The New Player in the CBD Beverage Space
November 5th, 2018
Cannabis based beverages have been making headlines in the industry lately. There is, of course, Constellation Brands’ major investment in Canopy Growth, a marriage of alcohol and cannabis giants. On a smaller scale, New Age Beverages Corp. recently announced its upcoming debut of a CBD-infused line of drinks. The announced plan triggered a run on the company’s stock. Over the course of three days (9/19-9/21) the price ran from $2.81 to a high of $8.86 before settling to $6.10 entering the weekend.
The Alkaline Water Company (TSXV: WTER) (OTCQB: WTER) came out with two announcements heralding its entry into the cannabis beverage space. A88 Infused Beverages Division, Inc., (A88 Infused) a wholly owned subsidiary of The Alkaline Water Company Inc., secured a deal with American Nutritional Products to manufacture and package the new product lines out of ANP’s Nevada facility. Considering Alkaline Water’s extensive distribution footprint, proven marketing strategies, and skyrocketing revenues, these developments could add significantly to the company’s prospects over the coming quarters.
CBD and More
Alkaline Water’s national success with its flagship product, Alkaline88®, makes A88 Infused the next logical step in expanding the company’s national footprint. The company is developing a line of enhanced products using the same proprietary Electrochemically Activated Water (ECA) system it has employed to create its signature 8.8 pH Alkaline88® without the use of any chemicals.
Four new product categories are already in various stages of development and will soon be available in markets nationwide and in Canada. All four have been developed based on current consumer demand and market potential for enhanced and functional beverages. A88 Infused is uniquely positioned to capitalize on this growing trend in the enhanced beverage space with the following products:
Hemp-derived CBD infused Alkaline88® water
CBD (cannabidiol) products are gaining momentum in the health and wellness world, with some scientific studies confirming it may help treat a variety of ailments like chronic pain and anxiety. Further research is being done, but there are also promising indications that CBD may be helpful in treating many other conditions such as depression, cancer and cancer treatment side effects, seizures related to neurological disorders, and heart health or high blood pressure issues to name a few. Consumer interest in CBD has risen to all-time highs as researchers continue to explore the potential medical & health benefits of cannabidiol. The company’s hemp-derived CBD infused Alkaline88® water will initially be available in the 500 ml size with a dosage of 10 mg of CBD per bottle.
Naturally Flavored Alkaline88® water
Naturally flavored waters have gained popularity with many U.S. consumers as a healthy alternative to soft drinks, and they contain less sugar and calories compared to carbonated drinks and juices. Growth rates in the essence water segment have accelerated over the past three years and is expected to double to $118 million in sales by 2021 and Naturally Flavored Alkaline88® water is poised to be part of this growing trend.
Natural Sparkling Alkaline88® water
While sales of sweetened beverages, like soda, declined by more than 8 percent by volume from 2011 to 2016, carbonated water grew by 70.4 percent. Using its unique technology, Alkaline88® is bringing the first natural sparkling alkaline water to the market in the coming months with its Natural Sparkling Alkaline88® Water products.
Alkaline88® infused with Natural Vitamins and Minerals
Consumer demand for enhanced and functional beverages is at an all-time high and Alkaline88® is positioning itself to capture a major share of this new market. The company has been exploring various water-soluble plant-derived vitamins and minerals to enhance its Alkaline88® Natural Vitamins and Minerals Water line. The company’s primary focus has been towards natural vitamin infusion combinations that support energy and offer the benefits of vitamin B-12. Alkaline88®’s commitment is to provide even more healthful beverage products while expanding on the previous success of their premier product, Alkaline88®.
State of the Art Facility
Alkaline Water’s co-packing and development agreement with ANP gives the company a quick path to market with plenty of room for growth. ANP’s facility is FDA registered, cGMP compliant, and has been certified by both the International Center for Cannabis Therapy and the National Sanitation Foundation. Basically, products made there can safely and legally be distributed throughout North America.
Additionally, the ANP team has years of experience in nutritional product development and formulation that should add quality and efficiency to the new infused beverage division’s efforts. ANP’s history with cannabinoid and other plant extraction techniques, when combined with Alkaline’s chemical-free ECA water technology, should make for a formidable entrant into the enhanced and infused water market. Alkaline hopes to launch several new infused products by the end of 2018.
Looking Back, and Ahead
Alkaline Water’s revenue growth has been impressive. Between 2014 and 2018, the company’s fiscal year end revenues have grow from $600,000 to almost $20 million. The company is projecting $40 million by the end of fiscal year 2019. The company has averaged 435 percent growth since 2014 and is projecting a 102 percent year over year increase in 2018.
The addition of A88 Infused and the variety of high-value products planned there could accelerate Alkaline’s growth significantly. The company is tapping into the highest growth sectors of North America’s beverage market with the flavored, enhanced, and sparkling water offerings. As for CBD beverages, the category is in its infancy. Judging from the investments made in the space, however, it could be the biggest growth factor of all. Stay tuned for further developments.
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