Daily Greens, HPP player that packs 6 lbs of produce in each bottle, has broadened its availability to 350+ stores, in Whole Foods and other natural retailers, said founder Shauna Martin, Austin-based breast cancer survivor whose recovery led her into biz. As it moves toward broader availability Daily Greens has earned 25-store test in Dierbergs Markets in Midwest and soon hits Kroger stores in Tex. Earth Fare natural chain comes aboard in Jul, and Whole Foods has brought on Rocky Mountain region, joining NorCal, Midwest and South, aboard since last fall. In NY, brand just switched from Rainforest to Gourmet Guru as DSD distributor. Recent capacity expansion in Austin supports 100K bottles per week on single shift, Shauna told BBI. Next, co may go out for some additional capital in summer or fall to fund marketing programs that will allow brand to go big in 2015.  

Given action-packed agenda and networking and sampling opportunities simultaneously beckoning in lobby area, it can be hard even for disciplined attendees at BevNet Live to catch all 20 participants vying to win New Beverage Showdown (and BBI editor prides himself on being able to resist anything but temptation). With comprehensiveness out of question, here's quick take on a few brands that caught our eye. Showdown competitors did include several that have previously exhibited in venues like Expo West and been profiled in BBI, including Rumble Supershake (protein line in aluminum bottles), Daily Greens (Austin-based cold-pressed line boasting 6 lbs of produce per bottle) and the Showdown winner, Owl's Brew, tea-based cocktail mixer that can support an uncommonly diverse array of spirits.

CideRoad offers updated twist on colonial-era switchel drinks - "America's original refresher," says founder Kevin Duffy, previously a real estate developer in NJ. Made from maple syrup, apple cider vinegar and ginger, it launches in Jun around Duffy's northern NJ base in Original, Cherry and Blueberry flavors. It joins such other early-American styles that are making a comeback as "shrub" drinking vinegars . . . Growl Coffee takes cold-brewed coffee a step further to craft lattes in gourmet flavors like Salty Caramel, Sweet Vanilla and Dark Mocha, with seasonals planned along lines of Lavender Honey, Habanero Ginger and Thai Latte. Washington DC-based co is using Union Kitchen shared kitchen there to scale up, starting this month with area Whole Foods stores. It employs high-pressure processing to extend shelf life. Co views opportunity as being around 10 AM and 2 PM daypart, in contrast to early morning window for hot coffee . . . Garden of Flavor, fresh-pressed juice out of Cleveland, is from founder who can't be accused of jumping on juicing bandwagon: Lisa Reed, 51, said she's been doing it for 25 years; she's also chef and certified practitioner of plant-based nutrition. For her drinks, produced in 4K-sq-ft facility in city's Midtown area, she employs superfoods like goji berries and turmeric, and some of her sku's can boast being first cold-pressed juice with full serving (1 bil) of probiotics. So far she's available in about 50 stores, including 9 Whole Foods, in Ohio, Penn and Mich, but is looking now to buttress her own resources with outside capital, aided by Eric Skae of Bricktown Group . . . Tigernuts Horchata employs nutrient-rich tuber, the tigernut, that's traditionally used in Valencia region of Spain as foundation for horchata. It's cold-pressed in NY via process for which patent is pending, and self-distributed since last month in 5 flavors at $6.99. It's eyeing production facility on West Coast too, and plans to open pop-up horchateria in NY's trendy Meatpacking District as marketing tool. BevNet judges hailed idea for being fresh but pointed to considerable education burden behind name like Tigernuts, which is neither a nut nor from a tiger. "Sitting on a gold mine, but serious branding issues," said judge Greg Fleishman. Package doesn't offer enough explanation for shopper's few seconds at the shelf, echoed VEB's Scott Uzzell . . . Rage Vitamin-Enhanced Water + Electrolytes claims to offer stimulant-free energy via ingredients like L-carnitine, using brand name that should be familiar to youthful participants in extreme sports and electronic dance music . . . Limation brings HPP process to vibrant lemonade/limeade segment, offering "365 days of summer in a bottle," per founder and reggae singer Charmaine DaCosta (tho its shelf life is just 60 days). It's available in Original Limeade, Lavender and Passion fruit flavors, priced at $3.50 per 12-oz bottle. Ambitious entrepreneurs is aiming to be in 1K retail doors by end of year . . . Among previously profiled brands, Rumble now claims to be in 800+ Canadian stores, on track to exceed $2 mil in sales this year, and ready to head into US by Jul, said founder Paul Underhill, former lawyer who'd struggled with cystic fibrosis.  

 In recent years we've carried lotsa commentary from capital-side folks who've criticized the challenging economics of bev launches and cited food and other realms as where the action is. So no doubt it was refreshing to many BevNet Live attendees to hear Piper Jaffray managing dir Janica Lane declare last week that "emerging beverages is definitely where it's at." As backing for her optimism, she cited recent spectacle of Safeway grocery stores that boast multiple brands of kombucha on shelves, a sign the market holds great potential for new brands. That said, the action in financing these entrepreneurs isn't much coming from private-equity side these days.

Tho it's narrow sample, Janica offered her take on 109 bev deals that have occurred since Nov 2013, 44% of them (that would be 48 deals) on NA side. By investor type 55% of them (59 deals) were financed by individuals or angel investors, and 27% (29 deals) by strategics (including likes of Boulder Brands with Suja investment, Coke's VEB incubator with Zico Coconut Water and LA Libations, and Apple & Eve with Switch sparkling juices). In other words, "angels are playing a huge role right now," Lane said. By contrast, a scant 18% of the deals involved private-equity players. With brands of just $25 mil in sales considered to be of decent scale in bevs right now, many don't surmount PE firms' hurdles. Cos with revenues in $8-12 mil range typically are accessing their financing from individuals, collections of individuals or small family offices. So-called "super-angels" have become prominent enough to potentially rival PE shops in importance, Lane believes. Tho she didn't use words like "frothy," Lane noted that some of bigger deals are offering multiples of 7X cash flow, vs 3-4X in normal markets, leading her to wonder, "Did you forget 2007 already?" Still, for emerging bev players, this is good time to be accessing new capital.

Getting some questions from Wall Street lately about why it's diversified so little from its core CSDs over the years, Dr Pepper Snapple Group is establishing strategy group charged with supporting DPS brass in areas of growth strategies, innovation and commercial planning. Dallas-based co's vp investor relations and marketing finance, Carolyn Ross, has been named to lead new cross-functional dept as svp for strategy & innovation, reporting to cfo Marty Ellen, who's had hands-on role in operating areas such as rapid continuous improvement (RCI) program. Reporting to Ross, per memo from prexy/ceo Larry Young, will be co's commercial planning team, innovation ideation and development team, innovation commercialization team and strategy team.

Note to troops from ceo Young commends staff for completing "very good quarter that highlighted the power of our flavor portfolio, our strong operating performance and our ability to use rapid continuous improvement to help transform our business, ensuring we remain competitive in a tough beverage market." He adds: "Even with these solid results, growth is top of mind, and we're going after it."

In other moves at DPS, Andrew Springate, svp for marketing services & long-range planning, joins Beverage Concentrates unit, where he becomes point man on Coke system partnership as svp/gm - CASO, reporting to Jim Johnston. Parallel to that, Dana Berghorn leads Pepsi system partnership as svp/gm - PASO. Heather Catelotti has been promoted to vp investor relations, filling Ross' prior function.  

Campbell Soup shares tumbled nearly 7% in early trading today on heels of disappointing Q3 earnings report in which weak bev performance compounded problems over on soup and baked goods sides. Co continues to struggle to navigate major shift that's seeing consumers migrate to fresher offerings at perimeter of their supermarkets, even as core consumers for co's shelf-stable soups remain too economically challenged to maintain their traditional purchasing habits. With V8 V-Fusion and V8 Splash extensions - once viewed as growth engines for shelf-stable bevs - now declining, CPB ceo Denise Morrison promised to unveil new bev strategy at investors day presentation planned for Jul 22 at co's Camden, NJ, hq.

By contrast, reflecting consumers' burgeoning interest in fresher offerings, Bolthouse Farms chilled juices and salad dressings continued their rapid growth, scoring 6% sales gain. Even in challenged soup category, bright spot was aseptically packaged broths, up double digits on strength of consumers' yen to combine them with fresh ingredients for home-cooked meals.

Overall, net sales edged up 0.4% to $1.29 bil for qtr. Operating earnings rose 9.6% to $183 mil. For 9 mos, net sales are up 1.4% to $6.42 bil.

In line with co's prediction that US Beverages div wouldn't be growth engine for co this year, segment's sales dipped 4% to $190 mil, with V8 V-Fusion fruit/veggie blends and V8 Splash fruit drinks down, partly offset by gains in core V8 veggie juice brand. V8 Plus Energy line also was up. As in past, Morrison blamed pressure from broadening array of packaged fresh and specialty juices. She cited progress building new distributor network, reference to co's return to indie DSD houses following dissolution of distribution alliance with Coca-Cola. Higher marketing expenses and other factors led to 12% dip in segment's operating earnings to $12 mil. For year to date, US Bevs sales are off 5% to $539 mil and operating earnings down 16% to $84 mil.

Meanwhile, diversification move into fresh juices via Bolthouse Farms continues to pay off, tho Morrison warned the competition is growing, presumably a reference to advent of numerous cold-pressed juice brands. Sales for Bolthouse & Foodservice div rose 4% to $358 mil, with Bolthouse Farms' 6% sales gain driven by double-digit growth in refrigerated bevs and salad dressings, with carrot biz up only modestly. For spring, Bolthouse has suite of 47 new products coming, from veggie juices to Greek-yogurt-based salad dressings. Morrison said she's pleased with results of brand's first national ad campaign, tho higher spending caused segment's operating profit to contract 15% to $23 mil. Excluding currency effects, North America Foodservice sales also were up. For year to date, sales are up 3% to $1.047 bil.  

Reed's Inc said net revenues increased 10% to $8.95 mil in 1st qtr ended Mar 31. Gross profits rose 15% to just over $2.9 mil in qtr and Reed's upped gross profit margin to 32.4% from 31.2% a yr ago. Reed's net loss of $220K, or $0.02 per share, beat consensus estimates by about a nickel. Reed's core brands surged 19% while its Culture Club Kombucha jumped 143%, noted interim cfo Dave Williams on investor call. In qtr, co's Virgil's CSD line accounted for $3.4 mil of revs, followed by Reed's brand at $3 mil and Culture Club Kombucha at $1.2 mil. Also in mix were $600K in private-label work and $700K in candy/food items. Reed's is "very excited" about Kombucha results thus far, said ceo Chris Reed. Brand is so hot co is having "issues keeping up" with sales and is "scrambling" to fill orders for brand that's already reached #2 in category (albeit very distant #2 to GT's).

Lotsa time on call spent on cost issues from East Coast facility that Chris said raised price on Reed's Ginger Brew even with contract in place. That "novel approach" confronted his team with "take it or leave it" price change that he complained was done "without any legal basis." To combat that price hike, Reed's has tweaked the process to open up production to broader spectrum of copackers and is talking to 3 others, while it upgrades and ramps up production at its hq facility in LA. Improvements already made in LA were reflected in production jump of 67% to 220K cases in qtr. By his "best guess," situation with East Coast packer should be resolved in Q3, Chris said, with Reed's either getting "better pricing" or finding new copacker by then. He also cited such kombucha wins as getting into Safeway stores, big distribution footprint of Manhattan Beer Dist in NY, and 70 or so OTG airport stores. Asked if Reed's would consider a deal for its brands with SodaStream, Chris said, "I think it's a great idea," noting Reed's offers "unique proposition" with superpremium brands. Anticipated new kombucha flavor didn't happen in 2d qtr due to "problems with flavor supply," said Chris, but when it does arrive it will be "a game changer," he promised.  

Join us for the 21st annual Beer Insights Seminar, Nov 9-10 at the Waldorf=Astoria in NYC. This year, we have already lined up an exciting program featuring some of the industry's top execs. We are proud to announce MillerCoors ceo Tom Long, Constellation Brands ceo Rob Sands, Heineken USA prexy Dolf van den Brink, plus craft pioneers Brooklyn co-founder Steve Hindy and Deschutes ceo Gary Fish. The Beer Insights Seminar is one of the industry's premier events. You won't want to miss it. Sign up today to take advantage of special early bird registration. Click here for more info. Click here to register.

. . . . Next issue in 4 weeks.  

For decades, annual National Conference of State Liquor Administrators mtg combines review of latest legal/regulatory developments with parade of associate members (mostly industry) presenting various "asks" of state regulators. As industry always ahead of curve compared to regulators, modernization, simplification and flexibility tend to take center stage. Dynamics of the NCSLA-industry relationship and the meeting itself invite these inevitable "asks." Turns out, entire NCSLA budget for fiscal 2014 just $291,000. (Control state assn has lots more money.) Only $14,000 provided by member dues from the states. Over $275,000 came from associate members. At this yr's mtg, industry attys and lobbyists made up about 2/3 of attendees. So industry tends to dominate panels too.

Meanwhile, priority one for regulators is (usually) control, not greasing the skids for industry, tho one eastern administrator did say (somewhat shockingly): "We want everyone to make money and we'll figure out a way to do it." At the same time, everyone professes fealty to 21st Amendment, states' rights and the 3-tier system. And the states are doing more and more, especially having to regulate so many new players, generally with less and less money. As a result, change comes relatively slowly, often grudgingly, in this regulatory world, to many players' frustration.

Very first panel at this yr's mtg opened with blast from always-blunt Bill Tomaszewski, atty for direct wine shipper. As Bill, another atty and two regulators dug into question of illegal sales, Bill said they'd "make it simple because regulators don't get things sometimes." They asked when an alcohol "sale" occurs. When order taken, when money changes hands, when title changes? Net-net: some industry execs want more flexibility about this to avoid violations, so (unlicensed) 3d party mktrs and shippers don't get tagged and sales can proceed more smoothly. But as several regulators pointed out, their priority is control, ensuring licensees responsible/accountable. Or, as one put it equally bluntly: "we want to make sure scumbags are not in the business."

As Retailers Wield More Power, Do They Still Need "Protection"? Retailers have been "protected class" since Post-Prohibition began, in order to avoid abuses of saloon era, atty Marc Sorini reminded. But given evolution of huge, powerful chain retailers, can they still be considered "only a victim of the upper tiers?" he asked. Remedies for violations need to be "applied across the board" for violators of tied-house, other laws, WSWA's Craig Wolf suggested in similar point. And Beer Inst general counsel Mary Jane Saunders said lack of enforcement may be bigger issue than unfair remedies. She also raised concern about smaller players (i.e. craft brewers) seeking to tilt playing field. Many "assume big brewers are engaged in inappropriate activity when they're not, and that others in the industry are acting reasonably when they may not be." Midwest regulator raised similar issue, noting newbies "not learning the rules." Pointed to growing tension between "free enterprise and the 21st Amendment." While there's consensus that alcohol is unique and can't be treated the same everywhere, Marc suggested "state geographies" don't really drive differences anymore. Likely bigger differences, for example, between Chicago and downstate Illinois than between NY, LA and Chicago. But what that implies for altering the system, even Marc wouldn't say. (More "local" control, which no one wants?)

"Is Retailer Independence Really At Risk?" AB Atty Asks In session on sponsorship, AB counsel Karen Manders picked up similar theme about retailer protections. She pointed out that states have interest in protecting retailer independence, competition and the public, but wondered whether policing such issues as stadium signage "an appropriate use of public resources. Is retailer independence a real concern in 2014?.... If we put a sign up, what's the public interest?"

Are Chains' Needs "Adequately Considered"? Yet another spin on whether current rules accommodate current retailers came from vet alc bev atty Richard Blau. "Consistency, uniformity and profitability" make for powerful combo, said Richard and he wondered whether needs of chains to achieve this combo are "adequately considered." Speakers from Marriott hotel chain, Kum & Go c-stores and AMC movie theaters made pitch that each has unique model and needs. Marriott is one of biggest drink sellers in US, yet, unlike most on premise outlets, "guests don't leave." Plus, hotels in unique legal position of having general duty to protect safety and security of guests. Then too, Kum & Go ain't your standard indie c-store, but offers larger, more spacious stores with fresh food, different offerings ("not just condoms and candy bars") and deep commitment to responsible service. AMC theaters late to the party in serving alcohol, but it's now "critical to our asset strategy," spokesperson said. Its theaters sell only to ticketed guests, for limited time period, require server training, ID all buyers, use standard recipes, etc. The point? Given retail evolution, with these new kinds of outlets, states might consider "working with retailers that have multi-state platforms," resources for server training and other programs that mom and pop outlets do not, to create a new license category that protects the public "while providing the industry and consumers what they want," said Richard.

On other panels, uniqueness of cider, private label products, need to get label approvals across states and emergence of legal pot aired out. NBWA's Paul Pisano an exception to industry "asks." He made strong pitch for bigger budgets at TTB and state ABCs, more industry support for regulators and regulation, all in line with wholesalers' embrace of (particularly) state regulation. As it turns out, everyone has an interest. And they're all special.  

In addition to provocative comments on craft/franchise matters (see last issue), consultant Mike Mazzoni revisited how product life cycle theory plays out in beer in his comments at INSIGHTS Spring conference earlier this mo. Recall, Mike's original speech on inevitable decline of megabrands at our 2010 Spring conference -- as new generations "don't drink our father's beer" -- caused quite a stir. Some big brand stewards called theory "poppycock," "B.S." and worse. But continued decline of almost all megabrands and their brand families, plus other developments, led Mike to declare "generational confirmation" of his perspective that beer brands follow familiar intro, growth, maturity and decline stages, or "product life cycle 101."

Mike again laid out trends from 6 megabrands -- Bud Light, Coors Light, Bud, Miller Lite, Corona Extra and Heineken. They represented approx same 50 share of US beer biz in 1988, 1998 and 2008 (tho shares shifted markedly within group). Bud is "classic" example of theory. It's decline started much earlier (as it's a "baby boom" brand); first slipped in 1988 and hasn't grown since. Lite fits pattern too, despite brief growth blip in mid-2000s. Mike looked at Coors Light, Bud Light, Corona and Heineken since 1978-1983 when Gen Xers entered US beer mkt and adopted those brands. Since then, if you look at trends indexed to their peak volume, trends for each "strikingly similar": volume took off in early 80s, peaked around 2007-2008 and then declined (Coors Light up thru 2012).

Brand Family Trends Parallel MegaBrands In new tweak, Mike looked at brand families. Showed how Bud family (including all brand extensions), peaked 4-5 yrs ago. Suggests that millenials driving volume today "don't want anything that was their father's beer." Coors family trend, which "just recently peaked," shows "similar phenomenon," Mike said. Meanwhile, Miller brand family in "free fall," but again decline accelerated when millenials started entering beer category. Heineken also well below its 2007 peak. Another slide showed how each of these 6 megabrands appeared to reach peak 25-28 years after introduction, which "coincides with a generational life cycle."

Spirits and PLC; 2008 As "Watershed Year" Yet another "confirmation" comes from spirits trend. Spirits "took a nosedive" in 1980s, Mike reminded, when Gen Xers came in and started consuming light beers, Corona and Heineken. Those drinkers also rejected boomers' taste for spirits, Mike suggested. Spirits didn't get back to 1980 volume until 2008, a generation later. Coincidence? Nah. Indeed, Mike views 2008 as "tipping point" for beer biz. It was "watershed year": 1) AB InBev and Miller Coors JV created; 2) each of those cos posted record volume; 3) Corona and Heineken peaked in 2006-2007; 4) spirits regained 1980 volume; 5) per capita beer consumption turned down sharply; 6) craft really took off in growth and number of players; 7) skumageddon launched. All this adds up to support a "generational impact" on beer (and other alc bevs) drinking patterns, much more so than impacts of economy, pricing and/or weather, according to Mike. And this impact does not bode well for a return to growth for the megabrands or AB/MC fortunes in near term.

Exceptional Corona Extra But there is an exception and potential response. Exception is Corona Extra, which is now even or up for 5th straight year, after losing 15% of its volume 2006-2009. Brand/packaging innovations, good mktg and line extensions can bend the life cycle curve, Mike suggested. Corona's mgmt has "done a terrific job with getting new distribution points," he also pointed out. Unclear whether Corona "will ever get back" to its peak volume, but based on "resurgence" of last few years, there's "every possibility it could." Again, that "proves the theory" in Mike's eyes, that Corona getting "good, classic marketing," and importantly, "not discounting," which does not reverse declines.  

Last 2-3 weeks have seen dramatically increased speculation that ABI-SAB deal could be coming soon, including Jun 20 comments on CNBC that deal could be "imminent," Jun 12 Fin Times saying syndicate of banks attempting to raise $60 bil in debt for unnamed big acquisition that some presumed to be for ABI purchase of SABMiller and 6/27 WSJ headline that Molson Coors wouldn't rule out acquiring rest of MillerCoors. So far, no proof deal in works. But unprecedented level of chatter, goes beyond "where there's smoke there's fire." At this point an ABI-SAB deal widely assumed. You almost have to wonder what else possible (Pepsi? No Deal?), since conventional wisdom often wrong. Still, logical thought process stems from conviction that once ABI gets below 2x net debt-to-EBITDA (which will happen later this yr), it will inevitably make its next big purchase. That's certainly a core competency of ABI and SABMiller looks like ABI's most likely target.

If ABI-SAB happens, Molson Coors by far most likely purchaser of SABMiller's 58% in MillerCoors, (especially since it gets first and last dibs). No way US govt would allow ABI to keep stake in MC. Investors see this and Molson Coors stock has been going up, up, up. Up over 40% from Feb lows, largely based on this expectation. In this period, TAP stock mkt capitalization increased by several bil to nearly $14 bil. Kinda amazin' to consider how ABI can create massive value for its direct competitors if maneuvers serve ABI interests to get even larger deals done. A more concrete example: when ABI bought Modelo, had to divest 50% of Crown and Piedras Negras, creating stronger Constellation, worth many additional bil. Constellation stock up almost 4.5x, from under 20 to 87, since ABI/Modelo deal announced. It's gone from mkt cap under $4 bil to nearly $17 bil, largely because in order to get value-adding Modelo deal done, ABI had to divest.

Against this backdrop, widespread interest in Jun 25 Molson Coors analyst mtg, natch. But Molson Coors execs could not directly address what someone dubbed "the elephant in the room." So it emphasized strong earnings track record and cash flow (EBITDA nearly $1.5 bil in 2013), shrinking debt, brand growth/innovation capabilities. A couple of analysts obliquely asked about ABI-SAB. Molson Coors ceo Peter Swinburn acknowledged there would be synergies if it could put its Canadian biz together with US biz and cfo Gavin Hattersley said that while preserving its investment grade status is "important," it's not a "red line in the sand," i.e. it might lever up for the right deal.

All this chatter must be quite distracting for MC employees. Presuming Molson Coors did get rest of MillerCoors, would it change much? Almost undoubtedly, yes, INSIGHTS believes. Even 6 yrs into deal, there still is not one integrated MillerCoors culture (or pricing system or ordering system). Then too, Molson Coors and SABMiller have not gotten on well for some time. Despite yrs of great profit growth, Pete Coors has privately expressed dissatisfactions with MC too, INSIGHTS understands. So lots would likely change.