• 🚚 Pepsi Pulled Rug on Gatorade DSD, Bottlers Say
• 😵‍💫 Expo West: Weird Deadheads and More Sober Drinks
• 💲 Heywell Lands First Strategic Investment
• 🎸 The New Way of Partying

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A Gatorade pallet program is at the center of a complaint filed last month in New York State Supreme Court in which two major independent Pepsi bottlers and their subsidiaries accuse the company of undercutting their position after enforcing a switch to DSD last March.

According to a 52-page complaint filed on February 2, the plaintiffs – Admiral Beverage Corp. and its subsidiaries, and Pepsi-Cola Newburgh (d/b/a Pepsi-Cola of the Hudson Valley and Pepsi-Cola Bristol) – claim Pepsi pitched Gatorade’s March 2023 transition from warehouse to DSD distribution as a “~50MM case opportunity” for independent bottlers and promised to make “commercially reasonable efforts” to convert and retain customers, including Walmart and Kroger.

But less than a year after it “encouraged Plaintiffs to invest tens of millions of dollars” to put Gatorade on its trucks, Pepsi announced its intention to service many of those same retailers – including Walmart and Kroger – through its Display Ready Pallet Program, offering retailers $35 per pallet, as part of a corporate-mandated cost-cutting strategy.

Read the full story on BevNET.

Expo West 2024 is in the books, but there’s more than plenty to catch up on. In our latest dispatch, we highlight a new approach to energy from Weird Beverages, how Recess and Parch are growing the adult non-alc category, and look at some new plant-based creamers that made their debut at the show.

🧸 It’s been a long strange trip for Weird Beverages, but they keep truckin’ along. The brand debuted two new yerba mate flavors at the show – Mystical Mint and Grateful Grapefruit – featuring an official license from the Grateful Dead to use the band’s imagery on its cans. As well, the Texas startup has upped the caffeine across its entire canned tea line to 160 mg per 16 oz. unit. 

🍸 NA cocktail maker and New Beverage Showdown champion Parch sampled two new flavors at its booth, Desert Margarita and Sunrise Supertonic, whole also sharing the latest distribution gains for the two-year-old brand, netting 400 Walmart stores and helping pioneer Vitamin Shoppe’s expansion into the NA set.

🤝 Right alongside Parch, Recess is also building out that adult non-alc space, partnering with zero proof bottle shop The New Bar (keep reading for more on them) and earning placements in Whole Foods, Wegmans and Shaws stores.

🥛 MALK may have just announced a new shelf stable line this month, but it surprised at Expo with another new innovation – revamped plant-based creamers. The brand previously experimented with the creamer category in 2019 before discontinuing the line, and these new creamers feature a different formulation and packaging. Not to be outdone, Forager Project also introduced some alt dairy creamers at its booth.

Read the full notebook on BevNET.

Functional beverage brand heywell announced it had secured its first strategic funding round led by Alethia Venture Partners. The sparkling water brand intends to use the undisclosed investment to fund marketing initiatives and sales support.

😉 Initially funded through angel investors and the female-focused venture group Mastersfund, heywell announced Green Spoon will also joining the beverage brand as its broker, accelerating heywell’s distribution in natural and specialty channels.

🍒 Along with the new capital infusion, heywell has released its newest flavor, energy + lift cherry limeade, that has already lined up distribution with Mariano’s and Central Market for its adaptogenic, caffeinated sparkling variety.

🤑 The investment marks one of the first non-alc beverage investments by Alethia which launched its $50 million Opportunity Fund I in May has put money behind bev-alc brands like Maker, Kové, Madre Mezcal, Pa’Lante Rum and, most recently, Gay Water.

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The New Bar, the Los Angeles-based non-alcoholic beverage retailer, has once again partnered with the Coachella Valley Music & Arts Festival for its 2024 edition next month, as well as a first time partnership with California country music fest Stagecoach.

🍹 The partnership with Coachella (April 12-21) includes bar setups in the general admission and Main Stage VIP areas of the festival. At Stagecoach (April 26-28) the brand will have a full bar set-up for all attendees.

🤠 Giddy up, brands: The New Bar is bringing along a number of rising non-alc alternative brands to the shows, including Recess, HOP WTR, Kin Euphorics and Almave.

👧🏽 It’s still a youth play. The company cited a NC Solutions report showing 53% of Gen Z consumers said they’re interested in reducing their alcohol intake this year, up from 40% in 2023. Around 49% of Millennials said the same, up from 26% in 2023. It’s safe to say these two demos will make up a pretty big chunk of each festival’s attendees.