September 10, 2013
Cold-Pressed, and Hell-Bent for Success
HAS 5-HOUR ENERGY FINALLY COOLED OFF?
TORPEDO! SIERRA NEVADA DESIGNS A POTENT WEAPON
NACS & EXPO EAST SHOW PREVIEWS
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Columns 4 First Drop Study Hard 6 Publishers Toast Knock it Off 24 Gerry’s Insights Innovation Sells, or is Selling Innovation
Departments 8 Bevscape Two Court Cases Show the Way 16 New Products Hydrive Relaunches, Minty Sambazon
Contents • Volume
11 • No. 6
28 The Experts Deal Review: Jan. 2012 – July 2013
62 NACS Show Including Schedule of Events and Beverage Exhibitor List
32 Energy Level Has 5-Hour Cooled Off? 52 Lemonade Stays Strong With Lemonade Brand News 58 Packaging Trends Torpedo! How Design and Taste Gave Sierra Nevada a New, Powerful Weapon
64 Natural Products Expo East Including Beverage Exhibitor List
On the Cover 40 Pressing Business The Cold Pressed Juice Uprising
September 10, 2013
20 Channel Check New Order for Beer 26 Brewbound Key Craft Offerings for Winter 66 Promo Parade Cheerwine and the Avett Brothers Return BevNET Magazine (ISSN 2165-6061, USPS 24-552) is published bi-monthly except monthly in March, June, September, and October by BevNET.com, Inc. 44 Pleasant Street, Suite 110, Watertown, MA 02472. Periodicals postage paid at Boston, MA and additional mailing offices. POSTMASTER: Please send address changes to BevNET Magazine, Subscriber Services, 44 Pleasant Street, Suite 110, Watertown, MA 02472
Cold-Pressed, and Hell-Bent for Success
HAS 5-HOUR ENERGY FINALLY COOLED OFF?
TORPEDO! SIERRA NEVADA DESIGNS A POTENT WEAPON
NACS & EXPO EAST SHOW PREVIEWS
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By Jeffrey Klineman
Study Hard At first, I thought the call was about Cocaine. After all, it was the heady year of 2006, before the housing bubble burst, the stock market crashed and the Great Recession set in. Times were good! And besides, it was a Congressional staffer on the line, asking about energy drinks. But no, even though the call coincided with the first recorded uproar about energy drink obnoxiousness (and yes, naming it Cocaine qualified), this young Washington politico hadn’t rung me up to find out about energy drinks to put together a briefing on outrageous marketing practices. He was looking for a recommendation. He wanted to find a good-tasting energy drink for him and the rest of the staffers to power them through budget season. I thought of that call recently, as I watched the Senate Committee on Commerce, Science & Transportation hearing on energy drink marketing to youth. I thought of it as I paged through the myriad studies that have been released lately on energy drinks, soda, caffeine, youth marketing, emergency rooms, and poison control. I thought of it as I watched Sens. Ed Markey (D-Mass.), Richard Blumenthal (D-Conn.) and Richard Durbin (D-Ill.) turn the ratchet on energy drink company representatives, their arguments made compelling, most likely, by the work product of young staffers fueled by the same products that were the subject of the hearing. I thought of it as I heard, once again, the disconnect in language between pediatricians, who say energy drinks are bad for kids, and energy drink companies, who say energy drinks aren’t made for kids, and saw, once again, that continuum of social responsibility that spans horse sense and scientific inquiry, personal choice and parental warning, regulatory overreach and good government. The most important point to be made during the energy drink hearings was made early on, and it’s one that everyone seemed to agree on: it’s just not that cool
4 BEVNET MAGAZINE SEPTEMBER 2013
to try to hook the youth of America on energy drinks before they’re old enough to drive. But observers could tell by the energy drink executives’ cowed nodding that when it comes to marketing practices, things like online photos of six-year-olds with Rockstar skateboards will soon become things of the past. In one sense, having trumped the much more established and nefarious tobacco companies back in the day, the Senators’ experience allowed them to instruct the more callow energy drink brands as to the limits of common sense. Clean your room, they said, before we use you to wipe the floor.
Still, I thought of the call again this morning, when I read three more studies, none of which were mentioned during the committee hearing. And I wondered if the histrionics were worth it. Here was one study: researchers asked the parents of 3,000 5-year-olds whether those children a) drank four or more sodas a day and b) if those children who drank four or more sodas per day – about 4 percent of them – were more likely than the others to behave aggressively, i.e. to break stuff or attack other people. Here was another: young mothers are, according to Nielsen, a surprisingly heavy group of users of energy drinks, often consuming one shortly before their kids return from school, to get through the afternoon. Here was the last: over a year-long period, Johns Hopkins researchers interviewed 105 patients in a Baltimore emergency room and determined that Budweiser, Steel Reserve, Colt .45, Bud Ice and Bud Light were the most popular beverages involved in emergency room visits. Analysis of the research revealed that, while the researchers had mostly begun their shifts at about 10 p.m. on Friday night, their interview subjects didn’t sober up enough for a quality review until about 4 a.m. My conclusion? We need to stay awake, and not just because we’re being inundated with poorly-written scientific studies. Just look at the number of Faygo-crazed children we’ve got to raise. Listen to the news: we’re about to hit the debt ceiling all over again, we’re about to go bomb Syria, we’ve killed the Voting Rights Act. There are shortages of general practitioners and ER doctors. There are a lot of things to study, and we’re going to need a lot of Rockstar, Starbucks, and whatever else you’ve got to get through them all. Because here’s the absolute last study we need: one about doctors’ visits by droopy-eyed Congressional staffers, complaining about a lack of energy and focus, looking for a pick-meup, any kind of pick-me-up at all, because there’s too much work to do.
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Knock it Off
Jeffrey Klineman EDITOR-IN-CHIEF email@example.com
Ray Latif MANAGING EDITOR
One of the most enjoyable parts of my work is that I get to visit with so many beverage marketers. They open up their offices, share their visions, and let me catch a glimpse of the drawing board. We talk to assess the trends, past and present successes and failures, and where to go next. Bringing out new brands and SKUs, and upgrading packaging efforts, make for key aspects for competing, envisioning the next great thing, and staying solvent. While on my sojourns, I always like to see what covers their desks and shelves. Aside from an array of their product lines, I’m always interested in what competitive brands are on their minds and around their offices. Nevertheless, one recent visit really took me aback. As we all know, Sparkling Ice has been one of the most prominent success stories over the last two years. This office had three bottles of the brand sitting there – or so I thought. On closer inspection, and with the disclosure of my host, I realized that two were direct knock-offs of that successful brand. I couldn’t see any difference until I perused the labels. The two other bottles were brands made to look like the real thing. One was being made by a retailer. Mind you, I have no issue with competitors trying to
6 BEVNET MAGAZINE SEPTEMBER 2013
capitalize on success by coming out with a comparable product. “Me-Toos,” while often a waste of effort, are part of the game. If Coke wants to come out with a new Fruit Water to compete in the arena, more power to them, and the same goes for all of the others jumping into the fray. But, there is a lack of integrity and honesty to come out with something so close to the look, in the identical packaging, that you can’t tell the difference. This was not an isolated incident. Over the years I have seen this far too often, smallminded companies trying to mimic their way to success. It is a capitalist world and there’s always room for many players in a category. But there are degrees that are acceptable, and crossing over the line to knock off a brand is not. And lest you think you’re able to keep things cute enough that you’ll be able to pull it off, remember – the courts can get ugly. Imitation is the finest form of flattery, or so the adage says. But not when you go too far. We are an industry of creativity, innovation and hard work. It saddens me when, too often, companies stake their entire reason for being on the efforts of others. There are so many ways to distinguish your brand. Knocking off the original look is dishonest. Create your own signature, don’t take someone else’s.
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The latest news on the brands you sell
Founders Moves All Day to All Year After 16 years, Founders Brewing has finally found its flagship offering. The Grand Rapids, Mich.-based brewing company introduced All Day IPA in March, then only as a seasonal product. But consumer demand and record sales quickly catapulted the 4.7 percent session ale to Founder’s largest volume brand, forcing the company to think about offering it year-round. “We are looking at this brand as a category leader in the session ale category,” said Mike Stevens, Founders Brewing cofounder and CEO. “Knowing that, we have decided to brew the beer year-round.” Through the end of June, Founders had sold over 130,000 case equivalents (CE’S) of All Day IPA since March 1. Sales of its next best-selling beer, the year-round Centennial IPA, have only barely eclipsed 102,000 CE’s. Although the brand currently comprises 25 percent of the company’s total volume, Stevens said he expects the number to grow and believes All Day IPA
8 BEVNET MAGAZINE SEPTEMBER 2013
Crafting Secondary Placements will account for nearly 40 percent of total production in 2014. So what’s driving the demand for All Day? Stevens credits a three year recipe development process and unmatched quality. “It is no secret that the IPA category has become a crowded space,” he said. “I think what you get with All Day IPA is a solid craft beer, that is reminiscent of a higher-ABV offering. And even though it’s called ‘All Day,’ the most important words on that label are ‘session ale.’” Stevens hopes that All Day IPA will serve what he feels is an underrepresented category within craft beer: lower alcohol session offerings. “It has a space within the craft industry,” he said. “It’s an underserved category and All Day isn’t taking away from what is really great about well-made craft beer.” But that doesn’t mean the beer isn’t cutting into sales of Centennial IPA, another one of Founders’ core offerings. “We have seen some cannibalization,” he said. “I would attribute some of that to the success of All Day but also to the crowded nature of the IPA category.” Nonetheless, the new brew has helped to keep Founders Brewing on pace for yet another year of 75-plus percent growth. Production volumes are up 51 percent in 2012, 58 percent of which is All Day IPA, Stevens said. The company will enter Florida, its 25th state, on August 19 and Stevens said he is also eyeing the Maryland, Delaware and Tennessee markets. “We’ve been talking to wholesalers in those markets already,” he said. “We are slowly identifying what we want to do there and which distributors we want to go with.” The company will introduce canned 12-packs of All Day IPA next month across its entire distribution footprint. Stevens said it’s the only Founders brand that will be packaged in aluminum for now. The company produced 71,000 barrels of beer in 2012 and is projecting that volumes will reach 135,000 barrels in 2013 and 200,000 barrels in 2014. Founders made just 12,000 barrels in 2008.
With the finite amount of retail space allocated to craft beer becoming more crowded, Dogfish Head founder Sam Calagione wanted to create a non-traditional opportunity for his brand to catch the attention of retailers and earn secondary placements beyond the beer aisle. For Calagione, this meant line-extending beyond the beer category altogether. So he turned to bratwursts. Besides that typical German beer hall fare, the company’s recently announced foray into food also includes clam chowder and pickles flavored with hops. The impetus, Calagione claims, came largely from the opportunity to build cross-category retail sets. “We began this process with our beer-wine hybrid racks, which are placed in wine sections and feature our winecentric beers like Noble Rot, Sixty-One and Midas Touch,” he said. “Now we are setting up cross-displays that feature brats, chowder cans, pickle jars and the Dogfish beers that best pair with each item.” Making your own branded bratwurst is kind of an extreme way to get real estate near the meat counter, but that doesn’t mean that other beer companies aren’t angling for the same address. And the retailers are eager for them to move in, as well. “High-end grocery and specialty outlets that are familiar with craft brands understand the value of trying to merchandise the beer category throughout a store,” said Tom Fox, a national category management expert and partner with CM Profit Group. Fox believes that additional points of purchase not only encourage consumer trial but also increases the likelihood of craft beer making it to the checkout line. “Anytime you can get a secondary point of purchase placement, there is a lot of data that suggests it will drive more velocity,” he said.
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Liquid Enhancers Advance
Mintel: People Like Coconuts
Coca-Cola Co., Inc. has extended its reach into the rapidly growing world of water enhancers with Powerade Zero Drops, a new line of zero-calorie liquid concentrates. Aimed at on-the-go sports drink consumers, the new products are infused with the same range of electrolytes as its flagship brand. “Convenience is key,” said Ilan Sobel, senior vice president, glacéau. “Between class, practice, errands and work, our lives are becoming busier and busier by the day. With Powerade Zero Drops, we’re providing athletes with even more options to help hydrate with sports drinks. Powerade Zero Drops come in three flavors and are packaged in 3 oz. squeezable containers, each with a suggested retail price of $3.99. Each package makes approximately 24 8 oz. servings. This is the second foray for Coke into liquid enhancers following its launch of Dasani Drops in September. The introduction of Powerade Zero Drops also comes a few months after Kraft’s launch of a new sports and fitness variety for its MiO brand called MiO Fit. With MiO products expected to reach a jawdropping $200 million in sales this year — an incredible figure for a two-year old brand — Kraft’s runaway success with MiO is undoubtedly fueling Coke’s emergence in the category. And it’s not just Coke that sees tremendous potential for the products. In an interview at BevNET Live Summer ’13, AriZona Beverages founder Don Vultaggio revealed that the company will be introducing a tea-infusing liquid enhancer later this year.
Over the past five years, a deluge of new products introductions has helped pushed coconut water from the outskirts of the beverage industry to one of fastest growing and visible categories on the market. According to Mintel, a leading global supplier of consumer, product and media intelligence, new coconut water products have grown by 540 percent since 2008 with most brands utilizing health claims associated with the liquid to propel product launches. Mintel found that North America and Europe led the way for new coconut water products launches in 2012, totaling 35 percent and 34 percent of global coconut water introductions, respectively. The natural and electrolyte-laden beverage has been particularly popular with natural foods consumers in the U.S. who often consume it as a sports drink. "Coconut water is doing particularly well in the U.S. because both sports recovery drinks and vitamin-enhanced waters are well-established—much more so than in other countries—meaning that people already buy into the benefits of electrolytes in a beverage,” said Jonny Forsyth, a global drinks analyst with Mintel. Additionally, coconut water has latched onto growing demand for low-fat and low-calorie beverages. Labeling claims promoting low fat/calorie aspects of coconut water accounted for 47 percent of all coconut water claims in 2012. Meanwhile, low/no/reduced allergen and gluten-free followed with 43 percent of all claims, environmentally-friendly packaging amounted to 42 percent and natural came to 40 percent.
WARHORSES Double Cola Doubles Down on New Product Lines Could anyone have guessed that in its 80th year of business, The Double Cola Company, a stalwart of classic Americana and traditional sodas, would venture into…coconut water? Perhaps not, but Double Cola, like many other CSD companies, is doing its best to adapt to wave after wave of consumers increasingly mindful of what they drink and the impact of sugary beverages on overall health and wellness. Knowing that it’s operating in the midst of a beverage landscape in transition — and with some gentle prodding from its distributor partners — Double Cola is making its first foray into New Age beverages with the introduction of a 100 percent, not from concentrate coconut water and a line of vitamin-infused teas. The company has also introduced 12 BEVNET MAGAZINE SEPTEMBER 2013
a new value-priced energy drink brand. The products are set to launch later this year and will key new distribution initiatives for the company, which is planning to expand into markets in the Northeastern and Western U.S. While Double Cola’s sphere of distribution has long centered in and around the South and Midwest, the regions closest to where its products are formulated, the company will begin distribution of its Min?ku Coconut Water, which is sourced from and co-packed in Thailand, along the East and West coasts. Double Cola vice president Gina McCommon said that the despite the dozens of coconut water brands currently on the market, the company sees “a lot of room left” in the category, particularly with lifestyle trends leaning toward health and wellness. And
believing that its distributors would inevitably begin to carry coconut water as part of their portfolios, McCommon noted that it’s “better if it comes from us” than another beverage company. Although Double Cola hopes that the new drinks will offer a measure of balance for its portfolio and preparedness for the changing times, McCommon said that the company will continue to place its focus and attention on the growth of its existing line of core brands, several of which, including its flagship cola and citrusflavored Ski, have been repackaged and rebranded over the past year. Along with the addition of several distributor partners, including a number of independent beer houses, the new look drinks helped spur 17 percent growth in overall revenue for the company in 2012.
LEGAL BREAKDOWN Analysis: Labeling and Lawsuits Breaks in a pair of cases unrelated to the beverage industry might offer a glimmer of hope for brands in several ongoing food and beverage court battles. But labeling remains a flashpoint for dozens of civil suits across the country, with attorneys continuing to parse labels for any potential ingredients or marketing statements that might allow some leverage against FDA guidelines. According to attorneys for Shook, Hardy & Bacon – the same firm helping to defend the Coca-Cola Co. Inc. and Vitaminwater in a class-action suit over false advertising and marketing claims on Vitaminwater labels – a federal court in California dismissed several claims that Chobani yogurt had mislabeled its products as all-natural and that another company, Wholesoy & Co., had misled consumers over its use of “organic evaporated cane juice” as an ingredient because the Food and Drug Administration itself had not set a “’legally enforceable’ standard” over the use of that ingredient.
the suit to go forward only for declaratory and injunctive relief. That ruling put Coke, which famously bought Vitaminwater for more than $4 billion in 2007, in something of a bind. While the loss of potential damage penalties puts a low ceiling on the financial gain for the certified class during a trial — and often leads to a quick settlement — in this case it likely won’t be enough to satisfy the co-counsel on the case, the Center for Science in the Public Interest (CSPI), which has doggedly pursued Vitaminwater for years over what it claims is a highly misleading marketing scheme. Indeed, the ultimate win for the CSPI in the case – the possibility that Coke could even be forced to change the name “Vitaminwater” – remains a possibility. U.S. District Court Judge John Gleeson left that door open when he allowed the case to go forward in 2010 over the objections of Coke. At the time, Gleeson wrote that the names of the drinks and other label statements “have the potential to re-
antioxidants. Both of those cases were taking place in the U.S. District Court in the Central District of California, although they were consolidated class actions similar to the Vitaminwater case. Coke put its best face forward following the magistrate’s ruling, saying it was pleased the recommendation had gone against damage awards and that it was confident the rest of the case would eventually be dismissed. Prochnow told BevNET that “whenever you get a ruling from a judge that says there’s no damages involved, that’s a pretty good case for the defendant. Sure, there might be some amount from attorney’s fees, but if you already know they’re not going to get damages from it, that’s a pretty big win in the case.” But, he added, having the potential for the loss of the Vitaminwater name as potential for injunctive relief remains a high-value wild card in the case. CSPI language on Vitaminwater has been strong: the company has called the
Evaporated cane juice is a popular beverage ingredient and has been cited during the high-profile Vitaminwater suit as one of the ways in which the beverage maker allegedly misled consumers into believing the product was healthy. The yogurt rulings came during a mixed week of results for the plaintiffs in the Vitaminwater suit itself. While a magistrate judge in the U.S. District Court for the Eastern District of New York certified the suit as a class action, he also ruled out financial damages for that class, allowing
inforce a consumer’s mistaken belief that the product is comprised of only vitamins and water,” regardless of what is listed on the ingredient panel. Even tougher for Coke was the recent news that big beverage companies capitulated in a pair of similar cases. PepsiCo agreed to settle a class action for $9 million and take the words “all-natural” off its label, and Dr Pepper Snapple Group agreed to a settlement that it no longer fortify 7Up with vitamins – or use label claims that some of its 7Up flavors have
product a “junk food” and referred to it as a non-carbonated soda. Both are product types that are not allowed to be fortified with vitamins under FDA policy, according to the CSPI. “The marketing of Vitaminwater will go down in history as one of the boldest and brashest attempts ever to affix a healthy halo to what is essentially a junk food, a non-carbonated soda,” said CSPI executive director Michael F. Jacobson in a release that followed the ruling. “Vitaminwater, like Coca-Cola
14 BEVNET MAGAZINE SEPTEMBER 2013
itself, promotes weight gain, obesity, diabetes, heart disease, and cannot deliver on any of the dishonest claims it has made over the years.” The beverage suits, which have hinged largely on the involvement of CSPI as a co-counsel, stand in some respects as a contrast to many food and beverage cases – and indicate a pattern that is starting to get some notice in legal circles. Free enterprise advocate Glenn Lammi, the chief counsel of the right-leaning Washington Legal Foundation, blamed a consortium of lawyers targeting the U.S. District Court in the Northern District of California – where both the Chobani and Wholesoy cases are being litigated — for a series of cases exploiting consumer protection laws. According to Lammi, the consortium has targeted that district as the base of its lawsuits because it is the
most friendly venue for class-action suits related to consumer protection laws and labeling regulations covered by the FDA. According to Lammi, these kinds of suits – which often deal with the issue of whether products are labeled as “all-natural” or healthy – are “an appealing, Erin Brockovich-like conception of litigation, but is quite far from reality with regards to why scores of class action lawsuits are pending” against many food companies. Lammi cited reporting that indicated a pair of plaintiffs’ attorneys who have made money suing tobacco companies and commercial airlines worked with a former FDA advisors (some of which have worked, it has been argued, on behalf of the food companies themselves) to help them file suits against the food companies. Of late, Chobani has taken to the offensive, winning its partial dismissal and
also pointing out that the plaintiffs in its case are represented by a set of attorneys it calls the “Barrett/Pratt Group” who are also suing more than 30 other companies in the same federal jurisdiction, over very similar branding claims. Beverage and beverage-related companies in the group of claims include Odwalla, Hain Celestial, Nestle, Welch’s, Ocean Spray, Sunsweet, and others. The attorneys in the cases justify their claims on the basis of public health – and that breaches of FDA regulation may be the best way to get at the companies and threaten them with being put on the stand. As the cases proceed on opposite sides of the country, chances are the CPG firms, the “Consortium,” and the CSPI will be watching each other closely, looking for any tool they can use in the fight.
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CSDs Bruce Cost Ginger Ale has introduced a new can package for its original ginger ale. The company’s unfiltered ginger ale, which is made with fresh ginger and pure cane sugar, is now available in 12 oz. aluminum cans. The products are distributed nationwide and have a suggested retail price of $1.99 for a single can and $6.99 for a 4-pack. For more information, please call Bruce Cost at (212) 488-0661. Limonitz is new line of organic sparkling lemonades that come in three flavors: Mint, Strawberry and Ginger. The products are made from natural and organic ingredients and contain no artificial coloring or preservatives. Limonitz is pasteurized and moderately carbonated and retains the natural color and freshness of its fruit juice. Packaged in 12 oz. clear glass bottles with clear labels and a silver crown cap, the beverages are certified kosher by the Orthodox Union. The products are also USDA Organic certified. Limonitz has a suggested retail price of $1.99 and is distributed at select supermarket & specialty stores. For more information, please call Real Soda at (310) 327-1700.
Energy Drinks Big Red has relaunched Hydrive Energy. Now marketed as an “energy water,” the non-carbonated drinks are formulated with caffeine, vitamins and nutrients and packaged in slim 15.5 oz. PET bottles with each containing 30 calories per bottle. Hydrive also features a new logo and label and has a suggested retail price of $1.49. The products are distributed nationwide at Wal-Mart and select grocery and convenience stores. For more information, please call Big Red at (512) 501-3890.
Coconut Water Zola Fruits of the World has launched Coconut Water with Espresso, the newest extension to its line of all natural coconut water. The products contains 75 calories per serving, and has more potassium than one whole banana and as much caffeine as a 2 oz. shot of espresso, according to the company. Zola Coconut Water with Espresso is currently distribut16 BEVNET MAGAZINE SEPTEMBER 2013
The newest options for cooler and shelf
ed at Amazon.com, Dominicks, Gelsons, Safeway and Von’s nationwide. The beverage has a suggested retail price of $2.49 for a 17.5 oz. can. For more information, please call Zola at (415) 775-6355.
Juice LO Fruit Beverage is a low-calorie, lowsugar, and low-glycemic beverage that is made with premium fruit juices and naturally sweetened with organic blue agave nectar and a pinch of stevia. The beverage is certified low GI as clinically test by Glycemic Index Laboratories. One 10 oz. serving of the product mimics the amount of calories (35 – 45), carbohydrates (8 – 11 grams), and sugars (7 – 10 grams) found in one whole piece of fruit. LO Fruit Beverage comes in four all-natural varieties: Pomegranate, Pomegranate Mojito, Acai-Blue, and Mango Mojito. The products are sold on Amazon.com and have a suggested retail price of $11.99 for a 4-pack. For more information, please call LGJ, LLC at (877) 244-6711.
Functional Beverages GoodBelly has launched new gluten-free varieties to its line of probiotic drinks. Certified gluten-free by NSF International and non-GMO verified, the drinks come in four varieties – Tropical Orange, Pink Grapefruit, Coconut Water and Carrot Ginger – and contain no barley. The products are packaged in 32 oz. cartons which use a green cap to differentiate the drinks from other GoodBelly varieties. The beverages are distributed nationally and have a suggested retail price of $3.99. For more information, please call GoodBelly at (303) 443-3631. Sambazon will introduce a new Energy Peppermint Mocha variety to its fresh smoothie lineup. The product is a blend of Fair Trade açaí, chocolate soymilk, peppermint, shade-grown coffee and sustainably-harvested yerba mate. The beverage is USDA certified organic, Non-GMO Project verified, vegan and gluten-free. The smoothie will be available October through December at select natural health food stores and grocers nationwide, including Whole Foods. Packaged in 10.5 oz. bottles, Energy Peppermint Mocha
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has a suggested retail price of $2.99. For more information, please call Sambazon at (877) 726-2296. Kill Cliff has launched a new Double Awesomeness variety to its line of recovery drinks. The new variety is formulated with a proprietary mix of natural, glutenfree, recovery-supporting ingredients including enzymes, green tea extract, ginger root, and milk thistle among other functional ingredients. It is naturally sweetened, and contains 15 calories and 25mg of caffeine. Packaged in 12 oz. cans, the products have a suggested retail price of $3. The drinks are distributed GNC stores nationwide and select grocery and convenience stores in the Southeast as well as online at KillCliff.com. For more information, please call Kill Cliff at (307) 200-6001.
Tea Ayala’s Herbal Water has launched a new line of zero-calorie, organic herbal teas. Ayala’s Herbal Tea comes in four flavors: Chamomile Bergamot Vanilla, Peppermint Melissa Spearmint, Nutmeg Cacao nibs Cardamom and Rooibos Cinnamon Rose petal. The teas are USDA Certified Organic, certified kosher and packaged in 14 oz. glass bottles. The products are available exclusively at Wegmans and The Fresh Market through November and have a suggested retail price of $1.69 – $1.99. For more information, please call Ayala’s at (610) 668-4000.
Powders Pür Pak, an all-natural line of active dietary supplements, has launched three new carbonated flavors: Tangy Berry, Citrus and Super Green. When mixed with water, Pür Pak, which contains 15 calories and 2 grams of sugar per serving, is designed to offer consumers a unique and complete combination of vitamins, minerals, antioxidants, electrolytes and powerful supplements, according to the company. The all-natural ingredients in Pür Pak are combined with sodium bicarbonate to give Pür Pak its light, sparkling, effervescent fizz. The products are available in .5 oz. packets and a 28-day supply has a retail price of $49. For more information, please call Konnect Public Relations (213) 988-8344. 18 BEVNET MAGAZINE SEPTEMBER 2013
Beer Grand Canyon Brewing Company has released its Pumpkin Springs Porter. The ale is brewed with pumpkin, squash, sweet potatoes and spices. The beer contains 5.8 percent ABV and is packaged in 22 oz. bottles. Available in select Whole Foods and BevMo locations, the product retails for $5.99-$8.99 depending on location. For more information, please call Grand Canyon at (928) 635-2168.
Vodka Exclusiv Vodka has just launched its Exclusiv Cherry Vodka. The spirit has a smooth texture and the aroma of ripe cherries with overtones of almond in the finish, according to the company. The product contains 35 percent alcohol by volume and has a suggested retail price of $10 per 750 mL glass bottle. The vodka is distributed in select states in the Northeast and Southeast. For more information please call Serge Imports LLC at (908) 705-2733.
Whiskey Wild Turkey Forgiven is the first nationally-available, 91 proof, small-batch bourbon and rye whiskey. The spirit is comprised of 78 percent 6-year-old bourbon and 22 percent 4-year-old rye. The whiskey features tasting notes of creamy vanilla and oak, and a peppery, cinnamon finish, according to the company. Wild Turkey Forgiven will be available in limited quantities nationwide in late summer 2013 with a 750 mL bottle for a suggested retail price of$49.99. For more information, please call Wild Turkey at (502) 839-4544. Johnnie Walker has launched Johnnie Walker Platinum Label blended Scotch whisky in the U.S. Inspired by a Walker family custom to craft exclusive Scotch whisky blends for private gatherings that were never sold, Platinum Label is the an 18-year-old blended Scotch whisky, crafted from single malt and grain whiskies, each matured for a minimum of eighteen years. The result is a complex, delicate, smoky blend that features deep layers of flavor. Johnnie Walker Platinum Label will be available nationwide this August
with a suggested retail price of $110. For more information, please call Diageo at (646) 223-2305.
Other Spirits Crafthouse Cocktails is a new brand of ready-to-serve premium bottled cocktails. Crafthouse launched with two varieties: Moscow Mule and Southside. Moscow Mule is made with small batch vodka, ginger beer, pure lime juice and real cane sugar. Southside is blended with small batch winter wheat gin, natural mint, pure lime and real cane sugar. The company will introduce additional crafted cocktails in the following months. The products, which are packaged in 750 mL swingtop glass bottles, are available for sale on Binnys.com for a suggested retail price of $19.99 per bottle. For more information, please call Crafthouse at (773) 251-2250. Slim Lizzy’s Cocktails is the first strategically positioned brand from Social Blends. The product, which has 45 calories per 4.5 oz. serving, was created
A Premium Brewed All Natural Iced Tea
to serve female consumers. The cocktails are available in three flavors: Margarita, Strawberry Daiquiri and Cosmopolitan. Retail packaging options include a resealable and freezable single-serve 9 oz. pouch and also a 750 mL glass bottle. The pouch has a suggested retail price of $1.99, and the bottle retails for $9.99. For more information, please call Slim Lizzy’s at (630) 323-2666.
Flavored Malt Beverages Phusion Projects has launched Loko Rita, a new line of flavored malt beverages that come in Margarita and Peach Margarita flavors. The drinks are made with natural flavors and real fruit juice and contain 8 percent ABV. Loko Rita is packaged in 16 oz. sensory-optimized cans with texturized traditional artwork. The products are being test marketed in Tampa-St. Petersburg, Fla., Raleigh-Durham, N.C., Richmond, Va., and Las Vegas. The products have a suggested retail price of $1.79 to $1.99. For more information, please call Phusion at (888) 402-5247.
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SEPTEMBER 2013 BEVNET MAGAZINE 19
What’s hot – and what’s not – in stores now
BEER COMPANY SALES 52 Weeks through 7/14/2013 SOURCE: Symphony/IRI Total food/drug/c-store/mass.
NEW ORDER IRI gives us an interesting snapshot of the overall state of beer retailing this month, showing how craft and imports have re-ordered the established brand hierarchy in the U.S. While AB and MillerCoors are entrenched, the remaining 25 percent is largely divided between two large craft brewers and a pile of independent brands – many of which passed the $100 million mark in sales in the past decade. Yuengling’s growth seems to have tempered a bit, but Boston Beer, Sierra Nevada and New Belgium continue to surge, and the percent change in sales really shows where the heat is for beer. As for the growth a Vermont Hard Cider – which shows the popularity of cider as a class, that’s also rolled into SAM and, to a lesser extent, MillerCoors sales as well.
Heineken USA Inc
Boston Beer Co
Pabst Brewing Co
Diageo Guinness USA
Mark Anthony Brands Inc
North American Breweries
D.G. Yuengling & Son Inc
Sierra Nevada Brewing Co
Phusion Projects Inc
New Belgium Brewing Company
Craft Brewers Alliance
Vermont Hard Cider Company
The Lagunitas Brewing Company
Stone Brewing Co
TOPLINE CATEGORY VOLUME 52 WEEKS THROUGH 7/14/2013
20 BEVNET MAGAZINE SEPTEMBER 2013
Change vs. year earlier
SOURCE: Symphony/IRI Total food/drug/c-store/mass.
HOT! Lipton Pureleaf Dollar Sales
Lipton Brisk Tea
AriZona Arnold Palmer
SOURCE: Symphony/IRI Total food/drug/c-store/mass. 52 Weeks through 7/14/13
NOT! Lipton Brisk Tea
HOT! Starbucks Dollar Sales
Change vs. year earlier
Starbucks Doubleshot Light
SOURCE: Symphony/IRI Total food/drug/c-store/mass. 52 Weeks through 7/14/13
NOT! Illy Issimo
Change vs. year earlier
Gatorade G2 Perform
Powerade Zero Ion4
Gatorade Cool Blue
SOURCE: Symphony/IRI Total food/drug/c-store/mass. 52 Weeks through 7/14/13
22 BEVNET MAGAZINE SEPTEMBER 2013
Change vs. year earlier
NOT! Gatorade Frost
ENERGY DRINKS Brand
HOT! Red Bull Total Zero Dollar Sales
Change vs. year earlier
Monster Mega Energy
Red Bull Total Zero
Rockstar Sugar Free
SOURCE: Symphony/IRI Total food/drug/c-store/mass. 52 Weeks through 7/14/13
BOTTLED WATER Brand
NOT! Amp Energy
HOT! Glaceau Smart Water Dollar Sales
Change vs. year earlier
Nestle Pure Life
Glaceau Vitamin Water
Glaceau Smart Water
Glaceau Vitamin Water Zero
SOURCE: Symphony/IRI Total food/drug/c-store/mass. 52 Weeks through 7/14/13
NOT! Glaceau Vitamin Water
HOT! Sparkling ICE
SOURCE: Symphony/IRI Total food/drug/c-store/mass. 52 Weeks through 7/14/13
COLD FILL ENERGY SHOTS FROM 1.5 OZ TO 10 OZ CARBONATED ENERGY DRINKS IN 8.4 OZ CANS FLAVORED/FORTIFIED WATER ENHANCERS CAPSULES TABLETS AND POWDERS ENERGY MINTS
Change vs. year earlier
NOW MANUFACTURING & CO-PACKING WATER ENHANCERS AND ENERGY MINTS
NOT! Poland Spring
SEPTEMBER 2013 BEVNET MAGAZINE 23
By Gerry Khermouch
Does Innovation Sell, or is Selling Innovation Here in the beverage innovation space we talk a lot about, well, innovation. But it’s a slippery concept, subject to qualification in all kinds of ways. There’s close-in innovation – line extensions and the like – and there’s breakthrough innovation. (The big beverage companies do the close-in stuff well enough, the reasoning goes, but struggle with the breakthrough stuff.) There’s product innovation, packaging innovation, marketing innovation. What’s innovative in a new item often seems not to be recognizable even to retailers and its own distributors until the brand is well advanced. But in a kind of circular logic, the concept of innovation seems to expand to accommodate any product that ever attains any kind of breakout success, at least at the premium end. Most often, it seems, we associate innovation with some daring new ingredient or some startling new functional claim that will jolt consumers out of their buying habits and, as important, get them to pay a premium price. Partly, I think, that’s just because such products are easier to get one’s hands around. They have more of a man-bites-dog kind of newsiness. Yet some of the most highly touted “innovations” of recent years – the cap-dispensed Activate, the massively fortified Body Armor – so far have failed to reach ignition, though it’s still early days. Rather, many of the more successful brands of recent years seem to defy common notions of what’s innovative. We’ve had Vita Coco Coconut Water, which represents more a mainstreaming and repositioning of an ethnic staple, than any kind of pure invention. (In that sense, the marketing has been the innovation.) Even Marley’s Mellow Mood, which had a flamboyant run its first two years, can be seen less as an example of functional innovation (helping to inaugurate the relaxation category) than as a branding play based on a reggae icon whose legacy seems to resonate across generations, putting it more in the marketing innovation camp. (Complicating the analysis,
24 BEVNET MAGAZINE SEPTEMBER 2013
that brand’s flattening over the past year coincided with its reformulation away from melatonin, supporting the notion that it did represent a degree of ingredient innovation. But not everyone is convinced that’s been a decisive factor. Stay tuned.) If you look at some of the brands that have been igniting lately, they’re bold in taste, approachable in price, require little consciousness-raising to understand and – psst! – contain precisely the ingredients that consumers tell pollsters they’re trying to stay away from these days. Calypso Lemonade, for example, contains gobs of sugar, but resonates enough in some ways to have transcended the traditionally heavy seasonality of the category. Which brings us to that phenomenon called Sparkling Ice. It’s taken the market by storm, exploding in sales and prompting responses from Coca-Cola and PepsiCo that bear earmarks of being panicked rush jobs. The brand, as you know because you’re likely drinking it yourself, is a zerocalorie, sucralose-sweetened, bright-tasting “water,” often priced at a very approachable $1. It contains only token nutritional fortification, and its conventional twist-cap plastic bottle makes no claim of being a new “delivery system.” It has artificial colors and preservatives that supposedly are no-no’s to lots of consumers these days. Its marketing so far hasn’t seemed very special. So where, then, is the innovation? Maybe the innovation is in simply offering a different take on a classic established category – in this case, diet CSDs. The different form factor and the fruit flavors (even though there’s no fruit in Ice, not even in its new lemonade extensions) and the positioning as “the bold side of water” seem to be convincing consumers it’s a healthier alternative to items like Diet Coke or Pepsi Max. Given the ominous softening diet CSDs have suffered lately, that would explain why Coke and Pepsi have moved into emergency-response mode, with Fruitwater and a restaged Aquafina Splash, respectively. If there’s something familiar sounding about that theory, it may be because you
can make a good case that another vibrant new category – energy drinks – similarly represents a redefining of a major incumbent segment. The drinks’ taurine and ginseng and guarana merely serve to disguise that they’re sodas in differentsized cans from regular caffeinated CSDs, backed by a new genre of marketing that eschews paid media in favor of building relationships with cutting-edge young athletes and musicians. Indeed, under regulatory pressure lately, the energy drink marketers themselves have essentially been arguing, “Hey, we’re just soda!” So what are the lessons here? Most of all, I suppose, not to overlook simple new twists on conventional beverage genres. A few years ago in this column I coined the phrase “functional fatigue” to suggest that many beleaguered consumers, in the wake of the financial crisis, had moved on to addressing more fundamental issues in their lives than figuring out the function of ingredients in expensive, highly engineered products. The success of items like Sparkling Ice and Calypso suggest there’s a lot to be said by offering down-the-middle products that most anyone can afford. The same dynamic may play out in other segments. After countless entrepreneurs have foundered in efforts to offer “better” kids drinks, one of the few that’s shown any kind of staying power has been Wat-aah – unsweetened, unflavored, colorless spring water with the merest token of nutritional reinforcement. The only thing special about it seems to be the flamboyant branding that doesn’t pander to adult notions of what kids want. Though its CEO likes to mock-apologize for failing to offer any innovation, once again, the innovation may be simply in the branding. Hey, winning in beverages is always going to be something of a crapshoot, but maybe we’re overthinking what “innovation” means. Longtime beverage-watcher Gerry Khermouch is executive editor of Beverage Business Insights, a twice-weekly e-newsletter covering the nonalcoholic beverage sector.
FRESH in the
CAP until you
0 CALORIES 路 100% NATURAL TWIST. RELEASE. HYDRATE.
Covering the business of craft
Key Craft Offerings Since many wholesalers and retailers have already received their fall shipments of pumpkin beer, BevNET Magazine decided to skip the gourds and go straight to the wintertime releases. Call it seasonal creep or planning ahead, this carefully curated list of higher octane craft brews is sure to provide plenty of good cheer this holiday season.
DECEMBER 5 Paradise Point Resort & Hotel San Diego, CA For More Information and Registration Visit: www.brewbound.com/events
ABOUT THE CRAFT BEER SESSION The Brewbound Craft Beer Session is a business conference addressing the topics that most directly impact the decisions craft brewers are faced with as they look to grow their brands. The event focuses on the business side of craft, offering brewers a unique opportunity to learn from and network with industry experts.
26 BEVNET MAGAZINE SEPTEMBER 2013
Brewery Ommegang’s latest release in the “Brewmaster’s Obsession Series” is Wild At Heart, an 8-percent ABV American Wild Ale that incorporates a wild brettanomyces yeast strain during primary fermentation. The brettanomyces yeast provides robust fruit flavors and aromas and blends perfectly with Motueka and Topaz hops. A touch of tartness, balanced with a gentle malt sweetness and subtle hop bitterness makes Wild At Heart the perfect specialty release to share. It is packaged in 750 mL cork & cage bottles and will be available for a suggested retail price of $13.00 across most of Ommegang’s nationwide footprint, beginning in November. Dogfish Head is preparing to release its latest in a string of musically-inspired brews, a 9-percent, Grateful Dead themed imperial pale ale crafted in collaboration with thousands of Dogfish-loving Deadheads. American Beauty is brewed with American barley, granola and a heaping pile of hops and will be packaged in 750 mL bottles. Upwards of 2,000 barrels of the limited-edition brew will hit most of Dogfish Head’s 27 state-distribution footprint in October for a suggested retail price of $12.75. Coronado Brewing Company will release its annual winter seasonal, Stupid Stout, in mid-October. At 9 percent ABV and 42 IBU’s, this American imperial stout packs a serious punch. Robust notes of chocolate, roasted and caramel malts, and a hint of fresh West Coast hops makes Stupid Stout the perfect winter warmer. It will be available across its 13-state distribution footprint (CT, NY, OH, PA, NC, SC, FL, AZ, NM, CA, OR, WA, HI) for a suggested retail price of $7.99 per 22 oz. bottle. No-Li Brewhouse has won a number of awards for its flagship beers but one of its finer offerings is a deep, ruby red colored winter warmer. Released in small quantities, No-Li Winter Warmer has a thick, creamy white head and sweet aromas that contrast nicely with a blend of citrusy hops. Sweeter, candy-like flavors on the front palate transition into more distinctive, nutty malt flavors on the finish. At 7.5 percent ABV and 35 IBU’s, NoLi Winter Warmer is both smooth and drinkable. Distribution of draft and 22 oz. bottles will be limited to select cities in AK, WA, ID, OR, CO, MD, DE, NC as well as Washington D.C.. This brew will be available beginning in November for a suggested retail price of $6.99 per 22 oz. bottle.
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BEVERAGE DEAL REVIEW:
JAN. 2012 THROUGH JULY 2013 By Michael Burgmaier
The stock market has hit all-time highs, private equity has over $320 billion of capital looking for a home, Coca-Cola and PepsiCo have more than $27 billion of cash on their combined balance sheets, carbonated soft drinks continue their seemingly perpetual, long-term decline and the robust move towards healthier and functional beverages continues. What does that mean for the beverage capital markets? Good things. This article highlights some notable investments in and acquisitions of beverage companies in the United States since January 2012. Many deals have occurred. Our consumer investment banking team at Silverwood Partners has directly participated in eight different beverage transactions since January 2012 – not all of which have been or may ever be made public. In the past I have written articles for BevNET on topics such as strategic acquirers and innovation, the company characteristics that venture capital and private equity funds look for in an investment opportunity, and the numbers and metrics that matter most for investors and acquirers. When we looked at the notable deals from 2012 and so far in 2013, we believe those earlier observations hold. Investors and buyers look for brands that can be very large “permission to extend,” are on trend and are highly innovative. They want leaders. When they get into the numbers, growth in same-store-sales matters: when a company promotes, sales will lift, but the new post-promotion baseline sales levels had better exceed pre-promotion levels. And making money matters… if you’re not there now, then you need a believable path towards profitability: the higher the gross margin, the better. How else can you afford the marketing needed to become that billion dollar brand? 28 BEVNET MAGAZINE SEPTEMBER 2013
© 2013 The Rising Beverage Company, LLC
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In addition, some themes within the deals clearly stand out. Although we cannot print many of the deal specifics we know for many of the transactions noted in this article, there are clearly deals that are winners and losers. For example, mix-1 did not turn out the way Hershey would have liked. PDK Energy’s SEC filings detail a price paid to Hershey of $120,000 in cash and 2.5 million of non-trading company shares for the brand. This multiple will likely not appear in many business plans as an example justifying pre-money valuations of 3-5X sales. On the other end of the spectrum, some deals have outstanding multiples – almost always well-earned. On the investment side, the themes of healthy beverage growth, the importance of science and functionality (KeVita and NextFoods - probiotics; Neuro, Bai, FRS), low-cal (Bai, Balance, Hint), coconut water (Maverick Brands, Coco Café) stand out. The near-ubiquity of Emil Capital Partners (four deals) as a new, active investor in the beverage space must be acknowledged. Angel investors still matter as well and will continue to do so for quite some time. For beverage companies with less than $5 million in sales, angels are often the only capital available. Meanwhile, acquisition theme highlights include healthy juice (Bolthouse/Campbell’s; BluePrint/Hain; Innocent/Coca-Cola; Evolution Fresh/Starbucks), the rise of tea (Teavana/Starbucks; Tea Forte/Sara Lee) and artisan/gluten-free (Vermont Hard Cider).
The joke on investors is true – they always enter the room walking backwards with their eyes on the exit. They have to. Without eventual liquidity, why would they invest? At Silverwood, we see hundreds of potential beverage investment and M&A client opportunities a year – and just like the process that investors and strategics go through, the vast majority of these companies fail to pass our filter: too small, too limiting or niche a brand, poor margins, lack of enough same-store-sales growth, excessive capital burn, competing in an overly-crowded category or competing in one where strong exit opportunities are rare. The novel opportunities and break-out brands with long-term staying power are, rightfully so, few and far between. But they are there. Look for some more interesting deals to be completed in the second half of 2013 and the first half of 2014. Not all of these will likely be announced and known – but several are in process
30 BEVNET MAGAZINE SEPTEMBER 2013
SELECT BEVERAGE FINANCINGS SINCE JAN. 1, 2012 COMPANY
Strand Equity Partners
Maveron; Emil Capital Partners
Emil Capital Partners
Emil Capital Partners
TSG Consmer Partners
Emil Capital Partners
Source: Silverwood Partners, SEC filings, CapitalIQ.
SELECT BEVERAGE ACQUISITIONS SINCE JAN. 1, 2012 COMPANY
White Rock Products
Big Red, Inc.
Vermont Hard Cider
Healthy Brands Collective
Thomas Kemper Soda
Big Red, Inc.
Source: Silverwood Partners, SEC filings, CapitalIQ. already, and those that have that “special something” will find the capital and liquidity events they deserve. After Annie’s successful IPO last year, also look for an increasing trend towards IPO as a viable exit option for independent beverage brands with scale and sustainable growth potential. More exit opportunities equates to more investment opportunities. Stay tuned… Michael Burgmaier is a Managing Director at Silverwood Partners.
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Certainly, the market presence for Living Essentials’ 5-Hour Energy has proven unassailable in its category: the brand has withstood challenges from every major energy drink company to become the third-leading energy beverage maker by volume, ahead of even Rockstar when sales numbers are compared. Red Bull scuttled its energy shot soon after trying to take on Manoj Bhargava’s 2 oz. silver bullet. Monster Energy tried Hit Man – which missed – and Worx, which hasn’t. The latest direct shot across the bow is from Street King, a brand that has sworn to spend upwards of $70 million in promotion to try to chase down some share growth. The marketing torrent has the brand on an upward trend, but it’s a small one.
32 BEVNET MAGAZINE SEPTEMBER 2013
Through it all, however, the sales of 5-Hour have roared upward, through innovative marketing, an ever-expanding pipeline of retail channels (golf shops, airplanes, hotels). The brand stands at more than $1 billion in sales. That, however, is pretty much where it’s been mired for the better part of the year. In fact, since last October, the brand has largely stagnated, hitting a ceiling of about $1.19 billion, and inching back and forth. Now, that’s not a bad business… just ask Street King, or any other of the aspiring brands trailing in the category. But that huge surge of upward momentum – the found sales – that have powered the brand’s five year ascension seems to have tailed off. So what could be sapping 5-Hour Energy’s energy? In celebration of each hour, we’ve looked at five possible reasons.
Brand 5 Hour Energy
36 BEVNET MAGAZINE SEPTEMBER 2013
Change vs. year earlier -6.63%
Stacker 2 Xtra
Stacker 2 6 Hour Power
Rip It Energy Fuel
VPX Redline Power Rush
Spike Double Shot
Vital 4U Screamin Energy
Fuel In A Bottle
Nitro 2 Go
Vital 4U Liquid Energy
1. Bad Publicity: While Living Essentials dodged a bullet when it wasn’t among the energy drink companies called before a Senate committee hearing on marketing to children, 5-Hour has been regularly lumped in with Red Bull, Monster and Rockstar when it comes to many of the other reports that have created public concerns about energy products overall. The adverse event reports submitted to the FDA that have become public concerns for Red Bull, Monster and Rockstar are also dogging 5-Hour, and the company has been dragged into the public eye in other cases, particularly a New York attorney general investigation on potentially inaccurate labels and marketing. In one metric, 5-Hour’s brand buzz score as measured by YouGov has remained fairly consistent, although it took a brief hit in October along with other energy drinks. One thing that has helped 5-Hour avoid the harshest part of the spotlight is that it has been relentless in its pursuit of older consumers, rather than the 18-35 year-olds that energy drink companies claim are their main drinkers. Certainly, one doesn’t hear Monster advertising on NPR or Red Bull taking out ads in AARP publications, as 5-Hour does. Even early 5-Hour television advertising tried to draw a line between the energy drink chugging skater dude and the professional 5-Hour energy consumer.
SOURCE: Symphony/IRI Total food/drug/c-store/mass. 52 Weeks through 7/14/13
“The energy drink guys do target kids, we don’t,” Bhargava told CBS News’ Jon LaPook during an interview last year. “If you hold up a 5-Hour Energy, you’re not cool, you’re functional.” 2. Energy Fatigue: 5-Hour isn’t the only brand slowing; in fact, the others are as well, with both Red Bull and Monster seeing their growth rates tamped down and Rockstar lagging the category. Rockstar executives have
made it clear they believe that growth for its competition has come from promotional pricing, and Monster’s revenue numbers confirmed that during a recent quarterly earnings call. As a privately held company, 5-Hour obviously doesn’t have to reveal its numbers – but the company also doesn’t really sell on promotion, either. By dealing largely through a network of direct-ship and individual distributors, it’s not subject to a lot of the same problems that its
competitors face, but it also has trouble juicing sales through discount periods. Being able to maintain selling levels without obvious price incentives is indicative of a category that’s not going away, but is it promoting inertia as well? 3. Innovation has created competition… from outside the category: Bhargava has made it a point of pride that he innovated in the category on packaging, taking an 8 or 16 oz. product and turning it into a 2 oz. shot, something that he imagined couldn’t be matched by the bigger companies. But guess what? It turns out that what had been an unassailable lead is actually a head start. Kraft’s MiO is even smaller, and it’s also throwing out energy in squeezable, customizable, cheaper-per-portion doses from a company that isn’t suffering from the same rocky public perception plaguing 5-Hour. It’s no coincidence that as 5-Hour has slowed, MiO has grown; in fact, at $55 million for its caffeinated variety alone, MiO is already three times as big as 5-Hour’s nearest shot competitor, and growing
fast. And it isn’t hurting that MiO is also popular with women, who have been a key contributor to 5-Hour’s growth. 4. Coffee has staged a comeback: Iced coffee sales are trending upward both in to-go and rtd formats, and that could mean that cold brews are soaking up some of Living Essentials’ share of stomach. There’s an irony here, as high-caffeine products like 5-Hour may have made consumers more comfortable with the higher caffeine content in iced coffees. 5. Zeroes Across the board: One of 5-Hour’s chief advantages over competing energy products – and one that made it appealing to the older set – has been its low calorie formulation. But much of the recent growth for the big energy drink companies has come from zero-calorie SKUs, which may be keeping an aging cohort of consumers in the category. Indeed, the three most successful line extensions to hit the category are Monster Rehab, Monster Absolute Zero and Red Bull Total Zero, with Rockstar’s
own “zero” introduction just around the corner. That’s about $650 million in sales that weren’t there in recent years – and that may be keeping calorie counting consumers from switching to the shot. So what happens next? It’s hard to see a billion dollars in revenue as much of a problem, but Bhargava has been known to get restless – in fact, he came out of retirement after making his first fortune in industrial sales in order to start Living Essentials in the first place. He’s already announced plans to come up with a satiety nutrition bar, and with his penchant for disruption, it could be a potent weapon indeed. He’s on record as saying that once an outstanding product is in place, it’s all execution from then on (along with a raft of lawyers). If 5-Hour is to shake itself out of the doldrums, however, it’s likely to take a mix of determined execution and innovation. Either that, or the brand has matured to the level of its target audience – and will maintain a middle-aged maintenance approach from here to eternity.
SEPTEMBER 2013 BEVNET MAGAZINE 37
RuckPack, created by Marine Special
Operations Forces, is a nutritional shot that aims to sustain mental and physical performance and improve cognitive functioning and stamina, even during physical fatigue. According to the company, RuckPack, which has 20 calories and no caffeine, contains less sugar and up to three times more electrolytes than the leading sports drinks. Also, 10 percent of profits go to military charity. SK Energy was voted “#1 in Energy” for
2013 by Product of the Year USA. SK Energy Shots are made with antioxidants, pure vitamins, natural caffeine from green coffee beans and natural flavors. The shots are certified by Informed Choice, an independent body that certifies the safety of consumer products for approved use by professional athletes. SK Energy is currently available at more than 50,000 locations nationwide, including Walgreens, CVS, 7-Eleven, GNC, Walmart, Hudson News and Rite Aid. The shot comes in a variety of flavors: Grape, Extra Strength Grape, Pomegranate, Extra Strength Pomegranate, Strawberry Lemonade, Extra Strength Strawberry Lemonade, Berry and Extra Strength Berry.
The shots are available individually or in a 10-count 5-day plan. IAM recently redesigned the packaging for the shots. Pyure OEO is an organic energy shot that’s
derived from green tea, yerba mate and guayusa extracts, and contains no sugar or GMOS. Available in Citrus and Mixed Berry flavors and sweetened with Pyure stevia, the shot also contains B Vitamins. The company says that the shot is compatible with the onthe-go consumer. Kudu Energy, which recently debuted its new flavor, Tangerine, has seen significant growth within the functional beverage space, according to the company. Kudu is looking to rapidly expand its brands and product lines throughout all fields of the beverage industry. Defy is a 3 oz. recovery supplement shot
that aims to help next-day mental alertness and enhance alcohol metabolism. The shot contains a blend of amino acids, electrolytes and B Vitamins to mitigate the side effects of responsible alcohol consumption. Defy has no sugar or calories and natural flavors. Beet It has launched the Beet It Shot in two
Verve Energy claims that its shot provides
both energy and nutrition. While it’s not intended to diagnose, treat, cure or prevent any disease, it does contain 160 mg of caffeine, vitamins, minerals, antioxidants, 3 grams of carbohydrates, 2 grams of sugar, and 10 calories per serving. Shotz Natural Energy is an all-natural energy shot created for health-conscious consumers and those with an active lifestyle. Shotz, available in Acai Berry, Mango and Pomegranate, contains Vitamin C, B vitamins and select amino acids, and no artificial flavors, sweeteners or preservatives. The product is sweetened with rebiana, a steviol glycoside, and various fruit juices. I AM Skinny, produced by I AM Products
LLC, aims to serve as a natural tool for losing weight, reducing body fat, increasing energy, boosting metabolism and controlling appetite. Each shot, sweetened with organic Pyure stevia, contains 150 mg of African mango seed extract, HCA-rich kokum fruit, chromate chromium and other nutrients. 38 BEVNET MAGAZINE SEPTEMBER 2013
SKUs: Beet It Organic and Beet It Sports. The company says that research has proven that natural dietary nitrate found in beet juice improves blood flow to deliver more oxygen and nutrients to muscles and the cardiovascular system. Used by more than 100 independent research institutions worldwide, the 2 oz. Beet It shots contain a mix of concentrated beet juice cut with lemon juice to reduce the natural sweetness. Tweaker Energy Shot is available na-
tionwide in berry, grape and pomegranate flavors. The company responded to customer feedback and introduced extra strength mango peach and pink lemonade flavors. A portion of the proceeds from sales of the pink lemonade flavor go toward helping breast cancer victims. Tweaker has a full NASCAR sponsorship and is the only energy shot that contains calcium, according the company. IQ Energy & Memory can stimulate energy,
memory, mood, recall and concentration, and is the only dietary energy supplement with NASA-tested NADH (a naturally-
produced energizer and memory aid used in cells throughout the body), according to the company. IQ Energy has no sugar or carbs.
recommends adding the product to water, coffee, juice or a carbonated beverage. GungHo is a shot that contains natural
Prefunc is an herbal supplement that aims to
help consumers enjoy their nights out without having to worry about the consequences of the morning after. The company says that Prefunc, which is manufactured at an FDAapproved facility, has a blend of herbs that helps support liver function. The product works best when taken before the night out, but can also be consumed at the end of the evening. Next10 Energy, created by Portland, Ore.based neurosurgeon Dr. Warren Roberts, has Vitamin B6, less caffeine than the leading energy drinks, no calories, and natural flavors to help consumers focus and excel in a healthy and enjoyable manner, according to the company.
ingredients and aims to improve focus and concentration. Dr. Perry Renshaw, Ph.D., professor of psychiatry and director of magnetic resonance spectroscopy at the University of Utah, said that GungHo will increase levels of critical neurotransmitters in the brain over time. Stacker 2, developed by NVE Pharmaceuticals, has introduced Stacker 2 Energy Shot B12, which provides 10,000 percent of the recommended daily value of vitamin B12, according to the company. B12 is a water-soluble vitamin that helps support the formulation of red blood cells, which are responsible for carrying oxygen from the lungs to the rest of the body.
Minx Passion Shots are safe, natural,
herbal-aphrodisiac energy shots designed to promote sexual health and wellness for men and women, according to the company. The shots are sold online and at select retailers in the U.S. and New Zealand. VidaThin Lemon Detox began online sales in
May and continues to see robust demand in Asia, Korea and the Middle East since launching in January, according to the company. AeroShot Energy contains 100 mg of caf-
feine, B vitamins and no calories or sugars. According to the company, AeroShot Energy can now be found in more than 15,000 stores nationwide, such as Circle K, SuperAmerica, Famima!!, Terrible Herbst, Murphy USA, Byrne Dairy and Honey Farms. Zombie Blast is a 2 oz. energy shot sold in
a reusable shotgun shell. The shots, which have a wildberry flavor, are now distributed through Pine State Trading Co. from Augusta, Maine, and Capital Candy from Barre, Vt. Theyâ€™re currently in more than 600 stores in New England. Zap! Gold is a 2 oz. energy concentrate that has no taste or sugar and contains Vitamins C, E, B3, B5, B6 and B12, natural caffeine and 12 ionic trace minerals. The company
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THE JUICE UPRISING By Ray Latif
Talk about premium. The juice category keeps getting closer to fresh-squeezed, and improving price points as it does. By constantly raising the ceiling on process technology, the top end of the juice category continues to allow the development of new brands and a new definition of fresh. 40 BEVNET MAGAZINE SEPTEMBER 2013
That can make it tough to track the full scope of the category, particularly when using a marketing term like “super-premium.” Based on variables that include home-juicing, storefront sales, bottled products and the very notion of what constitutes a “super-premium juice,” value estimates range from $1.6 to 3.4 billion. However, one aspect of the market is beyond dispute: cold-pressed juices, which are often regarded as having superior taste and quality than traditional counterparts, are gaining steam – and fast. “The category of cold-pressed, superpremium juice is really having its moment,” said Chris Bruzzo, senior vice president, Channel Brand Management and general manager of Evolution Fresh. “You’re in an environment where consumers are ready to make that journey into the next-generation of juice.” Bruzzo made the statement just a few days before big news hit the category: Whole Foods would be marketing several
Evolution Fresh juices on an exclusive basis, and the brand would be rolled out nationally in the retailer. Additionally, Starbucks would develop other lines of snacks under the Evolution Fresh brand platform, giving it even more visibility. The news meant another realignment in the Whole Foods pecking order, which, in less than two years, has seen stalwart brands like Odwalla, Naked and Columbia Gorge become bottom-shelf dwellers. Those brands have been replaced by a cadre of high-pressure processed (HPP) competitors, including Evolution Fresh, Suja and BluePrint, as well as upstart regional brands like Project Fresh and Vital Juice – not to mention a line of in-house fresh-pressed products that Whole Foods has been test marketing on its own. The transition has been swift, but it’s not entirely unexpected. Trends toward health and wellness have exploded onto the U.S. market and fueled a roller coaster of change within food and beverage industries. From functional ingredients and ancient grains to low-calorie natural sweeteners and raw foods, consumers are exposed to, and demanding, better-foryou products in every aspect of their diets. And although much of this demand begins in the natural channel, one need look no further than the ubiquity of coconut water or Greek yogurt as symbols of how quickly mainstream adoption can take place. STARTING WITH CLEANSE In the case of raw and cold-pressed juices, much of the recent growth has its roots in greater awareness and demand for detoxifying juice cleanses, which, in recent years, have been bolstered by a celebrity foghorn of endorsement. With influential devotees like Gwyneth Paltrow and Kim Kardashian sounding off on the benefits of juice cleansing, trendy and well-heeled consumers have flocked to a swelling selection of direct-to-consumer cleanse programs often sold online and packaged as daily regimes of several bottles of juice. While there is some disagreement in the health community about the actual efficacy of juice cleanses, a loyal and growing contingent of consumers swear by the products, and it’s clear there is a significant market for these detoxifying elixirs. Proof comes in the form of Blueprint,
42 BEVNET MAGAZINE SEPTEMBER 2013
which, since its launch in 2007, has been the largest and most visible marketer of bottled juice cleanses. Blueprint reached $20 million in sales in 2012, attracting the attention of natural foods conglomerate Hain Celestial, which acquired the brand in December. However, while juice cleanses have gained a significant amount of mainstream media attention and continue to drive to new awareness and consumption of high quality juice, the segment is limited in scale because of the high cost of the products (a single day’s regime often retails for upwards of $60), and use occasion, which varies from one consumer to the next. And despite sustained traction for juice cleanses, Jeff Church, the CEO of Suja, sees possible cracks in the sustainability of a business predicated solely on the sale of juice cleanses. “I do think that cleansing potentially is a fad,” Church said. “I don’t think you necessarily want to build your business model around a cleanse-based company, which is why we’re building ours more on reinventing the juice category. I think, in general, people want to treat their bodies better. Cleanse is just a small component of it, to be honest.” Yet while juice cleanse products may remain a tiny subset of the multi-billion dollar U.S. juice category, demand for the beverages has led to the introduction of many new lines and brands that are modeled or culled from cleanse packages, but sold as individual bottles. Priced at $7-11 for a 16 oz. bottle, and sold at a variety of large and independent natural retailers, these products, which include Hain’s BluePrint Juice line, are commonly consumed for uses other than cleanse, including meal replacement and weight loss management. In a little more than a year, the products have gained shelf space in hundreds of large and independent natural retailers across the country – and that number is growing. To achieve wider distribution and a longer shelf life for these juice products, companies turned to HPP, a method of processing that, unlike pasteurization, uses high pressure instead of heat to inhibit bacteria growth in raw foods and beverages. The juice, which is already bottled when it undergoes HPP, does not come
in actual contact with pressure. Although HPP gives raw foods a shelf life of only a few weeks, it is widely regarded as superior to pasteurization (which is how most juice products are processed) in maintaining nutrition and flavors from raw ingredients. PRESSURE TO “REINVENT THE JUICE CATEGORY” HPP has helped create the cracks for what Church and others see as potentially a seismic shift in the way mainstream consumers view and purchase juice. They argue that the wave of new cold-pressed juices offer quality and taste that shatters the mold of traditional packaged juice, and it’s the emergence of HPP that is the single biggest factor behind greater adoption of the products. “HPP is the cold-pressed juice category, in our view,” Bruzzo said. “We are totally committed to Evolution being a coldpressed juice that uses HPP in our core juices. And we believe that it is going to unlock a fundamental shift, we believe, in the way that Americans, and, ultimately, the world, consumes juice.” Evolution views juice as becoming less of a complementary beverage and more of, what Bruzzo called “a progressive choice in your nutrition every day.” The mindset of the Starbucks-owned company is aligned with category trends that have seen dollar sales and consumption of traditional juice drinks remain stagnant or decline. According to market research firm Packaged Facts, consumption of regular orange juice has over the past five years slid by 3.6 percent, while that of frozen orange juice plummeted by 14.7 percent. Part of that wane in consumption comes from Americans’ desire to reduce their intake of sugary beverages of any kind. But research points also to an interest in increased nutritional benefits, not just calorie reduction. In a recent analyst report on the juice category, Michael Schaefer, the head of beverage and foodservice for market intelligence firm Euromonitor International, notes that it’s possible to overcome consumer concerns about sugar, but in the form of better-for-you beverages, including HPP juices, “which can offer a truly different taste/health benefit equation,” he wrote.
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Despite what appears to be tremendous upside to the use of HPP, and putting aside recent rumblings by some in the cold-pressed juice category who consider HPP to be an adulterant to raw juice, there are some significant roadblocks to greater deployment of the processing format. For one thing, HPP, which requires high level of technical expertise and equipment, represents a substantial added cost to juice companies, which often outsource processing. The incremental cost for toll processing can range from $0.25 – $0.45 per bottle, depending on the size of production runs, according to Joyce Longfield, an independent HPP consultant who advises a range of cold-pressed juice companies. Those costs do not include transport to and from HPP facilities. And if toll processing sounds expensive, consider that the cost to purchase an HPP machine can run from $800,000 to well over $2 million. Additionally, because of the dramatic rise in demand for HPP, many toll processors are currently at capacity, Longfield said. Compounding the issue, regulatory bodies, including the U.S. Food and Drug Administration (FDA), are becoming increasingly concerned about the proliferation and safety of raw and unpasteurized juice and calling on many brands to begin using HPP, or an alternative form of processing, in order to deliver a safer product to consumers. “People come to me and say, ‘I am being told by the FDA to do something,’” Longfield said. Nevertheless, Longfield expressed optimism that new facilities in planning, including one that she said will focus on working with smaller-sized production runs, will help meet the growing needs of cold-pressed juice companies. GETTING SMALLER, GETTING FAMILIAR While HPP may be the critical step to reaching a broader set of consumers, cold-pressed juice companies are faced with the fact the high retail prices associated with their products will continue to restrict the brands to a narrow market opportunity. To fully engage the mainstream, brands are following a common path seen in other beverage categories: get smaller and get familiar.
“There’s a limited market,” Church said. “The top end of the pyramid -- that is a much smaller market that’s willing to pay a premium. You’re not going to get as big a market, for sure. It’s not going to be mainstream in the base of that pyramid for $9 [per bottle]. The broad juice market isn’t probably going to pay that.” To reach the broader consumer base, Suja and its competitors are rolling out more accessible product lines. Elements, Suja’s new line of 12 oz. juice blends, is the company’s first step toward mainstream penetration. The line, which Church described as designed for “functional refreshment,” debuted with three flavors – 24 Karat, Green Charge and Berryoxidant – each with formulations intended to appeal to more conventional palates (think apples, bananas, oranges and strawberries). Like Suja’s primary line, Elements products are USDA Certified Organic and non-GMO verified, however, the drinks come with a significantly lower suggested retail price of $4.99. “We didn’t want to be at the top end of that pyramid permanently; it’s a great way to start, and a great way to build your brand,” Church said. “But we believe that, with the benefits of HPP, if we’re able to offer a range of price, value and quality, that, over time, we can be the next generation of juice.” Church called Elements’ $5 price tag “a magical number” for the brand, comparing it to what some consumers are willing to spend daily for a coffee product at Starbucks. The price is also more in line with that of Evolution Fresh juices, which retail
for $3 to $7 for a 15.2 oz. bottle, and while Church noted that Suja is aiming to increase market share from competing brands, he believes that the positioning of Elements could attract consumers in other beverage categories. Of course, Suja is not the alone in its desire to reach a broader range of consumers. One month prior to the launch of Elements, BluePrint introduced a new line of 10 oz. bottles that the company created “to connect with a wider consumer base by offering more options both from a palate and health-driven perspective,” according to statement from the company. The line is certified organic and comes in three new flavors for the brand: Carrot Lemon, Kale Apple Lemon, and Orange Grapefruit Lemon. Although BluePrint made its mark via cleanse-focused positioning, co-founder Erica Huss said the company would not be doctrinaire as to a specific use occasion for the new juices. Instead, BluePrint would encourage consumers to “make a decision for what their needs are.” At a suggested retail price of $5.99, BluePrint
of both brands, their quest to attract new consumers could be stunted with the recent news that Starbucks will expand distribution of Evolution Fresh products to Whole Foods stores nationwide. Facing off against Starbucks will be no easy task, especially considering the company’s $70 million investment of a new juicing and manufacturing plant (which includes a number of HPP machines) in Southern California. The facility is scheduled to open later this year and will enable Evolution Fresh to process approximately four to five times the amount of juice per year as its current facility. Combined with the distribution muscle of the coffee giant, Bruzzo believes that Evolution is significantly better positioned than competing brands to take advantage of growing awaredoes, however, propose that the product would be a good fit for consumers as an on- ness and adoption of cold-pressed juices. “We believe that our mission is about the-go beverage or meal pairing. trying to get really healthy fruit and vegetaBoth Elements and BluePrint’s 10 oz. line will be sold exclusively at Whole Foods ble juice into the hands and into the bodies of as many people as possible,” Bruzzo for an undisclosed period of time, an increasingly common arrangement for new said. “And we’re in a position to really lead the category of cold-pressed juices, which cold-pressed juice products. But while the natural retailer has been vital to the growth we believe is the future of juice.”
SEPTEMBER 2013 BEVNET MAGAZINE 45
V8 has released a pair of new juice drinks: V8 V-Fusion Refresher and V8 V-Fusion + Energy Diet. V8 V-Fusion Refresher is a blend of fruit and vegetable juices that come in four flavors: Black Cherry Berry, Cranberry Grape, Tangerine Passionfruit and Peach Strawberry. The product is naturally sweetened, contains no artificial flavors or preservatives and is an excellent source of Vitamin C, according the company. V8 VFusion + Energy Diet contains an 8 percent blend of fruit and vegetable juices with a natural energy boost from green tea extract. This product contains 80 mg of caffeine, 10 calories, no added sugar and is an excellent source of B Vitamins and Vitamin C, according to the company. It is available in two flavors: Diet Strawberry Lemonade and Diet Cranberry Raspberry. Purity Organic has been growing in all of its key markets. The company recently introduced a new Peach Paradise flavor, as well as a new line of iced teas, all of which have garnered positive feedback in sampling events for the products. JOOS’ 100 percent organic, cold-pressed fruit and vegetable juice blends are never heated. Each 16 oz. bottle of juice contains seven lbs. of vitamins and minerals that may be consumed as a daily nutrition supplement, before or after a workout, to fight a cold or to enjoy the taste. Green lemonade, which contains apple, kale and lemon, is the company’s most popular green drink. The Fave Juice Company, based in
Middletown, N.J., has launched All-Natural Fave in HEB and Meijer stores. Fave, which comes in 46 oz. recyclable PET bottles, is a blend of fruit and vegetable juice that contains three vegetable servings and 60 calories per serving. It’s also low in sodium and has no added sweeteners. Naked has released Power Garden, a line of veggie smoothies offered in two flavors: Berry Veggie and Tomato Kick. Each 15.2 oz. bottle contains one pound of blended fruits or vegetables, and contains fiber, protein and potassium. The Pichuberry Company has launched its first natural pichuberry product: Pichuberry Infusion Juice. The juice is made from the 46 BEVNET MAGAZINE SEPTEMBER 2013
pichuberry, a berry rich in nutrients and antioxidant, native to Peru and the Lost Incan Civilization. The juice will be distributed in Stater’s Brothers and Whole Foods stores in Southern California, Arizona and Nevada by the end of September. Studies show that the pichuberry contains withanolides, a group of compounds shown to reduce oxidative stress and support the immune system fight against carcinogens, according to the company. The juice comes in 16 oz. individual bottles and in 12-pack cases. POM Wonderful recently launched three fruit juice blends: POM Hula, POM Mango and POM Coconut. POM Hula contains pineapple and organic apple juice, and aims to evoke an off-the-map beach getaway. POM Mango combines mango and pear juice. POM Coconut contains coconut water and pineapple juice. The three juice blends come in POM Wonderful’s 12 oz. curved bottles. Old Orchard Brands has added to its line of
juices for kids by introducing flavors of Apple, Grape, Fruit Punch and Berry Blend. The juice contains 50 percent less juice than traditional juices, according to the company, 60 calories and 100 percent of the recommended daily dose of Vitamin C. The juice, which comes in a 64 oz. bottle, has no artificial colors, flavors, sweeteners or preservatives. Wild Poppy Juice is now available nationally with distribution through UNFI, Nature’s Best, KeHE, Unified Grocers/MarketCentre, Haddon House, Chef’s Warehouse and other DSD distributors. Wild Poppy is a line of organic craft fruit drinks made with fruit grown in California, sweetened with raw organic agave, mixed with spices from around the world and served in a 10 oz. single-serve glass bottle. The line includes four flavors: Organic Blood Orange Chili, Organic Grapefruit Ginger, Organic Peppermint Lemonade and Organic Peach Vanilla. Chia\Vie by Bare Nutrition, LLC has been
focusing on expanding distribution beyond the natural channel and is now available at participating Costco, Target and Kroger stores. In addition to bringing LA Libations, LLC to their team, Chia\Vie has inked a strategic marketing partnership with one of Hollywood’s prolific movie studios, which will be announced soon, according to the
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Packed with protein, not sugar or calories PREMIER PROTEIN is a registered trademark of Premier Protein, Inc. Copyright 2013 Premier Protein, Inc. All Rights Reserved
company. Chia\Vie pairs ground chia with fruit (75-83 percent juice) to provide a smooth, healthy beverage. BEAT Juice aims to improve heart health with more than 900 mg of polyphenols. The juice is made with 100 percent natural, premium fresh fruits and vegetables and has no added sugars, flavors or sweeteners. Harmless Harvest has formed a national partnership with Whole Foods for this fall. The company enacts frozen pulverization, high velocity blending and high-pressure processing (HPP). Following its success in the raw coconut water category, Harmless Harvest will offer three formulations based on organic leaves sourced from ancestral tea greens of southern Japanese volcanic slopes: Unsweetened, with just water and leaves (0 calories), Raw Peppermint (35 calories), and Raw Honey & Lemon (60 calories). The 100 percent raw teas are highly perishable and must be refrigerated at all times. Juice Squeeze by Crystal Geyser is a lightly-carbonated, 70 percent fruit juice without added sweeteners, preservatives or artificial ingredients. Walmart stores in Northern California now carry three flavors of Juice Squeeze: Wild Berry, Mountain Raspberry and Passion Fruit Mango. Juice Squeeze comes in five all-natural flavors in two sizes of bottles, 12 oz. and 23.9 oz. Little Hug Fruit Barrels has signed a sponsorship deal with Matty B, a 10-year-old rap artist who has garnered more than 500 million views on YouTube. Matty B has released a new video that features the Little Hug barrels. Also, after Robert Horne, a special ed teacher in Gainesville, Ga., won a Little Hug cash promotion, he spent his $3,000 prize on iPads for some students in his class. Little Hug was impressed with this act, so Tim Barr, the company’s VP of marketing, flew to Georgia and donated iPads for all the students in his class. The story was picked up by MyFoxAtlanta and later posted on Facebook, where it received more than 400,000 likes. Connecticut Currant, along with Maple Lane Farms, its sister company, continues to expand into new markets with their allnatural black currant juices. Black currants contain double the antioxidants of blueberries, according to the company. The product 48 BEVNET MAGAZINE SEPTEMBER 2013
is available in three flavors: Black Currant, Black Currant/Cranberry and Black Currant/ Blueberry in both 10.2 oz. and 53 oz.PET bottles. Apple Black Currant Cider will return in the fall. Brazil Gourmet Tropical Juices is planning
to launch new label graphics, which were designed by Murray Brand Communications of San Francisco. Selected in 2011 to participate in Package Design Magazine’s Makeover Challenge, Brazil Gourmet’s packaging was redesigned by four competing agencies with Murray Brand’s winning design selected by the magazine’s readers and attendees at Pack Expo. The new look was developed to bring a consistent look to Brazil Gourmet’s line of products and to express the brand’s positioning of purity. Brazil Gourmet juices, imported from Brazil, are available in mango, passion fruit, guava and cashew fruit. Jin+Ja considers its product to be “a natural wellness elixir.” The elixir is available in midAtlantic Whole Foods stores, the campuses of Boston University, New York University and the University of Pennsylvania, and will expand to Kroger stores in the West Coast. The continued expansion includes national distributors Central Market and UNFI. Jin+Ja recently won a sofi award titled “Outstanding Cold Beverage” and a My Story My Ad Contest national campaign valued at $15,000 by the Specialty Food Association, according to the company. Jin+Ja appeared on Nightly Business Report by CNBC and is scheduled to appear in September or October in a business series by USA Today. Columbia Gorge Organic has launched
a new label design that aims to show the juices’ journey from the farm to the bottle. Columbia Gorge Organic is a small family farm that has national distribution for its juices and food bars. Elite Naturel has seven flavors: Sour Cherry,
Pomegranate, Watermelon, Pom-Acai-Black Mulberry, Cranberry, Black Mulberry and Honeydew Melon. The juices are 100 percent USDA organic, non-GMO, gluten free and kosher. BluePrint has launched three new juice
beverage flavors exclusive to Whole Foods nationwide. The three flavors are Carrot Lemon, Kale Apple Lemon and Orange
A Healthy Lifestyle Starts with a Glass of Carrot Juice Every Day. Try Our Full Line of Fruit & Vegetable Juice Drinks. Your Satisfaction is Fundamental to Our Success! CONTACT PAUL CATALANO AT 718.821.7200 EXT.12 OR GM@SKIBEERUSA.COM FOR DISTRIBUTION OPPORTUNITY. RALPH&CHARLIE’S® IS A REGISTERED TRADEMARK OF RALPH & CHARLIE’S JUICE COMPANY. ALL RIGHTS RESERVED.
Grapefruit Lemon. All three flavors are 100 percent raw and certified organic, made from fruits and vegetables, and are offered in a newly designed 10 oz. bottle. Ginger Soother is a juice that contains honey and lemon and sources ginger from Peru, giving it a spicier flavor with natural notes of citrus, according to the company. Ginger is said to soothe the throat and stomach, warm the internal organs and ease nausea and ailments from colds to headaches. Ginger is also an antioxidant with more than 12 constituents said to be superior to vitamin E, according to the company. This all-natural, gluten free and kosher-certified drink is available nationwide in natural food stores in 12 oz. and 32 oz. bottles. Italian Volcano, made by Dream Foods In-
ternational, LLC, has announced the arrival of its new 250 ml glass bottles of 100 percent USDA organic Blood Orange and Tangerine juices. Following the 750 ml bottle, the new single-serve offering is also made from organic citrus that grows near the Mt. Etna Volcano in Italy. Benefiting from the volcanic soil, the fruit is hand-harvested and juiced immediately for a fresh-squeezed taste, according to the company.
Genesis Todayâ€™s Cranberry Goji is a juice drink that features Goji, a berry from China, and cranberry. The juice contains 100 percent the daily value of Vitamins B12 and C, 80 calories per serving and is sweetened naturally. It has no artificial sweeteners or colors. Other flavors from Genesis Today include Pomegranate and Berries. Found juices have a 12-month shelf life, and
are made with a cold-fill process that uses minimal heat pasteurization. This gives the juices a bright color and an amazing scent, according to the company. The juice, which is packed in 8.5 oz. glass bottles, comes in three flavors: Orange, Apple and Pomegranate. Vital Juice is a new premium organic juice
company focused on providing hand-crafted, cold-pressed juices made from organic produce. The juices are vegan and GMO-free, and are made through high pressure processing. Once the juice is in its final packaging, a high level of pressure is applied to destroy any pathogens to ensure the juice is safe to drink while preserving crucial vitamins, enzymes and nutrients. Vital Juice offers 12 flavors including Vital Beet, Vital Greens, Vital Citrus and Vital Melon. Drazil Tea is a naturally caffeine-free herbal
Vibrant Earth Juices has relocated its cold-
pressed, organic juice company from Santa Barbara, Calif. to Denver. The company adds organic flax oil to all of its juice elixirs to have a point of differentiation. The vegan oil blend is necessary for optimal absorption of fat-soluble vitamins and helps with the digestion of sugar, according to the company. Last month, Vibrant Earth Juices launched a custom-built juice truck that offers their cold-pressed juice line and madeto-order smoothies on the road. Novo Organic Sports Drinks, powered by coconut water, three times the amount of electrolytes of the leading sports drinks and more potassium than one banana, according to the company. The drinks contain 9 grams of sugar and 35 calories per serving, and have no artificial flavors, colors or sweeteners. Novo, which is available at select retailers and gyms in Nantucket and Boston, comes in four flavors: Blueberry Pomegranate, Ginger Lime, Raspberry Lemon and Mango Mandarin.
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tea made for kids. Itâ€™s rich in antioxidants and infused with fruit juices to appeal to young palates. The beverage, which is sold in an 8-pack of single-serve boxes, is made with 55 percent herbal tea and 45 percent fruit juice. Distributed at select California retailers, Drazil comes in four flavors: Punch Passion, Yummy Berry, Grape Bliss and Tropical Burst. Ralph & Charlieâ€™s Juice is an all-natural
fruit and vegetable beverage that comes in Mango Carrot, Pineapple Carrot and Banana Carrot, among others. The juice comes in 18 oz. glass bottles with a wide mouth and is currently distributed in Whole Foods, Fairway Market, Duane Reade and other markets in New York, New Jersey, Michigan, Massachusetts, Georgia, Ohio and Arizona. Blue Monkey 50/50 Juice Blends contain
half coconut water and half juice, resulting in a beverage that has the mineral, vitamin and electrolyte components of coconut
water with the added nutrients of tropical fruits. The juice is not from concentrate, certified kosher, all-natural and contains no added preservatives or sugar. Flavors include Mango, Passion Fruit, Guava and Pineapple. OnJuice, the South Florida-based organic, cold-pressed juice brand, was recently featured by lifestyle and health magazine PopSugar. OnJuice is available at a number of Miami hotels and spas. JuiceRX sells fresh-pressed, unprocessed, organic juices that will be shipped across the country. The juice has been well received in Chicago, according to the company. Red Jacket Orchards has released Joe’s Summer Blend, a combination of the company’s Fuji apple juice with a bust of lemon. The only ingredients are apples, lemons and Vitamin C, according to the company. The juice comes from the Finger Lakes region in New York, where Red Jacket Orchards, a
third-generation, family-owned orchard, has made juices for more than 50 years. KonaRed Hawaiian Superfruit Antioxidant Juice has gained distribution in Canada with UNFI West, Corwin Distributors and Horizon Distributors. KonaRed has also entered King Soopers stores in the Pacific Northwest and become a part of Kroger’s “Taste of Tomorrow” initiative to showcase new and innovative brands. Suja has launched Elements, a new line of
12 oz. juice blends designed to appeal to a broad range of consumers. Like Suja’s primary line, the products are USDA Certified Organic and non-GMO verified. Elements debuted with three flavors – 24 Karat, Green Charge and Berryoxidant – and Suja will introduce new varieties in the coming months. The company will donate a percentage of the proceeds from each bottle sold to a charity-based cause linked to each flavor.
LEMONADES BY PULSE® BEVERAGES
Pulse Beverage Corporation is proud to announce the introduction of Cabana 100% Natural Fruit Flavored Lemonades–made with 100% natural lemon juice and 100% real fruit flavors to give it the true taste of a refreshing and delicious pure 100% natural lemonade. Cabana Lemonade’s are sweetened with a blend of pure cane sugar and the pure sweetness of the stevia leaf. The Stevia plant is an herb that produces a natural sweetness without any calories or carbohydrates. The combination of pure cane sugar and Stevia makes for a great balance, and allows Cabana to offer a 100%natural lemonade with great taste and lower calories. Cabana Lemonade’s are packaged in 12/20 oz. nonreturnable Glass Bottles that may be enclosed for later use. The lemonade category is one that has proven to be successful year-round and is not over saturated. There is a great opportunity to offer your customers Cabana Lemonade’s and not just a “me too” product line.
PULSE BEVERAGE CORPORATION • 11678 N. HURON ST., STE. 200, NORTHGLENN, CO 80234 • 720.382.5476 • WWW.PULSEBEVERAGE.COM
SEPTEMBER 2013 BEVNET MAGAZINE 51
STRONG By: Jeffrey
Klineman If you’ve got lemons, make lemonade. For companies trying to get a leg up in the grab-and-go world of the juice cooler, that’s been exactly what’s been going on. While ersatz “fruit drinks” have been in decline for years, the lemonade category has been one of the few flavors that drink makers can turn to when they want an inexpensive winner. All manner of juices have moved to the high end, but when it comes to lemonade, the formula aligns closest to those of older “New Age” products like Snapple and Nantucket Nectars. But those older juice drinks and pure juice products have fallen on hard times. In the bottled juice category, orange juice has been struggling since the Atkins craze, while many of the blends that powered the early years of Snapple and SoBe have come to be viewed as just so much sugar water. Meanwhile, lemonade has never pretended to be much more than that. Maybe because it’s a drink that many associate with homemade, and maybe because the ingredients don’t vary all that much at their most basic level, lemonade has stayed fairly steady. But with new brands like Hubert’s, Calypso, Cabana, and even a re-launched Fuze energizing the category, in fact, it’s gotten a strong tailwind that’s now in its third year. That tailwind has even extended to long-in-the-tooth refrigerated brands like Coke’s Simply Lemonade and Minute Maid Light lines, filling sails for companies large and small. Interestingly enough, while most juice categories have been subject to a strong premiumization trend, lemonade has basically remained sheltered from the cold-pressed, HPP, antioxidant and nutrient rich craze. Certainly more cultural touchpoints for premium products, like organic certification, have become key marketing points for some brands, while lower calorie formulations have also become as common for lemonade as they have for other drinks (citrus’ easy blending with on-trend stevia helps there), but there’s no innate supposition that lemonade is sup52 BEVNET MAGAZINE SEPTEMBER 2013
posed to be good for you. What it has been, however, is healthy business – and it’s growing more so every year. The potency of lemonade as a flavor can also be found in the fact that its success is permeating other categories: in bubbles, on the value side Sparkling Ice launched four sparkling lemonade flavors, while high-end brands like Spindrift and Bibbs have also found new retailers happy to take on lemonade skus as well. In booze, Mike’s Hard Lemonade is the category leader for malternatives. The hottest new energy drink entries – the Rehab and Recovery lines from Monster and Rockstar, respectively, have been based around a lemonade format. And in the RTD tea category, of course, one of the runaway successes of the past few years has been the Arnold Palmer ½ tea, ½ lemonade formulation. AriZona liked that format so much, in fact, that it plotted a similar (golf) course in recruiting Jack Nicklaus as the face of a brand new line. It’s so comfortable with betting on lemonade that it kicked out the tea – and guess what? Golden Bear Lemonade is one of the fastest growing brands in all of bottled and canned juices and juice drinks. Maybe that’s why Snapple, still fighting to stay relevant with so many competitors around, chose to formulate lemonades as its new line of products for an exclusive line of drinks with 7-Eleven. Going with a lemonade is something of a return to the brand’s simpler roots. It’s no Trop-A-Rocka, but with all due respect to Bret Michaels, it’s the lemonade that keeps on delivering the hits.
Lori’s Original Lemonade introduces its
Ginger Lemonade this year, an addition to the existing line of Lavender Lemonade. The lemonade has mix of organic ginger extracts, organic lemon juice and organic cane sugar from Brazil. Lori’s Original Lemonades aren’t made from concentrate and have no preservatives or artificial sweeteners. The Ginger Lemonade sold more than 6,000 bottles in its first week and the numbers are still growing, according to the company. Ritual Wellness, makers of 100 per-
cent USDA certified organic fruit, nut and vegetable juices, released its newest lemonade blend: Turmeric Lemonade. The lemonade, made with alkaline water, lemon, raw agave, ginger and turmeric, joins the company’s spicy lemonade and lavender lemonade. The company says that all three lemonades are effective metabolism boosters. Uncle Matt’s Homestyle Lemonade,
which aims for a balance of tart and sweet, is made from freshly-squeezed organic lemons grown without synthetic pesticides, herbicides or fertilizers, according to the company. Lorina, the French all-natural artisanal soda, which comes in Pink Lemonade, Lemon, Blood Orange, Pomegranate and Coconut Lime, has launched a new 38.3 oz. PET bottle. The bottle, which looks like glass, is more convenient and affordable, according to the company. The soda, which is distributed in gourmet and conventional stores nationwide, is made with water from a natural spring, natural fruit flavors and pure crystal sugar. SunnyD has expanded its raspberry lemonade into grocery stores across the country. The lemonade, which is available in bottles of 16 oz., 64 oz, 128 oz., and 6-packs of 11.3 oz. bottles, contains 100 percent Vitamin C and 40 percent less sugar than regular soda, according to the company. Big Island Organics has four flavors:
Noni Lemonade, Agave Lemonade, Hawaiian Gingerade and Gingerade Maté. The ginger lemonades each contain about 54 BEVNET MAGAZINE SEPTEMBER 2013
30 grams of yellow Hawaiian ginger. The Noni Lemonade has about 30 grams of Hawaiian noni, a fruit from a small evergreen tree found in the Pacific Islands, Southeast Asia, Australia and India. Dust Cutter, which is based in Jackson Hole, Wyo., has three flavors: Original Lemonade, Iced Tea Lemonade and Huckleberry Lemonade. All the flavors contain fewer than 80 calories per serving and 20 grams of real cane sugar. Dust Cutter says that its Alumi-Tek bottle from Ball Corp. is functional for outdoor venues and active people. Dust Cutter, which has plans for further expansion, is currently distributed in Jackson Hole and Utah. Talking Rain Beverage Company is building off the success of the Sparkling ICE brand with the launch of four lemonades: Classic Lemonade, Strawberry Lemonade, Raspberry Lemonade and Lemonade with Tea. Consumer feedback and sales to date both indicate success, according to the company. Hubert’s Lemonade has released multiserve cold boxes for its original and diet lemonade offerings. The cold box is a 40 oz. version of the original 16 oz. glass bottle. The original lemonade is available in four flavors: original, strawberry, cherry limeade and blackberry. The diet lemonade, which is sweetened with a proprietary blend of cane sugar, stevia leaf extract and monk fruit extract, is also available in four flavors: original, strawberry, mango and blackberry. Calypso Lemonade, based in Milwaukee, is produced with a focus on quality, using pure cane sugar, natural flavors and real lemon bits. The lemonades, which are on the shelves in Walmart, Wawa, Circle K, Food Lion, QT and others, are packaged in 20 oz. proprietary glass bottles. Calypso Brands continues double-digit growth and is poised to eclipse 5 million cases this year, according to the company. Italian Volcano, made by Dream Foods International, is an organic lemonade served in a 750 ml bottle and a new single-serve, 250 ml bottle. The lemonade, which benefits from the volcanic soil, is
ways to increase sales.
A CATEGORY LEADER, Turkey Hill gives you a variety of options for boosting sales. With 16 flavors to choose from in
our 16 and 20 oz. drink line, we offer on-the-go refreshment for every taste. So stock your shelves for sales in full color.
Contact Turkey Hill Dairy Sales Department, 800-873-2479| Email: email@example.com | turkeyhill.com 2601 River Road, Conestoga, PA 17516
made from hand-harvested Sicilian lemons that grow near the Mt. Etna Volcano in Italy and juiced immediately, according to the company. The lemonade is sweetened with organic dehydrated rice syrup, which isn’t too sweet or too tart. Columbia Gorge Organic has three vari-
eties of nationally-distributed organic lemonade: Classic Lemonade, Meyer Ginger Lemonade and Strawberry Honey Lemonade. The Classic Lemonade is made with California lemons and sweetened with organic agave. The Meyer Ginger Lemonade is made with Meyer lemons, also from California, a shot of organic ginger juice and a touch of cayenne. The Strawberry Honey Lemonade features organic strawberry puree and a dip of honey. Each lemonade features filtered water fro Mt. Hood in the Oregon Cascades.
real cane sugar. The lemonade, which was introduced as part of the company’s premium drink line, has a grip bottle design and aims for upscale labeling. Bai Brands, LLC has introduced its first
lemonade, Bai 5 Limu Lemon. The lemonade, which is sweetened with organic stevia and all-natural erythritol, has 5 calories, 1 gram of sugar and 35 mg of caffeine to provide a gentle lift, according to the company. The lemonade is kosher, vegan, low-glycemic, gluten free, soy free and made with all-natural lemon juice. Because each bottle is aseptically filled, the antioxidant properties of the coffeefruit extract remain potent, according to the company. Bai 5 beverages are available online at Amazon. com, at leading retailers throughout the country and at premium stores along the East Coast and West Coast.
Cheribundi makes its Cherry Lemonade
with 20 fresh-pressed Montmorency tart cherries per bottle. The lemonade, which comes in a 16.9 oz. bottle, is 100 percent natural, kosher and gluten free. Monster Energy Rehab Tea + Pink Lem-
onade + Energy aims to quench thirst, fire you up and bring you back after a hard day’s night, according to the company. The non-carbonated drink contains electrolytes and 10 calories.
Love Grace has formulated Longevity Tonic, a spicy lemonade that features more than 70 trace minerals to improve the immune system, increase libido and bolster the health of hair, skin and nails. It also features Shilajit, an herb from the Himalayas that has anti-aging properties, according to the company. Love Grace is now carried in more than 150 locations throughout New York City’s five boroughs and New Jersey.
Make a Stand is a lemonade inspired by 9-year-old Vivienne Harr. Half of all profits will go to five organizations that fight child slavery, according to the company. The lemonade, which comes in Original and Kick, infused with yerba mate and ginger, is making its way into retailers across California.
uvé features a sparkling Black Cherry
Califia Farms launched its California Homestyle Lemonade and Lemon-Limeade earlier this year. Both lemonades are made with fresh California Meyer lemons. The packaging on the 48 oz. PET bottle resembles the bold, bursting colors of classic California fruit crate labels, according to the company.
AriZona Beverages has added Pink Lemonade to its Golden Bear line of lemonades, which partners with golf legend Jack Nicklaus and already includes regular Lemonade with Honey and Gingseng, Strawberry Lemonade, Mango Lemonade, Mint Lemonade and a 10-calorie version of regular Lemonade with Honey and Ginseng. The Golden Bear line was influenced by the rapid success of Arnold Palmer Zero, a combination of lemonade and AriZona iced tea.
Turkey Hill’s All Natural Lemonade,
which comes in a 57.6 oz. PET bottle, is made with 12 percent lemon juice and 56 BEVNET MAGAZINE SEPTEMBER 2013
Lemonade that helps with weight loss, according to the company. LifeStyle Brands LLC, the makers of uvé, have gained national distribution through UNFI. uvé uses African mango extract to help with weight loss. Safeway and HEB stores have recently added uvé to their shelves.
PH: 414 - 482 - 0303
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HOW SIERRA NEVADA TURNED A NEW PACKAGE AND A NEW STYLE INTO A REMARKABLE WEAPON BY RAY LATIF
It’s a trend seen since the emergence of craft: brewers christening their beers with inventive and catchy names that often play on ingredients, formulation or seasonal release. In the case of Dogfish Head’s Wet Hop American Summer, it’s all of the above. And so when it came time to name its first year-round IPA, Sierra Nevada chose a similar path with its choice of “Torpedo,” which takes its name from the brewery’s innovative “Hop Torpedo” device, a dry-hopping mechanism that was specifically developed to brew the beer. According to Sierra, the “cylindrical stainless steel vessel harnesses the essential oils and resins in hops, without extracting bitterness.” 58 BEVNET MAGAZINE SEPTEMBER 2013
Putting aside for a moment the technical aspects of its design, however, let’s examine just how fitting the name Torpedo really is. Consider the explosive impact that the beer has had on the craft scene since its official debut in 2009: amid a plethora of IPA brands on the market, Torpedo has soared to become the number one selling IPA in off-premise retail accounts, according to IRI, a Chicago-based market research firm. The beer lands ahead of many well-known competing products, including Lagunitas IPA, Stone IPA and Dogfish Head 60 Minute IPA. Sales of Torpedo have been nothing short of spectacular, booming by over 50 percent in both 2011 and 2012, while sales are currently up 25 percent year to date in 2013. That’s not all. Launched in February 2012, Torpedo’s 16 oz. can package has proved to be a formidable addition as well. Last year, 4-packs of the brand accounted for over $1.2 million in supermarket sales, the sixth-highest total of all craft beer in cans sold in supermarkets, according to IRI.
DÉJÀ VU ALL OVER AGAIN.
Courtesy of the Can. Cans are endlessly recyclable. They’re also made with more recycled content than any other packages, and are the most recycled food and beverage container in the United States. Just a few of the reasons cans are the packaging material of choice for sustainability-conscious grocery and packaging professionals.
CANS: THE SUSTAINABLE & SMART SOLUTION Visit CanCentral.com/Sustainability to learn more.
Recently, we spoke with Joe Whitney, Sierra Nevada’s Director of Sales, about the development and growth of Torpedo and the impact of the brand on an overall increase in sales and distribution of Sierra products. Whitney also offered up details on the brewery’s foray into cans and why Sierra chose a 16 oz. format for Torpedo, as well as his take on the future of the package for the craft beer industry. We’ve condensed the interview into an edited question and answer format: Ray Latif: Sierra Nevada launched Torpedo about four and a half years ago, and the brand has consistently put up huge sales numbers for the brewery. To what do you attribute to the impressive growth? Joe Whitney: We’ve been a hop-forward brewery forever, and we had a lot of IPAs and double IPAs… but there was nothing year-round for people. And we developed Torpedo. [Sierra Nevada founder Ken Grossman] literally drew it up on a napkin at a meeting one day, and said “There’s
got to be a better way to dry-hop that better utilizes and expresses hop flavor.” Then we tested it out in the market and put it out there just because we had the liquid and wanted to see if people liked it, and people went crazy over it. Torpedo was sort of in and out of the market. We were testing the Torpedo device for about three years before we launched it. I think that sort of build-up created a fanaticism that when we actually launched it, we couldn’t keep up with demand the first year. That was happening on a national level; people [were] finally getting a yearround IPA from Sierra Nevada. At the same time there was an emergence of a lot of really successful and exciting craft brewers that just happened to [have] more hop-forward beers. Stone has been around for 10 or 11 years; Dogfish has been around longer than that. You think of a lot of the emerging and rock star brewers, they’ve been hopforward breweries. Russian River is there too, Lagunitas is there, and that’s kind of where the excitement in the category is. I
Sales of Torpedo have been nothing short of spectacular, booming by over 50 percent in both 2011 and 2012, while sales are currently up 25 percent year-to-date in 2013 think in part because a lot of people that have been drinking a lot of craft beer for a long time have kind of landed on IPA. RL: Over the past year, IPA has become the top-selling style for craft beer, and Torpedo is the fastest growing brand for Sierra Nevada. Can you speak to the convergence of the two? JW: What happens with your palate is that you get used to that [IPA] flavor profile; there’s just something about IPA that is just right. It’s a big, meaty beer that’s like “do you want steak or do you want fish?” The IPA drinker is the steak eater. In terms of the go-to kind of beer, most beer aficionados, that I know of, have landed on IPA and stayed there. Because once you get used to that flavor profile, you want that as part of your drinking occasion. RL: In January 2012, Sierra Nevada debuted a can package for Torpedo Extra IPA (as well as for its flagship Pale Ale). Obviously, the decision was a significant step for the brand. Can you explain the brewery’s mindset before and after launching the new package?
Ken Grossman, Founder of Sierra Nevada Brewing Co.
60 BEVNET MAGAZINE SEPTEMBER 2013
JW: We started talking to wholesalers, and they weren’t very excited about [cans]. The craft brewers that were in cans, outside of Dale’s, nobody was having good success. Even when big players, like Blue Moon, came out with cans, distributors
had a lot of confidence, and it didn’t perform that well. So we were a little gun shy. We [also] talked to people at bars, which is kind of where we happen to have focus groups. They said, “Quality beer in a can that’s an oxymoron. That can’t exist.” And it just never occurred to them that was a good idea, and it’s something that literally, you have to put it out there for people, and then they think about it and it’s nice when they’re drinking and talking and all of a sudden in a minute and a half somebody thinks, “well, wait a minute, this would be great for the lake or the mountains or the beach or whatever it might be.” It just wasn’t in their consciousness. I think one thing that really sold us was timing. Having those brands [Dale’s, etc.] out there first, got people used to the idea of craft in cans. People were predisposed to the idea of craft beer in cans… and we get e-mails from people saying that they’re exclusively drinking cans now. A lot of it is also mainstream domestic drinkers that have graduated their tastes, and now they’re craft drinkers. But, they like cans. It’s opened a new occasion, because those guys were drinking PBR (Pabst Blue Ribbon). Or they were drinking light beer because they’re sort of establishment kind of people. For example, if you go to a ski resort, PBR is kind of the beer. All of sudden you look and guys are tailgating at a mountain or a ballgame or whatnot and they’ve got craft beer, cause that’s what they’ve got when they go to the bar. But the occasion of “we’re going to have the barbeque” or be at the beach, had always been a PBR kind of occasion for them. Now they’re bringing good beer to those occasions, and it’s a boon for craft beer. RL: How did Sierra Nevada decide on the 16 oz. can format and 4-packs of cans for Torpedo? JW: So we thought there was a little bit of a risk doing cans in general, and we wanted to take a softer approach, which is why we only came out with two packages. There’s a lot of folks that have really hit the market hard with a lot of packages. And then also that combined with our
We think there’s an opportunity for cans. It was a little risky, and fortunately, it worked. I think we’re going to land somewhere in the middle between where imports have sort of languished for years – around 8 or 9 percent – and mainstream, which is around 50 percent. And 20 or 25 percent is a real doable number distributors not having good success with craft beer in cans, we had to pick the right packages and really support them well. Torpedo isn’t as big a volume product as Pale Ale. It’s a bigger beer in terms of alcohol and flavor profile. And we were kind of going back and forth between 6-packs of 12 oz., or single serve, or 4-packs. We really didn’t know. We just kind of took a chance. But, we were very careful not to put anything else into 16 oz. [cans], because we just wanted to have Torpedo get out there on its own and have its day. It seemed to be the right package. We’re pretty happy with how it went. RL: What’s been the impact of the Torpedo can for Sierra Nevada’s grocery and convenience store business? JW: We all of a sudden we’re able to get a new drinker in C-stores that we’ve never been able to touch with Torpedo. They really liked the cans. And I think that was a really neat thing, because a lot of those C-stores sell it as single-serve. The grocery guys tend to sell it as a 4-pack, and a lot of the C-stores prefer to do it as a single serve. And they’ve had really great success with it, which is something, truthfully, that we never even thought about when we were putting the package together. I think that just presented to a whole new drinker out there, which was really exciting to see. From a volume standpoint, it wasn’t as big as what we saw with 12-packs, but I think when you
look at long-term brand building, I think it was the biggest eye-opener. RL: Cans represent about 10 percent of Sierra Nevada’s overall sales. Do you foresee them becoming a more significant part of the brewery’s business? JW: I wouldn’t see it like mainstream domestics, where half of what they sell is cans. At the same time, if you look at imports, cans are less than 10 percent for those guys; it has been forever. So it’s really kind of an anomaly. When we were looking at the can scenario, you’ve got high-end beers that have been around forever [that] don’t do much can business, and consumers have really adopted that. Yet we think there’s an opportunity for cans. It was a little risky, and fortunately, it worked. I think we’re going to land somewhere in the middle between where imports have sort of languished for years – around 8 or 9 percent – and mainstream, which is around 50 percent. And 20 or 25 percent is a real doable number. The surprising thing for us about cans has been the number of on-premise accounts that have ordered cans. We had not expected to do any business on-premise. There’s been a fair number of on-premise accounts that have gotten excited about serving cans, and I don’t know if that was sort of the buzz that PBR created a few years back or what, but a lot of on-premise operators have jumped on cans. We don’t push it. They just hear about it and order them.
SEPTEMBER 2013 BEVNET MAGAZINE 61
WHERE Georgia World Congress Center, Atlanta, GA
WHAT National Association of Convenience Stores
NACS TRADE SHOW · ATLANTA, GA
WHEN Educational Programming Oct. 12-15 Expo Sunday, October 13 11:30 am – 5:30 pm Monday, Oct. 14 11:30 am – 5:30 pm Tuesday, Oct. 15 10:00 am – 2:30 pm
WHO 1,070 Exhibitors Including a Cool New Products Preview Room
KEYNOTE SPEAKERS Business Leader Chip Conley Sunday, Oct. 13 Former Sec. of State Hillary Rodham Clinton Tuesday, Oct. 15
SCHEDULE OF EVENTS
Saturday October 12 7:30 am - 5:30 pm Registration 10:00 am - 5:30 pm Cool New Products Preview Room (Retailers Only) 12:30 pm - 4:15 pm NACS Board of Directors/Retail Member Meeting 2:00 pm - 2:50 pm Educational Sessions 3:00 pm - 3:50 pm Educational Sessions 4:00 pm - 4:50 pm Educational Sessions
5:00 pm - 5:30 pm New Supplier Member Reception (ticketed event)
8:00 am - 5:30 pm The NACS Center
5:30 pm - 7:00 pm NACS Show Kick-Off Party (ticketed event)
9:00 am - 9:50 am Educational Sessions
Sunday October 13 7:30 am - 5:30 pm Registration 8:00 am - 8:50 am Educational Sessions 8:00 am - 11:30 am Cool New Products Preview Room (Retailers Only)
62 BEVNET MAGAZINE SEPTEMBER 2013
8:00 am - 5:30 pm NACSPAC Lounge
10:00 am - 11:15 am General Session (feat. Dave Carpenter with keynote Chip Conley) 11:30 am - 5:30 pm EXPO 11:30 am - 5:30 pm Cool New Products Preview Room (Open to All) 5:30 pm - 6:45 pm NACS Show Tailgate Party
Monday October 14 7:30 am - 5:30 pm Registration 8:00 am - 8:50 am Educational Sessions 8:00 am - 5:30 pm Cool New Products Preview Room 8:30 am - 10:30 am Exhibitor Advisory Committee Meeting 9:00 am - 9:50 am Educational Sessions 10:00 am - 11:15 am General Session: “Ideas 2 Go” (feat. Henry Armour)
11:30 am - 5:30 pm EXPO 5:30 pm - 6:45 pm Convenience in Motion — 2014 Launch Party Tuesday October 15 7:30 am - 2:30 pm Registration 8:00 am - 2:30 pm Cool New Products Preview Room 8:45 am - 10:00 am General Session (feat. Brad Call with keynote Hillary Clinton) 10:00 am - 2:30 pm EXPO
TRADESHOW PREVIEW ALPHABETICAL ATTENDEE LIST COMPANY
5-hour Energy (Living Essentials, LLC)
Fred Beverages, Inc.
Nestle Waters North America, Inc.
Frostie Root Beer
New Dutch Water Corp.
Alo Drink by SPI West Port, Inc.
NOS Energy Drink
Bai Brands LLC
OPREME Beverage Corp
Pabst Brewing Company
Bebida Beverage Company
Herbal Water, Inc.
Peace Tea Beverage Co
Berner Food & Beverage
iCON Energy Drink
BING Beverage Company
IMI Cornelius, Inc.
Boston Beer Company
In Zone Brands, Inc.
Red Bull North America
BYB Brands, Inc.
Relaxzen Life, LLC dba Body Works
C&C Cola USA
Innovative DisplayWorks, Inc.
Revolution Tea LLC
Campbell Soup Company
Insight Beverages, Inc.
Royal Buying Group, Inc.
Royal Cup Coffee
Iowa Rotocast Plastics, Inc. (IRP)
ITO EN (North America), Inc.
J. Growler, LLC
Continuum Packing Solutions
Jel Sert Company
SG Beverage Solutions, Inc.
Coolio North America
Jones Soda Company
Copa di Vino
Karma Culture LLC
Sunny Delight Beverages
Core-Mark International, Inc.
Killer Buzz Energy Drink
Sunny Sky Products
King Juice Co.
True Drinks, Inc.
Crown Imports LLC
Kraft Foods Group, Inc.
True Food Service Equipment
Turbo Air, Inc.
Leramo Coffee/Hudson Tea
Turkey Hill Dairy
DEFY by Consumer Health Brands, Inc.
Let it Fly Energy (L.I.F.E.)
Tweaker Energy Drink
Detour Nutrition Products
Limitless Smart Shot
United Brands Company, Inc.
Diamond Crystal Brands, Inc.
MET-Rx / US Nutrition
United Food Group
Dominion Liquid Technologies
United Juice Company
Dr Pepper Snapple Group
ViVa Beverages LLC
Dream Products, LLC
Minus Forty Technologies Corp.
E & J Gallo Wine Company
Monarch Custom Beverages
Eagle Beverage & Accessory
Monster Beverage Company
WIS - PAK
Eastland Food Corporation
Morrison Group Inc., The
Xing Beverage, LLC dba XingTea
Florida’s Natural Growers
National Beverage Corp
National Fruit Flavor Co., Inc.
Zumex USA, Inc.
SEPTEMBER 2013 BEVNET MAGAZINE 63
NATURAL PRODUCTS EXPO EAST · BALTIMORE, MD
WHAT Natural Products Expo East
WHERE Baltimore Convention Center 1 West Pratt Street Baltimore, MD
WHEN Education: Sept. 25: 8:30 a.m. – 7:30 p.m. Tradeshow Floor: Sept. 26 & 27: 10:00 am – 6:00 pm Sept. 28: 10:00 am – 4:00 pm
WHO More than 22,000 Natural Products industry members, including dozens of beverage companies, retail buyers, distributors and suppliers
KEYNOTE SPEAKERS Raj Sisodia, Ph.D., founder and chairman of the Conscious Capitalism Institute
ALPHABETICAL ATTENDEE LIST COMPANY
1907 New Zealand Artesian Water
ALKAZONE/Better Health Lab Inc.
ALO Drink by SPI West Port, Inc.
American Fruits & Flavors
Harney & Sons Tea Co
Penta Water LLC
Herbal Water/Ayala’s Herbal Water
Pyure Brands LLC
Baxco Pharmaceutical, Inc
Blue Buddha Beverages
High Country Kombucha
Blue Monkey Coconut Collection
Rob’s Really Good
Body Glove Surge
Rooibee Red Tea
Brands Within Reach LLC
In The Raw
Bruce Cost Ginger Ale
In Zone Brands, Inc.
Scheckter’s Organic Beverages INC
Bucha Live Kombucha
SIPP eco beverage co.
C2O Pure Coconut Water
Ceres Fruit Juices
ITO EN, LTD.
Jayone Foods, Inc.
Sunrise Brand Management
Coombs Family Farms
Dr. B’s Premium Microbrewed Tea
Dream Foods International
Kava King Products Inc.
drinkme Beverage Co.
Kombucha Wonder Drink/Tea Tibet
La Croix Sparkling Water
Elite Naturel USA LLC
Lakewood Organic Juice Company
Veri Organic Soda
Epicurean French Beverages
Vermont Coffee Company
LIVE Soda Kombucha
White Rock Beverage Company
Lochhead Vanilla Company
Wholesome Sweeteners, Inc.
Florida Crystals - Domino Foods Inc.
NUUN & U Natural Hydration
Zing Anything Inc.
64 BEVNET MAGAZINE SEPTEMBER 2013
FOR MORE INFORMATION VISIT: www.bevnet.com/events
SHOWDOWN DEC. 9 & 10 SANTA MONICA
SPONSORS & PARTNERS
Promotions, events and specials for the industry
Cheerwine and The Avett Brothers Retake the Stage for the Legendary Giveback II Cheerwine and Grammy-nominated indie rocker, The Avett Brothers, have announced the return of the Legendary Giveback, an evening of music to benefit family-focused organizations. The concert will take place on Thursday, November 14 at North Charleston Coliseum in Charleston, SC. Mirroring last year’s event, The Avett Brothers’ participation highlights the importance of giving back, the mission behind the initiative. The Legendary Giveback II will give fans living outside of the Charleston, S.C. region, another opportunity to attend the concert virtually by pledging hours of community service on the event’s website. In 2012, in addition to the fans who attended in person, more than 11,000 fans from 17 different countries were part of the Legendary Giveback event via the reach of Livestream. Proceeds from the Legendary Giveback II’s sales will aid three family-focused organizations, including a national nonprofit that provides services locally: Big Brothers Big Sisters, the nation’s largest donor and volunteer supported mentoring network; Operation Homefront, devoted to helping military service members and their families; and The Children’s Hospital of South Carolina at MUSC, which offers medical resources to children across the region. “It is important to us as a family owned-company to support family-related causes,” says Tom Barbitta, Senior Vice President of Marketing and Sales for Cheerwine. “Since we sold out last year’s venue, we look forward to giving even more to our nonprofit beneficiaries this year.” To promote Legendary Giveback II, Cheerwine will be placing six specially designed “Hidden Cans” by The Avett Brothers, inside select 12-packs throughout the Southeast. The individuals who find these “Hidden Cans” will win a $500 donation towards the charity of their choice, two tickets to the Legendary Giveback II concert and a year-supply of Cheerwine.
66 BEVNET MAGAZINE SEPTEMBER 2013
Jim Beam Honey On A Mission To Save Bees From A Serious Issue By “Suing” Bears
Jim Beam Honey, a new Kentucky Straight Bourbon Whiskey infused with real honey and liqueur, is distressed by the current plight of the honey bees. A condition called Colony Collapse is causing honey bees to die at alarming rates. Fewer bees means less honey. Something needs to be done. As passionate honey lovers and bee advocates, Jim Beam Honey has hired legendary “Seinfeld” attorney Jackie Chiles to “sue” honey’s other biggest fan – the bears. That’s right – it’s time for bears to cease and desist from their rampant honey theft. “Bears are egregious, devious, and just plain mischievous!” says Chiles, who has not represented a case since his “Seinfeld” days. “I’m here to go on the record – with Jim Beam Honey as my witness – to ensure that sweet, mouth-watering justice is served!” This frivolous fight – a legal first – is something everyone can join. Fans 21 years and over can follow Jackie Chiles in his quest to sue the furry foes by using the #suethebears hashtag on Twitter. While Jackie fights the bears, Jim Beam Honey is focused on saving the bees. For every Tweet using the #suethebears hashtag on Twitter, Jim Beam Honey will donate $100 to the Pollinator Partnership (up to $25,000). “We’re excited to raise a glass of our new Jim Beam Honey and to raise awareness for the bees’ plight,” said Halley Kehoe, Senior Brand Manager, Jim Beam. “We know that bears love honey, and based on the excitement we’ve seen around our new product, it’s clear that Jim Beam drinkers love it too.” Jim Beam Honey is also documenting every step and giving its fans the chance to follow along. Exclusive content will be released by Jim Beam Honey on Facebook, Twitter and YouTube along with a series of editorials on BuzzFeed. To support honey bees, Jim Beam Honey is funding research toward Colony Collapse Disorder through a donation to the Pollinator Partnership, the world’s largest nonprofit organization dedicated exclusively to the protection of pollinators.
NATURAL OOMPH FROM COCONUTS
The September 2013 issue of BevNET Magazine.