Beer Marketer's Insights
Coca-Cola, which has taken extensive liberties with Diet Coke label during restage of past 2 years, is going even further by removing label altogether in campaign titled [Unlabeled] that features people rejecting restrictive labels that are imposed on them due to their handicaps, race or sexual orientation. “Imagine a world where we aren’t limited by the way others label us,” is premise of campaign. “We’re removing our own labels to start a conversation about labels.” The campaign features videos of people like Doc Todd (“with PTSD I don’t have to be broken. I can be powerful”), Brendan (“if someone were to call me too girly, I’d be like, ‘Yes, yes, I am. And?’”) and Tammy (“I used to feel like I had to be Asian or American. Now I’m proudly both.”). Neither KO nor the ad trades seem to have said anything much so far about campaign, which trickled out to market in recent days, but it may have been “lifted and shifted,” as KO likes to say, from similar effort in Middle East in summer 2015 that aimed to target prejudice during Ramadan, with limited-run cans that dropped “Diet Coke” moniker from trade dress and stated on back of can, “Labels are for cans, not for people.” Taste of campaign can be had at DietCoke.com/unlabeled.
How to Communicate that Forto Coffee Shots Pack a Real Caffeine Punch? Shaq Will Attack Challenge
For Forto Coffee Shots, sales have been soaring but awareness is still tiny, in 5% range. How to better get word out about organic coffee that contains 200 mg of caffeine, now that its investor and distribution partner Keurig Dr Pepper is getting brand into retail nooks and crannies? Somewhat fortuitously, it seems, an investor/endorser has materialized who can cement notion that those 2-oz bottles pack enough of a punch to jack up even a big guy as his energy flags. A very, very big guy.
Enter Shaquille O’Neal. Coming off successful participation in KDP sales meeting in Dallas area last week, Forto founder Neel Premkumar reported to BBI that thru pair of fortuitous connections, future Hall of Famer and hoops commentator had come forward to invest in and endorse NY-based brand that’s a unit of Dyla Brands. It’s the perfect fit, Premkumar argues: after all, Shaq exudes positive energy, and in terms of potency, if Forto works for a guy his size, it can work for anyone. So he’ll now anchor the campaign that Forto was starting to plan for 2020 to tune of $20 mil or so. Forto has begun bringing aboard agencies and other partners for that effort, and now creative will be centered around Shaq, who boasts high Q likeability score and has 27 mil social media followers. Star has expressed willingness to start posting, be featured in POS and help with wooing retail buyers and attend trade shows, likely including NACS c-store expo this fall.
He follows in footsteps of other NBA stars who’ve gotten in bev game, most notably Kobe Bryant, who’s major investor in Body Armor and has taken key role in brand’s creative direction. As for Shaq, perhaps his most visible previous role in field was as anchor for AriZona Iced Tea cream soda line launched in 2013. Tho it used all-natural formulation, it still drew flak for being packed in nonresealable 23-oz can, at time that sugar concerns were mounting. Premkumar said his own connection was made via some Forto team members who knew Shaq, who as a Krispy Kreme franchisee had already tried Krispy-Kreme-branded coffee shot that Forto creates for its partner KDP.
CALENDAR: Fancy Food Show Opens Sunday in NY
Fancy Food Show, last major bev platform before summer doldrums, opens this Sun at NY’s Javits Center for usual 3-day run that draws thousands of retailers seeking natural and specialty finds. We hope to bring you highlights next week. Info at SpecialtyFood.com.
New England Patriots wide receiver Julian Edelman has signed on as endorser of Perfect Hydration alkaline water brand, which claims to employ 9-stage filtration process to attain its 9.5 pH liquid fortified with potassium carbonate, potassium bicarbonate, and magnesium sulfate . . . Investors who’d frantically bid up Lifeway Foods shares yesterday on word that the co was planning CBD entry at unspecified time in future have tempered their enthusiasm today, with shares returning to levels closer to prior trading range in $3 range. They were at $3.33 when we last checked around 3 PM . . . La Croix, whose quarterly earnings reports intersperse testimony of America’s greatness among discussions of sales trends, is offering red, white & blue casepack for summer. Inside fireworks-themed pack are 12 Tangerine, 6 Pamplemousse (Grapefruit) and 6 Passionfruit cans.
DISTRIBUTION: Cincinnati’s Queen City Hemp Enlists Stagnaro to Enter N Kentucky with CBD Seltzers
Cincinnati-based Queen City Hemp, early entrant into sparkling CBD sector 3 years back, said it’s enlisted MillerCoors house Stagnaro Distributing to expand its availability into 12-county area of northern Kentucky. As part of its alliance, it has augmented its single-serve cans priced at $3.99 with 6-pack offering priced at $19.99. To enter Kentucky, Queen City has augmented production facility in Ohio with one in Erlanger, Ky, in compliance with regulatory requirements. Offered in Guava, Blood Orange, Lemon Lavender and Passion Fruit flavors, Queen City’s sugar-free seltzers are lightly infused with 5 mg of CBD (7 mg of full-spectrum hemp extract all told). The company was founded in 2015 by Nic Balzer and Rob Ryan, who launched production in 2016 out of Findlay Kitchen in Over-the-Rhine nabe, per local media reports at time. Co also offers CBD tinctures, topical balm and vapes.
Jones Soda and 7-Eleven are taking partnership into another summer, with partners adding Airheads Cherry Pineapple Blast to 7-E’s controlled 7-Select line and taking several Jones-branded items into Canadian stores. In US, Airheads entry joined Berry Lemonade and Mango Lemonade on Jun 10, in glass-bottle 7-Select line sweetened with cane sugar. With overall store count set to increase with 7-E acquisition of APlus and Stripes banners together totaling 1K stores, partners are heralding deal with exclusive Kiwi Strawberry flavor. Meanwhile, Canadian stores are expanding commitment to branded Jones line to include 5 flavors, including Watermelon flavor headed exclusively into chain for a year. And in apparently new twist, Jones also has helped retail partner offer trio of private-label sodas under 7-Eleven brand name. Partners have collaborated on 7-Select line for 3 years now.
NEW PRODUCTS: Right Water, from Life Water Founder Konecki, Is Latest into Canned Water Game
Aluminum cans might be in short supply, but that’s not stopping rush of new entrants into canned-water space who’re seeking to ride plastic backlash to create more sustainable sub-segment. Latest is Right Water, with still-water entry packed in conventional 12-oz cans. It’s creation of Simon Konecki, who launched similar entry in Britain under Life Water trademark and most recently made news in States via split with his partner of 7 years, the singer Adele. Unlike some rivals that are citing sustainability advantage of municipal water in being close to copacking sites, Right Water is employing spring water from protected Calif spring, “chosen for its perfect mineral content, zero nitrates and ideal pH balance optimum for water consumption.” Right Water’s cans use water-based lining rather than BPA and all ancillary items eschew single-use plastic, including tape and biodegradable pallet wrap. Tho it claims leadership in UK via Life Water brand, it’s entering US market that’s already seen entrants under brand names like Proud Source, Pathwater and Ever & Ever (from Vita Coco) that all seek to ride identity of metal cans as infinitely recyclable. (We presume Konecki inaugurated Right Water brand name so as not to infringe on Pepsi’s bottled Life WTR trademark.) Some of proceeds from Right Water go to Drop4Drop, org associated with Konecki that seeks to improve water supplies around world. Some info is starting to go up at DrinkRightWater.com. We couldn’t immediately get info on pricing or balance between DTC and retail components of venture.
In alliance that brings together familiar bev entrepreneurs, Austin’s SKU accelerator is teaming with BeyondBrands to offer new accelerator dubbed BeyondSKU that brings concept to NY market. The partnership, which is recruiting for its inaugural class in Sep, brings together Sweet Leaf Tea and Deep Eddy Vodka cofounder Clayton Christopher, who chairs SKU and is involved on capital side with CaVu Ventures, with Steaz and Good Catch cofounder Eric Schnell, who operates BeyondBrands incubator. First track will seek to foster up to 7 “conscious business” startups over 12-week mentorship program that could yield up to $20K in seed cash and intros to prospective investors. The concluding Showcase Day & Funding Forum event is scheduled for Dec 3. BeyondSKU is accepting applications at BeyondSKU.org from cos with up to $3 mil in revenue thru Aug 1. Applicants must be based in NY or willing to relocate there for duration of program.
Starting 8 years ago at CrossFit gyms with entry called FitAid, Santa Cruz-based LifeAid Beverage has built out extensive suite of sub-brands that are rolling into conventional channels, along the way staking out significant DTC biz too. At BevNet Live conference last week, cofounders Aaron Hinde and Orion Melehan offered strong counterargument to landgrab launch strategy, exhorting listeners to grow deliberately, make customer service a priority and not waste resources on brand-building efforts that don’t generate a measurable return. “There are no hard and fast rules when launching a beverage brand,” Melehan asserted. “You have to break from the prevailing wisdom.”
At time of launch in 2011, Melehan recalled, that prevailing wisdom was you can’t build a bev online, but that’s the tack partners took anyway, focusing on narrow market and reaching CrossFit gyms online. That created an effective glide path for their efforts to build out lines like FocusAid, TravelAid and even GolferAid and broaden channels to conventional retail without burning exorbitant amounts of cash.
Among key learnings, Hinde said, is that building out customer service team should be first priority, because they provide immediate customer feedback that’s vital in refining brand while heading off negative experiences that can poison brand’s image – as can be case with just “10 pissed-off customers savvy on social media.” So weekly customer service meetings closely monitor customer ratings (LifeAid routinely hits 9.5 out of 10) to ensure that co is “constantly making emotional deposits because ultimately there will be withdrawals.”
At time FitAid brand launched in CrossFit channel, some had wondered whether it was wise to choose a narrow channel then dominated by Kill Cliff. Melehan didn’t see it that way: he liked having just one competitor, and being almost out of sight of major competitors who were not organizationally set up to play in that channel even if they spotted it. (To BBI, that’s reminiscent of indie coconut water brands’ early foray into yoga studios that similarly were off radar of strategics.)
In their presentation, the partners urged pragmatic approach that doesn’t burn cash in idle pursuits like vague “brand-building” initiatives. At LifeAid, all marketing is ROI-driven, with every dollar spent bringing at least a dollar back in return. “Brand-building is the quickest way to go broke,” warned Hinde.
That philosophy connects neatly with reliance on those non-traditional channels, where slotting fees, bad debt and receivables are not a factor and the cash cycle is short. Using that approach, co was able to build a sales story before it ever raised money. Even as it’s gone broader, tho, co has taken care to maintain ties to CrossFit channel, using gym owners to crowdsource new-product idea that was launched as CrossFit exclusive under FitAid Rx name. Of base of 7K gyms, 3K owners responded with opinions on name, trade dress and functional ingredient (they wanted creatine).
Another key precept: Make mistakes off-Broadway, Orion said, citing old standby among Bev Biz Insights’ annual “Resolutions for Entrepreneurs.” Better to find out that your glucosamine is shellfish-based while you’re small and narrow than when you’re big (after hearing from allergic customers, LifeAid switched to corn-based option). Far from hurting co’s prospects, the deliberate expansion helped: by time LifeAid was ready to move into conventional retail 5 years in, the recovery bev space had moved from practically non-existent to ready for prime time, as conventional sports drinks were disrupted and performance energy drinks began to catch fire. By then, “we were ready as a team to execute,” Melehan said. It could tap into both email and snail mail addresses of established customer base whenever a new retailer came on, with FitAid sku alone boasting 200K social media followers. That insured “turns from day 1,” he indicated.
So 2016 was year LifeAid finally began to hire first sales reps, raise institutional capital (from KarpReilly) and move more broadly into retail, to point where co has moved from deriving 85% of 2016 sales from gyms/DTC to anticipating that 85% of 2019 sales will derive from trad retail. By now payroll is approaching 70 and co is building out “BrigAid” field marketing teams in 8 metros. It’s airing videos on ESPN and sponsoring activities like Spartan Race and CrossFit Games. And after relying on mid-calorie drinks for 8 years, it just released its first zero-sugar entries, whose stevia and monkfruit sweetener blend may get brand placed in retailers that won’t accept sucralose-sweetened zero-sugar entries from other performance-related brands.
Personal side of biz echoes what we’ve seen with contrasting personalities of other entrepreneurial teams. Friends since 2009, Melehan and Hinde have done biz together since 2011 and their families remain very close. But Hinde plays the role of daredevil and it’s Melehan’s job sometimes to convince him not to jump off a cliff, Orion noted.
DISTRIBUTION: C4 Builds Network with Polar, Bonanza, Capitol Wright, with Others under Discussion
Nutrabolt’s fast-growing C4 performance energy brand is continuing to build out its DSD network, lately enlisting likes of Bonanza in Las Vegas and Capitol Wright in Austin, its corporate backyard. C4’s evp/gm, John Herman, told BBI that it’s also assembled network in Kansas via 18 Anheuser-Busch houses, while enlisting Quality Brands for Nebraska. As anticipated, it’s inked deal with Polar Beverage for New England that could expand to include production component too. Co also is well along in talks with likes of Kalil in Ariz, Maletis in Ore, MillerCoors network in Illinois and Cheerwine network in Carolinas, tho no contracts have been executed yet, he cautioned.