In recent years FRS has served as cautionary tale of how difficult it can be - even dispensing estimated $100 mil in capital - for innovative bev brand to attain ignition. Following departure of past ceo after push into Pepsi network and other initiatives didn't pan out, brain trust of Bay Area co has been hunkered down for a year now trying to solve conundrum of how to position and market brand that boasts miracle ingredient, quercetin, that's backed by thousands of clinical studies attesting to benefits of antioxidant-rich substance. After extensive rounds of consumer testing, ceo Dave Henderson and svp sales Rich Libonate have emerged with plan, presented to BBI yesterday. Package moves to more clinical-looking white background and dials up quercetin cues. "Healthy energy" positioning evolves to "Energy + Endurance." New look ships at start of 2014. Overall strategy tilts from heavy reliance on RTD bevs to better balance with range of other formats: bottled concentrate, chews, powders. It adds 5th, crowd-pleasing flavor with Strawberry Kiwi. Pursuing "win out West" strategy, co will retain DSD network in that region, while sticking to broadliners in rest of country. Tho c-stores are Libonate's stock in trade after years working channel at Cadbury and Adams (and service as NACS officer), brand will stay out of that channel for foreseeable future in favor of conventional and specialty grocers. And with co increasingly merging functions with sibling co Nutravail, a producer of dietary supplements, Dave and Rich both plan to ease out of co sometime in Q1 or Q2 of 2014, once things seem to be fully on track. That would leave Nutravail ceo Rick O'Neil running both entities. It all makes for carefully constructed, yet still audacious, strategy going forward, for brand that's aroused continual fascination for sheer scale of its spending and ambition. Here are details.

Research: To Label-Readers, Looks Like a Soft Drink Extensive consumer research, particularly during Q1, suggested that core consumers are 35+ and self-professed health nuts and label readers more so than passionate athletes pursued by brand's prior endorsement strategy. For those consumers, colorful flavor-coded cans too much resembled sweet-tasting conventional energy drinks, soft drinks or juices, at cost of underplaying brand's science basis, endurance function and natural formulation, all key differentiators. In fact, brand seemed to resonate strongly with natural-foods consumers in research, with many saying it's one of few they've encountered that works. Also, perhaps because controversy over conventional energy drinks has consumers questioning those ingredients, FRS consumers seemed to appreciate that brand provides not just a boost, but a more enduring one. Existing package, with its rich color palate, connoted soft drinks and refreshment - "but you don't mow the lawn and have an FRS when you come in," Libonate observed. Recall that at time of mgmt transition, key investors such as founder Tom Lines had observed that, in push to go mainstream, emphasis on quercetin and other unique qualities had been lost and needed to be restored (BBI, Jan 16). That's happening now.

New Look: More Clinical, but Still Approachable Some radical departures in new package. It adopts white background, with stylized, sleek "FRS" running vertically up front panel, and hexagonal-shaped Q resembling a molecule at bottom to flag quercetin content. (Band has also adopted Q with a "+" inside as a quercetin-signifying icon.) As noted, "Healthy Energy" has been replaced by "Energy + Endurance." Callouts that brand is gluten-free and non-GMO are intended to do double duty in reassuring consumers that it's natural, healthful product, even tho "healthy energy" slogan is gone. Back of can takes radical step of adopting horizontal layout to offer detailed description of ways in which FRS is "fuel by nature, endorsed by science." FRS chews similarly get white-background package, but with bright color stripe running down right coded to flavor (green for Lemon Lime, orange for Pineapple Mango, etc). PET bottles that were key focus of prior ceo Carl Sweat stay in mix only as delivery vehicle for protein-rich subline; Healthy Defense (immunity) and Healthy Slim (weight loss) are gone as not central to brand's core propositions.

Kiwi Strawberry Adds Familiar Touch New flave, Strawberry Kiwi, joins Orange on full-calorie side. Line also boasts 3 low-cal entries: Citrus, Pomegranate, Peach Mango and Wild Berry. Choice of venerable Snapple-style flavor aims to balance learning burden of brand's differentiating elements with familiar flavor needing no explanation, former Snapple exec Libonate explained. (Raspberry Lemonade came in 2d among flavors considered.)

Trade Strategy: Cans Are Workhorse, DSD Out West The cans, not bottles, are back to being prime retail vehicle, tho co will try harder to get other formats placed at retail, sometimes in sports nutrition or health/beauty care aisles. Harris Teeter and Kroger are among retailers that have enjoyed success carrying multiple FRS formats, Teeter with multiple placements within store. For a while FRS cans were ubiquitous at 10 for $10 price but those days are gone, vowed Libonate - "that's not who we are." Rather, cans now command $1.99-2.19 in grocery, promoted at 4 for $5 in traditional grocers and 2 for $3 in specialty grocers. In reassuring sign, co has been selling as much, if not more, at new promo price vs 10-for-$10s of past, Rich said. Revamped pricing has received no pushback from retailers, he added. But c-stores are out of mix for foreseeable future. And online - where FRS once ranked among biggest spenders in any category, exceeding Coke and Pepsi combined - remains core channel, accounting for more than one-third of total sales and numbering thousands of regimen customers who buy in bulk every month or 2.

As for distribution, DSD orientation stays in place out west via likes of Lenore in San Diego, Haralambos (LA), Morris (Bay Area), General (Portland) and New Age (Colo). Elsewhere, UNFI services grocery chains, and specialist Europa works fitness channel. Broker network serving non-West markets eases staff burden at hq.

E-Commerce Site Gets Boost; Marquee Athletes Out of Mix E-commerce site, tho rich in anecdotes and other content, will get makeover to tell differentiating story of brand more prominently, and offering useful info to store mgrs, nutritionists and other trade parties who visit site. Recruitment of marquee athletes as investor/endorsers is out. "It's expensive and a 2-edged sword," said Henderson, presumably referring to endorser slate that once included now-disgraced cyclist Lance Armstrong and in-limbo quarterback Tim Tebow. Such personalities don't impress the label-readers so much anyway, Libonate added.

Henderson, Libonate Plan to Move on by Mid-Year 2014 Tho Nutravail, in Va, and FRS, near SF, remain separate legal entities, they're sharing increasing amount of resources, so some trimming of staff is continuing at FRS following earlier cutback (BBI, Sep 12). With no need for 2 ceo's, Henderson likely will move on in Q1 or Q2 in favor of Nutravail ceo Rick O'Neil. Jean Ercolani, recently promoted to top marketing job and instrumental in revamp, will run sales & marketing org. Far from retiring from biz he still loves, Libonate said he'll find another gig.

Sticking with Brand Name, at Least for Now Does FRS even work as brand name? There's school of thought that it doesn't: its antecedent, Free Radical Scavenger is confusing and tough to remember and initials FRS alone have also proved tough to remember, judging by what seems to be low unaided recall despite massive marketing spend over the years. Maybe pivot to more memorable antecedent? "It's not solved yet," said Henderson. "It's still a discussion at the board level," but a more iconic brand name hasn't yet been identified. "First we needed to get the package to a place where it resonated with the value proposition and popped off the shelf." That's now done, and with sales heading in right direction this past year, they're hoping co has turned corner.  

Maybe everyone was too busy watching Sebastian Vettel bring in another Formula 1 trophy for Red Bull this past weekend in Austin. That's when 100 pallets of Red Bull valued at about $500K was filched from new warehouse in Medley, Fla, reported Miami Herald. Heist took place sometime between Sat afternoon and Mon morning. Police said robbers apparently had a key. There were no cameras either in what's described as "modern warehouse." When workers arrived on Mon, "they found that the alarms had been disconnected." Police are investigating. Red Bull self-distributes in Fla.  

International Bottled Water Assn named Breck Speed, ceo of Mountain Valley Spring Co, as its incoming chmn for 2013-14. Breck, who succeeds Absopure Water's Bill Young, is member of IBWA's exec committee and board of directors and served as vice chmn in 2012 and treasurer in 2011. Elections conducted during annual biz conference in Nashville, Tenn, last week also gave Nestle Waters North America's David Muscato nod as vice chmn. Water Guys' Bryan Shinn is new treasurer.  

Australian/Turkish Found infused sparkling water, which drew some buzz at last summer's Fancy Food Show in NY (BBI, Jul 30), is undertaking its US launch via a rollout to all 147 locations of The Fresh Market. All-natural line is sweetened with beet sugar, packed in a proprietary tapered glass bottle and is in mid-calorie range at 45-60 calories per bottle depending on flavor. Cascadia Managing Brands has been helping build distribution . . . Water Sensations natural liquid water infusions has cracked several influencer retailers, including Central Market stores in Tex and Fairway in NY metro. Stevia-sweetened line in Citrus Energy, Cranberry Pomegranate Fitness and Blueberry Acai Immunity sku's has also been picked up nationally by Kehe distribution operation. Cascadia is assisting this brand, too.  

Chalk up yet another new bev brand to a mom who didn't like the offerings she found at retail for her particular needs. This time, it's expectant mom in NJ who was seeking natural energy lift via protein rather than caffeine, and without a lot of sugar - less than 11 g, per nutritional guidelines. Thus was Boost It Up! brand born, via company called Healthy Mama that's readied flock of other items in non-bev formats, along with gift pack, to offer "remedies for pregnancy, nursing and beyond," per its slogan. Co boasts former Campbell Soup ceo Dale Morrison among its investors and board members.

Boost It Up is offered in white, full-wrap PET bottle and offers 7 g of whey protein, B-vitamins, ginger (to fight nausea), electrolytes and 3 g of fiber, but only 11 g of sugar, for 80 calories per 12-oz bottle. "Provides energy, reduces nausea and hydrates," declares front-label copy. SRP is $3.49, in line with most protein drinks on market. Overall company brand, Healthy Mama, at top of label is posited as "remedies for pregnancy, nursing and beyond." Other over-the-counter remedies offered by co (at healthymamabrand.com) carry names like Eazzze the Pain, Shake That Ache and Make Mama Happy.

Idea was hatched by founder Rachel Katz-Galatt when she was pregnant with 2d child, now 17 mos old. Co was launched in Aug 2012, products were first offered for sale via co's Web site last month and it's now moved into Buybuy Baby chain and shortly ships to entire Babies R Us chain and some Toys R Us units, too. Whole Foods is next key target, Rachel told BBI. She was assisted in development by Power Brands, incubation co run by Darin Ezra, who's had hand in creating other female-targeted brands such as Go Girl canned energy line.

Katz-Galatt brings experience not in bevs but in marketing/branding on prestige brands such as Calvin Klein cosmetics, Abercrombie & Fitch and Victoria's Secret, as well as a mass brand, #1 maker of baby wipes. She and husband self-funded earliest stage, then brought in friends and family, and more recently drew interest from unidentified figure from venture capital world, who's invested personal funds while also connecting entrepreneur with prospective board members, Rachel said. Key objective now, she said, is to land strategic partners who can help co navigate mass and pharmacy retailers which have no clear-cut section for products like hers.  

Sparkling cranberry juice, anyone? Ocean Spray is entering soda realm via SodaStream home systems, backed by comprehensive media blitz including execution of its familiar TV campaign featuring rookie and veteran cranberry growers. New entry debuts in Cranberry, Cranberry Raspberry and Cranberry Grape flavors in small bottles that yield 12 liters and are priced at $6.99. "Ocean Spray Cranberry Juice Drinks have been a natural mixer with sparkling water for years, and now consumers can enjoy the perfect combination just the way they like it," said SodaStream ceo Daniel Birnbaum . . . Cheribundi is proceeding with anticipated foray into grocers' freezer cases (BBI, Jul 9), launching Organic Tart Cherry Smoothie Packs in Organic Tart Cherry and Organic Tart Cherry Mango flavors. The smoothie packs are launching exclusively within Whole Foods, which will merchandise them near other smoothie-making ingredients such as frozen fruit, co said.  

Washington State kombucha maker is turning to Kickstarter to raise money to start up "larger-scale canning operation" that will allow it to expand its reach, reported Bellingham Business Journal. Kombucha Town, which opened in early 2013, currently sells its teas in 16- or 32-oz glass bottles to be returned, washed and resold. "While the bottles have been popular with customers, particularly those who embrace the brewery's sustainable ethic," cans just make more sense as co looks to expand to wholesale mkt, noted owner Chris McCoy. Funding campaign began just yesterday with goal of $20K, with $15K towards canning line and $5K for cans and labeling. Any additional funds raised over that will go towards a new bottling line and kegs . . . Crowdfunding is not a goldmine for everyone: Buddha Reiki Life Force Energy Water, which ran 5-week funding program on Indiegogo offering perks from good karma ($5) to white magical mala (bracelet) produced by founder and reiki master Paige Lee Baron ($130), fell considerably short of $40K goal, pulling in $8,800 by time window closed earlier this month. Money, which co will accept, is intended to fund retail push.  

San Francisco city supervisors seem sure of one thing: they want to tax sugared bevs 2 cents per ounce. They're just not sure how they want to spend the proceeds. A second 2-cent tax proposal has been put forth by Supervisor Eric Mar after his colleague Scott Wiener originally proposed a tax 3 wks ago, reported SFCityInsider. Wiener's proposal calls for spending estimated $30 mil a yr from tax evenly among school districts, Parks & Rec and Dept of Public Health. By contrast, Mar's proposal steers the dough mainly to "the people most affected by consuming sugary beverages, namely people of color with low incomes," noted report. He's proposing half go to schools and half be disbursed "to various city agencies and community groups." The city council plans on working thru differences to have one proposal ready for voters next Nov.  

Campbell Soup shares sagged 7% in early trading today as co turned in disappointing first qtr, with soups, snacks and bevs all displaying weakness and co suggesting that recent proliferation of fresh juices - presumably including new HPP entries - is starting to bite shelf-stable side of juice biz. Net sales declined 2% to $2.17 bil, and organic sales slipped 4%, with all segments down except overseas snack biz. Operating income slid 21% to $209 mil. "We're disappointed with our first quarter results . . . but not discouraged, because we understand what happened, know what we have to do and are determined to improve our performance over the next 3 quarters," ceo Denise Morrison assured investors on call this morning. That said, tho turnaround plan is being implemented, "we don't expect it to be a growth driver this year," ceo cautioned.

Lotsa sources of weakness: retailers destocked their inventories, particularly on domestic soup side, and core biz suffered from soft demand, even as CPB was frontloading its marketing spending to support a bevy of new products, including 14% increase on Bolthouse Farms to boost awareness. Voluntary recall of pouched products of recently acquired Plum Organics due to mfg glitch didn't help matters either.

Looking at 2 key bev categories, US Beverages sales declined 8% to $173 mil, with the weakness most pronounced in V8 V-Fusion fruit/veggie blends, V8 vegetable juice and V8 Splash juice drinks, said cfo Craig Owens. Tho Splash decline interrupted 7 years of growth, it was result of co's backing off merchandising levels, which have since been restored, Morrison said. "Trends improved slightly on 100% red juice, but I'm admitting it's still under pressure," she said later in call. In US, V8 brand "continues to be under pressure from category weakness and competition from specialty beverages and packaged fresh juices," said Denise. But innovations such as V8 V-Fusion Refreshers and V-Fusion + Energy were bright spots. Unit's operating income slid 20% to $24 mil. Perhaps surprisingly, co brass still hasn't publicly alluded to switch of V8 distribution from Coca-Cola to independent DSD houses, move that might offer a lift to brand in penetrating impulse channels in major metros. As reported, that cutover seems to be going ahead of schedule, in some markets via distributors who carry both V8 and Bolthouse Farms brands (BBI, Nov 15).

Meanwhile, Bolthouse & Foodservice sales rose 2% to $330 mil (tho subtracting extra week of Bolthouse sales leaves segment down 2% instead). Gains in juices and salad dressings were offset by declines in bulk sales of juice concentrate. Operating income slid 15% to $29 mil, partly because of higher marketing spend. But Bolthouse juices themselves scored high-single-digit sales gains "and we're still ahead in share," said Morrison.  

Taking its energy orientation into 2 fast-growing segments - flavored seltzers and Sparkling Ice - Rockstar has debuted canned line of Rockstar Sparkling Energy in Peach and Cherry Citrus flavors. Zero-calorie line sweetened with ace-K and sucralose blend offers light, seltzer-like mouthfeel and contains 160 mg of natural caffeine per 16-oz can. Caffeine is sourced from green coffee beans, taurine and other sources. "Light, refreshing and fully loaded!" touts can copy. Tho other brands have offered light-tasting, refreshing sparkling energy drinks - notably the organic Hiball, also in 16-oz cans - Rockstar may be first to take it in mainstream direction, at time that combo of zero calories, water-like consistency and approachable price seem to be striking big chord among consumers at retail.