Beer Marketer's Insights
Gov't antitrust move vs Facebook last week reinforced how issue suddenly has become top-of-mind among regulators, to point where action seems likely on some fronts even amid deeply divided Congress and uneasy transition to new administration. So there seems little question it's gonna be an issue in coming year for tech cos, who're mustering army of lobbyists and lawyers in preparation. Is it likely to be big issue for food/bev cos too? It's already bubbling up around fringes - whether by move among family-owned beer wholesalers in Calif to create separate lobbying org in response to accelerating consolidation among both brewers and rival wholesalers, or move by European regulators to rein in what they view as predatory behavior by Amazon that, to offer example relevant to our sector, can see etailing giant harness data of bevs sold on its platform to devise private-label knockoffs that it then gives greater visibility to shoppers. Will incipient movement go further to point of gov't clamping down on Coke buying Essentia or Anheuser-Busch buying Bang or whatever the next emerging-brand deal might turn out to be? We can't say we've heard anything yet along those lines. But political dynamics remain highly unpredictable, with Dems and Republicans sometimes aligned for opposite reasons. (For instance, Dems feel platforms have been too lax in cracking down on disinformation while Repubs think they've been too strict, but both parties think they've gotten away with murder.) Even left-leaning Nation mag has argued that Dems need to re-align themselves as ally of small biz, reclaiming constituency long conceded to Republicans in effort to strengthen labor and fight concentrated private power. Throw in continued uncertainty on which party will control Senate next year and connection between market power and visible issue of income inequality, and there's wide variety of possible outcomes.
PepsiCo has launched a giveback program to support some of smallest and most cash-strapped retailers around New York City this holiday season, those dispensers of chopped cheese sandwiches the bodega owners, per Ad Age. Starting today, thru holiday season, "Pepsi is supporting and thanking New York City bodegas across the 5 boroughs with a new digital and social giveback campaign featuring Bronx natives Desus Nice and The Kid Mero," hosts of late night talk show on Showtime, and also featured personalities of Bodega Boys podcast, wrote ad trade. Campaign launches today with debut of short film titled "The Bodega Giveback," which will show Desus and Mero reward Bronx staple, JJN Corp Deli, with a check to cover a full year of rent thru 2021 to help make up for slow sales this year and also for this bodega owner continuing to serve his local community even thru death of his own father to Covid-19. PEP "plans on mak
There seems to be welcome news on the way for Molson Coors distribs who're being solicited to carry its NA brands but we may have overstated things a bit. At BevNet Live conference a coupla days ago, emerging growth prexy Pete Marino acknowledged wholesaler pushback to contract governing NAs and assured MC is listening and will probably make some modifications. But it won't be "new contract," as we'd paraphrased remarks.
It's a new world at yogurt giant Chobani. The Norwich, NY-based co is continuing its innovation blitz with debut of flock of World of Chobani Probiotics spoonable and drinkable formats while further building out its oat portfolio, as it sprints to keep up with consumer taste shifts. Tho yogurt items by definition are probiotic, the new assemblage blend 4 probiotic strains: LGG, L Acidophilus, Bifidus and L Casei. They include Chobani Probiotic single-serve yogurt cups, yogurt-based drinks and kids-oriented Little Chobani 4-oz drinks and 3.5-oz pouches. On oats side, Chobani is expanding its year-old platform with addition of Chobani Oat Zero Sugar in 52-oz multiserve packs at $3.99 and Chobani Oat Coffee Creamers in Original and Vanilla in 24-oz multiserve packs, also at $3.99.
Riding continued success of its La Croix brand, National Beverage scored 8% net sales gain to $272 mil in its fiscal Q2, with operating profit surging 16.6% to $61.6 mil. Gain was led by 11.1% volume increase of its so-called Power+ Brands including La Croix, slightly off the 13.6% growth rate over first 6 months of fiscal year, per co's 10-Q statement. That Power+ portfolio also includes Clear Fruit enhanced waters, Rip It Energy, and Everfresh and Mr Pure juices; rest of portfolio is dominated by value-oriented CSDs like Shasta and Faygo. Co that trades as FIZZ boosted gross margin by 4.3 pts over past 12 months. For trailing 12 mos co now has broken bil-dollar mark, at $1.05 bil . . . JM Smucker has joined the ranks of CPG giants that are moving to strip down their portfolios, telling investors at virtual investor day yesterday that it's undertaking "reprioritization of investments in the areas of highest growth potential and exit of brands and businesses that are not consistent with the company's long-term strategic focus." The announcement came a week after co completed divestment of its Crisco cooking oil biz and said it would also divest its Natural Balance pet food biz. Among its bev activities, its grocery-oriented coffee brands like Folgers would seem to be core to its identity going forward, but portfolio also includes entries like Santa Cruz Organic juices and Numi bottled teas undertaken in partnership with Oakland, Calif-based tea co that seem more marginal to co's identity . . . A couple of years ago, publicly traded Life on Earth was on path to amass portfolio built around small bev brands like Victoria's Kitchen, Gran Nevada, Just Chill and Wild Poppy (BBI, Aug 9 and Dec 27 2018). Then it concluded that presumed synergies were too elusive, bailed out of Wild Poppy deal and said it would pivot instead to higher-growth opportunity. This week it IDed that next step: acquiring assets of unidentified enterprise cloud software co, move that's prompting cofounder/ceo Fernando Leonzo to step down. Move echoes pivot by another struggling publicly traded bevco, Long Island Iced Tea, with its move into blockchain and then tech frontiers beyond that a couple of years ago.
Laird Superfood lately has become object of fascination among bev watchers, and not just because of adept way founder Laird Hamilton, the big wave surfer, and his volleyball-star wife Gabby Reece wove together range of mushrooms and other ingredients into palate-pleasing functional powders. Its IPO in Sep came at uncommonly early development stage and thus awakened entrepreneurs to avenue of capital acquisition they might not have considered. Nor, as some wondered, was the IPO a boom-splat affair: LSF's buoyant stock performance since then seems to have aroused varying degrees of shock, envy and admiration. In trading today it boasted market capitalization of $360 mil - no mean feat for brand that reported just $19 mil in sales for first 9 mos of fiscal year. Had BevNet Live taken its accustomed perch at Loews Hotel in Santa Monica this week, no doubt that would have been mainstay conversation starter in the corridor talk alongside the new-brand coolers.
Gulpable protein marketer Protein2O has finally brought to market its first plant-based entries, even as it prepares to broaden partnership with Costco club chain after weathering pandemic-induced truncation of the sampling activity that usually is key to success in that channel. Protein2O, the brainchild of former Walgreen exec Bob Kral and his son, ex-J&H exec Robert Kral, is among leading players in new protein water segment that includes likes of Ready Nutrition and Trimino. Operating team includes former Gatorade exec Andy Horrow as prexy with strategic guidance from ex-Gatorade chief Sue Wellington. Brand doesn't release sales data but is believed to have moved well beyond 1 mil 12-unit cases by now.
It's tough gig in segment that so far hasn't met expectations, and Canopy Growth bev chief Andrew Rapsey has decided to head back to his former spot at Google's Canadian operation. In as his successor as vp for bevs and edibles: SC Johnson and Conagra vet Tara Rozalowsky, whose extensive CPG background doesn't seem to include any exposure to bevs or cannabis. Rapsey disclosed his exit via LinkedIn update that was spotted by Bloomberg, which drew statement from Canopy rep that "while we are saddened by Andrew Rapsey's decision to move back over to Google, we are grateful for the time he spent with us growing our 2.0 product portfolio and look forward to what the future holds for us under Tara's leadership." So, not much info there. Moves come as Canopy is proceeding with announced shuttering of 5 cannabis production plants across Canada, at cost of 220 jobs, and seems to have lost bev share to rival Truss, a jv between Hexo and Molson Coors, per retail data from HyFyre that was cited by Bloomberg. Constellation-aligned Canopy has seen its bev share in Canada slip to 33%, behind 35% of Truss, in $23 mil bev segment that still accounts for just 1.5% of total cannabis market north of border. As for Rozalowsky, her LinkedIn profile indicates she worked on brands like Healthy Choice, Bertolli and PF Chang's among extensive portfolio at Conagra, where she was vp/gm. "It may seem like a lot (and it is!) but each brand owns a piece of my heart," she writes.
Don't Quit, the protein shake line codeveloped with fitness guru Jake Steinfeld for whom that has been trademark phrase, is heading onto trucks of its investor Keurig Dr Pepper in LA area to gauge whether brand resonates as DSD play. KDP is picking up more protein-intensive subline called Don't Quit Max, which is intended to vie vs likes of Premier Protein and Muscle Milk, said LA Libations principal Danny Stepper, who devised the brand with Steinfeld and so far has mainly put it out as DTC play. To mark occasion, Max is getting change of attire, swapping Tetra Pak for PET bottle and relegating Steinfeld imagery to bottom of back panel, in recognition that millennials targeted at retail are less likely than boomers to be acolytes of "Body by Jake" Steinfeld. "Shrunk Jake down," as Danny put it. But trademark is being dialed up in prominence on front panel. Max is available in Vanilla and Chocolate flavors and priced in $3.49 range vs Muscle Milk and its ilk. Don't Quit Original, which vies in different segment vs Boost and Ensure, will continue as Tetra Pak DTC play that prominently plays up Jake connection for forge boomer connection. As we've reported, LA Libations has been playing avidly in protein space, separately offering plant-based entry called Orro that has won investment from Anheuser-Busch, even as it devotes most of its focus these days to helping Molson Coors build out comprehensive NA platform, including with spent-barley protein shake called Golden Wing (BBI, Sep 9). So it's got protein efforts tied to 3 major systems.
The handwriting had been on the wall for High Brew Coffee when its investor and distribution partner Dr Pepper Snapple Group merged into a company, Keurig Green Mountain, that maintained a flock of its own coffee brands. Now Austin-based cold-brewed player has quietly ended relationship, exiting KDP-owned bottling ops and reuniting with many of its prior indie houses, including likes of Lenore, Lakeshore and New Age, even as it maintains all its ties to KDP-aligned indies like Honickman Group, Polar Beverage, Columbia and Cheerwine. News comes as another coffee-inflected brand, shot play Forto, has similarly elected recently to move on as coverage and velocities sputtered under KDP aegis (BBI, Dec 2). As with Forto, the divorce is claimed to be amicable, and in both cases KDP retains its minority investment in the brand.