Beer Marketer's Insights
New Campbell Soup made further headway on sweeping divestment program that’s already seen departure of Bolthouse Farms with agreement to sell its Kelsen snack biz in Asia to Ferrero for $300 mil, as Camden, NJ-based co refocuses after acquisition of Snyder’s-Lance snack co. Sale of Danish co, with big sales in Asia, enables co to pay down debt while narrowing focus to core N Amer biz, said ceo Mark Clouse. On bev side, V8 is still part of mix, even if co has abandoned push into refrigerated bevs via Bolthouse.
CBD player HeavenlyRx Ltd has closed on its $9 mil investment in Jones Soda, offering financial resources that might finally get the topline of Seattle-based boutique soda brand growing again, even as partners devise longer-term strategy to participate in anticipated cannaboom. Deal “is more strategic than just CBD,” cautioned evp sales Steve Gress in conversation this morning, noting that ceo Jennifer Cue had previously shown herself disciplined enough to pass on promising financial transactions that didn’t make sense from broad strategic view. This deal emerged naturally from contacts the Canadian-born ceo has in Canada’s biz community, including top brass at SOL Global, which controls HeavenlyRx, and moved fairly quickly from initial discussion, Steve said. As part of deal conferring 25% ownership to HeavenlyRx, that co’s ceo Paul Norman, a Kellogg vet, takes a seat on the JSDA board; HeavenlyRx will add another board member later. Gress noted that Norman and his colleagues bring a wealth of CPG expertise and biz connections at retailers and restaurants. The new capital should finally enable JSDA to drill deeper into key markets like the Pac NW, Southwest, Texas and Canada with basic marketing support, backing DSD wholesaler network that includes likes of Columbia, Hensley, Lenore, Haralambos, Geyser Bev, Kimball and New England Beverage, while accelerating push to make Jones a fountain mainstay at quick-serve chains and devote greater attention to Lemoncocco Italian-style refresher. As for CBD, Cue has previously struck cautionary note, reminding investors that co must be careful not to alienate gatekeeper moms who often purchase core soda line at grocery for their kids. At same time, its base in legalized state, renegade brand identity and high profile in Canada make Jones Soda a logical candidate to find role in emerging cannabiz.
Deal calls for HeavenlyRx to acquired 15 mil common shares representing about one-qtr of co with warrant to acquire 15 mil more shares that would increase its ownership to 39% range. With some restrictions, HeavenlyRx can also make open-market share purchases. And it can unload them at any time, too, co noted.
New Age Beverages has completed acquisition of marketing and incubation firm Brands Within Reach, setting up co’s offices in NY suburb of Mamaroneck as new operations hub alongside Denver base and Salt Lake City plant and offices of its prior acquisition, the $150 mil noni player Morinda. As reported (BBI, Jun 3), BWR sale included $2.5 mil to clear debt off books, $500K to sellers, including founder/ceo Olivier Sonnois, and issuance of 700K restricted shares. Deal fortifies NBEV portfolio by bringing in BWR client brands including Nestea RTD teas, Evian, Volvic and Saint-Geron waters and Illy RTD coffee, for whose owners BWR manages varying mix of channels and responsibilities in N Amer. For BWR, for whom working capital always was a constraint, it offers financial running room along with access to formidable ecomm operation and Asian consumer base of Morinda, which has major production, fulfillment and marketing operation in Salt Lake, Sonnois told us this afternoon. Olivier now presides over marketing operation that overnight jumped from 4 people to 10, along with sales org, with all he decision-making occurring under 1 roof in NY. He’s already gone to work evaluating next steps for NBEV-owned brands like Xingtea, Coco Libre and Bucha and the licensed Marley brand, with view to determining which if any holds potential to be grown into $100 mil brand over next 3 years or so, as complement to Morinda. He said NBEV will grow those brands, create its own or acquire brands that enable it to wield significantly scaled brands.
A lot of resources also are being directed vs NBEV’s previously announced CBD push, tho timetable depends on when regulatory clarity arrives. Employees will be able to stay in place where they are, with Sonnois on a brisk travel schedule visiting each of the western offices at least every other week. Olivier noted that it had contemplated opening a NY-area office on its own to help build biz in Northeast corridor. Recall that NBEV uplisted to Nasdaq in recent years, too, elevating its profile among NY money mgrs.
In describing deal, NBEV has predicted it will find $1.5 mil in cost savings while adding over $10 mil to topline over next 18 months as brands are cross-sold and BWR brands move onto New Age’s DTC platform. Sonnois said that effort is well under way already.
Nestea Powders Are Latest into BWR Fold Even as acquisition was closing by New Age Beverages, Brands Within Reach portfolio continues to grow. Latest in: Nestea powders, $20 mil biz from which parent co Nestle Foods was progressively disengaging. As powders got harder to find on shelves, BWR staffers were finding they were receiving 15-25 calls per week on the Nestea RTD phone line asking where the powders could be found. That spoke to “enormous emotional attachment” to brand that New Age/BWR should be able to capitalize upon, Sonnois and Nestle execs concluded. In any case, it makes sense to unify mgmt or RTD and powder brands, Olivier reasons. So not long after restaging Nestea RTD as cleaner, less sugary line, BWR team will go to work on updating the powders too and moving them more broadly thru New Age’s system.
The bev biz this week lost one of its more colorful, adept practitioners with the passing on Wed night of George Kalil at age 81. The exec often characterized without irony as “the good guy” built Kalil Bottling Co founded in 1948 by his father Fred and grandfather Frank into major indie distributor and copacker, operating fleet of 700 trucks out of 4 locations across Southwest with mix of Keurig Dr Pepper-aligned brands and unaligned ones. Along the way, George displayed an uncommon eye for new brands that would go on to broad success, despite a work routine that didn’t have him arriving at the office until afternoon most days. “He was a wonderful man who called me every other week and always was a strong proponent of my brands,” said entrepreneur Lance Collins, who incubated his Fuze, Body Armor and Core Water brands within Kalil’s operation. “His distributorship always was in my top 5 in terms of performance.”
Kalil built rep in industry as demanding negotiator with fearsome contracts, and locally as rabid Univ of Arizona Wildcats basketball supporter who missed only 2 road games in 35 years, as Tucson.com reported. George, who never married, often described his life as “soda and basketball,” catching cabs between games on those road trips to do store checks. “There’s a lot of similarities with basketball and our business,” Tucson.com quoted him as saying once. “You can’t win them all, and you can get sideswiped.” He’s survived by 6 siblings, with whom he owned Kalil Bottling, and dozens of nieces and nephews. In early days George served as mentor to his younger brother John, now 67, who serves as vp/gm and has taken increasingly hands-on role. In statement issued to local media, John said his older brother “loved this company and everyone in it like you wouldn’t believe. He was the ultimate Good Guy. He never wanted to retire. He often expressed his desire to never stop working at Kalil Bottling Co, and he didn’t. George engaged life all the way until the end. Please keep George and our family in your thoughts and prayers.”
At fellow distributor and bottler Nor-Cal, new biz development chief Pete Grego described Kalil as “a pillar of our industry. He was an early pioneer in developing what was known as ‘evergreen’ contracts with suppliers. And that has served him and his company well. When George came into a room, or a basketball arena, he commanded the attention of everyone. He was the epitome of a ‘good guy.’” But Kalil was also tough, gruff and demanding. One longtime supplier recalled throwing Kalil a testimonial dinner, only to have his phones blow up the next day because the bottler was unhappy over some issue. Collins recalled: “He always called me late in the day: if he couldn’t get the promotion he wanted at QuikTrip from my guys, he’d just call me directly.” Still, “he was a gentleman.” Mike Weinstein, who supplied Kalil Bottling over the years with brands like RC, Mistic and Snapple, noted with affection, “I’m going to miss his 10 PM calls complaining about ‘your f-ing company’ years after I no longer worked for Snapple, Cadbury or DPS.”
Dairy-based protein marketer Iconic has signed on as first protein drink/powder player with ASPCA’s Shop With Your Heart program, which monitors and certifies animal welfare standards, with commitment to have all its dairy certified and labeled by next year. Move comes at time that Iconic’s much larger dairy rival Fairlife Farms has ignited furor with release of video showing cruelty to cows at one of its member farms (BBI, Jun 6) . . . Looking to build out wholesale biz, David’s Tea chain has placed its tea sachets in another 1,250 store doors in Canada, including 800 doors added to 400 Loblaw’s grocery and pharmacy units that already carried line.
Up Mountain Switchel has undertaken packaging upgrade and augmented its line of canned sparkling Swizzles, while selectively adding retail banners to its footprint. In one recent move, they’ve opened up Southeast via Fresh Market’s 178 stores. Over eventful year that saw cofounder Garrett Riffle quietly depart co, Up Mountain is within 90 days of anticipated closing of sub-$1 mil convertible note to sustain operations, said co’s remaining cofounder, Ely Key. Tho Up Mountain boasts Anheuser-Busch’s Zx venture arm as minority investor, so far the brand isn’t traveling on any Bud trucks, despite what Riffle had told us before he left was effort to see if there might be a fit. (Ely told us that effort was news to him.) With Garrett out of mix, co is being operated by Key and vp sales Sam Smith-Stevens, who’s been with co almost from the start.
As co gropes toward finding best positioning, it’s been undertaking packaging tweak that better calls out health benefits as “hydrating energizer” rather than relying too heavily on drink’s traditional colonial heritage, while also adding such touches as die-cut label. But it’s retained 16-oz Snapple-style widemouth bottle for the core noncarb Switchel line and SRP of $3.99 is unchanged.
Meanwhile, the shelf-stable Swizzle has been working well enough as canned item priced at $2.99 (promoted at $1.99) to warrant expansion from single sku to 3 sku’s with addition of Orange Turmeric and Lemon flavors to Original entry. Move of production to Castle Co-Packing outside Pittsburgh has enabled USDA organic certification, too.
Adrenaline Shoc creator Lance Collins has followed thru with threat to go after his former colleague Jesus Delgado-Jenkins for legal fees incurred in defending challenge from Outlaw Energy that delayed A-Shoc’s launch within KDP system. As reported, judge in Delaware Chancery Court had come down forcefully on side of Collins and his allies at KDP in denying request for injunction lodged by Outlaw exec Delgado-Jenkins, who claimed new performance energy brand was devised during Collins’ tenure with Outlaw and should be considered Outlaw’s property (BBI, Jun 18 and 19). Tho acct in Law360 said Lance is seeking to recover over $1 mil in legal fees, he tells us sum actually exceeds $3 mil. As noted earlier, uncertainty created by suit prompted KDP to postpone launch of Bang challenger A-Shoc, which was originally set for May launch but will only be hitting store shelves in coming weeks. As founder of Outlaw who recently re-upped with brand, Collins has noted that it’s been his own funds used to sue him. Delgado-Jenkins, a former 7-Eleven exec originally recruited by Collins, hasn’t been commenting, saying fuller story will emerge in due course.
With its supply challenges now surmounted, stevia marketer Pure Circle is revving up its sales & marketing effort, recruiting Glanbia Nutritionals vet Alina Slotnik as vp of global marketing and elevating key accts vp Dave Gallagher to expanded role as regional vp for North America. Dave, who’d joined Pure Circle a decade ago from flavor house Tate & Lyle, takes spot that had been filled earlier this year by newly recruited ingredient vet Chris Tower (BBI, Feb 25). A rep told us Tower has left the co but that Gallagher has picked up a broader role that includes all channels in N Amer including global accts, regional accts and foodservice. Also new at co is Honeywell and Georgia Pacific vet Eric Emmerick as vp of customer service & supply chain.
NY-based Sound Brands has fortified the sales team behind its unsweetened Sound Sparkling Tea and entered canned sparkling-water space via 4-flavor line hitting store shelves in Northeast. The canned line of Tea-Infused Sparkling Water, in 12-oz sleek cans priced at $1.99, are going out in Black Tea (with blood orange and vanilla), Hibiscus Tea (blueberry, cinnamon), Ginger Tea (grapefruit, lavender) and Green Tea (tangerine, lemongrass) flavors. The black and green tea entries carry moderate hit of 45 mg of caffeine while other 2 are caffeine-free. New line has entered Northeast retailers including OTG’s Cibo Express airport outlets and some Whole Foods, working with DSD house Dora’s Naturals in core NY market. To make launch seamless, Sound has recruited locally based sales vet Andrew Ford as East Coast sales mgr. Andrew has worked with several Dora’s suppliers, including Guayaki Yerba Mate and GT’s Kombucha, as well as on brands like Honest Tea earlier in career. Canned line’s inaugural production run occurred at MetaBrand’s new pilot plant in NJ (BBI, Apr 19).
Sound, recall, was created by pair of nuclear engineers at Indian Point reactor north of NY who had a yen for hot tea. The engineers, Salim Najjar and Tommy Kelly, launched under SodTerra brand name, then quickly pivoted to Sound (BBI, Sept 9 2015), which they now position as “the next evolution in sparkling,” hoping to capture a legion of La Croix drinkers who might be ready to move on to more elegantly crafted, but sugar-free, recipes using organic tea, botanicals and fruit extracts. The core line, in 12-oz glass bottles, goes out in caffeine-free Sparkling Chamomile and Sparkling Rose Tea, the mildly caffeinated Sparkling Green Tea and Sparkling White Tea and the more energizing Sparkling Yerba Mate (70 mg caffeine).
Sound has been busy on other fronts, too. It’s also brought aboard the SF-based Compass Group vet Suzanne Cox, who’d served as dir of national pantry accts at co’s Best Vendors unit (now called Canteen One), to manage corporate foodservice accts as dir of growth, just at time that Sound has entered Compass’ Food Buy rebate program that incentivizes co’s network of sub-distributors to push brand. And it’s getting ready to dial up DTC biz, including with launch of subscription program for cans this Sep, Tommy told us.
Milk as an edgy energy drink? That’s latest tack being taken by Calif Milk Board as it tries to stoke demand among younger users, recruiting cadre of well-known young skateboarders under rubric Bones Love Milk Skate Team for campaign kicking off Jul 27 at Huntington Beach, Calif. (Drinking milk or not, they’re still going to be breaking a lot of bones.) Among elements of mix, MediaPost reports, is popup skatepark dubbed Bones Love Milk Shredquarters. Campaign via Gallegos United agency will employ skaters like Christian Hosoi and Chris Cole via microinfluencers, social media and dedicated website that just went up at BonesLoveMilk.com. Effort tries to convince teens that milk is “nature’s energy drink,” MediaPost reports.