Beer Marketer's Insights

Beer Marketer's Insights

Big Geyser, leading unaligned DSD house in NY, claims by now to have filled huge void created by departure of Coca-Cola's Glaceau brands coupla years ago, stepping up its own brand-building skills to ride latest wave of innovative brands. Meanwhile, partnership remains strong with Coke brands still in house, including VEB brands Honest Tea, Zico Coconut Water, Illy coffee and Hubert's Lemonade, and Monster Energy, even as first brand created by Geyser itself, Hal's Seltzer Water, has begun to ignite, said Jerry Reda, coo of Maspeth, Queens-based house. "We had to put on our brand-building pants over the past 24 to 30 months," Jerry told BBI. "A lot of people wrote us off after losing 30% of our volume. So we had to roll up our sleeves and leverage our relationships with retailers." Note that, with indie route owners in much of its territory, Glaceau departure exacted steep toll in morale for those who saw sudden and drastic reduction in routes' value and put pressure on Big Geyser to make them whole as quickly as possible.

Tho suffering from much-discussed snafus on several major launches, Monster Beverage seems to be keeping pipeline filled at margins, with new in-store Dunkin' Donuts entry and Zero Ultra and Juice Monster flavors.

Honest Tea is ramping up overseas push while stepping up innovation on domestic side, including releasing refined version of its Honest Sport natural sports drink. Encountered at Big Geyser open house on Fri (story below), Honest Tea cofounder Seth Goldman said brand is expected to play key role in parent KO's push to develop global brands - view that was echoed several times on KO earnings call this morning. Tho Seth wasn't ready to disclose next markets, and KO brass didn't offer any specifics on call, Huffington Post/Le Monde partnership in France reported Fri that Honest Tea will debut in that country this summer, as fruit infusion in likely flavors Orange Mangue (Orange Mango), Grenade Myrtille (Pomegranate Blueberry) and Citron Miel (Lemon Honey), in half-liter bottles containing 19 g of sugar, barely half amount contained in much smaller bottle of Coke.

This won't come as a shock after he moved to liquidate more than half his shares in Monster Beverage: cmo Mark Hall, who created brand in late 1990s at what was then Hansen Natural, resigned that post Fri in order to adopt lower-profile role focused on new-product flow, starting May 1. Terse 8-K regulatory filing by MNST notes simply that Mark "has decided to reduce his responsibilities to spend more time with family" and "will continue to serve as an employee of the company, focusing on ideation, design and development of new products." He'll also retain board seat. Goldman Sachs' Judy Hong took sanguine view, noting that Hall had return from earlier hiatus to focus on restaging portfolio of energy brands acquired from Coca-Cola, task that's now largely completed. She believes shift is "unlikely to impact strategy/innovation." That said, Monster Bev is undergoing uncharacteristically fallow innovation period, first holding up some launches while transition to Coke distribution was navigated, then offering flock of intriguing products that have either not yet ignited (Mutant CSD entry) or suffered from production issues (Hydro enhanced water, Caffe Monster coffee).

Incoming Coca-Cola ceo James Quincey is accelerating the cost-savings drive with plan to cut 1,200 jobs in near future, with much of savings to be turned over to building co's presence in emerging categories. Co said it's expanding 6-year productivity program by $800 mil to $3.8 bil ($4.3 bil if $500 mil headed to refranchised bottlers is included), with half of savings anticipated to be plowed back into biz.

Judy Hong and her colleagues at Goldman Sachs have taken flier on what they believe will be next billion-dollar brands in NAs - in process issuing warning that many of most promising entries could prove threat to Coca-Cola and PepsiCo's hard-won gains on hydration side as counterbalance to declining CSDs. "We believe investors are overly sanguine about the dynamics for KO/PEP in Hydration, which have become much less favorable due to the rise of independent brands (Sparkling Ice, Core, Essentia, Body Armor) that have eaten into share," they write. "We now see about 1-1.5% downside to KO/PEP organic sales from dynamics in Hydration alone."

Roster of would-be suitors for Whole Foods keeps expanding. After reports in past week that supermarket giant Kroger might make a run for natural foods pioneer, Financial Times has reported that Albertsons Cos, owned by private-equity shop Cerberus, is among those considering bid. Another potential suitor: online giant Amazon, which has been testing variety of bricks-and-mortar operations. (BBI contact said execs from Amazon and/or its Zappos unit were seen touring Whole Foods' new flagship store in Philadelphia last week with ceo John Mackey.) Speculation has revved up since Jana Partners took minority stake in retailer, promising shakeup. For its part, Whole Foods has been rumored to be eyeing potential merger with Sprouts Farmers Market chain, another key natural-food chain.

Trying again to add personality to bottled water import built on origin, Icelandic Glacial has launched new campaign dubbed "Pure Authenticity" that initially features quartet of unique near-celebs who've managed to succeed by fighting adversity and discrimination and staying true to who they are. New effort from Miami-based Bush-Renz agency was flagged by teaser ad that went live on Fri night, featuring group shot in black-&-white of the 4, including Senegalese model Khoudia Diop, whose complexion initially was regarded as too dark for her to succeed in field, and Hunter McGrady, who made Sports Illustrated swimsuit edition after deciding to end her flirtations with anorexia and embrace her full-figured real self. (Also in mix are fashionista Nick Wooster and actor Broderick Hunter.) Ad carries Icelandic logo superimposed over map of Iceland and the text, "Pure authenticity. Bottled at the source in Iceland." Tho the photo subjects are shot discreetly holding bottles of Icelandic Glacial, there's no beauty shot of package nor discussion of water's features.

New board installed at struggling Reed's Inc under chmn John Bello seems to be moving in decisive fashion: it's eased founder Chris Reed out of his ceo role into that of chief innovation officer, while vowing to take pricing up on core Reed's and Virgil's brands and build out robust portfolio of lower-calorie entries. Taking interim reins as ceo is another recently installed board member, Stefan Freeman, operations-oriented supply chain vet with prior experience at Pepsi, DPS and Coke. Co also announced completion of $3.4 mil private placement from entity called Raptor/Harbor Reeds SPV that should help fund key initiatives this year.

Lotsa action coming up in Chicago this spring, starting next week with Beverage Forum, which opens Thurs at Westin Chicago River North hotel with speaker lineup that includes PepsiCo chmn/ceo Indra Nooyi, Coke North America chief Sandy Douglas, Monster Bev chmn/ceo Rodney Sacks and former Nestle Waters luminaries Kim Jeffery and Tim Brown. On innovation front, roster includes Chameleon Cold-Brew founder Chris Campbell and Essentia strategy chief Neil Kimberley. Confab is presented jointly by Beverage Marketing Corp and Beverage Industry mag. Info at BeverageForum.com. Coming down pike behind the Forum are the Beer Marketer's Insights spring conference, at the Four Seasons Hotel on May 15-16, with focus on high-end beers, water and spirits, and National Restaurant Assn expo at McCormick Center from May 20-23.