Beer Marketer's Insights
Two complementary brands boasting cult followings are teaming up on shelf-stable oatmilk-based cold-brewed coffee. This fall, Stumptown Coffee will offer single-serve Stumptown Coldbrew with Oatly that harnesses Sweden’s breakout oatmilk brand for entry into burgeoning sub-segment. It will launch in Original Oat, Horchata and Chocolate flavors, packed in what seems to be 11-oz Tetra Pak sporting Dream Cap for resealability, per email blast to consumers from Portland, Ore-based coffee icon owned by JAB/Keurig.
Brazilian coconut water player Aurantiaca made a splash in entering US a coupla years back with massive booths at Expo West, where it even wrote 5- or 6-figure check to sponsor live music bash. It mustered compelling story about 450,000 bar-coded coconut trees grown with such precision as to yield best-tasting liquid (BBI, Jun 28 2017). But after seeing too little growth to satisfy big spend, co has quietly been cutting back in recent weeks, closing or downsizing US and European offices as it segues to less cash-intensive plan that calls for focusing more on natural/specialty on East and West Coasts, and exiting heartland markets and conventional retailers with their slotting demands.
On her LinkedIn page, former marketing exec indicates her job ended in Jul when “company closed its US and Europe offices,” but source familiar with Aurantiaca’s planning said that’s not entirely true, with some presence to be maintained despite extensive layoffs, tho all that’s currently being worked out. He noted that brand has had very successful runs in Brazil, Canada, Israel and numerous Caribbean countries, while struggling in US and parts of Europe, notably UK, despite maintaining big team over past 2-3 years. So it’s time for different approach. He indicated that Canada and Caribbean are likely to move into profitability in coming year, with proceeds reinvested in US as progress warrants. Even in core Brazil market, he noted, co is undertaking some restructuring to move away from deep discounts. Of course, such moves are familiar story when landgrab strategy doesn’t pan out, as we’ve seen recently at Cheribundi tart-cherry bevco (BBI, Aug 23), and don’t foreclose on chance at ultimate success in market.
Call this morning to co’s chief operating officer for N Amer wasn’t immediately returned, while terminated employee cited non-disclosure agreement in declining to offer any info on situation. We’re told co will offer more detailed roadmap once remaining decisions have been made for 2020 plan.
Confronting a softening in its La Croix workhorse brand, National Beverage reported another steep sales decline vs year-earlier period in its first quarter of fiscal 2020. In terse earnings report, Florida co that trades as FIZZ presented results to show sequential quarterly improvement from $239.9 mil sales for Q4 ended Apr 27 to $263.6 mil for Q1 ended Jul 27, sign of La Croix brand’s “significant stair-step influence returning to a more positive directional position.” But measured against year-earlier period that reflects comparable warm-weather selling season, topline was off 9.9%. Net income dropped 29.3% to $34.5 mil. Earnings per share, at 74 cents, were in line with analysts’ expectations, so shares sagged only slightly in trading so far today. Co had $202.7 mil in cash on hand at end of qtr.
Adrenaline Shoc, performance energy brand created by Lance Collins for Keurig Dr Pepper network, has performed strongly enough in initial half dozen markets to warrant full national rollout by end of Nov, entrepreneur told BBI yesterday evening.
As anticipated, brand rolled into 5 states of Texas, Okla, NM, Calif and Nev via partner KDP and succeeded in signing on KDP-aligned Kalil in Arizona in wake of that bottler’s exiting Monster franchise (BBI, Apr 17). Tho launch was held up a few weeks by legal fracas with former partner at Outlaw Energy (BBI, Jun 19), that didn’t stop A Shoc from being embraced by plethora of leading retailers in target regions, including Ralphs, Safeway, Kroger’s Texas region and HEB, along with c-store giants 7-Eleven, Am/pm and Chevron. At time that Reign and Bang were pummeling each other on price with bogo’s and other deep discounts, Collins said A Shoc stayed resolutely premium, in $2.79-2.89 range at convenience, $2.49 at grocery, undertaking 2-for-$4 deals as most aggressive. Pictures he shared with us showed big grocery displays featuring $2.39 price and 7-Eleven shelf set with Reign and A Shoc priced at $2.89, core Monster brands at 2 for $4.29, Red Bull 12-oz at 2 for $5. Highway billboards command, “Elevate your workout” while flagging zero-sugar attribute.
Quick takeup of brand despite its off-cycle launch has encouraged partners to plan rollout to entire US by end of Nov, Collins indicated. Some markets may enter mix ahead of that, maybe Florida, where Wawa and 7-E have been asking for brand, he said.
Zen Water Next on Drawing Board? Tho it’s still early days, A Shoc breakout would continue long string of outsized successes by LA-based entrepreneur that have included Fuze, NOS Energy, Body Armor and Core Nutrition, with relatively few misfires like FMF and Outlaw energy plays. But with relentless tinkerer Collins, the next chapter is always being written, even before the current novel reaches its climax. What might that be? We hear Collins has been showing prototype of new alkaline water entry called Zen Water that presumably would be pitched to KDP should it decide it needs to compete in fast-growing segment led by Essentia brand. In conversation yesterday evening, Lance pooh-poohed notion as having no immediate relevance, saying he registered trademark a year and a half ago with view to possibly including it as extension to Core brand before sale to KDP made idea moot, and is precluded from launching new brand thru Apr via non-compete tied to that deal. “I can’t be in the water business,” he declared. (Of course, if KDP wanted such a brand, it could readily waive the non-compete.)
One image we’ve seen shows PET bottle labeled as Zen Essentials Vapor Distilled Alkaline Water, containing 9.5 pH water reinforced with electrolytes, in pack shaped like S’well reusable bottle, in black, red and white color palette that seems to riff on alkaline leader Essentia. “Escape,” urges copy on rear panel. “Find the peace and tranquility that your body craves. Find the balance that YOU deserve. Most importantly, find your ZEN . . . Better Water.” (That S’well silhouette had already been adopted by unaligned brand Sport Water, but that co went on hiatus this year while seeking new funding – BBI, Apr 8.) Still, for now, we can’t offer much enlightenment on Zen Water’s path.
CALENDAR: Rush of Shows Starts with Expo East in Baltimore Next Week; NBWA, NACS Shows Folo
Like breakers rolling into the Carolinas this week, specter is looming of 3 mega-shows hitting bev biz in quick succession: natural foods platform Expo East in Baltimore, NBWA beer wholesalers convention in Las Vegas and c-store expo NACS in Atlanta. Opening next Thurs, Natural Products Expo East offers a first and a last: it’s first edition that will include cannabis pavilion, but also last in Baltimore, having outgrown city and made commitment to relocate to Philadelphia in 2020. Info at ExpoEast.com.
After extended incubation period, NY-based Bear’s Fruit Kombucha has expanded its production capacity and is moving beyond its base in yoga studios to retail, starting with Whole Foods and establishing base of 350 accounts by now. Brand launched a coupla years back, operating out of modest kitchen of One Girl Cookie (BBI, Sep 11 2017) and had quietly seeded health & wellness channel rather than pursuing retail, in process making 2 moves, the latest to burgeoning Industry City makers complex in Brooklyn’s Sunset Park nabe, where weight of massive fermenters being installed is requiring another move, from upper floor to ground floor. “Hyperfocused on health & wellness studios” is how partner Amy Driscoll, a Zico Coconut Water vet, described early stages of campaign. (In keeping with brand’s motto, “Hard work bears fruit,” founder Chris Hill in recent months had been too busy keeping up with production to chat with BBI, but Driscoll stepped in this afternoon.) The brand is notable for its 10-oz glass bottles bearing silhouette of a bear cradling fruit and recipes that employ only organic fruits (not juices) and herbs, in flavors Blueberry Lavender, Pineapple Mint and Strawberry Jalapeno, about to be augmented by Lemon Rosemary. It goes out as “premium but accessible” alternative to the larger-size national brands, at $4.99, promo’d at $3.99.
Now, the retail push begins in earnest, in a major metro that’s barely mustered any local entrants, with Pilot, also out of Brooklyn, among the more prominent. By Driscoll’s account, the popularity of brand in yoga venues caught Whole Foods’ attention, starting in Mar with store in Brooklyn’s Gowanus nabe, and within 3 months brand was in all 46 Northeast region units via Rainforest distributor, which also carries Health-Ade as its national brand. Now Whole Foods’ Mid-Atlantic region, where brand already goes out via FreshDirect DTC co, is coming on, too. The co also is building foodservice biz via Driscoll Foods (no relation to Amy). Among mainstream grocers who’ve come aboard are Fairway, Shop Rite and West Side Market chains.
Tho founders had been self-financing venture in early stages, move to Industry City changed game, and they brought in small family round to finance push into retail. With brisk expansion they soon embarked on $1 mil round, getting more than halfway there before frenetic summer that included big Hamptons push put effort on hold until now. That round will support the broader distribution and round of hiring Bear’s Fruit is planning.
Driscoll said she and Hill feel comfortable offering clearly premium kombucha in smaller pack size, given scientific evidence that human body can only process 10 ounces at a time of kombucha’s nutrients, meaning the other 6 ounces in 16-oz bottle is just “extra calories and sugar.” Forthcoming labeling update from FDA mandating nutritionals for full-pkg size should highlight that, she believes.
In terms of bev partnerships, Driscoll and Hill, an animator who worked on Ferdinand and Ice Age, can be classified as having met cute, as website at BearsFruit.com recounts. The pair encountered one another by chance at big Brooklyn party “that neither was invited to,” as website recounts (him via a friend of a friend, her via a date that went down in flames after a single drink), so they decided to hang together, he cradling a potted plant he’d thought it would be nice to bring for the hosts. A kombucha skeptic, Driscoll recalls bridling when animator confided that he homebrews, but once she tasted the liquid she made the decision to leave Zico job at Coca-Cola, while he moved on from animation biz. Tho she’s not new to bevs, it’s been “wild ride” so far, she acknowledged.
Daytrip CBD Infused Sparkling Water, among cannabis plays that’s adopting lifestyle positioning, has embarked on $4 mil raise as hemp-derived brand begins to show strong velocities in initial retail accounts and diverse mix of distribution partners clambers aboard. Meanwhile, Bay Area co’s first THC entry was bottled 2 weeks ago at Berkeley, Calif, copacker and dispensary distributor Pacific Expeditors (Pac Ex) has been enlisted as distributor, ready to roll in Golden State as soon as mandatory 3d-party testing is completed, likely within a month.
Daytrip, recall, was launched out of Bay Area by former Fogdog Coffee exec Shawn Biega, who enlisted as an angel-round investor the former Rockstar #2 Joey Cannata, who viewed Daytrip as best trademark in space and was eventually coaxed out of retirement to run co as prexy (BBI, Apr 8). With team in place that’s deep in expertise in bevs and marketing, Daytrip offers 12-oz cans of hemp-based bevs containing 10 mg of CBD and is scrambling to enter gummy space, both by distributor demand and as highly ecommerce-friendly format. In marketing, brand emphasizes what Cannata likes to call “glass-half-full approach” as part of satisfying daily routine, with message promulgated via activations at beaches and street fairs and Instagram contests. SJR agency has been helping with pr, winning profiles on outlets like CNBC and Cheddar, and it’s about to pick up social media duties, too. Meanwhile, LMS marketing shop is handling celeb seeding, starting with recent posting from Mandy Moore (who last year had posited CBD as solution to discomfort of wearing spike heels). Others are due soon as brand ambassadors and/or investors, Cannata indicated. As noted, as these activities accelerate, Daytrip is ready to move beyond its $1 mil angel round, seeking $4 mil that can carry it thru next 18-24 months.
In discussion today, Joey said he’s been heartened to see Daytrip brand and positioning panning out not only at cutting-edge retailers like Erewhon – which accepted brand just 3 days after pitch and conferred 30 days of endcaps – but in more conventional environments like Sea-Tac airport store in Seattle, where brand has been blowing out 60 units per day to stressed-out travelers. “Great case study,” he argues. Among other retailers who’ve embraced brand are Lassens, Berkeley Bowl and Molly Stone’s in Bay Area, New Leaf and New Seasons in NW and Fairway in NY, where DSD partner Rainforest’s efforts are augmented by Boost Sales & Merchandising. Lazy Acres is picking up brand, holding out prospect a successful run there will get brand into sibling chain Bristol Farms. All told, Daytrip boasts over 1K indie accounts so far. Its most unconventional flavor, Cherry, has quickly raced to lead spot, with Tangerine, Lemon Lime and Coconut Pineapple flavors equally dividing the rest.
Among key activities, Cannata has been sprinting around the US building distribution – a challenging endeavor at time that uncertain regs have many established DSD houses sitting on sidelines or standing pat with 2-3 brands that hit market ahead of Daytrip. So Cannata, who energetically worked beer houses and Pepsi bottlers during his 17 years at Rockstar, has been building diverse array of wholesalers to get started while proving out concept and awaiting regulatory clarity. He’s keeping identity of some less-conventional distribution choices close to vest, as with partner handling Seattle metro, but among those he was willing to divulge are Hi Touch and Santa Monica Distributing in SoCal and Rock Island and Good Stuff in NorCal, along with Maletis and Bigfoot in Pac NW. In NY/NJ he’s going with Rainforest. Brand also has presence in Mich and is targeting houses in Texas, Florida and canna-friendly Ill among priorities. As brand builds its story, major DSD houses are showing greater interest, particularly as CBD inches toward regulatory clarity. “We’ve got some of the best California distributors ready, as soon as Assembly Bill 228 passes,” Cannata said, referring to key legislative package aimed at neutralizing feds’ skepticism about ingredient (see below). Meanwhile, co is seeking national sales mgr and staffers to work key markets like NorCal, SoCal, Portland and Seattle, and newer markets as they come along.
Holdup on Assembly Bill 228 in Calif Should Be Temporary, Exec Believes Cannata is well positioned to monitor regulatory situation in Calif: in his pre-bev career, well-connected Bay Area native managed Gavin Newsom’s reelection campaign for SF supervisor. Newsom, of course, now is governor. So how’s it playing out? Cannabis advocates suffered disappointment recently when AB 228 failed to pass Senate Appropriations Committee because testing mandate hadn’t been funded in fiscal 2019 budget. But Gov Newsom has convened policymakers at ag, economic development and health agencies to fine-tune program and Cannata says he’s fairly confident legislation will go thru early next year. That should unleash interest among distributors and retailers who’re on sidelines so far. Brand info at WeAreDaytrip.com
Bellwether Coffee Pulls in $40 Mil Series B to Expand Electric, Internet-Connected Roasters
Bellwether Coffee, which is out to democratize coffee-roasting via electric, Internet-enabled setup, has pulled in $40 mil Series B capital round led by DBL Partners and the brothers Lyndon and Peter Rive, the Berkeley, Calif-based co announced today. DBL, which pursues “double bottom line” strategy that looks beyond sheer investor returns, has invested in flock of clean-energy plays, including Elon Musk’s Tesla and Solar City ventures, as well as healthcare, infotech and sustainable products & services, including likes of Apeel Sciences, which combats food waste at grower level, and Revolution Foods, which aims to up the nutritional content of school lunches in Calif. The Rive brothers are cousins of Musk who segued from Tesla and Solar City to Zola Electric, another DBL holding, which is seeking to advance solar power in Africa. Also participating in raise were FusionX, Congruent Ventures, Coffee Bell, Tandem Capital, Spindrift Equities, XN Ventures, Balius Partners and Hardware Club. DBL founder and managing ptnr Nancy Pfund will join Bellwether board.
The Bellwether Roaster aims to make in-store roasting universal, even at small accounts, allowing operators to tap into library of roast profiles via Internet-connected touch screen and access green coffee (shipped in boxes, not burlap) from key growing regions, while curtailing emissions thanks to electric power source that eliminates need for gas lines and emissions control gear. “We expect in-store roasting at cafes and grocery locations to become the rule, not the exception,” said ceo Nathan Gilliland.
Goodbye to the Kitu Life? DeCicco Bros Now Own Super Coffee Trademark; Priming Pumpkin Pump
Where trademarks are concerned, “you can’t own ‘super’ and you can’t own ‘coffee’ and you can’t own ‘super coffee,’” allows Kitu Super Coffee cofounder/ceo Jim DeCicco – unless you’ve made a splash with that name on Shark Tank and sold millions of bottles over past three and a half years. That was enough for Kitu’s counsel, Polsinelli’s Chuck Cotter, to convince trademark regulators to greenlight trademark as of last week, lessening reliance on Kitu (formally Kitu Life) as part of brand name and allowing co to fend off any others seeking to employ name for coffee with benefits beyond sheer caffeine. DeCicco noted that Vitaminwater and Smartwater had traversed same hurdles to lock in those trademarks; just as those brands have since retained Glaceau, Kitu Life won’t be entirely banished, he indicated.
News came as Super Coffee became latest to throw hat into pumpkin coffee game for fall, teasing consumers in recent weeks with word of forthcoming flavor formally unveiled this week as Maple Pumpkin, riding in wake of Starbucks’ Pumpkin Spice Latte mega-seasonal. It’s out in brand’s Super Coffee, Creamer and canned Espresso formats. “Everything Nice. No artificial spice,” co assures. No worries about being seen as riding coattails of Big Coffee with this one? “We did Maple Pumpkin for the same reason we started Super Coffee, which is all other PSL options are loaded with sugar and empty calories,” replied Jim, who runs co with brothers Jordan and Jake. “Our Maple Pumpkin line achieves the same indulgent satisfaction without sugar and only 80 calories” thanks to use of monk fruit as sweetener. It contains 10 g of protein and 5 g of MCT oil. Seasonal line has been picked up by likes of Wegmans, Target, HEB, Stop N Shop, Jewel Osco and Giant.
NEW PRODUCTS: Brew Dr Musters Yerba Mate, Guayusa, Green Tea for Caffeinated Booch Called Uplift
Brew Dr Kombucha is offering its first caffeinated entry, dubbed Uplift, offering 130 mg energizing payload thanks to the use of yerba mate, guayusa and green tea. New entry from Portland, Ore-based teahouse operator is breaking in Whole Foods. It also offers slightly sweet flavor that might entice those with a taste for iced tea, the company indicated. By contrast, the tea in kombucha generally yields about 15 mg of caffeine while an 8-oz cup of coffee contains about 95 mg. Tho co is describing it as pioneering offering, there are some significantly caffeinated kombuchas on market including what used to be called Up Beat (now Mocha Java Coffee) from Peet’s Coffee-controlled Revive in Bay Area. Uplift is breaking in co’s core 14-oz glass bottles across all Whole Foods regions this month, but soon expanding to retailers like Safeway, Albertsons, Vons and Pavilions.