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Stuff it with protein. Add a kick of nutrients and caffeine. And please, stay away from sugar.
Those, in obnoxiously overgeneralized terms, are the basic tenets of launching and scaling a beverage startup targeting the modern consumer. Per an analysis of Crunchbase data, recently funded companies in the drinks space typically check one if not all of those boxes.
These are not especially shocking findings. Consumers willing to pay handsomely for a container of liquid are commonly looking for health and wellness benefits, as well as an energy boost, if not a buzz.
That’s reflected in our sample list of 26 noteworthy beverage startups funded this year. Standouts inclu…
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Stuff it with protein. Add a kick of nutrients and caffeine. And please, stay away from sugar.
Those, in obnoxiously overgeneralized terms, are the basic tenets of launching and scaling a beverage startup targeting the modern consumer. Per an analysis of Crunchbase data, recently funded companies in the drinks space typically check one if not all of those boxes.
These are not especially shocking findings. Consumers willing to pay handsomely for a container of liquid are commonly looking for health and wellness benefits, as well as an energy boost, if not a buzz.
That’s reflected in our sample list of 26 noteworthy beverage startups funded this year. Standouts include such potable offerings as protein soda, botanical tonics and sugar-free energy drinks.
We take a closer look at where the money is going by focusing on a few top investment themes.
Protein everywhere
First off, it seems safe to say protein is officially the macronutrient of the year. This is evident in the beverage space, where startups and established brands alike are competing to stuff more protein into everything from sodas to lattes to flavored waters.
Below, we assembled a list of four startups along these lines funded this year.
Dutch startup Vivici, which produces dairy proteins through precision fermentation, picked up the biggest recent round, landing $37 million in a February Series A. The company makes a whey protein that’s been used for clear drinks, powder mixes and snack bars.
Slate Milk, which makes high-protein milk shakes and iced coffees, is also poised to scale, having secured a $23 million Series B in September. More than three-fourths of the calories in its drinks come from protein.
For those seeking something fizzier, Don’t Quit is another option. The Los Angeles-based company sells canned sodas that feature 15 grams of whey protein.
Energy
Of course, what use is all that protein if one isn’t awake or alert enough to appreciate it? Enter our next favored funding category: energy-boosting drinks.
Using Crunchbase data, we assembled a sample list of five such startups funded this year.
One continuing trend is the incorporation of caffeine into drinks that traditionally don’t contain the stuff. Gorgie, for instance, markets a sparkling pink lemonade with more caffeine than many cups of coffee. Lucky Energy, meanwhile, sells a lineup of even more caffeinated fruity-flavored drinks.
We’re also seeing startups straddling multiple hot beverage niches. Concentrated coffee purveyor Jot, for instance, sells a protein latte. And Atomo Coffee makes products with added ingredients offering nutritional and health benefits.
Wellness
Drinks for health and fitness buffs are also attracting investors. To illustrate, we assembled a list of five startups funded this year that meet this criteria.
Hiyo, a maker of fizzy tonics crafted with potentially mood-boosting plant ingredients, scored one of the more high-profile rounds, selling a minority stake to the venture arm of spirits maker Constellation Brands early this year. The Southern California startup promotes itself as a festive alternative to alcoholic beverages.
Venice, California-based Magic Mind also picked up a venture round, per a securities filing, as it scales up its offerings of drinkable shots crafted to augment mental performance.
Anything but tap water
It’s a good thing for startups that consumers are accustomed to paying up to quench our thirst with basically anything other than tap water. But given the plethora of options already out there, newcomers are playing in a crowded field.
“The big question starting to emerge is: How big can the shelf get and how many options can consumers truly absorb?” research and accounting firm Ernst & Young posited in a recent report on beverage industry trends. The firm sees certain categories as better poised to cut through the clutter, with wellness drinks having a particular edge.
Sugar-free or low-sugar drinks also appear to be on the rise, at least looking at funded startups, with a sizable chunk of this year’s investment recipient boasting this attribute. It’s not just zero-calorie drinks either. In fact, both startups and established brands are increasingly pushing the envelope on the notion that a drink can be both sweet and protein-rich enough to sub for a steak.
Now that brands have made such strides in the nutritional profile of drinks, the next step will be to see which ones consumers believe actually taste good.
Related Crunchbase list:
Illustration: Dom Guzman
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