Tho not yet 4 years old, count probiotic player KeVita among ranks of refrigerated brands that are betting they can quickly democratize organics. Oxnard, Calif, co just greatly expanded its footprint within Walmart and Target stores, on way to anticipated $30 mil in sales this year, supported by massive increment in production capacity that just came online in Jul: $4 mil, 60-head Krones filler housed in 57K-square-foot plant that pumps out 350 bottles per minute. It was part of production upgrade that came to $6 mil all told. Here's update on aggressive player with ambitions to match those of cold-pressed juice marketer Suja and other newcomers to refrigerated bev scene.

KeVita, recall, was formulated in 2011 by Ojai, Calif, vintner Bill Moses and local nutritional consultant Chakra Earthsong as organic KeVita Sparkling Probiotic Drink, containing 4 bil cultures. Working with Robert Adams, bev vet who was 3d to join co, Moses has since buttressed core probiotic drink with organic KeVita Master Brew Kombucha and restorative Sparkling Probiotic Tonic with base of apple cider vinegar. Co lately has rebranded items, moving from supplement-y look to one that's bolder, more unified (via hexagon figure on front label) and gender-neutral. Brand also has been moving thru Pepsi refrigerated distribution system, leveraging partnership that's widely believed to include significant minority investment by Pepsi, tho neither side will discuss matter. (KeVita execs acknowledge investment from unidentified "strategic.") Along way, feisty, intense Moses has carved out rep as outspoken critic of kombucha segment's ability so far to police itself on adhering to alc limits.

BBI recently paid visit to KeVita's Oxnard hq in Oxnard, Calif, about an hour up coast from LA, then swung by new plant a mile east (across street, Moses gleefully noted, from big Monsanto plant, putting non-GMO upstart cheek by jowl with GMO kingpin). Plant became operational in Jul, a mere 9 months after co started bandying around idea the prior Oct. Update was offered by cofounders Moses and Adams, along with cfo Jim Linesch, svp sales Bob Nakasone and David Vartanian, dir of sales strategy & planning. Co's youthful coo, Nate Patena, later offered BBI a plant tour. Discussion focused on core biz and production upgrade, not kombucha kontroversy. Highlights:

Mainstream Retailers Coming Aboard as Co Motors Toward $30 Mil in Sales This Year KeVita execs say they're operating at run rate of $50 mil currently and anticipate ending year in $31-32 mil sales range. As co has brought on new plant, its gross margins have widened to 58%, in segment where sourcing and production challenges offer lotsa chances to squander margin. With 15-oz entries often going out at $3, there's no need to engage in deep discounts to stimulate trial and volume, KeVita execs maintain. "No need to do that - that's one of the reasons we're financially viable," said Adams. Added Nakasone: "No one blinks at $3 any more."

After climbing to 98% ACV in natural channel, KeVita has been focusing on conventional channel, where penetration has about doubled to 46% over last 12 months, Nakasone said. It's now in 2,200 Walmart stores, vs fewer than 300 a month back, following entry into Target chain in Oct to tune of about 500 stores, mainly in Southeast, Mid-Atlantic and West. It's testing drug channel via CVS (800 stores). What was to be 4- to 6-week experiment at Costco now has extended beyond 16 weeks. "Not yet scratched the surface" in c-stores, Nakasone said. Meanwhile, Pepsi foodservice operation is pushing brand into college and corporate campuses (tho it's believed kombucha line is excluded because of Pepsi's Unilever tie on tea - no comment from KeVita execs on that). And Core-Mark's recently launched Fresh Food Fast program has placed KeVita in 5K coolers by now. Co has been riding expansion of Amazon Fresh program, most recently into Boston. And by developing rep for maintaining compliance with alc limits, KeVita has been able to get its kombucha and probiotic lines into military's DECCA system.

Clean Room, Low Labor Characterize New Production Setup Discussion of "maybe we'll build a line" had begun last Oct, said coo Patena, after visits to 40 copackers over 4-month period found little carbonated glass capacity available at affordable rate, as copackers rode craft beer boom. "I can't outbid a craft beer," Nate said. Things moved quickly from there, with buildout beginning in May and plant fully operational by Jul. Asked whether overall price wasn't quite reasonable given magnitude of installation, Patena replied that KeVita likely benefited from suppliers' wish to diversify from reliance on Calif craft brewers like Stone and Lagunitas over past decade.

In massive departure from what was essentially hand-crafted approach, KeVita opted for turnkey solution from Krones, using soda model where bev base is batched at KeVita's hq bldg, so-called west campus, and filled via line located in east campus. (As product line has broadened, co has brought on pair of full-time microbiologists to get control of drift issue that inevitably came of employing 3 different mothers in confined area at west campus.) Borrowing technology from other projects, Krones was able to configure solution that minimizes labor and supports sterile product containing live probiotics with clean-room filling line that Patena described as just a step below electronic chip mfg specs. The 60-head filler, capable of running 350 bottles per minute (and surging to 450), is housed in clean room with positive laminar air flow; line pulls vacuum within each bottle during filling, yielding product that remains safe for 6-7 months, well beyond 120-day shelf life actually declared by co. Line can be operated remotely from employees' homes via iPads so they can start automated cleaning processes before arriving at plant. System incorporates 109 nozzles throughout, all automatically cleaned at push of single button, meaning human workers almost never have to enter clean room. (On rare occasion that glass bottle may break, it's automatically ejected, entire batch is rejected and line goes thru 3 water cycles to ferret out any glass shards.) Plant has been given flexibility beyond brand's current needs (say, to do 6-packs or Alumi-Tek bottles). It contains only modest refrigeration area, since most inventory goes out to 3d-party storage.

On labor front, production line requires as few as 2 workers, tho it's generally staffed with 4. Even at brand's brisk growth rate, single shift can produce 80% of needed product. (To fill some East Coast needs, KeVita uses Castle Co-Packing near Pittsburgh, on production line installed by KeVita.) In hiring, Patena noted, KeVita benefited from nearby presence of wineries like Herzog, so that new hires often arrive with some experience relevant to bevs despite Oxnard's out-of-way location.  

As longtime Portland, Ore, resident, Stumptown Coffee Roasters ceo Joth Ricci has gotten rained upon a lot, but apparently never by precipitation that speaks. BBI account of BevNet Live presentation last week picked up intro that cited his past tenure at Talking Rain, Jones Soda and Columbia Distributing, but Joth notes he never worked at Preston, Wash, bottled-water co, tho that's been reported elsewhere in past too. "Not sure how that ever got out there," Joth noted.  

After fair amount of innovation outside core sparkling line, Celsius Holdings is augmenting that platform with pair of new flavors it hopes will offer broad appeal: Sparkling Grape Rush, formulated to taste like old soda staples Grape Crush and Nehi Grape, and Sparkling Watermelon, riding hot flavor across multiple categories of bevs. CELH ceo Gerry David noted that some retailers had been getting specific requests for watermelon flavor. Both new entries will be available in singles and 4-packs starting in Feb.  

Immersed in BevNet Live proceedings last week when news broke of JAB Holding Co's acquisition of Keurig Green Mountain, we weren't able to tease out many implications of surprise deal. But one of subcurrents that's emerged on investor chat sites and bev grapevine is that Keurig Kold cold-bev system - already described as co's #3 priority by ceo Brian Kelley on last earnings call a few weeks ago - may find itself orphaned, without any strong constituency pushing for continued investments required to make it more compelling offer to consumers who so far seem unimpressed with clunky countertop footprint and high price. Already delayed a year from anticipated fall 2014 debut, launch is being undertaken now in stages, at time GMCR has been distracted dealing with challenges both on core hot-bev systems and pod biz, both higher priorities, as Kelley assured investors on recent call (BBI, Nov 19).

As noted, surprise deal a week ago called for acquisition of GMCR by JAB-led investor group for price of $92 per share, or $13.9 bil, 78% premium over closing price the night before (BBI, Dec 7). The acquiring team includes pair of investors in JAB's Jacobs Douwe Egberts unit, the Kraft spinoff Mondelez Int'l (which noted it has no plans to commit incremental capital to Keurig) and Chicago-based BDT Capital Partners. While some marveled at premium, others have noted it was precisely $1 more than # needed to allow Coca-Cola a graceful exit from minority investment that was under water at time. Announcement of deal said KO will continue to partner with Keurig on Kold system, but didn't specify for how long.

Deal announcement from JAB cited it as "major step forward in the creation of our global coffee platform," recently enhanced with acquisition by JAB's Peet's unit of third-wave roasters Stumptown and majority of Intelligentsia. While announcement included quote from KO ceo Muhtar Kent emphasizing soda maker's continued collaboration on cold-bev system, that was only reference to Keurig Kold in announcement, which otherwise focused on coffee synergies. JAB, via its Douwe Egberts and Peet's units, and Mondelez both are major global coffee players.

Some voluble commenters have taken skeptical view of GMCR, and its Kold project, all along, arguing that "Keurig had been telling stories about Keurig Kold that were more about boosting its stock than delivering a product consumers could use," and predicting that, "in the end, Coca-Cola will breathe a sigh of relief and distance itself from both Keurig and JAB." Those are words of frequent SeekingAlpha poster Seth Golden (who acknowledges having shorted GMCR shares at one point, tho not currently, and who seems to play at margins of space via co called CooLinX Integrated Technologies that develops technologies for bev biz). In view of Golden and other commenters, cold system always was troubled project, GMCR's $290 mil purchase of Bevyz cold platform last year was desperate but unsuccessful attempt to plug fast-cooling technology gap blocking path to viability, and resulting system is doomed to flounder at retail. "Based on the first 5 weeks' sales data of the Keurig Kold black and white machine units, I would seriously not expect Coca-Cola or Keurig to continue with the Kold platform in the future," Golden predicts. "Keurig had sold less than 100 units in this time frame. It's one of the reasons Keurig lowered its sales forecast for the Kold from 'hundreds of thousands of units' to just 60,000-100,000 units."

Golden's conclusion: "Coca-Cola and Keurig Green Mountain are both now able to breathe a sigh of relief. Coca-Cola because it won't see a massive impairment charge related to its investment in GMCR, and Keurig Green Mountain because it won't have to publicly share anything with investors in 2016 and beyond." His latest analysis, from yesterday, can be viewed here.

Note that several law firms contemplating class-action suits and some major shareholders have had opposite criticism of deal: that GMCR sold out at too low a price, given leadership position it holds in hot-bev platform that should enable it to weather current storms and eventually get back on growth curve.  

Speaking at Future Smarts conference in NY today, Dr Pepper Snapple Group ceo Larry Young made case for his co's attractiveness as partner to emerging brands while expressing skepticism about rival soft drink makers' efforts to re-engineer some of their key trademarks. In summary of remarks published by RBC Capital's Nik Modi, Larry told audience at conference sponsored by Beverage Digest that so-called "allied brand" strategy will constitute largest source of new product flow for co, enhanced by DPS' position as preferred choice for entrepreneurs who're wary of getting lost in red and blue systems. (Among allied brands moving thru DPS are Fiji Water, Vita Coco coconut water, Bai antioxidant drinks, Body Armor sports drinks, Neuro functional bevs and Hydrive energy drinks. DPS recently broke long period of refusing to invest in outside brands with stakes taken in Bai and Body Armor.)

On soft drink front, Young seems to prefer to stand pat with traditional recipes, citing research that suggests consumers don't want cos "messing with current/existing formulations," per Nik's summary, maintaining stance that's seen DPS downplaying need to experiment with natural sweeteners like stevia. (Its only significant concession to calorie concerns of soda drinkers has been its mid-calorie Ten platform, generally viewed as modest performer.) On key strategic issue, Young avowed that DPS is very happy with current bottler/ distribution structure and doesn't plan to buy any of its bottlers, per Modi's conference feed. (BBI isn't allowed media credentials for Bev Digest events, possibly because of BBI editor's well-known propensity to consume disproportionate amount of danishes that are key feature of conference.)  

Tho more than one-third of new products have bit the dust over past 3 years, Suja Juice innovation engine continues to hum - with line of probiotically enhanced waters next up - even as co begins to enjoy first fruits of its relationship with new investor Coca-Cola in form of enhanced distribution.

Those were among news nuggets offered by Suja cofounder/ceo Jeff Church at BevNet Live conference in Santa Monica, Calif, last week, as part of presentation that ranged from innovation strategy to positioning. Debuting in Feb at Target stores, the low-calorie Suja Pressed Probiotic Waters are made entirely from organic fruits and vegetables augmented by 2 bil colony-forming units (CFUs) of vegan probiotics. Line is packed in 14.5-oz PET bottles priced at $2.99 and comes in at just 5-10 calories, in initial flavor range of Raspberry, Ginger Lime, Pineapple Lemon Cayenne and Orange Ginger Pineapple. It flowed out of production issue co was confronting on its core lines, finding itself left with dried, caky pumice that it initially paid to have carted away, then later found use for in organic farming. But quest for better outcome resulted in line that essentially rehydrates that pumice to yield lightly flavored water to which the probiotics are added.

At BevNet Live, Jeff ran thru familiar evolution of brand that aims to "democratize" HPP juice. Initial entry, dubbed Classic, was recognized as not viable for masses at $8.99 price, so it's been buttressed with pair of sublines dubbed Elements (Whole Foods exclusive at $4.99) and Essentials ($3.99). The bet with Essentials was that consumers would be willing to trade up from pasteurized juices like Odwalla and Naked at $2.99 "and that's been the case," Jeff said. First full year that Essentials was available, 2013, Suja's biz was 90% Classic; Classic has continued to grow, but by now its share of total mix has declined to just 30%, vs 60% for Essentials and 10% for Elements. In other words, nearly half of co's volume now is comprised of more-affordable entries than pricy Classic line.

San Diego-based co focuses heavily on innovation, "one of the beauties of the beverage space, like nothing I've ever experienced," Church noted. It's OK to experiment broadly as long as you have guardrails in place, he argues. In Suja's case that means organic, non-GMO, never heated and transparent in labeling and how biz operates. Still, bias toward innovation means lotsa failures will be in store. Of 80 different products launched over past 3 years, about 30 have been discontinued, meaning co "probably went overboard," Jeff allowed. But it's important at times to get new ideas "out there and see what happens," then follow iterative process to refine them. That was case with first Costco launch, initially burdened with illegible packaging and crushed boxes, that evolved to successful Organic Mighty Greens product. So bevcos shouldn't let "great get in the way of good: sometimes just get the product out there and refine it," Church urged.

It's also important to move beyond being just a product story - issue Jeff feels may be at play in recent struggles of Chobani as new competition has flooded into yogurt sector. His lesson from that: make Suja about a lifestyle, not just a juice. So co releases educational and aspirational messages every week, with minimal branding, to establish Suja as "place to come to for knowledge and trust." Co focuses heavily on building relationships with trade, bringing customers into plant or out to fields where its produce is grown, with view that "engagement gets you beyond the buyer/seller relationship." One particularly productive relationship has been Made to Matter program at Target over past 2 years.

As brand has grown, co has worked with recruiter BevForce to build team of experienced food/bev vets from brands like Snapple, Coke, Hint, Vitaminwater, Bolthouse Farms, Vita Coco, Pepsi, Kind Bar, Popchips and Kashi, many of whom would have benefited from training programs at those prior employers. That experience will insure that, when opportunities emerge, Suja is able to jump on them. "I think a lot of business is luck and timing," Church noted, "and when you get that luck and that break, you've got to be prepared and have the team ready to do it." He pointed to his own failure 7 years ago with bottled water called Nika, which proved to be a blessing because it brought him experience he needed to run with Suja opportunity. "You have to get lucky, but be prepared when you get lucky," he said.

Tho it's early days, Church said alliance with Coca-Cola is off to solid start. "I have to say I was happy with the investment at the time, and I've been even happier with the partnership since," he pronounced. Co has enjoyed expected benefits in realm of cash infusion and cost reductions in purchased items like bottles and caps, but another key benefit has been Suja brand's ability to leverage Odwalla's DSD network. Co already has ridden that network into opportunities at colleges and other foodservice accounts, key retailers where Odwalla is "super-strong," and building up-and-down-street presence on West Coast. "Added a couple of thousand doors in a short period of time," Church reported. Later last week, brand was to launch in Boston via Odwalla's DSD operations, with NY area to follow in Jan, augmented by Suja's own field marketing efforts. Jeff cited "hard-working, down-to-earth culture" he's encountered so far at KO, saying "it's been a really great relationship so far."

Coke capital infusion put an end to Church's need to be constantly on hustings looking for growth funding - "exhausting" bout of 6 capital rounds in 3 years, "50% of my time, thought maybe I'd do 1, maybe 2 fundraising rounds." Still, timing was good, with just 3 cold-pressed juice cos in market back when he started, vs 50 today. "We raised a lot of money and a lot of money fast," he said. "It's tough if you're the 51st (entrant) coming into the mix." Jeff's advice to entrepreneurs: stick with common stock "as long as you can" to avoid the hooks inevitably attached to preferred shares. Tho not an issue if entire co is sold, in smaller deals, as with Coke investment, preferred holders are first to get money out, "kind of frustrating" outcome. Church said he did what he could to keep common shareholders in control. As co brought in successive rounds, it always invited earlier investors to participate, tho as valuations move upward "they tend to not want to do that."  

Work-rating site Glassdoor named just one bevco to its annual list of 50 best places to work: Red Bull North America. Ranked #46, with 3.9 stars on scale of 5, RBNA was cited by anonymous posters for "great culture," "free shows" and good work/life balance. "Awesome place to work with lots of cool perks like free shows, open schedule, and great pay. Fun atmosphere very engaging," wrote 5-year vet. "Flexible hours never a dull work day room to be yourself and learn to be the best version of yourself," wrote 3-year vet. Part-time college ambassadors were bullish on gig, too. Negatives included rigid hierarchical structure. In so-called Employees Choice Awards, Airbnb was top-ranked; 3 retailers made the cut too: HEB (#17), Wegmans (#29), Costco (#40). By contrast, PepsiCo gets 3.4 stars on Glassdoor and Coca-Cola 3.3. Monster bests Red Bull on rating, 4.2, but with much smaller # of reviews.  

Nestle Waters North America may have fumbled innovation and marketing side of Sweet Leaf Tea brand that it acquired back in 2011, but more surprising for co with rep as execution ace is that it's now undertaking recall of estimated 1.5 mil bottles after a few were found to contain glass fragments. Only 4 incidents have been reported and nobody's been injured so far, NWNA said. Affected are Original entry and 5 flavor extensions, from production runs that went out to distribution over course of most of year, from Feb 27 to Dec 6. Majority of product, which is packed in PET bottles, is unaffected.  

In food/bev hotbed Austin, new concepts often come in 3's. Now add a fourth cold-brewed coffee play from capital city that's heading well beyond Texas borders, with launch of nitro-infused canned Cuvee Black & Blue brand in NY. Cuvee is heading into city's Rainforest Distributing, as is Austin-based Chameleon, pivoting from another local house, Dora's Naturals, both of them entering Rainforest portfolio that already includes local player Grady's, a concentrate cold-brew from Brooklyn. That would seem to make for broad portfolio of discretely positioned cold-brews at natural food distributor, which didn't comment. Meanwhile, Dora's has filled void of departing Chameleon with cold-brew offering from Long Island's Red Thread, which has committed to feet on street in city. That's quite a bit of activity for still-nascent segment with no dominant player, with Stumptown and High Brew among others aggressively building presence in city. Chameleon, High Brew, Kohana and Cuvee all are RTD cold-brews from Austin cos.

Profile: With Oskar Blues Beer as Inspiration, Cuvee Coffee Goes Wide with Nitro-Infused Canned Cold-Brew Count Cuvee Coffee as an original in segment. Its flamboyant murals backing its Black & Blue beans are local landmarks (see http://preacher.co/work/cuvee), and 17-year-old roaster recently made waves with Sep video that repurposed footage from Steve Martin's The Jerk to ridicule Texas Alcohol Beverage Commission, which had seized Cuvee's canning equipment as part of ongoing feud (BBI, Oct 5). Video employs movie footage in which officer with crudely superimposed TABC badge yells "Die, gas-pumper!" as he fires at dim-witted gas-station attendant played by Martin, who presumes oil cans exploding around him must reflect shooter's antipathy toward package format. "He hates these cans!" Martin exclaims. In video, cans are rebranded as Cuvee Beer crowlers. That was cheeky rejoinder by founder Mike McKim to powerful regulator that roaster soon will be facing in court.

Now Cuvee's ready to make bigger statement with expansion of recently launched nitro-infused cold-brew. Tho Stumptown has raised visibility of nitro-infused cold-brew, that's been Cuvee's forte for years, with McKim working from beginning to get nitro beyond kegs into packaged format. Breakthrough came after he heard that Oskar Blues was moving to offer nitro version of its Old Chub craft beer in cans: he spent 2 days visiting "super-gracious" brewers at Colo brewery, then made swing to nearby can supplier, Ball, McKim recalled during encounter at BevNet in Santa Monica this week. Remember, Oskar Blues was pioneer in using cans for craft beer, and more recently launched whole-bean coffee brand called Hotbox that's packed in same sealable "crowler" cans Oskar uses for some of its beer. (Oskar also uses Hotbox coffee in Coffee IPA and coffee-infused version of Old Chub.) So a year ago Cuvee began having cans airfreighted from UK to Austin, offering unbranded cold-brew in cans to local bars and fast-casual eateries. They sold briskly in single cans, prompting McKim to conduct experiment at Cuvee's own shop on Austin's East Side, where he offered singles at $3.99 on one side of cooler, 4-packs at $14 on other side. Velocity jumped and he decided to go for broader launch.

Canned line is going out in 4-packs with new, blue-and-white visual identity via agency Preacher that's intended to offset some of elitism of Cuvee word while retaining distinctiveness on-shelf among sea of earth-toned rivals. (It was Preacher that did murals, too.) NY launch via Rainforest will get canned nitro into 33 Whole Foods stores in tri-state metro area, among other retail accounts. Meanwhile, Cuvee has filed plans to expand its roastery on west side of Austin, in Spicewood. And it's prepping for that court date with TABC, which took issue with Cuvee's use of its canning gear to pack not just cold-brew but also beer.  

It plays in whole beans, coffee shops, kegged cold-brew, even nitro-infused coffee in cans. How do all the parts fit together? Stumptown Coffee Roasters ceo Joth Ricci put his spin on it at BevNet Live conference in Santa Monica, Calif, earlier this week. Joth, recall, is longtime beer and NA vet, having held prominent roles at beer giant Columbia Distributing, Jones Soda, Talking Rain and private-equity shop First Beverage Group.

Joth started with thumbnail history of third-wave roaster. After starting with coffee carts in Seattle, founder Duane Sorenson launched Stumptown in 1999, opening first location in burned-down hair salon at 45th and Division in Portland - hence name of top product, Hair Bender. (That location is still going strong.) By now co operates roasteries in Portland, Seattle, Brooklyn and LA, following hub-and-spoke model to supply its own stores, outside coffee shops and grocers. It aims to have newly roasted coffee consumed in 14 days or less, tho it's good up to 30 days. It's operating 10 cafes and opens another in Mar at New Orleans branch of Ace Hotel chain, with whom Stumptown has partnered in other cities. Payroll totals 300. Tho Joth didn't touch directly on that history, recall that investment by private-equity shop TSG in 2011 was greeted as act of betrayal by locals, tho furor died down once it became clear Sorenson was maintaining core principles. Still, as Ricci noted in q&a, recent acquisition by Peet's Coffee & Tea puts co back into a "coffee family." Tho Chicago's Intelligentsia also is now in Peet's fold, co has been explicit that the 3 businesses will remain separate. (Joth reiterated to BBI that that means no sharing of roasting facilities, even at cost of potential logistical convenience. Also note that, while Sorenson has cashed out by now, he's still running the roasting operations at Stumptown.)

One key focus of Ricci since coming aboard has been whole bean biz, which starts at $14 per 12-oz bag, with labels color-coded for source: brown for blended, blue for Latin America, red for Africa, green for Indonesia, orange for decaf called Trapper Creek. As Starbucks has expanded grocery biz and headed down in price, third-wave roasters spotted opportunity from resulting price compression, just as happened on craft beer side, Joth said. So co hasn't hesitated to offer rarities at elevated prices.

Another priority has been cold-brew, as outlined earlier this year in BBI deep dive (BBI, Jan 29). Co entered segment via stubby brown bottle, then added pair of milk-based items in short gabletop cartons and most recently a nitro can that "pours like a Guinness." Seasonal Winter Cheer, with mulling spices as an eggnog cue, aims to keep cold-brew sales from dying off as cold weather hits. Up next in Jan, as reported on Mon: cold brew employing coconut base, without carrageenan or other stabilizers, to suit requests for dairy-free cold-brew.

Lately draft version of cold-brew has been coming on strong, accounting for 30% of volume, as Stumptown installs draft lines all over US, particularly in Sun Belt. "Great trial opportunity and will halo into off-premise as we grow," figures Ricci. He acknowledged being surprised at uptake, pointing to Stumptown cold-brew presence at 30-station growler bars in Northwest and multitap cold-brew systems in markets like Austin. "It's a very efficient way to sell a lot of product in the summer," he said.

At high end, co recently launched Honduran Grand Cru Gesha (coveted Arabica varietal) at $75 per bag online, and sold out pre-orders within a week. Cold-brew version in elegantly labeled 750-ml swingtop bottle that was available only in Stumptown's cafes sold out at $28 per bottle. So dynamics are "similar to the wine business," operating at multiple price points, Joth noted. Asked whether cold-brew is viewed as Starbucks Frappuccino killer, Ricci didn't take bait, drawing on beer background to suggest parallel to craft vs domestic premium: "great opportunity to improve people's perception of quality, to bring unique positioning to what people traditionally know as iced coffee, to bring unique flavors to the category." But in what could be seen as flick at rivals going out in shelf-stable versions, he urged focus on quality. "The closer you get to an iced coffee profile, the more you start to lose the premium aspect," he warned. Speaking like a craft brewer, Ricci also insisted that he welcomes new entrants: "The more the better." Local innovation, different styles and approaches are "really important to building the category."

Overarching view is to keep items simple, not overthink them. Plus, they have to be great - "best thing you've ever had in that category" or Stumptown won't put it on shelf, Ricci vowed.

The Stumptown stores are viewed mainly as brand-building vehicles to support the wholesale biz. Co "will curate those in the right neighborhoods," Joth said. Also key to marketing mix is social media, with Instagram surging from 15K followers 3 years ago to 147K followers now via dedicated effort, Ricci said. After unprompted Jimmy Fallon posted pic, Stumptown traffic went up 4-fold same day, he noted.) Events are also important - not thru title sponsorships but more immersive experiences that put coffee in people's hands. At Coachella, for instance, Stumptown set up shop in campground, serving coffee to 30K people who'd made that their weeklong base for music fest.

One opportunity with lotta upside: office coffee. "Great adoption at places like Nike, Intel, Google," Ricci reported. He related comment he'd gotten from HR exec about lift a coffee upgrade provided to morale: After initiating employee programs for 15 years, "if I knew all I needed to do was change the coffee . . ."  

CORRECTION (printed in v12 #126, 12/14/15) 

As longtime Portland, Ore, resident, Stumptown Coffee Roasters ceo Joth Ricci has gotten rained upon a lot, but apparently never by precipitation that speaks. BBI account of BevNet Live presentation last week picked up intro that cited his past tenure at Talking Rain, Jones Soda and Columbia Distributing, but Joth notes he never worked at Preston, Wash, bottled-water co, tho that's been reported elsewhere in past too. "Not sure how that ever got out there," Joth noted.