If the fast-rise of sports drink upstart BioSteel has caught you by surprise, you’re not the only one. 

Last week, BioSteel’s parent company, troubled Canadian cannabis conglomerate Canopy Growth, revealed that it is under investigation by the U.S. Securities & Exchange Commission for “material misstatements” in its financial reporting — in other words, overstating net sales by around $10 million (2% of total sales) for the fiscal year 2022, and by around $14 million (4% of total sales) for the nine-month period ended on December 31. The revelation comes after an internal company review in collaboration with independent external counsel and forensic accountants.

Speaking during the company’s earning call, CEO David Klein said that Canopy has already “exited several members of the BioSteel leadership team,” though they were not identified, and “are considering all legal remedies available to us, including litigation to recover damages and costs associated with and resulting from the findings of the BioSteel review.”  

What does that mean for the brand? According to a transcript of the earnings call, CFO Judy Hong said tactics will be adjusted within the U.S. to cut costs: gross margin improvement initiatives are well underway, including “exiting unprofitable customer programs and reducing the depth and frequency of certain promotions.” Having closed a $19.5 million deal to fully acquire a production facility in Verona, Virginia from Flow Beverage Corp. in November, Hong noted that a new warehouse model “will eliminate significant fixed-cost obligations and reduce shipping costs.” She also pointed towards new contracts with “more favorable product costs across our powder and ready-to-drink products.”

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Last week E. & J. Gallo continued its acquisition streak with Bev, a Los Angeles-based canned wine and spritz brand. Spirits editor Ferron Salniker spoke with the brand’s founder about how her unapologetically female-focused brand helped it make a mark on the wine industry, where the wine and spirit giant sees distribution opportunity, and the power of building an authentic brand before she even had a product.

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Enjoy a refreshing Taste of the Islands, Calypso now offers 6-packs and Zero Sugar varieties. Made for bringing out your best island self with every sip. Leading lemonade brand, Calypso, can be found nationwide at leading retailers. Learn more

Pernod Ricard has entered into an agreement with Stock Spirits Group to sell Clan Campbell Blended Scotch Whisky brand, a leading Scotch brand in France. The whisky is sold in other European markets as well. Following a series of acquisitions over the last year, the French spirits group said it was looking to shape its portfolio to meet the “evolving needs of its consumers” and that the move will open up greater opportunities for premiumization. Pernod Ricard recently bought majority stakes in peanut butter flavored whiskey Skrewball, George Strait’s Codigo 1530 Tequila and Canada RTD producer Ace Beverage Group last week. The group’ Scotch portfolio was one of the six categories that drove 90% of the company’s growth, including blended whiskies Ballantine’s and Chivas Regal, as well as The Glenlivet and Aberlour single malts.

In this week’s new products roundup, Jones Soda Co. gets ready for game night with the launch of its Pucker Punch Game Pack, Uncle Matt’s introduces a functional juice-based beverage and De Soi and Blind Tiger unveil summer-inspired non-alc beverages.

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This week on the podcast, the hosts discussed their smash-and-grab introduction to AriZona’s new line of hard teas, a Ted Lasso sighting at BevNET Live and a category-defining victory for non-alcoholic cocktail brands. This episode also features an interview with Luke Holden, the founder and CEO of Luke’s Lobster, a vertically integrated and family-owned seafood company based in Saco, Maine.

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Dive into energy drinks, energy shots, malternatives, shake /meal replacement drinks, and the Supplier & Services Guide. Also gain valuable insights from our time at the Craft Brewers Conference and take a sneak peek at upcoming trends for the Summer Fancy Food Show. Read the May/June edition.