Yerba maté has continued to gain steam in the functional beverages market, garnering investor interest. According to its recent SEC filing, drink-market Guayakí Yerba Maté raised $75 million in a fresh investment round, adding to over $100 million from previous venture-backed funding rounds. The California-based beverage company offered $143 million in shares, with approximately $68 million left to sell. Guayaki isn’t the only company gaining its stake in the yerba maté energy market, with an expected CAGR of 4.6%, they are estimated to reach over $2.1 billion in 2029. Yerbaé Brands Corp. (TSXV:YERB.U) just began trading on the public markets, but the company has already established a large distribution network. Meanwhile, other players in the functional beverage market like Monster Beverage (NASDAQ:MNST), Coca Cola (NYSE:KO), Dutch Bros (NYSE:BROS), and PepsiCo, Inc. (NYSE:PEP) are adding healthy options to their product roster in an effort to keep up with changing consumer demands.
Yerbaé Brands Corp. (TSXV:YERB.U) just entered the public markets on February 13 following a business combination with Kona Bay Technologies. The company has garnered over $23 million in lifetime sales through 06/30/2022 and its products are available at 10,000 locations including major retailers like Costco, Sprouts Farmers Market, Safeway, Acme, Albertsons, Shaws, Jewel, Stop N Shop, and Winco.
On February 21, the company announced that its January 2023 sales grew by 227% compared to January 2022,
“We are thrilled to announce that our January 2023 growth is up by 227%. This is a testament to the hard work and dedication of our employees and the loyalty of our customers,” said Todd Gibson, co-founder, CEO and Director of Yerbaé. “ We remain focused on meeting and exceeding expectations of our customers and delivering consistent growth for our shareholders.”
Yerbaé Brands has also made several significant marketing investments to reach new consumers and retain existing customers, introducing the brand to the CrossFit community and signing Annie Thorisdottir, the first woman to win the CrossFit Games twice and retaining NYSE-listed Vistar as its distribution partner and investor. Vistar is an industry leading vending and pantry service provider which has used its relations with major pantry outlets in office retailers, schools, and vending to introduce Yerbaé products to consumers in the workplace.
Energy Drinks Producers Are Expanding to Gain Market Share
In August 2022, PepsiCo, Inc. (NYSE:PEP) announced a $550 million investment in energy drink company Celsius Holdings as part of a long-term distribution agreement with the smaller company. The agreement strengthens Pepsi‘s ties to energy drinks. Outside of alcohol, this is one of the fastest growing beverage markets, and Pepsi has been doubling down on energy in recent years as soda use declines, paying $3.85 billion purchasing the legacy energy drink producer Rockstar in early 2020. Celsius has surpassed the brand as the fourth most popular energy drink in the US. Pepsi has previously negotiated an exclusive distribution agreement with Vital Pharmaceuticals’ Bang Energy, another fast-growing upstart. However, the partnership gradually deteriorated, ending in a legal battle won by Pepsi. The two corporations split up earlier than expected in June.
Coca Cola (NYSE:KO) has continued to rollout new products to the functional beverage market in an effort to curb the sharp decline in soda consumption over the last 20 years, including launching its own yerba maté concoction Honest Yerba Maté in 2021. On February 13, the company debut its latest limited-time zero-sugar offering called Coca-Cola Move in collaboration with Grammy-award-winning performing artist Rosalía. In 2022, the company rolled out several new creations include Coca-Cola Starlight, Coca-Cola Byte, the artist Marshmello’s Limited Edition Coca-Cola and Coca-Cola Dreamworld.
Energy drink giant Monster Beverage (NASDAQ:MNST) generated record third-quarter net sales of $1.62 billion in 2022, 15.2% higher than net sales in the corresponding period in 2021. Net changes in foreign currency exchange rates had a negative impact on net sales of $71.3 million in the third quarter of 2022. Foreign currency adjusted net sales grew 20.2% in the third quarter of 2022. During Q3 2022, Monster continued to offset rising product and distribution costs by pricing initiatives such as price hikes and promotional allowance reductions. The Corporation adopted a price increase in the United States on September 1, 2022, and proceeded to implement price increases in certain overseas markets when practicable in the third quarter of 2022, all of which boosted gross profit. Monster has $1.30 billion in cash and cash equivalents, $1.35 billion in short-term investments, and $72.4 million in long-term investments as of September 30, 2022.
Dutch Bros (NYSE:BROS) opened 133 new stores in 2022, 120 of which are company-operated. When compared to the same time in 2021, system same shop sales increased by 1.0%, including the impact of our fortressing plan, which resulted in sales being shifted from existing shops to new ones, and increased by 11.4% on a three-year stacked basis. When compared to the same time in 2021, company-operated same-store sales increased 0.6%, including the impact of our fortressing strategy, and increased 10.4% on a three-year stacked basis. The Dutch Bros system had 671 stores (396 company-operated and 275 franchised-operated) spread across 14 states as of December 31, 2021.
In Q3 2022, Yerbaé introduced the world’s first Pumpkin Spice energy drink, which was featured on Fox News and local CBS, NBC, and ABC stations around the country.
Featured Image istockphoto @ Gumpanat
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