
Beer Marketer's Insights
BEV DROPLETS: Organic Valley, Dean Foods JV Is Open for Biz; Califia Farms Pushes into Canada
Ambitious joint venture between Organic Valley growers' co-op and dairy giant Dean Foods is up and running, with sales calls anticipated to commence next month. Recall that alliance announced last Nov offers OV access to Dean's DSD-supported network of 140K retail locations, while fortifying Dean's portfolio of milk, butter, half & half and cheese. Also in mix are OV's single-serve milk items and its Organic Fuel and Organic Balance RTD milk-based protein entries. As earlier reported, Greg Schwarz is serving as gm of 50/50 jv between Dean and co-op that does biz under CROPP Cooperative name . . . LA-based Califia Farms said it's made push into Canada with its almondmilks and cold-brewed coffees, hitting 400+ stores operated by retailers like Whole Foods, Choices, Goodness Me, Thrifty Foods, Pusateri's and Nesters. Portfolio available to US' northern neighbor includes Unsweetened Almond Beverage, Original Almond Beverage, Vanilla Almond Beverage, Unsweetened Vanilla Beverage, XX Espresso Cold Brew Coffee and Mocha Cold Brew Coffee, all produced in Calif but relabeled to suit Canada's bilingual and other requirements.
Pair of upstart dairy-alternative brands that have made a splash by eschewing thickeners, stabilizers and emulsifiers reported headway at Expo West. Houston-based Malk Organics, fortified with capital round via Boulder Food Group, is heading national via Kroger, numbering 1,200 stores so far including most Ralph's and King Sooper banners. By now it's also in 3 Whole Foods regions, Southwest, Rocky Mountain and Northeast, said Joel Canada, who cofounded co with his cousin August Vega and her brother Justin Brodnax. Brand boasts of not employing binders or carrageenan, and claims 3X protein content of bigger almondmilk brands thanks to use of 1 cup of sprouted nuts per 28-oz bottle. It's available in Unsweetened Almondmilk, Vanilla Almondmilk and Maple Pecanmilk varieties.
Cactus water brand Cali Water has added its first USDA-certified organic flavor, Cactus + Lime with Fresh Ginger, joining lineup that includes core Cactus Water sku, Cactus + Peach and Cactus + Berry, all containing 200 mg of prickly pear cactus extract that's been sourced locally. Like others, new entry is available in 11.2-oz single-serve size and 1-liter, said founder Matt McKee. Intro came as co was seeking to bring in growth capital via Circle Up after entering CVS and Target chains in recent months. Next up: Whole Foods' Southern Pacific (SoCal) region, in Apr. With plant water concept offering "desert health," as McKee put it, co may segue into aloe segment next, once it pulls in new capital. It's gotten help in scaling from Cascadia Managing Brands of Ramsey, NJ.
EXPO WEST: 60-Calorie Izze Fusions Takes Brand Quite a Distance from High-Juice-Content Roots
Izze brand, which when acquired by PepsiCo in 2006 had staked out position as carbonated offering with high juice content in 70% range, has gone lighter. At Expo West, co sampled new subline dubbed Izze Fusions that's "sorta juice, sorta soda, sorta sparkling water," with just smidgen of juice allowing items to come in at 60 calories per 12-oz slim can, about half the calories of core 12-oz glass-bottle line. It breaks in Orange Mango, Lemon Lime and Strawberry Melon flavors. Recall, Izze had earlier added 10-calorie Sparkling Water subline, also in glass bottles. Fusions intro at Expo delivered on sneak peek offered at NACS c-store expo in Atlanta last fall (BBI, Oct 20). To get word out, brand has recruited singer/songwriter Shawn Mendes to host celebration called Camp Izze in NY on Apr 8 before he heads off on arena world tour, with event dubbed a "sorta music festival, sorta inspirational summit, sorta world-changing melding of the minds," with artsy vibe similar to effort that PEP is putting behind its new Life WTR bottled-water brand. Party will include young actors Yara Shahidi and Gaten Matarazzo as well as musical acts still to be announced. Tickets to Camp Izze are being offered free to consumers on first-come, first-serve basis. On tour, Mendes will auction off chances to hang with him, with proceeds going to music biz's TJ Martell Foundation backing research for leukemia, cancer and AIDS.
RESEARCH: Barclays Analyst Short: Whole Foods Losing Millions of Shoppers, Many to Kroger
Barclays analyst Karen Short made some waves this week with analysis suggesting that Whole Foods has lost as many as 14 mil store visitors over past 6 quarters, with many of them migrating to increasingly robust selection of natural and organic offerings at Kroger. "The magnitude of the traffic declines . . . is staggering," as Business Insider quotes Short's report. "As most retailers know - once traffic has been lost, those patterns rarely reverse." Whole Foods has reported 3% avg store traffic decline since fiscal 2015. Short estimates that Kroger's sales of natural and organic products, including branded entries and grocer's own Simple Truth private label, came to $16 bil last year, catching up with Whole Foods' $15.8 bil in sales. Gains have been helped by prices that are estimated to be 15% lower than for comparable items at Whole Foods. As story notes, Whole Foods ceo John Mackey has conceded threat posed now that conventional grocers "have upped their game" but has vowed to win them back.
Bai Brands, recently acquired by Dr Pepper Snapple Group, appears to have undertaken significant layoff of sales and distributor support staffers this week, with outside estimates ranging from 50 staffers or more, tho we haven't confirmed that #. That would be significant chunk of overall payroll believed to be in 300+ range at Hamilton, NJ, bevco picked up for $1.7 bil by DPS earlier this year. It would follow smaller cutbacks in recent months, some undertaken not long before sale to DPS, tho co execs characterized many of those as part of effort to upgrade staff rather than cut costs. Coupla bev execs told BBI they're suddenly awash in resumes from displaced staffers, tho it's not immediately clear whether layoff reflects slowing sales growth that's necessitated cost cuts or perhaps move to fold Bai sales effort into broader one behind other DPS brands. Recall also that DPS had vowed to invest heavily in continuing Bai's growth trajectory, boosting last year's $50 mil marketing budget by another $25 mil this year with view to driving sales to $425 mil range this year (BBI, Nov 22). There was even report last fall from Business Insider that co was building $100 mil campaign just around recently signed endorser and investor Justin Timberlake (BBI, Nov 23). It's not clear from outside whether there may be any rethinking occurring on marketing spend. From what we hear, whatever tweaking may be going on, there's no letup among DPS troops to making pricy acquisition pan out as key noncarb growth platform for future.
Coca-Cola Teams with LatAm Bottlers to Conclude AdeS Purchase from Unilever; Deep Dive into Soy Bevs
Coca-Cola has proceeded with long-incubating deal in Latin America that will see it make big jump into plant-based bev space. KO said it's partnered with key bottlers to finalize acquisition of AdeS from Unilever, giving it pioneering marketer of soy-based bevs that are currently sold in Mexico, Colombia, Brazil, Argentina, Chile, Uruguay, Paraguay and Bolivia. Coca-Cola FEMSA is indie bottler with biggest participation in transaction, but also investing are Arca Continental, Embotelladora Andina, Embonor, Corporacion Del Fuerte, Corporacion Rica, Bepensa, Embotelladora del Nayar, Embotelladora de Colima, Solar, Brasal, Bandeirantes, Sorocaba, Simoes, Uberlandia, CVI, Lee and Monresa, along with Jugos del Valle juice joint venture with Mexican bottling partners. AdeS was founded in 1988 in Argentina; KO and ULVR had announced they were hammering out deal last Jun.
EXPO WEST: Cold-Brew Player La Colombe Offers First Non-Dairy, Tea Entries; Cracks Publix, Target
Philadelphia roaster La Colombe, which has made its artistry with "frothed milk" a key part of its RTD appeal, used Expo West as stage from which to launch its first dairy-free frothed entry, using non-GMO coconut milk. It's departure for co that's staked its identity on offering "Real Coffee. Real Milk. No bullshit," as marketing materials proclaim, referring to reduced-fat milk that's at heart of its recipes, tho La Colombe also has offered a Pure Black entry using just coffee and chicory as ingredients. Also on view at Anaheim, Calif, show was a cold-pressed tea entry, Chai Draft Latte, using black tea base and range of spices like ginger and cardamom, marking push into burgeoning cold-brewed tea side. And on indulgence side it sampled a Peppermint Mocha. Expansion of portfolio comes as brand is similarly expanding its retail presence, said marketing exec Jon Spear. That includes brand's entry into Publix chain the week before show, as well as 300-store test in Target chain.
Tho Talking Rain has remained mum on reason for abrupt exit from co of ceo Kevin Klock, his departure seems to have occurred entirely for personal reasons rather than reflecting any dispute over strategy or biz practices at co, several sources tell BBI. Exit of exec credited with turning neglected Sparkling Ice regional bottled water brand into national DSD juggernaut comes at key time, considering that ownership group has approved $37 mil media budget to try to finally add personality to Ice brand via "Be not bland" campaign, prompting inevitable speculation among trade partners and others about possible change in plan. But there's been no wavering on initiative under interim ceo Marcus Smith, who stepped up from cfo, BBI hears. Less clear is status of what was to be co's first acquisition, as it seeks to make good on Klock's longstanding promise to DSD wholesalers to broaden portfolio of brands offered by Talking Rain. During recent visit to NY, Klock had indicated that announcement was imminent, but it's not clear whether deal is going forward or not, and outside pr rep told BBI last week she hasn't heard whether it's on. Still, sources close to co emphasized that the acquisition was not a point of friction that had anything to do with Kevin's departure either. Co has not IDed acquisition target; one possibility that's popped up in trade rumors has been Essentia alkaline water brand, but Essentia execs have said it's not them.
Looks like Coca-Cola has met its commitment to further augment its lineup of RTD coffee by Q1: co has just begun to ship to initial retail accounts a pair of Gold Peak-branded cold-brew sku's, in keeping with launch target KO promised last Sep. Coke rep confirmed that Gold Peak, hitherto strictly a tea brand on RTD side, is starting its foray into coffee with pair of cold-brewed flavors: Salted Caramel and Almond Toffee, in keeping with promise late last summer by Tea & Coffee vp Geoff Henry to offer "tasty" array using real cream and real sugar, as labels attest. Packed in 14-oz bottles, Gold Peak Coffee entries are positioned as delivering "cold brew, smooth taste," at 270 calories per bottle. In response to inquiry placed Fri, Coke rep said new RTD entries have only begun to hit select accounts this past week, with presence continuing to expand thru May. He said co hopes to offer further details in a week or so. No word so far on tea lattes that also have been on new-product slate for Gold Peak, which has taken lead role on tea as longtime Coca-Cola/Nestle partnership around Nestea brand eroded and ultimately was dissolved in N Amer. Until now, Gold Peak's only presence in coffee was in foodservice and via whole-bean offering at grocery.