Beer Marketer's Insights
A year ago we'd offered profile taken from Beverage Digest presentation of the vaguely named Certified Management Group, which is a street-savvy operator that's staked out a key position getting brands like Coca-Cola, Nestle Pure Life and OWYN protein shakes into the nooks & crannies of 300K independently owned foodservice venues (BBI, Jan 8 2019). Now CMG confirms it's been acquired without fanfare by Advantage Solutions, the big CPG sales & marketing agency that represents $80 bil in US sales from a roster of 3,500 CPG clients supplying 200K retail clients. Tho neither co announced the deal, CMG prexy/chmn Hal Kravitz confirmed the transaction yesterday evening after being approached by BBI, saying CMG is continuing to operate independently out of Glendale, Calif, with him and coo Pete Slauer at the helm, while gaining access to Advantage's complementary suites of services in areas like sales agency and marketing agency activities and digital technology.
At a time the struggles of specialty grocers like Fairway, Lucky's Market and Earth Fare have highlighted challenge of maintaining modicum of differentiation vs conventional grocers who're embellishing their offerings, the passing of Trader Joe's founder Joe Coulombe at the age of 89 in Pasadena, Calif, offers example of unique, still-vibrant concept that came out of similar competitive pressures. The San Diego native had forged career in retail biz, helping Rexall drugstore operator open first 6 units of c-store chain called Pronto Markets in SoCal only to see parent sour on concept and order him to close it, per accounts in NY Times and other outlets. Instead, he borrowed money to purchase it, and grew it to 18 units when 7-Eleven chain began concerted move into area. "They were so huge, I decided I'd better get the hell out of convenience-store retailing," he told local paper in 1987, the year before he retired. As Times noted, he figured he'd build new concept on basis of mishmash of insights he'd gleaned, such as greater sophistication of Americans once Boeing's new 747 plane started carrying them on more int'l flights, and penchant for educated people to drink more. Result was Trader Joe's, right down to cheerful employees attired in Hawaiian shirts. First unit opened in Pasadena in 1967 and private-label brand came along 5 years later. "We deliberately pursued a policy of discontinuity, as opposed to, say, Coca-Cola, which is in infinite supply," Coulombe recalled to LA Times in 2011. "For example, we had the only vintage-dated, field-specific canned corn in existence, and it was the best damned canned corn there was. But there was only so much produced every year, and when you're out, you're out." Rather than being a liability that necessity stoked what's referred today as shoppers' treasure-hunt mentality.
So the show will not be going on. Essentially at 11th hour, with many exhibitors and attendees already on the ground in Anaheim, Calif, Natural Products Expo West sponsor New Hope Network made difficult decision to postpone the innovation extravaganza, after an outcry from smaller brands protesting that they essentially had been placed in a your-money-or-your-life quandary, forced to weigh the massive financial commitment against the welfare of their employees. By this weekend, most large companies had announced they were pulling out, and most major retailers had indicated they were withdrawing their buying parties, meaning the show looked to be dominated by smaller companies that couldn't easily absorb the cost of withdrawing, along with indie retailers. As rhetoric grew more heated, with some longtime natural food vets even calling for establishment of a competing show, New Hope said yesterday evening it would seek to host a makeup show before summer, in Anaheim or an alternative site, with an announcement by Apr. It's setting up a $5 mil rebate fund "with particular focus on the many entrepreneurs and small businesses who are the heartbeat of this community." It also would seek to deliver this Sep a "much-enhanced" Expo East, which was already getting upgrade via move to Philadelphia from Baltimore.
BEVNET LIVE: Wired-In Investor Ricks Recounts Strategic Triumphs, and One Educational Misfire
As an operator/entrepreneur, Tyler Ricks has "seen a lot of shit," as he was quick to tell his audience at BevNet Live conference in Santa Monica, Calif, in Dec. He's held roles at diverse company's like toymaker Fisher-Price, Plum Organics, PepsiCo, Peet's, Einstein Bagels, Noah's NY Bagels, snack maker Bear Naked, and was a founder of Yumnuts. He's been past or current board member for Kitu Life Super Coffee, Joyride Coffee, Farmhouse Culture, Mighty Leaf, Cicis beyond pizza, Wholesome sugar, Coastal Sunbelt Produce, Idaho Pacific and Yasso cookie dough. He serves as an operating partner at 200-year-old Continental Grain Co, whose direct investments have included Joyride Coffee (BBI, Oct 25 18), as well as managing investments of himself and his wife via entity called Arlon Investments, which has been involved with Evol, KeVita, WTRMLN WTR, Flying Embers hard kombucha, Kitu Life Super Coffee, shot maker Vive Organic, Spindrift, restorative brew Sufferfest Beer, Yasso, Dang, REDD, Ancient Nutrition, I and Love and You, Wilde chips and Sweet Earth. (Exhausted yet?) Oh, and "we love partnerships," to tune of 9-figure investment with JAB in coffee space and alliance with Boulder Food Group.
Honest Tea cofounder Seth Goldman, who's made a splash and a ton of money in recent years pitching the Beyond Burger as investor and executive chmn, now is in the restaurant biz. He's looking to build broader base of sustainable, plant-based nutrition by joining a new venture dubbed Eat the Change with title of chief change agent. (They're also calling him a founder, tho effort already has been under way.) Eat the Change is not a reference to café tip jars, but to plant-based eatery chain called PLNT Burger along with grant-conferring arm targeting non-profits "that educate and inspire consumers to make climate-conscious choices with their diet." It will start by disbursing $1 mil over next 3 years, with details anticipated on Apr 1, per outline at EatTheChange.org website. EatTheChange.com website makes clear there will be other businesses emanating from Eat the Change beyond the PLNT Burger chain.
Natural Products Expo West is a massive show that dominates the winter/spring food/bev calendar, with no other expos in coming months that might serve as a meaningful fallback for exhibitors and buyers to connect. But the ranks of retailers and exhibitors canceling their participation at Expo this week appeared to be accelerating thru the weekend, and pressure was mounting for sponsor New Hope Network either to cancel the show or at least to offer full refunds or credits toward next year to smaller exhibitors who're being forced to weigh their employees' well-being against the big financial commitment their participation in Expo represents. Among nightmare scenarios some were sketching as they pulled out was massive quarantine of Expo visitors at convention center or Anaheim hotels should coronavirus outbreak rear its head locally.
Next week at Natural Products Expo West in Anaheim, Calif, staffers at granola maker Wildway Products will be wearing t-shirts that declare on the back: "Warning: Wildway Products DO NOT Contain: CBD. Cauliflower. Oat milk. Ketogenic sweeteners. Collagen. Probiotics. Adaptogens. Meat that's not meat. Still interested? Tap me on the shoulder and let's talk."
Mash juice drink brand has long claimed one of the most distinctive bottles in bev biz, a wide-barrel PET pack with nubby texture, tho its owner Boylan Bottling is first to admit it's not done a lot to exploit that appeal. But that's beginning to change, and co is taking big step this May by downsizing pack from 20-oz to 16-oz while retaining that distinct look. The move will get calorie count down from 100 to 80, appealing more to portion-control crowd, even as it eases brand into the 20-oz glide racks that dominate at c-stores, a key channel where Mash has historically struggled, as sales vp Chase Slepak explained to us today. (Current pack fits 1-liter glide rack footprint.) Throw in a further change from 15-unit cardboard boxes to 12-unit tray-&-shrinkwrap carrier that allows clear bottle and brilliantly colored liquid to shine, and co finally will be able to step up enlistment of DSD partners and c-store accts, Chase believes. The actual liquid, augmented last year by well-received Pineapple Coconut and Watermelon Lemon Lime flavors, isn't changing at all, he emphasized. Nor is $1.99 SRP, promo'd at 2 for $3. Among other actions, Mash brand will finally get website and active social media presence. In key NY market, its distribution partner Big Geyser will be experimenting with Mash-branded coolers. With minimal DSD presence outside NY as co groped toward strategy, the time finally will be right to enlist distribution partners around country, including from ranks of 100+ partners of Boylan brand itself. This for brightly flavored brand that, even with minimal support, has been able over the years to cultivate uncommonly broad demo across varied geographies and channels, from Vietnamese-sandwich shops to corporate cafeterias.
POLICY: FDA's Hahn Not Ready with Guidance Yet, but Allows CBD Prohibition Would Be 'Fool's Errand'
The hoped-for guidance on CBD from the FDA that some had anticipated for late this month has not materialized. But some in the cannabiz are taking heart from remark made Wed by recently named FDA commissioner Stephen Hahn. Speaking to Natl Assn of State Depts of Agriculture Winter Policy Meeting outside Washington, DC, Dr Hahn said, "we're not going to be able to say you can't use these products. It's a fool's errand to even approach that. We have to be open to the fact that there might be some value to these products, and certainly Americans think that's the case. But we want to get them information to make the right decisions." He said the agency is working to move forward with regs but didn't offer a specific timeframe, meaning the industry will remain in limbo for a while longer.
At buoyant Molson Coors distributor meeting in Houston earlier this week, innovation was key theme, and for once non-alc activities got more than a smidgen of attention. That forthcoming "ton of innovation," in phrase of emerging growth prexy Pete Marino, includes brands from Clearly Kombucha to botanical water, as brewing giant tries to deliver on new corporate name of Molson Coors Beverage Co. Some of new stuff was product of recently struck alliance with incubator LA Libations while some was internally developed. Libations cofounder Danny Stepper told us he was "literally mobbed" after presentation by distributors thirsty for some of NA items he and Pete had pitched. (More info on those items in upcoming BBI issues.) Tenor of meeting was striking, coming as substantial turnaround from wholesalers' skepticism about direction not so long ago.

