Ongoing turnaround at Celsius Holdings reached another milestone this week as Fla-based co reported first profitable quarter, eking out net profit of $127K on 57% revenue rise to record $4.59 mil in Q4. The modest profit reversed $494K loss the year earlier. For full year, marketer of "negative calorie" drinks scored 38% revenue rise to $14.61 mil but slightly widened loss to $2.16 mil from $1.83 mil for 2013 fiscal year. As in recent quarters, ceo Gerry David pointed to balanced growth: 74% gain in domestic sales was comprised of 71% gain at retail, 212% in fitness channel and 17% growth on Internet, recovering from slight stumble there in prior qtr. Overseas biz grew 45% as co activated Brazil market in Nov, move that should provide growth engine overseas thru 2015, said Gerry.  

Transaction announced on Fri under which Chicago's Central Beverage will be acquired by Lakeshore (BBI, Feb 27) will expand service footprint for cos' broad portfolio of NA brands, while allowing Central's mgmt trio to focus all their attention on those NAs, ceo Donna Spagnola told BBI today. As reported, major Bud player Hand Family Cos, whose Chicago footprint was assembled from former River North and City Beverage cos, will pool both distributors' NA brands in joint venture operated by Central partners Spagnola, Mark Muench and Patrick Savaiano, which are estimated at 2 mil cases.

In interview this morning, Donna stressed that both beer and bev brands will be delivered off combined beer fleet out of Lakeshore's 4 area warehouses (Central's will be closed) rather than spun off into separate entity as BBI suggested Fri. Only thing separate will be ownership, via jv. Result will be that NA suppliers who've struggled to find DSD option in areas like central Ill and suburbs to north and NW of Chicago now will have Lakeshore as option as it expands footprint for NAs. Throughout territory, they'll benefit from strength of Bud and other key beer brands in retail chains, she said. Spagnola and her 2 partners will handle brand strategy, chain calls and other activities behind NAs, while helping for a spell with transition on beer side. Move may also offer boost to Midwest Beverage Group, informal alliance of heartland DSD houses in which Central has been active, by filling in key void, central Ill. That should enhance appeal of network that took hit when Ohio house and MBG member Buckeye exited biz last year.

Central currently boasts broad array of NA brands that aren't aligned with major strategic players, including Sparkling Ice, AriZona Iced Tea, Reed's, Xyience Xenergy, Cabana Lemonade and Purity Organic Juice, as well as some that are, including Nestle PureLife, Nestea, Nantucket Nectars and Izze. Spagnola expressed particular optimism about higher-pH bottled waters, with Aquahydrate, Essentia and Eternal Water all in fold, and cold-brewed coffee, with High Brew in mix. Lakeshore's NA portfolio includes Nestle's Nesquik and the A-B-aligned brands Monster and Icelandic Glacial, tho Monster is expected to make transition to local Coke bottlers soon. So far, Central has only distributed shelf-stable brands, and with region's Whole Foods stores tilting toward natural broadliner UNFI, Donna sees no immediate reason to add refrigeration capability to fleet, despite promise shown by some refrigerated categories.

Chicago has been hotbed of distribution activity in recent years, with quite a few beer deals, as well as designation of MillerCoors powerhouse Reyes Group as future Coca-Cola franchisee for Chicago metro. That deal is well along, and some sources believe the new partners are discussing other territories, too.  

Moving ahead on plans to offer diversified array of brands, Mix 1 Life has signed letter of intent to purchase No Fear energy brand from Shadow Beverage & Snack LLC for "aggregate" $12 mil. Regulatory filing indicates letter was signed last Thurs with closing anticipated by Mar 31. Not clear how much of purchase will be paid in cash. No Fear, recall, once was among array of energy brands marketing by South Beach Beverage, and went to Pepsi along with core SoBe brand. Shadow itself is partly funded by independent Pepsi bottlers looking to boost innovation in sector. Mix 1 Life's core biz has been protein drink line purchased from Hershey.  

As anticipated last year, Cleveland-based Avitae USA finally is ready to add a bit of flavor to its caffeinated waters, with debut at next week's Expo West of quartet of essence variants within its subline containing 90 mg of caffeine. New entries, tested vs alternatives at Ohio State's sensory lab, are shipping imminently in Pomegranate Açai, Tangerine, Blackberry and Strawberry Guava flavors. Prexy/ceo Norm Snyder told BBI that it's initial prong of innovation push that will bring other ideas to brand's 45-mg and 125-mg sublines. The flavor extensions are produced from purified water, caffeine derived from natural green coffee beans, natural flavors and citric acid, with no sweetener. They respond to frequent consumer and retail customer requests, arriving at time that Snyder has moved co to more sustainable financial footing since coming aboard and is ready to eye brisker expansion now.

Tho Snyder doesn't deny communicating varied uses of caffeinated water poses a challenge, he said performance in grocers has been encouraging. Just in past few weeks, brand has entered 1,300 stores in chains such as Albertsons, Mariano's, Giant Eagle, Meijer, Giant, Safeway, Jewel, Wegmans, Shaw's and Smiths. It's in Whole Foods' Mid-Atlantic div, which extends from East Coast into co's core heartland territory. At this point, on grocery side, only key void remaining is Southeast. But co is rethinking push into c-stores, after seeing that energy-seeking shoppers rarely gravitate to water door, where Avitae is shelved, rather than energy door. "We need to get out of the water door," he said. "We can get away with that in grocery, but not in convenience." Encouragingly, 90-store test in Target has gone well enough to be extended. Internet biz is growing, and co is pushing hard at foodservice venues at healthcare providers and college campuses.  

Cap-dispensed segment over past year or so has drawn more attention for some of its apparent casualties, including Activate in core US market and 989 On Demand. Among other broadly targeted brands, VBlast is hangin' in there, and Karma is in expansion mode on geographic territory, product portfolio and licensing side. At Natural Products Expo West in Anaheim, Calif, next week, Rochester, NY-based Karma will intro line of shelf-stable probiotic bevs that move it beyond enhanced-water realm where Vitaminwater's endless deals continue to undermine premium alternatives while taking full advantage of cap's hermetic seal. Meanwhile, cofounder CJ Rapp confirmed to BBI that it's signed 2d licensee for its cap, Canadian co called BioSteel, for workout line that boasts range of pro athletes as endorsers. That suggests another side of venture may be building momentum.

Unlike some cos playing in cap-dispensed space, Karma has been content to grow at steady rate and operate under radar. By now, CJ told BBI, it's built sizable business in Canada, thanks to strong distributor in Lassonde and lesser rate of discounting by Vitaminwater in that market. Couche-Tarde and Petro Canada c-store chains are among key customers there. With biz particularly strong in western Canada, that's encouraged brand to move beyond primarily eastern footprint in US into West Coast states, opening discussions with potential DSD partners there. Co boasts 100+ DSD partners currently, many of them in Northeast. In US, Rapp cites as points of strength such retailers as Circle K in NC, Meijer in Mich, and airports in NY, Newark, Philadelphia and Toronto. Brand will launch in Australia next month.

With enhanced water segment challenged by pricing environment created by Vitaminwater, Karma is aiming to buttress its presence in more premium segments, starting with probiotic space, an area that's been explored in cap-dispensed format by others such as kefir player Lifeway and medical team in Mass under GoLive brand (BBI, Mar 12, 2012). Each 18-oz bottle boasts 2 bil cultures, via BC-30 product sourced from Ganeden. It launches in Apple Cinnamon, Blueberry Lemonade and Berry Cherry flavors. They'll be priced at premium, $2.49-2.99, vs core entry that goes out at $2.49 promoted at 2 for $4.

Separately, co has been flogging proprietary cap technology, which sports airtight seal that makes it appealing to potential clients involved in medical, pharma and chemical applications, several of whom are in discussions now with Karma, CJ said. Product categories with pedigree in powder such as protein are logical candidates for cap-dispensed RTD extensions, he argues. Karma produces and fills caps itself in pharma-grade clean room in Rochester area, avoiding syndrome of rivals who must import caps, fill them at 3d-party site, then transport them to bottler for completion of mfg process - a particular challenge to those who use color-coded caps and must balance those inventories. Co is marketing technology via unit called Karma Cap Co (KarmaCapCo.com).

First licensee was Dallas-area marketer of pre-workout drinks called ProSupps, which uses it for items like Mr Hyde pre-workout "amplifier." Another recently launched item, a cap-dispensed sports drink from Toronto-based BioSteel Sports, appears to employ similar cap to Karma's, and Rapp confirmed yesterday that is indeed his, tho he cited confidentiality agreement in declining to offer any details. Co's Web site, BioSteel.com, indicates that item is endorsed by likes of golfer Hunter Mahan and NBAer Tyler Ennis, pushing "Drink the Pink" motif behind liquid that turns pink with release of nutrients at moment of consumption. "Peel. Push. Shake," declares supporting copy, referring to Karma Cap's user-friendly design.  

Here's unusual deal that could roil DSD scene in critical market for NA brands: Chicago beer house Lakeshore Beverage is acquiring Central Beverage's alcoholic bev distribution rights, with both cos' NAs to be spun off into joint venture operated by Central Bev prexy Donna Spagnola and her partners Mark Muench and Patrick Savaiano. Obvious focus of transaction is Central's beer brands, which include Pabst, North American Brewing and such compelling craft marques as Bells, Rogue and Schlafly. Year-old Lakefront is part of Hand Family Cos beer empire based in Tenn, and comprises 5 units welded together from former River North and City Beverage distributorships which manage about 23.5 mil cases via payroll of 650. Central Bev numbers among its NA brands Sparkling Ice, AriZona Iced Tea, LaCroix water and Everfresh juices, and has been key member of Midwest Beverage Group, informal alliance of indie DSD shops in heartland states like Ill, Ind and Ohio. Key question for suppliers will be whether Central as jv is stronger or weaker as it garners increased focus but loses strength lent by the beer brands. In statement, Donna argued that "we are pleased and excited to be able to provide our suppliers with a strong new partner to foster their continued growth."  

Monster Beverage shares were soaring in trading today after Corona, Calif, energy drink power blew doors off 4th qtr, scoring 43.2% operating income jump to $192.9 mil on 12.1% net sales rise to $696.3 mil. Core biz showed strong fundamentals and int'l sales, for which the Street harbors great hopes as Coca-Cola partnership unfolds, tilted into black to tune of $13.8 mil, reversing $4.4 mil year-earlier loss. Qtr's EPS of 72 cents handily outran consensus 59 cents. And as ceo Rodney Sacks reminded, co's sales momentum occurred in otherwise sluggish bev biz.

On conference call last night, Sacks also confirmed that, with neither US nor overseas gov'ts expressing objections to deal, termination letters had been sent to Anheuser-Busch wholesalers on Feb 9 to prep for transition to Coca-Cola bottling network, as first reported here (BBI, Feb 10). That transition will occur on various dates beginning next month, a reflection, it's presumed, of varying advance-notice provisions of individual Bud houses' contracts. But Rodney was vague on when transaction with Coke will close, just saying sometime in 2d qtr after closing conditions are met. That deal, of course, calls for KO to take minority stake in MNST while sending its energy brands to MNST and in turn receiving MNST's non-energy brands, including Peace Tea, Hubert's Lemonade and Hansen and Blue Sky natural sodas. MNST already has commenced negotiations with some int'l Coca-Cola bottlers, Rodney disclosed. No mention by Rodney of litigation effort by group of 60+ Bud houses, which is believed to have moved to individual arbitration proceedings in Calif, where Monster is based.

"Impressive Q4," heralded Morgan Stanley's Dara Mohsenian, citing "greater optimism surrounding US topline performance and international profitability, partially offset by a later deal closing." Wells Fargo's Bonnie Herzog identically headlined "Impressive Q4," offering as her bottom line: "We remain very encouraged by MNST's long-term growth prospects, particularly in international markets. However, we think valuation reflects most of the upside, particularly given the potential for minor hiccups as it transitions to the Coca-Cola system."

For full year net sales were up 9.7% to $2.5 bil and operating income soared 30.5% to $747.5 mil. Co continues to discuss options for returning some of cash to shareholders, vice chmn Hilton Schlosberg said. Internally, some employees are hoping stock split may be imminent, too, as shares head beyond $140, up $15 over last night's close as of noon today and hitting 52-week high.

Green Can Still Sells; Ultra Now #2 Call ran a bit shorter than usual and offered a bit less color than usual on individual segments' performance. Sacks said core Monster green can continues to outperform overall segment, and zero-calorie Ultra now is ensconced as solid #2 brand, with last fall's Sunrise entry embraced by consumers and Citron flavor now joining portfolio. Repositioning efforts have benefited sales of M80 and Khaos (rebranded as more straightforward Juice Monster) as well as Punch subline. This time Sacks didn't offer usual roadmap of upcoming overseas expansion targets, as strengthened alliance with KO prompts rethinking of potential partnerships. Among top overseas performers have been Japan, Germany, Great Britain, Greece, Netherlands and Chile, he said. Generally strong performance in Asia was partly offset by softness in Australia.

No Glitches in Transition So Far, Says CEO Tho anxiety appears to have been mounting among Monster troops as anticipated closing date slips and retailers' spring resets approach, Sacks offered assurances to investors that, at least so far, things are proceeding smoothly. Carrot-and-stick approach - whereby MNST will repurchase any excess inventory from terminated Bud houses, who'll also suffer hit to buyout if sales performance drops off - seems to be panning out so far. Co has "not experienced any notable disruption from the A-B distributors," he assured Wall Street. Trends from Bud houses before notice continued into Q4 and even first 2 months of 2015. Meanwhile, co will make sure inventory is in place at Coca-Cola branches so new distribs can hit ground running. "Going forward, obviously, we'll see how it goes," he allowed. As previously noted, transition should result in Monster being carried exclusively by Coke network throughout US except for Kalil in Ariz, Big Geyser in NY, and perhaps a few small pockets.  

Last year we saw advent of bev package offering portal to augmented reality, behind iced tea pegged to Jay Z's 40/40 Club and "melodic beverage" touted by Mariah Carey. That brand appears to have sputtered and is now barely a presence at retail. But on alc-bev side Diageo is debuting another package that promises to "completely change the role of a bottle in the consumer experience." Spirits marketer's Johnnie Walker Blue brand has teamed with printed circuit maker Thin Film Electronics ASA to offer "smart bottle" that employs printed sensor tags that enhance flow of personalized communications to consumers who activate tags with their smartphones. Bottle is to be unveiled next week not at food or bev show but at Mobile World Congress in Barcelona.

Thinfilm's proprietary OpenSense technology, created with Diageo's 6-month-old Diageo Technology Ventures unit, exploits smartphones' Near Field Communication (NFC) capabilities, allowing Diageo to track bottle movements across supply chain, in-store and to point of consumption, with sensor tags remaining readable even when factory seal has been broken, thereby providing additional layer of security in protecting authenticity of the product, Diageo said in announcement. The technology also makes it possible to send consumers targeted marketing messages, whether at retail or after purchase, including promo offers, cocktail recipes and other branded content.  

As it moves toward new operating structure intended to stoke innovation in more promising areas outside center store aisles, Campbell Soup reported 2d qtr decline in net sales of 2% to $2.23 bil, while adjusted EBIT plunged 17% to $312 mil. "Over the last 3 years, we've made solid progress advancing our dual mandate to strengthen the core business and at the same time expand into faster growing spaces; however, it has not been enough in this more challenged environment," said ceo Denise Morrison, in familiar refrain, as co embarks on new scheme to focus on fewer but bigger innovations, many of them in health & wellness realms like organic soup, cold-pressed juice and juice/veggie blends. The 2% sales decline was compounded of higher promo spending, particularly in baking/snacking segment (2 points) and currency issues (2 pts), offset partly by volume/mix gains (1 pt) and price and sales allowances (1 pt). Organic net sales were flat, co indicated.

Sales of US Beverages div sagged 4% to $169 mil, with declines in V8 Fusion line more than offsetting gains in V8 Splash and V8 + Energy. Unit's operating earnings fell 35% to $20 mil. Bolthouse & Foodservice div scored 2% gain to $364 mil, and operating earnings fell 28% to $26 mil. But that masked what CPB brass said were double-digit gains in RTD bevs and salad dressings, offset by softness in natural ingredients sold to Japan and issues in carrot growing.

On innovation front, co this month started shipping new V8 Veggie Blends, which was devised with help from Bolthouse Farms side of co. Line is intended to offer more value-oriented alternative to pricy superpremium juices while jumpstarting V8 biz with greater array of single-serve items, now just 10% of mix vs 50% or so of most other bev brands. Recall that CPB has been rebuilding route to retail for immediate-consumption bevs in wake of dissolution of Coca-Cola distribution alliance a coupla years ago, and at NACS show last fall showed bevy of new items, even enhanced waters, to entice them. (It seems not all of those are going to make it to market.) On call today, Morrison said co has banked some marketing funds from late last year to devote later this year to supporting Veggie Blends intro. Co also is expanding its recently intro'd Bolthouse Kids line of fruit and veggie tubes, bottled smoothies and cut carrots, while readying trendy new flavors for Bolthouse Farms fresh line including push into almondmilk with Blueberry Banana Almondmilk.

Also key launch on horizon is cold-pressed superpremium juice under Bolthouse Farms brand called 1915, apparent reference to year of co's founding in Grant, Mich. It's presumed but not confirmed that entry will employ high-pressure processing like Evolution Fresh, Suja and BluePrint; no formal word, either, on whether it's organic or not. Logo renders 2d numeral "1" in name as narrow shovel. No response yet to request this morning for more info from co.  

SodaStream Int'l this morning offered progress report on its transition from purveyor of home-produced sodas to health & wellness facilitator, while disclosing that it's ready to draw curtain on system that can do both cold and hot bevs.

Financials reported this morning weren't pretty picture, but had been signaled last fall when Israel-based co announced transition to new positioning. Revenues plunged 25% to $126.5 mil but net income rose to $7.5 mil from $700K a year earlier. Americas segment dropped 49% to $37.2 mil in revenues while most established market, Europe, slipped 7% to $66.9 mil. In US that's been focus of so much branding and retail activity in recent years, revenues sank 55% to $30 mil, with machine sales dropping 72% to 192K units, flavors plunging 64% to 1.5 mil units and gas refills essentially flat. The low machine sales reflect co's decision "not to chase low-margin sales like we did a year ago," said ceo Daniel Birnbaum, and in turn impacted flavor sales, as consumers typically buy a bunch with their new machines. Also a factor was pullback in ad and promo spending as co turns its back on soda identity and refines new message as purveyor of "Water made exciting."

Reflecting upheaval in US, Birnbaum reported that US chief Scott Guthrie had departed to pursue other interests, with Birnbaum himself stepping into role for now. Co is close to making offers for several sr mgmt posts in US, tho, he assured analyst who was concerned ceo is stretched too far at critical juncture. SODA has closed marginal retail accounts, including 1,700 unproductive Walmart doors, ending year with 15K locations in US. It's working to expand gas exchange program, both online and at bricks-and-mortar locations.

In earnings presentation materials and discussion this morning, word "soda" had been banished from everything but corporate name as SODA pushes positioning as "Water made exciting." To support this positioning, co has developed new portfolio of sparkling water flavors made with natural ingredients and no artificial sweeteners, grouped in 4 platforms that could define new-age set in stores: Fruits, zero-calorie Zeros, Essence and Water Plus items enhanced with vitamins, fiber, protein or minerals. SODA also has collaborated with The Elm chef star Paul Liebrandt to devise line of gourmet flavors in flavor clusters grouped around flowers, herbs and fruits, in flavors like Green Apple & Cucumber and Wine Basil. The new flavors will hit US during Q3.

In describing marketing changes, Birnbaum took pages right out of new-age bev playbook in describing move to exotic flavor combos and nutrients, and decision to tilt away from above-line media in favor of focus on cultivation of influencers like nutritionists, doctors and athletic trainers. "We obviously didn't run another Super Bowl ad and intend to stay away from big-ticket items" on ad side, said ceo. As co disclosed last fall, brand will adopt entirely new look and feel, with even SodaStream brand name de-emphasized, as co pursues new water identity. What Birnbaum called brand's new "marketing assets," including packaging, digital and advertising (if any), will be disclosed on next earnings call 3 mos from now.

SODA is not abandoning classic soda flavors, but reformulating and rebranding them under Fountain Style moniker, with significant taste upgrades, Birnbaum promised. Crucially, he noted that co's key partners from its now-concluding days as soda marketer have kept the faith as he moves to new-age positioning. He cited "productive conversations with each of them and all will be moving forward with us as we change course." Pepsi test in Fla late last year has been extended into 2015.

Birnbaum also disclosed that, at next week's housewares show in Chicago, SODA will display multifunction unit that can produce both hot and cold bevs, tho he's not ready to disclose launch date yet. That should do a bit to counter fear among some SODA observers that brand might find itself swamped by dual system from Keurig/Bevyz. Pressed on conference call today, Birnbaum shed just a bit of light on entry, saying Yves Behar-designed machine is "not a spinoff from coffee or a caps type of single-serve solution, which I'm not sure is applicable for a cold beverage environment" and will be able to interact with users' smartphone and with Sodastream ease replenishment of consumable items. It will have larger footprint than SodaStream countertop units because of need for cooling/heating and internal carbonation chamber and will offer buyer the option of connecting directly to household's piping or to have water chamber. "It's going to change the landscape and we can't wait to show it," Daniel promised.