In a move that ties Coke’s Venturing and Emerging Brands group tightly to one of its most valuable service providers, the brand incubation unit today purchased a minority stake in L.A. Libations, which has handled much of the go-to-market and channel expansion strategies for many of VEB’s products.
The move will put L.A. Libations (recently noted as a BevNET Magazine cover subject), which has recently begun investing in and developing brands of its own, in the position of acting as an innovation resource for its new investor. VEB itself has more success thus far by following the strategies of investing in brands early, like Zico and Honest Tea, and also by partnering with other companies to create products, as with its Illy issimo RTD coffee brand. But VEB’s internally innovated brands have been more of a mixed bag, as products like Cascal, a fermented CSD, and Sokenbicha, a barley tea, have fallen by the wayside.
Started by three former Coke employees, Danny Stepper, Dino Sarti, and Pat Bolden, in 2009, L.A. Libations has deep relationships with retailers and distributors and has helped shepherd Coke’s brands into several broad channels of trade, including drug, warehouse and supermarket accounts. The company has had great success working with a number of brands outside the Coke system, an arrangement that will not change as a result of the agreement.
Two years ago, L.A. Libations began to more actively create brands, launching Aloe Gloe, an aloe water brand, and incubating it on the West Coast. Earlier this year, the company launched Arriba!, an energy horchata, as a national exclusive in 7-Eleven. The company is also investing in a portfolio of brands that it hopes to grow; with VEB as a partner, it seems likely that the company would have the inside track on growing brands that are targeted for Coke.
The investment comes as part of a week in which VEB’s parent company also added to its stake in Keurig to develop new and innovative beverage products via an at-home product. Coke raised its stake from 10 to 16 percent.
The investment in a fund or service provider is not out of character for VEB, which has also invested in a venture capital fund run by First Beverage Group and, several years ago, created a long-term agreement with Brain-Twist, a company owned by entrepreneur Larry Trachtenbroit.
Release is below:
Coca-Cola’s Venturing and Emerging Brands Secures Minority Stake in L.A. Libations
Los Angeles, May 13, 2014 – L.A. Libations, Inc. today announced The Coca-Cola Company secured a minority stake in the entrepreneurial beverage incubator. Since 2009, L.A. Libations has performed contract sales work for brands in Coca-Cola’s Venturing and Emerging Brands (VEB) North American business unit. This expands their partnership to provide VEB a stake in L.A. Libations which has investments in an emerging brand portfolio including products in Aloe Vera, Chia, and Relaxation beverages, among others.
L.A. Libations’ work with VEB began with roles on ZICO Premium Coconut Water and illy issimo premium ready-to-drink coffee. Augmenting VEB’s own efforts, L.A. Libations leveraged strong retail relationships to successfully secure third party distributors and key authorizations with prominent retailers.
“Since our initial interaction with L.A. Libations, they’ve grown their incubation capabilities. We are impressed by their relationships with promising next generation brands” said Scott Uzzell, President and General Manager, Venturing & Emerging Brands, Coca-Cola North America. “We are expanding our partnership with L.A. Libations because we believe in the team and their continued success.”
“We are fired up about having The Coca-Cola Company’s VEB as a partner in our business” said L.A. Libations Co-Founder Danny Stepper. “Looking at the beverage landscape, we believe VEB has the best approach to emerging beverages. As a result of this partnership, we are better positioned to capture the incredible emerging beverage opportunities in the marketplace today.”
L.A. Libations has seen impressive growth since its inception in 2009. Focused on early stage beverage categories, L.A. Libations works with some of the nation’s largest retailers to provide strategic insights. This role gives them an important advisory position regarding innovation and assortment within stores.
About L.A. Libations
Founded in 2009 by three former Coca-Cola executives Dino Sarti, Pat Bolden and Danny Stepper, L.A. Libations LLC is an entrepreneurial beverage company focused in the emerging beverage space. L.A. Libations is the maker of Aloe Gloe Premium Aloe Vera Water, Arriba Horchata Energy and Chia Vie Grounded Chia Smoothie. L.A. Libations’ aspiration is to bring better for you beverages to the mainstream consumer. L.A. Libations advises some of the largest Grocery, Mass Merchandiser, and Convenience stores on emerging beverage strategy and assortment. For more information visit http://lalbev.com.
About The Coca-Cola Company
The Coca-Cola Company (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands. Led by Coca-Cola, one of the world’s most valuable and recognizable brands, our Company’s portfolio features 17 billion-dollar brands including Diet Coke®, Fanta®, Sprite®, Coca-Cola® ZeroTM, vitaminwater®, Powerade®, Minute Maid®, SimplyTM, Georgia® and Del Valle®. Globally, we are the No. 1 provider of sparkling beverages, ready-to-drink coffees, and juices and juice drinks. Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy our beverages at a rate of 1.9 billion servings a day. With an enduring commitment to building sustainable communities, our Company is focused on initiatives that reduce our environmental footprint, support active, healthy living, create a safe, inclusive work environment for our associates, and enhance the economic development of the communities where we operate. Together with our bottling partners, we rank among the world’s top 10 private employers with more than 700,000 system associates. For more information, visit Coca-Cola Journey at www.coca-colacompany.com, follow us on Twitter at twitter.com/CocaColaCo, visit our blog, Coca-Cola Unbottled, at www.coca-colablog.com or find us on LinkedIn at www.linkedin.com/company/the-coca-cola-company
About Venturing and Emerging Brands
Venturing and Emerging Brands (VEB) is a dedicated operating unit of Coca-Cola North America charged with identifying high-potential growth brands in the North American beverage space for investment or ownership by The Coca-Cola Company and exploring potential synergistic relationships with these investments. With direct access to the global resources and industry expertise of The Coca-Cola Company and its system, VEB is uniquely positioned to develop emerging beverage brands of The Coca-Cola Company to their full potential. VEB’s portfolio of brands currently or has previously included Fuze, Nos, Honest Tea, ZICO Premium Coconut Water, Core Power, and illy issimo. For more information, please visit www.vebatcoke.com.