Beer Marketer's Insights
FANCY FOOD SHOW: ChaiElixir, from Okla Entrepreneur, Offers Bottled Chai that's Lightly Effervescent
The 20-year Coca-Cola vet arrived recently after long run at Odwalla (BBI, May 29), where he essentially rendered his last position redundant by completing rationalization of Odwalla distribution network and sales force. That made it good time to move on rather than seeking new KO assignment, and Cheribundi and its core investors Emil Capital and Cayuga beckoned, seeking someone who could take brand to next level. (Founder Brian Ross was encouraged to continue running sales, but instead decided to move on to natural-food opportunity at Made by Nature while remaining an investor and helping with Pear's transition.) Before he would enter serious discussions, Pear said, he took Cheribundi's 7-day challenge to see for himself whether brand truly is efficacious for someone who works out as strenuously as he does, and came away a convert. So key driver will continue to be to enlist consumers to take 7-day challenge: so far, 2,300+ have signed up over past 6 months or so, and only 3 claimed it didn't work. Some 80% went on to become repeat users. Key to marketing will be to "blow out" that program, he said. Pear said he's remaining in Houston for now, overseeing staff mainly operating out of Boulder, Colo, and production partner tied to Cornell Univ in upstate NY, with decision on whether to relocate deferred to end of year.
Tho it's early days, Pear said it's already clear that 8-oz size of core line isn't ideal at retail in terms of garnering shelf presence or sense of value among shoppers at its $2.49 price. In juice category where consumers have proved willing to pay higher price for larger pack, it may make sense to move to 12-oz pack at $3.99, he figures. Multiserve pack (32 oz) of core line does well, tho, Pear noted. (Recall Odwalla has had experience with issue, weathering considerable consumer blowback when it downsized its single-serve pack in interest of lowering price point and calorie count.) Complementary Refresh line offered in half-liter bottles to offer enhanced-water-like refreshment experience at more affordable price point has won interest among retailers, Pear said, but its overall velocity has been disappointing. He believes brand doesn't offer enough functionality to justify price that's still considerably higher than alternative enhanced waters. So that line is being re-evaluated as to size, price and flavors with view to making sure it's sustainable over long term. In meantime, he termed Emil and Cayuga "very supportive" as he gets hands around brand.
CytoSport has been on block since last fall after an earlier attempt to sell co hadn't proved fruitful, and after Hormel "weighed several deals outside the meat industry," including Unilever's Ragu spaghetti sauce, it turned its sights on protein-rich bevs. Among reported impediments to sale were qualms some potential strategic acquirers retain about use of "milk" in name of brand that contains no milk, as well as challenging financials given cost of protein in segment in which prices have been gradually cresting down. For that reason, protein suppliers like Ireland's Glanbia had been often reported to hold strong hand in bidding, given their ability to reduce CytoSport's costs via vertical integration, and while Hormel meets that qualification, its name hadn't surfaced as prospective acquirer. PepsiCo, which distributes Muscle Milk in US, had also been considered a possible bidder, tho this outcome likely means its alliance will remain in place for foreseeable future.
Assuming $450 mil price is correct, that would represent modest premium garnered by founding Pickett family and key holder TSG Consumer Partners, for brand that Hornell said it expects to generate $370 mil in sales for full yr 2014 and that has so far been barely challenged for supremacy in US market despite numerous attempts. During TSG's 7-yr tenure as investor, sales more than quadrupled, noted managing dir Brian Krumrei. During earlier foray into market, CytoSport was reportedly seeking $1 bil or more. Father-son team of Greg and Mike Pickett will remain involved in day-to-day operations, they assured in statement. "We view this new opportunity as a tremendous way to expand the CytoSport brand presence on the global scale," said Mike.
LaCroix Sparkling Water has broadened flavor range with 3 new sku's, upgraded can graphics and filled in remaining voids in Whole Foods footprint. The new flavors intro'd at Summer Fancy Food Show, Apricot, Mango and Passion Fruit, just shipped exclusively to Target stores chainwide. Meanwhile, parent National Beverage is deliberately working to build its Curate ("cure yourself" in Spanish) flanker brand, intended as more accessible off-ramp into sparkling essences for those who're moving away from diet sodas.
The 33-year-old La Croix brand has quietly garnered slot as top domestic sparkling brand, vaulting past sparkling entries of brands like Poland Spring and Vintage, its success in some respects echoing that of Talking Rain on sweetened side with its 25-year-old Sparkling Ice brand. But National execs tend to view Ice as participating in completely different segment from their unsweetened, uncolored LaCroix bevs.
Encountered at show, trade promos mgr Nicole Cheifetz said new Mango and Apricot flavors are available to other chains, several of which are showing interest. And brand in recent months has landed last Whole Foods regional holdouts, North Atlantic and Northeast regions, "final frontier" in chainwide ubiquity within natural foods leader. Next priority is developing presence in major grocers in region, supported by sampling team that's been established there and alliance with NY-based Gotham Brands to offer tactical support in challenging market.
Curate represents interesting strategy by National ceo Nick Caporella to offer easier glide path for diet soda drinkers seeking alternative, in process bringing in more Millennial consumers and obtaining a bit more price realization. It's kind of cultural mashup, melding French and Spanish words in its 2 flavors names, Pomme Baya (apple berry) and Cerise Limon (cherry lime) with more vibrant package graphics and stronger flavor profile than La Croix. The 12-oz slim-can entry gets slight premium at retail to La Croix - $1.19 vs 99 cents. It's out so far in single cans and 8-packs only.
LaCroix (pronounced as Americanized "La Croy") was launched in Midwest and continues to employ its legacy DSD shops there such as Central in Chicago and RL Lipton in Ohio, but otherwise it takes warehouse route for most chains (and goes direct for some customers, like Publix and Target). It serves natural channel via broadliner UNFI. Among key elements of product proposition, it's naturally carbonated and flavored, using natural extracts, and its workhorse package is 12-oz can and related fridgepack, touted for convenience and recyclability. (Its 1-liter bottle was just picked up by Target in 3 flavors, but that package remains low priority within mix.)
Tho scores of brands have sought to offer purportedly healthier energy lift than big canned brands like Red Bull and Monster, few have garnered much traction, but Mamma Chia founder Janie Hoffman believes that's because they focus on the bad ingredients they're leaving out rather than containing range of complementary ingredients that help create sustained energy lift: 2,500 mg of Omega-3's, 6 g of fiber, 4 g of protein. Janie said co was approached by Runa about using its guayusa in energy line, at time that Mamma Chia was quietly well along in trying to develop its own energy line. It didn't hurt that both cos employ Grace Venus to formulate new products.
Core Line Goes Chainwide at Target Here's further testimony to mainstreamability of chia: core Vitality line of Mamma Chia is due to go chainwide at Target in 6 flavors by Sep. Mass retailer also has agreed to pick up forthcoming Vitality + Energy line for about 300 of its stores, Mamma Chia execs said.
Eisner, recall, cofounded Activate with Burke Eiteljorg as early and prominent brand to harness cap-dispensing technology, backed in part by Eisner's father, former Disney chief Michael Eisner, who's been closely involved in venture. Brand made waves when it captured significant investment by Indian conglomerate Tata and undertook aggressive rollout via DSD channel. Despite inventive marketing campaigns by former Honest Tea marketing exec Jesse Merrill, consumers proved slow to respond to premise of paying premium for technology that would keep nutrients fresh until moment of consumption, at time that leading enhanced water, Vitaminwater, has become loss leader in many chains. A year ago, Tata bailed on venture and Eisner was able to regain control, narrowing geographic focus of downsized co and preparing more deliberate rebuild of presence. Other proponents of cap-dispensing technology appear to have similar struggle to get concept to ignite.
Brand idea was launched 6 years ago when, his housekeeper's car failing to start, Langlais drove her to supermarket, rare foray for him into US retailer. He encountered bewildering array of bevs but no mint-based choices. He immediately called lawyer to register trademark, but it sat on shelf thru coupla renewal cycles before Langlais enlisted Power Brands and its prexy Marty Brown to get it moving. Drawing on his Latin American experiences, where Americans may be referred to as "gringos locos," he named energy subline Diabolo Loco. His sculpture career is on hold now as he strives to master intricacies of bev biz and build new brand, he said.
Changes at Jones Soda Jones Soda said its principal financial officer, Carrie Traner, is exiting co today because of personal family issues. She'll be succeeded by Mark Miyata, 32, who's served as controller since Apr after jobs at software co and Grant Thornton accountancy. Traner will continue to consult. Also, 13-year co vet Eric Chastain, 43, most recently vp operations, is being promoted to coo. Co's ceo remains Jennifer Cue.
Inaugural competition between 4 new bev brands staged at recent Beverage Forum in NY under name The Big Pitch featured pitted bottled water, mint-flavored soda/energy line, mixable soda line and ultimate winner, "hydrating protein drink" called Go Body. Here are quick takes on all 4.
Diabolo Turns French Fountain Classic into RTD Soda, Energy Lines French surgeon turned sculptor and art collector named Michel Langlais has picked up on century-old French fountain refresher called "diabolo menthe" that melds lemonade and mint, and turned it into RTD line under Diabolo name, in glass-bottled sodas and canned energy drinks both labeled as "French soda." Langlais, who's resided in Long Island's Hamptons for many years (see People item below), was able to use Diabolo as brand name since word was in public domain. Working with LA-based incubator Power Brands, he's rendered it in more healthful version intended to strike a chord with natural-food and specialty shoppers. Both lines are offered in Dragonfruit Plum, Blueberry Lemonade, Mint Lemonade and Tangerine Pomegranate flavors. Soda line lately has been reformulated to drop sucralose and go with all-natural sweetener combo of cane sugar, stevia and erythritol, at 30 calories per 8-oz serving. Brand has quickly won 1K retail accounts in Southwest quadrant and Pacific NW, has executed radio ads with Albertsons chain and has had brand ambassadors working art events tied to LA County Museum of Art and ArtWalks and charitable events like Komen breast cancer walks. As he moves to scale up effort, Langlais has brought aboard food, bev and retail vet Jon Pevehouse as vp sales and merchandising. Info at DrinkDiabolo.com.
Go Body Offers Hybrid Protein Hydrator Go Body Hydrating Protein Drink takes spot among new breed of hybrid drinks like Body Armor and Nu Aquos that meld categories like sports drinks, protein drinks and enhanced waters. Fitness expert Kip Alexander created line that employs whey protein isolate, coconut water and prebiotic fiber with only 8 g of sugar. It's gone out into Southeast accounts at $3.99. Bev Forum judges lauded overall concept but decried flavor as cloyingly sweet, tho Alexander was quick to say it's early days and brand will be tweaked as needed. Info at GoBody.com.
Live Me Offers Elegant Tonic, Other Soda Blends Live Me by Borney is boutique soft drink line in elegant straight-walled bottles in ME Tonic, ME Citrus and ME Orange flavors - flavor names that perhaps understate subtlety and complexity of formulations. (Tonic, for instance, includes quinine, yuzu and black pepper essence.) Brand rep Chris Almonte said brand launched in just Tonic flavor in Spain a year and a half ago, then hit Portugal and Mexico, with about 1.5 mil bottles sold to date, validating concept. Brand has big company behind it - marketer of Dominican rums and other spirits. Brand name "Me" aims to play on popularity in Europe with western/American themes. Brand is priced at $1.99-2.49, Chris said. Info at Live-Me.us.
Aagwatt Offers 'Hydrocation' Bottled water line launched by Chicago-based law student offers premise of putting essential academic concepts on labels, thereby both hydrating and educating consumers - hence name for core brand, Hydrocation. Brand uses Mich-sourced artesian water. It actually cracked some 7-Eleven and Shell stores on W Coast, but didn't stick there, and now has turned sights on indie retailers. One judge, Rabobank exec dir Ross Colbert, told presenter gently, "You probably have a brighter future as a lawyer, but I love your enthusiasm." Info at Aagwatt.com.

