Beer Marketer's Insights

Beer Marketer's Insights

Xyience Xenergy has re-upped for another year with female MMA star Ronda Rousey, locking up star thru year-end as she elevates her profile further via ventures like appearance in Sly Stallone vehicle The Expendables 3 due in Aug. With Ronda Rousey Vegas Getaway promo having helped lift sales 12% during otherwise slow Nov/Dec period, Las Vegas-based Xyience will devise another consumer promo for later this year . . . Mountain Dew Baja Blast, intro'd a decade ago as Taco Bell Original, is finally going into cans and bottles as limited-time offer starting May 5. PepsiCo said it's most-requested Dew flavor, generating 30K+ mentions on Twitter in past 3 years. It will go out in 20-oz bottles and 24-oz cans for cold-box consumption, as well as 12-packs of 12-oz cans on takehome side . . . Whey Coco, powdered coconut-based protein powder old in 21-oz canisters, has won listing throughout Fresh & Easy chain, as well as Kroger's Mid-Atlantic div . . . VROU women's bevs has upgraded label and added Coconut & Mango flavor . . . "Natural" energy drink has been banned in Australia after it was found to contain prescription-only erectile dysfunction drug at levels above recommended dosage, The Independent reported, in story picked up by BeverageWorld.com. MosKa brand, described as herbal energy drink designed to naturally enhance sexual performance, was found to contain Levitra, brand name of drug vardenafil, when tested by Aussie authorities . . . Part of charm of Chicago Bulls' star Joakim Noah is unbridled passion he exhibits in most aspects of his life. Turns out hoops star is as obsessive about his bev choices: profile in NY Times today quotes prep school coach Bill McNally in Bklyn recalling Noah as "insatiable consumer of a new beverage," Vitaminwater. "McNally openly wondered whether Noah owned stock in the company. Noah would leave empty bottles strewn across McNally's desk, no matter many times McNally reminded him." As article points out, athlete has since gone on to becoming endorser of Vita Coco Coconut Water.  
Stephen Vande Loo, who spent more than 3 decades in Coke system, has joined board of Mix1 protein brand that's seeking revival under new owner Cameron Robb. His varied roles at KO between 1979 and 2012 in US and Great Britain had culminated with post of national vp for region commercialization and development. Parent co Mix1 Life Inc, based in Scottsdale, Ariz, is traded on OTC bulletin boards . . . As anticipated, Coca-Cola handed cfo reins to Kathy Waller in wake of planned stepping-down of longtime evp/cfo Gary Fayard. Kathy joined KO back in 1987, was most recently vp finance and controller. Larry Mark will replace her as controller, moving up from dir of investor relations. During KO's annual meeting on Wed, chmn/ceo Muhtar Kent praised Fayard for his valued advice, friendship and dry wit . . . "The man who gave wings to Red Bull's social media marketing has taken flight," as Ad Age styled departure of digital marketing mgr Nate Warner, who left a couple of weeks back. That's key role for Red Bull to fill, given co has outmaneuvered competitors with high-profile social media campaigns. He "oversaw the brand's quick adoption of networks like Facebook, Twitter and YouTube," and Instagram, noted mag. While Red Bull has approx 43.3 mil followers on Facebook vs 81.7 mil for KO, in other mediums it outperforms, such as 3.4 mil YouTube watchers vs just 254K for KO. Nate told Ad Age he's taking a few months off before seeking his next gig.  
Vermont has become first state to pass legislation requiring mandatory labeling of foods/bevs containing genetically modified ingredients. Vt house approved measure on Wed, about a week after state senate, AP reported. Gov Peter Shumlin has said he plans to sign bill, which would be effective July 1, 2016. Success in Vt follows toughly fought defeats at hands of food and farmers' interests in states like Calif and Wash.  
Some are questioning Coca-Cola's assertion that shareholders overwhelmingly supported its controversial equity plan that steers as much as 16% of total shares to mgmt. While KO reported upon conclusion of its annual meeting on Wed that 83% of votes cast supported move, Fortune mag and others have done the math with updated data to find that co fell just short of having actual majority of total shares voted in support. Counting abstentions, like that of 9%-holder Warren Buffett, only 49.77% of total shares were voted for plan, Fortune reports. That drew polite denunciation from Wintergreen Advisors' David Green, who has led proxy fight vs plan. "Wintergreen believes that no company should implement an equity plan without the support of a majority of its shareholders, least of all a great company like Coca-Cola," David wrote in statement. "It is clear to us that Coca-Cola failed to earn a shareholder mandate to fully implement the 2014 equity plan and we call on Coca-Cola's Board of Directors to withdraw or scale back the plan."  
Celsius Holdings continued on comeback trail, growing sales by 65% to record first-qtr total of $3.87 mil, as domestic sales of its Celsius "negative calorie" line grew thru tough winter conditions even as overseas expansion took greater hold. Sales might have been higher, co noted, were it not for problems with replenishment system at Amazon, which caused Celsius' online sales to drop 12%. But domestic retail sales rose 16% to $1.6 mil, buoyed by 21% retail gain and 97% gain in health-and-fitness channel. Meanwhile, overseas sales - now the majority of co's biz - more than doubled (+133%) to $2.3 mil as first orders came in from Dubai and Brazil. Net loss widened to $703K from $405K a year earlier, primarily because of increased marketing spend via vehicles such as Pandora music-streaming service and endorsement expenditures. Details revealed in release suggested that CELH hasn't been breaking the bank in recruiting such spokespeople as music/fitness star Flo Rida and Nascar driver Blake Koch: one-time charges relating to endorsements totaled $303K, including endorsement licensing fees of $105K and $198K in common stock. As reported, under ceo Gerry David, co has positioned brand as participating in 3 fast-growing sectors of health/beauty, weight loss and energy/fitness.  

With growth in Europe offsetting decline in Great Britain, big bottler Coca-Cola Enterprises eked out 1% gain in revenues to $1.87 bil in first qtr, and operating income soared 66% to $184 mil on tite cost containment. Overall volume was down 1.5%, with 3.5% gain on Continent (particularly France) offsetting 9% plunge in Great Britain, where co is transitioning from 2-liter straight-wall PET bottles to 1.75-liter contoured bottles in quest of better price point. Tough weather conditions aggravated UK malaise. "Cokes with Croissants but Not Fish & Chips," headlined Wells Fargo's Bonnie Herzog, pointing to disparity. In Europe, Coke-trademark brands edged up and noncarbs enjoyed growth in mid single digits. "These results in France are especially encouraging given the challenges since the excise tax increase in early 2012," noted chmn/ceo John Brock.

Decline in operating expenses of 3.5% boosted income for qtr. "Our first quarter volume performance reflects the impact of key operating strategies, including disciplined pricing and the transition to a new package in Great Britain, as well as dynamic market conditions," said Hubert Patricot, evp and prexy of European Group. "We continue to believe our solid customer relationships, excellent marketing initiatives, and ability to execute and activate at the highest levels will enable us to deliver volume growth in 2014."

Energy portfolio continued strong growth, in 9% range, with both Coke-owned brands and Monster up, tho Patricot reminded listeners they comprise just 3% of total volume. Star of CSD portfolio, Coke Zero, continued to grow at double digits, rising in all countries including Great Britain on strength of Just Add Zero campaign. But Diet Coke weakness in UK pulled overall diet portfolio down by 1.5%. Still, Brock said co expects diet portfolio to grow over course of full year, buoyed by last fall's ruling by European Food Safety Authority that aspartame is safe, which has muted critics.

On innovation front, co intro'd adult-targeted low-cal, fruit-based sparkling line called Finley in France in Mar, to positive initial response, Brock said. In UK, not only is CCE transition to 1.75-liter multiserve bottle, but it's also adding 1-liter immediate-consumption bottle along with 4-pack of 1.5-liter PET bottles that will be key among World Cup promo efforts. CCE brass acknowledged some missteps on 1.75-liter transition, noting that new pack jumped gun in moving out into market in Mar, ahead of Apr timing of campaign to communicate change to consumers. In meantime, CCE was left with less promo flexibility than Pepsi.  

Just after Monster Beverage's Hubert's Lemonade moved crosstown to Big Geyser, rival Calypso has upgraded its presence in NY with move into big beer house Phoenix Beehive, auguring a battle of lemonades on streets of NY this summer. King Juice prexy Jeff Outlaw confirmed this afternoon that brand has segued to Brooklyn-based Heineken and Brooklyn Brewery house PB effective May 14, after working via Brooklyn Bottling and Dana houses in past. It continues to work with beer house Peerless across river in NJ. To support PB, King has brought aboard new-age vet Walther Gaybor, who's logged time at Coca-Cola North America, Bai, Marley and Activate. Meanwhile, King has also recruited Tradewinds and New Leaf vet Tim Brown as regional sales mgr for Midwest. Tim has distinction of having previously worked for 2 lemonade rivals, Hubert's and Cabana, too.  
In last issue we reported that lawyers were speculating about flareup of new Lanham Act suits if POM Wonderful prevails in false advertising suit vs Coca-Cola's Minute Maid Pomegranate/Blueberry juice. Well, turns out another bev-related suit had already been filed in Florida federal court, where Global Beverage Enterprises charges rival CytoSport Inc with misleading consumers with Muscle Milk brand that contains no milk, per Law360.com. Global Bevs, maker of drinks Mr. Q Cumber and Sweet Blossom, is seeking injunction on use of "milk" in co's products and also wants court to void 7 Muscle Milk trademark registrations, noted report. Muscle Milk "unfairly benefits from the goodwill associated with milk," uses the term "lactose-free" that would "solely be associated" with milk products and uses "containers in shapes that are traditionally associated with milk" to further deceive consumers, claims suit. Reps for CytoSport had no immediate comment on suit. Recall that in CytoSport's protracted quest for buyer of co, observers have pointed to weak financials and vulnerability of brand name as reasons that potential buyers have been wary of closing deal. Some in biz have wondered why CytoSport doesn't just include token amount of milk in products to make issue go away.  
Philadelphia investor Mark Turnbull, who recently prevailed with bid to acquire out of bankruptcy the extensive array of trademarks associated with Skinny line of bevs, is quickly getting brand back in game, this time with resolve to keep the brand more premium-priced. Operating as Skinny Nutritional LLC, co relaunched production of Skinny Water and Skinny Water pH+ lines last week via partner LiDestri, in a revamped package that goes for sleeker, premium appeal. Turnbull, whose primary investor in buyer UMS Partners, and ceo Michael Salaman have been on road pitching DSD distributors in Northeast, with Honickman's Canada Dry Potomac and Canada Dry Delaware Valley operations already aboard and Canada Dry NY potentially joining them. Outside core Northeast market, brain trust is still deciding on distribution strategy, perhaps hybrid blend of DSD and broadliners. Transaction left co in possession of bushel of skinny-related trademarks covering variety of bev segments, and co execs will decide whether to exploit them via licensing or by launching their own brands. Meanwhile, they'll market existing brands as lifestyle brands, staying away from 10-for-$10 deals that defined brand for long stretches in favor of more premium price, perhaps between Vitaminwater and Bai, promoted at 4 for $5, in line with other premium brands.

Turnbull is interesting choice to rescue brand, boasting successful track record in realms like telecom, mfg and software but having no consumer products experience, as he readily acknowledged. Still, he said, it's challenge his team likes to confront, and in his due diligence he was reassured by signs that brand did turn in key accounts. "Getting it to the shelf was the problem," he said.

Recall that Turnbull, working with Salaman, had been sole bidder to acquire Skinny Nutritional assets out of bankruptcy, deal which closed late last month. According to 8-K filing dated Apr 4, Skinny Nutritional prevailed with $1.5 mil bid, which required only $835K in cash after Turnbull's $132K in debtor-in-possession financing was backed out, along with promissory note of $533K coming due in 3 installments by Sep 30. Of Turnbull's cash payment, $765K went to Trim Capital LLC to secure trademarks exclusively in Skinny Nutritional's name, ending tortuous jousting of recent years. That left just $70K in till, but that will be augmented with further capital to be raised by now-private company, Mark said.  
Starbucks will be expanding its Fizzio in-store sodas, its Teavana teas and its wine/beer programs this year, chmn/ceo Howard Schultz told investors on co's earnings call last night.

Liking what it saw in last summer's limited test, Starbucks will roll out its Fizzio handcrafted sodas to 3K stores in Sun Belt, as well as Singapore, South Korea and several cities in China this summer, Schultz indicated. Brand will launch in Ginger Ale, Spiced Root Beer and Lemon Ale flavors, with locally relevant flavors added as summer progresses. Test markets had shown line to drive afternoon traffic at stores.

Schultz also continues to be bullish on Teavana brand acquired last year. He promised that full range of Teavana-branded tea bevs, loose leaf teas and merch will be available in stores by summer, with Teavana Tea Bar concept expanded in coming months from initial units in NY and Seattle to Chicago, LA and additional NY locations. To boost brand awareness, multi-tier tie-in with Oprah Winfrey is kicking in, featuring special Teavana Oprah Chai blend offered in Starbucks and Teavana stores across US and Canada, with donations being made to Oprah Winfrey Leadership Academy Foundation. Tho SBUX brass said nothing specific about potential to offer Teavana as RTD tea brand, Schultz promised unspecified "disruptive" innovations in coming quarters.

And co confirmed that so-called Evenings program, which includes serving of wine and beer and "shareable" food plates, has been vindicated in 25 or so stores in which it has been testing in recent years and is now ready for broader rollout as way to boost traffic during evening dayparts. "Based on these results, we are no longer testing Evenings," said coo Troy Alstead, who anticipates more than 1K stores across US to offer Evenings offerings in coming years.