On heels of Supreme Court ruling that POM Wonderful was justified to sue Coca-Cola over KO’s claims that its juices are 100% Pomegranate, a similar lawsuit has been filed against Walmart by 2 Florida customers, reported Food Navigator-USA.com.  Suit claims Walmart is “deceiving shoppers by labeling a juice comprising predominantly apple and white grape juice concentrate as ‘100% Cranberry Pomegranate,’” per report.  It acknowledges that phrase “flavored juice blend” is on label, but only “underneath in smaller type.”  WMT’s Cranberry Pomegranate juice with just a “miniscule” amount of pomegranate and cranberry “is priced at $2.78 per 64-oz bottle,” while its “virtually identical” Great Value apple brand is priced at “$1.88 per 64-oz bottle.”  The arguments being made in this case are similar to POM’s case in Supreme Court, noted FN, as plaintiffs argue that even if WMT is in compliance with FDA labeling regs, it “does not provide a shield from liability.”  A WMT rep would only comment to FN that co is “reviewing the specific claims.”  Asked whether Supreme Court decision in POM case has “emboldened” plaintiff’s bar, a food/drug attorney from Miami said, “To be sure, they like the decision in POM.  What plaintiff’s lawyer wouldn’t.”  “At the same time, they’ve been pretty bold already in bringing all manner of false advertising cases involving food labeling,” added Arnie Friede, with Sandler, Travis & Rosengerg, PA. 

Coca-Cola beat earnings consensus in its 2d qtr but 2d consecutive decline in North American sales seemed to spook market this morning, with shares trading down around 3% so far today after release of report.  Revenues declined 1% in Q2 to $12.57 bil, and are now off 3% for YTD.  Operating income dipped 2% to $3.17 bil.  In crucial N Amer region, which accounts for 45% of biz, net revenues were flat at $5.71 bil.  Net income edged down 3% to $2.6 bil.  “Underlying Trend Not Improving,” headlined Stifel Nicolaus’ Mark Swartzberg, in characteristic take on Street.

For his part, chmn/ceo Muhtar Kent lauded co’s “sequentially improved results” but allowed that there’s “still more work to do.”  In remarks he chose to focus on improvements in CSDs, with worldwide volume up 2% (1% for YTD) and Coke brand up 1%, Sprite +6%, Fanta +2%.  Coke brand’s gains including 1% growth in N Amer, 9% gain in China, double-digit gain in India and improvements across European markets.  But Diet Coke and Coca-Cola Light both declined mid-single digits – “sequential improvement” from Q1, per Muhtar’s mantra, but “more work to be done here.”  “Share a Coke” campaign rolled into 80+ markets this year with encouraging viral pickup and teen engagement; World Cup campaign reached across 170+ markets in Q2, with music anthem hitting top-10 charts in 40 countries.  While some analysts in their earlier remarks had wondered why that all didn’t translate into more robust growth, Kent reminded that such brand-building initiatives typically yield impact over longer term.  Tho overall picture was mixed, “to get growth back into sparkling, to get growth back into Coca-Cola is a significant achievement . . . I believe our approach is working,” Kent maintained.

One bright spot: co’s experiments with smaller package sizes that offer lower calorie count and shelf price (but more cents per ounce to Coke).  These smaller packs, both mini-can and 16-oz cold-box bottle, yielded 60% of brand’s volume growth and were key part of Coke brand’s 3% gain in price/mix, Kent indicated.

Smaller-size packs contributed to brand C-C growth

By contrast, noncarb volume rose 5% for qtr, 6% for YTD, with sports drinks, tea, coffee, bottled water all contributing.  They were partly offset by slowing juices and juice drinks, hit by price adjustments mainly to offset cost increases in N Amer.  No comments were offered on energy sector, nor did Kent respond to query from analyst as to whether he’s satisfied with current energy strategy.

Tho KO has often been viewed as aggressor on pricing promos over past year, on today’s call company execs from Kent on down repeatedly avowed that they’re intent on “maintaining an extraordinary amount of discipline on price,” as N Amer chief Sandy Douglas put it at one point.  Such avowals often seem contradicted by pricing seen in market, tho execs claim some of that promo activity is entirely retailer-driven.

Refranchising: Donut and Donut Hole Strategy   Tho no new news was offered on refranchising effort in North America, ceo Kent shed a bit of further light on strategy, saying co aims to select a “handful of proven regional bottlers that can best serve every local community within their contiguous territory” complemented by “select group of local bottlers.”  That suggests KO isn’t receptive to bottler overtures that involve their hopscotching over disparate regions, and also is in synch with 2 deals announced earlier this year that will give beer wholesaler Reyes Group and smaller operator in Fla confined local territories (Chicago for Reyes).  Damping any expectations of major announcements soon, Kent said co was making progress by executing smaller-scale transactions today to position it to do larger-scale deals in future, with additional details likely by year-end. 

Story on Zola’s new branding strategy last issue incorrectly identified co as Zico in headline, which should have read, ‘Live,’ Demands New Zola Campaign; Rolls Out Lemonade Coconut Water.  Story itself ran as intended.  BBI apologizes for the slip.

Big cos like Campbell Soup may be upping their commitment to offering healthier kids bevs (story above), but entrepreneurs continue to try to crack space, despite forbidding history that’s seen countless other brands fail to crack hegemony of conventional but heavily promoted brands like Capri Sun.  Case in point: Drazil Kids Tea, launched in Princeton, NJ, by former P&G exec and mother of 4 named Christine Wheeler (who’s now based in Minn but is en route next month to Northern Calif, brand’s most developed market).  Brand targets kids age 2-11 via their health-conscious moms via blend of tea and juice that offers more sophisticated taste but lower calories than 100%-juice alternatives.  Like brands like Wat-aah bottled water, Drazil (name is “lizard” backward) attempts to reach kids with intriguing branding that doesn’t pander, in this case employing whimsical brand name of sort that’s worked for brands like SpongeBob SquarePants, in contrast to staid, mom-oriented grocery brands like Minute Maid.  Imagery of on-pack chameleon was settled upon after visiting lizard exhibit at American Museum of Natural History, Wheeler said. 

After gestation process that spanned years, Drazil launched in 20 stores in NorCal last year and has broadened to include Pacific NW.  In Apr it cracked 2 regions of Whole Foods, NorCal and Southwest, priced at $4.99 per 8-pack of 6.75-oz cartons.  (Some indie grocers have resisted on grounds that price is too high.)  It was in SW that demo specialist lit upon best positioning statement so far, that brand’s use of herbal tea cuts sugar but keeps the antioxidants.  So marketing to moms often riffs off that.  So far, brand is copacked in Southern Calif, but Wheeler’s biz partner, former Juicy Juice logistics expert Mike Quezada, who’s investor and consultant to biz, has lined up copackers in other regions for whenever they’re needed.  It’s also testing in unidentified club store.  For now at least, co is planning on using hybrid distribution mix of broadliners like UNFI and direct shipment to some mainstream grocers.  Disturbed at seeing Drazil placed next to brands like Muscle Milk in some accounts, co has hired first merchandiser.

Plan is to capture kids currently being fed 100% juice via easy-drinking formula that’s 54% tea, 46% juice, offering high antioxidant level but less sugar.  That represents U-turn from initial launch in Minn in 2010, when co went with 100%-juice concentrate reconstituted with herbal tea.  But it was still a juice, with high calories, and combo of organic juice and herbal tea put costs thru the roof.  So concept was rethought to current formulation, which sticks with organic herbal tea but uses conventional juice.  Interestingly, in research, making claim of “no added sugar” proved more potent than “38% less sugar” among moms, who also made it clear they wanted to see vitamin C in drink.  (Wheeler also tested lower juice proportion, but kids wouldn’t drink it then.  In internal tests, current recipe has even bested a flavor of Vitaminwater, Christine said.)  “Fake sugar,” including stevia, was never considered, she said.  Apparent interest from older cohort, teens, suggests path for future product development, Wheeler said.

So far, Wheeler is roughly halfway thru $1 mil raise, via Wyatts Torch Equity Partners, family office in NJ that has deep roots in food biz, and enStratus Angels, Twin Cities angel-investor group.  (Bev involvements of Wyatts Torch founder Peter Spinner include coo role and board seat at Chiquita Tropicals marketer Mojo Organics.)

Monster Beverage Corp was downgraded to “equal-weight” by Morgan Stanley “due to concern over slowing US sales growth.”  Shares closed down 4.5% today.  Monster retail sales “slowed in Q2 according to scanner data and our industry contacts,” noted analyst Dara Mohsenian.  MNST slowdown is concern given “easier comparisons, favorable year-over-year weather, and less negative press on health/wellness should all have buoyed results,” he added.  While Monster Green continues to perform well, results have been slowed by “weak” performance for other brands such as Rehab, Absolute Zero and Lo-Carb, which “are all down significantly.”  MNST sales slowed to +6% in IRI US tracked channel data, noted Dara, down from +11% in Q1.  With slower growth overall for the energy category, Monster’s gain of +4% in gas/c-store channel in Q2 was co’s “weakest result as far back as our data tracks,” he added.  At time that attacks on energy drinks on health grounds seemed to be subsiding, Mohsenian also worries about “re-emergence of legal/regulatory risk” lately.

For past coupla years Campbell Soup and ceo Denise Morrison have struggled to adapt to changing retail and consumer environment that’s seen migration of sales from shelf-stable side to perimeter areas like produce, to point even that respected Wall Street prognosticator Gene Marcial lately has suggested co might be prime pickings for incursion by Warren Buffett.  At investor day today at its Camden, NJ, hq, Morrison and team offered revamped strategic agenda aimed at making Wall Street believe co can hit $10 bil in sales in next 5 years despite playing mainly in sleepy soup category.  At essence of strategy, as co brass has noted before, is to migrate with many affluent consumers to perimeter of grocery where fresh items lurk, even while retaining value-oriented customers of shelf-stable lines.  New slogan meant to capture push to use more authentic ingredients and healthier formulations is “Real food that matters for life’s moments.” CPB portfolio of course includes not just Campbell’s Soup but also Prego, Swanson, the Pepperidge Farm, Goldfish and Milano snack brands, and V8 and Bolthouse Farms juices (latter acquired 2 years ago now).  Among key bev-related initiatives discussed at presentation today: moving V8 brand into protein shake biz, and broadening Bolthouse Farms into kid-focused healthy bevs.  Here’s quick wrapup of co’s bev-related new directions, gleaned from webcast of program, which concluded at 4 PM.  Analysts and investors who made trip to Camden were invited to browse innovation area before heading out.

V8 Heads into Protein Shake Arena    V8 protein shakes and bars attempt to leverage familiar good-for-you brand in what’s now $4.6 bil adult nutrition category.  Darren Serrao, svp/gm for Innovation & Business Development, who’s notched big success with Campbell’s dinner sauces, termed shakes and bars “natural and smart extension for the brand.”  They’ll emerge in Sep in 3 flavors, Chocolate, Vanilla and Chocolate Raspberry, with protein base compounded of ingredients like dairy, soy, brown rice and quinoa, and ancillary ingredients that include carrots and sweet potatoes, with real honey as sweetener.  Bars launch same time in 3 flavors too.  Smoothies’ point of difference, Darren figures, will be rich flavor and protein derived from both dairy and plant sources.  No initial word on pricing.

Bolthouse Farms Aims at Kids with Smoothies, Fruit Tubes, Snack Packs   Viewing kids’ piece as comprising $1 bil out of estimated $18 bil packaged fresh segment, Bolthouse is making foray into segment starting in 3 weeks, targeting kids age 4-11, said prexy Jeff Dunn.  It’s taking 3-pronged approach with lines of smoothies, fruit tubes and veggie snackers packed in single-serve containers but sold in multipacks to encourage moms to stock up.  Key attribute for both smoothies and fruit tubes will be that they include non-dairy options.  To support launch, co is creating special healthy-snacking merchandising unit for produce sections that will enable grocers to gather Bolthouse and other brands in single area.

Broader Growth Strategy: 4 Platforms, All with Bev Components   CPB ceo Morrison pointed to 4 growth platforms for coming year, each with bev component.  First is breakthrough innovation, as with dinner sauces on soup side or V8’s forthcoming protein shakes and bars.  Recently acquired Plum Organic, #2 organic baby food co in US, will similarly move into adjacencies like healthy bevs and snacks, as it moves up age scale to retain moms as customers even as their kids move into toddler stage and beyond.  All told, 200+ products are on way for fiscal year 2015 across all co’s brands.  Second platform is becoming branded leader in so-called “packaged-fresh” foods, $18.6 bil category for which Bolthouse Farms acquisition 2 years ago offered solid entry point.  Co will seek opportunities to move in that direction across portfolio – as with refrigerated soups and first refrigerated V8 items launched in past year with assist from Bolthouse.  Expansion in fast-growing Asia and Latin Amer markets is 3d, and 4th is to drive availability in all channels, incl immediate-consumption.  Withdrawal of V8 brand from Coca-Cola system in favor of re-establishment of indie DSD network is key move in that direction, tho CPB execs said little about that transition today aside from indicating that co by now has signed 90 DSD houses. 

Identifying V8’s Core Customer    Co has undertaken fundamental rethinking of where sluggish V8 biz needs to go, concluding that brand should be perfectly aligned to lead consumers who’re on “veggie craze,” as Ed Carolan, prexy of US retail, frequently put it.  “After all, we’ve been juicing for more than 80 years,” he noted.  That means several significant shifts.  For starters, V8 has rethought who is its core target, concluding from deep dive that it’s not health-challenged consumers after all but rather health-focused ones leading active lifestyles.  So communications are being revamped to address their concerns, and flavor range is broadening to add items like Spicy Mango and Mint & Lime that appeal to these adventure seekers.  Unit is also working with its Bolthouse Farms colleagues to launch mainstream veggie-as-hero juices in 4 varieties, all of them 100% juice: Carrot Mango, Healthy Greens (with kale), Golden Goodness (with squash and sweet potato) and Purple Power. 

Meanwhile, V8 + Energy has been bright spot in portfolio, resonating with females and rising 52% to $54 mil in retail sales in past year.  So its availability, packaging configurations and selection will be expanded.  And flattening V8 Splash, still $206 mil biz at retail, now will be built into “powerhouse brand for kids” with more flavors, including Lemonade, and formats and packaging sizes.  All the while, these various sublines will adopt more unified branding as single family and co will push to make them more available in channels like convenience, club and e-commerce.  Co is hoping migration from Coke bottlers to new DSD network will help in that regard.

More on Bolthouse Farms’ strategy in next issue, readers 

Profile last issue of ’Tude Juice marketer Fresh Matters LLC described co as based in NM (BBI, Jul 15). Co is actually incorporated in Wash State, where brand is produced, tho its founders Cedric Chastenet and Andy Knowlton continue to live with their families in Santa Fe, NM, and commute to operations in Wash.  

Sipp Sparkling Organics has expanded into Chicago with assignment of brand to Chicago Coffees & Teas, whose core focus is on specialty and gourmet coffee, tea and espresso. New distributor will tackle both retail and on-premise channels, said Sipp ceo/founder Beth Parentice . . . Waiakea Water is launching in all 100 Albertsons stores in Pacific Northwest region, as brand continues migration from natural-food base to conventional grocery.  

With knockoffs abounding and stakes higher now that it’s half-bil brand, Sparkling Ice has diverged from its no-endorsement strategy to bring aboard Okla Thunder star Kevin Durant. "We frankly hadn't moved into athlete endorsements because we craved authenticity," ceo Kevin Klock told ESPN, which broke news. "Things fell into place when Kevin came to us." Durant had split with prior bev endorsement partner Gatorade last fall . . . Dr Pepper Snapple Group has inked 3-year deal with SF Giants that gives Snapple iced teas and juices to AT&T Park. As part of alliance, Snapple gets in-stadium signage throughout season, in-store materials with custom Giants-related Real Fact inspired by Real Facts found under every Snapple cap, and range of promos.  

Zico Coconut Water lately has gone with “Crack life open” as its summer campaign. Now rival Zola brand of acai drinks and coconut water has weighed in with “Live life to the fullest.” New campaign, which broke Mon, invites consumers with a thirst for adventure to enter Live Life to the Fullest sweepstakes via new Facebook page dubbed LiveZola. Sweeps, running thru Sep 15, offers winners a “Go Bag” packed with GoPro camera, $1K in cash and year’s supply of Zola Coconut Water. As part of campaign, 5 video Zola webisodes will run on YouTube, backed by radio spots on Alice 97.3 FM in brand’s home market, San Francisco’s Bay Area, as well as on such digital platforms as Hulu, Women’s Health Network and Zola’s own new Web site, LiveZola.com. The videos follow characters Renan and Chelsea as they pursue activities like surfing, kayaking and ziplining in tropical paradise setting. Campaign arrives as brand has rolled out its Coconut Water Lemonade, offering alternative to similar flavor from rival Vita Coco, which likewise pitches it as lower-calorie “lemonade upgrade,” per Vita Coco ads. The Zola entry clocks in at 45 calories per 8-oz serving.