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Bevscape: The Latest Beverage Brand News - BevNET.com


Bossa Nova Recruits Neil Kimberley to Steer Relaunch as Functional Sparkling Brand

Seventeen years ago, Bossa Nova helped create the market for acai juices in the U.S. Now, its founder Alton Johnson – working alongside beverage industry veteran Neil Kimberley, himself fresh off a nine-year stint as Chief Strategy Officer at premium water brand Essentia– is bringing the defunct brand back, although this time it will be dancing to a different beat.

Bossa Nova relaunched in August online and in California retailers with a line of functional sparkling waters made with plant-based ingredients like acerola, acai berry, dragonfruit, yerba mate and lotus flower. The seven-SKU line is built around various functional benefits including Immunity (Orange Acerola), Thrive (Raspberry Acai), Recover (Limelyte), Protect (Mango Dragonfruit), Energy (Lime Yerba Mate), Renew (Pinot Grape) and Relax (Pineapple Hop). Each 12 oz. can contains 5% fruit juice and sells for $29.99 per 24-pack online.

Johnson, who is serving as CEO, recruited Kimberley to serve as Bossa Nova’s president earlier this year, after the former Snapple exec bowed out of his role with Essentia in July, having helped build the company into a category leader and guided its exit to Nestle Waters North America in last year.

“I’ve been fascinated by the sparkling water space for a while,” Kimberley told BevNET in a call in August. “I came from Snapple, which is a flavor-oriented business, and then ended up at Essentia, which is very much about package, pricing and location in store. So I was always really intrigued by how you can merge together water concepts with the flavor experience that I’ve had.”

Johnson originally founded Bossa Nova Beverage Group in 2001 after learning about the health benefits of the acai berry; a bottled juice line didn’t hit stores until 2005 but made waves as the first RTD acai beverage in the U.S. The brand was later acquired by Beverage Holdings LLC in 2009 and placed in the same portfolio as Sunny D. Two years later, Johnson left the brand and the beverage industry altogether, making a career move into real estate. Without him steering the ship, Bossa Nova struggled under a mismatched brand management strategy and ultimately was taken off the market.

In 2017 Johnson said he was approached with an opportunity to repurchase the IP and, inspired by the growth in the sparkling water category, he began working on the new product lineup with plans to relaunch the brand as a whole new company.

Johnson told BevNET in a separate interview that he has been working full-time on the new Bossa Nova for about four years, attempting to fill what he sees as a white space for low calorie, plant-based sparkling beverages. While there have been a number of functional sparkling water entrants over the past few years – including brands like Recess, Good Idea, Limitless and Soulboost, among others – Johnson said he believes Bossa Nova provides “a more elegant,” plant-based solution for consumers.

In particular, Johnson said Bossa Nova will be a more affordable option with a focus on breaking out into mainstream channels; “The plants have the ability to shine without it being a $2.99 premium single-serve,” he added.

While recent years have seen several relaunches of nostalgic legacy brands like Slice and Clearly Canadian, Johnson said he isn’t aiming to invoke the memories of the old Bossa Nova acai juice so much as he’s bringing the brand into the present day while remaining true to its platform of plant-based nutrition.

Beyond Kimberley, Bossa Nova has also hired another Essentia veteran: Patrick Katchak, formerly the director
of national accounts – Central Division for the premium water brand, as its new VP of national accounts. The company has also hired a CMO with beverage industry experience, Johnson said. Zolezzi Enterprises CEO and founder Anthony Zolezzi has also joined as a co-founder and board member. The company is currently raising a friends and family funding round. According to Johnson, Kimberley will play a vital role by overseeing much of the operational strategy and he is currently working to establish a distribution network for the brand as it rolls out to stores this month.

“Neil Kimberley, he is who he is and I thought he was the ideal partner to be the yin to my yang. I’m the product guy and I want to connect with consumers with this culture of plants with benefits,” Johnson said.

Kimberley said he is targeting small tastemaker retail chains to seed the brand’s brick-and-mortar presence, eyeing stores like Erewhon, Fresh Thyme, Earth Fare, Harmons and Molly Stones. Currently, he said Bossa Nova is in its “tweak process,” where the company will closely monitor early performance to ensure the packaging, formulation and communications are resonating with shoppers, before making a strong push into conventional channel outlets.

This new venture also places Kimberley in unfamiliar territory – startup culture. Although he played a pivotal role steering Essentia to its exit to Nestlé last year, the brand was already 15 years old when he joined the company. Now, Kimberley said he hopes the team’s broad beverage industry experience will help shorten the growth curve for Bossa Nova. But despite starting from the ground up, he said he’s looking forward to confronting the challenge.

“We used to say at Essentia that every year you stood at the bottom of the mountain and looked at the peak and wondered if you could get there. This is that, but I guess 10x right now,” Kimberley said. “So we’re standing at the bottom of the hill, looking at the top of the mountain trying to figure out ‘Okay, how are we going to get up there?’ And that’s the exciting part at the end of the day.”

Lance Collins, Mike Repole Reunite to Launch RTD Tequila Cocktail Casa Azul

With tequila and ready-to-drink (RTD) cocktails becoming two of the hottest alcohol categories, Lance Collins is looking to have a hand in both.

As the founder and chairman of tequila soda brand Casa Azul, launched in August, the beverage mogul behind Fuze,
NOS, BodyArmor and Core is confident his new line of tequila soda will hit the sweet spot for consumers of spirit-based canned cocktails who enjoy the low-ABV and low-calorie qualities of a hard seltzer.

Collins, whose other beverage endeavors have reached stratospheric success, is positioning the 12 oz bright blue can in opposition to ranch waters or canned margaritas that use malt liquor by framing it as a product with a simple ingredient list. The 5% ABV sodas will come in four flavors and are made of sparkling water, tequila, natural fruit flavors and agave nectar.

“We’re reaching both hard seltzer drinkers looking for a premium offering, and canned cocktail drinkers looking for ease and convenience,” he said. “People want real spirits and quality ingredients, but also something that’s easy to drink anytime and anywhere.”

This is the first alcohol-based release from a team of beverage industry veterans whose latest innovations have made their marks in the wellness and energy drink categories. Former Glaceau president and BodyArmor chairman/co-founder Mike Repole joins Collins as a co-chairman of the board, along with Bryan Crowley as board director and interim president. Crowley brings over two decades of building and accelerating brands like AB Inbev, Pabst, and VEEV Spirits.

NOS Energy Drink, part of FUZE, and BodyArmor Super Drinks sold to the Coca-Cola Company in 2007 and 2021 respectively, with BodyArmor, which Collins co-founded with Repole, ranking as the beverage giant’s largest acquisition at the time at $5.6 billion. Core Hydration was acquired by Keurig Dr. Pepper in 2018.

By bringing tequila into the mix, the founder is hoping to capitalize on the agave spirit’s upwards trajectory. Tequila was the second-fastest growing spirits category in 2021 according to the Distilled Spirits Council of the U.S. and canned tequila 355ml offerings increased share from 7% in 2019 to 31% in 2021, according to the IWSR. Casa Azul’s tequila is produced in Jalisco, Mexico, with the product crafted and canned in the U.S.

“It’s a broad audience because we’re bringing real Tequila to the party, but still offering something that’s low on calories and carbs and sessionable for daytime drinking,” he said.

The brand will join low-ABV tequila RTDs on the market such as Onda and Crook & Marker that also tout low-sugar and real ingredients, as well as canned line extensions from established names like Hornitos and Tequila Cazadores.

Throughout the year the company will be announcing “exciting celebrity and influencer partnerships” according to Collins, and has plans to continue to expand the line in 2023.

All flavors will be sold in single flavor 4-packs and a variety 8-pack with two of each flavor, an increasingly popular format for RTDs. The suggested retail price is $12.99 for a 4-pack.

The beverage initially launched with national distributor RNDC and was first available in California, Colorado, Texas, Georgia, and Florida. Plans to roll out in Mexico are also in the future.

Electrolit Names Christian Patiño Webb as CEO

Hydration beverage producer Electrolit has named former Red Bull senior director of marketing Christian Patiño Webb as its new CEO.

Patiño Webb comes to the company from Unilever, where he served as VP of marketing for SmartyPants Vitamins. He began his career at Procter & Gamble where he spent seven years, moving up from a finance and sales intern to become an associate brand manager for Herbal Essences. He later held executive level positions at Natural Hemp Company and Brandable, as well as spending five years at Red Bull.

“It is an exciting opportunity to lead a brand with the legacy and momentum that Electrolit has and even more with the potential moving forward,” said Patiño Webb said in the release. “My focus for the company is to take the brand from a regional to a global landscape, becoming a talent incubator, and continue driving growth for beverage industry behind best in class innovation.”

A subsidiary of Mexico-based Pisa Pharmaceuticals, Electrolit was originally created in the 1950s as a medical-grade rehydration solution. The brand launched in the U.S. in 2015, positioning itself as both a sports drink and a hangover recovery beverage, and has now established a nationwide footprint – in over 30,000 doors across the country as of 2020. the fourth largest brand in the U.S. sports drink category, up 103.8% to $309.2 million in retail dollar sales for the 52-weeks ending June 12, 2022. Comparatively, Powerade ranks directly above the brand, up 3% to $1.25 billion, but private label drinks trail behind it, increasing 66.8% to $56.6 million in the same period.

The brand has continued to target mainstream consumers through its marketing efforts. In May, Electrolit partnered with Mexican racecar driver Pato O’Ward for the 2022 season and mountain climber Juan Diego Martinez Alvarez. In June the company announced a new omnichannel campaign including TV ads, billboard, transit center displays, social media and influencers. The campaign intends to further Electrolit’s appeal to active consumers, featuring athletes and fitness enthusiasts.

Last year, Electrolit introduced a sugar free zero calorie line in Berry Blast, Lemon Breeze and Fruit Punch Splash flavors, intended to meet consumer demand for low sugar drinks.

Seth Goldman’s Eat the Change Raises $14.5M to Fuel Just Ice Tea Launch

Eat the Change, the healthy snack brand founded by Seth Goldman, has raised $14.5 million in new funding to support its expansion into the ready-to-drink tea category.

In June, Goldman announced plans to launch a new organic bottled tea line called Just Ice Tea under the Eat the Change platform after The Coca-Cola Company said it will discontinue Honest Tea, which Goldman co-founded and ran from 1998 to 2019. The new brand, Just Ice Tea, is intended to “fill the void” for a clean label, semi-sweet tea drink that Honest will leave behind when it is officially discontinued later this year.

According to the Washington Business Journal, which first reported the story, the latest financing round was led by Collaborative Fund and S2G Ventures, which combined contributed around $10 million. Collaborative Fund founder Craig Shapiro and S2G senior executive partner Walter Robb will join the brand’s board as observers. Additional investors include Honest Tea co-founder and Eat the Change board member Barry Nalebuff, tea suppliers and some Honest customers, Goldman told the publication.

Eat the Change is now seeking an additional $500,000 in financing to meet a $15 million goal, according to Goldman. The brand, whose core product lines include carrot chews and mushroom jerky, previously raised $4.5 million in March.

Goldman told BevNET in June that Just Ice Tea will launch with six SKUs. The financing will go towards expanding Eat the Change’s manufacturing operations to support the new line in addition to distribution. The company also plans to hire at least six employees in the near future.

According to Business Journal, Just Ice Tea was scheduled to begin a pilot run in August and the drinks will start rolling out to select Maryland stores in September, with two more national retail partners set to begin carrying the brand in October. About 1,000 stores are already committed.

On LinkedIn in August, Goldman hinted that the brand will have additional news coming but did not specify beyond that.

“With the snacks, we weren’t always getting our calls returned, just because it was more unknown,” Goldman told Business Journal. “With this, it’s known — and there’s an urgency on the customers’ part because the shelf space is opening up; just because Coke is pulling out doesn’t mean that the category, or the consumer, has disappeared.”

Class Action Alleges DFA Has Acted as Raw Milk Monopsony in Northeast

Dairy Farmers of America (DFA) is the target of a class action antitrust lawsuit filed in July, alleging the largest national dairy cooperative has acted or has tried to act as a monopsony by constraining the Northeast raw milk market.

The complaint, filed on July 29 in the U.S. District Court in Vermont, claims DFA has created a conflict of interest with its member farmers by expanding into dairy processing, withheld profits from its processing operations, and has moved to control the Northeast raw milk market through “predatory and exclusionary actions” by coercing farmers to become members through acquiring competing businesses and exclusive supply contracts.

According to the complaint, the alleged actions began at least on May 10, 2016 and add up to DFA creating a monopsony
– a single buyer market – for non-organic raw milk. That environment kept milk prices lower while simultaneously pushing competing dairy cooperatives “to the brink of insolvency,” allowing DFA to acquire the distressed organizations and further consolidate the market.

The lawsuit also claims DFA purchased milk hauling fleets that serviced non-DFA farmers and then withdrew services until those farms agreed to join the cooperative and also that it withdrew its fee-based marketing services from non-members as another tactic to force membership. DFA also allegedly sought to acquire processing facilities, removing more options for non-members.

Among the deals cited by the complaint are DFA’s 2017 purchase of Cumberland Dairy Milk Producers in Bridgeton, New Jersey; the 2019 merger of Vermont-based St. Albans Cooperative Creamery; its 2020 acquisition of defunct dairy conglomerate Dean Foods; and a 2021 exclusivity agreement with Wakefern Food Corp. to serve as the sole supplier for its Readington Farms branded milk bottling plant in White House, New Jersey.

While the alleged control would provide a challenge for independents in any sector of food and beverage, the suit notes the fast-paced nature of the raw milk market – in which cows must be milked twice daily and the product is highly perishable – poses a more urgent threat for these non-member farmers who “could go out of business within days or weeks if they cannot access a market for their raw milk,” the complaint states.

The Northeast region includes 11 states, including all of New England, New York, New Jersey, Delaware, Maryland and eastern Pennsylvania.

“The result of DFA’s anticompetitive, exclusionary, and predatory conduct is that it has reinforced and extended its monopsony buyer power over the Northeast market for raw milk (measured as a % of volume marketed), from approximately 40%-55% on the eve of the ClassPeriod to approximately 50%-60%,” the complaint states, noting that one report estimated DFA controls 85% of milk processing in the Northeast region.

In a statement shared to media outlets, Kristen Coady, SVP, corporate affairs for DFA, called the allegations “baseless and completely without merit.”

This is not the only antitrust lawsuit filed against DFA this year. In April, a class action filed in New Mexico made similar allegations against the cooperative for its actions in the Southwest region. The complaint accused DFA of conspiring with Select Milk Producers Inc. to “stabilize and depress pay” for member farmers through price data sharing and skimming profits. Two of the law firms involved in this new case – Hagens Berman Sobol Shapiro LLP and Lockridge Grindal Nauen PLLP – are also representing plaintiffs in that class action.

Notably, the Southwest lawsuit is focused on a specific conspiracy claim, while the Northeast case revolves around monopsony, despite the end impact farmers facing financial distress due to price control – being fairly similar. However, the different violations alleged in the two suits means decisions made by the court in one case may not necessarily impact the other.

Beyond that case, DFA has been a frequent target of antitrust claims and other lawsuits over the past decade with varying results. According to Lancaster Farming, “the co-op and other defendants agreed to pay a $159 million settlement with Southeastern farmers in 2013” and in 2016 a federal judge approved a $50 million settlement to be paid by DFA to Northeast farmers, however 116 of those farmers rejected the settlement and reached a new settlement in 2020 for undisclosed terms.

DFA also faced challenges in response to its acquisition of bankrupt dairy producer Dean Foods Co., which was settled for undisclosed terms in February 2021. Prior to that, the two companies settled a lawsuit alleging price fixing in 2014 for $350 million.

Last year a federal judge dismissed a lawsuit filed by farmers in New York asking DFA to be broken up. Also in 2021, DFA settled with the Maryland & Virginia Milk Producers Cooperative Association and Food Lion, who had sued the cooperative.

The lawsuits come at a time where the number of U.S. dairy farms has been in a decades long decline. A 2021 USDA report found 31,657 total licensed dairy producers in the U.S. in 2020, down 2,550 from the year before. Between 2003 and 2020, the total number of farms fell by more than 55%.

While the DFA cases deal primarily with non-organic milk, the issue has also impacted organic farms as well. Last year, Maple Hill Creamery and Danone-owned Horizon Organic both moved to terminate purchase contracts with Northeast family farms. In response, Stonyfield Organic announced it would invite impacted farms to join its direct supply program. Stonyfield co-founder Gary Hirshberg also founded nonprofit group Northeast Organic Family Farm Partnership to support the independent operations.

Meanwhile, Wisconsin-based cooperative Organic Valley is also making moves into the Northeast. In August, it announced 51 new member farmers in Vermont, New Hampshire, Maine and New York – its first partners from the region.

CENTR Grows Inside and Outside CBD With New Product, ‘Traditional’ Execution

In a category buzzing with noise, CENTR has been quietly waiting for its moment to roar.

Thanks to its eponymous CBD-infused soda, the publicly traded Vancouver-based functional wellness beverage brand has emerged from the pioneering days of CBD drinks as a fast-growing category player. According to data from Brightfield Group, in the first half of 2022, CENTR, which is sold in stores in 25 states, had 1.03% share of the U.S. CBD beverage market, a category projected to reach nearly $192 million in sales this year.

With wind its sails, the company is preparing to amplify its message in the coming months, investing in marketing and releasing a brand new non-infused product line.

“A lot of the investments that we’ve made over the past three years are ones that you don’t see,” said CEO Arjan Chima. “We are really investing in the retailers through traditional beer-style marketing and advertising because that’s what retailers get and understand.”

The brand itself was created by a small group that included Chima and Paul and Melissa Meehan; the latter pair are the founders of distillery and spirits business Goodridge&Williams, maker of NUTRL Vodka, which was sold to Labatt Breweries of Canada, a division of Anheuser Busch InBev, in January 2020. NUTRL has since been launched in the U.S. as a ready-to-drink vodka seltzer. Chima was involved in that business as Chief Commercial Officer in addition to his work at the Meehan’s marketing agency, me&ideas. He subsequently has held various roles at CENTR including Board Member, CFO and President before taking on the CEO role in June.

The brand’s success thus far has been based primarily on service and execution, partnering with independent retailers and driving traffic for its two-SKU line of sparkling soft drinks in 12 oz. cans. During the onset of the COVID-19 pandemic, Chima said the brand focused on independent groceries and c-stores, making the investments with those partners to keep CENTR on the shelf and in coolers. Healthy margins helped make their case; delivering 30mg of CBD for $4.99 per can, CENTR is more cost effective, even though Chima acknowledged consumers “aren’t there yet.” Consistent collaboration with retailers on promotions, temporary price reductions and ad buys “within their ethos and ecosystem” decreases the need for CENTR to constantly reinvest.

Whereas many startups seek out younger talent to handle field operations, CENTR sought experience, stacking the sales team with veterans from Red Bull, Gallo and across the beverage industry, which Chima said was invaluable in helping the brand become one of the first CBD drinks to be nationally distributed by Southern Glazer’s Wine & Spirits in April 2021, providing further market validation.

“It was sort of let us show you how we can do this together,” he said. “The conversations that we’ve had to convince the retailer and the distributor has been the experience on our team. Having done it from a top of the house level before and knowing how to invest properly in a brand, as opposed to just putting it on the shelf and letting it die.”

As for the product itself, CENTR is all about simplicity. The formulation uses a CBD isolate, rather than a full-spectrum extract. The can’s basic black and white design makes it more approachable for a wider age demographic, Chima argued, while focusing on a single, signature flavor available in regular (cane sugar) and zero-sugar versions with no natural or artificial sweeteners. That approach will continue as the brand creates more products.

“It’s kind of like how Red Bull just tasted like Red Bull before they started launching their other flavors,” Chima said. “For us, CENTR tastes like CENTR.”

And like Red Bull, the company has targeted c-stores as its primary growth channel. Along with brands like Kill Cliff (also distributed by Southern Glazer’s), CENTR is part of a cohort that is developing the segment as a path to bring CBD-infused beverages to middle income consumers that may not fit the yoga-and-wellness profile that other brands have attached themselves to. According to Brightfield Group, CBD-infused products generated $162 million in dollar sales in c-stores in 2021, with that number expected to rise to $193 million in 2022, or about 4% of the total pool. The channel represents around 19% of the $175 million CBD beverage market.

For other channels, CENTR has other products. The brand has showcased more dynamic flavors (Pomegranate Hibiscus, Cucumber Yuzu) in its three-SKU line of powder drink mixes, but Chima sees CENTR’s non-CBD drink Enhanced, set for launch in October, as a “game-changer.” The single-flavor sparkling product will feature adaptogens and nootropic ingredients aimed at promoting immunity, mood, focus and other functional need states, and will be available in caffeinated (Enhanced+) and non-caffeinated varieties.

It’s become something of a standard play for CBD beverages to release a complementary non-infused line that can seed brand awareness in a larger pool of retailers that would otherwise not be available; see Cloud Water, VYBES, Recess and others. That’s why marketing and educating consumers about why to choose CENTR will be critical in fueling its continued expansion. CENTR will spend “significantly” on marketing and advertising in this fiscal year, Chima said, by investing in influencers and media buys, as well as experiential wellness-themed activations.

“That’s what’s exciting,” he said. “I’ve been waiting for three years to really invest in the marketing side of it and now we’re going to spend a considerable amount of money in marketing to drive our online sales, brand awareness and really leverage influencer partnerships.”

That work will focus around marrying functional wellness with active lifestyles, not exactly a stretch in California where CENTR does most of its business. But the brand is also looking to take the overall category into new directions. CENTR is the first CBD drink to do a digital media buy with rapid delivery platform Gopuff, while Chima said CENTR Enhanced is in discussions with New York University to study how functional ingredients included in the product can impact e-sports performance.

“People talk about the scale of [the category]; now if you’re gonna invest in it, you gotta invest in it properly and take that long term approach, as opposed to that quick adrenaline shot in the arm and hope someone buys you out,” he said. “That’s not our play. Our play is truly to build a business.”

 





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About the Author: Eugene Berry