Bevscape: The Latest Beverage Brand News

Michelle Obama Joins PLEZi as Co-Founder, Strategic Advisor

Michelle Obama, the former first lady, announced in early May that she is joining fledgling kids drink brand PLEZi as a co-founder and strategic partner as part of her ongoing efforts to fight childhood obesity.

Obama cited a long record of work on children’s health and nutrition, including her Let’s Move! initiative and a record of working with food companies and restaurant chains to lower calories and remove salt, sugar, and trans-fats from products, as well as famously establishing a garden plot on the South Lawn of the White House. The next step, she said, was for her to get involved in the food and beverage industry as an owner and stakeholder.

“I’ve learned that on this issue, if you want to change the game, you can’t just work from the outside. You’ve got to get inside—you’ve got to find ways to change the food and beverage industry itself,” said Obama, speaking at The Wall Street Journal Future of Everything Festival. “I’m proud to announce the national launch of a company designed not just to provide better products, but to jumpstart a race to the top that will transform the entire food industry.”

The theory will initially be tested by her work with PLEZi, a four-SKU line of beverages that is currently sold at Sprouts and Target stores. Sweetened with stevia and monk fruit, PLEZi is formulated to have 75% less sugar than average leading 100% fruit juices, and is fortified with fiber and other nutrients.

In a piece of distribution news, Obama announced that the brand was planning to debut in Walmart over the summer, and that it had recently been added to the company’s online store.

“I want other companies to know that PLEZi is coming,” she said, adding that an important part of the idea behind the company was to make healthier options available outside of the just high-end stores.

Obama’s announcement also referenced the long-term plans for the brand as a healthy eating and drinking platform that could encompass both snacks and other drink products. PLEZi has promised 10% of its profits to a broader movement to promote kids’ health, while Obama herself announced a donation of $1 million to FoodCorps Nourishing Futures Initiative.

A public benefit corporation, PLEZi is currently led by CEO Leah Dunmore, who was hired recently after a career in which she had worked on wellness-focused brands at companies like Hain Celestial, Kraft, and Mars. The brand was largely shepherded through the product development, sales, and marketing process by L.A. Libations and also received financial backing investment group Juggernaut Capital. The two companies first worked together developing ZOA for Dwayne “The Rock” Johnson.

As part of the launch, Obama noted that she was bringing together a “kitchen cabinet” of public health and nutrition policy advisors. That team will be led by Debra Eschmeyer, the former Executive Director of the Let’s Move! Initiative and a senior advisor to President Barack Obama for nutrition policy. Sam Kass, the former White House chef and another Obama advisor, was also announced as the PLEZi board chair.

“I still believe that businesses can move faster when it comes to our kids’ nutrition,” Obama said. “Because I believe there is a way to build a successful company and do right by our kids… that we can make products that are tasty and healthy and good for the bottom line. And I’m putting some skin in the game to put this theory to the test.”

In addition to her work on nutrition issues from the White House, Michelle Obama has at least a passing familiarity with the food business – and one of PLEZi’s likely retail partners. From 2005-2007, while her husband was still a U.S. Senator in Illinois, she served as a corporate director on the board of TreeHouse Foods, which makes private label food and drinks for a wide range of retailers, including Walmart.

Constellation Brands Bolsters Non-Alc Portfolio with Minority Stake in TÖST

Constellation Brands has acquired a minority stake in TÖST, an alcohol-free sparkling beverage brand.

Founded in 2017, TÖST produces beverages made from an all-natural blend of white tea, white cranberry and ginger.The champagne alternative is a “never alcohol” product, meaning there is no alcoholic fermentation at any point in the production process.

“Our investment in TÖST allows us to continue to optimize our higher-end portfolio by providing an alcohol-free beverage with a complex flavor profile for consumers that complements their lifestyle across a variety of occasions,” said Mallika Monteiro, executive vice president and chief growth, strategy, and digital officer at Constellation Brands.

The investment, made through Constellation’s venture capital group, gives the company another position in the fast-growing non-alc segment. It also comes at the heels of another non-alc addition to Consellation’s portfolio, Corona Non-Alcoholic, which launched last week. In 2021 the company acquired a minority stake in HOP WTR, a non-alcoholic, calorie-free sparkling water infused with adaptogens and nootropics.

Constellation Brands’ beer business topped $7.456 billion in net sales, an +11% year-over-year increase (YoY), during its 2023 fiscal year, which ended February 28, the company reported during its full-year and fourth-quarter earnings report. However, net sales of Constellation’s wine and spirits sales declined -4%, to more than $1.987 billion.

In a statement, Constellation Brands highlighted that 82% of non-alcoholic drink buyers are also still purchasing drinks that contain alcohol, according to data from Nielsen IQ, “meaning TÖST extends the options and opportunity for participation on traditional beer, wine, and spirits occasions, making it a strong complement to Constellation’s current portfolio.”

Between August 2021 and August 2022, total dollar sales of non-alcoholic drinks in the U.S. stood at $395 million, showing a YoY growth of +20.6%, according to Nielsen IQ.

TÖST is currently sold online and in more than 40 states. In September 2022, TÖST CEO Brooks Addington said the brand found traction by being positioned as an affordable luxury for sophisticated drinking occasions and as a gift. The company offers two bottle sizes: 750 ml and 250 ml, and is working on a canned format.

Two years after entering the market, the product was distributed across over 1,300 different accounts domestically with 18 distributors in 24 states. In October of 2021, after revenue reached over $1 million during the prior ten months, the company raised $360,000 of equity crowdfunding in the form of SAFE notes via Republic.

“We are excited and humbled to have Constellation Brands as a partner in our mission to bring TÖST beverages to even more consumers,” said Addington. “We believe our mutual consumer-centric focus and desire to deliver premium product experiences positions TÖST for exponential growth in the coming years.”

Ready to Scale, G.O.A.T. Fuel Closes $5M Seed Round

G.O.A.T. Fuel, the mushroom-enhanced energy drink brand backed by three-time Super Bowl champion Jerry Rice, closed a $5 million seed funding round in May co-led by venture firms Stage 1 Fund and Morrison Seger Venture Capital Partners.

Founded in 2020 by CEO Jaqui Rice Gold, Rice’s daughter, and her husband and chief brand officer Trevion Gold, G.O.A.T. Fuel produces a line of 12 oz. canned, zero sugar energy drinks made with cordyceps mushrooms, electrolytes, BCAAs and 200 mg of natural caffeine. The brand offers eight flavors and is sold in over 10,000 retail accounts nationwide, including about 600 Walmart and 700 Publix stores.

According to Gold, she and her husband came up with the idea for a healthier energy drink made with adaptogenic mushrooms in 2019, when both the performance energy category and functional mushrooms were gaining traction in the market.

“My background is not in beverage, I essentially was the consumer who was newly starting to drink energy drinks at the gym,” Gold told BevNET. “These better-for-you drinks were interesting to me and my husband, but some of the ingredients didn’t make us feel that great … we felt that there was an opportunity to really create a new formulation that was innovative, and that utilized an ingredient that we hadn’t seen in the marketplace before.”

Gold quickly involved her father, a former San Francisco 49ers wide receiver and 1988 Super Bowl MVP, whom she described as a “health nut.”

In addition to his own support – Gold said her father is “150% involved” in the business operations and regularly fields sales calls among other duties – Rice was able to tap into his broad network of sports personalities to help Gold raise over $7 million in funding from individual angel investors, including former 49ers owner Eddie DeBartolo Jr. and Minnesota Timberwolves owner Marc Lore.

With the new round of funding, Gold said the brand is preparing to scale the business nationwide. Since launching DTC in 2020, G.O.A.T. Fuel has gone from under $1 million in annual sales to eight figures in revenue, Gold said, and the company projects revenue to triple year-over-year.

The company now has 20 full time employees and Gold said the financing will go towards expanding the sales team and to bring in seasoned operations executives to help grow the business.

“We’ve been nimble up until this point, and we’re really looking forward to seeing the company grow and expand,” she said.

Currently, G.O.A.T. Fuel is serviced through a network of DSD distributors and has recently added new accounts such as H-E-B in Texas. The brand is also in accounts like Safeway and Lucky’s in California.

Although G.O.A.T. Fuel had already raised significant funding through angels, she said the addition of institutional investors will help open more doors for the brand as it looks to break into new markets.

“It’s essentially for us a catalyst for that [growth] process and it was the time to do it with the traction we have and the run rate that we’re getting as we continue to scale,” she said. “We didn’t want to embark on this journey prematurely. We wanted to make sure even from a valuation standpoint that we all felt comfortable with the starting point.”

Looking ahead, however, Gold acknowledged there’s more competition in the energy set today than when she conceived the business in 2019, when Bang was the leading brand in the performance subset. Since then, better-for-you brands like Celsius, C4, and Ghost have experienced significant growth by partnering with strategics.

However, Gold said the brand’s use of adaptogenic mushrooms has been a strong differentiator for the brand. When G.O.A.T. Fuel launched online only in 2020, she said 49% of the brand’s consumers – primarily Gen Z and millennials – were aware of cordyceps and the benefits of mushrooms. Much like performance energy, mushrooms as both a standalone food and an ingredient have grown their mainstream popularity over the past four years; Grand View Research reported in March that the global adaptogenic mushroom market is expected to reach $26.6 billion at a CAGR of 10.8% between 2023 and 2030.

As well, G.O.A.T. Fuel’s connection to the sports world has also been valuable. Beyond Rice’s involvement, the brand is also now the official energy drink of the Los Angeles Lakers and Gold said the focus on sports – down to the brand name – will continue to be a key part of maintaining its momentum.

“Early on, we were the first to include the adaptogen mushrooms in an RTD energy drink,” she said. “I think by getting a head start in that space, we definitely have an advantage.”

Cure Hydration Brings in $5.6M Series A Round, Expands to 15,000 Doors

In April, Cure Hydration raised $5.6 million in a Series A funding round led by Lerer Hippeau. The new capital arrives as the New York-based functional drink mix brand has expanded its retail presence to over 15,000 doors nationwide.

Launched in 2019, Cure produces a line of better-for-you hydration mixes made with ingredients including coconut water and pink Himalayan salt. According to the company, Cure has grown an average of 230% annually since its launch and its retail expansion marks a rapid rise in footprint. Last year the brand reported it was entering over 6,500 new doors, and speaking to BevNET at Natural Products Expo West 2023 last month, founder and CEO Lauren Picasso put Cure’s door count around 13,000.

Lerer Hippeau, an early stage venture capital firm and existing stakeholder in Cure, led the round and was joined by a mix of new and existing investors including Valedor Partners, Simple Food Ventures, Great Oaks Venture Capital, Joyance Partners, Silas Capital and Kim Clijsters among others. Cure previously closed a $2.6 million funding round in 2020.

“We continue to invest in Cure because the team has proved that they can scale beyond direct-to-consumer to become an omnichannel brand with a national footprint,” said Caitlin Strandberg, partner at Lerer Hippeau, in a press release. “We are excited to see Cure’s continued retail distribution and disruption of the hydration category.”

The company said it will put the capital towards supporting its retail growth, product innovation, brand awareness and team expansion. Picasso said Cure is aiming to carve out market share in the functional drink mix market and has seen triple-digit growth in the natural channel over the last 12-weeks, up around 316% according to SPINS.

The brand’s expanded retail presence includes rollouts into Sprouts, Kroger, Albertsons, Stop & Shop, Wegmans and H-E-B. “This year, we will also be launching conventional Grocery with the launch of Kroger and Albertsons where we will be testing double placement both in mainline sets as well as checklane.”

“We will support this growth through demos and sampling programs since we’ve found this to be the most successful conversion tactic for Cure,” Picasso wrote.

In retail, Cure has sought to merchandise its products in the sports nutrition set. At Expo West, Picasso noted that many of the brands in the sports nutrition space today have a “medicinal” or “clinical” positioning, or feel intended for hardcore athletes, whereas Cure aims to be an inviting everyday product. Via email, she also pointed to recent disruption in the sports drink category that has seen some consumers move away from legacy brands like Gatorade and Powerade while embracing innovative new products.

“Sports Nutrition sets are supporting brands in the functional drink mix category and we prefer placement on shelf with functional foods and beverages, where shoppers have been trained to find our kind of product,” she wrote. “We drive conversion by offering our products at the single stick level and supporting stores with demos and sampling programs.”

Cure currently has 10 full time employees, recently bringing on a new CMO, former SmartyPants Vitamins senior director of marketing Laura Kendrick, and a VP of innovation, Stacey Gillespie, who held similar positions at Ora Organic, Rritual Superfood and Gaia Herbs. Picasso said the company is not immediately hiring additional roles but will seek to expand its team further next year.

Last year, the company rebranded its portfolio with new packaging that better visualizes its fruit flavors. Following the rebrand, Cure reformulated its Lemon flavor, relaunching the SKU as Lemonade. Most recently, the brand introduced a Strawberry Kiwi variety.

Beyond new flavors, Picasso said that the brand is currently developing innovations in additional product categories to launch in the next 12 months.

Chamberlain Coffee Enters RTDs With Walmart Exclusive Launch

Chamberlain Coffee made its much anticipated ready-to-drink debut in late April, partnering exclusively with Walmart to release its four-SKU line of canned plant-based lattes and further extend the influencer-driven coffee brand’s reach.

The launch had originally been scheduled for early May, but Chamberlain Coffee CEO Christopher Gallant explained in an email that the date was moved up to hit store shelves, Walmart.com and the retailer’s app simultaneously. The dairy-free line includes four flavors — Mocha Latte, Cinnamon Bun Latte, Vanilla Latte and Cold Brew Latte — in 12 ounce slim cans, each of which are sweetened with date syrup and made with almond milk and coconut cream. All SKUs contain 70 mg caffeine, 110-120 calories and 1 gram of sugar per can. The listed unit price on Walmart.com is $2.98.

In a press release, Chamberlain Coffee founder and YouTube star Emma Chamberlain called the RTD collection, inspired by her daily cold brew recipe, “a product I have been dreaming of making since we started the brand.”

“We’re inspired by all of the ways you can enjoy coffee, and are eager to continue exploring innovative coffee products,” she said.

Founded by Emma Chamberlain in 2019, Chamberlain Coffee started off as a D2C brand that marketed a range of organic blends in whole bean, ground, pods and steeped varieties. Since then, the business has grown into categories such as matcha, hot chocolate and chocolate covered espresso beans and into flavored blends (Witty Fox Hazelnut and Fluffy Lamb Vanilla) while expanding beyond D2C into limited retail with partners including Sprouts, Bristol Farms and Erewhon, Pop Up Grocer and digital delivery market Gopuff. Last August, the brand announced it had closed a $7 million funding round led by venture builder Blazar Capital and Chamberlain herself.

The brand had previously flirted with RTDs through a collaboration with low-calorie lemonade maker Swoon last year.

Describing the Walmart launch as a “big moment for the brand,” Gallant said Chamberlain was well prepared to adapt quickly to the new launch date across the organization. The brand’s founder and namesake has taken a leading role in building awareness around the RTD release on her social channels, on her podcast and in one-on-one media interviews, while also shooting a commercial and conducting photoshoots.

The entrepreneur was a “big part” of the brand’s RTD-specific activation at this year’s Coachella Valley Music and Arts Festival earlier this month, he said.

Within the current RTD coffee set, Chamberlain Coffee’s products are positioned to offer popular indulgent flavors with less sugar and no dairy. The line will face competition from the likes of La Colombe, Pop & Bottle (another brand with close ties to Walmart) and Dunkin’, which launched a three-SKU line of iced coffees in 11 ounce cans in February.