Expo West 2023 Recap: Exits and Expansions Abound

Despite economic clouds looming ahead, Natural Products Expo West was back in full force this March, as brands, entrepreneurs and industry members brought energy and innovation worthy of the year’s biggest natural trade show.

As the doors opened on day one of Expo West, several brands used the occasion to announce exits, starting with renewable drinking water technology company SOURCE Global’s acquisition of sustainable packaged water brand Proud Source.

Speaking at Proud Source Water’s booth in Expo’s North Hall, Neil Grimmer, Global CPG President for SOURCE Global, described the acquisition as a natural decision as the two companies aligned on multiple points: Both businesses are certified B Corps, both emphasize sustainability and access to water as key values, and – yes – they both have “Source” in their names.

“You’ll walk around the show, and you’ll see brands with a cool graphic design on the pack and edgy marketing campaigns; Proud Source is different,” Grimmer told BevNET.

SOURCE Global is the manufacturer of the SOURCE Hydropanel, a renewable technology that sources water from vapors in the air and converts it into drinking water. To date, the company has placed its panels around the world to help provide easier access to water to dry and impoverished regions, as well as selling its own line of bottled waters under the SOURCE name.

Based in Idaho, Proud Source Water produces a line of aluminum-packaged bottled waters in bottles and cans. Its water comes from naturally alkaline springs in Mackay, Idaho and Marianna, Florida, and SOURCE Global has acquired the company’s two manufacturing facilities at those sites as part of the deal. The brand is distributed nationwide, including a partnership with PepsiCo Beverages North America it entered in 2021.

Also at the show, Arkansas-based GEN Z Water announced its acquisition by family owned beverage company Langers Juice for an undisclosed amount.

One of several non-PET packaged water startups to emerge in the wake of Liquid Death’s rise, GEN Z has made its tongue-in-cheek approach to marketing “flavorless transparent liquid” its calling card. The company launched online in August 2021 with in reusable 20 oz. aluminum bottles (available individually and in 12-packs), and has since entered brick-and-mortar retailers in the Midwest, as well as moving into Target.

For California-based Langers, adding GEN Z gives the beverage maker a stake outside of fruit-based categories, as represented by its Langer Farms juices and No Worries cocktail mixer brands. The company markets an organic flavored sparkling water and a caffeinated sports drink called LyteAde.

Catching up with BevNET at the show, GEN Z co-founder Doug Batie said he was “not shocked” that his company achieved such an early exit, as the company’s trajectory since launch has put it on track to “skip” scaling and go right to a sale. A former executive at Welch’s, Batie noted his familiarity and connections with Langers helped create the relationship, and that the pitch wasn’t difficult once Langer understood how the brand is positioned around “aspirational” marketing rather than emphasis on the liquid itself.

As for the product itself, Batie said GEN Z will continue to utilize its network of co-packers as it transitions fully into its new parent company. The Arkansas-based brand will also maintain its geographic focus on growing accounts in the Midwest, where it is carried at chains like Target and OnCue.

Elsewhere, Asian-inspired seltzer Sanzo’s brand new SKU, Pomelo, along with a revamped packaging design, were the main highlights at its booth. But the introduction of 6-count and 12-count multipacks – the format which drives over 90% of flavored sparkling water sales, according to Sanzo – may represent an even more significant step.

According to founder and CEO Sando Roco, the new 6-packs are entering a “high percentage of our existing retail partners” in March at $9.99, but the format is also opening new doors.

“We are excited that over 1,000 new doors have already been signed on in key regions such as the Northeast, California and the Pacific Northwest, and we expect to onboard more strategic partners in key regions coming out of Expo West and heading into peak season,” Roco said.

Sanzo’s launch of the Multipack reflects a deeper purpose. Sanzo’s mission from launch has been centered on bridging Eastern and Western cultures, as it “reflects a trust that the product will be loved and shared with family and friends.”

Amidst much discussion of topics like functional ingredients and sustainable agriculture on the trade show floor, there was a noticeable lack of concern amongst brands we spoke with regarding erythritol.

To recap, a study published in February in the scientific journal Nature Medicine reported that erythritol appeared to be causing blood platelets to clot more easily in patients. Research also indicated that people with existing risk factors for heart disease were twice as likely to experience a heart attack or stroke if they had higher levels of erythritol in their blood compared to lower levels.

That bit may have made a good headline, but the beverage entrepreneurs we spoke with at the show who are actively working with the sweetener didn’t view the study as a make-or-break moment for erythritol.

One natural energy drink brand leader noted that the ingredient has been recognized as GRAS by the FDA for several decades, while also questioning the dosages administered to subjects in the study. Another noted that, across the range of sugar alternatives currently available, erythritol has established itself as superior to others, despite what this new study may suggest.

Most notably, none of the people we spoke to who actively use erythritol had any plans to stop doing so – at least for
the moment.