BMI Archives Entry

BMI Archives Entry

Visit brand's Facebook page, and it sports a list of impressive array of awards Ojo Fortified Eye Care Nectar has won over the years, for doc-devised formula and distinctive eye-chart graphic motif that screams "eye care." But bevs have proved a slog for brand created by opthalmologist Jodi Luchs, so his Merrick, NY-based Insightful Solutions has moved in new direction: going with powder sticks instead. For now at least, the distinctive 8-oz bottles seem to be going into mothballs, as the sticks meet with solid initial reception.

In essence, problem proved to be that retailers' eyecare sets in vitamin aisle are uncommonly productive - which made it difficult for new brand, no matter how convenient and efficacious, to break in. Other likely store location, adult nutrition, contained welter of different functions that made it hard for brand to stand out. Ojo is positioned as offering full suite of so-called AREDS-2 nutrients like lutein and zeaxanthin to prevent macular degeneration and other ills, in far more convenient format than cumbersome "horse pills," which also bring unpleasant side effects to some consumers. Its 8-oz bottles have been sold in 4-packs in Mango Blackcurrant, Orange Cranberry and Peach Blueberry flavors. Given retail challenges, co now has segued to powder sticks that can be blended into water, bevs or yogurt, in Citrus Lutein Burst and Berry Lutein Blast (at 25 calories apiece via sugar/stevia sweetener blend) and Skinny Citrus Lutein Burst (5 calories via sucralose), which have edged into nutrition channel in recent weeks and is also entering Giant Eagle grocery chain, said Bob Sipper, principal at Cascadia Managing Partners, which has helped Ojo navigate change. On co's Web site, the sticks are priced at $39.95 per 30-pack. Products retain eye-catching eye-chart motif. Info at OjoNectar.com.  

KonaRed is adding industrial part to its biz by signing 5-year deal with VDF FutureCeuticals to serve as exclusive provider of US-grown Kona coffee fruit. "This partnership provides us the horsepower to capitalize on a huge market segment that we couldn't reach before and opens up an entirely new avenue of revenue for KonaRed to exploit and to drive growth," said prexy/coo Kyle Redfield, who'd played similar role building POM's pomegranate extract biz before joining KonaRed a few months ago . . . Mix1 Life confirmed it's acquired No Fear Energy Drink from Shadow Beverages & Snacks, and said PepsiCo North America Beverages will continue to distribute product in its Pac NW footprint. (Recall Pepsi system has been underserved in energy segment in NW because that's territory where distribution ally Rockstar has retained indie beer houses.) BBI had reported last spring that Mix1 had acquired No Fear for $12 mil (BBI, Mar 2).  

 Cheerwine, regional soda with national aspirations, is stepping up its association with another NC org to become "Official Soft Drink" of National Barbecue Association. NBBQA and Cheerwine will team up on promo and awareness campaigns, both online and off, including locator app that directs users to nearby Cheerwine and BBQ . . . Big Red, San Antonio-born brand that's still huge in south Texas, is launching commemorative 2-liter to celebrate Matt Bonner's 10-year career with Spurs basketball team as reliable role player and 3-point specialist. Starting in next coupla weeks, bottle featuring NH native dubbed Red Mamba will be available in San Antonio, Austin (where Big Red is currently based), Corpus Christi, Brownsville, Harlingen and McAllen. "To celebrate his 10-year anniversary, we thought it only made sense to put the NBA's only redhead on San Antonio's #1 red soda, Big Red," reasons svp marketing Thomas Oh . . . Over years, Monster Energy has shown deft touch in picking altsports athletes to align with. But new affiliation with UFC icon Ronda Rousey got off to shocking start when sport's top draw (male or female) was knocked out in 2d round by Holly Holm in bout on Sun in Melbourne, Australia. Rousey had gone into fight as 10-1 fave or better. Commentators expect a rematch.  

 Recall the dissolvable energy patches launched under the name Sheets by NBA star Lebron James? At its debut in 2011, with $13 mil marketing splash that included billboards in Times Square featuring then-Knicks star Amare Stoudemire, brand got into thousands of retail doors and was viewed as potential threat to energy drinks. It ended up not getting very far. Now co called NexGen Brands is trying again with the bev-alternative format, this time under brand name EliteOps Energy Strips.

At the heart of effort are coo Ray Welch, who spent 15 years at Slim Fast, eventually sold to Unilever for $2.3 bil, and Joe Librizzi, an elite ops and finance vet from cos like Slim Fast and Bravo Brands who was part of Pure Brand team that launched Sheets. NexGen actually is decade-old biz that's marketed 35-year-old Thirs-Tea concentrated tea, but EliteOps takes place as independently operating sister co, both headed by Welch. Librizzi has also been helping Welch with Thirs-Tea.

EliteOps is sold in individually wrapped packets with 2-year shelf life, packed 8 to a box at $5.99, or 75 cents per dose. Labeled as supplement, each contains 100 mg of caffeine as well as vitamins B and E. It's out in Mint flavor, with Cinnamon due in coming months and likely berry/fruit flavor later. Among format's advantages are easy portability, liquid-free nature popular among truckers looking to avoid making pit stops (part of 5-Hour shot's early appeal) and fact that unwrapping each packet creates a "pause point" before consumer ingests more caffeine than is warranted, in contrast, say, to giant non-resealable single-serve cans offered by some energy players. Brand has proved a hit at big distribution center in Delray Beach, Fla, operated by UPS, whose drivers don't want to have to desert their routes in search of a bathroom, Welch said.

So what went wrong with Sheets? It made share of rookie mistakes - say, putting Stoudemire ads up well before product actually hit shelves of local retail partner Duane Reade. But big one was going with measly 50 mg of caffeine, Joe believes. Sheets upped that to 100 mg toward end of 3-year run, but it was too late. So Joe obtained IP and took it to Welch, who was winding down retail brand for cream of coconut biz he'd sold to Coco Lopez and looking for new brand. They've opted for staged launch, starting with 200 retailers around Fla base and landing RaceTrac petroleum chain in Southeast. They're deferring national retailers until later, with a few exceptions like Army/Air Force Exchange and Travel America truckstop chain. In meantime, they're experimenting with marketing mix, including vehicles like radio ad that pitches EliteOps as convenient alternative to energy drinks or shots. "Now you have a real choice," states announcer. "You can carry a week's worth of energy in your pocket or your purse." Among fertile niches they're targeting are college students, outdoor enthusiasts and the military. Brand has landed good reviews on niche energy drink sites like Green Eyed Guide, which touted 75-cent price and convenience in naming it Energy Drink of the Month in Sep. "For the first time, I am compelled by nerdy fascination to nominate something non-liquid for this award," reviewer wrote. Brand info at EliteOpsEnergy.com.
Tho they've had their struggles, pair of energy brands under Bawls and Crunk names have been carefully rebuilding their presence under new Ohio-based ownership team of recent years, as seen at recent NACS c-store show in Las Vegas. John Standt and Jon Gunnerson acquired Bawls in 2010, then followed that up with Crunk in 2012. Tho under same ownership roof (with Standt holding largest stake), the 2 brands operate separately, with separate sales forces, to serve their different consumers and consumption occasions, Jon indicated, speaking at brands' adjacent booths at NACS.

After foray into conventional 16-oz cans diluted brand that was built upon distinctive 10-oz stippled glass bottle, team has restored that as workhorse, now 75% of sales. But active ingredient "guarana is still the horse," Jon said of brand positioning. Front panel describes item as "high caffeine guarana soda." Team added first new flavor, Mandarin Orange, in glass bottle in Jan. They've also revamped can graphics and rolled out Orange and Root Beer in that format. Forays into areas like fashion under the founding team are long gone, but brand is still working videogame crowd via LAN parties, presence at PlayCon convention every summer and the like. Still, G33k Beer (geek beer) had to be restaged as Root Beer because too many consumers simply didn't realize it was a root beer. These days, co chooses its DSD spots carefully, with houses like giant Columbia in Pac NW, New Age in Denver and Johnson Bros in Ala in the current mix. And it's building Amazon online biz, tho here shipping considerations dictate that mix tilts 2-to-1 toward the cans.

Team is in earlier stage of reviving Crunk (whose branding is always styled as Crunk!!!). Recall that brand was founded in 2004 by Sidney Frank, the genius behind Grey Goose and Jagermeister phenomena, as partnership with Atlanta-based rapper Lil Jon, who'd popularized Crunk Juice concoction made of Hennessy and Red Bull. But despite pockets of strength in areas like Atlanta and San Diego, it never ignited, rapper's career plateaued, and after Frank's passing at age 86 in 2006 his heirs never really got behind it. So Standt and Gunnerson picked it up in 2012. Now, packaging has been given new look, featuring big C against a starburst, but core sku remains Pomegranate. "Pomegranate will always be king," Gunnerson vowed. But line has included Mango-Peach and Grape Acai in mix, and added Tropical-Blast flavor in May. Like its sibling sku, newest entry is all-natural and formulated with herbal blend that includes ashwaganda and white willow. Lil Jon is out of mix now, with brand resting appeal on natural ingredients and rich flavor, Gunnerson said. Like others in energy realm, it's backed off promoting item as mixer in alc drinks.  
Denver-based WhiteWave Foods has elevated Blaine McPeak, prexy of its Americas Foods & Beverages group, to newly post of coo with responsibility for all global operations. He'll continue to report to chmn/ceo Gregg Engles. He's being succeeded in former post by Kevin Yost, prexy of Americas Fresh Foods, who now will report to McPeak and run such key brands as Silk, So Delicious, Horizon, Wallaby Organic, Earthbound Farm and International Delight. Yost will report to McPeak. McPeak will continue to run int'l ops of Americas Foods & Bevs. Meanwhile, cfo Kelly Haecker will leave co next Mar to spend more personal time with his family, co said, handing off his responsibilities to Greg Christenson, who's being promoted to evp/cfo after serving similar role at Americas Foods & Bevs. Engles termed Haecker "a trusted advisor and steadfast business partner since our IPO" in 2012 . . . Smith Teamaker, which just doubled its production capacity at new plant in Portland, Ore, has brought in Starbucks vet Tom Clemente as prexy. Clemente had run sales team at Tazo following its acquisition by Starbucks; the late Steven Smith was a founder of both Tazo and Smith Teamaker. Prior to his Tazo assignment, Clemente had worked on launching SBUX' packaged coffee biz and on setting up its in-grocery kiosks. He most recently led specialty coffee biz for Pacific Marketing Int'l. His career also included a stop at Coffee Bean & Tea Leaf. He joins Smith just as it's ready to open new 20-seat tasting room with a panoramic view of the production floor below. Guiding force behind co's specialty teas is Tony Tellin, who worked with Smith for 17 years.  
It's common suspicion when small-cap bevco issues unrelenting stream of press releases touting accomplishments even as sales stay modest and losses mount. Now SEC has come down on Marley Coffee marketer Jammin' Java Corp like a ton of bricks, charging former ceo Shane Whittle with operating pump-and-dump scheme in 2010-11 that netted $78 mil in illegal trading profits. His partner in launching co, reggae icon Bob Marley's son Rohan, who's still exec there, isn't accused of wrongdoing, and current ceo Brent Toevs insisted that current team, whose efforts to oust Whittle resulted in extended litigation vs former ceo and then consultant, has cooperated with SEC and shouldn't bear any taint from suit. "We have shown that we are a legitimate company with a legitimate business and that we should not be held accountable for the misdeeds of our former management and their associates. We look forward to justice being served against Mr Whittle and his associates in this matter for our sake and the sake of our stockholders," Brent said in statement. Tho suit focuses on Whittle and accomplices, it alleges that current mgrs engaged in securities violations, accusation Toevs said co will vigorously contest. Note that Denver-based Jammin' Java operates separately from Detroit-based co that markets RTD relaxation and coffee drinks under Marley name.

Alleged fraud took familiar pattern. SEC said Whittle, "helped by 8 outside accomplices, illegally profited by secretly taking control of millions of shares of Jammin' Java, inflating their value and later dumping them on unsuspecting investors," as Reuters summarized suit. "The scheme allegedly involved setting up a front company to make it appear that Jammin' Java had a financial backer and making various promotional announcements that helped boost the share price." During period of alleged manipulation, in May 2011, shares surged to $6.35 for market cap of $400 mil, despite trailing-year revenue line that came to just $1,037, per public filings described by Reuters. Defendants then sold their shares, which later tanked to less than $1 and triggered SEC's investigation. Under new ceo, co has continued arduous task of building brand in highly competitive premium coffee segment, notching 18 consecutive qtrs of revenue growth and generating $9.6 mil in revenue last year, but losing $10.3 mil in process.  
Join us May 16-17 at the Ritz Carlton in Chicago for our annual spring conference. We're mixin' it up a bit this year. As usual, we'll provide a provocative program and plenty of quality networking time. But we're expanding the scope to include the current deal landscape (brewer and distrib) along with our annual focus on the high end. We're also adding presentations starting mid-afternoon Monday and all day Tuesday. Once again, we'll feature an extended panel with the leaders of beer's high end: Constellation Brands Beer Div chairman Bill Hackett, HUSA prexy Ronald den Elzen and just-added Boston Beer chairman Jim Koch. Separately, we'll feature two top execs from Sierra Nevada, Brian Grossman and Joe Whitney. We'll also bring you the latest from key consolidation consultants: IBG's Joe Thompson on distrib consolidation, Bill Anderson on craft brewer consolidation, plus partners Mark Hall and Randy Jozwiakowski of newly formed Paragon Bev Advisors (they previously gained lots of experience working on deals at Anheuser Busch). BMI publisher Benj Steinman will provide his annual overview with key stats and developments. Click here for more info and click here to register.  

It took almost 20 years, but beer's share of absolute alcohol consumed in US last yr fell back to same level it was in 1975: approx 50 share. In interim, beer rose to just below 60 share in mid-late 90s before steady fade. That includes losses every yr beginning 2002. During same 40-yr period, spirits fell from 40 share in 1975 to as low as 27.5 in 1998, then surged to 34 share last yr. Wine rose from 10 share to about 16, but picked up only 1 share or so over last decade. This long view sparked by presentation last week by Distilled Spirits Council of US (DISCUS) on 2015 liquor trends. Last yr, spirits picked up another half-share of volume with 2.3%, while beer flat-to-down, wine up slightly.

DISCUS pays more attention to dollars. Economist David Ozgo calculates supplier level revs. In $$, spirits gained 0.2 share last yr to 35.4, up from 28.2 in 1999 (earliest yr available). Tho spirits price increases lagged beer in recent years, over long term spirits revs more than doubled since 1999. Up $950 mil, 4.1% to $24.1 bil last yr. Wine revs doubled too. But brewer revs up just 52% since 1999, David calculates. So beer's share of revs (supplier level), fell same 8-9 points since '99 as they lost of volume. Share matters. A lot. Absolute alcohol consumption in US doesn't change much, it just shifts among bevs. A single share of absolute alcohol means approx $680 mil at supplier level, David reminds. And single share of volume means about 4 mil bbls of beer in any given yr. Getting share back is critical, as many beer execs acknowledge. But despite claims that FMBs, ciders and other brands "source" from spirits/wine, so far share losses continue.

Why Have Spirits Sales Been So Strong? DISCUS doesn't delve deeply into reasons for spirits' success, but prexy Kraig Naasz noted product innovation, improved access and premiumization drive share growth. And "whiskey boom" revived ailing segment and boosted overall growth. Then too, craft spirits, like craft beers, appeal to millennials (and others) as more authentic, more flavorful, having provenance etc. Also important: mainstream brands and value segment in spirits, tho not growing like premium-plus, haven't suffered nearly as much as those segments have in beer. Meanwhile, trade up in spirits just as strong, if not stronger than in beer. Look at 5-year trends. In 2015, "value" spirits had 35 share of spirits volume, down from 40 share in 2010. But volume down just 1 mil cases, 1.4%. Value revs even at $4 bil, while losing 4+ share of $$ to 17. In premium spirits, volume up from 69.2 to 77 mil cases, share held near 36. Premium $$ sales up, tho share slipped. But look at high-end explosion in spirits since 2010. Combo of "high end premium" and "superpremium" rose from 45 mil cases and 24 share of spirits to 60 mil cases and nearly 30 share over last 5 yrs. More important, high-end revs now over half of biz; gained 9 share in 5 yrs, rose from $8.2 bil to $12.5 bil. And in 2015, high-end products got 83% of spirits volume growth and 95% of value growth, according to DISCUS data. Net-net: premiumization even further along in spirits than in beer, and shows no sign of stopping. At same time, distillers "protected" value and premium segments far more effectively than brewers. Part of this due to expanded access, from Sunday Sales to tastings. Part is pricing. Better and more mktg may be in mix. And some old-fashioned pendulum swing. Question is whether pendulum will reverse direction anytime soon.  

Beer biz +0.9% for 52 wks thru Jan 2 in Nielsen all-outlet data, but kicked into higher gear late in yr. Up 1.5% for 13 wks. Above premium grew at 8-9% for 4, 13 and 52 weeks. But in period with better industry growth, premium beers improved some. Down 0.9% for 52 weeks, down 0.6% for 13 weeks and down 0.4% for 4 weeks. Even with improved trend, premium light beers lost slightly more share of volume late in yr, but slightly less of $$. Biggest improvement in trends: subpremiums. Subpremiums down 3.6% for 52 weeks, but down just 1.6% for 4 weeks. Part of reason why: you guessed it, less price realization. Avg "budget" beer price in Nielsen up 24 cents, 1.6% for 52 weeks but just 15 cents, under 1% for 4 weeks, and 18 cents for 13 weeks. For 52 weeks, subpremium beers lost 1.1 share of $$, but down just 0.8 for 4 weeks. AB and MillerCoors volume trends almost identical in Nielsen; AB down 1.1% and MC down 1.2% for 52 weeks. But AB only down 0.5% for 13 weeks, compared to 0.9% drop for MC. Even with same trends, AB so much bigger that it lost far more share. AB down 1.5 share of $$ in 2015 Nielsen, tho that improved to 1.3 last 4 wks. MC down 0.8 share both periods. Constellation up 1 share of $$ for full yr to 8.8 but up 1.2 share last 4 and 13 wks as trends accelerated to 18% growth for 13 wks (+15% for 52 weeks). Heineken USA up 1% for 52 wks, but flat in most recent period. Held share at 4.6 for full yr. The 2d biggest share gainer in scan data in 2015: Pabst. Up 0.3 share of $$ for full yr and 0.6 for 13 wks on strength of NYFRB. Pabst volume up 15% for 13 wks, 5.6% for full yr, with NYFRB. Down without it. Stunning transformation. NYFRB more than all of Pabst's growth and one of top growth brands for yr. Gained 0.6 share last 13 wks, 0.4 for 52 wks. Modelo Especial also gained 0.6 share for 13 weeks and only brand that gained 0.5 for 52 wks. Other brands that gained 0.4 share of $$: Michelob Ultra and Corona. Bud Light Ritas Seasonal gained 0.2 share for yr. But Rita franchise down 0.5. Brands that lost the most share by-and-large are those with most to lose. Bud Light -0.7 share of $$ for full yr (and shorter-term), Bud -0.3, Coors Light -0.2.