Body Armor seems to be pulling out all stops in looking to generate trial and build retail velocity. Reader has sent pic from Publix chain in Fla showing bogo for brand - buy 1, get 1, at $1.79. Chainwide deal is featured in grocer's weekly flier.

WhiteWave Foods rode 17% rev growth to its first billion-dollar qtr, and operating income rose 25% to $102 mil. Excluding impact of acquisitions and slight negative headwind from currency, sales were up 11%. Americas Foods & Beverages segment scored 23% sales growth to $723 mil, driven by growth across plant-based coffee creamers and premium dairy platforms, contribution from So Delicious and inclusion of Vega plant-based nutrition and Wallaby organic yogurt results for part of period. Minus acquisitions, segment was up 10%. Silk brand enjoyed mid-teens growth in nut-based bevs, including new cashew milk, despite increased private-label activity from retailers, now 13% of category. Chmn/ceo Gregg Engles also lamented move by rival Blue Diamond to drop its ad activity, which last year comprised 35-45% of total category spend. "As an industry, as a category, we are spending less money doing that, even though Silk as a brand is spending more doing it," he said.

Tho some claim to have spotted green shoots of improvement in nation's obesity situation over past year or 2, new data from gov't's Health & Nutrition Examination Survey showed no decline. Indeed, obesity among adults in 2013/14 edged up to 38% from 35% in 2011/12, tho researchers said that wasn't statistically significant difference. "To many in public health, it was surprising and disheartening," wrote NY Times. Times quoted NYU prof and nutrition gadfly Marion Nestle as acknowledging, "Everybody was hoping that with the decline in sugar and soda consumption, that we'd start seeing a leveling off of adult obesity." Worst problems continued to be among lower-income, less educated Americans, story noted. Tho big bevcos have sought to argue that problem is as much one of sedentary lifestyles, others who've been active in lobbying for more stiffer disincentives to consumption of sugar-laden products argued that results simply show that more needs to be done. "The emergency flag has gone up," declared Duke University's Kelly Brownell, who's urging soda tax. "We are not doing nearly enough."

AriZona folks, who've tried plethora of energy plays over the years without any really igniting, now are offering natural-energy entry in 15.5-oz cans that riffs off some of co's classic tea and juice flavors, including Arnold Palmer and Mucho Mango. Noncarb entry that's been trickling out to retail this fall employs pear juice, sugar and stevia as sweeteners, contains coconut water and employs energizing ingredients that include green tea polyphenols, green coffee extract, white tea extract and guarana. It also lists "performance blend" that harnesses such trending functional ingredients as quercetin, resveratrol, acai and branch-chain amino acides (BCAAs), to help support on-pack claim that drink provides "energy, balance, focus, hydration, recovery." Each can has about 120 mg of caffeine and 140 calories. Other 2 flavors in initial range are Watermelon and Fruit Punch, also playing off popular flavors in core line. Front panels carry modest-size AriZona logo at top but are dominated by flavor designation and descriptor "Natural Energy" in block letters. "Good Energy," heralded poster pasted up on Brooklyn bodega that was pushing them at 2 for $3. "Naturally sweetened, made with real juice." Tho variety of energy entries have come and gone over years, co Web site still lists such plays as Rx Energy Herbal Tonic and Caution as being in mix.

It's been major regulatory conundrum: what does "natural" on a food or supplement label signify - if it signifies anything meaningful at all? Now FDA finally is ready to tackle issue, establishing docket to seek public comments on use of term "in the labeling of human food products, including foods that are genetically engineered or contain ingredients produced through the use of genetic engineering." Agency said that's response to receipt of 3 citizen petitions asking that term be defined, as well as 1 petition seeking to prohibit use. It adds that federal courts, dealing with suits over whether items containing HFCS or genetically modified ingredients can be called natural, have also requested determination. So far, notes Specialty Food Assn, "FDA has not attempted to restrict the term, except for cases involving added color, synthetic substances and flavors." Comments are due by Feb 10.

PepsiCo "has laid off employees" as it shifts staff from Somers to either offices in White Plains or corp headquarters in Purchase, in Westchester County, reported The Journal News. "These changes are made with careful consideration and are necessary for us to stay competitive while meeting the future needs of our business," rep Aurora Gonzalez told paper. "Unfortunately as a result of these changes, some positions have been impacted," she added. PEP didn't share how many jobs have or will be eliminated. Report notes that back in Feb, co received "generous taxpayer subsidies to stay in Westchester County," and said at time that no jobs would be eliminated.

Reed's Inc took a step backwards in its 3d qtr as fumbled move to expand capacity yielded massive out-of-stock situation and undermined consumers' continued brisk demand for its altsodas, resulting in 13% drop in revenues to $10.7 mil. That created operating loss of $2.14 mil, reversing modest $246K profit the year earlier. It also left sales for 9 months up a mere 3.4% to $33.6 mil after heady start to year that saw ginger brew sales soaring on back of consumers' yen for all-natural brands and Moscow Mule cocktail craze. REED brass estimated they'd foregone at least $5 mil in sales because of out-of-stock issues, on top of $2 mil left on table in Q2. Many customers received only half their orders in recent months; at one point, we hear, Virgil's soda line was out for 8 weeks. Those lost sales otherwise would have pushed quarterly revenues up 27%, 9-mo revenues +25%, in synch with fast growth of co's Reed's and Virgil's brands. Gross margin plummeted from 32% to 15% as co was forced to discard output not up to snuff from new copacker rather than compromise standards.

But founder/ceo Chris Reed believes worst is behind co now. "In October, we had the best month in the company's history, with sales that exceeded $5 million," he said. "We expect that not only will we be able to keep up with demand, but also significantly reduce shipping costs. It took longer than we expected, but now that we have increased our production capabilities, we will be able to keep up with the accelerated demand for our beverages." After snafus getting new copacker on East Coast running, REED moved to add backups on East Coast and in Midwest. Now that they're all running, Reed's will be able to complete upgrade of company-operated plant in LA, which will require pair of 2-week shutdowns to install and commission new equipment. In past co has outlined extensive output increases and labor efficiencies that will be obtained in LA as result.

On conference call last night, Reed and his cfo Dan Miles described cascading effect of botched expansion plan: issue became clear too late for co to pull aggressive promo plans, which soared to 12% of gross sales from anticipated 8%, even as transportation costs mounted because of need to get product from non-optimal plant locations to pockets of demand. It also meant production of co's Culture Club kombucha had to be deferred, resulting in 20% quarterly decline. Still, scanner data shows core Reed's Ginger Brew to be up 37% in grocers for year-to-date, so there's clearly no issue on demand side.

"I like to feel we're deep into a recovery from the last 2 quarters," Reed said on last night's call, adding ruefully, "It seems in business the tough thing is to create products customers want, the easier thing to do is to make the widgets and get them to market." Not the past 2 qtrs. While co anticipated having new East Coast copacker running in May, lotta product didn't make grade and "we tried to push a situation that was going to take its time," Reed said. So it's enlisted backups in East Coast and Midwest, all 3 copackers are producing now, and co finally is meeting demand. Once LA upgrade is done, in-house and co-packing capacity should together support $100 mil in annual sales. The 4 mil cases that were run in Oct suggest $65 mil in annual revenues, with Nov also looking robust and $9 mil on order books already for Q4. So "it doesn't seem possible" there will be another decline in Q4, Chris assured shareholders.

Looking to Expand Absolut Ties, Intensify DSD Push, May Be Close to Key Fountain Wins Tho most of call dealt with production snafus, Reed sketched out other priorities for coming year. Tho soda brands are well seeded in grocery accounts, there's plenty of upside in up-and-down-street biz, and co is ready to intensify efforts with beer distribution network, which was able to grow account base by 43% despite only small Reed's sales team to support it. So in 2016, co will add more feet on street to support DSD effort. Recall that years back, Reed's dialed down DSD that had become over-extended for brand's small presence. Current tilt back reflects major progress brand's made since then.

Reed's also has been riding Moscow Mule wave via tie to Absolut and its parent, Pernod Ricard, and conversations are continuing on expanding those ties to build greater presence in bar/nightclub trade, Chris said.

Then there's possibility of developing bag-in-box foodservice biz. Without naming name (tho BBI believes it's most likely Panera Bread), Reed recounted approach from ceo of major fast-casual chain whose wife had gotten him on juicing kick and who'd started questioning ingredients in restaurants' food/bev offerings. Before long chain was issuing "serious announcements about what we won't be in food going forward" and Reed's was asked to develop alternative to major soda cos' "high-fructose corn syrup/sodium benzoate cocktails." REED had chemical- and preservative-free bag-in-box offering ready to show in early Jul, using expertise gained from forays into private-label production and kombucha, and client proved to be "thrilled with the product and the story it can tell consumers." But it then challenged Reed's to knock calorie count down from 250+ to 150-180 range. That accomplished, prototype is about to go into chain's hq shortly, and Reed's hopes to get green light for production by early 2016, ceo said. Offerings include sophisticated flavors like grapefruit hibiscus ginger soda, he noted. Meanwhile, Reed's also is working with largest producer of fountain hardware to devise next-gen system. Chris said 5-gal bag-in-box likely will be sold to restaurateurs for $60-80, yielding equivalent of 13 cases of glass-bottle drinks that would cost them $300. So margin opportunity for both sides seems very compelling.

Victim of Production Triage, Kombucha Recovering Nicely, CEO Says; Skeptical on Most Rivals' Ability to Control Alcohol Tho REED brass had little to say about Culture Club kombucha line in earnings release or prepared remarks, ceo offered detailed response when investor asked about it. Because output had to be focused on core soda offerings, complicated kombucha process took back seat and Aug sales fell to half level of 3 months earlier. ACV in core natural food channel plummeted from 76% to 47%. "Just getting back in stock," Reed reported. Silver lining was that, while account base shrank by 40%, sales only dropped 20% vs year-earlier, suggesting solid demand. Since Oct, Kombucha has been "recovering nicely," Reed said. Asked about unappealing look of line on shelf, Reed acknowledged that curved bottle requiring new flexible label material from Avery has posed production challenge, but he hopes $600K labeling unit headed for LA plant in Feb will address issue. If not, co will retreat to flat-sided bottle. "Sometimes I get too far ahead of myself," Reed allowed.

Reed also took high ground in controversy over whether some kombucha marketers are routinely violating 0.5% alcohol limit for items labeled as non-alcoholic. Given that Reed's is publicly traded co and Reed himself is chem engineer by training, "I wouldn't dance with the regulatory limit," he assured listeners. He said co employs process that converts alcohol to vinegar or acetic acid to insure compliance. As for rivals, several of whom have received warning letters from TTB, Reed's view is that "everything is over the legal limit except for one other company, and there has been a sharing." He didn't elaborate on what he meant by "sharing," but description seems to fit KeVita, whose cfo had helped Reed's launch Culture Club when he held cfo post there.) "I know how plants are designed," Chris added, "and they're in no position to do this correctly," he said of other players.

As for that "other guy," he's "putting in the fastest line he can right now, anticipating a meltdown in the supply chain in kombucha," Reed added, presumably referring to KeVita's new plant in Oxnard (tho plant supports other segments than just kombucha). But he won't be only beneficiary if there's pulling of non-compliant kombuchas from shelves, as happened in 2010. That should be "windfall" for Reed's entry, too, ceo Reed believes.

Count publisher/consultant Jim Prevor, via his Perishable Pundit e-letter, as consistently out in front on why UK grocery giant Tesco was doomed to fail with its Fresh & Easy concept in US. So how about Yucaipa, which picked up assets for nothing (actually, it was paid $235 mil!) with view to re-bannering stores as Wild Oats units repositioned as healthy c-stores? "We didn't bother to write much about Yucaipa's efforts to succeed, because, well, they never really made any efforts," Jim writes. "Now they are in Chapter 11 and out of business." He admits, "For a brief moment we thought there was a shot . . . But when the price tag came in for new signage, advertising and whatnot, Yucaipa got cold feet and decided to make incremental improvements." That approach was unlikely to improve outcome for retail brand that shoppers had already rejected, he'd figured. Prevor, who guesstimates he's written more than 1,000 pages about ill-starred venture, eviscerated Tesco's strategy in Jan 2013 essay that's among most comprehensive takedowns we've seen of marketing strategy, with useful lessons even for those not in retail biz: click here to read more.

How bullish is PepsiCo about its Kickstart energy extension of Mountain Dew? Enough that subline will mark Dew's return to Super Bowl for first time in 16 years, AdAge reported. Ad is being crafted by BBDO in NY, Dew's agency of record. Latest push follows Kickstart's role kicking off Pepsi's new NBA sponsorship via ads featuring Oklahoma Thunder's Russell Westbrook . . . Kenya, largest exporter of black tea, is suffering thru extended drought that's cut its output by 14% in first 9 mos of year, to 271 mil kg, Reuters reported. Exports have skidded 13%, to 328 mil kg. But growers are hoping for pickup during balance of year now that rains have returned . . . Consolidation within US grocery biz continued with announcement that Safeway is buying 151-store Roundy's chain in Midwest. At higher grocery tier, $800 mil deal gives Safeway 34 Mariano's locations in Chicago metro. Until now, Cincinnati-based Kroger had scant presence in city, with just a handful of Food 4 Less discounters. Roundy's, which has been running red ink lately, also operates under Copps, Pick'n Save and Metro Market banners. There's some irony in deal, insofar as Kroger had been rumored to be purchase candidate for Chicago's Dominick's chain after Safeway decided to close it down; instead, Roundy's exec Bob Mariano swooped in and used sites to create Mariano's . . . Lassonde Industries warned investors that "a lack of sustained growth in the fruit juice and drink market" and challenging competitive environment is impelling it to step up innovation among its brands while pursuing more private-label biz. Besides recently purchased Apple & Eve and related brands, Toronto-based Lassonde's brands include Everfresh, Fairlee, Fruite, Graves, Oasis and Rougement.

Wendy Clark, Coca-Cola's prexy of sparkling brands and strategic marketing in North America, is heading to agency side, taking post of prexy/ceo of DDB Worldwide's N Amer biz starting in Jan. In memo to troops reported by AdAge, Coca-Cola N Amer prexy Sandy Douglas was lavish in praise for former AT&T marketer, writing, "Under her direction, many of our brands found their voice and an authentic presence in the social and digital world. Through it all, she has been an inspiring ambassador for our flagship brand. She and her team have created some of our company's most innovative and engaging campaigns, including the global rollout of Share a Coke and the 2014 FIFA World Cup campaign, which spanned more than 175 countries." He said KO has deep bench from which to name successor . . . Redline energy drink has tapped longtime Red Bull sales exec Frank Guagenti for its self-distribution operation in Fla, at time it's building presence within c-store banners like Circle K. Frank spent 12 years within Red Bull system in Fla, 5 years with indie DSD house Sand Dollar and, after it was terminated by Red Bull North America, another 7 with distribution branch that RBNA set up in its stead. Gene Bukovi, VPX exec who manages brand, said Guagenti was recruited with view to replicating Red Bull-style cooler and ice barrel programs, at time Circle K's Gulf Coast region is adding Redline to about 80 if its Fla stores. Also entering mix is Cefco, which has been expanding from small footprint within Fla panhandle. As reported recently (BBI, Oct 16), VPX recently surmounted period of financial stress and has been looking to build momentum for range of energy, protein and other brands . . . After stint with startup spirits co, Kevin Conrad has returned to NA sector, landing as evp sales exec at Austin-based Moonshine Sweet Tea. Conrad had played key role in building Rockstar Energy's DSD distribution during brand's formative days and later worked for bevcos like Go Fast Energy. Kevin's charged with building sales and distribution for co that so far has played only in Tex and La, as well as helping scale up production. He reports to owner Milton Verret, founder of gold coin marketer US Money Reserve.