Turns out that Marley's Mellow Mood vets who reconvened last fall as Splash Beverage Group have more in their plans than just launching their own brands, such as sports drink licensed from mixed-martial arts brand Tapout: they're also hanging out shingle as incubator for already-launched brands. First client is familiar name: Hawaiian coffee-fruit-based KonaRed, which they've quickly restaged and are pushing out to dozens of DSD distributors. Splash prexy Kevin McClafferty says talks are underway with brands as large as $35 mil in sales, and he expects more such assignments soon. Here's rundown on multifaceted new player in bevs, which will have formal coming out at upcoming Natural Products Expo West in Anaheim, Calif (with show bursting at seams, Splash will be housed in basketball arena adjoining Anaheim Convention Center).

Company Claims 43 DSD Commitments to Date, with Tapout, KonaRed Most in Demand Ft Lauderdale, Fla-based co was created last year by ceo and former Red Bull North America exec Robert Nistico, who pulled in McClafferty as prexy and Lee Brody as cmo as they exited Marley's Mellow Mood marketer Viva Beverages, where they'd all previously worked, during period of retrenchment by ownership group. Other key members of brain trust include vp product development Sanjeev Javia, food scientist specializing in extreme athletes' performance needs, and sales directors Jim Rice (West region), Eileen Cassidy (Central) and Quinn Passarelli (East). Hector Rivera is vp for Latin America.

Funded by Nistico, McClafferty and unidentified angel investors, Splash started by garnering rights to launch sports drink line based on $350 mil (sales) Tapout brand of MMA apparel and accessories, key sponsor of Ultimate Fighting Championship. But it quickly found other properties available for it to take an ownership stake in - a key tenet of co, to align its own interests with those of brand partners - as well as array of already-launched brands willing to offer equity for helping hand. Co also is playing on alc-bev side, starting with flavored tequila line called Salt, and boasts some unidentified spirits execs on its board. (Since we're not Booze Business Insights, we won't belabor that part of portfolio, which will be similarly extensive to NA part.) All Splash items, both alc and NA, are all-natural. To date they've received 43 verbal commitments from DSD houses, all of which will be taking on Tapout and KonaRed, and sometimes additional Splash items. Tho contracts haven't been signed yet in many cases, they span geographic band ranging from Southwest quadrant of US to Northeast and include Haralambos and Straub in Calif, Spike in Ariz, New Age in Denver, Central Beverage and other members of Midwest Beverage Group in Heartland, and many members of NIDA alliance in Northeast. A few in other regions, such as Maletis in Ore, have been signed on, but co generally is waiting to map out Northwest and Southeast regions further down road, McClafferty said. Eventually, Splash has vision of going public, he said.

For KonaRed, Quick Revamp of Package, Addition of 2 Flavors KonaRed, which is publicly traded, comes as bit of surprise in mix, but it's representative of "shared resource" model that co hopes to take to other emerging bev brands looking to minimize SG&A while leveraging expertise and distribution and retailer ties of Splash team. Deal inked just 2 weeks ago gives Splash "significant equity stake" and N Amer distribution rights for marketer of coffee-fruit-based antioxidant drinks. Splash team has moved quickly to drop co's existing 16- and 32-oz bottles in favor of new trial-size 10.5-oz bottle that will allow brand to go out nationally at more approachable $2.29-2.49, promoted at $1.99. Tho KonaRed has played with single entry for 3 years now, Splash is immediately adding 2 flankers that blend core coffee fruit ingredient with organic green tea in one case and coconut water in other. As noted, all 43 DSD shops that have verbally committed to Splash have included KonaRed in initial mix, meaning for first time brand will have significant national exposure beyond natural and nutrition channels. KonaRed recently disclosed purchase agreement with Chicago-based Lincoln Park Capital Fund that gives equity firm opportunity to invest up to $12 mil of equity capital over next 30 months, so it's ready to make more sustained push.

Tapout Builds on MMA Brand's Broad Presence Development chief Javia has formulated line to mimic what body excretes with perspiration during athletic performance, offering immediate cell recovery as well as hydration benefits and dash of energy. It's similar premise to what Gatorade has attempted with its G3 system, Kevin noted. In Brody's hands as cmo, brand has segued from somewhat clinical look to more in-your-face image, in brightly colored full-wrap PET bottles priced at $1.99. It launches in Wild Orange, Berry Punch and Citrus Kick flavors. "Born in the octagon and unleashed on the world," is credo of what's positioned as "advanced performance drink." Splash owns 100% of this its flagship bev line, paying royalty to Tapout, whose founders will be at Expo West to promote bev brand.

Bruce Tea Line Claimed to Originate in Kung Fu Icon's Notebooks Splash team seems to be putting its collective experience leveraging iconic figure of Bob Marley in relaxation line with its work on RTD line called Bruce Tea that sports late athlete's iconic flying-kick as visual and endorsement "Blended by Bruce Lee." That's reference to fact that recipes originated during prime of his career in handwritten notebooks of athlete, tho it's taken sustained work with Lee's daughter Shannon Lee and Allen Flavors to render ingredients palatable to general audience. Line due in time for summer will debut at Expo West in 15.2-oz glass bottles sporting nutrition (not supplement) ingredient panel at $1.99. Initial 2 flavors, both black-tea-based, are JKD with ginseng, royal jelly and honey, and Tao. Also coming is more energy-oriented canned line called Kung Fu.

Amazoo Part of Broader Tie to Brazil's Global Beverage Amazoo stems from tie to Brazil distributor Global Beverage that McClafferty fostered when he took Marley line there in wake of distributor's loss of Monster assignment to AmBev. Amazoo brand is well established in Brazil but has been Americanized by cmo Brody, who'll offer it in DSD-friendly shelf-stable aseptic box whose 250 ml size can go out at $2.99 price, promoted at 2 for $5. Unlike more established US acai brands like Sambazon, Amazoo retains acai pulp, for offering that more closely resembles acai bowls that are staple in Brazil. Brand will hit US well ahead of World Cup frenzy late this spring. Besides owning in US and partnering on worldwide distribution, Splash Beverage Group also has established div called Amazoo USA helmed by McClafferty, a former Bolthouse Farms exec, that will bring in superfruit juices and other products from its Brazilian partner.  

Mom's Organic Market, quirky operator based in Rockville, Md, is making first move beyond Md/Va area with opening later this week of store in Bryn Mawr, outside Philadelphia. It becomes 11th store in regional chain launched by Scott Nash out of his mother's garage in 1987 (hence co's name) and is still family owned and operated. Tho stores don't go in much for Whole Foods-style high finishes in décor, they've carved out distinctive niche for everyday low prices in segment where sticker shock is frequent, and for high-toned stances taken by Nash: he was among first retailers to drop plastic bags (in produce section he offers compostable bags) and to ban all items that employ licensed cartoon characters to hook kids, finding organic alternatives instead. He dropped all bottled water in 2010, instead offering customers free refills of reverse-osmosis filtered water (up to a gallon each visit, and 39 cents per gal after that). All produce is certified organic, and customers who drive electric cars to shop there can get them charged for free. Chain will match prices on packaged brands of any rival, including Whole Foods. On bev side, Mom's was key launchpad for Honest Tea brand, founded in nearby Bethesda.  

Soup and biscuit marketer Campbell Soup turned in another disappointing performance of its US Beverages unit in Q4, this time saying V8 erosion was "primarily due to the impact of the transition to a new distribution network in single-serve immediate consumption channels." That was reference to ongoing segue spanning several quarters to indie DSD houses after unraveling of long partnership with Coca-Cola bottling network - tho, surprisingly, this seemed to be first time CPB had mentioned this key change, or that analysts participating in Fri conference call had heard about it, judging by their surprised questions. All told, US Bevs suffered 3% sales decline to $176 mil and 16% earnings drop to $31 mil, with declines said to have occurred across portfolio.

"We're now working with predominantly convenience store customers not only to secure the V8 distribution we had, but to expand it," said ceo Denise Morrison of transition that had been anticipated for better part of a year among bev watchers and which went into effect on Jan 1. Denise acknowledged that V8 suffered from "wind-down" of Coke system once it became clear a coupla quarters ago that partners were going their separate ways. Her evp/cfo, Craig Owens, noted that Coke breakup offers chance to go to distributors and retailers with both V8 and Bolthouse brands on joint basis, opportunity "that we didn't really have under the Coke agreement." As noted in BBI in recent months, handful of distributors with refrigerated capacity, including some ice cream or dairy houses, have moved to pick up both good-for-you brands for their territories (BBI, Sep 25 and Nov 15).

In contrast to US Bevs, Bolthouse & Foodservice unit continued to be reliable growth generator, with Q4 sales rising 2% to $359 mil and operating earnings advancing 20% to $36 mil. Foodservice side was weak, dragged down by soup, but 6% sales gain on Bolthouse side was driven by double-digit gains in premium refrigerated bevs and salad dressings, and lesser growth in carrots. Morrison expects strong performance to continue, boosted by unit's plans "to launch an exciting suite of innovative new beverages and salad dressings this spring."  

Celsius Holdings, which has carefully meted out its marketing spending to minutely targetable items like Pandora digital radio, has taken plunge into NASCAR. On Fri, Fla-based marketer of Celsius "negative calorie" drinks and chews said it's become official energy drink of TriStar Motorsports for 2014 NASCAR Nationwide Series season, and associate sponsor on TriStar's #10, #14, #44 and #91 Toyota Camrys. Then, yesterday, it announced partnership with TriStar driver Blake Koch for 2014 Nationwide Series, adding charismatic young driver who's known for off-track activities such as participating in Ironman and Tri-Athlete triathlons and also has big following in faith-based community. Twin moves ally brand with motor sport that's been aiming to align itself with healthier lifestyles.

Moves might seem to mark divergence from strategy of ceo Gerry David, who's dialed back marketing spend of prior ceo in favor of carefully targeted digital radio and the like. But Gerry told BBI that alliances were acquired on terms that, while he can't disclose them, were simply too good to pass up, given 70 mil audience reached by NASCAR, which has been working hard to broaden its appeal among females, a key Celsius constituency. "The deal was so exceptional there was no way I could walk away from it," he said.

Thru 33 races of Nationwide Series, Celsius will be continually restocked in barrel coolers in pits, which should garner it lotsa eyeballs among fans on site and in TV coverage. Brand logo will appear on TriStar cars and on fire suit and hat of Koch, who says he's been Celsius consumer since 09, using it on both race days and triathlon training days. Brand will also be involved in contest associated with car touting Hollywood super-producer Mark Burnett's forthcoming Son of God flick at Daytona next week, garnering shoutouts on social media reaching upwards of 500K fans who're anticipated to enter for chance to hang in pits during race.  

A new statewide tax in Illinois would add a penny per ounce to price of packaged sugared soft drinks "along with the syrups and powders used to flavor them," reported Herald & Review. "We as a state need to do a better job of educating the public and children in particular about this issue and the health risks," said state Sen Mattie Hunter, who's backing bill. Opposition is already lining up. "This tax adds $2.88 to a (24-pack) case of soda," pointed out Mark Denzler, veep of Ill Manufacturers Assn. "It's nearly a 50% increase in the cost of it. So folks that are scrambling to buy groceries are going to have it even harder." Report notes that similar soft drink tax proposals in Ill have been non-starters with state lawmakers so far . . . Center for Science in Public Interest, whose celeb targets in recent months have included AriZona endorser Shaq O'Neal and SodaStream endorser Scarlett Johansson, has got former Olympic figure skating Michelle Kwan in its sights now. She was appointed to President's Council on Fitness, Nutrition & Sports in 2010, but last summer signed on as one of Coca-Cola's "Four-Packs" of "active, living ambassadors" to work Sochi Games. On KO's Web site, rabble-rouser notes, she's seen holding bottle of "non-diet Coke"; together, they're described as "2 of the most refreshing things on ice." Contends CSPI: "The dual roles for the 5-time world champion skater cannot be reconciled, since Coca-Cola and the President's Council communicate opposing messages when it comes to sugar drinks."  

Coca-Cola chmn/ceo Muhtar Kent pledged to work to "restore momentum" to co after turbulent global economy, poor weather and challenges to CSDs led to softer 4th qtr, particularly in core North American market. Tho earnings per share of 46 cents were in line with analysts' expectations, "quality was low, as below-the-profit-line items added 2 cents," noted Morgan Stanley's Dara Mohsenian. "Soft end to soft year," headlined RBC Capital's Nik Modi as KO shares trended downward, off 4% by mid-afternoon. For his part, Kent defended "sound financial results even in a challenging environment," but promised to get back on track this year to meeting long-term financial targets that co has deemed 2020 Vision. He'll get there in part by accelerating bottler refranchising program, saying further announcements are imminent - which some believe may include Coca-Cola FEMSA as new US franchisee. He's also extending productivity initiative by another $1 bil thru 2016, with savings to be applied mainly to media spend.

Refranchising Accelerating; Hint That FEMSA May Be in Mix? A few days after rival PepsiCo said unequivocally it won't refranchise N Amer bottling ops (BBI, Feb 13), KO chief indicated that he's going in opposite direction, moving to "expedite" plan set in motion in Oct 2010. At time, co established 4- to 5-year timeframe to commence refranchising activities, and "2014 is the fourth year," Muhtar reminded listeners today. As plan garnered traction, KO last Apr had set moves to refranchise some territory to 5 bottlers situated in Southeast and South Central parts of US: Coca-Cola Bottling Co Consolidated, Coca-Cola Bottling Co United, Swire Coca-Cola USA, Coca-Cola Bottling Co High Country and Corinth Coca-Cola Bottling Works (BBI, Apr 16). On today's call, Kent said one of those transitions has seamlessly occurred and other 4 deals are "well along" and should happen later in year. Intriguingly, Kent also said co will imminently announce new bottling partnerships "whose ownership represents the diversity of customers we serve." That could be veiled nod to Mexican power Coca-Cola FEMSA, which has set sights on SW quadrant of US with heavy Mexican-American population base. BBI contact says FEMSA lately has had teams visiting facilities in San Diego area and otherwise assessing Southern Calif market, so that seems to be strong possibility.

Softer Revenue, but Noncarbs Were Strong In Q4, net operating revenues eased 4% to $11.04 bil. Worldwide volume edged up 1%, off from 3% consensus view. Operating income sagged 4% to $2.11 bil. For full year, revenues were off 2% to $46.85 bil, while operating income sagged 5% to $10.23 bil. In crucial N Amer market, which accounts for more than half of total co revenues (excluding KO-owned bottlers), sales were flat at $5.27 bil in 4th qtr. Volume was off 1%, vs analysts' consensus view that it would edge up 0.9%, with 2% sparkling-bev decline attributed mainly to weakness in Diet Coke brand. By contrast, buoyed by strong performers like Powerade, Simply, Gold Peak and Smartwater, noncarb volume rose 5%. Operating income nominally was flat at $557 mil, but was down 12% excluding impact of currency fluctuations, "reflecting softer volume trends, especially in sparkling beverages, and the timing of certain operating expenses," KO said. "2013 was a challenging year and I'm not satisfied with our overall performance," allowed Kent, tho he took solace in continued claimed gains in volume and value share. Citing new mgmt team that's seen Sandy Douglas replace Steve Cahillane in top role, Muhtar said Coke stands "steadfast in our commitment to building long-term value in our flagship market."

'Rational Pricing' Is Goal Rivals may see bit of a disconnect there given KO's role as aggressor on promos during key holiday periods in past year, but Kent again avowed that as market leader, Coca-Cola has interest in maintaining "rational pricing" and will be expecting to achieve its volume gains this year with positive price/mix. Echoed N Amer leader Sandy Douglas: "Key element of American growth is getting our pricing."  

Frava – whose name derives from its unusual blend of fruit juice and java – finally is ready to move beyond its NY State footprint, even as it embarks on capital raise aiming at $3-5 mil.  NYC-based RTD brand launched by pair of recent Colgate Univ grads has added further depth to its NY distribution network while signing its first house outside city, Pepsi bottler Bernick’s in Minn, said co-founders Evan Berman and Alex Portin.  In NY they continue to work with Drink King as their primary DSD partner, but have buttressed them with Harold Levinson Associates, Coffee Distributing Corp and Island Fresh so they can better penetrate such ancillary venues as corporate cafeterias and soup chains like Hale & Hearty.  They’ve also gotten nod to enter about 250 Target stores for summer.  On product front, they’re toying with stevia as sweetener and trying to figure out whether they can move much below current 40%-juice formulation without undermining product proposition.  All told, results from carefully calibrated expansion have been encouraging enough for duo to seek additional funding to step things up.  They’ve shot video at alma mater, where brand has big following, for IndieGoGo crowdfunding effort (they couldn’t crack Kickstarter, which won’t do biz with energy drinks), but they’re also making rounds of more orthodox capital providers in hope of snaring $3-5 mil in growth funding.

WhiteWave Foods said its revenues surged 11.5% to $679 mil in 4th qtr.  Net income jumped 24% to $39 mil and earnings per share finished up 22% to 22 cents.  For full yr 2013, WhiteWave revs were up 10% to $2.5 bil.  Net income was also up 24% for yr to $129 mil and EPS increased 23% to 74 cents.  WhiteWave noted sales growth in qtr and for full yr “has been primarily volume driven across” co’s North America and Europe segments.  “In addition to creating the infrastructure for an independent company in 2013, we also outperformed our expectations,” said chmn/ceo Gregg Engles.  He pointed to addition of Earthbound Farms and recent announcement of joint venture in China as “exciting growth opportunities.”

Silk Sales Still Smoking; Line Expansions   North America segment sales were up 11% to $569 mil in Q4 and up 10% to $2.1 bil for full yr.  Sales at Plant-Based Food & Bevs segment were up 13% for both qtr and full yr, driven primarily by 60% gain for Silk in 4th qtr, nearly same gain (+58%) as in 2013.  To “build on the strength of Silk,” WWF is launching new line of flavored almond and coconut milk blends as well as “a new variety of almondmilks enhanced with protein and fiber.”

In WWF’s Premium Dairy segment, which includes Horizon Organic milk, sales managed to grow 5% for qtr “despite” co’s decision “to exit certain private label manufacturing arrangements and no longer service a national coffee chain.”   At co’s Coffee Creamers & Beverages div, which includes International Delight and Land O’ Lakes brands, sale grew 13% for qtr and 12% for full yr 2013.  Flavored creamers grew by 8% for qtr and yr as they continue to benefit from increases in coffee consumption and “coffee flavoring trends,” noted co.

Interesting exchange at very tail end of PepsiCo’s quarterly conference call this morning not only brought another flat denial from PepsiCo that it would consider making acquisition of major energy drink player but also may have reflected mounting stresses with its energy drink partner Rockstar over launch of high-octane Mountain Dew Kickstart.  The issue: if Kickstarter is defined as an energy drink, it would seem to be blatant violation of Rockstar contract that prohibits co from adding energy lines anywhere it distributes Rockstar, which is in most of country outside NorthernCalif, Pacific NW and NY.  And on today’s conference call, PEP chmn/ceo Indra Nooyi seemed to define Kickstart precisely as that.

Her comment was prompted by question from CLSA’s Caroline Levy on whether PEP would consider acquisition that might put it more firmly into growing energy segment.  Nooyi took lead on answering, noting, “Mountain Dew Kickstart is our version of the energy drink that’s right for the masses, and we distribute other energy drinks . . . We’ve looked at this category long and hard and we look at what we can do with those businesses and whether it’s value-creating for shareholders if we were to make any acquisition, and all our analysis says it will not, and so we’ve chosen not to do an acquisition here.”  So no deal is contemplated, as we’ve heard before from Indra.  But her remarks also seemed to be acknowledgement that she does view Kickstart as an energy play.

That may be significant because BBI has heard that issue has caused crisis of confidence between Rockstar founder Russ Weiner and his Pepsi partners, who otherwise seem to have enjoyed fruitful working relationship that’s in stark contrast to Rockstar’s rocky relationship with its previous distribution partner, Coca-Cola.  Yet in past coupla years PEP has launched all-natural Starbucks Refreshers slim-can line, which gets lift from green coffee extract, and Kickstart, packed in 16-oz can that’s IDed with energy segment and carrying elevated caffeine level.  So are those contract violations?  Efforts in recent months to solicit comment from Rockstar have been unavailing, and asked again today, co simply said, “We cannot comment at this time on the situation.” 

On call, cfo Hugh Johnston jumped in immediately after Nooyi’s comment to distance Kickstart from identity as energy brand.  He acknowledged that Rockstar distribution arrangement has worked well for both parties and added that Kickstart “plays around the energy space but it’s not in the energy space in a similar way that Starbucks Frappuccino and Iced Coffee and other potential innovation go down that path as well.”

It’s clear others on Wall Street besides CLSA’s Levy feel big move into energy could be transformative for PEP.  In expressing disappointment with PEP decision to stand pat, for example, Stifel Nicolaus’ Mark Swartzberg noted, as argument for spinoff, the “benefits from focused capital structure and management.  For example, a separated management could choose a game-changing move in North America, buying Monster Beverages.”

As for Rockstar’s rumored unhappiness with Pepsi’s new energy-oriented entries, it’s not clear what recourse it might have, aside from bolting relationship to try to go back to another earlier partner, say, Dr Pepper Snapple Group, or to beer houses that initially built brand.  More on “situation” as we hear it.

Unlike LeBron James, when he was ready to announce The Decision to move to Miami Heat, PepsiCo chmn/ceo Indra Nooyi didn’t orchestrate special TV appearance to flag outcome of massive structural rethinking.  But in course of regular quarterly earnings call today, she offered up her own much-awaited, year-in-the-making decision: co will stand pat, with no plan to spin off struggling North American Beverages unit, as some investors and analysts have urged.  In context of recent rhetoric from PEP execs, that might have been perceived as anticlimactic moment, but Indra was firm on another point too: she sees no benefit to refranchising bottling operations either, decision which puts PEP on dramatically different strategic course than Coca-Cola, which is embarked on precisely that project in N Amer. 

Stressing that strategic review had been exhaustive, Nooyi reiterated familiar arguments that maintaining snacks and bevs in single co under Power of One rubric offers greater clout at retail for both, and creates efficiencies on everything from back office to leveraging marketing platforms like NFL and Major League Baseball.  NAB also is prodigious cash flow generator, she noted, supporting decisions like the one made today to increase dividend by 35%.  Thus, “after an exhaustive review, which included the assistance of bankers and consultants, the company’s management and board of directors have concluded that PepsiCo will maximize shareholder value by retaining NAB in its current structure within the PepsiCo portfolio,” co said.  PEP also said it would extend productivity initiative that’s been finding $1 bil in savings per year by another 5 years.

No Bottler Refranchising Envisioned    PEP studied numerous structures ranging from full separation of NAB to separation of some bottling operations “and everything in between,” but on this topic Nooyi was emphatic:  PEP “will not return to the conflicted franchisee/franchisor model of the past,” which creates operating redundancies and is overall handicap to effective mgmt of N Amer bevs.  Current integrated system works better to maintain alignment with natl accts and offers scale advantages it would be foolish to abandon, she argues.  Particularly at time of disruptive change, she noted, “it’s critically important that you own the system . . . you’ve got to reduce the friction so you can go with the flow.”  Nor is remaining 25% of N Amer market that’s still in indie bottlers’ hands an impediment to vision, she noted, citing work of NAB chief Al Carey in restoring good relations with indies.  So PEP is heading in sharply contrasting direction from KO with its ongoing refranchising.

Solid Q4 Performance despite Continued NAB Rev Erosion   Nooyi’s case for structural status quo overshadowed discussion of operating results for Q4 and full year 2013, which got little attention.  For 4th qtr, PEP revs edged up 1% to $20.12 bil.  Operating profit rose 8% to $2.4 bil.  Within PepsiCo Americas Beverages, revenues slipped 2% to $5.98 bil, compounded of 2% volume decline, negative timing issue involving concentrate shipments and net pricing gain of 3%.  Operating profit dropped 10% to $665 mil.

For full year, revs edged up 1% to $66.42 bil.  Operating profit rose 7% to $9.71 bil.  Within PAB, full-year revenues slipped 2% to $21.07 bil but operating profit eked out 1% gain to $2.96 bil.

In North America, noncarbs rose in low single digits vs CSDs that declined in mid single digits for qtr, but there was no discussion of performance of specific brands, aside from shoutouts to brands like Mountain Dew Kickstart, Starbucks Iced Coffee and Lipton Pure Leaf Tea as successful innovations.  Amid continued skepticism from some on Wall Street that PEP is holding its own in bevs in N Amer, PEP brass did post slide of IRI-based data showing they’d held share in NAB in all categories except CSDs and ambient juices.  As for foodservice side, PEP never has argued with 2d-tier status to Coke in that high-margin channel, and contracts tend to be long-running, but Nooyi noted that “Where we did bid, we did win them,” with integrated snacks/bev portfolio contributing to some wins.

New Sweeteners Coming, but Not Touted as Game-Changers    Over past year Nooyi has backed off from stoking enthusiasm over prospect of game-changing new natural sweetener that will reignite CSD segment, and on today’s call she only referred to promising stevia/sugar blends that will be tested on non-cola products in US this year to gauge consumer acceptance before being greenlighted for crown jewels, the colas.  Presumably, these would fall into mid-calorie range rather than attaining holy grail of naturally sweetened but zero-calorie sodas.  Overall, “colas are still relevant but going through a secular change,” she averred.

Was Coke Too Hasty to Tie into GMCR?   Nooyi made it clear PEP is not oblivious to at-home, single-serve revolution, but cautioned that it’s not going to make any commitments until it knows partner has valid technology.  That’s implicit rebuke to Coca-Cola, which is counting on its new partner, Green Mountain Coffee Roasters, to bring to fruition entirely different platform than the one it’s proved out on hot bevs.  Tho Pepsi is participating in numerous tests, it will wait to “commit with people where you know the technology is working . . . There are multiple, multiple, multiple technologies – we’ll make sure not to lock and load on any one technology before it’s proven out.”