Riot Energy gets a boost from investor Sierra Nevada

Riot Energy raised a round from Sierra Nevada Brewing in exchange for a minority stake, CEO Laura Jakobsen tells Axios.

Why it matters: Even independent craft beer brewers are looking to lock in strategic partnerships with energy drink brands like Riot Energy these days.

• Recent deals in the category include Keurig Dr Pepper's investment in C4 Energy parent and PepsiCo's investment in Celsius.

Of note: The co-founders of Riot Energy, based in Venice, California, spoke to Axios from the sidelines of the Natural Products Expo West annual trade show being held this week in Anaheim.

Details: Terms of the simple agreement for future equity, or SAFE, transaction were not provided.

• But co-founder Steve Jakobsen (Laura's husband) says that the proceeds will fund some $25 million worth of products for Kroger, which it recently began to supply nationally.
• As part of the deal, Sierra Nevada will take over production of the beverage, though not distribution, Laura Jakobsen says.
• Riot also just launched in some 1,000 Walmart locations, she says.

What they're saying: The partnership between the two beverage makers became necessary to keep pace with the larger players in the space, given their rivals' production and distribution power, Jakobsen says.

• Jakobsen liked the fact that Sierra Nevada was also an independent, family-owned business competing with larger conglomerates.
• The energy drink brand is not just differentiating itself with packaging and marketing, but also with its organic and plant-based ingredients, which makes for a cleaner-tasting product, Jakobsen explains.

Catch up fast: Most energy drink brands are tied up with major beverage or brewing groups, but those that do remain without partners include Alani Nu, Uptime Energy and G Fuel.