CBD-Infused Sparkling Water
Mountjoy Sparkling makes a line of cannabis-infused beverages.
Its flagship product, a CBD-infused sparkling water, combines the health benefits of cannabidiol (CBD), with filtered carbonated water. The company also sells a tetrahydrocannabinol, or THC-infused, beverage in California where THC is legal.
Infusing beverages with cannabis has created a fast-growing industry. According to Zenith Global, U.S. sales of CBD-based drinks reached $86 million in 2018. But by 2023, sales are expected to climb to $1.4 billion.
This rapid growth has caught the attention of several large beverage companies. According to a September 2019 article from FoodDive, a website providing news and trends on the food industry, these companies have either proposed or initiated plans to incorporate cannabis into their products. These companies include:
• Arizona Beverages, which announced a partnership with Dixie Brands in August 2019 to produce a THC-infused drink.
• Constellation Brands, which owns Corona and Modelo beers, and acquired a 40% stake in Canada’s largest cannabis producer, Canopy Growth Corp., for $4 billion.
• Heineken, which launched Hi-Fi Hops, a THC-infused “beer-like” beverage in medical marijuana dispensaries in California.
• And AB InBev (NYSE: BUD), which is investing $50 million in a partnership with Tilray, a Canadian cannabis company, to research alcohol-free beer with cannabis elements.
Even non-alcoholic-based companies like Coca-Cola, Pepsi, and Starbucks are eyeing possible entries into the cannabis industry by infusing CBD into “functional wellness beverages around the world.”
One of these “functional wellness beverages” could be sparkling water, which itself has seen a dramatic rise in popularity among consumers.
According to 2019 data from Nielsen, annual retail sales of sparkling flavored water reached $2.4 billion. And according to Technomic, a management consulting company focused on the foodservice industry, since 2016, sales of sparkling water have grown by double digits each year. This is compared to traditional soda, sales of which have only grown about 1% annually during the same time frame.
In 2018, LaCroix, a popular sparkling water beverage company, achieved sales of nearly $1 billion. And Spindrift, a beverage company founded in 2010, has seen sales jump from $33 million in 2017 to $100 million in 2019. According to a recent New York Times article, this company has raised more than $40 million from venture capitalists.
Mountjoy Sparkling is capturing the success of both the cannabis and sparkling water trends with its beverages.
The company uses a proprietary process it says is “uniquely suited to edibles and beverages.” The process is trade-named “NanoTonic,” which enables the company to infuse 10mg of industrial hemp-derived CBD and mix it with natural fruit flavors. Available flavors include orange, peach, blackberry, and lemon lime.
The waters are packaged in resealable 16 oz. polyethylene terephthalate (PET) bottles. This material is inexpensive, lightweight, and highly-recyclable.
Mountjoy Sparkling was initially launched in Founder Alexander Mountjoy’s backyard, but has since moved into a warehouse in Petaluma, California. This new location provides truck loading and staging bays, as well as better access to established beverage distribution routes.
Mountjoy Sparkling sells its sparkling water in retail stores in seven states. These include California, Florida, Georgia, South Carolina, Washington, Missouri, and Michigan. Its drinks are sold in small grocery stores, bars, convenience stores, and health food/specialty stores.
The company earns most of its revenue from sales to distributors. On average, a full truckload nets the company $64,800, and each truckload contains 24 pallets. There are 60 cases of 24 bottles on each pallet, bringing the total number of individual bottles per truckload to roughly 34,000.
Drinks are also available direct-to-consumer through Mountjoy Sparkling’s website. A six-pack retails for $30, a 12-pack retails for $55, and a case of 24 sells for $100.
With funds raised, Mountjoy Sparkling will increase marketing efforts, and seek to develop deals with large beverage distributors in 15 additional states.
As more states adopt new regulations regarding cannabis, the company aims to create partnerships with grocery store chains to supply CBD beverages in bulk.
Alex has 25 years of leadership experience, specifically in product design, domestic and overseas manufacturing, and sales management.
Prior to starting Mountjoy Sparkling four years ago, he was Founder & CEO of Dolce Mia Designs. During more than two decades with this company, he built supply chains and sales strategies for Costco, a chain of warehouse-style retail stores. He also developed manufacturing processes and automation systems for this company.
Before that, Alex was a programmer with the Manpower Demonstration Research Corporation, a company seeking solutions to large-scale, global issues.
He earned a Bachelor’s degree in Physics from Tufts University.