Liquid Death comparison (ZVIA)
Liquid Death, a startup that cans water from the Alps, raised $75M in Series C funding valuing the company at $525M. The product tagline is that it will “murder your thirst.” The brand is now carried in more than 29,000 doors including Whole Foods, Target, Safeway, and 7-Eleven. The ACV reached 9% at the end of 2021, three years after launching. Revenue grew from $3M in 2019 to $45M in 2021. Liquid Death just recently passed Amazon’s metric for when to start selling a product wholesale instead of charging for every case it sell. Liquid Death now sells directly to Amazon. The company is launching flavored water under the names “Berry It Alive,” “Severed Lime,” and “Mango Chainsaw.” The flavoring will feature agave nectar that will have three grams of sugar and 20 calories. The company claims can packaging is better for the environment because of its higher recycling rates.
Beverages have been one of the strongest major categories of CPG lapping the first year of the pandemic. Zevia’s market cap is currently less than Liquid Death’s valuation even though its revenues are more than three times larger. Zevia also has a larger TAM and arguably a monopoly by default for Stevia sweetened sodas. Zevia will be presenting at the ICR conference next week, for our Guidebook that features Zevia among two dozen other companies in our sectors CLICK HERE. We also have a more detailed black book on Zevia available.
No robusta about it (SJM, SBEA)
Trend forecasting company WGSN picked robusta coffee beans as one of the top food and beverage trends for 2022. The company said, “When we look globally, we see signals of this being picked up, and more entrepreneurs are bringing that robusta cup into the United States. We’ll see interest in specialty robusta, then we may see some things in cans, then in another year at Starbucks – that’s how these things trickle out.” The robusta bean is more climate-resilient but passed over by nearly all specialty coffee brands for arabica beans. Instant coffee producers are the major purchaser of robusta. When all the specialty brands have been touting arabica beans while Folgers and Maxwell House have been made from robusta beans it will be a hard sell for specialty brands. However, robusta’s higher caffeine content could be appealing for RTDs. Arabica bean prices are up more than 50% in less than a year, but larger price spikes have happened in the past. It’s going to take much higher prices for switching to occur without costing customers. This could go down as the worst replacement since George Lazenby replaced Sean Connery as James Bond. If you happen to be the George Lazenby fan the switch could be as confusing as Charged Cotton was for Under Armour, which for years claimed, “cotton is the enemy.”
Beer Purchasers Index climbs (STZ)
The National Beer Wholesalers Association’s (NBWA) monthly survey of beer distributors recorded its highest reading for the month of December. The NBWA’s Beer Purchaser’s Index is a diffusion index with a reading above 50 indicating expansion and below 50 indicating contraction. The index reached 71 in December, up from 51 in November. The NBWA attributed the increase to distributors stocking up ahead of planned price increases and supply chain concerns. The FMB/hard seltzer category had a reading of 36 compared to 80 last December and 31 in November. The highest reading was for imports at 73, up from 68 in November. The reading for craft beer was 60, up from 47 in November. The reading for premium lights was 65, up from 54 in the prior month. The reading for domestic beer was 51. Below premium beer was 38, up from 29 while cider was 45. The reading for inventory at risk of going out of code was below 50 for all categories except FMB/hard seltzer.
