VP marketing AJ Bernstein told FoodNavigator-USA: “We dropped 1915 in February; it was combination of factors. When we launched it years back we had a pretty aggressive growth plan attached and the strategy that was laid out was ultimately not what was executed. We were also a little too late to market and didn’t act fast enough.
“They are great products but what we’ve seen lately in the juice category is that consumers are really looking for functionality; 1915 was meant to be clean and simple, organic, cold pressed, but they didn’t have that layer of functionality. What consumers are looking for now is health and functionality, so we have products like carrot ginger turmeric that are doing really well, Green Goodness and C-Boost, and our functional BOLTS shots.”
She added: “Sales of C-Boost were up 46% in one of our retail customers from Feb 28-May 18 vs the year prior, and we’re adding larger family sizes [ideal for at-home consumption] for our top sellers this year; some customers have also reached out and asked us if they can move them into displays.
“We’ve also reached new consumers as we’ve had a boost in the number of households trying our products.”
Immunity and wellness shots performing well
BOLTS - a new line of functional wellness shots - had only made it to a small number of outlets before coronavirus hit and retailers temporarily stopped onboarding new brands, but is performing well where it is on shelf, said Bernstein, “especially the immunity and wellness SKUs.”
CBD: ‘We’re working on creating a new strategy and figuring out a different way to come to market’
As for CBD-infused beverages, which Bolthouse had planned to launch in California earlier this year, the regulatory situation* has proved a bigger roadblock than COVID-19, said Bernstein, with products ready to go, but no movement either in California with bill AB 228 [which would allow the sale of ingestible CBD in the state] or at a federal level from the FDA.
“We’ve developed a really delicious line of products containing CBD and other complementary ingredients, but we’re still assessing the best way to launch those given the current regulatory environment. State and local government are really focused on other topics right now, so it has probably put us back by a couple of months.
"We had a market strategy, but that’s no longer feasible, so we’re working on creating a new strategy and figuring out a different way to come to market, whether it’s in a different locale or with a different type of retailer.”
Carrot sales “have been consistently really strong,” since mid-March, says Bolthouse Farms, citing a rise in home cooking and baking (carrot cake is a quarantine favorite).
‘COVID-19 has given everyone a reality check about how productive each item is on shelf’
As for retailers’ enthusiasm for new products, she said, “Many of our customers now are pivoting back to being future oriented. Some accounts even canceled orders of entire categories as they had to focus on keeping essential items in stock. But that has more or less leveled off now and our categories are being turned back on, by and large.”
She added: “COVID-19 has given everyone a reality check about how productive each item is on shelf, so there’s not a lot of tolerance for bringing new stuff in just because it’s new. New items have to have a real reason to be in the marketplace, and buyers are getting more demanding, rightfully so. If you’re bringing a me-too product, you’re just cluttering the shelf.
“We have had some meetings to talk about the future, what does the new normal look like? We’re going to innovate with some new plant-based items come fall that we’ll debut at the [virtual] United Fresh show in June. I think functional products are definitely what buyers are looking for more on shelf in our category.”
Promotional activity in stores beginning to return
As for promotions, about half of Bolthouse’s customers “just completely stopped promotions” but in the last three weeks or so, “they have begun to turn those back on,” she said.
*Most major retailers will not carry CBD-infused food & beverages until the FDA lays out a regulatory framework for these products. The FDA, meanwhile, says adding CBD to foods or supplements and introducing them to interstate commerce is not legal, but at the same time says trying to shut the market down would be a "fool’s game."
Coca-Cola 'rebalancing innovation pipeline;' Mondelēz 'simplifying the portfolio,' developing e-commerce-only SKUs
In virtual fireside chats with Nik Modi at RBC Capital Markets on May 27, executives at Coca-Cola and Mondelēz International suggested that COVID-19 had prompted retailers and big CPG companies to place greater emphasis on top-selling brands.
CFO John Murphy said: “I think there's more preference being given to category leaders to partner with retailers on solutions that work in the short term. We're seeing the leader brands in their categories getting more attention from retailers. We're seeing a heightened focus on streamlining and simplifying the supply chain. And we're seeing a falloff in the amount of small innovations taking place.
“There will be more demand from our customers for bigger more scalable solutions than to have a plethora of small exploration projects. So I think there's an opportunity in that regard to rebalance the innovation pipeline to deliver against that expectation.”
Mondelēz CEO Dirk Van de Put, in turn, noted that, “Across a number of categories there is this preference for trusted brands and manufacturers,” which he speculated reflected a desire to feel “safe” and “comfortable,” while CFO Luca Zaramella discussed “simplifying the portfolio.”
Both CPG giants described the pandemic as an inflection point for e-commerce, with Mondelez launching a number of SKUs exclusively for e-commerce channels and upping digital ad spend, and Murphy at Coca-Cola highlighting the “opportunity for companies like ours to become as good in the online shelf as we are in the off-line shelf.”