Chain restaurants now have another year before they must comply with new federal regulations that require the disclosure of caloric value and supplementary health criteria of beer, food and soft drinks sold on-premise.
The Food and Drug Administration (FDA) has extended the compliance date for the new rules, which apply to restaurants and foodservice establishments with 20 or more locations, from December 1st of this year to December 1st, 2016.
In its decision summary, the FDA said it has received numerous requests from retailers seeking not only more time to comply with the new standards, but also asking for clarification on portions of the rule and asking whether specific practices are amenable.
The new set of rules, which among other things require written nutritional information for standard menu items to be available for consumers who ask to see it, are meant to help the customer make “informed and healthful dietary choices,” the FDA wrote in its summary.
“Therefore, allowing adequate time for covered establishments to fully implement the final rule’s requirements… helps accomplish the primary objective of the final rule and is in the public interest,” the agency said.
The FDA said it will provide a draft guidance document “that provides answers to some of the more frequently asked and crosscutting questions” in August.
Harmless Harvest: Raw No More
Breakout coconut water brand Harmless Harvest has removed the phrase “100% Raw” from labels of its original coconut water varieties and renamed the products “Harmless Coconut Water.” The company announced the update in a July 31 blog post.
Harmless Harvest has long held the position that its use of high pressure processing (HPP), which, unlike heat-based pasteurization, uses pressure to inhibit bacteria growth, allows for the use of the term, particularly with regard to the ability of the processing method to maintain the flavor and the nutritional content of the coconut water.
However, citing the growth of the use of the term “raw” on a number of new products, and the U.S. Department of Agriculture’s “lack of legal definition or certification for the term,” Harmless Harvest wrote in its blog post that “there is no way for us—or any product—to achieve official certification that we are a raw product,” hence the decision to remove “100% Raw” from its labels.
“With the never-ending confusion in descriptions and claims on beverage shelves, we thought the time was ripe to clarify what we make and how,” the company wrote.
Harmless Harvest noted that “the last thing we want to do is create more confusion and copycats dilute such a powerful word and go the way of other meaningful words such as ‘natural.’” Following that phrase, however, came the declaration, “Yes, we are raw.”
In a later interview with BevNET, co-founder Justin Guilbert noted, “Four years down the line, with the critical and commercial success, we’ve seen a lot of things evolve. There’ve been a lot of me-too products; cold-pressed and raw [descriptors] are starting to, I believe, dilute the message around ‘what’s the superiority of the product?’ It’s around raw and not about the source. If you have a bad orange, you’re going to make bad orange juice, regardless of how you process it.”
Harmless Harvest’s move may prove to be influential because of its pioneering use of HPP. Meanwhile, regulatory agencies are also exploring that processing method and its associated terminology.
Over the past year, coconut water beverages labeled and sold as “raw” have attracted the watchful eye of the U.S. Food and Drug Administration (FDA), which states that the use of HPP alone is not enough to achieve a “five-log reduction,” a regulatory requirement of a 100,000 fold decrease in the number of microorganisms for juice that is packaged and sold. The FDA requires a secondary step, such as acidification or the use of ultraviolet light or radiation, is needed to control bacteria growth.
In its post, the company stated that the coconut water is “essentially unchanged.” It added that the coconut water will continue to be sourced from “organic Thai Nam Hom coconuts that have been sustainably farmed and hand-picked” and “it will still be a non heat-pasteurized product.”
As for the phrase “Harmless Coconut,” it appears that Harmless Harvest may have some innovation in the pipeline that goes beyond coconut water. On March 26, the company filed an application with the U.S. Patent Office to trademark the phrase, describing its use for a “Coconut-based beverage used as a milk substitute; Prepared coconut.”
ABA vs. SF
The American Beverage Association (ABA) has sued San Francisco over recently passed legislation by city administration that requires warning labels on ads for sugar-sweetened beverages. The lawsuit arrived six weeks after the city’s Board of Supervisors voted unanimously in favor of the legislation.
The Board agreed to labeling that would read “WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes and tooth decay.” In addition, the legislation bans advertisements for sugary beverages on city property and bans the use of city funds to purchase such beverages. Public health officials have also launched “The Open Truth” campaign, placing ads on public transportation vehicles and stations throughout San Francisco warning consumers of the potential health risks associated with soda consumption.
“The city is free to try to persuade consumers to share its opinions about sugar-sweetened beverages,” the ABA’s lawsuit reads. “Instead the city is trying to ensure that there is no free marketplace of ideas, but instead only a government-imposed, one-sided public ‘dialogue’ on the topic – in violation of the first amendment.”
Last November, San Francisco voters failed to pass a measure that would institute a 2-cent-per-ounce tax on sodas and other sugary beverages. Nearby voters in Berkeley, Calif., however, passed landmark legislation to become the first city in the country to impose a tax on soda. Seventy-five percent of Alameda County voters voted in favor of the tax.
Meanwhile, lawmakers in Alabama are set to meet next month to discuss a statewide tax increase on soda as the state looks to close a shortfall in its 2016 budget of $200 million. The proposed soda tax would go a long way towards doing so; officials have said it would raise $182 million. Unsurprisingly, the ABA has come out in opposition to the tax calling it “regressive and harmful” in a press release issued on July 24.
Claim Case 1: “All Natural”
Yet another beverage brand that uses “all natural” to describe its formulation has been targeted by a lawsuit seeking class action status. Pure Leaf, a line of bottled iced teas produced by PepsiCo in a joint partnership with Unilever, is the latest brand under scrutiny with plaintiffs in two separate lawsuits each of which allege that because the products use citric acid — an ingredient that can be synthetically created — as a preservative, they are being falsely marketed as “all natural.”
The first lawsuit was filed in April by Florida resident Michael Laboon. Laboon claims that Unilever and PepsiCo deceptively labels Pure Leaf beverages as “natural” despite the use of “unnatural ingredients, which are synthetic, artificial, and/or genetically modified, including but not limited to Citric Acid and/or ‘Natural Flavor.’”
“Unfortunately for consumers, they were charged, and paid, a price premium for these alleged ‘All Natural’ Products, over other Products that did not claim to be ‘All Natural,’” the lawsuit reads. “In addition, or as an alternative thereto, Plaintiff and members of the Class would not have purchased the Products but for the ‘All Natural’ claim, and as a result, Plaintiff and members of the Class suffered damages in the total amount of the purchase price of the Products(s) they have purchased.”
Laboon filed his case in the U.S. District Court for the Southern District of Florida and is seeking class action certification.
Claim Case 2: Fire Cider Dispute
A group claiming that the term “fire cider” is generic and has long been used to describe a type of cider vinegar-based elixir has launched a campaign that seeks to cancel a trademark of the phrase, which is owned by Shire City Herbals.
The “Free Fire Cider” campaign is rooted in a civil lawsuit filed by Shire City against Nicole Telkes of Austin, Texas, Mary Blue of Providence, R.I. and Katheryn Langelier of Union, Maine, each of whom identify as “herbalists” whose work is focused on botanical-based wellness and health remedies.
Shire City, named for its hometown of Pittsfield, Mass., filed its lawsuit in April, 10 months after the launch of an online petition on Change.org seeking to revoke the Fire Cider trademark. The petition includes a copy of the letter that organizers sent to the U.S. Patent and Trademark Office, which claims that the term and recipe for fire cider was originally introduced in the 1970s by herbalist Rosemary Gladstar who has since used it in “her copyrighted and published books, blogs and [sic] you tube videos.”
“This name has become a household name for a blend of herbs historically used to prevent and support the body during times of colds and flu,” the letter reads. “Trademarking this term is like trademarking the word pizza!”
In a recent article in The Boston Globe, Shire City founders Dana St. Pierre said that he and co-founders Amy Huebner and Brian Huebner feel that they are being unfairly vilified by those behind the campaign.
“People think that we are some giant corporate monster, and that we are this huge dangerous threat to the entire herbalist tradition, and that we must be stopped at all cost right now or there are going to be this unraveling of everybody’s rights,” St. Pierre told The Globe.
Claim Case 3: Lee Litigation is Back
A federal judge has ruled that part of a false advertising lawsuit filed against Bai Brands, maker of Bai5 Antioxidant Infusions beverages, can move forward.
Filed on May 6, 2014 in the U.S. District Court, Eastern District of New York, the proposed class action lawsuit alleges that Bai has misled consumers by making claims about the antioxidant content and value of coffeefruit in its products. The lawsuit states the U.S. Food and Drug Administration prohibits nutrient content claims for antioxidants, with the exception of certain vitamins such as vitamin C. Bai has used phrases including “Antioxidant Packed” and “Antioxidant Goodness Inside” to describe its beverages. The plaintiffs claimed that consumers were deceived into paying a premium for what they thought was a healthier product.
In response to an email inquiry about the lawsuit, Bai Brands CFO Ari Sorokin wrote that “as you might expect, we have been counseled not to respond to your inquiry during litigation.” Sorokin noted that “class action lawsuits are nothing new to the beverage industry, or to Lee Litigation who initiated the suit.”
Based in New York, Lee Litigation describes itself as a “full service litigation law firm” with “a focus on class action lawsuits.” It currently represents plaintiffs in several recent lawsuits involving beverage brands, including Inko’s, Starbucks, and Pom Wonderful, and operates classactioninvestigation.org, a website which lists 26 “active investigations” into consumer product brands in a variety of categories.
In March, Bai filed a motion to dismiss the lawsuit, which was filed on behalf of plaintiffs in California, New York and Pennsylvania. U.S. District Judge Haywood Gilliam in the Northern District of California declined to dismiss the case in its entirety, agreeing with plaintiffs that a “reasonable consumer” could be misled into thinking that phrases like “Antioxidant Packed” means that the beverages provide a “good source” of antioxidants. As a result, he deemed the prohibited nutrient content claims in the lawsuit to be valid.
However, he stated that plaintiffs had not provided the court with specific instances of consumer deception, and asked their attorneys to include that information in an amended complaint.
Gilliam did dismiss the plaintiffs’ claims that Bai deceived consumers by simply stating that its beverages include antioxidants. He said that the statements could “only reasonably be read to assert the undisputed fact” that the products do contain antioxidants, and that such marketing claims are allowed under FDA regulations.
The case is one of a number of proposed class action lawsuits that have targeted antioxidant claims made by beverage companies.
Pabst Returns to Milwaukee
In a press release, the company said it plans to sign a multi-year lease on a building within the Pabst brewery “complex,” a mixed-use site that has already been partially redeveloped to include office buildings, apartments and a hotel.
According to the Milwaukee-Wisconsin Journal Sentinel, the new brewery and tasting room will open in a former German Methodist church, a6,000 sq. ft. space that had previously been used as an employee bar and training center in the 1970s and 1980s. A second floor restaurant, operated by Milwaukee restaurateur Mike Eitel, is also planned, according to the paper.
Slated to open next summer, the company will spend between $3 – $4 million to build “small brewery” that will serve as the company’s “innovation hub” for new product ideas and the creation of new craft beers. Once complete, the new brewery will be capable of producing about 2,000 barrels per year, according to the Milwaukee Business Journal.
Pabst is partnering with (and leasing the space from) Milwaukee-based developers Zilber, Ltd., who purchased the 20-acre complex in August 2006.
“The launch of this brewery in Pabst’s original home represents a long-awaited return to our roots,” chairman and CEO Eugene Kashper said in the statement. “Milwaukee is our home – the Pabst Mansion, the Pabst Theater, Pabst Farms, and this beautiful brewery complex – these are all part of Frederick Pabst’s amazing legacy, which we are honored to continue by returning to our hometown and birthplace.”
In addition to brewing many of Pabst’s pre-prohibition brands like Old Tankard Ale, Andecker, and others, Pabst said it intends to brew new craft beers “inspired by recipes from the Pabst archives.” The tasting room will feature “exclusive small-batch brews” that will only be poured on site.
Duvel Continues Acquisitions
Another top U.S. craft brewery is changing hands.
Duvel Moortgat will add to an impressive roster of American craft brands – one that already includes Kansas City’s Boulevard Brewing and New York’s Brewery Ommegang — by “combining” its U.S. operations with California’s fourth largest craft beer company, Firestone Walker Brewing.
Specific financial and contractual details were not disclosed and both companies have declined to comment on the precise nature of the deal.
Nevertheless, sources Brewbound interviewed have characterized the transaction as an “acquisition,” and not a merger (traditional mergers typically involve two companies exchanging stock to create a single entity whereas acquisitions most often include the sale of ownership stakes in exchange for cash and/or stock in the acquiring company).
Industry trade publication Beer Marketer’s Insights speculated the deal could be valued around $250 million. That amount closely mirrors a Wall Street Journal valuation estimate from last November, which pegged craft brewery multiples at $1,000 per barrel. By comparison, when Duvel acquired Boulevard 20 months ago – at the time an 187,000-barrel brewery — it paid about $100 million, according to sources familiar with the transaction.
Firestone Walker produced 208,000 barrels in 2014, up 38 percent from the year prior. The company is projecting another year of growth in 2015, with current production forecasts in the neighborhood of 272,000 barrels, according to Duvel USA chief Simon Thorpe.
Combined, the two companies are projected to make upwards of 540,000 barrels in 2015, which would catapult Duvel USA to No. 7 on the Brewers Association’s top-50 craft brewery list. The trade group currently ranks Duvel USA as the 12th largest craft brewer.
In a conversation with Brewbound, Thorpe described the deal as an “investment that is all about enabling Firestone to accelerate growth.”
“Together we can achieve a lot more than we can on our own,” he said.
Craft Beer at Mid-Year
Craft beer volume is up 16 percent at the midway point of 2015, according to a recent Brewers Association (BA) report.
Year-to-date through the end of June, U.S. craft brewers sold approximately 12.2 million barrels of beer, per the BA’s data, up from 10.6 million barrels sold during the same period in 2014.
In a news release, BA chief economist Bart Watson said growth is occurring in all regions throughout the country and is “stemming from a mix of sources including various retail settings and a variety of unique brewery business models.”
While craft volume is up, the segment’s typically torrid rate of growth has slowed slightly as compared to the same timeframe last year.
During 2014’s mid-year check-in, that abovementioned 10.6 million barrel figure represented a volume increase of 18 percent. Watson said it’s hard to know exactly what’s behind the dip, but pointed to three things that might be contributing factors:
• A bigger base of breweries: “This 16 [percent] rate puts the segment on pace to add as many barrels as last year (if not slightly more), but that same absolute number of barrels is a lower rate on a bigger base.”
• On-premise challenges: “Regionals are starting to face some of the same on-premise challenges as the large brewers – tap rotation, desire for hyper-local, etc.”
• Capacity constraints: “Most of the slow growth is coming from breweries with capacity constraint issues.”
The rate is still higher than the 15 percent gain in volume sales measured at the midway point of 2013. However, that count was taken using an outdated Brewers Association definition for a craft brewery, one that excluded Yuengling, which is now regarded by the trade group as the nation’s largest craft brewer.
As of June 30, there were 3,739 operating craft breweries in the United States, 699 more than at last mid-year check, according to the BA. Less than 1,750 craft breweries were operating in 2010. And there’s still plenty of entrepreneurs trying to break into the space — the organization counted 1,755 breweries-in-planning at the end of June.
DEALS – SMALL, MEDIUM, AND MONSTROUS
Lots of money poured into beverage companies over the summer, from startup capital to huge tie-ups between multibillion dollar companies. Here are some of the highlights:
On the bleeding edge of juice innovation is something called “chewable juice,” a subset inhabited by a handful of brands, including Chuice and Harvest Soul. The beverages are made up of fruit and vegetable juices that are blended with herbs, nuts and seeds that are finely chopped, as opposed to pulverized.
While Chuice (an abbreviation of “chewable juice”), is carried by a just handful of retailers in its home market of Atlanta, Ga., Taste of Earth Acquisition LLC, which markets the brand, recently received a major cash infusion via former Alibaba executive Sanjay Varma, who invested $500,000 in the company.
Currently offered in two varieties, Red: The River of Life, and Green: The Forest, Chuice beverages are made with over 30 ingredients, including spinach, oranges, carrots, pumpkin seeds, brussel sprouts, pecans and honey. Positioned as healthy meal replacements, the drinks are packaged in 12 oz. plastic bottles and high pressure processed.
Varma had been the vice-president in charge of business development and third-most senior executive at Alibaba, the massive Chinese e-commerce company, which, following a September, 2014 initial public offering, is valued at over $212 billion. In a company statement, Varma called Chuice an “innovative and tasty new food concept” and noted that he “had never seen anything like it and saw incredible market potential.”
The company, which was founded by wellness consultant and fitness trainer Ladell Hill and headed by Dr. Sujit Sharma, a physician at Children’s Healthcare of Atlanta, is seeking an additional $4 million from other investors to support a national expansion for Chuice.
Meanwhile, the Litchfield Fund, a Cleveland-based family investment fund with a focus on the natural and organic food industry, announced equity investments in Harvest Soul and in Skyr smoothie makers B’more Organic.
Like Chuice, Harvest Soul is based out of Atlanta and utilizes the cold pasteurization technology high pressure processing, however Harvest Soul is USDA certified organic and in April achieved Non-GMO Project verification. It’s a distinction the Litchfield Fund’s Chief Business Officer Tom Malengo says will position Harvest Soul to thrive moving forward.
“We’re making these investments for the long term and we believe being organic and non-GMO is key to prospering in the long term,” Malengo said in a call to BevNET.
Malengo declined to disclose the size of the fund’s investments put pointed to the success of chia seed beverage brand Mamma Chia as an indicator of consumers’ readiness for a seemingly bleeding edge product like Harvest Soul, who received its first purchase order from United Natural Foods, Inc. (UNFI) in February ahead of the brand’s official launch in Whole Foods’ Southern Region.
“Chewable juice is brand new but people are already getting used to this idea that they can chew and drink and it makes sense,” he added.
As for B’more Organic, the Baltimore-based company recently relocated to a larger office space in the city to make space for new staff hires on its sales, marketing and manufacturing teams. The brand has also recently expanded its distribution into Whole Foods’ Mid Atlantic region as well as 50 Safeway supermarkets in Virginia, Maryland and the District of Columbia.
Finally, crowdfunded equity site CircleUp has raised some capital of its own to invest in the brands raising capital on its equity-based crowdfunding platform.
Managed by CircleUp managing director Jason Yuan, CircleUp’s $22 million Consumer Growth Fund has invested in Canadian nutritional “Supershake” brand Rumble and Northern California-based hard cider producers Sonoma Cider. Both companies have also closed rounds for over $1 million and $4 million respectively using the site.
The CGF’s announcement arrives as CircleUp recently passed the 100 transactions mark, with companies raising over $100 million to date on the platform. According to CircleUp COO Rory Eakin, beverage brand startups make up around 20 percent of the companies utilizing the site. Along with Rumble and Sonoma Cider, other beverage brands that have closed fundraising rounds on CircleUp include Bhakti Chai, Joia Soda, Kombucha Brooklyn and Rooibee Red Tea, who used CircleUp to secure the final $500,000 of a $2 million capital raise back in March.
Stage II: Bulletproof, Body Armor Defenseless Against Cash Infusions
Trinity Ventures, a Menlo Park, Calif.-based venture capital firm, has invested $9 million into Bulletproof, the firm best known for butter-infused Bulletproof Coffee, which it says can help consumers lose weight and get smarter.
The investment comes as the company prepares to launch a three-sku FATwater line, which combines water with some of Bulletproof’s fat-based nutritional supplements into a bottled, RTD beverage. The product soft-launched last week at seminal Los Angeles retailer Erewhon Natural Foods in three flavors, Orange, Berry, and Lemon, in 16 oz. PET bottles. Label copy indicated a 20 calorie product infused with Bulletproof EXT Oil. Its launch price is $3.95 per bottle.
Trinity, which has invested heavily in technology and software ventures, is also well-known for investing early on in Starbucks.
Bulletproof — a company that backs the idea of “biohacking,” or improving human functionality through changes in biochemistry — is the product of founder Dave Asprey, himself a former Entrepreneur-in-Residence with Trinity Ventures. Two Trinity executives will join Bulletproof’s board.
Bulletproof as it stands now is a platform with roots in media and home-preparation coffees and supplements, but with the investment it is branching into a brick-and-mortar cafe and store, as well as the RTD product.
Meanwhile, four months after announcing a $15 million investment in Bai Brands, Dr Pepper Snapple Group is planting its flag in the premium sports drink segment. DPS has put up $20 million to acquire an 11.7 percent stake in BodyArmor, indicating a $170 million valuation for the sports drink brand Mike Repole and Lance Collins (of vitaminwater and Fuze fame, respectively) launched in 2012.
According to Repole, the deal “gives us strength and muscle” moving forward as BodyArmor looks to stake its claim in a space dominated by category leaders Gatorade and Powerade. BodyArmor achieved $30 million in dollar sales in 2014 and is projected to pass $50 million this year, he said.
Currently the brand is available in 25,000 stores nationwide, a number Repole expects to double in 2016 as Dr Pepper Snapple increases its distribution.
“We’ve been pleased with BodyArmor’s growth over the past two years and believe it has strong potential as a premium sports drink,” said Rodger Collins, DPS president of packaged beverages, in a company press release. “It’s already a great part of our allied brand portfolio, it has a management team with the experience and passion to succeed, and we’re looking forward to contributing to that growth and success over the long term.”Wells Fargo Securities analyst Bonnie Herzog was bullish on the partnership in her report, pointing to the deal as the latest example in a continued trend of Big Soda investing in growth categories amidst the decline of carbonated soft drinks.
“We continue to believe that DPS’s strategy to diversify away from its core carbonated soft drink brands into faster growing categories is the right long-term strategy,” Herzog wrote. “We are encouraged by DPS’s numerous partnerships and investments in rapidly growing brands within its Allied Brands stable which includes: BodyArmor, Big Red, FIJI Water, Vita Coco, Bai Brands, Neuro beverages, SunnyD, and HYDRIVE energy drinks. We expect that DPS will continue to leverage these growing brands to help support improved volume growth and offset overall weakness in the CSD category.”
Stage III: Coke Throws Down Big Money
The long-rumored strategic alliance between the Coca-Cola Co. Inc. and fast-growing juice brand Suja has officially announced its sale of a minority stake to the Coca-Cola Co. and Goldman Sachs’ merchant banking wing.
The deal, which will put $90 million into investors’ pockets in exchange for 30 percent of the company, will put Suja on the refrigerated trucks of Coke’s Odwalla juices, while also providing financing from the investors for a new manufacturing facility near the company’s San Diego headquarters. For Coke, the investment is expected to give the company an important partnership in a new healthy beverage category that is gaining traction with the growing cohort of consumers that are choosing to put down the soda giant’s core soda brands in exchange for less-sugar-laden products.
The access to Odwalla and the fast-tracked capacity construction is expected to increase the company’s distribution footprint by up to 50 percent in the next year, Suja CEO Jeff Church noted, allowing it to fulfill an imperative to make organic, high-pressure processed juices available at a reasonable price to millions of new consumers. Additionally, he said, it keeps Suja independent.
“We have complete control over our business,” Church said. “That’s important to me and to the team; we’ve all seen the times when a big company swallows up a small company and the mission of the small company gets lost. The hope is that the synergies will outweigh that stuff. We’re hoping to get the best of the big company and not lose the best of the little company.”
In an interview with BevNET, Church spoke passionately of the company’s sub-$4 Essentials line as the way Suja, and, by extension, Coke, can create an affordable path to fulfilling demand for organic products. He noted a study by the Gallup organization that 45 percent of the U.S. population is interested in trying to add organic foods and beverages to their diets, but that the U.S. Department of Agriculture has pegged organic products as only 4 percent of U.S. food sales.
“Our goal is to democratize, to take the best quality organic juice and make it available at best possible price point,” Church said. That means using Odwalla’s reach and some of the technical know-how brought to the company by its new partners, to cut down on the divide between cutting edge products like Suja and their high-end non-HPP competitors.
“To achieve our mission, we need to have a price point below $4 in our minds,” he said. “Our main goal is to keep the gap between conventional premium juices and organic HPP juices at a minimum. That’s what is going to increase adoption. And we’re using our different groups of investors and employees’ knowledge base and experiences to lower our cost structure.”
Much of the deal was negotiated by Matt Mitchell from Coke’s Venturing & Emerging Brands (VEB) group as well as former Minute Maid president Michael Saint John; VEB president and general manager, G. Scott Uzzell, will have one of two Coke seats on Suja’s board. But most of Suja’s relationship with Coke will go through Saint John, who will also join the board. The president of the Minute Maid division for the past 12 years, Saint John is now the President of Coke’s newly-formed Value-Added Dairy and Natural Healthy Beverages division. That group, launched in April, is tasked with overseeing Coke’s new, protein-enhanced Fairlife Milk, Odwalla, and coconut water brand Zico’s new chilled products; through Odwalla’s DSD network, the division is expected to provide the extra distribution backbone that is expected to help Suja grow into a larger organization. For Coke, bringing Suja on board also represents a chance to re-energize Odwalla, which has been losing share to competitors like Pepsi’s Naked Juice and Campbell’s-owned Bolthouse Farms for several years.
Finally, finishing up old business, Coke and Monster Beverage Corp. finalized their strategic partnership, one in which the cola giant paid $2.15 billion for a 16.7 percent stake in the energy drink company. The two companies initially reached a deal last August.
Along with an equity stake in Monster, Coke has become the “preferred global distribution partner” for Monster energy drinks, and assumed most of the wholesaling responsibilities for the brand globally, according to a joint release from the two companies. A notable exception is in metro New York, where Monster products will continue to be distributed by well-known independent distributor Big Geyser. Coke has also begun to plug Monster into its international business, a key part of the deal and one expected to reap massive rewards for the energy brand overseas.
The two sides also swapped ownership of non-primary brands with Coke acquiring all of Monster’s non-energy drink business, including Hansen’s Natural Sodas, Peace Tea, Hubert’s Lemonade and Hansen’s Juice Products, which are now managed by Coke’s Venturing and Emerging Brands unit. In return, Monster now owns energy brands formerly held by Coke, which include NOS and Full Throttle, among others.