Beer Marketer's Insights
Looks like coffee - particularly cold-brew - is infiltrating its way into ever-broader range of alcohol-inflected drinking occasions, just judging by entries that have crossed our desk and table in past few days. At NY Coffee Fest (story above), we encountered Mr Black Cold Brew Coffee Liqueur, Sydney-based brand made 300 bottles at a time from Arabica coffee and straight un-aged wheat spirit. It launched in Australia in 2012 and just hit US shores, staffer said. "With half the sugar and 10 times the coffee of 'old-world' liqueurs, Mr Black is a cold brew liquor for coffee purists," co argues, pushing recipes like Cold Fashioned with rye whiskey and orange bitters.
Hellowater Teams with InterContinental Beverage Capital to Build Out Fiber-Reinforced Brand
Hellowater, fiber-rich bottled water launched earlier this year by Rainforest and Perk Coffee vet Tom Bushkie (BBI, Feb 23), has teamed up with InterContinental Beverage Capital for advisory services as co seeks to scale up, even as it signs its first DSD distribution partners. Hellowater, recall, was launched as whimsically branded fiber-fortified essence water that might carve out more fun identity than old-line brands like Metamucil, tho it has since pivoted slightly to dropping "natural essence water" as designator in order to zero in more closely on fiber identity. Tho IBC had moved away from investing in sub-$1 mil (sales) companies, it was impressed by bev biz experience accumulated by Bushkie and his cofounder Rusty Jones, at time that fiber-enriched bevs seem to be untapped opportunity, said Doug Christoff, MillerCoors and Coke vet now with IBC. So far, Hellowater has kept its footprint tight, moving via broadliner KeHe into indie stores in Midwest metros like Chicago, Milwaukee and St Louis, Tom said today. But it just signed its first DSD partners: Lakeshore in Chicago, and Balkan Bev in Buffalo, NY, both beer houses with deep experience in NAs. Co will be presenting to Midwest Beverage Group tomorrow in hopes of further building out DSD presence in heartland region. Hellowater is not currently in capital hunt, tho IBC offers that as core competency too. Info at DrinkHello.com.
Total bev sales rose "just about 2%," reported Bonnie Herzog of Wells Fargo Securities, based on survey of 15K+ c-store retailers across US. Respondents identified their key sales drivers as bottled waters, craft and imported beers and RTD coffees. Non-alcoholic bev sales were up estimated 1.3% in Q3 based on survey. That's down from gains of 2.4% in Q2, 3.8% in Q1 and down substantially from 3.9% increase in Q3 2016. Coca-Cola sales eked out very slight gain of 0.1% in qtr based on surveys. Retailers noted KO faced "increased competition from (Pepsi's) Life WTR" and had "fewer promos in single-serve," while "ongoing performance issues" remain in refranchised areas, wrote Bonnie. KO's Dunkin Donuts RTD coffee was cited as bright spot "when in stock," issue she'd previously flagged. Tho KO was flat in qtr, c-store operators have favorable outlook ahead based on innovation, particularly for Coke Zero Sugar slim cans and flavored Diet Coke slim cans, noted Bonnie. PepsiCo sales were down estimated 4.2%, but DPS outperformed, with estimated 1.9% gain. "Solid Q3" for DPS was "driven by allied brands," including Bai, Core Water and Body Armor. Over 50% of retailers rated Bai performance as "strong" and "expect to give the brand about 40% incremental cooler shelf" for remainder of year. Dr Pepper CSD brand apparently was on uptick in c-stores as well.
Cold-brew, cascara and citrus flavors were among trends visible at bustling NY Coffee Festival over weekend, showcasing wild degree of innovation over 3 floors of city's Metropolitan Pavilion. Many of entries are small and local, but they signal multitude of directions coffee culture has been taking, often via new or pending RTD formats. These are beyond range of ideas we showcased from iced coffee competition in NY just this summer (BBI, Aug 4). We don't know where it's all goin', but degree of invention seems unprecedented to our experience, echoing what we've seen in recent years over on craft beer and distilling sides. Certainly, with tickets not cheap, bustle at Met Pavilion attested to ample consumer interest, at least in high-energy foodie hub like NY.
Heading into 2 trending bev segments, growers co-op Ocean Spray has launched organic and no-sugar-added juice lines. It's pitching 3-flavor Ocean Spray Organic 100% Juice Blends as "perfect combination of organically grown North American cranberries from family farms, with other organic fruit juices," with no added sugar and each 8-oz serving equivalent to a cup of fruit. It's breaking in 3 flavors: Cranberry, Cranberry Apple and Cranberry Blueberry. They're priced at $3.99 per 1-liter bottle. Also new is Pure Cranberry (Unsweetened) 100% Juice, with each 1-liter bottle claimed to offer health benefits from juice of 900+ cranberries. That's priced at $5.98 . . . Unilever is introducing organic black tea to its lineup of broadly popular Lipton bagged teas. Lipton Organic Black Tea claims naturally smooth taste via leaves sourced from Kenyan Highlands region. Hitting retail stores now, line is priced at $4 per 72-count box. It's certified by Rainforest Alliance.
Irish dairy player Kerry Group, which in recent years has kicked tires of Muscle Milk and other potential US investments, has acquired Cleveland-based probiotics innovator Ganeden Group. Speaking at Capital Markets Day on Wed, Kerry execs described Ganeden acquisition as complement to their acquisition in 2015 of Wellmune. It joins array of consumer brands that includes Cheesestrings and Dairygold. Ganeden, which controls 135+ patents and generates $25 mil in annual sales, has made lotta noise in probiotics realm with its BC30 and other products, whose ease of application have won them spots in scores of new products. Listing distributed by Ganeden ahead of Natural Products Expo East indicated its items were included in products on display from 26 exhibitors, including Daily Greens, Farmhouse Culture, Forager Project, Harmless Harvest, KeVita and TruVibe Organics (at show, BBI stumbled across it in items from additional cos like Starbucks' Evolution Fresh).
Leading dealmaker among soft-drink bottlers, Marion Glover, believes that right now "crosscurrents are the greatest I've ever seen of beer and soft drinks going together . . . There is a lot of interest. I think you'll see more and more of it." Speaking at seminar on "adding value" via companion brands, during Natl Beer Wholesalers' Assn conference in Las Vegas this past week, Marion listed several significant beer distribs that already are also soft drink bottlers, including Admiral Bevs, Odom, Columbia, CC Clark and of course, Reyes Bev Group. Reyes at $24 bil in sales among all its bizzes, according to Marion, about half the size of Coca Cola. Riding Coke's refranchising initiative, Reyes has hurtled into top ranks of Coke bottlers starting with territory in Midwest and most recently adding most of Calif territory.
New Age Beverages, which has been accumulating brands in all key growth segments of NA bevs and then unleashing their innovative spirit, will use next week's NACS c-store show in Chicago to highlight range of shelf-stable items like yerba mate, probiotic water, sparkling coconut water and shelf-stable kombucha that it's pushing out into its DSD network. Not ready for viewing, but also in works, is shelf-stable Marley-branded cold-brewed coffee that will replace sluggish Marley One Drop iced coffee entry that recently acquired co had been working over past decade.
Electrolyte-rich bottled water brand Sportwater has undertaken sweeping rebranding that, perhaps most notably, will see it adopt proprietary plastic bottle that conjures up silhouette of popular S'well stainless steel bottles that have become stylish accessory to active young consumers. New look, which will be on view next week at NACS c-store expo in Chicago, also drops "ionic" from original brand name Ionic Sportwater, adds descriptor "Performance H2O" and adopts icon of plus sign within blue water droplet to flag brand's water's optimal pH, setting stage for big distribution-building push. The changes, anticipated in market by early Q1, were outlined to BBI yesterday by new-age vet Bob Miller, in as prexy in Jul, along with svp Marty Jay Zirofsky and marketing vp Chris Mendola, sports marketing vet who's worked on agency side on campaigns for shoemakers Adidas, Nike, Asics and Reebok. Team will take Sportwater price up slightly to accommodate proprietary pack, tho it will still be priced lower than superpremium brands like Esssentia.
Lots going on at NY-based marketer of Forto coffee shots and Stur water enhancers as its entire team of 20 heads to Chicago to work NACS c-store show: it's launching co-branded Forto coffee shot with chocolate giant Hershey's, on heels of quietly pulling in minority investment from coffee giant JAB and 2 of its operating units, Peet's Coffee and Keurig Green Mountain. Co has also brought aboard Vita Coco vet Brian Coleman to run field marketing and is interviewing candidates for national sales chief. And it's signed up DSD shop Dora's Naturals in its home market. Forto, recall, is 5-Hour Energy alternative that's organic, Fair Trade-certified and packed in ingenious 2-oz pack shaped like takeout coffee cup, offering comparably priced way to get convenient energy lift without taste or ingredient compromises. Elegance of concept seems to have attracted considerable notice among coffee players, as well as several smaller rivals.

