August 17, 2017

Between 2011 and 2016, the U.S. energy and sports drink retail market saw an impressive annual growth rate of 7 percent, capping out 2016 with sales of $25 billion, according to the report Energy & Sports Drinks: U.S. Market Trends & Opportunities issued by Packaged Facts earlier this year.

This momentum is expected to continue as consumers increasingly opt to avoid sugary carbonated drinks in favor of healthier beverages that offer innovative functional benefits. Sports drinks are also benefitting from above average population growth seen in its target age group of  25-34 year olds, which grew at a rate of 1.4 percent between 2012 and 2016, compared to the general U.S. population which saw a growth rate of 0.7 percent over the same time period.

These market dynamics are resulting in innovation within the space to try to capture consumers’ imagination and interest from investors looking to be early backers of new cutting edge products that hit a nerve with health conscious buyers.

Reflecting this, two deals in the better-for-you energy and functional drinks space were announced within a week’s time.

KILL CLIFF

Sunrise Strategic Partners has made its eighth investment since launching last year, making an undisclosed minority investment in KILL CLIFF, a clean recovery and hydration sports drink.

Developed by former Navy SEAL Todd Ehrlich, KILL CLIFF is a better-for-you alternative to current sports and post-workout beverages on the market and is an official partner of the Navy SEAL Foundation. Containing only 15-20 calories, the drink boasts a simple ingredient list that includes electrolytes and B vitamins, while containing zero sugar.

“It’s been our mission since day one to become the largest contributor to the Navy SEAL Foundation,” said Todd Ehrlich, founder of KILL CLIFF. “Coming from that community, it was important to me to not only build a brand that delivers on workout recovery but gives back in a meaningful way. We are proud to donate a portion of our sales of KILL CLIFF to support the Navy SEAL Foundation.”

Currently KILL CLIFF is available in CrossFit Gyms, USA Weightlifting gyms, Vitamin Shoppe, GNC stores, Amazon, Whole Foods, Kroger, Hy-Vee, and at stores on Navy and Marine Corps bases. The capital from Sunrise will be used by KILL CLIFF to fund the expansion of its distribution, and to enhance marketing initiatives that will raise the drink’s exposure to new customers.

“Born in the Navy SEALs and raised in CrossFit gyms, KILL CLIFF has demonstrated a clear brand proposition and loyal following. We believe the product’s clean ingredient label will appeal to a wide range of consumers, and we are excited to team up with KILL CLIFF to help them expand the brand’s footprint in more gyms and grocery stores,” said Steve Hughes, CEO and co-founder of Sunrise Strategic Partners.

Protein2o

Protein and electrolyte-infused water brand, Protein2o announced it has raised $4 million in new funding from its “original investment group”, and has added two new executives to its team – former PepsiCo exec Andy Horrow, who will serve as president, and former Gatorade president Sue Wellington, who will lead the company’s Board of Directors, according to a recent announcement.

Launched in 2013 by father and son team, Bob and Robert Kral, Protein2o’s line of five drinks contain 15 grams of whey protein isolate at only between 60 and 70 calories per 16 ounce bottle.

“Protein is in high demand from post-workout to aiding in nutrition and satiety,” Horrow told Food Navigator. “But protein usually came with a lot of unnecessary calories. We are the lighter version of protein and we are very confident that Protein2o is going to be the leader in an explosive category.”

The numbers reflect the company’s growing popularity. In the first half of 2016 Protein2o saw sales jump 300 percent and store sales double compared to the year before. Currently sold through grocery, club, drug, and convenience stores in the Central and Midwestern U.S. and nationwide at Rite Aid stores, the brand is on pace to be rolled out nationwide at CVS stores beginning in September.

The addition of Horrow and Wellington to the Protein2o team will help the brand expand its exposure across new markets and consumer segments.

Look down the beverage aisles and it’s easy to see that people are looking for more out of their beverages than just refreshment,” said Wellington. “Like Gatorade, Protein2o has a truth…an efficacy. There’s some real physiology here and real nutritional value and I plan on helping this brand become the next big thing in the beverage industry. “

“We emulate Gatorade from a success of brand standpoint,” Horrow noted. “But I don’t at all see this as being competitive in that sense. Sports is going to be part of our business and a significant part of our business, it’s not going to be the only part. I think the biggest opportunity for us is to extend protein as an all-day beverage, anything from a snack to muscle recovery to satiety at a low-calorie level. Whereas people are looking at Gatorade for sports, we want people to think about Protein2o as protein first. That’s where I see the big opening and the big difference for us.”

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.