• 🫚 Reed’s Q4 Results
• 🛗 Up Next On Elevator Talk
• 🛒 Instacart Adds Merch Service
• 🧒🏼 Tough Future For Alc Sales
• 💵 Dollar Tree Selling Family Dollar
• 📖 The Insurgent Brands Playbook

From the playful rise of #WaterTok to the wellness appeal of prebiotic sodas, consumers are reshaping what they expect from a simple sip. Flavored water is leading the charge, bridging fun, function, and flavor in ways brands can’t afford to ignore. See where innovation is headed next. Learn more

The energy drink category is one of the most crowded segments in beverage, but, armed with fresh funds, Lucky Energy is confident it can continue carving out its own corner. 

The Austin, Texas-based brand announced the close of an oversubscribed $14.2 million Series A1 round led by new investor Maveron with backing from DMG Ventures, Second Sight Ventures, Brand Foundry Ventures and Sugar Capital. The cash comes on the heels of an $11 million round in September, bringing Lucky’s total investment to over $40 million. 

“First and foremost, we back people. I think [Lucky founder and CEO] Richard [Laver] is a genius formulation person and a genius branding person,” said Dan Levitan, co-founding partner of Maveron. This deal marks Maveron’s first energy drink investment. 

Lucky Energy (originally launched in August 2023 as Lucky F*ck Energy) prides itself on the clean ingredient deck spanning its 6-SKU energy drink line. The 16 oz. cans are on shelf at approximately 10,000 doors nationwide and pack 200 mg of caffeine as well as active ingredients like maca, ginseng, beta-aline and taurine. 

The brand has worked to maintain its edge through disruptive marketing efforts, like its recent “Shangry” campaign, even after “censoring” itself by removing “f*ck” from its brand name last year.

• Energy drink dollar sales rose 6.8% while volumes were up 4.5% in the 52-week period ending December 28, per NIQ data analyzed by Goldman Sachs Equity Research. 

The new funding will help the 19-month-old brand double down in key markets like New York, Boston, Texas, Southern California and Seattle, Laver said, while “attracting the best teammates.” The brand expects to be available in 15,000 to 17,000 doors by year’s end. 

“To be able to move into markets with pure intention and win the hearts and minds of people is a relatively expensive endeavor. Being able to deconstruct the energy drink to a place where it can perform and give us that superior gross margin business story [is huge],” said Laver. 

Insiders can access the full story to learn more about Lucky’s funding round, how the capital will be deployed and what it aims to achieve this year.

Reed’s is once again projecting confidence that it will return to growth this year. Even though the craft soda producer turned in a double-digit Q4 net sales decline in its latest earnings report this week, the results show some silver linings.

📉 Q4 sales were down 18.7% to $9.7 million, but gross profit jumped to $2.9 million – up from around $500k in the same period in 2023. 

👍 Gross margins were also looking pretty good – up to 30%, compared with just 4% in 2023.

🤔 So what explains the disparity? Inventory production constraints, vendor credit limits and short order shipments were to blame for the lowered sales, CEO Norman E. Snyder said, but a “disciplined approach to operations” is setting the expectation for an optimistic outlook this year.

Insiders can access the full breakdown of Reed’s latest earnings on BevNET.

The latest installment of Elevator Talk features leaders from Herb & Orchid, Drop Needle Drinks, Fast Pickle, Edenesque and Nutrisurg.

Watch founders and CEOs introduce their brands and provide a recap of recent news and updates. This week’s special co-host is Rebecca Bernard, the founder of Empire City Brand Builders, who shared her thoughts, questions and feedback with the participants. She is joined by Ray Latif, the editor and producer of the Taste Radio podcast.

Watch the full episode now.

Instacart has an eye on upping the grocery business from all angles. Today, the tech platform launched a merchandising service for brands known as Store View.

📱 The tech is powered by gig workers who can take on requests to take videos of store shelves while fulfilling their standard orders. Those assets are then analyzed via a combination of AI and computer vision technology to allow brand partners to access real-time inventory data.

📶 Down the line, Instacart plans to integrate this service into its Caper Carts via outward-facing cameras that update inventory insights each time they pass through the aisles.

🗺️ The feature will roll out at select retailers in the coming weeks with additional accounts coming on line across the U.S. and Canada throughout 2025.

Check out the full story for additional Store View details and more news from Instacart’s expanding suite of shopping tech.

The kids just aren’t drinking like they used to and it’s not looking good for alcohol manufacturers. Middle aged consumers have been consuming the bulk of alcohol for the last 20 years, offsetting youth declines, Morgan Stanley Research’s latest Demographics & Drinking report found – but an aging population is something to worry about.

🍸 Gen Z abstinence from alcohol is no surprise, and Morgan Stanley now says it’s “unlikely that they will match prior cohorts as they age.”

💉 Wellness trends, GLP-1 drugs and public health alerts around alcohol aren’t helping matters either as consumers prioritize their own well-being over getting drunk. Add in the rise of non-alc alternatives all signals point to a smaller alcohol market in the future.

🧓 Morgan Stanley doesn’t expect a return to pre-pandemic growth rates, especially as older consumers eventually become “physiologically unable” to drink as much alcohol as they used to. 

Data Dive: How A Diverse and Sober Gen Z Shops for BevAlc

Family Dollar is all about discounts and Dollar Tree is selling the chain at a bargain price. Dollar Tree is offloading its fellow discount-retailer to a duo of private equity firms, Brigade Capital Management and Macellum Capital Management for about $1 billion, per the Wall Street Journal.

💸 Dollar Tree acquired Family Dollar in 2015 for roughly $9 billion after a bidding war with Dollar General in a deal that was anticipated to be a value-add for the buyer.

😡 Dollar Tree, which sells primarily discount party supplies in suburban areas, was expected to gain market share because Family Dollar caters predominantly to urban, lower-income consumers with bargain groceries and household goods. 

• That expectation has not become a reality.

📈 Dollar Tree investors are cheering over the decision with share price rising over 10% since the news was reported Wednesday morning.

This week, the podcast team talks through Bain & Company’s Insurgent Brands 2025 list, diving into the similarities among the new insurgents.

📍 Later, they muse over how operators can derive successful growth strategies from Bain’s yearly list pointing out that more than a few of these insurgents have been acquired in the last year at significant valuations. 

🔔 The team chats about how the list is emblematic of some trends across CPG food and beverage and stands as a bellwether of successful growth strategies.

Click here to listen to this week’s episode. Also available on Spotify and Apple Podcasts.

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