One of Lucky Energy’s most recent investors plans to help the brand reach new growth goals by tapping its connections to the alcohol industry as the brand prepares for a Series B round this summer.
Private-equity firm InvestBev Group announced itself this morning as an investor in Lucky Energy, adding “mid-six-figures” to the company’s $14.2 million round in March. Details of the investment were not disclosed.
“We’ve bet on [Lucky Energy founder] Richard Laver,” said InvestBev founder and managing partner Brian Rosen. “The team is also all from the non-alcoholic space. Whether it’s from Red Bull or Liquid Death, they are all veterans who have grown brands.”
The brand is expecting to announce its new president soon, who is “coming from a big situation,” Laver told BevNET.
The investment is part of InvestBev’s broadening portfolio strategy. InvestBev has been expanding into non-alcoholic brands like intoxicating hemp drink Cann, kombucha maker JuneShine (which also makes hard kombucha) and adult non-alcoholic retailer Sèchey, to be a counter-balance to its spirits investments like Ten To One Rum, Siempre Tequila and Thomas Ashbourne Craft Spirits, among others.
In an environment where consumer demand for alcohol is “soft-to-flat,” Rosen said, the firm is looking to “expand its footprint.”
“For us to be competitive with other private equity firms, we need to and have been expanding our portfolio base for the better part of 18 months,” Rosen said. “Lucky is a natural additive to what the consumer is drinking. Better-for-you, check the box. Energy drink for millennials, check the box.”
Lucky is more than happy to partner with InvestBev as the brand continues to grow its footprint in the convenience and liquor store channels, where it has seen velocities increase as consumers grab the energy drinks as mixers, Laver said.
Although there have been discussions internally about possibly extending the brand into mixers or RTD cocktails, the focus is on building out its distribution footprint for energy drinks.
The doors that InvestBev can open to Lucky Energy are not just in retail, though. Laver sees a potential exit for his drink brand to alcohol industry strategics who are similar to InvestBev, diversifying outside of adult beverages.
“As alcohol use declines, liquor and beer companies are going to potentially want a stalking horse in their portfolios,” Laver said.
Lucky Energy is not done raising capital either. Laver reported that he is “not waiting” to raise new investment as he is seeking a $30 million to $40 million round this summer.
The “old-school” approach to raising additional capital was to “space it out,” he said. “I see the greatest opening in the energy category happening right now.”
Less than two years from launching in August 2023, Lucky Energy (which changed its name from Lucky F*ck Energy) has accrued over over $40 million in funding and is in over 12,000 doors with an expectation to be in 17,000 by the end of the year. The brand is continuing to focus on New York, California and Texas markets but has a goal of 30,000 to 40,000 doors nationally by the end of 2026.
Despite these metrics, Lucky Energy has has yet to breach the top 20 selling energy drink brands nationally, according to Circana omnichannel sales tracking.
Laver expects to change that as his brand accrues a significant war chest and targets foodservice accounts where he sees Lucky Energy having an advantage over other highly-sweetened caffeinated drinks.
“People love to have Lucky with a sandwich. It’s very similar to brands like Arizona or Poppi,” he said. “We’re seeing people at concerts and outperforming wherever we put it.”
The brand reported that it has been very satisfied with its marketing investments and its distribution partners like Big Geyser and Polar in the Northeast. It plans to take learnings from that region to invest in new distribution partners and activations in Florida and Texas. It recently secured a retail partnership with H-E-B in the Lone Star State.
“[The] big picture is to be a $100 million revenue company in the next eighteen months,” Laver said. “To get where we’re going, we need elite partners onboard.”