Artificial Intelligence and Slice Resurrected…Again

0:04Welcome to the CPG Week podcast by BevNet and Nosh, your source for the latest food and beverage industry News. I'm Monica Watrous, Managing Editor of NOSH, here with my co-hosts Brad Avery and Lucas Southard. If you're enjoying the show, please subscribe on your listening platform of choice. On the podcast today, we're discussing AI, granola, and the reinvention of a cult classic soda brand. But first, before we started recording, we were talking about the classic game show, Supermarket Sweep. Lucas, you started watching some reruns of that this weekend? Yeah, I somehow stumbled on a channel.

0:43I was staying at a little hotel and they had it was Supermarket Sweep 24-7. So I watched like three episodes and it really brought me back. The 90s era of game shows was great. But also that specifically was a show that I was for some reason obsessed with as a kid. I just love the idea of it. So Brad has never seen it. How would you describe it to someone who isn't familiar? So it was a game show with almost like Price is Right. They would choose three two-person teams were chosen from the crowd, and they were asked supermarket trivia or CPG trivia throughout the first two-thirds of the show. And then the big finale was the groups would go out into this staged supermarket and grab as much stuff as they could, basically.

1:32But it was very strategic about what stuff you grabbed was high value, and then they tallied it all up at the end of the game, and whoever had the most stuff won. But the joy of it for me was watching them run with reckless abandon through a supermarket and grab as much stuff as they could. I just thought that was a great idea. So you get to keep your groceries. Yeah, I get the feeling that all the groceries there did not actually have anything in it. Everything seemed really light. They always go for the turkeys or the hams, and they're just throwing these things into their cart. So I imagine they were styrofoam turkeys, maybe.

2:10It was all a lie. It was all a lie. They can just lie to you on TV like that. That's horrible. As a 10-year-old kid, though, I was just like, oh, look at all those turkeys. That's great. I'm into it. Well, I have grabbed some questions from an old episode of Supermarket Sweep to test your 90s CPG knowledge. are you guys ready we are gonna fail this but go for it i'm interested maybe not maybe not okay here's the first one you have to name this this is a slogan question regardless of all the other brands on the market when it comes to their product this company claims quote it's the real thing it's like a mayonnaise uh brand no this this oh it's on the tip of my tongue it's the real thing grape I know it's not right pepsi you're close lucas it's coca-cola I knew I knew it was a soda like I knew it was a drink oh this is hard I've got two more questions after the thanksgiving turkey the kids may fight over who gets this brand of salad dressing Newman's own I don't think that brand existed yeah no I think it was earlier than that salad dressings from then ranch well think about the context of the question after the Thanksgiving turkey the kids may fight over who gets this I told you I wasn't gonna be good at this I know.

3:47I was five years old when the show came out.

3:53I don't know. Hidden Valley Ranch. I know it's not right.

3:59Wishbone. Wishbone. Wishbone. That's a brand. Okay. Yeah, that makes sense. That makes sense. Okay. Well, we've got one more and I'm really hoping you guys get this one. Pressure's on. If not, our director and chief marketing and revenue officer, Mike Schneider, will come in with the assist. Okay. Naming their product after an employee's hometown in Massachusetts, the Kennedy Biscuit Company began producing these in 1892. Boston baked beans? Think about where you are. Cape Cod chips? Or I don't know, Brad, where are you right now in this moment? I'm in Newton, Massachusetts. Fig Newtons. Yes. Oh, my God.

4:52Oh, OK. Finally got one. All right. Yes. OK, well done. Or I don't even know if I can call what just happened well done. But nice try. And thank you for playing. That's more like it. Yeah. Moving on to the first topic of today's episode. Brad, you've been writing about artificial intelligence and all of its applications in packaged food and beverage. Can you tell us more about how brands are using this for their businesses? Yeah, so it's been pretty inescapable for several months now. The AI is everywhere. It's being integrated into all sorts of platforms online. And CPG in the food and beverage business is no different.

5:34Last month, I wrote a pretty large feature on Nosh about that. They're here. Nothing spooky about these real-world AI uses in CPG. I wish I could take credit for that headline. Credit goes to Editor-in-Chief Jeff Kleinman. Absolutely. So one thing that we're seeing is brands that are using AI for formulation. So Snackbrand Rivals is one example of putting a lot of investment into an AI platform for ingredient formulation. Before them was NotCo with their plant-based milks and plant-based meat alternatives. They are based in Latin America, and they've also had a proprietary AI system for identifying ingredients.

6:18This is one of the key ways that we're already seeing AI used in food and beverage. More recently this month, we've started to see some other updates from other parts of the industry. Progressive Grocer reported just a week ago that Erewhon has been improving its labor efficiency with an AI-powered workforce management program that is going to help them with scheduling, with payments. There's an app involved with it for the employees to use. So we're seeing this technology very quickly find its way into all manner of the back end. I think sometimes, though, where people get a little confused is you see the chat GPTs, you see the image generation, and then you have to ask the question of how is this being used in a way that's practical?

7:06Well, and you talk about using it to identify ingredients in recipes. Another example that you wrote about in your feature comes from Preem, which makes a low FODMAP pudding. And the founder of that brand was able to identify a key ingredient in the formulation. But then sometimes AI suggests putting glue in cheese. So it's not a perfect science, is it? that's a great point though because what we're seeing right now is google has kind of rushed out an ai powered search response and it's been giving people a lot of wrong answers a lot of very absurd answers and the one you alluded to was something someone really got which how do i make the cheese stickier in my pizza and it suggested putting some elmer's glue some some non-toxic school glue to get the cheese to stick.

8:02And these are the kind of issues that come up with generative AI, particularly with ChatGPT and Chatbot style programs. The engineers sometimes call it hallucinations, but it's more or less a mistake. I think someone traced that glue fact to a Reddit post and it just seemed to have drawn from there. And so that's something when we're talking about this higher end where it's your company on the line, you should be a little cautious of? Well, followers of BevNet and Nosh social media platforms also have seen how AI can contribute to product concepting. Our chief marketing and revenue officer and the director of this podcast, Mike Schneider, has had a lot of fun coming up with creative collaborations and flavor innovations for a lot of the brands that we write about and support in our community.

8:59I do think that's a good point, though, about envisioning products. And I do think some designers and some brands, particularly startup brands, are using, say, that image generation as just a way to test out ideas. I don't think anything that it produces is necessarily going to be ready to ship, although some platforms are saying that they can do that. But I do think it's an interesting sounding board. The Preem example, the founder there, she was trying to find a preservative that met all her needs about natural and health, and she couldn't get that answer from anywhere. And so she asked ChatGPT, and ChatGPT gave her, in this case, a correct answer.

9:39And it was one that she then went out and verified, and it was the perfect solution for her product. So those are little ways that if you don't have the investment to get a whole AI system up and running with big data sets, you can use some of these free programs in creative ways and scrappy ways that can give you vital information or just allow you to think through problems. But you still need a human touch because it's not perfect. I think so. I think there's a lot of optimists who see AI eventually not needing that human touch, but I still think at the moment you absolutely need that human touch.

10:22Insiders can learn more by reading your feature, Brad, at BevNet and Nosh, and tuning into the community call on the same topic. Moving on from a very high-tech concept to something that is quite low-tech, granola. So we've been noticing a lot of notable launches in this category recently, some elevated flavor profiles, chef crafted recipes, high protein, grain free, low carb, superfood ingredients. And that prompted me to look into the category and see what was going on. I wrote a story on Nosh called Category Close-Up, What's Up With Granola? What we learned by looking at SPINS data is the shelf-stable granola and muesli segment generated just over$1 billion in sales.

11:14And that was an increase in unit sales of 4.5 % year over year in natural and multi-outlet retail channels. We've seen a lot of dollar sales growth across a number of categories, but to see unit sales growth is saying something. we also saw social chatter about granola has increased nearly 24 over the past year according to taste wise so i'm just wondering why are we seeing so much activity in the granola category lately well i think granola is just something that everyone loves i personally love granola as the cereal uh maven of the of the team i put granola in my cereal mixes as you know but there's been a lot of new brands kind of getting into that.

12:02So Three Wishes is a cereal brand that launched its first ever granola in a line extension. It's a grain-free granola, and it comes in three varieties. We also saw direct-to-consumer wellness brand Chroma debuted a super granola. This is coming off the back of their super ramen. So they're adding in all these functional benefits to these products that people have grown to love and seem to be a pantry staple. And then also we saw Rhyne Snacks, which is not really getting into breakfast so much, but they did acquire Vermont-based granola producers, Small Batch Organics, and they've been integrating granola into their remixed snacks with their dried fruits.

12:50So they had a cherry cashew crunch remix that has little granola clusters in there as their new kind of snack variety. And I know that they have more innovation coming out this year now that they've taken over this granola manufacturing as their own manufacturing plant. Yeah, Monica, your story points out something at the end there that I think is interesting that we're seeing across pretty much all CPG is a lot more flavor innovation and kind of, I don't know, funky flavors is the right word. You know, smoky pineapple, sweet curry, magical, mystical matcha, salted chocolate tahini. I mean, these are interesting, creative flavors.

13:33And consumers are trying out different things. I mean, we see that as a limited edition offering in plenty of categories, strange flavors, new flavors, international flavors. So granola seems to be embracing that just as every other category is. Right. And we're also seeing some interesting new ingredients that are starring in some of these formulations. One startup has a buckwheat-based granola, and another uses tiger nuts as its hero ingredient. And Purely Elizabeth, which has been a leader in this segment, the top-selling granola brand in the natural category for over seven years, in January it unveiled its cookie granola, which is an indulgent fusion of breakfast.

14:14And actually, Purely Elizabeth just this week launched its first ever large-scale advertising campaign on the heels of that successful launch. That brand achieved 56 % year-over-year growth in the past quarter. So something's going on with Granola. One thing I'd love to find out is the consumer demographics now. I mean, we think about Granola as shorthand for that kind of earthy, crunchy person. Like Lucas. Yeah, like Lucas. So who are the people that are buying these new products? I mean, hey, I did go to school at Santa Cruz and grew up in California. So I guess I just have to live into that.

14:54He's hugged many a tree. We used to climb trees at Santa Cruz, actually. Another development that we reported on this week involves the acquisition and reinvention of a classic soda brand. What happened with that, Lucas? Slices back again. It was announced this week that Suja Life, the parent company to both cold-pressed juice brand Suja Organics and shopmaker Vive Organic, has acquired the trademark for the former Pepsi soda brand Slice. Suja Life announced in the press release that, quote, the relaunch of Slice will not just be an all-natural low-calorie soda, but one that delivers advantages of gut health with superior nutrition.

15:41So it seems to be a nod to the trend towards pre - and postbiotic soft drinks, and Suja appears to be getting into the gut-friendly soda game. So Slice Pop, I guess, would be maybe what we might see in coming months. it's worth noting that this is now the third time in six years that someone has announced a relaunching slice uh in 2018 a vc group tried to relaunch it as a zero calorie sparkling water kind of a spindrift variant with organic juice and the branding was totally different it was called slice but it looked like something totally different and then we didn't hear too much about that and then three years later in 2021 a different group announced they were relaunching it as like a classic style with branding that looked much more like the old 90s cans and it was a real soda and then we didn't hear so much about that and then now it comes out that suja has bought them so i think it's interesting that people keep relaunching this brand i mean it's worth remembering that slice began in 1984 and was discontinued by pepsi in 2005.

16:56so they're going to be relaunching a brand that for, there's legal adults who have never lived in a world with original slice. What is it about this brand and why do consumers want to embrace this, you know, an 80s soda brand in a new format and a new, you know, with new liquid and new branding? Well, I think you got to reverse the question is not why do consumers, it's do consumers want to embrace this brand? I mean, we all remember this product from the 90s, the 80s. You don't, Brad, but Lucas and I do. I remember Slice. He's not that much younger than us. He never saw Supermarket Sweep. I don't know.

17:40But I think the other interesting point is this is also Suja's second acquisition. Remember, in 2022, they bought Vive, and that gave them a real controlling share of the juice shot category. this is them now innovating through acquisition into soda and they've had success with their first acquisition let's see how their second acquisition goes yeah according to suja they control about 50 of the cold press uh juice shot category so they're not an insignificant player in the beverage, better for you beverage industry. And they launched a three skew line of plant-based protein at the beginning of the year.

18:24I just wonder if we need another gut health soda. We just saw from Bloomberg this week that Olipop has$500 million in sales. They're pretty much owning the category alongside Poppy. Why bring in another player? And with Olipop getting, you know, announcing they had$500 million in sales this year. It seems like it's overcrowded, but I think that means that there is a lot of demand for these products. And that's not to say that there couldn't be another player that could find a way into the gut health soda category and have success. I wonder if we'll see any other reinventions of brands similar to Slice that will be taking on modern attributes that are relevant to today's consumer.

19:19You know, I never got to try Orbitz. I've always wanted to try it. Someone should buy that and make it because I want to drink a lava lamp. Do you, though? I do. I'm curious. One brand that I would love to see come back in a healthier version now this might be before your time brad but do you all remember squeeze it's yes the little they were like kids drinks and they were in a molded like plastic almost like a like a soda pop glass bottle but it was plastic and it had like a figure on it i've had these i know what you're talking about it was basically just sugar water it brightly colored but i remember as a kid i wanted them so bad and my parents would never allow me to have them but i wonder if someone could bring that back in a in a healthy version like a kid's version i don't even know what that would be but i had those in my fridge growing up yeah maybe like i don't know i i actually would like to see like a alcohol application for that like put some like a squeeze it with like tequila yes oh wow now we're talking oh man we gotta you gotta cut this out cut this out these ideas are gold we can't just be putting these out there no we want somebody to make this for us brad yeah yeah we all know that getting into the beverage game is is very difficult so uh we're just throwing ideas out there and whoever wants to take them they can take them just send us samples of the boozy squeeze it's please boozy squeeze it's amazing here are some other notable bits of news from the week.

20:52How South 40 snacks scaled through a unique sourcing model. Inflation shifts consumer grocery sentiments and shopping habits. And a drink with Free AF founder Lisa King. For these stories and more, become an insider on BevNet and Nosh. That wraps up this edition of CPG Week by BevNet and Nosh. Thank you to our audio engineer, Joshua Pratt. Our director is Mike Schneider and our designer is Erin Willett. If you enjoyed the podcast, please subscribe on your listening platform of choice and we will see you next time.