Rise Aims to Fuel Market Momentum With New Flavor, Funding

Believe it or not, there was a time in the not-too-distant past when pairing coffee and oat milk was considered a relatively bold concept.

That era has definitely closed: along with rising to become the second-largest plant-based dairy alternative category (behind almond) in 2020, oat milk’s grip on coffee has extended to the ready-to-drink space, which has seen a wave of new entrants in both single and multi-serve formats from major brands (including Chobani earlier this week) to rising independents like Minor Figures and Pop & Bottle.

As one of the RTD cold brew and oat milk pioneers, the success of Rise Brewing Co., which launched its three-SKU line of oat milk lattes in 7 oz. cans in 2018, has helped pave the way for others to enter the category. Now in a maturing and more competitive market, the brand is seeking to leverage its first-mover advantage in oat milk to broaden its presence, starting with this month’s launch of a new Vanilla flavor.

The product will debut on January 25 online and subsequently begin rolling out nationwide with Kroger and in select regions of Publix, Safeway-Albertsons and Whole Foods. The suggested retail price is $2.99 per can.

“This was the first time that we asked ‘what do we not have that the market loves,’” said Grant Gyesky of the new flavor, a slightly more conventional profile compared to some of the brand’s past forays in cold brew. “Instead of innovating, we tried to just make it as good as we possibly can.”

In line with the brand’s focus on organic, high quality ingredients, the new SKU features real vanilla from Madagascar rather than flavoring. In moving towards a flavor with mass appeal, Rise is also looking to build on its leading position within the set: according to Gyesky, citing SPINS data, his company is the largest player in the RTD coffee-oat milk space with around 36% of the market, compared to 24% for its next closest category competitor, La Colombe. Last year’s introduction of Rise oat milk as a standalone product, available in three flavors in 1 liter Tetra Pak cartons, has opened the door to placement in grocery cooler sets, as well as through food service partners via Canteen. In those sets, the brand faces a tough fight with conventional brands like Califia Farms, Chobani and Danone, in a space where RISE’s organic certification may or may not be a deciding factor for consumers.

“Even organic consumers do not only consume organic (products), but if they are consuming something every single day, that’s where they may be looking for something with those ingredients,” Gyesky said.

Beyond introducing new flavors, Rise is looking to build that audience through different formats and channels. That includes rolling out its black cold brew and oat milk lattes in multi-serve, non-nitro bottles, as well as launching an 11 oz. can for convenience retailers in the second half of this year.

With production capacity to spare and now armed with an expanding suite of cold brews and oat milks (plus a nitro-infused London Fog SKU), Rise is positioned to continue building out its national DSD network this year and add to its current store count of 16,000 locations.

The company closed a bridge round of between $5-$10 million on Monday which Gyesky said will go primarily towards building its sales team and engaging more directly with consumers. The raise will carry the company through the majority of 2021, he noted, ahead of a more substantial raise to follow. Having passed $20 million in sales in 2020, the brand is expecting to see that momentum continue in 2021 and be potentially see it further enhanced should conditions allow for its food service and keg programs to rebound.

“We want to be in a position to optimize a lot of the opportunities that we’ve built over the last two years,” he said. “Through door expansion and distributor expansion, a lot of the relationships have been built. We want to have the capital on hand going into 2022 to really go hard and maximize those relationships.”