Score another victory for pesky state attorney generals: Vitamin Shoppe nutrition chain has agreed to drop items containing BMPEA in Oregon and Vermont after AGs there turned it into issue. Move by NJ-based chain took form of assurance of voluntary compliance (AVC) filed in Ore and assurance of discontinuance (AOD) filed in Vt, with co agreeing not to sell products that contain BMPEA nor the botanical ingredient acacia rigidula, which has been deemed to be at risk of containing BMPEA, unless "adequate testing" determines it to be safe. Vitamin Shoppe emphasized that it had moved to remove from its stores and Web site all items containing acacia rigidula prior to receiving notices from those AGs . . . Noodles & Co fast-casual chain has become latest to say it will drop artificial colors, flavors and preservatives from its menu, following in footsteps of rivals like Panera Bread, which is dropping 150 artificial ingredients by 2017, and McDonald's, which is moving away from chicken raised with antibiotics.  

Revenue growth stubbornly eluded Jones Soda in first qtr, stuck at $2.9 mil, but that masked a 6% increase in case volume and a narrowing of net losses, prompting ceo Jennifer Cue to declare the Seattle co "on target with our growth strategy." Net loss narrowed to $278K from $539K, in keeping with Cue's mantra of laying platform for profitable growth. With 23% of co sales now deriving from Canada, weakening Canadian dollar created significant foreign exchange impact; excluding that factor, revenues would have been up 3%, co noted. And that volume gain was 3d consecutive one, as JSDA turns focus from getting costs in line to fomenting topline growth.

Among vehicles co hopes to ride to greater growth is new fountain program, which has drawn interest from some unidentified indie restaurants, tho not yet any big chains, which often are locked into programs with big bevcos. It will try to drive interest with appearance at upcoming Natl Restaurant Assn show in Chicago, pushing customer-submitted photos on fountain equipment as unique Jones-like twist and offering cane-sweetened flavor as alternative to regular HFCS-sweetened flaves. Co will push forward on its cane-sugar-sweetened line with return of Caps for Gear program offering GoPro cameras, Diamondback BMX bikes and Jones-branded skateboards to loyal consumers. Jones Stripped natural soda will return with incentive offering swag like Polar CS500 bike computers. It's teaming with Seattle-based online retailer Zulily to boost Web biz.  

Tho natural-channel mainstays Whole Foods, Sprouts Farmers Market and United Natural Foods may all have reported disappointing quarters this week, WhiteWave Foods motored on, riding consumer interest in its nutmilks and other organic products to score 10% surge in net sales to $911 mil and 17% boost in operating income to $75 mil. Earnings per share came in at 24 cents, besting co's prior guidance by 2 cents. In week where shares of cos from Keurig Green Mountain and Monster Bev to Whole Foods were tanking, shares of Dean Foods spinoff soared to record high.

Chmn/ceo Gregg Engles termed period "very strong first quarter" despite currency headwinds and challenging growing season in Southwest for organic leafy greens used by its Earthbound Farms unit.

Biggest segment, Americas Foods & Bevs, scored 15% net sales rise to $641 mil. Among its 3 component platforms, Plant-Based Foods & Bevs scored 20% sales gain, driven by higher volumes and inclusion of dessert maker So Delicious. Nut-based items are viewed as particular bright spot, rising 18% as almondmilk continues to score gains and recently intro'd Silk Cashewmilk hits market with a splash. New Silk item boasts fastest distribution build in Silk brand's history, garnering 85% grocery ACV, with Vanilla and Chocolate flavors about to enter mix. Cashewmilk has reached about 4% of overall nutmilk category, in which WWAV claims to hold 51% share. Now Denver-based co is hoping to take non-dairy excitement to new realm with relaunch of dairy-free yogurts, currently less than 1% of category.

Premium Dairy platform (mainly Horizon organic brand) scored 15% sales growth, outgrowing category's 8% rise, tho that was mainly result of price actions, 3 hikes over past 18 months, as co recovers rising costs during supply-constrained period. Latest increase hits in a week or so. And 3d platform, Creamers & Bevs, scored 11% growth in Q1, playing in broad range of sub-segments from those served by mainstream Int'l Delight and Dunkin' Donuts brands to plant-based creamers and half-and-half.

Engles and his colleagues expressed bullishness about recently forged joint venture in plant-based bevs in China, tho they said it's too early to assess prospects as they experiment with pricing and positioning at small scale. So far, partners have intro'd walnut and almond items in several key markets, and big question will be whether to move ahead with soymilk product too, at time more prosperous, time-pressed Chinese consumers seem ready to evolve from making soymilk at home to packaged formats. "Very modest investment but great capabilities there," is how Engles assessed venture.

No mention in mgmt discussion of co's modest investment a few months ago in Austin-based HPP juice play Daily Greens, viewed as carrying synergies with Earthbound Farms produce unit. Asked about M&A generally, Engles expressed enthusiasm for "incredibly dynamic" range of emerging brands in market, citing valuation expectations as main barrier to doing deals. "Lots of opportunities of all kinds," he enthused. That's been refrain from other ceo's, like Dr Pepper Snapple Group's Larry Young, at time recent deal values and structures are prompting increasing talk of bev bubble.  

Tho co had warned there might be temporary disruptions during transition to Coke bottling network in US, Monster Beverage shares were down 9% in mid-afternoon trading today after recently torrid co disappointed investors with softer-than-anticipated Q1 performance.

Corona, Calif-based co reported 9.5% gain in net sales to $587 mil and 16.8% gain in operating income to $173.9 mil, tho that drops to $7.6 mil once $206 mil in termination costs of Bud distributors are included, partly offset by $39.8 mil in accelerated deferred revenue in connection with those distributors. Earnings per share, at 66 cents, came in 2 cents below Street's consensus view.

Tho deal with Coca-Cola on nearly 17% investment in co isn't expected to close until early Jun, per chmn/ceo Rodney Sacks, MNST is well along in transitioning US distribution to Coke system, so far moving about 84% of targeted volume to Coke, with another 5% expected during May. Co also is deep into discussions with Coke's sprawling network of overseas bottlers about potential shifts there.

Sacks acknowledged that Q1 had suffered negative impact of domestic transition of Monster Energy brand to Coke network, which had been expected, but indicated that transaction has also had significant impact internationally as partners wonder whether they're about to be dumped. Usually robust growth in int'l sales reversed to slight decline, $113 mil vs year-earlier $115.8 mil, tho currency issues exacted $12 mil hit. Unlike situation in US, deal sets up KO as preferred partner overseas but doesn't mandate any specific shifts. Still, there's "a little more skepticism among (overseas) distributors about what the future will be," which has affected their investment in brand, general approach and attitude, Sacks acknowledged to questioner on conference call last night. Passing remark by Sacks that Brazil offers "opportunity to grow much more than we have" is likely to be interpreted in some quarters as signaling potential jeopardy of alliance there with beer-and-soft-drink giant AmBev, tho Rodney certainly didn't go there. While shifting more overseas distribution to Coke system would provide greater alignment among partners, those talks are complicated by question of whether bottler would also produce brand locally, which brings its own set of issues. On domestic side, from what MNST brass can tell at this early stage, transition has "gone relatively smoothly." Still, the ongoing uncertainty led Sacks to refrain from offering, as he usually would, any insight into performance in month, Apr, since Q1 closed.

Recall that Red Bull took 5% blended price hike at beginning of year; speaking at NACS c-store show last fall, right after Red Bull announcement, Sacks had suggested MNST would be inclined to follow price hike, but not likely until its transition to Coke had been accomplished (BBI, Oct 16). He reiterated that view on call last night, saying co plans to take hike later this year, probably similar in magnitude to Red Bull's, with specific amount to be finalized early this fall.

Despite broad selloff among investors today, analysts who track MNST seemed to take results in stride. "Slight Q1 Miss, Although Positive Forward Outlook with US Price Increase," headlined Morgan Stanley's Dara Mohsenian. And this from RBC Capital's Nik Modi: "Short-Term Disruption, Long-Term Opportunity." Some commentators, tho, couldn't resist taking a poke at Coke, noting that shares of its 2 key strategic investments, Monster Bev and Keurig Green Mountain (BBI, May 7), had scored sharp declines after reporting disappointing Q1 performance this week.

In syndicated scanner info recited by Rodney on call, it was clear that rivals Red Bull and Rockstar had outperformed Monster in some channels, particularly the key convenience-and-gas realm, where Monster's 7.3% gain over past 4 weeks was outmatched by Red Bull's 16.5% gain and Rockstar's +13.2%. In energy/coffee sector, Java Monster's 8.5% gain was handily outrun by 17.1% lift of Pepsi/Starbucks Doubleshot entries. Monster's ongoing distribution transition would be obvious factor in lag, but Sacks also cited such issues as Red Bull's price increase and tradeup activity to new flavor entries, as well as differences in timing of key promos - first trimester of year for some rivals, 2d trimester for Monster.

At brand level, core green can continued to perform well, as did Zero Ultra, but texture glitch on protein-intense Muscle Monster required reformulation and relaunch, with revamped graphics. MNST brass claims to be pleased with reception of revamped punch and juice lines, as well as new Ultra Citron and Rehab Peach Tea + Energy extensions.

Among other items affecting Q1 results were $12 mil foreign exchange impact, $4.9 mil in expenses related to defending brand against attacks on safety and marketing, and $3.6 mil in professional services and other costs related to KO transaction.  

Is Whole Foods lookin' to appropriate some retail cues more like its lower-priced, more approachable nemesis Trader Joe, on one hand, and from stylishly tech Apple stores on other? That's among speculation following disclosure last night by Austin-based natural food retailer that it plans to create new brand that's more accessible to value-oriented millennial shoppers who find its prices unreachable.

On co's Q2 earnings conference call, founder/ceo John Mackey described initiative as "new uniquely branded store concept unlike anything that currently exists in the marketplace" that offers "our industry-leading quality standards at value prices" in format with "modern streamlined design, innovative technology and a curated selection." New chain developed by separate team being established at co's hq "will offer a convenient transparent and values-oriented experience geared toward millennial shoppers, while appealing to anyone looking for high-quality fresh food at great prices," Mackey added. New units will be smaller in size, less capital-intensive in buildout and will leverage distribution infrastructure and local partnerships established for core stores. Loyalty card will be valid for both marques. He said leases already are in negotiation, with view to first stores to open next year, followed by rapid expansion thanks to design and product assortment that's more standardized than in famously independent operating Whole Foods stores. He promised more word, including name of chain, before Labor Day; co wouldn't have revealed even this much yet, except that Mackie knew word would leak as store negotiations proceeded, he said.

Disclosure comes as co motors on toward target of 1,200 stores, with 420 currently open and another 114 in development. Tho target has aroused trepidation from some investors at time that mainstream grocers are posing increasing threat on natural/organic front, WF brass has argued there's plenty of room in market, and say their own store metrics suggest they handily outperform general grocers in sector. Among current stores, co-ceo Walter Robb noted, 70 stores are exceeding $1 mil in weekly sales. Among in-store developments on bev side, evp operations David Lannon pointed to expanding juice bar presence as breakfast purveyor, including via partnerships with local brands JugoFresh in Miami and Vega in Vancouver. And co is approaching 100 taprooms serving beer and wine.  

Softer-than-expected sales of its new Keurig 2.0 brewers sent Keurig Green Mountain shares skidding today despite earnings per share beat. Revenue rose 2% to $1.1 bil driven by 14% unit growth in pods, but offset by plunge in brewer and accessory sales, off 23% to $106.4 mil. Operating profit was off 5% to $258 mil, partly reflecting accelerated investment in Keurig Cold cold-bev system ahead of targeted launch set for fall as it builds in brewer and pod production capacity. That investment now will come in "slightly above the high end" of previously estimated range of $50-100 mil, said cfo Fran Rathke. Long-anticipated Keurig Kold coldbev system will be showcased at investor event next Thurs. That's assumed to be key focus in co by minority investor Coca-Cola.

On conference call last night, prexy/ceo Brian Kelley acknowledged series of fumbles in transition to new 2.0 brewer. One issue was early versions were priced beyond $79-119 retail sweet spot, which co will address with launch of K200 unit online this month and at retail this summer. K200, with reservoir and emphasis on upscale design, will be promotable at $99 price. It ships May 11, a bit behind earlier target of late Apr. Another issue: pulling from market My K-Cup accessory, which allowed users to use bagged coffee in system, because it was incompatible with 2.0. That stimulated backlash among core users and is now recognized as mistake, Kelley said. "We underestimated the passion the consumer had for this" and are now bringing it back, he said. And packaging will be restyled to better dispel some consumers' misimpression that systems only handle Green Mountain and Keurig-branded coffees, signaling prominently that they accommodate 70 brands and 500 varieties all told.

Even pods' healthy growth carried several dark clouds. Tho measured channels yielded 17% growth, Kelley pointed to weakness in unmeasured channels like specialty stores, digital and Dunkin Donuts stores, knocking overall growth down to that 14% figure. The digital issue, Kelley said, stemmed from migration to SAP system that required that co unify ordering process on what had previously been separate methods for distinct Green Mountain and Keurig Web sites, now joined at keurig.com. Competitive pricing at retail meant that 14% in unit growth only yielded 7% revenue gain, to $956.6 mil. "It's competitive out there on pods, there's no question," and consumers have proved more price-sensitive than thought, Kelley said. Meanwhile, massive effort over past year to translate 25+ previously unlicensed pod brands into system to overcome 2.0 compatibility issue hindered innovation under co's own brands, effort that will gain momentum now that co is over hump. Among premium offerings coming to market are Green Mountain Organic, Green Mountain Reserve and Laughing Man items.

On org side, reorg is pending as co grapples with evolution to broader identity as multi-category bevco, Kelley indicated. Co said it's filled cfo slot for departing Rathke, recruiting former Mead Johnson cfo Pete Leemputte to post. And recently hired cmo Mark Baynes, a Nestle, Kraft and Kellogg vet, is rebranding Keurig 2.0, prepping Keurig Cold launch and working to "clarify and sharpen" co's successful Green Mountain, Donut Shop, Laughing Man and Barista Prima coffee brands.  

Boosted by big DS Services acquisition, private-label player Cott reported 49.4% boost in revenue to $710 mil in Q1, and more than doubling of EBITDA to $74 mil. Behind DS activity that's heavily weighted toward home and office delivery of bottled water and coffee, tho, Toronto- and Miami-based co showed continued progress toward stabilizing core biz, in environment that showed moderation of promo activity by big branded CSD players.

DS Services revenue rose 4.2% to $240 mil as integration of co proceeded ahead of sked, with 3-year cost synergy target now raised from $25 mil to $30 mil. Some $10 mil of that should be realized this year, vs prior estimated $6 mil. On core biz, volume edged up 1% as contract mfg biz continued to expand while easing of promo pressure from Big 3 enabled Cott to moderate its declines in private-label CSDs. Tho N Amer revenue declined 6% to $324 mil, that understates co fundamentals, since contract mfg clients typically keep ingredients and packaging on their own books, tho COT generates same profit on lower reported revenue. Results prompted ceo Jerry Fowden to herald remade co that's "a more diverse and more balanced business."

Less-aggressive promo environment on national CSD brands eased pressure on Cott's private-label offerings but wasn't enough to put its CSDs on growth footing: they slipped 6% (-5% excluding foreign exchange hit). Fowden noted that marked reduction in big bevcos' promos on multipacks of 12-oz cans was somewhat muted by continued promo activity on 2-liter PET bottles. The 12-pack cans tend to go out now at promo prices in $3.33 range vs $3 last year, but 2-liter bottles continue to show up at $1 - maybe not nearly all the time, as in 2014, but "half of the national brands, half of the time." So situation is "improved, but not back to its normal or historical position yet," Fowden assessed.

But Fowden pointed to bright side: if current level of national brand CSD promo activity is maintained, it will contain Cott's CSD volume declines to level that can be offset by growth in other segments: sparkling water and mixers, up 10% in volume for qtr, and juices and juice drinks, up 4%. Also a contributor is contract mfg biz, which added 8 mil cases to 24 mil cases won last year, putting co well on way to meeting growth target of 50-80 mil cases by 2017. So N Amer biz is in "stable to stable-plus" position now, with chance of 1-3% volume gain for year. On innovation side, co has branched out into infant formula as fertile new avenue.

Third key segment, UK, tho up in revenues, will stay under pressure, thanks to heavy promo activity by branded energy drink rivals, lower-cost competition from euro zone and temporary cost of placing inventory at 3d parties as new warehouse mgmt system is implemented.

Move to Exploit DS Brands' Fleet Reach Will Be Gradual Explaining DS acquisition to skeptical Wall Streeters last fall, Fowden stressed potential for harnessing unused capacity on DS' extensive fleet to move broader range of items to its deep base of home and office customers, a potential $100-125 mil opportunity that would also soak up capacity in Cott's own plants. First example of synergy: current launch of Sparkling Water essence water and Ice sweetened flavored water by DS' Sparkletts brand (BBI, May 6). DS fleet is carrying 3 Sparkling Water sku's (Regular, Berry, Citrus) and 3 Ice sku's (Citrus, Pink Grapefruit, Mango Orange), and will also offer 3 Sparkling Water sku's in cans and 3 sku's in 1-liter for traditional retail channel, Fowden indicated. They're all produced in Cott's facilities. With about 15% of DS home/office customer base purchasing packaged products too (meaning mainly casepack bottled water), co has set modest goal of capturing half of them with new single-serve items. Most of those customers are on 2 to 4-week cycle and products just launched in past week, but takeup so far has been encouraging, Fowden said. Meanwhile, several unidentified large and small retailers have accepted brand, too. Additional items for DS network will be launched in 2016, and more in 2017, following conservative phased approach.  

Campbell Soup, in midst of sweeping reorg to tilt emphasis to more promising segments like refrigerated juice, said 471 employees accepted severance packages, at pretax cost of about $110 mil. Most of the affected employees will stay with co thru Jul 31 . . . Nielsen Breakthrough Innovation Project has given nod to flock of bevs for 2015, all with clear energizing properties: PepsiCo's Mountain Dew Kickstart, Red Bull's flavored "Editions" and Monster Beverage's zero-cal Monster Energy Zero Ultra subline. Analyzing 3,500 brands, syndicated researcher studied items launched in 2013 that over 2-year period have had breakthrough outcomes in their categories, including $50 mil in first-year sales and no big dropoff in year 2. On alc side, MillerCoors got nod for Redd's Apple Ale.  

Closely watched bill to require health warning labels on CSDs and other sweetened bevs failed for 2d time to get thru Calif Senate committee last week. Senate bill SB 203 sponsored by Sen Bill Bonning (D-Carmel) would have required label reading, "Drinking beverages with added sugars contributes to obesity, diabetes and tooth decay," won 4 votes from Democrats on committee but that wasn't enough to go thru, LA Times reported. A similar bill similarly stalled last year in the face of intense opposition from Amer Bev Assn and restaurant groups. "We insult consumers by simplifying a complex disease and stating that sugar-sweetened beverages cause their obesity," said Dr Liz Applegate, dir of sports nutrition program at UC Davis, in testimony for ABA, Times reported.  

The 14-year AriZona Iced Tea vet Paul O'Donnell has segued to marketer of VBlast Vitamin Water cap-dispensed bevs, New York Spring Water, as vp sales. Paul, who earlier had worked at Apple & Eve and Nantucket Nectars, will work with founder Richard Zakka and his son, operations vp Luke Zakka, to expand VBlast functional line and sibling energy line called Gator Pit . . . Artisanal cocktail mixer co Powell & Mahoney of Salem, Mass, has promoted marketing coordinator Meredith Cyr to dir of marketing & commns. "From our startup through our national rollout, Meredith has been instrumental in coordinating our sales team's efforts with our broker network and multi-channel distribution strategy," said cofounder Brian Powell. In new role, Cyr will handle marketing, PR and advertising, social media outreach, sales and marketing plans and building robust online platform, co said.