Fomento Economico Mexicano (Femsa) said 3d-qtr revenue rose 7.2% to equivalent of US$4.95 bil, but operating income slipped 2.7% to $556.5 mil.  Questioned by analysts about prospect of 1 peso per liter tax on sugared drinks in Mexico, execs at Coca-Cola Femsa unit warned that it might prompt 12-15% price increase, at cost of 25% volume decline in most value-oriented packages, and would certainly lead to layoffs if enacted.  On fundamental front, co noted as bright spot in Mexico the strong performance of noncarb portfolio, led by Jugos del Valle juices, Fuze teas and Powerade sports drink, now leading isotonic 3 of co’s 5 operating regions in Mexico, with 46% share overall.  In Argentina, launch of co’s first stevia-sweetened extension of Coca-Cola, Coca-Cola Life, gave core trademark an 8% lift, with new Fuze Tea also turning in strong performance.  Meanwhile, on executive front, Coca-Cola Femsa’s ceo of 13 years, Carlos Salazar Lomelin, was named ceo of Femsa, succeeded at bottler by co’s 18-year vet John Santa Maria Otazua.  Changes are effective on Jan 1 . . . Coca-Cola Enterprises Q3 net income rose nearly 10% as sales volume improved and prices edged up, but that came in short of expectations and shares took a hit fell short of market expectations and its shares too a 4% hit on Thurs before recovering most of the loss in trading Fri and today. Wells Fargo’s Bonnie Herzog said Western European Coke bottler “delivered against a difficult backdrop. While partly aided by currency, bottom-line results still reflect relatively strong fundamentals.”  Her main concern, aside from tough macro environment: noncarbs slipped 5% in qtr. 

Balance Water line of unsweetened, unflavored waters fortified with wild-harvested Australian flower essences has finetuned portfolio, even as interest grows from c-stores in distributing brand and it’s adding DSD houses throughout Northeast.  At NACS c-store show, co unveiled new Cleanse sku, that harnesses diuretic effect of she-oak flower “to flush out all the things your body doesn’t want,” per promo copy.  New sku obviously capitalizes on interest in cleanses while eschewing off-putting aspects of conventional cleanses, noted cofounder Martin Chalk at brand’s 20-foot booth at Atlanta convention center.  Other ingredients in Cleanse are papaya, bottlebrush and bush iris.  Due on shelves in Nov, it replaces line’s weakest seller, Digest, which proved to be not most appetizing name, Martin allowed.  She-oak plant is key ingredient in non-retail item that has done well for co, Travel, which has garnered footprint at airports and hotels to ease dehyration, motion sickness and other effects of travel.  Meanwhile, other core retail items in line – Mind, Relax and Refresh – are being organized under “work, rest, play” mantra in co’s marketing from this point on. 

Though at time of launch several years back, unflavored, unsweetened, uncolored item like Balance might have seemed arcane, it has held its own at mainstream accounts like Duane Reade drug stores in core NYC market, where it moves thru Exclusive, and now is signing additional DSD houses in Northeast, including National in Maine, Great State in NH and Northeast in RI.  Interest in line at c-store show was strong, Martin reported, abetted in part by familiarity that c-store owners of Indian and Bangladeshi heritage often bring to core ingredients used in brand.  Chalk claimed commitments from at least 3 chains that he was unable to ID yet.

Maybe times have changed enough: Coca-Cola is ready to try again with essence-water extension of Dasani bottled water brand.  Dasani Sparkling Water Beverage is pitched as being unsweetened, carrying no calories, lightly carbonated and infused with natural flavors, just as indie essence-water brands like Hint Fizz are.  Dasani subline is being launched in Lime, Lemon, Berry and Apple flavors, as well as unflavored entry.  Entry comes at time that Dasani has been among flock of bottled water brands to join Partnership for a Healthier America’s Drink Up initiative to get people to drink more water.  Recall that back in 08 it offered noncarb Dasani Essence Water in flavors like Strawberry Kiwi and Lime.  New subline is due to appear on first retail shelves in Dec, with full rollout in Feb.  It’s being offered in 12-packs of 12-oz. bottles, a 24-unit variety pack for club stores and in Dasani’s plant-based PlantBottle PET bottle in 20-oz and 1-liter sizes. 

It was only matter of time before latest miracle of bev technology, high-pressure processing, found itself in crosshairs of plaintiffs bar.  Hain Celestial Group has been hit with class action suit alleging that its recently acquired BluePrint juice unit is falsely claiming that its products are made with raw and unpasteurized juices when the high-pressure processing technique it uses kills enzymes and probiotics just as traditional pasteurization does.  One NY resident and 3 Calif residents – brand’s strongest markets – filed suit Oct 15 in US District Court for the Southern District of New York claiming they were misled into purchasing BluePrint juices and cleanses because packaging stated items were “Unpasteurized,” “100% Raw” and “Raw and Organic,” per item on Top Class Actions Web site.  Suit argues that items in fact are “equivalent to pasteurized juices” and therefore not worth the $6.99-11.99 the plaintiffs paid per bottle this year.  Suit acknowledges that HPP is “not the same as traditional pasteurization” but claims effects are same in that process destroys probiotics and enzymes, violating “the fundamental principles underlying the raw food movement, consumers' expectations and industry standards.”  Plaintiffs are repped by Bursor & Fisher PA and Sheehan & Associates PC.

It seemed like logical fit when alliance was fomented: take mainstay Mexican soft drink, Jarritos, and get it to burgeoning Latino population and growing ranks of gringo fans via Dr Pepper Snapple Group’s powerful Southern Calif operation.  But it apparently didn’t pan out as hoped, and word is that Jarritos marketer Novamex now has moved to plan B: assembling network of Budweiser distributors to work Golden State.  “We knew we were strong among Hispanics,” Novamex marketing dir David Flynn told NY Times for Jul piece describing crossover of ethnic brands to mainstream.  “But we were surprised to find that among non-Hispanics, people really loved certain things about the brand — the fruit flavors, the glass bottle, the natural sugar.”  Tho call to Flynn last week hasn’t been returned yet, word on street is that Novamex is well along assembling Bud network to try to do better in broadening brand’s reach . . . Cap-dispensed Activate brand has landed coupla key retailers in New England region that’s been core target for ceo Reza Mirza: 148-unit Shaw’s chain, where it just went on shelf, and 400-unit Stop & Shop chain, which it hits next month.  Retail footprint is serviced by network of indie DSD houses including Great State in NH and its Blue Coast unit in Boston, Crescent in NJ and Preferred in NY . . . Smashburger better-burger joints has become first eatery chain to pick up Honest Tea’s fresh-brewed tea offering for all its locations, 230 in all, in Classic Green Tea, Just Iced Tea, Lemon Herbal Tea and Naturally Flavored Raspberry Tea flavors.  Smashburger founder Tom Ryan explained move by noting, “The trend toward non-carbonated beverages in particular is continuing to grow, and has been the strongest area of growth in our beverage business recently.”  Note that Smashburger already has initiated craft beer and craft soda programs.  For Honest Tea, capitalizing on parent Coca-Cola’s foodservice clout is seen as key way to accelerate growth. 

CytoSport Inc, owners of Muscle Milk, have commissioned Credit Suisse Group AG to find buyer for its sports nutrition biz, per Wall Street Journal.  Owners “are hoping” to get up to $500 mil, which “would be a hefty multiple” to CytoSport’s ebitda of about $30 mil, noted WSJ.  Recall that co and core investor TSG Consumer Partners had retained Goldman Sachs to shop co in 2010, tho no buyer was found then, reportedly on grounds of price, potential issue with use of “milk” in name and fact that brand currently is aligned with Pepsi distribution system (BBI, Mar 30 and Sep 28, 2010).  At time founders the Pickett family were believed to be seeking $1 bil for co, with tire-kickers including likes of pharma giant Glaxo-SmithKline and food/bev power Nestle.  CytoSport just elevated former Pepsi exec Rob King to succeed cofounder Mike Pickett as ceo (BBI, Jul 23).

San Francisco city supervisor plans on proposing 2-cent-per-ounce tax on sugared bevs to “fund health, nutrition and activity programs for city youth,” reported SF Chronicle.  Supervisor Scott Weiner is undeterred by recent tax proposal defeats in Bay Area and Los Angeles County.  “I wouldn’t pursue this if I didn’t think it had a chance,” he told paper.  “There will be a big fight – the beverage industry will try to pull all the shenanigans they have pulled elsewhere.”  While tax proposal in Richmond, Calif, was easily defeated by 67% of voters, Weiner claims that proposal “was too easy to attack” because money was not required to be spent on health programs.  He cited as reason to push for SF tax a 2013 Field Poll of Calif residents that found 68% in favor of soda taxes when funds are used for nutrition and fitness programs, tho that sentiment hasn’t translated in neighboring cities so far. 

Cold-brewed coffee, chia drinks and mint sodas at the local supermarket?  Kroger seems off to brisk start with its groundbreaking Taste of Tomorrow “emerging beverage” experiment, which launched over past month at its King Sooper banner in Colo, with its Fred Meyer and Ralph’s chains anticipated to be next, on time frame that Kroger hasn’t yet disclosed.  At King Sooper, retailer ended up going with relatively narrow array of brands, just 8, in initial foray into creating destination for natural, good-for-you bev brands, working with incubator LA Libations as category captain.  In the initial set are Aloe Gloe aloe-based brand, Minta mint-based sodas (in both regular and diet versions), Just Chill relaxation drinks, Chia/Vie chia drinks, Chameleon cold-brewed coffee, Jin-Ja ginger drinks, KonaRed coffee fruit drinks and Motto sparkling matcha green tea.  (Aloe Glow is product of LA Libations, which holds investment in Chia/Vie and has counted Just Chill as client, tho others in set have no financial tie to co.)  Section is being aggressively supported with in-store demos, with results that have been very encouraging after first month, said Kirk Hardwick, Cincinnati-based LA Libations exec and former Walmart exec who’s been deeply involved in project.  “They are all in,” he said of commitment by retail partner.

Recall that LA Libations was named category captain of initiative early this year (BBI, Mar 11) as Kroger stepped up its broad effort to convince shoppers that Whole Foods isn’t only destination for all-natural, good-for-you items.  As part of program in bevs, Kroger recruited Mathis Martines from The Fresh Market chain, reporting to natural foods chief Mary Ellen Adcock, who’s masterminding health & wellness push (BBI, Jun 7).  Taste of Tomorrow is intended to take some of onus off new brands in generating shelf turns usually required of items to stay in planogram.  The assortments are displayed in both dry aisle and coolers.  Kroger doesn’t demand slotting payments for entry, but brand has to pass muster with LA Libations team on grounds not just of product integrity but also factors such as caliber of mgmt team, how competitive space is and whether co has right financing in place to carry it to next stage, Kirk noted.  That’s important because, unlike 300-store Whole Foods chain, rollout within 2,500-store Kroger chain can take things to big scale very quickly.

Brands include several refrigerated items and they can go to King Sooper stores direct and via DSD, whichever makes sense, Hardwick indicated.  King Sooper, as well as Fred Meyer and Ralph’s, are among Kroger banners that integrate their natural items with store’s conventional oferings, tho other banners segregate them in Nature’s Market section, posing different setting in which to place Taste of Tomorrow set.  Launch kicked off with expo hosted by Kroger at Denver Convention Center to showcase its array of health-and-wellness items, drawing 20K visitors.  Apparently, founders of all the included bevs made the trip to show.

With sales booming and flow of new entrants accelerating, kombucha biz has seemed ready for its own trade group.  So kombucha proselytizers Hannah Crum and Alex LaGory, who operate KombuchaKamp.com Web site, have launched Kombucha Brewers International (KombuchaBrewers.org), that will seek to create industry standards, devise class marketing campaigns targeting consumers, retailers and restaurants, conduct research and act as advocate for biz.  It’s already enlisted as founding members likes of High Country, KBBK Kombucha Brooklyn, Bucha, Buddha’s Brew, Urban Farm Fermentory and Health-Ade, with US, Canada and Australia represented.  (So far, industry giant GT’s isn’t aboard.)  More are expected aboard, Hannah said, by time of first annual Kombucha Konvention, slated for Santa Monica, Calif, from Jan 17-18. 

Jay Garnett, who stepped in to run Steaz as executive chmn to protect his investment when sledding got rough a coupla years ago, has stepped aside and been succeeded in key operating role by co’s cfo, Linda Barron.  Succeeding him in chmn role is Ralf Lottermann, longtime CPG vet who’d taken board seat about 6 months ago via connection to biggest shareholder, Inventages.  “We are excited to expand our corporate family at Steaz by appointing two people who are uniquely aligned with a company culture steeped in triple bottom-line business practices and focused on the core values of people, planet and profits,” cofounder Steve Kessler said in statement.  “Ralf and Linda step into their new roles with the company at an important time in our growth in the North American market.”  Reached this morning while traveling in Calif, Steve had time only to say co valued Garnett’s contribution and he remains significant shareholder.  It’s not clear whether he’s retained seat on board, whose other members include Kessler himself and Jones Soda founder Peter Van Stolk.  Garnett, based in Vancouver, BC, far from Steaz’ eastern Penn hq, is operator of Whitefish Group and has numerous local biz interests, too.  Tho he effectively served as ceo of co, it’s believed he opted for exec chmn title because of status as Canadian citizen.

Lottermann, who’s retired now and based in McLean, Va, served nearly 3 decades at Mars Inc, where he was involved in range of categories on brands like Twix, Mars, Skittles, Wrigley’s, Uncle Ben’s, Whiskas and Pedigree.  His last posting was in Singapore as prexy for Asia Pacific region.  Just below his name on LinkedIn profile is avowal:  “Absolutely Retired!”  He joined Steaz board about 6 months ago, it’s believed.  Barron joined Steaz in 08 as finance dir and was promoted to cfo, helping maneuver co thru challenging retrenchment from overexpansion undertaken after Inventages investment came in.  She earlier served as dir of corporate accounting at packaging co Constar Int’l, and also counts posts at homebuilder Toll Brothers on resume.

Alison Lewis Leaves Coke with Another Big Marketing Slot to Fill    Coca-Cola North America Group said Alison Lewis, its svp strategic marketing, is leaving for another “global organization” at end of month, reported Advertising Age.  That’s “second high-profile departure” from CCNA’s marketing group following Aug exit of Pio Schunker, svp integrated mkting communications, Age noted.  In memo to employees, prexy Katie Bayne said Alison’s replacement would be named soon.  This ends 18-yr run at KO for Alison, who’d also served as svp/gm at Odwalla.

Keough’s Big Gift    Donald Keough, former prexy/coo of Coca-Cola from 1981-1993, along with his wife, Marilyn, have donated a whopping $30 mil to University of Notre Dame.  Money will be used for the “Keough-Naughton Institute for Irish Studies and Liu Institute for Asia and Asian Studies, reported Atlanta Journal-Constitution.  Don serves on the board at Notre Dame, and their children have graduated from the University.