Coca-Cola Bets on Booze 🍸

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CPG WIRE
July 18, 2023

Welcome back to This Week in CPG, folks. Hope y’all had a good weekend and survived Monday. We have lots to cover this morning so here’s a preview:

  • Coca-Cola pushes further in alcohol 🍸

  • Wellington explores SKIMS opportunity 🩱

  • Mixers brand East Imperial plots fundraise 💰

  • Snoop Dogg drops a new ice cream brand 🍦

  • ZARA x Barbie debuts (with pop-ups) 👠

  • Mia Khalifa launches jewelry & bodywear brand 💎

Just a reminder: this is the free version of This Week in CPG, and if you’d like to receive the premium editions on Thursday & Saturday, you can sign up here 🙂 

The Big Story 📰

Coca-Cola continues its march into the alcoholic beverage market.

Though Coca-Cola presently has a number of alcoholic beverages on the market — Topo Chico Hard Seltzer, Simply Spiked, Fresca Mixed, and Jack & Coke — they rely almost entirely on third parties like Molson Coors and Brown-Forman for manufacturing, marketing, and distribution.

That could soon change with the introduction of Red Tree Beverages, a new federally licensed alcohol subsidiary owned by Coca-Cola. Though details about the subsidiary are scant, the vehicle theoretically allows Coca-Cola to bring everything related to its alcoholic products in-house and away from third parties. This includes sales, marketing, manufacturing, and distribution.

While it’s very unlikely that Coca-Cola would take every aspect in-house, they will probably exert greater control over sales & marketing efforts, and leave manufacturing and distribution to third parties.

Another interesting possibility is that Coca-Cola uses Red Tree as an experimental R&D arm. Only a small percentage of Coca-Cola brands currently have boozy analogs, so instead of signing lengthy licensing agreements with third parties, Coca-Cola could experiment with alcoholic versions of its popular beverage brands on a smaller, more iterative scale.

Soon we could be seeing trials of “Barq’s Root Beer & Bourbon” or “Spiked AHA Sparkling Water” in regional markets to see how they might perform on a national scale.

Deals 💰

Mergers & Acquisitions 

  • Per Lauren Sherman, Victoria’s Secret was in talks to acquire popular underwear brand Parade but the deal is now dead. Twitter

Fundraising

  • Boston-based Wellington Management is in talks to lead a funding round for SKIMS, the fast-growing shapewear and apparel brand founded by Kim Kardashian. The round, which SKIMS says is pre-IPO funding, could value the brand at $4B. SKIMS posted revenue of $500m last year and is profitable. Reuters

  • East Imperial, the New Zealand-based mixers brand with global ambitions, is reportedly raising $2.9m in fresh funding to fuel its international expansion. Mixers can be big business — Fever-Tree surpassed £340m in sales last year, and Asahi acquired Aussie mixers brand StrangeLove late last year. Just Drinks

  • Lion Pose, a clinical skincare brand for diverse skin tones, announced $3m in funding. Investors include Ignite XL, Precursor Ventures, Mindy Kaling, LH Capital (Rob Lowe’s family office), and a number of angel investors. Lion Pose was founded by Madhu Punjabi and Nisha Phatak. PR Newswire

What’s New 🤩

Apparel, Cosmetics, and Wellness

  • HigherDOSE, a producer of wellness hardware devices like the Infrared Sauna Blanket and Red Light Face Mask, introduced a new red light device for the neck which repairs skin & reduces signs of aging. Instagram

  • The ZARA x Barbie capsule collection launched yesterday. The collection features apparel, accessories, beauty products, and homewares. ZARA also opened two pop-ups in Paris and NYC to celebrate its latest collaboration. YOU Magazine

  • Mia Khalifa, the former adult actress turned influencer with over 27m followers on Instagram, launched a new jewelry and bodywear brand, SHEYTAN, alongside former Ye and Virgil Abloh collaborator Sara Burn. Their first collection looks good. Business of Fashion

  • Bridge Mentorship, an accelerator program created by Beauty Independent and True Beauty Ventures, announced its latest cohort. Brands participating include DAMDAM Tokyo, Viktor Michael, and Salwa Petersen. Beauty Independent 

  • Haircare brand Better Not Younger launched a very interesting new product — Superpower Thickening Hairpatches. Basically consumers apply the patches to their temples, and the active ingredients help thinning hair look denser and thicker. You can watch a video of how the patches work here. WWD

Food, Beverage, and Alcohol

  • Athletic Brewing Co. unveiled its latest limited edition brew — Tropical Reset — which is their take on a Piña Colada Sour. Athletic Brewing is always doing something interesting. Twitter

  • Grog, a new canned booze brand from Australia, is launching soon. The 6% ABV product features shochu, vodka, and soda. Grog is a collaboration between Cold Ones, a very popular YouTube channel, and 80 Proof, an incubator of alcohol brands. Grog

  • Rapper Snoop Dogg continues to build his CPG empire with the launch of Dr. Bombay, a new ice cream brand that differentiates via fun flavors and flashy branding. Dr. Bombay

  • Non-alcoholic aperitif brand Ghia teased the launch of its newest product. Something spicy launches this week. Instagram

  • hrbvor, a maker of still & sparkling functional iced teas, officially launched. The company is woman-owned and based in New Jersey. Good-looking products IMO. hrbvor

Data 🖥️

  • Swiss watchmaker Swatch is back. Revenue for the first half of 2023 hit $4.64B, an 18% increase versus the same period last year. Reuters

Distribution News 🚚

  • Snack brand Muddy Bites is now available nationwide at Target.

  • Toufayan Bakeries launched their keto wraps storewide at Meijer.

  • Skincare brand Lion Pose launched exclusively at Sephora.