Beer Marketer's Insights
For marketers of NA bevs, need to soak up precious real estate on primary and secondary packaging with nutrition or supplement label is mandatory annoyance. But Anheuser-Busch InBev is heading voluntarily in that direction – at least on secondary packaging – with Bud Light. Why? Marketing vp Andy Goeler offered this rationale: “While ingredient labels are not required, consumers deserve to know more about their beer. We brew Bud Light with the finest ingredients and we’re happy to proudly display them on our packaging. When people walk through a store, they are used to seeing ingredient labels on products in every aisle, except for the beer, wine and spirits aisle. As the lead brand in the category, we believe increasing on-pack transparency will benefit the entire beer category and provide our consumers with the information they expect to see.” ABI is heralding move via pair of medieval-themed ads, including one where archers are seen shooting the labels from the battlements into the kingdom because they hadn’t thought to put them on the actual package.
Tho energy and coffee have been thriving sectors, the years have brought repeated efforts by entrepreneurs to offer new formats that are even more convenient. Back in 2011, hoops superstar Lebron James teamed with entrepreneurs like Jesse Itzler to offer dissolvable strips with 50 mg of caffeine called Sheets that soon enough went by wayside, a possible victim of overly rapid expansion. A few years later came another bev-alternative energy play, EliteOps Energy Strips, which offers heftier hit of 100 mg of caffeine via sublingual strip (BBI, Nov 18 15). How’s that one fared? “It’s been slow but it has been deliberately slow,” said ceo Ray Welch, who recently updated us by email. “We are privately held, and all of the founders are still patiently optimistic. Having that core group together from day one has allowed us to pivot from a focus on securing big box retailers to focusing on consumer education and direct sales” once it became clear team had underestimated amount of education required. “I think we were all a little surprised by the amount of times we had to explain our product was an edible film and not a dermal ‘patch’ you wore,” Ray told us.
By now, co has produced its 1 millionth strip, growing steadily at double-digits thanks to building solid base of biz at e-retail operations of Walmart, Amazon and eBay (via 3d-party resellers). Labeled as supplement, brand contains caffeine derived from seeds and leaves of coffee plants as well as vitamins B6, B12 and E. Key tweaks have included launching subscription service and 15-strip pocket packs for heavier users. Brand is marketing to broad array of consumers, from fishing pro and Ironman winner featured on website to tired moms, teachers and nurses. “Fits in wallet or purse. No spills. No restroom breaks needed,” as one slogan puts it. It’s got its share of bricks-&-mortar accounts, including Walmart and sports retailers.
What’s next on horizon? More education, of course. “Once someone understands they can get their caffeine and vitamins via an edible film that dissolves in their mouth without the need to drink any liquid and they understand how easy it is to carry that supply around with them, all the time, we usually have a convert and a customer for life,” Ray said. “Our ability to deliver those active ingredients without having to ingest anything, makes us unique in today’s marketplace.” But co also is developing more flavors, and may venture into other functional realms beyond energy. “Our delivery system can be used effectively for many different kinds of active ingredients and our R&D team is busy formulating some unique products for us to launch,” he said. Info at EliteOpsEnergy.com.
Last month’s abrupt shutdown of Alpha Dominche, which came to exemplify “coffee tech” trend with its megapriced, cloud-connected Steampunk coffee/tea brewer, is being read as cautionary tale of what amounted to irrational exuberance in margin-challenged biz like indie cafes. As Spoon reported, co on Dec 4 notified customers it was halting operations immediately because it was “unable to secure the resources necessary to continue.” (Also left high and dry were those who’d contributed $230K+ to crowdfund a manual coffee maker called the Flask Coffee Brewer that won’t see light of day. “No refunds or late arrivals,” Spoon wrote.) Deep dive by Spoon offers bleak picture of installed base of thousands of the eye-catching $15K Steampunk units, which boasted “stunning cylinder design, vacuum-sealed brewing process and tablet-driven controls,” that were all about to stop working once the servers went down. “We’ve seen coffee technology projects fail in the past, but not with a company as beloved and well-funded as this,” the site writes. “What does it mean for coffee tech? Have we discovered the boundaries of financial viability, the limit to what the industry can afford? Will cafe owners ever learn to love tech again?”
A coupla years ago we’d highlighted buzz-generating opening of Alpha Dominche’s so-called “extraction lab” in NY’s Industry City makers complex in Sunset Park, which also hosts such bev-related ops as Ito En’s lab and gift-box assembly operation (Feb 6 2017). Opening caused a stir in coffee circles for pushing envelope on both price and technology, with vision of precision brewing of specific teas and coffees at push of a button. Still, Spoon article quotes Sudden Coffee exec saying Steampunk was never practical to begin with, unless you designed your entire café around it. Even operation where unit seemed to pencil out, Oak Cliff Coffee in Dallas, had to sunset machine because of continuing maintenance issues. Still, execs at rival BKON, with $10K machines that employ different approach, say that far from seeing stampede out of coffee tech, they’re being approached now by some former Steampunk clients. Spoon’s conclusion: “The specialty coffee market as a whole isn’t finished with high-end coffee tech yet.” Article can be read here.
Target has created new post of prexy of food & bevs, with longtime exec Stephanie Lundquist named to role. Lundquist grew up on family farm in Minn and has spent her entire career in retail, mainly at Target, working her way up from managing stores at Marshall Fields to running Target HR. She’ll continue to report to chmn/ceo Brian Cornell. Jefferies analyst Christopher Mandeville said appointment addresses a “department pain point,” in research note reported by Supermarket News. “While it’s unclear as to whether Ms. Lundquist holds any direct food/beverage experience, we look favorably upon the move, as it will provide incremental focus on this category.” (Her LinkedIn profile detailing stops at Kohl’s, Marshall Fields and then Target suggests she doesn’t bring any direct food/bev experience.) Asked about her plans in q&a posted on corporate website, Stephanie didn’t offer much detail, speaking of assembling new team from key players across the org, leveraging range of fulfillment operations and new-brand development . . . PepsiCo now has definitively moved on from the Indra Nooyi era, naming its recently anointed ceo Ramon Laguarta chmn as well, effective Feb 1. Laguarta, a 22-year PEP vet who hasn’t had a high profile in N Amer, had assumed ceo job on Oct 3 following Indra’s announcement in Aug that she’d be moving on. Nooyi, who’s 63, hasn’t yet disclosed any post-retirement plans she may be hatching.
Can Anyone Get Yaupon Tea Moving as Plant-Based Energy Option? Texana Is Among Latest to Try
As only caffeinated plant that’s domestically grown, yaupon would seem to hold lotsa potential for those seeking to offer plant-based energy play akin to yerba mate but without the extended supply chain to tropical rainforest. But while ranks of loose-yaupon marketers has been growing around nation’s Sun Belt, none with bottled offerings has made much of a dent so far: an intriguing Savannah, Ga, entry we’ve profiled called Asi Yaupon Tea seems stuck in first, while Houston-based entry called Wild South Tea threw in towel last fall after 3 years. Now another entry has been building some momentum around Lone Star State under Texana brand name, from entrepreneur named Rachael Serena Young, an ethnobotanist by training who’s had diverse career in hair styling, edible insects and teaching foraging to chefs. Lately, she’s moved her Texas-honey-sweetened, glass-bottle line out to all state’s Central Market stores while preparing branding tweaks, seeking copacker and moving closer to first outside financing round from unidentified individual investor out of conscientious food sector. In Oct, Rachael also hosted first meeting in Austin of trade group called American Yaupon Assn that’s aiming to get ingredient GRAS-certified by feds and get various players on same page as to standards and practices.
Her effort comes as ranks of loose-yaupon marketers have been expanding, with early entrants Cat Spring, Yaupon Bros and Asi joined by more recent ones like Lost Pines and Wimberley Tea in Austin area. Purchasing her core ingredient from growers like Cat Spring, Young has gone out with 12-oz glass-bottle entry that sports clean but colorful icon of interlocking disks on label, in flavors like Marfa Lite (unsweetened roasted yaupon), Bee Caves Brew (with touch of Texas honey to riff off Texas sweet tea tradition), Illumination (infused with rose petals and lightly sweetened with Texas honey, at 30 calories per bottle) and Self Care Ritual (mint, oatstraw and hawthorn berries). “Harmonious botanical energy,” assures label copy. It goes out at $2.99 at retailers like Central Market and Royal Blue Grocers. Readily acknowledging she brought no relevant bev experience to project, Rachael has been turning for advice to seasoned vets like Live Kombucha Soda founder Trevor Ross and enlisted local branding team to rethink label. Info at Texana.
As for American Yaupon Assn, that aims to support growers, processors, packers and distributors of ingredient, a relative of holly, via research, funding and outreach, per its mission statement at YauponGrowers.com. Ingredient is being positioned as “the American native superfood.” Proponents hope to get it approved as GRAS and perhaps even find way to get Latin name changed from offputting “ilex vomitoria” (which some advocates theorize was invoked by tea traders anxious to neutralize potential local rival).
The winter edition of Specialty Food Assn’s Fancy Food Show opens Sun in SF’s Moscone Convention Center for 3-day run highlighting 90K items from 1,400 exhibitors, including scores of bevcos. Among those being awarded annual Leadership Awards will be Lisa Curtis of moringa player Kuli Kuli in Oakland, Calif. Info at SpecialtyFood.com . . . Coming down the pike is nightmarishly rich Natural Products Expo West in Anaheim, Calif, running from Mar 6-9 at expanded Anaheim Convention Center, nearby arena, Hilton Hotel and, for all we know, homeless tent encampment.
KonaRed Brings in $3.5 Mil
KonaRed said it closed another financing round, a debt/capital mix totaling $3.5 mil led by Venice Brands and also including Spiral Sun Ventures and Decathlon Capital along with friends and family. Fundraise capped a year in which Carlsbad, Calif-based co installed its own coffee roasting capacity, launched single-serve pods and seeded its RTD cold-brew in new retailers like Sprouts, Publix, Walgreens, Meijer and Giant Food, per ceo Kyle Redfield.
Body Armor has recruited another red system vet in early days of its navigating Coca-Cola bottling system, saying former Swire Coca-Cola exec Paul Lukanowski will come aboard as coo on Mar 4. He joins team a few weeks after Whitestone, NY-based Body Armor said it recruited former Coke and Coca-Cola Refreshments exec Brent Hastie as prexy, also effective in early Mar (BBI, Dec 12). Lukanowski will oversee bottler relations, natl accts, commercial ops and int’l expansion, reporting to Hastie. Lukanowski enjoyed 20+ years at Swire, capped by rise to coo role.
Boosting Coffee-Geek Cred, Califia Enters Oat Game with Barista Blend, Unsweetened Oatmilk
Califia Farms, so far heavily identified with almondmilk, is dialing up its oat presence with Oat Barista Blend in Feb and Unsweetened Oatmilk in Apr. With Sweden’s Oatly oatmilk brand having taken café channel by storm for dairy alternative that’s proved uniquely frothable for baristas, Califia Farms is fortifying its Original and Unsweetened Almondmilk Barista Blends with oat-based offering made with whole grain, gluten-free oats and containing no gums or stabilizers. It will be launching at upcoming Fancy Food Show in SF this Sun, at time that Oatly’s own Barista Edition is listed as being unavailable online, with restocking not due until Mar 6, as co scrambles to bring online new capacity to keep up with exploding demand ahead of onrush of new entries (BBI, Sep 17). For Califia Farms, which started in almondmilk segment and migrated to coconut- and cashew-based entries, this fills clear gap in its presence at indie cafes. “We’ve been a dependable partner to the specialty coffee trade for some time now, and offering a new Oatmilk Barista Blend was a clear next step to help cafés reliably meet their customers’ demand and quality expectations,” said founder/ceo Greg Steltenpohl. He cited data indicating that oatmilk sales at retail surged 168% over past year, with sales in coffee shops igniting by 425% since June 2017. As reported, Califia Farms itself has ambitions of becoming significant player across range of coffee categories, starting with its RTD cold-brews and extending now to big roastery that’s about to go live in downtown LA (BBI, Dec 18). Recent scanner data cited by Wells Fargo’s Bonnie Herzog listed Califia’s RTD coffee sales rising 25% over past 52 weeks, claiming 1.2% $$ share of liquid coffee segment, enough to place it 3d behind still-dominant Starbucks platform and Dunkin’ Donuts RTD entries claiming 5.3% share.
As for the Unsweetened Oatmilk, that will debut in Mar at Expo West, offered in co’s distinctive 48-oz plastic carafe and made from North American whole grain and gluten-free oats, and eschewing gums and stabilizers.
Using feedback from canned Gloe Sparkling line it launched last year, Gloe Brands is undertaking a further migration of the Coca-Cola-aligned brand that will see it bring some of the adaptogenic ingredients of sparkling line to bottled Gloe Water core line, with first sight of new look possible by Expo West in Mar. Meanwhile, LA-based co continues to quietly build Asian-sourced fighter brand called Aloe Rey formulated in style with heavier sweetness and aloe chunks that has dominated ethnic markets and now represents 25% of co’s revenues. All this on heels of roughly $5 mil capital raise by Gloe Brands that saw prior investors Coca-Cola and AccelFoods both invest beyond their pro rata share, which ceo Dino Sarti took as reassuring sign of brand’s continued progress. KO led round, which also included Everplus Capital of Newport Beach, Calif, Synovus Family Asset Management of Columbus, Ga, and other unidentified investors who should be able to support brand’s future growth needs. “We’re in a place now where we may not have to go to the street again,” Sarti observed. Green Circle Capital Partners managed raise for Gloe Brands, which was spun off a couple years ago from Coca-Cola-aligned incubator LA Libations in interest of greater focus.
Recall that Gloe Sparkling, in 12-oz cans, represented departure from bottled line in including only a single aloe-based sku, Aloe Vera with Fuji Apple & Pear, joined by Turmeric with Blood Orange and Ginger with Lemon flavors. Tho it’s still early days, that line has clicked well enough with retailers and consumers to encourage migration of elements like turmeric and ginger to core 15.2-oz Aloe Gloe bottled line, currently comprised entirely of aloe-based entries in Crisp, Grape, Coconut and Lemon flavors. The strong feedback to sparkling line “gave me the confidence to continue to evolve the platform,” Dino explained in conversation today. “It always was our view to be an organic, botanically infused line.”
The revamp also calls for core line to drop stevia as sweetener in favor of just fruit juice, eliminating palate-challenging ingredient that some consumers still assume must be artificial and allowing ingredient panel to declare zero added sugars. Along way, Aloe Brands hopes to eliminate a few more calories from current 30 per bottle. While Crisp and Coconut will remain aloe-based, Lemon will migrate to lemon/ginger and Grape will migrate to turmeric/citrus. Among other changes being planned, the co will swap its 1-liter Tetra Pak cartons for same-size plastic bottles with same silhouette as 15.2-oz single-serve entries to better harmonize brand identity across formats. Sarti hopes to have mockups of new entries ready by Expo, with product ready to run at commercial scale in 3-4 months.
Things are more status quo on distribution side, with Aloe Brands standing pat on current use of Coke bottlers in Calif and in NY/Philadelphia, while relying on broadliners and direct-ship to service middle part of country, even at cost of having had to abandon some DSD-oriented retail partners like Walmart (BBI, May 4, 2018). In those current bottler markets, “our penetration has been growing and healthy, but it’s still not where we want to be” vs Coke stablemates like Honest Tea and Zico, Sarti said. To get there, Aloe Brands will continue to drill down in those markets, where Sarti rated partners Reyes and Liberty as strong partners, before adding new bottlers. Brand has edged back into Walmart stores, but only where it has DSD presence.
Meanwhile, for more authentic aloe experience than the enhanced-water approach of Aloe Gloe and other general-market plays, Aloe Brands has been bringing in South Korean-sourced entry called Aloe Rey that by now has cracked 7-Eleven chain via McLane distributor, goes direct to Walmart and in Mar will enter 14K Dollar General stores. Tho that line has been a “nights and weekends” sideline for Aloe Brands and LA Libations principals rather than absorbing any meaningful mgmt time, Dino said items allow Aloe Brands to supply both ends of market while building ties to key retailers like Walmart. As noted, it’s now one-fourth of revenues.