After building momentum in natural/specialty stores in Southern Calif, LA-based Seven Teas is ready to expand to NY, recruiting longtime Honest Tea sales chief Dan Cavanaugh as advisor and Rainforest Distributing as DSD partner.  On phone call last night, founders Josh and Jeremy Issakarian and Cavanaugh reminded that Dan’s been informally consulting for brand for past 2 years and time finally seemed right to bring him aboard in more formal capacity after concept proved out well in LA-area natural stores.  Dan will target not just retailers but foodservice channel, including proliferating micro-markets.  BBI has noticed brand popping up at specialty chains like Westside Market in recent weeks.  In years since leaving Honest Tea, Cavanaugh has worked with brands like Kombrewcha and Orgain.

Seven Teas, recall, was launched by brothers of Iranian origin (who often go by Issak) as way to harness rich cultural associations of tea, starting with Himalayan Rose Tulsi, housed in glass bottles sporting hand-painted, die-cut labels (BBI, Apr 7 2017).  Operating out of Santa Monica as Tea Horse Road LLC, they offer 7 flavors including Saffron Mint Gunpowder, Wildflower Honey Matcha and Guava Mango Guayusa, that enable them to play in most trending tea segments.  In LA, brand has moved thru LA Distributing and broadliner UNFI, going an inch wide and mile deep, as Josh emphasized, winning strong display activity and velocity at natural channel retailers like Whole Foods, Erewhon, Lassens, Bristol Farms, Jimbo’s and Alfalfa’s.  Brand has also been able to hold on to extensive display space at Whole Foods in Mountain Region surrounding Denver.  That’s even with elevated price point around $2.99, within superpremium, glass-bottle segment where former growth engines Teavana (jv between Starbucks and Anheuser-Busch) and PureLeaf Teahouse Collection (from Pepsi) seem to have tailed off lately.

From comments gleaned at demos and other consumer outreach, the brothers say they sense that they’re drawing consumers from adjacent categories like kombucha, but brand also is winning shelf space from glass-bottle Guayaki.  Down road, once brand is further established, they’re eyeing addition of canned format as well as potential extensions into energy, fruit tea and kids’ drinks.  Info at SevenTeas.com.

With beer trends flattening, many wholesalers have been looking longingly at CBD as potential high-margin growth engine, but have stayed on sidelines out of fear of legal or regulatory repercussions.  “I have a beer license to protect” is how they often phrase that fear.  Is it warranted?  Veteran alc bev atty Marc Sorini thinks it’s relatively modest risk. 

Marc, who heads up his firm’s cannabis division, offered that view during “lightning round” of quick cannabis questions at Beer Insights Seminar in NY last mo.  His answers included some notable opinions/insights.  Asked whether legalization of recreational cannabis was inevitable, if a 3-tier system was advisable and whether cannabis should be regulated like alcohol, Marc’s brief answers were “yes,” “no” and “in certain aspects yes, but not all.”  Should beer wholesalers seek to obtain cannabis licenses and put cannabis with THC on their trucks?  “No, especially if you’re not in a recreational state.”  Even if you are, “you still have a significant federal risk and it gets very complicated.  No, I wouldn’t do it.”  How about CBD-infused bevs?  “CBD is a much lower-risk proposition.  If it’s the right CBD product not making stupid claims, yes, why not?”  While distrib advocate Mike Madigan suggested distribs may put their licenses at risk if they pursue CBD bevs before FDA clarifies rules, Marc sez FAA Act “allows TTB to revoke a permit only for violations of alcohol laws or tax laws, not an FDA law.”  Is cannabis a minimal, modest or major threat to beer/alc bev sales?  “At best a small threat.”  Why?  “Especially for beer, I don’t think there’s ever been the following statement made: ‘Dude, I’m so wasted, don’t give me a beer.’”

Since many view cannabis as “safer” than alcohol, could there be a turn towards stricter alc bev regulation?  “I don’t think there will be a huge push for that.  Although I can see people getting more tax money [from cannabis] and going ‘Why don’t we jack it up for alcohol as well?’”  Which industry is more likely to create the largest footprint in cannabis: Big Farm, Big Pharma, Big Alcohol or Big Tobacco?  “Why not Big Retail?  What if all these products end up being private-label?  That’s one thing I think people have to think about.  The other is what if it ends up looking like the wine market and it’s highly fragmented.  I think those are possibilities.”  Then, too, if cannabis “becomes a commoditized, cheap product, that’s going to favor large no-name producers creating private-label products.  You can’t predict where it will go.” 

These days bevs don’t rank very high on Campbell Soup’s priority list, now that co has hived off the refrigerated biz built around its disastrous Bolthouse Farms acquisition.  But co this morning claimed progress in trying to get its shelf-stable bevs back into growth mode via repositioning of V8 brand as “the original plant-powered drink,” in words of new ceo Mark Clouse, and greater emphasis on single-serve biz. 

On fiscal Q1 call, Clouse acknowledged that broader shelf-stable juice category remains challenged, but claimed progress in optimizing bev portfolio by reducing role of long-declining Splash juice drink line and instead emphasizing core tomato-based V8 red juices, canned energy extension and single-serve format generally.  Newly released 10-Q filing indicated that bev sales slipped 3% to $182 mil in qtr, but on call this morning Mark attributed that mainly to Splash declines that offset positive performance elsewhere in bev portfolio, with V8 Energy claimed to be outgrowing overall energy category.

Campaign tells master brand story for V8 as the original plant-powered drink, as Clouse explained.  For instance, execution that aired this past summer compares can of V8 Original juice vs glass of OJ, allowing that both contain antioxidants, but that “when you want to kickstart your day, you can choose the one with a full serving of vegetables or you can go with the one with three times the amount of sugar, if you’re into that sort of thing,” as voiceover states.  Tagline is “V8, the original plant-powered drink.  Veg up!”  Ad can be viewed here.

CPB of course is transformed company after ending disastrous experiment with Campbell Fresh div built around Bolthouse Farms acquisition under prior ceo Denise Morrison.  It hived off Bolthouse and other refrigerated arms at steep loss and divested int’l operations too, while pivoting to bigger presence in snacks via pricy Snyder’s-Lance acquisition.  By now, bevs centered around V8 and Campbell’s brands account for less than 10% of total sales, grouped within Meals & Bevs div.  In Q1, Meals & Bevs declined 3% to $1.19 bil, tho Clouse cited as key milestone that soup biz won share for first time in 10 qtrs.  Snacks rose 2% to $989 mil as CPB continues to integrate acquisition.

With Dec 2022 taxpaids just filed and top brewers reporting their year-end results in the last mo, there are a few key updates to year-end industry figures. Domestic beer shipments declined 4.8% to 161.7 mil bbls in 2022 vs 2021, according to TTB year-end report. That include 15%, 2-mil-bbl decline in Dec alone, an even steeper drop than BI initially estimated for Dec and likely the steepest decline in any mo in the post-prohibition era. Still puts total industry shipments down about 3.6%, 7.7 mil bbls in US, INSIGHTS estimates (tho more TTB revisions could still change trends).

Inherent tensions in alcohol policy again on display during NABCA Legal Symposium this wk, demonstrating need for careful balance. As it manages varying interests and projects, TTB's plate is particularly packed with many rulemaking processes, agency's Carrie May showed. And tension between different industry interests turned into a playful tete-a-tete on taxes between Brewers Assn's Marc Sorini and DISCUS' Courtney Armour. But hottest topics only discussed in private, like crossover brand concerns (egged on by SunnyD's entry) and high-end bourbon debacle upending OR's regulators/control system.

Constellation beer brands continue to reach new heights with each of its major brand families, collectively making up "the growth engine of the entire industry," co showcased during Gold Network Summit distrib meeting earlier this mo. Over the last 3 yrs, weathering pandemic challenges and all, Constellation beer depletions rose 79 mil cases, including +27 mil cases in 2022. Last yr, Modelo family depletions surpassed 200 mil cases including Modelo Especial up to nearly 180 mil cases and Chelada biz nearly 17 mil cases. Co reiterated ambition to make Modelo Especial #1 beer brand in the industry (by $$); "this is attainable" and "this is going to happen," stated beer div prexy Jim Sabia. Corona family grew to 156 mil cases, including Corona Extra depletions nearly +4% to an all-time high of 123 mil cases. Pacifico depletions rose over 4 mil cases, co shared, now 18 mil cases total, INSIGHTS estimates. And Victoria posted record growth, surging 40% to over 4 mil cases for first time in US.

Reed’s Inc named the 26-year Diageo vet Thomas Spisak as cfo. Spisak, who’s based in Conn near Reed’s relocated hq, succeeds interim cfo Joann Tinnelly, who returns to role as vp/corporate controller and picks up some expanded duties in finance and corporate strategy, REED announced today. Joann, who’ll report to Thomas, had succeeded former cfo Iris Snyder . . . Starbucks has added an Irish Cream Cold Brew to its in-store holiday lineup, flavoring its standard cold-brew with Irish cream syrup and topping concoction with vanilla sweet cream cold foam and cocoa powder, Market Watch reported .

 In move that tighten the focus on core Brew Dr Kombucha biz, The Townshend Group abruptly informed patrons and customers that it’s permanently shuttering well-respected distillery of tea-based spirits in its hq city of Portland, Ore.  The unexpected move came as we’d been hearing co and its backers at Castanea Group have informally reached out to operationally seasoned bev execs who might be able to fortify team of founder/ceo Matt Thomas as it navigates increasingly treacherous straits of kombucha biz that’s shows signs of plateauing.  Still, shutdown was attributed solely to operational considerations. 

In note to Instagram followers, co said the building housing Townshends Distillery in Portland’s Brooklyn nabe “is no longer suitable for our operations” and that co is “unable to sustain the exorbitant cost of relocating to a new facility” either.  So it will close just ahead of Christmas.  Townshend’s founder/ceo Matt Thomas told us yesterday that he’s trying to pull together a group of investors who can restart operation eventually but it’s unlikely to get done quickly.  “The spirits world requires focused effort that we need to plan better for if we really want prolonged success,” he said.  Facility harnessed alcohol that’s byproduct of kombucha fermentation process to create exotic spirits that go “from leaf to bottle” (BBI, Jul 29 16).  The distillery, originally called Thomas & Sons, received a warm welcome from cutting-edge mixologists in town for its fernet and other creations.  Brew Dr Kombucha is produced separately at much larger facility outside Portland, in Tualatin.

Still, the pending shutdown comes amid other signs of new realism pervading kombucha segment over past year.  Humm earlier this year amicably backed out of plans to build East Coast brewery in Virginia even as category pioneer and leader GT’s increasingly turns to non-kombucha items for growth.  Another key brand with national aspirations, Health-Ade, successfully brought in new round of capital recently after what we’d heard were unsuccessful efforts earlier in year to find exit.  Thomas, recall, launched Townshend’s teahouse chain fresh out of college in 2006, then spun off house-made kombucha into separate Brew Dr biz that quickly expanded into national presence via DSD.  But that’s expensive route to take at time segment growth has slowed and pricing is getting more aggressive and we hear investors are starting to demand greater efficiency.  Private-equity partner Castanea, based outside Boston, came in as minority investor in early 2018.  No comment from Thomas on any prospective organizational changes.