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Over meatballs and beer at Meatball Shop, eatery on Manhattan's Upper West Side in which he's investor, Praeger gave rundown on both. We covered Wellwell above. As a "clearing" tonic, Modern Alkeme is intended to prep body for cleanse, but more broadly it can be viewed as lifestyle drink. It melds coconut cider vinegar, coconut water, lemon juice and rind, reishi mushrooms, ceremonial-grade matcha green tea, ghost pepper, ginger, burdock root and other ingredients in 8-oz bottle with black label with red disk in center. "Ancient Japanese remedy," front panel states. It's priced at $3.99. (Japanese honey is sweetener.) Brand was launched by Jules Wainstein, NY mom who appears on Bravo's Real Housewives of NY, and Chloe Flower, a musician and composer. Both have Japanese family roots. Brand launched exclusively at Whole Foods and is undertaking friends-&-family finance round, Larry said.
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We profiled winner, cold-pressed ginger shot called Monfefo, last week (BBI, Jun 16). Here are profiles of other 5 finalists. We'll highlight other semifinalists we found intriguing in upcoming issues.
Wellwell The runner-up in judges' voting, Wellwell is 100% organic cold-pressed juice formulated from just 3 ingredients - organic watermelon, full-strength tart cherry, biodynamic lemon - for recovery in athletes. It was created by Sagan Schultz, NY-based personal trainer who was finishing med school and biz school at same time, for anti-inflammation and hydration benefits. Brand launched in Apr in Northeast via WF, just 5 months after Schultz launched co. HPP product is packed in 12-oz straightwall plastic bottle with vivid blue-green full wrap and sports 90+ days shelf life. At $4.99 price, promoted at 2 for $7, it's been scoring velocity of 25-35 bottles per store per week, he told judging panel. Brand enters online grocer Fresh Direct this month. Schultz has been partnering with lifestyle brands like Lululemon, Sweat Life and Outdoor Voices and working boutique fitness studios in NY to get word out. Investor Larry Praeger told BBI that brand is produced at NutriFresh Services in NJ and distributed in city by Rainforest. Its 3-month exclusive at Whole Foods ends this month.
"The taste is amazing, I like the simplicity of the packaging," said VEB's Uzzell. "The problem for me is connecting that to the functionality at the shelf." Another judge, Zico founder Rampolla, worried that sugar content and thickness of liquid might be issue, but founder responded that at fitness events a bottle is typically "gone in 30 seconds." "I've not yet had one negative comment," he insisted. Presence Marketing's Bill Weiland believes "people will accept the higher sugar in this format" but worries that for all clinical research behind it, tart cherry "doesn't really move the needle at retail." And consultant Kara Rubin, a former Whole Foods staffer, urged line extensions that would make it easier to claim more real estate at retail. Info at DrinkWellwell.com.
NOA Relax & Focus Swedish brand creator Noa Fridmark, who left rat race of marketing biz for sojourn on an island in Stockholm archipelago, describes Noa as "functional elixir with botanical extracts" that offers "meditation in a bottle." Operating as Noa Potions, he's trying to "package the feeling from an uninhabited island and bring it to the city." Despite touchie-feelie vibe, Fridmark is no hippie: former brand strategy pro used segmentation models, focus groups and other tools to develop concept, IDing 7 key dimensions to deliver on, then incorporating them in product and packaging. His brain trust includes ex-Absolut exec running marketing and such angel investors as ex-ceo of vodka co and former gm of Red Bull.
Hotfilled drink, with 18-mo shelf life, is packaged in striking 314-ml clear PET bottle with paper overwrap with delicate floral graphics. It's sweetened with fructose/stevia blend. Initial flavor range is Elderflower & Rhubarb, Blueberry & Birch Sap and Wild Apple & Gooseberry. Elderflower sku, for example, includes green tea extract, lemon balm extract. Noa expects it to be priced at $4 in US, with aim of moving price down to $3 as brand grows. So far it's in 20 markets like Mexico, Russia, Japan and S Korea, boasting retail accounts like Harrod's in London and Google's European hq. It just launched in Hong Kong. Fridberg told BBI it's been reformulated for US, with a launch anticipated here in early fall.
Tho some judges hold jaundiced view of relaxation category that's never garnered any traction, sheer panache of execution seemed to win them over. "I expected something not enjoyable to consume but it actually really is," even with stevia in it, said First Beverage Group's Jason Camillos. But he worried that functionality wasn't clearly communicated. "Love the top half, it stands out," said consultant Kara Rubin, former Whole Foods staffer. But "the story you conveyed so eloquently gets a little lost on the bottle." Among criticisms, Presence Marketing's Bill Weiland thought overwrap made it look like beauty care product and Coke incubation chief Scott Uzzell worred that graphics on main bottle were too recessive. Not least, some worried, emergence of marijuana items may bring stiff competition in relaxation realm. Info at DrinkNoa.com.
Vive Organic Wellness Shots Founder/ceo Wyatt Taubman ventured into another realm that's proved challenging to new entrants: wellness shots, in this case a cold-pressed refrigerated item. (Showdown winner Monfefo also fits in this category.) Taubman said ginger shots brought back his strength and energy recovering from near-burnout after earlier entrepreneurial fling. So he recruited team of doctors to craft item with cold-pressed ingredients but no sweeteners or artificial flavors or colors. Line has debuted in kefir-based Digestive Balance, Immunity Boost and Vitamineral Burst sku's; Wyatt believes Immunity shot is first to use cold-pressed echinacea root. (It also contains ginger and turmeric root, black pepper, lemon and pineapple.) Line plays off popularity of ginger and turmeric shots at juice bars, and range of more advanced entries showing up at stores in NY, LA and SF.
Co launched 2-oz organic, non-GMO shots in Apr at natural retailers like Erewhon and Lazy Acres, as well as at college and corporate campuses. Line is packed in clear bottles. Co fine-tunes flavors by testing them on boardwalk in Venice Beach. After bringing in $4 mil in funding so far, Taubman has embarked on seed round to support expansion within SoCal and NorCal, with hope of progressing to private-equity round next year. Co is just getting set up with broadline distributors UNFI and KeHe. Team includes former Plum Organics exec as coo and Starbucks vet as sales chief. R&D firm, branding firm, corporate counsel, broker and copacker all are investors. Retail price is $4.49, disclosure of which drew gasp from audience.
Judges' views: "In the grand scheme of shots, it's certainly awesome tasting, there's some pretty terrible stuff out there," said Jason Camillos. "To take cold-pressed juice and distill it down - there's certainly opportunity there." But Rampolla worried about in-store execution for small bottles, suggesting home delivery as possible prong. Consultant Rubin worried, "Price point's a concern." Weiland: price needs to get to $3.99, promoted at $2.99, and kefir should have 5 bil cfu's, not 1 bil, flagged in burst on pack. Info at ViveOrganic.com.
Tickle Water Briefly profiled here recently (BBI, Jun 2), Tickle Water is unsweetened but flavored sparkling water targeting kids that's packed in Invento's 8-oz PET can - clear-plastic can with conventional metal top that's also being employed, in larger size, in Monster's Mutant soda line due this fall. Pack dials up kid appeal with "hipster animals" in graphics, said founder Heather McDowell, who launched brand as way to get her own kid to drink water. She figures pull-tab should make kids feel like grownups. "Drink your bubbles" is brand slogan. It's launching in Green Apple, Watermelon, Cola and Natural flavors, with no added functional ingredients, GMOs, sugar or artificial sweeteners. Brand is still in early stage, hitting 100+ accounts in NY metro since Feb via DSD house Gourmet Guru. Four-packs are due this month. To get word out, she's working social media, billboards, demos, shuttle vans to Hamptons and tying to properties like High Line and Hudson River Park.
"At Whole Foods we never had success with anything kid-focused that wasn't in a pouch," said consultant Kara Rubin. "I've seen products similar to this in the past - maybe now's the time." "Most unique is the actual package," said First Bev's Camillos. "Sparkling water kind of is sparkling water in my mind." Paula Grant, founder/ceo of Flood Creative, said it offered equal appeal to grownups, terming it a bit of a disconnect. "I like the packaging and space, but it's a commodity . . . very difficult to differentiate yourself." Howell got in bit of trouble with judges over claim that package is recyclable. "Technically, it should be separated," she allowed. "The recycling system will not take it and people are going to find out about it," warned Rampolla. Added former Whole Foods mgr Rubin: "I would fix that sooner than later . . . especially if you're making a claim about recyclable packaging." Said Rampolla: "I do worry when I put on my investor hat and wonder where does this go?" One successful kids entry, Honest Kids, had benefit of being extension of established Honest brand, he noted. Info at DrinkTickleWater.com.
Salud Refresco Launched by Wylie Owens, whose family owns distributor Associated Buyers, Salud Refresco won audience vote at Showdown. Premise is to offer "natural alternative to Jarritos" (tho Jarritos importer Novamex insists Jarritos is natural) and offer approachable way to get people into organic, Fair Trade products. Brand is packed in 12-oz longneck glass bottle with vibrant Latino color scheme on 4-pack carrier. Brand has been picked up by all 34 stores in Whole Foods' Northeast region, priced at $1.99, tho Owens said he'll work to bring price down to try to compete with 99-cent Jarritos. (It was on sale that week for $1.29 at natural grocer.) "Paradise. Found," is slogan.
"Does the world need another soft drink?" wondered Uzzell, the Coke exec. "Is there a provenance, a story about where it comes from? Why is it special, different?" "It doesn't seem like an authentic ethnic product that's out there," said First Bev's Camillos. "Marketing regular soda is a challenge at this point." Added Presence Marketing's Bill Weiland: "$1.49 is the sweet spot, you need to get there as soon as possible. I do like the branding, that you've dialed the sugar back." Info at SaludRefresco.com.
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Panel was called "Chasing Giants" and, asked about strategy by moderator Ray Latif, Shana said, "stay lean and mean, and watch what our giant competitor does." That means seeing in which channels aggressive rival seems to be succeeding and following it there, whether that be conventional grocers and clubs or c-stores and drug chains.
On panel, Martin offered illuminating take on how co is mustering data, noting how key shift - from 16-oz to 12-oz bottle for core line - was undertaken quickly after data began to show 16-oz consumers moving away, reaching more affordable price at time category leader has been aggressively moving its prices down. So plan now is to get price down to $4.99 everywhere, with expectations that 16-oz will be phased out by end of year, Shauna, a vegan for past decade, told BBI over dinner at Blossom restaurant in NY. "No way you can go home and make it yourself for that price," she said of sub-$5 point, noting also that brand initially launched, in larger bottle, at $9. (Some, like BluePrint brand, were priced even higher in earliest days.)
Martin acknowledged that consumers' migration away from 16-oz didn't come as complete surprise, given research indicating some users viewed 16-oz size as a bit much, more of a meal replacement. And in any case, she often spotted consumers leaving behind last few ounces. Counting downsized bottle, co has lowered its prices 3X over past year, she observed. That coincided with rebranding that offers bolder shelf presence in cluttered category, emphasizes that brand packs 4.5 lbs of produce into every bottle and more clearly delineates which items are sweet, probiotic-enhanced, etc.
Meanwhile, co is dialing up messaging about its quality in packaging, POS and marketing activities, emphasizing that unlike many rivals, Daily Greens doesn't use frozen ingredients or purees, and sources directly with its farmers. "When you see a retailer where your competitor is priced a dollar lower and dealing down 60% of the time, that I can't do that," she said, in clear reference to Suja. "We concluded the right customer, particularly in natural (channel), gets the quality." She also noted, "Even though they're usually at a lower price point than us, most consumers get the quality play and will pay a bit more." At same time, she lamented that most juice bars in this country are no longer organic, increasing need for Daily Greens to educate consumers on importance of organic, "why it's better for you and why it's better for the planet."
Another emphasis lately at Daily Greens is to keep line tightly edited, quickly winnowing items that don't perform. That's usually apparent right away, as newer items that are embraced by consumers ascend sales rankings within line, she said. Thus, co has narrowed its 3 hemp milk sku's to just 1. But well-received algae-infused Green Lemonade entry likely will expand. But everything must continue to have core green component. Co continues to experiment with Half Pint, 8-oz pack targeting kids and those seeking lower price or calorie count, recently putting it in 8-oz multipacks for Costco warehouse chain.
As for retail expansion, co hits Sprout's natural chain in Aug. Co has also hired foodservice specialist to make greater headway there. By now brand is in about half of Kroger stores and one-third of Safeway stores, as it takes measured push into conventional retail.
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06/17/2016
Kombucha Leaders GT's, Health-Ade Leaving Sales on Table as Output Can't Keep Up with Demand
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According to white paper issued on topic by NaturPro, "measurements of precision from repeated testing of the same samples resulted in a variation of less than 4% among the samples. This precision met the standard method performance requirements established by AOAC International's working group on ethanol testing in kombucha. Among the sets of samples found to be tested with accuracy were lab-blinded Certified Reference Materials (CRM) from the National Institute of Standards and Technology (NIST). Further, analysis of kombucha spiked with known amounts of ethanol revealed that the test material did not interfere with method accuracy." Because some kombucha producers and KBI have argued that kombuchas' solid matter, organic acids, carbon dioxide and spices and flavors containing essential oils interfere with analysis of volatiles, commercial sample chosen for testing was ginger-flavored kombucha of unidentified brand purchased in Feb from grocery in Carmel, Ind.
In addition to that single-lab verification (SLV) study, co also performed multi-lab survey in which 4 labs tested 80+ commercial kombucha and CRM samples using various methods over 4-month period, finding that data from all but 1 lab were "generally accurate, precise and consistent." That lab, employing unconventional EPA methodology, is identified only as "Lab #3" in paper, but authors say it was selected based on public recommendation by KBI, suggesting it's Cornerstone Labs, with whom KBI has been working on alternative method. (The other 3 labs were Covance, ETS Laboratories and Brewing & Distilling Analytical Services.) "It is difficult to speculate on the nature of the measurement inconsistencies in results reported by Lab #3 without further investigation," paper states. Study does acknowledge that "based on the extensive history of testing ethanol in foodstuffs, it can be presumed that multiple methods will eventually be proven valid and fit for purpose for kombucha." Alcohol regulator TTB has said it's receptive to alternative methods that are proven to be effective.
Findings are being submitted to AOAC for publication and will be presented next month at Institute of Food Technologists annual meeting. Study received financial support as well as standardized kombucha materials used for control reference samples from KeVita, kombucha marketer that's been outspoken about reported lapses in alcohol compliance, but NaturPro and Covance said co had no influence on study execution, analysis or findings. A separate study has been examining issue of measuring sugar levels in kombucha, another point of controversy in industry. Info at NPScientific.com
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06/16/2016
DISTRIBUTION: Reed's Stronger Ginger Brew Wins National Presence at Kroger; Bucha Hits Smith's
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06/16/2016
Philly Passes Tax
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LA-based Michaels, 42, built profile via personal trainer biz, best-selling book, radio programs, XBox games, TV programs like Biggest Loser and Losing It with Jillian, supplements sold under her name and home-fitness video operation under names like BodyShred. Common thrust of all the outside investments? "Better-for-you products that people will enjoy," she said. Coffee space was natural arena to play in, given crop's ranking as 2d-most heavily reliant on pesticides, meaning organic offering reps big upgrade, she said.
Tho market is awash in coffee brands, Lucky Jack offers ownable position as organic, nitro-infused, based on real espresso concentrate. For investing duo, Giancarlo noted, it also presented first chance to take operational control of biz, rather than serving as passive investor. "We felt we had graduated and could take this on," said Giancarlo, who confided he's not coffee drinker himself. It's chance to "step up our game." Colleague in venture, Matt Ammirati (whose agency, Resource/Ammirati, earlier worked on Vitaminwater), is undertaking brand study to determine which channels to emphasize and which levers Michaels might be able to wield to build biz. "I have the ability to bring a megaphone to it with a public persona," as she explained. She allowed that she might not resonate with millennials, particularly males, and even be viewed negatively, "but they'll hear me."
As for Aquahydrate, Michaels confirmed she's about to step up involvement, move that's been in works since new ceo Hal Kravitz came into picture but whose announcement this week apparently was deferred at time Orlando mass shooting dominates airwaves. Announcement, when it does come, will note that consumers soon will be seeing tractor trailers cruising around country carrying Jillian's image (as well as those of fellow celeb investors Sean "Diddy" Combs and Mark Wahlberg - BBI, Jun 13). Michaels hinted at aggressive stance she'll take by referring to competing sports hydration products carrying blue hue not found in nature as "just filled with poisons." She said she approached Kravitz early in his tenure to argue that he's not reaching women with current marketing, setting stage for her to step up. Like Lucky Jack, Aquahydrate is clearly premium player in space, offering higher mineral and electrolyte content than rival brands.
What do Michaels and Chersich seek in investments? For starters, they may be looking for fewer deals now, since operating role at Lucky Jack is soaking up time/attention. To this point, "out of 10 things that come our way, half of one makes it through," Michaels said. In any category, flavor is paramount. They'll look at supernutrients, seaweed - but "if they don't taste good we don't get involved," she said. Scope is broad: alcohol, nutrition bars, bread, ice cream, gelato. Item must rep clear upgrade in category, as Popchips does in chips realm by omitting MSG, transfats, artificial colors and flavors. Segment should offer chance of real scale - reason Kor raw shots or Fire Cider apple cider vinegar may not make the cut despite appealing taste and branding. It shouldn't be in segment that's getting commoditized - reason duo passed on prospective investments in nut butters. "It has to be profitable, it is a business, our partners need to make money." Tho on brink of extinction at the time partners invested, Lucky Jack was appealing for playing in explosively growing cold-brew segment where retailers don't make new entrants wait for next Plan-o-Gram reset.
At least so far, Chersich claimed to relish shift from doing mega-media deals to hands-on role at Lucky Jack, where he sometimes works the line and has sought to embrace co's culture while adding incentives for better performance. "Every day I'm learning and getting my ass handed to me at the same time," he readily allowed.
More BevNet Live coverage, including profiles of other Showdown finalists, in upcoming BBI issues, readers.
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