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In a press release delivered July 20, Anheuser-Busch announced its acquisition of the energy and sparkling water company, Hiball Energy. The company manufactures organic energy drinks and energy-infused sparkling waters sold under the same name, as well as a line of sparkling juices and nonenergy-infused sparkling waters branded under the name "Alta Palla".
Hiball Energy was founded in 2005 in San Francisco by Todd Berardi, who sold the first batches out of the back of his car. Over time he, his wife and creative director, Alyssa Warnock, and his VP of business development, Dan Craytor grew the startup into the 20-person company it is today.
Their products feature a proprietary mixture organic and energy-producing compounds guarana, ginseng and caffeine in addition to Vitamin B3, B5, B6, B12. The beverages are intended to provide energy and fruit flavorings while being devoid of sugar and artificial additives. They note that, according to Chicago-based health & wellness market analytics firm Spins, they are the United States' fastest growing brand of organic energy drinks.
The company currently has almost a dozen distributors across the United States and retails in over 50 local and national convenience and grocery stores, according to their website. But Anheuser-Busch stated Hiball and Alta Palla could profit from the international brewing company's network of wholesalers and generations of operational experience.
"Together with Anheuser-Busch, we will be able to bring our delicious, refreshing and organic/fair-trade products to more consumers in more places, growing our brands and our share of the energy and sparkling markets," said Todd Berardi in the Anheuser-Busch press release.
"The combination of Hiball's category-leading organic energy drinks and Alta Palla's organic sparkling juices and sparkling waters together with our network and operational know-how will create tremendous growth opportunities for these brands," said João Castro Neves in the press release, Anheuser-Busch president and CEO. "Our goal is to deliver Hiball products to new markets, while preserving their culture and brand identities."
The Hiball product line targets a growing sector of the beverage market – consumers that want naturally sourced ingredients, in low-calorie products that provide energy, from companies that are socially and environmentally conscious.
"Todd, Alyssa, Dan and the entire Hiball team have created an incredible business, developing some of the fastest-growing brands in the beverage industry and giving their loyal consumers the choices they love," said Neves. "We are very happy to partner with these three entrepreneurs and invest to help them achieve their dreams."
The company's current leadership will maintain management of the company as well as any non-profit work and athlete sponsorships the company has.
Details of the purchase are still undisclosed. And although the purchase won't be finalized until this year the statement makes clear Anheuser-Busch's ambitions to capitalize on the growing health-conscious sparkling water and energy drink market.
Anheuser-Busch and Hiball Energy are capitalizing on changing market demands
In a July article, Beverage Industry Magazine reported that water surpassed carbonated soda in 2016 for most consumed beverage by volume in the United States, according to an announcement by Beverage Marketing Corporation.
Market research agency Mintel stated in its January 2016 report "Bottled Water – US" that bottled water had over $15 million in sales in 2015, up 6.4 percent from the previous year, with sales growth expected to continue through 2020. The sparkling and mineral water corner of the market is projected to grow 75.1 percent over the same period.
Mintel states that half of bottled water drinkers are choosing flavored water as a healthy alternative to sugary sodas, but they are also hoping to get more out of their water-based beverages than simply having their thirsts quenched.
"Bottled water's popularity is allowing it to quickly evolve with more premiumized offerings, which include unique water sources and more sophisticated flavors, and a heightened focus on functional waters," said Elizabeth Sisel, former Mintel beverage analyst, in Beverage Industry's October 2016 issue. "There might be more opportunity with the added functions bottled waters can offer. A net of 83 percent of consumers want some sort of nutritional or functional benefit when creating their ideal bottled water. Nutritional benefits are important to bottled water consumers, as many drink bottled water for health and hydration."
According to Mintel research, 43 percent of consumers want their water to be infused with vitamins and 29 percent want energy and minerals, respectively, in their water as well.
Still, water takes the lion's share of the current market, but Beverage Industry Magazine reported that sparkling water still made $2.3 billion between May 2015 and 2016, a 16 percent increase on the previous year, according to Chicago-based Information Resources Inc.
Hiball's organic and energy-inducing products meet the demands of the growing consumer base that wants healthy and functional beverages choices instead of artificially flavored and sugary options. The company's investment from Anheuser-Busch will open their products to a potentially global network of wholesale distribution in convenience, grocery, and retail stores that could be well received if market predictions are accurate.
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