Newtopia Now Insights And Beverage Investor Unrest

0:05Brad Avery:Welcome to the CPG Week podcast by BevNet and Nosh. I'm Brad Avery, here with my co-host, Lukas Southard. If you're enjoying the show, please subscribe on your listening platform of choice. Here is the latest in food and beverage industry news. Lukas, you just got back from Denver visiting Newtopia Now. How was the trip? The trip was great. This was my first Newtopia Now since they changed it from Expo East. This was actually the third Newtopia Now. It's a smaller show, which was kind of the big takeaway I got is that it felt very tight, which is what they were going for. There was a good mix of both beverage brands as well as food brands and then your supplements that we don't really cover.

0:47But But what did stand out was it is a lot of very early stage brands that are presenting there, some of which haven't even launched their products yet. So I talked to many brands that were on the cusp of launching in the next couple months or had launched in the last couple weeks. So you get a real sense of enthusiasm and momentum from these brands. And a lot of them were leaning into some of the same trends that we've been focusing on, both in food and beverage. Most especially, functionality and wellness was really the spotlight for the show. When it comes to the beverage side, functionality was taking the form of a lot of adaptogenic mushroom beverages.

1:32So I talked to Melting Forest, who's been in the game for a while, but they were showing off their new line of collagen drinks called Glow Up. It's a four skew line of still mushroom infused, but the focus was on beauty and the collagen protein that they had put in there. There was also a brand called Sequel. That's S E Q W L, I believe. And they're based out of Denver and they had a line of craft seltzers that all kind of played to different benefits and use different mushrooms for calming or for energy or brain health. Mushrooms were still definitely in play. Collagen was seen throughout. The ingestible beauty set is something that a lot of these brands are definitely leaning into, whether it's with biotin or other mushrooms or collagen.

2:27On the food side, there was a lot of the same kind of trends that we've been reporting on the last year most especially the thing that stood out to me was seed oil free products you had a lot of brands that were platforming on being seed oil free or were reformulating to take the seed oils out cactus foods was one of the first brands i actually talked to when i walked into the show and they make cactus tortilla chips and they were on the cusp of changing over their whole portfolio to avocado oil from seed oils. And when I talked to the founder there, they're talking about how this all just came out of feedback from consumers who love the product, but had told them that they wish that there was no seed oils used.

3:16So they switched up their formulation and they're hoping that that will continue to kind of drive momentum and velocity for the brand.

3:25Brad Avery:Now, these companies are avoiding seed oils. Are any of them going for beef tallow or are they finding alternatives beyond both seed and beef tallow? There was a lot of beef tallow there as well. It seemed like the positioning around beef tallow is less about we're not using seed oil, although that is part of it, but more about just the benefits of that clean fat. And I had more than one brand tell me that there's a growing demand you know, away from plant-based oils and into animal-based oils, which is kind of interesting in terms of how we've seen that trend adjust in terms of dietary preferences.

4:07Brad Avery:Last thought on Utopia, you haven't mentioned protein. Was that something that was present there at all? Or are we starting to see innovation drop off? Weirdly, there was no protein anywhere. No, of course, there was a lot of protein, a lot of the same kind of things that we've seen, protein bars, a couple protein shakes, definitely some clear protein beverages that I talked to. Nothing that really stood out as new and innovative, just more of brands really leaning into protein maxing and consumer demand for protein products. Well, you've covered Newtopia now for both BevNet and Nosh. Your stories are on both sites.

4:47Brad Avery:Listeners can check them out there. Going into the news of the week, a new report from the Acosta Group has found that U.S. grocery affordability has stabilized and improved since the high inflationary period of 2021 through 2023. But consumers aren't acting like it has. According to the Acosta Group's affordability tracker, although the average price of a stock-up grocery basket has risen by$78 since 2020, wage growth in that time has now outpaced the inflation. However, consumers are still prioritizing value brands, promo deals, and you're generally more discerning in their purchasing decisions than they were prior to 2021.

5:26Brad Avery:One factor at play may just be learned behaviors that have now embedded themselves in consumers. The focus on value has also coincided with changing standards and expectations around health and wellness, as we just discussed. Functional benefits and overall product quality also weigh heavily into decisions these days. Consumers, however, may still be willing to splurge, but they just need more justification in bigger expenses. That could come from functional benefits or premium positioning, but regardless, brands will still need to prove that a higher price tag is worth paying. Not mentioned in the report, however, are other economic stressors that are currently pinching consumers' wallets.

6:06Brad Avery:Grocery prices may have stabilized, but gasoline prices have not. They've surged this year after the U.S. attacked Iran, and leading to the closure of the Strait of Hormuz. And as grocery affordability has improved, U.S. inflation overall has spiked since March, peaking at 4.2 % in May and remaining elevated at 3.4 % in July. Yeah, this is an interesting report, Brad. I think, you know, the thing that stood out to me is what you were just talking about in terms of how this has impacted the supply chain. So we've been talking about for years, inflation in food prices. But I think what a lot of people don't understand is the supply chain in general is impacted, whether it's raw ingredients coming through places like the Strader Hormuz or finished products or even packaging material, all of this is really adding to that price.

6:57And those prices just trick... Yeah, and tariffs. And it all just trickles down to us as the consumers. And that's really what's driving this up. It's not any one thing. It's kind of the perfect storm, I guess, of all these things impacting what we see when we go shopping in the grocery stores.

7:18Brad Avery:I did also find the lack of discussion of other economic factors curious. Certainly, the report's focus is on groceries, but I don't think you can discount the impact that heightened gasoline prices have had on consumers or housing or other material costs. And so when it comes time to where can I save, I think the grocery basket is sometimes one of the best places because you can find those promos a lot easier. You can get the value brand. You can't really get value brand gasoline. Yeah. And as we've been reporting for years, that's just been represented in the amount of private label and store brands that have really launched into at least the major chains, but there is definitely a prioritization from the retailer perspective of offering brands and interesting products that are more in line with where consumer budgets are.

8:14Brad Avery:You can read the Acosta Group's full report online and our coverage of the report on Nosh.com. Hey, listeners! Fresh jobs are pouring into cpgjobs.com for the week of August 27th. from Craftsmith Beverage, D &V International, and Spill Foods, Inc. Mike Hess Brewing, Coast Beacon, and Owls Brew add opportunities. Find your next move and apply. Have an opening to fill? Reach operators, brand and sales leaders, supply chain pros, and retail buyers across BevNet, BrewBound, and Nosh. That audience means less wrong fit screening and more time with the right people. Post it at cpgjobs.com today. Use code TASTERADIO26 and save on your listing.

9:02Brad Avery:Your inbox should reflect the parts of CPG that matter to you. Choose from BevNet's seven free newsletters covering beverage, food, beer, spirits, careers, education, and more. Sign up and select your favorites at cpgmedia.com slash newsletter. Turning to the shareholder side of the business, a Xevia stakeholder is urging the Better For You Soda brand to seek an immediate sale of the business, arguing that the public company has missed the category that it helped to create. Canaan Wealth Management, which owns roughly 4 % of Xevia's outstanding shares, issued a public letter this month calling on the board of directors to immediately begin conducting a good-faith process with credible bidders.

9:48Brad Avery:Canaan believes that it can receive double the stock value of Zevia in a sale that would take the company private. This comes as Zevia is frequently trailed behind competing brands that are much younger, such as Poppy and Olipop in this modern soda segment. In the letter, they wrote, the category grew 83 % in a single year, 2024, to$1.8 billion, and its buyer base doubled to 44 million households. But in that same year, Xevia's net sales declined 6.8%. Now, in recent months, Xevia's sales have been rising. The company recently replaced outgoing CEO Amy Taylor with board member Alexander Roberti as president and CEO.

10:31Brad Avery:And the company's made a lot of strides towards driving growth. However, that's not resulted in earnings per share growth. And Canaan believes that there's more opportunity in exit than in staying public. We've seen a number of shareholders speaking out recently. So moving to the protein set, Simply Good Foods, the parent company of Owen, or only what you need, is in a bit of its own hot water with shareholders. A potential class action suit was filed last week claiming the Simply Good Foods leadership team had dropped the ball when integrating the protein shake and supplement brand Owen into the larger organization.

11:17So for a little background, Simply Good Foods acquired Owen in June 2024 for$280 million. The legal complaint by a group of Simply Good Foods shareholders claims the integration of the brand has been an abject failure. And it calls out former president and CEO Jeff Tanner, former CFO Sean Mara, and current CFO Christopher Buehler as defendants in the case. As part of Owen's integration, the brand lost key managers, which paved the way for Simply Good Foods leadership to create a, quote, bloated organizational structure that was lacking strategic cohesion.

11:57Brad Avery:Now, Lucas, this is all pretty interesting because hasn't Owen recently swapped up the leadership? Didn't a new CEO come in? What's new is old, I guess. You're right, Brad. They actually brought back former president and CEO Joe Scalzo, and he took over the chief executive role earlier this year. And he has conceded since taking back control of the company that they, quote, lost some important brand expertise. Our marketplace execution was poor and our brand performance fell well short of our plans. So that's his words. That's his words. And so a scathing kind of critique of the former leadership's implementation of Owen.

12:42And, you know, in April, Simply Good Foods reported that Owen's sales had fallen nearly 17 percent. And the company reported$187 million impairment charge against Owen's intangible assets.

12:55Brad Avery:So in this case, there is a lawsuit being threatened against the company. In Xevia's case, it is just a letter urging a sale from one stakeholder. But there's a number of shareholder revolts coming all at once. It's kind of curious. I don't know if it's just coincidence or speaking to something larger in the market. But a lot of these midsize companies we've seen either go through acquisitions or head into public life are facing some of the challenges of public life now. Yeah. And we talked about this a couple of weeks ago with Celsius and how the founder of Rockstar Beverage had called out the leadership team at Celsius.

13:42And to Celsius's credit, they responded pretty quickly and did some changes to their leadership as a result of what they reported in their most recent earnings. Maybe it is something in the water, Brad. End of summer, people are feeling a little hot and bothered, and they want to take out their stress. But this seems to be a little bit of a trend in beverages right now in terms of shareholders just not being really happy with the leadership of some of these companies.

14:08Brad Avery:Well, we'll stay on top of all of these stories, and you can keep following our coverage on BevNet and NOSH. Over on BevNet, we also have an exciting new platform to announce. We're proud to introduce the BevNet CPG Media 2026 Launch Explorer, an interactive tool tracking more than 1 ,000 new food and beverage products that have hit the market since the beginning of the year. It's available to BevNet, Nosh, and BrewBound subscribers, and the 2026 Launch Explorer helps to track trends and provides a searchable database of the year's new products to date. Head over to BevNet, Nosh, and BrewBound to check it out.

14:43Brad Avery:Here are some other notable bits of news from the week. Digital native mushroom coffee brand Everyday Dose is making the jump into club stores with Sam's Club, with new CEO Kyle Thibault leading the charge. Now under Ferrero's ownership, Purely Elizabeth is taking granola beyond the bowl with its first true entry into snacking, Chewy Granola Bites. And Diageo's annual report revealed the alcohol conglomerate cut its workforce by more than 6 % in its 2026 fiscal year, ending June 30th. The Guinness makers headcount was down by over 1 ,900 workers from 2025. For these stories and more, become an insider at BevNet and Nosh.

15:22Brad Avery:That wraps up this edition of CPG Week by BevNet CPG Media. Thank you to our audio engineer, Joshua Pratt. Our designer is Aaron Willett. If you enjoyed the podcast, please subscribe on your listening platform of choice, and we will see you next time.

15:43Thank you.