B2 Beverage Holdings, Inc

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  • Capital Raise
    300000.0
  • Structure
    Equity
  • Offering Price/Share
    0.0
  • Shares Offered
    266667.0
  • Current Shares Out
    6000000.0
  • Post Offering Valuation
    0.0
  • Post Offering Shares Out
    0.0

Overview

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At $107 billion in annual sales, the U.S. market for beer is the second largest market in the world based on national consumption, behind China. However, the traditional beer category has plateaued amongst consumers ages 30 and older, and amongst 18-29 year olds, as a preferred alcohol it has declined from 71% to 41% over the past two decades. Growth segments include imports, craft beers, ciders and a drinks with various flavor profiles known as “progressive adult beverages”, “alcopop”, “malternatives” and “flavored malt beverages.”

B2 Beverage Holdings, Inc. is re-launching its flagship “malternative” beverage lines, including its award winning
Hard CreamerTM, KalimaTM and Sangria. In 2007, its initial launch year, our Pina Colada Hawaiian Hard Creamer won the gold medal at the World Expo of Beer, and our Fuzzy Navel Hawaiian Hard Creamer won a bronze medal. The Kalima Hawaiian Hard Creamers were selected as finalists for the CSP Retailer Choice Best New Products, and won Best New Product at the 11th Annual Convenience Store News awards.

Our beverage brands are crafted for consumers that prefer a lighter alcohol tasting adult beverage alternative to the usual selection of beer, wine coolers, mixed drinks and flavored malt beverages in the market. In addition, our beverage line offers an unparalleled combination of creamy taste, smooth texture and vibrant colors.

Current malternative, or flavored adult beverages, have nearly identical flavor profiles, making it difficult to distinguish amongst them. Our products are a direct response.

We intend to deliver brands that combine world-class flavor, unique flavor-profiles with dairy-based components to provide for a creamier and richer experience, a clear and clean drink with no extra artificial coloring in high-impact packaging designed to maximize appeal to our target consumers. Our goal is to produce flavored malt beverages that provide the curated experience of the bar, but are convenient, and which taste good, and taste authentic. 

 

Products and Services

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Market Opportunity

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We are focused on developing a leading brand in the malternative beverage category and believe the key to success is rolling out regionally with the goal of building a strong and recognizable national presence. We believe if we can be successful in reaching this goal, that our business has the characteristics desirable for a strategic acquisition: proprietary dairy-based malternative platform and a unique product line that can unlock tremendous value to a buyer that has marketing and distribution infrastructure in place.

M&A activity in the food & beverage industry has been strong through the first half of 2015, with 94 transactions reported. The industry has consistently growth year-over-year, even during challenging economic periods, and as a result, buyers and investors are attracted to the resiliency of the sector.

Key trends include:

  • Buyers targeting “hot” product categories – new product development and introductions are critical to success in the industry. Companies that have distinguished themselves in the market with popular brands and products are highly sought-after acquisition targets.

  • New focus on smaller brands – the competitive landscape of the food & beverage industry has changed dramatically, in that small niche brands are readily accepted by large retailers and mass merchandisers, where they are competing effectively against the leading brands of established players. Today, companies are looking for niche brands that cater to specific consumer preferences, and they are making acquisitions to add such brands to their portfolios.

  • Synergies drive transactions and valuations – M&A transactions in the food & beverage industry are very targeted and highly strategic. Common strategies include acquiring a business that sells a product or brand related to one of the buyer’s own, expansion into a new geographic market, international players wishing to move into the U.S., and larger companies purchasing smaller enterprises with innovative products or advanced capabilities and systems.

  • Private equity is very interested in the sector – private equity firms are attracted to the fragmented nature and relative stability of the food & beverage industry, and they continue to make platform and add-on acquisitions in the sector, performing roll-ups of multiple targets that combined have greater scope, scale and improved standing in this highly competitive industry.

    In addition, based on progress in our business plan and market conditions, we may also consider an initial public offering as a strategy to maximize shareholder value. 

Competitive Landscape

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The progressive adult beverages market is a flavor-driven, innovation-driven segment. In many cases, as new flavors come out, previous ones decline in sales. One of the primary appeals to a core demographic, millennials who are just sorting out their adult beverage palates, is the ability of flavored malt beverages to offer the bar experience at home, with the simplicity of opening a bottle to achieve that experience as opposed to mixing a series of ingredients. In addition, flavored malt beverages are generally between 4% and 5% alcohol by volume which also makes it appealing to this consumer base, contrasted with higher alcohol content in craft beer, wine and hard alcohol categories.

Today’s mix of progressive adult beverages is highly competitive, growing and accounts for 3-4% of total beer sales, or about $3.5 to $4 billion in annual sales. The top 20 brands in the market represent $1.5 billion, or 37% to 40% of total sales. 


Our Solution & Value Proposition

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Sales and Marketing Strategy

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Our packaging is designed to ensure our beverage brands are instantly recognizable. Our Hard Creamer flavors are packaged in a bold black and white color scheme. The Kalima Hawaiian Hard Creamer line features retro-colored labels and Hawaiian-themed vintage- art cartons. All of our beverage lines come in clear 12-ounce longneck bottles to showcase their eye-popping fresh fruit colors and creamy textures.

As mentioned above, we intend to enter into strategic partnerships with Anheuser-Busch distributors in target markets. In our initial launch, we established agreements with more than 200 distributors in key markets and based on preliminary discussions with certain of these distributors, we are confident that our products are highly differentiated, that there is demand for products like ours, and that the timing is better than ever for our business.

We intend to maintain a low cap-ex operating plan. We have entered into a 3-year brewing services agreement with Coldspring Brewing, based in Minnesota, whereby we lease space and brewery equipment to produce and store finished cases of our malt beverages. Under the terms of the agreement, Coldspring Brewing has received all license authorizations necessary for us to operate. In addition, we are required to order and purchase raw materials and supplies from Coldspring Brewing. Coldpsring Brewing is responsible to administrate quality control processes, and to assure compliance with our specifications for production and packaging.

Under the terms of our agreement with Gluek Brewing, we make a best-effort to withdraw all finished products for delivery within 30 days of packaging of the products. We pay a warehousing charge of $7.50 per pallet per month to Gluek Brewing for the storage of product in excess of thirty days. 

Press Releases

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