Canadian sports drink brand BioSteel is heading for a court-supervised sale after parent company Canopy Growth's decision to cut ties amidst painful cash burn and growing losses. 

• BioSteel’s sagging performance has hurt the parent company's profitability and cash flow, representing approximately 60% of the Company's Q1 FY2024 Adjusted EBITDA loss.
• "We believe the brand remains an attractive asset, it does not align with Canopy Growth's cannabis focused asset-light strategy," said David Klein, Chief Executive Officer at Canopy.
• BioSteel has requested and received a stay of proceedings from the Ontario Superior Court of Justice that also covers its two U.S. LLCs, BioSteel Sports Nutrition USA and BioSteel Manufacturing. KSV Restructuring Inc. has been appointed as BioSteel's monitor for the sales process.
• Removing the operating loss and cash burn from BioSteel's business, Canopy is projecting positive Adjusted EBITDA across its other divisions "exiting FY2024."

After an impressive few years that drew some comparisons to the early rise of BodyArmor, BioSteel's momentum was derailed this year by a combination of overstating sales (cue SEC investigation) and an internal review which sparked a leadership turnover and terse talk of "legal remedies" to recover damages.

But today's decision marks a sharp turn, at least in public rhetoric, from Canopy, which just a few months ago was touting gross margin improvements, promotion cuts, new supplier contracts and a warehouse model that could eliminate large fixed cost-obligations and trim shipping spend.

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Canadian energy drink brand GURU’s Theanine Fruit Punch flavor helped drive sales according to the company’s Q3 2023 earnings report released today.

• Quarterly net revenue was up 15% year-over-year to $8.9 million, with gross profit of $4.5 million thanks to sustained strong margins.
• Net losses were down significantly, just $3 million compared to $6.5 million in 2022.
• The relative success of the functional Theanine Fruit Punch flavor in the Canadian market has the brand gearing up to launch the SKU in the U.S. this December, alongside another “yet-to-be-announced” innovation.
• Online sales, including a “record performance” during July’s Amazon Prime Day event, were big boosts to the better-for-you energy brand. GURU also announced that its Tropical Punch has become its top selling flavor in the U.S. with particularly strong performance in the California club channel.
• The energy drink brand also announced that it has reached a mutual agreement with chief revenue officer Rajaa Grar (formerly of Nutrabolt) to end her tenure at the company after just six months.
• Guru introduced Toronto Raptors rookie Gradey Dick as its newest investor and brand ambassador earlier this week.

Oh, you fancy, huh? Whiskey experienced significant growth in fine dining establishments, with a 39% increase in the period between Q3 and Q4 of last year, according to a new report from CGA. 

• In a deep dive on international whiskey subcategories, the data revealed that Japanese whiskey emerged as the preferred subcategory in the fine dining setting, chosen by 35% of on-premise drinkers, closely followed by Scotch (32%). 
• The report also spotlighted a significant increase in value of whiskey-based cocktails, whose velocity rose by 35% between Q3 and Q4 of 2022. The surge played a pivotal role in the overall growth of total cocktails, which saw a 7% increase during the same period. 
• Despite its smaller market share, Japanese whiskey still presents opportunities for operators: its drinkers tend to visit the on-premise more frequently than their peers as 62% consume it as their preferred whiskey when out on a weekly basis. 
• That’s compared to the weekly consumption rate for international and other whiskey categories, which hovers around 50%.

The second Sprout Beverage accelerator cohort has been announced, with the invite-only workshop offering opportunities for adult beverage brands across categories to learn how to build a successful business and to pitch for $100,000 in investment at the end of the three month program.

• The 13 brands include: Mezcal Locale, Inspiro Tequila, Topango Gold (aged rum), Elder’s Cut Meadery, Genuine Spirit Company (Kentucky bourbon), Cote de Femme rose, Shoal Draft Cider, Viniala, Wheyward Spirit (upcycled spirit company), Orejen Genever, Cooks Mill (bourbon whiskey), Vermont Spirits, Bluebird Hardwater
• Over the course of the three months, the Sprout Beverage cohort meets for two days (the first and third meetings happen in-person in Chicago) in “bootcamp type of seminars speaking about marketing, legal, finance, label design, customer interaction” and generally how to sell within the three-tier system, Rosen told BevNET.
• Beverage brands make an average of $100,000 in mistakes over the course of their first three years in business, Rosen said. “ What Sprout does is says: Here is the proven path to go forward. Here's what to avoid. Here's what to engage in. And by avoiding $100,000 in mistakes, technically, you're much better company going forward.”

The Sprout Beverage accelerator is part of Growth Beverage’s four verticals which include sales and marketing company BevStrat, $100 million debt financing business Algoma Capital and $250 million private equity firm InvestBev.