In This Issue:
 

• Ghost Now Viewed as Anheuser-Busch’s NA ‘Banner Brand’; 50 Mil Cans in 2021
• ‘Oversold’ on Cans Is the Word from Crown; CSDs, Waters, Energy Teas Stoking Demand
• FOLO UP: Interim CEO Owens Is ‘Strong Contender’ for Permanent Job at Hint, Investors Are Informed
• ADS: ‘You Choose Where to Go,’ The Rock Exhorts for Zoa Energy; Boxed Water Cadges Ride on Alaska Airlines Regional Bowl Buy
• DISTRIBUTION: BioSteel Adds 15K Retail Doors; Barfresh Enters G&J Pepsi; Tapout Adds Heimark; Nirvana into 175 Giant Food Stores; Odyssey into New Age

 Ghost Now Viewed as Anheuser-Busch’s NA ‘Banner Brand’; 50 Mil Cans in 2021  Anheuser-Busch shifted its non-alc strategy in US toward utilizing Ghost as its “banner brand,” Beyond Beer vp Fabricio Zonzini stated during A-B’s virtual SAMCOM distrib meeting last week. Ghost Energy sold 50 mil cans in 2021 after rolling out in Q1, co-founder Dan Lourenco shared. Sold 426K cases in IRI multi-outlet + convenience channels, posting top-3 rate of sale in category, Zonzini added. (At 12-unit cases, that’s about 5 mil cans out of that 50 mil total, implying most of biz is via ecomm and untracked retailers.) Dan also touted new app launched last year, “groundbreaking” partnership with Oreo, new Swedish Fish flavor, social media feats, awards and more. Now protein RTDs are “going to make their way to the system soon,” Dan added. Plus, “we’re new to beverage but we’re not new,” with 62 products, 36 collabs, 3 new energy flavors, 18 shakers sold across 60 countries and “still growing.” Ghost was “first to bring authentic flavor collabs” like Sour Patch Kids to energy/sports drink space, and now “competitors are trying to imitate” it, sez Dan. (Nutrabolt's C4, for instance, has been runnin' with Starbust flavors lately.) But Ghost will continue to innovate “unlike anyone else,” he vowed. This year, co’s lookin’ to focus on chain mandates where distribution is already sold in while boosting sampling initiatives and in-store execution.

It’s been a “true partnership” with A-B since commercial chief (and now ceo) Brendan Whitworth first reached out in 2018, both Dan and Zonzini underscored. The two cos have been “building together since day one,” and “this could be way bigger than any non-alc initiative in the past,” sez Zonzini. Plus, Super Coffee grew 4.5X the category rate in RTD coffee space. With Ghost and Super Coffee, A-B has “everything we need to win in the energy space.” Note tho that many houses, including A-B's own AB One network, have been bringing on range of energy players including likes of Celsius, G Fuel and Riot Energy. Over the years, of course, A-B has dabbled in energy with self-created 180 brand, acquired Hiball brand and Monster as partner brand, before that brand fled to Coke system. Many indie Bud houses were enjoying great ride with Bang, too, before that line fled to PepsiCo. As for Super Coffee, A-B’s got skin in that game too, having invested in latest round and greenlighted national distribution via Bud network and co recently brought aboard Bud vet to make sure they’re in synch with key partner.

‘Oversold’ on Cans Is the Word from Crown; CSDs, Waters, Energy Teas Stoking Demand  Oversold. That’s the byword at canmaking giant Crown Holdings as headlong rush to add capacity fails to match demand for packaging format that’s soaring thanks to sustainability and eat-at-home trends. Even increment of 20 bil cans in production capacity that’s been coming onstream from 2020 thru end of 2022 won’t ease co’s essentially sold-out status or need to keep bringing in cans from overseas, primarily from Middle East. Looking ahead in ’22, Yardley, Penn-based co should see double digit growth in Asia and Americas, with N Amer and Brazil particularly strong, said prexy/ceo Tim Donahue. Europe should come in flat to up half a percent, only because it’s severely capacity-constrained.

“Every market we operate in except China or the Middle East is oversold,” Donahue said. If not oversold, “we’re fully sold out in China.” There’s some slack in Middle East, “so it’s the one place cans are available to import elsewhere.” US will be oversold for at least next coupla years and Europe is “exceptionally tight, if not oversold in every market. And we’re tight in Southeast Asia.” In Brazil, where softer economy and cool weather has dampened demand a bit, things might “be a little loose for the first 6 to 9 months – a couple of percent – but it’s a short-term issue we’ve seen there before.” Over longer term, “it’s an exceptionally healthy market.” Americas Bevs segment imported as many as 15 bil can in 2021 to fill gaps and likely will have to bring in another 10 bil this year.

As with rival Ball a coupla weeks ago (BBI, Jan 27), Donahue assured listeners that co’s exposure to spiked seltzers is “rather limited” as it rides growth in CSDs, sparkling flavored waters, energy drinks and teas to continued growth.  

Donahue was speaking on Q4 call in which co reported 24.2% sales gain to $3.05 bil but flat earnings of $303 mil vs $307 mil a year earlier as co waits to capture pass-thru costs and grapples with other issues. It’s navigating the usual challenges in supply-chain-constrained world as well as additional setback of tornado strike on its new plant in Bowling Green, Ky, that not only knocked out operations but also destroyed estimated 80-100 mil units of inventory worth $7 mil. Relatively unseasoned team there will take some time to be up and running again next month at plant rated at 2.4-2.5 bil units. This year should bring capacity increments at new plants in Martinsville, Va, and Uberaba, Brazil, and via additional lines at plants in Phnom Penh, Cambodia, and Monterrey, Mexico.

Lousy Service, High Costs at Eateries Bodes Well for Cans, CEO Argues   Among observations on broader environment, Donahue made case that eat-at-home trend isn’t temporary Covid phenomenon that will go away as pandemic abates. “My view is that it’s more permanent or structural in nature” given escalating cost of dining out beyond what many families can afford and staffing shortages that have eroded service levels. Or as Tim put it, “the service is lousy, the cost is prohibitive for most people.”

FOLO UP: Interim CEO Owens Is ‘Strong Contender’ for Permanent Job at Hint, Investors Are Informed    Tho there seems to be cone of silence over situation at Hint Water, which last fall quietly ousted cofounders Kara and Theo Goldin, it seems that interim ceo Blair Owens is in the running for top job on permanent basis. Tho we’d reported that IPO-bound co has been seeking high-visibility candidates such as Essentia ceo Scott Miller, it hadn’t been clear to us whether the Coca-Cola and Monster Bev vet Owens has been under consideration. Apparently, he is. Shareholder has pointed us to private email exchange last month in which Marc-David Bismuth, principal at key investor Verlinvest, termed Blair a “strong contender.”

“Blair is a seasoned executive and has had a huge impact during his four years at Hint - most recently overseeing the entire retail and foodservice channels,” Marc-David wrote. “He is a strong contender in a rigorous process that is now underway to find a permanent ceo for Hint.” As reported, Owens had come in as svp beverage and since Goldins’ ouster has been bumped up to chief commercial officer and interim ceo.

Bismuth was responding to email from well-connected woman named Jennifer Gilbert, who describes herself as “Hint investor, entrepreneur, Ernst & Young Entrepreneur of the Year Winner, MIT fellow, New York Real Housewives of New York Character for a season, TV personality, Best Selling Author, TED speaker, angel investor and I own Save the Date, the largest event planning company in New York City, and one of the biggest in the country.” Offering impassioned description of value Kara has brought to brand, Gilbert asks, “Where is the new growth plan of what is going to happen with the Company?  The Hint brand and story is Kara and Theo, what will it be now?” With her permission, their exchange was circulated among other investors by Geoff Ralston, an early investor in brand who’s organized discussion among shareholders who’re trying to find out why founders got the boot. We’ve heard range of rationales for why change was made, all of them contested by one party or another. The Goldins, Owens and others haven’t been commenting on sensitive situation.

Gilbert’s missive offers good sample of impassioned support the Goldins have from some individual investors. “I find this extremely aggressive, and ‘statement’ move on your part.   Why hasn’t this statement come out to the press?  I’m sure my 134,000 followers and my magazine contacts would be very interested in the story where my friend was blind sighted and fired with the COO of the Company THEY FOUNDED. I’m seriously hoping this is not as bad as it appears or sounds and that’s why we haven’t heard anything privately or publicly about this egregious shakeup.” In his response, Bismuth writes, “While Kara and Theo will no longer be employees of the Company, they will continue to contribute to the Company going forward as members of the Board. The Board of Directors has extended an offer to Kara and Theo with regards to their roles going forward and we are still in the process of finalizing this agreement.” A few weeks later it’s not clear to us where that stands. Some investors have also expressed concern about optics of replacing female founder who’s been outspoken on empowerment issues with male successor.

Co still hasn’t publicly announced move, let alone offered rationale, and Bismuth wasn’t specific in his email. “Speaking for myself and as a Board member, I acknowledge and appreciate Kara and Theo’s vision and contributions to building Hint,” he wrote. “The Board’s decision regarding their roles as CEO and COO was not an easy one and it was not taken lightly. However, the Board has a fiduciary duty to act in the best interests of all Hint shareholders, and we believe that retaining new management best serves those interests.”   

ADS: ‘You Choose Where to Go,’ The Rock Exhorts for Zoa Energy; Boxed Water Cadges Ride on Alaska Airlines Regional Bowl Buy  “When it doesn’t exist, you have to create it,” declares Zoa Energy creator/endorser Dwayne Johnson, against portentous music, in TV ad that will air on Super Bowl pregame show. In ad that intersperses workout footage associated with genre with shots of founding team and other entrepreneurship themes, The Rock orders, “You choose where to go. And then, who will join you on the journey. We chose to create what would fuel us and what could fuel you.” Zoa Energy “is for the everyday warrior who chooses to be strong” . . . Boxed Water will cadge a ride on Alaska Airlines regional buy on Super Bowl as carrier flags its move to ditch plastic water bottles as part of its #Alaskacarelines sustainability push. In ad that riffs on kids’ shows, diverse jury of Care Bear, Mother Nature, Nick “Your Korean Dad” Cho and others weigh Alaska’s bid for membership in CARE Coalition, with Mother Nature lauding it as “the first airline to switch from plastic bottles to Boxed Water” as screen shows image of carton emblazoned with Boxed Water Is Better graphics. Alaska Air made the switch in Nov, dropping all single-use plastic bottles and cups for Tetra Pak brand (BBI, May 10).

DISTRIBUTION: BioSteel Adds 15K Retail Doors; Barfresh Enters G&J Pepsi; Tapout Adds Heimark; Nirvana into 175 Giant Food Stores; Odyssey into New Age  BioSteel Sports Nutrition said it’s enlisted nearly 15,000 new retail doors across US, including Albertsons, Food Lion, Giant Food, Publix, Stop & Shop, Rite Aid and Sheetz. They’re taking single cans of 5-flavor lineup and sometimes new 4-pack. Tho Canopy-controlled brand said Feb is onboarding date, some of that new distribution seems to already be showing up in scanner, with Consumer Edge Research reporting 48% availability gain in 4 weeks ended Jan 23. While velocities are still low, CER analyst Brett Cooper said push is important for parent Canopy, not just for generating profits and free cash flow but for seeding brand that could be cannabis platform down the line and as a way to “demonstrate the company’s ability to build brands, which is essential for the long-term success of this business” . . . Barfresh Food Group, which has been trying to pivot from reliance on on-premise mixers to healthy bevs sold in schools and other off-premise channels, has notched distribution deal with G&J Pepsi-Cola Bottlers, large indie with cold-channel capability that will take Twist & Go line alongside PEP mainstays Tropicana, Naked and KeVita lines. Assignment follows successful pilot. Cincinnati-based G&J reaches 61 counties in Ohio and Kentucky with population exceeding 4 mil . . . Splash Beverage Group has enlisted indie Anheuser-Busch house Heimark to carry its Tapout hydration line in distributor’s service area of 1,500 accounts in Inland Empire east of LA. Addition augments Splash’s earlier move into A-B-owned AB One network in LA area (BBI, Nov 18). Heimark already carried Splash’s Salt tequila and Pulpoloco canned sangria brands . . . Nirvana HMB functional water has entered 175 Giant Food stores along East Coast . . . Odyssey Wellness, Florida marketer of mushroom-infused RTD coffees and other functional bevs, has entered New Age Distributors in Colo and Wyoming.

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