Whether it’s a feast in Minnesota or a famine in New York, the emerging cannabis beverages market is nothing if not a fluid, actively developing situation. With that in mind, we called up Brendan Mitchel-Chesebro, industry analyst at market research group BDSA, to unpack some of their latest insights, which showed beverages as the fourth-largest edible subcategory (6%) in Q1 2023. 

White Spaces

Across tracked markets, beverages make up only around 6% of total edible sales; for comparison, candy is at about 74%. Within the latter, there are 415 brands producing around 5,575 individual SKUs — compare that to beverages, with just 134 brands producing just 863 SKUs. Depending on individual markets, there may be just a handful of products available to choose from, meaning “there's a big gap there that brands can sort of catch up on” to draw in new consumers. There’s also the issue of need states: while heavy users favor inhalables, and gummies and tinctures serve occasions like sleep and pain relief, cannabis RTD consumers are seeking out more social or high-energy states. In fact, 30% of consumers claim they are willing to pay more for products with specific benefits, whatever those may be.

California Compression

Cannabis beverages grew their dollar share of California’s edible category by 3% in Q1, even as overall dollar sales fell about 9% year-over-year in Q2 thanks to ongoing price compression. But over that same period, equivalent beverage sales grew by about 13%, indicating strong interest. Brands like high-dose shot maker Uncle Arnie’s have responded by introducing new products and amping up distribution. 

Powders Power Up

While perhaps not as sexy as an RTD, cannabinoid-based powder drink mixes have proven a formidable segment of the category, according to BDSA numbers. In some markets, the format represents 10-12% of beverage dollar sales, Mitchel-Chesebro said, and it has strong alignment with certain markets like outdoor-living Colorado, where it has hit 28% of beverage sales. With RTDs coming in at a higher price-per-mg of THC, mixes (and shots, for that matter) can represent stronger value, which becomes even more crucial in saturated markets. 

“Can [beverages] compete with gummies that are sort of geared towards similar needs states where you have a really price conscious consumer?” said Mitchel-Chesebro. “Because high price and high THC or low price and high THC are two things that consumers do specifically report looking for, even if it doesn't show out in the sales data.”

Have you ever found yourself longing to sip Sunday brunch through a straw? No? Well, Eggo has you covered should you change your mind. In a truly unique collaboration, the waffle brand has teamed up with Sugarlands Distilling Co. to launch its newest boozy innovation, Eggo Brunch in a Jar Sippin’ Cream. 

• Inspired by classic brunch flavors, the new liqueur combines the flavors of toasted Eggo waffles, maple syrup and butter with a hint of smoky bacon. 
• “Eggo Brunch in a Jar makes it easy for parents to kick back when they’re not caring for their little ones. So, whether parents want to punch up a weekend brunch or savor some of those classic brunch flavors during their downtime, this feel-good Eggo-inspired liqueur is the perfect treat,” said Joe Beauprez, senior director of marketing for frozen foods, in a press release. 
• Bottled at 40 Proof, Eggo Brunch in a Jar Sippin’ Cream (20% ABV) is available at select retailers nationwide beginning today. 
• This marks Eggo’s second collaboration with the Gatlinburg, Tennessee-based distillery. Last year, the two released Eggo Nog Appalachian Sippin’ Cream to celebrate the winter holiday season.

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Pernod Ricard is continuing its commitment to developing its American whiskey portfolio with the launch of a new label, Mary Dowling Whiskey Company.

• The French spirits company is partnering in a new venture from Kentucky Bourbon Hall of Fame member and Rabbit Hole founder Kaveh Zamanian. 
• Since last year the French spirits company has put even more focus on American whiskey through its American Whiskey Collective, a business unit dedicated to the company’s American whiskey portfolio that will pursue growth by investing in the “new fashioned” brands’ innovation. Skrewball Whiskey, a peanut butter flavored whiskey was its most recent acquisition in March.
• Mary Dowling Whiskey Company is named after a successful female distiller in the male-dominated world of pre-prohibition bourbon, but as a male-distilled product among a rise of women-owned or distilled whiskeys, will the brand resonate as a symbol of equality?

Read the full story on BevNET

If you’ve ever wished you could more easily carry a bottle of kombucha with you on the go without having to worry about refrigeration, a new powdered kombucha maker might have the solution. Wisconsin-based startup Beloit Kombucha (BK & Co.) has closed an $800,000 seed funding round led by Grey Collar Ventures to expand the reach of its powdered products.

• BK & Co. offers single-serve sticks of kombucha powder, containing 1 billion CFU probiotics in a blueberry mint flavor. Additional flavors are set to launch later this year.
• The financing also included funding from capital firms Battler Born Venture and gener8tor.
• "We are excited to partner with Grey Collar, BBV, gener8tor amongst others to help us grow the Beloit Kombucha brand," said BK & Co. CEO Josh Sizemore in a release. "This investment will allow us to breathe a little while we expand production and marketing efforts."
• The brand’s flagship product is now available for sale online via Amazon.

Splash Beverage Group – a portfolio company marketing brands like TapouT hydration drinks, Copa di Vino wine and SALT tequila – has established a $10 million operating capital credit facility with an unidentified Europe and Singapore based private funding group.

• Splash announced today that it will use the credit facility, alongside additional funds, as operating capital. The credit facility matures in five years and comes at the current Euribor interest rate plus 1.5% interest.
• Deeming it “no longer necessary,” the company will also withdraw an existing $200 million S-3 Registration Statement filed with the SEC in 2021, which allowed it to sell up to that amount in common stock, preferred stock, warrants or units for potential future opportunities.

From Patrón’s partnership with Formula 1 to Michael Jordan-backed Cincoro’s $350 bottle, the rise of tequila is inspiring new marketing partnerships between premium-plus brands and some of the sports world’s leading events and prominent figures.

• Marking cristalino's ascent, Maestro Dobel Tequila announced last week it is the first official tequila of the US Open. Cristalino represents 19% of the dollar share of tequila añejo, up 30% since last year.
• Casa Azul, founded by serial beverage entrepreneur Lance Collins— the beverage mogul behind Fuze, Core Hydration, and Body Armor— has announced another celebrity investor. Pro golfer Brooks Koepka has joined U.S. Women’s Open Champion Michelle Wie West and Eiza González as a partner in the tequila.
• Tequila is making a play for the tailgate too: Celaya Tequila, a tequila brand launched by former NFL players earlier this year, announced that it’s now the official tequila of the 77,000-capacity Los Angeles Memorial Coliseum and partner of USC Athletics. 

Read the full story on BevNET

Though known in CPG circles as the billionaire founder of energy shot empire 5-Hour Energy, Manoj Bhargava’s business portfolio also includes a growing media segment of TV news stations (NEWSnet and Sports News Highlights) and, as of this week, magazines including Sports Illustrated and Men’s Journal. 

• According to a Wall Street Journal report, Bhargava’s Simplify Inventions has agreed to take a controlling interest in Arena Group, the publisher of titles like Sports Illustrated, Parade, Men’s Journal and TheStreet, among others.
• Arena will receive a $50 million infusion, as well as a five-year guaranteed advertising commitment valued at around $60 million from a group of consumer brands also owned by Simplify. 
• While 5-Hour continues to dominate the energy shot category, Bhargava has diversified his business interests into entertainment (Bleecker Street) and invention (Stage2 Innovation).

Thrive Market has more than a million members who pay $60 a year to shop from a carefully curated product assortment focused on organics, ethical sourcing, and positive impact initiatives. Jeremiah McElwee, Chief Merchandising Officer at Thrive Market, will tell us what it takes to make the cut, cost and business implications for brand partners, and how to grow sales once you're inside. Register for free.