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The Ally You Need, Today And Always

Whether in boom times or those of uncertainty, trusted and reliable partners will always be your most valuable assets. It’s why Zuckerman Honickman, which has supported beverage brands with consistent service and innovative packaging solutions for over a century, is the preeminent resource for our industry.

A name synonymous with beverage packaging, Zuckerman Honickman has operated without interruption during the most challenging moments in our country’s history and always delivered the highest value to its clients, which have ranged from entrepreneurial companies to those marketing iconic brands including Pepsi, Vitaminwater, Honest Tea and Bai.

“When you’ve been around for 100 years you have to have insight all along the way to stay successful,” said Ken Sadowsky, the senior food and beverage advisor for global investment firm Verlinvest and known as ‘The Beverage Whisperer.’ “That comes with the right people, at the right time and the integrity and that are cornerstones of generational success in business. That is harder these days given the rapid rate of change that is happening today in the world.”

THE EARLY-STAGE ADVANTAGE A hallmark of the company’s business model is its commitment to working with early-stage entrepreneurs. Years before Keurig Dr Pepper acquired Bai for $1.7 billion

dollars, the brand was, like many in its cohort, small and relatively unproven. Nevertheless, Zuckerman Honickman was ready and willing to work with the founding team on a packaging strategy that would support the brand’s unique positioning and its ability to scale.

“From our days at Bai and now with Crook & Marker, we’ve enjoyed a longstanding partnership with Zuckerman Honickman,” said Ken Kurtz, former president of Bai and current CEO of spiked beverage brand Crook & Marker. “When you are a young, entrepreneurial company looking to expand quickly, having a packaging partner that understands your needs and vision is critical. The team at Zuckerman Honickman has a unique ability to help companies like ours solve for early stages of growth through the highest-quality packaging, which has supported the strength of the industry overall.”

Praise for Zuckerman Honickman’s dedication to trust and open lines of communication is common among highly successful brands aligned with the company, especially those that have disrupted traditional beverage categories and paved a path for others to follow.

“Building successful beverage brands requires reliable supplier relationships and Zuckerman Honickman has been more than a supplier to us; they are true partners and have come through for us at every stage of the BODYARMOR business,” said John Camus, VP Operations, BODYARMOR. “I have personally worked with Michael Zuckerman and his team for more than 20 years, and they have never let us down.”

LEADING THE WAY IN DISRUPTIVE AND INNOVATIVE PACKAGING

And while Zuckerman Honickman’s expertise in traditional package types is unsurpassed, the company has maintained a focus on cutting edge technology to support new product launches that will resonate with modern consumers.

“When it’s time to think outside the bottle, I reach out to Zuckerman Honickman,” said Todd Carmichael, Co-Founder/CEO, La Colombe Coffee Roasters. “Their ability to immediately understand our vision is remarkable, making any project that much more enjoyable and ultimately more successful.”

The company has long been on the front lines of sustainable packaging solutions, including the introduction of the first 100 percent recyclable PET bottle, a package that has since been embraced as a standard for plastic containers. And amid surging consumer demand for biodegradable bottles, Zuckerman Honickman partnered with Pulp Packaging International (PPI), a manufacturer of environmentally sustainable bottles made from molded pulp. The two companies are united in their efforts to bring PPI’s patented, disruptive technology to beverage suppliers across the world -- and at an affordable cost.

“When Pulp Pak was looking for a distribution partner in the early stages of our business, we were

referred to Zuckerman Honickman,” Lee Green, CEO, Pulp Pak International. “After a short time we knew they were the right partner for us because of their knowledge of the industry, experience and forward-looking vision. Now we have expanded into other industries with Zuckerman Honickman by our side. I couldn’t be happier about our decision to work together.”

Zuckerman Honickman President Michael Zuckerman has spearheaded the company’s innovation strategy, which has produced an evolving portfolio of packaging options that can meet the needs of companies at any stage of development.

“Innovation is, always has been and always will be a focus of ours,” Zuckerman said. “Over the last several decades we have participated in major pivots within the beverage packaging space. Our focus now is decidedly on sustainability and expanding our renewable offerings. We have a dedicated sustainability department with the sole focus of sourcing and implementing our program.”

In addition to its relationship with Pulp Pak, Zuckerman Honickman has also signed an exclusive supply agreement with ecofriendly plastic company Timeplast. Timeplast specializes in the molecular disintegration of plastic at the point of manufacturing by pre-upcycling plastic and making it more recyclable than its virgin counterpart.

Meanwhile, Zuckerman Honickman is also heavily focused on aluminum beverage cans, which are increasingly utilized among beverage companies because of their recyclability and favorable economics.

“Cans send a very positive green message,” Zuckerman said. “The economics are hard to deny as well, and this has resulted in cans being the fastest growing package segment in our company. Our supplier partnerships have enabled us to grow this segment throughout the years, almost exponentially. We continue to focus heavily on cans and firmly believe that the aluminum beverage can segment will continue to thrive in the U.S. beverage industry.”

RELATIONSHIPS, FIRST AND FOREMOST

With each new partnership comes a willingness by Zuckerman Honickman to support clients in every aspect of the beverage industry. The company’s network of suppliers, distributors and investors,

The Zuckerman Honickman name is synonymous with packaging.

For over a century, they’ve been a leader in the beverage industry. Look around and you will find Zuckerman Honickman bottles everywhere.

curtated to meet the needs of contemporary brands, provides a massive advantage for newcomers to beverage. “I came into beverage from the snacks industry, and I needed someone who could help me build the roadmap of relationships in the business,” said Jason Cohen, CEO, Halen Brands, which markets OWYN plant-based protein drinks. “Zuckerman Honickman should not be looked at as a bottle supplier, but as a friend and advocate who can help you with every aspect of the business. Michael Zuckerman hangs his hat on helping customers with proper introductions to distributors and other entrepreneurs to help you gain confidence and velocities in those relationships. My whole career is looking for people who can make one plus one equal three, and Michael is one of those people.”

A commitment to success is the foundation of every relationship between Zuckerman Honickman and its clients. That dedication is grounded in the integrity, expertise, values and trust that the company has cultivated since its inception and is the reason that fast-growing brands turn to their team for winning solutions in a rapidly evolving marketplace.

“Zuckerman Honickman has been a trusted partner of ours since our very first can, which was a decision we made in January 2015 and wanted to launch at Expo West two months later,” said David Kimmell, SVP Operations, Spindrift. “From that start they have proven to be nimble, tenacious and strategic. I am an operator that very much believes in doing everything in-house to maintain ultimate control, except in rare instances where an outside resource can provide me true value, and Zuckerman Honickman provides me that. Spindrift would not be where it is today without Zuckerman Honickman and there is no higher praise I can bestow on them than that.”

The true value of a relationship is often measured in the length that it exists, and industry veterans who know and have worked the Zuckerman Honickman team attest to their willingness to move mountains for their clients. It’s a fact that has existed for decades and will continue to be true in the years to come.

“I have been involved with beverages for 29 years now,” said Barry Nathanson, Publisher, BevNET Magazine. “In that time I’ve been witness to great success and epic failures. That’s the nature of business. Yet, more important to me is the integrity, honesty and accountability of companies that I’ve had the pleasure of knowing and observing. Zuckerman Honickman is at the top of my list of companies I admire. They epitomize all that is good in humanity and civility. The relationships they forge and the sincerity of purpose in their business and personal relationships has been a joy to watch for all these years. They really get it. The industry is in a better place because of this storied company.”

191 S. Gulph Road King of Prussia Pennsylvania 19406

P: 610-962-0100 F: 610-962-1080 www.zh-inc.com

“Zuckerman Honickman has been more than a supplier to us; they are true partners and have come through for us at every stage of the BODYARMOR business...”

JOHN CAMUS

VP Operations • BODYARMOR

Cann Partners with Tove Lo to Launch First Caffeinated Flavor

Cannabis-infused “social tonic” maker Cann has partnered with Swedish pop star Tove Lo for its latest product launch: Peach Passionfruit Maté, a limited edition caffeinated beverage infused with THC.

The new product represents a step into a new functional space for Cann, which has mainly developed innovations for its low-dose THC and CBD-infused beverages around pack size and format. The drinks are available in 12 oz. tall cans (in line with its Hi Boy line) and contains 65 mg of caffeine sourced from maté and 5 mg of THC. The retail price for a 4-pack is $20.

Cann co-founder Luke Anderson said Peach Passionfruit Maté was developed in partnership with singer Tove Lo, who is an investor in the company and was Cann’s fi rst celebrity ambassador. Lo, who is known for her albums Blue Lips and Sunshine Kitty (as well as co-writing the Grammy nominated Ellie Goulding song “Love Me Like You Do”), selected the fl avor combination. As Anderson noted, peach and passionfruit are “delightfully playful sexual innuendos, which is her brand.”

The line also marks Cann’s fi rst retailer-exclusive product via a partnership with California cannabis dispensaries Sweet Flower (Los Angeles) and Airfi eld Supply Co. (San Jose). Peach Passionfruit Maté will be available for at least a year, Anderson said, but the company may look to expand the product into a full caffeinated line in the future.

Modeled after maté vodka cocktails, popular in the German club scene, Anderson said he had long wanted to produce a beverage using maté. While Cann’s product is not the fi rst THC-infused drink on the market to feature caffeine (several infused cold brew coffee brands exist, including Somatik), there have been few THC-centric energy drink plays. For Peach Passionfruit Maté, Anderson said the company wanted to keep the caffeine content relatively low so that consumers can have multiple drinks in a night.

“All social drinks have caffeinated options — espresso martinis, Red Bull vodkas, and I mean, Four Loko obviously,” Anderson said. “But by putting caffeine and alcohol together it can create a whole wave of issues. But we’re going ahead and making the statement that mixing THC with caffeine is not actually dangerous, and it can enhance the experience and make it more social than if it were just THC on its own.”

Lo will also play a signifi cant role in marketing the new product both as a social media ambassador and as the face of the product on in-store displays, which through the Sweet Flower and Airfi eld Supply Co. partnerships will mark a major step up in in-store marketing efforts for Cann. Anderson said Lo will be featured in cardboard cutouts, as well as stickers and on shipping boxes, which will receive prominent displays in retail. The dispensary channel has long posed logistical challenges for beverage brands’ ability to merchandise — with no-to-limited cooler space among the biggest hurdles — but this rollout will look much more like a traditional CPG launch.

Anderson highlighted Canadian dispensary LCBO, which recently revised its beverage strategy by putting beverages into a “star” position via prominent merchandising and saw sales skyrocket. For Cann, the experiment has already been successful, with the soft launch resulting in “hundreds of units” being sold.

“It’s a huge change,” Anderson said. “About 90% of the dispensaries in California don’t even have refrigeration that is visible to the consumer, and that is just not how we buy drinks…. So I think it’s not a demand failure, it’s a retail readiness failure. But if we can put good creative behind things we get prioritized, so this is how we’re trying to prove that it can work on a micro level.”

As the cannabis beverage space fi ghts to gain traction in the U.S. (drinks are still just 1% of the legal marijuana market), activity in the category is picking up. Earlier this year, Keef Brands announced expansion into several new states and debuted new beverages infused with less well-known cannabinoids such as CBG and THCv. Also in August, Ayr Wellness entered a binding agreement to acquire Massachusetts-based infused seltzer maker Levia, with $20 million paid in upfront consideration and up to $40 million more to be paid on earn-out.

However, even as Cann faces more competition, Anderson said the company aims to stay ahead by continuing to target young, socially active consumers. The company recently launched a ketofriendly Lite version of its products, made without agave syrup, which he noted has had a strong repeat purchase rate.

Last year, Cann took in about $3 million in revenue, Anderson said, with projections on track to triple sales this year. The products are now available in fi ve states, including California, Nevada, Illinois, Massachusetts and Rhode Island, with Canada, the Pacifi c Northwest, Arizona and the Tri-State area expected to come online in the next 12 months. Other product launches, such as the on-the-go squeeze pack Roadies line, have performed well, Anderson added. Roadies, in particular, could grow to make up about 15% of total sales, he said, while the Hi Boy line has seen strong sales in California.

Next, Cann is preparing to launch a premium “Cann Reserve” line, made with high-end ingredients and fl avors to provide consumers with a more upscale experience.

“When we think about some of our most exciting things in the cooker, we haven’t been able to greenlight them only because it’s too expensive,” he said. “Now we have enough brand equity that people who are really, really interested in Cann might be okay paying 20% more for something that has a really editorial fl avor profi le and ingredients with really good stories.”

Though federal legalization continues to be the biggest hurdle between cannabis-infused beverage brands and mainstream breakout success, Anderson said Cann is not actively involved in any lobbying or regulatory efforts, citing high fi nancial costs that would be better invested into growing the company. However, Cann remains an active voice for legalization and has in particular called for equitable regulations that benefi t BIPOC entrepreneurs whose communities have been more heavily harmed by prohibition and the War on Drugs.

“We believe that microdose THC products should be available in grocery stores,” he said. “It will probably take us a decade to get there, but there’s really no reason they shouldn’t be given how much less dangerous they are than alcoholic beverages or overthe-counter drugs. There’s no reason for them not to be at Whole Foods. So one day, when we have the right people at the table and the access to capital, we will make a push for it. But for now, we’re just gonna keep making good tasting drinks and put ‘em places.”

First Bev Takes Controlling Stake in Health-Ade, Belsito Named CEO

Private equity investment fund First Bev has acquired a controlling stake in Health-Ade Kombucha, the company announced in August. The move comes alongside an executive shakeup for the Californiabased brand, as co-founder and CEO Daina Trout moves into the new role of Chief Mission Officer while First Bev managing partner and beverage industry veteran Jack Belsito is moving from investor to CEO.

As part of the transaction, First Bev (formerly known as First Beverage Group) is acquiring the stakes of two other Health-Ade investors, The Coca-Cola Company and CAVU Venture Partners. Meanwhile, investment group Manna Tree Partners has joined in the deal, adding Health-Ade to a portfolio that includes Vital Farms, Urban Remedy and The New Primal. Exact financial terms of the transaction were not disclosed.

According to Trout, bringing on Belsito — a 35-year industry veteran whose history of scaling international brands includes turns as the CEO of both VOSS Water and Snapple — is intended to help take Health-Ade to the next level. The kombucha brand, founded in 2012, is currently available in over 45,000 doors nationwide and is now reporting over $200 million in retail sales annually, according to the company. Belsito’s skill set will lead a new chapter of growth, Trout said, including international expansion, scaling operations and transitioning to a platform brand by exploring possible M&A opportunities to add new brands under the Health-Ade banner. Belsito has also joined Health-Ade’s board of directors.

In the newly created role of Chief Mission Officer, Trout said her responsibilities will be to continue to drive the brand positioning with a focus on innovation and creative elements. She will work alongside Belsito, with an aim to develop and maintain Health-Ade’s corporate identity as it scales.

“Jack and I are completely lockstep with our vision and I think that’s what really triggered this whole deal — because we were both on the same page of where we wanted to take this thing,” Trout told BevNET. “If you really want to change how consumers see you or really want to be a meaningful, inspirational brand to consumers, that takes a lot of effort and work and that’s what I plan on doing. At the same time, to continue to grow double digits, we need to be in channels that kombucha has never been [in] before and countries that kombucha has never been [in] before, and that’s where Jack will put his effort.”

Health-Ade was among the first significant investments made by First Bev after the fund formed in 2013. According to Trout, the firm’s decision to acquire a controlling stake came earlier this year following a series of sit-down discussions about Health-Ade’s long term business plans. She noted that, in response to the pandemic, many beverage strategics have retracted from M&A to focus on their core portfolios and in-house innovation, making now “the perfect time to buckle down and focus” on scaling and defining the company as “a true champion for gut health.”

CAVU, a firm run by Rohan Oza and Brett Thomas, invested $7 million in Health-Ade in 2016. Trout praised the firm as a “great partner” but noted that First Bev’s plan to grow the brand over the next five to 10 years was not in line with CAVU’s vision for the company, prompting the sale of its shares.

“CAVU has made a really good business out of supporting brands just like ours in their beginning,” Trout said. “They’ve been involved for five years and I think it made sense from a timing standpoint and from a return on investment standpoint for them to move on and continue to do this with other companies. I think when First Bev shared their excitement and desire to ante up for the next three, four, five or 10 years — whatever it’s going to take to really bring this brand to the Nike level for beverage — that wasn’t [CAVU’s] mission and so it was a handshake where they said this is a natural, organic time for us to make this change.”

First Bev will also acquire the stake owned by The Coca-Cola Company, which reportedly invested $20 million into Health-Ade in 2019. Amid the pandemic, Coke has wound down its Venturing & Emerging Brands unit (VEB) to focus on refining its current portfolio. Though Coke itself is still invested in First Bev, therefore retaining an indirect stake in Health-Ade, Trout said it was another example of a mutual parting that made sense for both companies.

Ultimately, Trout said the decision to move ahead with First Bev and Manna Tree as its key investment partners allows Health-Ade to simplify its cap table and craft strategy with a focused group of investors who are all in agreement about the future of the brand.

Over the past year, Health-Ade has aimed to expand its consumer base beyond the core kombucha drinker with a number of new innovations, including prebiotic soda Health-Ade Pop, functional line HealthAde Plus and a line of kombucha-based cocktail mixers. As well, the company this year rebranded its core line with new packaging intended to build around the broader message of happiness and gut health. As the company moves ahead into this next stage, Trout said that owning “gut health” will be key to expanding Health-Ade into the platform brand it aims to be.

The transition also comes as the entire kombucha category has reached something of a crossroads; although kombucha has breached mainstream retail channels, its previously rapid growth has broadly plateaued, even as household penetration remains low. Health-Ade is also not the only company drafting experienced operators to seed the next stage of growth; in July, Brew Dr founder Matt Thomas stepped aside as CEO, with the company bringing in General Mills vet Dan Stangler to act as chief executive.

Health-Ade is profitable and continues to grow double-digits yearover-year, Trout said. But while it has remained among the best performing brands in kombucha regardless of category challenges, Trout said she is now thinking beyond this limited category definition.

“How the category performs is almost not in my vision, because it’s about health and wellness, it’s about gut health, and kombucha obviously is going to play a very important role in that,” she said. “The health and wellness set has expanded a lot, so I think we’re kind of making a mistake by looking at kombucha as its own category. To me it’s part of health and wellness food and beverages, this functional set which is on fire.”

While Health-Ade currently has over 150 full time employees and is likely to expand its team in the near future to support this level of scale, Trout, who started the brand with husband Justin Trout and friend Vanessa Dew, said that for now no other executive shake-ups are planned.

“I think the only shift is going to be me and Jack,” Trout said. “And mine, I really see it as a promotion. So I’m pretty excited to elevate to the Chief Mission Officer role. Honestly, it feels so exciting and I can’t wait to start Monday morning.”

Sensing “Right Time,” Vertical Wellness Debuts CBD Beverage Portfolio

After waiting years to enter the CBD beverage market, Vertical Wellness isn’t wasting any time now that it’s in the door. The Californiabased company is preparing for a wide rollout of a suite of new cannabinoid-infused drinks spanning multiple categories and formats, as it aims to be one of the early national players in the burgeoning CBD market.

For beverage industry veteran J. Smoke Wallin, the president of cannabis brand Vertical who was named as head of its cannabinoid-based health division Vertical Wellness in 2019, drinks represent a particularly timely opportunity. Following the mantra of “wellness and branding delivered with science at scale,” he’s been active in building out the company’s infused product portfolio, which ranges from skin care and topicals (via a licensing partnership with model Kathy Ireland) to CBD strips to pet food. But plans to launch drinks had up until this point been stifl ed, as lack of federal regulation has left many retailers and distributors waiting for revised guidance before proceeding.

Things began to change in March, however, when Southern Glazer’s, the nation’s biggest wine and spirits distributor, changed its long-held position and announced a partnership with Constellation Brands-backed cannabis manufacturer Canopy Growth to carry its fi rst CBD-infused drink in the U.S., Quatreau. The distributor has picked up several more brands in the months since — including Kill Cliff, MAD TASTY and CENTR — while other liquor houses like Republic National and Breakthru Beverage Group have also entered the arena with the likes of Daytrip and Recess, respectively.

The long wait for a defi nitive ruling by federal regulators on the status of CBD in food and beverages hasn’t ended, but conditions on the ground are such that brands now have an unoffi cial green light to operate, according to Wallin.

“We’ve been waiting for the right time,” he said. “The bigger companies have done their risk assessments and have clearly come down on the side of ‘the market is there and the risks are diminishing.’ They’ve decided there will be a ruling in favor of these products that will be forthcoming, or that the FDA is just simply not going to enforce [federal restrictions] and they are comfortable enough with the state regulations that have permitted ingestible in a number of states.”

Vertical’s own response has been defi nitive: the brand has announced plans in the coming months to release three new beverages in select markets. Those include products under existing brands Taos, which will premiere a line of fl avored CBD-infused iced teas in glass bottles, and Hemp Moji, which is positioned as a more playful brand offering a shot line featuring 50mg CBD per TK oz serving, with each tailored to a different functional use: Immunity, Energy, Workout and Sleep.

Meanwhile, the latest release — a six-SKU CBD-infused fl avored sparkling water line featuring 25mg of CBD per serving comes under Vertical’s Just Live brand, which produces infused topical products aimed at helping athletic performance and recovery.

In terms of distribution, Wallin declined to offer further details on retailers or partnerships, citing a forthcoming announcement. However, the products will initially launch in Arizona, Nevada, Oregon, Texas, Florida and Indiana, all states where Vertical’s strong relationships with chain retailers can be leveraged for maximum effect, he noted. At the outset, adding points of distribution will be prioritized over any volume metrics.

As distributors begin opening their doors, Vertical Wellness’ recent merger with Canadian hemp processor CannaFarma, set to close on September 20, is helping provide the company with the resources it needs to meet its growth ambitions. Wallin described the deal as the “catalyst” for Vertical’s entrance into beverages, one that has helped get products on the manufacturing line and enhance its infusion technology but will also put the company in a position to attract more capital as it scales.

“They were looking for a company with our kind of philosophy and our kind of brand portfolio, and also for someone to run the business,” Wallin said. “The fact that I could step in, take over the public company with our brands, and now have access to the kind of capital we need to support them was very exciting for me and for all of our investors.”

That portfolio of brands — each of which is tied to a specifi c consumer, use case and marketing identity, per company strategy — is seen as the key to unlocking the full potential of Vertical Wellness, Wallin said.

“It’s kind of a natural progression from the early brands in the CBD world, which weren’t really brands in the way that are typically defi ned. They were just products that had ‘CBD’ slapped on,” he said, comparing the approach to generic private labels. “Now we’ve got brands that maybe cover more categories than I would necessarily want to, but part of that is about experimentation. At the end of the day, having a focus on who you are trying to serve and what you mean to that consumer base is a winning strategy, and that’s how we’ve approached all our brands.”

Super Coffee Closes $106M Series C Round

Super Coffee closed a $106 million Series C fundraising round in August. The round was led by Maryland-based venture group Durable Capital Partners and included participation by beverage industry veteran Clayton Christopher and former Peet’s Coffee CEO Dave Burwick, as well as another tranche from existing investor and distribution partner AnheuserBusch InBev (AB InBev).

After pitching “close to 50” investors since starting the process in March, CEO Jim DeCicco said the company connected with Durable Capital Partners’ founder and managing partner Henry Ellenbogen through a member of its board. Though most of its portfolio is outside of CPG, Durable has recently made signifi cant investments in food and beverage, including salad chain Sweetgreen ($156 million) and Boston Beer Company. Through the group’s connection with the latter brand, Ellenbourg helped connect DeCicco with its CEO, Dave Burwick, the former head at Peet’s Coffee.

Texas-based Super Coffee, which recently relocated from New York City to Austin, also has a pair of new locally based investors in Clayton Christopher and Doss Cunningham, chairman and CEO of supplement brand and C4 Energy parent company Nutrabolt, who invested through family fund LivWell Ventures.

After initially seeking $70 million on a $430 million premoney valuation, the round closed at $106 million. Around $30 million will go towards cashing out the company’s fi rst 20 investors, composed of friends and family, DeCicco said.

Since launching in 2015, Super Coffee has emerged as a fastrising challenger to established RTD coffee giants in Starbucks and Dunkin’, while also picking up consumers seeking alternative energy and protein drink options. The brand signed a master distribution pact with AB InBev last June as part of a $25 million funding round led by Skyview Capital. Currently marketing formats ranging from cans to multiserve bottles to K-Cups and packaged coffee (plus a line of creamers), the company is on pace for $100 million in sales for the full calendar year, DeCicco said.

The new fi nancing will help fuel Super Coffee’s ambitions to push beyond grocery retail, which accounts for around 60% of the business. That segment helped insulate the brand from slowdowns in c-stores, but with that channel representing nearly half of all RTD coffee sales, DeCicco noted that convenience is its next target. Backing those efforts is 7-Eleven, which invested $2 million through its 7-11 Ventures division and is rolling out four SKUs in cans and bottles to stores nationwide.

Behind the scenes, DeCicco said Super Coffee will continue to support its partnership with AB. The brand’s ACV on its highest-selling SKUs is only around 40%, less than half of what high-sugar rivals Starbucks and Dunkin’ can claim, so “we have a lot to build out” in terms of distribution and incentivizing wholesales, he added. But with no new innovation outside of seasonal LTOs until 2023, Super Coffee will seek to pump up brand awareness, hovering around 2% nationally. Bringing on Chad Portas, former chief creative offi cer at Bai, is part of that effort, with the bigger target being this year’s Super Bowl LVI at SoFi Stadium in Los Angeles. De Cicco said Super Coffee will have a large on-the-ground presence at the event — the idea is to “own” the post-game morning occasion of 6 a.m. to noon, he noted — in support of AB, which is planning to blow out its previous record-high advertising budget for the big game by more than double.

The new funding solidifi es Super Coffee’s position as a direct challenger to Starbucks and Dunkin’, said James Watson, Executive Director of Beverage Research at Rabobank. The brand’s low calorie, protein-added formula gives it a unique better-for-you positioning within traditional RTD coffees, but its cross-over into the broader energy space has the most potential to open up the c-store channel, where hybrid products from Monster and Forto have carved out a foothold, he noted.

Yet while Coca-Cola and Pepsi maintain their legacy brands, most of the category innovation has been fueled by beer companies like AB and Molson Coors, the latter of which is a distribution partner for La Colombe’s RTD lattes. The fact that AB reinvested in this most recent round underlines their ambitions in the coffee space, Watson said.

“For beer companies looking outside of beer, they want the c-store,” he said. “You want a brand that travels well in all the same places that beer does, and that’s what this drink does. Distributors are going to love having it.”

With Assist From New Investor Chris Paul, Koia Set to Enter HBCUs

Beverage maker Koia has landed a major new partner in its mission to popularize and proselytize for plant-based diets: the company announced in August that NBA All-Star point guard and plantbased advocate Chris Paul has joined the brand as an investor.

Paul, most recently seen leading the Phoenix Suns to the NBA Western Conference title, has been a vocal ambassador for the health benefits of plant-based diets, specifically for athletic recovery and performance. But he’s also aligned that thinking into his off-the-court business interests as an investor in Beyond Meat and in GoPuff, which announced in February that it would be working with Paul to bring more plant-based brands on to the platform and introduce those products to students at Historically Black Colleges and Universities (HBCU).

The pact with Koia includes its own HBCU component: starting with a pilot launch this year, Koia will introduce branded vending machines to select HBCU campuses with which Paul has relationships, to be followed by a broader rollout in 2022. In addition, Paul has made a commitment to purchase 50,000 bottles of Koia Straw-nana Dream Smoothie for GoPuff customers nationally, aiming to showcase the brand as an affordable and nutritious plant-based option that can quickly reach underserved communities through the platform.

“My hope for investing in Koia and other change-makers in the industry is that we work together toward a bigger systemic culture shift where underserved communities have access and opportunity to live better, healthier lives,” said Paul in a press release.

Speaking to BevNET, Koia CEO Chris Hunter said the collaboration came together shortly after Paul helped lead the Phoenix Suns to victory over the Los Angeles Lakers in this year’s NBA Playoffs and shared an image on social media of Koia as his “postgame recovery meal.” After getting connected and having a conversation, Hunter said he and Paul developed an “authentic and organic” relationship that facilitated opening the door for a strategic partnership at a point when it wasn’t actively fundraising.

“We really felt like Chris has a presence in different communities than we do,” he said. “We are not traditionally athlete focused. Through Chris and his support of the brand, we believe that other people are already taking notice.”

On the shelf, Hunter said a recent culling of its portfolio — both Coffee and Thrive lines have been nixed after debuting in 2020 — has helped Koia sharpen its focus around the core Protein, Keto and Smoothie offerings. The brand recently had its best off-promo sales week ever at longtime partner Whole Foods, he noted. Meanwhile, at Kroger, Koia has surpassed “benchmark” brand rivals Bolthouse and Naked (along with Suja, REBBL and others) in sales velocity over the last 12 weeks, according to data shared by the company. And in the club channel, Hunter said the brand has been working with Costco to bring to shelf a 32 oz. multi serve version of Straw-nana Dream, the best-selling SKU in its best-selling Smoothie line.

Smoothies have emerged as the brand’s “big innovation bet,” according to Hunter, “because it clearly paints how we are the next $400 million brand.” In contrast, the discontinued Coffee and oat milk-based Thrive lines strayed too far from Koia’s simple message of “low sugar, plant-based and delicious” by reaching into functional ingredients (MCT oil, moringa and various mushrooms, among others) that “didn’t resonate with our consumer base.”

“If we keep it simple and keep with what our brand stands for, we can’t lose,” he said.

Ayr Wellness Agrees Deal to Acquire Cannabis Seltzer Brand Levia

Ayr Wellness Inc. has entered into a binding letter of intent to acquire 100% of Massachusetts-based Cultivana, the parent company of cannabis-infused beverage brand Levia, for $20 million, the two companies announced in August. The transaction is for $10 million in cash and the rest in stock. An additional $40 million will be paid in shares based on performance in 2022 and 2023. The deal is expected to close at the end of this year.

Massachusetts-based Levia only recently launched its line of THC-infused flavored seltzers, but the brand has quickly found its footing. The three SKUs — Achieve (Raspberry Lime), Dream (Jam Berry) and Celebrate (Lemon Lime) — feature sativa, indica and hybrid-dominant blends, each with 5 mg of THC per 12 oz. slim can. The company also recently introduced those same three varieties as water-soluble tinctures. Sourcing its flower from in-state partner cultivators, Levia extracts, infuses and manufactures its seltzers and tinctures at its production facility in Georgetown, Massachusetts.

Despite launching roughly six months ago, Levia has made an instant impact in the company’s home state, where it retains 80% of the market share in THC-infused beverages.

We believe this is a key factor in making Levia an approachable and sessionable choice for new and existing customers and will be key to unlocking many potential consumers who are interested in cannabis but haven’t yet brought themselves to try it.

With anchors in both Nevada and Massachusetts, Ayr Wellness is a multi-state cannabis operator that has been on something of a spending spree as it steadily expands its footprint nationwide. In recent months, fueled by an injection of $120

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million in equity and $110 million in debt fi nancing, the company has acquired Florida-based dispensary Liberty Health Sciences, as well as dispensaries in Illinois, plus cannabis companies in Nevada and Pennsylvania.

The company offers fl ower (Kynd), vapes, extracts (Origyn), edibles, pre-rolls, and topicals. Ayr also markets beverage brand CannaPunch, a line of THC-infused fl avored fruit punch drinks. During an earnings call in August, the company raised its revenue target for 2022 to $800 million. Ayr’s Q2 2021 increased 222% from the same period last year to just over $91 million.

In an email to BevNET, Ayr said that Levia brings the company “into the rapidly-growing infused beverage segment, with an industry-leading formula that provides a fast, predictable onset, and maximum bioavailability that makes sure consumers get the full 5 mg of THC that they paid for.”

More specifi cally, the company said the 15-20 minute onset time for consumers to feel Levia’s effects is a key factor in making the drink approachable and sessionable, critical components of unlocking canna-curious drinkers.

“With a formula that provides consistently great fl avor and zero calories in an infused beverage experience, we believe Levia has enormous potential as an alcohol alternative,” said Jonathan Sandelman, CEO of Ayr Wellness, in a press release. “In just six months since its initial launch in Massachusetts, Levia has become the top selling THC beverage. As we fi nalize our updated national brand portfolio to address all segments and form factors, Levia will play a marquee role in each market where we operate.”

Levia joins a cohort of brands like Cann and Keef Cola developing low-dose THC -infused drinks. According to a recent report from market research group Brightfi eld, cannabis beverages maintain about a 1% share of the recreational cannabis market.

Under NestFresh Umbrella, New Barn Preps Expansion

In June, plant-based food and beverage brand New Barn Organics was acquired by national egg producer NestFresh in a move that promised to allow both companies to provide a broader range of products and give the brand a new runway for growth. Over three months later, that promise is taking shape.

Now with the entire portfolio sporting refreshed packaging featuring bright primary colors intended to help the brand pop on shelf, New Barn is aiming to expand nationwide as a kitchen essentials platform in the curious position of selling both vegan milks and animal-based foods, via an egg line, with new innovations expected to fi ll out its offerings in the coming months.

Speaking to BevNET, Hannah Youngblood, sales coordinator at New Barn, noted that while the brand has faced challenges in the past, its integration into the NestFresh system is poised to support the brand via its robust nationwide operations.

The acquisition involved an unusual structure: NestFresh purchased all assets of New Barn including the brand and products, but the company’s existing shareholders still retain ownership. NestFresh now pays royalties for every product sold and if the brand is ever sold again shareholders will then see returns. Despite this structure, Youngblood said New Barn’s operations have now been entirely folded into NestFresh, giving the smaller company access to its full network of sales, marketing and supply chain support.

At the time of the sale, New Barn was a smaller player in the plant-based milk category. According to IRI, in the 52-week period ending June 13, New Barn’s ready-to-drink almond milks were down -35.7% to $150,000 in sales, while additional milks classifi ed as refrigerated fell -61.1% to $66,100. While the data shows only a limited selection of the brand’s sales, the company had struggled to fi nd its footing in recent years, including a move in 2019 to drop several product lines and scale back its retail footprint to 3,000 stores on the West Coast.

The goal of New Barn’s refreshed branding, Youngblood said, is to simplify its messaging through a color code system (Coconutmilk is blue, Almondmilk is red, etc.) to help the products pop on shelf and reduce consumer confusion. Though the core brand identifi ers are still there, certain tweaks have been made: for one, the barn silhouette in the logo now features a heart. The new 32 oz. cartons also include new callouts, such as the Whole30 Approved badge, non-GMO Project verifi ed and a symbol noting the products use sustainably sourced, dry-farmed almonds.

“When we were thinking about it and brainstorming, we really wanted shoppers to have an almost nostalgic feeling of pulling from a crayon box when they’re going to pick up their product from the shelf,” Youngblood said.

The design was developed by New Barn co-founder Kerry Robb, who shared on LinkedIn in August that the front-ofpack white band “visually widens the carton” — a response, she wrote, to consumers who felt the carton looked “overly thin” on shelf.

Now, NestFresh is looking at how to best expand New Barn’s portfolio under a cohesive vision after several years of cycling through innovations including fl avored almond milks, cold brew coffees, vegan dips and frozen dairy desserts.

The plant-based milk lineup currently features Coconutmilk, Almondmilk and Vanilla Almondmilk (all unsweetened) as well as a non-organic Barista Blend, which will see an organic upgrade rolling out in the near future. Last year, New Barn also launched a line of eggs, initially supplied by NestFresh prior to the deal, in Multicolored and Pasture Raised varieties. Sold in one dozen cartons, the eggs perhaps best refl ect the intertwined nature of New Barn and NestFresh and present an opportunity for New Barn to expand further into premium animal-based products.

According to Youngblood, the brand is aiming to appeal to fl exitarian consumers who prefer plant-based milks but still consume some animal products, with a long term goal of transitioning into a platform brand focused on pantry staples. While the breakfast occasion is the most common day-to-day use for the portfolio, Youngblood added that the products will also be designed with cooking and anytime use in mind.

“What we learned is that a lot of our fans are fl exible in their eating habits,” she said. “And so by incorporating the eggs into the brand, we’re focused on making the staple foods that people actually eat. So that’s almond milk for your cereal, butter for your toast, creamers for your coffee — all things that we eat in the morning — and we really felt that eggs were a perfect addition to our lineup.”

While plant-based butters are not currently listed on New Barn’s website, despite previously being sold, Youngblood said the category is among the focuses for the revamped brand alongside milk and eggs. According to NestFresh marketing manager Sotheary Hom, the company is also developing several new innovations with broad line expansion plans, including new fl avors, seasonal holiday items (hinting at an “egg and almond milk” product), grab-and-go beverages and other products tailored to lactose intolerant consumers.

“I think the strategy going forward is we really want to focus on R&D and get feedback from customers to see what the next big item might be,” Hom said. “So we’re really taking a different approach on launching new items.”

Youngblood said the West Coast remains the brand’s strongest market but the goal is to now bring the products nationwide again. The brand has already rolled out into New England and into Hawaii, with the natural and specialty channel remaining the focus including retailers like Whole Foods, Mother’s Markets and Erewhon.

NestFresh operates distribution centers throughout the country that allows New Barn to go direct to many of its retailers and the brand is also distributed through some DSD partners and UNFI and KeHE, Youngblood said. New Barn’s milks are also sold direct-to-consumer online which has helped to grow the brand in the middle of the country.

“I would say that we’re really committed to partnering with retailers who will support an opportunity to grow in new markets and can be essentially anchor retailers for us in those new markets,” Youngblood said.

Country Archer Launches Mushroom Jerky, Brings on New Executive Team

Meat Snacks brand Country Archer is making moves from grass-fed beef to mushrooms, announcing the launch of a new line of plant-based jerky. The launch comes after the company also added new CPG leaders to its executive team in preparation for its next phase of growth.

Debuting online and then in Sprouts and Whole Foods Markets later this year, Country Archer’s Mushroom Jerky will be available in Hickory, Spiced Bacon and Barbecue fl avors. The plant-based line will retail for $7.99 for a 2 oz. bag, a slight increase in price over the brand’s grass-fed beef and zero sugar jerky.

Unlike many other plant-based jerkies on the market, Country Archer’s line is gluten-free and soy-free, using a base of king oyster mushrooms in place of other meat alternatives such as soy or pea protein. Still, despite the fungi base, the line has four grams of protein per serving and three grams of fi ber.

Establishing a presence in plant-based meat had always been part of the brand strategy since 2019, CEO and founder Eugene Kang said, with the question more a matter of when rather than why.

“Most brands will chase innovation without really looking at data and some proof validation points,” Kang said. “We had conviction that plant-based jerky was going to be a subcategory. I think where we did not have clarity on is what was truly going to move the needle in terms of where consumers wanted it to be.”

To begin setting the stage for the pivot, the company underwent a rebrand in 2020 and also changed its name from Country Archer Jerky to Counter Archer Provisions — a subtle difference Kang said offered it permission to play in more categories. With the new design in hand, and several new beef-based launches on shelves, Kang said, there was time to invest in the new plant-based product without risking the core business.

“I think we’re actually probably entering at the right time,” Kang said. “It’s hard, right? How do you have permission to enter into a category and subcategory, that hasn’t really been proven out yet?”

There are certainly plenty of other plant-based jerkys on the market, with Louisville Vegan Jerky Company, Gardein and It’s Jerky Y’all all offering 100% vegan lines. Meanwhile, both Krave Snacks and Perky Jerky have both launched plant-based options to compliment their meat jerkys and Pan’s, Moku and Eat the Change have both launched their own mushroombased products.

Still, Kang said, in his opinion most of these options fall fl at when it comes to both offering a clean ingredient deck (in particular, avoiding highly processed soy) and great taste. For Country Archer, the goal was to create a product that wouldn’t just appeal to vegans, but instead also fl exitarians. That meant creating a line that had the chew and texture of traditional meat-based jerky.

“Being authentic to who we are as a brand, I don’t think that it would have made sense for us to come out with another soy based protein jerky,” Kang said. “We had to do it in a way that fi ts the broader pieces and ethos of our business, and that’s using real ingredients.”

For that, the company once again partnered with chef Will Horowitz, the owner of (now closed) restaurant Duck’s Eatery, who had also crafted Country Archer’s Zero Sugar Jerky line last year. Horowitz has developed a reputation in the industry for creating whimsical plant-based versions of meat dishes, such as a carrot hot dog or watermelon-based ham.

The resulting jerky is notable not only for its meat-like experience, Kang said, but also because it can be processed using the same marinades and machinery as its meat products, allowing the company to save on costs.

Country Archer is currently sold in more than 17,000 retailers across club, mass, foodservice and natural channels, including Whole Foods Market, Starbucks, Safeway, Costco, Kroger, Target, 7-Eleven and Hudson News. In the natural channel, Country Archer has a 30% share of the jerky segment, Kang said, and launching the new plant-based line will help the company deepen that presence. Plant-based options currently represent 12% of the natural meat snack category across meat snacks, jerky and sticks, he said.

At the same time, the company will seek to avoid cannibalization from its existing core line of meat snacks.

“We want to fi sh where the fi sh are swimming,” Kang said. “What we don’t want to do is introduce [consumers to] plantbased ahead of our core line, because the reality is we still have so much whitespace in conventional, convenience, club and mass with our core jerky line…we have this partnership dynamic that allows us to be a little bit more adventurous in natural, but we don’t have that same level of depth in conventional just yet.”

Going forward, the company plans to explore other ways to also capture fl exitarian eaters either with other plant-based snacks or hybrid products that focus more on reducing meat consumption.

On the business side, the company has also invested heavily in building out its executive team. In June, Adam Razik (the former COO/CFO/Co-founder of Bright Foods and former GM of Kevita) joined as CFO while in May Stephanie Paras (the former VP of operations for RxBar) joined as COO. The duo joins Michelle Flegel (former EVP of sales at Tillamook Country Smoker), who came on in January to run sales.

“You can have the best brand and the best product, but if you don’t have the right talent in place, you literally handicap yourself as a business,” Kang said. “It’s a different level of experience to go north of $100 million and that’s the goal.”

Voyage Foods Seeks to ‘Future Proof’ Favorites via ‘Food Architecture’

Voyage Foods wants to make sure consumers’ favorite foods are around for the next generation. Ironically, the path to ensuring this continuity means eschewing their core ingredients entirely. The company announced it will launch a cacao-free chocolate, peanut-free peanut butter and coffee-free coffee — all made using patented technology and easily accessible ingredients.

Founded in late 2020 by CEO Adam Maxwell, a veteran of “molecular spirits” company Endless West, Voyage has already raised $5.8 million from investors including Valor Siren Ventures and Horizon Ventures.

The company’s ultimate goal is to revolutionize the food industry by offering affordable and sustainable alternatives to products with problematic supply chains — be it contributing to climate change or deforestation or issues surrounding fair labor practices. Other areas of focus also include replicating foods that are associated with food allergies (such as peanut butter) or that utilize crops that may struggle in the future due to climate change (such as coffee). Though some might argue that the best way to create these products would be to fix the existing issues, Maxwell counters by noting that some crops may simply cease to exist given current farming practices.

“It’s inevitable,” he said in reference to crop extinction. “We’re not fixing coffee cultivation in any way, shape, or form, but hopefully we are part of the solution of making sure that as the supply goes down because of environmental changes, and as consumption goes up, that people can still afford to drink a cup of coffee all over the world.”

While Maxwell remains an advisor to Endless West and counts himself an oenophile, he said the impetus to start the company came from a desire to create an “issue-driven” company that could improve the food system. While Endless West showed him that “it’s possible to do the impossible,” in the end, he said, the spirits industry can only do so much for the planet.

“It’s hard to be truly a mission driven spirits company,” Maxwell said. “I have nothing wrong with the spirits industry, but like, at the end of the day, you are selling poison.”

Rather than looking for one solution, Voyage uses a combination of process chemistry, process engineering, analytical chemistry, sensory science and data analytics. Unlike many other plant-based companies, these are all technologies that are readily available. Maxwell said, just utilized in a new fashion.

However, unlike some other food tech players, Voyage does not seek to molecularly match its synthetic products to the original ingredient sources. Instead, its scientists analyze taste, texture, smell and appearance as a whole, and reverse engineer what ingredients could be used to recreate these sensory responses. The result, Maxwell said, is a product that is “decoupled” from its “source material,” instead using the “closest precursor” to that ingredient, but still providing the same experience to the end consumer.

“So much of what we’re doing is based on taking everyday things and transforming them into these value added goods,” Maxwell said.

Because the company looks to utilize easily accessible commodity crops as well as upcycled ingredients, Maxwell said, the product’s nutritional panel is also easy for consumers to understand, with a short ingredient list such as fats, grapeseed, sunflower meal, sugar, salt and natural flavors. It also is non-GMO.

Another point of differentiation comes from production. Maxwell noted, for example, that NotCo purchases “off the shelf” ingredients and combines them, while Eat Just doesn’t do their own extraction or protein purification. Voyage, in comparison, does everything in-house at its Oakland, Calif. headquarters — from scientific research to the processing of ingredients to the manufacturing.

Voyage just recently finished building out its 25,000 square foot plant by using off the shelf equipment that has been modified by Voyage, Maxwell said production is “easily scalable.” The company decided to keep production in-house not only because it allows them to “capture more of the value chain,” but also because it will eventually allow better pricing of its products, he added.

“[Thinking about the] cost margin structure, we want to build an enduring business and we want to be able to have really accessible, cost-effective products,” Maxwell said. “There is the initial capex, but it will pay for itself much faster then I think anyone would believe just based on our cost of goods structure.”

First up, the company will debut its peanut-free peanut butter this November, both in larger foodservice packages and shipped direct-to-consumers in jars. The target market will be shoppers who are allergic to peanuts or restaurants and schools that have had to stop using the ingredient.

For the launch Voyage plans to invest in consumer education, explaining to shoppers that despite its name, its peanut butter won’t cause an allergic reaction, something that differs from other products that seek to molecularly mimic ingredients. For example, Perfect Day’s animal-free whey protein cannot be consumed by those people with dairy allergies.

To support the launch, and future development, Voyage plans to close an “eight figure” round of capital later this year.

The coffee, which will be offered as a ready-to-drink beverage and concentrate, as well as the chocolate, sold in bar form, will hit the market in the first half of 2022. The dual strategy of investing in physical products while also being an ingredient supplier is one that many other plant-based food tech providers — namely Perfect Day, Beyond Meat and Impossible Foods — have all also utilized.

All items will be priced “comparably” to their counterparts in the market, and the goal is to eventually have them priced in line with more commodity options. For example, once Voyage hits five to 10 million pounds a year of chocolate, Maxwell said there should be price parity.

That pricing is important not only to make sure that everyone can still have their favorite cup of joe, but also in order to get large producers to turn to Voyage for ingredients, Maxwell said. As a stand-alone brand, there’s only so far the company can go, yet at the same time, it needs to start somewhere.

“For proof of concept and to validate the technology works and to validate that there is a customer base for it…we will be launching a consumer brand later this year,” Maxwell said. “[But] for thinking about how we can make the most impact and function at the highest scale, then yeah, definitely, we’d have to be on the ingredient side.”

Once Upon a Farm Co-Founder Heads to Coconut Cult as CEO

Moving from youngsters to yogurt, Once Upon a Farm cofounder and president Ari Raz announced in August he has joined Coconut Cult as the company’s new CEO.

As Raz joined the team in early August, Coconut Cult’s cofounder and now former CEO Noah Simon-Wadell also shifted his focus to product development and creative projects in his new role as chief innovation officer. Raz will remain based in San Diego, with the company’s production team of 11 employees continuing to operate from its San Luis Obispo, California manufacturing facilities. Additional team members in sales, marketing and administration will likely work remotely.

Raz co-founded cold-pressed baby food brand Once Upon a Farm in early 2015 and served as the company’s CEO until 2017. At that time, former Annie’s CEO John Foraker took over the role, also becoming a co-founder alongside actor Jennifer Garner, and Raz took on the position of president of the company.

For the last four years Raz has focused on the childrens’ food brand’s e-commerce efforts and specialty sales. When Foraker joined the brand, Raz said, the company needed a more seasoned executive at the helm, but after four years working under Foraker and alongside a team of experts in their respective fields, he feels more confident with his own leadership skills.

“[In 2017] I wanted to lose some responsibility across departments because I did not have the experience required to scale any of those departments as quickly as they needed to be scaled and John knew what to do,” Raz said. “I’ve learned what steps were taken in the short, mid and long term to really turn Once Upon a Farm into a world class CPG operation. I’ve really gotten the full scope of what that entails and I do feel far more ready and far more comfortable assuming this role today.”

The company’s yogurts are currently sold in roughly 800 doors. The products’ unique tart flavor profile, higher price point (on the company’s website, an 8 oz jar is roughly $19 while a 16 oz jar is $39), and labor intensive manufacturing process has put Coconut Cult on a slower growth trajectory, Raz said, adding that his immediate priority will be to bring in additional talent that can help the company quickly add more retailers and new channels.

“My goal is to deliver innovation that will open up new channels — [moving] beyond our current line,” Raz said. “I’m making big shifts in our strategy because we need to make these calls in order to really emerge in a big way.”

To support these efforts, Coconut Cult is currently in the process of raising additional capital, with 35% of the funds closed already and a final round expected to close later this year. Investors in the brand include CircleUp and Able Partners.

Raz declined to comment on the details of any new products, but added that the company is focused on new items that can have a broad appeal because “our current line is not appropriate for many channels.”

To that end, the company also announced that it will discontinue it’s probiotic, plant-based gelato line, which had launched in summer 2019. Raz said for now, he believes the company needs to focus and the frozen line not only “stymied our growth in yogurt” but also was too expensive to produce and margin dilutive. The line may reemerge as a direct-toconsumer option in the future, but for now, is being discontinued entirely.

“The category has such great incumbents as well as new brands coming in and we felt that it would divide up our time and resources to try and grow meaningfully in both categories,” Raz said. “We really believe that we can innovate, and lead the charge on the next great innovations to come to the plant-based yogurt category, and that’s what we intend to do.”

Boston Beer and PepsiCo Partner to Create ‘HARD MTN DEW’

IHOP to Add Beer, Wine to Menus in San Diego and New Mexico

Boston Beer Company and PepsiCo Beverages have formed a partnership to produce “HARD MTN DEW.”

Launching in the U.S. in early 2022, the 5% ABV fl avored malt beverage will be developed and produced by Boston Beer, while PepsiCo has set up a new entity to sell, deliver, and merchandise the product, according to a press release.

“We know that adult drinkers’ tastes are evolving, and they are looking for new and exciting fl avorful beverages,” Boston Beer CEO Dave Burwick said in the release. “The combination of our experience in brewing and developing the best-tasting hard seltzers and hard teas, and Mountain Dew, a one of kind multi-billion dollar brand, will deliver the excitement and refreshment that drinkers know and love.”

While Hard Mountain Dew will have similar branding to the Mountain Dew soft drink, the new product will have no caffeine and no sugar, according to a Boston Beer spokesperson. A fi nal calorie count is not yet available because the recipes are still in fi nal development stages. It will be available in original, black cherry and watermelon fl avors, with a soon-to-be-named fourth forthcoming, the spokesperson said.

Hard Mountain Dew will be available in 24 oz. single serve cans and variety 12-packs of 12 oz. cans.

“For 80 years MTN DEW has challenged the status quo, bringing bold fl avors and unmatched beverage innovation to millions of fans,” Kirk Tanner, PepsiCo Beverages North America CEO, said in the release. “The Boston Beer Company partnership combines two recognized leaders in our respective industries to address the changing tastes of drinkers and we are thrilled at the opportunity to create HARD MTN DEW that maintains the bold, citrus fl avor fans know and expect.”

For now, the partnership is only focused on Mountain Dewbranded offerings.

“As part of our collaborative work, we will be looking for opportunities to innovate together, but currently we do not have any plans to share involving other brands,” the spokesperson told Brewbound. “We’re looking forward to getting HARD MTN DEW on shelves fi rst and then will go from there.”

While the partnership between the two companies is new, their connection through Burwick goes back decades. Before taking the reins at Boston Beer in 2018 following the departure of longtime CEO Martin Roper, Burwick’s career included 20 years at PepsiCo, where he last served as chief marketing offi cer in 2009.

This new partnership is the second time Boston Beer has blurred lines beyond its heritage as an early craft brewery. Last month, Boston Beer announced a joint venture with spirits behemoth Beam Suntory that will cross categories for both companies.

Early products expected to come from the JV include Truly Hard Seltzer-branded spirits, which Beam Suntory will produce, and Sauza Tequila-branded fl avored malt beverages, which Boston Beer will produce.

The release follows several other partnerships between breweries and non-alcoholic beverage producers.

Boston Beer previously dabbled in hard soda in 2015 with a line under its Coney Island Brewing brand, but those fi zzled out when the hard root beer fad ended

Moon (Molson Coors) and Corona (Constellation Brands). However, “locally sourced beers” will also be included. How deep IHOP will go into local craft for its menus remains to be seen. Notably absent from the menus are hard seltzers.

In addition to beer, IHOP is adding mimosas and wines by the glass from E.& J. Gallo Winery, including Barefoot brands Bubbly Brut, Bubbly Chardonnay and Cabernet Sauvignon.

Alcoholic beverages will only be available for dining in, with prices varying by store.

The Nation’s Restaurant News reported that IHOP’s dalliance with alcoholic beverages follows moves by First Watch and Cracker Barrel to add alcoholic beverages to their menus last year. Other fast-casual restaurants have tested and added beer and alcoholic beverages to their menus. That doesn’t mean programs such as this are always successful. In early 2017, Starbucks scrapped its “Evenings” program, which included craft beer, wine and small plates.

Still, with 1,772 restaurants worldwide, there’s a good chunk of business with IHOP to be had for those who can claim it, should the program expand.

Noted pancake purveyor IHOP is soft launching its “Bubbles, Wine & Brews” menu in three of its restaurants in San Diego and New Mexico, with additional locations in New York, Rhode Island, Maryland and Ohio, among others, to follow.

The addition of beer, wine and champagne to the menus of those stores is part of the 62-year-old diner chain’s effort to “pilot, test and learn” how well those offerings are received by guests and gain “feedback to optimize the menu rollout and new offerings more broadly.”

In a press release, IHOP president Jay Johns said the company’s recent “Drinks and Dining Survey” — conducted in July by Toluna, surveying 1,000 adults ages 21-70 — revealed that 66% of recent IHOP guests and 58% of guest ages 21-34 said they want alcoholic beverages to accompany their IHOP meals.

“As we continue to focus and expand on our daytime and evening menu options, adult beverages offer a terrifi c innovation and evolution to enjoy IHOP for every occasion,” he added.

Unsurprisingly, the initial beer list includes offerings from major producers: Bud Light (Anheuser-Busch), Blue

Lone River Rolls Out First National Campaign

Rhinegeist Names Mike Parks as Next CEO

Six months after its acquisition by Diageo Beer Company, Texas-based Lone River Beverage Company has tapped into the marketing resources of its parent company with the launch of its fi rst ever national campaign.

The 60-second commercial at the center of the “Follow It West” campaign, starring Oscar- and Grammy-winning singer songwriter Ryan Bingham, can’t get any closer to the brand’s origin story — it was fi lmed on Calamity Creek, the West Texas ranch where Lone River founder and CEO Katie Beal Brown’s family has worked the land for generations.

“We started Lone River with a simple story, a story 100 years in the making,” Beal Brown said in a press release. “This was always a long play for us, to build a legacy that celebrates the culture connected to Ranch Water. A culture emblematic of the American West.

“We knew the only way to share this story with a national audience was to give people a taste of the real deal – out on our family’s ranch in Far West Texas with the cowboys, cowgirls and ranchers from the area,” she continued.

Beal Brown founded Lone River in 2019 based on the traditional recipe for ranch water, a classic Texas cocktail of tequila, soda water and lime juice, but with hard seltzer as a base. Diageo acquired the brand in March, and it was the best selling ranch water in the U.S. at off-premise retailers in the 52 weeks ending August 14, according to NielsenIQ data cited in the release.

In addition to the original cocktail, Lone River Ranch Water is also available in Spicy, Rio Red Grapefruit and Prickly Pear.

Cincinnati’s Rhinegeist Brewery has named Mike Parks as its next CEO, company founders Bob Bonder and Bryant Goulding announced in a letter to employees in mid-August.

Parks most recently served as CEO of TNT Crust, which makes pizza crusts and is “nearly twice the size of Rhinegeist, with many similarities in its range of departments and employees,” Bonder and Goulding noted.

The need for new leadership comes as Rhinegeist embarks into employee ownership, a change that was fi rst announced in October 2019. Bonder and Goulding wrote that as the business transitions, they wanted to ensure that the brewery and its employees “are set up for success.”

“[W]hen stepping back and refl ecting about what we need to achieve that, it became clear that it’s time for some new leadership,” they continued. “As co-founders, we want to step away a bit and take time for ourselves, but frankly, we just aren’t as good at running a 300-person business as we are at being entrepreneurs. All the employees who are becoming owners deserve a leader who knows how to navigate this stage in a business’s life with passion and experience. Someone who knows how to lead with empathy, empowerment, and a habit of putting employees before themselves.” Each 12 oz. can checks in at 80 calories and 4% ABV. It is available in 48 states and will add Utah and West Virginia to complete nationwide distribution by the end of September, according to a spokesperson.

In addition to the commercial, which depicts Bingham and “real cowgirls and cowboys from West Texas” on horseback, the campaign includes “a large investment” in the fourth session premier of the Paramount Network’s Yellowstone, in which Bingham has a recurring role. Bingham and Lone River have signed a one-year partnership that includes appearances and performances, the spokesperson said.

“When I think of ranch water, I’m instantly reminded of my time spent in West Texas and the way of life out there,” Bingham said in the release. “I think of days working cattle, nights writing songs and a cold beverage at the end of a long day. Lone River is a success because it’s as authentic as it gets. We are on a ranch, we are working cattle and we are building fences — this campaign is the real deal.”

“Ryan Bingham felt like such a natural partner to help us tell our humble story on a grander scale,” Beal Brown added. “His music has been the soundtrack that has inspired so much of our journey, and we immediately connected through our shared roots in Far West Texas.”

The campaign will also include digital, social, audio and out-of-home advertising, as well as point-of-sale support, and “a sizable presence” at the Wrangler National Finals Rodeo in Las Vegas in December.

Bonder and Goulding say they’ve found that in Parks, following a four-month search and interview process that included numerous Rhinegeist employees from multiple departments.

“Mike brings the balance of experience and compassion to lead through whatever this wild obstacle course brings next,” they wrote.

“We’re all looking forward to what he will bring to the table as a leader and co-owner,” they added. “It’s been a wild and wonderful eight years, and we’re confi dent that we’re set up for many more with Mike on the team.”

Parks will relocate to Cincinnati from Baltimore with his family.

Although Bonder and Goulding are stepping back, they said they will remain “co-owners alongside the employees for the next 15+ years.” They will also chair the brewery’s new board “to ensure that the business stays uniquely employee owned, and a part of the community that has supported it since its inception.”

“Thank you to our employees and to the community,” they wrote. “We’ve steered the ship, but you all have really built Rhinegeist. It’s been an incredible journey so far, and we can’t wait to see where this next stage takes us all.”

Rhinegeist fi nished 2020 as the 24th largest craft brewery by volume in the U.S., according to the Brewers Association.

Production Begins at City Brewing’s California-Based Irwindale Brew Yard

Production has begun at City Brewing’s Irwindale, California-based facility, fi ve months after the brewery’s acquisition from Pabst Brewing, the company announced in mid-August.

“With IBY now operational, City is in an even better position to serve the needs of our current and future customers as demand for their products accelerates,” City CEO Ross Sannes said in a press release.

Both City, the country’s largest beverage alcohol co-packer, and 40-year-old Irwindale Brew Yard (IBY) have been subject to several fi nancial transactions in recent years.

One year after announcing it would shift its production to City facilities, Pabst struck a deal to acquire the Irwindale Brew Yard from Molson Coors for $150 million in November 2020. That same month, rumors of City’s sale swirled following an anonymously sourced report in Bloomberg news, which then-CEO George Parke III shot down.

A murky picture became clearer in March 2021 with the announcement of City’s acquisition by a consortium of investors. That group includes Charlesbank Capital Partners, Oaktree Capital Management, City management, and Blue Ribbon Partners — “a new investment platform focused on the beer and beverage industry in the U.S.,” according to a press release about the deal. Pabst co-owner Eugene Kashper is the chair of Blue Ribbon Partners, which also owns Pabst Brewing Company and holds “a signifi cant ownership interest in City Brewing,” according to the release.

City’s new ownership acquired IBY as part of a $630 million investment program announced in March that aims “to accelerate the company’s growth and fund its capacity expansion program to meet growing demand from key customers,” according to the release.

IBY has already launched one production line and will add another this month, City said in the release. A third will come online in January 2022, which will increase the facility’s capacity to 55 million case equivalents annually. Within the next fi ve years, City expects capacity to reach 110 million case equivalents. City’s other three facilities — in Latrobe, Pennsylvania (formerly the Latrobe Brewing Company’s brewery); Memphis, Tennessee (a former Schlitz brewery); and LaCrosse, Wisconsin — produce about 130.8 million case equivalents combined.

City has hired 120 employees to staff IBY, which the company said will be “the largest full-service, low-alcohol beverage contract production facility in the western United States,” once it becomes fully operational. By the middle of next year, the brewery will employ 150 workers and eventually 400 as City follows its plans to build out the facility, a company spokesperson said.

“We have a talented team that is committed to maintaining and building on Irwindale Brew Yard’s storied brewing legacy while ensuring we are capitalizing on the tremendous market opportunity in the alcohol beverage marketplace through a tireless focus on quality,” Sannes said in the release.

The brewery’s output will include hard seltzers, fl avored malt beverages, beer, craft beer, non-alcoholic beverages, and spirit-based, ready-to-drink offerings. IBY will offer automated variety pack capability, which is key for hard seltzer producers, as the majority of the segment’s dollar sales fl ow through variety packs.

IBY’s geographic location is a boon to City customers, including Boston Beer Company, which relies heavily on City facilities to produce Truly Hard Seltzer. Boston Beer founder and chairman Jim Koch explained that contract production at IBY and at Red Bull maker Rauch’s Arizona-based facility will help improve the company’s margins in the second half of the year during a conference call about the company’s Q2 earnings report last month.

“All of those freight costs will be reduced as we begin to supply the western half of the United States from western breweries,” Koch said.

New Glarus CEO Vows to Fight Minority Shareholders’ Lawsuit

New Glarus Brewing co-founder and CEO Deborah Carey called a lawsuit filed in August against her and her Wisconsin craft brewery by three minority investors “slanderous,” and she said she plans to file a counter complaint.

“These things are so egregious and so ridiculous, they’re going to be easy to defend, easy to prove,” Carey told Brewbound. “I’ve got the slander suit all lined up.”

The three original investors in New Glarus claim in their lawsuit, filed in Wisconsin’s Dane County Circuit Court, that Carey breached her fiduciary duties and the company has oppressed minority shareholders.

“Deb Carey operates the company with no regard for established corporate rules and instead exercises complete autocratic control with no personal accountability,” the complaint reads.

The plaintiffs — Steven Speer of Camas, Washington; Roderick Runyan of Lawrence, Kansas; and Karin Eichhoff of Middleton, Wisconsin, who inherited her shares after the 2015 death of her husband Dierk Eichhoff — have owned shares, currently amounting to 12.46% of the craft brewery, since its founding in 1993.

According to the complaint, Speer owns 1.71% of the company’s voting shares and 3.85% of the overall business; Runyan owns 0.46% of the voting shares and 0.91% overall; and Eichhoff owns 3.41% of the voting shares and 7.7% overall. Eichhoff and Speer are the third- and fourth-largest shareholders, following Carey (50.48% of the voting shares and 37.98% of the company) and its Employee Stock Ownership Program (ESOP), which holds 26.6% of the voting shares and 20% of the overall business.

In the lawsuit, the plaintiffs claim that New Glarus has “compiled $100 million in retained earnings and $40 million in cash, and repeatedly refused to distribute any of those profits and reserves beyond the tax distributions that are specified in the shareholder agreement.”

Carey disputes those claims.

“There they are, sending out a press release that no dividends have been paid and Deb’s taken $100 million from the brewery,” she said. “I just got audited by the state, a two-year audit. They started out thinking I was going to owe them this huge amount of money. They owed us at the end over $100,000. You think they wouldn’t have noticed that I pilfered $100 million?”

The lawsuit also alleges that “although the brewery has become extremely successful over time, the defendants have thwarted the reasonable expectations of sharing in the profits and have instead operated the brewery for the benefit” of Carey and her husband, Dan Carey. New Glarus is the nation’s 12th largest craft brewer by volume, according to the Brewers Association. It produced 206,302 barrels of beer in 2020 — all sold within the borders of its home state of Wisconsin.

“Where you see the oppressive conduct is that Deb Carey has given herself more and more control of the brewery, and she gets to decide where the money goes and what’s done with it,” Kevin Palmersheim, the attorney representing Speer, Runyan, and Eichhoff, told Brewbound. “The last straw was this recent shareholder agreement she’s proposing.”

In June, New Glarus proposed a new shareholder agreement that would allow the company to offer shareholders “an annually fixed internal price that could be substantially lower” than offers made by third parties to purchase their shares, and give the company the ability to purchase some, but not all of a shareholder’s shares, which would allow it to selectively acquire more voting shares, according to the complaint.

The proposed agreement also specifies that shareholders are only permitted to donate their shares to New Glarus’ Only In Wisconsin Giving, Inc., a non-profit foundation Carey set up this year, according to the lawsuit, and adds a clause that reads “all parties agree that it is in their mutual interests ‘to preserve local ownership of the brewery.’”

According to Carey, the company presented the proposed agreement with shareholders more than a month before the June meeting and advised them to consult their personal attorneys and come prepared with questions. During the meeting, Speer opposed the changes to the shareholder agreement.

“Steve in particular was upset, and we were like ‘OK, we’ll put a pause on this — let me make these changes that you’re asking for and we’ll send it to you to review and make commentary and see if we can find some middle ground,’” Carey said. “He said he wanted to work with us and was supportive of what I was doing.

“Where in this is oppression?” she asked. “They say, ‘She changed it.’ No, I did not change it, I want to change it. I talked to you about changing it. You don’t think in 30 years, I’m going to propose some changes?”

Carey, her family members and the ESOP that New Glarus instituted in 2015 are not beholden to the shareholder agreement, and Carey does not intend to sign an agreement herself.

“Well, there’s really no reason to,” she said. “I am the founder and the president; my initial contract with the brewery was for three years, and I have worked there for almost 30, so I have given my life and an enormous amount of time and energy to building this business. These people invested a few thousand dollars and stay at home and collect checks. Now, why should I have the same agreement they have?”

Speer — a neighbor of the Careys in Fort Collins, Colorado, before they relocated back to Wisconsin — and Eichhoff’s late husband assisted in the brewery’s formation, according to the complaint. Speer helped the Careys write a business plan and Eichhoff recommended the village of New Glarus as a location for the brewery, “given its old world European charm [that was] suitable for Dan’s beer styles, and a community that would be supportive of the new business, combined with the advantages of the close proximity to the larger Madison metropolitan area,” according to the lawsuit.

In 1993, Speer invested $25,000, which “represented virtually his entire savings” that he had “inherited from his deceased father.” Dierk Eichhoff invested $12,500 and acquired additional shares as the company grew, according to the complaint.

In 2019, the plaintiffs sold some of their voting class shares to New Glarus, which allocated 40 shares acquired from Runyan to the ESOP, but not the 1,250 and 625 it purchased from Eichhoff and Speer, respectively.

“Upon information and belief, the reason for this purchase structure was to retain Deb Carey’s slight majority control of

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the issued and outstanding voting shares and that assigning Eichhoff[‘s] and Speer’s voting shares to the ESOP could lead to Deb Carey owning less than 50% of the outstanding voting shares,” the complaint said.

The plaintiffs’ goal is to sell their shares after a judge determines “a fair value” for them, Palmersheim said.

“Up until May of this year, their long-term goal was to absolutely remain a shareholder,” he said. “They were founding shareholders so they wanted to just remain and work these things out in the New Glarus brewery family. Now they just think it’s just gone on to the point where that’s going to be impossible.”

In regards to the valuation of the company, all parties are in disagreement. The lawsuit alleged that the company “refused to disclose fi nancial information and valuation information to the minority shareholders, even after shareholder requests.” However, Carey said this is untrue and added that the company’s valuation must be calculated annually for its ESOP, which is available for shareholders to see.

“They have at minimum a reviewed fi nancial [statement], the valuation and an annual meeting, plus four communications with their dividend checks,” she said. “I don’t know, what do they think they should be getting?”

The most recent ESOP valuation placed New Glarus’ value between $92.8 million and $113 million, according to the lawsuit. Carey estimated that it’s closer to $100 million. But based on recent acquisitions and other traits about New Glarus, Palmersheim estimated the value is between $350 and $500 million.

“This brewery is extremely profi table for the level of sales that it has,” he said. “It has zero debt; it’s expanded and bought all the land around it and built two new facilities. So, it’s a little different animal than the other craft breweries that I’ve seen.”

Palmersheim said the defendants don’t begrudge the Careys for their success and appreciate Dan Carey’s brewing talent, but want fairer treatment as shareholders.

“I do a lot of these types of cases in representing closely held businesses,” Palmersheim said. “I have never seen a particular case where I’ve seen such an extreme level of majority control and oppression in this particular case with New Glarus Brewery.”

Carey took particular umbrage with the lawsuit’s request that she be forced to step down or step aside for independent directors.

“I started this brewery with $237,000 — that would be a GoFundMe today,” she said. “With $237,000, I had built a multi-million dollar business … and somewhere in America, there’s someone else who can do my job? Please, show me another brewery who has outperformed me.”

Carey sees the lawsuit as the crystallization of a larger issue: Who should benefi t from a company’s success?

“There is a lot of chatter about who should get the money, and I feel like there’s enough money to go around, and I’m really proud of the balancing I’ve done to really take care of my investors, and really take care of my people,” she said. “It’s interesting when this big national conversation gets down to a local level because that’s what you see now. Out of all of my investors, I’ve got three of them that are pissed off, and are going to try to destroy the company. Now, should they get to do that? Are they so important that the rest of the investors and all the employees and myself and my husband should all suffer?”

The fi rst time Carey said she sensed frustration among some shareholders was during the June meeting when she recapped the year and explained how New Glarus did not lay off any employees or cut their hours during the pandemic, nor apply for a loan from the U.S. Small Business Administration’s Paycheck Protection Program (PPP). Speer pushed back against those decisions, she said.

“I, basically in his opinion, wasted money keeping people,” Carey said. “I should have sent them home and saved some money, applied for PPP and all these additional funds.”

In addition to the plaintiffs, New Glarus has nearly two dozen other investors. The complaint said the company has 25; Carey said there are 27. After Carey and Speer’s standoff during the meeting, several other investors thanked her for her stewardship and assured her they were pleased with her leadership, Carey told Brewbound.

Carey colored the lawsuit as “a vendetta” both “personal and political” on the part of Speer, who she said has encouraged the brewery to hire his son, a trained professional brewer. The complaint noted that “one of the plaintiffs’ children was denied employment despite his college degree and experience being specifi c to brewing beer,” and contrasted this with the fact that the brewery has employed the Careys’ daughter Katherine E. May as an architect.

“Steve being upset that we didn’t hire his son is not going to get me to sell the brewery — we’re not going anywhere,” Carey said. “I don’t cave to bullies, and I don’t start fi ghts, but I will fi nish them.”