Breakthru Beverage continues to solidify its position in the CBD beverage market with today’s announcement of its partnership with Sprig and Cloud Water.
As reported in a recent edition of Distribution Roundup, wine and spirits distributors, including Southern Glazer’s and Republic National, have been aggressively adding CBD brands to their respective portfolios in recent months. Last month, Breakthru Beverage Group, one of the leading beverage alcohol houses in North America, announced its intention to get involved with the creation of a “CBD and Relaxation” beverages category in its portfolio. The first deal saw the distributor partner with Recess to bring the brands’ CBD and non-CBD products to stores across eight markets initially, before eventually expanding to 14.
“We are committed to building a strong and diverse portfolio that includes innovative expansion opportunities like CBD beverages to meet evolving consumer demands,” said Drew Levinson, Breakthru Beverage Group Vice President, Business Development, Emerging Brands. “By building out our CBD beverage portfolio with Sprig and Cloud Water, we broaden our offering, expand our expertise, and ensure we are at the forefront of innovation for our customers. We have made significant investments to support associate education and learnings in the category, so we feel ready and able to be a leader in this emerging segment.”
Though both fall under the general umbrella of CBD-enhanced functional beverages, Sprig and Cloud Water each have a unique positioning and audience.
Founded in 2015, Sprig was an early player in the space, offering sparkling THC-infused drinks at licensed cannabis dispensaries and CBD sodas at retail, primarily through partnerships with independent Anheuser-Busch and Pepsi wholesalers. The drinks contain 20mg of CBD per 12 oz. can and come in four flavors: Citrus, Citrus Zero Sugar, Melon and Lemon Tea, of which the latter two are also sugar-free.
“As the most widely-distributed CBD drink in the U.S., we have had strong market reach, and see the partnership with Breakthru as a continued expansion opportunity with a team that is passionate about our brand,” said Sprig VP of Sales Josh Rosinsky in a release. “We were drawn to Breakthru’s reputation as brand builders, and they have shown excellent command of emerging categories. We felt they were the clear choice to support our goals for reaching a wider consumer audience.”
Emerging amidst CBD’s ascendence in popularity during the late 2010s, Cloud Water has a slightly more dynamic positioning: The brand offers both an enhanced sparkling water (25mg hemp extract per 12 oz. aluminum screw-top bottle) and a three-SKU, CBD-free, immunity focused line in 12 oz. cans called Cloud Water+ (similar to the name of smartwater’s recently launched functional sub-line which arrived four months after Cloud Water’s extension). The two-pronged strategy has enabled it to partner with powerhouse DSDs in CBD-friendly markets — Big Geyser in New York City, Hi Touch in Los Angeles — while working its immunity products into large chain retailers that are still waiting for federal guidance on CBD’s use as an ingredient. The brand secured a $2.1 million seed round earlier this year, which saw former Glaceau board member Bruce Nierenberg, founder of B.I.N. Sales and Marketing, reunited with another ex-Vitaminwater leader: Dr. Carol Dollard, Cloud Water’s COO.
“We sought a partner with the right footprint to bring our CBD beverages to the markets in a smart, strategic way,” said Marc Siden, Cloud Water’s Co-Founder and Chief Executive Officer. “Partnering with Breakthru and leveraging the insights they have gained through their Canadian cannabis brokerage, Kindred, positions us well to continue our journey and expand our reach.”
Breakthru will distribute both Sprig and Cloud Water (as well as Cloud Water+) in Arizona, Colorado, Florida, Illinois, Virginia and Connecticut through its Connecticut Distributors, Inc. affiliate.