Probiotic Proof Point; Ocean Spray Squeezes More Capacity
Yakult, a probiotic dairy beverage popular in Japan and sold in over 30 countries, is getting a big boost in the U.S. with the launch of a new state-of-the -art production facility in Southern California that is capable of producing 400,000 bottles per day.
Yakult U.S.A. Inc., a subsidiary of Yakult Honsha Co., Ltd., opened the new Fountain Valley, Calif. plant on May 16 after nearly two years of construction. The 76,800 sq. ft. facility will enable the company “to provide a more stable supply source” of its products instead of importing from Mexico, according to a company statement. Yakult U.S.A. stated that 2013 sales averaged about 182,000 bottles a day, a 112.6 percent increase over 2012, and expects demand to continue rising.
In the U.S. Yakult drinks are packaged in 2.7 oz. plastic bottles topped with a foil seal. Available in regular and “light” varieties (sweetened with sucrose and stevia, respectively), the products are made with skim milk and Lactobacillus casei Shirota, an exclusive Yakult probiotic strain that is said to benefit the body’s digestive and immune systems.
While U.S. sales of Yakult have steadily grown since its American debut in September, 2007, they still represent a relatively tiny part of overall global sales of the company’s products, which Yakult estimates at approximately 30 million bottles per day. Nevertheless, U.S. consumers are increasingly including probiotic food and beverages as part of their daily diets, and it’s clear that Yakult is looking to gain a larger share of the market.
Meanwhile, Ocean Spray recently celebrated the grand opening of its new production facility in the Upper Macungie Township of Pennsylvania.
Upon its completion later this year, the facility, about 60 miles northwest of Philadelphia and about 110 miles west of New York, will handle approximately 40 percent of the company’s North American volume and will produce more than 30 million cases of Ocean Spray juice per year. The company has already created 180 jobs at the new facility, according to a company release.
In April 2012, the company broke ground on the 44-acre site. Since that time, more than 1,000 men and women have contributed about 350,000 hours of labor to construct the 300,000 square-foot plant.
“The Grower-Owners of Ocean Spray Cranberries have made a major investment here in Pennsylvania and today’s celebration is the result of a lot of hard work by our employees and partners on this project,” Randy Papadellis, president and CEO of Ocean Spray, said in the release.
VEB and L.A. Libations Tie-Up
In a move that ties Coke’s Venturing and Emerging Brands group tightly to one of its most valuable service providers, the brand incubation unit purchased a minority stake in L.A. Libations, which has handled much of the go-to-market and channel expansion strategies for many of VEB’s products.
The move will put L.A. Libations, which has recently begun investing in and developing brands of its own, in the position of acting as an innovation resource for its new investor. VEB itself has had more success thus far by following the strategies of investing in brands early, like Zico and Honest Tea, and also by partnering with other companies to create products, as with its Illy issimo RTD coffee brand. But VEB’s internally innovated brands have been more of a mixed bag, as products like Cascal, a fermented CSD, and Sokenbicha, a barley tea, have fallen by the wayside.
Started by three former Coke employees, Danny Stepper, Dino Sarti, and Pat Bolden, in 2009, L.A. Libations has deep relationships with retailers and distributors and has helped shepherd Coke’s brands into several broad channels of trade, including drug, warehouse and supermarket accounts. The company has had great success working with a number of brands outside the Coke system, an arrangement that will not change as a result of the agreement.
Two years ago, L.A. Libations began to more actively create brands, launching Aloe Gloe, an aloe water brand, and incubating it on the West Coast. Earlier this year, the company launched Arriba!, an energy horchata, as a national exclusive in 7-Eleven. The company is also investing in a portfolio of brands that it hopes to grow; with VEB as a partner, it seems likely that the company would have the inside track on growing brands that are targeted for Coke.
A second investment round by fast-growing Runa, an organic Amazonian guayusa tea brand, has landed an interesting mix of actor, musician, and industry stalwart, along with a lead investment from a fund with strong CPG ties of its own.
The series “B” round, which came on the heels of last year’s $3 million series “A” round, brought in beverage industry investors Mark Rampolla – the founder of ZICO – and Kim Jeffery, the former CEO of Nestle Waters North America, behind lead investor Rosemont Solebury, a family office associated with the Heinz ketchup fortune.
The total raise was greater than the series “A” but less than $10 million, according to Runa co-founder Tyler Gage, who has a bizarre connection to at least one of the other investors, movie star Channing Tatum. One of Tatum’s earliest roles, in the movie “Step Up,” featured him playing a character named… Tyler Gage.
Beyond Tatum, the round added music industry heft with producers Lukasz Gottwald (known as Dr. Luke, he’s worked with Ke$ha, among others), Mike Dean (Kanye West) and musician manager Coran Capshaw (Dave Mathews Band, Phish).
The star-studded round came from “friends of friends” and growing interest in the brand, Gage said.
That interest may be accompanied by even more exposure now that the brand has closed a deal for six SKUs to enter the Safeway system nationally, giving the “Clean Energy” brand a conventional footprint to accompany its national Whole Foods availability.
On the hiring front, the company has brought on Zico and Vitaminwater veteran T. J. Leenders to run its East Coast sales team – a role that Leenders also held at Zico. Leenders will be dealing with some new DSD accounts as well, as Runa is leaving Blue Coast Beverage in Massachusetts for the larger Polar Bottling company. New Age Beverage, out of Denver, Colo., will also pick up the brand.
According to Gage, Runa sold more than $2 million in product last year – and he expects that amount to triple in the year to come.
Spindrift Awash in New Investment
Based in Charlestown, Mass., and with production facilities on both coasts, Spindrift is now preparing to ramp up distribution beyond the Northeast and California and extend upon its approach of strategic partnerships with like-minded retailers and restaurants, said company founder Bill Creelman.
Creelman said that Spindrift began its search for new capital at the beginning of the year and was advised by Silverwood Partners, a Sherborn, Mass.-based investment bank. The deal is first as part of a long-term strategic relationship between the two companies. Health and wellness-focused venture capital firm Prolog Ventures led the financing round, which also included funding from several other industry-focused angel investment firms, including New Ground Ventures and Warbros Venture Partners.
Spindrift has seen sales of its products double in each of the last two years, according to Creelman, who expects to see a similar leap in 2014. Some of that boost will come from a foray into the Southeast, where the company expects to make a big push this year backed by the recent hire of a sales director for the region.
Purely Righteous Exit for Fleishman
The former Kashi and Coca-Cola marketing executive, who left what he’d called a dream job — heading up marketing at acai based food and beverage company Sambazon — to start the consultancy, found last year that Suja, Purely Righteous’ first client, quickly took precedence.
After a remarkable stretch in-house, however – one that culminated in Suja being named supplier of the year at Whole Foods – Fleishman is returning to the consultancy, one that partner and longtime friend Andrew Aussie incubated during his absence.
Working with Aussie, a former colleague from Kashi, Fleishman said he plans to focus on sustainable health food and beverage companies, refining strategic and marketing approaches.
Fleishman, who had been named Chief Marketing and Strategy Officer for Suja, will continue to consult for the company as it searches for a new marketing chief, according to CEO Jeff Church, who praised Fleishman’s work.
Hoagland COO at ITO EN
Praising his “unwavering commitment to high quality products and innovation,” ITO EN North America has promoted Jim Hoagland to Chief Operating Officer. Hoagland has been with ITO EN North America since August, 2003 and most recently held the role of Executive V.P. of Sales & Marketing for the company, which also announced the elevation of Brad Angevine to the role of Sr. VP, Marketing & Product and Kyoichiro Asai to the position of Sr. VP-Asian & DSD Division.
ITO EN North America, the North American arm of Japan-based ITO EN Ltd., markets a range of tea and coffee brands in the U.S. and Canada, including its popular TEAS’ TEA and Oi Ocha tea brands, Sencha Shot functional drinks and Matcha LOVE platform. Hoagland has played a key role in the company’s sustained investment in innovation, including its first foray outside of the tea segment with last year’s launch of Jay Street Coffee, a line of RTD coffee products.
The company described Hoagland as “an integral part in the business expansion into the natural and specialty markets, mainstream grocery retailers and mass market channels.”
RealBeanz has hired Richard Edgell as its senior vice president of sales.
Edgell has 25 years of experience in the beverage industry, mostly recently working as the senior vice president at the Dr Pepper Snapple Group. Aside from DPSG, Edgell has generated sales for an impressive cadre of brands such as Vita Coco, FIJI, AriZona, Sunny Delight, Rockstar, Body Armor and vitaminwater.
Edgell will attempt to expand Brooklyn, N.Y.-based RealBeanz beyond its East Coast footprint.
“Rich has a thorough understanding of the beverage industry and an unmistakable passion for achieving results,” Serge Freund, president of RealBeanz, said in a press release.
BluePrint Founders Depart
BluePrint Juice Founders Zoe Sakoutis and Erica Huss have left the cold-pressed juice company, about 18 months after they sold it to natural products conglomerate Hain Celestial. The pair said “we built a great brand and Hain’s acquisition of the BluePrint brand provided additional opportunities to grow the business. Erica and I are looking forward to the next chapter in our professional lives.”
Blue Point Gets a President
Blue Point Brewing has announced that former Goose Island Brewing and Deschutes Brewery executive Mark Hegedus will take over as president.
The news comes less than three months after Anheuser-Busch InBev (A-B InBev) acquired New York-based Blue Point for an estimated $24 million, and three years after the beer giant purchased Chicago-based Goose Island for $38.8 million.
Blue Point was founded in 1998 by Mark Burford and Pete Cotter and is headquartered in Patchogue, N.Y. Burford and Cotter will continue to serve as senior advisers at Blue Point.
A long-time marketing and sales executive, Hegedus previously developed local and national marketing strategies and programs for Goose Island. Prior to his two-year stint with Goose Island, Hegedus worked with Deschutes Brewery, where he was the director of sales and marketing, Red Bull North America, as an on-premise sales manager, and Coors Brewing Company as a national accounts manager.
NBWA Hires an Economist
The National Beer Wholesalers Association (NBWA) has hired Lester Jones, formerly of the Beer Institute, to serve as the organization’s chief economist.
In his new role, Jones will examine the economic factors that impact the beer distribution industry, as well as alcohol policy regulations at the local, state, and federal levels.
“America’s beer distributors deliver enormous economic value to communities across this country,” NBWA president and CEO Craig Purser said in a statement. “Lester’s work as Chief Economist will augment that great story, and his research will be influential in policy discussions that involve state-based alcohol regulation, the three-tier system and independent beer distributors.”
The Beer Institute Hires a President and CEO
McGreevy will lead the trade association’s efforts to represent the beer industry before federal and state lawmakers, as well as other regulators, when he assumes the role on June 23. McGreevy had been with the ABA since 2005 and represented the interests of non-alcoholic beverage producers, distributors and franchise companies.
McGreevy takes over for Joe McClain, who left the organization in December.
McGreevy has been deeply involved in the political scene over the past two decades. He served as a lead advance person for John Kerry’s 2004 U.S. presidential bid, as well as the deputy finance director for Skip Humphrey’s 1998 Minnesota gubernatorial campaign. McGreevy also served as the finance director for the DFL Senate Caucus campaign, and was the Northeast Pennsylvania field director for the 1992 Clinton-Gore U.S. presidential campaign