Vancouver's Nude Beverages has sold its ready-to-drink (RTD) product line to Toronto-based alcohol conglomerate Corby Spirit and Wine Ltd. (TSX:CSW-A; TSX:CSW-B) for $11 million.
While that might sound like a lot of money, at least one large shareholder is disappointed with the transaction.
Co-founder Jerin Mece, who joined current CEO Julius Makarewicz to help raise money in 2016 and to officially launch the venture in mid-2017, had an acrimonious departure from the business in 2021, he told BIV this afternoon.
Mece said he is the second-largest shareholder in the business and that there are significant creditors who will get paid before any money trickles to shareholders.
"The shareholders will not see a penny," Mece predicted. "It's literally the worst-case scenario [for investors.]"
BIV reached out to Makarewicz through two public relations professionals who have worked with the brand but did not hear back from him. Nude Beverages has no media contact on its website.
The transaction Corby revealed today is that its Ace Beverage Group Inc. (ABG) plans to acquire the refreshment-beverage maker's RTD business using existing financing.
Corby bought ABG last year.
"The transaction accelerates Corby's and ABG's shared path to leadership of the RTD category in Canada by addressing a key priority of increasing market share in Western Canada," Corby said in a news release.
The deal is set to close by the end of Corby's fourth quarter, which would be the end of June, the company said. Closing depends on the BC Supreme Court issuing an approval and vesting order, Corby added.
"Nude's standing as a key RTD player in the Western Canadian market perfectly complements our existing position in Ontario," said ABG's CEO Cam McDonald in the news release.
After Mece left the company, he moved on to focus on other ventures. In 2022, Mece was one of five founders of SakeBomb, which makes sake-based RTDs.
His day job is general manager of Surrey-based Central City Brewers and Distillers Ltd., which he said is growing in leaps and bounds.
"We're going to grow by double digits, if not triple digits, in our own beer, when the beer categories are down about eight per cent in the province," he said.
The non-alcoholic beer branded Street Legal is another fast-growing brand for Central City, Mece said.
"We've made some significant capital improvements," he said. "It's a tough time for people out there, and we're going to offer some high quality beverages at a very accessible, and affordable price."
He said he wished the Nude Beverages brand and its new owner much success.
B.C. has had role creating refreshment-beverage category
B.C. has had a role in helping invent the refreshment-beverage category, given that Okanagan-based Mark Anthony Group Inc. owner Anthony von Mandl, created Mike’s Hard Lemonade in 1996.
In 2015, von Mandl sold the Canadian and international rights for that drink to Labatt for a reported US$350 million, as part of a deal that included Palm Bay vodka coolers and Okanagan Premium ciders. BIV published this profile of von Mandl in 2014, about his rise from being virtually penniless to being the owner of a company that then generated $500 million annually.
Von Mandl in 2016 added more innovation by creating White Claw spiked spritzer, launching the drink in the U.S. and seeing it become a runaway sensation.
He had to wait until 2020 to debut the drink outside the U.S. because his 2015 agreement with Labatt included a five-year non-compete clause.
White Claw’s early 2020 Canadian release resembled “a new Apple iPhone launch, with hundreds of fans lined up around the block," Scott Walton, now president of the Mark Anthony Group, told BIV in 2021.
In 2020, Labatt also bought Delta-based Goodridge & Williams, which makes RTD Nutri vodka and soda drinks, along with spirits and mixed drinks.
Refreshment beverages' highest selling quarter is the three months ending Sept. 30. In that quarter in 2023, the British Columbia Liquor Distribution Branch said B.C. retailers, restaurants and pubs spent $143.788 million on wholesale refreshment beverages, up more than 8.4 per cent from the same quarter in 2022.
