The functional beverage market is a thriving and dynamic industry that caters to consumers' thirst for refreshing, flavorful, healthy, and hydrating beverages. According to Precedence Research, the global market for functional beverages will be worth approximately US $129.31 billion in 2021. It is expected to witness substantial growth, reaching a value of around US $279.4 billion by 2030, with a compounded annual growth rate (CAGR) of 8.94% from 2022 to 2030.
Trends indicate that this upward trajectory will continue, with sales expected to double over the next decade. Demand for healthier beverage options has driven this surge, which has been fueled by a growing preference for well-being and sober living among consumers of all ages, but particularly among younger consumers.
Functional beverages stand out due to their inclusion of beneficial ingredients such as herbs, mushrooms, electrolytes, vitamins, minerals, and probiotics. Notably, these beverages boast low sugar content and minimal artificial additives, aligning with the preferences of health-conscious individuals.
In this article, we will explore four penny stocks within this beverage sector, highlighting their potential as emerging players in the market. Let's dive into the first stock, INKW, and discover its growth prospects.
GREENE CONCEPTS, INC. (OTC: INKW)
INKW is an emerging company in the multibillion-dollar beverage sector. INKW is engaged in the bottling and production of a wide range of beverages.
The company’s primary focus is on the manufacturing of various beverage product lines, such as spring and artesian water, beverages infused with cannabinoids, pH-balanced water, and athletic drinks.
The company is making significant strides in the market with its unique ‘Be Water’ brand of artesian spring water and their CBD-infused beverage line, Happy Mellow.
INKW sources its ‘Be Water’ brand of artesian spring bottled water from self-replenishing artesian spring wells at its bottling plant in Marion, North Carolina. The ‘Be Water’ brand offers an upscale taste and contains healthy, natural hydrating mineral benefits derived from self-replenishing artesian wells in a sub-tropical rainforest in the foothills of the Blue Ridge Mountains. ‘Be Water’ contains positive minerals like magnesium and calcium, which support stronger bones, muscles, and nerve functionality.
The U.S. bottled water market is valued at $94 billion, and ‘Be Water’ is making a significant impact. According to Statista, 88% of Americans drink bottled water every day, with an average consumption of 47 gallons per capita.
Globally, the bottled water market is estimated to be worth $510 billion and is growing at a 6.8% CAGR, according to GlobeNewswire. Precedence Research estimates the market to reach $500.7 billion by 2030 with a 9.7% CAGR.
INKW's brands are gaining traction in the beverage industry. The ‘Be Water' brand is now sold in more than 800 retail stores, including convenience stores, food chains, and all 185 Camping World stores in 42 states. It has also expanded its presence in the e-commerce space, with 55 Amazon fulfillment centers nationally. MDI Distributors and Lowes Foods Stores have placed orders for ‘Be Water’, further increasing its point-of-sale opportunities.
To support its growth, INKW is expanding its bottling plant from 60,000 square feet to 80,000 square feet. It is also adding a high-speed production line to meet the increased demand from larger national retailers. The company plans to hire additional staff for the plant as needed.
In addition to its ‘Be Water’ brand, INKW has entered the fast-growing CBD-infused beverage business with its Happy Mellow immune-support brand. Happy Mellow currently offers three flavors and plans to introduce four more flavors in the future. The CBD market is projected to reach $14.6 billion by 2026.
INKW is a fully reporting company with a market cap of approximately $8.9 million. It owns nearly $6 million in assets, including a 60,000-square-foot bottling and beverage facility in Marion, NC.
Greene Concepts, Inc. is an up-and-coming company in the thriving beverage industry. With the launch of their flagship brand, ‘Be Water’, and the expansion of Happy Mellow into the market for CBD-infused beverages, INKW is making headway in the $94 billion U.S. bottled water market. Their strategic partnerships, expanding distribution network, and ongoing plant expansion demonstrate their commitment to growth. Positioned to capitalize on the global bottled water market valued at $510 billion and the projected $14.6 billion CBD market, INKW presents an attractive investment opportunity.
THE ALKALINE WATER COMPANY (NASDAQ: WTER)
WTER is the US's largest independent alkaline water company and is becoming a prominent player in the functional or clean beverage sector. One of the primary products offered by WTER is Alkaline88, a renowned alkaline water beverage available in various sizes, including bulk and single-serve options.
WTER utilizes an innovative proprietary electrolysis process to create Alkaline88, which delivers water with a pH level of 8.8 along with trace minerals and electrolytes. Additionally, The Alkaline Water Company promotes sustainability through the use of eco-friendly aluminum packaging.
WTER continues to expand its market presence; for example, WTER recently announced the incorporation of Alkaline88 3-Liter into the cold vault schematics of a prominent convenience store chain. This strategic move covers approximately 600 locations across California, Arizona, Nevada, Washington, and Oregon, catering to on-the-go consumers throughout the summer months.
In addition, in an update in April, WTER reported remarkable growth and progress in its fiscal year 2023. During the period, the company successfully expanded its market presence by adding Alkaline88 products to over 11,000 new stores nationwide while also introducing new product variants in over 33,000 existing client locations.
Alkaline88 has achieved strong retail sales growth during fiscal year 2023. According to Nielsen data for all outlets combined, including convenience stores, Alkaline88 ranked among the top 13 brands with over $90 million in retail sales. Its year-over-year retail sales growth of 19.5% surpassed the category average for value-added water and was the second-highest among the top 13 brands.
With its strategic growth initiatives and stronger financial performance, the company continues to attract attention.
SPLASH BEVERAGE GROUP INC. (NYSEAMERICAN: SBEV)
SBEV is a dynamic player in the health beverage industry as well as the alcoholic beverage industry. Known for its innovation and ownership of a growing portfolio of alcoholic and non-alcoholic beverage brands. Among its notable brands are Copa di Vino, offering wine by the glass; SALT-flavored tequilas; Pulpo Loco sangría; and TapouT, a performance hydration and recovery drink.
At the end of last month, SBEV disclosed that it received a notice from NYSE Regulation stating that the company did not comply with the NYSE American continued listing standards. The reason for noncompliance was the delayed filing of its quarterly report on Form 10-Q for the period ending March 31, 2023.
This notice highlights that Splash Beverage Group did not meet the regulatory requirement to submit its financial report within the specified timeframe.
The delay in filing the 10-Q was outlined in the Form 8-K filed with the SEC on May 30, 2023. In a previous filing on March 9, 2023, the company informed the SEC about a structural change in its audit firm due to a merger.
While the pre-merger auditor prepared the statements on time, the newly hired auditor introduced new procedures and an additional layer of partner approval, requiring more time to complete the review of the financial statements for the specified period.
KONA GOLD BEVERAGE INC. (OTC: KGKG)
KGKG, a holding company operating in the better-for-you and functional beverage sectors, recently reported impressive financial results for the first quarter of 2023. During this period, the company achieved a significant milestone by posting record quarterly revenue.
In Q1 2023, Kona Gold Beverage recorded combined gross revenues from its subsidiaries of nearly $1.3 million. This accomplishment is particularly noteworthy considering that the first three months of the year are typically slower in the beverage industry. The record-breaking performance in Q1 reflects the continued growth and overall strength that Kona Gold Beverage is currently experiencing.
These positive financial results suggest that Kona Gold Beverage is successfully executing its strategic focus on product development and distribution within the better-for-you and functional beverage markets. By delivering robust revenue growth, the company is positioning itself as a competitive player in the industry.
“We have started off 2023, and we anticipate a very strong Q2 and Q3 across both subsidiaries. Our Ooh La Lemin Lemonades continue to perform extremely well in all markets, and our team is working to close partnerships with several national chains and distribution partners. We have set our 2023 case sales projection at 200,000 cases and are very confident we will hit that goal. Our team has set the long-term goal of one million cases in 2026, and we continue to lay the foundation to achieve that." Robert Clark, CEO of Kona Gold Beverage, Inc.
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