Beer Marketer's Insights
Boom in plant-based food/bev seems to be strongly reviving SunOpta's fortunes. Under new top-leadership team installed a year ago, Mississauga, Ontario-based ingredient and concentrate marketer rode 30% gain in Plant-Based Foods & Bevs segment to $335.9 mil in Q1 sales, up 10% vs year-earlier. Global Ingredients segment decline of 4.8% to $128.4 mil was attributed to comparison vs disposal of soy and corn businesses a year earlier; otherwise, sales would have risen 5.5%. But PBF&B soared 30.7% to $106.2 mil, reflecting robust growth in aseptic bevs, broths and ingredient extraction. Operating income jumped to $13.85 mil from $2.53 mil. A 3d unit, Fruit-Based Foods & Bevs, scored 13.7% gain to $101.4 mil. A $4.7 mil loss reflected ongoing turnaround in that unit. The amounts are all in US dollars.
Three years of grunt work have now been accomplished after Danone's acquisition of WhiteWave Foods, with processes refined, innovation engine fine-tuned and $300 mil in cost synergies delivered as it was merged with core dairy ops. Now Danone is ready to rev up integrated division by elevating it to seat on co's executive committee as unit dubbed Essential Dairy & Plant-Based biz and recruiting leading light from Coca-Cola, Shane Grant, to run it. Further, co announced yesterday, EDP will be at heart of new Plant-Based Acceleration Unit aimed at incubating emerging trends on plant-based and dairy sides within other Danone biz units and outside North America, where some of these trends are less developed so far. Francisco Camacho, who runs EDP's activities outside N Amer, has been tapped to lead that unit, while retaining his current responsibilities. He earlier had been credited with turning around co's European businesses. Among mandates of Plant-Based Acceleration Unit will be to further expand into new categories such as coffee, DairyFoods.com reported today, as well as to leverage plant-based expertise in categories outside EDP such as baby food and healthy-aging foods, and by pivoting more large brands into plant-based. The twin moves are intended to set Danone on path to more than doubling its global plant-based sales from €2 billion in 2019 to €5 billion by 2025, the co indicated. Note that, as often chronicled in BBI, another vehicle by which Danone is tapping into new trends is venture arm Danone Manifesto Ventures, which has notched investments in cutting-edge bev brands like Harmless Harvest coconut water, Kona Deep water, Forager Project and Halsa plant-based yogurts.
Westchester County, NY, home to PepsiCo headquarters, was one of hardest hit Covid-19 areas in country, with ~30,000 cases so far. So now PepsiCo, along with Mastercard, which is also based in Westchester, have launched $1 mil fund to support staff at local White Plains Hospital. Program dubbed "Westchester Strong with Healthcare Heroes" is 2-year fund to "provide immediate help" and "support its staff," per hospital announcement. Funds will also "focus on initiatives to keep patients and staff safe, including funding vital supplies," as well as supporting WP Hospital efforts to meet gov't requirements to increase capacity. "We are humbled to help White Plains Hospital provide vital resources to keep neighbors safe during COVID-19," said Jon Banner, evp global commns at soda giant and prexy of PepsiCo Foundation. "As proud members of the Westchester community for more than 50 years, our thousands of local PepsiCo employees are grateful to the hospital's staff and management for serving on the frontlines during this pandemic and keeping all of us strong."
NEW PRODUCTS: Mother Kombucha Adds Shelf-Stable Canned Sparkling Extension Priced at $1.79
Florida's Mother Kombucha is joining the flock of booch players who're adding lighter, sparkling extensions, with launch of Agua Bucha kombucha-infused sparkling water. St Petersburg brewer said 12-oz canned line was result of customer feedback it received over past 6 years and required 2 years of development work to arrive at formulation that contains only 1 g of sugar and 4 calories per can. "A proprietary process ensures that Agua Bucha is shelf-stable without pasteurization and that all nutrition is derived naturally from the kombucha itself," co said. New entry launches in Key Lime, Meyer Lemon and Grapefruit at SRP of $1.79. With assistance from Cascadia Managing Brands consultancy in NJ, new line has launched at local indie stores and DTC on Mother Kombucha website, and move into some Publix grocers is anticipated next month. It joins lighter sparkling entries from established national players like Humm to regional brands like Kombucha Town near Seattle, which just debuted Live Seltzer (BBI, Mar 30). Mother's core line, available in 8 bottled and 10 draft flavors, is claimed to be in 1,500 locations across Southeast and in NY.
Charlotte-based bottler Coca-Cola Consolidated offered latest glimpse of volatility occasioned by Covid-19, citing surge in revenues but decline in gross profit in Q1 as consumers rushed to stock up on multiserve packs but eased off on single-serve purchases. Revenue grew 6.4% to $1.17 bil, mainly thanks to case volume gain of 6.1% to 83 mil cases. That growth was balanced among sparkling and still categories thanks to Coca-Cola line extensions like Coke Energy, other innovations like Aha sparkling water and continued gains by Body Armor sports drink. "Volume growth was particularly strong in the last 3 weeks of the quarter as consumers prepared for Covid-19-related stay-at-home orders which shifted consumer buying patterns to take home multiserve packages sold in larger retail stores," COKE noted. Indeed, two-thirds of that volume growth can be attributed to demand jump in last 3 weeks of Mar. As noted, tho, the tilt in sales from single-serve to multipacks cut gross margin as did greater gains by less-profitable still items. So while the pandemic buy-in helped Q1 results, "we recognize that consumer buying patterns and demand are highly volatile in the current environment and will likely have a negative financial impact on our second quarter results and potentially impact future quarters as well," warned prexy/coo Dave Katz. Adjusting to impact of pandemic, co last month furloughed 700 employees and it's cutting capital budget, too.
As VPX Sports looks to implement switch from Anheuser-Busch beer system to PepsiCo bottling system, the Bud wholesalers have been getting rapidly changing but less-than-assuring messages about how migration will be handled. So as anticipated (BBI, Apr 30), a dozen A-B wholesalers in Calif wrote letters to PepsiCo and VPX on Fri and already heard back that their exclusivity will be honored until their rights are concluded (per Pepsi) and that they will be paid in full (per Bang reps, but not so far in writing from corporate in Florida). Recall, Bang first implied some houses might be vulnerable to termination for cause without buyout, then offered not cash but future credits on sales for its far smaller brands. Letter to PepsiCo Bevs North America ceo Kirk Tanner said "BANG may not terminate or cancel its Agreements with distributors before it pays the defined buyout amount in full." Therefore, BANG termination notice "defective," the letter said. At same time, letter noted that PepsiCo sales reps told "customers" in distribs' territories that Pepsi "will begin taking orders for BANG products on May 12." But letter requests and demands that PepsiCo "cease and desist immediately all activities of soliciting orders for BANG products in the Distributors' exclusive territories." And also "requests and demands" that PepsiCo "not sell any BANG products in the Distributors' exclusive territory until the Agreements with BANG are properly concluded and terminated."
Roar Organic May Move into Orbit of The Factory as Accelerator's First Bev Brand, per Word on Street
NY-based Roar Organic, female-tilting entry that's among crowd of naturally formulated new hydration bevs, is discussing partnership with year-old accelerator called The Factory, we hear. The Factory, based in South Bethlehem, Penn, is vehicle of managing partner Rich Thompson, former ceo of American Italian Pasta, Meow Mix and Freshpet, who's built diversified team to manage stable of partner brands, all on snack side so far: Honey Stinger stroopwaffles, Mikey's snacks, Stuffed Puffs and Pipcorn. Based in 40K-sq-ft former steel-hardening plant in one-time industrial mecca, Factory describes itself as "an accelerator and private equity partner for startup food and beverage companies . . . that launched last year with the mission of cultivating an ecosystem for entrepreneurship in the Lehigh Valley." It settled on Lehigh Valley for its location as distribution hub and base of talent centered around corporate players like PPL, Crayola and Olympus. Alliance with Roar, if it happens, would be first direct bev play, tho we recall Stinger at one time boasted bev platform. We've heard conflicting theories as to whether The Factory is negotiating outright purchase of brand or taking smaller stake in partnership with Roar founders as it usually does.
They say the devil is in the details. God, too, and we apparently got details wrong on Fri when we quoted LaDiDa founder Ariel Glazer saying he's doing God's work in bringing his new CBD-infused oatmilk lattes to consumers in a convenient way during pandemic. Ariel says he has no pretension of doing God's work; it's the grocers who're doing heroic service during pandemic. As reported, for now at least, LaDiDa is avoiding grocers in favor of ecomm-only model.
Launch of Wnder CBD brand in Feb just as pandemic was about to hit may seem like worst possible timing. But founder Tanisha Robinson, a seasoned entrepreneur who'd just come off a run as chief disruption officer at BrewDog's US operations, says it could have been worse: what if she'd launched 6-12 months ago, early enough to have moved into "high-growth mode" via meaningful infrastructure? So she's content during this plague year to navigate fledgling CBD market gingerly, building out patiently from Ohio base (as was plan at Brew Dog a few years back when it crashed on American shores from UK) via "tiny, snappy team" that includes coupla part-time sales folks, part-time supply chain specialist, part-time finance person. So far, since hitting market last Feb, Wnder has only been available in Ohio, via small DSD partner called FunBev Distributing in Columbus whose website lists other bevs like eBoost, Unwind and Mojo. This month she's planning to open up western Penn, then hit Indiana and Kentucky after that. The DTC part of biz has been booming, but overall, given the ongoing regulatory uncertainty that's sidelined major retailers and wholesalers, Robinson says she's fully prepared for a 3 to 5-year slog thru the mud.
Several fans of Star Wars: Galaxy's Edge were happy to spot cases of the theme park's "thermal detonator" replica bottles stacked at a local grocery store in Hartford, Ala, last week, per USA Today report. One fan, college student Clayton Williams, was so intrigued that he made the hour's drive to Tate's Supermarket to pick up 10 cases for him and friends. The replica cans, which are normally only sold inside the Disney theme park, were quite a deal too, selling for $6.99 per 12-pk vs $6 per bottle inside the park. No one at the supermarket knew how the replica bottles found their way into their store, noted paper.