Carbonated soft drink sales edged up 0.2% over 4 wks thru Aug 30, per Nielsen all-outlet data reported by Bonnie Herzog of Wells Fargo Securities. CSD volume sagged 1.9% but avg price gain of 2.1% for the 4 wks lifted category $$ sales to 2d monthly increase in row following declines each 4-wk period for previous year. "We are encouraged by ongoing positive growth in CSDs, led largely by KO," said Bonnie. Regular CSD volume edged up 0.7% despite avg 2.2% price increase while diet sodas fell 7.1% (generally in line with 12-wk trend) on avg 1.8% price gain.

As we noted last month, Coca-Cola CSDs appeared to be getting lift from "Share a Coke Campaign," and that momentum continued in Aug as volume increased 2.4% vs 0.6% increase over last 12 wks. KO CSD prices were up 1.4% for both the 4- and 12-wk periods. PepsiCo CSDs, however, couldn't string back-to-back volume gains and were off 4.9% last 4 wks following gain of 0.8% previous 4 wks thru Aug 2. PEP CSD prices were flat previous month, however, and swung to +3.2% in Aug, largest price gain among Big 3 suppliers. Dr Pepper Snapple CSD volume was off 2% (vs -1.4% last 12 wks) on avg price increase of 1% last 4 wks. Co's core Dr Pepper brand "posted declining sales" and, Bonnie noted, "We remain concerned about the ongoing deterioration of DPS's CSD business." Private-label volume improved to -5.2% last 4 wks vs 7.6% decline last 12 wks as avg prices went lower to -2.1% last 4 wks.

Energy Drinks Post Another Month of Double-Digit Gains; KO Brands Up Big Energy drink volume surged 11.3% in all-outlet data last 4 wks thru Aug 30, uptick from 9.5% gain for previous 4 wks and about half a percent higher than 12-wk gain pace. Prices in energy category were down slightly (-0.3%) last 4 wks, matching category avg for 12 wks. Monster volume gains still solid but decelerated a bit to +10.3% last 4 wks vs gains of 10.8% last 12 wks and +13.8% for 52 wks. Monster prices were up avg 1.8% last 4 wks vs flat pricing for Red Bull and steep 4.7% price drop for Rockstar. Red Bull volume rose 7.1% (up from 5.6% gain for 12 wks) while Rockstar picked up 11.7% (vs 9% gain for 12 wks). Coca-Cola energy portfolio (NOS, Full Throttle) are performing well as co works towards finishing deal to transition those brands to MNST. KO energy brands gained 17.6% with solid 9.6% avg price increase last 4 wks in all-outlet data. PEP energy brands up double-digits, too, jumping 24% with boost from avg price drop of 6.6%.

Higher Prices Sap PowerAde Sports drinks bounced back in Aug with 0.7% volume gain for 4 wks thru Aug 30 following 2.3% decline previous month. Avg prices were up 2.5%, led by Coca-Cola's PowerAde with solid 6.4% increase while prices for PEP's Gatorade were down slightly (-0.1%). Solid price gain for PowerAde slowed volume even further to -10.6% vs 6.3% decrease previous 12 wks, while Gatorade volume was up 5.7% vs +1.2% avg for 12 wks.

Water Volume Up; Pricing Improves Bottled water volume gains accelerated to +6.7% last 4 wks in all-outlet data (up from +4.8% previous 12 wk) even as avg prices improved to -1.3% in latest month vs 2.3% drop previous 12 wks. Nestle volume up 9.4% on avg 5% price dip, while KO water brands jumped 13.7% (up from 9.6% gain for 12 wks) on 4.4% price drop. PEP water volume improved from flat trend over previous 12 wks to 2.2% gain on avg 5.1% price drop last 4 wks. Private-label water volume doubled to +10.8% last 4 wks with avg price off just 0.9% last 4 wks. The still flavored water category saw volume grow 3.5% while sparkling water brands gained 13.3% last 4 wks. (That's segment where surging brands like Sparkling Ice and Cascade Ice play.)  

Promos may have been relatively restrained in c-stores (above) but some aggressive pricing has been popping up around country in other countries in Labor Day timeframe. Reader sent BBI pic from Kroger store in Cincinnati depicting diverse array of purportedly premium new-age brands from Coke at 69 cents each to card holders who mix and match 10 of 'em: 32-oz Powerade and Powerade Zero, 20-oz Vitaminwater and Vitaminwater Zero, 17-oz Fruitwater, 17-oz Honest Tea and, unusually, even 700-ml Smartwater, not so often seen in discount bin. Those who buy fewer than 10 pay still-low $1 apiece . . . Target chain last week featured 20-oz Vitaminwater and 700-ml Smartwater at $1 apiece, as well as 10 for $10s on core 17-oz Sparkling Ice bottle and, more unusually, on 16-oz Rockstar can.  

After garnering strong response to coconut water-based item, Reed's is continuing with its hybridization of kombucha segment, now adding organic-coffee-based member of Culture Club Kombucha line. While kombucha traditionally employs fermented oolong or yerba mate tea base, for this entry Reed's grew the culture in coffee base. LA-based co said it will unveil new entry at Natural Products Expo East in Baltimore next week.  

Onetime Voss Water ceo Philippe Roederer has returned to NA bevs from detour into spirits sector to take flier on HPP brand that plays in both realms: bottled-fresh mixer line called Ripe Craft Bar Juice. Philippe quietly stepped into prexy role of parent co Freshbev Craft Juicery in mid-Jul, working with New Haven, Conn-based cofounders Michel Boissy and Ryan Guimond to roll out HPP-juice concept to area where it's likely to find highly receptive audience: upscale cocktails that have gravitated to natural, fresh ingredients as their alcoholic bases have moved progressively artisanal. Premise is to offer easy way for high-volume bar accounts and home enthusiasts to make the same cocktails that mixologists hand-craft from fresh ingredients, as well as high-quality accessory for major liquor houses' sampling efforts.

Line has been in market over 4 years now, forging strong presence in home Conn market, both on-premise at hi-volume bars like Bar brewpub and pizza chain in New Haven and off-premise retailers like Stew Leonard's, and extending to Whole Foods stores within Northeast and Mid-Atlantic regions. Now it's hitting Calif and Southeast as well. The brewpub, Bar, used Ripe as platform for broad upgrade of cocktail line, moving from 3,200 cocktails sold at $8 in 2010 to likely 17K cocktails sold at $10 this year, all incremental to its core beer sales, Roederer noted.

Interestingly, given burgeoning interest in classy cocktails, Roederer says there are no national brands offering same concept, tho heat-pasteurized Sun Orchard does considerable bar biz as do such shelf-stable brands as Powell & Mahoney and Employees Only. Tho founders initially targeted mixologists with offering, that proved a blind alley, given the specialists' penchant for building their cocktails from scratch. But it offers excellent solution to higher-volume regional and family dining chains (like Legal Seafood, which has picked up brand) seeking to elevate their cocktails. Coming off stint as svp marketing at spirits marketer Remy Cointreau, NY-based Philippe hopes to leverage his spirits-biz relationships to establish Ripe Craft Bar Juice as standard accompaniment to spirits marketers' sampling events and at range of on- and off-premise retailers. As it builds scale, co also aims to establish direct relationships with key growers, on way to offering 100% traceable citrus ingredients.

Refrigerated item is offered in 1-liter bottles priced at $10, in Agave Margarita, San Marzano Bloody Mary, Agave Mojito, Classic Lemon Sour and Bajan Punch flavors, with cranberry and cosmo-based flavors on way for Nov. Co has invested roughly $2.5 mil in its own HPP and packaging systems, allowing it to perform complete production and packaging process within 5 hours at single location, key quality advantage over HPP players who have products tolled at 3d-party facilities. Along way, it's built up ancillary business offering HPP services for clients like Harmless Harvest coconut water and copacking for clients like Tumeric Alive.

After initially self-distributing in Conn, founders have signed Berkshire Brewing as distributor for Conn, Mass and RI, using refrigerated compartment added to beer trucks. In NY, co has assigned Gourmet Guru (off-premise) and Dairyland (on-premise). Key priority for Roederer will be to recruit key sales execs, starting in Mid-Atlantic and Fla, and to figure out distribution strategy as line goes nationally.

Tho it's key play at Freshbev, Ripe is not only thing going on there. Also in mix is cleanse brand called Project Fresh that was co-developed with Whole Foods, which was seeking 100%-organic cleanse solution. That's currently available mainly in Whole Foods stores in New England and Mid-Atlantic. And coming soon is craft juice line that will operate in category without any fresh offerings so far. Roederer wasn't ready to say more.  

Based on survey of "tens of thousands" of convenience store locations around US, bev sales gains accelerated to +3.8% over Labor Day weekend vs 3.6% gain for holiday in 2013, reported Bonnie Herzog of Wells Fargo Securities. "Over 80% of our respondents indicated" their bev sales were stronger this yr vs Labor Day 2013. "With both July 4th and Labor Day holiday weekend sales up mid-single-digits this year, we expect that generally Q3 results should be solid for beverage manufactures," wrote Bonnie. She pegged 3 key contributors for solid Labor Day performance in c-stores as "(1) successful product and package innovation from KO & PEP, (2) improved trends in the energy category, and (3) improved traffic and increased basket sizes of purchases."

Fewer Promos, Better Q3 Pricing Bev sales were strong in c-stores "despite fewer promotions" over Labor Day, noted Bonnie. Promotions increased 2.9% during this yr's holiday, well below 4.2% increase a yr ago, "and well below the +5.4% growth we saw over Memorial Day Holiday," she added. Based on surveys, Coca-Cola "prices were down slightly" compared to previous couple of months while PepsiCo prices were viewed as "generally flat." Retailers indicated KO "was the most promotional in colas and flavored CSDs," while PEP "was particularly promotional in diet CSD's as well as iced teas and enhanced waters." In energy category, Monster was "most promotional," and Nestle "by far" had most promos in water category. While there was less promo activity going on in c-stores this yr vs last, Bonnie pointed out "we believe promotional investments have been particularly aggressive in other channels." Report on less promo activity over Labor Day just adds to positive pricing news in Q3 as "nearly 50% of respondents" reporting KO raised prices during qtr with 1/3 reporting PEP prices are up. "Interestingly, the vast majority or respondents believe both KO and PEP will raise prices further in Q4," reported Bonnie. That however, "could leave DPS further behind considering its limited product innovation and price realization."

Retailers Pleased with MNST Innovations, Offer Thoughts on Coke Deal "Based on feedback from our retailer contacts, we believe energy category growth has re-accelerated in Q3," with sales projected to be up near 11%, reported Bonnie. Almost half of respondents indicate energy drink sales are up double-digits since Q2 and "100% of respondents" believe category growth has been positive. Retailers were also "generally very encouraged" by MNST innovations, such as its Ultra extensions "targeting new day parts" and "increasing household penetrations" as some retailers put it. C-store retailers "broadly believe" a KO-MNST partnership "will provide broad benefits to both cos (and c-stores) through SKU rationalization, improved market penetration and increased market share." As one retailer put it, "Full Throttle & NOS hopefully will go away and not take up unnecessary space in our coolers."  

Reporting a soft Q4 and full year, Campbell Soup prexy/ceo Denise Morrison expressed faith today in recently released plan to boost penetration of fresh and premium sections of store, but warned investors that "it will take more time than initially anticipated to achieve long-term growth targets."

Q4 results superficially seemed to be improvement over year-earlier, with sales rising 7% to $1.85 bil, but that was mainly because of extra week in period (which added 7% boost) and acquired brands (which added 3%). Without that boost, sales slipped 2% and gross margins declined to 34.1%, lowest in at least a decade, per one analyst, as co promos achieved limited success in stimulating purchases among financially pressed core consumers. Similar dynamic was at work for full year, with sales rise of 3% to $8.27 bil abetted by acquisitions and extra week.

In segments of interest to BBI readers, Bolthouse & Foodservice div reported 4% rise to $334 mil in sales, making it best-performing segment in co, with Bolthouse gains offsetting continued decreases on foodservice side. Earnings rose 16% to $29 mil. By contrast, US Beverages segment scored 1% organic decline to $184 mil, as gain in V8 Splash and veggie hybrid sublines were offset by declines in V8 Fusion. Sales might have been in positive territory were it not for transition to new distribution network, ceo said. (BBI had heard that, upon word that alliance was being dissolved last year, Coca-Cola system that was prior distributor was quick to replace many V8 facings with Minute Maid facings.) But operating income more than doubled to $43 mil, thanks to lower administrative costs and extra week in qtr.

Results reflect malaise that's seeing more grocery action shifting to perimeter of store, where fresh foods are offered - with some young adults rarely even setting foot in a grocery store or club store, as Morrison acknowledged. That's resulted in broad rethinking of strategy whose results were unveiled at investor day a few weeks ago, and call for stepped up acquisitions in fresh and natural foods (with Bolthouse Farms deal a couple of years ago an example) and upgrading of core portfolio to include more fresh, natural and upscale offerings. Co is even prepping its first organic soup. On chronically underperforming bev side, co is trying to step up innovation on V8 platform while hoping resurrected indie DSD network will get brand into broader array of channels than recently unwound Coca-Cola alliance did. And with consumers showing growing interest in high-priced fresh juices, CPB sees opportunity for "affordable juicing," even on shelf-stable side. V8 is extending into protein shakes and bars, while Bolthouse Farms adds kids' line as first prong in stepped up healthy-kids initiative. Those are all promising new directions, Morrison told investors this morning, but they'll take time to unfold and it's "essential to balance optimism with realism."

CPB Adds 100+ DSD Shops, 100K New Doors; Plans to Move Non-Bev Items into Resurrected Network? As in past, CPB brass referred only obliquely to major undertaking on bev side: reconstructing network of indie DSD houses to replace 5-year alliance with Coca-Cola that was discontinued last year. CPB svp/cfo Anthony DiSilvestro reported that co has signed 100+ new distributors and gained 100K+ doors of new coverage, which should start yielding growth by Q2 of next year. Intriguingly, Morrison added that "initial focus" of network is both bev and Bolthouse Farms brands, suggesting that down road co may have ambitions of getting non-bev brands into that DSD platform. Recall that in recent years many DSD shops have picked up snack and other food offerings as counterbalance to their core bev offerings, offering potential synergy for tighter relationship with CPB.  

Looks like recent "Rumor Mill" item about Davis Beverage Group selling out is correct, but main buyer is Dr Pepper Snapple Group, not Honickman Group. Plano, Tex-based soft drink marketer said it's signed non-binding letter of intent to acquire "business assets" of Davis Beverage Group and Davis Bottling Co, including most of Davis' DSD territory in Penn territory surrounding its Bethlehem base and a portion of its NJ territory, as well as production and distribution facilities, delivery vehicles, vending equipment and other assets. Deal's anticipated to close in Q4. As noted (BBI, Aug 26), Davis distributes large # of DPS brands, from Canada Dry and 7 Up to Snapple, in 42-county eastern Penn territory outside Philadelphia metro. It also carries several allied brands that move within DPS system, including Bai 5, for whom it was crucial early DSD partner, as well as Fiji, Vita Coco and Neuro. DPS noted that Davis has also served as contract packer on some of its CSD brands in PET bottles, its Orangina brand in 1.75-liter PET bottle and IBC, Stewarts and Crush in glass bottles. Terming Davis "a great partner to us both as a distributor of our brands and as a contract manufacturer," DPS prexy/ceo Larry Young said acquisition will nearly double co's DSD footprint in Penn while adding to its glass bottling capability. Some of non-DPS brands in Davis' portfolio may be transitioning to indie DPS house Honickman and its Canada Dry unit, which was believed to also be in hunt, per local sources.  

Athletes sweat a lot, and have avid fan followings, making them ideal vehicles to promote sports drinks and other hydrating items. But SF-based DripDrop is tapping another group with similar characteristics as investors and endorsers for its medical-grade rehydration powder: guitar shredders. And having cracked Walgreens stores nationwide, brand partly owned by Joe Satriani, Sammy Hagar and Bob Weir is ready to step up its retail push. For BBI readers with more serious interests in their spare time, Satriani is purveyor of primarily instrumental records, Hagar is former Van Halen frontman and Weir is longtime Grateful Dead member whose current project is called Ratdog. Also in investment mix is investment arm of some of SF 49ers owners.

Brand was created by Dr Eduardo Dolhun, who drew on experience dealing with hydration victims in Guatemala, to offer upgrade over what his prexy, Kiernan McGuire, an amateur triathlete, terms popular "hype-dration" brands which emphasize potassium at expense of sodium and lack meaningful efficacy. By contrast, Dolhun drew upon third-world oral rehydration therapy (ORT) experience in employing "golden ratio" of salts to sugars, and managed to "crack the taste code" so it no longer tastes like seawater. It's gotten rigorous real-world tests in hands of groups like Navy Seals, during their Hell Week activities. A patient of his, Satriani, took interest in brand and in turn intro'd it to other musicians like Hagar and Weir. By no means is Drip Drop excluding athletes from mix: among those reported to be involved in initial $3 mil round were NFLers John Elway and Ronnie Lott.

Co has been working via Advantage Consumer Healthcare to coax drug chains like Walgreens and CVS into using brand to reinvigorate oral eletrolyte segment dominated by brands like Pedialyte in baby aisle. Since that's where consumers expect to find these items, DripDrop isn't fighting that placement for now, Kiernan said, tho down road co would like to see retailers establish separate hydration stations in their pharmacy areas. Brand also is sold in grocers like HEB and online on Amazon.com. And co is aiming to build another arm of biz serving hospitals directly, as alternative to IV solutions that's less risky, expensive and unwieldy. DripDrop is sold in boxes of 8 packets each making an 8-oz serving, at SRP of $9.99. For now, co has no plans to move to RTD formulation, tho that's possibility down road if, for instance, docs in hospitals request it as easier-to-administer option. Closer in, co is considering additions such as military package better suited to soldiers' canteen size. P&G vet Jody Arthur has been recruited to handle retail sales.  

As arms race heats up among coffee purveyors, Dunkin' Donuts is upping its game, rolling out "bold new" Rainforest Alliance-certified Dark Roast coffee, and also adding trendy almond milk as non-dairy alternative. New coffee debuted at co's showcase "full expression" stores that opened in Modesto, Calif, last week and in Santa Monica, Calif, this week, and is anticipated to be available in all US stores on Sep 22. It's claimed to employ unique roasting process to create bold flavor and smooth finish but avoid "bitterness typically associated with most dark roast coffees" (take that, Starbucks). Meanwhile, at time almond shortage has some cos paring back participation in surging almond milk sector, Dunkin' is taking plunge, teaming up with #1 grower Blue Diamond to offer Vanilla Almond Breeze Almondmilk as addition to hot or iced coffee and lattes in select stores. To build buzz, partners are currently hosting "AlmonDD Milk Adventures" Twitter Sweepstakes to followers of @DunkinDonuts or @AlmondBreeze.  

Tiny Balance Water, NY-based marketer of spring water fortified with Australian floral essences, has brought aboard a heavy hitter to help on sales side: former Red Bull and Talking Rain exec Bruce Trent. In taking on post of vp sales, Bruce brings perfect blend of relevant experience, said cofounder Martin Chalk: managing natl accts during Red Bull's explosive growth phase, immersion in botanical space via Red Bull's less successful Carpe Diem brand, bottled water experience at Talking Rain, and startup experience via distributorship he opened - and then had to close - in Palm Springs, Calif. Trent comes aboard co that's maintained durable presence at retail and in hospitality venues despite ongoing challenges trying to figure out how to communicate subtleties of brand's positioning as unsweetened, unflavored, clear liquid with ingredients like Banksia Robur and bush fuchsia. Indeed, co has just landed its Balance Cleanse sku - which launched only in Mar at Natural Products Expo West - in all 1,500 Kroger stores that maintain natural-bev set, under banners Ralphs, Fred Myer, Dillon, King Soopers and Fry's, starting in Oct.

At same time, co has gone back yet again to drawing board on branding, with plans to scrap distinctive aboriginal-style bottle graphics in favor of new look with greater refreshment appeal and more direct statement of what product is. Co founded by Chalk and Peter Maher is currently developing designs and new package copy. As for Trent's famously assertive selling style, Chalk said that would prove valuable as brand moves beyond sympathetic natural-category buyers to general-merch buyers who may have just been rotated in from meats or other non-bev assignments and require harder sell. "He definitely brings more of a Mike Repole approach to selling than our traditional flower essence laid-back approach," he joked, referring to another larger-than-life figure, former #2 at Vitaminwater now working Body Armor brand.