The Latest News on the Brands You Sell

Daily Greens Banks $5.5 Million

High pressure processed juice company Daily Greens has completed a $5.5 million raise, according to a new filing with the U.S. Securities and Exchange Commission (SEC).


The filing indicates that the funding came from a single investor, but it did not name the source. Thirteen months ago, Earthbound Farms, a subsidiary of food and beverage conglomerate WhiteWave Foods, made a $3 million investment in Daily Greens in exchange for a minority stake in the company. An SEC filing from November 9, 2015 revealed that, at the time, Earthbound Farms owned approximately 26 percent of Daily Greens. The filing also stated that Earthbound loaned the juice company $600,000 in unsecured debt.

Over the past year Daily Greens has ramped up distribution of its organic green juices and hemp milks which are sold at Whole Foods stores across the U.S. and also carried by a range of natural and conventional grocers, including H-E-B and Kroger. The company’s flagship line of 16 oz. juices, promoted as containing the equivalent of six pounds of vegetables and fruit in each bottle, are sold primarily in natural retailers. A 12 oz. size that debuted in 2015 focuses on mainstream placement of the brand. Also launched last year were the company’s “Half Pint” products. A three-SKU line of kid-friendly juice smoothies, the beverages come in 8 oz. bottles and are sold exclusively at Whole Foods.


Zola Sold to Private Equity Firm

A few years ago, Zola CEO Chris Cuvelier realized that in order to achieve its goal of becoming a $100 million company, he needed to change the brand’s emphasis from strictly an “Acai Power Juice” to the broader platform encompassed by the tagline “Fruits of the World.”

“I think it took us from being very narrow and tied to a category to really being a platform that gives us a license to go into anything that is fruit and fruit-related,” Cuvelier said of the company, which also plays in snacks as a result of the pivot. “It simplified things and allowed us to be more intense about it. I think the brand platform is something that’s very unique and very ownable.”32oz_og_bl_po_fruit.new_

In February, the company harvested the benefits of that change, as consumer products-focused private equity firm KarpReilly LLC purchased the company, which had long been majority-owned by previous investor Emigrant Capital. While specific numbers were not discussed, KarpReilly purchased 100 percent of the company. Cuvelier and the rest of his team are being retained in the deal, which he said hopes will allow him to eventually meet that $100 million mark.

“They’ve given us a chunk of capital that will take us at least the next couple of years and the ability to have access to further growth capital as we go forward,” he said. “I’m committed to stay here as CEO and build the team — that was one of the things that was important for KarpReilly and from a long-term standpoint. It’s not a specific period of time, but I’m committed to getting out there and growing the business.”

That business has been on the move since the company pivoted toward its broader portfolio. In 2012 Zola started selling coconut water; last year, it also moved into food, selling chocolate-covered fruit snacks. As acai as a category has waned a bit, that move paid off, Cuvelier said.

He cited an independent test of coconut waters that KarpReilly conducted before they contacted Zola, for example. He said Zola’s had tasted the best, but the test itself showed him the firm’s interest in and passion for consumer brands.

Last year, Zola announced that SPINS data had shown it to be the fourth-largest coconut water brand in conventional channels.


Kratom Chaos

Shot makers using the pain-relieving dietary supplement kratom are on notice that the U.S. Food and Drug Administration (FDA)’s is cracking down. In January, U.S. Marshals seized 90,000 bottles of RelaKzpro, a dietary supplement containing the controversial botanical, at the agency’s request. The FDA announced the seizure of more than $400,000 worth of product in South Beloit, Ill., doubling down on its stance that kratom poses a health risk to consumers. The news came just days after The New York Times profiled the botanical and the issues surrounding it.

Kratom-Powder“We have identified kratom as a botanical substance that could pose a risk to public health and have the potential for abuse,” said Melinda Plaisier, associate commissioner for regulatory affairs for the agency. “The FDA will continue to exercise our full authority under law to take action on these new dietary ingredients, especially if they ignore the notification requirements, as part of our commitment to protecting the health of the American people.”

The FDA’s action arrived as the latest in a series of measures it has taken against dietary supplements containing kratom, stemming from concerns regarding the toxicity of the botanical in internal organ systems. In February, 2014 the agency issued an import alert allowing the FDA to detain any kratom coming in from overseas. Later that year U.S. Marshals executed a seizure of more than 25,000 pounds (worth upwards of $5 million) of raw kratom material Rosefield Management, Inc. in Van Nuys, Calif.

Last year, Vivazen, a product similar in nature to RelaKzpro, reformulated its shot-format pain relief supplement to be kratom-free in response to the FDA’s sustained pressure. Vivazen’s website states its new version is now manufactured under conditions that are in compliance with the FDA’s Current Good Manufacturing Practices.

Following the FDA’s suppression of the ingredient, a wave of negative press began surfacing around kratom and specifically Vivazen, which listed the ingredient on its label. In a news report aired in June, Birmingham’s WIAT called the product “addiction in a bottle.” Three months later a machete-wielding man robbed an Anniston, Ala. gas station, taking a half case of Vivazen with him in addition to the contents of the cash register. Online bulletin board Reddit has numerous posts of people chronicling their experiences with the drug.

Meanwhile, Vivazen sales rose dramatically, achieving a 1064.4 percent increase in dollar sales over the 52-week period dating from September 6, 2014 to September 5, 2015, when it reached $5.9 million according to Nielsen sales data.


Victory and Southern Tier Tie the Knot

Victory Brewing and Southern Tier Brewing will combine to form Artisanal Brewing Ventures (ABV), a private-equity backed holding company formed by Southern Tier founders Phineas and Sara DeMink and Ulysses Management LLC.

Southern Tier had previously sold a majority stake to the New York-based family office in 2014.Artisanal-Brewing-Ventures

Specific terms of the transaction were not disclosed, but sources familiar with Victory Brewing’s financials and industry multiples said the deal could be valued at more than $120 million.

Victory Brewing, which produced about 141,000 barrels in 2015, had revenues of about $50 million in 2015, according to co-founder Bill Covaleski. An investment deck sent to potential buyers last year also pegged the company’s anticipated 2015 EBITDA at $12.3 million.

Billed as a “new strategic framework,” the merger will provide Victory with “capital, security and vision for the future” and create the 15th largest craft brewing company in the U.S., according to a press release from Victory Brewing.

“Things are changing within our industry,” Covaleski told Brewbound. “We are not nervous about those changes but we are not going to accept that status quo is an acceptable way forward.”

Covaleski and co-founder Ron Barchet will continue to lead Victory and will hold board seats in the newly created Artisanal Brewing Ventures outfit. Six other stakeholders will fill out the remaining seats on the board, including Artisanal CEO John Coleman, Southern Tier’s Phineas and Sara DeMink, Ulysses Management’s Paul Barnett and Toby Rando, and industry consultant Bump Williams.

Combined, the two beer companies shipped more than 250,000 barrels in 2015 with a bulk of those sales concentrated in the Northeast.


Golazo Shuts Down…

Golazo, a soccer-themed brand of energy and sports drinks, has closed its doors.

Founder and CEO Richard Tait said that despite continued growth of the brand in natural and conventional grocery channels as well as a loyal customer base, the company hadn’t reached profitability and was unable to secure the capital necessary to “take it to the next level.”

“It’s disappointing and sad, but I think we did give it our best shot at goal.” Tait said.

61GudYj8iML._SL1500_Tait, the creator of popular board game Cranium, launched Golazo (which means “super goal” in Spanish) in 2010. The company was backed by nearly $4 million in initial funding, including investment from Starbucks CEO Howard Schultz (also an investor in Cranium) and the Moretti brewing family, owners of the Inter Milan soccer club. Golazo debuted in January, 2012 as a single SKU energy drink, picking up distribution at a handful of small grocery chains in the Seattle area. Marketed as “natural sports fuel,” Golazo later added three varieties and introduced a line of coconut water-infused sports drinks.

Last year the company initiated a strategic pivot, repositioning the brand to be more inclusive of consumers with interests in range of athletic endeavors. Golazo also revamped its packaging to enhance visual cues about health and functionality and removed the soccer ball from its logo. In May, sought to further enhance its positioning as a better-for-you brand, and reformulated most of its product line to be certified organic, promoting the change as “Putting the ‘O’ in Golazo.”

Despite the revised branding and promotion as a healthy alternative to competing brands, Tait acknowledged that Golazo continued to face an uphill battle in the sports and energy drink categories, each dominated by a handful of companies.

“We were competing concurrently in two of the largest, the most competitive categories in the beverage industry and with some of the best marketers in the world,” Tait said.


…but WheyUp Founder Returns

A decade after he launched WheyUp, a first-to-market protein and energy drink hybrid, the brand’s founder, Erik Rothchild, is back with a revamped version of his original offering, called FitWhey. The beverage, which contains 20 grams of protein, 150 mg of caffeine and 90 calories per 16 oz. PET bottle, will launch in Orange, Berry and Grape flavors.1147_FitWhey_15_label_ORANGE2

The birth of FitWhey coincides with the downfall of WheyUp, whose parent company, Shadow Beverages and Snacks, recently underwent bankruptcy. Shadow Beverages acquired WheyUp in 2011, a decision Rothchild says he made when he was “out of options” after struggling to raise capital for the company throughout the economic recession. In the years that followed, the acquisition did little to grow the brand beyond its home base in the Southwest, as WheyUp played third fiddle behind Shadow’s No Fear energy line and GNC line of sports drinks.

In the fall, knowing WheyUp was on its way out, Rothchild met with a buyer representing about 100 Arizona QuikTrip stores, where the original WheyUp brand had been a solid performer in the past. With the guaranteed distribution in place, Rothchild secured funding from friend Tim McGeehan to launch B-Fit Brands, the new company under which FitWhey resides. FitWhey will have its first production run this weekend before landing on QuickTrip shelves in the coming weeks.

For all of his former company’s challenges, Rothchild says his belief in its product never wavered. He points to the competition as proof: while WheyUp struggled under the Shadow Beverages banner, larger companies like Monster, Rockstar and Starbucks found success in combining caffeine and protein.

“All of those beverages proved the concept,” Rothchild says. “We lacked funding and later on the wrong company acquired it, but it was never about the product.”