Humm Kombucha is gearing up for a big year as the Oregon-based company prepares to move into a new manufacturing facility that will give it the ability to dramatically increase production of its fast-growing kombucha line.
In an interview with BevNET, Humm’s Chief Strategy Officer Eric Plantenberg said the company’s current 3,000 square foot space allows it to produce about 250,000 14 oz. bottles per month. Humm’s new 40,000 square foot facility will be capable of producing 1.5 million bottles per month at launch and eventually enable the company to double that output.
Much of the funding for the new facility came from more than $3 million in equity and debt financing raised from 24 investors, including board members, friends, family and local Oregon businesses, according to Humm co-founder and CEO Jamie Danek. The company is still seeking another $965,000, according to a Dec. 20 U.S. Securities and Exchange Commission filing. Plantenberg said that Humm is seeking to convert all of the recent investment into equity early next year.
The recently announced funding was the second round for Humm in 2016. Earlier, Humm reported raising $1 million.
“2017 is our year to grow nationally, so we [needed] more money to fund some larger initiatives,” said Danek.
Although much of the company’s current capital is going into the new facility, Platenberg said that Humm needs more for operational expenses; the company is planning to expand its operating staff and will be hiring 20 to 25 new employees next year.
The transition to the new facility comes as Humm is seeing growth in its retail presence. The company signed a deal with Target in September to sell four of its varieties in nearly 1,600 locations. Danek praised Target as an ideal partner to meet Humm’s national growth goals as the chain store works closely with the brands it distributes to help small companies succeed in-store.
Humm is also currently sold in select Kroger and Safeway stores, and will continue to expand distribution nationally in 2017, Danek said.
Plantenberg noted that many more retailers are reaching out on a regular basis to stock the brand as consumers continue to seek out functional beverages like kombucha.
“People are clearly interested in putting things that make them feel good into their body,” Plantenberg said. “Kombucha does that.”
Rollups: Acquired and Revived
Pure Steeps, a recently established subsidiary of tea conglomerate Harris Freeman, acquired the Oregon-based Kombucha Wonder Drink in November. Wonder Drink joins California-based cold brew company Secret Squirrel as the two inaugural brands under the Pure Steeps name. Financial details of the deal were not disclosed.
Wonder Drink founder and CEO Steve Lee told BevNET that he will remain with the company as the CEO of Pure Steeps.
“The opportunity to get involved with Harris Freeman and help create Pure Steeps was a real opportunity for me,” Lee said. “The acquisition was really a simple one. They bought the company and our whole small team joined their team. Now we’re in the process of building Pure Steeps.”
With a new owner comes a new look. According to Sai Chaluvadi, Pure Steeps’ vice president of R&D and operations, Wonder Drink’s redesigned bottle label emphasizes the brand’s American heritage, adding the slogan “Oregon Roots” to the top of each bottle and including an “Est. 1999” tag to communicate to new consumers that Wonder Drink is not at all a new brand.
Pure Steeps is on the move itself: between Secret Squirrel and Wonder Drink, it plans to move from 22 to 40 SKUs by the end of 2017, Chaluvadi said. The current pasteurized Wonder Drink line, sold in bottles and cans, will be relaunched as a prebiotic beverage with improved flavors. The first glimpse premiered at Fancy Food Show. The current “Raw” line has been discontinued and will be replaced with a new probiotic line which will be revealed this spring at Expo West.
Wonder Drink also sampled two new flavors of the pasteurized line at Fancy Food Show, both of which are set to debut later this year – Mint, Juniper Berry & Apple and Concord Grape.
In Secret Squirrel, Pure Steeps is releasing two cold brewed teas, Sencha Green and New Rwanda Black, with plans for future expansion as well.
“The way Harris Freeman looks at things is to create brands that are sustainable that can last 100 years strong,” Chaluvadi said. “It was always about people first. Identifying the right talent, nurturing them, helping them realize their dreams. And Pure Steeps in many ways is the same DNA.”
GT’s Becomes a Buyer
Millennium Products, Inc., the parent company of GT’s Kombucha, has acquired Tula’s CocoKefir, the maker of coconut-based kefirs and yogurts that are fermented with vegan probiotic cultures. Millennium Products founder GT Dave, told BevNET that he has long had a fondness for Tula’s products.
“I have an affinity for fermented foods which is not limited to just Kombucha,” Dave said in an email to BevNET. “I’ve been personally consuming Coconut Water Kefir for many years now and always knew it would become a part of our family of products. I was just waiting for the stars to align.”
Tula’s CocoKefir was founded in 2009 by husband and wife team Michael and Holly Larsen, who launched the brand after seeing the benefits that probiotic-rich foods had on their autistic daughter Tula. The Larsens claimed that Tula’s autism stemmed from a severe gastrointestinal condition and that fermented foods helped her overcome her health issues. Dave said that the Larsens’ “personal journey convinced me that we needed to work together.”
Following the acquisition, Tula’s Young Coconut Kefir drinks and its CocoYo yogurt were rebranded as GT’s products. Asked if they had also undergone a reformulation, Dave said that only that “the plan has been to preserve [their] high quality and integrity,” and noted that the Larsens are “now part of the GT’s Family.”
According to a company sell sheet, GT’s CocoKefir is made using young coconuts that are cracked at the company’s production facility in Los Angeles. The water is fermented in small batches using vegan probiotics and contains 15-30 billion active probiotics per 4 oz. serving. One major update to the formulation has been the removal of stevia, which Tula’s had used to lightly sweeten the beverage; it now contains no added sugar or sweeteners. Described by GT’s as a “Living Coconut Water,” CocoKefir is vegan, dairy-free and gluten-free and comes in three flavor varieties: Pure, Cacao and Matcha. The drinks are packaged in GT’s familiar 16.2 oz. glass bottle and have a suggested retail price of $11.49.
GT’s CocoYo is crafted using organic coconuts from Thailand. The company extracts coconut meat and coconut water at its facility and adds vegan cultures, and a hint of vanilla and stevia. GT’s promotes the product as a “fluffy and tangy yogurt-like treat.” CocoYo contains 15-30 billion active probiotics per serving and is made with no gums, fillers, emulsifiers, stabilizers, or preservatives. Packaged in a 16 oz. jar, the yogurt retails for $5.99.
The yogurt is the first food product marketed by GT’s, but it might not be the last, according to Dave.
“It’s exciting for us to play outside of the beverage aisle and we feel that this could be the beginning of a new frontier with our product offerings,” Dave said.
The products are currently sold at select retailers in California, and GT’s is aiming to expand distribution nationally.
Although the launch of GT’s CocoKefir and CocoYo was met with praise on social media, not everyone is pleased. In September Lifeway Foods Inc., which produces the leading brand of dairy-based kefir in the U.S., sued Millennium Products alleging that the company “misleadingly suggests” its kefir is made from fermented milk. Lifeway claimed that kefir is a dairy product “made primarily from the milk of cows, but can also be made from the milk of sheep or goats” and that “genuine kefir cannot be made from the non-dairy ‘milk’ or ‘water’ of plants, whether coconuts or otherwise.” Moreover, Lifeway cited a U.S. Food and Drug Administration definition of kefir as a “cultured milk” produced using dairy-based ingredients as further evidence that Millennium’s use of the word is false advertising.
The case had a relatively short shelf life; last Wednesday a judge granted Millennium’s motion to dismiss the lawsuit.
New CEO, New Cash at WTRMLN WTR
Christine Perich has become the new chief executive officer of World Waters, maker of fast-growing high pressure processed juice brand WTRMLN WTR. Perich is the former CEO of New Belgium Brewing, which she left in October after 16 years at the Colorado-based craft beer company.
The New York-based brand is coming off a banner year in 2016, in which it reported 300 percent growth and secured placement in over 15,000 retail locations nationwide. WTRMLN WTR also landed Grammy-winning singer and actress Beyoncé as an investor in May.
In an interview with BevNET, WTRMLN WTR co-founder and creative director Jody Levy explained that Perich’s experience in building brands would be an asset as the company enters a new stage in its development in 2017.
“As we are growing and scaling, it was time for new leadership that has experience growing a brand from this stage to where we’re at and onward,” Levy said. “I think that paired with Christine, who has an amazing passion for building companies and scaling culture. She obviously has a background in finance and has been an exceptional leader, and with that is this real understanding for mission-driven companies and how you grow both internally and externally with a mission and a strong brand culture.”
Perich, a graduate of Colorado State University, replaced company co-founder Kim Jordan as CEO of New Belgium in August, 2015. She is credited with helping the brewery transition to 100 percent employee ownership in 2013.
She began her career at New Belgium in 2000 and previously served as the company’s chief financial officer, chief operating officer and president.
The new CEO appointment follows the close of an additional $7 million capital raise for WTRMLN WTR, which Levy said came from a group that includes all of the company’s current investors.
Funding the REBBLs
Culminating a year of impressive growth, REBBL, makers of adaptogen-fueled herbal elixirs and tonics,
closed a $10 million investment round led by Boulder Investment Group Reprise (BIGR) in December that will allow for an expansion of marketing efforts. Zico founder Mark Rampolla’s Powerplant Ventures was also involved, as was John Foraker, president of Annie’s Homegrown, acting as an individual investor.
In a press release, Duane Primozich, managing partner at BIGR and a member of the REBBL board, said, “We’re thrilled by the opportunity to partner with REBBL. It is an exceptional brand with fantastic products, talented and experienced management, and a truly authentic mission.”
The new investment represents another chapter in the rapid ascent of the Berkeley, Calif.-based REBBL, launched in 2013 by former Bossa Nova Superfruit co-founder Palo Hawken. The brand uses adaptogenic “superherbs” such as ashwagandha, turmeric and reishi mushroom as the basis for its line of functional beverages made with coconut milk and sold in 12 oz. plastic bottles. The company introduced a two-SKU line of plant-based protein drinks in March.
REBBL secured its first capital raise outside of friends and family in December 2015, when Powerplant Ventures led a $4 million investment round that also included Primozich as an individual investor.
In the subsequent 12 months, the brand has enjoyed significant growth. According to data from market analysis firm SPINS, REBBL’s certified organic, fair trade and non-GMO elixirs are now available in 2,500 stores across the U.S. The company has more than doubled its revenue this year and closes 2016 as the best selling functional beverage sold in natural grocery stores in the U.S.
Speaking with BevNET, Sheryl O’Loughlin, CEO of REBBL, said that the brand’s strong performance precipitated this next round of funding, which will allow REBBL to focus on building the company.
“Entrepreneurs are constantly in this dilemma: they need to be focused on their company and support its growth, but at the same time, it’s so important to be outside and raising money in order to fuel that growth,” O’Loughlin said. “It created this dilemma where we truly can’t get back to what we should be doing, which is running the company. So we thought, ‘The company is growing and investing in the business is working, now let’s bring enough money to the table so we can truly focus on running this business.’”
A new study published in the Journal of the International Society of Sports Nutrition showed that Essentia Water, an ionized alkaline water with a pH of 9.5 or higher, was almost twice as effective at rehydrating adults who consumed it after a period of exercise-induced dehydration.
While only representing a small fraction of the total water category, ionized alkaline water brands have enjoyed growth in recent years, in part due to hard-to-prove claims of functional benefits such as improved athletic performance and helping the body fight disease. The new study is particularly notable because it examined the efficacy of Essentia in providing elevated hydration benefits versus neutral pH water and was published in a peer-reviewed scientific journal.
The randomized, double-blind study, which was designed by Dr. Ralph E. Holsworth Jr., a licensed doctor of osteopathic medicine and the director of clinical and scientific research at Essentia, and co-authored by researchers at an independent clinical research organization, used blood viscosity, or thickness, as an indicator of hydration in examining 100 adult volunteers (50 male, 50 female) between 25 and 49 years old.
Participants in the study exercised in a warm environment, including walking on a treadmill and riding a stationary bike, until they had lost two percent of their body weight due to perspiration, which is clinically defined as mild dehydration.
They were then randomized into two groups for a 120-minute period, during which one group received Essentia and the other was given a leading purified bottled water with a neutral pH level. Each individual within both groups was allowed to consume as much water as they felt appropriate to satiate their thirst during that time.
Researchers concluded that the group which consumed Essentia reduced viscosity by an average of 6.3 percent, as compared to 3.36 percent for those who drank the purified water. Other biometric indicators also recorded from participants during the study, such as plasma osmolality, bioimpedance and body mass, revealed no significant difference.
In an interview with BevNET, Neil Kimberley, VP of strategy and brand innovation for Essentia, explained that the study had been in the works for some time, and was motivated in part by a desire to understand why consumers who aren’t deeply versed in the science of hydration have responded so positively to the product.
“Essentia has been around for 18 years and we have 18 years worth of people writing to us and saying ‘I don’t know what it is about Essentia but I just feel better from drinking it,’” he said. “To some degree, our driving desire on this was trying to understand what was actually causing that. We believe that just that sense of hydration that comes from better acuity, from your body performing better, is really what comes from this. It’s just that we had no idea of a way to kind of put ourselves into that and say this is probably the marker that does this.”
Dr. Holsworth noted that there is not an accepted clinical definition, in terms of blood viscosity, for what would be considered normal levels of hydration – but that lower viscosity is indicative of increased hydration.
“It’s very specific to each person,” he said. “Blood viscosity is actually more consistent per person than a lot of other metrics, such as heart rate and blood pressure. But how effectively you are hydrated does reflect very accurately with how thick your blood is.”
Kimberley noted that, while the company considered the scientific results to be important, the results of the study would not have a major impact on the brand’s messaging or marketing.
“Our experience with Essentia is that the more scientific the approach is, the less people really understand about it,” he said. “We really want to have a ‘there there’ for somebody who’s looking for why this is a different product and why I should believe that you are different. We are using this more with public relations and on our website to make that connection.”
Kimberley said that while the brand would continue exploring potential research studies examining Essentia’s health benefits in the future, completing this particular project was most important.
“What we really wanted to do was do this the right way,” he said. “We wanted to make sure whatever our methodology and protocol was really matched up to what we thought our benefit could be and make sure we had the right protocol and the right people in place to analyze it and then the right peers to review it.”
Public health advocates’ campaigns against the soda business – particularly the Coca-Cola Company – spilled over into the courtroom in January in the form of two recent cases involving the world’s largest beverage company.
In a move that some experts have described as similar in strategy to the legal actions taken against the tobacco industry in the 1990s, a new lawsuit accuses Coke and CSD-friendly trade group American Beverage Association (ABA) of engaging in a 40-year “elaborate campaign of disinformation” to minimize the health risks associated with soft drink consumption.
The suit was filed in the U.S. District Court for the Northern District of California on behalf of the non-profit group Praxis Project in collaboration with consumer watchdog group the Center for Science in the Public Interest (CSPI) and the Public Health Advocacy Institute (PHAI), based at Northeastern University in Boston. The suit alleges that Coke and the ABA have violated the Fair Advertising Law by being “engaged in a pattern of deception to confuse the public” and public health officials about the links between regular consumption of sugar-sweetened drinks and health issues like obesity, diabetes and cardiovascular disease.
Furthermore, the suit alleges that Coke and the ABA specifically targeted children in advertising campaigns and that Coke executives knowingly made “material misrepresentations and omissions to the public” in the face of overwhelming scientific consensus about the health risks of frequently consuming sugary drinks.
The suit also claims that Coke and the ABA provided significant funding for scientific “front” groups, such as the Global Energy Balance Network and European Hydration Institute, that “are presented to the public as disinterested research entities but are or were actually Coca-Cola-funded and used…to more effectively misrepresent, suppress, and confuse the facts about sugar-sweetened beverages and their health dangers.”
Based in Oakland, Calif. and Washington, D.C., the Praxis Project’s stated mission is to engage in public health policy advocacy through partnerships with individuals and organizations on a national, regional, state and local level.
In October, The New York Times reported on findings published in the American Journal of Preventive Medicine that found a “pervasive sponsorship” between Coke and PepsiCo and over 100 national health organizations with influence over public policy that received substantial financial support from the two soda giants.
The plaintiffs are seeking a court order that would stop Coke and the ABA from denying the link between sugary drinks and obesity, diabetes and cardiovascular disease. Further action being sought includes ordering the companies to release all their research on sugary beverages, to immediately cease all advertising targeted at children and to fund a corrective public education campaign that would include placing statements about the dangers of sugar consumption on their websites.
In a statement on the group’s website, PHAI executive director Mark Gottlieb sharply criticized Coke’s past public statements equating calories from sugar-sweetened drinks to those from any other sources.
“Coke pays dietitians to tell consumers things like drinking Coke can be a healthy snack and pays scientists to deny that sugary drinks are linked to obesity and then suggests that the main cause of obesity is lack of exercise,” he said. “The hypocrisy of suggesting to consumers that burning calories through laughing can offset the harmful effects of drinking soda is no laughing matter.”
In a statement acknowledging the lawsuit, a Coke spokesperson said that the company takes its “consumers and their health very seriously and have been on a journey to become a more credible and helpful partner in helping consumers manage their sugar consumption,” citing the company’s reformulation efforts to reduce added sugar and promotion of smaller sizes. It also mentioned “transparently disclosing our funding of health and well-being scientific research and partnerships.”
New Products: Dang
In early 2016 coconut and onion chip brand Dang Foods received a minority investment from investment and incubation group Sonoma Brands in order to help the company scale. Apparently, some of it went toward innovation, as well, as the brand is launching a new look and a new line: sticky-rice chips.
The new chips will retail for $3.99 and launch in Sprouts nationwide, Whole Foods’ Northeast region and Raley’s in Northern California.
Dang founder and CEO Vincent Kitirattragarn was inspired to create the chips after tasting them abroad while visiting family. The chips are a popular snack in Asian; a retailer in the Bangkok airport told Kitirattragarn that he sold roughly 10,000 boxes a day.
Dang’s strategy and strength of adapting global favorites for the U.S. market made the chips a good fit
“That’s really in our DNA as kids of immigrants. We grew up eating differently than the rest of the U.S.,” Kitirattragarn said.
While the chips are custom made for Dang abroad in Thailand, the brand has taken numerous steps to appeal to the U.S. market. The binder in the chips is watermelon water; they are vacuum fried to use less oil, and they’re packaged in a pillow bag to more closely resemble potato chips. Unlike other American rice chips, Dang’s line uses whole rice, rather than rice flour.
Sonoma Brands’ founder and CEO, Jon Sebastiani, is bullish on the product line.
“[Dang is] perfectly aligned with consumer demand for clean labels and adventurous eating,” he said. “Snacking should be fun and good for you; no longer do we need to decide between one or the other. Dang delivers on both – offering a sense of discovery by putting an innovative twist on perfectly approachable ingredients.”
For the launch, Dang will focus on natural retailers and roll out to “progressive conventional” partners after six to 12 months. Demand has already been intense, said Kitirattragarn. In fact, Dang has already sold out of its entire stock of rice chips and won’t be able to bring more retailers online until March, he said.
The chips will also be the first product released under Dang’s new look, which was created by Hatch. In a drastic shift from the old look, Dang’s packaging emphasizes bright colors and the whole foods used in each product.
“It’s a bittersweet process for me because I helped work on the design for the original look. But what we realized after four and half years is that if we want to extend beyond coconut and onion chips, we need a brand system,” Kitirattragarn said. “We really wanted to make it applicable for all the channels that we are in…[and] each of these channels has its own challenges in how you design a [package].”
Campbell: New Innovation Approach
Over the past year, numerous big CPG firms have announced the formation of internal venture capital arms to work with and embrace entrepreneurial brands. And while Campbell Soup has launched such a division, Acre Venture Partners, the company’s other divisions haven’t lost the entrepreneurial spirit, either.
The brand’s C-Fresh division has launched Maio, a new mayonnaise-like spread, under its Bolthouse Farms brand. In a change from earlier rollout strategies, the line of three better-for-you, yogurt-based dips will be released in a small test market, rather than as a nationwide debut. Its early performance will influence the next steps for the brand.
“We have a team that’s focused on innovation that’s really inspired by entrepreneurs,” Carolyn Tao, VP of Marketing for C-Fresh Innovation, told NOSH. “We’re trying to take a few cues. I think one of the things that entrepreneurs do really well is get things out quickly and then test them and react.”
C-Fresh is releasing Maio at Safeway stores in Northern California. For launch, the line will be merchandised alongside refrigerated dressings and retail at $2.99.
Developing Maio took over a year. Mayonnaise was targeted as ripe for innovation because of consumer interest in refrigerated condiments and, Tao said, because mayonnaise is the largest condiment category, at $2 billion in sales a year. Another benefit to testing products on a smaller scale, Tao told NOSH, is the speed at which products can be released.
“One of the great things about incubation is that our goal is really to get a lot of new products out in the marketplace and see how they do,” Tao said. “There’s an expectation that not everything will succeed and that’s okay.”
Future product tests may occur in other parts of the country and with other retailers. Safeway was selected for this test in part because the retailer also has an interest in refrigerated condiments.
Tao said how else C-Fresh can embrace test markets and other entrepreneurial tactics is still being discussed.
“We’ve been really immersing ourselves in the entrepreneurial world,” Tao noted. “That was our inspiration and we’re trying to figure out how that works at a larger company.”
Dale’s: Top Six
Craft canned beer pioneers Oskar Blues Brewery led the aluminum revolution in 2002, so it’s no surprise that the Colorado-based brewery’s flagship release, Dale’s Pale Ale, finished 2016 as the nation’s top-selling craft can six-pack at U.S. supermarkets, according to market research firm IRI Worldwide.
That feat capped a year in which Oskar Blues shipped more than 200,000 barrels of beer, bolstered by the expansion of its production facility in Brevard, North Carolina, and the addition of a new brewery in Austin, Texas.
Across its three locations, Oskar Blues now has the ability to brew upwards of 500,000 barrels of beer annually, the company said in a year end review.
Collectively, Oskar Blues Holdings’ family of breweries – Cigar City, Perrin Brewing, Wasatch and Squatters – produced nearly 350,000 barrels of beer in 2016. Jai Alai IPA, made by Cigar City, was the second-best selling 6-pack of canned craft beer in 2016, the company said.
Among other highlights noted in the release, Oskar Blues said it added new distribution in Oklahoma, North Dakota, South Dakota and Montana as it filled out a 50-state distribution footprint in 2016.
Meanwhile, the company also started exporting its beer to Australia, the Netherlands and Belgium, and the brewery’s products are now being sold in nine international markets. The company expects to continue adding international markets in 2017 and will soon add distribution in Brazil and Japan.
The Colorado-born craft brewery also expanded its barrel-aging program last year, which led to national distribution of Barrel-aged Ten Fidy Imperial Stout in 19.2 oz. single-serve cans. For its taproom crowd, the brewery released rum barrel-aged versions of Death by Coconut and Ten Fidy as well as a Java Ten Fidy. Oskar Blues also released the first American craft beer 16-pack with Pinner Throwback IPA.
Two new year-round beers – Beerito Amber Mexican Lager and Priscilla White Wit Wheat – were also introduced, and the company launched limited-release cans of Passion Fruit Pinner IPA and Hotbox Coffee Porter.
Other highlights from Oskar Blues in 2016 included:
Crowlers, the 32 oz. to-go cans, were made available in more than 1,000 locations.
The company launched four new flavors of B. StiFF & Sons Old Fashioned Soda Pop as well as a brick-and-mortar location of Oskar Blues Fooderies’ CHUBurger/Hotbox Roasters Café in Denver’s River North District.
And the company’s nonprofit charitable organization, CAN’d Aid Foundation, raised $768,000, built and donated about 600 bikes to underprivileged children, donated 330,000 cans of drinking water to places like Flint, Michigan, during its water crisis and other good deeds.
Category Expansion: And Even More Breweries
For the third straight year, the Alcohol and Tobacco Tax and Trade Bureau issued more than 1,000 new brewery permits, bringing the total number of permitted U.S. breweries to a record high of 7,190 in 2016.
According to recent TTB data published by National Beer Wholesalers Association chief economist Lester Jones, the number of permitted U.S. breweries has tripled from 2,343 over the last six years.
The government agency issued 1,110 new permits in 2016, down slightly from the 1,142 new permits issued in 2015.
Permitted breweries include brick and mortar facilities and alternating proprietorships while excluding contract brewers. It also includes brewers who may have recently shut down their brewing operations but have not yet been “delisted” by the TTB.
As of December 31, 2016, California had the most permitted breweries in the U.S., at 927, and Washington, D.C., had the fewest with 13.
According to Jones, California’s 927 permitted breweries is “almost as many as the entire U.S. total of 974 permits in 1995.”
Similarly, the TTB counted 264 total permitted breweries in Florida last year, which is 14 more than the 1990 national count of 250, according to Jones.
On a national basis, there are now 2.2 breweries per 100,000 residents, up from 0.7 per 100,000 residents in 2010. And, at the state level, Vermont has the highest number of breweries per capita, at 11.7, followed by Maine (7.7), Montana (7.6) and Colorado (7.0), Jones reported.
“Around the country, per capita brewery measures in many states have more than tripled since 2010,” he wrote.
But as overall beer consumption continues decline, Jones said he believes the increasing number of permitted breweries will only create stiffer competition in an already crowded beer category.
“With continued declines in per capita consumption of beer on the books for 2016, this year’s beer market is gearing up for another highly competitive, innovative and dynamic battle for share for consumer’s mind, wallet and stomach,” he wrote.
Boston Beer: Recipe Changes
In an effort to halt a sales slide for one of its most popular flagship brands, Boston Beer Company has unveiled a reformulated recipe for Samuel Adams Rebel IPA that now features the popular Mosaic hop variety as well as a new grain bill void of caramel malt.
It’s the first time in Boston Beer’s 32-year history that the company has “significantly changed” the recipe of a flagship beer, according to founder Jim Koch, and it comes just three years after the product was first introduced nationally.
After debuting with strong revenues, sales of Rebel dropped 23 percent last year, according to market research firm IRI. That has forced Boston Beer to re-think how it would attack craft beer’s most popular style category: India Pale Ale.
The new Rebel IPA recipe will also include HBC 566, a proprietary hop variety developed with Perrault Farms, a Washington state hop breeder, as well as another experimental variety – HBC 682.
“Our new Rebel IPA is just starting to hit shelves now and we think drinkers will notice a significant flavor difference between the old and the new recipe,” Koch wrote to Brewbound in an email, noting that the Mosaic hop flavor is “predominant.”
Combined, the new hop additions will impart lemon, lime, orange and eucalyptus flavors and give Rebel IPA an earthy aroma, the company said in a press release.
“Our goal was to showcase the intricate aromas and flavors of hops, especially with new, experimental hop varieties HBC 566 and HBC 682,” Koch said via the release.
Boston Beer also altered the Rebel’s grain bill, brewing exclusively with a “special” two-row malt blend.
First test-marketed in 2013, Rebel IPA was originally brewed with Chinook, Centennial, Cascade, Simcoe and Amarillo hop varieties. Amarillo is the only hop no longer included in the new recipe.
Released nationally in 2014, Rebel quickly climbed market research firm IRI Worldwide’s list of top-selling craft brands at multi-outlet and convenience stores, ranking ninth with more than 1 million cases sold. Those upward trends continued throughout 2015, as volume sales grew more than 12 percent, according to the firm.
But stiffer competition from a growing number of small craft beer producers coupled with a consumer shift toward IPAs with tropical and citrus flavors led to steep declines for Rebel IPA in 2016.
Since 2014, the company has also created a number of Rebel line extensions, including Rebel Rider Session IPA, Rebel Rouser Double IPA, Rebel Grapefruit IPA, Rebel Raw IPA and, most recently, Rebel Juiced IPA, which is infused with mango.
Rebel Juiced, which also features Mosaic hops, will be released this month in cans and bottles for a suggested retail price of $7.99 – $9.99 per 6-pack, according to the company.
It’s worth noting that the amount of Mosaic hops harvested in Washington and Idaho grew 276 percent since 2014, according to recent data from the United States Department of Agriculture.
When asked if the decision to include Mosaic hops in the new Rebel IPA recipe was driven by an increasing consumer demand for its flavor and aroma attributes, Koch said test brews with the hop were the primary driver.
“Based on our experience with Mosaic hops and some recent single hop trials in our nano brewery over the past couple of years, we felt in combination with classic American hops and HBC 566 and HBC 682, that Mosaic really contributed to the bright tropical and citrus notes of Rebel IPA,” he wrote to Brewbound in an email.