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Oct 20, 2019 8:40 AM ET

The Fastest Growing Alkaline Water Brand in U.S. Has Record Month of May

iCrowd Newswire - Oct 20, 2019

CFN Media Group (“CFN Media”), the leading agency and financial media network dedicated to the North American cannabis industry, announces the publication of an article covering the record month of The Alkaline Water Company and the company’s track record of success.

Emphasizing the double-digit annual growth since 2013, food and drink research firm Zenith Global last year called alkaline water an “international growth phenomenon,” with sales topping $631 million in 2017 on a trajectory towards $1 billion in the coming years. Thanks in part to marketing pushes by key brands like Keurig’s Dr. Pepper, Core Nutrition and Coca-Cola’s smartwater, the U.S. is experiencing a particularly impressive boom, with a growth rate in excess of 40% annually.

With pH levels ranging from 7-10, alkaline waters appeal to health-minded consumers that are trending away from sugary drinks while looking to wellness benefits attributed to the beverage. To that point, functional waters represent the most aggressively growing segment in the $18 billion bottled water market.

In the thick of the hunt to capture share in the high pH water space is The Alkaline Water Company Inc. (NASDAQ: WTER) (TSXV: WTER), a name to know as a leading producer of premium bottled alkaline drinking water sold under the brand name Alkaline88®. Enhanced by Himalayan pink rock salt, Alkaline88 has a pH level of 8.8, the perfect balanced level, according to the company. The widening distribution network has the beverage on shelves at national retailers like Kroger, Whole Foods Market, Walmart, CVS and Safeway, as well as tens of thousands of regional retailers, convenience stores and online portals.

Competitive Market Sales Growth

Just like it has done many times before, the past month was another banner one for the Scottsdale, Arizona-based company with its branding initiatives paying off in sales. In fact, Alkaline88 sales are outstripping that of majors like Core, smartwater and Essentia on a percentage-growth basis.

Recently, The Alkaline Water Company released May sales data, reporting record monthly sales of $3.8 million. During the 13-week period ended May 8, 2019, data from Nielson showed that Alkaline88’s sales increase led the list of the top 30 value added water brands in the U.S., making it the fastest growing alkaline water on the market during the period.

To put the growth into perspective, WTER generated record quarterly sales of $7.69 million during the third fiscal quarter ended December 31, 2018. That was up 102% from $3.82 million in Q3 fiscal 2017. As the axiom goes, “Once is an event, twice is coincidence and three times is a trend.” Alkaline88 sales are certainly trending the right way.

Extrapolating the May data, without consideration for continued quarterly growth, puts the company on track for an annual run rate above $45 million in sales.

The growth is impressive considering that Core Nutrition (pH 7.4) held an annualized rate of expansion of roughly 115% for the three years, including an estimated $200 million in revenue in the 52 weeks leading up to Keurig Dr. Pepper agreeing to pay $525 million for the company in September 2018. Two years earlier, Keurig Dr. Pepper paid $1.7 billion for infused-water company Bai, a 7.4x multiple to its 2016 sales of $231 million.

Looking backwards, Core sales were around $43 million Bai’s were around $50 million two years prior to being acquired.

Keurig was looking to jumpstart its infused beverage lineup with the Core buyout to meet demand for health-packed flavored water. In that same lane, WTER is making its brand lineup even more attractive, recently showcasing its new infused Alkaline88 product line at the Western Association of Food Chains (WAFC) convention in Palm Desert, California. Considering the company’s track record of success and evolving product line WTER’s potential as an acquisition target is plausible.

Arguably, Keurig got Core for a bargain, considering companies in the space generally command a valuation at 4x – 6x revenue. In that vein, Essentia (pH 9.5), the eldest of alkaline water brand in the U.S., reportedly hired Credit Suisse last summer to sell itself, looking to fetch $500 million or more when it had about $100 million in annual sales.

At the 12-month pro forma of $45 million – and the current market cap of $69 million – WTER is trading at approximately 1.5x revenue.

Robust Distribution Network

The improving sales at WTER were underpinned by growth across multiple business segments compared to May 2018. Sales in the Northeast were up 100%; receipts in natural/specialty stores jumped 46%, single-serving size sales increased 65% and sales at Walmart rose 29%. The spike in single-serving sales was owed in part to a partnership with E.A Berg Associates forged in January, which has resulted in over 1,100 new convenience store customers for WTER across California and Texas shortly after the agreement.

Further, a new agreement was inked late in May with Premier National Food Distributors, or PDSD (an acronym for premier direct store delivery), that strengthens Alkaline88’s footprint in the Northeast, particularly New York, Connecticut, Pennsylvania, Massachusetts and New Jersey. PDSD has more than 1,000 delivery routes throughout these markets, a fact that is expected to have a “major impact” on direct store delivery and on-shelf availability of Alkaline88 going forward.

CBD Infused Beverages

The brand recognition and widening distribution chain couldn’t come at a better time for The Alkaline Water Company, since it recently expanded its product portfolio with the introduction of its A88 Infused Beverage Division. The company is looking to get in front of exploding demand for products derived from hemp, a cousin of cannabis trumpeted for the therapeutic benefits of its component cannabidiol (CBD) without any psychotropic effects.

A88 Infused products consist of a line of sparkling flavored hemp- and vitamin-infused alkaline water marketed under the Soothe moniker. The company intends to leverage its expansive distribution and brand recognition to become a leader in this beverage segment.

Upon the passage of Agriculture Improvement Act of 2018, or Farm Bill as it’s often called, industrial hemp was legalized throughout America at the start of 2019. This has set off a whirlwind of activity and led to some analyst firms, including the Brightfield Group, predicting that hemp-based CBD will be a bigger market than cannabis in the next few years.

The days of thinking of chia seeds, functional beverages, non-sugar diets and the like as fads are over. Products that are part of healthier lifestyles have worked their way into the mainstream and continue to comprise larger and larger portions of legacy markets. The habits of millennials are going to further support these trends, which puts an exclamation point on forecasts for continued double-digit growth for the foreseeable future.

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The above article is sponsored content. Emerging Growth LLC, which owns and CFN Media, has been hired to create awareness. Please follow the link below to view our full disclosure outlining our compensation:


The Alkaline Water Company Inc.
James Gilmore
Investor Relations
[email protected]

CFN Media
Frank Lane
[email protected]

Contact Information:

The Alkaline Water Company Inc.
James Gilmore
Investor Relations
[email protected]

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