BMI Archives Entry
Malk was launched by Houston entrepreneur August Vega, because she and 6-year-old son suffer from dairy allergy and were dissatisfied with milk alternatives in market. She feels she's disrupting market "by using no heat, fillers, binders, emulsifiers or gums of any kind," she told BevNet audience. It's an HPP line, using mostly organic ingredients, over a cup of nuts per bottle. So far it plays in almondmilk, cashewmilk and pecanmilk segments.
Funded by family and friends, co launched in Jan 2014 in mason jars sold in farmers markets but has done a number of quick pivots since then. By that Jun it was being packed in glass bottles and sold in coffeehouses in Houston and Austin. As possibilities expanded, it moved to HDPE bottles in Aug, winning access to first Whole Foods store and conventional grocers, then switched to custom-molded PETE bottle by Sep. Along way, use of HPP extended shelf life to 49 days unopened, opening door to national distribution by broadliners UNFI and KeHe. By now Vega says brand is sold in 4 states in both grocery chains and indie grocers.
Brand recipes employ no more than 5 ingredients ("less is more delicious" is August's version of Mies van der Rohe's famous architectural dictum), growing from initial 3 flavors to 7 currently, sold in 12-oz single-serve bottles at $3.49-4.49 and 28-oz multiserve packs at $6.49-6.99. Unsweetened Almond and Cashew items contain as few as 3 ingredients. Co claims to have been first to have launched pecanmilk bevs with Maple Pecan Milk, Chocolate Pecan Milk and another using cold-brewed coffee. Info at Malk Organics.
Three Trees Hits Bay Area's Leading-Edge Retailers, Finicky Blue Bottle As noted, Malk was one of pair of entrants who're attempting to challenge incumbent leaders in natural nut milk by lambasting their use of stabilizers and gums. Also an HPP brand, Three Trees True Almondmilk was launched in Bay Area by Jenny Eu, who similarly uses water and larger amount of nuts, in process attaining higher protein content - 5 grams, vs 1 g for typical entries. Like Malk, Three Trees touts short list of ingredients - as few as 2 in some items. It takes name from Chinese character for forest. Since launching a coupla years ago, it's penetrated leading-edge retailers like Bi Rite, Molly Stone's, Rainbow Grocery and Berkeley Bowl, as well as corporate campuses. Notoriously finicky Blue Bottle Coffee now uses Three Trees in all its Bay Area cafes, "real validation," Eu figures. It's available in mainly in slim 12-oz PET bottles but pair of unsweetened entries also are offered in liter bottles. Flavor range includes Vanilla, Cacao, Cold-Brew Coffee, Chai Spice and Matcha Green Tea. "Definitely tastes like almonds," said BevNet founder John Craven, on judging panel. Going organic would be nice, he suggested. Info at ThreeTrees.com.
Coca-Cola Expands Territories of 3 Bottlers in 5 States; Atlanta Metro Goes to Coke United
Tampa, Fla-based Coca-Cola Bev Fla adds territory in southeast Fla including Ft Lauderdale, Hollywood, Miami and West Palm Beach. Birmingham, Ala-based Coca-Cola Bottling Co United gets additional territories in north and central Georgia, incl KO's hometown metro Atlanta, along with Athens, Macon and Rome. St. Cloud, Minn-based Viking will expand into parts of northern Minn and Wis and "a portion" of Mich (which seems to signal adjustment to earlier announced deal ceding entire state to Reyes - BBI, Oct 21). Coca-Cola also said it's reached definitive agreements to sell production facilities with 3 National Product Supply System bottlers. Besides new territories, "United will acquire production facilities in College Park and Marietta, Ga, Montgomery, Ala and Cleveland, Tenn." Coca-Cola Bottling Co Consolidated will acquire facilities in Baltimore, Silver Springs, Md, and Sandston, Va. Swire Coca-Cola USA is taking over facilities in Phoenix and Denver. Recall this represents recent about-face by KO, which at one point was planning to retain as much production responsibility itself; now it's eager to spin off CCR production facilities to its new and expanding franchisees, figuring they're more efficient and getting big chunks of capital off its own books.
Energy Drink Trends on the Rise Energy drink volume increased 8.2% last 4 wks, up from 7.1% gain last 12 wks in all-outlet data. Avg prices were up 2.6% last 4 wks, generally in line with segment pricing for 12 wks. Red Bull and Monster each had stronger performance in latest month. Red Bull volume rose 6.1% (up from +5.6% for 12 wk) on solid 4.6% price increase last 4 wks. Monster Energy gained 5.2% (up from +3.3% for 12 wks) with avg price increase of 3.2%. Rockstar volume slowed a bit but still rockin' with 20.4% gain on 1% price increase last 4 wks. PepsiCo energy brands (Amp) surged to +14.8% gain as avg prices declined from +5% to 3.8% increase over last 4 wks. Private-label energy drink price slashing continued with avg prices fell 22.3%, contributing to 56% volume gain.
Gatorade Powers Sports Gains Sports drink volume trends improved to +8.5% (up from +7% for 12 wks) while avg prices increased slightly to +1.2% in all-outlet stores last 4 wks. PEP's Gatorade improved considerably to +8.5% (up from +5.9% for 12 wks) as avg prices were down a bit to +0.9% last 4 wks. Average prices on KO's Powerade improved from -2.8% for 12 wks to flat last 4 wks which dropped its volume gain to +7.1% in last month. That's down from 9.1% gain for 12 wks. An avg price drop of 4.1% lifted private-label volume to 16.4% gain last 4 wks.
Higher Prices Slow Water Flow Bottled water volume increased 8.4% last 4 wks in all-outlet data. That's down from 9.5% gain pace for 12 wks as avg prices improved from +0.3% last 12 wks to +1.5% avg in last month. Nestle waters were up 3% on avg 1.4% price gain last 4 wks. Coca-Cola and PepsiCo waters were up double-digits in latest period. KO water volume up 10.7% with modest 0.4% price increase while PEP water shot up 17.9% with help from avg 5.6% price drop. Private-label waters gained 14.1% with avg 2.5% price drop last 4 wks.
A bit of new from BevNet Live conference that kicked off this morning in Santa Monica, Calif: in response to lotsa consumer request for dairy-free cold-brew, Stumptown Coffee in Jan will launch gabletop entry that employs coconut base, ceo Joth Ricci said. Item will debut with recipe that includes no carrageenan or stabilizers, he promised. (More on Joth's presentation later this week.)
Schweppes Ginger Ale Taps Its Dark Side
Big jolt in coffee segment came early this morning with news that Keurig Green Mountain entered into definitive agreement with group of investors led by Germany-based JAB Holding Co. Familiar name? JAB, short for Joh A Benckiser, owns Peet's Coffee & Tea and Caribou and has been on recent acquisition spree with investments in Stumptown and Intelligentsia. Now it's paying huge premium to acquire K-cup and Keurig Kold maker Keurig Green Mountain and take co private at $92 per share, or $13.9 billion. That's 78% premium over co's share price at close on Fri. "The premium is the largest in beverage-industry history for any deal above $5 billion," per Bloomberg estimates. Coca-Cola Co, which was largest shareholder with over 17%, "is fully supportive of this transaction," said ceo Muhtar Kent. KO "will continue our collaboration with JAB in order to capitalize on the growth opportunities in the single-serve, pod-based segment of the cold beverage industry," he added. When GMCR is taken private, co "will continue to be operated independently by the company's management team and employees" and HQ will remain in Waterbury, Vt, noted JAB statement. JAB is doing deal with "minority partners" in its Jacobs Douwe Egberts (JDE) coffee biz, which includes Mondelez International. "Keurig Green Mountain is a strategic asset that provides immediate access to the US, largest coffee market in the world, and to on-demand, the fastest growing segment," said Mondelez chmn/ceo Irene Rosenfeld.
Good for KO; Too High a Price Given Challenge? All-cash deal, expected to close by end of Q1 2016, is "positive for KO," given that it will "essentially break even on its investment" of around $2.4 bil following "recent weakness" in GMCR's stock, said Bonnie Herzog of Wells Fargo Securities. JAB "must know what they are doing" at that price, which may be "to be the BUD of coffee in the world," said Pablo Zuanic of SIG Susquehanna Financial Group. The price "may seem 'cheap' in 'normal'" world of M&A deals, "but given the potential loss of contracts at GMCR (60% of volumes come from copacking deals) and ongoing margin erosion (mix shift to copack, reduced bargaining power,) the premium paid looks high," noted Pablo. "But this probably fits into a grander strategy," he added. Also likely: "at some point" JAB would put its global JDE biz together with GMCR.

