A Dozen for ’15

Hey, I love the beverage business because it’s never static, and the new year seems to be bringing an uncommonly rich array of intriguing storylines to follow. Here are a dozen to ponder:

Will Sparkling Ice continue its grand adventure?
It’s been an extraordinary story so far: a venerable, overlooked regional brand, Sparkling Ice, explodes into broad popularity almost as a hail Mary pass after its owner, Talking Rain, spends millions in failed attempts to turn the more elaborately engineered products into national brands.  In the process, the brand throws a lifeline to independent DSD wholesalers who need a high-volume winner after seeing their major energy and coconut water brands migrate to the major systems. How much running room does the brand have? Can it continue to work the magic that has dazzled consumers into overlooking the fact that Ice is really not all that different from the diet sodas they think they’re abandoning?

Brilliant in conception, will the Coke/Monster deal pan out in execution?
In theory it’s a brilliant transaction: Coke takes a minority stake in the decade’s hottest beverage brand and undertakes a massive brand swap that sends all its energy brands to Monster while Monster cedes its non-energy brands to Coke. Each partner focuses on what it does best even as Coke advances its new strategy of taking a hands-off stance with partners like Monster, Keurig and Fair Oak Farms. Will the partners overcome the substantial execution risk to make it work as the brand segues from hundreds of Bud wholesalers to a Coca-Cola Refreshments unit that’s so lumbering that KO is on the way to refranchising it back to independent operators?

Will Body Armor put a dent in Gatorade’s sports drink hegemony?
For years sports drinks has been a third-rail category that few ventured into, thanks to Gatorade’s years of brilliant brand building, and ongoing price skirmishing with Powerade. Lately, we’ve seen a flock, some combining hydration with other features like energy or protein. The most ambitious has been Body Armor, now in the hands mainly of the relentless Vitaminwater co-creator Mike Repole. If progress has been modest so far, Repole has the resources to doggedly work the brand until it breaks out. Truthfully, are you ready to write him off?

Can Bai-5 become another Vitaminwater?
It’s been a sweepstakes running 8 years now: fill the void in a market created when Coca-Cola took out Vitaminwater, now in steep decline. Bai-5 seems to be edging closer to grabbing that spot thanks to good flavor, low calories, a natural sweetener, accessible price and the vague health association of its coffee fruit. Bonus: Its distributor, Dr Pepper Snapple Group, finally seems committed to raising its profile in noncarbs as a counterbalance to its core CSDs.

Will coconut water leader Vita Coco weather rivals’ new challenges?
What started as three-way race in coconut waters aimed at general market now has clear leader: Vita Coco. A Red Bull magnate in China should help the brand ignite a new round of growth in that market, but Coke and Pepsi are surely readying new assaults with Zico and ONE. Can Vita Coco stay sharp?

Can cold-brewed coffee break out?
The first time you try it, cold-brewed coffee can be a revelation for its rounded taste and lack of bitterness. But it carries production and distribution challenges, and is on shelves confusingly in concentrate form and as an RTD beverage, often with added milk and sugar that obscure the flavor. Can brands pursuing a national vision like Stumptown, Chameleon and High Brew sort out these issues? Will Starbucks enter the fray?

For Mamma Chia, what’s the ceiling on chia?
Mamma Chia has enjoyed a remarkable run with a powerhouse nutritional ingredient long associated with a goofy toy. By now the brand has extended into several food and beverage categories, weathered an incursion by GT’s Kombucha and built a seasoned team to carry the message to new classes of trade. Will the magic run continue?

No longer a novelty act, Reed’s rides sodas, kombucha and private label to serious revenues.
With a founder as colorful as the tie-dyed shirts he wears, it’s been easy for some to view Reed’s Inc. as an entertaining novelty act. But Chris Reed’s Reed’s and Virgil’s natural sodas are natural-foods mainstays, his bet on kombucha with Culture Club occurs as that arcane segment seems is moving into broader consumer awareness, and he’s cultivating retailers by doing their private-label brands.  A $40 million business now, will REED jump the shark in 2015?

Suja accelerates its high-wire act on HPP juice.
It’s a high-wire act: juggling scores of sku’s among multiple sublines at different price tiers, all produced exactingly to order via high-pressure processing (HPP) from fresh produce brought in days or even hours earlier. Pushing to democratize cold-pressed juice, Suja seems to be leaving no stone unturned, with a pair of facilities near San Diego that are in near-perpetual upgrade mode. Can founder Jeff Church and his team pull it off against proliferating local and regional rivals, not to mention Starbucks’ Evolution Fresh?

Will the Essentia/Aquahydrate battle ignite alkaline water as the next superpremium frontier?
Coca-Cola’s Smartwater has had a nice run at the premium end of bottled water, but what will be the next premium growth engine? A battle is brewing in alkaline water between Essentia, moving briskly beyond its natural-channel bailiwick, and Aquahydrate, with celebrity investors (Diddy and Mark Wahlberg) and athlete endorsers. The category seems ready for its first real market test.

Can Honest Tea go broad without losing its cred?
Now a wholly owned unit of Coca-Cola, organic Honest Tea can make a rare claim of being an independent brand that’s retained its vitality years into an alliance with a major strategic player. Its CEO, Seth Goldman, remains a committed defender of the brand’s values, but the brand is under mounting pressure to get the brand to turn in c-stores and fast-food eateries.

Celsius burning just calories, not cash.
There aren’t many second acts in beverages, but the calorie-burning Celsius has stopped burning capital and gotten on a brisk growth trend. If the brand breaks through, it will be a rare functional entry that’s been able to go broad in a sustainable manner.

Longtime beverage-watcher Gerry Khermouch
is executive editor of Beverage Business Insights,
a twice-weekly e-newsletter covering the
nonalcoholic beverage sector.