Beer Marketer's Insights
OWYN, the allergen-free plant-based protein line launched by pair of married athletes, is rapidly broadening platform heading into 2019. It’s added Cookies N Cream flavor to core bottled line, graduated Turmeric Golden Mylk flavor from online-only availability, debuted a kids line sold online, and is prepping meal replacement line for summer, in a year that Jason Cohen, founder/ceo of controlling shareholder Halen Brands believes brand will hit $20 mil in sales, barely two years into its existence. It’s augmenting robust e-commerce platform with customer relationship management component this month. And it’s orchestrating unusual collaboration of upscale food/bev brands in Long Island beach haven this summer that should elevate awareness of innovation leaders.
Recall that OWYN (short for “only what you need”) was created by former football player Jeff Mroz and former soccer player Kathryn Moos, who enlisted Halen to mastermind buildout and launched at Expo East a year and a half ago after four years in development (BBI, Sep 26 17). Tho brand is taking its time on entering major national chains, Feb still proved record month, with Mar outrunning it so far and putting brand on track to hit $20 mil for full year, said Jason, speaking to us at internal expo hosted in Brooklyn yesterday afternoon by OWYN’s NY distribution partner, Big Geyser, where bar was doing steady business in White Russians made from Cookies N Cream sku. (We had followup conversation today with svp marketing Mark Olivieri. Moos and Mroz, who just had baby girl, didn’t attend showcase.) Brand by now has become #1 vegan protein drink on Amazon, and has been greenlighted for national rollout thru Whole Foods, not just on warm shelf but in cold box too, thanks in great part to DSD support from partners like Big Geyser, Jason said. For his part, Big Geyser coo Jerry Reda praised co for way it’s “understated and outperformed.”
Cohen and Olivieri made it clear they view OWYN brand as able to support broad range of consumption occasions, and are building out platform accordingly. A new kids line goes out in Horizon Organic-like Tetra Pak pull-tab boxes, with just 5 g of sugar vs 20 g or more in dairy-based items from Horizon and Organic Valley thanks to use of brand’s proprietary sweetener blend, but bringing full nutritional benefit including 8 g of protein from range of sources, not just peas, and calcium and vitamin D on par with dairy milk. It will test online in early Apr in Vanilla and Chocolate flavors, Mark told us. In core line, Turmeric Golden Mylk debuted in e-commerce channel and now is heading to retail, starting with Erewhon chain on West Coast. This summer will bring a RTD meal replacement line, offering full nutritional complement at lower calorie count than brands like Soylent, tho OWYN team hasn’t settled on final recipe and package. It will likely break in natural channel. Also in current mix are powders and nutrition bars tho co doesn’t seem to have been emphasizing them lately.
On distribution front, brand has been willing to rebuff some major mass chains for now as it builds story and velocity, but it’s notched alliance with OTG that’s gotten brand into key impulse channels like airports, including the 3 around NY, where it will be supported by digital billboard buy.
Hamptons Showcase Will Include Brands Like Brew Dr, Flying Embers, Lemon Perfect Here’s an intriguing idea we don’t recall encountering before: Cohen and Olivieri are devising plan to rent expansive East Hampton vacation palace in Jul as showcase for OWYN, other Big Geyser brands and select outside brands that have right vibe and premium pricing. The expansive villa would host range of key retail accounts, bloggers and other influencers for immersive experiences with brands that include Big Geyser housemates like Brew Dr Kombucha and other cutting edge food, bev and alcohol brands that include likes of Beyond Meat, Lemon Perfect, Banza and Flying Embers hard kombucha. Mark indicated he’s talking to range of brands involved in categories like alkaline water, oatmilk, hard seltzer, CBD and mixers. Popup events will be hosted on weekends by influencers to create buzz and draw crowds.
Our feverish race to produce issues from Expo West fresh off red-eye flight prompted a few goofs we need to correct here. A slip of the pen incorrectly listed New Barn ceo as Todd Robb, not Ted Robb, and he tells us co is 4 years old, not 5 years old . . . In Expo West story about new innovation and plans for LA coffee roastery at Verve Coffee Roasters, we misspelled name of Verve Coffee Roaster’s sales chief Jordan Shulman . . . Thermolife owner Ron Kramer tells us that panel of US Patent & Trademark Office rejected all, not most, claims by Bang Energy to reclaim critical patent.
National Beverage said it’s enlisted dietician Joy Bauer to represent its La Croix sparkling essence water brand. The best-selling author will “begin a comprehensive program that features Joy and her recipe creations on social media as well as all other media outlets that promote both health and wellness,” a FIZZ rep said. She’s written 13 books and serves as Woman’s Day mag columnist and chief nutritionist for NYC Ballet . . . “NYC beverage bigwig caught up in college admissions scandal,” headlined NY Post, referring to Gregory Abbott, founder of International Dispensing Corp, who’s alleged with wife to have paid $100K+ to get an on-the-take proctor to doctor their daughter’s test scores via college app consultant William Singer. Scandal has snared celebs like Felicity Huffman.
Austrian cos Red Bull and Rauch Fruit Juices are teaming up with Ball Corp to build 700K-sq-ft production operation in Glendale, Ariz, that will employ over 140 by time it’s fully operational in 2021, apparently as new production site for energy drinks, per local development authorities. It’s situated in 1,300-acre Woolf Logistics Industrial Campus, not far from Ball’s recently opened can-making plant in Goodyear. Details are scarce, but press release posted by development authorities in Europeanese-inflected prose said, “The long-term partners Rauch Fruit Juices, Red Bull and Ball Corporation will jointly realize this can-filling facility in Glendale, Arizona, to continue and strengthen their successful common path.” Phoenix Biz Jnl reminded that identity of partners had remained a secret in long-simmering project until a few days ago. Rauch is century-old, family-owned juice marketer that counts copacking among its activities and has been a sponsor of Red Bull Salzburg soccer team in Austria.
Are your corner c-store, grocery or corporate cafeteria ready for nondairy superfood creamers? That’s presumption commercial bev equipment giant Bunn and Laird Superfood have reached, via alliance that brought to Expo West a machine called Laird Superfood Crescendo that’s dubbed “the first vegan, gluten-free and non-GMO automated hot beverage machine” to come to market. “With the simple press of a button, the Laird Superfood Crescendo will combine hot water or brewed coffee with Laird Superfood creamers to produce a delicious superfood latte, superfood hot cacao or superfood golden milk with turmeric,” declared the partners. In discussion at Laird booth, ceo Paul Hodge said co based in Sisters, Ore, had partnered with Bunn after finding engineering development a tough go on its own, with consistency a key challenge given high-fat nature of Laird items. But Bunn emerged as logical partner, with resulting machine that’s priced similarly to co’s other foodservice offerings, offering foodservice operators a chance to sell for $4 superfood bevs that costs them 50 cents to produce. They’re following usual model of installing machines at contracted customers or selling them off the shelf. Speaking early in show’s run, Paul said upwards of 300 grocers had committed to installing the machines, which are compatible only with Laird Superfood Creamers.
Alkaline88 marketer Alkaline Water Co grossed $11.5 mil on offering of 4.6 mil common shares, including fully exercised overallotment, the Scottsdale, Ariz-based co announced. Canaccord Genuity LLC acted as sole bookrunner for offering and Haywood Securities acted as co-manager, WTER said. The co has attracted investor attention by growing its bottled water biz while also heading into cannabis space.
Cancer specialist Ned Sharpless has been named interim commissioner of Food & Drug Administration in wake of announcement that Scott Gottlieb will be moving on. Dr Sharpless has served as dir of Natl Cancer Institute and worked as researcher and hematologist-oncologist at UNC, where he led Lineberger Comprehensive Cancer Center, CNBC reported. Gottlieb had turned out to be unexpectedly activist commissioner on vaping and cannabis fronts in regulation-averse administration, and expectations seemed to be that Sharpless would be no different, judging by decline in Altria shares following announcement. Health & Human Services Sec’y Alex Azar, who made appointment, said, “There will be no let-up in the agency's focus, from ongoing efforts on drug approvals and combating the opioid crisis to modernizing food safety and addressing the rapid rise in youth use of e-cigarettes," Azar said in a statement.
Mixed Progress on Cannabis in NJ, NY Governors of NJ and NY promised legalized recreational cannabis this yr, but progress slow in both states. (Passage in both states would open recreational sales to an additional 21+ mil 21+ yr-olds.) In NJ, Gov Murphy and Dem leadership announced yesterday “they have reached a deal to legalize recreational marijuana and expunge low-level pot offenses,” Wall St Jnl and others reported. Criminal justice issues have driven decriminalization/legalization in NJ and elsewhere as unfair enforcement of drug laws against minority communities has long been an issue. Reported deal includes state excise tax of $42/ounce of cannabis, (some) tax revs going to cities/towns that host bizzes, new 5-member cannabis regulatory commission and “a process that prevents some marijuana offenses from being considered for certain housing, education and occupational licensing purposes,” per WSJ. (We’re picking up this article from our sibling beer newsletter Insights Express.)
While Gov Phil Murphy sez “he’s all in to get this over the goal line,” ubiquitous cannabis critic Kevin Sabet of Smart Approaches to Marijuana sez Murphy doesn’t have the votes. Senate President Steve Sweeney said legalization “will bring marijuana out of the underground market so that it can be controlled, regulated and taxed, just as alcohol has been since the end of Prohibition.” He may have missed recent article in Cherry Hill NJ Courier-Post quoting NJ dealers expressing confidence that “it’s going to be business as usual” even if Garden State legalizes. Why? The product they sell is not taxed, is of higher quality and greater appeal to their “loyal customers,” they deliver and “because the state has no idea what they’re doing,” as one dealer said.
Meanwhile, in NY, “black lawmakers are blocking a push to legalize recreational marijuana,” NY Times front-paged. Those lawmakers seek assurances that “people of color are guaranteed a share of the potentially $3 billion industry,” via job training programs and access to licenses to grow and/or sell cannabis. NY’s legislators cited “one misstep” in the 10 states that legalized recreational use: none “ensured that minority communities would share in any economic windfall of legalization – missing out on an opportunity to redress years of having a disproportionate number of African-Americans arrested on marijuana charges.” Gov Andrew Cuomo’s office reportedly planned to address these issues via regulation. The lawmakers want them in legislative language before they support any bill.
ShopRite Owner Blames Soda Tax; Mayor Thinks That’s Sodapoppycock A ShopRite store in Philadelphia’s Overbrook nabe is closing its doors today, with owner blaming dropoff in sales caused by passage of Philadelphia Beverage Tax, local CBS affiliate reported. Store owner Jeff Brown cited 23% plunge in sales but Mayor Jim Kenney made it clear he views claim as sodapoppycock, noting that Giant grocery chain is planning several store openings in city.
Celsius Holdings showed further signs of igniting in fourth qtr, reporting 62% boost in revenue to $14.7 mil, bringing full-year gain to +45% to $52.6 mil. The Q4 gains was balanced between a 63% gain domestically, to $10.4 mil in revs, and a 58% gain overseas, to $3.8 mil, as broader category of so-called performance energy drinks gains increasing momentum. CELH and its calorie-burning lines have been riding that wave, adding DSD partners and broadening presence in chains like Target, CVS, 7-Eleven and Dick’s Sporting Goods. Net loss in final period narrowed to $850K from $5.2 mil a year earlier. Tho overseas presence to date has been dominated by Europe, co is placing big bet on China via licensing deal with Qifeng Food Technology, investing $7.2 mil in 2018 to build foundation. That contributed to widening of net loss to $11.2 mil vs 8.2 mil in prior year. In 2018, European revs actually declined 17% to $9.2 mil while Asian revs grew from negligible base to $4.3 mil. As reported, CELH recently revamped alliance with Qifeng to licensing model to reduce expenditures needed to build out promising market as it seeks to curtail financial losses.
In development that skeptics took as further evidence that cannabis segment is in highly frothy phase, shares of Aurora Cannabis went on 12% tear after co announced that activist investor Nelson Peltz is coming aboard as a strategic advisor. ACB ceo Terry Booth cited Peltz’s expertise “across many industry verticals that are of great interest to us," presumably including food and bev, and Peltz said he’ll work to build on ACB’s integrated model and foster “potential engagement with mature players in consumer and other market segments.” Unusually, Nelson’s presence doesn’t seem to be tied to an investment by his hedge fund, Trian Partners; instead, he’ll be compensated via grant of options that vest on quarterly basis over 4-year period. Given Peltz’s past activities with likes of Snapple, Wendy’s, Mondelez and Heinz, the announcement produced euphoric reaction among investors, tho Real Money’s Jim Cramer thinks co may still be undervalued vs rivals like Canopy and Cronos. “Nelson is the expert in consumer products . . . This is the endorsement Aurora needs to put it in the big time,” was his assessment.
Still, skeptics on forums like Motley Fool questioned why Aurora mgmt would have any real reason to listen to advisor with no clout as actual investor. “If Trian Fund doesn’t own a piece of the company, Aurora’s managers don’t have to take the advice they’re paying Peltz to provide,” argued one commenter. “Despite the slim odds that this partnership will produce more than a press release, Aurora Cannabis’ market cap rose by roughly $1 billion on the day of the announcement.” By contrast, valuations at some rivals have been driven up by concrete investments, sometimes in the billions, by major partners like Constellation, Altria and MolsonCoors who bring massive clout in areas ranging from buying to distribution. Most of those alliances are scrambling to ready suites of consumer products in time for the Oct legalization throughout Canada of recreational marijuana edibles and bevs, with view of being ready to spring in US and other markets when time is right on regulation front.
In bev circles, Peltz’s arrival at Aurora prompted gossip as to whether he would try to bring back members of the old band that resurrected Snapple brand after its disastrous acquisition by Quaker Oats. But the exec who masterminded the turnaround for Peltz, Mike Weinstein of Inov8 Beverages consultancy, wasn’t saying whether he’d received any overtures from Peltz tho he did remind us he’s rare bev exec who attended the first Woodstock fest in 1969. (Woodstock happens to be brand name of one of the weed varietals that Aurora markets, so Mike’s hippie fling would stand him in good stead at Aurora.)
Edmonton, Alberta-based ACB has been rapidly building out infrastructure, with 8 growing operations and 3 under construction, with aim of getting rapidly to 500K kg of annual capacity. Nine of them are in Canada and 2 in Denmark. So far it’s selling its hemp under brand names like Aurora, Altavie, San Rafael ’71, Woodstock and the medical marijuana brand Whistler, but it’s been clear it aims to diversify rapidly via M&A and partnerships as well as via internal innovation. Among its partners are alcohol and cannabis retailer Alcanna, Evio Beauty Group and Hempco Food & Fiber, none of them involved in bevs. It also has developed biz selling its specialized growing expertise and providing encapsulation and other services. Peltz’s role will be to get it started in penetrating broader categories like edibles and bevs.
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