Sparkling water brand gets bought for expansion = LEAD
- Keurig Dr Pepper acquired Chicago-based caffeinated sparkling water brand Limitless, the company told Food Dive in an email. Terms of the deal were not disclosed.
- The deal will help grow the distribution for Limitless products, which are mainly sold in Walmart, the company said. Limitless also makes a line of cold brew coffees and green teas sold in kegs and wholesale coffee beans.
- Limitless sparkling water has 35 milligrams of caffeine, no sugar and zero calories. The canned drink comes in Grapefruit Hibiscus, Cucumber Pear, Watermelon, Ginger Mint, Blood Orange and Lemon Lime flavors.
Its acquisition of Limitless expands its water portfolio, which includes Core Hydration, Bai and Evian, as well as some sparkling water brands. Both Canada Dry and Schweppes make flavored seltzer and sparkling water, but neither have caffeine. Bringing in a caffeinated version could be a savvy move given that studies have shown consumers are drinking more caffeinated beverages nationwide, but the brand will face heavy competition as it scales up.
Coca-Cola announced late last year it would release a new caffeinated sparkling water brand called Aha in March, the company’s first major brand launch since 2006. And Pepsi’s bubly, which launched in 2018 and doesn’t have caffeine, has also boosted the soda giant’s earnings.
Despite more big name brands jumping in the category, LaCroix has been the market leader in the seltzer water space for some time, but has struggled recently with lawsuits about its natural claims. There are other startups and smaller companies getting into the space too. Spindrift, a sparkling water company that uses natural fruit flavoring, saw sales jump a massive 800% from 2016 to 2018. Even the makers of Jelly Belly decided to launch the Joffer Beverage Company to create a line of its own candy-flavored sparkling water. And a CBD-infused sparkling water brand called Sweet Reason raised $2.5 million last year.
Although Keurig Dr Pepper is increasing its presence in a space with crowded shelves, acquiring a brand that already has a reputation in the market could be a smart move. Limitless was founded in 2016 and already sells in major retail outlets like Amazon and Walmart. The company also previously worked with beverage incubator L.A. Libations.
Coca-Cola and Pepsi decided to launch their own new sparkling water brands, but Keurig Dr Pepper likely saved money and time on R&D for a brand new drink line. Instead, with Keurig Dr Pepper’s distribution and marketing capabilities, Limitless will now have the resources to more quickly scale into a bigger national brand.
Ever since Keurig Green Mountain bought Dr Pepper Snapple for $19 billion in 2018 to form Keurig Dr Pepper, the company has worked on smaller scale M&A. Later that year, Keurig Dr Pepper announced it would buy premium water brand Core Nutrition for $525 million. Then last year, Keurig Dr Pepper and others agreed to nationally distribute Runa Clean Energy, an organic drink made with the guayusa leaf sourced in Ecuador. But it hasn’t just been picking up brands. Just before Keurig Dr Pepper announced it is buying Limitless, powdered and frozen beverage maker Jel Sert said it acquired hydration drink brand All Sport from Keurig Dr Pepper for an undisclosed amount.
Keurig Dr Pepper seems to be streamlining its portfolio by bringing in trendy drinks, like premium and sparkling water brands, to help protect it from changing consumer demands. So far, its moves seem to be working since Keurig’s packaged beverage segment grew its sales 5.6%, hitting $1.3 billion in its most recent quarterly earnings. If consumers decide to make Limitless their go-to sparkling drink, then Keurig Dr Pepper could see those sales numbers continue to rise.