- Sparkling water brand Spindrift raised $29.8 million in a new funding round, according to a filing with the U.S. Securities and Exchange Commission.
- The latest funding round brings Spindrift's total financing to at least $70 million, according to Crunchbase. The previous round the company received was $20 million led by VMG Partners in 2018. It was used to ramp up the company's advertising.
- Spindrift, which flavors its sparkling water with real squeezed fruit, launched in 2010. Previous investors in the sparkling beverage company include Prolog Ventures, Almanac Insights, KarpReilly and VMG Partners.
This is Spindrift's biggest single funding round so far. As the sparkling water space grows, the company could use this money to help the brand stand out.
More brands have gotten into the segment as the category becomes increasingly popular with consumers — especially millennials. Sales of canned sparkling water jumped 43% in 2018 from the previous year, according to Nielsen.
So far, Spindrift has grown with the category. The company reported sales skyrocketed 800% from 2016 to 2018, and growth hasn't slowed since. The brand also saw a 127.5% increase in dollar sales to $37.4 million for 2019, which makes it one of the largest startup brands in the space, according to IRI data reported by Bevnet.
Given the brand's growth, it shouldn't come as a surprise that Spindrift has been able to rack up investments. Additionally, the sparkling water category overall has attracted millions of dollars in venture capital investment in recent years as drinking habits change.
"I think what's happened is in a lot of ways, sparkling water has become what soda was. Bubbles haven't gone away. People love bubbles. So that's good news for all of us that are in that space," Bill Creelman, Spindrift's CEO, previously told Food Dive.
But Spindrift's growth could slow as more big beverage companies launch their own drinks in the space as consumers turn away from soda. Innovation and healthier beverages, like sparkling water, have helped soda makers improve sales.
Coca-Cola is introducing its new sparkling water brand Aha this month, the company's first major new brand launch since 2006. Keurig Dr Pepper acquired sparkling water brand Limitless in January. And Pepsi's bubly, which launched in 2018 and has no artificial flavors or sweeteners, has grown to be a popular offering. Spindrift only gets its flavor from juice, contrary to market leader LaCroix, which uses some "natural flavors" and has struggled in the past year.
As more companies enter the space, brands will need to continue innovating to keep up. Analysts said a lack of meaningful innovation was one reason why National Beverage Corp., which owns LaCroix, saw its stock reach a 52-week low this past summer.
But Spindrift has been innovating and will likely continue to do so with this new funding. The day before the SEC filing, Spindrift announced the launch of a new flavor: Pineapple. The new product, which is made with pineapple juice, will be available next month on the company’s website.
Spindrift's CEO Creelman said in the release announcing the new flavor that choosing the right ingredients is the most important step in their innovation process since they don’t add sugar. He said one reason why they went with this new flavor is because "there has never been a sparkling water made with real pineapples."
The pineapple flavor is the first new product from the company since it released its Lime drink last year. This latest funding round can allow Spindrift to continue to launch products and flavors that make it stand out in the market and stay competitive in the growing category.