Beer Marketer's Insights
Coca-Cola has named one of its Latin America execs to newly created post of vp of World Without Waste Operations, reporting to prexy/coo Brian Smith. Louis Balat, who’s been serving as Colombia-based vp of Stills & Emerging Brands for Latin Center biz unit, gets mandate of “overseeing the operationalization” of KO’s World Without Waste initiatives globally. Balat has spent coupla decades at Coke, starting in Mexico, where he rose to regional gm, then working on noncarb biz, including integration of acquired Jugos de Valle juice co into red system. He also served in gm roles in Colombia and Ecuador and ran Andina franchise in 3 LatAm countries before taking current role, as Smith pointed out in internal memo. He’ll be relocating to Atlanta in coming months.
As anticipated, Voss Water today is breaking new campaign featuring investor/advisor Dwayne Johnson that features behind-the-scenes glimpses of actor/producer known as The Rock in wide-ranging roles orchestrating his multifaceted career. As reported, video and outdoor campaign is intended to broaden usage occasions of high-end Norwegian import from occasional indulgence to everyday refresher. Video shows Johnson (and his French bulldog) in his art-festooned home engaged in activities that seem to run from reviewing scripts and business plans to painting and scribbling notes. “I’ve come to learn over the years that the life you envision isn’t just handed to you,” he says in voiceover. “You know what works? Getting up every day and making it happen yourself. Play to your strengths, face your weaknesses, and don’t be afraid to get your hands dirty.” His conclusion: “In this life, you get out what you put in,” he states, as new ad slogan emerges on visual: “Live every drop.” Creative is from Johnson’s own agency, Seven Bucks Productions, via its agency Seven Bucks Creative, shot by Hiram Garcia and directed by Jon Brandon Cruz. We offered discussion of broader strategy into which new campaign fits this past Fri. 
Vita Coco is about to become one of the more established RTD bev players to enter the hemp space via imminent launch of 12-oz canned sparkling line in NY via indie DSD house Big Geyser. Vita Coco Hemp Infused sports 20 mg of hemp from established supplier whom it’s not ready to identify yet, who helped devise product. Base is blend of coconut water, sparkling water and natural flavors with no sugar that’s similar to base of co’s canned sparkling coconut water line, but with this intro co is moving in more experimental flavor direction with Ginger Apple, Lemon Cardamom and Cloved Orange. It’s just 20 calories per can. SRP is $4.99, at approachable end of scale for entry with this much hemp. Co had hoped to be on shelves by this week but encountered challenges finding copacker willing to run hemp item, at time canned capacity is very squeezed to begin with. First run should occur in a week or so, to hit official launch date of Sep 10.
Jane Prior, evp for global brand strategy & development, said Vita Coco seems to fall into that “sweet spot” of larger companies that aren’t so large that they’re reluctant to take risks in as fluid a sector as hemp/cannabis is right now, on account of legal and regulatory uncertainties. As agile independent, Vita Coco figures it can pivot as needed to comply with regulatory scene – as it already has done, in fact, in moving from CBD line shown in mockup at Expo West in Mar (BBI, Mar 11) to one positioned as hemp-infused in keeping with where regs seem to be right now in launch markets. As brand with already trusted reputation in core coconut water biz, Prior is hopeful the hemp entry can serve as door opener to category for many consumers. Given reluctance of most big chains to carry hemp bevs yet, and their extended onboarding processes, it made sense to partner with Big Geyser in reaching NY’s thousands of up-&-down-the-street accounts. This will be 2d new product, following Ever & Ever canned water, to go with Geyser rather than Vita Coco’s national distribution partner, Keurig Dr Pepper, but as Jane noted, the big bevcos are staying on the sidelines for now, even as Geyser is already familiar with the space (by virtue of carrying Recess brand). Also soon entering mix will be other DSD houses in “friendly” states on regulatory side, Jane said, with details likely at official launch next month.
Vita Coco Hemp Infused is occurring as Prior reports that Big Geyser has gotten Ever & Ever canned waters off to flying start, focusing initially on foodservice channel as Vita Coco ramps production to meet demand. Brand has cracked such landmark accounts as NY Botanical Gardens and UN hq along with corporate accounts like JP Morgan and Morgan Stanley that lately have ousted plastic-bottle waters over sustainability concerns. To help with build, co has brought aboard former Vitaminwater and Hint exec Dan Gollin.
Meanwhile, core biz is showing signs of renewed momentum thanks to launch of Vita Coco Pressed extension and viral marketing campaign that enlisted grouchy online raters to prove that rich flavor makes Pressed “impossible to hate” (BBI, May 15 and 16). Thanks to aggressive online and outdoor ad campaign – stoked by bottle of urine that Vita Coco notoriously sent to rater who said he’d rather drink pee – consumers have been flocking to try new entry, which has quickly leapfrogged Pineapple as #2 Vita Coco sku behind Pure across all channels. (In Whole Foods stores in UK, the 1-liter Pressed is already #1.) Pressed obtains richer mouthfeel and flavor more akin to what some consumers expect of coconut via addition of touch of coconut puree.
After 4 years of quiet experimentation, online purveyor of artisanal NA bevs sourced in Europe and Quebec has enjoyed enough success in restaurant trade to revamp website and step up marketing in order to begin reaching out directly to consumers, too. The Washington, DC-area company, Delmosa, is building portfolio of non-alc ciders, sparkling rhubarb drinks and musts that have won a following in restaurants with minimal marketing so far, its founder, Bruce Blosil, tells us. So far effort has been self-funded by Blosil and his wife Tammy, and he says it recently moved into positive cash flow situation. Co also does its own fulfillment for both wholesale and retail customers after 6-month experience with outside fulfillment house didn’t work out. Given logistics of large-format glass bottles brought in mainly from Europe, focus so far has been East Coast, but Blosil plans to establish West Coast warehouse to build on growing demand in thriving food scene there. He’s testing his brands in handful of wine stores, too, tho he’s realistic that limited or seasonal nature of many of his offerings makes that a challenge in channel that puts premium on reliability of supply.
Blosil offers familiar story from entrepreneurs in space: former journalist and his wife were foodies and non-drinkers frustrated at what they viewed as unsophisticated offerings available when they went out to dine. So they decided to offer one-stop shop for artisanal NA bevs with rich mouth feel, differentiated terroirs and sensory bottle experience. Discovering that small European makers of ciders and other terroir-driven alc bevs were turning their hand to NA bevs, Blosil realized they could be rich source of brands to bring into US that melded “the beauty of earth and artistry,” as website homepage heralds. “They were a lot further along” than fledgling efforts in US to bring more pizzazz to NAs, Blosil recalls thinking. “We’re not anti-alcohol,” Bruce was quick to emphasize, citing wine lovers and other imbibers who’re loyal customers for the many occasions when they’re not consuming alcohol. Still, sobriety movement is lending further momentum to effort.
Jorg Geiger is good example: 7 years ago the German cider maker turned to making NAs, placing foraged heirloom apple and pear varieties at center of still and sparkling lines. Grown on mountain slopes near Schlat, the “meadow fruit” had developed deep root systems that pulled up healthy dose of minerals from the soil, adding complexity to flavor. The resulting line of what co calls Priseccos melds the fruit with herbs, spices and sometimes pressings of leaves and branches in flavors like Summer Pear and numbered Cuvees. Mildly carbonated Cuvee #7, for example, employs juice of damson plums and perry pears along with bronze fennel, lemon verbena, mint chocolate and spices. Lending further appeal to brand, Blosil said, is Geiger’s willingness to pay 2-3X the market rate for fruit he procures from outside his own orchards, as well as his efforts to lobby EU for protected status of orchards. So he’s doing what he can to protect the terroir and sustain a way of life.
Also in portfolio are drinks from former Parisian sommelier Eric Bourdelet, who returned home to family’s apple and pear orchards in Normandy, and Quebec brand called La Rhubarbelle, from former corporate marketing exec who discovered rhubarb bevs in France and decided to grow her own varietals back home, yielding sparkling Le Petillant de Rhubarb. Aceto Niagara, from maker of icewine in Ontario, offers range of drinking vinegars. Blosil said he’s also begun to play a role in developing concepts, partnering with former Absolut exec in Sweden on NA bevs with fuller mouthfeel. After concluding that paid ads on Google are a money pit, the Blosils are planning to focus on social media to build consumer awareness. They seem to have much to build on, as most of their suppliers offer intriguing back stories on delmosa.com.
Maybe this plant-based thing is for real. That seems to be message from investors in wildly oversubscribed new fund announced by PowerPlant Ventures, the VC firm set up by Zico Coconut Water founder Mark Rampolla in 2015, 4 years before Dunkin’ chain deemed the time right to offer plant-based sausages to its donut aficionados. Looking to rev things up to $100 mil range from $42 mil initial fund, PowerPlant ended up raising $165 mil and still turning away investors throwing another $35 mil or more their way, Hermosa Beach, Calif-based firm told Wall St Jnl. Its most successful exit, Beyond Meat, which recently IPOed, couldn’t have hurt the pitch but doesn’t tell the whole story, said partner Dan Gluck. “It’s more than the valuation of Beyond Meat that is driving everyone to the sector. It’s pent-up demand from investors who are tired of the big food conglomerates. There are so few ways to express what is really happening with the industry in the public market, which is why we are seeing all this excitement in private food companies.” PowerPlant now will be leading investment rounds with $4-8 mil checks, vs the $250K-$3 mil checks it often wrote as subsidiary investor in first round, as it focuses more on firms with revenues in $5-10 mil range, Rampolla told BevNet. It anticipates doing 3-5 deals a year, 12-15 all told.
Tho Zico, which he sold to Coca-Cola, certainly would qualify as a plant-based item, Mark told WSJ that his eyes fully opened to potential of segment after he invested in Veggie Grill chain, whose cofounders Kevin Boylan and TK Pillan have joined him as PowerPlant Ventures partners, along with former Health Warrior cofounder Gluck. Among investments in first fund were one big winner, Beyond Meat, and one conspicuous dud, Juicero. Others have included dairy alternative producer Ripple, plant bevco Rebbl, snack maker Beanfields and Thrive Market. New fund already has deployed some of its cash via pair of investments: in wellness shot marketer Vive Organic and nutrition brand Your Super.
Voss Water finally is coming out of hibernation in North America. New alliance with Fast & Furious star Dwayne Johnson represents not just a new creative angle intended to broaden Norwegian import’s relevance but decisive move into brand activation that capital-starved co couldn’t previously afford. “It’s a stake in the ground,” said global marketing dir Ariel Boorstin during conversation at co’s NY offices earlier this week. “The company has been through a lot and this is a rallying cry for the organization, a new foundation on which everyone can grow.” The broadly popular Johnson should help co’s efforts to “invite more consumers into the fold” and broaden product range into potential segments like energy and recovery, efforts in which he plans to be directly involved.
As reported (BBI, Dec 27 and Jul 23), Fast & Furious anchor known as The Rock has committed to minority stake and active role ranging from ad creative to product development, continuing trend that’s seen A-list stars get involved in brand activities ranging from devising TV ads (as Kobe Bryant has done for Body Armor) to joining sales calls on chain accounts (Mark Wahlberg for Aquahydrate). DJ joins Voss franchise that, after enjoying invigorating years-long US turnaround under past ceo Jack Belsito and his team comprised heavily of his former Snapple colleagues foundered, due to lack of investment, aggressive promos by rivals like Pepsi’s Life WTR, tilt in focus to Asia and other factors. Belsito and then his successor Joe Bayern moved on, former marketing chief Ken Gilbert (another ex-Snapple hand) exited and co experienced sharp staff cutbacks, with an investor, Rich Owens of Juggernaut Capital, stepping in to steer the ship. A deal Belsito was negotiating to enter Pepsi system as high-end import was semi-sidetracked when PEP decided to focus most of its efforts behind Life WTR launch, leaving Voss to enter just a handful of regions at retail level, tho it’s national within Pepsi’s powerful foodservice org. For brand that was built on-premise and had steadfastly said “no” to retailers like Walmart, big retail component to alliance might have jumpstarted key channel where high-end brands are resonating these days. In Asia, meanwhile, key investor Reignwood Group – powerful Red Bull distributor in region – has made aggressive inroads, pursuing bifurcated approach that’s continued Voss as a glass-bottle Norwegian import while also offering locally sourced plastic bottles at more affordable tier.
So Johnson deal means domestic franchise no longer is languishing in shadow of Asian focus. For brand that’s tended to tie itself to sophisticated, high-end occasions like gourmet meals and wine tastings, DJ’s entry is game changer. His Fast & Furious franchise spans 8 films dating back to 2001 and just is releasing first spinoff, Hobbs & Shaw, with several more films in works extending into 2022, per movie sites. To Boorstin, the connection to DJ, as she calls him, holds potential to move Voss beyond emphasis on its quality and Norwegian source, making it a bit less elitist and more relevant to active doers among consumers, given DJ’s widely varying activities beyond acting that will be highlighted in creative breaking Mon under rubric “Live Every Drop.” Media mix will include online videos offering behind-the-scenes glimpse of Johnson’s lifestyle as well as outdoor ads. The digital component, about 70% of mix, will target Voss’ aesthetically and culturally minded consumers, age 18-34 and skewing a bit female, as well as next-older cohort. Voss users who’re career-focused and travel a lot should be intrigued by those glimpses, shot in tones that range from relaxed to serious, Ariel believes. “He’s his own media platform,” she said. “He has a powerful voice.” She wouldn’t disclose budget but said it’s “more than we ever spent before.”
Fast & Furious franchise, and DJ himself, boasts huge following in Asia, where Reignwood has been making its push. Even so, Boorstin acknowledged it wasn’t easy getting buy-in from all constituencies, as Voss investors and execs analyzed whether DJ was right fit for where brand wants to go and whether ROI would pencil out. That left marketing chief Boorstin and her team in tricky position of spending months mapping out creative strategy with DJ and his team with no certainty that deal ultimately would come together. It was only inked on Jul 2. Johnson’s own agency, Seven Bucks Creative, has produced the ads. Boorstin said Johnson had been known to be avid user of brand, and approach about alliance was thru his mgr Dany Garcia (his ex-wife) and management co WME. “He was the only person we approached,” she emphasized.
As noted, Johnson also will be involved in product development, again with a view to broadening brand’s reach. Boorstin said such segments as energy and recovery are likely focuses where Voss’ image of trust, quality and premium can resonate. (Voss’ youthful founder Ole Sandberg, long out of picture, had launched nightclub-oriented energy item that wasn’t really branded as Voss item and proved a short-lived distraction.)
Meanwhile, given celeb-driven orientation PepsiCo has in its marketing, the DJ connection would seem to hold potential to coax Pepsi into broadening retail footprint of Voss, particularly at time that Fiji Water’s exit from DSD has opened up shelf space in import section. Boorstin didn’t rule out that possibility but said she had nothing to report. “Life WTR has been a resounding success within their system but we’ve been clear that there’s room for both. We have different consumers and competitive set than Life WTR.” In separate conversation this week, co’s prexy of Americas sales, Mark Zettle, said that after initial acclimation period, the foodservice alliance with PEP has panned out well over its 18 months so far. “It’s unlocked all the doors we hoped it would,” helping brand penetrate accts like HMS Host and Travel Traders and winning it access to Pepsi foodservice partners Sysco and US Foods.
On other fronts, Voss like other bottled water cos is working to improve sustainability, at time some of its corporate accounts are going plastic-free. It’s considering aluminum cans as part of mix, with slim-can flavored sparkling waters currently testing in EU. And it will finally step wholeheartedly into multipack game next year, for first time incorporating its plastic bottles into format via 6-packs of half-liter and 850-ml bottles. That required a step-change on supply chain but was overdue move, Mark said.
Sam Wilson has moved on from role building distribution for Bang Energy marketer Vital Pharmaceuticals (VPX). Former Gallo, Boston Beer and Red Bull exec confirmed his departure to us this morning but didn’t offer a reason. During his run he helped increase distribution network from 64 houses to 288 for broad off-premise penetration, while building sales team from 4 to 42, he noted. Sam said he hasn’t settled on next direction yet but has commenced several discussions as word has trickled out about his departure. Florida-based VPX, of course, is riding a hot hand with Bang, which has exploded on energy scene over past coupla years, but is also known for being challenging work environment. Wilson wouldn’t go there, tho: he just said he felt he’d accomplished great things for powerful brand and was ready to move on.
By coincidence, several other people moves we’re reporting today feature past Red Bull execs like Wilson, seeming testimony to energy player’s role as influential finishing school for sales and marketing execs, much as Gallo, Seagram, Snapple and Boston Beer have been in past. Here’s rundown:
Humm Kombucha cofounders Jamie Danek and Michelle Mitchell have brought in well-rounded biz leader named Matt Witherell to serve as prexy, a newly created position. Witherell brings 20+ years of experience in general mgmt, strategy, finance, sales and cross-functional team leadership for cos like Red Bull, MillerCoors, JPMorgan Chase, Barclay’s Capital and Deloitte Consulting, per announcement from Bend, Ore, co today. He’ll report to Danek, who continues in ceo role. Humm, recall, has been broadening reach of its approachable, lower-sugar brand, often via DSD partners, tho it recently eased off plans to build East Coast brewery in Va . . . Stratus Group, which is looking to create broad bev portfolio alongside its current Koe Kombucha and Perfect Hydration brands, has brought aboard Louisa Lawless as its first chief strategy officer, based in its LA office. Role calls for Lawless to “build multiple natural beverage brands, starting with Koe Kombucha and Perfect Hydration, through the development and execution of corporate strategic initiatives,” per the co, part of Golden West Food Group. Recall co also had launched cold-brewed coffee called Bowery that was later pulled back (BBI, Oct 24 2016) and also has partnered with Icelandic Glacial on some sales initiatives. Lawless most recently served as CSO for Core Nutrition before its sale to Keurig Dr Pepper, after 5-year run as gm/dir of natl accts at Red Bull North America . . . LA-based CBD player Ignite International said it’s named Oliver Holzmann as global head of marketing, reporting to prexy Jim McCormick. Holzmann most recently served as marketing vp for Red Bull North America. Founded by poker pro and party animal Dan Bilzerian, Ignite recently undertook a rebranding of its CBD items, which include vapes, drops and topicals but not yet bevs . . . Turkey Hill, which manufactures refrigerated bevs and ice creams, has named ice cream vet Tim Hopkins as its new ceo, succeeding John Cox, who steps up to chmn’s role. Among Hopkins’ 35 years of experience is 17-year run at Friendly’s Ice Cream, as well as stops at ice cream novelty maker PLM Operations, Dannon, Bestfoods and Pillsbury. As Shelby Report reminded, co was acquired by affiliate of Peak Rock Capital in April and is no longer affiliated with c-store chain of same name owned by Kroger.
If deal we’re hearing comes to fruition, it would mark end of an era for innovative bev segment: influential LA-area distributor Haralambos Beverage Co is in sale talks to Miller Coors and Heineken beer house Classic, multiple sources are telling us. Haralambos, of course, has played key role in incubation and ignition of countless altbevs from Snapple to Vitaminwater to Bai to Essentia, suffering ups & downs as bev and beer brands migrated away to larger systems but always landing next generation of hot brands. Along way, owner Tony Haralambos has proved adept at harvesting buyouts and, often, equity participations as brands he’d helped incubate were acquired. But in extended conversation just a coupla weeks ago Tony gave no indication he was thinking of moving on, and reached this morning he told us there is nothing to report. Our sources don’t include anyone inside either HBC or Classic, and of course even if some contacts are occurring that doesn’t mean any deal will come to fruition.
Classic, based in City of Industry, also distributes Boston Beer brands, along with raft of craft beer and cider entries, from Alaskan Brewing and Rogue to local brands like Bootlegger. But its NA portfolio isn’t comparably developed, with Jarritos, La Croix, Everfresh and Nestle Waters entries like Acqua Panna and Pellegrino among handful of NAs listed on its website. HBC’s current portfolio includes likes of Snapple, Sparkling Ice, Essentia and C4 Energy. So if most Haralambos portfolio brands choose to make transition to Classic, beer house’s NA biz would dramatically increase. Haralambos recently hived off small remainder of its beer portfolio to Classic, and one contact said he’s heard that if a sale does occur, Tony will keep central Alta warehouse that he owns with former sales vp Gary Levitt, tho it’s not clear for what purpose. Among alternatives around LA for unaligned brands seeking representation are indie house LA Distributing, which has been aggressively recruiting new brands and could be beneficiary of Haralambos sale, if it happens. Bud network in area is dominated by Anheuser-Busch-owned “branch” operations that don’t carry non-A-B brands, further complicating jigsaw in vital early-adopter market for cutting-edge bev brands.
After reporting a blowout quarter last week, Starbucks probably isn’t hearing any footsteps. Still, Dunkin’ Brands Group’s 2d qtr results included signs that its $100 mil bet on democratizing espresso is paying off big time, with espresso-based lattes and cappuccinos soaring 40%+ over prior-year levels. “Espresso, a critical component of our beverage-led strategy, is now our fastest growing category,” reported cfo Kate Jaspon. “The introduction of Dunkin’ Handcrafted Signature Lattes was a key contributor to total espresso growth and helped drive our second quarter performance, including 1.7% growth in Dunkin’ US comparable store sales, and nearly 8% operating income growth for Dunkin’ Brands.” Dunkin’ ceo Dave Hoffmann said revamp rolled out last Nov has brought “terrific repeat” biz, larger register rings and brought in new customers even as it’s coaxed existing drip customers to broaden their horizons. Dunkin’ seems to have taken pains in offering the Signature Latte extensions in flavors like Blueberry Crisp that don’t directly overlap with items found at Starbucks. The espresso-based drinks now comprise about 10% of overall coffee mix. They’re often rated as highly as Starbucks’ items but come in a buck or 2 cheaper, and were fueled this past winter and spring by $2 afternoon deals at many stores. As reported last year, Dunkin’ had committed $100 mil to equipment and training behind rollout.
The espresso news came in report in which Canton, Mass-based co just missed Wall Street’s revenue expectations but beat the earnings target. Dunkin’ same-store sales growth came to 1.7%, also beating expectations, while Baskin-Robbins sales growth slipped 1.4%. All told, revenues grew 2.5% to $359.3 mil. Adjusted operating income rose 7.5% to $127.3 mil. For Dunkin’-branded US stores, revenues rose 5.8% to $166.6 mil despite decline in franchise fees as co incented its partners to invest in Next Generation store redesigns featuring draft bev bars and enhanced bakery displays.
By now, nearly 300 Next Gen stores are in market as result of new openings and makeovers, with co working with franchisees over past 9 months to optimize blueprint and officially releasing latest iteration on Jul 1. Co has kicked off a wave of 600 Next Gen stores, with execs anticipating there will be 500 by year-end, as franchisees double their historic rate of remodels in anticipation of benefits new format brings. Hoffmann boasted “solid alignment with franchisees” on Next Gen as it delivers strong results in driving customers to purchase premiumized bevs like lattes and cappuccinos, improves performance of baked offerings and enhances mobile order & pay process. “Modernizing while staying true to our core,” he assured investors, referring to Blueprint for Growth that tries to maintain brand’s approachable roots while adding more sophisticated offerings like draft cold-brew and well-crafted lattes.
Not much said about packaged brands sold under Dunkin’ and Baskin names, tho they brought in nearly $500 mil at retail for YTD. That amount included K-Cup biz that’s growing nearly 8% – 6X the category’s overall growth, as Hoffmann noted – as well as bottled coffees produced via partnership with Coca-Cola. Bottled line brought in nearly $80 mil, Hoffmann indicated.
One disconnect with Wall Streeters on call this morning was statement by Hoffmann at end of his prepared remarks that Dunkin’ will “evaluate all options for generating returns for our shareholders and franchisees.” That’s phrase more commonly heard from ceo’s who’re under pressure for poor results – emphatically not the case here – so analyst wanted to know precisely what that meant. Hoffmann said it means execs there will “continue to evaluate what’s best for the business.” So it doesn’t necessarily mean any strategic milestones are looming for coffee-&-donuts purveyor.
FANCY FOOD SHOW: Avocado Leaf Tea Promises Antioxidant Boost in Plain, Flavored Varieties
Among newer ingredients that’s being commercialized these days, recent Fancy Food Show in NY brought bagged tea made from avocado leaves. The purveyor is Avocado Leaf Tea LLC, which hand-picks the leaves from avocado groves surrounding its Southern Calif base in Temecula, claiming to draw on Mayan and Aztec traditions spanning back to 13th century. (So concept is both new and not so new.) Husband-&-wife team of Scott Wibbenmeyer and Sharon Colona claim to have perfected patent-pending production process that protects leaves’ “super-antioxidant benefits.” The teas are offered in core Natural Avocado Leaf entry, caffeinated Black Tea entry and range of flavored, no-caffeine offerings: Chamomile, Peach and Lemon.