At just 22 years of age, youthful VC named Patrick Finnegan claims to have made 50 investments so far and offered guiding hand in building such visible brands as Dirty Lemon, the DTC juice brand in which Coke recently invested, and hemp newcomer Recess.  After fully deploying fund called TGZ Capital launched with social media mavens Jake Paul and Cameron Dallas via investments in likes of Bulletproof Coffee, Quip Toothbrushes and MatchaBar, he’s getting ready to launch next fund.  And seeking a bit more visibility after largely staying behind scenes, he’s interested in getting message out that founders might consider avoiding the usual suspects among seasoned VCs in favor of youthful investors like himself who have a better bead on the Gen X, Y and Z consumers whom they’re targeting.  The best options aren’t necessarily the “gray-haired dude or Harvard MBA,” but rather a youthful investor who’s a friend and peer to the founders and understands the market, Patrick urged in phone conversation today.

Finnegan doesn’t hide dismissive view of angel investors claiming to bring “strategic” qualities, saying that for all the full Rolodexes they claim, most don’t deliver much more than the check.  “Founders get seduced when angel investors drop names, but they’ve actually not done anything but wire the money,” he said.  By contrast, at Dirty Lemon, Finnegan helped brand get into hot venues like Mercer Hotel and build stable of A-listers, starting with target list of 50+ and drawing on celebs’ fear of missing out on next big thing to build that out.  In statement, founder Zak Normandin termed Finnegan’s aid “extremely helpful,” saying “his contacts and insight have given us an added advantage in a space that is quickly becoming cluttered with new challenger brands.”

Finnegan, who shuttles between NY and LA, takes spot within bev biz that seems to attract its share of prodigies, from Ben Lewis, who launched Give brand out of Wharton undergrad dorm room, to Jaden Smith (Just Water) and Mikaila Ulmer (Me & the Bees Lemonade).  Tho just 22, Patrick’s career spans over a decade by now.  Attending speaking event by Rep John Lewis at age 11, he was enlisted by congressman as Obama fundraiser.  He also ran design shop called ONMSG from dorm room at boarding school in Delaware; cofounded Gen Z-targeted news aggregator called WorldState that entered agency Wieden & Kennedy’s Portland Incubator Experiment program for scaling into what became Limitless Times, and got into investing 5 years ago, including in cos like Lyft.  TGZ Capital (the letters stand for Team Gen Z) was launched 2 years ago and made about 30 investments in 18 months.  He also owns youth-marketing agency called XYZ.

Now Finnegan says he’s close to announcing new fund.  He wasn’t ready to say much, but emphasized his belief that there’s big opportunity for brands aiming more at the masses than many he’s invested in so far, “chic but affordable” brands that work in markets beyond NY, LA and SF and hold global potential down the road.  Tho brand is older than he is by now, he cited AriZona Iced Tea as role model for brand that holds broad appeal and grew without recourse to outside capital, even if its nutritional profile isn’t in synch with the times.  Finnegan doesn’t deny that Dirty Lemon tilts a bit toward the arcane but believes Recess holds great potential for mass appeal, as founder Ben Witte builds compelling lifestyle brand that should succeed regardless of vagaries of hemp/cannabis segment that’s still hard to read.  So Recess is far more than “arbitrage play” in frothy segment.  (For his part, Witte terms Patrick “wise beyond his years – his young age is a competitive advantage.”)

Finnegan readily admits to missteps along the way.  Among his recent regrets is investment in unidentified cosmetics co whose capital table had him so “star-struck” that he overlooked fundamental qualm about exec team’s makeup – group of male data scientists targeting majority-female segment without a single female making decisions.  He brought in celeb endorsers and otherwise helped rampup, but now harbors doubts about co’s future.

Kefir specialist Lifeway Foods continues to be work in progress, reporting 13% net sales decline to $103.4 mil for full year 2018 as its brand renovation initiative together with headwinds for dairy in general made it tough go. Operating loss at Chicago-based co widened to $3.1 mil from $526K a year earlier. “Our team continues to work diligently on our strategic long-term plan, Lifeway 2.0, to reinvigorate growth,” said ceo Julie Smolyansky, with plant-based Plantiful probiotic bev a particular source of optimism for current fiscal year. For Q4, sales dropped 12% to $23.03 mil and operating loss slightly narrowed to $3 mil from $3.2 mil a year earlier.

Story last Thurs about KDP suit vs Body Armor interpreted $35 mil figure cited in Body Armor statement to refer to distribution buyout; it actually represented return on KDP minority stake, we’re told . . . Cannabis player MetaCan, profiled here last week (BBI, Apr 9), includes among its board members Scott Greenberg of longtime Starbucks law firm K&L Gates; we accidentally called him Scott Gates . . . In profile of Lemon Perfect brand (BBI, Apr 11), typo inadvertently rendered CAA Sports co-head Michael Levine as Michael Levin.

Coca-Cola and Dunkin’ have now brought their iced coffee collab to multiserve realm, debuting 48-oz PET bottles of Dunkin’ Iced Coffee in Original and Vanilla flavors. “Rich smooth coffee taste,” promises label copy . . . Uptime energy brand has added Blood Orange and White Peach flavors, each available in cane-sugar and sugar-free versions. Blood Orange launches as 7-Eleven exclusive thru Jun 30. Additions to line come as aluminum-bottle Uptime has entered NY house Big Geyser among cadre of replacement brands for departed Monster Energy brand and has been planning intensified marketing blitz in that city (BBI, Apr 5).

It’s not often that Austin is late to a bev trend, but until now it hasn’t had much happening on burgeoning canned-kombucha side. That changed in recent weeks as fermentation fanatics behind local Barrel Creek Provisions launched new sparkling brand called Greenbelt Craft Kombucha. As Houston CultureMap reported, brand is collaboration among Adam Blumenshein, Tim Klatt, Nathan Klatt, and Rick Boucard, who’re founders of local Texas Sake Co and Barrel Creek Provisions, along with blogger Gavin Booth of “Couple in the Kitchen” property. (Barrel Creek makes fermented items like cucumbers, carrots and kimchi cabbage and founder Blumenshein describes himself on website as “hailing from a long line of pickle-pioneering German-Americans.” Adam’s also been involved with Strange Land Brewery.) Greenbelt debuted a few weeks ago at 130 HEB stores in 4 flavors packed in conventional 12-oz cans: Peach Blossom White Tea (white peony tea and peaches from Texas Hill Country), Strawberry Fields Rooibos Tea (with dried strawberry fruit and leaves), Blood Orange Yerba Mate and Hibiscus Berry Black Tea (using pu’erh black tea as base). Labeled as a “sparkling probiotic,” the entries each contain 10 g of sugar (40 calories) per can. Website, which seems to still be under construction, is GreenbeltKombucha.com. In keeping with Texas’ emergence as major source of wind power, Greenbelt claims to be powered entirely by that renewable energy source. Brand name riffs on popular Barton Creek Greenbelt respite in Austin.

Is a buyer in sight for struggling dairy giant Dean Foods? Shares were up today on report in Globe & Mail paper that it might be target of Canadian dairy giant Saputo, just as that co was closing on acquisition of UK’s Dairy Crest Group for about $1.7 bil Canadian. Saputo is among top 10 dairy processors in world, with major operations in Australia, Argentina and UK. DF has effectively put itself up for sale via strategic review, and 6 years ago shed its Morningstar plant-based meat operation to Saputo, which has also been considered to be eyeing Breakstone unit being shipped by Kraft Heinz as part of its own restructuring.

When former Nestle exec Neel Premkumar launched Forto Coffee Shots, the premise was simple and straightforward: to offer a clean, premium alternative to the 5-Hour Energy Shots that dominated the nation’s checkout counters. The move proved to be highly successful, with co demonstrating some of the higher velocities in RTD coffee biz, drawing an equity stake from JAB’s Peet’s Coffee unit and a national distribution deal with JAB-aligned Keurig Dr Pepper, for which Forto has been churning out coffee shots based on its pod brands, too.

 Total bev sales in c-stores rose a “solid” 4% in Q1, improving on +2.9% growth in Q4, per Wells Fargo Securities’ Beverage Buzz survey of execs representing about 20K c-stores across US.  Non-alcoholic bev sales were “mixed” in Q1, up 4.1%, ahead of 3.8% growth in Q4.  Coca-Cola and KDP sales gains were lower than Q4.  Monster slowed to +2.7% while Red Bull “had the strongest sales, up +6.4% in Q1,” wrote sr analyst Bonnie Herzog.

MNST Pricing Hurting Sales, to Red Bull’s Benefit; Bang on Big Roll   “How bad can things get” for Monster Energy, wondered Bonnie.  Sales gain of 2.7% was well below 7.3% gain in c-stores in Q4 as retailers cite combo of pricing not sticking and group of challengers led mainly by Bang.  About 75% of retailers indicated Monster volume has decelerated in c-stores, well above 44% who reported that in Q4 survey.  “It’s becoming increasingly clear that Monster’s price increase was possibly ill-timed, particularly given stepped up competition from Bang,” noted Bonnie.  While MNST execs have said they plan to stick with pricing strategy, survey found “nearly 45%” of retailers indicated that “Monster has provided (or plans to provide) promos to offset its price increase.”  That’s “up significantly” from 25% of retailers who indicated those plans in Q4 survey.  Retailers also indicated that MNST “has moved away from its ubiquitous 2 for $4 pricing promo in most cases,” and most retailers indicated “Monster is funding the majority of its current promos, suggesting margins could be under pressure,” added Bonnie. 

As mentioned, after standing pat on its own prices Red Bull is key beneficiary of higher MNST prices, scoring estimated volume gain of 6.4% in Q1.  Some 75% of retailers indicated they’ve seen acceleration in Red Bull sales/volume in Q1.  That’s up from 60% of retailers in Q4 survey and “nearly 90%” of these retailers agree with Red Bull strategy to not follow MNST price hikes.  That said, 35% of retailers believe Red Bull has plans to increase promo activity.  That’s down from 44% who felt that way in Q4 survey but “still well above” Nov 2018 survey, when just 18% said Red Bull promos were on rise.

Meanwhile accolades keep coming in for Bang.  “Bang – which 90% of retailers either currently carry or plan to carry – has evolved from a looming threat to a very real threat,” wrote Bonnie. “Retailers didn’t mince words – both with respect to Bang’s rapid growth trajectory as well as to how other manufacturers (such as Monster) have responded, she added.  “I have not witnessed a product movement like Bang in the past decade.  We bring case stacks in at a time and it seems to vanish,” said one retailer.  Monster’s response to Bang, Reign, has already gotten widespread distribution, with “nearly” 90% of retailers indicating they carry it, but “some retailers indicated that the early response from consumers has been underwhelming . . . echoing some of our recent concerns.”  And while MNST have been careful to treat Reign as completely separate brand, 53% of retailers said they took shelf space from existing MNST brands to make room for new entry.  Also, 40% of retailers said MNST is paying “additional slotting fees for Reign placement.”

Some also are questioning whether Monster is so busy trying to play defense that it’s undermining its own strategy.  “Bang, C4, Uptime and others will continue to erode Monster,” wrote one c-store exec.  “They are too busy fighting the world with lawsuits than playing offense and focusing 100% on building their business . . . They made Bang who and what they are today by giving them so much attention.”  (That jibes with “Merchandising & Pricing Standards” document BBI has seen demanding, that in retail accounts that carry Bang, Reign “MUST be touching Bang” and that Reign must get similar stacker or open air cooler anywhere that Bang does.  “DO NOT place in ANY Monster branded equipment,” guidelines insist.  “Every move they make enhances our case,” noted Bang exec who showed us the doc.)

KO, KDP Sales Slower than Q4   Coca-Cola sales rose estimated 2.2% in Q1 based on survey, down from +2.5% in Q4.  PepsiCo sales “up a very modest” 1.2% in Q1 vs -0.7% decline in Q4 survey, while KDP sales up estimated 1.2%, well below +3.3% in Q4.  As for KO, “retailers were divided as to whether KO’s new flavors such as Orange Vanilla will drive incremental sales, although there’s clearly still plenty of excitement about Body Armor,” wrote Bonnie.  “Few” retailers indicated they would give Orange Vanilla incremental shelf space, per survey.

Modest gains for PEP have not placated retailers, who “continued to express concern about Gatorade,” noted Bonnie.  But “there was little optimism about the balance of PEP’s portfolio or, for that matter, the company’s overall beverage strategy.”  Over 70% of retailers said they haven’t seen an uptick in PEP sales in c-stores “despite stepped-up advertising & investment spend, suggesting to us that it might take PEP a very long time to undo years of persistent underdevelopment in its beverage business,” she wrote.

No surprise that retailers are still mourning loss of Body Armor and Fiji from Keurig Dr Pepper portfolio, but on a brighter note, “several retailers called out Core Water & the company’s CSD business as pockets of strength,” per Bonnie.