CANarchy Makes First Non-Alc Partnership, Inks Distribution Agreement with Recovery Drink Revitalyte

The CANarchy Brewery Collective has forged its first non-alcoholic beverage partnership.

The craft brewery rollup announced today a master distribution agreement with Revitalyte, a recovery beverage sold in convenience and liquor stores that is targeted to those seeking a remedy for hangovers and athletes looking for a recovery drink.

Revitalyte, which touts electrolyte replacement and zinc replenishment, is sold in 33.8 oz. bottles in three flavors — Grape, Mixed Fruit and Strawberry — and the packaging features callouts suggesting consumers “compare [it] to Pedialyte.”

In fact, Revitalyte positions itself as a less embarrassing alternative for adults who will no longer have to head to the baby aisle of drugstores and make excuses for why they’re buying Pedialyte.

CANarchy president Matt Fraser declined to detail the structure of the brewery platform’s deal with Revitalyte, or whether equity was exchanged. However, he described the partnership as “a commercial relationship” in which CANarchy will serve as the brand’s master distributor. He also noted that this is CANarchy’s “first foray into something other than a full acquisition.”

“We’re essentially creating a fourth tier in the three-tier system, and we’ll be distributing through our wholesale network Revitalyte products,” he said.

“Similar to when our distributors log on to our ordering portal and they order Dale’s Pale Ale or Wild Basin or Jai Alai, right on there will be Revitalyte,” he explained. “And we’ll ship it along with our beer directly to our wholesalers.”

Fraser added that the potential exists to expand the partnership in the future.

“This is just the start of what we think will be a very long term relationship,” he said.

For CANarchy — whose beer brands include Oskar Blues, Cigar City, Wasatch Brewery, Squatters, Perrin Brewing, Deep Ellum and Three Weavers — this marks the company’s first foray into the non-alcoholic beverage market.

“We think it’s a massive opportunity for CANarchy, for Revitalyte and ultimately for our wholesaler and our retail partners,” Fraser added. “And we wouldn’t do this if we didn’t think it was a big, big opportunity.”

That opportunity is in the $500 million electrolyte solutions beverage market, with half of those sales being made to adult consumers, and part of a multi-billion dollar rehydration market, Fraser said.

“It’s one of the fastest growing segments of that market over the last five years,” Fraser said. “It’s been growing 17%, and it’s actually accelerating. Year-to-date, this year it’s up 28%, which got us really, really excited about playing in this space.”

Although Revitalyte is currently sold in 20 markets, CANarchy will look to expand distribution of the product within the independent liquor and convenience channels via the company’s network of more than 200 wholesalers by the end of the Q1 2021.

“We’ve got agreements in front of distributors right now,” Fraser said. “It’s being presented in our ABP meetings to every single wholesaler, and we will make a big push to be everywhere by the end of Q1.”

Revitalyte founder Ryan Leonard told Brewbound that his product checks two boxes for consumers, with a bonus of cutting out the sometimes embarrassing conversations with drugstore employees by making the product available in liquor and convenience stores.

“It’s a huge impulse buy because people know it, trust it and understand it,” he said. “And it’s got an incredible rebuy rate because it makes you feel so much better so quickly in a variety of situations, whether it’s athletic or social or what have you.”

According to Leonard, Revitalyte is most effective when a consumer drinks half a bottle at night and the other half in the morning.

“When we look at a sports drink that really has a high sugar content from quick carbs that keep you energized during a long workout, Revitalyte’s sole purpose is just getting water back into your system and into your cells when your body really needs it most,” he explained.

Coming into the relationship with CANarchy, Revitalyte brings with it an existing advertising and licensing partnership with Barstool Sports. In 2021, Leonard said the company will reveal various Revitalyte and Barstool collaborations, including co-branded products.

So how does CANarchy fully unlock the cross-promotional potential of Revitalyte and its beer brands? Fraser said the company is in the early stages of figuring that out.

“We’ve talked about, do you put this in a mixed pack, where there’s one Revitalyte with 11 different other products,” he said. “But we think there’s a lot that you can ultimately do together. But again, there’s a lot of low hanging fruit to get this thing national as quickly as possible, and then we’ll start the wheels going and I’m sure we’ll figure out some cool ways to collaborate between the two companies in the second half of 2021.”

One opportunity that is a given though is Revitalyte will be sold in CANarchy’s various brewery taprooms. However, the product won’t be produced at any of CANarchy’s facilities. The “medical grade food” product will continue to be produced by a third-party contract manufacturer, Fraser said.

Asked if the Revitalyte partnership signals a new direction for CANarchy beyond craft beer, Fraser said “time will tell.”

“It’s a relatively low risk move on CANarchy’s part,” he said. “We’re excited about the category, excited about the product and ultimately working with Ryan and I think it could lead to different opportunities down the road. But right now, the key focus is getting national as quickly as possible and we’ll see where it goes.”