Bev marketers may begin to rethink their calorie counts, sugar sources, added nutrients and package sizes as result of preliminary nutrition label guidelines released by Food & Drug Administration this week. New guidelines are open for comment for at least 90 days after anticipated Mar 3 posting, but are not likely to take effect for coupla years. Among key changes of interest to bevcos, guidelines dial up font size of calorie count # on label, and add new line indicating grams of added sugar. And to ease complaints of critics who've wondered how, for example, a marketer can deem a non-resealable 24-oz can as offering three 8-oz servings, FDA is expanding disclosure on that front, including mandating larger, boldfaced listing of how many servings a package is deemed to contain.

In other relevant changes to bevcos, agency has proposed that "fiber" listing on panel now exclude purified, processed fibers such as maltodextrin and inulin, in favor of only unprocessed fiber derived from whole foods. And with most Americans getting adequate amounts of vitamins A and C in their diets, the FDA proposes to drop those listings and substitute instead potassium and vitamin D, which more Americans are lacking in diets.

Guidelines were generally applauded by nutrition gadfly Center for Science in Public Interest, which noted approvingly that added sugar line allays concerns of nutritionists who "are much less concerned about the naturally occurring sugars in fruit and milk than the high-fructose corn syrup, sucrose or other sugars added to foods," tho CSPI would like to see a daily value listed for added sugars as well.

For all attention guidelines received this week, regulatory expert Justin Prochnow of Greenberg Traurig assured marketers there's no need to panic over proposals, given likely 2 years or more before they go into effect. "Until the proposed changes are finalized and the new labeling requirements become effective, labels should be made to comply with the current labeling provisions," he advised. Meanwhile, as sign of expectation that guidelines ultimately will entail broad rethinking of formulations, regulatory consultant EAS said it's partnering with FoodMind and Nutrition Impact LLC to create Food Label Compass to harness the expertise of all 3 partners "to create a suite of nutrition analysis, regulatory consulting and strategic services to guide food and beverage companies in understanding the impact, complying, communicating, and capitalizing on the new FDA guidelines." Info and related links are available at http://www.fda.gov./Food/NewsEvents/ConstituentUpdates/ucm385666.htm  

Monster Beverage shares rebounded from trough earlier this week after reporting robust Q4 sales, with strong gains in both domestic and overseas markets. After sinking to $71 range for past 3 days, shares bounced back to $75 in trading today as analysts breathed collective sigh of relief that rare growth engine in bevs doesn't seem to be faltering, despite economic headwinds and whiff of controversy surrounding safety of products. MNST "still packs a punch," headlined RBC Capital Markets' Nik Modi.

Net sales rose 14.7% to $540.8 mil and operating income surged 18.3% to $134.8 mil. While net sales for DSD div - mainly Monster brands - rose 15.2% to $519.4 mil, smaller Warehouse div that comprises natural brands like Hubert's Lemonade and Blue Sky sodas grew by lesser 4.4% to $21.4 mil. "Monster delivered its first topline beat in 7 quarters, and, after excluding certain one-time items, also beat our EPS expectations," heralded RBC's Modi. Bottom line was negatively affected by $4.7 mil in professional services fees to contend with regulatory and legal pressures. Co also suffered adverse foreign exchange effect to tune of $3.6 mil and also had to deal with about $6 mil in damaged products, viewed as temporary issue until more local production can be set up in overseas markets.

For full year, net sales rose 9% to $2.2 bil and operating inc rose 4% to $572.9 mil. While new year got off to slightly slower start, with Jan sales coming in at +12.6%, "we are comfortable that most of the downside is largely attributable to unfavorable weather," wrote Morgan Stanley's Dara Mohsenian.

On conference call last night, chmn/ceo Rodney Sacks reiterated as always that co's products are safe, with half caffeine content of medium-size cup of Starbucks, and cited new research suggesting that less than 3% of caffeine ingested by consumers 18 or under comes from energy drinks. He expressed hope that consumers are ready to move on from controversy. "Depending on what happens on the regulatory front, it might have an impact," he said. "On the other hand, it's been going on for over a year and a lot of consumers are starting to get tired of it and it's becoming old news."

Co Holding Its Own in Legal, Regulatory Skirmishes At various points on call, ceo Sacks sketched out status of various legal and regulatory issues. He said Cunha federal securities case brought in 08 is close to settlement, with any payout fully covered by insurance. Class action suit brought by 3 individuals was dismissed, tho plaintiffs may appeal. Skirmishing continues with atty genl of San Francisco, with hearing set for Mar 4. As for potential impact of voluntary youth marketing guidelines proffered under Senate pressure by biggest energy drink players, Sacks noted that those pertain to kids under age 12, who've never been part of demographic. Industry lobbyist American Beverage Assn is awaiting response from Senate's anti-energy critics as to whether they'll accept guidelines. Tho some critics have exhibited Monster marketing that seemed clearly aimed at early teens, Sacks insisted that below-18's never were part of target, saying that from pre-Monster Energy days of Hansen Energy the target was young adults age 18-34, since expanded to 45+. "People both above and below that age will consume it, but that is not our prime demographic," he said.

New Ultra, Rehab, Muscle Items Make Headway, but Core Green SKU Still Grows On innovation front, latest Monster Ultra flavor, Red, debuted only in Sep but has already exceeded Ultra Blue for latest 13-week period in C&G channel. By now, Ultra zero-calorie items comprise 3 of top 8 sellers from co in core convenience-and-gas channel. Newest Rehab noncarb item, Pink, is now #2 in line. And protein-intense Muscle Monster has quickly become 2d-best-selling protein brand with 22.8 share, despite ACV that's still hovering at 50%. That suggests Monster may become first brand to make a significant dent in leader Muscle Milk, just as years back Java Monster was first RTD coffee to make significant dent vs Starbucks. New Strawberry and Peanut Butter Cup extensions should lend further momentum to protein push. Meanwhile, co is proceeding with restage of Dub line as more broadly targeted Punch, which will bleed into market by Mar/Apr after Dub inventory is depleted.

Sacks took pains to note that, despite new and restaged brands, core green sku continues to gain, as has Java Monster. But Ultra's success has cost some cannibalization of Lo Carb and Absolute Zero sublines, while Import, Kaos and some Rehab sku's have faltered. While Peace Tea, which moves thru Coke system, was up for qtr and year, its recently intro'd multipacks "did not meet expectations and we are winding down our sales of these products," Rodney said. But subline will add glass-bottle coffee subline later this year. Co isn't wavering in belief that Peace brand holds good growth potential, Sacks said.

Overseas Acceleration Confirms Global Potential; Reformulating to Dodge Taxes Sales outside US surged 19.7% to $137.9 mil. Sales acceleration "alleviates concerns about the deceleration in 2Q13 and 3Q13, which was at least partly attributable to shipment timing, and indicates international end-demand remains strong, with Monster gaining share," figures Stifel Nicolaus' Mark Astrachan. Monster outgrew rivals in Europe/Middle East/Africa (EMEA) region, up 15.2%, with particular momentum reported in UK, Spain, Germany, Sweden, France and South Africa. India came aboard last Oct, and plans for local production are moving ahead in Japan (anticipated for Mar), South Korea and India. Cutover to AmBev as Brazilian partner has increased presence every month. Int'l biz still was $3.6 mil in red, and Sacks made it clear co is focusing on cost structure via moves like Q4 realignment of field support that winnowed payroll more in line with growth rate.

Taxes on sugared bevs or energy drinks have become factor in France, Hungary and Mexico, but Sacks averred that co generally is able to sidestep worst impact by reformulating line. That's plan to counter sales tax intro'd in France on Jan 1, after similar moves in Hungary and Mexico helped neutralize effect of taxes, Rodney said.

The Angst That Comes of Not Following Herd Pressed on why it's taking so long to get production going in Japan, Sacks and vice chmn Hilton Schlosberg offered insight into tradeoffs constantly made between efficiency and brand distinctiveness. Brand launched in 11-oz (330 ml) slim can that wasn't available in Japan, necessitating hiring of can co to produce proprietary molds, need for change parts for local mfr's line, and headaches with seaming issues. Usually, new market just requires more modest steps like installation of reverse osmosis gear. Similar issue has surfaced in S Africa, with need to bring in 500-ml can that's not produced there. Still, "we go with the package that we feel has got the best success in the market," vowed Hilton. In Japan, "the performance to date has proven that was a good move." Many bevcos, added Rodney, instead go with package that's locally available and easy to produce rather than focusing on being unique. MNST could "follow the herd" and "use a normal 12-ounce package like a soda can and do it, but we think that's the reason we've been able to make Monster different." Sacks added: "It is important to stay true to that."  

In closing today on investment in Green Mountain Coffee Roasters, Coca-Cola has notified its internal staff that Deryck Van Rensburg is being tapped for prexy post at what's being named Coca-Cola/Keurig Ventures, effective Mar 1. Signaling importance of venture, he'll report directly to Coke chmn/ceo Muhtar Kent. Deryck, who's run incubation unit Venturing & Emerging Brands since inception about 7 years ago, is being succeeded in that post by Scott Uzzell, returning from stint running co's recently acquired Zico Coconut Water unit. As anticipated, KO today closed on transaction in which it's investing about $1.25 bil in GMCR, with some of funds to be used to develop Keurig Cold system that enables home production of Coca-Cola and other CSDs.

In memo to Coke staff, Kent said new post will encompass both domestic and international activities, and cited Van Rensburg's 18-year tenure at Coke, including assignments in Germany & Nordics, Southeast Europe & Gulf and South Central Europe regions. Before joining co in 96 he'd served in mainly marketing roles at Unilever over 12-year period. As for Uzzell, he started at Coke in 93 at Minute Maid before departing to complete MBA and work at Nabisco, returning in 99 in strategy role and then servicing McDonald's customer. He was early employee at VEB and a year ago segued to one of its key investments, Zico, as coo/evp and then ceo, picking up responsibilities of founder Mark Rampolla.

Van Rensburg's departure marks end of era at VEB, and puts highly regarded Coke exec on potentially grander stage than VEB has afforded him, where his record has included steady stewardship of outside investments like Honest Tea and Zico (both fully acquired now) but less impactful efforts at internal product development. Move of Uzzell back to VEB seems to signal, at least on surface, some continuity of unit's strategy.  

Liquid Manufacturing LLC, one-time contract producer of 5-Hour Energy outside Detroit that ended up in legal snarl with shot marketer, had its building and property sold at foreclosure auction last week for $3.25 mil, even as its other assets were separately sold at auction for unknown amount, per local media reports. Reports said that co was believed to have closed doors and laid off all its employees on Fri, after progressively downsizing from peak of 200 employees during heyday a few years ago. Over past 9 years co had produced energy drinks and shots, including 5-Hour, along with juices, sodas, frozen alcoholic pouches, beer, wine and vodka. The falling out with 5-Hour had involved a suit accusing Liquid Mfg of theft of trade secrets in producing a rival shot called Eternal Energy, tho restraining order was quickly lifted by judge after it became evident that development work had occurred before signing of non-compete . . . It took decades, and apparently a host of gnarly technical challenges, but Diet Coke officially is a Slurpee. Diet Coke Frost Cherry launched today in 7-Eleven chain in formulation with 30 calories per 20-oz serving, with availability to broaden to other retailers closer to approach of spring . . . Celsius Holdings continues to build international presence of its Celsius "negative-calorie" bev, signing exclusive distribution deal with UAE International Investments (UII), financial and distribution co run by royal family of Dubai. Tho UII also takes equity stakes in promising brands as part of its strategy, Celsius ceo Gerry David said there's no financial tie at this point.  

Is Fiat a bevco's best friend? Bev-biz folks have been buzzing about visibility carmaker is giving to Aquahydrate in ad that's heavily airing to support 4-door Fiat 500L, with endorser Sean "Diddy" Combs brandishing a bottle of alkaline water to pair of parched buddies lost in desert. (Same ad also touts Diddy's new cable TV network Revolt.) This from automotive brand that last summer teamed with another parsimonious bevco, Jones Soda, for Jonesin' for a Fiat promo in Calif, which tied Fiat's new electric car to Jones' restaged all-natural extension. No comment from Aquahydrate, but Billboard story cites new ad as example of what Chrysler cmo Olivier Francois calls "triangulation of brands," garnering Diddy's star power in return for allowing him to tout properties that are important to him. "Fiat could never write a check for an appearance from Diddy," entertainment rag quotes Francois. "But we are able to offer something instead. The connection. The exposure. The triangulation of brands. Is it product placement? Of course it is. It's Diddy's products in our ad. But it makes as much sense as water in the desert. And in return, we get something unique. Him" . . . What sport comes to mind when you say "Viking"? Why, women's golf, at least to Icelandic Glacial. Bottled water import has inked deal as official water partner for LPGA Tour's HSBC Women's Champions tournament that kicked off in Singapore on Mon and runs thru Mar 2. "We are honored to partner with one of the world's most prestigious golf events, and are inspired by how these top-notch golfers pursue their goals without compromise," figures chmn/cofounder Jon Olafsson, referring to what's often dubbed "Asia's Major." "This attitude is very similar to our Viking heritage and it is exciting for us to provide competitors and consumers with an Icelandic experience in Singapore as we continue to grow our international footprint." Striking rebranding of Glacial undertaken last year plays heavily on Iceland's Viking heritage.  

Argo Tea continues to expand its superpremium RTD line, with ambitions of doubling footprint this year from current 10K stores. Brand packaged in carafe-style single-serve bottles by Chicago-based chain of tea shops by now has cracked Wawa, Pilot and 7-Eleven c-store chains, more than 6K units in all, half of them 7-Eleven stores, said Joe Cugine, prexy of wholesale & biz solutions, during meeting last week at co's Chelsea branch. In NY, brand is prospering in Duane Reade drug chain, which serves function almost like c-store. That's all while brand continues to make inroads into natural channel, including retailers like Sprout's and Whole Foods' Southern Calif region. On grocery side, brand by now is in 300+ Food Lion stores and just garnered role in Kroger's experimental 40-store innovative-bev sets. To service retailers, co has gingerly explored use of DSD operations, including Dora's Naturals in NY, LA Beverage in Southern Calif and Full Circle in Pittsburgh. Joe said co hopes to add perhaps 10 more in targeted regions like SF, Chicago, Mid-Atlantic and New England.

Expansion is occurring as core tea cafes gradually expand, with multiple street locations in Chicago and NY and steady move into alternative locations like malls, airports (Atlanta) and colleges (NYU, Northeastern, UNC-Asheville, Buffalo State and others). Co has indicated that it's eyeing such markets as LA, SF and DC as sites for next brick-and-mortar expansion, but hasn't set any timetables. Reassuringly, in NY and Chicago, where its store presence is most developed, velocity of RTD brand is 30-40% higher than in other parts of country, sign that synergy is playing out between in-store experience and packaged line. Tho Starbucks' acquisition of mall-based Teavana chain and its efforts to tilt brand more to urban settings with greater sitdown experience has had some worrying about impact on Argo, co has taken stance that concerted effort by richly endowed rival to elevate tea occasions can't be a bad thing. Rising tide should lift all boats, Cugine noted, echoing company line. "Tea is the new coffee," he added.

Even as Starbucks tweaks Teavana's in-store model, Argo has been fine-tuning its own colorful, invitingly designed stores, retaining restaurant star-chitect David Rockwell for pair of upgrades in NY 2 weeks ago. Store in iconic Flatiron Bldg at edge of Chelsea and another near Columbus Circle have been revamped in way that's a bit reminiscent of Apple stores, establishing free-standing tables attended by iPad-wielding staffers to ring up orders, as way of opening up space and speeding throughput.  

Pair of incubation advisors active in bevs, food and supplements are planning to work together on select projects: JPG Resources of Battle Creek, Mich, and Healthy Brand Builders, operated out of Scottsdale, Ariz, by well-known figure Jim Tonkin. JPG has developed rep on product side, in areas of innovation, commercialization and execution, while HBB has focused more on biz, marketing and financial strategy side. JPG (at JPGResources.com) was founded by Kellogg and Kashi vet Jeff Grogg in 09 and claims that the 60 new client products it's been involved with under names like Project7 are all still in market. HPP (at HealthyBrandBuilders.com) was founded by Tonkin, 41-year bev vet whose dad was Bay Area bottler, and has worked with likes of Icelandic Glacial, Zico Coconut Water and Nawgan and claims overall to have created 450+ biz and financial strategies for domestic and overseas clients.  

>Here comes another doc-devised drink, joining ranks of brands like Nawgan, Function, Orgain and Ojo: Aquadopa. This one's from a NM doc named Andy Hemmen who's come up with a play on energy with a unique twist: it harnesses only natural source of precursor to dopamine via herb called mucuna pruriens that, combined with ingredients like gingko biloba and modest amount of caffeine, offers channelable, get-it-done kind of drive that's touted as "beyond energy." Mucuna is easily found in pill form in nutrition stores but, Hemmen was surprised to find, doesn't seem to have been used before in a bev. Aquadopa is launching in 8.4-oz slim can priced at $2.99 via the LA-based bev incubator Coast Brands with pickup by major natural-channel player imminent, Hemmen promises. It's signed on Nature's Best for natural channel and is in discussion with DSD player in LA. So far, Hemmen's co, Creative Affects, has been financed by angel investors, and he said it's set for now, with no further capital raise imminent.

Hemmen said brand was outgrowth of his focus on motivation of some patients enduring hospital stays: why do some malinger there while others are full of get up and go? Though seratonin-based drugs like Prozac often are prescribed as antidepressants, Andy found himself more sympathetic to use of dopamine for adding element of drive to mix. Simple Google search indicated that mucuna is only naturally occurring source of dopamine precursor L-dopa. (Energy shots often use earlier precursors to dopamine, phenylalanine and tyrosine, for similar reason.) Tho it's easily available over counter, mucuna still hasn't been blessed as "generally recognized as safe" by FDA, so brand must go out as nutritional supplement. Hemmen figures GRAS status will come, given growing clinical evidence attesting to safety and efficacy. As well as offering general benefit of focused energy, evidence from NIH study of mucuna's superiority to cinnamon-based treatments for those with Parkinson's disease could make anti-aging another prong of marketing attack, he said.

Devised in ginger spice flavor with help from Flavorman of Louisville, Ky, Aquadopa contains mucuna L-dopa, tyrosine, taurine, ginseng, gingko, green tea and quercetin (key agent in FRS energy drink). It's sweetened with cane sugar (coming in at 90 calories per can) and contains modest 60 mg of caffeine. A sugar-free version is on way, Hemmen said. Package tries to evoke trophy as emblem of accomplishment via gold background and red wreath-like motif. Brand info at Aquadopa.com.  

>Here comes another doc-devised drink, joining ranks of brands like Nawgan, Function, Orgain and Ojo: Aquadopa. This one's from a NM doc named Andy Hemmen who's come up with a play on energy with a unique twist: it harnesses only natural source of precursor to dopamine via herb called mucuna pruriens that, combined with ingredients like gingko biloba and modest amount of caffeine, offers channelable, get-it-done kind of drive that's touted as "beyond energy." Mucuna is easily found in pill form in nutrition stores but, Hemmen was surprised to find, doesn't seem to have been used before in a bev. Aquadopa is launching in 8.4-oz slim can priced at $2.99 via the LA-based bev incubator Coast Brands with pickup by major natural-channel player imminent, Hemmen promises. It's signed on Nature's Best for natural channel and is in discussion with DSD player in LA. So far, Hemmen's co, Creative Affects, has been financed by angel investors, and he said it's set for now, with no further capital raise imminent.

Hemmen said brand was outgrowth of his focus on motivation of some patients enduring hospital stays: why do some malinger there while others are full of get up and go? Though seratonin-based drugs like Prozac often are prescribed as antidepressants, Andy found himself more sympathetic to use of dopamine for adding element of drive to mix. Simple Google search indicated that mucuna is only naturally occurring source of dopamine precursor L-dopa. (Energy shots often use earlier precursors to dopamine, phenylalanine and tyrosine, for similar reason.) Tho it's easily available over counter, mucuna still hasn't been blessed as "generally recognized as safe" by FDA, so brand must go out as nutritional supplement. Hemmen figures GRAS status will come, given growing clinical evidence attesting to safety and efficacy. As well as offering general benefit of focused energy, evidence from NIH study of mucuna's superiority to cinnamon-based treatments for those with Parkinson's disease could make anti-aging another prong of marketing attack, he said.

Devised in ginger spice flavor with help from Flavorman of Louisville, Ky, Aquadopa contains mucuna L-dopa, tyrosine, taurine, ginseng, gingko, green tea and quercetin (key agent in FRS energy drink). It's sweetened with cane sugar (coming in at 90 calories per can) and contains modest 60 mg of caffeine. A sugar-free version is on way, Hemmen said. Package tries to evoke trophy as emblem of accomplishment via gold background and red wreath-like motif. Brand info at Aquadopa.com.  

Much in Wall Street's gaze following decision by Coca-Cola to team up with rival home-soda system being developed by Green Mountain Coffee Roasters, SodaStream reported soft ending to 2013 as its efforts to maintain pace of household acquisitions, at time that retailers reporting weak store traffic required intensified promotion that sapped co's margins. It was "disappointing end to an otherwise great year," asserted ceo Daniel Birnbaum, but just "a bump in the road." Investors seemed to buy into notion, with shares of Israeli co holding their own in trading today, despite warning from co that Q1 also was likely to be soft.

In Q4, revs increased 26.4% to $168.1 mil, but net income plunged to $700K from $7.1 mil a year earlier. For full year, revs rose 29% to $562.7 mil, and income slipped 4.2% to $42 mil. Several key metrics came in healthy: co sold record 4.4 mil machines, and gas refill units rose 30% to record 21.5 mil, indicating that consumers are actually using the machines they buy. For 2014, co expects further 15% rise in revenue.

On conference call this morning, Birnbaum showed little sign of concern over Coke/GMCR alliance, noting that key details of planned GMCR system are still unknown. "They're coming out with a different mousetrap," he said. Asked whether Coke selection of not-yet-developed GMCR device might be taken as repudiation of SODA's model, he replied: "Everyone has the right to make a mistake, and it's really their decision and we're going to play it out." Later on, just before signing off, he recalled how Green Mountain itself once seemed to be under insurmountable pressure when its still-tiny Keurig brand was fending off Tassimo entry backed by 3 global giants, Kraft, Bosch and Starbucks, with other rivals on way. "We all know how that worked out," he noted drily. "My personal belief, when disrupting a category with a revolutionary approach, is I'd rather be David than Goliath." Meanwhile, partnerships on flavors with brands like Welch's, Del Monte, Cooking Light and SkinnyGirl and with appliance makers like KitchenAid and Samsung continue to fortify SodaStream as brand, he argued.

As for weak end to year, Birnbaum refuted analysts' suggestions that it may speak to broader issues like maturing of category or price pressures stemming from prospect of intensified competition. Rather, SODA just did what it needed to do to continue to enter new households during its first-mover window. "I don't think it was anything but a tactical event," as SODA "acted very quickly during a window of opportunity where we did not want to lose the household penetration opportunity . . . Household penetration is first and foremost." In hindsight, he said, some of tactics employed such as megapacks or instant redeemable coupons proved ineffective, and SODA would have been better off not cutting spending on in-store demos. None of that suggests any change in fundamental dynamics of category, he argued. To prevent recurrence, co is eliminating some models in pursuit of greater efficiency, and moving to approach where it ships kits to various regions for just-in-time assembly. Latter avoids problem in Q4 where co spent $6 mil reconfiguring finished machines that were being redirected from one country to another or converted from starter kids to megapacks as co scrambled to address pockets of strongest demand. That was "certainly an inefficiency which we are addressing," Birnbaum assured.