Beverage Spectrum October 2008

OCTOBER 31, 2008

POWDERPOWER Single Serves Grow, Drink Mixes Reach $1 Billion

ALSO THIS ISSUE: MAGIC HAT BREWERY DIET ENERGY BOUTIQUE CSDs RTD JUICE

OCTOBER 2008 vol.

6 :: no. 7

cover story 30 Powder Power Single serve drink mixes measure profit by the square inch

features 24 We Already HAD a V8 How the world’s best known veggie drink became fruitful

28 Brands in Transition Another trick for Magic Hat

8

columns 6 First Drop Saving time online

8 Publishers Toast Take a deep breath

22 Gerry’s Insights Marginal difference

departments 10 Bevscape Business BPA debate back again

12 Bevscape Innovation Pepsi banks on 8-packs

14 Channel Check Spotlighting teas

24

18 New Products Say hello to Michelob

48 Promo Parade With hoiday coverage

category focus 36 Boutique Sodas Embracing function

40 Juice and Juice Drinks The economy and premium products

44 Diet Energy So very necessary

conference beat 46 Review

30 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 BevNET.com, Inc. One Mifflin Place, 3rd Floor, Cambridge, MA 02138. Periodicals postage paid at Boston, MA and additional mailing offices.

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

NACS Show

OCT.08.BEVERAGESPECTRUM.5

THE FIRST DROP

By Jeffrey Klineman

THE INTERNET: GET IT? THERE’S A LOT of discussion these days about whether various people or companies “get” the Internet. This is not a major concern for us at Beverage Spectrum, as we, in fact, are creatures “of” the Internet. We don’t so much get it as are gotten by it, are glued to it, spend half our time lost in it, and enjoy forwarding amusing things back and forth that we have found in it.

They say write about what you know, and it’s with this in mind that I tell you I know the Internet. Or, at least, the various news and product sites I patrol hourly. Here’s the thing I get about the Internet: online, there is a justification or rationalization for every single thing written, recorded, or argued, and there are a lot of t-shirts for sale.

The idea that so much of our time is now spent online does offer a wide variety of opportunities for beverage companies and retailers to have an impact. For example, knowing my wife was headed up to tax-free New Hampshire (New Hampshire having voted long ago to officially change its state name to “Tax Free New Hampshire), I hopped on the New Hampshire State Liquor Store web site to find out what cheap cases of red wine were available at their 77 locations. It seems to me that this should be a fairly easy trick for chain stores to implement, particularly given the amount of work they are currently putting into category management.

There’s also a lot of knowledge and opinion available online. While a lot of that is political, there’s also a galaxy of sites

6.BEVERAGESPECTRUM.OCT.08

• Internet map as of January 16, 2006.

orbiting around every trend or niche interest one can think of, from the best cheeseburger in Omaha to the various kinds of men who look like Kenny Rogers.

With so much to absorb – and so many misspelled captions laid over photos of cats – it’s easy to take your eye off the ball when it comes to harnessing the Internet for the purpose of making and selling beverages. To spare you the trouble of having to “get” the Internet, however, these are some observations that, having bothered to read this far, you should download to your own personal knowledge base:

1. The niches of common interest that form on the Internet are the same kinds of groups that can sustain a product. Bawls is an example of a product line that has found a variety of different, marketable niches rather than a broad, one-size-fits-all marketing strategy. If you’re launching or selling a new product, go for the right niche.

2. Environmental awareness is not going away, and bloggers, activists and nonprofits who find equal footing for their messages with marketers and manufacturers have pro-

duced a lot of the environmental zeitgeist.

You can’t beat them. Join them. Start selling your environmental initiatives online.

3. As part of 2, remember – the Internet is the home of the “Master Debunker.” The Master Debunker is a semi-journalistic, semi-consumerist blogger or organization who will find out what is in your product, what claims you make are truthful, and where to get it for cheap. Do not try to lie to the Master Debunker. They will leave you naked and hurting, with all your calories and additives hanging in the wind. Look at the up-and-down fate of “All-Natural” 7-Up for a clue to that.

4. Just because something is an Internet fad, that doesn’t mean it’s going to translate into a good beverage. The better move is to understand what the fad represents: the answer to a question asked by Internet users.

Jones Soda did this well for years –using the Web to let users express their individuality.

5. When all else fails, post a photo of a cat enjoying your product. Make sure to misspell everything the cat says.

a10tion

calorie counting shoppers! we hate to twist our own caps, but we just did the unthinkable to low-calorie! s only

10 calories per serving

s great

tasting (trust us, it can be done)

s packed

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available in 20oz. singles and 16oz. 4 packs. low cal

PUBLISHER’S TOAST

By Barry J. Nathanson

TAKE A DEEP BREATH...

PUBLISHER Barry J. Nathanson bnathanson@bevnet.com EDITOR Jeffrey Klineman jklineman@bevnet.com ASSOCIATE PUBLISHER John McKenna jmckenna@bevnet.com ART DIRECTOR Matthew Kennedy mkennedy@bevnet.com GRAPHIC DESIGNER Amadeu Tolentino atolentino@bevnet.com ASSISTANT EDITOR Matt Casey mcasey@bevnet.com PRODUCTION MANAGER Adam Stern astern@bevnet.com JR. DESIGNER Natalie Iknaian niknaian@bevnet.com SUBSCRIPTION INQUIRIES Adam Stern astern@bevnet.com 617-715-9679

OUR ECONOMY is roiled to a level not seen since the Great Depression. The roller coaster of the Dow Jones and the collapse of several once-esteemed financial institutions have launched the anxiety meters to the stratosphere. The entire world’s economy is caught in this downward spiral. Our 401Ks, IRAs, savings, and stock accounts are evaporating before our collective eyes. Nothing seems safe or secure anymore.

Being a baby boomer born in 1948, I vividly remember the conversations of my parents and their peers about their lives during the turbulent Great Depression. Years later, their fears and angst were still very real, and the times they talked about were truly desperate. But what I remember most was their faith in our system and the American way of confronting dark issues and overcoming them. Sure, what they were discussing was different from today’s situation. They didn’t have the safety nets, government-sponsored deposit insurance, and the immediate intervention that we all hope will eventually bring us back from the economic abyss.

We can believe, from their experience, that, while these times are tough right now, they too shall pass. We’ve had economic travails,

8.BEVERAGESPECTRUM.OCT.08

recessions and tight credit before, and have always come out of it.

What does this have to do with beverages?

Everything. This is not a time for marketers, retailers and distributors to go into a shell.

It is essential that we continue to be visible in the marketplace. We are blessed to be in an industry that the consumer both needs and wants. So look where you can trim, of course, but don’t stop your initiatives. Beverages are a foundation of our package goods industry. Our brands are some of the few basic and luxury items that the public can afford. We would send a bad signal if the shelves weren’t stocked, if the choices were diminished, and the pricing was either cut drastically or raised too much. Promote your brands and keep up the marketing efforts.

Don’t slash budgets on programs that have worked for you for so long. Give a value proposition that the buyer can embrace.

The market will come back, as will the credit. The economy will rebound, as it always has. Our industry is a bellwether of our economy. Make sure you’re serving the customer well, and you’ll be poised to benefit from the turnaround. It will come.

ONLINE RENEWALS & CHANGES www.bevspectrum.com/subscribe ARTICLE REPRINTS (500 copies or more) FosteReprints 800-382-0808 x142 BEVERAGE SPECTRUM PUBLISHING INC. CHAIRMAN John F. (Jack) Craven jack@bevnet.com PRESIDENT AND EDITORIAL DIRECTOR John Craven jcraven@bevnet.com EDITORIAL 1 Mifflin Place, Suite 300 Cambridge, MA 02138 ph. 617-715-9670 fax 617-715-9671 ADVERTISING 1123 Broadway, Suite 210 New York, NY 10010 ph. 212-647-0501 fax 212-647-0565

BPA Worldwide Member, June 2007

Thank you for making us #1.

You’re number one, too. Thanks to our retail partners, distributors and all of America for making FIJI Water the best-selling premium bottled water in the U.S.* We’re proud to be more than just the best-tasting water, but also the top-ranking premium bottled water. Thank you for your partnership and support. FIJIWATER.COM *Source: IRI FDMx 52 Weeks Ending 2/3/08 & IRI Convenience Stores 52 Weeks Ending 12/30/07; Volume and Dollar Sales.

BEVSCAPEBUSINESS

THE LATEST NEWS ON THE BRANDS YOU SELL

TRUCKING ENERGY DRINKS: A NEW GAME MORE INFO ON BOTTLED WATER? If you’re interested in selling Monster or Rockstar, get ready to play a little distribution Twister in the next few months, as a set of deals engineered by Coca-Cola North America is about to completely change the cast of characters servicing your store.

Just before Beverage Spectrum went to press, Hansen Natural Corp. and Coke announced that they had agreed to a deal where the soda giant would take over distribution of Monster Energy in Western Europe, Canada, Mexico, and some U.S. states.

The deal came just two years after Hansen entered a distribution deal with another beverage giant, Anheuser-Busch, whose network handles a little more than half of the fast-growing energy brand’s wares. Most of the rest of the brand is run through a series of independents and, more importantly, a series of distributors owned by Dr Pepper Snapple Group. Those DPSU distributors, who revealed they will take a hit of close to $200 million in sales with the loss of Monster, are going to collect termination fees – likely paid by Coke via Hansen – but are still going to need a new energy drink on the trucks.

Meanwhile, the announcement came just two days after Rockstar, whose brand has been flagging a bit in recent years but remains the third-ranked independent behind Monster and Red Bull, announced the extension of its own three-year-old distribution agreement with Coke.

Rockstar retained the right to terminate the agreement as part of the deal – and it seems highly unlikely that Rockstar would want to share the stage, or the truck, with its longstanding archrival. At the same time, the Los Angeles-based Rockstar appeared to have a bit of time to find its own network, as Coke and Hansen are also faced with the challenge of figuring out how to accommodate A-B – which never truly reached a saturation point in terms of its Monster distribution and is still struggling to get it into on-premise accounts – while familiarizing its workforce with the whole Monster catalog.

There has been some speculation that PepsiCo – the only big company not yet mentioned here – might make a grab for Rockstar, as well, either with an equity piece or as a way of bolstering its own energy portfolio. The company has managed to revamp its AMP line without leaning heavily on an independent, but it still trails the other giants.

The deals sent the Coke staff into a tizzy; most of its regular communications staff skipped the NACS show to deal with the announcement, and there was a lot of adjustment of arrays at the last minute.

As an example, note this statement from Debbie Wetherhead, Coke’s spokesperson to the trade, made on Oct. 13 – day two of the NACS Expo: “If you were here yesterday, the display was a little different than it is today.”

Chances are, retailers will be able to echo that line in the next few months.

10.BEVERAGESPECTRUM.OCT.08

Bottled water in the U.S. could include more on-package documentation if a bill proposed

by U.S. Senator Frank Lautenberg (D-NJ) becomes law.

The bill, called the “Bottled Water Safety and Right-to-Know Act,” would require bottled water companies to display – on each bottle – where the water came from, how it was treated, and the quantity of contaminants in the bottle.

Tom Lauria, a spokesman for the International Bottled Water Association, said most bottled water companies already address these issues. They print the source of the water on the label, he said, along with an 800 number to call for more information – but adding much more information to the bottle may be asking too much.

“You’re trying to telegraph to the consumer what they need to know, quickly,” he said.

Lautenberg – whose office did not return a call for comment – introduced the bill at a hearing in the Environment and Public Works. Lauria described the hearing as calm and “sparsely attended.” He expects more hearings on the subject, including appearances from the FDA and EPA, and said the IBWA may ultimately back the measure – but they will reserve judgment until a final version of the bill is prepared.

07

BPA DEBATE BACK The debate over bisphenol-A, or BPA, resurfaced after British researchers revealed a study on the potential effects of the chemical on 1,455 U.S. adults.

The study found that people with the highest concentrations of the chemical (used in baby bottles and beverage can linings) in their urine suffered a higher rate of heart disease, diabetes and liver-enzyme abnormalities, Reuters reported.

In April, Canada banned the substance from use in baby bottles. The U.S. Food and Drug Administration issued a draft conclusion in August that current exposure to the chemical fell within safe levels. The administration said it would review the new study, but still believed exposure levels to be safe.

O

03

07

PVC

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BEVSCAPEINNOVATION

THE LATEST IN PRODUCT DEVELOPMENT AND MARKETING

HEALTH & WELLNESS CAN PEPSI EXPERIMENTS WITH KILL YOUR PRODUCT 8-PACKS Sure, it’s great that functional health benefits are frequently associated with food and beverages. But there is such a thing as too much health and wellness, which may put consumers off, according to experts.

Euromonitor’s head of global food research, Lee Linthicum, recently announced that several products are thriving because they promote various health and appearance benefits. But watch out for too many scientific claims, Linthicum added.

“Manufacturers are leveraging innovations in food science and making those messages known,” he told NutraIngredients USA. “But at the end of the day it is still food you are talking about.”

The Takeaway? Don’t Over-Medicalize, according to Linthicum. “There is a fine line between too much science and consumer innovation.”

COLOR BEATS ALL

For a long time, the 12-pack of 12 oz. cans has been the key package for soda makers.

But in a move that is either testing innovation or wallet size, PepsiCo is trying out an 8-pack, the Tampa Bay Times reported.

According to the story, PepsiCo’s costs have gone up 11 percent in the past year – and with CSD volumes down, pricing increases have not let the company keep pace.

It’s an important development – while health concerns were unable to force companies to change package sizes, materials costs have finally led to reductions. Up next, 20 oz. bottles will drop into 16 and 12 oz. configurations (At NACS, Coke was bannering its 16 oz./99 cent convenience store deal).

PepsiCo will also try out a 1.5 L bottle for its most popular lines.

The test is going on in about 20 percent of the country, according to the Times.

A new study from European food and beverage maker Danone hinted at color and flavor are often the chief influence on whether consumers will accept new beverages.

The journal Food Quality and Preference published the study, which placed intensity of color and flavor as the dominant elements of a “sensory marketing approach.” Labeling and packaging take a back seat, according to the study, which measured only those four elements.

The study’s methodology involved having consumers look at potential improvements to a given beverage – and revealed that packaging size and labeling type were taken into account to a lesser extent than color intensity, which was named 43 percent of the time, and flavor, which was named 32 percent of the time.

THE FLAVOMETER Global Leading Drinks Launched by Category, April – June 2008 1. Blend

Rank

Category

% Change vs. year ago

1.

Fruit & fruit flavored drinks

-12.9%

2.

Wine & wine coolers

12.8%

3.

Tea

-2.0%

4.

Liqueurs & other alcoholic drinks

44.4%

2. Carrot 3. Tomato 4. Apple 5. Orange 6. Celery

5.

Coffee

38.6%

6. Lemon

6.

Milk, non-dairy milk & yogurt drinks

-20.8%

6. Pumpkin

7.

Beverage mixes & flavorings

-1.6%

8.

Soft drinks

13.3%

9.

Isotonic, energy producing beverages

47.6%

10.

Beer & ale

74.2%

9. Lettuce

Vegetable Flavored Drinks: Top Flavors in New Products, June 2007 – June 2008

9. Spinach

SOURCE: PRODUCTSCAN ONLINE (www.productscan.com)

12.BEVERAGESPECTRUM.OCT.08

SOURCE: PRODUCTSCAN ONLINE (www.productscan.com)

Channel Check

october 2008

SPOTLIGHT CATEGORY

RTD TEA 52 Weeks through 9/7/08

AriZona continues to lead the segment as an individual brand, but Lipton’s aggregate sales outclass the category.

The big performer of the month, Lipton Pureleaf, probably owes its triple-digit growth to its recent introduction (it’s up only one tenth of one percent over last month), but the sub-line’s twist on tea authenticity still snared $36 million for Pepsi over the last year.

In the mean time, private label teas continued to perform, while Snapple slid and Nestea plunged.

RTD TEA

Dollar Sales

Change vs. year earlier

AriZona

$298,831,300

5.2%

Lipton

$239,111,000

1.2%

Snapple

$125,630,600

-5.5%

Lipton Brisk

$84,087,370

-4.0%

Diet Snapple

$77,787,710

-7.7%

Nestea

$63,093,040

-7.1%

Lipton Diet

$52,384,120

27.8%

Lipton Pureleaf

$36,153,390

170.7%

Private Label

$24,567,850

33.4%

Nestea Diet

$17,774,310

0.9%

Lipton Iced Tea

$16,321,160

-53.0%

Nestea Enviga

$15,378,710

-40.5%

Gold Peak

$13,128,280

34.8%

SoBe

$10,711,260

-20.7%

Tradewinds

$8,780,738

58.9%

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

TOPLINE CATEGORY

VOLUME

52 Weeks through 9/7/2008

BOTTLED WATER

ENERGY DRINKS

$5,159,143,000 1.1%

$886,901,400 13.5%

BEER

SPORTS DRINKS

$7,737,549,000 3.7%

$1,713,134,000 2.3%

BOTTLED JUICES

TEA/COFFEE

$3,808,174,000 1.0%

$1,415,107,000 1.0%

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

14.BEVERAGESPECTRUM.OCT.08

october 2008

Channel Check SPORTS DRINKS

Dollar Sales

Change vs. year earlier

Gatorade

$600,151,100

-8.5%

Powerade

$243,004,900

1.1%

Gatorade All Stars

$131,878,700

4.1%

Gatorade Frost

$130,128,800

-8.1%

Gatorade G2

$124,347,200

N/A

Gatorade Rain

$119,901,200

-20.3%

Gatorade Fierce

$70,977,290

-23.4%

Gatorade X Factor

$58,766,830

-31.1%

Gatorade AM

$55,530,080

5.6%

Gatorade Tiger

$48,981,160

N/A

Heading Up: Gatorade G2

52 Weeks through 9/7/08 SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart

RTD COFFEE

Dollar Sales

Change vs. year earlier

Frappuccino

$190,754,900

4.0%

Doubleshot

$24,523,050

-7.5%

Doubleshot Light

$10,461,850

-3.1%

Starbucks Cappucino

$9,475,734

-29.7%

Bolthouse Farms

$4,656,019

3.2%

Godiva Belgian Blends

$4,376,248

-56.3%

Private Label

$2,089,993

103.6%

Cinnabon

$1,691,035

20.7%

Hillside

$611,517

25.8%

Emmi

$540,817

N/A

Heading Up: Emmi

52 Weeks through 9/7/08 SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart

IMPORT BEER

Dollar Sales

Change vs. year earlier

Corona

$441,939,100

-2.2%

Heineken

$299,865,600

3.7%

Corona Light

$125,157,100

0.6%

Tecate

$92,910,010

10.1%

Heineken Premium Light

$73,538,500

15.5%

Modelo Especial

$61,040,720

13.5%

Newcastle

$50,632,180

2.8%

Guinness Draught

$48,563,960

2.7%

Stella Artois

$45,629,580

43.2%

Labatt Blue

$44,019,760

-2.4%

Heading Up: Stella Artois

52 Weeks through 9/7/08 SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart

16.BEVERAGESPECTRUM.OCT.08

ENERGY

Dollar Sales

Change vs. year earlier

Red Bull

$363,400,300

11.7%

Monster

$141,672,900

18.3%

Rockstar

$100,580,900

8.1%

Amp

$33,947,080

25.6%

Full Throttle

$26,199,540

-34.1%

Java Monster

$19,153,690

1,124.4%

Monster XXL

$18,309,220

72.0%

SoBe No Fear

$17,048,390

-44.6%

Amp Overdrive

$12,825,420

109.8%

Rockstar Juiced

$12, 255,680

17.8%

Heading Up: Java Monster

52 Weeks through 9/7/08 SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart

CONVENIENCE/PET STILL WATER

Dollar Sales

Change vs. year earlier

Private Label

$694,634,100

10.5%

AquaďŹ na

$445,495,300

-13.9%

Glaceau Vitaminwater

$439,670,800

36.4%

Dasani

$431,164,400

-4.6%

Poland Spring

$257,089,400

-0.2%

Propel

$178,929,500

-8.3%

Arrowhead

$173,827,200

-6.2%

Deer Park

$135,224,500

-6.7%

Nestle Pure Life

$121,187,400

4.3%

Crystal Geyser

$105,716,800

-1.3%

Heading Up: Vitaminwater

52 Weeks through 9/7/08 SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart

DOMESTIC BEER

Dollar Sales

Change vs. year earlier

Bud Light

$1,352,248,000

3.8%

Miller Lite

$688,197,700

1.6%

Budweiser

$659,891,300

-2.7%

Coors Light

$644,709,000

8.5%

Natural Light

$267,739,400

1.1%

Michelob Ultra Light

$202,730,500

4.7%

Busch Light

$195,868,800

3.7%

Miller High Life

$165,455,800

5.2%

Busch

$150,362,100

3.2%

Miller Genuine Draft

$141,082,200

-7.6%

Heading Up: Coors Light

52 Weeks through 9/7/08 SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart

OCT.08.BEVERAGESPECTRUM.17

NEWPRODUCTS BEER This fall, Miller Lite is introducing a new, 16 oz. aluminum pint bottle that enhances the Miller Lite taste experience. The pint’s wider opening provides a smoother flow to enhance the Miller Lite taste experience; the aluminum cools like a can; and the resealable closure helps lock in freshness. The Miller Lite aluminum pint will be tested throughout much of the Midwest and South through the end of the year. The Miller Lite aluminum pint, designed by Broomfield, Colo.-based Ball Corporation, is intended for off-premise retailers, with a focus on convenience stores.

The package will be sold as part of a 9-pack.

MillerCoors will support the debut of the Miller Lite aluminum pint with television, radio, out-of-home and online advertising, as well as a variety of retail point-of-sale and merchandising materials. For more information, call (414) 931-3848.

MillerCoors is also relaunching Foster’s Special Bitter as Foster’s Premium Ale.The beer remains the same. But the packaging is getting tweaked along with the name. The Foster’s Premium Ale oil can contains more gold coloring and the logo is cleaner and more closely resembles the Foster’s Lager. Oil cans and 12-packs hit retail in August. For more information, call (414) 931-3848.

Michelob Dunkel Weisse and Michelob Pale Ale are joining Michelob, Michelob Light, Michelob AmberBock, Michelob Honey Lager and Michelob Porter as beers available year-round to adults nationwide.

Dunkel Weisse is an unfiltered dark wheat ale brewed with a special Bavarian yeast strain combined with wheat, caramel and chocolate malts. Pale Ale, previously only available on a select seasonal basis in the annual Michelob Specialty Sampler Pack, can now satisfy beer drinkers throughout the year with its delicious floral and citrus notes.

These Michelob Brewing Co. beers are also getting a fresh, consistent look. Each will be packaged in the brand’s signature embossed bottle with its raised ridge around the neck displaying a subtly arched label trimmed in muted gold. New 6-pack carriers will show detailed information on the side panel about the ingredients, taste and color of each beer style. They will be line-priced with other Michelob products. For more information, call (314) 577-9105.

After debuting on draught, Budweiser American Ale launched in 12 oz. 6-packs and 22 oz. singles at select on- and offpremise retail accounts. Robust and wellrounded, Budweiser American Ale’s rich

18.BEVERAGESPECTRUM.OCT.08

amber color and bright, hoppy finish is the ideal counterpart to Budweiser’s signature golden, crisp flavor. Budweiser American Ale is an all-malt, top-fermented ale that is dry hopped with Cascade hops from the Pacific Northwest. Budweiser American Ale is 5.3 percent alcohol by volume (ABV). It will be supported in the marketplace by a targeted media plan consisting of television, print, outdoor and Internet, along with exclusive sampling events and on-premise merchandising. For more information, call (314) 577-9671.

ENERGY DRINKS Go Fast Sports and Beverage Company, creator of Go Fast Energy Drinks, announced that this fall, Go Fast Energy Drinks will now be available in a 16 oz. can. Also launching in the new 16 oz. cans will be new, revolutionary formulas; Z-17, Light and GFTea. Z17 was created by Go Fast to provide you with the most unique flavor blend.

Z17 still provides that Go Fast “kick” but with the flavor, additional energy and benefits of Green Tea. GFTea includes a one of a kind taste with an exclusive blend of White, Green and Black teas. Go Fast Light has the benefits of Z17 but in a light formula with little aftertaste and no “diet” flavor. Hitting store shelves this fall, Go Fast Sports and Beverage Company will also be premiering the new line of flavors and 16 oz. cans at this year’s NACS. MSRP is $2.59 per can. For more information, call (303) 893-1222.

DAIRY Portland, Maine based Oakhurst Dairy has announced that they will be introducing Oakhurst Super Premium Chocolate Milk to consumers across Northern New England.

New Oakhurst Super Premium Chocolate Milk will be made with Oakhurst’s high quality fresh whole milk produced with no artificial growth hormone. Oakhurst has had an overwhelmingly positive response from retailers to the Super Premium Chocolate Milk which will be available in both convenient on-the-go pints and in quarts. The new product will be supported by in-store merchandising, including shelf strips and fridge clings, and with trade advertising. For more information, call (207) 772-7468.

FUNCTIONAL BEVERAGES NESTLE, the world’s largest food and beverage company, has introduced GLOWELLE, a daily beauty drink dietary supplement that

protects and hydrates the inner and outer layers of the skin. GLOWELLE is formulated with a proprietary blend of high antioxidant vitamins, phtyo-nutrients, botanical and fruit extracts to help fight the signs of aging by nourishing the consumer’s skin. GLOWELLE is available in beautiful ready-to-drink glass bottles as well as convenient seven (7) or 30 day powder pack kits. Made with real tea, fruit and botanical extracts, GLOWELLE offers two flavors, Natural Raspberry Jasmine Flavor and Natural Pomegranate Lychee Flavor. GLOWELLE is available exclusively at Neiman Marcus stores nationwide and Bergdorf Goodman. Glowelle’s MSRP is $7 per bottle, and the powder is $40 for 7 day and $112 for 30 day. It can also be found online at NeimanMarcus.com. For more information, call (212) 598-4400.

WINE Sterling Vineyards, the landmark Napa winery, has announced a new line of organic wines from Mendocino County, Sterling Vineyards Made With Organic Grapes 2007 Sauvignon Blanc and Chardonnay.

Additionally, a Cabernet Sauvignon made from organic fruit is scheduled for release in April 2009. The wines have been certified by the California Certified Organic Farmers (CCOF) organization, whose emblem appears on the back label. The SRP for both the Sterling Vineyards Made with Organic Grapes Chardonnay and Sauvignon Blanc is $13. For more information, call (707) 299-2618.

Sutter Home has taken a contemporary twist on tradition and broadened the definition of ‘red blend’ for more to enjoy. The Napa Valley-based winery’s latest offering, simply called ‘Red,’ offers consumers a chance to further their wine tastes. A blend of predominantly Merlot and Zinfandel, Sutter Home pushed the envelope and mingled in a touch of Moscato, a varietal that has enjoyed wild success among Sutter Home fans for years. Also widening the appeal is how the wine can be served – at room temperature as one would serve a red wine, or chilled as with a white wine. Red began hitting stores around the country in mid-August, with a suggested retail price of $5.99.For more information, call (707) 963-3104.

Diageo Chateau & Estate Wines has announced the launch of The Monterey Vineyard, an ultra-premium Burgundian brand from two of Monterey’s most respected subappellations, Arroyo Seco and Santa Lucia Highlands. The Monterey Vineyard Pinot Noir and Chardonnay wines are a reflection

of the region’s unique terroir and represent the very best Monterey has to offer. The small production Monterey Vineyard Pinot Noir has a suggested retail price of $25.99. The Monterey Vineyard Chardonnay has a suggested retail price of $22.99. Both wines will be available nationally with the 2007 vintage.

For more information, call (707) 299-2626.

RTD TEA The Healthy Beverage Company, makers of Steaz Sparkling Green Tea and Steaz Energy, has introduced its newest organic tea innovation – Steaz Organic Iced Teaz. Steaz Organic Iced Teaz is the first full line of fair trade certified, ready to drink iced teas. Flavors include four green tea varieties (Peach, Blueberry/ Pomegranate/Acai, Mint, and Unsweetened with Lemon), black tea with lemon and white tea with lime and pomegranate. They are available in 16 oz. fully recyclable aluminum cans. At 40 calories per serving, the teas are lightly sweetened with 10g of pure cane sugar and contain only all-natural flavors. The Unsweetened with Lemon flavor contains no sugar and has zero calories. Recommended retail pricing is $1.79 per can. For more information, call (215) 321-8330.

ITO EN has debuted the Oolong Shot, a premium unsweetened ready-to-drink tea brewed from whole loose oolong tea leaves.

The drink, which contains more oolong tea leaves brewed per serving than any other ready-to-drink oolong tea on the market delivers a whopping 171 milligrams of oolong tea polyphenols in a convenient 6.4 fluid ounce steel can. Oolong, also known as Wu-long and traditionally called blue tea, is a dynamic balance between green tea and black tea. Full bodied with a smooth finish, research shows that an unidentified compound in oolong may promote weight loss. The tea is gaining popularity in the United States among the health and weight conscious. The Oolong Shot retails for $1.79 and will be available at natural and mainstream markets nationwide. For more information, please call (707) 327-6413.

This fall, it’s all about what’s new for High Country Kombucha, which is introducing a brand-new herbal-infused Kombucha line, a new presence in the national market and a new face at this year’s Natural Products Expo East trade show. The new herbal line has five different flavors: Elderberry Hibiscus, Lemon Myrtle, Tibetan Chai, Herbal Passion and Herbal Lite. Pricing has not yet been released for these products. For more information, call (720) 352-7144.

OCT.08.BEVERAGESPECTRUM.19

RECOVERY DRINKS

KIDS BEVERAGES

Code Blue, which calls itself “the world’s first complete recovery drink,” is available for purchase at www.drinkcodeblue.com.

Designed by beverage scientists to revive your body, Code Blue is intended to combat dehydration, replenish vital nutrients and remove harmful toxins. Code Blue was created for people who enjoy going out at night but need to wake up feeling refreshed the next morning. Code Blue can be consumed before, during and after a night out to speed the recovery process and bring the body back into balance. Code Blue is the first ready-todrink beverage to include Reduced Glutathione, one of the most powerful antioxidants available. The drink is sweetened with natural agave nectar. Code Blue is packaged in a fully recyclable 12 oz. PET opaque blue bottle. Its cutting edge design utilizes “LiquidMetal” technology to replicate a polished metal look, and a 3D Holographic Ink label which provides a strong shelf presence. This product is searching for national distribution with an expected MSRP of $2.99 per bottle.

For more information call (212) 584-4274.

The American Beverage Corporation proudly introduced two proprietary new, kid-friendly drink alternatives this September – Wall E Ice Bop juice slushies and High School Musical fruit drinks. Both products are all-naturally flavored, use no preservatives, are under 110 calories, and are rich in antioxidants appealing to consumers looking for healthier drink alternatives for their children.Wall E Ice Bops – licensed with the robot character of the movie with the same name – are an innovative product that offers the excitement of frozen fruit slushies at home, at a picnic, beach or the park without the hassle of a blender. They come in a convenient pouch and are made with 50% juice, are all naturally flavored, naturally low in calories, high in antioxidants and contain no preservatives. Wall E Ice Bops are available in four flavors: Space Station Strawberry, Tropical Sunshower, Meteor Mixed Berry and Lunar Lemonade.The new High School Musical fruit drink is a line of single-serve, naturally flavored fruit drinks in an 8 oz. proprietary Disney ears PET bottle. This fruit drink line carries the widely popular Disney High School Musical branding and will be available in three flavors – Reach for Melon Peach, Big Game Lemon Berry, and East High Fruit Punch. Wall E Ice Bops will retail for a suggested price of $3.49 for a four-pack. Twist ‘n’ Chill will retail for a suggested price of $3.79 per six pack.

SPIRITS Heaven Hill Distilleries, Inc., the nation’s largest independent family-owned spirits supplier, has announced a licensing agreement with McIlhenny Company of Avery Island, Louisiana, creator of Tabasco brand Pepper Sauce, to produce Tabasco Spicy Tequila. Created from premium tequila flavored with the authentic and iconic Tabasco brand Pepper Sauce, Tabasco brand Spicy Tequila is a unique and perfectly balanced marriage of the highest quality tequila with the hot, spicy and bold Tabasco kick.

Tabasco brand Spicy Tequila will be available in a striking proprietary 750ml package that features the highly recognizable Tabasco “Diamond” logotype graphic on the face label, with red and gold foil flames rising behind to the edges of the rectangular border.

Offered at a suggested retail price of $21.99 for the 750ml bottle, Tabasco brand Spicy Tequila began selling in September in Dallas, Houston, Georgia, Indiana and North Carolina. The brand will be supported by a full range of on- and off-premise point-ofsale material, including a branded website www.TABASCOtequila.com, all utilizing the “Heat Up the Night” tagline and graphics.

For more information call Heaven Hill at (502) 413-0220.

20.BEVERAGESPECTRUM.OCT.08

RTD COFFEE POM Wonderful has launched POMx Iced Coffee, available exclusively in New York City and Whole Foods Markets in the Northeast and North Atlantic States. With a potent dose of caffeine and healthy antioxidants, POMx Iced Coffee is a sophisticated energy drink for consumers who seek an energy boost but who typically avoid the excess sugar and artificial ingredients associated with carbonated sodas, coffee beverages and energy drinks. POMx Iced Coffee does not include or taste like pomegranate juice, but comes in two creamy and delicious flavors: Cafe au Lait and Chocolate. Each bottle of POMx Iced Coffee contains a Healthy Buzz -- a stimulating 175mg dose of caffeine and enough POMx to equal the antioxidant power of an 8 oz. daily dose of POM Wonderful 100% Pomegranate Juice. Sold in a 10.5 oz. single-serving bottle, POMx Iced Coffee has a suggested retail price of $2.99. For more information, call (310) 966-5858. •

Consumers want beverages with healthy ingredients. Leave it to WILD. Concern about fostering good health as well as maintaining a high quality of life has been shown to impact 70% of food purchases. Consumers’ belief that active ingredients reduce the risk of disease and improve long-term health qualities has pushed the functional foods market to domestic sales of $26.9 billion and $81 billion worldwide.

Recognizing the need for ingredients without formulation issues, WILD Flavors has developed H.I.T.S., Health Ingredient Technology & Solutions®. This line of health ingredients will add value to your formulations for more commercially viable foods and beverages. To support you in implementation of H.I.T.S. from concept-to-market with industry, market and technological support, WILD offers health ingredients, flavors, colors, sensory evaluation and complete commercialization of ideas.

WILD’s Heart Healthy Tropical Beverage

To learn how WILD can help your formulations fall in favor with consumers, call 1.888.WILD FLAVORS, or email us at marketing@wildflavors.com.

GERRY’S INSIGHTS

By Gerry Khermouch

MORE THAN A MARGINAL DIFFERENCE COUNT ME AMONG the wrongheaded majority who were doubters back in the late 1990s after Red Bull had inaugurated the energy drink category, and with it, profit margins that were unheard of in soft drinks. Surveying the aisles crammed with knockoff brands at the InterBev show the following year, it was easy to predict that the competition would knock down those rich margins in no time, leaving energy drinks as just another modestly profitable segment. It wasn’t just me; lots of others drew the same conclusion. After all, it had played out that way in every other segment. Yet looking at energy drinks a decade later, their margins are still the envy of the business. The widely predicted margin collapse has yet to occur.

I wonder if we all reflect often enough on what a miracle that is. After all, we’ve seen literally hundreds of entries come and go, including quite a few from such industry giants as Coca-Cola, PepsiCo, Dr Pepper Snapple Group and Anheuser-Busch, but we have yet to see the ruinous price wars that have characterized every other sector. How durable have the premium brands been? Even private label has barely made a dent. Among other beverage categories, I can think only of beer as a segment where private label is not a factor – and in beer there is a thriving tier of subpremium brands, which is far from the case in energy.

For the most part, consumers have been content to stick with premium entries. I think much of the credit for that should go not just to the restraint shown by the manufacturers of energy drinks but to retailers who’ve worked hard to protect this important profit center. A lot of you Beverage Spectrum readers have been smart enough not to let anyone kill this golden goose.

To find another beverage segment that has protected its margins as well you have to venture outside the ready-to-drink segment to hot coffee, where Starbucks established an

22.BEVERAGESPECTRUM.OCT.08

elevated price for good coffee and everybody else, from Caribou to Dunkin’ Donuts and McDonald’s, has been happy to ride its coattails by conjuring up premium offerings at a premium price.

True, over the past year promotional activity in energy drinks has been on the rise – two-for-$3 deals and three-for-$5 deals for the 16-oz. players – at a time that mounting economic stress has winnowed traffic at convenience stores and begun to force many Americans to cut back even on so-called affordable luxuries. Even if margins have edged back a bit from $6 or $8 per case, they’re still uncommonly lush.

So why did this segment break the trend?

Looking at what’s happening in other nonalcoholic beverage segments, one has to wonder whether a key factor has been that several of the leading brands continue to operate independently. Red Bull, facing more intense competition in this country than it had experienced elsewhere, hasn’t panicked.

It’s maintained its high register ring and tried to orchestrate its inevitable diversification into larger packages in a way that doesn’t seem as if it’s discounting. Hansen Natural’s Monster, while fighting its skirmishes with Rockstar and Full Throttle, has maintained its marketing commitments in alternative sports and offered line extensions – notably Java Monster coffee energy drinks – that generate an even higher register ring.

Contrast that pattern with segments like iced teas, sports drinks and bottled waters.

They were all premium businesses until Coke and Pepsi entered and eventually turned them into a new front in the cola wars. In the latest segment in which they’ve chosen to do battle – enhanced waters – the transformation from premium to commodity is occurring with scary rapidity. Barely a year ago this niche was a paragon of superpremium pricing, thanks to the efforts of Glaceau, the deft marketer of vitaminwa-

ter and smartwater. Sad to say, even before that brand reaches its one-year anniversary in November of its transition to the Coke bottling system, that segment has gone the way of bottled waters, iced teas and isotonics, as Coke blows out the brand at 10 for $10, five for $5, even 10 for $8 while rivals Pepsi (with SoBe Life Water) and Dr Pepper Snapple Group (Snapple Antioxidant Water) likewise plumb the $1-per-bottle barrier. By some estimates, in doing so, Coke already has cut the value of its $4.2 billion investment by nearly half.

Against that dreary picture, energy drinks are a marvel to behold. So how long can this lucrative run continue? We can’t rule out as a concern that the foundering economy will increase the stress on margins for this most blue-collar of segments. Given the lessons of the other categories, though, I find greater concern in some of the maneuvering that was occurring as this article was going to press: Coke trying to establish a distribution alliance for Monster, Rockstar looking to negotiate a similar partnership with Pepsi or DPSG if it loses its place at Coke. In both cases, it seemed likely that an equity investment would be negotiated as part of the deals, meaning both brands would lose some of the autonomy they’ve enjoyed under their current distribution partnerships. No question, in areas from procurement to overseas expansion to procuring bigger beachheads in non-c-store channels, those alliances could be very beneficial. But seeing how quickly those giants have managed to turn enhanced waters into a commodity makes me wonder if, for energy drinks, those potential rewards will be worth the tradeoff.

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

WE ALREADY HAD A V8

By Hinda Mandell

FOR 75 YEARS, V8 has been trying to get us to drink our vegetables.

But recently, the brand managers turned to an unfamiliar ally to try to pump some life into the old warhorse of a brand: fruit. hile the prototypical goodfor-you drink marked three quarters of a century this year, it had to change. Although it’s managed to stay consistent with its original mission to provide a drink for the consumer who knows that veggies are good but doesn’t have the time to prepare them, V8 pulled itself out of an innovation lull – and into a high-visibility deal with distributors like Coca-Cola Enterprises – by crossing the produce aisle and marrying itself to some sweeter fruit flavors.

In all likelihood, however, it was a forced union. Staying true to its space-age “drink your vegetables” motif had, over the years, left the brand as crusty and old as John Glenn and his fellow Mercury astronauts.

The story of how V8 made the move from space age to information age, adding new SKUs that include – heresy! – fruit juices, offers an interesting lesson in how a wellestablished but ancient brand can keep itself relevant and entice a new generation of consumers.

In so doing, the brand managers also made the product into an important part of parent company Campbell’s bottom line. In 24.BEVERAGESPECTRUM.OCT.08

rolling out V8 Splash, a fruit juice mixture, and more recently and impactfully, V-Fusion, a daring fruit-and-vegetable juice combination, the V8 brand has been revived from its old-age doldrums faster than you can say “Cocoon.”

“They’re taking a good corporate band name and branching it out over good-tasting [fruity] beverages,” said Marty Brown, president of the California-based beverage consulting firm, Power Brands. And the market has responded.

Even as second-quarter earnings for Campbell’s fell 3.9 percent in February, according to the Wall Street Journal, V8 put in a strong performance. Information Resources Inc. reported that sales from V8 Splash and V-Fusion were up 12.46 percent and 82.25 percent, respectively, for the past year.

V8 Splash sales in supermarkets, drugstores and mass merchandise outlets – excluding Wal-Mart – totaled more than $61.1M for the year ending March 23. V-Fusion’s sales topped $75.1M. CCE reported that its V8 partnership was responsible for 10 percent of the volume growth of its still beverage portfolio in the last year.

“We can’t keep it on the shelf. We are

making V8 V-Fusion 24-hours a day,” said Juli Mandel Sloves, a spokeswoman for Campbell’s, which purchased the brand in 1948.

Not a bad turnaround for a brand that was becalmed in the center-store doldrums.

Lately, all the excitement in the juice category has rested in the new produce-centered lines of superfruit drinks like POM Wonderful and Naked, rather than in the shelf-stable aisle. Even the once-innovative Ocean Spray has taken it on the chin, and attempted to branch out into energy drinks, of all things.

But rather than trying to beat the producecentric superfruits, V8 joined them, and did so while playing on its own halo as an extremely healthy, if not “super,” product.

Today, the company that has been selling a blend of tomato, carrot, celery, beet, parsley, lettuce, watercress and spinach juices for the better part of a century, is now offering ontrend flavors as hip as the hottest beverages out there. In the mood for an Acai Mixed Berry beverage? What about some Blueberry Pomegranate, Strawberry Banana, or Peach Mango liquid refreshment? V-Fusion has a variety for each – with a vegetable base that is barely detectable to the taste buds. And

The company that brings you Sun Shower™ 100% Nectarine Juices has just made some great additions to its family of nutritious and delicious beverages:

• All Natural 100% Juice Superfood Smoothies—(Stamina, Defense, Heart Healthy, Revitalize, Strength) • All Natural Superfood Fruit ‘N Yogurt Smoothies—(Strawberry-Banana, Berry Blast, Orange Passion, Pina Colada) • Super Blends—Healthful Indulgence (Iced Coffee, Chai Tea Latte, Mocha Cappuccino, Chocolate Raspberry Frappe) • All Natural 100% Juice Super Juice—(Stamina, Defense, Heart Healthy, Revitalize, Strength) • Super Juice Beverages: Light ‘N Healthy—(Stamina, Defense, Heart Healthy, Revitalize, Strength) Each new Sun Shower™ flavor features the Lifeguard™ fortification package of essential vitamins, nutrients, amino acids, electrolytes and herbs. Give your customers something new and unique that is also nutritious and delicious. Give them Sun Shower™.

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the juice’s color is no longer just tomato red: it spans the rainbow to include purple and orange.

“If you appreciate the core benefit around vegetable nutrition in a beverage, your imagination can run wild,” said Darren Serrao, vice president of beverages at Campbell Soup Company.

Still, it took a long time to start running at all – much to the grumbling of distributors. For years, the company only saw fit to push out marginal line extensions that put the product in the hands of those who were already familiar with the brand, rather than extending its reach through fruit.

And that risk aversion apparently held off innovation at the company for a long time, making it seem like a product only drunk on airplanes and at brunch, mixed into a “Bloody Mary” with its eternal companion, vodka.

With Splash, V8 started its campaign to move past its traditional boundaries into fruit juice blends.

For one industry insider and veteran of Coca-Cola Company and Coca-Cola Enterprises – which has been distributing V8 since 2007 – the question is: “What took so long?”

There’s a good point there. After all, check out these SIZZLING line extensions: Low Sodium! Spicy Hot! High Fiber! Calcium Enriched! No wonder it generated the excitement of a Tuesday night Bingo game.

Everyone loves a good “Bloody,” of course. But for a long time, the core consumer of V8 has been perceived to be as much an enthusiast of blood thinners as they are of cocktails.

When a brand reaches geriatric age, it can either slow down with its consumers – a la Ovaltine – or it can try to stay spry, and that’s finally what V8 has done.

26.BEVERAGESPECTRUM.OCT.08

After all, not everyone is keen on the oldfashioned V8 product, a fact even Campbell’s acknowledges. This gap – between those who drink V8 for health’s sake and those who were likely to forsake nutritional health because of the taste – read: KIDS – proved enough of a market segment to prompt V8 to add a splash of fruit.

The goal was to capture the purchasing power of those who don’t like the “zesty, tomato-y taste of original V8,”said Mandel Sloves. Campbell’s even gave this group a name: “red-rejectors.”

“We estimate that these ‘red rejectors’ make up 50 percent of the population and therefore a significant audience that we could reach with a new product just for them,” said Mandel Sloves.

So the innovation of a squeeze of fruit was a solid one. After all, the brand has always had a healthy aura. Consumers ranked V8 as the healthiest brand in the 2007 HealthFocus Trend Report, which provides analysis of food shoppers’ health and nutrition behaviors. Consumers were asked to rate brands – beverage and foodstuff – they believe are “extremely or very healthy by those who are familiar with the brand.” V8 captured 66 percent of the vote, beating 49 other brands for the top slot, including such wellness brands as Quaker, Kashi, Horizon Organic and Organic Valley – all of which tied for second place. Potential competitors to V8, such as Tropicana and Ocean Spray, ranked 12 and 19, respectively. Campbell’s ranked 24.

And it’s worked. Households with kids, adults 25 and over, are the ones buying the V8 fruit lines as core consumers, according to Mandel Sloves. Part of what has attracted the families to try V8 Splash and V-Fusion is the recognition of the original brand name, say beverage analysts. It’s almost like beverage nepotism – picking up a brand on the basis of a parent’s good name.

“Where it’s positioned, it has very, very good, solid brand name recognition,” says Brown. “If you think about a tomato based product, you’ll think about a V8.”

But before to the decision to add the fruit, that may have become as much of a liability as it was an advantage.

Campbell’s wouldn’t provide details on how and when, specifically, the decision emerged to juice up the brand. Nor did it say whether there was any opposition to the move. According to Mandel Sloves, however, there was “great enthusiasm for the opportunity to evolve the V8 brand.”

And decades of effective advertising for V8 – showcasing the healthfulness of vegetables in a bottle – may have also paved the

way for new customers to try V8’s fruitier varietals.

“V8 is capturing a whole group of consumers who are reinforcing the fact that they’re drinking something healthy because it has the V8 label,” said the veteran executive.

The next challenge for V8 is to keep up with the demand. Increased production space for V8, V8 Splash and V-Fusion may require capital investment in the near future.

According to a transcript from the second quarter press conference in February, Bob Schiffner, senior vice president and CFO at Campbell’s, said: “As far as the capacity is concerned … we are nearing capacity constraints … we will be spending capital starting this year into next year to add additional capacity in beverage.”

Doug Conant, president and CEO of Campbell’s, cited “a strong record of in-

With V-Fusion, the company has stepped solidly into the New Age, mixing up veggies with its new fruit drinks. novation” as driving the performance of the company’s beverage segment at the Consumer Analyst Group of New York Conference in February. In fact, beverages – i.e. V8 – represented the best-performing segment of Campbell’s business in 2007, according to a transcript from the event.

“We have migrated our positioning of V8 from merely a smarter juice choice among many on the shelf to a key weapon in the search for an easy way to consume more vegetables every day,” said Conant. He added: “V8 V-Fusion is ideally suited for consumers who are looking for vegetable nutrition without vegetable taste. As a result of the strength of this proposition, V8 V-Fusion has been the best launch in the shelf stable juice category in the past five years.”

There you go: an overnight success. At 75. •

BRANDS IN TRANSITION

MAGIC HAT’S NEW TRICKS

BY MATT CASEY

Anyone who has ever cracked open an apricot-tinged Magic Hat #9 will tell you that Magic Hat takes a unique approach to beer. The company has never followed the conventions of the industry, and has experimented with flavors most brewers wouldn’t approach. (Think lemongrass. Or – ick – garlic.) Couple that with quirky promotions that range from traveling circuses to Mardi Gras parades in eight-inch Vermont snow storms, and the brand has earned a reputation like none other – but what else would you expect from a brewery that spawned from the same city as Ben and Jerry’s Ice Cream and the alternative rock band, Phish?

Despite the brand’s free-wheeling Burlington vibe, Magic Hat founder Alan Newman knows a bit about business. In the late 80s, he bought a catalogue company called Renew America that sold Earth-friendly household products. Today, that company – now called Seventh Generation – ranks as one of Vermont’s largest employers, and stocks the cleaning aisles at natural foods retailers like Whole Foods, but Newman’s tenure with the company ended in 1992 when his partner forced him out. Undeterred by his ouster, he started Magic Hat. The brand’s distribution territory initially clung close to the coast of Lake Champlain, but, today Magic Hat ranks as the twelfth-largest U.S. craft brewer, and sells #9, Circus Boy, Lucky Kat, Single Chair Ale and a selection of seasonals as far south as Georgia and as far west as Chicago – admirable progress for a man that says he got into a business he “didn’t understand.”

“I really don’t have a crystal ball and I really don’t know what’s going to happen,” Newman said, “so I keep following my nose.”

Newman plays humble, and calls himself “stupid,” but he earned the label of “serial entrepreneur” from the Wall Street Journal, so he must be following one lucky nose.

Lucky or not, that nose recently led him all the way to Pyramid Breweries on the West Coast. Newman and his partners at Magic Hat ponied up $25.7 million to

28.BEVERAGESPECTRUM.OCT.08

Magic Hat’s Brewery Bar. purchase Pyramid in a move that represents a new stage for the quirky Vermont beer company. But, for those of you reading on the West Coast, don’t expect to pick up a six-pack of Berkeley-brewed Magic Hat any time soon.

“That last thing in the world we would try to do would be to consolidate the brands,” Newman said.

While there’s probably some ideology to Newman’s aversion to consolidation, there’s a practical aspect as well. According to Magic Hat Brewer Matt Cohen, the beer he brews can only be fermented in one place: the high-school-gym-sized fermenting room at the South Burlington Artifactory.

PINCH POINT The company uses an open fermentation process, which allows continuous reuse of the same yeast. Other breweries have to discard their yeast after three or four generations. Keeping the yeast creates a consistent note in the beer, and Cohen said the room itself “creates a unique flavor that’s found across all of our beers.”

Crammed tight with catwalks and opentopped vats, the room smells faintly of fruit.

Bubbles gurgle out of fresh worts – the solution that, with the help of microorganisms, becomes beer. Waves of carbon dioxide tumble out of the tops of the vats, and yeast forms a crust on beer nearing the next stage of production. Those conditions, Cohen said, hold a key to Magic Hat’s personality.

But that unique flavor comes with a price.

Cohen can only brew with one strain of yeast at a time – otherwise they’ll cross-pollinate – and the conditions surrounding the room faintly resemble those of a Haz-Mat lab. Okay, so nobody wears sterile plastic suits to check the beer, but anyone entering the room washes their shoes first, and air rolls out when they open the door. The clean

shoes and pressurized room – the result of pumped-in filtered air – keep wild yeast out.

All of those little issues add up to a bigger one: the room can’t grow. Cohen calls it the company’s “pinch point.” As Magic Hat gains popularity amid a craft beer market that grew 12 percent in 2007, the brewery approaches the limits of its capacity. Magic Hat already moved its headquarters once, but Cohen said the company has striven to deliver consistent product as it has become more popular.

And it has definitely become more popular. According to the Brewers Association, Magic Hat’s sales hit 102,506 barrels in 2007 – up from 38,400 in 2003 – after four continuous years of 23-40 percent annual growth rates.

ORGANIC AND GARLIC But growth brings pain. The brewery had to discontinue several flavors – including Humble Patience, Magic Hat’s one-time flagship product – because their sales didn’t warrant continued production. Additionally, not everything they try succeeds.

Cohen said Magic Hat once brewed a garlic-infused beer that served best as a penalty for losing a bet, and their Orlio organic line has suffered from fits and starts since its March 2007 roll-out. Initially launched with blanket distribution, it didn’t quite catch on everywhere. Magic Hat spokeswoman Krissy Leonard said that initial broad launch allowed the company to find out where the product worked, and calibrate their support accordingly. Since then, she said the line is “doing everything that we’d expect it to.”

Then there are the physical limitations of that one precious room. To get around them, the company installed new equipment and expanded its facility. They added a centrifuge to cleanse the beer more quickly, built two grain-silo-like towers to free up fermentation

space, and recently completed a new bottle filling line.

That last one represents a big jump. The old bottling line – still in operation – can clean, fill, cap, label and pack 100 bottles per minute. The Magic Hat crew ran the machine 24 hours per day, six days a week just to meet demand. In September, they started the new bottling line. This one can process 400 beers per minute, but has yet to be pushed to that limit.

“If we didn’t do the Pyramid deal….

Magic Hat would be fine for the next three to five years,” Newman said.

CRYSTAL BALLS But what of the Pyramid deal? Newman called it part of the company’s “longer-term strategic vision” – something that sounds suspiciously like it might involve a crystal ball, though, perhaps a hazy one. Newman said he doesn’t have a plan for what the world will look like in five to ten years, but, the way he sees it, the beer industry is currently in a state of consolidation. For evidence of that, look no further than the big American brands of Coors and Budweiser, now divisions of MillerCoors and InBev, respectively. Newman doesn’t like it, he said, but he doesn’t make the rules. He just plays the game.

1 tube = 10 DrinkTabs

“When we began, the hottest category in alcoholic beverage was something called wine coolers,” he said. “Then that disappeared and next came ciders... then ciders kind of lost their way and that new amorphous malt beverage started coming in... and now you have a huge influx of what I’ll call super premiums.”

His solution to the ever-changing market is to accept that the environment will change, and employ people that stay plugged-in and passionate about beer. In the current environment, merging makes sense.

And despite suddenly owning a second beer company, Newman said he and the Magic Hat team “really believe in small independent craft breweries.”

He’s not kidding. Cohen, standing in Magic Hat’s quality control room (one of the few quiet places in the Artifactory), said he doesn’t view other craft brewers as competitors. Their experience has told them that craft beer drinkers don’t declare their allegiance to a single brand. Instead, they gravitate toward a handful of brands and dabble in others. If a Magic Hat drinker picks up a six-pack of Switchback or Sierra Nevada, the theory is that the company hasn’t lost a customer, because they’ll be back.

So why consolidate?

Because, Newman said, uniting the

otherwise-solo breweries under Independent Brewers United Inc., will allow the companies to be “big behind the scenes.” The two breweries will be able to share costs and knowledge on the back end while maintaining their own personalities.

The deal puts a scattering of West Coast infrastructure under Magic Hat’s control, but also, as Brewers Association Director Paul Gatza put it, “puts Magic Hat a little bit Lucky Kat, in the restaurant business.” one of the Pyramid operates two seasonal production breweries with offerings. attached restaurants and three stand-alone brew pubs.

“I see it as more evolutionary than anything else,” Newman said. “I don’t see it as being that huge of a leap, but that could be because I’m stupid.”

Newman said if he had time, he’d probably find the transition at Magic Hat “scary.”

But he doesn’t have time. So, he’s excited.

“I may be in for the shock of my life,” he said. “But we’re still in the beer business.” •

www.ZenergizeHealth.com OCT.08.BEVERAGESPECTRUM.29

POWDER POWER

BY MATT CASEY

dmittedly, powdered beverage mixes aren’t new technology.

Tang, after all, has been around long enough to have been used during NASA’s Gemini program in the 1960s, and, early on, Gatorade sold in canisters as often as it sold in bottles. But modern marketers have taken a new twist on powdered drinks.

Instead of relegating drink mixes to tubs that sit in mom’s cabinet, new powdered beverages come in single-shot sleeves, called “sticks,” that can go everywhere that bottled water can.

“The stick is very portable,” said Ryan Alarid, co-owner of Zizzazz Explosive Energy Mix. “It’s not like the old Gatorade canisters… you can’t take that anywhere.”

That convenience, along with price, profit margin and customizability pushed the overall powdered beverage market segment to a respectable 7 percent growth rate between 2006 and 2007 according to Mintel market research –growth that, in all likelihood, hascontinued to increase in 2008. As powdered drinks near $1 billion in yearly sales, Gatorade, Propel, AriZona, Zizzazz, Jones Soda and others have added new single-serve options. While those companies package their powders in envelopes, some companies have taken a more innovative tack on quickmix drinks, incorporating powders into capdelivery systems or condensing the whole formula into an Alka-Seltzer-like tablet.

30.BEVERAGESPECTRUM.OCT.08

BIRTH OF A TREND Before there was a trend, there was Crystal Light. The sugar-free mix debuted in 1984, and powered sales through its low-calorie status – and an endorsement from Dynasty star Linda Evans. (She played Krystle Carrington, don’t-cha-know.) Even though Dynasty ended in 1989, and big hair soon followed, Crystal Light pushed on with a revolving cast of spokeswomen and the banner of “I believe in Crystal Light because I believe in me.” Along the way, Kraft sold the product in both large canisters and in multi-packs of individually-packaged tubs pre-measured to mix with a pitcher of water.

As a brand in touch with its mostly-female customer base, Crystal Light noticed when its customers started carrying bottles of water everywhere. In 2006, Kraft introduced Crystal Light “On the Go” packs, now found in individual packs and ten-stick boxes. The brand also changed its focus from low-cal to low-cal and high function.

Crystal Light pushes antioxidants in their tea mixes, vitamin-C in their “Sunrise” powders, and energy, hydration and immunity in their “Enhanced” line. That shift not only parallels the modern beverage industry, it also serves as a microcosm for the whole powdered-drink segment.

“The major growth has come from energy drink mixes and sports drink mixes,” said Mintel Analyst Garima Goel Lal. “Consumers are usually ready to pay higher prices for

value-added products.”

Despite those higher prices, drink mixes still ring in as inexpensive refreshments and appeal to “price sensitive” consumers, Goel Lal said – which falls directly in line with the history of powdered drinks.

Kool-Aid, the first powdered drink, hit the market in 1927, according to the Hastings Museum. Long before cult suicides made “drinking the Kool-Aid” into a popular epithet for brainwashing, the brand rose to popularity as an attainable luxury, a step up from pedestrian water. During the Great Depression, inventor Edwin Perkins sold packets for 5 cents each, and cash-strapped families snapped the product off the shelves.

Perkins’ company churned out as many as one million packets of the powder per day by the time he sold the brand to Kraft in 1953.

Powdered iced teas, lemonades and other products arrived later, and firms also introduced the large-format economy canisters that gave rise to the American standbys of “bug juice” at summer camp and Gatorade showers at the Super Bowl.

But the segment had matured and slowed by the time Bevology co-founder Tom Hicks, about to leave Naked, first contemplated his drink mixes in tablet form. AC Nielsen’s scanner data showed that the segment actually shrunk by 1.1 percent in 2005 in food, drug and mass merchandiser channels (excluding Wal-Mart – a likely source of even more sales). Since then, there’s been

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an explosion of brands including EmergenC, ZipFizz, Easy Drink Packs, and Zym. Nielsen’s data shows that the segment’s dollar value has grown by 25 percent in those channels, as marketers have pegged their powders to functional claims and rolled out individual servings.

A typical single-serve drink mix costs between 35 and 55 cents and tops out around 70 cents. Adding a bottle of water raises the total price to a range similar to that of an RTD, but tap water and a tall glass or reusable bottle works just as well as store-bought water in a 16.9-oz PET. That not only makes the carbon-footprint crowd happy, but also puts mixes within the reach of Goel Lal’s price-sensitive consumers. Because of that, she projects powdered drink mixes will add sales to their respective segments.

Zizzazz’s Alarid also noted that customers don’t have to use water as the base liquid for drink mixes. Other beverages, he said, make interesting options – especially alcohol. He pointed to the example of Red Bull. The brand holds a special place in bars where it makes up one half of the nowubiquitous Red Bull and vodka Favorite or not, it doesn’t allow bartenders any room for creativity. Zizzazz, Alarid said, lets them experiment with four different flavors while still mixing caffeine with liquor.

While versatility with intoxicants might rank as a big perk in bars, consumers can also customize their drink mixes in most situations by simply using more or less water than suggested. Hicks said his wife, for example, drops one Zenergize tablet into a liter

of water instead of the suggested half liter to create a drink with a lighter flavor.

Major RTD brands introducing powdered mixes might not like consumers tinkering with their formula, but Gatorade Spokeswoman Jill Kinney said powder extensions buttress the core product.

“With the Powder Packs, we’re providing our consumer with the opportunity to take their Gatorade on-the-go in the event the portability of a ready-to-drink product is a barrier to usage,” she said. “With placement in the powdered drink aisle, we have also created a new point of interaction with our consumers in-store.”

Consumers can find Gatorade Powder Packs near the brand’s sister-product, Propel Fit Powder. Kinney said Propel Fit Powder met at “extremely” positive consumer response on the strength of its low-carb and low-calorie credentials as well as its vitamin payload. She added that the product’s successful debut cleared the way for Gatorade to appear in a compact, quick-mix form.

While that’s all good news for beverage marketers, the benefits of powdered drinks extend to retailers and distributors.

ALL THOSE INCHES As ultra-compact products, drink mixes run at a higher price-per square inch than other beverages, and could translate to more coin in your cash drawer. AriZona’s Tea Stix, for example, come in 30-count counter packs that take up 18.75 square inches of shelf space – a space that could hold just three 16 oz. energy drinks – and yield total revenue of

$10.50 to $15.00. Selling three 16 oz. energy drinks, on the other hand, would yield a total sale of $6-9. As a bonus, powdered beverages don’t need to be refrigerated, and can be strategically located in otherwise hard-to-use spaces. Crystal Light offers stickholders that hang on cooler doors, but beverage mixes present a profitable use of space even in bulk. Bevology’s Zenergize products come in 10-tablet tubes that retail for $6.99 and occupy less than an inch of shelf space.

That compact nature offers an additional benefit to retailers – lowered transportation costs – according to Zizzazz’s Alarid.

“For the convenience stores, the margins are much higher than your average drink – mainly because of fuel costs,” he said.

Zizzazz’s 72-count retail boxes weigh less than two pounds, 30 pounds less than 72 8 oz. Red Bulls would weigh. Factor in the much smaller package, and the shipping costs for mixes approach zero when compared to RTDs. Where shipping costs fall, so do environmental impacts, and Hicks noted that the compact nature of the products reduces waste.

“Do you want to recycle one of these small tubes, or do you want to recycle 10 bottles?” Hicks said.

Some stores have even exploited this angle by selling his Zenergize tablets with Sigg, a fast-growing line of metal water bottles, he added.

CAPS AND TABS Hicks’ brand represents a twist on ready-togo beverages. Instead of packing a breath’s

›› REHYDRATED OPPORTUNITIES Many of the products entering the powdered beverage market are extensions of ready-todrink beverages, but a couple have gone in the opposite direction. Both Jones Soda’s 24C and Alacer’s Emergen-C existed as powdered products before finding their way – pre-mixed – into a bottle.

Alacer introduced their Emergen-C Health and Energy Water in March, as an RTD extension of the company’s existing powdered products. Bruce

Sweyd, Alacer’s vice president for powders and tablets, said powdered Emergen-C has been on shelves for two decades and leads the category in sales, but its appeal is limited to the vitamin aisle – a place

32.BEVERAGESPECTRUM.OCT.08

many consumers rarely visit. However, the company saw an opportunity to expand its audience amid the surge in enhanced waters.

“We felt like, who could be better positioned to provide a better ready-todrink [enhanced water] than Alacer?”

Sweyd said.

In that spirit, Alacer launched 16 oz.

RTDs with the same vitamin content as their powder packets. Sweyd said the product is performing well in natural channels, and reaches a different

consumer than the powdered product.

Jones’ 24c presents a different story. Jones wanted to enter the growing enhanced water category, and liked the idea of using ‘24’ in the brand name.

They discovered, however, that a company called 24c already existed, and peddled powdered vitamin beverages in a tiny distribution area in Costa Mesa, Cali. – so they bought it.

Jones Spokesman Seth Godwin said the two products offer different ad-

vantages – the RTD form tastes better, while the powdered form contains more vitamins – and give consumers two options for drinkable vitamin supplements.

The RTD version sells in Target nationwide, and in DSD accounts throughout the country. Godwin said it performs particularly well in the Northeast, but the company didn’t have a strategy prepared for entering the powdered beverage market. “We’re still kind of figuring out… how to go to market

with the powders.”

Godwin said.

While Jones feels out the best way to approach the segment, they’ve signed 24c with a strong distribution partner: Whole Foods.

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BRAND NEWS worth of powder in a sleeve, he packed his powdered drinks into effervescent tablets. (read: “plop-plop, fizz-fizz…”) Zenergize and Superfly dissolve in water, mixing themselves and giving off bubbles. However, that self-mixing process takes about three minutes compared to the few seconds required to properly stir a powdered mix, and the tablets don’t fit through the mouth of a standard PET bottle. The tablets must also stay in their specially-treated tubes prior to use, or moisture in the air could dissolve them prematurely. And don’t put the tablets in your mouth, unless you have a sudden need to appear rabid.

Those complications appear surmountable, as Hicks said Bevology is currently shipping product to Costco – and his company will likely enjoy limited competition in its sub-category for the foreseeable future. Hicks said the brand’s packaging “went through probably 67 changes” before they settled on a final design, and the tablets themselves required extensive development to reduce their dissolve-time to three minutes. Each new flavor also requires intense trial and error because the tablets must weigh exactly 5.5 grams.

“Anytime you take something out you have to add something back in,” he said.

While fizz-tabs might shun the standard PET bottle, other mixes are putting themselves right on top of them. Delivery-caps are put powders in innovative packages. A handful of companies, including Liquid Health Labs and Blast Cap Technologies, have produced cap-mounted delivery mechanisms for drink mixes. Both companies license their

technology to beverage brands that market the caps with attached bottles of water, but a few companies have sold the caps as stand-alone products. At 99 cents to $1.50 each, the caps retail for a higher price than either sleeved-powders or tablets, but they bring a hint of novelty and more convenience to consumers.

“I think it is a new category,” said Ken Milligan, executive vice president of Liquid Health Labs. “It’s not an RTD, it’s an ‘RTG’ (ready-to-go.)” (See our earlier story on delivery caps, available online at BevSpectrum.com) Products using that kind of packaging innovation are subject to pricing pressures, to be sure. On the other hand, they are playing in the fast-growing arena of functionality – with enhanced waters the fastestgrowing part of the category - and there’s an argument that a packet helps keep those functional ingredients fresher than premixed beverages Now, companies are rushing mixes into the market. Once relegated to bug juice and elementary school lemonade stands, mixes are moving into gym bags and purses.

But are they mainstream? It’s hard to tell, especially since some of these products are moving in the other direction, like Alacer’s push to put Emergen-C into an RTD form.

Still, it wouldn’t be doing so without a strong powder aisle base from which it could grow. More mainstream brands are entering the segment, and Alarid, for one, expects all major energy drinks to introduce powdered versions. Maybe one day soon, everybody will be able to carry dry versions of their favorite drink in their pocket. •

ZYM Catapult ZYM recently added “Catapult” to its line of tablet-based drink mixes. Infused with 100mg of natural Guaraná caffeine, Catapult is a supercharged version of ZYM Endurance, the hydration drink introduced two years ago by BE Innovations.

Catapult adds B12 vitamins to the mix as well, for a hydration drink that fights dehydration, fatigue, muscle pain, and lactic acid build-up.

Phix Phix, Inc. announced the launch of Phix Energy. The all-natural powdered energy drink mix promotes improved energy and mental clarity. It contains green tea anti-oxidants, yerba maté and NADH. Phix Energy is now available online at Whole Foods Markets, Metropolitan Markets and New Seasons Markets in the Northwest.

Açai Daily Drink Packs Manufactured by Easy Drink Pack LLC of Norcross, Georgia, the açai packs contain a powdered, freeze-dried form of the berry’s pulp – without sugar or other additives. The new Açai Daily Drink Packs are USDA certified fully organic and natural.

Zipfizz

Gatorade

$23,413,370

9.4%

Crystal Light Energy On The Go

$6,051,213

39.7%

Gatorade Frost

$2,791,256

-16.1%

Zipfizz recently expanded its distribution channels by adding CVS, Target, Rite Aid and Odom distributors, and announced a new flavor: Grape.

All Zipfizz flavors can be purchased in 20 count boxes and three-packs as powderedfilled tubes.

Capri Sun Sport On The Go

SPORTS DRINK MIX

Dollar Sales

Change vs. year earlier

CATEGORY TOTAL

$66,422,150

31.0%

Propel

$30,801,850

75.9%

$1,079,592

-42.8%

Zenergize

Private Label

$663,846

49.6%

Powerade

$657,485

-25.5%

Gatorade Fierce

$334,694

-23.9%

Power Bar

$193,218

N/A

Replenish

$103,199

132.5%

Zenergize, originally sold in 10-count tubes, recently added 32-count canisters of individually-wrapped enhanced-water tablets for national distribution in Costco.

Power Edge

$74,515

269.1%

4C Totally Light 2Go

$74,294

N/A

Gleukos

$48,173

43.8%

Power Bar Recovery

$41,695

94.7%

Power Bar Endurance

$36,613

73.8%

SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart 34.BEVERAGESPECTRUM.OCT.08

Zizzazz Zizzazz energy drink mix recently diversified its line to include a workout mix, a drink mix for kids (Kidz Zazz), a weight loss mix and a non-caffeinated mix.

All ZizZazZ products come in stick packs. •

CATEGORY REPORT: BOUTIQUE CSDs

BRIDGING THE GREAT DIVIDE

BY JEFFREY KLINEMAN For years, the divide in the boutique CSD category has been easy to trace – it’s the line between the carbonated juice and the gourmet, old-school soda. That’s why Beverage Spectrum divided coverage this year, letting the Izzes and Fizzy Lizzys of the world strut their stuff without having to wrangle with the Reeds’s and the Maine Roots.

But apparently soda makers abhor easy definitions, so the gourmet soda group, this year, has morphed and split once again. The gourmet stuff remains gourmet stuff – more sugar, high end packages, natural sourcing, hard-to-beat flavor profiles.

But there are also enough new entries under the “healthy soda” rubric that they basically comprise a group of their own: even though these products make no pretension about having the wholesomeness of juice are nevertheless pushing their health benefits forward. They’re still sodas, of course, but they’re functional, they’re artificially sweetened, and they’re trying to bridge the divide between the old-school flavor associations of the CSD with the new age idea that a drink can do more.

The key piece of leverage to many of these sodas is the experimental sweetener stevia. The idea that a natural diet sweetener might be a game-changer is a big one. But it’s such a big idea that the CocaCola Co. and PepsiCo are working on stevia-based products of their own. And the notion that they might want to steal the thunder of independent brands isn’t a flawed one. After all, as functional sodas moved into the mainstream, what did they launch? Diet Pepsi Maxx and Diet Coke Plus.

It makes the nutritional sell tough for some of these guys, to be sure. What’s an independent operator to do? How about go both high-end and enhanced? That’s something that both Hank’s and Snow are giving a shot, taking new flavors and nutrition, mixing them up, and putting them out there. If nothing else, it adds a few more vitamins to your shelf set. And then there’s Health Cola.

“We’re in the healthy category in a way that they used to be,” says Alejandro Lacea, brand manager of Health Cola. “No phosphoric acid, natural cane sugar It’s for what we don’t have.”

36.BEVERAGESPECTRUM.OCT.08

BRAND NEWS Jones Soda Jones Soda Co. has announced the launch of its personalized soda, myJones, at Wal-Mart Photo Centers nationwide. By the end of September all 3,400 photo centers will be complete and Wal-Mart consumers can upload their favorite photo, type a personalized message on the label and order a six-pack of myJones at United States based Wal-Mart stores. Jones Soda is recognized and awarded for its unique labeling that features images generated and submitted by its customers.

MyJones will be available in six flavors: Green Apple, Root Beer, Blue Bubblegum, FuFu Berry, Cream Soda and Sugar-Free Black Cherry. The custom myJones order can be picked up at the store by the WalMart customer two to three weeks after the order is placed.

Reed’s Reed’s Inc. has launched an all-natural diet cola, Virgil’s Diet Real Cola. The new flavor is the signature addition to the Virgil’s portfolio of diet, including Virgil’s Diet Root Beer, Virgil’s Diet Cream, Black Cherry Diet Cream and now, Diet Real Cola. Virgil’s Diet Real Cola is caffeine-free and gluten free, and contains no preservatives or artificial ingredients. Sweetened with Stevia and Xylitol, all-natural sweeteners, Virgil’s Diet Real Cola expands upon Virgil’s Cola, which was successfully introduced within the mainstream marketplace in March of 2008.

Maine Root Handcrafted Beverages This summer marked the rollout of three new flavors of Fair Trade Certified Organically sweetened sodas: Lemon Lime, Mandarin Orange, and Blueberry. Currently, Lemon Lime, Mandarin Orange, and Blueberry sodas are available for shipment in loose cases of 24; they will be available in 4-packs the middle of October. Additionally, Maine Root’s Ginger Beer cases received an upgrade, and are now available in a stylish printed mother carton in either loose or 4 pack configuration. Among independents on board to sell the entire line are North Country Naturals out of Brattleboro VT, Atlantic Importing from Framingham, MA., Ace Metro Beverage in Long Island, NY, Big

Sky Beverages in CT, Bradley Distributing in the Midwest, Savannah Distributing in GA, and Greenling in Austin TX.

Wet Planet Jolt, continuing to straddle the line between CSD and energy drink, has tagged itself as “refreshment energy,” or as they put it, “good tasting energy.” Jolt Energy is available in 7 delicious flavors. And this year, in addition to a re-sealable 16 oz. can, Jolt has launched three new flavors; Wild Grape, Orange Blast and Passion Fruit. All the flavors contain a generous dose of stimulating ingredients, including with Taurine, Ginseng, Guarana, Vitamin B Complex, and Caffeine.

Snow Beverages Snow is introducing a new line of naturally flavored sodas that are not only fortified with vitamins and antioxidants, but also come in popular flavors like Pure Cola and Lemon Lime. Snow Naturally Flavored Vitamin Sodas will be launched at select east coast retailers in October 2008. Wide scale regional distribution is set to begin in early 2009 with expectations to expand nationally soon thereafter. Snow Naturally Flavored Vitamin Sodas contain no high fructose corn syrup, no caffeine, no preservatives and no artificial flavors.

Zevia Zevia, made with stevia, is an all-natural sugar-free diet soda “alternative.” Zevia is made without artificial sweeteners, artificial colors, and artificial flavors, and also has no high fructose corn syrup or phosphoric acid. Zevia launched in late 2007 with three flavors: Natural Cola, Natural Orange, and Natural Twist (lemon-lime). In April 2008, Zevia shipped the latest flavor, Natural Ginger Root Beer. High profile Zevia retailers across the country include Hannaford Supermarkets, Andronico’s, Bristol Farms, Albertson’s Southern California, QFC (Kroger NW Division), Haggen-Top Foods, Central Market in Texas, Wegman’s, Ukrop’s, and Earth Fare. Zevia is available through natural food distributors UNFI, Nature’s Best, DPI, Tree of Life, and Steiner Foods.

Dry Soda Co. For the first time since its inception, DRY Soda Co. will be unveiling two new flavors this October: Vanilla Bean and Juniper Berry. DRY’s new soda additions were created with the guidance of acclaimed chef and

Food & Wine Magazine’s “Best New Chefs in 2006” Jason Wilson of Seattle’s Crush Restaurant. At 60 calories per 12-ounce bottle, DRY Vanilla Bean is aromatic, lightly sweet and delicate without being creamy.

DRY Juniper Berry has only 55 calories, and is crisp with a pine essence and high acidity.

As with DRY’s original four flavors, kumquat, lavender, lemongrass and rhubarb, the two new flavors are all-natural and sweetened with pure cane sugar.

Global Beverage Enterprises Global Beverage Enterprises has launched Sweet Blossom, which it claims is America’s first soda made from flower petals. The soda is all natural, pasteurized and made from flower petal extracts. The sodas contain cane sugar, and the line will be featured on The Food Network’s Unwrapped with Marc Summers in December 2008. Another extension of the line is the company’s “Mr. Q-Cumber” soda. The company is using the trademark “Stop and Taste the Flowers” in its advertisements.

High Voltage Beverages LLC High Voltage Beverages LLC, manufacturer, distributor, and marketer of Volt High Energy Electrolyte Replacement Carbonated Soft Drinks and Sports Drinks, has appointed Cascadia Consulting Group’s Bill Sipper as President. Sipper has held key management positions with brands like Evian, Nantucket Nectars, Fresh Samantha, and Naked Juice.

Volt Carbonated Soft Drinks targets the Mt. Dew consumer with a high caffeine, ginseng, guarana, and taurine enhanced soda with a campaign which states, “When Dew Don’t Do it.”

Ardea Beverage Comapny Ardea, the creators of Nutrisoda, has announced an expansion into the West Coast market with its line of nutrient-enhanced, sparkling beverages. The company has entered into partnerships with several California distributors, allowing retailers throughout the state to meet the needs of consumers searching for healthy, sugar-free beverage alternatives. In Southern California, leading distributors John Lenore Company, GBL Santa Barbara Distributing and Real Soda in Real Bottles are supplying Nutrisoda to the market. In Northern California, Nutrisoda will be distributed through Superior Products and Bay Area Distributing.

OCT.08.BEVERAGESPECTRUM.37

BRAND NEWS: BOUTIQUE CSDs TeaZazz TeaZazz Sparkling Tea announced it has partnered with 5 Star Beverage Distribution Inc. and Underdog Distributors to bring TeaZazz Sparkling Tea beverages to San Diego County and Clark County. Launched in 2006 in Valencia, California by Tamara Saretsky and Delicia Soliman, TeaZazz Sparkling Tea offers the best of both worlds—a hybrid drink, that bridges the gap between the “fun” of soft drinks and the “good for you” elements of tea.

Cricket Cola Cricket Natural Beverages has added 3 new flavors to their green tea enhanced sparkling beverages lineup – Pomegranate Raspberry, Mandarin and White Peach. Complete with 2 cups of green tea in every bottle the entire Cricket line is high in antioxidants, delivers a mellow caffeine lift without the jitters, and has a refreshingly delicious taste with mainstream consumer appeal. Cricket now has national distribution in the natural and specialty food channels and a national broker network to support distribution. Cricket has secured placement in many high profile retail accounts including Whole Foods, HEB, The Fresh Market, Jewel Osco and Giant Eagle. Cricket’s refreshed packaging won Design USA best packaging award and gained Cricket recognition as a “fashion brand” in the beverage industry.

Carolina Beverage Corp.

Cheerwine is popping up this year in new cities across the nation with a completely new look and feel. The iconic 91-year-old brand has unveiled new branding, packaging and an extensive marketing campaign to support its aggressive distribution plan. Recent launches in Atlanta and Modesto, Calif., will be followed soon with rollouts in additional mid-Atlantic and west coast markets before the end of the year. Cheerwine is one of the oldest family-owned soft drink companies in the country. Carolina Beverage Corporation – which manufactures Cheerwine – has also hired top marketing and design firms to create the new identity for the brand which will roll out on all packaging, point of sale, truck backs, and bought media starting in July.

Medicus Medicus is introducing Sparka, a line of all-natural zero-calorie sparkling beverages. Sparka contains no sugar, no artificial sweeteners, and no calories. Sparka Natural

38.BEVERAGESPECTRUM.OCT.08

Drinks are flavored with the herb stevia, which makes it a healthy and satisfying drink for anyone concerned about the health implications of drinking the loads of sugar or artificial sweeteners most other beverages contain. Sparka is also enhanced with calcium and vitamin C. Sparka comes in several flavors, including Orange, Lemonade, Peach and Raspberry.

GuS Grown-up Soda completed its summer marketing blitz with its new 5.75 oz. samplesize cans of Dry Cranberry Lime. Cans were distributed in its Northeast and West Coast markets via street sampling, events and gift bags. The 2008 launch of new Dry Cola was a success as placements were gained among leading distributors and accounts. Containing real cola nut extract and cane sugar, with only 95 calories per 12 oz., GuS Dry Cola was selected among Good Morning America’s “Best 10 Products” from the 180,000 products offered at the Summer Fancy Food Show. New GuS distributors include DSD network Real Soda in Real Bottles of CA, Marz Beverage of NJ and UNFI/Rainbow Foods. Retail expansion continues with national placement in 240 SuperTarget stores and the Rocky Mountain Region of Whole Foods.

Steaz Steaz is going back to school with a big push this fall into colleges and universities across the US. The brand, which includes leading USDA Certified Organic and Fair Trade Certified Steaz Sparkling Green Teas, Steaz Energy, and new Steaz Organic Iced Teaz has gained distribution in over 40 major schools ranging from Princeton to Penn State, UCLA to Vanderbilt, filling the growing demand by the college community for healthy organic beverage options.

Fentimans Fentimans North America will begin producing UK-based Fentimans Botanically Brewed Beverages in an historic Pennsylvania brewery in November. It continues Fentimans’ time-honored (Est. 1905) recipes employing ginger root, herbs, juices and natural flavours, fermented and brewed over seven days to bring out natures goodness. Traditional sodas including Ginger Beer, Curiosity Cola, Victorian Lemonade, Mandarin & Seville Orange Jigger, Dandelion & Burdock and Shandy will now be offered in a new

BRAND NEWS: BOUTIQUE CSDs 4-pack (6/4-pk case), enhancing specialty retail distribution. Fentimans’ mixer line of Tonic Water, Ginger Beer and Curiosity Cola is offered in 125 ml bottles (24-loose tray) giving the brand further appeal in bars, restaurants and hotels. Wholesaler and retailer inquiries are welcome.

Mosse Beverage Industries Mosse Beverage Industries introduced its line of Flavored Sparkling Water Beverages to New York City in June of 2007 including White Grape, Black Grape and Coffee flavors. In May of 2008 they introduced a new package design and a new flavor – Black Cherry. Mosse can now be found in Whole Foods stores in New York and New Jersey, as well as Central Markets in Texas and independent retailers in 11 other states.

Mosse Beverage Industries is currently in negotiations to take the brand to national distribution.

Red Bull Red Bull Cola was unveiled in Las Vegas in June 2008 and is rolling into markets across the country starting in October with full national distribution expected in Q1 2009.

Red Bull Cola is available in 8.4 oz. cans in bars, restaurants and nightclubs. In grocery and convenience stores, Red Bull Cola is available in 12 oz. cans and 12 oz. 4-packs.

Thomas Kemper Soda Thomas Kemper Cane Sugar Soda will be available in single bottles to retailers. Its CSDs are sweetened with pure cane sugar and an added touch of pure Northwest honey. Thomas Kemper’s Cane Sugar Soda flavors are complex and rich. Drink slowly and savor the taste. Thomas Kemper’s Cane Sugar Soda collection comes in five familyfriendly flavors: Root Beer, Vanilla Cream, Orange Cream, Ginger Ale and Black Cherry. •

VOLUME POTENTIAL OF TRADITIONAL CSD FLAVORS + NEW AGE ATTRIBUTES (NATURAL AND FORTIFIED)

NATURALLY FLAVORED VITAMIN SODA super-popular flavors no harmful ingredients fortified with vitamins and antioxidants WWW.SNOWBEVERAGES.COM Nature makes Snow pure, we add the vitamins.

For more information: Call 212.353.3270 or email distribution@snowbeverages.com OCT.08.BEVERAGESPECTRUM.39

CATEGORY REPORT: RTD JUICE

CAN SUPERPREMIUM JUICES KEEP GROWING?

BY JEFFREY KLINEMAN There’s a real economic moment here for the juice category. For the past five years, the most important growth driver for juices has lay in the produce aisle, where high-end, super-premium juices like Odwalla, Naked, Pom, and Bolthouse have led a fresh, health-centered charge into the American shopping cart.

As a corollary to that growth, regular juices and juice drinks have been in decline. Nantucket Nectars, Snapple, even Tropicana and Minute Maid have been receding, first buffeted by the non-carb Atkins diet, then by citrus-crop decimating storms, finally by a rising tide of variety that has stolen their thunder.

Over the past five years, those high-end juices have grown at about 15 percent annually, while regular fruit juices have actually dropped a percentage point or two each year. The excitement from the health benefits, vibrant flavors and freshness, interesting new packaging and blended functionalities that include protein and vitamins led consumers to swallow these drinks higher price points. Shopping patterns played into those drinks’ increasing popularity, as supermarket shoppers, in particular, continued to spend more time in the produce-rich store perimeter, rather than head for the center store, home of shelfstable products like Welch’s.

But this year, that growth might be subjected to downward financial pressure. Suddenly, the idea of a $4 12 oz. juice might not be so appealing to the coupon-clipping consumer. And those nutritional benefits touted by so many of those super-premium products are being replicated in other food and drink categories.

Nevertheless, the strongest selling point of that category overall, its seemingly endless novelty and variety, seems to be holding steady.

With ingredients like starfruit, coffeeberry, mangosteen, aloe, and many others, there’s a powerful, ongoing influx of new products onto those chilled shelves on the supermarket perimeter. Who knows?

Perhaps the phrase “at least you still have your health” will continue to justify shelling out to maintain it. •

40.BEVERAGESPECTRUM.OCT.08

BRAND NEWS Biotta Biotta of Switzerland has announced the formation of Biotta, Inc., a wholly-owned subsidiary, to market and sell its line of organic vegetable and fruit juices in the United States. Biotta committed itself to organic production in 1951, many years before the enthusiasm for organic food really took hold. Since that time, Biotta has harvested its fruits and vegetables from healthy, living soil. The juices are 100% pure, contain no artificial additives and are never made from concentrates. The product line currently includes the following, with new line additions soon to be introduced for 2009: Beetroot, Bilberry, Breuss (Vegetable Blend), Carrot, Celery, Sauerkraut and Vegetable Cocktail.

Fuze FUZE Beverage will join the Susan G. Komen Race for the Cure Series for 2008 and 2009 as a National Series Sponsor and bring a healthy ‘infuzion’ of positive energy to the race series and the breast cancer movement.

As part of that sponsorship, FUZE’s mission of healthy hydration continues with the launch of FUZE Empower. The drink is a Pomegranate Acai Berry flavored bevearage and will be available in 18.5 fl oz. and 16.9 fl oz. pink plastic bottles. Fuze is proud to donate $650,000 to Susan G Komen for the Cure through this program.

O.N.E. O.N.E. has launched a pair of new juices, Coffee Berry and Cashew Fruit, both of which are available in 11 oz. Tetra Paks.

O.N.E. Coffee Berry is 100 percent natural and contains a similar amount of caffeine as one cup of green tea. It also is sweet thanks to a blend of fresh strawberry and Acerola purees. O.N.E. Coffee Berry retains the nutritional benefits lost in regular coffee when the beans are roasted, namely phenolic acids.

Additionally, O.N.E. Cashew Fruit is a 100 percent natural, nutritional beverage with a fresh, light, and naturally sweet tropical flavor. Made from the fruit of the cashew plant, not the nut, this Brazilian fruit is naturally fat-free and packed with Vitamin C. O.N.E. Cashew Fruit also contains important nutrients including beta-carotene, Vitamins B1, B2, & B3, calcium, and iron.

Old Orchard Brands

Fruit 66

Old Orchard Brands has introduced an interactive “Fit For Your Lifestyle” campaign for its top-selling Healthy Balance line of low-sugar fruit juice cocktails. A completely redesigned label brings calorie, carb and sugar content information prominently to the front of the bottle and an interactive healthfocused website (www.healthybalance.com) encourages dialog with a registered dietician as well as peer-to-peer discussions among those with sugar restrictive diets. The effort is supported by a national ad campaign and a robust sampling program at more than 200 Juvenile Diabetes “Walk for a Cure” events across the U.S. this fall.

Developed in consultation with school nutritionists and foodservice directors from throughout the country, Fruit 66 is a sparkling juice with fewer calories, more nutrients and just as many bubbles and taste as traditional cafeteria juices and soft drinks.

Fruit 66 is a patron sponsor of the School Nutrition Association and donates a portion of its proceeds to the School Nutrition Foundation to improve children’s health and nutrition. An 8 oz. can of Fruit 66 contains 95 calories. It also boasts 100 percent of the RDA of Vitamin C and 10 percent of the RDA of Calcium, Vitamin A and Folates.

Fruit 66 is available four flavors – Kiwi Strawberry, Fruit Punch, Orange Tangerine and Apple Berry.

Star Power Star Power is the first ever pure, premium starfruit juice. In a new initiative from the founders, Star Power has started giving complimentary cases and sponsoring events to good charities. For a recent benefit, all proceeds from cocktails went to supporting the Orphans’ Fund of 9/11. Star Power is now available at many of the more expensive retailers in and around NYC.

ALO ALO has announced the addition of two new flavors to its line of alternative drink blends infused with real aloe vera pulp. ALO Enliven crams all the good stuff from 12 fruits and vegetables with real aloe vera pulp for an energizing, healthy drink alternative.

ALO Elated combines aloe vera with brewed olive leaf tea, which is rich in anti-oxidants and a good source of energy, to provide a unique, superior drink alternative for the green tea crowd. ALO drinks are available in a 500mL as well as a 1.5L bottle and are shelf stable.

Essential Beverages Essential Beverages makes Alo Juice into seven flavors: Mango, Pomegranate, Kiwi, Grape, Cherry, Mixfruits, and Original.

It has real bits of Aloe Vera and no added sugar. Most people know about Aloe Vera for its remarkable health-enhancing properties for external application to the skin, but Aloe Vera is also packed with Vitamins, Minerals, Enzymes, and Amino Acids to boost energy and maintain proper immune function while supporting a healthy digestive system.

Glow Mama Glow Mama is leading the new maternity nutrition category with a ready-to-drink natural kiwi juice. Fortified with folic acid and other essential pre and post natal vitamins, Glow Mama is approved by the American Pregnancy Association for the important job of hydrating new moms and moms-to-be. With four grams of soluble fiber per 12 oz. bottle and only 70 calories, Glow Mama uses kiwifruit juice concentrate imported from New Zealand. Glow Mama is launching in West Coast natural grocery and maternity stores.

Firefly Tonics Firefly has created a tonic to raise the spirits.

“Recharge” combines antioxidant-packed juices with herbal extracts to boost the body’s credit-rating and raise the spirits. It’s refreshing, delicious, and comes in a swanky silver bottle – because “life’s all about silver linings.” Recharge contains fruit juices (white grape, pomegranate, plum, blood orange, rosehip), with botanical extracts and natural flavourings. No added sugar, nothing artificial.

Simply Orange Simply Orange Juice Company has launched two new premium orange juice blends, Simply Orange with Mango and Simply Orange with Pineapple. Launched August 18, both are packaged in the 59 oz. clear Simply carafe, and are available in supermarkets nationwide. Simply Orange with Mango combines orange juice with the unique sweetness of mango, while Simply Orange with Pineapple couples orange juice

OCT.08.BEVERAGESPECTRUM.41

BRAND NEWS: RTD JUICE with luscious pineapple. The juices are never concentrated, never sweetened, and made with only natural ingredients.

NBI Juiceworks NBI Juiceworks’ Drenchers has a new all natural 100 percent super juice, Heart Healthy. Heart Healthy has no fat, no cholesterol, no sugar or preservatives added and is fortified with key vitamins and minerals specifically designed for heart health. Each eight ounce serving of Heart Healthy has only 120 calories and contains two servings of fruits and vegetables. Available in shelf stable 64 oz. sizes, Drenchers Heart Healthy all natural 100 percent super juice contains Bodyguard, a fortification package of 15plus essential vitamins, nutrients, amino acids, electrolytes and herbs.

Sence SENCE Rare European Rose Nectar has launched into several international markets as well as a great many more outlets in the USA. Now found throughout Canada, France, Japan, Taiwan, Korea, Poland, Scandinavia, Australia and New Zealand, SENCE will expand its operations further into Central and South America, China, Singapore, Hong Kong and Macau by the end of Q4 2009.

Envy Envy is an all-natural 100 percent premium fruit juice packed with a little fizz. Each can provides vitamins A,C,D and Calcium, and is all-natural. Envy is available now is a lineup of five flavors including Acai Berry, Fuji Apple, Fruit Punch, Tropical Mango, and Strawberry. These could very well be the best tasting alternative to sodas and energy drinks yet!

Uncle Matt’s Uncle Matt’s Fresh, the organic produce “arm” of Uncle Matt’s Organic, has announced that the number of organic citrus growers and the amount of acreage dedicated to organic citrus that their company manages, is rising at a steady and healthy pace. The company is growing organic oranges, tangerines and grapefruit for its own juice brand, Uncle Matt’s Organic, along with providing organic fresh citrus for Uncle Matt’s Fresh.

ing artificial. It also comes in a convenient, reusable, spill-proof sippy-top container. It has BPA-free packaging, organic and reduced sugar attributes, and nutritional value and convenience. First Juice is currently available in two flavors: Apple+Carrot and Banana+Carrot.

Zola Acai Zola Açaí is having a record-breaking year, selling more in the first six months of 2008 than in all of 2007. Earlier this year, Zola introduced its line of Açaí Superfruit Juices in new re-sealable and recyclable bottles. Since the introduction of the new bottle, Zola has been authorized in 10,000 stores nationwide.

Zola’s authentic Brazilian recipe uses 100 percent unfiltered pulp from hand-harvested organic Açaí berries to deliver superior taste, while use of proprietary processing technology ensures maximum retention of nutrients.

Skylarhaley Skylarhaley has unveiled the newest flavor in its award winning line of essn beverages— sparkling mango and passion fruit juice. A blend of sweet and tropical essence, the 100 percent juice drink is packed with natural flavor and contains no preservatives, additives, or artificial sweeteners. The juice fuses the taste of ripened mango and the tartness of passion fruit. essn is the nation’s first all-natural sparkling juice beverage that combines the pure essence of exotic fruits with a light effervescence.

Embodi Embodi, the first natural, non-alcoholic juice blend beverage to provide the health benefits of red wine, becomes available nationwide in the natural and specialty grocery channels this month. Originally introduced in Whole Foods Market stores nationally in June 2008, Embodi has expanded its distribution and will also be available in Mrs. Green’s Natural Market, Fairway Market, and Westerly Natural Market amongst many other natural and specialty grocery stores. Embodi beverages are made from a specially developed grape pomace extract made from the skins, seeds, and stems of red wine grapes.

This extract is combined with organic juices and provides Embodi with the full-spectrum of red wine’s antioxidants – and resulting health benefits – without the side effects of alcohol.

First Juice First Juice organic fruit and vegetable juice beverage is the first juice for toddlers that is significantly lower in sugar and calories than traditional juice offerings, with noth42.BEVERAGESPECTRUM.OCT.08

Orchid Island Cook’s Illustrated, the nation’s prestigious publication dedicated to evaluating cooking products, recently completed a thorough

taste test of five nationally recognized brands and one family owned brand of orange juice against freshly squeezed juice made from oranges in its test kitchen. The results – Natalie’s Orchid Island Juice Company’s Gourmet Pasteurized Orange Juice beat the competition hands down and was rated the best tasting. The magazine conducted taste tests and independent laboratory tests to judge the juice closest to fresh squeezed orange juice. Cook’s Illustrated testers calculated, buying and squeezing oranges at home made the cost 23 cents per ounce – about three times the price of the winning Natalie’s Orchid Island Juice Company’s juice.

Odwalla As part of its ongoing commitment to consumers and to Mother Earth, Odwalla kicked off a unique partnership this summer with state parks in select markets across the country. Through the Odwalla Plant a Tree program, outdoor enthusiasts were invited to visit parkvisitor.com and donate trees to their preferred state. More than 60,000 trees will be planted through the 2008 program.

Due to its overwhelming success, the Plant a Tree program will be expanded in 2009.

Genesis Genesis BOOST has launched a new line of refrigerated, ready-to-drink superfruit juices to meet the growing demands from health conscious consumers everywhere. The blended exotic fruit juices, which are allnatural, with no preservatives, added sugar or sweeteners, are made of superfruits grown on wild-harvested farms in the Amazon Rainforest, French Polynesia, Southeast Asia and other pristine regions around the world.

BOOST Superfruit Juices come in a 12 oz. glass bottle and are available in four blended varieties: Beauty Boost, Youth Boost, Happy Boost, and Inner Boost. •

Sambazon Sambazon is expanding its award winning line of single serve Açaí juices by offering family sized versions of their best selling skus. The convenient 32 oz. bottles come in two great tasting flavors: “Original Blend” (Açaí lightly sweetened with pure agave) and “Antioxidant Trinity” (Açaí with blueberry and pomegranate for a triple antioxidant boost).

C on c

eptualization to Realization

SF

SOVEREIGN FLAVORS At Sovereign Flavors, “Energizing” the new age beverage category is crucial for our beverage partners. From ‘Conceptualization to Realization’, Sovereign Flavors is with you every step of the way.

With over 40 years of beverage application experience to extract upon, our beverage staff is poised to develop your ‘Energy’ drink that meets your specific requirements. Sovereign Flavors understands that finding great flavor solutions and speed of response is critical-and we pledge to be there from start to finish. It’s our promise.

Our Sovereign Promise.

phone. 714-437-1996

www.sovereignflavors.net

OCT.08.BEVERAGESPECTRUM.43

CATEGORY REPORT: DIET ENERGY

THERE’S ALWAYS DIET

BY JEFFREY KLINEMAN

BRAND NEWS HER Enterprises, Inc. Her - an energy drink with women in mind - is now available in 12-packs and 4-packs, and has gained distribution at Kowalski stores in Minnesota and Wisconsin.

We’re not all Michael Phelps.

44.BEVERAGESPECTRUM.OCT.08

The CL-ONE Corporation CL-ONE recently added the 8.3 oz. ‘Sugar Free’ to its line-up, and the product will be available in 15 states including California, New Jersey and Minnesota.

The Healthy Beverage Company Promoted this summer with bicycle and skateboard giveaways at Whole Foods, Diet Steaz is both organic and fair trade certified.

Hoborama LLC BAWLS Guarana is now the official energy drink of the National Bicycle League and the American Bicycle Association. This summer, BAWLS launched a BAWLS BMX Contest. Five percent of the proceeds of every BMX can sold will be donated to the NBL and to the ABA to support the building of new BMX tracks and racer sponsorship programs.

Elite FX Celsius recently launched Green Tea Calorie Burners. Celsius Green Tea Peach Mango and Celsius Green Tea Raspberry Acai offer the same benefits as sparkling Celsius. Each can burns up to 100 calories or more by raising metabolism over a 3-hour period, generating increased energy and alertness.

Source Beverages Sugar-Free BURN has been selling extremely well online, on par with original BURN, providing customers outside of the brand’s distribution areas with an easy and convenient way to get home-delivery.

More info at www.burnenergydrink.com.

Whey UP WheyUP, the Original Protein Drink with Energy, announced that the company is introducing a new flavor, Grape Punch.

Slump Buster Energy Slump Buster recently launched their sugar free variant, Youk’s Signature with an image of Red Sox first baseman Kevin Youkilis on the front of the can. With zero carbs, MBSB Holdings pledges to donate a portion of proceeds to Kevin Youkilis Hits For Kids charitable organization.

PHOTO BY SPEEDO

While a quick glance at the YOUR lack of Speedo is, possibly, the PHOTO leading indicator of that parHERE ticular insight, on paper, one thing we occasionally do have in common with the Olympic medalist is our Olympian energy drink consumption.

While we don’t do it every day, for sure, on occasion, we’ve all consumed about 1,000 calories of energy drinks. (Although Phelps did it – gasp – twice a day).

Still, it doesn’t necessarily take a couple of Big Gulps of Venom or Rockstar to cross into Phelps territory. With many 16-ouncers coming in near 350 or 400 calories, it isn’t too much of a stretch to imagine the gold medalist – and his now-famous 12,000-calorie per day training diet – getting matched sip for sip by some of the country’s most average desk jockeys.

Of course, those desk jockeys aren’t really hitting the lanes as much as Phelps, and that probably accounts for the continued popularity and growth of the diet energy subcategory. We all need the energy, but the dedicated energy drink consumer is coming to understand that their fuel of choice need not carry the extra calories.

The overall energy category remains strong – up 29 percent last year, according to Beverage Marketing Corp. – but with obesity concerns a constant drumbeat, reduced-calorie products may be the key to keeping things growing. While most new brands are not coming to market without a zero-calorie, artificially sweetened sub-brand, there’s more going on than just the usual aspartame/Ace K mix.

Monster and Rockstar are trying to keep calories down by throwing artificial sweeteners into their full-calorie energy juice blends. The majority of energy shots are also made without sugar, the main calorie culprit, and those that aren’t are so small that the count is well under 100. That indicates that reduced-calorie is growing in lockstep with zero calorie. Witness that recently the newly-formed Dr Pepper Snapple Group added a stake in Hydrive, an “energy water” that has minimal calories but still features some sugar in the mix.

So if there’s no clear winner in the race to find the perfect diet energy drink, remember – there’s always going to be a diet (or, at 17 percent of the category, a diet or TWO) in the mix.

Unless you’re training for, like, 19 big races. •

XO-2 Energy Beverage Corp.

The new, reformulated XO-2 boasts a 20-24 month shelf life. XO is best consumed at room temperature giving consumers choices of drier, sweeter and more aromatic blends.

Fluid Motion Beverage Inc. Fluid Motion Beverage launched in August a new sugar-free line extension to its Vixen Energy brand: Vixen Fox Lemonade. The Vixen Fox Lemonade is a pink sparkling lemonade sweetened with Splenda (Sucralose) and Ace K.

Fuze Beverage, LLC Available in Sugar-free 16oz cans, NOS can be found nationally in speed shops, grocery and convenience stores. NOS combines ingredients like Taurine, Caffeine and Ginseng to ensure extreme performance.

Ardea Beverage Nutrisoda recently released five of their most popular varieties - including Energize in 12 oz. glass bottles. With Taurine to help recharge, Energize is packed with 10 mg of the nutrient CoQ10 and the amino acids L-Tyrosine and L-Carnitine, herbs such as Ginseng and Guarana seed extract combined with B-Vitamins, and Magnesium.

Power Trip Beverages, Inc. Power Trip “0” diet energy beverage boasts great taste and no sugar, no HFCS and no carbs.

Wet Planet Beverages Jolt Ultra: Sugar Free is now available in 16 oz. resealable aluminum cap cans.

Ronin, LLC Ronin Positive Liquid Synergy, the sugar free alternative to original Ronin, now enjoys direct store distribution in Wisconsin, Minnesota in Northern Illinois as that company has 350 trucks at its disposal.

Nutrition Resource Services, Inc. Krank’d 7-in-1 Body Fuel will be available in 16.9 oz. plastic bottles with a new look. At 37 calories per serving, Krank’d will initially be available in three flavors in the plastic, followed with the production of other popular flavors and a unique new line of teas.

Brain-Twist, Inc. Slap had a heavy summer marketing & promotional calendar: we including radio spots during Mets games, and sponsorship and sampling at many NY area concerts; handball tournaments, Summerball basketball tournaments, the LI Balloon Festival and Village Voice Siren Musical festival.

OCT.08.BEVERAGESPECTRUM.45

CONVENTION SCRAPBOOK

NACS

BY JEFFREY KLINEMAN

The 2008 NACS Show took place at McCormick Place in Chicago from October 4-7, showcasing over 100 beverage companies and their brands.

Energy Shots, Enhanced Waters, and a great many supplement/drink hybrids were all wellrepresented.

BevNET’s intrepid product-spotting team picked up the following new product developments: • Energy Shots from All Day Energy; AMP; Alpha Pharmaceuticals; Intocell; Met-RX; Purple Stuff; AriZona; Shotz and NR-GIZE • Kids Beverages from In Zone and ZizZazz • New Coffees and Teas from Bustelo Cool, iCafe, and Xing Tea • Energy Drinks from Body Well Nutrition, Go Fast, Ole, Redneck Punch and Sex Drive • Powders and Fizztabs from Ephrine Plus and Peptime Energy, Guava Rush, and Wake-Up Call • Juices from Essential Aloe Juice, Nu South, • Sports Drinks from H.A.R.D. Nutrition, H7, Labrada, S-250, Sport Wave, and VPX Sports • CSDs from Health Cola and Jones Soda • Waters and Functional Waters from Goya Foods, Jana Water, Sparkletts, VBlast and Vitamin + Fiber Water

Greg Wilson and Co. representin' for Redlin,e.

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Labrada Nutrition, fit as heck!

arce 's Richarder.Pe on ti ri ut N d ar H chl and Kenna Dos 46.BEVERAGESPECTRUM.OCT.08

drink it and Muscle Milk:

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ABA NEWS VOL. 1 NO. 1

Your Bottom Line

Members Change School Beverage Landscape

ABA President and CEO Susan Neely testifies before the Senate HELP Committee on the national School Beverage Guidelines.

America’s beverage companies are committed to reducing their environmental footprint The beverage industry uses 100 percent recyclable packaging and is encouraging all consumers to enjoy their refreshing beverage, then Think Inside the Bin and recycle their empty bottle or can.

Recycling not only reduces landfill space, but the recycled material

can be used in new products like carpeting, filling for winter jackets and, of course, new beverage containers.

Companies are “going green” too.

They are lightweighting packaging, using energy efficient buildings, and adding more hybrid vehicles to their fleets.

The beverage industry is working to help reinforce with children the importance of balancing calories consumed with calories burned.

To aid in this effort, in 2006 the ABA joined with the Alliance for a Healthier Generation

to develop the national School Beverage Guidelines.

As part of that commitment, major beverage companies agreed to remove all full-calorie soft drinks, reduce portion sizes and cap calories on other beverages

sold in schools.

The results have been staggering.

In just two years, beverage calories shipped to schools have been cut 58 percent and more than 75 percent of schools are already in compliance with the Guidelines.

Neely: ‘ABA is Strong and United’

“

From the halls of Congress to Main Street, USA, the American Beverage Association and its member companies are being seen, being heard and making

ABA’s member companies have provided refreshing beverages to millions of Americans for generations.

• The industry employs nearly 220,000 people nationwide and generates more than $110

billion

for the economy each year.

Our members are some of the most widely held and most respected a difference. businesses in the world.

“

–SUSAN NEELY

Join ABA and make sure your voice is heard.

For more information, call (202) 463-6764 or visit www.ameribev.org INSIDE ABA NEWS

INTERBEV

FLY-IN

WEB SITE

BUYERS GUIDE

Largest beverage conference in North America.

Member discounts available. www.interbev.com

APRIL 29-30, 2009

Members-only site gets you access to news updates, industry stats, and fact sheets.

Members showcase their products, supplies and services online at www.ameribev.org

Washington, DC Members flock to Capitol Hill.

PROMO PARADE DOS EQUIS LAUNCHES VARIETY SHOW TOUR

CROWN ENCOURAGES PAIRING FOOD WITH BEER

Dos Equis launched “The Most Interesting Show in the World Tour,” an upscale, offbeat variety show and tour inspired by the awardwinning The Most Interesting Man in the World campaign. The MISW tour features performers from around the world, including aerial performers, Japanese robotic dancers, acrobats, fire jugglers, Russian dancers and French burlesque singers, to create a show experience worthy of its name.

The MISW made its first tour stop on Oct. 8 in San Diego and the show’s dazzling array of performers will travel to 14 cities across the country, including Los Angeles, Chicago and Austin. The incomparable Jim Rose, famed emcee of the “The Jim Rose Circus” sideshow and a man well-known for his own eccentricities, will serve as the host.

The MISW is written and produced by Randy Weiner and New York-based Weiner Entertainment Group. Weiner, creator of “The Donkey Show” and “Beacher’s Madhouse,” is a managing partner of The Box, one of New York City’s hottest performance venues.

The MISW tour will be supported by national and local print, radio, as well as regional in-market promotions.

Crown Imports’ “Beer Kitchen” program runs in off-premise accounts in September and October 2008, and draws on the popular trend of pairing beer with food.

“Beer Kitchen” features “The Art of Cooking and Pairing Food With Beer” recipe booklet, which offers recipes and beer pairing ideas that complement the Crown Imports portfolio of premium imported beers.

To supplement to program, the Crown portfolio has teamed up with food partners to offer coupons and encourage incremental grocery sales.

“Beer Kitchen” easel cards with booklet holder are available to attract consumers to Crown Imports Beer displays.

48.BEVERAGESPECTRUM.OCT.08

FANS TO CHOOSE THE NEXT ST. PAULI GIRL Fans will have their say in choosing the St. Pauli Girl for the first time ever. St. Pauli Girl, the No. 2 selling German beer in the U.S., has partnered with Maxim Magazine to give more access to the St. Pauli Girl selection process, allowing fans to vote for the new German barmaid spokesmodel.

Fans will choose from four finalists who each bring the St. Pauli Girl barmaid to life in her own way, online at maxim.com/stpauligirl. This marks the first time in the 31-year history of the

St. Pauli Girl spokesmodel that the beer has opened the selection process to the public and will let fans actually select the St. Pauli Girl.

Each of the finalists participated in a preliminary photo shoot and fans will judge each finalist on her test shots and how well each represents the spirit of St. Pauli Girl as the next spokesmodel.

Voting will run through November 10, 2008 and the new St. Pauli Girl spokesmodel will be announced in January 2009.

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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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

PROMO PARADE

HOLIDAY PROMOTIONS BEAM GIFTS Beam Global Spirits & Wine, Inc. offers consumers gift ideas and recipes this upcoming holiday season with off-premise programming that includes holiday-themed packaging and point-of-sale displays. Festive holiday packaging, recipes and point-of-sale materials help make the holiday entertaining and gifting season easier for legal purchase age consumers.

COURVOISIER COGNAC is offering a Courvoisier XO Imperial gift set, which includes a 750 ml bottle with a backgammon set enclosed in a collector’s wooden box. 750 ml bottles of Courvoisier VS comes with two stem-less Courvoisier-branded glasses and recipes on the back of the gift set. Finally 750 ml bottles of Courvoisier VSOP come packaged with a Courvoisier-branded shaker.

AMSTEL LIGHT (AND TURKEYS) Amstel Light announced a new Thanksgiving program called “Your Holiday, Your Twist” that offers consumers and retailers solutions and opportunities around the festive holiday.

The brand is offering a tiered Mail-in Rebate (MIR) (where legal) to consumers at grocery, drug and retail outlets during the month of November as consumers are stocking up for Thanksgiving. Consumers will be offered a MIR with the purchase of flowers and/or turkey and 12-packs of Amstel Light. MIR tear pads will be available on in-section and out-of-section displays and will include instructions along with recipes including fried turkey, couscous stuffing and praline pumpkin pie to help consumers put a personal twist on the standard holiday fare. Amstel Light flower wrap bags will also be available to help consumers dress up their floral gifts.

To help support the execution of the Amstel Light “Your Twist, Your Holiday” Thanksgiving program, Amstel Light is providing a range of POS and display materials that will make it easy for retailers to merchandise the program. Mega-display units, case cards, base wrap, dual-function tuck-ins and decals will be available to get shoppers attention while they peruse the beer aisle, butcher section or pass through the floral department.

JIM BEAM offers consumers a holiday gift carton with the purchase of a 750 ml bottle.

KNOB CREEK BOURBON will have a custom label available during special in-store promotions. Consumers can have a customized message printed onto this holiday-themed label.

HORNITOS TEQUILA commemorates the holidays with a gift pack that includes a 750 ml bottle of Hornitos Reposado Tequila accompanied by a flask and recipes. Hornitos is also utilizing holiday-themed danglers, case cards, table tents and napkins.

CANADIAN CLUB treats consumers to a holiday gift carton along with a “Damn Right Your Dad Drank It” 2009 calendar mail-in offer, pole topper and display.

MAKER’S MARK BOURBON offers consumers Maker’s Mark in a holiday-themed gift box.

Point-of-sale displays, including pole toppers, case cards and shelf talkers, round out holiday programming for the brand.

STARBUCKS LIQUEURS will help consumers warm up this winter with a 750 ml bottle of either Starbucks Coffee Liqueur or Starbucks Cream Liqueur and a Starbucks branded coffee mug.

50.BEVERAGESPECTRUM.OCT.08

ABSINTHE-MINDED HOLIDAY GRANDE ABSENTE Grande Absente, Absinthe Originale, is available in a unique holiday gift pack. The holiday gift pack includes a 750 ml bottle of Grande Absente, a signature hand crafted and painted cocktail glass and a one-of-a-kind absinthe spoon. Each glass is painted with the green fairy amongst the wormwood plant from which Grande Absente is made.

Grande Absente, Absinthe Originale is now available nationwide for the retail price of $70.

LUCID Viridian Spirits LLC, the owners and importers of Lucid Absinthe Supérieure, released a limited edition Holiday Gift Set. The set includes one 750 ml bottle of Lucid, two vintage style absinthe glasses and one vintage style absinthe spoon.

The holiday gift set will be available at high end liquor stores nationwide for a suggested retail price of $59.99.

Keep beer drinkers trading up to craft with ®

The best selling craft beer style variety

7 beer styles ranked in the top 50 craft sku’s.

(1)

Drove 30% of all craft growth in the past year.

(1)

Drives more trade up to craft than any other brand.

(2)

(1) IRI, Total US, Food (2) BBC Usage & Attitude Study

© 2008 THE BOSTON BEER COMPANY, BOSTON MA.