J. Frank Sigerson Blog | Why beverage brands represent a gold mine for investors | TalkMarkets

J. Frank Sigerson

Business and finance journalist
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I am a business and financial journalist as well as a culture writer focused on covering the following sectors: crypto, crowdfunding, technology, and marketing. I am interested in financial stocks, mostly in biotechnology, healthcare, mining, and blockchain. I also write about IT and design, ...more

Why beverage brands represent a gold mine for investors

Date: Friday, December 7, 2018 6:30 AM EDT

 

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Investing in the beverage industry might not have the same glamor as investing in tech start-ups but it represents one of the fastest growing sectors today. In particular, smaller health-focused brands have experienced phenomenal growth over the last few years. Large manufacturers have lost ground to private label products, which are perceived to have a higher quality than mass manufactured labels. This means that beverage stocks, in particular, premium waters, make for a good investment play thanks to a rapidly growing consumer base.

There is big money to made in the beverage industry. Some huge celebrities are raking in huge gains from their investments. Basketball legend and future Hall of Famer Kobe Bryant, for example, made a $6 million dollar investment in sports drink BodyArmor in 2014. The drink was dubbed by many as the healthier alternative to Pepsi’s (NYSE:PEP) Gatorade, and BodyArmor was eventually purchased by Coca-Cola (NYSE:KO) in a majority stake deal.

Today, Bryant’s investment is now worth $200 million—it grew by more than 300 percent in a span of only four years. It is even expected to top $400 million by the end of 2018.

Bryant is not the only one who saw the potential of a beverage investment. At the height of his career in 2004, rapper 50 Cent invested an undisclosed amount in Vitamin Water. This, too, was bought by Coca-Cola in a $4.1 billion deal.

Bottled water in, soft drinks out

Sports drinks aside, bottled water, a subsector of the non-alcoholic beverage industry, has unexpectedly risen to the top of the list of beverage stocks in recent years. In 2017, it was the number one beverage product in the United States, according to the International Bottled Water Association and the Beverage Marketing Corporation. Production grew to 13.7 billion gallons— an increase of 7% from the previous year.

 

Bottled water products are performing surprisingly well. (Source)

Consumers are constantly looking for a healthier alternative to their refreshments, and bottled water solves that problem—it’s affordable and conveniently available. It can be drunk ice cold or as is; it can be carbonated or not. Most of all, it’s the best bet for cutting back on calories.

And more than regular water, bottled alkaline water has exploded in popularity, making it a more attractive option for a lot of people. A top consumer choice, it is said to improve one’s digestion, support weight loss, help with diabetes and blood pressure, and more.

Studies have also shown that Alkaline water could boost immunity, slow down the body’s aging process, and neutralize the acidity in the gastrointestinal tract. Since it contains minerals like magnesium and calcium, alkaline water also promotes better bone health.

The top innovator in the bottled water sector

With so many brands available its surprising to see one competitor stand out so clearly. The Alkaline Water Co. (OTCMKTS:WTER) (CSE:WTER) represents one of the strongest pure play companies in the industry, with a twist. Their flagship brand, Alkaline88, has already achieved an impressive distribution network, including big names like Kroeger’s, Walmart and CVS.

Building on this success The Alkaline Water Co. recently announced the creation of the A88 infused beverage division. This division is developing the exciting CBD infused Alkaline88 water. This product is the first of its kind in the premium bottled water market and will capture a share of an emerging market predicted to be worth $600 million.

The Alkaline Water Co.’s products are available in over 47,000 retailers in the U.S. It is also hoping to add 10,000 more stores by the end of the current fiscal year. As of now, Alkaline88 is one of the top products in the beverage section in 40 of the 50 top grocers in the country. This has lead to a massive revenue growth, with an increase of 78 percent to $8.6 million during the company’s fiscal second quarter.

Even without the lure of a future acquisition The Alkaline Water Co. represents a solid investment. It recently submitted the application of its common shares on the NASDAQ Capital market. In doing so, the company will have access to a large base of retail and institutional investors nationwide and in the international scene. It also believes that the uplisting will unlock the true value of Alkaline88.

The beverage industry is growing larger by the day. Investors that want to earn big like Kobe Bryant and 50 Cent should begin studying the brands that could grow big in the coming years. Though there are already a lot of companies in the market, the potential of bottled water—and bottled alkaline water at that—remains promising. It is definitely an avenue that investors should consider immediately.

Disclaimer: This and other personal blog posts are not reviewed, monitored or endorsed by TalkMarkets. The content is solely the view of the author and TalkMarkets is not responsible for the content of this post in any way. Our curated content which is handpicked by our editorial team may be viewed here.

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