October 4, 2012
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Columns 4 FIRST DROP Searching for entrepreneurs? Look for communities. 6 PUBLISHERS TOAST Waiting for a game-breaker? Start a rookie. 28 GERRY’S INSIGHTS A watery storm blows over, revealing new growth.
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Departments 8 BEVSCAPE BUSINESS The deal market heats up 10 BEVSCAPE INNOVATION Red Bull’s innovation storm 12 NEW PRODUCTS Say hi to Spacho 16 CHANNEL CHECK A whole bunch of zeroes 22 BREWBOUND Craft brewers go bi-coastal 50 PROMO PARADE Pepsi MAX Rookie of the Week is back
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Features 26 ENHANCED WATERS Basic Business – High Alkalinity Waters Take Off (with brand news) 36 COVER STORY PACKAGING EVOLUTION Our Packaging Package looks at label design, starting a line from scratch, and some of our favorite packaging trends. 44 KIDS BEVERAGES Tidying Up – Wherever a Nick and Tuck can be made, things are getting cleaned up (with brand news)
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By Jeffrey Klineman
SEARCHING FOR ENTREPRENEURS? LOOK FOR COMMUNITIES In his book The Rise of the Creative Class, Richard Florida, an author and public intellectual (remember when there were so many public intellectuals! Milton Friedman, Christopher Hitchens and Dr. Spock? There are only like six of them left now, and, Cornel West and Tom Friedman are three of them) wrote about the function that cities have had in the rapid growth of an economy based on creativity. One of the arguments that Florida makes is that the notion of creativity does not just involve a musical tribute to organized labor or a dude with a Tumblr blog in the style of Picasso. It’s one that has strong ramifications on business and the entrepreneurial class. Inspired, intellectually active communities are often the ones that generate inspired ideas for business (think: San Francisco) – although, he added in a recent column in The Atlantic, cities that are closely tied to the financial industry aren’t necessarily the ones that are best able to support thriving arts economies (think: Hong Kong). So how does that relate to the beverage business? Not necessarily directly – after all, much of the beverage industry is outsourced to factories that manufacture either centrally or regionally and then redistribute their production to wider areas. But on an entrepreneurial level there is an interesting relationship. In communities like Brooklyn, N.Y., and Santa Monica, Calif. (and closer to home, in Somerville, Mass. and Burlington, Vt.), there are thriving colonies of entrepreneurial food and beverage producers, some of whom have created viable businesses that eventually emerged from smaller channels to become crossover hits. Even those companies with larger scale facilities are often keeping the creative side at home, working on branding and sales strategy centrally, proximate to their creative ‘hood.
But those aren’t the only areas for success, particularly when it comes to consumer products. We find that there are plenty of products coming from strongly agricultural areas like dairies and farms. Old beverage hand Greg Steltenpohl recently started up a brand new juice project for Califia Farms in California’s Central Valley, while I also was the proud recipient of a “Farm to Bottle” alcoholic’s starter kit from Bone Spirits, which is a small producer in Smithville, Texas. So it would seem that proximity to sourcing is also a way of stimulating creativity for food and beverage entrepreneurs. Certainly there are many cases of restaurateurs growing up “on the farm” and deciding to take their backgrounds in a new, but related direction. The reason I was thinking about this is that my last trip to Natural Products Expo East in Baltimore showed the gathering to function as a kind of magnet for creative food and beverage enterprises in the mid-Atlantic region. Not only were the established companies there, but also a lot of just-getting started entrepreneurs who weren’t buying tables but were walking the floor, networking, showing exciting ideas that weren’t yet ready to move beyond a small, local circle. When we hold a BevNET Live in New York or Santa Monica, we see a similar local weighting – yes, people come to an event near them because it’s more logical than spending an arm and a leg on travel, but there’s also something about having an opportunity that’s local that can lay bare a thriving group. I recently spoke with Doug Rauch, the former President of Trader Joe’s, who told me that when he was bringing that company to the East Coast, he looked for neighborhood locations not by income, but by educational level, as the places to site new stores. There is a thriving demand in
areas where better-educated consumers live to try new products and different flavors, Rauch told me, and with Trader Joe’s’ focus on new, trendy, and global flavors, when he found those high grade point average locations, the stores succeeded. And we are all familiar with the local foraging programs at forward thinking retailers like Whole Foods, as well. The point isn’t so much that one should look at specific neighborhoods or agricultural communities to determine where to find the next big hit. The point is that where there’s one, there’s usually more than one. Communities are like that.
IMAGE ©2007 JOSHUA FRANZOS
4 BEVNET MAGAZINE OCTOBER 2012
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MAGAZINE
By Barry J. Nathanson
www.bevnet.com/magazine
Barry J. Nathanson PUBLISHER
WAITING FOR A GAME-BREAKER? START A ROOKIE
bnathanson@bevnet.com
Jeffrey Klineman EDITOR-IN-CHIEF jklineman@bevnet.com
Ray Latif ASSISTANT EDITOR rlatif@bevnet.com
SALES John McKenna DIRECTOR OF SALES jmckenna@bevnet.com
Adam Stern SENIOR ACCOUNT SPECIALIST astern@bevnet.com
Jeff Hyde ACCOUNT SPECIALIST
Fall is far and away my favorite time of year. There is nothing as scintillating and refreshing as the spectacular colors, the crisp air, wearing sweaters again, and finally getting away from the stifling summer. Mind you, while I might hate summer and its oppressive heat on a personal level, I know its importance and impact professionally on the beverage industry, so it gets a small pass. Still, the convergence of the start of the baseball playoffs, football kicking into high gear on both college and professional levels, and basketball and hockey can bring a smile to my face. Fall is also the time of year that I receive more calls from retailers, distributors, and potential investors than the rest of the year combined. Over the years, wearing my sales hat, I have preached of the importance of the sell-in planning cycle. Just read any letter I put out to present and potential advertisers to verify that. While the planning process now goes on over all 12 months of the year, with adjustments and revisits along the way to portfolios, sets and truck bays, the heaviest amount of reconsideration still happens from Mid-September through the end of the year. It is crucial to be included and to receive authorizations. You know where you stand in planning your businesses and what you need to do to accomplish your goals. Hence, the phone calls. Everyone wants to know about the next great thing. No one wants to miss out on the latest and greatest. They seek my advice on what categories will be emerging and which brands they should look out for and invest in. It is not a simple task. Just
go onto our BevNET site every day and see the hundreds of brands trying to break through the clutter. How do you determine what to take on? Retailers have only so much space, and sadly stick too much to their conservative shelf sets. Previously, they would have a new product strategy built into their plans. Judging from my observations in store, I don’t see much of that anymore. Over the years there have been obvious recommendations as to what will emerge as the next winners. The water category and energy drinks stood out above the rest. Craft beers, enhanced waters, and functional drinks have garnered attention, success, and space. There has also been a strong resurgence of the boutique CSDs. Lately, however, there don’t seem to be any categories raising hopes and excitement, especially on a large scale. I’m a big believer in the potential of products in the areas of relaxation, recovery, and protein. I believe that single function products are brands I can support. If a brand that promises nail, skin and hair generation works, that would be great. There are dozens of similar brands with innovative claims that we post on our site all the time. But no one can break out without a chance. In lieu of any proven and guaranteed categories and brands coming out there, take a chance on some of these brands that tickle your fancy and give your customers something to think about and sample. Become more of a risk taker in a marketplace that is risk adverse. Beverages are in a lull, waiting for the next great thing. If it arrives soon, terrific. But until then, take a chance on some exciting new entries.
jhyde@bevnet.com
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BEVSCAPE BUSINESS
The latest news on the brands you sell
Deal Time 1: Emil Takes a SIPP
Deal Time 2: Cell-Nique Shells Out
Apparently, a sip of the beverage business isn’t going to satisfy the team at Greenwich, Conn.-based Emil Capital Partners. The private equity company, which manages investments for the family office of a large German private label manufacturer, has made its third beverage investment in less than a year, adding fledgling premium soda brand SIPP to a group that also includes Cheribundi and Balance Water. Sipp, which debuted at the Natural Products Expo East show in October, 2010, is expanding its three-flavor line to include two more, Berry Rhubard and Lemon Flower. The brand has minimalist logos and 12 oz. glass bottle packaging, and is sweetened with agave nectar to keep calories down. The investment was for an undisclosed amount; it was the first significant financing round for the self-styled “eco beverage,” which was begun by a Pennsylvania mixologist named Beth Parentice.
The Healthy Brands Collective Corp. has acquired Living Harvest Foods, a hemp products company that makes a leading brand of hemp milk, Tempt. Living Harvest is the fourth acquisition by Healthy Brands Collective, which is an acquisition-oriented company formed by Cell-Nique founders Dan and Donna Ratner. The company also owns hibiscus soda brand Ooba, foodallergy sensitive baking company Cherrybrook Kitchen and snack food company Yumnuts. Living Harvest had nearly $5 million in annual sales when it was selected as number 777 in the Forbes 1000; the company boosts Healthy Brands Collective revenues to nearly $10 million. The acquisition company announced plans to go public in 2010 but has not done so yet — it has more deals in process and is in the middle of its “quiet period” before a late 2012 or early 2013 IPO. Cell-Nique was introduced by the Ratners in 2006 after an earlier career in health care investment. The company announced in March that it was forming Healthy Brands Collective as a corporate entity to acquire health-oriented CPG companies that had similar routes to market and potential sales and distribution synergies. Silverwood Partners represented Living Harvest in the transaction, making it the fourth beverage investment the company has shepherded in 2012.
Deal Time 3: Runa Raises $3 Million Ecuadorian energy blend Runa received a little stimulation itself recently in the form of a $3 million round of financing from a variety of investors, which closed in late August. The round of financing is intended to help the company expand its marketing and sales operation, as well as to help the company establish a second factory in Ecuador for the processing of Guayusa, the plant that offers the tea-like beverage its flavor, character, and caffeine lift. “We’re doing expansion on the West Coast, trying to build out New York and New England some, and investing in more marketing,” MacCombie told BevNET. “From an infrastructure point of view, we’re probably approaching capacity right now. A new factory allows us to keep growing.” Most of the investment came through a group of angels including the Swiss social investment fund responsAbility and adman Richard Kirshenbaum, who is expected to help the company’s branding push as well. The company currently has 12 employees in the U.S. and 35 in Ecuador.
Deal Time 4: KeVita Ka-Ching! Sparkling probiotic drink KeVita has closed a round of financing. The brand is touted as a less-vinegary but still probiotic beverage co-founded by nutritional consultant Chakra Earthsong Levy and winemaker Bill Moses. The eight-flavor line has both caffeinated and decaffeinated versions that involve blending a probiotic culture with a base of coconut water, tea, or fruit. The company debuted at Natural Products Expo West in 2010 with a head of steam, quickly gaining Whole Foods approvals. Silverwood Partners shepherded the deal. No telling the amount invested although Greenwich firm KarpReilly shoots for placements of $10-$75 million, according to company information. One of the fund’s co-founders, Allan Karp, is joining the KeVita board of directors, as is Silverwood advisor Brad Barnhorn.
CORRECTION: The July 26 issue of BevNET Magazine featured new product information on VIDA Tequila that was outdated. The briefing on VIDA should have indicated that the company had created a newly redesigned bottle for the product in September across its existing Anejo, Blanco and Reposado varieties. VIDA also recently launched in Washington D.C. and Maryland. 8 BEVNET MAGAZINE OCTOBER 2012
Bloomberg Ban Passes On Sept. 13, New York City’s Board of Health approved the so-called “Bloomberg Ban” on the sale of large containers of sugary drinks in on-premise retail locations. The ten-member panel approved the proposal, which cited sugary drinks as a leading cause of obesity, by a vote of eight to zero, with one abstention and one vacant seat on the board. According to the Wall Street Journal, New York City will prohibit the on-premise sale of sugar sweetened drinks that have more than 25 calories per 8 oz. serving in containers larger than 16 ounces, beginning March 12, 2013. The ban, which excludes diet drinks, drinks with half of their calories from dairy or dairy substitutes, and 100 percent juices, affects a vast number of retailers in NYC, including restaurants, movie theaters, and stadiums. The city will begin imposing fines for violators of the ban starting in mid-June. Reaction from the industry was swift. New Yorkers for Beverage Choices – a group backed by the American Beverage Association as well as restaurant industry lobbying groups – immediately lambasted the “rubber-stamped” decision. “The fix was in from the beginning, and the Mayor’s handpicked board followed their orders by passing this discriminatory ban; but it has not passed with the support of New Yorkers,” said Liz Berman, the chairwoman of New Yorkers for Beverage Choices. “It’s sad that the board wants to limit
our choices. We are smart enough to make our own decisions about what to eat and drink.” Meanwhile, the ABA and the National Restaurant Association issued joint and separate statements decrying the ban. Other key industry figures weighing in included Honest Tea co-founder Barry Nalebuff, Industry aside, consumer health advocates and academics had mixed views. Michael Jacobson, the executive director for the Center for Science and the Public Interest, praised the Board of Health’s decision. Jacobson stated that “it is the responsibility of city and state health departments to prevent disease” and “to make a dent in expensive and debilitating conditions such as obesity, diabetes, heart disease, and other health problems, it makes perfect sense to act to discourage and reduce soda consumption.” “I hope that New York’s action emboldens other health departments and the U.S. Food and Drug Administration to limit serving sizes and use other measures to reduce consumption,” said Jacobson. However, Brian Wansink and David R. Just, co-directors of the Cornell University Center for Behavioral Economics in Child Nutrition, fiercely disagree with Jacobson. Wansink and Just lambasted the ban as “ineffective’” and one that “poisons the water” for better ideas.
OCTOBER 2012 BEVNET MAGAZINE 9
BEVSCAPE INNOVATION
Product development & marketing news
Name Change: Bai Takes a Number Sharpening its focus on growing trends of health and wellness, Bai Brands has quietly phased out its original line of coffee fruit-infused drinks in favor of its five-calorie Bai5 line. According to Bai Brands founder Ben Weiss, the company ceased production of the original line “about three months ago,” and has set sights on careful expansion of the Bai5 brand with a goal of national distribution by the first quarter of 2014. “Bai5 and its positioning are so on-trend right now, it made the other line obsolete,” said Weiss. Weiss said that “the writing was on the wall” in June when the company launched new distribution in New York City and completed its roll-out of all original Bai flavors to Bai5. At that point, Weiss felt that the company would be challenged to find shelf space for both lines, particularly in the grocery channel where the brand has its deepest presence. Weiss said that Bai’s distributors were enthusiastic about the decision to discontinue the full calorie line and that the transition has been an easy one for the company. However, he noted that while Bai enjoyed “tremendous
VPO” in grocery stores, the company was attempting to figure out a effective convenience store strategy for the brand. Since June, Bai has racked up some key wins with new retail authorizations in Gelson’s, which operates 17 supermarkets in Southern California and Stew Leonard’s, a family-owned chain of supermarkets with locations in Connecticut and New York. Bai has also recently made a deeper push into California having signed a deal with Santa Barbara-based Pacific Beverage Company earlier this month. The company is also represented throughout Southern California by Haralambos Beverage Co. as well as Dr Pepper Snapple Group in metro New York and New Jersey and counts premium grocer Wegman’s and Ralph’s as its top retailers. To buffer its expansion, Weiss said that Bai would begin to lean heavily on former Vitaminwater marketing chief Rohan Oza, who is an investor and advisor in the company. Oza is “really getting involved” with new marketing initiatives and will attempt to draft a team of key influencers to engage new consumers.
BevNET Live Update Several key speakers have been named for the upcoming BevNET Live event in Santa Monica, Calif. on Dec. 3 and 4. Case studies and talks will be provided by Kevin McClafferty, CEO of Marley Beverage Corp., Kevin Klock, CEO of Talking Rain Beverage Co., Benjamin Lee of CircleUp and Nick Shore, MTV’s Senior Vice President of Strategic Insights and Research, among others. Selection is also ongoing for the next edition of the New Beverage Showdown. Early Registration tickets are available through Oct. 17. BevNET Live is a two-day forum for beverage entrepreneurs, suppliers, distributors, retailers and investors to gather, speak, exchange ideas through 10 BEVNET MAGAZINE OCTOBER 2012
interactive panels and lectures, and enhance their marketing and product development strategies through our Beverage School. Attendees can tap the expertise of investment professionals who can help groom them to attract money, business owners with inspiring success stories, and the BevNET.com community, which has spent a decade dedicating itself to careful reporting on the fast-moving beverage industry.
Red Bull’s Innovation Blizzard
It’s not so much been a long time coming as it is a long way for them to come, but Red Bull finally announced that it was going to move three flavored line extensions from overseas into U.S. markets as part of its push at NACS. The company will debut cranberry, lime and blueberry flavors – called Red Edition, Silver Edition and Blue Edition – in March, 2013 as single 8.4 oz. cans and 4-packs that will be line-priced with other Red Bull SKUs. Between the new Red Bull Editions products and the Red Bull Total Zero addition earlier this year, it’s been a veritable blizzard of innovation from the company, which has long had a reputation for staying the course in terms of new product development. The idea behind bringing the flavored products – already available in Austria, France and other European countries – to the U.S. is primarily to continue growing the category, according to Red Bull’s marketing chief, Amy Taylor. “We are still really focused at Red Bull on growing the base,” Taylor told BevNET. “Taste remains a barrier to entry to the category, so we’re trying to lower that. In terms of perception and reality it’s good to have extra options.” The introduction of the flavors may have taken a long time compared to products that debut with multiple varieties and sizes, but the slow-and-steady approach is one that Red Bull has followed for years. It’s hard to believe in a category expected to reach nearly $12 billion by 2016, but for Red Bull, the notion of the category reaching maturity is one that is far off. “We have a very small but loyal user base vs. the rest of beverage,” Taylor said. “Maturation is not within sight right now. I think we’re in our adolescence.”
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NEW PRODUCTS
The newest options for cooler and shelf
Water WAT-AAH!, a premium line of functional water aimed at kids and teens, continues its partnership with New Orleans Saints wide receiver Marques Colston and Louisianabased Rouses Supermarket to launch WATAAH! #12, a limited edition bottle created to benefit AMIkids, a non-profit organization dedicated to helping transform the lives of our community’s kids through education, physical activity, leadership, and personal growth. The limited edition bottle features New Orleans’ symbolic black and gold colors and WAT-AAH!’s boy logo wearing a #12 jersey. The bottle contains vapor-distilled water with electrolytes – designed for kids who are physically active and involved in sports. WAT-AAH! #12 contains no sugar or sweeteners. WAT-AAH! #12 has a suggested retail price of $1.39 and is sold exclusively at Rouses Supermarkets throughout Louisiana and Mississippi. (212) 627-2630
CSDs The PoP Shoppe has introduced a line of canned sodas. Designed to complement The PoP Shoppe’s iconic glass bottles, the retrocool can line includes four additions to the PoP Shoppe’s flavor lineup: Psychadelic Strawberry, Big Time Banana, Omazing Orange n’ Cream and Got the Blues Raspberry. The cans are also available in four of The PoP Shoppe’s classic flavors: Lime Ricky, Radical Root Beer, Groovin’ Grape and Crazy Cream Soda. The new line has a suggested retail price of $1.39 for a 355 mL can and $3.99 for a 4-pack for and is distributed in high-profile grocery and convenience chains throughout Canada. For more information, please call (513) 410-0430. Fever-Tree has added Naturally Light Ginger Beer and Sparkling Lemon to its internationally recognized portfolio. At 60 calories per serving, Fever-Tree Naturally Light Ginger Beer contains 42 percent fewer calories than the original by sweetening the drink with natural fruit juice instead of cane sugar. The product features the same highquality ginger used in Fever-Tree’s signature Ginger Beer (fresh ginger root sourced from the Ivory Coast and Cochin, India). FeverTree Sparkling Lemon is a highly carbonated lemonade that adds a versatile complement to cocktails calling for an effervescent citrus tang. By blending real lemons, soft spring water and sfumatrice extracts of lemon from Sicily, Fever-Tree Sparkling Lemon has a fresh, zesty 12 BEVNET MAGAZINE OCTOBER 2012
aroma with a natural sweetness and a crisp, clean finish, according to the company. FeverTree Naturally Light Ginger Beer is available in a 500 mL bottle and has a suggested retail price of $2.99. Fever-Tree Sparkling Lemon is sold in 4-pack of 200 mL bottles for a suggested retail price of $5.99. Both mixers, distributed nationally, are available at select bars, restaurants and retail outlets, as well as online through Amazon.com. For more information, please call (800) 646-6965. MINTA is a new carbonated, mint-flavored soda. Based on the famous European drink of mixing sparkling water and mint syrup, MINTA is available in two varieties: Original, made with all-natural sugar; and Diet, which is sugar-free and contains five calories. The drinks are packaged in 12 oz. cans, 12 oz. custom PET bottles and 355 mL custom glass bottles. The soda will be sold in convenience and grocery stores across the United States, beginning in Los Angeles, San Francisco, Las Vegas, Chicago, New York and Miami. MINTA has a suggested retail price of $1.49 per unit. For more information, please call (877) 646-8287.
Energy Drinks Goddess Energy Incorporated has launched FLIRT, an energy drink with no calories, sugar, fat, sodium, or preservatives. Designed and tested with assistance from nutritionists, doctors, and professional athletes, FLIRT is a lightly carbonated beverage with the punch of an energy drink but without the negative side effects of harsh stimulants, according to the company. FLIRT’s green tea-infused proprietary formula contains eight B-Complex vitamins, vitamin C, amino acids, ginseng, gingko, and Hoodia, an appetite suppressant. The product is distributed at all Harris Teeter stores, spanning from Florida to Washington D.C., and has a suggested retail price of for a 12 oz. can. For more information, please call (704) 953-1731. Monster Beverage Corp. has launched two new varieties to its line of energy drinks. Modeled after a “Cuba Libre” cocktail, Monster’s Cuba Lima has a lime flavored cola as its base flavor. The product is enhanced with functional ingredients, including caffeine, taurine, B vitamins, amino acids, guarana, and ginseng. Zero Ultra is Monster’s zero sugar and zero calorie formulation which also contains a lighter flavor than other diet drinks from the company. The beverage is sweetened
PA I D A D V E R T I S E M E N T
with erythritol and sucralose and contains a functional energy mix of B vitamins, taurine, ginseng, amino acids, caffeine, and gaurana. Both products are packaged in a 16 oz. can and are distributed nationally for a suggested retail price of $1.99-2.29. For more information, please call (800) 426-7367.
Juice FreshForward Beverages has launched SPACHO, a gazpacho-inspired vegetable juice. Inspired by an authentic Andalusian gazpacho recipe, SPACHO is made with Italian tomatoes, cucumbers, bell peppers, extra virgin olive oil and sherry wine vinegar, and seasoned with garlic, pepper, onion, cumin and sea salt. SPACHO is all-natural, made with 100 percent vegetable juice and comes packaged in 10 oz. PET bottle. The product will be distributed along the East Coast and has a suggested retail price of $2.99. For more information, please call (305)718-4148. The Campbell Soup Company has extended its line of V8 100% vegetable juices with the addition of two new varieties: V8 100% Vegetable Juice Hint of Lime and V8 100% Vegetable Juice Hint of Black Pepper. Hint of Lime adds just a touch of lime, and Hint of Black Pepper includes a dash of black pepper. Both of these new varieties provide two full servings of vegetables in each 8 oz. glass, just like all V8 100% vegetable juices. The new products are located in the juice aisle of grocery stores nationwide for a suggested retail price of $2.99 for a 46 oz. bottle. For more information, please call (856) 968-5891. BAI Brands, LLC has introduced bai5 Limu Lemonade. The 5-calorie lemonade is made with all-natural lemon juice, infused with coffeefruit extract, and sweetened with organic stevia and all-natural erythritol. The drink is Kosher, vegan, gluten- and soy-free, and has a suggested retail price of $2.19-2.29 for an 18 oz. bottle. bai5 beverages are available online at Amazon.com, at leading retailers throughout the U.S. and at premium stores and supermarkets along the East and West Coasts. For more information, please call (609) 586-0500.
Choline. Schmoline. The time has come for the truth concerning choline and brain metabolism. People seem to think all choline sources are the same. That is, they think all choline is effective in elevating acetylcholine – the vital neurotransmitter responsible for cognition skills and muscle engagement. The fact is, published scientific studies show that typical oral choline sources have no effect on cerebral choline metabolite or acetylcholine formation. AlphaSize® Glyceryl Phosphoryl Choline (A-GPC) is a natural source of choline that has been shown in numerous published studies to quickly and significantly boost brain acetylcholine levels. Just look around and observe the use of AlphaSize® A-GPC in myriad supplements, functional drinks, shots, and foods. It is a safe, GRAS ingredient that is science proven.
Functional Drinks Pearl Aqua LLC has introduced SEKSI Pearl Infused Beauty. SEKSI is a low-calorie, lightly carbonated, pomegranate flavored beverage. The product is produced with Pearl OCTOBER 2012 BEVNET MAGAZINE 13
Powder, an ingredient that contains a range of minerals, including calcium, zinc and magnesium, as well as 17 amino acids. Packaged in 8.4 oz. recyclable aluminum cans, the beverage has 15 calories per serving. SEKSI has a suggested retail price of $2.98 per 8.4 oz. can and is sold online at drinkpearlaqua.com and select retailers in the Chicago area. For more information, please call (312) 243-8806. The Chill Group, Inc., makers of JUST CHILL, a natural calming beverage, add two new flavors to their existing tropical line: RIO BERRY (a pomegranate-berry flavor) and CARIBBEAN (a “mojito” flavor). The Chill Group aims to launch the new flavors throughout natural-upscale food stores including Whole Foods, Bristol Farms, Gelson’s, Nugget markets, and others retailers in Southern California by the end of 2012. The drinks have a suggested retail price of $1.99 per 8.4-oz can. For more information, please call (855) 55-CHILL REBOOTizer, an all-natural Swiss-formulated product that delivers antioxidant support and detox assistance, is debuting a new package design at Whole Foods Market stores as the brand expands to four new regions across the US. REBOOTizer is approved for distribution in five Whole Foods Market regions, including the Southern Pacific, Northern California, Northern Atlantic, Mid-Atlantic, and Rocky Mountain. The product has a suggested retail price of $18.99 for a 3-pack and $35.99 for a 6-pack. For more information, please call (888) 732-6685. Zen’d is an all-natural anti-stress drink that is scientifically validated to lower stress and anxiety and improve mental focus. Key ingredients in the shot include kava, lemon balm, passion flower, green tea extract, vitamin D, stevia, cocoa, vanilla, and valerian. Zen’d is sold online at zen-d.com and has a suggested retail price of $6.95 for a 2.5 oz. shot and $79.99 for a 12-pack. For more information, please call (800) 920-2114. Lifeway has launched two new flavors to its line of kefir drinks. Lifeway Coconut-Chia kefir is rich in omega-3 fatty acids, protein, fiber, calcium, and antioxidants. Lifeway Gingerbread kefir features flavors of ginger, nutmeg and clove and contains 140 calories and two grams of fat per 8 oz. serving. Both flavors are all-natural, low-fat, 99 percent 14 BEVNET MAGAZINE OCTOBER 2012
lactose-free, gluten-free and contain 12 probiotic cultures. The products are distributed nationally and have a suggested retail price of $4.29 for a 32 oz. bottle. For more information, please call (877) 281-3874. Maverick Brands LLC, makers of Coco Libre Organic coconut water, has launched Coco Libre Organic Coconut Water + Chia. The new line of drinks is produced with Coco Libre Organic Coconut Water and organic chia, and comes in four flavors: Raspberry Lemonade, Strawberry Kiwi, Blackberry Pomegranate, and Cherry Apple. The products are certified organic, gluten-free, dairy-free, cholesterol-free, vegan, and made with no GMOs. Coco Libre Organic Coconut Water + Chia is sold at Whole Foods stores in the grocer’s North Atlantic, Northeast, Midwest, Florida, and South regions for a suggested retail price of $3.49. For more information, please call (805) 284-6636. The Coca-Cola Co., Inc. has introduced Dasani Drops, a liquid flavor enhancer. The product is packaged in a squeezable 1.9 oz. bottle with a flip-top cap and provides 32 servings per container. Dasani Drops come in four flavors: Strawberry Kiwi, Pink Lemonade, Pineapple Coconut and Mixed Berry. The line will be available in a wide variety of retail locations across the country where Dasani bottled water is sold, for a suggested retail price of $3.99 for a 1.9 oz. bottle. For more information, please call (404) 676-4120.
Wine VOGA Italia has introduced Dolce Rosso to its extensive collection. The newly-released red combines a supple blend of Italian Syrah and Merlot. Dolce Rosso is packaged in VOGA Italia’s award-winning cylindrical bottle with resealable cap. Dolce Rosso is available nationwide and has a suggested retail price of $10.99. For more information, please call (212) 584-4279.
Spirits CA50 is a new line of spirits that celebrates the California lifestyle. Made with five-time distilled premium American vodka, CA50 is 50 proof and comes in three flavors: Lemon Squeeze, Dragon Passion, and Berry Thriller. The product is distributed throughout California and each 750 mL bottle has a suggested retail price of $19.99. For more information, please call (760) 402-9748.
PA I D A D V E R T I S E M E N T
Glenfiddich has launched Glenfiddich Malt Master’s Edition. The whisky encapsulates the fifth-generation, family-owned distillery’s innovative casking techniques. It is the first expression to adopt the double maturation process, delivering a whisky that is complex in taste and flavor imparted from Sherry and Refill Bourbon casks. Glenfiddich Malt Master’s Edition is 43 percent ABV and is available at select retailers for a suggested retail price of $79.99 for a 750 mL bottle. For more information, please call (212) 299-9440. Shellback Rum is produced at the centuryold West Indies Rum Distillery on the island of Barbados, the birthplace of rum. Produced in two expressions, Silver and Spiced, the spirit is a blend of continuous and pot still components featuring neutral, heavy and aged light rum. Shellback Silver features floral overtones layered with the suggestion of vanilla and tropical fruit, followed by a smooth, clean finish. Shellback Spiced has no added sugar and features a combination of all-natural spices from around the world. Shellback Rum is available in 50 mL, 200 mL, 375 ml, 750 mL and 1 L sizes at select retail outlets across the U.S. The suggested retail price for a 750 mL bottle is $17. For more information, please call (855) 363-9463. Beam Inc. and Courvoisier have launched Courvoisier Gold, a spirit crafted with a blend of Moscato wine from the South of France and Courvoisier’s signature cognac. The product features intense notes of Moscato grapes, pear, peach and florals with a touch of orange blossom. The 36 proof liquid is packaged in Courvoisier’s iconic Josephine bottle. Courvoisier Gold is available nationwide and a 750 mL bottle has a suggested retail price of $24.99. For more information, please call (847) 948-8888. The Balvenie has launched The Balvenie 17 Year Old DoubleWood to commemorate Malt Master David Stewart’s fiftieth anniversary with the company. To craft the spirit, Stewart enlisted the technique of consecutive maturation in two different types of cask, a process often referred to as ‘cask finishing’. The process results in flavors of distinctive rich vanilla oak, honeyed sweetness and layers of spices. The Balvenie 17 Year Old DoubleWood is available throughout the U.S. and has a suggested retail price of $129.99. For more information, please call (212) 299-9440.
AlphaSize® A-GPC is the active choline source that works. • Tasteless, water soluble & stable: Excellent performance in all applications. • Boosts mental energy, concentration & focus: The brain is the true gatekeeper of the body’s energy. • Improves neurological function: Shown to speed reaction time & agility.
To learn more about AlphaSize® A-GPC, and how to add it to your nutritional supplements, functional foods, and beverages, contact Chemi Nutra – world leader in specialty nutraceuticals for healthy natural products. We would be pleased to share the convincing science on AlphaSize® A-GPC vs. choline with you.
Toll Free 866.907.0400 • www.cheminutra.com
© 2012 Chemi Nutra
OCTOBER 2012 BEVNET MAGAZINE 15
CHANNEL CHECK
What’s hot – and what’s not – in stores now
SPOTLIGHT CATEGORY
ENERGY DRINKS
Brand
Dollar Sales
Change vs. year earlier
Red Bull
$2,859,912,000
16.37%
52 Weeks through 9/9/2012
Monster
$1,604,729,000
15.64%
SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart.
Rockstar
$300,040,400
16.22%
Monster Rehab
$288,297,300
333.17%
NOS
$246,783,300
10.47%
Java Monster
$228,404,900
24.55%
Monster Mega
$224,028,300
21.05%
AMP
$175,857,100
7.33%
Rockstar Recovery
$137,423,600
14.77%
Rockstar Sugar Free
$137,011,200
1.89%
Full Throttle
$100,124,500
-0.71%
Red Bull Total Zero
$88,855,240
N/A
Rockstar Punched
$70,011,450
8.01%
Monster Khaos
$66,435,550
-3.40%
Rockstar Zero Carb
$65,413,600
-1.36%
Monster Nitrous
$56,748,360
-18.32%
Xyience Xenergy
$42,805,370
21.70%
Monster Assault
$42,430,180
-7.02%
AMP Boost
$40,408,050
N/A
AMP Overdrive
$36,860,560
-42.01%
Flull Throttle Blue Demon
$35,604,120
-7.80%
Monster Absolute Zero
$29,230,920
1,093.24
Rockstar Juiced
$25,456,360
-32.96%
Rockstar 2X
$24,218,500
42.00%
Rockstar Roasted
$23,730,900
3.80%
Monster Rehab
$18,848,770
N/A
AMP Elevate
$17,188,420
-40.58%
VPX Redline
$15,092,420
22.90%
AMP Focus
$14,857,550
N/A
AMP Traction
$14,261,670
-41.25%
Not bad for a couple of Zeroes: Red Bull Total Zero is showing $88 million in sales in tracked IRI channels in about FIVE MONTHS. Monster Absolute Zero has been on the market for a slightly longer period of time, and is already up to about $29 million. It would appear there had been some heretofore unrealized demand with regard to sugar-free energy drinks, wouldn’t it? Apparently, some of the share is coming out of Rockstar Zero Carb, which slid back a bit. Another Zero calorie brand, Xyience, seems unfazed, continuing strong and steady growth, while Amp slid as cans are swapped out for restaging. All in all, though, energy is chugging along – up to $7.2 billion sans Walmart and a few other key chains. Can anyone say $10 billion category?
TOPLINE CATEGORY VOLUME 52 WEEKS THROUGH 9/9/2012
16 BEVNET MAGAZINE OCTOBER 2012
SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart.
BEER
$24,957,984,000
6.35%
BOTTLED JUICES
$5,051,409,000
-2.35%
BOTTLED WATER
$8,279,218,000
5.50%
ENERGY DRINKS
$7,298,642,000
17.93%
SPORTS DRINKS
$4,327,440,000
5.52%
TEA/COFFEE
$3,459,926,000
7.06%
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Look for brands with Sustamine™ in their formulations
Sustamine™ is a trademark of KYOWA HAKKO BIO CO., LTD. Copyright ©2012 KYOWA HAKKO U.S.A., INC. All Rights Reserved.
SANTA MONICA
W I N T E R 2012
ENERGY SHOTS
BEVERAGE ENTREPRENEUR & INNOVATION CONFERENCE
December 3 & 4, 2012 Loews Santa Monica Beach Hotel Santa Monica, CA
Featuring the BevNET EXPO on December 3 for more information visit www.bevnet.com/live SPONSORS & PARTNERS
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venturing & emerging brands
bevnetlive-quarterpage.indd 1
HOT! Tweaker
Brand
Dollar Sales
Change vs. year earlier
5 Hour Energy
$996,201,000
4.60%
Stacker 2 6 Hour Power
$22,225,850
-20.18%
Worx
$14,357,260
61.86%
Private Label
$11,936,550
-2.80%
E6
$5,322,943
50.14%
Stacker 2
$4,008,332
-12.93%
VPX Redline Power Rush
$3,539,447
17.90%
Spike Double Shot
$3,206,084
-5.39%
Vital 4U Screamin Energy
$3,081,547
0.87%
Tweaker
$2,946,357
159.73%
SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 9/9/12
NOT! Stacker 2 6 Hour Power
CAPPUCCINNO
HOT! Marleys One Drop
Brand
Dollar Sales
Frappuccino
$587,450,900
10.87%
Doubleshot
$286,529,600
13.76%
Frappuccino Light
$20,863,780
5.64%
Starbucks Doubleshot
$16,661,060
N/A
Seattles Best
$10,503,090
-31.09%
Private Label
$9,292,600
15.29%
$5,416,633
44.37%
Doubleshot Light
$4,693,573
2.58%
Starbucks Doubleshot Light
$3,671,825
10/3/12 2:13 PM Illy Issimo
Marleys One Drop
$983,931
SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 9/9/12
DOMESTIC BEER Brand
Change vs. year earlier
-15.86% 1,095.43% NOT! Seattles Best
HOT! Michelob Ultra Light Dollar Sales
Change vs. year earlier
Bud Light
$5,459,146,000
3.22%
Budweiser
$2,031,608,000
-2.21%
Coors Light
$2,021,777,000
5.10%
Miller Lite
$1,714,944,000
3.59%
November 29, 2012
Natural Light
$1,111,567,000
1.61%
Busch Light
$733,568,000
0.19%
Paradise Point Resort & Spa San Diego, CA
Busch
$670,914,900
-2.28%
Michelob Ultra Light
$584,385,300
19.45%
Miller High Life
$491,973,000
-0.86%
Keystone Light
$470,597,500
-3.23%
For More Information and Early Registration Pricing Visit www.brewbound.com/conference
18 BEVNET MAGAZINE OCTOBER 2012
SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 9/9/12
NOT! Keystone Light
TEA Brand
HOT! Diet Lipton Dollar Sales
Change vs. year earlier
AriZona
$607,832,000
-1.07%
Lipton Brisk
$280,683,400
-1.46%
Lipton
$246,008,700
-6.61%
Snapple
$183,682,000
-1.36%
AriZona Arnold Palmer
$169,442,100
22.62%
Diet Snapple
$163,774,700
12.08%
Lipton Pureleaf
$149,729,600
-3.02%
Gold Peak
$106,080,300
24.24%
Nestea
$91,086,380
-10.86%
Diet Lipton
$88,256,150
28.24%
SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 9/9/12
SPARKLING WATER Brand
NOT! Nestea
HOT! Sparkling Ice Dollar Sales
Change vs. year earlier
Glaceau Smart Water
$189,626,200
39.24%
Private Label
$111,480,100
5.93%
Perrier
$97,740,930
14.80%
San Pellegrino
$89,836,610
21.45%
Sparkling Ice
$82,088,820
335.91%
La Croix
$52,582,730
37.56%
Poland Spring
$23,797,880
14.24%
Topo Chico
$21,463,180
6.75%
Arrowhead
$19,460,630
22.07%
Cascade Ice
$17,916,420
34.73%
SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 9/9/12
IMPORT BEER Brand
Corona
C
M
Y
CM
MY
CY
CMY
K
NOT! Private Label
HOT! Dos Equis XX Lager Especial Dollar Sales
Change vs. year earlier
$1,002,446,000
7.23%
Heineken
$595,493,300
4.98%
Modelo Especial
$398,111,700
27.13%
Corona Light
$171,221,600
3.62%
Dox Equis XX Lager Especial
$159,637,700
39.20%
Tecate
$154,121,400
0.52%
Stella Artois
$141,882,400
32.21%
Labatt Blue
$100,357,800
-12.38%
Labatt Blue Light
$99,612,860
-6.66%
Newcastle Brown Ale
$78,673,450
1.65%
SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 9/9/12
NOT! Labatt Blue
OCTOBER 2012 BEVNET MAGAZINE 19
By Gerry Khermouch
A WATERY STORM BLOWS OVER, REVEALING NEW GROWTH A few years ago, when high-end bottled water got slammed with the twin effects of a deep recession and an environmental backlash, many of us called it the perfect storm. A sector that was riding high suddenly was in an impossible situation: only fairly affluent consumers could afford those brands any more, and within that social stratum it suddenly had become unfashionable to be spotted carrying around plastic bottles containing water shipped from halfway around the world. At the New York soccer field where I spend a lot of time, fields that were littered with empty half-liters of Fiji Water after youth soccer games now displayed Dasani and Poland Spring empties. (Nope, I didn’t detect any signs, in my generally affluent nabe, that folks had returned to tap water.) So bottled water is a goner, right? To even find a bottle in your local store, you need to crouch down on your hands and knees and bat away the cobwebs to snag one off a dusty bottom shelf. Right? Of course not. Still, I’m surprised at how many of my contacts remain under the impression that bottled water is over. True, the cloud of recession hasn’t really lifted, even if the experts say we’re in a recovery. And we all still give lip service to the notion that it’s ridiculous to ship water thousands of miles when, in most parts of the country, what comes right out of the tap is fine. Still, as far as I can tell, quite a few high-end brands are having a good run these days. After a severe downsizing and some periods of intense price promotion, Fiji Water seems to be back on track. With a new management team at the helm, Voss Water has returned from crisis and broadened its presence, particularly at retail. European imports like San Pellegrino and Volvic seem to be doing well. Coca-Cola’s Smartwater brand continues to chug along, though
20 BEVNET MAGAZINE OCTOBER 2012
there have been some worrisome signs of increasing promotional activity. The team at Icelandic Glacial, which also had to weather a U-turn in strategy at its strategic ally, Anheuser-Busch, continued to bring in new capital and lay the groundwork for success. Such premium American brands as Mountain Valley Spring and Saratoga are holding their own. A new breed of unsweetened essence waters like Hint and Balance may finally be garnering traction. Mind you, I haven’t seen Fiji empties sprouting back onto the sidelines of my local soccer pitch, and don’t expect to. (Why did sweaty 9-year-olds need to consume Fiji with their orange slices in the first place?) But with many key brands growing and refining their strategies, it certainly seems – short of a double-dip recession – that the storm has blown over. Mind you, I’m talking about the high end of the segment, not the value end. Over there, more than a decade of relentless promotional battles among Coke, Pepsi and Nestle have sapped margins and price points to the vanishing point, and the acquisition by KO and PEP of their U.S. bottling systems greased the skids for the conversion of case-pack water into a direct-ship commodity that’s no longer worth the trouble of hoisting onto a bottler’s trucks. Even Evian, supported by what’s arguably a breakthrough global campaign (those babies!), seems stuck straddling the border between value and premium water, still adrift in an inattentive Coke distribution system. But let’s not talk about that sorry tier any more. By contrast, at the value-added end, the stage is set for some concerted brand building that should heighten those brands’ allure. The fundamentals of its business finally sorted out, Voss Water has brought in a gifted former Snapple marketing executive, Ken Gilbert, as its chief marketing officer to rev up consumer pull. Icelandic Glacial has upped its packaging game with a more elegant plastic bottle
that can better stand up to glass rivals, while embarking on an aspirational push dubbed “Source of an Epic Life.” And after muddling around for a few years, the Aquahydrate brand has brought in former Fiji Water chief John Cochran, who’s rethought the brand’s premise, devised a striking new look and is ready finally to put into place a marketing program that might effectively explain to consumers why highly alkaline water is a good thing to put in their bodies. At some point, I figure even Pepsi may start to take more of an interest in this lucrative business, now that it (like Coke) has finally gotten religion on the folly of fighting marginsapping promo wars. (Coke has Smartwater and Dr Pepper Snapple is allied with Fiji in some markets, but Pepsi’s sole high-end play is the negligible cause-marketed brand Ethos.) Whether Pepsi creates its own high-end brand or allies itself with a potential winner developed outside the company, it could add to the vitality that is re-entering the segment. So what about that green backlash? I suspect many consumers have moved on, having more pressing matters on their mind and failing to see why a healthful alternative to soda deserves to be demonized. Most of the white-tablecloth restaurants I’ve been in haven’t, it turns out, tossed out their bottled waters. To the extent the marketers augment their messaging about the unique properties of their brands, in contrast to the tap water brands that stand for nothing more than convenience, they will help counteract the problem. As recycling programs broaden, they will remove another negative tarring the category. Overall, then, I think it’s time for retailers and distributors to look at high-end water with fresh eyes. There’s health there, there’s margin there, and soon there will be more storytelling there too. Longtime beverage-watcher Gerry Khermouch is executive editor of Beverage Business Insights, a twice-weekly e-newsletter covering the nonalcoholic beverage sector.
All Flavors Zero Calorie
Craft brewers have had a great time in the past decade as the public’s excitement over their products has led to a massive increase in demand. But with that growth has come the need for more capacity. For many early stage companies, that has meant adding additional fermentation tanks, purchasing larger brewhouses, even expanding into larger production facilities. For some larger players, however, capacity constraints aren’t the only issue. They’re also faced with building distribution in states that are on the other side of the continent, and that means they have begun to establish bi-coastal manufacturing facilities. And with that comes its own set of challenges, opportunities, and risks. In the past year, no fewer than five craft brewers have announced plans to expand their capacity by building a second facility far from their home base. Two of them - Chico, Calif.-based Sierra Nevada and Fort Collins, Colo.-based New Belgium Brewing – have grown into the country’s second and third largest craft brewers, respectively. Their size and relatively broad distribution have led both companies to elect to expand in new facilities in the Asheville, N.C. area.
22 BEVNET MAGAZINE OCTOBER 2012
While both Sierra and New Belgium are on a pace that, assuming even modest year-over-year growth, could have them in the neighborhood of 1 million barrels apiece by 2015, the other three companies that have announced plans for separate production facilities are smaller by an order of magnitude: In April, the country’s ninth-largest craft brewer, Petaluma, Calif.-based Lagunitas Brewing, which produced 165,000 barrels last year, announced plans to build a manufacturing facility and brewhouse in Chicago. Oskar Blues Brewery, a top-30 craft brewer based in Longmont, Colo., is on pace to produce 90,000 barrels in 2012 and is planning to hit the East Coast in Brevard, N.C. Even San Diego–based Green Flash Brewing, which produced just under 24,000 barrels last year, caught many in the industry by surprise recently, announcing plans to invest $12 million into opening a second, East Coast brewing facility by 2015. What the five brewers don’t share in size, they do share in the form of a single strategic concern: the conviction that building a new facility, however expensive, will ultimately achieve more savings than the ongoing costs of trucking their products a long distance.
“We started thinking about building a brewery that was the exact size as the one we have now,” said Dale Katechis, the founder of Oskar Blues. “Why don’t we do that on the east coast where we can pick up on the advantages of the shipping costs? For us, it means $2 million in savings over 18 months.” Added Kim Jordan, the co-founder and CEO of New Belgium, which has increased its sales by more than 300,000 barrels in recent years, “We always told ourselves that at some point, when we need another brewery, it would be good in terms of shipping logistics and our environmental footprint, to build a second brewing facility along the eastern seaboard.” A Question of Scale Logistics aside, there are some differences between the companies that highlight the dilemma of growing before demand forces such a move. While Sierra Nevada and New Belgium are making the move, at least in part, because they are running out of space, at Green Flash the company is trying to build to meet potential demand, not actual. Right now, the company is on pace to reach just 65 percent of its current capacity by the end of 2013 – and the
product isn’t on back order in any market. Nevertheless, Green Flash founder and CEO Mike Hinkley explained why he isn’t letting the sizable financial investment limit what he sees as a potential growth opportunity. Hinkley’s vision is to produce smaller, 50-barrel batches of his brew on both coasts, which he says leaves the door open for continued innovation while at the same time allowing his company to deliver fresher beer, faster. “We sell about 40 percent of our beer on the East Coast,” he said. “The idea of being able to deliver beer in two days in between Miami and Boston is very attractive to us.” Attractive as it may seem, right now many industry observers will be watching Green Flash and letting it serve as a test case in bi-coastal manufacturing for smaller brewers. It’s a model that Jordan says her company toyed with in the past, even at one point considering a network of smaller breweries scattered across the U.S., before eventually deciding the model was too expensive and risky. “Efficiency is one thing I worry about for smaller breweries,” she said. “If you are building 150,000 barrels of capacity, that is not nearly as financially efficient as 750,000 barrels of capacity.” J.B. Shireman, vice president of First Beverage Group – who is also the former head of distribution strategy for New Belgium – said that while he wasn’t aware of any current breweries the size of Green Flash with bi-coastal locations, that doesn’t mean it can’t be done, especially if it cuts shipping costs enough. “If you have aspirations to be a brand with a national footprint and you happen to be founded on one of the coasts, you are going to have the freight costs stacked against you,” he said. And Hinkley’s brand definitely travels. Only 15 percent of production actually stays in the San Diego market, and the company currently distributes in 38 states. That’s even more than the 30 states that New Belgium is in, although the Fat Tire maker has been notoriously deliberate in expanding its distribution footprint over its 20-year history. Still, New Belgium does have 30 times the production of Green Flash, meaning that it has to target more channels. “We are not as regional as most breweries,” Hinkley said. “We go to market in a
24 BEVNET MAGAZINE OCTOBER 2012
specific way, and it’s not our goal to be in every gas station.” A Gut Check on Culture Certainly, Hinkley’s attitude toward growing the brand – and even New Belgium’s, with its right-state, right-time approach – is similar to the quality-first ethos that has helped to fuel the craft boom in the first place. But that attitude toward growth also points to another potential challenge, which is that these companies’ cultures – the sense of place and attitude that has helped many of them create legitimate brand personalities – might be tough to export. After all, it’s not just a production facility, it’s an extension of the company. “In its rawest form, it’s a gut check,” Katechis said. “The decision is not solely based on money even though it is a business decision.” In the case of Oskar Blues, he said, the new location was as much about regional fit as it was financial. “We chose Brevard because it is a place I am willing to travel to,” Katechis said. “It would have made more sense to put the brewery in Pennsylvania, but our decisions aren’t always made on what makes the most sense profitwise.” Similarly, Lagunitas founder Tony Magee announced his own company’s considerable expansion – eventually he expects to be able to brew more than 1 million barrels between his first and second breweries – would take place in his hometown, Chicago. But aside from any fondness Magee might have for his hometown, there are also highly practical concerns – much of the beer produced there will be ticketed
for the East Coast, just like the beer made by Sierra, Oskar Blues, New Belgium and Green Flash. There’s risk, he said, but there’s also opportunity – something that those who remember the last craft beer boom, in the 1990s, should know might not always be there. “You can’t be in the world without being of the world,” Magee said. “If the world was to change and craft beer suddenly wasn’t as sexy as it is today, my brewery has a long glide path. I am setting myself up for the unknowable stuff.” Nevertheless, the question of whether it really will be the same brewery – or just another brewery owned by the same company – hangs heavy. Andy Thomas, the president of commercial operations for Craft Brew Alliance (CBA) said the biggest challenge a company faces when managing multiple brewery locations is continuity. CBA - whose brand portfolio includes Kona, Redhook and Widmer - operates four production breweries, in New Hampshire, Oregon, Washington, and Hawaii. “We struggle with it,” he said. “A large domestic brewer can be in a lot of different places and have the resources to remain the same in those places. But a smaller brewer has to work much harder to make sure that the brewing culture and the company culture stay the same.” That’s a risk, but it’s ultimately one that lies with the company owners, and as demand grows there are likely to be many more making the same decision. As to any doubters, Hinkley said, “I like to think that we conduct our business in a smart way. I’d like to think that this is the next step for us and we will prove that through our actions.”
BACK TO BASICS ALKALINITY
IS IN By Ray Latif
For many consumers, the word alkaline conjures up that old advertising campaign for Energizer batteries – remember the small mechanical bunny rabbit, batteries attached to its back, marching and pounding away at a bass drum? It kept going and going and going‌ It was the alkaline content in the batteries that Energizer attributed to the everlasting power of the toy rabbit, and today, some beverage marketers are claiming that alkaline-infused water will help humans keep going and going as well.
26 BEVNET MAGAZINE OCTOBER 2012
“People want [more] in their water now; they don’t want plain water. The question is, how close can you get to water without it being just water?”
Also referred to as “high pH” waters, alkaline waters come under the umbrella of the “Alkaline Diet” movement, one based on the theory that consumption of foods and beverages that have a low acid content – meaning a higher pH level – can neutralize acid in the bloodstream, boost metabolism and help individuals absorb nutrients more effectively. Alkaline waters are made by adding minerals such as silica, calcium, bicarbonate, magnesium and potassium to purified water, which has an average pH level of 7. The minerals ionize the water by increasing the presence of electrons, which raises its alkalinity and pH level to 8-10. While most alkaline waters are produced in this way, there are some natural sources of high alkaline water often derived from deep underground sources. Additionally, alkaline water is sometimes used interchangeably with the term electrolyzed water. The creation of electrolyzed water involves the addition of a small amount of dissolved sodium chloride to water and then exposing the liquid to low-voltage electric current, reducing its electro-negativity. Over the past few years, the alkaline water category, which has its roots in home-based water filtration and pH –boosting systems, has taken a small, but significant, foothold among fitness enthusiasts and consumers within the natural channel, particularly in Southern California. The region is an epicenter for new and evolving health and wellness trends, and a key area for beverage incubation and the development of natural beverage categories. Just as it has been the launching pad for high pressure processed (HPP) juices, kombucha, and coconut water, alkaline water compa-
28 BEVNET MAGAZINE OCTOBER 2012
nies are leaning on the Los Angeles as a springboard for national expansion. Yet the alkaline water segment faces a number of challenging issues, the most pressing of which appears to be consumer education. Despite an iPhone world of instantaneous knowledge, communicating the benefits of alkaline waters can be a clunky and confusing task, and manufacturers often rely on extensive narratives about the science behind alkaline waters, many of which have been denounced by doctors and other health experts as spineless and without merit. The concerns beg the question: are alkaline waters a legitimate contender or simply another trendy flash in the pan? It remains to be seen, but for certain, the category is benefitting from a confluence of continuing health and wellness trends. Arthur Flores, the co-founder and president of L.A. Distributing Co., which specializes in New Age and entrepreneurial beverage brands, said that the emergence of alkaline waters comes as consumers are increasingly seeking greater benefits from bottled water in the form of functionality and flavor, while at the same time growing more sensitive about sugar and caloric content. “People want [more] in their water now; they don’t want plain water,” Flores
said. “The question is, how close can you get to water without it being just water?” Indeed, it is a question that has plagued beverage marketers in recent years, and considering the clutter of new low-calorie and functional products, it’s easy for consumers to find themselves lost, or worse, disillusioned. Yet in the midst of a deluge of information about new natural trends and products, Flores said that most alkaline waters are quietly benefitting from word of mouth marketing and positive coverage of the category in health and fitness magazines. He noted that the consumers of the drinks are often individuals who are more conscious and knowledgeable about healthier lifestyles and that alkaline water companies are cultivating that demographic as their initial base of influencers. However, Flores noted that regardless of consumer education, alkaline waters are becoming more competitive among premium water brands from a price standpoint. The perceived sophistication of consuming a trendy water brand, while at a relatively affordable cost, is a powerful draw, Flores said. Alkaline brands are often $0.50-$1 less than their premium water counterparts, and Flores believes that the category will place even greater pressure on brands like Fiji and Evian, both of which have suffered from sluggish sales in recent years. One of the brands hoping to gain from a shift in premium water sales is AQUAhydrate, which recent underwent an extensive rebranding initiative. In preparation for the changing landscape, the company has refocused its attention away from a narrow set of elite athletes to “a broader swath of active, health-conscious consumers.” Now boasting a range of clinical trials that showcase not only the water’s high alkalinity, but also its electrolyte and
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mineral content, AQUAhydrate has adopted the tagline of “Hydrate, Balance, Perform” and plans to utilize its cadre of well-known investors, including Mark Wahlberg, Sean “P. Diddy” Combs, and grocery magnate Ron Burkle to promote the product and its benefits. With a new management team led by former Pabst Blue Ribbon and Fiji Water chief John Cochran, AQUAhydrate’s relaunch is beginning at the local level through smaller retailers and a heavy dose of field marketing. While Cochran told BevNET that AQUAhydrate was not ready for nationwide distribution or “monster retailers,” he said that the brand is currently distributed throughout major regions of influence including Southern California and New York, and plans to have most of the Midwest covered in the coming weeks. Cochran also stated that AQUAhydrate would attempt to penetrate markets in Florida and Texas over the next few months, possibly around the same time the company launches a new line extension of lightly sweetened, flavored waters. Similar to the package of benefits promoted by AQUAhydrate, NEO Water offers a trifecta of electrolytes, minerals and alkalinity, but focuses most of its branding efforts on its alkalinity and 9.5 pH level, which, along with Essentia Water and Alkazone (both claiming a 9.5 pH level), is one of the highest in the category. Unlike competitors, however, NEO guarantees its pH level as stable for two years, a unique point of differentiation that NEO founder and CEO Ben Behrouzi said is a clear and fundamental benefit for his company’s consumer base. “There’s a lot of alkaline companies out there that claim to have high pH’s, but the level is not stable, meaning that they’ll bottle at a 9.5 pH, but it won’t be 9.5 pH after 30 days.” Behrouzi said. “Ours is guaranteed two years 9.5 pH. A lot of the consumers that are buying alkaline water are folks that are at the core of this education and understanding.”
30 BEVNET MAGAZINE OCTOBER 2012
“We’ll find out that the majority of the category is a gimmick. There is a major difference between people that are manufacturing [alkaline water] and a natural alkaline source”
Despite claims to promote healthy living and lifestyles, there is an undercurrent of discontent among some in beverage industry who counter that because the alkaline content in most pH waters is infused - as opposed to a natural component of the water - the category has created a culture of inaccuracy and falsehood that will eventually lead to its downfall. Karim Mashouf is one of the individuals sounding the horn for reform and greater transparency. Mashouf is the founder and CEO of Eternal Beverages, a Northern California-based company that markets a line of naturally high alkaline spring waters derived from sources in New Zealand and the U.S. Mashouf cautions that as consumers become aware that that the majority of products in the segment are artificially infused with alkaline, consumers will begin to shun the category. “We’ll find out that the majority of the category is a gimmick,” Mashouf said. “There is a major difference between people that are manufacturing [alkaline water] and a natural alkaline source. For instance, watermelon is naturally alkaline; it has a high pH. It’s very different than pumping a bunch of food grade minerals and salts into filtered tap water.” Concerned about the appearance of what he calls the “pH Wars,” Mashouf has attempted to disassociate Eternal from the alkaline water
category. Moreover, Mashouf believes that because the pH level in food and beverages is inherently variable, alkaline water companies should be wary of including any pH number as part of their labeling – especially since that could raise the ire of government regulators. “We happen to be naturally alkaline, that is something we promote to our consumers, but this is not an ‘alkaline water.’” Mashouf said. It’s a premium artisanal water. I’m not going to put us in an alkaline category and get into the pH wars, where ‘my pH is bigger than your pH,’ because that’s not a war anybody’s going to win. There will always be someone that can manufacture a higher pH. [Companies] are putting out numbers and getting into a marketing scheme… promising a pH level on a label and on the front of a bottle. I don’t put a number on my bottle, because you cannot physically control the outcome of pH. It’s virtually impossible. And I don’t think the FDA is put up with this much longer.” Danny Stepper, the co-founder of brand incubator L.A. Libations, shares a similar opinion. Stepper, whose company represents Evian on the West Coast, wondered about the long-term viability of a health and wellness-focused category filled with what he called “unnatural” waters. “I do think it’s ironic that with the all the other trends of natural going on, there are these more unnatural waters where people are injecting things like electrolytes and other things into them,” Stepper said. “Eventually the consumer will probably figure that out, but right now they haven’t.”
BRAND NEWS
Enhanced Water
lished DSD distribution in New York, New England, Southern California and Michigan. Sparkling Ayala’s Herbal Water also won several prestigious awards this year, including Self Magazine’s and Prevention Magazine’s 2012 Healthy Food Awards.
H 10 O Vitamin Infused Waters are genderspecific enhanced beverages that contain no sugar, calories, or carbohydrates. The drinks are sold in a variety of regional grocery stores and supermarkets including Tops Friendly Markets, Big Y, Weis Markets, Food City Stores, Grand Union, and Piggly Wiggly. The brand is also distributed at over 350 independent markets, fitness clubs, tanning salons, and high-end delicatessens.
BLUEO4 is seeking new distributors to promote/distribute BLUEO4 Stabilized Oxygen Enhanced Water Beverage.
Lifespan Company Limited. Lifespan Spring Water is sourced from the Blue Mountains in Portland, Jamaica. The water contains a high level of natural alkalinity and has its pH is measured at 7.9. Lifespan’s bottles feature images of Olympic gold medalists Micheal Frater and Nesta Carter. Lifespan is currently distributed in Jamaica and the Caribbean by HD Hopwood a division of the Neal & Massey Group.
Mountain Valley Sparkling Water is now available at a number of Kroger store locations across the U.S. The company’s 1 L Sparkling Water can be found in the natural/ organic section of the supermarket chain. Mountain Valley Spring Water is naturally sodium-free with a 7.8 pH and high mineral content. The water is sourced from a protected spring that has been the origin of Mountain Valley Water since 1871.
Alkazone now produces a potassium and
Nika Water is now available throughout the West Coast and other select areas in the U.S. The water is distributed at all The Fresh Market locations.
electrolyte-enriched, high alkaline, 9.5 pH antioxidant water. Alkazone Water with Antioxidant is pure, de-ionized water enhanced with essential minerals including potassium, calcium, magnesium and selenium. The product is Certified Kosher by Star-K. Xiomega Chia Water is now distributed through UNFI and Nature’s Best. The product is all-natural, and contains no preservatives or artificial flavors. Alka Products. Alka Power is currently distributed through Natures Best and UNFI. The water is sold at a variety of retailers including Gelson’s, Whole Foods, Clarks Nutrition, and Mothers Markets. The company recently launched Alka Power Canned Emergency, a water with a 25 year shelf life. Victoria’s Kitchen Almond Water has gained distribution at Whole Foods Market in three regions: Northern California, Pacific Northwest and Mid-Atlantic. Almond Water has also expanded its relationship with Cost Plus World Market with a soft launch in 250 locations nationwide. Victoria’s Kitchen will introduce a new flavor in January 2013. Ayala’s Herbal Water. Sparkling Ayala’s Herbal Water has gained wide distribution since launching last year. Ayala has estab-
32 BEVNET MAGAZINE OCTOBER 2012
Wahta Springs is located in Muskoka, Ontario, atop the Precambrian Shield. Dotted with lakes and rocky outcrops, protected and undisturbed miles of woodlands encircle Wahta’s 30,000 square foot facility. The company continues to protect its surroundings with our environmentally safe systems. The water has a high alkalinity with a PH of 7.5-8. National Beverage Corp. LaCroix Spar-
kling Water has launched its ninth flavor: Peach Pear. 100 percent naturally flavored, LaCroix Sparkling Water is calorie-, sweetener- and sodium-free with no artificial ingredients. LaCroix does not contain caffeine and is gluten-free. LaCroix is manufactured locally in 13 plants throughout the U.S. to promote a lower carbon footprint. Maji water is now available at Toronto’s Pearson International Airport, Canada’s busiest airport. Maji has also taken initial steps towards national expansion by establishing new distribution in southern Ontario. ACTIVATE has recently reformulated its full line of beverages for a naturally enhanced
BRAND NEWS
Enhanced Water
flavor that includes electrolytes and a common blend of Vitamins A, B5, B12, C and E, along with other functional ingredients to support consumer needs. ACTIVATE has also enhanced its flavor profile to offer a more satisfying water option that combines performance and great taste. AquaNew’s Watt-Ahh is a new water based on a new patent pending process that reforms and polarizes water. Watt-Ahh is designed to stimulate the metabolism by dissolving metabolites in your blood to keep you healthy, energized, and to minimize the aging process. Qure Water, an alkaline bottled water, is
now sold at Sprouts Farmers Markets and Bristol Farms locations. Topo Chico participated as an official spon-
sor at the 2012 Lollapalooza music festival and is also sponsoring major events in October including Austin City Limits and the Austin Film Festival. AQUAhydrate has launched a complete rebranding campaign with new packaging, a new website, and an all-new 700 mL sporttop bottle. The brand seeks to broaden its focus from elite athletes to active, healthconscious consumers and everyday warriors. AQUAhydrate is an alkalized water with electrolytes that goes through a three-step proprietary process rigorously purifying, enhancing with electrolytes and then charging the water’s ionic structure to increase alkaline level to pH 9+. NEO Water, an ultra-purified and pH enhanced water with three active benefits of alkaline, electrolytes, and antioxidants, announced the addition of new distribution partners in 2012. The company has added the KeHe Tree of Life Group, United Natural Foods East and additional DSD distributors in three new states to serve new retailers across the country. Ganicwater has started a campaign in Germany to raise money for the Helping Hands Foundation. Ten cents of every bottle sold will be directly transferred to the foundation, which will build freshwater sources at schools
34 BEVNET MAGAZINE OCTOBER 2012
in Sri Lanka. Ganicwater is aiming to sell 100,000 bottles through the campaign. Aquation is a fluoride-free, xylitol-enhanced
bottled water with documented benefits that prevent and possibly reverse oral health problems associated with sugary drinks and diets. Aquation’s Sweet Tree Xylitol is non-GMO and sustainably derived from American Birch trees with a 90 percent lower carbon footprint than corncob xylitol. The infusion of xylitol and electrolytes into ultra-purified spring water also creates a uniquely crisp and refreshing flavor profile, according to the company. Basix Vitamin Water is formulated with six B-complex vitamins and contains no flavor, no sugars, no calories, and no preservatives or chemicals. Each 20 oz. bottle of basix provides 50 percent of the Recommended Daily Intake of B-complex vitamins. Dox Solutions. Developed by two practicing doctors, Dox Cardio Water is a flavored beverage that contains 125 mg of resveratrol. Every 16 oz. bottle of Dox Cardio Water harnesses the protective benefit of more than 50 glasses of red wine and gives your heart a powerful boost of potent antioxidants—the molecules that support heart health, increase endurance and improve cardio performance. Cardio Water is available in four flavors. Fix Brands. FIX is the first and only clini-
cally proven beverage to promote anti-aging benefits for hair, skin and nails, according to the company. FIX’s patented compound, ch-OSA, is clinically proven to activate the biological pathways that generate collagen. Talking Rain has introduced Crisp Apple
and Peach Nectarine flavors to its zerocalorie line of Sparkling ICE drinks. The new flavors will be available in November 2012. Additional flavors include: Orange Mango, Black Raspberry, Kiwi Strawberry, Lemon Lime, Pomegranate Blueberry, Pink Grapefruit, Coconut Pineapple and Lemonade. H2M Beverages. 989 On Demand is a new
enhanced water with nine vitamins, 84 minerals, and five electrolytes. The 100 percent natural ingredients are delivered via a pat-
ented vacuum-sealed twist cap to deliver the vitamins and minerals in their most potent form. 989 is available at convenience stores and select grocers. Mycell Technologies. Omega Infusion is a new enhanced drink that contains antioxidants, 100 mg of Omega-3, four B vitamins, and vitamins C and E. The drink is packaged in a 17 oz. plastic bottle and comes in four fruit flavors. AMAzon Beverage. AMAzon waters,
enhanced with functional extracts from the Amazon Rainforest, now contain 10 percent coconut water and a proprietary blend of vitamins. The line of drinks contain 10 calories per 16.9 oz. bottle. Karma Culture. Karma Wellness Water has
launched in 7-Eleven Canada with nationwide distribution. Karma is also expanding distribution in the U.S. from its base in the Northeast into the Southeast and Midwest.
OXYwater is packed with B vitamins, electrolytes, and the equivalent of three servings of fruit. It is also sugar-free, and contains no calories, carbohydrates, sodium, caffeine, artificial colors or flavors. New York Spring Water, Inc. Sales of
VBlast reached $1.5 million in 2011, an increase of more than 50 percent. The company expects to gain new distribution along the East and West coasts in 2013. WAT-AAH! WAT-AAH! has introduced its New Orleans Saints Marques Colston Limited Edition WAT-AAH! #12 bottle. All proceeds will benefit Louisiana based charity AMIkids and sold exclusively at Rouses Supermarket in Louisiana and Missippi. Along with its existing line of functional waters, WAT-AAH! #12 is an ultra-pure water with added electrolytes. WAT-AAH! is now sold in over 10,000 stores and school districts across the country, including Kroger, Shop Rite, Shaw’s, Bi-Lo and Whole Foods Market and many others.
OCTOBER 2012 BEVNET MAGAZINE 35
By Jeffrey Klineman
36 BEVNET MAGAZINE OCTOBER 2012
Here’s the issue: GNC is a well-known retailer, but the process of rolling a beverage brand licensed from GNC into other stores presented a bit of a design problem for Shadow Beverage and Snacks, the company that licensed the right to develop the drinks. To begin with, there’s the complexity – the company envisioned three kinds of products—an enhanced water, a sports drink, and a protein drink – covering both the average, aspirational grocery consumer and the highly involved athletic achiever.
WHAT’S NEW WITH PACKAGING? We might know what consumers want – according to a study by the research service Packaged Facts, they’re interested in easy open-and-close, ease of pouring and serving, and easy to hold. But we’re more interested in what we want -- more cutting edge package designs that are just waiting for the right product to drive them to the front of the shelf. Here are three that caught our eye:
In other words, two types of consumers, three kinds of drinks, and also a whole lot of competition – both from Gatorade and Powerade and also products like Muscle Milk, Vitaminwater, and many others. Sure, the nutrition products retailer has a strong heritage and reputation, which was one of the characteristics that made Shadow excited to work on the product development end, said Sam Jones, the company’s co-founder. But that reputation for functionality and performance had to be visualized on a packaging and design level to make the product work. According to Jones, a lot of the initial design process came through looking at the category parameters, trying to crack the code so that they could apply it to the new line. “We went through the design levels and looked at brands in the category high to low,” Jones said. One key idea was the incorporation of the colors black and white as part of the design scheme, with black indicating “Performance Level.” As for the bottle itself, with what would eventually turn out to be 17 varieties of the line, a standardized bottle was important. “The bottle itself was a challenge,” said McLean Design founder Ian McLean, who was brought on by Shadow to help create the line. “We wanted something that was contemporary and refined – just as carbonated
1. In ReBootizer, there’s a product that’s currently packaged in a small two-stage pouch that can allow products that need to eventually be combined for consumption to stay fresh while waiting for the use occasion. But it’s also a test-run for the shaker pack. “This kind of package is where beverage is going,” says Jack Brennan of GBS Growth Partners, which is working with the “Detox Shaker” company to get off the ground. The product is just one of many that he sees as being possible to package in the shaker pouch, which is combined when the user squeezes hard enough to break the seal separating the two sides of the packages, then combines the elements by shaking it. GBS is currently speaking with strategic innovation partners to try to determine the best route for further commercializing the package. 2. From small entrepreneurial enterprise to international packaging giant, we found that Tetra Pak has re-introduced its triangular-shaped Tetra-Classic Aseptic pack, a 150 mL carton that is being used for new kids’ beverage Mickey’s Slices. It’s available in sizes from 65 to 200 mL. Meanwhile, the organization is taking aim at the adult market with a play on the traditional carton format for multi-serve products, the Tetra Brik Aseptic Edge and Tetra Gemina Aseptic, both intended as juice and milk packaging aimed at singles and childless couples. Both offer high visual shelf impact while being easy to grip and pour -- an attractive feature for legions of aging baby boomers. They’re also offering clear manufacturing advantages – the Gemina is the first roll-fed gable-top package in the world, according to the manufacturer. 3. Finally, when it comes to packaging that tells a story, the Neuro bottle might have shape advantages, but we really liked this Bamboo beverage bottle from BevMarketing Group Company, Inc., that provides the shape of the iconic, scalloped wood while also offering the sturdiness of PET. The new 16 oz. bottle is available for waters, teas, and juices and could easily be adapted to high-end uses. Welcome to the rainforest.
38 BEVNET MAGAZINE OCTOBER 2012
beverages have migrated to sleeker shapes, we wanted something that was grippable – consistent with active sporting conventions of the brand. Something that was sleek and precise and engineered, one that would work with protein to both sides of the equation, from extreme to active. What we came up with is loosely the silhouette of a fit person.” Good package design doesn’t just have to appeal to the consumer, it has to make sense for the distributor and for the retailer – both to help the product get onto the shelf but also for it to get onto the shelf and tell the brand story in the right way. Color, again, helped satisfy those operational objectives, according to Jones. “We’re a young brand, but we’re complex,” he said. “If you’re an older brand, like Vitaminwater, they have 38 SKUs – it’s complex, but that’s okay. The one continuity piece, when you break down a DSD distributor or retailer, it’s your price point. And we’re lined by price point and by color in our XP (extreme performance) line, and in our Active line. That’s what helps them sort it out.” Still, getting the brand to the shelf and then having it fly off the shelf are the final test. Safeway has bought into the idea, incorporating end-cap displays through the fall, while recently large independent distributor Polar Beverages took on the line for its broad New England account portfolio. But the final judgment
40 BEVNET MAGAZINE OCTOBER 2012
goes to the consumer. That’s where real visual design cues become important, and where McLean really went to work – although he also decided that some things couldn’t be improved on as well, for example a brand name that implies very “positive baggage.” “You see GNC, and you see water, or sports drinks, you already know what you’re getting,” he said. “So just by announcing the GNC brand loud and proud casts that beneficial shadow across what we’re putting out there. Everything they need to know about GNC, their history of excellence in sports nutrition, that’s there already – just by putting it on the bottle. So we were already starting off way ahead.” But GNC has a down side as well – it’s got a laboratory feel, one that is associated with pills and powders as much as it is with refreshment. There, McLean decided to stay wonky, but with flair. Certainly one of the things we had to deal with was the overall semi-clinical nutritional visual personality,” he said. “If you were to say Snapple is a guy in a straw hat and a pair of shorts, we’re more likely to be in a lab coat. It’s just much more clinical than other kinds of healthy foods. So we wanted the entire product line to maintain that clinical personality as a point of differentiation.” To bring that out, the design team used the amount of coverage of the liquid inside the bottle as a kind of “level of efficacy” indicator. For an enhanced water product, says McLean, “we showed much more liquid, much less label – it’s more about flavor, unadulterated clarity, refreshment – it’s a refreshing beverage and you should see a lot of it. The more stuff that goes into the package, the more label there is.” Moving up to a protein-enhanced product, then, the brand comes in a full shrink-wrap – with the side benefit being the protection of the protein itself. “To us, it makes sense,” McLean said. “To the consumer, it makes sense. And from conception they were visualized as endcaps, as an aisle, because a design is only as good as its ability to do something beneficial at shelf. Clearly we work from a sense of what should it look like – how we came up with the label and the system – and then we also started building displays and visualizing how this would look to the consumer. They needed to feel like one big team, but with very identifiable parts of the team.” With the uniforms in place, it will be interesting to see how far the team can go.
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Packaging Innovation
THE BREW SIDE
While cold-activated cans are the talk of the premium beer world, on the more artisan craft side the label can often do the heavy lifting for selling the brand. Especially since most craft brewers don’t have much in the way of marketing or merchandising, the label has to do a lot of work on the shelf. So we turned to ILS, a digital label and package print firm that has worked with more than 90 craft brewers in the U.S. for some key trends taking place in labeling and packaging. Here’s what their director of marketing, Kathy Popovich, had to say: 1. Cool, iconic graphic designs are increasingly important The craft brewery brotherhood is clearly made up of creative, earthy, and not-afraid-to-be-original folks. One look down the craft beer aisle and this is very evident. There is no mimicry, only originality, for each of the beer brands – with graphics that really support the unique personality and flavor profile of the microbrews. The designs run the gamut from the ultra clean and simple to very ornate. 2. Pressure-sensitive labels are preferred to Cut/Stack paper labels and also pre-printed bottles The use of pressure-sensitive labels is becoming the application type of choice, in place of both cut-and-stack labels and/or preprinted bottles. A pressure-sensitive label has an adhesive backing that is covered with a release liner. When applied, the label applies smoothly and completely to the container at all points. On the other hand, a cut-and-stack label is adhered via a glue line at the end of the label, making it much more susceptible to degradation when refrigeration or ice is introduced. For ultimate performance, a film-based substrate with either a gloss or matte lamination is the best. Pre-printed bottles are problematic because of the cost of decoration and the risk of obsolescence. With screen print, each color involves the creation of a screen so you typically see a one or two-color graphic printed directly on the container. Once the container is decorated, if there is
42 BEVNET MAGAZINE OCTOBER 2012
a change – whether for regulatory or for marketing purposes – you now have the cost of the container and the decoration costs to absorb. Instead, we are seeing an increase in ultra-clear pressure-sensitive substrates that mimic a direct print look, with the advantage of going to 4C process if desired. 3. Specialty materials and finishes are on the rise The substrate portfolios available now from the major material suppliers are plentiful. Some of the materials we see trending now are natural white felt, metallic films and papers, and even white and clear films with matte or gloss laminations. We always recommend considering all the elements that will impact the product decoration -- container shape and color, substrates, finishes – as well as embossing, hot stamps, varnishes, and laminations when beginning the design phase to maximize impact. 4. Even cans are getting shrink sleeves A recent trend gaining traction is the use of printed shrink sleeves for cans in place of pre-printed cans. The lead times and volumes required for direct print cans are prohibitive for this market, but digitally printed shrink sleeves which are applied over blank stock cans are a great solution. 5. Digital printing is everywhere The label and package print industry has long been served by flexographic printing. However, longer run lengths and mediocre graphic reproduction characterize this method. With the advent of digital printing, specifically the HP Indigo print platform, this has changed. Brewers are making use of it from product launch all the way through complete commercialization. Because the platform doesn’t use printing plates, minimums are a thing of the past, and print quality is superior. As well, it allows for the creation of iconic graphics for each version that speak to the unique flavor profile of that specific beer. We have seen this type of graphic flexibility allow brewers to easily launch limited edition and seasonal offerings.
WAT-AAH.COM
WAT-AAH! DOODLE.
OCTOBER 2012 BEVNET MAGAZINE 43
created by Jimmy S. age 16
TIDY PROFITS By making Kids’ Beverages greener and healthier, companies hope to earn a premium. By Jeffrey Klineman
Kids
are used to hearing they need to clean up their rooms. Now drinks aimed at kids are cleaning up their ingredients. It’s part of a broader cleanup of American lifestyles. Particularly in the CPG arena, there’s a growing awareness that the earlier the life stage, the easier it is to create a natural or organic foods consumer. And the kids themselves are aware, as well. Molly Kridel, a partner in Kid Kritics, which certifies products as both good for kids as well as “kid approved” through focus group testing, told BevNET that their young tasters themselves are more aware of what’s healthy and what isn’t – and will reject branded products that aren’t. 44 BEVNET MAGAZINE OCTOBER 2012
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“The kids are looking to be healthier,” Kridel said. “As we teach kids what foods feed which body parts, they ask for them. And they’ll lecture us if we aren’t providing healthier products.” Of course, that awareness is part of a larger product trend that involves providing healthy foods – or foods perceived as healthier alternatives – earlier. Baby food has become the hottest product in the organics, for example, but to grow with consumers, companies like Plum organics have begun to move their products forward in time, to keep the brand part of kids’ lives as they leave the crib and start walking around. In a similar vein, organic, natural, or just plain healthier beverages aimed at kids have also begun to take a hard look at the various life cycle stages of their potential customers. InZone Brands, for example, has divided its product lines into toddler, kindergarten, and grade school kids; Honest is looking to find a product for a slightly older grade schooler – one who may be outgrowing the pouch drink in Honest Kids. Apple & Eve might have a dependable license in Sesame Street characters, but it has also long reached out to older kids, as have carbonated juice products like The Switch. Wat-aah seems to be aiming for the “’tween” set as well, marketing a bottled functional water behind an 11 year-old named Sammi. As it is, there’s been a massive growth in food and beverage products aimed at kids, according to a study by Mintel’s Packaged Facts research arm, and it’s expected to continue to grow up to 40 percent by 2015. And following larger trends, a lot of that growth will come from products that have been tidied up to have better sourcing, fewer calories, and better, more natural ingredients. For some product lines, that has meant reducing calories through artificial sweeteners, while for others it’s been through improving on the sweeteners that they have, or else fortifying whatever is included in the product. The pressures on beverage companies to provide more offerings for children are also being influenced by changes in their old marketing strategies. Under the Alliance for a Healthy Generation initiative from the Clinton Foundation, signed by beverage firms in 2009, big soda companies agreed to limit the kinds of products they sell in schools. Meanwhile, mar-
46 BEVNET MAGAZINE OCTOBER 2012
keters are attempting to advertise only juices, milk and water during television programs geared toward kids. The increased scrutiny means that even products like Honest Kids are trying to make sure they present an even more compelling argument to parents. Already a product line that was closing in on onethird of the revenues of the Honest brand, according to founder Seth Goldman, Honest Kids replaced sugar with white grape juice in its formulations – this after it had famously trumpeted its lack of High Fructose Corn Syrup, a move it made in the face of owner the Coca-Cola Co., Inc.
“There weren’t any data points,” Goldman said of the decision to move to an all-fruit juice formulation. “It’s instinctive. And it makes it an even tighter product.” And while juice is a more expensive sweetener than sugar, let alone HFCS, by tightening the product, a company is able to create a premium category where one had previously been nonexistent. “The whole category has been defined, for a long time, by what might be on special,” Goldman said. “Parents haven’t had a chance to trade up.” Now they will – the company is rolling out the re-worked Honest Kids nationally on Jan. 1 through its entire big-store network, including supermarkets, drug stores, Target and other channels – and it’s expected to cost twice as much as Capri Sun, but with Honest’s strong brand equity, retailers appear to be welcoming the opportunity.
Other companies are going beyond 100 percent fruit juice – to fruit juice that isn’t just fruit juice anymore because it’s actually infused with other things, like vegetable juices. In the best imitation of celebrity wife/cookbook author Jessica Seinfeld, who is a fan of sneaking veggies into otherwise palatable foodstuffs, earlier this year, Campbell’s took its V8 V-Fusion juice – which combines vegetables with fruit juice – and stuck it into lunchbox-ready drink boxes. Another company trying to change kids’ diets through subterfuge is Sneaky Pete’s, an oat beverage disguised as a regular juice drink. Under the combined hands of co-founders Pete Stilianessis and Jerry Bello, this product’s attempts to get heart-healthy fiber into the hands of both kids and adults are symbolized by the mischievous rascal on the label. A product that is similarly looking to combine fun and healthy is Califia Farms’ Cuties Juice, which is taking tangerines from Califia Farms in California and blending it with a number of other juices to create a line of smoothies, juice drinks, and even products fortified with protein or spirulina. Lifeway foods has taken that natural and functional push even further, driving large revenues through a focus on kid-centric “Probugs,” its kefir line aimed at the younger set. An interesting countervailing trend is that, while some companies are battling to batten down their all-natural, 100 percent juice profiles, others are going the opposite in an effort to tamp down obesity – an effort that has become much more widely accepted recently. For example, artificial sweeteners have become much more widely accepted for the kiddie set – more than twice as many kids consumed artificially sweetened drinks over a 24 month period from 2007 to 2008 as they did earlier in the decade, according to a recent federal nutrition survey. That’s a curve that is likely to have turned sharply upward, however, given the even louder drumbeat against childhood obesity. Additionally, with the growth of products like Stevia and Erythritol there are even more zero calorie sweeteners on the market – even if they are considered to have been derived naturally. For example, True Drinks, Inc., formerly GT Beverages, is re-launching its “AquaBall” line of globe-shaped drinks next year, with a stevia-sweetened formula.
BRAND NEWS
Kids’ Beverages
Kids Healthy Foods, LLC has launched Mickies Slices, a new brand of kids’ drinks. Mickies Slices come in two lines, Mickies Slices 100% Juice and Mickies Slices Vitamin Enhanced Flavored Water 100 percent juice drinks, each packaged in 5 oz. triangleshaped Tetra Paks. Mickies Slices 100% Juice products come in organic or non-organic formulation, have no added sweeteners, and contain 70 calories per package. Mickies Slices Vitamin Enhanced Flavored Water products are sweetened with natural juice, enhanced with Vitamin D, and contain 30 calories per package.
kids’ juice drink in the convenience store channel, with average same store sales of 29 units per week and 1,500 units per year. Bug Juice has three of the top five kids’ juice drinks in the convenience store channel. Welch’s Foods, Inc. is the world’s leading
marketer of Concord and Niagara-based grape products. Welch’s offers a variety of single-serve products for kids, including a 5.5 oz. mini can. Welch’s products are sold throughout the U.S. and in more than 35 countries and territories around the world. Honest Tea has reformulated its Honest
In Zone Brands, a pioneer in children’s
beverages, introduced new designs of its Mickey, Minnie, Winnie the Pooh, Clifford, Thomas the Tank Engine, and Cinderellabranded juices. The product labels have also been redesigned to emphasize the healthy benefits of the products. The fruit highlighted on the label has been replaced with real apple imagery, and the Tots line has been adorned with a more child-like cartoon apple. Apple & Eve FruitSmarts provide one full serving of fruit in each serving and are an excellent source of calcium and vitamin D. The juice drinks are available in three flavors: mixed berry, grape, and fruit punch. Hansen’s Natural has extended its Junior
Juice line with Junior Juice Coconut Water Twist. The product line is made with coconut water and 100 percent fruit juices and comes in four flavors: Tropical Punch, Pineapple, Very Berry and Orange Creamsicle. The line is all-natural and is a great source of electrolytes and Vitamin C, and contains no added sugar, no preservatives, and no artificial flavors or colors. Junior Juice Coconut Water Twist is sold in an 8-pack of 6.75 oz. juice boxes.
Kids line. All five varieties of the popular pouches have been updated by removing the organic cane sugar and increasing the juice content. Honest Kids beverages now have between 30-42 percent juice, an increase between 12-26 percent juice, depending on variety. Nutritionally, the drinks remain at 40 calories per 6.75 oz. pouch. The five Honest Kids varieties are: Berry Berry Good Lemonade, Goodness Grapeness, Tropical Tango Punch, Super Fruit Punch, and Appley Ever After. The 8-pouch cartons will debut in natural food stores in October and grocery stores nationwide starting January 2013. Three varieties – Berry Berry Good Lemonade, Super Fruit Punch and Goodness Grapeness--will be available in new, redesigned 59 oz. multi-serve bottles launching during the same time period. Campbell Soup Co. has introduced V8 V-
Fusion juice drink boxes. The juice is naturally sweetened, contains no added sugar, is an excellent source of vitamin C, and provides a combined serving of vegetables and fruit. The drinks are packaged 6.75 oz. juice boxes and sold in 8-packs. True Drinks, Inc. introduced AquaBall to the
Frubob Fruit Floats satisfy the Alliance
School Beverage and Competitive Foods Guidelines. Frubob contains 100 real fruit pieces, no added sugars, and two servings of fruit in every 8 oz. bottle, The drinks come in peach, pineapple, mango and strawberrybanana flavors and are available in 8 oz., 12 oz., and 16 oz. PET bottles.
market in May 2012. AquaBall was created as an alternative to the many high calorie kids’ beverages on the market. AquaBall is a naturally-flavored water drink. It contains no high-fructose corn syrup, no artificial colors or flavors, and is a good source of vitamins B6, B12, B3, and C. AquaBall will soon be launching a zero calorie formula sweetened with stevia and containing no sugar.
Bug Juice International. According to the
company, Bug Juice is the number one selling
48 BEVNET MAGAZINE OCTOBER 2012
WAT-AAH! has introduced its Kid Inspired Limited Edition Bottle, the first of a series of
with labels designed with an 11 year-old girl named Sammi. Along with its existing line of functional waters aimed at kids and teens, WAT-AAH! Body Limited Edition is available for the 2012 back-to-school season and is sold in over 10,000 stores and school districts across the country, including Kroger, Shop Rite, Shaw’s, Bi-Lo and Whole Foods Market and many others.
The Coca-Cola Co. Inc. Odwalla Smoothies
For Kids is a new line of lunchbox-suitable, not-from-concentrate smoothies. The smoothies are 100 percent juice with other ingredients, gluten-free, and contain one whole serving of fruit with no added sugar. Each smoothie contains 110-120 calories per 6.75 oz. box. The drinks come in three flavors: Strawberry Banana Jungle, Mango Pineapple Island, and Grape Berry Prairie.
BYB Brands, Inc. New for 2013, Tum-E
Yummies will have enhanced vitamin content. Tum-E Yummies will continue its onpack promotion, “Get Up ‘n’ Go” in 2013, utilizing a code behind every bottle’s label to enter for a chance to win prizes. 4u2u Brands. Fruit 66 from 4u2u Brands
Kraft Foods has launched Capri Sun Super V, a new fruit & vegetable juice drink for kids. The ready-to-drink beverage, which comes in the familiar Capri Sun pouch, contains one combined serving of fruits and vegetables (3/4 from fruit juice and 1/4 from vegetable juice) and is a good source of fiber.
is one of the fastest growing brands in the school channel of trade. The company has introduced new retail distribution in all Piggly Wiggly and Hy-Vee grocery stores.
MCC_BevnetHalfpgAd_Layout 1 10/2/12 12:43 PM Page 1
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PROMO PARADE
Promotions, events and specials for the industry
Pepsi MAX NFL Rookie of the Week is Back for the 2012 NFL Season
Pepsi MAX, the National Football League (NFL), and the NFLPA (NFL Players, Inc.) have teamed up to bring fans the Pepsi MAX NFL Rookie of the Week, a program through which fans can vote for a stand-out Rookie each week of the 2012 NFL regular season. Fans can vote for one of five nominated players on NFL. com/rookies beginning every Tuesday at 9 am ET and ending on Friday at 3 pm ET to determine the Pepsi MAX NFL Rookie of the Week. The Pepsi MAX NFL Rookie of the Week will be announced each Friday on NFL Total Access on NFL Network and on NFL.com. This year, in partnership with Funny Or Die, the Pepsi MAX NFL Rookie of the Week program was launched with a video featuring actor Sean Astin using his experience from the movie “Rudy” to teach NFL rookies about football. Astin’s assortment of constructive criticism, insightful tips and helpful advice is featured on Funny or Die, and includes sit downs with Robert Griffin III, Dwayne Allen, Russell Wilson, Brian Quick and DeVier Posey. After the regular season, five players will be nominated for Pepsi MAX NFL Rookie of the Year honors. Fans can vote for the winner on NFL.com/rookies throughout the month of January. The Pepsi MAX NFL Rookie of the Year will be announced at the second annual “NFL Honors” awards show in New Orleans on Saturday, February 2, the night before Super Bowl XLVII. This is Pepsi’s eleventh year as the official soft drink sponsor of the NFL and the eleventh year that Pepsi will present the NFL Rookie of the Week and NFL Rookie of the Year awards.
50 BEVNET MAGAZINE OCTOBER 2012
Dos Equis Invites Consumers to “Discover the Masquerade” This Halloween Dos Equis, the fastest growing premium Mexican beer in the U.S., is inviting adult consumers and retailers to take their celebrations to a more exotic and interesting level with Dos Equis “Masquerade” retail program. Through “Masquerade” program elements assessable via mobile devices and Facebook, consumers will have access to mysterious special offers, sweepstakes and unique content, and retailers will have the tools to increase store traffic and sales of premium Dos Equis throughout the entire month of October. To encourage incremental display activity and help generate consumer excitement, Dos Equis is providing retailers with Masquerade themed display items and POS. Special SnapTag codes printed on POS items invite shoppers, through smartphone technology, to snap the code for the chance to win uniquely Dos Equis prizes. Cross merchandising IRC and MIR offers will be available on the purchase of Dos Equis and Halloween related items (where legal) to encourage out-ofsection displays and increase retailer’s basket rings. On-Premise, Dos Equis Masquerade themed POS including posters, pennants, coasters and table tents, containing the program’s SnapTag code, will be available to dress accounts in preparation for their uniquely Dos Equis Halloween celebrations. In select accounts, Dos Equis Ambassadors will be on hand to engage patrons in “Masquerade”, and invite them to snap the code for the chance to win Dos Equis prizes while sampling them on cold, refreshing Dos Equis Lager and Ambar (where legal). Dos Equis “Discover the Masquerade” program runs through October 31.
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