• 💰 VMG Closes $1B Fund VI
• 🌺 Campari Debuts Crodino In U.S.
• ✂️ U.S., China Cut Tariff Rates
• 🚚 Southern Glazer’s New Distro Hub
• 🇺🇸 Make Drinking Culture Great Again? 

That morning cup-a-joe burning a hole in your pocket? You’re not the only one.

The average price of ground roast coffee hit a peak last month, topping $7.50 per pound, representing a nearly 25% increase year-over-year, according to the Federal Reserve Bank of St. Louis (FRED).

The cost of coffee is impacting the cost of both a bag of beans at the store as well as foodservice prices. Regular coffee prices rose over 16% in the last two years, according to data from point-of-service provider Toast.

What’s behind all the increases? If you guessed supply issues, you are right. Climate change-related weather patterns are directly impacting green coffee bean supply and, as demand continues to rise for a steaming cup of java, prices tick up.

This isn’t necessarily news – some of the largest coffee-growing regions have been experiencing lower yields due to disease and bad weather over the past few years. Brazil, one of the top-growing countries, has been hit particularly hard, causing Arabica bean futures to rise significantly since November.

But the impact has begun to reach some of the largest coffee suppliers. Beverage giant Keurig Dr Pepper’s recent Q1 earnings revealed that coffee sales were down 3.7%. Black Rifle Coffee Company also commented on the impact on its core business during its Q1 report last week, attributing part of its gross margin decline to higher green coffee prices.

Both KDP and Black Rifle Coffee said they are exploring strategies to offset revenue declines in the segment by raising prices for consumers. Paired with this morning's Consumer Price Index report, showing food inflation has risen 2.8% in the last 12 months, and we’re left with a bitter aftertaste.

The CPI Bright Side: On a month-over-month outlook, food inflation was down 0.1% between March and April, and the Food At-Home category saw prices drop 0.4%.

Go Deeper: Insiders can access the BevNET exclusive SPINS April 2025 Category Report – What’s New in RTD Tea & Coffee?

Consumer and tech-focused growth equity firm VMG Partners announced the close of its Fund VI at “its target and hard cap” of $1 billion, in an announcement this morning.  

• The funding was contributed by both returning and new limited partners, said general partner Robin Tsai. 
• VMG has invested in over 60 consumer brands including big names such as KIND Snacks, Spindrift, Daily Harvest, Ghost, HUMM Kombucha, Justin’s, Lily’s and more. 

"Across market cycles, we continue to double down on what we do best – rolling up our sleeves to help founders build iconic brands that are redefining the consumer experience,” Tsai said in a statement.

Go Deeper: Beverage Investment Warmup on Tap for 2025, Investors Say

On June 11 + 12, hundreds of beverage industry experts and innovators will meet in NYC for BevNET Live. The leading beverage industry event brings together industry leaders and innovators to define what’s next. Whether you’re launching your first SKU or scaling a nationally distributed brand, the entire beverage ecosystem will be there.

Sparking the conversation will be an expert lineup of speakers who will discuss the latest industry trends, proven strategies for scaling your brand, navigating distribution channels, collaborating with investors, and establishing ground-breaking new beverage categories.

Check out a few speaker highlights, view the full agenda, and don't forget to register!

Campari America is building on its success with supporting the spritz to find growth in another trend: adult non-alc.

0️⃣ The Italian spirits group announced today it is bringing Crodino, a zero-proof ready-to-serve spritz, to the U.S., marking its first Stateside foray into the growing category.

🥇 Well-known in Italy, Crodino is a golden-hued bitter soda named after Crodo, a town in Northwest Italy where it was first produced in the mid 1960s. 

🦅 Campari swooped up the brand three decades later, and is betting on its triumph with another brightly-colored aperitif, the Aperol Spritz, to usher Crodino into the U.S.

📈 Within ANA, RTDs are gaining traction with sales up 167% in 2024. Independent brands have gone after the sober spritz and aperitivo occasion, with many of them offering Campari-like replacements. But importing a staple of its Italian portfolio may make more sense for Campari.

Read the full story to learn why.

Tariffs on imported Chinese goods have been dropped from 145% to 30% and duties on U.S. imports to China have been slashed from 125% to 10% at least for the next 90 days after trade officials reached an agreement in Geneva, Switzerland on Monday. 

↪️ The effective U.S. tariff rate will be 17.8%, which could impact consumer’s annual household purchasing power by $2,800, Yale Budget Lab researchers estimate; this is the highest effective tariff rate since 1934. 

👏 But, the news was a much welcomed relief for CPG companies, including Hotpot Queen, which sources from the Sichuan region and was forced to temporarily pause all new POs due to the financial challenges imposed by rising tariff rates.  

Catch Up: Tariffs Freeze Hotpot Queen

Bev-alc giant Southern Glazer’s Wine & Spirits is opening a new 375,000 sq. ft. distribution center in Gisemar, La., this week that will serve as the company’s strategic anchor in the state with scalability for the next three decades. 

🤝 The news comes as Southern Glazer’s announced the resolution of a lawsuit by Major Brands (now Breakthru Brands) filed in 2018 claiming it had a franchise relationship with Jägermeister. The litigation was dismissed without a settlement payment. 

Go Deeper: Southern Glazer’s Charges Independent Stores Up to 67% More 

Tony Abou-Ganim, a legendary figure in the world of cocktails and hospitality with nearly five decades behind the bar, is sounding an alarm for the industry he cherishes. “Where did the fun go?” he wonders.

Tune into the episode here. Also available on Spotify and Apple Podcasts.