New energy drink products promising to give one that wake-up boost are popping up at seemingly every corner while the energy drink market is poised to reach $65.53 billion globally by 2028.
Compared to the $35.96 billion it was worth in 2020, this marks very strong expansion at a CAGR of 7.90%
Not everyone likes energy drinks but those in the know and not wanting to lose market share are keeping a serious eye on these numbers. This week, drink giant Keurig Dr Pepper (KDP) – Get Free Report dropped $863 million for a 30% stake in the beverage company Nutrabolt.
A Lot Of Money For A 30% Stake
The Texas-based energy drink brand has been around since 2002 and is the larger company behind energy drink brand C4 and recovery drink brand Xtend. Instead of fueling the drinker with energy, the latter promises to “speed up the recovery process” by supplying the fluids lost during a heavy workout.
KDP representatives said that the stake would allow the company to significantly expand its reach in the energy drink market and sell Nutrabolt products in the “vast majority of KDP’s company-owned direct store distribution territories.”
That means that where you can now get Dr Pepper you will soon be able to find Nutrabolt energy drinks.
“This partnership represents a win-win transaction between our two companies,” Keurig Dr Pepper CEO Bob Gamgort said in a statement. “KDP gains significant presence in the rapidly growing performance energy drink market and Nutrabolt gains access to a strategic investor with extensive sales and distribution capabilities to further accelerate its growth.”
Along with the namesake Keurig coffee machines and Dr Pepper soft drink, Keurig Dr Pepper is behind names like 7UP, Canada Dry and Van Houtte coffee. Also in November, the drinks giant invested $50 million into the alcohol-free beer brand Athletic Brewing Company.
Nutrabolt’s value, meanwhile, is estimated to be around $3 billion. The latest deal is slated to close before the end of 2022. Shares of Keurig Dr Pepper rose 6.88% to $37.93 in the last month.
Coca-Cola (KO) – Get Free Report holds a stake in Monster Beverages (MNST) – Get Free Report while Celsius (CELH) – Get Free Report has been growing as an independent brand.
Investors May Want To Keep An Eye On The Energy Drink Market
Amid a general rise in interest in health and wellness over the last decade, energy drinks have emerged as a lucrative segment for big brands to tap into.
While the health benefits of energy drinks fall under scrutiny, the growing demand has definitely been catching the attention of investors both as individuals brands and whether wider companies are making strides in this area.
“A shift in consumer lifestyle, a rise in preference for healthy dietary practices, and an increase in the health-conscious population have substantially increased the demand for nonalcoholic beverages,” research firm The Insight Partners wrote in its report on the soft beverage market. “This factor is expected to provide strong potential to the nonalcoholic beverages market, especially in the energy and sports drinks space in the coming years.”
That, however, does not mean that every energy drink that hits the market will be a hit with buyers (or that its “healthy” claims are in any way accurate.)
Earlier this fall, Pepsico (PEP) – Get Free Report-backed Bang Energy filed for Chapter 11 bankruptcy amid a string of lawsuits over how it advertised the mental and physical benefits of its products.
Source: https://www.thestreet.com/restaurants/keurig-dr-pepper-makes-a-big-move-in-growing-business?puc=yahoo&cm_ven=YAHOO&yptr=yahoo