Bevscape: The Latest Beverage Brand News

Califia Farms Names Dave Ritterbush CEO; Steltenpohl Stays as Board Member

Plant-based food and beverage maker Califia Farms announced in August the appointment of CPG industry veteran Dave Ritterbush as CEO. The company’s founder and longtime chief executive Greg Steltenpohl remains on the board as an Executive Director.

Speaking with BevNET, Steltenpohl said he had planned for “several years” to retire from the role when he turned 65 years old. Now going on 66, Steltenpohl said he believes that freeing himself from the day-to-day operations of running Califia will allow him to become a better advocate for the plant-based food industry.

Ritterbush comes to Califia from Quest Nutrition, where he served as president and CEO and led the company to a $1 billion acquisition by The Simply Good Foods Co. last year. Prior to Quest, he held CEO positions at Popchips and Premier Nutrition Corp. and also served as VP and general manager of Red Bull North America from 2007 to 2009.

Ritterbush said his goal for Califia is to continue growing the core business — which includes both plant-based milks and coffee products — while also continuing to introduce “thoughtful innovation.” Earlier this year the brand introduced a line of plant butters, and Ritterbush said it will continue to look beyond beverage as the platform expands.

Greg Steltenpohl served as CEO of Califia since its founding in 2010. Though he plans to have a hands on role with the brand and with Ritterbush (his successors’ track record of working closely with founders played a significant role in the hiring decision), he believes leaving the company in new, younger hands will help Califia to continue scaling as a national and international brand.

Moving into the Executive Director role, Steltenpohl said he will continue to develop product ideas and strategies for Califia, but his first goal is to better get to know Ritterbush and help bring him up to speed on the company’s operations.

Hint Closes $25M Round

Flavored water maker Hint, Inc. announced in August that it raised $25 million in a series D funding round that will help support the company’s continued growth over the next several years.

The round was led by prior investor Springboard Growth Capital (SGC), a firm focused on funding mid-stage CPG companies founded by women, and also includes investments from Philippe Laffont, Gingerbread Capital and Medina Heights Capital Partners. The round brings the company’s total financing to over $50 million and follows a $17.5 million raise last year.

“With Hint, we’ve found a brand that has successfully challenged the status quo to create a dynamic beverage category for the increasingly health conscious consumer,” said Amy Wildstein, Co-Founder and Managing Partner of Springboard Growth Capital, in a press release. “Hint’s strong platform of both online and retail distribution has proven to be a tremendous asset – especially in the current environment – and my partners and I are pleased to continue to support the brand, [CEO Kara Goldin], and her team through Hint’s next phase of growth.”

The financing also comes as Hint experiences high double digit sales growth, with the brand up 80% for the 52-week period ending July 12, according to market research firm SPINS. In a call, Hint CEO Kara Goldin noted that the company is profitable and that the round was not directly intended for any specific initiatives but will rather support the brand’s long term growth strategy.

The raise comes amid the COVID-19 pandemic, which required Hint to refocus growth efforts into the online channel. According to Goldin, roughly 15% of the brand’s business had been food service and office sales — channels that largely shut down in March. That month, she said Hint worked quickly to redirect its budget towards expanding its direct-to-consumer business, which now accounts for roughly 60% of sales.

In addition to DTC, Hint also worked directly with retail partners at the height of consumer panic buying to streamline merchandising and stocking on shelf. Goldin also wrote a personalized public letter sent to consumers via the brand’s mailing list, which she credited as securing a bond between the brand and its customers in the midst of a crisis.

Lemon Perfect Closes Convertible Note, Capping $11.6M Seed Round

Fast-growing beverage maker Lemon Perfect announced the closing of a $6.6 million funding round that brings its total seed financing from pre-revenue stage to $11.6 million.

The round was led by CPG-focused private equity firms Skyview Capital, Beechwood Capital and The Big Squeeze. They were joined by Goat Rodeo Capital, LivWell Ventures, Melitas Ventures, R3 Venture Products, the RCV Frontline Fund and the Stage 1 fund.

The $6.6 million in funding, closed in June, is the brand’s third convertible note round; the first closed in Q2 2018, followed by a second one year later. All three rounds are being considered as a “stack” valued at $11.6 million, representing the brand’s total seed round financing from pre-revenue to present day. The company’s valuation has accelerated over the past two years, said Yanni Hufnagel, a former men’s college basketball coach who launched the brand in 2018.

The California-based company has quickly found an audience at retail, as its line of organic, cold-pressed lemon-infused waters have gained placement in 3,000 stores primarily in the Northeast, Southeast and Southern California. Lemon Perfect’s diverse roster of investors now spans to over 100 shareholders, with checks ranging from $500,000 to over $1 million, according to Hufnagel. Those include former Bai COO Barak Bar-Cohen and Prakash Janakiraman and co-founder of the app Nextdoor.

Yet the brand has also connected with celebrities and athletes in particular. Nine current or former NBA players — Blake Griffin, Channing Frye and Josh Hart among them — are investors, as are ESPN basketball analyst Jordan Schultz, Missouri Tigers men’s basketball head coach Cuonzo Martin and Cleveland Cavaliers assistant coach Lindsay Gottlieb, and Mike Levine, co-head of sports agency CAA Sports. With a foundation in place upon which to build, Hufnagel said the brand is ready to “flip the switch” on driving awareness through its high-profile partners.

The new funding will go towards further supporting Lemon Perfect’s ultimate goal of establishing a nationwide DSD network, a process that has accelerated since the brand switched from refrigerated to shelf-stable products in January. The company has established a foothold in New York through Big Geyser, and in July added both Classic Beverage and John Lenore & Co. to service accounts in Southern California. Looking ahead to 2021, Hufnagel said Lemon Perfect is prioritizing securing DSD distribution “from Maine to Virginia” and on the West Coast, as well as partnering with strategic national retailers in other regions.

Health-Ade’s New Function-Forward ‘Plus’ Line Launching at Whole Foods

Health-Ade Kombucha debuted its second new product line this year with the August launch of Health-Ade Plus, a seven-SKU line featuring functional ingredients aimed at specific needs and use occasions.

Health-Ade Plus is rolling out in 16 oz. glass bottles in seven flavors: Hydrate (Mint, Cucumber, Lemon, Potassium); Beauty (Strawberry, Rose, Biotin, Silica); Energy (Lemon, Basil, Gurana); Chill (Lavender, Vanilla, Passion Flower); Happy (Orange, Vanilla, L-Theanine); Belly Reset (Ginger, Pineapple, Extra Probiotics); and Immunity (Ginger, Turmeric, Black Pepper).

The suggested retail price for each is $4.29, and the line will be offered exclusively at Whole Foods Market through the end of this year before expanding nationally in 2021.

With Health-Ade Plus, the Los Angeles-based company is taking another step in its evolution from premium kombucha maker to a broader better-for-you beverage platform that encompasses a range of bubbly drinks, explained CEO and co-founder Daina Trout. But unlike the company’s most recent innovation Health-Ade Booch Pop — a three-SKU line of prebiotic sodas released in June, which is targeting new consumers — Health-Ade Plus has been crafted to give dedicated kombucha drinkers more options on the shelf.

In discussions with Whole Foods, as well as from interacting with customers and friends, Trout said the company found that regular kombucha consumers and health-minded shoppers were seeking more functionality and daily benefits in their kombucha. From there, the brand honed in on seven flavors each tied to different benefits and ingredients, but also to specific daily use occasions. Though Health-Ade Plus had been in development since before the U.S. outbreak of the COVID-19 pandemic, Trout said that consumer interest in immunity and gut health products helped spur the company to move up the schedule.

The launch of Health-Ade Plus marks another expansion for the brand’s product family, which now includes 14 flavors in its core line (in multiple package sizes) and three varieties of Health-Ade Booch Pop. Trout reiterated the company will continue to support its flagship kombuchas, while communicating the uniqueness of Health-Ade Plus through messaging and package labeling in order to prevent cannibalization. For Booch Pop, designed as a better-for-you soda alternative, reaching the right consumer is more important, at least initially, than delivering high revenue, she noted.

Polar Seals Nationwide Seltzer Distribution Pact With KDP

Massachusetts-based Polar Beverages has secured a long-term manufacturing and distribution agreement with Keurig Dr Pepper (KDP) for its 35-SKU line of seltzer products, the companies announced in July. Terms of the deal were not disclosed.

Polar’s Seltzers, as well as its Seltzer’ade and Seltzer Jr. products, will be integrated into the majority of KDP’s direct-store-delivery (DSD) distribution network, according to a release. Polar, which has manufactured and distributed KDP beverages for decades in the Northeast, will continue to manufacture and sell its seltzer products in existing territories, as will some select distribution partners. The company will “continue to drive marketing, brand and innovation leadership.”

“We are very proud of Polar Seltzer’s 138-year heritage and independent spirit,” said Polar president and CEO Ralph D. Crowley Jr. “Our expanded partnership with KDP opens a dynamic new chapter, and we look forward to sharing our family of seltzers with their unrivaled sales and distribution network.”

The partnership is set to widely expand availability for Polar’s seltzer products, which currently has a nationwide presence under 35%. The brand, a family owned and operated company based in Worcester, Mass. since 1882, markets both flavored and unflavored seltzer varieties in a variety of formats, as well as other soft drinks and refreshment beverages. Through June 30, the company has seen seltzer MULO sales (including c-stores) increase 14.8% year-over-year, according to data from IRI.

While KDP has been actively reshaping its bottled water portfolio over recent years, the company’s presence in the booming sparkling water category remains limited to products under the Canada Dry and Schweppes banners. Earlier this year, it acquired Chicago-based Limitless, maker of a caffeinated sparkling water line, for an undisclosed fee.

The Polar deal puts KDP in position to compete more aggressively with Coca-Cola (AHA) and PepsiCo (Bubly) for space in a thriving beverage segment.

“Polar Seltzer is an iconic and leading brand in the Northeast, and we are eager to expand that growth across the country,” said Derek Hopkins, KDP Chief Commercial Officer. “The sparkling water category shows no sign of slowing down and our already strong partnership with Polar Beverages will accelerate our ability to ensure that Polar Seltzer is available wherever consumers shop.”

“You’re seeing explosive growth [from Polar] and we, as I said before, could have come at this just by an acquisition, we could have come at it by trying to develop our own brand and we thought this was the best way to go,” said KDP CEO Bob Gamgort during the Q&A portion of the company’s Q2 earnings call. “This is the highest velocity brand in the category. They have one challenge, and that is they’re only in about a third of the country.”