Beer Marketer's Insights
Most of the Bai veterans are gone. Under longtime Ocean Spray innovation exec Kelly Reilly as ceo now, NY-based Red Thread Coffee has rebooted its strategy, taking more conservative approach to expansion while finetuning elements like packaging that underplayed premium identity as vibrant-tasting cold-brew.
Red Thread, recall, was created back in 1995 by operator of beloved retail store in Sag Harbor, Long Island, named Lynda Sylvester and 2 female colleagues, making it one of earliest cold-brew offerings in US, well before third-wave players like Blue Bottle popularized style a decade later. Brand is named for Asian credo that each of us is connected at birth by invisible red thread to every person we’re destined to help in our lifetime, with co donating 2 cents per bottle to local charities like hunger-fighting God’s Love We Deliver in NY. As category developed, Sylvester brought bottled entry into NY 4 years ago, winning spot in chains like Whole Foods, Gristedes and Fairway, along with foodservice accts like American Express. Eventually Sylvester concluded she needed some bev-specific expertise to scale up. That decision coincided with Bai’s exit to Dr Pepper Snapple, so she was able to enlist cadre of Bai execs seeking next venture, led by John Neunson as ceo. He recruited Reilly from Ocean Spray as cmo. New team cut over line from plastic to 10-oz glass bottle while retaining unsweetened, black positioning, and expanded flavor range and revved up expansion plans. When brand failed to ignite, founders cut back size of team, Neunson and most other Bai vets departed and Reilly stepped up to ceo job in Jan.
She immediately rethought key premises, embarking on extensive consumer research in NY and Chicago that revealed that many millennials didn’t recognize that Red Thread is cold-brewed, often mistaking package for condiment or cough syrup. But the liquid and philanthropic angle consistently received high marks. Revamped label offers dark color palette with metallic highlights on which is prominently highlighted that it’s coffee-forward cold-brew, with clearer designations for the 4 flavors retained in lineup: Dark Roast (Sumatra Aceh), Medium Roast (Nicaragua Segovia), Chocolate Almond (Peru Cajamarca) and Caramel Hazelnut (also Cajamarca). Neck labels that once commanded, “Be cool, do good,” now are deployed to further emphasize that it’s “cold brew.” The lineup retains cold-brew’s vibrancy when not cut with sugar or creamer, in contrast to other black-only brands that have diverged from that premise in pursuit of lapsed Frappuccino drinkers.
While retaining sole DSD partner, Dora’s Naturals, in core NY market, Reilly enlisted broadliner UNFI to work rest of US and organic beef purveyor Juniper Organics as broker, with plan to pick retail spots more carefully. Brand retained presence in Whole Foods and added Northeast’s Stop & Shop in Apr, as well as Giant Food in Mid-Atlantic. In Aug, brand entered all 160 stores operated by The Fresh Market up and down East Coast following 2 weeks of internal taste tests among 300 of retailer’s team members. Marketing focus has been on in-store demos that allow Red Thread team to sample liquid and tell philanthropic story. On operations side, one Bai holdover, coo Kenneth Dee, has kept things on stable track, she said. Co employs virtual pr and social media teams in Calif. For next retail frontiers, she’s eyeing Midwest, and is tempted by overture from Costco for Bay Area stores. Chains like Wegmans or Sprout’s would be ideal additions, she said. To keep things simple, co is eschewing concentrate or draft formats, at least for now. With platform established, Reilly said she’s in hunt for sales leader to oversee targeted expansion.
Having tripled its mfg space in Chicago to 290K sq ft two years ago, Berner Food & Beverage has added a new retort production line that more than doubles its shelf-stable bev capacity for customers in RTD coffee and latte space. Those customers include unidentified major CPGs as well as emerging brands and private-label customers. Retort boost comes on heels of warehouse expansion to 1 mil sq ft. Berner makes range of coffees, teas, dips, sauces and snacks. No immediate response today to request for further details of plant’s capabilities .
Cannabis player Ceria Brewing has brought aboard MillerCoors vet Greg Miller as vp of biz development at time it’s building out multiple platforms, including non-alc THC and CBD beers and uninfused non-alc beers (BBI, Sep 24). Miller, based in Minneapolis suburb of Eden Prairie, spent 25 years at MillerCoors, most recently as dir of natl accts for on-premise and casual dining. Greg was on job working Natl Beer Wholesalers Assn trade show recently . . . Lemon Perfect, the hydration line devised by hoops recruiter Yannin Hufnagel, has recruited Kyle Martin as chief growth officer. Yanni demurred from discussing changes until he’s built out fuller team, but Martin’s LinkedIn page indicates he came aboard a few weeks ago, after interactive and ecomm roles at TXU Energy, Pepsi and Core Nutrition.
Naturally alkaline Eternal Water has been moving quickly to block out DSD distribution in key metros, with recent additions including Honickman Group in Mid-Atlantic and Polar Beverage in New England, as it targets c-stores as key 2020 priority. Speaking at last week’s NACS c-store expo, natl sales vp Jay Alexandrovich said brand launched by entrepreneur Karim Mashouf already has cracked Sheetz chain in Mid-Atlantic, Terrible Herbst in Nev, Circle K in Texas and array of Chevron stores. In larger formats, it’s also expanded from 3 Kroger divs to 11, with hope of winning full national presence at grocer next year. It’s national in CVS and has spot in over 2,500 Walmart stores. One key success story has been 1,100-unit Publix chain in Florida, which carries every sku and has seen Eternal vault to #2 premium water brand behind Smartwater, per data cited by Jay. Tho brands engineered to be alkaline like Essentia, Aquahydrate and Alkaline88 have been generating momentum at retail in recent years, some distributors also are making room on their trucks for naturally occurring alternatives like Eternal.
The new DSD partners have some meaningful biz to support. The Honickman assignment includes all 3 metros serviced by Pepsi/Canada Dry giant: NYC, via its Canada Dry NY unit, as well as Philadelphia and DC/Virginia, including Sheetz footprint. Polar can support Stop & Shop and Shaw’s presence. Also in mix these days are Lakeshore in Chicago, and indie Bud houses in LA metro including Straub and Ace, with other houses like LA Distributing and Classic enlisted to fill voids left by Anheuser-Busch’s extensive network of company-owned branches, which so far won’t carry non-A-B brands.
In NorCal, Eternal is working with Markstein and Saccani, while Nevada Beverage got nod in Nev, where Terrible Herbst chain is key innovation platform. (We profiled Nevada Bev’s NA activities last week – BBI, Sep 30.) Brand has been moving thru massive Columbia Distributing in Pac NW. It’s enlisted mainly MillerCoors houses in Fla and handful of Bud houses in fragmented Texas market. New Age handles brand in Colo.
Brand is still working to build ACV before embarking on any comprehensive marketing programs, Alexandrovich noted, tho it recently revamped website, which now can support ecomm sales. It’s added 2.5-liter bottle with handle to mix. Among challenges, recently unveiled sparkling line in array of flavors continues to be a slow build, Jay allowed.
Though it makes much of its capabilities with “frothed milk” derived from cows just a few miles from Midwestern plant it operates, La Colombe now has entered the oatmilk game, offering a line of Oatmilk Draft Lattes in its distinctive 9-oz cans. It previously offered dairy-free entries in Coconut and Coconut Mocha varieties, so the oatmilk line extends plant presence into new platform. The oatmilk line breaks in Original, Vanilla and Caramel flavors, using base of cold-pressed coffee and chicory root and sweetened with cane sugar, for calorie range of 110-130 calories. Though not indicated in the branding, new entries employ Oatly oatmilk, a booth staffer at NACS told us. The cans are given a blue tonality and carry Philadelphia roaster’s trademarked plastic cap. New line joins roster that includes core line of Draft Lattes in Original, Vanilla, Mocha, Caramel and Triple Shot varieties, as well as trio of Pure Black entries and Shandy line in Grapefruit, Lemonade and Cherry flavors.
Also new at NACS was the brand’s first foray into multiserve segment, via 42-oz carafe bottles with a distinctive tapered silhouette. The refrigerated line debuts in Cold Brew Brazilian (medium/dark roast) and Cold Brew Colombian (light roast). The ingredient list is as about as short as they come: cold-pressed coffee and “natural flavor.”
Running co out of flagship store in Philadelphia’s burgeoning Fishtown nabe, La Colombe founder Todd Carmichael and his team have been building out co’s café presence to tune of 5 in Philly, 8 in NY and 2 in Boston, along with 5 in Washington, DC, 5 in Chicago and 5 in SoCal. It’s aligned with Chobani, whose founder owns controlling stake.
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.