Page 1

October 31, 2011

Ginseng UP is Back page 30

Diet Energy Grabs a Bigger Piece of the Pie

A New Generation of Functional Drinks Emerges

page 32

NACS Show Recap page 48

OCTOBER 2011 vol.

9 :: no. 7

Columns 4 FIRST DROP Et Tu, Me Too? 6 PUBLISHERS TOAST The New Rules for Rock Paper Scissors 24 GERRY’S INSIGHTS Secret Origins of Authentic Products

Departments 8 BEVSCAPE BUSINESS Vita Coco Makes Some Changes 28

10 BEVSCAPE INNOVATION Social Media and Purchasing 12 NEW PRODUCTS Honeydrop’s New Flavors 20 CHANNEL CHECK First Look at Aloe 22 BREWBOUND GABF Takeaways 30 COOLER CHECK-IN What’s Up at Ginseng Up? 50 PROMO PARADE evian’s New Designer Bottle



Features 32 DIET ENERGY Second Helpings 38 COVER STORY: Beyond Me-Too A New Generation of Functional Drinks


48 NACS ROUNDUP A Recap of This Year’s Show

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

Beverage Development Ingredient Supply Shots Energy Drinks Enhanced Waters and More Proprietary Flavors Premixes and Bases U.S. Distributor

By Jeffrey Klineman

ET TU, ME TOO? WE’RE BACK FROM ALL OUR early fall travel and safe at home, which is a great thing because with the conference season out of the way, we can move on to the most productive time of the year. See, this is that time of the year when we have products rolling in from all over for BevNET’s Best of 2011, and we’re thrilled because the fridge is full and the caffeine coffers are overflowing. Hence, the productivity. There are so many teas and energy drinks here, in fact, that the espresso maker is getting lonely and the milk isn’t getting frothed. But at the same time, we’ve seen so many new products this year that they’re starting to become a little indistinguishable. Not because we’re moving too fast on things, either, but because, unfortunately, it’s starting to look like the “Me Toos” are back in town. You know what I mean the minute I start talking about them – the energy drinks and the enhanced waters that remixed the formulation and used thesame-but-different labels to try to peel market share off the category leaders. They’re the brands that aren’t even “fast follows” but are instead “faux follows” to more authentic entrants. We are seeing them not so much in older, more established categories, however. Sure, the occasional Red Bull knockoff still trickles in, and the mixture of tea and lemonade is apparently just too darn alluring for some companies to put the effort into something else, but lately the trick appears to be to get the lowest common denominator of an entry point into the category of the moment, and let it fly. So right now, we’re seeing plenty of nondescript relaxation drinks and energy shots that seem to have no reason for being other than the possibility that there


might be some retailer or distributor willing to take a chance on those categories. While coconut water and aloe seem to be evolving with decent creative thought behind them – there’s a lot of flexibility in the juices themselves that seems to engender many different varieties and brand propositions – for others, it seems, the motivation is just to dip a toe into an emerging business opportunity, no matter if that toe looks like every other toe in the water. Here’s what we can say about Me-Toos. They rarely – if ever – work out. No matter how exciting the category play is at the time (and some of the Me-Too infested categories we’re seeing right now, like relaxation, aren’t yet proving to live up to their hype), the real play is the brand. That’s how you attract the consumer to the category, not through the category itself. All the rest is just bottom feeding. We saw it a few years ago with enhanced water, with teas and with energy; we saw it with malternatives and with the first craft beer implosion. When it comes to new categories, you don’t want to say, “I’m just like Red Bull/Vitaminwater/ AriZona/Four Loko/Sam Adams.” In the end, yes, there’s a first-mover advantage, and there’s an advantage for those who have the wiles and the endurance to get it right, and there’s some pricing and packaging innovation that can occur. But too many folks want to turn the entire race to the front into a race to the bottom. And too many people heading there can drag the whole deal down with them.

By Barry J. Nathanson www.bevspectrum.com

ROCK, PAPER, SCISSORS ON A BEAUTIFUL FALL DAY LAST weekend, I ventured into Central Park, as is part of my daily routine. As I sat by Bethesda Fountain taking in the foliage and hearing dozens of languages that I couldn’t decipher, I watched a group of kids playing that time honored game, “Rock, Paper, Scissors.” It brought me back to my youth, as well as the early years of parenting my own children, now grown. The joy and laughter kids take from the game has not changed in all these years. The symmetry of the three aspects, the equal measures of power and vulnerability, is clear and succinct. I write this now because I have some issues with the game, however. Like, why isn’t rock more powerful than the other pieces? It might seem ironic for someone in the magazine business, but I’ve always felt that the aspect of paper defeating the rock by covering it made no sense. But to avoid therapy, I probed deeper into the recesses of my mind to find logic in it – especially since I had to also conjure up a topic for my column. So let’s compare it to the beverage world, and play by my rules. I’ve always felt that the rock is the most powerful, and should control the game, with the scissor having its moments of impact, while the paper is always at the whim of the other two. Again, my contention is that covering a rock means nothing. So in my rules, I’ve assigned the three aspects of our business; the retailer, distributor and marketer to each component. The proper breakout is that the retailers are the rock, distributors, the scissors, and marketers, the paper. I have watched beverage ver6 BEVERAGESPECTRUM.OCTOBER.2011

sion of this game for 20 years now, and while there have been times that each side has had its moment in the sun, the logic is that this is the pecking order. Retailers must have an understanding of their power and wield it wisely and fairly. They control the space, the pricing and the profitability. If they get too greedy or make the relationships too one-sided, everyone loses, especially the consumer. It is incumbent upon them to negotiate in good faith, take on new and unproven brands, and give them time to grow. But sometimes the rock hits too hard, and the other players ultimately drop out of the game. No one wins. Distributors too often want to be the rock. They are beaten down, so they take it out on the paper. But even if they’ve been burned by the marketers in the past, they must still give fair terms to the brands, not some of the cutting ones that have been bandied about in the marketplace over the last few years. It’s got to be win-win. There’s enough room for both of you to play the game. Paper serves at the whim of the other players. That’s the nature of the beast. It is still important to be innovators, creators and savvy marketers. Taste and efficacy still are the roads to success. If you have a truly unique concept, though, you’ll have the rock and scissors knocking at your door. So wait. Maybe paper does have power. Maybe it does beat rock. Maybe there is balance. Maybe I DO need therapy. The reason Rock, Paper and Scissors has been around so long, is that all three aspects work in harmony. To truly be successful, you must work and play together. Why didn’t l learn this when my kids were little? Sheesh.

Barry J. Nathanson PUBLISHER bnathanson@bevnet.com

Jeffrey Klineman EDITOR jklineman@bevnet.com

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SALES John McKenna ASSOCIATE PUBLISHER jmckenna@bevnet.com

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John Craven PRESIDENT & EDITORIAL DIRECTOR jcraven@bevnet.com

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The latest news on the brands you sell

Distribution Changes for Vita Coco

Meanwhile, on Long Island

Vita Coco is no longer in an Exclusive relationship. The brand’s co-founder, Mike Kirban, announced that he was shifting distribution responsibilities for the Manhattan, Brooklyn and Queens regions from specialty house Exclusive Beverage to Dr Pepper Snapple Group’s Eastern Business Unit. The decision came after Vita Coco achieved a four-year period of massive growth for the brand in New York with Exclusive, which was founded by Steve Gress as an alternative house for entrepreneurial brands in the city beyond the go-to brand-builder Big Geyser. “They’re awesome,” Kirban said of Exclusive, which he said took the brand from zero to over 500,000 cases annually in New York. “We built the brand with them from the beginning, and it’s a tough decision. If I was starting a new brand, there is no place else I’d rather go.” The move signals the ongoing alignment of the fast-growing brand with the large-scale direct-store delivery might of DPS. Starting with an announcement in June 2010 that the brand was moving to DPS in certain business units, the expansion gradually became inevitable in New York. Earlier this summer, Exclusive was forced to cede distribution to DPS in Long Island, parts of New Jersey and Westches-

Having been in the beverage distribution business for over 25 years, Lou Ferraro thinks he has learned a thing or two about what makes for a successful beverage brand. Ferraro was an executive at distribution powerhouse Big Geyser in New York and has been involved in the growth and success of dozens of entrepreneurial beverage companies through his work at Big Geyser breakaway Exclusive Beverage, where he was a founding employee. Earlier this year, in what is likely to be the final exam for Ferraro’s accumulated knowledge, he opened Preferred Beverage, a distribution company based in Glendale, N.Y. that carries a variety of entrepreneurial beverage brands. Preferred services New York City as well as Nassau and Westchester counties through a sub distributor network. According to Ferraro, Preferred tries to carry a number of entrepreneurial beverages brands that, in his words, “have a shot of making it.” The company particularly focuses on several brands with an organic component and those from a number of emerging beverage categories. Ferraro pointed out three key factors that Preferred is looking for in a beverage brand. “The product has to fit into our portfolio, it has to be able to make it on the street, and the supplier has to have the desire and money to be able to build the brand,” Ferraro said. In addition to Genesis Today, Ferrraro is enthusiastic about the success that Preferred has had with distribution of MADE organic green teas with fruit juice. Preferred distributes MADE products to nearly 600 accounts. The company also carries coconut water brand C20, a product that Ferraro said has received a warm reception in New York, as well as Real Beanz Nutrient Enhanced Iced Coffees and E-Boost Natural Energy Shots. As for products that Preferred may carry in the future, Ferraro said that he negotiating with between 10 and 15 brands in several emerging categories, although he singled out aloe drinks as one primed for the greatest and most immediate growth. “We’re in talks with five aloe brands right now,” Ferraro said. “I definitely believe it is the next category to explode.”

ter County, NY, but had held onto its core market in Manhattan. As part of the termination of its contract with Exclusive, Vita Coco was forced to pay a termination fee. Asked the cost of the buyout, Kirban would only say “it’s a lot of money, and it’s going to put Exclusive into a great position to further invest and build out the business.” The brand didn’t just change its New York distributor, however. As of Oct. 21, it is moving from one Anheuser Busch Inbev house in Arizona to a larger one, terminating Spike & Golden Eagle Distributors for the fast-growing NA business at fellow Budweiser distributor Hensley & Co in Phoenix. Hensley already carries Xyience’s Xenergy brand, AriZona, and several brands in the Coast Beverage portfolio, but Vita Coco adds another major layer in the company’s NA strategy.

Naked in the Courts First it was coconut water, where claims concerning the electrolyte levels of O.N.E. have recently come under legal fire. Now, it’s Naked Juice, which is facing the potential of a class-action lawsuit over the natural ingredients the brand uses in its line of juice and smoothie products. According to the plaintiffs in a suit filed recently in a California federal court, Naked’s claims of “100 percent Juice”, “100 percent fruit” and “All Natural” are compromised in the face of the use of “synthetic ingredients… and chemical compounds that are not the vitamins they were claimed to be.” First reported by Courthouse News Service, the suit claims that additives like calcium pantothenate, Fibersol-2, inulin, and others are added to provide the functional 8 BEVERAGESPECTRUM.OCTOBER.2011

properties that Naked claims comes from the fruit itself. Naked was purchased by PepsiCo in 2007. In addition to the use of non-natural ingredients, according to the suit, the company is employing soy-based products, which may be genetically modified, as well. According to the suit, “almost all soy products are now genetically modified.” PepsiCo has not yet filed a response to the suit.

Honest Helps out Founder's Home State The closest that Honest Tea TeaEO and Massachusetts native – Seth Goldman has come to running for office thus far has been sending product to the White House, but he did join Massachusetts Governor Deval Patrick to unveil the expansion of the Northampton, Mass. Coca-Cola Refreshments plant. The project, which received financial support from the PatrickMurray Administration and the City of Northampton, created 100 new jobs and attracted more than $50 million in private investment to the Western Massachusetts community. After the state and city committed more than $2 million in funding and tax abatements, Coca-Cola committed to creating 40 full-time manufacturing jobs over five years, retaining 176 existing jobs and investing $39.4 million

in the project. The company has already exceeded their obligations by creating 100 jobs and directing over $50 million towards the project’s completion. As part of the facility’s $50 million in-

vestment, two cold-fill juice lines producing primarily Minute Maid products were added. The cold-fill project included all packaging, processing and infrastructure required to support the product line. Other facility improvements included a 13,000 square foot expansion and conversion of warehouse space to cold storage. Coca-Cola in Northampton has been producing hot fill products (Powerade, Minute Maid) since 1995. From 2003-2010, the Company invested over $35 million to support the growth of the hot-fill business in Northampton. This investment has supported the production of many new products and packages including: Honest Tea, Fuze, Vitaminwater, Vitaminwater Zero and Gold Peak Tea. The Coca-Cola Northampton facility employees over 260 people.


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Product development & marketing news

Institute of Medicine Recommends New Front-ofPackage Rating System for Food, Beverages

Social Media Drives Purchasing According to final results from a new Ogilvy-ChatThreads study of restaurant consumers, individuals exposed to social content are significantly more likely to increase their spending and consumption than those who aren’t exposed.

Could a symbol like a check mark on the front of a can or bottle help consumers make healthier beverage decisions? The Institute of Medicine (IOM) thinks so. The organization recently released a government-sponsored report recommending that the Food and Drug Administration (FDA) adopt a single, standardized frontof-package symbol system for all food and beverage packaging. Citing a desire to “encourage healthier choices and purchase behaviors” and the effectiveness of Energy Star ratings for household appliances, an IOM committee comprised of nutrition and marketing educators concluded that a simple symbol that serves as a signal or cue would provide consumers with an easier way to identify healthy food and beverage options than would detailed nutritional information.

The committee recommended the creation of a point system that would be based on the serving size content of four categories closely associated with dietrelated chronic disease: calories, saturated and trans fats, sodium, and sugars. Each point would be indicated by a symbol to convey the healthiness of the food or beverage. For example, low-calorie, low-fat, and highly nutritional products might receive three points and be identified by three stars, whereas high-calorie and high-fat


products would receive no points, and, consequently, no stars. “A successful front-of-package nutrition rating system would enable shoppers to instantly recognize healthier products by their number of points and calorie information,” said Ellen Wartella, the committee chair and professor of psychology at Northwestern University. “It would [also] encourage food and beverage producers to develop healthier fare.” The study was met with frowns by food and beverage industry groups. While the FDA, which co-sponsored the study, has supported a front-of-package label since 2009, the Grocery Manufacturers Association (GMA) criticized the report and single symbol plan. In a press release, the GMA stated that “consumers should be trusted to make decisions for themselves and their families” and that the plan is an “untested, interpretive approach.” Additionally, the GMA argues that its own “Facts Up Front” nutrition labeling system adequately displays calories, saturated fat, sugar and sodium and nutrient content. The American Beverage Association (ABA) released a statement that commended the IOM committee for its efforts to provide consumers with more readily visible nutritional information. However, the ABA’s statement noted that “The beverage industry is already doing this with its Clear on Calories initiative, which places new calorie labels on the front of every bottle, can and pack we produce.”

There was a two-to-seven-times greater likelihood of higher spending or consumption depending on the media encountered by the study group. The sales impact was most pervasive when social content was combined with other types of media such as PR, out-of-home and TV. Additionally, out of over 20 channels studied, social content exposure was associated with the largest shift in brand perception during a 7-day period. Despite these strong social content impact findings, consumers are seeing relatively little branded social content during their daily routine. Only 24 percent of the study group reported exposure to social content, compared to a 69 percent exposure rate to TV ads. According to Irfan Kamal, SVP Digital/ Social, Ogilvy, “Much of the work to date has looked at direct channel impacts; for example, do direct clicks from a social media site result in sales? This study of restaurant consumers attempts to understand the more complex factors that lead to consumer purchase and perception changes. We found that in the real world, social content exposure - by itself and more broadly when combined with other types of media exposure such as out-of-home, PR or TV ads - is linked with a higher likelihood of consumption and actual spend increases. And, social content exposure alone is associated with the largest shift in week-toweek brand perception.” Dr. Walter Carl, ChatThreads Founder and Chief Research Officer, added: “Because we captured detailed touchpoint data in the moment from the consumer’s point of view we were able to track day-to-day brand exposures and assess the complex interaction effects of the various media and marketing initiatives.”

Cherrytree Records: Music to Craig James’s Ears In a partnership befitting the term “alternative pop,” Fentimans has aligned itself with Cherrytree Records, a Los Angelesbased music label, to create a new cherry cola for its line of premium fermented sodas. The product, Cherrytree Cola, launched in the Midwestern U.S. and Canada, accompanied by a heavily promoted bottle signing by LMFAO – an electronic hip-hop group signed to Cherrytree Records – at a Whole Foods market in Vancouver. Martin Kierszenbaum, the CEO of Cherrytree Records, called Craig James, the CEO of Fentimans North America to explain that he enjoyed Fentimans’ Curiosity Cola and wanted to establish a relationship with Fentimans that would help promote both the brand and Cherrytree artists. After discussing a number of ideas for crosspromotion, James noted that Fentimans had created a formula for a cherry cola several years ago, but never mass-produced the beverage. Considering the name of the label, the notion of a cherry-flavored beverage seemed ideal. In return, Fentimans would pay Kierszenbaum a fee for each case of Cherrytree Cola sold as well as participate in sponsorship of Cherrytree Records events and tours. “We’re not just trying to sell cherry cola,” James said. “We’re willing to cut our margin on one item to create more brand awareness for Fentimans and have consumers try all of our products.” James ran a test batch of Cherrytree Cola in February, and a design for the product’s label – featuring the Cherrytree Records logo

and website address – was created soon after. The cola was initially sampled at the 2011 Natural Foods Expo West show in March and received positive reviews for its look and flavor. Around the same time, Cherrytree Records began filming music videos for their artists that included product placement of Cherrytree Cola, the most notable of which was for LMFAO’s hit song, “Party Rock Anthem.” The video has been viewed over 195 million times on YouTube. “This opportunity is a gift,” James said. “We’re an emerging brand working with emerging artists. We’ll continue to check off opportunities where is there is some synergy for both Fentimans and Cherrytree Records.” Cherrytree Cola comes in Fentimans’ proprietary glass bottle and is priced at around $1.99 for a single bottle and between $5.99–7.99 for a 4-pack. Fentimans produced a first run of 2000 cases and most Fentimans distributors including UNFI and KeHe have picked up the new product. Further production and distribution would be based on the how well the product performs during its launch. Based on the number of impressions that Cherrytree Cola received just from the “Party Rock Anthem” video, James was cautiously optimistic. “This is a unique way to market our brand,” James said. “Though the part of this that is most interesting is [the question of], ‘Will this work?’ Once the cola gets on the shelves, will be people be drawn to it?”

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The newest options for cooler and shelf

CSD’s Green Bee Soda has announced the launch of its Blueberry Dream flavor. Blueberry Dream is handcrafted from Maine wild blueberries, Maine wildflower honey, and fresh ginger. All-natural, Blueberry Dream is packaged in 12 oz. glass bottles and sold individually and in 4-packs for $2.39 and $8.99 respectively. The soda is sold in restaurants and specialty stores in Maine, Massachusetts and Rhode Island. For more information, please call (800) 494-0802. Ginseng UP has introduced an apple flavor. The new flavor is 96 percent real apple juice blended with a touch of sparkling water and packed with premium ginseng. Ginseng UP is and is sold in single serve 12 oz. bottles for between $1.19 and $1.29 and in 4-packs for between $4.69 and $4.89. Ginseng UP is currently sold in metro New York, New Jersey, eastern Connecticut and southern Florida at select ShopRite, Walgreens, Whole Foods, and Publix locations. For more information, please contact (508) 799-6178. Jones Soda Company has announced the launch of 16 oz. cans of Jones Pure Cane Soda. The new line is emblazoned with bold black and white fan-submitted photos synonymous with the Jones’ brand. The new product is specifically aimed at the convenience store channel and will be available in Jones’ most popular Pure Cane Soda flavors: Green Apple, Berry Lemonade and Strawberry Lime. Jones Pure Cane Soda cans have a suggested retail price of $1.29 and are distributed at convenience stores nationwide. For more information, please call (206) 624-3357. SIPP eco beverage company has introduced a Berry Rhubarb flavor. The new flavor is made with all-natural organic ingredients: tart rhubarb, sweet strawberries, vanilla, and a touch of agave nectar. SIPP beverages are packaged in 12 oz. glass bottles and have a suggested retail price of $2.75. The sparkling drinks are distributed to over 170 natural health food stores, restaurants and hotels in the 16 states throughout the United States. For more information, please call (866) 222-4735. Oogavé all-natural soda has introduced a new Strawberry Rhubarb flavor. The soda is infused with the taste of freshly picked 12 BEVERAGESPECTRUM.OCTOBER.2011

strawberries punctuated with tangy rhubarb and contains no preservatives or corn syrup. Oogavé is the first soda sweetened only with agave nectar and contains 100 calories per bottle. The soda is packaged in a 12 oz. glass bottle and has a suggested retail price of $1.99 and $4.29-$4.99 for a 4-pack. Oogavé sodas are distributed nationwide. For more information, please call (877) 664-2833.

ENERGY DRINKS CALIDRIS 28 AG has launched açaí berry drinks 28BLACK and 28WHITE in the United States. 28BLACK is all-natural, slightly carbonated and contains Q10, Vitamins B6, B12, guarana and isomaltulose, a natural form of sugar that is found in honey and sugar cane. 28WHITE is a sugar-free, zero calorie, stevia-sweetened version of 28BLACK. The products are packaged in 250 mL cans and have a suggested retail price of $2.25. 28BLACK and 28WHITE are sold in select retail stores in Los Angeles, New York and Miami. For more information, please call +352 26 37 19 0.

Juice AriZona Beverages has announced the addition of a raspberry flavor to its Half & Half line. AriZona Raspberry Half & Half pairs a premium-brewed black tea with AriZona’s classic lemonade and adds an additional flavor of ripened raspberry. As with all AriZona products, Raspberry Half & Half contains no artificial flavors, colors or preservatives. The product is packaged in a 20 oz. red PET plastic bottle with AriZona’s classic checkerboard pattern in pink and yellow and has a suggested retail price of $1.00. Raspberry Half & Half Lemonade is currently distributed in the Northeast and will roll out nationwide during the remainder of 2011. For more information, please call (516) 812-0260 Arizona Beverages has also introduced a new flavor to their virgin cocktail line, Strawberry Colada. Joining AriZona’s Piña Colada, the Strawberry Colada is made with a blend of all-natural strawberry puree and an authentic coconut cream from renowned producer of cream of coconut Coco Lopez. The drink is packaged in a vibrant red 20 oz. PET bottle resembling the color of ripe strawberries. It has a suggested retail price of $1.00 and the virgin cocktail contains 90 calories per 8 oz.

serving. Distribution has begun on the East Coast and will continue nationwide throughout the year. For more information, please call (516) 812-0260. Campbell Soup Company has introduced V8 V-Fusion Smoothies. The smoothies are the first 100-percent fruit and vegetable juice smoothies available in the juice aisle and contain no added sugar, artificial colors, flavors or preservatives. The new line is available in three varieties: Strawberry Banana, Wild Berry and Mango. The drinks are packaged in a 36 oz. bottle and sold for a suggested retail price of $3.99. V8 V-Fusion Smoothies distributed in grocery and mass merchandise stores nationwide and, for a limited time, 9.5 oz. bottles will be available at select Wal-Mart stores nationwide for $.50. For more information, please call (856) 342-3717.

TEA Honeydrop Beverages has launched Green Tea, Lemon Tea, and Lemon Ginger Tea

blends. Each 14 oz. glass bottle of Honeydrop contains one tablespoon of pure wildflower honey, domestically sourced from regional beekeepers across the U.S. Honeydrop has a suggested retail price of $1.99. The product is distributed at leading natural and gourmet grocers nationwide, including Whole Foods and Nugget Markets. For more information, please (646) 942-8058.

MILK Dean Foods has announced the nationwide retail launch of TruMoo Chocolate Milk. TruMoo milk is low-fat and contains 150 calories and 10 grams of added sugar per 16 oz. bottle. The product has a suggested retail price from between $1.29 -1.99. After successful regional retail and school pilots in the Northeast and Pacific Coast regions, virtually all of the flavored milk across Dean Foods’ family of regional brands is converting to TruMoo, making it one of the largest milk brands in the country by sales and by volume. For more information, please call (214) 721-7766.


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Jetway Inc. recently launched Jet Lag Beverages. Jet Lag contains a proprietary blend of five vitamins, six minerals, and three herbs that biologically correlate with the relief and prevention of specific jet lag symptoms. Each of brand’s four SKUs are named for iconic destinations from around the world with a flavor profile based on the fruits and flavors that are indigenous to each region. The beverages have no calories or caffeine. Jet Lag is packaged in a 16.9 oz. PET bottle and has a suggested retail price of $2.50. For more information, please call (808) 352-2939.

Something Natural, an all-natural flavored sparkling water, has launched in New England through Blue Coast/Great State Beverages. The brand blends sparkling water with fruit flavors. Each bottle contains 30 calories and has no artificial sweeteners or preservatives. The brand is launching with five SKUs: Black Cherry, Blueberry Lemon, Pink Grapefruit, Raspberry Key Lime, and Strawberry Peach. For more information, please call (202) 421-3785.

Zenify is a new “anti-stress” beverage. The product contains a unique combination of L-Theanine, GABA and Glycine and is designed to provide a calm, sharp and focused mental attitude. Zenify has suggested retail price of $1.99 per 12 oz. can and is sold at several retailers in Los Angeles and online at zenifyed.com. For more information, please call (213) 415-1811. LifeAID Beverage Company has announced the launch of GolferAID, a functional beverage designed to enhancing the array of functions required while playing a round of golf – power, focus, balance, endurance and flexibility. Developed by doctors, GolferAID is 100 percent natural and contains no artificial sweeteners, high-fructose corn syrup, artificial colors, or caffeine. Each 12 oz. can contains 45 calories and has 2691 milligrams of active ingredients in the form of vitamins and supplements and nine grams of organic blue agave. GolferAID comes in 4-packs for a suggested retail price of $11.95 and is distributed at 1500 golf courses in the United States. The product is also available for sale through the company’s website. For more information, please call (888) 558-1113. Harmonix has introduced Sleep Formula 39. The product is made with a proprietary combination of sleep ingredients – including 5-HTP, melatonin, GABA and L-Tryptophan – which help you fall asleep, stay asleep and avoid morning grogginess. Sleep Formula 39 is packaged in twin packs of 2 oz. single serving bottles for a suggested retail price of $5.49. The product is distributed in all metro Atlanta area CVS stores, select GNC and Rite Aid stores in Atlanta and at gnc.com. For more information, please call (404) 913-1039. 14 BEVERAGESPECTRUM.OCTOBER.2011

Nature’s Omega has introduced Omega Water, the first flavored bottled water fortified with 100 milligrams of Omega-3 and six essential daily vitamins. The water comes in four flavors: Lemon Squeeze, Orange Splash, Fruit Fusion and Berry Breeze. Omega Water has zero calories, is sugar free and naturally flavored. The water has a suggested retail price of $1.99 for a 20 oz. bottle. It is currently available at Duane Reade stores throughout New York City as well as Wegmans, Hy-Vee, Roundy’s in the Midwest and Northeast. For more information, please call (570) 655-7755. Hawaiian Springs announced that its Young Natural Artesian Water bottles will bear the emblem for Preserving Paradise, the conservation initiative the company launched this spring. Under the Preserving Paradise initiative, the company will dedicate a portion of its sales to supporting Hawaii’s environmental organizations to protect the Islands’ fragile and unique ecosystem, particularly endangered native flora and fauna. Hawaiian Springs is packaged in 330 mL, 500 mL, 750 mL, 1 liter and 1.5 liter bottles and as well as 500 mL and 1 liter 6-packs. The products have a suggested retail price ranging from $0.89 for the 330 mL bottle to $9.99 for the 1 liter 6-pack. Preserving Paradise bottles are on shelves now in Hawaii, and are on their way to markets i n the U.S. mainland. For more information, please call (808) 483-0520. Kiwaii 100% True New Zealand Spring Water is bottled directly from a protected and sustainably managed source—the pristine Blue Spring on the North Island of New Zealand. Kiwaii contains natural electrolytes and minerals for optimal bioavailability and hydration. The product

Open A CAn of WhoopAss and you open a beverage unlike any other on the market. This multi-functional energy drink packs a one two punch that will keep you going and work to repair your muscles after rigorous or extreme exercise. IN EVERY CAN Amino Acids such as Taurine, L-Arginine, L-Carnitine, L-Lysine: the building blocks of protein that are critical to metabolism. Yerba mate, grape extract, and polyphenols from green tea, which have been linked to supporting workout recovery. A robust Vitamin Blend: B2, B3, B6, B12, and a total 2250 ORAC Units: Equal to antioxidant power of 2.5 servings of vegetables.


JOneS WHOOpASS 2010 beSt prOduCt relAunCH


contact: Dan Ashby Director of Sales West • 949.361.8611 • dashby@jonessoda.com John Wolgamot Director of Sales East • 609.744.5466 • johnw@jonessoda.com

is packaged in 500 mL and 1 liter PET bottles for $1.39 and $1.99 respectively. Kiwaii is available in over 1,200 outlets through national distributors UNFI and KeHE, as well as several regional distributors. Kiwaii is authorized for sale in Giant Foods, Stop & Shop, Shaw’s, Hy-Vee, Roche Bros., Gelson’s, and Nugget Markets. For more information, please call (877) 454-9244. Nestlé Pure Life has introduced a “Pink Pack” of Pure Life bottled water designed to support breast cancer awareness. For each pack produced, Nestle will donate 10 cents to The Breast Cancer Research Foundation with a minimum donation of $350,000. 90 cents of every donated dollar will go toward research and awareness programs. The special packs are marked with a symbolic pink ribbon and the BCRF logo and are available at retailers nationwide. For more information, please call (203) 629-7219.

COCONUT WATER TONGO Coconut Water launched a line of in 16 oz. bottles in convenience stores in the Western United States. TONGO Coconut Waters feature all-natural citrus flavors and a touch of organic blue agave nectar. The beverages are packaged in recyclable 16 oz. PET bottles. For more information, please call (760) 231-0806. Bigelow Tea Company has launched a Coconut Water and Green Tea Mix. The powder mix is all-natural, gluten free, fat free, and contains no high fructose corn syrup or artificial sweeteners. The new line comes in original, pomegranate, and mango flavors and each individually wrapped packet contains 50 calories. The line is sold in six-packet box with a suggested retail price of $5.99 and is distributed nationwide. For more information, please call (203) 334-1212. KonaRed has launched KonaRed Coconut Water. The new beverage is a mix of coffee fruit extract and the water from young green coconuts. KonaRed Coconut Water is available at grocery and convenience stores throughout Hawaii, California, Washington, Oregon, Idaho, Utah and Montana. The suggested retail price for the new beverage is $2.99 -$3.49. For more information, please call (808) 212-1553.


Maxim / Ajmera, Inc. has introduced Réva Natural Coconut Water Powder. Réva is a powdered coconut water designed to mix with water. It’s all-natural and has 30 percent of the recommended daily allowance of potassium in each 16 oz. serving. The product comes in three flavors - original, mango and pineapple - and is packaged in 16 gram packets. Réva has a suggested retail price of $4.99 per eight-packet box and is currently sold online at Amazon.com. For more information, please call (800) 476-2257.

VODKA Russian Standard Vodka has announced the launch of Russian Standard Gold in the U.S. market. The vodka is inspired by the recipe developed by Russian chemist, Dmitri Mendeleev, inventor of the periodic table of elements. Russian Standard Gold is fourtimes distilled, charcoal filtered and uniquely crafted with ginseng and hand-selected Russian winter wheat. It is soft on the palate and has hints of spice, vanilla and cinnamon notes. The product is packaged in a 750 mL bottle with gift box and embossed gold-foiled label. Russian Standard Gold has a suggested retail price of $45 and is available at select retail stores nationwide. For more information, please call (212) 679-1894. Voli Light Vodka is a new low-calorie fruitinfused vodka. Voli Light Vodkas are on average 25 to 40 percent lower in calories than leading brands and contain no more than 81 calories per serving. The vodka is distilled from French wheat and pure spring water and infused with multiple fruit flavors. The product comes in five varieties: Original Lyte, Lemon, Vanilla, Raspberry Cocoa, and Orange Vanilla. Voli Light Vodkas are packaged in 750 mL bottles and have a suggested retail price is $19.99. Voli Light Vodkas are distributed at select retailers nationwide. For more information, please call (310) 289-1092. Pearl Vodka has introduced a new Wedding Cake flavor. The micro-batch vodka is distilled five times infused with flavors of vanilla almond cake and rich buttercream frosting. Pearl Vodka Wedding Cake is distributed nationwide and has a suggested retail price of $12.99 for a 750 mL bottle and $14.99 for 1 liter bottle. For more information, please call (314) 772-2626.

WHISKEY Johnnie Walker has introduced Johnnie Walker Double Black to the United States. The limited edition whisky is blended from a mix of select single malts from Johnnie Walker’s reserves including both naturally smoky aged whiskies and whiskies matured in deep charred oak barrels. Double Black has a full-bodied flavor, intense smoke, dried fruit and creamy vanilla notes. The product is sold in a 750 mL bottle, has a suggested retail price of $40, and is sold at select retailers throughout the United States. For more information, please contact (203) 229-2100. Ole Smoky Moonshine is Tennessee’s first legal moonshine. The 100 proof beverage comes in three varieties: Original Unaged Corn Whiskey, Apple Pie Moonshine (Ole Smoky’s moonshine apple juice, ground cinnamon and spices), and Moonshine Cherries (fresh maraschino cherries soaked in moonshine). Ole Smoky Moonshine is packaged in 750 mL glass jars and each variety sells for between $24.95 – 34.95. The product is sold online as well as in retail stores in 17 states and select Sam’s Clubs around the country. For more information, please call (865) 436-6995.

WINE Black Box has launched a secondary package size for three of its wines. The new 500 mL Tetra Pak cartons are the equivalent of three servings per pack and come in Cabernet Sauvignon, Merlot and Chardonnay varietals. The wines have a suggested retail price of $4.99 and are distributed nationwide. For more information, please call (415) 912-3860. Temps de Flors is a new Spanish wine now available in the United States. The wine is made by the Sumarroca Winery, best-known for their sparkling wines, or Cavas. Temps de Flors is an aromatic three-grape blend made with Muscat, the native Catalan grape Xarello, and Gewürztraminer. The suggested retail price of a 750 mL bottle of Temps de Flors is $13.99. For more information, please call +34 93 -891-1092. Gnarly Head has introduced Authentic Red, a robust Zinfandel-based red wine blend. The


wine is made with grapes harvested from the famous gnarled old vines of Lodi, Calif. Authentic Red is packaged in a 750 mL bottle and has a suggested retail price of $11.99. The wine is distributed nationally throughout most of the United States. For more information, please call (707) 265-1715.

SPIRITS DRAMBUIE Liqueur has announced the U.S. introduction of DRAMBUIE 15, a refined, drier expression of the original DRAMBUIE Liqueur. The new offering is made exclusively with 15-year-old Speyside malt whiskies and infused with a secret recipe of herbs, spices and heather honey. DRAMBUIE 15 is 43 percent alcohol by volume and has a suggested retail price of $59.99 for a 750 mL bottle and $79.99 for 1 liter bottle. DRAMBUIE 15 is distributed nationwide. For more information, please call (305) 573-8511. Kingfish Spirits has introduced a new strawberry flavor for its line of CREAM products. Strawberry CREAM has been formulated with natural and artificial strawberry flavors and contains a proprietary blend of whipped cream ingredients tinged with a smooth alcohol-infusion (15 percent ABV). The product has a suggested retail price from between $9.99 and $12.99 per 375 mL can and is currently sold at licensed liquor, convenience, and grocery stores, as well as restaurants, bars and clubs in 40 states. For more information, please call (866) 801-5122.

MIXERS Irish Dog Bloody Mary Mix is a premium bloody mary mix found in over 35 markets across 19 U.S. states. Irish Dog is unique in flavor using beef-bullion and other spices, married with a smooth tomato cocktail that is gluten-free. Irish Dog also proudly supports The Brown Dog Foundation of Nashville, which helps pet owners in financial crisis provide treatment for pets in need. They donate a portion of each bottle sold to Brown Dog. The bottles are 32 oz. and retail for $5.99. For more information, email info@ drinkirishdog.com or call 888-736-6491.


What’s hot – and what’s not – in stores now


ALOE 52 Weeks through 10/2/2011 SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart.

Despite all the attention given to the category – new brands, lots of buzz – It’s still hard to draw any kind of meaningful insight about aloe drinks here, except for one distinct trend: that sales for the small category are up by almost 25 percent in the small number of brands that symphony/IRI is tracking here. With new entries and new popularity, however, expect to see a very different set of numbers this time next year.”


Dollar Sales

Change vs. year earlier

Fruit of the Earth



Lilly of the Desert



Aloe King















Aloe Organics



Lakewood Organic



Aloe Life






Aloe Green



SOURCE: Symphony/IRI. Total food/drug/c-store/mass excluding Wal-Mart.



52 Weeks through 10/2/2011

BEER $22,044,006,000

BOTTLED JUICES $5,166,771,000

BOTTLED WATER $7,847,818,000

ENERGY DRINKS $7,368,366,000

SPORTS DRINKS $4,082,547,000

TEA/COFFEE $3,232,020,000







SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart.


TEA Brand

HOT! AriZona Arnold Palmer Dollar Sales



Lipton Brisk Tea Lipton

Change vs. year earlier


HOT! Rockstar Dollar Sales

Change vs. year earlier


Red Bull





Monster Energy






Lipton Pureleaf



Diet Snapple



AriZona Arnold Palmer











Monster Mega Energy



Java Monster












Gold Peak



Full Throttle



Lipton Diet



Monster Energy XXL



SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 10/2/11

Cappuccino/Iced Coffee Brand


NOT! Lipton

HOT! Illy Issimo Dollar Sales


Change vs. year earlier





Seattles Best



Doubleshot Light



SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 10/2/11

Energy Shots Brand

NOT! Full Throttle

HOT! E6 Dollar Sales

Change vs. year earlier

5 Hour



Stacker 2 6 Hour Power



5 Hour Energy Extra Strength



Red Bull



Private Label



Private Label



Illy Issimo







Stacker 2



Monster Hitman






Spike Double Shot











Main St. Cafe



SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 10/2/11



HOT! Natural Ice Dollar Sales

Change vs. year earlier

Bud Light






Coors Light



Miller Lite


SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 10/2/11


Private Label

NOT! Monster Hitman

HOT! Sparkling Ice Dollar Sales


Change vs. year earlier





San Pellegrino




La Croix



Natural Light



Sparkling Ice



Busch Light



Poland Spring






Topo Chico



Miller High Life






Keystone Light



Cascade Ice



Natural Ice



Crystal Geyser



SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 10/2/11

NOT! Natural Light

SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 10/2/11

NOT! Poland Spring



A better way to experience beer

By Christopher Furnari

GABF TAKEAWAYS IF YOU WERE LOOKING FOR the next big trend in craft beer at the Great American Beer Festival, you had a lot of choices. With so many styles being poured and more breweries than ever participating, drawing a single conclusion isn’t in the cards. So let’s start with what we know, instead. 2011 has been the year of cans. More and more breweries have adopted the package as a legitimate way to get product to the consumer. Take a quick look at the brewery that took home the most awards at this year’s GABF competition – Sun King Brewing – and it’s apparent that the trend is here to stay. But let’s face it – consumers are looking for more than just a pretty package. So what else should you pay attention to? Here are 7 things to look for before next year’s fest. The beers gone sour While so called sour beers may not be the new IPA, they are increasingly becoming an important part of the market. 80 sour offerings were available for tasting at this year’s GABF, and there are now five categories brewers can choose to enter their sour beers for judging. If you need more proof that sour beers are catching on, look no further than Avery Brewing, whose barrel room has swelled to over 250 barrels, 100 more than last year. The brewery also shipped 620 cases of sour beer in 2011, up from the 97 they shipped in 2010. Joe Osborne, Marketing Director for Avery, attributes much of the interest in the category to the style’s ability to pair with food. “It’s such a unique offering and its finding this presence with foodies,” he said. “I think you are going to see more brewers get into sours.” Beer and Food Pairings are ‘trendy’ Foodies, chefs and craft beer experts already agree that beer pairs with food better than most wines. Now, it is becoming even more obvious that the consumer is actually seeking out beers that they can take home to pair with their meals. 22 BEVERAGESPECTRUM.OCTOBER.2011

The Brewer’s Association already puts on SAVOR – an American craft beer and food experience - once a year, after recognizing consumer demand for more pairings. The association added two similar programs at GABF. Nine different pairing options were available at the Beer and Food Pavilion while over in the Farm to Table area, 11 gourmet chefs from around the country prepared dishes to pair with 12 different breweries beers. More recently, at the NBWA conference in Las Vegas, beer industry retailing consultant Bump Williams discussed the growing trend with a room full of distributors. In the discussion, Williams advocated for more secondary beer placements in the cheese departments of high-end grocers. Leading the “I.P.wAy” It wasn’t long ago that your average craft beer drinker chose a pale ale as their ‘goto’ choice for off-premise consumption. The industry has since trended towards higher ABV’s and the demand for hoppier styles has grown. The IPA category is on fire, with 253 IPA craft brands now selling in Supermarkets compared to 177 in 2010. This trend was remarkably evident at the GABF: nearly every brewery at the fest was pouring at least one IPA. The consumer demand for IPA’s is at an all-time high and retailers should be dedicating significant shelf space to the category. The big names can still bring it If you thought historic and well-known brands like Boston Beer or Dogfish Head had lost their ‘snob appeal,’ think again. The Samuel Adams brand took home four medals, including a gold in the English-style IPA category. Dogfish Head took home just two medals, but for beers it originally released in 1999 and 2006. Deschutes, the country’s fifithlargest craft brewer, took home three medals while the nation’s third-largest brewer - New Belgium Brewing - won gold in the popular American-Style Sour Ale category for Le Terroir.

Anchor Brewing is an old dog, with no new tricks. While Anchor is an iconic brand and has built a business on being reliable, it’s clear that the company clearly needs some resuscitating. The last time Anchor took home a medal was 1997, and although they stopped submitting entries to the GABF in the early 2000’s, the Brewer’s Association did confirm that they entered this year’s contest. They weren’t pouring anything new or terribly exciting and nearly every time we walked by their beautifully constructed wood booth, there wasn’t much of a line. After its sales last year, the brand has done little to re-image a tired look that is losing favor amongst the youth. The youth of the nation While it’s hard to tell if the overwhelming amount of 20-somethings in the crowd attended to re-live their college kegger days (with better beer), or if they actually appreciate the artistry of the craft, it’s clear that the younger generation is certainly driving the recent success of craft beer. “My first experience with the younger attendees was that they didn’t come there to learn about beer as much as they were to have a good time,” said MateVeza founder Jim Woods. “I am seeing a change in that and a lot of the younger generation is as educated as people who have been around the industry for a while. That is very refreshing to see.” Pay Attention to Sun King Brewing If you win eight medals at the GABF, you are doing something right. The boys at Sun King Brewing had a coming out party this year, taking home four gold medals, three silvers and a bronze. The victories alone should help an emerging brand that only started brewing in 2009 gain some serious recognition in the coming years.

By Gerry Khermouch

SECRET ORIGINS OF AUTHENTIC BRANDS IT’S BECOME ONE OF THE MORE overused words in the marketing lexicon: authentic. Yet there’s no denying that many consumers are looking to support brands that don’t seem to have been fabricated in a corporate conference room, that have something real about them – whether the persona of their founders, their local provenance or their retrieval of an age-old tradition – that might seem to help ground the users’ own existence. In beverages, how does it apply? The New York Times offered an intriguing take on authenticity a few weeks ago, noting how the word lately is so often used by politicians, celebrities, social media coaches and college admissions advisers as to be approaching meaninglessness. “What you can’t do is be told by a social media guru to act authentic and still be authentic,” Jeff Pooley, a media and communications professor at Muhlenberg College, told the paper. He said authenticity today is more accurately described as “calculated authenticity” — “stage management” is how the Times paraphrased it. I like “stage management,” because that’s generally what we’re talking about when discussing beverage brands as authentic. To me, a lot of it comes down to having a memorable reasonably true story behind the brand, and sticking to that story reasonably consistently as things develop. I like to refer to these origin stories as “creation myths,” (though “myth” often gets me in trouble with brand founders who phone me to complain – although at least a few of them made it up, and you know who you are!) But I mean the phrase more in an archetypal sense, as a compelling story upon which consumers can hang their perceptions, emotions and disposable incomes. The process seems most straightforward for the craft beer category, where it’s sometimes sufficient just to have a genuine passion for brewing and a willingness to experiment. That story has been retold, oh, about 2,000 times lately as craft breweries have proliferated. Consumers clearly like hearing it, but for craft brewers the 24 BEVERAGESPECTRUM.OCTOBER.2011

task of being authentic has also gotten less complicated -- after all, during the 1990s craft boom, quasi-religious wars were waged between microbrewers who produced their own suds and contract brewers like Sam Adams and Pete’s Wicked Ale who were attacked as inauthentic for relying on others for the bulk of their production needs. That issue has nearly dissipated, with the market accepting Sam Adams founder Jim Koch’s old rejoinder: “If Julia Child comes to your kitchen and cooks a great dinner, is it your dinner or Julia Child’s?” Even the identity of Blue Moon as a Coors brand or the acquisition of Goose Island by Anheuser-Busch don’t seem to have unduly upset the perception of those brands as authentic. It gets murkier on the non-alcoholic side, where the opportunities for hands-on craftsmanship and differentiation are fewer and there’s a more established tradition of snake oil salesmanship. Those factors seem to put an even higher premium on having an effective creation myth. But it doesn’t have to be a brand new myth for every new brand. What are some compelling tropes? One is the Everyman who doesn’t like the choices in a given segment and creates a better alternative – Darius Bikoff, for instance, rummaging for bottled water in Manhattan when his water was cut off and having the insight that led to the creation of Smartwater. A particularly endearing subset of this myth is the parent – moms work best – who detests the horrid beverage choices available to her children and sets out to create a healthier one right in the kitchen. That sonata has been played with wonderful rubato flourishes by a long list of entrepreneurs, lately including Hint water creator Kara Goldin. Another is the intrepid seeker who treks to the far reaches of, say, the Amazon rainforest, to bring back healthful superfruits or herbs that can be bottled for the American public, often simultaneously empowering and enriching the indigenous people who grow and harvest the plants. The founders of brands like Sambazon

acai and Guayaki yerba mate have skillfully heralded that role, and the combination of adventure, exoticism and uplift seems really appealing to a lot of consumers. If you can harness a strong creation myth like one of those, it can give you a great leg up. But there are some corollaries: For one, you need to capture that story at the outset, rather than trying to graft a good story onto your brand down the line. That seems to have been a flaw in the plan of the otherwise well-crafted New Leaf Tea, which years into its existence strained to add instant personality via such unconvincing efforts as proclaiming itself “the official tea of taste” and having its employees strut around its trade show booths in referee shirts. Also, consistency matters. If you’re buying a brand where the founder is at the center of your creation myth, then it helps to keep that founder around for a while, even once most of the real work migrates to professional managers. Coca-Cola has been smart to keep Honest Tea founder Seth Goldman in the mix -- I wouldn’t be surprised if down the road, once the brand is fully established, the company doesn’t offer Goldman a broader role where his “brand” can authenticate other Coke moves toward healthier, sustainable products. By contrast, the departure of Clayton Christopher – who famously brewed his first batches of Sweet Leaf Tea from his grandmother’s recipe using pillowcases as giant teabags – from the now-Nestle Waters-owned brand may rob it of some of its down-home mojo. Nevertheless, NWNA has shown consistent mastery at taking purified municipal water and wrapping it in brands that represent a seemingly infinite series of pastoral springs, parks and mountains, so as Christopher’s “Granny” goes national, it’ll be interesting to see how the trip treats her. Longtime beverage-watcher Gerry Khermouch is executive editor of Beverage Business Insights, a twice-weekly e-newsletter covering the nonalcoholic beverage sector.


By Rick Hill


WHEN BARQ’S LAUNCHED ITS Soviet Union Going Out of Business sale, it set the industry on its ear and generated worldwide publicity for what would turn out to be the only organized celebration of the end of the Cold War. It generated an eye-popping 30 percent sales increase -- but not for the reasons most folks think. We launched the sale within days of the collapse of Soviet Communism. The offer was simple: send in proofs-of-purchase from specially-marked 12-pack and 2 L bottles of Barq’s and receive an otherwise unobtainable collection of genuine USSR-era memorabilia. So otherwise unobtainable was it that I would need to go to Moscow to personally find and select it, and that’s a whole other story. It would be an adventure to say the least. The announcement was carried by the global news media and generated enormous enthusiasm by Barq’s bottlers eager to get on board to make history themselves. As a beverage marketer, you should pay attention to this event as a case study. It satisfied consumers and trade customers – the two major constituents a beverage marketer has to serve daily. For the distributor and retail trade, you must

provide competitive pricing and margins, periodic promotional incentives and support for their go-to-market agenda. But the trade asks that of everyone – and given the trade’s (understandable) impulse to put its agenda ahead of yours, it is difficult to distinguish your items from everyone else’s. For consumers, you offer important benefits that include fulfillment of refreshment needs, variety and pricing that represents value, but repeat business comes only once consumers appreciate a unique product benefit. Keep in mind that it is important to distinguish benefits vs. attributes. Benefits, simply put, are a function of what the product does for the consumer, vs. what it is. Consumers do not want a ¼” drill; they want a ¼” hole. Beverage products are all consumed because they provide sensory and physiological benefits: refreshment, nutrient intake, and satisfaction of flavor cravings. Most brands offer these benefits, but unless they’re designed to provide more than that, it’s a pretty typical set of product characteristics. The trade understands this and, until you show them otherwise, they will treat your items as commodities. Still, you’ll get your chance to impress. The good news is that because of an onslaught of new product entries and channel choices – occasioned by historically low barriers to industry entry – beverage consumers are increasingly on a continuous trial curve and are willing and able to try new beverages when and where they become available. On the other hand, brand loyalty is eroding in favor of impulse stimuli offered by new (or newly discovered) value propositions, unique flavors, new benefit claims and price incentives. The vast majority of new beverage trial occurs at the individual consumer level, typically via single-serve, cold bottle purchases for immediate consumption. Products enjoyed in this manner can lead to repeat purchases and ultimately to multi-pack take home buying, but only if the product makes its case in the midst of the flood of competition. The bottom line of all this traffic means that products have a tough time jumping off the shelf and so stay there. Brands that make news and make waves get the attention and take the leap. To make that happen, you need a twoedged sword: you have to energize both the trade and the consumer simultaneously. Consumer-only appeals seldom work, mainly because there is an inadequate effort made to build up retail inventories and visibility. Tradeonly programs may create a week

or two of display or feature, but are almost always price-centric alone and do nothing to distinguish the brand. Go for both parties at the same time. Generate excitement in the trade among consumers. Regardless of their age, brands benefit from taking the perspective that they’re still new and untried by most consumers. The types of news-making programs often used to launch new brands works for old brands as well so long as new news is offered. That was the logic behind announcing Barq’s Soviet Union Going Out of Business sale. We executed quickly and the announcement was carried by the global news media; it also generated enormous enthusiasm by Barq’s bottlers eager to get on board to make history themselves. The only catch was that the vast majority of Barq’s bottlers did not produce or distribute the brand in 12-packs or 2 Liter bottles. Barq’s was basically a 6-pack brand that seldom took part in retail promotions invariably built around these key promotional packages. Truth is, the entire promotion was launched as the incentive for them to get Barq’s into promotional packaging and thus let the brand join the big leagues. Almost all bottlers did. The promotion went on to win the PMAA Super Reggie Award, Clio recognition, AdAge’s Top 100 Marketer status and included in the soft drink industry’s list of top 100 events in the preceding 100 years. But the real win was getting the brand into the bottlers’ and retailers’ promotional sets forever forward. Look at your go-to-market activities as a double-edged sword with a trade and consumer edge and look far upstream of consumers for real opportunities. Don’t expect products to jump off the shelf unless you give them a push by inducing the trade not only to just include, but also to rely upon your brand to lead an off-shelf promotional agenda. Being “Me Too” is bad anywhere and anytime. It is really awful in the promotional space. It’s equally awful if your packaging is generic, not promotionfriendly and fails to distinguish itself. Barq’s was the first to be available in a remarkable silver, unpainted can. Its quirky graphics were a package designer’s nightmare, but served to set it apart from its oh-so-polished competition. Choose your advertising and promotional partners with boldness. Barq’s focused on MTV and Headbanging to attract an equally non-traditional target market of 12-24 year old guys. Barq’s sponsored the launch of Beavis & Butthead since no one else would. Barq’s tied in with Freddie Kruger slasher flicks for the same reason. Barq’s launched in Manhattan with posters plastered everywhere, despite it being at best a quasi-legal activity. A side benefit to breaking out of the mainstream is that you can substitute the power of a great idea for big budgets. The Soviet Union prize pool cost under $80,000 and Gorbachev got zero dollars for appearing in the ads. Barq’s was in a (solo) buyer’s market for edgy advertising media and promotional properties. You need to be different and interesting to jump off the shelf. And when you jump, make sure you bring your parachute and your two-edged sword. Rick Hill, a longtime beverage marketer, is the Founder & CEO of BrandHeat Marketing



By Ray Latif


A LITTLE OVER A MONTH AGO, Ginseng UP, a company that produces a line of ginseng-laden carbonated soft drinks - and long believed by many to be one of dozens of businesses owned or controlled by the controversial Unification Church - issued a rather odd press release. The company announced that “after thirty years of popularity overseas” Ginseng UP was preparing for a full-scale national launch in the United States. However, the product, formulated and bottled in Worcester, Mass., has been sold throughout the United States since 1981. In a series of interviews with Vish Ganpati, the president of Ginseng UP, BevNET learned that the brand was undergoing somewhat of a relaunch focused around an active and concerted effort to distribute the product nationally. But having been in existence for 30 years, one has to ask: why now? Ganpati explained that the company was looking to capitalize on growing consumer demand for healthy lifestyle and functional drinks. Fair enough, yet when asked about the Unification Church and its involvement in the brand, as well as if and how the Church prompted the relaunch, Ganpati had few answers. Based on numerous media reports, it is clear that Ginseng UP had long been directly associated with Unification Church. The Church was founded by a Korean religious leader named Reverend Sun Myung Moon in 1954 and is known for a contentious interpretation of Christianity in which Rev. Moon is considered to be a Christ-like figure. Not surprisingly, the Unification Church is often vilified as a cult. Cult or not, the Unification Church has owned or controlled many businesses in the past, including newspaper The Washington Times, fishing business True World Group, Inc., and, yes, Ginseng UP. A public relations representative for the Unification Church, who spoke to BevNET on the condition of anonymity, 30 BEVERAGESPECTRUM.OCTOBER.2011

stated that Ginseng UP was once owned by a holding company associated with the Unification Church. However, the representative went on to say that the holding company – which operates under the name “UCI” and was previously named “Unification Church International” severed relations with the Church “several years ago.” He said that he could not pinpoint the exact year when the two organizations parted ways. But the reason for the split is clearer, according to media reports: UCI is controlled by one of Rev. Moon’s sons, Hyun Jin (Preston) Moon. Preston Moon has been involved in public disputes, including lawsuits, with his family over the direction of UCI’s funding and profits in recent years. But that still doesn’t explain why Ganpati claimed to know absolutely nothing about the company’s ownership prior to his arrival in May of 2010. Asked about that ownership, he said only that Ginseng UP is currently owned by “a small group.” Ganpati declined to give any further details, and stated, “I have zero to do with anything [related to] ownership.” A report in the Bergen Country (NJ) Record was able to pinpoint an office for Ginseng UP that was located at the same address as an office of True World Group – but a True World Group representative told the paper that UCI didn’t own Ginseng UP, despite the common address. Despite the shadows surrounding Ginseng UP’s ownership, the relaunch of the product has generated a considerable amount of interest, particularly at the recentlyheld Natural Products Expo East

show in Baltimore. Ginseng UP was one of only a handful of products at the show using ginseng as the chief ingredient – one that has seen a steady rise in consumption among Americans over the last decade. The perceived benefits of ginseng range from energy enhancement and stress relief to memory improvement and treatment of impotency. And similar to other Asian “superfoods” - like aloe vera and gingko biloba – that have slowly trickled into the United States over the last two decades, ginseng is now found in dozens of energy drinks, bagged tea blends, nutritional supplements, as well as highly popular ready-to-drink products like AriZona Green Tea and Starbucks Doubleshot. Ganpati is betting that as mainstream awareness of ginseng continues to grow, so will Americans’ desire to consume larger quantities of ginseng – albeit in a more portable form. “We’re finding openness, and pent-up demand for ingredients that consumers have heard of and read about,” Ganpati said. “Now, there are products – like

Ginseng UP - that make these ingredients more accessible.” Additionally, it is Ganpati’s belief that over the last 10 years, three specific health and wellness trends have led to dynamic change in Americans’ consumption habits and, in the process, paved the way for Ginseng UP’s entry into the U.S. market. “First, there is a much larger market for functional drinks – it’s a huge demand driver,” Ganpati said. “Second, there is far greater awareness and acceptance of beneficial ingredients, like ginseng. And lastly, consumers are gravitating toward products that offer added health benefits. It’s not just what you keep out of your body - it’s now much more important about what you take in.” And for a product that he described as “the intersection of functional, health, and well-being,” Ganpati believes that Ginseng UP is primed for success in both mainstream and natural foods channels. As part of the brand’s relaunch, Ginseng UP has designed new contemporary labels etched with the tagline: “The Root of

All Power.” Additionally, Ganpati said that company will promote the Ginseng UP through partnerships with “healthy lifestyle” organizations and utilize mainstream video marketing as means of consumer education and exposure about ginseng and the brand. “We [want to] give consumers two good reasons to choose Ginseng UP: the taste, and the feeling you’re doing something really good for yourself with every sip,” he said. Ginseng UP is currently sold in metro New York, New Jersey, eastern Connecticut and southern Florida. The product comes in 12 flavors and is sold in single serve 12 oz. bottles for between $1.19 and $1.29 and in 4-packs for between $4.69 and $4.89. While UNFI currently handles distribution of Ginseng UP within the natural foods channel, Ganpati said that the company hopes to go national through Walgreens, where the product is already authorized for sale in its Florida locations. Where the profits might eventually go, however, appears to be anybody’s guess.




BIGGER PIECE of the PIE By Jeffrey Klineman

It isn’t a premium beer situation, where Bud Light and Miller Lite are leading their flagship brands in sales and distribution, but as the energy drink category matures – and its cohort matures with it –the low-calorie options are outpacing their line-mates. Recent shopper analysis by AC Nielsen in grocery and convenience channels indicates that this year, sugar-free and lowcalorie products have nearly doubled the pace of growth of core brands nationwide, 29 percent to 16 percent. While sales of the top three brands (Rockstar, Monster, and Red Bull) are still heavily weighted toward full-calorie products, lighter line extensions are becoming key parts of the portfolio. Driving the trend are an overall lightening of calorie profiles across categories, as well as the tiny caloric but evergrowing sales footprint of the energy shot. For Rockstar, the argument could easily be made that without its diet lines, the brand


would be a nonentity – fully 48 percent of its sales this year can be attributed to its sugar-free and zero-carb lines, while its hot “recovery” line (which is now up to three flavors) also has only 10 calories per serving. Monster (19 percent) and Red Bull (24 percent) both have lower percentage volume of sales from their diet offerings. But they are trying to juice the mix themselves. Recent introductions from Rockstar (Recovery, Xdurance) and Monster (Absolute Zero, Rehab) have extended the trend – they aren’t even introduced with full-calorie versions. And rumors are now circulating that Sugar Free Red Bull will be rebranded as Red Bull Zero – perhaps in an attempt to keep the brand in tune with overall trends. After all, at 24 percent, Red Bull’s share of sales through diet has held steady over the past two years, while it has grown for other brands. One great example of this, of course, is Xyience, which has gradually locked down

shelves as a purely calorie-free alternative to other brands. Recent news of Xyience’s extended presence in certain Costco outlets further solidifies its growing presence as a force to be reckoned with. Its “never-hadit-never-will” approach to sugar may have hampered it at the start, but as the overall trend moves toward zero-calorie product, Xyience is well-positioned to take advantage and grow share. Also helping the trend along are innovations in flavor technology. While energy drinks companies have been slower than other product categories to pick up Stevia as a sweetener, their brash taste profiles and fairly aggressive carbonation make artificial sweeteners easier to deploy. Xyience, for example began to gain share when it reworked many of its flavors. Of course, the functional rush is a bit different without the sugar, but it seems to be a high that consumers aren’t as interested in chasing these days. In any category.


Diet Energy

Fluid Motion Beverage has expanded distribution of Talon Sugar Free Blood Punch into Canada, where Talon Blood Punch’s cane sugar version has been the brand’s best seller for several years. Talon Sugar Free is authorized for sale in Couche-Tard’s Mac’s Convenience stores.

cluding WhoopAss Zero, is now available in the Canadian market. Jones also announced a 1-year sponsorship deal of the CFL’s Toronto Argonauts. WhoopAss Zero contains only 10 calories per can and is formulated to help restore energy and rehydrate your body after strenuous exercise.

XYIENCE has added Xenergy Xtreme

AriZona Beverages. AZ Energy Low Carb was featured at Mercedes-Benz Fashion Week in Lincoln Center, where AriZona Beverages was the Official Tea and Energy Drink Sponsor. AriZona AZ Energy Low Carb contains only 10 calories per 8 oz. serving and is packaged in a 15 oz. can. AriZona’s AZ Energy Low Carb is made up of vital nutrients, and 100 percent of the recommended daily value of Vitamins B6, B12, C and B5. The drink is made with natural juices from pears, apples, peaches, mangos and orange blossom honey.

Frostberry Blast to its lineup of energy drink flavors. The third in its collector can series, Frostberry Blast’s 16 oz. can features the image of Wanderlei “The Axe Murderer” Silva, a UFC middleweight fighter and international icon in the sport of mixed martial arts. The beverage is named for its frost-like color and is a balanced blend of blueberry and raspberry flavors, which — like all Xenergy beverages — is sugar and calorie-free. The Masters of Beverages, LLC. Spider

Energy is planning to add a sugar-free version of its Widow Maker energy drink. Spider Energy has recently expanded distribution to include Las Vegas and Northern California and the addition of a $0.99 prepriced can has more than tripled sales of the brand, according to the company Liquid




Liquid Ice Energy Drink is fortified with Vitamins B3, B5, B6 and B12 and contains Ubiquinone (CoQ-10). CoQ-10 is an enzyme naturally created in the body that promotes the efficient use of energy while preventing fatigue. Sugar Free Liquid Ice contains the same ingredients with less sodium, no carbohydrates and only 15 calories. Made with sucralose, Sugar Free Liquid Ice does not have the aftertaste or health concerns that are prevalent in many other sugar free drinks. ZUN Energy. ZUN LITE is the newest

ZUN SKU and has same taste and benefits as original ZUN Energy with only 20 calories. ZUN LITE currently sold in 20 states. ZUN recently expanded DSD distribution with Bernick’s Beverages and Vending in their Minnesota and Wisconsin markets. Jones Soda Co. has announced its pop-

ular line of WhoopAss energy drinks, in-


GCW, LLC. X-Treme Gladiator Sugar Free will be introduced to the North America market by the end of December 2011. X-Treme Gladiator Sugar Free is made is Austria with natural water from the Austrian mountains. Kronik Energy was selected as the official

beverage of the Arizona Centennial Celebration and debuted its new special edition Centennial collector cans in original and low-carb varieties. Fuel Energy. Fuel Sugar Free Energy Drink is the latest product launch by Fuel Energy. The 16 oz. sugar free energy drink contains B vitamins, 240 milligrams of caffeine and 200 milligrams of L-Carnitine. XL Energy Drink Corp. XL Sugar Free is a

lifestyle energy drink. The drink provides an energy boost for workout routines, heavy workloads, and leisure activities. XL’s marketing program consists of various promotions and activations at events, nightclubs and parties revolving around the day – andnight pace of each sales region. Hip Hop Beverage Corp. Sugar Free Pit Bull Energy Products contain no calories, carbohydrates, sugar or fat and are approved by the American Diabetes Association as suitable for diabetics. The Hip Hop


Diet Energy

Beverage Corporation Health Division will place its sugar-free energy products into locations and markets with a significant diabetic population including hospitals and senior living facilities, as well as programs focused on diabetes, health, wellness, weight-loss, and fitness. Fighter Energy is a new energy drink

tablet that can be dissolved in water or any other beverage for a customizable flavor. Fighter Energy is packaged in a tube of 10 tablets and each tablet contains five calories, no sugar, and 37.5 milligrams of caffeine. Fighter Energy drink is currently sold online at www.fighterenergystore. com and select retailers.

able in select natural food, high-end specialty markets and grocery chain stores, and online at www.ExDrinks.com. National Beverage Corp. Rip It Energy Fuel now offers Sugar Free F-Bomb and Sugar Free G-Force. The two zero-calorie, zero-sugar beverages contain sucralose as the primary sweetener and a proprietary blend of flavor enhancers. Bite Me Energy Drink sugar free is now

available for purchase on Amazon.com. The beverage is sold in cases of 24-packs of 16 oz. cans and includes free shipping on all orders. Celsius, Inc. has introduced an Apple Or-

Hype Energy Organic is the most recent

addition to the Hype Energy Drinks line. It is the only energy drink on the market to be certified organic by the USDA. The lightlycarbonated, champagne-colored beverage contains organic apple juice, organic aloe vera, organic tea and organic guarana extract and five viatmins. Hype Organic has no artificial colors or preservatives. The product is currently sold in over 40 countries and is available in two sizes: an 8.4 oz. can and a 16 oz. can. DNA Diet Energy Drinks are now available

in 4-packs. The new 4-packs launched in nearly 800 Walgreens stores in Florida and feature a buy-one-get-one-free promotion. The product comes in Sugar Free Citrus and CranRazberry flavors.

chard Blend flavor to its line of fitness energy drinks. Apple Orchard is naturally sweetened with stevia and powered by MetaPlus, a proprietary blend of green tea with EGCG, ginger, caffeine, chromium, B vitamins and more. The beverage contains no artificial ingredient, no preservatives and no artificial sweeteners, flavors or colors. HYDRIVE has redesigned and reformulated

its entire line. The relaunch is set to take place in early 2012. HYDRIVE is available in eight flavors that contain 30 calories and 6 grams of sugar per bottle. The five core flavors each contain 160 milligrams of caffeine and a unique blend of vitamins, electrolytes, and amino acids. HYDRIVE also comes in extra strength and decaffeinated SKUs. Shadow Beverages has introduced a

Go Fast Sports & Beverage, Co. has in-

troduced Go Fast Light. The product contains no preservatives, no aspartame, and no high fructose corn syrup. The product has 10 calories per serving, and gives you a longer, smoother, more sustained energy boost without the “jittery crash� associated with other energy drinks. Ex Drinks, LLC has reformulated Ex Slim Energy. The low-calorie natural energy supplement now contains Reb A stevia, a natural sweetener. Ex Slim Energy also contains Kombucha Tea Extract, Ginseng, Guarana, vitamin C, and B vitamins. The product has 5 grams of carbohydrates and 20 calories. Ex Drinks are currently avail-


line extension for its IRONCLAD energy drinks IRONCLAD ZERO is a zerocalorie, fatigue fighting supplement with hydration and electrolyte replenishing ingredients specially formulated for the industrial athlete. The drink contains taurine and caffeine. The beverage is packaged in a 16 oz. can and comes in two flavors: Maqui-Berry and Cherry-Lime. Shadow is also launching Berry & Lemonade and Sweet Tea & Lemonade flavors to its line of No Fear energy drinks. Both flavors contain Taurine, L-Carnitine, Arginine, no sugar and no calories. Phix, the all-natural, organic and vegan

energy drink mix, will be introducing

a sugar-free version within the next few months. Sugar-free Phix will feature several new flavors. For more information, visit www.phix.com.

Hansen has also launched Monster Rehab Tea + Lemonade + Energy. The new 10-calorie energy and hydration beverage contains a mix of electrolytes and antioxidants.

PBev LLC. Killer Buzz Sustained Energy Drink’s “Zero Emissions” formula is getting a new look. The new design features brushed aluminum and black core colors and is intended to convey the brand’s message of performance, while commanding attention on the shelf. Additionally, Killer Buzz has launched two new flavors: Grape and Hybrid Berry.

The FRS Company. FRS Healthy Energy diet product offerings are now available at major retailers nationwide. At only 20 calories, FRS offers a Peach Mango flavor that contains 325 mg of Quercetin, 85 mg of green tea catechins and 7 essential vitamins and is available in a resealable plastic bottle. FRS offers two other low-calorie options that are sweetened with stevia. The stevia-based products are packaged in ready-to-drink cans and available in Apricot Nectarine and Orange flavors. Like the entire FRS product line, the drinks are rich in B vitamins and vitamin C and contain the powerful antioxidant quercetin. All FRS diet energy choices are free of artificial flavors, colors and preservatives.

Hansen Beverage Co. Monster Energy has launched Monster Energy Absolutely Zero, a zero-calorie, zero-sugar energy blend. Absolutely Zero is number one in dollar growth and in dollar share gain year-to-date in convenience retail, according to Monster.


BEYOND ME-TOO: A New Generation of Functional Drinks Emerges By Jefferey Klineman

It’s probably unfair to name names.

Oh well. In the interest of showing how far things have come in the post-Vitaminwater world – and in the interest of having a little fun, (and also highlighting the war on punctuation and spelling that the category we’re about to talk about engendered,) let’s name a few anyway: There was IQH20. There was Speedo Sportswater. There were also Water +, Vital Lifestyle Water, Activwater, and Clearly Canadian Natural Enhanced Water: Blueberry (dailyVITAMIN). There was Jones 24C Multi-Vitamin Enhanced Water. When it comes to Vitaminwater metoos, there were a lot, and a lot of bad ones, okay? And, as a result, distributors and retailers are still pretty wary of brands that come to them with the idea of mixing up a bit of sugar, a few potentially functional elements and a relatively interesting bottle, and calling it a name with weird punctuation and phonetic spelling.


It’s easy to understand why folks wanted to knock off Vitaminwater. From a marketing, sales, and branding perspective, the company had it going on – even now, despite the derisive comments by some that Coke might have overpaid for the brand and its $4.1 billion price tag, it’s hard to dispute that the Glaceau stable of brands has become a major sales producer for its new owner. Between Vitaminwater, Vitaminwater Zero and Smartwater, Coke pulled in $1.2 billion in sales last year alone, according to channels covered by symphony/IRI – and that’s not counting a small retail chain called Wal-Mart. But what the brand pioneered – the growuntil-you-get-bought phenomenon that put profitability second to expanded reach – left a hard-to-swallow legacy for distributors and investors, and they’re not necessarily willing to put their money behind the next functional product that comes along. Particularly, they say, since the public largely understands that despite Vitamin-

water’s much-advertised use of a variety of commonly-occurring vitamins as part of its formulations, it’s largely accepted that the product isn’t going to do much in terms of making consumers healthier. While the product still has great taste and branding going for it, when it comes to functionality, for a new product to break out as a functional brand, many industry insiders believe that it’s going to have to break the mold. And with most of the me-toos finally fading into memory, marketers are once again making the argument that they can do it. “People are tired of the pixie dust phenomenon,” said Carl Sweat, the CEO of FRS, which aims to supply some of that true functionality through the fitness-oriented extract quercetin. “Consumers are deciding they want something stronger.” Sweat, himself a former Coke employee, has seen the obstacles left in the wake of Vitaminwater’s unfulfilled physiological promise. While he said he believes that the brand’s combination of taste and packag-

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ing leave it unassailable in its category, Sweat and other brand owners seem to be motivated by a belief that they have found a new generation of functional beverages that are actually able to back up the claims they make on the label. The market is there, as well, with functional beverage products expected to reach nearly $10 billion by 2014, according to the findings of a 2010 Mintel International study. While that would represent a mild increase of about $1 billion from 2009, it’s a bump that could theoretically be filled by a handful of strong, emerging brands. A runaway hit could easily overwhelm those expectations. But the time has to be right. “If we’d launched ten years ago, it would have been confusing to the public,” said Paul Nadel, the President of Neuro Beverage, which claims to offer an “operating system” for life through enhanced beverages. “We’ve have been accused of being a me-too. And now, I think people think of Vitaminwater as a good tasting beverage – they don’t really think of it as a healthy beverage or a functional beverage.” So rather than try to emulate Vitaminwater, this next generation has made it a priority to move away from the brand. The next generation of functional brands distinguishes itself by trying to present a scientific case for its products’ efficacy. They provide megadoses of vitamins and other compounds where once a simple Recommended Daily Intake (RDI) might have sufficed, introducing new elements whose presence can be quickly felt in the body. They even make an argument for better performing packaging styles, all while still attempting to show creativity and good taste. “Our bottle design, our structure/function claims, the advertising we’re doing, we’re trying to separate ourselves from that group,” of ‘me-too’ brands, Nadel said. “Clearly, we have to separate and distance ourselves from them.”


And for some of them, the investors and the distributors have started to re-appear, ready to move on and take a chance. The question is, are consumers emerging from the Vitaminwater era ready to move on, as well? “There are so many products that have gone through their life cycle where the more consumers find out the brand, the less they like it,” says C.J. Rapp, the founder of “mix-to-drink” Karma Water, which, like a growing cadre of products, uses a cap dispenser to push vitamins into a water bottle. If consumers are indeed interested in moving on, a front line of products is beginning to form by strength of the experienced hands and deep pockets that are powering their operations, but also by presenting brand arguments that do indeed seem to differentiate the products from the crowd of fallen me-toos. It’s an interesting group because none of them have yet broken out, and there are formats that range from single functional plays to brands that offer multiple SKUs as an “operating system” for a consumer’s life. Some are vitamin-based, while others rely on caffeine or other stimulants to drive home instant effects. What is certain here is that success for these brands is by no means certain – it’s sort of an “if-then” statement on time and momentum that will eventually determine if a new category has emerged from the long shadow of Vitaminwater’s apothecary bottle. But if it does, here’s what new product makers are gambling on: 1. Better Payloads Recently, Sweat and his old friend Lance Collins, who started Fuze and is now grabbing distributors’ attention through his next-generation “Super Drink” Body Armor, chatted at a trade show booth, daring each other to try to up the protein

contents of upcoming line extensions. The message was clear: more is better. “You’re going to try 25 grams of protein?” Sweat dared Collins. “Do you want to do the over/under for how many batches you throw out in a year?” It’s a dare that illustrates the challenge for functional beverage makers: Because so many of them are gambling that the public will no longer settle for the perceived weak functionality of Vitaminwater, they have to improve the quality of what their products deliver. Hence Collins’ “kitchen sink” approach of providing – in one drink – electrolytes (including some from coconut water), vitamins, fiber, “fat-burning” tea extracts like EGCG, energy elements like caffeine, and focus products like L-Theanine. Other potential products on the board include a “super-slim” line along with the just-mentioned protein-enhanced drink. “There are a lot of good things in here,” Collins said. With his experience in bringing Fuze to the market in the early days of the New Age beverage movement, Collins combines an inventor’s mindset with the ability to get things done. But having all of the ingredients at once is only one approach. Another, taken by FRS, is to have one key ingredient as the building block for a brand. FRS, which uses the plant-derived flavonoid quercetin as the key metabolic ingredient in its product line, is based on the premise that the product can provide consumers extra energy for performance. “Consumers have decided it’s the one thing they feel strongly about,” Sweat said. “It’s got to be strong enough to make a difference.” 2. Better sweeteners and flavors to hide the payload While there’s no doubt that Vitaminwater Zero – as well as chief competitor SoBe Lifewater – has been able to take advantage of the momentum and distribution advantages provided by Coke, some marketers point to stevia and other sweetener developments as a kind of new starting point for brands that are able to come up with formulations that will appease calorie-conscious consumers. “The Zero part of the brand is the only part of Vitaminwater that’s really grow-

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ing,” points out Ben Weiss, the founder of coffee fruit-based Bai beverages. “I think that the use of stevia delivers the flavor without the off-notes, and people will opt for higher functionality, higher antioxidant counts, if the flavors are equivalent.” Adds Sweat, “You can dial back nutritionals and the other things that affect your taste profile, or you can spend a lot of time at the [research] bench and really mask them well. But the high water mark is when there is no taste penalty.” 3. Cool, functional packaging that holds the payload Mikel Anderson can’t contain his excitement. The developer of more than 1200 styles of caps that consumers can twist, turn, punch, pull, squeeze, or otherwise manipulate in myriad other ways believes that the time of the dispensing cap has come. “It’s going to be a tidal wave in the next three to five years,” Anderson said. “The story is finally starting to be told and realized.” But strangely enough, Anderson’s excitement has been generated through a product he hasn’t even worked with: Activate Drinks, a Californiabased product that is the first to widely market a “dispensing cap” as a way to drop a mixture of vitamins and other healthy ingredients into a bottle of plain water – without having to use a hot-fill process that can cause those ingredients’ effectiveness to degrade. “Finally, people are starting to take the chance, and daring,” Anderson said. “They see the Tata investment in Activate, and Karma is coming around out there, and it’s not just America. The entire world is looking at these caps. Something dramatic has happened.” Over the last three years, Activate has indeed been able to leverage more than $20 million in investment from Indian conglomerate Tata, as well as the distribution connections of CEO Dan Holland, to build a large West Coast footprint that is heading national.


To date, the Activate brand has, along with newcomer Neuro and longtime online-stalwart FRS, been one of the leading brands in terms of growing retail sales for the emerging generation of functional products. With a deal in place with Coast Brands Group and a growing number of chain buyers willing to explore the possibility that “mix to drink” might be the wave of the future, Activate has taken the dispenser cap and helped cobble it into a concrete category. But problems remain for Activate, as well as its emerging group of cap-oriented competitors, including Rapp’s Karma Water and V-Blast, which dispenses a liquid solution instead of a dry one. The key stumbling blocks? Consumer education about how to use the caps, as well as the notion that, for some consumers, the products may be too similar to Vitaminwater in terms of what they promise. “We understand there’s a huge educational gap to overcome relating to dispensing caps,” says Rapp, whose product attempts to mix the freshness advantage of cap dispensing with a mega-dose of seven different vitamins. The solution to the second problem is what will also fix the first, Rapp adds. Once consumers feel the effects of the vitamins in their non-degraded form, he argues, they will be more inclined to accept the package that keeps them from degrading. “Once people understand it and start to be educated, that hot fill is boiled and the enzymes are dead, the sugar is added, and the product is only what they add back in, they’re going to say they don’t want this anymore,” Anderson said. “The biggest obstacle has been the consumer understanding what the process is for [hot-filled] beverages. It really still hasn’t been explained, but the eyes are open and the ears are listening loud and clear.” 4. Immediate Effects Also working from an efficacy-enhancing standpoint is Neuro, a cold-filled product

that is fast becoming a standard-bearer for a wave of brands that use short- and medium-term functional effects to indicate that their ingredients are working. Rather than provide an alternative to Vitaminwater, said Neuro’s Nadel, the real functional product to which Neuro tries to compare itself is the energy drink Red Bull. “People felt that drink’s efficacy immediately,” he said. “It changed my paradigm. Initially, at the very inception of the brand, the focus was to find a healthy alternative to an energy drink. But beyond that, as we continued to develop, our research team decided to try to do things that would work.” To that end, most of the Neuro line – Trim, Gasm, Bliss, Sleep and Sonic among them – have strong enough doses to elicit physiological effects that include fullness (through fiber), relaxation or sleep (through L-Theanine or melatonin), and focus or excitement (caffeine, more L-Theanine, B-Vitamins). Nadel said the products use an intentionally powerful mix of ingredients. While not all drinkers are going to feel all effects (and Gasm may be a bit of a functional reach), the idea is clear. “If you get a consumer who tries one and it works, like Sleep, they say, what else can I try?” Nadel said. “If just one works, it builds credibility.” Credibility is a hard word when dealing with products that promise different effects. It’s been the hard work of functional products – particularly those that offer the so-called “long-lead” effects promised by, say, cancer-fighting antioxidants – to prove out that credibility. Still, the potential for at least one key function – money-making ability – continues to drive many of the products mentioned above onto store shelves. Each of them – Neuro, Activate, FRS, as well as newer products like Bai, Karma Water, and Body Armor – and others, like Vitaminwater-era survivor Function and leading relaxation brand Marley – have managed to grab large chunks of distributor territory in the past year, verging on national footprints. The promised shelves of chain accounts are beginning to beckon, offering the ultimate promise for enhanced beverages: enhanced profits. Will they all feel the effects? In this case, the answer “me too” might not be such a bad one.

Discover the difference between cognitive enhancing ingredients. Discover the difference all-natural Cognizin® can make in your functional food and beverage products. Cognizin is a proprietary form of citicoline, a potent brain-health nutrient clinically shown to support mental energy, focus, attention and recall.* Tested in human clinical trials and developed using a patented fermentation process, Cognizin is a pure, allergen-free GRAS ingredient that’s stable and effective.* For a functional difference consumers are sure to notice, add the proven brain power of Cognizin to your next product.*

For more information about Cognizin® contact Kyowa Hakko USA: (212) 319-5353 www.cognizin.com

*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.

Cognizin® is a registered trademark of Kyowa Hakko Bio Co., Ltd. Copyright ©2011 Kyowa Hakko U.S.A., Inc.


Enhanced Water

New York Spring Water, Inc. VBlast is a new

vitamin-enhanced water line with a patented reservoir cap. With a twist of the cap, a concentrated mix of vitamins flow into the water. The product is calorie-free, carb-free and sugar-free and comes in eight flavors: Acai & Berry, Grape, Green Tea, Orange, Peach Tea, Pomegranate-Cherry, Strawberry Kiwi, and Wild Berry. VBlast recently premiered its first nationwide television commercial with Sacramento Kings point guard Tyreke Evans.

B12 and the line is available in Lemon Lime, Raspberry and Peach Mango flavors. Qure Water is now distributed in Whole

Foods locations in Las Vegas and Arizona. The water is also now available for sale online at www.ThirstMonger.com. Qure Water recently announced its partnership with Optimum Sales as a broker representative and distributorship with Kehe/Tree of Life. Metromint has created “Project Goodberry,”

9-12, Corp. Elevate Waters are now available

at HEB stores in Texas and Brookshire’s grocery stores in Texas, Louisiana and Arkansas. Elevate contains 25 calories and 3 grams of soluble fiber – 12 percent of the recommended daily allowance - per 8 oz. serving. Elevate Fiber Water comes in natural lemon or natural orange flavors.

a philanthropic endeavor that donates 10 percent of the profits from the sales of its Goodberrymint flavor to local organizations. This year the company partnered with the San Diego Affiliate of Susan G. Komen for the Cure, in support of breast cancer education, treatment, and research. Nicolet Forest Bottling Company Inc.

Varni Brothers Corporation. Noah’s Spar-

kling Spring Water has relaunched in new 12 oz. aluminum cans. Noah’s waters come from Adobe Springs in California and contain 110 milligrams of magnesium per liter - nearly 20 times the amount in other bottled spring waters. In addition, the brand has added three new flavors: Lime, Blueberry Pomegranate, and Peach Mango.

Water Joe is set to launch its caffeinated enhanced natural artesian water in four-gallon one-way bottles and five-gallon BPA-free refillable bottles. The bulk product line is being offered through the company’s Midwest retail and HOD distribution network.

Dox Solutions. Developed by two practic-

The Rising Beverage Company. ACTIVATE has launched three new flavors. Lulo Pear is multivitamin drink packed with 200 percent of a daily serving of vitamin C and other essential vitamins. Blueberry Pomegranate an antioxidant-rich drink made with açaí and aloe vera extract. Raspberry Citrus is workout drink made with vitamin C, amino acids and electrolytes. ACTIVATE has also introduced a new PET bottle composed of 100 percent post-consumer recycled plastic.

ing doctors, Cardio Water is a an all-natural beverage that contains 250 milligrams of resveratrol. The pomegranate and grape flavored beverage and is sweetened with a blend of stevia and pure organic cane sugar. Cardio Water has 30 calories per serving and is packaged in an 18 oz. plastic bottle.

OXYwater Inc. OXY Water is an enhanced water that contains oxygen, B vitamins, trace minerals, antioxidants and electrolytes. The water comes in Island Citrus, Cherry Pomegranate and Passion Berry flavors. OXY Water contains no sugar, carbohydrates or calories.

Omega-3 Water is enhanced with omega-3 from flax seeds, B vitamins, vitamin C, vitamin D and calcium. The water comes in two natural flavors: Bold Berry and Orange Citrus. The all-natural product is made in the United States.

Ex Drinks, LLC has launched Ex Aqua Vita-

mins, a line of enhanced, naturally flavored waters. Ex Aqua Vitamins contains no highfructose corn syrup, artificial colors, sweeteners, flavors or preservatives and the beverage is naturally sweetened with Fruit Up, a low glycemic ingredient. Ex Aqua Vitamins is infused with Vitamins E, B3, B5 and B6, B7, and


Skinny Water, a zero-calorie enhanced water, has launched new distribution in all 251 Albertsons store locations throughout Southern California and Nevada and 196 Meijer locations in the Midwestern states of Ohio, Michigan, Indiana, Illinois, and Kentucky. The water is now available in over 14,000 retail chain locations nationwide.


natural flavors into focus.

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



Enhanced Water

Talking Rain Beverage. Sparkling ICE will

add two new flavors, Lemonade and Pineapple Coconut, to its line of flavored sparkling waters. The flavors will be launched in early 2012. PepsiCo Americas Beverages. SoBe has launched Lifewater with Coconut Water. The new low-calorie line is available in three flavors: Pacific Coconut, Mango Mandarin, and Pomegranate Nectarine. Karma Culture LLC introduced Karma Well-

ness Water, a new line of natural, nutrient-enhanced water. Karma uses a proprietary reservoir cap to keep vitamins and other essential ingredients protected and separate from water until it’s time to drink. This breakthrough packaging has an airtight seal between the cap and base, as well as UV protection, ensuring freshness and delivering maximum vitamin potency. The KarmaCap holds two to four times more ingredients than other dispensing


caps. Karma Wellness Water is available in five SKUs: Karma Balance, Karma Body, Karma Mind, Karma Spirit, and Karma Vitality. Karma is made with spring water and natural ingredients. It contains 20 calories per serving and is sweetened with stevia and a pinch of cane sugar. Ayala’s Herbal Water, an herb-infused flavored water launched a new line of single serve 12 oz. glass bottles. Sparkling Ayala’s Herbal Water contains no calories and is available in four varieties: Lemongrass Mint Vanilla, Cinnamon Orange Peel, Lavender Mint and Ginger Lemon Peel. Assure Water continues to expand distribution regionally in the Northeast, Southeast and West coast markets. Assure is now available in over 300 accounts in metro New York. Starting in 2012, Assure Water will be distributed in Asian markets beginning with South Korea.


By Jeffrey Klineman

NACS 2011 – CHICAGO, IL JUST AS THE CROWDS HITTING Cupertino, Calif. for the Apple announcement may have been disappointed by the lack of an iPhone 5 announcement, visitors to the National Association of Convenience Stores (NACS) Show in Chicago didn’t emerge with any groundbreaking new product revelations. And in the days that followed, there certainly weren’t any changes to match news of Apple founder Steve Jobs’ death. In fact, there were quite a few stars in the crowds, although no one who matched the intellectual wattage of Jobs. There was, however, AriZona pioneer Don Vultaggio, himself a top entrepreneur and as much a master at giving the people what they want in the beverage field as Jobs was in his own electronic bailiwick. Also floating around was rapper/movie star 50 cent (see below) and any number of battling UFC fighters, who buzzed around the Xyience booth. As for those who were lovers, not fighters, an Austin Powers impersonator stalked the stage at the Monster Energy booth, while Snooki from Jersey Shore was also on the scene.


Beyond personality sightings, there were some significant packaging and format changes, and many recent developments in other channels seemed to be new to the convenience world. Chief among those changes is the ongoing onslaught of new Coca-Cola packaging. Coke’s core sparkling brands, Coke, Diet Coke, Coke Zero, and Sprite will all now be available in a 12.5 oz. PET bottle that the company is calling the “hand-held.” With a suggested price of $.89, the new size is intended for immediate consumption and continues the company’s recent string of packaging innovations, including 100-calorie cans, as the brand moves away from a previous generation of 20 oz. packages. The smaller bottle was trumpeted by Coke strategic planner Russell Baker as the “CocaCola Hand-Held” — “it’s based on shopper insights on the importance of hand-held devices to younger consumers,” Baker said. Other, smaller soda companies looked to decrease the size of their packages as well — tiny Wit Beverage Co., for example, which makes Goose Island Soda, Black Bear Soda and Jelly Belly Gourmet Sodas,

among others, displayed a 6.3 oz. line of classic flavors that seemed destined for hotel minibars and other “retro” venues. Meanwhile, FRS, a company that emphasizes the nutritional extract quercetin as an energy source, demonstrated a new shot sized package debuting soon in Orange and Peach Mango flavors; like many new products, the shots contain a Quick Response tag that can take consumers with smart phones to a web site with more information on the product. Also, FRS CEO Carl Sweat revealed a growing number of functional line extensions for the brand, which is distributed via an agreement with PepsiCo’s warehouse division. Next year, FRS will have immunity and weight management sublines, featuring a vitamin and amino acid payload and an as-yet-unnamed appetite suppressant, respectively. Emerging energy drink brand Speed Energy, backed by racer Robby Gordon, was on hand with a new line extension called “Ethanol” — a candy apple flavor — and “Unleaded”, which is, as the name might imply, sugar-free. The brand launched in

2010 and is still getting distribution. GT Beverage, which makes fast-growing Sportastic sports drinks for kids, wasn’t showing off too many new line extensions, but it did reveal significant distribution growth — having recently cut back on direct shipments to DSD, according to national sales manager Stephen Cobb, the brand with the ball-shaped bottle is moving into major wholesaler accounts like Haralambos, Honickman and others, along with approvals in Albertson’s and Food for Less. Meanwhile, GT’s co-packer, Tony Varni of 7-Up Bottling in Modesto, had staked out part of the booth for his new Noah’s Sparkling Waters cans, which are a re-boot of his company’s in-house line. Vultaggio’s rare NACS appearance put a charge into many beverage industry pundits; while there weren’t any new NA products at his Arizona booth, there were some new malternatives, including Pina Colada and Strawberry Colada-flavored tall cans with the unmistakable Arizona styling. At Bai brands, owner Ben Weiss still wasn’t sure his “coffee fruit”-based juice drink was a slam dunk for the convenience channel, but he had the PET packages on hand to give it a try. Still, new products from Bai came in the form of low-calorie Bai5’s Ipanema Pomegranate and the newly re-christened Togo Tangerine, a re-staging of its former “Costa Rica Clementine.” In the “New to You” category, marketers like New Age Beverage and Xyience demonstrated just-announced line extensions like Xing Juice Drinks and Xyience’s new Xenergy Xtreme Frostberry Blast, featuring the likeness of UFC Middleweight Wanderlei Silva. Meanwhile, Body Armor, which arrived on the market just a few months ago, demonstrated a reformulated Raspberry Blueberry Goji formula, along with five other flavors. Finally, back-from-the-hive Killer Buzz energy drink, now under new ownership, showed off completely revamped packaging and a pair of coffee line extensions. Taking advantage of the heat in the lemonade category, Clearly Canadian sales team veterans Paddy Sheya and Bob Yates showed off Cabana Lemonade, an all-natural fast-follow to the surging Calypso line of lemonades, teas and juice drinks. The five-SKU all glass Cabana line will soon be followed, according to Sheya,

with Pulse, a three-function, five flavor line of nutraceuticals aimed at men’s and women’s health, along with heart health. “When we can’t get Calypso, here we come, right behind them,” Shea said. “And we’re 100 percent natural.” Possibly, but Calypso continues to be one of the fastest-growing brands in the country, with distribution recently secured at Wal-Mart, among other retail outlets. There are three companies currently commercializing the power of “Mix-ToDrink” technology, Activate, V-Blast, and newcomer Karma Water. While Karma wasn’t there, Activate had major news in the form of a distribution agreement with 7-Eleven in Baja, Mexico, where it moved into 65 stores, according to Gustavo Puffelis, the founder of InBevCo, which imports food and beverages into that area. Meanwhile, V-Blast, which uses a liquid solution instead of powder in its reservoir cap, has recently pioneered a newer cap release mechanism with should soon appear atop the product line, according to sales director Frank Natale. Also moving briskly at NACS were brand new My Body Shots, non-caffeinated rehydration shots loaded with electrolytes and vitamins. Branded with the tagline “Be Good to Your Body,” the six-SKU shot line kept a low profile but had heavy booth traffic. Still, the heaviest booth traffic seemed to arrive at around 3 p.m. Monday for the introduction of rapper 50 cent, whose new Street King energy shot was, in the words of an announcer, guaranteed to “kill your store.” Despite such an ominous lead-in, the shot has a built-in hunger-fighting social mission. Getting back to packaging changes, Jones Soda showed a convenience linefriendly set of familiar flavors Green Apple, Berry Lemonade and Strawberry Lime sodas, all in 16 oz. cans. With a new all-natural product called “Au Naturale” coming out next month, according to CEO Bill Meissner, the brand that introduced many entrepreneurs to the broad reach of beverage innovation through oddities like Turkey and Gravy Soda is still coming up with new products. Fortunately, there was no iPhoneflavor anywhere to be seen. Not even in a Hand-Held bottle. OCTOBER.2011.BEVERAGESPECTRUM 49


Promotions, events and specials for the industry

FMF Power Beverage

Canadian Club

Sovieski Vodka

FMF Power Beverage, is offering convenience store retailers who become approved FMF Power Beverage vendors an FMF replica motorcycle plus hundreds of other prizes to use as a giveaway promotion. The entire program will be full supported by FMF, which will bolster marketing efforts with custom point-ofentry signage and sale materials for an online and social media campaign.

Canadian Club has launched a limitededition bottle that celebrates the season premiere of the HBO drama Boardwalk Empire – on which the whisky plays a major role. Each 750 mL bottle is paired with a flask featuring the Boardwalk Empire logo and is wrapped in Boardwalk Empirebranded “neckers.” 100,000 bottles were released and are available in liquor stores nationwide while supplies last.

Sobieski Vodka has launched a special gift package for the 2011 holiday season. The package includes a 1.75 L bottle of Sobieski Vodka and a brushed stainless steel 5 oz. flask. Sobieski is the number one selling premium vodka in Poland and one of the fastest-growing vodka brands in the United States. The vodka is produced exclusively from Dankowski rye at the Starogard Gdanski distillery dating back to 1846.

evian evian, a brand of Danone Waters of America, Inc., has partnered with French fashion designer Courrèges to design a new limited edition bottle. The design features Courrèges’ elegant white and pink emblematic flower (introduced in 1967) on the backdrop of evian’s iconic glass bottle silhouette. The label uses organic ink and the bottle is 100 percent recyclable. The bottle will be available in select restaurants and hotels as of November 2011 and online at shop.evian.us for pre-order.


Single Serve Ground Roast Coffee in 2012! Available For Store Brand Development * For use by owners of Keurig® Coffee Makers

Sturm Foods, Inc, a leading private label beverage manufacturer, is launching single serve ground roast coffee in 2012! Be one of the first to develop your Store Brand assortment today!

Single Cup Market Growth $ 300,000,000


Dollar Sales

$ 250,000,000 $ 200,000,000 $ 150,000,000 $ 100,000,000 $ 50,000,000


156% Growth

Yr Ending May 15 2010

Yr Ending May 14 2011



Yr Ending May 16 2009




Source: Nielsen, Total US FDMx, Sales Dollars

Contact us today for details! Co * Sturm Foods, Inc has no affiliation with KKeurig, eurig, Incorporated. © 2011 Sturm Foods,, Inc Inc.c.

Billie Bill llie Rice - VPP of Business Devel Development opment 2155 Center Street Sttreet • Manawa, Manawa WI WI 54949 920.596.5123 920 0 596 512 3 | brice@sturminc.com 0.596.5123 brice@sturmiiinc.com nc.com Contract Manufacturing Also Available!

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Beverage Spectrum October 2011  

Featuring a new generation of functional beverages.

Beverage Spectrum October 2011  

Featuring a new generation of functional beverages.

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