New Age Beverages (NBEV) is a leading organic and natural healthy functional beverage company engaged in the development, marketing, sales and distribution of a portfolio of Ready-to-Drink (RTD) better-for-you beverages. The company has competitive entrants in the top 5 fastest growing segments of the beverage industry and competes in the RTD Tea, RTD Coffee, Coconut Water, Kombucha, Functional Waters, Rehydration Beverages, Carbonated Beverages and Energy drink segments. The company differentiate its brands through functional characteristics and ingredients and offer only organic and natural better-for-you products, with no HFCS, no GMOs, no preservatives, and only natural flavors, fruits, and other ingredients. The company manufacture its products in its own fully-integrated manufacturing facilities and through a network of ten additional manufacturers strategically located throughout the United States. The company's products are currently distributed in 10 countries internationally, and in all 50 states domestically through a hybrid of four routes to market, including its own DSD system that reaches more than 6,000 outlets, a DSD network that services more than 35,000 other outlets throughout the North America, directly through customer’s warehouses, and through its network of brokers and natural product distributors. The company's products are sold through multiple traditional channels including major grocery retail, natural food retail, E-Commerce, specialty outlets, hypermarkets, club stores, pharmacies, convenience stores and gas stations. Recently, the Company signed preferred beverage supplier agreements with Dot Foods, Inc., Unified Strategies Group, Inc. (USG), and Simple Again to penetrate restaurants and other food service venues, offices and workplaces, universities, hospitals, health clubs, vending and multiple other alternative channels in which New Age Beverages has never had any sales. These partnerships enable sales to more than 75,000 workplace locations daily, more than 1,000,000 vending locations, more than 3,000 juice bars, and the more than 50,000 health club facilities throughout the United States. The company market its products using a range of marketing mediums including in-store merchandising and promotions, experiential marketing, events, and sponsorships, digital marketing and social media, direct marketing, and traditional media including print, radio, outdoor, and TV, and have recently begun the Company’s first national Business to Business print advertising, and national consumer advertising both with in-store activity, digital and social, radio and other marketing mediums.1

The Company was formerly American Brewing Company, Inc., a craft brewing company formed under the laws of the State of Washington on April 26, 2010. On April 1, 2015, the Company acquired the Búcha® Live Kombucha brand and the assets related to its production and sale from B&R Liquid Adventure.

On October 1, 2015, the company sold the assets and various liabilities related to its brewery and craft brewing operations. The company recognized the sale of the brewery and craft brewing operations as a discontinued operation in the year ended December 31, 2016, in accordance with accounting guidelines. The Company changed its name to Búcha, Inc. in May 2016.

In June 30, 2016, the Company acquired the combined assets of New Age Beverages, LLC, New Age Properties, LLC, Aspen Pure, LLC, and Xing Beverage, LLC (collectively, New Age). New Age is engaged in the manufacturing and sale of various teas, waters, and other healthy functional beverages. This acquisition expanded its capabilities and product offerings, provided scale, and a supply chain and organizational foundation. Immediately following the acquisition, the Company relocated its operational headquarters to Denver, Colorado.

On February 17, 2017, the Company issued 4,285,714 shares of common stock at an offering price of $3.50 per share. In addition, the Company’s underwriter exercised the over-allotment to purchase an additional 642,857 shares of common stock. Gross proceeds to the Company were approximately $17,250,000 before deducting underwriting discounts and commissions, and other estimated offering expenses payable by the Company.

On March 31, 2017, the Company completed the acquisition of the combined assets of Maverick Brands, LLC including their brand Coco-Libre, one of the leading brands in the >$2.5 Billion Coconut Water category with a CAGR of >20% 2011-2016. Through the acquisition the Company strategically gained the number one organic multi-serve brand of Coconut Water, and a range of other unique products, Coconut Protein-based drinks, and Coconut Water with fruit in unique sizes and packaging offerings.

The acquisition of Maverick brands, not only provided New Age with a leading brand in a growth segment and significantly increased scale, but also strategically provided an attractive sourcing structure for future products expected to utilize coconut water as a base. In addition, the national retail key account penetration, and regional strength of Coco-Libre in certain regions like the Northeast for example, filled needed voids in the New Age go to market model.

Revenue synergies to be captured over the next 12 to 18 months are expected to be in excess of $7 million to be gained primarily through US and International distribution expansion. Cost synergies over the next 12 to 18 months are expected to be in excess of $5 million to be gained from headcount rationalization, shipping and production efficiencies, elimination of corporate overlaps, and rationalization of all non-value-added operating expenses.

Since acquiring the Coco-Libre operation, 100% of previous operational headcount has been eliminated and significant other overhead and operating expenses have been eliminated totaling more than $3.6 million which has converted the business from a stand-alone loss-making enterprise into a profitable one incorporated into the New Age system. In the 3rd quarter, the Company has also shifted from a concentrate production model, which was not consumer preferred to a production at the source model. Through this change, the Company developed a significantly improved product and gained a cost of goods sold reduction of more than 30% in the process.

In addition, to the core Coco-Libre offerings, the Company has used the platform to develop three new products that are launching in the fourth quarters including a range of Coco-Libre Sparkling products with the flavors of Coconut Lime, Coastal Coconut, Coconut Mangosteen Passion, Coconut Watermelon, and Coconut Peach Pear. The Company is also using the quality Coconut source and production partner as the basis for its new PediaAde, a coconut water based product with superior rehydration and electrolyte replenishment than its direct competitors, and for its Enhanced Recovery product, a product for the medical channel to speed up recovery after surgery.

On May 18, 2017, the Company completed the acquisition of Premier Micronutrient Corporation (PMC) including 12 patents covering a range of needs including:

  • Cardiovascular health
  • Neurological and concussive protection
  • Radiation protection
  • Immune function enhancement
  • Oxidative cell damage protection
  • Hearing health
  • Diabetes treatment
  • Metabolic function improvement

The acquisition of PMC also included 8 cooperative research and development studies done in conjunction with various groups within the US military, 14 prospective human clinical trials and animal studies to permit the communication of performance claims, and brands and domains including BioShield, BioArmor, and others.

The acquisition of the Premier Micronutrient Corporation strategically adds to the New Age portfolio significant intellectual property, unlike any other beverage company, and underpins the Company’s planned product launches of the next generation of healthy functional beverages targeted to the medical and pharmacy channels. These new channels have significantly less competitive intensity where New Age’s primary competitors do not operate, and the patents, trials, research, studies, and people provide the credibility that underpins entrance into the attractive area.

On June 13, 2017, the Company completed the acquisition of the combined assets of the Marley Beverage Company, including their brands Marley One Drop coffee, and Marley Mellow Mood relaxation drinks, two of the leading brands in the fast growing RTD coffee and RTD tea segments with a CAGR of »9% 2011-2016.

The acquisition of the Marley Beverage Company strategically adds to the New Age portfolio one of the top 5 brands in RTD Coffee, enables the Company to enter into the emerging relaxation drinks segment, and gain a brand with global recognition and more than 74 million Facebook followers.

Revenue synergies to be captured over the next 12 to 18 months are expected to be in excess of $5 million to be gained primarily through US and International distribution expansion through New Age’s own DSD and hybrid network route to market. Cost synergies over the next 12 to 18 months are expected to be in excess of $5 million to be gained from headcount rationalization, shipping and production efficiencies, elimination of corporate overlaps, and rationalization of all non-value-added operating expenses.

New Age entered into a management agreement and took over operational control of the Marley Beverage Company in the 4th quarter of 2016. At that time, the Company defined its intent to potentially complete a full acquisition of the business for consideration of 3 million shares. The acquisition closed following further due diligence and New Age’s uplisting onto the Nasdaq Stock Market.

Since entering into the management agreement and completing the acquisition in the very end of the 2nd quarter and integrating it in the 3rd quarter, the businesses have been 100% integrated, a national sales force developed and trained, systems have been merged, and significant operating expenses have been eliminated all totaling more than $3.1 million which has converted the business from a stand-alone loss-making enterprise into a profitable one incorporated into the New Age system.

In addition to fully integrating the business in the 3rd quarter, the Company developed and launched Organic Marley Yerba Mate, a RTD yerba mate beverage sold in 15.5 oz cans utilizing the Marley signature iconography and logos to connect with consumers and differentiate with both a functionally preferred product and a superior emotional connection with consumers. The four unique flavors including Be Jammin Berry, One Love Lemon, Jamaican Me Mango, and Ya Mon Mint began sales in the very end of the 3rd quarter with the initial division expansion of 7 Eleven, New Age’s first national account, and through some of New Age’s long term distribution partners.

In addition to the Marley Mate launch, the Company also developed for launch the Marley Cold Brew Coffee, on which it has already received national distribution commitment from 7 Eleven and commitment for expansion two other major grocery retailers beginning in Q1 2018. The shelf-stable cold products come in 5 flavors including Staright UP, Madagascar Vanilla, Toasted Hazelnut, Eastern Chai, and Kingston Caramel.

Products and Services

The company's core business is to develop, market, sell, and distribute its brands including XingTea®, XingEnergy®, Aspen Pure® and Búcha® Live Kombucha, Marley® Mate, Marley® Cold Brew Coffee, Marley One Drop®, Marley Mellow Mood®, Coco-Libre® and Coco-Libre® Sparkling brands, and PediaAde and to develop new healthy functional beverage products. The company compete in the healthy functional beverage segments, which is the growth area of RTD beverages as consumers gravitate toward better-for-you beverages and healthier choices and away from traditionally large beverage categories including juices and carbonated soft drinks.

XingTea®

XingTea® is a premium natural RTD tea that competes in the roughly $50 Billion Global RTD tea market, which has experienced a compound annual growth rate over the past five years of just under 10%.

XingTea® is made with green and black teas, and is further differentiated from competitors as it is sweetened with only pure cane and honey and is made with natural fruit flavors, with no preservatives, no GMO’s, and no HFCS. XingTea® comes in 14 natural sweetened and unsweetened flavors in a range of packages from 23.5 ounce cans to 16 ounce multipacks and gallon jugs, and is produced in New Age’s network of manufacturers across the United States.

XingTea® is sold in all 50 states and 10 countries across multiple channels of distribution from traditional grocery, health food and specialty outlets to hypermarkets, club stores, as well as gas and convenience outlets, and recently gained authorization to expand to one of the largest Pharmacy chains and nationally in the largest convenience store operator in the US. XingTea® is also award winning and won first place out of 250 competitive entrants in the North American Tea Championship, and won third place in the 2017 World Tea Championship with is Blueberry Green Tea out of thousands of entries.

XingEnergy®

XingEnergy® is a natural, non-GMO, non-HFCS, vitamin-enriched, better-for-you Energy Drink, made with all natural fruit flavors and contains the full recommended daily allowance of B-Complex vitamins. XingEnergy® competes in the roughly $40 Billion Global Energy Drink market, which has experienced a compound annual growth rate over the past five years of just over 6%.

XingEnergy® comes in four flavors including Tangerine Dream, Grape Attack, Mad Melon, and Grapefruit Go packaged in 16 ounce cans, sold individually, and is currently being expanded to additional packaging sizes.

Aspen Pure®

Aspen Pure® is a naturally PH-balanced, artesian-well sourced water from the Colorado Rocky Mountains. Aspen Pure® competes in the $326 Billion bottled water category and has experienced a compound annual growth rate of over 10%.

Unlike many other premium bottled waters, Aspen Pure® has no added minerals or electrolytes. It comes out of the ground at a natural PH-balanced level of up to 7.0, and is then purified and bottled at the source in New Age’s own manufacturing facilities.

Aspen Pure Probiotic® is the world’s first Probiotic water, and has more than 10 billion live Colony Forming Units (CFU’s) (probiotics) in every serving. Aspen Pure Probiotic® has 12 different strains of probiotics and is shelf-stable with no refrigeration required.

Aspen Pure Probiotic® was tested though New Age’s own DSD system in the 2nd quarter to refine messaging and shelf placement and understand consumer demand and expected sell through. As a result of these learnings and performance the brand expanded to all the Ahold Delhaize banners in the 3rd quarter, and to a number of New Age’s other distribution partners.

Búcha® Live Kombucha

Búcha® Live Kombucha is a shelf-stable, 100% certified-organic, non-GMO, non-HFCS, fermented Kombucha tea with more than two billion probiotic organisms in every serving. Búcha® competes in the Kombucha category, a segment of healthy functional beverages, which has experienced compound annual growth over the past five years of 35%.

Búcha® is produced with a unique and proprietary manufacturing process that eliminates the vinegary aftertaste associated with many other Kombucha’s and provides the brand with an industry leading nine-months of shelf life versus a typical 90-days for competitors, and the only major Kombucha that also does not require refrigeration. The production process also leads to consistency and stability with no risk of secondary fermentation, secondary alcohol production, incremental sugar production or over-carbonation.

Búcha® is made from black teas, proprietary Kombucha culture and probiotics, unique yeast strains and cultures, and all natural organic fruits and flavors. Búcha® Live Kombucha comes in five flavors including Raspberry Pomegranate, Blood Orange, Guava Mango, Grapefruit Sage, and Yuzu Lemon packaged in 16 ounce glass bottles. The brand is sold in traditional grocery and health food and specialty outlets, and is beginning to expand distribution across the United States in mainstream retail and down the street outlets with the support of major DSD partners.

The company's Búcha® Live Kombucha is currently distributed in more than 9,000 stores, consisting of specialty health food stores and food, drug and mass chains including Whole Foods, Kroger, Safeway, 7-Eleven, Sobeys, Loblaw’s, PCC, Vons and Ralph’s, Natural Grocers, Sprouts, Ahold, Giant, HEB, Vitamin Cottage, select Airport outlets, Hotels and others.

As a result of the development and launch of the shelf-stable version of Búcha®, convenience retailers and DSD distributors can now efficiently manage the product unlike other Kombuchas that typically have a 90-day shelf life and require refrigeration. Since the move, Búcha® has expanded to the largest convenience store operator in Canada and sales per outlet are > 10 times the typical store threshold requirements, leading to initial agreement to expand in the US nationally also.

Marley One Drop®

Marley One Drop® is a RTD Coffee made with Premium Jamaican Blue Mountain Coffee, and unlike competitive RTD Coffee’s is no artificial ingredients, no HFCS, no preservatives, no GMO’s, and is kosher certified. The brand comes in 11oz slim cans in four flavors including Mocha, Vanilla, Swirl and Banana Split.

Marley One Drop® competes in the ≈$55 Billion Global RTD Coffee market, which has experienced a compound annual growth rate over the past five years of just over 10%. Marley is one of the top 5 brands in the category in North America, and the Marley franchise has global relevance with more than 74 million Facebook followers.

Marley One Drop® Coffee is distributed in more than 5,000 outlets throughout the United States and Canada, and has an initial presence in 7 international markets in Western Europe, Latin America and the Caribbean.

Marley Mellow Mood®

Marley Mellow Mood® is a RTD natural Tea, and on the forefront of creation of the relaxation drinks segment. Marley Mellow Mood is made with Valerian Root, Chamomile, and other natural herbs and ingredients and unlike competitive RTD Tea’s is all natural, has no HFCS, no preservatives, no GMO’s, and is kosher certified. The brand comes in 15.5 oz. cans in five flavors including Peach Raspberry, Bartlett Pear, Raspberry Lemonade, and Honey Green Tea.

Marley Mellow Mood® relaxation drinks compete in the ≈$50 Billion Global RTD Tea market, which has experienced a compound annual growth rate over the past five years of just under 10%. Marley is the leading relaxation drink, which is a developing sub-segment of the RTD category.

Marley Mellow Mood® relaxation drinks are distributed in more than 10,000 outlets throughout the United States and Canada, and has an initial presence in 7 international markets in Western Europe, Latin America and the Caribbean. Recently in the 2017 World Tea Championship, Marley Mellow Mood® Peach Raspberry won second place out of thousands of entries.

Coco-Libre®

Coco-Libre® is a certified organic 100% Coconut water made produced at the source, a recent change to improve consumer perception, improve taste profile, and significantly reduce cost of goods sold. Coco-Libre® competes in the ≈$2.5 Billion Coconut water category that has experienced a compound annual growth rate of over 20% over the past 5 years.

Coco-Libre® is one of the top 5 brands in the Coconut Water category and the leading brand in multi-serve sizes. The brand competes in four sub-segments including regular Coconut Water, Coconut Water with Fruit Flavors, and Coco-Nut Water with Protein.

Coco-Libre® is distributed in more than 15,000 outlets throughout the United States and Canada, and has excellent presence in the natural channel and with major key national accounts, with particular account strength and regional strength in areas where New Age Beverages is traditionally less strong.

In addition, to the core Coco-Libre offerings, the Company has used the platform to develop new products that are launching in the 4th quarter including a range of Coco-Libre Sparkling products with the flavors of Coconut Lime, Coastal Coconut, Coconut Mangosteen Passion, Coconut Watermelon, and Coconut Peach Pear. The Company is also using the quality Coconut source and production partner as the basis for its new PediaAde, a coconut water based product with superior rehydration and electrolyte replenishment than its direct competitors, and for its Enhanced Recovery product, a product for the medical channel to accelerate and enhance recovery after surgery.

References

  1. ^ https://fintel.io/doc/sec-nbev-new-age-beverages-10k-2018-april-17-17954
Tags: US:NBEV
Created by Asif Farooqui on 2019/11/26 07:37
     
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