• 🌄 Court Favors PepsiCo in RISE Lawsuit
• 📈 How RTD Brands Scale
• 💸 Defining Success at Year End
• 🔮 A Definitive 5 For ‘25. These Things Will Happen. We Hope.

As we close out a chaotic 2024, the only thing everyone seems to agree on is more unpredictability in 2025.  But it’s always a good idea to follow the money, which led us to Janica Lane, co-head of consumer investment banking at Piper Sandler, who joined BevNET’s Jeff Klineman on stage at BevNET Live earlier this month to offer insights into the beverage investor mindset at the start of a new year, including the state of the market for strategic investment and M&A, alternative exit options like private equity, public markets, and platform formation.

Coming just a few weeks after a fraught presidential campaign, there has been much hand wringing over the potential for punishing tariffs, as promised by president-elect Donald Trump. Lane said that while many in the industry are worried about that possibility, she believes that beverage is not likely to be as heavily hit as other sectors will be.

Another unknown is the effect that GLP-1 weight loss and diabetes drugs will have in the food and beverage space, but Lane said that early signs suggest sales could even increase as a result of these new drugs’ prevalence – a sentiment echoed by speakers last week during Nosh Live.

Thinking more structurally, Lane noted that “a business has to do what’s most strategic for the business,” meaning running lean, a commonly accepted notion, is not always the answer. 

“We’ve had CEOs that have been very big on this concept of ‘big shoulders’ – bring in a few people who are very capable,” she noted. “I certainly advocate for that if it is a sustainable way to grow the business. But in this category, things like merchandisers have become very important, so if you are say doing a warehouse model and not a DSD model and you want to make sure there is product on the shelf, it may be very strategic to have 50 merchandisers out there.” 

Overall, Lane projected a positive outlook for beverage as categories like energy and sports drinks have demonstrated room for disruption and new brands to gain a foothold.

“I am hugely bullish on beverage,” she said. “I think that if you look in the retail sales data, it’s some of the biggest categories in terms of sales. I think it’s some of the highest potential for growth and for new companies to emerge.”

Watch the full conversation here.

Watch the full lineup of presentations from BevNET Live here.

PepsiCo was handed a final victory over startup coffee brand RISE Brewing Co. last week when a U.S. appeals court upheld a prior ruling that its now-discontinued MTN Dew Rise energy drink line was “not likely to cause consumer confusion,” denying RISE’s request to take the suit to trial.

• It’s been a legal rollercoaster ride for Connecticut-based RISE Brewing, which first sued PepsiCo for trademark infringement in 2021. The brand was handed an early victory when a judge issued a preliminary injunction barring the conglomerate from using the word “Rise,” prompting a name change to MTN Dew Energy.
• Fortunes later turned in Pepsi’s favor when an appeals court overturned the ruling. In 2023, the same judge who had issued the injunction dismissed the case, calling RISE’s trademark “inherently weak” and stating it “commands a narrow scope of protection.”

With the RTD category at peak saturation, retailers and distributors want to know brands can bring incremental consumers – otherwise they’re not taking any chances, shared Cassie Finley, VP of customer development at Southern Glazer’s Wine and Spirits during BevNET Live Winter 2024 earlier this month. 

🚀 Finley discussed the opportunities and challenges when an RTD brand starts to scale alongside Forrest Dein, co-founder and CMO of JuneShine, the 14th largest beyond beer and spirits-based RTD brand family in the country; and Adam Kost’s Dirty Shirley which turned a nostalgic bar call into a canned cocktail that’s grown 800% over last year.

📶 For Dirty Shirley, the RTD earned a social media-built demand from Gen Z, giving the brand “market validation” so scaling quickly was risky but was about “giving the people what they want,” said Kost. But other brands need to scale by growing where they are planted and focus on their customers, rather than splitting velocities, according to Finley. 

Get the top points or watch the full replay.

Over the past year-plus, we’ve written repeatedly about the slowdown in venture funding and strategic transactions, and frequently investors have told us that they will look to invest in companies that are able to maintain margins of at least 40% and are able to easily achieve profitability – if they haven’t gotten there already. 

But still, the successes we write about, the way an exiting founder can be looked at like a triumphant general returning home from the wars, might very well over-distract from the gloomy conditions on the battlefield. It takes a long time to count the casualties.

The harsh truth is that about two-thirds of businesses across all industries don’t last 10 years and about half of them don’t make it three, according to the U.S. Bureau of Labor Statistics. We know that across food and beverage, there are fewer than 100 billion-dollar brands, according to scan data, and that VC investment has been down for the past couple of years.

Read BevNET Editor-In-Chief Jeff Klineman’s assessment of the funding landscape and what brands should think about heading into the new year.

We’re not prognosticators. But we are a hopeful bunch. With a new year on the horizon, the hosts have five (actually, six) wishes for the food and beverage industry in 2025. Swift progress is unexpected, but these are reasonably achievable goals.

Listen to the episode here.