned and operated by Scout Dist co-founders/operators). Recall, Classic Bev last fall sold its LA beer biz to Scout while its parent co (Newport Cove Investment Holdings) simultaneously acquired a minority stake in Scout Dist. And Classic owner/prexy CJ Sanchez sits on board for Scout/Harland parent co, Ocotillo Holdings. So there's a bit of mixing and matching goin' on here. This deal "does not impact" Classic Bev's non-alc biz in greater LA area, or Scout's businesses in LA, Ariz and Idaho (via joint venture with Columbia Dist), announcement stressed. As our sibling newsletters Craft Brew News and Insights Express observed, biggest catalyst for deal was move of JuneShine hard kombucha from Scout Distribution to Stone Dist in Jan, as Scout/Harland cofounder/ceo Jeff Hansson shared in joint chat with CJ. JuneShine represented a whopping 40% of Scout San Diego's gross profit and Scout was paid accordingly for JuneShine brand rights. But co hadda figure out next moves. This deal is about more efficient operations for both Classic and Scout, CJ underscored. Both Classic San Diego and Scout are gonna do between 1-1.3 mil cases/yr but "in smaller geographies" rather than both being "spread across all of SoCal." Scout Distribution sold 2 mil cases in 2022 before losing JuneShine and selling off rest of San Diego. But it has goal to reach 3 mil cases and $100 mil in revs by 2027, and this latest capital injection could also prove to be a "springboard" to reach its goal thru other "brands we can bring on board," said Jeff.
Sales hearing for auction of Bang Energy marketer VPX has suffered another delay, from this Fri to June 26, we hear. The continued extensions are occurring against backdrop of continued sales erosion for one-time #3 energy brand and dwindling cash reserves.
Heading into peak selling season with strong sales momentum and successful transition to Pepsi bottling system, Celsius Energy is setting elaborate slate of alliances and activations built around fitness-oriented Live Fit tour and, increasingly, the more lifestyle-oriented Essential Vibes tour. Given brand's surprising takeup by consumers as a general refresher, it's also looking to tap into sober-curious movement by pairing Celsius with simple ingredients for mocktail menu. And as it seeks to cultivate both fitness and lifestyle appeal, it's looking to venture into booming pickleball sport via a celebrity tourney for which it's still assembling components, marketing evp Kyle Watson told us earlier today.
After long gestation period, Hint Water seems to have ignited in recent years, growing to $143 mil in trailing 52-wk sales, per Nielsen data tracked by Goldman Sachs, and that's not counting big ecomm biz that may comprise 30% or more of total sales. But after winnowing DSD footprint in past years to handful of houses along East Coast, SF-based brand still is leaving sales on the table. Now its ceo of past year and a half, Blair Owens, is ready to re-erect robust DSD network. To get job done, it's recruited the well-traveled bev exec Mike Sharman as svp for sales/route to market, bringing deep experience from rejiggering Snapple, Vitaminwater and Zico Coconut Water routes to retail and helping to erect system that helped lead Essentia Water to its successful exit to Nestle. "Our goal is to fully expand to DSD," Blair told us in brief call today, confirming new hire. "It's critical to getting us to a billion-dollar brand." So count Hint among proven brands that are dialing up their DSD presence, also including likes of Zevia stevia bevs, Spindrift seltzers and Guayaki yerba mate.
MI Wholesaler Assn Sends Notices to Boston & FIFCO USA in Opposition of Blue Cloud Entries
Michigan is latest showdown state for Pepsi's Blue Cloud Distribution and its products and sold by Boston Beer and FIFCO USA as Blue Cloud "recently applied to become a licensed Michigan distributor." MI Beer & Wine Wholesaler Assn prexy Spencer Nevins sent elaborate notices addressed to both Boston ceo Dave Burwick and FIFCO USA ceo Piotr Jurjewicz informing them of MB&WWA's opposition to the relationship between those cos and Pepsi/Blue Cloud in MI. MI "anti-tied house provisions" in MI Compiled Laws "prohibit a manufacturer from having any direct or indirect interest in a licensed wholesaler," notices assert.
Add it to the American vernacular. The phrase "pulling a Bud Light" is now "used by right-leaning commentators to refer to a company misjudging its core consumer base, to the detriment of its brand health," Bernstein's Nadine Sarwat wrote over the weekend. But with Bud Light and AB sales still stubbornly down since controversy began, "why has the hit been deeper and longer than anyone initially anticipated," report asks. And "what do the boycotts mean for managing CPG brands in America today?"
Another small AB distrib deal got inked in spite of exceedingly tuff Bud Light declines. Donnewald Dist closed on acquisition to buy Ronchetti Dist in contiguous mkt of southern IL late last week. Deal adds ~700K cases of mostly AB products to Donnewald portfolio, putting it back over 4 mil cases annually thru portfolio of AB, craft, RTDs, wine & spirits, and several non-alc products. Gotta note, this is the 6th deal INSIGHTS tracked since Bud Light declines started to take hold in the mkt. Majority have been on the AB side and all on the smaller side, between 250K cases to 1.5 mil cases transacting. But deals still gettin' done, especially those that were already in the works and far enough along.
AB Met With 8 Panel Chairs to Discuss Financial Relief; Decision Later This Week? AB Statement
AB sr mgt and ABI ceo Michel Doukeris discussed ideas for financial relief involving revenue enhancements and expense reductions (see last issue of Beer Marketer's INSIGHTS) with 8 wholesaler panel chairman (including current chair). They said they would get back to wholesalers this week. Asked about meeting, an AB spokesperson said: "We are in regular and close communication with our wholesaler partners to share brand programs and business plans as we work together to drive our collective business forward."