Better-for-you beverage maker Rowdy Energy raises $13M

Source: fooddive.com

Dive Brief:

  • Better-for-you energy drink brand Rowdy Energy raised a $13 million funding round, according to a press release. Forty investors participated in the round, including private equity fund CircleUp, Marcus Lemonis, The Kraft Group, Scott Borchetta and Fanatics Executive Chairman Michael Rubin. 
  • Founded by NASCAR driver Kyle Busch and beverage industry veteran Jeff Church, Rowdy Energy says it plans to use the funding to boost its marketing and grow its retail partnerships. It’s currently found in more than 25,000 stores in the U.S.
  • While energy drinks have had a poor health reputation in the past, several companies are trying change that image and capitalize on the growing functional segment. Beverage giant PepsiCo, for example, introduced Mtn Dew Rise Energy in March, a line of energy drinks with vitamins, antioxidants and other ingredients to help with immune support and mental clarity. 

Dive Insight:

Energy drinks are a well-established segment of the beverage industry thanks to consumers’ never-ending quest for a pick-me-up. The energy drink market is expected to grow at a compound annual growth rate of 7.2% to reach $86 billion by 2026, according to Allied Market Research. But consumers want more than just an energy boost from beverages in this category as they seek to lower their sugar intake and improve their overall health.

In a bid to differentiate their products and to cash in on the growing interest in functional ingredients, a number of energy drink makers are launching products that contain more than just caffeine. Rowdy Energy’s drinks have 160 mg of natural caffeine that is derived from green tea. It also adds nootropic L-theanine, an amino acid found in tea and some mushrooms. Some studies show it can boost serotonin levels, which helps balance mood, improve sleep and increase focus, according to Medical News Today.

But Rowdy faces stiff competition from a number of new and entrenched beverage players that are also looking to stake out territory at the intersection of energy drinks and functional ingredients. Molson Coors Beverage inked a deal in 2021 to be the exclusive distributor of nonalcoholic energy drink ZOA, which contains better-for-you ingredients like vitamins, electrolytes and amino acids. Its lack of artificial ingredients, additives or preservatives also makes it an appealing option for the clean label crowd.

Keurig Dr Pepper and other regional players are distributing Runa Clean Energy, an organic drink that contains energy-boosting guayusa leaf from Ecuador. It also comes in no-calorie and no-sugar varieties. Celsius started as a niche brand among the fitness-oriented consumer segment and has since exploded in growth thanks to its platform around functional ingredients and using ingredients it says increases metabolism to burn more more calories during exercise.

Rowdy’s backing from NASCAR celebrity Kyle Busch may help it stand out against the cluttered market, although other companies have used star power to lure in more consumers. NBA superstar LeBron James, for instance, is promoting PepsiCo’s Mtn Dew energy drink line.   

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