Beer Marketer's Insights

Beer Marketer's Insights

War of data in Philadelphia goes on, with soda tax proponents now pointing to robust wages among food/bev workers to argue that 1.5-cent-per-oz tax shows no signs of decimating biz in city, per story on Philly.com site operated by Philadelphia Inquirer paper. Wage-tax collections reported by Dept of Revenue rose 14% to $23.4 mil in first qtr, with payroll rising in 11 of 15 food/bev-related employment categories including concessionaires, bars & taverns, full-service restaurants, takeout restaurants, specialty grocers, wholesale grocers, even soda/ice mfrs, Philly.com noted. That prompted gibe from city commerce director, Harold Epps, that "the beverage industry's rhetoric over job loss simply does not match reality." The rising wage-tax collection "shows that the industries who rely heavily on beverage sales have not had to cut jobs or hours anywhere near the rates they've claimed." Responded spokesman for group called Ax the Philly Bev Tax: "No amount of rhetoric from the administration can obscure the fact that Philadelphia's beverage tax has cost hundreds of union employees their jobs, from teamsters to supermarket employees." He noted that some of layoffs may not have hit by Q1 and fact that severance payments temporarily swell tax revenues. Story can be read here:

Inaugural year of Sparkling Ice's "Be Not Bland" campaign is working out well, prompting flurry of in-store retail activity and suggesting new avenues to take effort next year, Talking Rain brass said today. Effort keyed by oddball TV spots have "reinvigorated store excitement" for brand, attested Nina Morrison, vp for pr and community relations, prompting 200-300 case displays for Sparkling Ice in front of store on turf usually staked out by big bev and snack players. It's also prompted re-engagement with brand among DSD distributors, who'd enjoyed Ice's rocket ride over past few years abut had seen it plateau in some channels in some regions, situation the $37 mil "Be Not Bland" campaign is intended to reverse. In NY market, for example, DSD partner Big Geyser helped create Easter-themed display piece depicting jazzed up bunny wearing pinky ring as anchor for Ice displays in close to 150 retail accounts. For back-to-school period, vehicle will be school bus double display bin that can accommodate about 150 cases. Agency partner on these efforts is Catapult Marketing. Bottom line: for 2018, "we'll stick with it," Nina said. "We're just at the beginning." In terms of consumer response, standout TV spot has been one in which parents chastising teen who's arrived home late speak thru helium balloons, to predictable comedic effect.

"Iced" edition of Coffee & Tea NYC expo put on in North Brooklyn yesterday by Starfish Junctions offered glimpse of some of directions entrepreneurs are going these days, particularly on RTD side, with items that included unroasted green coffee drink, CBD-infused artisan tea line and loose tea melding yerba mate with adaptogenic herbs. Not all of them are ready for prime time, but they give good sense of directions enterprising folks are taking as so-called third wave maybe advances to fourth wave. Show at Brooklyn Expo Center occurred, fortuitously, as NY weather abruptly segued from wintry cold and rain to summer heat.

Food/bev incubator MetaBrand and consultant Cascadia Managing Brands are tightening their relationship, upgrading it to "strategic alliance" under which much of MetaBrand's sales/execution work will be handled by CMB while MetaBrand handles R&D/production mgmt work for CMB's clients. Both are based in NJ . . . Well-known Wall Street analyst Caroline Levy, who departed CLSA when Chinese bank downsized much of its US biz (BBI, Mar 20), has landed at Macquarie Capital (USA) as sr research analyst for bevs, household products and cosmetics . . . Bev entrepreneur and deal-maker Eric Skae has successfully completed assignment at Italian food brand Rao's Specialty Foods, which has been sold to Sovos Brands. So does this herald return to bevs by Skae, who stepped in as Rao's ceo late last summer after long run at Iceland Spring, New Leaf Tea and as dealmaker? Not necessarily: announcement says he'll stay on to build co, and Eric told BBI last night he's kind of enjoying pasta sauce space. Rao's of course is century-old Italian restaurant in NY's East Harlem nabe that's notoriously hard to get a reservation at.

We just ran down flock of brand-building activities being undertaken by Austin-based High Brew Coffee on heels of receiving $17 mil tranche of new capital (BBI, May 30 and Jun 6). But wait, there's more, as late-night telemarketers like to say. Also in mix, co announced yesterday: refurbished 1952 GMC Coach bus that will be making sampling stops at festivals and other events in 31 cities from this week thru end of Oct. Tour by red-&-silver bus dubbed #HighBrewLiner is being orchestrated by experiential marketing firm OutCold, which will steer it to events like Mountain Games in Vail, Colo, this week and Lockn Fest jam band gathering in northern Va in Aug . . . Another Austin brand, Shade Tree Lemonade, this coming week completes immersion in local SKU accelerator (BBI, May 26). But it's also been making headway on distribution front. By now it's entered all HEB stores within territory of its first DSD house, Brown Distribution, and has just signed Kristen Distributing to work new Tex territory incl couple dozen HEB stores ranging from College Station to Waco. Intensified sampling efforts seem to be confirming that adding stevia in sweetener blend isn't turning off consumers, perhaps because citric element in lemonade cuts aftertaste, per founder Courtlyn Smith. Brand got its start, recall, handcrafted fresh at Austin City Limits and Lollapallooza fests before seguing to shelf-stable RTD form to support expansion.

Gary Vaynerchuk has been makin' some waves in digital space since emerging from family's retail wine biz, with his VaynerMedia digital agency advising clients like PepsiCo, Anheuser-Busch and Mondelez, even as he's gotten in at early stage as investor or advisor to likes of Uber, Snapchat and Tumblr. Over past year, following investment in sports agency Symmetry, he's been building out VaynerSports as challenger to athlete representation agencies. Now, early-stage maker of Icelandic-style yogurt smoothies called skyrs under B'more Organic brand has signed up as first bev partner. New alliance calls for B'more (whose name is play on its Baltimore hq town) to use as brand ambassadors the up-and-coming NFLers Braxton Miller, Ohio State alum (and most decorated Big Ten player of all time) who's now with Houston Texans, and Jalen Reeves-Maybin, Univ of Tenn alum newly drafted by Detroit Lions. They're intended to help get word out about protein-intense product that's used by Johns Hopkins lacrosse team and, behind scenes, pro sports teams in Baltimore. Campaign theme: "B'More Do More." Alliance calls for brand to tap into VaynerMedia's content-creation machine for creative centered around the 2 athletes, who'll also participate at in-store events. "They'll help us get the word out quickly about how our high protein smoothies with no added sugar can be the base for your fitness goals. And, they'll represent us with grace and class," said B'More cofounder Andrew Buerger. Move comes as brand has been expanding its reach, newly cracking Calif retailers like Molly Stone's and Raley's via UNFI (brand had already cracked Pac NW via same distributor), adding Topps chain and some Weis Market stores in Mid-Atlantic region and Ingall's chain in NC. Brand also has recruited Greenland Dairy as distributor in NY/NJ, said marketing & biz dvlpmt dir Amanda Sains, whose emails and tweets to Vaynerchuk after seeing him on TV saying he's ready to take on wellness brands led to alliance. Lipari Foods comes on as Midwest distributor late next month.

Fast-growing Humm Kombucha has pulled in $8 mil in growth capital in one fell swoop, landing private-equity investment from Velocity Made Good Partners (VMG). Form D filing spotted by BevNet indicates Bend, Ore-based brewer pulled in $8.1 mil out of $10 mil it was seeking, as VMG steps up its bev involvement after first foray, in sparkling bevs marketer Spindrift. Founder/ceo Jamie Danek told BBI that funds are being used to pay for new 40K-sq-ft production facility that opened in Jan as well as lotsa hiring. As reported, brand from start has worked to attain retail ubiquity, signing DSD partners, entering c-stores and pushing draft experience, with likes of Walmart and Target now among its retail partners. With output finally having caught up with demand, Danek said co is being restrained in its innovation activities for now. "It's a new facility so we're dialing our systems, perfecting our craft first before anything else," she wrote in email.

Wells Fargo's Bonnie Herzog has parsed recent scanner data to draw sobering conclusion that big players in bevs and household/personal care categories are facing deteriorating pricing outlook driven by rising competition, greater price transparency and low innovation levels, with conditions likely to worsen as brick-and-mortar foot traffic slows and hard discounters boost their presence. (Recall we recently heralded arrival of Germany's Lidl hard discounter chain on US shores - BBI, May 18.) So how's that playing out in bevs? Bonnie believes PepsiCo is in best position to weather challenge, thanks to robust innovation pipeline and faster pivot away from beleaguered CSDs, where pricing issues predominate. Tho Coca-Cola has actually gained pricing power, that's mainly because of strong presence in bottled water, with challenges in other segments. As for Dr Pepper Snapple Group, tho it's wisely focusing on premium-priced allied brands, it's still vulnerable because of heavy emphasis on CSDs and iced tea (Snapple), both categories that are seeing deteriorating pricing situation. "We are encouraged that PEP, KO and DPS are all proactively addressing their deteriorating pricing power, albeit in different ways," she wrote, but likes PEP best because its mix shift has produced avg 14% retail price increase in portfolio and it's benefiting from innovations like Mountain Dew Kickstart, which sells at double avg CSD pricing. She's also hopeful new Life WTR will strengthen co's position in premium water.

Fast-growing Hint Water is getting back into marketing game as consumers gravitate to its unsweetened essence waters in record numbers, but via drastically rethought strategy from last go-round a few years back. Gone are big-ticket sponsorships of events like Sundance and Coachella that aimed to generate images of A-listers cradling bottles of Hint. In changed landscape where celebs and their wranglers no longer are as willing to play that game, new mantra is "Concessions! Concessions! Concessions!" As in, doing deals - like New York's Summerstage outdoors concert series - where you get concession rights and category exclusivity. Right now, Parks Dept's Summerstage series is biggest commitment, but we hear there's more on way, for unsweetened essence water brand that after long gestation period is believed to be on way to hitting $100 mil in sales in next year or so.

Bev mavens around NY can look forward to active start to next week as trio of events pack calendar. This Sun brings Coffee & Tea NYC: Iced edition to Brooklyn Expo Space in Williamsburg section of boro, with exhibitors that include Wandering Bear, Yerba Project, Rise Brewing, Health-Ade Kombucha and Grady's Cold Brew. (More mainstream brands like Sparkling Ice and Bai are also listed on roster.) Info at CoffeeAndTeaFestival.com. Next up, on Mon, is Beverage Digest Future Smarts conference at Eventi Hotel, with speaker roster that includes Coca-Cola N Amer prexy Sandy Douglas, Honest Tea cofounder Seth Goldman, Jones Soda ceo Jennifer Cue and Gatorade gm Brett O'Brien. Info at ZenithGlobal.com/events. And summer edition of BevNet Live franchise, held at Metropolitan West space, will bring VEB gm Scott Uzzell, Humm Kombucha founder Jamie Danek and High Brew evp marketing Mari Johnson, along with entrepreneurs' showdown. Info at BevNet.com/events.