Beer Marketer's Insights

Beer Marketer's Insights

BFit Brands, which so far has confined its FitWhey energy/protein hybrid bev mainly to home Ariz market, has enlisted broadline distributor KeHe to help with expansion across US. To date, FitWhey has been available nationally only thru Amazon.com; in Ariz, it's on shelf and turning briskly at 105 QuickTrip c-stores, founder Erik Rothchild says . . . Bonta, bev line based on Mediterranean diet, has entered Amazon platform in 12-unit cases of 16-oz bottles.

Kefir marketer Lifeway Foods' sales in Q3 declined 4% to $28.79 mil, with sagging demand for branded drinkable kefir products partly offset by new cupped kefir line, private-label kefir bevs and cuts to trade promos. Operating income came in at slim $514K, vs $189K a year earlier. Julie Smolyansky, ceo, said changes to sales org and innovation stream should get things back on growth track . . . Pulse Beverage, marketer of Cabana-branded coconut waters and lemonades, said sales contracted to $468K from $710K and operating loss widened to $922K from $683K as Denver-based co's restructuring proceeds and it moves to model of direct shipments to key retailers.

Refresco Group said its acquisition of Cott Corp's contract mfg operations is on track for Q4 closing, deal that will increase its size by 70% and make it world's largest independent bottler of outside brands. But Refresco itself won't be publicly reporting company for much longer, having agreed last month to enhanced buyout offer by private-equity consortium. Rotterdam-based Refresco, which had only publicly listed in 2015, agreed on Oct 25 to higher offer of 1.6 bil euros from consortium of PAI Partners and British Columbia Investment Management Corp (bcIMC) that would return co to private status, move anticipated in Q1. Speaking to investors this week, Refresco ceo Hans Roelofs said would-be acquirers agree with Refresco's "buy-and-build" strategy, which has seen co earlier acquire another familiar name in US contract mfg, Whitlock Packaging, and will shortly add Cott's private-label and contract mfg operations. "Obtaining a public listing in 2015 was a well-considered decision and it has brought the company many opportunities," he said earlier. "However, we have also grown and prospered under private equity ownership. Our ownership structure is never a goal in itself. Rather, our focus remains on being in an environment that allows us to continue executing our proven strategy of buy-and-build."

As we check back on some of past year's news threads, BBI is regretfully reporting on another pair of brands that have pulled back. (Earlier this week we reported on unfortunate exit of It Tastes Raaw.) ChiaVie, chia-based line that in hands of its investor LA Libations had undertaken recipe and branding refresh that took it from smoothie to refresher (BBI, Sep 11 2012 and Mar 11 2013), suspended production earlier this year when new funding proved hard to obtain, in chia category that's cooled a bit from days when it was ingredient du jour . . . Also exiting this year was Suavva brand, whose point of difference had been its use of often-discarded but nutrition-rich parts of cacao plant (BBI, May 8 2012). Exec who'd worked on Suavva, Joe Montgomery, confirmed exit, but said he's segued to different co that's pushing cacao as ingredient for other companies to use, under name The Cacao Fruit Co. As at Suavva, Cacao Fruit employs every part of fruit, including pulp and peel, with applications in RTD bevs, teas, flour and other sectors. Info at CacaoFruitCo.com.

Launching new DSD house can be brutal undertaking, particularly in sprawling, expensive area like Southern California. In recent weeks it seems that Statewide Beverage, one of more ambitious such undertakings at its launch in 2011, has cut back sharply, by account of some current and former suppliers. But ceo Jeff Javizdad insists co's overall health is fine as, after period of finding its way, DSD house it cuts weaker performers on staff and aims to make bigger drops to current base of accounts rather than blindly recruiting new ones. "We're not downsizing, we're improving," Jeff told BBI last Fri evening. He says he's in hunt for experienced sales staffers and also smaller DSD houses to acquire. Tho some clients have moved on, others continue to come in: Statewide picked up fast-growing naturally alkaline brand Eternal Water a few weeks back, even as word of cutbacks was rippling out.

New Age Beverages scored 12% gain in net revenues in Q3 to $15.1 mil, and gross margin jumped to 31.9% from 26.7% as increasingly diversified bev marketer rode stable of brands that includes XingTea, Marley, CocoLibre and Bucha Live Kombucha. Adjusted EBITDA went negative to -$131K as co dialed up sales & marketing expenses by $1.7 mil in period. Results were "where I expected us to be at this point in our journey," said ceo Brent Willis, who marveled at progress of co that, at time of his arrival on scene 18 mos ago, was tiny kombucha-only player doing just $2 mil in annual sales and racking up $2 mil in losses. Having accumulated broad portfolio of existing and new brands - the newcomers include now-launching Marley Yerba Mate and PediaAde - Willis said the focus was on broadening distribution base and juicing retail velocity. Some 30K new retail doors have been added over past 90 days, as co moves from primarily western retail base to national availability, thanks to expanded sales force and alliances with partners like Advantage Sales & Marketing, Unified Strategies Group and Dot Foods. Strong Oct performance augurs well for Q4, too, Willis said. That said, he acknowledged sales lagged expectations a bit, an outcome in part of co dropping unprofitable customers of recently acquired Marley brand, now settling in as $6-8 mil brand rather than earlier anticipated $8-10 mil. But Marley sales should accelerate as retailers and consumers warm to newly launching shelf-stable Marley Mate line that Brett claimed to be turning 20 units per store per week in best c-store account and outperforming major competitor (read that as Guayaki) by more than 60%.

Ambition to devise self-heating and self-chilling bev packs has had colorful - some would say notorious - history characterized by cans that exploded on retail shelves and entrepreneurs of somewhat dubious backgrounds. But the technology is ever evolving and new company called HeatGenie has now entered the fray, backed by former Whole Foods ceo Walter Robb and employing less-clunky, more reliable approach than some past entrants, with promise of heating can contents in under 2 minutes with just twist of the lid. Co prexy/ceo Mark Turner told BBI yesterday the co is finalizing Series C round that should see it graduate from angel investors to institutional sources of capital.

Score one for small hydration player that's been content to ply endemic channels for most of its history. Nuun & Co, 13-year-old marketer of low-sugar electrolyte tablet that's become a fixture at bike shops and outdoor gear emporia, has won minority investment from private-equity giant TSG Consumer Partners, which claims $5 bil of assets under mgmt and whose prior investments have included marketers of Vitaminwater, Muscle Milk, Stumptown Coffee and Pabst Blue Ribbon beer. Investment of undisclosed magnitude in Seattle-based Nuun seems to clear way for push into broader availability for line that recently adopted even cleaner formula and more vibrant trade dress and by now is playing not just in exercise-oriented Nuun Electrolyte tablets but also Nuun Vitamins that target even cubicle dwellers at the office as general wellness offering. (Third platform, Nuun Performance, targets marathoners, triathletes and the like.) TSG managing ptnr Michael Layman said PE house aims to help Nuun "educate the public on healthy hydration and wellness, grow into additional customer segments and expand its innovative electrolyte, vitamin and performance offerings beyond Nuun's competitive athlete core customer." Nuun was advised in transaction by Imperial Capital LLC.

INSIGHTS misquoted Constellation ceo Bill Newlands on two aspects of Constellation's results shared during his CAGNY presentation and Q&A yesterday. Depletions accelerated to over 6% growth in December and January, not Jan and part of Feb. And Constellation operating margin (not gross margin) remained at hi end of medium-term range since Fiscal 19. Gross margin in F24 is expected to be in line with F23. We regret the errors and apologize for any confusion.

This wk, federal court in CA granted preliminary approval to settlement agreement covering 3 separate class action suits filed against Molson Coors over its labeling and marketing of Vizzy hard seltzers. Starting in late 2021, consumers filed fed suits in CA, IL and NY all making similar claims that Vizzy's prominent display of "antioxidant vitamin C from acerola cherry superfruit" misled them into paying more than they otherwise would have. Judge in CA denied attempt to dismiss suit in Jan 2022, tho other suits never got that far as settlement discussions progressed. MC admits no wrongdoing, but agreed to establish a $9.5-mil fund to settle the suits.