BMI Archives Entry
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.
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.
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.
Marley Coffee Seen as Operating Pump-&-Dump Scheme in 2010/11; Former CEO Whittle Accused
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.
Jim Koch and Bill Anderson Join Stellar Program at Beer INSIGHTS Spring Conference; May 16-17
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.

