Beer Marketer's Insights
Having cracked Starbucks chain in US a few months ago, Oatly now is entering 4,200 of its China stores, per CNN report. It's part of wave of plant-based items heading toward menus there, including Beyond Meat's faux-beef for roaster's lasagna offering and Omnipork for Asian noodle salads. That's market where soymilk is heavily entrenched, and "We're not going to replace soy," said Oatly ceo Toni Petersson. "I don't think we can in Asia, I don't think we should, it plays an important role. But when it comes to the new type of plant-based milk, it's us, 100%." Of course, Starbucks stores are shut down for now in US, but have reopened in China as coronavirus wave has seemed to crest. To popularize broader concept of plant-based milk, Oatly introduced new character in Hong Kong.
Addressing a vulnerability of PET plastics that are mainstay of thriving refrigerated-shot category, So Good So You has segued to new pack called BtrBtl with higher biodegradation rate, offering some assurance that even if it ends up in landfill, as many recyclable PET bottles do, its environmental footprint won't be as deep.
Virginia Legalizes CBD in Food, Bevs; Still a Confusing Patchwork, Laments Natural Products Leader
CBD bev players will soon have another state to make and sell their brands now that Virginia Gov Ralph Northam has signed legislation that approves use of cannabinoid extracts (CBD) to be in food and bev products, per report from Let's Talk Hemp. Sen Bill 918 recognizes that "industrial hemp extract . . . is a food and is subject to applicable laws and regulations," and authorizes Va Board of Agriculture & Consumer Services to adopt regs "establishing contaminant tolerances, labeling requirements and batch testing requirements." The guv signed bill last Thurs. But "presumably" this new Va law only allows for sale of products that are made and sold within state lines. So while another market for hemp-based products opens up, the US mkt remains a patchwork for producers to navigate, to lament of Dan Fabricant, prexy/ceo of Natural Products Assn trade group. "While we commend the State of Virginia for taking the initiative to regulate products, we are concerned that a patchwork of state laws could confuse consumers and fail to provide all of the necessary federal safeguards, including setting a safe level of daily consumption for CBD," he said. "Unfortunately, this is another example of the states filling a vacuum created by the federal government's inaction," he added.
Pandemic aside, it's topic that seems to have gripped attention of lotsa folks in bev biz: with PepsiCo acquisition of Rockstar Energy moving toward completion, will other shoe drop with acquisition of Bang? While we're hearing the two sides may still be scrambling to nail down comprehensive deal, machinery is in motion to move brand into at least some Pepsi territory, including Florida, Carolinas and Wisconsin, by mid-Jun. Move in Fla is less noteworthy, as VPX self-distributes everywhere in that state besides Panhandle, but other markets would require terminations of outside beer houses. VPX seemed to be setting stage for that with letters issued earlier this month to many houses warning of performance and loyalty issues (BBI, Apr 17).
For brand that does roughly one-third of its US biz in on-premise channel, coronavirus no doubt has taken a bite. But UK mixer maker Fevertree Drinks Plc still reported strong momentum exiting its 2019 fiscal year, buoyed in key US market by 15% price cut that seems to be putting premium mixers on way to becoming more of an everyday indulgence rather than special-occasion purchase, founder/ceo Tim Warrillow and his N Amer ceo Charles Gibb told investors on earnings call yesterday. While abrupt shutdown of on-premise in most markets around world has squelched momentum in that channel, consumers so far seem willing to reward themselves with nice drink at home in the evening, suggesting that boom in off-premise biz during pantry-loading phase of lockdown won't peter out as crisis continues. "Clearly, a good gin and tonic is proving a much-needed, much-deserved treat in these challenging times," Tim said. Overall, Warrillow allows Fevertree will "not be unaffected" by COVID-19, especially on-premise, but reminded listeners it will benefit from recent years' diversification of channels and regions. Currently, most markets in which co operates are enduring "total lockdown" of on-premise since mid-Mar and "there is no clarity yet on when this channel is going to reopen."
Last major event on spring calendar for non-alc bevs has been postponed. BevNet said it had pulled its BevNet Live event scheduled for NY in late Jun, given local authorities' stance that state won't be ready to reopen in Jun. It follows cancellations of other events like Beverage Forum, Natl Restaurant Assn Show and Beer Marketer's Insights spring conference, all in Chicago, and Fancy Food Show in NY.
Austin-based Nutrabolt has recruited bev vet who's held varied roles in past to augment its marketing behind C4 Energy brand. Mari Lee, who's moved thru jobs at Red Bull, Glaceau and High Brew Coffee, quietly joined co as vp for bev marketing in Mar, reporting to cmo John Hardesty. Lee, who previously went by Mari Johnson, also had 5-year run marketing Kind bars. In conversation today, Mari said she should work well in complementary role to Hardesty, whose strength is on content side even as hers lie with field marketing and retail execution. She'll remain based in Chicago, as she was while serving as cmo at Austin-based High Brew.
Following KO's Report of Big April Decline; CER Cuts Expectations Further for Range of Bevcos
After already lowering its expectations for KO, PEP, KDP and MNST, Brett Cooper of Consumer Edge research decided even more cuts to those expectations were needed after Coca-Cola reported 25% drop in April volume to date when announcing Q1 results. For Coca-Cola, "our 2020 EPS falls to $1.72 from $2.00 with our 2Q EPS estimate falling to $0.34 from $0.52," wrote Brett. In Q2, "we assume that the 25% drop in April volume quarter to date moderates over the course of the quarter and net out at a 25% decline in organic sales and a 40% drop in profits," he added. For full yr, Consumer Edge estimates KO organic sales will fall around 10% with underlying profits loss of ~11% and reported profits down ~20%. On earnings call yesterday, KO ceo James Quincey had said he expects current qtr to be most challenging this year (BBI, Apr 21).
Seeing strong performance from both its 3D and Alani energy brands at time Rockstar and possibly Bang brands will be exiting indie distributors, parent co Congo Brands has recruited seasoned DSD team to accelerate brands' so-far-deliberate buildout. Based in Louisville, Ky, 3D is 16-oz energy brand with minimalist branding that seems to have struck a chord in heartland markets, even as the more female-targeted Alani brand has ignited online and proved best-seller at GNC, its sole retail partner until this year. Soon joining mix is a CBD water brand, Spectrum, that's having its first production run in coming weeks.
As hydration play, it's taken uncommon tack of not attacking sports occasions but rather aiming to be a wellness elixir that starts the day of users engaged in far more ordinary pursuits. That hasn't stopped NY-based Hydrant Rapid Hydration Mix powder stick brand from recruiting array of impressive sports figures as supporters, including fund that includes Green Bay Packers' Aaron Rodgers and incubation unit of Philadelphia Sixers basketball team, where And1 sneaker founder Seth Berger has served as CPG Sherpa for Hydrant's founders.