Shareholders of PepsiCo and Coca-Cola shares were likely paying attention this past week to eye-catching $$ in Wall Street Journal's annual CEO Pay survey. PEP's Indra Nooyi ranked #50 overall and was 3d-highest paid female ceo, at $18.1 mil in 2013. With other compensation, including $103K worth of personal aircraft use, her total compensation was estimated $19.3 mil for yr. KO's Muhtar Kent was ranked #58 in survey with $17.3 mil in pay and $20.4 in total compensation including nearly $240K of personal aircraft use. Starbucks founder/ceo Howard Schultz was paid $17 mil and ranked #63, per WSJ estimates. His total compensation was estimated at $17.2 mil, which didn't include any money for personal airplanes.  

Chalk up another win for soft drink industry as yet another tax threat on soft drinks was defeated this week. Latest proposal to be struck down was in Illinois, where Revenue & Finance Committee in state House voted down penny-per-oz tax by 7-2 margin, reported Chicago Tribune. "This is a middle-class regressive tax," said Rep John Bradley, who chaired panel.  

Pear is his name, and cherries will soon be his game. Cheribundi and core investor Emil Capital have tapped Steve Pear from Coca-Cola's Odwalla unit as new ceo, per several sources close to co. Pear, 5-year vet of Coke's Odwalla unit, most recently serving as prexy/gm, succeeds Brian Ross, who recently moved to newly created innovation role at organic food marketer Made in Nature (BBI, May 27). Before that Pear spent coupla years in sales role at Coors Brewing, per his LinkedIn page. Brian, who wouldn't comment on successor, told BBI via email that formal announcement was expected within week.  

With summer selling season officially under way now, Seattle-based Essentia Water is revving up sales and marketing engine with flock of new hires, promos tied to paddle board giveaways and national tie-in to Michael Franti yoga-and-music tour called Soulshine.

Under recently recruited exec team that includes Neil Kimberley on sales side and Paul Curhan on marketing side, marketer of high-pH water founded a decade ago by Ken Uptain has brought aboard trio of seasoned regional sales mgrs, including Activate vet Jessica Johnson in New England, FRS vet Craig Miller in Southwest, and Snapple and Pepsi Bottling Ventures vet Andrew Sorkin for Mid-Atlantic.

With New England having taken on particular significance with assignment of brand to Polar Beverages of Worcester, Mass, Essentia has also fortified team with Tyler Bradbury as regional marketing mgr. He's long had involvement in market research, brand ambassador and social media program development and special events for bevs like Powerade, Fuze and Red Bull and snack brand Popchips. To support Polar's efforts behind brand, Bradbury will have 6 trucks and 2 teams to manage, and is setting up brand influencer program around areas of yoga, nutrition and fitness, said Curhan, who boasts brands like Starbucks and Xenergy on his resume. (Plan doesn't call for major celebs, but rather more grounded folks with reach and credibility, Paul emphasized.) For its part, Polar has committed to making special drops at yoga and fitness studios where brand gets seeded. Brand's assignment to Polar Beverages of Worcester, Mass, had been sensitive issue because coupla members of Essentia brain trust have ties to rival NIDA network (BBI, Apr 10). With hydration a key theme of brand, Essentia has forged alliance with paddle board mfr Riviera for retail displays and incentives.

At national level, Essentia will be headlining water of Michael Franti Soulshine tour kicking off Jun 19 in Santa Barbara, Calif, and hitting markets like San Diego, Seattle, Chicago, Boston and NY later this summer. Each event starts with mass yoga and acoustic-music jam. Essentia will have event presence, perform sampling in some markets and do private party with Franti in Boston. Co is still sorting out DSD distribution in Pacific NW, parts of Midwest and NYC but expects to have network in place by time Soulshine rolls around to those regions, Ken and Paul assured BBI.  

Long-simmering feud between AriZona Ice Tea co-owners John Ferolito and Don Vultaggio over past 6 yrs finally reached court in Long Island, NY, yesterday. After many attempts to reach valuation figure for co so that John could finally exit by selling his half of co to Don, they're now looking for Supreme Court Justice Timothy Driscoll to decide co's worth, and not surprisingly their respective estimates are far, far apart. Based on offers from Tata, Nestle and Coca-Cola over years, John's attorneys "have pegged AriZona's worth as high as $4.5 billion" during opening arguments in courtroom in Mineola, NY, noted Reuters. Don's attorney argued co's value is as low as $426 mil, saying those offers "are worth nothing" because none were binding and are simply "fantasy." Don's attorney also asked judge to reduce whatever payout he and AriZona operator Beverage Marketing USA Inc must pay to John be reduced by $249 mil "because of conduct that hurt the beverage maker," wrote Reuters. This is reference to scorched-earth tactics Ferolito employed to dislodge partner from biz-as-usual stance that's undermined any prospect that overtures by Tata, Nestle, Coke or others might result in deal. With both sons involved in biz (how intently is matter of conjecture), Vultaggio aims to maintain co's independence, while Ferolito has long wanted to liquidate his stake and move on.

Heavy Marketing Behind Arnold Palmer Coolatta Could Offer Helpful Lift to Core Brand AriZona Iced Tea has landed major new format for its Arnold Palmer Half & Half line: national rollout as Coolatta entry at Dunkin' Donuts chain. After early test panned out, entry has been rolling out throughout chain's 7K stores, often receiving heavy promotion via window signage, in-store digital boards and other POS items. Jun looms as heavy media month with radio/TV ads on Dunkin's dime and heavy exposure around Nasdaq bldg in NY's Times Square, said Rob Marciano, evp and chief sales & marketing officer. He said arduous development process yielded plug-and-play item that fits right into existing Coolatta production process in stores. (No glitches when BBI editor ordered 1 in NYC store yesterday.) New entry, and associated ads, could offer helpful lift to once-torrid subline that's been relatively flat in measured channels over past year.  

Small study published in JAMA Internal Medicine jnl is undercutting notion that resveratrol - antioxidant found in red wine, chocolate and other foods - is helpful as anti-inflammatory or in preventing coronary artery disease or cancer. In study, 783 people over age 65 were tracked for 9 years. Of 268 people who died during this period, after adjusting for factors like smoking or physical inactivity, "there was no association of resveratrol levels with markers of inflammation, coronary artery disease, cancer or death by any cause," NY Times reported. Study's authors acknowledged larger sample might yield greater connection . . . American Beverage Assn is hailing to its members results of a new study, published in Obesity jnl, that concludes that diet sodas are just as good as water for shedding pounds. Study undertaken by Anschutz Health & Wellness Center at Univ of Colorado and Temple University's Center of Obesity Research and Education and entirely funded by ABA, employed randomized trial among 303 men and women over 12-week period and found that those drinking diet bevs with non-nutritive sweeteners (NNS) lost more weight than those drinking plain water. Further, NNS group "reported significantly greater reductions in subjective feelings of hunger than those in the water group." This comes as rebuttal to opponents of artificially sweetened bevs who've argued that the sweeteners, tho containing no calories, induce hunger and thereby contribute to obesity.  

Cheribundi prexy Brian Ross has left the marketer of cherry-based bevs, accepting a role as innovation chief at organic food marketer Made in Nature, where he'll report to ceo Doug Brent. Word had circulated in recent weeks that a change might be coming at Cheribundi marketer CherryPharm, which is controlled by Emil Capital, and in response to a message left last week, Brian on late Friday afternoon emailed press release detailing his appointment to newly created post at Made in Nature, like Cheribundi based in Boulder, Colo. Ross has enjoyed well-traveled career at progressive cos, having cofounded Organic Vintners and Oregon Chai and served as vp of biz development at Izze sparkling juices and ceo of Twist, maker of compostable cleaning items. At Cheribundi, where Emil Capital is core investor, he's tinkered with various packaging, pricing and formula versions in effort to accelerate growth. He didn't reply to follow-up email asking who's succeeded him at Cheribundi. At Made in Nature, Brian will manage initiatives in new markets, new production techniques and new distribution channels, announcement said.  

Energy drink volume slowed from 10% gain prior 12 wks to +7.4% in convenience stores for 4 wks thru May 10, per Nielsen figures reported by Wells Fargo Securities' Bonnie Herzog. With avg 0.7% decline in price, energy category sales slowed to +6.7% in c-stores, "slowest in over a year." Continued solid gains for Monster were offset by sluggish performance for Red Bull. Note that Easter holiday "may have dampened sales" as consumption is heavily weighted to working folks.

Monster Bev volume slowed to 10.2% gain (vs 14% gain for 12 wks) with avg price up 0.6% in c-stores last 4 wks. MNST's "core Monster Green and Monster Zero Ultra continued their strong performance," said Bonnie. Red Bull is also getting "strong performance" from core Red Bull brand but total volume slowed to +2.8% last 4 wks on -0.4% avg price dip. Rockstar, Coca-Cola and PepsiCo's energy volume trends were each worse for past 4 wks vs 12 wks in c-stores too. Rockstar was up 5.7% on avg 3% price cut. KO energy volume up 17.6% on 1.8% price increase. That's up from 21.9% sales gain on just 0.2% avg price gain previous 12 wks. PEP energy volume was down 0.7% on price drop of 2.5% last 4 wks.

CSDs Still Sluggish Carbonated soft drink volume slipped 2.2% last 4 wks in c-stores, slightly worse than category's 12-wk trend, while avg prices were in-line, up 3%. KO volume increased 0.7% last 4 wks as pricing came down to +3.4% vs +4.5% previous 12 wks. PEP volume slipped 4.2% with avg price gain of 2.8% last 4 weeks while Dr Pepper Snapple volume fell 2.8% on 2.9% price increase. Even with flat pricing, private-label CSD volume deepened slide, to -14% last 4 wks.  

It's still early days, but big bet by In Zone Brands to scrap its core Bellywasher and TummyTickler brands in favor of new Good2Grow brand seems to be unfolding according to plan, according to former Coke and FRS exec Carl Sweat, who was brought in by owner Jim Scott last year to orchestrate daring move away from artificial ingredients and high sweetness levels with view to putting Smyrna, Ga, co on right side of history.

After intro at NACS c-store expo last fall (BBI, Sep 26), initial entries of Fruit Punch in 8-oz bottle and Apple Juice in 6-oz bottle won placement at virtually all of In Zone's key accounts, including Wawa, Quick Trip, Casey's, and Racetrak. In more recent weeks, pair of V Blend veggie extensions made with non-GMO carrot, beet and apple juices have won abundant shelf space at retailers like Wawa, Kroger and Rite Aid and already hit full-year sales target, in process doubling flavor count to 4, Sweat said. So far, 80% of co's c-store customers have taken 1 veggie item, and half have taken both. Valero c-stores have just received shipment of both sku's and Walgreens is considering them for fall refresh, Sweat reported. And all 4 sku's are going national in cold boxes of Target chain this week, with partners working on meal combo deals for in-store cafes. Sweat hopes to get brand on Target's warm shelves, too, down the line.

Meanwhile, co is prepping for entry into water segment, evaluating 3 concepts that attempt to triangulate among the brands Honest Kids, Aquaball and Roaring Waters, for anticipated debut in late Sep. At time of NACS reveal, co said it was considering array of categories for future, even dairy.

Of course, In Zone's leap is considerably hedged by fact that brands' most identifiable feature may be licensed cartoon, movie and other characters employed in molded plastic bottle tops - from Mickey Mouse and SpongeBob SquarePants to Batman and Thomas the Tank Engine. Those kid-appealing toppers serve as powerful "tiebreaker" vs other brands that might similarly offer good taste and natural ingredients, while allowing co to segue from old downscale-sounding brands to Good2Grow. They also offer leverage with retailers: as part of alliance, for instance, Target gets exclusive on 4 toppers themed to Teenage Mutant Ninja Turtles. Given need to keep pipeline stocked with new characters, co expects to announce 2 more licensing deals at Licensing Show in Las Vegas next month. Still, for all stability those familiar characters offer, Sweat noted, "Jim is the quintessential entrepreneur" in willingness to take a $60-70 mil biz and "flip it on its ear."

Marketing is only just about to kick in. It will include print ads in books like Woman's Day and Real Simple, as well as videos on mom-frequented sites. One video opens with image of SpongeBob topper and cuts to closeup of mother with expression melding puzzlement and disgust, as voiceover intones, "You never understood his allure. But now he's serving up fruits and veggies in a bottle." It concludes with brand's tagline: "Good2Grow: Where healthy meets stealthy." In packaging, co has worked hard to differentiate between priorities of moms and of their kids. Thus, on bottle label, a kid "has to look really hard" to find image of carrot, Sweat said, while grocery multipacks tilted towards moms prominently play up the veggies. At some point, the videos may be used in paid TV buy if deemed successful enough.

Besides familiar figures atop bottles, a key lure is promise of $1.30 in profit per transaction for premium line, in contrast to "penny profit" of many rival juice brands, Sweat argues. That margin might allow brand to support DSD in key metros, with Carl citing NY, Miami and Chicago as likely possibilities.  

Up 55% in current month, Honest Tea is pushing to break $130 mil in sales this year, with fast-food restaurants a key target and further lift anticipated next year when brand gets folded into parent Coca-Cola's water, tea and coffee programs at retail. And within next 18 months, ceo Seth Goldman told Beverage Forum audience last week, he expects to offer first non-bev items under Honest brand.

Brand has been at interesting juncture, with owner KO clearly aiming to accelerate brand's path to coveted $1 bil in retail sales, Coke's metric for successful new brand. Last Nov it moved in consumer insights exec, Darren Marshall, from Asia unit as vp whose mandate included rethinking branding. But Marshall moved on to piano maker Steinway just a few months later, and new label for core bottled teas that eliminated hollow-T icon at center of label has been deferred, apparently amid second thoughts as to whether it trades away too much of brand's hard-won authenticity in favor of mainstream appeal.

Goldman didn't address any of this in presentation, but asked whether his growth rate was enough to satisfy KO, he pointed to 55% growth in current month - rate not seen since 05 - to offer resounding "yes." That's before any marketing has even kicked in. This year co should sell more than 11 mil cases ($130 mil in revs), vs 2.5 mil cases ($20 mil) at time KO made initial investment in 07, he said. It will procure 8 mil lbs of organic ingredients, vs 800K lbs in 07. Asked what it will take to get to $1 bil brand status, Seth called that "interesting challenge" but promised brand won't resort to standard paid media and other tools from more conventional brands' kit. However, it should get further lift when brand is folded into mix of KO's water, tea and coffee programs, putting it more squarely on radar of Coke bottling system, thru which plastic-bottle sku's move to retail.

In presentation Goldman flagged several key dynamics that should help him grow organic tea brand: segment continues to make inroads into foodservice, people now generally understand difference between green tea and black tea, and more consumers are gravitating toward less-sweet and lower-cal flavors, to point where zero-calorie green tea is now co's best seller in natural channel. But research continues to suggest that the consumer "doesn't quite understand" what organic means, responding more to indications that product is natural. So tho vital to Honest Tea's identity in trade, its organic formulation is only a "proof point" that's kept in background in communications to consumers.

With foodservice a key growth target for Honest Tea these days, Goldman offered observation that tea is one of most affordable ways for restaurant operators to establish organic presence on their menus, for just pennies per serving. Co has been in talks with some of largest fast-food chains, Seth said, and while he didn't identify any, those takin' a flier appear to include Wendy's, offering 4 fresh-brewed flavors, including Tropical Green Tea made just for chain, in undisclosed # of locations, per chain's Web site. Meanwhile, retail availability of brand continues to broaden to point where its largest retail account no longer is Whole Foods, but Target.

Co continues to think thru how extendable brand is. Tho it failed with extensions into yerba mate, cacao and kombucha, Honest Kids pouch line now accounts for more than 1/3 of co's biz. Up 40% in Nielsens in category that's down 6%, all without any marketing support. As for Honest Fizz naturally sweetened CSDs, Goldman wouldn't rule out adding a cola to flavor range that includes likes of Root Beer and Professor Fizz (Dr Pepper-style), but said co needs to be sure erythritol/stevia flavored cola works. "As you might guess, within the Coca-Cola Co that's a sacred cow," he said. Fizz brought his own wife back to soda category after 12-year absence, Seth noted. (She's got 2-a-day habit.) In general, Honest Tea brand won't go into alcohol realm or coffee, nor will it offer items that are very sweet. It will try to go organic whenever possible. As for food, which has been in co's sights since earliest days, that might finally come to fruition: Goldman said he expects to have something on market "that's not liquid" within next 18 months.