CytoSport biz acquired a year ago has proved bright spot on growth side for meat co Hormel Foods, which missed 3d-qtr sales expectations because of impact of avian flu epidemic and strong dollar. High-single-digit growth of CytoSport's Muscle Milk RTD protein items and double-digit growth of brand's powder items, per Nielsen data, helped drive 31% growth in co's Specialty Foods segment, to $283 mil, about 13% of co's total sales. The move of Muscle Milk's production from its hq site in Benicia, Calif, to HRL's Century Foods powder mfg operation in Wis also lent cost savings that contributed to 79% spike in operating profit to $31.2 mil. That in turn helped beat Street's earnings expectations for HRL, known for brands like Applegate ham, Jennie-O turkey and Jiffy peanut butter. Recall that high costs and slim margins were reported to be key factor that prolonged CytoSport's search for exit in recent years; so this qtr's report indicates Hormel is making solid progress in addressing issue.

On conference call, HRL brass claimed expanded distribution in food, drug and mass channel for Muscle Milk, driven particularly by big gains for Muscle Milk Pro Series intro'd in past year. Supporting Muscle Milk brand was key reason behind surge in ad expense to $34 mil in qtr from $21 mil a year earlier. HRL's prexy/ceo Jeff Ettinger told investors he didn't see any reason the performance shouldn't be repeatable in Q4.

"When we announced the Muscle Milk deal we mentioned how one of the benefits we saw was that we did have familiarity and experience within the segment with our Century Foods operations," Ettinger said, per Thomson StreetEvents transcript of investor call. "We have taken the opportunity to combine the previous manufacturing capabilities in Benicia with the Sparta, Wisconsin-based Century operation, and you're seeing some of the benefit of that already being reflected in the Q3 results." Specialty Foods div primarily offers single-serve restaurant packets, nutritional food products, supplements and contract manufacturing. Ettinger added: "We've been able to rejuvenate the portfolio in the Specialty channel. We continue to enjoy an excellent relationship with Pepsi in terms of distribution into the convenience channel and also parts of food, drug, and mass."

Mountain Valley Spring Water, controlled by private-equity shop Great Range since Feb 2014 and stocked since then with cadre of Nestle Waters North America vets, appears to have substantially cut back its sales force this week after falling short so far of what are said to be aggressive sales projections for 2015. By some accounts it's currently down to 4 sales people on retail side, with co tilting more to brokers to pick up slack. It's also cut back home & office delivery (HOD) sales force to just a staffer or 2, per grapevine. Tho brand continues to grow briskly in some channels, particularly natural foods, and overall is said to be up well beyond 20%, that's still a far cry from 40-50% growth target.

The reset comes during what outsiders, including at rival bottled water cos, have styled a greater "Nestlification" of co as team assembled by prexy Jim Waldeck, a Nestle vet, has adopted increasingly promotional stance, with aggressive price promos and stepped-up forays into channels like warehouse clubs - fertile sources of potential growth, but carrying risk of alienating core retail base on natural and specialty side. Sources say more aggressive stance on price and package additions such as 750-ml bottle haven't produced anticipated lift. Another issue seems to be that continued torrid growth in biz from key copacking client, Talking Rain's Sparkling Ice, hasn't materialized.

Recall that former majority owner Johnelle Hunt, widow of trucking magnate JB Hunt, had put co on block as she unwound her holdings as her age advanced, with bidding won by PE shop Great Range Capital, KC-based newcomer to packaged goods space. Under prior ceo Breck Speed, who exited in past year, co had managed to elevate brand to position as rare domestically sourced bottled water that commands premium price, working mystique of Arkansas source, heritage of nearly a century and a half, and upscale glass bottle to establish major presence in natural/specialty and growing consistently at double-digit rate. As new owner, Great Range brought in former NWNA exec Waldeck out of retirement to run co, starting last Dec, and Jim has added flock of former colleagues to key roles, including Rick Tanner running sales and marketing, Mike Eccles on supply chain and Lisa Sharpe on customer service. Despite cutbacks of past week, co may be in hunt for at least a few replacements on sales side, possibly from Nestle side, too. Staffer who picked up call yesterday at Mountain Valley hq said she'd relay query to Waldeck and Eccles, but no word back as of this afternoon.

At time high-end waters like Fiji and Voss are being embraced by retailers and growing briskly, category rivals in recent months have expressed surprise about more price-aggressive stance that Mountain Valley has undertaken. For instance, brand was recently spotted in Sam's Club stores going head to head with NWNA's Pellegrino, a frequent aggressor on price, at $13.98 per case. The risk is such offerings undermine pricing structure at core retailers like Whole Foods while provoking response from NWNA, never one to shy away from a price battle.

Rich deal flow lately has yielded coupla transactions of tangential interest to those involved in bevs. One is deal in alcohol space that nevertheless signals continued rise in interest in all-natural adjuncts as consumers raise their standards in spirits they consume. That was move by Constellation Brands, via recently created venture fund called Constellation Ventures, to acquire minority stake in Chicago-based Crafthouse Cocktails, which markets premixed cocktails made from natural ingredients in trendy Moscow Mule, Paloma and Southside recipes. Brand is distributed in Ill, Ohio, Mich and Colo. Recall that some years back spirits house Diageo acquired non-alc mixer line Stirrings, with flock of new entrants on both premixed alc side and NA side since joining fray . . . Meanwhile, on food side, Verlinvest family fund has taken small stake in Sir Kensington's brand of condiments, which has been winning spots in high-end foodservice accounts vs condiment giant Heinz by virtue of its higher-quality ingredients, lower sugar and sodium content and non-GMO status. Verlinvest is familiar to those in bev space for its past investment in Glaceau and current stakes in Vita Coco, Hint and Sambazon. As family fund behind Stella Artois beer fortune, Verlinvest is heavily invested in Anheuser-Busch InBev shares and some commenters were quick to point out that controlling shareholder at both ABI and Heinz is Brazil's 3G private equity group. "My cousins and I, we pride ourselves on being daring investors in the food and beverage world, among other things," chmn Frederic de Mevius told NY Times. Sir Kensington's boasts at least 1 familiar bev face in key role: field marketing dir Patrick Jammet, who'd long held similar role at Honest Tea.

Coca-Cola Bottling Co Consolidated said William Elmore, a 20-year board vet, has elected to retire Nov 30, exiting also as officer of co and employee. Also leaving on that date is an outside board member, HW McKay Belk, a consultant, also sitting since 94. Neither decision was result of any disagreements with co, COKE noted . . . Hain Celestial has added former NY Police Commissioner Raymond Kelly to board, bringing it to 8 members. Kelly currently serves as prexy of Risk Management Services for real estate firm Cushman & Wakefield.

Phoenix-based Inventure Food, which markets specialty and licensed food/bev brands, is heeding siren call of organics, announcing today that its licensed line of Jamba At-Home smoothie kits will intro certified-organic versions of the 2 top-selling flavors of 11-sku line, Strawberries Wild and Razzmatazz. The new sku's employ USDA-certified frozen berries and organic nonfat yogurt, going out at retail for $4.99-5.99 per 8-oz pack, each yielding two 8-oz smoothies. The strawberry sku combines strawberries, organic nonfat yogurt and bananas, while Razzmatazz melds blueberries, raspberries, strawberries, bananas and organic nonfat yogurt. "As American food demands change, we are seeing more organic options in grocery aisles," explained Dan Hammer, Inventure's svp/gm of frozen div.

Most of the headlines today focused on pending contest between Panera Bread and Starbucks in pumpkin spice lattes but bakery café chain also has upgraded bottled bev line as it proceeds with mission to clean up ingredients by end of 2016. And the winners are: Joia Soda, BluePrint juice and Harmless Harvest coconut water.

St Louis-based chain, now operating 1,926 units in 45 states and Ontario under Panera Bread, Saint Louis Bread Co or Paradise Bakery & Café marques, in May created a stir when it posted list of 150+ artificial ingredients it will phase out of all its recipes and 3d-party items by end of next year, including bev mainstays like HFCS. That was bad news for stalwart CSD brands poured there such as Mountain Dew, Diet Pepsi, Sierra Mist and Dr Pepper. Move came at time that emphasis is increasing on natural products not just at other fast-casual restaurants (including new generation of eateries like Dig Inn) but even at some mainstream fast-food chains, as with move by Arby's chain to bring in Boylan sodas (BBI, Jun 15).

Today, co said it's adding new version of seasonal pumpkin spice latte - even as Starbucks moved to employ real pumpkin for first time and drop caramel coloring, objects of derision of Food Babe blogger last year. Panera also is offering "new line of 'clean' bottled beverages that are free of artificial colors, flavors, sweeteners and preservatives," as laid out in so-called "No No List" published in May, period when chain commenced small test of newest bev menu additions. They join roster of in-house-brewed teas, lemonades, smoothies, bottled milks and juices that are already free of these artificial ingredients, including such outside brands as Purity Organic juices and Horizon organic milk. Throwing gauntlet down to Starbucks, co sampled new latte this morning in Seattle's Victor Steinbrueck Park, not far from location of original Starbucks store near Pike Market. It rolls out beginning Sep 9. Chain is also testing clean versions of its vanilla, caramel and chocolate syrups used in drinks craft in-house like Caramel Latte.

"Our pumpkin spice latte has long been made with real pumpkin and without artificial caramel color -- and this year we're taking 'real' a step further," said Panera head chef Dan Kish. "We're offering a 'Real Pumpkin Latte,' made entirely without artificial colors, flavors, sweeteners or preservatives, and letting the goodness of real pumpkin, milk and spices do all the work."

On bottled side, it's adding pair of HPP brands, BluePrint Beet Red and Green juices and Harmless Harvest Coconut Water, along with culinary soda from Joia, Grapefruit Chamomile & Cardamom Soda.

It's arguably been biggest bev misfire over past decade: quercetin-based energy play FRS went thru more than $100 mil in capital, array of hi-profile execs and exceptional degree of marketing ingenuity before retreating to modest, primarily online presence in hands of sister operation, quercetin-mfg Nutravail, amid broad expectation that brand was winding down its run. But there may be new life for The FRS Co after all, as its founder, bev entrepreneur Tom Lines, appears to have quietly acquired brand a couple of weeks ago.

Operating as FRS International LLC, Lines apparently picked up trademarks and patents on the cheap on Jul 31, for just $1.5 mil in cash, tho investors retain one-third share of equity and thus chance to participate in any upside that eventually materializes, per letter dated Aug 4 from James Quandt, FRS chmn for past 8 years and managing partner at Thomas James Capital. (Main investor over years has been Oak Investment Partners.) Deal didn't include Nutravail, based outside Washington DC, which changes its name from The FRS Co to Nutravail Holdings Corp.

In his letter, Quandt discusses retrenchment in 2014 after distribution alliance with PepsiCo fizzled, and notes that mandate to attain break-even status proved unattainable as brand performance continued to erode. "After approaching a number of strategic buyers in the beverage and nutraceutical categories, we concluded there was no genuine interest." But Lines had remained passionate about potential of FRS brand and quercetin ingredient, Quandt noted, and "we are optimistic that Mr Lines can turn his tremendous enthusiasm for FRS into ultimate success for the brand." Meanwhile, Nutravail ceo Rick O'Neil is now shed of burden of supporting FRS, and can continue to move co in direction of extending its confectionery-style technology to manufacturing prescription drug products.

New batch of scanner data suggests that Big 3 soft drink cos are having good summer as brisk growth in noncarbs and energy drinks offsets softness in their traditional CSDs. All-channel Nielsen data reported by Wells Fargo's Bonnie Herzog displayed "sequential" improvement in CSDs, even as noncarbs and energy drinks enjoyed robust performance. For Coca-Cola, $$ sales accelerated to 4.1% growth for 4 weeks ended Aug 8, vs 2.1% growth over 12 weeks as double-digit growth in juice, water and iced tea offset CSD declines. On blue side, Pepsi's $$ sales accelerated to 3.4% for 4 weeks from 1.6% over 12 weeks as softness in snacks and CSDs were offset by double-digit growth in waters, sports drinks (Gatorade) and shelf-stable juices. And Dr Pepper Snapple Group maintained that pattern, accelerating its $$ sales to 3.8% over 4 weeks from 1.8% over 12 weeks, riding strong results in juices and teas (Snapple), tho unlike its peers its CSDs also scored solid gains (+2.4%).

Interestingly, all 3 big players scored gains in both $$ sales and pricing with their regular CSDs (collectively up 2.8% including private-label), but were undermined by weak performance on diets, off 3.8% as a segment.

Monster Regains Momentum in Robust Energy Category Energy drink segment continues on robust growth pattern, rising 10.5% in $$, with Monster Energy apparently weathering transition to Coke distribution in half of country and outgrowing archrival Red Bull for 4-week period, rising 10.9% vs Austrian brand's 9.1%. (Its pricing edged off 0.7% while Red Bull's rose 4.5%, however.) And dark horse Rockstar, distributed primarily via PEP network, continued impressive recent performance, scoring 22.8% gain in $$ growth despite avg 1.2% price rise.

Pigeon Hill Brewing has decided to keep the name of its beer - "LMFAO" Stout ("Let Me Fetch An Oatmeal" Stout) - despite receiving cease and desist letter early last mo from popular music duo of the same name, reported MLive. Co responded to letter via its Facebook page, stating that "we believe any attempt to oppose Pigeon Hill's mark would fail" and that "simply put, there is not even a scintilla of evidence that a likelihood of confusion does, or could, exist." They list various dissimilarities including "the goods and services with which they are associated, their respective meanings, the trade channels in which each mark is used, and the sophistication of the respective purchasers that buy goods and services sold under the marks." Further, "the many wholesome connotations of LMFAO Stout could not be further from those of the now-defunct party rocking," and "the average craft beer enthusiast…has not been and will not be confused into believing that there is an association with your client or its marks," according to co. Stay tuned.

Here's yet another example of a fast-trackin' local success story in the beer biz, utilizing more mainstream culture references. Duquesne Brewing's new Joe Paterno Beer, a Vienna-style lager, managed to sell 3K bbls of 12 and 24pk cans just in the first week it was available, with distribution only in PA and parts of NJ, Duquesne Brewing owner Mark Dudash told ESPN. "One distributor would order one palette, then the next day four palettes and then next day a half of a truckload," so "we're just trying to keep up with demand," said Mark. Co had only expected to sell 500 bbls by the 5th Penn State game of the season. In Westy Beer Distributors territory alone, "nearly 100 retailers" sold 2K cases in three days, general manager George Bradley shared. "I've been in this business for 17 years and I've never seen the response to a beer product like this." It seems timing just right for the release that honors long-standing head coach of Penn State's football program, whose reputation later marred by Sandusky scandal.

Of course, this isn't the first time a local professional sports figure, or sports reference has been used to market a specific beer brand. Same is true for pop culture, tv, movie and music tie ins, all of which range from official partnerships to clever references. Lately, they've come with a noticeably orange tint. Just yesterday, Anchor Brewing announced it'll partner with the San Francisco Giants to release Giants Orange Splash Lager and Terrapin Beer announced The Walking Dead, a blood orange IPA and collaboration with Skybound Entertainment (company founded by creator ofWalking Dead comic book series, basis of highly popular tv show). Recall Anchor currently building a new brewery near Giants stadium and both Terrapin and Walking Dead stories based in Georgia, where the show is filmed. So local ties aplenty. Also, a little over one mo ago Heavy Seas Brewing created a beer called Fielder's Choice as tribute to Orioles hall of famer Cal Ripken Jr that'll donate $2 per case to the Cal Ripken Sr. Foundation. At same time, Union Craft Brewing created "Broken Record" Belgian Pale Ale, also commemorating Ripken and donating to Ales for ALS.