Beverage Spectrum April 2008

APRIL 2008

SUDDEN IMPACT

aiming for profits with energy shots

ALSO THIS ISSUE: KIDS BEVERAGES SPARKLING JUICES CSDs AND CORN PRICES

APRIL 2008

vol.

6 :: no. 3

more than academic A RETAILER’S GUIDE TO SCHOOL BEVERAGE GUIDELINES

17

Cover Story

28 :: LITTLE COMPETITION

26

Departments

28

8 :: BEVSCAPE Dr Pepper Spinoff Completed

Energy shots aim for big profits

10 :: CHANNEL CHECK

Special Section

Coke’s Prize Purchase

17 :: KIDS BEVERAGES A retailers guide to school

12 :: NEW PRODUCTS

beverage guidelines

Daily’s Keeps Mixing it Up 44 :: PROMOTION PARADE

Features

Nutrisoda Goes Biking 26 :: PUMPING GAS, AND SOFT DRINK PRICES How corn and gas are making for an expensive mix 38 :: SPARKLING JUICES Not done fizzing 42 :: BRANDS IN TRANSITION Fiji goes green 46 :: EXPO WEST IN REVIEW A crunchy old time at Expo West 48 :: SHOW PREVIEW Fancy Foods in Chicago

Columns

4 :: THE FIRST DROP Charity-Flavored Water 6 :: PUBLISHER’S TOAST Confessions of a Trade Show Junkie 40 :: GERRY’S INSIGHTS Michael Pollan, Natural Foods’ Frenemy

Beverage Spectrum is published monthly with combined issues in January/February, May/June, July/ August and November/December by Beverage Spectrum Publishing, Inc., a wholly owned subsidiary of BevNET.com, Inc. One Mifflin Place, 3rd Floor, Cambridge, MA 02138. Periodicals postage paid at

50 :: SHOW PREVIEW FMI in Las Vegas

Boston, MA and additional mailing offices.

POSTMASTER: Please send address changes to Beverage Spectrum Magazine, Subscriber Services, One Mifflin Place 3rd Floor, Cambridge, MA 02138-9917.

APRIL 08 :: BEVERAGE SPECTRUM

3

THE FIRST DROP

A NEW FLAVOR: CHARITY

iven their typical concentration of youthful liberalism and cutting-edge faddishness, a college campus can be a hard place to be a bottled water mogul. Just ask University of Pennsylvania freshman Ben Lewis.

“Everyone likes to pick on the bottle water business,” he says of his fellow students. “It’s really the thing to do these days.”

That can’t be music to the ears of Lewis, whose precocious entry into the beverage business started when he launched the Give brand of bottled water last August.

Still, when Lewis explains what his business does, the criticism tends to soften. The conceit behind Give is pretty simple: the company donates ten cents for every bottle you buy to a cause. There are three SKUs. So if you buy a blue bottle, you help fight child hunger; buy a pink bottle, you help fight breast cancer; buy a green bottle, you help save the environment. If the majority of spring waters are generally equal in terms of quality and taste, as most consumers are starting to believe, the idea is that a cause might make Give first among equals.

To Lewis’ own amazement, it’s turned into a growing phenomenon, having gone from a local brand in his hometown of Pittsburgh to a large

4

BEVERAGE SPECTRUM :: APRIL 08

chunk of shelf space in Whole Foods’ mid-Atlantic region.

“It’s cool,” he says. “As we grow and build up our brand, the top of our priority list will be to create more ways to give. People say, add a bottle for this charity or for that one. It’s great. There’s so much potential for expansion – not only into other causes, but into other product lines down the road.”

Distributors and retailers are starting to have legitimate concerns about the long-term momentum of the bottled water category. Media and environmental forces are fast turning against bottled water for environmental reasons. With that backlash spreading, but consumer habits with regard to water now strongly established, Lewis sees his company as allowing bottled water consumers to self-levy a sin tax.

“I’m not going to sit here and tell you that bottled water is a rational product,” he says. “At home, I don’t drink it. But there are 20 million Americans that drink bottled water every year.

Give isn’t trying to reverse a consumer trend.

There’s nothing I can do about that. But if Give can just leverage the power of this industry and use it as a vehicle to do some good – and I think we’re doing that – if we can, that’s the success.”

We’re not pointing Lewis out as the next big thing – although there’s obviously plenty of potential here for Give to resonate with the folks who were early adopters of bottled water in the first place – but we’re pointing out his product as the kind of clever and classy marketing innovation that can help keep the category growing.

But with any number of new causes available as SKUs, with a brand conceit that could be extended to several different kinds of products, we think Lewis has figured out something important.

He’s figured out that in cynical times, a little earnestness can be very refreshing.

PUBLISHER’S TOAST

TRADE SHOW JUNKIE

PUBLISHER Barry J. Nathanson bnathanson@bevnet.com EDITOR Jeffrey Klineman jklineman@bevnet.com ASSOCIATE PUBLISHER John McKenna jmckenna@bevnet.com ART DIRECTOR Matthew Kennedy mkennedy@bevnet.com GRAPHIC DESIGNER Amadeu Tolentino atolentino@bevnet.com ASSISTANT EDITOR Matt Casey mcasey@bevnet.com PRODUCTION MANAGER Adam Stern astern@bevnet.com

’ve been a trade show junkie for over 25 years now. Although I hate the travel, the excitement of arriving on the floor of the show at its opening still drives me. After all, where else can you see so many new brands and old friends at the same time? For 16 years now, I’ve traveled the beverage circuit. FMI, NACS. NBWA, Interbev, NACDS, IBWA, Fancy Foods, Expos East and West, and an array of others have filled my calendar. I spend my time critiquing the latest offerings from a taste, packaging and marketing perspective. I especially get a kick out of seeing old friends in new positions. (We have quite an incestuous industry: some have worked at 10 or more different companies over the years.)

The new launches were usually the province of the major food shows, and FMI and NACS were the gold standards. That is no longer the case. To anyone who attends the Expo East and especially Expo West, the beverage world has tipped towards these venues. I find it interesting that the newest and most innovative brands are being exhibited at these shows. While the Natural and Organic sector is only a smidgen in the total sales of the industry, almost all the attention has been devoted to it. Take a walk around the recent Expo West and look at our show coverage on BevNET and you’ll know what I mean. Just as important, as you cruise the aisles, you see the retailers of all the major grocery, c-store, mass, club and drug chains strongly represented. The distributors and beer wholesalers are equally in

6

BEVERAGE SPECTRUM :: APRIL 08

attendance . They know a good thing when they see it.

What do these shows offer that the traditional beverage shows seem to have lost? In a word, energy. They have captured the zeitgeist as the place to be heard, to meet the principals and exchange in real dialogue. They have captured the entrepreneurial spirit. While their specialty retailers and small chain formats don’t drive the product volumes of their larger brothers, they share that magical entrepreneurialism. With the “big guys” of the beverage industry buying up many of the successful brands from the last five or ten years, the next generation of products have started to emerge, and they’re emerging at what once had been the smaller shows. That those events have grown so much is evidence that they are the places to seek out something new.

BUSINESS MANAGER John Schinn jschinn@bevnet.com SUBSCRIPTION INQUIRIES Adam Stern astern@bevnet.com 617-715-9679 ONLINE RENEWALS & CHANGES www.bevspectrum.com/subscribe ARTICLE REPRINTS (500 copies or more) FosteReprints 800-382-0808 x142

BEVERAGE SPECTRUM PUBLISHING INC. CHAIRMAN John F. (Jack) Craven jack@bevnet.com PRESIDENT & EDITORIAL DIRECTOR John Craven jcraven@bevnet.com

EDITORIAL 1 Mifflin Place, Suite 300 Cambridge, MA 02138 ph. 617-715-9670 fax 617-715-9671 ADVERTISING 1123 Broadway, Suite 210 New York, NY 10010 ph. 212-647-0501 fax 212-647-0565

Barry J. Nathanson, Publisher

BPA Worldwide Member, June 2007

S

Y

PB

U IGN

8

7/0

0 07/

Run up the score on milk sales.

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Bevscape

WHAT’S HAPPENING ACROSS BEVERAGES

THE DOCTOR IS IN Copy Investors at CadburySchweppes decided overwhelmingly that it was time to sever their beverage business from its chocolate-centered parent company. What that vote will mean for the beverage company and the industry as a whole, though, is up for debate.

Industry Analyst Manny Goldman said he thinks the vote will bring little more than a name change to the soon-to-be Dr Pepper Snapple Group, but George Kalil, President of one of Cadbury’s largest U.S. bottlers, hopes that the restructuring will mean more.

“If it goes through in the fashion it’s supposed to go through then I think that it could be very good for everybody,” Kalil said, “for the employees and the network.”

Kalil said that high-level decisions would have to be easier when top officers can organize meetings simply by yelling down the hall of their Plano, Tex. headquarters. Currently, he said, American brass has to bring ideas to their London bosses before making any changes. That creates logistical snags, as nearly 5,000 miles, six time zones and the Atlantic Ocean separate Plano from London.

Removing those snags, Kalil said, will allow the company to more nimbly adopt new ideas, and removing the foreign ownership could buoy the morale of associated independent bottlers.

Kalil’s family has been running the Kalil Bottling Company for 60 years, and Kalil said bottlers felt more invested in the company before Cadbury Schweppes PLC and the Carlyle Group bought Dr Pepper/ Seven Up in 1995.

“We all felt like we owned part of it,” Kalil said. “That’s not easy to do when you’re part of a foreign owned company.”

He said he hopes the company will take a giant cultural step back before it moves forward, and he thinks Larry Young, who will be the DPSG’s chief executive officer, is the right man for the job.

Goldman agreed that Young – who has served as the CEO of the Dr Pepper/Seven Up Bottling Group since 2005 – represents a good choice to lead the beverage company, but that’s about the only point where Goldman and Kalil agreed.

Goldman said he goes back with Cadbury “a long way,” and he believes the spinoff won’t change how the company operates. Despite its corporate ties to London, Goldman said, the division has effectively functioned as an independent company.

“The confection business and the drinks business are really separate animals,” Goldman said. “Just the nature of the business is different.”Goldman said the two divisions usually didn’t even share finances, but that didn’t mean that the two businesses didn’t have things in common.

Both companies, Goldman said, compete as “leaner and meaner” competitors in fields dominated by a handful of giants. Cadbury wrestles with Hershey and Nestle, and Dr Pepper battles for shelf space against Coke and Pepsi.

While that may be true, Cadbury took pains to streamline their drinks division before spinning it off.

Between 2003 and 2005, Cadbury integrated Dr Pepper/Seven Up, Mott’s and Snapple into one organization. Between 2006 and 2007, they bought total control of the Dr Pepper/Seven Up Bottling Group and purchased other third-party bottlers, and, last year, Cadbury cut 470 U.S. drinks division jobs ahead of the upcoming demerger.

The resulting company will command the power of a long list of beverage brands including A&W Root Beer, Canada Dry Ginger Ale, Sunkist, and Sunny Delight.

Goldman said the management team in place has done a fine job of corralling those disparate brands, and believes they’ll probably perform at least as well when spun-off. Kalil said he expects the company to experience a period of adjustment, and hopes they will emerge as a better company.

ENDORSEMENT WATCH Gotta wonder if there’s some dissension in the Red Sox’ ranks.

No, not over anyone’s share of World Series dough, either. It’s probably over the variety of enhanced water they’re throwing into the clubhouse cooler. David Ortiz is well known as one of the big guns hawking vitaminwater for Coke, but Pepsi trucks in the Boston area now show catcher – and Sox team captain – Jason Varitek shilling for SoBe Life Water.

Fenway Park is a Coke stadium, to be sure, but who can argue with the Captain? And what would Ted Williams, think, anyway? Chances are, he’d think “where’s the damned Moxie?” Maybe in the freezer with the rest of you, Ted…

8

BEVERAGE SPECTRUM :: APRIL 08

Meanwhile, look who else is on the ball for vitaminwater? Yep, there he is, basketball’s second coming, LeBron James. Remember the King James comic book for PowerAde? Betcha they don’t do volume two with him in a vitaminwater uniform.

NOW PITCHING FOR SOBE, THE CATCHER!

A-B LOOSENS THE APRON STRINGS Since the late ‘90s, the big boys of beer have successfully swallowed up the competition, holding wholesalers to exclusive contracts and dominating shelf space. Now that Darwinian order appears to be backfiring. Consumers want variety – read: crafts and imports – and wholesalers want to deliver it.

Anheuser-Busch, which has been under pressure from wholesalers, is trying to placate them and bring a little variety to your consumers. Distributors unable to carry A-B’s “aligned brands”—primarily InBev offerings like Stella Artois or Grolsch—because of statutory franchise laws will now be allowed to carry other beers, water or tea, but not wine or distilled spirits from companies other than A-B or its affiliates. While A-B is working to minimize competition with its own brands, the hope is that the arrangement will re-energize its relationship with distributors.

Meanwhile, A-B has looked within its own product line to capitalize on the craving for crafts, which are growing faster than the overall beer segment. Although its Michelob line has lagged in recent years, A-B is attempting to reinvent the “draught beer for connoisseurs” turning to a soon-to-be-launched Michelob Brewing Co. to foster A-B’s fuller-flavored beers. By turning the producer of products like Michelob, Michelob Porter, AmberBock into its own little unit, letting them experiment with old-style and new beers – like a dark wheat Bavarian-style, due out later this year – it might be able to promote its place as a home for better brew.

BLUE MOON RISING Blue Moon – brand of the year.

That’s the word from IRI, which recently released its Top 30 Beer Brand Performers ranking, the result of intensive share vs. volume growth pricing in the last year.

With the top three coming from Blue Moon, the Sam Adams seasonal line and Heineken Premium Light, the real big movers of the beer category continue to be exposed: craft, craft-y and imports.

“The historic trend of consumers trading up and paying premium price for their favorite brands continued in 2007,” said Bump Williams, general manager, IRI Beer, Wine and Spirits Practice. “In fact, 20 of the top 30 Beer performers are high-end brands that include 13 imports and seven craft brands.

Brewers, Distributors and Retailers are doing a phenomenal job of

meeting the ever-changing tastes of consumer demands with their new product innovations. The key now is getting the proper amount of shelf space and distribution in the right stores across multiple trade channels to support these power brands.”

The Top 30 Beer Brand Performers ranking is designed to highlight the brands that experienced significant year-over-year growth across total U.S. supermarkets in 2007. In addition to looking at volume and dollar sales, IRI also examined pricing, share growth and incremental volume and dollar contribution.

It’s not that the big brewers aren’t getting results – all three big light brands made the top 10. But the IRI poll shows retailers where the tastiest trends are.

IRI TOP 30 BEER BRAND PERFORMERS IN 2007 TOTAL U.S. SUPERMARKETS

1. Blue Moon Belgian White Ale

16. Model Especial

2. Samuel Adams Seasonal

17. Michelob Ultra Light

3. Heineken Premium Light Lager

18. Dos Equis XX Especial Lager

4. Stella Artois Lager

19. Samuel Adams Light

5. Newcastle Brown Ale

20. Sierra Nevada Pale Ale

6. Coors Light

21. Michelob Golden Draft Light

7. Bud Light

22. Heineken

8. Yuengling Traditional Lager

23. New Belgium Fat Tire Amber Ale

9. Miller Lite

24. Grolsch Lager

10. Samuel Adams Boston Lager

25. Dos Equis XX Amber Lager

11. Keystone Light

26. Steel Reserve High Gravity Lager

12. Corona Light

27. Red Stripe

13. Tecate

28. Busch Light

14. Guinness Draught

29. Shiner Bock

15. Samuel Adams Variety Pack

30. Guinness Extra Stout

*Minimum of 500,000 cases sold in total U.S. supermarkets for 52 weeks ending Dec. 31, 2007

APRIL 08 :: BEVERAGE SPECTRUM

9

Channel Check

april 2008

SPOTLIGHT CATEGORY

Water 52 Weeks ending 3/23/2008 Hey, look at that – this set of water numbers, which has always included functional products like vitaminwater and Propel for some reason known only to the folks at IRI – shows just how psyched the Coke folks should be over their purchase of Glaceau. When you bring in a brand that has roughly the same sales as your top-selling water, and watch it leave one major opponent in the dust by a greater than 2 to 1 margin, you think, hey, it cost us, but it was worth it. And look further down, too – where smartwater is within shouting distance of both Evian and Fiji.

The high end is still growing, the functional side is going gangbusters, and even beloved hippie bottle maker Nalgene just caught a punch in the gut. Maybe the water business isn’t the worst place to be?

CONVENIENCE/PET STILL WATER

Dollar Sales

Change vs. year earlier

Private Label

$669,923,500

19.9%

Aquafina

$503,968,400

-2.0%

Dasani

$443,769,400

-2.6%

Glaceau Vitaminwater

$435,033,300

115.6%

Poland Spring

$245,097,800

-7.4%

Propel

$192,249,100

-1.6%

Arrowhead

$183,041,200

2.4%

Deer Park

$137,399,100

-6.2%

Nestle Pure Life

$124,516,100

28.9%

Crystal Geyser

$109,302,400

9.9%

Ozarka

$101,640,100

0.9%

Ice Mountain

$98,465,900

7.3%

Zephyrhills

$86,985,740

0.8%

Fiji

$85,890,540

23.6%

Evian

$78,043,770

-2.1%

Dannon

$67,861,260

-38.8%

Glaceau Smartwater

$55,098,180

110.8%

Aquafina Flavorsplash

$45,104,940

-9.1%

SoBe Life Water

$44,695,220

133.7%

Veryfine Fruit2O

$42,797,800

-27.1%

Heading Up: Glaceau Vitaminwater SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

BOTTLED WATER $5,226,233,000 7.1%

TOPLINE CATEGORY

VOLUME

52 Weeks ending 3/23/2008

ENERGY DRINKS $837,647,500 20.8%

BEER

SPORTS DRINKS

$9,424,535,552 3.7%

$1,715,877,000 4.6%

BOTTLED JUICES

TEA/COFFEE

$3,795,195,000 2.1%

$1,465,509,000 13.7%

SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

10

BEVERAGE SPECTRUM :: APRIL 08

RTD TEA

Dollar Sales

Change vs. year earlier

ENERGY

Dollar Sales

$352,364,800

Change vs. year earlier

20.5% 36.2%

AriZona

$293,600,300

5.6%

Red Bull

Lipton

$273,762,600

38.2%

Monster

$142,218,700

Snapple

$131,242,800

8.2%

Rockstar

$98,153,490

20.6%

Full Throttle

$42,401,350

-10.7% 17.3%

Lipton Brisk

$88,399,760

2.1%

Diet Snapple

$82,300,510

-3.9%

Amp

$29,944,210

Nestea

$65,959,210

23.4%

SoBe No Fear

$23,035,730

-36.9%

Lipton Iced Tea

$43,442,320

-26.4%

Monster XXL

$15,267,410

113.3%

Private Label

$36,499,740

13.0%

SoBe Adrenaline Rush

$13,746,110

-24.1%

Lipton Pureleaf

$27,204,140

N/A

Rockstar Juiced

$13,018,690

187.3%

Amp Overdrive

$10,840,910

1,011.1%

Nestea Enviga

$25,954,920

190.4%

52 Weeks through 3/23/08 SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

Heading Up: Amp Overdrive

RTD COFFEE/CAPPUCCINO

Dollar Sales

SPARKLING JUICE

Dollar Sales

Change vs. year earlier

Frappuccino

$191,353,900

4..4%

Welchs

$17,048,570

-0.8%

Doubleshot

$25,705,930

-7.8%

Martinellis Gold Medal

$13,672,850

-0.2%

$10,935,000

10.2%

Heading Up: Enviga

Change vs. year earlier

52 Weeks through 3/23/08 SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

Starbucks Iced Coffee

$14,026,930

29.6%

Izze

Bolthouse

$12,347,460

13.8%

Orangina

$6,774,603

12.9%

$5,165,446

6.3%

Doubleshot Light

$11,048,510

17.5%

Private Label

Godiva Belgian Blends

$8,082,136

54.3%

Meiers

$4,167,706

-13.8%

Cinnabon

$2,115,872

771.9%

RW Knudsen Family

$3,787,302

21.8%

Private Label

$1,743,767

821.2%

Kristian Regale

$2,960,995

-7.4%

Lorina

$2,359,196

-7.5%

Crystal Geyser Juice Squeeze

$2,171,866

10.7%

Hillside

$725,917

142.4%

Starbucks Cappucino

$638,505

70,655.4%

52 Weeks through 3/23/08 SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

Heading Up: RW Knudsen Family

SPORTS DRINKS

BEER

Heading Up: Cinnabon

Dollar Sales

Change vs. year earlier

52 Weeks through 3/23/08 SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

Dollar Sales

Change vs. year earlier

Gatorade

$626,205,700

-9.4%

Bud Light

Powerade

$250,670,800

16.2%

Miller Lite

$747,077,504

3.5%

Gatorade Rain

$155,167,500

16.6%

Budweiser

$738,134,336

-3.5%

Gatorade Frost

$140,970,300

-2.5%

Coors Light

$664,185,088

6.0%

Gatorade All Stars

$134,747,000

16.3%

Corona Extra

$483,936,384

-1.4%

Gatorade Fierce

$88,257,900

-7.2%

Heineken

$321,705,728

5.3%

Gatorade X Factor

$78,292,890

-17.2%

Natural Light

$296,983,904

1.0%

Gatorade AM

$71,601,050

610.4%

Busch Light

$220,814,720

4.4%

Gatorade G2

$34,635,810

N/A

Michelob Ultra Light

$212,028,768

4.2%

Powerade Option

$19,007,640

12.3%

Miller High Life

$181,333,024

3.2%

Heading Up: Gatorade AM

52 Weeks through 3/23/08 SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

$1,451,717,888

3.3%

Heading Up: Coors Light

52 Weeks through 3/23/08 SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

APRIL 08 :: BEVERAGE SPECTRUM

11

NEW PRODUCTS BEER

RTD TEA

Miller Brewing Company has rolled out MGD 64, a reformulation of MGD Light that has just 64 calories, throughout the Midwest. Additionally, the brewer is testing MGD 64 in Arizona, San Diego and Sacramento. No other beer on the market has fewer calories than the new MGD 64. The roll-out includes activities in some places consumers may not expect to experience MGD 64 such as spas and health clubs, as well as some additional activities that consumers will discover throughout the beginning weeks in March. MGD 64 has only 64 calories and 2.4 grams of carbohydrates per 12 oz.

For more information, call (414) 931-3848.

For the past three years, Anheuser-Busch brewmasters have brewed special batches of beer crafted to complement the changing seasons.

Sun Dog Amber Wheat is stepping up to fill the shoes of the very popular Spring Heat Spiced Wheat, which has graduated to a year-round offering known now as Shock Top Belgian White.

Jack’s Pumpkin Spice Ale, Winter’s Bourbon Cask Ale and Beach Bum Blonde Ale will continue to be available during their respective seasons. Sun Dog is an unfiltered beer, with a naturally cloudy appearance and fuller texture which allows it to stand up to spicy foods like Thai noodle salads and Cuban sandwiches. Sun Dog is brewed at Anheuser-Busch’s Fort Collins, Colo., brewery and contains 5.3 percent alcohol by volume. For more information, call (314)577-9629.

Hoegaarden, the Original Belgian White Beer, will be available in 12-packs beginning Monday, March 10. Hoegaarden is brewed in Belgium and imported to and distributed in the United States by Anheuser-Busch Inc. Hoegaarden is an unfiltered wheat beer with a soft body, cloudy appearance and thick, frothy head.

It’s brewed with real Curaçao orange peel and a dash of coriander and was the Gold Medal winner at the 2006 World Beer Cup. This product will be distributed nationally and will be priced by wholesaler decision. For more information, call (314)577-9629.

12

BEVERAGE SPECTRUM :: APRIL 08

Skae Beverage International has launched the latest additions to its successful New Leaf line with Diet New Leaf teas. Choosing to release diet versions of the widely popular Blue Tea, Diet Blue Tea Lemon and Diet Blue Tea Peach will be available this spring. Pairing blue tea with lemon and peach has allowed for a distinctive citrus and fruit blend unlike any diet RTD tea available on the market.

Sweetened with Splenda, New Leaf diets maintain the integrity of the original lemon and peach flavors. Diet New Leaf will be available in the trademark sophisticated 16.9 oz proprietary glass bottle. The MSRP would be $1.49- $1.79 and distribution will be national. For further information please visit: www.drinknewleaf.com.

In response to growing consumer demand, ITO EN has expanded its 2 liter offerings of TEAS’ TEA beverages to include its Golden Oolong variety. TEAS’ TEA 2 liter bottles are also available in Green Jasmine, Green White and Pure Green varieties. They retail for $4.69 each and can be found at mass merchandise stores, grocery stores and specialty natural food retailers nationwide including Whole Foods, Super Target, Bashas’ Supermarket and Wegman’s. TEAS’ TEA can also be ordered at www.itoen.com. For more information, please call (707) 327-6413.

JUICE Naked Juice has released Bare Breeze, a refreshing super-premium, 100 percent juice with no added sugar or preservatives. Naked Juice Bare Breeze is available beginning March 31 in two tempting flavors: Watermelon Chill and Peach Mangosteen Bliss. Watermelon Chill mixes watermelon and lime, along with strawberries, a hint of apples, and white grapes for good measure.

Peach Mangosteen Bliss blends juicy peaches and exotic mangosteen, along with apples, a hint of lemon, and white grapes. With fruit such as watermelon and mangosteen never-before-featured in the more than 25 flavors offered by Naked Juice, the crisp, fresh creations are a unique offering among the growing super-premium juice catego-

ry. Watermelon Chill and Peach Mangosteen Bliss will be available nationwide for a suggested retail price of $3.19 per 15.2 ounce bottle. For more information call 626.633.8384.

Sun Shower has introduced Stamina Superfood Smoothie, a new, all natural, 100% juice smoothie which contains over 20 essential vitamins, nutrients, amino acids, electrolytes, herbs and antioxidants. Stamina helps enhance energy and endurance while providing enhanced nutrition and the same great taste of Sun Shower’s™ other 100% nectarine juices. For more information, call (312) 768-7376.

Bossa Nova is introducing a line of new juices made with these superfruits: acerola, the highest Vitamin C fruit; goji, the highest carotenoid fruit; and mangosteen, a xanthone-rich fruit. This led to the creation of a full line of beverages that retain the best qualities of these fruits. The full line of

NEW DRINK REVIEWS Beaver Buzz Black Currant Energy

Bossa Nova Superfruit Juices features the company’s five original açai juices as well as five new flavors: Acerola Juice with Mango and Acerola Juice with Red Peach, Goji Berry Juice with Tart Cherry, Mangosteen Juice with Passion Fruit and Mangosteen Juice with Dragonfruit. These 10 oz. products will be distributed nationally with an MSRP of $3.29.

ENERGY DRINKS Bawls Guarana has introduced G33K B33R – the first-ever high-caffeine root beer, inspired by root beer fans everywhere who want to let out their inner geek! A rarity in the root beer world, G33K B33R packs a caffeine kick equal to a cup of coffee and nearly three times that of traditional sodas. Written in “Leet Speak,” a language popular among techies where letters are substituted with numbers, G33K B33R’s refreshing, root beer flavor is spiked with guarana to deliver a natural caffeine kick perfect for anyone in need of a “bounce.”

This product will be marketed nationally and will be line-priced with other Bawls offerings. For more information, call (305) 531-9708.

ENHANCED WATER

King 888 Energy Olade DNA Energy TeaZazz Franks Energy Amp: New Flavors Vita 500 Nitro2Go Instant Energy Simply Originals Red Bull Cola Java Monster: New Flavors Nos Powershot Bawls G33K B33R Virgil’s Real Cola From March 28, 2008 to press time.

To see reviews, visit www.BevNET.com

PepsiCo has reformulated its Aquafina Alive Nutrient Enhanced Water Beverage lineup, including a new option with 10 percent of the daily recommended value (DV) of fiber. Aquafina Alive, a line extension of the nation’s leading water brand, adds more functionality to PepsiCo’s leading hydration portfolio. Aquafina Alive Satisfy (10-Calorie Peach Mango, with 10% DV of fiber) is one of the only waters on the market with a significant amount of fiber. Protect (Calorie-free Berry Pomegranate, with 10% DV of Vitamins E and C) is a good source of E and C vitamins. Energize (Calorie-free Orange Lime, with caffeine, 10% DV of Vitamin B) is enhanced with about as much caffeine as an average cup of coffee. Hydrate (Calorie-Free Lemon, with electrolytes, sodium and potassium) is enhanced with electrolytes to replenish the nutrients an active body loses throughout the day. 20 oz. pricing will be $1.19-$1.29, while 16.9oz 6-pack pricing is $2.50-$3.29. For more information, call (914) 253-2437.

APRIL 08 :: BEVERAGE SPECTRUM

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(ALF 0AGE "EV 3PEC VERT PDF 0-

SPIRITS Stolichnaya Vodka has launched Stoli Blakberi, the newest avor to join the award winning family of imported vodka avors. The new avor joins the popular, award winning family of Stoli avors that includes Stoli Blueberi, Stoli Vanil, Stoli Razberi, Stoli Cranberi, Stoli Strasberi, Stoli Citros and Stoli Ohranj. Stoli is supporting the launch of Stoli Blakberi with a full array of programming including Blakberi specific national and local advertising, on and off-premise point-of-sale materials and on-premise consumer sampling events in key markets across the U.S. Stoli Blakberi will be available in four sizes – 1.75 L, 1.0 L, 750 ml and 50 ml – and will launch nationally in May, 2008. It will retail for a suggested price of $23.99 for a 750 ml.

For more information, call (203) 254-8225.

Daily’s, America’s premier cocktail and mixer, has introduced a new line of all natural martini mixers. Daily’s Sour Apple, Blueberry, Lemon and Pear Martini Mixers will make their retail debut this April, just in time for the refreshing summer cocktail season. Daily’s Sour Apple, Blueberry, Lemon and Pear Martini Mixers, available in 20 oz. PET bottles with Daily’s proprietary pour spout finish, will have a suggested retail price of $4.99 per bottle. Daily’s will support the launch with national print and on-line advertising and attractive POS materials that include delicious at home recipe suggestions. For more information, call (203) 254-8225.

From Hood River Distillers comes the aptlynamed Spudka vodka. Made with Idaho potatoes and pure, glacier-fed Mt. Hood spring water, Spudka is 80-proof vodka that undergoes a complex 139-plate distillation process, is double charcoal filtered and contains no additives. It sells for $12.95 per 750mL bottle. For more information, call (971) 244-0661.

Smirnoff Vodka has introduced Smirnoff Passion Fruit and Smirnoff White Grape. These innovations feature award-winning Smirnoff No. 21 Vodka immersed with the sweet, yet tart and tropical avor of the popular passion fruit and the crisp, sweet and smooth avor of white grape. Smirnoff Passion Fruit and White Grape join the already existing 11-product Smirnoff avored vodka collection. All are available in 50mL, 200mL, 375mL, 750mL, 1L and 1.75L sizes. The 750mL bottle carries a suggested retail price of $14.99.

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BEVERAGE SPECTRUM :: APRIL 08

A SPECIAL SECTION FROM

more than academic A RETAILER’S GUIDE TO SCHOOL BEVERAGE GUIDELINES

BY: MATT CASEY

T

he next time the school bell rings and students flood into your store, pay attention to what they buy. It may be different from what they bought a few years ago. Those teens and tweens may be handing you wadded up bills to pay for – gasp – healthier beverages.

Or maybe not. It all depends on where you are and what your local school districts are doing about school beverage guidelines – particularly those defined by the Alliance for a Healthier Generation, former President Bill Clinton and the American Beverage Association.

The agreement – which sets standards for what beverages should and shouldn’t be available in schools –developed as an almost inevitable consequence of America’s growing awareness of its growing waistlines. Politicians and pundits have railed about childhood obesity for years, with targets ranging from Lunchables to Marshmallow Fluff. In 2005, nutritionists noted that America’s rising obesity rates coincided with

their rising consumption of high-fructose corn syrup. After that, it was only a matter of time before experts chose the beverage industry as the next target in the battle for fit and trim kids.

But ABA leaders – with a little help from the most popular president since John F. Kennedy – turned their time in the cross-hairs into an opportunity to lead. The Association shook hands with the Alliance for a Healthier Generation in May 2006 on guidelines that will, among other things, eliminate full-calorie sodas from schools. The goal of this landscapechanging agreement is to reduce childhood obesity and diabetes by teaching kids to eat and drink healthier products.

“We like to hope that in several years they might be looking for that bottled water or that diet drink or that mid-calorie drink when they’re hanging out at the 7-Eleven,” said Brian Herr, executive director of the Alliance.

In some places, that may be exactly what happens. But – just like Weight Watchers –

Former President Bill Clinton looks on as Susan Neely, President of the American Beverage Association, speaks at the press conference for the Alliance for a Healthier Generation, a joint initiative of the William J. Clinton Foundation and the American Heart Association at the President’s office in Harlem, New York, Wednesday, May 3, 2006. (Gina Gayle/U.S. Newswire)

individual results may vary. So don’t start tossing out your Coca-Cola in favor of no-calorie beverages yet.

First, the ABA plans to finish rolling of the new guidelines at the start of the 2009 school year, so they may not have gotten to your neighborhood yet. Second, even if they have, that doesn’t mean that students who drink nothing but water, 100 percent juice and non-fat milk in school are going to stick to those same healthy choices once the school day is over.

Their reactions will depend on how school officials “frame” the new rules, according to Irwin Levin, a professor of psychology and marketing at the University of Iowa. Levin said students at schools that properly usher in the new rules will probably adopt healthier beverage habits. But if a school fumbles the transition, Levin said students could sour on healthy drinks and cling to full-calorie sodas.

More than 2,000 schools have already transitioned into the Alliance’s beverage plan, and thousands more will have to convert in the next year. Major bottlers are in the process of converting their stock to meet the calorie, nutrition and portion size constraints that the ABA agreed to. Once they have, they won’t sell anything else in schools.

Until 2009, many schools can enforce whatever metric they like. The Hickman Mills School District in Kansas City, for example, uses the Missouri Eat Smart Guidelines. The policy limits sodas to 50 percent of offered items – though it makes no distinction between diet and full-calorie sodas. According to Leah Schmidt, the district’s director of nutrition services, her students readily accepted the new policy, but she was uncertain if that behavior followed them to the mini-mart.

“Changing their habits may take a little while,” she said.

But Kim Bealle, director of strategy and innovation with the consulting firm Just Kids Inc., thinks kids in some areas have already changed their habits. Bealle recently visited schools in Connecticut – where the state has implemented

Clear Beverage Corporation 8379 W. Sunset Road, Suite 130 Las Vegas, NV 89113 ph. (866) 543-3583 www.kidfuel.com Kid Fuel is a naturally flavored, nutritious drink that offers a healthy alternative to sugar laden soft drinks and fruit juices and gives moms a healthy option that their kids will love. Kid Fuel is made with quality ingredients, no high fructose corn syrup and no artificial flavors, dyes or sweeteners. Kid Fuel contains added vitamins – along with reduced sugar, calories and carbohydrates.

Kid Fuel comes in four fruit flavors: Kiwi-Strawberry, Raspberry,

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BEVERAGE SPECTRUM :: APRIL 08

Grape and Orange. Each 8 oz. serving contains 100% RDA of vitamins B6 and B12 plus added, biotin (20%), vitamins B3 and B5 (20%) and calcium. Kid Fuel is currently available in 4-packs (supermarket), 12-packs (warehouse) and single serve (convenience stores, restaurants, specialty retail). Kid Fuel will soon debut a 24-pack for Big Box retailers.

Crayons Inc. 9201 NE 28th Place Clyde Hill, WA 98004 ph. (415) 515-4709 www.drinkcrayons.com While many of today’s newer beverage offerings appeal to Mom gatekeepers with their low or zero calorie messages, these beverages often have artificial sweeteners, preservatives and/or artificial colors. We’ve found that most beverages with 50 calories or less sacrifice the critical taste appeal with the all-important consumer: kids. At Crayons, we make our refreshing beverages with 33 percent fewer sugar grams while retaining the same

tougher guidelines than those agreed to by the ABA – and kids seem to be doing okay with it.

Connecticut’s policy allows only five kinds of beverages to be sold in schools: water, 100% juice, juice drinks, milk and non-dairy milk products, and all drinks must submit to strict guidelines on sugars and artificial sweeteners. Bealle said the mantra of healthy beverage seemed to have made it out of the vending machines and into student’s homes.

sweetness level that kids love today. Crayons Fruit Drinks also use the world’s first “SugarGuard Protection System” to help control the rate of sugar absorption. Crayons comes in five juice flavors: Outrageous Orange Mango, Tickled Pink Lemonade, Wild Watermelon & Berries, Redder-Than-Ever Fruit Punch and Kiwi Strawberry. Crayons also offers three sports drink flavors: Playoff Punch, Leaping Lemon Lime and Breakaway Berry.

Bealle said, and stores could draw them in by stocking an after-school refueling station with healthy drinks and healthy snacks. But Bealle’s healthy-kids ambitions might collide with convenience store realities.

Jeff Lenard, vice president of communications for the National Association of Convenience Stores, said store operators have to remove a product from their shelves for each item that they add.

“Our stores aren’t accordions,” he said.

And, he said, convenience store owners have seen better-for-you ambitions fall apart before.

It wasn’t so long ago, he said, that everyone was talking about organic foods, but the sales didn’t live up to the buzz.

“Everyone will say they want healthy food, and you watch what people buy and it’s often very different,” he said.

He was also wary of modifying a store’s stock

Minimarts sell more bananas than they used to, and nutrition bars are stealing space from packaged sweets, Lenard said. The trend is similar in the cooler case, where diet drinks and fortified waters have gone from fringe offering to beverage staple.

“When I saw kids with brown bag lunches they tended to have a water, or a vitamin water or a Capri Sun,” Bealle said.

That doesn’t mean that all of the school’s health-conscious decisions went over like fireworks on the 4th of July. The state also revamped food offerings, and students disapproved of the new low-fat cookies – so much that one student leaned over to Bealle and said “Bring back the fat.”

The lesson here, Bealle said, is that kids won’t eat something if it doesn’t taste good – and that rule applies just as readily with beverages as it does with cookies, chicken strips and butterscotch pudding. She said retailers near schools could use that knowledge to lasso a loyal customer base. Kids leave school hungry,

to cater to the buying patterns of people too young to vote. Kids make up a small spectrum of the minimart’s customer base, Lenard said, because they spend all day on closed campuses and have little buying power. But there are exceptions to every rule. Lenard visited one store where students streamed in for breakfast, lunch and dinner.

And not every attempt at healthy food in convenience stores has flopped. Minimarts sell more bananas than they used to, and nutrition bars are stealing space from packaged sweets, Lenard said. The trend is similar in the cooler case, where diet drinks and fortified waters have gone from fringe offering to beverage staple.

The Alliance for a Healthier Generation may nudge that healthy trend forward. Herr said

Hint Inc. 2430 Scott Street San Francisco, CA 94115 ph. (917) 593-5974 www.drinkhint.com Hint prides itself on simplicity. Each 15 oz. bottle contains water, a hint of natural flavor and nothing else -- no sugar, no artificial sweeteners, no calories, no carbohydrates and no sodium – making it a refreshing alternative to sodas, juice and other sweetened drinks. Doctors agree that good old H20 is, without question, a most beneficial liquid, but how much plain water can

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BEVERAGE SPECTRUM :: APRIL 08

you drink before craving something more? Hint satisfies those cravings and quenches even the most powerful thirst. It gives bodies young and old what they need most. Hint currently offers nine flavors including Peppermint, Tropical Punch and Cucumber. Give me a Hint!

Honest Beverages 4827 Bethesda Avenue Bethesda, MD 20814 ph. (800) 865-4736 or (301) 652-3557 www.honest-kids.com Honest Kids, the nation’s first certified organic kids’ thirst quencher packaged in a portable pouch, is available in three flavors: Berry Berry Good Lemonade, Goodness Grapeness and Tropical Tango Punch. Most kids’ drink pouches have more sugar per once than a can of soda. In contrast, each variety of Honest Kids is low in sugar, organic and provides a day’s supply of Vitamin C.

Given all the negative press about the obesity epidemic amongst children, retailers realize that they need to provide healthier beverage options such as Honest Kids. Honest Kids contains half the calories and sugar of most children’s drinks, making it an attractive choice for parents while still offering a great taste.

TALK TO THE KIDS!

Honest used bright colors and pictures of fruit to give their pouches a youthful – but ageless – personality.

the nonprofit plans to speak to every industry that contributes to the calories burned or consumed by children, and he would love to see the Wawas and 7-Elevens of the world adopt policies for pedaling healthy selections to their younger consumers.

“We hope that the free market will reward those companies that are trying to do the right thing,” Herr said.

While the “right thing” for retailers might be pretty clear – stock healthy products and sell them to kids – it may be a trickier proposition for beverage companies. Crayons President and CEO Ron Lloyd said he expected most entries

into the kids drinks segment to fail because they have not one, but two hurdles to trip over.

First, Lloyd said, kids’ beverages need to appeal to both moms and kids by offering good nutrition, fun, and good flavor. Second, the drinks need to let kids feel as old as they want to at any given moment.

“Kids desperately crave to be a teen, but at the same time they don’t want to be prevented from being a kid when they feel like it,” Lloyd said.

He said his company cleared this second hurdle through clever packaging. Crayons uses 8 oz. slim cans adorned with bright colors, a black oval and a set of distinctive stripes that make

So how do you know if you should prepare for a change of tastes in your teen and tween customers?

Kim Bealle, director of strategy and innovation with Just Kids Inc., said that larger retail chains could hire her company to find out where kids’ tastes are headed, but that service is well beyond the budget of most mom and pop operations. For them, Bealle suggested a simpler solution: talk to the kids that patronize your store. Ask them what they want that you don’t have. You may find that a lot of them want healthier-for-you beverages. If that’s so, you know you need to add more of those options to your cooler case.

Crayons uses 8 oz. slim cans adorned with bright colors, a black oval and a set of distinctive stripes that make them look like, well, crayons.

Switch Beverage Company 201 West 7th Street RIchmond, VA 23221 ph. (866) 875-8423 www.switchbev.com The Switch has the bold taste and nutritional value of a fortified juice, with the carbonated refreshment of a soda. It is the perfect balance of juice and carbonation with no high-fructose corn syrup, no added sugar, no gluten, no preservatives and no artificial colors. The brand’s eight-flavor line includes Black Cherry,

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BEVERAGE SPECTRUM :: APRIL 08

Watermelon Strawberry, Orange Tangerine, Grape, Fruit Punch, Kiwi Berry, Apricot Peach, and Very berry. Each comes packed in either 12 oz glass bottles or 8.3 oz. slim cans (available in schools) and contains 100 percent of a kid’s recommended daily dosage of Vitamin C.

While Hat Brands, LLC 2675 Paces Ferry Road, Suite 100 Atlanta, GA 30339 ph. (800) 747-0912 www.WhiteHatBrands.com Launched by beverage industry and kids marketing veterans, White Hat Brands is committed to becoming a leading force in combating growing children’s health issues like childhood obesity and juvenile diabetes by developing nutritious beverages for “Tweens” supported by a comprehensive marketing plan and innovation calendar.

The company’s flagship product, Dog On It! Fortified Juice

them look like, well, crayons. When a kid wants to feel like a teen, Lloyd said, they can look at the slim-can and think of a Red Bull. When they want to be a kid, they can look at the design and think of refrigerator art.

Honest Beverages used a different design strategy with their Honest Kids line of pouched juice drinks. Founder and CEO Seth Goldman said Honest stayed away from cartoon characters or Power Rangers on their packaging.

Instead, they used bright colors and pictures of fruit to give their pouches a youthful – but ageless – personality.

The design must be working. Goldman said the brand’s growth has been surprising, which could have something to do with its appeal to

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BEVERAGE SPECTRUM :: APRIL 08

Beverage, is loaded with Calcium, Vitamins A, B, C, D, E and Minerals without all the excess stuff you may find in other beverages – no high fructose corn syrup, no artificial sweeteners and no artificial colors or flavors. Dog On It! Is available in Strawberry Lemonade, Berry Punch, Orange Splash, Kiwi Watermelon, Tropical Tangerine. Each is packaged in 6-packs of portion-controlled 8-oz. PET bottles.

retailers. Goldman said Honest Kids offers stores something that many other kids’ brands don’t: a comfortable profit margin.

“This kids’ drinks channel, its one where parents will switch pretty easily based on whatever’s on sale,” Goldman said.

But, he said, parents don’t have a lot of healthy options, and that has allowed his brand to “really take off ” even when the Honest Kids’ price tag can be twice that of products on the same shelf.

That same price differential, Goldman said, could keep Honest Kids from popping up in school channels any time soon, but another tea brand has taken the rush of sodas leaving school vending machines as its cue to enroll for class.

Clayton Christopher, founder and CEO of Sweet Leaf Tea, said his company added 12 oz. plastic bottles to their lineup to get the product into schools in Texas. Students can currently buy Sweet Leaf in about 30 percent of the state’s middle and high schools, Christopher said, and will soon be available in schools in Florida and Colorado.

“It’s a win-win for us,” Christopher said.

“It’s not like we’re selling it at cost, (and) it also does a great job of building the brand with the young consumer.”

And it won’t be long before that young consumer is a grown-up consumer with his or her own disposable income.

Developed specifically for kids, Kid FuelTM is fun to drink AND nutritious — in four great flavors.

PLUS: Kid Fuel

gets noticed on retail shelves with eye catching, innovative, kid-friendly packaging that features 8oz. easy-to-hold, contoured bottles with spill-proof, sip-top caps.

Great margins to drive profits.

TM

For more information and to carry Kid Fuel: Clear Beverage Corporation 8379 W. Sunset Road, #130 Las Vegas, NV 89113 Phone: 866.543.3853 Email: info@kidfuel.com Š2008 Clear Beverage Corp.

PUMPING GAS. AND SOFT DRINK PRICES.

America’s insatiable appetite for gasoline may push up the price of soft drinks in gas stations’ attached minimarts. And everywhere else, for that matter.

BY: MATT CASEY

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BEVERAGE SPECTRUM :: APRIL 08

t’s an unusual equation, and the variables include commodities speculators, the weather, international trade, and congress, but only one constant: corn.

Millers derive high fructose corn syrup, the number two ingredient for most soft drinks, and ethanol, the number two ingredient for gasoline, from the same yellow kernels. The cost of those kernels jumped in the last few months after congressional efforts for energy independence collided with the fallout from a volatile stock market.

Beverage manufacturers have seen those costs passed on to them. Food Business News reported in early April that HFCS cost an average of 18.65 cents per pound, up from an average of 15.7 cents at the same time last year. That’s a 19 percent increase that’s causing financial pain for beverage companies. And that pain will likely travel down the supply chain into the cooler case.

Brian Weber, Vice President of DLR Associates Inc., the makers of Potencia Energy Drink, said he found out about the price hike when his company mixed its last batch, but they got lucky.

His supplier had a stock of HFCS bought last year at the lower price, Weber said, allowing him to dodge any price hikes until at least the next production run. By then, he said, DLR may have another plan in place to deal with HFCS prices.

Bigger companies likely won’t be as nimble.

Coca-Cola Bottling Co. Consolidated, one of Coke’s largest regional bottlers, reported a 14 percent drop in profits in 2007 compared to 2006, partly due to rising sweetener costs. Analysts at the investment bank Morgan Stanley recently cited rising commodity costs as one reason they believed stock in PepsiCo Inc., had become a riskier investment. They also offered insight on how Pepsi could offset the higher cost of HFCS: either increase productivity or raise prices – as much as three percent in 2008, according to analyst Bill Pecoriello.

PepsiCo representatives declined to comment for this article, but their corn-related troubles and those of other beverage companies can be

traced not back to the field, but back to the oil barrel.

Congress mandated gasoline companies to blend 9 billion gallons of ethanol with regular gasoline in 2008 – up sharply from the previous 5.5 billion gallons. The corn-based substitute for oil-based fuel appeals to politicians because it is renewable – taking 97 percent of its matter from the air – and reduces reliance on oil from the conflict-ridden Middle East.

According to Nathan Fields, director of research and business development for the National Corn Growers Association, that high-level mandate has attracted investors who fled the troubled waters on Wall Street. Now dabbling in commodities futures, Fields said those investors are exacerbating the natural swings in corn prices.

Fields said market forces alone would have pushed the price of a bushel of corn beyond the typical $2-4 range, but those newly-arrived investors forced the cost of corn north of $6.00 per bushel on the Chicago Board of Trade.

Ironically, that extra push has led to the slowdown of the industry that attracted investors to corn in the first place. Jon Birger wrote for CNN Money in February that the high price of corn had cut the profit margins on ethanol, so

much so that companies have shelved plans for as many as 50 planned ethanol plants.

Birger reported that the price of corn has jumped 60 percent since the third quarter of 2007, while the price of ethanol has only risen 30 percent. That squeezes companies like Verasum Energy Corporation, Birger said. Verasum’s profits fell from 37 percent to 12 percent in the third quarter of 2007 at the same time that corn costs rose from $2.05 per bushel to $3.32 per bushel. Birger predicts the economics of Ethanol will change, with market forces favoring largescale producers like ADM. But even if the ethanol market cooled, University of Illinois professor of Agricultural Economics Darrel Good said international trade will help keep the price of corn high. China has reduced its corn exports, Good said, draining the pool of internationally available corn and leading more international buyers to get their corn from the U.S. Good said America’s economic climate adds a financial bonus to overseas U.S. corn buyers.

“Importers have not felt the full brunt of the price increase because of the weak dollar,” Good said.

In theory, increasing the cost of a bushel of corn should increase the price of all corn derivatives including high fructose corn syrup, but Craig Ruffolo, a paid consultant for the corn industry, suggested that may not be the case.

HFCS buyers meet with their supplier once a year – typically between October and December – to determine the price of the sweetener, Ruffolo said. During that period last year, corn prices generally hovered below $4 per bushel, though the price spiked in early December.

Ruffolo added that other factors could play in to negotiated prices. Beverage companies turned to HFCS because it was cheaper than sugar, Ruffolo said. Recent media coverage of the sweetener linked it to America’s struggle with childhood obesity, and some beverage companies are switching to cane sugar — a more expensive commodity.

The laws of supply and demand suggest that a drop in demand could negate a price increase.

Maybe it will, but it hasn’t yet.

Corn isn’t the only commodity pushing up the prices on products for groceries and convenience stores.

• MILK: The wholesale cost of milk peaked in July at slightly more than $21 per 100 lbs. before finishing the year just south of $21. That’s more than double the five-year low of $9 farmers sold the white stuff for in March of 2003. Consumers can thank the price of corn feed for contributing to that bullish run.

• OIL: Consumer’s have an up close view of the rising cost of oil, but that pain at the pump stretches down the supply line of pretty much any product on any shelf in any store. It all has to get there somehow, and that somehow is usually a big truck with a big gas tank. Oil nudges prices yet higher, as most plastic packaging is petroleum based, and many stores use electricity from oil-fired power plants to keep products cold, or warm, as the case may be.

• HOPS: Consumers can expect to pay as much as $1 more for a six pack of craft beer in the near future, and they may see some of their favorite smaller brewers go out of business. A global shortage of hops, exacerbated by American farmers trimming their hops crop (in favor of corn) has driven the price of beer’s bitter and aromatic ingredient skyward.

• WATER: It doesn’t take an economist to explain water’s importance, and the price of the flow out of the faucet is on its way up. One Massachusetts community recently increased the price of their water from $1.96-3.60 per thousand gallons to $2.60 to $5 per thousand gallons – and that’s nothing compared to the droughtstricken southeast. Florida, Alabama and Georgia are fighting over the water in one reservoir. States in the southwest are in a battle over water supplies as well, and economics teaches that scarcity breeds higher prices.

APRIL 08 :: BEVERAGE SPECTRUM

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LITTLE COMPETITION ENERGY SHOTS AIM FOR BIG PROFITS

BY JEFFREY KLINEMAN

At a

time when most energy drink brands are publicizing new, bigger cans, it turns out that the biggest profits are actually coming from the smallest packages.

Energy “shots,” concentrated two-ounce versions featuring the same basic energy mix of caffeine and b-vitamins as their larger brethren, are riding a wave of runaway sales multiples that echo the frenzied growth of first-generation energy drinks like Red Bull and Monster.

Last year, just three years after the introduction of 5-Hour Energy, Nitro2Go, ZipFizz and their ilk, the category grew to nearly $100 million. With new brands and new distribution avenues coming on-line, however, the category is expected to reach a new level by the end of the year. According to at least one beverage executive, by the end of the next year, energy shots could be a $500 million business.

“We feel like this is the next big category to explode,” says Mike Fine, who oversees the fast-growing NOS energy brand for the CocaCola Co.’s Fuze subsidiary. Using its newfound ability to get into the Coke distribution network, NOS is planning to jump into the category in a big way in May. By leveraging Coke’s advertising and marketing resources, Fine plans to attempt to emulate the rapid growth of 5-Hour, which increased its sales by more than 400 percent last year.

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BEVERAGE SPECTRUM :: APRIL 08

The reasons for Fine’s optimism are twofold: like espresso to coffee drinkers, energy shots appeal to a slightly different group of consumers than core energy drink users, but they also have significant overlap in that group. In their ability to satisfy consumers’ need for energy, the shots offer retailers a product that complements the energy category, but they don’t fight for cooler space with the traditional 16 oz. and 8 oz. drinks. For some consumers, they are an add-on product to go with their energy drink in a kind of shot-and-chaser strategy.

But for others, the shots are their own target.

Retailers say energy shots are selling to truck drivers and yuppies alike, but that the sales demographics seem to include customers who need energy but might not have drunk energy drinks in the past. With little or no sugar in the product, energy shots are advertised as helping consumers avoid the “crash” associated with sugar-laden energy drinks. Small enough to make it through a TSA airport security check, consumable in one gulp, and low in calories while still high in stimulants, the reduced size of the energy shot also has one main advantage that the previous generation does not: the reduced bladder impact of the significantly smaller volume of liquid -- as some call it, the “pee factor.”

“The bathroom factor is huge,” says Danny Lim, who oversees energy purchases for D&J Market & Deli, in Poulsbo, Wash. “You just

don’t have to go. Truck drivers, they don’t like to pull over.”

To date, the growth of the energy shot has largely centered around 5-Hour Energy, which in one year grew from $13 million to $59 million in convenience stores and from $6 million to $26 million in grocery, drug and mass channels, according to Nielsen and IRI numbers.

While several other big players and a gaggle of independents are moving to compete with 5-Hour, it appears that Living Essentials’ product is the one to beat.

“I probably order about 10 boxes a week,” said Bruce Cullen, who owns a 7-Eleven in Springfield, Ore. “5-Hour seems to be like the Red Bull of the category. It just keeps plugging away. A lot of items, if they’re fads, they’re just boom-then-splat. This has been very consistent.”

For the retailer, the energy shot advantage is threefold: their small size – about about the size of a white out bottle -- allows them to be placed just about anywhere in the store, although they sell best next to the register. Additionally, they can be consumed warm, saving valuable cooler space, and their standard price, about $2.99, gives them a significant ring.

Living Essentials, whose first product was the Chaser brand of hangover remedies, launched 5-Hour Energy in late 2004. After bombarding the television cablesphere with advertisements telling consumers to “avoid the crash” in the past year, Living Essentials has managed to carve out sales numbers that would easily put it in top 10 energy drinks nationwide.

“The kids are buying energy drinks,” says Carl Sperber, the marketing director for Living Essentials, which makes Five-Hour energy.

“We’ve found an audience among working adults. If you’re a 35-year-old man, do you really identify with a product called Monster or Freek?

It’s found appeal with those who just want energy. They want to slam something down in a couple of seconds and feel great for the rest of the day.”

What’s more, the product still is only sold in about 40 percent of the convenience channel. With only modest increases in distribution and pull-through, by the end of the year, 5-Hour Energy could be close to $250 million in sales. Not bad for a product that won’t yet be four years old.

“The big obstacle is continued distribution,” says Sperber. Despite ubiquity in Walgreen’s, 7-Eleven, and other major chains, he says, “We’re still knocking on doors. The big box stores are starting to beckon, and we still don’t have Coke, Pepsi or Red Bull ubiquity yet.”

GIVE CONSUMERS THE HORSEPOWER THEY DEMAND

INTRODUCING NOS POWERSHOT!

• NOS brings a real energy drink brand to the $100 Million Energy Shot category* • Same mango passionfruit flavor profile as NOS Energy Drink • Available May 1 through your local Coke bottler *Source: All Measured Channels AC Nielsen 12 months ending 12.29.07, Estimated Energy Shot Retail Sales Dollars All Measured Channels Full Year 2007 (in 000’s)

NOS 22oz – TRUE RESEALABILITY! BIG PROFITS! • Hottest package in the energy drink category!

• +5083% growth vs YAG* • 2nd in Velocity in the larger than 16oz category* • Unique packaging targets other brands’ high frequency consumers • No cannibalization effect • Higher levels of availability of 22oz enhances the velocity of NOS 16oz *Source: Total US, ACNielsen, Nov 2007 Conv Rtl Channel

But they’re gearing up for it. Last year Living Essentials purchased a 145,000 square-foot warehouse in Wabash, Indiana and taking its staff up from four employees to 30.

“I think if bigger and more legitimate companies get in, things will really grow,” Sperber says. “Having more legitimate players in it always helps the category. But we have a pretty big start, and I don’t know if there’s anything that Coke, Pepsi or Monster will bring to the table that will work better than ours.”

FIRING A POWER SHOT As Sperber describes, that lack of competition from big-name energy drinks has helped the Michigan-based brand take early ownership of the category. But some well-known players, particularly NOS, are about to jump into the market.

“We’re the hot brand at the hot time,” said Fine. “We’re putting it on everybody’s radar.”

NOS, best known for a set of bottles shaped like a popular brand of automotive nitrous oxide booster tanks, has taken off in the past year through a combination of innovative package design and clever channel marketing, climbing to nearly $160 million in sales.

In early May, Fine plans to introduce the NOS Power Shot throughout the Coke system.

Fine says that with Coke’s distribution power, the growing popularity of the energy shot, and the momentum of the NOS brand, Power Shot will quickly turn into a top SKU. “Think about how excited we were when we first saw this nugget of a category nine months ago,” Fine says. “Based on what the NOS brand

is all about, we thought we could take the same brand platform and extend it into this new category.”

Still, there are some skeptics who believe that the strong energy drink players won’t be able to make the transition into shots.

“If it was about taste, rather than the benefit the consumer gets from the product, that might let energy drink makers in,” said one convenience store executive. “It’s going to take some innovative products or a value-added proposition to take the share away.”

NO ATTENTION So, aside from 5-Hour’s television ads – it spent nearly $10 million in 2006, according to A.C. Nielsen Monitor Plus -- why haven’t energy shots picked up much media attention yet? Part of the reason is that the shots are tracked as vitamin supplements, rather than selling in the heavilyadvertised beverage space. But the introduction of energy shots has turned vitamin, health and beauty into a major growth sector for C-Stores and other retail channels – according to one CStore executive, in fact, it’s a boom that hasn’t been seen since the pre-regulatory Ephedrine tablet sales bonanza of the 1990s.

7-Eleven has increased its space allocation for liquid vitamin supplements – the category energy shots dominate – for 12 straight quarters.

Energy shots now represent 25 percent of the sales in the health and beauty category at CircleK – even though the category includes everything from marital aids to Advil.

“I would classify it as outstanding growth,” Sandra Colvin, the 7-Eleven category manager

RIDING HIGH – As this chart indicates, it’s been a big year for 5-Hour Energy. $6,000,000

5-Hour Lemon Lime

$5,000,000

Convenience Store Sales Dollars

5-Hour Berry

$4,000,000

$3,000,000

$2,000,000

$1,000,000

0

4 Weeks Ending 4/21/07

4 Weeks Ending 6/16/07

4 Weeks Ending 8/11/07

4 Weeks Ending 10/6/07

4 Weeks Ending 12/1/07

4 Weeks Ending 1/26/08

4 Weeks Ending 3/22/08

SOURCE: AC NIELSEN, CONV. STORE TRACK

30

BEVERAGE SPECTRUM :: APRIL 08

for vitamins and supplements, says of energy shots. Starting with the single 5-Hour Energy product, she says, “we went from a bottle, to a shelf, to a shelf and a half, and our individual stores are going further depending on what their customers want.”

Marketers are betting they’re going to want quite a bit more. Last November, at the National Association of Convenience Stores Show, the rising tide of energy shots was easily evident, as brands from established players like Jolt Cola and distributor-produced rollouts like Blutonium alike jostled for attention. There is the sense that, just as with energy drinks before them, there are going to be a lot of similar products on the market in the near future. Already, in fact, 5-Hour executives are complaining about me-too products making claims of six hours of energy and beyond, filing suit against Nitro2Go in Michigan. One of the first sports tie-ins is in place, as well – Baseball Hall-of-Famer Johnny Bench is on board with Turbo Power Energy.

With a NOS launch that will include a major advertising push of its own and 5-Hour going strong, there is the possibility that one or two products may be enough to crowd all other comers out of the category. But with energy the top function in the beverage arena, energy shots are giving off the scent of cash, and there are a lot of beverage and supplement manufacturers who believe there’s a spot in the lineup for them, too.

“We’re on a pace that if we had no growth, we’d have $1.5 million in sales this year – and we’re predicting $2.5 million,” says Jim Folsom, whose company started making Blutonium less than a year ago. “I think Red Bull and Monster built a category across the whole country and contributed to a shift in consumption habits.

This is maybe the next generation down from what they’ve done.”

According to marketers, energy drinks and the country’s massive coffee culture have pushed the notion of energy into the mainstream. But energy shots represent a new evolution, they say, one that distills the energy boost of caffeine into one of its most direct forms yet.

“You’re selling energy, but they’re the antithesis of drinks because there’s this notion that [energy drinks] don’t sustain energy, while the shots do,” says Wet Planet Beverages’ C.J. Rapp, whose Jolt Soda makes him as knowledgeable about the energy category as anyone. “They’re low calorie, so it attracts a female audience, and the less liquid the better, for some.”

“At the end of the day, you’re selling energy,” Rapp says. “But you’re selling against energy drinks.”

ENERGY SHOTS: BRAND NEWS Zipfizz – Zipfizz Liquid Shot is now available in four flavors: Orange, Mango, Fruit Punch and Passion. This liquid formula delivers 41,667% B-12 for enhanced energy and mental alertness. It contains no sugar and “just enough caffeine and green tea extract to get the ball rolling.” Liquid Shot is isotonic and is conveniently packaged in a 4 oz. bottle.

Shot Me Up – Texas-based Shot Me Up has two energy shot lines: Chi Shot, the World’s first caffeinefree White Tea energy shot, comes in three flavors: Pomegranate, Mandarin and Mango. Zen Shots are the World’s first and only 2 oz. Green Tea Energy Shot. It is also caffeine-free, with a powerhouse of synergistic ingredients that not only provide energy but optimal health, including green tea extract, natural agave nectar, Aloe Barbadensis Leaf Juice, panax ginseng, and essential B and C vitamins. Zen Shots come in five flavors: Original, Orange, Lemon, Peppermint and Berry.

as a half cup of decaffeinated coffee, Decaf 5-Hour Energy is designed for people who avoid caffeine, but still need an extra boost to help them function during the day.

Impulse One – Impulse One is a New Age Beverage Company with established and innovative brands like Head Shot Energy Shot, and Red Devil Energy Drink.

Headshot is an incredibly smooth-tasting energy shot that provides hours of energy. Headshot is available in Original, Blueberry Slam and Apple Slam.

Bond Laboratories – FUSION 6+HR Energy Shot is a 2 oz. that is available nationwide in convenience stores, on college campuses and among the action sports world. The shot is made with Fusion’s “Phytomic Energy Blend,” which includes B-vitamins for energy, amino acids to trigger focus and mood enhancement, and enzymes that help the body feel energy quicker and sustain increased energy for a long period of time.

FUSION was launched from BOND Laboratories— a premier marketer and manufacturer of nationally branded nutritional products.

Labrada Nutrition – Labrada’s Charge! SuperShot comes in a convenient, 2 oz. that is intended to either be opened and consumed or added to bottled water to “Charge! your water”--- instantly making a delicious non-carbonated fruit flavored drink. Charge! is fortified with 2450 mg of fruit based anti-oxidants and B-vitamins.

5-Hour Energy Berry and Lemon-Lime flavored energy shots, has added an Orange flavor to its lineup.

NRG – NRG SHOT contains about as much caffeine as a cup of coffee for energy revival, while it also contains vitamins like C, B6, B12, Niacin, and Folic Acid for hours of crisp clean energy without the crash of other energy drinks. NRG SHOT comes in Mandarin Orange, Red Berry, Pink Lemonade, and, coming this summer, Blue Raspberry.

Previously available exclusively at Walgreens, Orange is now available to the convenience store channel. Orange is available in 12-packs and as part of a new multiflavor wire rack display that includes all three 5-Hour Energy flavors. Living Essentials has also released Decaf 5-Hour Energy. Containing only as much caffeine

Liquid Lightning – New Jersey based Liquid Lightning has added Liquid Lightning Boltz to their portfolio of products. A compact 2 oz. energy shot supplement, it is the only one on the market that is made with Hoodia Extract. Hoodia has been known for years as a

Living Essentials – Living Essentials, the maker of

32

BEVERAGE SPECTRUM :: APRIL 08

nutritious food that is extremely effective at reducing the appetite. Boltz is sugar free and has a berry flavor.

One shot has the equivalent power of two cans of an energy drink. Liquid Lightning has plans for two new flavors and a twin pack arriving this Spring.

Fuze – NOS Energy Drink will launch NOS PowerShot in May of this year. The 2 oz. product is aimed at those looking for very quick, high-impact energy. NOS PowerShot contains the NOS Maximum Boost Formula, which serves the same level of Caffeine, Taurine, L-Carnitine, Inositol and Panax Ginseng found in an 8 oz. serving of regular NOS Energy Drink into a 2 oz. package. Plus, NOS PowerShot contains a special formulation of elevated levels of Niacin, Vitamin B6 and B12 than those found in regular NOS Energy Drink.

FIXX – FIXX Extreme Shots claim a proprietary Nano-Particulate Delivery system (NDS) and bioactivated ingredients to produce a great tasting shot with an extremely powerful and effective blast of energy that’s designed to last all day.

34

BEVERAGE SPECTRUM :: APRIL 08

OC Energy – OC Energy ’s “Insane” energy shot was designed for consumers that want a choice. Its iconic bottle design with eye-popping graphics set it apart from the run-of-the mill energy shot. Offering something more than just energy, Insane has undergone a flavor transformation. Its great new taste and new label verbiage let customers know exactly what to expect; 6+ hours of energy, no crash and hangover relief when you need it. Consumers enjoy Insanes’s wide mouth that easily allows it to be shot not sipped. This product is suggested as both a shot and a drink mixer.

Blutonium – Blutonium is a cool looking product in a category filled with look-alikes. It sells cold on a proprietary suction rack for easy placement in any store.

Blutonium Unconventional Energy is a great-tasting energy shot that surprises customers who’ve thought you have to wince a time or two to swallow an energy shot. Blutonium Peaceful Power is a caffeinated, energy-charged shot with a dose of habenero to heat things up.

Wet Planet – From the makers of America’s original energy drink comes the Jolt Endurance Shot. True

to the Jolt name, the Jolt Endurance Shot contains more “good stuff ” as compared to competing brands.

The Jolt Endurance Shot contains a heaping dose of amino acids, electrolytes, vitamins and enzymes, plus just the right amount caffeine. And unlike most other energy shots, Jolt Endurance shots are sugar-free, so there’s no crash after just a few hours.

Drinks that Work – Founded by ex-Odwalla employee Brian Lovejoy, Drinks that Work is the maker of UPSHOT, a 2.5 oz. energy shot that claims to contain the most boost of any product on the market, with none of the excess liquid. In Christmas, 2007, Upshot Energy was included in the gift bag for both the 700-strong annual Los Angeles Police Department Dinner and also the Christmas Party for the Marines at Camp Pendelton, Calif. Upshot was also included in the 2008 Oscar gift bag presented by People Magazine to those Oscar attendees staying at the Four Seaons Hotel. So far, Upshot boasts four flavors: Kola, Pomegranate, Fruit and Mocha.

Bayshore Specialties Ltd. – Bayshore Specialties Ltd. is the manufacturer of Fuel Cell, an exciting new 2

oz. fortified, sugar free energy shot. One Fuel Cell has two and a half times the energy of an 8 oz. can of the leading carbonated brand, with 0 calories and 0 carbohydrates, and no sugar crash.

Peptime – Peptime Energy Shots are in the warehouse and being distributed now. These shots are portable, do not need refrigeration, and come in three 2 oz. flavors, Tropical Orange, Cosmo Berry and Island Lemon Lime.

On Go – On Go started in April 2007 with local distribution of its Lemon Lime flavor in the Midwest Region. In 2008, the company introduced Berry Blast and began national distribution. Positioned as the “Better for You” energy shot; consumers perceive On Go to be “safer” or “less harsh” than the existing brands which have a “truck driver look.” Its graphics appeal to hesitant first-time energy shot buyers and many women.

M-150 – The M-150 Girls will be dropping the flag on The Long Beach Grand Prix on April 20 in California.

They will be cheering on race driver Cindi Lux, who’ll be racing to the winner’s circle in the Speed World

APRIL 08 :: BEVERAGE SPECTRUM

35

Challenge GT Series race. Off the track, Cindi will be visiting several local pubs during race week to meet her fans and support M-150 retailers with additional public appearances. The high energy M-150 Girls will be along to provide patrons with smiles and samples of M-150 non-carbonated energy drink. Cindi’s flavor for hard driving and competitive energy make her the perfect driver for M-150.

Bevolution Ammo – Bevolution AMMO has launched their new product image and expanded marketing that has moved beyond the extreme sport scene of paintball in the United States and now includes convenience stores, bars and an international presence in Europe and South America. Bevolution AMMO was originally developed for the Military and is perfected for your consumer. It is a great tasting “liquid power shot” of caffeine for a burst of energy. If the 171 mg of caffeine is too much, the packaging includes a meter to measure how much your consumer shoots or mixes into their beverage of choice Zantrex – Zantrex has launched its Ultra-Potent Insta-Shot in two flavors: Orange Octane and Flash Berry. The high-energy boost contains 8 calories, is fast-acting, long lasting and has no crash. It is available at Wal-Mart, GNC, Walgreen’s, Rite Aid, and other retailers nationwide.

NVE Pharmaceuticals – NVE manufactures and co packs unique custom beverages for nationally known private label brands. NVE specializes in 20 oz vitamin fortified waters, 8.4 oz carbonated energy drinks as well as 2 oz and 3 oz vitamin and energy shots. NVE stocks several size bottles and blows custom size and shape bottles to the customer’s specifications. NVE’s nationally-advertised 6 Hour Power Extreme Energy Shot comes in 5 flavors; Lemon Lime, Very Berry, Fruit Punch, Grape and Orange. The newest and hottest addition to the NVE line of energy shots is Java Shot, a premium coffee shot in delicious Mojo Mocha, Catapult Cappuccino and Hopped Hazelnut.

BDI Marketing – BDI Marketing’s Mini Thin Rush was the exclusive energy drink for Winter Music Conference 2008. As such, the product was exposed to more than 45,000 contemporary music professionals and enthusiasts that attend the 300 plus events held over the course of the 5 day festival. Exposure for Mini Thin Rush included extensive sampling and signage throughout the conference, exhibition space, advertising in WMC publications, as well as logo placement on delegate bags, the WMC website, weekly email blasts and more. Mini Thin Rush Liquid is a berry-flavored sugar-free energy drink shot that contains less than one gram of carbohydrates per serving.

36

BEVERAGE SPECTRUM :: APRIL 08

ZANTREX -3 Insta-Shot ®

™

Item Description . . . . . Zantrex®- 3 Ultra Potent Insta-Shot™ Product UPC . . . . . . . 681168417017 Whse PK .

Vendor PK Size . . . .

Count . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. 12 . 216 . 2.0 oz. each .1

Specs. KT 04 34MP216 34MP216. . 12 pk. – 6.125” L x 4.625” W x 4.25” H 1.26 lbs.

Master 18.75” L x 14.25” W x 9.13” H 36 lbs.

Cost/Ret of Each: (Recommendations Only) Retail Single . . . . . . . . . . $3.50 2 Pack . . . . . . . . . . $6.00 6 Pack . . . . . . . . . . $16.50 First Available Ship Date - 1/15/2008 Supplier Name . . . . . . Basic Research®

Why Zantrex®-3 Insta-Shot™?

1)

Almost One Billion Zantrex-3 capsules sold (that’s Billion with a B).

2)

Approximately $120 million spent in advertising the brand.

3)

The number of impressions numbers in the Trillions.

4)

Zantrex-3 OWNS the 18-25 energy market.

5)

An established leader in the category. Top 3 SKU in Wal-Mart & FDMX channels for the last 4 years.

6)

$10-15 million in media planned for the first quarter of 2008.

7)

Tastes better… Don’t believe it? Try choking down some 5-hour Energy.

8)

Compared to 5-hour Energy, Zantrex-3 has double the B12 for better and more immediate energy boost.

9)

Zantrex-3 contains a proprietary combination of xanthine stimulants.

10) Great impulse item that can be placed anywhere in the store, from the front end to clip strips.

Basic Research® Top 25 Brands — IRI Weekly Flash Total FDM 12 Weeks Ending 11/4/2007 Category-Weight Control/Energy Candy Tablets * Hydroxycut rolls up all SKU’s

Dollar Sales

Unit Sales

Total

$77,399,496

3,089,078

ALLI

$29,481,152

500,638

HYDROXYCUT*

$6,321,946

247,818

®

ZANTREX - 3

$2,634,547

105,404

RELACORE®

$2,606,149

101,217

SLIMQUICK

$2,321,324

87,737

METABOLIFE

$1,921,435

94,204

MEGA T

$1,714,482

243,363

SMARTBURN

$1,388,039

50,174

AKÄVAR®-20/50

$1,337,159

34,896

Sizes Available: Single Serve, 12 pk, 6 pk and 2 pk

©2008 All Rights Reserved

BR11894

Order Today! Call:

1-800-403-3817

SPARKLING JUICES

FIZZLING OUT? NOT YET, SAY JUICE MARKETERS.

million and counting. That’s where IRI put the total count for the sparkling juice category, a number that has to be discouraging for marketers in the once-hot set of alternative sodas, not counting Wal-Mart or convenience stores -- not exactly the intended channels to begin with.

Or is it discouraging? Beyond those numbers sit a variety of uncounted distribution channels for the products, which continue to garner con-

verts behind the bar, at the sandwich shop and in any number of high-end alternative channels.

Still, it’s hard to tell how much traction a traditional retailer can squeeze from sparkling juices. The category has felt lifeless since the purchase of its top brand, Izze, by PepsiCo in late 2006. As product quality improves – Fizzy Lizzy and Orangina just rebranded, for example, while Apple & Eve has launched a product aimed directly at the schools market – the bright

THE SWITCH In 2007, The Switch rebranded with vibrant new graphics, juicy reformulations, and two new flavors: Kiwi Berry and Very Berry. The company signed with 20 new distributors and 1,500 new schools. In December the Switch unveiled it’s brand new web site, showcasing it’s bold consumer promise of “100% OF WHAT YOU WANT” and “0% OF WHAT YOU DON’T”, and inviting the ever growing number of passionate Switch fans to have a little fun with the brand. There are lots of great things to win, including hats, t-shirts, itunes and iphones. One on-line contest asks Switch fans to answer one of their most frequently asked questions “Why is the ‘The’ upside down”?, and the responses pouring in have ranged from weird to outright hilarious.

lights seem to shine elsewhere, toward functional waters and teas.

Nevertheless, in the right product mix, sparklers are the way to go: a natural food chain in Seattle, PCC, cut all High-Fructose Corn Syrup-enhanced products – opening the door for juice-based altsodas. Cocktail culture shows no sign of abating. And the entrepreneurial vacuum left by the Izze purchase should keep the market bubbly before it withers on the vine.

flavors, Gulf Coast Tangerine and Red Hill Pomegranate. Fizzy Lizzy boasts an average of 65 percent juice.

Fizzy Lizzy comes in a total of eight flavors (the others are Costa Rican Pineapple, Mount Fuji Apple, Lone Star Grapefruit, Yakima Valley Grape, Pacific Raspberry Lemon, and Northern Lights Cranberry) and is available in select supermarkets, gourmet food stores, and cafés across the country. The products entered several new regional markets recently, including Fresh Market, Whole Foods Rocky Mountain Region, UNFI Rocky Mountain Region, Stop & Shop Supermarkets, Giant Supermarkets, Bradley Distributing, Palo Alto Egg Distributing, Performance Beverage Distributors and Crown Pacific Specialty Foods.

IZZE SANPELLEGRINO SanPellegrino has relaunched its sparkling fruit beverages Aranciata and Limonata. They were reinvented, reformulated and repackaged to present consumers a refreshingly all-natural beverage option. The product now contains all-natural ingredients and a refreshed brand image.

APPLE & EVE Apple & Eve recently announced the launch of Fizz Ed – an all-natural fruit juice and sparkling water beverage – offering an alternative to traditional sodas. Available in four great tasting varieties – Red Raspberry, Orange Mango, Pomegranate Cherry and Green Apple – Fizz Ed contains none of the high fructose corn syrup or artificial ingredients found in carbonated soft drinks. Each singleserving 8-ounce can contains a refreshing blend of 70% pure fruit juice and 30% sparkling water.

Fizzy Lizzy Fizzy Lizzy, a line of all-natural beverages consisting of fruit juice and sparkling water with no added sugar or corn syrup, recently re-launched its products with new packaging, new flavor names, a new website and two new

38

BEVERAGE SPECTRUM :: APRIL 08

In March, Izze Beverage Company added Sparkling Peach to its line of sparkling juice flavors. It is an all-natural blend of pure fruit juice and sparkling water with nothing artificial. It is best served chilled. Because of its simple, true-to-the-fruit flavor, Izze Sparkling Peach complements a variety of foods and, with its stylish packaging, is also great for entertaining. With the introduction of Izze Sparkling Peach, Izze also debuted new graphics on its 12 oz. four-pack carrier. The packaging is brighter for greater impact on shelf.

SKYLARHALEY SkylarHaley has released a new flavor in its award winning line of Essn beverages: sparkling mango and passion fruit juice. A 100 percent juice drink, Essn is packed with natural flavor and contains no preservatives, additives, or artificial sweeteners. Packaged in 8.4 oz. bullet cans, Essn juices are also offered in five other distinctive varieties: fuji apple, meyer lemon, blood orange & cranberry, minneola tangerine, and sparkling pomegranate and montmorency cherry. These products are available at select Safeway, Albertson’s, and Jamba Juice stores and Kroger’s Southwest.

BEVNET.COM AND ZENITH INTERNATIONAL PRESENT

BEVERAGE ENTREPRENEUR FORUM A day’s conference, workshops, and networking designed for owners and managers of emerging beverage concepts as well as investors, suppliers and customers looking for the next big thing.

WHEN: June 19, 2008 WHERE: Le Parker Meridien Hotel New York City MORE INFO: www.bevnet.com/innobev SPONSORED BY:

GERRY’S INSIGHTS

CROSS-POLLANATED e’ve all seen the slow drip of companies away from the Food Marketing Institute Show in recent years, and it’s become easy to view the two emergent replacement gatherings of the food and beverage industry as polar opposites. In one corner, you have the place to be seen for good-for-you foods and beverages, Natural Products Expo West – “good for you, good for business, good for everyone,” as its slogan had it this year. In the other corner is the show for badfor-you items (well, Pepsi, for one, prefers to say they’re “fun for you”), the National Association of Convenience Stores show. Expo West products are all-natural, sometimes organic and generally not tainted by taboo ingredients, like highfructose corn syrup, that render them unworthy of retailers like Whole Foods. By contrast, NACS products generally taste better to the “average American” and most likely sell in numbers that are an order of magnitude greater.

Given these Manichean opposites, it was fascinating to attend the keynote speech by Michael Pollan at this year’s Expo West, in Anaheim, Calif., in March. Pollan, of course, is the best-selling author of such influential books as The Botany of Desire and The Omnivore’s Dilemma. With his excoriation of the industrial food business, Pollan has been regarded by many in the natural foods sector as a crucial ally. In many ways, he is.

But as the natural foods business has scaled up, and as industrial players have bought their way in, Pollan has been hard at work warning consumers to be skeptical about the claims aimed their way by natural foods purveyors. After reading Pollan’s description, in Omnivore, of how industrial producers define “free range” (a strip of grass separated from an industrial barn by a tiny door that the enclosed livestock almost never traverse), my wife and I stopped paying a premium for free-range chicken.

Chalk up those activities, maybe, to unscrupulous food processors gaming the system. But Pollan’s critique poses a challenge to natural food purveyors in a far more fundamental way, and that was the gist of his speech at Expo West.

If in some ways it was accusatory, his mild tone and subtle sense of humor insured it was only gently accusatory. But it had to be disquieting to many in the audience who are used to feeling pretty good about themselves and what they do for a living.

40

BEVERAGE SPECTRUM :: APRIL 08

Pollan started by tracing the notion of “scientific eating” in America back to the mid-19th Century and showed how it taps into a Puritan heritage that has left us uncomfortable enjoying sensual activities, including eating. The past century and a half has seen a succession of foods and ingredients demonized, from the protein that Kellogg sought to drive out of the American colon with his newfangled breakfast cereals, to the red meat against which Sen. George McGovern inveighed, to the current ostracism of Omega-6 fatty acids as the enemy of “blessed” Omega-3 fatty acids. Good nutrients need to be promoted and evil nutrients must be purged from the food supply.

The resulting emphasis on “nutritionism” has diminished the role of food to a purely biological means of sustaining life rather than a cultural means of attaining pleasure, community, family, identity or ritual. That itself is a lot to lose, as proponents of the Slow Food movement have been tireless in explaining.

But there’s another implication. Foods reduced to the role of “carriers of nutrients” essentially become “the sum of their nutrient parts,” Pollan argued. “Since nutrients are invisible, therefore I need experts to tell me how to eat,” much as the priesthood mediates one’s relationship with the deity. People today have “lost the ability to eat without help.”

Pollan doesn’t think this emphasis on nutritionism works very well: not only does it ruin the pleasure of eating but it’s often based on weak science, since studying the effects of individual nutrients in isolation overlooks food’s identity as an extremely complex system.

Further, all the talk about nutrients gives an enormous edge to those selling processed foods, since they can rejigger foods to suit the latest findings – or fads – disseminated by experts. Today that’s reflected in the endless references – in store signage, product packaging and advertising – to such nutrients du jour as antioxidants and resveratrol. “Walk in the supermarket and you’re besieged by biochemistry,” Pollan observed.

Or – though Pollan didn’t say it directly – walk the aisles of Expo West, just a couple of floors below.

So, are Expo West exhibitors still the good guys? To the extent that they foster nutritionism, maybe they’re not. Pollan’s new book, In

Defense of Food, aims to swap the complexity of nutritionism for the mantra: “Eat food, not too much, mostly plants.” He brought a similar message to his Expo West audience. “Don’t buy foods that make health claims,” he advised. “The healthiest food in the store is silent.” Delivered at the Produce Show, that message doubtless would be universally applauded. At Expo West it was a clear rebuke to the marketing strategies revealed on the show floor downstairs. Pollan still managed to draw an ovation from his audience.

But it’s clear that those who like to revel in being at the “good for you” end of the food and beverage spectrum have some hard thinking to do about where their strategies are taking them and their customers.

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

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One Mifflin Place, Third Floor

Cambridge, MA 02138 USA

BRANDS IN TRANSITION

FIJI PLAYS A GREEN TUNE

BY MATT CASEY

n the world of premium bottled waters, Fiji might as well be U2. Both imports hit American shores with a splash, and put in years of hard work earning fans before ascending to their field’s top spot. Fiji entered in 1997, and surpassed Evian as America’s numberone luxury water in 2006. Now Fiji seems to define the category.

But there’s an unfortunate side effect to being on top: eventually, you fall. And with consumers, environmentalists and politicians bristling at the environmental ramifications of bottling and shipping water from far-away places, Fiji could be at risk to lose its audience. But instead of trotting out the same old songs, the master of the premium bottled water category has rearranged its set list to bolster its environmentally-friendly credentials and please a crowd that thinks of green as more than the color of money.

That crowd – those hip, young affluent trendsetters –initially came to Fiji because of the water’s exotic source, attractive packaging and conspicuous placement at celebrity-filled events.

The water earned a badge value that made it an “attainable luxury,” according to Clarence Chia, Fiji’s brand manager. But that was before consumers started calculating their carbon footprints for fun.

Where consumers go, politicians are sure to follow – especially when they have an easy target like bottled water. Local governments have passed resolutions to no longer purchase the product, and even levied a tax on it. The state of Connecticut may end its bottled water contract with Nestle in favor of installing more water fountains in public buildings. At the national level, two Democratic representatives asked the Government Accountability Office to take a hard look at the growth of the bottled industry, which is booming while U,S, citizens enjoy what the representatives called “one of the safest supplies of tap water in the world.”

But, of course, none of that would have happened if the press didn’t start the drumbeat first.

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BEVERAGE SPECTRUM :: APRIL 08

Newspapers, magazines and broadcast personalities have been questioning the rationality of paying a premium for water that’s been shipped half-way around the world when the same stuff – or something very similar to it – flows from every faucet in America at for pennies per gallon. National Public Radio’s On Point with Tom Ashbrook dedicated half an hour to the practicality of bottled water in July. Marie Claire ran a story in September that concluded that bottled water is bad for the environment, and Time published an article in August that agreed, adding that “Worst of all, the migration to bottled water fosters a perception that tap water isn’t safe or necessary. That’s dangerous at a time when aging public-water systems need investment, particularly as global warming increases the incidence of drought.”

Amid that atmosphere, you might expect the company that headlines the premium bottled water category to watch their sales sink and their audience shrink, but that’s not the case. Fiji’s volume has actually grown, according to Gerry Martin, vice president of marketing at Massachusetts-based Polar Beverages Inc. Martin said Fiji’s sales numbers crescendoed by 22 percent in 2007. He said the brand also increased its market penetration, and continues to win market share from its competitors.

“They just seem to be doing a lot of the right things,” Martin said.

Currently, Chia said, those “right things” center on improving the company’s already-positive environmental profile.

But Fiji isn’t breaking any new ground by touting environmental responsibility; it has become a popular theme in the beverage industry.

Coca-Cola pledged in February to recycle 100 percent of the aluminum used in their packaging. While that pledge didn’t include a time line, the soft-drink giant backed it up with a trailer at the Daytona 500 that educated NASCAR fans about the benefits of recycling. Within Fiji’s own category, Icelandic Glacial garnered the 2007

Best of BevNET award for the bottled water category and a distribution deal from Anheuser-Busch partly on the strength of its carbon-neutral certification.

With everyone playing the same song, Fiji decided to play it better.

“As of January fist 2008, we are officially carbon negative,” Chia said. In effect, for every five bottles of water Fiji sells, the company takes out of the atmosphere the carbon emissions required to manufacture, fill and ship six bottles.

But, Chia said, the company’s efforts extend beyond carbon offsets.

The water company is preserving 51,000 acres of the Fijian rainforest, improving vital infrastructure for the islands residents and aims to use technological advancements to reduce the plastic in their bottles by 20 percent over the next three years. Fiji is even exploring the use of alternative energy and looking to support bottle deposit bills in the U.S. – something that strikes a sour chord for most beverage industry professionals, and is actively opposed by the American Beverage Association.

All of these efforts stack on top of what the company said it’s been doing all along. Chia said Fiji has always responsibly managed the aquifer they draw the water from, and Fiji’s squared bottles make their shipments more efficient by reducing the “dead space” in freight carriers.

“We haven’t been as vocal in the past about everything we do,” Chia said.

That relatively-quiet period is over, Chia said. He said Fiji wants to champion the cause of environmental responsibility for all companies across all industries – and Thomas Mooney, Fiji’s senior vice president of sustainable growth, trumpeted the company’s efforts last November on the popular blog site, The Huffington Post. Mooney wrote that consumers “expect us to be environmentally sustainable, and that is what we intend to do.”

While Mooney’s article might have been the equivalent of screaming to an arena, the company’s every-day efforts to get its message out have been far more lowkey. Each bottle of Fiji now carries a small green water-drop logo on its front panel, and a summary of the company’s efforts on the back panel that leads customers to fijigreen.com if they want more information.

Whether consumers are reading Fiji’s back panel and website, or if they were in Mooney’s audience when he trumpeted the company’s intention, they seem to like Fiji’s latest song. Fiji has remained on top, and Martin said the bottled water brand’s sales keep growing.

“We’re expecting a pretty robust year for Fiji in 2008,” he said.

Bono, eat your heart out.

Opening day is here and Power Trip Energy Drinks are a sure hit! · PT opens Alabama, over 500 retailers · PT opens 4 new states, on pace for 31 states this year · PT Vitamin energy drink has more vitamins than any other leading energy drink · PT completes 2008 Marketing Business plans, distributors impressed · PT specializes in flavored energy drinks that taste great, Mango becomes a top seller · Check out our all new website:

www.powertripbev.com

PTB, the difference is in our unique products and our distributor references

Phone 954-862-1445, Fax 954-862-1484 sales@powertripbev.com

SALES AND DISTRIBUTION: Power Trip Beverages, Inc., 12401 Orange Drive, Suite 205, Davie, FL 33330

APRIL 08 :: BEVERAGE SPECTRUM

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PROMO PARADE Corona covers many fronts in ’08 Corona Extra and Corona Light are heading back to the beach with a new marketing campaign. Two new television ads will capitalize on its “vacation in a bottle” appeal. “Treasure Map,” and “Hotel Room,” feature scenes that escalate to vacationers enjoying Corona moments. Print ads debut in lifestyle, entertainment and sports publications, and out-of-home executions will appear in all major markets.

Corona’s on-air sponsorship of the “Jimmy Kimmel Live” green room will also continue in 2008. The partnership includes prominent branding, live on-air bumpers, and 30-second TV spots. Crown Imports brands are also the exclusive beers available in the green room.

Corona will also sponsor the Kenny Chesney 2008 “Poets & Pirates” Tour which kicks off on April 18 and runs through mid-September.

The urban radio program that launched in

“Get Some A” 2007 continues in major markets this year.

The radio spots pitch the Corona Commercial Getaway before launching into snippets of contemporary recording artists’ songs, including Grammy-nominees Raheem DeVaughn and Emily King.

Three national television commercials speak to Corona’s Hispanic market. Launching this spring, “Sports,” “Dance” and “Foods” represent activities with which Corona believes Hispanics will identify. Outdoor executions take advantage of various local and regional influences and landmarks to target the local consumer, e.g. Southern California, a Mariachi band is seen against the iconic Hollywood sign; and in Miami, a South Beach hotel showcases a Corona inspired neon façade. Corona will also execute a radio campaign targeted to the Hispanic consumer to support the brand in 2008.

For more information, visit www.crownimportsllc.com.

New POS for Whaler’s Rum Line Heaven Hill Distilleries, Inc. has launched a new POS campaign to tout the Whaler’s brand.

The new POS “This Way to Paradise” has a tropical aesthetic. It will include a case card, flavored shelf talker, original shelf talker, shelf strips, floor bin and table tent bar card.

As an evolving brand, this POS will distinguish the Whaler’s flavors from more traditional Rums. Whaler’s legendary recipe hearkens back to when seafarers rattled vanilla beans in empty rum bottles at sunset to entice migrating whales to their ships. The friendly whales led them to the tropical haven known as Hawaii. There the sailors discovered the old rum makers of Maui and were so impressed by the exotic taste of their rum that they called it Whaler’s.

For more information on Whaler’s, visit heaven-hill.com

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BEVERAGE SPECTRUM :: APRIL 08

Albeit 147 years-old, Iron City Brewing Co. still has a few new tricks up its sleeve. The Pittsburgh-based brewery is launching a new campaign to remind Pittsburghers to “Get Some A” – its Augustiner brand of lager. The campaign encourages consumers to upgrade their choice in beer to Augustiner. Pittsburghers can learn more about promotions by visiting a new web site, www.

GetSomeA.com.

In addition to the new Augustiner campaign, Iron City has also launched a new corporate Web site, www.ironcitybrewingcompany.com, which showcases the brewery’s core brands (Iron City Premium Lager, IC Light and Augustiner) and chronicles the brewery’s history.

Each of the brewery’s core brands have also undergone significant redesigns in labeling and case packaging.

‘Good to Go’ with Nutrisoda and Giant Bicycle

McCormick bottles eco-luxury McCormick’s eco-luxury brand 360 Vodka is pioneering an innovative and eco-friendly approach to distilling and packaging spirits. Its new advertising campaign reflects McCormick’s concern for environmental sustainability, while not compromising high luxury and design. The “Blend In. Stand Out” campaign’s visual style is based on the concept of “blending in” to the environment to minimize one’s eco-footprint, and “standing out” from the ordinary. The campaign will consist of three ads featuring female figures that have effectively blended in to their natural settings. Images from the “Blend In. Stand Out” campaign can be seen at www.vodka360.com.

McCormick Distilling was recently named a member of the Environmental Protection Agency’s Green Power Partnership and has pledged to replace a portion of its electricity consumption with green power to reduce the environmental impact associated with conventional electricity use.

Nutrisoda, “the Good Soda” announces its partnership with the world’s largest bicycle company, Giant Bicycle, to promote healthier lifestyles.

As part of the promotion, ten Giant OCR Alliance 1 performance road bicycles, valued at $1,500 each, will be offered as Grand Prizes, along with 100 Giant helmets for first prize winners, and 1,000 Nutrisoda-Giant water bottles for second prize winners. On-air radio contests in select markets will give away 33 Giant FCR 1 fitness bicycles valued at $900 each. Additionally, Nutrisoda will give away up to 1,000 Giant Boulder mountain bikes through local entries at participating retailers in select markets.

Through the promotion, Nutrisoda hopes to introduce the fitness-oriented consumer to its line of eight vitamin and mineralinfused beverages.

At the heart of the Good to Go promotion is the Giant Code Game, which runs from March 10 through May 31, 2008. Participating retailers will carry specially marked Nutrisoda four- packs on www.nutrisoda.com/giant/ with the game. Consumers may also enter the sweepstakes via mail-in entry forms found at participating convenience stores.

The integrated marketing campaign hit radio waves in twelve markets, highlighted by on-air contests and bicycle, helmet and water bottle giveaways. An online advertising and e-mail campaign rounds out the promotion.

For more information, on both Good to Go partners, please visit www.nutrisoda.com and www.gia ntbicycle.com.

Giant Moose Loose on Daytona Beach Wanted: Giant 30-foot inflatable bottle of Moosehead Light Last Seen: At a Daytona Beach, Florida promotion where the moose bottle was allegedly stolen. Moosehead USA, the U.S. importing arm of Moosehead Breweries, was launching its first U.S. product: Moosehead Light. Moosehead Light is a smooth and refreshing premium light beer packaged in Moosehead’s unique and recognizable green bottle. The on-site promotion location where the moose bottle was last seen marked one of the first consumer-focused events in support of the imported light beer’s U.S. availability.

REWARD: One-year supply of Moosehead Light to the person who brings the bottle back to its home on the beach -- no questions asked.

Investigators expect that the moose bottle will be difficult to hide…

If you have information leading to the missing giant moose, please call the Daytona Beach Patrol at 386-239-6414. To find out more about Moosehead, visit www.moosehead.com.

APRIL 08 :: BEVERAGE SPECTRUM

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CONVENTION SCRAPBOOK

EXPO WEST

Y

oga Moms, Good Lifers, Hippies, Crunchies and Granola-Heads – they were all there and they were all selling at last week’s 2008 Natural Products Expo West in Anaheim, Calif.

The show was a clear demonstration of the sway the natural foods movement has in this part of the country, as it easily dwarfed the East Coast version of the show. Sitting and enjoying a “John Daly” – one of his half-and-half teas mixed with Tito’s vodka, Sweet Leaf Tea founder Clayton Christopher admitted that he’d even been willing to miss his beloved South-by-Southwest Music Festival. With buyers from behemoths like Target and Whole Foods to tiny Midwestern natural food shops in attendance, it was just that important.

And there are exciting new outlets for these products, indeed, including the revelation of a Whole Foods “energy set” that will include Hi Ball, Steaz and Sambazon energy drinks, among other potential candidates.

Team Crayons. don, Guru Energy - Catherinee Gun kes Wil Eric Tomeo, Bernadett

Pure Cool - Patti Ann Kelly Skylar Haley - Fernando Vasque Cornelius Geary, Ken Cohen z,

d Berardi

HiBall - Dan Craytor, Alyssa and Tod

Lightfull Food

s - Susan Schn

46

BEVERAGE SPECTRUM :: APRIL 08

eider

E

Fugate and mergen-C - Ron

Bruce Sweyd

GUS - Steve Hersh and Crew.

NVE Pharmaceuticals - Richard Norowitz

Jones Soda - Erin Kliphardt and

Josh Groff

Tradewinds Tea - Steve Hatch

Vita Coco - Ira

Liran and Micha

el Goldstein

Carpe Diem - Amanda Winter and Bree Warner

Maine Root - Matt and Mark Sei

ler.

T

lese

d Maura Motto

indy Lane an he Switch - C

Hansens - Gregg Arends

APRIL 08 :: BEVERAGE SPECTRUM

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Fancy Food show preview SCHEDULE Saturday, April 26

NASF T

- 8 :00 A.M. – 6:30 P.M. – OTA Member Day ®

T

he 2008 Global Food and Styles Expo will combine three shows to offer more than 56,000 products from over 1000 exhibitors in the fastest growing food and beverage segments – two of which are of particular interest to the beverage industry.

This year, the Fancy Food Show and All Things Organic will focus on celebrity chefs and culinary demonstrations including appearances by Food Network star Bobby Flay. The combined shows will feature dozens of beverage companies, with a number of workshops on how to better sell natural and organic products in your place of business.

• When: April 26-29

• Where: McCormick Place, Chicago Illinois USA

• Who Attends: Supermarket retailers, wholesalers, distributors, international buyers and sellers come to the Global Food and Style Expo. CEOs, owners, managers – including everyone from buyers and marketers to store managers.

• Who Exhibits: Over 350 domestic exhibitors from around the country. Most exhibitors are entrepreneurs who developed the recipe and started the company, so you can learn about the products and do business with decision-makers. And at this Spring Show, you’ll find many local Midwest exhibitors with regional or ethnic products.

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BEVERAGE SPECTRUM :: APRIL 08

- 8:30 A.M. – 1:15 P.M. – Organic Store Tour - 9:00 A.M. – 4:00 P.M. – Fancy Food Show Workshop: Fundamentals of Specialty Food Retailing - 10:00 A.M. – 4:00 P.M. – Fancy Food Show Workshop: The Basics: The Business of Specialty Food - 1:00 P.M. – 4:00 P.M. – Reaching Your Best Organic Target PreConference Workshop - 1:00 P.M. – 4:00 P.M. – How to Efficiently Build Your Brand

Sunday, April 27 - 9:00 A.M. – 10:00 A.M. – Opening Keynote: A Morning With Bobby Flay - 10:00 A.M. – 5:00 P.M. – Exhibits Open - 10:30 A.M. – 11:30 A.M. – US Food Export Showcase Seminar: Integrating Sustainability into Successful Businesses - 10:30 A.M. – 12:00 P.M. – All Things Organic Conference Sessions: » Organic 101: Overview of the North American Marketplace, Educated on Organic: Your employees and your customers, Beyond the Boutique: Organic in non-traditional retail environments, Making Organic Produce Stand Out in Retail Settings - 10:30 A.M. – 12 :00 P.M. – Fancy Food Show Seminars: Effectively Reaching the LOHAS Consumer, Trading Up in Brands & Store Design - 12:30 P.M. – 1:45 P.M. – All Things Organic Exhibitor Seminars - 1 P.M. – 4:00 P.M. – Organic Fiber Tour - 2:15 P.M. – 3:45 P.M. – All Things Organic Conference Sessions: Organic 101: Navigating the Organic Treasure Map - Sourcing for All Your Needs, Entering the North American Organic Market, Organic Private Label: Views from around the table, Understanding and Selling the Organic Message: Eco-labels, current research and health claims - 6:00 P.M. – 10:00 P.M. – All Things Organic Welcome Party at the River East Art Center

Monday, April, 28 - 8:30 A.M. – 9:30 A.M.– Keynote Panel: Global Retailer Forum - 10:00 A.M. – 5:00 P.M. – Global Food & Style Exhibits open - 10:15 A.M. – 4:00 P.M. – All Things Organic Culinary Demonstrations - 10:30 A.M. – 12:00 P.M. – All Things Organic Conference Sessions: Or-

SCHEDULE (CONT’D)

EXHIBITORS

ganic 101: Organic on the Menu: Definitions for you and your customers, How-To for Organic Exporters, Policy and Standards Update Part 1 Food, Sustainability How-To for the Organic Industry: Creating your business plan, Cutting-Edge Organic Fashion: Meeting the needs of today’s eco-savvy consumers - 10:30 A.M. – 12 P.M. – Fancy Food Show Seminars: Specialty Food Magazine Presents: State of the Specialty Food Industry 2008, Taking Your Products to the Marketplace - 12:30 P.M. – 1:45 P.M. – All Things Organic Exhibitor Seminars - 2:15 P.M. – 3:45 P.M. – All Things Organic Conference Sessions: Organic 101: Certifying Your Store: How and why to go organic for retailers, Consumer Trends: The word on the street, Innovations in Food Safety for the Organic Industry, Policy and Standards Update Part 2: Non-food, Sourcing Tips for Organic Foodservice: From fine dining to the cafeteria - 6:30 P.M. – 12:00 A.M. – OTA Annual Dinner & Awards Ceremony at the Hyatt Regency Chicago

Tuesday, April 29 - 8:30 A.M. – 9:30 A.M.– Closing Keynote: John Moore: "The Bigness of Smallness" - 10:00 A.M. – 4:00 P.M. – Global Food & Style Exhibits open - 10:30 A.M. – 12:00 P.M. – All Things Organic Conference Sessions: Organic 101: Trends in Organic Non-Food Sectors, Diverse Approaches to a Competitive Marketplace: Learning to thrive, Getting Started: Menu building and trends for restaurants, International Standards and Equivalency Update, Meeting Increased Demand with Integrity: Sourcing organic locally, domestically, and internationally

Fancy Foods 2430 2442 2963

SENCE Worldwide Switch Beverage Aquadeco LLC

All Things Organic 3233 3301 3307.

3421 3452 3469 3477 3528 3530 3547 3570 3604 3662 3667 3847 3862 3870 3954 4045 4163 4171

Ciranda Inc Tart Is Smart/TPG Uncle Matt’s Organic, Inc. Lakewood Organic Juices Elite Naturel / Organic Juice USA Inc Dream Foods International LLC BrandStorm Inc Global Juices and Fruits LLC Eldorado Artesian Springs Inc Frutzzo Natural Juice Totally Organic Beverages Zola Acai Modmix Bionade International GmbH Horizon Organic Honest Tea Herbal Water, Inc. Sambazon Adina World Beat Beverages Apple Rush Co Purity Organics Inc

A NEW DAY HAS DAWNED BREAKING BEVERAGE INDUSTRY NEWS DELIVERED DIRECT TO YOUR E-MAIL INBOX FROM

BEVERAGE BUSINESS INSIGHTS s 0UBLISHED TIMES PER YEAR ABOUT TWICE A WEEK s )NSTANT EXCLUSIVE NEWS AND ANALYSIS ON THE MOST VIBRANT SEGMENTS OF THE BEVERAGE INDUSTRY INCLUDING q %NERGY $RINKS q %NHANCED 7ATERS q 4EAS #OFFEES q &UNCTIONAL $RINKS q (IGH %ND "OTTLED 7ATERS s .O HYPE AND REWRITTEN PRESS RELEASES

BUT INSIDE INFORMATION ON NEW PRODUCTS

CONSUMER TRENDS MERGER AND ACQUISITIONS DISTRIBUTION MOVES

AND OTHER ACTIONABLE INFORMATION s PER YEAR AT LEAST ISSUES

TRY 8 ISSUES FREE! WWW BEVINSIGHTS COM PH E BEVINSIGHTS AOL COM APRIL 08 :: BEVERAGE SPECTRUM

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PREVIEW EXHIBITORS

FMI SCHEDULE

1688

A. Lassonde, Inc.

616

Adams Flavors, Foods & Ingredients

1797

Advanced Food Products

2058

Advanced H2O, Inc.

310

American Beverage Corp.

WHEN:

2134

Anheuser-Busch

May 4-7, 2008

311

Ardea Beverage Co.

2532

Coca-Cola North America

WHERE:

1893

CytoSport, Inc.

1052

Campbell Soup Company

2280

Classic Wines of California

MONDAY, MAY 5, 2008

1334

Disney Consumer Products

305

Evian North America

7:00am - 5:00pm Registration

1734

Flavor Infusions, Inc.

WHY:

864

Glass Packaging Institute

Dozens of vendors and suppliers will be on hand to show retailers their hot new products. Education sessions will focus on everything from theft prevention to the future of category management.

2190

Icelandic Glacial, Inc.

445

InZone Brands

1008

Kellogg Company

233

Kids Only, LLC

1943

Kraft Foods, Inc.

1281

Lt. Blender’s Frozen Concoctions

2152

Miller Brewing

602

NBI Juiceworks

2290

Niagara Bottling

2065

Nestle’ USA, Inc.

1875

Nature 101

871

Organica Beverages

1777

Reed’s

702

SG Beverage Solutions Inc.

1764

The J.M. Smucker Company

455

Talking Rain Beverage

911

Zipfizz

WHAT: The FMI Show and Marketechnics

Mandalay Bay Convention Center Las Vegas, Nevada

SATURDAY, May 3, 2008 8:00am - 5:00pm Registration

SUNDAY, MAY 4, 2008 8:00am - 5:00pm Registration 1:00pm - 4:00pm Business Sessions 4:00pm- 5:00pm Opening Keynote Session

8:00am - 11:00am Super Session 8:00am - 11:00am Business Sessions 11:00am - 5:00pm Exhibit Halls Open

TUESDAY, MAY 6, 2008 7:00am - 5:00pm Registration 8:00am - 11:00am Super Session 8:00am - 11:00am Business Sessions 11:00am - 5:00pm Exhibit Halls Open

WEDNESDAY, MAY 7, 2008 7:00am - 12:00pm Registration 8:00am – 9:00am Closing Keynote Session 9:00am – 1:00pm Exhibit Halls Open

50

BEVERAGE SPECTRUM :: APRIL 08