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APRIL 30, 2009


How Online Marketing Can Boost Sales

Diet Coke and Mentos duo Stephen Voltz and Fritz Grobe of


2009 KIDS’ BEVERAGE GUIDE · See page 31 for details ·

SWOP Digital Proofing Bar

Dive into su

© 2008 America’s Milk Processors. got milk?® is a registered trademark of the California Milk Processor Board. ©2009 America’s Milk Processors. got milk?® is a registered trademark of the California Milk Processor Board.

mmer sales.

APRIL 2009 vol.

7 :: no. 3

cover story 24 Advertising. Plugged In. Taking the Measure of Online Marketing

special section 31 Kids’ Beverage Guide The 2009 Beverage Spectrum Kids’ Beverage Guide

features 42 Brands in Transition Zico leads the Coconut Water Revolution

46 Category Focus: RTD Coffee Still no scaling Mount Starbuck’s

columns 6 First Drop Drop the Price for Kids

8 Publishers Toast



All Niche, All the Time

20 Gerry’s Insights The Obstacles to Growth in Kids’ Beverages

22 Blending Channels Convenience Insights

departments 10 Bevscape Business Crafty Competition

12 Bevscape Innovation New Mintel Stats

14 Channel Check Private Label, Public Growth

16 New Products Vitaminwater 10; Trop 50

48 Promo Parade One word: O-Face




Beverage Spectrum (Postal Number 024-552) 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, Inc. 44 Pleasant Street, Suite 110, Watertown, MA 02472. Periodicals postage paid at Boston, MA and additional mailing offices. POSTMASTER: Please send address changes to Beverage Spectrum Magazine, Subscriber Services, 44 Pleasant Street, Suite 110, Watertown, MA 02472



By Jeffrey Klineman

CHEAPER KIDS’ BEVERAGES? TRY IT. THIS ISSUE OF Beverage Spectrum features a lot of discussion of the merits of various kids’ beverages. As the owner of a pair of them (kids, that is; the drinks are free), there’s one point that I need to make with regard to this part of the business that is rarely addressed, and that is that kids are random, unpredictable, often ornery little individuals. Case in point: recently, when my fouryear-old, Charlie, had a bout with one of the gastrointestinal issues that bedevil the preschool set, I took advantage of my position as beverage magazine editor to bring home a bunch of kid-oriented products that purport to offer rehydration to children: some sports drinks, a couple of brands of coconut water, even some juice. Charlie was sorely in need of electrolytic fluids, and, due to repeated retching, was in compliant mood. But he wouldn’t take a sip. Instead, he took one look at the packages – all of which are designed to appeal to his age group – said “I don’t like it,” and scrunched his face up into something resembling an acorn. Meanwhile, his sister Madeline, who is two, started screaming “Try IT! Try IT!” and downed a can and a half before we could blink twice. This didn’t surprise us; the boy rarely drinks anything but water. The girl has to be forcibly restrained from drinking out of our coffee pot. So we went out and bought Charlie one of those modernist, electrolyte-enhanced waters, hoping that the extra salt would help him out. Again, after one look at the bottle, he decided that he didn’t want to try that, either. Eventually, we were forced into sneaking him flavorless, clear, electrolyte-enhanced water in a sippy cup by pretending it came out of the tap. Later, we did manage to get some other salts into him, as he decided to wolf down one of his favorite snacks: olives. Not to make my family into a microcosm of the world of kids’ marketing, but this is the kind of in-home taste survey that can


drive a parent to start concocting – and then trying to sell – children’s martinis. From a legal standpoint, this would be a bad strategy. But so is the idea that parents are willing to pay martini prices for a product that their kid could turn down at first glance. To put an end to this rejection risk, how about a kids’ drink that is healthier – and cheaper – than a Coke? Because that, to a large extent, is what kids’ beverages are competing with, and one of the problems we constantly see with kids’ beverages is that they are often sold at more than twice the price of a less healthy alternative. And kids, with the exception of the best-advertised or best licensed products (and those products rarely have a significant health focus), would rather have that cheaper option. They see their folks drinking them, they’re readily available everywhere (Except in schools. Ironically the one place the parents aren’t the gatekeepers is the one place where kids are able to get reasonably-priced healthy drinks from vending sources) and they’re often the most affordable option. Of course, this has changed somewhat with the advent of bottled water as a major beverage category. Say what you want about the problems bottled water is having right now, but one thing that those cheap pallets of water have demonstrated is that it’s possible for an alternative, healthy beverage to come into vogue – and quickly -- for every age group. Parents think they’re doing better by their kids when they pick up a case of bottles instead of a two-liter CSD, and hey, it’s just as cheap an option. But kids’ affinity for the drinks of their

parents doesn’t mean that there’s no way to provide them with healthy, age-specific options. As we know, they are a mercurial, tough-to-please bunch. But their willingness to model their choices based on the decisions of the adults in their lives – and there are plenty of kids who drink vitaminwater because their folks do, as well – means that the problem might not lie with the healthiness of the products, but with their tendency to pander and put their child-centeredness on a pedestal, and a pricey pedestal, at that. No one here is against companies turning a profit. But considering how mercurial the target audience is, wouldn’t it make sense to set up a reasonable price point for those products that lies somewhere between a sugary CSD, a sugary kids’ drink, and a plain old water, so that a healthier kids’ beverage can be somehow considered a rational alternative, not a luxury item? It worked with vitaminwater, and it worked with Gatorade, after all. Bring down the risk to the consumer’s wallet, and you might find them more willing to gamble on something healthier, even if they know that their kids are as likely to turn it down as they are to scream “Try IT! Try IT!” If it’s good, you’ll make up in volume what you lose in premium pricing. Although, if that’s the strategy you choose, my own family’s example notwithstanding, I’d advise against making it olive-flavored.


By Barry J. Nathanson PUBLISHER Barry J. Nathanson EDITOR Jeffrey Klineman


I’D LIKE TO HAVE a dollar for every time I hear someone, often a retailer or distributor, tell me that a new product is just a niche brand and isn’t significant enough to consider. I’ve spent 17 years in the industry hearing that refrain. In my earlier years, every launch had to be mainstream and have aspirations for national penetration, competing with the “big boys.” It was a simpler time with little or no innovation. Then along came the Snapples, the Arizonas, the Perriers, the Samuel Adamses, the Fijis – niche brands all, right? – and the shift had begun. Niche brands have redefined the industry, and the end product of the beverage revolution has been that there are very few mainstream beverages today. Niches are now the center of the industry. Just as the above-named companies blazed new trails in the beverage landscape, other ones began to follow, run by folks who recognized the trend. I remember my numerous conversations with Darius Bikoff, the founder of vitaminwater, when I would try to temper his enthusiasm about the importance of his creation. I always said that I thought what he had done was great, but as a niche brand, it would only achieve limited success. I have never made that claim again. The playing field is different from how it was back then. Now, the dynamics of distribution have made it harder, if not impossible, to break in without the potential to either expand on or create a major niche. Not too many distributors are looking for solid mainstream performers now.




It’s easy to see why they wouldn’t. Red Bull, followed by Monster, started as a niche brand for an exotic new category. Billions of dollars in sales, and dozens of competitors later, energy drinks are a mainstay of the industry. Honest Tea led a charge for organic drinks that has spawned dozens of companies that serve that segment, one that truly is for the benefit of consumers and for society in general. The variety is amazing. Today, the functional benefit category is flush with brands that claim to soothe, calm, excite, give muscle and joint relief, and supplement your diet. If these benefit claims can be realized, then they too will be a niche that joins the main stream. I am excited about the new category of protein shakes, like Muscle Milk, that are moving into view. Aside from being great tasting, they have very clear, proven efficacy. They took a different route to market coming from the nutritional supplement side, but they’ve been right at home on beverage shelves. Another niche, another shelf, another door. And it’s gotten to the point where the niches have started recombining with the mainstream. Even the venerable CSD category has many new entries with a natural, fortified, and enhanced twist. Many are tea and juice based. Their taste profiles are distinctly different, and very good. Niche positioning and marketing are the keys to success in beverage retailing today. Everyone take notice. The next niche brand might be the next to enter the mainstream.

ART DIRECTOR Matthew Kennedy GRAPHIC DESIGNER Amadeu Tolentino ASSISTANT EDITOR Matt Casey ASSOCIATE PUBLISHER Adam Stern JR. DESIGNER Natalie Iknaian SUBSCRIPTION INQUIRIES Adam Stern 617-715-9679 ONLINE RENEWALS & CHANGES ARTICLE REPRINTS (500 copies or more) FosteReprints 800-382-0808 x142 BEVERAGE SPECTRUM PUBLISHING INC. CHAIRMAN John F. (Jack) Craven PRESIDENT AND EDITORIAL DIRECTOR John Craven EDITORIAL 44 Pleasant Street, Suite 110 Watertown, MA 02472 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

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GILDING THE ILLY Ilko, the joint venture between CocaCola and Illy, announced it will launch a broader U.S. and European roll-out of its jointly developed ready-to-drink coffee, Illy Issimo, which had been test marketed in New York and Los Angeles. Vinay Kapoor, chief executive of Ilko, told Dow Jones that distribution will avoid large retailers, favoring select outlets and university stores which would better fit the brand’s luxury image. Dow Jones reported that Ilko intends to reach 30 percent of the premium ready-to-drink coffee market by 2012, and plans to enter the Japanese market later this year. The product will compete with Starbuck’s canned coffee drinks, produced and distributed in partnership with Pepsi.

Starbucks’ lines stand atop the currentlyrocky RTD coffee category, which Information Resources Inc. reported in February had contracted by 12 percent in club, drug and convenience stores. Illy Issimo represents Coca-Cola’s fourth attempt at marketing a coffee product. The beverage giant also experimented with a coffee-cola called Coke Blak, a coffee line co-branded with chocolate company Godiva and another co-branded with coffee chain Caribou Coffee. With Illy Issimo, though, Coca-Cola has taken the unprecedented tack of employing respected independent distribution houses Big Geyser in New York and Haralambos in L.A. Both distributors have reputations as expert brand builders in their respective markets.

CRAFTY COMPETITORS The Brewers Association announced that small independent craft brewers continue to gain alcohol market share. From 2007 to 2008, estimated sales by craft brewers increased 5.8 percent by volume and 10.5 percent in dollars. The association estimates 2008’s craft brew sales at $6.34 billion, up from $5.74 billion in 2007. That pushed the crafts houses’ overall share of the beer category to 4.0 percent of production and 6.3 percent of retail sales. These increases came at a time when the cost of running a craft house is on the rise and overall beer sales are down. The Beer


Institute reported that February’s beer consumption was 1.6 percent less than the same period the year before, and The Brewers Association reported that the cost of operating a small brewery increased more than 39 percent in the period from November 2007 to November 2008. The Association said today’s craft brewers face many challenges including access to ingredients and raw materials, increased pricing for materials and supplies and competition for shelf space at the retail level.

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ENERVATED INNOVATION American beverage marketers released a cumulative total of just 10 new energy drinks in February, according to new data from Mintel – a fraction of the 62 released during the same period in 2008. The segment fared better in March (24 introductions), but Mintel’s data confirmed what we’ve known anecdotally: under pressure from the slipping economy, beverage marketers are reeling back on product innovation. Firms rolled out just over half as many new beverages in the first quarter of 2009 as they did in 2008. The fall hit nectars hardest, as the niche, premium segment dropped nearly 85 percent, but water (72 percent), iced tea (80 percent) and iced coffee (72 percent) suffered similarly.


Mintel’s data did reveal a couple of bright spots, though. Sports drinks and meal replacements – revitalized by the rise of Muscle Milk and a renewed push on isotonics by both Coca-Cola and PepsiCo – saw more than double the number of new product introductions in the first three months of 2009 as they did in the same period in 2008. The overall downward trend in innovation may be leveling off. While new beverage introductions were down 48 percent in the first quarter of 2009 compared to the first quarter of 2008, that gap has slimmed as the year has gone on. January 2009 saw 62 percent fewer introductions than January 2008, but March 2009 only saw a 31 percent drop in new products compared to the same month the previous year.



New Non-Alcoholic Beverages Tracked in the US by Sub-Category*

Sum of Jan

Sum of Feb

Sum of Mar

Sum of Jan

Sum of Feb

Sum of Mar

Carbonated Soft Drinks














Energy Drinks







Fruit/Flavoured Still Drinks














Meal Replacements & Other Drinks







RTD (Iced) Coffee







RTD (Iced) Tea







Sports Drinks





















Sum of Jan

Sum of Feb

Sum of Mar

Sum of Jan

Sum of Feb

Sum of Mar








Not Specified







Sugar (Low/No/Reduced)







All Natural














No Additives/Preservatives







Vitamin/Mineral Fortified







Calorie (Low/No/Reduced)














Human (Ethical)







Leading Claims on New Non-Alcoholic Beverages Tracked in the US*



HEAVYWEIGHT LIGHTWEIGHTS PepsiCo introduced a new “Eco-Fina” bottle for Aquafina that weighs in at half that of its 2002 predecessor. The company boasts that the new package will save 75 million pounds of plastic per year, and it may go a long way toward saving the brand’s image. Bottled water has been under assault from environmentalists as they seethe about the energy used to deliver something that flows from every faucet in the U.S. One study pegs the energy required to deliver a bottle of water at 2000 times that of tap water, and, where the environmentalists have left off, cash-strapped politicians have picked up. Florida governor Charlie Crist has floated a number of ideas for using bottled water revenues to help fill the state’s budget gap, and New York’s proposed “Bigger Better Bottle Bill,” which would extend a soda-based deposit to include bottled water, has been gaining momentum. With those forces (and falling sales growth) in mind, bottled water brands have employed a tool belt of marketing tricks to deflect bad press, and Aquafina’s entry is really the next step in a continuing trend. The Eco-Fina bottle weighs in at 10.9 grams, 15 percent less than the bottles Nestlé uses for its regional labels such as Poland Spring, and 0.1 grams less than Nestlé’s Pure Life bottles. Still, it won’t be long before another brand introduces an even lighter bottle. Nestlé said it’s already planning one. Then the Pepsis and Cokes of the world will have to find a way to carve out even more PET from their shells.

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Channel Check

april 2009



Convenience/PET Still Water

PRIVATE LABEL 52 Weeks through 3/22/2009

Change vs. year earlier



Private Label



Sparkling/Mineral Water



Private Label



Canned and Bottled Tea

Need proof that consumers are turning to store brands more than usual? Take a look at this comparison between private label purchases and their parent categories: in nearly every case, private label is performing better than the overall category trend. So what’s driving it? According to IRI’s 2009 Private Label Report, it’s because consumers are fighting against economic pressures. But others believe the upward surge is because of the increasing level of comfort consumers have with store brands overall – one that started growing even before the current crisis. Either way, though, if the trend wasn’t apparent before, it sure is now.

Dollar Sales



Private Label



Cappucino/Iced Coffee







Private Label Fruit Drinks Private Label



Fruit Juice Blend



Private Label



Juice and Drink Smoothies



Private Label






Private Label



Orange Juice



Private Label



Other Fruit Juice



Private Label



Sparkling Juice



Private Label



Energy Drinks



Private Label



Sports Drinks



Private Label



Heading Up: Private Labels Whole Foods Market Brand, 365 Everyday Value.

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










52 Weeks through 3/22/2009

$8,720,078,000 4.3%

$1,697,979,000 -1.5%








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



Dollar Sales

Change vs. year earlier







Gatorade G2



Gatorade All Stars



Gatorade Frost



Gatorade Rain




Dollar Sales

Change vs. year earlier

Private Label









Glaceau Vitaminwater



Poland Spring









Gatorade Tiger



Gatorade Fierce



Deer Park



Gatorade X Factor



Nestle Pure Life



Gatorade A.M.



Crystal Geyser



Heading Up: Gatorade Tiger

52 Weeks through 3/22/09 SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart


Dollar Sales

Heading Up: Private Label

52 Weeks through 3/22/09 SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart

Change vs. year earlier


Dollar Sales

Red Bull





















Lipton Brisk



Java Monster



Diet Snapple






Diet Lipton



Change vs. year earlier

Full Throttle






Monster XXL



Lipton Pureleaf



Amp Overdrive



Private Label






Diet Nestea



Heading Up: Doubleshot

52 Weeks through 3/22/09 SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart

Heading Up: Lipton Pureleaf



Dollar Sales

Change vs. year earlier

52 Weeks through 3/22/09 SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart

Dollar Sales

Change vs. year earlier




Bud Light






Miller Lite



Corona Light



Coors Light









Heineken Premium Light



Natural Light



Modelo Especial



Michelob Ultra Light



Stella Artois



Busch Light






Miller High Life



Guinness Draught









Miller Genuine Draft



Heading Up: Stella Artois

52 Weeks through 3/22/09 SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart

Heading Up: Miller High Life

52 Weeks through 3/22/09 SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart


NEWPRODUCTS • JUICES • In March, Sunny Delight Beverages Co. launched Fruit Simple, a 100 percent all-natural fruit smoothie with no added sugar in key upstate New York markets. Each 8 oz. glass provides two servings of fruit. This product is available in a variety of flavors, including Pomegranate Blueberry, Strawberry Banana, Orange Mango, and Mixed Berry, and is packaged in 12 oz., 32 oz., and 40 oz. PET bottles in upstate-NY Walmart supercenters, convenience stores and grocery stores. For more information, call Sunny Delight at (212) 679-2233. First Juice, Inc. has introduced two new flavors featuring purple carrots. New blueberry+purple carrot and peach+purple carrot. Purple carrots contain anthocyanins, which act as powerful antioxidants. First Juice is sold in an 8 oz. reusable and recyclable, spill-proof, BPA-Free sippy-top container that is convenient for parents on-the-go, while the First Juice 32 oz. bottle is for use at home, and for refills. First Juice can also be purchased in a Playgroup Pack containing 12 shelf-stable 8 oz. bottles. MSRP is $1.99-$2.79 for the 8 oz. and $3.49-$4.49 for the 32 oz. bottle. First Juice is available nationally at Whole Foods Market, Babies”R”Us and Toys”R”Us, and online at www.diapers. com, and on For more information, call (646) 277-8720. Tropicana Products, a division of PepsiCo, Inc. has launched Trop50, a category innovation delivering orange juice with 50 percent less sugar and calories. It is naturally sweetened from the stevia plant along with juice squeezed from fresh oranges. At 50 calories, each 8 oz. glass of the Trop50 orange juice beverage squeezes in a full day’s supply of vitamin C and is a good source of potassium. It also provides 10 percent of the daily recommended intake of antioxidant vitamins A and E. Tropicana has tapped actress Kyra Sedgwick to be the face of Trop50. Trop50 is available in three varieties - Trop50 Pulp Free; Trop50 Some Pulp; and Trop50 Pulp Free Calcium & Vitamin D. All varieties are packaged in 59 oz. cartons, which are available for a suggested retail price of $3.59, and Trop50 Pulp Free Calcium & Vitamin D is also available in 12 oz. bottles, which are available for a suggested retail price of $1.69. Trop50 is currently rolling out nationwide and available wherever Tropicana Pure Premium products are sold. For more information,


call Tropicana at (312) 831-2017. The Currant Company has launched five additional black currant-based nectars: CurrantC Black Currant Boysenberry Nectar, CurrantC Black Currant Strawberry/Kiwi Nectar, CurrantC Black Currant Clementine Nectar, CurrantC Black Currant Passion Fruit Nectar, and CurrantC Black Currant Blueberry Nectar. These products are refrigerated and can be found in supermarkets and grocery stores throughout the United States and Canada in environmentally friendly, recyclable packaging. CurrantC black currant nectars retail for between $2.99 - $3.49. For more information, call the Currant Company at (310) 740-7456.

• CSDs • PepsiCo has launched Sierra Mist Ruby Splash, a new ruby grapefruit-flavored line extension of the company’s lemon-lime soft drink portfolio. Currently available in retail stores nationwide, this marks the first new flavor from Sierra Mist that will be available year round. Sierra Mist Ruby Splash is offered in regular and diet versions of 20 oz. bottles, 2 L bottles and 12-packs of 12 oz. cans. It will be supported by a full slate of TV, radio and digital advertising, highlighted by the tagline, “It’s Liquid Sunshine.” It will be line-priced with other Pepsi CSDs. For more information, call PepsiCo at (914) 253-2950. Dr Pepper Snapple has launched a new line extension for its 7UP brand, Cherry 7UP Antioxidant. The beverage combines the flavor of 7UP with a hint of cherry flavor and the bonus of antioxidant Vitamin E. The new Cherry 7UP Antioxidant includes 10 percent of the recommended daily intake of Vitamin E per 8 oz. serving. Cherry 7UP Antioxidant is available now in both regular and diet versions. The nationwide launch of Cherry 7UP Antioxidant will be supported by an integrated marketing campaign featuring TV and print advertisements. Consumers can also visit and download a coupon for $1 off a 12-pack of Cherry 7UP Antioxidant. This product is available nationwide everywhere 7UP products are sold. For more information, call Dr Pepper Snapple at (800) 696-5891. Dr Pepper Snapple Group has also launched Dr Pepper Cherry. The new blend combines the taste of Dr Pepper with cherry flavor. The brand is being supported by a series of pop culture “Docs,” including Gene Simmons, Julius Erving and Kelsey Grammer. Dr Pepper Cherry will also hit the streets this summer, sampling more than one

million cans. Dr Pepper Cherry is now available nationwide in both regular and diet, line priced with regular Dr Pepper offerings. For more information, call Dr Pepper Snapple at (800) 696-5891.

• FUNCTIONAL WATER • glaceau has launched stevia-sweetened vitaminwater10 in four varieties: xxx (acaiblueberry-pomegranate), essential (orangeorange), energy (tropical citrus) and multi-v (lemonade). vitaminwater10 is available in 20 oz. bottles at a suggested retail price of $1.49. The 20 oz. bottles are also available in 20-packs, at a suggested retail price of $18.99, which include xxx (acai-blueberrypomegranate), energy (tropical citrus) and multi-v (lemonade). additionally, vitaminwater10 is available in 16 oz. 4-packs of xxx (acai-blueberry-pomegranate) and essential (orange-orange), at a suggested retail price of $4.99. For more information, call glaceau at (718) 746-0087. Fruit2O is introducing Fruit2O Essentials, a fortified water that brings the nutrients and refreshment of real fruit to crisp, clear water. Fruit2O Essentials offers six flavors: Cranberry Raspberry, Strawberry Kiwi, Peach Mango, Citrus, Blueberry Pomegranate, and Cherry Acai. Each bottle provides vitamins and minerals in amounts found in two servings of fruit, and even one gram of fiber. The May launch of Essentials will be supported by a national cable TV and online marketing campaign, sampling events, public relations, a cause marketing program and promotions. This product will be available in many US markets beginning this month. Single 18 oz. bottles will be sold in grocery stores for a recommended retail price of $1.29-$1.49, and in 15 and 20-packs at Club stores for a recommended retail price of $9.99 to $12.99. For more information, call Fruit2O at (800) 395-5849. Function Drinks has expanded two of its popular Functional platforms, adding a Strawberry Guava flavored Function: Alternative Energy and Peach Mango flavored Function: Light Weight to its lineup. Function: Alternative Energy, Strawberry Guava, is an all-natural, non-carbonated, time-release energy drink that works to support the body for 6-8 hours. The proprietary blend of catuaba, yerba mate, guarana, and muira puma as well as B complex vitamins, vitamin C, and zinc deliver a smooth and sustained energy boost. Function: Light Weight, Peach Mango employs a formula of resveratrol and the green tea extract, EGCG to rev up and support the body’s natural calorie burning abilities, as well as gymnema extract, which


supports the body in naturally curbing sugar cravings and helps maintain normal carbohydrate metabolism and control. In addition to Peach Mango, three other flavors of the Light Weight platform are currently on the market. These products will be available in 16 oz. PET bottles and will be line priced with other Function products. For more information, call Function at (310) 550-7776.

• SPIRITS • The newest addition to BACARDI Flavored Rums portfolio is BACARDI Dragon Berry. Dragon Berry offers the light, fruity flavor of strawberry, infused with the crisp, fresh flavor of dragon fruit. BACARDI Dragon Berry packaging features a distinctive label design that emphasizes the unique look and taste of this tropical fruit. With a suggested retail price of $13.99 for a 750 ml bottle, the 35 percent alcohol-by-volume rum also comes in 200 ml., 375 ml., 1 L and 1.75 L sizes. This rum is designed for mixability and will be available nationwide beginning in May 2009. For more information, please visit For more information, call (305) 573-8600. Kindred Spirits of North America, Inc. has announced that Xanté has premiered at the shores of New York and Miami. Xanté combines the sweetness of virgin pears with a touch of the finest French Cognac matured for four years in French Limousine Oak barreled with hints of vanilla. The final is produced in the finest Swedish distilleries in a category all its own. Distributed by Kindred Spirits of North America, Inc., Xanté retails at approximately $40 for a 750 ml bottle. For more information on Xanté please call Fox Greenberg Public Relations at (212) 334-1212. Beam Global Spirits & Wine, Inc. and Sauza Tequila have launched of Sauza Margarita-in-a-Box. Made from a refreshing blend of lime juice, Sauza Blanco Tequila, triple sec and margarita mix, consumers now need only to add ice to make the perfect margarita. The compact Margarita-in-aBox fits easily into a refrigerator, keeping it fresh for up to six weeks after opening. Its lightweight packaging makes it great for barbecues, picnics and tailgating events. Beginning in May 2009, Sauza Margaritain-a-Box will be available in a 1.75 L box size in the traditional margarita flavor. The 19.9-proof Margarita-in-a-Box has a suggested retail price of $17.99, which will vary by market. The new product launch will be supported with shelf talkers, case cards and displays like the La Vida Margarita Trolley.


For more information, call Beam Global Spirits at (202) 496-1000.

• ENERGY SHOTS • Beginning this June, Red Bull will expand its energy options in the U.S. with Red Bull Energy Shot and Red Bull Sugarfree Shot. The new products come in re-sealable 2 oz. bottles that don’t need to be refrigerated. Red Bull Energy Shots are concentrated, non-carbonated versions of Red Bull in packaging that mirrors the parent product. Each shot has 25 calories and the sugarfree shots have 2 calories. Each contains 80mg of caffeine. Red Bull Energy Shot will be available nationwide in single-serve (MSRP $2.79 in c-stores, $2.49 in grocery) and 2-packs (MSRP $4.99). BDI Marketing, marketers of the Mini Thin family of energy products, has announced the retail debut of a new mango flavored triple strength 2 oz. energy drink shot, Xtreme Energy Rush. Three times stronger than a single cup of coffee, Xtreme Energy Rush shots are sugar-free and contain no carbohydrates. Triple Strength Xtreme Energy Rush ingredients include mega doses of Caffeine, L-Taurine, Vitamins B6 and B12 and Niacin. This product is available at retail stores nationwide now at the manufacturer’s suggested retail price of $2.99 each. All Mini Thin 2 oz. liquid shot products are available in 12 unit display boxes and 144 unit cases consisting of 12 display boxes per case. For more information contact BDI Marketing at (212) 465-1290.

• TEA • Jones GABA, Jones Soda Co.’s highly anticipated tea-juice blend with the amino acid, GABA, will be available in stores across the country this spring. Jones GABA is the only beverage in the U.S. with natural PharmaGABA, which studies have shown to improve mental focus, balance and clarity, while reducing stress. Its benefits extend to a wide array of consumer groups. PharmaGABA is the natural form of GABA, a key neurotransmitter in the regulation of proper brain functionality. In Japan, sales of GABA-infused food and beverages increased more than five-fold between 2004 and 2006, with 2006 sales reaching approximately $122 million. Jones GABA is available nationally beginning early spring in four refreshing flavors: Fuji Apple, Lemon Honey, Nectarine and Grapefruit. Single serve 12 oz. cans contain 150 mg of PharmaGABA and retail for $2.99. Jones GABA is 100 percent natural and ranges from 80 to 90 calories,

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in a 6-pack and 4/6-pack case. The new packages launced in early April in primarily West coast markets, where the beer was first discovered by surfers bringing it back from surf trips in Baja California, Mexico. Launch markets include California, Nevada, Oregon, Idaho, Washington, Texas and Louisiana.To further support the launch of the Pacifico 7 oz. package and to generate local media coverage, Crown will execute a World’s “Smallest” Toast event in the seven roll out markets in April. Pacifico fans will celebrate the introduction of the new package by raising the 7 oz. bottle to toast the launch. For more information, call Crown Imports at (312) 873-9279. Anheuser-Busch has launched Budweiser & Clamato Chelada and Bud Light & Clamato Chelada in a 6-pack, 12 oz. can configuration. Chelada is also available in 16 oz. and 24 oz. cans. By offering the new 12 oz. can, Anheuser-Busch aims to increase both on- and off-premise distribution of this popular brand. The new size is appealing to on-premise consumers, including adult females, and is ideal for serving and enjoying at events like golf outings, tailgating and brunches. Price ranges for this product will be from $7.99 to $9.99. For more information, call (314) 577-9667.

• ENERGY DRINKS • Borojo Beverages, LLC has launched Borojo Energy, the first line of USDA-certified organic energy drinks to be powered by a newcomer South American superfruit, borojo. Non-carbonated and free of artificial ingredients, Borojo Energy opens a new category in the competitive space of energy drinks and functional beverages as an energy hybrid toting an exotic superfruit. With its unique array of energizing properties, the “borojo boost” will change the functional beverage landscape. Borojo Energy launches with three drink flavors: Strawberry Melon Kiwi, Pomegranate Açai Blueberry and Guava Passion fruit. The 16.9 oz. bottles are slated to land on grocer’s shelves spring, 2009 nationwide. Weighing in at 50 calories per serving, borojo is rich in vitamins, minerals, amino acids and protein. This product is currently seeking distribution. For more information call (212) 253-0474.

• BEER • Pacifico Beer, an authentic beer imported from Mexico, is adding a new package with the introduction of the Pacifico 7 oz. bottle

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By Gerry Khermouch

MORE THAN CHILD’S PLAY IT’S ONE OF THE PARADOXES OF contemporary beverages. Moms swear they want something better than soda for their kids to drink – nutritious would certainly be nice, but if not that, then at least something that’s more interesting to drink than plain water but doesn’t contain the sugar, the empty calories, the artificial colors and sweeteners, all the bad stuff. And don’t even talk about orange juice, the one-time default choice that used to be a badge of parental care and responsibility. In recent years parents have been read the riot act on that one. This all makes it sound as though healthier kids’ beverages should be a whopping opportunity for someone, right? And yet, when you review the field of beverages that were launched precisely to provide these healthier alternatives, it’s hard to find anyone doing more than just surviving. Some aren’t even doing that. Waddajuice has pretty much thrown in the towel on its efforts to raise the capital that would have enabled it to resume production of its juice-and-purified-water blend, even though it’s spillproof bottles had proved a hit with moms in emporiums like Stew Leonard’s in the affluent suburbs north of New York. White Hat Brands, marketer of Dog On It fortified juice drinks, is out beating the bushes for capital to resume production, even as it rethinks its basic premise. (These include the ready-to-drink sector itself; it’s devising powdered beverages that might allow it to dodge some of the punishing production and distribution economics of ready-to-drink.) Even a well-financed, carefully researched brand like Crayons has lurched from one restage to another, burning through millions as it gropes for the branding and formula answers that might click with moms and their brood. So what’s the problem been? Talk to the developers of these drinks and the first thing that comes through is that, nutritious or not, they’ve found that they’re still battling against the rock-bottom price and massive shelf presence of Capri Sun and its ilk. And they also blame their target consumer. “Moms lie,” they say – meaning the same 20.BEVERAGESPECTRUM.APRIL.09

moms who feel compelled in focus groups to insist that they would happily pay a premium for better beverage choices for their kids act quite differently in the store. (This seemed to be the case even before the recession crimped spending on a wide range of products.) One can’t argue that these marketers were naïve in believing the mothers in the first place because, in the milk segment, it was moms paying a steep premium for organic milk that ignited the broader organic sector in the first place. And while the price points of some of entries definitely would be a challenge to all but the most affluent families, the disappointment has been shared even by a brand like Wild Waters, which went out of its way to rig its economics so that it could get its nutritionally enhanced waters onto store shelves at less than a buck a bottle. So is all this opportunity a mirage? Not necessarily. As the prevalence of obesity rises, parents are concerned about what their kids drink, and some influential retailers – from 7-Eleven to Toys ‘R’ Us – have been setting up healthier-beverage sets to cater to them. It’s too early to say whether those experiments will pan out but you can’t argue that these retailers aren’t attuned to their customers. (And for undercapitalized beverage marketers, a presence in those sets provides a national billboard that could help a lot in building brand awareness.) So if you can’t blame the consumers, then the problem may also be simply that none of the healthier beverages in the market today has completely nailed it. It’s a complicated trick to offer a distinctly superior nutritional premise that gets past the gatekeeper moms while also offering something kids – a finicky focus group, even when tranquilized – actually want to drink. That means some concessions to taste as well as more exciting branding. It’s not clear to me that the latter amounts to no more than label imagery of wakeboarders or cartoonish dogs. On top of that, if you’re going to be considerably higher-priced than Capri Sun, it may help to come across as offering some distinct added value for the money. This may

be where brands that are essentially selling diluted juice miss the mark: consumers may bridle at the notion of paying more for something they can do in one step in their own kitchen (even if few of them actually do). Distribution is another conundrum: economics dictates that most brands eschew DSD and instead take the warehouse route to market in order to keep their price low – but in doing so, they find themselves waging battle on precisely the Capri Sun-dominated grocery shelves that are hostile to new brands, rather than in more impulseoriented channels where they might get a look from parents and their kids. Since most of them are undercapitalized, they’re going into that battle with few marketing weapons at their disposal. The bright side of this is that these are a lot of levers with which to play around until somebody gets it right. Roberta Greenspan, the mom who devised the Wateroos brand of flavored water packed in juice boxes, reminded me the other day that even familiar adult-skewing brands may take a decade or more to hit their stride. Patience is key, she counseled. With lots of kids apparently drinking brands like Gatorade and Vitaminwater, there’s also a chance that fundamentally adult-targeted brands could play the aspirational card to bring kids aboard too – as Honest Tea is doing with its well-received Honest Kids pouched juice line and Hint is trying to do by re-entering the kids space with a boxed version of its unsweetened enhanced waters. Somebody, eventually, should be able to figure it out. The question is whether the segment’s more inventive players are able to hang in there through these tough economic times. And whether those moms will finally get scared enough of shopping in the “husky” section to make that perseverance worthwhile. Longtime beverage-watcher Gerry Khermouch is executive editor of Beverage Business Insights, a twiceweekly e-newsletter covering the nonalcoholic beverage sector.


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By Debbie Wildrick


WE LEFT OFF last column with an important point, that beverages are in multiple channels and the use of multiple channels has increased dramatically as a marketing method. We also stressed that loyalty and point-of-purchase were the keys to cutting through channel blurring . Now, when it comes to convenience stores, there are multiple examples of encroachments into the traditional strength of that channel. For one, there are multiple places within a mile or so of my office to grab a sandwich and a cola – meaning that what was once the turf of convenience and deli is now available at the supermarket, or even at a store like Target. So how does the convenience store industry keep competitive with the options that surround their stores? What steps are necessary to build customer loyalty? As a starting point, it’s certainly fair to assume that beverages are one of the convenience channel’s core competencies. But it’s also true that many other retailer types have made great strides in another convenience strength, quick fresh food options, focusing especially


on the morning and lunch day parts. And traditional customer loyalty options, like loyalty programs, that other channels have used and been successful with will most likely not work for convenience. So, as a beverage seller in this multichannel environment, knowing there are others trying to (ahem) eat your lunch, how can you stand out and encourage loyalty? For convenience, in particular, I believe the answers lie in focusing on the right categories, effective merchandising, and discounting appropriately. Thinking about convenience, I am reminded of the Beach Boys and “Be True to Your School.” In any business, we learn that our greatest potential for increasing our business is to drive sales increases in high volume segments. If we’re good at beverages and our customers know us for beverages, let’s discover how to build that business. Continue to focus against what you do the best and do it even better. I recently visited a Turkey Hill store in Pennsylvania. I noticed that they had expanded their water category to include

a variety of import waters. As I continued through the store, I noticed signage suggesting to customers that new waters of the world were arriving daily. They had focused on water, which is one of the highest volume categories in the vault for the convenience channel. But they had gone further, enhancing the selection and communicating the new (higher margin!) items in-store. Focusing on the right categories and enhancing opportunities within those categories will grow the overall business. In a convenience store’s small footprint, space is precious and we all know it. Have you run out of ideas for using new space? Recently, there’s been a lot of buzz about improving the efficiency of the forecourt – either with displays of actual products or appropriate signage to push the upsell. When it comes to beverages, retailers – especially in warm-weather climates – know they need to find places to stack inventory and using the forecourt ultimately serves the dual purpose of inventory storage and of opening up new space for incremental sales, especially in take-home. There are also great examples re-

cently of retailers using this area for other categories, some of which can also move customers in for beverage purchases. NOCO in New York just added a propane exchange program through Blue Rhino to take advantage of this area, and 7-Eleven just tested $1 per night DVD rentals. They’ve been effective in using the forecourt, they’re adding a new category to their stores, and both of those categories (grilling and movie watching) scream for incremental beverage purchases. When it comes to discounting appropriately and creatively, my experience from managing beverages still holds true: a discounted price on a beverage that is going to be purchased as a single regardless of the discount doesn’t make any sense. It’s more practical to understand your data with regard to items that are purchased along with their single-serve sale. As an example, many consumers purchase a bottle of water with another beverage. They satisfy their current craving with the beverage and save the water for later. Or, in the case of an isotonic or an energy drink, they may plan on having one for morning consumption and noon consumption so they buy two. Understanding what other food items are most likely purchased with certain beverages can be a great tie-in opportunity and offer discounting in a different way. Be innovative with discounting. Avoid doing it just to do it and read your data after the discounting period to determine its actual effectiveness. It may end up being a discount you won’t run again. I’ve found several examples of this especially with categories with lower per-store unit sales. As a good example that ties all of these strategies together (albeit not for soft drinks), I love this: 7-Eleven recently introduced a private-label chip in a high volume category and drove it through effective merchandising under the roller grill on the top shelf. Just recently, I’ve been impressed with their implementation of the meal deal using their chips, the Big Gulp brand, and the ¼ pound Big Bite. What could seem like a natural to many in today’s blurred environment was enhanced with the effective use of the right price point, merchandising, signage, and a new brand. I am amazed at the number of stores I see with a display at the end of the aisle showcasing the actual combination of these items. That, along with the outdoor window banner, ties it all together for a successful and innovative program. I recently read about virtual reality simulations and using them to re-create the in-store experience as a tool to evaluate the effectiveness of sales initiatives. Obviously, these may be too costly and time-consuming for convenience, but it reminded me to point out the necessity to evaluate, evaluate, evaluate. Test your concepts and evaluate the results. Tweak those concepts, execute them, and evaluate the results again. Evaluate incremental growth, sales increases, and positive or negative changes in profitability. Make sure you’re making effective decisions. In a small store, even a small change can pay big dividends.




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ot so long ago, only the geekiest among us spent more than a couple hours per week on the web. We checked our email, visited a couple of websites, and then disconnected our 56k modem to clear the line for incoming calls. Maybe we read a message board or two, and maybe (before they were populated chiefly by 12 year olds, pedophiles and FBI informants) we visited a chat room. But that was before affordable broadband connections, wireless routers in every coffee shop, increasingly mobile and powerful laptop computers, and internetenabled smart phones enabled the average American to spend 68 hours per month on a computer – and they’re not just eyeing spreadsheets. They’re commenting on stories they read, forwarding viral video clips, and becoming fans of things like “Demetri Martin” or “Bacon” on social networks. There’s a reason people call the Blackberry the “crackberry,” and it’s the same reason President Barack Obama wouldn’t let the Secret Service take his away when he moved into the White House: We’re addicted to being online. With their unmatched ability to shape consumer habits through advertising, the big beverage brands have long understood the basics of online marketing – they’ve been creating websites for more than a decade now – but the ever-increasing number of opportunities for online consumer engagement has drastically changed the game in recent years. It has opened the field up to much smaller players, but the increased level of internet accessibility also means that it is more important than ever for even the smallest beverage brands to stay in touch with consumers, to encourage them to personally involve themselves with their favorite brands through things like “insider-only” sales and marketing information. Online marketing has become less about getting consumers to come to your web site. It’s become more about making sure you have secured a place in their online lives, so they’ll make sure to include you on the increasinglypermeable “real world” side of the monitor.

BUILDING BLOCKS While web sites might seem like a quaint throwback in a Facebook world, a company or product web site is often the consumer’s – or the retailer or distributor’s --primary point of contact with a brand. And while the technology has changed, brands still need a focal point. Whether it’s a home page or a blog, firms need a place where consumers can find basic information about a product, according to marketing expert Lee Odden, the CEO of TopRank Online Marketing and author of The twist is that even a basic home page should extend beyond bare facts and – at minimum – allow consumers to increase their engagement with the brand, according to Dan LaCivita, executive director of the digital promotions shop Firstborn. “We like to think people spending time with a

brand online is going to increase [intent to purchase],” Lacivita said. LaCivita’s firm has crafted homepages for alcoholic beverage firms including Corona, Smirnoff and Malibu that draw in consumers for nine to 15 minutes per visit, according to his metrics. While some of those sites include components that spider out to social networking hubs like Facebook and Myspace (more on those later), LaCivita said a brand’s digital strategy doesn’t have to invest in all those social and mobile applications collectively known as Web 2.0. Before a beverage company goes head-over-bottlecap into the new hyper-connected online world, Lacivita said it should know who their customers are and how they’re likely to receive an online campaign. “Listen more and do less,” LaCivita said. For example, he added, it wouldn’t have made a lot of sense to create an iPhone application when Wild Turkey hired Firstborn to revamp the iconic bourbon’s online presence. Instead he steered clear of web 2.0, focused on the brand’s history, crafting a homepage that included nothing more tech heavy than a couple of documentarystyle video clips. Most brands, however, serve a more tech-savvy customer base than Wild Turkey drinkers. The coveted 18-35 demographic has shifted so much of its entertainment time to the internet that Nielsen reported the age of the average TV viewer has climbed to 50 years old. And those younger consumers aren’t going to the web to see black text on a white background. To get them to spend time with the brand, marketers will want to use something a bit flashier than a company history. So, when LaCivita built sites for young-skewing liquors Smirnoff and Malibu, he included playful interfaces and interactive elements. But what LaCivita does on a small scale, big-money brands Anheuser-Busch, PepsiCo and Coca-Cola have pursued to a whole different level. Coke, the world’s number-one soda marketer, took a whimsical approach with its “Happiness Factory” site built around the 2007 Super Bowl commercial of the same name. On the site, visitors explore a fantastical factory and take part in virtual Coca-Cola production by playing games modeled after jobs shown in the commercials. PepsiCo took a similar approach with its DewMocracy Voltage site, built around the winning flavor from its DewMocracy campaign. The site is filled with electricity-themed games, and either site can suck in a visitor for 30 minutes before they realize their incessant giggling has enraged their coworkers and their boss is standing directly behind them, pink-slip in hand. Anheuser-Busch tried to take – unsuccessfully -- a divergent time-wasting approach when it launched in 2007. The site contained hours of original video content ranging from repurposed commercials to interviews with NFL cheerleaders to bar jokes. A-B recently scuttled the $15 million project after struggling with age verification problems and the cost of creating original content, but


portions of the endeavor live on. and allow consumer to watch the brands’ TV commercials any time they like, and also feature a smattering of other media, including music, slideshows and interviews with drivers from the Budweiser NASCAR team. Additionally, the site has served as a launching pad for another element of online marketing, providing a storehouse for the many Budweiser commercials that are forwarded from friend to friend, the so-called viral stage of marketing.

FEEDING THE CULT While these kinds of sites help consumers spend time with the brand, marketers can also use the modern online environment to let consumers participate and feel invested. Energy drink brand BAWLS Guarana has used its page for years to create a “cult-like following,” according to marketing director Sabrina Gonzalez. Gonzalez said BAWLS, with its core demographic of computer gamers – during all-night networked gaming festivals, BAWLS has been nicknamed “geek beer” and then rolled out a product of the same name -- has long been ahead of the technological curve. It was one of the first drink brands to create a web page, Gonzalez said, and it has since engaged in variety of online methods to create a community around the brand – chiefly by letting fans contribute. features a “Fun Stuff” section with videos and images created, not by Bawls, but by its consumers. Whenever a fan submits material that makes it onto BAWLS’ site, the company sends swag to the submitter. “If they went through all of that work anyway just to support our

brand it’s the least that we can do,” Gonzalez said. The tactic has helped keep fans like Austin “Snowy” Miller engaged. Miller created his first piece of BAWLS artwork in 2006 and later sent an entire portfolio of BAWLS-themed artwork – for free – to the company. BAWLS posted his work on its site, and Miller, now a freelance designer, still makes time to create the occasional BAWLS graphic. The brand also seizes other opportunities to engage its consumers. Gonzalez said BAWLS sponsors 1,000 gaming parties per year through, where it also sponsors BMX and Paintball events. The company also uses in-person appearances to reinforce its online presence. Gonzalez said the brand once set up at the Penny Arcade festival and handed out free bottles of BAWLS – with a catch. Freebie seekers had to submit their forehead as a billboard for BAWLS to stamp its MySpace address on. Social marketing efforts require that kind of give and take, Odden said. Blasting out your message and walking away doesn’t work. You have to keep your customers involved, which also means realizing that you are giving up some measure of control over that message. Odden said marketers should expect consumers to put their own spin on the company’s online marketing efforts, and instead of trying to control the message, firms should nudge it. If an internet user does something less-than-desirable with a brand, the owner can reach out to quell that activity. Simply letting them know is often enough, Odden said, though more forceful (i.e. legal) actions may sometimes be appropriate.

›› INFECTIOUS VIDEOS Viral videos represent one of the most alluring aspects of online marketing. Chop together 30 seconds to three minutes of video, throw it on the web and watch it spread across the internet like mono through a dormitory. What’s not to love? Unfortunately, it’s not as easy as it sounds. Hundreds of marketers have the same idea you do, and all attempts to use internet videos for commercial purposes must contend with the online musings, songs, obnoxious children and pratfalls of the millions of people who post clips of themselves every day. However, that doesn’t mean that creating a video clip isn’t worth your time, and there are a couple ways to improve the success rate for viral campaigns. The first step, according to beverage entrepreneur-turned-web-campaign-consultant Peter


Van Stolk, is to create good content. He pointed to BlendTec’s viral campaign for its super-powered blenders. In a series of 60-90 second videos, BlendTec spokesman Tom Dickson puts everything from a crowbar to an iPhone into a BlendTec blender and asks “will it blend?” Hint: it does. Always. These acts of destruction have garnered the brand far more wideranging notoriety than any high-end blender brand has ever deserved. BlendTec has posted 83 of these videos, with many achieving more than 1 million views, and the iPhone video – which reduced the $600 piece of electronics to grey powder and one shard of twisted metal – racking up nearly 6.5 million. Your firm probably doesn’t have a product that will destroy a crowbar – and if you do, you probably shouldn’t be

in the beverage business – but every brand should be able to seize on a concept relevant to its consumers. Van Stolk’s one guiding suggestion? Don’t focus it on scantily-clad women. “Let’s just be honest here,” Van Stolk said. “I think [internet users] can find naked breasts pretty quick.” Once you’ve finished your video (with all female subjects fully clothed, of course) you can give it a running start by using an online distribution service like Dan Ackerman Greeberg’s 750 Industries. In a day when YouTube boasts 10 hours worth of videos uploaded every minute Greenberg said betting on a video to break out on its own, no matter how amazing, is a bad investment. “It’s really hard to create viral videos. That’s the bottom line,” Greenberg said. “If you can’t get people to watch

it, you just wasted all your money on the production.” Instead, Greenberg suggests coming up with a concept that’s sharable, then dividing your money evenly between production and distribution. Greenberg’s company, for example, uses Facebook as a platform to bring attention to video clips and other online

marketing campaigns. While that doesn’t sound as glamorous as watching your 60-second masterpiece break out on its own, it’s certainly a safer bet. And definitely safer than putting an iPhone in your home blender

User-submitted art available on the BAWLS web site. But it’s important not to confuse original and edgy with inappropriate. When someone does something interesting with your brand, such as turning it into a science experiment with the aid of breathfreshening candy, Odden said you should encourage them. A case study in what to do – and what not to do – can be found in the tale of and the Coca-Cola Co., in which the nowfamously overcoat-clad site founders conducted the above-mentioned symphony of soda fizz, dropping a pile of Mentos candy into a pallet of Diet Coke, creating a carbonated ballet in which the spray matched the choreography of the fountains at the Bellaggio Hotel in Las Vegas. Released on June 3, 2006, the video flooded across the internet, bringing the two performers who started Eepybird, Stephen Voltz and Fritz Grobe, appearances on the David Letterman show and other high-profile venues. They were profiled in the Wall Street Journal. Mentos sent them free product to continue their “experiments,” put the video on their web site, and encouraged consumers to post their own Mentos geyser experiments. Coke didn’t like it, and initially kept the pair at bay, to the point that Coke released an official statement claiming, among other things, that “The craziness with Mentos doesn’t fit with the brand personality of Diet Coke.” Flashing forward a few months, as the pair continued to gain popularity, Coke committed its biggest marketing about-face since the New Coke fiasco, as it signed a development deal with Eepybird, had the performers conduct another experiment with Mentos and Diet Coke for the Coke site, and eventually even had them set off their Diet Coke explosions at Coca-Cola Co. headquarters. The company seems to have learned to embrace social media phenomena since then. Recently, Coke executives were contacted by officials at the social networking site Facebook about a fast-growing Facebook Coca-Cola fan club page started by a single individual, a Los Angeles actor named Dusty Sorg, that had attracted 3.3 million supporters – a total that was second only to a Barack Obama page in number of fans. With traffic so high on the site, some of the typical detritus associated with the internet (or any collection of 3.3 million people) – nude photos, objectionable language – was starting to get through into the site’s chat boards and other cyber nooks and crannies. Facebook wanted the site shut down or turned over to Coke to manage. But rather than risk appearing like a big, unhip corporation, Coke instead offered to help Sorg, inviting him down to visit headquarters last winter, and devoting a few employees to help keep the site free of objectionable content. The point of the company’s interaction with

Sorg was to figure out how to keep a fan club in the hands of the fans, and keep the interactivity of Facebook alive – so, for example, Coke’s helpers will remove racy photos, but not statements like “I love Pepsi.” While Coke occasionally posts material to the site, “It will not become an overly commercial repository of Coca-Cola assets,” a Coke official told the Atlanta Journal-Constitution. Odden said this kind of behavior – nudging a message instead of trying to control it – becomes especially important when marketers deal with online social networks like Facebook, Myspace and Twitter. The still-evolving genre centers on users who create personal profiles, connect with friends and like-minded individuals, and then share aspects of their lives. Some services, like Facebook, include a news feed for each user that aggregates profile changes comments made by the user’s friends. In ways, it’s the ultimate invasion of privacy – but it’s done freely, and leaves vast reservoirs of personal information, and rapid product feedback, for clever marketers to cull through when formulating a campaign. It also presents an opportunity for a social marketing campaign to spread organically, sometimes reaching far beyond the initial targeted population.

LEARNING THE LANGUAGE The hitch with dealing with the many subcultures of the web – it is world-wide, after all -- is that uninitiated marketers can run afoul of dozens of rules, many of them unwritten. Aside from each social network’s terms of service agreements, marketers need to obey the cultural norms developed within the community. The best way to deal with that, Odden said, is to listen. Marketers should track their target communities for days or weeks to see how they work and what customs the community obeys – or what they think is funny and exciting, something that Coke obviously learned over the course of the summer of Eepybird. “The analogy is something like going into a new country where you don’t speak the language,” Odden said, “or maybe you do but it’s all unfamiliar.” While listening is one way to do business within a new culture, Bill Sipper, president of High Voltage Beverages, went another classic route. He hired insiders. Sipper, 42, grew up before schools assigned email addresses to students, and said he would feel presumptuous assuming that he understood social networking as well as the generation that grew up with cell phones and Pokemon. So, when he decided to launch an online campaign for his company’s Volt energy soda, he hired college interns. “[I told them] here’s two computers. Here’s two video cameras. Here’s two regular cameras. Go make stuff happen,” Sipper said. Sipper’s plan has only been in place for a couple of months, but he’s happy with it so far. To date, his team has created a fan page for Volt on both Facebook and Myspace, and collected about 1,000 followers on each. When the Volt interns post a note, event, photo or video, the social network alerts each of those 1,000 users. The pages also allow for fan interaction. Sipper’s interns have posted an array of fan-created content. While Sipper said it’s too early to call the endeavor a success, he plans to integrate it into the brand’s long term plan. “The goal is to have an intern in every major market we go into,” Sipper said. He added that he also wants to expand into more social networking platforms – like Twitter. Twitter marks a new turn in social marketing. The service doesn’t center on a profile. Instead, it centers on short updates, containing 140 characters or less, called “tweets.” Whenever a user writes one


of these bite-sized messages, it propagates out to all Twitter users interested in tracking them. That might sound difficult to use from a marketing perspective, but it can be deceptively powerful, according to Odden.

Twitter and Facebook; two avenues for reaching your target markets online.

Odden said. And businesses with somewhat more substantial resources can mount an even larger offensive – which is exactly what Sweet Leaf Tea did. Adi Wilk, Sweet Leaf’s marketing manager recently created a dedicated position for monitoring and managing that presence. “We were not a significant player. We were not talked about as much as we would like to be talked about,” Wilk said. Now, the company has a single person that watches all of the brand’s online accounts, checks for mentions of the brand, and shuttles complaints to the correct person. Additionally, Wilk has gotten the entire Sweet Leaf team – from founder Clayton Christopher to the shipping person – involved with responding to the occasional online query. The outcome of initiatives like this, though, can be difficult to measure, especially as the experts have yet to agree on universal benchmarks for success. Odden suggests friends, followers and brand mentions can serve as rough metrics, but he said marketers shouldn’t expect to draw a straight line from their Facebook page to the cash register. It helps, he said, to think of online marketing as a relationship rather than a campaign. There’s no start or stop date, he said, and an online marketing effort should be a “living, breathing thing” that creates and maintains awareness of the brand. Properly executed, Odden said these kinds of efforts can create a groundswell of support for a brand. And it can happen fast, as well, catapulting a small brand into the collective consciousness. So pay attention online: if they’re out there tweeting a drink’s praises, you might be able to use it to feather your nest. •

Odden, who has more than 8,400 Twitter “followers,” recently used the service to drive traffic to one of his blog entries. He “tweeted” the link, and asked his followers to echo it to their followers. “The reach of that one tweet had 180,000 impressions within a couple of days,” Odden said. “How much would it cost to buy that many eyeballs?” But, like most opportunities, Twitter comes with challenges, and Odden said the service “can be a big time suck” when used improperly. Before a marketer can start driving traffic through Twitter, the traffic needs a place to go (remember your homepage?) and a large enough following to create a tidal flow of web hits. Established brands can easily collect a following, Odden said, but startups have to give to get. Odden suggests marketers use services like to find people talking about their brand or related topics. When Sipper’s team starts tweeting it could follow ›› THINK SMALL anyone that mentions Volt. Each time a user When most marketers receives a new follower, Twitter sends them think of online initiatives, an email announcing that development. they think of Facebook or They may, in turn, follow their new folMyspace, but Peter Van lower – something marketers can capitalize Stolk suggests you think on by being helpful. For example, if Sipper’s smaller. interns see someone is asking about sources And fire your advertising agency. of energy to power through finals, they could Van Stolk, most famous suggest Volt, they could send a link to Volt for creating the Jones retailers, or even send product coupons. Soda and now head of But gaining followers – whether on Twitonline marketing consulter or any other social network – is only the tancy Tree Fort Group, first challenge. Then, marketers have to keep said small firms can use consumers involved. Without some reason to their online marketing pay attention, social networking groups can budget most efficiently erode, and Odden said blasting marketing by targeting niche online copy can turn people off. But offering the spaces that attract the firm’s target consumer. occasional free download and maybe a little This, he said, is someinsider information can keep things fresh. thing that advertising Many aspects of online marketing can be agencies haven’t yet done for little or no financial cost. Updating cottoned to. a Facebook or Myspace page only costs time. “Traditionally, people The same goes for uploading a YouTube always go to the top 1,000 video, and hiring a firm to create a quality websites [to place their homepage costs less than creating a 30-secads,]” he said. “Needond T.V. commercial. less to mention, there are “It can be a wonderful channel for 10 million websites out there. You have to really small businesses with limited resources,”


figure out who’s talking about your brand.” Maybe the comment boards that mention your brand also link to snarky T-shirt sites. Maybe the bloggers that mention your product also post about Jeopardy! bloopers. Or maybe they link to bathtub races. “There’s a website devoted to 4 million people devoted to bathtub races,” Van Stolk said. “These people are fanatical… if a brand can capture and resonate with those people, that’s such a great spend.” Once you’ve identified a connecting site, Van Stolk said you should do more than place a banner advertisement. Introduce your brand in a way that doesn’t feel like advertising, he said. Sponsor a forum, perhaps. Create a conversation around the

product. “If you start it and other people pick up on it, then you’re golden,” he said. That philosophy also applies to a slightly more insidious tactic called “seeding,” Van Stolk said. The tactic amounts to planting single mentions of the brand on blogs and message boards and hoping that others continue the conversation. The emphasis here is on starting the conversation. Repeatedly boosting the brand in the same place, Van Stolk said, can sabotage your efforts. And, Van Stolk said, don’t pay a blogger to talk about your product. If readers discover the arrangement, it will damage both your brand and the keyboard jockey’s reputation.

Stock the Fun Drink That Everyone Will Love! Product Basics • 5 Great Flavors • 10.1 oz PET bottle • Sports cap closure (no spillage) • Vibrant colors • 24 units p/case

Nutritional Information • 90 calories per bottle • 100% Daily Value of Vitamin C • Only 23 g of sugar in 10.1 oz.

Retail Dollar Share of Convenience Channel el Juice Flavored Drink Category 8 State Mid-Atlantic/Southeast Region

Tum-E Yummies


Kool-Aid Burst


Bug Juice


Fruit Craze


Belly Washers


Source: AC Nielsen, 12 m/e March 2009, Convenience Retail Channel

To add this high margin product to your stores, contact BYB Brands at or 1-877-292-2387.

©2009 BYB Brands, Inc. Tum-E Yummies and the Tum-E Yummies logo are registered trademarks of BYB Brands, Inc.


Please help us. Kids are driving their parents crazy. Kids buy Fruit 66 at school, and until now that’s the only place they could get it. Please carry Fruit 66 in your retail stores so we can tell parents where to buy it.

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Don’t Worry – They’ll Grow! BY ADAM STERN & JOHN MCKENNA It’s not easy being a kid – or a kids’ beverage. A look at some of the work our faithful columnists have done this issue makes it clear that in the economic downturn, it’s the drinks that service our smallest consumers that might be taking some of the biggest hits. But a look at the products listed here, in our 2009 Kids’ Beverage Guide, shows that there’s still a lot of exciting innovation taking place in the category, from creative new packaging like Tetra Pak juice and water boxes to sport tops and lightweight pouches to great new ingredi-

ents like honey, electrolytes, low-sugar combinations and exotic fruity flavors. A flip through the guide shows that if you’re looking with the eye of a child – or a parent looking to make one happy – there’s a lot of great taste and creativity. Who wouldn’t want to finish a soccer game with a soccer ball-shaped sports drink, or have the special feeling that you’re drinking a fruity delight from a product shaped like an adults-only energy drink? And with the advances in caloriecontrol, vitamin fortification and special functionality,

particularly in terms of sports drinks, won’t parents feel better about what they’re putting in the grocery cart? The idea that a few tough winter months will put an end to the creativity of the hard working kids’ beverage makers featured herein is one that ignores one thing: that there is a summer around the bend. A summer where the kids are sweaty and thirsty, and they’re in your store, looking for something great to drink. Summer is coming, and the products herein are a great place to start.









BellyWashers 200mL Juice Boxes

Crayons All Natural FUNctional Beverages

IN ZONE Brands, Inc.

Crayons, Inc.

Mendy Smith 2251 Corporate Plaza Pkwy, Suite 220 Smyrna, GA 30080 678-718-2000

Maria Judd 2020 124th Ave. NE, Suite C-201 Bellevue, WA 98005 425-881-7200

PRODUCTS: 100% Juice, CARS - Apple, Hannah Montana - Fruit Punch PACKAGING: 200 mL boxes in single boxes, 8 pks, club packs

PRODUCTS: Razzical/ Blueberry Raspberry, Thirst-C/ Pink Lemonade, Super-V/ Kiwi Strawberry, 3 PM/ Fruit Punch, D-Fense/ Orange Mango, Buff Bonz/ Wild Berries and Watermelon PACKAGING: 8 oz can

BellyWashers 8oz

Crayons All Natural Sports Drinks

IN ZONE Brands, Inc.

Crayons, Inc.

Mendy Smith 2251 Corporate Plaza Pkwy, Suite 220 Smyrna, GA 30080 678-718-2000

Maria Judd 2020 124th Ave. NE, Suite C-201 Bellevue, WA 98005 425-881-7200

PRODUCTS: 100% Juice - Fruit Punch, BOYS and GIRLS Charater Tops PACKAGING: 8 oz. bottles in single serve, multipack, value pack

PRODUCTS: Breakaway Berry, Playoff Punch, Leaping Lemon-Lime PACKAGING: 8 oz. can

Boowl Surprise

deluxe honeydrop

Boowl Company Americas, LLC

deluxe honeydrop beverages

Richard D. Parano 90 Washington Valley Rd. Bedminster, NJ 7921 908-719-8926

David Luks

PRODUCTS: Fruit Punch, Strawberry & Kiwi, Lemon Ice, Grape PACKAGING: 11 oz. plastic

Chiquita Frozen Fruit Smoothies

PRODUCTS: Bee Good (Apples and Honey), Bee Strong (Blueberries and Honey), Bee Alive (Blood Orange and Honey), Bee Calm (Chamomile Tea and Honey) PACKAGING: 16.9 oz. Plastic Bottle (BPA Free, recyclable plastic bottle)

Dog On It! fortiďŹ ed juice beverages for kids

Old Orchard Brands, LLC

White Hat Brands, LLC

Matt Jackson 616-233-0500

Chris Olivier 2675 Paces Ferry Rd., Suite 100 Atlanta, GA 30339 800-747-0912

PRODUCTS: Strawberry Banana, Banana Colada, Peach Mango and Mixed Berry. PACKAGING: Available in recyclable 12 oz. plastic cans which provide three, 8 oz. servings when blended with ice and water.

PRODUCTS: Berry Punch, Strawberry Lemonade, Orange Splash, Kiwi Watermelon, Tropical Tangerine PACKAGING: 8 oz. PET (6-packs)




Fruit Shoot juice drink, H20 and 100% Envy Foods

Britvic Soft Drinks Co.

Dave Knowles P.O. Box 16274 Minneapolis, MN 55416 952-224-9067

Claire Common PRODUCTS: Fruit Shoot Juice drink available in low sugar and regular in Apple, Apple & Blackcurrant, Orange, Summer Fruit, Tropical. Fruit Shoot H20 available in Blackcurrant, Orange & Apple.Fruit Shoot 100% available in Orange, Apple, Apple & Blackcurrant. PACKAGING: Several sizes available

PRODUCTS: Strawberry Kiwi, Fuji Apple, Fruit Punch, Acai Berry, Tropical Mango PACKAGING: 8.3 oz. Slim Can

First Juice Brand Beverages


First Juice, Inc.

Apple & Eve

Jason Jennings 477 Route 10 East, Suite 201 Randolph, NJ 7869 862-244-4576

Ken Gootkind 2 Seaview Blvd. Port Washington, NY 11050 516-621-1122

PRODUCTS: Apple+Carrot, Banana+Carrot, Blueberry+Purple Carrot, Peach+Purple Carrot PACKAGING: 8 oz. sippy-top bottle, 32 oz. refill bottle, 12 ct. playgroup packs

PRODUCTS: Tropical Orange, Strawberry Kiwi, Berry Berry PACKAGING: 8 individual, 6.75 oz. servings per package

Fragile Planet Organic Flavored Water

Hansen's Junior Juice

Langer Juice Company, Inc.

Hansen Beverage Company

Melissa Elms 16195 Stephens St. Industryc CA 91745 512-913-3685

David Douglas Corona, CA 92880 800-Hansens

PRODUCTS: Strawberry, Mango, Tangerine, Key Lime, Chocolate, Vanilla PACKAGING: 20 oz. PET bottle

Fruit 66

PRODUCTS: 100% Apple Juice, Fruit Punch, Mixed Fruit, Apple Grape, Apple Berry, Orange Twist PACKAGING: 4.23 oz. Aseptic Box

Hansen's Multivitamin Juice Slam 4u2u Brands

Hansen Beverage Company

William C. Hargis 3126 W. Cary St., Suite 177 Richmond, VA 23221 866-929-0066

David Douglas Corona, CA 92880 800-HANSENS

PRODUCTS: Fruit Punch, Kiwi Strawberry, Orange Tangerine, Apple Berry PACKAGING: 8 oz. Trim Cans


PRODUCTS: 100% Juice with Multivitamins. Available in Awesome Apple, Loud Lemonade, Burstin Berry, Strawberry Banana, and Totally Tropical. PACKAGING: 6.75 oz. Aseptic Box


Hansen's Organic Junior Juice

Honest Kids

Hansen Beverage Company

Honest Tea, Inc.

Chuck Cassidy Corona, CA 92880 800-HANSENS

4827 Bethesda Ave. Bethesda, MD 20814 301-652-3556

PRODUCTS: 100% Organic Juice. Available varieties are Berry Medley and Apple. PACKAGING: 4.23 oz. Aseptic Box

PRODUCTS: Berry Berry Good Lemonade, Goodness Grapeness, Tropical Tango Punch PACKAGING: 6.75 oz. pouches sold in cartons of 8, 18 (Honest Kids Fridge Variety Pack) and 24 (Honest Kids Variety Pack for Sam's Club)

Hansen's Organic Junior Water

Kid Fuel

Hansen Beverage Company

Clear Beverage Corp.

Chuck Cassidy 550 Monica Circle Corona, CA 92880 951-739-6200

Electra Earl 8379 W. Sunset Rd., Ste 130-A Las Vegas, NV 89113 702-553-4529

PRODUCTS: Fruit Punch, Tropical, and Berry PACKAGING: 4.23 oz. aseptic box

PRODUCTS: Kid Fuel Grape, Kid Fuel KiwiStrawberry, Kid Fuel Raspberry, Kid Fuel Orange PACKAGING: 8 oz. plastic bottle

Hint Kids

Marble POP Hint, Inc.

Nishimoto Trading Co., Ltd.

Kara Goldin 2124 Union St., Suite D San Francisco, CA 94123 415-513-4050

13409 Orden Dr. Santa Fe Springs, CA 90670 PRODUCTS: Original, Strawberry, Green Apple, Blueberry PACKAGING: 6.76 oz. glass

PRODUCTS: Tropical, Strawberry-Kiwi, Watermelon PACKAGING: 8 oz.

Hog Wash

Metromint West Loop Beverage


Leo Novosel 168 N. Clinton, Sixth Floor Chicago, IL 60661 708-478-4103

San Francisco, CA

PRODUCTS: Piggleberry Punch, Gruntin Grape, Oinking Orange, Squealin' Blue Raspberry, Swine-Sational Lime PACKAGING: 10 oz. plastic


PRODUCTS: Unsweetened, calorie-free, mintwater, Chocolatemint, Lemonmint, Orangemint, Cherrymint, Spearmint, Peppermint PACKAGING: 16.9 oz. bottle


Nui Hybrid Beverage

Spring To Go!


Wahta Springs

Brian Machovina PO Box 364 Santa Monica, CA 90406 310-846-8050

Sandra Franks 1100 Wahta Springs Trail Box 225 Bala Ont, Can 800-593-0127

PRODUCTS: Raging Red (cherry), Outrageous Orange (orange), Solid Gold (pineapple-lemon), Sublime Green (lemon-lime), Booyah! Blue (blueberry-pomegranate), Purple Power (grape) PACKAGING: 10 oz. Ecopak with Recloseable Sport Top

Safari Splash 8oz

PRODUCTS: Sodium Free! Natural Spring Water, 2% RDA for Calcium, PACKAGING: 355 mL (8 oz.) with Sport Cap, packed in 12, 24 pack, 6 & 4 pack clips

TummyTickler 1.3 gal KidzKube

IN ZONE Brands, Inc.

IN ZONE Brands, Inc.

Mendy Smith 2251 Corporate Plaza Pkwy, Suite 220 Smyrna, GA 30080 678-718-2000

Mendy Smith 2251 Corporate Plaza Pkwy, Suite 220 Smyrna, GA 30080 678-718-2000

PRODUCTS: Red Rhino Rush (Fruit Punch), Beastberry Blue (Blue Raspberry), Orangutan Orange (Orange) PACKAGING: 8 oz. bottles


PRODUCTS: 100% Juice - Apple PACKAGING: 5 L multi-serve with easy-pour spout

TummyTickler 125mL Juice Boxes GT Beverage Company, LLC

IN ZONE Brands, Inc.

Tom Weiss 29222 Rancho Viejo Rd., Suite 210 San Juan Capistrano, CA 92675 949-633-0084

Mendy Smith 2251 Corporate Plaza Pkwy, Suite 220 Smyrna, GA 30080 678-718-2000

PRODUCTS: Fruit Punch, Blue Chill, Orange PACKAGING: 12 oz. round bottle

PRODUCTS: 100% Juice, Mickey Mouse Clubhouse - Apple, My Friends Tigger and Pooh - Apple Honey PACKAGING: 125 mL juice boxes in 8 pks, and club packs

SportWave Vitamin Powered Water

TummyTickler 4oz

Sportables, LLC

IN ZONE Brands, Inc.

Mark Davis 105 S. Jefferson, Suite C3 Kearney, MO 64060 816-628-1229

Mendy Smith 2251 Corporate Plaza Pkwy, Suite 220 Smyrna, GA 30080 678-718-2000

PRODUCTS: Berry, Cherry, Orange PACKAGING: 12 oz. PET bottles, 24/12oz., 12/12oz. Multi-Pack

PRODUCTS: 100% Juice - Apple, Assorted Character Tops PACKAGING: 4 oz.. bottles in single serve PDQ, single serve Clip Strip, multipack, value pack



TummyTickler 8oz


IN ZONE Brands, Inc.

Let Water Be Water, LLC

Mendy Smith 2251 Corporate Plaza Pkwy, Suite 220 Smyrna, GA 30080 678-718-2000

Anthony Bianco 27 West 20th St., Suite #606 New York, NY 10011 212-627-2630

PRODUCTS: 100% Juice - Apple, Assorted Character Tops PACKAGING: 8 oz. bottles in single serve, and multipack

PRODUCTS: Body pure spring water, Brain ultra pure water + electrolytes, Bones ultra pure water + magnesium, Energy ultra pure water + oxygen PACKAGING: 16.9 oz. bottle

Uncle Matt's Organic Orange Juice


Uncle Matt's Organic, Inc.

Maddie's Beverage Company, Inc

Mary Ellen Pollock P.O. Box 120187 Clermont, FL 34712 352-394-8737

PO Box 176 Belmont, CA 94002 650-292-4908 PRODUCTS: Apple, Berry, Grape, Plain PACKAGING: 8 oz. Tetra Pak box

PRODUCTS: Pulp Free, with Pulp, Pulp Free with Calcium and Vitamin D PACKAGING: 59 oz. PET


Wild Waters WaddaJuice, LLC

Wild Waters

Jordan Kerner 143 North Ave. Westport, Ct 6880 203-227-2227

Chris Testa 20 Central St. Hingham, MA 2043

PRODUCTS: WaddaJuice Apple, Wild Berry, White GrapeWaddaBlast Fruit Fusion, Raspberry Lemonade, Kiwi Strawberry PACKAGING: 8 oz. plastic bottle, 12 pack


PRODUCTS: Flippin' Fruit, Groovin' Grape, Freestyle Wild Berry, Lemon Wave PACKAGING: 10 oz., 6 packs, 24 ct variety case

When it comes to kids’ drinks, we know what your customers want. Moms are looking for a vitamin enriched, low calorie alternative they can feel good about. Kids just want something fun and

great tasting. With HogWash, they get both—a fun, ™

fruity juice drink without a pigpen full of calories. For HogWash or other West Loop Beverage offerings, callor contact him at For information informationonon HogWash call Leo Novosel at 708-478-4103 Leo Novosel at 312-222-7460 or visit us at ©2005 West ©2009 WestLoop LoopBeverage, Beverage, Inc. Inc.


CUKOO FOR COCONUTS Through new investors and a new location, Zico is bringing its strategy to new markets and building toward a coconut water-filled future. BY MATT CASEY Mark Rampolla doesn’t use swallows – European or African – to get his coconut water on to U.S. shelves. He uses Tetra Pak. That packaging choice may leave Monty Python in need of another instrument to simulate the sound of hooves, but it also helps Rampolla further his mission to push the ethnic-aisle staple into America’s mainstream. Coconut water, harvested from young coconuts before they’ve developed the meat most people associate with the fruit, has a long history in bodegas and on the fringes of the American grocery scene, where it has been treated as both a beverage and an ingredient. But that’s changing fast. And, as one of three top brands trying to lead the category into the mainstream, Rampolla’s doesn’t allow for any ambiguity. Zico leaves out the pulp included in traditional coconut waters and casts aside unfamiliar, non-standard cans in favor of aseptic Tetra Pak. That shift to aseptic packaging allows Zico to trade superheating for flash pasteurization and leaves more of the juice’s nutritional qualities intact. The final product – consisting of just one ingredient – packs five electrolytes and more potassium than a banana. With those credentials, Zico has gained national distribution in the natural food channel. His competitors have done the same. All three have been grown territory as well as sales, but Rampolla’s financial backing from Industry titans positions him better for the coming transition. Ultimately, he wants coconut water to be as common in Safeway as it is in Whole Foods. Rampolla waged his first DSD cam-


Zico aims for a coolly modern aesthetic, downplaying even the coconut itself. paign in New York City, and, while it’s too early to say he’s conquered the five boroughs, he’s confident enough in his momentum to start a new campaign in Los Angeles. The City of Angels, Rampolla said, figures large in Zico’s future. Beyond the market’s massive financial appeal, he plans to use the west coast location (and, possibly, annual meetings with surf lessons) to foster a fun internal environment and attract and retain the talent he needs to further the brand. “At the end of the day, New Jersey just doesn’t quite have the caché that maybe a beach community in California does,” Rampolla said. But Zico’s talent pool might be bolstered as much by its financial backers as its atmosphere. Rampolla’s company has drawn investments from notable names in the beverage industry, including owater’s Tom First and Honest Tea’s Seth Goldman, as well as its key NYC distributor, Big Geyser. Names like those, Rampolla said, have already helped attract sales talent with histories at brands like Coors Light, Nike and glaceau. While he assembles his coconut militia, he’s also spidering his product into new DSD territory and building the bulwark for long-term growth. He’s secured his Brazilian coconut supply for the next three to five

years, he said, and recently added DSD in San Francisco, Florida and Texas. He’s also working on new products. In the near future, he said, Zico will keep true to coconut water as its core ingredient, adding more usage occasions and flavors, but he has long term plans for products that could use coconut water mostly in the background. NOT ALONE Rampolla isn’t alone in his mission to mainstream coconut water. (See Sidebar) Vita Coco and O.N.E. (One Natural Experience), are currently pushing core products nearly identical to Zico’s into a growing number of mainstream channels. In other beverage segments, that dynamic might trigger lawsuits, but, in this case, it has led to a case of friendly competition. For now, at least. “We all share a view that we’re bringing something healthy and natural to consumers,” Rampolla said. “This isn’t about killing each other; it’s about doing something that’s good.” While friendly, the three aren’t exactly swapping leis. Each boasts that it offers a better product than its competitors, and they’ve aligned with different New York-based distributors. Zico is with Big Geyser, Vita Coco got Exclusive Beverage

and O.N.E. signed with Manhattan Beer Distributors. Additionally, Vita Coco cofounder Mike Kirban said he’s worried that Zico’s promotions have allowed prices to dip too low and take some of the “premium” off what he thinks should be a premium category. Rampolla, in response, said his product has not been officially sold for less than $1.69, just 30 cents below its typical asking price. Despite their differences, all three founders keep in regular contact and mutually aim to bolster to coconut water category in its entirety. The trio even got together at Natural Products Expo West to chat about the state of the category. It probably helps that the three firms have positioned themselves with slightly different targets in mind. O.N.E. diversified into other tropical fruits – including cashew and coffee fruit – and founder Rodrigo Veloso expects his future sales to be balanced across his exotic offerings. Zico and Vita Coco have stayed tightly focused on coconut water, but have also taken divergent angles on finding their audience. Kirban said Vita Coco is cutting space for itself in ethnic aisles and also angling for mainstream appeal. Zico, on the

other hand, is targeting athletes and billing its product as “Nature’s Sports Drink.” NATURAL GATORADE To build that reputation, Rampolla employed a methodical approach in his home market of New York City. First, he targeted yoga studios – particularly “hot” yoga studios where yogis push their students through 90-minute workout sessions in rooms heated to 95 degrees or more. That combination of intense athleticism and “crunchy” tendencies gave Rampolla fertile ground from which to cultivate an initial customer base. Next, he moved on to endurance athletes – a less crunchy crowd than yoga practitioners, but still very careful about what they put in their bodies. They also present an interesting proposition. They hold fast to habits, making them difficult, but loyal, converts. Rampolla said he built inroads into that community by camping out at the finish lines and handing out free product. “Every [race] we go to, more and more people say ‘oh thank God you’re here. I’ll take two,’” Rampolla said. Eventually, the company had to upgrade its sampling gear from insulated backpacks

to rolling coolers, and the evidence of Zico’s inroads showed up at retailers. Customers would come in and clear out full shelves, Rampolla said. Now, he’s satisfied with the foundation he’s built in the Big Apple. “We still have a lot more to do in New York, but it’s up and running and going,” he said. He plans to import the same strategy to Los Angeles – a tactic, noted Jerry Reda, vice president of sales at Big Geyser, that worked well for vitaminwater. “Own New York and L.A. and all the other markets will follow,” he said. Reda said he expects Zico to perform well on the West Coast, and expects continued strong growth in New York, where, after hearing offers from all three major brands, Big Geyser chose to distribute Zico. “The real naturalists believe Zico is a purer product,” Reda said, adding that Zico’s coolly modern aesthetic also cuts more sharply away from coconut water’s ethnic roots. Reda said O.N.E. and Vita Coco’s packaging gives them an appearance similar to ethnic-aisle regular Coco Lopez. Both brands prominently feature a young coconut with a straw jutting out of it. Zico,


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BRANDS IN TRANSITION on the other hand, focuses on beach, water, shoreline and the brand name, including only a diminutive young coconut as the dot on the “I” in Zico. While Reda expects Zico to be the eventual winner – and has invested to that end – he said he expects coconut water as a whole to gain mainstream status. David Lotti, national shelf-stable beverage category manager for Tree of Life, agrees. His company carries all three lines, he said, and “Every one of the three lines is growing.” Tree of Life has carried Vita Coco for a while, but Lotti said the category really began to take off when the other two national brands cropped up and followed Vita Coco’s path into the natural food stores Tree of Life serves. Right now, he said, tetra coconut water is treated as a sub-segment of coconut waters, which is treated as a sub-segment of

juices, but he thinks it could become a segment of its own. That’s a change. “The new kid on the block in the category is Zico,” Lotti said. “But for us, right now, we’re watching to see which one, if any, will become the dominant player.” Rampolla would like to break that dead heat. He wants Zico to rise as the top player. As he continues to assemble his team, Rampolla expects the company’s growth to accelerate. He laid his New York foundation in five years, and expects to complete the same work in L.A. in three. Future markets, he said, could take two years or less. “The end game for me is that coconut water is a global, multi-billion dollar category where consumers have embraced and adopted the product as a natural alternative to sports drinks,” he said. “And that Zico’s the leading brand in that category.” •

Rampolla on his product: “It’s not just a business. It’s a lifestyle.”

›› THE COMPETITION A rising tide of coconut water appears to have lifted the fortunes of the three top companies trying to take the juice into the mainstream. How long can everyone keep playing nice? The way VitaCoco co-founder Michael Kirban sees it, his company can peacefully coexist with O.N.E. and Zico, as long as all three companies compete on their differences instead of on price point. A price war, he said, could ruin the category, and why do that when there’s plenty of room for all three brands to grow? But there are problems with Kirban’s utopian vision. As O.N.E., Zico and Vita Coco creep closer to the mainstream and leave their niche entry points behind, they will have a harder time pointing to differences. Sure, each company has taken a slightly different spin on its flavored variants,


but they’re still selling the same core product. Ultimately, it’s hard to talk up a product without talking down one that’s nearly identical to it – just think of RC Cola’s Coke/ Pepsi comparison ads. Or the Pepsi Challenge, for that matter. Of course, the day when the brands start butting heads over supermarket shelf space is probably far off. Kirban said Haralambos Beverage in L.A. carries both Zico and Vita Coco –apparently not causing problems for either brand, and leaving the vaunted distributor with 18 coconut water SKUs when all brand, flavor and size variants are accounted for. Zico Founder and CEO Mark Rampolla, who said he’s actively avoided contracts from Target and Costco, has pegged the threshold for “mainstream” at $100 million in annual sales, a number none of the companies

seems to have achieved just yet. While the first cooler battles may be far away, the price war may have already started. O.N.E. founder Rodrigo Veloso said his company now sources some of its coconuts from plantations in Asia. The water, which he said comes from the same species of coconut palm he harvests in Brazil, will appear first in his new “with a Splash” flavor extension due to hit shelves in June. The new line will retail at a lower price, but Veloso couched the shift in the language of “conscious capitalism” and longterm planning. If coconut water is going to become the multi-billion dollar world-wide market he and his contemporaries expect it to, Brazil clearly won’t be able to supply enough coconuts to meet the surging demand, he said. And the new coconut plantation would let

Veloso inject money into a developing economy. Additionally, Veloso said, as coconut water is such a healthy beverage, he has a responsibility to market it for an affordable price, if possible. Kirban said he’s not worried about O.N.E.’s di-

versified sourcing. While the “splash” products will be less expensive, at 8.5 oz. instead of the standard 11 oz., they will also be smaller. Packaging, Kirban said, not the water itself, presents the biggest cost in putting the product on shelves.

Beverage Spectrum covers new beverage products, as well as the marketing, packaging, and ingredient innovation trends behind those products. From the largest beverage marketers to regional distributors to the smallest corner stores, the beverage business is at its core about selling drinks. Beverage Spectrum is the guide for those who both sell them and create them.

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SEPTEMBER 22, 2008










NACS Show Preview Expo East Preview Sports Drinks Import Beer Crunchy Beverages








· New Debb columnist E: solve ie Wildric s k · Spar Channel Bl kl ur · Expo ing Juice West Previe w


Welcome to the2New Beverage Spectrum 098 for · See 0 page · Sudetails ppli UM · Seeer an TR EC d page SP 41 fo Serv GE RA r de VE tails ices · Guid e


3. What is your primary business type? (check only one) A Convenience Store B Supermarket/Grocery C Club/Warehouse D Mass Merchandiser/Dollar E Drug Store F Liquor Store G Wine Store H Wholesaler/Distributor/Broker I Beverage Only/Beverage Specialty Store J Beverage Company K Supplier Company L Services Company X Other (please describe) 4. What is your title? (check only one) A Owner/President/CEO/COO/VP/Director B Buyer C Bottled Water D Regional/District Manager E Store Manager/Supervisor X Other (please describe) 5. Do the locations that you are responsible for sell: (check all that apply) A Carbonated soft drinks B Non-carbonated soft drinks C Bottled water D Beer E Wine F Liquor


COFFEE BUZZ? NOT SO MUCH BY MATT CASEY It’s tough to brew change in the ready-to-drink coffee category. Fifteen years after PepsiCo partnered with Starbucks to bring the Seattle chain’s spin on cold coffee to grocery stores and convenience coolers, it still dominates the category – though that hasn’t stopped a small phalanx of other brands from trying to charge up Starbucks’ hill. Coca-Cola raised eyebrows this year by reaching out to independent New York distributor Big Geyser to build Coke’s newest co-branded coffee venture, Illy Issimo, and a handful of smaller companies have introduced their own coffee products, but no one has come within of a bean’s width of ending Starbucks’ dominance. According to Information Resources Inc., Starbucks sold nearly a quarter billion dollars worth of canned and bottled coffees in club, drug and convenience stores (excluding Wal-Mart) in the 52 weeks ending Feb. 22. By IRI’s count, that gives the Seattle coffee chain 93 percent of the RTD coffee category – although those numbers exclude Java Monster and Rockstar Roasted. Even including those high-profile coffee/energy hybrids, Starbucks still owns five of the top seven coffee lines as tracked by IRI. Java Monster comes in a distant second, with less than 15 percent the sales of the all-mighty Frappucino, and Rockstar Roasted grinds its way into sixth place. Both crossover lines boast triple-digit growth rates, but they have a long way to go to catch the category leader. And the growth of the audience they’re targeting has fallen off. IRI reported that the RTD coffee category, full of promise when SoBe veteran John Bello got behind Adina Natural Highs last year, shrunk by 12 percent. Starbucks’ Frappucino line slipped by nearly 6 percent. Doubleshot dropped by 11.9 percent and Bolthouse Farms and Cinnabon suffered 5.4 and 50 percent drops, respectively. With sales on a slide, non-Starbucks coffee brands could find a tough time elbowing their way into the cooler. Dick Peters, co-owner of Peter’s Market in Napanochny, N.Y., said the only RTD coffee he bothers to carry is Starbucks. Dana Sump, beverage manager for the 1,400+ Casey’s General Stores chain, said he carries two coffee brands: Starbucks and Java Monster. Java Monster’s best-selling SKU ranks third behind two Frappucino flavors, he said, and all coffee offerings rank far behind energy drinks. Sump called the category stable, but stable can be another way of saying stagnant. Just take a look at this issue’s “Brand News” section. In a quarter-billion-dollar-plus category, just eight brands wanted to brag about news. Additionally, Adina, full of ambition last year, opted not to participate or even return calls for comment about Natural Highs. The company still promotes the product on its Web site, and advertised it as recently as the February issue of Beverage Spectrum, but has since shifted the bulk of its focus to its new herbal selections.


In that unpromising atmosphere, Muud coffee says its gaining ground. Co-founder Sean Pierce said he’s gotten Muud into a number of individual 7-Elevens and AMPMs and achieved corporate authorization from Circle K in the Western U.S. Now, he said, he’s working on earning top-level approval from another convenience chain and building promotions tied to professional sports teams. The secret to his success, he said, is offering a premium product at an affordable price – a strategy he compared to that of AriZona or Hansen’s. His 15 oz. Muud products retail for a suggested price of $1.99 each compared to Starbucks $2.59 price tag for the same volume. Coke has taken a different tack. Illy Issimo, co-developed with Italian coffee brand Illy Café, leverages Illy’s premium reputation and retails at $2.49 for as little as 6.8 oz. The three SKU line offers Caffe, Cappuccino and Latte Macchiato flavors, and Vinay Kapoor, chief exective for Ilko (Coke and Illy’s joint venture) said he expects the brand to be big. Despite Coke’s marginal success with Coke Blak and its Carribou Coffee and Godiva lines, Ilko said it plans to reach 30 percent of the premium ready to drink coffee category market by 2012. So, perhaps there is room for change in coffee. But you should probably keep Frappucino in your cooler – for the foreseeable future, at least. •

BRAND NEWS Starbucks Starbucks recently introduced Cinnamon Dulce Energy+Coffee. The new flavor combines the subtly spicy taste of cinnamon and vanilla with a blend of Starbucks coffee, B-vitamins, guarana and ginseng.

The Coca-Cola Co. The Coca-Cola Co. partnered with Illy Cafe to produce its new Illy Issimo line of coffee beverages. The line features three flavors: Caffe, Cappuccino and Latte Macchiato, and is distributed in New York by Big Geyser.

Skylar Haley Skylarhaley re-introduced its achievONE line with new packaging, graphics, flavors and fewer calories. achievONE offers six flavors – Cappuccino, Mocha Java, Vanilla Nut, Hazelnut Crème, Vanilla, and Chocolate – in 8.25 oz. cartons. Each contains 80 calories per serving and 15 grams of protein.

BYB Brands Inc. Cinnabon now offers its Premium Coffee Lattes in 15 oz. cans, and has added distribution in the Northeast, Southeast, and Western markets of the US.

Shock Coffee LLC All Shock Coffee flavors are now available in a 15 oz. size.

Mojito Brands, Inc. Mojito Brands, Inc., producers of MOJAVA, sponsored the Oxford Film Festival on February 5-8, 2009. MOJAVA teamed up with Regalia Vodka to make java martinis (MOTINI) for the festival.

New York Coffee Co. New York Coffee Co. has reformulated its ‘Iced Spresso’ line and added three more flavors, Vanilla, Cinnamon and Hazelnut, as well as two Tea Lattes to hit the markets in the summer.

Underground Beverage Brands Underground Beverage Brands, the maker of Muud Coffee, has earned corporate authorization to stock Muud in Western U.S. Circle K stores. •


PROMO PARADE O, O, O! Three Olives (Three-O) vodka announced the launch of its “What’s Your O-Face?” Contest. As part of a new multi-million dollar advertising campaign, www.ThreeOlives. com now invites users to upload a photo of


their best “O-face.” At the conclusion of the campaign on May 31, 2009, five finalists will be chosen, flown to New York City, and given the VIP treatment – including a photo shoot. One grand prize winner will be ThreeO’s next “O-Face,” awarded $10,000, and featured in a national ad campaign. The campaign is supported with print

media, out of home media, publicity and a targeted online media campaign that includes custom placements on sites like, and In addition, the contest site employs a voting gallery, Facebook Connect implementation and a widget that entrants can embed on a blog or social network.



ABSOLUT VODKA is paying tribute to four decades of gay pride with a limited-edition bottle marking the 40th anniversary of the Stonewall Riots. The special bottle features the rainbow design that has become symbolic of gay pride and honors the men and women who stepped out of the bars and fought back on the streets of New York City’s West Village during the summer of 1969. The limited-edition 750 ml ABSOLUT Pride bottle is available in select markets. For more information and cocktail recipes celebrating the colors of Pride, log on to ABSOLUT.COM/COLORS.

HINT Essence Water signed on as the Official Water of Women’s Professional Soccer for the inaugural season, which began Sunday, March 29. The deal makes Hint available to players on and off the field and includes branding opportunities, a sponsored award at the end of the season, and on-site and off-site activation.


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BAWLS Guarana is teaming up with local schools to show support to men and women serving in the armed forces through a letter writing campaign. Hundreds of Miamibased, elementary-age students are writing letters of gratitude for inclusion in outgoing BAWLS Military Packs, which also contain 12 BAWLS Guarana drinks and ship only to military addresses. The BAWLS Military Pack Program was first created in 2005 in response to written requests from service men and women overseas. The team at BAWLS responded by creating an ordering web site, expanding their shipping department and launching the BAWLS Military Pack Program.



St. Pauli Girl Beer has developed a special edition poster to honor Stephen Colbert, the host of the award-winning “Colbert Report” on Comedy Central. St. Pauli Girl spokesmodel Katarina Van Derham wore a “Colbert Nation” “WristStrong” bracelet for the photo, and the brand is planning to make a charitable donation to the Yellow Ribbon Fund – which benefits injured U.S. soldiers and their families – based on the number of posters downloaded. The 2009 poster will be available April 1 through May 13 at

Cheerwine launched a new advertising campaign with a new Web site and print, broadcast, outdoor and online advertisements – including visibility on Facebook, MySpace and other social networking sites. Cheerwine’s new site – – launched April 14 with games, videos, music and more. Visitors can create their own songs by clicking a musical alien’s tentacles; push an animated boss’ anger to the breaking point; upload Cheerwine-inspired art; and watch original online videos. To drive traffic to the new site, Cheerwine is rolling out banner advertisements and video content on, and through Tremor Media’s ad network. The brand will also unveil its first animated television spots to be broadcast on MTV, VH-1, Comedy Central and Cartoon Network. Advertising agency Hauser Group will also roll out a “Chilled Out Tour” for Cheerwine, which will visit events in select markets, as well as an ambassador program in late 2009.


The top four selling SKUs in the category are 5-Hour Energy® #1 BERRY 5-HOUR ENERGY Dollars/month +$7.5 million 138%

from 1 yr ago

#2 EXTRA STRENGTH 5-HOUR ENERGY Dollars/month +$3.7 million 6852%

from 1 yr ago

#3 LEMON-LIME 5-HOUR ENERGY Dollars/month +$3.2 million 135%

from 1 yr ago

#4 ORANGE 5-HOUR ENERGY Dollars/month +$2.6 million 883%

from 1 yr ago

Do your stores carry all four?

No other energy shot brand sells as well, advertises as much or has the brand preference of 5-Hour Energy. Not even close.

©2009 Innovation Ventures, LLC. All rights reserved.

Nielsen c-store data – four weeks ending 2/21/09.

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Beverage Spectrum April 2009  

The April 2009 issue of Beverage Spectrum Magazine.

Beverage Spectrum April 2009  

The April 2009 issue of Beverage Spectrum Magazine.

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