• 🤑 Refresco Demands $67M From PRIME 
• ☕ GNC’s Costello Backs ‘Brew-Less’ Coffee
• 👀 CTI Scales Under New Leadership
• 💰 InvestBev Backs Sechey
• ◀️ Kona Gold Explores Reverse Merger
• 🔀 Eat The Change Focuses On Beverage

Music festival season is in full swing, and this year it’s seeing more than just psychedelic costumes and light shows.

The music industry is nothing if not eager to tap into youth trends; in this case, it’s the rising popularity of non-alcoholic beverages from across categories that’s manifesting at concert venues nationwide. Live Nation made headlines by investing in Liquid Death in 2021, but more activity followed: Goldenvoice, the promoter behind influencer-laden festival Coachella, has partnered with Los Angeles-based non-alcoholic (NA) retailer New Bar for two years in a row and has shown the revenue potential of innovative NA options in these settings.

Those types of partnerships represent an opportunity for functional and THC drinks to not only gain recognition but recontextualize the overall festival experience while giving promoters an opportunity to increase concession sales. Attendees are also asking for NA, said Insomniac head of new ventures Keary Millard.

“[Non-alc] picked up quite a bit of steam and there's no denying it,” said Millard. “Beer is declining but non-alc is up.”

Among legal-drinking age consumers, 75% of Gen Z and 70% of Millennials were moderating their alcohol consumption in 2023, according to IWSR analysis.

Functional non-alc brand Hiyo kicked off the summer music scene with a new five-year partnership with electronic music event promotion company Insomniac. The functional social tonic will sponsor all Insomniac events and be sold at all event bars. The non-alc RTD maker is also hosting its own Hiyo House zero-proof lounge activation at each festival.

The partnership — Insomniac’s first long term deal with a functional NA brand — represents its commitment to the category, said Hiyo co-founder George Youmans.

Excluding Insomniac’s Hard Fest, which happened this weekend, Hiyo has sold over 40,000 cans over the course of the partnership, Youmans said. The Insomniac deal has led to not only other live event opportunities including an activation at this past weekend’s Pretty Lights show at Red Rocks but also increased retail distribution in conventional chains  aiming to offer more next-gen options.

“A lot of these retailers call themselves “uncool” and they want to bring more New Age customers in. We offer that,” Youmans said.

BevNET Insiders can read the full story to learn how hemp-derived THC beverage brands are also making use of the festival scene.

Refresco Beverages is asking for at least $67 million in damages after accusing former client Congo Brands of backing out of a long-term production agreement for sports drink PRIME, according to a lawsuit filed last week in the Court of Chancery in Delaware.

📝 The complaint – which pits the world’s largest independent beverage bottler against one of the most popular drink brands to emerge in recent years – stems from a 2023 agreement between Refresco and Congo to manufacture sports drink PRIME Hydration, a three-year contract that stipulated for up-front investment in an additional, exclusive production line in Refresco’s Truesdale, Missouri facility for PRIME’s custom shaped and sized bottles. 

Read the full details on BevNET.

What is brew-less coffee? It’s a lot like instant, but better, per marketing materials for new venture Diamond Brew, founded by former Forbes contributor Douglas Yu and backed by investment from GNC CEO Michael Costello.

🧊 The brand is promising “a meticulously crafted coffee experience” via freeze-dried coffee crystals – packaged in hexagonal aluminum pods clocking in at around 160 mg of caffeine each – that dissolve in hot or cold water. The product is available exclusively online, for the moment.

✨ In a press release Costello said the brand “represents innovation at its finest in the coffee industry. I’ve been looking for a product that solves a need for high quality caffeine and convenience, and this is the one.” He’s joined on the cap table by Dream Ventures, Entrepreneur Ventures and the Kali Mata family office.

Get ready for our August Community Calls! This month, dive into how POD Foods can slash your distribution costs, gain insider tips from Amazon on optimizing integration and reviews, learn from big CPG innovations, and explore the timeline for profitability in retail. Our August calls are free and open to the public – just register in advance and mark your calendar.

Specialty packaging company Chromatic Technologies Inc. (CTI) is working to scale operations and keep its innovation pipeline full. The company, which produces thermochromic ink meaning it changes color when chilled or heated, is under new leadership for the first time since it was founded in 1993. 

👀 CMO Maria Del Rio said that although CTI has undergone a significant shift in leadership this year, its growth trajectory has remained unchanged as it extends its sales both in and outside of food and beverage with upcoming product launches. 

💭 “We really analyze what is the consumer journey, so that we make sure that when we put our ink somewhere in that artwork or in that packaging it brings either an emotional connection and memorability … or it improves the decision that the consumer wants to make,” said Del Rio. 

👔 In February, Daniel Wachter, who joined CTI as Chief Commercial Officer in 2020, was named its CEO. In April, the company hired former 3D Systems Corporation VP Edwin Hortelano as its Chief Technology Officer, and in May it announced an investment from Molson Coors-aligned CPG incubator L.A. Libations.

BevNET Insiders can learn more about the company’s new hires and plans for scaling the business.

Private equity provider to the alcohol beverage industry, InvestBev is diversifying its portfolio with a strategic investment in Sèchey, a non-alc brand, category curator, and marketplace. 

🚚 The investment, announced last week, will enable Sechey to expand its product line, enhance distribution channels, and increase marketing efforts to reach a broader audience, according to a release. The investment comes after a similar business, Boisson, restructured and filed for bankruptcy.

💻 Founded in 2021, Sèchey operates a brick-and-mortar store in Charleston, South Carolina while also selling nationwide through its ecommerce site. 

🎯 Earlier this year Sèchey and Target expanded their partnership to curate an NA cocktail and wine set in stores, after a pilot run that began in December.

Go deeper: Watch NA retailers discuss building the category

Beverage holding company Kona Gold announced it is exploring a reverse merger to bring in new management and shift the company’s direction for “future growth and success.”

🏭 The company will continue to operate its current subsidiaries, including Covert LLC which specializes in Delta-8, THCa, THC-P, and Kratom, as well as its HighDrate and Kona Gold beverage brands. 

🚚 Kona previously announced plans to acquire Surge Distribution Company from Loud Beverage Group, but shared in the release it was unable to meet the necessary terms of the acquisition and that business is now back under the direction of Loud. 

🗣️ “The company recognizes the need for a completely new team to bring in new ideas, fresh energy, and clear separations from the past. This move is intended to ensure a brighter future for the company and its shareholders, and to continue the current management team's best efforts to distance itself from past management,” the release stated. 

Seth Goldman and Spike Mendelsohn might just be Drinking the Change soon. The company announced it is discontinuing its Cosmic Chews snack brand and devoting all its attention to the Just Ice Tea line. 

🥕 The move was due to weak velocities at retail, according to a post from Goldman. Cosmic Chews launched in March 2022 and underwent a packaging redesign ahead of Expo East in 2023. It was the company’s second snack item, which formerly included a Mushroom Jerky product that was discontinued in October 2023.

📈 Eat The Change has experienced most of its success with Just Ice Tea where it grew dollar sales 272.4% in the last 52-week period ending July 24, according to Circana data.

💬 “Running a start-up is a bit like letting water flow down a hill – you can’t always control where the water chooses to go,” Goldman wrote on LinkedIn. “If we had insisted on sticking with snacks and forgoing the tea opportunity, we would be out of business.”

Does the announcement of a new $135 million fund offer any indication about the flow of new capital in food and beverage? The hosts discuss and also highlight a Poppi-infused snack, Walgreens’ private label prowess and some “notable” folks. We also feature an interview with five entrepreneurs who are drawing upon their experience and networks to support emerging brands via a new venture.

Listen to the episode now.