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BFD Expert Voices - Retail Deals

BFD Expert Voices

Alani Nu Energy could be in the M&A spotlight as strategics' thirst for energy drinks remains unquenched. 

Why it matters: Mature beverage giants — from soda makers to brewers — need new products to drive growth, Richard writes. 

In addition to C4 Energy, Alani Nu is the only other acquisition target that makes sense for a large strategic acquirer like Keurig Dr Pepper, says Bang Energy CEO Jack Owoc.

This year, energy drink sales are expected to hit about $68 billion and set to grow to nearly $99 billion by 2032, based on a CAGR of 7%, according to Future Market Insights.

Catch up fast: After nixing talks with Bang energy, Keurig Dr Pepper may seek a new acquisition candidate in the category, Axios reported.

Details: Alani Nu, which sells a line of nutritional supplements and products in addition to energy drinks. was founded by social media influencer Katy Hearn.

The company expanded into coffee and coffee protein drinks this year.

Congo Brands lists Alani Nu among the portfolio businesses on its website, though it doesn't provide many details.

Along with Alani Nu, Congo lists hydrating sports drink brand Prime, helmed by social media stars Logan Paul and KSI. 

Alani Nu and Congo Brands did not respond to requests for comments.

By the numbers: The company generated about $209 million in sales and grew nearly 570%, according to BevNet, which conducted a deep dive of the energy drink space.

State of play: Industry leader Red Bull, which generated nearly $8.9 billion in turnover in 2021, is owned by Austrian billionaire Dietrich Mateschitz, who took out a $765 million dividend last year.

Monster, the other category leader, is publicly listed, though it was reported to be in merger talks with Corona brewer Constellation Brands this year.

Monster also produces brands such as Reign, Full Throttle and Nos, the latter two of which were transferred to it by Coca-Cola, which took a 16.7%  stake in the energy drink group. 

Yes, and: PepsiCo already owns Rockstar and recently invested $550 million in Celsius.

A Shoc raised a $29 million Series B round from investors including Keurig Dr Pepper, which produces and distributes the product, as well as drink brand Venom Energy.

Xyience was acquired by Big Red, which was bought by Keurig Dr Pepper in 2018, according to PitchBook.

Zoa, co-founded by Dwayne "The Rock" Johnson, received investment from Molson Coors Beverages.

Rip It is owned by La Croix maker National Beverages Corp.

And Ghost has partnered with and attracted an investment from beer giant AB InBev via ZX Ventures last year.

The bottom line: With so many energy brands tied up with various investors and strategics, competition for unclaimed brands will heat up — and we wonder about a rollup opportunity in the category. 

Two other potential investment candidates include Uptime Energy and G Fuel, both fast-growth businesses not yet connected to a major strategic.

1 big thing: Alani Nu last round for energy drinks

Illustration of a soda can with a quarter as the top.

Westrock Coffee closed its SPAC deal with Riverview Acquisition, raising about $300 million in equity, and began trading on Nasdaq today, the company announced. 

Why it matters: Armed to the teeth with cash, Westrock — which provides coffee and tea pods, brewing equipment and dispensers — could prove a formidable consolidator in the coffee and tea packaging space, Axios' Claire Rychlewski writes. 

Deal details: In addition to the equity, Westrock secured a $175 million senior secured first lien term loan facility and a $175 million senior secured first lien revolving credit facility.

Proceeds will pay existing debts as well as finance "organic and strategic growth initiatives," the company said. 

The company will trade on Nasdaq under WEST.

How it works: Westrock competes with Keurig and Nespresso, providing coffee and tea products for offices, convenience stores, grocery stores, universities, coffeehouses, and restaurants. 

The company exports its products through its subsidiary company.

The big picture: Though public markets are still choppy, demand for coffee products is strong. Nestle's Q2 results saw sales of coffee, including Nescafe and Starbucks brands, increase. In 2021, coffee was Nestle's largest contributor to organic growth.

2. The BFD: Westrock Coffee starts trading on Nasdaq

Illustration of a coffee cup with steam in the shape of a dollar sign.

Meta Platforms (nee Facebook) plans to bring grocery shopping inside WhatsApp by partnering with India's Jio Platforms.

Customers in India will be able to go through JioMart's full grocery catalog on WhatsApp, add items to their cart and make payments without leaving the app.

Don’t dismiss retail’s pending winter of discontent. The WSJ weighed in Sunday with a deep look at the challenges retailers face heading into the fall and holiday seasons. 

The paper reports: “Companies are attempting to balance serving consumers who are eager to spend despite rising prices while also being sensitive to shoppers who need or want to be more budget conscious.”

3. Retail therapy

Illustration of a therapy sofa with five shopping bags positioned on the seats.

• Sony agreed to buy Savage Game Studios, a Helsinki-based mobile games publisher seeded by companies including Makers Fund, Vorago Group and Play Ventures. https://axios.link/3PTDzcJ

• Walmart (NYSE: WMT) plans to buy the stake it doesn’t already hold in listed South African consumer goods distributor Massmart, at a 53% premium, and take the company private. https://axios.link/3TmPkLQ

• Kalera Public Limited (NASDAQ:KAL) announced that a large national premium grocery retailer added the company’s ultra-clean, non-GMO, leafy greens to its Texas market, which will be serviced through its Houston facility.

4. Retail transactions

• Zetta Venture Partners promoted Dylan Reid and James Alcorn to partners. www.zetta.vc

• mPhase Technologies appointed Ted Fagenson to be Chief Commercial Officer. www.mphasetech.com

5. It's Personnel

Good morning, Retail readers, and happy Monday!

☕ Situational awareness: PSL lovers, your time is nigh — tomorrow Starbucks launches its fall menu, which includes the Pumpkin Spice Latte and a revamped Apple Crisp Macchiato.

One fun thing: Axios' data visualization team continually blows us away. Today's What's Next features Aida Amer and Shoshana Gordon's evaluation of past artists' predictions for the future. It's fun!

August 29, 2022

1 big thing: Alani Nu last round for energy drinks