Celsius Holdings continues to

move its Celsius calorie-burning bev into impulse channel, notching pair of major c-store wins in recent weeks.

Fla-based co said it’s won national authorization for 4 sku’s in 7-Eleven chain, as reported recently in BBI (Jan

26), as well as 2 sku’s in Sunoco, where brand will be displayed at energy door via suction-cup racks. As earlier

noted, 7-Eleven deal includes 12-mo exclusive on newest Celsius flavor, Sparkling Grape Rush. Together, deals

hold potential to add 8K new doors for canned energy line, tho individual store owners also need to be sold on

line. To make headway on that front, Celsius brought investor/endorser Russell Simmons along to recent 7-

Eleven Experience internal sales expo.

In new “Carbonating the World” report,

Center for Science in the Public Interest takes aim at Coca-Cola and PepsiCo’s global expansion and investments,

and attempts to turn their international biz plans into sinister plots. “With soda sales in a tailspin in the United

States,” KO and PEP “are borrowing a page from the tobacco industry playbook” by “investing heavily” in low-

and middle-income countries,” CSPI dir Michael Jacobson charged this morning. He cited “billions” spent by

these cos to build bottling plants, acquire brands and market to children in Brazil, China, India and Mexico as

major threat to public health. He credits Mexican gov’t for taking action and implementing tax that raised prices

by 10% and cut consumption by 6% and urged gov’ts in other countries to take action vs sugared drinks. Dr

Barry Popkin of University of North Carolina, a frequent CSPI ally, noted as positive steps a recent 8% tax in

Chile and ban on morning TV ads there that would appeal to children during those hours. Doc also noted that by

end of 2016, there should be another 6-7 countries that will have increased taxes and implemented significant

mkting bans vs sugared bevs.

Among lengthy lists of asks, CSPI report urges countries to “make improved nutrition a top priority, especially in

the light of the global obesity epidemic.” They should do so by restricting sugar content in bevs “to about one-

fourth of current levels,” adding excise taxes on sugared drinks “that would boost prices” by at least 10-20%.

Counties should ban all sales of sugared drinks at schools and advertising of sugared drinks aimed at children “in

all media.” They also want gov’ts to require on-pack warning labels and ban sugared drinks from children’s

menus at restaurants. CSPI is urging more involvement from World Health Organization vs sugared bevs, and

believes org should “set an example by from removing sugar drinks from WHO facilities in Geneva and

elsewhere – as well as at all other units of the United Nations – and not serving sugar drinks at meetings and

conferences.”

Bevcos should “acknowledge that heavy consumption of their full-calorie products contributes to obesity and

other health-related problems,” claimed CSPI report. It calls for end to “all forms of marketing that are intended

or likely to influence children under age 12,” reduction in container sizes, and limiting calorie content of drinks to

no more than 40 calories per 12-oz drink. Tough to say if anyone outside US will take notice. CSPI briefing this

morning was scheduled for 45 min but lasted less than 20, with not one question from media.

Industry Response: CSPI Ignores Global Impact of Bevcos; Mkting Guidelines in Place Bevcos “are good

global citizens who follow responsible marketing practices” and have innovated a wide variety of bev choices

including low- and no-calorie options, said Int’l Council of Beverage Assns in response to CSPI claims. CSPI

“ignores the economic importance of the jobs and the investments beverage companies bring to hundreds of

thousands of employees and their families worldwide who welcome our industry to their communities,” added

ICBA. Bevcos also already have standards in place, as ICBA Global Guidelines on Marketing to Children ban

ads “where 35% or more of the audience consists of children under the age of 12.” That includes “company-

controlled TV, radio, print, cinema and online marketing.”

On Coke’s quarterly conference

call today talk of accelerated refranchising plan pretty much squeezed out any discussion of past year’s

performance beyond #s released in earnings report before call. For Q4, revenues declined 8% to even $10 bil, but

operating income rose 5% to $1.52 bil. For full year, revs were off 4% to $44.29 bil, and operating income

dropped 10% to $8.73 bil.

In crucial N Amer market, case volume grew 3% in Q4, compounded of 2% CSD gain and 6% noncarb gain. On

sparkling side, Coke Zero, Sprite and Fanta were all up, but Diet Coke continued to decline. Noncarbs were

buoyed by juices, RTD teas and bottled water. That 3% growth repped acceleration of 1% volume growth for full

year, when CSDs were flat but noncarbs managed 5% gain. Still, with price/mix gain of 1% not enough to offset

3% concentrate decline, N Amer revenues sagged 4% to $5.15 bil. (Results weren’t helped by having 6 fewer

selling days vs year earlier, KO noted.)

On international front, solid performance in many Latin American markets was offset by slowing environment in

China, Brazil and Russia.

Saying it likes results it’s seen

so far, Coca-Cola said it’s accelerating refranchising program, promising now to have entire N Amer market back

in outside hands by end of 2017, 3 years earlier than initially anticipated. As sign that market is buying into

ongoing turnaround of soft drink giant, coo James Quincy this morning stressed that “more people are coming to

the table saying we want to be partners. So they’re seeing we’ve fixed the business and built momentum and so

there’s a lot of heightened interest.” Reiterated chmn/ceo Muhtar Kent: “One of the litmus tests for the health of

the Coca-Cola business is the desire of investors and franchise partners to have more territory, and that’s at an all-

time high.”

The strategy removes a large chunk of capital from KO’s books while returning it to role as brand-builder that

leaves in-market execution to more agile, motivated outside partners. Returning to “our core model” was always

the plan, “as soon as we got some things right,” via purchase of N Amer operations of Coca-Cola Enterprises in

2010, ceo Kent emphasized. Those assets have since been grouped as Coca-Cola Refreshments, while CCE has

become entirely an overseas player, despite being based in Atlanta. For KO now, it’s a question of “putting our

bottlers in the right hands,” Kent said. Once process is complete by end of 2017, “we will look very different

than we do today as we return to focus on core strengths,” he promised.

Process began when CCE acquisition allowed KO to rewrite franchise rules that sometimes dated back a century,

clearing way for efficiencies like direct shipping of low-margin items like casepack water to retailers or unifying

IT systems. Now, under new set of governance principles, KO is ready to put territories back in hands of nimbler,

more focused indie operators, noting that to date, performance has improved in every refranchised market. “We

feel every time the territory is transitioned it has continued to do well, gain share, gain momentum, drive

incremental transactions,” Kent said, “without exception in any of the territories we’ve transitioned.” Under

broad rubric 21st Century Beverage Partnership Model in North America, new system calls for indie operators to

handle coldfill production and distribution while Coke retains control of concentrate and hot-fill output via new

setup called National Product Supply Group in which key bottlers hold board seats.

KO offered new time frame in process of announcing new batch of deals involving parts of Ohio, W Va, Penn,

Oreg and Calif, and releasing full-year financials for 2015 (story below). The new deals include a bottling plant

in Toledo, Ohio, in keeping with co’s plan to cede control of coldfill production, which now will move back in

entirety to outside operators. (That does represent a recent reversal of earlier strategy, by which KO had intended

to hold onto even most coldfill production.) On conference call this morning, tho, Kent made it clear KO intends

to maintain control of hotfill and juice production under revised governance plan recently released with bottling

partners.

The new letters of intent would move additional territory in Ohio and W Va, including Akron, Elyria, Toledo,

Willoughby, and Youngstown County in Ohio as well as the Twinsburg plant, to Coca-Cola Consolidated. Also

being transitioned is territory in Penn to Pittsburgh-based Abarta Inc and territory in southern Oreg and northern

Calif to Coca-Cola Bottling Co of Roseburg (Oreg). It also closed earlier-announced deal with Coke

Consolidated involving territory in Md and Va as well as bottling plant in Sandston, Va. With latest deals,

territories accounting for more than 40% of bottle/can volume in US are accounted for. Canada remains white

space in which first deals have yet to be announced.

The latest deals show that Charlotte-based Coke Consolidated, KO’s largest indie bottler in US, continues on a

roll, having picked up or being in process of picking up territories in Tenn, Ky, Ind, Va, Del, Md, Ohio and Ill

and bottling plants in Sandston, Va; Twinsburg, Ohio, Silver Spring and Baltimore, Md; Indianapolis and

Portland, Ind, and Cincinnati.

KO also seems to be stepping up refranchising activities overseas after prior moves in Germany, Iberia and

Africa, now entering non-binding letter of intent to refranchise operations in China to its 2 existing partners,

Cofco Ltd’s China Foods unit and Swire Beverage Holdings Ltd. Refranchising in Germany has helped that

market move to becoming strongest in Western Europe, KO brass noted.

Questions on NY, So-Far- Missing Partners Like Femsa Lotsa questions on how Coke will meet that 2017

deadline. One is future of CCR operation NY, widely regarded as basket case within system, in market that even

in best hands is uncommonly complex and expensive. By some accounts, CCR NY routinely loses $50 mil a

year, and it’s beset with union issues, too. One frequent rumor on street over past year has been that, in order to

sweeten pot to potential refranchisor, KO plans to move its higher-end VEB brands – Honest Tea, Zico Coconut

Water and Illy Coffee – as well as Monster Energy from indie bottler to CCR, in wake of similar transition that

saw switch of Vitaminwater and Smartwater to CCR. But execs at both KO and indie house Big Geyser have

denied that’s case, and local CCR chief Fran McGorry recently issued memo re-asserting that VEB brands are

going nowhere. “There is currently no plans to transition Zico, Honest and Illy from our Big Geyser distributor in

New York to our Coke DSD business,” Fran wrote to exec team on Jan 20 in effort to put rumors to rest. “Please

cascade this message to your teams.” Note that execution is not at issue here: under Big Geyser, VEB brands and

Monster seem to have all performed well, even as Glaceau brands seem to have faltered since moving over to

CCR.

Another source of puzzlement to some Coke watchers in refranchising picture has been how come 2 strong

potential partners, Coca-Cola Femsa and Coca-Cola Northern New England, haven’t surfaced so far as reaping

any territory bounty. Femsa, whose execs had been seen a coupla years ago inspecting CCR warehouses in

Southern Calif, has rep for superb execution and, as Mexican co, would be well-equipped to connect with vast

and brand-loyal Mexican American demo within Southwest quadrant. While Swire has gained some territory in

Southwest, so far Femsa has been left out of picture. Coke Northern New England, meanwhile, is backed by

powerful parent in Japan’s Kirin and would seem clear candidate for territory being refranchised in Northeast,

possibly including NY. Indeed, there were rumbling a few months ago that a deal was happening but no

announcement was made. Answers are no clearer now on issues like these – except that Coke has now resolved

to have them solved, one way or the other, by end of 2017.

Coca-Cola, PepsiCo and WhiteWave Foods all

are being cited in media reports as suitors for Chobani yogurt co, tho PEP seems out of running over desire –

which Chobani has resisted – to acquire control and Bloomberg has also reported that KO had decided it wasn’t

good fit. Recall PEP recently bailed from joint venture with Muller in Dec by closing upstate NY yogurt plant in

operation since 2013 . . . Iconic freestyle BMX bike rider Dave Mirra was found dead last Thurs in Greenville,

NC, of what local authorities said appeared to be self-inflicted gunshot wound. “The winner of 21 X Games

medals in BMX Vert Ramp and Skatepark, Mirra — one of the 10 most recognizable names in all of sports!

(Read: Guys like Tiger Woods and Michael Jordan) — has won virtually everything there is to win in alternative

sports — be it medals, competitions or awards,” states his profile on Web site of Monster Energy, for whom

Mirra was key endorser . . . Center for Science in Public Interest has downgraded its safety rating of sucralose

from “caution” to “avoid” after formal publication of study by Ramazzini Institute in peer-reviewed Int’l Jnl of

Occupational & Environmental Health. CSPI had previously downgraded ingredient, known by brand name

Splenda, from “safe” to “caution” when Ramazzini first presented findings at conference in 2013. Study is said to

show that sucralose caused leukemia and related blood cancers in male mice.

Juicing, make way for souping. At least,

that’s where some trend-forward consumers are going after getting leery of sugar spikes and other liabilities of

juice cleanses, and they’re having no problem finding suppliers under names like Soupure and Soupelina (both

LA-based), Splendid Spoon (Brooklyn) and Real Food Works (Philadelphia). “The appeal of souping, in part, is

that it promises and easier detox than a juice cleanse,” noted NY Times story. In process of offering items like

Kale-lifornia Dreamin’ and Lentil Me Entertain You! (2 Soupelina offerings) the marketers are tapping into other

hot food/bev ingredients and trends, from spices like turmeric and cumin used to make the light soups flavorful to

fruit-flavored alkaline waters included by Soupure in its offerings. When paper noted that some Soupure items,

like thick strawberry/cashew blend, didn’t seem like soup, founder Angela Blatteis allowed, “I would say that

some of our cold products are cold soup smoothies.” Main point, she said, is that they’re thicker, more

nourishing and nutrient-dense than juices. Taking a leaf from juice marketers, many of whom have written

cookbooks detailing their recipes, many of the soup marketers have published books under titles like Blatteis’ The

Soup Cleanse.

Fresh on closing $20 mil investment fund, AccelFoods announced newest members

of its accelerator “class,” its 4th, with roster that includes maker of brewed iced coffee called Wandering Bear.

New fund, reported this morning by Wall Street Journal, is intended to back cos from pre-seed phase through

Series B rounds, and drastically broadens scope of food accelerator that closed its debut $4 mil fund back in Jan

2014. “Class IV represents a number of areas we are exploring in our restaurants, from ethnic flavors and gluten

free offerings to cold brew coffee and protein snacks,” said celeb chef and AccelFoods advisor Tom Colicchio.

Latest class members “don't just represent innovation, they represent good food.”

Recent classes at AccelFoods have tilted heavily toward foods rather than bevs, with Class III comprised entirely

of food brands, but newest class includes a couple that play in bevs, tho not in classic single-serve RTD formats.

NY-based Wandering Bear, founded by pair of coffee-obsessed Columbia Univ biz school students, offers cold-

brewed coffee that’s steeped 18 hours and dispensed out of tap-equipped boxes (BBI, May 29). And Tea Drops

offers bagless, compressed tea that dissolves in hot water. Also in mix is bone broth co called Nona Lim, as well

as 3 food brands.

Hyundai’s TV

spot with comedian Kevin Hart grabbed top spot in USA Today’s annual Ad Meter poll of Super Bowl ads. That

ended 3-year reign of Anheuser-Busch, which has dominated survey over past 15 years. Indeed, automakers

grabbed 6 of top 10 spots last night. PepsiCo’s Doritos put up strong showing once again, ranking #3 and #4, but

no bev spots cracked top 10 except a PSA from Bud. Coca-Cola’s battle between Hulk and Ant-Man over a mini-

Coke ranked well, at #19, fortifying brand’s push to attain greater price realization by pushing smaller packs at

higher cents per oz. Halftime show sponsored by Pepsi ranked #31, similar to last year’s middling placement,

and received mixed reviews, with frequent criticism that flat Coldplay act had to be bailed out by performers from

2 of last 3 shows, Beyoncé and Bruno Mars.

Pepsi’s biggest winner on bev side was “Joy of Pepsi,” in which “Janelle Monae's talent takes her from the 50s to

the present day in this kicky commercial from Pepsi that almost acts like its own halftime show,” advised

Mashable of spot in which pop star dances through 3 different time-themed rooms that camera pulls up to reveal

as compartments within Pepsi brand disk. Ad created by The Marketing Arm featured revamped Pepsi jingle

and, as Mashable noted, was first Pepsi spot to feature big-name celeb since 2013 ad with Beyoncé.

Meanwhile, this may be Chinese Year of the Monkey but it’s Mtn Dew Kickstart’s puppymonkeybaby that’s

grabbing headlines. While spot ranked just 55th out of 63 ads in Ad Meter, the online buzz continues for ad and

brand, which seemed to be transparent objective of concept. “Puppymonkeybaby sounds like something out of a

brainstorming session that started with: ‘Why don’t we combine the highest-testing elements of every Super Bowl

commercial ever done?’” figured LA Times’ Stephen Battaglio. “But the result looks more freakish than

adorable – probably the right approach for the potential caffeine-addicted young males who would sample

Mountain Dew Kickstart.”

While ad features a “freakish-looking creature,” the “spot will play well with millennials, though it will be

‘polarizing,’” Kait Strovnik, assoc creative dir at Publicis Groupe’s Sapient Nitro, told Wall Street Journal.

“Puppymonkeybaby was offputting but my kids laughed hysterically,” a 41-yr- old pharma exec told paper.

“Horror hallucination of brand awareness,” Gawker called spot.

Ad Age gave ad 4 stars, ranking it among Bowl’s best, crediting premise that “once revealed, finally snaps your

attention from the incomprehensible star to the comprehensible Mtn Dew Kickstart. It’s likely a very productive

return to the Super Bowl for Mtn Dew, absent for 16 years,” wrote mag. Ad also got thumbs up from Adweek,

while USA Today asked readers, “Cute or creepy?” Since debuting online last week, #puppymonkeybaby

already has a half mil Twitter followers with nearly 27K folks tweeting their thoughts both bad and good.

Comments range from “creepiest commercial of all time,” “thanks for the nightmares,” to “Where can I adopt a

puppymonkeybaby?” As you can already tell, lotsa posters used words “nightmare,” “creepy” and “terrifying” in

takes on ad. “Every major media outlet is talking about what a bad ad #puppymonkeybaby was, but if everyone’s

talking about (it), isn’t it a good ad?” tweeted amateur critic Jake Zuckerman, with some overstatement.

Bai joined Coke and Pepsi in enthusiastically joining menagerie of animal-focused ads on Super Bowl 50 with its

30-second addition to campaign that’s previously employed quick 15-second bursts. Ad, which aired in top 3 US

markets (and therefore wasn’t ranked on Ad Meter), extended campaign that’s used nonsensical pairings to

highlight that brand’s “5 calories, antioxidants and tastes amazing” just doesn’t make sense. As noted last week,

it’s coincidentally near-identical premise to Puppymonkeybaby. In Bowl execution, “a white stallion pulls some

pretty slick equine dance moves, thanks to an unlikely horse whisperer who looks more gangsta than animal

trainer,” summarized Ad Age’s Creativity blog. In ad, blinged-out dude on horse farm opens by confiding in

thick goombah accent, “Yo, some people think it don’t make sense that I’m a horse whisperer,” before turning to

yell at horse, “Fancy prance, y’know?”

Courtesy of Intuit sponsorship of spot, Death Wish Coffee scored major exposure that any small brand would kill

for. Its spot was ranked #33 in Ad Meter in front of audience of 112 mil viewers.

Death Wish Coffee Rides Surge of Awareness Like front runner in political campaign, Death Wish Coffee’s

free ride on Intuit ad buy has made it appealing target for attacks by others in space. Even before ad aired, during

last week’s media buildup, NY Times wondered out loud whether ominous tone in brand’s marketing picked up

on trope already established by Mass rival Dean’s Beans and its Ahab’s Brew coffee (which may have been an

ingredient in early version of Death Wish blend). “Was anything they did illegal?” said Dean’s Beans founder

Dean Cycon. “Nope. Was it unethical and deceptive? In my mind, yes.” Meanwhile, publicists for recently

launched Forto Strong Coffee are looking to turn caffeine levels into arms race, perhaps in way that craft brewers

have worked to outdo one another in bitterness or alcohol levels in their IPAs and imperials. “Ounce for Ounce-

Prepared, Forto Strong Coffee Beats Death Wish Coffee and Nespresso with 100 mg of Caffeine per Ounce,”

headlined release from Forto, playing on brand’s 2-oz format (BBI, Oct 15). “We loved packaged coffees like

Death Wish for their caffeine level, and decided to take that to the next level with our own wholesome, Organic

Strong Coffee Shot,” Forto founder Neel Premkumar proclaimed.

Coca-Cola’s Glaceau unit seems to be

going down and dirty on pricing behind its Smartwater brand in NY, until recently a marvel of superpremium

pricing consistency. Front-page promo on Stop & Shop flier pools 1-liter bottle of Smartwater with core CSDs

Coke and Sprite at 88 cents unit for purchasers of 5 or more. Retailer is also offering 750-ml sport-cap bottles at

79 cents to purchasers of 5. Note that aggressive promos on sibling brand Vitaminwater have been familiar

features of retail landscape for some time, but KO had managed to keep Smartwater growing at double-digits

without recourse to deep promos for most part. But since Vitaminwater and Smartwater brands transitioned from

indie distributor to KO’s Coca-Cola Refreshments unit over past year, Smartwater’s presence at indie retailers

appears to have faded, with Smartwater-branded coolers often crammed with newer entries like Core Water,

Essentia and Aquahydrate . That may have upped pressure to blast product thru chain promos.

We’re still marveling

over rising awareness of matcha green tea, but Bloomberg Businessweek already is calling ingredient old hat.

“Forget Matcha, It’s Dandelion Coffee Now,” headlines story describing “roasted powder blend mixed with water

or milk (that) looks like what you’d get at Starbucks.” Made from dandelion root, barley, rye, chicory and beets

(there’s no actual coffee in it), drink “exploded, naturally, in LA” and “people like that it tastes similar to coffee

and has that richness but doesn’t have the stimulant of caffeine,” server at Kitchen Mouse vegetarian restaurant

told mag (tho it does contain vitamin B, which can have stimulating effect). By now dandelion coffee is available

in prepackaged blends such as Dandy Blend, cited in story. Read more here:

http://www.bloomberg.com/news/articles/2016-01- 27/forget-matcha- it-s- dandelion-coffee- now