Beverage Spectrum October 2009

OCTOBER 31, 2009

MAKING THE CASE FOR

DISTRIBUTOR BRANDS Scott and Tom Lebon, XingTea makers – and New Age Beverage distribution company owners.

VITAMINWATER’S STRUGGLE FOR MOMENTUM

TALKING ABOUT TALKING RAIN TAKING SHOTS AT DIET ENERGY

GREAT 5-Hour Energy® sells

$10,000,000 $9,000,000 $8,000,000

Nielsen U.S. C-Store Scan Data 4 weeks ending July 11, 2009

$7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000

The top four selling SKUs are 5-Hour Energy.

Do your stores carry all four? ©2009 Innovation Ventures, LLC. All rights reserved.

www.5hourenergy.com

OCTOBER 2009 vol.

7 :: no. 7

Columns 4 FIRST DROP Forget Page Six – Glitzy product launches don’t mean much 6 PUBLISHERS TOAST Renewal in Vegas – Was NACS the turning point for the industry?

24 GERRY’S INSIGHTS Experience Kills – How a gaudy resumé doesn’t indicate a gauzy future

12

28 BLENDED CHANNELS Debbie Wildrick on the case for house brands – and the capacity of the belly

Departments 8 BEVSCAPE BUSINESS Major overhauls coming from PepsiCo 10 BEVSCAPE INNOVATION Simplify or die 12 CHANNEL CHECK Energy Drink numbers considered 14 NEW PRODUCTS Code Blue 2.0 48 PROMO PARADE Sam Adams gives back at the grass roots PHOTO BY ROB HAMMER

32

Features 30 BRANDS IN TRANSITION: TALKING RAIN Sunny forecast for Talking Rain 32 COVER STORY MAKING THE CASE FOR DISTRIBUTOR BRANDS How DSD houses are starting to grow their own potent product lines.

36 BATTING 10 vitaminwater struggles to regain its vitality (with brand news).

44 COVER PHOTO

By Rob Hammer Photography www.robhammerphotography.com

44 TAKING SHOTS Diet remains a weighty part of the energy category (with brand news).

Conference Beat 20 TEA TIME AT NACS Lots of new products brewing in Vegas.

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. 44 Pleasant Street, Suite 110, Watertown, MA 02472. Periodicals postage paid at Boston, MA and additional mailing offices.

POSTMASTER: Please send address changes to Beverage Spectrum Magazine, Subscriber Services, 44 Pleasant Street, Suite 110, Watertown, MA 02472

THE FIRST DROP

By Jeffrey Klineman

POSITIONING OFF PAGE SIX There are several ways to launch your brand; why take the glitzy path?

WHEN IT COMES TO THE BIG game, there’s an old saying: “Act like you’ve been there before.” It’s a piece of advice designed to help a newbie’s psyche ward off the massive challenge at hand, and also to provide a guideline for demeanor and comportment.

I’m thinking of this not because of the World Series or the NFL but rather because of the recent mania I’ve seen with product launches. In the past few years brand kickoffs have become a mess of silicon, rocket fuel, and glitz, but they haven’t been backed up the by quantifiable numbers, supply chain rationalizations or sales experience needed to move products from warehouse to truck to shelf. One just can’t help feeling that some people are in this more to appear on Page Six in the New York Post than grab six re-orders from Manhattan Beer.

Even the “soft launch” has become so brazen that we’re warned which celebutantes and DJs will be swilling vodkamixed-with-whatever and attending the party up to four months before a product is anywhere close to ready; we’re shipped empty cans in museum-worthy boxes and told about Wall Street blowhard coinvestors. But often as not, the products never match to the hype. Sure, they’re mimicking the approach of a Monster or a Rockstar – but they don’t realize that those brands didn’t launch that way, and they didn’t just grow through audacious marketing. In fact, they can do audacious because they’ve already invested in the grass roots, not just the fertilizer.

But for every three or four of these products that go with the publicity-first approach, there’s a team working out there that is acting like they’ve been there before, talking to the distributors and retailers and wise men of the business, studying shelf sets and shopper data, learning the right region and pitch for a 4.BEVERAGESPECTRUM.OCTOBER.09

product. They aren’t afraid to rip up old packaging and formulas, or even to pull stuff from the shelf and give it a quiet period before trying again with the new taste or new look.

Sometimes, they still don’t get the breakout hit, but there are plenty of worthy products that, even from a small footprint, are biding their time, showing up every year to the necessary industry events, and much more importantly, doing the tough ground work of supplying distributors and brokers with the sales support they need to make sure products move.

Still, there’s more than one way to motivate a distributor: at the recent NACS show, two contrasting – but nevertheless effective – methods were on display. At the Adina booth, John Bello was working it like the Barnum of beverages, going hoarse as he exhorted distributors to saddle up with him for one last ride to glory and gold. Selling shares of a company to distributors in exchange for their devotion is at this point a time-honored way of getting product onto the shelves, but this kind of wholesale auction in the aisles was something new. Still, while Bello might have been pushing pedal-to-medal on a relatively untested product, the simple fact that he and his veteran partners and sales organization seemed to know exactly where they wanted to go, and which distributors and retailers they wanted to go there with, served to reassure a lot of otherwise wary vets.

“Nothing is ideal, but this is as close to ideal as it gets,” said Max Lyon, who owns a distributorship in upstate New York.

They go back a long way with Bello, and the notion that they could, as he put it “build a power brand together,” seemed to be a lot more attractive to potential customers than the skin on display at

other, nearby booths.

Meanwhile, across the aisle, a growing all-natural tea brand was showing some veteran savvy of its own. He had an unflashy booth and a sales team that looked torn from Accountants’ Weekly – but there was New Leaf Tea owner Eric Skae, bringing on new accounts while shoring up relationships with existing ones. New Leaf has a strong presence in Manhattan and the rest of the Northeast, but the plain-spoken Skae feels the time has come to start flexing.

“We’re just selling a lot,” he told me.

“We were kind of the unknown, but now the unknown is becoming known. Brands don’t get built overnight.”

It’s taken Skae years of scrapping to scale up his distribution and get the company on a firm financial footing; recently, he finished doing just that, easing his debt load and grabbing the kind of operating capital he needs to take his lean operation national. He doesn’t believe in flashy rollouts or big bashes to get buzz built; nevertheless people talked about it – even those working far from New York.

“Good product,” said a distributor from Oklahoma. “We can’t get enough.”

It wouldn’t seem to be a natural fit, but New Leaf and its distributors know what works. They know that putting out a product in a confident way goes a lot further than putting a product on Page Six. “Distributors need to see you and know they’re your partners,” said Skae. “I always thought this was a step-by-step business. It’s still about price, position, and point of sale.”

Bello knows that, too. He might seem nutty in his rush to get his products on the shelves, but as always, there’s a rationale behind the madness. And if it gets him on Page Six, well, who’s to say he hasn’t been there before?

PUBLISHER’S TOAST

By Barry J. Nathanson

THE ROAD BACK YOU KNOW THOSE FABULOUS commercials, “What happens in Vegas, stays in Vegas?” I love that stuff. But in at least one instance, I don’t want it to be the case.

Barry is spreading the word about what happened in Vegas.

See, I just returned from three exhilarating days in Vegas attending the NACS show. We don’t have to rehash, in detail, what has transpired to our country and industry over the last year and a half, but we’ve all taken a hit as the economy and our financial institutions went into free fall. Investment came to a halt, dollars were tight, growth non-existent, and new initiatives were put on a back burner.

So I didn’t know what to expect when I arrived in Sin City. We’ve seen signs that our problems were easing up, but I remained skeptical. NACS would be a good litmus test to our recovery.

And having seen the show, I think the road back is running through convenience stores. At NACS, the excitement, energy and innovation blew me away. The halls were packed with retailers and distributors alike, all trying to grasp the sheer volume of new brands to assess. NACS has always been associated with new product introductions. The time of the year dictates that. But the amount of new launches, re-launches, line extensions and redesigned packaging were the most I’ve seen in many years.

6.BEVERAGESPECTRUM.OCTOBER.09

Functional beverages took the lead in this plethora of brands introduced. There are exciting new categories to explore.

Just as the launches of the 90’s lead the industry into a golden age, there’s a new generation of concepts that are generating excitement. While these new brands may never achieve the scale of the extraordinary successes we witnessed before, they will certainly become a force.

The energy shot success story continues, and they’ve added an interesting new corollary tale, relaxation drinks. Those of you who know me understand that I’m pretty high energy, but these suckers really worked. I’m surprised I got back to the show floor. We now have hangover drinks, as well, which to my eyes have the potential to change society in a way similar to penicillin! Okay, I’m getting ahead of myself, but think of the benefits. I’m pulling for them. There are also new sex enhancement drinks and shots.

Imagine the possibilities! Just don’t forget the penicillin.

The tea category took the center stage when it came to mainstream drinks. I’ve chronicled the rollercoaster ride of teas, and I’m glad that they are on the upswing, speeding into convenience through canned premium brands. They have always been a bellwether for measuring the industry, and I’m feeling a strong pulse there.

Water and all its variations were well represented, as well, with açai and other exotics serving as key additives in the latest good-for-you drinks. Some açcai growers are certainly benefiting from the prevalence of their product. Kid’s beverages were also out in force, turning into a segment that is increasingly well-served by healthful, nutritious offerings. They seem to have gotten it right.

I could go on and on about the success of NACS, and the comeback it signals for the industry. But I won’t. The work we’ve still all got to do won’t stay in Vegas, that’s for sure.

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 ASSOCIATE PUBLISHER Adam Stern astern@bevnet.com JR. DESIGNER Natalie Iknaian niknaian@bevnet.com SUBSCRIPTION INQUIRIES Adam Stern astern@bevnet.com 617-715-9679 ONLINE RENEWALS & CHANGES www.bevspectrum.com/subscribe ARTICLE REPRINTS (500 copies or more) FosteReprints 800-382-0808 x142 BEVERAGE SPECTRUM PUBLISHING INC. CHAIRMAN John F. (Jack) Craven jfcraven@bevnet.com PRESIDENT AND EDITORIAL DIRECTOR John Craven jcraven@bevnet.com EDITORIAL 44 Pleasant Street, Suite 110 Watertown, MA 02472 ph. 617-715-9670 fax 617-715-9671 ADVERTISING 1123 Broadway, Suite 210 New York, NY 10010 ph. 212-647-0501 fax 212-647-0565

BPA Worldwide Member, June 2007

Most Valuable Player meets Most Valuable Product.

Two-time National League MVP Albert Pujols knows what the power of award-winning protein does for him.

Imagine what it can do for your sales. Especially since OhYeah! was judged the 2009 Best Tasting Nutritional Shake in America by the American Masters of Taste, as well as earning the 2009 CSNews Best New Product award. To find out more, contact Wes Strickland, VP of Sales, at 888.231.2684 or hit ohyeahnutrition.com.

BB

BEVSCAPE BUSINESS • The latest news on the brands you sell.

Anheuser-Busch-Inbev-PepsiCo?

In one of the few business deals that could make The CocaCola Co. fear for their market share, PepsiCo and Anheuser-Busch have agreed to jointly purchase certain goods and services in the U.S. and set off rumors of further deals – even a potential merger.

For the moment, though, the agreement is pretty innocuous.

The two firms will share the tab on some “indirect goods and services” purchased and used primarily in the U.S. The list includes information technology hardware, office supplies, travel facilities and services, transportation and other maintenance, repair and operating supplies.

Harry Schumacher, editor of Beer Business Daily, called the agreement “like getting the benefits of a merger without the merger.”

“It will be interesting to see how these two companies... will work together,” he told Reuters, “and whether this is the first baby step toward an eventual full-on merger.”

Coke rolls out plans to help with obesity As policy makers and the public pay an increasing amount of attention to America’s obesity crisis and the beverage industry’s role in it, The Coca-Cola Co. announced a pair of initiatives designed to help consumers control their calorie intake.

The beverage giant announced a global commitment is to list calorie information on the front of all packages by the end of 2011, and also rolled out a 90-calorie can. The contents of the new can are identical to that in a 12 oz. can of coke, there’s just less of it – 7.5 ounces, to be exact.

Its announcement has induced eye-rolls among industry observers. The UK's Guardian newspaper asked if smaller Coke cans will lead to smaller Coke drinkers. The Washington Post framed the new can in terms of New Coke, and Slate.com noted that Coke's pitch for the new can resembles the promotion used for light cigarettes.

8.BEVERAGESPECTRUM.OCTOBER.09

PepsiCo to tinker with beverage brands PepsiCo executives recently told bottlers its plans to tinker with its beverage brands.

Beverage Digest, reporting from the Pepsi Bottler Meeting Sept.

21-23 in Los Angeles, described new plans for SoBe, Gatorade, Amp, canned coffee, and Sierra Mist.

The beverage giant said it may relaunch Sierra Mist as a “health and wellness platform, possibly with new sweeteners,” BD reported. The change would follow the lemon-lime soda brand’s most recent repackaging, announced just last October.

PepsiCo has recently struggled with rebranding. It watched Gatorade sales continue to slip after a much-touted packaging revamp that moved the brand’s emphasis from its lightning bolt emblem to a giant G, and pulled a new package for Tropicana Pure Premium Orange Juice after consumers objected.

The company had more success with a repackaging of SoBe Lifewater, which put the brand in a twisted bottle. That package debuted at the same time as its first three zero-calorie varieties sweetened with Purevia, a natural sweetener derived from the stevia plant. BD reported that PepsiCo will add more zero-calorie varieties to the Lifewater line, and will also transition core SoBe from its iconic glass bottles to PET. In other non-carbonated beverages, Gatorade G2 will see a reduction from its already-low 25 calories per serving. The company is also exploring zero-calorie variants of Propel, and is planning RTD coffee “value offerings” through Starbucks’ Seattle’s Best brand.

On the energy front, PepsiCo is considering an AMP juice line in PET, BD reported, and will add new sugar-free AMP flavors. The company is also planning a new energy shot to replace its recentlyscrapped AMP Energy Shot.

On core Pepsi, the company will place greater emphasis on its “performance with a purpose” theme, BD reported, and the company promised institutional support for its bottlers’ decisions.

Hugh Johnson, president of Pepsi-Cola North America Beverages, told bottlers that “When you invest, the franchise company will have your back,” BD reported. That could be good news for coconut water marketer O.N.E. World Enterprises, which recently announced an investment from the Pepsi Bottling Group.

/09

P NU

BY

9 1/0

1

SIG

Here’s to Free Milk.

Help celebrate healthy families in 2010 by giving Moms the chance to win free milk. It’s part of Building Strong Families, our January promotion, creating excitement in the dairy aisle and helping you sell more milk. Every day for 30 days, four instant winners will receive free milk for a year! And that means more nutrient-rich milk on more tables at mealtime.

To sign up or learn more, call your processor or ADA representative, or call the MilkPEP Hotline at 800-945-MILK.

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

BI

BEVSCAPE INNOVATION • Product development & marketing news

Simplify, Simplify

Seasonal Soft Drinks

As consumers have grown frustrated with food labels listing ingredients that they can’t identify – or, sometimes, even pronounce – many marketers have reduced their products’ ingredient list and signaled that shift on the front of the pack.

Put simply: simplicity is on the rise.

Datamonitor reported that, between 2005 and 2008, there has been a 64.7 percent increase in the number of new products using the words “simple” or “simply” in product or brand names. Haagen-Dazs launched an ice cream line marketed as “simply Five,” a nod to its five ingredients, and Starbucks redesigned its entire food line around keeping the ingredient list for each product small.

But the trend has appeared in beverages as well. Ready-to-drink tea marketers have long emphasized simplicity, and sparkling juice companies have taken a similar tack.

Fizzy Lizzy, in particular, boasts “No Gunk, No Junk” on its label, and coconut water firms have regularly boasted that their banner products include just one ingredient.

Craft brewers have long used seasonal beers to spice up their portfolio. Now, a craft soda firm is taking a similar tack.

Maine Root, best known for its root beer, debuted its Pumpkin Pie Soda at Natural Products Expo East in Boston. The soda uses natural cane sugar and traditional pumpkin spices and will be available through the end of the year.

Maine Root isn’t the first soft drink to employ limited-edition releases.

PepsiCo has augmented public interest in Mountain Dew by rolling out a long series of limited-time releases, including Pitch Black, Livewire, and Game Fuel, and Jones Soda famously used limited releases – in the form of holiday packs – to raise its profile.

But Maine Root’s tack differs from both of those. Jones favored often-unpalatable – and sometimes disturbingly accurate – novelty flavors, and Mountain Dew’s string of short-lived extensions have been one-offs. Maine Root president Mark Seiler said he plans to revisit his Pumpkin Pie soda next year, in the fashion of a beer company, and is working on new seasonal flavors – possibly for an announcement at Natural Products Expo West in March.

“The sales of Pumpkin pie soda have exceeded our expectations by a long shot,” Seiler said. Even before the product had completed its roll-out, Seiler was surprised by retailers’ response. Stores cleared space for the drink, he said, and at least one store has completely emptied its stock.

Given that success, it might be a smart time for beverage marketers to consider their own seasonal flavors. Retailers appear ready to listen.

What all the Twitter is about Beverage marketers know that microblogging service Twitter can be a powerful force for brand promotion, but now researchers at Penn State have quantified that potential impact. About 20 percent of all “Tweets,” those 140-charcter dispatches to the web, are brand-oriented.

The team reviewed more than 500,000 tweets, with an eye on when brands were mentioned and why.

10.BEVERAGESPECTRUM.OCTOBER.09

“Personal use is all over the board,” said Jim Jansen, associate professor of information science and technology at Penn State.

“It may be right up there with e-mail in terms of its communication impact.”

Unlike email, though, most tweets are publicly available on the web, giving brand builders a rich source of feedback on their products and promotion.

TAKE YOUR WATER

TO A HIGHER LEVEL.

DSM adds greater health appeal to enhance your functional waters.

As the world’s premier supplier of quality ingredients to the beverage industry, DSM Nutritional Products has the complete package of fortification expertise and resources to make your enhanced waters more healthful and visually appealing. For more on how we can enhance your beverages and business, go to:

See us at Supplyside West Booth # 22035.

© 2009 DSM

Quali™- Blends is a trademark of DSM.

w w w. p o u ro n t h e p ro f i t s . c o m

CC

CHANNEL CHECK • What’s hot – and what’s not – in stores now.

SPOTLIGHT CATEGORY

Energy Drinks 52 Weeks through 10/4/2009

Hmm. Maybe they’ve got a point. See, we get calls from Monster all the time about how bummed they are when IRI throws all of Red Bull’s SKUs together under one heading and then splits up the many varieties of the Hansen’s products across its rankings. Pull all together all the Monster SKUs in the top 20 and you get about $1.42 billion in sales – not that far behind the $1.85 billion that Red Bull racked up last year.

No one ever said this was an exact science, but rolling things together can be pretty revealing.

Brand

Dollar Sales

Change vs. year earlier

Red Bull

$1,856,743,000

-0.6%

Monster

$858,030,800

9.7%

Rockstar

$393,887,800

-7.3%

Monster XXL

$190,086,600

-4.7%

Java Monster

$165,850,000

-4.3%

NOS

$165,040,400

30.4%

AMP

$145,355,100

-10.4%

Doubleshot

$129,353,500

217.2%

Full Throttle

$109,851,000

-0.5%

Monster Khaos

$65,952,470

-12.1%

AMP Overdrive

$54,388,220

-10.4%

SoBe No Fear

$51,401,150

-39.4%

Full Throttle Blue Demon

$48,873,690

-20.6%

Rockstar Punched

$46,390,810

49.5%

Monster Assault

$42,164,700

-4.4%

Rockstar Roasted

$37,726,890

4.4%

Rockstar Juiced

$36,048,080

-38.8%

Venom

$32,922,030

508.0%

Monster M80

$31,907,790

-2.9%

AMP Elevate

$30,222,350

36.9%

SOURCE: Information Resouces Inc. Total food/drug/c-store/mass excluding Wal-Mart.

TOPLINE CATEGORY

VOLUME

52 Weeks through 10/4/2009

BEER $21,417,491,000

BOTTLED JUICES

-0.5%

-1.3%

$5,009,510,000

BOTTLED WATER

-6.1%

$7,566,988,000

ENERGY DRINKS $5,520,175,000

6.1%

SPORTS DRINKS

-8.1%

$3,411,415,000

TEA/COFFEE

-0.4%

$2,619,466,000 SOURCE: Information Resources Inc. Total food/drug/c-store/mass excluding Wal-Mart.

12.BEVERAGESPECTRUM.OCTOBER.09

CC

SPORTS DRINKS Brand

Gatorade

HOT! Powerade Zero Dollar Sales

Change vs. year earlier

ENERGY SHOTS Brand

HOT! Monster Hitman Dollar Sales

Change vs. year earlier

$1,232,223,000

-8.1%

5 Hour

$468,032,500

76.1%

Gatorade G2

$358,592,400

39.3%

6 Hour Power

$31,191,970

76.2%

Powerade ION4

$285,543,300

N/A

Monster Hitman

$18,785,330

34,410.4%

Powerade

$282,710,000

-51.7%

Red Bull

$14,487,260

N/A

NOS

$13,904,130

48.5%

Rockstar

$9,404,911

2,515.6% 16.2%

Gatorade Frost

$218,498,100

-8.3%

Gatorade Fierce Bring It

$113,978,200

N/A

Powerade Zero

$92,299,620

126.9%

Extreme Energy

$8,684,857

Gatorade Fierce

$90,025,570

-63.9%

AMP

$6,602,237

N/A

Gatorade Rain

$87,268,130

-67.7%

Power Rush

$3,192,310

506.3%

Gatorade Tiger

$83,907,340

-50.6%

Vital 4U Screamin Energy

$2,978,781

-7.0%

SOURCE: Information Resources Inc. Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 10/4/09

RTD TEA Brand

NOT! Gatorade Rain

HOT! AriZona Arnold Palmer Dollar Sales

Change vs. year earlier

SOURCE: Information Resources Inc. Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 10/4/09 NOT!

IMPORT BEER Brand

Screamin Energy

HOT! Dos Equis XX Dollar Sales

Change vs. year earlier

AriZona

$571,234,400

6.3%

Corona

$973,643,000

-7.4%

Lipton

$342,226,500

-6.0%

Heineken

$599,151,100

-10.5%

Snapple

$179,767,400

-5.3%

Modelo Especial

$245,707,300

12.4%

Lipton Brisk

$154,366,000

12.3%

Tecate

$190,483,900

5.4%

Lipton Pureleaf

$140,186,900

-4.2%

Corona Light

$168,948,000

-0.8%

Nestea

$115,379,800

15.0%

Heineken Light

$99,619,340

-13.6%

Diet Snapple

$102,275,100

-5.6%

Labatt Blue

$85,019,160

-0.7%

Diet Lipton

$65,164,180

18.6%

Dos Equis XX

$77,336,560

27.8%

Gold Peak

$60,904,880

21.2%

Stella Artois

$75,415,220

23.1%

AriZona Arnold Palmer

$42,745,000

152.8%

Newcastle

$72,629,840

-3.6%

SOURCE: Information Resources Inc. Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 10/4/09

BOTTLED WATER Brand

NOT! Lipton

HOT! Smartwater Dollar Sales

Change vs. year earlier

SOURCE: Information Resources Inc. Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 10/4/09 NOT!

DOMESTIC BEER Brand

Heineken Light

HOT! Keystone Light Dollar Sales

Change vs. year earlier

Private Label

$860,243,300

5.2%

Bud Light

$5,148,931,000

-0.6%

Vitaminwater

$805,922,200

-14.2%

Budweiser

$2,185,734,000

-6.2%

Aquafina

$752,707,300

-11.4%

Coors Light

$1,781,563,000

6.2%

Dasani

$684,285,600

-15.3%

Miller Lite

$1,675,370,000

-4.1%

Poland Spring

$364,081,700

-8.6%

Natural Light

$1,071,952,000

7.6%

Arrowhead

$239,125,100

-13.9%

Busch Light

$661,522,200

6.9%

Deer Park

$233,970,200

-4.8%

Busch

$617,241,000

8.3%

Nestle Pure Life

$226,909,400

26.4%

Miller High Life

$476,883,400

6.1%

Propel

$206,321,200

-28.6%

Keystone Light

$425,653,100

24.2%

Smartwater

$203,757,400

51.0%

Natural Ice

$314,742,400

10.1%

SOURCE: Information Resources Inc. Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 10/4/09

NOT! Propel

SOURCE: Information Resources Inc. Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 10/4/09

NOT! Budweiser

OCTOBER.09.BEVERAGESPECTRUM.13

NP

NEW PRODUCTS • The newest options for cooler and shelf.

CSDs Fever Tree has introduced a new Ginger Beer, a naturally brewed non-alcoholic product that contains a unique blend of the finest gingers, subtle botanical flavours and spring water.

Not too sweet on the palate and with a deep, long-lasting ginger character. With an MSRP of $5.49 per 4-pack of 200 ml bottles, this product has national distribution. For more information call Fever Tree at (212) 675-5525.

Hansen Beverage Company has launched their first set of 100 percent all-natural, guilt free sodas, Blue Sky Free. Responding to the popular demand of the natural minded consumer, Blue Sky Free is offered in five different allnatural flavors: Root Beer, Cola, Ginger Ale, Lemon Lime & Cherry Vanilla Creme.Sweetened with Truvia, Blue Sky Free prides itself on having 100 percent of its ingredients come from the earth. Blue Sky Free will be made available through natural- and health-food chains and independent retailers. It will be priced similar to other natural, premium beverage products at around $4.99 per 6-pack.

For more information, call (212) 253-7786.

JUICE Naked Juice has launched an all-new Chai Spiced Cider. Joining Naked’s Pure Juice line, Chai Spiced Cider is 100 percent apple juice plus the taste of cinnamon, ginger, nutmeg and cloves. Doing things the traditional way is never enough for Naked Juice, so this product has an aromatic blend of Indian chai spices in a bottle bursting with a tantalizing smell and taste. Every 15.2 oz. bottle of Chai Spiced Cider includes the juice of four and a half apples.

This product is all-natural and contains no added sugars or preservatives. Chai Spiced Cider is available nationwide for the suggested retail prices of $3.29 per 15.2 oz. bottle and $5.19 per 32 oz. bottle. To learn more about Chai Spiced Cider and other Naked Juice products, please call (310) 248-6148.

Hansen’s Natural has released four all-natural juice cocktails aimed at health-conscious consumers. Free of artificial flavors and colors, as well as preservatives and sweeteners, Hansen’s Natural Lo-Cal Juices have a range of unique tastes - Tropical Mangosteen, Acai Blueberry, Pomegranate Blackberry and Apple Raspberry. Sweetened with Truvia, these products have 2/3 fewer calories than 100 percent 14.BEVERAGESPECTRUM.OCTOBER.09

juices - only 40 calories per serving - with 1/3 less carbohydrates and 1/3 less natural sugar.

Hansen’s Natural Lo-Cal Juices are sold at a suggested retail price of $3.99. The product is available at fine grocers such as Ralph’s, Gelsons, Raleys, Big Y/Bozutto’s, Costco, Price Chopper and SuperValu. For additional information, please call 800.HANSENS. Zola has introduced Zola LIGHT Açaí, a low-calorie Açaí juice. Naturally sweetened with Stevia, Zola LIGHT Açaí uses the highest quality Açaí pulp available to deliver just as many antioxidants, omegas and energy as its Original Açaí Juice, but with 50 percent less sugar and nearly 50 percent fewer calories. With only 70 calories and 11 grams of sugar per serving, Zola LIGHT Açaí provides a healthy and delicious alternative for those trying to limit their calorie and sugar intake.

Zola LIGHT Açaí juice retails for $2.99 for 12 oz. It is available online through www.

DrinkZola.com and will be available at select grocery and natural foods stores nationwide starting in December 2009.

Sambazon has launched Antioxidant Elixir, an organic revitalizing beverage that provides powerful antioxidants and 600 percent DV Vitamin C, yet remains refreshingly light on calories, sugar, and contains no fat. Sweetened naturally with agave and infused with a blend of acai, acerola, and the finest organic botanical extracts, Sambazon Antioxidant Elixirs are the first products in Sambazon’s line of organic juices containing a mere 70 calories per serving. Sambazon Antioxidant Elixir will be offered in three flavors; acai berry, acai passionfruit, and acai blackberry. These will be available in 11 oz. bottles for $2.99 (MSRP) in grocery and natural food stores nationwide beginning mid-Oct. 2009. For more information, call (917) 351-8664.

SPIRITS OXLEY is a new ultra-premium gin capturing the freshest flavors of botanical ingredients to create a bright and intense tasting gin unlike any on the market. OXLEY is the first gin to use Cold Distillation with sub-zero temperatures, at approximately -5ºC, that preserve the natural essences of its ingredients, providing a true and unchanged gin drinking experience.

While Cold Distillation makes possible the fresh, bright, intense taste of OXLEY, what makes it achievable is its exclusive and small

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NP batch production. Each bottle of OXLEY is carefully bottled by hand at 47 percent ABV and then hand-wrapped with a leather tie, signifying the final seal of quality. Unlike other gins which typically use dried peels, OXLEY uses fresh, hand-peeled citrus fruits.

OXLEY is available in select bars and limited retail outlets in Los Angeles, Las Vegas, San Francisco and New York, with a suggested retail price of $50. For more information, call (310) 854-4772.

Old Forester has released this year’s expression of its Birthday Bourbon in honor of George Garvin Brown, the founder of Louisville-based Brown-Forman and Old Forester, America’s First Bottled Bourbon. Unlike the standard Old Forester, which is a blend of whisky from several different years, Birthday Bourbon is a vintage-dated bourbon, hand-selected from one specific day of production. The result is a one-of-a-kind character and flavor that will never be replicated again. Old Forester Birthday Bourbon, a Brown-Forman product, has a suggested retail price of $39.99 and is sold at most liquor stores with a wide and varied range of bourbons. The 2009 edition of Birthday Bourbon is bottled at 97 proof, to correspond with the year it was distilled, 1997.

For more information, call Brown Forman at (502) 774-7825.

ENHANCED WATERS From Urban Moonshine come Handcrafted Bitters, an organic, handcrafted contemporary version of an old world classic to stimulate digestion and mix with cocktails. These can be enjoyed as an apertif, digestif, cocktail mixer or as a remedy to settle an upset stomach or calm a hangover. Urban Moonshine offers three robust flavors of bitters to add a new twist to favorite cocktails: Original, Citrus and Maple. A very new company, Urban Moonshine products are available direct and via the urban moonshine website, as well as in Manhattan. Prices for a 2 oz. glass bottle are $11.99 and an 8.4 oz. bottle is $34.99. For more information call (207) 563-7695 or go to the company web site, www.urbanmoonshine.com.

RECOVERY DRINKS Code Blue recently re-launched in New York, Boston and online. Designed by beverage sci-

16.BEVERAGESPECTRUM.OCTOBER.09

entists, Code Blue is ideal for anyone who’s ever had a late night out, tough workout or long flight. Code Blue’s all-natural formula hydrates, replenishes, detoxifies and reduces inflammation. Low in sugar and just 40 calories per serving, Code Blue contains three times the electrolytes of the leading sports drink. Its proprietary blend of potent antioxidants includes milk thistle and N-AcetyleCysteine (NAC), which assist in detoxification by helping to combat free radicals that build up in the liver. Other key ingredients include prickly pear extract, used as an anti-inflammatory; and agave nectar, a natural sweetener with a low glycemic index and vital nutrients.

Code Blue is the first ready-to-drink beverage to contain Sustamine, an amino acid that promotes muscle hydration and electrolyte replacement, and D-Ribose to help maintain healthy energy levels in the heart and muscles.

The preservative-free formula contains high levels of vitamins B12, B6, and C, as well as potassium. Fruit extracts provide the natural blue color for this citrus-tasting beverage. The non-carbonated, caffeine-free drink is sold in a 12oz. sleek can ($2.99 MSRP) at select retail establishments, nightclubs, restaurants, hotels, gyms and spas. For more information visit www.drinkcodeblue.com.

ENHANCED WATERS Function Drinks has launched its Function: Light Weight Multipack exclusively into Sam’s Club locations in Colorado and Utah.

Function: Light Weight’s 5-calorie formula helps boost metabolism, curb sugar cravings, and support the body’s natural calorie burning abilities. The roll-out marks the first time that any of Function’s dietary supplement platforms has been available in a multipack format. Function: Light Weight employs a powerhouse formula consisting of polygonum cuspidatum (a plant rich in resveratrol), and the green tea extract, EGCG to boost and support the body’s natural calorie burning abilities, as well as gymnema extract, which supports the body in naturally curbing sugar cravings and helps maintain normal carbohydrate metabolism and control. Function: Light Weight Multipacks will include three flavors: Peach Mango, Acai Pomegranate, and Blueberry Raspberry. For further information please call (310) 725-9050.

NP ENERGY DRINKS Hiball Energy, the pioneer of clear sparkling energy water, has launched a new line of lightly sweetened, Hiball Sparkling Energy Juice drinks. All Hiball Energy beverages will now be packaged in a taller, sleeker and more elegant 10 oz. glass bottles with a custom Hiball logo twist crown finish. The new Sparkling Energy Juice drinks contain 16 grams of sugar and 70 calories per bottle. Made with purified sparkling water, natural juice concentrates, organic evaporated cane juice, taurine, guarana, ginseng, b-vitamins, and natural caffeine, Hiball Sparkling Energy Juices are available in four refreshing flavors: Orange, Wild Berry, Lemon Lime, and Cranapple. All products are completely free of preservatives. Hiball Energy is distributed through UNFI, Kehe, DPI, Nature’s Best, Haddon House, Tree of Life, Soda Express (OR), Palo Alto Egg (Nor-Cal) and Real Soda (CA). For more information, call (415) 420-4801.

Shadow Beverages and Snacks, a brand innovation and development company specializing in the functional food and beverage category,

has partnered with Ironclad Performance Wear Corporation, the leading manufacturer of premium work gloves in the US, to introduce Ironclad Energy & Hydration. Developed as a fatigue-fighting supplement with electrolyte replenishing ingredients specially formulated for the “Industrial Athlete,” the beverage is a hybrid between a sports and energy drink. Offered in three flavors, Triple Citrus, Goji Berry and sugar-free Black and Blue with Black Currant, Ironclad comes in a 16 oz. can retailing for $2.39, and is available in select U.S. markets. For more information, call (203) 904-3112.

SHOTS Alacer Corp. has introduced three new shot products under the Emergen-C brand, including the original Emergen-C Health & Energy Booster, Emergen-C Immune+ System Booster, and Emergen-C Alert! Energy & Focus Booster. The brand’s popular and best-selling flavored fizzy drink mix, Emergen-C Health & Energy Booster, will now be available in an orange-flavored 2.5 oz. shot consisting of 1,000 milligrams of vitamin C plus B vitamins,

OCTOBER.09.BEVERAGESPECTRUM.17

NP electrolytes and antioxidants to provide an energizing healthy boost. Emergen-C Immune+ and Emergen-C Alert! will also be offered in the concentrated and convenient 2.5 oz. shots as well as in flavored fizzy drink mix packets.

The Immune+ shot provides 1,000 milligrams of vitamin C, an immune-boosting blend of natural prebiotics, and a healthy dose of zinc - all of which help to support the body’s natural immune function. Emergen-C Alert! is a unique preservative-free and naturally sweetened shot consisting of green tea extract and vitamin B-12. The new Emergen-C products will hit the shelves shortly and will be priced competitively. For more information on sales and distribution, call (949) 454-3900.

METABOLISM DRINKS Funktional Beverages, Inc. has released its newest Funktional product, Red Stuff. Red Stuff with LuraLean is a hybrid sports drink that combines energy, appetite control, calorie burners and 100 percent natural GRAS fiber under the developing sector of weight management nutritional supplements. Funktional Beverages has timed the release of Red Stuff to follow one year after its Purple Stuff Pro-Relaxation beverage line of sodas and nutritional supplement shots. Red Stuff Energy beverages are red in color and are currently sold in Grape, Triple-Berry and Wild Super Fruit. Red Stuff is packaged in an 8 oz. plastic custom resealable bottle and has a suggested retail of $2.99. Case packs contain 24 bottles packaged in six resealable 4-pack display carriers. The case itself is designed ready for floor displays. For more information, call (877) 324-7657.

RTD Tea NOYU authentic Asian teas are joyful infusions of Asian fruits and freshly brewed estate grown whole tea leaves from the mountains of Taiwan. Created with a passion for healthy beverages and a taste of Asia, NOYU takes consumers on a journey to the East with refreshing innovative flavors like Mandarin Ginger Oolong, Lychee Oolong, Peach Oolong, Honey Lemon Chamomile Green and The Mellow Pomelo Green. Lightly sweetened with honey, juice and only a touch of cane sugar, they aim for the niche between the heavily sugared brands and the unsweetened teas. NOYU is available in a 500ml PET bottle in cities such as San Francisco (Chrissa 18.BEVERAGESPECTRUM.OCTOBER.09

Imports), New York City (circle KO beverages and Steiner foods), Seattle (Upstream Distributors), Honolulu (Taiyo), Philadelphia (Victory Beverages), Paris, France (Nemeco), and London, UK (A&P Trading). For more information, call NOYU at (973) 226-4856.

Sweet Leaf Tea Company has launched a new line of 16 oz. aluminum cans available in six flavors. The new offerings, which include four classic Sweet Leaf Tea flavors and two new flavors, were launched at the National Association of Convenience Store (NACS) Show in Las Vegas, Nevada. The new offerings of ready-to-drink canned iced teas are available in The Original Sweet Tea, Mint & Honey Green Tea, Peach Iced Tea, Raspberry Iced Tea and two new flavors, Lemon Iced Tea and Citrus Green Tea. All six flavors are USDA Certified Organic. The two newest flavors, Lemon Iced Tea and Citrus Green Tea, scheduled to launch January 2010, join Sweet Leaf Tea’s best-selling favorites while fulfilling consumer requests for these new selections.

Designed specifically for the convenience store channel, Sweet Leaf Tea’s 16 oz. cans have a suggested retail price of $1.29, or $0.99 on promotion. For more information, call Sweet Leaf at (512) 328-7775.

RELAXATION DRINKS Tranquila was created to calm the overextended and overworked masses that have been wound tight on energy drinks for the past decade. This product is a wellness drink based on natural, homeopathic formulas to counter stress. Unlike its rivals, Tranquila’s daytime formula contains no melatonin, so no drowsy feeling or drop in productivity. Only the nighttime blend includes the hormone—in a molecular form identical to the melatonin found in the body—mixed in a potent formula to aid in getting and staying asleep but without any morning grogginess. Tranquila comes in a 2 oz. shot. It is non-alcoholic, non-carbonated, sugar, calorie and caffeine free, needs no refrigeration and is easy to carry. Both Daytime and PM are proprietary blends of immuneenhancing vitamins, minerals and herbal extracts with a green tea-lemon flavor. For more information, call (212) 989-3646.

WINE Blue Coast Vineyards is a new wine-in-box from the Mediterranean Region of Southern

NP France. Blue Coast Vineyards’ initial offerings include Chardonnay and Merlot, two of America’s favorite grape varietals, in a striking blue, convenient, 3L box. With a suggested retail price of $21.95, this product holds the equivalent of four bottles at a value of approximately $5 per bottle. The Blue Coast Vineyards Merlot and Chardonnay are easy-to-drink, rich in flavor with low tannins and acidity – the perfect every day wine for consumers. Blue Coast Vineyards is available at retailers in New York City. For sales and other inquiries please call Blue Coast at 212-867-0073.

BEER From America’s smallest, biggest and most award-winning Jewish (and now Sideshow Freak) Beer Company, Shmaltz Brewing celebrates its 13th year of delicious beer and delicious shtick with the special release of JEWBELATION BAR MITZVAH, their 13th Chosen Beer in 13 years of Shmaltz. Brewed with 13 malts, 13 hops and soaring to 13 percent ABV, Jewbelation Bar Mitzvah is available nationally in 22 oz. bottles. This winter, HE’BREW will pit Jewbelation Bar Mitzvah along with other Chosen Beers against na-

tional holiday beer luminaries in their annual challenge “Chanukah vs. Christmas: The Battle Royale of Beers” in NYC, San Francisco, Seattle, Portland, Atlanta, Connecticut, Baltimore and additional cities to be arranged.

Designed by Shmaltz’s Art Director Matt Polacheck, Jewbelation Bar Mitzvah’s artwork incorporates consumer submitted Bar/Bat Mitzvah photos culled from Shmaltz’s recent national photo contest. For more information, call (415) 655-3431.

Inspired by consumer interest in a more flavorful light beer and the growing popularity of wheat beers, Anheuser-Busch has introduced Bud Light Golden Wheat, an unfiltered wheat brewed with citrus, a hint of coriander and the superior drinkability of Bud Light. Available nationwide, Bud Light Golden Wheat offers a light wheat-malt sweetness upon first sip, which quickly gives way to a refreshingly crisp, citrus finish. Brewed at Anheuser-Busch’s Baldwinsville, Cartersville and Fort Collins breweries, Bud Light Golden Wheat contains 118 calories, 4.1 percent alcohol by volume (also available in 3.2 percent ABW) and is available in 12 oz. glass bottles, 22 oz. single-serve bottles and draught. For more information, call Anheuser-Busch at (314) 577-7393. •

OCTOBER.09.BEVERAGESPECTRUM.19

CONVENTION SCRAPBOOK – NACS

TEA TIME IN VEGAS

BY JEFFREY KLINEMAN

oncerns that the tea category might have peaked were ground under the wheels of big business semi-trucks last week at the National Association of Convenience Stores convention, as three of the country’s largest beverage companies showed new strategies based around tea lines.

Anheuser-Busch InBev is using the tea category as a jumping off point for what the company anticipates could be a broad array of non-alcoholic beverages, all affiliated with good-timey rock star and entrepreneur Jimmy Buffett. While the sailing balladeer pulled into the Hard Rock Hotel in Las Vegas to serenade retailers at the brewer’s annual party, Bud executives – many from the recently re-jiggered 9th Street Beverage unit – tried out a siren song of their own on wholesalers and distributors.

What they were singing about were six SKUs of the all-natural Paradise Key teas, which recently rolled out in Florida and the rest of the southeast at a suggested $1.59 price point at retail for varieties like Diet Peach, Red Tea Peach, Lemon Sweet Black, Pomegranate White, Citrus Green and Tropical Black. With a national launch scheduled for next year, most of the action will be through Bud wholesalers but independents and smaller regional chains will get a shot through DSD, according to Steven Freant, the key account manager for the Southeast.

With an effective rollout will come even more products, according to former 9th Street Marketing Director Tom Burkemper, who is now part of the national sales organization for the larger company. Burkemper said that 9th Street hasn’t been abandoned, but has changed its orientation.

“We’ll be looking at major partnerships, and have a focus on those brands that have long-term staying power rather than niches,” which comprised much of 9th Street’s origi-

20.BEVERAGESPECTRUM.OCTOBER.09

nal focus, Burkemper said. The small “innovation shop” had the key role in developing Paradise Key, which could eventually include lemonade, coconut water, even CSDs, according to Burkemper.

“Once a brand is established, it’s a lot easier to do a big rollout,” he said.

Another established brand looking for a big rollout is Hansen’s, which produced its first samples of its value-oriented 23.5-oz.

Peace Tea for the masses at NACS. In a move designed to rein in category leader AriZona’s dominance in the big can line, Hansen’s will attempt to get the four-SKU line into the Coca-Cola system that is already distributing category volume leader Monster Energy. It should be noted that the cans were so new they weren’t on display in the CocaCola booth just a stone’s throw from the traditional Monster show of skin and latex – although Coke’s better-known tea partner, Honest Tea, did have a small tasting shelf at the mother ship.

“Somebody should be in that space,” said Geoff Bremmer, the brand manager for Monster, explaining the rationale behind Peace Tea as an instant competitor to AriZona. The four sucralose and cane sugarsweetened SKUs – Green Tea, Sweet Lemon Tea, Imported Ceylon, and Razzleberry – all carry a huge peace symbol, hippie imagery, and, more important from a distribution and competition point of view, a big old $ .99 pre-pricing label right on the can.

So what was bringing out all this tea competition? Marketers see opportunity to once again leverage its high-end feel and healthy aura, but they also see that, of late, tea is simply what consumers seem to want.

“Of every category in beverages in the past 52 weeks, only two have really grown,” said David Smith, the co-founder of Sweet Leaf Tea, which displayed four big cans of its own, 16 oz. versions of its established Original, Raspberry, Peach and Mint & Honey

flavors geared toward the convenience market. With a big partner in Nestle Waters North America now on board through a minority ownership and distribution arrangement the idea is to make the brand “more affordable and more available” to the general public, Smith said.

Sweet Leaf’s involvement with Nestle has given Smith and co-founder Clayton Christopher newfound confidence in the strength of their brand, he said – mostly because the pair now have information on product development and reach that they’ve never had the opportunity to see before.

“It’s a big learning curve, but the data makes you a lot more comfortable with the decisions that we used to really agonize over in the past,” he said.

But the company won’t be doing drop shipments a la the Nestle Waters system itself anytime soon, Smith added.

“We’re committed to a DSD network,” he said. “We want to control who we are and where we are.”

Meanwhile, three other tea companies appeared poised for new directions at the show, as well. Lots of chatter centered around fast growing all-natural players New Leaf and Xing Tea, while Dr Pepper/Snapple Group displayed three pre-priced, 79-cent, 16 oz. cans of cold-filled Snapple tea. With Xing passing 40 states in distribution and New Leaf aiming to hit all 50 in the next 18 months, the stream of strong brands onto the trails blazed by Honest Tea and AriZona seems to be generally moving the category away from cold-fill stalwarts like Nestea and Lipton, neither of which were featured prominently in Coke’s or Pepsi’s displays.

“We’re just plain selling a lot,” said New Leaf CEO Eric Skae. “We were kind of the unknown, but now I’ve gotten a lot further than most guys on a lot less money.”

CONVENTION SCRAPBOOK – NACS

NEW PRODUCT SIGHTINGS WHILE THE RUSH OF ENERGY DRINKS seems to be receding, other functions were on the rise at last week’s National Association of Convenience Stores (NACS) Show.

BevNET spotted two major functional trends that have picked up speed since last year: relaxation drinks and shots and drinks and shots offering hangover relief when ingested before or after drinking alcohol. Additionally, a few products in shot bottles claimed to abet sexual enhancement in one form or another.

In more mainstream beverage categories, a number of new teas are coming out, including new lines introduced by both Anheuser-Busch InBev and Hansen’s, while Sweet Leaf is entering much wider distribution through its alliance with Nestle Waters North America.

On the re-launch front, there were two major product lines that were refreshed or restaged completely. Function Drinks, which started fast out of the gate two years ago but has since stumbled in its attempts to build a national brand, has retreated to seven SKUs spread across three platforms: Urban Detox (Goji Berry and Citrus Prickly Pear); Light Weight (Acai Pomegranate, Blueberry Raspberry and Peach Mango) and Alternative Energy (Citrus Yuzu and Strawberry Guava). All are being marketed with labels that prominently feature the phrase “dietary supplement.” According to

22.BEVERAGESPECTRUM.OCTOBER.09

Dayton Miller, Function’s president, “We like the idea of taking the dietary supplement into the beverage aisle.”

With a new, more distinctive bottle and a label that highlights each platform’s functionality all the way around the bottle, the brand is being reengineered to make functions much more readily recognizable.

“It took too long for people to understand what each drink was about,” Miller admitted.

Distributors, who had caught a glimpse of the new packaging before NACS, have expressed enthusiasm to BevNET. Meanwhile, the Coca-Cola Co. rolled out a major restaging of its own in-house brand of energy drink, Full Throttle. With a cleaner look and fewer odd “energy” ingredients, Full Throttle has three traditional CSD flavors along with a Zero and a three-SKU coffee/energy line. The core brand has been dubbed “Full Throttle Black,” “Full Throttle Acai” (nee Blue Demon) and “Full Throttle Red” (formerly Fury). Gone are guarana and taurine, but in its place is an extra shot of caffeine, taking it up to about 100 mg per serving.

Although Full Throttle’s new line featured a cleaner look, it was derided by at least one wag as “Coke’s new private label” energy drink.

For a full list of the new products spotted at NACS, please go to www.bevnet.com.

MY K I D W A FRUIT 66N! TS

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Kids buy Fruit 66 at school, and until now that’s the only place they could get it.

Please carry Fruit 66 in your retail stores so we can tell parents where to buy it.

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By Gerry Khermouch

GERRY’S INSIGHTS

OVER-EXPERIENCED? How big name hires can have bigtime flaws.

IT WAS A MINOR MOMENT IN A Connecticut courtroom a few years ago, but it still spotlights a cultural gap of acute relevance in the innovation wars.

A small Snapple distributor, B&E Juice, was suing Coca-Cola Co. over the transition of Glaceau brands to the bottler system. Coke’s lawyer asked B&E’s owner, Mitch Clyne, to identify the giant placard he’d just maneuvered forward as his latest exhibit.

Clyne confirmed it was a blow-up of his business card -- which showed the logo of Snapple, another brand Clyne carried, and not Vitaminwater.

“The same business card you’ve had for 15 years?” the lawyer asked.

“I think I bought 500 in ’92,” was Clyne’s reply.

Well, what more visible way could Coke’s attorneys use to impeach Clyne’s commitment to Vitaminwater, whose departure he claimed he couldn’t survive?

“And you haven’t made any attempt in the last two-and-a-half to three years to go get new business cards to evidence the brand that drives your warehouse, right?” the attorney pressed.

Clyne shrugged. “I still have some left in the old box,” he said.

Though it was an insignificant part of the trial (B&E didn’t win – though it seems to have continued to prosper), the exchange plumbed the divide between Coke-sized companies and agile entrepreneurs. To big companies hung up on process and the trappings of office, it’s inconceivable that the owner of a reputable distributorship wouldn’t constantly update his business cards. Smaller companies – distributors, startup beverage companies, retailers, whomever – have more pressing things on their mind, like keeping their trucks rolling and meeting payroll.

This all came back to me a few weeks ago when BusinessWeek ran a piece about the companies – like Coca-Cola, Oracle and Intel – whose employees headhunters avoid. In Coke’s case, recruiters have 24.BEVERAGESPECTRUM.OCTOBER.09

concluded, “that the very attributes that make Coke a great company—an iconic brand and an unmatched global distribution system—also make it too easy for young managers to rise without having to develop the entrepreneurial skills necessary to compete in other arenas.”

BusinessWeek focused on Coke execs who left for other big companies, but I think the warning applies even more to those moving to emerging brands. It’s unfair to single out Coke, though. I often caution entrepreneurs shopping for executive talent not to be too dazzled by the resumes of veterans of any of the big players.

No question, there are exceptions. I could name several big company expats who have carved out productive roles running or advising emerging companies. But way more have spent too much time moving cases, appeasing the whims of major retailers, mired in bureaucratic processes.

Claims of intimate familiarity with distribution ultimately mean knowing just a single DSD channel, making it hard to make the agnostic choices among independents, bottlers, beer houses, and other options that small brands must weave together to get to market. Worse, they’re disinclined to seek advice, even from those who’ve spent their careers with startup brands. They may know their way around the headquarters and distribution centers of major grocery chains, but it might be quite some time since they’ve set foot in a small mom-and-pop or a natural food store. They’ve had little reason to be attentive to new brands or trends, or to operate nimbly and efficiently. Worst of all, though they may win the job claiming to revere premium brands, they seem to have been programmed to hit the price button at the first sign of retailer resistance.

These habits can be betrayed in subtle ways. A couple of years ago, for instance, the assistant of a big-company vet who’d just joined an emerging brand phoned to say her boss wanted my opinion on the

best trade shows. Sure thing, I said, put your boss on the line. The assistant mentioned a date about three weeks out. “Can I put you down for 10:15?” she asked.

Obviously, I wasn’t surprised when I started hearing employees at the company complain of creeping bureaucracy, micromanagement and other issues that can be toxic to a young firm.

Pardon my high horse: the problem isn’t unique to beverages. In years past, at national trade weeklies, my colleagues and I were charmed into hiring veterans of bigcity dailies, only to find out the hard way that they were unequipped to aggressively work a beat for a scrappy trade paper.

They endlessly complained about resources or calls that weren’t always returned.

They seemed disinclined to learn the intricacies of the businesses they covered; they were a lot less fun, after all, than the city hall or crime beats of their glory days. In contrast, my superstar reporters inevitably emerged from other trades, small dailies and alternative weeklies.

The bottom line; Beverage entrepreneurs need to be careful to weigh the broad experience, name value and great retail chain connections of big-company veterans against their ingrained bad habits. And retailers shouldn’t mistake polish and organization for the drive and resourcefulness needed to make a new brand succeed. Again, some big-company execs are able to make the transition smoothly; I’d name some in this space if I didn’t fear alienating all those I don’t. We’re not dealing with a chasm on the order of, say, Martian men versus Venutian women. But it’s a chasm nevertheless, and it can swallow otherwise promising young companies whole.

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

Precision Formulations introduces an all new product shot!

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We are proud to announce our new capability to manufacture a shot size 2.5oz hot fill PET bottle, without the use of preservatives. Until now the “shot” products are filled with preservatives to maintain freshness and cold filled. With the introduction of a smaller 2.5 hot fill PET bottle, Precision Formulations can take your “all natural” liquid formula and fill into the smaller size format. These containers are easy to store, great for sampling programs and travel sized products.

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By Debbie Wildrick

BLENDED CHANNELS

DEVELOPING THE NEXT WINNER IN OUR BUSINESS, IT’S GOOD to always think about volume.

I remember years ago when John Antioco left 7-Eleven to go run Circle K. He’s a great speaker and a really funny guy and he’s up on stage at their annual conference asking the audience, “how big can a Big Gulp get?”

Compared to the much smaller size of the bladder, he wondered, could we really handle that much liquid in our collective stomachs?

I thought about that while I was at 7-Eleven managing beverages. I continually asked the big guys, “is the share of stomach increasing or are consumers drinking more variety?” (By they way, they didn’t know).

Beverage sales kept climbing; new categories were being developed. Energy drinks went from one shelf to a door.

How far was up?

Okay, fast forward to 2009. It happens.

Beverages come to a screeching halt. Nearly every segment is down and those that we felt wouldn’t ever suffer have. LRB’s are down year ending 2008 for the first time since 2003. Predictions say that 2009 will end showing another, albeit slighter, decline.

What does this all mean? It means that the belly is full and making the right decisions is even more important. Don’t just listen to me, though: the New York Times ran an article in early October showing that there has been an aggressive shift to warehouse stores. Whether we’re grocery and recognize that the consumer makes those trips at the expense of our sales, or we’re convenience mom-and-pops using these outlets for inventory purchases, we know that warehouses are a big factor in channel blurring. The Times reported that warehouse channel growth ‘outstripped’ other sectors as consumers saved money with bulk purchases. Wal-Mart has been reporting sales increases, and Target is revisiting their strategy as it relates to value.

So, how do we make decisions? I’m sure I’m speaking to the choir when I say that product assortment is the key. I 28.BEVERAGESPECTRUM.OCTOBER.09

brought this up last time when I had reported that retailers are cleaning up their assortments. Certainly raising the minimum sales requirement by category for staying on the shelf can help boost sales.

You continue to make space available for items with high sales volume, new trends, all the while with an eye toward enhancing your value categories.

For example, even as things decline overall, two trends we know well still seem to be maintaining their momentum: private label and functional beverages seem to have the most momentum right now.

Especially, private label and store brands have continued to increase their share of category sales. As it stands now, it seems, developing a good private label strategy is a great choice – if it involves something more than simply copying the leader and putting it on the shelf. Safeway, for example, has been so successful with their O Organics line that they’ll be selling it to other retailers. Talk about thinking outside the box. Safeway opens up a totally new profit center with an idea like this. It’s a smaller growth center in convenience stores, as private label’s share of c-store dollar sales is 1.5 percent (up 4 percent), but that hasn’t stopped this channel from aggressively pursuing it, and with the success I’ve already seen, it’s paying off. I am blown away by 7-Eleven’s new chips and snack foods line.

In a recent interview, a pair of Las Vegas franchisees said that 8 of the 10 chips they sold were 7-Select brand chips. AM/PM has likewise developed private label bottled water, alternative beverages and snacks. While water seems to be a great start for many c-store retailers, there are chains across the country that are quickly expanding into other categories.

But if you’re a retailer, you shouldn’t just jump in with your eyes closed. Some of the biggest mistakes you could make would be introducing a brand without marketing, being in-effective with packaging, or failure to develop a clear strategy setting very specific sales and margin goals. In other

words, treat a private label line like its own entrepreneurial business venture, but make sure it will also ultimately fit in with your category goals – otherwise, you might end up like one retailer I met with last week, who mentioned that sales of private label in one of their key beverage categories had been so successful that it’s now commanding more and more shelf space and pushing out key items with higher register rings.

Establish your strategy and verify its effectiveness to the bottom line.

Secondly, functional beverages and drinks continue to offer clear differentiation against the downward trend. Example? The new category ‘value added waters’ had an increase of 33.9 percent ending 2008, while other beverages lost ground. But, bigger than that, the consumer is asking for their food and beverages to work for them. We saw superfruits become an everyday term shortly after POM Wonderful effectively marketed the idea of drinkable antioxidants to consumers. It’s a race to find the next big functional fruit. I am also seeing relaxation products really start to explode. Is it just a bunch of new products, or is it really meeting a consumer need? Mellow Water introduced both a day and night product and I hear from a friend they are having a great launch. Dr Pepper/Snapple distribution doesn’t hurt – combine the right product and marketing with distribution and it’s on the road to success.

Private label and differentiation may not be new news to you experts in the industry.

Just recognize that making decisions that will drive sales and developing the ‘next winner’ is the name of the game!

Debbie Wildrick, the SVP of Sales and Marketing for Equa Water Corporation, is a sales executive and channel strategy specialist in the CPG industry. The former Senior Director of Vault and Proprietary Beverages at 7-Eleven, Inc., she has extensive experience in retailer, supplier, and technology aspects of the consumer packaged goods business.

0301 Š2009 BSNŽ These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease.

BRANDS IN TRANSITION

TALKING RAIN

HERE COMES THE RAIN Regional giant Talking Rain has hired a veteran executive to help build its brands nationally.

by Matt Casey WHEN TALKING RAIN BEVERAGE Co. decided it was ready to truck its regional offerings into national accounts, they decided their convoy needed a lead driver who had plenty of experience with fuel – well, a fuelthemed beverage anyway.

Bill Meissner, who took over as president of Talking Rain in March, traces his pedigree through SoBe and contributed to the creation of a now-iconic bottle for FUZE’s biggest success, NOS Energy Drink. FUZE introduced the licensed drink in a blue PET with a plastic orange nozzle topper that made each package a miniature imposter of NOS nitrous oxide tanks. The gear head community loved it, and it made NOS – and, by extension, FUZE – the sleeper hit of Coke’s recent bolt-on acquisitions.

That kind of experience, said Talking Rain CEO Doug McLean, made Meissner a great candidate to lead the company’s charge onto the national scene.

“He has been very instrumental in helping us expand our brand image,” McLean said.

MacLean’s company shares traits with big beverage companies as well as the emerging independents where Meissner made his name. In the Pacific Northwest, it stands tall: Meissner said Talking Rain products even outsell Coke and Pepsi products on Microsoft’s Redmond, Wash. campus. But the company and its brands – a fruit-based CSD called Sparkling ICE, an enhanced water called twist, and a sports drink called ActiVwater – remain unknown in many parts of the country. Talking Rain’s owners want to change that, McLean said, and aim to expand the company’s brands into regions where it can’t lean on decades of history to back each distribution agreement, store display and sale.

The key to achieving that expansion, Meissner said, is sampling. Because Ice and ActiVwater are competing in the long-mature

30.BEVERAGESPECTRUM.OCTOBER.09

CSD and sports drink categories, while Twist is competing in the newer world of enhanced waters, he said it will be ineffective to drive trial by discounting. Coke and Pepsi already have vitaminwater and SoBe Lifewater on near-constant 10 for $10 deals, and price promotions have a long history of short success against Gatorade and Powerade, which own a combined 99 percent of their category. So, Meissner said, Talking Rain is building its brands that old-fashioned way: showing up with pallets of product at brandappropriate events and handing out free drinks.

He’s also relying on another old trick: recruiting market influencers. He’s positioned ActiVwater on a pending reality TV series called “The Making of a Champion,” to premier on NBC in January, and signed a contract to place the brand at Elite Athletics in Southern California.

The training facility boasts eight of this year’s NFL Talking Rain has styled twist and ActiV as the twin spearheads of starting running backs its national push. as alumni, and Meissner Rain – particularly ActiVwater – after the said the partnership has already led to some company donated product to several King impressive word of mouth.

Crossfit events. On his own initiative, Velasco “All of a sudden we’re getting calls from said, he has urged other Crossfit facilities to NFL athletes that want to have the prodcarry Talking Rain products. Its all-natural uct,” Meissner said. positioning and low sugar content, he said, Meissner has also sought out other, less meshes well with the sport’s nutritional well-known sports as well, like the cultish philosophy of consuming as few sugars and Crossfit community (Crossfit is a high-intenartificial ingredients as possible. sity workout known for a tendency to cause On top of wooing both consumers and its acolytes to see “Pukey the Clown” midinfluencers, Meissner has used distribuworkout). Allen Velasco, a co-owner and tor education to make sure Talking Rain trainer at Renton Wash.-based King Crossfit, products are properly positioned in retail said he became an advocate for Talking

settings. More than 100 of the company’s distributors deal primarily in beer, wine and spirits, Meissner said, and the company has made it a core part of its strategy to bring NA insights and experience to its wholesalers and distributors.

“They re-taught us selling 101,” said Robert Williams, innovative brand manager at Eagle Rock distributing in Georgia.

Williams said his salesmen know how to sell beer: they build a floor display in the most prominent position in the store. But he found that strategy less effective for selling non-alcoholic beverages. To goose the distributor’s non-alcoholic sales expertise, he said, Talking Rain sent personnel to demonstrate other promotion methods and more effective in-store plcaements. Williams said Talking Rain also sent as many as nine people at a time to help Eagle Rock sell its products, and added that the company has had a representative available to answer his questions at all times – even on weekends.

“I kind of put them above everybody else and hope everybody else can meet their standards,” Williams said.

Eagle Rock carries all three of Talking Rain’s national brands, but Meissner said his

immediate national plan doesn’t strictly call for that. While Talking Rain is pushing ActiV and Twist for blanket national distribution as soon as possible, the company has a separate plan for Sparkling Ice. Meissner said he plans to build Sparkling Ice from its home turf and expand out into contiguous territory until – eventually – the brand covers the entire U.S. As Talking Rain continues its national push, Meissner said it will stick with its current three national brands – though it will experiment with sub-brands. Nationally, Talking Rain has already released four flavors of Twist that differ from their predecessors by bearing a “certified organic” seal, and the company is also marketing four functional SKUs in the Northwest called Twist Fusion. For ActiV, Meissner said, the company is planning a protein drink subline currently called ActiVpro.

Aside from sub-brands and territory, Meissner said not much about the company is likely to change in the near future. Unlike the brands he’s worked for before, Talking Rain doesn’t have the need for or intention to attract capital from outside investors.

“This company has been in business for more than 21 years and does not have a

defined drive to exit,” he said.

The goal, he said, is profitable growth fueled by its own revenues. Short of that, he said, Talking Rain’s first call for a cash infusion would be its owners – who have investments in a portfolio of companies that range from software firms, commercial buildings, residential developments and hotels, like Hotel 1000 in Seattle. Meissner said the owners “act in many ways as a private equity partner.” But, if the company did have to reach out to another funding source, Meissner said, it would favor those with “experience in the CPG space and could bring more to the table than just dollars.”

For industry insiders and beverage retailers, that makes Talking Rain an unusual force. The company is two-decades stable, pushing its brands as national, mainstream products, and not interested in contorting through the kind of private equity buyouts that often end with integration into Coca-Cola, PepsiCo or Dr Pepper Snapple Group. To an extent, Talking Rain’s chief innovation may be its efforts to shape itself as a permanent national player in the model of those that came before it. •

OCTOBER.09.BEVERAGESPECTRUM.31

BY MATT CASEY 32.BEVERAGESPECTRUM.OCTOBER.09

PHOTO BY ROB HAMMER PHOTOGRAPHY

MAKING THE CASE FOR DISTRIBUTOR BRANDS

TOM and SCOTT LEBON, president and vice-president/ CEO of New Age Beverages, have done a lot of work for PepsiCo and The Coca-Cola Co. – much of it unplanned.

The Denver-based distributors have invested their time, money and sweat into a host of independent beverage brands.

More than once they’ve painted and plastered insignias onto their trucks and helped salesmen roll in coolers and shelftalkers, only to have to repaint the trucks and roll the coolers back out once the owners jump at the big dollars dangled by a Coke or a Pepsi. The buyout clauses and shares purchased early in the game can keep a distributor going for a while, but in the end there’s still a hole in the portfolio and a long slog until they’ve built the next great brand.

It’s quite a roster.

“We lost Monster, Rockstar,” says Scott Lebon, the older of the Lebon brothers. “We lost vitaminwater, Fuze. We lost NOS. We needed something we could rely on a little bit.”

A few years ago, the Lebon brothers – with the help of Dan Carney, the founder of Pizza Hut -- decided they had had enough, and decided to paint their trucks with something entirely new, something that the owners couldn’t take away from New Age to sell to Coke or Pepsi because New Age was the owner itself. That new thing was Xing Tea. Xing, which is a big-can, all-natural, sugar-sweetened green tea, is approaching its third full year on the market and nearing full, national distribution – almost entirely through independent distributors like the Lebons themselves. The Lebons created Xing as both a hedge against the loss of brands to the Red and Blue systems and as an entrepreneurial play. They wanted a tea they could stock in every channel they serviced, from natural food stores to gas station mini-marts, and nothing they had access to fit the bill. So, after two years of honing the flavor, price-point and graphics, they tested Xing in their own territory. Within three months of its February, 2007 debut, the Lebons said, their sales figured convinced them that they had crafted a strong enough brand to start calling distributors outside their home state of Colorado. Now, they ship Xing to more than 40 states.

The Lebons aren’t the only ones. Stung by the fleeting nature

of modern entrepreneurial beverage brands, a number of clever distributors have applied their own industry know-how to creating distinctive brands that can’t suddenly get sucked into the Red or Blue systems. In New England, Polar Beverages, long a seller of independent brands but also the maker of regional CSDs and tonics, has recently started marketing its own value tea brand, Black Jack, and also a high-end licensed play, Goslings Ginger Beer. In Illinois, Folsom Distributing went into energy shots with Blutonium. In the Bay Area, Nor-Cal Beverages created Go Girl and Molotov energy drinks, while in Southern California, Coast Beverage Group created PRE Probiotic Enhancer Juice. Taken as a group, these brands represent an emerging trend in the independent beverage market: beverage brands built by experienced beverage distributors who try to pour their industry knowledge into making same kinds of brands they’ve supported for decades.

Of course, neither the Lebons nor their peers can claim to be the first distributors to launch a beverage brand. The best known, AriZona, was started by veteran distributing partners John Ferolito and Don Vultaggio. Jones Soda came out of Peter Van Stolk’s distributorship in the Pacific Northwest. But this new crop of distributor brands emerges during a different era.

Independent distributors, crushed by the high-profile departures of the Coke and Pepsi acquisitions mentioned earlier, are under pressure to break the costly cycle that constantly finds them building brands only to lose them.

“If there wasn’t any independent distributors, there would be no Monster, no vitaminwater,” says Scott Lebon.

The Lebons and their peers hold fast to the idea that independent distributors are good for the beverage business. So in building their brands, they have clung to the DSD system, to the point where they’ve steered clear of warehouse shipments even when dealing with large retailers like Costco. They say they’ve rejected contracts with national chains that couldn’t be OCTOBER.09.BEVERAGESPECTRUM.33

AN INSTANT HIT WITH THE COASTAL CROWD, POLAR’S ALLIANCE WITH THE GOSLING’S RUM BRAND WAS JUST ONE EXAMPLE OF A SHREWD MOVE

BY A VETERAN DSD HOUSE. fully served through their DSD network – though they add that they’ll talk to those chains again when their network can handle coast-to-coast coverage.

Their decision to use only DSD houses, Tom Lebon says, is as practical as it is philosophical: they believe they share a common language with other distributors.

“It gives us the advantage that we know where they’re coming from,” he said.

Satwan Gill, president of 5 Star Beverage, agreed. The San Diego-based distributor has carried both Xing Tea and Coast Beverages’ PRE, and Gill said he had a positive experience bringing both into his system. PRE later left due to a supplier issue, he said, but he said both companies understood what they were doing so well that he’s now more likely to be interested in a brand created by a distributor than one created by an independent entrepreneur.

“They understand our needs,” he said. “They understand what it will take for us to be successful and for the brand to be successful.”

Those needs included both marketing support and sales numbers. As distributors, Gill added, New Age and Coast were able to show him familiar sales comparisons. While uncertainty about sales numbers has traditionally gone up and down the distribution chain, by shipping Xing through their own trucks, the Lebons say they get instant feedback on sales and pull-through, as well as observations from their salesmen in the field.

Despite those advantages, they said they’d caution other distributors before they get into the brand-building game. Even with their combined 40 years of brand-building experience, they said, building a beverage brand is still a high-risk proposition with a lot of obstacles – the biggest of which, is money.

“To start a brand, it costs millions of dollars,” said Tom. “If it doesn’t work, you just lost a couple million dollars.” Scott added that a company pushing a new brand can easily spend $1 million just on coolers. Other distributors-turned-brand-builders echoed the same concern. Bob Groux, President of Coast Beverage Group said launching a brand in southern California – never mind nationally – costs no less than $1 million.

To help them fund their plan, the Lebons partnered with Pizza Hut founder Carney, who adds both experience and ambition. Carney says he is focused on building XingTea like he did his earlier venture – as a brand that not only sells in the US but all across the world. “It’s not for the faint of heart or the short on cash,” he said.

34.BEVERAGESPECTRUM.OCTOBER.09

Scale also presents an issue. Even as distributors – an organization with a history and a reputation in the beverage business – the Lebons struggled with minimum order sizes and bulk discounts when dealing with suppliers on Xing. It’s hard to compete with Coke and Pepsi when economies of scale mean those companies pay half of what the smaller guys fork over for materials.

But as a brand grows, the back-end costs come down.

While brand creation may be a dangerous game, several distributors that have succeeded at creating their own brands have, or plan to, roll the dice again.

Nor-Cal Beverages, for example, is readying a second entry into the energy category, according to Gordon Guzenski, the company’s director of business and brand development. The company’s initial entry into brand creation was something of a fluke, he said, the result of a packaging line installed to fill a contract that fell flat. Guzenski and his family-owned distributorship created Go Girl in part to fill unused capacity, but they did so with ambitions of also pushing the brand to national distribution. Four years later, Nor-Cal ships Go Girl to eight states. Building an energy brand, he said, was a tougher slog than he expected, but he still considers Go Girl a success. And he wants to do it again, launching Molotov, a latin-themed energy drink brand, this month.

While it took Nor-Cal four years to ready its second salvo at brand creation, Polar launched its second entrepreneurial brand less than two years after its first. The company introduced Black Jack Tea in early 2008 to capitalize on a pair of trends: the then-strong growth of tea brands and drinks in big cans. Polar initially targeted the brand for local distribution in the Boston area, but renowned New York-based independent distributor Big Geyser has since brought the pirate-themed line to New York City. Even before Polar finalized that deal, though, it had launched its second house-created brand, Gosling’s Ginger Beer, in partnership with Gosling’s Rum. If Polar and Nor-Cal are buying back in, Groux’s Coast Beverage Group is doubling down. The company’s PRE probiotic juice drink is just now moving out of its earliest stages of brand building, Groux said. He expects to spend years building the brand to its full height, he said, but Coast has already performed close to 1,000 demos and is beginning to place TV and radio advertising.

“The early success with PRE has kind of inspired us to do a couple more [brands,]” Groux said, with two launches planned by the end of the year in “categories that we think have significant growth opportunities in them.”

For the Lebons, though, their success with Xing has not inspired them to craft a follow-up brand – at least, not in the immediate future. Presently, they said, they’ll focus on Xing as their sole national brand, and grow it through flavor and packaging extensions. They’ve already added a Xing-branded lemonade line as well as 16.9 oz. PET bottles to accommodate consumers and retailers that prefer resealable packages.

Then again, Xing – starting as a flavored green tea product – has a lot of inherent expansion potential. Beyond new flavors (which the Lebons are working on), they might extend the Xing brand into other teas or fruit drinks.

So, even without offering another name, the Lebons can give their network of DSD houses plenty to hold on to. And even better, they probably won’t be repainting their trucks anytime soon. •

vitaminwater 10 has been a hit. but when will Coke’s glamour acquisition start running up the score? by matt casey vitaminwater isn’t what it used to be, but it’s trying.

After a $4.1 billion buyout from the Coca-Cola Co., integration into Coke’s distribution system, a host of new flavors and the past year’s introduction of eight new low-cal varieties sweetened with Truvia, the brand is currently engaged in its second major revamp this decade. But is the work going into the brand an attempt to tinker before a major surge, or is the Coke system just not a good fit for a product that made its name through close relationships with private distributors?

It’s a question that didn’t seem like it could ever get asked just two short years ago, when Coke grabbed up an energetic, disciplined organization whose bright leadership team routinely invaded new geographic markets while sampling and merchandising with gusto. The vitaminwater brand stretches back to 2000, when J. Darius Bikoff decided to combine an earlier product, the vapor-distilled, electrolyteenhanced smartwater, with a flavored multi-vitamin tablet. It made for a quick, stylish hit: throughout its various packaging and flavor variations, the key to the brand’s appeal has been this: a light-tasting, nicely-packaged dose of functional ingredients, with each variety’s name offering a clue about what it did. xxx packed in antioxidants; formula 50 packed 50 percent of your daily need of vitamins C, E and folic acid, and power-c packed vitamin C plus energy-staple taurine.

36.BEVERAGESPECTRUM.OCTOBER.09

But things aren’t so simple anymore. vitaminwater, while still the undisputed leader of the enhanced water category, has faced shifts in its leadership, battles at the borders of its category and a rush of brands crafted to replicate the glaceau magic. Through it all, vitaminwater has stayed at the head of the pack, but that doesn’t mean that Coke itself isn’t concerned about the performance of its big free agent. vitaminwater has put up some big numbers, but it has yet to usher in a bright new era of greatness for its team. Amid all that pressure, vitaminwater appears poised for change. Its marketing team has hinted at a packaging revamp, and recently-released varieties already show a shift in direction in both calorie count and flavor.

position of strength The corpses of would-be pretenders to the glaceau throne – some of them marketed by big companies – litter discount coolers. Dr Pepper Snapple Group, Jones Soda and AriZona all tried to exploit the new category, and achieved – at best – limited success.

In the mean time, PepsiCo launched a coordinated attack on vitaminwater’s territory using its Propel Fitness Water, Gatorade G2 and SoBe Lifewater – the only big-firm enhanced water to hold its ground against Bikoff’s creation.

But retailers are starting to show concerns that the brand is adrift, as if they don’t know what the fuss is all about anymore.

“I believe it’s shifted more toward the flavors... from some of the names, you can’t tell what’s in that until you read what’s on the bottle,” said Paul Grammer, president of Fastop, a convenience store chain that runs 10 Circle A Food Marts in Indiana.

Take glaceau’s newest full-calorie vitaminwater flavor, sync. Its moniker obviously isn’t built around a vitamin pack. The berry-cherry flavored product includes 100 percent of the daily value of four B vitamins as well as vitamin C and polyphenols, but the name “sync” doesn’t suggest that – nor was it supposed to.

The product’s on-label description calls it a “download of vitamins and antioxidants,” a reference to its real focus: each bottle of sync comes with a free download from MySpace music.

Other new releases from vitaminwater have tinkered more with the brand’s nutritional profile than its flavor profile.

Following a broadside from PepsiCo that The product's on-label pointed out vitaminwater’s 125 calories description calls it a per bottle, glaceau announced vitaminwa"download of vitamins ter10. The sub-line substitutes erythritol and antioxidants," a and Truvia, a natural sweetener derived reference to its real focus: each bottle of from the stevia plant, for a portion of the sync comes with a free crystalline fructose used in core vitamindownload from MySpace water flavors. The result? A sweetened, music. enhanced water with ten calories per

38.BEVERAGESPECTRUM.OCTOBER.09

serving (25 per bottle) and natural credentials.

In pushing the new line, glaceau has treated vitaminwater10 like Diet Coke by trying hard to give it a life separate from its parent brand. Early ads for the lowcalorie line avoid mentioning core vitaminwater. But the introduction of what is ultimately a smaller brand PepsiCo launched a coordinated attack on vitaminwahas lately been ter’s territory using its Propel Fitness Water, Gatorade the bulk of the G2 and SoBe Lifewater – the only big-firm enhanced organization’s water to hold its ground against Bikoff’s creation. marketing focus – something Grammer has noticed in his store. The local Coca-Cola distributor, he said, has supplied him with new vitaminwater window clings on a monthly basis, and, lately, they’ve centered on the brand’s 10 line. That, to Grammer, feels like a further drift from the product that he originally picked up.

For Mike Sacocci, grocery buyer at Dave's Marketplace in East Greenwich, RI, vitaminwater10 represents a return to the brand’s roots. He started carrying vitaminwater “back when nobody would drink it,” he said, back before 50 Cent took a 10 percent share in the company in exchange for promoting the product.

“I don’t think the brand got better. They just made it for what people wanted,” Sacocci said. “Now, they’re trying to get back.” vitaminwater10 has been performing well at his store. It fits his clientele well, he said, and the sub-line – if it can deliver equal taste with less sugar – could help open the product up to a wider audience.

So far, the product has performed respectably, racking up nearly $78 million in sales in the 52 weeks ending Sept. 6, 2009, according to Information Resources Inc. data for supermarkets, drugstores, convenience stores and mass market retailers (excluding Wal-Mart). While that puts vitaminwater10 far behind its parent brand, which sold $827 million during the same period, the new entry has already claimed 1.23 percent of the single serve, PET still – not just enhanced – water market.

To date, glaceau has invested in eight varieties of vitaminwater10, a hefty roll-out for a line that’s only a year old. But core vitaminwater is due for something of a reboot as well. Danielle Dubois, spokeswoman for glaceau, said the Coke unit plans significant changes for the brand at the beginning of 2010.

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vitmainwater10 is up to eight flavors now including xxx, revitalize, recoup, energy, mega-c, go-go, essential, and multi-v.

That roll-out may reflect the changes within the brand’s inner workings. While glaceau has remained a separate unit inside The Coca-Cola Co., it has been nudged, pared down, reorganized and stripped to fit Coke’s corporate structure. After the acquisition, Coke junked glaceau’s fruitwater and vitaminenergy to instead build up PowerAde, which Coke added to glaceau’s portfolio. But Bikoff isn’t the leading brain behind PowerAde – or even vitaminwater – anymore, and Mike Repole, the brand’s pre-merger president, similarly departed in August 2008. Coca-Cola Enterprises veteran Hal Kravitz – a post-merger addition – replaced Repole, but that lasted only a year. Coke dropped him to a lower rung in September and installed former consultant Brent Hastie to lead the unit.

Whether Coke is flailing following the realization that it’s selling vitaminwater for $1 per bottle after dropping $4 billion on the brand – or if it has a real plan – is hard to tell. glaceau’s leaders declined to talk to Beverage Spectrum. Distributors – and Coke executives themselves – have expressed optimism about what they call a pair of new functional platforms that will be released in April, but there isn’t much hype leaking out.

Meanwhile, rather than try to figure out what consumers want, glaceau recently made the move to throw that job back to the consumers themselves. glaceau launched a Facebook-based campaign to involve consumers in creating the next vitaminwater variety. Via an online poll, the brand chose black-cherry lime for a new flavor, with a functional pack including “vitamins a to zinc + caffeine.”

Through the same online interface, glaceau will choose a label for the new product. The application gives users three options for creating the label, and none of them restrict designs to the brand’s solid color motif. The simplest, least involved of the three design options includes 40 patterns for use with a secondary color. If the flavor’s planned March 2010 launch is indicative of the brand’s plan, the entire line’s packaging could get a bit more flair.

It’s an intriguing idea, one that seems to suit a brand that grew through an array of styles that each seemed to attract their own individual consumer, allowing them to build relationships with the different SKUs. But building relationships that last can be hard, and it’ll be a Coke team, rather than the original brains behind rescue and vital-C, who will ultimately have to put in the work to keep things fresh, not just low-cal. •

40.BEVERAGESPECTRUM.OCTOBER.09

BRAND NEWS: FUNCTIONAL WATER

BRAND NEWS Eldorado Natural Spring Water. Eldorado has expanded east, as Tree of Life recently began distribution of the entire Eldorado line in the Southeastern, Southwestern, and Midwestern U.S. Eldorado is sponsoring Denver's 9NEWS Optimum Wellness program in Q4.

H2Om. As of October 1, 2009 H2Om will be the first nationally distributed spring water brand bottled in 100 percent post consumer recycled plastic (R-PET) completely eliminating their reliance on petroleum and virgin resources. Recognized by TIME Magazine and The Wall Street Journal, and recommended by the Environmental Media Association, H2Om Water with Intention is an award-winning natural mountain spring water (no flavors or additives) which promotes positive energy for people and the planet. In 2010 H2Om will welcome the arrival of its 1.5 liter bottles. bot. bot has added an new 'big bot' line extension to the bot beverage portfolio. The new bot is a healthy, modern approach to hydration and is positioned as an enhanced water.

It is an all-natural enhanced water featuring B Vitamins, electrolytes and antioxidants. bot enhanced water is lightly sweetened with pure cane sugar. It comes in four natural flavors grape, berry, orange and lemon. bot enhanced water is only 25 calories per serving and is free of preservatives, coloring, artificial sweeteners, thickeners or HFCS. Mosse Beverage Industries. MBI has added

two flavors to its current lineup, Citrus Fusion and Georgia Peach. Both flavors are now sweetened with Agave. Additionally, the company has reformulated its Black Cherry beverages to meet consumer demand for more cherry flavor. Going forward, all MBI beverages will be sweetened with Agave.

Ayala Herbal Water. Fans of Ayala’s Herbal

Water can find a new flavor added to their line of already widely popular flavors: Lemon Verbena Geranium. The Lemon Verbena Geranium flavor is infused with aromatic herbs and results in a pure, fruity lemon note. It also has a clean fresh finish combined with a romantic floral touch.

42.BEVERAGESPECTRUM.OCTOBER.09

SoBe Lifewater. SoBe Lifewater unveiled

several marketing programs beginning in late June, in an effort to engage consumers all summer long, SoBe-style, including one of PepsiCo’s largest sampling programs to date, with multiple markets across the country distributing 3 million samples of SoBe beverages at hot events. SoBe’s new advertising also feature SoBe’s Twitter handle – twitter. com/sobeworld – making SoBe among the first national brands to tag advertising with a Twitter callout.

Aquafina FlavorSplash. Aquafina Flavor-

Splash now comes in six refreshing flavors.

It's available in Grape, Wildberry, Raspberry, or NEW Strawberry Kiwi, Peach Mango, or Lemon. All six flavors are available in Aquafina’s new 16.9 oz. bottles that use 20 percent less plastic for less environmental impact. glaceau. The results of vitaminwater’s fla-

vorcreator lab (http://www.facebook.com/ vitaminwater) are in, and the next flavor of vitaminwater will be black-cherry lime, with a vitamin package that will include vitamins a to zinc, plus caffeine. The new variety will be available in stores nationwide in March.

Facebook fans will also get the opportunity to design the label for the new bottle and take a stab at drafting some clever copy describing the flavor and function. After the Facebook fans vote for their top ten label designs, vitaminwater partners Carrie Underwood and 50 Cent will help choose the winning designer – who will be awarded with fame and a $5,000 prize.

LaCroix. Now available in seven flavors,

Pure, Cran-Raspberry, Orange, Lemon, Lime, Berry, and Grapefruit, LaCroix 100 percent Natural Flavored Sparkling waters contains an essence of natural flavors and provides great taste without anything artificial added.

They are calorie free, sodium free and sugar free. LaCroix is 100 percent recyclable and bottled throughout the U.S. Activate Drinks. ACTIVATE’s distribution has grown, from San Diego to San Francisco to Hawaii. This Cold Season, the company

is promoting ACTIVATE Immunity Orange, which is packed with 250 percent of the RDA of Vitamin C, Echinacea, and Zinc. Its naturally sweetened with Stevia, contains 0 Sugar and only 5 calories per entire bottle. All of these healthy ingredients are at their full potency when consumed, thanks to ACTIVATE’s twist cap, which stores them in an airtight lid.

sumer twists the top cap, the vitamins are injected into the water. VBlast! has no calories, no sugar, and no carbs. The vitamins are stored in the cap in a concentrate.VBlast! comes in half-liter PET bottles in eight flavors: Pomegranate-Cherry, Acai & Berry, Green Tea, Grape, Peach Tea, Strawberry-Kiwi, Wild Berry, and Citrus.

Cutting Edge Beverages. The H2Organics

Family of Organic Nutrient Enhanced Water introduces the re-launch of their H2Organics Original. The six functional formulas now have twice the level of nutrients and an improved flavor profile. The products are available in six functional organic formulas: RELAX, FLEXIBILITY, ENERGY, FOCUS, ANTIOXIDANT, and HYDRATION. Each has organic natural flavor and is packaged in a 20 oz. PET, BPA-Free bottle.

VBee! Multi-Vitamins & Spring Water. The children’s version of VBlast! has all the benefits of the parent brand PLUS added Calcium and Vitamin D. Using the patented Vitamin Infusions Cap, the fresh liquid vitamins are dispensed when the white cap is twisted.

VBee! is naturally sweetened with Stevia and contains no caffeine, no sugar and no calories.

Packaged in 8 oz. PET bottles, VBee! comes in three flavors: Watermelon, Blue Raspberry, and Green Apple.

Hydro One Premium Beverages. Hydro

Trimwater. Trimwater comes into 2010 with

One Premium Beverages has added Böde Heart Health to its all-natural, functional, healthy line of beverages. Loaded with the flavor of Acai Blueberry, Böde Heart Health was introduced into all Fresh Markets during the last week of September. It contains essential vitamins, nutrients, minerals and antioxidants formulated to reduce the risk of heart disease: plant sterols, grape seed extract, decaffeinated green tea extract, acai, folic acid and magnesium.

a new look, a new partner, and an enhanced flavor lineup for its proprietary 4-calorie weight-control formula. Wilhelmina International will be working as a marketing and branding partner of Lifestyle Beverages and Trimwater, bringing Trimwater to fashion shoots, fashion shows, the gym, parties, or just walking around the city. The redesign of the Trimwater logo and packaging is now available: it is a 16.9 oz. powerflex bottle with colorful, full shrink sleeve and a colored transparent ‘beverage window’ displaying the new Trimwater logo. Trimwater will also be modifying its flavor lineup in 2010 and introduce new flavors, including Acai-Blueberry and Chocolate-Maqui Berry.

Hint, Inc. Hint continues to grow at a triple

digit pace in core markets San Francisco, Los Angeles, New York, and New England. During 2009, Hint CEO Kara Keenan focused her team on building a world class sales organization, lowering the cost of goods and preparing the company's back office for an outstanding 2010. Heading towards the new year, Hint is ramping up its field marketing efforts, as it continues to build the category it leads. In addition to helping consumers enjoy a healthier lifestyle, Hint has committed to doing its part to protect the environment. In 2010, the company will launch a 15 percent lighter bottle.

TalkingRain. TalkingRain is now offer-

ing the following new products: actiVwater lemon lime and orange mango, twist lemon organig and pink mango, and a new SKU of pink twist to celebrate cancer awareness. actiVwater is also now available at all 7-Eleven locations in Seattle, Washington and Portland, Oregon.

Icio. Icio is a purified bottled water infused

VBlast! Vitamins & Spring Water. Bottled

by New York Spring Water, Inc. of New York City, the company uses its signature natural spring water and tops the bottle with a patented Vitamin Infusions Cap, which contains liquid vitamins and flavoring. Once the con-

with natural extracts. This new product comes in four SKUs: Peppermint, Cucumber Lemongrass, Lemon Basil and Apple Pear. It is sold in 12 oz. flasks. This new product is seeking distribution in Southern California.

OCTOBER.09.BEVERAGESPECTRUM.43

CATEGORY REPORT: DIET ENERGY

TAKING SHOTS Diet remains a weighty part of the energy category.

By Matt Casey CONSUMERS HAVE TWO THINGS IN ABUNDANCE these days: inches on their waistlines and a need for energy. That should make diet energy drinks a no-brainer, right? Skip the sugar. Get the caffeine. Get going.

But what had once been the exclusive domain of stimulantjacked, artificially-sweetened drinks has been invaded by shots.

5-Hour Energy has become a $500 million brand by delivering an energy drink’s worth of caffeine – sugar free – in a 2 oz. bottle. The brand was positioned as the choice for mature consumers who avoid sugar because their desk job prevents them from burning extra calories, and also because edgy energy drinks clash with their dress shirts and ties.

Despite pressure from that fast-growing brand, the move to diet energy drinks is not on the wane. Top brands’ diets are even performing well.

Linda Smith, owner of Linney’s Sunoco A Plus in Indiana, PA said Red Bull Sugarfree in 12 oz. cans outsells its calorie-laden brother at her store. Monster and Rockstar’s diet varieties also perform well. A number of Smith’s regulars suffer from diabetes, she said, and her store sits near the Indiana University of Pennsylvania campus – a place she suspects houses a significant number of young women who need energy but want to watch their figures.

Smith’s sales aren’t as atypical as she thinks. According to Red Bull spokeswoman Patrice Radden, Red Bull Sugarfree represents 24 percent of the company’s total sales, “and its growth is outpacing Red Bull Energy Drink.” She added that Red Bull Sugarfree sells better in 12 and 16 oz. packages, falling in line with Smith’s storelevel observation.

Diet energy drinks are also chugged along at Valero Energy stores, according to Ken Zunker, the chain’s category manager for According to Red Bull packaged beverages. They lag spokeswoman Patrice Radden, Red Bull Sugarfree represents behind their full calorie breth24 percent of the company’s ren, he said, but still post okay total sales, “and its growth is outpacing Red Bull Energy Drink.” numbers. Red Bull and Monster

44.BEVERAGESPECTRUM.OCTOBER.09

diet varieties move well, Zunker said, but the category lacks depth – other brands fail to make a significant sales contribution.

If that disparity stems from consumers perceiving one diet energy drink as the same as the next, a number of brands have aimed to break out of the herd. Celsius, for example, promises the consumer that the product’s blend of caffeine, green tea extracts and other additives will help them burn 100 calories per can. Hydrive has seen its distribution blossom under its alliance with Dr Pepper/Snapple Group. Other brands, including NERD, Sambazon, and GURU have tried to step out of the shadow of the big energy brands by using stevia sweeteners.

So, diet energy drinks – the top ones, anyway – continue to thrive even under threat from fast-growing 5-Hour. Smaller brands, however, are starting to understand that they need to create a point of difference to break out.

BRAND NEWS Sambazon. Sambazon launched Amazon En-

ergy Diet to compliment its Amazon Energy Original. The organic product has 40 calories and 9 grams of sugar per serving.

Liquid Lightning. Liquid Lightning intro-

duced its Sugar-Free variety this year, and recently struck a distribution deal with Fedway Associates, Inc. in New Jersey.

The Coca-Cola Co. NOS Energy Drink launched Sugar Free NOS in August of 2009.

The new variety delivers 250mg of caffeine in each can.

Red Bull GMBH. Red Bull recently launched its new 16 oz. super sleek can for both its original and sugar-free varieties.

BAWLS Guarana. BAWLS EXXTRA is now

available at major chain stores like Super Target, Casey’s, Lucky Supermarkets, Publix, Basha’s, Savemart Supermarkets and Micro Center stores.

Zenedge. Zenedge recently launched its low calorie, sugar-free, lightly-carbonated Lite version.

Forfeit your Red Bull, * * Rockstar, or Monster distribution rights? *

#1 Energy drink BNB in the USA. #2 Energy drink sold on-premise.

Only energy drink company to offer full portfolio product line: Bag-In-The-Box, 12 oz Slim Line Can, 1/2 Liter PET Bottles

For distributor inquiries, please call Cregg Peterson, VP of Sales 402.350.1121. * Roaring Lion, the Lion’s head symbol and Lion’s Challenge are respectively a registered and common law trademarks owned by RLED, LLC used in connection with energy drinks.

Red Bull, Rockstar, and Monster are registered trademarks of Red Bull North America, Inc, Rockstar, Inc, and Monster Beverage Company, respectively.

BRAND NEWS: DIET ENERGY Hansen Beverage Company. Continuing the

belief that bigger is better, Hansen has released a 32 oz. “BFC” can of Lo-Carb Monster Energy. It also announced that it is transitioning Java Monster Lo-Ball from 24-can cases to 12-can cases.

Krank’d Body Fuel. Krank’d 7-In-1 Body

Fuel will appear at several east coast ski resorts in PA, NY, WV, and VA this ski season.

CRUNK!!! Energy Drink. Crunk!!! changed

its label in the spring of 2009 to better fit its carb-conscious consumers.

athlete, Cyclist Sam Clark of Draper, Utah, for its diet energy drink Vá lite.

Hydrive Energy LLC. HYDRIVE Energy Drinks introduced a new package design and its fifth flavor, HYDRIVE A – Kiwi Strawberry. HYDRIVE Energy Drinks are being rolled out nationally by Dr Pepper Snapple Group.

DNA Beverage Corp. DNA Beverage Corp., the maker of DNA Energy Drink, has redesigned its label. DNA has grown its distribution into California, Louisiana, Tennessee, Alabama and the Midwest.

Go Fast Sports and Beverage, Co. In the

past year, Go Fast Sports and Beverage Co. has begun distributing Go Fast Light 16 oz. in NM, AZ, CO, NEV, WY, MT, AK, KS, MO, SY, MN and TX at several chains, including: King Soopers, Circle K, Kum & Go, 7-Eleven, Sinclair’s, Loaf ‘N Jug and Valero convenience stores.

AriZona Beverage Co. In the last year,

AriZona has sampled Caution Low Carb Performance at numerous events including New York Fall 2009 Fashion Week, and New York Spring 2010 Fashion Week, Oscar screening parties, and a series of events with Musictoob.com.

Beverage Innovations, Inc. Beverage Innovations, Inc. launched production of Venga in the United States in May, and also rolled out a new bottle design.

EX Drinks. EX Slim Energy has been newly reformulated and repackaged with only 2 grams of sugar and 15 calories.

Celsius. Celsius has launched its first ever

national advertising campaign, “Burn Baby Burn!” featuring national TV, print, radio, internet, events, and outdoor advertising.

NERD Energy. NERD Energy recently added NERD Zero Calorie to its line of focus and energy beverages. The new variety uses stevia as a sweetener.

Monarch Beverages. Monarch Beverages

recently introduced a sugar-free, zero-calorie version of its original Rush! Energy citrus flavor. The introduction of Rush!

Energy Sugar Free coincided with a brand packaging redesign.

Bigg Juice Industries. Bigg Juice Industries’ Reload Clear won an award for “best Shelf-Appeal” in 2008 at the Montreal Packaging Trade Show.

NOR – CAL BEVERAGE Co. Inc. Go Girl

Sugar Free Energy Drink proudly wears the pink ribbon on each can. $.50 of every case sold is donated to breast cancer research, awareness and prevention.

GURU Beverage Co. GURU Beverage

Co. announced a product collaboration with Kanye West. The new product is expected to launch later this year in the U.S. and Canada.

Power Trip Beverages. Power Trip “0”

Exclusive Energy Company. Exclusive En-

ergy Company launched a sugar-free energy drink to complement its original formulation.

It is available in both 8.4 oz. and 16 oz. cans, and case shrink wrapped.

Amplexo USA, Inc. Amplexo USA, Inc. re-

ceived a new endorsement from an endurance

46.BEVERAGESPECTRUM.OCTOBER.09

has become available at a professional football stadium as well as at several racing venues.

Roaring Lion Energy Drink. Roaring

Lion recently introduced its Sugar Free energy drink in 12 oz. slimline cans, 500 mL resealable bottles and 1 gal bag-inbox for bar guns.

Bringing

natural flavors into focus.

Robertet is a closely-held multinational company whose vision is long-term and whose technologies are focused on the flavors and aromas that nature always intended. For all of your flavor needs, call Robertet at 732-981-8300, or send an email to Solutions@RobertetUSA.com.

TECHNOLOGY • CREATIVITY • INNOVATION

PROMO PARADE

PROMOTIONS, EVENTS, AND SPECIALS FOR THE INDUSTRY

Sam Adams Lends a Hand

Michelob Snags Armstrong for ULTRA

A R E V O L U T I O N A R Y W AY T O H E L P M I C R O - E N T R E P R E N E U R S

During the month of October, for every case of Samuel Adams Boston Lager sold in Massachusetts and Rhode Island, 25 cents went towards Samuel Adams Brewing the American Dream, a philanthropic program created by The Boston Beer Company to provide financial support and services to low and moderate income entrepreneurs in the food and beverage industry.

Distributors in Massachusetts and Rhode Island have also joined in to support The Boston Beer Company in the effort, offering to match the 25 cent donation in their respective distribution areas. Participating distributors include

2 008

Atlas Distributing, Inc. of Auburn, Massachusetts, Burke Distributing Corporation, of Randolph, Massachusetts, Commercial Distributing Company of Westfield, Massachusetts, Horizon Beverage Company of West Greenwich, RI, L. Knife & Son of Kingston, MA and Merrimack Valley Distributing Company of Danvers, Massachusetts.

Earlier this year, The Boston Beer Company brewed a special beer, Samuel Adams Boston Brick Red, available on draft and only at bars and restaurants in the Boston area. For each keg of Boston Brick Red enjoyed throughout the City, the brewer made a donation of $4.

Michelob ULTRA announced that seventime Tour de France winner Lance Armstrong has signed a three-year agreement to become the brand’s new spokesperson and ambassador.

As part of the agreement, Armstrong will appear in a new Michelob ULTRA television commercial titled “Little Bumps,” and he will make a cameo appearance in a second ad titled “Escalator,” both which are scheduled to air in 2010. Michelob ULTRA will also use Armstrong’s likeness on print, outdoor advertising, digital marketing programs, product packaging and point-of-sale.

Healthy Nestle Nestle USA has joined a coalition of more than 40 retailers, food and beverage manufacturers and non-governmental organizations to launch the Healthy Weight Commitment Foundation, a national, multi-year effort designed to help reduce obesity – especially childhood obesity – by 2015.

The Healthy Weight Commitment Foundation will promote the concept of energy balance – balancing calories consumed as part of a healthy diet with calories expended by physical activity – to people in the places where they spend much of their time: to consumers in the marketplace, to employees through workplace programs and to children in schools.

Members of the Healthy Weight Commitment Foundation have already committed $20 million to this joint initiative to raise awareness about the importance of balancing a healthy diet with physical activity, particularly among children ages six to 11 years old and their parents and caregivers.

48.BEVERAGESPECTRUM.OCTOBER.09

Participating companies are committing to build on existing efforts and will be making changes to their products, packaging and labeling to make it easier for consumers to manage their calorie intake while preserving or enhancing overall nutrition quality.

The Healthy Weight Commitment Foundation will expand the Healthy Schools Partnership to additional schools in Kansas City, Des Moines, Washington, D.C., Chicago and a tribal community in Iowa. The Healthy Schools Partnership integrates nutrition education and physical education through a school-based curriculum to help children develop life-long positive healthy habits.

Nestle USA will also continue to support Healthy Steps for Healthy Lives, a program created to offer teachers innovative tools to educate students about good nutrition and physical activity. To date, more than 40,000 Healthy Steps kits have been distributed to teachers, reaching nearly one million children and their families.

S A N TA M O N I C A

WINTER 2009

DECEMBER 8, 2009 with Beverage School December 7

LOEWS SANTA MONICA BEACH HOTEL for more information visit

www.bevnetlive.com SPONSORED BY:

REGISTER NOW! LIMITED SPACE AVAILABLE.

PROMOTIONS, EVENTS, AND SPECIALS FOR THE INDUSTRY

PROMO PARADE

Send a Little Sparkle with IZZE IZZE Beverage Company announced the launch of its “You’ll Love What’s Inside” campaign, with print ads and an online promotion. The new campaign highlights IZZE’s all-natural sparkling juices and provides consumers with the opportunity to interact with the brand in a fun, creative way.

Print ads supporting the campaign are currently running in Details, Entertainment Weekly, GQ, InStyle, People and People Style Watch. Featuring the visual of real fruit inside of IZZE bottles, the ads show that IZZE products are made of pure fruit juice and sparkling water. The ads also include a call to action for consumers to create and send messages to their friends at www.

IZZE.com/share.

The online campaign centers

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around the IZZE Sparkle Generator, where consumers can send Sparkles – messages that describe what’s special about their friends – to each other.

People who send 20 Sparkles and have at least 20 Sparkles accepted by their friends will receive a limited edition IZZE Sparkling Lime t-shirt while supplies last.

They can also join the Natural Rewards Program for a chance to win an IZZE branded iPod Shuffle by having 100 Sparkles accepted by their friends.

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BevNET.com, Inc.

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8/21/2009 Average No. Copies Each No. Copies of Single Issue Published Issue During Preceding Nearest to Filing Date 12 Months

Beverage industry professionals

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Kahlua for the Holidays

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Following an aggressive campaign last holiday season, Kahlúa has invested in print advertising this year, while also adding national cable television to the mix.

The new ads will highlight the brand’s mystical Mexican heritage while focusing on the taste appeal of Kahlúa and on such classic Kahlúa cocktails as Kahlúa & Club, Kahlúa on the rocks and The Kahlúa White Russian.

Two new television spots – along with three spots launched earlier this year – debuted in September and will continue through the holiday season on networks including ESPN, National Geographic, The History Channel, Discovery Channel, Bravo and The Food Network. Three new print executions that play off the TV campaign will appear in publications such as GQ, People, Travel & Leisure, Martha Stewart Living, Golf Gourmet, Bon Apetit and Everyday with Rachael Ray. In addition, the brand will run a Kahlúa flavors TV spot throughout the media cycle and 1/3 page print executions to drive awareness of Kahlúa Hazelnut, Kahlúa French Vanilla, Kahlúa Mocha and limited holiday release Kahlúa Coffee Cream Liqueur.

BSN, the world leaders in physique, performance and energy supplements and the makers of the world-renowned N.O.-XPLODE™ are once again on the cutting-edge of human performance with the introduction of SYNTHA-6™ RTD. The same unparalleled SYNTHA-6™ formula with the “ridiculously delicious” taste that has skyrocketed to popularity over the course of the last few years is now available in a convenient ready-to-drink (RTD) formula. With the protein supplement segment of the market on the rise, growing over 40% last year, SYNTHA-6™ RTD is the high-quality protein answer your customers are looking for.

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