Beverage Market Set to Grow as Functional Beverages Become More Popular
FinancialBuzz.com News Commentary
NEW YORK, May 30, 2018
According to a report by Grand View Research, the global nonalcoholic beverage market is expected to reach USD 1.60 trillion by 2025, growing at CAGR a 5.8% over the forecast period. Numerous studies have proved that obesity is linked to higher consumption of carbonated soft drinks. Overtime, this has led to the development of calorie-free or low-calorie drinks, such as functional beverages, bottled water, and fruit beverages. The report indicates that rising societal awareness toward serious health problems is acting as the biggest driver for nonalcoholic beverage market. The industry is reshaping itself by changing the orientation from carbonated soft drinks to non-nutritive low-calorie beverages. Koios Beverage Corp. (OTC: SNOVF), Celsius Holdings, Inc. (NASDAQ: CELH), New Age Beverages Corporation (NASDAQ: NBEV), Monster Beverage Corporation (NASDAQ: MNST), Reed’s Inc. (NYSE: REED)
The functional beverage sector is expected to develop into the fastest growing product in the market over the forecast period. Mordor Intelligence indicates that the functional beverage market was valued at USD 26.2 billion in 2015, at an expected CAGR of 6.5% by 2023. According to Future Market Insights, “Functional beverages are non-alcoholic drinks that keeps one’s body hydrated and provide overall nutritional well-being. These are fortified drinks that prevent or help address health issues across all age groups… Energy drinks is the largest segment in functional beverages followed by sports drinks and nutraceutical drinks… North America is the largest market for functional beverages as it contains innovative varieties of drinks that are customized for all age groups and strata.”
Koios Beverage Corp. (OTC: SNOVF) also listed on the Canadian Stock Exchange under (CSE: KBEV). Earlier last week the company announced that, “it has entered into an agreement with NeuraPerformance/Neuroptimize Brain Center whereby NeuraPerformance/Neuroptimize will perform full clinical brain scans on Koios users. NeuraPerformance/Neuroptimize is the go-to brain lab and physiotherapy clinic for Colorado’s elite athletes, including the Denver Broncos football team. The centre specializes in brain mapping, brainwave optimization, enhancing sports performance, baseline concussion testing and treatment.
NeuraPerformance/Neuroptimize will also stock and sell Koios beverages in the future, at its numerous locations.
“Our respective companies have a shared vision and passion for mental health and performance,” said Rachel Ragsdale, director of brain mapping, neurofeedback and counselling at NeuraPerformance/Neuroptimize. “Helping them demonstrate the efficacy of their products is something we truly look forward to doing. Additionally, adding their products to our platform of services creates tremendous value for our clients and the people we are trying to help. Mixing technical science with their stellar products is a win for everyone.”
The full clinical brain-scan study may provide evidence that Koios products may enhance cognition over the long term and help the Company fine-tune its beverages’ performance.
“For many years we have been looking for the right partner and platform to test our technologies and products,” said Chris Miller, CEO of Koios. “Not only will this clinical trial further substantiate our product formulation, but the data collected will pave the way to creating better technologies within our portfolio, and fulfilling our mission of creating some of the most functional organic products that support and enhance brain health and performance.”
The initial results of the study are expected in July.”
Celsius Holdings, Inc. (NASDAQ: CELH), founded in April, 2004, is a global company with a proprietary, clinically-proven formula for flagship brand CELSIUS®. CELSIUS’ original line comes in seven delicious sparkling and non-carbonated flavors, and in powder stick packets which can be mixed with water. Recently, the company announced impressive gains in sales across multiple channels, and new distribution including cold vault placement in over 590 chain convenience stores. The move to include the brand in the latest energy drink set is significant, as it deepens penetration within the intensely competitive convenience channel and broadens the brand’s availability for consumers. This increase in store count provides an opportunity to market the brand to even more consumers who will be at arm’s length from point of purchase. This latest authorization adds credence to the brand’s pioneering position as a proven, functional fitness drink. Retailers are viewing CELSIUS as providing a point of differentiation to consumers, which gives the brand a reason for being alongside stalwart, traditional energy set competitors. The trend forward fitness brand has gained momentum against well-heeled energy brands, within the highly coveted energy drink set.
New Age Beverages Corporation (NASDAQ: NBEV) is a Colorado-based healthy functional beverage company that was created in 2016 and 2017 with the combination of Búcha Live Kombucha®, XingTea®, Coco-Libre®, and Marley®, to create a one-stop-shop solution for retailers and distributors providing healthier beverages in the disruptive growth segments of the $870 Billion-dollar non-alcoholic beverage industry. On May 15, 2018, the company announced the achievement of its highest first quarter sales ever of $12.8 million. For the three-month period ending March 31, 2018, gross revenues reached $12,767,789 versus $11,437,638 in the prior year, an increase of 12%. Net revenues less discounts, returns and billbacks reached $11,558,203 versus $10,787,801 in the prior year. Retail distribution in US Divisions has increased by around 85,000 new points, most of which occurs in Q2, on existing and new higher margin products.
Monster Beverage Corporation (NASDAQ: MNST) is a holding company and conducts no operating business except through its consolidated subsidiaries. The Company’s subsidiaries develop and market energy drinks, including Monster Energy® energy drinks, Monster Energy Ultra® energy drinks, Monster MAXX™ maximum strength energy drinks and so on. Earlier this month, the company reported financial results for the first quarter ended March 31, 2018. Net sales for the 2018 first quarter increased 14.7 percent to $850.9 million from $742.1 million in the same period last year. Gross sales for the 2018 first quarter increased 17.2 percent to $990.6 million from $845.5 million in the same period last year. Net sales for the Company’s Monster Energy® Drinks segment, which includes the Company’s Monster Energy® drinks, Monster Hydro® energy drinks and Mutant® Super Soda drinks, increased 16.7 percent to $780.5 million for the 2018 first quarter, from $668.6 million for the same period last year. Net sales for the Company’s Monster Energy® Drinks segment for the 2018 first quarter were negatively impacted by $3.9 million, due to the adoption of ASC 606.
Reed’s Inc. (NYSE: REED) is owner of the nation’s leading portfolio of handcrafted, all-natural beverages. On May 14, 2018, the company announced financial results for the fiscal first quarter 2018 ended March 31, 2018. During the first quarter of 2018, net sales of $8.3 million were consistent with the same period in 2017, as increased average selling prices as a result of a price increase in the third quarter of 2017 were offset by lower volumes that resulted from reductions in promotional spending versus the prior year. Gross profit during the first quarter of 2018 more than doubled to $2.3 million compared to the same period in 2017. Gross margin was 27.8% of net sales during the first quarter of 2018 compared to 12.7% of net sales in the same period in 2017, and up from 21.3% the fourth quarter of 2017.
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