Beverage Companies Turn to Healthy Drinks as Consumer Demand Shifts

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Jan 17, 2019, 09:00 ET

NEW YORK, January 17, 2019 /PRNewswire/ --

The beverage industry is being challenged with expanding or diversifying its portfolio in order to meet the changing consumer demand. Many large beverage companies are already investing in or acquiring other beverage businesses in order to accelerate their growth. The industry is already in its maturity stage, however, the beverage market is still expected to witness steady growth. According to data compiled by Allied Market Research, the non-alcoholic drinks market was valued at approximately USD 1.54 Trillion in 2015 and is expected to reach USD 2.09 Trillion by 2022. The non-alcoholic industry is being driven by seasonal demand and various campaigns. Additionally, with government initiatives to promote healthier drink options, many beverage companies have added product options to promote health and wellness. Koios Beverage Corp. (OTC: KBEVF), GNC Holdings, Inc. (NYSE: GNC), The Coca-Cola Company (NYSE: KO), Keurig Dr Pepper Inc. (NYSE: KDP), Cott Corporation (NYSE: COT)

The soft drinks segment accounts for a large portion of the non-alcoholic drink market. However, the segment is expected to decline in market share due to escalating health concerns over obesity and diabetes. Furthermore, the soft drink segment is also being limited by government regulations related to sugary drinks. The tea and coffee segments, however, are projected to experience the highest growth rate and is identified as a lucrative sector for investment. These two segments are appealing due to the beneficial effects associated with antioxidants and the prominence of the cafe culture, even though tea and coffee currently account for a small market share of the overall beverage industry. Now, due to the recent consumer shifts in demand, healthier drink options are becoming widely popular. "Taste and price are no longer the only criteria for beverage launches: brands need to meet consumer demand for health, natural ingredients, responsible sourcing and sustainability. While the baseline for innovation has become more demanding, there is still a huge white space for new ideas and products," according to Zenith Global.

Koios Beverage Corp. (OTC: KBEVF) is also listed on the Canadian Securities Exchange under the ticker (CSE: KBEV). The company just announced breaking news that, "has received its first purchase order with GNC Holdings, Inc. (GNC), a leading global health and wellness brand with thousands of retail stores across the US and Canada. It is the largest single order for product that Koios has received in its corporate history.

The order is for Koios's four most popular flavours - Apricot Vanilla, Berry Genius, Peach Mango, and Pear Guava. The beverages will be available for purchase initially in approximately 2,700 GNC retail stores in the US

Pittsburgh-based GNC has more than 6,400 retail locations throughout the United States and Canada and franchise operations in approximately 50 international markets. GNC Canada is based in Mississauga, Ontario and operates as a subsidiary of GNC.

"The response to our new product lines at a regional level has exceeded our forecasts and expectations," said Koios CEO Chris Miller. "Demand across the US has grown exponentially and our new national roll out with GNC will allow us to serve our ever-growing consumer base.

"The alignment with GNC is a perfect fit for Koios," Miller added. "GNC is the gold standard when it comes to being a well-known, go-to source for health, wellness and sports nutrition products."

Koios is an emerging player in the functional beverages industry. It has developed a proprietary blend of nootropics and natural organic compounds to help enhance a person's ability to focus and concentrate.

"Securing a partnership with the leading nutritional retailer in the world quickly validates our product and increases the demand in the market place for products such as ours," Miller said.

GNC sets the standard in the nutritional supplement industry-demanding truth in labeling, ingredient safety and product potency, all while remaining on the cutting-edge of nutritional science. As the company has grown over the years, so has its commitment to living well.

Koios is expected to be available in GNC stores before the end of Q1, 2019.

About the Company's Business

The Company, through its wholly-owned subsidiary Koios, Inc., is an emerging functional beverage company which has a large and growing distribution network of retail locations across the United States in which to sell its products. Koios has relationships with some of the largest and most reputable distributors in the United States, including Europa Sports, SportLife Distribution, KeHE, and Wishing-U-Well. Together these distributors represent more than 80,000 brick-and-mortar locations across the United States - from sports nutrition stores to large natural grocery chains including Whole Foods and Sunflower markets. Through its partnership with Wishing-U-Well, Koios also enjoys a large presence online, including being an Amazon choice product.

Koios uses a proprietary blend of nootropics and natural organic compounds to enhance human productivity without using harmful chemicals or stimulants. Koios products can enhance focus, concentration, mental capacity, memory retention, cognitive function, alertness, brain capacity and create all day mental clarity. Its ingredients are specifically designed to target brain function by increasing blood flow, oxygen levels and neural connections in the brain.

Koios recently launched a wholly owned subsidiary, Cannavated Beverages Co. to develop a line of cannabis infused, brain-healthy drinks for the legal marijuana market.

Koios is one of the only drinks in the world to infuse its products with MCT oil. MCT oil is derived from coconuts and has been shown to help the body burn fat more effectively, create lasting energy from a natural food source, produce ketones in the brain, allowing for greater brain function and clarity, support healthy hormone production and improve immunity. For more information, please visit our website: https://www.mentaltitan.com/"

GNC Holdings, Inc. (NYSE: GNC) is a global health and wellness brand that helps people live well. GNC Holdings, Inc. recently reported its consolidated revenue of USD 580.2 Million in the third quarter of 2018, compared with consolidated revenue of USD 613.0 Million in the third quarter of 2017. Revenue in the prior year quarter included USD 20.8 Million related to Lucky Vitamin, which was sold on September 30, 2017. Same-store sales decreased 2.1% in domestic company-owned stores (including GNC.com) in the third quarter of 2018. Excluding the impact of higher loyalty points redemption in the current quarter compared with the prior year quarter as the program matures, same-store sales decreased 1.3%. In domestic franchise locations, same-store sales decreased 4.1%. "During the third quarter, although our comparable same-store sales were softer than Q2, we demonstrated our ability to respond to market dynamics and drive sales improvements progressively as we moved through the quarter," said Ken Martindale, GNC's Chairman and Chief Executive Officer. "With the finalized terms of our partnership with Harbin, we have completed the first important step in strengthening our capital structure and accelerating our expansion in China. Moving forward we are focusing on continuing the strategy of repositioning our business and executing our strategic plan."

The Coca-Cola Company (NYSE: KO) is a total beverage company offering over 500 brands in more than 200 countries and territories. The Coca-Cola Company recently announced that it has completed the acquisition of Costa Limited, from Whitbread PLC. The USD 4.9 Billion transaction follows approval from regulatory authorities in the European Union and China. Costa, which has operations in more than 30 countries, gives Coca-Cola a significant footprint in the global coffee business. Worldwide, the coffee segment is growing 6% annually. Costa has a scalable platform across multiple formats and channels, from the existing Costa Express vending system to opportunities to introduce ready-to-drink products. "We see great opportunities for value creation through the combination of Costa's capabilities and Coca-Cola's marketing expertise and global reach," said James Quincey, Chief Executive Officer of The Coca-Cola Company. "Our vision is to use the strong Costa platform to expand our portfolio in the growing coffee category."

Keurig Dr Pepper Inc. (NYSE: KDP) is a leading coffee and beverage company in North America, with annual revenue in excess of USD 11 Billion. Keurig Dr Pepper announced last year the successful completion of the merger between Keurig Green Mountain and Dr Pepper Snapple Group. The transaction creates the seventh-largest company in the U.S. food and beverage sector and third-largest beverage company in North America, with annual revenues of approximately USD 11 Billion. Commenting on the announcement, Keurig Dr Pepper Chief Executive Officer Bob Gamgort stated, "The combination of these two great companies creates the scale, portfolio and selling and distribution capabilities to compete differently in the beverage industry. With a large stable of iconic brands and the leading single-serve coffee brewing system on the market, KDP has the ability to satisfy any beverage need or consumption occasion-hot or cold, at work or at play, at home or on the go-and the capability to get our brands to consumers virtually anytime and anywhere they purchase beverages. I am honored to lead this great team and excited that together we will challenge this industry in a new way."

Cott Corporation (NYSE: COT) is a water, coffee, tea, extracts and filtration service company with a leading volume-based national presence in the North American and European home and office bottled water delivery industry and a leader in custom coffee roasting, blending of iced tea, and extract solutions for the U.S. foodservice industry. Cott Corporation recently announced that DS Services, a Cott Corporation subsidiary, acquired The Mountain Valley Spring for USD 78.5 Million in cash from Great Range Capital. Mountain Valley is a fast-growing American brand of spring and sparkling water and is one of the most recognized home and office distribution ("HOD") brands in the United States. It has been bottling in glass continuously since 1871, with one production facility in Hot Springs, Arkansas, and four protected and owned springs in the Ouachita Mountains with excess capacity to supply long-term demand. Channels of business include HOD, the natural food channel, on-premise, E-commerce and strategic contract packing. "The Mountain Valley acquisition is another positive step in building out our water solutions portfolio and meeting our stated desire to continue to pursue acquisitions in the growing water and coffee segments, where we believe our platform, operating strength and synergies can be leveraged," commented Tom Harrington, Cott's Head of Route Based Services and incoming Chief Executive Officer.

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