BevNET Magazine January/February 2017 by BevNET.com

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MAGA Z I N E

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LOOK BEHIND: 2016 IN REVIEW

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Contents / January – February 2017 / Volume 15 / No. 1

COLUMNS

FEATURES

4 First Drop Confounded by Co-Founders

38 Best of 2016 Awards go to Bai, Larry Young

6 Publisher’s Toast Rekindled Fantasies

42 Coffee No Standard Uniform for Cold Brew

28 Gerry’s Insights Life in the Snail Lane

46 Spirits: Cash for Craft Spirits Companies Investing Big (with Craft Mixers Sidebar)

DEPARTMENTS 8 Bevscape The trends, deals, and funny bits affecting your world. Now with food (NOSHscape) and beer (BREWscape) sections. 18 New Products Skinny Red Bulls and Chasewgurt 24 Channel Check Craft Mixers Gaining 62 Promo Parade More Snoop Dog

52 Look Ahead Experts on What’s Coming in 2017 58 Look Behind: Year in Review Tracking and Sharing the Changes

SHOWS 30 Natural Products Expo West Preview 32 BevNET Live Winter ‘16 Review 34 Brewbound Session Winter ‘16 Review 36 Fancy Food West Review

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BevNET Magazine (ISSN 2165-6061, USPS 24-552) is published bi-monthly by BevNET.com, Inc. 44 Pleasant Street, Suite 110, Watertown, MA 02472. Periodicals postage paid at Boston, MA and additional mailing offices. POSTMASTER: Please send address changes to BevNET Magazine, Subscriber Services, 44 Pleasant Street, Suite 110, Watertown, MA 02472

THE FIRST DROP BY JEFFREY KLINEMAN

Confounded by Co-Founders I’ve thought a lot about the roles of a variety of executives in the life of the company for several years now, but there’s still one definition that I struggle with: since it appears that being a company founder is a simple thing, where, exactly, did all of these co-founders come from? It’s a once-precise term that has become stretched and idiomatic due to circumstance and investment. Certainly, the denotative meaning of co-founder is easy enough: present at the creation. That extends from the Tom and Tom duo at Nantucket Nectars to Ben and Jerry and Seth Goldman and Barry Nalebuff – you essentially start the enterprise together, even if it isn’t simultaneous, it’s still very early days. But things are getting more complex: I am seeing consultants and investors added as co-founders much later than one would normally imagine, and some ideas that are stretching the bounds of credibility, as well: one consulting company that launched last March has added 17 “co-founders” over the course of the past year, while its husband-and-wife founding team go by “Chief Visionaries.” Which must make for an interesting cap table. You can get pretty far with rhetoric, and we’re all happy when smart people join other smart people, but I worry about that complex a structure when you’re dealing with a relatively small organization. Not that changes in the founding ranks are unusual as small organizations start to take off – there are many brands out there that gradually shed their initial co-founders as they grow; sometimes they become small notes on Wikipedia or surprising resume lines on LinkedIn. Where they tend to have the most impact is in the ultimate payout for a brand – more than one co-founder has been muscled out of their original company, while sometimes there’s a windfall long after a co-founder pursues something new. In addition to considerable cash, sometimes there are painful breakups, as we’ve seen from the Ferolito/Vultaggio battle over the legacy of AriZona Beverages. Given the stakes there, it’s understandable, although one hopes it won’t lead to an unsettling Politburo-style scrubbing of some co-founders from company his4 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

tory. (Up here, for example, it’s bizarre to see Eliot Tatelman doing a solo act for Jordan’s Furniture without his brother, Barry; it’s even more bizarre to see them in line for nachos at a Simon & Garfunkel concert, but that’s another story). But co-founding is more confounding than the term itself. Time, money, and expertise enter the equation. I called up Mike Repole, who is often referred to as the co-founder of Vitaminwater; he’s also known as the the co-founder of alternative sports drink BodyArmor. He wasn’t present for the creation of Glaceau (just it’s biggest brand) or the trademarking of BodyArmor, but he sees the creation of a brand or a company in broader terms. Plants need more than just one root, he told me. Lance Collins was known as the founder of BodyArmor in its earliest days, while Repole was a behind-the-scenes investor. Now he’s running the brand, and they’re called co-founders. Meanwhile, Collins cofounded CORE with another partner, music producer Dr. Luke. (To my knowledge, Collins himself has yet to get a songwriting credit, which smacks of an unfair deal.) One thing I learned from the discussion, though, is that early on, it’s good to not be so fussy about roles. Clayton Christopher is another co-founder who might not necessarily be an original founder but tends to bring much on board for brands in terms of funding, experience, and connections early on. Especially given the strong innovation pipeline in his hometown of Austin, there’s a lot of opportunity for brands to reach out to him when they’re ready to make the key tweaks to move from “off-Broadway” in Texas to wider distribution. North of the border, Andrew Black’s company BrandProject specializes in the co-investment/co-founder model as well, getting involved with early-stage companies with money and experience. So the idea behind the growing use of the term may be part of a larger recognition that growing a brand or a company doesn’t just happen with the birth of the idea. It’s one thing to be the entrepreneur who locates the buried treasure, it’s another to be part of the team that digs it up. And I can understand that rationale – but that doesn’t mean the liberal arts major

Mike Repole, co-founder of Vitaminwater and co-founder of alternative sports drink BodyArmor.

in me needs to like it. Maybe it’s a reflection of the times, where social media and fake news are making history and truth even more fungible. People don’t necessarily think their beverage is always truthful (notable exception: in vino veritas) but if you get sloppy with your brand’s history, who knows what other unnecessary complexities you’re going to introduce. Besides, given the challenges in building a winning company, the last thing you need are questions about who did what, when, conflicts over ego or cap tables aside. Here’s a question: Do you think that Eric Schmidt is fuming at night because the historical record hasn’t been recast to put him down as a co-creator of Google, alongside Larry Page and Sergey Brin? Probably not, and with good reason: he knows that a good Googling will reveal the whole story anyway.

9.0198 in

PUBLISHER’S TOAST BY BARRY NATHANSON

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Rekindled Fantasies Back at the keyboard to pen what must be umpteenth column, I’ve decided to do the math. I’ve been publisher of a beverage magazine for 24 years, with my 25th about to begin. It comes out to around 285 columns, give or take a few. Those are a lot of thoughts – note I don’t say wisdom – that I’ve imparted, but I enjoy this aspect of my job, and the feedback has almost always been positive. So as we forge again into 2017, let us walk together. By all accounts 2016 was a pretty strong year for the beverage marketplace. The industry grew at an impressive rate, across the spectrum of categories. Sales

Barry J. Nathanson PUBLISHER bnathanson@bevnet.com

Our BevNET Live conference in December brought all of these into focus. What I liked about most of the new brands we’ve encountered over the past few years was that they were pretty much cognizant that they are niche brands and didn’t shoot for the moon. In the old days, everyone aspired to go national, and most got burned. Now we have a generation of fiscally responsible marketers. I like their slow but steady growth. They look to go market by market, region by region. In my many conversations and meetings with these entrepreneurs, I was impressed with their maturity. They knew the strengths of their brands and would act accordingly.

Jeffrey Klineman EDITOR-IN-CHIEF jklineman@bevnet.com Ray Latif MANAGING EDITOR rlatif@bevnet.com Martín Caballero SENIOR REPORTER mcaballero@bevnet.com Jon Landis STAFF WRITER jlandis@bevnet.com Chris Furnari BREWBOUND EDITOR cfurnari@bevnet.com Carol Ortenberg PROJECT NOSH EDITOR cortenberg@bevnet.com

SALES

John McKenna DIRECTOR OF SALES jmckenna@bevnet.com Adam Stern SENIOR ACCOUNT SPECIALIST astern@bevnet.com John Fischer ACCOUNT SPECIALIST jfischer@bevnet.com Cory Baker SALES & MARKETING ADMIN cbaker@bevnet.com

ART & PRODUCTION

Matthew Kennedy CREATIVE DIRECTOR Aaron Willette SENIOR DESIGNER Nathan Brescia PHOTOGRAPHER

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and volume numbers continue to climb. The big brands had their struggles and too often had to use discounting to keep their figures respectable. Small to mid-size entrepreneurs have had the greatest success, but they were mostly coming from bases that could only go up. We saw an incredible group of exciting new brands enter the arena. The true innovators took formulations or concepts that were either unheard of, or that were once thought to be less than viable, and made them into realities. New variations of old ideas, with healthier focuses and better taste profiles, have become another major trend. So many new players joined in the fray. Attending the Natural Products Expos, the Fancy Foods Shows, the NACS shows, seeing what was submitted from the crowd, made for a truly frenzied effort to keep up with all the new entries.

Then came the Bai and Kevita sales, which were among the most prominent transactions over the past many months. And all hell broke loose. Many of these responsible marketers I’ve been praising went off the rails. Suddenly, they’re all talking about being the “next great one.” I started hearing the conversations of marketers looking for that cash-out, of the variables to hit to make the sale. I hadn’t heard that talk in a long while, and I tried to temper this chatter. We’ve seen the realities of this industry, and the Bais and Kevitas of the world are the exception to the rule. Go about your business with the intention to make it a success for the sheer joy of it. Yes, you want to make money, but the satisfaction I’ve seen from so many of you is the reason you’re here. Make your companies your reality, not a fantasy, and we can all enjoy my 25th year together.

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6 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

BEVSCAPE

THE LATEST BEVERAGE BRAND NEWS

Humm Expands

Humm Kombucha is gearing up for a big year as the Oregon-based company prepares to move into a new manufacturing facility that will give it the ability to dramatically increase production of its fast-growing kombucha line. In an interview with BevNET, Humm’s Chief Strategy Officer Eric Plantenberg said the company’s current 3,000 square foot space allows it to produce about 250,000 14 oz. bottles per month. Humm’s new 40,000 square foot facility will be capable of producing 1.5 million bottles per month at launch and eventually enable the company to double that output. Much of the funding for the new facility came from more than $3 million in equity and debt financing raised from 24 investors, including board members, friends, family and local Oregon businesses, according to Humm co-founder and CEO Jamie Danek. The company is still seeking another $965,000, according to a Dec. 20 U.S. Securities and Exchange Commission filing. Plantenberg said that Humm is seeking to convert all of the recent investment into equity early next year. The recently announced funding was the second round for Humm in 2016. Earlier, Humm reported raising $1 million.

Rollups: Acquired and Revived

“2017 is our year to grow nationally, so we [needed] more money to fund some larger initiatives,” said Danek. Although much of the company’s current capital is going into the new facility, Platenberg said that Humm needs more for operational expenses; the company is planning to expand its operating staff and will be hiring 20 to 25 new employees next year. The transition to the new facility comes as Humm is seeing growth in its retail presence. The company signed a deal with Target in September to sell four of its varieties in nearly 1,600 locations. Danek praised Target as an ideal partner to meet Humm’s national growth goals as the chain store works closely with the brands it distributes to help small companies succeed in-store. Humm is also currently sold in select Kroger and Safeway stores, and will continue to expand distribution nationally in 2017, Danek said. Plantenberg noted that many more retailers are reaching out on a regular basis to stock the brand as consumers continue to seek out functional beverages like kombucha. “People are clearly interested in putting things that make them feel good into their body,” Plantenberg said. “Kombucha does that.”

8 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

Pure Steeps, a recently established subsidiary of tea conglomerate Harris Freeman, acquired the Oregon-based Kombucha Wonder Drink in November. Wonder Drink joins Californiabased cold brew company Secret Squirrel as the two inaugural brands under the Pure Steeps name. Financial details of the deal were not disclosed. Wonder Drink founder and CEO Steve Lee told BevNET that he will remain with the company as the CEO of Pure Steeps. “The opportunity to get involved with Harris Freeman and help create Pure Steeps was a real opportunity for me,” Lee said. “The acquisition

Pure Steeps is on the move itself: between Secret Squirrel and Wonder Drink, it plans to move from 22 to 40 SKUs by the end of 2017, Chaluvadi said. The current pasteurized Wonder Drink line, sold in bottles and cans, will be relaunched as a prebiotic beverage with improved flavors. The first glimpse premiered at Fancy Food Show. The current “Raw” line has been discontinued and will be replaced with a new probiotic line which will be revealed this spring at Expo West. Wonder Drink also sampled two new flavors of the pasteurized line at Fancy Food Show, both of which are set to

was really a simple one. They bought the company and our whole small team joined their team. Now we’re in the process of building Pure Steeps.” With a new owner comes a new look. According to Sai Chaluvadi, Pure Steeps’ vice president of R&D and operations, Wonder Drink’s redesigned bottle label emphasizes the brand’s American heritage, adding the slogan “Oregon Roots” to the top of each bottle and including an “Est. 1999” tag to communicate to new consumers that Wonder Drink is not at all a new brand.

debut later this year – Mint, Juniper Berry & Apple and Concord Grape. In Secret Squirrel, Pure Steeps is releasing two cold brewed teas, Sencha Green and New Rwanda Black, with plans for future expansion as well. “The way Harris Freeman looks at things is to create brands that are sustainable that can last 100 years strong,” Chaluvadi said. “It was always about people first. Identifying the right talent, nurturing them, helping them realize their dreams. And Pure Steeps in many ways is the same DNA.”

GT’s Becomes a Buyer Millennium Products, Inc., the parent company of GT’s Kombucha, has acquired Tula’s CocoKefir, the maker of coconutbased kefirs and yogurts that are fermented with vegan probiotic cultures. Millennium Products founder GT Dave, told BevNET that he has long had a fondness for Tula’s products. “I have an affinity for fermented foods which is not limited to just Kombucha,” Dave said in an email to BevNET. “I’ve been personally consuming Coconut Water Kefir for many years now and always knew it would become a part of our family of products. I was just waiting for the stars to align.” Tula’s CocoKefir was founded in 2009 by husband and wife team Michael and Holly Larsen, who launched the brand after seeing the benefits that probioticrich foods had on their autistic daughter Tula. The Larsens claimed that Tula’s autism stemmed from a severe gastrointestinal condition and that fermented foods helped her overcome her health issues. Dave said that the Larsens’ “personal journey convinced me that we needed to work together.” Following the acquisition, Tula’s Young Coconut Kefir drinks and its CocoYo yogurt were rebranded as GT’s products. Asked if they had also undergone a reformulation, Dave said that only that “the plan has been to preserve [their] high quality and integrity,” and noted that the Larsens are “now part of the GT’s Family.” According to a company sell sheet, GT’s CocoKefir is made using young coconuts that are cracked at the company’s production facility in Los Angeles. The water is fermented in small batches using vegan probiotics and contains 15-30 billion active probiotics per 4 oz. serving. One major update to the formulation has been the removal of stevia, which Tula’s had used to lightly sweeten the beverage; it now contains no added sugar or sweeteners. Described by GT’s as a “Living Coconut Water,” CocoKefir is vegan, dairyfree and gluten-free and comes in three flavor varieties: Pure,

Cacao and Matcha. The drinks are packaged in GT’s familiar 16.2 oz. glass bottle and have a suggested retail price of $11.49. GT’s CocoYo is crafted using organic coconuts from Thailand. The company extracts coconut meat and coconut water at its facility and adds vegan cultures, and a hint of vanilla and stevia. GT’s promotes the product as a “fluffy and tangy yogurt-like treat.” CocoYo contains 15-30 billion active probiotics per serving and is made with no gums, fillers, emulsifiers, stabilizers, or preservatives. Packaged in a 16 oz. jar, the yogurt retails for $5.99. The yogurt is the first food product marketed by GT’s, but it might not be the last, according to Dave. “It’s exciting for us to play outside of the beverage aisle and we feel that this could be the beginning of a new frontier with our product offerings,” Dave said. The products are currently sold at select retailers in California, and GT’s is aiming to expand distribution nationally. Although the launch of GT’s CocoKefir and CocoYo was met with praise on social media, not everyone is pleased. In September Lifeway Foods Inc., which produces the leading brand of dairy-based kefir in the U.S., sued Millennium Products alleging that the company “misleadingly suggests” its kefir is made from fermented milk. Lifeway claimed that kefir is a dairy product “made primarily from the milk of cows, but can also be made from the milk of sheep or goats” and that “genuine kefir cannot be made from the non-dairy ‘milk’ or ‘water’ of plants, whether coconuts or otherwise.” Moreover, Lifeway cited a U.S. Food and Drug Administration definition of kefir as a “cultured milk” produced using dairy-based ingredients as further evidence that Millennium’s use of the word is false advertising. The case had a relatively short shelf life; last Wednesday a judge granted Millennium’s motion to dismiss the lawsuit.

BEVSCAPE New CEO, New Cash at WTRMLN WTR Christine Perich has become the new chief executive officer of World Waters, maker of fast-growing high pressure processed juice brand WTRMLN WTR. Perich is the former CEO of New Belgium Brewing, which she left in October after 16 years at the Colorado-based craft beer company. The New York-based brand is coming off a banner year in 2016, in which it reported 300 percent growth and secured placement in over 15,000 retail locations nationwide. WTRMLN WTR also landed Grammy-winning singer and actress Beyoncé as an investor in May. In an interview with BevNET, WTRMLN WTR co-founder and creative director Jody Levy explained that Perich’s experience in building brands would be an asset as the company enters a new stage in its development in 2017. “As we are growing and scaling, it was time for new leadership that has experience growing a brand from this stage to where we’re at and onward,” Levy said.

“I think that paired with Christine, who has an amazing passion for building companies and scaling culture. She obviously has a background in finance and has been an exceptional leader, and with that is this real understanding for mission-driven companies and how you grow both internally and externally with a mission and a strong brand culture.” Perich, a graduate of Colorado State University, replaced company co-founder Kim Jordan as CEO of New Belgium in August, 2015. She is credited with helping the brewery transition to 100 percent employee ownership in 2013. She began her career at New Belgium in 2000 and previously served as the company’s chief financial officer, chief operating officer and president. The new CEO appointment follows the close of an additional $7 million capital raise for WTRMLN WTR, which Levy said came from a group that includes all of the company’s current investors.

10 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

Funding the REBBLs Culminating a year of impressive growth, REBBL, makers of adaptogen-fueled herbal elixirs and tonics, closed a $10 million investment round led by Boulder Investment Group Reprise (BIGR) in December that will allow for an expansion of marketing efforts. Zico founder Mark Rampolla’s Powerplant Ventures was also involved, as was John Foraker, president of Annie’s Homegrown, acting as an individual investor. In a press release, Duane Primozich, managing partner at BIGR and a member of the REBBL board, said, “We’re thrilled by the opportunity to partner with REBBL. It is an exceptional brand with fantastic products, talented and experienced management, and a truly authentic mission.” The new investment represents another chapter in the rapid ascent of the Berkeley, Calif.-based REBBL, launched in 2013 by former Bossa Nova Superfruit cofounder Palo Hawken. The brand uses adaptogenic “superherbs” such as ashwagandha, turmeric and reishi mushroom as the basis for its line of functional beverages made with coconut milk and sold in 12 oz. plastic bottles. The company introduced a two-SKU line of plant-based protein drinks in March. REBBL secured its first capital raise outside of friends and family in December 2015, when Powerplant Ventures led a $4 million investment round that also included Primozich as an individual investor. In the subsequent 12 months, the brand has enjoyed significant growth. According to data from market analysis firm SPINS, REBBL’s certified organic, fair trade and non-GMO elixirs are now available in 2,500 stores across the U.S. The company has more than doubled its revenue this year and closes 2016 as the best selling functional beverage sold in natural grocery stores in the U.S. Speaking with BevNET, Sheryl O’Loughlin, CEO of REBBL, said that the brand’s strong performance precipitated this next round of funding, which will allow REBBL to focus on building the company. “Entrepreneurs are constantly in this dilemma: they need to be focused on their company and support its growth, but at the same time, it’s so important to be outside and raising money in order to fuel that growth,” O’Loughlin said. “It created this dilemma where we truly can’t get back to what we should be doing, which is running the company. So we thought, ‘The company is growing and investing in the business is working, now let’s bring enough money to the table so we can truly focus on running this business.’”

Annals of Science: Essentia Study A flood of alkaline waters may have surrounded consumers in recent years, but now one brand is claiming the scientific high ground. A new study published in the Journal of the International Society of Sports Nutrition showed that Essentia Water, an ionized alkaline water with a pH of 9.5 or higher, was almost twice as effective at rehydrating adults who consumed it after a period of exercise-induced dehydration. While only representing a small fraction of the total water category, ionized alkaline water brands have enjoyed growth in recent years, in part due to hard-to-prove claims of functional benefits such as improved athletic performance and helping the body fight disease. The new study is particularly notable because it examined the efficacy of Essentia in providing elevated hydration benefits versus neutral pH water and was published in a peer-reviewed scientific journal. The randomized, doubleblind study, which was designed by Dr. Ralph E. Holsworth Jr., a licensed doctor of osteopathic medicine and the director of clinical and scientific research at Essentia, and co-authored by researchers at an independent clinical research organization, used blood viscosity, or thickness, as an indicator of hydration in examining 100 adult volunteers (50 male, 50 female) between 25 and 49 years old. Participants in the study exercised in a warm environment, including walking on a treadmill and riding a stationary bike, until they had lost two percent of their body weight due to perspiration,

which is clinically defined as mild dehydration. They were then randomized into two groups for a 120-minute period, during which one group received Essentia and the other was given a leading purified bottled water with a neutral pH level. Each individual within both groups was allowed to consume as much water as they felt appropriate to satiate their thirst during that time. Researchers concluded that the group which consumed

for Essentia, explained that the study had been in the works for some time, and was motivated in part by a desire to understand why consumers who aren’t deeply versed in the science of hydration have responded so positively to the product. “Essentia has been around for 18 years and we have 18 years worth of people writing to us and saying ‘I don’t know what it is about Essentia but I just feel better from drinking

Essentia reduced viscosity by an average of 6.3 percent, as compared to 3.36 percent for those who drank the purified water. Other biometric indicators also recorded from participants during the study, such as plasma osmolality, bioimpedance and body mass, revealed no significant difference. In an interview with BevNET, Neil Kimberley, VP of strategy and brand innovation

it,’” he said. “To some degree, our driving desire on this was trying to understand what was actually causing that. We believe that just that sense of hydration that comes from better acuity, from your body performing better, is really what comes from this. It’s just that we had no idea of a way to kind of put ourselves into that and say this is probably the marker that does this.”

Dr. Holsworth noted that there is not an accepted clinical definition, in terms of blood viscosity, for what would be considered normal levels of hydration – but that lower viscosity is indicative of increased hydration. “It’s very specific to each person,” he said. “Blood viscosity is actually more consistent per person than a lot of other metrics, such as heart rate and blood pressure. But how effectively you are hydrated does reflect very accurately with how thick your blood is.” Kimberley noted that, while the company considered the scientific results to be important, the results of the study would not have a major impact on the brand’s messaging or marketing. “Our experience with Essentia is that the more scientific the approach is, the less people really understand about it,” he said. “We really want to have a ‘there there’ for somebody who’s looking for why this is a different product and why I should believe that you are different. We are using this more with public relations and on our website to make that connection.” Kimberley said that while the brand would continue exploring potential research studies examining Essentia’s health benefits in the future, completing this particular project was most important. “What we really wanted to do was do this the right way,” he said. “We wanted to make sure whatever our methodology and protocol was really matched up to what we thought our benefit could be and make sure we had the right protocol and the right people in place to analyze it and then the right peers to review it.”

BEVSCAPE Coke and ABA Facing Legal Challenges in Federal Court Public health advocates’ campaigns against the soda business – particularly the CocaCola Company – spilled over into the courtroom in January in the form of two recent cases involving the world’s largest beverage company. In a move that some experts have described as similar in strategy to the legal actions taken against the tobacco industry in the 1990s, a new lawsuit accuses Coke and CSD-friendly trade group American Beverage Association (ABA) of engaging in a 40-year “elaborate campaign of disinformation” to minimize the health risks associated with soft drink consumption. The suit was filed in the U.S. District Court for the Northern District of California on behalf of the nonprofit group Praxis Project in collaboration with consumer watchdog group the Center for Science in the Public Interest (CSPI) and the Public Health Advocacy Institute (PHAI), based at Northeastern University in Boston. The suit alleges that Coke and the ABA have violated the Fair Advertising Law by being “engaged in a pattern of deception to confuse the public” and public health officials about the links between regular consumption of sugar-sweetened drinks and health issues like obesity, diabetes and cardiovascular disease. Furthermore, the suit alleges that Coke and the ABA specifically targeted children in advertising campaigns and that Coke executives knowingly

12 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

made “material misrepresentations and omissions to the public” in the face of overwhelming scientific consensus about the health risks of frequently consuming sugary drinks. The suit also claims that Coke and the ABA provided significant funding for scientific “front” groups, such as the Global Energy Balance Network and European Hydration Institute, that “are presented to the public as disinterested research entities but are or were actually CocaCola-funded and used...to more effectively misrepresent, suppress, and confuse the facts about sugar-sweetened beverages and their health dangers.” Based in Oakland, Calif. and Washington, D.C., the Praxis Project’s stated mission is to engage in public health policy advocacy through partnerships with individuals and organizations on a national, regional, state and local level. In October, The New York Times reported on findings published in the American Journal of Preventive Medicine that found a “pervasive sponsorship” between Coke and PepsiCo and over 100 national health organizations with influence over public policy that received substantial financial support from the two soda giants. The plaintiffs are seeking a court order that would stop Coke and the ABA from denying the link between sugary drinks and obesity, diabetes and cardiovascular disease. Further action being

sought includes ordering the companies to release all their research on sugary beverages, to immediately cease all advertising targeted at children and to fund a corrective public education campaign that would include placing statements about the dangers of sugar consumption on their websites. In a statement on the group’s website, PHAI executive director Mark Gottlieb sharply criticized Coke’s past public statements equating calories from sugar-sweetened drinks to those from any other sources. “Coke pays dietitians to tell consumers things like drinking Coke can be a healthy snack and pays scientists to deny that sugary drinks are linked to obesity and then suggests that the main cause of obesity is lack of exercise,” he said. “The hypocrisy of suggesting to consumers that burning calories through laughing can offset the harmful effects of drinking soda is no laughing matter.” In a statement acknowledging the lawsuit, a Coke spokesperson said that the company takes its “consumers and their health very seriously and have been on a journey to become a more credible and helpful partner in helping consumers manage their sugar consumption,” citing the company’s reformulation efforts to reduce added sugar and promotion of smaller sizes. It also mentioned “transparently disclosing our funding of health and wellbeing scientific research and partnerships.”

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NOSHSCAPE

THE LATEST FOOD BRAND NEWS

New Products: Dang

In early 2016 coconut and onion chip brand Dang Foods received a minority investment from investment and incubation group Sonoma Brands in order to help the company scale. Apparently, some of it went toward innovation, as well, as the brand is launching a new look and a new line: sticky-rice chips. The new chips will retail for $3.99 and launch in Sprouts nationwide, Whole Foods’ Northeast region and Raley’s in Northern California. Dang founder and CEO Vincent Kitirattragarn was inspired to create the chips after tasting them abroad while visiting family. The chips are a popular snack in Asian; a retailer in the Bangkok airport

told Kitirattragarn that he sold roughly 10,000 boxes a day. Dang’s strategy and strength of adapting global favorites for the U.S. market made the chips a good fit “That’s really in our DNA as kids of immigrants. We grew up eating differently than the rest of the U.S.,” Kitirattragarn said. While the chips are custom made for Dang abroad in Thailand, the brand has taken numerous steps to appeal to the U.S. market. The binder in the chips is watermelon water; they are vacuum fried to use less oil, and they’re packaged in a pillow bag to more closely resemble potato chips. Unlike other American rice chips, Dang’s line uses whole rice, rather than rice flour.

14 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

Sonoma Brands’ founder and CEO, Jon Sebastiani, is bullish on the product line. “[Dang is] perfectly aligned with consumer demand for clean labels and adventurous eating,” he said. “Snacking should be fun and good for you; no longer do we need to decide between one or the other. Dang delivers on both – offering a sense of discovery by putting an innovative twist on perfectly approachable ingredients.” For the launch, Dang will focus on natural retailers and roll out to “progressive conventional” partners after six to 12 months. Demand has already been intense, said Kitirattragarn. In fact, Dang has already sold out of its entire stock of rice chips and won’t

be able to bring more retailers online until March, he said. The chips will also be the first product released under Dang’s new look, which was created by Hatch. In a drastic shift from the old look, Dang’s packaging emphasizes bright colors and the whole foods used in each product. “It’s a bittersweet process for me because I helped work on the design for the original look. But what we realized after four and half years is that if we want to extend beyond coconut and onion chips, we need a brand system,” Kitirattragarn said. “We really wanted to make it applicable for all the channels that we are in…[and] each of these channels has its own challenges in how you design a [package].”

For more stories, check out ProjectNOSH.com

Campbell: New Innovation Approach Over the past year, numerous big CPG firms have announced the formation of internal venture capital arms to work with and embrace entrepreneurial brands. And while

test market, rather than as a nationwide debut. Its early performance will influence the next steps for the brand. “We have a team that’s focused on innovation that’s re-

ings and retail at $2.99. Developing Maio took over a year. Mayonnaise was targeted as ripe for innovation because of consumer interest in refrigerated condiments and, Tao said,

tion that not everything will succeed and that’s okay.” Future product tests may occur in other parts of the country and with other retailers. Safeway was selected for

Campbell Soup has launched such a division, Acre Venture Partners, the company’s other divisions haven’t lost the entrepreneurial spirit, either. The brand’s C-Fresh division has launched Maio, a new mayonnaise-like spread, under its Bolthouse Farms brand. In a change from earlier rollout strategies, the line of three better-for-you, yogurt-based dips will be released in a small

ally inspired by entrepreneurs,” Carolyn Tao, VP of Marketing for C-Fresh Innovation, told NOSH. “We’re trying to take a few cues. I think one of the things that entrepreneurs do really well is get things out quickly and then test them and react.” C-Fresh is releasing Maio at Safeway stores in Northern California. For launch, the line will be merchandised alongside refrigerated dress-

because mayonnaise is the largest condiment category, at $2 billion in sales a year. Another benefit to testing products on a smaller scale, Tao told NOSH, is the speed at which products can be released. “One of the great things about incubation is that our goal is really to get a lot of new products out in the marketplace and see how they do,” Tao said. “There’s an expecta-

this test in part because the retailer also has an interest in refrigerated condiments. Tao said how else C-Fresh can embrace test markets and other entrepreneurial tactics is still being discussed. “We’ve been really immersing ourselves in the entrepreneurial world,” Tao noted. “That was our inspiration and we’re trying to figure out how that works at a larger company.”

BREWSCAPE

THE LATEST CRAFT BEER BRAND NEWS

Dale’s: Top Six Craft canned beer pioneers Oskar Blues Brewery led the aluminum revolution in 2002, so it’s no surprise that the Colorado-based brewery’s flagship release, Dale’s Pale Ale, finished 2016 as the nation’s top-selling craft can six-pack at U.S. supermarkets, according to market research firm IRI Worldwide. That feat capped a year in which Oskar Blues shipped more than 200,000 barrels of beer, bolstered by the expansion of its production facility in Brevard, North Carolina, and the addition of a new brewery in Austin, Texas. Across its three locations, Oskar Blues now has the ability to brew upwards of 500,000 barrels of beer annually, the company said in a year end review. Collectively, Oskar Blues Holdings’ family of breweries – Cigar City, Perrin Brewing, Wasatch and Squatters – produced nearly 350,000 barrels of beer in 2016. Jai Alai IPA, made by Cigar City, was the second-best selling 6-pack of canned craft beer in 2016, the company said. Among other highlights noted in the release, Oskar Blues said it added new distribution in Oklahoma, North Dakota, South Dakota and Montana as it filled out a 50-state distribution footprint in 2016. Meanwhile, the company also started exporting its beer to Australia, the Netherlands and Belgium, and the brewery’s products are now being sold in nine international markets. The company expects to continue adding international markets in 2017 and will soon add distribution in Brazil and Japan. The Colorado-born craft brewery also expanded its

Category Expansion: And Even More Breweries

barrel-aging program last year, which led to national distribution of Barrel-aged Ten Fidy Imperial Stout in 19.2 oz. singleserve cans. For its taproom crowd, the brewery released rum barrel-aged versions of Death by Coconut and Ten Fidy as well as a Java Ten Fidy. Oskar Blues also released the first American craft beer 16-pack with Pinner Throwback IPA. Two new year-round beers – Beerito Amber Mexican Lager and Priscilla White Wit Wheat – were also introduced, and the company launched limited-release cans of Passion Fruit Pinner IPA and Hotbox Coffee Porter. Other highlights from Oskar Blues in 2016 included: Crowlers, the 32 oz. to-go cans, were made available in more than 1,000 locations. The company launched four new flavors of B. StiFF & Sons Old Fashioned Soda Pop as well as a brick-and-mortar location of Oskar Blues Fooderies’ CHUBurger/Hotbox Roasters Café in Denver’s River North District. And the company’s nonprofit charitable organization, CAN’d Aid Foundation, raised $768,000, built and donated about 600 bikes to underprivileged children, donated 330,000 cans of drinking water to places like Flint, Michigan, during its water crisis and other good deeds.

16 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

For the third straight year, the Alcohol and Tobacco Tax and Trade Bureau issued more than 1,000 new brewery permits, bringing the total number of permitted U.S. breweries to a record high of 7,190 in 2016. According to recent TTB data published by National Beer Wholesalers Association chief economist Lester Jones, the number of permitted U.S. breweries has tripled from 2,343 over the last six years.

Lester Jones, National Beer Wholesalers Association chief economist

The government agency issued 1,110 new permits in 2016, down slightly from the 1,142 new permits issued in 2015. Permitted breweries include brick and mortar facilities and alternating proprietorships while excluding contract brewers. It also includes brewers who may have recently shut down their brewing operations but have not yet been “delisted” by the TTB. As of December 31, 2016, California had the most permitted breweries in the U.S., at 927, and Washington, D.C., had the fewest with 13.

According to Jones, California’s 927 permitted breweries is “almost as many as the entire U.S. total of 974 permits in 1995.” Similarly, the TTB counted 264 total permitted breweries in Florida last year, which is 14 more than the 1990 national count of 250, according to Jones. On a national basis, there are now 2.2 breweries per 100,000 residents, up from 0.7 per 100,000 residents in 2010. And, at the state level, Vermont has the highest number of breweries per capita, at 11.7, followed by Maine (7.7),

Montana (7.6) and Colorado (7.0), Jones reported. “Around the country, per capita brewery measures in many states have more than tripled since 2010,” he wrote. But as overall beer consumption continues decline, Jones said he believes the increasing number of permitted breweries will only create stiffer competition in an already crowded beer category. “With continued declines in per capita consumption of beer on the books for 2016, this year’s beer market is gearing up for another highly competitive, innovative and dynamic battle for share for consumer’s mind, wallet and stomach,” he wrote.

For more stories, check out Brewbound.com

Boston Beer: Recipe Changes In an effort to halt a sales slide for one of its most popular flagship brands, Boston Beer Company has unveiled a reformulated recipe for Samuel Adams Rebel IPA that now features the popular Mosaic hop variety as well as a new grain bill void of caramel malt. It’s the first time in Boston Beer’s 32-year history that the company has “significantly changed” the recipe of a flagship beer, according to founder Jim Koch, and it comes just three years after the product was first introduced nationally. After debuting with strong revenues, sales of Rebel dropped 23 percent last year, according to market research firm IRI. That has forced Boston Beer to re-think how it would attack craft beer’s most popular style category: India Pale Ale. The new Rebel IPA recipe will also include HBC 566, a proprietary hop variety developed with Perrault Farms, a Washington state hop breeder, as well as another experimental variety – HBC 682.

“Our new Rebel IPA is just starting to hit shelves now and we think drinkers will notice a significant flavor difference between the old and the new recipe,” Koch wrote to Brewbound in an email, noting that the Mosaic hop flavor is “predominant.” Combined, the new hop additions will impart lemon, lime, orange and eucalyptus flavors and give Rebel IPA an earthy aroma, the company said in a press release. “Our goal was to showcase the intricate aromas and flavors of hops, especially with new, experimental hop varieties HBC 566 and HBC 682,” Koch said via the release. Boston Beer also altered the Rebel’s grain bill, brewing exclusively with a “special” tworow malt blend.

Photo Courtesy of Boston Beer Company

“By removing the caramel malt, Rebel IPA’s body is less malty, resulting in a cleaner, brighter IPA with more tropical, citrus, and pine-forward notes,” the company noted in the release. First test-marketed in 2013, Rebel IPA was originally brewed with Chinook, Centennial, Cascade, Simcoe and Amarillo hop varieties. Amarillo is the only hop no longer included in the new recipe. Released nationally in 2014, Rebel quickly climbed market re-

search firm IRI Worldwide’s list of top-selling craft brands at multioutlet and convenience stores, ranking ninth with more than 1 million cases sold. Those upward trends continued throughout 2015, as volume sales grew more than 12 percent, according to the firm. But stiffer competition from a growing number of small craft beer producers coupled with a consumer shift toward IPAs with tropical and citrus flavors led to steep declines for Rebel IPA in 2016. Since 2014, the company has also created a number of Rebel line extensions, including Rebel Rider Session IPA, Rebel Rouser Double IPA, Rebel Grapefruit IPA, Rebel Raw IPA and, most recently, Rebel Juiced IPA, which is infused with mango.

Rebel Juiced, which also features Mosaic hops, will be released this month in cans and bottles for a suggested retail price of $7.99 - $9.99 per 6-pack, according to the company. It’s worth noting that the amount of Mosaic hops harvested in Washington and Idaho grew 276 percent since 2014, according to recent data from the United States Department of Agriculture. When asked if the decision to include Mosaic hops in the new Rebel IPA recipe was driven by an increasing consumer demand for its flavor and aroma attributes, Koch said test brews with the hop were the primary driver. “Based on our experience with Mosaic hops and some recent single hop trials in our nano brewery over the past couple of years, we felt in combination with classic American hops and HBC 566 and HBC 682, that Mosaic really contributed to the bright tropical and citrus notes of Rebel IPA,” he wrote to Brewbound in an email.

NEW PRODUCTS THE NEWEST OPTIONS

Coffee & Tea Fogdog Cold Brew is a new brand of hydrodynamic cold brew coffee and tea. A patent-pending hydrodynamic cold extraction process used to create the coffees and teas preserves the natural aromas, flavors and textures of cold brew coffees and teas while also eliminating unpleasant bitterness, according to the manufacturer. Products include a cold brew dark roast coffee and several varieties of cold brew teas, including Scarlet Red and Golden Oolong. Packaged in 12 oz. bottles, the drinks retail for $3.99 and are available at select retailers in metro New York and the Bay Area. For more information, please call Fogdog at (888) 883-6436.

Drinkable Soup Tio Gazpacho has launched two new varieties: Maiz, a soup made with corn, roasted poblano, lime and Fresa, a blend of strawberry, basil and romaine. The new products join the brand’s four other varieties – Clásico, De Sol, Verde and Rosado – all of which are made with non-GMO ingredients. Tio Gazpacho soups are now packaged in 10 oz. bottles and retail for $4.99. They are distributed nationally via Amazon Fresh and available regionally at Fairway, Whole Foods, King’s and Balducci’s. For more information, please call Tio Gazpacho at (305) 395-8130.

Energy Drinks Red Bull North America has expanded its Red Bull Editions line with Red Bull Purple Edition Sugarfree, Red Bull Lime Edition Sugarfree and Red Bull Green Edition, offering tastes of Açaí Berry, Limeade and Kiwi Apple, respectively. Meanwhile, the company’s limited edition Red Bull Summer Edition Kiwi Twist has been renamed as Red Bull Green Edition and the kiwi- and apple-flavored energy drink is now a permanent part of the Editions line. The new products are available nationwide for a suggested retail price of $5.33 for two 12 oz. cans. For more information, please call Red Bull North America at (310) 393-4647.

18 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

CSDs DRY Soda Co., a maker of of lightly sweet, culinary-inspired sodas, has introduced a spicy Ginger DRY Sparkling flavor packaged in 12 oz. cans. Like all DRY Sparkling sodas, the new product is made with four all-natural ingredients and sweetened with cane sugar. It is Non-GMO Project Verified, gluten-free, OU Kosher-certified, caffeine-free, sodium-free, and contains no artificial flavors, colors or sweeteners. The drinks will be available beginning in March at select Kroger and Safeway stores nationwide at a suggested retail price of $5.99 for a 4-pack. For more information, please call DRY Soda at (206) 652-2345.

Functional Beverages Organic and fair trade coconut water company Harmless Harvest has launched a new line of probiotic beverages. Harmless Coconut Probiotics is a four-SKU line of “cultured coconut beverages” that are made with coconut water, coconut meat from young coconuts, active probiotic cultures and fruits. Packaged in 11 oz. bottles, the drinks are USDA certified organic, Fair for Life certified and available in four varieties: Original, Strawberries, Blueberries & Acai, and Mangos & Acerolas. The drinks contain no added thickeners or stabilizers. They are available at Whole Foods stores in five states, including California, New York and Texas, along with a handful of independent natural retailers. Packaged in 11 oz. bottles, the drinks are priced at $4.99. For more information, please call Harmless Harvest at (347) 688-6286. Sportables LLC, a Midwest-based marketer of performance beverages, has announced the launch of WORKOUT tea. The line of all-natural tea-based functional drinks is made with BTE+, a patented black tea extract clinically proven to reduce muscle soreness, increase performance, and reduce recovery time, according to the manufacturer. They are sweetened with cane sugar, erythritol, and stevia, and contain 70 calories per 16 oz. bottle. The line includes two flavored black teas, Lemon and Raspberry, along with Peach Mango Green Tea. The drinks are available in seven states and are sold online for $39.99 for a 12-pack. For more information, please call Sportables at (888) 533-5141.

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CARBON NEUTRAL

NEW PRODUCTS Genius Juice has replaced its organic coconut smoothie line with a new line of “Superfood Smoothies.” The drinks are made with organic almond milk, organic superfoods, including maca and quinoa, and organic plant-based protein. The line comes in three varieties: Original, Coffee, and Vanilla. The products are available at three regions of Whole Foods, Natural Grocers, and several regional grocery chains. They retail for $4.99 per 12 oz. bottle. For more information, please call Genius Juice at (800) 682-7790.

Juice FreshBev LLC has launched RIPE Craft Juices. Produced at the company’s RIPE Craft Juicery in New Haven, Conn., the juices are bottled and high pressure processed within minutes of being extracted. The beverages come in several cranberry flavors as well as grapefruit, pineapple, orange and apple juice varieties. They are available in 12.2 oz. bottles for a suggested retail price of $3.48 and 46 oz. multi-serve pouches for $8.99. The juices are sold nationally at Whole Foods and select regional grocery chains. For more information, please call FreshBev at (475) 227-3296. Natalie’s Orchid Island Juice company has added a new Blood Orange variety to its line of super-premium juices. The juice is made with fresh Sicilian blood oranges from the slopes of Mount Etna, where drastic night and day temperature changes throughout the growing season produce a rich, maroon-colored fresh for which the orange is named. The fruit contains anthocyanins, a flavonoid abundant in antioxidants, giving the blood orange a distinct health edge over other citrus fruits, according to the manufacturer. Packaged in 16 oz. bottles, the juice is sold across the U.S. Prices vary by market. For more information, please call Natalie’s at (772) 465-1122. Simply Beverages has added Simply Peach and Simply Lemonade with Strawberry to its line of all-natural juices and juice drinks. The beverages are made with non-GMO ingredients and contain no preservatives, colors or artificial flavors. They are available in a multi-serve 59 oz. carafe. Simply Peach will be also offered in a single-serve 11.5 oz. bottle. Prices vary by

20 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

market. For more information, please call The Coca-Cola Co. at (404) 676-1533.

Drinkable Yogurts siggi’s, a maker of Icelandic-style yogurt, has introduced a new line of single-serve drinkable yogurts to its portfolio. Made with whole milk and real fruit, the Swedish-style natural, drinkable yogurt was created with convenience and nutrition in mind. It is available in three flavors: Vanilla, Strawberry, and Blueberry. Packaged in 8 oz. bottles, the drinks contain 8 grams of protein and 10 billion probiotic cultures per serving. They contain no artificial preservatives, thickeners, sweeteners, flavors or colors. The products are available in grocery stores nationwide and retail for a suggested price of $1.69. For more information, please call siggi’s at (212) 966-6950. Forager Project has introduced Cashewgurts, a dairy-free alternative to drinkable yogurt. Made with organic cashew milk and live probiotic kefir cultures, flavors include an Unsweetened Plain, Wild Blueberry and Strawberry. They are packaged in 28 oz. bottles and have a suggested retail price of $5.99. The drinks are sold at Whole Foods. For more information, please call Forager Project at (855) 729-5253.

Powders pureLYFT, a patented stir stick containing 125 mg of caffeine, has added three new flavors to its lineup: lemon-lime, orange, and mixed berry. The new products enable consumers to add caffeine – derived from green coffee bean extract fortified with vitamins A and B complex and a hint of fruit flavor – to any beverage. In addition, the company has redesigned the stir stick, adding a flip-bottom that allows consumers to “pop & pour” or keep with the original mixing method of “peel & stir.” The products contain zero calories and are made with non-GMO ingredients. The products are currently available in more than 1,000 campus book and convenience stores through Barnes & Noble and independent retailers, as well as select ShopRite supermarkets and luxury hotels. A single retails for $2.49- $2.99 and a double for $3.99-$4.49. For more information, please call Pure Mix LLC at (908) 322-1234.

Progressive Adult Bevs Smirnoff Spiked Sparkling Seltzer is a new line of low-calorie premium malt beverages. The 4.5 percent ABV drinks contain 1g of carbs and no sugar or artificial sweeteners. Each 12 oz. can contains 90 calories. The products are available nationwide and have a suggested retail price of $8.99 for a 6-pack. For more information, please call Diageo at (203) 229-2100.

Wine Terlato Wines announced a long-term partnership to launch Maxville Wines, a brand that showcases the world-class potential of Napa Valley’s Chiles Valley. Maxville wines are handcrafted by renowned Bordeaux-born winemaker Camille Benitah in a new, state-ofthe-art winery on the Maxville Lake property. Four Maxville wines from will make their U.S. debut in the Terlato portfolio: a Cabernet Sau-

vignon, Petite Sirah, and a Cabernet Franc, which will each retail from $55-$66, and a Sauvignon Blanc that has a suggested retail price of $33. For more information, please call Terlato Wines at (847) 604-8900. Angeline Winery has launched its 2016 Rosé of Pinot Noir. The wine is crafted from 100 percent Pinot Noir grapes sourced from California vineyards. It features delicious aromas of watermelon, nectarine, and ruby red grapefruit, complemented by floral notes of lilies and orange blossoms, according to the winery. The wine is 12.5 percent ABV. It is available nationwide and has a suggested retail price of under $15. For more information, please call Angeline Winery at (707) 823-2404. Prestige Beverage Group has added a red Moscato to its Risata Wines line. Made from premium grapes from Northern Italy’s Piedmont Region, the sweet red wine features juicy ripe raspberry, strawberry and nectarine flavors and finishes sweet, yet with balanced acidity and

NEW PRODUCTS a creamy mouthfeel, according to the producer. It has a suggested retail price of $15.99 for a 750 mL bottle and is available nationally. For more information, please call Prestige Beverage Group at (651) 649-5823. Backpack Wine is a new brand of wine packaged in cans. Available in Cheeky Rosé and Snappy White varieties, the wine blends are available in 4-packs for a suggested retail price of $19.99. The products are available at leading grocery and beverage retailers across the U.S. For more information, please call Salmon Borre Group at (847) 582-1610. Hopes End is an Australian red blend wine crafted to appeal to millennials. Vineyards from around South Australia, with a focus on McLaren Vale, Barossa and Murray Valley, provide the grapes for the blend. Hopes End Red Blend is available nationwide and has a suggested retail price of $11.99 for a 750 mL bottle. For more information, please call Trinchero Family Estates at (707) 302-2709.

Liqueurs Magnum Highland Cream Liqueur is made from a bespoke process of blending premium Speyside Scotch Malt whisky with luxurious cream from Holland. The liqueur features notes of caramel, chocolate and rich toffee, according to the manufacturer. It is bottled at 17 percent ABV. The product is available nationwide for a suggested retail price is $27.99 per 750 mL bottle. For more information, please call Savona Communications at (917) 969-1275. Old Elk Distillery has introduced Nooku, a bourbon cream. The liqueur is made using Old Elk’s straight bourbon, a high-malted barley mash bill matured in new, white oak barrels. Once the Old Elk bourbon is aged a minimum of two years, it is blended with real dairy cream from Creamy Creations in Batavia, N.Y to create the bourbon cream. Nooku has a suggested retail price of $28.99 for a 750 mL bottle and is available at retail stores, restaurants and bars across Colorado. For more information, please call Old Elk Distillery at (970) 419-7420. Fabrizia Spirits, a craft manufacturer of all-natural citrus spirits, has launched Fabrizia Crema

22 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

di Limoncello. The new product is a creamy twist on the brand’s original small batch, awardwinning limoncello. The spirit is crafted using Fabrizia limoncello, which is made with freshly zested lemon rinds, pure grain alcohol and house made simple syrup, and a dairy alcohol cream from Wisconsin. It is available in New Hampshire, Massachusetts and Rhode Island and has a suggested retail price is $18.99 for a 750 mL bottle. For more information, please call Fabrizia Spirits at (617) 201-5310.

Spirits Ezra Brooks Straight Rye is the newest addition to the Ezra Brooks Kentucky Straight Bourbon Whiskey brand. The straight rye whiskey is bottled at 90 proof and offers slightly sweet and oaky tones with a warm, spicy finish, according to the distillery. It is available nationally in 750 mL and 50 mL bottles. The launch coincides with updated look for the brand, including a new corked bottle with a premium matte-finish closure capsule and new label. The new spirit retails for $18.99-$21.99 per 750 mL bottle. For more information, please call Luxco at (314) 772-2626. Copper & Kings American Brandy Co. has launched a limited-release artisanal absinthe. Matured 18 months in Serbian Juniper wood barrels, the double-distilled Muscat brandy base, non-chill filtered spirit is unadulterated by any post distillation infusion of flavors or essences. The absinthe is themed upon a mythological Balkan dragon legend, Zmaj. The label features original fine art by Louisville artist Damon Westenhofer. The 130 proof spirit is available by request only to very select bars and retailers across the Copper & Kings distribution footprint, as well as being sold at the distillery. It has a suggested retail price of $60 for a 750 mL bottle. For more information, please call Copper & Kings at (502) 561-0267. Absolut Vodka has introduced Absolut Lime as the newest addition to its citrus portfolio, which includes Absolut Citron and Absolut Mandrin. The new spirit offers a harmonious balance of full-bodied citrus flavor and a refreshing and light finish, according to the distillery. The product is available nationwide for a suggested retail price of $19.99 (750 mL) and $24.99

(1L). For more information, please call Pernod Ricard USA at (212) 372-5400. Black Cow Pure Milk vodka is a spirit distilled from whey. The base ingredient is sourced from grass-fed milk that is separated into curds and whey. The curds are turned into cheddar cheese and the whey is fermented, distilled, and filtered three times before being hand bottled. The 80 proof vodka has a suggested retail price of $39.99 for a 750 mL bottle and is available in California. For more information, please call DRink PR at (617) 233-8024. Old Elk Distillery has launched Dry Town, a premium brand of vodka and gin. The brand name is derived from the distillery’s home of Fort Collins, which had in the past banned alcohol and was known as a “dry town.” Dry Town Vodka is crafted using a four grain mash, including rye,wheat, corn and barley. Dry Town Gin starts with the distillery’s vodka, which is then distilled with 10 fresh

botanicals – Juniper, orris root, orange, lime, angelica root, black pepper, ginger, lemongrass, French verveine, and sage – through a soak and vapor extraction. The spirits are available in Colorado and retail for $25 per 750 mL bottle. For more information, please call Old Elk Distillery at (970) 419-7420. Sugarlands Distilling Co. has introduced Mark and Digger’s Hazelnut Rum as the newest addition to its award-winning line of spirits. The East Tennessee distillery partnered with distilling legends Mark Ramsey and Digger Manes from the television series “Moonshiners” to develop the 80 proof spirit. The duo combined real hazelnuts and rum in their backwoods still to create the product, which features sweet aromas of toasted hazelnut and brown sugar, according to the distillery. It is available in Tennessee and has a suggested retail price of $24.99. For more information, please call Sugarlands Distilling at (865) 325-1355.

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CHANNEL CHECK WHAT’S HOT AND WHAT’S NOT

SPOTLIGHT CATEGORY: LIQUID COCKTAIL MIXERS Cocktail culture is helping raise the profile of all kinds of products, from smaller carbonated soft drinks to juices and here, the liquid cocktail mixer category. In this space it’s easy to see the separation that happens between on-premise and off -- products aimed toward the home crowd are starting to gain traction, while older products or those with more of a foodservice bent are relatively level. The dust is starting to gather on Mr. & Mrs. T’s, for example, while newer Master of Mixes shows growth through Walmart and spirits channels. Meanwhile, newer products like Tres Agaves, Powell & Mahoney, and even elder entrepreneurial statesman Stirrings are showing above-average momentum. Interesting, illustrative comparison: warhorse Jose Cuervo, up 1.7 percent, while much smaller, much newer Tres Agaves is up 47. COCKTAIL MIXERS BRAND

DOLLAR SALES

CHANGE vs.YEAR EARLIER

Mr & Mrs T

$41,334,708

-3.71%

Jose Cuervo

$39,599,304

1.65%

Master of Mixes

$37,398,892

16.25%

Zing Zang

$26,746,498

10.96%

$9,864,519

3.93%

Angostura

$8,961,566

9.27%

Coco Lopez

$6,676,636

3.37%

Private Label

$5,798,992

3.39%

Tres Agaves

$5,759,631

44.6%

Goya

$5,167,796

4.60%

Roses

Coco Real

$4,016,244

4.06%

Master of Mixes Cocktail Essentials

$3,954,795

45.13%

Master of Mixes Big Bucket

$3,909,935

-3.89%

Powell & Mahoney

$3,568,799

30.38%

$3,278,248

-9.55%

Finest Call

$3,193,104

-0.17%

Master of Mixes Lite

$2,976,416

-15.92%

Stirrings Simple

$2,916,171

16.48%

Stolichnaya

$2,528,352

12.63%

Dailys

$2,347,740

-6.32%

TOPLINE CATEGORY VOLUME $34,312,105,434

3.2%

Energy Drinks

$12,164,643,840

5.13%

Bottled Juices

$7,184,167,424

1.88%

Tea/Coffee

$5,432,063,488

7.09%

Bottled Water

$14,870,251,520

8.20%

Drink Mixes

$859,453,824

-2.90%

Beer

SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 1/4/17

24 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

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CHANNEL CHECK COFFEE BRAND

DOLLAR SALES

CHANGE vs. YEAR EARLIER

International Delight

$63,563,188

1.50%

Starbucks Iced Espresso Classics

$49,195,672

28.90%

Starbucks

$39,943,900

24.99%

Califia

$23,537,494

173.97%

Bolthouse Farms Perfectly Protein

$18,894,506

-10.79%

Caribou Coffee

$9,494,874

376.06%

Stumptown Coffee Roasters

$4,437,561

75.60%

Private Label

$4,354,687

-30.86%

Bolthouse Farms

$4,230,842

-27.55%

Prairie Farms

$2,332,050

30.30%

IMPORTED BEER BRAND

DOLLAR SALES

Corona Extra

$1,703,874,808

CHANGE vs. YEAR EARLIER 10.5%

Modelo Especial

$1,204,129,288

25.6%

Heineken

$750,377,966

2.2%

Dos Equis XX Lager Especial

$347,177,659

7.1%

Stella Artois Lager

$321,647,257

17.5%

Corona Light

$281,304,405

9.2%

Tecate

$142,050,372

-5.3%

Pacifico

$92,047,373

18.2%

Modelo Especial Chelada

$86,974,296

33.6%

Tecate Light

$79,945,085

30.2%

SPARKLING WATER DOLLAR SALES

CHANGE vs. YEAR EARLIER

Private Label

BRAND

$448,132,384

12.12%

Sparkling ICE

$371,065,824

5.64%

La Croix

$234,288,784

65.52%

Perrier

$226,966,320

16.90%

San Pellegrino

$127,206,800

11.29%

Polar

$113,788,712

22.96%

Topo Chico

$63,527,088

27.17%

Schweppes

$63,433,472

14.61%

Sparkling ICE Lemonade

$58,409,040

-17.78%

La Croix Curate

$41,028,020

129.72%

ALMOND MILK DOLLAR SALES

CHANGE vs. YEAR EARLIER

Silk Pure Almond

BRAND

$369,896,759

-7.7%

Blue Diamond Almond Breeze

$365,359,962

9.9%

Private Label

$139,594,209

21.8%

Califia Farms

$55,299,341

89.5%

Silk

$45,633,593

68.5%

So Delicious

$6,173,776

129.2%

Hiland

$4,093,048

10.2%

Other Smith Dairy Products

$618,019

171.7%

Oakhurst

$178,847

-52.1%

Smiths

$153,144

163.7%

SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 1/4/17

26 BEVNET MAGAZINE â&#x20AC;&#x201C; JANUARY/FEBRUARY 2017

TEA BRAND

DOLLAR SALES

CHANGE vs. YEAR EARLIER

AriZona

$664,480,960

-2.03%

Lipton Pure Leaf

$601,294,720

11.93%

Lipton Brisk

$334,863,936

-2.16%

Gold Peak

$328,825,728

38.03%

Lipton

$318,198,880

0.27%

Snapple

$224,395,312

1.29%

Lipton Diet

$196,032,560

3.77%

AriZona Arnold Palmer

$192,268,896

-5.26%

Diet Snapple

$174,013,216

-3.35%

Honest Tea

$58,339,444

21.53%

DOMESTIC BEER BRAND

DOLLAR SALES

CHANGE vs. YEAR EARLIER

Bud Light

$5,997,040,336

-1.0%

Coors Light

$2,436,813,543

1.3%

Budweiser

$2,092,234,760

-1.8%

Miller Lite

$2,059,068,908

1.5%

Michelob Ultra Light

$1,324,398,110

25.0%

Natural Light

$1,030,058,099

-1.4%

Busch Light

$862,037,714

0.6%

Busch

$614,574,577

-0.9%

Miller High Life

$440,999,313

-2.2%

Keystone Light

$419,040,74

-3.8%

Specially Designed for Beverage Formulation

ENERGY DRINKS BRAND

DOLLAR SALES

CHANGE vs. YEAR EARLIER

Red Bull

$2,951,566,592

-0.26%

Monster Energy

$1,550,941,824

5.48%

Red Bull Sugar Free

$729,260,480

10.07%

Monster Energy Zero Ultra

$520,961,664

19.16%

Java Monster

$420,527,712

18.22%

NOS

$402,419,264

-1.21%

Monster Rehab

$313,994,784

0.03%

Monster Energy Lo Carb

$310,998,112

-0.88%

Red Bull The Summer Edition

$293,201,504

76.04%

Rockstar

$260,349,248

-1.34%

BOTTLED WATER BRAND

DOLLAR SALES

CHANGE vs. YEAR EARLIER

Private Label

$2,431,669,760

8.50%

Dasani

$1,106,935,040

4.52%

Aquafina

$1,083,125,760

6.93%

Nestle Pure Life

$918,210,304

3.37%

Glaceau Smart Water

$872,743,808

11.27%

Poland Spring

$690,022,208

8.22%

Glaceau Vitamin Water

$506,015,232

4.91%

Deep Park

$442,442,752

5.97%

Fiji

$382,333,728

25.04%

Ozarka

$344,019,328

-4.47%

SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 1/4/17

PurCafÂ® Organic Caffeine Responsibly sourced and sustainably grown.

Email Jackson for pricing: info@appliedfoods.com www.appliedfoods.com

GERRY’S INSIGHTS BY GERRY KHERMOUCH

A Snail’s Pace As a guy who last year put out 166 issues of my newsletter Beverage Business Insights (with an assist from my able colleague Jim Sullivan), I’m all about fast. Heck, I’m a New Yorker, too, and New Yorkers move fast. So anything having to do with slow is an adjustment for me. You’re right to assume I’m not a mindfulness kind of guy – though I’m mindful of that limitation. Looking to make (lose?) a bit of progress on the issue, I recently slowed my roll enough to pop into the Slow Wine 2017 tasting in Eataly New York’s downtown branch. Slow Wine is an offshoot of the Slow Food movement that got started in Italy in 1986 during a protest of a McDonald’s slated to be built next to the Spanish Steps in Rome. It’s a rejoinder to fast food and all it stands for in the deterioration of the food economy and our diets, as well as a defense of regional culinary traditions and a slower pace of life. As I sipped a few of the wines from nearly 100 Italian winemakers represented at the tasting – and stared at Slow Food’s snail emblem – I got to thinking about the tortoise-versus-hare debate in beverages. To some entrepreneurs, the mantra is “Go big or go home.” At conferences they’ll peg the cost of entry anywhere from $15 million to $30 mil and beyond, saying you’re deluding yourself if you think you’ll be able to create a national brand with anything less to start. If you’re a well-heeled entrepreneur with a credible track record who’s trying to launch a product of broad appeal, that may well make sense. (Think Mike Repole with Body Armor or Lance Collins with Core Water, though even those brands had brief incubation periods before doing the national landgrab.) Drawing on a receptive network of investors, distributors and retailers, you can scale up pretty quickly, getting into most regions and retail channels within your first year or two. Of course, the brand still has to resonate with consumers, meaning the stakes are that much higher if market feedback shows that major adjustments are required

28 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

to create it. Anyone remember Function Drinks? That’s a prime example of a high-flying startup with an all-star list of investors and allies who essentially tried to build their aircraft while piloting its first transcontinental flight. The untested brand raised big money at a high valuation in investors’ belief that it could fill the void created by Coca-Cola’s snatching of Vitaminwater from the independent distribution network. Lots of cash wasted, and several down rounds later, Sunsweet acquired the floundering brand for a presumed pittance and pulled it back just to Southern California, where it probably should have dwelled a while in the first place, before the product vacuum got everyone’s blood racing. That’s just one example of what can go wrong for those who try to move too fast. Still, in certain precincts, I pick up a certain disdain these days for entrepreneurs who attempt to start small, with modest capital resources and tiny staffs, aiming to build their brand organically, minimizing the cash burn, even trying to get to a cashflow-neutral position within a few years. “Nice if all you want is to have a little niche brand,” is what I hear, as if not swinging for the fences inevitably rules out getting around the bases in the long run. Despite my own personal aversion to

slow-moving objects, I still find the takeit-slow approach appealing, and worry that some entrepreneurs are in too great a rush to get past the teething stage, find an institutional investment partner and hit the gas. As I’ve often inveighed in these pages, raising lots of capital not only can distort your priorities, but it can put you on a slippery slope to losing control of your company. That’s not to mention the side effects, like everything getting more expensive for you once the trade channel realizes you have some dough. Retailers seem less likely to give a pass on slotting to a beverage marketer who just raised $10 million. And despite its being an often-expressed fear, I really can’t think of too many early-stage brands that found themselves leapfrogged by more aggressive copycats because they dawdled too long in the incubation phase. So let me raise my glass of Le Caniette’s Piceno Morellone 2011 to entrepreneurs who’ve been content to take it slow, enjoying the journey rather than racing to the destination of an exit to a strategic. Going slow by no means attests to a lack of ambition: at the right time, when their product proposition has been proved and awareness has built in the channels they’ve chosen to ply, they’re willing to hit the gas. Take Essentia Water, the alkaline bot-

tled water brand founded by a real estate guy (and beverage novice), Ken Uptain, who operated it with minimal resources for a decade. He aimed narrowly at the natural foods retail channel and steered away from things like DSD distribution, marketing campaigns and even much of a staff, in the interest of growing the brand organically and not getting on the capitalraising treadmill. Only once he’d built a formidable base in natural was Uptain finally ready to do the landgrab, hiring seasoned beverage operatives, recruiting scores of DSD houses, and pulling in substantial tranches of capital from the likes of Castanea Partners and First Beverage Group. Though signs so far are good, it’s by no means assured that the brand will truly break out. But it’s making the effort from a very solid base. Ditto for Q Drinks, the mixer brand that started with a single tonic water entry launched by a young entrepreneur, Jordan

Silbert. Though the tonic water seems to have been quickly embraced by retailers, Silbert demonstrated a surprising degree of patience for a guy just out of college, for years refusing their entreaties to expand the line into other mixer stalwarts until he’d gotten his core entry properly seeded. True, Jordan had the advantage of continued advice from Honest Tea co-founder Barry Nalebuff, who’d been through the rigors of building a startup and is an investor and mentor, but how many young guys actually listen to or follow such advice? After patiently testing his concept, then deliberately adding line extensions and new packaging configurations, Silbert finally was ready to go big, pulling in $11 million last year and building a serious staff of seasoned beverage execs. Though many other mixer brands have come along during these years, they don’t seem to have interrupted Q’s growth in the least. Incidentally, the maker of that Piceno

Morellone that I enjoyed so much, a vintner from the Marche region of Italy called Le Caniette, itself has been exceedingly willing to take it slow, going organic back in 1996, growing on only 40 acres and producing just 120,000 bottles per year. They seem to be prospering, like other small producers exhibiting at Slow Wine. And fittingly, on my way out through the retail area, I passed a rack displaying four and a half shelves’ worth of Grown Up Soda – another take-it-slow brand, and now the only American soft drink brand stocked in Eataly’s U.S. units. GuS may or may not eventually break out, but it’s weathered a lot of storms in a cluttered boutiquesoda segment and has its legion of ardent loyalists, including Eataly. That’s no mean achievement in this frenetic business. Longtime beverage-watcher Gerry Khermouch is executive editor of Beverage Business Insights, a twice-weekly e-newsletter covering the nonalcoholic beverage sector.

SHOW PREVIEW BY RAY LATIF

WHAT

WHERE

WHEN

WHO

Natural Products

Anaheim, Calif.

Education and Events:

More than 315 different

Expo West 2017

Anaheim Convention Center

March 8 – 12, 2017

beverage brands

Anaheim Hilton and

Trade Show:

and approximately

Anaheim Marriott

March 9 – 12, 2017

80,000 attendees

KEYNOTE SPEAKERS Tuesday, March 9: 9 a.m. – 12 p.m.

Friday, March 10: 11:30 a.m. – 12:30 p.m.

Saturday, March 11: 9 a.m. – 10:15 a.m.

Michelle Poler – Founder, Hello Fears

Denise Morrison – President & CEO,

Doug Rauch – Co-CEO, Conscious

Campbell Soup Company

Capitalistm, inc; Founder and President, DailyTable

ALPHABETICAL EXHIBITOR LIST Exhibitor

Booth

Exhibitor

Booth

Exhibitor

Booth

Exhibitor

3 Water

M513

Bowery Coffee Company

8020

Clear Alaskan Glacial Water

H538

Essentia Water, Inc.

Booth 5758

4SOME Health

H610

Boxed Water Is Better LLC

8915

Clearly Kombucha

5591

Eternal Water

M209

51FIFTY Enterprises

H710

BrainGear

1077

Coco Libre

5306

EVERGREEN Juices Inc.

3867

Acai Roots

3109

BrainGear

H322

Coco5

H607

Evolution Fresh

4396

Brands Within Reach LLC

5617

Cocoa Metro

H1220

Evolve

1778

Brew Dr. Kombucha

H828

Cocomazing

3133

Farmhouse Culture

5366 H817

Alkazone/Better Health Lab, Inc.

2898A

ALO Drinks by SPI West Port, Inc.

4344

Bruce Cost Ginger Ale

3067

Coconut Beach

1890

Fire Cider

ALOHA

8517

BRUCE TEA

5548

Coffee Blocks

M803

FitPro USA

945

Argo Tea

5867

Bucha Live Kombucha

589

CORE

Five Star Foodies

8912

Avitae Caffeinated Water

5893

Buddha Brands Co.

5853

Crio Bru

Forager Project

5165

Buddha Teas

H201

Texas Tea

693

Formula Four Beverages (USA) Inc.

H208

Back to Nature Foods Co., LLC

3857

Bai Brands, LLC

5388

149

Dahlicious, LLC

5166

C2O Pure Coconut Water, LLC

5791

Daily Greens

5647

H508

Califia Farms

5592

Bare Bones Broth Co.

H1204

Caliwater

793

Barsotti Family Juice Co., Inc

H412

Cansi US Inc.

9431

BEET IT USA, INC.

M103 M508

H1122

Bulletproof Digital, Inc

Banana Wave Bananamilk

Berri Pro

391

Cascade Mountain Spring Water

9629

Bhakti

5717

Cave Shake

M305

Big Tree Farms

2200

Caveman Coffee Co

H102

Bio-K+ USA Inc.

1535

Cawston Press

790 593

Black Medicine

M309

Celebes Coconut Corp.

BlackMP Living Water

H1241

Celsius, Inc.

BLK Beverages

5470

Ceres Fruit Juice

4079

Blue Monkey

4066

C-Fresh

4339

Blume Honey Water LLC

9631

Chaasi

Bonafide Provisions

H805

Chameleon Cold Brew

5461

Bonafide Provisions

4650

Cheribundi

4895

Bonta Hydration

M216

Chobani

3639

CideRoad Organic Switchel

8515

30 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

H1007

H1023

Four Sigmatic

5298

Giggle

H408

Ginger People, The

4197

Dark Dog Organic Energy Drink

590

DELLOS F&B CO., LTD

5750

Ginseng Up Corp

5397

Detox Water

594

Glossop's Syrup

8716

Diabolo Beverages

1994

5471

Doctor D's Delicious Water Kefir

GoLive Probiotic & Prebiotic Products

H327

GoodBelly by NextFoods

2484

Dream Water

5019

Gradys Cold Brew

H530

DRINKmaple

8613

Green Sheep Water

H1030

drinkme Beverage Co.

5313

GURU Beverage Co.

2335

DRY Soda Co.

M317

H2rOse, LLC

9667

EJZ Foods, Inc/Evolve Kefir/ ZenSoy

8714

Hain Celestial Group, The

2736

Elite Naturel USA LLC

3212

Hansen's Natural

Elite Naturel USA LLC

2712

Emergen-C

1655

Ener-C

1013

Happy Tree Maple Water

2561 H1006

Harmless Harvest

5171

Harney & Sons Tea Co

3898

Harvest Soul Organic Juices

H213

Exhibitor

Booth

Exhibitor

Hawaii Volcanic Beverages

Booth 9621

Leaner Creamer

H626

Pacific Foods

2531

Taste Nirvana Int'l Inc.

5778

Hawaiian Ola

H1010

LifeAID Beverage Co

Palm and Bean

5065

Tazo Tea

5058

Health-Ade Kombucha

1892

LifeIce Inc.

8908

Penta Water LLC

3194

Tea Drops

8050

HEALTHEE

3208

Lifeway Foods, Inc.

3838

Perfect Hydration

8301

Teaonic

9319

HEALTHEE

5180

Lifeway Foods, Inc.

1781

8002

Healthy Skoop

H804

Lily of the Desert

1829

Phenomenal Foods, LLC dba Nomva

Hemp2o

H606

LIVE SODA

5679

Pickle Juice Company, The

H1128

Heyday Beverage Co., LLC

H414

Lorina, Inc.

1585

H-Factor

M313

Lotus Elixirs

8502

967

Hiball / Alta Palla

2343

Love Beets

147

High Brew Coffee

5668

Macaccino

9611

Hint, Inc

4171

MALK Organics

8701

Homemade Harvey

H209

Mamma Chia

2721

Honest Tea

2566

Mangajo Drinks Co.

H615

Honeydrop Beverages

5373

Manzana Products CO Inc

2699

Humm Kombucha

H806

Maple Guild, The

M611

Icelandic Glacial

5536

Market Connections Group

5578

ICONIC

5789

Marley Beverage Company

5618

IGZU LLC

9647

Marquis Beverages

8406

illy

2575

MatchaBar

8616

IMMORDL

M115

MET-Rx Nutrition, Inc.

2767

In Zone Brands, Inc.

5749

Milkadamia

H1202

Intelligentsia Coffee

H612

Mooala

M201

Invo Coconut Water

5375

Moonshine Sweet Tea

H1038

iQ Juice

690

Mr. Mak's

9643

ITO EN (North America), Inc.

4157

MUNKIJO

8508

IZZE Beverage Company

2847

Naked Juice & IZZE Sparkling Beverages

2851

Natural Bliss

H118

Jayone Foods, Inc.

2876

Jones Soda

4672

Juice Served Here

5529

JUICEOLOGY

9208

Juicero

H132

NATUREWISE Ashwagandha Super Drinks

H1113

Nestle Waters North America

2869

JUST Goods, Inc.

M808

New Barn

H1028

Karma Wellness Water

5772

Newtree

911

Kate Farms

5682

NOA Potions AB

8045

Kenya Purple Tea, LLC

M801

Numi Organic Tea

2913

Ketologie, LLC

M304

Numo Broth

H839

Kettle & Fire Bone Broth

H524

nutpods

H407

KeVita Sparkling Probiotic

4763

NutriBlade

H422

Kill Cliff Inc.

M417

Nuun

2056

Kin Chia Kohana Coffee

689

O2 Living

M602

H1014

Obrigado

H427

Koia Plant Powered Nutrition

8032

Odwalla, Inc.

2572

Kombucha Dog

M811

OJO Fortified Eye Care Nectar

1400

Kona Deep

8522

OKF Corporation

4574

Kor Shots

M812

Oregon Chai

3011

Kuju Coffee

M804

Orgain, Inc.

2302

Kuli Kuli

2494

Organic Gemini Tigernuts

9018

L.A. Libations

5071

Organic Valley

3028

La Colombe

4084

organicgirl, LLC

9607

LaCroix Sparkling Water

4665

Outernational Brands, Inc.

5369

Lakewood Organic Juice Co.

2420

Owl's Brew

5552

PIQUE TEA

Booth

200

Pocas International

9210

Pok Pok Som

H313

Pop and Bottle Inc

8323

Powell & Mahoney Ltd

M101

powercrunch

4373

Powerful Yogurt

H203

Prana Chai North America

M503

Pressery

H1104

Pure Brazilian LLC

H526

Pure Steeps

9304

Purple Life Laboratories, LLC

H501

Q Drinks

5474

Rau Chocolate

9608

REBBL

9219

Rebel Kitchen

8617

Red Ace

1875

Reed's Inc

3673

Reliant Hydration Inc.

Exhibitor

Booth

teapigs US

8615

Teeccino

3020

Temple Turmeric

5176

The a2 Milk Company

H1208

The Original Oatly

M718

The Water Kefir People

M711

Third Street

4090

Three Trees

9001

Tio Gazpacho

8418

Tisane Alkaline Teas

9413

Torani Syrups

8914

Tree Top, Inc.

H514

Treo Brands Inc.

M517

True Toniqs

5804

TruVibe Organics

8505

Tu Me Beverage Company

H110

Uncle Lee's Tea

2805

Uncle Matt's Organic, Inc.

3113

Unique Beverage Co. LLC

H802

UPTIME Energy

8719

4169

UVO Sun Protective Supplement

9679

Rethink Water

9641

Veggemo

H716

Revive Kombucha

5726

Verday Chlorophyll Water

3996

RoliRoti & Butchers Bone Broth

M113

Veri Soda Company

2221

RUNA

5378

Vita Coco

3050

Rushmore Superfoods

1472

Vive Organic

8014

Sambazon

2205

Voss Water of Norway

5475

Saratoga Spring Water Co.

8509

Wai Koko Coconut Water

5385

Sherpa Power Tea

H512 5170

Waiakea Hawaiian Volcanic Water

H1233

Shotz Natural Energy siggi's dairy

5523

Simply Juices & Drinks

2572

SIPP eco beverage co.

9010

Slingshot Foods

9418

Smart Juices LLC

4548

Smart Juices LLC

3117

WANU Water

181

Wei Pantry

H510

WhiteWave Foods

2441

Whole e Nature

8718

Wild Poppy Juice Company

8015

Wild Tonic

H929

Wize Monkey

M202

WTRMLN WTR

9308

Xing Tea - Aspen Pure Water

H217

Solti Beverages

9116

Sparkling ICE / Talking Rain Beverage Co.

9305

Spindrift Beverage Co.

5794

Yakult USA

1782

Splash Beverage Group

5547

Yoatz

8705

Sri Lanka Gold

H1123

Yoot Tea

8722

Steaz

2513

Zevia LLC

4488

Stirrings Original Craft Cocktail

9615

ZICO coconut water

2569

Stonyfield Organic

2338

Zola

2609

Stur

5583

ZUPA NOMA

H515

SuckerPunch Gourmet, Inc.

H909

Suja Juice

5078

SHOW REVIEW BY MARTIN CABALLERO

What Happened at BevNET Live Winter 2016

NEW BEVERAGE SHOWDOWN 12

From investors to innovators and beyond, an array of the beverage industry’s best and brightest came together to at the Loews Santa Monica Beach Hotel in Los Angeles, California on Dec. 5-6 for the winter edition of BevNET Live 2016. Opening the first day’s program, Doug Evans, founder of Juicero, discussed category disruption, encouraging entrepreneurs to look for inspiration outside of their own industry. As an example, he cited how microcomputers sparked the idea for Juicero, which includes technology that allows users to control the machine from their smartphones. Getting from the counter to the supermarket, Kevin Davis, Chairman and CEO of Bristol Farms, emphasized the importance of having a product with a clear purpose or that answers a specific need before going to market. Industry veteran Lance Collins, who helped launch Core Hydration, among other brands, encouraged entrepreneurs to take a holistic approach in building their companies. Of his approach, he said “I’m not just making a product. I’m making a brand.” Gerry David, CEO of Celsius, and Vanessa Walker, the company’s EVP of Sales and Mar-

Putting an innovative and approachable spin on an established niche health drink, Dallas, Tex.based Mother Beverage won the 12th edition of BevNET Live’s New Beverage Showdown in Santa Monica, Calif. on the strength of its organic fruit and herb-infused apple cider vinegars. The two-day competition gave 15 emerging brands a chance to share their product and business plan with the BevNET Live audience and a panel of expert judges, with the winner receiving $10,000 in cash and prizes. ParticiBevNET Live Winter 2016 stage in Santa Monica, CA.

pants were spread across a wide range of categories, including coffee, functional beverages, sports drinks and bitters. After all 15 brands presented to the judges on day one, IMMORDL, Venice Cold Brew, Shaka Tea Sunniva Super Coffee, Mother Beverage and 1821 Bitters were selected to progress to the final round via a combination of audience voting and judges’ ruling. In the final, BevNET founder and CEO John Craven was joined on the judges panel by Ken Sad-

Doug Evans, founder of Juicero.

owsky, a Senior Beverage Advisor at Verlinvest, Kim Paige, vice president of marketing and innovation at Coca-Cola VEB, Nicole Fry, Managing Partner at First Beverage Group and Greg Fleishman, co-founder of Purely Righteous Brands. Mother ultimately prevailed from the competitive field, earning praise from the judges for its lowsugar content and intriguing flavor combinations. Speaking with BevNET after their win, Mother co-founders Stephen and Allison Ellsworth echoed the judging panel’s comments regarding the importance of having clean, clear

Lance Collins, beverage industry veteran who helped launch Core Hydration.

keting, discussed their successful efforts in getting the brand back on track by focusing on SKU reduction and a new upscale identity. The opening day’s morning session concluded with acknowledgements and BevNET’s Best of 2016

32 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

awards; Bai took home brand of the year honors. Day Two kicked off with a “State of the Market” address from Kathryn Peters, executive vice president of business development at SPINS, and Brian Reed, principal at IRI. The pair highlighted

labeling and said they planned to use the prize winnings to make improvements to their production facility and improve efficiency.

the strength of the better-for-you trend across all beverage categories in the current marketplace, noting that natural beverages are driving 40 percent of dollar growth in the industry. Next, KarpReilly analyst Drew Skolnik and vice president Ryan Greene chronicled their experiences in making investments in beverage brands such as KeVita, Spindrift, LifeAID and Zola. Other financial matters involved a pair of smaller private equity firms: Melissa Baker,

Jody Levy, co-founder of WTRMLN WTR.

president and CEO of Fenwick Brands, spoke about her experience in identifying high-potential brands, usually in the $1-5 million revenue range, for investment. Later, Arif Fazal,

founder and managing director of Blueberry Ventures, which typically makes first-stage investments valued at about $500,000, underlined the importance of prioritizing slow and

steady progress over rapid results. As the co-founder of WTRMLN WTR, Jody Levy has seen the company experience tremendous growth since launching in 2013. Drawing on the lessons of her experience, she discussed the importance of establishing a clear voice and a dedicated mission when starting a brand. Dairy and dairysubstitute products were the topics of Ripple co-founders’ Adam Lowry and Neil Renninger’s presentation, during which they

asked pointed questions about the validity of health claims related to almond milk. Following a presentation by LifeAID’s Orion Melehan that tracked his steps in leading a revamp of the struggling brand, Courtney Reum, co-founder of VEEV Spirits, closed out the BevNET Live Winter 2016 program with a discussion of how the non-alcoholic beverage industry could apply some of the growth strategies that have proved successful in the liquor and spirits category.

SHOW REVIEW

BY CHRIS FURNARI, JUSTIN KENDALL,MEGAN McGINNES

Latest Craft Trends, Impact of Marijuana on Alcohol Sales Discussed at December Brewbound Session More than 200 beer industry professionals descended upon San Diego in December to attend the bi-annual Brewbound Session, hosted at the Paradise Point Resort & Spa. In addition to sampling numerous beer and cider products from across the U.S., attendees heard insights from more than a dozen of the beer industry’s top entrepreneurs and executives. Discussions ranged from industry trends to mergers and acquisitions and the impact marijuana could have on future alcohol sales, among other topics. In a conversation with Brewbound editor Chris Furnari, Pabst chairman Eugene Kashper discussed the hiring of former Duvel USA executive Simon Thorpe as the new Pabst CEO, and he shared his company’s craft partnership strategy. “We’re on the same page in terms of find-

Eugene Kashper, Pabst chairman

ing the best fit to build the right portfolio over the never five, 10 years,” Kashper said of his relationship with Thorpe. “We’re looking to build the right portfolio of brands and breweries that are complementary.” 34 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

Kashper said his offer to potential partners is the ability to grow by leveraging his company’s supply chain infrastructure, nationwide distribution network and strong retail relationships. He added that Pabst was seeking partners for long-term, “arms-length agreements,” similar to the company’s relationship with Vermont Hard Cider Company. During the interview, Kashper also said he wanted to find the “right partners” within the “high-end space and maximize the potential of those brands.” In some cases, partners would retain control of their brand, oversee innovation efforts and not have to sell an equity stake in order to access additional production capacity or utilize Pabst’s sales teams. “What we’re looking for are people who don’t want to sell,” Kashper said.

of that transaction, which was is slated to begin this quarter, were not disclosed, but Pabst executives have confirmed that New Holland did not sell an equity stake. Despite its appetite for craft deals, Pabst’s heritage brand portfolio will remain the company’s number one priority, Kashper said during the conference. “That makes our business go,” he said. Brewers Association chief economist Bart Watson and National Beer Wholesalers Association chief economist Lester Jones also took the stage to crunch the latest craft numbers and explain last year’s slowdown amongst many top established craft breweries. “We are moving to a period of slowing growth,” Watson said. “But even flat markets still have growth.” “It’s just a slow, gradual maturation

Vivien Azer, analyst with Cowen and Company

That was the case for New Holland Brewing, a Michigan-based craft brewery that inked a deal with Pabst just two weeks after Kashper laid out his approach to craft partnerships. Specific financial terms

of the industry,” Jones added. “The craft index is still positive; it’s just not as strong as it was in the past.” Of note, craft beer orders peaked in July 2015, with only a little rebound in

the first half of 2016. However, the higher levels couldn’t be sustained, and that has signaled some concern from many established players in the space. The pair also said it’s getting harder to track where people are drinking craft beer, which impacts the accuracy of available retail data. More people are drinking at more non-traditional locations such as beer festivals and taprooms, while drinking in bars, restaurants and clubs is on the decline. Taproom business also continues to be a bright spot for breweries, the pair noted. Through the first three quarters of 2016, breweries had already surpassed 2015’s total of barrels for use by the breweries themselves, Watson said. “It’s quite possible we will get to 2.5 million barrels sold directly at breweries and brewpubs,” Watson said. In a separate presentation, Cowen and Company analyst Vivien Azer explained the negative effect marijuana is having on alcohol sales and the need for the industry to reach new customers. Marijuana is now legal for recreational use in eight states and available for medical use in many more, Azer noted. In states where marijuana has been legalized, use increases, especially in the 26

and older age group, and even more so among men. Meanwhile, alcohol usage decreases, she said. Azer suggested that brewers “double down” on Hispanics and women, who show lower use of cannabis, to win their business.

One craft brewery doubling down on that demographic is San Diego’s Border X Brewing, which used its Latino-fusion flair to win Startup Brewery Challenge 7, also held during the session. Brewery founder David Favela beat out five other participants with his true-tobrand story and logo, his strong connections to the Hispanic community, and his contagious passion for bringing Latinofusion brews to San Diego consumers. Brewbound Session attendees also heard pitches from the owners at five other companies — Friends and Allies Brewing, Alamo Beer Company, M.I.A. Beer Company, Binghamton Brewing Co., and Shannon Brewing Co. — who presented during the bi-annual business pitch competition, sponsored by Craft Brew Alliance, which gives new beer companies an opportunity to showcase their business plans to five expert judges. During his pitch, Favela described how the almost two-year-old brewery was created to serve the Latino community, one that he felt was going unnoticed by craft brewers, “especially in terms of our palette,” he said. He also shared how Border X opened its first taproom on Logan Avenue, one of the toughest neighborhoods in San Diego, and described how the tasting room also serves street tacos, a variety of beers, and regularly features live music. The brewery, he said, has helped to rejuvenate an economically depressed area of the city over the last two years. Favela won a $5,000 grand prize, which will be used to fuel the growth of his emerging business, as well as an all-expenses-paid trip to Portland, Ore., where he’ll have the chance to meet with and learn from CBA executives.

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SHOW REVIEW BY BRAD AVERY

2017 Winter Fancy Food Show The 2017 Winter Fancy Food Show in San Francisco, Calif. wrapped up Tuesday, concluding the annual three-day specialty foods convention. While primarily a showcase for food products, beverage exhibitors offered up a range of innovative new products and line extensions. Among the most notable trends this year, the show featured several new probiotic drinks as more companies embrace growing consumer interest in digestive health. Meanwhile, the fast-growing cold brew coffee segment continues to expand, with a number of brands featuring new technology and experimental formulations at the event. On the marketing front, established brands are saddling up with new ad campaigns to make the move on millennial consumers.

Fogdog Brings New Innovations to Cold Brew

As cold brewing continues its ascent in the coffee and tea categories, brands are often forced to reckon with the long hours it takes to brew a batch of product. But one company thinks it’s found a fix. Fogdog, a California-based company founded by tech entrepreneur Alex Siow, has developed a patent-pending hydrodynamic technology capable of making a batch of cold brew coffee or tea in approximately 15-20 minutes. Developed in partnership with Winnie Yu, the owner of Berkeley-based specialty tea cafe Teance, the coffee appears cloudier than regular 36 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

black cold brews because the process extracts more natural oils from the coffee bean and also provides for a thicker flavor. The brand’s RTD line is set to launch in February with a sumatra dark roast coffee and scarlet red and golden oolong teas in 12 oz. bottles for $3.99. Fogdog also markets a line of multi-serve pouches primarily designed for offices and foodservice. The company, which exhibited as part of the Fancy Food Show’s “New Brands on the Shelf Pavilion,” is currently in a seed round and largely funded through friends and family, Siow said. Fogdog may also begin manufacturing its machines for sale to restaurants in the future. Down the road from Fogdog is Jittery John’s, which premiered two new cold brew products at this year’s show: a Colombian black coffee and a Brazil Nut Milk Mocha, a spinoff of the brand’s Bra-

During the Fancy Food Show, the company revealed its forthcoming “Stay Grounded” campaign, designed to reach millennial female consumers through targeted marketing on social and digital media channels. The goal is to create an emotional connection with consumers by communicating the health benefits of matcha, according to Ito En VP of Marketing Harris Goldman. The company worked with Engine, a branding firm in New York, to create the campaign, which promotes matcha as a natural source of energy that will help busy consumers stay balanced and grounded. Creative content includes short videos and ads that will appear on YouTube and Instagram as sponsored posts. The company is also aligning with influential food bloggers to help promote the campaign. In preparation for the launch,

zil Nut Milk coffee, which launched last year. The brand will be rolling its black coffees out to about 150 Target stores next month, bringing Jittery John’s total store count to roughly 450.

Ito En has shored up its social media presence, harmonizing account handles for its Matcha Love line. Meanwhile the company is working with key retailers, including Kroger, to extend the campaign to trade promotion, with the aim of driving trial through point-of-purchase displays. Buddha Teas is also aiming to educate about matcha’s natural energy benefits, showing off an innovative design at the convention. The company’s Matcha Now line is marketed as a healthy alternative to energy

Matcha for Millennials; Could Cold Tea Become a Hot Segment? Ito En North America is looking to teach more consumers about matcha and is preparing to kick off a new marketing initiative for its Matcha Love brand.

drinks and has a unique take on the RTD format. The brand’s 12 oz. bottle comes with matcha powder included in the cap; when twisted, the cap releases the ground green tea into water. Matcha Now comes in two SKUs – Lightly Sweet and 100% Pure – and launched nationally in Sprouts last year. It retails at $3.49 per bottle. Like Fogdog, Secret Squirrel is also targeting cold brew tea and coffee with the launch of two new products. The company, which markets a line of high pressure processed (HPP) cold brew coffee, debuted its Rwanda Black Tea and Sencha Green Tea at the Fancy Food Show. Packaged in 12 oz. bottles, the new teas come a few months after Secret Squirrel’s acquisition by Pure Steeps, a subsidiary of tea conglomerate Harris Freeman. Pure Steeps recently acquired the brand Kombucha Wonder Drink and will soon

berry, blueberry/acai, and mango/acerola varieties. According to Harmless Harvest CEO Giannella Alvarez, the new beverages make use of parts of the coconut that were not being used in the brand’s coconut water line, blending coconut meat with active probiotic cultures. Dahlicious Lassi, a maker of Indianstyle probiotic yogurt drinks, launched a new line of organic almond milk kefir The dairy-free beverages a packaged in 24 oz. bottles and contain 6g of protein and 15 billion probiotics, per one cup serving. The line comes in mango, vanilla, and strawberry varieties. Tartly is a new line of sparkling fruit shrub drinks that the company promotes as a healthy alternative to soda. Made with carbonated water, fruit juice, apple cider vinegar and cane sugar, Tartly cofounder Diana Tran Wang described the

contains the egg white from five eggs and is sweetened with 9g of sugar. The drinks contain no cholesterol or fat and are shelf-stable for up to three weeks. Los Angeles-based cold-pressed juice company Juice Served Here debuted three new juices at the show. Pearl Punch mixes chia with cucumber, strawberry, grape, papaya, and pearl powder; Chia Greens contains cucumber, chia seed, green apple, spinach, lime, aloe and vegan probiotics; The Cali, contains orange, grapefruit, pomegranate, silica, and tangerine oil. Two macadamia milk companies continue to make headway in the dairy alternative category. Australia-based Milkadamia introduced its Latte Da barista formula at the show. The company, which launched 18 months ago, sources nuts from its own plantations. Meanwhile, in the U.S., Royal Hawaiian is working

add a third, as-yet unannounced brand to the portfolio, according to vice president of R&D and operations Sai Chaluvadi.

drinks as “kombucha light.” The drinks come in 12 oz. bottles and are available in three flavors: Lime Mint, Blueberry Lemon, Ginger Pear. Tartly is soon launching a 40-pack option.

on a packaging change to highlight the differences between its sweetened and unsweetened products. Suja has added two new varieties to its line of drinking vinegars. The cold-pressed juice company introduced Grapefruit Jalapeno and Lemongrass Lime, each of which are made with a coconut vinegar base. The former is sold exclusively at Target and is part of the retailer’s “Made to Matter” program, while the latter is only available at Whole Foods stores

Functional Options Continue To Grow The Winter Fancy Food Show also offered up a raft of exhibitors playing across categories and launching new functional drinks. Harmless Harvest premiered its new line of Harmless Coconut Probiotics beverages, which come in original, straw-

More New Products At The Show Eggurt is a “cultured egg white” beverage that promotes 16g of protein per 8 oz. bottle. Based on a Japanese recipe, Eggurt is made with egg whites that undergo lactic acid fermentation. Each bottle

Brands evolve, so do industries, and when they do, so must the

Here’s the full arsenal of this year’s awards:

awards that govern those industries. In that vein, as 2016 wound down, we revamped our annual awards a bit in order to recognize innovation, evolution, execution and great taste while deemphasizing particular beverage categories. We kept some of its major, business-oriented awards in place, but also created two new classes: Rising Stars, those brands and companies whose performance over the past year has put them into position to create long-term change within the industry, and Best New Products, an award that does what we’ve always done with the awards, which is recognize the new, innovative, flavorful, fun products that are at the heart of beverage entrepreneurship. The awards were unveiled during BevNET Live Santa Monica in December, followed by an interview with the Bai’s founder and executive team in which the role of innovation – something that underlay all of the companies who received awards – was discussed. “Innovation was in our DNA,” said Bai founder Ben Weiss. “It’s been in our DNA since 2010, when we got started, and it will continue to be in our DNA. We didn’t empty the clip.”

As news of an auction for the company swirled around the industry throughout the fall, it was already apparent to BevNET that, regardless of result, Bai was the brand of the year. Starting with a Super Bowl advertisement and large media investment that made the already fast-growing product more recognizable to new consumers, the high-level sales execution that accompanied Bai’s early years has finally been matched on the brand marketing side. The late addition of a star like Justin Timberlake as investor and brand ambassador put the cap on the company’s year-long personality explosion. On the innovation side, Bai also demonstrated ambition and originality that superseded any deal talk, taking what had been a dedicated non-carb program and filling out varieties in several new categories – a sparkling water, a revamped bottled water, teas, and finally Bai Black, a promising new line of traditional carbonated drinks with flavors that throw consumers back to the products that

38 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

built the industry that Bai has worked so furiously to overhaul. These extensions show not just a line of Vitaminwater-like enhanced waters, but a confident master brand platform that should prove to be a potent challenger across the entire store. Bai’s sales team had long since proven its ability to position the brand successfully in key channels as the company maneuvered its name, its flavors, its SKU mix, calories, and formulation into the best possible combination. This year, the brand took flight, and as we know, that flight terminated with a landing in a very well-feathered nest.

For opening up Dr Pepper Snapple Group as a path to success for entrepreneurs through its Allied Brands group, and for his increased focus on fostering the growth of those brands through alignment, investment, and acquisition, Larry Young, the President and CEO of Dr Pepper Snapple Group, was BevNET’s Person of the Year. Even before Mr. Young pulled out the checkbook and won the right to acquire fast-growing Bai, he had spent the past year gradually making equity investments that cemented relationships with many of the Allied Brands that the company distributes, including Body Armor, Core, and High Brew. Beyond that, established brands like Vita Coco and Fiji continue to grow as anchors of their own categories. That means that the growth of the companies in the Allied Brands portfolio is both testament to DPSG’s core competency as an effective distribution and partnership organization, and also a tribute to company leadership’s understanding of market dynamics and its ability to pick such a strong group of partners. It makes sense that an operation like Dr Pepper Snapple Group would be the one to help create new distribution opportunities for entrepreneurs – after all, the company itself is comprised of rebel brands like Snapple – the New Age inspiration for many of the entrepreneurs in the audience – as well as Dr Pepper, 7-Up, and Nantucket Nectars, among so many others. The changing consumer tastes represented by progressive entrepreneurial success stories like Vita Coco, Bai, Core, High Brew, Body Armor, Fiji and more that fill out the ranks of Allied Brands portfolio are, in effect, an extension of that history. With Mr. Young consciously guiding the company he leads toward realizing that its history could also be its future, many of those brands have truly begun to bloom.

Within a fast-growing kombucha category, Health-Ade shined the brightest in 2016. The Southern California-based brand produces a line of organic kombucha drinks that are often lauded for a high-quality and approachable flavor profile. Health-Ade’s continued commitment to great-tasting formulations is a big reason that CAVU Venture Partners, a fund focused on investment and incubation in healthy food and beverage companies, invested $7 million in the company earlier this year. The CAVU funding primarily went to the construction of a new 50,000 sq. ft. production facility, putting Health-Ade in a position to press the gas on new retail and distribution initiatives for 2017. And in a category steadily gaining momentum among soda drink-

ers looking for better-for-you alternatives, it’s clear to us that Health-Ade will continue to be a leader in driving new consumers to the space.

Core executed on all cylinders in 2016, powering forward with its ambitious platform strategy. With its “perfect pH” water driving brand growth, Core earlier this year landed a spot in Dr Pepper Snapple Group’s Allied Brand portfolio, a placement that gave the company the ability to reach a much wider swath of consumers across the country and target a variety of retail channels at a time when demand for premium water continues to surge. Additionally, Core Organic, a line of five-calorie, stevia-sweetened, fruit-infused beverages, continues to gain momentum among retailers targeting consumers increasingly up and away from highsugar and high-calorie beverages. Meanwhile, Core’s forthcoming energy drink line has been one of the most highly anticipated launches for 2017; if founder Lance Collins and his team execute in energy as well as they have in premium water, watch out.

It’s been a year of continued momentum and growth for Spindrift. The soda and sparkling water company kicked off the year with the completion of a $7.2 million raise, funding that enabled the brand to expand Spindrift’s reach and distribution across the U.S. Additionally, this summer the brand deftly executed a label revamp, which came with a transition for its seltzer line, now described as a “sparkling water,” a change that will better position the beverages as part of the surging carbonated water category. 39

Spindrift also scored a huge foodservice win this summer, landing national distribution for two of its sparkling water products at Panera Bread. Led by a solid one-two punch team of founder Bill Creelman and CMO Strick Walker, the brand is in great hands and we expect 2017 to be another stellar year for Spindrift.

Launched by energy drink maker Hiball, Alta Palla is a line of organic and fair trade-certified sparkling juices that are packaged in beautifully designed 12 oz. cans. The look is vibrant and clean, with logo, imagery and copy arranged in such a way that it both catches the eye and effectively communicates what the product is all about. It’s a well put together product from start-to-finish and something that we play well on- and off-premise. And, we love the name: Alta Palla means “high ball” in Italian.

La Colombe’s vision of packaging the popular draft-poured lattes served in its cafes became a reality with the development of the “InnoValve” can. Created in partnership with can manufacturer Crown Holdings, the unique package holds a blend of espresso and milk that is infused with liquid nitrous oxide injected into the can through a valve at the bottom. The nitrous oxide becomes a gas when the can is opened, creating tiny bubbles and giving the coffee a frothy texture. A plastic lip guard at the top of the can is dual-purpose: it is designed to guide the latte’s foam to a consumer’s tongue and neutralizes the taste of can’s metal lip. The result is a phenomenal and unique drinking experience for packaged beverages.

It’s a fair guess that most people would turn down an offer to purchase a half-dozen bottles of a beverage whose primary ingredients are water, activated charcoal and schizandra berry. But the diehard fans of cold-pressed juice brand Suja aren’t like most customers – and the company knows it. Suja’s blink-and40 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

you-miss-it release of Midnight Tonic was an impressive display of its social media prowess and pull with the brand’s well-heeled celebrity consumers. An extension of Suja’s 2016 “Surprise + Delight” initiative, Midnight Tonic was a limited-edition release with only 1,000 16 oz. bottles made available for purchase via Suja’s website. The company teased the launch on social media and sent packages of the product to a handful of influential celebrities and bloggers who shared images and video of the product on Snapchat, Instagram and Twitter. Pre-release buzz gave way to a buying frenzy: Suja sold out of the product soon after it hit the site.

La Colombe’s Draft Latte is one of the most unique and innovative packaged coffee drinks that we’ve ever come across. Made with high quality, cold pressed espresso and milk and infused with nitrous oxide, the drink has a fluffy and foamy consistency and, in our opinion, the texture is even better than a freshly made latte. Moreover, the package, a unique 9 oz. can specially designed to create the latte’s texturized drinking experience, is clean and minimalist in its design. And while it may not immediately obvious what a “draft latte” is, La Colombe has done well to describe the beverage in a succinct way.

Spicy flavors have emerged across the broad spectrum of packaged food and beverages, and DRY Sparkling’s Serrano Pepper soda is an outstanding example of the trend. Infused with the flavor of serrano, which has a flavor similar to a bell pepper but with a spicy finish, DRY has crafted something that’s light, balanced, and very enjoyable. The added sugar (14g per bottle) helps round things out, and the result is a truly unique and special beverage.

Califia Farms this year extended its dairy alternative beverage portfolio with two impressive flavored almond milks. Califia’s Matcha Almondmilk and Ginger Almondmilk are formulated with on-trend, nutrient-dense ingredients, including matcha, turmeric, ginger and maple syrup. From our perspective, the company nailed the delicate balance of blending function and flavor. The matcha variety has a wonderful almond flavor complemented by slightly grassy matcha. Meanwhile, the ginger almond milk is spicy and complex, with an incredibly fresh ginger flavor hitting the palate almost immediately.

We knew early on that Tio Gazpacho’s Rosado variety, a watermelon-based gazpacho, would be in the running for BevNET’s Best of 2016 awards; it’s an outstanding product inside and out. Made with watermelon, red pepper, cucumber, tomato, lemon, sea salt, cilantro, olive oil, white wine vinegar, black pepper, and cayenne – is your mouth watering yet? – the gazpacho is a beautiful blend of sweet, savory, and spicy flavors. It’s a standout product for the nascent drinkable soup category and showcases the creative and culinary prowess of its pioneering brand, Tio Gazpacho.

REBBL this year continued to take its brand to higher levels of flavor and polish with the addition couple of proteininfused varieties to its Elixirs line. Formulated with base of coconut milk and 16g of vegan protein derived from pea, sunflower, and pumpkin sources, the products can definitely hold their own with many soy or whey protein beverages. It’s a well-executed play for REBBL as it evolves beyond the natural channel and showcases the brand’s ability to create timely and flavorful offerings.

LIVE has done an excellent job of creating one of the more market-ready vinegar-based offerings to date. Each of the line’s four flavor varieties is made with apple cider and coconut vinegars, USDA Organic certified and low-calorie and contain no added sugar. LIVE has done a really nice job working with stevia as a way to keep the sugar count down, and the often divisive ingredient is nearly undetectable to taste. While it’s hard to predict the potential of drinking vinegars, LIVE’s offering will play along nicely tag along with its kombucha products and can definitely hold their own satisfying the consumer’s palate.

From a taste and quality perspective, Revive is one of the few brands that we consider to be at the top of the kombucha category. And with the launch of an 11 oz. bottle size, Revive created an offering that will allow the brand to scale on a national level. It’s a nice portion size, particularly for consumers who are new to kombucha. Moreover, Revive has done a superb job of designing labels that are colorful and attractive, rounding out a package that feels very inviting.

Amid a staggering number of new cold brew coffee products coming to market, Califia Farms’ Nitro Cold Brew stood out in 2016. A line of three dairy-free offerings, the coffees are formulated with almond milk and macadamia milk, an innovative turn for nitro coffees. The nitro enhancement really seems to work well with nut milk, perhaps even better than dairy-based nitro products. Product packaging is also impressive: the white 10.5 oz. aluminum bottles present a truly disruptive look on shelf.

Ripple provided a shot in arm for the dairy-alternative category with the introduction of an innovative line of plant-based, low-sugar milks that emulate the creaminess and viscosity of real dairy milk. From our perspective, the beverages represent the kind of disruptive innovation that will have a strong and lasting impact in how mainstream consumers think about dairy alternatives. We’re not alone: Target stocks Ripple nationally, and the brand has pulled in more than $40 million in investment in the past 12 months.

Koia was one of the most impressive brand launches of 2016. Koia’s line of plant-based protein drinks, formulated with almond milk, a proprietary protein blend – brown rice protein, pea protein, and hemp protein – and sweetened with sugar and monk fruit extract, are rich, flavorful, low-calorie and very much on-trend. Koia backs up the formulation with a label design that’s just as impressive. A very strong start with its initial offering, we expect big things from Koia in the years to come. 41

if you were a part of the first wave of companies selling the high-caffeine alternative to iced coffee then you were most likely ordering up a glass Boston round bottle. And why wouldn’t you? Its simple shape, as artisanal as it is suited for lab work, offered a wide gradient to allow the label design to speak clearly to consumers. Many of the companies on the ground floor of the cold brew explosion offered some variation of the Boston round – Chameleon, Stumptown, and Grady’s all embraced this traditional look. But seven years on from the category’s formal debut, it looks like the competitors are all running hard – in different directions. Both new and seasoned brands aren’t content to be part of a crowd utilizing the same old packaging format. A quick stroll through the grocery store shows cold brew in beer bottles, plastic bottles, milk cartons, bag-in-boxes, tall cans and slims. Multiserve deliveries come in kegs and growlers. It’s a plethora of package designs limited only by the entrepreneur’s imagination and budget, and by what shelves retailers are willing to cede to the fast-growing category. While many brands still seem to use the Boston round at launch, even those companies that have long relied on the medicine-style bottle are taking chances to experiment with their packaging. And the variety in the packaging style may point to a larger point about the category: that cold brew, despite the amount of attention it’s gotten from coffee companies and consumers, is still early enough in its CPG lifecycle that there is not yet a concrete approach to the category. Additionally, experts say, the variety of usage approaches to the product itself – be it a concentrate, single serve, or multi-serve format – is also slowing uniformity, and potentially leaving retailers with tough choices. “This is becoming a more difficult category to shop,” said Adam Spriggs, a designer and founder of the firm Nucleus Maxi-

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mus. “You have 8, 10, 12 oz. bottles, we’re seeing a lot of SKU differentiation and unique products. I think it’s getting to the point where it makes it more difficult for the shopper to make sense of all the options in front of them. So I think it’s really going to be important for brands to rethink the hierarchy of what they show a consumer first, second, and third so the packaging has more utility for the shopper.” So how did the different cold brew looks evolve? Fred Hart, creative director at branding and packaging design firm Interact on Shelf, relies on the mantra that packaging should “challenge the category, not the consumer.” He said that the early category standards – or lack of same – likely came from regular cold coffee drinks, and that the lack of convention is, in some ways, an extension of the variety associated with those products. In iced coffee, beverages like Starbucks’ Frappucino used a thick bottle while Java Monster saw success in cans. Coke’s IllyCaffe drinks use both stubby cans and slim ones, while Vita Coco’s Coco Cafe even made coconut water’s traditional Tetra Pak design work for coffee. “It stems from cold brew’s bigger, older brother. Iced coffee’s ubiquity in RTD as both a drink unto itself, and as a flavor or additive, has given way to structural freedom and creativity without challenging consumers,” Hart said. “The ability for iced coffee to exist and bleed into other beverage segments in some way has desensitized consumers to varying structures and formats for cold brew.” Nevertheless, some standards are starting to emerge as brands begin to strengthen. With companies like Califia Farms and Chameleon coming on strong with their design and imagery, consumers may be starting to move the category beyond the education phase. “I go to the supermarket and see Califia Cold Brew in 16 oz., 12 oz. PET bottles and if I’m walking down the aisle quickly it looks no different than half of the RTD products out there,” said Tony Ruth,

head of branding and concept development for venture capital firm Cleveland Avenue. “The point is, as cold brew becomes increasingly familiar, it doesn’t require special explanation or positioning. Califia doesn’t need to sell the idea of cold brew, Califia is simply selling their own brand with this as one of many SKUs that they have. They’ve absorbed the trend into their brand structure.”

Waking Up Variations in style and recipe may also necessitate alternative packaging. Rise Brewing Co. in New York sells nitro cold brew in 12 oz. cans, which debuted in August and retail at $4.49 each. Co-founder Jarrett McGovern told BevNET their cans use the same widget technology for nitrogen as Guinness, and although the company has considered bottling options, cans are effective for preserving the flavor and texture of nitro coffee. Rise chose their name and branding to associate with waking up, McGovern said. According to Ruth, a can of high-caffeine coffee in the morning is perfect for the aging energy drink demographic that is used to grabbing cans out of the fridge on the go, but who have grown out of their daily Red Bull ritual. “Cold Brew in an aluminum can is designed to attract the aging energy drink or Mountain Dew consumer away from their old habits,” Ruth said. “At some point you have to say ‘I’m not 28 anymore, I can’t show up to a meeting with a can of Whoop Ass Energy Drink.’” On the other side of Rise’s business model is their keg line, which sells quarter, half, and 1/6th barrels to restaurants and offices. A “six barrel” can run up to $140, but a half-barrel can equal out to costing less than a dollar a serving. Kegs can be lucrative to stores and are appealing to offices looking to offer their employees something more high-end than K-Cups, but it also falls back onto Rise to deliver and install the kegerators. Some offices, McGovern said, prefer to test out the coffee by purchasing cans first before committing to a keg.

Also targeting the workplace is bag-in-box. New York’s Wandering Bear Coffee has similarly made its mark on the city by offering delivery service to offices, but the bag-in-box also fits snugly into a personal refrigerator and has an advantage over bottles, keeping the coffee fresh for up to a month. “So many offices are proverbial ‘coffee deserts,’ and this is a chance to take back that level of quality,” said Wandering Bear co-founder Matt Bachmann. “Even when you’re at work, you’re never not a consumer.”

For the at-home coffee drinker, Grady’s offers a “Pour and Store” pouch that lets consumers brew their own coffee in a nozzled bag. The cold brew kit includes 12 bean bags that will stay fresh for up to two weeks.

Changed by Craft The craft beer boom reshaped the beer industry into a market where consumers are more in tune to taste, technique and aesthetic. Similarly, while the major coffee giants like Starbucks still reign, and have even helped to popularize cold brew, there is a sense that consumers are attracted to craft hobbyist aesthetic that cold brew brings to coffee. Spriggs compared the category to cold pressed juices, saying some artisinally-inclined coffee drinkers might feel like the smaller and the more obscure the company, the better. That homemade product appeal may even explain why Boston round bottles, which invoke a rustic feeling, were so popular with the category in the first place.

“It’s a stock bottle so it’s very easy for everyone to get ahold of it,” said Grady Laird, founder of Grady’s. “And if you’re searching for stock bottles it does stand out as one of the better looking ones. I think the shape makes a really attractive product.” According to Ruth, early cold brew packaging would often use glass bottles to emphasize an elegance and premium sensibility similar to spirits, with larger 32 oz. offerings fetching the same price point as alcohol. Now that cold brew has arrived in the mainstream, innovative packaging is a way to mark a new brand’s identity and whether to invoke a premium coffee experience, a more approachable morning routine experience, or even as a novelty. Starbucks has opted for a sleek tapered glass bottle for its RTD line, but a small brand like Joe’s Coldbrew is taking a risk by putting its coffee in a flask. If a packaging standard develops the way it has in beer or soda, it may come down to what’s most economical and accessible. Spriggs said that retailers have a keen eye for the most effective packaging that dictates who gets the shelf space. If certain brands become sales leaders, stores could decide to emphasize one style of packaging over another, which could shift cold brew back into a uniform. “We’ll have to see what shakes out in terms of what are the real volume winners in terms of the different subsets of cold brew coffee offerings,” Spriggs said. “But I think the category itself is so big. It’s an everyday occasion for so many people and there’s just a lot of room.”

BRAND NEWS COFFEE

Three Trees. Brewed as a creamy New Orleans style cold brew with a lower caffeine content than regular drip coffee, Three Trees Organic Cold Brew Coffee Almondmilk is now launching in Seattle, New York, Washington, D.C. and southern California and is available in a one liter package. FORTO. After over two years in development, FORTO Coffee Energy Shot began shipping two new SKUs made with organic, fair-trade cold brew coffee and milk, available in French Vanilla and Mocha flavors, to 15,000 stores in January. Groundwork Coffee. The most recent release from Los Angeles-based Groundwork Coffee Co. is Nitro Cold Brew, a creamy, nitrogen-infused cold brew made with locally roasted organic coffee beans. Chameleon Cold Brew. Austin-based Chameleon Cold Brew has collaborated with brewery Shiner for the limited edition release of a Cold Brew Coffee Ale, a malty, slightly sweet beer made with cold brew coffee and available in 12 oz. bottles and cans, 24 oz. bombers and on tap for a limited time until March. Califia Farms. In addition to its ongoing coffee releases, Califia Farms is releasing its line of Non-GMO Project Verified non-dairy creamers, available in Unsweetened, Vanilla, Hazelnut and Pecan Caramel varieties, in a new 750 ml bottle styled in the brand’s signature curvy form, with an easy-to-pour flip cap. Grady’s Cold Brew has introduced a new, 42-serving “Bag In Box” package for its signature New Orleans-style cold brew coffee concentrate, as well as an all-inone home brewing kit that can make 36 cups of cold brew. Confluence Coffee Co. Richmond-based Confluence Coffee Co. has announced that it has secured distribution through United Natural Foods (UNFI) for the

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brand’s complete line of nitro-infused cold brew cans – Nitro House, Nitro Mocha and Nitro Coconut – which are now available at an additional 150 independent grocers nationwide. La Colombe. Following the summer purchase of a new 55,000 sq. ft. facility in Michigan that can produce 360,000 cases per week, in December La Colombe announced the official national launch of its Draft Latte, made with milk and coldpressed espresso, available nationwide in three flavors - Mocha, Vanilla and Triple. Wandering Bear Coffee. Brooklynbased Wandering Bear Coffee, makers of bag-in-box, ready-to-drink cold brew coffee, debuted its first-ever flavor – peppermint mocha – as a seasonal SKU for winter 2017. Hatch Cold Brew, which is now produced in a certified organic facility, plans to expand its packaging formats to include cans as well as glass bottles. The company also plans to offer the facility for co-packing for a select group of partners. Sunniva Super Coffee. Jordan DeCiccio, founder of New Beverage Showdown 12 finalist Sunniva Super Coffee, has been selected to take part in the 2017-2018 Peter Thiel Fellowship, which includes $100,000 in funding and access to entrepreneurs, investors and mentors in Silicon Valley. Shamrock Farms. After launching in September, 2016 at retailers in the brand’s home state of Arizona, Shamrock Farms will begin rolling out its line of ready-todrink cold brew coffee and milk in 12 oz. bottles nationally in 2017. High Brew Coffee recently expanded its distribution partnership with Dr Pepper Snapple Group and introduced a new protein-infused variety that is formulated with 12 grams of protein and three grams of fiber.

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By all accounts, Garrison Brothers Texas Straight Bourbon Whiskey is considered a craft spirits success story. Founded by Dan Garrison in 2005, the Hye, Texas-based brand reflects many of the core ideals that separate the craft segment from its large-scale counterparts. It proudly embraces its regional identity, touting its legacy as the home of the first and oldest legal whiskey distillery in the state. It adheres to traditional, small-batch production methods — such as using harvested rainwater to cut the alcohol — and sources its corn from local organic farmers, along with organic wheat from its own 65-acre farm. Its speciality bourbons, such as its unfiltered, 136-proof Cowboy Bourbon, have won awards. Yet even as the U.S. craft spirits industry expands at a rapid pace, Garrison is one of many distillers facing the same challenge: once established, how can small-scale producers breakthrough to the next level? For many, the answer is simple, but not necessarily easy: sell out. “You reach a point in your development or your growth where you feel a little bit stunted,” Garrison told BevNET. “It’s almost impossible for a small craft distillery with just three or four employees, or maybe ten like we have, to grow beyond their region. That’s why we are seeing so many acquisitions all of a sudden.”

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GROWTH SPURT According to statistics from the American Craft Spirits Association (ACSA), a non-profit trade group, craft distillers, which the ACSA defines as products that are physically distilled and bottled on-site by independently-owned distilleries with maximum annual sales of 52,000 cases, are enjoying a period of robust growth. The Craft Spirits Data Project, a year-long research initiative into the craft spirits industry launched by the ACSA, reports that the U.S. craft spirits market, which includes 1,315 active distillers as of August 2016, generated $2.4 billion in retail sales in 2015. From 2010 to 2015, the market share of U.S. craft spirits in volume more than doubled, going from 0.8 percent to 2.2 percent. In that same period, the market almost tripled in value, going from 1.1 percent to 3 percent. For the purpose of the project, U.S. craft spirits were defined as distilled spirits that have not removed more than 750,000 proof gallons from bond, market themselves as craft, are not controlled by a large supplier and have no proven violation of the ACSA’s Code of Ethics.

Mixers Push Towards Premium While representing only $2.4 billion of the $72 billion U.S. market, the craft spirits segment is expanding at a compound annual growth rate of 27.4 percent in volume and 27.9 percent in value from 2010 to 2015.

PARTNERS = POWER The kind of growth has not gone unnoticed by the spirit industry’s larger players, who have begun to develop the capacity to innovate by acquisition, making bets on smaller brands in much the same way as their fellow giants in beer, soft drinks, and food. The last six months alone have seen a flurry of investments and acquisitions in craft from multi-national liquor brands. In December, NBV Investments Inc., a subsidiary of French spirits powerhouse Pernod Ricard SA’s North American division, purchased a minority stake in Smooth Ambler Spirits, makers of Old Scout bourbon and Greenbrier gin. Meanwhile, Constellation Brands, a beverage alcohol conglomerate with a portfolio that includes Corona beer and Svedka vodka, has announced multiple acquisitions; after completing a $160 million deal in October for Utah-based High West Distillery, the company made minority investments in whiskey producers Catoctin Creek Distilling Company and Bardstown Bourbon Company in January.

Partnering with a bigger company, whether through strategic investment or outright acquisition, can solve issues of cash flow and distribution for craft distilleries almost instantly, and many have been more than happy to take advantage. “I think it can be a win-win,” said Tom Jensen, co-founder of Philadelphia-based New Liberty Distillery and former President and CEO of Pernod Ricard USA. “I don’t think what you just described is that different from what happened in craft beer, where good regional brands ended up getting acquired and then others come in.” Jensen noted that while capital demands for producing whiskey are high, an even bigger challenge for small-scale operations is securing distribution. The popularity of craft spirits has drawn the interest of major distributors, but an increasingly crowded field of distilleries means there are more brands fighting for the same small space in a distributor’s liquor portfolio. Partnering with a large company, Jensen said, was one way to solve that issue.

By Martín Caballero

If you are drinking a premium spirit, why wouldn’t you pair it with a premium product? Across the mixer and cocktail-enhancer category, that’s the question brands at the Winter Fancy Food Show in San Francisco were asking both consumers and retailers. From local cocktail haunts to home wet bars and up through mass channel giants like Wal-Mart and Target, it’s a category that an increasing number of manufacturers are betting on. And while there are plenty of other companies offering new takes on mixers – from large spirits companies and beyond – the Fancy Food Show gave a clear view of the trends that have opened up the category to new growth.

PREMIUMIZATION There’s a reason hundred-year-old cocktail recipes like the Old Fashioned and Moscow Mule remain popular today – they simply work. But in the era of the upgrade, many brands are eschewing radical innovation in favor of tweaking and developing high-quality versions of classic mixer staples. Fentiman’s, founded in 1905, is steeped in such tradition. The U.K.-based botanical brewery makes a variety of products, including craft sodas and an alcoholic ginger beer, but has largely kept its mixers aligned with classic flavor profiles like ginger ale and tonic. All varieties are made with natural ingredients using the same small-batch production process that the company has used since its founding. While the brand’s U.S. business has been mainly driven by retail, Fentiman’s also packages its mixers in a single-serving 125 mL size that is used as part of on-premise table service at 68 U.S. and Canadian locations of casual dining chain Earls. Similar to Fentiman’s, craft soda brand Grown Up Soda has created a clear distinction between its soft drinks and its dedicated line of mixer products. At the Winter Fancy Food Show, the company showcased a new line of non-alcoholic sodas designed as single-serving pairings for specific spirits, available in 7 oz. glass bottles in four varieties – Moscow Mule, Sparkling Cosmo, Mojito and Tonic and Lime. Each will retail for around $3 per bottle. (Q Beverages has also rolled out a similar size, below).

INNOVATION While some brands focus on refining and improving on the classics, others are seeking to broaden the possibilities of what a mixer can and should be. Cocktail Crate has taken the former approach to its line of mixers. The New York-based brand’s six varieties, packaged in 12.7 oz. glass bottles, each offer a nuanced twist on familiar cocktail flavors, through SKUs like Spicy Old Fashioned, Maple Whiskey Sour and Sriracha Margarita. The company also debuted a new flavor at the Winter Fancy Food Show: Spicy Michelada, made with lime, orange juice and sriracha and intended to be paired with Mexican lager. In a sign that retailers are also looking to offer consumers more premium 47

“When I was at Remy (Martin), the distributors were phenomenal,” he said. “But as a small craft person, [the distributors] are just so controlled by the big spirit houses that even if they want to do well for you, they don’t. Unless they put in some kind of dedicated division just working on craft, they, 95 percent of the time, fail on selling craft brands.” Paul Hletko, founder of Few Spirits and President of the Board of Directors at the ACSA, has seen how the increase in the number of craft spirit brands has shifted distributors’ attitudes toward the category, for better or worse, over the years. “When we started, distributors would have the attitude of ‘what’s a craft spirit?’” Hletko said. “Whereas now, I think it can be very challenging to get into distributor’s books because they already have all the craft spirits that they need or want. At first it was hard to convince them that they needed a craft spirit in their book, now they need to be convinced that they need yet another one.” Jared Fix, CMO of Constellation Brands, explained the process by which the company evaluates potential investment or acquisition opportunities, which can involve tracking a company’s growth over several years.

options within their mixer set, Cocktail Crate has recently been launched at 300 Target locations in California. While gaining popularity in their own right, drinking vinegars are also positioning themselves as a viable alternative mixer option for consumers seeking something slightly different to pair with spirits. California-based Crafted Cocktails makes fruit-infused shrubs, or vinegared syrups, in 16 oz. glass bottles, which they market as a cocktail enhancer at a suggested retail price of $12.99. Founder Felicia Vieira said that one-note flavors like Asian Pear and Pineapple, each developed by the brand’s staff mixologist, has helped temper the intimidation some customers feel when approaching the product. Pok Pok Som brings Asian inspirations to its own line of drinking vinegars. Available in 16 oz. glass bottles, the brand focuses on creating high-quality versions of vinegar flavors typically consumed in Taiwan, Korea and Thailand, like Chinese celery, Thai basil and tamarind. Also working with vinegars is Brooklyn’s Morris Kitchen, which makes a variety of cocktail pairings and syrups including a new mixer made with small batch vinegar and coconut nectar. The Owl’s Brew, which has produced tea-based cocktail mixer products since 2013, has pushed further into category with its line of radlers, a ready-to-drink cocktail made with organic tea and craft beer. Available in 12 oz. cans in four SKUs, each variety features a different pairing of tea and beer; “That’s My Jam” for example, includes amber ale and Darjeeling, along with hibiscus flower, fruit juice and agave nectar.

FOOD SERVICE Even as brands make inroads at retail, the development of cocktail culture still takes places primarily at bars and restaurants. Before making their own drinks at home, consumers are discovering premium spirits and mixers through onpremise service, and brands are eager to use the channel to drive sales and develop a loyal customer base. “We do very comprehensive analysis in spirits across the different categories and subcategories,” said Fix, noting that Constellation does not have a fixed range for the size of potential investment. “So taking whiskey and then looking within bourbon, looking within rye, segmenting that across price tiers to see where there is growth, and therefore an attractive segment. We also look at where there might be single brand phenomenons in a segment that may otherwise be attractive. We look at those brands from all stages, all sizes and all scales.” Besides the spirit itself, craft distillers also present interested investors with opportunities to tap into the authenticity of their brand – an increasingly important attribute for consumers. Fix said that High West’s location – nestled on a mountain ranch about 15 minutes outside of the ski mecca of Park City, Utah – and on-premise customer experience, in the form of a renovated saloon, helped make the brand more appeal from a marketing standpoint.

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“Selling into food service is the best way to grow,” said Jordan Silbert, CEO and founder of Brooklyn-based Q Drinks. The brand’s new labeling and packaging, showcased for the first time at the Winter Fancy Food Show in San Francisco, underlines that principle; both the new can format, reduced from 12 oz. to 7.5 oz. and the glass bottles, going from 9 oz. to 6 oz., are now sized as a single serving for cocktail pairing. In addition, a color-coded label around the neck of the bottles and the rim of the cans makes each SKU, including a reformulated grapefruit flavor and a new “kola”-style variety, easily identifiable for those working behind the bar. The brand’s “Spectacular Serve” initiative is another key component of their food service strategy. In locations that use Q Drinks products, servers are encouraged to present a bottle of Q Drinks mixer alongside the spirit and allow patrons to mix the drink themselves, similar to how cocktails are typically served in Europe.

Food service can also be a potentially critical component for brands that may need to educate consumers about their products. Crafted Cocktails partnered with mixologists at the Wynn Hotel in Las Vegas to develop recipes that use the brand’s Asian Pear flavor. “Having a strong on-premise program has helped build awareness and made people more familiar with our products,” Vieira said.

BITTERS As mixer brands across the category continue to seek ways to become more accessible to consumers, the same can be said for bitters. “We are like Robin to Batman,” explained Jomaree Pinkard, co-founder of Hella Cocktail Co., of the relationship between bitters and cocktails. Along with producing a wide variety of bitters, syrups and cocktail mixers, the company has made educating consumers about bitters and overall mixology a part of its mission. In addition to its bitter multi-packs, Hella sells a “Craft Your Own” kit that includes all the tools and ingredients (minus the alcohol) needed for making bitters at home. Pinkard said the brand has also put on several classes in the New York area on topics related to alcohol extraction and mixology that are open to the public.

“When we were evaluating the brand in the acquisition phase, the question I asked was ‘why the hell would you start a whiskey distillery in Utah?,’” he said. “It’s just not the most intuitive place. The founder David Perkins took this risk and it’s made it something that’s very unique and distinctive. If I put a dozen marketers on it, it wouldn’t have had that same realness.” On the other hand, Christian Krogstad, founder and head distiller at House Spirits, pushed back against the assumption that every craft distillery is seeking outside funding to scale up operations. “There seems to be this prevailing assumption that every distillery wants to grow,” Krogstad said. “I meet a lot of folks for whom their distillery is a retirement hobby. They are selffunded. It means there are a lot of people out there for whom profit isn’t important. And so they are going to invest and act differently than a profit-driven company. That has some interesting impacts on the market.” Back in Texas, Garrison said he worries that, despite the boom in craft distilling, the pace of acquisition and access to scale and cash means that the gap between the haves and have-nots in craft spirits will continue to widen, particularly as the large companies

Dan Brazelton is one-half of The Bitter Housewife, a line of bitters that he co-founded alongside his wife Genevieve, for whom the brand gets its tongue-in-cheek name. Brazelton explained that the Portland, Ore.-based company , which also owns cocktail syrup line RAFT Syrups, has made its mission to debunk the idea that bitters are esoteric ingredients which require a deep understanding of cocktails (or a wispy ironic mustache) to enjoy. “Most bitter brands market to bartenders,” Brazelton said, adding that nearly 80 percent of consumers who purchase bitters are new to home cocktail preparation. “The industry is not understanding the market from a consumer level, and that’s what we are trying to focus on. We are about empowering people to make their own choices.” Those choices include the brand’s signature aromatic bitters, which Brazelton compared to a higher quality version of Angostura, to flavors like cardamom and coriander. The brand has also paired with spirits brands for special formulations, such as a richer, spicier version of their standard bitters that has been aged in whiskey barrels from Bull Run Distilling Company. Each come in 3.4 oz. glass bottles and are priced at $15. Minnesota-based Dashfire Bitters has gone even further with its range of fruit and botanical-infused SKUs. Claiming to offer the largest selection of bitters in the world, the brand’s square, 3.4 oz. proprietary bottles are designed with bartenders in mind, including the bottom label. Flavors like lavender, grapefruit, clove and cardamom are designed to broaden the occasional use, but the brand also has an innovative streak, as seen with the inclusion of flavors like Chinese All-Spice and Mole.

invest heavily in marketing and sales. Yet despite those fears, he admits that he himself hopes to draw the interest of a strategic partner that could help the brand expand its distribution footprint. “We are not looking to be acquired, we are fiercely independent,” Garrison said. “But we would be very interested in partnering with the right company. It has to be the right company, it’s got to be the right deal terms.” Drawing from his own experience on the other side of the boardroom table, Jensen says the time to get in the business is now. “I would tell [large spirits companies] to ignore it at their own peril,” Jensen said of the craft spirits market. “It captures so many things that are important to consumers nowadays - buying local, sustainability, things like that. I almost would say it’s a bargain way for a big company to innovate, to go out and let somebody else do the innovation for them and then go buy them. I’d let them stay independent and have a right of first refusal or something, but go lock up some people now while the price tag is still cheap.”

BRAND NEWS COCKTAIL MIXERS

Ferm Fatale Shrub Bucha. The “world’s first kombucha-based social beverage,” Ferm Fatale’s Shrub-Bucha is an organic, probiotic-rich fermented cocktail mixer made from shrub– fermented fruit in vinegar – and kombucha, available in flavors like Mojito, Moscow Mule, Cosmopolitan, and Margarita. Owl’s Brew. In addition to debuting the brand’s core flavors in 16 oz. bottles, Owl’s Brew launched its fifth SKU in 2016: Wicked Green, a spicy blend of green tea, lemon, lime and habanero crafted to be mixed with tequila, mezcal, gin, vodka and wheat beer. American Juice Company. In 2016, New York City-based American Juice Company partnered with the Belmont Stakes to create the race’s signature cocktail and released a new 4 oz. “personal” size that yields up to four servings for its line of all-natural juice mixers. Cocktail Crate. Along with redesigning its label and expanding its retail presence at Total Wine & More locations, Cocktail Crate is now Certi-

fied Non-GMO in five out of its six flavors, the exception being Ginger Bee. Fruitations, a low-sugar craft mixer available in five fruit-based SKUs, is expanding its onpremise presence with cocktail menu placement at multi-unit upscale-casual restaurants including Tavern on the Square and Burtons Grill, in addition to independent dining outlets in New York, Boston and Las Vegas. Grown-up Soda has launched a new line of sparkling cocktail mixers in four flavors – Moscow Mule, Sparkling Cosmo, Mojito and Tonic & LIme – made with natural ingredients and available in 7 oz. singleserving bottles designed to be mixed with 1.5 to 2 oz. of liquor. Royal Rose. Small-batch syrup mixer brand Royal Rose has released a Hot Toddy kit containing two signature syrups – Classic or Spiced – made with organic cane sugar and fair trade herbs and spices. Master of Mixes has launched a website, Mixologypro.com, that provides cocktail recipes, bartending tips and recommended techniques for at-home mixology. DRY Soda Co. Craft soda brand DRY will be rolling out new 12 oz. aluminum cans and 4-pack options for its Ginger flavor beginning in March 2017 at select Kroger and Safeway stores nationwide. Cerveza Mixers, designed to be paired with beer to create Mexican-style michelada cocktails, has partnered with Amazon to sell two limited edition bottles of its “El Hombre” variety. Powell & Mahoney will launch a new line of naturally flavored sparkling cocktail mixers in 12 oz. cans, available in Original Ginger Beer, Blood Orange Ginger Beer, Original Sparkling Mojito and Original Sparkling Tonic varieties, at Natural Products Expo West this Spring. Top Note Tonic recently wrapped a successful winter holiday gift pack promotion that bundled three 5 oz. bottles of its syrups in a custom window box and plans to revive the seasonal offering for 2017.

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TO BOLDLY GO DIFFERENT BOTTLE SAME TEJAVA

• No Sugar • No Sweeteners • No Calories • No Artificial Ingredients We brew Tejava Unsweetened Iced Tea to be boldly smooth. Simply tea and water, Tejava meets the consumers need for all-natural, clean beverages. In addition to the 1 liter and 12 fl. oz. glass bottles, we now offer Tejava in a ready-to-go 16.9 fl. oz. BPA free PET bottle. We're looking to add distributors, for more information contact Rob Bulot, Senior VP of Sales at Crystal Geyser Water Co. 626-859-2822.

WHAT’S COMING What will 2017 hold for trends, innovation and emerging categories in the non-alcoholic beverage industry? We asked several veteran beverage executives and observers for their takes on what’s to come and how they see the industry evolving over the next 12 months. Here are their responses, some of which have been condensed and edited for clarity.

PACKAGE DESIGN Fred Hart

Rifle Hughes

As the beverage category has “naturalized,” simplified and cleaned up ingredients, we’ve seen form follow function and art mimic life. Beverage design over the past few years shifted towards minimalism and “transparent” design mimicking these “clean” evolutions. HPP juices like Suja and Blueprint, nut milks from New Barn and MALK, drinkable soups like Tio Gazpacho and Zupa Noma, and startups like Nomva and Mother Beverage all exude this simplistic design trend. In 2017, we’ll see the pendulum swing past this simplified design trend towards self-expression, moving the conversations from the “what” of brands into the “why,” a rich and emotional territory. Early adopters of this trend are

We are already seeing the shakeup of the incoming FDA update to nutrition and supplement facts. Many of our established beverage clients are scrambling to assess the potential impacts to their formulations regarding “added sugar,” “from concentrates,” protein, fiber, and claims derived from vitamins, such as antioxidants. These formulation changes will ripple out to not only on-pack messaging and claims, but more critically, they could alter the foundation of the brand position, which in beverage, is anchored in a unique and impactful bottle design. For the next year or two, I expect that we will be working though many projects aiming to maintain consumer trust through design solutions.

Creative Director Interact, a food and beverage packaging design and branding agency based in Boulder

brands like Humm Kombucha, PepsiCo’s new LIFE WTR and even vintage-turned-cool LaCroix. They all use expressionistic design to inspire people, drive engaging personalities and tell unique stories beyond just the “what” of the product. Color, pattern and evocative typography will come to prominence more than ever.

52 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

Managing Director McLean Design, a strategic branding and packaging design firms in beverage and other CPG categories At a more basic level, the revised nutritional has wider design implications. The new panel’s larger size squeezes into other existing elements on the back-panel, like romance copy, requiring a more in-depth redesign. It’s not something that can be satisfied by printer updates or a cover up label. The impact is that brands of all sizes will need to invest in redesign and printing new labels.

INVESTMENT Nicole Fry

Managing Director First Beverage Group, an advisory and investment firm focused on the beverage industry We expect the non-alcoholic beverage environment for M&A and investment to remain very robust in 2017. Both strategic and financial investor interest remains strong for attractive brands and we saw several high profile transactions completed in 2016 at very high multiples, including Danone’s acquisition of WhiteWave, DPSG’s acquisition of Bai and Pepsi’s purchase of KeVita. In addition, several emerging, high growth brands continued to raise large amounts of capital, particularly in high growth beverage categories, including kombucha, cold brew coffee, dairy alternatives, super-premium juice and enhanced waters. There is an increasing trend of strategic players investing in earlier stage brands, either through direct investments or through venture arms they have created (Coca-Cola/VEB, DPSG/Allied Brands, General Mills / 301 Inc., Campbell’s / Acre Venture Partners, etc.), and we expect this type of activity to remain robust as many strategics realize the benefits of acquiring growth and innovation vs. trying to develop new brands internally. Despite the strong interest in the non-alcoholic beverage category, we do think competition will intensify for brands seeking capital or a strategic partner, particularly in categories where investors

already have made an investment. That being said, we believe brands that can demonstrate a differentiated product offering, evangelist consumer base, attractive margin profile and robust innovation pipeline will continue to be attractive to a range of investors in 2017 and beyond.

Duane Primozich Managing Partner Boulder Investment Group Reprise

The non-alcoholic beverage space and specifically the natural segment has been and will remain hyper-competitive. Similar to the natural foods space, there are far fewer quality assets than there are dollars chasing those assets and there are a number of market dynamics attracting investors and acquirers to earlier and earlier stage companies. This of course encourages innovation, which in turn encourages investment and so the virtuous circle spins.

Tom Spier

Founder & Managing Partner Boulder Food Group, a venture capital firm that partners with early-stage food and beverage consumer product companies From a capital markets standpoint, we believe that high performing brands will continue to attract equity capital. The Bai and KeVita transactions will serve as strong reminders for the

shifting consumer landscape and the importance for the largest beverage companies to adjust their portfolios accordingly. As always, at the earliest stages of business development, the best entrepreneurs will continue to do what they always do, find ways to raise capital even under the most extraordinary circumstances even without the business metrics that a high performing business might have. As a result of the ever increasing number of investors pursuing consumer packaged goods, I don’t know how the capital markets can do anything but become more competitive from the investor’s viewpoint.

Trevor Nelson

Co-Founder and Managing Partner Alliance Consumer Growth, a private equity firm that provides growth capital to branded consumer companies I think we will see a number of interesting investments and acquisitions in the nonalcoholic beverage space in 2017. Over the last 2-3 years, emerging brands in several categories such as natural soda, kombucha, and RTD coffee have received meaningful capital and have attracted experienced management teams. 2017 may prove to be the year when many of those brands – and their teams who are used to quick success – will either emerge as real category leaders or require a change of direction. I am also very inter-

ested to see whether Coke and Pepsi assert their leadership as acquirers in 2017 or whether they will allow other acquirers to get a disproportionate share of emerging brands.

Michael Burgmaier

Managing Director & Co-Founder Whipstitch Capital, an investment bank and advisory firm focused on consumer goods We believe that 2017 will continue with intense acquisition and investment interest in emerging, healthy beverage brands. Consumers will continue the massive shift to lower-calorie, functional, clean beverage products, including functional water, premium sparkling water, nut milks, and kombucha, where Health-Ade, Humm and Revive, among others, will battle it out for the “next” winner after KeVita and GT. We see premium juice brands filling a needed niche for low-calorie, functional juice (with the requisite attitude) and in declining categories like orange juice, virtually all the growth will come from the organic realm. And there are ingredients we love like turmeric and almonds that will continue to move consumers.The best brands will continue to be unique, deliver on taste, function and nutrition and thus when consumers get to know them, they not only buy them – but they talk about them with their neighbors – this is how winning brands emerge.

LEGAL/REGULATORY Justin Prochnow

Shareholder Greenberg Traurig, an international, multi-practice law firm This year I think there will be increased focus and attention on calories and serving sizes. Several revisions to the regulations are coming together to emphasize the amount calories in products to consumers. The federal menu labeling regulations become effective in May, requiring restaurant chains with more than 20 locations to disclose the calories on all menu items, including beverages. Additionally, revisions to the federal labeling regulations

governing the display of nutrition information on the packaging of beverages and food must be implemented within the next two years. Those changes include the highlighting of calorie declarations on labels by putting them in bold type and in type size 2-3 times the size of other nutrition information. In addition, the standard serving size of non-juice and non-milk based beverages has been increased from 8 oz. to 12 oz. With single serving containers now including anything under 200 percent of a serving size, this means anything under 24 oz. will be a single serving container. With the increase in the

number of calories to be declared if a single serving is 16 oz. or even 20 oz., as opposed to 8 oz., and the increased prominence with which those calories will be displayed, companies will likely be looking at decreasing the size of containers or reformulating products to reduce calories, even more than they have already been doing.

Michele Simon

JD, MPH Executive Director Plant Based Foods Association Last May, the FDA released its final updates to the Nutrition Facts

panel, which includes requirements for listing “added sugars”. Companies have until mid-2018 to comply, and while it’s possible that the new administration will delay these changes, I wouldn’t count on it since the largest companies are likely already implementing the updates. Meanwhile, three cities in California (San Francisco, Oakland and Albany), Boulder, Colorado, and Cook County (includes Chicago, topping 5 million residents) passed soda tax measures in 2016, joining Philadelphia and Berkeley. While the laws are usually assessed at the distribution level, it’s likely that for beverages with added

sugar, pricing will be impacted if the distributor passes the added cost on to retailers. We can certainly expect these dramatic victories against “Big Soda” to inspire other cities (and maybe even states) to pass similar measures. The impact on sales remains to be seen. The dairy industry has recently lobbied Congress to ask FDA to not allow companies making dairy alternatives to use words like “milk”, despite how long soymilk has been on the market without much fuss. Given the growing consumer interest in plant-based alternatives to meat and dairy, this issue is not going away anytime soon.

INGREDIENTS/EMERGING CATEGORIES Hope Lee

Senior Beverages Analyst Euromonitor International, a global market research firm Organic as a sustainable agriculture model will attract further interest in 2017, as the demand for organic produce is outgripping supply in many markets, showing both a challenge and opportunity for certifiers and players on the value chain. Danone’s pending acquisition of WhiteWave means the French dairy giant will become the largest company in the global organic packaged foods and beverages market.

54 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

Mark Rampolla

Co-Founder Powerplant Ventures, a private equity firm focused on investment in plant-based nutrition While all things plant-based have been hot for a while, watch the segment further blossom and leverage the rich diverse of the green kingdom. Adaptogens are the bridge to personalized health beverages; turmeric, kava, mushrooms, vinegar and ancient ingredients work differently for each of us but will all have mainstream appeal. Move over soy, almond and pea; while these core sources will remain relevant and grow, watch for a new wave of ingredients, from pumpkin, sunflower, hemp and coconut to chickpea begin to flex their muscle as great and tasty sources for protein, fat and micronutrients.

Kara Rubin

Co-Founder Beyond Brands, a brand incubation and consulting firm Ingredient focused trends will include: continuing to refine what “clean label” means (moving away from extracts, “natural flavors,” etc. in favor of focus on food-forward ingredients and emphasis on the flavors of those ingredients); of course, low- and no-sugar, or at least no added sugar; taking functionality to another level (examples: Ayurvedic-, adaptogen- or cannabis-driven formulas); continuing to see brands tying their products to the food waste challenge, using produce that might otherwise have been wasted (ugly fruit, pulps, peels and rinds); defining a brand story around innovative sourcing (biodynamic and regenerative farming practices); and continuing to see more innovation around plant-based and other alternatives to animal proteins.

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RETAIL/DISTRIBUTION Ken Sadowsky

Sr. Beverage Advisor Verlinvest, a family-owned investment holding company specialized in food and beverage The ever expanding importance of refrigerated, fresh beverages for consumers will cause retailers to rethink their space allocations, consumer foot traffic within stores, and where refrigeration interrupts consumers mindsets. Distributors will also be forced to consider their role in this cold equation. Emerging categories for probiotics are one factor; kombucha, kefir, apple cider vinegars are all reasons. Immediate consumption for non-perishable beverages will be important for large format stores, especially, but as channels blur for retailers, it will be important across all channels.

Cyrus Schwartz

Founder Dora’s Naturals, a New York-based DSD distributor of refrigerated beverages I see craft soda, natural energy, and natural hydration as exciting areas for growth in 2017. We will continue to see migration from established baby boomer brands to millennial brands. The perishable beverages category will also continue to grow, with perishable DSD capacity further developing developing around the country.

56 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

Scott Uzzell

President Venturing and Emerging Brands, an operating unit of the The Coca-Cola Company focused on finding and developing the next generation of brands with billiondollar potential. We expect consumers to look for more and more ways to customize and personalize their experiences and purchases. For the beverage business, that means we’ll see a growing desire for new products that meet specific needs. At the same time, rapid changes in both technology and e-commerce will continue to reshape how people buy our products. The early success of voice-activated, “smart” speakers are just one example of how the retail experience is changing. In beverages, it will be critical to understand how to reach consumers in an environment that is becoming more fragmented than ever.

Chuck Casano

Co-Founder HiTouch Distribution, a Southern Californiabased DSD distributor of fresh, perishable, organic, natural products I’m excited to see a continued increasing trend towards real food and traceability from new brands. The up-and-coming successful brands all have legitimate stories about their sustainability practices and have real ties to their sources. The tea segment has been a little stale and is overdue for a brand to break through.

Jerry Reda

COO Big Geyser, the largest independent DSD distributor in metro New York We love premium water and energy for 2017 in New York. Energy drinks are very underspaced in the New York market and we need to develop the market and create the demand. Monster has the strongest energy portfolio in the world and we need to gain more drinkers.

MARKETING/BRANDING Joy Blakeslee

RDN, Director Culinary and Nutrition Studio Manager, Vice President MSLGROUP’s North America Culinary & Nutrition Center With food emerging as the leading topic of conversation on social platforms, food bloggers have become powerful social influencers with four times the following of other bloggers. That’s only natural – food is a common interest with endless variety and frequent consumption. Food attracts clicks in huge numbers. That’s why in 2017, every consumer brand manager will be asking: How can we use food to start a conversation about our brand? Additionally, as the pharmaceutical industry’s reputation continues to suffer, life expectancy declines and the health insurance landscape faces destabilization, consumers will invest differently in their health. In 2017, food will increasingly become their favored “medicine,” in both meals and food-based supplements. Even doctors will increasingly get on board.

Greg Fleishman

Jenny Zegler

As consumers continue their demand for a clean and green lifestyle, we will see a greater expansion of products utilizing biodynamic ingredients, compostable/ earth friendly packaging, and food waste reduction or re-purposing core to their offering. Effective marketing strategies then will need to play all this up including proprietary direct ingredient sourcing, superior sensory experiences, and ease of use. Authenticity is paramount so relying on open one-to-one connections with consumers leveraging the power of digital marketing is mandatory. It’s the only way to interact on an intimate and mass level. The main point here is that all companies will need to become technological masters in order to be successful.

Time is an increasingly precious resource and our multitasking lifestyles are propelling a need for short-cut solutions that are still fresh, nutritious and customisable, already we have seen so-called “biohacking” food and drink that offers complete nutrition in convenient formats. In 2017, the time spent on – or saved by – a food or drink product will become a clear selling point, inspiring more products to directly communicate how long they will take to receive, prepare or consume. People are seeking the safety of products that are recognizable rather than revolutionary. The trust in the familiar emphasises the opportunity for manufacturers to look to the past as a dependable source of inspiration such as “ancient” product claims including ancient grains and also ancient recipes, practices and traditions. Potential also exists for innovations that use the familiar as a base for something that’s new, but recognizable, such as cold-brew coffee.

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Several emerging brands took big steps forward in 2016, continuing growth rooted in the prior year. That’s why, for the categories we’ve cherry-picked here, we’re showing side-by-side IRI reports: the incursion of new brands in categories was less significant than in 2015, when many of the companies listed here first popped up in retail channels. But if the frequency of new names in the mix was lower in 2016, the growth was greater for the ones who have crossed over, meaning that consumers are taking note of the category invigoration. Newer categories like energy drinks or coconut water (itself spread throughout the store) are the product of entrepreneurial brands, certainly, but it takes innovation and execution to penetrate the established order. It’s still at toehold and foothold levels, but particularly in the refrigerated space, turnover is coming. Center store is harder to change with more entrenched buyers and more category captainship from the big soda companies, but again, many of those categories, like water, sports drinks, coffee and tea, are being invaded by premium brands. We’ve broken our analysis up to show progress across the board.

58 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

ONE-PERCENTERS All hail the one-percenters – those brands in massive categories that have managed to grab or increase their share by just one percent. One percent might sound small, but in a billion-dollar category, revenues for one share point are $10 million – or right about what the fine team at Venturing and Emerging Brands (VEB) considers “proof of concept” for a beverage company. So in a $6 billion category like sports drinks, one percent can mean a whole lot of sales, which Body Armor showed this year, hacking and slashing its way to a gain of almost an entire share point on category leaders Gatorade and Powerade, each of which lost a bit – and lagged the category growth rate in 2016, as well. It was momentum that continued from 2015. Canned juice drinks had a couple of brands from whom the momentum that began in 2015 continued into 2016: Bai Bubbles shot through the DPSG network

in 2015 to establish itself as a having credibility in its own right, next to its non-carbonated older brother, while organic yerba mate brand Guayaki continues to make the right calls as it moves across all channels; the brand has more than doubled in each of the past two years, and has more than two percent of the category. That one percent share mark can be particularly telling when there’s ongoing shift in a category hierarchy. In the refrigerated section, fruit drinks like Sunny D, Tropicana, and Welch’s have long track records of sales in convenience channels, but their share is starting to drop off in supermarkets and other large-format stores. The category growth slowed year-over-year and those mainstream brands are being affected by a fracturing of the market: emerging brands like GTs, Kevita, Mamma Chia, and Goodbelly are all over a share point and showing the energy in the category that the older brands aren’t.

SPORTS DRINKS BRAND

DOLLAR SALES

Gatorade Perform

CHANGE vs. YEAR EARLIER

BRAND

DOLLAR SALES

CHANGE vs. YEAR EARLIER

$3,290,654,720

-0.45%

Gatorade G2 Perform

$300,061,344

-3.31%

Powerade Ion4

$784,714,048

-1.32%

Powerade

$237,213,360

1.58%

Gatorade Frost

$738,851,584

68.07%

Powerade Zero Ion4

$210,685,408

4.48%

Gatorade

$346,322,272

-12.66%

Body Armor

$95,708,616

128.19%

Gatorade Fierce

$317,147,392

7.83%

Gatorade G2

$51,850,560

-5.13%

CANNED JUICE DRINKS BRAND

DOLLAR SALES

RFG FRUIT DRINKS CHANGE vs. YEAR EARLIER

Mountain Dew Kickstart

$260,820,992

-14.27%

AriZona

$179,202,608

San pellegrino

BRAND

DOLLAR SALES

CHANGE vs. YEAR EARLIER

Minute Maid Premium

$220,258,624

5.44%

-7.74%

SunnyD

$218,426,224

-9.22%

$73,502,928

12.63%

Tropicana Top50

$115,568,816

0.68%

V8 V Fusion Plus Energy

$63,596,816

5.18%

Welchs

$90,560,184

-4.28%

Jumex

$58,703,152

7.02%

Tropicana

$64,138,716

12.89%

Minute Maid

$50,413,568

12.44%

GTs Kombucha Synergy

$59,723,484

37.04%

Goya

$34,395,196

19.49%

Simply Fruit Punch

$38,485,408

14.22%

Bai5 Bubbles

$32,792,884

105.64%

KeVita

$32,729,020

81.01%

Kerns

$23,134,308

4.47%

Bright & Early

$27,862,452

-14.99%

Guayaki Yerba Mate

$21,711,234

120.42%

Simply Tropical

$23,603,666

4.34%

SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 1/4/17

GROWTH: NEW & OLD So what are some of the growth categories and the brands that are helping to power them? Sparkling water continued to bubble over with growth, with the share growth divided between four brands: power player Talking Rain, whose revenue growth matched the category’s overall, along with LaCroix, Polar Beverages and Topo Chico. Meanwhile, still water continued to grow at a steady rate – although some of the fastest-growing brands remain below the

radar. Meanwhile, brands of the category’s past and future have all steadily ridden its growth, from commoditized private label to dominant growth story Smart Water, the premium product that continues to gain on warhorse brands like Aquafina and Dasani. That kind of steady growth rate also fits the energy drink category; despite a year in which the category growth rate fell by half, it still grew nearly 6 percent – and the share gap between leaders Red Bull and Monster dropped to less than a quarter-point.

SPARKLING WATER BRAND

DOLLAR SALES

CHANGE vs. YEAR EARLIER

BRAND

DOLLAR SALES

CHANGE vs. YEAR EARLIER

Private Label

$448,132,384

12.12%

Polar

$113,788,712

22.96%

Sparkling ICE

$371,065,824

5.64%

Topo Chico

$63,527,088

27.17%

La Croix

$234,288,784

65.52%

Schweppes

$63,433,472

14.61%

Perrier

$226,966,320

16.90%

Sparkling ICE Lemonade

$58,409,040

-17.78%

San Pellegrino

$127,206,800

11.29%

La Croix Curate

$41,028,020

129.72%

CONVENIENCE / PET STILL WATER BRAND

DOLLAR SALES

CHANGE vs. YEAR EARLIER

BRAND

DOLLAR SALES

CHANGE vs. YEAR EARLIER

Private Label

$2,431,669,760

8.50%

Poland Spring

$690,022,208

8.22%

Dasani

$1,106,935,040

4.52%

Glaceau Vitamin Water

$506,015,232

4.91%

Aquafina

$1,083,125,760

6.93%

Deer Park

$442,442,752

5.97%

Nestle Pure Life

$918,210,304

3.37%

Fiji

$382,333,728

25.04%

Glaceau Smart Water

$872,743,808

11.27%

Ozarka

$344,019,328

-4.47%

ENERGY DRINKS BRAND

DOLLAR SALES

CHANGE vs. YEAR EARLIER

BRAND

DOLLAR SALES

CHANGE vs. YEAR EARLIER

Red Bull

$2,951,566,592

-0.26%

NOS

$402,419,264

-1.21%

Monster Energy

$1,550,941,824

5.48%

Monster Rehab

$313,994,784

0.03%

Red Bull Sugar Free

$729,260,480

10.07%

Monster Energy Lo Carb

$310,998,112

-0.88%

Monster Energy Zero Ultra

$520,961,664

19.16%

Red Bull The Summer Edition

$293,201,504

76.04%

Java Monster

$420,527,712

18.22%

Rockstar

$260,349,248

-1.34%

SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 1/4/17

60 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

NEW KIDS ON THE BLOCK Meanwhile, say hello to Les Enfants Terribles, those new brands that have come from nowhere (at least in terms of IRI) to start registering sales in the mainstream channels that these readings tend to represent most accurately. Argo Tea debuted with a half-point of share in the tea category, which continued to expand even as top brand AriZona bled a bit of share to Pepsi and Coke plays like Lipton and Gold Peak. Honest, meanwhile, continues its slow but relentless march of 20 percent revenue growth year-over-year, showing the miracle of compound interest. In the case of Aloe Gloe – and kid sibling brand Aloe Rey – the move into mainstream grocery in New York and Los Angeles from Coke’s own distribution system has resulted in immediate leadership of the Aloe Vera Juice category, one that’s already hard to pin down because of

the variety of small-scale aloe drinks out there. If these brands continue to grow, expect a couple more years of category dominance before the category starts to show the rest of the players. Of course, Aloe Gloe’s founders tend to think of the brand as more “aloe water” than “aloe juice” – and that’s the same approach taken by WTRMLN WTR, another brand that debuted in its category this year and snared a bunch of sales. Part of the path was bushwhacked by another brand that broke into conventional a couple of years ago, Harmless Harvest, which is now big enough to have invited its own competition from other premium coconut water brands like Coco Community and Waterhill. Those two are too small to be considered bad babies, but come 2018, when we’re here again, odds are they’ll have turned into pretty loud toddlers.

TEA BRAND

DOLLAR SALES

CHANGE vs. YEAR EARLIER

BRAND

DOLLAR SALES

CHANGE vs. YEAR EARLIER

AriZona

$664,480,960

-2.03%

Snapple

$224,395,312

1.29%

Lipton Pure Leaf

$601,294,720

11.93%

Lipton Diet

$196,032,560

3.77%

Lipton Brisk

$334,863,936

-2.16%

AriZona Arnold Palmer

$192,268,896

-5.26%

Gold Peak

$382,825,728

38.03%

Diet Snapple

$174,013,216

-3.35%

Lipton

$318,198,880

0.27%

Honest Tea

$58,339,444

21.53%

ALOE VERA JUICES

RFG ALL OTHER FRUIT JUICES

BRAND

DOLLAR SALES

CHANGE vs. YEAR EARLIER

BRAND

DOLLAR SALES

CHANGE vs. YEAR EARLIER

Aloe Gloe

$1,216,130

N/A

POM Wonderful

$87,131,672

19.80%

Aloe Rey

$779,629

N/A

Harmless Harvest

$11,737,528

19.83%

Lily of the Desert

$635,885

7.96%

Sambazon

$4,510,976

-18.20

Fruit of the Earth

$548,031

8.84%

We Grow Water WTRMLN

$2,809,732

N/A

Aloe King

$419,413

-2.64%

Bolthouse Farms

$2,762,857

-12.90%

Request

$367,642

-10.87

Zico

$2,592,445

10.30%

Juice Sensations

$295,768

-36.59%

Noble

2,544,746

17.88%

Jayone

$202,077

-27.88%

Waterhill Naturals

$1,902,264

N/A

George’s

$127,778

20.69%

Sambazon Organic Acai

$1,062,462

N/A

Lakewood Organic

$70,789

29.28%

Sambazon 100

$851,448

N/A

SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 1/4/17

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& Juice cocktails. Snoop Dogg creatively oversees this cocktail platform founded in the success of his 1993 classic hit ‘Gin & Juice’ and the cultural cachet that it maintains today. Inspired by Tanqueray and the “gin lifestyle,” each individual embodies sophistication, creativity and a masterful blend of timeless style. They are all visionaries in various

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Charities to Receive O.F.C. Vintage-Dated Bourbon Two hundred lucky charitable recipients received an extra special holiday gift from Buffalo Trace Distillery this year, as the last of the bottles of the O.F. C. Bourbon have been shipped all across the United States. From there, it’s up to the charities to hold fundraisers of their choosing with hopes of raising thousands of dollars for their cause. The only requirement from Buffalo Trace is the charity hold their fundraiser by March 1, 2017 and report back how much money it raised. All of the selected charities have been notified and are in the process of receiving their bottle. The rare bottles are not available in stores, bars or restaurants, so true collectors will need to bid high at the various charitable events so the organizations can raise as much money as possible. 62 BEVNET MAGAZINE – JANUARY/FEBRUARY 2017

The O.F.C. Bourbon is vintage dated according to the specific year in which the bourbon was distilled at Buffalo Trace Distillery. The first release is comprised of only 200 bottles; 100 bottles from the year 1980, 50 bottles from 1982, and 50 bottles from 1983. Each charity selected will randomly receive one of these three particular vintages. This is the second time Buffalo Trace Distillery has partnered with non-profit organizations to raise money. In 2011, the Distillery gave away 174 bottles of its Millennium Barrel, the last bourbon barrel filled on the last day of the last century. In total more than $150,000 was raised for various charities across the United States, with the top organization raising more than $7,000 for their cause.

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PROMO PARADE Evolution Fresh Offers Free Product For National Green Juice Day After cookie baking, gift shopping and holiday entertaining come to an end, many of us embark on another annual tradition: setting New Year’s resolutions. While they are easy to claim, resolutions can be hard to keep. Evolution Fresh established National Green Juice Day in 2016 as a way to encourage people to keep their wellness resolutions in the New Year, after finding that 53 percent of Americans have already broken their New Year’s reso-

lutions by the end of January and that staying fit and healthy is a top resolution. This year Evolution Fresh invited customers in 10 cities to “take a sip in a brighter direction” and celebrate National Green Juice Day with free green juice deliveries. Evolution Fresh teamed up with Postmates to deliver a pack of three 11 fl. oz. bottles of cold-pressed, high pressure processed Smooth Greens & Kale to customers in 10 select cities across the country.

Chicago Cubs And Jim Beam Bourbon Announce Legacy Partnership Two American icons are converging as Jim Beam Bourbon and the 2016 World Series Champion Chicago Cubs have signed a multi-year Legacy Partnership beginning in 2017. The Cubs have named Chicago-based Beam Suntory, the world's third largest premium spirits company, as the Official Spirits Partner of the Chicago Cubs and Wrigley Field. The exclusive distilled spirits sponsorship will feature multiple brands from Beam Suntory including Jim Beam, Maker's Mark Bourbon, EFFEN Vodka and Hornitos Premium Tequila.

As part of the partnership, Jim Beam will have long-term naming rights to the new first base club at Wrigley Field, as well as a new left field bar concept at Sloan Park in Mesa, Arizona. The upper deck patio at Wrigley Field will feature a Jim Beam theme for two seasons leading up to the space's transition to an upper level club. The existing Hornitos Hacienda, which was named in 2015, will remain in the left field bleachers. The deal also includes in-game signage behind home plate and on the Wrigley Field video board; fixed signage along the

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third base wall; presenting sponsorship of several promotional giveaways throughout the season; and other digital and hospitality activations at Wrigley Field and Sloan Park. To reinforce this partnership

with Cubs fans, Maker's Mark has launched a Chicago Cubsthemed, limited-edition bottle offered in stores throughout the Chicagoland area; Jim Beam will release a Chicago Cubs cobranded offering by springtime.

NBA and Jack Daniel’s Announce New Partnership

Jack Daniel’s and the National Basketball Association (NBA) announced a new multiyear partnership making Jack Daniel’s an official marketing partner of the NBA, the Women’s National Basketball Association (WNBA), the NBA Development League (D-League), and USA Basketball. This marks the largest partnership with a professional sports league in the brand’s history.

Jack Daniel’s tipped off the partnership during NBA All-Star 2017 in New Orleans with Jack Daniel’s House No. 7 – its hospitality and experiential event, which will be open for two nights bringing local fans and NBA guests together for musical performances, guest rooms with unique programming, eclectic eats inspired by southern cuisine, and basketballthemed activities. Jack

Daniel’s will also serve as a partner of the NBA All-Star Celebrity Game. Jack Daniel’s, which celebrated its 150th anniversary in 2016, will host a variety of events, media and hospitality programs throughout the NBA, WNBA, NBA D-League and USA Basketball. Jack Daniel’s will also develop NBAthemed programs at retail stores and create custom marketing and advertising campaigns.

Ole Smoky Distillery Teams with WGN America’s “Outsiders” Ole Smoky Distillery LLC has partnered with WGN America to create a co-branded program in support of the highly anticipated second season of WGN America’s “Outsiders.” The collaboration includes a limited edition moonshine SKU, TV spots, digital media, in-store POS, and a national sweepstakes. The limited edition Ole Smoky Outsiders Farrell Shine is inspired by the fictional “Farrell Wine” featured in the show and contains similar ingredients. Ole Smoky Outsiders Farrell Shine is a 70-proof ginger and ginseng-

flavored moonshine, housed in a unique, commemorative mason jar. Consumers and viewers will have a chance to win a trip to Tennessee by entering the “C’mon Live Like An Outsider” Sweepstakes. One winner plus three guests will be flown out to Gatlinburg, TN where they will learn how to make moonshine at Ole Smoky’s distillery, the Holler. The winner will also get to enjoy outdoor activities such as ATV riding, fishing, hunting, and more. Ole Smoky’s Outsiders Farrell Shine will be available for a limited time.

Brewery Ommegang to Release New “Game of Thrones” Beer When fans last gripped their glasses at the end of the sixth season of HBO’s hit show “Game of Thrones,” the great houses of Westeros were on the brink of an epic conflict. Cersei had ascended to the Iron Throne as the first queen of Westeros, Jon Snow and Sansa Stark had just reclaimed the North, and Daenerys Targaryen had set sail for the Seven Kingdoms. To commemorate the coming mêlée in the Emmy Awardwinning show’s epic seventh season, Brewery Ommegang and HBO Global Licensing have announced a new beer in their collaborative series: Bend the Knee Golden Ale. Paying homage to the struggle for control of the Seven Kingdoms, Bend the Knee will be available on draft and in a series of three collectible 750 mL bottles,

all finished in matte black and adorned with one of the three Great House sigils: Stark, Targaryen, or Lannister. The beer is brewed with pils malt and flaked oats and hopped with Saaz, Bravo, and Styrian Golding hops. It pours a golden hue with a large, frothy head. Both the aroma and flavor mix maltiness and citrus from the hops, while Ommegang’s signature house yeast produces prominent fruitiness. Wildflower honey added during fermentation provides light sweetness to the beer, which finishes dry and with firm hop bitterness. The beer clocks in at 9.0 percent ABV. While the show’s return date has yet to be announced, fans can mark their calendars for the official nationwide release of the beer, which will be on shelves around Memorial Day. 65

PROMO PARADE

Actor Clive Owen Partners with Campari on Short Film Series Campari, Italy’s iconic bittersweet red aperitif, has unveiled the Campari Red Diaries, a holistic evolution to the famed, annual Campari Calendar. A departure from its classic calendar format of photographic stills, Campari Red Diaries is a series of short films that showcases how “every cocktail tells a story.”

The series celebrates cocktails as a powerful vehicle for expression, and shines a light on what inspires bartenders to share their craft. The lead story in the series, Killer in Red, is a short film starring Golden Globewinning actor Clive Owen and written and directed by Paolo Sorrentino, the Ital-

ian internationally-renowned award-winning director most recently known for his work on the highly anticipated HBO series “The Young Pope.” Set in a luxurious bar, the noir film captures Clive Owen’s transformation from ordinary man to notorious bartender of the early 1980s, as he recounts the story be-

hind the creation of a cocktail called “Killer in Red.” The film jumps between the past and present, using original costumes from the 1980s and a cast of more than 170 people to portray the era’s energy and style. The project can be viewed exclusively on Campari’s YouTube channel.

5-hour ENERGY Shots Enters eSports with Detroit Renegades Sponsorship Living Essentials, LLC, the makers of 5-hour ENERGY shots, announced the company’s sponsorship of the Detroit Renegades, North America’s premier multi-gaming eSports organization. As a key com-

ponent of the sponsorship, The Detroit Renegades’ new Overwatch playing team, which made its debut at the Winter Premier Tournament where they won their first four rounds, is branded “The

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Detroit Renegades 5-hour ENERGY Overwatch Team.” Owned by NBA power forward and video game enthusiast Jonas Jerebko, The Detroit Renegades features professional eSports players

and teams in Counter-Strike: Global Offensive, Call of Duty, Super Smash Brothers, and Overwatch. This is Living Essentials’ first eSports sponsorship using the 5-hour ENERGY brand.