Beer Marketer's Insights
BEV DROPLETS: LA Distributing Adds Alc License; Ugly Water Sells Out Marshmallow Flavor in 4 Days
LA Distributing is broadening its reach to include beer and distilled spirits, with license now in hand and search on for premium brands that complement NA offerings . . . Ugly Water said its limited-time Marshmallow flavor sold out in 4 days, with inventories reserved in first 2 days for regular customers given code to unlock product page, then rest depleted 2 days later. That's one of odder sparkling water flavors we've encountered (BBI, Jul 17).
Roar Organic cmo Eric Berniker has resigned, at time co is rumored to be proceeding toward potential sale to incubation group called The Factory. Bernie, as he's called, has enjoyed career that took him among several successfully exited food/bev brands including Vitaminwater, Pirate's Booty and Core Water before landing in Feb 2019 at ambitious hydration play, whose positioning he took in women-empowerment direction (BBI, Aug 19). But co run by Roly Nesi has struggled to ignite while depleting capital, resulting in what we'd heard was move to sell all or portion of co to The Factory (BBI, May 5). In brief call, Eric confirmed that he'd resigned post but said he wasn't allowed to discuss other co developments. He's taking time off this summer before deciding on next step . . . CANarchy prexy/coo Matt Fraser is among 4 new board members at Slang Worldwide, publicly traded "leading global cannabis consumer packaged goods company," per press release posted on Yahoo Finance. As our sibling newsletter Craft Brew News recalled, Matt had acknowledged in May 2019 that CANarchy "absolutely will" play in cannabis space "if the time is right" and had met with various THC and CBD mfrs while watching space "very closely." So maybe Slang is another step toward devising CANarchy's cannabis play. Co currently plays in edibles, vapes, tablets, its ambitions reflected in heavy investment spend that left it with $200.3 mil (Canadian) net loss in 2019 on sales of just $25.5 mil. CANarchy, of course, is holding co that includes such craft brewers as Oskar Blues and Cigar City.
Just weeks after its Gerber unit offered pouched line of fruit-infused waters targeting toddlers, Nestle's Nestle Waters North America unit is making its own bid to offer America's youth an appealing alternative to plain water with unsweetened Nestle Pure Life Fruity Water. Among its claims to distinction, new brand is first Tetra Pak carton in US to sport a paper rather than plastic straw.
Last Nov, the week before Thanksgiving, Red Bull North America approved 2020 biz plan of a Texas distributor, KC Distributing, that involved constructing new warehouse and making other major investments by co it said it regarded as long-term partner. By Feb 13, however, RBNA had moved to terminate that partner of 22 years, just weeks after learning that owner Kelly Clymer's son Taylor, who was anticipated to take over biz in future, had been diagnosed with lymphoma. That's lurid tale KC is spinning in suit unfolding in district court in Dallas in which house has leveled charges of fraud, restraint of trade and tortious interference in seeking $30 mil in damages, despite notoriously tough contract that allows Red Bull North America to terminate houses at will, without buyout. Along the way, KC suit makes case that Red Bull has operated in unpredictable, inconsistent and sometimes wantonly cruel ways to distributor it repeatedly praised as trusted long-term partner. "Beyond comprehension and compassion and on information and belief, Red Bull discriminated against and penalized KC when Taylor was diagnosed with cancer and undergoing chemotherapy," per suit. It was filed Jun 10 but has only lately come to our attention. It bears emphasizing that this is KC Distributing's account of relationship, and much of it may be challenged by RBNA as case proceeds.
Private-equity shop VMG Partners has promoted 4 staffers to partner, including cfo Angad Hira and vp Jon Marshall, who sits on boards of Humm Kombucha, Ancient Nutrition and Velocity Snack Brands. Also getting nod at SF-based investment firm are Alisa Williams and vp McConnell Smith. VMG's other holdings include Spindrift, Nutpods, Stone Brewing and Ilegal Mezcal.
Sparkling flavored water category continued to rack up big gains, with volume soaring 19% (nearly matching 20.7% pace of 12-wk period) with an avg price gain of 3.3% for 4 wks thru Jul 11 in Nielsen all-channel data reported by Goldman Sachs' Bonnie Herzog. The top 2 brands continued to outperform. Talking Rain (Sparkling Ice) rolled to 24.8% gain (matching 12 wk increase) with 3.5% avg price hike, while National Beverage's La Croix soared 24.4% (up from +21% for 12 wks) on modest 0.9% price decrease last 4 wks. PEP's Bubly volume gain decelerated to +11.5% (down from +26% for 12 wks) tho it did enjoy solid 7.9% avg price gain for the 4 wks. Bubly volume still up 69% for 52 wks. Coca-Cola's Aha volume gain eased a bit, but still up whopping 52.4% (vs +82% for 12 wks) with avg price hike that was double PEP at +15.9% for 4 wks. This is newest entrant in flavored sparkling water sweepstakes, keep in mind, so it started off zero base early this year. Another double-digit gainer was Polar Corp, up 27% (up from +22% for 12 wks) on avg price decrease of 2.8% last 4 wks. Nestle and Keurig Dr Pepper continued to miss out on party. Both posted solid pricing but both took volume hit last 4 wks. Nestle volume off 19% with hefty 13.6% price jump while KDP down 18% on 7.5% avg price increase. Unaligned Spindrift brand more than doubled (+111%) with 6% avg price cut last 4 wks.
It's still early days for hard-kombucha segment, but the investments keep pouring in. Flying Embers marketer Fermented Sciences has just nailed $10 mil in new funding, adding to $25 mil already brought in during Series B round, founder Bill Moses told us. The new tranche was led by investment vehicles of ABI investor Santo Domingo Group, advised by Quadrant Capital Advisors, and included participation from prior Embers investors Ecosystem Integrity Fund, PowerPlant Ventures (fund created by Zico Coconut Water founder Mark Rampolla) and others. Given Santo Domingo and Quadrant's ties to ABI, their participation comprises "big validation" of concept, Bill said, and Quadrant is placing Ben Brooksby on Fermentation Sciences board. The raise was managed by Whipstitch Capital, whose principals had worked with Moses at his prior venture, KeVita, which exited to PepsiCo.
Joywell Foods, which is harnessing exotic fruits and fermentation tech to build portfolio of protein sweeteners starting with miraculin, has concluded $6.9 mil Series A financing round led by Kraft Heinz venture fund Evolv Ventures. Also participating were Khosla Ventures and SOSV, who'd participated in seed round, and Alumni Ventures Group, bringing total capital raised to date to $13.2 mil, co announced yesterday. "These funds bring us one step closer to our vision of eliminating the prevalence of sugar in our diet," said ceo Karen Huh, who left tech investing to spend a decade at Starbucks (including involvement in its acquisition of Evolution Fresh cold-pressed juice co) before moving to category disruptor Bulletproof Coffee and then co now called Joywell.
The core issue already is a biggie: how do indie soft drink bottlers defend their franchise territories vs growing incursion of online sales? But lawsuit by Admiral Beverage vs PepsiCo that's been unfolding in US District Court in Wyoming this month weaves in web of even more explosive allegations vs core supplier, arguing that flailing bevco that's been steadily losing ground to Coca-Cola has descended to "extortion" in tying the availability of its Rockstar and Bang Energy brands to bottlers' willingness to sign ecomm agreement signing away their control within their territories of burgeoning channel.
We'd reported in Jun that KeVita, Veev Spirits and Soylent vet Bryan Crowley was serving as entrepreneur Lance Collins' right-hand man on Zen WTR launch (BBI, Jun 18). Turns out, per announcement today, that Crowley has been given ceo post. "Bryan's excellent track record leading both startup and legacy food and beverage brands, along with his passion and experience bringing sustainable brands to market, aligns perfectly with our vision for disrupting the $20 billion bottled water category," per Lance in announcement . . . Smashburger has aligned with Coffee Bean & Tea Leaf for its 300+ stores operating in 36 states and 8 countries, setting suite of menu items that includes Cold Brew at $3.49 and up, Vanilla Cold Brew Latte ($3.69) and Coffee Shakes ($5.99) that blend the cold-brew coffee with Haagen-Dazs ice cream . . . San Antonio-based Beverage USA Holdings said it's acquired Texas-based Nerd Focus brand of mental acuity bevs ("the original think drink"), which has grown to $1 mil in sales since launching 4 years ago. Launched as energy drink a decade ago by Univ of Texas student who was in process of applying to med school (BBI, Apr 22 2010), brand evolved to Nerd Focus 4 years ago by harnessing such ingredients as Alpha-GPC, Huperzine-A, Gaba, DMAE and gingko biloba. Bev USA plans to enter Las Vegas market by year-end while seeking alliances in esports & gaming, extreme sports and entertainment.