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Contents / January – February 2018 / Volume 16 / No. 1
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48
52
64
COLUMNS
FEATURES
4 First Drop Getting Creative With Water
44 Ingredient & Flavor Trends Our Future Forecast
6 Publisher’s Toast Investment Comes In
48 Craft Mixers Invade Walmart with brand news
30 Gerry’s Insights On DPS/Keurig
52 Cold Brew Rising with brand news
DEPARTMENTS
58 Best of Why LaCroix Won
8 Bevscape/NOSHscape/Brewscape Jaden Smith, Investor; Lactalis Buys Siggi’s; Tax Changes
SHOW COVERAGE
20 New Products Mountain Dew Ice
36 NOSH Live: Manifesting a Mission
26 Channel Check Spotlight on Coffee
32 Expo West Preview 40 BevNET Live: Growing and Thriving 42 Brewbound Session: The Future of Beer
64 Promo Parade Aaron Judge Follow Us Online www.twitter.com/BevNET
www.facebook.com/bevnetcom
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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
Getting Creative With Water Noting where things are at the start of the year, it’s not surprising to me at all that I’m writing this in Watertown. At this point, it feels like it could be Water Country. You can’t keep bottled water bottled up. It’s risen from pennies-per-unit commodity pricing on the floor of grocery stores a decade ago to comprise the bulk of the growth in the beverage business last year, according to analysis from Euromonitor International. According to IRI, it’s a $16 billion category. Combined with the rise of energy drinks – which offer a higher-boost alternative – and the growth of a smaller set of newly commercialized products like kombucha and cold brew, it’s the growth of premium and specialized water brands over the past few years that has knocked soda off its pedestal and into its current decline. In 2016, bottled water consumption passed soda, and it was bottled, premium priced PET that did it more than the cheapest commodity waters, according to the Beverage Marketing Corporation. Now, we’re in a moment when the growth of exciting brands that spur consumer imagination and create subcategories all their own is driving the fastest growth. It’s coming out of subcategories that just weren’t apparent a decade ago. There’s the high-end set of brands like Fiji, Evian, and now Voss, Icelandic Glacial, Eternal Water, Volvic, and others, as well as the functional group of Smartwater, Core, Life Water, Essentia, Aquahydrate, and more, each altered just enough to offer a marketing edge around electrolytes, production method, or alkalinity. On the bubbly side, even as Sparkling Ice has cooled off, insurgent brands like LaCroix, Polar, Topo Chico, and even Perrier are through the roof, with high-end alternatives like Hint Fizz, Spindrift and Waterloo on the way up. The recent announcement that Nestle Waters North America was upscaling some of its product packaging for improved DSD performance on its regional brands is indicative of how much meat these already dominant companies believe is still on the category bone. Why should LaCroix sell better than Zephyrhills or Poland Spring, goes the thinking. Certainly, the flavored success of distributor driven brands like Hal’s (Big Geyser) and Polar make the argument that there’s plenty to be gained from a little bit of creativity. But creativity is coming in bigger leaps, as well: water brands with extra hydrogen, like those from Nick Perricone and H-Factor. Kona Deep sells water from underneath the Pacific Ocean. So-called “raw water” is being bottled and upcharged from underground aquifers. On the packaging side – once considered the only edge for bottled water
4 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
branding – environmental statements like Boxed Water and Just Water have reversed the argument that bottled water packaging is a waste of resources. There’s been plenty of bottled water backlash in the past. It brought out competitive packages that were designed to cut the bottle out of the equation: the Hydroflask, the S’Well, Contigo, Bkr. They’ve had the added benefit of increasing overall water consumption by reinforcing the notion that water is as much a necessary accessory as a briefcase. Don’t have your S’Well? Get a Kona. Perhaps the most telling indicator that bottled water was bouncing back was the Sigg. Remember when that “permanent” replacement for your Smartwater was revealed to be a source of BPA? People went right back to buying disposables. All of this is great, until you think about some of the major water crises taking place around the world and even at home. You think about the fact that Cape Town, South Africa is in the midst of such an extreme drought that it has its own deadline for when water will be shut off. You think about the pipes in Flint, Mich., where lead flowed into household taps. You think about the mudslides that followed the drought in Santa Barbara, Calif. killing at least 20. Then, you think about the enormous capabilities that potable water access creates for communities. You think about the brands that are founded for just this purpose, the Charity: Water and Give Water and Purpose Water products that have tried to do good as we have arced toward this moment when our greatest shared resource is bottled and sold millions of times a day. And you wonder: with this kind of commerce, what would be the effect of a simple, across the board, one-cent per bottle transaction tax? What about making it global in “civilized” countries? What about a fund, geared toward eliminating water-based disasters? We consumed more than 13 billion gallons of bottled water last year in the U.S. There are about seven 16 oz. bottles of water in every gallon. That’s more than $900 million toward that fund from the U.S. water industry alone, and if you levy it equally, it won’t have competitive impact. If you’re worried about water losing ground against other beverages, you shouldn’t: the health halo around water is such that recycling, environmental arguments, BPA, and the Thermos haven’t been able to derail it. Crazy, I know. But it’s also crazy that we’ve built a massive business out of reselling something that falls out of the sky. It’s nice work, if you can get it, and if you’re so fortunate, maybe it’s crazy not to share that good fortune while you can. After all, water ebbs and flows, just like fortunes.
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PUBLISHER’S TOAST BY BARRY NATHANSON
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www.bevnet.com/magazine
It’s About Time
Barry J. Nathanson PUBLISHER bnathanson@bevnet.com Jeffrey Klineman EDITOR-IN-CHIEF jklineman@bevnet.com Ray Latif MANAGING EDITOR rlatif@bevnet.com Martín Caballero ASSISTANT EDITOR mcaballero@bevnet.com Brad Avery REPORTER bavery@bevnet.com Chris Furnari BREWBOUND EDITOR cfurnari@bevnet.com Justin Kendall BREWBOUND ASSISTANT EDITOR jkendall@bevnet.com Carol Ortenberg PROJECT NOSH EDITOR cortenberg@bevnet.com Meagan McGinnes PROJECT NOSH SENIOR REPORTER mmcginnes@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 Jon Landis SENIOR BRAND SPECIALIST jlandis@bevnet.com
As you all know by now, I’m an unabashed fan of the little guy. I admire the innovators, entrepreneurs and risk takers. They’ve been the heart and soul of the beverage industry for years – and I’ve seen many of them turn into the standard bearers of the industry. Arizona, Vitaminwater, Honest Tea, Fuze, Sparkling Ice, Monster, Body Armor and others all started with the same humble beginnings that face the dreamers of today. I was privy to these brands from inception, and followed their successes to the present day. It has been my privilege to have worked with so many of them. The newest generation of entrepreneurs is now rising, but the times are different. In earlier days, these brands were mostly self-funded, with infusions from friends and families. Yes, investors were often involved, but they were more passive. Today is a new breed as the stakes are higher and capital is more essential to bringing the brands to market. One just has to attend our BevNET Live to understand the stakes. Or you can go onto our site and receive our daily newsletters to see the importance of investment to enable these brands to grow. Money makes it happen. Every day, I’m in conversations with emerging brands that are in need of capital – and until recently, much of what
6 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
I heard was frustration. They would be in contact with investors, but for the most part, the money wouldn’t come in. There would be big talk from the money people that they wanted to invest, but it would be mostly talk. The amount of investment wouldn’t match the number of worthy companies seeking funding. Whenever they read a BevNET post about a brand raising money, they were perplexed why it didn’t happen for them. Yes, there were a myriad of reasons, some quite valid, but it’s always sad when worthy brands don’t make it because of a cash crunch. Today, though, I’m very excited about the prospects. Over the past few months, I’ve heard frustrations turn to optimism. Last week alone, I met or spoke with five different brands that are closing in on funding. That wasn’t happening even a year ago. I am often called upon to speak with potential investors at the behest of the brand owners. The conversations are positive and there is realism in the mutual goals of both parties. They all want to make it happen. Beverages have always been an exciting category for investors. Now they’re turning talk into action. With so many great brands out there seeking funding, it’s great to see funding seeking brands. It’s long overdue, but I’m grateful it’s happening.
Kwaku Adu-Gyamfi SALES & MARKETING ADMIN kadugyamfi@bevnet.com
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Matthew Kennedy CREATIVE DIRECTOR Aaron Willette SENIOR DESIGNER Nathan Brescia PHOTOGRAPHER
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BEVSCAPE
THE LATEST BEVERAGE BRAND NEWS
We’re So Much Water: Jaden Smith Talks JUST Investment Water gave life to everything on Earth. And water can destroy everything on Earth. That’s the philosophy of Jaden Smith – actor, rapper, fashion designer, and budding entrepreneur. The 19-year-old son of Hollywood A-lister Will Smith, Jaden and his father have invested as co-founders in socially conscious bottled water brand JUST Water, pushing the younger son further into the spotlight as a spokesman for the brand’s sustainability efforts. BevNET caught up with the teenage star this month to talk about what it’s like to enter
being responsible for that small amount of fossil fuels that were burned to create that energy,” he said. “I’m thirsty and drinking water, I shouldn’t also do something bad to the environment. So, our mission with JUST is very very clear – we’re just trying to work on whatever is going to help the environment and help us feel better about hydrating ourselves, and not have to feel bad about it.” Jaden now wants to up the ante by collecting discarded bottles and converting them into long-lasting furniture, which can
tries to curve its carbon footprint by using hybrid vehicles for transportation and by refusing to ship overseas. The teenage star also talked about his love of surfing and spiritual connection to water, which helped open his eyes to the need to save the environment. “Water creates everything. It’s the softest and the weakest thing on the Earth, and yet it will tear down anything. And it can destroy anything. And it’s the only thing that can also bring life to things. And everything here has water in it,” he
the beverage industry, balance an entertainment career, and why he feels a deep spiritual connection to water. Smith was drawn to the brand because he sought a way to change the way consumers think about their everyday impact on the environment. JUST Water’s paper and aluminum packaging is 82 percent renewable, and according to Smith, he believes it poses a serious disruption to plastic packaged brands. PET plastic bottles, he said, are inviting bad karma into people’s lives. “A child, when they turn on the light in their room, one that’s extremely educated, shouldn’t have to feel bad for
then be sold or donated. Tables made from thousands of used JUST bottles, which he calls “landfills,” have been given to schools via the JUST Build initiative. Jaden even claims that some of the drywall in his house is made of crushed cartons. “I want to start selling landfills, like I’m gonna sell you 10,000 bottles but it’s in the shape of a chair, or it’s in the shape of a table, or it’s in the shape of a projector, or it’s in the shape of a frame for an art piece,” he said. “I want to start making art pieces out of trash, and I want to recycle over a billion bottles of water by the end of 2018.” Although its difficult to run a sustainable CPG company, Jaden said JUST
said. “For me, water is such a spiritual and personal thing, especially because of surfing. How the tides and the waves interact; it’s like humans have tides as well because we’re so much water.” In addition to JUST, Jaden is also busy with his entertainment career, preparing to release a new rap album. He also has two new feature films in production. “I’m gonna do it all, because I can,” he said. “I can drop a song on Apple Music right now. I can drop a song tonight, I could make a movie and put it on YouTube! It’s like why wouldn’t we? Let’s just be the ultimate creators while we’re here, because sadly we’re all gonna die one day.”
8 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
Boochcraft Pushing Boozier Kombucha Brews
In launching San Diego-based brewery Boochcraft, Adam Hiner and his fellow co-founders made a bold choice to make their brand stand out from the crowded field: jumping from the category standard of 0.5 percent alcohol by volume (ABV) or lower to around 7 percent. The decision has proven to be good one thus far: Boochcraft, which has been limited to distribution in retailers across California, has found early success for its “hard” line of kombuchas in Whole Foods. Boochcraft isn’t the first startup kombucha brand to make alcohol a key focus
of its offering. Yet while other brands have been around 3.2 percent ABV or less, Hiner, taking some inspiration from the Southern California craft beer scene, chose to formulate Boochcraft at 7 percent ABV, or, as he described it, as potent as possible without making the drink alcohol-forward. “We wanted it to be enough to where you could get a buzz, but we didn’t want to make a sessionable thing where you have to drink ten of them to feel it,” Hiner said. “Being in Southern California, most people are used to going out and ordering
a 7 percent ABV beer, like a standard IPA. We wanted to match that as well.” Hiner noted that the product needs to go through craft beer distributors which are often lacking the cold chain infrastructure Boochcraft requires, an issue that will be particularly acute as the company expands outside of California. That expansion will be supported by a tenfold increase in production capacity in the coming months, as Hiner said the company has 18,000 sq. ft. of space in its current facility that will be utilized to make more product.
Danone Leads $5.5 Million Investment Round in Kona Deep In November, bottled water producer Kona Deep Corporation announced it had secured a $5.5 million investment from Danone Manifesto Ventures, Grand Crossing Capital and local Hawaiian investors. Kona Deep marked the fifth investment from the year-old funding arm of Danone, which focuses on supporting innovative and healthy food and beverage companies. Founded in Hawaii in 2014, Kona Deep manufacturers a premium bottled “deep ocean” water with naturally occurring electrolytes and minerals sourced from the Pacific Ocean. The brand has is currently available primarily at retailers on the West Coast,
but Turpin told BevNET that the new investment will help the brand expand to new regions in other areas of the country. “Danone as a partner, from our standpoint, brings a lot to the table given their deep experience in the premium water set globally,” he said. “They believe as we do that there are some deep ocean water opportunities both internationally as well as in North America.” In addition to retail expansion, the funding from Danone will go toward increasing bottling plant capacity in Hawaii. The company is also expanding its team for new markets, as well as hiring additional sales and marketing personnel.
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Kick
Caffeine To The Curb.
Humm Kombucha To Open $10M East Coast Facility
Bend, Ore.-based Humm Kombucha is preparing to build a new $10 million, 100,000 sq. ft. facility in a 440-acre industrial park in Roanoke, Va. that will be the future home of the brand’s East Coast brewery. The 12-acre site, set to begin construction in January 2018, will be roughly 3.5 times the size of Humm’s current facility and create approximately 50 jobs when it opens in 2019. Humm co-founder Jamie Danek explained the company chose to expand in Roanoke because of the city’s cultural values and because business-friendly atmosphere. Governor Terry McAuliffe approved a $150,000 grant from the Commonwealth’s Opportunity Fund to assist the city of Roanoke with the project. “It’s an impressive group of people and an impressive town,” said Danek. “They are so organized and have all their bases covered and really care about creating jobs and bringing industry to this area.
Nestlé USA Acquires Chameleon Cold-Brew
Nestlé USA acquired coffee company Chameleon Cold-Brew for an undisclosed sum in November, roping the Austin, Texas-based brand into its widening coffee portfolio and further positioning the food and beverage conglomerate to challenge and disrupt the U.S. ready-to-drink (RTD) coffee market. Under the terms of the deal, Chris Campbell, co-founder, CEO and president of Chameleon, remained in his position. Chameleon will receive financial support and access to Nestlé’s production and distribution networks as well as industry data that will help facilitate the brand’s growth nationwide. “The key thing here is that we’re going to keep doing what we’re doing, but we’re going to do it faster, bigger and better,” Campbell said. Founded in 2010, Chameleon has quickly grown to become one of the top cold brew coffee brands in the U.S., with its concentrate and ready-to-drink coffee lines finding success in the natural and speciality channels via retailers such as Whole Foods. The company reports it sold more than four million bottles in 2016 and has already topped that number for 2017, with placement in more than 10,000 retailers nationwide. 10 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
Juice Served NWNA Sells Here Announces Tradewinds and Closure Sweet Leaf Tea
Cold pressed juice company Juice Served Here (JSH) announced its closure in December. In an official statement posted to its website and social media accounts, Alex Matthews, CEO and co-founder of Los Angeles-based cold pressed juice retailer Juice Served Here (JSH), announced the company was shutting down. “I am of so proud of what JSH has achieved in just 4 short years,” Matthews wrote. “The beverage industry is exhilarating, challenging, and fascinating. We have loved being part of it. However, the beverage industry is also changing. Change is the one constant you can rely on and the one thing that must be embraced. It is with sorrow but, having embraced change, also with confidence and optimism, that I am announcing the closure of JSH.” Juice Served Here started from a single raw juice shop in Los Angeles and grew into a robust retail and wholesale operation with a total of 13 locations at its peak in 2015. That included direct-to-consumer e-commerce sales and a presence in retailers including Whole Foods and Sprouts. In addition to cold-pressed 100 percent juices, juice cleanses and juice blends, the brand also marketed a variety of smoothies, tonics, lemonades and 2 oz. single serving juice shots.
Nestlé Waters North America in December announced the sale of ready-to-drink iced tea brands Tradewinds Tea and Sweet Leaf Tea Company to Dunn’s River Brands, a portfolio company of private equity firm Fireman Capital Partners based in Texas. Financial details of the deal, expected to close by the end of the year, were not disclosed. This is the first acquisition for Texas-based Dunn’s River Brands, which was founded by industry veterans Kevin McClafferty, Lee Brody and Ian Knowles. McClafferty – who serves as President and CEO – said more brands will be added to the portfolio in the near future. “We absolutely believe in the legacy and the quality that Tradewinds and Sweet Leaf bring to the marketplace, so it was very attractive to have the opportunity to get to know these brands better and they fit with the mission and charter of what we hope to accomplish,” said Brody, who serves as CMO. Sweet Leaf Tea Company, founded in 1998, acquired Tradewinds Beverage Co. in 2010. In 2011, it was acquired by Nestlé Waters North America, following a $15.6 million investment from the company two years prior. In a press release, Nestlé Waters North America president and CEO Fernando Mercé said the company opted to sell Sweet Leaf and Tradewinds as part of an ongoing strategy to focus on strengthening its core brands. The sales leaves Nestea as the company’s only ready-todrink tea line.
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NOSHSCAPE
For more stories, check out ProjectNOSH.com
THE LATEST FOOD BRAND NEWS
New Fund: Almanac Investments Launches David Barber, co-owner of restaurants Blue Hill and Blue Hill at Stone Barns, has launched Almanac Investments, a $30 million fund for agriculture and hospitality technology, CPG, and experiential retail companies. Typically, Almanac will invest in seed or series A rounds for early stage brands and has already closed three investments. Joining Barber is Zoe Feldman, who will serve as managing director of the fund. Both Barber and Feldman have experience in the investment world. Barber, an angel investor himself, is an advisor to venture fund S2G Ventures and Acre Investments, whose sole limited partner is The Campbell’s Soup Company, while Feldman, a former PepsiCo executive, most recently was the managing director for Cleveland Avenue’s fund. Almanac hopes to set itself apart from other funds by developing a deep pool of resources – in data, marketing, public relations, accounting, supply chain, operations and more – that not only will assist with vetting prospective investments but then can be hired by companies once they are part of the Almanac portfolio. Barber hopes that assembling this team will help create a more unified support system for the entrepreneur. “I found it shocking that [service providers] don’t talk to each other that much about the companies that they are simultaneously working on. They are working adjacently but they aren’t actually collaborating. So our idea is to get them collaborating on our behalf,” Barber said. “It’s a huge value add to the entrepreneur.” Too often, Feldman said, small brands have to choose between initiatives due to a lack of capital. For example, having to choose between buying data and hiring a bookkeeper, or designing sales strategy and finding a great communications firm. “What we’re doing is eliminating the barriers for them to both find and afford these resources,” Feldman added. 12 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
Although Almanac is not an impact investing or evergreen fund and will only invest in companies where they expect to see a return on investment, Barber does plan for these investments to take longer to come to fruition. As a result, Almanac plans to only invest in one to two companies per year and at any one time, and expects to have up to six brands in the portfolio that require more hands-on attention and operational support. This “long tail” capital, Barber believes, will allow Almanac to have a deeper relationship with its portfolio companies
and more time for its team of resources to assist brands. “We want to help businesses build a strong foundation in this ecosystem,” Barber said. “We think those have both the best chance of surviving no matter what and I think they are the ones that are going to contribute the most in the long term.” Barber told NOSH that the capital for the fund was raised from individual investors and although there were offers from strategics, he felt the goals of the fund were not conducive to the ways large strategics view deploying capital. All of the individuals invested in the fund, Barber said, are interested in building a “healthy food ecosystem” and next generation companies.
Lactalis Buys Siggi’s Icelandic-style yogurt producer Siggi’s sold to global dairy company Lactalis in January. The company will continue to operate out of its New York City office with founder Siggi Hilmarsson as CEO and Bart Adlam as President. Siggi’s says its products, known as “skyr,” comprise the fastest growing yogurt in conventional grocery. J.P. Morgan Securities acted as the exclusive financial advisor while The Giannuzzi Group acted as legal counsel to siggi’s.
The deal will allow the brand to continue to expand while maintaining its quality standards, Hilmarsson said. “We will just be supported even further by Lactalis, which has vast expertise in dairy operations and that knowledge will just help further enable our growth,” he told NOSH, adding that the opportunity to partner with Lactalis “[will} enable siggi’s to continue to operate independently and keep our great team in place while tapping into the dairy expertise of the biggest dairy company in the world.” The deal was the second major dairy acquisition for Lactalis – which had previously had little business in the U.S. – in less than a year. In July, 2017, the company purchased organic yogurt pioneer Stonyfield Farm from Danone for $875 million, a deal forced by Danone’s own purchase of White Wave. Between the two brands, Lactalis now owns two of the top players in the premium, natural yogurt set. As part of the deal, Lactalis picked up dairy conglomerate Emmi’s 22 percent ownership stake in siggi’s. the skyr business. Reports have pegged siggi’s 2018 sales at roughly $200 million. Hilmarsson told NOSH that siggi’s topline grew 50 percent in 2017 and he expects the company will match this growth in 2018 as the brand launches additional innovations.The company’s low-fat, high-fat, drinkable, and children’s yogurts are sold nationwide in retailers including Whole Foods, Publix, Target, Wegmans and Starbucks.
NOSHSCAPE $55 Million for Beyond Meat
Plant-protein powerhouse Beyond Meat announced the close of a $55 million round in December. Leading the round was Cleveland Avenue, LLC, the venture capital firm founded by Don Thompson, former CEO of McDonald’s Corporation. “We see Beyond Meat as a strategic and compelling consumer-focused investment,” Thompson said in a statement. “Customer response to Beyond Meat’s great-tasting products has driven its growth, and we’re excited about our investment as the brand continues to innovate for the future.” Tyson Foods, one of the largest meat providers, also contributed to the round. In October 2016, the large strategic made its first investment in Beyond Meat, acquiring a five percent stake in the company for an undisclosed amount. While terms of this latest raise were not disclosed,Tyson noted in a statement that its “latest investment slightly increases its ownership stake in Beyond Meat from the five percent established a year ago.” Beyond Meat also raised an undisclosed sum from actor Leonardo DiCaprio roughly two months ago. 14 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
The capital will be used to more than triple Beyond Meat’s production footprint – a move that follows the September opening of fellow plant-based burger brand Impossible Foods’ new 68,000 square-foot Oakland, California-based facility. The competitor has also seen capital recent months, closing a $75 million round of funding in August 2017. Both Impossible Foods and Beyond Meat often share the spotlight for their meat-like burger patties, which are designed to closely resemble the taste, texture and look of a beef-based burger. For both companies, the goal is to focus less on the vegan consumer and more on meat eaters looking to incorporate more plant-based options into their diets. However the two have utilized different distribution strategies thus far, with Impossible Foods remaining focused on food service distribution. Beyond Meat first launched as a Whole Foods Market exclusive, but has quickly grown to be sold in over 5,000 stores nationwide. Since then, the company has also embraced food service as well. In recent months, the company explored a soft launch in restaurant
TGI Fridays, and is expected to roll out across the chain’s 469 restaurants in 2018. In a statement, Beyond Meat also noted the capital will be used to further fund its R&D work, and expand sales and distribution. The latter will be key in fending off other plant-based players, who increasing are drawing the attention – and capital – of large corporations. Earlier in December, Field Roast Grain Meat Co., which produces vegan meat and dairy alternatives, was acquired by major meat producer Maple Leaf Farms; also in 2017, Nestle Foods acquired Sweet Earth. These transactions have occurred as classic brands realize they need to partner with plant-based companies rather than risk losing share to them. “Global demand for all protein remains high and we’re passionate about meeting that demand sustainably,” Justin Whitmore, executive vice president corporate strategy and chief sustainability officer of Tyson Foods, said in a statement about the acquisition. “Our investment in Beyond Meat provides another fantastic alternative for consumers as we strive to sustainably feed the world.”
Shoppers Looking Online to Save Money More than 25 percent of shoppers are regularly buying their groceries online – and while convenience is playing a role, it’s not the whole story. A new survey from consumer insights group IRI found that shoppers are looking online in efforts to be mindful about their spending on everything from personal care to groceries. When it comes to stocking their fridges, 28 percent of consumers said they buy grocery items online compared with 23 percent of consumers surveyed during the same time frame in 2016. While shopping online may have more administrative costs, consumers felt that they ultimately saved money. Customers who shopped online for food and groceries noted that one of their main motivations was to cut down on impulse purchases at the store. Overall, 51 percent of total shoppers felt they make fewer unplanned purchases online. IRI also found that 20 percent of
ership for IRI, said in a statement. “Many, especially younger consumers, say they think the internet provides money-saving opportunities, so we wanted to dig further and find out what role online shopping is playing in consumers’ CPG spending.” Though consumers are unlikely to do all of their CPG shopping online, IRI found that 76 percent of all shopping trips began online and 50 percent of CPG category growth is predicted to be online in 2018. To cash in on this growth, retailers are trying to provide shoppers with a variety of options to best fit their online shopping needs. Of all the shoppers, 55 percent of millennials, 52 percent of Generation X, 36 percent of baby boomers and 25 percent of seniors said they like click-and-collect options. Just under a quarter of all consumers said they regularly prefer home delivery for their online grocery shopping. Subscription services for grocery pur-
consumers expressed it was easier to find the grocery items on their lists online rather than by walking through store aisles. Price is another contributor for customers to shop online, according to surveyed shoppers. Almost a quarter of all millennials, gen x’ers and baby boomers are shopping for food and beverages online in the hopes of saving cash. Respondents said that shopping online provides them an easier way to access discount code and coupons, as well as a more efficient way to compare prices between retailers. In fact, the report found over half of consumers in 2018 are expected to download coupons from retailer or manufacturer websites, as well as compare prices on retailer websites. “While consumer confidence [in the economy] has improved during the last few years, consumers can still be a bit shaky about their job and financial prospects, so we’re seeing some mixed signals in our survey results,” Susan Viamari, VP of Thought Lead-
chases are less popular however, with only 12 percent of customers expected to regularly do so in the new year. Retailers and brands have already started to adjust their business strategies to accomodate consumers who are buying items with a click of a button on their computers or phones. After After acquiring Whole Foods, Amazon has begun to explore synergies between the businesses, most recently launching free same-day shipping on thousands of products, including many sold in Whole Foods. Wal-Mart also announced last week that it would convert 12 of its Sam’s Club locations to ecommerce fulfillment centers, while Target recently acquired Shipt, Inc., an online same-day delivery platform. “When consumers think about online CPG shopping, they have specific ideas about what is helpful in their lives,” Viamari said. “There really is no one-size-fits-all answer, so it’s critical to understand what it is that makes your key shoppers tick.” 15
BREWSCAPE
For more stories, check out Brewbound.com
THE LATEST CRAFT BEER BRAND NEWS
Brewers, Importers Score Tax Break
After nearly a decade of lobbying for lower federal excise taxes, brewers and importers of all sizes will finally enjoy two years of reduced payments after President Donald Trump officially signed the Tax Cuts and Jobs Act into law last December. Included in the rewrite of the federal tax code was the Craft Beverage Modernization and Tax Reform Act (CBMTRA), which reduces the federal excise tax from $7 to $3.50 per barrel on the first 60,000 barrels for domestic brewers producing fewer than 2 million barrels annually.
At the new rate, a small beer company making 60,000 barrels annually will save $210,000. In a press statement, Brewers Association president and CEO Bob Pease called the passage of the bill “a monumental day for small and independent brewers.” “The BA has played a central role within the beverage alcohol coalition, advocating for this historic change in public policy,” he wrote. “The BA, as an organization advocating on behalf of small brewers, has a commitment to its members to influence change when and
where it can, without taking a position on larger legislation.” Larger companies will also benefit. Under CBMTRA, the federal excise tax was reduced to $16 per barrel on the first 6 million barrels for all other brewers and beer importers. An $18 per barrel excise tax for brewers producing more than 6 million barrels was maintained, however. Beer Institute CEO Jim McGreevy, in a message to the organization’s members, hailed the bill as “the first substantial federal excise tax reduction for the beer industry in decades.”
“I think the passage of this bill shows that in order to do big things in the industry, everybody has to work together,” McGreevy said. According to the BA, the bill represents more than $142 million in annual savings for brewers. The BA added that the legislation could lead to the creation of an additional 9,000 beer industry jobs in the first 12 to 18 months after implementation. The Beer Institute believes the excise tax relief will create an additional $320 million in annual economic growth within the beer industry.
Boston Beer Strikes Deal with Red Sox In December, the Boston Red Sox and Boston Beer Company reached a multi-year agreement to make Samuel Adams “the official beer of the Boston Red Sox.” Financial terms of the eight-year deal, which will last through the 2025 season, were not disclosed, but Boston Beer plans to “shift” advertising dollars away from more traditional channels to foot the bill. As part of the deal, the
Samuel Adams brand will be featured prominently throughout historic Fenway Park, including taking over the right field sponsor sign that had featured AnheuserBusch’s Budweiser brand for nine years. “Visitors to this historic ballpark will enjoy the freshest Sam Adams beer, while watching an incredible team, playing under our sign over in right field,”Boston Beer founder Jim Koch said via a press release. “It’s
16 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
my personal impossible dream come true.” The Red Sox team beer sponsorship was previously held by Rhode Island’s Narragansett from 1944 to 1975 before Budweiser assumed the sponsorship in 1976. Beginning this year, the Samuel Adams brand will be featured with a right field rooftop deck called “Sam Deck” and a “Sammy’s on Third” bar beneath the third-base stands. Fans
will also be able to purchase additional Samuel Adams offerings, including the company’s new Sam ’76 session lager, inside the stadium. In addition to featured opportunities within Fenway Park, the Samuel
Adams brand will be visible during spring training at JetBlue Park in Fort Myers, Florida. The contract gives Boston Beer the ability to use the Red Sox name and logo in its marketing, the Boston Globe reported.
BREWSCAPE Pabst Brewing Slashes 18 Percent of Workforce For the second time in as many years, Pabst Brewing Company has undergone a major round of layoffs. The company announced in January that it would eliminate a total of 70 positions from the company. The cuts – which impacted employees across all areas of the organization, including sales, marketing, operations and administration – were made to help the company reduce its cost basis by 15 percent. In doing so, 50 employees were let go and another 20 open positions were not filled. The company also cut its operating budget, focusing its efforts on fewer internal projects – such as reducing complexity in the supply chain and overhauling its social media strategy – while simultaneously shifting investment toward areas of the company with greater opportunities for growth, including the New Holland Brewing and Tsingtao brands. “After careful review, we believe it is in our best interest to take a series of strategic actions now, in order to reduce complexity, cut costs, simplify priorities, and reallocate resources, so that Pabst is well positioned for success as we go into 2018,” Pabst CEO Simon Thorpe said.
The decision to cut its workforce by 18 percent came less than nine months after Pabst let a number key executives go, among them, chief sales officer Bruce Muenter, and chief growth officer Rich Pascucci. Six other employees were also laid off last April, and former CMO Dan McHugh was replaced last September. Those moves came several months after Pabst terminated dozens of workers who had been hired to help manage the breakout success of Small Town Brewery’s Not Your Father’s Root Beer, which grew to $100 million in offpremise sales just six months after Pabst began nationally distributing the brand. After the initial round of layoffs in 2016, Pabst hoped that it could retain approximately 70 employees as it worked to return the Small Town business to growth, Thorpe said. But sales continued to lag – off-premise dollar sales of the flagship root beer offering declined 60 percent in 2017, to $33 million, according to retail data provider IRI Worldwide – forcing Pabst to once again downsize the organization. At its peak in mid-2016, Pabst employed 440 people. As of press time, the company employs 310.
Smuttynose Heads to Auction New Hampshire’s Smuttynose Brewing, citing overleveraging of investments and missed growth projections amidst increased competition from fellow craft brewers, is scheduled to be sold at a bank auction on March 9. Overcome by the brewing boom it helped to foster, sales had dropped for the past two years at the well-established, 24-year-old regional brewery. “The company’s financial models were based on 20 years of consistent growth but the explosion of microbreweries has led to changing dynamics in the marketplace,” Smuttynose owner Peter Egelston said via a press release. “This dramatic shift occurred just as Smuttynose committed to a major infrastructure investment with the construction of the 18 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
new production facility. As the turmoil in the marketplace stabilizes, Smuttynose, a trusted brand with strong consumer loyalty, can regain its footing with a major infusion of capital.” Mortgage owner Provident Bank picked the James R. St. Jean Auctioneers to run the auction. It will include the Smuttynose brand, Hampton-based production facility on Towle Farm and nearby Hayseed Restaurant, according to the auctioneer’s website. “With the arrival of a new owner, we anticipate a smooth transition as we are committed to continuity,” Egelston said in the release. Egelston didn’t return a message from Brewbound, and he declined to comment through a spokesperson. Smuttynose, which employs 68 workers
and generates more than $10 million in annual revenue, will continue to operate in the days leading up to the auction. Jay St. Jean, operations manager of James R. St. Jean Auctioneers, told Brewbound that potential bidders must be ready to pay “$10 million or north.”
Green Flash Retrenches, Downsizes Facing increased competition from more than 6,000 U.S. craft breweries, Green Flash Brewing announced in January that it would pull distribution from 32 states in a move that also included a 15 percent reduction of its workforce. Green Flash co-founder Mike Hinkley said the 15-year-old San Diego-headquartered craft brewery had initially built a 50-state footprint with aspirations of being a “heritage” brand, but as thousands of startup breweries opened their doors, and chipped into Green Flash sales, the company was forced to alter its strategy. “We were doing pretty well close to the breweries, and in some strategic markets we had some strongholds, but we had a lot of territory that was in pretty steady decline,” he said. “Rather than to continue to fight that battle, we took the resources from out there and brought ’em all into a smaller territory – as much as we could, anyway.” As it retrenches, Green Flash, which also owns Alpine Beer Company, will cede about 18 percent of its wholesale business, Hinkley said. To supply the remaining 18 states, Green Flash will source production from its two breweries – located in San Diego and Virginia Beach – and distribute to nearby markets. The San Diego facility will ship beer to Arizona, California, Colorado, Hawaii, Nebraska, Nevada, Texas, and Utah, while the Virginia Beach brewery will ship products to Connecticut, Delaware,
Maryland, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee and Virginia. However, rationalizing 18 percent of the company’s distribution also required the company to cut its operating expenses, Hinkley said. Those cuts amounted to 33 workers across production, operations, sales, marketing and administration. However, the cuts won’t impact Green Flash’s retail business or Alpine Beer Company, he added.
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NEW PRODUCTS
THE NEWEST BEVERAGE OPTIONS
COFFEE La Colombe released a seasonal-batch of Peppermint Mocha Draft Latte, made with cold-pressed Nizza espresso and fresh milk, combined with real, dark chocolate and peppermint extract. The limited edition product was released at retailers nationwide, online, and in La Colombe cafes on November 6. The product retails for $2.99 per 9 oz. can. For more information, please call La Colombe at 1-800-563-0860. NuZee, Inc. has launched a ready-to-drink, gourmet, functional, cold brew coffee line, Coffee Blenders. The product will initially be available at independent retailers and convenience stores throughout southern California, with a national roll-out contemplated to commence over the next 12 months. Available in 10 oz. glass bottles, Coffee Blenders’ cold brew blends are 100 percent Arabica dark roast Honduran coffee with clinically supported nutraceuticals designed to provide health benefits. The line includes Active Cup, Lean Cup, Nude Cup, Relax Cup, and Think Cup varieties. For more information please call Coffee Blenders at 1-844-696-8933.
CSD BCGA Concept Corp., manufacturer of Bruce Cost Ginger Ale and Brooklyn Crafted, has launched Brooklyn Crafted Mini Bottles, a line of craft ginger beers. The line includes Traditional, Earl Grey, Lemon & Lime and Mango flavors. With all four SKUs offering trending flavor profiles combined with unfiltered ginger beer, the new line is an on-the-go refreshment or addition to one’s cocktail bar. Brooklyn Crafted Mini Bottles are available at New York City restaurants and retailers, including Sahadis, Malt & Mold, Tribeca Grill, Bunker and some Key Foods locations, with additional national and online distribution. The products retail for $1.49 per 7 oz. bottle. For more information please call BCGA Concept Corp. at (212) 488-0661. Mountain Dew is introducing MTN DEW ICE, a caffeinated carbonated soft drink made with a splash of real juice. MTN DEW ICE is a marquee addition to the PepsiCo portfolio and the 20 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
answer for those looking for a thirst-quenching lemon-lime flavored beverage to keep them invigorated throughout the day. MTN DEW ICE launched in retail stores nationwide on January 15 in 20 oz. bottles, 2 liter bottles, 12-packs of 12 oz. cans and a variety of other single and multipack sizes, with 100 calories per 12 ounces. For more information please call PepsiCo at 1-800-433-2652.
DAIRY Darigold has released a Salted Caramel Milk as permanent part of its Old Fashioned Milk product line. This rich, decadent beverage is made with farm fresh whole milk, utilizing the highest-quality ingredients. The new product is an indulgent treat available that can be enjoyed on its own or used as part of a recipe for milkshakes, ice cream or to spice up a bowl of cereal. The product retails for $1.79 per 16 oz bottle. For more information please call Darigold at (206) 282-4923.
DRINKING VINEGAR Vermont Village, a small-batch producer of premium apple products, has launched a new line of organic Raw Apple Cider Drinking Vinegars. The products were developed to bring healthylifestyle connoisseurs a highly-portable, easyto-drink, and palatable way to enjoy the health benefits of raw apple cider vinegar. Available in two flavors, Lemon Mint and Lime Ginger, Vermont Village’s Raw Apple Drinking Vinegars are crafted in small batches as a way of enhancing the naturally occurring flavors present in the ingredients, a combination of flavorful purees and all-natural extracts, which are blended with crisp spring water, raw apple cider vinegar and organic unsweetened apple juice. The products retail for $2.49 per 14 oz. bottle or $14.50 for a pack of six. For more information please call Vermont Village at (802) 479-2558.
ENHANCED WATER Hydrive Energy Water, a zero-calorie energy water, announced the launch of two new flavors. Kiwi Melon and Grape Fusion join Hydrive’s line up to provide consumers with
The freshest tasting
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NEW PRODUCTS the hydration benefits of water and the added function of energy from B vitamins and caffeine. Kiwi Melon brings a new fruit-inspired flavor to the product line and Grape Fusion was a fan favorite of Hydrive Energy Water’s prior full-calorie line. After much consumer demand, Hydrive has reformulated Grape Fusion to bring the taste of the cool, sweet burst of grapes while maintaining the zero-calorie, refreshing formula that consumers love. Hydrive Energy Water can be purchased nationally at major retailers such as Walmart, Kroger, HyVee, Casey’s General Store, QuikTrip, Kum & Go, among many others. The products contain 160 mg of caffeine and 35% DV of vitamins. The products retail for $1.89 to $2.29 per 16 oz bottle. For more information please call Big Red, Inc. at (512) 501-3890.
PROTEIN DRINKS Après has launched a plant-based protein beverage developed specifically for premium wholebody replenishment. Après is made with organic plant protein (13g per bottle) from pea, chia, cacao, and hemp, delivering all essential amino acids to promote satiation and a healthy, lean physique. It’s also formulated with organic virgin coconut oil that supplies sustainable energy through metabolic fats (MCTs), and organic coconut water that provides electrolyte hydration and a silky smooth texture. The low sugar (6g per bottle), snack-sized beverage (180-190 calories per bottle) is made with all vegan, kosher, non-GMO, dairy-free, gluten-free and soy-free ingredients. Après is available in three flavors: Mint Cacao, Sea Salt Chocolate, and Chai Spiced Vanilla. The product retails for $5.95 per 11 oz Tetra Pak bottle. ICONIC Protein has launched new Golden Milk and Coconut Matcha flavors. The flavors join the brand’s signature line of premium high protein drinks that feature a clean ingredient profile and unique, New Zealand-sourced grassfed milk protein source. Coconut Matcha and Golden Milk are available online at drinkiconic. com and Amazon.com, and will be rolling out in select grocery retailers such as H-E-B, Sprouts, Wegmans and Fresh Market throughout January. ICONIC Protein Golden Milk features turmeric, ginger, black pepper and cinnamon to create a wellness elixir boasting warm, exotic flavors and functional ingredients.
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The Coconut Matcha flavor blends offers 80mg of caffeine per bottle—equivalent to a small cup of coffee—along with organic matcha and coconut cream. For more information, please call ICONIC Protein at (504) 323-5659.
TEA DrinkBiome has released its first oral health drink q (pronounced ‘chee’). The product is a dietary supplement that comes in Lemongrass Ginger Green Tea and Classic Oolong Tea flavors. The drink maintains a neutral pH level of 7 and is formulated with XyVita, a xylitolcontaining formulation that works by reducing the mouth’s acidity and decreases risk of tooth decay while freshening breath. The product retails for $2.49 per 8 oz. can. For more information, please call Krupa Consulting at (213) 626-0465. ITO EN has debuted two new ice-steeped cold brew unsweeteend ready-to-drink teas across two beverage brands, matcha LOVE and TEAS’ TEA Organic. The new flavors, Matcha LOVE Cucumber+Mint and TEAS’ TEA Organic Mandarin Orange leverages the authentic Japanese cold brew processes, ice-steeping the tea to bring out the smooth, clean flavor, and naturally mellow sweetness of the tea leaf. Both flavors are unsweetened and are available at natural food stores and specialty supermarkets nationwide. For more information please call ITO EN North America at (707) 327-6413.
WATER HTWO Hydrogen Water is a new elemental formula of molecular hydrogen gas infused into purified water. The product promotes energy and endurance without the addition of counterproductive sugars, caffeine, and additives. Positioned as a metabolic beverage, the drink boosts endurance, reduces lactic acid, reduces fatigues, and contains antioxidants. The product retails for $2.99 per 500 mL pouch or $28.00 per 7-pouch FridgePack. For more information please call HTWO Hydrogen Water at 1-800-438-4896. JUST Water has released JUST Infused, a line of certified organic, unsweetened flavored waters packaged in an 82 percent renewable bottle.
The line includes Organic Apple Cinnamon, Organic Tangerine, and Organic Lemon flavors. The products use the Adirondack mountain spring water of its core water line as a base. The line is zero calorie and contains no artificial ingredients. The products retail between $1.69 to $1.99 per 16.9 oz. bottle. For more information please call JUST Water at (844) 838-5898.
GIN Empress 1908 Gin is an all-natural, colorchanging Gin produced in Victoria, British Columbia. It’s indigo blue color comes from the infusion of the vibrantly tinted butterfly pea blossom. Once paired with mixers, the Gin transforms from its indigo to pink hues as well as changing colors to light purple, blue, ruby red and green. This standout product is crafted with eight organic botanicals, which is part of the Gin’s composition, giving it a floral flavor for the perfect refreshing drink. Each 750 mL bottle has a suggested retail price of $39.99. For more information please call Victoria Distillers at (250) 544-8218.
RUM Colombia-based Parce Rum is now available in the U.S. via distributor Turquoise Life, which is importing the full Parce portfolio. The products includes three handcrafted expressions of blended rum: Parce 3-Year Rum, Parce 8-Year Rum and Parce 12-Year Rum. Each expression is blended by Arthur and Brojen Fernandes Domecq, a father-and-son duo of master blenders from Bogotá, who have more than 50 years combined experience working with premium rum. For more information please call Turquoise Life at (212) 320-8189.
SCOTCH Glen Moray has added the Glen Moray Classic Sherry Cask Finish to its Classic Range of products. First aged in North American ex-bourbon barrels for 6-7 years and then finished in the finest Oloroso sherry casks for 9-12 months, the product is burnished gold in color with aromas of dried fruit, cinnamon, and toffee, and rich flavors of sweet vanilla, dark chocolate and oriental spice. Approachable in both style and
price point, the Classic Sherry Cask Finish is ideal for sipping on its own or creating endless iterations of craft cocktails. The product retails for $29.99 per 750 mL bottle. For more information please call Prestige Beverage Group at (651) 649-5823. Whyte & Mackay has launched Shackleton Blend Malt Scotch Whisky in the U.S. market. The blend’s malts are uniquely married for an extended period of time in a combination of ex-bourbon American white oak barrels and Spanish Sherry butts to harmonize flavors. The result is a rich and robust whiskey, which offers notes of vanilla, honey, ginger and liquorice, with a whisper of bonfire smoke. Shackleton is the first blended malt brand to join Whyte & Mackay’s portfolio as a permanent offering. The product retails for $35 per 750 ml bottle. For more information please call Whyte & Mackay at +44 (0) 141 248 5771.
WINE Drops of Jupiter is a new portfolio of wines sourced from celebrated wine regions around the world. The inaugural Drops of Jupiter collection includes a Cabernet Sauvignon from the heart of Southeastern Australia’s most prized growing regions, a Pinot Noir from California’s up and coming San Benito AVA on the Central Coast, and a Sauvignon Blanc from the famed Marlborough region of New Zealand. Drops of Jupiter wines are now available in select markets, as well as nationally online through Amazon. The products retail for $20 per bottle. For more information please call Raising the Bar Communications at (707) 815-7216. St. Mayhem has collaborated with winemaker Andy Erickson to create St. Mayhem Hückfest, a wine cooler which combines red wine with bold winter spices for a winter-in-a-can craft cooler. The limited release product is available in 250 mL two-pack cans retailing for $12 in markets nationwide beginning December 1. St. Mayhem Hückfest (13.1% abv) is a blend of 49% Syrah, 35% Mourvedre, and 16% Grenache from Amador County. The wine was spiced with cloves, cinnamon, orange peel, almond extract, ginger, nutmeg, and blueberries. For more information please call Art+Farm Wine at (707) 927-4343.
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NEW PRODUCTS Sterling Vineyards has introduced its first-ever sparkling wines. The Sterling Vineyards Blanc de Blancs 2016, made from 100 percent Napa Valley Chardonnay, features aromas of green apple, lemon citrus, pear and lemon cream and fruit-forward flavors, floral notes and a soft, creamy texture on the palate. The Sterling Vineyards Sparkling Rosé 2016 is a blend of 70 percent Chardonnay and 30 percent Pinot Noir, fermented in stainless steel to maintain freshness, with limited skin contact to give it body and depth. The wine offers fresh aromas of strawberry, cherry blossom, rose petal and crisp apple, leading to a palate of upfront fruit flavors, balanced by creamy texture and bright acidity. Both wines are available nationally for a suggested retail price of $28 per 750 mL bottle. For more information, please call Treasury Wine Estates at (707) 259-4500.
WHISKEY A. Smith Bowman Distillery has released Isaac Bowman Straight Bourbon Whiskey Finished in Port Barrels, as part of the Distillery’s core line of spirits. A. Smith Bowman Distillery finished its bourbon in a variety of American and French Limousin Oak port barrels from across Virginia and from Portugal for between three to six months, depending on flavor, before marrying them together to create Isaac Bowman Port Barrel Finished Bourbon. Isaac Bowman will be offered as an everyday item as part of the Distillery’s standard line of spirits. The product retails for $39.99 per bottle. For more information please call A. Smith Bowman Distillery at 540-373-4555. Highland Park has released FULL VOLUME! A single malt for whiskey and music lovers. The line was distilled in 1999 and bottled in 2017, created using 100% ex-Bourbon casks. The inspiration for the packaging comes from old fashioned guitar amps, featuring dials on the side to indicate the different measure of Bourbon, peat, vanilla and fruit flavors. The product retails for $100 per 750 mL bottle. For more information please call Highland Park at +44 1856 874619. Jim Beam has released Jim Beam Distiller’s Cut, a premium, unfiltered, 100-proof Kentucky Straight Bourbon Whiskey. The premium expression offers a smooth and complex mouthfeel
24 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
with a warm, lightly charred oak finish. It has a dark amber color with aromas of soft charred oak, sweet caramel, vanilla and hints of dried fruit. This limited time offering was personally selected by Fred Noe, Jim Beam’s seventh generation Master Distiller, and is available nationwide. The product has a suggested retail price of $22.99 per 750 mL bottle. For more information please call Beam Suntory at (847) 948-8888. Southern Grace Distilleries, the first distillery in the United States to be located in a former prison, has released their first bourbon after opening their doors three and a half years ago: Conviction Small Batch Bourbon. Southern Grace Distilleries makes a charitable contribution for every bottle they sell, and the charitable partner for Conviction is the Carolina Farm Stewardship Association, the oldest and largest sustainable agriculture organization in the Southeast. The product retails for $43.45 per 750 mL bottle. For more information, please call Leanne Powell at 704-622-6413. TINCUP American Whiskey has released TINCUP 10, a rugged mountain whiskey cut to proof with Rocky Mountain water. TINCUP 10 is a blend of rye, corn, and malted barley. Distilled in TINCUP’s classic style and aged for 10 years in American oak barrels with a #3 char, it is then cut with Rocky Mountain water for a smooth flavor profile. The TINCUP 10 bottle design mirrors its predecessor and features a rugged hexagonal bottle embossed with mountain references and a new black and red label. The product retails for $54.99 per 750 mL bottle. For more information please call Exposure America at (646) 895-7015. Uncle Nearest 1856 Premium Whiskey, a new national whiskey brand has officially launched in Portland, Oregon. The aged whiskey debut in Portland will be followed by Nashville, Tennessee. The Uncle Nearest Premium Aged whiskey presents a caramel color with a deep golden hue. On the nose, baled hay, pumpkin seeds, stone fruit, caramel corn and sweet maple are present. On the palate, the whiskey shows spicy caramel notes up front, and then hints of maple as it mellows with dried fruit and floral notes. Sweetness and spice reminiscent of freshly baked oatmeal cookies remain through a long and rich finish. The product retails for $59.95 per 750 mL bottle. For more information please call Uncle Nearest, Inc. at (615) 928-1917.
OTHER SPIRITS Baileys has released Baileys Strawberries & Cream, a new limited edition flavor that combines the flavor of ripe strawberries with the creamy delicious taste of Baileys. The fruitforward flavor is an indulgent alternative to the brand’s typical chocolate and wine combination. The product can be served over ice cream, in a milkshake, or added to dessert recipes such as strawberry shortcake. Baileys Strawberries & Cream is a seasonal limited time offering, only available February through April or while supplies last. The product retails for $24.99 per 750 mL bottle. For more information please call Hunter Public Relations at (212) 679-6600. Chopin Vodka has expanded its Dorda Liqueur line to include a new Sea Salt Caramel flavor. Made from a blend of caramel, premium sea salt and Chopin Rye Vodka, the liqueur is crafted at Chopin Vodka’s family-owned distillery in the village of Krzesk, Poland. It is available in select geographic regions in major retailers,
including BevMo, for a suggested retail price of $24 per 750 mL bottle. For more information, please call Chopin Imports Ltd. at (203) 807-0729. Renowned fifth-generation-run sake producer Umenoyado has launched Haikara Sake. Building upon a traditional foundation, the new fruit-infused sake was created in celebration of the popularity of Japanese culture throughout the United States serving to meld the cultures of East and West, according to the producer. Haikara is currently available in two varieties: Yuzu, which is made with a Japanese citrus fruit that looks like a small grapefruit and tastes similar to mandarin orange with overtones of lemon, and Momo, which is derived from a type of Japanese peach that is larger and softer than Western peaches, delivering a taste that is described as delicate and elegantly sweet. The 25 proof sake is packaged in a textured 720 mL bottle with details reminiscent of a crystal cut decanter. The products have a suggested retail price of $34.99 per bottle and are available at select retailers across the U.S. For more information, please call Park Street Imports at (305) 967-7440.
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25
CHANNEL CHECK WHAT’S HOT AND WHAT’S NOT
SPOTLIGHT CATEGORY
Cappuccino & Refrigerated Coffee Starbucks is dominating, but the next wave is on the move. We see the power of distribution networks in the launch of the Coke/Dunkin Donuts tie-up, which is already almost 7 percent of the category and is making everybody forget about the ill-fated Illycaffe partner brand. Meanwhile, High Brew and La Colombe are gaining share fast in the ambient space. In refrigerated RTD, it’s all about the cold brew, where Starbuck’s, Peets, Califia, STOK, and Stumptown are making big gains, with Chameleon hot on their heels.
REFRIGERATED COFFEE BRAND
DOLLAR SALES
CHANGE vs. YEAR EARLIER
$61,148,576
-4.17% 32.55%
International Delight Starbucks
$53,192,304
Starbucks Iced Espresso Classics
$49,349,312
0.21%
Stok
$35,769,940
199.10%
Califia Farms
$29,410,334
22.97%
Bolthouse Farms Perfectly Protein
$18,114,794
-4.06
Caribou Coffee
$14,536,810
44.01%
Private Label
$5,598,096
27.66%
Stumptown Coffee Roasters
$5,540,028
24.07%
Chameleon Cold Brew
$3,904,865
140.77%
CAPPUCINO BRAND
DOLLAR SALES
CHANGE vs. YEAR EARLIER
Starbucks Frappuccino
$1,098,128,768
-0.72%
Starbucks Doubleshot
$659,341,952
5.58%
Coca-Cola Dunkin Donuts
$141,074,448
N/A
Starbucks
$60,151,684
0.71%
Private Label
$44,876,536
406.90%
Starbucks Doubleshot Light
$29,805,560
15.89%
Starbucks Cold Brew
$23,564,510
N/A
High Brew
$19,548,348
100.42%
La Colombe
$7,036,300
N/A
Starbucks Frappuccino Light
$5,234,090
-23.04%
TOPLINE CATEGORY VOLUME Beer
Energy Drinks
$12,285,705,216
2.08%
-1.00%
Tea/Coffee
$1,628,916,480
10.56%
5.27%
Drink Mixes
$840,826,240
-2.41%
$34,386,987,490
0.9%
Bottled Juices
$7,141,959,168
Bottled Water
$15,656,981,504
SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 12/3/17
26 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
CHANNEL CHECK TEA BRAND
DOLLAR SALES
CHANGE vs. YEAR EARLIER
Lipton Pure Leaf
$636,438,400
5.65%
AriZona
$598,480,128
-8.49% 14.28%
Gold Peak
$384,907,616
Lipton Brisk
$364,028,480
8.79%
Lipton
$294,309,216
-7.24%
Snapple
$227,152,992
1.56%
Lipton Diet
$183,014,816
-6.47%
Diet Snapple
$157,405,088
-9.21%
AriZona Arnold Palmer
$127,299,184
-8.19%
Peace Tea
$76,581,584
44.00%
BOTTLED FRUIT DRINKS
Non-GM now available!
BRAND
DOLLAR SALES
Snapple
$215,383,488
CHANGE vs. YEAR EARLIER 4.58%
Hawaiian Punch
$213,825,936
-7.45%
V8 Splash
$180,688,912
-6.87%
Bai5
$153,992,784
20.74%
Bai
$132,856,640
78.61%
$111,134,512
-6.06%
Private Label
$103,961,552
49.13%
Minute Maid
$87,075,648
19.02%
Welch’s
$85,382,160
-0.31%
Tum-E Yummies
$70,340,672
-3.18%
Tampico
ENERGY DRINKS
You’ve come to the right place. Since 1943 Grain Processing Corporation has supplied the beverage industry consistent, high-purity grain neutral spirits. And of course we offer a full complement of sensory, analytical and customer service to back up every order. You can rely on GPC for quality and value with delivery that’s on time and hassle-free.
BRAND
DOLLAR SALES
CHANGE vs. YEAR EARLIER
Red Bull
$2,899,727,872
-1.29%
Monster Energy
$1,604,597,760
6.13%
Red Bull Sugar Free
$725,579,712
-0.41%
Monster Energy Zero Ultra
$603,089,408
15.71%
NOS
$435,372,288
4.21%
Java Monster
$362,054,080
-13.20%
Monster Rehab
$307,796,896
-1.85%
Monster Energy Lo-Carb
$299,241,536
-3.36%
Red Bull The Summer Edition
$247,907,600
-15.61%
Monster Mega Energy
$243,637,104
-1.57%
SPORTS DRINKS BRAND
DOLLAR SALES
CHANGE vs. YEAR EARLIER
Gatorade Perform
$2,922,655,232
-10.77%
Powerade ION4
$763,131,200
-2.92%
Gatorade Frost
$751,636,672
-0.51%
Gatorade
$424,496,736
28.16%
U.S. Produced | Gluten Free
Gatorade G2 Perform
$272,116,832
-9.59%
Gatorade Fierce
$269,927,712
-14.85%
Powerade Zero ION4
$216,416,496
2.00%
For more information, call 563.264.4265 or visit us at grainprocessing.com/alcohol
Powerade
$175,414,448
-26.41%
Gatorade Flow
$149,655,856
N/A
BODYARMOR SUPERDRINK
$98,374,608
179.35%
© 2018 Grain Processing Corporation
SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 12/3/17
28 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
BOTTLED WATER BRAND
DOLLAR SALES
Private Label
$2,601,707,776
CHANGE vs. YEAR EARLIER 6.63%
Dasani
$1,086,277,888
-2.37%
Aquafina
$1,080,198,528
-0.26%
Nestle Pure Life
$891,569,728
-2.21%
Glaceau Smart Water
$821,107,904
-5.72%
Poland Spring
$694,412,288
0.37%
Glaceau Vitamin Water
$492,688,960
-2.33%
Fiji
$448,734,048
17.86%
Deer Park
$410,929,632
-5.72%
Ozarka
$374,939,008
10.79%
SPARKLING WATER BRAND
DOLLAR SALES
CHANGE vs. YEAR EARLIER
Private Label
$496,562,944
9.90%
Sparkling ICE
$386,648,800
4.83%
La Croix
$358,051,552
51.76%
Perrier
$265,815,552
17.15%
Polar
$144,721,344
26.32%
San Pellegrino
$132,130,432
3.71%
Topo Chico
$79,479,128
26.38%
Schweppes
$64,665,552
0.67%
Sparkling ICE Lemonade
$55,052,044
-11.06%
La Croix Curate
$54,763,824
32.47%
DOMESTIC BEER BRAND
DOLLAR SALES
CHANGE vs. YEAR EARLIER
Bud
$7,748,317,230
-4.8%
Coors
$2,627,498,853
-1.1%
Miller Lite
$2,034,270,432
-1.0%
Michelob
$1,762,991,991
22.0%
Busch
$1,524,538,737
-0.8%
Natural
$1,325,099,906
-3.1%
Bud Specialty
$690,186,940
-7.3%
Miller High Life
$470,372,413
0.9%
Keystone
$467,064,823
3.8%
Yuengling
$383,395,803
3.2%
CRAFT BEER BRAND
DOLLAR SALES
CHANGE vs. YEAR EARLIER
Blue Moon
$341,341,446
1.4%
Samuel Adams
$278,243,583
-16.5%
Sierra Nevada
$243,888,867
-5.3%
New Belgium
$206,697,660
5.2%
Leinenkugel Specialty
$180,627,058
6.7%
Lagunitas
$179,658,757
10.3%
Shiner
$136,631,172
0.3%
Goose Island
$76,936,520
7.9%
Founders
$76,818,408
42.5%
Deschutes
$75,091,827
-5.1%
SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 12/3/17
29
GERRY’S INSIGHTS BY GERRY KHERMOUCH
Confusing Combination As I was writing this column, the beverage industry was still just days away from being roiled by the news that Keurig Green Mountain has agreed to acquire Dr Pepper Snapple Group, in a deal that will create an $11 billion (sales) beverage giant. Of course, any exit for one of the Big Three soft drink giants would be big news, even the runt of the group – which has punched far above its weight, managing to grow its CSDs and marshalling an allied-brand strategy that’s proved highly effective at getting the company efficiently into non-CSD growth sectors. No, the shockwave goes considerably beyond that. It’s not the multiple either: by contemporary standards, the premium seems modest enough that already the class-action mills are beating the bushes for irate shareholders to sue. Really, what seems to have caused the ruckus is that, even after an elaborate conference call and slide presentation by the two companies, nobody quite gets what this deal does for either party. Outside of the more whimsically operating small-cap realm (think Long Island Iced Tea Corp. pivoting to blockchain), I can’t think of a beverage deal that’s caused more outright befuddlement than this one. By now, you probably know more about it than I do, so there’s no need to reprise the details at great length. KGM, which picked up the struggling countertop platform after its much-touted Keurig Kold cold-bev system fizzled and partner CocaCola washed its hands of the effort, is a privately held company controlled by the Luxembourg-based coffee and restaurant giant JAB Holdings, whose other properties range from Panera Bread and Krispy Kreme to Peet’s and Stumptown, brands which freely appeared in the slide show as available for such opportunities as offering RTD options for DPS to distribute. By the logic of the two parties to the merger, the deal will create the largest marketer of both hot and cold beverages – compared to Coke and Pepsi, which hardly play in hot beverages at all, and Starbucks, whose cold-beverage business, though substantial, is still a tiny part of the company’s overall mix. Sounds superficially 30 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
impressive, but – as pretty much every Wall Streeter who follows DPS quickly pointed out – how does that yield any synergy that will help the top line? Representative comments: “Out of left field,” and “unanswered questions about the prospects for Keurig Dr Pepper as a combined entity,” with “unclear” revenue synergies. But as I digested the news, it occurred to me that this one is just the latest in a series of curious deals in recent months. After all, Nestle left a lot of observers scratching their heads with the outsize purchase price it paid for Blue Bottle, an iconic but fairly modest-size coffee retailer with not much of an RTD presence yet. (Don’t get me wrong: Having just heard Blue Bottle will be opening in my Manhattan neighborhood, I’m not complaining about the expansion the acquisition will fund!) And though it seemed to draw less comment, I found Campbell Soup’s big-ticket acquisition of Snyder’s-Lance just as puzzling: after all, the soup maker’s stated strategy had been to find avenues to growth in the refrigerated perimeter aisles of groceries, building on its Bolthouse Farms and Garden Fresh Gourmet purchases under the Campbell Fresh banner. So where does an old-line maker of shelf-stable snacks fit in, unless Campbell was just punting after encountering some challenges on the C-Fresh side. So much confusion! But maybe we shouldn’t be so confused. Or should accept a greater degree of confusion. After all, we keep hearing that we’re living in an age of great business disruption, and consumers’ migration away from CSDs to bottled water and once-obscure categories like kombucha and cold-brewed coffee certainly attests to a degree of disruption occurring in beverages. Now, though I’ve read my share of Clayton Christensen, I’m no expert on disruption theory, but it seems that part of the strategy is simply
to get in the game so that you’re an active player as things shake out. With the right degree of openness and agility, you should be able to find your way – in contrast, say, to a Xerox, whose sale to Fujifilm in the same week provides a sobering contrast to a company that never could overcome the weight of its legacy businesses. That seems to be the game AnheuserBusch InBev is playing, dabbling in small and seemingly arcane brands like Owl’s Brew mixers, GoLive Probiotics, Kombrewcha kombucha and Up Mountain Switchel and just seeing where that takes them. Even its outright acquisition of energy drink and flavored water player Hiball amounted to just pin money for a giant that’s still digesting its SABMiller acquisition and is often rumored to have PepsiCo or Coca-Cola in its sights. For Keurig Green Mountain – and for JAB Holdings – the deal may simply be a way of obtaining some liquidity and further acquisition currency in the form of public shares as it scopes out the way forward in these disruptive times. As Wells Fargo’s Bonnie Herzog theorized, “the transaction is less a strategic business combination, and either (1) a vehicle to eventually exit its Keurig investment, or more likely (2) a platform company for additional M&A down the road (i.e. being publicly traded gives them optionality to issue equity in future acquisitions).” Indeed, noting the several ties between JAB/KGM and ABI (for example, JAB ceo Olivier Goudet sits on ABI’s board), some even were speculating that at some point the beer giant would enter the picture, perhaps viewing DPS as a decisive way to get back into NAs. Longtime beverage-watcher Gerry Khermouch is executive editor of Beverage Business Insights, a twice-weekly e-newsletter covering the nonalcoholic beverage sector.
SUSTAINABILITY MATTERS.
Boxed Water is available in 250ml, 500ml and 1L sizes
• 49% of consumers try to avoid plastic (at least occasionally)* • 89% look for companies that support social issues* • Top 3 beverage features are: recyclability, taste and price* • 92% feel passionate about beaches and forests* We at Boxed Water believe small changes can make a big impact in the world and your water category. Visit us at Expo West: booth #5697.
*2018 Boxed Water Survey of 5000 Consumers.
SHOW PREVIEW BY BEVNET STAFF
WHAT
WHERE
WHEN
WHO
Natural Products
Anaheim, Calif.
Education and Events:
More than 330 different
Expo West 2018
Anaheim Convention Center
March 7 – 11, 2018
beverage brands
Anaheim Hilton and
Trade Show:
and approximately
Anaheim Marriott
March 8 – 11, 2018
80,000 attendees
KEYNOTE SPEAKERS Friday, March 9: 11:30 a.m. – 12:30 p.m. Jennifer Garner and
Saturday, March 10: 2 – 2:30 p.m. Rose Marcario – CEO,
John Foraker – Co-Founders, Once Upon a Farm
Patagonia Works and Patagonia Inc. ALPHABETICAL EXHIBITOR LIST
Exhibitor
Booth
Exhibitor
Booth
Exhibitor
10th Avenue Tea
N636
1907 Water NZ Ltd
N106
3 Water
Bolthouse Farms
676
Chobani
549
BOS Brands Inc.
N1111
CideRoad Organic Switchel
7905
N1241
BottleGreen
9400
Clear Alaskan Glacial Water
N1832
4Pure, Inc.
7402
Bowery Coffee
N728
Clearly Kombucha
5095
51FIFTY Enterprises
9601
Boxed Water Is Better LLC
5697
Cocktail Crate
9308
Acai Roots
1876
BrainGear
5783
Coco5
N808
461
ALO Drinks by SPI West Port, Inc.
Booth
BrainJuice
N811
Cocoa Metro
N1929
Alpina Foods, Inc
N204
Brands Within Reach LLC
5313
Coconut Beach
N1641
Amy & Brian Naturals
N1010
Brew Dr. Kombucha
N1322
Coffee Blenders
7203
Aqua Carpatica
5224
BriteBevCo, Inc.
8122
CORE
5786
Argo Tea
5329
BRUCE TEA
N927
Dahlicious, LLC
5169
Asarasi Sparkling Tree Water
N1108
Buddha Brands Co.
5463
Daily Greens
5533
Avitae Caffeine + Water
5385
Buddha Teas
N1928
Dark Dog Organic Energy Drink
N2110
ax water
9108
Bulletproof
N2046
DaVinci Gourmet
Busy Bee Yerba Mate
N2342
Deep Valley Biodynamic Coffee
N2006 N2116
B-Tea Beverage, LLC Bai Brands, LLC
N1347
1234
5431
C2O Pure Coconut Water, LLC
4968
Detox Water
Balance Water
N701
Cacique Inc.
N1049
Dream Water
5034
Barsotti Family Juice Company, Inc.
N1617
Califia Farms
4978
Dreaming Cow
4903
494
CALIWATER
226
DRINKmaple
8204
BCGA Concept Corp Berri Pro
N1302
Cansi US Inc.
8917
DRY Soda Co.
N1716
Better Booch
8123
Cave Shake
N1640
EJZ Foods, Inc/Evolve Kefir/ZenSoy
5147
Bhakti
5607
Caveman Coffee Co
N1441
Elite Naturel USA LLC
1815
BlackMP Living Water
N1249
Cawston Press
N505
Elmhurst Milked
5550
BLK Beverages
5012
Celsius, Inc.
N831
Epicurean Food & Beverages
N146
Blue Bottle Coffee
N818
5562
Ceres Fruit Juices
982
Essentia Water, Inc.
Blue Monkey
901
Cham Cold Brew, LLC
8203
Eternal Water
N527
Blume Honey Water LLC
8616
Chameleon Cold Brew
5661
Ethan's
N723
Bolero & Co.
4293
Cheribundi
5144
Evamor Natural Artesian Water
N211
BevNET, Project NOSH and Taste Radio will be interviewing, broadcasting and filming throughout the event. If you’re attending or exhibiting, let’s connect! Reach out at news@bevnet.com, news@projectnosh.com, or ask@tasteradio.com 32 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
SHOW PREVIEW Exhibitor
Booth
Exhibitor
EVIVA
N1013
Booth
Exhibitor
Booth
Honest Tea
1637
Me and the Bees Lemonade
N2331
Evolution Fresh
370
Honeydrop Beverages
5366
Milkadamia
N1229
Evolve
5054
Humm Kombucha
N1331
MISFIT Juicery
8615
EvyTea
N537
Icelandic Glacial
5067
Mooala
8415
Farmhouse Culture
5062
ICONIC
N748
Moonshine Sweet Tea
Fawen Read-To-Drink Soup
N236
IGZU LLC
N803
Mr. Mak's
N1008
Ficks & Co
N1131
IMMORDL
8617
MUNKIJO
5657
Fire Cider
1894
Improper Goods, LLC
N1430
NATURAL NECTAR
5415
FitPro USA
4593
In Zone Brands, Inc.
N508
Nestle Waters North America
971
Flow Water
N841
Inko's Tea
239
New Age Beverages
5324
Forager Project
5070
iQ Juice
594
New Barn
8206
Formula Four Beverages (USA) Inc.
N1413
ITO EN (North America), Inc.
650
Nimble Nectar
9604
5178
IZZE Beverage Company
505
Nix & Kix
1683
FORTO Coffee / Stur Drinks
7918
Genuine Coconut
N1505
Jackson Springs Water Corporation
N248
Numi Organic Tea
Get Plenish
4787
Java House Authentic Cold Brew Coffee
N1147
nutpods
N1940
Ginger People, The
342
Just Water
N231
NutriBlade
N1821
Ginger Shots, LLC
8800
Kabaki, LLC
N2036
Nuun Active Hydration
684
Ginseng Up Corp
N635
Kalena Sparkling Coconut Water
N731
Oatly
5173
Glossop's Syrup
8420
Karma Wellness Water
5045
Obrigado
Goldthread LLC
N1100
KeVita®
505
Odwalla, Inc.
1647
GoLive Probiotic & Prebiotic Products
5368
Kill Cliff Inc.
OJO Fortified Eye Care Nectar
4423
Good Idea Inc
7209
KOE - Kombucha Organic Energy
N821
Oral I.V. Rapid Hydration Activator
N549
Good Karma Foods, Inc.
5376
Kohana Coffee
2088
Orgain, Inc.
1931
GoodBelly by NextFoods
350
Koia Plant Powered Nutrition
8214
Organic Gemini Tigernuts
5053
N2245
Kokomio
N1116
Organic Pastures Dairy
8423
GREEN Energy
N1109
Kombucha Wonder Drink
309
Organic Valley
1737
Groundwork Coffee
N1335
Kona Deep
5336
Owl's Brew
5708
GURU Beverage Co.
1237
KonaRed Corporation
795
Peet's/Coldcraft
4948
H-Factor
N1135
Kor Shots
N1528
Perfect Hydration
N719
H2rOse, LLC
8810
Kuli Kuli
5483
Pervida Inc
N1247
Gradys Cold Brew
Hain Celestial Group, The
N2330
1957
N1304
630
L.A. Libations
4969
Phenoh Inc.
9202
N902
La Colombe
5209
Pickle Juice Company, The
N1838
Hansen's Natural
1545
LaCroix Sparkling Water
157
Picnik
5102
Harmless Harvest
4920
Lakewood Organic Juice Company
2116
PIQUE TEA
4946
Harney & Sons Tea Co
1090
Legacy Juice Works
N133
Pocas International
N1636
307
Lemoncoco
5439
Pok Pok Som
N2022
LifeAID Beverage Co
5299
Polar Beverages Inc
N2236
Lifeway Foods, Inc.
N619
Pop and Bottle Inc
7919
Halen Brands
Harris Tea Harvest Soul Organic Juices
N2004
Hawaii Volcanic Beverages
8213
Hawaiian Ola
N1833
LIMITLESS Coffee & Tea
7915
Powell & Mahoney Ltd
N322
Health-Ade Kombucha
5099
LIVE SODA
5350
Powerful Yogurt
5048
HEALTHEE
1472
Love Beets
5247
Premama
4653
hellowater
N1235
Madrinas Coffee
8821
Pressery
N2113
Makana Beverages Inc.
N1149
Protein2o Inc.
N936
MALK Organics
8013
Proud Source Water
N141
1877
Pure Brazilian LLC
5497
Hemp2o Heyday Beverage Company, LLC
115 N1003
Hiball / Alta Palla
1953
Mamma Chia
High Brew Coffee
5565
Mangajo Drinks Co.
N1736
Purity Organic, LLC
1771
Himalayan Water/Talking Rain Bev. Co.
5338
Maple Guild, The
N2213
Q Drinks
4911
Hint, Inc
2869
Marquis Beverages
4966
QURE Water
9406
5214
MatchaBar
N1539
Rau Chocolate
8612
MATI Energy
N2329
REBBL
8016
Hint, Inc Holy Kombucha, Inc
N2234
34 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
Mech Overnight Lightning 2.3" x 10.125"_MECH Over
Exhibitor
Booth
Exhibitor
Red Ace
4070
Temple Turmeric
Reed's Inc.
Booth 5284
748
The a2 Milk Company™
N2023
Reliant Hydration Inc.
N1731
The Water Kefir People
N839
Remedy Organics
N1944
Third Street
991
Rethink Water
8916
Three Trees
8112
Revive Kombucha
4937
Tiesta Tea
5337
Ripple Foods PBC
N946
Tigo+ Sports
4973
RISE Brewing Co.
N706
Tio Gazpacho
N1608
Rise Kombucha
N846
Topo Chico
Roar Beverages
8717
Topo Chico
N712
RUNA
2206
Torani
8306
Sanavi
7609
Treo Brands
234 2585
1643
Sap!
N2246
TRUCE
Seasons Sparkling
N246
True Nopal Cactus Water
809
Seawater Food & Beverage
N216
TruVibe Organics
2071
Secret Squirrel Cold Brew
309
Tu Me Beverage Company
Shade Tree Organic Lemonade
2082
Tulip International Inc.
5357
Shaka Tea
N238
TURVEDA
N605
Shottys, LLC
N1939
Uncle Matt's Organic, Inc.
2109
siggi's dairy
5623
Unique Beverage Company LLC
N1913
Simplee Aloe drinks
1683
UPTIME Energy
Simply Juices & Drinks
1647
Veggemo
SIPP eco beverage co.
1858
Verday Chlorophyll Water
5461
Slingshot Foods
8920
Vermont Village
5775
Smart Juice/Smart Kids
1851
Vink & Beri LLC
8215
Smartfruit
9506
Vita Coco
5314
Smokin Mary
9603
Vita Coco
1313
So Good Brand Inc.
N444
VitaNourish
9104
SodaStream
N110
VitaNourish
7607
Som Sleep
7210
Vive Organic
8116
Soma Kombucha and Jun
N131
Voss Water of Norway
5375 N1410
N2123
212 N1433
SONOMA BRANDS
N1635
Waiakea Hawaiian Volcanic Water
SOS Hydration
N1444
WANU Water
207
SOUND Sparkling Tea
N1012
Waterloo Sparkling Water
N641
Spindrift Beverage Co.
5789
Wave Soda
N319
Sporting Club // Sports Juice
9508
Wild Poppy
8011
Sportwater Beverages, LLC
7510
Wild Tonic
N627
Steaz-Healthy Beverage LLC
2007
WildBrine
5478
Stirrings Craft Cocktail Mixers
5736
Win Soon, Inc.
N1129
Stonyfield Organic
434
Wonder Fuel
8221
WTRMLN WTR
167
SuckerPunch Gourmet, Inc.
N2038
You caught lightning in a bottle.
Suja Juice
2209
Yakult USA
482
Sunup Green Coffee
8202
YoFiit
7603
Tart Beverages, Inc.
7207
Yoot Tea
7822
Taste Nirvana Int'l Inc.
5557
Zen Basil
8002
Tazo Tea
365
Zest Tea
495
Tea Crush
7409
Zevia LLC
477
Teaonic
8515
ZICO coconut water
1651
TeaRIOT
7916
Zola
1448
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SHOW REVIEW BY MEAGAN McGINNES
Manifesting a Mission: NOSH Live Winter 2017 Entrepreneurs arrived to NOSH Live Winter 2017 hungry for industry information and were able to fill up on a buffet of insights, knowledge and networking. From investors and innovators to entrepreneurs and industry veterans, CPG’s best and brightest came together at the
ing breaks echoed with actionable advice and stories from market leaders. The morning kicked off with a presentation from John Foraker, co-founder and CEO of HPP baby food brand Once Upon A Farm and former CEO of leading natural food company Annie’s. While
“The business model is the engine that drives and pushes social impact so you have to get them both right,” Foraker said. The idea of staying true to mission continued to resonate throughout the day. Adnan Durrani, CEO and founder of American Halal Co, Inc., maker of Saf-
JOHN FORAKER Co-Founder & CEO, Once Upon A Farm
ADNAN DURRANI CEO & Founder, Saffron Road
TYLER MERRICK Founder, Project 7
Loews Santa Monica Beach Hotel in Los Angeles, Calif., on Nov. 30 for Project NOSH’s biannual business conference. Presentations ranged from how to find profit in mission-based businesses to how to best work with investors, and network-
on stage he noted that when he embraced the concept of mission at Annie’s, the company saw a major boom in sales and a deeper connection with consumers. It was then, he added, that he realized mission’s impact.
fron Road, spoke about how he tried to carry his company mission with him as he looked to connect with potential investors. Chronicling the journey of his missiondriven company, Tyler Merrick, founder of natural confection brand Project 7,
36 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
SHOW REVIEW discussed the good, the bad and the “F5 Tornado” moments that occurred while learning how to balance mission, good business practices and product quality. Adapting to consumer preferences was also a repeated theme during NOSH Live. Neil Grimmer, who disrupted the baby food industry with Plum Organics, spoke
So what’s driving this industry-wide evolution? Changing consumer preferences, according to investment banker Janica Lane, a managing director with Piper Jaffray. During her presentation Lane noted the ongoing shifts are the biggest threat identified by most CEOs, and are affecting how brands and retail channels operate.
recently helped back industry darlings such as Hippeas, Bulletproof, One Bar and Vital Proteins – shared how his firm decided which companies to invest in and what entrepreneurs can do to make their businesses more appealing. Alison Ryu, managing director of CircleUp, spoke about how CircleUp’s newest platform
NEIL GRIMMER Founder & CEO, Habit Inc.
JANICA LANE Managing Director, Piper Jaffray
BRETT THOMAS Co-Founder, CAVU Venture Partners
about how he is using individualized data from blood testing to customize nutrition as the CEO of Habit Inc. And just like diets are not one-size-fits-all, Supermarket Guru Phil Lempert spoke about how retailers need to be more flexible regarding product categories and how they allow their consumers to shop, too. “The more we try to fit products into a box, the more we will fail,” Lempart said. “The industry needs curiosity.”
Kathryn Peters, EVP of retailer services at SPINS, and Brian Reed, principal of market structure at IRI, discussed how data providers have started to look at categories beyond the term’s traditional definition. Benjamin Levy, VP of Echo Capital, and Sabrina Merage Naim, a principal for Echo Capital, took a deeper dive into millennials specifically, looking at data to show how this generation is changing the industry and in turn the investment community.
Helio is using predominantly data to determine where to place their dollars. “Heuristics and bias aren’t just unfair, they lead to less informed investment decisions,” Ryu said during her presentation. Still, there is a role for human relationships and emotion in CPG, according to Mark Sisson. Sisson brought NOSH Live full circle with his presentation on how his passion and purpose for living a healthy lifestyle helped him create booming paleo-in-
PHIL LEMPERT President & CEO, Consumer Insight Inc.
SABRINA MERAGE NAIM Principal, Echo Capital Group
ALISON RYU Managing Director, CircleUp
For investors, personalization, data and mission carry different weights. Many investors base their decisions on their gut feelings and personal relationships. Brett Thomas, cofounder of CAVU Venture Partners – the investment firm that
spired brand, Primal Kitchen. The longtime fitness blogger said his established community of readers were crucial to his success. “I really believe that 100 well placed bloggers and influencers is worth an email list of 300,000 people,” Sisson said.
Distribution and snack guru Michael Renkosiak advised attendees companies on how they can best utilize the offerings and promotions of their distributor in order to have the most impact in today’s changing retail environment.
38 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
Pitch Slam NOSH Live Winter 2017
TRIBALÍ Foods cooked up a victory at the
slam, told NOSH. “TRIBALÍ has ancestral
the South Pacific region of Whole Foods,
Winter 2017 NOSH Live Pitch Slam.
recipes that they modernized to a format
Lassens, and Erewhon.
The California-based company brand
that people are consuming every day
TRIBALÍ was not the only brand to
of frozen, grassfed and finished beef
right now, so bringing that to a dinner
grace NOSH’s stage. Other competing
and chicken patties won the third annual
party or a lunch party was awesome and
companies included Dream Pops, which
Pitch Slam, sponsored by ADM, based on
that hadn’t been done before today.”
produces a line of “superfood ice cream”
what judges said were strong flavors and
TRIBALÍ’s line of meat patties are paleo
popsicles; Go Roam Free, a 100 percent
intuitive packaging design that served as a
certified, Whole30 approved, and Non-
bison cut meat snack brand based in
“road map for the mind.”
GMO Project Verified. Current flavors
Montana; Funny Farm, a goat milk focused
include Mediterranean Style Beef, Umami
brand with lines of cheese popcorn and
most uniqueness, and looked like it had
Beef, and Chipotle Chicken, made with
mac and cheese; and One Culture Foods,
market potential and could resonate with
free range chicken. The products retail
an Asian inspired cooking sauce maker
consumers – that was important,” Greg
for between $11.99-$13.99 per box of four
that recently extended its offerings to
Fleishman, one of four judges during the
patties and have secured placement in
include Asian noodle cups.
“The winner was the one that had the
“The winner was the one that had the most uniqueness, and looked like it had market potential and could resonate with consumers – that was important,” – Greg Fleishman, one of four judges during the slam
39
SHOW REVIEW BY MARTÍN CABALLERO
BevNET Live: Growing and Thriving So you’re beverage company working in a red-hot category; so far, so good. Now how do you rise above a saturated market? In highlighting voices and insights from the red-hot coffee category, the program from day one of BevNET Live Winter 2017, held in the Loews Santa Monica Beach Hotel in California, sought to answer that question. In his opening remark for the day’s presentations, BevNET editor-in-chief Jeffrey Klineman framed the category as an ideal laboratory for experimenting with different growth strategies. “It’s changing fast, it’s drawing investment, accelerating through a variety of channel plays, while attracting consumer attention,” he said. In the show’s opening presentation, Peet’s Coffee president and CEO Dave Burwick sat down with Klineman for a one-on-one discussion illuminating how the company – one of several gourmet brands in the portfolio of coffee giant JAB Holdings, alongside Stumptown and Intelligentsia – has stayed on top. “We feel like allies to a lot of players who are out there.” Burwick said. “We learn from them, they learn from us, there’s so much to be had and I think the competition’s really good.” Offering further insights into coffee and competition, Greg Steltenpohl, founder and CEO of Califia Farms, chronicled how the company’s rapid-fire innovation pipeline has helped it become a leader in both the coffee and dairy alternative categories. “If you go too far in the wild then you get too far ahead of where the commercialization can keep up with you,” he said. “So at the same time you need something that has a situational consciousness that isn’t driven just by segmentation data but that is more about being in tune with where the market is and what it’s ready for.” 40 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
Later on, Jesus Delgado-Jenkins, EVP and chief merchandising officer for 7-Eleven, discussed how the convenience store chain is embracing premium brands, including companies coming out of e-commerce and seeking to break into traditional retail. Betsy McGinn, founder of McGinn eCommConsulting, spoke to the impact of Amazon’s purchase of Whole Foods, particularly in ecommerce, in her presentation. In contrast, Matt Thomas, founder and CEO of Brew Dr. Kombucha, shared his story of maxing out credit cards and failing-before-succeeding as he bootstrapped his tea and kombucha company from the ground up. The first day of BevNET Live Winter 2017 also featured the annual “Best Of” Awards. Brew Dr. Kombucha, La Colombe, and Humm Kombucha were among the brands selected as “Rising Stars,” while sparkling water brand La Croix took “Brand of the Year” honors. Hiball and Alta Palla founder and president Todd Berardi was named “Person of the Year.” On day two, Andrew Henkel, SVP of brand growth solutions at SPINS, talked about how new niches are forming in the industry with e-commerce opening the doors for unique personalized products to thrive. Kara Goldin, the founder of HINT, discussed the ways the brand has grown online and how it has managed to maintain momentum while staying independent. Kara Rubin, vice president of brand and product strategy for Just Goods Inc., offered the audience her advice on getting into brick-and-mortar by dishing up wisdom from her past life as the Northeast senior regional director of Whole Foods, emphasizing the need for brands to be transparent and realistic about their performance. La Colombe CEO and co-founder Todd Carmichael discussed the company’s multi-channel strategy, seizing
on e-commerce, retail, and hospitality opportunities to rapidly grow the brand’s draft latte line and go from a small cafe to a powerful category player in under two years. While La Colombe is still independent, Chameleon Cold Brew co-founder, president, and CEO Chris Campbell opened up about why he decided to sell the company to Nestle this fall. Other presenters included Kevin Rutherford, CEO of nuun, who spoke to the need to monitor company culture and maintaining positive outlook, and Brent Willis, CEO of New Age Beverage Corporation. Willis shared his adventure building a multi-brand business focused on functional beverages and based on acquisitions and risky financial moves that required precise execution. And as always, this year’s BevNET Live Winter conference featured another hotly contested edition of the New Beverage Showdown. Legacy Juice Works, Bear Squeeze, Zen Basil, KR , Kabaki and Mixwell emerged as the top brands from the first round of the competition, which also included PHIT Alkaline Mixer, rivvibe, Koffee Reinvented, Sports Juice, AMAZ, and Manzanita & Madrone THC Fizz. The judging panel in the final round featured BevNET CEO John Craven; Matt Hughes, VP of Incubation at VEB; Ken Sadowsky, senior beverage advisor at Verlinvest; Andrea Tyson, a grocery merchandising coordinator at Kroger; and Zico founder Mark Rampolla, now a co-founder and managing partner at Powerplant Ventures. Ketogenic meal shake maker Bear Squeeze emerged as the eventual winner. Brand co-founder Max Baumann said the company planned to use the $10,000 prize to help contribute to the advertising of a Kickstarter campaign aimed at raising over $400,000 within a 35-day period.
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SHOW REVIEW BY JUSTIN KENDALL
Brewbound Session Examines the Future of Beer The future of the beer business was once again on display during the Winter Brewbound Session, held November 29 in Santa Monica. Leaders from all three tiers of the industry discussed ways to grow the category and reach future consumers. The event also featured the Startup Brewery Challenge business pitch competition. Ninkasi Brewing Company co-founder Nikos Ridge and CEO Cheryl Collins opened the day with an analysis of their evolving approach to product innovation, including a more rigorous vetting of potential beer releases. The duo also discussed how to maintain a brewery’s culture during and after a leadership change. “We’ll brew a lot of things, and try a lot of things, but part of our process is not expecting every one of them to make it to market,” Ridge said. “Your sales and marketing dollars become much, much more effective when the foundation of the beer that you’re putting out is much stronger.” Collins added that there’s a misconception that creativity and innovation are synonymous. “What we’re talking about is a very methodical approach to how we’re generating new products and how we’re going to measure their success in a more objective way,” she said. Part of this intentional approach innovation involves conducting sensory and consumer testing, refining recipes and, sometimes, dumping beer. “We’re staking our reputation on every beer now,” Collins said. “And there are more people coming into craft so we really have to put our best foot forward. It’s pretty much a no brainer that if you’re being customer centric, you dump the beer if it’s not what you want.” 42 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
Following the interview with Ninkasi, Drizly co-founder Justin Robinson and vice president of strategic partnerships Taylor Burton opened a window into the growth of their ecommerce platform. “We’re helping our partners go out and meet consumers where they are and on their terms,” Burton said. In 2017 alone, 12 million consumers – or 5 percent of the legal drinking age population – visited Drizly’s website. The company also processed 1 million transactions, Robinson said, noting that alcohol ecommerce could account for between 8 and 15 percent of industry sales in the next five to seven years. The morning session wrapped up with a presentation on Generation Z consumers (also known as “centennials”), the first members of which turned 21 on January 1, 2018. Kantar Futures vice president Lindsay Kunkle and Tropos Brand Consulting founder Mike Kallenberger explained the differences between centennials and the millennial generation that preceded them. Centennials are the first generation to have grown up with the Internet and social media from day one – and to come of age in an era of economic volatility and terrorism, Kunkle explained. “Change is the one constant of Centennials’ lives,” she said. The afternoon session resumed with Total Wine & More senior manager Matt Bardill and spirits category director Amanda Batchelet giving an overview of beer sales at the retail level. Beer sales at the liquor store chain were flat in 2017, accounting for about 15 percent of the company’s business, they said. From Bardill’s perspective, innovations such as hard seltzers are one way in which
the beer category can “steal some share back from spirits and wine” and reach female consumers. “It’s more approachable,” he said. “That’s one of the things that we have to work on as an industry – how do we talk to more than just the young male customer?” Also joining the afternoon program were Uinta Brewing Company chief marketing officer Jeremy Ragonese and Omnicom Media Group managing director Darrell Jursa, who examined the future of beer marketing, highlighting digital marketing strategies. “Even before you think about tactics, it’s a good idea to develop the right personas,” Jursa explained. “Trying to get an understanding of what an 18-22 year old is doing. And I say 18 because you still need to figure out how people are coming into a particular franchise. They are not at LDA yet, but you have to figure it out. The best thing to do, first and foremost, is to gather everything that you have and package it up so that you know what you’re dealing with.” The day concluded with Constellation Brands chief marketing officer Jim Sabia and Craft & Specialty division president Marty Birkel giving insights into their strategy for the high end. According to Sabia, the high-end segment could add about 500 million more cases of beer in the next decade. “We believe it’s all about premiumization,” he said. Constellation Brands’ Craft & Specialty division president Marty Birkel said the company currently owns a 27 share of the high end – defined as products priced at $25 per case and above. “The high end growth is significant,” he said. “It’s all of the growth in the beer category.’
Startup Brewery Challenge And craft will play a critical role in the future growth of the segment, the executives said. Birkel added that he expects craft to grow in the mid-single digits in the coming years, making it the industry’s second greatest source of growth behind Mexican imports. “It’s an area that we’re really committed to and focused against,” Birkel said. “And we continue to build our presence in the category.” Ballast Point is the “centerpiece” of Constellation Brands’ craft division, and the brand that the company plans to build around nationally, Birkel said. And the brand has plenty of room to grow, according to Sabia, as Constellation’s research found that 80 percent of consumers are still unaware of the Sculpin brand. “It’s a great brand,” Sabia said, “and it’s taught us so much about the craft segment, and I think it’s helping us now with the latest one, Funky Buddha.”
Chula Vista, California-based Novo Brazil
Partake Brewing, a Canadian non-alcohol-
Brewing was named the winner of Startup
ic beer maker, and Prospect Cider Works,
Brewery Challenge 9, a business pitch
a Boston-based cidery, highlighted the
competition sponsored by Craft Brew Alli-
diversity of products being introduced
ance at the Brewbound Session.
into the increasingly crowded beer
The competition featured five brewery
market. Meanwhile, Fifty West Brewing
entrepreneurs, who were given four min-
Company and Shotgun Beer pitched their
utes to showcase their beers and business
unique approaches to connecting with
plans in front of a panel of industry judges.
consumers via community programs and
Novo Brazil CEO and master brewer
niche packaging.
Eduardo Pentagna pitched his company’s
During the competition, the five con-
strong country-of-origin story, a product
testants pitched to a panel of judges that
that uses Brazilian ingredients and a brand
included Karmen Olson, director of emerg-
identity featuring vibrant colors.
ing business partnerships at Craft Brew
“I came just wanting to introduce us
Alliance; Tom Bleigh, innovation brew-
and show our hard work, and it is amazing
master at Craft Brew Alliance; Matt Bardill,
they could recognize us,” Pentagna said
senior manager for beer at Total Wine &
following the competition.
More; Kit Wanty-Lambert, vice president of
The judges chose Novo Brazil’s pitch
marketing at O&W Inc.; and Martin Favela,
over a field of competitors who offered
the winner of Startup Brewery Challenge 7
alternatives to traditional beer offerings.
co-founder of Border X Brewing.
43
By Martín Caballero If there’s one constant in life, it’s change. The same goes for life in the beverage game. As we begin the new year, the next 12 months promise to bring more changes and a continued evolution of trends across the ready-to-drink beverage industry. While in some ways beverage consumers are becoming more careful about their consumption habits – checking ingredient labels, reducing sugar intake – in others they are showing a greater willingness to experiment and seek out new experiences. For example, protein, a beverage ingredient long associated with muscle recovery products and meal replacement, is now used to add nutritional value and functionality to waters, coffees and various different ready-to-drink products. Flavors are changing too, as consumers are showing interest in complex experiences that balance savory, sweet, tart and earthy notes. BevNET reached out to a variety of suppliers, brands, and industry experts to help glean what to expect from food and ingredient trends in 2018.
INGREDIENTS PROTEIN Protein will be one of the major ingredient trends of 2018. Is anybody surprised? If so, they shouldn’t be. Protein, as either the basis of a beverage or an added value proposition, has become a major influence in the ready-to-drink product space. As suppliers have pursued technological innovations, the market for protein has expanded to include both animal and plant-based sources, each with different applications, use occasions and target audiences. 44 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
Brands and manufacturers will be looking for ways to continue fueling that expansion in 2018. Arla Foods Ingredients, for example, is focused on using a newly developed whey protein product that can be incorporated into colorless liquids. “Over the course of 2018 and beyond, we expect to see a significant increase in launches of whey protein ready-to-drink beverages, with a particular focus on clear protein waters,” said Anne Louise Friis, business
development manager at Arla, adding that it has traditionally been challenging to use whey in clear drinks without compromising taste, texture and appearance. However, it’s plant-based protein sources in particular that have struck a chord with consumers over recent months. From Bolthouse Farms launching a pea protein-based milk to iconic protein shake brand Muscle Milk launching its first plant-based subline, Evolve, the industry
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has embraced this trend and has plenty of runway to keep growing over the next 12 months. “2018 will be a big year for vegetarian protein sources like pea and hemp, but why protein won’t slow down either,” said Holly McHugh, marketing associate at beverage incubator Imbibe. “Expect to see protein in new beverage applications like waters, chocolate, coffee and tea.”
Alongside protein, collagen has emerged as a rising star. Sourced from fish, bovines, or even plants, this protein is free from additives and is cold soluble, making it ideal for beverage applications. But it’s the range of purported functional benefits, including hair and skin care, that really have ignited its path. Kerry Flavors picked collagen as one of its top function-
al ingredients in its 2018 Flavor Charts. Last year, collagen protein maker Vital Proteins secured a $19 million investment from CAVU Partners, indicating the ingredient is expected to continue to shape the beverage landscape over the next year. “Beauty enhancing ingredients are becoming more mainstream, and collagen is the rising star,” said McHugh.
SUGAR REDUCTION consumers. In some cases, simply moving to a completely unsweetened formulation could make the difference. “Set off by the seltzer craze, we are seeming consumers demanding unsweetened teas, cocktails, and even energy drinks,” Wemer said in an email. She noted that the challenge, particularly for beverage products with functional ingredients, will be to emphasize great flavor (and mask undesirable ones) without using sweeteners. McHugh agreed with Wemer’s assessment. She noted that brands across all beverage categories are looking to integrate new low or no-sugar SKUs or reformulate existing ones. “The new/replacement
Every era has its health crisis, and as obesity rates in the U.S. population continue to soar to epidemic levels, sugar has become public enemy number one. From taxes on sugar-sweetened beverages to falling soft drink sales, all indications are forces touching across all areas of the beverage industry will continue to push for further sugar reduction in 2018. The simplest way to reduce sugar? Eliminate it altogether. Kristen Wemer, Director and Beverage Architect at Flavorman, noted that manufacturers’ attempts at working with natural sugar substitutes, like stevia and monk fruit, have not been widely accepted by
products will be sweetened with natural non-nutritive sweeteners, lightly sweetened, or contain no sweetener at all.” In pushing sugar down, manufacturers will be looking for new natural sweeteners to replace it with. The Specialty Food Association’s Trendspotter Panel, which includes experts from retail, foodservice, strategic marketing and culinary education, included the continued rise of “alt-sweet” as one of its food and beverage trend predictions for 2018. “Syrups made from dates, sorghum, and even yacon and sun root will join monk fruit on the market as emerging options for sweet,” the panel said in a release.
CLEAN LABEL the “clean label” trend to a new level, with consumers increasingly seeking onpackage certifications of proper sourcing and responsible production. “Beverage companies need to be ready to answer those questions, and they can only do that if they ensure they source their ingredients from suppliers they can trust,” she wrote in an email. According to Kristen Wermer of Flavorman, ingredient labels are likely to get simpler and simpler. As they do, consumer habits are reflecting their value.
As consumers gravitate away from sugary drinks and towards better-for-you beverages, product labeling has begun to play a more critical role in communicating information about sourcing, allergens, business practices and much more. The movement towards “clean label” products that emphasize transparent and responsible use of ingredients is set to continue in 2018. Anne Louise Friis of Arla Foods Ingredients told BevNET that over the next 12 months there will be an escalation of
“We are seeing people sacrifice function, appearance, and sometimes taste for the sake of a clean, easy-to-read ingredient statement,” she wrote in an email. Meanwhile, the Specialty Food Association’s Trendspotter Panel took a slightly different stance in noting that “more is more” when it comes to product labeling. “Consumers will seek greater on-label visibility in the farms, ingredient sources, and supply chain of each item in their shopping basket,” the group stated in its list of trend predictions.
D I G E S T I V E H E A LT H While functional drinks as a whole have shown strong momentum, beverages that aimed specifically at promoting digestive health have been among the main drivers of that segment. Kombucha, drinking vinegar and probiotic-enhanced drinks have found a widening audience of consumers; according to a study by Survey Sampling
46 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
International, 70 percent of consumers prefer to consume probiotics in a food or beverage as opposed to a supplement. “We’ll continue to see beverages like juices, teas, coffees, creamers and more fortified with probiotics, as well as naturally occurring probiotics in beverages like kombucha and drinking vinegar,” said
McHugh, adding that prebiotics will also be appearing in more beverage products. Kristen Wemer of Flavorman agreed. “Instead of indulgent products that taste delicious but make you feel terrible afterward, we are seeing light, pleasant-tasting beverages that can make you feel better after consuming,” she wrote.
FLAVORS BOTANICALS / FLORALS If you were skeptical about the potential of plant-based functionality in beverages, 2017 should have made you a believer. Following in the path of aloe vera several years ago, ginger and turmeric were two of the hottest ingredients in beverage over the past year, and many are predicting that the next wave of functional botanicals and adaptogens will take off over the next 12 months. For beverage makers, part of the appeal of these ingredients— such as lavender, elderflower, ashwagandha and curcurmin, to name a few— is their versatility. McHugh predicted that floral flavors will become more prevalent in juices, teas, lemonades and enhanced waters. As consumers continue to seek out functional benefits from their drinks, adaptogenic herbs present an opportunity to tick off
that box while adhering to “clean label” guidelines. “Lavender supports stress relief, elderflower has antiseptic and anti-inflammatory properties, and rose is suggested to improve hair, skin and nails and aid with digestive issues.” Underscoring their versatility, botanical and floral ingredients are trending upwards in both hot and cold beverages. According to the 2018 Kerry Flavor Charts, juniper, dandelion, rosemary, lemongrass and basil are among the 20 fastest growing flavors in dairy and hot beverages over the last year. Meanwhile, lavender, rose, hibiscus and cardamom are three of the 20 fastest growing flavors in the last three years. Within cold and water drinks, elderflower, honeysuckle, rosemary, jasmine blossom, violet and thyme are all showing notable growth as well, according to Kerry.
EARTHY, SPICY & COMPLEX With the increasing popularity of beverage categories like kombucha and drinking vinegars, consumers have gradually warmed to the idea of incorporating bolder, more complex flavors into their beverages. That trend looks set to continue in the coming year. In the 2018 edition of Kerry Flavors’ annual Flavor Charts, several deep, earthy flavors are identified as one of the 20 fastest growing flavors in the last year. In dairy and hot beverages, these flavors include black pepper, licorice and smoke. For water and cold beverages, spicier flavors like ancho chili, habanero and cayenne
were listed alongside more esoteric tastes, like sumac and celery bitters. Meanwhile, a variety of mushrooms – including reishi, chaga, lion’s mane and cordyceps – were showcased as top functional ingredients. Though we don’t expect to see everyone drinking mushroom-based beverages by this time next year, there is rising momentum behind these flavors thanks in part to their association with natural wellness. “Flavors like maple syrup, ginger, turmeric and reishi mushroom are still growing in popularity, all of which have deep, earthy flavors that typically imply some health benefits,” Wemer said.
TART As beverage companies look to reduce their reliance on sugar, they may begin to look closer at tart flavors to infuse drinks with taste and complexity. The growing popularity of kombucha and other fermented drinks that play in that space is one example of that trend playing out.
“Flavors like grapefruit, apple cider vinegar, lemon and hibiscus continue to be popular, especially in unsweetened products where the lack of sugar and, often, presence of carbonation really makes the tartness stand out,” said Kristen Wemer.
47
Ready to Run: Craft Mixer Brands Race Toward Mainstream By Ray Latif For Alex Abbott Boyd, Walmart was the inevitable next step. The founder and CEO of premium mixer brand Cocktail Crate, Boyd is cognizant of the retailer’s clout in the mixer space; according to industry estimates, Walmart accounts for over 30 percent of category sales. Although his brand, which markets innovative flavors like Sriracha Margarita and Maple Whiskey Sour, performs well at specialty and natural retailers, Boyd believes that the biggest opportunity for growth will be in conventional and mass chains. Still, to get into the chains, you’ve got to think like the chains. And that can mean a different approach. “When we went to Walmart, it was the easiest meeting I ever had in my life,” Boyd said. “[The buyer] said ‘I’ve already tried your product – I love it. The only problem is that I can’t sell it for $9.99.’ I said, ‘Well, I’ve got this new line for you at 48 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
$5.99.’ And she said, ‘Deal’s done.’” So for Walmart at least, gone was the spicy Sriracha, and in came the ginger. Cocktail Crate’s new “classic” line of whiskey cocktail mixers will debut at 620 Walmart locations this March. The products, which come in three varieties – Old Fashioned, Whiskey Sour and Ginger Mule – will be priced at $5.99 per 375 mL flask bottle, approximately $3-4 less expensive than the brand’s original products. Along with a palatable price point, the products are designed for a one-to-one blending ratio, a key for consumers seeking a simple blending process between spirit and mixer. That ease of preparation is critical to reaching everyday consumers, said Mark Mahoney, the co-founder and CEO of Powell & Mahoney, another mixer brand. “Five years ago, the average high-use complex cocktail had four to five ingredients,” said Mahoney. “You become a chemist at home to do that. In our re-
search and the data that we were combing through showed that there are a bunch of people, especially millennials, that want to drink dark spirits. They want an Old Fashioned. They want to understand what the classic cocktails are, but they don’t want to spend a lot of time having to become an expert bartender to do that.” Last year Powell & Mahoney introduced a brand refresh that amplifies messaging about the mixers’ ease of use and positions them as “a one-and-done solution.” The refresh came on the heels of a national distribution deal with Walmart, which picked up two Powell & Mahoney SKUs for 1,800 of its stores. The relationship will undergo a reset in March: Walmart will carry four to six Powell & Mahoney products in 600-1,000 of its locations, where brand performance has excelled. Despite a decreased store count, Mahoney anticipates a 2-2.5 percent increase in sales.
“They’re just a behemoth for moving cocktail mixers,” Mahoney said. Sales data helps to shape this perspective: Citing figures from SPINS, a market research firm focused on natural, organic and specialty products, Boyd stated that the mixer category accounts for just $1 million in sales within the natural channel, $7 million at specialty retailers, and $267 million in MULO-tracked stores. “Given just how narrow my potential market is in natural and specialty, I’m not going to have a business if I don’t go after Walmart,” Boyd said. The sentiment is shared by many entrepreneurial brand owners in the premium mixer space, which have also benefited from surging consumer demand for small-batch spirits and a thriving craft cocktail scene. Anchored by breakout brands like Q Drinks and Powell & Mahoney, the set continues to gain traction at mainstream retailers, particularly Target and Walmart, which are now emphasizing a premium product mix. In turn, companies like Cocktail Crate and others are trying appeal to more consumers with new positioning, line extensions, lower prices and simpler formulations.
Less Whimsical, More Effortless
Finding a Balance
So that means that Owl’s Brew, a teabased cocktail mixer brand that launched largely in natural and specialty retail channels, is attempting to broaden awareness and appeal of its products by reducing its emphasis on esoteric flavor names and magnifying visibility of common ingredients. “One takeaway after four years [in business] is that if people don’t understand it, you lose them,” said Jennie Ripps, the cofounder and CEO of Owl’s Brew. “There are less people looking for discovery and more people that are looking to make a great cocktail. Because we were so ‘crafty’ to start, we didn’t do a good job explaining what the ingredients were. People couldn’t imagine the flavor profiles.” Targeting conventional consumers, Owl’s Brew, which also markets a line of beer and tea blends, recently unveiled a label refresh for its mixers that swaps out the tagline “a tea crafted for cocktails” with “a craft cocktail mixer brewed from tea and botanicals.” The new look also highlights familiar ingredients on the front label and calls out specific spirits for blending. The hope, Ripps said, is to making the ultimate end cocktail more relatable to conventional retail consumers. “Using cues that relate more to traditional cocktails or cocktails people are more familiar with… while it takes away from the whimsicality of the brand, from a pragmatic standpoint it will allow somebody to more quickly understand what they can do with it,” Ripps said. Boyd concurred. While he praised the growing mix of speciality cocktail mixers and ingredients coming to market, he views the expanding set of syrups, shrubs, bitters and botanicals as attractive to only a small segment of consumers within the burgeoning cocktail scene. The majority of drinkers, he said, are seeking an “effortless” experience. “I find that most of my customers, they don’t have a jigger; they can’t really measure things out,” Boyd said. “But everyone can at least figure out how to put two shots of the same sized liquid into a shaker, into a glass. It’s both part of what makes the cocktail taste great and is all about the effortlessness.”
Nevertheless, it’s not all Walmart; natural and specialty sales are growing, and they continue to supply steps toward bigger channels. Although he’s set his sights on a bigger presence at mainstream retail, Boyd himself acknowledges that mixer sales in the natural and specialty channels continue to grow. Similarly, Jordan Silbert, the founder and CEO of Q Drinks, views conventional grocery stores as the bigger opportunity for his brand, but believes there is ample potential to expand his business at smaller retail chains and independent stores. “Our ACVs in natural and speciality are ridiculously low given our performance,” Silbert said. “It’s not going to turn us into a $3 billion company like Fever Tree, but [as] we get our new packaging out on the market, engage our brokers, and execute really well on the sales side, we believe there’s millions and millions of dollars in there for us.” Felicia Vieira, the president of Crafted Brand Company, the maker of the Crafted Cocktails line of mixers and shrubs, is also pursuing growth in natural as part of a multichannel strategy that includes mass and conventional grocery chains. The company works with retail partners, including Walmart, Cost Plus World Market and Bed Bath & Beyond, to identify ingredients and flavors that can appeal to a variety of consumers. “It’s a matter of what flavors are appealing to the market,” Vieira said. “We do extensive research on what are the hot cocktails, what’s mainstream, what can cross over into several different marketplaces.” Viera noted that buyers across the retail spectrum understand they need for a premium mixer set and that “there’s no discussion about why they need” it. It’s a significant turnaround for the category, a change Silbert said has been years in the making and fueled by consumers increasingly drawn to premium spirits. “Ten years ago, [large retailers] wouldn’t even talk to me,” Silbert said. “And now, just about every leading conventional grocery store in the country has either us and/ or Fever Tree. Their customers want better mixers because they’re drinking better spirits. And there’s more dollars available if you actually sell a better mixer as compared to a lower priced one.” 49
BRAND NEWS MIXERS
Kelvin Slush Co. Last year, Kelvin Slush Co. launched its Organic Frosé Slush Mix, which is now the brand’s best selling flavor. Ficks & Co. continues to sell its mixers through Target and will be introducing a new product at Natural Products Expo West in March. Crafted Cocktails recently expanded its national distribution offerings to include two all-natural mixers: Piña Colada and Jalapeño Pineapple, each with 60 calories.
Improper Goods, LLC, the parent company to The Bitter Housewife and RAFT Syrups, recently debuted a line of cocktail kits that include a 100 ml bottle of syrup, a 50 ml bottle of bitters, and a recipe card to make 5-7 drinks. Drink Caliente recently released Plum Rosemary Chili, a collaboration with Sweden’s chef Titti Qvarnström. The drink is made from 100 percent organic natural ingredients.
Navy Hill, which launched in the summer of 2017, has expanded its distribution from the mid-Atlantic region into Pennsylvania and New Jersey.
Cocktail Crate gained significant distribution in 2017 and launched a new “Classics” line that will be available in select Walmart, Target, Hy-Vee, and Fresh Direct locations starting in March 2018.
American Juice Co. partnered with noted bartender Gaz Regan to create Gaz Regan’s Salted Espresso Martini Syrup, which is now available on Amazon Prime and directly through American Juice Co.
Fiery Fusions. In May 2018, Fiery Fusions Beverage will be launching Strawberry Basil Habarita into its product line of spicy margarita mixers. The drink will be available in 750 ml glass bottles. Element Shrub & Club released their apple cider vinegar ‘shrub soda” in 4-packs this past January. Top Note Tonic. Top Note more than doubled its revenue in 2017 and added beverage veteran and entrepreneur Greg Stroh to the company’s advisory board. Hella Cocktail Co. recently launched Old Fashioned Cocktail Syrup, made from pure cane sugar and whole spices. RIPE Craft and Bar Juices added 700 new retail points of distribution in New England and is also now available in southern California. 34 Tonic launched their new handcrafted Honey Sour syrup last December. Barsmith recently launched Paloma and Mai Tai mixers and gained full distribution at Publix. The company also expanded distribution at Target in the South and Southeast and launched at Safeway in Northern California.
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A Dark, Rising Tide Elevates ColdBrewed Dreams By Brad Avery
WHEN GRADY LAIRD BOTTLED HIS FIRST OFFICIAL BATCH OF cold brew coffee in 2011, it was a niche enterprise with a unique, craft aesthetic. Only a relative handful of brands on the market were producing the alternative coffee format, and Laird took an eagle-eyed approach to ensuring the brand that would bear his name – Grady’s Cold Brew – stood up to his own quality assurance taste test. “When we started you had to explain that it wasn’t beer, there was a ton of consumer education on cold brew,” Laird told BevNET. But much has changed in the nearly seven years since Grady’s hit store shelves in New York. Cold brew today is one of the top trends in beverage, the term is becoming increasingly familiar to consumers, other categories like tea are beginning to experiment with the process, and the innovation pipeline for the coffee market as a whole seems to be primarily geared towards building on the concept. Now, as an influx of innovation comes from startups looking to get in on the new movement in coffee, the major players in the beverage industry are also now seeking a stake in the game – and they have the resources to quickly dominate the field. That isn’t putting off the young CEOs of these early stage coffee brands, however: ask them how they feel about the big competition, you’ll likely hear a common refrain: A rising tide lifts all ships. Last year in particular was a pivotal moment for this coffee subcategory, and for some brands that have been trading in cold brew since the turn of the decade, the tide is finally carrying them to success. Mainstream coffee competitors have moved to increase their share of the market via product launches and
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brand acquisitions, and the investments and the buyouts are starting to happen. In the fall of 2017, Nestlé took a stake in third wave coffee cafe chain Blue Bottle Coffee and soon after made a full acquisition of seven-year old Chameleon Cold-Brew. Peet’s Coffee, a subsidiary of European conglomerate JAB Holdings Company, launched not only a line of cold brew coffees but also Coldcraft, its own chilled direct store distribution (DSD) network. And Starbucks, which controls the largest share of the readyto-drink coffee market with its iced coffee and latte products, has continued to grow its cold brew offerings both in retail and on premise. The company now offers cold brew in all of its cafes nationwide, with nitro cold brew available on draft in about 1,500 of those stores. In January, the company partnered with Joyride Coffee Distributors to deliver its cold brew on tap in major East and West Coast markets. PepsiCo has partnered with Starbucks, Dr Pepper Snapple (DPS) is a distributor for canned cold brew brand High Brew (and potentially several others, now that it’s been merged with Peet’s JAB Holdings stablemate, Keurig), WhiteWave has made big gains in grocery with STOK, and The Coca-Cola Company has signed a deal with Dunkin’ Donuts – a company currently seeking to find its own footing in the cold brew trend. “Cold brew coffee is not a fad,” Joyride CEO David Belanich told CNBC after the announcement of the Starbucks partnership. “And Starbucks is actually forward looking enough to see that and seize on it in a big way without compromising their quality and standards.”
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THE REAL GAME BEGINS
of a major distributor. That’s not to forget the capital that Smith has garnered via investment from firms like CAVU and Boulder Investment Group Reprise to provide the resources to scale. At the time of its acquisition by Nestlé, Chameleon had grown its distribution outside of specialty as a premium organic brand in the drug and grocery channels. While a craft-focused founder such as Grady Laird said he worries about low quality trend-followers posing a threat to cold brew’s perception by consumers, Chameleon founder and CEO Chris Campbell said he sees the space becoming a place for brands to compete and find their own niche. “Everyone needs to decide where they live,” Campbell said. “You can live at low price, low quality, or high price, high quality, there’s a big mix and that shakeup is going to happen over the course of 2018. Everyone is going to carve out their spot. It’s a big space, but it’s not an infinitely big space. And so we’re all going to battle with each other a little bit for the hearts and minds of the consumers, and we’ll see who has loyalty and who doesn’t over time.” In his Darwinian approach to the category, Campbell said he believes big strategic corporations are getting into cold brew now not just as a way of following trends, but because the time is also opportune to make a cheaper entry. With veteran and incoming cold brew brands set to fight for survival, the independent brands that “make it” and last the next three to four years will
threat to soda and energy drinks as the go-to pick-me-up beverage, Watson said. The presence of larger brands is likely to open more doors than it closes for startups. “I would still be very happy if I were a startup and I thought Nestlé were going to make a bigger push into this,” Watson said. “The more money and marketing you have behind this, the more you have big companies pushing retailers to open up new coolers to this segment, which is much better to everybody.” David Smith, founder of High Brew Coffee, told BevNET he felt that the entry of companies like Starbucks and Nestlé has had a validating effect on the space. For High Brew, which has differentiated from other cold brews via its slim cans, emphasis on energy, and slightly lower price point, distributor depletion numbers are up more than 130 percent year over year, Smith said. But even with strong sales, the influx of brands and innovation poses a challenge. In High Brew’s case, its alliance with DPS in 2016, when the company was still fairly new, presented an opportunity for rapid growth that gave it clear edge over other early stage cold brew brands, particularly in the convenience channel. Many cold brews enter the market via the natural and specialty channels, and Smith said he wasn’t sure that mainstream c-stores are a viable strategy for most new companies without the strong arm
have found a strong point of differentiation and will likely fetch a higher asking price for an acquisition, he said. As far as a rising tide goes, Campbell thinks the category is maturing, and the ship for a national brand may have already sailed. “I think this may be a great time to maybe do a regional play, and try to build a company that gets to profitability and is operable over the long haul, kind of win hearts and minds locally, but to build a national brand in cold brew right now, I think would be challenging,” he said. “You’ve got to have a brand that’s really interesting. You need to go into a buyer who’s already got three, five different brands on the shelf, and say ‘you need this new brand that has no performance data behind it.’ That’s a really hard sell.”
Standards are a big issue, to be sure, and the “craft” side of the cold brew space doesn’t want to see it commoditized. Much like craft beer before it, a seemingly endless wave of startups is also appearing across the country. For independent brands like Grady’s, there is concern the movement may be hurting the integrity of the cold brew name. “It’s a really hot category, and I think in a rush to monetize it I think a lot of the people who produce cold brew have forgotten, or maybe they never even cared, why they got into it,” Laird said. “I got into cold brew because it was a better tasting, less expensive, and more convenient way to drink quality iced coffee than having to go to the coffee shop. And I don’t know if you can say that about a lot of the products that are on the shelf right now.” But according to Rabobank senior analyst Jim Watson, cold brew is still in the first inning of the ballgame. RTD coffee is a roughly $3 billion category, he told BevNET, and cold brew is barely a fraction of that market share today, with retailers only now beginning to expand the shelf space they offer the category. Indeed, cold brew is the most important innovation to come to the space in recent memory, he added, and the fact that major players are trying to consolidate their share of the market is a promising sight. As consumer attitudes toward coffee consumption occasions shift with cold brew, the category could one day pose a serious
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STARTUPS COME OUT STRONG
The founding team of Rise Brewing Co. believes it has found the point of differentiation it needs to win nationwide. Since launching in late 2016, the New York-based company has expanded throughout the Northeast and in January began selling in the Pacific Northwest and Alaska, with plans to enter the Mid-Atlantic region later this year. Seeking a signature point of differentiation, Rise has attached itself to nitro cold brew, deploying a Guinness-like widget for its cans to ensure a proper release when the can is opened. As its
retail placements have grown, the company has released citrusflavored SKUs such as Blood Orange and Lemonade nitro coffees, and placed a big emphasis on its keg business, distributing via Joyride Coffee Distributors and finding alternative routes to market such as beer distributors. “What makes small companies different is to be able to be agile, try out new methods of sampling and relating to the consumer,” said co-founder Jarrett McGovern. “For us it was doing a lot of beer trade shows and we actually picked up a lot of keg accounts. But we were the only coffee company that was there. For the big guys, they don’t look at the nontraditional markets to take on the distributors.” McGovern is a subscriber to the rising tide philosophy, noting he sees big brands doing the “missionary work” for cold brew and paving the path for innovative startups to succeed. The cold brew space is also rich for experimentation. The unusual combination of coffee with citrus flavors has opened doors for brands such as Rise, Matchless Coffee Soda, and Upruit to differentiate out the gate. While still unproven, this particular innovation trend has caught the eye of larger brands such as Stumptown and Chameleon, both of whom unveiled sparkling cold brew lines with citrus flavors last year. And so the innovation push continues. In addition to citrus, Rise is also exploring dairy alternative lattes as another innovative trend, following in the footsteps of Califia Farms’ prolific almond milk latte portfolio. “I hear somewhat often that the cold brew coffee shelf is crowded,” said Rise CEO and co-founder Grant Gyesky. “They’ll walk into a Whole Foods and say there’s already six coffees on the shelf. My answer to that is to say, when you walk over to the beer section how many beers are there?”
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BRAND NEWS COFFEE
Cultivo released a line of USDA certified organic cold brew coffee in 8-oz recyclable cartons and is working with distributors in Michigan, New York City and Texas.
Bizzy Coffee updated their packaging to clearly call out their USDA Organic certification, articulate the clear user benefit and leverage their placement within the cooler.
La Colombe plans to add more flavors this year to its Draft Latte line, a first-of-its-kind, ready-to-drink beverage that delivers the taste and texture of a cold latte.
Forest Coffee’s cold brew has enjoyed success at Whole Foods and Safeway and the company is now preparing to launch at King Soopers in spring of 2018.
Jittery John’s expanded their distribution into over 450 new stores in 2017 and moved into Washington, Oregon and Hawaii with the help of Whole Foods, Safeway, and Target. The company will roll out into another 250 stores within the first quarter of 2018.
Bona Fide Brewing Company was named Best New Product by Prepared Foods Magazine, Spirit of Innovation Awards. The award was granted due to the ambient shelf stability, product quality and labor savings that Bona Fide nitro coffee kegs provide food service operators.
Station Cold Brew Coffee expanded their production capabilities 10x and will add Mocha to their lineup this spring.
Califia Farms will refresh their Cold Brew coffee blends. All cold brew coffees will now be made with 100% Direct Trade Arabica coffee; the sugar will be reduced by 25 percent in the latte, salted caramel, mocha and mocha noir flavors; and the new packaging will feature perforated labels on both sides for easier recycling.
RISE Brewing Co. Rise’s 7 oz. ‘slim can’ line of Original Black, Lemonade and Blood Orange flavored cold brew coffee is now available throughout Oregon and Washington. SUNNIVA Super Coffee shifted their entire product line to zero sugar. The company now sweetens its three flavored coffees with organic monk fruit, eliminating sugar entirely and bringing the calorie count to 80 per bottle. High Brew Coffee introduced their 32 oz. environmentally-conscious coffee in the unique Tetra Evero carton bottle. Lucky Jack Cold Brew released their 32 oz. Organic Cold Brew Concentrate, which is now available in Whole Foods throughout New York and the Southern Pacific region as well as HyVee across the Midwest. N.O. Brew Coffee celebrated their 14th year with new packaging that features a clear, shrink-wrap label on new square 34.5 oz. BPA-free PET bottles. Loco Coffee is transitioning from their current 10 oz. PET bottles to shelf stable 12 oz. slim cans with their coconut water infused cold brew coffee. Metabrew has launched its second vegan flavor; a nut-buttered tea to compliment its Nut-Buttered Coffee. 56 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
Rocket Fuel High-Test Coffee Milk reached an exclusive partnership with Maine’s specialty beverage distributor Vacationland. New Age Beverages. In late Q1, New Age Beverages will launch Marley Cold Brew Coffee, an all-natural, ready-to-drink Jamaican cold brew coffee beverage. Marley Cold Brew is steeped for 18 hours and is formulated with 100% Arabica beans in each of its four flavors. Cuvée Coffee is ushering in the new year with a whole new look and state-of-the-art cold brewery to provide their product to even more consumers. The company is also preparing to launch two new flavors of the Nitro Cold Brew line as well as an updated website. Koffee Reinvented is launching with four flavors and has partnered with Los Angeles Distribution Co. and Kehe. Bramo Cold Brew Coffee has been picked up by UNFI Retail Services and its three readyto-drink 12 oz. aluminum bottles recently launched in Shop Rite and Tops markets. Keepers Coffee is doing a kickstarter this spring to launch Keepers Black, a sparkling coffee that will use naturally processed coffee beans from Ethiopia.
BevNET’s Best of 2017 came from growing companies and startups, identifying rising stars and the most important trendsetters. We honor the products, the plays, the packages, the leaders and brands who were the hardest working, or just the cleverest. Timing is key: last year’s outstanding performer might have leveled off, formulations might change, function might best flavor; new packaging might not be right.
But it isn’t always easy to drink your way to enlightenment. So when the team started trying to sort through the stacks of veteran performers and newcomers, understand, there were plenty of arguments. Important message: Really amazing year! It’s clear, obvious, probably intuitive. Excellent discoveries, these honors invite surprise when only regarded dismissively. Forget outlandish reactions. What’s our reply? Deserving. These recipients are deserving.
BRAND OF THE YEAR: La Croix LaCroix is about as far from an overnight success as anything we’ve ever recognized as brand of the year, but its romance with consumers doesn’t seem to be letting up at all. The selection recognizes both the long climb the brand has made over the past decade and the people who brought it there. But it’s also to point out how well the brand has sustained momentum with a public that seems to regularly shift between trends. In fact, we say it’s time to admit that LaCroix is the brand that lit the fuse for the
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unsweetened, flavored sparkling water explosion. Its combination of flavor, cool design, consumer outreach, and simple accessibility – that most underrated of attributes – is what has turned it into the leader of the pack. The fact that other companies spend so much time chasing LaCroix, paying it the compliment of imitation while not quite matching its winning formula, shows just how powerfully influential it has become – and should help us all to recognize how much it deserves to be our brand of the year.
PERSON OF THE YEAR: Todd Berardi, Founder/President, Hiball It’s hard not to like Todd Berardi. Good-humored, enthusiastic, and firmly individualistic, people root for him. But charisma can only get you so far – the reason Todd Berardi is BevNET’s person of the year for 2017 is that he’s showed an admirable knack for making the hard decision, for never exceeding his own grasp, and for demonstrating incredible perseverance while never selling out the core principles of HiBall: organic sourcing, great design, great taste, good times. For years, he kept the company an inch wide and a mile deep, guidance that’s often cited but rarely followed. That doesn’t mean that Todd has just been conservatively sticking to his knitting – he took the brand into and out of categories like protein and coconut water to see what fit, but he was never afraid to kill something that didn’t make the cut. Todd took a risk about 18 months ago, spending significantly to increase his
approach to marketing and to grow a deeper national sales force – but even before the results of that spend could be fully realized, Anheuser Busch InBev swept in. The purchase of HiBall, a comparatively tiny brand, by such a giant beer company, doesn’t mean it’s about to expand overnight into a threat to Monster or Coke. But the fact is that the big company brass recognized what Todd and his core team – aka Alyssa and Dan – have managed to do over this 12 year trip: keep up the quality, never stop trying things, never over-promise, and always deliver a really good time, be it in a bottle, in a can, or in person. Todd Berardi is BevNET’s 2017 person of the year because we knew him when, we know him now, we know how it happened, and we all know why. It’s a good feeling to be able to recognize that, and to have it inspire the rest of us.
BEST PACKAGING DESIGN: HEYDAY Cold-Brewed Coffee With a “less is more” approach to branding, Heyday Coffee has developed a nostalgic aesthetic for a product in an emerging market. Relying on clean type and bold colors, the brand jumps off the shelf with an instantly identifiable style. By using a different dominant color for each flavor, all four SKUs are quickly distinguishable from one another, yet they remain unified with the iconic ‘circle H flag’ and only the most important descriptors in Heyday’s standard red and orange palette. By ignoring overused adjectives, statements, and clutter on the front panel, the result is an eye-catching package that is all about the brand. 59
RISING STAR: La Colombe Powered by dynamic growth in sales of its innovative Draft Latte products, La Colombe has been a standout performer within the surging RTD coffee category. Led by charismatic co-founder and CEO Todd Carmichael, the Philadelphia-based premium coffee company embarked upon a highly ambitious distribution strategy in 2017, adding tens of thousands of new points of sale, including national placement at Wegmans, Whole Foods, Target and Trader Joe’s. The retail expansion synched with the opening of a new 55,000 sq. ft. production facility in Western Michigan, a plant capable of producing 250 million cans annually. Meanwhile, La Colombe’s innovation pipeline yielded several impressive new Draft Latte flavors, including outstanding seasonal varieties Pumpkin Spice Latte and Peppermint Mocha.
RISING STAR: Brew Dr. Kombucha After more than a decade of steady, incremental growth, 2017 was the year in which Brew Dr. Kombucha ascended to elite status within this ever-expanding beverage category. Drawing from parent company Townshend Tea’s expertise in ingredients and craft production, the Portland, Ore.-based brand has created a range of brews with appeal to both hardcore kombucha enthusiasts and newcomers alike. During the past year, the company made major strides forward in sales and distribution outside of its home base in the Pacific Northwest, landing placements at Target and Costco stores on the West Coast as well as having its Clear Mind flavor picked up nationally at Trader Joe’s. After doubling sales to nearly $12 million in 2016, Brew Dr. is poised to build upon its captivating blend of delicious product and engaging brand identity.
RISING STAR: Humm Kombucha Since its inception, Humm’s approach to kombucha has been focused on bringing new consumers into the category with inviting flavors and irreverent branding. But despite the brand’s easygoing vibe, everything the Bend, Ore.-based company did in 2017 underscored the seriousness of its ambition to be accessible across all regions, retail channels and demographics. After becoming only the third kombucha brand to be carried nationally at Target in late 2016, Humm followed up by pushing further ahead this year, raising over $8 million from Velocity Made Good (VMG) Partners and announcing the construction of a new 40,000 sq. ft. East Coast brewery in Roanoke, Va. set to go online in 2019. With strong momentum behind the brand, Humm looks primed to go from strength to strength in the months and years ahead. 60 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
RISING STAR: Juice Served Here* Juice Served Here continues to impress as it steadily expands beyond its home base and toward a national presence. The cold-pressed juice company, which began in 2012 as a Los Angeles-based brick-and-mortar chain of juice bars, has already established a strong beachhead in Southern California, but now, via a robust innovation pipeline, has emerged as a fastgrowing player in the packaged super-premium juice category. An anchor brand in the refrigerated juice set at Sprouts and several regions of Whole Foods, Juice Served Here has driven new retail placement with a range of functional juice shots, tonics and lemonades. The new products have bolstered its foray into retailers along the East Coast as it simultaneously increases grocery and on-premise distribution in California. *(Editor’s Note:Yeah, we know. Shortly after winning the award, Juice Served Here moved from Rising Star to Black Hole. It happens with awards sometimes.We award on innovation, on originality, on market impact, on a variety of factors – and sometimes what we award, the consumer doesn’t, sometimes brands run out of money, and sometimes, things just get too difficult. Not every Rising Star can shine forever, and some just don’t shine for that long, at all.)
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BEST MARKETING CAMPAIGN: Soylent “Soy Route” Developing a brand with a niche target consumer base can be bountiful, so long as you have a full understanding of who they are and where they hang. Soylent did, burrowing right into the ‘Deep Web.’ The Silicon Valley-ishness of this meal replacement company managed to raise our eyebrows initially, but they won big this year with their core audience of techies when they launched “Soy Route,” a promotional online marketplace hosted on the darknet, an anonymous section of the internet mostly known for nefarious activity. With a tongue-in-cheek reference to The Silk Road, Soylent sold limited edition flavors and branded collectibles that could be purchased using - natch! - Bitcoin. Designed with firm Wieden+Kennedy, Soy Route was only accessible via the special Tor web browser and went largely unheard of among the mainstream consumers Soylent is now targeting with its launch into retail. But that was the point: the site was a smash hit among its web-savvy subscribers on Reddit and word quickly spread throughout the tech world, the exact base Soylent wants to hold on to as it pivots toward the meatspace-based, RTD conventional retail world. Innovative, edgy, and funny, Soy Route proved Soylent’s loyalty to its loyalists.
BEST NEW PRODUCT: Soylent Cafe Chai Soylent is a function-forward meal replacement beverage first and foremost, which is part of the reason we were so impressed with the balanced flavors in the Cafe Chai variety. The chai spice is well integrated and helps smooth out the aftertaste left behind from the artificial sweeteners, making this a step forward for the line in terms of taste profile. Beyond the liquid, Soylent’s clean label design and eye-catching square bottle give the brand an added level of sophistication.
BEST NEW PRODUCT: CideRoad Spritzel CideRoad is paving a new thoroughfare for the growing switchel category with its low-calorie, sparkling Spritzel. Taking the traditional water/vinegar/maple syrup blend and carbonating it expands use occasions and creates a refreshing new experience for the classic mix. With growing demand for lower calorie, better-for-you carbonated offerings to replace traditional soda brands, Spritzel is definitely an on-trend expression, one made even more impactful by its snazzy slim can package.
BEST NEW PRODUCT: Humm Kombucha Hopped Grapefruit Humm’s hot streak of seasonal flavors continued this summer with the release of Hopped Grapefruit. While the citrus flavors give it the feel of a bright summer drink, that doesn’t quite do justice to the complex interplay of sweet and bitter notes, courtesy of Cascadia and Citra hops, that creates something altogether unique and refreshing in any season. From the liquid to the playful illustration on the bottle’s label, Humm’s execution on this product is a triumph.
BEST NEW PRODUCT: Rise Brewing Co. Nitro Cold Brew Relatively new to the scene, cold brew coffee brand Rise has nevertheless created one of the best tasting nitro cold brews we’ve encountered. The brand uses only sustainably sourced Peruvian coffee beans and nitrogen gas, but the end result is bold and incredibly smooth, with a natural sweetness and creaminess. Add in extra points for standout branding, and we expect more good things from Rise in the years to come.
BEST NEW PRODUCT: Alta Palla Sparkling Water Just as the brand did when introducing its Italian-style sparkling juice line, Alta Palla put its own unique style on an established category in launching its Sparkling Waters line at Expo West this year. Made with organic fruit flavors and presented in stylish 16 oz. cans, the four-SKU, zero-calorie unsweetened line made for a natural extension of the Alta Palla brand as it continues to build out its craft beverage offerings. 62 BEVNET MAGAZINE – JANUARY/FEBRUARY 2018
BEST NEW PRODUCT: GT’s Kombucha 2017 Seasonal Flavors GT’s Kombucha’s seasonal varieties, Sharing Gratitude and Liberty, each showcase the brand’s impressive ability to innovate with craft-quality products. Each release has legs that could easily carry it beyond just being a seasonal flavor. They’re extremely gulpable and will appeal to mainstream-oriented consumers, an indication of the way that GT’s team has continued to refine and develop its skills: this product is light years from the vinegary origins of the category. The packaging on these seasonals reinforces the quality of the liquid: both use painted-on designs that give the products an artisanal and sleek look.
BEST NEW PRODUCT: Bonafide Provisions Drinkable Veggies Bonafide Provisions Drinkable Veggies, a drinkable marriage of vegetable juice and bone broth, is a union that might just create greater potential than either concept does on its own. The USDA Organic certified products contain chicken broth at the base of each savory flavor, along with vegetables, salt, spices, and vinegar (apple cider vinegar and white vinegar). The five flavor varieties are more savory and flavorful than either bone broth or drinkable soup. Meanwhile, Bonafide has created something that looks and feels like a super premium product, with graphics that present meaningful visual appeal thanks to the clean arrangement on the label and the use of a single accent color for each product.
BEST NEW PRODUCT: Bizzy Coffee Shots Finding the right balance of potent caffeination and smoothness in a coffee shot is a tricky task, and it’s one of the reasons we loved this three-SKU line from Bizzy. Even while packing 130-150mg of caffeine per 2 oz. shot, the cold brew coffee flavors (Black, Vanilla, Caramel) are fully expressed, while the sharp and energetic package design injects some much needed style into the small format category.
BEST NEW PRODUCT: La Colombe Draft Latte Chai By extending the brand’s Draft Latte line to include the traditional spiced tea, La Colombe has created the best ready-to-drink chai we’ve ever tasted. The product is rich and creamy, spiced up by turmeric, ginger, cinnamon, cloves, and pepper. The product’s sweet blend of honey and sugar perfectly complements the tea and spices at its core, while the nitro does its work by adding a frothy layer of foam and a silky smooth body. This texture, which adds a new dimension to the experience of drinking chai, is really why we want to keep drinking this product again and again.
BEST NEW PRODUCT: ARYA Turmeric Sparkling Water With the addition of curcumin, the key bioactive ingredient in turmeric, the Arya Sparkling Water line has brought something unique and appealing to a category crowded with me-too products. Through the infusion of the brand’s proprietary curcumin variety, which delivers the equivalent of one tablespoon of turmeric in each 12 oz. can, Arya gives an on-trend natural ingredient a platform to shine in the form of a refreshing, fruit flavored zero-calorie drink with mainstream appeal. 63
PROMO PARADE
INDUSTRY PROMOTIONS & EVENTS
Pepsi Goes To Bat with Yankees Rising Star Aaron Judge Pepsi announced its partnership with the Yankees’ rising star Aaron Judge – a member of the newest Yankees generation – the “Baby Bombers.” Outfielder Aaron Judge will serve as the face of Pepsi, championing the spirit and excitement of baseball, both on and off the field. The part-
nership serves as a continuation of PepsiCo’s longstanding historic partnerships within the sport, as well as its commitment to bring baseball fans memorable experiences through its beverage portfolio. Judge has had a historic first full season as a New York Yankee and has quickly become one of
the biggest stars in the league, with a rookie-record 52 home runs in 2017, among many other outstanding achievements. Judge will bring the excitement of this season to Yankees and Pepsi fans nationwide in the 2018 season and beyond. Pepsi continues to champion the game, as exemplified by
homages to players past and present, including this season’s recent activations with the team. For example, the “Caps off to the Yankees” program with Gary Sanchez allowed fans the opportunity to select a limited-edition Gary-inspired New York Yankees cap design created by Bronx artist Andre Trenier.
11th Annual Fernet-Branca Barback Games Champion Has Been Crowned The eleventh annual Fernet-Branca Barback Games have concluded and Luca Mistral Forgeois from Macao Trading Co. in New York City has claimed victory as the winner of the national competition. The Fernet-Branca Barback Games features barbacks from across the U.S. battling through a series of rigorous challenges to crowds of cheering industry friends. The games consisted of a timed obstacle course with three parts: bottle relay, glassware bussing and a spill clean-up. In the final round, barbacks were challenged to tip counting after running through the course in an inflatable Zorb ball. Beginning in San Francisco in 2007, the Barback Games have grown to be one of the largest touring industry event properties reaching San Francisco, New York City, Chicago, Boston, and San Diego.
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OXiGEN Announces Partnership with FC Bayern Munich
FC Bayern Munich, one of the world’s most successful soccer teams, has announced OXiGEN as the club’s Official Functional Water & Recovery Tool Partner. The company’s groundbreaking oxygenated water and shot products provide natural increased stamina, mental clarity and faster recovery from exercise. The three-year partnership was kick-started during the team’s winter break training camp in Doha, which saw the players make use of OXiGEN as they undertook
an intensive training program ahead of the second half of the season. OXiGEN products contain the proprietary ingredient, Activated Stabilized Oxygen (ASO). ASO is a highly stable O4 oxygen molecule, different from regular O2, which is compressed gas. When oxygen in the form of O4 is used in OXiGEN’s water and shot products, it doesn’t dissipate from the bottle when you open it. OXiGEN water contains 100 times more oxygen than regular water, while
OXiGEN shot has five times more oxygen than OXiGEN water. The products work almost immediately clearing lactic acid from the blood and boosting the body’s oxygen levels. As this happens, consumers experience faster recovery from exercise, enabling them to push harder and get back to training sooner. They also recover faster from oxygen deprivation during air travel and general fatigue. The partnership will focus on the Americas, Middle East and Asia.
Hydrive Partners With U.S. Soccer Champion Christen Press Hydrive Energy Water, a zero-calorie energy water, announced that Christen Press, a forward for the U.S. Women’s National Team, FIFA Women’s World Cup Champion and Chicago Red Stars’ National Women’s Soccer League Captain, has signed on to be a brand
ambassador for 2018. Press is one of the top female scorers in the sport and holds an alltime scoring record for goals at her alma mater, Stanford University. The retail-marketing program partnership will include displays and point of sale materials and culminate
with a sweepstakes in which fans can enter to win a private personalized soccer clinic with Press. Press will come to the winner’s hometown to host an event for them and their friends and also support the brand on social media throughout the year.
FIJI Water Takes One Sip Forward For Women Filmmakers At The American Film Institute
FIJI Water announced its commitment to the American Film Institute’s (AFI) Directing Workshop for Women (DWW) with FIJI’s new One Sip Forward Campaign. This initiative aims to raise up to $100,000 for the dynamic program’s mission to educate and mentor female filmmakers and increase the number of women working professionally as directors in film and television. The One Sip Forward Campaign kicked off at the 2018 Golden Globes awards ceremony. Traditionally, award show attendees have enjoyed drinking FIJI Water through the iconic FIJI Water Straw on the red carpet. As part of the campaign, FIJI Water made a donation to the AFI DWW for each award show attendee who was photographed sipping FIJI Water through the iconic FIJI Water Straw. Additionally, FIJI Water will provide a platform for AFI’s Directing Workshop for Women class of 2018 to help them raise funds for their projects through FIJI Water’s social media channels and website, as fundraising is a key component of their 2018 project. Fans can get involved in the One Sip Forward movement by posting a photo on social media sipping FIJI Water and using the hashtag #OneSipForward and tagging @FIJIWater. FIJI Water Straws are available for purchase online at the FIJI Water store where 100 percent of FIJI Water Straw sales during awards season will also go to the AFI Directing Workshop for Women. 65
PROMO PARADE Brew Dr. Kombucha Partners with Portland Trail Blazers to Introduce Rip City Happiness Kombucha, the First Ever Kombucha Collaboration with the NBA Portland-based Brew Dr. Kombucha, one of the fastest growing kombucha companies in the U.S., introduced its new Special Edition Rip City™ Happiness Kombucha bottle in collaboration with the Portland Trail Blazers.
From now through the end of the NBA season, the limitededition kombucha will be served in the Moda Center, and at retailers throughout Oregon and Southwest Washington. As a proud partner of the Portland Trail
Blazers, Brew Dr. Kombucha launches this collaboration as part of the Moda Center’s mission to support local food and beverage producers. Brew Dr. Kombucha has been making 100 percent raw, probiotic kombucha since 2008
using the same whole leaf teas and botanicals they serve at their Townshend’s teahouses. Every bottle of Brew Dr. is packed with naturally occurring live and active cultures, and produced entirely in-house, from leaf to bottle.
Second Annual Campari Red Diaries Short Film, ‘The Legend of Red Hand,’ is Unveiled Starring Zoe Saldana and Directed by Stefano Sollima Campari, Italy’s iconic bittersweet red aperitif, has launched the second annual Campari Red Diaries short film with the world premiere of “The Legend of Red Hand.” Continuing Campari’s ethos that “every cocktail tells a story,” this year’s film celebrates the bartender - here known as the Red Hand - and their never-ending journey to create the ultimate cocktail. The film can be viewed on Campari’s YouTube channel. Starring globallyrenowned actress Zoe Saldana, best known for her work in “Avatar” and the “Guardians of the Galaxy” franchise, and Italian actor Adriano Giannini, “The Legend of Red Hand” paints a thrilling mystery that takes viewers around the world in the pursuit of the perfect Campari cocktail. The short film is directed by Italy’s awardwinning Stefano Sollima. The short film opens
at dusk under the stunning Duomo Cathedral in Milan, the birthplace of Campari, where the charismatic photographer Mia Parc (a clever anagram of Campari, played by Zoe Saldana), begins her quest. We follow Mia on her pursuit to uncover the mysterious figure of “Red Hand,” the craftsman behind the best Campari cocktails ever known, through a tense and enthralling atmosphere. Mia’s dedication in the relentless search of the perfect cocktail leads her to uncover a world of “Red Hands,” exceptionally talented bartenders from across the globe fuelled with the passion and skill to create the best cocktails with Campari as the cornerstone. Mia embarks on a journey from Milan to New York, Buenos Aires, Rio De Janeiro, Berlin and London to meet six of the world’s best bartenders, each of whom
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showcase their own “Red Hands ” through cocktail creations - to inspire drinkers around the world with the versatility of Campari. Though Mia may be a fictional character, the bartenders she meets are real-life masters of their craft. In addition to brief appearances in “The Legend of Red Hand,” the six bartenders have created their own Campari signature cocktails and filmed video interviews discussing the inspiration behind their recipes and passion for mixology. These video interviews will also be available on Campari’s YouTube channel. Representing the U.S. is Leo Robitschek, Managing Partner of Food & Beverage at the iconic NoMad Hotel and Bar Director for Make it Nice Hospitality which includes New York institutions such as Eleven Madison Park, NoMad and NoMad Bar.
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