We’d advised that this might be coming: with Coca-Cola and Campbell Soup both unhappy with how their distribution alliance behind V8 bev brand has panned out, partners won’t renew contract upon expiration at year-end.  How will Campbell Soup replace Coke network?  In what should come as welcome news to indie DSD houses, Camden, NJ-based soup giant is planning to rebuild DSD network that it unwound in 2007 in favor of Coke alliance.

CPB is starting in biggest metro: last night it signed exclusive contract to put V8 brands back at Big Geyser, biggest indie NA shop in NY and one which managed brand before transition to KO.  Deal includes V8, V8 Splash, V8 Fusion and Campbell’s Tomato Juice brands, effective Jan 1.  But that’s just tip of iceberg: word is that CPB is approaching broad range of DSD houses, in effect reassembling network predating Coke alliance.  For houses that have been picking up snack brands and lower-margin products to maintain volume until next big premium winner emerges, V8 could be steady-selling addition that needs no introduction to consumers.

Deal is fascinating on several fronts.  On Coca-Cola side, it represents another unraveled alliance, following dissolution of longstanding partnership with Nestle behind Nestea tea brand, scrapped a year ago as iced tea remained rare segment in which Coke hasn’t made headway vs Pepsi.  KO has sought to fill tea void with Gold Peak, Fuze and Honest Tea brands.  Tho V8 comprises familiar set of mainstream juice brands that would seem comfortable fit with bottling system, it proved difficult to obtain focus and, as reported late last year, KO also was alienated from partner when Campbell acquired juice maker Bolthouse Farms, a rival to Coke’s struggling Odwalla juice unit (BBI, Dec 11). 

Campbell Soup has its own issues lodged in lack of focus on durable brands whose efforts at innovation, notably V-Fusion fruit/veggie blends, have been imitated by rivals but have failed to generate kind of growth that might turn around bev unit that’s ongoing laggard at CPB, as co brass acknowledged on recent investor day (BBI, Jul 26).  Tho Big Geyser wouldn’t comment, word is that V8 sales in NY have plummeted by more than half since Coke took over distribution of brands, from range of 800K cases to below 400K cases.

For Big Geyser, deal represents another coup in year that’s seen Maspeth, NY-based house pick up torrid Sparkling Ice brand and potent Monster Energy brand.  It’s also reflection of complicated relationship distributor seems to have with Coke these days: it’s retained Coke-owned Vitaminwater, Smartwater and Honest Tea brands that in other markets have segued to Coke system, and has been key partner in building Illy Caffe RTD coffee brand.  But its Monster win came at hands of Coca-Cola Refreshments in Brooklyn (in rest of NY metro, brand was snagged from Bud houses), and as Sparkling Ice distributor, it wouldn’t take on Fruitwater, reprised by Coke as Ice fighter, leaving Fruitwater to go to CCR. 

Big Geyser wouldn’t comment but offered memo sent last night to sales force, over signature of coo Jerry Reda, that noted distributor had been growing V8 brands at 20%+ before switch to Coke, and now has goal to “re-establish the brand and its up-down-the-street business . . . Campbell’s has put forth a solid business plan and they have allocated the resources necessary to take this brand to the next level.  Please join me in welcoming Campbell’s back home where it belongs.”  It’s believed Geyser will take a pass on V8 energy subline out of deference to its new energy partner Monster.  

Deal was signed late Tues afternoon at offices of Nick Giannuzzi’s Giannuzzi Group, NY legal shop that’s carved out rep as go-to place for bev brands, including likes of Vitaminwater, Vita Coco, Real Beanz and Mamma Chia.  It’s believed Big Geyser is only distributor represented by Giannuzzi.

Natural Products Expo East opens Thurs in Baltimore, heralding onset of heavy slate of fall expos in coming weeks.  NPEE, located at Baltimore Convention Center from Thurs thru Sat, features nominally “good for you” natural foods/bevs and is followed directly by big biennial bash in Las Vegas of National Beer Wholesalers Assn, with exhibition floor featuring some NA bevs alongside legions of craft beers and malternatives.  Then, not 2 weeks later, massive NACS c-store extravaganza opens in Atlanta.   Info at ExpoEast.com, NBWA.org/Convention and NACSOnline.com/NACSshow, respectively; BBI will be on the wagon for NBWA show but plans full coverage of Expo East and NACS.  

Body Armor has added to its athlete roster with signing of Indianapolis Colts’ QB Andrew Luck as investor and endorser.  He joins group that includes LA Dodgers’ Mike Trout, SF Giants’ Buster Posey and NY Giants’ Jason Pierre-Paul . . . Xyience Xenergy has signed 16-month endorsement contract with UFC top-10-ranked middleweight fighter Mark “The Filipino Wrecking Machine” Munoz for both its RTD energy line and its sports nutrition supplements.  He’d had prior run with Xyience Apr 2011 to Dec 2012. 

Tobacco farms that have sat dormant for years in Georgia “are coming back to life,” thanks to stevia leaf processing, reported Bloomberg.  Stevia “may one day command about a third of the $58 billion global dietary sweetener market” and is being used “in more than two dozen products globally” by Coca-Cola, and in several PepsiCo products as well.  With US tobacco acreage cut in half over past 20 yrs, tobacco farmers could rebound with stevia, “since the two leafs are handled similarly” and grown “in similar climates and soils.”  “I can remember 25 years ago when there were 300 tobacco farmers here . . . today there is one,” said Alma, Ga, farmer Julian Rigby, who’s rebooting his farm with stevia plants.  Farmers in other warm states such as Calif and NC are also experimenting with stevia, noted report.

Reed’s Inc founder Chris Reed, who’s been outspoken skeptic of genetically modified food ingredients, will start heralding co’s reliance on only non-GMO ingredients on bevs’ packaging.  LA-based co said it will start progressively denoting that status on Reed’s Ginger Brew, Virgil’s Root Beer and Reed’s Culture Club Kombucha lines over course of coming year.  “Since I started my company nearly 30 years ago, I have been committed to brewing our drinks using only the finest ingredients in their most basic form, like fresh ginger root,” said Chris, the ceo.  “As a chemical engineer and a foodie, I have always been leery of engineers meddling with food.  We have avoided GMOs in our products because we feel they have not been adequately researched.  Our customers have been very vocal about GMO ingredients in their food.  GMO-free food products are a very fast-growing trend in this country, and I can see the natural food industry moving to go completely GMO-free in stores in the near future.”  Asked whether co will employ certifying org like GMO Project, Chris said probably, eventually.  For now, co will simply herald internal audit that showed its items are GMO-free.

Something Natural has leveraged recent move into New England soft drink giant Polar Beverages to add variety of indie houses to presence in region, but decided to withdraw from NYC for now until it’s better able to support brand there.  Something Natural founder Randy Shefshick, former Rockstar sales exec, said segue to Polar has panned out well so far for lightly sweetened brand in elegant cobalt-blue bottle that tilts toward females and performs well in chains.  Coming aboard for brand this fall have been key retailers Stop N Shop, Hannaford Bros and Big Y.  At same time, improved presence has opened doors to other houses, including Baker, a primarily Labatt beer house in Vt, and diversified Wright-Wisner in Rochester, NY, area.  Also aboard are trio of Snapple houses in Maine.   Recall that brand launched in core Boston area via influential NIDA member Great State/Blue Coast.  Still, Polar move is far from repudiation of NIDA: after all, Wright-Wisner and Maine houses all are members. 

Meanwhile, with New England revving up, brand will undertake tactical retreat from NYC market, which it was working via indie house Preferred.  Tho Preferred did its best to get brand out there, challenge was too stiff for limited resources it could offer to support move, Shefshick said.  For now, Something Natural is focusing on building New England base, hiring its first employees and upgrading Web site (at DrinkSomethingNatural.com), with return to NY occurring further down line, he said.  Note that Polar has added several brands recently, including Bai, which had likewise been in NIDA houses, and Bruce Cost Ginger Ale (story above).

PepsiCo has named Sanjeev Chadha as ceo of its Asia, Middle East and Africa (AMEA) div, reporting to chmn/ceo Indra Nooyi.  Chadha, a 23-year PEP vet, slides in to Dubai-based position from role as prexy of PepsiCo Middle East & Africa, succeeding Saad Abdul-Latif, who passed away suddenly last month . . . John Harris is retiring from Nestle SA after 39-year run that concluded with oversight of co’s massive bottled water biz.  Succeeding him will be Marco Settembri, a 26-year vet who’s been running Nestle’s European petcare biz since 07.  Transition occurs Dec 1, per Bloomberg.

Bruce Cost Ginger Ale, launched by Asian cooking authority and restaurateur of that name, took big step toward solidifying availability in New England by signing on with big Polar Beverages.  Move comes as brand readies for debut its first lower-calorie entry, monk-fruit-based Bruce Cost 66, that it will pour at upcoming Natural Products Expo East this week in Baltimore.

Extension, named for 66 calories it contains via combo of monk fruit and cane sugar, is packed in same clear longneck glass bottle as core line but sports big blue “66” on main label and “66 cal.” on neck label.  Cost said he realized it would be fruitless to try to render distinctive taste of core line with new entry, so he’s given it distinct identity and taste profile, mustering same amount of fresh ginger (a lot!) as in core line but offering drier, tangier taste.  The cane sugar, he said, was necessary because it helps capture fresh-ginger flavor while acting as preservative.  The 66 calories comes to about 40% less than the core line’s calorie count.

After taking highly deliberate tack to expansion, Polar assignment represents big step up, one fostered by advisor Tom First, whose first brand, Nantucket Nectars, earned him great deal of goodwill up at Polar and whose second launch, O Water, drew investment and ultimately buyout from Polar, which showed great patience with line that might have been too far ahead of its time.  Bruce acknowledged that move seemed like long shot, considering that Polar’s core brands are soda and seltzer lines, but said Polar owner Ralph Crowley personally intervened to allow brand in.  Brand is also broadening its presence in UNFI and has added Dora’s Naturals to NY distribution mix.  Co also continues to ride gradual expansion of Shop House Asian-food concept being tested by Chipotle Grill from initial Washington DC site, where ginger ale blows out, to new outposts, including LA, where he’s just added staff member.

Meanwhile, Cost continues to build infrastructure.  Recall his 2 partners were operators of largest noodle and dumpling factory on East Coast, 130K-square-foot operation located in former brewery in booming Williamsburg part of Brooklyn, where Cost produced his soda concentrate.  Now they’ve sold out to S Korean food conglomerate, meaning they have ample liquidity to support expansion of ginger ale brand, but forcing move of concentrate operation.  That will now happen at dedicated 24K-sq-ft space in adjoining Bushwick area, with 10X capacity, Bruce said.  Product is bottled at E Coast copacker, and Cost is still in hunt for W Coast site.

Regarding Sparkling Ice as serious challenger both to Vitaminwater franchise and its diet CSDs, Coca-Cola has been fighting back intently with sparkling Fruitwater extension given elegantly designed plastic bottle and backed by heavy marketing support.  At same time, retailers across country have jumped into fray, launching private-label lines (often via Cott) that may underprice Ice’s promo price of $1 by 30 cents or more.  So far, tho, Ice seems to be handily weathering storm, scoring continued gains in measured channels even as Vitaminwater plunges by 20%, slower-selling Fruitwater moves out of code at some retailers and other  retailers grudgingly bring in Ice to buttress their own poor-selling private-label entries.  Even as Coke reportedly preps restage of Vitaminwater next year, it has embarked on urgent sales “acceleration” program that is slashing Vitaminwater and Vitaminwater Zero prices in NY and other markets to counter Ice juggernaut that’s been marvel of the bev biz (BBI, Sep 19).

That’s latest word from Ice wholesalers, several of whom attended gathering last week at Ice parent Talking Rain’s hq outside Seattle, at which co brass sounded them out about trends and ran proposed marketing concepts by them.  In conversation last night, ceo Kevin Klock confirmed gist of comments, tho he wasn’t ready to detail marketing initiatives until a few more contracts are signed.  IRI multichannel data excluding c-stores, club stores like Costco and up-and-down-street accounts showed that Ice more than doubled, +118%, to $249 mil for 52-week period, to sales level barely lagging Vitaminwater’s own $266 mil.  (Remember Ice is internally developed brand that’s taken 3 years to break $200 mil level since restaging, vs Vitaminwater brand that KO paid $4 bil to acquire.)  Meanwhile, 4-week data show Fruitwater already in decline.  Contacts in several markets have reported to BBI that they’ve spotted crates of out-of-code product being pulled off shelves.

Klock said co looks to maintain rooted approach, bringing in distributors for consultation on brand direction and working with retailers to devise effective 2014 programming.  He said co was relieved to see multichannel data supporting efforts to boost brand’s presence in key metros NY, Chicago and LA.  And while brand still only has 60% of US covered via DSD network of 180 houses, it’s making continued headway in closing gaps.

While reasons for Ice’s success have been matter of ardent debate among bev people, Kevin said Talking Rain crew has come around to conclusion that it shouldn’t be benchmarking itself vs functionally positioned brands like Vitaminwater but rather vs refreshment brands like diet CSDs.  He also derided commonly expressed notion that diet CSDs are fading fast because of consumer wariness of artificials sweeteners; after all, he noted, Ice uses them, and flags Splenda on label.  Whatever root of success to date, brand has moved into ranks of top 30 liquid refreshment brands dominated by CSD brands, and sees no reason it can’t continue to climb ranks.  “So how big can we get?” Klock asked.  “We’ll judge ourselves by the refreshment category.”  Strong words!

 Last full month of summer was not so hot for Monster in key convenience store channel as volume slowed to +6.5% last 4 wks thru Aug 31, per Nielsen figures reported by Morgan Stanley’s Dara Mohsenian.  That’s down from 11.4% gain over last 12 wks.  Lower prices didn’t help either as Monster volume decelerated in c-stores despite avg price decline of 2.7% in Aug, and that was vs. flat pricing for total energy segment.  MNST still managed to outperform energy drink segment’s volume gain of 4.3%. for those 4 wks but lagged 9.4% gain for Red Bull.  Red Bull’s avg price was up 0.8%, in line with 12-wk pricing trends.  Rockstar slightly eased its decline to -6% in c-stores last 4 wks (off 6.9% for 12 wks) despite small price increase of +0.4%.  Among Big 3 soft drink cos, Coca-Cola’s energy brands were up 13.9% for 4 wks on avg price decline of 2.4% but both PepsiCo and Dr Pepper Snapple took steep hits.  PEP’s energy brands (mainly Amp) dropped 16.7% despite price drop of 1.6%.  And DPS energy brands (mainly Venom) plunged 33.4% for 4 wks, accelerating what’s been 30.5% drop over last 12 wks. 

Prices Up, Volume Down for CSDs   Familiar story for CSDs in c-stores: consumers have proved willing to pay more but are purchasing less.  CSDs sagged 4.8% last 4 wks (vs -3.2% trend over 12 wks) while avg price rose solid 5.5%.  PepsiCo had most aggressive price hike, up 8.6% last 4 wks and took corresponding volume hit of 10%.  Coca-Cola prices were up 4.8% and suffered 2.3% volume drop, while DPS prices rose 2.3% and volume fell 3%.  Meanwhile trends got worse for private label-brands, which do little biz in c-stores to begin with.  Volume was off 2.6% despite avg 9.4% price drop.