Beer Marketer's Insights

Beer Marketer's Insights

NY Times spirits columnist Robert Simonson last week offered look at little sub-trend among booze marketers: creating their own non-alc mixers as perfect adjunct to their core brands. BBI profiled one such example coupla years ago: NA vet Mike Oringer, newly come to vodka stalwart Stolichnaya as svp innovations, launched ginger beer (BBI, May 29 2014), effort that gets prominent discussion in Times piece. By now sales are pegged at 200K cases annually, story indicates, via retailers that include Walmart, and co is said to eyeing launches of tonic water and club soda. But Mike was treading well-worn path: back in 2011 Spain's Gin Mare created its own tonic water called 1724 (produced in Peru, good source of quinine) to better slake country's thirst for G&Ts. Germany gin maker Windspiel makes a tonic, and Dutch gin maker Loopuyt makes both a tonic and a ginger beer. In this country, most conspicuous success has been by Bermuda's Goslings: it trademarked its Dark 'n' Stormy concoction in US based on its Black Seal Rum and 5 years ago recruited Polar Bev in Mass to produce Gosling's Stormy Ginger Beer. By now that's more than 2-mil-case brand.

Stumptown Coffee is broadening its range of RTD cold-brewed coffees with canned sparkling line, breaking in Original, Honey Lemon and Ginger Citrus flavors. New line, packed in 12-oz cans, is outgrowth of in-store experiments with seasonal cold-brew coffee sodas, as well as cocktail spinoffs called Endless Summer and Duane Sorensen (chain's founder) in New Orleans location. The canned entries contain half the caffeine of co's more conventional RTD cold-brews. Original is likened by co to venerable brands like Manhattan Special, while Honey Lemon is dubbed an Arnold Palmer-type refresher using honey from fellow Portland, Ore, co Bee Local . . . Juice bev marketer Purity Organic may be next to jump into sparkling realm: word on street is it's planning Orangina-like sparkling line in cans, for possible debut at upcoming Natural Products Expo West. No confirmation from SF-based Purity Organic, whose execs haven't been reachable by BBI in recent weeks.

Venerable Thai energy brand that may even predate Red Bull is heading to US: Shark Energy. Created 3 decades ago by 126-year-old Osotspa Co Ltd, Shark brand employs caffeine derived from coffee and other natural ingredients, and is priced at modest discount to Red Bull, $1.99 per 8.4-oz can. It's launching in Florida with 7-Eleven in Shark Stimulation Original and Shark Sugar Free, with Red Berries, Apple & Melon and other flavors hitting market later this year. "I get asked whether the world needs another energy drink," said Tim Sullivan, Scottsdale, Ariz-based exec who's masterminding North America launch. "My answer is 80 countries have already had one for years in Shark Energy Drink. Now the US has it too." He added: "In fact, we rival Red Bull on premise in many parts of the world and that's a secret we want to get out in the US." Info at SharkEnergy.com.

Who you callin' bland? Not Sparkling Ice. Talking Rain-owned brand is rolling today with campaign budgeted at $37 mil that posits soda-alternative as the go-to for those who're not bland. "Drink Not Bland. Be Not Bland" campaign devised by Seattle agency Wexley School for Girls aims to elevate brand to more than an impulse buy at retail by associating it with "people, places and personalities that fill life with flavor and 'not bland' moments, co said. Campaign anticipated since last fall (BBI, Nov 29) is budgeted to air on broadcast and cable networks including ABC, ESPN, E!, Bravo and Comedy Central, with national print, online and interactive digital media also in mix. Among more offbeat elements in mix will be 3D graphics and scented displays, to highlight vibrant flavor that's accounted for much of brand's success to date. TV ads shot in LA by comedic dir Baker Smith and production house Harvest Films opt for memorable visuals to reinforce that Ice is good bet for folks bored by plain water. In one, family having mundane conversation over dinner is shot upside down - with some items, like poured Ice and family cat - proving resistant to gravitational pull, to comedic effect. Print ads and outdoor boards show cavorting seniors and unicycling hipsters under slogans like "Never too busy to get fizzy" and "Be not frightened of being you."

PepsiCo ended 2016 with strong Q4, which brought 5% net revenue rise to $19.51 bil, enabling NY-based co to close year about flat on topline, at $62.8 bil. Organic revenue growth came in at 3.7% for both Q4 and full year, prompting chmn/ceo Indra Nooyi to proclaim that co continues to weather challenging environment well. "We met or exceeded every financial goal we set for 2016, while delivering a good balance between revenue performance and productivity," she said. Co was aided by extra week in period, but that was partly offset by incremental investments in marketing and other areas. Commodity price increases also squeezed margins a tad. Still, operating profit rose 6% for qtr, to $2.38 bil, and 17% for year, to $9.79 bil. In crucial North American Bevs segment, sales rose 8% to $6.29 bil in qtr, +3% to $21.31 bil for year. Operating income jumped 8% to $689 mil for qtr, +6% to $2.96 bil for year. And co is promising another 8% eps gain in 2017, prompting Stifel's Mark Swartzberg to headline: "Another Year Another 8%-10% Underlying EPS." That hed might not work in tabloid like NY Post, but it's likely enough to get investors' juices flowing.

SodaStream shares exploded in early trading today after maker of home carbonation systems reported surge in revenues and income that suggested its turnaround is gaining momentum. Revenues soared 16.7% to $131.8 mil and net income more than doubled to $15.6 mil from $5 mil a year earlier. Operating income nearly quintupled to all-time record of $54.5 mil. Eps tripled to 71 cents. Gross margin jumped by 4.4 % to 52.4% on strength of shift to more profitable newer machines, price increases on some units and efficiencies from new plant in Israel. SODA's knack for generating content that goes viral also translated to bottom line, allowing co to bank part of media budget when its Shame & Glory video spoofing Game of Thrones ignited; it's now been viewed 60 mil times and, just as delicious to ceo Daniel Birnbaum, has spawned threats and rebukes from likes of Nestle Waters, good for another round of publicity.

Tractor Soda, which was among the first CSD marketers to offer truly natural fountain version, has accepted investment from incubator AccelFood as it seeks to exploit restaurant chains' increasing restiveness with conventional offers employing HFCS and artificial flavors and preservatives. Tractor, based in Coeur d'Alene, Ida, was founded by entrepreneur Travis Potter and claims to be in 30+ states by now with recipes spanning traditional Cola to exotic Lemon Grass, Cucumber, Cabernet and Orange N Cardamom (BBI, May 16). Potter has said RTD versions are likely at some point in future . . . NBA Development League (D-League) is being renamed NBA Gatorade League (G-League) thanks to expanded multiyear partnership with PepsiCo. As part of deal, "Gatorade will incubate its latest product and equipment innovations into NBA G-League locker rooms, and teams will have the opportunity to collaborate with Gatorade to help players maximize their athletic potential and on-court performance" via Gato

Joining rush of loose-tea makers to offer functionally inflected entries, Chicago-based Argo Tea has launched all-natural Wellness Collection under names Detox, Empower, Energized, Relax and Renew that each melds tea and "ingredients with a purpose." They're going out at SRP of $15.95, tho weight varies by blend from 3.2 oz for Renew and Relax to 5.6 oz for Energize. New collection also is being featured in Argo stores via a limited-time line of its so-called "signature drinks" that meld the teas with Sapp Birch Water, available thru Mar 20. Detox blends green tea, herbs and spices; Empower blends hibiscus flowers, apple and elderberries; Energized blends Assam black tea, yerba mate, cocoa and cinnamon; Relax blends rooibos, chamomile blossoms and orange petals, and Renew blends fruits, herbs and aloe vera. With launch, Argo joins range of tea marketers from Republic of Tea to Numi that are offering purportedly functional blends.

New Age Beverages has priced pending public offering of 4.3 mil shares at $3.50, with ambition of netting $15 mil in gross proceeds to support ambitious plans to turn co into major healthy-bev player as its shares from over-the-counter market to NASDAQ effective today. Move to NASDAQ aims to overcome what NBEV ceo Brent Willis has cited as inefficiency of OTC market that sees shares of profitable co like NBEV commanding lower multiple to sales than other small-cap bevcos that struggle to be profitable. NBEV, recall, is rollup of Bucha kombucha player with New Age Beverages, which is major DSD house in Denver and also markets several of its own brands: Xingtea, Xing Energy and Aspen Pure Rocky Mountain Water. In addition, co has established sales/marketing alliance with owner of licensed Marley Mellow Mood and Marley One Drop Coffee brands that some believe may progress to full ownership by NBEV once NASDAQ move is completed. Stock sale is being jointly handled by Aegis Capital and Maxim Group, which have been granted 45-day option to purchase up to additional 643K shares to cover any overallotments that may develop. Offering is anticipated to close on Fri. Willis, a vet of Anheuser-Busch and Cott, has expressed ambitions of creating and acquiring additional brands, while improving efficiencies via move to zero-based budgeting. He came in via Bucha Inc as successor to New Age's core investor, Pizza Hut founder Dan Carney, who was looking to unwind his businesses as he advanced in age; tho Xingtea over the years has garnered extensive geographic footprint, insiders had complained that it was starved of investment needed to give it a shot at breaking out. New Age had been managed by the brothers Scott and Tom Lebon, who remain in place at New Age Bev Inc subsidiary, Scott as ceo and Tom as N Amer prexy. NBEV presentation dated Jan 30 indicates some new-product directions co may take under ceo Brent Willis. Existing portfolio of Xingtea, Marley's Mellow Mood, Marley One Drop Coffee, Bucha Live Kombucha and Aspen Pure Water can be freshened up with sparkling, coconut, aloe and other extensions, as well as functional benefits like probiotics, bergamot and others, even as patent-protected "disruptive" new brands can be launched under brand names like Enhanced Recovery and PediaAde. There's also been some speculation, given co's operations in Colo and Calif and access to Marley brand name, that it might make move into cannabis arena.

B-Tea, shelf-stable kombucha that seems to have sparked fair amount of interest among DSD houses, has signed with Statewide Beverage for Southern Calif, not long after recruiting Big Geyser to service brand in NY metro (BBI, Jan 26). B-Tea is based in Fair Lawn, NJ, and has been working with Cascadia Managing Brands to build distribution network . . . Looking for better penetration in up-and-down-street market in NY, Voss Water has enlisted captive DSD network of AriZona Iced Tea to buttress longstanding efforts by Manhattan Beer to build superpremium bottled water brand. Voss execs confirmed move, which balances chance of further boosting penetration of impulse channels against AriZona's rep for focusing on its own brands over outside partners and its struggles to develop products with more appeal in premium-oriented retail channels. Manhattan Beer has proved effective partner for Voss over the years, particularly in crucial on-premise channel where brand's high-end identity was forged.