Soft drink challengers Nix & Kix and Square Root Soda have secured rescue deals to ensure the survival of the brands after being hit by challenging headwinds in the category.
Amsterdam-based group Good Food Vibes acquired the assets of Nix & Kix from administrators yesterday (9 October), The Grocer can reveal.
Meanwhile, Square Root co-founder Ed Taylor led a pre-pack deal to buy his company from administration.
Crowd backers, who have invested almost £3m into the two companies, will not see a return on their money, but there should be something available for creditors.
Good Food Vibes has worked with Nix & Kix for the past seven years through its JetDrinks distribution business in the Netherlands.
Dmitri Peters, CEO at the Dutch group, said JetDrinks would “play a pivotal role” in scaling the Nix & Kix brand further in domestic and international markets.
Nix & Kix, which appointed KRE Corporate Recovery as administrator at the same time as concluding the pre-pack deal, has built up a significant distribution footprint since Julia Kessler and Kerstin Robinson launched the brand in 2016. Its seven-strong range of cayenne-infused drinks are stocked across more than 3,000 stores, including with Tesco, Morrisons, Co-op and Ocado, and in the foodservice sector.
The business generated revenues in excess of £6m over the years, selling more than 10 million cans.
Good Food Vibes confirmed the brand would continue to be sold in the UK through distributor Petty Wood.
“With this acquisition, the company aims to expand Nix & Kix’s reach, building on its strong presence in both the UK and global markets,” Peters added.
Good Food Vibes specialises in vegan, organic and no-added-sugar beverages and owns the Walden Organic iced tea, Bimster kombucha, and Frozen Iceccino iced coffee brands, as well as running the JetDrinks business in the Netherlands and Drinks52 & Food52 in Belgium.
Kessler, who will support the business through a transition period, told investors in a final update this week that a combination of challenges had led to the collapse, including a delayed summer, the loss of invoice discounting, high-interest loans, team transitions and an overall 3% volume decline in the carbonated drinks market.
“I deeply regret the impact this has had on our investors, especially those who have supported us financially and emotionally through the most challenging of times,” she said.
Kessler and her board have spent the past few months seeking fresh investment to save the company, while also putting cost-saving measures in place to buy more time.
She told investors that every avenue to secure additional funding and restructure the business had been “exhausted”, leaving the business insolvent and with no other option but to start an administration process.
“While the brand will continue to flourish under new ownership and management – something I hope can be seen as a win for the brand’s future – it is with a heavy heart that we have reached this point,” Kessler added.
“It has been my passion and life’s work over the last 10 years to build this business, and letting it go is difficult to express.
“I want to acknowledge the losses, both financial and emotional, that our investors have had to bear. I am truly sorry for the outcome and for any disappointment you may feel. I gave everything I had to this journey, and I remain grateful to each of you for your belief in us.”
Square Root appointed CG&Co as administrator on 26 September, with a pre-pack sale of the stock, assets and goodwill by newly incorporated Fruity Solutions Ltd. The purchaser is owned by members of the Square Root leadership and investor team, including co-founder Ed Taylor.
Robyn Simms, who launched the brand with Taylor in 2014, is no longer part of day-to-day operations, but will continue in an advisory capacity to help support the new entity.
Simms told The Grocer the business sought new funding to overcome working capital challenges but was unable to secure further equity investment.
“For the past decade, we’ve poured our hearts and souls into making Square Root a success, not just for ourselves but for all our investors,” she said. “We understand this news is disappointing, and we want to express our sincere gratitude for the support we’ve received and continue to receive throughout this journey.”
A handful of active staff at the company have transferred to the new owners.
Taylor added: “Square Root was created to fizz up a stagnant soft drinks market and bring the same passion and flavour that the craft beer wave brought to beer. I plan to take the brand back to its roots and continue to operate the business with the same commitment and drive we always have, doubling down on quality and provenance.”
A report by CG&CO into the administration revealed that Fruity Solutions Ltd bought the assets for £35k, which will be paid in £5k instalments.
The business, which made its retail debut in Sainsbury’s in 2021, owed creditors just more than £700k when it appointed administrators, according to the report.
It also raised almost £900k from close to 700 investors on Seedrs over two rounds in 2021 and 2022.
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