Heading into final days of year, CSD marketers seemed to be sticking to their bias toward worrying less about volume trends than extracting stronger pricing from consumers, even as energy drinks continued strong ride of 11% $$ gains on stable pricing. And iced tea continued to be growth story, as all key players enjoyed balance of price realization and volume gains. Mid-cycle Nielsens for all-channels reported by Morgan Stanley's Dara Mohsenian include convenience & gas channel, for 4 weeks ended Dec 12.

CSD $$ sales came in flat year-over-year for period, vs -0.3% for 12-week period, as 2.9% cut in volume was exactly offset by 2.9% gain in pricing. Coca-Cola ended up 0.4% in plus column on $$ as volume slipped 1.3% but was more than offset by 1.7% lift from pricing. By contrast, Pepsi $$ were off 1.4% as volume sagged 4.9% and price only rose 3.5%. DPS ended period with biggest $$ life, +1.5%, as a 1.5% decline in volume was offset by 3% price gain. Maintaining pattern of past coupla years, regular CSDs fared far better than diet CSDs, overall off 1.4% in $$ as 4.9% lift in pricing failed to offset steep volume decline of 6.3%. Among Big 3, Pepsi took biggest hit, with $$ sales off 8.4% in diets.

Energy segment was a different story. Category sales rose $11.1% in $$, accelerating 12-week trend of +9.9% and besting 2-year avg sales gain of 10.3%, Dara noted. Monster Energy sales accelerated, surging 9.3% from 12-week trend of 6.8% and slightly besting 8.9% growth over past 2 years, suggesting transition to Coca-Cola bottling network is going smoothly enough. In core C&G channel, Monster sales rose 6.4%, accelerating from 3.9% over 12 weeks. For 52 weeks, Monster's $$ share now exceeds Red Bull's, 41% to 38%, per Nielsens.

Its key rivals also performed well. Red Bull rode 6.1% volume gain and 4.2% price gain to score $$ lift of 10.3%. Rockstar, moving mainly thru PEP system, continued its resurgence, scoring 21.6% $$ and volume gains on flat pricing. That's slightly moderated level from 12-week period but well ahead of 15% range over 52 weeks. Private-label brands went down and dirty on price, -17.7%, in process scoring 45.1% volume lift, +27.4% in $$.

Among other categories tracked by Morgan Stanley team, iced tea seems to be in sweet spot (even unsweetened varieties). In latest period category $$ rose 10.6% from balance of 6.6% lift in volume and 4% lift in price. Pepsi continued to be easy share leader, at 30%, as its tea portfolio, including fast-growing Pure Leaf, scored 16.6% $$ gain. Coke, whose portfolio of Gold Peak, Fuze and Honest Tea holds 12% share, closed gap a little with 24.5% $$ gain, mainly on volume (+19.8%). DPS (Snapple) also enjoyed healthy trend, gaining 13.4% in $$ thanks to 9.3% volume lift; it holds 9 share of iced tea biz. Both bottled water (+9% $$ sales gain) and isotonics (+9.2%) showed healthy sales gains, but on pricing that was generally flat, not up.  

What seems to have been long-simmering tensions at brand incubator MetaBrand have erupted into open this week, with co's terse announcement that MetaBrand founder Eric Schnell left the co earlier this month, with his duties now being split by former colleagues Craig Fortin, the prexy/coo, and Debbie Wildrick, chief strategy officer there. MetaBrand, based in Edison, NJ, offers broad array of brand-incubation disciplines, from capital-raise to formulation to sales strategy, with uncommonly large payroll and ties to partners such as formulation house Teawolf and supplement maker Reliance Vitamins, at whose production facility MetaBrand has been based. Its extensive client roster has included Runa Guayusa, Tio Gazpacho drinkable soups, REBBL tonics, Martha Stewart Uliv Java, FitPro Protein and strategics such as Pret a Manger, for whom it's created in-store bev lines.

There had been rumblings of changes coming over past coupla months, but most had Schnell seguing out of ceo role but continuing to play instrumental role on managing clients and brainstorming product ideas. But Fortin and Wildrick today put out terse announcement to clients, partners and other constituents, saying simply, "This is to inform you that effective Dec 9, Eric Schnell is no longer a manager or officer of MetaBrand LLC and I Am Products, LLC. Eric's responsibilities have been transitioned to Debbie Wildrick, MetaBrand's Chief Strategy Officer, and Craig Fortin, the company's President & Chief Operating Officer." I Am started out as shot supplement line created by Schnell, tho it has since broadened role. Schnell is longtime natural foods vet, whose past experience includes launch of Steaz green tea brand with Steve Kessler. Fortin brings diverse background, including stint at Skinny Nutritionals, and recently added prexy title to his initial coo role. Wildrick also is bev vet with experience going back to influential role as 7-Eleven buyer.

It's believed that change was orchestrated primarily by key investor, Austrian-born financier and philanthropist Gerhard Andlinger (known as "Mr A" within co) after he grew impatient at accumulating losses. Tho Eric was ceo, at some point in past year co restructured decision-making process to require unanimous thumbs up from Schnell, Fortin and Wildrick on key biz issues. In brief conversation this afternoon, Debbie said co has dropped past efforts to bring in outside capital in favor of reaching profitability by establishing new budget with narrower team of 8 employees, including 3 on formulation side. Schnell will continue to helm recently launched MetaCan Medicinals hemp/cannabis unit, with Wildrick seguing from vp there to MetaBrand's rep on board. It's unclear where things stand on pursuance of MetaFund's Fund B, successor to A fund that was fully deployed on investment in Runa. Meanwhile, statement from Eric said he'll also pursue other startup ideas such as moringa-based Leaf of Life, brand he's creating with ex-Whole Foods exec Jeremiah McElwee and Grammy award nominee Rocky Dawuni. "I am charged and excited like never before, starting a new chapter and getting to reinvent myself again is thrilling," he said in statement. BBI wasn't able to reach him immediately.  

Milwaukee-based copacker King Juice continues to add structure to its hit Calypso Lemonade brand, planning new packaging configurations, first seasonal entries and better-orchestrated cause marketing initiatives, even as it hopes to have rounded out top exec team in coming weeks with last key hire.

Among key initiatives for next year, said prexy Jeff Outlaw, Calypso will finally do more to diversify its iconic 20-oz glass package, dropping 16-oz PET format that was devised for foodservice in favor of 15.2-oz can that will go out more aggressively to beaches, golf courses and other non-glass venues and be offered in brand's first multipack configuration, a chipboard-enclosed 4-pack of type employed by energy drink marketers like Monster and Red Bull. The cans, and their outer wraps, offer better billboard effect for Calypso's lifestyle-oriented graphics and initial flavor range - Original, Strawberry Lemonade and Ocean Blue - will present red, white & blue assortment in retail displays. Outlaw noted that co was careful to stay away from 12-oz cans or 6-pack ringers that connote CSDs in favor of more distinctive, premium look. That said, new packs are hemmed with restrictions to prevent them from cannibalizing 20-oz glass bottles. Co is still analyzing pricing of new configurations.

Brand also will inaugurate its first seasonal entries, with spring/summer offering and fall/winter offerings that will be tied to Calypso Cares cause marketing initiative that will get more structure in 2016, better enabling wholesalers and retailers to coordinate promos with it. Among charities that will be woven into mix will be Lemons of Love program delivering care packages of Calypso to chemotherapy patients and orgs targeting military members and vets. King Juice owner Tim Kezman has long history of generosity to such causes, Outlaw noted, but now co is adding structure and resources to effort.

Areas where brand is not ready to tread are zero-calorie offerings - where sweetener technology currently stands, that's inconsistent with full flavor and juice content of core line, Jeff said - and multiserve packs. There's little pressure for zero-calorie offering, co believes, given brand's well-rounded demo spanning young males who don't overly worry about calorie counts to women who consume it as occasional indulgence, sometimes as cocktail mixer. Besides, "there are no health expectations when it comes to lemonade," execs figure. So, with overall brand ACV still barely breaching 20%, there's plenty of room for growth without such radical tinkering.

Recall that longtime brand sales/strategy consultant Outlaw 2 years ago stepped into full-time role on brand as #2 exec to Kezman, recruiting Andy Sands as vp marketing and elevating long-time employee Bill Stineman to vp natl accts. Last key role to be filled is vp of field sales, with new hire imminent, Jeff said. That will free him to concentrate more on working with Tim on innovation and strategic issues.

With Sands running marketing, Calypso in past year has embraced social media and upgraded Web site from distributor portal to consumer-facing lifestyle site sporting drink recipes and other info heralding broad range of occasions to which Calypso is suited. Brand has begun to engage in cobranded displays in liquor stores with spirits marketers and is exploring more formal alliances, much as brands like Reed's Ginger Brew have done with partners like Pernod Ricard to ride Moscow Mule wave.

Tho Outlaw demurred on discussing volume, brand is believed to have finally crossed milestone of 4 mil 12-unit cases that it had long targeted but was forced to defer because of production and other disruptions. Still, 2015 hasn't been without headwinds, mainly on distribution side. Exit of Monster from Bud houses created havoc at key distributors particularly in Carolinas, Tenn and Va as they navigated transition, wrangled over buyout and adapted to loss of massive volume and gross profit generator, period they've only began to emerge from in recent months, Outlaw said. (Magnitude of upheaval overrode that Calyso's tenure as supplier for 5+ years in some cases.) Tho those houses' long-term commitment to NA biz remains uncertain, for now, at least, Monster departure has left Calypso among top 2 brands in rosters that often include Sparkling Ice, Nesquik and Boylan's. Outlaw hopes greater infrastructure, more orchestrated marketing and broader packaging range will earn their focus in coming year.

On distribution side, co also is navigating transition in NJ, and gearing up with relatively new partners in New England (Polar) and Nevada (Nevada Beverage). Fla also remains a void, as realignment of Bud network there reduced options in state even as key MillerCoors houses remain unreceptive to NA brands. But brand has logged great progress in another difficult DSD area, Texas, expanding gradually into all branches of Bud house L&F. Meanwhile, among other headwinds, Calypso has sometimes had to weather assaults from rival Hubert's Lemonade now that it's owned by Coca-Cola following brand swap with Monster Beverage, which created brand. Still, for Calypso brand that will be entering its 18th year in 2016, Outlaw expects mainly blue skies ahead.  

Report last Wed on fast-growing KeVita noted that sales in 2015 were anticipated to come in about $31-32 mil range. This should have been specified as net sales; gross sales should hit $40 mil, co emphasizes. That represents near-doubling from $20 mil in gross sales last year (when net sales came in around $18 mil).  

Univ of Maryland has had interesting entrepreneurship experiment going past coupla years at its College Park campus: recruiting students for on-campus incubator that requires all program members to reside on first 2 floors of nearby apt building in hopes of generating creative sparks from their daily interactions. That effort now has yielded a bev brand called Javazen Superfood Blend that melds organic ground coffee, loose tea and ingredients like acai and goji berries. Consumers brew it like coffee but it offers additional lift under names Balance Original Blend, Boost and Relax, packed in 9-oz bags yielding around 15 servings and priced at $14.99-15.99. Balance Original Blend melds coffee, green tea and cacao. Boost is made from coffee, yerba mate and acai. Relax employs decaffeinated coffee, rooibos tea and goji berries. Entries are claimed to be non-GMO, gluten-free, vegan, USDA-certified organic and kosher. Recall that there have been other experiments with coffee/tea blends, including defunct canned entry called Bean & Body that Coca-Cola Consolidated invested in via its BYB incubation unit.

Javazen was created a year and a half ago by trio of Maryland students named Eric Golman, Aaron Wallach and Ryan Schueler, now between age 22 and 24. The way Eric described history, he started making blends for himself while sharing apt with Ryan, with whom he was working on glow-in-dark bicycle startup, when upstairs program member and superfood proselytizer Aaron got involved. So they've abandoned their other projects, at least for now, to make bet on Javazen, using university grants, personal savings and capital from friends & family to get off ground. Golman serves as ceo, Schueler handles sales and Wallach is brewmaster. They found copacker in Maryland, cracked key retailers like Moms Organic Market and exhibited at recent Natural Products Expo East show. They were to move into space in off-campus house owned by Univ of Md immediately after discussion with BBI a week and a half ago. By now they're in Vitamin Shoppe/Natural Grocers units in Colo and DC, Balducci's and a few indie retailers in NY and are undertaking a test in Austin and San Antonio, Tex, at HEB. They'll stick to those 4 regions for now, Eric said. Brand is also offered via online subscription program. Info at DrinkJavazen.com.  

On heels of recall by Nestle Waters North America of Sweet Leaf Tea bottles that may contain glass residue, Trader Joe's is suffering production issues too. Co is recalling its private-label Triple Ginger Brew, packed in stopper-topped 750-ml glass bottles, "due to reports of unopened bottles potentially bursting," per Trader Joe's statement posted on FDA Web site. Recall comprises all codes purchased from Nov 9 thru Dec 14, co said. It said no injuries or illnesses have been reported from issue so far.  

Essentia Water will make convenience channel a key target for 2016, even as its newly recruited marketing vp builds foundation for concerted consumer push in 2017.

That was gist of conversation with Essentia brass out by Loews Hotel pool in Santa Monica, where folks were gathered for BevNet Live conference. Recall this is brand that spent well over a decade building strong presence in natural channel before venturing out into conventional grocery, where it currently has about 35% ACV. Under founder Ken Uptain and strategy chief Neil Kimberley, staff has surged to 51 this month from 16 at beginning of year. Earlier this month co made key exec addition with recruitment of former Starbucks, T-Mobile and Microsoft exec Karyn Abrahamson as marketing vp (BBI, Dec 3). Also there for discussion were Doug Kistler, vp sales west, and cfo Greg Buscher.

Key target for 2016 will be convenience channel, where 60% of premium water is sold but where Essentia has almost no presence beyond Holiday chain in Midwest. (By contrast, c-stores are stronghold of alkaline rival Aquahydrate.) Effort should get a boost in Jan from 700-ml bottle with black closure that was unveiled at recent NACS c-store show in Las Vegas (BBI, Oct 22). All-black outer wrapper with white interior should also prove eye-catching presence in case displays under fluorescent lights, Essentia team figures.

On marketing front, for 2016 emphasis will remain on field marketing, absorbing half of budget, while Abrahmson preps marketing strategy for bigger 2017 push. Co plans to be involved in fewer events but have greater presence in the ones it does support, in realms like fitness and health & wellness. Idea is to "really engage the consumer, rather than just pass out bottles of water," Neil said.

Despite big push into conventional over past coupla years, co has been reassured to see its sales in natural channel remain robust, noted Kistler, with Sprouts chain in particular showing big gains now that it's gotten more fully behind brand. DSD distribution has continued to build thru 2015, with biggest remaining voids in South and Southeast. Also open is Mid-Atlantic region, where co is believed to be in discussions with Honickman Group tho it's not clear if deal will be reached. No comment on that from Essentia execs.  

Recent BevNet Live conference in Santa Monica, Calif, offered pair of clear-eyed and absorbing deep dives into intricacies of pursuing DSD strategy, one by High Brew Cold-Brew founder David Smith in open session, another by team of Aquahydrate execs in breakout. Together the accounts offer a primer on navigating dangerous DSD shoals. Highlights:

High Brew's Smith: Grab DSD Distribution Now, Not Later David Smith is Austin-based cofounder of Sweet Leaf Tea with Clayton Christopher, who famously employed grandmother's recipe, using pillowcases as teabags in early days of scaling up. Duo built brand that eventually sold to Nestle Waters in 2011. Smith stayed on for transition, and after exit became investor and advisor to range of food/bev startups while taking caffeine-fueled 8-month Caribbean cruise with family during which idea of launching cold-brew percolated. Back in Austin, he resurrected much of Sweet Leaf team to pitch canned High Brew line of shelf-stable cold-brews that's been aggressive in garnering national retail presence.

As David recounted to BevNet Live audience, he returned to active role in bevs to find great deal of consolidation of DSD network since his Sweet Leaf exit. At time he sold Sweet Leaf in 2011, co worked with 220 DSDs. Today, he argues, one can attain same coverage with about half that amount. Also changed: DSD houses today are seeking greater protection in form of invasion fees, termination fees and initial terms that can stretch from 3 years to 5 years or even to 10 years. That said, Smith harbors no reservations about need to go DSD: "If you're building a single-serve business, you need a lot of merchandising assistance to merchandise against the Cokes, Pepsi's and Dr Pepper Snapples of the world." The main alternative, going with broker, means "a lot of times you're going to be out of stock" and when running major promo "you're not going to drive the volume necessary."

That's particularly true for high-velocity channel like c-stores. "If the convenience store channel is a big objective, you're going to need DSD to do c-stores correctly, there's just no way around it," he urged. You will "give up a little bit of margin but more than make it up in volume."

Within 90 days of High Brew's launch, brand landed Kroger, Safeway and Target chains, 6K doors in all, nearly all of them serviced by DSD. True, DSD model is capital-intensive, putting premium on recruiting "large, experienced team that knows what we're doing" and can leverage relationships from past gigs. And product proposition needs to resonate with retailers, too: in High Brew's case, it's offering alternative to Starbucks behemoth in RTD coffee that's $2.4 bil in size and still growing double-digits. "We have so many points of difference that buyers were open arms," David reported.

Smith made no effort to disguise that it's "daunting task to build a national DSD network," and acknowledged DSD may not be right for brands that are working narrow niches, are undercapitalized or lack experienced team to execute. But he emphasized that it's even more challenging to launch without DSD, then pivot a few years later into embracing it. That was case with Sweet Leaf Tea, which began primarily by using natural-foods broadliners like UNFI and KeHe. "You quickly get to a point where you hit a ceiling and wonder how to get any more growth after next year," he recalled. "You realize how much iced tea is sold in c-stores." But approaching DSD wholesalers to offer only that channel for coverage "doesn't go over well." Eventually, you're left unwinding all the biz you built up via other routes to market "and it's pretty painful."

Another factor arguing for starting with DSD: pricing architecture. If you set pricing lower on assumption that you won't need to give away the larger slice of margin that DSD wholesalers require, it can be challenging to later change pricing, Smith warned. Sometimes retail buyers won't let you do it, particularly if they don't like the quality of distributors in the area.

Thus, if you think you're eventually going to need DSD, he advised entrepreneurs in audience, then go after it right away. "If it's good for brand in the long term, start doing it sooner rather than later." But start small. For High Brew, that meant shipping first cases to Whole Foods nationally last Apr to prove out concept. Once that seemed to work, co approached Tex grocer HEB - not all 300 stores but about 50 stores in Central Texas within coverage area of a single distributor. "A great way to test the waters - start small, start in your backyard," Smith urged.

High Brew founder offered some advice on getting contracts done with distributors, but emphasized that it's more important to build faith that brand will do well for them. High Brew offers a uniform contract but encounters distributors who're determined to use only their own contracts "and that's fine," he said. Typical challenges, as noted earlier, include the initial term, as well as exclusivity. Larger distributors in larger markets often are looking for equity in brand, as another means of protecting themselves should the brand sell out and flee to another system. "I have no problem taking equity from distributors" if they're going to help you grow the brand, was Smith's assessment.

As important as all these factors is simply to have a brand that performs well. "Volume cures all," he said. If brand moves briskly, then distributor will "start doing great things for you. The first year, it's really up to you and your team to drive the volume . . . You need to go in there and prove to him that your brand's worth it." Once that happens, "they can move mountains for you."

Question of slotting fees also came up. Sweet Leaf said no for years because it couldn't afford to pay, Smith recalled, and if given retailers "really want your brand, the slotting discussion doesn't come up as much." But the fees usually are one-time and "if it's a really good account, it's probably worth the spend." David added: "It doesn't come up as often as most people think."

Once early retail experience bears out volume potential of brand, you need to assemble fairly large team, Smith advised. At High Brew, teams are situated geographically by territory, with more channel-driven national account staffers. Asked offline what area is most challenging to find adequate DSD, David replied without hesitation: Florida.

Why Hensley Is Humming for Aquahydrate Water At BevNet breakout session, Aquahydrate's Joe Gleason, vp for western sales, and Andrew Heller, regional sales mgr for Ariz, discussed how they're managing hybrid distribution strategy in key market worked by major house, Hensley. (Hal Kravitz, ceo of LA-based brand, also was on hand.) We'll start with Andrew's take on Hensley, then follow with Joe's more general views on how brand employs DSD.

Hensley, of course, is diversified Bud house in heavily chain-driven area employing 880 staffers, 250 of them on street, and operates thru 5 divs focused on mom-and-pop accounts, grocery, c-stores, on-premise and specialty. Pair of subs handle about 3% of volume. Hensley took Aquahydrate brand at 36K cases and should finish year up a little over 100%, Heller reported. In reassuring sign, DSD partner grew not only distribution (+60-65%) but also velocity (+100% volume). Among major wins this year were Kroger's Fry's banner, now #4 account, and Circle K c-stores, now #1 by far, Heller noted.

Incentives generate lotsa incremental volume, with Hensley willing to partner 50-50 on SPIFs, 2 per year for indie channel and 2 per year for chains. On consumer-facing side, brand runs sampling programs at 5K runs, volleyball tournaments and AYSO youth soccer, handing out coupons driving consumers to retailers who agree to mount displays. Tie-in with Walgreens enjoyed 8-10% redemption rate, vs normal 3-5%, and brand has been undertaking promo with Circle K lately.

Hensley staffers are deep in relationships that matter, too. Take Walmart store in Glendale that mounted 500-case display this summer. It's brand's #1 store in Ariz, accounting for nearly 4% of total sales, thanks to close tie between store mgr and Hensley rep. Interestingly, tho Walmart has rep for killing brands' margins, Aquahydrate execs said in Ariz retailer is actually working on much shorter margins than other retailers in state. (Brand is in very few Walmarts outside Ariz.)

Crucially, wholesaler shares deep trove of data on 1,400 accounts in which it handles Aquahydrate, analyzed by route, mgr, etc. While Hensley provides profitability analyses, Aquahydrate is expected to massage data to offer monthly recaps that reveal opportunities to drive growth. Gleason was asked, why is that Aquahydrate's job? "It's more important to us," he responded. "If we went away, they would barely notice."

Speaking more generally about distribution approach, Gleason said having Mark Wahlberg, Diddy and Ron Burkle as collective majority owners did much to get wholesalers excited not just about carrying brand but about alkaline water category, with its claim to offer real benefit rather than just a story tied to origin, green credentials or price. Segment growth also catches their eye: +40% for alkaline, vs already-healthy +20% for premium water overall. "Start by selling the category, then the brand," was Joe's advice for wholesaler pitch.

Aquahydrate is employing hybrid distribution strategy, going direct to retailers like GNC, Rite Aid and Stater Bros and using specialty houses like Nature's Best and UNFI for other channels. That's generally OK with DSD distributors, Gleason contended, because they don't necessarily want to be working those accounts. That said, DSD house should get lion's share of biz -- 90% or more -- and always be regarded as preferred route to retail. Much of Aquahydrate's biz is in c-stores, beyond reach of broadliners. (And Stater is going back to DSD in any case, Joe noted.) If DSD house is signed after some channels already are being served via other modes, then paying distributor an invasion fee generally isn't required. In other cases those fees will enter mix, generally on quarterly payment schedule.

What does Aquahydrate look for in prospective house? Crucially, that they view themselves as bev distributors, not just beer distributors, from top of org down to bottom, Gleason exhorted. They should indicate they're willing to be partner in building brand no matter how small brand may be now. For its part, Aquahydrate makes clear it's willing to invest in good ideas - "I'll find the money to fund them," Joe assured.

Tho Aquahydrate execs urged entrepreneurs not to just grab whatever wholesalers will accept brand, one must start somewhere, and tinker with network as brand develops. Aquahydrate has upgraded distribution in 10 markets over past 12 months, execs reported. In LA, when past distributor, Statewide, proved unwilling to take next step, by Joe's account, brand switched to more established Haralambos Beverage. To make footprint align, that required terminating some Bud houses too. "Really good distributors," Gleason acknowledged, "but they didn't want to be Aquahydrate distributors," displaying no follow-thru on the 3 meetings held each year. "They basically serviced our brand - they were a great place to start," he said. Generally, brokers are not an adequate substitute for DSD. "When you use them too heavily, you almost never get distribution" at retail, was Gleason's verdict, tho brand has had success with broker in Pac NW that calls on distributors and wins it more facetime with crucial DSD partner there, Columbia.

Aquahydrate believes it can do 100K cases annually in LA, so starting in Jan it will subsidize pair of brand ambassadors stationed at Haralambos to work with DSD house's sales reps. Ambassadors will be on Haralambos voicemail system and otherwise integrated into house's operations, traveling in branded vehicle.

Color-coded map displayed during presentation showed Florida as in need of upgrade. Toughest market to find strong DSD, said ceo Kravitz, echoing view of High Brew's Smith. Overall, heartland markets with lower population density are problem, too, because they lack specialty houses and options are limited to Coke, Pepsi, Bud and MillerCoors. On map, NY also appeared as needing upgrade, but execs were quick to note that's outdated assessment and co is bullish on relationship with its distributor there, Drink King, which recently picked up scale with addition of Polar brand.

Some DSD houses have been accumulating multiple alkaline water brands including Aquahydrate rivals like Essentia and Eternal. Gleason professed to be OK with that. In crucial SoCal market, for example, both Haralambos in LA and Lenore in San Diego have depth in handling NAs and are capable of juggling 3-4 water brands, he said. They prefer to go into retailers with comprehensive portfolio. "Our opinion is, bring 'em," Joe asserted. He said unlike some rivals, Aquahydrate doesn't try to write DSD contracts to lock out rivals.  

Emeryville, Calif-based Ripple Foods, devising milk-like drink made from plants with higher protein content than almond- or rice-based milk, has picked up $13.6 mil in Series A funding, Wall St Jnl reported. Co was formed by Adam Lowry and Neil Renninger, and numbers Honest Tea cofounder Seth Goldman and Stonyfield Farm co founder Gary Hirshberg among investors. (Recall Hirshberg was investor/mentor to Goldman at Honest Tea.) First institutional round was led by Prelude Ventures with participation from Khosla Ventures, Blueberry Ventures and Eagle Cliff Partners. Cofounders hope to have product at retail in 2016 . . . With view to cutting costs and going direct to more retailers, KonaRed's new prexy/coo Kyle Redfield has brought in-house its sales/marketing activities. "Previously, the company had relied on third parties to oversee its distribution, and has now taken full control of all its channels to effectively increase sales and increase direct customer interaction through targeted marketing initiatives," statement read. That seems to mean move away not just from Splash Beverage Group, which came aboard as master distributor in Apr 2014, but possibly also from DSD shops Splash had recruited. "We are strengthening our customer relationships and seeking direct distribution across the US to get all of our products on the shelves of leading retailers," ex-POM Wonderful exec Redfield said, referring to RTD coffee fruit juices, dietary supplements and newly launching coffees . . . City of Davis, Calif, scrambling to raise revenue, is considering penny-per-ounce sugary-bev tax, Sacramento Bee reported. Staffers estimate it would bring in $800K in first year. If passed, it would be 2d in state after Berkeley enacted tax. SF voters rejected such a move after intense lobbying blitz by soda lobbyists.

Still more BevNet Live coverage on way in upcoming issues, BBI readers!  

PepsiCo is installing several thousand dual-temperature vending machines featuring healthier refrigerated and shelf-stable offerings under new Hello Goodness brand, Pepsi announced Mon. Machines will offer healthier items from co's bev and Frito-Lay divs, including Naked Juice, Pure Leaf tea, Lay's Oven Baked chips and Sabra hummus. It will be available in bev-only versions, too, PEP said. "This is the vending machine of the future," Kirk Tanner, coo of North American bevs, told Bloomberg. "There's an opportunity for us to be a leader in better-for-you vending, and we have a long-term commitment to making that happen." Machines will take credit cards and also use Apple Pay system. Its digital screen will offer nutritional info on items for sale. Vending machine sales slipped 1% last yr, per Euromonitor Int'l, taking particular hit in schools were they face tougher restrictions. Hello Goodness versions models will be located "in places like hospitals, universities, offices and transportation hubs," per report. "We see it as accretive, not as cannibalistic. We see it as a great way to grow our business - to reach consumers in places that we can't reach them in other vending," Kirk said.