Nestle's Goodbye to Fake Dyes And Hydration Litigation

0:05Monica Watrous:Welcome to the CPG Week podcast by BevNet and Nosh. I'm Monica Watrous, here with my co-host, Lukas Southard. If you're enjoying the show, please subscribe on your listening platform of choice. Now here is the latest in food and beverage industry news. Nestle USA has completed the removal of artificial colors from its U.S. food and beverage portfolio, marking a significant milestone in the company's broader effort to align with shifting consumer expectations around ingredients, transparency, and nutrition. In a post on the company's website, Nestle USA CEO Marty Thompson said it has fully delivered on a commitment it made last summer to accelerate the phase-out of synthetic dyes.

0:45Monica Watrous:The move comes as packaged food companies face mounting scrutiny from consumers, regulators, and advocacy groups over artificial food dyes. Nestle joins a growing list of companies reformulating products to remove synthetic colors in favor of alternatives derived from natural sources. According to Thompson, the effort required extensive reformulation work across multiple brands. He highlighted strawberry-flavored Nesquik products, which now use colors from natural sources, and said Nestle's food service division transitioned more than 20 vitality beverage offerings to natural colors within five months.

1:22Monica Watrous:The artificial color removal initiative is part of a broader portfolio overhaul that includes recipe reformulation, ingredient simplification, and expanded nutritional offerings. Thompson also pointed to products positioned around simple ingredients, including Natural Bliss Creamers, Libby's Pure Pumpkin, and California Pizza Kitchen frozen pizzas, which he said are made with no artificial flavors and a preservative-free crust. The update underscores how large food manufacturers are increasingly positioning ingredient changes, nutrition improvements, and transparency initiatives as competitive advantages amid growing consumer demand for cleaner labels and functional benefits.

2:04What stood out to me about this news from Nestle USA was that there was a lot of beverages included in this. And although beverages have not been immune to the artificial food dye debate that's been going on during the Maha movement. A lot of that conversation has been focused on food products, on sugary cereals and other kind of packaged food, whereas beverages tend to use some colors in there. And we haven't heard as much of that until this one.

2:40Monica Watrous:That's true. I think a lot of categories lend themselves to colorful appearances, you know, like cereal, like you mentioned, And candy is another big one. But if you think about sports drinks, that's definitely a segment that is known for colorful beverages. And we saw from PepsiCo that it is overhauling its Gatorade portfolio and moving away from some of those ingredients that consumers are seeking to avoid, including synthetic dyes. So you're saying there isn't actual blue raspberries around that we can use in our food dyes? It's not a color or a flavor found in nature, unfortunately. Turning to the powdered hydration category, LMNT, or as it prefers to be called, Element, is suing Oasis, a product rating app, over claims that Element contains, quote, over seven times the legal amount of lead in its electrolyte powders.

3:37According to the suit, filed in the U.S. District Court in Delaware, Oasis and its CEO, Cormac Hayden, failed to retract the information for 15 months despite privately acknowledging that its post was false and agreeing that it would be corrected. Oasis originally posted on December 16, 2024, that the unflavored element contains, quote, 27 ppb of lead, a statistic which reflected a bulk concentrate measurement rather than an individual single serving. The post cost Element a potential sponsorship deal, as well as led to a bevy of online social media posts that negatively impacted the brand. The Oasis post was not removed until May 21st, 2026, despite numerous back and forth correspondences between Hayden and Element CEO James Murphy, both on the social media platform formerly known as Twitter, as well as privately.

4:40However, less than 24 hours before releasing a statement retracting the December 2024 post, Hayden again published a new post that used the inaccurate data and called Element one of the, quote, worst rated lab tested supplements in 2026. Element is seeking a jury trial and a permanent injunction to remove all false and defamatory statements, including product scores based on that false information about the company from Oasis app, its website, and all social media accounts. Turning to another powdered hydration brand, up-and-coming stick pack maker Dry Water is targeting a goal of being in 41 ,000 retail doors by the end of this year.

5:27This would be a big accomplishment considering that Dry Water launched just over two years ago and has only really been in retail for about a year and a half. I spoke with the founder and CEO, Brian Appio, recently, and he told me that the brand has really found a niche among women, young families, and children. The Clean Label Hydration products use a proprietary dried fruit powder, which is resonating among consumers who are looking for the vitamins and minerals that come with fruit, but in a zero-added-sugar electrolyte stick pack. As it adds Target, Kroger, 7-Eleven, and Costco Canada to its footprint this year, the company is planning to refresh its packaging in order to simplify its message to wellness-seeking consumers.

6:14Dry Water is also planning to close a, quote, large Series A round sometime this summer.

6:21Monica Watrous:Speaking of fundraising, VMG Partners has taken a minority stake in collagen protein bar Stars and Honey. The$24 million growth equity investment is expected to accelerate the brand's omni-channel growth strategy and finance the expansion of its new 60 ,000-square-foot manufacturing facility. VMG general partner McConnell-Smith will join the company's board of directors as part of the deal. Stars and Honey was founded in 2023 by CEO Daniel Rainey and has built its platform around dessert-like flavors, all developed by its in-house flavor team and the company's vertically integrated supply chain.

7:00Monica Watrous:The new funding will unlock the operational infrastructure the brand needs to support scale in national retail. Stars and Honey has formulated 18 unique flavors of its flagship collagen bars and has more planned for the year ahead. The business grew 300 % in 2025 and is on track to reach$50 million in revenue this year as it expands beyond its direct-to-consumer roots. According to Smith, VMG Partners has invested in, quote, some of the most iconic bar brands over the past 20 years, which helped us very quickly recognize how special Stars and Honey is. And those brands include Kind Snacks and Quest Nutrition, among others.

7:39In yet more investment news, Bawe, a better-for-you agua fresca brand, has officially closed a$6 million seed two round. I first reported on the raise in January when the brand filed a Form D with the Securities and Exchange Commission, but the brand was still finalizing its investment group at the time. The Austin, Texas-based drinkmaker launched in 2022 and was founded as a way to bring a more modern appeal to the culturally significant beverage found throughout Mexico and Central America. Traditionally, Agua Fresca is sold on street corners and in restaurants, mixing fruit juices with sugar and water.

8:21Baui's sparkling Agua Frescas have between 40 and 60 calories with less than 10 grams of sugar. With its new funding, Baui is expanding deeper in its home market of Texas while also targeting more retail partnerships in California and Nevada. The brand is also seeking to grow its food service accounts by adding some veteran leadership that can help Bawe enter more on-premise doors, either as a mixer or a soda alternative. The brand appointed Eric Perkins as CCO and Zachary Taylor as its director of food service. Perkins served as a brand strategy leader at Cisco for over three years after managing brands at Kraft Heinz, and Taylor was a key food service account manager at Spindrift.

9:13Monica Watrous:And not the president of the United States. No, definitely not the president of the United States. Not that Zachary Taylor. No, no. He's long dead. It seems like in the past decade, we saw several Aguas Frescas brands coming to market, and some of those brands do not continue to operate today. One of them that stands out to me is Agua Bonita, which was using upcycled fruit, I believe, to flavor its beverages. And Coca-Cola also tried its hand at this trend with its Minute Maid brand. And it seems like there's a lot of interest in a product like this. It's a very culturally relevant beverage for those who grew up in Latin America.

9:56Monica Watrous:So I wonder what it is that Bowie is doing differently and how it's continuing to gain traction while some of its competitors have receded. You're so right, Monica. There have been a lot of attempts at doing an RTD version of Agua Fresca's. I think what's interesting about Bowie, and this is something that its founder and CEO Victor Guardiola had told me was that the brand doesn't necessarily have to be regarded as an agua fresca. For some people, it's just a sparkling fruit-based, fruit juice-based soda. For others, it's an agua fresca. For him, he's a first-generation Mexican immigrant, and it was really important for him to found this brand in a kind of lower sugar formulation.

10:44and so it was a little bit better for you, but it also does use organic cane sugar and he's not using alternative sweeteners. It's fruit juice, sparkling water, and sugar for the most part. And I think having that kind of better for you identity that is culturally significant and does resonate with Latin American communities is important, but it also can just be a better for you soda. I think one other thing that has been interesting about Bowie that I've noticed and that we did talk about was the fact that it didn't try to grow too quickly. It stayed pretty tight within its Texas market and has expanded a lot throughout Austin, especially where it was founded and has a big following within its home city, but also into the other kind of major cities of Texas, San Antonio, Dallas, Houston, and lining up partnerships with like HEB.

11:43It's now spreading and focusing a little bit on California, especially in Southern California at first and into other cities that have large Latino populations. But it's not trying to be everywhere. I know Victor had told me they are in technically about 44 states, but really the bulk of their distribution is Texas and now kind of the West Coast of California.

12:09Monica Watrous:Insiders can read more about Bowie and its funding at BevNet.com. Here are some other notable bits of news from the week. Xevia has named board member Alexander Roberti as president and chief executive officer amid its continued corporate turnaround efforts. The Campbell's company is expanding its reach in the growing gluten-free category through a new partnership with Bonza, marking the first time the over 150-year-old company has launched a gluten-free version of its condensed chicken noodle soup. And finally, just six months after its direct-to-consumer debut, children's snack brand Kaduts is launching nationwide at Target.

12:50Monica Watrous:For these stories and more, become an insider at 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.