David Smith was planning to end his Wednesday with some celebratory cocktails. His company, cold brew coffee maker High Brew, announced a funding round and had landed an important distribution engine in the same day.
Smith probably deserved the drink — after a bunch of interviews, he was ready to lose his voice. But there had been plenty to discuss — at the same time that High Brew announced it had landed a $4 million investment from CAVU Venture Partners, the investment firm launched by Deep Eddy Vodka co-founder Clayton Christopher, former Vitaminwater CMO Rohan Oza and former hedge fund investor Brett Thomas, Dr Pepper Snapple Group executives were praising the brand as a new part of their allied brands distribution portfolio.
Speaking from his company’s Austin headquarters, Smith discussed the raise further in a call with BevNET, saying the new funding will go towards further expansion of the company’s sales and marketing efforts and getting more “feet on the street,” which will see the buildout of a High Brew field marketing team across the country.
The raise will also go towards supporting significant distribution expansion by way of the new partnership with DPS. Smith said the alliance had been in the works since October of 2015 and expects it to significantly expand the brand’s availability in key markets, beginning with New York City, Chicago, Dallas, Austin and Houston.
High Brew will join other beverage brands, including the likes of Vita Coco, Bai, Body Armor and CORE Hydration in DPS’s allied brands portfolio. It will be DPS’s first entry into the RTD coffee segment.
“We’re already in 14,000 doors across the country so we have a lot of distribution today,” said Smith. “DPS will help us accelerate the velocity in those existing accounts but also help open doors to alternative channels and great accounts that are otherwise hard to get into.”
A recent Wells Fargo Securities report credited Dr Pepper Snapple’s strong first quarter earnings to the performance of its allied brands, which accounted for 40 percent of total volume growth. Analyst Bonnie Herzog, who authored the report, noted that the portfolio contained “important contributors to growth and driving DPS brands’ sustained resonance with consumers,” but called the “key opportunity” for the company leveraging that resonance to gain shelf space for DPS-owned brands.
Clayton Christopher, Smith’s former partner in Sweet Leaf Tea and one of High Brew’s initial investors, projects that the distribution partnership will be “a total gamechanger for the brand.”
“We’re big believers in both the ready-to-drink coffee category and the cold-brew subsegment and High Brew is a brand with the ability to compete very well in both,” said Christopher. “A lot of the cold-brew coffee brands are fighting amongst themselves. We see High Brew as a brand with mainstream appeal.”
In February, High Brew hired former Coca-Cola Company and Glaceau executive Andy Steele as vice president of sales – small format, with the intention of expanding the brand’s c-store and drugstore presence. The DPS relationship will largely be managed by Vita Coco vet Brian Arkus, the company’s EVP of Sales & Distribution.
CAVU Venture Partners’ investment in High Brew comes just a month after announcing a $7 million investment in organic kombucha brand Health-Ade and a pair of food brands, including Good Culture cottage cheese. At the time Rohan Oza told Fortune Magazine his interest in Health-Ade came out of wanting “to explore products that not only taste amazing, but which [he] thinks Americans across the country will start embracing as a replacement for soda.”
Launched in the Fall of 2015, CAVU Ventures raised $156 million for its debut fund, announcing its intentions to invest in both mature existing brands as well as in-house startups, the first of which will be Mighty Swell, an all natural fresh juice-based sparkling cocktail in a canned format.
The company’s press release can be found below:
AUSTIN, TX (April 27, 2016) – High Brew Coffee®, a premier provider of ready-to-drink cold brew coffee, announced a Series A-2 investment of $4 million from CAVU Venture Partners, a recently-launched fund focused on investment and incubation in healthy food and beverage companies. High Brew Coffee also announced a new distribution partnership with Dr Pepper Snapple Group (NYSE:DPS), which will include expanded distribution in key markets.
“We are excited to strengthen our relationship with CAVU Venture Partners,” says David Smith, founder and CEO of High Brew Coffee. “It has been great working with Clayton, Brett and Rohan and I look forward to what this partnership will help us accomplish in the months and years to come. I’m also very excited about our new relationship with Dr Pepper Snapple. With the resources and support they bring to the table, we remain confident our strong growth will continue as we deliver premium, on-the-go, cold brew functionality to our customers.”
High Brew Coffee’s new distribution partnership with Dr Pepper Snapple will begin with several strategic markets, including New York City, Chicago, Dallas, Austin and Houston.
“We’re very pleased to have High Brew Coffee as part of our portfolio of allied brands,” said Rodger Collins, president of packaged beverages for Dr Pepper Snapple. “Ready-to-drink coffee has great potential, and High Brew gives us a way to participate in this category with a great tasting and differentiated product.”
The investment and distribution deal are the latest in a number of major developments for the cold brew coffee company. High Brew Coffee’s new latté line was recently introduced at the Natural Products Expo West Trade Show in March and is expected to be available this summer. The company also recently expanded its executive leadership team, with new leaders in sales, operations, and marketing.
“High Brew Coffee is on an amazing growth trajectory,” said Clayton Christopher, co-founder of CAVU Venture Partners. “Our team at CAVU is thrilled to be working with David and his team at High Brew as they shake up the ready-to-drink coffee category.”
High Brew Coffee is made from 100% Fair Trade Certified Arabica coffee beans that are triple-filtered and cold-brewed over time, not heat, which ultimately achieves twice the caffeine and less acidity than your average cup of coffee. This meticulous process enables High Brew Coffee to deliver on its promise of “better, not bitter.” The cold-brew coffees, available in palm-sized cans, are available in rich flavors like Double Espresso, Mexican Vanilla, Salted Caramel, Dark Chocolate Mocha and Black & Bold and contain just 20-60 calories per can. High Brew Coffee is available in 11,000 stores nationwide and retails for $2.49 to $2.99 depending on the product.
About High Brew Coffee
After working tirelessly for 13 years to turn his tiny tea company into a household name, David Smith, co-founder of Sweet Leaf Tea, embarked on the sailing adventure of a lifetime. Discovering the benefits of refreshing cold-brewed coffee during warm nights navigating rough waters, the idea for High Brew Coffee® was born. Founded in 2014, High Brew is an all-natural 100 percent Arabica blend ready-to-drink cold brew coffee made from fair trade coffee beans. Brewed with zero heat, High Brew Coffee® offers premium low-calorie cold-brews in smooth, delicious flavors such as Double Espresso, Mexican Vanilla, Salted Caramel, Dark Chocolate Mocha, and Black & Bold. High Brew Coffee is shelf stable to perfectly accompany an active and on-the-go lifestyle. For more information, please visit www.highbrewcoffee.com.
About CAVU Venture Partners
CAVU Venture Partners invests in high growth, iconic consumer brands, primarily better-for-you food and beverage companies. Founded by CPG Veterans Rohan Oza, Clayton Christopher, and Brett Thomas, CAVU looks to partner with passionate entrepreneurs with big visions. CAVU helps bring those dreams to fruition through know-how and deep industry contacts.www.cavuventures.com
About Dr Pepper Snapple Group
Dr Pepper Snapple Group (NYSE: DPS) is a leading producer of flavored beverages in North America and the Caribbean. Our success is fueled by more than 50 brands that are synonymous with refreshment, fun and flavor. We have 6 of the top 10 non-cola soft drinks, and 13 of our 14 leading brands are No. 1 or No. 2 in their flavor categories. In addition to our flagship Dr Pepper and Snapple brands, our portfolio includes 7UP, A&W, Canada Dry, Clamato, Crush, Hawaiian Punch, Mott’s, Mr & Mrs T mixers, Peñafiel, Rose’s, Schweppes, Squirt and Sunkist soda. To learn more about our iconic brands and Plano, Texas-based company, please visit DrPepperSnapple.com. For our latest news and updates, follow us at Facebook.com/DrPepperSnapple or Twitter.com/DrPepperSnapple.