Money Talks: The Top Five Beverage Deals of 2017

Here’s a safe bet for 2018: from coffee to kombucha and beyond, next year will see beverage companies attracting more and more attention from private equity groups and strategic investors seeking to find the next big winner in drinks. As 2017 comes to a close, let’s recap the top five investments and acquisitions in the beverage market over the past year.

REVIVE: $7.5M (Peet’s Coffee) / HUMM: $8M (VMG Partners)

This year didn’t see anything in the kombucha category to quite match PepsiCo’s $200 million acquisition of KeVita in late 2016, but this pair of investments in rising independent brands indicated that the category still has plenty of room to continue growing in the months and years ahead.

For Revive, the $7.5 million investment from Peet’s Coffee in April offered the California-based company an opportunity to scale its staff and expand operations with a strategic partner that is aligned with its own culture and values. But over time the most intriguing aspect of the deal may be Revive’s integration into Coldcraft, Peet’s company-owned cold-chain direct store delivery (DSD) network, which will expand the kombucha maker’s presence to over 1,600 food service, grocery and Peet’s retail locations in California. Read the full recap here.

Elsewhere, in June, Humm Kombucha became only the second beverage brand, after sparkling water company Spindrift, to secure investment from natural product-focused private equity firm VMG Partners. The impact of that deal is already being felt: in November, Humm announced plans to open a $10 million East Coast production facility in Roanoke, Va. by 2019. For the full details, click here.

CELSIUS: $15 million (Horizon Ventures)

In just a few short years, zero-calorie fitness drink Celsius has gone from struggling brand to high performer, a turnaround that earned further confirmation with a $15 million investment from Horizon Ventures in March. The company’s long-term focus on building a presence in international markets, particularly Asia, reaped rewards this year as Horizon, a private investment arm of Chinese billionaire Li Ka-Shing and an investor in Celsius since 2015, redoubled its support for the brand.

With Gloria Tang Tsz-kei, a popular Chinese singer-songwriter known as G.E.M, and zVentures, the strategic investment arm of Razer, a leading lifestyle brand for gamers, also joining this round of financing, Celsius added significant cultural cache to go along with the new funding. With Razer in particular, Celsius interim President and CEO John Fieldly noted an “opportunity to target the gaming industry, which is a massive community of one billion people worldwide.”

Read the full story here.

HIBALL/ALTA PALLA: Acquired for an Undisclosed Fee (Anheuser-Busch)

Anheuser-Busch’s summer acquisition of Hiball wasn’t its first entry into the non-alcoholic beverage market, but it may be one of its most on-trend moves yet. In adding Hiball — which markets a line of organic energy, coffee and protein drinks, as well as Alta Palla, a line of organic sparkling juices and waters that debuted in 2016 — to its portfolio, the world’s biggest beer company is poised to tap into demand for products made with organic ingredients and also to capitalize on a shift toward low-sugar energy drinks. For Hiball and Alta Palla founder and president Todd Berardi, recently named BevNET’s Person of the Year for 2017, the acquisition positions him to significantly boost the company’s operational expertise and marketing support structure, not to mention access to Anheuser-Busch’s powerful wholesaler distribution network.

Read the full recap here

CHAMELEON COLD-BREW: Acquired for Undisclosed Fee (Nestlé)

Last year, we reported on the growing power struggle between the Coca-Cola Company and PepsiCo for domination of the ready-to-drink (RTD) coffee market. But in 2017, the biggest splash in that segment came from Nestlé with its November acquisition of Austin, Texas-based Chameleon Cold-Brew, maker of a variety of RTD coffees and concentrates. Under the terms of the deal, Chameleon will receive financial support and access to Nestlé’s production and distribution networks, but otherwise, the brand will continue to operate independently. With a current presence in over 10,000 retailers nationwide and a new sparkling cold brew line on the way in 2018, Chameleon is poised to give Nestlé a strengthened position in the RTD coffee market in the months ahead.

Read the full story here.

BLUE BOTTLE COFFEE: $500M for 68 percent stake (Nestlé)

While Nestlé’s acquisition of Chameleon Cold Brew adds a rising RTD coffee brand to its portfolio, the CPG giant’s eye-catching $500 investment in California-based premium coffee roaster and retailer Blue Bottle Coffee represents something quite different. The deal gives Nestlé, already the world’s largest coffee company, a foothold in the rapidly growing premium coffee segment in North America and an opportunity to continue pivoting towards healthier beverage products. It also positions the Swiss-based company to compete with rising global coffee player JAB Holdings, which owns Stumptown, Peet’s Coffee and a majority stake in Intelligentsia, for domination of the category. With 55 cafes in operation in major cities in the U.S. and Japan, as well as direct-to-consumer online sales, Blue Bottle gives Nestlé access to the growing segment of consumers fueling the “third-wave” coffee movement through a focus on high-quality products.

Read the full story here.