SEPTEMBER 1, 2016
AGING UP: HOW KIDS' BEVERAGES ARE MATURING
SUPER PREMIUM JUICE GOES MAINSTREAM
NACS & EXPO EAST SHOW PREVIEWS
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SEPTEMBER 2016 M
Contents • Volume 14 • No. 6
ON THE COVER
4 First Drop Perspective on the DARK Act
28 Juice: HPP Matures, But Sizes Shrink – Playing the Pricing Game Plus: The Lowdown on Lemonade with Juice Brand News
40 A Growing Controversy Defining Probiotics with Probiotic Brand News
6 Publisher’s Toast Barry Lite 22 Gerry’s Insights Dueling Bottler Philosophies
DEPARTMENTS 8 BevScape White Wave Buyout 12 New Products Coffee in Boxes and Jars
46 Kids Beverages All-Ages Innovation with Kids Beverage Brand News
SEPTEMBER 1, 2016
CONFERENCES 24 Expo East Back in Charm City
18 Channel Check Carbonation Counts
26 NACS Atlanta Awaits!
56 Promo Parade Wild Turkey’s McConaissance
52 IFT Review The Trends Behind the Tastes
AGING UP: HOW KIDS' BEVERAGES ARE MATURING
SUPER PREMIUM JUICE GOES MAINSTREAM
NACS & EXPO EAST SHOW PREVIEWS
8/22/16 2:06 PM
COVER PHOTO by iStock.com/GreenArtPhotography
54 Summer Fancy Food Show Review Bubbles and Coffee
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The First Drop
GMOs in Context
By Jeffrey Klineman
The Green Mountain Rebellion ended with a swipe of a pen. As a fan of chaos, it was fun while it lasted. But President Barack Obama has signed a law that kneecaps the Vermont rule, albeit one that requires food companies to let consumers know – either by label, symbol, or smartphone code on the package – if the product within contains genetically modified organisms (GMOs). After all the rhetoric, the results here – for all parties involved – are largely uninspiring. Labelling advocates have pretty much torn their hair out over this one: the Vermont Right to Know movement and the like that resulted in that state’s law and forced Congressional action represented, they say, a key step toward consumer choice through food transparency, and through that disclosure, a potential lever against industrial agriculture. Now they have to pivot. For manufacturers, there’s some convenience. The new law does avoid the mounting possibility of individual state requirements creating a patchwork overlay on food producers that could have forced them into satisfying a variety of different regulations. Shortly before the law went into effect, food producers were still scratching their heads about how they would satisfy the more rigorous onpack “Made With Genetic Engineering” requirements from the Vermont law while continuing to manufacture normally. But it’s still hard to decide who won here though: yes, food companies that use GMOs – about ¾ of the food in the country contains some form of GMO, largely through corn, soy, or even cotton (cottonseed oil) as an ingredient – won’t have to have that on-pack in some states. They can hide it behind a code, adding at least one barrier to disclosure, or two if you count my crappy cell reception at my local Target. At least temporarily, that helps larger food companies because consumers are super scared of GMOs right now (even if the fear isn’t in line with the threat, which, depending on who you ask, ranges from zero to instant colon cancer, with most of the scientific weight leaning toward zero). But what should be concerning for those companies and lobbyists that pushed so hard to keep the “GMOs 4 SEPTEMBER 2016 BEVNET MAGAZINE
Inside” label off-pack is that by moving to a mobile information platform, they’ve created a zone of infinite transparencies, where the presence of GMOs – relevant to consumers already – may be just a start. We’re already seeing those platforms used in a positive way: through mobile networks, companies like Red’s Best, a seafood supplier in Boston, are able to chart the origin of every fish they sell; there are also new mobile apps like Food Scores that demonstrate nutrition, ingredient, or processing concerns. With
nutrition data mining combining with the growth of online distribution services, there’s a good chance that the mobile web may very well make label reading something that’s done on the smartphone or computer screen instead of in stores. That is ultimately a path toward a more enlightened consumer state than where we are now – and I’m sad to say that even encompasses non-GMO advocacy, which has thus far grown by leveraging consumers’ fears of the unknown into market share rather than increasing consumer education. A rash of stories that followed the signing of the federal law seemed to square with this idea: consumers have been conditioned to respond to what’s on the pack, certainly
– but they don’t necessarily know what it stands for, and don’t always agree, either. At a time when on-pack labeling is hitting critical mass, the tag of non-GMO has been most effective in creating a market for those brands that are labeled that way. That doesn’t mean it’s headed off genetic modification overall. It’s hard to understand whether this is an achievement that will eventually play out well for the consumers that the nonGMO “Butterfly” logo is trying to shield. The growth of the non-GMO “butterfly” has come at the expense of increased competition for the USDA Organic seal – one that also ecompasses non-GMO. The confusion between standards is demonstrable in the number of brands that include both certifications on-pack because they know that consumers have been trained to look for both – even though that kind of double-seal setup is akin to advertising that a detergent removes dirt and odors... as well as odors. So how did this dilution occur? Part of it is marketing-based: organic has tried hard to become a positive label. In a food culture that has been groomed to look for “free-from” claims more than it has ingredient-positive ones, non-GMO, complete with its evil-sounding acronym, simply carries more weight with consumers (and, typically, a lower than organic price point). It makes me wonder whether the Organic Trade Association should push for its own label: “Non-Synthetic.” In the end, I absolutely side with the idea that has been expressed by the labeling exponents: people do, indeed, have a right to know what’s in the food they eat. I’m all for disclosure. And I’m also all for context. There are times when the location of the message is as important as the message itself: I’m not sure that this is one of those things that deserves top billing. It’s also not as if those brands that include non-GMO certification will lose out: the butterflys for most will likely remain a key purchase driver. What they risk by not pushing further on the consumer education end is that some other scare might take their place. It might not be on-pack, but a federal law on the books concerning the non-GMO mission shouldn’t be that cold a comfort.
How Sweet It Is!
By Barry Nathanson
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I’m about to turn 68 in two weeks, so I always wax nostalgic around this time of year. I grew up in the 50’s when life was simpler, people were kinder, and possibilities were endless. As I look at our culture, our politics, and our deep divisions, it makes me want to go back to better times. But that is for another time and place. After all, this column should be beverage-centric. I grew up with a soda deliveryman coming to my home, going into our garage, and stocking and refilling the wooden crates that housed 8 oz. glass bottles of Coke, 7UP and ginger ale. In addition, he provided entertainment, dropping off the spritzer bottles of seltzer that we loved to use as to spray each other. (It was either that or draw on the walls of the cave with bones. Those were our options). The industry evolved dramatically with the advent of PET bottles, different size formats, a myriad of new categories, and then really took a turn with diet versions of our favorites. As a purist at heart, and a jogger by avocation, I didn’t feel the need to drink a diet beverage to keep me slim – so they didn’t become a part of my life. Yet, for many years they became the mainstay of the industry. There were many times I had to imbibe diet drinks when the regular brands weren’t being offered. Honestly, I never liked them, could immediately taste the sweetener, and stayed away. 6 SEPTEMBER 2016 BEVNET MAGAZINE
When I got into the beverage industry, sampling drinks became a major component of the job. I tried thousands of brands in every category. Most never made it – justifiably so – but many created classics. Chief among the brands that I didn’t like were the diets. I could always taste those sweeteners. Everyone would tell me that they were just as good as the regular brands, but my palate knew better. I always stated that the Holy Grail for the industry would be to create low calorie, healthy beverages that also tasted great. We wanted a champion who would come along and mask that taste. Then, an amazing thing happened. There were champions around who took on the challenge and created great brands. They made beverages that were terrific, tasty, healthy and pleasing to my palate. So often I reach for a beverage in my office, not even thinking whether they were low calorie, artificially sweetened. They just tasted so good. There are now dozens of brands that fit the bill. The industry, over the past few years, has taken quantum leaps in creativity in formulation. Now the only criteria is taste, if there are other benefits, so much the better. We’re in a golden age for brands, much like the golden age I grew up in. I salute the innovators. But I do miss the spray guns.
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Danone, a global food and beverage conglomerate whose brand portfolio includes evian and Dannon yogurt, has agreed to acquire WhiteWave Foods, a manufacturer of plant-based and premium dairy products. Danone will acquire WhiteWave, which owns Silk, Horizon Organic
“This unique combination positions us better to address tomorrow’s consumer trends and represents a great opportunity to step change the ambition of our plan for an Alimentation revolution and to accelerate our path towards strong sustainable and profitable growth by 2020.” Danone CEO Emmanuel Faber said in the release. Since being spun off Dean Foods in 2012, WhiteWave has made several key acquisitions and investments to bolster its portfolio with brands in high-growth categories. In January, 2014, the company bought organic produce grower Earthbound Farm for $600 million, and eight months later paid $195 million for So Delicious, a maker of plant-based food and beverages. In January, 2015, WhiteWave made a $3 million investment in cold-pressed juice brand Daily Greens and later that year acquired Vega, which
and International Delight, among other brands, for $56.25 per share in an all-cash transaction, representing a total enterprise value of approximately $12.5 billion, including debt and certain other WhiteWave liabilities, according to a release issued by the two companies. The deal will nearly double the size of Danone’s North America footprint, increasing it from 12 to 22 percent of the company’s total portfolio and aligning it with several fast-growing brands focused on healthy and sustainable lifestyles. The acquisition of WhiteWave will also make Danone a leading manufacturer of refrigerated products in the U.S. and one of the 15 largest food and beverage manufacturers in the country. Amid sustained demand for organic, plant-based and dairy-alternative foods and beverages, WhiteWave sales have increased at a 19 percent compound annual growth rate from 2012 to 2015, and the company doubled its operating income during the period. WhiteWave reported a net profit of $168 million on revenue of $3.9 billion in 2015, according to The Wall Street Journal.
manufactures nutritional plant-based powder and snack bars, for $550 million. The company has also innovated internally, and recently entered the surging coldbrew coffee category with the launch of ST o¯ K, a new brand of RTD iced coffees. While it remains to be seen if Danone will embrace WhiteWave’s acquisition strategy, Mike Burgmaier, a managing director and co-founder at Whipstitch Capital, an investment bank focused on the consumer products industry, believes that it should be critical part of the company’s vision going forward. “My hope is that Danone recognizes how WhiteWave was built through acquiring fast-growth, emerging brands that are typically smaller than what Danone would buy on their own,” Burgmaier said. “And that they’re buying a mindset and an experience base about how you grow a company, identify trends and act on [them]. My hope is that Danone is going to continue that and continue it in a much bigger way. But time will tell what they choose to do, how they integrate it, and what the mindset is.”
Bevscape The latest news on the brands you sell
DEALTIME 1 Danone Buys WhiteWave
8 SEPTEMBER 2016 BEVNET MAGAZINE
DEALTIME 2 LifeAID gets KarpReilly Investment LifeAID, a functional beverage brand based in Santa Cruz, California, has completed its first capital raise outside of friends and family with an investment from private equity firm KarpReilly. LifeAID co-founders Aaron Hinde and Orion Melehan told BevNET the amount of the raise was in the “high seven figures.” “Building out our distribution and sales networks is an endeavor and we knew it would require an institutional partner to back us,” said Melehan. The duo went on to discuss how the investment came about, as part of the company’s ongoing move beyond the targeted, niche communities – Crossfit gyms, golf courses, music festivals – where it’s built a following into more conventional channels of distribution, including Vitamin Shoppe, Whole Foods and several Safeway/Albertsons divisions. “The plan was always to first build the consumer base and brand awareness in the on-premise market and dominate those niche channels,” said Melehan. “This raise will really help bridge the chasm between our niche communities and conventional.” “Instead of pushing our way into conventional we’ve gotten pulled into conventional,” added Hinde. “How is it we’re doing so well at H-E-B? Well, Crossfitters shop at H-E-B, golfers shop at H-E-B, the Burning Man community shops at H-EB. Our community is already intact and already shopping at these retailers and they’re demanding our product.” The company’s move into conventional retailers will also see the introduction of a more mainstream, less specialized addition to its product line. “This is a beverage people could easily swap out their daily diet soda habit for and then they’ll continue to have their FitAID with their fitness, and FocusAID at work when they need a pick-me-up, and PartyAID on the weekends,” said Hinde. For KarpReilly, its investment in LifeAID is the latest addition to a growing beverage portfolio. The firm has previously invested in Kevita and Spindrift, and in February of 2016, the firm announced its acquisition of Zola.
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Bevscape DEALTIME 3 Kash for Karma Karma Culture, the makers of dispensing-cap beverages Karma Wellness Water and Karma Probiotics, has completed a capital raise of $2.25 million. Company founder and CEO C.J. Rapp discussed the deliberately “modest” raise in a call with BevNET, saying the company raised the necessary funds to support its recent “Push For Better” marketing initiative alongside the recent launch of its Karma Probiotics line. “We wanted to stay in the realm of private investments from high net worth individuals to secure enough funding to accomplish our objectives for the foreseeable future, the next 12-18 months,” said Rapp. “The way we went about this was very deliberate.” To facilitate the raise, the company elicited the services of investment banking and advisory firm Green Circle Capital Partners, which closed two rounds for Karma in December of 2015 and June of this year. Stu Strumwasser, senior managing director at Green Circle and the former CEO of Snow Beverages, credited the company’s measured approach to raising capital. “C.J.’s approach to building Karma has been more traditional compared to some of the entrepreneurs we’ve seen enter the beverage space in the past 5-10 years, who’ve looked to raise loads of money from venture capital firms as early as possible,” said Strumwasser. “We saw that Karma had been extremely capital efficient, already had proof of concept, and that they were on their way to a sustainable business.” In discussing the recent introduction of Karma Probiotics, Rapp pointed to the emergence of and consumer demand for probiotic beverages, saying the line extension – which is already available at more than 8,500 retailers including Kroger, Fred Meyer, Harris Teeter, Fry’s, Fresh Market, Rite Ade and Meijer, among others – has the potential surpass the brand’s flagship vitamin-enhanced waters. “The timing of the launch comes at a point where the category is evolving and exploding and retailers are looking for highquality probiotic products,” Rapp added. “Having a shelf stable probiotic beverage is not only a real benefit to the consumer but it also opens up new forms of distribution and merchandising.” Rapp also discussed the licensing of the company’s Karma Caps, an emerging aspect of the business he says may soon extend beyond beverage. Currently licensed to pre-workout supplement company ProSupps and Canadian sports drink brand Biosteel Sports, Rapp indicated he’s been in discussions with multinational companies in the fields of pharmaceutical, chemical and agriculture regarding global applications of Karma’s proprietary cap technology. “[Before Karma] the dispensing cap space was still in its infancy, and a lot of the early stage players made use of what was available to them but it wasn’t perfected on a technical level, or the supply chain was complicated,” said Rapp. “We’ve brought it all in house. Our caps are made, filled, and assembled in a pharmaceutical grade clean room, and it’s all done first class.” 10 SEPTEMBER 2016 BEVNET MAGAZINE
CRAFT CROSSOVER Founders of Saint Archer Brewing Launch Villager Goods, a New Food and Beverage Platform Hoping to emulate the early success of his San Diegobased beer company Saint Archer Brewing, which was purchased by MillerCoors last September, entrepreneur Josh Landan is doubling down on the beverage business. Landan, together with current Saint Archer vice president Jeff Hansson, is preparing to launch Villager Goods, a line of food and beverage products backed by many of the same action sports figures who initially funded Saint Archer. Villager’s first product, a pasteurized and not-from-concentrate organic coconut water line that comes in three flavors — original, pineapple and chocolate — is slated to debut in August and will be sold in 500 mL Tetra Paks for $2.99 each. Sourcing and production of the Villager coconut water will be managed by the Celebes Coconut Corporation, based in the Philippines, he added. A forthcoming, non-coconut and still undisclosed food product is also being developed and the company plans to launch “extensions of the Villager brand” into other categories within the next six months. In addition to financial backing from Landan and Hansson, Villager has about 20 action sports investors who will also serve as brand ambassadors. Many of them, including popular pro skateboarders Paul Rodriguez and Mikey Taylor, also backed Landan’s first beverage project, Saint Archer Brewing. Villager has also hired Jason
Schwenk, a former sales director at both Red Bull and Noho, as its new vice president of sales. For those familiar with Saint Archer, the Villager pitch will feel eerily similar. Visitors to villagergoods.com are greeted by a 2-minute video set to an indie musical track and featuring a plethora of surfers and skaters, medium close ups of the individual action sports investors themselves, and plenty of establishing shots that let you know the brand is headquartered near the beach. Landan, a filmmaker by trade, took virtually the exact same approach when he launched Saint Archer in 2013, though he swears Villager is not simply a carbon copy attempt at conquering an already crowded coconut water category. “Having a brand, a story and a product that people connect to and are drawn to is something that we wholeheartedly believe in,” Landan said. “There has never been a healthy, authentic, nonalcoholic option that has come from these athletes.” By that, Landan means a non-alcoholic brand that those action sports athletes actually own a stake in, as opposed to simply endorsing. Six athlete-investors — Paul Rodriguez, Pat Moore, Jack Freestone, Alana Blanchard, Laura Enever, Nate Tyler — left “major endorsement deals” with the likes of Mountain Dew, Red Bull, Rockstar and Monster to become owners and ambassadors for Villager, Landan said.
LEGAL Blue Moon Lawsuit Tossed It took about 14 months, but a California judge has finally tossed aside a class action lawsuit against MillerCoors LLC that alleged the beer company was deceptively brewing and marketing its Blue Moon Brewing line of craft products. U.S. District Court Judge Gonzalo Curiel granted MillerCoors’ motion to dismiss the case after the company argued that Evan Parent, a homebrewer, beer aficionado and plaintiff listed in the suit, was unsuccessful in demonstrating that MillerCoors had misled consumers through its advertising and positioning of Blue Moon as a craft beer. Parent had accused MillerCoors of violating California’s Consumer Legal Remedies Act and suggested that the company was intentionally trying to trick consumers into purchasing a “craft beer” made by a smaller brewery. Parent had pointed to a series of video advertisements posted to the Blue Moon YouTube channel and alleged that MillerCoors attempted to “falsely represent that Blue Moon is brewed by a small,
independent craft brewery, rather than the second largest brewing company in the United States,” according to the lawsuit. In its efforts to tell the story of Blue Moon via the online ads, however, MillerCoors did not explicitly state where its beer was brewed or how large batch sizes were. It also stopped short of describing the Blue Moon products as “craft beer.” “At best, these advertisements contain generalized, vague, and unspecified assertions that amount to mere puffery upon which a reasonable consumer could not rely,” Curiel wrote in his decision. In his suit, Parent had also claimed that MillerCoors “requires retail establishments to stock Blue Moon among the craft beers,” and that it instructs large chain retail establishments as well as sporting and concert venues to “falsely advertise” Blue Moon as a “craft beer.” The judge, however, found that MillerCoors was not liable for the third party.
BEVNET MAGAZINE SEPTEMBER 2016
New Products The newest options for cooler and shelf
Coffee Mason Cold Brew Coffee is sold in resealable Mason jars and comes in four flavor varieties: original, vanilla, lavender and mint. Made with organic, single-origin and fair trade coffee beans, the drinks are brewed and bottled in Los Angeles. They are produced using a unique infusion process to subtly complement the coffee with a hint of natural flavor and real ingredients, including organic lavender buds, vanilla beans and mint leaves. This process draws out more complex flavors from the beans, and avoids the usual bitterness and acidity typically associated with coffee, according to the company. The products are available in 12 oz. jars for a suggested retail price of $5 and sold at select retailers in the Los Angeles area. For more information, please call Mason Cold Brew at (323) 457-3597. Chameleon Cold-Brew has launched two new products. The company’s Texas Pecan Coffee Concentrate is an ode to the brand’s hometown of Austin and offers a nutty aroma that balances the bold brew for a smooth coffee experience, according to Chameleon. It is made with filtered Texas Hill Country water, organic and ethically sourced 100 percent Arabica coffee, and natural pecan flavor. Each 32 oz. glass bottle retails for $9.99-$10.99 and contains eight servings. Chameleon’s new Bag In Box is designed to be a convenient and cost-effective vessel of high-quality cold-brew. It offers 32 servings of organic black coffee concentrate and retails for $25. For more information, please call Chameleon at (512) 323-0345. Marley Beverage Company has introduced a revamp of its One Drop Premium Coffee line. The beverages are made with Marley’s Jamaican coffee blend, pure cane sugar, rBGH hormone free milk, and natural flavorings. New flavors include Swirl and Banana Split, both of which are designed to be reminiscent of childhood indulgences at the local ice cream parlor. The products contain 37-41 g of sugar and 220-240 calories per 11 oz. can, depend-
12 SEPTEMBER 2016 BEVNET MAGAZINE
ing on variety. The coffees have a suggested retail price of $2.49 and are sold nationally. For more information, please call Viva Beverages at (248) 746-7044.
Functional Beverages Just C, Inc. has launched ARYA Curcumin+ Beverages. Curcumin, the bioactive ingredient in turmeric responsible for its yellow color, is promoted by the company as a natural antioxidant and anti-inflammatory ingredient. The drinks are made with natural ingredients and come in four flavor varieties: Citrus, Lemon-lime, Mixed Berry, and Tropical. ARYA products can be found in many Southern California retailers including Gelson’s Supermarkets, Clark’s Nutrition, ampm, LA Fitness, Bristol Farms and Vitamin Shoppe. They retail for $2.49-$3.49 per 12 oz. can. For more information, please call VPR Consulting at (310) 985-1709. Verday has extended its Chlorophyll Water line with a new coconut-flavored variety. Like all Verday drinks the new product contains 100 mg of chlorophyll and has no calories. It is made with no preservatives and is non-GMO, vegan and gluten-free. Verday drinks are available in metro New York and a have a suggested retail price of $3.99 for a 16 oz. bottle. For more information, please call Verday at (410) 271-3000 Soda Pop is a ginger-based drink created by musician Les Claypool as a way to help with motion sickness. It is made with ginger, chamomile and a blend of other traditionally calming herbs. The soda is intended to be soothing for the stomach and a well-balanced and refreshing beverage with a taste that resembles a ginger snap dipped in vanilla ice cream. The product has a suggested retail price of $2.99 and is sold in Sonoma County. For more information, please call SeaPop Beverages at (707) 861-9358.
CSDs PepsiCo has introduced new 12 oz. glass bottles for its Stubborn Soda line of craft sodas. The line comes in five flavor varieties: Black Cherry with Tarragon, Orange Hibiscus, Agave Vanilla Cream Soda, Classic Root Beer and Lemon Berry Acai. Each is made with fair trade certi-
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New Products fied cane sugar, stevia and natural flavors and has 90-100 calories per bottle. They contain no high fructose corn syrup or artificial sweeteners. The sodas are distributed nationally and retail for $1.99 for a single bottle and $5.39 for a 4-pack. For more information, please call PepsiCo at (914) 253-2000.
well as in Whole Foods Market Midwest-area stores, and Sprouts Farmers Market locations. For more information, please call Hain Celestial at (516) 587-5000.
SOBE has introduced two new varieties to the brand’s lineup. Midnight Mojito features blackberry flavor paired with mint. En Fuego is made with lime flavor and a bit of heat. Both products are available at retailers nationwide. Prices vary by market. For more information, please call PepsiCo at (914) 253-2000.
INVO Coconut Water has launched a new organic variety. INVO Pure: Organic is certified USDA organic, vegan and gluten-free. Packaged in 16 oz. bottles, the drink contains five essential electrolytes, as much potassium as one banana, is low in sugar and 99 percent fat free. The product undergoes high pressure processing. It has a suggested retail price of $4.79. For more information, please call INVO at (415) 920-1755.
Marley Beverage Company has revamped its line of relaxation beverages. Mellow Mood Relaxation Drinks come in five decaffeinated teas and three sparkling waters, each made with herbs, including chamomile, valerian root, and passion flower. Tea varieties include Peach Raspberry Black Tea, Raspberry Tea Lemonade Low Calorie, Peach Raspberry Black Tea ZERO, Honey Green Tea, and Bartlett Pear Black Tea ZERO. The line of Mellow Mood Relaxation sparkling waters includes Mixed Berry, Lemon Citrus and Mango. The waters, along with the two zero-calorie teas, are sweetened with a blend of erythritol and stevia. They are priced at $1.99 per 15.5 oz. can and distributed nationally. For more information, please call Viva Beverages at (248) 746-7044.
Living Essentials, LLC, the distributor of 5-hour ENERGY shots, launches the new 5-hour ENERGY Protein shot nationwide. Each shot has 21 grams of protein and also contains B vitamins and caffeine. Available in four flavors – Berry, Peach Mango, Grape Extra Strength, and Berry Extra Strength, each 6 oz. bottle contains 100 calories and less than one gram of sugar. The Regular Strength retails for $3.99; Extra Strength varieties are $4.29. For more information, please call Living Essentials at (248) 960-1700.
Kombucha BluePrint has launched a new line of kombucha drinks. The USDA certified organic beverages are made with cold-pressed juice and fermented tea. The line consists of four varieties: Kale-a-lu-ya, Miss Tang, Raise the Roots and Sweet Heat. Each has a suggested retail price of $3.49 per 14 oz. glass bottle. The drinks offer a number of functional benefits, including digestion aid and immunity, according to the manufacturer. The products are available at Whole Foods Market and local retailers in the New York Tri-State area, as 14 SEPTEMBER 2016 BEVNET MAGAZINE
Progressive Adult Beverages MillerCoors is expanding its Henry’s Hard Soda offerings to include Henry’s Hard Cherry Cola. Now available on shelves nationwide, the beverage joins the rest of the Henry’s family of flavors, Henry’s Hard Ginger Ale and Henry’s Hard Orange Soda. At 4.2 percent ABV, the new product is made with cane sugar and features a refreshing cherry cola flavor with a subtle hint of almond taste, giving it a distinctive twist from Henry’s other two flavor offerings, according to the manufacturer. Henry’s Hard Soda is available nationwide at most grocery, liquor and convenience stores in 6-packs of 12 oz. bottles and 16 oz. single cans. For more information, please call MillerCoors at (312) 496-2700.
MillerCoors has introduced Easy Tea Co., a brand of lightly-carbonated hard iced teas with a crisp citrus flavor. The teas contain 5 percent ABV and are sold in 24 oz. cans. They are available at select liquor and convenience stores in Connecticut, Delaware, Kentucky, Maine, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Rhode Island, Vermont and Wisconsin. For more information, please call MillerCoors at (312) 496-2700.
Wine HobNob Wicked Red Blend is a limitededition wine that will appear on shelves this fall just in time for Halloween and Day of the Dead festivities. It is a blend of Grenache, Cabernet Sauvignon, Syrah and Pinot Noir. The bottle’s label features an image of a sugar skull. HobNob is also releasing a new Chardonnay, which comes with a similar label design. The white wine is made with 100 percent California Chardonnay grapes and is 13 percent ABV. Both
wines have a suggested retail price of $11.99. For more information, please call Deutsch Family Wine & Spirits at (203) 965-4100. Terlato Wines has launched two of its Seven Daughters wine varieties in cans. The brand’s Moscato Veneto and Pinot Noir are now available in 250 mL cans. Each can contains the equivalent of two 4.2 oz. glasses of wine. They are sold in 4-packs and have a suggested retail price of $14.99. For more information, please call Terlato Wines at (847) 604-5825. Integrated Beverage Group (IBG) has launched Replica wines, a line of products designed to offer the essence of consumers’ favorite wines with retail prices that are 25-50 percent lower. Using sophisticated science and proprietary, patent-pending methodology, IBG has analyzed the taste and aroma profiles of thousands of wines over the past four years. The data gained and the artisanal skills of its team of award-winning winemakers were then harnessed to reverse engineer
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New Products today’s most popular wines, creating Replica. IBG has partnered with Ellipse Analytics, an independent, ISO 17025 accredited analytical chemistry laboratory, to identify more than 50 specific flavor and aroma profiles in each wine. The company’s winemakers use this data – and classic blending techniques – to create wines that taste virtually identical to popular national brands, but retail for as much as half off. The wines retail for $11-$25, depending on variety, and are available nationwide. For more information, please call IBG at (866) 850-3321.
Distilled Spirits El Consuelo is new line of organic tequila available in three varieties: un-aged Blanco; Reposado, aged for six months; and Añejo, aged for 12 months. El Consuelo is created with blue weber agaves sourced from Jalisco in the Mexican region of Tequila, a region with unique climatic characteristics that yield a larger, fruitier agave, according to the manufacturer. The Reposado and Anejo are both aged in Cognac barrels. The tequila is organic, kosher and gluten-free. Each expression is 80 proof. The Blanco retails for $49.50, the Reposado sells for $54.50 and the Añejo is priced at $59.50. They are available in New York, New Jersey, California and Florida. For more information, please call 24-Group PR & Marketing at (917) 626-4769. The Revivalist Gin is a new “grain to bottle” collection of four innovative and handcrafted expressions: Equinox, Summertide, Harvest, and Solstice. The gins make up the inaugural portfolio of small batch spirits from new micro distillery enterprise, Brandywine Branch Distillers, located in Pennsylvania’s bucolic Chester County. Each gin is made with a foundation of juniper, angelica and coriander. The subsequent addition of widely varying botanical combinations is what achieves the four distinct expressions: Equinox has notes of citrus mélange, a touch of mint and meadowsweet and hyssop to finish; Summertide whispers of jasmine, rose, meadowsweet and cooling citrus; Harvest offers tastes of lemon, nutmeg, cinnamon, elderflower, orange and clove; and Solstice exhibits infusions of dried cherry, anise, orange peel and ginger and is rested in
16 SEPTEMBER 2016 BEVNET MAGAZINE
French oak barrels that were recently emptied of red wine varietals. The spirits are available in Pennsylvania and liquor stores in major national markets. They have a suggested retail price of $39.99-$49.99. For more information, please call Brandywine Branch Distillers at (610) 844-6963. Aberfeldy 16 and Craigellachie 17-YearOld are the newest expressions added to John Dewar & Sons’ single malt portfolio this fall. Aberfeldy 16 presents a new version of the classic highland-style malt, offering a taste more mature than the already popular 12-yearold with a little less body than the coveted 21-year-old, according to the producer. Craigellachie 17 is produced in old-fashioned worm tubs, adding extra flavor. The new spirits will be available in luxury liquor stores throughout the U.S. Aberfeldy 16 retails for $89.99 - $90 while Craigellachie 17 retails for $144.99 - $145. For more information, please call Bacardi Limited at (305) 573-8511. Alacran Tequila has released Alacran XA, an extra añejo tequila. It is made using 100 percent Weber Blue agave from 7-10 years old harvested in the highlands of Los Altos in Jalisco. The spirit is matured for 40 months in American oak barrels that previously held bourbon. Each 750 mL bottle is hand labeled and numbered. The tequila retails for $49.99 and is sold at lounges, high-end restaurants and stores across the U.S. For more information, please call Tamara York Public Relations at (212) 967-8300. Black Button Distilling has released 20 Plate Vodka. The new vodka, made in a hybrid still, replaces Black Button Wheat Vodka, the distillery’s very first spirit, released four years ago. Distilled to 180 proof through Black Button Distilling’s four plate whiskey column, 20 Plate Vodka (80 percent wheat, 20 percent malted barley) is then reduced back to 120 proof and run up the 16 plate vodka column to 192 proof. This two-step process creates an ultra-smooth vodka that needs minimal filtering, according to the company. The vodka is distributed in the Northeast and Mid-Atlantic and retails for $35. For more information, please call Black Button at (585) 730-4512.
Channel Check What’s HOT & what’s NOT in stores now
Bubbles ‘n Stuff SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 7/10/16
Soda might be on the wane, but a look across three categories that feature carbonation shows that bubbles have more to them than just airy imagination. In canned juices, Kickstart might be slowing a bit, but the renewed strength of San Pellegrino’s carbonated drinks and the introduction of Bai’s Bubbles line shows that there’s strength in fizz for both legacy and new brands alike. Taken from an entire category perspective, sparkling juice brands are up across the board, even though they represent venerable products like Welch’s, Martinelli’s, Izze and Orangina. Finally, speaking of venerable, look at the way that Polar Seltzer has ridden the rising tide to become one of the five best-selling brands in the country. Also of note: Topo Chico is on the rise, while Sparkling Ice and La Croix continue to grow.
CANNED JUICE DRINKS Brand
Mountain Dew Kickstart
V8 V Fusion Plus Energy
SPARKLING JUICE Brand
Orangina Minute Maid
Change vs. year earlier
Sparkling Ice Lemonade
SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 7/10/16
18 SEPTEMBER 2016 BEVNET MAGAZINE
Change vs. year earlier
Martinellis Gold Medal
RW Knudsen Family
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Change vs. year earlier
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Channel Check BOTTLED WATER Brand
DOMESTIC BEER Change vs. year earlier
Change vs. year earlier
Nestle Pure Life
Glaceau Smart Water
Michelob Ultra Light
Glaceau Vitamin Water
Miller High Life
ENERGY DRINKS Brand
CRAFT BEER Change vs. year earlier
Change vs. year earlier
Red Bull Sugar Free
Monster Zero Ultra
Monster Lo Carb
ENERGY SHOTS Brand
TEA Change vs. year earlier
Change vs. year earlier
5 Hour Energy
Stacker 2 Xtra
Lipton Pure Leaf
Stacker 2 Extreme
Stacker 2 6 Hour Power
AriZona Arnold Palmer
SPORTS DRINKS Brand Gatorade Perform
Dollar Sales $3,274,706,944
CAPPUCCINO Change vs. year earlier 0.48%
Change vs. year earlier 12.91%
Starbucks Doubleshot Light
Starbucks Frappuccino Light
Gatorade G2 Perform
Powerade Zero ION4
SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 7/10/16
20 SEPTEMBER 2016 BEVNET MAGAZINE
Gerry’s Insights By Gerry Khermouch
It may not rank up there with capitalism vs. socialism, or even Red Sox vs. Yankees, but over the coming years a significant clash of worldviews will unfold that’s of relevance to anyone in beverages. I’m referring to Coca-Cola’s push to refranchise its North American bottling system – the so-called red system – even as its archrival PepsiCo stands pat on owning and operating the bulk of the blue system. The accelerating progress that Coke is making in assigning territories to existing and new partners garners some routine coverage these days, but not much is being written about the broader clash between this and Pepsi’s stand-pat stance. Let’s recall the history of this developing clash: PepsiCo made the first move, agreeing to acquire its two biggest North American bottlers, Pepsi Bottling Group and PepsiAmericas, in 2009. (PBG had been spun out of PepsiCo a decade earlier.) Coca-Cola’s CEO, Muhtar Kent, for his part, insisted he was perfectly happy with the franchise system – only to turn around early the following year and notch a deal to acquire Coca-Cola Enterprises’ North American bottling operations. At the time, two theories reigned: either Coke had changed its mind, or the company had simply been duplicitous about its intentions all along. My own hunch was that Coke simply saw a chance to rewrite an archaic contract that restricted such simple expedients as, say, shipping casepacks of cheap Dasani bottled tap water direct to retailers, then get the business back out into private hands under a new set of rules more in tune with the complexities of today’s retail scene. In other words, as stated, Coke never stopped believing in the franchise system; this was just a bit of expensive disruption on the way to attuning the system to the needs of the 21st Century. That’s duly how things have played out, albeit with a fair amount of improvisation on Coke’s part: it’s accelerated its initial timetable for North American re-franchising, aiming to get it all back in private hands by the end of next year, and it’s also backed off a plan to reserve manufacturing rights to itself. Of course, some divergences from plans were to be
22 SEPTEMBER 2016 BEVNET MAGAZINE
Red vs. Blue: A Philosophical Treatise on Bottling expected in the give-and-take of complex negotiations with bottling partners, who might have been expected to argue hard to retain the bottling activities that have always been a core competence. There’s less to say about Pepsi: it’s continued to stand pat with its strategy of owning its distribution. So that leaves us with a pretty fundamental contrast in how the two biggest beverage companies go to retail. In Pepsi’s view, controlling its own distribution allows for seamless integration, putting everyone
the bottlers’ priorities because Pepsi and the bottlers are one and the same. Coke, by contrast, is opting for creative tension, though it never employs that phrase. It’s betting that putting its brands in the hands of agile, independent businesspeople will eliminate the bureaucratic sclerosis that has characterized Coca-Cola Refreshments, as its in-house bottling arm is called. Implicit is a notion that the routine friction that comes of working with feisty independent bottlers is a productive way to hash out the most productive strategies
Coca-Cola CEO, Muhtar Kent, Highlights Long-Term Growth at Annual Meeting of Shareowners
in the system on the same page and keeping the gears tightly meshed in executing strategy (eliminating backlash, engineers would say). Its CEO, Indra Nooyi, has argued that this will foster innovation, as the company will reduce resistance to new brands from independent bottlers who’re more inclined to focus on their go-to brands with the highest velocity and the biggest drops. PepsiCo’s priorities will be
and tactics. Also unstated, but I think real, is a recognition that having ownership of your business rooted in the community will amplify your voice in local and state debates over the marketing and sales of sugared beverages. And of course, in getting a sizable chunk of hard assets off the books, Coke returns to its traditional asset-light model of being a branding and marketing specialist. Presumably, the markets appreciate that.
Personally, I’m with Coke on this one, though it’s way too early to call any winners or losers yet. The company is going with more contiguous, regionally congruent footprints, and a mix of both proven incumbents like Coca-Cola Consolidated and Coca-Cola Swire and hungry newcomers, notably the MillerCoors giant The Reyes Group, which has developed a superb reputation for execution in beer distribution. There seems little question that Coke’s two superb Latin American partners, Coca-Cola FEMSA and Arca, will get roles, perhaps in Hispanic-heavy regions like the Southwest and Southern California. Why do I think this works? Just as having friendly competitors to my newsletter over at BevNET encourages me to make a few extra phone calls each week, I think that tension between concentrate supplier and independent bottler forces each to stay on its game. Coke knows outside bottlers may push back on much of what it proposes, but seems to accept that this should make for a healthy debate. Less clear is the role of outside brands, though I kind of hope Coke is enlightened enough to allow these partners to serve as incubators for new segments and products that seem to be connecting with local consumers while keeping the pressure on Coke to engender its own innovation pipeline. There’s nothing like the knowledge that a bottler might go elsewhere to encourage a bias toward action among the innovation teams. It’s certainly too early to conclude Pepsi’s strategy isn’t working, though. Like Coke, it’s been doing OK eking out a modicum of growth and price realization in a U.S. market where all core CSDs are in decline. So maybe maintaining a tight grip on bottling and distribution will prove to be the right strategy. If it isn’t, there’s nothing to stop Pepsi from embarking on its own refranchising initiative down the road. I’ve been a bit surprised, though, that activist investors like Nelson Peltz have chosen to attack the company for its Power of One strategy of melding beverages and foods, rather than addressing the liabilities of a bottling strategy that keeps all those assets on the books and
has the potential to distract Pepsi from pursuing its core marketing competency. There are two more wild cards, Dr Pepper Snapple Group stressed the need to strengthen its white system to be a more credible alternative to the red and blue systems, but arguably it blinked when Coke and Pepsi moved to acquire their bottlers. At that point, given changeof-control provisions embedded in its contracts, DPS could have reclaimed blue-chip brands like Dr Pepper and Crush to fortify its system’s retail clout. Instead, DPS cashed big checks from Coke and Pepsi, in deals that did much to enrich shareholders but departed from the stated strategy. That has kept the white system a distant number three, though it has strengthened some areas like Florida, and can count among its independent distributors such formidable houses as Honickman Group, Kalil and Polar. There’s also Anheuser-Busch InBev. The beer behemoth has long maintained a skeptical stance toward non-alcoholic beverages, (an earlier foray under the rubric Ninth Street Beverages was aborted once A-B lost its independence). But things have changed: the company is now run by Brazilians who cut their teeth in a market where beer and soda sit comfortably on the same trucks. The company recently struck a partnership with Starbucks to jointly market Teavana iced teas, starting next year, and a venture arm called Zx has been beating the bushes for emerging brands on both the alcoholic and non-alcoholic sides. So A-B seems to be gearing up to make another run at NAs. Meanwhile, to win government approval for its merger with SAB Miller, ABI has agreed to cap its company-owned distribution at no more than 10 percent of domestic volume. That nets out as another strong independent distribution network that could prove an increasing force in NA beverages. It all makes for a really intriguing distribution landscape in the coming years, if not a case study in geopolitics and sports.
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www.morretec.com BEVNET MAGAZINE SEPTEMBER 2016 MORR_18922 Beverage Ad BEVNET PREP.indd 1
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Natural Products Expo East 2016 Preview
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ALPHABETICAL EXHIBITOR LIST Exhibitor
ALKAZONE/Better Health Lab Inc.
ALO Drink by SPI West Port, Inc.
ASI Yaupon Tea
Bonafide Provisions Bone Broth
Boxed Water Is Better LLC
Bramo Coffee, LLC
Brew Dr. Kombucha
Bruce Cost Ginger Ale
Bruce Cost Ginger Ale
Exhibitor Coffee Blocks
GURU Beverage Co.
Diana Far Away Exports
Harney & Sons Tea Co
Harvest Soul, LLC
Hatch Brands, LLC
EJZ Foods, Inc/Sap on Tap/Evolve Kefir
Califia Farms LP
Essentia Water, LLC.
Caribe Exotic Juice CO
ICONIC - Natural Protein Drink
Bai Brands, LLC
CARPATHIAN SPRINGS S.A.
BAO Food and Drink
Ceres Fruit Juices
Bare Bones Broth Co.
Five Star Foodies
Cham Cold Brew Greek Tea
INVO Coconut Water
Big Bang Beverages
Chameleon Cold Brew
Garden of Flavor
BlackMP Living Water
Champion A3, LLC
GoodBelly by NextFoods
ITO EN (North America), Inc.
Jax Coco USA LLC
24 SEPTEMBER 2016 BEVNET MAGAZINE
Jindilli Beverages, LLC
Juice from the RAW
Karma Wellness Water
Redwood Hill Farm & Creamery, Inc.
Kate Farms, Inc.
Kava King Products Inc.
Reliant Hydration Inc.
Kettle & Fire Bone Broth
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Lifeway Foods, Inc.
Sipp Sparkling Organics
Lotus Elixirs North America
SIS NATURAL CJSC
Love Beets USA LLC
Madrinas Coffee Mamma Chia
Smart Juices LLC
Sound Sparkling Tea
Sparkling ICE Essence of Water
Spindrift Beverage Co
Sri Lanka Gold
Manjoor Estate Beverages, Inc.
MetaBrand Corp LLC/I AM Enlightened Creations
Minta Beverages Inc
Taste Nirvana Int'l Inc.
Mocktail Beverages Inc.
The Pickle Juice Company
N.O. Brew Iced Coffee
Trickling Springs Creamery
Norwegian Glacier Water NA Corp
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BEVNET MAGAZINE SEPTEMBER 2016
NACS 2016 Preview
Georgia World Congress
More than 100
of Convenience Stores
Center, Atlanta, Ga.
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Oct. 19: 11:30 a.m. – 5:30 p.m.
brands and approximately
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Oct. 21: 9 a.m. – 1:30 p.m.
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E & J Gallo Winery
6 Hour Sleep
Envies Flavor Shots
Essentia Water LLC
Alo Drink by SPI West Port, Inc
La Colombe Coffee Roasters
Marley Beverage Co., LLC
Monarch Custom Beverages
MOONSHINE SWEET TEA
Exhibitor Sierra Nevada Brewing Co.
Spa Springs Mineral Water
Stout Brewing Co., LLC
Stratus Group Beverage Co.
Evian-Danone Waters of America
Avitae USA, LLC
Florida Caribbean Distillers
Forto Coffee energy shot
Niagara Bottling, LLC
Sunny Delight Beverages Co.
Frutos de Vida
North American Breweries
Sunny Sky Products
Boxed Water Is Better
North Shore Bottling
The Boston Beer Company
Brands Within Reach
Geloso Beverage Group LLC
The Coca-Cola Company
Bruce Cost Ginger Ale
The Kraft Heinz Company
Buddha Brands Co.
Ocean Spray Cranberries, Inc.
True Drinks, Inc.
C2O Pure Coconut Water
Heineken USA, Inc.
Pabst Brewing Company
Tweaker Energy Drink Co.
Unique Beverage Co.
Campbell Soup Company
Unique Energy Drink
High Brew Coffee
Premium Waters, Inc
HYPE Products, LLC
Push Beverages/Tribe Tea
Javo Beverage Co., Inc.
Red Bull North America, Inc.
Dr Pepper Snapple Group
Jel Sert Company
Dr Pepper Snapple Group
Dream Products, LLC
Keurig Green Mountain
S & D Coffee & Tea
Dunkin' Donuts and Baskin-Robbins
26 SEPTEMBER 2016 BEVNET MAGAZINE
VOSS Artesian Water
Wai Koko Coconut Water
Zymbom Energy Drink
Cold-pressed juice is still a work in progress. The success of super premium juice in recent years has prompted the category’s movement from the natural and specialty channels into conventional retailers. The mission, of course, is to bring these highquality, high pressure processed (HPP) juices to the masses. But the question of how far from Manhattan and Los Angeles can $8 juice go still remains. If the answer’s not very far at all, then what’s the sweet spot in pricing for HPP juice, and what will it take to get there? For category leader Suja, which has long proclaimed its goal to be the democratization of organic juice, its move into the mainstream has been behind its “Essentials” line, launched in 2014, which has brought the price of its product from the $5.99 - $7.99 range of its “Classics” down to $3.99.
28 SEPTEMBER 2016 BEVNET MAGAZINE
It’s found increasing traction in mainstream accounts. Upon the announcement of the Coca-Cola company’s investment in Suja in August of 2015, CEO Jeff Church told BevNET the company was on pace for sales between $70-80 million that year. According to multi-outlet sales data from Chicago-based market research firm IRI, Suja recorded $30 million in sales in the conventional channel in the 52-week period ending July 10, 2016. What’s still not clear is the overall interest the brand will have as a repeat purchase for conventional consumers. Getting Suja’s price down has been achieved by vertical integration (bringing HPP in house), its alliance with a large CPG (Coca-Cola), but also by way of smaller sizing (16 oz. to 12.5 and 10 oz. options) and more fruit-forward (less expensive) juice blends. But are packag-
ing shrinks and cheaper ingredient profiles making the super premium product less premium? “That’s the challenge a lot of these brands are facing,” says Brad Barnhorn, a longtime investor and advisor in the natural food and beverages space. “How do you preserve what made the category truly unique and what made these products great while having price points that are movable into new channels?” Of course that’s not a situation that’s unique to Suja - or HPP juices in general - by any means. Barnhorn’s experience seeing premium food and beverage brands successfully migrate out of the natural channel, for example, dates back to the last wave of premium juice. As the founder of Fantasia Fresh Juice Company, Barnhorn’s Midwest fresh juice and smoothie brand
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was acquired by private equity firm North Castle Partners in 2000, where it was merged with Naked Juice as part of a roll up that saw other regional brands including Fresh Samantha get acquired before all of Naked was sold to PepsiCo in 2006. Lou Marinaccio, the managing director at North Castle, served as COO of Naked leading up to its sale to PepsiCo. He sees parallels with the current environment. “For any given value proposition the question is how big is the pool of demand,” says Marinaccio. “[With Naked] we ultimately saw that consumers would pay $3.00 for a single-serve juice in those markets we weren’t in. The question today is whether that same extrapolation model can still hold as the price frontiers get higher and higher.”
The Coca-Cola Company’s commanding lead in the lemonade category has only been strengthened by the beginning of a return to form for Hubert’s, the Hansen’s brand it acquired in its 2014 purchase of a 16.7 percent stake in Monster. Up to $18 million in sales in 2014, Hubert’s sales fell below $15 million a year ago. Now they’re up 5.29 percent ($16.5 million) in the 52-week period ending July 10, 2016, according to data from Chicago market research firm IRI. Along with a recent marketing push from Coke, in June, Hubert’s added a PET bottle to compliment its glass packaging, presumably to make way for the brand to move into new occasions and venues. Dollar sales of Coke’s primary lemonade player Minute Maid - were up 11.98 percent while PepsiCoaligned Lipton was up 10 percent, bringing in $84.6 million and $51 million, respectively. Third place company in the category, King Juice, maker of Calypso Lemonades, is hot on Lipton’s tail though, outpacing the growth rate of the category leaders, up 14 percent with $48.7 million in dollar sales.
Looking further back, and beyond beverage, John Maggiore, founder of Maggiore Sales & Marketing, and the former natural category manager at Stop & Shop supermarkets, likens the downward pressure on pricing in premium juice to the premiumization of ice cream in the 1980s. He saw Ben & Jerry’s mainstreaming another level of premium in the ice cream category. So what will happen? There will be growing pains, he says. “For a while [Ben & Jerry’s] sales were stagnant or even slightly down because they had to keep the price down to be able to compete with the larger major competitors,” says Maggiore. “The bet was that once they built enough mass they’d be able to get the costs down,
Sparkling Ice’s lemonades, which parent company Talking Rain launched in 2013, appears to have stumbled a bit (down 10.2 percent), but remains big business, bringing in $66.1 million for the period. Pulse Beverage Company’s Cabana Lemonades continue to struggle, down to $2.28 million in sales from $2.62 million a year before. Innovation in the lemonade category isn’t appearing in the numbers but there are interesting things occurring in the space. Brands like Honeydrop and Sweet’tauk are bringing the excitement around cold-pressed, high pressure processed (HPP) juice into the space. At BevNET Live in June, New Beverage Showdown contestants Leaf & Love and 4Pure had lemonades sweetened without sugar, instead using stevia and maple syrup, respectively.
30 SEPTEMBER 2016 BEVNET MAGAZINE
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Change vs. year earlier
Naked Protein Zone
Bolthouse Farms C Boost
Odwalla C Monster
Odwalla B Monster
SOURCE: IRI, a Chicago-based market research firm (@iriworldwide) 52 Weeks through 7/10/16
which I think is what you’re seeing in super premium juice.” Ben & Jerry’s, of course, was eventually acquired by Unilever, while Haagen Dazs was bought out by General Mills, which speaks to the critical importance of CPGs (or deep, deep pockets elsewhere) in allowing a premium brand to achieve mainstream success in conventional retailers. As it stands, four brands in the super premium juice segment have strategic backing - Suja with Coca-Cola, Evolution Fresh with Starbucks, Blueprint with Hain Celestial, and Daily Greens with White Wave Foods. Naked itself, and Campbell’s-owned Bolthouse Farms are also strategic HPP plays. With prices what they are, beyond the natural channel, there may not be much room for more. By most accounts, once a market has grown to three or four national players serving the full spectrum of channels, it’s not easy being number four or five. “There’s really this winnowing effect that occurs with brands going into the mainstream and that’s a result of the domination of the large CPGs,” says John Giannuzzi, managing general partner at Sherbrooke Capital. “They set the bar on pricing and promotion and slotting fees and so you have to play the price promotion wars and that’s not for the feint of heart. The brands that establish them32 SEPTEMBER 2016 BEVNET MAGAZINE
selves will have to have enough capital to power through that.” Gianuzzi’s familiar with this fight right now through premium gelato brand Ciao Bella, of which Sherbrooke is its principal investor. Despite the considerably higher manufacturing costs of producing gelato compared to ice cream, Ciao Bella is priced in line with the premium ice cream category, in order to compete. But winning means that consumers in those conventional channels are going to have to understand the value of what the price is once the product really feflects is true cost to make. “People generally understand the difference between gelato and ice cream but that still hasn’t given us the license to price at a premium to Haagen Dazs,” Giannuzzi adds. “You can really only get away with that in the natural channel.” That type of consumer awareness, of the difference between gelato and ice cream, is something Giannuzzi says will also need to take place in cold-pressed juice, to see the category find success in mainstream channels. “With HPP juice there’s a massive education process that needs to occur to convince the mainstream consumer this product is twice as good as what they already think of as a premium product in a Naked or Odwalla or Bolthouse.”
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Brand News In March 2016, 1915 Bolthouse Farms released three new organic cold-pressed juices including: 1915 Strawberry with coconut water, pear, apple and lemon; 1915 Orange with carrot, pineapple, apple and lime; and 1915 Grapefruit with apple, peach and raspberry. All three varieties are available in select retailers nationwide. This October, Bolthouse will debut their first collection of smoothies as part of their ultra-premium beverage portfolio. The two new smoothie flavors include: 1915 Mango with coconut water, peach, orange, apple and banana and 1915 Pear with coconut water, mango, spinach, banana and lime. All of the 1915 juices and smoothies are made with six ingredients or less and the entire portfolio is organic, non-GMO, vegan and gluten free. V8 +Energy is introducing two new flavors - Kiwi Melon and Lemonade - to its lightly carbonated juice line, powered by natural green tea. Each 50 calorie, 12 oz. can contains one combined serving of vegetables and fruit. V8 is also expanding its line of vegetable fruit blends containing a full serving of vegetables. The two new flavors - Caribbean Greens and Berry Bluss - have 80 calories or less, no sugar added, no artificial colors or flavors and are excellent sources of antioxidant vitamins A, C & E. The new blends are available in 46 oz. bottles nationwide. R.W. Knudsen Family has announced the launch of its brand new vegetable juice variety, Organic Tomato Sriracha. R.W. Knudsen Family Organic Tomato Sriracha features tomato juice infused with the heat of Sriracha - a spicy and tangy chili-garlic paste. True to R.W. Knudsen Family brand’s devotion to quality, the Organic Tomato Sriracha juice contains quality ingredients and no preservatives. It is Certified USDA Organic and Non-GMO Project Verified. The juice retails in 32 oz. glass bottles at natural and conventional retailers nationwide. L&A Juice is in national rollout with their L&A Organic All Tart Cherry Juice. The 100 percent Juice is available in 32 oz. glass bottles and is part of the L&A organic line, which also includes Beet Apple, Carrot Apple, All Cranberry and Superfruit.
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Juice & Lemonade Juiceology continues its product innova-
tion with the release of Red Elements, a juice blend of beets, carrots, red berries, apples, with a hint of ginger and turmeric. Red Elements will be available in a 15.2 oz. bottle. The first retailer to carry this flavor will be Giant Eagle and the company expects that very soon other chains will follow, such as Kroger, Safeway, Albertsons, Sprouts, Walmart and more. With only 130 calories per bottle, Red Elements also contains 25 percent of suggested daily fiber value and the addition of turmeric aids digestive health. Evolution Fresh has expanded its green juice line with the launch of Organic Greens & Kale, now available at select Whole Foods and natural and premium grocery stores nationwide. Made with more than a pound of vegetables per bottle and an excellent source of Vitamin K, Organic Greens & Kale is a refreshing blend of organic spinach, romaine, cucumber and celery perfectly accented with a squeeze of lemon. JP Fuel is Juice Press’ energy shot fueled by guayusa, a caffeinated leaf native to Ecuador that offers the same caffeine boost as coffee and more antioxidants than green tea. Juice Press also offers JP Fuel Xtreme which has two times more guayusa than the former product. Consisting of only pear, lemon, guayusa, maca (a vitamin-rich plant that enhances energy, stamina, and memory), and probiotics, JP Fuel and JP Fuel Xtreme are the ultimate energy shots that are free of any processed ingredients. JUICERA has introduced two 2 oz.
organic cold pressed Wellness Shots to its line of organic juices. Their premium juices as well as the two Wellness Shots are available in all Florida Whole Foods as well as many other Florida locations. Working with Maximum Marketing they have secured distribution with UNFI on the East Coast beginning in November. Pressed Juicery’s Freeze initially launched
in 2014 at a handful of stores but the brand is now expanding its signature vegan, gluten-free and dairy-free frozen treat on a
Brand News much wider scale at many upcoming new locations. Made from only the ingredients found in Pressed Juicery’s juices (think cold-pressed juice, only colder) Freeze never contains any preservatives, binders or artificial flavors. Freeze is available in four flavors (greens, fruits, vanilla and chocolate) and can be topped off with healthy options such as fresh fruits, chia seeds, coconut, almond butter and cacao drizzle. Love Beets has expanded its portfolio of
premium, organic beet juices to include Organic Beet Juice with a Hint of Ginger. The line boasts USDA Organic certification, no artificial preservatives or flavors, and no added sugars. The juices are available in select Whole Foods regions, as well as on Love Beets’ recently launched online shop. Bodega Barcelona, owner of the ready-
to-drink vegetable beverage brand Mucho Gazpacho, has partnered with premier Spanish foods importer Culinary Collective to make this product available through its nationwide distribution network. Culinary Collective in Lynnwood, WA, will be the exclusive importer of all three varieties of Mucho Gazpacho – Original Tomato, Beets, and Greens. Telula continues to add major national
retailers to its distribution. In October the brand will add Walmart to its existing list of Whole Foods, Target, Public and Kroger.
and H-E-B - 3,000 food stores. A shelfstable juice, each 8 oz. bottle contains three full servings of vegetables with just 60 calories and very low sodium. Genius Juice unveiled new packaging in
July 2016 and is also launching a new Coffee Coconut Smoothie in September 2016. In addition, Genius Juice has been approved for Round 9 in several new Whole Foods regions including Chicago/Midwest, Rocky Mountain and Southwest regions. Leading Brands of Canada, Inc. has
introduced a new line of berry and tea blends. Available in three varieties - Pure Blue (blueberry), Pure Red (pomegranate) and Pure Black (blackberry), the small batch product contains no added sugars, preservatives or artificial ingredients and is currently being sold in Canada at Whole Foods, Longos, Save on Foods, Walmart, and independent grocers. Garden of Flavor launched four flavors of its organic “Cold-Pressed Energy,” which combines Guayusa, cold-pressed juice and living probiotics. The brand also recently introduced its new cold-pressed juice “The Grasshopper.” The brand’s presence continues to increase through UNFI and KeHE and has added Wegmans, Roundy’s, Lunds and Byerlys and Sprouts to its list of retailers. Biotta Juices added three new items this
UCE JUICE is a premium juice with a
natural boost. The brand has gained entry into 220 locations within the past three years, most recently in 52 Whole Foods Markets in the grocer’s Northern California region. The company reports that a new flavor is currently in the works. Kristian Regále, Inc. recently secured distribution of its Kristian Regále brand of Swedish-style celebratory sparkling juices at over 150 Bed Bath & Beyond stores. Kristian Regále Apple and Pear sparkling juices will be featured this fall as part of Bed Bath & Beyond’s Harvest / Thanksgiving program. FAVE 100 percent fruit and vegetable juice is now available in thousands of select locations of Kroger, Target, Safeway
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year to its line of USDA Organic, NonGMO Project Verified functional juices. The #1 selling beet juice in the U.S. is now available in a larger 32 oz. bottle. In addition, Biotta has recently launched Carrot and Tart Cherry juices, both of which are 100 percent juice. Beet Performer has expanded distribution of its all natural beet juice focused on improving the strength and stamina of athletes to over 1,000 Kroger stores nationwide. P¯urjus introduced its new line of 100 per-
cent juice, USDA Organic juices in three flavors (Beet, Beet Apple Pear, and Apple) in early 2016. Made in Austria from the highest quality fruits and vegetables, p¯urjus is packaged in 16.9 oz. bottles with a suggested retail price of $4.99.
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Brand News Ralph & Charlie’s fruit and vegetable juice blends are available in 10 flavors - Mango Carrot, Pineapple Carrot, Banana Carrot, 100% Carrot, Kiwi Apple, Pomegranate Grapefruit, Multivitamin, Cranberry Carrot, Strawberry Carrot and Guava - all of which contain zero sodium. The brand recently expanded into Chicago and has recent authorizations for Gala Fresh Markets in New York and New Jersey, Food Bazaar and Food Dynasty. SuperDetoxMe just launched its juice line
this March - a premium juice available in a pouch. Each SuperDetoxMe juice is composed of a nutritious combination of fruits, vegetables and botanical extracts, on top of being vegan, allergen, gluten and GMO free. Containing no added sugars, colors, or preservatives, the line is available in five flavors - Strength, Awareness, Vibrance, Transformation and Renewel - and can be purchased online on Amazon.com Red Jacket Stomps are a premium line of small batch, artisanal nectars made with estate grown and native fruits of the Finger Lakes Region of New York State. This year Red Jacket is giving their classics, Apricot and Tart Cherry a whole new look along with the introduction of the Black-N-Blue Stomp. Blackcurrants contain three times the vitamin C found in oranges, and antioxidant rich anthocyanins found in both blackcurrants and blueberries give this cold pressed nectar its deep blue hue. Available online at www.redjacketorchards.com and major retailers throughout the Northeast.
organic ingredients including Fair Trade tea, lemon juice, Fair Trade cane sugar and natural flavoring. It is 100% certified USDA Organic, Non-GMO Project verified and Green-E certified. Earl Grey Carbonated Tea Lemonade retails in 12 oz. cans at natural and conventional retailers nationwide. Langers Juice has added to its line of organic products with their new 3 liter Langers Organic Cucumber Limeade with Mint. The USDA certified organic refreshing beverage is in selective regional rollouts. This joins the current lineup of organic apple juice, cranberry cocktail, grape juice and lemonade. Califia Farms has added Tangerine Juice to its lineup of citrus juices available in its multi-serve 48 oz. bottle. Made from 100 percent California tangerines, Tangerine Juice joins California-sourced Orange Juice, Meyer Lemonade, Ginger Limeade and Tart Cherry Lemonade. In addition, Califia Farms’ Spiced Cranberry Cocktail Agua Fresca is returning to supermarket shelves in time for the holiday season. Lori’s Original Lemonade, manufacturer
of an all-organic herbal infused lemonade, has expanded its distribution network through UNFI and KeHE to help support a growing customer base in the Whole Foods, Albertsons and Vons throughout California. Lori’s will announce new products in Spring of 2017 to add to their current flavor profiles of Lavender Lemonade, Ginger Lemonade and Lemongrass Lite Lemonade. Big Island Organics recently launched
Lemonade Santa Cruz Organic has announced the
launch of its new Mango Passionfruit Agua Fresca. The lightly sweetened beverage is inspired by traditional Agua Fresca, made with a handful of ingredients including organic fruit juice and lemon juice. Santa Cruz Organic Mango Passionfruit Agua Fresca is Certified USDA Organic, NonGMO Project verified and can be found in natural and conventional retailers. The company has also announced the launch of its rose hip infused Earl Grey Carbonated Tea Lemonade which features a blend of 38 SEPTEMBER 2016 BEVNET MAGAZINE
nationwide in Sprouts Farmers Markets with two best-sellers, Hawaiian Gingerade and Gingerade Maté. The company reports a new flavor is in the works and is currently working on a packaging redesign for its line of wholesome lemonades. ShadeTree Organic Lemonade
launched in Chicago at Lollapalooza 2016. In addition to rolling out with Brown Distributing in Central Texas in September, followed by the Austin City Limits Music Festival in October, the brand will introduce a certified organic, low-calorie Blueberry extension to its Original and Strawberry organic set.
It’s one of a presenter’s worst fears: the debunker. And he was standing up to question Kora Lazarski. Speaking at the Probiota Americas event in June, the SPINS data expert had just outlined the more than $10 billion of in sales associated with probiotic products – until an audience member stood up to question her premise. The would-be debunker said he challenged the sales amount, according to Lazarski, claiming they included figures for products that claimed to be probiotic, but that didn’t include effective live cultures. The debunker wasn’t after Lazarski, of course, but he was trying to make a point – that seen through another lens, the real probiotics business is much smaller, by a significant factor. At this point – in general, or after a friendly presentation, in particular – disagreements over nomenclature
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might seem more nit-picky than noteworthy. Actually, however, it’s a nit that could be worth billions of dollars for a category that one study said may hit $52 billion globally by 2020. “Look, you can have a fermented product that contains whatever it contains,” notes Michael Bush, the president of Ganeden, which manufactures a popular proprietary probiotic line known as BC30. “But the term probiotic means something. And if you haven’t studied something to know what it does, it doesn’t necessarily mean that it meets the probiotic standard.” Bush, who is also the chairman of the International Probiotic Association (yes, beer lovers, it’s abbreviated “IPA”), which sponsored Probiota Americas, is trying hard to bring that definition into focus. That’s because, disagreement over current sales figures
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aside, there is a lot of expensive research and development work going into proving the efficacy of specific, trademarked lines of probiotic bacteria. And there’s a lot of money to be made by selling those lines to the manufacturers who incorporate them into their products, to satisfy a public increasingly convinced of their potential benefits, which have been linked to everything from gut health to immunodefense to alleviating the effects of autism. To the IPA and its constituent companies – many of which are the ones developing those lines, to be fair – the goal is to refine the definition of probiotics to encompass living, effective flora. If that aligns with the products they’re developing, it increases their value even more. The standard being promoted by the IPA echoes one stated by the World Health Organization in a study from 2002, which declared probiotics to be “live microorganisms which when administered in adequate amounts confer a health benefit on the host.” But there are major obstacles to implementing that standard: it falls outside any accepted regulatory standard currently in use in the U.S., where words like probiotic, fermented, even “Live and Active” – a seal promoted by the yogurt council – are already fairly interchangeable to most consumers. Still, many manufacturers are starting to see the value of adding supplemental lines, even to products whose natural fermentation process might still confer a great deal of credibility, at least to consumers. Big companies like GTs and Kevita are adding extra probiotics lines to some of their kombuchas – the same lines that are being found in products ranging from baking mixes to frozen pizzas. That’s not yet due to any specific regulatory action – according to attorney Rebecca Cross, the FDA’s main standard for probiotics deals more with making sure they aren’t potentially harmful through adulteration or claims that go beyond basic structure/function assertions. The IPA’s executive director said he met with the FDA last year, and has promised that regulation might be on the agenda, but so far that hasn’t been the case. Similarly, civil suits, which often spur regulatory scrutiny, haven’t yet created major shakeups in the way brands define their probiotic content. Thus far the only lawsuit or action of note took place between 2008 and 2010, when Dannon 42 SEPTEMBER 2016 BEVNET MAGAZINE
settled a civil suit and an FTC action over its probiotic-fortified Activia yogurt. In that situation, however, the key issue was the frequency with which consumers needed to eat Activia (or drink the DanActive yogurt drink) to get digestive or immunity benefits. Conversely, for kombuchas – the most cited example of probiotic drinks in the U.S. – the civil suits have been over sugar content. One reason? That same regulatory vacuum means that cases concerning reasonable functional benefit claims are going to be much harder to prove. “I think it might be a hard one to bring in that the plaintiffs lawyers are always looking for the lowest hanging fruit, and probiotics have been used for hundreds of years,” Cross notes. “Challenging the health effects might be something that’s a lot of work that they might not want to do during litigation, unless there are certain more specific health claims being made.”
While lawyer-proofing a drink is increasingly important these days, that’s not the primary reason most manufacturers might adopt supplemental lines like Ganeden’s BC30, which is now in more than 100 beverage SKUs, according to Bush. It’s about developing drinks that do what they’re supposed to. One of the big reasons some companies use the lines is to undergird their functionality with a line that has the support of scientific research; another is to make sure that the probiotics survive long trips across a national distribution network. “The story around efficacy is the real story,” notes Alan Murray, the CEO of probiotic juice company Goodbelly. “Goodbelly has to stand for, ‘you’ll feel the benefits.’ You mention the strain and the science to guarantee the efficacy.” Goodbelly itself is a brand that was
developed around the company’s own proprietary strain of bacteria – essentially a beverage added to the supplementary line, rather than the other way around, but with the same reasoning: that the research into the specific bacteria allows for more and better claims. But that in some ways runs counter to the entire reason that probiotics initially grew as a category, that basic belief that everything from yogurt to kombucha, by virtue of being a natural, easy-to-understand processing element, is going to be beneficial to the consumer. Globally, over the past three years, launches of fermented products indicate that the overriding interest is in, at least for now, what that broader definition of probiotics might represent, rather than what the overall efficacy is. About half of the newly launched products with probiotics are also labeled fermented, according to information supplied by Innova Market Insights, which noted fermentation is also “easier to understand than other food processes.” That return to simplicity has also been reflected in overall natural and specialty channel growth, and it’s also why terms like fermented, live & active, and probiotic are all on the rise together. “Probiotic, it’s one of those claims that has gotten ahead of regulation,” Lazarski said. “There really isn’t consensus about what really is the correct strain or dosage or genus of the bacteria, or which condition a strain is supposed to help.” Still, even the makers of fermented products admit that there’s one more reason they might have to eventually add patented probiotic lines to their products, to meet a stricter and more comprehensive definition: the fact that the growing popularity of more common, probioticadded foods and beverages, from sodas to burritos to trail mix, could further marginalize their own products. John Tucker, the CEO of Farmhouse Culture, which markets a fermented “gut shot” made from products like kimchi or sauerkraut said he’s “very confident” that his current offerings don’t need any kind of supplementation to meet probiotic standards, but that “Krauts, kimchis, they aren’t a common part of the American diet, they’re polarizing taste flavors.” “it’s more broadening of the portfolio,” he said, where a supplemental line might make sense. “We’re developing products that we believe will meet the consumer taste platform. But taste is king.”
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Top Shelf Beverages, makers of Clearly Kombucha, has launched its first-to-market line of fermented botanicals with probiotics nationwide. C Botanicals is now on shelves at Natural Grocers and Sprouts Farmers Markets. The line extension comes in five flavors: Turmeric Cardamom, Ginger Root, Strawberry Milk Thistle, Lemongrass, and Holy Basil.
GoodBelly’s plant-based Protein Shake is now available at Whole Foods. Available in three flavors - Triple Berry, Green Power, and Tropical Coconut - each 15.2 oz. bottle contains 15 grams of pea and chickpea-based protein and 40 billion probiotic cultures. The line extension is Non-GMO, Soy and Dairy Free and certified vegan.
Health-Ade kombucha has grown immense-
Uncle Matt’s new Fruit-Infused Probiotic
ly in the last year with the opening of its new state of the art brewery facility in Torrance, Calif., which has allowed the company to increase its production tenfold. Growing their robust product assortment the brand is announcing three new flavor additions this fall. Health-Ade is projected to be available in all 50 states by the end of the calendar year.
Waters recently hit store shelves nationwide. Packed with one billion CFUs of GanedenBC30 probiotics per serving and real citrus peel, these cold-pressed organic waters are available in lemon, grapefruit and orange flavors with 10 calories and 2 grams of sugar or less per serving.
Karma Probiotics continues to expand
nationwide as it moves into Kroger, Fred Meyer, Ralph’s, Fry’s Food & Drug, Rite Aid and Meijer stores. The shelf-stable beverage is available in three varieties - Berry Cherry, Apple-Cinnamon and Blueberry-Lemonade - and two billion probiotic cultures are kept in the patented KarmaCap until activation. To complement the probiotics, each bottle of Karma contains vitamins A, E and B Complex (B3, B5, B6 and B12).
Kevita has added three new flavors to its line of Master Brew Kombuchas: Dragonfruit Lemongrass, Mango Habanero and Citrus. All flavors are made from fermented green and black tea, resulting in a 100 percent organic, naturally energizing beverage with just 35 calories per 8 oz. serving. The company also recently launched its #ReVitalizeInside social media campaign, in which each entry and use of the hashtag will see the company donate $2 to the Gastric Cancer Foundation. Barefoot Bucha is a certified organic craft
Lifeway’s Organic Whole Milk Kefir is de-
signed for consumers who prefer the thicker, creamier texture as well as the reported health and weight benefits of non-fat reduced dairy products. New Peaches & Cream, Coconut & Cream, and Lemon Meringue flavors will join the existing Plain, Wildberries and Strawberry & Cream varieties. The company’s whole milk SKUs have the same 12 live and active probiotic cultures as Lifeway’s low-fat kefir products, along with 10 grams of protein, 8 grams of fat, and 160-190 calories per serving. All are USDA Certified Organic, gluten-free, 99 percent lactose-free, and available in 32 oz. bottles. LIVE Beverages has released their ninth kombucha offering with the new Original flavor. Crisp, clean, and simple, the original flavor hit shelves in August. Also new for LIVE is its line of sparkling drinking vinegars, adding to the company’s portfolio of wellness based beverages.
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kombucha that is brewed in Virginia from Blue Ridge Mountain water and infused with organic and fair trade ingredients. Committed to a low waste business model the company offers its kombucha on draft and in refillable bottles. To date, Barefoot Bucha drinkers have saved over 400,000 bottles. Revive Kombucha’s ‘Spring Fling’ flavor has
earned a permanent spot in the Revive lineup of organic kombucha brews. Due to positive customer feedback, the flavor will move from Revive’s experimental Open Mic series of flavors to a year-round product. The energizing brew blends cucumber with bright mint and tangy lemon. The next short-fun Open Mic flavor will be announced in September when it is released for wide distribution. That Indian Drink is launching two new
flavors - Apple Beet and Cranberry Orange Rosemary - that continue to celebrate culinary multiculturalism. Chef Ipshita
Pall’s take on multiculturalism is thoughtfully artisanal as she melds the “exotic” with the “familiar” in palatable differences. By combining Cranberry and Rosemary, both popular flavors during Thanksgiving, she captures that memory in a bottle. Genki-Su, the first traditional Japanese
hydration beverage intelligently hand crafted for today’s active, healthy lifestyles is now available at Safeway, Whole Foods, New Seasons and select independent stores located throughout the West Coast. The all natural, fruit-infused drinking vinegar is available in five flavors: Yuzi Citron, Nashia (Asian Pear), Hawaiian Ginger Honey, Shisho (Japanese Basil) and Oregon Cranberry. Garden of Flavor launched four flavors of
its organic “Cold-Pressed Energy,” which combines guayusa, cold-pressed juice and living probiotics and launched its new coldpressed juice The Grasshopper. The brand’s distribution presence continues to increase
through UNFI and KeHE and recently added Wegmans, Roundy’s, Lunds and Byerlys, and Sprouts to its list of retailers. New Zealand-based brand Ti Tonics is launching a new range of probiotic tea tonics specifically designed to meet the needs of sugar and carb-conscious U.S. consumers. The cold-pressured natural beverages are available in five fresh flavors - Mandarin and Lime, Cucumber, Apple and Lemon, Pomegranate and Black Cherry, Pineapple and Coconut Water and Watermelon Mint - and contain two billion vegan probiotic CFUs per bottle. Fire Cider, the spicy, sweet and tangy apple cider vinegar and honey tonic, is now available at all 230 Sprouts Farmers Markets, putting the brand’s store count to over 1,400 retail locations. In addition, the company has announced that the entire Fire Cider line is now USDA Certified Organic.
BEVNET MAGAZINE SEPTEMBER 2016
How Kids’ Beverages Are Maturing By Ray Latif
onsumers have been changing the way they eat for years now, purchasing more organic and natural products, and among other things, cutting sugar, avoiding additives and preservatives, reading labels more closely, and watching for allergies. But they’ve also been doing that from the start for the next generation: as far back as 2013, organic baby food had become more than 20 percent of the total category in the U.S. – five times the 4 percent share of organic in food overall. All those kids have to grow up, and as a result, the suppliers of beverages to those children are also evolving. Some brands, including good2grow, have retooled formulations to reduce sugar and calories. Others such as Juicy Juice and Capri Sun introduced organic product lines, while Hain Celestial-owned Ella’s Kitchen has focused on creating nutrient dense
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ÂŠ2016 Honest Tea, Inc. All rights reserved.
formulations. Honest Tea has shown massive growth in extending its brand to a younger set, as well. Robyn Mermelstein, the Director of Brand Marketing and Director of Digital Marketing & Social Media for Hain Celestial, sees a long runway for innovative kids’ beverages targeting 2-5 year-olds – but adds that there is also significant opportunity to create new product lines for older kids. “We really want to crack the code on 5-10 [year-olds],” Mermelstein said. “What does that look like and how does it look different, taste different, act different to a 10-year-old versus a three-year-old?” Mermelstein said. “And how do we deliver a product that is fun, that they’ll enjoy as an alternative to if they’re already drinking sweet drinks or soda?” Replacing sugary drinks with healthier ones has become of significant importance to parents, according to a new report published by industry trade group the Food Marketing Institute and Rodale. The report found that a product’s healthfulness for children influences 91 percent of parents’ food and beverage purchases. Moreover, market research firm Packaged
While Ella’s Kitchen drinks may have gained traction at Target and other retailers, they have yet to move the needle in terms of market share in a category dominated by legacy kids’ brands. Like Ella’s, however, other brands, including old standbys like Juicy Juice, are also trying to extend their brands to older kids with new products. Earlier this year Juicy Juice introduced Juicy Teasers, a blend of fruit juice and decaffeinated tea. Ilene Bergenfeld, the Chief Marketing Officer of Harvest Hill Beverage Company, which owns Juicy Juice, said that the line originated from research that found that “older kids are looking for more beverage variety, but there was a gap in the better-for-you beverage category since most options have sugar and/or caffeine.” The new products follow in the footsteps of other, entrepreneur-generated tea-based drinks designed for older kids. They include Drazil, a line of herbal teas sweetened with fruit juice, Rooibee Red Tea’s Rooibee Roo, a line of iced decaffeinated rooibos drinks, and Little Me Tea, which markets an organic blend of teas sweetened with fruits and vegetables.
Facts found that nearly half of parents consider nutritional value as a top influencer. Ella’s Kitchen beverages were born out of a partnership with Target and that retailer’s Made to Matter program, which focuses on working with existing purveyors to increase shoppers’ access to natural and organic products. The initial focus was on the youngest consumers via an aloe-infused hydration line that comes in mainstream flavors, including strawberry lemonade and blueberry apple, and a smoothie line focused on providing nutrition and satiety through varieties blended with beets, zucchini and sweet potato. Target and Ella’s Kitchen have since expanded their partnership with new drinks aimed at older children. Ella’s Kitchen Pressies is a new four-SKU line of cold-pressed, high pressure processed juices made for kids aged two and up. This month, Target will introduce a dairy-alternative beverage line developed by Ella’s Kitchen as well: he new drink blends are made with rice, coconut and nut-based milks and sweetened with fruit puree, Packaged in 200 mL drink boxes.
Juicy Juice Teasers were launched a year after the brand’s Splashers line, which Harvest Hill released in 2015. The pouch product is a blend of fruit juice and filtered water made with less sugar than other varieties. The line is targeted to reach kids aged 5-8, a group slightly older than the consumer base for Juicy Juice juice boxes, according to the company. Keeping the kids happy and engaged is the key. In a recent report on the market for kids’ food and beverages, Packaged Facts found that kids aged six and older “wield a considerable amount of purchasing power” and that “brand loyalty is nurtured in children even younger.” It’s a big reason that Ella’s Kitchen and others are attempting to build a base of consumers at an early age and innovating to meet both the wants of children and needs of parents as they grow. “Everything’s on the table,” Mermelstein said. “We work very closely with our retail partners. We’re setting up dates to do innovation sessions together so that we can build platforms… so that at the end of these sessions we’ve got a 2-3 year pipeline of items to develop.”
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Let’s be Honest to kids...
CUT THE SUGAR, NOT THE FUN. © 2016 True Drinks, Inc. - AquaBall Naturally Flavored Water Drink! All Rights Reserved.
Brand News Honest Kids launched two new varieties -
Cherry Go Round and Twisted Tropical Tango. The new flavors are organic and are only 40 calories each. Honest Kids also launched in Chick-fil-a earlier this year, and its Appley Ever After variety is now available in Chick-fil-a locations nationwide. This is the line’s second major fast food launch, following its Super Fruit Punch variety launching in Wendy’s in 2015. Tickle Water is a premium, naturally flavored kids’ sparkling water launched when founder Heather McDowell realized how difficult it was to incorporate healthier options into her son’s diet. The line includes flavors such as Sparkling Water, Green Apple, Watermelon, and Cola. Each 8 oz. BPA-free PET can is specifically designed to find children’s hands. Since May, the brand has been placed in over 200 select markets in the New York Tristate area.
Kids Beverages water. The company also launched a new website. The company also added a strawberry lemonade flavor to its lineup. Madhava Natural Sweeteners recently announced the launch of its Kids Organic Honey Water line, sweetened using Madhava’s Organic Honey and a splash of fruit juice. Available in Fruit Punch and Yumberry flavors, 6-packs of 10 oz. bottles debuted at Target in May. Daily Greens’ Half Pint smoothies are kidfriendly 8 oz. smoothies crafted with raw USDA organic, non-GMO and fair trade ingredients without adding preservatives or artificial flavoring. Available in three flavors (Dragon Power, Carrot Kick and Green Thing), each bottle has 500 million CFUs of Ganeden BC30 probiotics and supports immune health. Capri Sun is expanding its juice drink line
Giggle debuted at Natural Products Expo
West in March and recently received NonGMO Project Verification, adding another attribute to to the organic, low calorie, vegan, kosher, and vitamin-enhanced flavored sparkling beverage for youth. Giggle is currently available in over 40 retail locations within California. good2grow continues to be a leader in the healthy children’s beverage space with packaging that pleases kids and ingredients that please mom. All products contain no added sugar, no artificial colors, flavors or preservatives and are non-GMO. The brand recently introduced two new exciting properties to its assortment, Darth Vader and Paw Patrol. Sneakz Organic, a line of USDA organic
milkshakes in chocolate, strawberry and vanilla flavors which disguise vegetable nutrition, is now available at H-E-B grocery stores across Texas. Every shake provides 1g of fiber, 5g of protein, and vitamins from whole food sources. Wacky Apple Organics has debuted a new
50.7 oz. large format juice pouch. Made with 100 percent organic real fresh fruit juice concentrate and zero added sugar or preservatives, the new addition comes in two delicious flavors: apple and fruit punch. True Drinks recently announced the commencement of production of its new preservative-free AquaBall naturally flavored
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by launching new Capri Sun Organic, the brand’s first-ever organic offering. The new certified USDA organic juice drink contains one serving of fruit in every pouch and is made with 66 percent fruit juice and no artificial colors, flavors or preservatives. Capri Sun Organic also contains 100 percent daily value of Vitamin C and no added sugar. Harvest Hill Beverage Company has launched Juicy Juice Teasers, a blend of fruit juice and decaffeinated tea. The new line contains no high fructose corn syrup, no cane sugar, and no artificial sweeteners. Available at Publix, Food Lion and Kroger stores in the Southeast and select Walmart stores across the U.S. Juicy Juice Teasers come packed in convenient 10 oz. single serve 6-packs and economical 64 oz. bottles in Peach, Berry, Half & Half, and Apple flavors. Leaf & Love Organics has announced the ad-
dition of its newest flavor, Organic Pink Lemonade, as well as a package redesign of the Original Organic Lemonade. Both flavors adhere to Leaf & Love’s unique value of being the only kid’s juice box that is zero sugar, zero carbs and zero calories. Both flavors are now Non-GMO Project Verified, USDA Organic and certified Kosher. They contain only natural sweeteners like organic stevia leaf extract and organic monk fruit. Leaf & Love is distributed by UNFI and KeHe throughout Northern California, and in Whole Foods Southwest Region.
W! NE The new Vita Coco 1.5L has 1â „2 the sugar of OJ.*
*The leading brand of orange juice contains 23 grams of sugar and 110 calories per 8oz serving; Vita Coco contains 11 grams of sugar and 45 calories per 8 oz serving.
IFT In Review
PULSES, FERMENTATION, & FLEXITARIANS By Carol Ortenberg
his year’s Institute of Food Technologists’ annual gathering and food expo showed how new ingredient and product development is being influenced through different, important consumer trends. BevNET sister site Project NOSH was on hand to take stock of the show and explore some of these ideas. One trend that’s become highly active in 2016 is the pulse. Amidst an influx of legume-centric products into a variety of consumer diets (such as gluten-free or high protein), the bean and its friends fit into the narrative of making more envi-
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ronmentally sustainable food choices, and makes for an affordable meal option. And it’s big business. According to the Global Pulse Confederation, over 60 million tons of pulses are produced each year in over 55 countries, giving the industry a retail value of roughly $100 billion. But there’s still confusion over what exactly a pulse is, and how producers can use them. To assist with this goal, several agricultural organizations previously focused on increasing pulse supply in their regions, including Pulse Canada, the U.S. Dried Pea and Lentil Council, and the American Pulse Association,
have banded together to create two new consumer facing pulse seals. The seals, which will appear globally, were officially announced during the trade show, which was held in Chicago. “We realized that if we all work together, we’ll all achieve more,” said Daria Lukie, manager of brand development for Pulse Canada. “It’s not about who’s getting a bigger piece of the pie, it’s about growing the pie.” Marketing agency Leo Burnett helped to initially develop the seal and conduct some of the research that would eventually shape the program’s guidelines.
Photo by Jeremy Keith - https://www.flickr.com/people/74105777@N00
Unlike other food groups, such as whole grains, there are no official governmental dietary guidelines about pulses, which leaves consumers confused as to how much they should be eating. While Lukie recognizes that pulses are often looked to by vegetarians or those seeking to eat less meat, she feels the real growth will occur outside of those boundaries. “Plant based protein is undeniably a major trend, and we are a perfect solution for people looking for that,” Lukie said. “But the biggest draw that we feel pulses have is that they’re complementarity.” That is, pulses can be added to products that don’t always have them. Meanwhile, with pulse, nut, and plant-based product launches on the rise, many of today’s food brands are aiming to appeal to a new type of consumer: the flexitarian. No longer confined to one end of the meat and vegetable consumption spectrum or the other, this new consumer eats a mainly plant-based diet but occasionally adds in meat. It’s vegetarian-light. Luann Williams, the Director of Innovation at Innova Market Insights, said she believes that the flexitarian lifestyle has been prevalent in Europe from some years and is just now crossing the ocean to the U.S. She noted that in Germany and Europe the “meat” sections are more “protein” focused, with meat alternatives mixed in. Interestingly, it’s the meat companies driving the innovation. “They’ve decided this is their department of the store and they’re keeping it,” Williams noted. While the U.S. has lagged behind other countries (Innova reports only 38 percent of Americans reported eating meatless meals once a week or more) that still accounts for roughly 120 million Americans. Additionally, 11 percent of American consumers report having decreased their meat intake in the past year. It’s hard to determine if the rise in consumer demand has resulted in more
flexitarian friendly products launching or if the new products have inspired more consumers to make the switch, but Williams acknowledges the evolution of such products has evolved. “Think about all the options,” Williams said. “Ten years ago you had a lot of soy and tofu. Five years ago it started getting a bit more interesting. And now there’s everything.” Businesses should look to the flexitarian (over vegans or vegetarians) said Williams, because it’s where the biggest marketplace opportunity is. Comparing the market to a triangle, Williams noted, “For people who are diehards, that shouldn’t be your market. Because you’re going to limit yourself to the tip of that triangle.” Brands should consider the need states of each segment of the triangle of consumers, said Williams, who believes that the biggest segment of consumers choose meatless options for personal health reasons rather than sustainability reasons. This segment, she said, is also somewhat price conscious, is less concerned with the environmental benefits of eating less meat, and ultimately won’t buy a product if it doesn’t taste good. Also influencing consumers – and written about elsewhere in this magazine – is the growth of fermented foods as a product category. Innova labeled fermentation a “Top Ten Trend” during a presentation at the IFT Expo, noting that consumers who are looking for “cleaner” food options, see it as a natural processing method. Additionally, the trend appeals to consumers’ desire for products that speak to better gut health and probiotic benefits. Finally, the idea of artisanal, handmade food is still in vogue and fermented foods tend to harken back to age old processes that consumers can trust. “Big CPG function has always been manufactured,” Fred Hart, Creative Director of design firm Interact on Shelf, told NOSH. “Yet the natural and emerging foods space has looked to the past and to nature to provide optimal, ancient function.”
BEVNET MAGAZINE SEPTEMBER 2016
SPARKLING BEVERAGES SPARKLE
C OLD BREw C OFFEE C ONTINUES at 2016 Summer Fancy Food Show By the numbers, the 2016 Summer Fancy Food Show was the largest in the history of the event. Over 47,000 food and beverage industry professionals attended the three-day convention, held from June 26-28 at the Jacob Javits Center in New York City. Among the record 2,700 exhibitors was a diverse cast of entrepreneurial beverage companies, representing a range of emerging categories. One such category was that of drinking vinegars, represented by a handful brands in attendance including LIVE Kombucha, Pok Pok Som, Shire City Herbals and Cide Road. It’s a nascent space: some are playing up the health benefits of apple cider vinegar while others are focused on simply selling innovative refreshment. Trevor Ross, founder of LIVE Kombucha, said his company’s recently launched line of sparkling drinking vinegars are positioned somewhere in the middle. “There’s already an awareness that apple cider vinegar is good for you but consumers want a full flavor experience along with functionality,” said Ross. “That’s the sweet spot where we wanted to play with these, the balance between wellness and taste.” Pok Pok Som, which has been selling drinking vinegar concentrates since 2010, leaned more on flavor with the 2015 launch of Som Soda, using the soda format as a vehicle to bring more consumers into the fold. “Getting the consumer to take a leap of faith on a $2 soda in the cold case comes easier than a $12 concentrate in the mixer set,” said Meyers. “We think we’ll start to establish brand loyalty with 54 SEPTEMBER 2016 BEVNET MAGAZINE
the sodas and then introduce new consumers to the concentrates.” Both brands’ latest sparkling offerings speak to the greater trend of consumers seeking their bubble from sources outside of traditional CSDs. Gourmet and craft “soda” brands DRY and JOIA were at the Javits Center with new “Sparkling” surnamed extensions, while recently launched brands like Doppelganger and Sound brought carbonation into teas and bitters. Sound wasn’t alone in bringing innovation to tea, another category that continues to grow alongside the consumer interest in better-for-you beverages. Cham and Evy showcased cold brewed iced tea. California-based TeaONIC had its organic herbal tea tonics on hand. Lastly, Owl’s Brew continues to use tea to differentiate itself not only in the cocktail mixers category, but also now in beer with its recently launched Owl’s Brew Radlers. Finally, the continuing evolution of the cold brew coffee category was on display as well, most prominently with the debut of Califia Farms’ new nitro-infused cold brew coffee lattes. Formulated with a base of almond and macadamia milks and cold brew coffee, added nitrogen “brings out the natural sweetness of the coffee in a silky micro-foam reminiscent of a dark draft beer,” according to the company. The product is packaged in 10.5 oz. aluminum bottles and is available in three varieties: Latte, Mocha, and New Orleans. Packaging change was on tap as well. Brands like Chameleon and Grady’s introduced more value-oriented, multi-serve options to the category with the launch of cold brew coffee offerings in a bag in box format.
HAVE SOME MOONSHINE. IT’S BOURBON’S HOTTER, WILDER, YOUNGER SISTER.
C’MON LIVE A LITTLE
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Promo Parade Promotions, events & specials for the industry
Wild Turkey Announces Matthew McConaughey as Creative Director Wild Turkey announced a multi-year partnership with Academy Award-winning actor Matthew McConaughey, who has signed on as the brand’s new Creative Director. McConaughey will serve as the chief storyteller for Wild Turkey both behind the camera and in front of it, reintroducing the world to the legendary bourbon brand,
starting with a series of television and digital advertising campaigns he is directing. A Wild Turkey fan, McConaughey first visited the lauded distillery a couple of years ago, which is only about a 20-minute drive from the University of Kentucky, the place where his parents first met. It was there at the distillery, high above the Kentucky
River, that he was introduced to Jimmy and Eddie Russell, the Bourbon Hall of Fame father and son Master Distiller team who have worked at the Wild Turkey Distillery for 97 years collectively. McConaughey was first seen on the Wild Turkey YouTube channel in the short film which chronicles a visit to the Wild Turkey Distillery, as
Corona Extra Named Ofﬁcial Cerveza of the Los Angeles Rams Corona Extra and the Los Angeles Rams announced a new sponsorship deal to name Corona Extra an official partner of the Los Angeles Rams. Highlights of the deal include exclusivity in the imported beer category for Corona Extra; prominent in-stadium signage; use of the Rams’ logos and other marks on packaging and point-of-sale; sponsorship of stadium Replay Feature bumpers; in-stadium and game day activations; and presenting sponsorship of the new party zone Corona Beach House experience on the east side of the sta-
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dium complete with perfect “Find Your Gameday Beach” moments for fans. Corona Extra served as the presenting sponsor for Rams’ season-opener on Aug. 13, the first Rams game in Los Angeles in 22 years. The brand also will be integrated into the Rams’ Hispanic Heritage Month program in October. The Rams’ season kick off also will mark the introduction of Corona Extra draft to the Los Angeles market. Already available in the traditional 12 oz. bottle, 7 oz. bottle and 12 oz. and 24 oz. cans, draft has only been available in select markets throughout the U.S.
he bonds with three generations of Russells and explores what has made Wild Turkey a legend in the bourbon business. That will be followed by McConaughey demonstrating his creative vision in a series of advertising spots, directing and starring in a global campaign slated to begin running this month. He will also be featured in a print campaign.
Promo Parade Icelandic Glacial Launches New Campaign: “Must Be Something in the Water” Icelandic Glacial has launched its newest campaign, “Must be Something in the Water.” The campaign features 30-second videos that highlight some facts about Iceland and its residents amid a testy and unusual political climate in the U.S. The Icelandic bottled water company highlights some of the country’s greatest achievements, including electing the first female president in the world nearly four decades ago and having the world’s highest life expectancy. The campaign includes a social media component calling on consumers to #ThankTheWater.
#Scalping4Tix: FC Bayern Fans Cut Hair To Meet Players at Paulaner Bräuhaus
Naked Juice Launches 2016 #DrinkGoodDoGood Social Campaign
Paulaner, Munich’s premier brewery and the global bier sponsor of FC Bayern Munich, gave fans of Germany’s most beloved soccer team the once in a lifetime chance to get up close and personal with stars of the team during their latest U.S. visit. Fans lined up outside the Paulaner Bräuhaus to participate in a promotion called #Scalping4tix. It involved showing their love of their team and the game by having FC Bayern Munich’s logo shaved into their heads by celebrity barbers from Denny Moe’s Superstar Barbershop. By participating in #Scalping4tix, they gained access to a VIP meet and greet with team captain Phillip Lahm as well as a chance to win tickets to the team’s sold out match against Spanish rival, Real Madrid at MetLife Stadium. The partnership of the team and Paulaner has been one of the more visible sponsorships in European Soccer for years. FC Bayern Munich has celebrated their four-time back-to-back German league championships with a Paulaner bier shower -- a postgame tradition where they pour 3 L glasses filled with Paulaner Hefe-Weizen over their teammates’ heads.
Nearly 30 million people in the U.S. live in food deserts – neighborhoods without access to affordable, quality, fresh fruits and vegetables. What is even more alarming is that a recent survey shows 60 percent of Americans don’t actually believe food deserts exist in their own communities. In an effort to raise awareness and provide fresh produce where there is none, Naked Juice – a brand that packs a bounty of fruits and vegetables into every bottle and believes everyone should be able to enjoy these foods every day – has launched the 2016 #DrinkGoodDoGood cause campaign. Once again partnering with Wholesome Wave – a national nonprofit founded by James Beard award-winning chef Michel Nischan that works to make fresh, healthy food affordable and accessible for low-income families – Naked Juice is kicking off the campaign with a 250,000-pound contribution and asking consumers to get involved as well. For every fruit and veggie selfie shared with #DrinkGoodDoGood, Naked Juice will donate an additional 10 pounds of produce.
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The September 2016 issue of BevNET Magazine.