• 😵 FDA Warns Of Killer Kratom Product
• 💰 Jones Soda's $3M Private Placement
• 🤝 Aether Goes After Mezcal
• 🚚 Southern Glazer’s to Acquire Horizon
• 🆕 When Innovation Goes Right… And, When It Goes Terribly Wrong.

It stands to reason that as long as consumers want to stay fit, protein will always have a place in the market. But shoppers must be putting in some insane reps at the gym because the protein shake category is heating up, bolstered by several fast-rising brands at the top of the set (Premier) as well as emerging players (OWYN).

In an analysis of BellRing Brands’ stock proposition this morning, Jefferies analyst Kaumil Gajrawala noted that competition in the category is getting tougher as brands like Coca-Cola’s Fairlife (+38% in the 13-weeks ending June 22, per NielsenIQ and Jefferies data) and recently acquired plant-based player OWYN (+19%) are now outpacing BellRing’s category leader Premier (up a healthy 14%).

Gajrawala suggested there’s plenty of room for multiple players. A generational breakdown shows millennials reach for Fairlife (31% of its customers) while Boomers stay true to the classics, making up 35% of Premier shoppers.

Retail sales data from Circana shows those sales trends extend well past the quarter. In the 52-weeks ending July 14, dollar sales of Premier shakes grew 28.1% to over $1.1 billion in MULO and c-store. Meanwhile, Fairlife’s Core Power line was up 50.6% to over $822 million and its “Fairlife” branded drinks grew 32.6%. Though much smaller at around $84.1 million, OWYN shot up a robust 122.7%. Their gains come as brands like Boost (-8.4%) and Slimfast (-38.2%) fall out of favor.

And that’s to say nothing of well-performing refrigerated brands like Bolthouse Farms (+11.8% per Circana), Shamrock (+50.6%) and Koia (+12.8%). 

The Jefferies report arrives ahead of BellRing Brands’ upcoming Q3 earnings release on Aug. 6. Looking at recent reports from the company, which also produces Dymatize, BellRing has been outperforming as of late – Q1 2024 net sales were up 18.7% and in Q2 it reported consumption of Premier RTD shakes rose 29%.

One potential factor driving protein’s recent gains: a new focus by consumers on healthspan, as younger people aim to improve their health now in order to extend their fitness well into old age. SPINS called ‘Healthspan’ it’s number one megatrend for 2024 and protein has been one of the key categories to benefit from the mindset shift.

The category may also be getting a lift from the prominence of GLP-1 drugs, as consumers on medications like Ozempic seek out protein products to reduce the risk of muscle mass depletion.

Go Deeper: Protein Proliferates Even As People Drop Pounds

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The FDA warned consumers last week not to consume OPMS’ Black Liquid Kratom shot due to adverse health effects. The FDA said that at least one person has died after using the Black Liquid Kratom shot. 

📝 The agency has also fielded multiple reports of people experiencing adverse effects including “withdrawal symptoms, addiction, digestive issues, restless leg syndrome, skin problems, aggressive behavior, increased anxiety, lack of energy, and inability to focus.”

⛔ The tincture is available online and in retail smoke shops for about $14 per 8.8 oz. bottle; it is produced by OPMS (Optimized Plant Mediated Solutions) which is listed as a platinum vendor for the American Kratom Association trade organization.

❌ This is not the first time the ingredient has been linked to an opioid-like effect and come under fire by the regulatory body. The FDA is researching the addictive properties of the Southeast Asian plant, which is not regulated as a dietary supplement or drug but has been linked on multiple occasions to untimely and accidental death.

BevNET Insiders can read more about kratom’s close relationship with medicinal plant to kava. 

Jones Soda Co. announced today it has closed the first tranche of its previously announced private placement for aggregate gross proceeds of just over $3 million. The craft soda maker plans to use the funds to support growth and for general corporate purposes.

⏪Earlier this month, the Seattle-based company increased the size of its private placement to up to $5 million (previously up to $4 million) at a price of $0.40 per unit. Jones Soda expects to close the second tranche of its offering on or around July 31. 

👀 CEO David Knight recently told BevNET that Jones Soda is currently focused on preserving its foundational elements – fun, color and indulgence – while simultaneously broadening its appeal through new foodservice partnerships and product drops. 

Go Deeper: Soda Brand Embraces Role as ‘Fast-Follower.’

After a hiatus, we’re seeing a few investments in higher-end mezcal brands like Gallo’s recent addition of Derrumbes to its portfolio. We chatted with the orchestrator of a different transaction made last week to get the lowdown:

💸 The Aether Group, a recently launched incubator and brand house from a former Coca-Cola executive made its first acquisition last week: Corte Vetusto, a mezcal brand with a U.K. footprint whose U.S. distribution stalled due to the pandemic.

🇺🇸 That break in its U.S. trajectory created a runway for the Aether Group, which will bring on a new importer and distributor, building a funnel for other possible acquisitions. 

🥃 Founder of the Aether Group, Matthew Tarallo, says the high-end agave positioning allows him to avoid chasing tens of thousands of cases as the brand reintroduces itself.

Read the full story on BevNET.

Southern Glazer’s Wine & Spirits announced late last week it plans to acquire Horizon Beverage Group in a deal that includes all of Norton, Mass.,-based Horizon’s home state and Rhode Island operations. Financial details of the acquisition were not disclosed. The deal will close “upon regulatory approval,” according to the release. 

📍 This brings SGWS’s footprint to a total of 46 states-served, plus Washington, D.C., Canada, the Caribbean and Central and South America, according to a press release. 

🗺️ Once the deal is closed, Horizon’s business in the two states will operate as Southern Glazer’s Wine & Spirits of Massachusetts and of Rhode Island, respectively. Horizon employs more than 600 people, and operates out of 800,000 sq. ft. of warehouse space with 100 delivery vehicles.

👔 Horizon leadership will continue in both states, and will work alongside Southern Glazer's east region president Scott Oppenheimer. All of Horizon’s “family members and leadership team,” including co-chairmen Bob Epstein and Jim Rubenstein, will also maintain their existing roles “to help ensure a smoother transition for all employees, suppliers and customers.” 

Check out the full story for all of the details and an update on the distributor’s recent regulatory troubles.

There’s high praise, some head-scratching and outright dismay in this innovation-centric episode of Taste Radio. Among the highlights: an upstart labneh brand and a Gen Z-inspired line of better-for-you soda. Less appealing: a corporation’s commodification of ethnic foods and global flavors. 

Listen to the episode now.