In past week, Hawaii and Delaware passed bills that require fast-food chains to offer drinks such as water, milk or 100% juices as default bevs in their “happy meals” to kids. Once Del guvnah signs bill, those states will join Calif, which passed similar statewide legislation last year, noted CSPI. “While parents can still request a different beverage for their children, they’ll no longer have the unhealthiest drinks pushed on their kids as the automatic option,” per statement. Recall, New York City approved a similar bill back in March and legislators in Conn and RI are mulling similar stances . . . Online retailer Thrive Market has abruptly halted sales of all hemp and CBD items to its 50K members after being threatened with cutoff by its credit card processing partner. “In early June, we received a notice from our merchant processor demanding that we cease the sale of all hemp and CBD products on Thrive Market. We unfortunately have no choice but to comply,” wrote cofounder/ceo Nick Green on his blog, reported Let’s Talk Hemp newsletter, which describes “banking backlash” as key part of continuing “hemp harassment” trend. US Hemp Authority, which is writing standards for industry but doesn’t sell any hemp or CBD products, was dropped by Stripes as processor for similar reason. “We’re being told we’re high-risk. We’re actually trying to minimize human risk,” prexy Marielle Weintraub told CNN.

Kuli Kuli has gone ahead with plans to enter shot category, offering shelf-stable line of four 2.5-oz functional entries that blend its core moringa ingredient with green tea, herbs, botanicals and mushrooms.  The line, which carries supplement label, so far is comprised of Daily Green Boost (with supergreens, in Apple Cucumber flavor), Focus Focus Focus (lion’s mane mushrooms, in Raspberry Acai flavor), Stress Be Gone (ashwaganda, in Honey Chamomile flavor) and Get Well Soon (camu camu, in Citrus Supreme flavor).

New line represents first time Oakland, Calif, co is featuring other superfoods in its recipes, reminded founder/ceo Lisa Curtis, who was informally showing products around fringes of Fancy Food Show, tho she wasn’t exhibitor.  She’d flagged forthcoming line during meeting with BBI in NY earlier this year, on heels of announcing $5 mil Series B capital raise led by Kellogg venture arm and Griffith Foods (BBI, Feb 28).  In conversation this week, she said that raise was oversubscribed, yielding total of $6.3 mil in new money.  With funding in hand, she’s now “hiring across the board,” including digital marketing chief, another sales person and finance mgr.  The expanded team this year will be working to build out ecommerce platform while moving beyond shots to other functional product lines and working with Griffith team to develop ingredient biz.  Recall that Lisa had discovered moringa while working as Peace Corps volunteer in western Africa and has since built co around direct sourcing relationships with family farmers and women’s co-ops in Africa and elsewhere.

GuS craft sodas, long associated exclusively with glass bottles, has made its debut in cans, with lineup of 3 ginger ale flavors in 12-oz slim cans that are sweetened with blend of cane sugar, stevia and monk fruit for modest 30-calorie hit. White cans unveiled at Fancy Food Show this past week prominently herald ginger root on front panel, in range of Original Dry Ginger Ale, Peach Ginger Ale and Raspberry Ginger Ale. So co now joins ranks of those livening up ginger ale category with flavored entries, as Bruce Cost Ginger Ale has done. SRP is $2-2.25 per can, said founder/ceo Steve Hersh, who quickly got greenlight from key NY customers like Zabar’s, Kings/Balducci’s and Grace’s Marketplace. Operating out of NY as Utmost Brands, GuS brand originally went out as Grown up Soda until advent of hard sodas made that confusing moniker. It numbers among its distribution partners Big Geyser and Joe Tea in its home market of metro NY.

Asheville, NC-based entrepreneur who’s spent a decade helping improve health and economic prospects of Rwandan women has launched sparkling “draft-style tea” in kegs and now cans, using African tea she was already bringing in for Fair Trade loose-tea brand called Tima.  Operating as 3 Mountains, founding ceo Sara Delaney launched the loose teas just last Oct and followed that up in Jan with the Silverback Draft Tea, first in kegs and now in 12-oz slim cans, quickly winning acceptance chainwide in The Fresh Market.  By now, brand copacked in LA is out on West Coast, Southeast and Northeast regions, via distributors like Chex Fine Foods (in NE) and Renaissance (out west).  Within home state, co has partnered with local craft brewer Bhramari (formerly Hive Mind), which carries brand on its beer trucks.  Sara said several NC breweries have picked up her kegs as non-alc alternative for their taprooms.

Silverback, named for species of gorilla featured on packaging, is offered in Classic Silver entry, using combo of organic black and silver tea for 80 mg of caffeine, and Harvest Gold, with black tea and apple juice concentrate at 50 mg.  SRP is $2.99-3.25.  Sara emphasized that these are not cold-brewed teas, as she wanted to retain flavor benefits of hot steeping.  They’re shelf-stable.

 For a few years now, mushrooms have been hot ingredient, with powdered-bev plays like Four Sigmatic garnering lotsa buzz and varieties like chaga and reishi turning up as fortifiers in RTD brands like those from Rebbl.  Standalone RTD line?  So far there’s not been much evidence of those.  But mega-mushroom co South Mill Champs – representing merger of South Mill of Kennett Square, Penn, and Champs of Aldergrove, British Columbia – is ready to throw its hat in ring after getting off to good start earlier this year with extensive line of Shrooms Snacks that were featured at this week’s Fancy Food Show in NY. 

Prototypes of the bevs were previewed at off-site reception but are still at early stage, with co saying it’s tinkering with production process, packaging format and other factors.  It sampled RTD coffees and teas under Shrooms brand, such as Arabica coffee that holds up well vs bitter flavor notes of reishi, as well as Passionfruit + Papaya Black Tea that also incorporates reishi into recipe.  Co is aiming to have something launch-ready by late summer.

Co only entered branded snacks biz earlier this year, with line of 4 product lines spanning 14 items, such as Splits item that melds filet mignon jerky with portabella mushroom jerky and mushroom crisps in Sea Salt and Spicy Jalapeno flavors.  But between its 2 farming operations, where it even makes its own compost and hay, co boasts big presence in produce section, easing snacks’ way into retailers like Costco, Shop Rite and nearly 3K Walmart stores, where it’s merchandised both in produce and center store.  With mushroom-aware consumers used to shopping produce aisle, exec team is leaning toward targeting bevs for placement there, said ceo Lewis Mcleod.  Among other key members of team are innovation dir David Eberwein and food scientist Chip Chalupa (who “knows his shiitake,” assured pr rep).

We apparently were first to spot signs of forthcoming Diet Coke “Unlabeled” campaign that drops labels from some cans to signify that people shouldn’t be labeled either (BBI, Jun 24) and a few more details are emerging now. MediaPost reports that the label-less cans will only be deployed at “special events where Diet Coke would give its products away to consumer for whom the idea of being ‘labeled’ has a special string. The can bought at the 7-Eleven will be unchanged.” Thus, earlier this month brand worked a Pride event in LA with cans stickered over with words like “Independent” and “Misrepresented.” A “manifesto film” is due in mid-July, too, says MediaPost .

National Beverage closed books on its 2019 fiscal year with reported 3.9% increase in net sales to $1.01 bil, with branded sales up 6.2% and its core “Power+” brands including Rip It Energy and Shasta up 8.9%.  Helping boost sales were expansion into Canada, 3 new flavors for NiCola line and expanded presence in club channel.  Net income slipped 6% to $140.9 mil, with some of blame attributed to tariff-burdened aluminum cost increases and higher mfg, shipping and marketing costs, tho FIZZ also drew favorable comparison vs last year’s corporate tax cut.  In soberly worded earnings release that was free of usual all-caps superlatives and exclamation-pointed exhortations from ceo Nick Caporella, co noted several initiatives under way in current fiscal year as it seeks to improve trends of its core La Croix line: national launch of Hi-Biscus flavor, launch of brand into UK and commencement of summer campaign.  As noted yesterday, co also is using occasion of packaging refresh to comply with new labeling guidelines to herald that La Croix is Whole30, non-GMO and produced with non-BPA liners.

Newly released 10-K indicates co moved from strong sales gain in Q1 to more modest gain in Q2 and declines in Q3 and Q4.  For full year, branded CSDs like Faygo and Shasta collectively were down 3%, while co no longer produces private-label CSDs following exit from segment a year ago as it moved entire focus to branded products.  Per filing, co employs 1,640 and operates 12 plants in 10 states, spending $38.3 mil on capacity additions last fiscal year, tho fiscal 2020 is anticipated to come in lower.  Discussion of legal proceedings gets a single paragraph, insofar as co believes they’re without merit and won’t have material effect.  Co paid $10.2 mil in management fees to co called Corporate Management Advisors that’s owned by Caporella via longstanding arrangement dating back to 1991.

Hint and Good2Grow enjoyed strong growth trends in flavored water segment tracked in latest Nielsen scanner data while Bubly, Spindrift and Sparkling Ice were strong percentage gainers on flavored sparkling side, perusal of Wells Fargo’s latest report indicates.  (We covered CSDs, energy, casepack water and sports drink categories on Tues.) 

On still side, Hint was top % gainer, scoring 66% $ increase for latest 4-week period, representing acceleration from 12-week trend of 56% gain for last 12 wks and 58% gain for last 52 wks.  Report has brand listed at roughly $50 mil in annual tracked sales (tho remember brand does big biz online and in untracked channels like corporate campuses).  In Zone Brands, which does Good2Grow kids waters with cartoon characters’ heads as caps, scored 40% $ gain in 4-wk period, in line with gains over 12- and 52-wk periods.  Its annual sales are in $40 mil range. 

On sparkling side, PepsiCo (Bubly) scored best performance among major bevcos, with $ sales up 98% for 4-wks, vs 85% for 12 wks and 228% for 52 wks.  (It did so with pricing edging down 2%.)  By now, it’s listed as $160 mil brand on annual $ basis.  Polar, at $190 mil trailing 52-wk $ sales, continued brisk rise, +11%, while Talking Rain (Sparkling Ice) rose 14% as it hovers in $500 mil range on annual basis.  National Bev (La Croix) suffered accelerated decline of 14%, at $470 mil annual sales rate.  Among emerging brands, Spindrift soared 151%, about in line with recent pace; it’s listed as $20 mil brand on annual basis.

All Shelf-Stable Players Decline in Tea; Milo’s Refrigerated Line Continues Boom   Broad RTD tea category seems to be a slog lately, with overall category off 3.7% in $, accelerating declines of 2.3% over 12 wks, 0.4% over 52 wks.  All major bevcos on shelf-stable side are suffering accelerating declines, including Pepsi/Lipton (-4.1%), AriZona (-2.8%), Coca-Cola (-6.9%), KDP/Snapple (-2.8%).  But refrigerated Milo’s brand, whose growth has spurred construction of new facility (BBI, Feb 19), continues to soar, rising 22.1%, generally in line with prior-period gains.  Nielsen has it listed as $160 mil brand at retail over 52 wks. 

Coke’s Coffee Blitz Seems to Be Stalling   In recent years, Coca-Cola has gone from having negligible RTD coffee portfolio to robust lineup comprised of entries branded as Dunkin’, McCafe and Monster (with Costa-branded entries on way).  Lately, tho, they’ve collectively been losing ground, -22% for latest period, accelerating 12-wk decline of 18.8% and undoing 9% gain over last 52 wks.  So effort doesn’t seem to have done much to close gap in measured channels vs powerful Pepsi/Starbucks alliance, which is doing $1.93 bil in annual retail sales to Coke’s $160 mil.  For its part, Pepsi/Starbucks scored 2.7% gain in last 4 wks, off a bit from 4.1% of 12 wks and 3.8% of 52 wks.  Among emerging brands tracked by Wells Fargo, Califia Farms has flattened out to 0.5% gain in latest period vs 30% gain for 52-wk period. 

“Get your CBD-infused snacks and drinks while you can,” advised NY Post, as New York City’s Dept of Health & Mental Hygiene’s ban on products goes into effect on Jul 1. City will start issuing fines ranging from “$200 to $650 on businesses that are not in compliance,” by Oct 1, noted Post. Retailers are already “spooked” by regulators’ raids in recent months. Fresh&Co, which operates 18 health-focused eateries in NYC, said it won’t risk fine and will pull its CBD-infused bevs. (As of yesterday evening, when BBI editor popped into Fresh&Co’s Chelsea Piers location, Recess CBD was still on shelves.) New York State push to legalize marijuana use went down with a whimper last week, so no quick fix to situation appears on horizon. “Initially many stores and manufactures had ignored the FDA’s edict, first issued in December, figuring that consumer demand would persuade the FDA to reverse itself,” but as Post noted, “that hasn’t happened yet.” FDA only had its first hearing a few weeks ago and is still taking comments (BBI, Jun 5), so no significant policy change would seem imminent at fed level.