CEO Battered by mounting pr and policy challenges, trade group representing America's soft drink cos has often turned for advice to playbook of beer industry, which for decades have successfully headed off taxation, responsibility and other challenges. In signal mark of recognition of effective role American Beverage Assn has played in combating sugar taxes, school bans and other adversity, Beer Institute now has returned the compliment by recruiting ABA's govt affairs svp, Jim McGreevy, as its prexy/ceo. "Beer faces many challenges on a host of complex industry issues, but Jim's record gives us confidence in his leadership," Anheuser-Busch ceo and incoming BI chmn Luiz Edmond said of 49-year-old McGreevy. "We welcome him to the beer family." He starts on Jun 23, filling slot that's been vacant since departure of Joe McClain, but was expected to be out there mingling at annual membership meeting today. He joined ABA in 05 after 6 years with Larkin Hoffman law firm in Minn.  

As it rolls out new look and higher-caffeine addition, Avitae caffeinated bottled water is pushing harden into c-store and drug channels in its core markets in Midwest and Northeast. Clevland-based co now under tutelage of prexy/ceo Norm Snyder anticipates launching 7-Eleven test in pair of core markets, Chicago and Mich, and also is exploring brand's potential within drug channel, planning CVS test and entering Kinney chain in upstate NY. Target will test brand in Jun in perhaps 50-100 stores, Snyder told BBI, and brand has cracked 75 of US military's 180 DeCA commissaries, mandated as healthier alternative to energy drinks and soda. Moves comes as further signs of progress under Snyder's more gradualist approach, in contrast to earlier mgmt team that spent heavily on everything from DSD expansion to arena football.

It continues to make selective additions to DSD network, most recently Marsh in Ind, United Dairy Farmers in W Ohio and Mariano's in Chicago, where talks are under way with Jewell retail chain. Also in discussions are Kroger for eastern half of US. On marketing side Avitae continues mainly to put product into people's hands - say, via opening-day ambushes at Major League Baseball parks in Pittsburgh, Cincinnati, Cleveland and Washington. As reported, it's also signed 2-year endorsement deal with PGA golfer Kevin Streelman.

Brand has upgraded packs with bullet-shaped half-liter bottle and graphics that play up core "caffeine + water" message and seek to grab shoppers' attention with die-cut holographic label sporting wave theme and light reflection, subtly cueing hydrating benefit. And it's added another tier to caffeine kick, with 125 mg entry buttressing existing 45 mg and 90 mg, each color-coded for easier shopper identification. Highest-intensity offering is equivalent to cup and a half of joe.

Under Snyder, whose resume includes likes of SoBe, High Falls Brewing and Adina, co has engaged in consumer research that's flagged 4 sub-groups worth targeting. There are those who don't like coffee and don't drink it, those who don't like coffee but load it with cream and sugar to disguise taste, those seeking afternoon pickup (and often are looking for alternative that will let them shed Diet Coke habit) and younger consumers. It was latter group that complained existing Avitae entries didn't have enough oomph, hence new 125 mg version. That's still shy of 160 mg in 16-oz Monster Energy, but offers more meaningful burst of energy. In addition, Snyder said eye-opener at Expo West in Mar was how many folks who're into working out regard caffeine as key supplement and welcomed product that both hydrates and offers a lift.  

Kefir king Lifeway Foods continue its double-digit growth in first qtr, but profitability took what LWAY brass styled a temporary hit on account of skyrocketing milk prices that already have begun to subside. Net sales at Chicago-area co rose 20% to $29.1 mil thanks to robust growth of flagship Kefir line and extensions like kid-oriented ProBugs Organic Kefir. But cost of goods surged to 74% of net sales from 63% a year earlier because of what prexy/ceo Julie Smolyansky termed record-high prices for milk in Feb and Mar, up 35%, surge that's already begun to abate. Further easing of pressure should occur as milk plant that co bought a year ago in Wis comes on-stream; by Apr it was already producing 70% of milk and half of bottles, on way to being fully operational in 3d qtr. To offset surge in milk costs, LWAY took blended price increase of 5% on its products. Still, for qtr, operating income dropped to $1 mil from $3.7 mil a year earlier and shares took 3-4% hit in early trading today.

Meanwhile, co's products continue to broaden presence in such major retailers as Kroger, Walmart, Target, Costco and Whole Foods (co also makes private-label kefir for Trader Joe), backed by its first national ad campaign. That effort, co's largest media spend ever, commenced in time for Mother's Day holiday and will run thru summer with full-page print ads in books like People, American Baby, Healthy Eating and Shape featuring "Mother culture" theme. Brand is also prepping full launch in Canada in first week of Jun, and has cracked Britain, where it anticipates being in 1K stores by summer peak selling season. This year it's only offering its frozen items in UK, with refrigerated items hitting market next year.  

Given their significant spending and forming of brand preferences, it's no surprise so-called Millennial consumers, age 18-34, are object of fascination to marketers. So RBC Capital's Nik Modi, using customized array of Nielsen data, has offered deep dive into Millennials' consumption habits, perusing broad range of consumer products categories encompassing food, bev and personal care. (For next report Nik says he'll look at specific brands and cos.) Tho it's on familiar terrain, study offers up some intriguing nuggets: Millennials are drastically reducing their commitment to CSDs even as they increase by corresponding amount their consumption of energy drinks. And next group up in age from Millennials, age 35+, is increasing its commitment to energy even more.

For analysis, Modi looked at Nielsen snapshots for years 2004, 2009 and 2014. Over most recent 5-year period spanning 2009 to 2014, household spending on CSDs is down across broad population by $13 from about $123 to about $110 (Modi's report presents data in bar charts that are hard to read precisely), for 11% decline. For Millennials it's more pronounced decline: from about $115 to $88, down 24%. (Over prior 5-year period Millennials' consumption stayed flat.)

If broad range of consumers are spending $13 less on CSDs, they're spending $11 more on energy drinks - "making up for nearly the entire decline in CSD spending," Modi notes. Household penetration has tripled from 6% to 20%. Intriguingly, while Millennials' consumption over most recent 5-year period has grown from about $46 per household to about $53 per household, an even greater increase has been scored by the 35+ consumer. That group, RBC found, upped its energy spend from about $38 to about $50, up 32% and nearly twice the $$ increase of Millennials. Since data also show their HH penetration hasn't changed, that suggests existing energy consumers are drinking quite a bit more.

Higher-Income Millennials Cut Back on Processed Items Within Millennials group, Nik notes that higher-income tier is crucial. True, lower-income Millennials have shifted purchase behavior too, but much of that has been driven by sheer economic adversity, easing consumption of items they can no longer afford. "However, there are also more high-income Millennials-and it is among these high-income Millennials that the biggest buying pattern changes have occurred," he writes. "These consumers are highly influential and arguably the most attractive consumer base. Over the last 5 years they are seemingly walking away from many consumer packaged goods categories while seeking out a lucky few." The spurned categories include major processed foods/bevs like CSDs, beer, cereal, juices/drinks, frozen meals, salty snacks and chocolate candy. But Millennials are dramatically increasing their purchases of ground coffee and nuts. Another interesting nugget: tho energy drinks remain a premium category, in contrast to relentlessly promoted CSDs, even those economically struggling lower-income Millennials are increasing their purchases of those.

Facebook as Marketing Leveler In making familiar argument that social media help level playing field of marketing for smaller brands, study offers some Facebook "likes" data to buttress point: Suja Juice, just 2 years old, already has 398K likes, while Celestial Seasonings 354K likes and BluePrint Cleanse 55K likes.  

Lotsa familiar memes in long Bizweek article detailing attempts by A-B InBev to make inroads in tiny Guatemalan beer mkt via Brazilian Ambev unit. Tale involves warring family -- one side beer, one side soda -- with latter aligning with Ambev side to compete in beer and claims (and denials) of attempted buyouts, efforts to prevent stock purchases from family members, legal squabbles, charges of undue political influence and much more. Ambev considers itself an "underdog" in country (it has 20 share, Central American Brewery has most of rest), but it's growing and trying to sell both less-expensive beer (including sharp discounting in mainstream) and higher-priced Stella and Corona. Beyond discounts, Ambev reportedly "giving free trucks to distributors" (!!!) and "selling cases of [mainstream] Brahva with a 2-liter bottle of Pepsi attached." "They're just doing crazy stuff," charges competitor. Current and former A-B execs/distribs among BBI's readership in US will find very familiar story about culture change when Ambev came in to build soft drink side's beer biz: "Ambev executives wear jeans. They don't have offices, instead working at communal desks like Wall Street traders. CBC has embraced the culture. 'They did it voluntarily,'" said Ambev exec, adding, "in the Dominican Republic, we had to make them do it." Click here to read story.  

Effort by Jones Soda Co to get back into growth mode proved stubbornly unattainable in first qtr, as revenues declined 6.7% to $2.9 mil and net loss widened to $539K from $399K. Case sales were off 5% to 225K cases. With not much good news on top line, ceo Jennifer Cue took pains to remind investors - as she did a qtr ago, when sales also sagged - of great progress JSDA has made in slashing bloated expense base prior to her return to co, slashing SG&A from $11 mil in 2012 to $5 mil currently. Payroll is down to 26 from 50. "I am sure that many of you may be tiring of the amount of time it takes to successfully turn around a company," Cue said on investor call Thurs afternoon, per transcript posted on SeekingAlpha.com. "However, we have achieved some solid progress as a lean team in these past 7 quarters. We remain committed to a path towards long-term financial stability and sustainability, and having unique healthy and fun beverage options in this very large industry." She later noted that the sales declines at least have "stabilized," and assured listeners: "Year-over-year decline is not where the company is headed." During Q&A period, several investors congratulated her on good performance and few betrayed signs of impatience. Of course, strong performance during peak Q2 and Q3 could reverse declines. Still, shares dipped 2% in trading this morning.

As signs of progress, Cue noted that over past 2 qtrs Wal-Mart has moved from selling Jones Soda variety pack to selling 4-packs of Jones Pure Cane Soda throughout about 1,000 stores where brand is authorized, at accessible price of $3.98. Last month, she said, JSDA was granted 500+ additional Wal-Mart stores, all serviced via brand's DSD network. Brand also has made inroads into Ireland and Costa Rica after what Cue said was 18 months of effort. Its innovation efforts are keyed to all-natural Jones Stripped line that tested in Calif last summer and, with some formulation and packaging tweaks, has cracked Whole Foods stores in NorCal and Pac NW and is rolling out this qtr to expanded markets throughout western US and Canada. Other chains that have taken on line include  

Tho Whole Foods shares fell off a cliff after release of weaker-than-anticipated earnings report on Tues, record qtr reported 2 days later by Hain Celestial Group suggested that natural/organic sector is anything but weak: it's just that consumers these days have way more places to shop for those products than just the poster child for segment, Whole Foods. That of course was gist of explanation for weak qtr by Whole Foods ceo John Mackey, who told investors, "There's a lot more competition, a lot more entrants into the marketplace as well as conventional supermarkets copying and imitating a lot of what we're doing," remarks that helped precipitate 19% drop in share values the next morning. Issue was highlighted in sharp relief 2 days later by remarks offered on Hain Celestial conference call by John Carroll, evp and ceo of Hain Celestial US, who offered extensive list of distribution wins at key accounts - most of them right in mainstream - by leading publicly traded marketer of natural foods, bevs and personal care products. Here's Carroll's list: Kroger authorized 4 new Imagine Organic simmer sauces and 3 new Spectrum Essential blends. Publix added 7 new snack items in MaraNatha Coconut Almond Butter. Sprouts added Greek Gods' new 24-oz peach yogurt, 2 new Celestial Kombucha items, 4 new Earth's Best pouches, 2 new Earth's Best frozen SKUs and 2 new Dream Sunflower bevs. Target added 3 new Spectrum oils, 4 new Greek Gods yogurts and 1 new Earth's Best baby wipes item. Wal-Mart added 2 new Dream frozen novelties and 9 new Alba Botanica Good & Healthy hair care and skin care items. That's not counting wins, of course, at Whole Foods itself: 2 new Imagine soups, 1 new Sprouted Rice Dream, 3 new Alba sun care products and 8 new gluten-free personal care SKUs. List shows explicitly how mainstream grocers are heading in Whole Foods' direction in broad range of product categories, in way that takes some of shine off Whole Foods and likely strengthens hand of marketers in their own negotiations with natural food icon.  

White Wave Foods scored stronger performance than its former parent Dean Foods, notching 36% sales increase to $830 mil in Q1, +12% if sales of recently acquired Earthbound Farm are excluded. Operating income surged 35% to $64 mil. In one key segment, Plant-Based Foods/Bevs in N Amer, co offered more evidence that it's successfully diversifying beyond soymilk, with Silk-branded almondmilk surging 52% in segment that's up 20% overall, and new items like almond/coconut blends and almondmilk fortified with protein and fiber garnering solid early reception. Gains have occurred as co has cut back on # of soymilk sku's in what ceo Gregg Engles terms a "rebalancing" that's helped improve retail velocity of remaining soy sku's.  

Dean Foods said its revenues increased 2% to $2.34 bil in 1st qtr but record-high commodity prices and harsh winter contributed to co's net loss of $9 mil and EPS loss of $0.05 in qtr compared to EPS gain of $0.31 a year ago. Adjusted operating income plummeted from $74 mil in 1st qtr last year down to $7 mil this year. "We entered 2014 facing substantial margin pressure in our milk business as Class 1 raw milk prices have continued to reach all-time new high," up 22% vs a yr ago, noted ceo Gregg Tanner. Dean Foods milk volume fell 6.7% during qtr reflecting previously announced loss of Wal-Mart biz, but when adjusting for that, Dean volume edged up 1.1% in qtr, which co noted was "significantly better" than overall category decrease of 2.1%. Besides stiff competition from low-priced private-label milk competitors, lots of winter snow storms cut into Dean volume this qtr. Dean estimated loss of school sales had negative impact of 3 cents per share.

Dean adjusted its full-year outlook downward and also warned that milk market conditions don't get any easier in 2d qtr. Co expects 2d qtr "to be particularly difficult given historically high" raw milk costs and anticipates an EPS loss between 2-8 cents per share in 2d qtr. "We expect results to strengthen in the back half and exceed 2013 performance in the 3d and 4th quarters," assured Gregg. Dean lowered its full year to EPS to around $0.60 per share, considerably lower than previous guidance in range of $0.73 to $0.86 per share.  

"Vermonters will have the right to know what's in their food," intoned Gov Peter Shumlin after signing law that makes Vt the 1st state to require foods made with genetically modified ingredients be labeled as such. Law won't take effect until July 1, 2016, but "it sets the stage for more than 2 dozen other states that are currently considering mandatory labeling" of GMOs, noted Reuters. Report notes that new law in Vt "is widely expected to be challenged in court" by food and agriculture cos and groups, which until now had successfully beat back GMO-labeling initiatives in states like Calif and Wash . . . Kashi became latest marketer to settle class action suit over use of term "natural" to describe products, agreeing to $5 mil settlement in one case and $325K payment in another case involving its Bear Naked snack line. It joins range of food/bev marketers that have paid price for labeling as "natural" products that contain ingredients that judges and juries are likely to view as anything but natural, such as monocalcium phosphate and alpha tocopherol. It joins such marketers as PepsiCo's Naked Juice unit and Popchips that have settled similar suits.