Beer Marketer's Insights
San Diego entrepreneur Jeff Church has quietly departed Suja Juice, the bevco he cofounded 8 years ago, and turned his attention to running Rowdy Energy, the "smarter energy drink" he cofounded with NASCAR icon Kyle Busch that launched a few weeks ago. To manage buildout of brand into multiple channels, Rowdy also has recruited pair of refugees from now-discontinued Outlaw Energy: its former vp sales Dave Martin, a Fuze and Voss Water vet who's picking up similar role at Rowdy, as we recently reported (BBI, Feb 24), and Outlaw cmo Ernie Manansala, who's consulting on marketing side. Rowdy employs green tea caffeine, electrolytes and L-theanine to offer both instant energy surge and slow release. Its Cherry Limeade and Orange Citrus flavors use sweetening blend of sugar, erythritol, monk fruit and stevia to come in below 100 calories per 18-oz can - 60% less than comparable entries, as can graphics proclaim - while Sour Green Apple and Strawberry Lemonade offer zero-sugar options.
Your Super, plant-based powder purveyor launched by youthful cancer-surviving athlete and his partner, has pulled in $10 mil Series B round led by PowerPlant Ventures. Other investors, per Forbes story, are Clif White Road, investment vehicle for Clif Bar owners Gary Erickson and Kit Crawford, and Marstar Investments. Co was founded by young tennis player named Michael Kuech who 5 years ago was diagnosed with cancer at age 24, affliction that prompted his partner Kristel de Groot to start raiding stores for maca, wheatgrass, lemongrass and other nutritious plants, advised by her orthonutritionist aunt. Eventually she arrived at 7 plant-based mixes that were organic, contain no more than 6 ingredients and eschew stevia and fillers. Tho co started in Germany, it relocated to Venice, Calif, to be closer to hot pocket of DTC demand. By now it claims to have shipped over 1 mil items and has trickled out to retailers like Erewhon around LA and Gourmet Garage in NY. Its lineup, expanded to 9 mixes now, includes Super Green Mix, Forever Beautiful, Magic Mushroom and Power Matcha, with "plant-based protein mix made with brain health-boosting superfoods" due Mar 24, as Kristel told Forbes.
In latest Nielsen all-channel data, results for bevs "were generally solid across the board, aided by consumers pantry loading in the last few weeks on COVID-19 fears," noted Dara Mohsenian of Morgan Stanley. CSD volume improved from 1.5% decline for 12 wks to get back to even past 4 wks thru Mar 7. CSD prices were up avg 2.5% last 4 wks driven by strength in KO pricing. Coca-Cola CSD volume was off 1.5% (vs -1.9% for 12 wks) with a solid avg price increase of 4.6% for 4 wks. That's just ahead of its 12-wk avg price trends. PepsiCo improved from 1.8% decline for 12 wks to 0.5% increase last 4 wks on modest avg price gain of 0.3%. PEP diet CSD volume gain doubled to +10.1% with 2.5% avg price increase in latest 4 wks. Keurig Dr Pepper CSDs were up 1.3% (up from +0.5% for 12 wks) on avg price gain of 2.1% last 4 wks. Private-label CSD volume decline was just 0.1% for 4 wks vs 2.5% decline for 12 wks. Avg prices up just 0.6%.
Canopy Growth finally is in the RTD biz. The Smiths Falls, Ontario-based cannabis giant said it shipped the first entry, Tweed Houndstooth & Soda, began shipping to provincial boards and retailers throughout Canada last Wed. Made via proprietary process to distill cannabis flower into liquid, each 355-ml can contains 2 mg of THC and below 1 mg of CBD, within sparkling water base . . . WellWell has entered 70-store Walmart innovation cluster in western states.
The marketer of Bruce Cost Ginger Ale that now goes by Brooklyn Food & Beverage has enlisted Cascadia Managing Brands to help it with distribution and sales duties. Brooklyn Food & Bev, recall, began as partnership with restaurateur and food writer Bruce Cost and noodle magnate Terry Tang for eponymous line of natural ginger ales that picked up on popular offering in his restaurants but frayed over differences in capital-raising and Cost's unwillingness to offer zero-sugar versions. So partners split and co operating out of its ginger-production facility and packaging facility in Brooklyn's Bushwick area quickly added stevia-sweetened entries under different name, Brooklyn Crafted, and has added range of Asian-derived entries like Calamansi-Ade and Moshi Yuzu Sparkling, but struggled to devise effective sales and distribution strategy, with several key employees with experience in bevs moving on over past year or two. Cascadia will fill that gap. "Brooklyn Food and Beverage's brands have been successful in every market they have entered and we are looking forward to helping them increase their sales footprint," per Cascadia prexy Bob Sipper. "In a day and age where artificial beverages and carbonated soft drinks are collapsing, Bruce Cost, Brooklyn Crafted and Moshi are growing rapidly as consumers look for great tasting, natural, alternatives."
Tho official word was that Natural Products Expo West was being postponed, few really expected it to happen, given widening spiral of coronavirus economic carnage and fact that Expo East would be coming right on heels of any postponement date. Now New Hope has made it official: it's focused instead on ratcheting up Expo East to be "world-class innovation showcase and community gathering" on level of larger Expo West, per email distributed to exhibitors and other contacts just after we went to press Fri. Expo East, of course, recently outgrew its longtime home in Baltimore and is scheduled for Philadelphia Convention Center this fall. This would be first time in 40 years that Expo West, at Anaheim (Calif) Convention Center, has been dropped. In missive, New Hope also set its established advisory committee to help decide how to disburse $5 mil fund for stranded Expo West exhibitors, "ensuring we help many of our most vulnerable and impacted community members," while also offering input on how to elevate Expo East show in Philly. Among members familiar from bev biz are Lifeway ceo Julie Smolyansky, Kuli Kuli founder/ceo Lisa Curtis, Beyond Brands and Steaz cofounder Eric Schnell and Natural Products Consulting principal Bob Burke, along with members from financial community like Andy Whitman of 2X Partners and Wayne Wu of VMG. Wayne was among those who was outspoken on social media during leadup to Expo West about need to consider suspending show and making smaller exhibitors whole (BBI, Mar 2).
Lance Collins, the entrepreneur behind Fuze, NOS, Body Armor, Core Water and Adrenaline Shoc brands, has enlisted array of indie Core Water houses to launch latest venture, Zen WTR, which is packed in bottles that are certified as being made entirely from plastic recovered from oceans. The new brand, which had tested in different packaging format under Zen Essentials trademark (BBI, Mar 12), offers vapor-distilled water at 9.5 pH using naturally sourced electrolytes from ocean minerals and potassium bicarbonite. The new brand immediately takes on presence at leading edge of efforts to move popular packaging format to more sustainable footing, certified both as being 100% Certified Ocean rPET as well as Ocean Cycle Certified, an indication that it employs ethically procured ocean plastic. As always with Collins, he's devised eye-catching pack, widemouth bottle with curved S motif reminiscent of ying yang symbol. "Every Zen WTR bottle sold helps restore our oceans and waterways," pitch that should hold particular appeal to millennial and Gen Z consumers, he indicated. Tho Collins has been key innovation ally of Keurig Dr Pepper, last year creating A Shoc energy brand as its response to Bang and Reign brands, this one is being launched independently, via past Core partners as Columbia Distributors in Pac NW, Kalil Bottling in Ariz, Varni Bros in NorCal, Lenore in San Diego and Nevada Beverage, most of whom are aligned with KDP in part of their product portfolio. So if it works, it could prove weapon for KDP to use in playing in alkaline space, tho Lance declined to go there with us. Initial retail target is Whole Foods and other natural stores. As brand ripples out to larger-format, convenience and military channels, Zen WTR also will go direct to some. He anticipates brand will find a place both in traditional bottled water sets as well as the more functionally oriented groupings led by brands like Essentia Water. Brand is going out as DTC play, too. Canned versions also will be in the mix. 
New Age Beverages has officially bagged its original strategy built around harnessing group of underdeveloped new-age bevs within agile, synergy-releasing incubation co. Saying brands like Coco Libre, Marley, Aspen Pure and Bucha Kombucha are too small and unfamiliar to consumers to be worth the attention and resources of co that's soared in size via acquisition of Noni multilevel marketing co, NBEV this morning said it's taking $44.9 mil non-cash impairment charge to write off goodwill associated with those brands and in past month has commenced outreach to see whether there are any takers. From start, it was strategy that aroused skepticism among some industry players, who questioned what synergies would arise among struggling brands with low velocity and consumer awareness. But founder/ceo Brent Willis had shown deft touch in pushing story that he had a horse in every fast-growing NA segment as way to raise capital and eventually orchestrate acquisition of big MLM player Morinda (now called Noni by New Age), transforming NBEV from operator of niche brands into $250 mil (sales) co operating in 60 countries. By now, those retail brands' share has diminished to 4% of total revenues. Net loss for Q4 widened to $65.9 mil vs year-earlier $2.6 mil loss; without impairment charge, loss would have been $21 mil. For full year, loss was $89.8 mil ($44.9 mil without charge) vs $12.1 mil loss. The shift was disclosed by Willis on earnings call this morning, reporting Q4 in which NBEV's quadrupling of revenues in Q4 still lagged Street's expectations, due in part to effect of overall $40 mil sales shortfall in China caused by crackdown there on MLM companies. (Shares have been way down, but so are most other shares in another market rout.) The other gap, Willis told investors, was in US retail biz built around collection of retail-oriented brands like Xing Tea, Aspen Pure, Marley, Coco Libre and Bucha, some of them distressed brands he'd been able to purchase for pennies on the dollar. Those smaller brands no longer are viewed as strategic "and so we are not going to invest any more in them. These small brands cost us a lot of money and a lot of cash and there's too much heavy lifting," with promising moves into 7-Eleven and Walmart sputtering out. He said New Age will continue to market the Nestea, Volvic, Evian and Illy brands. Tho co rarely makes distinction in commns to investors, those larger brands aren't owned by New Age, which just serves as agent for European owners who'd originally enlisted NY-area incubator Brands Within Reach to put them on sounder course after prior stumbles, mainly within Coke system. They came over when New Age acquired BWR last spring (BBI, Jun 3). As for BWR acquisition, which likewise had some observers scratching their heads, that too seems to have been ruled a bust, despite NBEV's ongoing commitment to the European-owned brands it brought over. BWR's founder/ceo, Olivier Sonnois, had been given role of running all of NBEV's retail biz, but in recent months his LinkedIn profile identifies him as consultant, even tho his affiliation with New Age is listed as current. We'd checked in with Olivier last month but not heard back. Perfunctory comment from Willis this morning seemed to suggest that relationship had run its course too. "We expected more execution from Walmart and 7-Eleven, and we expected more from the Brands Within Reach acquisition, and they did not deliver," he said. Willis, with AB InBev and Cott on his resume, got into game with acquisition of Bucha kombucha, then acquired New Age co built around DSD operation in Denver and collection of brands, including Xing Tea brand created by New Age's founders and Aspen Pure bottled water brand. The DSD arm continues to perform well, Willis indicated today, with successful snack, alc and NA brands, and no change is anticipated there. Last year it scored its 11th consecutive year of growth. On the sales block are both the Aspen Pure brand and its production facility. Among the agent brands, Nestea is entering some Costco regions and Walmart nationally, and "like everyone we're selling all the water we can produce." Going forward, the focus will be on the Noni by New Age business, which includes broad range of items, from juices to creams, serums and even lipstick. Noni by New Age suffered nearly 40% revenue decline in China when gov't pulled plug on MLM cos but grew by 15% in Latin America, led by Peru, +24%, and 4% in Southeast Asia including 35% gain in Indonesia. In challenging Japan market, co reversed rate of decline and launched bevy of promising products, including Noni CBD items and TeMana smoothie line geared to intermittent fasting trend. "We only sell healthy products sent directly to peoples' homes," as Brent summarized strategy that he believes should thrive even during current pandemic. With retail brands taking on lower profile, co should be viewed as building out plant-based health & wellness platforms via Noni div, healthy-appearance platform via entries called TeMana and nutritional performance, built out in part via portfolio of gov't patents that NBEV acquired a few years ago. Each, Willis believes, can get to $100 mil in sales, distributed among focus regions of N Amer, China and Japan. "Now, with our arms around what works and doesn't, we expect the business to be much less complex and more manageable," said cfo Greg Gould, noting that cash flow would have been positive last qtr were it not for the retail brands. Full Slate for New COO Vanderveen On call this morning, new coo Dave Vanderveen, a vet of DTC plays XS Energy and Amway, was asked to outline range of activities he's been undertaking. These include new NoniNewAge.com site that went live this morning with more elegant navigation and improved checkout as well as intensive training effort to get older MLM participants conversant with new messaging-based communications channels that have become key part of ecommerce. He's also presided over launch of range of products in Japan, starting with Noni CBD item that sold out 2 months' worth of inventory in a week despite need to surmount not just legal hurdles but social norms. TeMana Shape intermittent shape launched in Japan and is headed to 15 markets over 45 days, via premise of smoothie pouches with noni and kombucha that help with weight loss. It debuted in N Amer last week and sold out on first day, he reported. He's also pushing immunity items that should strike a chord with coronavirus-fearing consumers, including Enhanced Cell Defense supplement using US govt patents. Co is "working to make as much as we can as fast as we can," he said. Frustration and Promise in China China's abrupt move last year to put 100-day moratorium was driven by "bad actors" pitching supplements with cancer claims, causing some consumers to substitute those for actual medicine for their young children, Vanderveen said. Forced off the market like everyone else, New Age took a whack. "The Chinese government did this entire industry a disservice" by shutting down even the honorable players, he feels. "We weren't one of those bad actors but were all impacted by it." The coronavirus epidemic, on the other hand, has provided a lift in China not just by increasing demand for immunity-boosting items sold outside of retail but also by enticing new "distributors," as participants are called, who've been "worried about their finances," as Vanderveen put it, a factor that's also been at work in Japan and N Amer.
NOTABLE QUOTABLE: Sure Sign of Corporate Dysfunction: $103K Spent on Candles, Flowers, Topo Chico
NY Times recently offered deep dive into seeming meltdown at up-&-coming DTC fashion brand Outdoor Voices, not long ago viewed as the next Lululemon. But stresses between founder Tyler Haney and seasoned retail experts brought in to scale up (sound familiar?), discounted sales and poorly planned hq relocation from NY to Austin have created chaos, with heavy spending coming under microscope at co that lost $19 mil on $38 mil in sales in 2018, per financials leaked to paper. Telling detail: "In 2018, the company's handful of stores were spending roughly $22,000 on Maison Louis Marie No. 4 candles, $45,000 on fresh flowers and $36,000 on Topo Chico bottled water," per internal memo from last year. We're guessing it was that new Austin influence with the Topo Chico.
Big ingredient expo Supply Side East has been rescheduled from Apr 20-21 to Jun 23-24, at same venue, Meadowlands Expo Center in Secaucus, NJ, because of widening coronavirus. Organizer said it had decided to make decision early to minimize costs borne by exhibitors and participants. Info at East.SupplySideShow.com.