• 🚫 California Approves Hemp THC Ban
• 🤝 Diageo Acquires Ritual Zero Proof
• ✨ BevNET Best of 2024 Awards
• 🔵 Pepsi Eyes Co-Branded RTDs
• 🌌 Get Oatraged
• 💰 Patrón Founder Taps  Texas Spirits
• ☕ How Did Cometeer Raise $100M In VC Funding?

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Danone SA is making a bid to take full ownership of kefir manufacturer Lifeway Foods, offering $283 million, or $25 per share, for the publicly traded company, according to a Schedule 13D form filed with the U.S. Securities and Exchange Commission (SEC) earlier this week. And so the plot – and the kefir – thickens. 

French dairy giant Danone, through its Danone North America business, has been a longtime shareholder in Lifeway with a 23.4% minority stake. The offer to purchase the company outright comes against the backdrop of record sales growth, as well as a fermenting family feud between CEO Julie Smolyansky and her mother and brother, Ludmila and Edward, who are also shareholders in the company. 

Last month, Ludmila and Edward filed a consent statement with the SEC marking the launch of their “Life Back to Lifeway” campaign, which seeks to oust Lifeway’s current board of directors, including Julie. In the filing, the duo – who are working to launch a competing kefir business called Pure Culture Organics – said Lifeway is “missing critical market opportunities due to a lack of strategic vision.” 

Despite the family drama, Lifeway’s recent sales are on the upswing following a significant downturn roughly five years ago. In Q2 2024, the fermented beverage brand saw sales climb 25.3% year-over-year to $49.2 million. Net income was $38 million or $0.26 per basic and $0.25 per common share. 

In a letter addressed to Julie Smokyansky, Danone deputy CEO Shane Grant said that an acquisition could give Lifeway “an attractive opportunity to achieve its full potential…removing the constraints of Lifeway’s size.” 

Reports of Danone’s acquisition proposal appear to have been favorably received by investors as Lifeway’s stocks rose over 40% Tuesday morning following the announcement of the SEC filing. 

If the offer is accepted, Lifeway would become the latest health and wellness-focused business acquisition by Danone. Most recently, the French conglomerate purchased “whole foods tube feeding” business Functional Formularies in May and previously acquired a majority stake in coconut-based alt yogurt producer Harmless Harvest. 

In a press release, Lifeway confirmed it had received the proposal from Danone and said its board of directors will review and evaluate the proposal alongside the company’s independent outside advisors to determine the most appropriate course of action. 

“While it’s still early to fully assess this development, we view it as a positive recognition of the work my mother and I have dedicated to Lifeway Foods over the past five years. The offer validates the significant potential for continued growth and innovation within the kefir market,” Edward Smolyansky told BevNET. 

Insiders can learn more about Danone’s bid to acquire the kefir company in the full story on BevNET.

Yes, California is really banning hemp-derived, THC-infused food and drinks. The state’s Office of Administrative Law officially approved Gov. Gavin Newsom’s proposed emergency ban this week, with immediately blocking the sale of infused products through March 25, 2025.

🎯 Newsom took aim at “intoxicating hemp products” that were on sale outside of dispensary channels, arguing that allowing unregulated THC product sales in mainstream retail made it easier for “drug peddlers [to] target our children.”

📣 Cannabis industry advocates have been vocal in their opposition to the ban, arguing it could devastate a potential $3.6 billion market in California.

📝 According to a survey of California operators conducted by cannabis research firm Whitney Economics, 83.3% of respondents said that if the ban was enacted, they would either go out of business, move to another state and/or transition their business online.

BevNET Insiders can get a complete understanding of the impact by reading the full story.

Spirits house Diageo is on a mission to lock up the adult NA liquor category and this morning announced it has acquired Ritual Zero Proof. Terms of the deal were not disclosed. 

✨ Diageo initially took a minority stake in the NA spirits brand in January 2020; Ritual now joins Seedlip (acquired in 2019) in Diageo’s NA portfolio. Co-founder David Crooch will remain with the brand as Diageo’s Non Alcohol general manager where he will lead the expansion of the company’s non-alc business unit.

🥂 Launched in 2019, Ritual has developed into the top selling NA spirit brand and expects to capitalize on Diageo’s global reach where the NA category continues to grow.

📈 According to IWSR’s Bevtrac data, no-alcohol is the only category with a “net positive” increase in consumption. Adding to that, IWSR forecasts that the top 15 global markets will experience +5% volume CAGR growth between 2023 and 2028 with spirits (+10%) leading beer (+6%) and wine (+5%) in category growth.

💬 “This acquisition is proof of the mainstream potential of the category, and our shared ambition to make sure a non-alc cocktail is available on every menu and on every grocery and liquor store shelf, providing sophisticated choices to today’s consumer,” said Ritual co-founder Marcus Sakey.

Stay tuned for a full report later today on BevNET.

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BevNET’s annual “Best Of” Awards commend companies, brands, individuals, products, ideas and trends from across the ever-changing beverage industry landscape. The highly-anticipated awards show will take place in Marina del Rey, Calif., during BevNET Live Winter 2024 on December 8-10, 2024.

BevNET’s Best Of 2024 Awards are currently open for nominations and you may submit as many nominations as you’d like, either for your own company/product or a company/product you find deserving. 

The deadline to submit nominations is Friday, November 1.

Click here for more information and to submit a nomination. 

PepsiCo is coming for The Coca-Cola Company’s co-branded canned cocktails, announcing a new partnership today with Diageo-owned Captain Morgan. The RTD cocktails will make their debut in the U.K. market pairing Captain Morgan’s Original Spiced Gold rum with Pepsi Max in both 8-ounce and 12-ounce cans.

🤝 Coke has found a successful reception to its partnership with Brown-Forman’s Jack Daniels whiskey and Absolut vodka. So much so that it has doubled down and launched a Bacardi Mixed RTD cocktail in Mexico and Europe last week.

🤔 Diageo research found that 81% of consumers are more likely to purchase an RTD with a recognizable mixer, according to The Spirits Business.

📊 Despite a slowdown year-over-year in RTD dollar sales, the segment is still on pace to lead flavored alcohol in dollar sales growth for 2024, according to data from Bump Williams Consulting.

An Irish Cream can serve as a delectable, alcoholic dessert, but what about those non-dairy drinkers who still want a Bailey’s cocktail after dinner? New Jersey-based OATRAGEOUS is looking to offer an alternative with its new line of Oat Milk Liqueur.

🥥 OATRAGEOUS is launching with three varieties: Coconut, Espresso and Dairy-Free Bourbon Cream. All SKUs have a 14% ABV with no dairy, gluten or lactose and are made from non-GMO oats and bourbon.

🚚 Retailing for $27.99 per bottle, the brand is rolling out to liquor stores in Florida, Massachusetts, New Jersey, New York and Texas.

💡 Do note that it’s not the first plant-based cream liqueur. Dottie May’s offers its own oat milk-based take on the format, as does Hansen Distillery. Panther M*lk makes a line of bottled oat milk cocktails as well.

Less than a year after co-founding Texas-based spirits company Round 2 Spirits, the founder of Patrón (and the Paul Mitchell hair care line), has expanded his portfolio with another Texas-based distillate. 

• John Paul DeJoria announced yesterday the purchase of Waterloo Gin, made outside of Austin by Treaty Oak Distilling, for an undisclosed sum.
• The purchase is separate from DeJoria’s investment in Round 2 Spirits, the Texas-based spirits company founded in partnership earlier this year with former Southern Glazer’s Wine and Spirits (SGWS) leadership. 
• That company introduced Weber Ranch 1902 Vodka in May, a vodka distilled from 100% Blue Weber Agave, the source material for tequila. 
• Looks like DeJoria is betting on clear Texas spirits and the take-off of high-end gin, which is the only price segment where the category has been seeing growth.

Read the full story for all of the details.

Matt Roberts, the founder of groundbreaking instant coffee brand Cometeer Coffee, talks about how he disrupted the category by delivering a high quality drinking experience and how his constant desire to learn more has helped him become a better leader.

Listen to the episode now.