• ​​🥃 Craft Spirits Face Historic Decline 
• 🧑 PepsiCo’s Jim Lee Goes To Target and More
• 👟 Nebraska Boosters Brewing NIL Booch
• 📚 What We’re Reading
• 🤝 Co-Brands, Sugary Licensing Deals & Cannabis-Infused Fitness Drinks

Cognizin® is a premium nootropic ingredient for focus and attention ideal for beverage formulation. Containing a patented form of citicoline, it helps supply the brain with essential nutrients to promote cognitive health. Cognizin® overcomes many common formulation challenges by offering purity, stability, and solubility. Learn more

It might seem obvious that lower-alcohol wines are positioned towards the sober-curious or moderating consumer, but emerging brands are capitalizing on the success of non-alc to flip the script on low-ABV vino.

For a while most of the low-ABV options by bulk wine producers like Cupcake, Meiomi and Kendall Jackson have been marketed as “diet” or “low-calorie” to consumers. Yet, a couple NA winemakers are experimenting with keeping some alcohol in the bottle to bring more recognizable flavors to the table.

Launched last month from Austin, Texas-based NA producer Surely, Arlow Wines hit the market with red, white and rosé blends all clocking in at 6.5% ABV and sold for around $22 per bottle. The brand is catering to consumers who might be “zebra-striping” (a clever way to say moderating alcohol-intake) their way through a night out.

Wine has always been the toughest adult beverage to make palatable when the alcohol is removed because the dealcoholization process removes a lot of the nuanced flavors and aromas.

For Brandon Joldersma, CEO of Arlow and Surely, wine occupies a “tough middle ground” among the alcohol-reduction community because many NA options are just not meeting the expectations of regular wine drinkers.

Low-ABV offers an opportunity to keep some of the recognizable flavors in the bottle while also serving some of the same experiences and health benefits of moderating drinkers. Though this subset of consumers might be small, wine is the strongest performer in the low-alcohol marketplace, according to IWSR, with the industry group forecasting 12% CAGR volume growth between 2023 and 2027.

The global market for the low-alcohol wine segment is projected to increase to $4.1 billion by the end of 2034, according to market research from Fact.MR.

Ask any low-ABV spirits brand and you will hear that carving out terrain on-shelf between full-alcohol options and the NA varieties requires patience and, likely, a healthy dose of consumer education.

But the adult NA category continues to grow, with much of it dominated by Millennial consumers. The cohort made up about 59% of no-alcohol wine sales in April 2024. Whether those consumers eventually work their way up to moderate-alc products will be interesting to watch.

Insiders can learn how Arlow and an ultra-premium winemaker are approaching the opportunity in low-alcohol wines on BevNET.

In 2023, U.S. craft spirits faced the first dip in sales, volume and share in recent history according to data from the 2024 Craft Spirits Data Project. 

• Despite the decline, the number of active craft distillers in the U.S. still grew 11.5% in 2023 to reach a total of 3,069 producers. 
• California, Washington, Pennsylvania, and Texas saw the highest growth in new distilleries, while New York saw a dip of 5%. The increase is likely due to a larger trend of small businesses opening after a period of economic decline. 
• While the industry in general is facing a slowdown, the data illustrates where the 65 craft distillery closures so far this year may create volume losses, and how limited market access may be pushing even large to small distillers to focus on their home states.

BevNET Insiders can access the full report recap. 

Executives are hopping around this fall. Here are the latest people moves from around the CPG industry.

🎯 Target has named Jim Lee as Chief Financial Officer, a 25-year veteran of PepsiCo where he most recently served as deputy CFO.

🖌️ Former 100 Coconuts CMO Monica Fleury is launching her own firm, Fleurish Marketing LLC, seeking to work with brands to aid in their marketing efforts.

🔫 Black Rifle Coffee Company has appointed Matt McGinley as VP of Investor Relations. He previously spent nearly two decades in consumer equity research at firms including Morgan Stanley, Evercore, and Needham.

🌱 Former Clif Bar chief financial and strategic officer Hari Avula has joined the board of directors at Guayakí.

🌄 SunOpta has named Hunter Amenities International CEO David Lemmon to its board of directors.

Leverage our global supplier network! We specialize in importing tropical and exotic fruit ingredients. Oranges are an extremely versatile fruit ingredient that is vibrant in color and has a juicy, refreshing flavor. Our fruits are available in a variety of formats and can be organic certified. Learn more

After the door to lucrative NIL agreements was kicked open a few years ago, student athletes have been on the hunt for products (and beverages, specifically) to endorse. But the reverse is happening in Nebraska, where local kombucha maker Ensign Beverage Company is producing a new brand of brews of which proceeds from sales will go towards supporting The 1980 Initiative, a group that helps Nebraska student-athletes with NIL deals.

🍒 The brand, 1890 Nebraska Kombucha, is launching in 12 oz. cans in one flavor – Champions' Cherry Limeade, giving vibes of “tart cherry meets traditional black tea kombucha with just a touch of sweetness,” per Ensign co-founder Jessi Hoeft – that the company said was inspired by requests from University of Nebraska volleyball players. It’s rolling out at stores in Lincoln, and will also be available in kegs, because it's college.

🏆 While individual beverage brands continue to cut deals with students athletes from across the spectrum of college sports, the maturing NIL ecosystem is seeing the rise of booster collectives like The 1890 Initiative that can bring deeper resources or stronger leverage: recall natural energy drink brand Yerbae’s partnership with Penn State group Happy Valley United last year.

The CPG food and beverage industry makes plenty of headlines beyond our own coverage. Here’s some recent stories that caught our eye:

🍹 Are customized drinks getting “out of control?” The New York Times took a look this week at on-premise beverage sales in fast food where drinks like Sprite Moonsplash and Beach Protein Frappe are both intriguing and puzzling customers.

🏋️ Functional soda is a high growth category – but how did CSDs become the next big wellness trend? Vox broke down Olipop, Poppi and other functional beverages last week, drawing a throughline from personal health to the need for the “illusion of control.”

🛍️ Just how much of an impact is plastic packaging having on our bodies? A new study from Nature, as reported by the Washington Post, is giving us a more precise look at how many “food contact chemicals” are making their ways into our systems, suggesting 63 of 175 prioritized known chemicals have been found in humans.

This week, the podcast team talks about the influx of co-branded products, why the energy and performance drink category has such a sweet tooth, and the evolution of cannabis in sports and recovery drinks.

🤝 Whether it’s Oreo-flavored Coke or Coke-flavored Oreos, food and beverage makers are bringing recognizable names together in co-branded opportunities that seem to be working in expanding brands into new territory.

🍬 The team discusses the sugar high happening in performance products exemplified in the recent licensing deal between energy drink brand C4 and Hershey’s.

🪴 Are CBD recovery drinks dead? Not necessarily, but there has been an evolution characterized by a lack of FDA regulation and the rise of low-dose, hemp-derived THC.

Listen to the episode now.