Contrary to some predictions, yerba mate segment hasn't taken off yet, tho awareness of South American energizing tea has grown. Now Toronto-based juice co Treehugger Organics is looking to offer new line, Rio Mate, that might occupy spot between RTD pioneer Guayaki and more mainstream-oriented Herbal Mist, including rare unsweetened mate. Tree Hugger Organics is offering line in 473-ml straight-walled glass bottle in Unsweetened, Lemon and Classico flavors. Mate leaves are sourced in Brazil, but they're roasted and bottled from concentrate in N Amer, said Treehugger's David Kirchmann. Line is currently available in NY via specialty Brazilian distributor but co is seeking DSD shops in markets like Northeast and Chicago. In Canada, it goes out via UNFI. Organic cane sugar is employed for 2 sweetened sku's, which go out at 70 calories per bottle (Classico) and 90 calories (Lemon). Labels are in English and French. 

Looking to keep innovative edge on glass-bottle, natural-food side, Honest Tea has added Heavenly Lemon Tulsi flavor, picking up on fastest-growing dry-tea segment and offering another option for those looking to avoid caffeine. Indian-sourced tulsi, known as "holy basil," is blended with lemon peel, lemon myrtle and lemongrass for lemon-intense flavor. It's lightly sweetened at 35 calories per serving. Honest Tea also used Natural Products Expo East to fill surprising gap in portfolio, that of lightly sweetened green tea, with Classic Green Tea, also at 35 calories. It's meant in part as complement to unsweetened Just Green Tea, which has showed surprising mainstream acceptance in retailers like Publix grocery chain in Southeast.

Cutover to Coke Now Complete for Plastic Bottles That's on glass-bottle side, which still goes to market outside Coke bottling channel. Plastic-bottle biz, tho, now has cut over completely to Coke bottling system with expected exceptions just of Big Geyser in NY and Honickman Group in Mid-Atlantic states. Bottlers have committed to taking 6 key sku's, said founder Seth Goldman. Unlike beginning of Coke alliance, when co unwittingly created channel conflict by offering top 4 sku's to Coke system, there is currently no overlap between glass-bottle and plastic-bottle lines, Seth said.

Honest Goes All Fair Trade, All the Time on Teas Co has now extended Fair Trade certification to its entire line of bottled teas, 28 in all. Co was 1st significant brand in RTD realm to add certification, starting with Peach Oo-la-long flavor in 09. Before latest announcement, effective in Dec, it had 19 varieties certified. Transition should be done by end of Q1. Co also has launched 1st annual mission report, Keeping It Honest, that offers detailed accounting of its social and environmental initiatives ranging from products and packaging to cos it does biz with.

College Kids Are as Honest as Wall Streeters. Or Dishonest Remember Honest City program? That's buzzed-about initiative that measured how many folks duly paid $1 for their bottle picked up at unattended Honest Tea racks erected on city streets in areas like NY's Wall Street, drawing gobs of media coverage in process. Now co has extended it to campuses, stoking rivalries between, say, USC and UCLA in LA. All are coming out in same 80-89% range, suggesting college students are as honest as - or no more dishonest than - Wall Streeters.

Coke Buy Looks Like a Go, So Far With brand up 50% YTD, general expectation is that KO is likely to exercise option in Feb to acquire rest of Honest Tea, tho Seth is expected to maintain role at co. No comment from him on that, but he did note that KO wouldn't have reason to question investment, with Sep volume doubling and even more-established natural biz rising 30%. Recall that Coke owns about 40% of co, which offers it shelf-stable play in natural channel (Odwalla has offered entrée on refrigerated side). Array of products that KO has been launching into natural channel - from Russian-sourced kvass to new Japanese unsweetened tea - seems to reflect its ambitions to become welcome player in channel, effort boosted by Honest Tea connection.  

At Natural Products Expo East they would seem to be "natural" allies: the broad category of natural foods, a prerequisite for exhibiting at Boston show, and subset of natural foods that's been certified as organic. But as panel at expo made clear, there's growing fear among organic players that their hard work is being undermined by merely natural players, given evidence that many consumers don't really make distinctions between the 2 categories. "The majority believe 'natural' foods adhere to the same requirements as 'organic' foods," lamented Christine Bushway, exec dir of Organic Trade Assn, in account posted by Natural Foods Merchandiser. Added Nicole Dawes, co-founder/ceo of Late July Organic Snacks: "The industry's 'organic' message is being co-opted by 'natural,' and I believe we need to draw a line in the sand."

Most panelists rejected idea of creating federal definition for "natural" on grounds that it would be time-consuming and that "natural" is not a genuine "movement" anyway. Instead, several offered more radical rec: merge "organic" with "natural" or eliminate the term "natural" entirely as acceptable on labels. "'Natural' should be 'organic' because that's what the consumer already thinks," argued Dag Falck, organic program mgr for Nature's Path. "I know it's a radical approach and won't happen overnight, but maybe that's the most logical step."

Late July's Dawes suggested that term "all natural" and other "subjective" terms be prohibited because food and bev industry has already defined "organic." She also suggested simplifying organic tiers by putting percentages of organic ingredients on green USDA Organic seals instead of elsewhere on product labels. 

New Leaf Brands has pulled in some $1.6 mil in new capital, with perhaps another $5-6 mil on way, moves that are likely to be reassuring to distributors and other partners who've worried that NY-area co has been burning capital too quickly during rollout of New Leaf teas/lemonades. In 8-K filing, marketer of New Leaf teas and lemonades said it completed last week a unit offering of aggregate of $2 mil (including previously reported $1.65 mil of bridge notes and warrants to accredited investors, via placement agent Hudson Securities. Bridge notes were sold at original issue discount of 12% and have 90-day maturity. Each unit sold consisted of $1K principal amount of those notes, plus warrants to purchase 1,200 common shares at 25 cents per share. New Leaf sold 2.4 mil warrants to accredited investors in conjunction with offering, 8-K noted. Speaking at recent NACS c-store show, coo Bill Sipper said co was hopeful of bringing in additional $6 mil, perhaps via rollup with other co, to help support rollout. As agent in latest transaction, Hudson received $89K fee and 266,760 warrants. 

On heels of acquiring N Amer operations of bottler Coca-Cola Enterprises, Coca-Cola beat most analysts' earnings estimates for 3d qtr, augmenting growth rate in core N Amer market with a flattish performance on CSDs more than offset by continued gains in noncarbs. Net revenues in Q3 rose 5% to $8.42 bil (8% once currency impact is excluded). Price/mix for qtr was up 1%. Reported operating income rose 9% to $2.34 bil. For YTD, operating income was up 13% to $7.29 bil, on 5% rise in net operating revenues to $24.63 bil. Internationally, period saw Japan return to volume growth and China return to double-digit growth.

Chmn/ceo Muhtar Kent wouldn't allow himself a victory lap yet, but he did offer this assessment vs state of co back in Jun 08, when newly minted ceo promised to stabilize N Amer operations and return them to sustainable growth: "In no way are we declaring victory . . . in the process of stabilizing . . . even in the midst of the most severe crisis . . . our investments are paying off . . . alignment with our bottlers is paying off . . . now we'll accelerate that with this historic transaction . . . go into that transaction from a position of strength." Company remains "constructively discontent," he said at another point.

Analysts generally praised performance, even as 1 wondered whether it may have set its ambitions a bit low. "Coca-Cola results were once again 'ahead of their long-term algorithm,' which makes us wonder if the algorithm is too low," wrote UBS' Kaumil Gajrawala. "We believe it is. Based on the company's own Vision 2020, Coca-Cola will need to continue beating its algorithm through the next decade." Still, Kaumil views qtr as positive, "as KO demonstrates a solid balance of revenue growth and measured investment/cost management, all while increasing its cash return to shareholders."

N Amer Volume Growth Accelerates, tho Still Slow; Vitaminwater Up in Low Single Digits, Powerade +32% N Amer continued to weather dicey economy well, with volume growing 2%, for 2d consecutive qtr of positive organic growth, Muhtar noted. For ytd, volume is up 1% in key territory, vs 2% decline in year-earlier period. Tho rival PepsiCo has been claiming share gains on CSDs, KO claimed is real winner across all channels rather than just measured ones which rep less than 40% of biz, Kent noted. Overall CSDs were flat in volume but Coke Zero scored double-digit growth for 18th consecutive qtr and Sprite brand moved into positive territory. Fanta had strongest qtr of year, +4%. Freestyle vending machine that allows consumers to customize sodas is on track to have presence in 15 markets by end of year.

Meanwhile, noncarb biz continued to accelerate in N Amer, rising 8%, 5% for YTD. Juice/juice drinks were led by 23% growth from Simply franchise, while Gold Peak Tea was up double digits on both bottle/can and foodservice sides. Energy portfolio was up 15%. While most of that would be via allied brands like Monster, it included double-digit performance from Coke-owned NOS.

Tho Glaceau has been embarrassment since $4 bil acquisition in 07, Muhtar made case that, with Powerade brand incorporated in operation, it's panning out. Since Glaceau acquisition, joint Glaceau and Powerade brands have gained more than 7 points of share from rival's combined sports drink/hydration offerings, he argued. In latest period, Glaceau was up mid-single-digits, continuing its sequential improvement, even as Powerade surged 32%, gaining share for 8th consecutive qtr. (But most of Glaceau gains came from Smartwater, with Vitaminwater growing in low single digits.) Kent said Powerade performance was due not to price discounting but to innovation, consumer engagement and brand building. (Note, tho, that restage of rival Gatorade has included intentionally abandoning some biz as not true to brand's identity.)  

Red Bull Stratos Challenge, which was going to attempt a freefall from edge of space, has been put on hold because of suit filed in LA Superior Court by man who claims he originally brought idea to co back in 04, reported DiscoveryNews. Daniel Hogan filed suit claiming since he pitched similar plan to Red Bull, he's entitled to damages and share of profits, which "could be as much as $625 million," per his complaint. Red Bull has been prepping for jump by daredevil Felix Baumgartner and had "crack team of scientists" to assist in preparations for event by year-end, noted Discovery. Plan called for Felix to jump from 120,000 feet, aided by "stratospheric balloon," in hope that he would break sound barrier before deploying his parachute. Red Bull insisted it "has acted appropriately in dealings with Mr. Hogan, and will demonstrate this as the case progresses."  

It's garnered some attention around NY in recent mos: evocatively named Dream Water rest-inducing line out in 8-oz bottles and 2.5-oz shots, primarily in Duane Reade local drug chain. Line was launched by Lekach family, fragrance vets who also launched and sold Perfumania retail chain, said Joseph Lekach, evp of sales and biz development. Bottled line is available in Lullaby Lemon and Dream of Kiwi & Plum flavors, while shots go out in Lullaby Lemon and Snoozeberry. Dosage is identical in 2 lines; shots' advantage is they can be carried thru airport security for help in falling asleep in-flight. Brand is positioned around sleep and health, rather than in cluttered relaxation category where bevs' efficacy can be harder for consumers to judge.

Among noteworthy elements, line contains gaba (gamma amino butyric acid), focus-enhancing ingredient that emerged in this country at heart of Jones Soda's ill-fated Jones Gaba line. Also in blend are melatonin and Tryptophan 5-HTP. It's sweetened with some sucralose, tho by end of year co hopes to be able to swap that for more natural sweetener so it can claim to be all-natural. In coming weeks it also will launch 3d flavor targeting just DSD channel. So far, DSD shops who've come aboard include Geyser, former Red Bull house in Bay Area, and new shop called South Florida Distributors, Joseph said.

At retail, co looks to get brand place in sleep-aid section, for legitimacy, and then at front end, where velocity is higher. That was pattern at Walmart stores, where co is in 1,000+ stores as of 5 weeks ago, Lekach said. Also aboard are entire Walgreen network, as of 2 weeks ago, GNC chain and Duane Reade and Kmart stores in metro NY. It's begun airing late-night TV ads to support brand. Asked about funding, Joseph described current investors as "high-net-worth investors including my dad." Family has liberally drawn on fragrance connections, including flavor house, in getting launch going. 

Having gotten Drank launched among the under-30's, Memphis-based Frontier Beverage now is setting its sites on older demo, offering Unwind as lower-calorie, less intensely branded relaxation line for those over 30. "Same technology, with acai, goji and less sugar" (40 calories), is how Peter Bianchi, ceo of affiliated co Innovative Beverage Group, explained it at big booth at last week's NACS c-store show. Unwind becomes 2d of planned "holy trinity" that will next add zero-calorie, zero-carb line sometime in 2011, perhaps Q3, Peter said. Unwind debuts in 3 flavors: Goji Grape, Pom Berry, and Citrus Orange. With Drank soon adding 2 flavors, that will leave 2 lines with 3 flavors each, all packed in 12-oz slim cans. Also on display was Bulldozer, 3-oz shot version of Unwind. Core line is now in 31 states, Peter said, including every major metro except some (including LA) in Calif, Wash and Utah out west. Typically brand targets Bud houses but network includes blend of Coke, Pepsi and Miller shops too. Newly aboard is Phoenix-based Grand Canyon, to work entire state of Ariz. As for Unwind, so far that's only entered Honickman operation from NJ south to Va and co is considering its options beyond that. Recall that Drank got hit with FDA warning letter earlier in year, but Peter said that was easily remedied technical issue, when co erred in putting nutritional rather than supplement table on label.  

Rob's Really Good, constantly evolving line launched by Pirate's Booty creator Rob Ehrlich, has taken a bunch of new twists and turns on way to exhibit at Expo East. Revamped lineup drops organic certification in favor of more straightforward all-natural positioning, move that simplifies procurement and allows for lower price point. Also gone is menagerie of quirky-looking animals on label in favor of simple hypnotic swirl at center of label, in quest of greater shelf impact. Meandering uplifting label copy has been dropped in favor of more emphatic, larger-type Be Positive message. And with channel intrigued by development of veggie-based Salad flavor, Rob's going further in that direction with sku's like Veggie Energy, Yam Bam Thank You Ma'am (sweet potato) and future items based on broccoli, cauliflower, etc. Ancillary benefit is it may restore brand to some Snapple houses that were forced by that supplier to drop Rob's when it was primarily tea-based brand. Tho organic is a memory, Ehrlich plans to adhere to Whole Foods' Whole Trade version of Fair Trade sourcing of ingredients. Meanwhile, on distribution side, co has split with NYC distributor Exclusive, tho nothing set on successor house, per Rob. He said brand is having good run at Peerless in NJ, as well as some DSD shops in New England. 

Among Big 3 coconut water players, Zico appears to remain only 1 not committed to moving exclusively into major soft drink network as it continues to expand footprint. While rivals ONE Coconut Water (Pepsi) and Vita Coco (Dr Pepper Snapple) will only be adding shops from those networks, Zico will continue to go to mix of Coke bottlers and outside shops, despite Coke's holding small stake in co. That was clear with latest moves, which is seeing Zico add Coke bottlers in South Florida and Philadelphia, but also indy house Central Distributing in Chicago, said ceo Mark Rampolla. Best house for the job continues to be mantra he said, and LA-based co continues to talk to Bud houses and others outside Coke as brand expands footprint. He noted that 2 new Coke houses will only be getting plastic-bottle line, not aseptic packs. Meanwhile, that line has bowed to requests from consumers and channel by adding Mango flavor. Also coming next mo, initially just in NY via Big Geyser, is 1-liter tetrapack. Tho co made waves by being 1st to depart from aseptic-only packaging lineup, "we remain very committed to the Tetrapak," Mark said.