Beer Marketer's Insights
There was no connection between the threadbare booth in which they were operating and the recent adverse legal judgments that could cost the company hundreds of millions in penalties, VPX execs insisted to us from their tented, carpet less space at NACS on Sun. (By Mon they had added a modicum of creature comforts.) That was simply an outgrowth of recent years' feuding with NACS promoter over excessive noise. Still, with evp Gene Bukovi and vp Joey Nickell arriving on scene yesterday, Bang marketer was continuing its brisk enlistment of DSD partners to replace with Pepsi system whose alliance is kaput as of Oct 10, with Gene reporting that such houses as Odom in Pac NW and De Crescente in upstate NY are latest aboard. Bukovi didn't dispute notion that establishing contractual terms has occasioned brisk debate after co's earlier messy pullout from indie system in favor of Pepsi but, as several wholesalers agreed to us outside booth, they believe the damage done under failed Pepsi alliance can still be undone. Of course, with Celsius exiting many of those same houses for Pepsi now, they have strong incentive to agree to terms with Bang. As we've reported recently, with Congo Brands unwinding some of its self-distribution lately for entries like Bang, it's also knocking on some of those doors.
After patiently building out compact portfolio of 4 RTDs over past year, Black Rifle Coffee Co has dramatically upped its innovation efforts with array of full-year and limited-time offerings while undertaking a changing of the guard at leadership level. The org stuff first: Strategy & Execution Inc, the consultancy operated by Bryon Evans that incubated RTD line, has amicably moved on as co installs its own permanent staff to manage biz that has quickly grown to substantial size thanks to SEI's efforts. Now it's moved under direct purview of coo Toby Johnson, a 12-year PepsiCo exec who'd joined Black Rifle Board in 2020 and accepted exec role there in summer 2021. Her mandate encompasses CPG biz including RTDs and bagged coffees, key growth leg aside co's core DTC biz and its expanding network of cafes dubbed Outposts. Like essentially all senior leaders there, she comes from service background as former Apache helicopter pilot. Also key in mix is another old Pepsi hand, Chuck Thomas, serving in role of vp sales & distribution. SEI will continue to advise on buildout.
Kitu Life Super Coffee, which has been building out its core functional coffee line in partnership with minority investor Anheuser-Busch and its wholesaler network, has launched non-coffee entry dubbed Super ENRGY that plays in burgeoning 12-oz slim-can segment. Entry is infused with collagen, B and C vitamins and prebiotics, unusually eschewing sucralose as sweetener in favor of natural combo of monk fruit and stevia. It offers 200 mg of caffeine and is breaking in Strawberry Lemonspark, Mixed Berryburst and Mango Peachpop flavors. SRP is $2.49. Cofounder/ceo Jimmy De Cicco said it's broken in HEB chain in Texas, where co is based, and heads to Amazon next month. Co will selectively offer it to some Bud houses but it's not part of broader alignment with ABI, which wields Ghost Energy as its main play in energy segment these days.
Blue Triton, the private-equity-backed co that acquired the commodity business of Nestle Waters North America, including Pure Life and Poland Spring, has revved up its innovation at the premium end. At NACS, the co displayed moves into agua fresca, collagen-water and alkaline water even as it continued to tweak - and untweak - the portfolio it acquired from Nestle. Also highlighted was the brand it acquired last fall, Saratoga Springs Water, a rare American spring water to play in superpremium bottled-water segment dominated by Euro-imports like Pellegrino and Acqua Panna (BBI, Nov 24).
PepsiCo took wraps off Gatorade's first entry into caffeinated space, Fast Twitch, with 200 mg line that "ignites power," as marketing slogan puts it. As reported, pre-workout line launched in partnership with NFL and will be fully rolled out in Q1 in zero-sugar formulation packed in 12-oz PET bottle. PEP still seems to be working out final pricing but it will command clear premium to core Gatorade line. Inaugural lineup, per data on iPads at booth, comprises 4 national entries in Glacier Freeze, Watermelon Strawberry, Cool Blue and Tropical Mango, augmented by divisional entries Strawberry Lemonade and Orange. Meanwhile, Gatorade's Pedialyte-like Gatorlyte is adding Zero extension that rolls out in Q1 in Strawberry Kiwi and Lemon Lime flavors . . . Also on view at booth was Starry entry that's clearly intended as response to Coke's powerhouse Sprite lemon lime brand, tho not in final packaging yet. It will debut in full-flavored and zero-sugar versions in 12-pks of 12-oz cans, 20-liter PET bottles and 2-liter bottles. "Purpose-driven brand built for Gen Z," marketing materials state . . . Bubly flavored sparkling water brand is offering dessert flavors starting in late Feb with addition of Orange Cream and Lemon Sorbet flavors. At opposite end of spectrum will be unflavored Just Bubly . . . Starbucks Pink Drink, the Instagrammable in-store smash, debuts in flashy 14-oz plastic bottles in Mar in Strawberry Acai + Coconutmilk and Pineapple Passionfruit + Coconutmilk flavors . . . Starbucks Doubleshot adds Caramel flavor in Mar, riffing on popular coffeehouse flavor . . . Rockstar Energy will combine two top-10 flavors from category with Strawberry Peach in its Pure Zero and Punched lineups. Its revamped Rockstar Recovery line, with collagen, vitamin C and coconut water, adds Strawberry Lemonade flavor in Jan . . . Among fountain highlights was Mexican-style agua fresca lineup under name Viva Sol in Horchata, Jamaica (steeped from fresh hibiscus petals, staffers said), Pina and Melon. Line had debuted just before pandemic hit and PEP execs were surprised to see it do well not just in initial foodservice target but in convenience & gas retailers, so it's getting big push now . . . Among other focuses of booth were Pepviz in-house data system that allows retailers to pinpoint mix that works for their local demo based on parameters like age/lifestyle, income and how health-focused shoppers are. It weaves in data from variety of outside sources as well as Pepsi's own captive bottling system.
NACS: Pricing Sticking; STZ's on a Roll; "Huge Focus" onModelo Oro; Big Focus on Bud Light in '23
Convenience store retailers and manufacturers "were upbeat about the broader consumer despite inflationary pressures," wrote Goldman Sachs' Bonnie Herzog after tour of Natl Assoc of Convenience Stores conf in Las Vegas. No surprise that "lines continue to blur" between alc and non-alc brands as most cos continue to push innovation "to grow their total beverage portfolios." Even with soaring inflation, Bonnie noted, "virtually all" cos she talked to said their recent price actions "have been sticking with limited downtrading."
Another Blockbuster: Reyes Beer Division Will Buy Austin, Enter Texas; Pass 300 Million Cases
For the 2d time in just 1 month, Reyes Beer Division has announced a blockbuster deal to acquire an MC distrib in one of the hottest mkts in the country. This time, it will buy Capitol Wright Distributing in Austin, over 16 mil cases. Austin deal comes just 1 mo after RBD announced deal to acquire near 10 mil cases in Nashville. Capitol Wright deal announced to employees this morn and expected to close in Dec. Distrib has 600 employees, according to its website. These 2 deals will add near 26 mil cases to RBD total, meaning that with these 2 deals alone, it will acquire more than total volume of all but the biggest 5 or so MC distribs.
Longtime House of LaRose Leader Passed Away
Ohio beer distrib leader Thomas A. LaRose died Sep 22 at age 94. He was second generation of his family to head distributorship, taking over as prexy of LaRose beer, wine and bev distrib's biz when he was in his early 30s after his father passed at 59 in 1962. Besides growing biz in northeast Ohio that employs ~300 people serving over 5200 accounts in 8 counties, Tom served as chmn of AB Distributor Advisory Board; was a leader and board member of NBWA and past prexy of the Wholesale Beer and Wine Association of Ohio. Tom "lived by the adage 'Making Friends is our Business,'" his family recalled in obit featured in Palm Beach Post. "He taught his children in the business and his managers how to lead their employees, customers and suppliers with loyalty and integrity." Remembrance also noted when Tom "entered the room, he always
"Hard seltzer has lost its fizz. Now canned cocktails are all the buzz," CNBC proclaims in latest mainstream media article about beer cos capitalizing on the "canned-cocktail craze." While piece acknowledges brewers' continued efforts in significantly larger hard seltzer segment, it also points to their hastening push into RTD spirits, spotlighting AB's acquisition of Cutwater (no mention of Nutrl), MC's coming launch of Topo Chico Spirited plus Heineken's debut of Dos Equis Margarita. And the latter is off to a "promising start," with rate of sale per store "almost double what we expected," commented HUSA cmo Jonnie Cahill. So co will look to expand offerings to more states and more flavors. Tho CNBC notes that AB (and others) haven't "given up" on hard seltzers, beyond beer prexy Fabricio Zonzini added that "fast-growing RTD spirits continue to become a bigger focus area for us, with Cutwater being our top priority."
Competition remains so heated and interest so high in energy drinks because this huge segment still up strong, with plenty of room for fast-rising stars. That's even as top 2 still over 70 share. Total energy drink $$ sales up 10% to $12.8 bil yr-to-date thru Sep 4 in IRI multioutlet + convenience data. That's almost 2X the size of imported beer; at $6.8 bil, up 5%. And energy drinks almost 4X the size of hard seltzer, which is down 10%, to $3 bil. With such heft, healthy margins and growth, no wonder beer distribs still looking for whatever might be next, even after losing energy drink brands repeatedly over the years. The last to exit, of course, has been Celsius, heading into Pepsi network. (A slightly different version of this article appeared in sibling pub Beverage Business INSIGHTS).

