Market Report & Business Overview

PureSource Beverage Company

Market Report & Business Overview 2023

4 Table of Contents 1. Forward..................................................................................................................................1 2. The Company and the Team - 2.1.1 Founding Story..............................................................................................................2 - 2.2.1 Locations & Facilities ....................................................................................................3 - 2.2.2 Premium Retail Locations .............................................................................................4 - 2.2.3 Intelligent Vending Machines .......................................................................................4 - 2.2.4 Social Media Influencers ..............................................................................................5 - 2.2.5 Special Events ............................................................................................................5 - 2.2.6 RangeMe Online Platform .............................................................................................6 3. The Functional Beverage Market - 3.2.1 The Functional Beverage Market ..................................................................................7 - 3.2.2 Consumers with content … .........................................................................................10 - 3.3.1 Opportunity (The Potential of the Functional Beverage Market) ................................. 10 - 3.4.1 The CBD Beverage Market .........................................................................................11 - 3.5.1 The CBDa Beverage Market .......................................................................................17 4. Market Potential of Beverage Companies - 4.1.1 Market Potential of Beverage Companies ...................................................................19 - 4.2.1 Financial Highlights by Year ........................................................................................21 - 4.3.1 Forecast ......................................................................................................................21 - 4.4.1 Why Pure Source Beverage Company (Case Study) ..................................................22 - 4.5.1 Market Drivers.............................................................................................................23 - 4.6.1 Market Restraints ........................................................................................................25 5. Historic Trends and Legal Status - 5.1.1 The History of Cannabis/The History of Tea ................................................................26 - 5.2.1 Historic Trends in Beverage Consumption ..................................................................27 - 5.3.1 Legal Status and Regulations of Different Beverage Categories ................................. 29 - 5.4.1 Public Perception and Trends in the Beverage Industry ..............................................35 6. Current Market Leaders and Their Strategies - 6.1.1 Current Market Leaders and Their Strategies..............................................................36 - 6.2.1 Market Size and Forecast ...........................................................................................37 - 6.3.1 Consumer Demographics and Preferences .................................................................38 - 6.4.1 Regulations and Standards .........................................................................................41 - 6.5.1 Market Analysis of Current Competitors ......................................................................42 - 6.5.1 Alkaline Water Company Inc .......................................................................................42 - 6.5.2 Canopy Growth Corporation........................................................................................43 - 6.5.3 Heineken NV ...............................................................................................................44 - 6.5.4 The Molson Coors Beverage Company.......................................................................45 4

5 - 6.5.5 Aurora Cannabis Inc ...................................................................................................46 - 6.5.6 Tilray Brands, INC .......................................................................................................47 - 6.5.7 CANN..........................................................................................................................48 - 6.5.8 CENTR Brands Corp...................................................................................................49 - 6.5.9 Daytrip ........................................................................................................................50 - 6.5.10 American Premium Water Corp.................................................................................51 7. Sourcing Ingredients and Legal Compliance - 7.1.1 Sourcing Ingredients ...................................................................................................52 - 7.1.2 Choosing Beverage Type ............................................................................................52 - 7.1.3 Formulation Development ...........................................................................................54 - 7.1.4 Manufacturing Process ...............................................................................................55 - 7.2.1 Product Testing and Safety Measures.........................................................................56 - 7.3.1 Legal Compliance and Labeling Requirements ...........................................................58 8. Branding and Product Positioning - 8.1.1 Branding and Product Positioning ...............................................................................60 - 8.2 Product Lineup ...............................................................................................................63 - 8.3 Why HDCa .....................................................................................................................64 - 8.3.1 She’s So Feis-Tea.......................................................................................................65 - 8.3.2 Ain’t Yo Mama’s Tea ...................................................................................................66 - 8.3.3 Activi-Tea ....................................................................................................................67 - 8.3.4 Par-Tea .......................................................................................................................66 - 8.3.5 Tranquili-Tea ...............................................................................................................67 - 8.3.7 Zoom Shroom ............................................................................................................68 - 8.3.8 Flaming Blood Orange ................................................................................................69 - 8.3.9 Lip-Tickler ...................................................................................................................70 - 8.3.10 Strawberry Sling-Shot ...............................................................................................71 - 8.4.1 Traditional Media ........................................................................................................72 - 8.4.2 Social Media ...............................................................................................................72 - 8.4.3 Influencer Marketing....................................................................................................74 - 8.5.1 Online Sales................................................................................................................75 - 8.5.2 Retail Partnerships ......................................................................................................77 - 8.6.1 Consumer Education and Engagement .......................................................................80 9. Marketing & Sales Plan - 9.1.1 Marketing & Sales Plan ...............................................................................................81 10. Financial Plan - 10.1.1 Key Assumptions ......................................................................................................85 11. Summary - 11.1.1 Summary ..................................................................................................................85

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1.1 Forward In the evolving world of functional beverages, where innovation, consumer health consciousness, and cutting-edge technologies intersect, one company stands out in navigating these currents of change: PureSource Beverages.

This report dives deep into the dynamic landscape of the functional beverage market, exploring the opportunity and potential that it holds. As of 2022, the beverage industry in the U.S. alone is valued at over $900 billion and projected to grow to over $1 trillion by 2024. This growth is attributed to high disposable income, rapid urbanization, and changing lifestyles globally.

A closer look reveals the non-alcoholic beverage market, inclusive of soft drinks, fruit juices, caffeinated drinks, sports drinks, and tea, valued at $225 billion in 2022 with a rapid growth trajectory. However, with shifts in consumer preferences and an increased focus on health and wellness, the market for carbonated soft drinks has been gradually shrinking.

In this changing landscape, functional beverages have become a beacon of growth, with expanding sub-categories such as fresh juices, enhanced water, ready-to-drink coffee, probiotic drinks, and an array of tea drinks. Companies like PureSource Beverages, offering healthier alternatives, have thrived due to this paradigm shift in consumer preferences driven by increasing obesity rates and sedentary lifestyles.

The paper delves into PureSource's success in meeting the demands of the increasingly healthconscious new age consumers, especially millennials, who seek functional benefits from their regular beverages. These changing behaviors have given rise to a new category of beverages, aptly dubbed "Miracle Drinks," which PureSource is leading with its line of CBDa teas and sparkling waters.

The report also presents a deep dive into the CBD (Cannabidiol) beverage market, an emerging sector within the global beverage industry. As of 2020, the global CBD-infused beverages market size was valued at USD 3.4 billion and is estimated to grow to USD 14.6 billion by 2026, with a Compound Annual Growth Rate (CAGR) of 27.5%.

In this context, this report explores PureSource Beverages, a pioneering force in the industry.

From market analysis to ingredient sourcing, from branding strategies to regulatory compliance, PureSource Beverage Companies journey is presented in comprehensive detail. This includes their current lineup of innovative beverages, their marketing strategies, the company's founding story, its management team, and its future roadmap.

By combining these elements with a detailed analysis of the competitive landscape and a thorough examination of current market trends and regulations, this report provides an invaluable source of information and insight into the past, present, and future of the functional beverage industry. This narrative underscores PureSource’s commitment to research and 1

development of future products, underpinned by the increasing spending power of millennials and the demand for premium products.

Therefore, this report serves as an extensive exploration of PureSource Beverages and the wider functional beverage industry, highlighting the factors contributing to the rise of this innovative sector. It offers a comprehensive source of information for those interested in the industry's trajectory, illuminating the opportunities, trends, and challenges that lie ahead.

2.1 Founding Story The inception of PureSource Beverage Company traces back to 2017, sparked at a reunion of friends at a wedding. This diverse group, consisting of a scientist, doctor, chemist, business professional, marketing expert, and a retired biker, shared a common goal: they had all decided to quit alcohol. As conversations unfolded around CBD and Hemp – before the passing of the 2018 Farm Bill – a vision started to form. They recognized a shift in the beverage industry, moving away from carbonated sugary drinks towards functional beverages.

Over the subsequent five years, they undertook extensive research on various aspects of this concept, including formulations, market analysis, social media strategies, influencer marketing, and the economics of building a profitable brand. One principle became integral: “It’s got to be fun!” With this ethos, PureSource Beverage Company was born.

The founders view the company as more than just a beverage business; it is a movement. They found inspiration in the many success stories of beverage companies bought out by major brands or those experiencing explosive growth due to loyal consumer bases. In the era of social media influencers and the internet, PureSource found its niche with its vibrant character and captivating flavors.

Their flagship offering, a non-alcoholic, certified THC-free CBDa tea, is positioned as a daily tradition – a little oasis of peace and relaxation in a hectic day. With its numerous health benefits, the aim is to make life more enjoyable and fun.

PureSource Beverage Company was formally incorporated in the state of Delaware, marking its official entry into the functional beverage industry. This collective of friends, turned business partners, were dedicated to breaking the beverage barrier and bringing their functional drinks to the masses.

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2.2.1 Locations & Facilities PowerBrands Formulation and Canning Facility PureSource Beverages are formulated, tested, and processed in a state-of-the-art facility in Southern California. With over 25 years of experience and a member of the American Beverage Association, facilitating America’s only fully vertically integrated beverage innovation systems.

This facility is FDA compliant, Organic, Non-GMO, and Vegan certified. We have small-scale processing capability designed and built specifically for market testing new products, on a small scale. Validating product attributes and quality though central location testing CLT as well as preliminary meetings with our partners and retailers is crucial to our innovation and commercialization process.

Our Product Development division is comprised of the Specialist Trade, Industrial Packaging, and RTD departments that are fully scalable and ready to launch the next big sensation; PureSource Beverages.

PureSource Sales and Marketing Office PureSource Corporate office is moving into a new office space, marking an exciting milestone in our journey of growth and expansion. Our decision to relocate was driven by the increasing demand for our products the need to accommodate our rapidly expanding retail and marketing team. The new office space had been thought fully designed to foster creativity and productivity, with dedicated areas for our sales and marketing teams to collaborate and innovate. Additionally, we will incorporate a small storage/warehouse space, allowing us to streamline our operations and better serve our valued customers. We believe that this move not only reflects our commitment to meeting market demand but 3

also signifies our dedication to creating and inspiring a dynamic workspace for our talented team members.

2.2.2 Premium Retail Locations PureSource Beverages will focus distribution in premium retail locations that align with our brand’s commitment to healthy, wellness and quality. Thes outlets will primarily include high-end supermarkets like Whole Foods, Mothers Market and Sprouts and specialty health food stores, where consumers are more conscious of nutritional and functional product offerings.

Additionally, we will target upscale fitness centers and gyms that offer retail space, as these venues attract a demographic that is already invested in a healthy lifestyle and would be more likely to appreciate the benefits of our functional beverages. We’ll also explore partnerships with boutique wellness centers and select convenience stores that cater to a clientele looking for healthier, on-the -go options. This target retail strategy will not only ensure that our products are accessible to our core consumer base but also position our brand as a premium option in the functional beverage market.

2.2.3 Intelligent Vending Machines (IVM’s) Intelligent Vending Machines have evolved to not only dispense PureSource coldbrewed beverages but also to engage with consumers and keep up with demands.

These (IVM’s) Intelligent Vending Machines have evolved to not only dispense cold brewed beverages but also to engage with consumers.

These touchscreen vending machines are great for high-traffic areas like airports, malls, business parks, and transit centers. It’s easy for a consumer to walk past a vending machine, but an IVM with a large touchscreen will attract consumers who wouldn’t ordinarily stop. With Added video, audio, and 3D animation of product benefits, this will attract more customers and increase sales. Product information can be paired with detailed nutritional information by either image or video multimedia. IVM’s can take Coupons, NFC, Apple Pay, Samsung Pay, and Google Wallet along with standard credit card transactions.

Rapid digitalization and scalability allow for the exponential growth of the PureSource Beverage brand identity.

These breakthroughs in technology and changes in consumer purchase patterns are expected to make way for rapid growth in the future. In addition to Stores and vending machines.

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2.2.4 Social Media Influencers PureSource Beverages will also be available online with an exploding presence through the ever-trending social media influencers. After all, beverage consumers make emotionally based decisions numerous times a day. PureSource Beverages recognizes the incredible power of social media platforms and the profound impact that social media influencers can have on shaping consumer behavior. We’ve chosen to leverage these platforms and collaborate with influential voices in the digital realm for a simple reason: it’s where our community thrives. Our journey towards better health and wellness is a shared experience, and social media allows us to connect directly with you, our valued customers. By partnering with respected influencers who align with our values and mission, we aim to foster authentic conversations, inspire healthy choices, and bring our high-quality functional beverages directly to those who can benefit from them most. This isn’t just marketing; it’s our commitment to transparency, authenticity, and empowering you to make informed choices for your well-being.

2.2.5 Special Events PureSource Beverages will actively participate in a variety of special events that align with our brand ethos of health, wellness, and premium quality. We will target high-profile fitness events, such as marathons, triathlons, and yoga festivals, where we’ll set up booths to give out samples and sell our functional beverages. This allows us to interact directly with fitness enthusiasts who are keen on hydration and nutrition, providing an excellent opportunity to educate them about the unique benefits of our products.

We’ll also be present at health and wellness expos and nutrition seminars, where consumers are actively seeking products that contribute to a healthier lifestyle. In addition, PureSource Beverages plans to collaborate with leading influencers in the fitness and wellness industry to host exclusive launch events, workout sessions, and wellness retreats where attendees can enjoy complimentary samples and purchase our beverages. Through these targeted events, we aim to build brand recognition, drive sales, and create a community of loyal consumers.

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2.2.6 RangeMe Online Platform PureSource Beverage Company is showcasing our beverages on Rangeme Suppliers’ website. The foremost product discovery and sourcing platform that connects retailers and suppliers in the ever-evolving marketplace. This exciting development has brought us to the attention of a wide array of esteemed retailers, from industry giants like Whole Foods, Albertsons/Safeway, The Coffee Bean & Tea Leaf, Kum & Go, Aldi US, and Walmart, to numerous small, boutique retailers. RangeMe has not only broadened our reach but has also provided a unique opportunity for us to introduce our premium functional beverages to discerning retailers who share our passion for quality and wellness. We take immense pride in showcasing our products on this platform, and we look forward to connecting with even more partners who appreciate the healthful benefits and exceptional taste of PureSource Beverages.

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3.1.1 The Functional Beverage Market The functional beverage market continues to experience significant growth, driven by increasing consumer awareness about health and wellness, and the desire for beverages that offer more than just hydration [1].

Functional beverages include drinks such as energy drinks, sports drinks, fortified water, dairy-based beverages, juices, and ready-to-drink teas and coffees.

These beverages are typically fortified with vitamins, minerals, herbs, amino acids, or additional raw fruits and vegetables to provide health benefits beyond their basic nutritional value.

According to a report by Grand View Research, the global functional drinks market size was valued at USD 98.77 billion in 2019 and was expected to grow at a compound annual growth rate (CAGR) of 8.4% from 2020 to 2027 [1].

However, recent data from MarketWatch indicates that the global beverage market, which includes both alcoholic and non-alcoholic beverages, was valued at USD 239105.7 million in 2022 and is expected to expand at a CAGR of 13.77% during the forecast period, reaching USD 518482.36 million by 2030 [2]. Data Bridge Market Research predicts the global Ready-To-Drink market to be 141.85 billion by 2029. This growth is fueled by the increasing demand for nonalcoholic beverages that can provide energy boost, health benefits, and hydration. The market is also driven by the growing trend of fitness and health among consumers, especially among the younger generation.

Figure 1 The global predicted Ready-To-Drink Beverage Market Forcast [35]

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Functional beverages are also gaining popularity due to their convenience as they offer a way to consume nutrients on the go. This is particularly appealing to the busy, urban consumers who are looking for quick and easy ways to maintain a balanced diet [1]. The rise in disposable income, urbanization, and the growing middle-class population in developing countries are also contributing to the growth of the functional beverage market.

In terms of product type, energy drinks hold a significant share of the market due to their popularity among athletes and individuals who engage in physical activities. However, other segments such as fortified juices and dairy-based beverages are also expected to witness growth due to increasing consumer preference for natural and organic products.

The functional beverage market is highly competitive with several major players such as PepsiCo, The Coca-Cola Company, Red Bull, and Monster Beverage Corporation dominating the market. These companies are constantly innovating and launching new products to meet the changing consumer preferences and to gain a competitive edge in the market.

Drawing from the above, it's evident that the functional beverage market is on a trajectory of substantial growth, propelled by a rising health consciousness among consumers and an escalating demand for beverages that offer additional health benefits. The market, while competitive with major players like PepsiCo, The Coca-Cola Company, Red Bull, and Monster Beverage Corporation, continues to innovate and introduce new products to meet evolving consumer preferences. Despite facing hurdles such as regulatory issues and the requirement for scientific validation of health claims, the market presents abundant opportunities for innovation and expansion. The future of the functional beverage market, therefore, appears promising and full of potential.

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Figure 2 U.S. Sales of Non-Alcoholic Beverages 2014-2022 [32].

3.3.1 Opportunity (The Potential of the Functional Beverage Market) The beverage industry in the US alone is valued at over 900 Billion* and projected to grow to over 1 trillion by 2024*. High disposable income, rapid urbanization, and changing lifestyles are the major factors that contribute to the growth of the global beverages industry.

The Beverage industry can further be classified into alcoholic and non-alcoholic categories. The non-alcoholic beverage market includes soft drinks (soda), fruit juices, syrup, caffeinated drinks, sports drinks, coffee & tea. U.S. non-alcoholic beverage market size is valued at 225 billion in 2022 and growing rapidly. The industry will be valued at 235 billion in 2023 and estimated at 238 billion in 2024. Carbonated soft drink (CSD), a popular segment in this market, has been shrinking in size and revenue in recent years.

While the market size for functional beverages is expected to grow and expand in the coming years. This decline in the market share for soft drinks is compensated by the rise in market share for sub-categories such as fresh juices, enhanced water, ready-to-drink coffee, probiotic drinks, and a variety of tea drinks of every type and flavor. This peridium shift can be traced back to the increase in obesity rates and sedentary lifestyle. It is making young and old Americans migrate from carbonated soft drinks to healthier alternatives like PureSource Beverages.

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The global beverage market is driven by consumer demand for premium and super premium products. Due to the increase in the young-adult demographic, coupled with the increase in the spending power of millennials. It is an exciting time to be in the beverage industry. PureSource beverage company is in the right place at the right time with this current beverage line-up while keeping a focus on research and development of future products.

3.2.2 Consumption with Intent New age consumers, mainly social media millennials, are health focused. They are expecting functional benefits from their beverages that are consumed on a regular basis. This behavior is the cornerstone of the PureSource Beverage Company and its rise of a new category of beverages called “Miracle Drinks.” Just what social media influencers are looking for.

PureSource canned beverages combine the two most natural and ancient herbs known to man. Tea leaves and hemp leaves are known around the world as amazingly therapeutic for antianxiety, anti-inflammatory, and anti-aging as well as reducing stress, depression, and sleeplessness. CBDa calms you down and helps in decreasing irritation with a clear head.

3.3.1 The CBD Beverage Market The CBD (Cannabidiol) beverage market is a rapidly emerging sector within the global beverage industry. CBD, a non-psychoactive compound found in cannabis and hemp plants, is being increasingly recognized for its potential therapeutic benefits, including pain relief, anxiety reduction, and sleep improvement [3]. As a result, it has found its way into a variety of consumer products, including beverages.

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According to a report by GlobeNewswire, the global CBD-infused beverages market size was valued at USD 3.4 billion in 2020 and is estimated to grow to USD 14.6 billion by 2026, with a CAGR of 27.5% [4]. The CBD beverage sector forms a significant part of this market, with a wide range of products including CBD-infused water, tea, coffee, juices, energy drinks, beer, wine, and spirits.

The growth of the CBD beverage market is driven by several factors. Firstly, there is increasing consumer interest in health and wellness products, and CBD beverages are perceived as a natural and healthy way to consume CBD [3]. Secondly, ongoing legalization of cannabis and hemp products in various countries is opening new markets for CBD beverages. Finally, advancements in beverage production technology have made it possible to create CBD beverages with a longer shelf life and better taste.

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Despite the promising growth, the CBD beverage market faces several challenges. The regulatory landscape for CBD products is complex and varies from country to country, and even within different states of the same country. This can create uncertainty for manufacturers and consumers alike. Additionally, there is a need for more scientific research to substantiate the health claims associated with CBD.

Major players in the CBD beverage market include Canopy Growth Corporation, New Age Beverages Corporation, and Coca-Cola Co., among others. These companies are investing heavily in research and development, and in marketing and branding efforts to capitalize on the growing popularity of CBD beverages.

To encapsulate, the CBD beverage market is a burgeoning segment within the beverage industry, offering significant growth potential. The escalating consumer interest in health and wellness products, ongoing legalization of cannabis and hemp products, and advancements in beverage production technology are key drivers propelling this market forward. Despite the complex regulatory landscape and the need for more scientific research to validate health claims, companies like Canopy Growth Corporation, New Age Beverages Corporation, and Coca-Cola Co. are investing heavily in this sector. As consumer awareness and acceptance of CBD continue to rise, and regulatory hurdles are gradually overcome, the CBD beverage market is projected to experience robust growth in the foreseeable future.

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The global predicted CBD Infused Beverages market forecast [34].

3.4.2 The CBD Beverage Market The CBD beverage market is a relatively new and evolving segment within the broader CBD market. CBDa is the acidic precursor to CBD, found in raw cannabis and hemp plants. When these plants are heated or aged, CBDa is converted into CBD through a process known as decarboxylation. However, recent research has suggested that CBDa itself may have unique therapeutic properties, leading to growing interest in CBDa-infused products, including beverages [5].

While the CBDa beverage market is still in its nascent stages, it is expected to grow significantly in the coming years. This growth is driven by increasing consumer interest in health and wellness products, and the potential therapeutic benefits of CBDa. Preliminary research suggests that CBDa may have anti-inflammatory, anti-nausea, and anti-anxiety effects, among others [5]. As such, CBDa beverages are being marketed as a natural and healthy way to consume CBD. The CBD beverage market includes a range of products, such as CBDa-infused water, tea, coffee, juices, and energy drinks. These beverages offer a convenient and enjoyable way for consumers to incorporate cannabis into their daily routines.

However, the CBD beverage market also faces several challenges. The regulatory landscape for CBD products is complex and varies widely from country to country [5]. This can create uncertainty for manufacturers and consumers, and potentially hinder market growth.

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Additionally, there is a need for more scientific research to substantiate the health claims associated with CBD. Despite these challenges, the CBD beverage market offers significant opportunities for innovation and growth. As consumer awareness and acceptance of CBD continues to grow, and as the potential therapeutic benefits of CBD are further explored and validated, the market is expected to see robust growth in the coming years.

Major players in the CBD beverage market, such as Canopy Growth Corporation and New Age Beverages Corporation, are likely to play a significant role in the development of the CBD beverage market. These companies have the resources and expertise to invest in research and development, and to navigate the complex regulatory landscape associated with CBDa products.

The CBD beverage market, although nascent, is poised for significant growth, driven by consumer interest in wellness products and potential therapeutic benefits of CBDa. Despite regulatory complexities and the need for more research, the market offers ample opportunities for innovation. With major players like Canopy Growth Corporation and New Age Beverages Corporation leading the way, and growing consumer awareness, the CBDa beverage market is set for a promising future.

Figure 3 CBDa

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4.1.1 Market Potential of Beverage Companies The beverage industry is a vast and diverse market, encompassing a wide range of products from carbonated soft drinks and alcoholic beverages to functional drinks and CBDa-infused beverages. The market potential of beverage companies is significant, driven by several key factors.

Firstly, the global population continues to grow, and with it, the demand for beverages. This is particularly true in emerging markets, where rising incomes and urbanization are leading to increased consumption of packaged beverages. According to a report by Mordor Intelligence, The Beverages Market size is expected to grow from USD 3.49 trillion in 2023 to USD 4.39 trillion by 2028, at a CAGR of 4.67% during the forecast period (2023-2028). [6].

Secondly, consumer preferences are evolving, creating new opportunities for beverage companies. There is a growing demand for healthier, low-sugar, and natural beverages, driven by increasing consumer awareness about health and wellness. This has led to the rise of functional beverages, which offer health benefits beyond their basic nutritional value. The functional beverage market alone is expected to grow at a CAGR of 8.66% from 2021 to 2026 [6].

Thirdly, innovation and technological advancements are opening new possibilities for beverage companies. From new packaging solutions that extend shelf life and improve sustainability, to the development of novel flavors and functional ingredients, innovation is a key driver of growth in the beverage industry.

However, the market potential of beverage companies is also influenced by several challenges.

These include regulatory hurdles, particularly for products like CBDa-infused beverages, as well 19

as the need to adapt to changing consumer preferences and market trends. Additionally, the beverage industry is highly competitive, with several large players dominating the market.

Despite these challenges, the market potential of beverage companies remains high. With the right strategies, including a strong focus on innovation, understanding of consumer preferences, and effective marketing, beverage companies can tap into the growing demand for beverages and achieve success in this dynamic market.

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4.2.1 Financial Highlights by Year As PureSource Beverage Company sets out on its exciting journey, we'd like to provide you with a glimpse of our projected development over the next 6-9 months. We stand at the most fundamental stage of our journey, offering an opportunity that mirrors the commitment of our founders. This phase presents a unique chance to join us at the ground level and become part of the PureSource family.

We are looking to expand our business and revenue over the next couple of years and have planned strategic growth initiatives to achieve this. Our goal is to increase the company's value significantly, aiming to provide substantial returns to our early supporters.

Investing in the CBDa beverage market today is an intelligent move. As regulations around cannabis and its derivatives continue to evolve and consumer interest grows, we expect the sector to see substantial growth. By joining PureSource Beverage Company now, you'll be positioning yourself at the forefront of this burgeoning industry.

We plan to achieve substantial growth while ensuring that our business remains enjoyable. Our primary goal is to generate profits, but we also believe in the importance of maintaining a fun and exciting working environment. As part of the PureSource family, you'll not only share in our success but also our commitment to building a vibrant and positive company culture.

Looking ahead, we envisage rewarding our shareholders significantly as we continue to grow, either through dividends or potentially considering buyout offers. As a member of the PureSource family, you will have a voice in our future strategic decisions through your voting rights. This is more than just an investment; it's a partnership.

4.3.1 Forecast CBD alone is projected to be a 100 Billion Dollar Market over the next few years. Consumers, especially those from GenZ, GenX and Millennials are looking for healthier options than the traditional Soda’s their parents grew up on. One of the best ways to market our creative branded beverages is with Social Media Platforms & Influencers.

Influencers have an enormous number of followers that tend to actively seek out and buy the products they represent • 3.9 Billion people use social media • 97% of fortune 500 companies rely on social media PureSource personalities are social media stars! Our products are right in line for this vast market as CBD & Beverages fits perfectly into the trend of functional beverages, cool characters, Millennials, GenX & GenZ coupled with the social media surge taking place right now! On the heels of the COVID19 21

pandemic we all just lived through – There has never been a better time to be a part of a shop on-line movement than right now!

4.4.1 Why Pure Source Beverage Company PureSource Beverage Company was conceived in 2017 amongst a group of friends that reunited at a wedding. These friends worked in a variety of professions and in some cases worked together on projects over the years. All nine of them had very diverse backgrounds, including a few business owners, a scientist, a doctor, a chemist, a couple of marketing experts, and one retired biker.

We have dedicated numerous hours of research in all aspects of this concept, including formulations, market analysis, social media, influencers and micro influencers, and the economics of building a brand that was not only profitable, but all agreed it was equally important to them that, "It's got to be fun!” For us it’s more than just a beverage company – It’s a movement!

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4.5.1 CBD Market Drivers Why is the CBD market growing?

The growth of the CBD consumer health market is attributed to the rising awareness about CBD products and the rapid acceptance across the globe, fueling the demand for CBD compounds for consumer health purposes. CBD also became popular because it provides the benefits of cannabis without intoxication. The compound has been used since ancient times, but until recently, it was only available as a supplement or extract.

The use of non-Food and Drug Administration (FDA)-approved cannabidiol, or CBD, has gained attention in recent years, as CBD is becoming increasingly popular and is being marketed for various health conditions.

CBD, a compound found in cannabis, is gaining popularity due to its potential health benefits such as alleviating anxiety and stress, enhancing sleep, and providing pain relief. CBD and Hemp-Derived beverages serve as a simple, accessible way for consumers to ingest CBDa, and come in a wide range of forms and flavors, including teas, sparkling waters, and juices.

Given their non-alcoholic nature, they present a healthy substitute for those looking to minimize their alcohol consumption. With low sugar content and a suitable amount of cannabis, CBDa beverages are increasingly preferred by consumers. As numerous countries legalize marijuana for both medical and recreational uses, it is anticipated that the production and demand for cannabis-infused beverages will surge.

CBD and cannabis usage is on the rise in treating ailments like neurological disorders and cancer, and in managing pain, which drives the demand for cannabis beverages. Its wideranging applications present ample opportunities for market growth. There is a growing consumer interest in cannabis edibles, including infused products like beverages, tinctures, chocolates, leading to overall market expansion.

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As consumers increasingly opt for alternatives to smoking cannabis, the demand for concentrated and infused products like beverages is likely to grow. Cannabis beverages are set to take over other marijuana-infused consumables like chocolates, cookies, brownies, candies, and gummies, which are perceived as less healthy. This changing consumer preference is expected to significantly bolster the demand for cannabis drinks in the upcoming period.

The broadening acceptance and legalization of cannabis and CBD products have played a crucial role in driving the demand for wellness drinks in the US. With more states legalizing cannabis use either for recreational or medicinal purposes, the societal stigma associated with CBD is fading, leading to increased consumer acceptance. This cultural shift encourages consumers to explore CBD infused products, including beverages, to reap their potential health benefits.

The burgeoning wellness industry, emphasizing holistic health approaches, has been a key factor in increasing demand for CBD and Hemp Derived beverages. Today's consumers are seeking more than simple hydration from their beverages; they are on the lookout for functional drinks offering additional health benefits. HDCa aligns perfectly with this trend, providing a healthier alternative to conventional energy drinks and sugary sodas.

Starting at the beginning of 2018, the World Anti-Doping Agency (WADA) removed CBD from the list of prohibited substances – in or out of competition. (Here is the 2020 WADA Prohibited List.)

In 2022, MLB became the first professional sports league in the US to enter into a sponsorship agreement with a CBD company, and individual teams can sell sponsorships to CBD businesses. In 2019, it was the first professional league to remove cannabis from its list of banned substances.

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4.5.2 Market Restraints While addiction to cannabis is less prevalent than substances such as alcohol or opioids, it's still a possibility, especially for individuals predisposed to substance use disorders. Frequent or heavy use of cannabis could lead to dependence and withdrawal symptoms, highlighting the importance of moderation and responsible consumption.

Impacts on respiratory health should not be ignored, especially for those who choose to consume cannabis through smoking or vaping. Inhalation of cannabis smoke or vapor can irritate the lungs, leading to respiratory problems, like the effects of smoking tobacco.

Regulatory challenges in the cannabis market, including cannabis beverages in the US, inhibit product approval and market penetration. Primary concerns include testing, safety, and packaging requirements that are subject to frequent changes. Rigorous testing to assess potency, quality, and safety is required, yet the establishment of testing facilities can be expensive and time-consuming for manufacturers. Packaging regulations are continuously updated to balance safety and industry needs, leading to extra costs for producers. Compliance with evolving standards necessitates constant product monitoring and re-labeling, adding pressure to businesses. The mosaic of state-level regulations in the USA complicates matters for companies operating across different regions.

Overcoming these hurdles requires cooperation between industry players and regulatory bodies, as well as investment in research and development to improve product safety and credibility. In addition to federal regulations, state regulations also apply to CBD products. Some states have legalized the sale of CBD products, while others maintain more restrictive laws. For instance, California mandates that CBD products include a disclaimer stating, "This product is not intended to diagnose, treat, cure, or prevent any disease." As of 2023, the U.S. Food and Drug Administration (FDA) has not approved CBD as a food additive or dietary supplement, maintaining that CBD has not met the necessary safety requirements for these uses. As a result, the FDA has issued warning letters to several companies marketing CBD-infused products with unsubstantiated health claims.

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5.1.1 The History of Cannabis/The History of Tea Cannabis use can be traced back to 10,000 years ago, when it was believed to be the oldest cultivated fibrous plant. Archaeological evidence shows the use of fibers in 8000 BCE in Taiwan for robes, pottery, textiles, fishing nets, and clothes, as well as the seeds that were a staple part of their diet. However, the medicinal uses of cannabis were not recorded until 2700 BC in ancient China by Emperor Shen Nung, who is referred to as the “Father of Chinese Medicine.”

The medicinal uses for cannabis have been recorded in the world’s oldest pharmacopeia, the “Pen Tsao Ching”, where the recorded uses at this time revolved around rheumatism,

Figure 4 2700 BC Emperor Shen Nung referred to cannabis as "Father of Chinese Medicine."

menstrual pain, gout, malaria, and “absent-mindedness.” The Pen Ts’ao Ching, although modified to current day herbalism, is still in use to this day, 10,000 years later.

From ancient China to India, cannabis was referred to as “Sacred Grass” used both for psychoactive and healing purposes. In Africa, cannabis was used for optic healing as well as for female ailments. Whatever region it may be, including both Europe and America, cannabis has been deeply embedded in the culture and medicine one way or another. Skipping to modernday times, cannabis is globally recognized, as one of the most ancient and promising plants in medicine. New research consistently emerges on the next new “cannabinoid” or cannabisderived compound used for medicinal purposes. The applications for cannabis are endless, wherein the United States and throughout the rest of the world, cannabis has dominated many global industries and marketplaces.

The history of tea dates to ancient China, almost 5,000 years ago. According to legend, in 2732 B.C. Emperor Shen Nung discovered tea when leaves from a wild tree blew into his pot of boiling water. He was immediately interested in the pleasant scent of the resulting brew and drank some. Legend says the emperor described a warm feeling, as he drank the intriguing 26

brew as if the liquid was investigating every part of his body. Emperor Shen Nung, also known as the “Father of Chinese Medicine” was responsible for discovering both cannabis and tea for their strong healing powers of natural origins.

From ancient China, tea was introduced to Japan by Buddhist monks after the Tang dynasty.

Originally, mostly consumed by royal families, tea was a luxury in Japan in its early introduction stages and stayed this way for hundreds of years. Drinking tea was used medicinally, but also became a ritualistic part of the culture, and is now an inseparable aspect of this heritage.

Various types of tea plantations were established throughout the continent for hundreds of years thereafter. The spread of tea to Europe did not occur until the 16th century when it slowly but firmly became a way of life.

As the second most popular drink in the world after water, tea is the universal beverage with medicinal benefits ranging from immune support with anti-inflammatory properties, weight loss and gut health, as well as cancer-fighting properties. “Tea is considered the Panacea of all ills,” loaded with antioxidants and other special components that are integral in promoting health and well-being overall.

5.2.1 Historic Trends in Beverage Consumption The history of beverage consumption is as old as civilization itself, with different beverages gaining and losing popularity over the centuries. However, the past few decades have seen significant shifts in beverage consumption patterns, driven by changes in consumer preferences, lifestyle changes, and technological advancements.

In the early 20th century, the beverage market was dominated by alcoholic beverages and basic non-alcoholic beverages such as tea, coffee, and milk. The mid-20th century saw the rise of carbonated soft drinks, with brands like Coca-Cola and Pepsi becoming household names worldwide. This was driven by factors such as urbanization, the growth of mass media, and the development of modern retail [7].

However, the late 20th and early 21st centuries have seen a shift away from carbonated soft drinks towards healthier alternatives. This has been driven by increasing consumer awareness about the health risks associated with high sugar consumption, as well as a growing interest in health and wellness. As a result, there has been a surge in the consumption of bottled water, fruit juices, and functional beverages that offer health benefits beyond basic nutrition.

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The decline in American soft drink consumption 2003 - 2014 [32].

Another significant trend in recent years has been the rise of specialty beverages such as craft beers, artisanal spirits, and specialty coffees and teas. These products cater to a growing consumer desire for unique, high-quality beverages that offer a premium experience.

The consumption of alcoholic beverages has also seen changes, with a shift towards wine and spirits and away from beer in many markets. This has been driven by factors such as changing social norms, the globalization of tastes, and the growth of the middle class in emerging markets.

Looking forward, it is likely that these trends will continue, with health and wellness, premiumization, and the desire for unique experiences continuing to shape beverage consumption patterns. However, the beverage market is also likely to be influenced by new 28

trends and innovations, such as the growing interest in plant-based and sustainable products, and the potential legalization of cannabis-infused beverages in more markets [7].

The history of beverage consumption reflects broader societal changes and offers valuable insights into consumer behavior. Understanding these historic trends can help beverage companies to anticipate future changes and adapt their strategies accordingly.

5.3.1 Legal Status and Regulations of Different Beverage Categories The beverage industry is subject to extensive laws and regulations, which vary considerably depending on the type of beverage and the country. These regulations cover various aspects of beverage production and sale, including ingredient approval, labeling requirements, advertising restrictions, and age limits for the purchase of alcoholic beverages.

Regulations for non-alcoholic beverages such as soft drinks, juices, and functional beverages mainly focus on ensuring food safety and providing consumers with accurate information. For example, in the United States, the Food and Drug Administration (FDA) requires that all ingredients used in beverages be either Generally Recognized as Safe (GRAS) or approved as food additives [8]. The FDA also enforces strict labeling requirements, including listing all ingredients, providing nutritional information, and making only substantiated health claims [8].

Alcoholic beverages are subject to additional regulations due to their potential for abuse and health risks. These regulations vary widely from country to country. In the United States, the Alcohol and Tobacco Tax and Trade Bureau (TTB) regulates the production, distribution, and taxation of alcohol, while individual states set their own laws regarding the sale of alcohol [8]. In many countries, the legal drinking age ranges from 18 to 21.

5.3.1 Legal Status and Regulations of CBD The legal status and regulations of CBD-infused beverages are particularly complex due to the association with cannabis. While CBD itself is not psychoactive, it is derived from the cannabis plant, which is subject to strict controls in many countries. In the United States, the legal status of CBD beverages depends on whether the CBD is derived from hemp (which is legal under federal law) or from marijuana (which is not) [8]. Even in states where marijuana is legal, CBD beverages must comply with a range of regulations regarding production, labeling, and sale.

The legal status and regulations of different beverage categories significantly impact the beverage industry. These regulations can pose challenges for beverage companies, but they also provide a framework for ensuring product safety and quality, and for informing and protecting consumers.

While hemp-based CBD is legal at a federal level, some states consider using or possessing any cannabis product illegal—period. Other states only allow CBD use medically. This variance is outlined in greater detail in the chart below.

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STATE

Alabama

Conditionally legal

Alaska

Fully legal

Arizona

Fully legal

Arkansas

Conditionally legal

California

Fully legal

Colorado

Fully legal

Connecticut

Fully legal

Delaware

Conditionally legal

District of Columbia

Fully legal

Florida

Georgia

ADDITIONAL DETAILS

CANNABIS LEGAL STATUS

Conditionally legal

Conditionally legal

CBD oil exceeding 0.3% THC legal with medical cannabis license for specific conditions Cannabis-derived CBD oil exceeding 0.3% THC legal with medical cannabis license for specific conditions Hemp-derived CBD edibles are not legal in the state, but cannabis-derived CBD edibles are doesn’t seem to be strictly enforced and legislation has been proposed to remove this restriction Cannabis-derived CBD oil legal for both adults and minors under 18 with a medical cannabis license Only hemp-derived CBD products under 0.3% THC content are considered legal Cannabis-derived CBD oil legal with medical cannabis license for specific conditions; must contain equal amounts of THC and CBD, and THC content cannot exceed 5%

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STATE

Hawaii

Conditionally legal

Idaho

Conditionally legal

Illinois

Fully legal

Indiana

Iowa

Conditionally legal

Conditionally legal

Kansas

Conditionally legal

Kentucky

Conditionally legal

Louisiana

Conditionally legal

Maine

Fully legal

Maryland

ADDITIONAL DETAILS

CANNABIS LEGAL STATUS

Conditionally legal

Hemp-derived CBD oil considered legal; cannabis-derived CBD oil regulated for use exclusively by residents with a medical cannabis license All varieties legal so long as there is no traceable THC content All varieties legal so long as they do not exceed 0.3% THC Cannabis-derived CBD oil exceeding 0.3% THC legal with medical cannabis license; list of accepted conditions is fairly restrictive All varieties legal so long as there is no traceable THC content; medical CBD oil legal with license for specific conditions, provided the THC content doesn’t exceed 5% Hemp-derived CBD oil only Cannabis-derived CBD oil legal with medical cannabis license, and any product containing more than 0.5 milligrams of THC must be declared for "adult use" on label Cannabis- and hemp-derived CBD oil now legal, but vendors may require consumers to be at least 21 years old to purchase

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STATE

Massachusetts

Fully legal

Michigan

Fully legal

Minnesota

Mississippi

ADDITIONAL DETAILS

CANNABIS LEGAL STATUS

Conditionally legal

Conditionally legal

Missouri

Conditionally legal

Montana

Fully legal

Nebraska

Conditionally legal

Nevada

Fully legal

New Hampshire

Conditionally legal

New Jersey

Fully legal

Oil with THC content exceeding 0.3% fully legal for adults age 21 and up and for adults 18 to 20 years old with medical cannabis license Cannabis-derived CBD oil legal with medical cannabis license for specific conditions; allows the sale of edible products containing CBD so long as they’re accurately labeled and contain less than 0.3% THC Cannabis-derived CBD oil legal with medical cannabis license; limited number of accepted conditions; must be obtained from University of Mississippi; cannot exceed 0.5% THC CBD oil exceeding 0.3% THC legal with medical cannabis license (no qualifying conditions) Hemp-derived CBD oil only; cannabis is illegal even for medical purposes Cannabis-derived CBD oil legal with medical cannabis license for specific conditions -

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STATE

New Mexico

Conditionally legal

New York

Fully legal

North Carolina

North Dakota

Ohio

Conditionally legal

Conditionally legal

Conditionally legal

Oklahoma

Conditionally legal

Oregon

Fully legal

Pennsylvania

Rhode Island

South Carolina

ADDITIONAL DETAILS

CANNABIS LEGAL STATUS

Conditionally legal

Conditionally legal

Conditionally legal

Cannabis-derived CBD oil legal with medical cannabis license for specific conditions Cannabis-derived CBD oil legal with medical cannabis license; however, the program is limited to a very small subset of the population of study participants and patients suffering from specific conditions Cannabis-derived CBD oil legal with medical cannabis license for specific conditions CBD must be derived from hemp and shouldn’t exceed 0.3% THC; cannabisderived CBD oil legal with medical cannabis license for specific conditions Cannabis-derived CBD oil legal with medical cannabis license (no qualifying conditions) CBD oil exceeding 0.3% THC legal with medical cannabis license for specific conditions CBD oil exceeding 0.3% THC legal with medical cannabis license for specific conditions CBD oil exceeding 0.9% THC legal with medical cannabis license; very restrictive list of qualifying conditions

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STATE

South Dakota

Conditionally legal

Tennessee

Conditionally legal

Texas

Conditionally legal

Utah

Conditionally legal

Vermont

Fully legal

Virginia

Fully legal

Washington

Fully legal

West Virginia

ADDITIONAL DETAILS

CANNABIS LEGAL STATUS

Conditionally legal

Wisconsin

Conditionally legal

Wyoming

Conditionally legal

Legal to sell, buy and carry hemp-sourced CBD oil and other hemp-derived CBD products containing less than 0.3% THC, but cannabis-derived CBD oil remains illegal Stricter laws coming into effect in 2024 that make it illegal to sell CBD to anyone under the age of 21; CBD oil exceeding 0.9% THC legal with medical cannabis license, but very restrictive list of qualifying conditions Low-THC (up to 1%) CBD oil available for patients with qualifying conditions Cannabis-derived CBD oil legal with medical cannabis license for specific conditions Cannabis-derived CBD oil legal with medical cannabis license for specific conditions Cannabis-derived CBD oil legal with medical cannabis license for specific conditions Legal if it contains no more than 0.3% THC

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5.4.1 Public Perception and Trends in the Beverage Industry Public perception and trends significantly influence the beverage industry. Over the years, these perceptions and trends have undergone substantial evolution, driven by elements like health awareness, lifestyle changes, and environmental concerns.

A prominent trend in recent years has been the escalating consumer interest in health and wellness. This shift has moved consumers away from sugary, carbonated soft drinks towards healthier alternatives like bottled water, fruit juices, and functional beverages. Functional beverages, offering health benefits beyond basic nutrition, have witnessed particularly robust growth. This trend reflects a broader societal shift towards healthier lifestyles and preventative healthcare [9].

Another substantial trend has been the emergence of premium and specialty beverages.

Consumers are increasingly in search of unique, high-quality beverages offering a premium experience. This includes craft beers, artisanal spirits, specialty coffees and teas, and organic and natural beverages. The globalization of tastes, growth of the middle class, and the desire for unique experiences fuel this trend.

Environmental sustainability is another critical factor shaping public perception and trends in the beverage industry. Consumers' increasing concern about their consumption choices' environmental impact is influencing their beverage preferences. This concern has led to a growing demand for beverages produced in an environmentally friendly manner and sustainable packaging solutions.

The rise of digital technology and social media has significantly impacted public perception and trends. Consumers are increasingly utilizing digital platforms to learn about different beverages, share their experiences, and engage with beverage brands [9]. This development has created 35

new opportunities for beverage companies to engage with consumers and influence public perception.

Public perception and trends are key drivers of change in the beverage industry. Understanding these perceptions and trends, and adapting to them, is crucial for success in this dynamic industry.

6.1.1 Current Market Leaders and Their Strategies The beverage industry is a fiercely competitive market, with several significant players dominating the scene. These market leaders have established their positions through a blend of product innovation, branding, and strategic marketing.

Among the global beverage industry's market leaders are The Coca-Cola Company and PepsiCo. These two companies have a rich history and are renowned for their flagship carbonated soft drinks, Coca-Cola and Pepsi, respectively [10]. However, both companies have diversified their product portfolios in response to evolving consumer preferences, broadening into non-carbonated beverages such as juices, bottled water, and sports drinks. They have also made substantial investments in product innovation, developing new flavors and healthier alternatives to their traditional offerings.

Another significant player in the beverage industry is Nestlé, the world's largest food and beverage company. Nestlé's beverage portfolio includes bottled water brands such as Nestlé Pure Life and Perrier, coffee brands such as Nescafé and Nespresso, and a range of other beverages. Nestlé's strategy focuses on nutrition, health, and wellness, with heavy investment in research and development to create products meeting these consumer needs [10].

In the alcoholic beverage sector, companies like Anheuser-Busch InBev, Heineken, and Diageo are market leaders. These companies boast a broad portfolio of beer, wine, and spirits brands, and their strategies often involve a combination of product innovation, marketing, and strategic acquisitions.

In the emerging CBD beverages market, companies like Canopy Growth Corporation and New Age Beverages are leading. These companies are at the vanguard of product development and marketing in this new and rapidly expanding sector.

The current market leaders in the beverage industry have reached their positions through a combination of product innovation, branding, and strategic marketing. They continuously adapt their strategies to accommodate changing consumer preferences and market trends, providing valuable lessons for other industry players.

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Figure 5 Making waves in the digital sphere with PureSource Beverages

6.2.1 Market Size and Forecast The global beverage market is a vast and dynamic industry, encompassing a wide array of segments from alcoholic beverages and soft drinks to water, tea, coffee, and increasingly popular functional beverages. Each of these segments has its own unique trends, growth rates, and market leaders, contributing to the overall size and potential of the global beverage market.

While specific current data on the market size and forecast is challenging to pinpoint, it's clear that the global beverage market is substantial and continues to grow. This growth is driven by several key factors. Population growth worldwide naturally leads to increased demand for beverages of all types. Rising disposable incomes, particularly in emerging markets, allow for greater consumer spending on beverages, including premium and specialty offerings.

Urbanization also plays a significant role in market growth. As more people move to urban areas, the demand for packaged beverages, which offer convenience and portability, tends to increase. Furthermore, changing consumer preferences significantly impact the beverage market. For instance, there's a growing consumer trend towards health and wellness, leading to increased demand for functional beverages and lower-sugar or sugar-free options.

In terms of market segments, the functional beverage market, which includes drinks enhanced with additional nutrients or health-benefiting ingredients, has been experiencing rapid growth.

This growth is expected to continue as consumer interest in health and wellness persists.

Despite the challenges of accurately forecasting the global beverage market due to its vast and varied nature, it's evident that the market holds significant potential for growth in the coming 37

years. Emerging markets are expected to contribute substantially to this growth as incomes rise and consumer tastes become increasingly globalized.

The market is dominated by several key players, including The Coca-Cola Company, PepsiCo, and Nestlé. These companies hold a significant share of the global beverage market and continue to innovate and expand their product offerings to meet evolving consumer trends and to maintain their market positions.

Figure 6 PureSource Beverages: The industry's favorite 'ankle-biter' making a big mark!

The global beverage market is poised for continued growth, driven by demographic trends, changing consumer preferences, and ongoing product innovation. Understanding these dynamics is crucial for any player in the beverage industry, from established market leaders to new entrants.

6.3.1 Consumer Demographics and Preferences Consumer demographics and preferences significantly influence the beverage industry. For beverage companies to effectively focus their marketing efforts and develop products that meet consumer needs and desires, understanding these factors is essential.

According to Trapica Insights, the beverage industry is experiencing several new trends, with an increased emphasis on health and wellness. Younger generations are leading this change, expecting transparency and innovation from beverage companies. Beverages lower in calories, sugar, and carbs, non-alcoholic craft beers, and drinks that complement an active lifestyle are dominating the market.

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Primary Reasons for CBD Use in 2020 [33].

The demographic distribution of beverage consumers leans towards younger age groups and women. Approximately 30% of beverage consumers are aged 25-34, and around 18% are 3544 years old. Importantly, the beverage consumer demographic is predominantly female, with women making up 65.3% [11].

CBD Usage Rates by Age Group in 2020 [33].

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In terms of interests and behaviors, music topped all other segments in hobbies and activities with a 98% match [11]. Other top interests for beverage consumers include arts, food, clothing, family, retail, comedy movies, physical exercise, and reality TV shows. The top persona in this industry is a music lover, suggesting that marketers may want to consider ways to reach beverage consumers through the use of music.

Besides health and wellness, other significant trends in the beverage industry include the growth of e-commerce and diversification in the beer industry. Large beer companies are expanding their horizons, making acquisitions in spirits and some segments of wine, investing in ready-to-drink cocktails and traditional spirits, and even creating products with hemp and imitating the scent of cannabis.

Consumer demographics and preferences in the beverage industry are diverse and constantly evolving. Understanding these factors is critical for beverage companies to remain competitive and meet consumers' changing needs and desires.

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CBD Forms by Usage Types in 2020 [33].

6.4.1 Regulations and Standards Regulations and standards play an indispensable role in the beverage industry, ensuring product safety and quality for consumers. These regulations, often intricate and differing by country, aim to safeguard consumers and uphold the integrity of the food and beverage industry.

As per Sigma-Aldrich, the quality control of food products and their ingredients is regulated by local requirements and international standards to boost quality and efficiency. These standards assist food producers in meeting legal and regulatory requirements. Countries that do not follow ISO, FDA, or USDA methods may have developed their own.

Adhering to ISO standards in a food safety management system ensures the identification and control of food safety hazards throughout the food process. This benefits industries in the food supply chain, consumers, and regulators. ISO 22000 is a certifiable standard that addresses the food safety management system. It outlines the guidelines and best practices that an organization must follow to control food safety hazards and ensure the safe consumption of food. FSSC 22000 includes and builds upon the ISO 22000 requirements [12].

Regulatory compliance in the food and beverage industry aids industries in meeting customer requirements, attracting new customers, and supplying safe food to local and global markets. It 41

is responsible for risk management, safeguarding customers, complying with complex legislation, and ensuring quality and safety throughout diverse supply chains. Food safety management programs enhance companies’ compliance with national and international regulatory frameworks, such as CODEX, while improving food safety culture and practices across regions [12].

Regulations and standards form an integral part of the beverage industry, ensuring that products are safe for consumption and meet the highest quality standards. Compliance with these regulations not only protects consumers but also enhances the reputation and credibility of beverage companies.

6.5.1 Market Analysis of Current Competitors 6.5.2 Alkaline Water Company Inc The Alkaline Water Company Inc., founded in 2011, is a clean beverage company based in the US. The company primarily offers bottled alkaline water to retail consumers in various sizes, ranging from 500 milliliters to 1 gallon. Its flagship product, Alkaline88, is produced via an electrolysis process and offers a pH of 8.8. Additionally, the company sells CBD-infused bottled water, available in five flavors, and other CBD topical products under the brand A88CBD. Its products are currently available in over 75,000 stores across the US, Canada, Mexico, and the Caribbean.

Financially, the company has shown growth from 2020 to 2022, with sales increasing from 41.1 million USD to 60.6 million USD. The Alkaline Water Company also offers a range of functional waters under the brand A88CBD, with each flavor offering various potential health benefits such as boosting energy levels, revitalizing hydration, soothing aches, and bolstering the immune system.

The company has been making significant strides to expand its product portfolio. For example, on September 23, 2021, the company launched a new line of six natural A88CBD functional waters. In June 2020, it launched a new direct-to-consumer website, which allows consumers to buy their full line of products online.

The company has been strategically diversifying its product portfolio, venturing into the CBDinfused water market, and introducing eco-friendly packaging options. This helps the company to target a wider audience and aligns with the growing consumer demand for environmentally responsible brands.

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6.5.3 Canopy Growth Corporation Canopy Growth Corporation, founded in 2013 and headquartered in Canada, is a major cannabis and consumer packaged goods (CPG) company with approximately 4,434 employees. The company produces, distributes, and sells a diverse range of cannabis and cannabinoid-based products for adult-use and medical purposes under distinct brands.

The company operates in five segments: Canada cannabis, Rest-of-world cannabis, Storz & Bickel, BioSteel, and This Works, each focusing on different product lines from vaporizers to sports nutrition beverages and beauty products, some of which are blended with hemp-derived CBD. The financial overview indicates a decline in sales from 2021 to 2023, dropping from 413.3 million USD to 304.7 million USD. Canopy Growth offers products such as Quatreau CBD-infused Sparkling Water, available in different flavors like Cucumber + Mint, Passionfruit + Guava, Ginger + Lime, and Blueberry + Acai.

The company has made significant strides in product development and market expansion.

Notably, it launched Quatreau, a premium ready-to-drink CBD-infused sparkling water in the U.S. in March 2021, following a successful rollout in Canada in 2020. In November 2020, the company expanded its operations into health and wellness consumer spaces in key markets, including Canada, the U.S., and Europe.

From a strategic perspective, Canopy Growth has focused on capitalizing on emerging cannabis markets worldwide, diversifying its product portfolio, and continuously investing in research and development. The company has also sought mergers, acquisitions, and strategic partnerships to solidify its position in the industry. Despite being one of the largest and most prominent companies in the cannabis industry, it has faced financial challenges, with significant losses and high operating expenses.

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6.5.4 Heineken NV Heineken NV, established in 1864 and based in the Netherlands, is a major brewing company with a workforce of approximately 82,257.

The company is known for brewing and selling beer, soft drinks, and cider. Its operations are segmented into Africa, Middle East & Eastern Europe; Americas; Asia Pacific, Europe, and Head Office and Other/eliminations. Heineken owns, markets, and sells more than 300 beer brands in over 190 countries.

Financially, Heineken has demonstrated a growth in sales from 2019 to 2021, escalating from 22,463.40 million USD to 30,199.30 million USD. One of Heineken's key offerings is its cannabis-infused sparkling water line under the Lagunitas brand, launched in California. The product, Hi-Fi Hops, is a non-alcoholic beverage with zero alcohol, zero carbohydrates, and zero calories. This hoppy sparkling water beverage is available in two dosages, one containing 5 mg of THC & 5 mg of CBD, and the other containing 10 mg of THC. Strategically, Heineken is focused on expanding its operations through acquisitions. For instance, in March 2023, Heineken received approval to acquire Distell Group and Namibia Breweries, aiming to offer new products like wines and spirits in the South Africa region, which will potentially enhance its customer base and increase profitability.

In the SWOT analysis, Heineken's strengths lie in its broad brand portfolio catering to various consumer segments and its diversified operations in terms of geographic reach. On the other hand, it faces a weakness in its declining current ratio, suggesting a liquidity issue.

Opportunities include the growing demand for beer and cider in various global markets.

However, threats include the highly competitive beer and cider market and the strict federal and state regulations in the US affecting the alcoholic beverage industry.

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6.5.5 The Molson Coors beverage Company

Africa, and Asia Pacific.

The Molson Coors Beverage Company, founded in 2005 and headquartered in the US, operates as a holding company.

With a workforce of around 16,600, the company operates in two segments: Americas and EMEA&APAC. The Americas segment handles production, marketing, and sales in the US, Canada, Caribbean, and Latin & South America, operating several breweries and container operations. The EMEA&APAC segment oversees production, marketing, and sales in multiple countries across Europe, the Middle East,

From a financial perspective, the company's sales have grown from 9,654.00 million USD in 2020 to 10,701.00 million USD in 2022.

One of the company's main product offerings is VeryvellTM, a hemp-derived, adaptogenic, sparkling CBD water with no calories or sugar. This product is available in three flavors and can be purchased both online and at select retailers in Colorado.

As per key developments, Molson Coors launched VeryvellTM exclusively in Colorado in 2021, featuring three flavors infused with 20 milligrams of CBD per 12-ounce can. Despite some challenges posed by the stigma surrounding cannabis, VeryvellTM expanded in 2022 and is now available in nearly half of US states through direct-to-consumer sales on its website.

Moreover, VeryvellTM was also launched on retail shelves in New York and New Jersey with the help of the Molson Coors distribution network.

Molson Coors' growth strategy relies heavily on strategic agreements. For instance, in September 2022, the company expanded its agreement with the Coca-Cola company to develop and commercialize Topo Chico Spirited, ready-to-drink cocktails featuring tequila and vodka-based beverages. Additionally, in 2023, the company introduced Staropramen 0.0 across various regions, expanding its non-alcoholic offerings. Similarly, in January 2023, Molson Coors launched Roxie, a zero-proof canned cocktail line, available in three flavors.

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6.5.6 Aurora Cannabis Inc

Aurora Cannabis Inc., founded in 2006 and headquartered in Edmonton, Canada, is a cultivator and seller of medicinal and recreational cannabis. Although primarily operating in Canada, the company has expanded internationally through medical cannabis exporting agreements. Its brand portfolio includes Aurora, Aurora Drift, San Rafael '71, Daily Special, MedReleaf, CanniMed, Whistler, Reliva, and KG7 CBD.

Reliva, a subsidiary of Aurora, has emerged as a leader in delivering high-quality, hemp-derived CBD products to consumers. It has built its reputation on compliance, testing, product innovation, and approachable price points. Supported by longterm partnerships with national wholesalers and retailers, Reliva's products can be found in over 20,000 retail stores across the U.S. One of the key product offerings from Aurora Cannabis is the KG7 CBD Drink Mixes, available in two flavors: 25mg Burst (grape flavor) and 25mg Smash (citrus flavor).

As for key developments, Aurora, through its subsidiary Reliva, launched KG7, a new highquality CBD product line developed for adult consumers with an active lifestyle in February 2022. KG7 and Reliva products are available for purchase online and in convenience stores across the United States.

Aurora's key strategies revolve around international expansion, particularly in markets where cannabis regulations are becoming more favorable. The company aims to diversify its revenue streams, reduce reliance on a single market, and establish itself as a major player in the global cannabis industry. Aurora's approach involves partnering with local companies and industry experts in target markets to leverage local knowledge, distribution networks, and regulatory expertise for faster market entry and growth.

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6.5.7 Tilray Brands, INC

Tilray Brands, Inc., founded in 2013 and headquartered in the US, is a global cannabis-lifestyle and consumer packaged goods company. The company operates through four segments: Cannabis, Distribution, Beverage Alcohol, and Wellness. The company offers a broad portfolio of brands and products, including Good Supply, RIFF, Broken Coast, Solei, Canaca, HEXO, Redecan, Original Stash, and Bake Sale, among others. It operates in Canada, the US, Europe, Australia, and Latin America, supporting more than 20 brands in 20 countries.

In terms of financials, Tilray Brands has been showing significant growth over the years, with sales increasing from $405.3 million in 2020 to $628.4 million in 2022.

Among its product offerings, Happy Flower stands out as a ready-to-drink CBD mocktail brand.

It is a line of four non-alcoholic, zero-sugar, low-calorie beverages infused with 25mg of CBD. The flavors offered are Margarita, Mojito, Peach Bellini, and Strawberry Daiquiri.

Key developments for the company include the signing of a distribution agreement in August 2022 with Southern Glazer’s Wine & Spirits through the Tilray Wellness division. This agreement provides Tilray Wellness direct access to Southern Glazer’s distribution network, enabling reach to consumers in local bars, restaurants, grocery chains, and convenience stores.

Tilray Brands' SWOT analysis reveals its strengths as global presence, market leadership in the cannabis industry, a strong portfolio of cannabis brands, and access to extensive resources and distribution networks. However, it faces potential weaknesses due to dependence on the uncertain regulatory environment of the cannabis industry and possible legal and compliance challenges. The company's opportunities lie in the expanding legalization of cannabis and growing acceptance of CBD and cannabis-based products in wellness and medical sectors. The threats faced by the company include intense competition in the cannabis market, changing regulations, and potential negative perception around cannabis.

Key strategies of the company include expanding its international presence and investing in research and development for new CBD beverage products. They have already launched products like Tilray Sparkling Water, Tilray Functional Beverages, and Tilray CBD Shots, appealing to a wide range of consumers.

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6.5.8 CANN

glass of wine.

Cann, a US-based company founded in 2019 with a workforce of about 38 people, produces THC-infused beverages. Known as the top-selling THC-infused beverage brand in California, Cann's products are often compared to hard seltzers. The company's beverages are vegan, gluten-free, low in calories, and do not contain artificial sweeteners or flavors, preservatives, or a cannabis taste. Each can contain five allnatural ingredients, delivering a strength similar to a beer or

The company does not publish annual reports as it is a private entity. However, it offers a range of products including Cann Classic, a sparkling water infused with 2mg of THC and 4mg of CBD available in four flavors: Blood Orange Cardamom, Grapefruit Rosemary, Lemon Lavender, and Ginger Lemongrass. The Cann Hi Boy is a larger version of the Cann Classic containing 5mg of THC and 10mg of CBD in a 12-ounce can, available in three flavors. Cann Roadies are liquid packets that contain a microdose of cannabis (2mg THC and 4mg CBD) and come in three flavors.

In terms of key developments, the company announced its expansion to New York in April 2023, marking its availability in the 33rd U.S. state via DTC (drinkcann.com), licensed dispensaries, and traditional retail. This is also the seventh state where products are available in-store.

The company's key strategies in the USA involve positioning itself as the leading brand of nonalcoholic, microdosed cannabis-infused beverages, targeting a younger demographic. Cann’s products are also designed to be healthier and more responsible ways to enjoy cannabis. The company's marketing strategy is focused on social media and word-of-mouth, with influencers promoting their products and generating excitement among their target audience. They are also running targeted advertising campaigns on social media.

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6.5.9 CENTR Brands Corp Centr Brands Corp., a Canada-based wellness beverage company, was founded in 2012 and has a workforce of approximately 18 employees. The company is dedicated to the development and marketing of beverages infused with hemp-derived extracts and derivatives, focusing particularly on the nonalcoholic, cannabidiol (CBD)-infused beverage industry.

Centr Brands Corp. offers a range of products including CENTR, CENTR Sugar Free, CENTR Enhanced, and ready-to-mix CENTR Instant. The CENTR and CENTR Sugar Free products are low-calorie CBD beverages. CENTR Enhanced is a zero calorie, nootropic, and adaptogen-enriched non-CBD functional beverage, while CENTR Instant is an adaptogen-based CBD powder. CENTR comes in two flavors, Lemon Lavender and Blood Orange Cardamom, with a CBD content of 30mg. CENTR Enhanced, also available in two flavors, contains 50mg of CBD. CENTR Instant is a powder designed to be mixed with water and contains 20mg of CBD. It is available in three variants: Balance, Recover, and Relax.

As a private company, Centr Brands Corp. has not released financial data to the public domain.

Moreover, there has been no recent notable development in the company's participation in the USA CBD-infused beverages market.

Key strategies of Centr Brands Corp. include the use of technology to enhance the customer experience, exemplified by their app that allows users to track their wellness progress and find recipes aligned with their goals. The company is dedicated to understanding the needs of its customers and creating products that cater to those requirements. Furthermore, Centr Brands Corp. is looking to expand into new markets both domestically and internationally, targeting countries with growing health-conscious consumer populations.

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6.5.10 Daytrip

DayTrip, a USA-based company founded in 2019 with a workforce of around 12 employees, specializes in the production of CBD (cannabidiol) infused beverages. The company's goal is to delight the senses of its customers with natural and premium cannabidiol waters that come in a variety of flavors. They achieve this by using highfrequency energy to minimize the CBD particle size, infusing it into sparkling water. DayTrip's sparkling waters offer a variety of flavors, including lemon lime, blackberry, grapefruit, and pineapple, and are all zero sugar, zero carb, and only have 5 calories per serving. Their products are available for purchase through their e-commerce website and in select retail locations.

The company offers several products, including CBD-Infused Sparkling Water, and Daytrip GO, an adaptogenic energy drink infused with 25mg of CBD and a blend of adaptogens such as ashwagandha, rhodiola, and maca. The sparkling water products come in several flavors, including cherry, lemon lime, tangerine, and coconut pineapple. The functional energy drinks, including the Orange Joyride, are also infused with 25mg of CBD and a blend of vitamins and minerals, and are designed to help consumers feel energized and focused without the jitters or crash of caffeine. DayTrip also offers hemp-infused sparkling water and blackberry sparkling water.

As of the current date, there have been no financial records or recent developments by the company in the USA CBD-Infused Beverages Market.

DayTrip's key strategy is to appeal to consumers who are interested in improving their health and well-being. The company uses only the highest quality ingredients in its products and offers a variety of flavors to appeal to a wide range of tastes. Furthermore, DayTrip's products are packaged in convenient formats that make them easy to take on the go, with sparkling waters available in 12-ounce cans and 16-ounce bottles, while functional energy drinks are available in 12-ounce cans.

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6.5.11 American Premium Water Corp American Premium Water Corp, founded in 1977 and headquartered in Playa Vista, CA, is engaged in the production of cannabidiol (CBD) infused water and other consumer products. With a workforce of around 802 employees, the company focuses on nanotechnology research that enables the body to absorb higher percentages of CBD molecules.

American Premium Water Corp. is a diversified luxury consumer products company with a focus on businesses in the health and beauty and biotech sectors. They are invested in harnessing the powers of hydrogen and Nano technologies paired with cannabidiol (CBD) to treat health disorders and enhance quality of life. The company also markets emerging fashion brands by leveraging classic retail partners and incorporating disruptive blockchain technologies to expand the retail footprint. Its portfolio includes the LALPINA Hydro and LALPINA Hydro CBD brands, LALPINA Productions, LALPINA Records, Gents, Worthy, and blockchain platform FashionCoinX. American Premium Water Corp offers the LALPINA CBD Beverage line, a range of CBD-infused waters and energy drinks. The beverages are made with natural spring water and are infused with 25mg or 50mg of CBD, a non-psychoactive compound known to have a variety of health benefits. The beverages are available in several flavors, including lemon lime, grapefruit, and coconut pineapple.

American Premium Water Corp's key strategy is to create products that appeal to people interested in improving their health and well-being. They prioritize the use of high-quality ingredients in their products and offer a variety of flavors to cater to a wide range of tastes. Their CBD-infused water and energy drinks are made with natural spring water and a blend of vitamins, minerals, and adaptogens, offering flavors like lemon lime, grapefruit, coconut pineapple, orange, and ginger.

Figure 7 PureSource Beverages - the standout choice for the conscious consumer.

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7.1.1 Sourcing Ingredients The formulation and manufacturing of a CBD beverage begins with sourcing the right ingredients. This process is crucial as the quality and type of ingredients used can significantly impact the final product's taste, texture, and overall quality.

The primary ingredient, Hemp-Derived Cannabidiolic acid (CBDa), can be sourced from various suppliers, but it's crucial to ensure the quality and purity of the CBDa used. PureSource Beverages uses CBDa instead of CBD because it is more water-soluble to ensure it mixes well with the beverage and is easily absorbed by the body. This is important as it affects the bioavailability, which is the proportion of CBDa that enters the circulation when introduced into the body and so is able to have an active effect [13].

The importance of sourcing high-quality Cannabis ingredients is further elaborated upon, stating these ingredients are in high demand for beverage formulations due to their potential health benefits. However, it's essential to source these ingredients from reliable suppliers to ensure they meet the necessary safety and quality standards [14]. This is crucial as the safety and efficacy of the final product depend on the quality of the CBD used.

In addition to CBDa, other ingredients such as flavors, sweeteners, and preservatives need to be sourced. These ingredients should be chosen based on the desired taste and shelf life of the beverage. It's also important to consider the target market's preferences when choosing these ingredients. For instance, if the target market prefers natural and organic products, it would be beneficial to source natural flavors and sweeteners and avoid artificial preservatives [14].

The sourcing process also involves considering the cost of the ingredients. While it's important to prioritize quality, the cost of ingredients can significantly impact the final product's price point.

Therefore, it's crucial to find a balance between sourcing high-quality ingredients and managing costs to ensure the final product is competitively priced.

7.1.2 Choosing Beverage Type The type of beverage to be developed is a significant decision in the formulation and manufacturing process of a functional beverage. This choice can influence various aspects of the product, including its taste, appearance, and the way it is consumed, all of which can impact its appeal to consumers.

There are several types of CBD beverages that entrepreneurs can consider. These include CBD-infused water, energy drinks, coffee, tea, beer, wine, and even cocktails. Each of these beverage types offers unique opportunities and challenges.

For instance, CBDa-infused water can be marketed as a health and wellness product, appealing to consumers who are looking for a refreshing, low-calorie beverage that offers the potential 52

benefits of CBD. On the other hand, CBDa-infused coffee or tea can offer a unique combination of the stimulating effects of caffeine and the calming effects of CBDa, potentially appealing to consumers who are looking for a functional beverage that can help them manage stress or improve focus [15].

CBD-infused beer, wine, or cocktails, meanwhile, can offer a novel way to consume CBD, potentially appealing to consumers who are interested in trying new and unique products.

However, these types of beverages may also present additional regulatory challenges, as they involve combining CBD with alcohol.

The choice of beverage type should be guided by several factors. One of these is the target market's preferences. For instance, if the target market is health-conscious consumers, CBDainfused water or tea might be a good choice. On the other hand, if the target market is more interested in recreational consumption, PureSource Tranquili-Tea mixes great with Vodka.

Lastly, legal considerations might also influence the choice of beverage type. Some jurisdictions might have restrictions on certain types of CBD-infused beverages, so it's important to be aware of these when choosing the beverage type. It's also crucial to ensure that the chosen beverage type is compliant with all relevant food and beverage regulations. This is why PureSource Beverages uses Hemp-Derived CBDa with no THC. Choosing the right type of beverage is a crucial step in the formulation and manufacturing process of a CBDa beverage. This decision should be guided by the target market's preferences, the compatibility of CBD with the beverage type, and legal considerations. It's a complex decision that requires careful consideration and research, but it can significantly influence the success of the final product.

7.1.3 Formulation Development Formulation development is a critical and complex step in creating a CBD/HDCa beverage. It involves determining the exact composition of the beverage, including the amount of HDCa and other ingredients, to ensure the final product is both appealing to consumers and compliant with regulations.

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The formulation process involves several steps. The first step is to decide on the type and amount of CBDa to be used in the beverage. This decision is influenced by factors such as the desired potency of the beverage, the target market's preferences, and the legal limits on CBDa content in food and beverage products. It's important to source high-quality CBDa that is free from contaminants and has been tested for its CBD content [16].

Next, other ingredients such as flavors, sweeteners, and preservatives are selected. These ingredients should complement the taste of CBDa and enhance the overall sensory experience of the beverage. The choice of these ingredients can greatly influence the consumer's perception of the product, so it's important to choose flavors and sweeteners that are appealing to the target market. Additionally, any preservatives used must be safe for consumption and meet all relevant food safety standards.

The formulation process also involves deciding on the method of CBDa infusion. CBD is fatsoluble, which can make it challenging to incorporate into a beverage in a way that ensures it is evenly distributed throughout the product. Various techniques can be used to overcome this challenge, such as using nanoemulsions to break down the CBD into tiny particles that can be more easily mixed with water [16].

The importance of testing the formulation is further emphasized [17]. This involves creating a prototype of the beverage and testing it for factors such as taste, stability, and CBDa potency.

Based on the results of these tests, the formulation might need to be adjusted. For example, if the CBD is not evenly distributed throughout the beverage, the method of CBD infusion might need to be modified. Or, if the taste of the beverage is not appealing, the types or amounts of flavors and sweeteners might need to be changed [17].

Formulation development is a complex process that requires careful consideration of many factors, including the type and amount of CBD, the selection of other ingredients, the method of CBD infusion, and the results of product testing. Getting this step right is crucial to the success of the CBD beverage, as it influences the product's appeal to consumers, its compliance with regulations, and ultimately its marketability [16,17].

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Figure 8 PureSource's Formulation and Canning is with Award Winning PowerBrands

7.1.4 Manufacturing Process The manufacturing process of a CBDa beverage is a complex and meticulous procedure that involves several stages, each of which plays a crucial role in ensuring the final product's quality, safety, and efficacy. This process requires a deep understanding of the properties of CBDa, the characteristics of other ingredients, and the dynamics of their interaction.

Once the beverage has been formulated, it undergoes a process of pasteurization or sterilization to ensure it is safe for consumption. This process involves heating the beverage to a certain temperature to kill any harmful bacteria or microorganisms. This step is crucial for ensuring the safety of the product and meeting food safety regulations [18].

The final step in the manufacturing process is packaging the beverage. This involves filling the beverage into bottles or cans, sealing them, and then labeling them with the necessary information. The packaging not only protects the product and extends its shelf life but also provides important information to consumers. The labels include details such as the ingredients, nutritional information, the amount of CBD per serving, and any necessary warnings or instructions.

The manufacturing process of a CBD beverage is a complex procedure that requires careful planning, precise control over each step, and rigorous testing to ensure the final product is of high quality, safe for consumption, and compliant with regulatory requirements. It involves 55

overcoming unique challenges associated with CBD infusion, carefully selecting and mixing other ingredients, ensuring the safety of the product, and providing clear and accurate information through packaging and labeling.

7.2.1 Product Testing and Safety Measures Product testing and safety measures are critical aspects of developing a CBDa beverage.

These steps ensure that the final product is safe for consumption, effective, and compliant with all relevant regulations. They also play a significant role in building consumer trust and ensuring the product's success in the market.

As highlighted by FoodSafetyTech [20], several key safety measures should be taken when developing a CBDa beverage. The initial step involves testing the raw materials, including CBD and other ingredients, for contaminants such as heavy metals, pesticides, and microbial contaminants. This step is critical as these contaminants can pose severe health risks to consumers.

The manufacturing process should also be closely monitored to prevent cross-contamination and ensure product consistency. This includes maintaining clean and hygienic manufacturing conditions, regularly inspecting equipment, and training staff on proper handling procedures.

Once the product has been manufactured, it should be tested for potency and purity. This involves verifying that the product contains the correct amount of CBDa and is free from contaminants. These tests should be conducted in a certified laboratory to ensure accuracy and reliability.

In addition to these safety measures, stability testing is also important. This involves storing the product under different conditions and for different periods to see how it holds up. This can help determine the product's shelf life and ensure that it remains safe and effective during this period. Stability testing can also provide valuable information on how the product should be stored and handled to maintain its quality.

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Figure 9 PureSource Beverages HDCa Spec sheet

Leafreport [21] emphasizes the importance of accurate labeling in CBD beverages. The report states that many products on the market contain less CBD than advertised, misleading 57

consumers and potentially leading to regulatory issues. To prevent this, accurate potency testing is crucial, and the amount of CBD listed on the product's label should match the product's actual content. This not only helps build consumer trust but also ensures compliance with product labeling regulations.

Product testing and safety measures are essential steps in the development of a CBD beverage. These steps involve rigorous testing of raw materials and the final product, careful monitoring of the manufacturing process, comprehensive stability testing, and ensuring accurate labeling. By taking these measures, manufacturers can ensure that their CBD beverages are safe, effective, and compliant with regulations, thereby building consumer trust and ensuring the product's success in the market.

7.3.1 Legal Compliance and Labeling Requirements Legal compliance and accurate labeling are critical aspects of developing a CBDa beverage.

These factors ensure that the product meets all regulatory standards, provides consumers with accurate information about the product, and protects the manufacturer from potential legal issues. Navigating the complex landscape of regulations surrounding CBD products can be challenging, but it is a necessary step in the development process.

As noted by CTM Labeling Systems [22], there are several important considerations when it comes to CBDa product labeling. These include clearly stating the amount of CBDa in the product, providing a list of all ingredients, and including any necessary warnings or instructions.

This information is crucial for consumers, as it allows them to make informed decisions about the products they purchase and consume.

The label should also include the name and contact information of the manufacturer. This transparency can help build trust with consumers and provides a point of contact should they have any questions or concerns about the product. Additionally, any necessary disclaimers should be included on the label. These disclaimers can help protect the manufacturer from potential legal issues and ensure that consumers are aware of any potential risks associated with the product.

In addition to these basic requirements, it's also important to ensure that the product's label does not make any unproven health claims. The FDA asserts that CBD products cannot be marketed as dietary supplements, and they cannot claim to diagnose, treat, cure, or prevent any disease [23]. Any such claims could lead to regulatory action, including fines, product seizures, or other penalties. Therefore, it's crucial to ensure that all claims made on the product's label are supported by scientific evidence and comply with all relevant regulations.

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Figure 10 PureSource Beverages Label approved by a FDA Label Lawyer

The FDA further emphasizes the importance of legal compliance in the development of a CBDa beverage [23]. It explains that while the FDA is still working on developing regulations for CBD products, manufacturers must still comply with existing food safety regulations. This includes ensuring the product is safe for consumption, is produced using good manufacturing practices, and is accurately labeled.

Legal compliance and accurate labeling are not just crucial, but mandatory in the development of a CBDa beverage. Manufacturers must ensure that their product meets all regulatory standards, provides accurate information to consumers, and does not make any unproven health claims. This involves a thorough understanding of both current and emerging regulations, careful review and design of product labels, and ongoing monitoring to ensure continued compliance. By doing so, manufacturers can avoid regulatory action, build trust with consumers, and ensure the long-term success of their product in the market.

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8.1.1 Branding and Product Positioning Branding and product positioning are key elements in the marketing and distribution strategy of a CBDa beverage. They help to differentiate the product from competitors, appeal to the target market, and communicate the product's unique value proposition. These elements are crucial in creating a strong brand image that resonates with consumers and drives the product's success in the market.

As Flavorman suggests [24], successful branding for a CBD drink involves creating a brand identity that resonates with the target market. This includes choosing a name, logo, and design that reflects the product's attributes and appeal to the target market's preferences and lifestyle.

The brand identity should also communicate the product's quality and reliability to build trust with consumers. Consistency of the brand identity across all marketing materials and touchpoints is important as it strengthens the brand image and makes it more memorable for consumers.

In addition to creating a strong brand identity, it's also crucial to develop a compelling brand story. This involves communicating the values and mission of the brand, and explaining why the product was created. A compelling brand story can help to build an emotional connection with consumers, making them more likely to choose the product over competitors.

Product positioning, on the other hand, involves defining how the product stands out in the market. BevSource suggests that successful product positioning for a CBD beverage involves identifying a unique selling proposition (USP) that sets the product apart from competitors [25].

This could be based on factors such as the product's formulation, taste, health benefits, or sustainability credentials.

In addition to defining the product's USP, it's also important to understand the competitive landscape and the needs and preferences of the target market. This involves conducting market research to identify trends and opportunities in the market, and to understand what consumers are looking for in a CBD beverage. This information can help to inform the product's positioning strategy and ensure it is aligned with consumer needs and preferences.

Branding and product positioning are crucial elements in the marketing and distribution strategy of a CBD beverage. They involve creating a strong brand identity, developing a compelling brand story, defining a unique selling proposition, and understanding the competitive landscape and consumer needs. By successfully implementing these elements, manufacturers can differentiate their product in the market, appeal to consumers, and drive the product's success.

This requires a deep understanding of the market and the target audience, as well as creativity and strategic thinking.

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Figure 11 PureSource Beverages is creating a strong brand identity

8.2.1 Why HDCa (Hemp-Derived Cannabidiolic Acid) PureSource Beverage Company stands at the forefront of a health-conscious revolution, introducing a groundbreaking ingredient known as Hemp-Derived Cannabidiolic Acid (HDCa) into its functional beverages. In an era where wellness is paramount, HDCa offers a unique health benefit that sets PureSource apart from the rest. This article delves into the rationale behind our choice to use HDCa instead of more commonly known terms like CBD or CBDa, highlighting strategic advantages that extend beyond semantics.

The Power of Language Language shapes perception, and in the business landscape, it can make a significant difference in terms of market reach and acceptance. While CBD (Cannabidiol) and CBDa (Cannabidiolic Acid) are undoubtedly potent compounds, they have unfortunately carried a certain level of stigma due to their association with cannabis, even though they do not possess the psychoactive properties of THC. PureSource acknowledges this challenge and seeks to maximize the potential of its beverages by leveraging the term "Hemp-Derived Cannabidiolic Acid" or CBDa. This term strikes a balance between transparency and distancing from the perceived controversy of CBD. By doing so, we not only provide consumers with accurate information but also mitigate unnecessary hurdles in our market strategy.

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Navigating E-Commerce Platforms E-commerce giants like Amazon and social media platforms such as Facebook have imposed restrictions on CBD-related products and content due to evolving regulations and lingering perceptions. However, there exists an opportunity within the realm of hemp-derived products.

Hemp, being a non-psychoactive variant of cannabis, holds less cultural baggage and legal ambiguity.

PureSource's embrace of CBDa strategically aligns with these regulations. By emphasizing the "hemp-derived" aspect of our products, we gain access to wider distribution channels. Our functional beverages, enriched with CBDa, can be sold as hemp products on Amazon and promoted on platforms like Facebook, allowing us to reach a broader audience that seeks natural health solutions.

The Pioneering Edge Embracing CBDa isn't just a strategic decision; it's a commitment to innovation. While the scientific understanding of CBD's benefits continues to evolve, CBDa brings a unique offering to the table. It's an acid form of CBD that hasn't been explored extensively, thus opening avenues for research and potential health benefits that might differentiate us from competitors.

PureSource's belief in the eventual erosion of the stigma surrounding cannabis products echoes the changing cultural perception and the gradual acceptance of holistic wellness solutions. As attitudes shift and science illuminates the potential of these compounds, positioning PureSource as a pioneer in the CBDa frontier sets the stage for lasting impact.

Conclusion In the world of functional beverages, PureSource Beverage Company is not merely an industry player but a forward-thinking innovator. Our decision to name our key ingredient CBDa isn't just a choice of semantics, but a strategic move that aligns with regulations, harnesses the potential of hemp-derived products, and sets us apart as pioneers in a rapidly evolving industry.

By focusing on CBDa, we not only embrace a promising avenue of wellness but also prepare ourselves for a future where the healing potential of cannabis products takes center stage, free from unwarranted stigma. PureSource’s commitment to innovation, consumer education, and improved well-being stands as a testament to our vision for healthier tomorrows.

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8.3 Product Lineup - Teas 8.3.1 She’s So Feis-Tea

Peach Oolong Tea is a medium-level intensity tea. Enjoyable way to revive and refresh after your workout.

Marketing Strategy Young Adults and Millennials: The playful name and cartoon image could appeal to younger consumers who appreciate fun and aesthetically pleasing packaging. The peach oolong flavor might attract those looking for a unique, fruity twist on traditional tea.

Women: The image of a woman on the can might suggest that the product is particularly targeted at female consumers. The peach flavor could appeal to those who enjoy sweet, fruity beverages.

Tea Enthusiasts: As it's a tea product, it would naturally appeal to people who enjoy drinking tea, especially those who are interested in trying new and different flavors like peach oolong.

Health-conscious consumers: The product is described as a medium-level intensity tea, which could appeal to health-conscious consumers who are looking for natural, flavorful, and low-sugar beverage options.

Lifestyle consumers: The product might also appeal to consumers who are attracted to a certain lifestyle or image, such as those who value fun, vibrancy, and a balanced lifestyle. The peach oolong flavor could be seen as a fun, unique choice.

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8.3.2 Ain’t Yo Mama’s Tea - Black and Green Tea Blend

Crisp and clean tasting, our Green Tea is brewed to perfection and naturally sweetened with monk fruit.

Marketing Strategy Young Adults and Millennials: The playful name and cartoon image could appeal to younger consumers who appreciate humor and a bit of irreverence in their product choices. The name suggests a modern twist on a traditional product, which could appeal to younger generations looking for a unique beverage.

Tea Enthusiasts: As it's a tea product, it would naturally appeal to people who enjoy drinking tea, especially those who are interested in trying new and different flavors or blends.

Health-conscious consumers: The product is described as an Organic Black Tea and Yerba Maté blend, naturally sweetened with monk fruit. This could appeal to health-conscious consumers who are looking for natural, organic, and low-sugar beverage options.

Nostalgic consumers: The image of an old woman drinking tea could evoke feelings of nostalgia and tradition, which could appeal to consumers who appreciate a connection to the past.

Consumers who enjoy humor: The name "Ain’t Your Mama’s Tea" and the image of the old woman suggest a sense of humor and playfulness. This could appeal to consumers who enjoy products that don't take themselves too seriously and offer a bit of fun.

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8.3.3 Activi-Tea - Wild berry Black Tea

Wild Berry Black Tea is a great tasting high intensity tea, great for high energy workout and outdoor fun.

Marketing Strategy Fitness Enthusiasts: The image of a man lifting weights clearly targets individuals who are physically active and care about their fitness. This could include gym-goers, athletes, and people who regularly engage in physical activities.

Health-conscious Consumers: As it's a tea product, it would naturally appeal to people who enjoy drinking tea, especially those who are interested in healthier beverage options. The fact that it's described as a high-intensity tea suggests it might have ingredients beneficial for energy and performance.

Young Adults: The cartoon image and the depiction of a younger man might appeal to younger consumers, particularly those who are active and health-conscious.

Males: The image of a man on the can might suggest that the product is particularly targeted at male consumers, although it could certainly be enjoyed by anyone.

People Seeking Energy Boosts: Given that it's described as a high-intensity tea, it might appeal to those seeking a beverage to help them energize before or after workouts or during a busy day.

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8.3.4 Par-Tea

Lemon-Grass Tea features a vibrant flavor profile with minty and lemony notes that are enhanced by a sharp finish.

Marketing Strategy Young Adults and Millennials: The playful name and cartoon image of a golfer could appeal to younger consumers who appreciate fun and aesthetically pleasing packaging. The lemon-grass flavor might attract those looking for a unique, refreshing twist on traditional tea.

Sports Enthusiasts: The image of a golfer suggests this product might be targeted at sports enthusiasts, particularly those who enjoy golf.

Tea Enthusiasts: As it's a tea product, it would naturally appeal to people who enjoy drinking tea, especially those who are interested in trying new and different flavors like lemon-grass.

Health-conscious consumers: The product is described as a vibrant flavor profile with minty and lemony notes. This could appeal to healthconscious consumers who are looking for natural, flavorful, and lowsugar beverage options.

Lifestyle consumers: The product might also appeal to consumers who are attracted to a certain lifestyle or image, such as those who value fun, vibrancy, and a balanced lifestyle. The lemon-grass flavor could be seen as a fun, unique choice.

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8.3.5 Tranquili-Tea - Hibiscus Rose Tea (Caffeine Free)

Hibiscus Rose Tea has a slightly tangy and berrylike shade. Best enjoyed while lounging on your favorite chair, or before your evening meditation.

Marketing Strategy Health-conscious consumers: The emphasis on meditation suggests a focus on holistic health and wellness. People who practice yoga, meditation, or other mindfulness activities might be attracted to this product.

Young adults and millennials: The cartoon image and playful color scheme might appeal to younger consumers who appreciate fun and aesthetically pleasing packaging.

Women: The image of a woman on the can might suggest that the product is particularly targeted at female consumers, although it could certainly be enjoyed by anyone.

Tea enthusiasts: Given that it's a tea product, it would naturally appeal to people who enjoy drinking tea, especially those who prefer unique and exotic flavors like Hibiscus Rose.

Consumers seeking relaxation: The name "Tranquilli-Tea" and the meditating figure suggest calm and relaxation, so it might appeal to those seeking a beverage to help them relax and unwind.

Lifestyle consumers: The product might also appeal to consumers who are attracted to a certain lifestyle or image, such as those who value tranquility, mindfulness, and a balanced lifestyle.

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8.3.6 Zoom Shroom

Peach Mango Mushroom Tea with Reishi and Lion’s Mane Bring a little zoom into your day with our uplifting Mango-Peach Mushroom Tea. Brewed with non-psychoactive reishi and lion’s mane mushrooms blended with Mango-Peach Tea. Marketing Strategy Young Adults and Millennials: The playful name, cartoon image, and unique flavor might appeal to those looking for a fun, adventurous twist on traditional tea.

Women: The witchy, mystical image could appeal to female consumers who enjoy whimsical and magical themes.

Tea Enthusiasts and Health-conscious consumers: The unique blend of peach, mango, and mushroom flavors, including reishi and lion’s mane, could attract those interested in natural, flavorful, and potentially beneficial beverages.

Adventure Seekers: The unique flavor profile suggests this product might be targeted at those who enjoy trying new and unique flavors.

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SPARKLING WATERS 8.3.7 Flaming Blood Orange

Enjoy the flaming flavor of blood orange in this invigorating sparkling water.

Marketing Strategy Young Adults and Millennials: The playful name and cartoon image of a couple riding a motorcycle could appeal to younger consumers who appreciate fun and aesthetically pleasing packaging. The blood orange flavor might attract those looking for a unique, refreshing twist on traditional sparkling water.

Adventure Seekers: The image of a couple riding a motorcycle suggests this product might be targeted at adventure seekers and those who enjoy an active, exciting lifestyle.

Health-conscious consumers: The product is described as a sparkling water with the flavor of blood orange. This could appeal to health-conscious consumers who are looking for natural, flavorful, and low-sugar beverage options.

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8.3.8 Lip-Tickler

This Raspberry Lime Seltzer Water is sure to tickle your lips with it’s brightly flavored fizzy boost.

Marketing Strategy Young Adults and Millennials: The playful name and cartoon image of an attractive woman with limes in her hair and raspberries in her eyes could appeal to younger consumers who appreciate fun and aesthetically pleasing packaging. The raspberry lime flavor might attract those looking for a unique, refreshing twist on traditional seltzer water.

Women: The image of a woman on the can might suggest that the product is particularly targeted at female consumers. The raspberry lime flavor could appeal to those who enjoy sweet, fruity beverages.

Health-conscious consumers: The product is described as raspberry lime seltzer water. This could appeal to health-conscious consumers who are looking for natural, flavorful, and low-sugar beverage options.

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8.3.9 Strawberry Sling-Shot

This sparkling water features the satisfying taste of strawberry in each sip. It is sure to sling you into a refreshing utopia.

Marketing Strategy Young Adults and Millennials: The playful name and cartoon image of a guy pulling back a sling-shot could appeal to younger consumers who appreciate fun and aesthetically pleasing packaging. The strawberry flavor might attract those looking for a unique, refreshing twist on traditional sparkling water.

Adventure Seekers: The image of a guy with a sling-shot suggests this product might be targeted at adventure seekers and those who enjoy an active, exciting lifestyle.

Health-conscious consumers: The product is described as sparkling water with the satisfying taste of strawberry. This could appeal to health-conscious consumers who are looking for natural, flavorful, and low-sugar beverage options.

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8.4.1 Traditional Media Traditional media, including television, radio, print, and outdoor advertising, can be effective marketing channels for a CBD beverage. These channels have the potential to reach a broad audience and create widespread awareness of the product.

Using traditional media provides extensive exposure and can reach a large audience, particularly effective in areas where CBD products are widely accepted, and the use of such products is common [26].

Television and radio advertisements can reach a broad demographic and can be particularly effective if they are aired during programs that are popular with the target market. Print advertisements, like those in magazines or newspapers, can also be effective, especially if placed in publications that resonate with the target market.

Outdoor advertising, such as billboards or transit advertisements, increases brand visibility.

These types of advertisements can be particularly effective in urban areas, where they can be seen by many people.

However, it's important to consider restrictions on advertising CBD products in certain jurisdictions. Therefore, ensuring that any advertising complies with local laws and regulations is crucial. This may involve consulting with legal experts or advertising professionals who are familiar with the regulations in the relevant markets.

While traditional media can be an effective way to reach a broad audience and increase brand visibility, it's important to ensure that any advertisements comply with local laws and regulations.

With careful planning and execution, traditional media can be a powerful tool in the marketing strategy for a CBD beverage.

8.4.2 Social Media Social media has become an indispensable tool for marketing in today's digital age, and it's no different for a CBD beverage. However, explicit CBD advertising is not allowed on most major platforms, due to outdated guidelines lumping our product in with its psychoactive cousin, THC. To outsmart these anarchic restrictions, our digital marketing team has devised a strategy highlighting education and health above all. Leaning into the health benefits of our product will allow us to utilize Facebook, Instagram, and LinkedIn to share product information and build a community around the brand. We plan on incorporating Twitter, Reddit and TikTok as we build momentum.

Specifically, social media marketing should focus on educating consumers about the benefits of CBD and sharing user testimonials to build trust and credibility. We want to be a valuable member of the community, not just clutter on their social media feed. That is why we are primarily concerned with creating content that is insightful and speaks of our brand values – 72

which are about staying fit without sacrificing fun. We will not be using explicit call-to-actions like “get, find, try, buy’ as they don’t add context to what we’re promoting and will likely result in deactivation on these platforms. User testimonials can provide real-life examples of how the product has helped people, which can be more convincing than simply stating the benefits of the product. Nonalcoholic ‘mocktails’ are trending across all social medias, so incorporating our products in short-form recipe videos is one of our strategies to use existing trends to promote our brand experience.

The CBD Insider, 2021 US CBD Consumer Report

Beyond education and testimonials, we utilize these platforms to share updates on our growth, announce new product launches. As we build momentum, we expect to run promotions and giveaways on our product to pique the interest of uninformed consumers, who would otherwise not be aware of the existence of our HDCA. In addition to building brand recognition, these giveaways will allow us to gather the names, phone numbers and emails of curious consumers and incorporate them in our email marketing and SMS campaigns.

Engagement is another crucial aspect of social media marketing. Responding to comments and messages, asking for feedback, and creating a dialogue with consumers can help to build a community around the brand and foster a sense of loyalty among consumers. We are 73

completing an early-stage market research survey and giveaway to ‘test the waters’ and understand how these strategies can be implemented within our own organization.

Social media is a powerful marketing tool, and brands that want to grow considerably on social media platforms need to optimize their strategy and platform to appeal to their niche audience.

Finding your audience and staying consistent with posting engaging content allows for direct engagement with consumers, provides opportunities for education and testimonials, and helps to build a community around the brand. It's important to ensure that all social media marketing activities comply with the advertising policies of each platform, as being banned on major platforms would not be as sustainable as slow but consistent growth.

8.4.3 Influencer Marketing Influencer marketing is a modern marketing strategy that involves partnering with influencers— individuals with a large and engaged following on social media—to promote a product. This approach can be particularly effective for a CBDa beverage, as it can help to increase brand awareness, reach a targeted audience, and build trust through personal endorsement of the product. As part of our overarching digital marketing strategy, we intend on creating stringent policy around the minimum around of follower’s influencers may have, posts they can/cannot make about our product as well as posting schedules. This will also include negotiating compensation packages with influencers, which may include payment, free products or a cut of the products sold.

Influencers can significantly enhance brand awareness and reach a targeted audience [28].

They often have a niche following that aligns with the product's target market, making them an effective channel for reaching potential customers. Our goal is to choose influencers who highlight our brand values of excellence in health while maintaining a fun and active lifestyle.

Furthermore, influencers can create authentic and engaging content that resonates with their followers, making their endorsements more impactful than traditional advertisements.

Influencers know their audience better than we do, so while we make following our guidelines a nonnegotiable for receiving compensation, allowing leniency on creative ways to market our product are encouraged.

In addition to increasing brand awareness and reach, influencers can also help to build trust in the brand. Consumers often trust the influencers they follow and value their opinions. Therefore, a personal endorsement from an influencer can be a powerful way to build trust in the product and encourage consumers to try it. HDCA drinks are a completely new product on the market, so we look forward in recruiting health and wellness influencers to assist us in educating our audience.

As we touched on before, choosing the right influencers to partner with is crucial. The influencer's audience should align with the product's target market, and the influencer should have a genuine interest in the product to ensure an authentic endorsement. For this reason, we believe we must target holistic health gurus first – a demographic which will be excited by our 74

product and whose audience looks to them for advice. We are looking for collaboration; not an employee/employer relationship. That is why we are excited to implement a program where our influencers will be directly compensated for the products sold through their social media channels. When an influencer is approved to work with us, they are assigned a specific code – ex: ‘PSB23’ – when customers use this code at our Shopify checkout, they will receive a small discount compared to the market price and the influencer will receive 20-30% of the sales sold through their code (the exact percent is negotiable). Known as affiliate marketing, this is one tactic to incentivize influencers to follow through on their end of the bargain while attracting new consumers and introducing them to the brand with a cheaper-than-usual beverage.

Influencer marketing can be a powerful tool in the marketing strategy for a CBD/HDCa beverage. It can help to increase brand awareness, reach a targeted audience, and build trust in the product. However, the right influencers should be chosen, and clear expectations and guidelines for the partnership must be established.

Figure 12 PureSource Beverages is looking to work alongside wellness influencers

8.5.1 Online Sales Online sales are a vital channel for a CBD beverage company, as most sales of CBD outside of cannabis dispensaries occur on the internet. We are looking to incorporate Shopify and Amazon Storefront to effectively promote and sell CBD products online [29].

Influencer marketing is one key strategy. Influencers, with their large and engaged social media following, can help promote the CBD/HDCa beverage to their followers. This strategy can be especially effective since influencers offer a level of authenticity and trust often lacking in traditional advertising. When selecting influencers, it's vital to ensure their followers match the 75

CBD/HDCa beverage company's target demographic and that they align with the brand's values and image. We look forward to setting up an affiliate marketing program to draw in potential candidates and compensate them fairly for their work.

Strategies like native advertising and content syndication can also be highly effective, but are more expensive and time consuming than digital marketing. These tactics involve placing content or ads in digital publications or on third-party sites frequented by potential customers.

This can increase brand visibility and reach a targeted audience.

Out-of-home advertising, such as billboards, can further promote the online store. While potentially more costly than other strategies, it can effectively increase brand awareness and drive traffic to the online store.

Lastly, podcast ads can boost brand awareness. By placing ads in relevant podcasts, the brand aligns itself with personalities that listeners trust, which can build credibility and drive sales.

A CBD/HDCa beverage company has numerous strategies at its disposal to drive online sales.

The key lies in selecting the strategies that align best with the brand's target audience and marketing objectives, continually testing and optimizing these strategies to maximize return on investment.

Figure 13 PureSource Beverages can be purchased on Shopify

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8.5.2 Retail Partnerships Retail partnerships are a crucial distribution channel for CBD/HDCa beverage companies.

Setting up successful retail partnerships necessitates a series of strategic steps, including identifying potential partners and supporting them to effectively sell the product [30].

The first step is identifying potential retail partners, achieved through extensive market research to pinpoint retailers selling similar or complementary products and serving the same target market. Considerations should include the retailer's size, location, reputation, and customer base. Understanding their product selection process and criteria can assist in customizing the proposal to their requirements.

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Percentage of Consumers Who Shop at Store Type 2020 and 2021 [33].

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Following the identification of potential retail partners, the next move is to present them with a compelling proposal. This should detail the product's attributes, including ingredients, benefits, unique selling points, and competitive advantages. Furthermore, the proposal should encompass information about the company, such as its mission, values, track record, and any awards or recognitions it has garnered. The proposal, professionally presented and personalized for each retailer, should emphasize how the product can benefit their store and satisfy their customers' needs.

The proposal should also lay out the suggested partnership terms, encompassing the product's wholesale price, recommended retail price, minimum order quantity, and payment terms.

Flexibility and openness to negotiation are vital, as retailers might have varied requirements and expectations.

After a retailer agrees to stock the product, the next phase is to offer the necessary support to effectively sell it. This might entail providing product training to the retailer's staff to ensure they fully understand the product and can relay its benefits to customers. Also, offering marketing materials like product brochures, display stands, and promotional materials can assist in attracting in-store customers.

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Running promotions is another method to stimulate customer demand for the product. This could involve limited-period discounts, free samples, or competitions. Such promotions can boost product visibility, encourage trials, and drive sales.

Retail partnerships can serve as a key distribution channel for a CBD beverage company. By identifying potential partners, presenting compelling proposals, and providing necessary support, companies can broaden their reach, improve brand visibility, and enhance sales.

Nonetheless, establishing successful retail partnerships necessitates a strategic approach, an enticing product offering, and commitment to assisting the retailer in selling the product.

Figure 14 PureSource Beverages is available to Retailers on RangeMe

8.6.1 Consumer Education and Engagement For CBD beverage companies, consumer education and engagement are pivotal in building trust and promoting sales. Several strategies can be deployed for enlightening consumers and enhancing engagement with the brand [31].

A critical strategy is offering comprehensive product information, including its ingredients, benefits, and instructions for use. Moreover, it is crucial to elucidate the science behind CBD/HDCa and its prospective health benefits. This approach can help dispel any CBD/HDCa myths or misconceptions, thereby reassuring consumers of the product's safety and effectiveness.

Another strategy involves leveraging social media for consumer engagement, including regular product updates, response to comments and queries, and sharing user-generated content.

Social media can also host competitions or promotions to boost engagement and sales.

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Figure 15 PureSource Newsletter, Blog Page and Live Steam Events

Influencer marketing can be another effective strategy for consumer education and engagement. Influencers can aid in product promotion to their followers, offering a degree of authenticity and trust often lacking in traditional advertising. Selecting influencers whose followers align with the Functional beverage company's target demographic and resonate with the brand's values and image is crucial.

Lastly, businesses can utilize machine learning to personalize their marketing and engagement endeavors. By analyzing data on consumer behaviors and preferences, machine learning algorithms can help companies tailor their marketing messages and engagement strategies to each consumer. This can enhance the relevance and effectiveness of these endeavors, leading to elevated engagement and sales.

Consumer education and engagement are vital for a CBD/HDCa beverage company. Through detailed product information provision, consumer engagement on social media, influencer marketing leverage, and personalization of efforts using machine learning, companies can build trust, enhance engagement, and promote sales.

9.1.1 Marketing & Sales Plan Using social media to its full potential! First seen as a trend, Marketing on social media platforms is now an essential part of today’s business.

Social media statistics for selling products: • 3.78 billion people use social media according to Statista, 2020 • 54% of social browsers use social media to research products, according to GlobalWebIndex, 2018 • 90% of people buy from brands that they follow on social media according to retail dive 81

• • • •

71% of consumers who have had a good social media experience with a brand are likely to recommend it to others. Smartinsights 49% of people in the 18-29 age range report purchasing something after seeing a social media ad for it.

77% of X users report feeling more positive towards a brand when their Tweet has been replied to by the brand’s X account.

97% of Fortune 500 companies rely on social media according to Entrepreneur, 2021

With social media platforms such as Instagram, Facebook, TikTok, YouTube, Pinterest, and many more, there are countless creative and innovative ways PureSource Beverage Company can connect with their existing customers and convert new ones.

Why Vending Machines with PureSource Beverages The Internet of Things (IOT) is a game-changer in the vending machine market and since the pandemic the technology has sky-rocketed. The IOT has enabled real time data and monetization of vending machines making it more convenient to gather consumer experiences and expectations. Vending Machines are now capable of voice recognition and fully interactive screens and big data integration. This has opened the door for more convenient and userfriendly machines for consumers and has created a positive impact on the vending machine market growth.

Features of IOT Vending Machines: • Touch-free transactions • No-touch automatic delivery door • Track real-time sales data and inventory • Remotely managed pricing, images, and content • Cloud-bases sales and inventory reporting • Customer preferences and buying habits • Integrated with smart-phones and social media to advertise to consumers

Intelligent Vending Machines These (IVM’s) Intelligent Vending Machines have evolved to not only dispense PureSource cold-brewed beverages but also to engage with consumers. These touchscreen vending machines are great for high-traffic areas like airports, malls, business parks, and transit centers.

It’s easy for a consumer to walk past a vending machine, but an IVM with a large touchscreen 82

will attract consumers who wouldn’t ordinarily stop. With Added video, audio, and 3D animation of product benefits, this will attract more customers and increase sales. Product information can be paired with detailed nutritional information by either image or video multimedia. IVM’s can take Coupons, NFC, Apple Pay, Samsung Pay, and Google Wallet along with standard credit card transactions. Rapid digitalization and scalability allow for the exponential growth of the PureSource Beverage brand identity. These breakthroughs in technology and changes in consumer purchase patterns are expected to make way for rapid growth in the future.

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10. Sales Plan PureSource Beverage Company is excited to move forward with the distribution of this innovative product. These all-natural functional beverages will soon be widely available in retail stores such as grocery stores, convenience stores, hotels, gyms, and office buildings, just to name a few. Soon, we plan to launch our beverages in 100 stores, while simultaneously seeking hundreds of influencers throughout the country and the strategic placement of Intelligent Vending Machines.

As busy consumers look for more convenient on-the-go healthy meal options, intelligent vending machines are popping up across the country. These (IVM’s) Intelligent Vending Machines have evolved to not only dispense PureSource cold brewed beverages but also to engage with consumers and keep up with demands.

In addition to Stores and vending machines, PureSource Beverages will also be available online with an exploding presence through the ever-trending social media influencers. After all, beverage consumers make emotionally based decisions numerous times a day. Meanwhile, millennials are increasingly healthy-obsessed, with functional beverages replacing sugary sodas. 67% of Americans say they prioritize healthy food purchases (according to Nielsen reports). Our social media influencers will be like celebrities, gathering crowds at special events in our mobile beverage coach.

PureSource Beverage Company is showcasing our beverages on Rangeme Suppliers’ website.

This gives us visibility with leading retailers who are interested in our unique functional beverages. It also helps us track buyer’s engagements and interest in our product.

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10 Financial Plan 10.1.1 Key assumptions CBD alone is projected to be a 100 Billion Dollar Market over the next few years.

Consumers, especially those from GenZ, GenX and Millennials are looking for healthier options than the traditional Soda’s their parents grew up on.

One of the best ways to market our creative branded beverages is with social media.

Platforms & Influencers Influencers have an enormous number of followers that tend to actively see out and buy the products they represent.

• 3.9 Billion people use social media • 97% of fortune 500 companies rely on social media PureSource Personalities are social media stars!!! Our products are right in line for this vast market as HDCa & Beverages fits perfectly into the trend of functional beverages, cool characters, Millennials, GenX & GenZ coupled with the social media.

Bonanza taking place right now!

On the heels of the pandemic, we all just lived through – There has never been a better time to be a part of a shop on-line movement than right now!

11.1.1 Summary The beverage industry is experiencing a transformative phase, witnessing a confluence of trends driven by increasing health consciousness, changing consumer preferences, and the rapid legalization of cannabis products in many regions. Two emerging segments, in particular, functional beverages and CBD beverages, hold tremendous potential. A key development within these sectors is the introduction of CBD-infused functional beverages, which represent a fusion of the health benefits associated with both product categories.

Moreover, the nascent hemp-derived cannabidiolic acid (HDCa) beverage market is also an area of growing interest. Despite being in its early stages, the market's potential growth is promising, fueled by the health and wellness trend and the potential therapeutic benefits of HDCa. Major players such as Canopy Growth Corporation and New Age Beverages Corporation are likely to be significant influencers in this sector's evolution.

Analyzing historic trends in beverage consumption and public perception clearly highlights a move towards healthier and premium alternatives. This shift, combined with the increasing acceptance of CBD and HDCa products, presents a favorable environment for the emergence and growth of a CBD/HDCa beverage startup.

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Starting a CBDa beverage business in this climate presents numerous opportunities, but also substantial challenges. Regulatory complexity, the need for scientific validation of health claims, and the necessity for effective brand communication and consumer education are among the significant hurdles that startups in this sector will face.

However, the high growth rates projected for the CBD and functional beverage markets suggest strong market potential. Furthermore, the increasing consumer interest in wellness products and the unique therapeutic benefits associated with CBDa point to a considerable consumer base for these products.

The key to success in this venture will lie in navigating the regulatory landscape, substantiating product claims with scientific research, and effectively communicating the unique value proposition of the products to consumers. Furthermore, the business should focus on sustainability and premiumization, aligning with the broader trends within the beverage industry.

In conclusion, the potential for a CBD/HDCa beverage startup is substantial in the current market scenario. The growing demand for health-oriented, premium beverages, coupled with the rising acceptance of CBD and HDCa products, points to a promising future for startups willing to navigate the industry's challenges.

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