Beer Marketer's Insights
EXTENSIONS: Q Tonic Joins Elderflower Game
In response to customer requests, Brooklyn-based Q Brands is ready to ride the elderflower wave with a more carbonated version than current alternatives, offering Elderflower Tonic to on-premise accounts in 6.7-oz, 500-ml and 750-ml glass bottles and 7.5-oz cans. “Like our other mixers, Q Elderflower Tonic is full of flavor with higher carbonation,” said founder/ceo Jordan Silbert. “But it is also less sweet, so the subtleties of great spirits are free to shine.” In recent years, elderflower has emerged as trendy cocktail ingredient, even as soft drinks like Belvoir have ridden that flavor to success in specialty and gourmet channels.
Toronto-based incubation firm GreenSpace Brands said it sold its $8.3 mil (sales) Nothing But Nature biz, including its Kiju-branded organic juice and iced tea brand, to co going by Zurban Beverages for $8 mil. The transaction price includes a cash payment of $7.5 mil and potential earnout of $500K. Tho the multiple of 1X sales is modest by current standards, GreenSpace said it vindicates brand resuscitation effort of co it acquired in 2016 while helping pay down co’s estimated $13-15 mil in debt and providing working capital. GreenSpace’s remaining brands are Life Choices grassfed meat products, Love Child organic kids’ foods, Central Roast nuts and seed mixes, Cedar cold-pressed juices and recently acquired Go Veggie plant-based altdairy items.
Hemp-based CBD just moved closer to clear legal status in Calif with unanimous passage of assembly bill AB-228 late last week, advancing legislative effort to supplant health officials’ enforcement jag that’s thrown nascent biz into turmoil in Golden State. Bill passed unanimously by vote of 76-0, per several sources that have been tracking legalization efforts. Bill now heads to Senate, tho position of Gov Gavin Newsom remains unclear, with spokesman saying it “would be evaluated on its own merits” if it reaches his desk, per CBD Hemp Experts. The bill expressly allows the use of hemp-based CBD in foods, bevs and topicals, in response to statement issued by health dept last year precluding CBD use in any animal or human food, even as dietary supplement, outside of licensed dispensaries . . . In coverage of bill’s advance, news sources flagged report by NBC Bay Area titled “Dazed & Confused” last month that detailed woes suffered by some CBD suppliers and retailers, including teahouse in SF’s Chinatown nabe called Steap Tea Bar that sold CBD-infused bubble tea, and marketer of RTD Vybes CBD-oil-infused line profiled in BBI last fall (BBI, Nov 29). BBI had previously chronicled raid of Calif copackers who’d produced discontinued Dirty Lemon CBD entry (BBI, Jan 21). In case of Vybes, founder Jonathan Eppers told station that Calif health inspectors raided his LA warehouse in Jan and impounded $100K worth of product. Subsequently, about 50 Calif retailers dropped Vybes and he's relocated production to Texas. Eppers estimated that lost sales, legal costs and relocation costs have run to at least $500K. “What is going on is unbelievable and asinine,” he said. “They put us in this state of limbo that’s costing us” . . . Meanwhile, Sheetz c-store chain is launching CBD-based items at 140 of its 279 locations in Penn, including what seem to be some human-edible items. Altoona-based chain will offer both isolate and full-spectrum items, including topical rubs & patches, tinctures, vape pens, oral pouches, capsules, pet products and other items,” per Convenience Store News and other media outlets. The items will be stored behind the counter and sold only to those 18 or older with proper ID. “We are excited to be the first convenience store to offer a broad selection of premium CBD products at this magnitude,” said Ryan Sheetz, associate vp of brands. Sheetz also operates stores in W Va, Va, Md, Ohio and NC that apparently won’t be entering CBD category yet . . . As it seeks to learn more about cannabis, FDA is convening its first public hearing this Fri at its White Oak Campus in Silver Spring, Md, and has established public docket open thru Jul 2 under # FDA-2019-N-1482. Info on hearing can be accessed here.
“Best if used by.” That’s the phrase that FDA, after 2-year study, has settled on as preferred phrase for shelf-stable foods/bevs, to replace array of alternatives like “use before” and “expires on.” Non-binding decision, which parallels USDA stance on perishable items, is intended to provide greater clarity to consumers trying to decide whether quality is OK as they try to get most out of their shopping bucks while also minimizing food waste. In cases where actual safety issue is involved, suppliers have greater freedom to get point across. “We worked with consumers about which label conveys the information best, and consumers overwhelmingly chose ‘best if used by,’” Frank Yiannas, agency’s deputy commissioner for food policy & response, told Washington Post. “If there’s a date label that’s about a food-safety issue, at this point they have the latitude to put whatever terminology they need to convey that risk.”
Latest round of syndicated data shows tougher time for CSDs, Body Armor slowing down a bit but still winning gobs of share from Gatorade and its competing brand Powerade, and La Croix plunging 17.5% even as Sparkling Ice motored on to another 21.8% gain.
Easter Timing Hits CSDs; No Price Cutting, Tho CSDs experienced a tougher 4-wk period after getting a lift from Easter timing shift in previous period. CSD volume declined 3.1% (down from -2.1% for 12 wks) last 4 wks thru May 18 in Nielsen all-channel data reported by Morgan Stanley’s Dara Mohsenian. Avg prices were still up a solid 3.9% in category for 4 wks, down from +5.1% for 12 wks and +4.3% for 52 wks. Coca-Cola CSD volume went from even to off 2.2% last 4 wks while its avg price increase came down 0.6% to +4.3%. PepsiCo CSD volume fell further, down 5.3% (vs -3.1% for 12 wks) even as its avg price hike was almost halved to +2.0% last 4 wks. PEP’s full-calorie brands were off 6.8% compared to 1.2% decline for low-cal brands. Keurig Dr Pepper CSD volume declined 3.3% on avg price gain of 5.9% last 4 wks. Private-label CSDs fell further with volume off 6.7% (vs -4.8% for 12 wks) on avg price gain of 1.8% last 4 wks.
Energy Category Growth Slowed; Bang vs Reign Heatin’ Up Energy drink volume increased 3.7% (down from +5.5% for 12 wks) on solid avg price increase of 5% last 4 wks. Red Bull slowed to 2.4% gain (down from +6.4% for 12 wks) on modest avg price bump of +0.2% last 4 wks. Monster Energy volume was off 3.6% (vs -4% for 12 wks) on solid avg price gain of +6.0% last 4 wks. But its Reign flanker brand is off to fast start as it “added 620 bps to MNST sales growth” over last 4 wks and has reached an ACV of 35% overall and 82% in gas & c-stores, noted Dara. It’s enjoying 3X the pickup of previous MNST bona fide hit: Ultra zero-cal subline, as Wells Fargo’s Bonnie Herzog noted in her take on latest #s. So there’s still lots of runway ahead for Reign in all-channel stores. But any assumption that Reign’s ignition would take a bite out of Bang proved premature: VPX-owned brand soared 506% (a bit down from +625% for 12 wks) despite avg price gain of 6.2% last 4 wks. It’s not all good news, tho, as “Bang market share stalled at 8.0% in the last week of data,” wrote Dara. So this space bears watching. Rockstar continued to struggle, with volume down over 20% with avg price increase up to +5.2% last 4 wks. With hefty avg price gain of 11.1%, PEP energy volume sank nearly 12% last 4 wks. Since Rockstar moves thru Pepsi network, that means that robust energy segment continues to be a downer for the blue system, with Starbucks-branded Doubleshot coffee/energy hybrid also fading lately in face of revived Java Monster.
Sports Slide Down; Strong Body Armor Gains Sports drink volume took a 9.4% tumble (vs -1.4% for 12 wks) as avg prices went up another half a percentage point to +5.8% last 4 wks. PEP (Gatorade) volume plummeted 11.5% (down from -4.1% for 12 wks) as avg prices went up nearly another percentage point to +3.9% last 4 wks. KO (Powerade) down nearly identical 11.6% last 4 wks even with slight (-0.2%) avg price decrease. Body Armor, on the other hand, gained 55% (tho much slower than +95% for 12 wks) on avg price increase of 3.4% for the most recent period.
Water Volume Drops Led By Nestle Bottled water volume swung from 3.4% gain for 12 wks to 1.8% decline last 4 wks. Avg prices up modest 0.5%. With hefty avg price increase of 8%, Nestle water volume dropped 15.5% (down from -11% for 12 wks) last 4 wks. Coca-Cola water volume decline nearly doubled to -8.6% on avg price increase of 3.6% last 4 wks. PepsiCo waters were even for 12 wks but dropped 4.2% last 4 wks on tiny (+0.3%) avg price gain. Private-label volume gain was cut in half to +8% last 4 wks even as avg price increase eased to +1.2%.
Way Less Sparkle for La Croix, Nestle, While Ice Continues on Growth Tear Sparkling flavored water category volume growth rate cut in half, up 4.6% last 4 wks vs 9% gain for 12 wks, in Nielsen all-channel report by Wells Fargo Securities’ Bonnie Herzog. Avg prices were up 3.1% for 4 wks, similar to 3.4% increase for 12 wks. Talking Rain (Sparkling Ice brand) continued its boom, posting solid 21.8% volume gain, just ahead of its 12-wk gain pace), aided by 3% price decrease last 4 wks. National Beverage (LaCroix brands) volume dropped 17.5% (down from -11.2% for 12 wks) with avg price increase of 1.7% latest 4 wks. Nestle slowed from 13% gain to +1% for 4 wks as avg price increase reached +5%. Polar slowed from 10.4% gain for 12 wks to +3.6% last 4 wks on 6% price gain.
Teas Sag Across the Board Iced tea category suffered 6.1% volume decline, accelerating 2.9% hit for 12-wk period and 1.7% hit for 52-wk period. PepsiCo (including PureLeaf) sagged 7.7%, Coca-Cola (Gold Peak, Fuze, Honest Tea) was off similar 7.8%, KDP (Snapple) was off 3.9%. Private-label wasn’t picking up the slack: segment edged down 1.8%.
Bev pricing probably qualifies as rational heading into this year’s Memorial Day weekend, judging by our perusal of weekend sales flyers of large-format retailers. But as we head into heart of summer selling season, there are gobs of hot deals to be had, not just on usual traffic builders like Coke and Gatorade but on brands like Bai, AriZona, Vitaminwater and Essentia. This year things seem restrained in energy drink category, despite category entering highly competitive period with new entrants making headway, tho of course key battleground is not groceries and drug stores observed here but c-store channel. Our nod for “great-sounding deal that’s not really much of a deal” would go to Target for “BOGO” on Naked Juice and KeVita in which 2d unit is not free but just 25% off. Given current state of math skills, it could work. Here’s some of what we found:
Target national flyer
Coke, Pepsi, Can Dry, 12-pk cans, 3 for $12
Hint, Vitaminwater, Body Armor, 10 for $10
Bai, Fiji, Essentia, 3 for $5
La Croix 8-pk, 3 for $10
Pure Leaf Tea (6-pk), Gold Peak Tea (6-pk), Frappuccino (4-pk), 2 for $10
Naked, KeVita, buy-one, 2d 25% off
Oatly, “new at $4.99”
Simply juices/ades, Gold Peak 52-oz, 2 for $4
Bashas’, Phoenix (for cardholders)
Shamrock Rockin’ Refuel, 2 for $3
Zevia 6-pk cans, $3.99
Tejava Tea (1-liter), Bai/Bubbles, 2 for $3
Coke 6-pks of half-liter bottles, with $1 digital coupon, $1.50
Walgreens, Chicago (cardholders)
Monster 16-oz, Red Bull 12-oz, 2 for $4
Red Bull, 4-pk of 8-oz cans, $5.99
Smartwater, 1-liter, buy-one, 2d 50% off
Simply Lemonade, 52-oz; Snapple, 64-oz, $1.99
Coke, Pepsi, Dr Pepper, 7 Up, A&W, 6-pk cans, 2 for $5
Ralph’s, Southern Calif (cardholders)
Rockstar, Pure Leaf, Life Water, Santa Cruz Organic, Welch’s, BOGO
Essentia 1-liter, 4 for $5
Muscle Milk 4-pk, $5.99
Gatorade 32-oz, Propel 24-oz, 77 cents
Vitaminwater, Smartwater (sports-cap), Sparkling Ice, 10 for $10
Simply 52-oz, 4 for $9
Coke, Pepsi, 7 Up, 12-pk cans, 8-pk bottles, $2.69
Coke, Pepsi, 7 Up, 6-pk half-liter bottles, BOGO
Hannaford, Lowell, Mass
Bai, 3 for $5
Vitaminwater, 5 for $5
Polar Seltzer, 12-pk cans, 2 for $5
Odwalla, 2 for $5
La Croix 12-pk, $3.99
AriZona Iced Tea, 1-gal, 2 for $5
Snapple, 12-pk bottles, $6.99
CVS national flyer (cardholders)
AriZona 23-oz cans, 20-oz bottles, 4 for $2
Core 30-oz, Celsius cans, 2 for $4
Pepsi 2-liter, 99 cents
Gatorade 28-oz, 2 for $3.50
Happy Memorial Day weekend, BBI readers! May the sun smile warmly on your Weber and Camp Chef grills.
Treo Fruit & Birch Water founder Bobby Golden has been drawing wave of coverage in Northeast US lately thanks to activities stemming from activation at Stew Leonard’s chain that seemed to generate high velocities at retailer’s destination stores. Among those spilloffs is retailer’s own version of Shark Tank, dubbed Stew’s Tank, that’s enlisting local food/bev startups to pitch. “After it became ‘one of the best-selling drinks’ at Stew Leonard’s, Treo was the inspiration for Stew’s Tank,” Newsday writes, quoting prexy/ceo Stew Leonard Jr, in typical account.
Brew Dr Kombucha is heading into peak summer season with heavy activation slate around Pride Month. Most visibly to shoppers, Portland, Ore-based kombucha brand on Jun 1 will launch in-&-out rainbow-emblazoned cans of its popular Love jasmine-&-lavender flavor, in partnership with LGBTQ-focused crisis intervention org called The Trevor Project. Each can will have printed on it Trevor Project’s toll-free “lifeline” phone #. Brew Dr also will make donation of unspecified magnitude to train 3 TrevorChat crisis counselors in supporting at-risk youths under age 25 who’re wrestling with suicide and other issues. And it will be working Pride-related events in Calif, Ore and NY. Trevor Project was founded in 1998 by creators of gay-themed short film called Trevor, which tied for Oscar the following year.
Chicago-based Tiesta Tea would like to replace that jar of fruit-steeped water in hotel lobby or break room with more flavorful cold-brew iced tea via convenient filters that don’t require commercial tea machine. System displayed at Natl Restaurant Assn Show in Chicago this past week allows users to dump pre-portioned packet of tea into large reusable filter that’s submerged in 3 gals of water for 2 hours of steeping time. It’s being offered in same 5 blends as bottled line: Black Thai Tropical (papaya citrus black tea), Lean Green Machine (light citrus green tea), Blueberry Wild Child (blueberry hibiscus fruit tea), Maui Mango (mango pineapple fruit tea) and Lavender Chamomile (soft chamomile herbal tea). Of course, cold-brewed tea carries degree of complexity not relevant to coffee, where roasting of beans kills bacteria; for Tiesta, so-called kill step involves UV-ray process undertaken at unidentified partner in Hamburg, Germany, said cofounder Patrick Tannous. Among those who’ve shown early interest in system is Microsoft, which is running test that, if it proves out, could result in system replacing 1,400 water stations that current offer water-&-fruit mix, per Patrick. The iced teas are offered in cases containing 15 packets along with the reusable filter, via Sysco and other foodservice partners. So Tiesta joins ranks of cos (like Steeped Coffee, profiled last week) that offer assertively economical, non-mechanized methods to make artisanal bevs.
Is another solid cold-brewed coffee brand about to offer a shelf-stable RTD entry? At this week’s Natl Restaurant Assn Show in Chicago, Califia Farms staffers were soliciting retailer feedback to slim-can lineup of shelf-stable cold-brewed nitro coffees using their newly devised oatmilk as creamer, aiming for debut this fall. Effort is still at early stage of development, but while nobody among booth staff was willing to discuss effort with BBI, in follow-up discussion this afternoon, coffee gm Brian Lovejoy said new line would harness brand’s most popular flavors from multiserve PET side – Salted Caramel, Mocha and XX Espresso – along with less-indulgent Black & White flavor. They’ll go in Red Bull-style 8-oz slim cans, tho nitro volume will bring coffee content more to 7-oz range. He said co has enlisted unidentified partner to produce first US-made can in nitro coffee sector, with Califia Farms enlisting outside copacker to produce via retort process that’s mild enough to protect flavor, tho not quite to point where co would include a pure-black entry in lineup. “It’s actually a product I would drink,” Brian joked. Complexity of getting new pkg approved, production line assembled and other issues makes it hard to settle on precise timetable for launch, he said. Line was devised at request of immediate-consumption team, as well as to enhance ecommerce offerings. Price is still TBD.
The mockups sitting in back of display cooler at show were identified as Nitro Draft Latte with Oatmilk, the latter a segment almondmilk player Califia only recently entered via barista-oriented item and has been pushing hard (see below). The entry would add to ranks of brands that can hop aboard ambient trucks, joining High Brew, Peet’s and Forto items that move thru KDP distribution network, as well as likes of Rise Coffee, Kohana Coffee and Heyday on indie side. Currently, Rise boasts massive Columbia Distributing among its DSD partners, while Heyday moves thru Big Geyser in NY. As with kombucha, where similar dynamic has been unfolding, arrival of items with longer shelf lives could do much to solve “last-mile” problem, since most-powerful distribution networks still don’t have much refrigerated capability. So this could prove a game-changer.
‘Oatmilk Day’? Event Called for a Free Califia Farms Latte! At show, Califia Farms execs were willing to discuss food-service initiative behind their new Oat Barista Blend, establishing 5-member team last month led by SW sales mgr Mark Skorheim, taking title of national café channel mgr. At show, Mark was busy making and dispensing lattes, as he and team honed their barista credentials. (To riff on old joke, how do you get into Coffee Hall? Practice, practice.) Among team’s early exploits was activation of Califia-created holiday dubbed National Oatmilk Day a week ago, May 16, in which co offered free oatmilk coffee or latte to first 100 customers to request one at flock of about 100 influencer cafes in SF, LA, NY and DC. Roster included indie 3d-wave roasters like Bicycle Coffee, Kindness & Mischief and Coffee Hall Arts District in LA; Circle A Skate & Coffee, Sextant Coffee and Haight Street Market in Bay Area; locations of its roasting partner Coffee Manufactory in both markets, and as exclusive partner in NY/NJ and DC, Gregory’s indie chain. Over 3-day period leading up to event in NY, Califia Café vehicle handed out free oatmilk lattes at pedestrian crossroads like Union Square and Columbus Circle. All told, it dispensed nearly 2K oatmilk coffee cold-brews, lattes and straight-up samples, a rep told us today. As for café activation, many hit daily benchmark by 11 AM. With market leader Oatly continually out of stock, rivals like Califia, Elmhurst and HP Hood have been making hay trying to crack thought-leading cafes, at least as Oatly backup.