• 🏛️ Brands Take UNFI To Court
• 📈 Primo's Strong Q3 Results
• 🛗 The Latest On Elevator Talk
• 🏄 Laird Superfood Sales Up 28% 
• 🚪 Jones Soda CFO Exits
• 🚛 Coke Florida’s New Distro Center
• 🌡️ Celsius Goes Vertical And M&A Trends

Molson Coors has acquired a majority stake in energy drink brand ZOA in a $53 million cash transaction, expanding its growing non-alcoholic beyond beer portfolio and adding to rising M&A interest across the energy space.

The deal, announced this morning during Molson Coors’ Q3 earnings call, closed last month. The transaction will be recorded as a business combination.

What they said: “With the support of its co-founder, Dwayne ‘The Rock’ Johnson, we have built a strong foundation for ZOA over the past three years, and it's time to pursue the next stage of growth and scale. Taking this increased stake allows us to lead the entirety of the brand's marketing, retail and direct-to-consumer sales development as we drive brand awareness and distribution, leveraging the strength of our network.” - Gavin Hattersley, CEO of Molson Coors, speaking on a conference call this morning 

At its launch in 2021, ZOA was expected to drive Molson Coors’ beyond beer ambitions outside alcoholic drinks. ZOA’s introduction also came just a few months after Molson Coors signed a 10-year distribution agreement with another major non-alcoholic beverage marker, La Colombe Coffee.

Yet after reporting it had passed $100 million in sales in its first year, ZOA has since contracted; sales declined 6.1% to around $61 million (Total US - multi-outlet+ with convenience) in the 52 weeks ending September 6, according to data from Circana. 

Over the years, the core line has been rebranded and reformulated to up the caffeine and cut sugar (along with a move from 16 oz. to 12 oz. cans), and a second pre-workout line of RTDs and powders, called ZOA+, arrived in 2022. 

Still, Molson upped its initial stake in the brand last year and is deploying Johnson in a major ad campaign unveiled in February. 

Check out the full story on BevNET for all of the deal details.

Grab a favorite beverage and settle in for a lively exploration of today's hottest category trends. In this new series, Cargill subject-matter experts spill the tea on emerging trends, new research and innovative solutions to help you shake up your corner of the market. Learn more

A class action lawsuit has been filed against UNFI by NYSM Organics LLC and other similarly situated suppliers, which claim the natural food distributor delays paying invoices to its food brand customers. The suit contends that undue financial strain is being placed on small and emerging natural food companies who have been forced to use the distributor if they want to sell their products into key retailers like Whole Foods Market.

💬 The distributor has been accused of “unlawfully taking ‘prompt payment’ discounts on invoices even when payments are delayed, justifying these deductions by citing negative account balances that arise from UNFI’s own billing practices,” claims Anapol Weiss, the law firm filing the case on behalf of NYSM Organics, in a blog post.

😡 The suit addresses a long-standing complaint centered on UNFI’s “alleged manipulation of payment terms” that has been expressed by brands over the years.

👎 The new complaint comes after the implementation of UNFI’s Simplified Supplier Approach, which many industry stakeholders called a “money grab” when it was announced due to the company’s failure to show positive growth to shareholders.

Get ready for our November Community Calls! This month, dive into data-driven promotion strategies, explore on-premise and off-premise trends for RTD alcohol, discover how women’s health trends are shaping the CPG landscape, understand the impact of ingredient trends and inflation on growth, and gain insights into the current state of brand investment. All of our October calls are free and open to the public – just register in advance and mark your calendar.

As it prepares to officially close its merger with BlueTriton Brands tomorrow, Primo Water Corporation announced a “fantastic” third quarter earnings report today, as revenue increased 8.8% to $511 million in the three-month period.

• Primo expects that it will begin trading on the New York Stock Exchange under the ticker symbol PRMB on Monday.
• The business also announced adjusted EBITDA of $125 million, up 11.4%, in Q3, while gross margin grew 20 basis points to 64.7%.

🗣️ “The closing of the transaction will mark an exciting new chapter as we bring together the strengths of both legacy companies,” said Primo CEO Robbert Rietbroek in a statement. “I am pleased with the tremendous progress we've made in shaping the future of Primo Brands. Our teams have been intensely focused on ensuring we 'hit the ground running' post-close.

The latest installment of Elevator Talk features leaders from The Original Southside, Kyleigh’s Lemonade, Sozu and Neotein.

Watch founders and CEOs introduce their brands and provide a recap of recent news and updates. This week’s special co-host is Courtney O’Brien, the founder and managing director of The Outlier Initiative, who shared her thoughts, questions and feedback with the participants. 

Watch the full episode now.

Laird Superfood notched record net sales in the third quarter driven by growth in ecommerce and wholesale channels across all of its core categories including creamers, coffee and hydration products. 

• Net sales increased to $11.8 million, up 28% from $9.2 million in the prior-year period.
• The company posted a net loss of $0.2 million, compared to a loss of $2.7 million the year before.
• The brand’s ecommerce sales increased 42% year-over-year, with sales on Amazon.com up 133%; wholesale sales grew 13%, driven by improved velocities and expanded distribution in grocery stores, in addition to more efficient promotional spend.
• For the full year, net sales are expected to be in the range of $43 million to $44 million, marking growth of 26% to 29% over 2023. Gross margin is expected to improve by 11 to 12 points to 41% to 42%. 

💬 “It is a clear trend that consumers continue to accelerate their focus on the impact of food ingredients to their own health and wellness, and I believe that Laird Superfood is now among the best positioned brands to support them on this journey,” said CEO Jason Vieth in a statement.

Just over a week since the exit of CEO David Knight, another c-suite executive is leaving Jones Soda. Director of finance and interim CFO Joe Culp has resigned from the company, according to an announcement today.

• Board member Ronald Dissingher has been named interim CFO until a permanent replacement can be found.
• Culp initially joined Jones Soda in 2019 as controller and became director of finance last year. The company said he is leaving to “pursue other endeavors.”
• While Jones has now seen multiple executives exit in under a month, the business has seen revenue continue to grow. Its most recent quarterly earnings report in August reported revenue up 49% year-over-year with a 3% improvement in gross margin.

Regional bottler Coca-Cola Beverages Florida LLC opened its new $10 million sales and distribution center in Ocala, Fla. this week.

🏭 The 28,000 sq. ft. facility will serve as a distribution hub for the region around Ocala, servicing customers in Marion, Sumter, Citrus, Hernando, and Lake counties. 

🚚 The facility will employ over 100 individuals across CDL drivers, sales account managers, sales merchandisers, and warehouse roles.

🔊 What they said: “[Our Team is] ecstatic about the location of the new facility bringing them closer to home, continuing to offer world-class service to our customers in a more efficient way, and opportunities to now host community partners.” – John Horner, Coke Florida’s territory general manager for Ocala

On the latest episode of CPG Week, the team talks about Celsius’ aspirations to go vertical, how a variety of smaller acquisitions across food nod to M&A market trends and what could be driving the growing appetite for new investment and consolidation in CPG.

🏭 How do energy brands compete in an increasingly crowded category? Celsius is building controls through its supply chain with a vertical integration model after acquiring its co-manufacturer Big Beverage’s North Carolina production facility.

🤝 The team discusses a number of mid-range acquisition deals like FITCRUNCH being picked up by 1440 Foods’ portfolio, Pipcorn and Spudsy coming together under UpSnack Brands, and new owners for Del Real Foods and DeIorio Foods.

🤔 The discussion then turns to how these deals could signal a trend in M&A markets, infused with top takeaways from a recent CoBank market report.

Listen to the episode now.

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