Dr. Pepper Backs Nutrabolt with $863M Investment

Beverage giants bet on the future of functional drinks.

What’s happening: Banking on the continued clean-energy boom, Keurig Dr. Pepper purchased a 30% stake in Nutrabolt for $863M. KDP’s CEO Bob Gamgort believes the partnership is a win-win.

“KDP gains significant presence in the rapidly growing performance energy drink market and Nutrabolt gains access to a strategic investor with extensive sales and distribution capabilities to further accelerate its growth.” – Bob Gamgort, CEO of KDP.

Why it matters: As demand for traditional pop cools, big soda players PepsiCo, Coca Cola, and Keurig Dr. Pepper are leveraging their brand, sales expertise, and distribution channels to secure partnerships with growing functional beverage companies.

• Leading the way, PepsiCo acquired Rockstar for $3.8B in 2021 and purchased a $550M stake in Celsius earlier this year.

• In 2021, Coca-Cola bought Gatorade-rival Bodyarmor for $5.6B and more recently cashed in on its 16.7% stake in Monster as the energy drink juggernaut increased its market share.

• Building off its acquisitions of Bai Brands ($1.7B) and CORE Hydration ($525M), KDP recently backed non-alcoholic beer leader Athletic Brewing with a $50M investment.

Zooming out: Sugar-filled drinks are trending out of style. Consumers are turning to functional beverages with more utility and less sugar.

• Soft drink production declined in 2021.

• The global sugar-free carbonated drink market is expected to grow to $243.5B by 2030.

• Sales of non-alcoholic beer have increased by 90% in the last decade.

Punchline: With consumers valuing functionality over a sugar rush, beverage brands are placing their bets in accordance. Time will tell if functional beverages become mainstream, but with Gen Z’ers growing interest in health and wellness, things are bubbling in the right direction.

Keep crushing.

Cheers,

Noah Cracknell