BevNET Magazine June 2015

JUNE 2, 2015

THE A-TO-Z OF POWER IN THE BEVERAGE BUSINESS F IS FOR FIRST BEVERAGE AND ITS FOUNDER, BILL ANDERSON

ENERGY DRINK MARKETING MELLOWS

CRAFT BREWERS CONFERENCE 2015 IN REVIEW

IFT AND FANCY FOODS PREVIEWS

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Contents • Volume 13 • No. 4

40

COLUMNS

FEATURES

ON THE COVER

6 First Drop Race and Natural Foods II: How We Got Here

30 CBC in Review Issues Lurking in Oregon

40 2015 A-to-Z of Power The Beta List Plus: How the Alpha Dogs Fared

8 Publisher’s Toast Random Thoughts

34 From Wild to Mild Energy Drink Marketing Mellows

28 Gerry’s Insights Power in Energy

TRADE SHOWS

DEPARTMENTS

46 IFT Preview Take Classes in Chicago

10 BevScape Coffee Grows, Diet Coke Declines 16 New Products Sparkling Ice Cans

48 Fancy Foods Summer Preview 2,500 Exhibitors Hit Manhattan

24 Channel Check What Motivates Capri Sun?

JUNE 2, 2015

THE A-TO-Z OF POWER IN THE BEVERAGE BUSINESS F IS FOR FIRST BEVERAGE AND ITS FOUNDER, BILL ANDERSON

ENERGY DRINK MARKETING MELLOWS

CRAFT BREWERS CONFERENCE 2015 IN REVIEW

IFT AND FANCY FOODS PREVIEWS

cover.indd 1

5/13/15 8:50 PM

50 Promo Parade No, Dummy, the Hendricks Blimp!

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The First Drop

By Jeffrey Klineman

I can’t stop thinking about Baltimore. The city where Freddie Gray was killed – allegedly by a “rough ride” from six Baltimore police officers, who have since been indicted – is also the the home of Natural Products Expo East.

The Baltimore Convention Center is built along the city’s Inner Harbor, a lovely enclave of modern and restored buildings stocked with high-end designer furniture, great bars and restaurants, nice hotels, stadiums, and, yes, a Whole Foods.

Those of us who attend annually are wary of hustlers outside; we hurry in behind our admissions badges, hungry for tasty food samples.

Three miles northwest, near where Freddie Gray was arrested, a freshlybuilt CVS burned. Some now use that drugstore as their high perch for casting disapproval at protesters, a flashpoint for commentators to denounce those whose rage would cause them to destroy their own neighborhoods.

Four miles east of that CVS, the lovely Mt. Washington neighborhood features some of the best schools in the area, and a Whole Foods that dates back to 1996.

As the National Guard arrived in Baltimore in the days that followed the death of Freddie Gray, an Instagram post from the Whole Foods in the Inner Harbor pictured troops hoisting a Whole Foods sack, captioned with this: “We teamed up with @mtwashingtonwfm to make sandwiches for the men and women keeping Baltimore safe. We are so thankful to have them here and they’re pumped for Turkey & Cheese!”

Now, Whole Foods has a much more nuanced view of race than can be seen via a simple picture on a single store’s social media feed. Corporate said the stores were supplying food to community centers as well, feeding kids who couldn’t go to school because of the chaos.

But optics matter, and this is a picture of what we’ve been discussing recently, which is a lack of racial and ethnic diversity at the heart of the Natural Foods Industry, and why that needs to change.

This vision of Baltimore illustrates what we’re exploring this time: how an indus6 JUNE 2015 BEVNET MAGAZINE

Race, Ethnicity, and Natural Food, Part II: How We Got Here try whose brand is largely “doing well by doing good” hasn’t prioritized racial and ethnic diversity, despite the obvious and complementary benefits.

So how did we get here? How did a group of largely progressive, well-intentioned, semi-revolutionary entrepreneurs intent on changing the world manage to elide the issue? I agree that it’s not intentional; nevertheless, effects often defy intent. I see causes in geography, education, and economic status.

Early natural products entrepreneurs started their brands in areas where there was a demographic “sweet spot” – the communities that combined education, access to either agricultural goods or restaurants, and often, money. Some were outdoors-focused, others had tourism as a driver, others were well-known havens of rebelliousness. Urban or rural, they often had academic roots. The campus based social and political movements of the 1960s were a catalyzing point for many of the ideas that resulted in the emergence of the natural foods business, with the proenvironment and back-to-the-land movements acting fellow travelers with activists fighting for racial and gender equality.

While there were some (like comedian Dick Gregory, a well-known black political activist and natural foods advocate) who overlapped, the campuses themselves weren’t diverse at the time – they were still largely dominated by white men.

The first generations of today’s natural food entrepreneurs were rooted in largely white communities: Boulder, Colo., California’s Bay Area, Vermont, wealthy sections of Southern California, Western Massachusetts. As companies grew, those roots exerted a gravitational pull for the industry. Is that necessarily wrong? Certainly not, but they pulled the industry even further away from a rich vein of black and hispanic city dwellers.

Fred Opie, a Babson College History and Foodways Professor told me that Gregory’s mentor, Dr. Alvenia Fulton, was a celebrity herbalist and naturopath, treating Bill Walton and Muhammad Ali – but her store, and many stores like them in the black community, remained

isolated, even as the pair became regular speakers to the growing industry. There are systemic issues of location, race, and class at play there that we’ll explore a bit further in a moment.

Still, given its roots in 1960s social and economic upheaval, it’s no surprise that some of the early incubators of the natural products industry were equally parts political statement and commercial enterprise. From a retail lens, the 1960s and 1970s grocery cooperatives were (and serio-comically remain, if you’ve ever followed, say, a Park Slope Co-Op policy meeting) an experiment giving consumers and members the vote of their collective wallets on issues of economics, agriculture, race, gender, labor policy and the environment. That legacy extends through the successful brands now driving the industry – but honing the point of difference into a consumer-friendly LOHAS position has silenced other parts of the discussion.

Conscious sourcing and novel supply chains yield expensive products; to grow, the industry had to locate consumers who could handle the costs. Maybe that’s just business, but it has – quite unconsciously – led to economic, and by effect, racial, stratification. Baltimore is just one example. In seeking educated and prosperous consumers, key retailers have followed them into equally stratified suburbs, and it’s only recently that they have moved back into cities – largely following gentrification trends.

Meanwhile, the success of early companies like Ben & Jerry’s and Kashi has both inspired and diluted the ballyhooed mix of freaks, yogis and farmers that showed up at Natural Foods Shows in the early 1980s (Dick Gregory launched a juice cleanse from one of them) into the current startup mentality.

But I think that with the stakes raised, purpose has narrowed. Most of the people I’ve interviewed don’t believe growing companies have intentionally avoided diversity in their hiring. But I’ve repeatedly heard that with the money on the table, founders work with their heads down, trying hard to establish their companies, and LOHAS values are their core brand. While

more mature businesses are beginning to look at the issue, racial and ethnic diversity fall in the column of “nice to have” for brands that are still struggling to make it. The younger companies run leaner, and they hire for experience.

Still, focus is no excuse – and it’s ultimately harmful. What happens is that the personnel become entrenched within the body of connections that founders and their staffs develop along the way. The legacy within the industry is that it’s still hard to break in if you don’t know someone, but as one veteran power broker told me, the industry must start looking for new talent: there are only so many candidates left who used to run sales at Naked or Snapple.

Of course, the best way to break into the Natural Foods business has always been to start a company. But that’s where systemic inequality returns to the mix.

The causes, of course, lie outside of the industry, but are perhaps the most drastic – and again, present the most compelling argument for why an industry that tries to do better by changing systems should adopt diversity as a goal.

Take Alphonzo Cross. He and his sister, Alison, opened up Boxcar Grocer in what some call Atlanta’s “permanently up and coming” – (read: poor and black) – Castleberry Hill neighborhood in 2011.

Creating a “healthy corner store” as a model for a potentially scalable network of small urban grocers in food deserts, the Crosses weren’t actively looking for suppliers of color but, Alphonzo Cross told me, “once we came on the scene, people came looking for us.”

“We met so many purveyors we didn’t know what to do with them all,” he said, but “they didn’t even know how to sell the stuff, how to market to a retailer.”

“There’s a lot of folks selling products door to door, out of their cars, at festivals, wherever they can,” he added. “There were a lot of folks who wanted to manufacture but they didn’t know how to do it. No retailer is going to sit down with a potential supplier and tell them how, to say ‘this is where the bar code should be.’

They just say, there’s no bar code and they move on.”

a huge obstacle, that the commercializaBoxcar Grocer closed in January. Its tion and scale that are the language of ultimate fate depended on many things, today’s natural foods business (and others, but in announcing the store’s closing, of course) are just plain harder to achieve. the founders compared photos of the And I believe it. And I think they believe it pristine sidewalks surrounding a Starin Baltimore, as well. bucks in the city’s thriving Midtown area The Crosses, who had found large meawith those in Castleberry Hill. Cracked sures of professional success before startsidewalks, a broken water meter, no bike lanes, broken streetlights and a bill for an ing Boxcar Grocer, say the launch of their own stores was a commercial play, but off-duty cop to police the area created an also an experiment – could they eliminate extra burden on cash flow for the small urban food deserts by offering healthy, businesses in the area. It’s not a level, natural, local products in downtown equitable playing field, Alphonzo said. neighborhoods. Could they start a discus“Small business owners are supposed sion about increasing access to healthy to operate optimally without the infood in racially stratified, poor communifrastructure to do so,” he said. “Those ties, while supporting the local businesses underserved communities are not just that produce it. It’s not so long ago that underserved via food. Food deserts are such a concept might have been discussed basically everything deserts.” at a grocery co-op as well. It’s time for the During my interviews, I heard many industry that grew out of those discusvariations on this theme of systemic insions to start having them again. equality and its effects: that well-educated blacks and hispanics, the first in their families positioned to succeed will go the safe route at law or accounting firms and other, stable businesses because of the instability they’ve seen on a generational level.

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7

Publisher’s Toast

By Barry Nathanson

Random Thoughts on a Randomly Beautiful Day

MAGAZINE www.bevnet.com/magazine Barry J. Nathanson PUBLISHER bnathanson@bevnet.com

Jeffrey Klineman EDITOR-IN-CHIEF jklineman@bevnet.com

Ray Latif MANAGING EDITOR rlatif@bevnet.com

Neil Martinez-Belkin STAFF WRITER nmartinezbelkin@bevnet.com

Jon Landis STAFF WRITER jlandis@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

Jacqui Brugliera SALES & MARKETING ADMIN

I knew when I arrived at the office that it would be waiting for me: the dreaded email from my colleague and esteemed editor, the illustrious Jeff Klineman. It happens right before the close of every issue, his urgent, final request for my column. Now, I’ve been writing columns about the beverage industry for 23 years, but it still is something that doesn’t come easy. That’s why I ignore him until the last minute.

It gets hard to be original. I’ve covered price, packaging, promotion, professionalism, punctuality, performance, pro formas and powders. That’s only the “P”s. I have covered the rest of the alphabet too.

So, to avoid jumping in, and to keep Jeff annoyed, I’ll do what I do every day. I take my 3-mile walk around lunchtime. There is where I will find my inspiration. It’s a spectacular 78 degree day, flowers are in bloom, and there are beverages galore in the hands of the thousands. So here are some random ideas that rattle around my brain: People love selection. There must be 80 brands I’m seeing in the hands of al fresco diners. That’s great. Personally, I get dozens of brands sent to me, for sampling, opinion, and because I shamelessly ask for them. There are too many to drink, as I’m one man in the New York office, and only have limited capacity. I offer the products to the dozens of suitemates taking space in my office center. I only ask their opinion, in return. The replies were usually so positive and I’m always asked where they can get these drinks. Sadly, they can’t. Too 8 JUNE 2015 BEVNET MAGAZINE

many of these great products still can’t get on the shelves, as distributors and retailers don’t seem to want to take a chance.

While there have been greater offerings in stores, there still aren’t enough for my taste. Take a chance when some little, eager entrepreneur comes calling.

I’m happy to see that the pricing of HPP is finally coming down. They are fantastic brands that have limited their success by limiting the consumer who can afford them. Take volume over high margins, so you can grow. Continue to take costs out of the system. I still feel that $3.99 is the consumer’s threshold for frequent purchase.

There have been so many new water variations entering the arena. They are an impressive lot, and continue to proliferate.

Bring them on. Healthy, hydrating and priced right, it’s a winning formula.

Milk is coming back in force. The simplicity and efficacy of the category is a win-win for retailer and consumer alike.

Sample, sample, sample, need I say more?

While it’s expensive, nothing delivers better for your brand. It’s the best way, and maybe only way, to gain momentum, buzz and press for the small brands trying to make it.

Stay regional, at first. Don’t’ try to expand too fast or you’ll end up on my shelf of infamy. Visitors always ask to be placed on my shelf, but it’s comprised of mostly failed brands. Don’t join in my display.

Now it’s time for my 4-mile walk home.

This week is over. So is the column. So you can stop panicking, Jeff.

jbrugliera@bevnet.com

ART & PRODUCTION Matthew Kennedy CREATIVE DIRECTOR Aaron Willette SENIOR DESIGNER BEVNET.COM, INC. John F. (Jack) Craven CHAIRMAN jfcraven@bevnet.com

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Bevscape

BY THE NUMBERS RTD Coffee Leads All Beverages in Volume Growth for 2014

Pepsi Passes Diet Coke as the No. 2 Soda Brand in the U.S.

The category of bottled and canned coffee drinks experienced the highest volume growth among all beverage segments in 2014, according to a new report from Beverage Marketing Corporation (BMC).

Volume of ready-to-drink (RTD) coffee products surged by 10.7 percent last year, as compared to that of 2013, trumping growth of bottled water and energy drinks, which rose by 7.3 percent and 6.4 percent, respectively.

While RTD coffee still represents a tiny portion of all sales of packaged beverages, the growth of the category is in stark contrast to that of carbonated soft drinks (CSD) and fruit beverages, which, while large and established drink segments, continue to lose volume and market share.

BMC, a consulting, research and advisory services firm focused on the global beverage industry, reported that while overall beverage volume rose by 2.2 percent in 2014, CSD declined by 1 percent and fruit beverages tumbled by 2.8 percent.

BMC did note that CSD volume fell slower than in recent years. Nevertheless, the share for the segment represents just over 41 percent of the overall market, down nearly 2 percent from the year prior. It’s the bottled water category that appears to be the biggest beneficiary of sliding soda sales. BMC described bottled water as having “a remarkable year,” accelerating in volume and market share, particularly as pricing remains aggressive. BMC pointed to four bottled water brands — Nestle Pure Life, Poland Spring, Dasani and Aquafina — represented in the top 10 of all beverage trademarks for 2014, up from three in 2013.

Other notable category gains include RTD tea, which saw 2014 volume rise by 3.7 percent and sports drinks, which experienced a 3 percent bump. Meanwhile value-added water, a category that includes Vitaminwater, among other brands, dipped by .9 percent.

Pepsi has reclaimed its positioning as the No. 2 soda in the United States, five years after losing that spot to Diet Coke. Citing data from Beverage Digest, an industry newsletter, The Wall Street Journal reported that Diet Coke saw a volume decline of 6.6 percent in 2014, outweighing Pepsi’s 1.8 percent drop. Diet Pepsi and Diet Mountain Dew also saw significant volume declines in 2014 of 5.2 percent and 3 percent, respectively and Coke Zero shrank by 2 percent.

The shift speaks to the faster and more drastic drop of diet soda within the greater fall from grace of carbonated soft drinks, which have now seen a full decade of sales declines. Since its introduction diet cola has played the role of soda’s healthier alternative, geared towards athletes, diabetics and those looking to shed some pounds. But the health-conscious consumer has evolved in recent years, steering away from artificial low-calorie sweeteners like aspartame.

Accordingly, diet soda has posted four consecutive years of volume declines.

In response, Coca-Cola and Pepsi returned to the drawing board in 2014 in an effort to find a new product to connect with fleeing consumers and the elusive millennial, a generation that came of age after big soda’s heyday. The result came in the Fall with the roll-out of Coca-Cola Life and Pepsi True, two low-calorie and naturally sweetened sodas boasting cane sugar and stevia in place of high fructose corn syrup and artificial sweeteners.

Coca-Cola, meanwhile, has maintained its positioning at the top of the totem pole, and saw a 0.1 percent bump in volume in 2014, increasing its overall market share to 17.6 percent.

The latest news on the brands you sell

MARKETING Coca-Cola Co. Announces Return of “Share a Coke”

Praised by analysts and embraced by consumers, the Coca-Cola Co.’s “Share a Coke” campaign is coming back.

As expected, Coke announced the return of the popular marketing program, which first appeared in Australia in 2011 and had a highly successful run during its U.S. debut last year. The focus of the campaign was a label swap in which Coke replaced its iconic logo on select and limited-edition 20 oz. bottles of Coke, Diet Coke and Coke Zero with 250 of the most popular names in the U.S. along with other well-known nicknames, such as “Buddy.”

Coke encouraged consumers to buy and share the limited-edition products with family and friends and post images of the bottles on social media with an attached hashtag of #ShareaCoke. The campaign ended up being a remarkable success for Coke and is credited as playing an impactful role in volume growth of the company’s carbonated soft drinks, a remarkable turn following an 11 year decline in sales.

The 2015 Share a Coke campaign will feature four times the number of names as the 2014 edition and also encompass different package sizes, with 1.25 L and 2 L bottles, and 12 oz. cans now in the mix. Coke has also added an option to customize 8 oz. glass bottles of the sodas with personalized names and messages via an e-commerce site.

10 JUNE 2015 BEVNET MAGAZINE

Bevscape INVESTMENTS & ACQUISITIONS Boston Beer Acquires New York Apple Orchard Boston Beer Company, which produces and markets the Angry Orchard line of hard ciders, today officially announced it acquired a 60-acre orchard located in upstate Montgomery, New York.

The company also plans to build a small innovation cidery and taproom, a space that will be used primarily for experimentation and consumer education.

BevNET had originally reported on Boston Beer’s plans to purchase the orchard last September. At the time, Jeffrey Crist, the president and principal family owner of Crist Bros. Orchards, which sold the property to Boston Beer, said that about 40,000 bushels (each weighing 40 pounds) could be grown on the orchard.

Boston Beer – which anticipates producing small scale, limited-release ciders onsite – will look to experiment with different apple varieties and yeast strains, blending and fermentation techniques as well as barrel-aging, said Sipes.

An official taproom opening, anticipated for “late fall” according to Sipes, will depend on the company’s ability to press and ferment apples currently being grown on the orchard.

12 JUNE 2015 BEVNET MAGAZINE

Former Harpoon Brewery Chief Launches Private Equity-Backed Craft Venture Less than nine months after selling at least a 40 percent stake in Harpoon Brewery, the country’s 15th largest craft beer company, co-founder and former CEO Rich Doyle is back in the game.

Backed by an investment from San Francisco-based private equity firm Friedman, Fleisher & Lowe (FFL), Doyle has launched Enjoy Beer LLC, a consortium aimed at providing back-office support to independent craft brewers.

According to a company statement, “Enjoy Beer will create partnerships with additional top craft brewers who wish to preserve their local independence, while gaining shared resources in areas such as marketing, sales, purchasing, logistics, and finance in order to compete with largescale corporate competitors.”

Louisiana’s Abita Brewing is the group’s founding brewery partner.

Rooibee Raises $2 Million; DRINKmaple Adds $1.5 Million Rooibee Red Tea has completed a $2 million capital raise. The Louisville-based organic tea makers announced that the final $500,000 of its yearlong Series A2 fundraising round came from equity-based crowdfunding platform CircleUp. Rooibee will reportedly put the $2 million into developing new flavors, adding prickly pear and raspberry options to its Rooibee Roo children’s line. Additionally the company will update the bottle of its flagship Rooibee Red Tea product, making it available in resealable, BPA-free plastic packaging.

At the top of 2015, Rooibee added two new members to its board of directors: Charles Schnatter, previously of Papa John’s International, and Benton Keith, Principal at Louisvillebased social investing fund Radicle Capital.

Meanwhile, Massachusetts maple water brand DRINKmaple have raised $1.5 million from 13 different investors, according to a recent company filing with the SEC. DRINKmaple still has $500,000 to go to close outs it targeted $2 million funding round.

The brand made its debut in 2014, hitting stores across the Northeast.

Craft Beer Co. Acquires Búcha Live Kombucha Brand Craft beer brewer American Brewing Company has purchased substantially all assets of Búcha, a brand of certified organic sparkling kombucha drinks, from B&R Liquid Adventure, LLC. In a statement, Neil Fallon, CEO, American Brewing Company described the deal as the first step to “solidify [its] diversification into the full beverage industry.”

Based in Edmonds, Wash., a city 11 miles north of Seattle, American Brewing Company launched in January, 2011 and currently sells its beer in Washington State and South Carolina.

Fallon said the purchase is one that “falls in line perfectly with our strategy of acquiring profitable, existing assets and revenue streams with large footprints and merging them into the American Brewing Company family of beers and beverages.”

The purchase of the Búcha brand, however, was one precipitated by a legal battle between B&R and a contract brewer of its kombucha drinks. According to Fallon, Búcha was faced with a claim for damages to the brewer’s tanks that eventually escalated into a lawsuit and resulted in excessive attorney fees and an award.

Incoming American Brewing COO Chuck Santry told BevNET that the lawsuit “destroyed investors’ confidence in adding any new capital to the company.”

B&R investors made a decision to try and sell the Bucha brand, and American Brewing, which is a publicly traded company, identified the potential deal through Santry, who is indirectly related to a Búcha board member. The two sides eventually agreed on an purchase that took just six weeks to complete.

Fallon stated that the deal was such that American Brewing would be indemnified against the lawsuit and previous creditors of Búcha and noted that the acquisition amounted to a purchase of the brand, as opposed to physical assets of the company.

Búcha contracted production of its kombucha and did not own a production facility, yet for Fallon, “phenomenal growth” in distribution and sales of Búcha products represented a big opportunity to expand.

American Brewing revealed the financial terms of the deal in a press release, which stated that the acquisition was for a combination of $260,000 cash, a $140,000 note payable and $500,000 in restricted stock.

Fallon said that there will be no interruption in production of Búcha, which has in place a contract with UNIX-packaging, an independently owned co-packing facility in Montebello, Calif., to produce its kombucha drinks. The contract will cover the next 18 months of production for Búcha, he said. In the meantime, American Brewing is considering the construction of a new facility that could house production of its beer and Búcha products.

American Brewing will retain a handful of Búcha employees, including Frank Commanday, who is listed as the technical director and brewmaster of the company. Fallon said that the brewery went to “extraordinary measures” to retain Commanday, who, including his work with Búcha, has 27 years of experience in craft beverages, beginning in 1982 when he joined thenmicrobrewery Sierra Nevada Brewing company as a summertime employee.

Commanday is expected to be integral in the development of new Búcha products and extension of the brand, which Fallon said may include a alcoholic variety as well as a kombucha and beer blend.

As for sales and distribution of Búcha, Fallon expects a continued rise in placement of the brand, which is represented in Safeway, Kroger and Whole Foods stores on the West Coast.

BEVNET MAGAZINE JUNE 2015

13

Bevscape CRAFT EXPANSIONS Craft Brew Alliance to Spend $25 Million in Brewery Expansions Craft Brew Alliance (CBA) has announced that it will increase brewing capacity at its Widmer Brothers brewing facility in Portland, Ore. as part of a $10 million expansion project.

In addition to adding 200,000 barrels of capacity and increasing total output to 750,000 barrels at its North Russell Street brewery, CBA said it would also complete a “significant brew house enhancement” and construct a new 10-barrel innovation brewery.

The brewery expansion project is expected to be complete by early 2017, and the new innovation brewery will be operational towards the end of 2015, according to a company release.

CBA said it plans to add new fermenters, bright beer tanks, and a second filtration line while “extending existing tanks to increase cooling capacity.” Additional enhancements throughout the brew house are also being made to increase production efficiency, the company said.

CBA cited the recent “resurgence” of its flagship Widmer Brothers Hefeweizen as well as expected growth for Upheaval IPA and Replay Session IPA as the impetus for the expansion. 2014 shipments for

Hefeweizen grew nearly 9 percent in Oregon last year at a time when Oregon brewers sold more than 1.6 million barrels, the company said.

The latest development marks the sixth time that Widmer has expanded its brewing operations in Portland since launching in 1984.

The company followed the announcement with another just 10 days later in which CBA stated its intention to spend $15 million to build a new 100,000-barrel brewery in Hawaii. A list of potential locations is being reviewed and CBA said it expects the facility to be fully operational by 2017.

Combined, the two expansions will increase total CBA capacity by 300,000 barrels by 2017.

The new brewery will help support Kona’s growth in Hawaii and enable the company to innovate with unique styles and ingredients, Thomas said, adding that CBA’s export and mainland business could also see a bump as a result of the expansion.

Situated on about 30,000 sq. ft. of space, the new brewery will eventually be capable of being scaled past 100,000 barrels, said Scott Mennen, CBA’s VP of Operations. A 20 hL, high-efficiency brewing system that uses a mash filter instead of a lauter tun will be installed, increasing efficiency and improving sustainability, he said.

Mennen compared the new brewhouse to a French press, which uses pressure to separate coffee grinds from a filter.

CBA will also keep its original brewpub location – which currently produces about 12,000 barrels of draft beer – and expand the site’s restaurant & taproom components.

Brooklyn Brewery Continues International Expansion With Second Joint Venture Brooklyn Brewery has announced plans to open a second joint brewery venture with Carlsberg, teaming up to help rebuild the EC Dahls Brewery in Trondheim, Norway.

It’s the second time the New York-based craft brewery, which last month was ranked by the Brewers Association as the 11th largest in the U.S., has partnered up with the Danish brewery — last year the two jointly opened Nya Carnegiebryggeriet (New Carnegie Brewery) in Stockholm, Sweden.

Specific financial terms of the latest project were not disclosed, though last November Carlsberg announced it would invest more than $14 million to build a new brewery, pub and restaurant in EC Dahls’ existing Trondheim production facility.

The new brewery, which is scheduled to officially open next summer, will produce the existing EC Dahls Pilsner brand as well as a new line of craft beers developed collaboratively by Brooklyn and EC Dahls, Ottaway said.

Though similar in concept, the Norway project is about eight times larger than Brooklyn and Carlsberg’s New Carnegie venture in Sweden, Ottaway said.

Brooklyn’s primary role will be in brewing, marketing and branding, he said.

EC Dahls was originally founded in 1856 and is famous for its pilsner. Carlsberg would come to own the brand in 2004, after it purchased Ringnes AS, a holding company that formed in 1988 after the merger of Nora Factories and Ringnes Frydenlund AS, which had purchased EC Dahls.

Widmer Brothers Company Headquarters Photo by M.O. Stevens

14 JUNE 2015 BEVNET MAGAZINE

LEGAL NEWS MillerCoors Slapped with Class Action Suit After years of debate over what constitutes a “craft brewer,” MillerCoors – which produces and markets the Blue Moon line of craft-style beers – has been hit with a class action lawsuit over the use of the word “craft” on both its website as well as various marketing and point-of-sale materials.

The suit, filed last week in the California superior court of San Diego County, alleges that MillerCoors deceptively brews, markets and distributes Blue Moon Brewing products in an effort to intentionally mislead customers into purchasing a “craft beer.”

“Through its false and deceptive marketing, Defendant misleads consumers to believe that Blue Moon is an independently brewed, hand-crafted beer,” The suit states. “While MillerCoors does not constitute a craft brewer, and thus Blue Moon does not constitute a craft beer, Defendant falsely identifies it as such on the MillerCoors website. This practice misleads consumers and allows Defendant to charge up to 50% more for Blue Moon beer than it charges for other MillerCoors products.”

Filed by Clark & Treglio, the complaint, which lists “beer aficionado and home brewer” Evan Parent as the plaintiff, claims MillerCoors violated California’s “Consumer Legal Remedies Act;” California’s Unfair Competition Law and participated in “deceptive and misleading acts.”

“Defendant’s business practices are immoral, unethical, oppressive and unscrupulous,” the suit claims.

In a statement sent to BevNET, MillerCoors spokesman Jonathan Stern denied the claims and said the company is “tremendously proud of Blue Moon” and will continue to embrace its “ownership and support” of the brand.

“The class action filed against MillerCoors in California is without merit and contradicted by Blue Moon Brewing Company’s 20-year history of brewing creative beers of the highest quality,” he wrote.

“There are countless definitions of ‘craft,’ none of which are legal definitions. We

choose to judge beer by the quality, skill and passion that goes into brewing it.”

In the suit, the plaintiff, Parent, is characterized as a so-called “beer aficionado” who “frequently purchased” Blue Moon products from 2011 until mid-2012 from San Diego-area retailers.

According to the filing, Parent believed Blue Moon offerings were actually produced by independent craft brewers — the kind the Brewers Association (BA) defines as those that producing less than 6 million barrels and less than 25 percent owned or controlled by a non-craft brewer. There are currently 103 operating breweries in San Diego.

It wasn’t until July, 2012 that Parent, the San Diego beer aficionado, learned that Blue Moon was in fact made by MillerCoors and stopped purchasing the brand.

The lawsuit relies on the BA definition of what it means to be a craft brewer and claims MillerCoors, which produces more than 76 million barrels annually, does not qualify as such.

The complaint also states that MillerCoors goes to “great lengths to disassociate Blue Moon beer from the MillerCoors name,” and argues that the beer, which is brewed at multiple MillerCoors brewing facilities around the U.S. and not a “Blue Moon Brewing Company” location, is falsely advertised to consumers.

The lawsuit, filed April 24, seeks restitution and disgorgement and demands a jury trial.

BEVNET MAGAZINE JUNE 2015

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New Products The newest options for cooler and shelf

CSD PepsiCo has released Mtn Dew Baja Blast, a tropical lime-flavored beverage that launched as a fountain-only option at Taco Bell restaurants, in 20 oz. bottles and 12 oz. cans for a limited time. The cola giant has also introduced a limited roll-out of Mtn Dew Sangrita Blast, a citrus punch beverage that had been available only at Taco Bell, in 20 oz. bottles and 12 oz. cans. The drinks are available nationally. Prices vary by market. For more information, please call PepsiCo at (914) 253-2308.

Talking Rain Beverage Company has expanded the packaging offerings for its Sparkling Ice brand with the addition of 8 oz. slim cans.

Available in convenient 8-count fridge packs, Sparkling Ice will offer four flavors in the new format, including Black Raspberry, Orange Mango, Kiwi Strawberry, and Cherry Limeade.

Sparkling Ice 8-Count Fridge Packs are available nationwide at select retailers including Walmart, Kroger, Target, Publix and Albertson’s for a suggested retail price of $5.99. For more information, please call Talking Rain at (425) 222-4900 The Double Cola Company has announced a limited-edition, retro-designed 12-pack for its citrus soda, SKI. The design was voted by SKI fans in a contest held on the company’s Facebook page. The limited edition packaging will be available for consumers to purchase this summer only. The multi-pack of 12 oz. cans retails for $4.49-5.99 and is sold at Bi-Lo, Kroger, Houchens, Schnuck’s, and Wesselman’s throughout Tennessee, Kentucky, Indiana, Illinois. For more information, please call Double Cola at (423) 267-5691.

Juice Project Juice, a maker of certified organic, nonGMO verified, cold-pressed juice and plantbased foods, has released a new seasonal blend.

Strawberry Chia combines freshly-picked

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strawberries and fiber-rich chia seeds with lime and raw agave for a sweet and tart blend. The juice is available for purchase online and at Project Juice retail locations. It retails for $8 per 14.5 oz. bottle. For more information, please call Project Juice at (844) 775-8423.

Purity Organic has launched two new varieties to its Superjuice line. Green Lemonade is made with all organic ingredients including lemon juice, coconut water, kale and spinach purees, agave, honey and mint. It contains 15 percent juice. Blackberry Apple Chia is 85 percent juice and includes a blend of chia seeds, apple juice, blackberry puree, banana, beet, fresh pressed ginger and blueberry juice, all of which are organic. The beverages are USDA certified organic and packaged in 14 oz. glass bottles. For more information, please call Purity Organic at (415) 440-7777.

Crude has introduced a new variety to its line of cold-pressed, high pressure processed juices. Crude Orange #1 is a blend of whole fruits and vegetables, including sweet potato, apple, camu camu, lemon and cardamom. The ingredients are cold-pressed and the juice filled into individual 16 oz. bottles. The product has no added water, sugars, preservatives or flavors.

Like all Crude juices, Orange #1 is certified USDA Organic, Non-GMO and naturally gluten-free. The juice has a suggested retail price of $7.99 per bottle and is distributed in Michigan. For more information, please call Crude at (248) 283-9000.

Mansi is new beverage made with juice from calamansi, a citrus fruit native to the Philippines.

The nutrient-rich juice is sweetened with organic cane sugar and organic honey to create Mansi.

The product is gluten-free, fat-free, cholesterolfree and Kosher-certified. Sold in a 330 mL Tetra Pak carton with a yellow-colored Dream Cap, the beverage retails for $2.99 and is distributed in metro New York. For more information, please call Vita Mansi Company at (646) 996-3584.

Evolution Fresh has developed a new line of 11 oz.-sized bottles designed to bring its coldpressed, high pressure processed juices to a wider audience of consumers. The company spent two years developing the line. Each of the juices deliver more than one cup towards the combined daily recommended intake of fruits and vegetables without added sweeteners, artificial flavors or colors. The line comes in six varieties: Green Devotion, Emerald Greens, Essen-

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New Products tial Vegetable, Green Grove, Berry Beet and Mango Green. The juices have a suggested retail price of $3.99-$4.79, depending on variety, and are sold nationwide at conventional grocery retailers. For more information, please call Evolution Fresh at (415) 922-1751.

Enhanced Water vitaminwater has two new varieties: vitaminwater refresh (tropical mango flavored + other natural flavors) and vitaminwater vital-t (lemon iced tea flavored + other natural flavors). Both varieties are available nationally in 20 oz. bottles with a suggested retail price $1.59. For more information, please call the Coca-Cola Co. at (800) 438-2653.

Lemonade Honest Tea has added Watermelon Lemonade to its organic “Summer Refresher” lineup.

The new product joins Original Lemonade, Mango Lemonade, Mint Limeade and Half & Half Lemonade & Tea in the line, all of which are sold exclusively at Whole Foods Market locations. The products are sweetened with Fair Trade Certified sugar and contain 70 calories per 8 oz. serving. Packaged in 32 oz. glass bottles, the beverage retail for $2.49. For more information, please call Honest Tea at (301) 652-3556.

Protein Drinks B’more Organic has introduced a Strawberry variety to its line of skyr protein smoothies. Offering 36 grams of protein in a rich and creamy smoothie, B’more Organic Icelandic-style skyr smoothies are made with milk from organic, grass fed family farms and contain no added sugar. Packaged in 16 oz. bottles, the beverages retail for $3.99 and are sold at conventional, natural and specialty grocers in the Midwest, Mid-Atlantic and Northeast. For more information, please call B’More at (410) 417-7579.

Be Well Nutrition Inc. has redesigned the packaging for its ICONIC line of protein drinks and introduced a new Café au Lait variety. The new flavor is made with Colombian coffee and infused with 20 grams of premium grass-fed protein and fiber. ICONIC is now

18 JUNE 2015 BEVNET MAGAZINE

packaged in a 12 oz. plastic HDPE bottle and contains 130 calories and 3 grams of sugar (from organic blue agave) per container. The products are distributed at Sprouts, Central Market and H-E-B stores and have a suggested retail price of $3.49. For more information, please call Be Well at (504) 598-5225.

Functional Drinks Temple Turmeric has added two varieties to its Super Blend line: Matcha Latte and Mexican Chocolate. The products feature dairy-free fusions of synergistic, whole-food ingredients like raw honey, cardamom, and plant-based fats from coconut milk and hemp milk that help increase the functionality and bioavailability of curcumin, the active compound in turmeric, according to the company.

Matcha Latte Super Blend features Japanese ceremonial-grade matcha from shade-grown green tea leaves and blended with hemp and coconut milks. Mexican Chocolate Super Blend combines rich cacao with a cinnamon and cayenne kick. The new blends are available in Whole Foods Market locations nationwide with a suggested retail price of $6.99 per 12 oz. bottle. For more information, please call Temple Turmeric at (347) 460-0348.

Choopoons is a Mediterranean-style yogurt smoothie made with pure, whole milk from cows not given the synthetic hormone rBST, the beverage is gluten-free, GMO-free, and contains no artificial flavorings or colorings. It is high in calcium and protein and is a versatile beverage that can be enjoyed after a workout, on the go, or with any meal, according to the manufacturer. Packaged in a 14 oz. bottle, the product comes in two varieties – Plain and Cucumber Mint – the beverages retail for $2.99.

For more information, please call Choopoons at (800) 918-8110 x 104.

Dairy Alternative Beverages Silk Cashewmilk is the newest beverage to join the Silk line-up of plant-based offerings. Cashewmilk is a cashew-based beverage free of cholesterol, lactose, dairy, soy and gluten. The product comes in four varieties: Original, Unsweetened, Vanilla and Chocolate. The beverages are contain no genetically modified ingredients as verified

by The Non-GMO Project. Silk Cashewmilk is

Côtes du Rhône. The wines have a suggested retail price of $12.99 for a 750 mL bottle. For more information, please call Benson Marketing Group at (707) 254-9393.

available in half-gallon sizes at a suggested retail price of $3.49 and are available in grocery stores nationwide. For more information, please call Whitewave Foods at (303) 635-4680.

Flavored Malt Beverages Phusion Projects, LLC has extended its Four Loko line with a new Black Cherry flavor.

Packaged in a camouflage-decorated 23.5 oz. can, the beverage is 12 percent ABV. It is sold nationally, with prices that vary by market. For more information, please call Phusion Projects at (650) 862-5968.

Wine Les Dauphins wines from France’s Rhône Valley have arrived in the U.S. and are available nationally for the first time. The line comes in three varieties: the 2013 Les Dauphins Réserve Red Côtes du Rhône, the 2013 Les Dauphins Réserve White Côtes du Rhône, and the 2013 Les Dauphins Réserve Rosé

The Infinite Monkey Theorem (TIMT) has launched single-serve 250 mL cans for its wine offerings. The cans come in White (Chardonnay), Red (Merlot), Rosé and Moscato varietals. The wines are sold in Washington, D.C., Denver, and are the featured in-flight wine for Frontier Airlines. The products retail for $14.99 for a 4- or 6-pack of 250 mL cans, depending on variety. For more information, please call TIMT at (303) 736-8376.

Chateau Ste. Michelle has extended its ANEW wine brand with Pinot Grigio and Rose varieties.

The 2014 ANEW Pinot Grigio is sourced from the coolest sites of Washington’s Yakima Valley and offers bright characteristics of Asian pear, melon and a touch of tropical fruit. The 2014 ANEW Rose is a crisp, vibrant and dry style Rose, made with a blend of Syrah and Sangiovese and features aromas of strawberry, fresh watermelon and peach. The wines are available

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New Products nationally for a suggested retail price of $12 per 750 mL bottle. For more information, please call Chateau Ste. Michelle at (425) 488-1133.

Ste. Michelle Wine Estates has launched Tenet Wines, a joint effort with Rhone winemakers Michel Gassier and Philippe Cambie to raise the profile of Syrah and other Rhone varietals from Washington State. Tenet Wines consists of three wines: “Tenet” GSM (Grenache/Syrah/Mourvedre), “The Pundit” Syrah from Washington State’s Columbia Valley, and “Le Fervent” Syrah from the Costieres de Nimes in France’s Rhone Valley. From the inaugural 2013 vintage, Tenet Wines produced 1,069 cases of “Tenet” GSM, 8,113 cases of “The Pundit” Syrah, and 5,000 cases of “Le Fervent” Syrah. “The Pundit” Syrah retails for $24.99 for a 750 mL bottle, and “Le Fervent” Syrah retails for $21.99. Both are available nationally. “Tenet” GSM will be available beginning September 1 and retail for $70.

For more information, please call Ste. Michelle Wine Estates at (425) 415-3359.

HandCraft Wines has added HandCraft Pinot Grigio and HandCraft Malbec to its portfolio. Debuting a new package for the brand, the wines join HandCraft Chardonnay, Pinot Noir, Cabernet Sauvignon and Petite Sirah. Both wines are made with Californiagrown grapes. They are distributed nationwide and have a suggested retail price of $11.99.

For more information, please call Delicato Family Vineyards at (209) 824-3500.

Vodka Campari America has launched SKYY Barcraft, a line of cocktail-inspired vodkas that come in three flavors: Watermelon Fresca, Margarita Lime and White Sangria. The 60-proof flavored vodkas are designed to be mixed with soda for simple preparation of at-home cocktail preparation. The spirits are available in 50 mL bottles (suggested retail price: $1.99; available for Watermelon Fresca and Margarita Lime only), 750 mL bottles ($18.49), and 1 L bottles ($26.49). For more information, please call Campari America at (415) 315-8000.

Big Bottom Distilling has released its first vodka.

Big Bottom Starka Vodka is the result of the Oregon Starka Project, a collaborative effort between three Oregon distillers: Big Bottom

20 JUNE 2015 BEVNET MAGAZINE

Distilling, Bull Run Distilling and Indio Spirits and Distillery. Starka is a traditional aged vodka that dates back to the 15th century in Eastern Europe. Each distiller in the Oregon Starka Project has created an exclusive variation of Starka by choosing specific barrels that are distinct to each producer. Big Bottom’s vodka is produced in small batches and finished in oak casks. The 91 proof spirit is made limited quantities and batches will be released annually as a seasonal product. It is sold throughout Oregon for $29.95 for a 750 mL bottle. For more information, please call Big Bottom at (503) 608-7816 Emory Vodka is a new brand conceptually inspired by New York-based artist Blake Emory, one of today’s most innovative pioneers in the Optic Modernism movement, according to the manufacturer. Emory developed a unique extension of his “Zebra Love” signature for the brand design, which is embossed on the bottle and includes Emory’s trademark red stiletto.

Priced at $29.99 for a 750 mL bottle, the vodka is available in select bars and restaurants in Atlanta, Chicago, New York, Los Angeles and Miami. For more information, please call Elliott Stares PR at (305) 490-1985.

Whiskey St. Louis-based Luxco announced the launch of its limited release, ultra-premium bourbon series, Blood Oath. The new craft bourbon whiskey series will highlight a different variant, called a “Pact,” each year. The inaugural Pact, named Blood Oath Pact No. 1, consists of a special blend of three carefully selected Kentucky Straight Bourbon whiskies, blended and bottled by hand. The bourbons in Pact No. 1 range from 6 to 12 years old. The debut combination, bottled at 98.6 proof, is available in limited quantities nationally in 750 mL bottles, with a suggested price of $89.99. For more information, please call Luxco at (314) 772-2626.

Alberta Rye Dark Batch Whisky has launched in the U.S. The super-premium rye whisky features flavors of honey and oak and imparts hints of vanilla, smoke, sweet oak and savory dried fruit, such as plum and blackcurrant, on the palate. Bottled at 90 proof, the spirit is a blend of 91 percent rye whisky, 8 percent bourbon and 1 percent sherry. The whisky is aged in new charred American white oak and once-used American

bourbon barrels. It has a suggested retail price of $29.99 for a 750 mLbottle. For more information, please call Beam Suntory at (847) 444-7844. anCnoc (pronounced a-NOCK), a Highland Single Malt Scotch Whisky produced at the Knockdhu Distillery, has launched Cutter – the third expression in its Limited Edition Peaty Collection – in the U.S. market. The new release follows Rutter and Flaughter, the first two expressions within the range, which were released last year. True to the distillery’s unconventional nature, anCnoc breaks from the traditional Highland style with the production of its Limited Edition Peaty Collection, named after traditional peat-cutting tools. The whisky was matured in American oak, ex-bourbon casks and bottled at 46 percent ABV. The spirit is unmistakably peaty, with thick and oily smoke structure followed by piercing burst of fruitiness, ripe peaches and just a touch of oak on the nose, according to the distiller. anCnoc Cutter is available throughout the U.S. and has a suggested retail price of $85 for a 750 mL bottle.For more information, please call International Beverage at (562) 865-6500.

Westland Distillery’s flagship American Single Malt is now joined by two expressions: Westland Peated American Single Malt and Westland Sherry Wood Single Malt.

Westland’s Peated expression is a bottling of two separate new-make spirits brought together after maturation. The first is made from a mash of peated malt, among the smokiest found in the New World; the second is from a mash of 100 percent Washington-grown pale malt.The distilled spirit is filled into a variety of oak, including first-fill ex-bourbon and ex-sherry casks, encouraging a controlled and even maturation.

Westland’s Sherry Wood American Single Malt Whiskey is matured in casks that began as American oak before traveling to Spain where it was first bent into staves for casks that would hold Pedro Ximénez and Oloroso sherry for nearly a century. Both whiskies are 46 percent ABV and have a suggested retail price of $69.99 for a 750 mL bottle. For more information, please call Westland Distillery at (206) 767-7250.

Heaven Hill Brands has launched Raven’s Lace PeachBerry Whiskey, a blend of peach and strawberry flavors with bourbon whiskey.

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New Products The 60 proof spirits was designed to appeal to female consumers for whom traditional whiskey is not necessarily their drink of choice, according to the company. The whiskey will be available in 50 mL and 750 mL sizes and is distributed in Georgia, Indiana, Kansas, Kentucky, Louisiana, Nebraska, Massachusetts, Rhode Island, South Carolina and Tennessee. The 750 mL size has a suggested retail price of $14.99.

For more information, please call Heaven Hill Brands at (502) 413-0219.

After nearly 20 years abroad, the I.W. Harper brand has returned stateside with two new whiskeys that are available nationwide. I.W. Harper Kentucky Straight Bourbon Whiskey and I.W. Harper 15-Year-Old Kentucky Straight Bourbon Whiskey were both inspired by the original I.W. Harper variants. I.W. Harper 15-Year-Old Kentucky Straight Bourbon Whiskey was distilled at the Bernheim Distillery. I.W. Harper Kentucky Straight Bourbon Whiskey mingles whiskey also distilled at the Bernheim Distillery during this time with other fine whiskeys. Both bourbons have been aged, most recently, at the legendary Stitzel-Weller Distillery and are hand bottled in Tullahoma, Tenn. I.W. Harper Kentucky Straight Bourbon Whiskey is 82 proof and has a suggested retail price of $34.99 for a 750 mL bottle. Limited Edition I.W. Harper 15-YearOld Kentucky Straight Bourbon Whiskey is 86 proof and has a suggested retail price of $74.99 for a 750 mL bottle. For more information, please call Diageo at (646) 223-2314.

Rum Beam Suntory has extended its Cruzan Rum brand with the addition of Cruzan Blueberry Lemonade Rum. Available nationally, the new flavor blends Cruzan Rum with the essence of ripe blueberries and vibrant citrus. It is made using a unique five-column distillation process. The 42 proof spirit has a suggested retail price of $14.99 per 750 mL bottle. For more information, please call Beam Suntory at (847) 444-7644.

Louisiana Spirits LLC has introduced Bayou Select Rum, a spirit made with Louisiana sugarcane rum born from the rich soils of the Mississippi river delta. Fermented with cane yeast,

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distilled in American copper pot stills, the rum is rested in hand-selected American oak barrels that are actively tested and monitored. The rum has a suggested retail price of $33.99 and is distributed in Louisiana, Texas, Mississippi, Alabama, Florida, Georgia, Maryland, and Washington D.C. For more information, please call Louisiana Spirits LLC at (832) 766-0476.

Bacardi Gran Reserva Maestro de Ron is a new super-premium mixing rum. Paying tribute to its rich history and heritage, the rum is named after the Maestros de Ron (Master Blenders) that have safeguarded the secrets of the family’s rum-making process for more than 150 years, according to the company. The spirits is double-aged using white oak casks.

It is available nationwide for a suggested retail price of $24.99. For more information, please call Bacardi U.S.A. at (305) 573-8511.

Gin Black Button Distilling, a “grain to glass” craft distillery based in Rochester, N.Y. has launched its handcrafted, limited-edition Lilac Gin. The spirit is a tribute to the rich botanical heritage of Rochester, known as “The Flower City,” according to the distiller. The gin is made with locally sourced ingredients, including hand-picked fresh lilac petals and complimentary botanicals.

Lilac Gin is made in limited quantities and will be available in select liquor stores around the county for a suggested retail price of $19.99 for a 750 mL bottle. For more information, please call Black Button at (585) 730-4512.

Ke Spirits has introduced Ke Gin. The spirit crafted with a blend of wild juniper, Sicilian lemons, bitter oranges and seven exotic natural botanicals, including cardamom and coriander leaves. It retails for $27.99 for a 750 ml bottle.

Ke Spirits are sold at a variety of retailer in Texas, including Goody Goody and Total Wine stores. For more information, please call Ke Spirits at (239) 682-3441.

Other Spirits Louisville-based Copper & Kings American Brandy Co. has launched three American Absinthe variations made with vapor distilled

lavender petals, citrus peels and fresh-chopped ginger. The artisanal spirits distiller hand-crafted the new products with classic absinthe botanicals, including macerated grande wormwood, fennel, anis, licorice root and hyssop, with layered aromatics through an additional vapor distillation process. Copper & Kings Vapor Distilled Ginger, Lavender and Citrus Absinthes are available in select markets servicing mixology-centric bars and high-end liquor stores in 10 states in the South and Midwest. Each of the new absinthes is 65 percent ABV and 130 proof with a suggested retail price of $60 per 750 mL bottle. For more information, please call Copper & Kings at (502) 561-0267.

EWG Spirits & Wine has launched La Quintinye Vermouth Royal in the U.S. The vermouth is available in three distinct varieties: Royal Rouge, Royal Blanc and Royal Extra Dry. All share a base of 12 carefully selected plants and spices including artemisia, vine flowers, angelica, iris roots, cardamom, cinnamon, cinchona, citrus aurentium, ginger, liquorice, nutmeg and quassia amara. Each variant is then completed with its own specific selection of botanicals. In total, 28 plants and spices compose Royal Rouge, 18 make the Blanc variety and 27 are used in Royal Extra Dry. La Quintinye Vermouth Royal is available in 750 mL and 375 mL formats, priced $21.99 and $14.99 respectively. For more information, please call Colangelo & Partners at (646) 624-2885.

Philly’s Premium Beverages has launched an update of its line of bottled, ready-to-drink Old Fashioned cocktails and Egg Crème liqueurs. The Old Fashioned products are packaged in 12.7 oz. bottles and contain twoplus servings each. Egg Crème liqueurs come in seven flavors and come in 750 mL bottles. The products are distributed to over 400 locations in Wisconsin, as well as retailer in Nebraska and Illinois. The suggested retail price of a 4-pack of Philly’s Old Fashioned $13.99 and Philly’s Egg Crème retails for $18.95. For more information, please call Philly’s at (262) 546-5760.

then dropped in a stomping area to gradually release the juice. This is followed by distilling in a traditional copper pot still. The product is available at retailers and restaurants in Illinois, including Whole Foods and Binny’s and has a suggested retail price of $24.99 for a 750 mL bottle. For more information, please call Spirit of India at (305) 671-3323.

Arta Tequila has release its Extra Añejo expression. The spirit is double-distilled and triple-barreled (three years in American white oak, then split between French cognac and Spanish sherry barrels for another two years) in 180 L barrels, providing a greater wood-to-tequila surface area that imparts a richer wood flavor, according to the distillery. Each individually numbered and signed bottle of Extra Añejo is hand-bottled at 80 proof (40 percent alcohol by volume). It retails for a suggested price of $99 -$115 and is sold at select retail stores throughout Colorado.. For more information, please call GroundFloor Media at (303) 865-8110.

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Channel Check

SPOTLIGHT CATEGORY

Aseptic Juice Drinks SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 4/19/15

What’s hot & what’s not in stores now

Wondering why, after years of dominating this kids’ space, Capri Sun would reformulate, getting rid of high-fructose corn syrup, updating its design and plowing cash into marketing?

Ok, wondering why it would do that for a reason BESIDES the obvious need to dazzle on performance in order to save headcount during its upcoming merger with HJ Heinz? Try the fact that the category features competition on all sides and leaders Capri Sun, Kool Aid and Hi-C are all faltering. Here’s where the healthier lifestyle transition again manifests: Honest Kids, O.N.E., Vita Coco, are all on their way up. The organic babies are growing up, and they’re taking next-gen products to school with them.

Brand

Dollar Sales

Change vs. year earlier

Capri Sun

$524,569,184

Kool Aid Jammers

$202,468,720

-4.25% -7.89%

Hi C

$67,077,448

-14.23%

Honest Kids

$41,129,592

18.11%

Apple & Eve Fruitables

$27,279,384

-7.19%

Capri Sun Super V

$21,882,408

-29.66%

Jumex

$19,632,194

16.68%

Private Label

$13,497,300

-17.14%

ONE

$10,417,607

9.67%

V8 VFusion

$9,828,538

-36.46%

Vita Coco Goya

$8,418,131

4,478.49%

$7,664,020

19.48%

Motts For Tots

$5,634,416

-6.41%

Minute Maid Coolers

$4,506,439

52.18%

Nestle Juicy Juice Fruitifuls

$4,337,376

-57.73%

Petit

$3,651,360

14.52%

Vita Coco Kids

$3,516,227

67.97%

SunnyD

$3,435,773

462.77%

Zico

$3,326,680

8.83%

Kool Aid Ghoul Aid Jammers

$2,872,199

8.92%

TOPLINE CATEGORY VOLUME BEER

$32,134,382,592

3.4%

BOTTLED JUICES

$6,922,949,120

1.05%

BOTTLED WATER

$12,666,653,696

6.63%

ENERGY DRINKS

$10,882,408,448

6.21%

DRINK MIXES

$903,077,632

-1.67%

TEA/COFFEE

$4,740,977,152

9.66%

SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 4/19/15

24 JUNE 2015 BEVNET MAGAZINE

Channel Check ICED TEA

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Brand

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Dollar Sales

Change vs. year earlier

AriZona

$672,427,584

1.83%

Lipton Pure Leaf

$452,999,840

36.30%

Lipton Brisk

$349,051,072

1.33%

Lipton

$323,179,936

29.18%

AriZona Arnold Palmer

$211,368,016

-6.43%

Snapple

$209,392,992

-0.88%

Lipton Diet

$193,157,648

-10.44%

Gold Peak

$189,956,352

34.66%

Diet Snapple

$180,809,168

-3.62%

Peace Tea

$69,065,864

-13.85%

SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 4/19/15

NOT! Peace Tea

CAPPUCCINO/ICED COFFEE

HOT! Illy Issimo

• Customer Focused • • Commited to Quality •

Brand

Sovereign Flavors Inc 4020 W. Chandler Ave. Santa Ana, CA 92704 T: 714.437.1996 F: 714.437.1998

Dollar Sales

Starbucks Frappuccino

$873,148,032

12.58%

Starbucks Doubleshot

$421,002,528

17.12%

$76,810,232

2.57%

Starbucks Starbucks Frappuccino Light

$26,440,800

1.53%

Starbucks Doubleshot Light

$11,761,669

12.15%

Illy Issimo

$8,729,320

73.46%

Coco Cafe

$7,205,863

21.22%

Rockstar Roasted

$6,162,530

N/A

Private Label

$5,874,280

-15.68%

Nestle Skinny Cow

$4,669,475

N/A

SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 4/19/15

DOMESTIC BEER Brand

NOT! Private Label

HOT! Michelob Ultra Light Dollar Sales

Change vs. year earlier

Bud Light

$6,103,750,800

1.1%

Coors Light

$2,365,060,971

-2.1%

Budweiser

$2,118,419,967

-1.7%

Miller Lite

$1,952,941,117

1.9%

Natural Light

$1,090,024,537

-5.5%

Michelob Ultra Light

$942,788,421

13.0%

Busch Light

$836,887,949

0.7%

Busch

$643,551,859

-2.7%

Miller High Life

$465,334,181

-1.0%

Keystone Light

$459,607,378

-6.2%

SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 4/19/15

26 JUNE 2015 BEVNET MAGAZINE

Change vs. year earlier

NOT! Keystone Light

SPORTS DRINKS Brand Gatorade Perform

HOT! Gatorade Fierce

Dollar Sales

Change vs. year earlier

$3,219,536,896

2.31%

Powerade Ion4

$767,776,448

-8.51%

Gatorade Frost

$459,325,376

9.46%

Gatorade G2 Perform

$371,986,912

-19.54%

Gatorade

$256,923,184

55.76%

Gatorade Fierce

$216,192,736

449.11%

Powerade

$209,795,008

36.34%

Powerade Zero Ion4

$191,758,112

-1.57%

Gatorade G2

$44,659,852

5.50%

Gatorade X Factor

$30,401,052

19.24%

SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 4/19/15

NOT! Gatorade G2 Perform

WATER

HOT! Glaceau Smart Water

Brand

Dollar Sales

Change vs. year earlier

Private Label

$2,041,961,216

7.07%

Dasani

$1,010,576,576

6.59%

$951,812,032

7.60%

Aquafina Nestle Pure Life

$933,095,424

4.21%

Glaceau Smart Water

$690,164,224

22.06%

Poland Spring

$575,685,504

1.58%

Glaceau Vitamin Water

$509,657,984

-5.30%

Deer Park

$422,447,392

3.01%

Ozarka

$350,044,448

9.26%

Fiji

$275,273,344

10.19%

SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 4/19/15

NOT! Glaceau Vitamin Water

IMPORT BEER Brand

HOT! Modelo Especial

Dollar Sales

Change vs. year earlier

Corona

$1,376,065,374

6.7%

Modelo Especial

$772,384,287

24.0%

Heineken

$721,100,489

3.7%

Dos Equis XX Lager Especial

$304,726,850

19.0%

Stella Artois

$234,499,379

13.7%

Corona Light

$234,373,282

3.2%

Tecate

$154,423,394

-3.1%

Labatt Blue

$78,075,832

-5.3%

Pacifico

$74,861,991

6.7%

Labatt Blue Light

$72,829,759

-0.5%

SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 4/19/15

NOT! Labatt Blue

BEVNET MAGAZINE JUNE 2015

27

Gerry’s Insights

The Energy Alphabet

By Gerry Khermouch

Considering that the first apartment I ever rented under my own name was in a pungent part of New York called Alphabet City, count me as sympathetic to all editorial projects alphabetic, as we’re getting again this month in BevNET Magazine.

(If you’re wondering, I was 17, and my compact studio – bathtub in the kitchen, kitchen in the living room and Day-Glo stars and planets painted on the ceiling by the hippies who’d occupied the place before me – was just off Avenue B, one avenue away from “The Avenue Bearing the Initial of Christ into the New World,” as Avenue C had been memorialized in a sprawling poem by Galway Kinnell. By the time I got there, though, Christ had fled to the suburbs and left the neighborhood to the drug addicts, the driftless, the demented and a few Ukrainian holdouts.)

At this writing, I don’t know whom the wise editors have settled upon for this year’s compendium of movers and shakers (though it’s a fair guess that the letter K is unsullied by the name Khermouch). But I hope they’ve made room for names like Hall, Sacks, Schlosberg, Weiner, Mateschitz and Bhargava because, collectively, these rivals have attained a rare miracle in beverages: nurtured a category that’s managed to continue growing at a brisk pace while remaining emphatically premium in price.

That category, of course, is energy drinks.

It truly is a miracle. By now the category is 18 years old in this country, dating back to the launches of the Red Bull and Hansen brands in 1997, and the lion’s share of volume has consolidated around a handful of big brands. Usually that’s a recipe for relentless rounds of price promotion in c-stores and largeformat retailers, and a sputtering out of innovation. That’s been anything but the case in energy. Though we see sporadic eruptions of promotional skirmishing, by and large the key energy players have managed that rare feat of growing fast while remaining premium in price. Can you think of another established category where that’s been the case? I can’t.

Why has this category avoided these traps? I’d hazard the guess that it’s because the leading brands – Red Bull,

28 JUNE 2015 BEVNET MAGAZINE

Monster, Rockstar, 5-Hour Energy – have all remained independent, still in the hands of the entrepreneurs who created them. That’s served to maintain a sense of urgency about the brands’ development and kept them out of the morass of the big beverage companies’ beggar-thy-neighbor, lowest-common-denominator marketing development programs and promo calendars. Remarkably, fighting the usual entropy, some of the captive brands are going the other way: any week now, Coca-Cola will transfer all its energy brands, including NOS and Full Throttle, to the stewardship of Monster Beverage, as part of an unusually far-sighted transaction that’s seeing Coke take a 17 percent stake in MNST and receive Monster’s non-energy brands. I say far-sighted because it represents a recognition by Coke managers that the category will only continue to thrive if it’s kept out of the suffocating embrace of big companies like Coke, however wellintended they may be. Have we ever seen that before either? Not that I can recall.

It leaves the energy landscape in a fascinating place. Category pioneer Red Bull continues as a solo act globally, its founder Dietrich Mateschitz apparently intent on resisting any buyout invitations as long as he’s having a ball running the enterprise, which he clearly seems to be doing judging by the ever-inventive stunts the company devises to keep Mateschitz

entertained and its marketing fresh. And while Red Bull has never gone in much for product innovation (that’s not intended as a gibe – nor have such long-running successes as Corona Extra beer), it’s at least begun to steadily add flavor extensions, to favorable effect. And while Monster and Rockstar from time to time slug it out on price, Red Bull seems to stay resolutely above that fray, a stance that’s redounded to the great benefit of every player in the category. Again, credit Mateschitz and his North American steward, Stefan Kozak.

Then there’s Monster Energy. Though I can’t claim any great inside knowledge of how the company operates, it seems to benefit from a particular creative tension between the instinctual marketing genius of the brand’s creator, Mark Hall, and the financial and operational acumen of his corporate overseers, chairman/ceo Rodney Sacks and vice chairman Hilton Schlosberg. For a while, that tension drove Hall away to a year-long sabbatical, but I hear he’s returned to a grateful team energized and ready to start playing with his new toys, those Coke brands coming his way. Meanwhile, the company continues to take a liberated approach to package and product innovation, with a willingness to try all kinds of concepts, kill the losers quickly and keep moving forward.

It’s taken an almost clinical approach to exploring energy hybrids like coffees, teas, protein drinks and juices, and its Ultra

Zero inaugurated a new generation of great-tasting, upscale zero-calorie entries.

For its part, Rockstar moves mainly through the Pepsi bottling network, but there’s no ownership tie and, crucially, Rockstar has retained its independent distribution network in the northwest quadrant of the country, where the brand continues to be a formidable presence even as it slips further behind Red Bull and Monster in the rest of the U.S. (That structure might seem inefficient, but maintaining control of its core territory confers a liberating effect on Rockstar, kind of like the way Lauren Bacall’s $30-odd stash in To Have and Have Not offers “just enough to be able to say ‘no’ if I feel like it.”) For a few years Rockstar could fairly be accused of mimicking Monster innovations, but lately it’s offering its share of intriguing new entries.

Indeed, out of an apparent desire to avoid collisions with Pepsi’s other energy plays, notably the Starbucks Doubleshot

coffee energy lines and Mountain Dew’s Kickstart extension, Rockstar founder Russ Weiner and his team lately seem to be working harder to offer unique variants – using almondmilk in Rockstar Roasted, for instance, as a non-dairy alternative to the more conventional dairy-based formulation employed by Pepsi and Starbucks in Doubleshot. It’s even launched an organic entry. Whether retailers and consumers will allow the Rockstar brand to stretch that far will be interesting to observe, but the company certainly is offering a bunch of reasonably thoughtful innovation.

Lately 5-Hour has gone flat and in some ways it can be viewed as participating in a separate shot category but under its founder Manoj Bhargava it remains unassailable in that realm, and continues as a premium play. Then there are a range of smaller brands, some staking out a purportedly healthier positioning than the core canned entries, and others that are more conventionally positioned but now

see an opportunity to crack the Budweiser distribution network that’s just been abandoned by Monster. Foremost among those I would rank Xyience Xenergy, under Big Red ownership now, and VPX’s Redline. The healthier-energy set contains any number of intriguing plays, from the Hiball organic line to guayusa-based entries under the Runa and Mamma Chia brands. Strikingly, aside from a few modest plays like National Beverage’s Rip It, value-priced brands have never gotten a substantial foothold in the energy category, nor have retailers’ private-label brands.

That, too, is testimony to the power and discipline the branded entries have demonstrated. When you take a step back and realize that these are all playing in a seemingly depleted soda category, the achievement is that much more extraordinary.

Longtime beverage-watcher Gerry Khermouch is executive editor of Beverage Business Insights, a twice-weekly e-newsletter covering the nonalcoholic beverage sector.

BEVNET MAGAZINE JUNE 2015

29

ADDRESSING THOUSANDS OF BEER INDUSTRY PROFESSIONALS AT THE CONVENTION CENTER IN PORTLAND, ORE., CHARLIE PAPAZIAN, THE PRESIDENT OF THE BREWERS ASSOCIATION, DETAILED THE SIGNIFICANCE OF CRAFT BREWERY SELF-REFLECTION. Kicking off this year’s Craft Brewers Conference, Papazian expressed the importance of brand development, cultivating an image and “knowing who you are and why you do the things you do” in order to succeed in a crowded marketplace that shows no imminent signs of plateauing.

“Never ever under-estimate the importance of defining yourself, your company, your brand and your uniqueness as a group of small and independent brewers,” he said. “Don’t let others define you.”

The BA, for its part, actually does define craft brewers. By their standards, a craft brewer must be small (producing less than 30 JUNE 2015 BEVNET MAGAZINE

6 million barrels per year), independent (less than 25 percent owned by a company that is itself not a craft brewer) and traditional (the majority of a brewer’s total beverage output is comprised of traditional or innovative brewing ingredients).

While last year’s opening session focused heavily on maintaining quality, this year Papazian, alongside other BA executives, focused on the future, discussing not only identity building, but also legislative initiatives and the sudden influx of private equity money infiltrating the space.

Speakers during the general session also addressed legislative issues, specifically the

Small BREW Act, a BA-backed tax initiative on Capitol Hill that aims to dramatically cut back the federal excise rate brewers pay on every barrel of beer they produce.

Katie Marisic, the BA’s newly appointed federal affairs manager, called for attendees to consider how such legislation would impact their businesses.

“I want you to think about what you’d do with that type of money,” she said. “Reinvest, grow your brewery, hire employees.”

Gary Fish, chair of the BA board and president of Oregon’s own stalwart Deschutes Brewery, reminded the audience that such initiatives aren’t entirely unopposed.

“We face a barrage of opposition on Capitol Hill, all from within the beer industry,” he said.

The Beer Institute supports a competing tax cut proposal, the Fair BEER Act, which would benefit brewers of all sizes, not just those that produce fewer than 6 million barrels per year.

And then there’s increased frequency of dealmaking in the space, by global beer corporations, recognized craft brewer-

ies, and private equity firms alike. By BA director Paul Gatza’s calculus, over the past year, there’s been a deal of some sort about once per month on average.

What that all means, exactly, Gatza has yet to make heads or tails of, he said.

“When the large buys the small, there’s a bit of backlash,” he said. “But the private equity deals, I don’t really know how that’s going to play out.”

Gatza also touched on some of the other conflicts facing the industry, including intellectual property disputes,

in the U.S. • The top five states for brewery openings in 2014 were Washington (83), New York (67) California (59), Colorado (55), and Florida (42).

Meanwhile, another key session at the conference to one of the biggest issues facing the craft brewing industry as it continues to evolve: franchise laws, the rules that contractually bind manufacturers to their wholesaler partners.

Across the country, brewers are trying to find more latitude in how they bring

and a net good for the industry at large.

Laying out the case for brewer-friendly reform, one of the main things Sorini discussed was self-distribution. He said the freedom to do business without a wholesaler in the first place alleviates some of the risks assumed by wholesalers when they take on new brands.

Sorini said self-distribution provides an incubator for smaller brands to test the market on their own before a wholesaler commits valuable resources behind selling a new and unknown product.

difficulties with distribution partners, and FDA labeling requirements.

Lastly, BA staff economist Bart Watson laid out some of the cold hard numbers, putting into perspective what this industry has wrought to this point: • The U.S. brewing industry employs 115,469 people (64,068 full time; 51,401 part time).

• Craft beer volume grew 18 percent in 2014 while dollar sales increased 22 percent (22.2 million craft barrels sold).

• Meanwhile, overall beer was up a mere 0.5 percent (“Without craft brewers, the overall beer market would be lagging,” said Watson.

• U.S. Brewery breakdown: 1,871 microbreweries, 1412 brewpubs, and 135 regional breweries for a total of 3,418 craft breweries.

• There were 46 closings in 2014 (against 68 the year prior).

• Conversely, there were 615 openings in 2014 (1.7 per day).

• There are 2,051 breweries in planning

beer to market. On the other hand, wholesalers want not to be at the flippant will of a partner who may terminate a relationship for no good reason, thereby crippling their own business.

It’s a tricky situation and the laws and solutions vary from state to state. But that didn’t stop Marc Sorini, an attorney with McDermott, Will & Emory who specializes in alcohol regulation, from tackling the subject.

Before making the case for reform, Sorini explained some of the benefits of tied house laws. He brought up the example of a major soda brand essentially buying a retail franchise, keeping a major establishment stocked only with Coke or Pepsi products, for instance.

“That kind of naked, perfectly legal, ‘I’m going to buy Applebees’ can’t happen here,” he said. “That’s extremely good for you.”

That is to say, the current system comes with certain protections for brewers providing them viable routes to market.

Nevertheless, he said, reform is necessary

“How many great brands have been created by self distribution? When you think of Stone, think of Widmer,” he said.

Now, however? “They’re making distributors lots and lots of money.”

Sorini also spent a sizeable portion of the talk countering some of the arguments against reform. One of the oftcited rebukes is rooted in the old adage, “if it ain’t broke, don’t fix it.” While the system may not be broken, Sorini noted that more lenient laws are in place in some of the nation’s most notable craft markets. The three-tier system of brewers, distributors and retailers has not been fractured in those areas, he said.

Regardless of the contentious nature of the subject matter, Sorini said he expects to see “more reasonableness on both sides” over the next five years as industry stakeholders in all 50 states evaluate the mechanics of the three-tier system and push for reform.

“I think the logic behind it is very strong and I think the political case behind it is becoming stronger,” he said.

32 JUNE 2015 BEVNET MAGAZINE

Even in the face of sustained scrutiny surrounding caffeine content and potentially adverse health effects, the energy drink business continues to grow impressively. But despite the category’s resiliency, the fact remains that much of the aggressive imagery surrounding energy drinks is in stark contrast to the better-for-you trends currently permeating the food and beverage industries.

2013 and 2014 saw the category’s growth soften to single digits after years of double digit growth.

Accordingly, those in the business of marketing energy have begun looking beyond the tactics that first captured the attention of the category’s targeted 18-34 year old male demographic, as key retailers have made it an imperative to keep up with changing consumers and bring women into the fold. Additionally, it should be noted, outside pressure from the United States Senate has applied pressure to companies to move their marketing away from children.

Now don’t expect Red Bull, Monster and Rockstar to go all soft on us and abandon the products and marketing that made them category leaders. These are iconic brands with enormous followings and a great deal of their success is

34 JUNE 2015 BEVNET MAGAZINE

attributed to their ability to tap into youth culture. But they have made plays outside of their base. Monster’s non carbonated ‘Rehab’ line mixes energy and green tea, while Java Monster provides a coffee offering. Third place Rockstar has dabbled in everything from a certified organic line to mixing energy with coffee, coconut water, almond milk and seemingly every possible flavor in between. Red Bull’s been arguably the more conservative of the three, but the impressive performance of its flavored ‘Editions’ line and ‘Total Zero’ offerings is indicative of consumers welcoming more choices. Both Red Bull’s ‘Total Zero and Monster’s Absolute Zero are their fastest growing offerings.

“The success of the Red Bull Orange and Cherry Editions can be attributed to reducing the taste barrier with expanded choice for some consumers and added an option for those looking for zero calorie, zero sugar energy drink options,” wrote Patrice Radden, Red Bull’s Director of Corporate Communications, in an email to BevNET. Radden wouldn’t comment on specific marketing initiatives from the company, citing competitive reasons, but noted that flavored reduced sugar options are accounting for 59 percent of overall category growth,

according to Nielsen data. Those lower calorie options skew - you guessed it toward older, and female consumers.

SK Energy, the energy shot brand launched by Pure Growth Partners’ cofounder and CEO Chris Clarke and rapper turned entrepreneur investor Curtis “50 Cent” Jackson learned to realign its demographic appeal the hard way. Upon its launch in 2011 as Street King, the brand’s identity was one tied closely to that of its celebrity co-owner and in line with the hypermasculinity often associated with the product, with blinged-out lettering on its packaging and 50 Cent featured prominently in its promotion.

But in 2012, having made few inroads, the brand began to shift away from its introductory look, changing its name to the more universally appealing SK Energy and ditching Fiddy’s face, despite the fact that Jackson was and still remains actively involved in the company behind the scenes. Over the course of several packaging revamps, SK Energy re-emerged as a brand embracing betterfor-you ingredients and taking a genderneutral stance in its marketing. Instead of aligning itself with extreme adventure sports, SK brought on a roster of more widely embraceable brand ambassadors,

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TECHNOLOGY • CREATIVITY • INNOVATION

ENERGY DRINKS

ENERGY SHOTS

Brand

Dollar Sales

Red Bull

$3,814,118,912

Change vs. year earlier 7.15%

Monster Energy

$1,387,334,272

9.92%

Brand 5 Hour Energy

Dollar Sales

Change vs. year earlier

$1,052,573,312

-2.95%

Stacker 2 XTRA

$17,090,588

-0.66% -31.11%

Monster Energy Zero Ultra

$386,584,992

28.15%

Private Label

$10,194,744

NOS

$379,481,440

27.95%

Stacker 2

$9,623,018

10.14%

Java Monster

$331,048,416

12.17%

Tweaker

$8,694,328

26.20%

Monster Rehab

$308,254,304

-10.41%

Street King

$8,677,432

40.98%

Rockstar

$300,366,496

1.32%

Stacker 2 6 Hour Power

$7,949,858

-36.16%

Monster Energy Lo Carb

$293,055,776

-5.16%

Stacker 2 Extreme

$4,880,727

-2.33%

Monster Mega Energy

$244,721,552

0.36%

Rhino Rush

$4,305,697

244.19%

Monster Energy Absolute Zero

$164,072,256

-18.82%

Fuel In A Bottle

$3,539,866

22.35%

E6

$2,627,991

-16.20%

Rip It Energy Fuel

$2,514,406

-46.99%

Vital 4U Screamin Energy

$2,472,456

6.73%

VPX Redline Xtreme

$1,700,758

36.58%

AMP Energy

$141,635,456

-5.20%

Full Throttle

$140,220,032

1.20%

Monster Energy Ultra Red

$123,453,744

106.10%

Rockstar Sugar Free

$114,539,736

-11.41%

Monster Energy Ultra Blue

$109,034,072

-3.05%

Red Bull Total Zero

$103,766,496

-10.88%

Rockstar Punched

$102,529,256

-0.51%

Rockstar Recovery

$96,878,824

Rockstar Pure Zero

$92,058,008

Energy 2000

$1,362,528

-18.36%

Nitro 2 Go

$1,153,843

-13.38%

Vital 4U Liquid Energy

$1,131,990

-7.24%

-16.88%

Nitro 2 Go Instant Energy

$739,897

9.79%

56.70%

Nitro 2 Go Mega Shot

$668,670

-35.07%

SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 4/19/15

including NFL stars Colin Kaepernick and Wes Welker and female television personalities like Fox Sports’ Erin Andrews and Univision’s Claudia Molina.

“There’s a changing perception of what energy can be and there’s opportunity there,” says SK Energy President Sabrina Peterson. “We’ve been looking to grow the category by bringing in new users who previously may have been alienated by the market leaders.”

That noted, for energy shots, at least, the category has a history of looking outside the energy category’s age demographic. 5-Hour Energy, after all, advertises on NPR and in the American

36 JUNE 2015 BEVNET MAGAZINE

Association of Retired Persons’ magazine and does big business in golf clubhouses.

In contrast to the pivot shown by SK, San Francisco-based Hiball has been billing itself as the energy drink of the health conscious consumer since 2005.

Company founder Todd Berardi asserts that while his brand may have been “ahead of its time” then, Hiball now finds itself in prime position to capitalize on current industry trends. Like SK, Hiball’s aiming to bring new users into the category, but Berardi’s also looking to grab ahold of another group: existing energy drink consumers aging out of the market leaders’ primary audience.

“There are a lot of people that are graduating from [mainstream energy drinks],” Berardi says. “They don’t want to be drinking stuff that’s laden with artificial ingredients but they still need energy and we offer the energy they’re looking for in something that’s all natural, organic, and fair-trade, with less sugar and less calories.”

According to SPINS data, Hiball is currently the fastest growing natural and organic energy drink brand in the United States, experiencing triple digit growth over the last several years. But Berardi’s also looking beyond the natural channel.

“Organic, all-natural, fair trade - these are things that weren’t even on the radar of a buyer from a 7-11 or Wallgreens five years ago,” he says. “But it’s certainly one of their top initiatives now. We’re constantly hearing from these bigger chains that they want healthier energy options.”

Like some of the aforementioned category leaders, Hiball is also taking the route of crossing energy with other trending beverage categories. In March the company launched a line of organic cold brew coffees in Whole Foods and recently unveiled an upcoming line of Hiball High Protein Energy Shakes.

In a similar blurring of the lines, Brooklyn-based Runa has packaged energy within another growing segment: bottled tea. Runa does offer its Amazonian guayusa-based beverage in a conventional 8.4 oz can, but the majority of the company’s sales come by way of its glass bottles.

“There’s a stigma surrounding energy drinks of being associated with unhealthy ingredients and aggressive brand images so a lot of people have dismissed the carbonated can altogether,” says Runa co-founder Tyler Gage. “A lot of our consumers are people who would never touch an energy drink but they grab the glass bottle, see it’s from a natural brewed leaf, and are able to wrap their heads around an energy drink in that format.”

Runa’s also done well with females, and it’s not just because the company has super hunk Channing Tatum on board as an investor and brand ambassador. Gage likens his brand’s female attraction to how women adopted coconut water as the sports drink of choice in yoga studios and spinning classes.

“One of the parallels that we see is how a lot of coconut water drinkers migrated

from the Gatorades of the world to a product with a single ingredient that was all natural,” Gage adds. “So [with Runa], we’re able to tell a similar story because our brand is based on a single brewed leaf that’s all natural and has the same functional benefits of energy. The consumer mindset is there for that.”

Are zero-sugar, CHANNING TATUM, INVESTOR & BRAND AMBASSADOR, WITH RUNA low-calorie alternaCO-FOUNDER, TYLER GAGE AT EXPO WEST tives enough for the category leaders to Cider” or “Cocaine” and the conscious adapt to changing consumer tastes? Can push to advertise behind increased cafa brand like Hiball or Runa end up in gas feine levels has receded. What is also apstation convenience stores alongside Red parent is is that there’s room for brands to Bull and Monster, an imperative as well play outside the box in a category whose because that shopper set itself is evolving from the stereotypical “Bubba” to more of consumer set has been defined by its powa female contingent? Perhaps it’s too early erhouses. By all accounts analysts and retailers remain bullish on the category on to tell, but what is clear is that the early the whole, and for good reason. There’s battles for brash appeal - the nomenclaan energy drink for everyone now. ture that led to products like “Dicken’s

BEVNET MAGAZINE JUNE 2015

37

Brand News

Energy Drinks

Red Bull expanded its successful ‘Editions’ product line earlier this year, adding Orange, Cherry, and Yellow offerings to its roster. The company has also brought back its limited-edition camo-themed can through its military channels, which will be available from Memorial Day through the end of July. Proceeds from the 16 fl. oz. special edition can will benefit the Military Warriors Support Foundation’s Home4WoundedHeroes program, which awards mortgage-free homes and three years of family and financial mentoring to wounded combat heroes.

BAWLS Guarana has added a Mandarin

Orange flavor to its lineup of highly caffeinated premium sodas. The new flavor is available in stores in the brand’s signature 10 oz. bumpy glass bottle and in 16 oz cans nationwide.

Hiball has launched a new cold brew coffee line exclusively and nationally at Whole Foods Markets.

Made from 100 percent organic fair trade certified arabica beans, each 8 oz. can contains 120 mg of organic caffeine from the cold brew and is enhanced with 25 mg of organic guarana and ginseng, in addition to B-Vitamins. The new Energy Coffees are available in three flavors: Coffee, Mocha, and Vanilla. The brand also recently launched a new 16 oz. Organic Black Cherry flavor.

CRUNK!!! Energy has added a Tropical Blast

flavor made with Passion Fruits to its line of naturally flavored energy drinks. The brand has also undergone a packaging redesign for its 16 oz. cans.

Liquid Ice has added two new flavors to its lineup: Liquid Ice Black and Liquid Ice Orange.

The new drinks are available at retailers such as Casey’s General Stores, Holiday Stationstores, Logg n Jugs, Quik Trips, Super Americas, and local chain operations in over 40 states by way of selected Anheuser Busch, MillerCoors, PepsiCo and Coca-Cola distributors.

Mossy Oak Pursuit Energy has added a Blue Raspberry flavor to its roster, joining Original, Citrus Berry, All Zero and Orange. All flavors of the rugged, camo-themed energy drink will be available nationwide at over 10,000 retailers and online at Amazon.com.

HYDRIVE energy water introduced Strawberry and Raspberry Lemonade flavors in April. The company also recently teamed up with 20th

38 JUNE 2015 BEVNET MAGAZINE

Century Fox to promote the upcoming summer comedy Spy starring Melissa McCarthy and Jason Statham.

XYIENCE is prepping for a brand overhaul

with new positioning, packaging and national marketing campaign slated for the third quarter of 2015. The company was acquired by Texasbased independent soda company Big Red Ltd. in September of 2014.

Living Essentials is donating five cents from

the sale of every red, white and blue bottled of cherry flavored 5-hour Energy to the Special Operations Warrior Foundation, a nonprofit organization that supports the military’s special operations forced and their families through college scholarships, family services, and financial stipends. The company’s minimum guaranteed donation is $200,000. At the top of the year, 5-Hour announced a line-wide flavor overhaul.

Mamma Chia will be introducing newly redesigned packaging for its Clean Energy Beverages this summer, which will showcase a bolder upper band with clearly differentiated colors to distinguish between the line’s four flavors. The product currently sees nationwide distribution at retailers such as Whole Foods, Target, Albertsons, and Safeway, and will be adding placements in Ralph’s, Fred Meyer, QFC, and Jewel in June.

Pirate Energy recently launched its first Extra Strength flavor, Hard Lemon Rush, to its line of cocktail-inspired energy shots. Hard Lemon Rush joins Margarita, Hurricane, Pina Colada Mojito, and Pirate Punch.

Beaver Buzz Energy is celebrating the brand’s

10th anniversary with the addition of a new zero-calorie, zero-sugar flavor Canadian Punch.

The brand is also available in three other flavors, Citrus, Saskatoon Berry, and Green Tea. Beaver Buzz can be found on store shelves throughout Canada and online via Amazon.com FEEL, which markets itself as the anti-energy

drink, energy drink, provides consumers with 85 mg of naturally occurring caffeine and an excellent source of antioxidants. Available in Raspberry Lemonade, Wild Berry, and Mango Passionfruit flavors, the brand is carried at natural, specialty, and gourmet retailers in the Midwest, with plans to expand to the West Coast.

SPONSORED BY:

The company will be entering Fresh & Easy stores later this year.

Chasing Rabbits has undergone a packaging re-

design for its non-GMO, low-glycemic, 60-calorie-per-can and natural-ingredient-formulated energy drink. The brand currently sees distribution in Northern California and San Francisco Bay Area retailers, with upcoming plans to expand to the Pacific Northwest and Hawaii.

Dark Dog organic energy drinks are USDA

certified organic and Non-GMO-project-verified. The product is available in three varieties: Original, Blood Orange, and its 50 calorie version, all of which provide a total of seven vitamins. The company’s distribution continues to expand online via Amazon.com as well as at retailers like Harris Teeter.

Madrat Elixr’s recently introduced energy shot is a strong source of Vitamin C and Vitamin B-12. The new product is low-glycemic, dairyfree, soy-free, GMO-free, and sugar free.

iDrink’s energy beverages derive their caf-

feine from a source of organic guarana, organic ginseng, and organic green tea leaf extract. The product is available in three flavors - Blueberry Pomegranate, Peach Mango, and Fuji Apple Pear - at a suggested retail price of $1.99 per can.

Fighter Energy recently began distribution

with H.T. Hackney Co. and is now available in over 100 locations in South Florida. The effervescent energy drink tablet comes in a tube of 10, providing 37.5mg of caffeine, taurine and B vitamins per tablet.

Cool Blue Revitalizer packs 100 mg of natural

caffeine in 60 calories, with cane sugar and and natural flavors in place of artificial sweeteners like high fructose corn syrup, synthetic caffeine, and taurine. The Triple Berry Blend flavor profile is packaged in the brand’s signature clear can.

Diabolo Loco’s Acai Berry Guava and French

Lemonade energy drinks are now available in Hawaii through Kahuna Distribution, as well as in HEB stores in Texas, Basha’s in Arizona, and Albertson’s throughout Southern California.

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39

2015 A-to-Z OF POWER the beta edition

BY JEFFREY KLINEMAN

This marks our second annual A-to-Z of Power Listing for the beverage industry, and while we’re excite to make this a regular occurrence, we hate to repeat ourselves. So we haven’t. Not a single letter features a repeat of our original list, and that’s because when it comes to the beverage industry, power is diffuse. Distributors may have more ability to make or break an entrepreneurial brand than they may have over a giant soda company – until that soda company wants to invest in and incubate that entrepreneurial brand.

Investors can’t control the winds affecting unique sup-

ply chains, while brands can kill a supplier by switching sweeteners or key ingredients. Keeping that in mind, the one thing we’ve repeated from last year is a willingness to consider power from many different angles. After all, while money is important, this industry is also all about delivering taste and satisfaction. That keeps it fresh. After all, if it was just the wealthiest who made all of the decisions, we might just be looking at President Trump. So in keeping with our alphabetical ordination, here’s the A-to-Z’s Beta List. We look forward to the discussions it creates.

A is for "Austin Mafia"

B is for bacteria Live or dead, beneficial or deadly, the presence of these critters is compelling the growth of all manner of beverage categories. Whether it’s killing them through pasteurization – or not killing them for fermented drinks – they’re the key to determining whether a product will be able to get on the market, or stay there. Bacterial growth in a beverage can quickly cause a recall – unless it’s the right kind of live strain, in which case it’s a probiotic.

Quixotic, no doubt – but such is the life of the one-celled.

C IS FOR JEFF CHURCH A collection of good ol’ miscreants that wreak havoc on shelves with perfectly honed products like Sweet Leaf tea and now High Brew Coffee. Clayton Christopher, David Smith, Scott Jensen, Brian Goldberg, Perry Abbenante, are

drawn and determined to keep Austin on the map as a place where new CPG brands can take root and grow. Austin is a small town with big resources in cash and technology, and the team that grew Sweet Leaf is always on the

40 JUNE 2015 BEVNET MAGAZINE

lookout for a way to pump up its next venture. Add in the spirit of SKU (formerly Incubation Station) and a Brooklyn-sized chip on their shoulder, and this is a new kind of perfect storm of creative capitalization: The Texas Whirlwind.

One of the hottest questions in the beverage business deals with the ultimate fate of next-generation juice category leader SUJA, and the buck stops with co-founder and CEO Jeff Church. Having proven a savvy fundraiser for the infrastructure that supports

the pedal-to-the-metal innovation and marketing operation, the veteran dealmaker is going to have to decide when to pull the trigger on an exit. The brand’s Essentials line – the true revenue escalator, as it’s aimed at conventional grocery – is growing exponentially, but it’s still tiny compared to Odwalla, Naked, or (see below) Bolthouse. Does he sell before the strategics make their own move into the category, or does he think there’s enough ammunition for a few more years of growth and a higher sales number? There are other influential members of the SUJA team, of course – investors like ACG and Boulder Brands will have their say – but so far under Church’s leadership there haven’t been many missteps at all, and as long as SUJA’s the Belle of the Ball, he’ll be the one calling the tune.

D is for Jeff Dunn of Bolthouse Farms Once President of Coca-Cola North America, Dunn is seven years into a run at Bolthouse that has evolved the leadership of an important division of parent company Campbell’s.

From his new platform, leading the company’s fresh division, Dunn will be able to leverage Bolthouse’s reputation and quality into new opportunities for Campbell’s. There’s synergy here: Bolthouse is already a huge name brand in supermarkets, as successful a platform as Kashi or Annie’s, and it’s moving to fill adjacent channels like convenience, where Campbell’s has a foothold already. It will be a big step to raise the venerable soup-maker’s profile among new generations, but the ever-energetic Dunn is driven with the conviction that he is making the world healthier on a broad basis.

The canvas is there, and he’s raring to fill it up.

G is for Gang Funding

E is for EMERGING STRATEGIC ENTITIES

– like White Wave, Hain, Boulder Brands Investment Group (BIG), General Mills’ 301 Inc., and the other companies that are forming a new wave of corporate venture capital and acquisition for entrepreneurial brands, creating a shift in the power of traditional beverage strategics. White Wave’s Earthbound Farms has invested in Daily Greens, while Hain has several beverage investments, shaking up the progress of categories like kombucha, tea, and juice. Meanwhile, Boulder Brands’ willingness to put its faith in products like Suja and, most recently, Temple Turmeric, validates bleeding-edge functional plays and combines it with the execution skill of its own team as well as close ally Presence Marketing. General Mills is using 301 Inc. like Coke’s VEB group, as a way to buy into entrepreneurial products before they scale up, but in the meantime it has taken its previous investment group, Small Planet Foods, and spread its acquisitions around, creating a new organizing principle among its verticals that is sure to attract growing brands. Interest from large-, mid- and small-cap strategics will be focused on entrepreneurs until they are able to recast themselves as armed for future consumer trends.

– also known as Hat Passing, it’s become a key term in the fundraising process for hot brands. No, we don’t mean CircleUp, although that kind of online crowdfunding certainly invites the kind of $1-$3 million rounds we’re seeing these days. It’s more like an “in-the-know” echo chamber of affiliated funds who band together to help companies raise their first significant round of growth capital. Examples of groups who enjoy this include Finn Capital Partners, the ArcView Group,TheSimplePitch.com, Clover Capital, New Ground, Midori Ventures and many others – part family office, part private equity, part experienced operator, they rarely invest on their own, and they bring different skills to the companies they back.

H is for Judy Hong and Bonnie Herzog This powerful pair of beverage industry analysts (Hong is a Managing Director at Goldman Sachs, Herzog at Wells Fargo) are key voices when

F IS FOR FIRST BEVERAGE

– always connected to cash and capabilities under founder Bill Anderson and key executives Tom First and J.B. Shireman, this specialty firm came into its own in a big way last year, both investing in new brands and helping orchestrate the sale of or investment in several others. After a slow period where much of its energy seemed to be devoted to building a consulting practice, the pace finally picked up for this high-powered collective in late 2013.

Since then, the firm has been first among dealmakers, with its investment banking operation orchestrating the sales of 10 Barrel Brewing to Anheuser Busch, Xyience to Big Red, and craft operation Boulevard to Duvel Moortgat, and orchestrating capital raises for Argo Tea, and Southern Tier. Meanwhile, after raising a fund – with the Coca-Cola Co. as one of its investors – the company started making a new round of bets on brands, letting First and recent hire Jason Camillos offer hands-on help. With recent investments in growing brands Essentia, Project Juice, Health Ade, and software firm Repsly joining Purity Organic in its stable of properties, First Beverage is red hot.

BEVNET MAGAZINE JUNE 2015

41

it comes to the fates of both the beverage industry’s titans like Coke, Pepsi, DPSG, and Monster, but also the key convenience retailing channels these brands need to grow.

Herzog pays special attention to emerging brands: she’s done interviews with Kevin Klock of Talking Rain, Paddy Spence of Zevia, and many more, and is willing to dive deep into private companies to try to understand what moves the big brands will make. Hong, for her part, gets extra bonus points because

Goldman Sachs is also the investment banker for massive energy drinks brand Rockstar, one of the biggest independent prizes available.

I IS FOR INCUBATORS Drink Tank, SKU, Brand Project, the new Chobani Food Incubator, Accel Foods are just a few examples of these increasingly important stops for brands that are trying to establish themselves and gain experience. While there hasn’t yet been a breakout success from

these investor/mentor groups, it’s only a matter of time before someone hits it big. Meanwhile, they continue to attract a stream of small companies looking to learn the ropes.

K is for Mike Kirban Back in the saddle again. Vita Coco’s co-founder and CEO, Kirban dipped back down into the president’s seat in the U.S. after spending the past couple of years building out the brand’s Asia operations and securing a $165 million

J is for JERRY BROWN California’s once-and-future Governor Moonbeam. As water shortages continue, Brown’s recent order requiring a 25 percent reduction in water use is the tip of the evaporating iceberg. He left farmers untouched, despite the fact that they use 80 percent of the state’s water. Lots of insurgent and established brands will feel close-in ripples from Brown’s ongoing thoughts on water usage. Almond milk has unfairly been singled out by some as a cause celebre of the greener-than-thou movement, but in both the public eye and in the public process, nearly all California crops are under scrutiny, from artichokes and peaches to rice and other grains. Avocados have been growing as an ingredient in HPP juices: guess where 88 percent of the domestic production lies?

Other staples like milk, orange juice, carrot juice and wine are heavily reliant on California’s production – and that production is directly related not just to rain, but farmers’ use of water as a resource that can be sold like pollution credits. Change the water usage habits of California farmers, and the entire agricultural makeup of the U.S. shifts.

42 JUNE 2015 BEVNET MAGAZINE

investment from China’s leading Red Bull distributor. An entrepreneur who has started his own software company as well as Vita Coco, Kirban has proven restless and willing to take the tough steps by parting ways with veteran personnel.

Now that he’s spreading the wealth around to new investments like WTRMLN WTR, along with rye whiskey play Whistle Pig, it’ll be interesting to see how much Kirban decides to play kingmaker.

L is for Labeling Lawyers like Justin Prochnow, Rakesh Amin, and Steven Shapiro, who are constantly on the circuit as leading voices for brands to steer clear of regulatory authorities. At a time when class-action suits are becoming ever-morecommon, having knowledge of controversial trade language and safe harbors for functional claims is the rule, and a careful, ongoing process of label review can save millions.

M IS FOR Musicians – from dance queens like Madonna and Rihanna (Vita Coco) to psychedelic warriors like Phish’s Jon Fishman (Runa) and the Grateful Dead’s Bob Weir (DripDrop); from hip hop celebs like Snoop Dogg (Arriba!), Juicy J. (CORE), or 50 Cent (Vitaminwater, SK) all the way to transcendent supernovas with musical ties like P. Diddy and Mark Wahlberg (both Aquahydrate), fast-growing beverage companies can’t stay away from the people who write the songs. Here’s a theory: songs are the only products that are “used” more frequently than beverages on a daily or weekly repeat basis. Here’s another theory: some musicians are rich and popular.

The 2014 Listing: Who’s Up, Who’s Down “The highway’s jammed with broken heroes on a last chance power drive.” – Bruce Springsteen.

We’ll, maybe not last chances, but some of our power picks from last year stayed in the fast lane, while others decelerated. Here’s a selection:

Certifying Organizations

Grumbling got louder about these guys as consumers started to question the premise of some certifications, non-GMO in particular. Meanwhile, designers started to complain – too many badges, ribbons, and others signifying certifications and labels look like “The General” rather than distinct brands.

Behind Monster, Sparkling Ice, and more, there was huge growth at Big Geyser. And the company certainly

Hershkowitz

put on a big power display when the distributor stopped carrying Glaceau. But did the company risk biting the hand that feeds it a steady diet of VEB Products, and that now owns a big pile of Monster? Powerful stuff...

Stayed strong, although both Vita Coco and Monster took some money off the table, along with newcomer

Independents

Bai. Still, with valuations getting a little too high for some strategics, they’re all going to have to keep proving they can make it on their own.

Craft Beer Kochs: Jim and Greg

Bicoastal non-relatives both took a lot of mud to the face in the last year. Greg seemed to get uncharacteristically quiet, taking a travel hiatus, while Jim is fighting back with increased visibility and a bigtime IPA release.

In June, took on Coke’s VEB unit as a minority investor, strengthening ties to important source of business while

L.A. Libations

maintaining strong sense of operational independence; company continues to troubleshoot for bigger partners like Coke, Evian, A-B and more. Also diversified business, starting to sell snacks alongside in-house brands like Aloe Gloe and Arriba.

Mostly good news for Jack Belsito and Greg Steltenpohl, as VOSS and Califia Farms are growing and

Old Guard

grabbing attention across the country. Tougher year for C.J. Rapp and Karma, which continues to scrape along in search of momentum.

Pulls huge coup for Monster, getting billions from Coke while also acquiring suite of energy products and

Rodney Sacks

distribution muscle while maintaining independent ownership. Meanwhile, Congressional criticism has slowed and diverse product offerings are keeping things fresh.

N is for NORTH CAROLINA

former team member Jeff Rubenstein is running marketing, as he had at Vita Coco – Oza’s influence can be seen in the staffing of many of the companies where he has invested.

One of the best in the business at figuring out which celebrity can help develop a brand, Oza’s sense of positioning and trend awareness is without peer.

P is for the Pressure Peddlers,

- a state that is making itself the East Coast power center for the craft brewing movement. With Asheville and environs soaking up production breweries for Oscar Blues, New Belgium, Sierra Nevada and others, and locals like Wicked Weed attracting attention as independent breweries in their own right, the state is both economically and geographically positioned to foster the growth of national craft brands.

O is for Rohan Oza It’s surprising for someone who came out of marketing, to be sure, but Oza has been a relatively quiet investor behind

Vita Coco and Bai, as well as equally trendy food brands Sir Kensington’s, Chef’s Cut and Popchips. Now championing WTRMLN WTR –where

44 JUNE 2015 BEVNET MAGAZINE

Avure and Hyperbaric, who are ensuring that there’s nowhere in the country a consumer can go without being chased by a $9 juice with a 30-day shelf life. Their HPP machines come with a low enough price ceiling that both individual manufacturers and co-packers are comfortable entering their mildly warmed waters. They’ve given rise to dozens of local and regional juice brands, but also churned confusion around the true definition of fresh.

Q IS FOR Questionable Strategies - the kinds of wholesale “we went in the wrong direction” mistakes that can crush a brand. We aren’t going to call anyone out, but these mistakes give off a powerful stink indeed.

R is for Christopher Reyes and Jude Reyes, the founders of Reyes Holdings – the owners of Reyes Beverage Group. Reyes would have been on this list even before its recent deal to take over Coke’s Chicago DSD operation. With a catalog that matches nearly every growing craft beer brand and a group of distributors covering half the country, the Reyes network combines the size of an oldschool trucking firm with an entirely on-trend breadth of offerings, making them the most important independent beer distributor in the country.

S is for Cyrus Schwartz, the CEO of Dora’s. Schwartz serves as an interesting counterpoint to the Reyes Group, as he’s built his empire on the back of the dairy industry. No less influential that the Reyes brothers, although perhaps with more limited reach, the Long Island native has turned his family’s milk business into one of the key gatekeepers in Manhattan for beverage brands that need to maintain a refrigerated supply chain from manufacturer to consumer. That used to be a small part of the industry, but now it’s everyone from Suja and Blueprint to Chameleon Cold Brew, Sambazon and GT’s Kombucha. With regular stops at almost every key account in Manhattan, Schwartz has access to manufacturing facilities on his dairy farms and an ironclad contract that offers great exposure for those willing to meet the requirements. With that kind of ability to execute and influence, you can call Schwartz the King of Cold.

T is for Tell No One It appears on the back of the card of “Beverage Whisperer” Ken Sadowsky, but it’s the worst-kept secret in the business: a visit with Sadowsky has become a rite of passage for just about every new liquid on the market. A current Vita Coco and former Glaceau board member, Sadowsky also has the ear of some of the most powerful wholesalers in the Northeast as the executive director of NIDA, which reviews most up-and-coming brands for potential distribution. As the beverage advisor for family fund Verlinvest – and a pretty active investor in his own right – Sadowsky has managed to create relationships that allow him to influence companies both through funding, board seats, team building, and oc-

casionally stern no-nonsense advice. A former distributor, he’ll hit the streets with companies he’s advising to look for possible influencer accounts, and even a knee injury couldn’t keep him from hitting every booth at the National Association of Convenience Stores. Tell No One, because chances are Sadowsky, who knows practically everyone, has probably heard it already.

U IS FOR UNFI Brands love UNFI when they get started, because they’ve cracked Whole Foods and know that this broadline distributor is the easiest way to get coverage. Then they get hit with chargebacks, tabletop show fees, and the other aggravations that come with a company that offers volume for compressed margins, and they start to hate it. But for those companies that can then bust into mainstream accounts, the love affair renews – because UNFI offers a steady, reliable way to keep a strong hand in original channels while you continue your

day-to-day battles with the independent DSD houses.

thinks there’s running room behind the tiny flaxseed, his record says it’s there.

W is for Chris White, the founder, president, and CEO of White Labs. White is the pioneering scientist who supplies the various yeast strains that have powered the growth of the funky side of the craft beer movement. With five offices in key spots throughout the U.S. and another facility in Copenhagen, White Labs is constantly breeding and growing new strains of this key ingredient for craft beer.

X is an opportunity to point out the recent success of 2X Consumer Partners, which is in the midst of several exits and has a new fund on the way. Founder Andy Whitman is making a bet on flaxseed as the next big alt-dairy play by investing in Good Karma Foods. Whitman has proven a master at finding the next trending component of established categories, with Tasty Bite in ethnic foods and Beanitos in snacks. If he

V is for VINEGAR

- and Vinegar-y tasting fermented drinks like Kombucha, Switchel and more. The tang and pucker isn’t for salad dressing anymore, and it’s making millionaires out of the makers of everything from Pok Pok Drinking Vinegar to Kevita to Synergy Kombucha. With bar menus and cold boxes making room for drinkable ferments, the taste for the funk is also reflected in sour beers.

Y is for Larry Young Despite the prominence VEB and Naked Emerging Brands, who is the only traditional beverage strategic to invest in an emerging brand the past two years? That would be DPSG, whose CEO, Larry Young, finally proved that the vaunted White system is going to be more than a trucking company for its affiliated brands by investing in fast-ramping BAI.

Z is for ZYMURGY

- the official publication of the Brewers Association, which gives us a chance to talk about this power center in our final letter. So let’s talk about the BA (especially since, between Papazian, Gatza, and Herz, its staff features a surprising number of names that feature the letter “Z.”) Is it becoming more controversial? Sure – it keeps moving definitional goal posts. Ineffectual? At times. But the Brewers Association, like the Lorax, is what speaks for the craft brewers, and with a couple thousand of them floating around, they comprise quite a group. Having the BA as the loudest voice at the table gives this ever-growing constituency someone to make sure their interests are represented. Or at least most of them, most of the time.

BEVNET MAGAZINE JUNE 2015

45

Trade Show

IFT 2015

WHAT

WHERE

WHEN

WHY

Institute of Food

McCormick Center

July 11 - 14

Learn the latest in

Technologists Annual

Chicago, IL

Expo: July 12 - 14

Meeting & Expo

food and beverage technology, innovation, formulation & science

IMPORTANT BEVERAGE-RELATED SESSIONS WHAT Preventing Economic Motivated Adulteration of Foods: The Perspectives of Stakeholders in Industry, Regulatory Agencies, and Academia Data Visualization: Storytelling for the Sensory and Consumer Researcher Sugar Reduction in Beverages: Challenges, Solutions, and Evaluation Techniques for Reduced Sugar/Zero Calorie Beverages The Top 10 Trends for Foods, Beverages and Nutrition in 2015 Studies in Food and Beverage Product Design: Successful and Unsuccessful Product Launches and the Impact of the Technical Design Brief

46 JUNE 2015 BEVNET MAGAZINE

TYPE

DATE

TIME

LOCATION

Panel

Sunday July 12, 2015

8:30 am - 10:00 am

S503

Symposium

Sunday July 12, 2015

1:30 pm - 3:00 pm

N427a

Symposium

Sunday July 12, 2015

1:30 pm - 3:00 pm

S502

Symposium

Monday July 13, 2015

2:15 pm - 3:15 pm

S502

Symposium

Tuesday July 14, 2015

1:15 pm - 2:15 pm

Food Expo Forum, expo oor

What do you get when you cross...

...the familiar with the exotic? The traditional with the trendy? As consumers increasingly seek out new and unique tastes within their comfort zone, the flavor technologists at Sensient are creating hybrids that are both unexpected and appealing. Come see what we’re fusing together at Booth #1931 at the Chicago 2015 IFT Show — it might just be the winning combination for your next product.

BEVERAGE FLAVORS | SAVORY FLAVORS | SWEET FLAVORS | NATURAL INGREDIENTS | sensientflavors.com

Trade Show

Summer Fancy Foods Preview

WHAT

WHERE

WHEN

WHO

2015 Summer Fancy

Jacob Javis Center

June 28: 10am - 5pm

Over 25,000

Foods Show hosted

655 West 34th St.

June 29: 10am - 5pm

industry attendees

by the Specialty

New York, NY

June 30: 10am - 4pm

with over

Foods Association

2,500 exhibitors

ALPHABETICAL EXHIBITOR LIST Exhibitor

Booth

Exhibitor

Booth

Exhibitor

Booth

Ace Farm USA, Inc.

5532

Eden Foods, Inc.

Aiya America

4273

Epicurean Beverages

Agua Enerviva LLC

5139

Eurobubblies / Eurobrew

Alkazone/Better Health Labs

5421

Fentimans North America, Inc.

5520

Andes Mountain Water

2412

Finest Kind Tea

AOI Tea Company

5113

Forager Project. LLC

Arrowhead Farms

3054

Four Blue Palms, Inc.

Organic Gemini

4626

Barnie’s CoffeeKitchen

4676

Grady’s Cold Brew

4745

Owl’s Brew

5100

Bittermilk LLC

5003

GUS - GROWN-UP SODA

4204

Pickett Brothers Beverage Co.

Blossom Water, LLC

5007

Harmless Harvest

5229

Pip Organic

Borgnine Beverage Co. Inc.

2946

HARNEY & SONS TEA COMPANY

4130

Pok Pok Som

Brands of Britain LLC

2250

Health-Ade, LLC

5323

Polar Beverages

Brands Within Reach

4040

Hella Bitter LLC

4755

Powell & Mahoney

4826

High Brew Coffee, INC

5563

PowerICE, Inc.

4647

HONEST TEA, INC.

1849

Q Drinks

4714

Bruce Cost Ginger Ale

942

Bungalow 23 Culinary

5013

Cocktail Mixers

1556

Marley Coffee

5329

754

MAWÜN RAINWATER

2428

921

Miracle Tree

3949

Mocktail Beverages Inc.

5253

5063

MOTTO

4821

5242

Orchid Island Juice Company

1756

4171

5529 3509A 4349 5137

I Love Roses

232

SANT ANIOL WATER

1628 2870

Buyer’s Best Friend, Inc.

4570

icebox water

5328

Skimpy Cocktails LLC

BWI, INC.

2660

Icelandic Glacial Inc

5250

Skinny Mixes, LLC

Califia Farms

3265

Interdrinks Co., Ltd.

3415

SMART JUICES, LLC

5319

Sound Sparkling Tea

New Brands

Celebes Coconut Corporation

951

ITO EN (North America)INC.

3956

CERES FRUIT JUICES

4538

Joe Tea & Joe Chips

4604

Charm City Beverage LLC

5430

Joia All Natural Soda

4852

Cheribundi

4726

Karoun Dairies Inc.

466

CideRoad, LLC

5503

KeHE Distributors LLC

2056

Coastal Cocktails Inc.

1250

Kelvin Natural Slush Co.

5533

Cocktail Crate

4752

Crio Inc.

5112

Dana D.O.O

5247

Kobu Beverages, LLC

5222 4751b

Stirrings, LLC

4805

Stonyfield

4277

Switchel LLC

3154

teapigs The Water Company 07 S.L. Tio Gazpacho

LaCroix

5341

Trickling Springs

Lily of the Desert

5226

United Juice Companies of

5346

LIVE Soda LLC

4638

America

4749b

Llanllyr Water

Demitri’s Gourmet Mixes

456

Desert Farms Inc. Dona Chai LLC

King Kava Beverage LLC

Dora’s Naturals, Inc.

5161

3512

4629 1702 New Brands 669 3165

United Natural Foods, Inc.

3160

Love Beets

5054

Vink & Beri LLC

2172

Vita Mansi Company Inc.

Dr. B’s Beverages, LLC

4105

Love Grace Inc.

5334

Drink Daily Greens LLC

5214

Mamma Chia LLC

3957

Earth & Vine Provisions, Inc.

4031

Maple Hill Creamery

5545

48 JUNE 2015 BEVNET MAGAZINE

655

5569

Promo Parade Promotions, events & specials for the industry

Hendrick's Gin Takes Off with The Flying Cucumber Hendrick's Gin has launched Hendrick's Air, a marketing venture that commenced with its flagship (and only) aircraft: a massive dirigible christened The Flying Cucumber.

The 130-foot long, 44-foot tall flying vessel is adorned with a giant "eye in the sky" which exudes both whimsy and a dashing sense of purpose, according to Hendrick’s.

It launched in April with a coast-to-coast voyage, granting expeditionary flights to

consumers in Los Angeles, San Francisco, Austin, Dallas, South Florida, New Jersey, New York, Philadelphia, Boston, Ann Arbor, Indianapolis, and Chicago. The dirigible will end flights in August.

The carrier's cucumber motif and insistence on dirigible flight were inspired by the gin's most prominent note of flavor – namely its infusion of cucumber essence (all the world over, Hendrick's & Tonics

Johnnie Walker Scotch Featured in “Entourage”-Inspired Short Film Johnnie Walker Scotch has partnered with the highly anticipated feature film Entourage to debut a new chapter in the storyline: the short film “Johnny for Johnnie.”

Like the Johnnie Walker ‘Keep Walking’ campaign, it’s the “dream large, live larger” spirit of Entourage that inspired the whisky brand to tap show creator Doug Ellin to write and produce an original short film featuring the beloved character, Johnny “Drama” Chase.

Directed by Entourage costar Kevin Connolly, the short film extends Johnny Drama’s plotline, showing how -- in true Johnny Drama style -- when you pursue a passion with overthe-top optimism, persistence and a little bit of “layering”, you can achieve…victory!

As an extension of the “Johnny for Johnnie” short film, the brand will soon be releasing a digital short reminding people the importance of responsible drinking, also scripted by Doug Ellin.

50 JUNE 2015 BEVNET MAGAZINE

are served with slices of cucumber rather than the perfunctory lime.)

The Hendrick's dirigible has been engineered to follow what "a slow and low" flight pattern, maintaining a "civilized speed of 35 mph," said Hendrick's National Brand Ambassador Jim Ryan. The Flying Cucumber's sub-1000-foot cruising altitude allows for what Ryan termed "an invigorating view of the marvels below."

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