BevNET Magazine April/May 2014

MAY 1, 2014

THE A-TO-Z OF POWER IN THE BEVERAGE BUSINESS L IS FOR L.A. LIBATIONS

COCONUT WATER: SUSTAINED SURGE

SWEETNESS THAT LASTS

STILL LOKO FOUR YEARS LATER

available spring 2014

APRIL-MAY 2014 M

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Columns

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Contents • Volume

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12 • No. 3

44

Features

On the Cover

4 First Drop The First Night of the Party, or the Last?

22 Sustained Surge Coconut Water Swells with Brand News

6 Publisher’s Toast State Your Position

30 Sweetness That Lasts It’s All About Completeness of a Beverage

34 Alpha Dogs The A-to-Z of Power in the Beverage Business.

L Stands for L.A. Libations

Departments 8 BevScape State of the Beerocracy and Expo West in Review

44 Malternatives Still Loko Four Years Later with Brand News

MAY 1, 2014

THE A-TO-Z OF POWER IN THE BEVERAGE BUSINESS

10 New Products PepsiCo partners with NASCAR 18 Channel Check The Bud Light Lime family Continues to Grow 20 Brewbound Key Craft Offerings

L IS FOR L.A. LIBATIONS

COCONUT WATER: SUSTAINED SURGE

SWEETNESS THAT LASTS

STILL LOKO FOUR YEARS LATER

cover.indd 1

4/17/14 9:55 PM

COVER PHOTO BY AMANDA FRIEDMAN www.amandafriedman.com

50 Promo Parade Coke and FIFA Tour the States

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By Jeffrey Klineman

The First Night of the Party, or the Last?

Maybe it was a side-effect of the many recently decriminalized aromas wafting through the various locations of Natural Products Expo West, but there was a lightness to the gathering, a feeling that, when it comes to the long-marginalized natural and organic section of the store, someone had let in the air and the sun.

There were long, late parties, dancing and drinking and an overall vibe that lay somewhere between the parking lot of a Phish show and that orgiastic party in The Matrix that the underground humans have the night before the giant robot bugs break in through the ceiling and try to kill everybody.

But unlike that Apocalyptic scene, the mood in Anaheim wasn’t desperation, it was celebration: young food and beverage companies like Barkthins and Runa were closing investment rounds, and slightly less callow operations like Suja and Califia Farms showed the growth to justify the backing they’ve received. Brands that are just evolving outside of incubation channels, like Mamma Chia, Bhakti Chai and Tumeric Alive were treated like the belle of the ball. Buyers from mainstream stores like Target and Walmart and, yes, even interiors store HomeGoods prowled the aisles for the kind of assortment additions that can make them more current, in tune with the times.

There’s no doubt that there’s reason for celebration for the companies lined up at the tables at Expo West, and there’s equal reason for optimism for the companies we’ll be seeing in a few weeks at BevNET Live: the great waves of dietary and environmental awareness, improved marketing, and changing tastes are moving shoppers to include a greater proportion of their purchases in synch with the offerings of the show attendees.

Remarkably, the percentage of organic as part of the overall food basket remains less than 10 percent – much as the share of craft beer isn’t much more than 10 percent as well, but the indications are clear: better-crafted, innovative

4 BEVNET MAGAZINE APRIL/MAY 2014

products that have a conscious component are at a tipping point.

But the concern has to remain that this is still largely a phenomenon that is responsible to an upper-middle-class client base. Despite what many companies have taken to calling the “democratization” of brand families, many of the goods for sale – even the ones that have penetrated conventional channels – remain high-end indulgence items that fail to fulfill the day-to-day needs of those who have been left behind by the economic recovery. The quinoa-ization of the pantry isn’t yet a widespread one; not all of us can afford to – or even expect to – experiment in low-calorie fresh-pressed lemon and kale cleanses when we’re more concerned about getting sufficient calories into our children’s lunchboxes.

Organics remain a huge hope for the food system in two ways: they point toward a future where farming provides for the needs of our population without decimating biodiversity, and they serve as a gateway of information to the larger issues of environmental responsibility that threaten us all. Consumers who are aware of the positive ramifications of fair trade and GMO-Free, amont others, are legitimizing social approaches to commerce that are political as well as commercial acts.

And all that is great, but the beginning of the gold rush that so many were celebrating in Anaheim can’t be one that creates a new, organic hierarchy that leaves much of the population behind.

After all, in The Matrix, all of humanity had to fight the bugs. Getting rich for living the right way, for providing a mere fraction of the population with eco-chic wares, isn’t going to solve the global problems that much of the movement formed to address. Even the righteous get munched if we leave all the rest behind. Yes, it’s great to see brands changing the stores and sending signals to the world. Let’s just not forget, though, when we celebrate, that we can’t just fly above the fray, no matter how enticing the air currents might be.

MAGAZINE

By Barry J. Nathanson

www.bevnet.com/magazine

State Your Position and Let the Marketplace Agree

Barry J. Nathanson PUBLISHER bnathanson@bevnet.com Jeffrey Klineman EDITOR-IN-CHIEF jklineman@bevnet.com Ray Latif MANAGING EDITOR rlatif@bevnet.com

Max Rothman STAFF WRITER mrothman@bevnet.com Chris Furnari BREWBOUND EDITOR cfurnari@bevnet.com David Eisenberg STAFF WRITER deisenberg@bevnet.com

SALES John McKenna DIRECTOR OF SALES jmckenna@bevnet.com

Adam Stern SENIOR ACCOUNT SPECIALIST astern@bevnet.com

John Fischer ACCOUNT SPECIALIST jfischer@bevnet.com

Jon Landis SALES OPERATIONS jlandis@bevnet.com ART & PRODUCTION Matthew Kennedy CREATIVE DIRECTOR Aaron Willette SENIOR DESIGNER

Last month our BevNET team spent a grueling, fast-paced time covering the Expo West show in Anaheim. The show is overwhelming in scope and size, and the aisle miles take its toll on your body and soul. To those in attendance, you know what I’m talking about and how large and successful the event has become. Thousands of brands were exhibited, with beverages one of the prominent category to enjoy the spotlight. The vast array of natural and organic product offerings are dramatic evidence of where food and beverage industry is going.

Expo West captures the essence of today’s retailing. The thousands of retailers and distributors gracing the halls were a reflection of the importance of the show.

Over the course of the three days, I met with most of the beverage companies exhibiting. It was a most enjoyable time to sample, taste, scrutinize the packaging and hear about the uniqueness of each of the brands. They were some of the most innovative and unique formulations products to come down the pike. Each claimed its special position in the marketplace. I dutifully listened to the claims and tried to see the fit in the pantheon of beverages past, with an eye to the future. I can’t tell you how many brands told me that they were a category creator, and at least, a radical new spin or direction on an already de6 BEVNET MAGAZINE APRIL/MAY 2014

fined category. I think not. If that were the case, beverages would be such a splintered arena with hundreds of categories and it would be too hard to manage and execute.

I always try to put myself in the minds of the retailers and distributors that these companies covet. They are tasked in deciding which brands to take on their shelves and in their bays. While you might want to be a new category creator, they work within the confines of their business model. It is not easy to create space for a brand that doesn’t fit in their parameters. Also, you don’t get to decide where the brand will be placed even though it’s crystal clear to you that it deserves space in a particular set. It is great to position your brand to them, but you must keep in mind that they’ve seen it all and heard it all. Don’t back yourself into a corner with your unique positioning.

I understand your zeal and love for your brand; that’s what makes the industry so great. Yet, you must be realistic in your positioning, claims and posturing. The retailers and distributors have a long term, largely successful game plan.

Be realistic in approaching them, and help guide them to where you think your brand should be. Much of what I heard wasn’t guiding, but dogmatically pushing. The approach must be modified to achieve placement and success.

BEVNET.COM, INC. John F. (Jack) Craven CHAIRMAN jfcraven@bevnet.com

John Craven CEO & EDITORIAL DIRECTOR jcraven@bevnet.com

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BEVSCAPE

The latest news on the brands you sell

EXPO WEST ROUNDUP

STATE OF THE BEEROCRACY

BevNET's coverage of Expo West 2014 sponsored by:

Fighting for Transparency Here’s a math problem for you: if the show floor at Natural Products Expo West 2014 encompassed over 1 million square feet, how big do you think the proverbial elephant in the room (in this case, the Anaheim Convention Center) would have to be?

Gargantuan, for sure, and for beverage exhibitors at the event, it was clear that the mammoth in the room is known as Whole Foods. The clout and sway of the natural grocer was in full display at Expo West, particularly in its quest to offer “full GMO transparency” in its stores by 2018. Speaking with dozens of beverage companies at the event, it was clear that Whole Foods was the driving force behind many of the decisions to certify products as non-GMO. Beverage executives described Whole Foods’ buyers as offering gentle nudging and encouragement toward non-GMO certification, as opposed to giving an outright directive. However, some stated that Whole Foods had a slightly larger influence, indicating that the retailer gave explicit instructions about the placement of non-GMO stamps on product packaging.

And while most appeared to be aligned with the mission of Whole Foods, despite the relatively inexpensive cost of certification — via non-profit group The NonGMO Project — several bemoaned the length of the process, which can take over a year to complete, according to some.

Meanwhile, a few organic beverage companies took issue with adding a nonGMO stamp to their labels, fearing that it would be redundant and confusing to consumers, as USDA Organic standards prohibit the use of GMOs. Others worried that consumers would begin to equate non-GMO with organic certified.

While Whole Foods was on the minds of many, new kids beverages, coconut waters, and a variety of new other products, including cold-pressed juice and kombucha were on display, as well as a variety of “insert your plant here” waters – all trying to be

8 BEVNET MAGAZINE APRIL/MAY 2014

the next big vertical, including maple water, barley water, artichoke water and beyond.

Meanwhile, big changes came to emerging brands. Health-Ade kobucha added Ramon Canek, the former COO/VP of operations for Millennium Products, the producer of GT’s Kombucha. Essentia Water showed off a slate of new employees, including head of strategy Neil Kimberley and marketing chief Paul Curhan.

Kevita had Zico vet Bill Lange on hand, and revealed it would be going to market through Pepsi’s Naked Juice operation.

Bakhti Chai found new financing, and shortly after the show, so did Runa.

Cold-Brew coffee seemed to be morphing into the category of the moment. High Brew – run by a team that included the founders of Sweet Leaf Tea, David Smith and Clayton Christopher – was readying a wide-ranging launch, while Chameleon Cold Brew had also decided to move past the concentrate model and go with RTD varieties. Califia Farms also showed its mettle with a variety of products, but it was a variety of cold-brewed single-serve products made with almond milk that had the new brand in the spotlight.

Still, much of the interest came back to Whole Foods – a company that tried to reassert itself as the leader of the pack for the LOHAS consumer via its transparency push by providing guidance to a number of companies. For Third Street Beverages, a pile of teas and lemonades bore the mark of long consultations about labeling imperatives with Whole Foods execs. But with Target and Wal-Mart also walking the floor, and announcing their own high-profile LOHAS initiatives, who could blame the prime mover of the channel for trying to assert itself so strongly?

The answer is a transparent one, indeed.

Craft Hits Eight Percent of Beer Market The craft brew train kept on rolling in 2013 as production from the country’s smallest beer makers grew 18 percent, according to data released by the Brewers Association (BA) as part of its annual report on the U.S. craft beer industry. The BA – which represents the interests of small and independent brewers – announced that consumers spent an estimated $14.3 billion on craft beer last year, up 20 percent from the $11.9 billion spent in 2012.

Craft production volumes also accelerated in 2013, to 15.6 million barrels. That’s up from the 13.2 million barrels of beer the craft brewers made in 2012, representing 7.8 percent of the total beer market.

“With this stellar year, craft has now averaged 10.9 percent growth over the last decade,” noted BA staff economist Bart Watson.

With craft’s current pace of growth — as well as a much-discussed revision of the BA’s definition of craft brewer — Watson said he believes 2014 will be the year that BA-defined ‘craft beer’ finally captures 10 percent of total beer volumes.

“Given the first two months of scan data, I would say it is likely,” Watson said, pointing to reports from Nielsen, GuestSciences and IRI. IRI recently pegged craft volumes in multi-outlet and convenience channels as being up 20 percent through Feb. 23.

Additionally, the BA highlighted the number of brewery openings in 2013, counting 413 openings and just 44 closings, bringing the total number of U.S. craft breweries to 2,768, a 15 percent increase over 2012.

The BA has made changes to its reporting system over the past year, the result of bringing a staff economist on board. At this time last year, the BA had originally reported that drinkers had spent about $10 billion on craft beer.

“We had been underestimating what was being sold on-premise,” Watson said.

“We now use a more rigorous method of estimating and take a more detailed look into the channels and pricing to have a better sense of craft’s retail value.”

NEW PRODUCTS

The newest options for cooler and shelf

CSDs PepsiCo has partnered with NASCAR driver Dale Earnhardt Jr. to introduce a new limited-edition AMP Energy flavor. Dale Jr. Sour, a sour grape-flavored energy drink, is available for a limited time at participating 7-Eleven stores across the country. The 16 oz. can features Earnhardt Jr. and his No. 88 Chevrolet SS on the label. The product is line-priced with the rest of the AMP Energy line. For more information, please call PepsiCo at (914) 253-3174.

JUICES Califia Farms’ Pure Squeezed California Juices are now available in single-serve 10.5 oz. bottles. The juices are Non-GMO Project Verified and come in four varieties: Lemonade, Lemon Limeade, Tangerine and Orange Juice. Califia Farms Lemonade is made from California Meyer lemons and Califia’s Premium Pure Squeezed Orange Juice is a blend of Valencia Oranges and other California varietals. The juices are packaged in 10.5 oz.

BPA-free, 100 percent recyclable bottles. The juices are distributed nationally in natural retailers and have a suggested retail price of $1.99. For more information, please call Califia at (626) 204-0830.

Juiceology has added Green Essentials to its line of premium juice blends. The product is a blend of green apple, cucumber, kiwi, pear, banana, spirulina, blue green algae, spinach, wheatgrass and oat grass and the company’s whole grain extracts.

The extracts deliver 32 percent of the recommended daily value of fiber per 15 oz. bottle. The juice also contains essential vitamins and minerals, including iron, magnesium, selenium, thiamin, riboflavin, and folate. Juiceology’s products contain no added sugar and are wheat gluten-free and come in four additional varieties: Plum/Grape/Blackberry, Blueberry Acai, Pome Blue Cran, Peach Mango. The juices have a suggested retail price of $3.99 and are distributed at Bristol Farms, Ralph’s, Stater Bros., Raley’s, CVS, Duane Reade, D’Agostino, King Kullen, Dave’s, Roche Market, Weis Market, Food Town and other retailers. For more information, please call Juiceology at (310) 591-8788.

10 BEVNET MAGAZINE APRIL/MAY 2014

LEMONADES Campbell Soup Company has introduced V8 Splash Lemonade. Packaged in 64 oz. plastic bottles, the product comes in two flavors – Lemonade and Strawberry Lemonade – and has 80 calories per 8 oz. serving.

The lemonades have a suggested retail price of $2.98. For more information, please call Campbell Soup at (856) 342-4978.

Third Street, Inc. has launched a line of single-serve organic, Fair Trade and nonGMO iced teas and lemonades that will be distributed and sold exclusively in Whole Foods Markets nationwide. The ready-todrink beverages include refreshing black and green teas sourced from Nilgiri, India, which are then micro-brewed in Colorado, as well as Pucker Up, a lemonade, and Half & Half, a lemonade and tea blend. Third Street real brewed ice teas and lemonades are also certified gluten-free. Each variety of tea is between 0 and 50 calories per serving, while Pucker Up and Half & Half contain 80 and 60 calories per serving, respectively. Packaged in 14 oz. glass bottles, the teas and lemonades retail for $1.99. For more information, please call Third Street at (800)636-3790.

Talking Rain has expanded its Sparkling ICE lemonade line with the additions of Peach and Mango Lemonades. The new varieties join Sparkling ICE Classic Lemonade, Strawberry Lemonade, Raspberry Lemonade, and Lemonade with Tea. The products have a suggested retail price of $1.29 per 12 oz. bottle and are available at retailers nationwide. For more information, please contact Talking Rain at (425) 222-4900.

ENERGY DRINKS Hiball Energy has launched four of its most popular sparkling energy water flavors and two flavors of its organic energy drinks in 8.4 oz. aluminum cans. The new products are intended to appeal to female consumers. Similar to Hiball’s 16 oz. offerings, the new 8.4 oz. cans use Ball Corporation’s “cold activation” technology. A pattern of sparkling dots on the can turn from white to blue when the cans reach a temperature of 45 degrees F (8 degrees C), indicating that the beverage inside is at an optimal drinking temperature. The products have a suggested

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retail price of $1.99 and are distributed across the U.S. For more information, please call Hiball at (415) 420-4801.

The Coca-Cola Co. Inc. has introduced vitaminwater energy, a lightly-carbonated beverage that features a natural energy boost from green coffee bean extract. The beverage is sweetened with a blend of cane sugar and stevia leaf extract, and contains 80 mg of caffeine and 50 calories per 11.5 oz. can.

The energy drink is available at convenience stores across the U.S. and comes in three flavors: strawberry-lime, berry-punch and orange-mango. A fourth flavor, raspberrycitrus, is available exclusively at 7-Eleven stores. The drinks have a suggested retail price of $2.29. For more information, please call Coca-Cola at (212) 545-6099.

KIDS’ DRINKS Rooibee Red Tea has launched Rooibee Roo, a new kids’ beverage. The bottled tea offers the same health benefits and similar taste of its parent line and comes in three flavors: cherry, mango and orange. The rooibos tea is USDA certified organic and naturally caffeine-free. The product contains 12 grams of organic cane sugar and has less than 60 calories per 8 oz. BPA-free bottle.

The beverage has a suggested retail price of $1 per bottle. For more information, please call Rooibee Red Tea at (502) 749-0800.

PROTEIN DRINKS Trovita Health Science, a Minnesota-based specialty health and nutrition company, has launched ENU, a high-protein, high-calorie, ready-to-drink nutritional shake. The product contains 25 g of protein per serving and is made with non-GMO and organic ingredients, including whey protein isolates, quinoa, brown rice, high oleic sunflower oil and coconut oil. Packaged in an 11 oz. Tetra Pak, the beverage has a suggested retail price of $4.99 and is available for sale on the Trovita website. For more information, please call Trovita at (855) 266-6733.

Maverick Brands has relaunched its Coco Libre Protein line. Blending Fair Trade, certified organic coconut water with rBstfree and grass fed milk protein isolate, the products contain 20 g of protein, along with

12 BEVNET MAGAZINE APRIL/MAY 2014

23 vitamins and minerals, and no added sugar. The drinks have 140 calories per 11 oz. Tetra Pak and come in three varieties: chocolate, vanilla and almond. Distributed in natural grocers across the U.S., Coco Libre Protein has a suggested retail price of $3.99.

For more information, please call Maverick at (310) 770-6240.

Organic Valley has introduced a new line of organic milk protein shakes. Organic Valley Organic Balance and Organic Valley Organic Fuel will debut nationwide in natural food stores, food cooperatives, major grocery chains and gyms beginning in June. Both products are gluten- and lactose-free. Organic Balance has 16 grams of protein from real, organic milk and is an excellent source of naturally-occurring calcium, providing 50 percent of the recommended daily intake, with vitamin D for enhanced calcium absorption. Lightly sweetened with organic stevia and unrefined, fair-trade, organic cane sugar, Organic Balance comes in two flavors: Dark Chocolate and Vanilla Bean, each with a suggested retail price of $2.89 per 11 oz. bottle.

Organic Fuel is an organic high-protein recovery milk shake that contains 26 grams of protein, 70 percent of the recommended daily intake of calcium and no artificial sweeteners. Organic Fuel comes in two flavors, Chocolate and Vanilla, and has a suggested retail price of $3.89 per 11 oz. bottle.

Like all Organic Valley products, the new beverages are made with Fair Trade, USDA Certified Organic ingredients and do not contain antibiotics, synthetic hormones, toxic pesticides or GMOs. For more information, please all Organic Valley at (207) 838-0084.

FUNCTIONAL DRINKS B&R Liquid Adventure has launched ‘búcha Yuzu Lemon Kombucha. The kombucha contains the company’s organic live kombucha (which is made with purified water, organic evaporated cane juice, organic black tea, kombucha culture), organic lemon juice concentrate, natural lemon flavor, natural yuzu flavor, organic turmeric color and added probiotics. Packaged in a 16 oz. glass bottle, the new product contains 47 calories and 12 grams of sugar per 8 oz. serving. The product is distributed in natural specialty stores across the U.S. and sold with a suggested retail price of $3.49

per bottle. For more information, please call B&R at (714) 389-5588.

Mercy Nutraceuticals has launched Mercy Productivi-Tea, a functional beverage designed to offer focus, memory enhancement and productivity to consumers. The mangoflavored and lightly carbonated beverage is formulated with a proprietary blend of premium Matcha Green Tea and nootropics, which include acetyl L-carnitine, a protective amino acid that energizes brain neurons and helps boost focus, clarity and memory, according to the company. The product also includes other active ingredients including vitamin B6 and B12, alpha GPC and R-lipoic acid. The drink is packaged in 12 oz. glass bottle, and contains has 90 calories. Mercy Productivi-Tea has a suggested retail price of $3.49 and is sold online and in select stores in New York City and Chicago. For more information, please call Mercy at (212) 510-8571.

Lifeway Foods, Inc. has launched three new varieties of its dairy-based kefir smooth-

ie. The new vegetable, oat-enriched and stevia-sweetened kefir lines are all-natural and 99 percent lactose-free. Lifeway Veggie Kefir is a blend of vegetables juices and kefir that delivers one full serving of vegetables as well as the nutritional benefits of kefir per 8 oz. bottle. The drinks have a suggested retail price of $1.49-1.89. They come in Tomato, Cucumber and Beet varieties with no sugar or salt added and is available in 8 oz. individual bottles and 4-packs. Lifeway Kefir with Oats contains 1.5 grams of soluble oat powder and provides 11 grams of complete protein. The beverage comes in Blueberry Maple, Apple Cinnamon and Vanilla Plum flavors and is available in 8 oz. individual bottles for a suggested retail price of $1.291.59. Lifeway Perfect 12 Kefir is sweetened with stevia and contains 12 probiotic cultures, 12 grams of carbs, no added sugar, and 110 calories per 8 oz. serving. The new product comes in four flavors – Orange Cream, Apple Pear Cobbler, Triple Berry Tart and Key Lime Pie –- and is available in 32 oz. bottles for a suggested retail price of

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ENHANCED WATERS Avitae has added a third SKU to its line of caffeinated waters and revamped its packaging. The new product contains 125-milligrams of caffeine, complementing the brand’s 45and 90-milligram offerings. The new 16.9 oz. bottles come in a cylindrical shape and a die-cut holographic label that more prominently features the Avitae brand name. The waters are made with natural caffeine derived from green coffee beans, and contain no calories, sugars or artificial ingredients. Avitae is available in select retail stores throughout the country, including Giant Eagle, Meijer, GIANT, Safeway, Whole Foods, Wegmans, and Walgreens. The products have a suggested retail price of $1.49 per 16.9 oz. bottle.

Balance Water has added Balance Cleanse to its line of functional waters. The new product is a premium, non-flavored, American spring water infused with Australian botanicals that impart a gentle diuretic benefit, according to the company. The spring water has a low total dissolved solids and neutral pH of 7.0. The water is all natural with no sweeteners, preservatives, colors or flavors. The water has a suggested retail price of $2.29 per 1 L bottle and is distributed in the U.S., Germany and Australia. For more information, please call Balance at (917) 720-0183.

National Beverage Co. has launched LaCroix Cúrate. Naturally flavored with fruit essence, the new sparkling waters have a stronger flavor profile than original LaCroix waters and are available in 12 oz. cans. Pronounced, “coo-rah-tay”, Cúrate translates to “cure yourself ” and is inspired by the romance of French and Spanish cultures with illustrative, bold and whimsical packaging. Available in two flavors, Cerise Limón (Cherry Lime) and Pomme Bayá (Apple Berry), the drinks are calorie-, sweetener-, and sodium-free. The products are also certified Kosher, gluten-free, vegan and non-GMO. LaCroix Cúrate is distributed and sold nationally at Target for a suggested retail price of $3.79 for an 8-pack.

For more information, please call National Beverage at (954) 581-0922.

14 BEVNET MAGAZINE APRIL/MAY 2014

CIDER Vermont Hard Cider Company, makers of Woodchuck Hard Cider, has released the newest addition to its Private Reserve Line, Woodchuck Pink. This cider was created to honor and support the work of Survivorship NOW, a Vermont-based nonprofit organization dedicated to offering wellness programs to cancer survivors. Along with a pink label that incorporates the Survivorship NOW logo, Woodchuck Pink Cider is naturally colored with grape skins to give it a pink hue.

Private Reserve Pink is available nationwide in six packs of 12 oz. bottles and on draught.

Vermont Hard Cider Company has also launched Woodchuck Cellar Series Mint, the most recent cider to be released in its Cellar Series line. The cider is handcrafted from fresh Vermont McIntosh and Irish bittersweet apples, with whole spearmint leaves added before bottling. The product is 6.9 percent ABV and available nationally through May. For more information, please call Vermont Hard Cider Company at (802) 388-0700.

Heineken USA has launched Strongbow Gold Apple Hard Cider and Strongbow Honey & Apple Hard Cider. Strongbow Gold Apple Hard Cider features sweet and tart notes of the Golden Delicious apple, along with hints of Honeycrisp apple and pear and contains 172 calories per 11.2 oz. bottle.

Strongbow Honey & Apple Hard Cider is a blend of fresh apple taste and honey and contains 195 calories per 11.2 oz. bottle. Both ciders are gluten-free and 5 percent ABV. The products are distributed nationally and prices vary by market. For more information, please call Heineken USA at (914) 681-4100.

WINE Chamisal Vineyards has released its 2013 Stainless Pinot Noir. Sourced from vineyards throughout the Central Coast, a percentage of the blend comes from the estate vineyards at Chamisal Vineyard. The wine melds red plum and cherry flavors from vineyards in northern San Luis Obispo County with spicy, intricate and structured characteristics of the Edna Valley to yield an expressive, flavorful and food-friendly wine, according to the winery. Chamisal produced 2,300 cases of the wine, which retails for $24 per 750 mL

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Cameron Hughes Wine has launched the CAM Collection. The new line focuses on appellations that “represent the nexus of quality and value for each varietal,” according to the company. The 2012 CAM Collection Chardonnay is sourced from Monterey County and represents a rich, creamy style of Chardonnay, while the 2012 CAM Collection Cabernet Sauvignon is sourced from Lake County where 30-year-old vines grown in volcanic soils at 2,000 foot elevation and produce a deep colored and aromatic wine.

The wines are available in a range of retailers and restaurants and come with a suggested retail price of $15 per 750 mL bottle (750 mL). For more information, please call Cameron Hughes at (512) 699-9872.

is distilled with real fruit, including fresh mangoes and passion fruit, and contains no added sugar. The vodka is available in a 750 mL and 1 L bottles starting at a suggested retail price of $34.99. For more information, please call Moet Hennessy at (212)251-8200.

1961 Vodka is made with soft white wheat grown in the Finger Lakes region of New York. The name honors what company founders call a “classic era.” Packaged in 1 L bottles, the vodka has a suggested retail price of $26.99-29.99, and is distributed at retailers and retailers throughout the Finger Lakes. For more information, please call 1961 at (585) 683-2901.

Black Stallion Estate Winery has introduced its inaugural Pinot Noir, which joins the winery’s nationally distributed portfolio of wines including Black Stallion Estate Winery Napa Valley Chardonnay and Napa Valley Cabernet Sauvignon. The wine follows the same site-specific, handcrafted approach that has shaped its national and limited release portfolios. Sourced from vineyards throughout Los Carneros, the wine features layered depth, rich flavors and silky, supple tannins, according to the winery. The 2012 vintage has a suggested retail price of $27.99 per 750 mL bottle. For more information, please call (707) 253-1400.

Ao Vodka is an artisanal vodka produced exclusively from Japanese rice. Its creation starts on the island of Kyushu using a proprietary pot still based distillation method, as well as a bamboo filtration process that preserves the spirit’s distinctive rice character.

Its birthplace on Kyushu, near the Sakurajima volcano, is a historical part of Japan where the traditional art of distillation has been deeply rooted for centuries and where the water is renowned for its volcanic origin, according to the distiller. Naturally glutenfree, the vodka features notes of roasted rice and vanilla. Ao Vodka is 80 proof and distributed at fine liquor stores, restaurants and bars in New York City. The vodka has a suggested retail price of $50 per 750 mL bottle. For more information, please call The Door at (646) 340-1767.

WHISKEY

OTHER ALCOHOLIC BEVERAGES

The Jack Daniel Distillery has introduced Jack Daniel’s Tennessee Fire, a cinnamon-flavored spirit. Crafted with Jack Daniel’s Old No. 7 whiskey and infused with a proprietary red hot cinnamon liqueur, the product debuted in three states: Oregon, Pennsylvania and Tennessee. Jack Daniel’s Tennessee Fire is available at 70 proof and has a suggested retail price of $22 for a 750 mL bottle. For more information, please call Brown-Forman at (502) 585-1100.

SOCIAL Enjoyments is a new, low-calorie, flavored sparkling sake. The product is organic and gluten-free, lightly sweetened with stevia and erythritol, and contains 88 calories per 10.5 oz. can. The sake features a refreshing Hibiscus-Cucumber flavor and has 4 percent alcohol by volume. SOCIAL is available at select Chicago restaurants, bars and grocers. For more information, please call XA, The Experiential Agency at (312) 239-2357.

VODKA

Beam has launched Sauza Sparkling Margarita Watermelon, a sparkling margaritaflavored product with the added taste of watermelon. The ready-to-drink product offers a bold melon flavor with a lingering sweet

Moet Hennessy USA has launched Belvedere Mango Passion, the newest addition to the Belvedere Vodka line. The vodka

16 BEVNET MAGAZINE APRIL/MAY 2014

lime finish, according to the company. The product has a suggested retail price of $12.99 per 750 mL bottle. For more information, please call Beam at (847) 444-7699.

Cognac Ferrand has released Citadelle Gin Reserve Solera 2013, the first solera-aged gin in the world, according to the company.

Packaged in Citadelle’s new bottle, the gin is distilled in small, Charentais copper pot stills over a naked flame. It is made in small batches and infused with 19 select botanicals. The 88 proof spirit is distributed across the U.S. and has a suggested retail price of $34.99 for a 750 mL bottle. For more information, please call Savona Communications at (917) 969-1275.

Lejay Cassis is a French liqueur that has been made using the same handcrafted family recipe since 1841. Blended with “fruit de Cassis” grapes from Burgundy, the Noir de Bourgogne and Black Down, this crème de cassis features rich, fruit-forward flavors like blackcurrant, cherry and prune, and finishes with a light, woody aroma. Made with all-natural ingredients and traditional production methods, the centuries-old recipe consists of fruits de Cassis, eau de vie (fruit brandy), natural spring water, refined pure sugar, and is infused with the family’s secret ingredient, “bourgeon de Cassis,” or the buds of the cassis fruit. This subtle enhancement results in a clean, berry nose and citrus accents of grapefruit and lemon zest.

Lejay Cassis is 36 proof and can be found at fine liquor stores, bars and restaurants around New York City. It has a suggested retail price of $29.99 for a 750 mL bottle.

For more information, please call The Door at (646) 340-1767.

Beam Inc. has launched a new peachflavored variety to its Cruzan Rum line.

Cruzan Peach Rum blends Cruzan rum with the taste of juicy, ripe peaches to create a flavor reminiscent of the summer season’s finest fruit harvest, according to the company. Like all Cruzan rums, the new product is crafted by Cruzan Master Distiller Gary Nelthropp, whose family has been making rum on the island of St. Croix for generations. Cruzan Peach is distributed nationally and has a suggested retail price of $14.99 per 750 mL bottle. For more information, please call Beam at (847) 444-7844.

APRIL/MAY 2014 BEVNET MAGAZINE 17

CHANNEL CHECK

What’s hot – and what’s not – in stores now

SPOTLIGHT CATEGORY

PROGRESSIVE ADULT BEVERAGES 52 Weeks through 3/23/2014 SOURCE: Symphony/IRI Total food/drug/c-store/mass.

Looks like there’s no quit in the Bud Light Lime family, which has combined with Redd’s to provide a serious boost to a category that had been in need of innovation. The BLL family, in fact, outsells Pabst, Yuengling, and Miller High Life. Not bad for a product in a group that had been pretty much conceded to independents a few years ago. See what the FDA can do for a big company? Meanwhile, for a story about how the FDA can affect the fate of a smaller company, check out our profile of Four LOKO four years later.

Brand

Dollar Sales

Bud Light Lime

$507,694,500

165.87%

Mikes Hard

$393,008,900

-0.92%

Smirnoff Ice

$206,349,100

-4.68%

Redds

$193,490,300

2,272.82%

Four Loko

$137,468,800

-5.51%

Twisted Tea

$126,107,200

11.99%

Smirnoff Premium

$44,058,500

-7.22%

Spraks

$23,591,640

-20.30%

Margaritaville

$13,951,110

-10.33%

Bacardi Silver

$13,781,940

-44.58%

Jose

$13,590,470

-1.44%

Cayman Jack

$13,147,340

127.54%

Johny Bootlegger

$11,051,040

13.00%

Smirnoff

$8,298,815

-33.87%

Colt 45

$4,581,550

-47.69%

Moskato

$2,621,671

160.19%

Tilt

$2,341,358

-79.84%

Clubtails

$2,100,689

69.48%

Arnold Palmer

$1,876,955

24.32%

Four Poco Loco

$1,041,898

-70.88%

TOPLINE CATEGORY VOLUME 52 WEEKS THROUGH 3/23/2014

18 BEVNET MAGAZINE APRIL/MAY 2014

Change vs. year earlier

SOURCE: Symphony/IRI Total food/drug/c-store/mass.

BEER

$30,367,046,000

10.03%

BOTTLED JUICES

$6,800,282,000

-2.97%

BOTTLED WATER

$11,792,620,000

2.78%

ENERGY DRINKS

$10,138,350,000

3.94%

DRINK MIXES

$1,174,182,000

-2.38%

TEA/COFFEE

$4,271,764,000

4.08%

CAPPUCCINO/ICED COFFEE Brand

HOT! Starbucks

Dollar Sales

Change vs. year earlier

ENERGY DRINKS Brand

HOT! Monster Zero Ultra Dollar Sales

Change vs. year earlier

Starbucks Frappuccino

$757,869,900

5.91%

Red Bull

$3,497,122,000

9.75%

Starbucks Doubleshot

$350,556,200

1.59%

Monster Energy

$1,255,783,000

5.02%

Starbucks

$75,075,500

903.67%

Monster Rehab

$408,753,200

3.99%

Monster Energy Lo Carb

$308,364,300

-13.73%

NOS

$297,666,000

11.49%

Starbucks Light Frappuccino

$25,904,370

-6.64%

Starbucks Light Doubleshot

$9,980,109

8.24%

Private Label

$7,063,480

-14.32%

Java Monster

$289,650,400

12.58%

$286,049,600

-3.18% 209.81%

Coco Cafe

$5,871,434

372.97%

Rockstar

Illy Issimo

$4,314,340

-11.51%

Monster Zero Ultra

$277,419,800

Marley’s One Drop

$1,398,730

26.93%

Monster Mega

$239,742,200

4.41%

98.28%

Monster Absolute Zero

$189,414,500

-21.35%

Realbeanz

$999,697

SOURCE: Symphony/IRI Total food/drug/c-store/mass.

52 Weeks through 3/23/14

STILL WATER Brand

Private Label Dasani

NOT! Illy Issimo

HOT! Glaceau Smartwater Dollar Sales

Change vs. year earlier

$1,890,373,000

10.82%

$923,931,600

2.25%

SOURCE: Symphony/IRI Total food/drug/c-store/mass.

52 Weeks through 3/23/14

NOT! Monster Absolute Zero

TEA Brand

HOT! Pure Leaf Dollar Sales

Change vs. year earlier

AriZona

$659,101,800

-3.53%

Lipton

$329,119,700

-11.29%

$272,689,900

9.97% 49.33%

Nestle Pure Life

$898,458,200

-4.04%

Lipton Brisk

Aquafina

$860,098,900

-3.11%

Lipton Pureleaf

$233,000,000

Poland Spring

$575,522,100

3.19%

Snapple

$210,422,800

2.59%

Diet Snapple

$189,246,400

-4.04%

AriZona Arnold Palmer

$173,758,800

-4.89%

Gold Peak

$138,334,000

11.98%

Glaceau Smartwater

$553,956,400

10.22%

Glaceau Vitaminwater

$537,996,900

-17.39%

Deer Park

$408,836,600

0.10%

Ozarka

$319,974,900

0.15%

Diet Lipton

$132,306,900

-7.35%

7.68%

Pure Leaf

$85,073,010

153.56%

Fiji

$250,766,000

SOURCE: Symphony/IRI Total food/drug/c-store/mass.

52 Weeks through 3/23/14

NOT! Glaceau Vitaminwater

DOMESTIC BEER

HOT! Michelob Ultra Light

Brand

Dollar Sales

Change vs. year earlier

SOURCE: Symphony/IRI Total food/drug/c-store/mass.

52 Weeks through 3/23/14

NOT! Lipton

CRAFT BEER

HOT! Lagunitas

Brand

Dollar Sales

$341,545,900

Change vs. year earlier

15.44%

Bud Light

$5,980,122,000

0.35%

Samuel Adams

Coors Light

$2,368,976,000

2.71%

Sierra Nevada

$193,037,900

9.80%

Budweiser

$2,114,091,000

-1.04%

New Belgium

$148,529,400

18.68%

$119,149,500

13.31%

Miller Lite

$1,882,564,000

-1.81%

Shiner

Natural Light

$1,119,006,000

-5.10%

Lagunitas

$64,069,170

88.78%

Busch Light

$846,846,500

2.29%

Deschutes

$54,625,140

12.84%

Michelob Ultra Light

$797,399,000

11.80%

Redhook

$41,889,740

9.05%

Busch

$669,244,200

-4.03%

Widmer

$38,390,810

-6.66%

Keystone Light

$493,587,200

-2.14%

Goose Island

$37,998,680

80.37%

-7.07%

Stone

$36,190,570

33.61%

Miller High Life SOURCE: Symphony/IRI Total food/drug/c-store/mass.

52 Weeks through 3/23/14

$473,597,200

NOT! Miller High Life

SOURCE: Symphony/IRI Total food/drug/c-store/mass.

52 Weeks through 3/23/14

NOT! Widmer

APRIL/MAY 2014 BEVNET MAGAZINE 19

Brewbound

Covering the business of craft

Key Craft Offerings There’s something about the sight of melting snow in the Northeast that gets retailers and consumers alike excited for the introduction of lighter, more quaffable summer brews. Historically, craft brewers start rolling out their summer ales, saisons and session-strength offerings in April. This issue, we feature a smattering of all three. From the more hop forward Kona Brewing Castaway IPA to the Just Beer Project’s ‘Just Summer’ wheat ale, this month’s selections are sure to quench your thirst this vacation season.

Kona Brewing began shipping its latest release, Castaway IPA, to the mainland on April 14. Described as a “Hawaiian-style IPA,” the 6 percent ABV offering pours copper-colored with flavors of citrus, passionfruit and mango. Available in 6-packs (and on draft) for a suggested retail price of $8.99 – $9.49, Castaway IPA replaces Wailua Wheat in Kona’s Aloha Series and will be available in all major markets where Kona products are currently sold.

Widmer Brothers, the Portland, Ore.based craft brewery, will release its Citra Blonde Summer Brew in 6-packs, 12-packs and on draft nationally in May. The 4.3 percent golden ale was brewed specifically for warmer summer months and although Citra hops lend their name to this offering, they’re not the only bittering agent featured in the product. Alchemy hops also make an appearance. The price point on Citra Blonde is almost as refreshing as the beer itself – a 6-pack retails for $8.99.

Deschutes Brewery’s annual summer release is Twilight Ale, an easy-drinking 5-percent ABV pale ale with subtle flavors of orange and honey. Twilight Summer Ale’s crisp wafer-like body complements its clever medley of four hops and malts. Packaged in 6-packs, 12-packs and on draft, Twilight will make its return in May and is available in all markets where Deschutes Brewery products are currently sold. The suggested retail price is $9.49.

Victory Brewing’s Summer Love Ale checks in at 5.2 percent ABV and features earthy, noble European hops backed by fresh, clean German malts and hints of lemon

20 BEVNET MAGAZINE APRIL/MAY 2014

imparted by American-grown whole flower hops. Released in April, Summer Love will be available through August throughout Victory’s 34-state distribution footprint. Available on draft and in 6-packs, Summer Love sells for a suggested retail price of $9.99.

Stone Brewing Company’s newest release is a departure from the more familiar hop-forward offerings that the brewery has become known for. Released on April 14, Stone’s new Saison, which checks in at 6 percent ABV, is available on draft and in six-packs in select markets nationwide. The suggested retail price will vary by location.

Sourced from Stone’s very own 19-acre organic farm, lemon thyme and lavender contribute earthy, citrusy aromas and flavors, while the lemon zest and grains of paradise add a slight tang along with vibrant grapefruit and white pepper notes.

Odell Brewing. In 2012 Colorado’s Odell Brewing released RegionAle, a special beer that pays tribute to the states where Odell products are sold. Following an expansion into its 11th state, Texas, Odell updated the original recipe to include the addition of grapefruit. A complex medley of indigenous ingredients include hops and barley from Colorado and Idaho, Arizona prickly pear juice, wheat from Kansas and Wyoming, Minnesota wild rice, Nebraska corn, New Mexico green chiles, South Dakota honey, oak staves from Missouri, and new this year, Texas grapefruit. RegionAle, which checks at 9.6 percent ABV, will be available in 750 mL cork and caged finished bottles throughout the brewery’s 11-state footprint for a suggested retail price of $13.99 – $14.99.

When the first wave hit, few gave it much thought or attention.

A decade ago, coconut water was seen as an ethnic beverage, relegated to dusty shelves at Hispanic and Asian grocers, and something that would never gain mainstream appeal in the U.S. Distributors gave little more than a passing glance at brands like Vita Coco and ZICO – both of which have since played a major role in the development of the category – believing that it would take an incredible effort to convince American consumers to purchase their products.

Yet the wave turned out to be one of many, each getting larger and more powerful as the years progressed, each washing over the beverage industry and leaving behind an altered landscape. Last June, global research provider Mintel reported that new product introductions of coconut water products grew by 540 percent from 2008 to 2012.

According to SPINS, a provider of syndicated market research, coconut water reached $308 million in total U.S. multi-outlet and convenience store sales over the 52 week period ending on Feb. 23. At a three year compound annual growth of 31 percent, the category is outpacing a number of established and new beverage categories, including enhanced waters and RTD coffee.

22 BEVNET MAGAZINE APRIL/MAY 2014

With literally dozens of brands in a still nascent category, getting a clear snapshot of the overall coconut water segment is a rather difficult task. Instead, we decided to look at three brands in various stages of development – Vita Coco, Zola and Minoku (which is marketed by Double Cola) – and how they approach sustained demand for coconut water in terms of sales and distribution strategy, innovation and marketing.

THE PLATFORM Vita Coco is by far the top-selling coconut water on the market, and while SPINS reported that the overall sales growth of the category slowed to 18.5 percent in natural, specialty and multioutlet channels in the 52 weeks ending on Feb. 23 (in the year prior, growth in those channels was at 53.9 percent), sales of Vita Coco products are nevertheless booming.

The sales data on coconut water doesn’t match the scan data, which is already impressive, according to Vita Coco executives.

While IRI’s data for Supermarkets, Drugstores, Mass Market Retailers, Gas and C-Stores pegged sales at $135 million for the 12 months ending on March 23, brand spokesman Arthur Gallego put the figure much higher. He added that he expected growth

rate for 2014 to be in the “healthy double digits.” IRI data showed sales up more than 33 percent from the previous year.

Vita Coco’s army of staffers includes more than 115 field sales professionals, all of whom are focused on working with distributors on chain execution and creating multiple points of interruption within stores, and the company continues to pump resources, including in-store cold equipment and custom displays, into the mass channel, awareness and sales of Vita Coco are likely remain on an upward trajectory. The brand was recently named as one of 17 to take part in Target’s new “Made to Matter – Handpicked by Target” program, which focuses on increasing its shoppers’ access to natural and organic products.

But the large-format growth has left the convenience store part of the mix behind where it should be, admit Vita Coco executives. To ramp up sales in the channel, the brand is rolling out a lemonade flavor, which the company believes has the potential to expand the product more extensively into the afternoon as a consumption time. With lemonade as a kind of introductory flavor, Vita Coco will aim to attract new consumers in the parts of the U.S. where the brand and category is undeveloped in comparison to the East and West coasts.

The company looked at other chances to penetrate that afternoon Wawa Market run type of space, including tea, before settling on lemonade. As with its kids beverage platform, which was also in development for longer than a year, the company has taken a cautious approach that defines how the company looks at innovation and the potential risks associated with new product launches.

That said, Vita Coco is evolving, and with the addition of new food and snack products – which are currently in planning – the company sees potential in becoming a platform for coconut- based consumer goods. The company relies on the strength of the Vita Coco brand name and a desire to take advantage of operational efficiencies in sourcing, production and transport of other coconut products along with its coconut water, which it produces in Brazil, Southeast Asia and Mexico.

THE READY-FORPRIME TIME PLAYER It wasn’t just Vita Coco that thought a lemonade and coconut water blend would be an attractive product. Zola’s simultaneous introduction of a new lemonade variety for its own two-year old line of coconut waters, CEO Chris Cuvelier said, was an incremental foray for what has turned into an important growth engine for the company.

Zola got its start marketing acai beverages but expanded into coconut water in early 2012 as part of its “Fruits of the World” platform. Zola has since rapidly gained placement in of its 17.5 oz. cans and 1 L Tetra Paks in thousands of retailers across the U.S., including Safeway, SaveMart, Dominick’s, ShopRite, Stop N Shop, Vons and Whole Foods.

The company has grown to an estimated $20 million in annual sales, leaning on a hybrid distribution model comprised of UNFI in the natural channel and direct warehouse delivery. And while Zola works with New Age Beverage for distribution in Colorado, it has grown despite the lack of a major DSD network, Cuvelier said.

Instead, Zola works with merchandising teams in each of its markets to help support the brand on the shelf. And whereas Vita Coco has adopted a “pedal to the metal” sales strategy over the past two years, Zola, takes a “focused and narrow” approach.

“For us, it’s about going and getting the accounts, getting the revenue coming in, dropping in merchandisers behind that to support the revenue, and build out that presence,” Cuvelier said. “What we’re finding is that if our product has good displays and added visibility, then it sells really well.”

Cuvelier credits the measured and deliberate approach as key to staying in the ring with the top coconut water brands, which benefit from far greater financial resources and powerful distribution networks (Vita Coco is partnered with Dr Pepper Snapple Group; ZICO is owned by the CocaCola Co.; O.N.E. and Naked are PepsiCo brands). He also pointed to his personal involvement in sales as being critical to the success of Zola’s coconut water.

“I’ve been doing a lot of the sales calls, so has Matt [Collins], our COO, just to get in there and show these retail partners we’re serious, we want to grow the business,” Cuvelier said.

Within in the past six months, sales of Zola’s coconut water have surpassed those of its acai products, and now represent 60 percent of sales for the company. However, Cuvelier noted that acai remains of significant importance to Zola. Along with steady and sustained sales, Zola acai drinks represent a complementary product line, one that reflects the company’s commitment to high quality taste and healthy lifestyle beverages, he said.

“We’re selling more dollars to our retailers because we’re playing in two categories, and it becomes relevant to the buyers,” Cuvelier said. “It’s not like it’s a lot of incremental work just to focus on the acai [drinks], it’s just part of our product offering that we’re offering to retailers. So, it’s very complementary in that sense.”

And though acai products are certainly represented less in traditional grocery than in natural retailers, the brand name that Zola built with acai has laid the foundation for its coconut water

APRIL/MAY 2014 BEVNET MAGAZINE 23

to achieve quicker recognition and awareness. Despite just two years on the market, Cuvelier believes that Zola is positioned to leapfrog Naked in conventional grocery sales and crack the top four coconut water brands in the channel by the end of the year.

Along with continued focus on the grocery channel, Zola will aim to expand upon its pull with healthy, active women aged 2535, a demographic that Cuvelier said represents its largest base of consumers. With marketing efforts tuned to represent Zola as an aspirational brand, the company has honed in LOHAS-friendly, tropical-themed marketing strategy, particularly via social media.

Zola has introduced a number of promotional initiatives such as its #ZolaZen Instagram contest and the introduction of the tagline, “It Makes Your Body Smile.” Doubling down on outreach

ing in its existing portfolio of CSD products.

Along with a new line of functional iced teas (as well a brand of value-priced energy drinks), the Chattanooga, Tenn.-based company, which was founded in 1922, waded into the coconut water category last spring. Double Cola vice president Gina McCommon says that the company has so far weathered the overall decline in consumption of CSDs and remains focused on robust sales of its core products (which are doing “quite well,” she noted).

But Minoku, which had been in development since early 2012, is intended to attract a new set of consumers, many of whom are just now beginning to try coconut water for the first time.

“We wanted to develop a coconut water that did suit the American palate, that we ourselves actually wanted to drink,” Mc-

via Facebook and Twitter, Zola is set to launch a major social marketing campaign this summer that will be targeted to reach its cluster markets, Cuvelier said.

Common said. “And for us, and for all the focus groups that we conducted, the sweeter the taste profile, the more people liked it.”

As such, Double Cola set out to develop a brand that leaned toward the sweeter end of the scale for coconut water and landed on liquid from Thailand, where Minoku is produced and packaged in 17.5 oz. ribbed cans. Yet by the time the product hit the market, the coconut water category had seen the launch of several similarly-positioned brands, including Zola and C20, not to mention dozens of other start-ups. Nevertheless, McCommon sees opportunity for sustained development of the segment.

“When we started, the category wasn’t as saturated as it is now; it was quite different than what we’re seeing today,”

THE 90 YEAR-OLD YOUNG TURK While Zola’s vault into the coconut water category was bolstered by its credentials and reach with acai, longstanding CSD maker Double Cola surprised much of the industry last year when it rolled out Minoku, a not-from-concentrate coconut water, a move that is intended to address and take advantage of consumer demand for better-for-you drinks, something that had been lack-

24 BEVNET MAGAZINE APRIL/MAY 2014

McCommon said. “Even though the market is saturated, we still think there’s room for growth in the category.”

McCommon hopes that the package design for Minoku, which features sunset-like imagery and a rainbow of tropical colors, offers a critical, striking point of differentiation from competing brands, particularly on a store shelf.

“Everything that we saw, pretty much, was going all-natural,” McCommon said. “So all the colors were very light and used a lot of blues and greens and white. And so we wanted to have more of an impact and go for something really bright that would make people feel good and feel like Minoku was a 5-10 minute escape from the everyday work week and everyday life.”

But what the company is truly relying on is the same impulse that has inspired so many brands to join this category, and has caused bigger companies to try to reach out to consumers through lemonade.

“What we’ve experienced [is that] there isn’t a whole lot of brand loyalty at this point with coconut water,” she said. “It’s quite different from what we see in the carbonated soft drinks market. That’s been very helpful for us. We do have any opening where we can get people to try

the product. I think moreso than all of the brands that are out there, the bigger challenge for us has been getting people to try coconut water in general [as opposed to] trying our brand over another brand.”

McCommon described the launch of Minoku as being “fairly successful” so far, noting that since the beginning of this year, the company is beginning to move significant volume of the product, with the bulk of its sales coming in California, far from the company’s base of distribution in the Southeast. Certainly, it’s still early for Minoku, but, for Double Cola, the end goal is less about the coconut water standing on its own. Rather, the company is aiming to evolve beyond its CSD offerings to become a platform for a broad array of beverages.

“We are small enough that we have room to grow our brand,” McCommon said. “It wasn’t that we were thinking, ‘Oh no, we’re starting to lose volume because of health trends.’

It was more along the lines that we want to become a full-service beverage company offering a wide range of products to consumers, retailers and distributors.”

If coconut water is a requirement for full-service, then expect those waves to keep on coming.

APRIL/MAY 2014 BEVNET MAGAZINE 25

BRAND NEWS

Coconut Water

Vita Coco has secured distribution in Target as part of the retailer’s “Made to Matter — Hand-picked by Target” initiative. The company has also partnered with Rio 2, an animated and family-focused film, according to The New York Times.

The partnership combines two entities with Brazilian ties. The centerpiece of the partnership is the creation of two flavors of Vita Coco Kids inspired by Rio 2: BluBerry Beach and Gabi’s Pink Lemonade.

Meanwhile, in February, the company launched Vita Coco Lemonade.

COCO ZEN is scheduled to launch in

New York City on May 21. The product is packaged in 11.1 oz. cartons and emphasizes the “Z” in Zen for its merchandise and branding.

Guaraná Energy by Brooklyn, N.Y.-based Organic Gemini contains only two ingredients, both organic: guaraná and coconut water. The product comes in 11 oz. cartons and is Non-GMO Project Verified.

Natural Raw C has announced the May

launch of its coconut water in Japan and South Africa. On its 330 mL and 1-liter tetra packs, the product has a coconut water recipe by TV chef Pete Evans.

Amy & Brian’s Coconut Juice has announced the availability of its 6-pack of 10 oz. cans. The company, family owned and operated, has been on the market for 14 years and has reached national distribution.

The coconut juice, never from concentrate and without artificial flavors and added sugar, has a sweet taste with vanilla and caramel undertones, according to the company. The product can be found in mainstream and natural specialty markets across the U.S. POWERCOCO has announced that its

products will be sold in all 171 Sprouts Farmers Markets across 10 states. The company aims to bridge the gap between sports drinks and functional coconut waters. POWERCOCO is available in five flavors: Fruit Punch, Lemon-Lime, Orange, Grape and Blue Raspberry.

UNOCO, a pink coconut water, launched in

April. The product is sourced from young green coconuts born on remote islands in the Philippines, according to the company.

26 BEVNET MAGAZINE APRIL/MAY 2014

COCOZIA debuted in 2013 and has

promoted its status as USDA Organic, Kosher certified and Non-GMO Project Verified. The product has expanded with distribution through UNFI, KeHE, Lone Star and Provisions International. The product is now available at Walgreens, Nutrition Smart, Tunie’s and Sedano’s, among other retailers. The original flavor’s success will lead to chocolate, coffee, mango and pineapple varieties.

Zola has released two new products: Coconut Water with Espresso and Coconut Water Lemonade. Coconut Water with Espresso contains five electrolytes, more potassium than a banana and 125 mg of caffeine per 17.5 oz. can, according to the company. Coconut Water Lemonade has 45 calories per 8 oz. serving and 60 percent fewer calories than the leading regular lemonades, according to the company. The product has five electrolytes, 220 mg of potassium and 100 percent of the recommended daily value of vitamin C. Both products will be available in stores in May. Dr. Antonio Martins, Europe’s category leader and pioneer in coconut water, according to the company, has added two new flavors: Coco Mango and Coco with a mixture of green tea and white peach.

The products come in 330 mL PET bottles and are NOP and EU certified organic. Dr. Antonio Martins has also launched an organic children’s coconut water and is producing private label products to meet growing demand in Europe.

INVO Coconut Water is bottled and

high-pressure processed in Thailand, where the best-tasting and most aromatic coconuts are grown, according to the company. The product is never made from concentrate nor heated and is bottled within minutes of opening the coconuts.

The coconut water is chilled during the whole process before bottling to minimize the loss of volatile flavors.

Noelani, a 100 percent raw and unpro-

cessed coconut water, according to the company, was served at the NYC Veggie Festival in February and distributed to specialty food markets and restaurants across Long Island in Sag Harbor, East

Shoppers are thirsting for organic and simple ingredients like never before.

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Hampton, Montauk and Amagansett. The company began a home delivery route in Fairfield County, CT, and parts of Manhattan and Brooklyn, NY. The product is sold by the whole coconut with a straw or in a glass bottle. The company is hoping to scale its bottle business and is seeking distributors. Noelani also hopes to deploy more dispensing machines, which would be replenished with fresh coconut water every two to three days.

Beyond coconut water has announced

that its 8.5 oz. “Red Bull style” can will be placed on the pool bar menu at the Wynn Hotel in Las Vegas this summer.

Jax Coco. Packaged in a glass bottle de-

signed by Alasdhair Willis and Stella McCartney. Jax Coco has released the world’s first sparkling coconut water, according to the company. Jax Coco Sparkling debuts this spring and is available in two flavors: Original and Calamansi, a citrus fruit from the Philippines. The company’s new Jax Kidz line aims to promote better health without sacrificing taste. The kids line is available in five flavors and is made from coconut water and ingredients such as fruit purees and cacao. The products have up to 70 percent less sugar than orange juice, according to the company.

Just Coco has recently signed distribu-

FOCO is made from young, green

coconuts grown in Southeast Asia and is manufactured at the company’s new plant. Nothing added and never made from concentrate, the product is available in 500 mL and 1-liter sizes.

tion agreements with KeHE, which will bring the product to Pyramid Foods in the Midwest, and Performance Food Group in Texas. These partnerships add to the company’s existing agreements with S.K.I. Beer Distributors in the New York metro area and Cheney Brothers and Fiscer Mercantile in Florida. The company also recently hired Jake Field as its brand manager.

ROAR has expanded distribution in the Northeast with Farrell Distributing in Vermont, Northeast Beverage in Connecticut and Rhode Island and Fischer Thompson in New Jersey. Formerly available in only a 16 oz. bottle, ROAR has met growing demand with a new 20.5 oz.

PET bottle, which launched at the end of April. The shrink-wrapped label carries over the brand’s signature graphics and attitude, according to the company. After a successful product test, ROAR has also signed a chain-wide deal with Fairway Market and another deal with Bolla Market, a New York-based convenience chain.

The latter deal with initially bring ROAR to 35 Bolla Markets.

C20 Pure Coconut Water has been granted Non-GMO Project verification and BPA-free status across its entire line.

Both updates are set to roll out on C20’s updated label starting in June.

ZICO named Tom Larsen as its new

president and general manager in March.

Larsen formerly served as the general manager of illy, an RTD coffee business that, like ZICO, is run by Coca-Cola’s Venturing and Emerging Brands group. The news 28 BEVNET MAGAZINE APRIL/MAY 2014

follows Coke finalizing its purchase of Zico in November 2013. The acquisition shifted founder and then-CEO Mark Rampolla into the role of non-executive advisor.

Vital Coconut Water has begun hit-

ting shelves of Metropolitan Markets in the Northwest as well as Whole Foods in Northern California. The company plans to continue expansion its in California.

The coconut water is never heated nor frozen and is made with young Thai coconuts. The taste is rich, unadulterated and nutty, according to the company.

Thirsty Buddha recently launched 250

mL slim cans in Canada and will bring the cans to the U.S. in the fall. The cans will be offered in two varieties: All Natural and All Natural with Pulp. The company has added H-E-B and Ralphs to its distribution footprint, joining its placement in Loblaws, 7-Eleven and Whole Foods in Canada. The company continues to donate 1 percent of its sales to One Percent for the Planet organizations. Thirsty Buddha recently joined forces with Charity: Water for a well-building project.

AMAZON Beverages relaunched in

Harmless Harvest will relaunch its 100%

Raw Coconut Water with Cinnamon & Clove in the fall, after the product’s successful launch. The company is also broadening its Raw Dispenser program, which offers an even more sustainable method for drinking coconut water. With its ecosystem-based business model, Harmless Harvest focuses on reconnecting people with plants while fostering the long-term welfare of its stakeholders.

2013 with a new design, new formulations and a new marketing campaign featuring Brazilian models such as Adriana Lima. The product is formulated with coconuts from Brazil and combines coconut water with tea. AMAZON Beverages, available in 16.5 oz. bottles, are available at Duane Reade, local markets, convenience stores and Amazon.com.

APRIL/MAY 2014 BEVNET MAGAZINE 29

When it comes to the market perception of sweeteners, at this time, a massive chunk of consumers share a living contradiction. More than 50 percent of consumers say they’re actively pursuing a healthy lifestyle and avoid sugars, according to a recent joint study by market research groups Mintel and Nielsen.

However, when it comes down to the final decision, these consumers buy sweetened products at the same rate as other segments.

These purchases are heavily rooted in taste, but also in comfort. Consumers are accustomed to Diet Coke, not tomorrow’s next stevia experiment. It’s about the completeness of a beverage, said Darrell Jursa, the senior vice president of emerging media and technology at communications company FleishmanHillard, and that’s about more than taste.

30 BEVNET MAGAZINE APRIL/MAY 2014

Example?

“Just ask Jägermeister and Red Bull,” Jursa said.

Indeed, these two widely consumed beverages certainly elicited sour faces before they had fully formed brands, Jursa said. So for sweetener companies, here’s the lesson: While they develop and implement the latest sweetener technology in the back-

ground, relationships with brands in the foreground measure perseverance in a highturnover industry. Through steady communication, shared values and a combined interest in progressing along their respective paths, sweetener and beverage companies can ride the same horse into the sunset.

However, even with a seemingly strong match of brand and sweetener, accomplishing these variables continues to be a challenge. Something Natural, a Boston, Mass.-based company that markets a line of flavored, sparkling waters, sweetens its products with a blend of cane sugar (7 grams per bottle) and stevia. Randy Shefshick, the founder of Something Natural, said that his brand’s two priorities are refreshment and taste. However, he also wants Something Natural to serve as a healthier alternative to Sparkling ICE, which has formed an enormous and growing category of sparkling refreshment – and so he’s not wedded to any particular sweetener formulation.

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To stay on the cutting edge, Shefshick said that he conducts one or two trials per quarter of stevia products from companies other than his current sweetener partner.

And if one these companies creates a zerocalorie sweetener that maintains Something Natural’s taste, viscosity and general quality, would Shefshick change sweeteners tomorrow?

“Yes, absolutely,” he said. “Zero-cal has always been our goal.”

Zero calories and proper taste. It’s that goal, held by beverage co’s across the world, that has raised the stakes in the chase for top-line sweetener technology.

Cargill, an international producer and marketer of food, agricultural, financial and industrial products and services, believes it’s at the front of the pack, alongside companies such as Maverick Innovations, Pyure Brands, Sweet Green Fields and others that search not just for taste,

fortifies its pitch to beverage companies through technical understanding.

“We show you how we understand the science behind it,” Fabro said.

Yet, exhaustive technology represents just one pillar toward a harmonious partnership. After creating a sweetener that does its best to minimize bitterness and achieve a sugar-like flavor, sweetener companies still need to find the right beverage.

While it’s nice to link with fat-pocketed brands that carry proven success, only so many of these opportunities exist. For every Sparkling Ice, there’s a No-Cal; and for brands that have done well with a certain sweetener blend, like Zevia, there’s still the chance that they’ll switch once again for the purpose of marginal improvement.

Therefore, Jursa recommends sweetener companies identify a forward-thinking company that has been around for at least three years, has secured distribution in at

co-packing, hot fills, etc. – fountains offer an immediate chance in a world of instant gratification.

Another opportunity, he said, awaits with the craft spirits industry, which continues to expand. This has led to the growth of prepared cocktails. For all the complaining about mixologists who take six minutes and 12 ingredients to prepare a cocktail, a huge number of consumers are trying to create these same drinks at home.

Several prepared cocktails struggle to stabilize their sugars and other ingredients, Jursa said. Between SKYY Vodka, Captain Morgan, Bacardi and a number of smaller-name companies that offer more of an upscale experience, Jursa said that there’s room for sweetener companies to work with booze brands.

“They have to diversify across categories,” Jursa said, “as opposed to just thinking non-alcoholic is the way to go.”

but also versatility. Cargill’s latest sweetener, ViaTech, has been in development for the past three years with the purpose of serving a variety of beverage types, said Scott Fabro, the company’s global business development director. He said ViaTech works with CSDs, from lemon limes to root beers, teas, water-based beverages, juices, dairy and powdered beverages.

“There’s no one single magic glycoside,” Fabro said.

But to get from alchemy to chemistry, Cargill had to assemble a list of 40 steviol glycosides in the race with other sweetener companies in shaping rebaudiosides, like a puzzle with billion dollar stakes. ViaTech contains about 9-12 percent reb-A, 0.5 percent reb-D and .038 percent reb-M. With a glycoside pyramid on the table before him, Fabro said that Cargill

least one third of the U.S. and has garnered a semblance of loyalty and repeat business.

Sweetener companies would also be wise to work outside of their typical boundaries, Jursa said. While a number of sweetener companies have been pitching to ready-todrink, non-alcoholic beverage brands since their existence, Jursa believes that there’s plenty of opportunity in both the upscale alcohol industry and soda fountains.

“If I were a betting man and I was a sweetener company, I would find a small company that does have a bag in the box,” Jursa said.

The fountain business represents an interesting outlet for sweetener companies because it offers the potential of fast-moving volume, lots of trial and repeat purchase. While RTD products can lead to waiting games – production,

Not long from now, retailers will alter the non-alcoholic beverage industry, he said. There’s only so much shelf space for coconut water and functional beverages. At a certain point, they will be forced to make decisions. Some of them won’t be so hard. Others, the tougher ones, will be determined not just by taste, but by the completeness of the brand, the story of the product.

“In the grocery store now,” Jursa said, “I think there’s an opportunity for a category management reckoning.”

Despite what consumers say about their health-seeking ways, many of them aren’t ready to leave brands that shape their personal histories. There are young brands, ones that haven’t yet become Red Bull or Sparkling ICE, that are forming their pitch. They need a sweet deal.

32 BEVNET MAGAZINE APRIL/MAY 2014

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The A-to-Z of Power in the Beverage Business

by Jeffrey Klineman & Max Rothman Who are the most powerful people in the beverage business? What are the trends, concepts, companies that wield it most effectively? We’ve given it quite a bit of thought lately. While we have trouble with rankings – we’re a bunch of writers, after all – we’ve decided to put them in an order we can all understand.

A IS FOR ALMOND GROWERS,

B IS FOR BOULDER

a group that has the potential to make or break the fastest-growing alternative dairy category in the country, Almond Milk. With all manner of water shortages and bees dying, almond prices have doubled – and demand for the all-important nut is on the rise because of their popularity as a snack and an ingredient.

C IS FOR CERTIFYING ORGANIZATION – the bureaucratic backbone of the LOHAS movement.

With transparency on the rise, groups like the Non-GMO Project and Trans-Fair are facing an increased workload as retailers and consumers place heavier demands for their services. Grumbling on slow non-GMO certification has already started, and demand for

A mountain city without an industrial identity was reshaped in 1969 with the founding of Celestial Seasonings. The arrival initiated not just a new brand, but also an innovation launchpad that gave the city a strong stake in the future of the beverage industry.

“It created for Boulder a new home for the natural products industry,” said Brian Ross, the CEO of Cheribundi and a long-time local.

Ross said that the city produces more than it ever has, buoyed by a range of strategics (WhiteWave, Boulder Brands, Greenmont Capital Partners), and a flow of newer companies like Evol Foods and Justin’s Nut Butter. It has also been bolstered by a strong R&D community and a host of retailers: Alfalfa’s, Lucky’s Market, Sprouts, as well as a proving ground of specialty markets and LOHAS activity centers.

Izze co-founder Greg Stroh recently founded Skoop LLC, which markets powdered “superfoods.”

The Detroit native said that everybody in his hometown has connections to the automotive industry.

In Boulder, it’s the same, providing a product litmus test.

“If it flies in Boulder, it has a good chance of moving outside the confines of the city,” said Drew Grumhaus, Skoop’s COO. PHOTO BY KEN KINDER www.kenkinder.com

34 BEVNET MAGAZINE APRIL/MAY 2014

certified organic, certified Gluten Free, a host of sustainable ingredient certifications and more are becoming important label features. With dual nonGMO and Certified Organic or Fair Trade becoming even more common, the power of these groups as gatekeepers for products can only grow.

D IS FOR DPSG Specifically, the DPS Allied Brands Group. As the company’s core CPGs continue to decline, this particular piece of the DPS infrastructure is becoming even more important: taken together, Vita Coco, Neuro, Bai, Body Armor and the rest are one of the company’s biggest brands – and that’s not including whatever equity investments the company may have made. While the market for DPSG products declines, its potency as a route to market provider is becoming even more important for entrepreneurial brands, who recognize that DPSG represents fast scale that retailers will recognize.

E IS FOR ERROL, as in Errol Schweizer, the Global Grocery Coordinator for Whole Foods – and the driving force behind the company’s new emphasis on High Pressure Processed juices, product transparency, GMO labeling, not to mention the launch pad for new power products like GTs Kombucha, Mamma Chia, Honest Tea and Harmless Harvest.

F IS FOR FDA. There aren’t a whole lot of agencies that can shut down a product line out of hand, but getting a letter from these guys can kill off a small company lickety-split, and call the future of a big one into question very quickly, as well. FDA chief Margaret Hamburg has her hands full with pharmaceutical claims for the most part, but

the agency’s increased scrutiny of relaxation drinks – which has led to companies shutting down and category marginalization – is just one example of what running afoul of its standards can do.

G IS FOR GIANNUZZI GROUP. From a small law office in the Meatpacking District, Nick Giannuzzi is doing big things for emerging brands in the beverage business, from Vita Coco to Veev. With a much-sought-after distributor contract paving the way and connections to celebrities and moneymen creating multiple opportunities for clients, the former Harvard water polo player is scoring a huge portfolio of companies, indeed.

H IS FOR HERSHKOWITZ or for Haralambos – depending on which side of the country you’re on. These are the two DSDs that play a huge role in incubating brands and helping them prove they can make it in New York or L.A. When a new brand wants to make it big, they pitch to Haralambos Beverage Corp. or to Big Geyser, founded by the Hershkowitz family. And while neither house can guarantee success, they are the best able to convert positioning on their trucks into a big win. It’s worth noting that Monster and Sparkling Ice both came to Big Geyser in New York, a shift in tone from entrepreneurial brand to established player that indicates just how strong the company’s reach is; meanwhile, Haralambos is the undisputed king of Southern California beverage distributors, with interests in everything from Body Armor to Bai.

I IS FOR INDEPENDENTS, who have proven that when they succeed, they make a far bigger impact than the companies that take the risk-reduc-

tion strategy offered by incubators and strategic alliances. See: Red Bull, Vita Coco, Sparkling Ice, Monster, GT.

J IS FOR JIM: Jim Foltz, the head of the Business Ventures Group at Safeway, which has become even more powerful now that the chain has been combined with Albertson’s to create the biggest grocery chain on the West Coast. By keeping a cone of silence around his deals, Foltz has kept a low profile – but access to Safeway for companies in which the chain has invested is a pretty

good way for entrepreneurs to spend a little of their equity.

Foltz’ combination of wallet and placement puts him at the head of the retailer VC pack.

K IS FOR KOCH, like “H,” an East-and-West Coast balance of power, this time for Craft Beer. Jim Koch from Boston Beer Co. is the elder statesman of the business, with the ear of the U.S. Senate and a billion-dollar company; Greg Koch (no relation) is the conscience and cheerleader, whose Stone Brewing takes principled stands against the status quo.

L IS FOR L.A. LIBATIONS THE POWER CONNECTORS For a team that has always thought about ways to provide bespoke, measured solutions for brands through a strong network of retailers and distributors, L.A. Libations just knitted itself a whole lot more cloth.

The five year-old sales and marketing incubator, broker, and brand manager has a new series of partnerships and investors that will allow it even more flexibility to develop and nurture beverage brands, orchestrating a series of moves that have strengthened ties to its core client, Coca-Cola Co., while also allowing it to branch out in new directions – and earning the cover of our first “Alphabet of Power” cover profile.

While L.A. Libations’ original – and still dominant – strength is its ability to deliver growth-oriented route to market results better than any beverage services company in the business, its new corporate arrangements allow it to develop its own portfolio alongside its clients, and, most importantly, to have a way to market them through a series of movies, television shows, athletes and viral campaigns as part of a new venture, Madvine, a portfolio company of entertainment industry megalith Relativity Media. Beyond that, money is coming in from a variety of investors, and L.A. Libations has the ability to make its own brands and put money into a portfolio of others. Rather than pull the cart for others – a job it has always done exceedingly well, especially for its core client, Coke’s Venturing and Emerging Brands group (VEB) – L.A. Libations is also loading the cart up, picking the horses, and deciding the route.

The new arrangement finds one of the company’s co-founders, Danny Stepper, as co-CEO of Madvine, a marketing company owned

by Relativity, founded as a movie production and financing studio by investor Ryan Kavanaugh. Dino Sarti, the laconic intellectual to Stepper’s broad-strokes business development wizardry, is running the company’s operations, while engaging and charismatic Pat Bolden is overseeing the sales force, taking to the road to keep accounts aware of the company’s priorities. Relativity also co-owns brand ideation shop Bev/Early with with L.A. Libations.

“We were pretty dangerous in beverage with no money and no marketing,” Stepper says. “We were still always a lot more interesting that the typical collection of middle management executives.

APRIL/MAY 2014 BEVNET MAGAZINE 35

Now, it’s ten times what we could do. [With Relativity] We’ve got Snoop Dogg, we’ve got movies, it’s all coming together.”

To come together, sometimes things must split apart: that means that Stepper now spends much of his time in a Beverly Hills office dealing with an Entourage-type of cast including Kavanaugh himself and Relativity clients like Dwight Howard, Snoop Dogg, and Justin Verlander, alongside the casts and crew of the Relativity’s entertainment projects, always looking for a way to integrate brands and properties to build for marketing buzz. It’s an environment is which Stepper is exceedingly comfortable, he says, in between discussions of a Variety magazine event and plans for his trip to the Cannes Film Festival. After all, shortly after departing Coke – he was the head of its Costco business – he started producing a number of films, including three Disney “Goal” movies (cleverly financed by Coke and Adidas in exchange for prominent brand integration) and, lately, comedies.

It’s given the trio in a new, high-profile position, but it’s also got the team wearing more hats and put Stepper more squarely in the spot-

light. But it’s a change that Sarti and Bolden, themselves former Coke executives, were braced for as the enterprise started to change.

“I think Danny has a really hard job,” Sarti said, “But he’s a really good front man for the band. I consider myself the drummer, and Pat is the lead guitar, impressing and showing off for the customer.”

So how is it all working out? Take Arriba, the company’s latest rollout.

An “Energy Horchata,” – created as part of the partnership with Relativity – Arriba is debuting on a three-month exclusive basis with 7-Eleven, a business deal worked out because the partners at L.A. Libations have a deep relationship with that chain’s senior director of merchandising, Tom Burkemper, that dates back to the days when Burkemper ran the 9th Street non-alcoholic beverage incubator for Anheuser Busch. The L.A. Libations crew, all having left the Coke system, was the brand management team for Icelandic Glacial, a water that A-B distributed.

But the initial distribution and placement are just the tip of the iceberg. Developed through Bev/Early, Arriba has a promotional arrangePHOTO BY AMANDA FRIEDMAN www.amandafriedman.com

36 BEVNET MAGAZINE APRIL/MAY 2014

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ment and investment from rapper Snoop Dogg (7-Eleven execs are said to love him) as well as the potential to work Arriba into a variety of Relativity divisions through the Madvine subsidiary, including reality shows, movies, video games and potentially callouts in songs written by relativity music clients. Promotional tie-ins can go across the Relativity platform as well (Buy an Arriba, get a download/movie discount/ Snoop Dogg rolling paper, perhaps).

“It’s a great piece to fill the void of a dedicated marketing component for us,” Bolden said. “And it puts us in a great position with retailers.”

And that’s just for the first product that L.A. Libations has produced in-house with Relativity. As an agency, Madvine also serves as a conduit for outside brands to work across the Relativity platform, one where Kavanaugh is banking on Stepper’s ability to see connections between brands and media will undoubtedly pay dividends. Already on board are Evian – L.A. Libations has a long working relationship with the high-end water brand – snack food giant Mondelez (think Oreos) and Pathway Genomics, a genetic testing firm. Certainly, that’s a departure from the standard block-and-tackle approach to merchandising that has always been L.A. Libations forte, but the company has always been about big steps.

For example, the company has never been afraid of incubating in conventional grocery, and two years ago it created a report on emerging beverage categories that won it a key piece of credibility, as an advisor to – and in some cases, supplier for – Kroger on its “Taste of Tomorrow” program. The team prides itself as having created an “emerging beverage table captain” position, be it formal or informal, for many of the conventional grocers who are themselves moving toward the health-and-wellness type products that are so in vogue. It now fills that role across a variety of conventional channels, including Wal-Mart, Target, and other grocery and convenience accounts.

“You just find a way to win,” Stepper said. There are rules and models to be broken, he added, echoing Kavanaugh’s philosophy.

Still, the one aspect of L.A. Libations’ business that has enabled all the rule-breaking is its effective approach to brand building. From the start, its stock-in-trade has been its ability to get something more out of brands that have been lagging – particularly when it comes to parts of the Venturing and Emerging Brands portfolio at Coca-Cola. With the team’s relationships, it was able to get relatively unknown products like Zico and Illy into Target and Walgreen’s, places where the increased exposure and attention to detail left them better-positioned to catch the eye of crosschannel shoppers.

It’s not that the L.A. Libations way has been a guarantee of success – just look at other VEB products that have fallen by the wayside, even when the team lends a hand. But the company prides itself as having gotten the best possible outcomes for as long as it could with drinks like the ill-fated fermented CSD, Cascal, and Sokenbicha, a barley tea. In both cases, L.A. Libations was able to get the product into a few of its top clients, places like Costco, where they at least had a fighting chance.

An even bigger job the company took on was a 12-month contract to try to combat the bleeding at ill-fated FRS, a brand with millions of dollars invested in it but little ability to connect with consumers – at a time when FRS was primarily going to market through a partnership with PepsiCo. “It was weird for us, because we were considered a better option that Pepsi,” Sarti said. Despite the contract being lucrative for the 38 BEVNET MAGAZINE APRIL/MAY 2014

company, “There wasn’t a place for the brand to get to the next level.

What I realized was that it was out of what we wanted to do, as well.

We’re pediatricians, obstetricians. They needed an oncologist.”

Key to the L.A. Libations operational mix are a series of employees stationed in Cincinnati (Kroger), Minneapolis (Target and more), Florida (Albertson’s), Dallas (Bolden’s stomping ground) and the West Coast, where Stepper and Sarti have deep relationships. While the company’s weakest link is with Whole Foods, it is expert at incubating brands within Costco and other natural channels: Fresh Market, Fresh & Easy, Sprouts. The philosophy is, why go for Whole Foods distribution, when instead you can go for Costco, Target, Wal-Mart and more?

And now L.A. Libations has also spent three years building itself into a brand producer, as well. Rather than simply wait while VEB or other clients supplied brands, Stepper, Sarti and Bolden started incubating one of their own, Aloe Gloe, a light, pulp-free “aloe water” that offers a more mainstream take on many of the more exotic aspects of aloe while still highlighting the core ingredient. That brand is more in keeping with the slow-growth approach that many entrepreneurs have to follow, but it has started to take off, doubling from $1.6 to $2.9 million in sales in Southern California, with a $5 million projection for this year. Similarly, L.A. Libations has begun assembling a portfolio of other brands in categories it believes have a chance to emerge as important parts of the overall beverage landscape, investing in Chia/Vie, a chia drink that deploys ground chia instead of whole seeds, and Obi, a probiotic soda, as well as relaxation brand Just Chill. In all three cases, the company believes it has a sound, slightly more conventional product positioned to take advantage of market opportunities created when a category starts to take off.

“We don’t know which category emerges next, but when one does, we’ll be ready to be the number-one product in the segment,” Stepper said. Doing it outside of Whole Foods, he said, isn’t a drawback. “The world is changing fast; we’ve heard (Kroger’s) Mary Ellen Adcock say they’re going to outsell Whole Foods in organics. Costco is selling more organic products than ever. The consumer is going there, and they’re able to show so much value.”

It is, admittedly, a careful dance. L.A. Libations is promoting some parts of its internal portfolio, some of the brands it carries, and others that it doesn’t – it’s category captainship, but for emerging categories. In some cases, that means recommending against products it carries because the category isn’t ripe yet, and in others, it recommends brands it doesn’t carry to retail gatekeepers in the hopes of building broader categories. One example? The company has been championing non-portfolio brand Bai across a number of retailers, hoping to build out a natural, functional water set.

“There’s a lot of brands that we make recommendations to retailers on that we don’t work with,” Stepper said. We try to be completely as objective as we can – and when we’re pushing our own brands forward, we are very transparent about it. If we have a product that isn’t ready for the store, we won’t push it, either. We’ll tell the retailer and the supplier.”

The agenda? Reliability, audacious creativity, and transparency of motive help the clients, the company, and the retailers.

“Transparency is a mechanism we’ve used to survive the changing tide of the business,” Sarti says. “Look, we’ve have such diverse stakeholders and relationships, everybody has to know the score.”

And if they don’t, they can just have Snoop Dogg tweet it.

M IS FOR MIKE REPOLE Power is nothing if your aren’t using it, and Repole, the former president of Glaceau who cashed in when the brand sold to Coke for $4.2 billion, isn’t shying away.

Like co-founder Darius Bikoff, Repole has the wallet and the reputation to settle back and have nothing to do with the beverage business ever again – but instead, he’s doubled down with fellow entrepreneurial poster boy Lance Collins on Body Armor, a three-year-old sports drink that is just now emerging from the embryonic stage. Of course, Repole’s nursery covers a lot more ground than is typical.

Distribution in 16 states and $25 million in revenue (per IRI data from last year) would be enough for most companies to either declare themselves a success or to close up shop – depending on how much has been spent behind the brand already. For Repole, however, it’s just the start.

Although he acknowledges the skepticism that the brand’s early problems with taste and formulation – as well as direction – have engendered, while maintaining his win-at-all-costs attitude.

“A lot of people are putting our chances at about 10 percent,”

Repole says. “I put them at 110 percent.”

Repole, known as one of the most driven competitors in the CPG world (his family fund is called Driven Capital) recently hooked up with another highly driven competitor, Kobe Bryant.

For a small brand to sign up a sure Hall-of-Famer is an indicator of just how well Repole plies his trade, and when the sparks finally hit for the brand he does have an army of athletes already on board behind him.

Still, there’s a lot of road to cover; seemingly well-financed and well thought-out slam dunks like FRS and Adina have been similarly set up only to fail.

But the sheer scope once again shows why Repole is is part of the alphabet.

Beyond his own pursuits, however, Repole has the street credibility and the network to have the industry wired; Vitaminwater sales – and shares – built fortunes for a lot of distributors, investors, and employees. Having the ability to get someone’s ear – and the cash to make sure they hear you loud and clear – that’s just plain clout.

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N IS FOR NEW BELGIUM The epitome of measured growth, New Belgium was one of three breweries to establish East Coast manufacturing, but it’s got the most at stake. Sierra Nevada is already national, and Dale’s Pale Ale isn’t yet the same scale. In its Ranger IPA and Fat Tire Ale New Belgium, run by Kim Jordan, is on the cusp of having two SKUs that could be tap standards nationally, but it’s also threatened from below by a rising tide of smaller craft operations and fast-growing Lagunitas. Still, Jordan has shown she’s the epitome of the thoughtful cofounder and having a business that lives its ideals makes it the craft company that people love to root for.

O IS FOR “OLD GUARD” and there’s a lot of them. Despite the influx of youth, they remain key links in the investment, advising, and legitimacy of new beverage companies: look at Jack Belsito conferring instant credibility on a young coconut water brand when word got out that he’d invested in ZICO and then turning Voss around; Greg Steltenpohl’s second coming at Califia; even C.J. Rapp and Jeff Moats making a strong run behind Karma, the leading cap-infused beverage company.

P IS FOR PLAINTIFFS’ ATTORNEYS, the bane of the existence of many a beverage company. As with certifying organizations, the increase in product claims means an increase in the likelihood that a lot of these claims will be explored – in court.

With lawsuits being filed in the name of plaintiffs against multiple companies, the Knights of the Class Action know they can make a good living by extracting cash for legal technicalities from companies like Naked,

POM, and Anheuser-Busch.

But early action cripples entrepreneurs, who have found they have to be much more careful about where and when they launch, lest they end up hamstrung before they can even run the race.

took note when Starbucks began selling sodas in-store; they really started paying attention when Starbucks registered “Fizzio” – perhaps indicating that they’ll be selling home carbonation soon enough.

Q IS FOR Q DRINKS.

Haven’t heard of them?

They’re the biggest Red Bull distributor in the New York area, making them not just powerful in the sense of the beverage business, but actually an entity with global reach: think about it – without The Beverage Works making its deliveries every day, Manhattan would cease to function.

What else can we say? It’s “Q.” But founder Jordan Silbert has raised the high-end soda brand’s game in the past three years, taking the line from a focus on mixers into a variety of great-tasting, traditional flavors with lower calorie profiles and great ingredients.

R IS FOR RODNEY SACKS, the CEO of Monster Energy, which has done everything bigger, brassier, and ballsier than any other beverage company on record. While Red Bull might have gotten there first, it’s Monster that is able to dictate more of the future of the beverage business via its deals with Coke, Budweiser, and high-impact distributors like Big Geyser in New York.

And beyond that, the company is once again stretching its legs with Hansen’s brands like Hubert’s. Monster sits on billions of dollars in capitalization – will it be a hunter or a target down the road?

T IS FOR THE BEVERAGE WORKS.

W IS FOR WEILAND, not the crazed singer but Broker Bill, whose touch extends past getting things onto the shelf and now includes deciding their fate with regard to financing via Boulder Brands’ Venture Capital arm. If Bill Weiland has stamped it as having potential to grow, chances are it’ll realize that potential.

X IS FOR XING…AND XYIENCE, a pair of products run by savvy sales teams that have only grown year-over-year. In Tom and Scott Lebon and John Lennon, these two brandss are more than ready to hold their own in any shelf set.

U IS FOR UZZELL • V IS FOR VEB

S IS FOR HOWARD SCHULTZ, CEO of Starbucks, who has taken the company storming back from stumbling adolescent to mature giant, exercising its power in grocery, on-premise, and now, apparently, as a source of tap lines as well. From purchasing new technology like HPP facilities and partnerships with payment system Square, to having its own distribution and brickand-mortar assets, Schultz has the power to disrupt the beverage business across all kinds of categories. CSD companies

40 BEVNET MAGAZINE APRIL/MAY 2014

SCOTT UZZELL: VEB’S NEW PRESIDENT EXPECTS STABILITY After seven years, there’s a new head of Coke’s Venturing and Emerging Brands Group (VEB) – Scott Uzzell. VEB is on this list in its own right as one of the most enduring VC platforms for entrepreneurial beverage companies. While Coke’s reputation has long been one of squelching new initiatives, VEB has helped nurture them both inside and outside the network, meeting with and offering all possible guidance to as many companies as possible.

The big number for the VEB approach – it’s charged with growing the next “billion dollar brand” after all – still hasn’t been hit, but there are strong indications that the company is building something that can last, both for the company and for the entrepreneurs it courts: after all, it’s become a company where an outsider like Seth Goldman and a group of Coke insiders have been able to coexist long after the company’s initial investment in Honest Tea. “Over the last 7 years, we have seen great results,” Uzzell said.

“Our strong portfolio, including Honest Tea, ZICO, illy issimo and Core Power, is evidence of the team’s hard work. Plus, NOS and Fuze are now successful members of The Coca-Cola Company’s portfolio. And we have experimented with internally developed brands taken from our international portfolio and learned a great deal from these efforts, as well.”

A long-time Coke executive, Uzzell replaced Deryck Van Rensburg in January, becoming just the second president of the group. Perhaps the biggest indicator of the kind of power that comes with the job at VEB is that Van Rensburg himself has gone on to another big-budget, bigpotential entrepreneurial situation, heading Coke’s partnership with Green Mountain Coffee Roasters on a fizz-at-home project.

While that’s all well and good for Van Rensburg, Uzzell is now in the driver’s seat at VEB. He’s even bringing in experience that Van Rensburg didn’t have, as he recently doubled back from heading one of VEB’s core portfolio companies, ZICO. Uzzell’s stint at the coconut water purveyor was part of the endgame, as he helped the company grow enough to hit its final investment triggers and then stayed on to run it following the consummation of the long-simmering investment.

One thing working in Uzzell’s favor as he takes over the leadership role: stability.

“Many folks have been on the team since inception and have grown with our experiences,” he said. “When I came on board, VEB didn’t really miss a beat given the continuity of the leadership team.”

Uzzell agreed to be interviewed by BevNET for the feature – his first public discussion of his new position and the future of VEB.

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BevNET: You were out in the field with ZICO before coming back to VEB – so how does that kind of entrepreneurial role inform what you’re bringing to the brands that are now in the portfolio, and how do you think it will affect the way you look at brands for potential partnership?

Uzzell: In particular, my time at ZICO helped me better understand what it takes to be an entrepreneurial operator and run a business like an operator. The choices we have to make with less history of experience are tougher but exciting. This will be an important lens as I work with our existing venture brand leaders and when we consider future investments BevNET: What do you think will be the biggest difference in the leadership handoff from Deryck to you?

Uzzell: I am honored by the confidence Coca-Cola leadership has in me to select me for this opportunity. But, I think it also speaks to the VEB team as a whole. We are incubating talent much like we are incubating brands. My appointment demonstrates Coca-Cola’s commitment to VEB and intent to continue in the direction we have been heading.

In VEB, we always have had a model of “Retaining the entrepreneurial model” through investment as well as “Replicating the entrepreneurial model” through internal innovation. I have been fortunate to have been on both sides - in my roles in VEB and then while at Zico. The learnings I have gained at ZICO as well as my other positions at VEB and within Coke will help ensure success as we continue our focus of identifying and helping to build high-potential growth brands in North America.

BevNET: What are the key tenets of the VEB mission that are easiest to drive forward? What has been the group’s biggest accomplishment? Biggest mistake?

Uzzell: If anything, I think people will be surprised in the lack of big changes for VEB. I believe in our mission and the direction we are heading. I plan to continue steering the team toward the same goal: to find and develop the next generation of brands with billion-dollar potential. That said, we do need to stay current and evolve with the market. When we started VEB we were rather unique in that we were both investing and building brands. But, we need to remember that to stay competitively advantaged, we need to continue to push ourselves to provide innovative thinking on deals, operations and even technology. I am confident that we can do this but also know we need good partners on the journey.

BevNET: VEB has had better luck with acquired/partnered brands than internally created ones – will we see more attempts at internal creation or is the sweet spot for the group in investment and acceleration?

Uzzell: Moving forward, we will remain focused on our current portfolio – Honest Tea, ZICO, illy issimo and Core Power. But, we will not stop looking for more brands with billion-dollar potential.

We need to continue to do both sides of this equation as the mix of our portfolio and the learnings and returns we get are contingent upon the balance. That said, admittedly we have been better at the investment side since we tend to invest once risk and time have been overcome.

42 BEVNET MAGAZINE APRIL/MAY 2014

Y IS FOR YOUTH With youth comes inexperience and, at times, an inflated sense of understanding. However, some of the beverage industry’s most compelling entrepreneurs haven’t yet hit 35 years and they’re not complaining – in fact, their youth is a source of empowerment because of its untethered nature.

“Being young, what really do you have to lose?” said B.J. McCaslin, the co-founder of Coco Cafe. “I got a girlfriend, she’s real supportive, but I don’t have a family. Say tomorrow, I woke up and I lost it all. I could just start over again on something new.”

Youth knows its limits, too: McCaslin regularly seeks advice from Michael Goldstein, 39, Vita Coco’s VP of market development and a former field development manager at Glaceau. Even so, he respects Vita Coco for granting autonomy to a number of young people, such as himself and brand manager Brian Olney, 29.

Jennie Ripps, the founder of Manhattan, N.Y.-based Owl’s Brew, has generated plenty of buzz in the city’s drinking haunts with her brand’s tea cocktails.

Ripps, 33, and co-founder Maria Littlefield, 26, have noticed a camaraderie between young entrepreneurs who endure their struggles together.

“There’s a feeling of community,” she said. “It’s really cool to be a part of that.”

Head over the bridge of your choice to 33 Flatbush Avenue in Brooklyn and you’ll find another few members of the youth movement: Tyler Gage and Dan MacCombie, the 28-year-old cofounders of Runa.

Gage said that youth grants him liberties, such as the the freedom to throw Runa events on the weekend without having to think about pesky things like, you know, children. In youth, he finds the positives.

“There’s basic things,” Gage said, “like not having a family or any

responsibilities aside from working and feeding and clothing myself.”

Luke Livingston, the owner and founder of Baxter Brewing Company, based in Lewiston, Maine, said that he doesn’t think much about his age.

Livingston, 29, said that he works alongside plenty of young, creative people. He added that industry pioneers like Ken Grossman, the founder of Sierra Nevada, and Sam Calagione, the founder of Dogfish Head, started their breweries when they were twentysomethings.

Most of the craft beer industry understands the history and, thus, doesn’t balk at younger brewers like himself.

“Craft beer is young at heart,” Livingston said.

Z IS FOR ZEVIA, at $60 million and tracking at much higher growth for next year, Paddy Spence has this product on point and performing. Progressive product improvement and focus count for a lot, as does an emphasis on natural calorie reduction and an understand that the same purchasing dynamics that led to the growth of Coke and Pepsi can also power a challenger brand. But improving the flavor a lot has also been the key factor for Zevia’s growth.

For beverage companies A to Z, that remains the key lesson – make it taste good, and you’ve got the power of taste on your side.

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Still Loko Four Years Later

By David Eisenberg In 2010, Four Loko found itself somewhere between Legos and Windex on the definitive list of things that no human being should ever consume as compiled by screaming heads on television, concerned politicians and horrified parents alike. The flavored malt beverage (FMB), known both affectionately and disturbingly as “Blackout in a Can,” packed a jolt of caffeine with a walloping alcohol content, but also boasted palatable fruit flavors in its infamously huge, brightly colored 23.5-oz. cans. Those attributes, paired with a rash of debauched and deadly incidents across the country where the drink could be found at each proverbial and literal crime scene, earned the drink the unwanted reputation as a weapon of campus destruction.

It was just too much booze, with too much caffeine, in too big a can, and it was bound to kill us all. And people loved it. In the year leading up to Phusion’s forced decision to tweak Four Loko’s formula in November 2010 by voluntarily removing its controversial ingredients – caffeine, guarana, and taurine – its top three flavors sold an accumulative $97 million, BevNET re-

44 BEVNET MAGAZINE APRIL/MAY 2014

ported around the same time, making them the #3, #5, and #18 overall SKUs in the “progressive adult beverage” (PAB) category.

But the heat surrounding the brand was intense, which helped bring about a number of still unsettled wrongful death lawsuits, and the fallout from lobotomizing the recipe cost the company 30,000 points of distribution. “We were off the shelves in a lot of markets for two months,” Jeff Wright, co-founder of Phusion, told The Fix in April 2011. “[T]he competition came in and took that distribution.” Now, with the help of some new rising flavors as the standbys decline and a staunch defense of its practices past and present, the company’s flagship brand is holding on in the PAB category, despite its name’s enduring presence on political hit lists.

Still, there have been some changes in the old gang. One of Phusion’s original bad boys, Watermelon, is floundering since being stripped of its super powers. Data from IRI, a Chicagobased marketing firm, measured through Dec. 29 of last year had the brand down 16.6 percent in dollar sales in multi-outlet and convenience channels (MULC), as it rang in $32.7 million.

Fruit Punch, another former titan, saw its dollar sales slip 5.7 percent in the same time span, selling just south of $41 million in MULC. That downward trend has continued into this year as Watermelon’s dollar sales have decreased 15.6 percent through Feb. 23 versus where they were at that time a year ago, while Fruit Punch was down 0.2 percent.

“Some of the [product] changes were certainly critical,” said Jeff Nowicki, chief strategy officer of BUMP Williams Consulting, a beverage industry insight firm. “The caffeine infusion, that was huge. They were using that as kind of a Red Bull.”

Nowicki added that losing its notorious energy boost may have changed the consumer acuity of the brand, skewing its perceived value.

“I think the consumer perception was it was a big bang for their buck and that’s not the case today… Obviously it certainly doesn’t pack as much in the can,” he said.

Meanwhile, weapons of slightly less mass destruction have shown gains. Anheuser-Busch InBev’s Bud Light Lime StrawBer-Rita hit the market in the FMB category in March of last year and raked in more than $245 million. Sales of its Lime-ARita, introduced the year prior, were up 35 percent in 2013 and earned $201 million. Doubling down on the success of the Rita brands, A-B InBev announced in March of this year its plans to add two new flavors to the lineup.

The flailing sales of Four Loko’s Watermelon and Fruit Punch are noteworthy as well because the PAB category itself has grown 16 percent this year in MULC, behind only craft and cider in the broader beer category.

46 BEVNET MAGAZINE APRIL/MAY 2014

Phusion did regain those 30,000 lost shelves over the years, however, and is now selling Four Loko in 49 states (excluding Utah) and new flavors, bereft of caffeine, have been flourishing nevertheless.

“To keep us as [at] the forefront of consumer demand, earlier this year we introduced our newest flavor, Blue Hurricane,” Phusion president Jim Sloan wrote in an email to BevNET, which brings the Loko portfolio to Jim Sloan President, Phusion nine varieties. Phusion declined for anyone to participate in a more formal interview.

Dollar sales for Peach are up 47.2 percent in the convenience channel up through February, though the brand sold only half of what Watermelon had in that given time. UVA Berry is up in these channels 2.9 percent. Mirroring the rising trend of seasonals in the craft category, the XXX Seasonal grew 14.9 percent.

So there are positives (though Lemonade, in the convenience channel alone, declined 16.2 percent). Sloan declined to disclose anymore specific sales figures, but added that Phusion is “comfortable with the number represented” by IRI. As such, Phusion’s dollar share in the PAB category is at 14.7 percent, according to Nowicki, down from 17.9 percent in 2010.

That share number alone is proof positive that Phusion doesn’t need caffeine to stay afloat, but caffeine, as you may recall, was never the only controversy surrounding the brand.

In fact, a number of wrongful death lawsuits have also been levied at the company, alleging in some way or another, that Phusion failed to disclose the dangers of its product, a negligence that ultimately led to death or other injury.

Sloan said the company does not typically comment on ongoing legal matters, but did offer the following on the matter: “[I]t is important to remember that just because a lawsuit is filed does not mean it has merit. We have successfully resolved most of the lawsuits and are confident that we will achieve that same result for the handful of cases that remain.”

But as long as there are social media outlets, it seems people are going to be talking about Four Loko – whether that’s to the brand’s advantage or not is in the eye of the observer.

On November 16, 2011, attorneys general from 36 U.S. states and territories submitted comment to the Federal Trade Commission (FTC), praising its complaint with the company, stating that Phusion’s “express or implied representations” on social media and in advertising that a single can of Four Loko in its more nefarious form was safe for individual consumption constituted “unfair or deceptive practices or false advertising in violation of the Federal Trade Commission Act.” Fast forward to 2014: the headlines are reporting the final demise of Four Loko as Phusion agrees to pay $400,000 in a multi-

state settlement over allegations that the company “unlawfully marketed its flavored malt beverages, promoted the misuse of alcohol by underage individuals, and failed to disclose the effects of drinking alcoholic beverages combined with caffeine,” according to a statement from Massachusetts Attorney General Blue Hurricane brings the Loko portfolio to nine varieties Martha Coakley’s office. as one of the above commenters so eloquently put it, clowns, The highlighted social media campaigning that so irked Janet Evans, with the FTC’s Bureau of Consumer Protection, these attorneys general were of the predictable ilk and posted said simply there is no public information on that. primarily by consumers to Four Loko’s Facebook pages: Sloan added, however, that this settlement was “a practical way to “these aint for no sissy these will get u right,” or “four loko move forward,” and finally put the past four years to bed, maintaindid more than turn me into a clown last night,” or “Already 3 ing the company has not broken any laws with its advertisements or blueberrys in the system,” – you get the picture. recipes. Nowicki, the consultant, had a slightly different take.

“While we strongly support the right of our consumers to “If they had been misrepresenting their brands and 20 states voice their opinions on our social media sites, we never want to went after them, and they got a $400,000 settlement, that’s almost see our products portrayed irresponsibly. Added Sloan, That’s like, really?” he said. “They just gave them something to placate why we constantly monitor our sites to remove unacceptable somebody and go away. If it would’ve been a multi-million dollar comments or images,” added Sloan, who said that the company type settlement, I would’ve said, ‘well, then I suspect they had some still stands by its belief that caffeine and alcohol can be mixed major infractions,’ but I suspect they nitpicked minor infractions.” and consumed safely and responsibly.

A Facebooking patron had yet another take on Four Loko, this When reached for comment on whether Phusion has sufone grammatically haphazard and dated April 13, 2014: “One ficiently distanced itself from promoting the brand as an energy 61870_Treatt_Wellness_Advert_BEV_NET_Layout 1 16/04/2014 16:36 Page 1 time i drank four loko.. Thats all i remember.” drink or a beverage designed especially to turn its drinkers into,

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BRAND NEWS

Malternatives

Boston Beer Co. launched its first Twisted

Tea brand extension, Twisted Lemonade, in February across the U.S. According to the company, just as Twisted Tea tastes like real iced tea, Twisted Lemonade tastes like homemade lemonade. The product is available in three flavors — Twisted Lemonade, Twisted Pink Lemonade and Twisted Strawberry Lemonade — and in three forms, 6-packs of 12 oz. bottles, 16 oz. cans and 24 oz. cans.

Distribution will focus on grocery stores, liquor stores and convenience stores.

Phusion Projects, LLC, debuts Four Loko

Blue Hurricane this spring. Blue Hurricane Four Loko, a blend of tropical flavors, continues the brand’s trend of bringing cocktail flavors to the beer industry. The new flavor will be available at 12 percent ABV in 23.5 oz. cans, and replaces Coco Loko, which will be phased out as Blue Hurricane gains distribution. Available in nine different flavors, Four Loko continues to be one of the most popular progressive adult beverages on the market.

Anheuser-Busch InBev has released two new line extensions of Bud Light Lime-Rita: Raz-Ber-Rita and Mang-O-Rita. Both products have 8 percent ABV and blend the flavor of Bud Light Lime with the taste of raspberry and mango margaritas, respectively. Best enjoyed over ice, the products are available in 12-packs of 8 oz. cans, 4-packs of 16 oz. cans and 24 oz. cans. The Ritas are also available in a Mix-A-Rita 18-pack, which includes six Lime-A-Ritas, four Straw-Ber-Ritas, four Mang-O-Ritas and four Raz-Ber-Ritas.

Mike’s Hard Lemonade Co. has released Mike’s Hard Lemonade FROZEN, which comes in four flavors: Mike’s Hard Lemonade FROZEN, Mike’s Hard Black Cherry Lemonade FROZEN, Mike’s Hard Classic Margarita FROZEN and Mike’s Hard Strawberry Lemonade FROZEN. The products are available in single 10 oz. pouches.

According to the company, unlike other pouch products, Mike’s FROZEN pouches aren’t sticky because of special production technology and have the smoothest ice crystals for an almost sorbet-like experience.

COCO Cocktail is preparing for a June launch and is initially targeting the Florida, Texas, California and Las Vegas markets.

The product is made with coconut water

48 BEVNET MAGAZINE APRIL/MAY 2014

and comes in three flavors: Skinny COCO, COCO Mango and Maqui COCO Mojito.

Bon Affair is a premium wine spritzer made

with California wine, purified sparkling water and electrolytes. The product has no added sugar and a 6.5 percent ABV. Bon Affair launched in Whole Foods in Southern California this past summer and has expanded into Albertsons throughout San Diego.

Cordina New Orleans Cocktails has

launched a new 100-calorie line of its premixed cocktails in 10 oz. pouches. The product is available in Classic Lime, Strawberry Daiquiri and a new flavor, Mango Daiquiri.

The company launched the 100-calorie line in response to consumer demand for healthier alternatives. The line hit retail shelves in March.

JOOSE Margarita is now available in 12-packs of 12 oz. cans (8 percent ABV) at Walmart stores nationwide. The product comes in Classic, Peach and Strawberry flavors and is also available in 23.5 oz. cans (12 percent alcohol by volume). The new product size is a response to consumer demand for smaller, more portable packaging, according to United Brands Company, which markets the JOOSE brand.

Slim Lizzy’s Cocktails are now available in 1/6th barrel kegs constructed out of 100 percent recyclable PVC, which means that no keg exchange program is required, according to the company. At 45 calories per 4.5 oz. serving, Slim Lizzy’s Cocktails offers a lower-calorie option on tap. The keg cocktails are available in both Margarita and Cosmopolitans flavors and offer a convenient serving method for on-premise accounts.

However, Slim Lizzy’s is also available in 8 oz. cans and 750 mL glass bottles.

Friends Beverage Group, makers of Friends Fun Wine In A Can, has announced that its line of canned wine is now available at Walmart stores throughout Florida and Texas. The beverage comes in six flavors: Red Sangria, White Sangria, Rose Moscato, White Moscato, Strawberry Moscato and Peach Moscato. The wine is imported from southern France and is packaged in lightweight aluminum cans. Friends Fun Wine In A Can contains 75 calories per serving and is 6 percent ABV.

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PROMO PARADE

Promotions, events and specials for the industry

Bourbon Hall of Famer Jimmy Russell Celebrates 60 Years with Wild Turkey Jimmy Russell, Wild Turkey’s Master Distiller and the longesttenured active Master Distiller of any whiskey brand in North America, celebrates 60 years of service with the distillery this year. To celebrate his achievements, a number of special events will take place throughout 2014, making this “The Year of Jimmy Russell.”

Russell grew up less than five miles from the Wild Turkey distillery in Lawrenceburg, Kentucky, which employed both his father and wife Joretta. While keeping it all in the family, he learned the traditions and techniques of Bourbon craftsmanship and began working at Wild Turkey on September 10, 1954.

Russell’s passion for Bourbon led him to study under whiskey luminaries, in-

cluding Bill Hughes, Wild Turkey’s second Master Distiller; and Ernest W. Ripy, Jr., great-nephew of distillery founder James Ripy and Wild Turkey’s third Master Distiller. Russell recalls being taken under Hughes’ wing and learning everything about the business from the ground up.

Among the many planned activities to celebrate Russell’s legacy, the grand opening of Wild Turkey’s new, state-of-the-art

Visitor Center served as a platform to kick off “The Year of Jimmy Russell” among his fellow Kentuckians. The Visitor Center includes photos and memorabilia that serve as a time capsule of Russell’s colorful life.

Additionally, Wild Turkey will release a commemorative Diamond Anniversary limited-edition Bourbon created by Russell’s son, distilling partner and Bourbon Hall of Famer Eddie Russell. Diamond Anniversary will be available first at the Visitor Center starting in April, but will expand to key markets around the country this fall.

Another tribute to Russell will come in the form of a documentary allowing fans both old and new to get a glimpse into the life of this legendary whiskey maker.

Coca-Cola and FIFA Bring World Cup Trophy Tour to Four U.S. Cities Coca-Cola and FIFA recently brought the world’s most celebrated trophy to the United States during the culmination of the largest, most fan-filled FIFA World Cup Trophy Tour ever. The legendary FIFA World Cup Trophy visited four U.S. cities – Washington D.C.; Miami; Atlanta; and Los Angeles – on the final leg of its world tour before making the trip south to Brazil, host country of the 2014 FIFA World Cup. To celebrate the upcoming 2014 FIFA World Cup, Coca-Cola has created the largest marketing program in the company’s history. “The World’s Cup” campaign includes one of the world’s most accessible and inclusive fan experiences centered around the soccer trophy. As part of “The World’s Cup,” the FIFA World Cup Trophy Tour by Coca-Cola, which launched in September of last year, is giving more than 1 million people around the world the chance to experience soccer’s most coveted prize in their own communities. This nine-month journey is the largest and longest FIFA World Cup Trophy Tour and is the first ever pan-Latin America tour, with events in 39 countries across the region that is home to the host nation of the 2014 FIFA World Cup. Once completed, the tour will have traveled for 221 consecutive days, visiting every country that has ever won the FIFA World Cup as well as 51 countries that have never had the opportunity to host the trophy.

Coca-Cola also will introduce special limited-edition FIFA World Cup-branded bottles, fridge packs and collectible can designs.

Designed by Brazilian artist Speto, the commemorative packaging embodies the spirit of Brazilian street art and features the colors of the country’s flag, according to the Coca-Cola. The package designs will be on store shelves nationwide in May and June.

50 BEVNET MAGAZINE APRIL/MAY 2014