Here at BevNET, we waste no time digging into a tasty new M&A deal and with the news yesterday that Keurig Dr Pepper was acquiring a majority stake in energy drink and sports nutrition brand GHOST, we put on our tan jumpsuits and strapped on proton packs to catch some more details.
The deal caps off a year of high-profile moves for KDP in which it aligned with some of the fastest-growing names in key categories like sports drinks (Electrolit), coffee (La Colombe) and now energy. The GHOST acquisition was described in a blog post by KDP chief strategy officer Justin Whitmore as helping shape the “now and next beverage portfolio” for the multinational drink maker. Whitmore’s team was drawn to the brand because it is a “high-potential trademark.” KDP has been discussing a potential deal for over a year with GHOST’s founders Dan Lourenco and Ryan Hughes, who both will be helping lead the brand under KDP’s U.S. Refreshment Beverages segment. One big immediate question: How will KDP manage its investment and distribution of Nutrabolt’s C4 energy drink alongside GHOST? “We view GHOST as complementary to C4 – targeting a different set of consumers and lifestyle occasions – and this deal should enhance C4’s potential by adding important scale to our energy platform and DSD network, including in small format stores,” said a KDP spokesperson in response to email questions. Alongside C4 and GHOST, KDP’s suite of energy drinks includes a forthcoming line from Black Rifle Coffee and another female-positioned RTD from supplement maker Bloom, as the company aims to create a “multifaceted energy platform” to address a range of need states and occasions. While C4 is geared towards the fitness community and gyms, GHOST speaks to next-generation consumers in gaming with the potential of expanding into on-premise occasions at music festivals or live-performance venues, as noted by KDP CEO Tim Cofer in yesterday’s earnings call. GHOST has ambitions of going deeper into CPG, as evidenced by recent forays into protein cereal and hydration drinks. The brand has “some emerging LRB products that operate in interesting white space categories, (e.g., protein, sports hydration),” said a KDP spokesperson, which can also benefit from enhanced DSD and commercial capabilities. None of that will likely matter to GHOST’s network of Anheuser-Busch affiliated distributors, who are once again left to watch a major energy brand depart for another strategic. The beer company’s investment helped launch GHOST as a RTD brand, with management repeatedly praising the partnership in quarterly earnings calls; if any company was going to acquire GHOST, many imagined it would be AB. But as with past distribution resets in energy, category disruption may open up the runway for a fast-rising independent – names like Bucked Up, Lucky and RYSE Fuel – to fill in gaps left behind by GHOST’s exit. |