National Beverage concluded its 2014 fiscal year with off-quarter that saw both revenues and earnings slip, but ceo Nick Caporella was unfazed, declaring in comic-book style he typically employs in earnings releases: “Painful, Yes – Resilient and Resourceful, we excitingly begin Fiscal 2015 . . . First quarter is more than on track – May and June have given Fiscal 2015 a passionate start. That’s a YES!!” Skeptics, kapow!!! Still, Q4 revenues at Fla-based co declined 3.2% to $641.1 mil and net income fell 7% to $43.6 mil, tho co offered no rationale for declines beyond general industry challenges. Curiously, given lower results, Caporella assured investors, “All areas of our business, including carbonated soft drinks, are growing!” He pointed to rebranding of LaCroix line of sparkling waters and launch of Curate subline as particularly promising (BBI, Jun 30). 

The litigation front had seemed to be quieting down for  energy drinks, but now there seems to be new activity emerging from Oregon: attorney general Ellen Rosenblum is getting ready to sue Living Essentials and its parent co Innovation Ventures claiming 5-Hour Energy is using misleading claims in its ads, reported Reuters.  “Plainly and simply, in Oregon, you cannot promote a product as being effective if you don’t have sufficient evidence to back up your advertising claims,” said Rosenblum.  Oregon is taking exception to claims that 5-Hour contains “unique” ingredients to boost energy when the “only effective ingredient was a concentrated dose of caffeine,” noted Reuters.  Lawsuit also takes issue with ad claims that users won’t experience a “crash,” that they’re OK for ages 12 and up, and that product is recommended by doctors.   Similar suits have been filed by AGs in Washington and Vermont.  Rosenblum’s office said lawsuits will be filed in coming weeks.  A Living Essentials rep said co would fight suits it considers “civil intimidation.”

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Assault on NY started with splashy sponsorship of Governor’s Ball rock fest back in late May, just as city was finally climbing out of severe winter.  Brand’s Brazilian supermodel endorser Adriana Lima was involved in activities like kickoff party with DJ apl.de.ap of Black Eyed Peas, as well as Urban Jungle Workout at Aerospace NYC fitness studio of her trainer, former middleweight boxing champ Michael Olajide Jr.  Meanwhile, Urban Jungle Oasis sampling truck started working streets of trendy nabes.  The 3-day, multistage fest itself was held from Jun 6-8 on Randall’s Island and featured acts like Jack White, The Strokes, Skrillex and Vampire Weekend, with Amazonia among partner roster that included Miller Lite, Red Bull, Don Julio’s Tequila and Tito’s Vodka.  At fest, Amazonia mustered sampling stations, face painting, photo booths and VIP tent with foosball and free drinks.  The ads, running out of home, online and in trade mags, feature sultry closeups of Lima or fellow endorser Cintia Dicker with somewhat tribal-looking hair treatments, under exhortations like “Restore your wild side” or “Amazonia Power” and product descriptor “Brazilian Born Coconut Water + Legendary Amazon Extracts.”  Outdoor ads flag Amazonia as available at city’s ubiquitous druggist Duane Reade.

Unusually, tho ads depict bottle that’s been rebranded from Amazon to Amazonia, much product encountered on retail shelves by BBI feature old brand, perhaps reflecting tricky timing of marketing push just as peak season kicked in.  Various theories have been heard about brand change, including threat of litigation from Amazon.com and co’s conclusion that Amazon name may have misled some consumers into believing brand is made from Amazon River water.  Co also has recently reformulated brand, using stevia to reduce calorie count in coconut water/tea line (20% coconut water, now with 30 calories per serving) and water line (10% coconut water, now with 5 calories).  Co also has is now rolling out 100% coconut water in plain version and 3 flavors.

On distribution front, brand recently segued in NY from Preferred to Exclusive, which has shown knack for getting cutting-edge bevs placed in Duane Reade chain.  Several sources tell BBI co has taken minority stake in Exclusive, as way of strengthening tie to shop at time heavy marketing investment was about to kick in.  During push, Amazonia has operated storefront on Manhattan’s 23^rd St, just down block from Exclusive’s office.  Asked a coupla weeks ago about investment, Exclusive cofounder Steve Gress said it’s not true, while Newman wouldn’t discuss matter.  Elsewhere in country, co appears to have scrapped initial plan of going via DSD out west, exiting wholesalers in region in favor of broadliners like UNFI and Kehe as it has from start in eastern markets outside NY.  Direct customers include likes of Harris Teeter grocery chain.  Brand has been sold in Brazil and US and is about to open Dubai, it seems.

Soccer-themed energy and hydration brand Golazo has been riding wave of interest in sport engulfing US during and since World Cup – capitalizing most notably on its prescient sponsorship of local boy, Seattle Sounders star DeAndre Yedlin, who emerged as breakout star of US national team in Brazil and has since become target of broad interest among European powerhouse teams.

Things are clicking for Seattle co on another front too: it’s become first (and so far only) brand sold thru Amazon.com to be featured in video produced by online giant as part of pilot program to feature individuals behind brands.  In 2.5-minute video, Golazo’s Scottish-born founder Richard Tait is viewed juggling and dribbling a soccer ball in his office while discussing his passion for sport and business.  Video has run both on Amazon’s home page and on site area dedicated to Golazo’s bevs.  Tho overture came from Amazon, Richard was known factor to co, as entrepreneur behind Cranium, big-selling game on Amazon.  It likely didn’t hurt that his co is local to Amazon, as is key financial backer of brand, Starbucks’ Howard Schultz (who’d also invested in Cranium).

Golazo, of course, is Latino slang for an outstanding goal (say, World Cup-clinching strike by Germany’s Mario Goetze), and brand has ridden soccer wave in its Pacific Northwest core market, where Major League Soccer teams in Seattle, Portland and Vancouver have generated fanatical local interest.  Brand has focused on northwest quadrant of US, building out of natural channel to conventional grocery, garnering approval in Jun for 104 Albertsons stores for both canned energy and bottled hydration lines.  That’s brought availability to 1,600 stores in 8 states, mainly Wash, Ore and Calif.   Recent packaging upgrade, which hit stores just before World Cup, has helped same-store sales in natural stores in Pac NW spike up to 80%, Tait believes.

Yedlin Ubiquity as Way to Build Golazo Awareness   Signing of Yedlin, whose slashing attacks for US during World Cup drew global interest, was fortuitous, Tait acknowledged, but he’s natural fit for brand: intelligent, approachable local boy made good, with deep commitment to conditioning and fitness, who’d previously tweeted about Golazo brand.  In soccer hotbed Seattle (where 64K fans turned out for Sounders/Portland Timbers game on same day as World Cup final), 21-year-old Yedlin has thrown himself into fray since becoming Golazo ambassador, wearing its t-shirts on post-World Cup TV interviews and participating in Futbol Fiesta promo on day of World Cup final.  In Fiesta, Golazo teamed with Uber to offer $30 celebration packs of game tickets, drinks and swag to folks who ordered via Uber app, with the packs delivered by Sounders and national team players Yedlin and Brad Evans.  Proceeds went to Golazo Foundation.  Recipients ranged from individual fans to cos like Facebook and Zulilly, Richard said.  Potential move by Yedlin to major European team would take him out of local mix, but further raise his profile and that of Golazo, Tait figures.

In another key market, Portland, Golazo ran online promo offering chances at round of Footie Golf with Timbers captain Will Johnson.  Another promo there offers chance to go “the full 90” with Johnson, including joining athlete for dinner.  Back in Seattle, contest dubbed Get DeAndre’d offers fans a chance to get their hair cut with distinctively coiffed Yedlin.  Next week, “Play with DeAndre” promo will dispatch gaming truck to peoples’ driveways so up to a dozen of their friends can play soccer videogames with Yedlin on vehicle’s 4 outsized XBox screens and TVs.  Golazo is leveraging other soccer activities in region as well: Portland Thorns and Seattle Reign pro teams on women’s side, as well as friendly game in Seattle tomorrow between Sounders and English Premier League team Spurs, which is on pre-season tour.

Boomboom’s Brand Bombardment: Lenses, Snacks, T-Shirts   Golazo was first item from Boomboom Brands, incubator platform co-launched by Tait.  Given how building new energy brand has proved arduous battle of attrition, have Tait and Boomboom actually found time to launch other products?  Indeed, yes – 3 other brands, so far.  He’s teamed with entrepreneur Marc Barros to launch Moment camera lenses that attach to mobile phones, with $450K lift from Kickstarter, and with Jane Yuan on Simple & Crisp line of dried fruit snacks that just went national in Whole Foods.  Apparel line called Makerwear, launched with Neil Kohler, is in 200 Target stores and goes national this fall.  Still, Tait assured, “150% of my time is spent growing the passion brand called Golazo.”

Co ain’t talking much, but Amazonia brand of tropical bevs seems to be upending quite a few shibboleths in making decisive push into NYC, undertaking extensive outdoor ad campaign even as it changes brand name on the fly for twin sublines that were reformulated recently with lower calorie count.  Also, there’s persistent rumor on street that co has bought minority stake in its local distributor, Exclusive Beverage, tho nobody seems willing to confirm move.  Bottom line is brand packed in square-footprint half-liter PET bottles with bold graphics has been makin’ lotsa noise and seems to be attaining velocity in some channels lately.

(This picture of Amazonia’s activities has been pieced together from variety of sources, mainly outside co.  Brand owner Paulo Zottolo hasn’t responded to request for comment, and consultant Ed Newman, with brand since launch 4 years ago, would only offer a few factual clarifications, saying he’s constrained from discussing brand activities.)

Assault on NY started with splashy sponsorship of Governor’s Ball rock fest back in late May, just as city was finally climbing out of severe winter.  Brand’s Brazilian supermodel endorser Adriana Lima was involved in activities like kickoff party with DJ apl.de.ap of Black Eyed Peas, as well as Urban Jungle Workout at Aerospace NYC fitness studio of her trainer, former middleweight boxing champ Michael Olajide Jr.  Meanwhile, Urban Jungle Oasis sampling truck started working streets of trendy nabes.  The 3-day, multistage fest itself was held from Jun 6-8 on Randall’s Island and featured acts like Jack White, The Strokes, Skrillex and Vampire Weekend, with Amazonia among partner roster that included Miller Lite, Red Bull, Don Julio’s Tequila and Tito’s Vodka.  At fest, Amazonia mustered sampling stations, face painting, photo booths and VIP tent with foosball and free drinks.  The ads, running out of home, online and in trade mags, feature sultry closeups of Lima or fellow endorser Cintia Dicker with somewhat tribal-looking hair treatments, under exhortations like “Restore your wild side” or “Amazonia Power” and product descriptor “Brazilian Born Coconut Water + Legendary Amazon Extracts.”  Outdoor ads flag Amazonia as available at city’s ubiquitous druggist Duane Reade.

Unusually, tho ads depict bottle that’s been rebranded from Amazon to Amazonia, much product encountered on retail shelves by BBI feature old brand, perhaps reflecting tricky timing of marketing push just as peak season kicked in.  Various theories have been heard about brand change, including threat of litigation from Amazon.com and co’s conclusion that Amazon name may have misled some consumers into believing brand is made from Amazon River water.  Co also has recently reformulated brand, using stevia to reduce calorie count in coconut water/tea line (20% coconut water, now with 30 calories per serving) and water line (10% coconut water, now with 5 calories).  Co also has is now rolling out 100% coconut water in plain version and 3 flavors.

On distribution front, brand recently segued in NY from Preferred to Exclusive, which has shown knack for getting cutting-edge bevs placed in Duane Reade chain.  Several sources tell BBI co has taken minority stake in Exclusive, as way of strengthening tie to shop at time heavy marketing investment was about to kick in.  During push, Amazonia has operated storefront on Manhattan’s 23^rd St, just down block from Exclusive’s office.  Asked a coupla weeks ago about investment, Exclusive cofounder Steve Gress said it’s not true, while Newman wouldn’t discuss matter.  Elsewhere in country, co appears to have scrapped initial plan of going via DSD out west, exiting wholesalers in region in favor of broadliners like UNFI and Kehe as it has from start in eastern markets outside NY.  Direct customers include likes of Harris Teeter grocery chain.  Brand has been sold in Brazil and US and is about to open Dubai, it seems.

Acquisitive natural foods distributor Kehe has closed in on another deal: it’s agreed to buy Calif-based rival Nature’s Best, in prospective deal that would put it closer to equal footing with segment giant United Natural Foods (UNFI).  Deal announced today for undisclosed terms adds to Naperville, Ill-based Kehe the 2 warehouses operated by Nature’s Best in Chino, Calif, and Flower Mound, Tex, as well as its Cadia controlled brand to mix, 4 years after Kehe acquired Tree of Life.  (The Nature’s Best being acquired is not to be confused with marketer of Isopure supplements operating under same name.)  “Nature’s Best’s 2 LEED Gold-certified warehouses, state-of-the-art warehouse management system and highly respected Cadia product line will be significant and immediate enhancements to our value proposition,” said Kehe prexy/ceo Brandon Barnholt.  Outsiders likewise agreed this is significant step.  “Kehe is on the move,” said Bill Sipper, managing partner at consultant Cascadia Managing Brands, which has many natural-foods clients.  “For years UNFI has been almost the only national player out there.  Kehe, with its acquisition of Tree of Life a few years ago and Nature’s Best today, is back in the game and making this a competition.”  Kehe, which is employee-owned, has 3,500 on payroll in US and Canada.  BMO Capital Markets is acting as financial advisor and Winston & Strawn LLP as legal advisor to Kehe on deal, which is subject to usual closing conditions.

Based on responses from survey of “over 15,000 C-store locations” in US, “it appears non-alcoholic beverage trends remain strong with +4% yr/yr sales growth projected” for Q2, reported Bonnie Herzog of Wells Fargo Securities.  Over 20% of survey respondents said they had sales gains of more than 10% in Q2.  Strong showing for bevs in that impulse channel “was driven by the ongoing strength in energy and bottled water/enhanced waters/sports drinks” which offset sales declines in, you guessed it, CSDs.  Improved weather was seen as biggest positive factor to drive sales, per survey, which offset negative hit from higher gas prices.

Monster Gains Slowed; Less Promotional in Q2  Based on survey feedback, Bonnie estimates Monster c-store volume “grew +7% in Q2” with “+2% net retail pricing growth.  Some of that “softness in volumes can be attributed to declines in promotional activity, which one retailers suggested was ‘a good thing.’”  While MNST volume “not as strong as expected” in Q2, she noted, “contacts continue to believe” MNST will still grow double-digits thru rest of 2014.    

A Crackling Fourth   C-store retailers reported “solid beverage sales growth” over July 4 holiday, with “half of all respondents” indicating their sales rose 5% or more.  That’s “solid improvement from last year, when only 22% indicated” sales rose that much, said Bonnie.  “This extends the solid results that c-store retailers saw over the Memorial Day holiday, and generally bodes well for both beverage manufacturers and c-stores,” she added.  Sales were up in c-stores even tho most reported July 4 weekend was “wetter and colder” than in 2013.

Fewer Promos This Holiday vs Last Year  “Based on our survey results, we think promotions increased only 0.7% y/y during the July 4 holiday,” wrote Bonnie, which would be “significantly below the nearly 4% increase” of July 4 holiday in 2013.  Convenience store operators fingered colas as being “the most heavily promoted category” over that key weekend, followed by energy drinks and flavored CSDs.  While, in general, “all manufacturers have become less promotional” over July 4 vs Memorial Day weekend, for this July 4, PepsiCo was seen as “most promotional across nearly all categories,” said Bonnie, particularly with its 2-liter PET bottle, which saw avg price down 14% from Memorial Day holiday period. 

Freestyle, Spire Dispensers Gettin’ Thumbs Down   Coke’s Freestyle fountain dispenser and Pepsi’s more recently intro’d Spire are technical marvels with way they allow for near-infinite flavor combos, but they continue to fare poorly in c-store channel.  “In general retailers still are skeptical about the format and its ability to drive incremental sales,” wrote Bonnie.  Comments she offers from unidentified c-store execs are unequivocal:  “No, we have looked at it repeatedly. No ROI, cost is more, alleged better quality, but how do you tell the market that--without saying you were selling an ‘inferior’ product?”  This from another:  “One Freestyle machine left.  Test did not go well in my chain.  Incremental cost of goods and disjointed distribution model a ‘killer.’”  And:  “Slows down traffic flow, customers want options and don’t prefer exclusive Coke or Pepsi.  Coke drinkers want Coke and Mt Dew drinkers want Mt Dew and we want both customers.”

Honest Tea’s Honest Kids pouched line has won spot in 334-unit Cinemark Holdings movie chain, sold both individually and as part of Cinemark’s Movie Snack Packs.  Cinemark is picking up healthier bev option in Appley Ever After and Super Fruit Punch flavors . . . Antioxidant-rich KonaRed brand is working trio of outdoor sports events as summer season kicks into high gear, starting with sponsorship of The Greatest Show on Surf event this weekend in San Clemente, Calif, followed by role as health bev sponsor on Jul 27 of 18th Annual Molokai-2-Oahu Paddleboard World Championships.  Also in mix is role as official supplier to USA Volleyball Cup 2014, featuring US men’s and women’s volleyball teams . . . Bev consultant Jim Tonkin, who’s played key roles at emerging brands like Zico Coconut Water and Nawgan, has taken board seat on Mix1 protein shake brand, which has relaunched under new ownership following demise as unit of chocolate maker Hershey.

No, readers, we didn’t know we had a beverage art beat, either.  Turns out, tho, that there’s ingenious sculpture on display on NY’s heavily trafficked High Line elevated park that takes deliciously mordant poke at branding and positioning of cold-pressed juice brands like BluePrint and Suja, and at aspirational marketing in general.  Work by Josh Kline positioned at south end of High Line near Standard Hotel is in form of mock (but locked) vending machine stocked with square-footprint bottles of BluePrint-like bevs with absurd flavor names and itemized lower-case ingredient lists that drop appetite appeal to new low.  “Williamsburg” flavor, for instance, is comprised of “credit card, american apparel, kale chips, kombucha, microbrew, quinoa, agave” (all ingredients that seem to actually be in reddish liquid).  Pink-hued (and very cloudy) Anarchy flavor employs “infused vodka, axe body wash, protein powder, red bull, self-tanner, banana, dhea.”  “Think of ‘Skittles’ as Duchamp’s ‘Bottle Rack,’ updated for the age of aspirational marketing, when even a smoothie can be spun as a status symbol,” offers New Yorker mag, in review of various “plop art” that’s landed atop High Line lately.  (That piece, with pic of Kline’s faux vendor, can be found at:

 http://m.newyorker.com/arts/reviews/2014/06/09/140609goli_GOAT_art_scott .)

In increasingly crowded cold-press sector, NM-based ’Tude Juice is hoping to stand out via renegade brand name, flamboyantly vibrant packaging and emphasis on apple-based “honest refreshment” rather than on cleansing, in phrase of cofounder Cedric Chastenet.  With cofounder Andy Knowlton, Chastenet has been rapidly broadening line, which now comprises 6 core apple flavors, but is adding 10 apple blend skus in Berry-red, Berry-blue, Raspberry Lemon, Cucumber Mint, Cranberry, Blueberry, Marionberry, Ginger Turmeric, Lemonade and Ginger flavors.  Tho partners are based in NM, line is produced in near growers in Wash State’s Yakima Valley, and Pacific NW is most developed market so far for 2-year-old brand.  As co has grown, it’s brought on seasoned exec as ceo, tapping former Niman Ranch chief Ryan Bohr for role.  On finance side, co has teamed with unidentified strategic investor from food side in Dec and is hoping to conclude fundraise by end of year.  Chastenet and Knowlton would like to pull in $5 mil or so in growth capital.  

Crucially, as noted, tho 10 of top dozen HPP brands are focused on cleanse realm, ’Tude is staying away from that, preferring to focus on “honest refreshment,” as Cedric put it.  That focus may well strike chord with some prospective investors who’ve been somewhat spooked by heavy reliance of segment on cleansing regimens that may prove to be a fad.

Memorable brand name was product of partners’ frustration after every name they sought to trademark proved to be taken.  Cedric’s daughter, then 15, said why not just call it ’Tude?  Realizing name could be leveraged into product names like Granny’tude and Fuji’tude, they went with moniker, conjuring “life is good” connotation, in contrast to other coldpressed juice brands that take themselves more seriously.  Brand also offered good umbrella under Grati’tude name for supporting good causes like food banks, Carbon Roots Int’l and Seattle program called Project Hero that sends inner-city kids to Univ of Wash biz incubator to learn about starting cos. 

Re-Sizing of Pack as Brand Reach Broadened to East Coast    Operating as Fresh Matters LLC (which also serves as corporate credo), brand launched 2 years ago in Metropolitan Market in Seattle, then cracked Pacific Northwest region of Whole Foods.  Working with consultant Cascadia Managing Brands of NY, it’s since added Safeway stores in Northern Calif and Pac NW, Kroger’s Fred Meyer stores in NW (in Taste of Tomorrow experimental set) and Costco’s LA region.  Among natural chains, brand is in Gelson’s, New Leaf, New Seasons and Mollie Stone’s.  In Midwest, brand has cracked Sendik’s and Marsh chains.  Albertsons stores in Pac NW should come aboard next mo.  So far, partners have relied mainly on broadliners like UNFI and Kehe, but they’ve relied on Green Shoots’ DSD capabilities to service Fred Meyer stores and are now adding DSD shop Dora’s Naturals in NY, where brand is in stores like Garden of Eden.  As brand moved eastward and logistics costs mounted, team recognized that its aggressive pricing was proving vulnerability.  With some consumers complaining that 16-oz was too big a pack for juice anyway, they downsized pack to 12-oz, in process knocking down frontline from $3.49 to $2.99, putting cold-pressed item on competitive level with mainstream refrigerated juices like Naked, Odwalla and Bolthouse Farms.  Brand info at TudeJuice.com.

How Partners Got Rolling   French-born Chastenet ran food-import biz that he sold to FoodMatch, while Knowlton is former teacher whose wife ran cheese co while they lived in Wis.  They met thru their daughters, at time Knowltons were into home juicing.  Spotting biz opportunity, they embarked on road trip to Colo and Pacific NW to witness then-fledgling HPP efforts, eventually building test facility in Kent, Wash.  Drawing down their 401-K’s, they bought European processing equipment that failed to perform to spec, eventually getting most of their money back and relocating processing facility to Prosser in Yakima Valley, closer to growers, this time using gear that’s leased, not purchased.  Painstakingly developed process relies on keeping food as cold as possible, with fruit received at 32 degrees, speeding thru cold-press process and getting dose of vitamin C for antioxidant content and to help with color.  Liquid is then shipped to toll processor in Portland, Ore, for HPP treatment.  Juice is positioned as “100% Northwest Fresh.”

Why You Should Never Break Down Your Expo Booth before Closing Time    Key break for ’Tude occurred when, on Sun afternoon at 3:59 PM, during last minute of 2013 edition of Natural Products Expo West in Anaheim, Calif, Whole Foods purchasing coordinator Dwight Richmond ambled by booth.  Partly as result of fortuitous contact, brand is now in 7 Whole Foods regions.

CytoSport has gone organic, with special Muscle Milk subline just going into end caps at Target Stores nationwide.  Muscle Milk Organic debuts in 8.25-oz aseptic boxes sweetened with blend of organic cane sugar and stevia and offering 15 grams of milk-based protein.  Calorie count is 120 per box.  New line, in Chocolate and Vanilla flavors, is being promoted at $8.99 per 4-pack in the Target end caps.  Going to certified organic status is big step for co whose core line doesn’t even play in natural sections.