Beer Marketer's Insights
With cannabiz slow to develop due to regulatory uncertainties and other obstacles, Colorado-based Ceria Brewing is pushing harder into burgeoning non-alc beer segment, enlisting cadre of beer houses for its non-infused non-alc beers.
What yoga studios were to coconut water brands Vita Coco and Zico, CrossFit gyms have been to FitAid functional bev brand: channel packed with ardent influencers that was not on radar of big bevcos. But FitAid marketer LifeAid Beverage said it's severing sponsorship tie to CrossFit after its founder/ceo Greg Glassman tweeted out comment on "FLOYD-19" pandemic that many regarded as tone deaf even if underlying point having to do with disproportionate impact on minorities was more nuanced. Also pulling up stakes is Reebok, decade-long partner which said it won't renew agreement that was concluding at year-end tho it will fulfill contractual obligations for rest of 2020.
5-Hour Energy may not be growing lately, but it's still proved a near-impregnable fortress to those who would challenge it in shot category, with 90% share or so. Value-priced Tweaker brand continues to make inroads while from premium end, some natural brands are trying to carve out piece of action, whether Vive and KOR on refrigerated side, Forto with coffee shots or Ethan's apple cider vinegar brand on shelf-stable side, notably with flock of energy entries that have been cracking chains like CVS (BBI, Apr 8). But another player has been quietly building up head of steam: Vitamin Energy, with promise of "energy with benefits," per its slogan. The Philadelphia-based co offers range of zero-sugar functional shots, from Focus (via BCAAs, CoQ-10 and the like) to Recovery (using CBD) with pre-workout entry on way that carries 100% daily value of vitamin D. With artificial preservatives and sweetener blend of sucralose and ace-K, Vitamin Energy makes no pretense of winning over green consumers, but thinks its layered functionality strikes a chord with core category users. It's motoring toward 10K retail doors by year-end and is just ready to start considering whether DSD can be an effective part of the strategy.
Elemental Beverage, which offers cold-brew alternative intended to retain flavor complexity of hot-brewed coffee, has cracked Whole Foods, entering 40+ locations in Northeast, even as it launches collaborations with other roasters looking to incorporate co's proprietary Snapchill technology in RTD format that can generate revenue while their cafes are closed.
RESEARCH: Fizzy Water Sparkles Even Amid Covid, CER Reports; Oppty Abounds at Value-Add End
Lots still to like in sparkling water category for several top bevcos. "Sparkling water remains an attractive category" given "growth of 10% pre-Covid disruption," while mkt share for private-label "has continued to decline" as "category aligns with consumer interest" in cutting calories. On top of that, "lack of real innovation" thus far "provides opportunity in the future," noted Brett Cooper of Consumer Edge Research. "Research trends are positive" for National Bev, PepsiCo and Coca-Cola but negative for Nestle, "with sparkling water remaining an opportunity for KDP and Monster," he noted. After difficult period, National Bev's La Croix is up again. And as we reported last week, Monster Bev is plotting forays into new categories with brands that would move outside the system of its energy-distribution partner, Coke.
Monster Seeks to Take $3-Mil Arbitration Spat with Washington State Beer Distrib to US Sup Court
Does Justice Brett Kavanaugh like energy drinks, too? We may find out, if Monster Beverage has its way. Co just filed a cert petition with US Supreme Court hoping to reverse 9th Circuit's reversal of $3 mil arbitration award it won from Wash State distrib Olympic Eagle for atty fees 5 yrs ago over Monster's termination of the distrib as it headed to Coke system. Monster seeks to have Sup Ct clarify rules over what constitutes and whether there was "evident partiality" on part of arbitrators and how that impacts whether awards can be vacated. Pretty technical stuff, but lotsa dough at stake. With current session about to end, plus pandemic and likely time extensions, "it is unclear at this point when this case would be discussed and considered for possible granting of this petition," observes Alcohol Law Review.
Mike Pengue, Nestle Waters vet who's been running emerging-brands effort at Keurig Dr Pepper for past year or 2, is exiting the co at end of month, we've heard. Tho KDP and its predecessor co Dr Pepper Snapple Group have developed impressive track record in spotting and incubating promising new brands like Body Armor and Core Water, Pengue's group doesn't seem lately to have been a hive of activity, at least not publicly, with small Limitless Coffee brand the only acquisition or investment we're aware of this year, tho there may well have been other dealmaking behind scenes we're not aware of. As reported last week, KDP ceo Bob Gamgort has expressed continued commitment to innovation despite pandemic and related economic disruption, noting that ongoing deleveraging of co supports future acquisition activity (BBI, May 27).
NY-based Treo Brands, which markets birch-water-based refresher of that name, in recent months has quietly pulled in $5 mil of growth capital and erected substantial DSD network in Northeast and Midwest. Among notable achievements: it became rare outside brand to crack Pepsi NY operation of Honickman Group, rather than entering that co's Canada Dry NY arm that more often houses outside brands but has less clout in crucial up-&-down-street channel.
Houston's 8th Wonder to Open Delta-8-Based Cannabis Dispensary & Lounge with Bayou City Hemp
Right on time. Just after our deep-dive into consumption trends and how craft brewers follow 'em last issue, Houston-based brewer and distiller 8th Wonder announced next stage of its partnership with Bayou City Hemp. They pair plan to open a series of Texas cannabis dispensaries and consumption lounges, starting in Houston.
Pilot Project the Confirmed Buyer of Former Milwaukee Brewing Facility After $8-Mil Seed Round
Step one: Logan Square. Step two: Milwaukee. Step three: the world. Small and novel brewery incubator based in Chicago's Logan Square nabe, Pilot Project is indeed the buyer of the large facility recently vacated by Milwaukee Brewing (MKE) in its namesake town. That's just as local papers reported last mo, when MKE announced that it was winding down operations there with separate deal to sell intellectual property to another unnamed local brewer (see Aug 24 issue). Pilot Project, which opened a modest brewery capable of producing only around 3,500 bbls/yr in 2019, funded the deal after an $8-mil seed round led by Chi-based InvestBev, which took a minority stake in co, aided by $500K raised from friends and family, Milwaukee Biz Journal and Chicago Tribune reported yesterday. It'll use the facility to scale up the brands it incubates, working toward much bigger plans.