The Spindrift Acquisition: Did Gryphon Catch Lightning in a Bottle?
In December 2024, Spindrift Beverage entered into discussions to be acquired by the San Francisco-based private equity firm Gryphon Investors for a sum of $650 million at a ~26x EV/EBITDA multiple. This prospective deal captured significant attention within the beverage industry, reflecting broader trends in which both established corporations and investment firms seek to capitalize on rising consumer interest in better-for-you drink options. The Spindrift–Gryphon deal stands out for its convergence of brand authenticity, strong financial performance, and a market environment increasingly favorable to transparent, minimally processed beverages.
Spindrift was founded in 2010 by Bill Creelman, who set out to create sparkling waters using only real squeezed fruit for flavoring—a distinct departure from the “natural flavors” commonly used by competitors like hint and la croix. By eliminating artificial or laboratory-derived additives, people say Spindrift’s beverages taste refreshingly tart, creating a perception of authenticity that resonates with consumers looking to reduce their consumption of artificially sweetened drinks. This straightforward brand identity, rooted in transparency and simplicity, set the company apart in a seemingly crowded lightly flavored beverage marketplace. Over the years, Spindrift’s approach won over health-conscious shoppers who wanted beverages with short ingredient lists, helping the brand gain a loyal following willing to pay a premium for a product they perceived as superior in taste and health. Since 2021, the company has been trying to carve out a name for itself in the hard seltzers category, leveraging its health-driven approach to establish a unique point of difference in a fast-growing alcoholic beverage segment. The company is literally trying to turn water into wine. More recently, the company has tried capitalizing on the no-alcohol movement by releasing new drinks like the “Cosnopolitan” and “Nojito”. The sobriety market is fast growing, with the IWSR (International Wine and Spirits Record) estimating that the no-alcohol segment had a 29% uptick in global volume in 2023. Spindrift now operates in the sparkling water, hard seltzer, and cocktail market. Here is how Spindrift as a whole portrays itself on its website.
(Source: Spindrift)
Financially, Spindrift demonstrated a strong upward trajectory, reporting 2024 annual EBITDA of about $25 million on $260 million in revenue. This figure, alongside double-digit growth in revenue and distribution, was evidence of the company’s ability to compete profitably in the premium sparkling water category. Moreover, Spindrift’s success occurred against the backdrop of a global bottled water market projected to exceed $550 billion in sales by 2033, supported by an estimated 5.3% CAGR. In a world where “better-for-you” drinks are rapidly becoming the drink of choice for many consumers, Spindrift’s brand reputation and demonstrated profitability were the two pillars that made it an attractive acquisition target for Gryphon. Gryphon has previous experience in the food & beverage industry, formerly owning brands like Eight O’Clock Coffee and Dessert Holdings. As for the Eight O’Clock Coffee deal, they bought the company in 2004 for $100 million, and then sold the company two years later for more than double that in a $220 million deal with India’s Tata coffee.
Spindrift’s products elicit a rather extreme response from both sides of the spectrum. The ones who love Spindrift are willing to pay top dollar every time for their product, and the people that don’t particularly enjoy Spindrift usually have a visceral disdain for their product. Take these 4 responses:
“Spindrift is life. Orange-Mango is my shit. Real juice. Unsweetened. I want to buy stock in Spindrift!” - lemon_whirl
“It's so good I want a lifetime supply. I discovered it last week and I'm in love.” - Newtbatallion
“Spindrift tastes like TV static. It's horrible and I have no idea why people like it. Also, the flavors are so muted.” - [deleted]
“I bought 4 cases today because they are BOGO. I just tried the peach strawberry and it is awful! It tastes like rotten fruit.” - Global_Sun_8106
In reality, at the scope Spindrift and Gryphon are operating at, it is perfectly acceptable for your product to only appeal to a select minority of the population. It’s not like either party is expecting the Spindrift brand to become a global phenomenon across all demographics and taste buds. As long as the brand has fans that are fanatics about their sparkling water, the company will continue to extract profits out of them. In addition, the anecdotal reddit evidence shows that different flavored water brands have distinct enough tastes to evoke polarizing opinions. Sparkling water is a commoditized market, but spindrift appears successful in swimming upstream to be a unique player. There will always be concerns they fall back into the sea of other water brands, but within the confines of the commoditized sparkling water market, it’s clear that the brand’s innovation has enabled it to develop a real moat around its product. Spindrift not being tailored to the general population’s taste buds makes customer acquisition rather expensive, yet this force is balanced out by the product’s stickiness and ability to generate customer loyalty. Even though it may be difficult to acquire new customers in this market, the lifetime value of each of those mouths is likely quite high.
In addition to the fan base, the company’s annual EBITDA suggested that it was on solid financial ground. Spindrift has already achieved a 9.6% EBITDA margin on its business, and is currently growing revenue at an estimated 35% YoY, which means this already profitable business will be even more lucrative for Gryphon as total sales tick up. One more general note, this isn’t Gryphon’s first foray into the food & beverage industry, and its broader experience in food & beverage products could help Spindrift optimize its supply chain and scale its production more efficiently, thereby elevating margins and expanding the brand’s footprint.
The price tag exceeding $650 million and expensive EV/EBITDA multiple of ~26x underscores the high valuation that successful, mission-driven brands can command in today’s market. This multiple reflects Spindrift’s healthy growth and proven ability to attract health-focused consumers. In the consumer packaged goods sector, brands that differentiate themselves via authenticity, premium ingredients, and strong storytelling can command higher EBITDA multiples than more commoditized competitors. Gryphon’s willingness to pay a premium signals confidence in Spindrift’s long-term viability, as well as the potential for Gryphon-implemented efficiency changes.
The broader context of this acquisition sits within a wave of consolidation and investment reshaping the beverage industry as a whole. In 2024, Keurig Dr Pepper acquired energy-drink maker Ghost for over $1 billion, while Simply Good Foods purchased the protein shake brand Only What You Need (OWYN) for $280 million. These high-profile deals highlight the intensity of market competition and the strategic pivot among major players to capture emerging categories such as low-sugar, natural, and functional beverages. The Spindrift–Gryphon deal, in that sense, exemplifies how private equity sees robust potential in health-oriented products that have already established themselves in the marketplace.
Beyond the immediate impact on Spindrift, this acquisition has potential ramifications for the sparkling water segment as a whole. Rival beverage brands might respond by innovating more quickly to preserve or grow their own market shares, particularly focusing on flavor variety and ingredient transparency. This shift is not just an empty threat, historical examples like coffee show that consumers don’t only want companies to compete on price, but also on innovation. In the coffee industry, coffee enjoyers began with instant diner coffee back in the pre-starbucks era. Then, Starbucks and Peet’s burst onto the scene with deluxe beans that were gathered in specific countries. After that, third wave coffee shops like Philz and Blue bottle began offering even more sourcing transparency when it comes to beans, sometimes offering up specific farm names and flavor profile information.
This shift in consumer preferences for coffee is a perfect example of the beverage drinker paying more and more to be aware of what is going into their body. Perhaps Gryphon predicts this same trend will reach flavored sparkling water, and that early disrupters like Spindrift will finally cash in on their quality-over-quantity bet. With Spindrift’s $650 million-plus valuation setting a high benchmark, smaller players could see themselves targeted if they can demonstrate proven traction in health-forward or niche markets. Concurrently, private label brands produced by large retailers might attempt to replicate Spindrift’s real-fruit approach at a lower price point, though replicating the authenticity and brand loyalty that Spindrift has built could prove challenging considering the incumbent’s established first mover and scale advantages.
The Spindrift acquisition by Gryphon Investors is an intricate bet on consumer tastes, brand positioning, and capital infusion in shaping the modern beverage landscape. The transaction rides the momentum behind the “better-for-you” drinks and the willingness of private equity to invest significant sums in categories showing strong consumer loyalty. While Spindrift’s leadership has successfully grown the brand over the years, Gryphon’s involvement could accelerate that process—so long as the delicate balance between operational efficiencies and brand authenticity is preserved. If Gryphon’s bet on natural and transparently sourced beverages is correct, the global beverage market will follow Spindrift’s lead, heralding a new era of choice for consumers who demand transparency in what they drink.
