The People v. David, A Protein Soda Boom and George Clooney's Near Beer

0:04Monica Watrous:Welcome to the CPG Week podcast by BevNet and Nosh. I'm Monica Watrous, here with my co-host Brad Avery. If you're enjoying the show, please subscribe on your listening platform of choice. Here is the latest in food and beverage industry news. A class action lawsuit filed in New York Federal Court claims David Protein significantly understates the calories and fat content in its protein bars. According to the complaint, the brand's peanut butter chocolate chunk bar is labeled as containing 150 calories and 2.5 grams of fat. But independent testing allegedly found the bars contain 78 % to 83 % more calories and up to 400 % more fat than listed.

0:53Monica Watrous:The plaintiffs, who are residents of Los Angeles, New York, and Vernon Hills, Illinois, claimed that the bar actually contains about 264 calories and roughly 12 grams of fat. Filed in January, the lawsuit drew broader attention over the past couple weeks after circulating on social media and in news reports. David Protein maintains its labeling is accurate. A spokesperson for the brand told us the lawsuit is based on a scientific misunderstanding of how calories are measured. According to David Protein, the plaintiffs rely on bomb calorimetry, a method that measures calories by burning food and recording the heat released.

1:38Monica Watrous:Nutrition labels, however, are based on how much energy the human body can actually absorb and use. That distinction is particularly relevant for some ingredients used in the David protein bars, including EPG, a modified plant-based oil developed by EPG, which David now owns. The ingredient mimics the taste and texture of fat, but passes through the digestive system largely unabsorbed. The spokesperson for David Protein told us that burning those ingredients in a bomb calorimeter treats them as fully digestible calories, even though they are not. The FDA requires different calculation methods when determining calories for these ingredients on nutrition labels.

2:21Brad Avery:Man, David's kind of been a lightning rod since it launched, huh?

2:25Monica Watrous:They really have. And we talk about him a lot on this podcast. Last week, we were talking about their entry into the ice cream category. This is a brand that has made some irreverent marketing plays. They've launched frozen cod that felt kind of like a joke, but it was a real product launch last summer. They sent sex toys to influencers on social media as a way to promote their new protein bars. And this is not their first time in court either. They were sued by several startups who were using EPG as a key ingredient in their formulations to lower the fat content and calories. Now, I will say that over the past few days since this lawsuit has surfaced, David Protein has released what I would say is a masterclass in public relations.

3:12Monica Watrous:They've had some pretty funny videos, also very educational videos. They had a video that features the head food scientist at Epigee explaining how bomb calorimetry works and why David bars are not measured in the same way as a lot of traditional food. And they've also kind of laughed at themselves a little bit. I mean, they referenced that scene from Mean Girls with the character Regina George, who is unknowingly being tricked into consuming weight gain bars that she thinks are actually helping her lose weight. And David Protein asserted no one here is getting Regina George to say no one's being tricked into eating more calories and fat than they think they are.

3:57Brad Avery:These kinds of class actions are continuous through the industry and they'll never go away, frankly, but they're the type of thing brands need to be prepared for. And I think a media response like you just described is probably the best way. Explain like I'm five. All this science is probably the best approach because those are the folks who are going to be most disturbed by the allegations they hear in the lawsuit. And you hear an allegation and you just kind of automatically assume it's probably true, which is not necessarily the case. And so I think a campaign like that is a smart reaction.

4:34Monica Watrous:I think it's also important to look at history of these kinds of class action lawsuits. Six years ago, Hershey owned One Brands was being sued by some consumers who felt that the products misrepresented the amount of sugar in the product. And that case was dismissed, but it's another thing that's going to keep coming and coming as brands formulate with ingredients that aren't digested in the same way that maybe more traditional ingredients are. So inputs like certain fibers, this fat replacement ingredient, EPG, as well as sugar alcohols need to be measured differently. And I think that the case really doesn't hold water.

5:17Brad Avery:Well, speaking of protein competition, the protein beverage segment is heating up fast. At Natural Products Expo West this month, we saw a lot of brands competing in protein. One was Bloom, the KDP aligned nutrition brand that launched energy drinks two years ago and has also been a large nutrition protein platform. Our colleague, Marty Caballero, spoke with Bloom's CEO, Greg Lavecchia, at the show about the launches of Plume Prebiotic Pop and Bloom Clear Protein. You can see the full video on BevNet. In it, Lavecchia said that Clear Protein is providing a, quote, second gust of wind for the brand's nutrition portfolio sales, while Prebiotic Pop is coming two years after it first got into RTDs and is an aggressive competitor in the modern soda set.

6:05Brad Avery:Increasingly, these two trends, protein and modern soda, are merging. We've previously seen brands like Koya and Bear Bells launch protein soda drinks. And at Expo, I also saw Koya test an upcoming still protein water, yet another sign of how clear protein innovation is paving the way for these categories to further blur their lines.

6:28Monica Watrous:It seems like we're seeing protein in the soda category in a much bigger way than we saw fiber in the soda category. So many entrants that are trying to get that poppy level success and find a major$2 billion exit or just resonate more with the consumer who is obsessed with protein right now.

6:50Brad Avery:It makes sense because with Poppy's exit, Olipop is a strong number two. You have a brand like Culture Pop as well. Hanging in there is another strong gut health proposition. But there were so many prebiotic and probiotic soda plays that protein is the natural next extension in some ways. that's also the clear protein innovation. The ability to better formulate with protein in clear beverages has been revolutionary in a way. And so that's something that Bloom here is doing. Their clear protein is a powdered product, but it allows for that customization, and it's clearly driving big sales for the business.

7:36Monica Watrous:I feel like a big barrier there, though. I can't speak to Bloom directly, but some of these other protein sodas, have an aftertaste of whey protein. I mean, it tastes like maybe you ate some yogurt or something, you know, it has like a, it has a whey taste. And I feel like that technology is going to continue to get better and just maybe, you know, continue to power innovation in this set.

7:57Brad Avery:Yes, it definitely depends on the brand, but I've had the drinks where they definitely fit the bill you just described.

8:06Monica Watrous:Not naming names. Moving on to the sauce aisle. A little over a month ago, we learned the Marzetti company acquired Bachons for$400 million. And now we have some clarity from founder Justin Gill about what comes next for his Japanese barbecue sauce brand. I sat down with Gil recently to dig into the deal as well as the brand's next chapter. He told me that Bachans had reached an inflection point after six and a half years of building out distribution and refining the product assortment. Rather than continue to push forward with a lean team, Gil opted to bring in a strategic partner that could help the business scale faster.

8:46Monica Watrous:He said Marzetti stood out as an ideal partner that was willing to preserve the brand's team, its culture, and clean ingredient standards, while adding resources to accelerate innovation and expand into food service, a channel that can put the sauce in front of millions of consumers through restaurant menus and prepared foods. Ahead of the deal, Bachans charted into Canada, marking its first international expansion, and released co-branded offerings with two legacy Asian American brands, Spam and Top Ramen, as limited time launches exclusively at Walmart. The business, which had previously been backed by Prelude Growth Partners and Sonoma Brands Capital, will retain its entire team and headquarters in Northern California.

9:31Monica Watrous:Gill said Marzetti intends to operate Bauchan's with a, quote, window in, door out approach, which means the parent company will have a window in to see into the business, while the brand will have a door out to ask for support. He emphasized that nothing would change about the brand's products, which are based on a multi-generational family recipe. Bonchons also launched its biggest marketing push to date this week with a national campaign spanning television and digital media, encouraging shoppers to look for the octopus in the sauce aisle. The campaign centers on the brand's octopus mascot, Octo, which draws inspiration from the brand mascots of Gil's youth, such as the Kool-Aid Man and Tony the Tiger.

10:15Monica Watrous:Oh, yeah.

10:19Brad Avery:And the Casamigos team is back in the saddle. George Clooney, you know who he is. Randy Gerber and Mike Meldman are back together for a new non-alcoholic beer brand, Crazy Mountain. They filed for the Crazy Mountain name with the U.S. Patent Trademark Office in June, and now there's an official press push this month, including a Page Six feature, pixelated billboards on Los Angeles' Sunset Strip, and numerous social media posts. Clooney, Gerber, and Meldman explained their reasons for getting into the increasingly crowded but growing NA beer space in a press release, saying, we wanted to create a beer that lets you enjoy the moment as well as the morning after.

11:03Brad Avery:This follows the launch of NA beers from other celebrities such as Tom Holland, Star Wars Spider-Man films and the general growing trend of NA beers that's become a really unstoppable force in some ways. It seems that everywhere I look, Monica, there's more NA beer, more people who are very much turning to these alternatives. What's your experience been like out in Missouri?

11:29Monica Watrous:I mean, I see athletic brewing in pretty much every bar or liquor store that I'm in. And I don't really drink regular beer, so I'm not very interested in near beer. I would rather just have a cocktail. But I do wonder how big this category could get. It seems really saturated with all of these entrants. And I mean, really, how many different non-alcoholic iterations of beer can be made?

11:55Brad Avery:Well, we saw the craft beer set get pretty large for a long time before it finally had to contract. But, you know, I think with Crazy Mountain, there's a question of whether there's celebrity backing is going to be important here, whether it's just the seasoned team that, you know, built and scaled and sold a tequila brand is, you know, how that will play. For the brand itself, this is going to be launching in the 25 states, quote, pretty quickly. These are coming in lager form and 12 ounce cans. they're playing to a natural you know consumer impression of beer in fact you mentioned that Bachans uh kind of playing to old cereal mascots crazy mountain is kind of playing to the Marlboro man with its cowboy imagery my question is when are we going to see an N.A.

12:45Monica Watrous:beer with protein

12:46Brad Avery:oh it's got to be coming it would probably work maybe for a porter or a stout you could probably sneak some protein into there. I don't know about like an IPA. That might be tough.

12:58Monica Watrous:And here are some other notable bits of news from the week. Lemonade and sweet tea brand Milo's is building toward a goal of$1 billion in retail sales by investing across production, distribution, and innovation. Hot on the heels of its IPO last month, celebrity-backed baby and kids nutrition brand Once Upon a Farm is seeking scaled profitable growth with refrigerated coolers, and protein-forward product innovation. And finally, PepsiCo has thrown its hat into the booming meat snack category with its first standalone beef stick brand, Good Warrior. For these stories and more, become an insider at BevNet and Nosh.

13:41Monica Watrous: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.