The Latest News on the Brands You Sell
INNOVATION 1
La Colombe Partners Up
Snap Kitchen, a fast-growing retail chain that sells healthy grab-and-go meals, snacks and beverages, has partnered with super-premium coffee company La Colombe to launch a co-branded line of bottled coffees. Snap Kitchen operates 49 locations in Austin, Dallas, Houston, Chicago and Philadelphia and the new products, both made with La Colombe’s “cold-pressed” coffee, are sold in all of its stores.
Launched in 2010, Snap Kitchen promotes itself as a “one-stop healthy meal shop” that sells fresh, chef-made, nutrient-dense and portion-controlled meals, most under 500 calories. Headquartered in Austin, Snap operates as a hub-and-spoke business, producing its meals, juices and coffee at production facilities in cities where it operates. The food and beverages are delivered daily to area locations.
INNOVATION 2
Zevia Refines Sweetener
Zevia has announced a breakthrough in ongoing efforts to improve its sweetener mix and use of stevia, the high-intensity, plant-based sweetener, the brand’s line of zero-calorie beverages.
Recently, Zevia unveiled a new Non-GMO Project Verified stevia blend, made exclusively from the stevia plant. The formula will be implemented in all 14 flavors of Zevia Soda, four flavors of Zevia Sparkling Water, three flavors of Zevia Energy, two flavors of Zevia Celebrations and Zevia Tonic Water.
According to CEO Paddy Spence, this latest development is simply the next step in the company’s “intense improvement path” for the sweetener. As of 2013, Zevia has been using a stevia blend based primarily on the compound Rebaudioside A, with natural sweeteners erythritol and monkfruit added to balance the intense flavor.
Spence explained that by focusing on other sweetening compounds present within the stevia leaf, the company could create a purer Reb A formula using steviol glycosides and no additional ingredients.
“What’s great is we are a tiny company compared to Coke and Pepsi but we put a similar amount of focus and resources into research around the stevia leaf,” said Spence.
CELEBRINVESTMENT
Timberlake Joins Bai
Bai has announced that singer and actor Justin Timberlake has joined the company as both an investor and as its first “Chief Flavor Officer.”
“I’ve been a fan of Bai for a long time and when I met Ben and his team, it became clear that I should be involved with this brand,” said Timberlake in a press release. “As a father and someone who is cautious about what my family and I consume, I love what Bai stands for. This partnership was created from a shared desire to help people put better ingredients in their bodies without sacrificing taste.”
“As an actor, businessman and a father, Justin embodies the core values of Bai,” said Ben Weiss, CEO and Founder of Bai, in a press release. “We are thrilled to have Justin join us in our mission to change the way the world drinks.”
Speaking with BevNET at the NACS 2016 show in Atlanta, Alana Radmin, Vice President of Communications for Bai, said the partnership came together over several months, after Timberlake, a multiple Grammy winner, met Weiss through a mutual friend who is also an investor.
Radmin added that Timberlake, 35, represents Bai’s core demographic of older millennials.
“Justin is a consumer and a fan of Bai, he’s part of our core demographic, and he’s one of the most creative people in entertainment,” said Radmin.
Radmin said Timberlake would be involved in several areas of the brand, including flavor innovation, marketing campaigns and digital content. She said Timberlake had visited the company’s headquarters and is involved in Bai’s “internal culture.”
The news came amid reports that Bai was exploring a sale of the company valued at $2 billion.
DEALTIME 1
Marley’s New Partner
Denver-based distribution heavyweight New Age Beverage Corporation has announced a merger of business operations with Marley Beverage Company, which markets Mellow Mood relaxation drinks and One Drop RTD coffees. The products were developed in partnership with the family of legendary reggae singer Bob Marley, whose likeness is emblazoned on labels.
“We are happy to announce that this week we have formed a partnership with the Marley Beverage Company whereby New Age Beverages will be integrating the Sales, Marketing, and Distribution associates of Marley into our Company, and we will be leading the commercial activities of the combined operations,” said New Age CEO Brent Willis in a letter addressed to retail and distribution partners. “Although the two companies will remain separate legal entities, going forward our companies will have one face to our retailer and distribution partners.”
Speaking with BevNET, Willis explained that the combination of his company’s sales and marketing resources along with consumers’ strong identification with Bob Marley as a public figure made the partnership an ideal opportunity for New Age to make its long-planned entrance into the RTD coffee segment.
Willis described expanding distribution in key existing accounts and opening new regions, including internationally, as priorities for the Marley brand. He added that the merging of the two companies’ sales forces would provide the muscle to make that possible. “We’ve got a lot of marketing and brand activities to build the business,” Willis said. “We have the scale and resources to be able to do it, unlike Marley did on their own. We think that those brands have a lot of untapped potential.”
The merger with Marley Beverage Company follows a deal that took place in March between New Age and Bucha, a brand of kombucha drinks owned by Willis. Bucha paid $20 million in cash and stock in a merger with natural tea brand Xing, owned by New Age founders Tom and Scott Lebon. Under the agreement, Willis was installed as CEO of the combined entity, with Tom Lebon remaining head of sales for Xing and Scott Lebon running brand operations. Along with the new additions of One Drop and Mellow Mood, New Age’s portfolio includes XingTea, Bucha and Aspen Pure bottled water.
Willis did not rule out an outright acquisition by New Age of the Marley Beverage Company in the future. “We’re just getting to know each other, and we like each other,” he said. “You never know for the future. We think this is the right structure for the companies for now.”
Willis also confirmed the partnership would not affect Marley Beverage Company’s existing licensing agreement with the Bob Marley estate for use of the singer’s name and likeness. This is significant as, in August, Colorado-based coffee roaster Jammin’ Java filed suit against Marley Coffee and its former chairman Rohan Marley, son of Bob Marley, for ending the company’s 15-year licensing agreement with the Marley estate that began in 2007. Marley Coffee is a separate entity from Marley Beverage Company.
Looking further ahead, Willis hinted at future plans for the Marley brand, “We think that the Marley brand has more breadth to it, and we’re already thinking about new product development and the evolution of the Marley portfolio,” he said. “There’s a pretty good presence already just on beverages. We’ve already started talking about what other new products or beverages we might be able to add to the portfolio beyond new flavors.”
DEALTIME 2
Brooklyn Brewery Sells Stake
Brooklyn Brewery revealed in October that it had struck a two-pronged deal with Japan’s Kirin Brewery that would include the sale of a minority stake and the establishment of a new joint venture in Japan.
As part of the two companies’ capital partnership, the Japanese beer company will acquire “an approximately 24.5 percent stake” in Brooklyn Brewery.
Specific financial terms of the sale were not disclosed, but Nikkei Asian Review, citing sources close to the transaction, valued it at “several billion yen.”
The deal will also include the founding of a new joint venture in Japan, which Kirin said would launch in January. Brooklyn Brewery will control 40 percent of that company.
Additionally, the two companies plan to “consider the development of original products for the Japan market and the launch of a restaurant business,” according to the release. Kirin will also help Brooklyn expand distribution into Brazil.
Brooklyn’s minority sale to Kirin is one of the higher-profile craft beer deals in 2016. Other notable transactions this year include Victory Brewing’s sale to Ulysses Management-backed Artisanal Brewing Ventures, Cigar City Brewing’s sale to Fireman Capital Partners-backed Oskar Blues Holding company, Devils Backbone’s sale to Anheuser-Busch InBev, a trio of small craft brewery purchases by MillerCoors and VMG Partners’ $90 million investment into a limited partnership called “VMG Stone Brewing Coinvestment.”
In 2015, Kirin Brewery posted sales of approximately $3.97 billion, according to public financial statements. Through the first six months of 2016, however, sales have declined more than 12 percent, to $1.76 billion.
Selling less than 25 percent to Kirin — Japan’s second-largest beer maker — means that Brooklyn, which last year produced 277,000 barrels and was ranked by the Brewers Association as the 12th largest U.S. craft brewery, will be able to remain an independent craft brewery in the eyes of the trade organization.
The BA only recognizes beer companies that are less than 25 percent owned or controlled by “an alcohol industry member that is not itself a craft brewer” as “independent.”
In a posting to his company’s website, Brooklyn Brewery president Robin Ottaway pointed to the BA definition and said his number one goal when negotiating a deal was to remain independently owned and operated.
“Let me be entirely clear – Eric [Ottaway] and I will continue to control and operate the Brooklyn Brewery for many years to come,” Robin Ottaway wrote.
First Beverage Group acted as the financial advisor to Brooklyn Brewery and Nomura Holdings Inc. advised Kirin.
LEGAL
Barefoot Bucha Owner Settles Lawsuit With Gallo, Agrees to Change Brand Name
Conscious Cultures, the maker of Barefoot Bucha, a Virginia-based kombucha brand, has agreed to settle a trademark infringement lawsuit filed against the company by Barefoot Wine owner E. & J. Gallo. Conscious Cultures issued a press release stating that founders Ethan and Kate Zuckerman have not admitting to any wrongdoing, but agreed to change the name of Barefoot Bucha.
In 2015 Gallo filed a notice of opposition with the Trademark Trial and Appeals Board (TTAB) seeking to block Conscious Cultures’ trademark application for Barefoot Bucha. Gallo described the kombucha brand’s name and logo as “confusingly similar in appearance, sound and meaning” to those of Barefoot Wine. In the following months, the two sides engaged in litigation and sought a resolution determined by the TTAB. However, things changed in April, when Gallo decided to sue Conscious Cultures in federal court.
“The lawsuit… alleging trademark infringement asking for monetary damages, that’s a very, very different kind of scenario you’re looking at as a small business,” Kate Zuckerman told BevNET. “Looking at it as small business owners, the time and energy expenditure, not to mention financial, we realized we were out of our league going through a federal trademark trial process which is very different from that from the TTAB.”
In an emailed statement to BevNET, a Gallo spokesperson said that the company is “pleased that Conscious Cultures and E. & J. Gallo Winery have reached a mutually agreeable resolution.”
Complete details of the settlement were not disclosed by either company, however, Zuckerman said that Conscious Cultures has a goal of completing the rebrand by the beginning of next year.
Although she said that “it’s hard to let go” of the Barefoot Bucha name, Zuckerman is excited about plans to crowdsource a new name, logo art and tagline for the brand. The company launched a contest to rename Barefoot Bucha. The winner will receive a year’s worth of kombucha, supplied by Conscious Cultures in a partnership with Whole Foods Market.
EXPORT
Wow! Coming Overseas Next Year
The International Finance Corporation (IFC), a member of the World Bank Group which offers investment, advisory and asset management services to encourage private sector growth in developing countries, has announced a $40 million investment in Brazilian healthy food and beverage brand WOW! Nutrition.
As a result of the investment, WOW! Nutrition should be able to increase its pipeline of products into the U.S., according to company advisor Bill Sipper, the Managing Partner at Cascadia Managing Brands, which has worked with WOW! since 2014.
“We will bring in maybe 50 SKUs in January,” said Sipper, citing coffees, exotic juices and a popular diet chocolate milk drink as potential imports from WOW!’s portfolio. “Everything they do is just a little different, from the packaging to the taste profile.”
The investment comes in two parts: a $25 million equity investment, and a $15 million five-year loan. According to a press release, the funds will allow for the expansion of production lines, improvements in operational processes and a strengthening of WOW!’s capital structure.
IFC has invested $260 million in the agribusiness and food sectors in Brazil during the last four years. The company’s global portfolio for agribusiness in the fiscal year 2016 totaled $4.9 billion, with funds directed towards increasing production liquidity, improving logistics and expanding access to credit for small farmers.
In a press release, Luiz Daniel de Campos, Principal Investment Officer for Agribusiness for IFC Brazil, said: “This investment is aligned with IFC’s strategy for the food and agribusiness sector, which has a great potential for creating jobs and expanding access to quality food products in Brazil. WOW! Nutrition’s expected growth will create additional jobs and increase the demand for agricultural products from its supply chain.”
Sipper said New Jersey-based Cascadia has developed and executed marketing, operations, logistics and finance for WOW! in the U.S. since 2014. He told BevNET that Cascadia has been studying the market for WOW! products in the U.S. for over two years, and that IFC’s investment in the company will have a significant impact on the domestic market, particularly in growing distribution.
WOW! Nutrition first entered the U.S. market in March with Feel Good, a zero-calorie iced tea available in six SKUs. The brand is distributed in 800 stores in the New York City area through a partnership with Drink King, with plans to expand to New England and Los Angeles.
Sipper noted that while Cascadia would be bringing in products that have proved highly successful in Brazil, they would be adapted to better fit U.S. consumer preferences. Feel Good, for example, uses a different formula and redesigned label for the U.S. version.
“In Brazil, nobody cares about artificial vs. natural flavors,” said Sipper. “In the U.S., that’s very important, so we switched the formula for this market. It’s amazing that a big company would use different ingredients just for a different market.”
One Equity Partners, the former proprietary investment arm of J.P. Morgan Chase & Co., purchased a minority position in WOW! in 2012. Sipper noted that although One Equity Partners has since split with J.P. Morgan Chase & Co., they retain their investment in WOW!
PEOPLE MOVES
Beverage industry veteran Jason Camillos has left First Beverage Ventures to join BA Sports Nutrition, LLC, makers of BodyArmor, as Vice President of Strategy and Planning.
The move serves a reunion for Camillos and BodyArmor co-founder Mike Repole. They worked closely together for five years at vitaminwater, where Camillos was VP of Corporate Development and Repole was President and co-founder.
“I’m here to help the guys get to the next level,” Camillos told BevNET about the move. “The brand is in a great place and performing really well, and with that things are starting to move a lot faster.”
Camillos had served as Managing Director at First Beverage Ventures, the private equity division of First Beverage Group, since 2013. In that position, he worked with Nantucket Nectars founder Tom First, who also departed the investment firm earlier this year. Camillos had also worked with First at Nantucket Nectars.
Ryan Ziegelmann is the new General Manager for Starbucks-owned cold pressed juice brand Evolution Fresh. Ziegelmann, who was named GM in May, has been with Starbucks since 2010, where he started as VP of Finance, Global Marketing, Category and Strategic Pricing.
From 2012, he served as Vice President of Finance and Strategic Pricing for the Starbucks Global Channel Development segment, as well as region lead for Latin America CPG. Prior to joining Starbucks, Ziegelmann worked as Vice President of Sales Finance at WhiteWave Foods and a Sales Director at PepsiCo. A graduate of Colorado State University, Ziegelmann took over the reins for Evolution Fresh following the departure of president Jeff Hansberry in February.
Thomas Hicks has departed the Venturing & Emerging Brands (VEB) unit of The Coca-Cola Company.
Hicks, who was a senior vice president at fruit juice and soda brand Hansen’s Natural, joined VEB in June, 2015 following Coca-Cola’s acquisition of a 16.7 percent stake in Monster Beverage Corporation. Coca-Cola agreed at the time to absorb Monster’s non-energy drink portfolio as part of the deal.
After 13 years at one of the country’s highest-profile craft breweries, Dogfish Head CEO Nick Benz will depart the organization at the end of the year.
Brewery founder and chairman Sam Calagione will take over as CEO following Benz’s departure and, unlike other U.S. breweries that have recently gone through their own executive transitions, Dogfish Head will not look outside of the organization for a new CEO. Instead, the company has tapped a headhunting firm that will begin searching for a new president this week, Calagione told Brewbound.
“We are looking for someone who can be an awesome thought leader,” Calagione said.
Benz, who was named CEO just two years ago and previously served as the company’s COO and CFO, plans to spend more time with his family and travel throughout Belgium, Calagione said. He will also continue to consult with the company on a part-time basis in 2017, Calagione added.
Lance Dermeik has come aboard as Mamma Chia’s new vice president of operations. Dermeik joins Mamma Chia after eight years at Hain Celestial as director of contract manufacturing, where he oversaw operations on more than 40 contract manufacturers and 15 natural and organic brands. Prior to his tenure at Hain Celestial, Dermeik spent seven years as director of supply chain operations at Monster Beverage Corporation.
Meanwhile, former EVP of sales Matt Buckley has left Mamma Chia to join Caveman Foods, a marketer of “paleo-inspired” snack bars and jerky, as the company’s EVP of sales.
Organic cold-pressed juice company V+V Apothicaire announced Nick Mysore as its President/CEO. Mysore’s experience in the food and beverage industry includes senior leadership positions Dean Foods and ConAgra.
Nestlé Waters North America Elevated Antonio Sciuto Executive Vice President – Brands. Along with the new role, Sciuto retains his position as CMO.
ROAR Beverages has announced the hire of Lawrence “JB” Woodworth as general manager and national sales director. Woodworth joins the upstart sports drink brand from the spirits industry, having most recently served as regional sales manager at Edrington.
Bryan Crowley, the former president and COO of VeeV Spirits, has joined KeVita as the company’s chief strategy officer. As indicated on his LinkedIn account, Crowley, who led VeeV through its sale to Luxco Imports earlier this year, has come aboard “to head business strategy, human resources, product development and innovation for KeVita.”
Bottled chai and tea maker Bhakti recently hired Sarah Bird as CEO. A longtime veteran of the food and beverage industry, Bird takes the reins from Bhakti founder Brook Eddy, who now serves as chairwoman of the company’s board of directors. Eddy remains “involved in the vision, innovation and culture” of Bhakti, according to the company.
Bird joined Bhakti after year-long stints as chief sales and marketing officer at Three Twins Organic Ice Cream and chief commercial officer of Ecologic Brands, a manufacturer of paper-based bottles. In the 15 years prior, Bird was an executive with natural and organic foods marketer Annie’s Homegrown.
Eddie Pearson, a former executive with Boylan Bottling Co. and Reed’s, has joined guayusa beverage company Runa. Pearson, who has also held managerial roles with the Coca-Cola Co. and PepsiCo, comes to Runa after 2+ years at Boylan, where he was the company’s vice president of sales.
Bai Brands hired Michael J. Pengue as the company’s first chief strategy officer. Pengue has over 30 years’ experience in the consumer packaged goods space, half of which he spent with Nestlé Waters North America. He eventually became president of the company’s Business Units division.
NEW LIFE
Nawgan to Rebrand as INVIA
Now under new management, Nawgan, a functional brain health beverage, is being launched as a new brand, INVIA.
The rebranding of Nawgan, launched in 2009 by neuropsychologist Dr. Robert Paul, follows the acquisition of the company’s rights to market and sell the brand in December 2015 by Memory Sciences, a recently launched health and wellness venture from Eric Nelson and Chris Rebholz. Nelson and Rebholz own and operate a handful of businesses in Milwaukee, Wisc. ranging from fulfillment distribution to long-form direct response media, both of which will play an integral part in the relaunch and new iteration of the Nawgan brand. Paul remains involved with the brand as its founder.
In a call with BevNET, Nelson said the launch of Invia will be backed by a robust advertising campaign centered around a long form television infomercial to educate the consumer on the benefits of product. The revamp was led by San Francisco-based branding and packaging design agency McLean Design.
“There’s been a rise in products focusing on mental performance and we believe we’re in a strong position to define a category that’s not yet been defined,” said Nelson. “This is a product backed by solid, sound science and we want to make sure consumers are educated on the amazing ingredients in it.”
Whereas Nawgan was a supplement packaged as a ready-to-drink beverage, INVIA will transition the formula into a powdered stick format, a move Dr. Paul said will extend its use occasions.
“Portability for a functional product like this is very important,” said Paul. “When I’m traveling for work and I want to bring this product with me and function at my optimal level, it’s not as convenient to do that when carrying around 12 oz. cans.”
Other factors at play in the change in format reflect INVIA’s pivot to becoming a product with a focus on direct-to-consumer and e-commerce sales strategy rather than at retail (Nawgan has a presence in Vitamin Shoppe stores), shipping powders is considerably more cost efficient than shipping liquid.
“We’re taking what we’ve known to be a really powerful product and concept and marrying that with the most effective way to bring the product to market,” Paul added. “It’s now best in class, not only in ingredients, but in brand name, image, and personality, with a world class team to execute behind it.”
Whereas Nawgan had a collegiate consumer base and sat on shelves next to energy drinks, Invia will shift its target demographic to the “25-35-year-old busy, professionally-oriented adult.” It’s a shift, Paul says, that’s in line with consumers’ evolution from the energy category.
“We’ve been anticipating for quite some time that the energy market was going to evolve and mature and we believe that’s what’s been fueling the momentum and excitement of the brain space and mental performance supplement category,” Paul added.
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