In another sign that hemp is heading into mainstream, Phivida Holdings said Safeway next month will pick up its line of Oki hemp-infused iced teas and flavored waters for all 103 stores in Colorado. Safeway will merchandise all 4 sku’s of each line in stores’ specialty drinks aisle, making initial purchase of 2,500 12-unit cases. Oki is packed in 16-oz glass bottles and infused with 20 mg of active hemp extract. “We are extremely excited to be associated with the Safeway brand and appreciate their confidence in us and their desire to align with a trusted brand and product such as Oki,” exulted prexy/ceo Jim Bailey. Phivida is based in Vancouver, BC, but boasts extensive operations in San Diego . . . Revive Kombucha, which recently amped up its rhetoric about about kicking soda’s butt with release of new slim-can sparkling line (BBI, Mar 5), is going after CSDs in core channel, c-stores, via major launch in 7-Eleven chain. Petaluma, Calif-based unit of Peet’s Coffee said the retailer has agreed to pick up 3 of its 12-oz glass-bottle sku’s for 8K stores, opting for Original Cola and caffeine-free Hibiscus Refresher and Ginger Lime flavors. They’ll go out at $2.99. Revive cited its younger-skewing demo as auguring success in youth-frequented channel, arguing this reps largest entry by any kombucha brand into that channel so far. “Revive Kombucha is hands-down the best tasting kombucha available in the marketplace,” said 7-E senior category mgr Chris Stewart in statement. “7-Eleven is proud to be the first convenience store to take Revive national to our 8,000 US Stores. This will make kombucha more accessible for our on-the-go customers, who range from Gen Z to Young Boomers, that are seeking better-for-you beverage alternatives.”

With its sales down 12% in latest scanner data and conventional energy segment under attack by performance brands like Bang, C4 and Celsius, stresses seem to be mounting at Rockstar.  One sign is suit it filed vs Celsius late last year that Celsius Holdings execs disclosed in earnings call last week.  Suit filed in federal district court in Nev on Dec 18 alleges false advertising, violation of trade practices and unfair competition, in essence arguing despite body of clinical studies Celsius cites, sucralose-sweetened line is no healthier than the conventional energy brands it’s challenging.  “All of the self-funded studies in the world cannot hide the fact that Celsius contains customary energy drink ingredients, with standard amounts of customary artificial sweeteners such as sucralose (also found in Diet Coke), and its attempt to tout its beverages as a ‘healthy’ alternative to other ‘unhealthy’ energy drinks is nothing short of a marketing charade that disparages and damages its direct competitor Rockstar,” suit filed Dec 13 states. “Rockstar accordingly files this action for damages and injunctive relief.”  In mentioning suit, CELH ceo John Fieldly, vowed to “vigorously fight this unfounded lawsuit.”  Another issue is move by Rockstar’s national distribution partner PepsiCo to launch Mtn Dew-branded energy drink, this one named Mtn Dew Amp Game Fuel, that would aggravate run-in partners had years earlier over Dew’s Kickstart extension. 

Rockstar Claims Deception, but Celsius Chief Fieldly Sees Suit as Reaction to Slowing Sales   Among claims made by Rockstar suit is that Celsius wrongly classifies its bevs as dietary supplements to avoid higher scrutiny accorded foods, puts fruit imagery on label to falsely convey that items contain fruit, self-funded all but one of clinicals and derives its claimed “thermogenesis” simply by virtue of elevated caffeine level rather than self-described “proprietary formula.”  “After floundering in the beverage space for many years, Defendant recently began to experience commercial success through falsely promoting its energy drinks as a ‘HEALTHY ENERGY’ alternative pursuant to a so-called ‘proprietary formula,’ when in fact Celsius is a standard energy drink containing customary energy drink ingredients and artificial sweeteners,” suit alleges.

On investor call, Fieldly didn’t hesitate to attribute legal action to reverses that Rockstar and other established energy brands are suffering at retail these days.  “As an organization, we continue to expand and Celsius continues to gain momentum,” he told investors.  “Other brands like Rockstar will lose shelf space as a result of our success.  Today, we are gaining high-level placements in many retailers across the country and are outselling many of the SKUs of other much larger brands.  With that said, Celsius is replacing the slower-moving items from these other brands as these once-dominant brands are not aligned or positioned with today's health-minded consumer.”

Later in call, discussing Celsius gains in c-store chains like Circle K and Quik Trip, he described “a renaissance taking place right now in the energy category . . . As health and wellness trends continue to take hold, you're seeing these fitness functional energy products really gaining the opportunities that it's never have been able to accomplish.  And there is a migration taking place for healthier alternatives in the category.  Just like the sugary soda CSD category was affected many years ago from sparkling waters, you're seeing that in the energy category today.  And that's where we see great opportunities in the convenience channel.”

Asked about Bang, Fieldly credited them with doing a “great job” to capitalize on new trends.  “They've been gaining a tremendous amount of traction and so has Celsius.”  He views Bang as complementary to Celsius, reaching younger demo, at 18-24 vs Celsius’ 24-36, and not tilting as heavily female as Celsius, which reaches even split of genders.  New partnerships with retailers like Target and CVS and indie DSD houses within Anheuser-Busch, KDP and Pepsi systems should help Celsius better exploit opportunity, he believes.  As reported, Rockstar has responded to inroads of performance brands by revamping its XDurance brand, while Monster recently released performance brand called Reign. 

Game Fuel Moves Dew Brand Overtly Back into Energy Space   Behind scenes, we’ve been hearing, has been further friction with national distribution partner PepsiCo over that co’s launch early this year of Mtn Dew extension called Mtn Dew Amp Game Fuel that further thrusts Dew into energy segment, in what we hear Rockstar brass perceives as violation of contract.  Recall that was source of friction back in 2013 when PEP launched 16-oz Kickstart as “energizing” extension of Dew that it was careful to argue (with some slipups) not actually an energy drink (BBI, Feb 12 2013 and Feb 13 2014).  That’s because new energy brands outside existing Amp franchise are supposed to come from Rockstar, per contract.  This time, with Amp name on cans, it’s harder for PEP to elide seeming conflict.  As announcement in Jan said, “MTN DEW AMP represents the rejoining of two tentpole brands within the PepsiCo family, infusing new excitement into the AMP portfolio by bringing it back to its roots as MTN DEW AMP.”  The focus-enhancing Game Fuel is positioned as “gamer informed, gamer approved,” and after beta test in Dec went out broadly in Jan in 16-oz cans with no-slip texture and resealable top, in Charged Cherry Burst, Charged Berry Blast, Charged Tropical Strike and Charged Original Dew flavors powered by caffeine, yerba mate and L-theanine.  “Find it online and in the energy door section of retail stores,” announcement stated.  Rockstar’s disputes over Kickstart (now in steep decline, as is Amp) and Game Fuel parallel similar run-in between Rockstar rival Monster Beverage and its own distribution partner Coca-Cola over KO’s plans to offer energy extensions of core Coke brand in some markets (BBI, Oct 30 and Jan 18).  That went to arbitration, with decision due next month.

Roasting giant Starbucks has teamed with Valor Equity Partners to launch $100 mil fund dubbed Valor Siren Ventures I that will seek out investments in food and retail, apparently with emphasis on technology side. Execs at Starbucks annual meeting said new fund will seek to raise a further $300 mil in coming months from other strategic partners and key institutional investors. As TechCrunch noted, partner Valor Equity Partners has deep history on both tech ventures like SpaceX, Tesla and Addepar and on foodservice side via WowBao, Fooda and Eatsa. With move, Seattle co joins ranks of CPG giants who’ve gotten into venture game, including PepsiCo, Campbell Soup, General Mills and Kellogg, as they seek to augment internal innovation activities. “With an eye toward accelerating our innovation agenda, we are inspired by, and want to support the creative, entrepreneurial businesses of tomorrow with whom we may explore commercial relationships down the road,” said prexy/ceo Kevin Johnson, but he remained vague on kind of investment targets SBUX intends to pursue. Valor Siren Ventures, of course, is distinct from Maveron Capital fund launched in 1998 by Dan Levitan and former SBUX ceo Howard Schultz.

NY-based brand called Recess that’s parlaying whole-spectrum hemp fortified with adaptogens into lifestyle play has built out exec team, opened its first popup store and is in hunt for DSD partners.  Canned sparkling line packed in stylishly branded 12-oz cans has been greeted by some commentators as CBD comes to La Croix, with Bustle, for instance, assuring readers, “Now you can try CBD in millennials’ favorite form: flavored sparkling water.”  As noted Fri, Recess just signed its first DSD partner, NY’s Big Geyser, with Southern Calif the next focus as brand prepares to move up and down West Coast and fill in Northeast.  Among team members recruited by founder and former ad-tech exec Ben Witte are former FRS exec Simon Goode running operations, longtime distributor and brand operator Dan Holland building out West Coast sales effort and former Vita Coco exec Tom Serventi running east.  Also aboard is fashion vet Andrea Suarez, formerly of Paul Smith, Rag & Bone and Suitsupply, to run co’s online activities and retail stores.  First sales hire was Becca Bernard, former Harmless Harvest sales exec more recently at Bruce Cost Ginger Ale.  Team is now building out broader sales and field marketing teams.  It just launched Uber Eats in NY.

Recess blends 10 mg of full-spectrum hemp oil, American ginseng, L-theanine and schisandra in 3 flavored combos: Blackberry Chai, Peach Ginger and Pomegranate Hibiscus.  It’s packed in 12-oz cans with minimalist text against subtle color backgrounds and positioned as “sparkling water infused with hemp extract and adaptogens,” with no mention anywhere on can of CBD component, in Witte’s belief that perceived effect and lifestyle branding will carry burden, much as Red Bull and Monster don’t belabor their use of taurine in formula.  Intending Recess as antidote to frenetic lifestyles and mounting stress and anxiety of people these days, Witte developed and produced it with upstate copacker called Drink More Good and its founder Jason Schuler after disliking results of working with major formulator.  Brand launched in NY last Oct in combo of retail stores and online, and last month opened popup store and event site on stretch of Broadway in Greenwich Village that draws style-conscious shoppers to boutiques and jean stores (coincidentally around corner from Rise coffee popup ensconced in gender-neutral Phluid Project boutique.)  Brand already claims to have ridden Big Geyser connection to 500 doors within NY’s 5 boros, including Fairway chain, with Long Island next on agenda, but it won’t eschew online component as key element given Witte’s belief that brands these days are “built on phones, not shelves.”  He admits to being surprised that roughly two-thirds of online sales have been coming from outside Calif and NY, with some Chicago retailers ordering product at full retail price off the website so they can carry it in their stores.  That suggests demand is much broader than usual pockets of hipsterdom.  Without any meaningful degree of marketing having kicked in yet, brand already is inspiring 1,500+ Instagram posts a day and claims higher engagement on social media than Bai or Spindrift.

The popup, dubbed Recess IRL (“in real life”) has been described by Gotham mag as NY’s “most Instagrammable spot,” an “experiential space with mood changing-lighting, neon lights, mirrored walls, stadium-style seating.”  It’s been hosting events targeting influencers in creative areas like the arts, fashion and food, like Mix & Mingle sponsored by Bumble dating site or Fight Club Sip & Paint.  Co is scouting LA locations for next one, with popups envisioned in other creative meccas like Boston, SF, Miami or Chicago.  (Gotham’s photos of site can be seen here.)

Initiative drew initial funding round of $2 mil that included institutional partners like M3 Ventures (which has invested in Wandering Bear cold-brew, Mooala dairy alternatives, WTRMLN WTR, Stillhouse craft spirits, Van Leeuwen ice cream, Balance superfood shots and Foxtrot Delivery Market) and Torch Capital (Sweetgreen and Matchabar), followed by an additional $3 mil from strategic partners including execs from Walmart and Hudson News.  Co is prepping for Series A financing round, with Witte vowing to stay in front during what’s expected to be explosive burst of activity in nascent segment.

Popular powdered go-to for gamers called G Fuel is making migration to RTD segment, prepping 16-oz cans for this summer that will vie against brands like Mountain Dew Game Fuel. Brand that positions itself as “official energy drink of Esports” has combined caffeine from unroasted coffee beans with L-Tyrosine amino acid in initial flavor range of Fazeberry, Blue Ice, Sour Cherry and Rainbow Sherbet that, unlike powders, come in at zero calories. (The powders, out since 2012 with recipe based on range of fruit extracts, contain 25 calories per serving.) “We were early adopters in the gaming space and we now have an aggregated reach of more than 200 million fans. They’ve inundated us with requests for a ready-to-drink version,” said founder/ceo Cliff Morgan. The entries offer lure of improving focus and reaction time. Line will break online in late Jun at GFuel.com.

 Under new ceo James Quincey, Coca-Cola has shown uncommon willingness to experiment, even with core brands.  So flagship Coca-Cola brand just added Orange Vanilla entry, Diet Coke just added Strawberry Guava and Blueberry Acai flavors, and Honest Tea has been considering the notion of bringing its Honest Coffee extension from Europe to N Amer (tho it didn’t debut as some within Coke had anticipated at Expo West).  Now Smartwater – which waited 8 years after its KO’s 2007 acquisition of brand to launch first extension, unflavored sparkling water – is intro’ing flavored sparkling subline debuting in 3 flavors, not long after brand added electrolyte and alkaline extensions.  So by standards of past, Smartwater brand is positively wigging out these days as KO turns it into all-purpose platform to ride latest trends.

The subline, in Fuji Apple Pear, Strawberry Blood Orange and Raspberry Rose flavors, is hitting key metros this week in half-liter bottles in singles and 6-packs.  Priced at $2.29, they’re attempt to challenge high-end flavored seltzers marketed under brands like Perrier and San Pellegrino, even as Dasani Sparkling vies at low end vs brands like National Bev’s La Croix and Pepsi’s Bubly.  Initial markets are NY, Boston, Chicago, LA, SF, Miami and Philadelphia, with online availability commencing this summer.  Launch reps another example of Quincey’s “lift & shift” approach, where concepts that are working in one territory are exported to other markets, with needed tweaks.  It was in Europe, in summer 2017, that KO first extended Smartwater into flavored sparkling segment, with Lemon, Kiwi & Berry and Green Apple flavors packed in 600-ml PlantBottle format.  

7-Eleven has opened concept store in Dallas that stretches notion of c-store to encompass sitdown taco restaurant, along with “made-to-order coffee, cold-pressed juices, smoothies and agua frescas, a bar with wine, beer, kombucha, nitro cold brew and teas on tap (as well as bar-style seating nearby), ‘The Cellar’ stocked with a large selection of wines, a beer cave and a self-service growler station which will include local beers and ciders,” among other enticements, as Food & Wine reported.

Many evils have been ascribed to Big Tobacco over the years, resulting in billions in fines and penalties, but NY Times on Fri came up with another: it can take blame for ensnaring a generation of kids in diabetes-inducing sugary drinks under brands like Tang, Capri Sun and Kool-Aid. That the tobacco cos once marketed those brands is no secret, Times acknowledges, “but researchers combing thru a vast archive of cigarette company documents at the University of California, San Francisco stumbled on something revealing: Internal correspondence showed how tobacco executives, barred from targeting children for cigarette sales, focused their marketing prowess on young people to sell sugary beverages in ways that had not been done before.” For dose of outrage, or perhaps to pick up some marketing tips, you can read story here.

Herbalists Are Hot over Fire City Trademark Stress is mounting in herbalist community as members of tight-knit fraternity legally challenge Mass-based Shire City Herbals over whether it was entitled to trademark the term “fire cider.” As reported, Shire City has been steadily expanding the pepper-infused drinking vinegar it produces and markets under Fire Cider name (BBI, Feb 5 2018), using techniques that cofounder Dana St Pierre said he learned from his German grandmother. But, as NY Times reported on Sun, that’s raised hackles of herbalist community, which believes fire cider is generic term harkening back to home study course taught in early 1980s by Rosemary Gladstar, so-called “godmother of modern herbalism.” Shire City has been arguing that it needs to protect name to prevent larger cos from invading space with similarly named products, rejecting overtures from influential herbalists to work together to have US Patent & Trademark Office declare the phrase as generic, so that nobody can use it as brand name. A distressed St Pierre told paper issue is “this really weird clash of worlds. We're just trying to run a business. The herbalist community has tried to present this as a story of good versus evil.” You can decide by reading story here.