Austin, Tex, has been shaping up as center of cold brewed coffee innovation, and new RTD entry from food/bev mecca is from pair of entrepreneurs who definitely know from cold brew, having been in racket for coupla decades. Strother Simpson and Brett Holmes, former partners at Toddy, the now half-century-old cold-brew system that kicked off cold-brew in US, have just launched shelf-stable Coffee Juice brand that infuses cold-brewed coffee with whole blueberries and touch of lime. Besides Original sku, they've also intro'd Coconut, Salty Caramel and Sweet Vanilla flavors, using natural flavorings. To commercialize brand, they've set up joint venture with Austin's DB Miller, sales/distribution co operated by Brad Miller and Deepak Bajaj that also separately markets RTD iced tea line, Texas Tea. Due in Sep from partners will be triple-strength concentrate version of Original flavor called Coffee Juice Brewed Cold Coffee Extract. Key premise is that coffee/juice hybrid should find appeal among both coffee drinkers and non-coffee drinkers, once considerable education burden is surmounted, Brett told BBI this week. He claims to be by no means unhappy that Starbucks chain just threw its hat into cold-brewed realm, figuring it will single-handedly elevate segment.

Coffee Juice employs blend of beans from Central America, Africa and Indonesia, along with roasted chicory, using recipe of Strother's dad back in 1964, when he invented Toddy device. The blueberries are incorporated directly in cold-brewing process, yielding shelf-stable item without resorting to retort or aseptic processing. Item contains about 40 mg of caffeine. Coffee Juice launched this month chainwide in HEB's Central in Tex, in grab-and-go cold boxes, and has edged out into about 75 c-stores in Austin area, on way to anticipated 200 outlets next month. Also coming aboard in Jun are 50 Super HEB stores.

Line goes out at $2.99 per 16-oz glass bottle, conventional Snapple-style widemouth with big blocky letters on label somewhat in style of some cold-pressed juice brands. Partners hope to invest in proprietary bottle down road, Brett said. They're well along devising lower-cal entries using mix of cane sugar and stevia. Info at CoffeeJuice.com.

Simpson Names Goes Back to Beginning of Cold Brew Partners Simpson and Holmes, once college roommates, boast distinguished history in now-burgeoning cold-brew realm, helping Simpson's father Todd expand Toddy cold-brewing system that he'd launched in at-home version in Dec 1964 after discovering idea on plant-gathering trip to Guatemala for his Houston nursery co. By 1977, commercial version for coffeehouses had launched, and Strother joined his dad at co in 1987, launching bev development group in Houston 2 years later, with roster of clients for their tea and coffee extracts that eventually grew to include POM Wonderful Tea, WhiteWave, Honest Tea, Peet's, Nantucket Nectars, AriZona Iced Tea and Folgers. Holmes joined Simpsons there in 2003, just as Seattle's Best coffee chain began running with process for all its in-house cold coffee bevs. Bev development unit was sold in 09 to S&D Coffee, major supplier to McDonald's and Dunkin' Donuts, which built mfg site based on Toddy process. Simpson and Holmes have since moved on and, their non-compete restrictions now over, are finally able to formulate products under their own brand. They join rich cold-brew scene in Austin that includes Chameleon and Kohana, which both segued from concentrate to RTD, and High Brew Coffee, which launched as RTD line.  

CocoZen, coconut water line from Sri Lanka that had adopted suitably design-y package considering fashion-biz background of cofounders (BBI, Nov 18), has suspended operations for now in face of steeper-than-anticipated financial requirements. Having experienced cash flow challenges of early-stage bevco, cofounder Daniel Lonergan has segued to role as vp sales at 15-year-old trade finance firm Premier Trade Solutions, with view to broadening customer base to include food/bev players. Co offers small and mid-size cos purchase order funding and cash advances against receivables, key tools in apparel biz from which Lonergan hails. Details at PremierTradeSolutions.com. Among advisors who'd worked on launch was Solixir cofounder Scott Lerner.  

Tedeschi Food Shops won't quite make it to century mark as an indie retailer: c-store operator is being acquired by 7-Eleven, in deal expected to close around mid-year. Founded by Angelo Tedeschi in 1923, chain has grown to 182 units in area surrounding Boston, including southern NH, and developed highly regarded foodservice, produce and other capabilities. "Tedeschi is a respected brand and this acquisition fits in perfectly with 7-Eleven's growth strategy," said 7-Eleven evp/cfo Stan Reynolds. "These high-volume, high-performing locations complement our existing real estate portfolio" of 164 stores in Boston/NH area. Move continues streak of regional acquisitions by 7-Eleven, which operates 10,500 stores in N Amer. Tedeschi chain is estimated to generate $600 mil in annual revenue by CSNews, which had reported in Dec that chain appeared to be on sale block. Terms of deal weren't disclosed. (Tho sooner or later some of sale proceeds should end up in her pocket, Angelo's great-granddaughter Susan Tedeschi doesn't seem to be slacking off yet: last night, performing with Tedeschi Trucks Band in NY's Central Park, she was working as hard as ever on vocals/guitar.)  

Tho category is far from established yet, NY sports multiple switchels vying for retailers' and consumers' attention. Vermont-born and now Brooklyn-based Up Mountain is takin' different tack from its recently profiled NJ-based rival CideRoad (BBI, May 1), going with homespun look in jars and more experimental approach that even has run lately to carbonated kegs.

It just dipped toe into Southern Calif, and is launching first flavors, Lemon and Yerba Mate, latter bringing nearly 60 mg of caffeine to equation. Up Mountain sells shelf-stable line in 12-oz jars at $3.99 (promoted at $2.99 at Whole Foods) and 24-oz jars for $4.99. More recently it's launched CO2-carbonated kegs into such accounts as Whole Foods in Brooklyn, pair of Foragers Markets and Scratch Bread. Label heralds it as an "American heritage beverage" made from "roots, fruit & sap" that helps combat inflammation and aids digestion.

Brand's development is familiar odyssey of improvisation and fortuitous connections. It was created by youthful entrepreneurs Ely Key and Garrett Riffle, who has roots in Vt region where one-time colonial staple had lingered as familiar home-made elixir. They formed LLC in May 12 in S Londonderry, Vt, and set about production at rudimentary level, processing ginger in coffee grinder, purchasing maple syrup by the quart jug and hand-packing bevs in Ball jars and quart bottles. Brand routinely sold out at local farmers markets, prompting expansion to retail accounts in S Vt, then NY. At holiday market in Bklyn, founders hit it off with neighboring exhibitor, Kings County Beef Jerky, and were invited to share its industrial kitchen space in Bushwick area, with partners custom-fabricating 100-gal box that could cover all 6 burners of commercial range. They were picked up for distribution by natural foods house Rainforest, then switched to Dora's Naturals after approach from bigger house. Finding venerable bottle dealer Rappaport Sons nearby, they switched to its Mason jars and were intro'd to one of its customers, 4th-generation horseradish maker Gold's on Long Island, with long experience processing ginger. Now Gold's has become first copacker of brand, its only bev client. That required abandoning Mason jars for less-distinctive jelly jars, tho Riffle and Key have attempted to maintain homespun image via intentionally naïve, hand-drawn labels. They hope to devise proprietary bottle down road.

Up Mountain sources ginger from Hawaii, Thailand or Peru, with source duly denoted on cap, near sell-by date. Key just relocated to Southern Calif, where he's built base of 30 accounts in first month. Brand also is tackling New England area surrounding Boston. Co has grown to 5 staffers, most recently the surfing photog and Patagonia mainstay Scott Soens, who's working to reach influencers in Southern Calif.  

Looking to inject shot of energy into its Amp line, PepsiCo has taken the exotic flavor route, adding Strawberry Limeade and Passion Fruit to 2 remaining full-calorie offerings and adding pair of 10-calorie "Zero" offerings in Blueberry White Grape and Watermelon flavors sweetened with sucralose and ace-K. That spells exit for Original Sugar Free, Grape, Lemonade, Orange and Mixed Berry flavors, with only popular Original and Cherry Blast being retained from core line, which has undergone successive restagings over years. Amp buttresses such other Pepsi energy offerings as fast-growing Mountain Dew Kickstart, Rockstar and Starbucks Doubleshot. From consumer research, "we knew energy drink fans were craving some serious flavor innovation in the category," said marketing vp Greg Lyons. "So we made flavor our #1 priority." Line's 16-oz cans now carry outsize fruit imagery that's unusual in energy segment.  

Its longtime DSD partner Central Beverage having recently merged with Lakefront in Chicago, AriZona Iced Tea is heading out on its own, erecting company-owned DSD house in manner that it already self-distributes in NY, Fla and parts of Tex. AriZona evp Rob Marciano confirmed move today, crediting Central with having been solid partner but saying its move into what's been described as joint venture with beer house Lakefront prompted tea marketer to opt for greater focus thru its own operation. Recall that for more than a decade co has had cadre of staffers based at Central, offering degree of focus that made city key test bed for new items along with NY and Fla, where it completely controls route to retail. It's got warehouse in place and is moving those employees to new operation, building route system one territory at a time. When Central/Lakeshore deal happened, "we said, shoot, why not do a company ops here in Chicago?" Rob recalled. "Lakeshore is a great distributor and we will do some things with them," he added. "If they didn't initiate it (the merger) we'd still be there."  

He's been consumed with launching "perfectly balanced" Core Natural bottled water and is still active with new-gen sports drink Body Armor, but serial bev entrepreneur Lance Collins can't seem to let energy category go. Latest effort by creator of successful NOS Energy brand, which went to Coca-Cola as part of sale of Collins' Fuze Beverage nearly a decade ago, is dubbed Outlaw Energy, which sports couple of bullet holes in front panel of 16-oz can. It's seeking to tap into "outdoor/country heartland life style utilizing a country music platform" that's been bypassed by major energy brands, in process offering alternative to the hundreds of Bud houses that have just seen Monster Energy move to Coke system. Outlaw launches in Original, Power Punch, Fresh Zero and Citrus Zero flavors, moving via brokerage/DSD house Avanzar Sales & Distribution into 9 Southern Calif counties from Santa Barbara south to San Diego. Brand graphics can be viewed at otherwise sparse DrinkOutlaw.com site. Former Kraft bev exec Doug Weekes is serving as Outlaw's brand mgr for Collins.

Avanzar prexy Bill Juarez, a former Red Bull distributor, said he initially was skeptical of 16-oz entry in consolidated sector but appreciated premise that departs from daredevil stance of major brands, its pricing a bit under Monster and Rockstar, and opportunity created by migration of Monster out of Bud network. So far he's landed 2 major Bud houses: Ace Beverage in LA and Nevada Beverage. Also in mix is Mission Bev, in parts of LA County. Avanzar is working Outlaw via its own DSD network in most Southern Calif counties, employing fleet that's grown to 17 trucks on strength of gourmet snack brand Popcornopolis and bev array that includes Cabana coconut waters and lemonades, Alchemy Water and Vitamin Fizz. Latter is owned by publicly traded Minerco, whose Level 5 Beverage Co owns controlling stake in Avanzar. He's soliciting distributors mainly in Southwest quadrant of US so far. Collins noted he also retains trademark for Banditos in energy sector.

Tho it's being presented as new launch, Outlaw actually reprises value energy play within Fuze portfolio at time NOS served as its premium-priced play (BBI, May 26 06). Collins, recall, created NOS brand by licensing property familiar to car tuners from carburetor maker Holley and, when Coke insisted on including that brand in Fuze transaction, tried to replicate its success by licensing another motorsports brand, FMF, around time he went out with functional Body Armor brand, back in 2011 (BBI, May 3 11). But FMF didn't get far, in part because marketing efforts ran afoul of exclusive sponsorships wielded by major brands like Monster. As part of transaction that will see Coke take minority stake in Monster Beverage, NOS is heading over to MNST along with Coke's other energy brands.  

Coca-Cola has encountered glitch in Northeast with its Dasani bottled water brand over past week, voluntarily pulling some bottles from retail accounts because of presence of foreign matter - believed to be plastic - in bottles. Tops Markets chain in upstate NY posted recall notice dated May 8 saying it's pulling "limited quantity" of 24-packs of 20-oz bottles "due to the potential presence of foreign material in some bottles," with customers to be offered full refund. Similarly, CVS drug chain issued memo to store mgrs over past day or 2 advising that Coca-Cola Refreshments rep will be visiting to replace withdrawn Dasani, in interim filling coolers with 20-oz Smartwater. As far as we can see, glitch doesn't pose safety issue and seems limited to areas surrounding NYC. In city, issue compounds transition headaches being suffered by CCR, which picked up Vitaminwater and Smartwater brands from indie house Big Geyser a few weeks ago and seems to have lost, at least temporarily, considerable presence in market, with branded coolers sometimes filled with rival bottled water brands and out-of-stocks appearing more frequent.  

Owens-Illinois, largest glass supplier in world, is adding to its holdings with deal to purchase Vitro, largest glass supplier in Mexico. Deal for $2.15 bil includes 5 Vitro plants in Mexico and 1 in Bolivia, with total workforce of about 4,700, noted Nasdaq. O-I/Vitro count Coca-Cola, PepsiCo, Constellation Brands, Heineken and Diageo among customer roster. Once deal closes in about a year, O-I expects Vitro biz to "add annual revenue of $945 million and adjusted EBITDA of $278 million."  

At big reveal last night, Keurig Green Mountain unveiled long-awaited Keurig Kold systems but startled some analysts with high price and extended rollout plan, prompting some to dial back revenue expectations and sending shares skidding 7% in early trading today. New units priced at $299-369 at retail will be intro'd in "deliberate" manner, said vp/gm Tara Murphy, in order to drive installed base before pods are widely distributed at retail. They'll launch this fall on Keurig.com and hit retail shelves in "select" major metros in time for holidays. Full national retail distribution won't occur until a year later. Tho machines' pricing is undeniably in premium range, it tested well with consumers, Murphy insisted, and co will offer monthly payment plans. Pods initially will be offered in 16 brands, from partners Coca-Cola and Dr Pepper Snapple Group as well as 6 newly created Keurig brands, and sold in 4-unit boxes at 99 cents to $1.29. In synch with some consumers' yen for portion control, bevs have been formulated so that most come in at 100 calories or less per 8 oz. Packaging of machines will prominently herald breadth of brands and bev types available.

Tho cmo Mark Baynes wasn't ready to show ads yet, marketing will support core premise of "Your favorite drink, perfectly fresh at the touch of a button." Visuals will attempt to offer stunning visual representation of making of bev, with "stylized, luscious footage of drinks" and "surprising, elegant croppings of Kold." With consumers proving responsive to portion-control packs like minicans at retail, that will be one theme struck in Kold marketing, via spec slogans like "Calorie counters rejoice." Others will stress variety ("Diversify your liquid assets") and convenience ("All the fizz without the fuss," "Fridge space is for leftovers" and "More to like. Less to lug.")

Murphy, engineer by training who'd segued into brand mgmt at P&G and Reckitt Benckiser before arriving at GMCR to honcho Kold project, said machine delivers 8-oz bev at 39 degrees F in 60 seconds. It doesn't need CO2 canister but rather employs 2-chamber pod with syrup and carbonation beads that release gas when in contact with water, seemingly conferring edge over rival unit from Sodastream, which has struggled with logistics behind CO2 canisters. Pods employ #7 plastic that can be recycled in some areas.

Keurig ceo Brian Kelley cautioned his visitors that co expects to sell hundreds of thousands of units in first 12 months, not millions, and that even at retail price that some view as elevated, GMCR likely will have to subsidize machines as it builds consumer base. Kelley wouldn't disclose extent of investment and resulting losses in 2016, deferring discussion until Q4, when co normally offers financial guidance for new year.

BBI participated in event only by Webcast, technology that isn't yet robust enough to allow for bev tasting, but analysts who attended showcase pronounced flavor generally good, particularly for full-calorie entries. Bernstein's Ali Dibadj said brewers and pods both seemed "a bit pricy" and pronounced both brewer and pods as big, 60-second timeframe long and taste of diets "off," tho regular Coke and others were good. This from Goldman Sachs' Judy Hong: "Investors are likely to be concerned about the pricing and timing of Kold system, but Kold has been a show-me story anyway . . . We were generally impressed by Kold itself as beverage taste was high quality (both for partner brands Coke, Diet Coke, Dr Pepper and GMCR-owned brands), temperature was cold and was easy to use."

Initial range of bevs will derive from partners Coca-Cola and DPS, and Keurig's own new brands, starting with 6: Red Barn craft soda made with cane sugar; Flynn's cocktail mixers; Waterful lightly flavored, zero-calorie water; Flyte sports drinks; Tierney's iced teas in both still and sparkling form, and Seraphine zero-cal seltzer in Mediterranean flavors. GMCR also is developing 2 mixer brands that will be available via digital channel for holidays and at retail next spring: Rita's & Tina's for "girl's night in" and more elegantly crafted Union St Lounge.

Kold began development 5 years ago, and by now has been issued 50 patents globally, with 100 pending, earliest protected thru 2031. GMCR has been working with its investor and partner Coca-Cola for past 16 months. (Speaking at Goldman Sachs Consumer Staples conference earlier in week, Coca-Cola N Amer prexy Sandy Douglas noted that KO itself had tried several times without great success to come up with home machines before teaming with GMCR.)

Ceo Brian Kelley argued that Keurig Kold will take different tack than co's hot systems. It benefits from fact that Keurig by now is established brand, and should be easier to globalize than hot initially was because of more uniform taste profiles of cold bevs, as well as global strength of partner Coke. Challenged on pricing, he insisted he's "very confident" it will work, on grounds that consumers view Kold as entirely new capability, vs Keurig hot brewers that simply represented upgrade over hot-coffee-making capability consumers already possessed in their homes. "This is terrific new technology and consumers tell us that," he asserted. Co initially will target affluent early adopters and large families with heavy cold-bev consumption, then move toward more mass target as costs come down and machines are more fully distributed.

Data proffered by Kelley made it clear that Keurig system has had fragmenting effect on coffee segment, where top 5 brands represent only 28% of biz, compared to 64% in conventional format. He doesn't expect that to be different on cold side, where top 5 CSD brands account for 53% of biz.