Beer Marketer's Insights
Keurig Dr Pepper plugged key gap in portfolio with national distribution deal with seltzer giant Polar Beverages. KDP will plug Polar's seltzers including Seltzer'ade and SeltzerJR extensions into DSD system and bottling network, instantly giving it a major presence in fast-growing flavored sparkling water segment to which many consumers have moved after fleeing CSDs. Specific terms of franchise deal weren't disclosed. As KDP noted this morning, Polar is #3 branded flavored sparkling water in US despite being available in barely one-third of US, outdoing category's 15% $$ growth in Q2 with +27% performance. Polar, which has long been a major bottling partner of KDP, will continue to make and distribute its sparkling water in existing territories, as will "select" Polar distributors, KDP said. KDP took modest step into category early this year with pickup of Limitless early-stage canned sparkling brand (BBI, Jan 23) but Polar immediately explodes presence.
Keurig Dr Pepper scored another strong quarter in face of pandemic headwinds, all while stoking engine for future growth via partnership to distribute Polar Seltzers, seed investment in new RTD protein play called Don't Quit and flock of new and enhanced Keurig brewing systems. Net sales edged up 1.8% to $2.86 bil as co rode growth of Dr Pepper and Canada Dry CSDs, Core and Evian waters, Snapple juice drinks (but not teas), Adrenaline Shoc energy drinks, and Clamato and Motts juices. Single-serve pods made by KDP under its own and other brands soared nearly 15% in IRI-tracked channels, maintaining 82% $$ share. On innovation side co generated incremental growth from items like Dr Pepper & Cream Soda, Canada Dry Bold and Snapple Lemonade. Adjusted operating income rose 10.4% to $775 mil. Incremental costs, including enhanced pay for frontline workers, exacted $75 mil cost in qtr. In interesting stat offered by chmn/ceo Bob Gamgort on investor call this morning, some 10% of KDP's sales now derive from ecomm, with expertise developed across Keurig platform now extending to cold-side brands like Bai, Core, Motts and Dr Pepper. Indeed, system was robust enough that when some retailers had difficulty fulfilling orders for Keurig machines off their own online platforms, KDP stepped in to ship the models itself.
Taking first step toward addressing burgeoning sustainability issue in water, Stratus Group's Perfect Hydration alkaline water brand is prepping 16-oz can for Dec launch. Deeply blue-hued pack, among just a handful of canned options in alkaline segment, will go out at $1.29-1.49 and be available in stackable 12- and 24-packs for retail displays. But LA-based co made it clear that's just first step, with co currently evaluating recycled plastics options as it seeks to meet deadline it's set of having 100% rPET bottles in market by next year's first qtr. It currently uses BPA-free, 100% recyclable PET-1 packs . . . LA-based Marquis has soured on phrase "organic energy" as not adequately capturing its energizing plant-based blend of yerba mate, green coffee and green tea. So it's revamped its cans to drop that phrase and prominently spell out those specific ingredients. "Our strategy was shaped by the overwhelming responses we were getting from our entire channel—from our distributors and sales team, to our customers and social following," said ceo Christopher Lai, who cofounded brand with Danny Huang in 2010. "They were telling us they loved our beverages, first and foremost, because of our one-of-a-kind plant-based caffeine blend. It is fortified with antioxidants and vitamins, and they appreciated all the nutritional benefits as opposed to drinking a traditional energy drink or cup of coffee. So, we capitalized on their feedback and updated our core messaging and packaging to reflect that." Co sez brand is available in 36 states at retailers like Whole Foods, Target and Shaw's . . . Kombucha maker Aqua ViTea has undertaken reskinning of its bottles and cans that affixes "Verified Alcohol Extracted" seal to herald co's efforts, via spinning cone column, to insure that its non-alcoholic bevs are compliant. The labels also will play up the brand's distinctive hand-illustrated graphics, which sometimes become collector's items among aficionados.
Launch of MiO Liquid Water Enhancer in 2011 made big splash, taken as sign that even giant CPG cos occasionally can come up with meaningful innovation. But for past few years, Kraft Heinz brand has kept low profile, fending off private-label incursions but hanging onto close to half the category with help of extensions into caffeinated, electrolyte and vitamin offerings. Now, MediaPost reports, it's heading back onto TV airwaves for first time in 6 years, with 30-second spot that lets parched consumers know that "We fix water."
Molson Coors added "Beverages" to its corporate name last fall to reflect its broadening ambitions beyond beer (BBI, Oct 30). New Age Beverages Corp is taking "Beverages" away with similar goal in mind. On heels of acquisitions of a flock of primarily non-bev ecomm and nutrition plays, Denver-based co assembled by ceo Brent Willis is simplifying name to simply NewAge Inc. "to reflect the strategic priorities of the business and to be representative of the significant opportunities it sees in the broader consumer products goods arena," co announced today. "Although NewAge remains committed to the beverage category in all channels, and beverages still represent almost 50% of the company's portfolio, NewAge sees significant opportunities in the broader consumer goods landscape, leveraging its unique omnichannel route to market, and, in particular, its significant direct and e-commerce presence in major markets around the world." Recall that co originally was rollup of indie RTD brands like Xingtea, CocoLibre, Marley and Aspen Pure before acquisition of Morinda decisively tilted co in direction of multilevel marketing of noni-based supplements, some of them in bev form. Since then, Willis has declared that those RTD brands are too small and has undertaken assessment of their future role. Acquisition of incubator Brands Within Reach also brought in flock of bigger client brands like Volvic, Evian and Nestea.
Starbucks' guardedly upbeat outlook now that its stores have largely reopened was enough to offset 40% plunge in same-store sales in its 3d qtr, prompting 4% surge in trading entering mid-afternoon. Net revenues in Q3 declined 38.1% to $4.22 bil, with Covid-19 blamed for $3.1 bil in lost sales as stores closed or curtailed hours and downtown business areas emptied out. Operating loss came to $703.9 mil, reversing $1.12 bil gain a year ago. In core Americas segment, revenues dropped 40% to $2.8 bil. While store traffic plunged, register rings rose, in part because of more group orders by sequestered families and other groups making pickups at suburban drive-thrus. So 53% plunge in transactions in Americas region was partly offset by 27% increase in avg ticket, moderating same-store sales decline to -41%. Operating income swung to $404.9 mil loss from $1.02 bil gain.
A heckuva lot happened in the first half of 2020. Unpack the most important stories and understand how the US beer biz navigated these wild times - and the role that non-alcoholic brands can play in generating consistent growth - during Beer & Beyond at the Half 2020. On Aug 12, join this mid-year review webinar from Beer Marketer's Insights to dig into key metrics and crucial developments in US beer, presented by Benj Steinman. You'll also get a timely update on the innovations and opportunities in NA bevs from Gerry Khermouch, editor of Beverage Business Insights. Listen as Benj and Gerry discuss the increasing overlap between the beer and beverage worlds and pose your own questions to these experts. All in an action-packed 90 minutes, Wed 8/12 at 1pm ET, for just $200 per attendee. Sign up your whole team and save: multiple-registrant discounts available. Get
Kombucha Town has gotten its anticipated Live Seltzer extension to market, harnessing proprietary blend of Seattle-area co's organic raw kombucha cultures, fresh-pressed hero ingredients, water from North Cascade Mountains and carbonation. As anticipated (BBI, Mar 30), canned line is going out at aggressive $1.29-1.79 per 12-oz can, in Ginger Energy (with Ceylon black tea base), Grapefruit Clarity (white tea) and Cucumber Focus (green jasmine tea), offering value-added twist on popular canned flavored seltzers. Kombucha Town, located in Bellingham, was one of first in segment to commit to cans, employing 16-oz packs for core line . . . "Now you can have your coffee and eat it too." That's come-on new partners Dunkin' and Post Consumer Brands have cooked up to flag collaboration on coffee-flavored cereal line hitting nation's store shelves next month. Two new Post-branded cereals in Dunkin' Caramel Macchiato and Mocha Latte flavors employ Dunkin' coffee (and modest amount of caffeine) so consumers who already start their days with Dunkin' have "another way to experience their favorite flavors," per Dunkin's vp retail biz development, Brian Gilbert. Post Dunkin' Caramel Macchiato cereal contains crunchy cereal pieces and caramel-swirled marshmallows, while Mocha Latte cereal features hint of chocolate and latte-swirled marshmallows. Nutrition info at dunkincereal.com doesn't specify caffeine content, but it's claimed to come in at about one-tenth of a regular cuppa joe.
Brooklyn-based coffee roaster Café Grumpy, which by now has expanded to 11 retail locations around NY and one in Coral Gables, Fla, has made its move into RTD space with launch of unsweetened cold-brew in 11-oz shelf-stable cartons. New line, using Arabica beans from Huila, Colombia, is made from beans that are roasted on vintage Probat machine at co's Greenpoint plant and that match flavor of in-store cold-brews. It's out in singles and 4-pks, which are listed at $15 on cafegrumpy.com, targeting Grumpy's own locations and Whole Foods and other retailers throughout Northeast region. They join cold-brew concentrate offered in 32-oz multiserve bottles by co recognized by Whole Foods as vendor of year for Northeast region in 2019.
PepsiCo will become exclusive supplier of soft drinks, sports drinks, energy drinks, juices and salty snacks for Philadelphia Eagles games at Lincoln Financial Field, team announced yesterday. New 7-year deal also gives PEP "naming rights to HeadHouse Plaza at Lincoln Financial Field, transforming the space into the newly named Pepsi Plaza" that will serve as interactive hub for fans on game days, per announcement. This deal ends 8-yr run for Coca-Cola with Eagles, after Coke swooped in and ended PEP's 23-yr run as exclusive supplier at nearby Wells Fargo Center for Flyers and Sixers games, reminded PhillyVoice. "Since 1909, Pepsi has been part of the Pennsylvania community - we have a core engaged fan base and strong share in the Philadelphia market, and we are driven by a desire to connect locally with our consumers and communities. There is no better way to do this than through a renewed strategic partnership with the Eagles," said Richard Tompkins, prexy North-Division of PBNA. Of course PEP also boasts one of its stronger indie distributors, Honickman, in area.