Beer Marketer's Insights
Farmhouse Culture, fresh off a Series D investment that included General Mills' 301 venture fund, used Natural Product Expo West as platform to debut its first full-fledged foray into RTD bevs, offering a version of its two-and-a-half-year-old Gut Punch probiotic shots in 12-oz glass bottles priced at $3.79. New line uses fermented veggie base - "beet-based, kvass-like," as one booth staffer put it - and is claimed to include 4 mil cfu's per 8-oz serving, on part with some kombuchas, but only 20 calories. It's debuting in broad range of approachable flavors: Orange Cream, Mango Guava, Ginger Lemon, Strawberry Hibiscus, Cherry Cacao and Cola. Three of entries are produced with golden beets and others with ruby beets, with bev color partly a factor. It will be produced next week for arrival on store shelves in Jun/Jul timeframe. As for the gut shots, they're being extended with Garlic Dill Pickle, Ginger Beer and Korean-style Kimchi flavors.
Harris Freeman's fledgling PureSteeps incubation unit is wasting no time scaling its Secret Squirrel acquisition, broadening line and shuttering small mfg operation in LA in favor of Fresh Bev copacker in Conn, with plans to reinstate West Coast production at bigger plant in LA area for which co is undertaking site search. Meanwhile, cold-brewed brand has entered 380 Target stores on West Coast with its 3 RTD latte entries.
RESEARCH: Bottled Water Volume Slips Past CSDs in Per-Cap Consumption, Says Bev Marketing
Another data arbiter has lent its voice to chorus heralding overtaking of CSDs by bottled water as #1 bev category in US, and drawing similar rash of media coverage. This time it's NY-based Beverage Marketing Corp, citing 9% volume surge to 12.8 bil gals, slipping past CSDs on per-capita basis by 39 gals to 38.5 gals. For CSDs, that per-cap # is severe dip from over 50 gals at turn of century, figure that Beverage Marketing expects bottled water to reach by middle of coming decade. Other data trackers like Beverage Digest/Zenith Int'l had earlier heralded leadership change.
Has Talking Rain Chief Klock Moved On?
Over years Natural Products Expo West has proved hotbed of industry speculation, as hundreds of bev execs mingle on massive show floors in Anaheim, Calif. This latest bit of speculation is no different, and rumor makin' rounds among trade partners is a doozie: that Talking Rain prexy/ceo Kevin Klock may be movin' on. Tho Seattle-based co is family-controlled, rumor seems a stretch: after all, onetime dairy plant mgr Klock is exec responsible for growing Sparkling Ice from sleepy Pac NW entry into national DSD juggernaut, and at recent media breakfast he outlined ambitious plans for 2017 and signaled that co's first acquisition may be imminent as he seeks to make good on promise to fortify DSD network with other growth engines. So we're a bit mystified, but just passing on what we've heard. No immediate response to query left with Kevin today.
Bruce Cost Ginger Ale has unveiled new line branded as Brooklyn Organics Craft Ginger Ale, for first time offering zero-sugar, stevia-sweetened entry that eschews the name of its eponymous founder. New organic, non-GMO line packed in 8-oz cans priced at $1.49 attempts to provide guilt-free take on ginger ale, in range of unusual flavor combos including a Cola sku that echoes similar ginger/cola combo offered by PepsiCo in its canned 1893 boutique line. (Tho marketing mgr Kevin Li said BCGA's take riffs off old Asian tradition of reinforcing colas with ginger as healing potion.) Unlike Bruce Cost-branded core line, which is produced from ginger painstakingly processed in co's Brooklyn plant, this one relies on ginger extract procured outside the co. Both lines are copacked outside Brooklyn, tho. This also represents co's first organic entry.
With consumers gravitating away from CSDs, increasing # of natural-food players are seeking to offer healthful alternative, from KeVita, with its matrix of probiotic tonics, kombuchas and drinking vinegars, to GoodBelly, with its own sparkling line. Now Chicago-based kefir stalwart Lifeway Foods is entering game, with organic, non-dairy probiotic line called Elixir. New line packed in clear glass bottles is debuting in 4 flavors: Tangerine, Hibiscus, Ginger and Elderberry. It's stark departure from dairy-based kefirs that have been Lifeway's mainstay - beginning "a new chapter for Lifeway in its innovation and product diversity story," as ceo Julie Smolyansky put it.
Jones Soda got back in growth mode in 4th qtr, scoring 12% gain to $3 mil, with co brass saying restage of cobranded line with 7-Eleven chain has gotten brand on track now. For Q4, net loss narrowed to $236K from $545K. Sales gain left full year up 15.3% to $15.7 mil, with net loss of $183K representing dramatic improvement over prior year's $1.1 mil loss. On investor call yesterday afternoon, JSDA ceo Jennifer Cue exulted that 2016 was first time in a decade that co scored double-digit growth and positive EBITDA for full year. She later noted pointedly that apparent turnaround has occurred with no recourse to new capital aside from $700K of her own money that she's invested, plus enhanced line of credit. "With a stronger foundation in place, now is the time to be more aggressive in creating additional partnerships and accelerating the growth of our initiatives," she said.
Bill Moses, who recently flipped his KeVita probiotic/kombucha co to minority investor and distribution partner PepsiCo, has signed on as a senior operating and strategic advisor to Whipstitch Capital, which helped implement the sale. Whipstitch, based in Burlington, Mass, was formed by former Silverwood Partners principals Mike Burgmaier and Nick McCoy.
AccelFood Notches Investment in Plant-Based Protein Play Koia, as It Ramps Up Fund to $35 Mil
AccelFood has grown its 2d fund to $35 mil, writing investment checks to bevcos like plant-based protein play Koia, aloe bev Aloe Gloe and, as earlier reported, fountain play Tractor Soda. That's an order of magnitude greater than initial $4 mil fund, when accelerator launched 3 years ago by Jordan Gaspar and Lauren Jupiter began investing in sub-$500K cos. It soon ratcheted that up to $20 mil and now has notched another increase in investment resources. "This increased pool of capital and expertise created by the expanded $35M fund will further bridge the gap between the innovative thinking and authentic entrepreneurship of emerging startups in the food industry and the genuine resources needed to scale these products to the highest level of growth," co said. Also getting an investment from Accel is BOU, purveyor of gluten-free bouillon cubes.
Coca-Cola's largest indie bottler in N Amer, Coca-Cola Bottling Consolidated, closed out 2016 riding territory expansion to 37% revenue increase to $31.6 bil. But it also scored 7% gain in organic growth, driven by 2.4% gain on sparkling side and over 11% gain on noncarbs. "Since the first announcement of our territory expansion in 2013, the company has nearly doubled its net sales to over $3 billion in 2016," said chmn/ceo Frank Harrison, referring to benefits of refranchising push being undertaken by Coca-Cola, with more territories on the way. During period, payroll has about doubled to 14K employees.

