• 💽 Dr. Dre and Snoop Launch Still G.I.N.
• 🗝️ Nolet Distillery Family Member Goes NA
• ☘️ Shamrock Farms Puts $59M Into Milk Plant
• 🎃 Inside Pumpkin Spice Purchasing Habits
• 💰 Even After A $600M Exit, Peter Rahal Isn’t Satisfied. The Truth Is, He May Never Be.

We create customized beverage systems that feature our coffee, tea, and botanical extracts. We use premium raw materials, purified water and our patented process that captures highly concentrated extracts in one pass for exceptional flavor. Enhance your offerings with our functional ingredients and flavors to craft beverages as unique as your brand. Learn more

5-Hour Energy may have released a caffeinated hot sauce this summer, but, depending on where you stand, this may be even worse. 

5-Hour Energy’s billionaire founder Manoj Bhargava has long promoted his personal philanthropic efforts, but a Wall Street Journal investigation alleges that the entrepreneur used financial maneuvers and a close relationship with a popular Indian spiritual guru to obscure his true tax obligations from the Internal Revenue Service (IRS).

Bhargava could face one of the largest tax penalties in U.S. history, the article, published Tuesday, claims after he gave away a $624 million stake in 5-Hour Energy (parent company Living Essentials) to a Michigan charity, only to reacquire those shares through a separate company by issuing a promissory note vesting in 20 years.

That tactic, an IRS investigation later claimed, allowed Bhargava to inflate the size of the gift and to write off some $500 million in tax breaks, thanks to a provision in the agreement that the note would grow with the assessed value of the underlying 5-Hour interest as the company’s sales soared.

The story also examines Bhargava’s close relationship with Indu Rawat, a 68-year-old Indian spiritual guide and leader of the Divine Light Mission movement with whom Bhargava became close with in the 1970s.

Once 5-Hour Energy had made Bhargava a multi-billionaire decades later, he allegedly began supporting Rawat financially, including giving her a stake in the brand valued at $445 million, along with a $5.7 million New Jersey mansion for Rawat’s family, according to WSJ. The IRS attempted to collect taxes owed from transactions tied to Rawat’s stake in 5-Hour Energy, but lost in court earlier this summer.

The article also recounts how Bhargava and Rawat each maintain accounts at private Swiss bank Pictet. One day after receiving a $255 million dividend from the bank in 2013, Bhargava transferred the full amount to a Bahamas investment company controlled in name by Rawat. When Pictet flagged the transaction and asked Bhargava for further details, the bank reportedly “wasn’t satisfied” with his claims that it was a loan and that Rawat owned the account. 

This marks another chapter in Bhargava’s colorful history as a freewheeling entrepreneur, including a short and calamitous stint as the owner of Sports Illustrated last year. He’s also poured money into developing inventions to deliver energy and clean water to underserved communities; he’s currently fighting a separate case against federal tax collectors after the IRS disqualified several hundred millions of dollars in deductions related to those inventions.

No one wants their headshot next to a headline that reads “tax cheat,” naturally, but potentially bigger problems may be on 5-Hour’s doorstep soon. Last week, the U.S. Supreme Court declined to hear Living Essentials’ appeal of a lower court's decision which allowed wholesalers to sue the company over claims that they were undercut when 5-Hour Energy sold product to Costco at a discounted price. 

Go Deeper: Inside 5-Hour Energy’s Growing Pains

Dre and Snoop are at it again – but we’re not talking music. 

🍸 The hip hop legends and budding beverage entrepreneurs have released their second bev-alc collaboration, an ultra-premium gin, following the launch of a canned cocktails line earlier this year. 

🎶 Still G.I.N. by Dre and Snoop is a 42.5% ABV gin named for Dr. Dre’s hit single featuring Snoop Dogg, “Still D.R.E.” The gin release is part of the brand’s bet on a coming ‘gin-aissance’ in the U.S., with Gin & Juice By Dre and Snoop positioned as the ready-to-drink gateway for U.S. consumers to cozy up to the spirit. 

⭐ Gin & Juice is among the rising celebrity-backed RTDs, so we’ll be watching how the former On The Rocks team will apply their expertise to pushing forward a spirit category that has lost some of its luster recently.

Read the full story on BevNET for a deeper look into the new brand.

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. 

Thanks to innovative technology from industry leader Alland & Robert, Farbest Brands now offers Beyond Acacia®! This exclusive, easy-to-use gum acacia has high-density granules that help optimize beverage production – with benefits like improved solubility and high dispersion. Learn more

Carolus Nolet III, a 12th generation member of the Nolet family who founded their namesake distillery in 1691, is partnering with former Diageo commercial manager Jason Bowden to launch a new non-alcoholic beverage brand: ROLUS.

🥂 Sold in an 11.5 oz. can, ROLUS is a sparkling hydration drink with an NA cocktail positioning, touting “champagne-like bubbles” and “subtle hints of citrus and sea salt” in addition to 345 mg of electrolytes and 1 gram of plant protein.

💻 The brand is now available online direct-to-consumer and on Amazon, selling for $31 per 12-pack.

🗣️ What they said: "Our philosophy of genuine authenticity, deeply ingrained in our heritage, sets ROLUS apart from anything else in the non-alcoholic market. ROLUS started with finding the perfect ingredients to ensure a taste that makes our drinkers excited to crack open another can and share it with their friends and family." – Carolus Nolet III.

Shamrock Farms is investing $59 million into its Augusta County, Va. milk manufacturing facility, with plans to add new equipment, cold storage space and an additional production filling line.

⚒️ The project is expected to be completed by 2028 and is the second “significant” expansion of the plant since its opening in 2014, the company said.

💰 Shamrock Farms will also receive around $900,000 in grant money from Virginia programs in support of the project.

🐄 In other dairy news: Cornell University’s Center for Regional Economic Advancement is seeking applications from entrepreneurs for its next Dairy Runway cohort. The program involves a six-week online course in dairy business development, followed by a Kitchen Incubator that includes access to Cornell’s food processing facilities to create prototype products. Applications will be accepted until January 6, 2025.

Love it or hate it, the annual pumpkin spice craze is here to stay. According to a new report by consumer data company Numerator, one in ten U.S. consumers, or 12.3%, have purchased a pumpkin spice product so far this year. 

🤔 However, demand for the seasonal flavor appears to be dropping moderately, as only 5.8% of consumers purchased a limited-service restaurant (LSR) pumpkin spice coffee beverage (down 1.6 points from last year) and 6.5% purchased a pumpkin spice product in August (down 1.3 points from last year). 

📈 Spend per unit on pumpkin spice products has risen since last year, with grocery products increasing from $4.77 to $5.00 and LSR items increasing from $4.70 to $4.98. 

In an interview framed as a series of true or false questions, Peter Rahal, the co-founder of protein bar brands RXBAR and David, reflects on his obsessive work ethic and leadership style. He also talks about “the best business strategy” and what he means when he says that happiness is “irrelevant.”

Listen to the episode now.