L.A. Libations is officially in the cold brew game.
The Santa Monica, Calif.-based beverage incubator announced last week a strategic partnership with coffee maker KonaRed to give the brand the weight in the market it needs to grow in an increasingly-crowded category.
The partnership will allow KonaRed to “acquire the strategic guidance and operational resources of the entire L.A. Libations team, including the company’s connections with key retailers and distributors nationwide,” according to a press release.
Based in Hawaii, KonaRed markets a line of ready-to-drink (RTD) cold brew coffees and an RTD coffeefruit juice, as well as whole bean coffee. The company has grown by more than 300 percent year-over-year in the grocery channel according to SPINS data. The company recently announced a new 32 oz. multi-serve size for its cold brew offerings.
Speaking to BevNET, L.A. Libations CEO Danny Stepper said his company was impressed by the KonaRed’s quality product and branding, which he believed rose above the clutter and noise of the rapidly growing category with good flavor, a differentiated coffee source via its use of Kona beans, and a strong team running the business. According to Stepper, he was introduced to the KonaRed team by Venice Brands CEO Greg Willsey, which recently entered into a strategic capital raise with the brand.
“We saw everything and this just stood out to us as the one we wanted to bet on,” Stepper said. “We think the Kona story truly gives it differentiation, the authenticity of Kona is amazing, and I think the innovation pipeline these guys have been working on, that we’re going to start working on with them, is really compelling.”
KonaRed marks L.A. Libations’ first entry into cold brew coffee (not including cold brew coffee shot brand FORTO). The partnership also represents The Coca-Cola Company, which has invested in L.A. Libations via its Venturing & Emerging Brands Group (VEB), taking a larger interest in the cold brew category. The company has coffee partnerships to distribute Dunkin’ Donuts and McDonald’s RTD iced coffee lines, but has yet to directly produce or distribute a cold brew brand.
KonaRed is currently available nationwide in retailers including Kroger’s, Safeway, Whole Foods, Target, 7-Eleven, and Albertson’s, but Stepper said that L.A. Libations will help put KonaRed at the forefront of conversations with buyers.
“Danny’s team are professionals,” KonaRed CEO Kyle Redfield told BevNET. “They can really cut to the chase when you’re talking about distribution; where you need to be, who you need to be in front of, what paperwork needs to be done. That has really fast-forwarded a lot of the gaps that we had.”
KonaRed has also, as part of its deal with Venice Brands, added veteran marketer Michael Hartman to its board of directors. Hartman has previously held executive marketing roles at PepsiCo and Chuck E. Cheese parent company CEC Entertainment and has sat on the boards of brands including Zevia and GT Beverage Company (now True Drinks).
“We’re thrilled to have Michael as a part of our board,” Redfield said. “The main gap that we needed to fill was in marketing and we needed brand management type marketing to put that professional spin, authenticity, and look on everything we do.”
Redfield added that Hartman has “already been working wonders” for the brand, aiding in guiding the company on everything from social media to sales sheets.
“We think a lot of [other cold brews] will go away by attrition, as happens in many segments and categories, and there will be a few players left standing,” Stepper said. “It’s heavily dependent on the product, the brand, the team, and the capital. And this checks all those boxes. We haven’t seen another cold brew coffee — and we’ve seen them all — that does that.”