Beer Marketer's Insights
Jones Soda, which has been struggling to grow, has enlisted longtime Starbucks exec to serve as vp marketing. Joining Seattle-based altsoda player is Maisie Antoniello, who brings extensive resume from Starbucks in both its retail and CPG units, most recently working to turn around Frappuccino line that had gone flat. She earlier worked on Cheetos at Frito-Lay, including partnering with Tapatio Hot Sauce on cobranded items. She joins at time co has accepted investment from Heavenly Rx with view to developing CBD-infused bev line that could ignite growth. “We have the utmost confidence she will devise and execute the necessary strategies to further expand our current portfolio, along with playing an integral role in our efforts to commercialize a CBD-infused beverage line,” said JSDA ceo Jen Cue.
Keurig Dr Pepper has wrested alliance to market McCafé packaged coffee from its 5-year partner Kraft Heinz, which had brought McDonald’s CPG extension to market. Under new deal, KDP will broaden its existing role on Keurig K-Cups with responsibility for “coffee sourcing, distribution and marketing of the McCafé brand in K-Cup pods and bagged and canned coffee formats in all classes of trade, including retail and e-commerce,” starting in late 2020. “With this partnership, McCafé will continue to be marketed alongside KDP’s market leading single-serve brewing systems in addition to in the coffee aisle.” KDP will be tapping expertise that comes of being controlled by coffee giant JAB and its vast array of coffee brands, from supermarket plays to Stumptown and Peet’s. In recent years, JAB has been emerging as increasingly direct rival to Starbucks, which moved its CPG coffee biz from Kraft Heinz to Nestle in acrimonious breakup which led to SBUX last year having to write $2 bil check to former partner. McDonald’s pivot to KDP comes a month after it disclosed effort to elevate McCafé quality perception via new brand identity assuring consumers that “Good is Brewing.” There don’t seem to be any immediate implications on bottled coffee side, where McDonald’s partners with Coca-Cola on McCafé-branded line, tho producing a bottled line certainly falls within KDP’s wheelhouse via Dr Pepper side of operation. So there may or may not be more shoes to drop.
For its part, Kraft Heinz offered philosophical view of shift. “We are incredibly proud of our successful partnership with McDonald's and the growth we have seen in McCafé packaged coffee since the launch into retail in 2014,” coffee gm Peter Eck said in statement. “Kraft Heinz will support the transition for McCafé, and we remain fully committed to the coffee category as a whole. We are actively exploring all options to grow, innovate and win in coffee with our own brands, as well as with our other licensed brands.”
Red Bull North America is splitting with Northeast Beverage in last territory where they collaborated, Rhode Island, after earlier parting ways in Conn. In RI, they’ll go separate ways for off-premise on Sep 30 and for on-premise at year-end. Santa Monica, Calif-based US arm of global energy giant plans to move to mix of self-distribution via what it calls Red Bull Distribution Co and 3d-party distributor, potentially a spirits house, judging by past moves. It continues reshuffle in New England that’s seen departure of Burke and Atlas in Mass, move that opened door for both to pick up performance-energy challenger Bang. Mancini family, which operates Northeast, didn’t reply to request for comment, but RBNA said in statement that it remains committed to 3-tier distribution system but has mutually agreed to part ways with Northeast for off-premise effective end of this month. “On-premise distribution in Rhode Island will transition to a new third-party distributor in January 2020,” it added. No word on whether Mancinis have eye on enlisting Bang or one of its rivals to represent them in category.
Gleaming white casket as merchandiser? That spectacle at trade show booth earlier this week epitomized different tack being taken by packaged water play Liquid Death Mountain Water, which offers sourced water from Austrian Alps in cans with aggressive dripping-skull graphics that would seem more at home in energy or malt liquor segment. Brand name is reference to co’s wished-for death of plastic, tho it’s happy to mix that metaphor with on-can exhortation, “Murder your thirst.” Premise, as website explains, is to take world’s healthiest bev and make it as entertaining “as the unhealthy brands across energy drinks, beer, chips and candy.” Or, as sales vp Tim Tucker told us at Liquid Death booth at Natl Beer Wholesalers’ Assn annual convention in Las Vegas earlier this week, to be “the Monster brand of the water category.” Throw in commitment to devote 5 cents per can sold to cleaning oceans that are awash in sea-life-destroying plastic and its founders hope they have unassailable proposition in sea of sameness in packaged water segment.
LA-based brand was created by coupla ad/entertainment vets: creative dir Mike Cessario, who’s worked on brands from Organic Valley to Fender (while keeping comedic hand in as Upright Citizens Brigade instructor), and design/marketing specialist Jon-Ryan Riggins. Mike is ceo, JR is coo/cfo. Their core backer so far is Science Inc of Santa Monica, Calif, whose earlier investments have included likes of Dollar Shave Club and for whom execs say Liquid Death is biggest bet so far (we hear to tune of $6-8 mil, tho haven’t confirmed). Individual investors include high-level execs currently or previously associated with Dollar Shave Club and Twitter. Some wholesaler partners may also have skin in game. NJ-based Cascadia Managing Brands is helping team orchestrate buildout.
Liquid Death has lately been building buzz on Amazon, where it’s sold over $1 mil in recent months, and now is pushing harder to on- and off-premise retail, riding white can with gruesome skull graphic. With its casket full of cans at NBWA, Liquid Death was prospecting for wholesaler partners, with view to landing coverage in 35 states in coming weeks, per Tucker, a former Anheuser-Busch and Markstein Bev exec. Brand claims to be playing at retail in scattered markets like New England, Penn, Florida and Texas so far, via early DSD partners like LA Distributing and Bud houses Tri-Eagle in Florida and Southern Eagle in SC. Brand has entered retail chains like Hy Vee while cutting a swath across influential on-premise accounts like No Vacancy. It’s got commitment to enter nearly 700 Vitamin Shoppe stores early next year.
As noted, brand uses mineral water from Austrian Alps that comes in around 8.0 pH and contains natural electrolytes, tho that’s about to change for N Amer customers. To ease cost and sustainability burden of shipping water across Atlantic Ocean, next week Liquid Death will start tapping new source in Canadian Rockies that offers similar nutrient profile, Tim told us. Alps source will continue to support European and Asian biz. The cutover will occasion one less-fortunate but necessary change: from current half-liter tall boy available in Europe to more conventional 16-oz cans like those used by Monster and Rockstar. Brand goes out at $1.69 per can promoted at 2 for $3, and $3 on-premise. Lineup will be fortified with sparkling version in black can with white lettering. For now, at least, flavored versions are not in the offing. Info at LiquidDeath.com.
SodaStream chmn and former ceo Daniel Birnbaum, who presided over turnaround of foundering gizmo-marketer and helped orchestrate $3.2 bil sale to PepsiCo last year, is under investigation by Israeli securities regulator on suspicion of insider trading, Reuters reported. News service reported yesterday that Birnbaum was detained for questioning on Mon and released after posting $343K bond, with further questioning expected yesterday. The regulator, ISA, has kept under gag order identity of former SodaStream employee who profited on non-public info on quarterly earnings and PepsiCo M&A deal. SodaStream said only that’s cooperating as needed with investigators, as Reuters reported.
More coverage still to come from Natural Products Expo East and National Beer Wholesalers’ Assn meeting, BBI readers!
Lighthouse Strategies’ Cannabiniers unit has further fleshed out its product line with unveiling of canned Creative Waters sparkling waters in both CBD-only and CBD/THC versions, targeting Calif and Nev dispensaries this fall. The new entries join expanding suite from San Diego-based co that already includes Two Roots non-alcoholic cannabis-infused beer on bev side along with Baskin personal care line. The CBD-only entries under Creative Waters banner contain 25 mg of micro-dosed CBD in Berry-Lemon, Cucumber-Lime and Passionfruit-Tangerine-Coconut flavors. The THC-containing entries debut with 3 different ratios of CBD to THC heralded as offering varying “mood profiles”: Lift (infused with 1 part CBD to 2 parts THC for “elevated and energized experience”), Balance (1:1 ratio for greater “stability and consistency”) and Relax (3 parts CBD to 1 part THC for stress reduction, calmness and tranquility). Both sublines come in at 25 calories per 12-oz can. No immediate response to our inquiry on pricing or on when CBD line may move beyond dispensary channel that’s been Cannabiniers’ bailiwick so far. Some info at CreativeWatersCo.com.
Perhaps feeling some heat from range of plant-based protein shakes and meal replacements building market momentum, Soylent is shifting its positioning a bit via new campaign that deems secret of brand to be “plants, not people.” Tongue-in-cheek effort, captured in digital ads, social media and animated video, veers into dangerous territory by classical marketing standards by riffing off “It’s people” catchphrase from cult-fave flick Soylent Green, which refers to meals that are revealed in film to be derived not from plankton as first believed but from recycled human corpses. Campaign also builds on “Life Cycle Analysis,” deep dive that LA company undertook over past year to show how its various inputs from ingredients to packaging supports the environment. The LCA findings acknowledge that plastic packaging remains a negative but touts virtues of soy protein over animal-based alternatives. And now that it’s on green kick, Soylent is adding as new flavor to core line a green-label Mint Chocolate entry with recipe containing 20 g of plant protein and 36 essential nutrients. “With its attractive mint green label, we thought it was a perfect time for a new campaign that finally answers one of the internet’s most burning questions: what is the secret of Soylent?” said brand marketing vp Andrew Thomas. “It’s plants, not people.” Mint Chocolate just broke on soylent.com and hits amazon.com next month. It also will be first flavor from DTC-oriented Soylent to move quickly to retail, entering NY distribution partner Big Geyser within weeks of online debut, reaching first retail accounts by Nov, Soylent said.
Tho Soylent has been positioned as offering a “complete meal in every bottle,” with nutrient-dense entry with only 400 calories, it contains more added sugar and longer ingredient list than rivals like OWYN (“only what you need”) that have been making strong headway in market. New campaign would seem to be effort to insert it more fully into plant-based conversation. And while Thomas offered that he was surprised campaign got greenlighted, we seem to be in anything-goes era, from White House norm-breaking to Vita Coco’s delivery of jar full of urine to negative reviewer who said he’d rather drink that, initiative whose viral reception helped elevate awareness of new Vita Coco Pressed extension (BBI, May 16). So it seems marketers these days perceive more upside than downside to controversy-risking initiatives.
Tho trade show floor of Natl Beer Wholesalers’ Assn Convention in Las Vegas this week was chock full of CBD-product cos seeking distribution, veteran alc bev atty and distrib advocate Mike Madigan advised distribs to be extremely careful before entering CBD-bev biz. In short, “it’s muddled,” said Mike, specifically their legality. Why’s that? First, if CBD (cannabidiol, non-psychoactive chemical found in both cannabis and hemp) is not derived from hemp (legalized in Farm Bill late last year), it’s not legal. Second, FDA has not approved any CBD-infused beverages or foods for humans or pets. Loophole: CBD supplements are outside FDA jurisdiction and appear to be legal. But what we saw on convention floor sure looked like bevs and some carried Nutrition Facts panels rather than Supplement panels. By all accounts, distribs have shown great interest in selling them, even if some are still standing warily on sidelines.
TTB has said it will allow hemp ingredients in alc bevs, if producer gets formal approval. Problem is that “research suggests little CBD comes from hemp,” Mike pointed out, but rather from other cannabis plants. Since distribs must hold fed permit to sell beer, if distrib violates fed law, distrib permit at risk, can be suspended or revoked, he said. Congress is pressuring FDA to develop and clarify rules on CBD-infused bevs, but it’s moving very slowly, according to NBWA genl counsel Paul Pisano. (Exec that BBI editor encountered last week who’s involved in Hemp Roundtable negotiations with FDA told us he sees little chance resolution will be reached in less than 18-24 months, and timeline could be greatly extended if any adverse medical incidents prompt wave of concern as has occurred in vaping.) NBWA met recently with FDA on this topic, and agency has a “working group” considering the issues. Key problem: if FDA allows CBD, which has drug properties, to be infused in bevs, will it have to then clear other analogous bevs which also contain, say, Viagra, or other such recreational drugs?
Mike advises distribs not to carry these bevs until there’s “further clarity” on fed level. (Later in day, Boston Beer founder/chmn Jim Koch basically took same position, to “let others sort it out.”) If distribs “bound and determined to sell these products,” Mike advised, they should “require the producer to provide a letter that ensures” federal government has deemed the beverage complies with federal law, which doesn’t seem likely. At very least, distrib should get assurance that a lab has certified the CBD derived from hemp, and that the producer indemnifies the distributor if they’re sued from a liability standpoint. Mike expects lawsuits against CBD bevs similar to when AGs went after bevs combining alcohol and caffeine. Despite Congressional (and commercial) pressures, FDA indicates it will act deliberately, and give guidance “once we have the science,” agency told NBWA.
What if distribs set up separate business unit to sell CBD bevs? Distribs should definitely set up separate biz, said Mike, but still 2 risks. Right now, still looks like violation of fed Controlled Substance Act, tho TTB/FDA more likely to go after suppliers first rather than distribs. Second, if separate company commits felony but is owned by same entity that owns wholesaler beer permit, that beer permit is still at risk. So it’s a risk-reward muddle, to be sure. (This article was adapted from one that ran yesterday in our sibling publication Insights Express.)
Colo-based New Age Beverage Corp is “first major” co to be approved to sell CBD brands by the Japanese Ministry of Health and Narcotics Control Division, co announced. First brands to hit Japan mkt will be New Age’s line of NHanced CBD body oils and creams, which will be “sold immediately through over 50,000 direct-to-consumer product consultants in Japan.” In addition, New Age said it “has also completed development of its proprietary CBD-infused beverages and dietary supplements for Japan,” which it expects to launch this year and expand globally as “regulatory landscape allows.” “NHanced CBD products for the Japanese market were designed and developed to meet stringent government hemp (cannabis sativa) and cannabidiol (CBD) regulations for safety, purity and efficacy,” said Jarakae Jensen, mg dir of R&D for New Age.
At Ceria Brewing, former Coors brewing chief Keith Villa perfected the art of brewing non-alcoholic beers as base for THC-infused Grainwave Belgian-Style White entry that broke in Colo this past year. Hindered by uncertain status of cannabis legalization and current requirement that THC beers be brewed in each state where they are sold, it’s only adding Calif to footprint next month, with Nevada eyed shortly afterward. In meantime, tho, non-alc beers have developed surprising momentum in bevcos’ pursuit of more abstemious generation of drinkers. So, as long as he’s got some great NA beer recipes, why not go big with those in uninfused versions?
That was plan unveiled at NBWA trade show in Las Vegas yesterday, where Villa and his wife and partner Jodi unveiled uninfused Grainwave Belgian-Style White, similar style to Blue Moon beer that Keith crafted for Coors back in mid-90s, to be followed next month by Indiewave West Coast-style IPA. They’ll start first in Northeast in Nov, location dictated by ability to find regional contract brewing partner with the right pasteurization capability. Then they’ll work their way west via brewing partners in St Louis, Colo and Calif. (Villa said he wasn’t ready yet to disclose who those partners are.) The objective is 2-fold: to build the Ceria brand, even in areas where the THC entries won’t fly yet, and to participate in NA beer segment showing surprising momentum. Tho lotsa brands are in game now, Villa believes he’s offering beers without sourness or grainy character of some others.
The Belgian White comes in at just 77 calories per 12-oz can, compared to 165 calories for alcoholic versions, and the IPA will come in at 83 calories vs 200 calories for alcoholic versions. Still being discussed is price point, tho Keith is eyeing $9.99-10.99 range, per 6-pk of 12-oz cans, toward lower end of well-crafted alcoholic entries.
Also new at show were prototypes of potential CBD entry, tho Ceria team, including coo Stephen Horgan, emphasized that they were there for wholesaler feedback before any decisions are made on whether and how to proceed.
Meanwhile, on THC front, the Villas are building lineup of beers in careful gradations of THC content, in keeping with their commitment to offering items that are an adjunct to sociability and reinforce moderation. So the Belgian Style White, with 5 mg of THC, is being augmented by IPA with 10 mg and, as plans currently stand, a Starstruck American Light Lager early next year that will offer lighter lift of 2.5 mg.