Beverage Market Update – October 2026

Capital Concentrates in High-Growth Pockets of the Beverage Market Amid Evolving Consumer Demand

Key Takeaways:

1. Capital has concentrated in structurally growing Beverage market categories, particularly spirit-based Ready-to-Drink (RTD) cocktails, energy, functional hydration, and select better-for-you (BFY) formats, while legacy alcohol categories remain pressured.
2. Scarcity has supported premium valuations for assets with visible organic growth, hard-to-replicate operating advantages, and sustainable margins, despite a 23.3% year-over-year (YOY) decline in sector deal volume to date.
3. Strategic buyers have favored targeted buy-vs.-build transactions, while sponsors have remained selective and focused on predictable organic growth, repeat purchasing, and channel or geographic whitespace.
4. Key underwriting risks have included regulatory uncertainty, distributor concentration, consumer trade-down, and execution against growth expectations.

Beverage market M&A activity has remained muted through year-to-date (YTD) 2026 as broad weakness across the Alcoholic subsector has continued to offset growth in select formats, including adult non-alcoholic (ANA) beverages, RTD cocktails, and BFY drinks. Buyers have remained active but selective, concentrating on differentiated assets with durable category tailwinds. Transaction activity has remained below prior-year levels as consumption pressure, input-cost volatility, and tighter underwriting standards have continued to constrain dealmaking. Strategic portfolio repositioning and targeted acquisitions should support measured improvement in deal activity through year-end and into 2027.

We continue to see buyers gravitating toward assets that provide exposure to high-growth beverage categories and evolving consumption occasions. Businesses with differentiated positioning and clear strategic fit remain well-positioned to attract interest despite a more selective M&A environment.

Robert MarksDirector, Capstone Partners

Beverage Market Operators Adapt to Shifting Consumer Purchasing Priorities

Consumer purchasing decisions have become increasingly selective, concentrating growth within a narrower set of beverage categories. Consumers have begun trading down in more commoditized segments while continuing to pay premiums for differentiated products and occasions. Within alcoholic beverages, moderation and heightened health-consciousness have continued to pressure category sales in 2026. However, RTDs have consistently recorded robust growth by offering convenience, portability, variety, and lower-calorie options. Spirit-based RTDs recorded dollar sales growth of 32.1% YOY and sales volume growth of 31.9% YOY in the last twelve months (LTM) ending August 9, 2026, according to Circana off-premise point-of-sale data via Bloomberg.¹ Tequila was the only other major alcoholic beverage category to avoid a sales decline over the same period, with dollar sales remaining flat and volume increasing 0.7% YOY.

The same consumer priorities have supported demand for clean-label, wellness-oriented non-alcoholic drinks. Approximately 83.3% of tracked non-alcoholic beverages recorded LTM dollar sales growth, while half generated volume gains. Energy drinks have expanded beyond traditional stimulation into performance, mental focus, and productivity, driving LTM dollar sales growth of 13.7% YOY and volume growth of 12.0% YOY. Sports drinks have also performed well, with dollar sales increasing 4.6% and volume rising 3.2% YOY.

Cannabidiol (CBD) beverages have emerged as another source of growth as these products address a variety of use cases, including sleep support and alcohol alternatives in social settings. Hemp-derived tetrahydrocannabinol (THC) beverages have scaled even faster, generating $239 million in sales in the LTM ending April 2026, a 135% increase YOY across more than 1,170 products and 200 brands, according to a September 2026 CNBC article.² However, the category’s growth outlook has remained dependent on federal legislation. A November 2025 spending package redefined hemp under a total THC standard and capped finished products at 0.4 milligrams per container, potentially removing a significant portion of hemp products from retail shelves, according to the Congressional Research Service.³
Enforcement has been delayed through December 11, 2026, but continued uncertainty has caused wholesalers and retailers to moderate restocking ahead of the deadline.

A workable regulatory framework incorporating hemp beverages into the three-tier system could create incremental growth opportunities across the supply chain. Until greater clarity emerges, regulatory and inventory risk may limit near-term investment and M&A activity. Across all high-growth formats, buyers are likely to favor brands with demonstrated velocity, repeat purchasing, differentiated positioning, and exposure to consumption occasions that are gaining share from legacy categories rather than those dependent primarily on distribution expansion or stock-keeping unit (SKU) proliferation.

Beverage companies have used new product innovation and targeted acquisitions to address emerging consumption occasions across protein, hydration, energy, alcohol moderation, and convenience. Acquisitions can offer a faster, lower-risk path into attractive categories, helping explain the concentration of M&A activity in areas such as spirit-based RTDs. Select (i) product launches and reformulations from the Spring and Summer of 2026 and (ii) RTD acquisitions are outlined below.

Slower Private Strategic Activity Weighs on Beverage M&A as Public and PE Buyers Remain Selective

Acquisition activity in the Beverage market has softened through YTD 2026, with many private business owners showing limited appetite for inorganic growth. The decline has appeared to reflect greater buyer scrutiny of growth forecasts and fewer scaled assets coming to market rather than a broad withdrawal of capital from the sector. Total sector deal volume has dropped 23.3% YOY to 92 announced or closed transactions YTD. Private strategic dealmaking has moderated, with deal volume declining by 26 deals YOY to 62 as brewer consolidation has slowed 44.4% YOY and buyers have increasingly prioritized cost discipline, post-acquisition profitability, and operating efficiency. Despite the slowdown, larger private consolidators have remained active, viewing acquisitions of complementary brands as an attractive use of capital. In contrast, public strategic deal volume has held flat at 11 transactions in both YTD 2026 and YTD 2025. Large global beverage corporates have exercised disciplined M&A in the Wine & Spirits (seven deals) and Soft Drinks (three deals) segments to fill portfolio gaps, reduce time to market, and diversify away from slower-growing products.

Corporate earnings calls throughout 2026 have identified health and wellness, hydration, low-alcohol, and RTDs as priority areas for capital deployment, although large brewers have pursued these growth categories through different strategies. Anheuser-Busch InBev (ENXTBR:ABI) has primarily relied on organic innovation and distribution-led expansion, with Beyond Beer revenue increasing 44% and no-alcohol beer revenue rising 27% in Q2 2026, supplemented by its December 2025 acquisition of an 85% controlling stake in RTD producer BeatBox for $490 million, according to the company’s Q2 2026 results.⁴ By comparison, Molson Coors (NYSE:TAP) has utilized M&A more directly to address portfolio gaps, including its $275 million acquisition of Monaco Cocktails parent, Atomic Brands, in March 2026. “In the first quarter, we announced Horizon 2030, a strategy designed to strengthen our business and drive long term value creation. We took action right away. For example, we said we’d leverage M&A to fill portfolio gaps, and we did just that by establishing a position in RTDs,” noted Rahul Goyal, CEO of Molson Coors, in its Q1 2026 earnings call.⁵ Their differing strategies have demonstrated how distribution capabilities can help scaled buyers accelerate emerging brands.

Private equity (PE) firms have accounted for 20.7% of acquisitions in the Beverage market to date—the highest share since full-year 2021 (23%), despite sponsor activity declining by two deals YOY. Capital deployment into new platforms has held steady at seven direct investments in both YTD 2026 and YTD 2025. Sponsor-backed businesses have tallied 12 acquisitions to date, down from 14 in the prior-year period. Sponsors are likely to remain cautious toward businesses with customer concentration, reliant on distribution gains, or aggressive margin normalization assumptions, while prioritizing assets with repeat purchasing, visible organic growth, and clear opportunities for geographic or channel expansion.

Distribution has remained an active area for M&A with meaningful consolidation occurring across both Wine & Spirits and Beer distribution landscapes. The Distribution segment has recorded 12 deals to date, in line with the prior-year period. Consolidation, particularly within the Anheuser-Busch and Molson Coors networks, has accelerated as suppliers increasingly favor well-capitalized, scaled distributors capable of delivering broad market coverage alongside strong portfolio management and execution. Simultaneously, supplier portfolio rationalization efforts have placed a greater emphasis on distributor performance, reducing tolerance for underperforming SKUs. These dynamics, coupled with distributors’ expansion into non-beer adjacencies, have reinforced the value of scale and cross-category capabilities.

The fallout from Republic National Distributing Company (RNDC) has contributed to significant change across the three-tier system. The company began to unwind operations in June 2025, exiting California following the departure of Tito’s, High Noon, Cutwater, and Brown-Forman (NYSE:BF.B) brands to competing wholesalers. Reyes Beverage Group subsequently acquired 11 RNDC markets in May 2026 while Columbia Distributing, Martignetti Companies, and Breakthru Beverage Group have absorbed additional territories. These supplier transitions and market transfers have driven much of the resulting consolidation. RNDC’s July 2026 Chapter 11 filing largely formalized an ongoing dismantling triggered by declining alcohol consumption, supplier attrition, and acquisition-related leverage. RNDC has moved to sell its remaining operations in pieces, listing liabilities between $1 billion and $10 billion against assets of $500 million to $1 billion, with more than 100,000 creditors, according to the filing.⁶

The resulting redistribution of territories and supplier relationships has created significant operational and financial disruption. While large suppliers primarily face transition costs and potential receivable exposure, smaller brands may experience greater liquidity pressure and difficulty securing sufficient attention from replacement distributors. More broadly, RNDC’s unwind has reinforced the value of scale, balance-sheet capacity, and supplier diversification across the three-tier system and is expected to keep larger distributors active acquirers through the second half of 2026 and into 2027.

Sector Valuations Improve, Recent Deals Highlight Acquirer Selectivity

Competition for differentiated beverage assets has remained robust despite lower overall deal volume, supporting elevated valuation multiples for businesses with attractive growth profiles. The sector’s median M&A EBITDA multiple has reached 11.6x in 2025 to YTD 2026 compared to 11.2x in 2023-2024 and 10.2x for the broader Consumer industry. The premium reflects the scarcity of scaled businesses capable of sustaining growth and margins despite uneven demand conditions across beverage verticals. Select transactions that highlight where capital has concentrated within the Beverage market are outlined below.

• The Vita Coco Company Acquires Copra (July 2026, $275 Million, ~11.0x EV/EBITDA) – The Vita Coco Company (Nasdaq:COCO) acquired Copra to add super-premium coconut water capabilities, sourcing expertise, and a differentiated extract-and-fill-on-site operating model. The purchase price includes $175 million paid at closing and up to $100 million of earnout consideration based on 2028 financial performance. Copra expects net sales of $100 million in 2026 following a three-year CAGR of 48%, according to a press release.⁷

“Copra brings specialized capabilities, deep sourcing expertise, and a super-premium offering that can help us serve more consumers,” said Michael Kirban, Co-Founder and Executive Chairman of Vita Coco, in the press release. The transaction gives Vita Coco greater control over differentiated sourcing and production capabilities while adding private label offerings and an emerging branded platform. The transaction demonstrates buyer interest in high-growth assets with specialized capabilities that would be difficult and time-consuming to replicate organically.

• Mark Anthony Brands Acquires The Long Drink Company (April 2026, $325 Million) – Mark Anthony Brands acquired The Long Drink Company, a differentiated RTD cocktail brand offering nine SKUs with alcohol by volume (ABV) ranging from 5% to 8.5%. Introduced to the U.S. market in 2018, the Finnish-inspired brand joins a portfolio that includes White Claw Hard Seltzer, Mike’s Hard Lemonade, Cayman Jack, and Bearface Canadian Whisky.

Mark Anthony Brands, which already serves as The Long Drink’s exclusive distributor in Canada, can leverage its existing infrastructure and category expertise to accelerate the brand’s growth across North America. “Long Drink has already established strong momentum and a clear point of difference in the RTD space,” explained Phil Rosse, CEO of The Mark Anthony Group of Companies, in a press release.⁸ The transaction highlights continued strategic interest in RTD brands with distinctive positioning and an existing platform for broader distribution.

• KKR-Backed Refresco Acquires SunOpta (February 2026, $1.2 Billion, 1.5x EV/Revenue, 11.6x EV/EBITDA) – Refresco acquired SunOpta (Nasdaq:STKL), a manufacturer of private label plant-based beverages, RTD protein shakes, and fruit snacks. The company also sells plant-based creamers under its own brand, Sown.

“The acquisition of SunOpta is highly complementary and significantly broadens our position in the fast-growing plant-based Beverages category,” stated Refresco CEO Steve Presley, in a press release.⁹ The acquisition expands Refresco’s North American manufacturing platform and illustrates sponsor-backed interest in scaled platforms with complementary capabilities and exposure to structurally growing categories.

Beverage M&A activity should improve gradually through year-end and into 2027, although buyers are likely to maintain disciplined underwriting standards. Operators that pair trusted core products with disciplined innovation and use consumer data to guide assortment and occasion-based development should be best positioned to attract capital and gain market share.

To discuss key trends reshaping alcoholic and non-alcoholic beverages, provide an update on your business, or learn about Capstone’s wide range of advisory services and Beverage market knowledge, please contact us.

Andrew Woolston, Associate, was the lead Market Intelligence contributor to this article.

Endnotes

1. Bloomberg Terminal, “BI BEVGG, Circana,” professional.bloomberg.com/products/bloomberg-terminal/, accessed August 24, 2026.

2. CNBC, “THC Drinks Could Soon Be Harder to Find as Congress Delays Hemp Ban Again,” cnbc.com/2026/09/04/thc-drinks-congress-hemp-ban.html, accessed September 24, 2026.

3. Congressional Research Service, “Changes to the Statutory Definition of Hemp and Issues for Congress,” congress.gov/crs_external_products/IF/PDF/IF13136/IF13136.1.pdf, accessed September 24, 2026.

4. Anheuser-Busch InBev, “AB InBev Reports Second Quarter 2026 Results,” ab-inbev.com/investors/results-center, accessed September 24, 2026.

5. Yahoo Finance, “Molson Coors Beverage Company (TAP) Q1 FY2026 Earnings Call Transcript,” finance.yahoo.com/quote/TAP/earnings/TAP-Q1-2026-earnings_call-559363.html, accessed August 24, 2026.

6. Omni Agent Solution, “Case 26-90737 Voluntary Petition for Non-Individuals Filing for Bankruptcy,” casedocs.omniagentsolutions.com/cmsvol2/pub_47603/431aa540-51dd-4e85-865b-77640d360127_737-1_RNDC.pdf, accessed September 24, 2026.

7. The Vita Coco Company, “The Vita Coco Company Announces the Acquisition of Copra, Inc.,” investors.thevitacococompany.com/news-releases/news-release-details/vita-coco-company-announces-acquisition-copra-inc, accessed August 24, 2026.

8. PR Newswire, “The Mark Anthony Group of Companies Announces Plans to Acquire The Finnish Long Drink,” prnewswire.com/news-releases/the-mark-anthony-group-of-companies-announces-plans-to-acquire-the-finnish-long-drink-302740565.html, accessed August 24, 2026.

9. Refresco, “Refresco to Acquire SunOpta for $6.40 Per Share in Cash,” refresco.com/en/press-releases/3233817/, accessed August 24, 2026.