Beer Marketer's Insights
Tho rap performers' lifestyles are viewed as making them endorsement risks, David described Flo Rida as "faith-based, religious guy" with ties to gospel and children's causes (such as Florida Youth Football League) and heavy commitment to fitness (he's currently training with mixed martial arts star Wanderlie Silva in LA, Gerry noted). It doesn't hurt that singer has rising presence in Brazil, China and Russia, all markets being probed by Celsius. Under terms of deal, rapper has committed to making trade show appearances (and even performances there), and he'll also cut some Pandora spots as well as videos. Already a Celsius user, he approached CELH thru D3M Licensing Group, which reps him in marketing and licensing activities, David indicated.
Move comes as turnaround of brand under David has been proceeding, and shares recently got lift from 3d-party report that bought into strategy. After massive retrenchment, David said he's started process for co to go back to being a financially reporting co, move that should enhance liquidity of shares.
Talking to BBI this week after dust had settled, Robb was relieved not to have heard any substantial negative comments about line, which was sampled out of milk jugs because production run won't be concluded for another 2 weeks. Final version will offer some differences from comps that Mix1 has been showing in buyers' offices and on Mix1Life.com, with protein coming in at 26 g rather than anticipated 24 g (versus 9-15 g range under Rouse) and sugar gratifyingly coming in at 19 g (even lower than the 21 g of versions with only 15 g of protein). To accommodate Fuji full wrap, black background will be matte rather than glossy but co will stick with striking diagonal color contrast to help assure shelf presence. A few easy tweaks will be made in response to show comments - say, dialing down stevia in Blueberry Vanilla flavor - but overall, Robb was happy to hear that buyers didn't think line tastes like a protein drink. Brand has garnered interest because it's among few entries that don't mimic Muscle Milk's nutrition-channel positioning with body builders at core, instead opting for role as meal alternative for broader public. Whether it can succeed under 3d ownership team is about to get its test.
EXPO WEST: Guru Energy Attains USDA Organic Certification; Moves 'Makers' Push to West Coast
Tho brand launched as natural brand in Canada back in 99, improved availability of stable, soluble organic versions of botanical ingredients - crucially including green tea extract - put effort for full certification over the top, said ceo/cofounder Ray Jolicoeur. So co was able to tweak formula to move from hi organic content beyond 95% threshold required for certification. Energy blend that includes guarana extract and green tea offers 100 mg of naturally occurring caffeine per 8.4-oz can, at SRP that's unchanged at $2.29-2.49, slight premium over Red Bull. A 12-oz pack goes for $2.69-2.99. (Note that Guru has history of far-sighted thinking on ingredients, developing by itself the stevia/monk fruit sweetener blend that powered its Lite entry in 06. Today that's burgeoning combo offered in off-the-shelf versions from multiple suppliers.)
As with rivals at Hiball (story above), Ray sees "cultural shift" occurring among more ingredient-conscious consumers that's putting natural and organic energy brands like his into relatively mainstream retail sets. As supermarkets move to more of a "green grocer profile," with greater emphasis on produce section, "we see opportunity," he said. Brand has been growing briskly in Kroger stores, where it's typically shelved in fitness or natural sets, and Ray sees potential among c-stores that are adding natural items. Fitness channel, including Lifetime Fitness, now accounts for 20% of sales, too. That said, co cites SPINS data showing it's highest-velocity energy player in its core natural channel, even if it's still dwarfed in sales $$ by brands like Steaz. Still, with retail environment evolving, Guru is rethinking route to market, reconsidering DSD after earlier push around 07 in NY market sputtered out, perhaps too far ahead of its time. Proliferation of flavors at time also didn't pan out.
On marketing front, brand continues to look to tie into fledgling "makers" manufacturing movement that's been taking hold in nation's cities, notably including brand's Brooklyn base. Brand has been creating online articles and videos that profile entrepreneurs in its home bases of Montreal and Brooklyn - from custom motorcycles made by Maxwell Hazan to spirits distiller in Redhook - and is now extending program to LA and SF. Those stories "represent what Guru's all about, good energy to make great things," he said. He's hoping that aligning with influencer types at heart of these cos will spread word on brand.
Expo West served mainly as platform for anticipated launch of 8.4-oz cans (BBI, Oct 9) but founder Todd Berardi told BBI after show that momentum lately has been building, and he has plausible hope that brand can break $5 mil revenue barrier this year. Brand has been growing at triple digits within all 3 key channels, natural, conventional and online (where Amazon has proved fertile venue). To meet demand, brand is being produced on both coasts every 60 days. Hiball's "core growth and focus remains in the natural channel/Whole Foods, but we are looking to test the brand in the convenience, food service, drug and mass channels over the next 12 months," said Todd, who's based in Bay Area while partner Dan Craytor works out of Colo. Intriguingly, Berardi added, co is in discussion on test "with a large national DSD network," tho he couldn't shed more light at this point.
Hiball's progress into mainstream sets accelerates in next 3 months, ahead of summer. Hiball's Organic Pomegranate Acai sku has been picked up nationally by Safeway, while national biz at Kroger has been upgraded with pending Jun move from fitness set, where it was top-performing brand, to higher-velocity, higher-visibility bottled-water set. Test will commence in Target stores in Calif and NY in Jun, via Kehe as distributor. In May, brand enters Albertson's Rocky Mtn div. As for c-store target, brand will establish first beachhead for its 16-oz cans in that channel next month, opting for regional chains Plaid Pantry out West (via newly added DSD shop General Distributors), My Goods Market (formerly called PC&F) from Colo west, and Sheetz on East Coast. "I have no idea how the brand will perform (in c-stores) or if it's ready," Berardi allowed, but time seems right to at least put proposition to modest test.
Brand also is pushing harder into Northeast, underdeveloped market even for conventional energy brands. On distribution front, it's signed up NY's Rainforest house, which is able to service entire Northeast footprint of Whole Foods. Berardi is hopeful added merchandising effort will advance growth in that region to level of rest of US. Hiball also has added FreshDirect home-delivery service to mix and will get all its sku's into Shop Rite's deli coolers next month. Brand this month will get its 16-oz cans into last 2 Whole Foods regional holdouts, North Atlantic (New England) and Fla.
At show, Hiball debuted 8.4-oz cans that offer complement to core 16-oz cans that's more suited to female consumers, allows for more accessible price point of $1.99 (vs $2.99 for 16's), should serve as solid foodservice offering and offers opportunities for 4-pack displays at retail. New pack debuts with 4 most popular sparkling energy water flavors and 2 organic energy drink flavors, including new Ginger Ale, starting in Jun with 4-packs in Whole Foods, with singles available everywhere else. As with core 16-oz cans, new Ball items employ Coors-style cold activation technology that turns can graphics' white dots blue when cans hit 45 degrees. Note that new size takes brand back in direction of its roots as 10-oz glass-bottle brand, before restage to 16-oz cans put brand on sharper growth trajectory. At time, that was considered risky move, because it put distinctively packaged natural brand into core package of conventional energy brands Monster and Rockstar, as Todd acknowledges. But it's clear now that it's paying off, and smaller cans were drawing considerable interest even from existing customers of 16-oz can, Todd said.
At Fave Juice Co, Coke vet David Kirkpatrick has been experimenting over past year with even more nutrient-dense fruit/veggie blend than such popular offerings as Campbell Soup's V8 V-Fusion. Shelf-stable Fave brand (a play on "fruits and vegetables" as well as "favorite") is aimed squarely at moms, with pitch that it contains not 2 but 3 full servings of fruits and veggies per 8 oz, at just 60 calories (vs 140 calories for V-Fusion) and with low sodium content. So far it's going out just in 46-oz multiserve bottles priced at $3.99, consistent with rest of category but offering more bang for buck. Initial flavor lineup is Strawberry Banana Kiwi, Pomegranate Blueberry Goji and Orange Tangerine Pineapple.
Practicing What He Didn't Preach David, who logged 20 years at Coke before moving on to more entrepreneurial roles at Ubiquity Brands and NSF Int'l, was hired on for Fave's cmo role by industry scientist who'd initially brought him on as consultant to help answer question: should he sell his technology, license it out or launch brand on his own? (Kirkpatrick said that individual prefers not to be indentified, but David's LinkedIn page lists him as concurrently holding sales and marketing role at Goodwave Technology, Hainan, China-based agribiz firm focused on fruits and veggies whose own Web site lists it as ingredient developer for Fave. So his client likely was founder/chief scientist there.) Knowing well the forbidding odds against new bev brands, Kirkpatrick urged his client not to launch a new brand, but client decided to proceed anyway and hired David to figure out how to get it done. So far, brand has entered such retailers as Meijer, HEB, Supervalu, Fresh Market and Canada's Loblaw's, with Sprout's coming aboard next, he said. Co based in Northville, Mich, employs 7. Brand info at FaveJuice.com.
Califia Farms' innovation engine continues to rev up. At Expo West, Pasadena, Calif-based marketer of juices and almondmilk offered flock of new items, including shelf-stable Barista Blend along with pair of new permanent flavors and seasonal entry. As reported earlier this week, ceo Greg Steltenpohl also disclosed that co will exit whey-based protein segment in favor of plant-based entry this summer in response to consumer requests (BBI, Mar 11).
Tho Califia Farms' identity is with refrigerated items, Barista Blend responds to market opportunity at coffeehouses that are constrained for space but whose customers are asking in growing numbers for non-soy, lactose-free accompaniments to their coffees. So co was able to devise almondmilk version with 1-year shelf life (at cost of only 1 g more of sugar), in compact Tetra Edge 32-oz carton that occupies minimal space in shops' constrained fridges. Barista stationed at Califia booth was carving elegant designs into lattes to demonstrate how well item steams. It will go somewhere under $3, Steltenpohl said.
On refrigerated front, co is augmenting its line of distinctively curved 48-oz bottles of almondmilk with Unsweetened Vanilla and Chocolate Coconut, latter made with Fair Trade cocoa powder. Vanilla item, due in April, clocks in at 35 calories per 8-oz serving, while Chocolate Coconut, due in May, has 100 calories per serving. And offering lower-calorie alternative to Starbucks fall-season mainstay, Califia Farms will offer in Sep a Pumpkin Spice Latte flavor for its line of Cold Brew Iced Coffee with Almondmilk, at just 100 calories per serving. Ingredient bill includes pumpkin puree, coconut cream, sea salt, cinnamon, nutmeg and ginger. That's similar thrust to lightly sweetened Holiday Nog for core almondmilk line, which offers 50-calorie alternative to hi-calorie, hi-fat grocery mainstays.
Co was showing its newly launched single-serve almondmilk packs, proving co's most successful new sku's so far in their 3 months in market, entirely in natural channel. Consumers have responded well to line's adventurous, coffeehouse-style flavors like Salted Caramel, Greg noted.
Meanwhile, on tangerine juice side, co has proceeded with planned rebranding of Cuties line, harmonizing color scheme of 5-sku big-bottle subline with that of original kid-targeted fruit boxes while adding prominent flavor callout. Action also was to be found outside Califia Farms' own booth: Bhakti Chai will employ its almondmilk to offer non-lactose alternative in its bottled chai line. (Story below.)
At Expo West, KeVita founder Bill Moses confirmed he's prepping test via Naked system in NY and LA markets, with further details to be disclosed down road. KeVita team also is looking to push more aggressively into foodservice and expects soon to disclose some DSD additions to distribution mix. By now it's clear, he noted, that $2.99 price point is sweet spot that sends velocity way up vs $3.49+ price of rival probiotic or kombucha entries. That's price in national launch in Safeway's produce sections. As for Pepsi equity talks, no comment as usual from Bill & co, but BBI hears nothing's happened yet after coupla rounds going back more than a year as PEP waits to see if sparkling probiotic category is for real.
Little nugget of news came as brand continues on strong growth tear, with sales last year advancing 91% in SPINS data to nearly $20 mil in sales in core natural channel; overall, that leaves co with about $12 mil in revenue, Bill confirmed. Marketing chief Bill Lange, just aboard after good run at Zico Coconut Water, said brand's ACV in natural is up to 80% now, and it's looking to double biz again in current year. Newly opened 20K-sq-ft office/plant in Oxnard, Calif, can support doubling of biz each year for 5 years, Moses noted. Momentum to date has been accomplished without any actual consumer marketing. Bill's task: "putting a plan together with the resources to generate pull as well as push" for brand that's currently at same size as Zico was when he joined that co.
At show, co showed 3 new sku's, all out in Whole Foods now and available to conventional grocers in Jun: Blueberry Cherry, Tangerine and Hibiscus Berry Daily Cleanse, buttressing Lemon Cayenne Daily Cleanse already in line.
The folks at Nestle Waters North America assigned to Sweet Leaf Tea readily admit it: since brand's migration into Nestle ownership and distribution, it hasn't exactly torn cover off ball on innovation front. In fact, it hasn't had new flavor in 5 years. At Expo West this year, they changed that.
They launched a lightly caffeinated (26 mg) Coffee-Tea Blend subline in Original Sweet and Vanilla flavors, sweetened with organic stevia, with a black label on which brand's trademark "granny" cartoon figure sports dark-rimmed glasses. It goes for $2.69 per bottle, like rest of line. Marketing mgr Meghan Conboy said co has designs on mashing up other categories in similar way as spur to out-of-box thinking.
After experiment with inexpensive cans for c-stores didn't pan out (they were pulled last year), co is reintro'ing plastic bottles, this time not the 20-oz PET bottles of yore but 16-oz BPA-free bottles. But co will continue to emphasize glass bottles as workhorse package for brand whose premium identity they're determined to restore. In addition, top 4 flavors are going into 59-oz multiserve PET bottles in groceries. Distribution is mix of DSD, broadliners UNFI and Kehe, and direct shipments to major Nestle accounts.
Tradewinds to Add Refrigerated Item; Take on Lollapallooza Role Meanwhile, Nestle's Tradewinds line in Cincinnati is prepping test market for refrigerated carafe-bottle entry in next week or 2, as way to crack produce section, where brands command premium among health-conscious consumers and marques like Coke's Honest Tea and Gold Peak Tea have made big headway. On marketing front, NWNA will switch Sweet Leaf's traditional sponsorship of Chicago's massive Lollapallooza music fest to Tradewinds to build on that brand's strong Midwest identity.