Also Coke's Q4 Earnings͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ 
 
 
February 13, 2024
Bevnet
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In this issue of Daily Briefing

  • 💰Coke Beats Wall Street Sales Projections Despite North America Volume Dip
  • 🪫 Owoc Wins Temp Stay in VPX Bankruptcy Case
  • 🏈 These Cookies Won’t Quit
  • 🥊 UFC Signs Up Black Rifle As Newest Brand Partner

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📰 Today's Top Story

❌ What is the Neo-Prohibition Movement? Separating Fact From Fiction

❌ What is the Neo-Prohibition Movement? Separating Fact From Fiction

Is the American government trying to limit your booze intake or access? The short answer is no. But as spirits editor, I get the occasional press release about a neo-prohibition movement and I was curious about the origins of that claim.

Last summer, rumors that the Biden administration wanted to limit American’s drinking began making headlines, particularly in conservative publications. At the root of the story were comments made by Dr. George Koob, the director of the National Institute on Alcohol Abuse and Alcoholism, to tabloid The Daily Mail. Koob said that when the new USDA dietary guidelines are announced in 2025, if the U.S. were to go in any direction, it may follow Canada’s lead. 

That statement refers to the recommendations made last January that adults cut their intake to two alcoholic drinks per week by the Canadian Centre on Substance Use and Addiction. The current U.S. dietary guidelines, released every five years, recommend the same amount or less per day for men and one drink or less for women (sidenote: will the USDA also update their gender spectrum?) Those recommendations emerged around the same time that the World Health Organization issued a statement that when it comes to alcohol consumption, there is no safe amount that does not affect health. Not a great month for Brand Alcohol.

The 2025 U.S. alcohol guidelines are currently undergoing a committee and review process, although through separate efforts from the 2025 Dietary Guidelines Advisory Committee, which has caused some in the alcohol industry to raise concerns about transparency. Let’s note, however, that the USDA guidelines have come under scrutiny before, but specifically concerning the influence of big alcohol and food. No one from the Biden administration has confirmed Koob’s suggestion (and the HHS or the USDA didn’t get back to us). 

But the story fits among other rumblings since the pandemic of a neo-prohibitionist or neo-temperance movement. However, the rise of moderation trends and Gen Z’s sober tendencies are vastly different from temperance moments of the past that eventually pushed for legal restrictions. As one writer put it, our last prohibition took the wind out of the sails of any major temperance movement. 

Much of the language I’ve heard from non-alc brands has positioned products as options for moderation, not sober living. The data also shows that most non-alc customers are also alcohol consumers: in fact, just as bar-goers are switching from full-proof cocktails to zero-proof options, across the board, over 94% of non-alc buyers are also purchasing alcohol-containing beer, wine, and spirits, meaning these buyers add more value to total alcohol according to NIQ.

But Dry January and Sober October, as well as the fast-growing cannabis and (albeit small) adult non-alc category have put the alcohol industry on the defensive. Erlinda Doherty, a public policy expert and BevAlc consultant, points to the influence of those industries as well as the Surgeon General’s shifting view on cancer and alcohol as pressures that are leading stakeholders in the alcohol industry to “put together a more organized way to respond.” 

“There are several things that are concerning the industry that's causing or can cause negative impacts on the marketplace,” she said. “But what I'm mostly concerned about here is not so much people's personal choices, but the government overreach or obscurity of these things.”

DISCUS president and CEO Chris Swonger said the group is following the nutritional guidelines issue “very closely” and supports “an unbiased, transparent and scientifically rigorous process in the review.”

But even if new nutritional guidelines lead to larger policy shifts, it’s hard to imagine that the unintended consequences of last century’s “noble experiment” could be forgotten by policy makers—the loss of government tax revenues, the decline of restaurants and corruption. Also, bathtub gin martini just doesn’t have a great ring to it.

Ferron Salniker (fsalniker@bevnet.com) is BevNET’s Spirits Editor, based in Los Angeles.

 

👉🏼 What You Need to Know 👈🏼

💰Coke Beats Wall Street Sales Projections Despite North America Volume Dip

The Coca-Cola Company today reported Q4 2023 sales growth that beat analyst projections, boosted by price hikes and steady global demand that helped offset a volume dip in North America.

Here’s the overview:

📈The beverage giant reported Q4 net revenues grew 7% YOY to $10.8 billion and organic net revenue grew 12%, driven by 9% growth in price/mix and 3% growth in concentrate sales. For FY 2023, net revenues jumped 6% to $45.8 billion and organic revenues grew 12%. 

📉In the company’s North America segment, unit case volume declined 1% for the quarter, as growth in value-added dairy and plant-based beverages was more than offset by a decline in water, sports, coffee and tea

🤑Although a large number of consumers have been squeezed by inflation, Coca-Cola chairman and CEO told investors there is another consumer segment that still holds significant purchasing power

💭“We’ve seen strong growth for some of the high price point, premium segments like Fairlife, Core Power and Simply [...] so there’s clearly multiple things going on in the landscape,” said Quincey. 

Check out the full earnings recap on BevNET.

 

🪫 Owoc Wins Temp Stay in VPX Bankruptcy Case

The Chapter 11 bankruptcy case of Vital Pharmaceuticals Inc. (VPX), the former owner of Bang Energy, has been stayed by a Florida court after a judge granted a request from its founder and former CEO Jack Owoc, according to Law360.

📃 Owoc said he was denied tax documents related to the company’s ill-fated distribution deal with PepsiCo that he needs to help him defend a $163 million claim against the company’s debtors.

⚖️ The failed PepsiCo partnership has long loomed over the bankruptcy case. VPX’s liquidating trust has blamed Owoc for terminating the deal “without considering the ramifications,” but it is just one example of what the trust argues is proof Owoc is liable for the company’s failure.

⏳ The trust said it will get the documents to him within two weeks, but they don’t appear to be happy about it. In their response, they stated "Mr. Owoc's failure to disclose the ongoing document requests to the IRS has resulted in the unnecessary expense of time and resources by the liquidating trust and its professionals.”

 

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🏈 These Cookies Won’t Quit

🏈 These Cookies Won’t Quit

Sports nutrition brand Don’t Quit! has announced its latest protein drink flavor, Cookies & Cream, the company’s first designed in partnership with equity partner and Buffalo Bills safety Damar Hamlin.

🦬 Flashback to January 2023, Hamlin was hospitalized after he collapsed on the field from cardiac arrest in the middle of a game against the Cincinnati Bengals. He recovered and in July invested in Don’t Quit! before suiting up again for the 2023-24 NFL season.

🍪 CEO Mark French said Hamlin requested Cookies & Cream as a personal favorite flavor and was active in the R&D process. The flavor is now launching on Walmart.com and in Tops grocery stores in New York.

🔝 Hamlin will be heavily involved in a marketing campaign around the launch, with particular attention being paid to Tops, which French said was a go-to grocer for Buffalo Bills fans. Radio and social media ads, as well as in-store activations will be a part of the strategy.

Read the full story on BevNET.

 

🥊 UFC Signs Up Black Rifle As Newest Brand Partner

How do you keep the energy up while grappling and sparring in the Octagon? If it's not a can of Monster, it must be a hot cup of joe from the Black Rifle Coffee Company (BRCC). The coffee brand founded to support veterans and active-duty servicemembers is now the “Official Coffee of the Ultimate Fighting Championship” (UFC) after signing a multi-year marketing partnership with the mixed martial arts league.

👊 The deal entitles BRCC to be featured in every UFC event in the U.S., receiving placement inside the Octagon at every Pay-Per-View event, as well as brand integrations. BRCC and the UFC previously partnered last year on Veterans Day to raise awareness for the HunterSeven Foundation nonprofit which benefits the veteran population.

🔊 The UFC will also be introducing the Black Rifle Coffee Crowd Meter which will measure the volume levels inside the arena.

🫰 UFC has been on a tear signing beverage brands to marketing deals including PRIME last February, high-protein chocolate milk maker Slate in June and a number of BevAlc brands like Modelo, Monaco Cocktails and Wildcard canned vodka.

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