Beer Marketer's Insights
LifeAid Beverage, the functional bevco out of Santa Cruz, Calif, is making its move into CBD space with canned entry dubbed LifeAid CBD that employs 20 mg of broad-spectrum hemp from respected producer Ojai Energetics and goes out at uncommonly aggressive SRP of $3.99. It represents new direction for LifeAid entry that goes out as more generalized elixir than earlier functional entries like CrossFit-oriented FitAid or FocusAid or ImmunityAid, and is likely to be followed by further LifeAid extensions keyed to other ingredients, cofounder Orion Melehan told us today in recapping NACS c-store show. Broader line these days is positioned as “vitamins you’ll actually enjoy drinking.”
LifeAid CBD entry is due at retail in Jan and goes out in same 12-oz slim can of entries like FitAid, LifeAid and FocusAid but with green tonality, appropriately enough. In keeping with new push co has undertaken to identify individual entries’ flavor profile, this one is described as Herbal Lemon. It carries nutritional supplement panel and contains the adaptogens rosemary and lemon balm and is described as employing nano-encapsulation to improve bioavailability of core ingredient. Speaking at NACS booth, natl accts dir Amy Anderson said there’s a chance LifeAid will have LifeAid CBD ready to support its big ecomm base in time for Black Friday start to holiday shopping season. At NACS booth, team was sampling limited quantity of unpasteurized lab samples.
The CBD launch might obscure lotsa other activity going on with core line. For starters, blue-agave-sweetened core entries are being reformulated so they drop from 9 g (45 calories) to 7 g (40 calories), getting in under 42-calorie limit for brands described as “low-calorie.” So now they’re all low-cal. And by Expo West next Mar, co will have extended zero-sugar flankers thru entire line aside from GolferAid. In another departure, as brand moves out into broader retail channels, for first time its individual functional entries are getting flavor names, so that FitAid Recover is Citrus Medley, FocusAid Focus is Melon Mate, PartyAid Revive is Berry Bliss, ImmunityAid Defend is Orange Burst and so on. (Flavor names notwithstanding, LifeAid portfolio will continue to be “function first,” Orion assured.) And with white shade of zero-sugar FitAid entry fading too much on shelf, co has conjured up new graphics scheme for the zeros that reverses color scheme of core line, with flavor-designating color on upper barrel and white below.
In discussion today, cofounder Melehan said that while co was satisfied to wait on launch of CBD entry until there was greater regulatory clarity, onslaught of brands had encouraged company to move now, especially considering that ingredient would seem to be well within brand’s wheelhouse. As opposed to extensions into areas like kombucha, CBD “feels like part of the DNA of the brand,” he said. Meanwhile, “there are so many entrants, so overpriced” that $3.99 price point for entry with true bioavailability should resonate. He said co had been in discussions with CBD provider Ojai going back to 2016 encounter at Expo West, in segment where not all CBD entries identify provenance of their core ingredient. Until regulatory climate is clearer, co will aim entry at up-and-down-street retailers in Calif rather than chains.
Among other developments at LifeAid Bev, it’s pulled back its field marketing from metros like NY to focus on core Calif and Ariz areas with intention to build ACV and velocity, then use market learning to guide future efforts in other parts of US, Orion confirmed. Meanwhile, co is keep promo engine hummin’. On website it’s got contest running to win a Onewheel personal transporter. And in conjunction with Walmart, the sponsor of Spartan Race is running Shop Like a Spartan promo offering $10K shopping spree to winner.
Can Ocean Spray Cranberries do cutting-edge innovation? After not getting very far over the years even via collaborations with partners like PepsiCo, the growers cooperative is trying again, this time out of an incubation unit in Boston’s Seaport District dubbed Lighthouse. First fruits of effort just broke under name Atoka, described as “line of herbalist-crafted plant-based drinks” that represents first new brand ever created by Ocean Spray. The line, in which cranberries play only a supporting role, was incubated in just 5 months, in keeping with unit’s apparent move-fast-and-break-things mandate. It’s launching locally in Boston and is anticipated to roll out in Jan.
Atoka is offered in sprawling array of Tea Tonics, Oatmilk Elixirs and Herbal Shots, each available in a series of 4 numbered herbal blends. Herbal Blend: 01 blends cranberry, guayusa, ginseng and ginger “to elevate your day into focus.” Herbal Blend: 02 offers elderberry, reishi mushrooms, rosehips, ginger and spices “to become a modern elderberry syrup, curated to support your daily wellness journey.” Herbal Blend: 03 melds dark cherry, chamomile, hops and ginger for tension-easing elixir. And Herbal Blend: 04 combines cranberry, linden flowers, lemongrass, orange peel and ginger “to soothe the belly & your senses.” The Tea Tonics are packed in 10-oz straightwall glass bottles while the Oatmilk Elixirs go out in 12-oz straightwall plastic bottles. The shots are 2.5-oz in size. Marketing materials assure that line is “always vegan, plant-based and non-GMO.” Co has trademarked phrase “mindfully herbal” to position line.
“We are committed to accelerate innovation within only 5 months from idea, test and then market launch,” declared Lighthouse Incubator head Santiago Proano, who signed up just this month after fling at Tyson Foods’ Disruptive Innovation Lab, where he was involved in launch of Yappah Protein Crisps, per his LinkedIn profile. Taking broader oversight role is Rizal Hamdallah, Ocean Spray’s global chief innovation officer. Info and graphics at AtokaWellness.com.
Trickling Springs Creamery of Harrisburg, Penn, which was among new wave of dairies this century that pursued model of being good steward to animals and land, is ceasing production tomorrow as owners face 370 counts of misleading investors and misappropriating $9 mil in funds, per accounts in local Record-Herald and other media outlets. TSC had announced last week it would cease production tomorrow and close its retail store on Sat. Citing documents filed with Pennsylvania Department of Banking & Securities, Record-Herald reported that owners Philip Riehl, Gerald Byers, Elvin Martin and Dale Martin are accused of selling promissory notes to at least 125 investors, with proceeds moving thru TSC accounts into their personal bank accounts.
Count Nestle among ranks of big bevcos that have revved up their innovation activities to play in new categories. At NACS this week, Nestle debuted a new line called Outshine Fruit Blended Coconut Water that builds off Outshine ice pop brand and is due for regional debut in Jan in Calif, Florida, Texas, NYC and Boston. Packed in half-liter bottles, entries are made with 55% coconut water but no added sugar, in Blueberry Lemon, Strawberry Watermelon and Tropical Fruits flavors. It will go out at $2.49-2.59. Distribution plan still is being refined, a Nestle staffer told us.
It’s also hitting hard at dairy-based protein. Nesquik Protein Plus offers 23 g of protein but less than a gram of total sugar in 14-oz PET bottle, while new entry called Jacked Rabbit – with emblem of bulked-up Nesquik rabbit – ups the protein ante to 38 g (but just 190 calories) in Vanilla and Chocolate flavors. Also on view were pair of lowfat milk RTDs using brands licensed from Mars: Twix Chocolate and Snickers Chocolate.
Also on display was Chameleon Cold-Brew shelf-stable coffees in 8-oz slim cans that was sampled last month at Expo East (BBI, Sep 13). Operating under Nestle ownership for coupla years now with many veteran execs moving on, Chameleon sales force is due to be integrated with Nestle’s early next year. Tho Nestle and Nestle Waters still operate separately, this was first time that both wings of co shared single booth at NACS.
PepsiCo’s renovation project on iconic Gatorade brand continued at NACS c-store expo in Atlanta even as it entered cold-brewed tea space via Pure Leaf brand and sought to juice its Muscle Milk brand with innovation.
On Gatorade front, PEP is building out performance platform dubbed Bolt24 with recently intro’d Antioxidant entry due for first extensions in Jan via caffeinated extension variously called Energize or Caffeine in various prototypes on view at NACS booth. Energize contains mild hit of 50 mg of caffeine while keeping sugar and calories low by cutting cane sugar with stevia. It will debut in Cherry, Strawberry Lemon and Orange Passion Fruit flavors priced at $2.19 and promo’d at 2 for $3. It joins Antioxidant entry with 100% daily value of antioxidants and electrolyte hit from watermelon and sea salt. That’s out in Mixed Berry, Tropical Mango and Watermelon Strawberry flavors. Due in Feb is G Super Shake, delivering 30 g of casein and whey-based protein in Chocolate and Vanilla flavors. As noted above, co is claiming marked progress in reinvigorating brand thanks to zero-sugar extension and now Bolt24.
On Muscle Milk, which has been stalling amid flock of dairy- and plant-based challengers, Pepsi in Feb will intro Muscle Milk Pro Series in Slammin’ Strawberry with 40 g of protein per 14-oz bottle, 5 g of fiber and 20 vitamins & minerals. It comes in at just 2 g of sugar. Label touts that it’s “non-dairy,” but adds that it “includes milk protein.”
In coffee category Pepsi will be offering up Starbucks Nitro Cold Brew in Feb, packed in 9.6-oz squat can couched in elegant black graphics in Black, Vanilla Sweet Cream and Caramel flavors. Caffeine content wasn’t immediately available. It’s priced at $3.99 in small-format stores, $3.49 in large-format. Its core Frappuccino line also is being invaded by cold-brew via entry due at year-end dubbed Brown Butter Caramel with a Splash of Cold Brew, in that line’s 13.7-oz glass bottle. And due at year-end is Tripleshot Energy Dark Roast in 15-oz can containing 225 mg of caffeine. “Extra Strength,” can copy assures.
Pure Leaf brewed-tea RTD will enter the cold-brewed space in Feb with Pure Leaf Cold Brew Tea offered in Slightly Sweet Black Tea, Slightly Sweet Black Tea with Tropical Mango and Unsweetened Black Tea, in 14-oz straightwall glass bottles priced at $2.29. (Recall Coca-Cola just entered space via Honest Tea brand – BBI, Sep 12.)
Among other innovations were more c-store-friendly 16-oz cans for Bubly sparkling essence water due in mid-Jan in Strawberry and Cherry, with price still TBD. MTN Dew Zero Sugar hits in Jan with elevated 113 mg of caffeine per 20-oz can vs 90 mg for core green can. Mountain Dew’s Game Fuel Zero adds Charged Raspberry Lemonade and Watermelon in Jan, with brand’s distinctive one-handed resealable closure. Pepsi Zero Sugar Wild Cherry breaks in Feb.
If Rockstar remains vital to Pepsi’s plans, that wasn't apparent at booth, where brand’s only presence seemed to be a handful of cans placed at bottom of countertop cooler containing Game Fuel items. (Rockstar hasn’t been exhibiting on its own in recent years at show.) Not much goin’ on with Pepsi’s own Amp brand either. So with Dew still seeking to find its footing, energy is one area where there’s work to be done at PEP.
PepsiCo enjoyed revenue growth in each of its global snacks and bevs units, producing 3d-quarter performance that put co most of the way to hitting full-year projection of 4% rev growth. “Solid beat,” heralded Consumer Edge Research’s Brett Cooper. In PepsiCo North American Beverages unit that accounts for roughly one-third of total co revenues, top line grew by 3% to $5.64 bil. Operating profit contracted 9% to $640 mil.
PepsiCo Beverages North America enjoyed progress mainly on revenue front, +3%, rather than volume front. Laguarta made case that co boasts advantaged portfolio that should enable it to grow without need for significant new additions via M&A. It’s doing well with key brands like Pepsi-Cola, which scored fifth consecutive qtr of revenue growth, tho Mtn Dew is “improving but not to levels we’d like to see.” For Dew brand that plays at intersection of CSDs and energy, as Ramon pointed out, co is groping to find way to maintain relevance and high awareness “compared to the new trends happening in energy,” a reference, perhaps, to performance energy on one hand and natural energy on other.
But Laguarta is “very happy” with progress on Gatorade, which enjoyed mid-single-digit revenue growth thanks to additional investment and better execution on core brand, along with successful Zero innovation that’s already a $500 mil brand in first year and promising Bolt 24 that’s gathering market response en route to bigger rollout next year. Opportunities abound in areas like DTC and personalizing consumption, as well as in occasions beyond hydration. Bubly continues to gain share and both Life WTR and Propel had double-digit rev growth. Pure Leaf Tea and Starbucks trademarks grew revs in single digits. Co is balancing investments across large and small brands, adding routes, coolers and other infrastructure, including capacity to produce smaller portion-control packs. By his assessment, “3% is a very good performance for NAB but there are still opportunities to do better.”
SodaStream Shakeup in US Asked about SodaStream, Laguarta said it’s outperforming business case PEP made when it penciled out benefits of acquiring co as means of wrestling with plastic backlash and improving bev personalization opportunities. While it continues to enjoy great success across markets like Western Europe, Japan and Canada, it’s revamping org in US, “upgrading talent” and leveraging PepsiCo’s customer relationships with view to making “transformational progress” next year. Tho PEP’s been learning from SodaStream, it brings to table its own expertise in flavor innovation, machine design and DTC technologies, ceo said.
Extendable Brand Platforms Make M&A Small Part of Overall Planning Asked about reinforcing N Amer bev portfolio via acquisitions, Laguarta made case for standing pat, aside from small additions along lines of KeVita should need arise. Overall, tho, he feels current portfolio can well support existing and future demand, with big brands that “can innovate into multiple spaces.” Exhibit A: Gatorade’s Zero extension yielded incremental $500 mil in retail sales in first year. In his view, PEP’s key platforms “are broad enough brands that can cover multiple spaces – very well positioned, better than our competition.” So Ramon is continuing stance of his predecessor, Indra Nooyi, tho recall she broke with often-expressed stance to make SodaStream acquisition a year ago. And we do hear PEP is among strategics at least kicking the tires of fast-growing alkaline water brand Essentia, which could command price of $1 bil plus.
PROFILE: Oxigenesis Offers Cherry Bo2mb Powdered ‘Brain Energy Drink’ in Globular Red Shooters
Paso Robles, Calif-based co Oxigenesis has harnessed unusual format to offer what’s described as “sustainable brain energy drink” that blends amino acids like taurine, vitamins, minerals, L Tyrosine, GABA, CoQ-10 and magnesium oxide, sweetened with stevia and sucralose. Under name Cherry Bo2mb it’s employing bright-red, 6.8-gram globular “shooters” to create cherry-flavored liquid with just 16 calories. The mini-bottles, priced at 3 for $10, soon will be augmented by more conventional pouches, co said.
Andy Malloy, former PepsiCo exec who most recently served as chief of sweets marketer Hail Merry, has stepped in as ceo of Austin-based Picnik, replacing founder Naomi Seifer, who segues to innovation role, BevNet reported. As noted from recent Expo East show, the KarpReilly-funded co lately has been downplaying its single-serve Bulletproof-style coffees in favor of more recently intro’d creamer line (BBI, Sep 16) . . . Billionaires Stewart and Lynda Resnick, who’re major growers of pomegranates and other crops, have donated $750 mil to Calif Inst of Technology to support research into climate change. Contribution by owners of Pom Wonderful and Fiji Water brands is believed to be 2d-largest donation ever to American university, behind $1.8 bil donation by Mike Bloomberg to Johns Hopkins, NY Times reported. Paper noted that co has been criticized by environmentalists for its large use of water and plastic, but Stewart Resnick said donation was driven by awareness of devastating impact climate change has had in his biz of growing fruits and nuts . . . Hong Kong’s 91-yr-old billionaire, Li Ka-shing, is among major landlords being scapegoated by Chinese govt as Chinese Communist Party tries to deal with protesters who’ve been roiling city with high housing costs cited as key grievance, NY Times reported. Among wide-ranging biz activities, Li is key investor in bev marketer Celsius Holdings.
Tho it’s rebuffed would-be acquirers in recent years, Italy’s Illycaffe had recently indicated it’s willing to sell minority stake to strategic partner – like a US-based retailer – that can help it build out its branded cafes. Now it’s selected Goldman Sachs to help in quest, Reuters reported, with view to expanding its modest array of cafes to 200 units, more than 10X current US base. Trieste-based co founded in 1933 remains fully in hands of founding Illy family but chmn Andrea Illy had indicated in Jul it was ready to offer minority stake for first time to right partner, at time rivals like Starbucks and JAB are amassing big base of high-end coffee shops, as Reuters reminded.
Seeking platform to offer CBD-infused sports nutrition items to athletes seeking alternative to pain killers, canna-giant Canopy Growth has taken 72% stake in Toronto-based BioSteel Sports Nutrition. All-cash deal at undisclosed price provides Canopy with “significant platform to enter the sports nutrition and hydration segment, and lays the groundwork for the adoption of cannabidiol in future product offerings,” including hemp-based products in US, the Smiths Falls, Ontario, co said today. Deal includes path to full ownership by co that trades as WEED. A decade old now, BioSteel includes as cofounders/co-ceo’s Michael Cammalleri, a former hockey player now full-time with the co, and John Celenza, and boasts numerous hockey players among regular users of its core sugar-free #DrinkThePink hydration mix. Athlete endorsers include Edmonton Oilers’ Connor McDavid, Dallas Cowboys’ Ezekiel Elliott, Minnesota Timberwolves’ Andrew Wiggins and NHL Hall of Famer Wayne Gretzky. Elliott’s deal includes role as lead endorser of BioSteel CBD products once NFL greenlights activity. (BioSteel claims to insist that all endorsers actually be users of product.)