King’s Hawaiian Acquires Shaka Tea

Family-owned food manufacturer King’s Hawaiian has acquired Hawaii-based beverage brand Shaka Tea, the company announced today. Terms of the transaction were not disclosed.

The deal comes less than two years after the baked goods and restaurant company invested in Shaka as part of a $2.3 million funding round. According to a press release, Shaka Tea will continue to operate independently out of its Hilo, Hawaii headquarters with all 21 full time employees and management expected to remain with the company.

Shaka Tea was co-founded in 2016 by husband and wife team Bella Hughes and Harrison Rice. The brand produces a line of loose leaf and bottled RTD teas, as well as immunity shots, made using locally-grown māmaki leaves and other ingredients such as ʻōlena, a Hawaiian turmeric.

Upon completion of the deal, Rice will transition from CEO into the role of President, while Hughes, the company’s current president, will become Head of Mission & Innovation.

The brand has consecutively reported triple digit year-over-year growth since 2019 and its ready-to-drink line is currently available in over 8,000 stores nationwide. Speaking to BevNET today, Hughes said Shaka Tea now expects to be in over 20,000 doors by the end of the year. The brand recently received national authorization in all 7-Eleven stores and is currently expanding its presence in the chain as planogram resets are underway.

“We really could not think of a more values-aligned partner than King’s Hawaiian and we’re extremely, extremely amped up to keep growing with the Taira family,” Hughes said. “It’s going to be a busy and impactful next few years.”

Utilizing its better-for-you positioning and highlighting its caffeine free properties as a selling point, Shaka Tea, a finalist in BevNET’s New Beverage Showdown 12 in 2016, has grown its placements from just a handful of natural channel retailers in its first year to mainstream chains, while also securing partnerships with key regional distributors like Nestlé Waters’ ReadyRefresh service in California.

In particular, Hughes said Shaka Tea will continue to focus on its expansion in the convenience and mainstream grocery channels. Beyond 7-Eleven, the brand recently added over 700 Sheetz locations as well as Speedway and Hyvee stores. Through its relationship with brand incubator L.A. Libations, the company has also expanded into 800 Publix locations and is now entering Ralph’s as well.

Hughes noted that since King’s Hawaiian first joined Shaka Tea’s cap table the legacy company, which was founded in 1950, has been a key partner and advisor. Though King’s Hawaiian now operates primarily out of California, the company was also founded in Hilo and has been dedicated to supporting local Hawaiian brands and agriculture.

“It’s kismet,” Hughes said of the relationship. “We couldn’t be happier to be joining their ‘ohana family of brands.”

Since its founding, Shaka Tea has likewise been a strong proponent of Hawaiian agriculture and has taken strides to support local farmers by sourcing ingredients locally – a mission that will continue under the new ownership. The use of māmaki, grown exclusively in Hawaii, has been a key differentiating factor for the brand as it has expanded.

The acquisition also adds to King’s Hawaiian’s growing brand portfolio and reflects increased M&A activity from the legacy company. Last year, King’s Hawaiian acquired Boston-based pickle brand Grillo’s for an undisclosed sum. Shaka Tea is also the first dedicated beverage brand in the company’s portfolio.

“Shaka Tea represents a blueprint of how to cultivate a successful business while honoring sustainable growing practices and bringing a great tasting, unique, and superior wellness product to people around the world,” said King’s Hawaiian CEO Mark Taira in the release. “It’s taken 70 years to build King’s Hawaiian into what [it] is today and we’re beyond excited to share what we’ve learned and to be able to support the growth of the next generation of food brands from Hawaiʻi.”

Looking ahead, Hughes said the company also aims to expand its product offerings through new better-for-you innovations. In the fall, Shaka Tea launched a line of immunity shots which are currently available locally in Hawaii, in select stores in Florida and online. As well, in her new role as Head of Mission & Innovation, Hughes said she is currently planning several new product launches for the near future which will help the brand to further capitalize on the rise of better-for-you food and beverage products.

“Even myself as a consumer, over the last nine to 12 months I’ve been blown away seeing how many better-for-you brands are on [the] shelf now,” she said.