Yerbaé Brands has been acquired by Florida-based functional beverage maker Safety Shot in what could be the first of multiple beverage acquisitions by the company.
Fresh off a branding overhaul this year, Safety Shot aims to “pioneer the world’s most innovative functional beverages,” starting with its eponymous flagship line, a 4 oz. shot billed as “the world’s first rapid alcohol reducer,” backed by a clinical study.
“We believe that this acquisition could be a significant revenue catalyst for Safety Shot on top of an expected revenue growth rate of 50% expected in Q4, versus Q3,” said John Gulyas, Chairman of Safety Shot, in a press release. “We believe Yerbaé’s impressive growth and established presence in the plant-based beverage market, generating approximately $12 million in revenue in fiscal year 2023, could be instrumental in driving our potential growth.”
Founded in 2017, Arizona-based Yerbaé offers a line of ready-to-drink yerba mate energy drinks and caffeinated seltzers in 12 oz. and 16 oz. cans. In recent years, the brand found traction within sports and entertainment, enlisting names including NFL star Aaron Rodgers, New York Yankees slugger Giancarlo Stanton, and multiple college athletes on NIL deals. The company has been publicly traded on the Toronto Stock Exchange since 2023.
The company generated approximately $12 million in revenue for FY 2023 against $5.9 million in cost of sales, per a press release.
SHOT’s acquisition of Yerbaé gives the parent company “immediate access to Yerbae’s well-established retail partnerships,” with the expectation that Safety Shot can tap into existing merchandising programs and promotional initiatives. The yerba mate brand uses a mix of DSD providers, broadliners and direct shipments, and counts foodservice operator Vistar as an investor. Sales distribution, finance, and operations teams are expected to be integrated.
The two companies will also seek to create synergies in supply chain logistics, ingredient procurement and logistics, sharing warehousing, transportation and fulfillment resources. Sales distribution, finance, and operations teams are expected to be integrated.
“The Transaction is intended to create a stronger, more diversified beverage company with a presence in both Canadian and U.S. markets,” Safety Shot stated. “We believe that this dual-market access enhances the combined company’s ability to scale internationally, capitalize on emerging trends in functional and energy beverages, and attract institutional and retail investors across borders.”
Though category pioneer Guayaki remains on top, the ready-to-drink yerba mate space has seen numerous startups enter the mix in recent years, including CLEAN Cause, Pepsi-backed Yachak and Canadian brand Mateína, which counts podcaster Dr. Andrew Huberman as an investor and advocate.
Acquiring a Portfolio
Speaking to BevNET today, Yerbaé co-founder and CEO Todd Gibson said that upon closing, the newly merged company will be focused on additional acquisition targets in the CPG sector.
“We’re going to be highly focused and surgical around who is the next generation brand that we’re going to lean in with,” Gibson said. “Where are they? Do they fit our distribution system? Do they fit our bottling and our execution system? Would they be a great compliment to the team? And more importantly, do they have real potential for growth?”
“If you know of any great emerging companies, or companies that have at least $5 million in sales that are looking for a potential acquirer, my ears are going to be wide open,” he added.
Gibson said he will remain with the company in a “special advisor” role, while his wife, Yerbaé COO Karrie Gibson, will continue in a significant operational role.
He was also bullish that SHOT, which is traded on the NASDAQ exchange, will allow Yerbaé to fuel growth and raise additional capital that it had been unable to source as a publicly traded company on a Canadian stock exchange.
“The Canadian marketplace was a stale marketplace for fundraising,” he said. “So even when we more than doubled our business, it still became difficult to raise funds during that timeframe. So now is our opportunity to take the capitals that the company has, focus in on building the brand and building those foundational blocks up and supercharge Yerbaé’s growth again.”
Despite doubling sales in 2023, Yerbaé’s revenue declined throughout most of 2024 as the company scaled back its retail footprint due to the lack of available investment. In the first nine months of 2024, the company reported about $4.6 million in revenue, down from $9.9 million the year before.
Gibson said the company willingly pulled out of several retailers, including Sam’s Club, in order to conserve capital and “focus on the customers that were delivering profitable business to the company.”
“We leaned in with those customers, and by leaning in, we drove our growth significantly within each of those customers,” he said. “But at the same time, it did come with a detriment. They came at a loss of top line, but a gain of efficiencies on the bottom line. So we saw that as a major win for the organization in 2024 and now, as we enter into 2025 post the commencement of this transaction, we expect to see growth to come right back into this business, because we’ll have the capital to connect with our consumers.”
Retailers where Yerbaé has seen sales rise, he said, include Sprouts and Costco, and the brand most recently added around 2,000 Kroger locations across the country at the end of the year. As well, the brand is expanding in corporate campus and other foodservice accounts.