• 💵 Lucky Energy Closes $11M 
• 🤝 PepsiCo To Acquire Siete Foods
• 🌴 Palm Tree Crew Invests in Cove
• 👫 People Moves
• ☕ California Boosts Up Cannabis Cafes

A strike by 50,000 union workers at 14 major ports across the East Coast and Gulf Coast may or may not be devastating for the U.S. food industry – depending on how long it lasts.

As of 12:01 a.m. ET this morning, commercial cargo traffic at some of the supply chain’s most critical points is officially offline, after negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) failed to produce a new contract. If you’re interested in what’s at stake for workers and management, CNBC’s Lori Ann LaRocco has done some excellent reporting and has a pretty thorough recap of the current outlook here.

What does this mean for CPG? First and foremost, if you have cargo on its way through Boston, New York/New Jersey, Philadelphia, Wilmington, N.C., Baltimore, Md., Norfolk, Va., Charleston, SC., Savannah, Ga., Florida (Jacksonville, Tampa or Miami), New Orleans, Mobile, Ala., and/or Houston, Texas – be prepared for delays.

For the immediate short-term, some contingency plans are already in effect. Logistics experts cited on CNBC noted that East Coast-bound cargo has been moved to the West Coast in anticipation of collective labor action; for her part, New York Governor Kathy Hochul issued a statement vouching her state’s own preparations for medical suppliers and grocery stores (translation to consumers: there’s no need to stockpile milk and grilled cheese). Some traffic will be rerouted to rail and air freight – expect those rates to tick up in response. 

The White House may also weigh in, though President Biden has promised he won’t use federal law to force union members back to work. Could the loss of around $5 billion a day, roughly 6% of the national economy, according to a JPMorgan Chase analysis cited in the New York Times, possibly change his mind? Elsewhere in D.C., the Department of Transportation put out a statement calling for “all parties to… negotiate in good faith—fairly and quickly.” 

Of course, if negotiations remain stalled, that’s a different story. Adam Lines, economist at Moody’s Analytics, told CNBC that food, along with cars, will be the most impacted industries, and even a slight boost in inflation could spook the Fed to tread carefully regarding interest rates. Walmart is particularly exposed due to its reliance on import traffic at East Coast and Gulf ports, with Amazon, Folgers, Heineken and Pepsi also on the list. As imported perishable foods and produce risk spoilage, the grocery price for fresh food may climb; at the same time, U.S. farmers will have to adjust their strategy if exports are restricted for an extended period.  

On a macro level, it’s another gut punch to the East Coast and Gulf supply chain, already battered this year from the Francis Scott Key Bridge disaster, the CrowdStrike outage and Hurricane Helene just last week. More profoundly, it sets up union workers versus automation as the defining fight for the future of the U.S. shipping industry; talks between ILM and USMX broke off back in June due to a dispute on that very topic. With some of the busiest U.S. ports ranked among the least efficient in the world, maybe a little automation is a good thing? 

Even once an agreement is reached, it will take some time for port operators to bring terminals back online, similar to resuming after a natural disaster. Then they’ll have to start directing traffic. In the meantime, there’s not much the ports can do besides ask for “patience and understanding” from shippers. 

Are you affected by the port closures? We want to hear from you. Contact us at news@bevnet.com.

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Feeling lucky? Los Angeles-based Lucky Energy (formerly Lucky F*ck Energy) is after closing $11.75 million bringing its total investment to-date to $25.5 million. The round was led by Brand Foundry with additional capital from previous investor Imaginary Ventures.

🤝 Sapphire Sport and Sugar Capital are new to the brand’s cap table; the former is expected to bring expertise to help Lucky line up sports and entertainment partnerships.

🤑 Launched by Kate Farms founder Richard Laver in August 2023, the drink maker secured $4 million in seed investment from Imaginary Ventures in November 2023 and then added $8 million from Brand Foundry in April 2024.

🙊 This April, Lucky Energy rebranded, removing the expletive but still marketing around its rebellious identity by focusing on its founder story of resilience and triumph over tragedy. 

📊 Differentiating in the competitive energy category is key especially as sales have softened under inflation and volumes have been sliding all summer, according to NielsenIQ scanner data.

BevNET Insiders can access the full story for all of the details on Lucky’s raise. 

Get ready for our October Community Calls! This month, learn how bootstrapped brands can harness PR to boost DTC sales, explore inclusive hiring practices, discover the real impact of viral moments on brand growth, get insider tips on retail media strategies, and understand how culturally centered brands can scale successfully. All of our October calls are free and open to the public – just register in advance and mark your calendar.

PepsiCo announced this morning it has entered into a definitive agreement to acquire Mexican American food brand Siete for $1.2 billion. Here’s what we know:

• The transaction is expected to close in the first half of 2025, pending regulatory approval and customary closing conditions.
• The decade old company produces a broad assortment of tortillas, salsas, seasonings, sauces, cookies, snacks and more that are sold in 40,000 grocery stores, club stores and organic food retailers nationwide. 
• The Austin, Texas-based company had $400 million in annual retail sales in 2023, according to the Austin Business Journal.

💬 What they said: “We hope this next chapter for Siete serves as inspiration for other Latino businesses, showing that it’s possible to build a thriving brand that honors our heritage and celebrates our culture.” - Miguel Garza, CEO and co-founder of Siete Foods, in a press release

Check out the full story.

Lifestyle brand Palm Tree Crew is the latest investor in functional CSD brand Cove Soda, and it has enlisted a slate of celebrity investors to support the new partnership.

🌅 Founded in 2020 by DJ Kygo and his manager Myles Shear, Palm Tree Crew sells a branded clothing line, hosts music festivals and recently opened its first hotel in Miami.

🌠 The Cove investment brings in a number of entertainers and businessmen, including Chris Rock, Miles Teller, The Chainsmokers, Diplo, Michael Rubin, Ryan Tedder and Mike Meldman.

🏖️ Cove was founded as a kombucha brand in 2016 and added functional sodas alongside a rebrand in 2022. The company no longer lists kombucha on its website, but has expanded its soda offerings to 12 flavor varieties.

Read more on BevNET for all the details about the new partnership.

New month, new gigs. Here’s some of the latest personnel moves from around the beverage industry:

🚰 Former Drizly CEO Cathy Lewenberg has found a new chief executive role at Bevi, a “Smart Water Cooler” manufacturer with over 6,000 customers across North America.

🧠 Joe Garza, former chief sales officer at Humanitea, has joined Kin Euphorics as its new VP of sales.

🌝 Oliver Shuttlesworth, co-founder of Mayawell, is stepping down as CEO and moving away from day-to-day operations at the prebiotic beverage brand. He declared himself a “free agent” on LinkedIn seeking freelance and full-time opportunities.

🏵️ ACME Wine Company founder David Thomas is moving to hemp as the new COO of Drink DELTA, a THC-infused seltzer brand.

🍋 After 15 years at Monster Energy overseeing accounts, Gui Weaver has joined Lemon Perfect as its chief sales officer.

The best part about coffee shops in Amsterdam? They also sell coffee, if you know what I mean. That’s sort of the idea behind Assembly Bill 1775 in California, which gives cities permission to allow cannabis dispensaries and lounges to begin serving non-infused drinks and hot food, plus host performances and events.

🥂 For dispensary shoppers, this means you can finally get a bottle of water to deal with that cottonmouth, though for some lawmakers, the measure acts as a defense against the surging black market by attracting customers to regulated channels. Supporters also include celebrity weed advocates like Bill Maher, Woody Harrelson and John McEnroe – all partners in the plush West Hollywood lounge The Woods.

🌬️ The impact of second-hand smoke on dispensary employees has been a sticking point to the bill, and the main reason Gov. Gavin Newsom vetoed a previous version. The updated text requires business owners to supply ventilation masks to workers upon request and also gives cities the option to impose ventilation standards as a condition of granting a license. Those systems must be powerful enough to stop smoke or odors from “any other part of the building,” let alone outside.

Go Deeper: How CPG Will Play A Part In On-Premise Cannabis