• 🏃🏼‍♀️ Can Ketones Shake Up Functional Beverage?
• 💸 Beverage Manufacturer Nidra Invests In Capacity
• 🦾 Marketing: Beverages Hit the Gym, and the Ramps
• ☕ Hawaii Tightens Kona Coffee Labeling
• 💰 What’s With All The Recent M&A Deals?

It’s earnings season folks. The numbers are rolling in, stacking up and, for others, sliding down. Let’s take a look at how Black Rifle, Zevia, SunOpta and Laird performed this past quarter.

☕ Black Rifle reported a robust 51% y/y wholesale growth in the Food, Drug and Mass (FDM) market, despite softening performance from its brick-and-mortar cafes during Q1 2024.

• Net revenue grew 18% to $98.4 million, primarily driven by the strong wholesale performance.
• DTC revenue dropped 11.4% to $32.6 million in the first quarter.
• Revenue from BRCC “Outposts” (on-premise cafés) slid 19.4% to $5.4 million.
• Gross margin was 42.9%, driven by a shift in product mix, productivity improvements in ready-to-drink (RTD) products, decreasing warehousing costs, and lower green coffee costs.

BevNET Insiders can access the full recap for more details on what contributed to these results.

🥤 Zevia’s soft top-line numbers overshadowed progress made in recovering from temporary distribution losses and a forthcoming move into DSD, according to the company’s latest Q1 2024 earnings report. 

• Net sales declined 10.4% YoY to $38.8 million.
• Volumes (3 million equivalized cases) also declined in the quarter.
• Adjusted EBITDA garnered a loss of around $5.5 million. 
• Gross profit fell -11.9% ($17.7 million). 
• Gross profit margin was up 5 points from the prior quarter, thanks mainly to a “return to more competitive promotional levels.” 

Read the full recap for more on Zevia’s upcoming improvement efforts.

🥛 SunOpta reported double-digit gains in both revenue growth and gross profit in its Q1 2024 earnings report yesterday; the plant-based milk supplier said it is feeling “encouraged by the progress of our capacity investments.”

• Revenue was up 18% to $182.8 million, driven by 23.5% volume/mix growth and strong volumes in oat milks and creamers, protein shakes, broths, teas, and fruit snacks.
• Gross profit rose 31.8% to $31.7 million versus $24.1 million in the prior year period. 
• Gross profit margin was 17.4% compared to 15.5% in Q1 2023.
• Operating income reached $10.2 million. 

Check out the full recap for all the details on the company’s updated FY24 outlook.

🏄 Laird said its “turnaround story has officially become a growth story once again” after posting strong gains across brick and mortar and retail channels. Here’s a run of the numbers:

• Net sales grew 9.9% in Q1, up from $9.2 million in Q4 2023.
• Wholesale sales were up 10% year-over-year, contributing to 41% of total net sales.
• Ecommerce sales grew 33% year-over-year, contributing to 59% of total net sales.
• Amazon alone grew 48% in the period while D2C was up 25%; about half of D2C sales came from subscriptions.
• Gross margin was 40%, compared to 40.4% in Q4 2023 and 23.1% in Q1 2023. 

Get all of the details on this turnaround in the full story on BevNET.

Once relegated to the supplement shelves, ketone-enhanced beverages are starting to make their way into specialty retail and independent convenience stores. Though the keto diet heyday may have waned, ketone drinks are trying a plethora of come-ons to get consumers to pick up these functional drinks

⚡ Tapping buzzy retail opportunities in Erewhon in California and Equinox fitness centers in New York, KEY is looking to sit “as close to Celsius” as possible and shave off some market share from better-for-you energy.

🎶 As festival season gets roaring this summer, Holy Water is tapping into the trend of alcohol reduction and alternatives with its ketone and functional mushroom-infused drinks.

💪 Brands like KetoneAid, Kenetik and KetoneIQ are still positioning towards athletic enhancement with an eye towards product innovation and format to bring more consumers under the functional umbrella.

BevNET Insiders can read the full story and learn how this functional beverage subset is raising consumer awareness.

Chesapeake, Va.-based beverage co-packer Nidra Packaging announced this week it had secured a $3.5 million Small Business Loan (SBA) to increase capacity and expand its facility with new equipment. Once completed, the renovated facility will cover 75,000 sq. ft. and include a new 15,000 sq. ft. fulfillment center.  

🧃 Nidra produces spirits, seltzers, non-alcoholic beverages, functional drinks and coffee-based products. The capital will go towards new fillers, a tunnel pasteurizer, a dedicated brewhouse for tea production and a high-efficiency spirits packaging line, among other upgrades.

💭 "The new enhancements to our facility will empower us to increase our daily output by over 8 times, all while maintaining the flexibility to accommodate smaller clients with swift runs on our existing lines,” said founder Joshua Canada.

Sports and beverages go hand-in-hand, and the connection is center to some of the latest new marketing campaigns announced by brands this week. Let’s take a look:

🤸 Sports nutrition brand Don’t Quit launched a new video in its Persevering Profile series, featuring a conversation between brand partner and celebrity Peloton instructor Kendall Toole and amateur MMA fighter Jose Rubio, who witnessed his father’s death in a car repair accident. Rubio credited the Alta Warrior training program with pulling him out of a “deep depression.”

• The Persevering Profile series aims to promote Don’t Quit’s true-to-the-name ethos of powering forward in the face of adversity. The first video in the series, released earlier this year, featured NFL player and Don’t Quit investor Damar Hamlin.

🛹 Jones Soda has long linked itself with skate culture, so its new multi-year deal as the Official Sponsor of Street League Skateboarding’s SLS Futures youth program certainly looks like a pro move.

• SLS Futures is a 10-week program at action sports camp Woodward. Jones will have a full integration in the camp with activations, content and branding throughout the 2024 and 2025 seasons.

Hawaiian lawmakers passed a bill to protect the Aloha State’s coffee industry this week. House Bill 2298 CD1 dictates that, by July 2027, all coffee blends bearing the name of any growing region in the state must contain at least 51% beans from that region by weight.

🚜  The move is a significant increase to the current standard, set in 1991, that requires only 10% by weight; the update intends to protect the regional terroir of Hawaiian coffee, including the popular Kona region, and aims to prevent false labeling practices.

📁 Late last year, the Hawaiian coffee industry prepared an economic report for legislators that researched and analyzed the fiscal impact of changing the label requirements. 

The CPG Week team gathers all in-person for the first time ever first, to taste some ketone beverages, and then to talk about the slew of M&A activity seen throughout the CPG industry in recent weeks. 

🥕 Senior reporter Lukas Southard kicks it off with a deep dive into Bolthouse Farms’ decision to split its agriculture business from its CPG brands as it frees up debt to eye new acquisitions.

💪🏾 The team talks about Our Home’s most recent addition to its better-for-you snack brand portfolio and why manufacturing capacity is becoming a theme in CPG.

🏭 Did you say manufacturing? Senior reporter Brad Avery walks the team through his reporting on the merger of two snack bar makers and why brands are still selling high on protein.

Listen now on Nosh.com and subscribe to get a fresh episode every week.

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