We’ve backed off from the usual alphabet this year to turn our power list over to the Sweet Science. It takes five to make a fist, so here’s a knuckle sandwich of the elite, in five key areas.
Executives – Billion Dollars Brands and Multinationals
1. Mukhtar Kent, CEO, Coca-Cola Co.
It’s rare that corporate CEOs have their names chanted as they walk up the aisle, but the Turkish-born Kent has put the leadership of Coke in a chokehold. With refranchising moving smoothly along, and new partnerships and investments realizing a broadening product set, he’ll eventually be recognized as a transformational executive who managed to fight off domestic CSD declines by cementing Coke’s global empire.
2. Indra Nooyi CEO, PepsiCo
If Kent transformed Coke, Nooyi has unleashed transformational change throughout the food system. Shareholders might have scoffed when she started talking about “snackification” a few years ago, but her assessment of health and wellness trends has ultimately been the right one, and even activist investor Nelson Peltz has finally thrown in the towel. The question is, did she use up too much personal capital proving herself right while not greenlighting enough products that fit with the changes she anticipated?
3. Larry Young, CEO, DPSG
For entrepreneurs, DPSG has become a distributor of choice when it comes to instant scale, but there are holes in the company’s footprint – something that the company even acknowledges internally. Still, the company has started investing in growth, and its allied brands portfolio is increasingly formidable. Perhaps that’s the result of DPSG itself being a collection of purchased and merged brands. Maybe the best way to think of it is as a finishing school for entrepreneurial brands – with Young himself as headmaster.
4. Rodney Sacks, Monster Energy
Following a category-validating buy-in by Coke, Sacks is once again rolling the dice on innovation, unveiling Gatorade and Mountain Dew fighters that will undoubtedly indicate just how far the Monster brand can stretch in the store. Meanwhile, with the Keurig partnership turning into a wash for Coke following its buyout by private equity firm JAB, the Monster deal is all the more important to the soft drink giant.
5. Don Vultaggio, AriZona Iced Tea
Ever clever and persistent, Vultaggio won’t stop innovating and his sons are on board as well. But Shaq Soda proved to be a bubble that wouldn’t rise, and even the flagship iced tea brand has been slowly ceding share behind a reinvigorated Lipton and up-and-coming Gold Peak. Still, he’s moved the earth a bunch of times in the past and the next generation – and the current brain trust – remain vibrant and dangerous, especially now that his long court battle is over.
1. Kevin Klock, Sparkling Ice
The indefatigable Klock took a “must sell” company on its last legs and positioned it for global expansion and has positioned himself as the leader of a brand that is now looking to become a total beverage company. Is he a buyer or seller now? It doesn’t matter – the decision will have a lot more impact than the owners of Sparkling Ice could have ever dreamed when they got into the business more than 20 years ago. Klock, meanwhile, is emerging as an industry leader as well as a company one, evolving as the brand grows while watching the bottom line.
2. Greg Steltenpohl
The youthful radical has turned eminence grise, absorbing disasters at Odwalla and Adina to move on, ragged but right. And the mission gets stronger as the business gets bigger, with him running Califia Farms as a field-to-shelf platform that’s affecting the environment as much as it is the grocery store. He flexed his financial muscles last year with a huge boost of capital from Stripes Group and has been hiring top-notch talent for even more growth – and there are more surprises in store, no doubt.
3. Kara Goldin, HINT
Goldin has turned herself into a national figure as one of the country’s leading voices of the female CPG entrepreneur, and HINT itself is having a great year, with plenty of growth in revenue and outlets. Moreover, customers are becoming addicts, as Goldin once was with her very own kryptonite, Diet Coke. While the brand has continually raised money, it’s remained independent, allowing her plenty of power to decide the brand’s next steps.
4. Ben Weiss
Sure, it looks a lot like Vitaminwater. But the mix of gulpable taste, zero calories, and a Diet Coke–plus-sized hit of caffeine has Bai moving out of entrepreneurial ranks and into the mainstream. What is it? Most consumers don’t know – or care. What they know is that, increasingly, it’s everywhere they go, and it might not still be an independent brand by the end of the year.
5. David Smith
There’s an art to fast growth, and Smith and his veteran High Brew team, saddled up for another run after his education at Sweet Leaf tea, have figured it out. There’s no such thing as a sure thing, but most of the companies Smith and his friends and fellow Austin execs have bet behind have grown through their highly rational approach: move to the center, spend the cash to bring on a good team, and find the channel that offers the most runway. Easy, right? Only if you’re selective and disciplined about where you lay your money down.
1. JAB Holdings
Like Coffee? What about the morning? JAB probably owns both of them at this point, writing checks left and right to create one of the biggest ingredient and brand platforms Java has ever seen. With Peet’s, Stumptown, Keurig, Intelligentsia, and latest pickup Caribou, as well as European brands, supermarket products like Gevalia and Senseo, and as breakfast bagel joint Einstein’s on board, this firm hasn’t been shy about flexing its wallet. Of course, it’s just taking after its CEO, Olivier Goudet, who’s also the Chairman of the Board at Anheuser Busch InBev – a company that didn’t shied away from its own signature acquisition this year, bidding for MillerCoors.
It’s been a few years since it launched, but last year, with partnerships in place with a new set of strategics and a new fund of its own adding oomph to its analytics, this investment platform came into its own. Small brands continue to trumpet significant raises on CircleUp, getting the growth capital and exposure to make it from one stage to the next. With a strong focus on CPG, for many founders, CircleUp isn’t just a lifeline, it’s a trampoline.
3. CAVU Venture Partners
What’s not to like? There’s experience in operating brands at the early-to-middle stage with Clayton Christopher, a master brand accelerator and product picker in Rohan Oza, and a smart fundraiser with great people skills in Brett Thomas. Oh – there’s also nearly $200 million in the first pool and a strong willingness to invest in the beverage business, something that some funds shy away from after too much time dealing with the uncertainty that comes with having to move such a heavy product around. Christopher and Thomas were minted in the beverage business; their powerful friends are already running brands like High Brew and Mighty Swell, and they’ve already found strong partners from strategic co-investors like First Beverage and General Mills.
We don’t know if the vaunted private equity specialists’ backing of Spindrift is going to be a one-off investment or an entry point for more, but it’s interesting to have investors with this kind of track record in the food space (look at KIND, Justin’s, Health Warrior, Vega, Kernel Season’s, Pretzel Crisps, Quest) deciding to trade elbows in the fast-growing seltzer space. Contemporaries Encore and ACG have each made out pretty well in beverages with their investments in Isopure and Suja, respectively; is it VMG’s turn to build a winner?
5. EMIL Capital
This family office, associated with Germany’s Haub retailing family, spread out a series of beverage bets a few years ago, and has gradually brought the brands along to maturity. Goodbelly is the big winner so far, but Cheribundi and Sipp are both growing quickly with new retail partnerships signed in the past year. Balance Water is competitive but in a tough category. And with new retail play 2Beans on board to showcase portfolio products – and carry other beverage and food plays as well – Emil continues to hedge its bets.
5 Big Questions
1. Can National Beverage maintain its momentum?
The company lost much of the brain trust behind LaCroix, but the brand continues to grow and attract attention. Is it a house of cards, or diesel train? The next year should be indicative.
2. Who wins the coffee clash?
High Brew is at $6 million and killing, but Chameleon is at $5.2 and cruising. Meanwhile, Black Medicine just got funded, Stumptown is under Peet’s control, while La Colombe and others are trying for nitro infusions as a way to get an edge. Still, there’s Starbuck’s own cold brew play – and its got a big, big shadow.
3. Who goes next when it comes to soda taxes?
Having a per-ounce tax pass in Berkeley, California is one thing. Having it pass in Philadelphia – over objections from the soda industry, bottling magnate Harold Honickman, and even the Teamsters – is an entirely different beast. Is this another outlier, or the breaking point?
4. What happens to Aloe Gloe in the wild?
L.A. Libations is spinning the brand out as a freestanding company, with Dino Sarti running it on its own, Coke as an investor and Coast-to-Coast distribution. The brand has been incubated by some of the best in the business – but consumers still haven’t taken to aloe overall. Is this the brand that breaks through?
5. What does Juicero do to the juicing business?
Juicing has grown in three formats: RTD, on-premise, and at home, in the blender. Sure, the packet format disrupts at home, but it’s on-premise that the company has potential for early viability, diluting the distinctiveness of the juice bar by making organic blends available everywhere. Still, for most consumers, it’s the biggest signal coming from the great unknown, and it’s hard to figure out if the trend will fully land.
5 On the Rise
1. Europa Sports Products
Already a huge player in the fitness world, with the absorption of rival Lone Star, the distributor has a national profile that will be reaching more mainstream consumers through a growing Food Drug & Mass division. Whether it’s natural products crossing over into health, nutrition and sports categories – or those categories getting more shelf space in conventional accounts – Europa is primed to be a key player. Just ask AquaHydrate and Celsius, both of which are poised to take advantage of the company’s national footprint and unique competency. This is a route to market that isn’t just for supplements anymore.
2. Thrive Market
It didn’t ship beverages when it debuted. It does now. It just took in more than $100 million to keep growing. Thrive Market has some of the cream of the Whole Foods crop on board to help choose products and create programs. It’s got backing from everyone from Mark Rampolla to CAVU to Greycroft Partners. It’s got Zico, Califia, Sambazon, Orgain, and more. Don’t you want to be sold on Thrive Market? Thought so.
3. Polar Beverages
This regional distributor has become even more powerful with the increasing void in the Boston market – and the growth of its own Polar Seltzer brands in its native New England market as well as down South.
4. Outside Corporate VC
Maybe it started when Hormel picked up Muscle Milk two years ago, but erstwhile food manufacturers are really starting to kick the tires on beverage brands, with everyone from White Wave to 301 Inc. either investing in or showing a willingness to invest in fluids, not just solids. Add in acquisition-happy investors at Asahi and Anheuser Busch, as well as growing VC funds at Campbell’s, Kellogg’s, and more, and chances are someone will be cashing in.
The Green Mountain State has thrown companies for a loop this year with its encroaching GMO-labeling law. It’s been enough to drive some Coke distribution out of town and it wouldn’t be surprising to see it provoke national response before year-end. Meanwhile, though, manufacturers’ loss is label suppliers’ gain.