Molson Coors made headlines this week when it announced that it agreed to purchase Kentucky-based distillery Blue Run Spirits, marking the beer giant’s first spirits acquisition and the formal launch of its Coors Spirits Co. business. It may signal more interest in straight spirits from wine and beer companies, as portfolios shift into total beverage platforms. 

But this isn’t the beer company’s first foray into bourbon: Molson Coors launched premium whiskey Five Trails in September 2021 and Barmen 1873 Bourbon a year later. As higher end whiskey drives spirits sales, the acquisition mirrors other recent moves by major spirits players. American whiskey is a particularly hot category: sales were by 10.5%, totaling $5.1 billion in 2022, and up 3.2% off-premise in the past 52 weeks ending July 15, compared to this time last year. 

For some perspective on the deal we chatted with Jeff Hopmayer, founder of the Brindiamo Group, a global leading provider of bourbon, whiskey, and other spirits that also offers consulting services, plus mergers and acquisitions direction in the adult beverage industry.

“I think that Coors and other spirits companies are looking to augment their offerings to stay current. So they're always looking for brands and opportunities to help them move their platforms,” Hopmayer explained. 

Fair enough, but why Blue Run?

“I know the team at Blue Run and they’ve just been exceptional: the brand is doing really well, the packaging is spectacular, it's very cool, and it's very vibrant,” he said. “I believe Blue Run is also bottled at Bardstown Bourbon Company, where I believe the Coors Five Trails product is also bottled, so it probably helps with some of the consolidation costs and things like that as well.”

As many beer companies transition into total beverage companies, spirit acquisitions from groups that were previously beer portfolios is a trend that Hopmayer believes will continue. 

“Certainly when we're looking at different clients and different buyers and sellers, we always think that any of the beer companies could be buyers for any of the things. So, I think that traditional distribution from 10 or 20 years ago has changed. 

Some rules have changed, the way they approach things have changed. And I think that's causing lots of these companies to look at what typically in the past would have been taboo or not part of their core, to now go into new categories to expand. Because they're all going to the same customers at the end, and delivering to the same places. So if they can create more pounds per stop it creates a great opportunity for them.”

Earlier this week, plant-based food and powdered drink brand Laird Superfood reported a net loss of $3.5 million in Q2 as it continues its turnaround efforts.  

• For the quarter ending June 30, the company saw net sales of $7.7 million compared to $8.7 million in the prior year period. Wholesale contributed 46% of total net sales, increasing 2.6% year-over-year.
• Meanwhile, ecommerce accounted for 54% of total net sales, a year-over-year decrease of 20.1%, reflecting a hit to Laird’s Amazon sales tied to a rancid batch of coconut milk powder the brand received from a supplier. During a call with investors, CEO Jason Vieth said he expects the out-of-stock issue to be fully resolved in Q3. 
• Looking ahead, the company now expects FY 2023 net sales to be in the range of $34 million to $37 million compared to its previous guidance of $37 million to $39 million and gross margin in the range of 27% to 29% excluding any one-time extraordinary costs.
• During a call with investors, CEO Jason Vieth said the company has continued to make “strong progress” against its strategic initiatives and toward breakeven profitability despite the fact that turnarounds “are by nature an unsteady progression.” 

Learn more by reading the full report on BevNET.

Although overall revenue remained down, Jones Soda reported sales of its cannabis business roughly doubled in its Q2 2023 earnings report this week.

• Total revenue in the quarter was $4.8 million, down from about $6 million in 2022. CEO and president David Knight said the decline was due to lapping a one-time stocking event with the brand’s largest retailer last year. That event had a similar knockdown effect on the company’s Q1 earnings earlier this year.
• Net losses improved to around $1 million, compared to $1.4 million last year.
• The company’s cannabis brand Mary Jones reported around double its Q1 revenue to $400,000. The brand added two new flavors in two product formats during the quarter, Knight said, and the products are on track to add three additional states by the end of the year.
• “We believe we have only begun to scratch the surface within the cannabis industry, and we are highly confident in our ability to unlock the significant upside we see in this business to further bolster our consolidated financial performance,” Knight said.

From traditional energy drinks to tea-based pick-me-ups, caffeinated beverages are all the rage. This week, three brands announced increased distribution in many parts of the country.

• Jack Harlow-backed caffeinated sparkling beverage PHOCUS is entering Vitamin Shoppe locations with its four core flavors as well as an exclusive Pineapple variety through September.
• MaKa, makers of canned wheatgrass infused with yerba mate and guayusa, have increased their visibility in the SoCal region with chain-wide distribution with Gelson’s Markets. The new partnership comes after the brand went national in Sprouts Farmers Market at the beginning of the year.
• Spider Energy hit the Michigan International Speedway this past weekend as it entered the Great Lakes State. Spider’s Florida-based parent company Golden Grail revived the energy brand last year and has partnered with Imperial Beverage in Michigan to gain a foothold in the Midwest.

Read the full story on BevNET

In an interview with AgFunder's Elaine Watson, the Chilean company's U.S. general manager, former Chobani executive Meredith Madden, said NotCo pulled its 64 oz cartons out of refrigerated dairy sets in around 7,000 stores in January in favor of a pivot into shelf-stable with 32 oz cartons alongside its existing 8 oz 4-packs currently in about 3,500 stores. 

• According to Circana data, NotCo's refrigerated milks generated around $2.6 million in MULO sales through May 16, representing a 2.8 share of the refrigerated plant-based milk category (excluding oat, almond, coconut and soy).
• Madden admitted the shift has required a restart of sorts, as conventional distribution dropped and competitive dynamics changed, but with Amazon traction ticking up, burgeoning opportunities in foodservice and more plant-based products on the way, she sees 2023 as "year one for NotCo in the US."

As seen in the two recent examples of Minnesota and New York, individual states' approach to regulating a new generation of hemp-derived THC-infused edibles and drinks can vary wildly. Virginia falls on the conservative end of the spectrum: according to local media reports, the state has begun issuing fines to businesses in violation of its new law, effective July 1, which put a 0.3% THC limit on hemp-derived products. Five businesses received letters of non-compliance in July, with fines ranging from $13,000 to $97,500, per the Virginia Mercury reported. The move comes as state governments around the country act to address the rise of hemp-derived THC products, which are legal under the 2018 Farm Bill. 

Go Deeper: Minnesota Makes a Case for Easy Access Cannabis

Less than two months after Diageo severed ties with Sean “Diddy” Combs over a heated legal dispute, the global spirits company is parting ways with another celeb: former soccer star David Beckham will step down after a ten-year partnership as the face of Diageo’s Haig Club Whisky. 

• Unlike the end of Diddy and Diageo’s 15-year business relationship, the partnership appears to not have ended on bad terms. Social media channels for the brand have now been set to private. 
• Other high-profile figures in the spirits business have emphasized the importance of their products standing on their own, and some investors are skeptical of partnering with celebrities whose status can fluctuate and make or kill a brand. 

As the avalanche of celebrity spirits continues, are other recent multibillion dollar legal battles cautionary tales for partnerships?

We are thrilled to announce that we will be hosting two food and beverage industry meetups this fall. These gatherings will invite the community into our offices for conversation and light bites. Read the story.