Bevscape: The Latest Beverage Brand News

Nutpods Sells to Kroger-Backed MPearlRock

Nutpods, the plant-based coffee creamer brand founded in 2013 by Madeline Haydon, was acquired by Kroger-backed investment group MPearlRock, helmed by former Keurig CEO Brian Kelley, in January. Terms of the deal were not disclosed.

Having emerged as an early entrant in the non-dairy creamer category, Nutpods bridged the gap from e-commerce exclusive product to develop into a national player with a presence in 15,000 retail stores, and is the top-selling plant-based creamer within natural retail, according to the brand. The company took on investment from VMG Partners in 2019, and has since expanded into ready-to-drink products and collaborations with brands like Chamberlain Coffee.

“We are proud to join MPearlRock in the next stage of our brand’s evolution. Brian’s background with leading global consumer brands coupled with MPearlRock’s capabilities and resources makes them an ideal growth partner for us,” Haydon said in a statement. “We are excited to reach more consumers in new channels and new product verticals who allow us to become part of their daily coffee ritual.”

The deal marks an auspicious debut for New York-based asset management group MPearlRock, a partnership between PearlRock Partners (a division of Kroger) and New York-based asset management group MidOcean Partners that’s described as “a strategic collaboration to introduce emerging consumer packaged goods (“CPG”) brands to new customers.”

Announced a week prior to the nutpods deal, the new entity aims to pair MidOcean’s investment expertise with consumer brands and “Kroger’s deep retail and CPG experience” through the leveraging of retail data science and insights its from in-house analytics team, 84.51°

“We have been following nutpods for the past few years and have been impressed with Madeline’s vision and disciplined approach and how she built strong customer loyalty by developing and marketing a truly superior product,” said Kelley.

He continued: “nutpods is a remarkable entrepreneurial success story that exemplifies the businesses and management teams with whom we seek to partner. We are thrilled to support the next chapter in nutpods’ evolution and are delighted to work with Madeline and her team to accelerate growth and provide the resources to best position the brand to deliver unique, healthy products to loyal and new customers.”

Diageo, Diddy Settle Discrimination Suit

After nearly nine months of an ugly public legal battle, Sean “Diddy” Combs and Diageo settled their dispute over allegations from the music mogul that the brands he collaborated with Diageo on— Cîroc Vodka and DeLeon Tequila— received worse treatment because of his race.

The parties “have now agreed to resolve all disputes between them,” read a statement from Diageo and Combs, issued January 16. “Mr. Combs has withdrawn all of his allegations about Diageo and will voluntarily dismiss his lawsuits against Diageo with prejudice.”

The statement continued that Diageo and Combs have “no ongoing business relationship, either with respect to Cîroc Vodka or DeLeón Tequila, which Diageo now solely owns.” Diageo currently and always has fully owned Cîroc, and the group previously partnered with Combs on brand marketing.

The battle began last May when a complaint was filed by Combs Wines and Spirits, a company owned by Combs, in New York State Supreme Court in Manhattan against Diageo’s North American business. Among accusations of racial discrimination, the lawsuit also said Diageo has put more resources into the portfolio’s other tequilas, including fellow celebrity George Clooney’s Casamigos, which Diageo acquired in 2017 for up to $1 billion.

The filing stated that Combs Wines and Spirits planned to seek “billions of dollars in damages due to Diageo’s neglect and breaches” in a separate lawsuit.

Diageo responded in June by severing ties with Combs, ending the two parties’ 15-year business relationship and claiming that the allegations were false and defamatory. Diageo asked the judge to send Combs’ lawsuit to arbitration or dismiss the complaint entirely.

The mogul scored a temporary legal victory when the Supreme Court of New York denied Diageo’s motion to dismiss the lawsuit and its motion to force the case into arbitration. In October, Diageo responded by countersuing, and said Combs leveraged allegations of “racial animus” to extort the firm.

While not named as a cause for settlement, the saga was made even more complicated after the spirits company used the sexual assault lawsuits against the music mogul to bolster its case.

Combs is often credited with illustrating the power of celebrity backing to boost spirit sales. In 2007, Diageo enlisted Combs to develop its Cîroc brand, at the time a low-ranked vodka. After Combs took charge of the brand’s strategic marketing, Cîroc ascended to a top seller within a few years, growing from a 50,000-case-per-year vodka into nearly 2 million-per-year. It has since released several product variations, including ready-to-drink line CÎROC Vodka Spritz.

The success of that collaboration spurred Diageo to form a joint venture with Combs in 2014 and to purchase DeLeón, a boutique high-end tequila brand.

Non-Alc Retailer Boisson Sets Course for Wholesale Expansion

In the thick of Dry January, leading non-alc retailer Boisson announced an expansion of its national wholesale business.

Since launching in NYC in 2021, Boisson has been an influential voice within a new generation of businesses growing the burgeoning no-and-low alcohol segment. After expanding to eight storefronts and growing its e-commerce program, the company will leverage new partnerships with KeHe and craft wine and spirits distributor LibDib to cement a national footprint in wholesale distribution.

The announcement follows Boisson’s $5 million bridge funding round landed in September from Convivialité Ventures, the VC arm of Pernod Ricard, and Connect Ventures. That funding coincided with the appointment of a new CEO, Sheetal Aiyer, to further the company’s long-term ambitions of becoming a three-pronged business: retailer, e-commerce site and wholesale distributor. But it looks like distribution will be the company’s next big frontier, with plans to grow its wholesale business by 70% in 2025.

The new push is being helmed by recent hire, Jill Sites, vice president of wholesale, whose resume includes national sales director for Betty Buzz as well as stints at Breakthru Beverage and Redwood Brands. Boisson aims to build on its consumer insights to offer retailers and on-premise more insight into the emerging category.

“Existing spirits and beer distributor networks are phenomenal – I worked for one of the best for almost a decade – but most are just starting to figure out NA, while Boisson brings years of 100% dedication to the category,” said Sites. “We know that we are small, but we are mighty and we see this as the perfect moment to give NA a seat at the big table of industry wholesale distribution.”

The national account strategy with KeHe and LibDib involves “curation and consolidation,” said Sites, acting as the single point of contact with distributors and taking care of paperwork, discounts, pitching to customers and attending shows, in addition to handling shipping and purchase orders.

In September, Nick Bodkins, founder and president of Boisson, described the company’s next stage of growth as furthering its “verticalized approach to the market” and leveraging Boisson’s flexibility outside of the three-tier system to continue to sell direct to consumers, into bars and restaurants, and specialty grocery.

Boisson has no plans to move away from its retail platforms, which Sites said is the company’s most important channel. But taking a shot at a larger share of the food and beverage market will include expanding to more national retailers, grocery, bottle shops, and entertainment venues. In order to be successful in a low margin, high volume channel like wholesale, the company needs to drive it, said Sites.

“We are never going to beat big BevAlc at what they do, they’re great at it,” said Sites. “But we are looking to work at specialty grocery, natural grocery and fill in holes where we can.”

At independent liquor and some big liquor chains, Boisson is aiming to curate non-alc sets and increase education about non-alc. The company has a more curated and specific wholesale portfolio than the selection in Boisson stores. As certain products grow within the category, they may move to the three-tier system with a larger wholesaler, said Sites, and Boisson will rotate new products in.

Distribution will focus on key growth markets, including New York, California and soon to be Miami, where Boisson has physical retail locations.

Expanding further into retail with specific non-alc sets and finding inroads into the bar have been priorities for non-alc brands as they look for growth. Non-alc beverage sales were about $510 million in the 52-week period ending July 29, up 31.2% versus a year ago, marking the category’s largest year of absolute dollar growth in five years, according to NIQ data.

Oatly Launches Two New Milks

After several years focused primarily on innovating in the food space, Swedish plant-based products maker Oatly is getting back to basics with two new oat milk launches: Unsweetened Oatmilk and Super Basic Oatmilk.

Initially announced during the company’s Q3 earnings last year and launched nationwide in January, Unsweetened and Super Basic add better-for-you options to the brand’s flagship oat milk line. Unsweetened contains zero grams of sugar and 40 calories per serving, while Super Basic – true to its name – simplifies the ingredient panel by removing all oils and emulsifiers, containing only water, oats, sea salt and citrus fiber.

Each SKU is available in 64 oz. cartons and will retail in line with the rest of Oatly’s plant milk portfolio, priced around $5.99.

According to Oatly’s North America president, Mike Messersmith, the company had been limited in its ability to innovate within the oat milk space by its myriad supply chain and manufacturing hurdles. With the brand now confident in its ability to produce and deliver beverages throughout the U.S., Oatly is once again focusing on innovating in its flagship category.

“They [the new oat milks] both represent abilities for us to go deeper with existing customers, and also expand our overall distribution footprint and bring more delicious plant-based oat milk products to more people,” Messersmith said.

Both innovations were responses to consumer feedback, he said. While the brand has received some media criticism in the past over the sugar and oil content of its plant milks, the Unsweetened and Super Basic varieties are a reaction to requests from its existing customers. In the case of Super Basic, Messersmith said the company saw a number of videos on social media of consumers making their own homemade oat milk and recognized an opportunity to produce a more convenient alternative.

“I’ve had friends that showed me their own homemade oat milk, made with cheesecloth and a sieve, and I’m just like, ‘We can do that better for you! It will be easier and taste better,’” he said.

Messersmith said the launch was timed for January in order to be ready for retailer resets, adding that the company’s commercial team made a “concerted effort” to ensure the innovations are available in as many chains as possible at launch. The drinks are currently rolling out now nationwide in retailers including Albertsons, Publix, Sprouts and Target stores.

Additionally, Messersmith said Super Basic will be available in Whole Foods, Meijer and Shop Rite accounts and Unsweetened will add Kroger, Stop and Shop and H-E-B stores among others.

SYSTM Foods Acquires Humm Kombucha

SYSTM Foods, a joint venture between SYSTM Brands and CPG investment firm GroundForce Capital, acquired Oregon-based Humm Kombucha in January. Financial terms of the deal were not disclosed.

Founded in 2009, Humm produces a variety of low- and zero-sugar kombuchas and functional beverages, including a line of probiotic sodas and seltzers. The brand will join a portfolio of other SYSTM acquisitions, including Chameleon Organic Coffee and functional beverage brand REBBL.

The acquisition is another step in SYSTM’s “strategic objective of creating a leading functional beverage platform” that aligns with its better-for-you CPG portfolio and bolsters its position in refrigerated RTDs, per a press release issued this morning.

“Today’s consumers are seeking healthier, lower-sugar beverage options with functional advantages, ranging from digestive health to immune support, that don’t sacrifice taste or quality,” said SYSTM Foods CEO Andy Fathollahi in the release. “HUMM provides SYSTM Foods with unique capabilities and adds another incredible brand to our portfolio.”

According to Circana, Humm’s refrigerated kombucha products grew dollar sales by 18.5% to $23.4 million in the 52-weeks ending October 8, 2023 in U.S. MULO and c-store retail accounts. That data does not include ecommerce sales or all product lines sold by the brand.