Plus, Pepsi and Celsius make distro agreement adjustments͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ 
 
 
March 27, 2024
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In this issue of Daily Briefing

  • 🚚 Pepsi and Celsius Give and Get on Distro Agreement
  • 🦁 Expo West: ROAR CEO Talks $10M Raise
  • 🍸 High Society
  • 🌭 Hot Diggity Dog: 7-Eleven Unveils Big Bite Hot Dog Sparkling Water
  • ⛰️ Patagonia’s CEO Shares The Playbook On Preservation & Provisions

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📰 Today's Top Story

🌋 Ruby Exits ‘Rubyverse’ In Search of New Worlds (& Stores)

🌋 Ruby Exits ‘Rubyverse’ In Search of New Worlds (& Stores)

For Ruby founder and CEO Noah Wunsch, making the move to printed cans comes with plenty of momentum and optimism – and a bit of heartbreak.

“Having a sci-fi universe with a hibiscus volcano on the front of the can is something that I really love,” he said earlier this month, referring to the brand’s ‘Rubyverse.’ “I hate that it does not have that anymore. It breaks my heart in many ways.”

“But,” he adds, “I know that the step forward we're taking is… a real step forward in our evolution in our ability to kind of find new audiences too. And that's really rewarding.”

As the latest victim of a oft-repeated cycle for beverage brands, Wunsch and Ruby discovered that the differentiating factor that helped the brand establish a presence on-shelf in 2020 for its 12 oz. cans had become, in some way, an obstacle to further growth.

Across multiple rounds of retailer conversations and consumer surveys, the brand heard a similar refrain: the lovingly created ‘Rubyverse’ – the bright and loopy cartoon aesthetic splashed across its five SKUs, featuring the aforementioned hibiscus volcanos – just wasn’t “ready” for mass shelves, on top of being a tricky ask for a printed can.

The primary goal of the redesign (assisted by Flock Creative) was to simplify Ruby’s core proposition of hydration with clean ingredients and clearly emphasize its flavor range, which was previously indicated via color cue.

In other words, the callouts to electrolytes and ’enhanced hydration’ are still there, but slightly in the background. The changes were made with existing partners – including Whole Foods, Earth Fare, Thrive Market, Erehwon and Lawson’s – in mind, and to offer a path towards more broadly accessible channels.

“The messaging is more macro,” Wunsch said. “At the end of the day, we are a sparkling water first and foremost, with hydration as a benefit.”

On the back end, Wunsch said the time is right for Ruby to realize the “considerable savings'' of moving into printed cans; SRP is currently $2.49 - $2.99 per can ($32 per 12-pack on Amazon). Those savings will be passed on to the consumer at some point, with the caveat that the brand is “really focused on how we can be profitable at this stage,” he acknowledged. Expect the brand to continue leaning into hyper focused partnerships with creative-driven brands like Brooklyn hospitality space Public Records or boutique cinema chain Nitehawk.

Four years after its launch, Ruby remains unique in its focus on building around hibiscus, though beverage products featuring the flowering plant as an ingredient continue to proliferate. That may mean more potential competition for Ruby, but it also suggests that those exploding hibiscus volcanoes can be quietly retired.

“The cool thing is that the conversations we have are way more about the understanding that this is its own category,” Wunsch said. “We have buyers that we meet at trade shows who say ‘I know hibiscus beverages,’ whereas it used to be ‘I already have XYZ hibiscus-flavored beverage.’ Right now people are saying ‘I need a hibiscus beverage,’ which speaks to it as a key ingredient rather than a flavor. And that's really, really awesome to hear.”

 

👉🏼 What You Need to Know 👈🏼

🚚 Pepsi and Celsius Give and Get on Distro Agreement

Has Celsius become too successful in the Pepsi system? We know that the brand continues to grow and it's quickly become a billion-dollar business with Pepsi as its distribution partner. Thing is, the burden of handling a billion-dollar brand is a lot heavier on the distribution system than the $400 million or so that Celsius offered when it first went in – and that requires extra resources and incentives.

📝 To compensate for the perceived imbalance, Celsius and PepsiCo amended their distribution agreement on March 23, according to an 8k document released by Celsius yesterday, offering Pepsi incentives on sales of Celsius with adjustments for promotions. The specific terms weren't disclosed.

⛔ The 8k also referred to adjustments to a non-compete agreement that existed as part of the original distribution agreement. Brands or sectors covered in that non-compete weren't disclosed. 

💭 Those agreements may deal with brands in the performance or 'good for you energy' space, according to Kaumil Gajrawala, CPG Equity Analyst with Jefferies, who speculated in a note that "Our best guess is this prevents a transaction with Prime/Alani Nu."

 

🦁 Expo West: ROAR CEO Talks $10M Raise

🦁 Expo West: ROAR CEO Talks $10M Raise

Hot off a $10 million funding round backed by Factory LLC, hydration beverage producer ROAR Organic is ramping up with new marketing efforts and brand partnerships. To learn more about how the 10-year-old startup brand is seizing the opportunity in hydration beverages, BevNET senior reporter Brad Avery sat down with ROAR CEO Bill Lange at Natural Products Expo West 2024 for a discussion covering the brand’s retail strength, expanding distribution and new innovations across RTD and powder lines.

Watch the video on BevNET now

 

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🍸 High Society

High Times is a legacy name in cannabis publishing. Now the pot-loving periodical is bringing its expertise to the home bar with a new book, High Times Cannabis Cocktails: Seasonal Sips & High Teas for Every Occasion.

📚 The recipe book was written by Jamie Evans, founder of culinary cannabis blog and lifestyle brand The Herb Somm. According to Evans on LinkedIn, the book is intended for “beginners and experts alike” to “learn more about the wonderful world of cannabis beverages.”

🌱 The book arrives as interest in THC cocktails continues to rise, particularly as the mainstream market opens up for hemp-derived Delta-9 THC ready-to-drink brands.

🥃 Brands like Flyers Cocktail Co. and Pamos are also bringing the cocktail occasion format to RTD.

 

🌭 Hot Diggity Dog: 7-Eleven Unveils Big Bite Hot Dog Sparkling Water

Now you can have your hot dog and drink it too, thanks to 7-Eleven’s new Big Bite Hot Dog Sparkling Water. The unique flavor is part of the c-store’s new line of sparkling water, which also includes Lemon Lime, Green Apple, and Sweet Orange varieties and was crafted in partnership with Miracle Seltzer

👀 What exactly is the appeal of the frankfurter-flavored drink? Well, with the Big Bite Hot Dog Sparkling Water, consumers will no longer have to alternate between bites of a hot dog and sips of a beverage. According to 7-Eleven, more details on the unique product will be released on April 1 😉

🚗 In the meantime, the rest of the 7-Select x Miracle Seltzer lineup can be found at select 7-Eleven stores nationwide. Additionally, Lemon Lime, Green Apple and Sweet Orange are available for delivery via 7NOW Delivery with real-time tracking. 

 

🎙️ Now Streaming: Taste Radio

⛰️ Patagonia’s CEO Shares The Playbook On Preservation & Provisions

⛰️ Patagonia’s CEO Shares The Playbook On Preservation & Provisions

It’s not everyday that you get an opportunity to sit down with the CEO of one of the most influential companies in the world, so when given the chance to speak with Ryan Gellert, who has helmed pioneering outdoor apparel and gear company Patagonia since 2020, we jumped at it.

In this episode, the Patagonia and Patagonia Provisions team explain how food fits into the company’s present and future, why an esoteric ingredient is at the foundation of its innovation strategy and how leaders of early-stage and emerging brands can actively incorporate sustainability and environmental responsibility into their business strategies.

Listen to the full episode now.

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