Beer Marketer's Insights
Long-simmering, agonizing decision to switch from refrigerated to shelf-stable status is bringing unanticipated benefit to Lemon Perfect hydration brand as newly switched on Amazon biz pops with sales to homebound coronavirus-wary consumers - so much so that LA-based co has upped the 2020 sales projection made before the pandemic was really on radar. But Lemon Perfect founder Yanni Hufnagel is balancing aggressive biz-development activities like DSD signings, new retail authorizations and sales hires with prudent retreats, notably deferral for a year of canned sparkling subline that was to debut at Expo West last month. That line now will head only to Whole Foods' Rocky Mountain region around Colo for early test during warm weather months, with formal national push now delayed a full year to next year's Expo West.
After dipping its toe in water last fall with bottled higher-caffeine entry called Uplift (BBI, Sep 4), Brew Dr Kombucha is extending concept with mango & passionfruit extension called Tropical Uplift and more overtly targeting energy drink consumers by putting both into 16-oz cans as well. Like original Uplift, new sku derives energizing lift from combo of yerba mate, guayusa and green tea to tune of 130 mg per 14-oz bottle. It just broke chainwide at Sprouts Farmers Market and will hit additional retail locations next month, per announcement from Portland, Ore, co. Idea is to offer energy drink consumers "the option of doing so with all the benefits of raw kombucha made from organic teas, botanicals and juices," per founder Matt Thomas.
After losing preferential position as so-called stalking horse bidder for Dean Foods last week, Dairy Farmers of America has won race anyway by putting in highest bid at courthouse auction today. Dairy Farmers' bid of $433 mil was slightly higher than $425 mil baseline bid it had earlier put in, tho offer will have to be approved by bankruptcy court. Justice Dept approval also will be required for deal that puts country's biggest milk processor (with 44 facilities) into hands of biggest dairy cooperative, a prospect that has spooked lotsa independent dairy farmers (BBI, Dec 18). And, as Kansas City Biz Jnl reported, Dairy Farmers will have to finalize collective bargaining agreement with several unions. As reported, last week Dean exited deal with DFA out of litigation concerns, moving to straight auction today.
"Beverage results were strong across the board, aided by consumers' pantry loading in the last couple of weeks on COVID-19 fears," wrote Dara Mohsenian of Morgan Stanley this morning. As expected, latest Nielsen scanner data is showing huge gains in bottled water segment as well as in CSDs and sports drinks, while energy segment slowed a bit for 4 wks thru Mar 21 in all-channel data.
Keurig Green Mountain move back in early 2018 to acquire Dr Pepper Snapple Group on basis of promised strategic synergies occasioned lotsa head-scratching among Wall Streeters and bev people in general, who struggled to understand logic of yoking together disparate distribution systems and product mixes. Two years later, some still don't. But on call this morning hosted by BofA Securities research team, including longtime bev analyst Bryan Spillane, Keurig Dr Pepper ceo Bob Gamgort was able to take victory lap of sorts in describing agile deployment of broad portfolio and mix of distribution systems to navigate around hard-hit areas. He cited co's "unique position because of our breadth of portfolio and routes to market." A couple of weeks ago, on last earnings call, KDP maintained its key targets for full year 2020 and today Bob said nothing has come up to cause him to change that view. Of course, that's contrast with several other food/bev giants that have backed off targets by now.
Among the many intros that didn't happen at now-canceled Expo West scheduled for earlier this month was canned shelf-stable "live seltzer" from Kombucha Town that's aggressively priced below $2, offering vibrantly tasting alternative to legions of canned sparkling waters on store shelves. It's key initiative from Bellingham, Wash, co that was early into canned kombuchas, back in 2014, has developed retail presence on both coasts and now is looking to raise capital to embark on decisive growth bout.
Dorothy Agnes Tracy - the "Dot" in Dot Foods - has passed away at age 91 in Chicago area of natural causes unrelated to current pandemic, Specialty Food Assn reported. Tracy cofounded food/bev redistributor with her husband Robert, who passed away in 2006, and "has always been the foundation and guiding light for our family and business," said Dot Foods ceo John Tracy, the 7th of her 12 children. She leaves behind all her children, 46 grandchildren, 31 great-grandchildren and a brother, SFA said.
Founders Bo and Trish Sharon have reclaimed coupla Lucky's Market stores in Colorado, following auction of 23 stores last week, per reports Fri in Supermarket News, Denver Biz Jnl and other media. All told, 10 bidding groups offered $29 mil for the stores, which headed to bankruptcy shortly after controlling shareholder Kroger soured on concept. But only 6 are continuing as going operation under Lucky's name, with employment offers going out to about 500 team members in those stores. They include units in North Boulder and Ft Collins that were acquired by group led by Sharons for $1.16 mil under name LM Acquisition Co LLC. Stores in Cleveland and Columbus, Ohio, were acquired by Dave's Market and Traverse City, Mich, store was taken by Oryana Food Cooperative. Schnucks Market is picking up store in Columbia, Mo. Recall that stores in key expansion market, Florida, were scheduled to be largely shuttered (BBI, Jan 21) before Publix stepped in with offer for 5 of them, Aldi for 6 and Southeastern Grocers for 4. A distribution center in Orlando is headed to Dollar General. The offers must be approved at final hearing set for Mar 30. Chain was founded in Colo in 2003 by the Sharons and Kroger took stake in 2016 before saying in late 2019 that it would divest it in face of its own struggles. Given chain's reputation for being welcoming to smaller innovative brands, news of closures was dose of bad news for many in bev biz.
New $170 mil venture fund that we profiled last week, Coefficient Capital, has closed on its first bev investment, and 3d one all told, as anticipated, adding further evidence to notion that deal flow is not entirely drying up even as broad portions of economy close down for now. Co principal said he's unable yet to identify target, which will make broader announcement of its full round down road. As we reported, Coefficient Capital was created by Verlinvest vet Franklin Isacson and media/tech vet Andrew Goletka with view to making $5-10 mil investments in early-stage players involved food/bev, beauty, home, wellness and pets that wish to adopt omnichannel approach (BBI, Mar 24). Its first 2 deals were in pets and food.
LifeAid Beverage, which built its FitAid brand endemically out of CrossFit and other indie gyms, has come up with a way to benefit key channel that's now shuttered because of pandemic. Under the name LifeAid Lift, the Santa Cruz, Calif-based supplement marketer has launched an ecomm program that enables current LifeAid resellers among them to receive $15 in cash for every qualifying purchase made by their members or customers, offering a perk and potentially generating some revenue while they're closed. Tho LifeAid will lose money on those transactions, the deal should further fortify its ties to founding channel where it's worked hard to maintain its cred with special products and promos while offering modest boost. "LifeAid is sold in 10,000 gyms across the US," posted cofounder Aaron Hinde. "We hope that if even half of them participate, we can help save some businesses and 'centers' for mental and physical well-being through exercise. When this is over, we're going to need our gyms." Recall that Hinde first met his cofounder Orion Melehan at an indie gym in Santa Cruz almost a decade ago. "Those are the people who got us here," Hinde told The Hustle, which pegged LifeAid revenues as motoring toward $50 mil this year. "How do we support them? . . . When we get past this, people are going to remember who did what during this time."