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Dora's Naturals, go-to house for refrigerated brands in NY metro boasting iconic marques like GT's Kombucha and Harmless Harvest coconut water, has created new unit called Exhale Beverage that signals its intention to dramatically expand its presence in functional ambient bevs, including nascent categories like kratom and THC. The new unit is starting with pickup of a kratom brand called New Brew but is in the hunt to plug gap in robust shelf-stable segments like energy and functional hydration, owner Cyrus Schwartz told us this morning. The initiative comes not long after NJ-based house expanded its coverage area into Philadelphia metro at behest of its largest customer, Whole Foods, even as it's exited another longstanding arm of business, HPP processing, when unsolicited offer came in for those assets. Schwartz said Exhale has been set up as legally distinct subsidiary that will nevertheless share in all assets of parent company, from its expanded warehouse in northern NJ to its sales force, after leadership concluded that its leadership position in refrigerated sectors like kombucha, coconut water, cold-pressed juice and shots left it little room to grow in those areas. It's one of two key unaligned refrigerated options in area along with Rainforest, which by now has expanded to service much of Mid-Atlantic area. Among refrigerated brands wielded by Dora's are GTs, which owns half booch market; Harmless Harvest, dominant player in refrigerated coconut water; Koia and Remedy Organics protein brands; Suja juice; Sambazon acai, and range of nutritional shot brands including Vive. Its shelf-stable portfolio includes C2O coconut water, Roar Organic hydration brand and Icelandic Glacial water but lacks any entries in burgeoning energy space. Cyrus said Dora's team is dead set on remedying that, aiming to pick up 5-6 shelf-stable brands in coming months, including 1 or 2 energy plays. Some discussions were inaugurated at recent Natural Products Expo West, where Dora's rep in refrigerated space is well established but its activities in ambient space are less recognized. Distrib is by no means standing pat on refrigerated side, last year picking up Pressed brand and growing it significantly, Cyrus said, and negotiating for further entries in segments like refrigerated soda.As for Exhale, Schwartz stressed that unit will focus on higher-value, functional entries. The move into kratom and THC segments has precedent in earlier move of Dora's into CBD years back, tho that segment eventually sputtered out. He said he was impressed by New Brew entry for its "earnest and upright" approach to category, including refusal to employ synthetic compounds and keeping dosages to responsible levels. Direction is less certain in THC realm, given vast regulatory uncertainty, but Schwartz is sitting down with legal advisors to determine what kinds of products might be viable in which of its territories. Among its two service areas, NJ in recent years has been far more receptive to Delta-9 bevs than NY but entire category is facing federal cutoff in Nov that category proponents are working furiously to head off.Broader context is family-operated house that continues to thrive as better-for-you brands enter mainstream. It's expanded its warehouse space from 130K-sq-ft to 230K-sq-ft and been onboarding more staffers, some available as regional beer houses contract. Two were recently picked up from beer houses and another pair from Tropicana. The Philadelphia entry came out of repeated requests from Whole Foods that co had earlier rebuffed on grounds that it was wiser to go deeper into rich NY market than to be "shallow and wide." Still, Philly is closer to its DCs than existing coverage area of Hamptons at east end of Long Island, so co finally was persuaded to take the plunge. It's currently servicing 40+ locations aiming for 200+ by year-end.In recent years Dora's has taken other steps to reshape its portfolio of activities. As longtime dairy operators, Schwartz family remains deeply committed to its dairy lines. But push a few years back into craft beer didn't get far and, as one who has no interest in drinking beer himself, Schwartz said it simply didn't resonate. So house exited that. As for HPP biz, it had a solid book of bev business, but mainly from regional bev and shot players, leaving smaller upside. So when unsolicited offer came in, Dora's worked with equipment supplier, Universal, to get that deal done.

DISTRIBUTION: NY House Dora's Naturals Sets Up Exhale Bev Arm to Build Out Shelf-Stable Portfolio; Onboards New Brew Kratom Brand While Sussing Out THC Potential; Energy a Top Priority

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