Sierra Nevada Brewing Co. has made a minority investment in Riot Energy, a Venice, California-based energy drink company. The California brewery will “initially serve as an investor,” but will “eventually produce and package Riot Energy products” once its CanDo Innovation Center is up and running.
Sierra Nevada announced construction of the 85,000 sq. ft. CanDo facility in September. The Chico, California-based production facility will have a 500,000-barrel annual capacity and will be dedicated to beyond beer offerings, including Strainge Beast hard kombucha and non-alcoholic versions of Sierra Nevada’s existing beer offerings.
“Like Sierra Nevada pioneered a successful path for craft beer amongst mainstream audiences, Riot Energy is challenging big energy drink brands with their better-for-you energy drinks,” the companies wrote in a press release.
Sierra Nevada was the third-largest craft brewery by volume in 2021, according to the Brewers Association (BA). The company produced more than 1.1 million barrels of beer in 2021, a -1% decline year-over-year (YoY). 2022 was “relatively flat and down just slightly from a volume perspective,” Sierra Nevada VP of sales Ellie Preslar told Brewbound in September.
The investment in Riot may help the more than 40-year-old brewery connect with younger consumers who are “seeking better-for-you recipes,” according to the release. Founded in 2016, Riot is a “100% plant-powered,” certified organic energy drink company. Its products contain “no added sugar, no artificial sweeteners and no unrecognizable ingredients.”
“Consumers are underserved by the big beverage brands,” Riot founder Laura Jakobsen said in the release. “We are creating a different, more crafted choice to be energized with the simpler, cleaner ingredients consumers are demanding, yet current category brand leaders aren’t trusted to deliver.”
Riot nearly doubled its footprint in 2022 and is now available in more than 7,000 stores. In January, the company expanded distribution nationwide through partnerships with Kroger, Walmart and Costco, and “plans to scale this growth even further,” according to the release.
“Riot Energy differentiated itself with the high quality and great ingredients younger audiences are seeking,” Sierra CEO and president Jeff White said in the release. “For 42 years, we’ve built our business on our commitment to quality. We are uniquely situated to provide a springboard of growth for RIOT Energy to be more competitive in the space.”
Riot marks Sierra Nevada’s second foray into M&A, albeit a minority stake. In February 2019, the company acquired San Francisco-based Sufferfest Beer Company, a craft brewery whose gluten-reduced offerings were marketed toward athletes and made with ingredients such as bee pollen and sodium. However, by the end of 2020, Sierra Nevada discontinued the Sufferfest brand.