High Brew Coffee, which markets a line of low-calorie, ready-to-drink cold brew coffee beverages, today announced the close of a $17 million Series B funding round led by Boulder Investment Group Reprise (BIGR), a growth equity fund that partners with early-stage natural and organic products.
The investment marks the second fundraise for the Austin-based brand in just over a year. In April 2016, the company landed a $4 million investment led by CAVU Venture Partners, which reinvested as part of this round.
Dr Pepper Snapple Group (DPS), which holds a minority stake in High Brew and is the primary distributor of the brand, did not participate in the round.
Founded in 2014, High Brew markets six SKUs packaged in shelf-stable 8 oz. aluminum cans: Dark Chocolate Mocha, Double Espresso, Mexican Vanilla, Salted Caramel, Black & Bold and Creamy Cappuccino + Protein, which includes 12g of protein and 3g of fiber. The brand is currently the best-selling RTD cold brew coffee in the convenience store channel, according to the company, and is distributed nationally at retailers such as Target, Whole Foods, Safeway, Kroger and Sprouts.
The infusion of new capital will be used to continue to “accelerate the brand’s accessibility and penetrating popularity,” according to a press release. Those will include support for improvements in production infrastructure and efficiencies in bringing new products to the market.
“Witnessing the growth of High Brew over the past three years has been an amazing ride,” said founder and CEO David Smith in the press release. “With the closing of our Series B funding, we will be able to reach even more markets to elevate their coffee experience. As you can imagine, we are excited to write the next chapter in the High Brew story.”
The investment represents BIGR’s first foray into the competitive RTD coffee market, having previously invested in drinkable bone broth brand Bonafide Provisions, “super-herb” elixir company REBBL, and Live Beverages, which markets a line of kombucha and drinking vinegar products.
In an interview with BevNET, Duane Primozich, a BIGR co-founder and managing partner, said that High Brew’s experienced management team was the most important factor influencing BIGR’s decision to investment.
“From David Smith to Mari Lee Johnson on the marketing side to Brian Arkus on the sales side and Hunter Todd on the finance side, we’ve got a fantastic operations lead,” said Primozich. He described the the staff at High Brew “among the best management teams out there today for a company” of its size.
“This is the 10th investment over the last two funds we’ve managed and time and time again it has borne out that the key difference between success and failure of a company lies with the management team,” he added.
Along with High Brew’s established foothold within the Dr Pepper Snapple Group Allied Brands portfolio, which includes Core, Vita Coco and Body Armor, Primozich noted that a recognition of cold brew coffee’s significant potential for expansion were also important attractions for BIGR to invest. According to Euromonitor International, sales in the U.S. RTD coffee market increased 14 percent to $2.54 billion last year, the fourth year of double-digit growth.
“I think we are in the very early stages of this,” Primozich said of the cold brew category. “As you look at the total ready-to-drink coffee space right now, cold brew is just a small percentage of that and I think it has a lot of room to grow.”