LAUNCHES OF NOTE
Cold Brew Goes Big
Starbucks has announced plans to launch its first bottled cold-brew coffee. The news was revealed as part of the company’s 24th Annual Meeting of Shareholders.
The new product will debut this summer and is an extension of the North American Coffee Partnership, a joint venture between Starbucks and PepsiCo to produce and distribute bottled coffee drinks, including Frappuccino and Doubleshot. Starbucks, which dominates the RTD coffee category with an estimated 97 percent market share, will initiate the rollout at select company-owned cafes nationwide and select grocery stores regionally in Western Washington, Western Oregon and Denver.
The coffee is made with “a premium blend of Latin American and African coffee beans, created specially to be brewed cold,” and is the same blend that Starbucks uses to produce cold brew iced coffee at its retail stores, according to the company. Packaged in a 9.5 oz. glass bottle, Starbucks describes the beverage as “a delicious, unsweetened coffee with a smooth taste and subtle chocolate notes.” It will have a suggested retail price of $3.29 per bottle.
FDA Warns Pressed Juicery
The U.S. Food and Drug Administration (FDA) has sent a warning letter to Pressed Juicery following an inspection of the cold-pressed juice company’s manufacturing facility in Fresno, Calif. and a review of its Hazard Analysis and Critical Control Point (HACCP) plan.
In the letter dated March 23, 2016, FDA district director Kathleen M. Lewis wrote that Pressed Juicery failed to meet requirements of section 21 CFR 120 of the Federal Food, Drug and Cosmetic Act and as such, its juice products “are adulterated in that they have been prepared, packed, or held under insanitary conditions whereby they may have been rendered injurious to health.”
Pressed Juicery, which operates its juicing facility in California’s Central Valley, sells its products at more than 30 brick and mortar locations across the West Coast. In 2015, the company made its East Coast debut in New York City.
While Pressed Juicery does not disclose its processing methods, citing proprietary methods, the named violation cites the company’s use of high hydrostatic pressure (HHP), a term the FDA uses interchangeably with high pressure processing. Over the past year, the FDA has taken the position that HPP alone is not an effective means of controlling the potential growth of C. botulinium spores in low-acid juices. In April, 2015, Columbia Gorge received a similar warning letter from the FDA. In December coconut water company Harmless Harvest was faced with a similar issue, eventually electing to end its use of HPP in favor of a new proprietary microfiltration process.
A second violation listed alleges the company has not accounted for all potential food hazards in its HACCP plan, namely patulin, a mycotoxin that can occur in apple juice from rotting apples.
Reached via e-mail, a spokesperson from Pressed Juicery provided BevNET with the following statement:
“Pressed Juicery is committed to providing safe products to our customers. We are confident in the safety of our products and take great pride in our track record. To date, we are not aware of a single verified incident relating to the safety of our products in the company’s history. We welcome the FDA’s input on further ensuring the safety of our products and are committed to addressing their concerns.”
SPRING BRINGS DEALS
Tio Pulls In Strategic Investment
Innovative bottled soup brand Tio Gazpacho has completed a $1.25 million Series A funding round led by 301 INC, General Mills’ business development and venture investing unit. Proceeds from the round, which was raised on equity crowdfunding platform CircleUp, will go toward new sales and marketing initiatives designed to expand placement and awareness of Tio Gazpacho’s high pressure processed, ready-to-drink soups. The company will also use some of the investment for the development of a new sub-line designed for conventional grocery and foodservice channels.
Tio Gazpacho founder Austin Allan began the search for new funding last year, initially targeting $500,000 for the raise. That number grew based on a revised business strategy for 2016 and additional interest from potential investors. Along with 301 INC, the round includes partnership with a fund managed by CircleUp — aptly named the “Growth Fund” — which matches other investments made through the platform. It also includes financing from a Miami-based investor and another company that Allan connected with through CircleUp; Allan declined to name the two parties and said that each wanted to remain unnamed.
Launched in 2014, Tio Gazpacho markets a four-SKU line of super-premium, organic fruit and vegetable-based gazpacho drinks. Leading with the tagline “no bowl required,” the products won acclaim for their high level of freshness and flavor and as conveniently packaged and healthy soups that span a range of use occasions.
Allan hopes to launch a new 10 oz. line in 2017 and envisions a price point of approximately $5 for the products. While the flagship Tio Gazpacho soups are primarily sold in natural grocers and retail for $8 per 12 oz. bottle, the smaller sized soups will be targeted for placement in conventional grocery retailers and foodservice outlets. 301 INC will be a key strategic partner in the development of the new line, with Tio leaning on General Mills’ knowledge and expertise in sourcing, distribution, marketing and operations.
Runa Racks Up More Celebrities
Actor Leonardo DiCaprio and top ranked tennis pros John Isner and Steve Johnson are the latest high profile figures to invest in Runa, joining a list of investors in the organic guayusa tea company that includes the likes of actor Channing Tatum, music producers Dr. Luke and Mike Dean and manager to the stars Coran Capshaw.
Gage said the company intends to allocate its new funds toward strengthening its consumer marketing efforts, a component of which will be putting Runa’s new investors to work. Gage said Isner and Johnson’s brand ambassador duties are still in the works but revealed that Runa will tap the two tennis stars to promote the product at this summer’s U.S. Open.
“The drink has become such an integral part of my everyday routine, and I’m excited about the opportunity to support such a game-changing brand.” Isner said in a press release.
Isner is no stranger to the beverage game, having been sponsored by Vita Coco in the past.
DiCaprio, meanwhile, has said he plans to donate any profits from his side of the investment back to the Ecuadorian farm community that grows guayusa.
CAVU Backs Health-Ade
Health-Ade, the maker of a fast-growing brand of organic kombucha drinks, has raised $7 million from CAVU Venture Partners, a recently launched fund focused on investment and incubation in healthy food and beverage companies. Health-Ade co-founder Justin Trout told BevNET that the funding will be used primarily for the build-out of a new 35,000 sq. ft. production facility in Torrance, Calif.
The deal represents the second major financing round for Health-Ade, which was founded four years ago by husband and wife team Justin and Daina Trout and close friend Vanessa Dew. In October, 2013, the private equity arm of beverage advisory firm First Beverage Group purchased an equity stake in Health-Ade.
CAVU was founded by a trio of high-profile beverage industry veterans: former vitaminwater CMO Rohan Oza, Sweet Leaf Tea and Deep Eddy Vodka co-founder Clayton Christopher, and Suja investor Brett Thomas. Health-Ade is aiming to raise an additional $5 million that will be to used to support continued growth of the brand once the new facility comes online. Trout said that the company has not yet identified a timetable for when it expects to close the round.
CAVU’s investment gives Oza a seat on Health-Ade’s board of directors, where he is joined by Daina Trout and First Beverage’s Bill Anderson and Tom First. Christine Perich, the CEO of New Belgium Brewing, is also a board director and has been involved with Health-Ade since “the very beginning,” Trout said.
DPSG Ups BodyArmor Stake
Dr Pepper Snapple Group (DPSG) has increased its ownership position in BodyArmor, investing an additional $6 million in the premium sports drink brand. The deal, finalized in March, took place approximately seven months after DPSG acquired an 11.7 percent stake in BodyArmor for $20 million. DPSG now owns 15.5 percent of the brand, and, as a result of the investment, is the second largest shareholder behind BodyArmor chairman and co-founder Mike Repole.
In a call with BevNET, Repole said that the $6 million will go toward new staffing and marketing initiatives.
Formulated with natural electrolytes, coconut water and vitamins, BodyArmor is marketed as a natural and better-for-you alternative to sports drinks that are made with artificial ingredients. Launched in 2012 by serial beverage entrepreneur Lance Collins, Repole, the former president of vitaminwater, joined the brand as a co-founder through early investment.
Bud Adds Backbone
Anheuser-Busch InBev continued its torrid craft beer acquisition pace with its April acquisition of Virginia-based Devils Backbone Brewing Company. Terms of the transaction were not disclosed and the transaction is expected to close in the second quarter.
The move is part of an ongoing march into the craft brewing world by the world’s largest brewery, which has acquired eight craft beer companies since 2011.
“While we are joining a creative group of craft breweries in the division, Devils Backbone will retain a high level of autonomy and continue its own authentic DNA within The High End framework,” brewery co-founder Steve Crandall said via a press release.
The latest craft brewery to join A-B’s growing portfolio of craft brands in “The High End,” Devils Backbone produced 60,000 barrels in 2015. The brewery expects to make about 95,000 barrels in 2016.
The sale of Devils Backbone had rapid aftershocks within the industry.
Devils Backbone co-owner Steve Crandall, who had served on the board of the non-profit Brewers Association and chaired the trade group’s market development committee, offered to resign the same day his company announced the sale to A-B.
Devils Backbone will still remain an associate member of the BA and continue to enter beers for judging at competitions like the Great American Beer Festival, but the company will no longer be allowed to vote on important association issues, according to the group’s bylaws.
Golden Eagle Execs Take Wing
A pair of former Arizona beer distribution executives have launched a new consultancy aimed at helping U.S. craft brewers and wholesalers with strategic business planning.
Kimberly Clements, the former owner and CEO of Tucson-based Golden Eagle Distributors before the company was sold to competitor Hensley Beverage in January, and her former vice president of sales and marketing, Daniel Lust, have formed PINTS LLC.
The new PINTS venture, short for “partners invested in transformational solutions,” intends to aid craft brewers with all aspects of distributor management, including contract negotiations, new market due diligence, go-to market strategies, portfolio development, sales training and logistics. The company will also provide retail and data analysis services, Clements said.
“We’ve found that some brewers don’t really speak ‘distributor’ very well,” she told Brewbound. “The business is changing so quickly and having a vision of where things are going and seeing the bigger picture is really important.”
Clements and Lust, who are equal partners in the new venture, will also work directly with wholesalers. The company’s first client is Hensley Beverage, Clements said.
Collins + Consumer
Equity and investment crowdfunding platform CircleUp and venture capital firm the Collaborative Fund have announced the launch of Collab+Consumer, a new fund on CircleUp for early-stage, mission-driven companies in retail, apparel, CPG and pet care. The fund, which totals $10 million, will invest $500,000 to $3 million per company.
“Many of our companies are excited about the prospect of finding strategic capital when they work with us – this partnership provides them with yet another partner that helps fill this demand,” Allie Rabman, a business development associate at CircleUp, tells NOSH.
Collaborative Fund provides seed capital for startup companies that aspire to change the world with disruptive businesses. Investors in the fund include musician Pharrell Williams, Zappos founder Tony Hsieh and Kiva co-founder Jessica Jackley. It has invested in food and beverage brands including Hampton Creek, Blue Bottle Coffee, Exo and Revolution Foods. CircleUp is an online platform that helps consumer brands seeking investment connect with and receive capital from accredited investors.
The relationship between the two companies has been ongoing. Collaborative Fund led CircleUp’s $30 Million Series C round in 2015 and its Managing Partner and Founder Craig Shapiro is on the company’s Board of Directors. Shapiro has a personal investment profile on the website and has invested in brands such as cereal and gardening company Back to the Roots through the platform.
The partnership comes at a time when many consumers are seeking to purchase more than just a physical product. The story behind the company and the values it holds are, in some cases, almost as important as the product itself. “When you think about what connects people to brands, part of that comes from the product itself, but a lot of it stems from an emotional connection,” Rabman notes. “If a brand is mission-driven, it is able to connect with consumers on a deeper level.”