Beverage Spectrum September 2009

SEPTEMBER 30, 2009

LESS SUGAR MORE SALES *

Sugar content is dropping, but sales of less-sweet beverages are growing. Here’s why.

ENERGY SHOTS: WHY THEY KEEP GROWING COKE, PEPSI, AND COCONUT WATER CASH

SEPTEMBER 2009 vol.

7 :: no. 6

Columns 6 FIRST DROP Innovative Packaging put on Ice 8 PUBLISHERS TOAST Barry Revisits Woodstock 24 GERRY’S INSIGHTS Coconut Deals are Real

Departments 10 BEVSCAPE BUSINESS Coke and Pepsi, Differing Routes to the Coconut Game 26

12 BEVSCAPE INNOVATION Online Advertising: Hits and Misses 16 CHANNEL CHECK Bug Juice Ascends 20 NEW PRODUCTS Relax! It’s Soda!

72 PROMO PARADE Malibu Radio; Johnny Walker Black Turns 100

Features 26 BRANDS IN TRANSITION: CELSIUS Celsius heats up.

40

30 RTD JUICE Four ways they’re staying relevant.

40 BIG SHOTS The energy shot category grows, but the big firms continue to struggle with small packages.

58 COVER STORY MAKING MORE WITH LESS How low-sugar and health conscious beverages can gain traction.

Conference Beat 68 PREVIEW NACS Show 2009 in Las Vegas 58

Beverage Spectrum (Postal Number 024-552) is published monthly with combined issues in January/February, May/June, July/August and November/December by Beverage Spectrum Publishing, Inc., a wholly owned subsidiary of BevNET.com, Inc. 44 Pleasant Street, Suite 110, Watertown, MA 02472. Periodicals postage paid at Boston, MA and additional mailing offices.

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

THE FIRST DROP

By Jeffrey Klineman

INNOVATIVE PACKAGING PUT ON ICE Anheuser-Busch InBev’s “Fan Cans” fold under pressure.

HERE’S A GREAT PIECE OF guerilla marketing: beer company takes advantage of a strong rooting interest in a local college football team’s starting 11 by dressing up its cans in team colors. Then it unrolls that program across the country, utilizing a strong production network and packaging efficiencies to take a national product and build local interest.

Hey, that sounds like the kind of thing that might move some product, right?

It did more than that. It caused a full-on outrage, and the FTC and college licensing organizations started raining heckfire

were bummed that Bud had found a way around their exclusive pouring rights at local stadiums, and colleges were bummed because it’s hard to put a trade protection on something like a color scheme, rather than a licensed school symbol or emblem.

(The “Fan Cans,” as they were called, only had team colors, not logos or other identifiers. Understated and cool, right?)

I still believe it’s the kind of intelligently sneaky play that we saw from Shiner Bock last year when its marketing agency handed out wraparound beer cozies outside a concert venue sponsored by Hei-

The fact is, the campaign was a simple, low-hanging-fruit kind of innovation that only attracted trouble because it would have worked so well. down on that company – Anheuser-Busch InBev, for the record – for encouraging underage drinking. The idea behind the FTC’s outrage was that alcoholic beverage ads must target an audience that is more than 70 percent above legal drinking age, while the colleges were just plain mad that Bud had thought up such a great way to sell beer.

Under pressure, Bud quickly folded up plans to put its cans into local colors, but I wish they hadn’t. The fact is, the campaign was a simple, low-hanging-fruit kind of innovation that only attracted trouble because it would have worked so well. In fact, other beer companies

6.BEVERAGESPECTRUM.SEPTEMBER.09

neken. Sure, Heineken was fuming – who wouldn’t be? – but it had to be chalked up as a win for cleverness over expenditure.

And here, Bud, despite its own ability to crank up the war machine of advertising and product saturation, did something pretty similar. On game day, what are you going to buy? How about beer in the team colors? But Bud got a black eye, instead, because it acted so nimbly that everyone else went into contortions. And no one out there seemed capable of explaining why a smartly-dressed package of beer was any more likely to encourage underage drinking than a poorly-dressed one.

Is it a shame? It’s hard to say that, ex-

A “fan can” for Penn State, or Memphis. Or is that Kentucky? We’ll never know.

cept to the extent that we believe innovation should be rewarded and this might be the kind of episode that discourages such elegant trickery. But regardless, this is one time that we’d have preferred to cheer on team Bud, rather than see it forced to make an end run back to the locker room.

Meanwhile, there’s plenty of innovation to be seen around here this month, from a look at how “calorie burner” Celsius survived a close encounter with Coke to a look at the latest info on premium juices and energy shots. So sit back, grab a noncontroversial can of whatever beverage is handy, and enjoy.

PUBLISHER’S TOAST

By Barry J. Nathanson

BACK TO THE AGE OF AQUARIUS started working with all of you.

You see, each country had beverages editor, Jeffrey Klineman, about the 40th that reflected its culture. I was particuanniversary of Woodstock and its hippie generation. I took great joy in waxing nos- larly intrigued by all the nectar and fruit based drinks that were offered. There was talgic about this special phase of my life, a unique drink in bulb shaped glass that and about the people I’d spent time with I loved. Years later, I was re-introduced who had also been lucky enough to live to that elixir, Orangina. Then there was through that era. You see, I was one of that water I had in a town called Evian. the 500,000 who actually attended those I also spent many a day at the Heineken glorious days in Bethel, N.Y. brewery in Amsterdam sampling the Although millions more try to make the wares, as well as the cheeses that consticlaim they were there, we who attended tuted sustenance for know in our hearts a hippie-on-the-go. the true impact that My mountain village the event had on us. outside of Innsbruck (Also, there were signhad a fantastic brew, in sheets, so if you’re Adambrau. “Glauwalking around talkwine” accompanied ing about the mud the apres-ski experibut you weren’t reence throughout the ally in it, all will be Alps. The wines and The Heineken brewery today, just as it was revealed someday.) during Barry’s visit a few decades ago. liquors of Europe So what does this were a joy to behold, each bottle capturhave to do with beverages? Nothing, reing the essence of its region. ally, except for the way that the WoodReturning to the states for the last three stock generation revealed itself to be an years of my travels, my fondest memories endless marketing opportunity for soft were the Coors runs that we took to bring drink companies, and because the merest the “Rocky Mountain High” back East. mention of me in bell-bottoms is enough We’d leave Breckenridge with VW buses to get that pesky Klineman off the phone. filled with Coors and head back home to Yet here I am, obliged to write my be greeted with great jubilation. See? Even column, and so I figured I’d write about then, I was working to expand their disthose years through the eyes of a tribution. I marveled at these new plastic beverage publisher-to-be. bottles when I returned from overseas.

In 1969 there were few choices when Great concept, I hoped it would stick. it came to imbibing. At Woodstock, we I vividly remember my time in Tucson, carted in tap water in gallon jugs, and Ariz. as one of the “enhanced” water lots of cans of Coke, 7UP, root beer – we created by adding flavoring to tap and cases of beer and cheap wine. In water. I guess we were 20 years ahead the mud, life was simple. of our time. Having a bottle of soda, Having graduated from Woodstock and on the open road in a convertible, survived college, I headed for what was symbolized the spirit of the times. supposed to be a brief adventure in EuDespite the troubles we’ve faced since rope. Little did I know I’d spend the next then, I always look back to that time as a seven years traveling throughout Europe, Africa, the Middle East and the U.S. – and kinder, gentler era that symbolized a genhow much of that trip, carefree and idyllic eration. Woodstock will always hold that special place in my heart. Happy 40th. as it was, would come back to me when I

I WAS RECENTLY BORING MY

8.BEVERAGESPECTRUM.SEPTEMBER.09

PUBLISHER Barry J. Nathanson bnathanson@bevnet.com EDITOR Jeffrey Klineman jklineman@bevnet.com ASSOCIATE PUBLISHER John McKenna jmckenna@bevnet.com ART DIRECTOR Matthew Kennedy mkennedy@bevnet.com GRAPHIC DESIGNER Amadeu Tolentino atolentino@bevnet.com ASSISTANT EDITOR Matt Casey mcasey@bevnet.com ASSOCIATE PUBLISHER Adam Stern astern@bevnet.com JR. DESIGNER Natalie Iknaian niknaian@bevnet.com SUBSCRIPTION INQUIRIES Adam Stern astern@bevnet.com 617-715-9679 ONLINE RENEWALS & CHANGES www.bevspectrum.com/subscribe ARTICLE REPRINTS (500 copies or more) FosteReprints 800-382-0808 x142 BEVERAGE SPECTRUM PUBLISHING INC. CHAIRMAN John F. (Jack) Craven jfcraven@bevnet.com PRESIDENT AND EDITORIAL DIRECTOR John Craven jcraven@bevnet.com EDITORIAL 44 Pleasant Street, Suite 110 Watertown, MA 02472 ph. 617-715-9670 fax 617-715-9671 ADVERTISING 1123 Broadway, Suite 210 New York, NY 10010 ph. 212-647-0501 fax 212-647-0565

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

Coke and Pepsi Get (Coco)Nutty In a month-long give-and-take that has considerably ramped up buzz around the future of coconut water as a mainstream product, both Coca-Cola and PepsiCo recently announced investments in the category.

First, PepsiCo announced its intention to buy the Brazilian coconut water giant Amacoco – the largest coconut water supplier in the world. While the three main U.S. coconut water producers were still chewing over the news, the Coca-Cola Co.,

through its Venture and Emerging Brands (VEB) unit, took a more direct approach, announcing the purchase of a minority share of ZICO LLC. Finally, a few weeks later, Pepsi Bottling Group – which is about to be gobbled up by PepsiCo – announced that it, too, would be investing in and distributing ZICO competitor O.N.E. The investment in ZICO developed as part of a $15 million round of fi nancing that also included individual investors as well as brand-builders Suite 850. Despite the multi-million dollar stake, ZICO founder and CEO Mark Rampolla said

10.BEVERAGESPECTRUM.SEPTEMBER.09

Coke is playing hands-off for the present.

ZICO won’t alter its immediate plans, he said, sticking to its DSD network (which includes Polar, Big Geyser and Haralambos), continuing to target coastal markets through “infl uencers,” and steering clear of traditional advertising.

In the long term, he said, the company could consider distribution through Coke bottlers, but the brand isn’t yet ready for that kind of move. In the short term, the pair of big business investments leaves Rampolla, who sources coconut water from Amacoco, in the unique position of using cash from Coca-Cola to buy supply from a firm owned by PepsiCo. Asked about the Amococo deal, Rampolla called the situation “interesting,” but said it shouldn’t create a long-term strain on the brand. ZICO, he said, has a contract with Amacoco that is secure enough that Coca-Cola felt comfortable with its

RAMPOLLA TO SPEAK AT BEVNET LIVE Got Converts? Mark Rampolla does. The founder and CEO of ZICO LLC will speak on a panel called “Getting Converts” at BevNET LIVE, Tuesday, Dec. 8 at the Loews Santa Monica Beach Hotel.

The panel will discuss ways that beverage marketers with unfamiliar products can earn a devoted following. For more information, visit www.bevnet.com/live.

investment, and ZICO already had plans to diversify its sourcing.

Nevertheless, things got really “interesting” with the investment in O.N.E., which also sources through Amococo. For its part, along with making an investment alongside private equity group Catterton Partners, PBG announced that it would be distributing O.N.E. in Southern California and South Florida – a pair of geographic areas that are strong bases for coconut water’s growth. And with the eventual supplier advantages that the Amococo-PepsiCo connection could afford O.N.E., down the road, things could eventually get hairier than a full-grown coconut.

Until then, however, interest in the category continues to reach new heights.

O.N.E. co-founder Rodrigo Veloso welcomed Coca-Cola as a competitor, and Vita Coco co-founder Mike Kirban said he hoped Rampolla would invest his Coke funds in marketing, which would to grow the category and indirectly help all three companies.

But that touchy-feely rising tide can only last so long. It looks like what had been a small, peaceable niche market has become the latest weapon in the cola wars.

CORRECTION: A story on the tea business in the last issue of Beverage Spectrum incorrectly identified Xing Tea as a brand that is attempting to attract consumers at the value end of the pricing spectrum. Xing Tea’s intent is for the brand to be known as an all-natural premium brand, with single can prices falling in the $1.39 to $1.89 range.

BI

BEVSCAPE INNOVATION • Product development & marketing news

Online Ads

Innovation Briefs

Opportunity and strain. By Mike West Advertisers have increasingly turned to the internet to reach consumers, but, as marketing shifts toward this new medium, a rift is opening between how advertisers hawk their wares and what kinds of online ads consumers will tolerate.

A LinkedIn Research Network/Harris poll found that 74 percent of respondents reported using online ad space more often this year than last, and nearly half reported using print, television and radio less often.

The poll also indicated that consumers are turned-off by some common types of advertising. Eighty percent voiced frustration with full-page ads that obstruct content, 79 percent with ads that are hard to close and 76 percent with pop-ups.

The success of on-line social networks like Facebook, though, may prove helpful to advertisers. A poll conducted by Oneupweb found that social networker users spend significant time looking at paid ads on social networking sites, with 65 percent engaging with sponsored ads within the first 10 seconds of a search. The poll found that internet users approach on line advertising differently on social networking sites than when using conventional search engines like Google. Social network users often spend time viewing paid advertising; when using traditional search engines, they often only look at the first five search results.

As online advertising increases, so do concerns about the best way to deliver your message.

Marketing Vox also identified a growing breed of digital media consumers: mobile web users. The Pew Internet and American Life Project reported that 14 percent of all cell phone users use their mobile devices to view video, and a study by Transpera conducted by InsightExpress found that 62 percent of people who view mobile video use their mobile device more often than their computer to browse the internet. The study also found that mobile device users – who are best targeted through their mobile device – are generally affluent, travel more and eat-out more often.

As marketers grow into the digital environment they may find that these lessons are what allows on-line advertising to mature.

Waypharm USA, LLC has launched as a privately owned pharmaceutical and functional food company, entering the $50 billion U.S. nutraceuticals market. By combining natural ingredients with the best scientific approaches, Waypharm USA plans to introduce grab-n-go nutritional beverages for health-conscious individuals, and nourishment products designed specifically to be effective during the treatment of illnesses.

BallCorporationhas named Michael L. Hranicka xecutive vice president and chief operating officer for the company’s North American metal beverage packaging operations.

Virginia Dare has made two hires: Sandy Laing joined the flavor development team as Food Technologist, and Stephanie Lynch was appointed Business Development Director for the health and wellness, nutritional and pharmaceutical industries.

Small Company, Big Package 16 Mile Brewing Company, a regional brewer located in Georgetown, Delaware, has chosen to package its beer exclusively in a 22 oz. aluminum bottle. The bottle, developed by Exal Corporation of Youngstown, Ohio, is the largest ready-to-drink aluminum bottle in North America and a market first.

16 mile’s owners went with the metal because they wanted to save on shipping costs and because they were concerned about creating efficient small batches.

“An aluminum bottle’s lighter weight means lower shipping costs and its manufacturing process provides a more consistent, uniform size,” said 16 Mile owner Brett McCrea.

12.BEVERAGESPECTRUM.SEPTEMBER.09

McCrea added that he and partner Chad Campbell discovered in their research that the single largest reason for downtime in the bottling process was bottle breakage on the production line. “We wanted to eliminate the traditional problems associated with glass right from the start,” remarks Campbell.

According to company President and CEO, Delfin Gibert, Exal has seen an increase in aluminum bottle sales to the beverage industry over the last 24 months. The company has created aluminum bottles for many of the country’s major brewers, but 16 Mile is the first brewery to package product exclusively in aluminum bottles from day one of operations.

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

CC

SPOTLIGHT CATEGORY

Bottled Fruit Drinks 52 Weeks through 8/9/2009

Are the bugs taking over? It appears so, as the bargainpriced kids’ brand Bug Juice has grown by leaps and bounds in the past year. Meanwhile, Fuze continues to benefit from being in the Coke pipeline, as its two main brands are showing excellent movement on the shelves, particularly in grocery channels. With V8 along for the ride, CCE now has a couple of powerful brands to play with.

Brand

Sales $

Change vs. year earlier

Hawaiian Punch

$176,232,400

9.2 %

V8 Splash

$101,397,400

0.5 %

Bug Juice

$84,500,940

14.1%

Private Label

$72,827,200

6.8%

Fuze Slenderize

$68,412,060

49.0%

Snapple

$64,030,940

-11.0%

Fuze Refresh

$55,533,020

203.4%

Kool Aid Bursts

$53,449,520

-8.5%

Tropicana Twister

$35,300,580

-22.0%

V8 V-Fusion Light

$33,483,260

55.7%

Tropicana

$30,613,400

-33.9%

SoBe Energy

$23,802,930

-19.0%

Dailys Little Hug

$21,735,560

-9.1%

SoBe Liz Blizz

$20,561,060

-6.4%

Langers

$16,754,330

8.5%

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

MINTEL

Leading Claims on New Non-Alcoholic Beverages Tracked in the U.S.

MC CORNER

So far in 2009 the word “premium” seems to be something of a nonstarter, while low or no sugar remains strong.

Claims

March 2009

April 2009

May 2009

June 2009

July 2009

TOPLINE CATEGORY

VOLUME

52 Weeks through 8/9/2009

August 2009

BEER $21,464,205,000

0.6%

BOTTLED JUICES

-1.2%

Kosher

60

71

27

79

33

63

Not Specified

29

39

12

27

35

17

Sugar (Low/No/Reduced)

25

45

19

16

28

27

Organic

42

47

15

48

29

25

BOTTLED WATER

All Natural

12

44

13

18

29

41

$7,618,934,000

No Additives/ Preservatives

15

38

10

21

33

34

ENERGY DRINKS

Vitamin/Minteral Fortified

24

16

14

34

16

19

Calorie (Low/No/Reduced)

26

31

9

18

28

20

Premium

14

31

10

33

27

11

Low/No/Reduced Allergen

23

11

7

18

7

20

Other

88

89

45

99

59

61

SOURCE: Mintel Global New Products Database (GNPD)

16.BEVERAGESPECTRUM.SEPTEMBER.09

$5,021,107,000 -6.6%

$5,466,900,000

6.8%

SPORTS DRINKS

-9.0%

$3,443,782,000

TEA/COFFEE

-2.7%

$2,596,365,000 SOURCE: Information Resources Inc. Total food/drug/c-store/mass excluding Wal-Mart.

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

CC * Please Note: These are for Food, Drug, Mass, and Convenience! That’s right! C-Stores are in the mix! * SPORTS DRINKS Brand

HOT! Powerade Zero Dollar Sales

Change vs. year earlier

ENERGY DRINKS Brand

HOT! Doubleshot Energy Dollar Sales

Change vs. year earlier

Gatorade

$1,239,402,000

-10.0%

Red Bull

$1,835,734,000

Powerade

$381,698,100

-37.5%

Monster

$843,706,900

9.9%

Gatorade G2

$346,148,600

72.8%

Rockstar

$400,133,100

-6.5%

Gatorade Frost

$218,716,000

-10.8%

Monster XXL

$210,217,200

7.8%

Powerade Ion 4

$191,312,100

N/A

Java Monster

$169,515,600

5.5%

Gatorade Fierce

$129,046,500

-52.8%

NOS

$160,254,000

39.6%

Gatorade Rain

$126,120,800

-58.6%

Amp

$148,671,800

-8.7%

Gatorade Tiger

$121,474,300

-8.1%

Doubleshot Energy

$126,347,900

553.4%

Gatorade All Stars

$96,602,060

-26.9%

Full Throttle

$110,816,000

-2.7%

Powerade Zero

$89,944,890

256.5%

Monster Khaos

$67,604,970

-12.0%

SOURCE: Information Resources Inc. Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 8/9/09

RTD TEA Brand

NOT! Gatorade Rain

HOT! AriZona Arnold Palmer Dollar Sales

Change vs. year earlier

AriZona

$560,995,800

4.3%

Lipton

$345,534,600

Snapple

$179,025,800

Lipton Brisk

$148,012,000

8.1%

Lipton Pureleaf

$138,101,300

-6.5%

Nestea

$113,086,700

12.0%

Diet Snapple

$101,284,500

Diet Lipton Gold Peak AriZona Arnold Palmer

SOURCE: Information Resources Inc. Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 8/9/09

IMPORT BEER Brand

NOT! Monster Khaos

HOT! Stella Artois Dollar Sales

Change vs. year earlier

Corona

$985,063,600

-6.8%

Heineken

$609,634,000

-9.4%

-7.5%

Modelo Especial

$243,460,000

14.9%

Tecate

$191,867,400

8.7%

Corona Light

$168,364,500

-1.6%

Heineken Light

$102,396,000

-11.7%

-7.5%

Labatt Blue

$85,319,980

0.1%

$63,988,340

15.5%

Stella Artois

$74,578,720

29.3%

$58,591,900

17.5%

Dos Equis XX

$74,279,170

28.2%

$35,561,820

131.8%

Newcastle

$72,754,610

-3.6%

SOURCE: Information Resources Inc. Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 8/9/09

RTD COFFEE Brand

-1.8%

NOT! Snapple

HOT! Emmi Dollar Sales

Change vs. year earlier

-6.9%

SOURCE: Information Resources Inc. Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 8/9/09 NOT!

DOMESTIC BEER Brand

Heineken Light

HOT! Keystone Light Dollar Sales

Change vs. year earlier

Frappucino

$493,569,700

-9.0%

Bud Light

$5,185,807,000

0.9%

Doubleshot

$56,910,620

-24.1%

Budweiser

$2,221,463,000

-4.6%

Doubleshot Light

$13,365,170

-25.5%

Coors Light

$1,772,276,000

7.5%

Private Label

$4,461,979

-3.6%

Miller Lite

$1,691,232,000

-3.4%

Cinnabon

$2,887,708

-46.1%

Natural Light

$1,062,492,000

7.9%

Starbucks

$1,425,620

-92.1%

Busch Light

$655,071,700

7.4%

Emmi

$1,092,180

183.4%

Busch

$611,946,000

8.3%

Godiva Belgian Blends

$673,145

-94.3%

Miller High Life

$473,146,300

6.6%

Community Cappucino

$455,621

75.0%

Keystone Light

$410,017,000

24.7%

Havana

$429,121

17.0%

Natural Ice

$310,044,100

9.2%

SOURCE: Information Resources Inc. Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 8/9/09

18.BEVERAGESPECTRUM.SEPTEMBER.09

NOT! Starbucks

SOURCE: Information Resources Inc. Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 8/9/09

NOT! Budweiser

Stock the Fun Drink That Everyone Will Love!

Product Basics

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

• 5 Great Flavors • 10.1 oz PET bottle • Sports cap closure (no spillage) • Vibrant colors • 24 units p/case

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Tum-E Yummies

54.8%

Kool-Aid Burst

11.5%

Bug Juice

11.5%

Fruit Craze

8.9%

Source: AC Nielsen, 12 m/e August 1, 2009, Convenience Retail Channel

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NEW PRODUCTS • The newest options for cooler and shelf.

ENHANCED WATER Neuro Brands, LLC has introduced Neuro, a line of nutritional and low-calorie beverages that promote health and well-being. According to the manufacturer, Neuro contains essential vitamins, minerals, amino acids and botanicals that enhance and support the demanding 24/7 lifestyles of consumers. The line launched with six formulations: Neuro Gasm (passion enhancer), Neuro Sonic (mental alertness), Neuro Bliss (happiness enhancer), Neuro Sporti (replenishes & hydrates), Neuro Trim (supports healthy weight loss) and Neuro Sleep (promotes restful sleep). Individual bottles of Neuro carry an MSRP of $2.99.

Neuro’s 14.5 oz. bottles are custom-made to exhibit an exclusive glamorous branding style and are 100 percent recyclable PET. For more information, call Neuro at (909) 486-0459.

SPARKLING JUICE Void of added sugars or artificial ingredients, ME is a sparkling juice line packaged in sleek, vibrant, 10.5 oz. slim cans, sold individually and in four-pack carriers. ME beverages are hitting the shelves of grocery stores nationwide now through September at the suggested retail price of $3.99 per four-pack. There are four initial ME varieties: Vivacious (tangerine pineapple), Curious (blueberry lime), Uninhibited (pink grapefruit) and Unavailable (dragonfruit blackberry). For more information, call (303) 449 – 2108.

CSDs Kava-enhanced Mary Jane’s Relaxing Soda is now available online and also in parts of California, Colorado, Oregon and Kansas. The soda is made with cane sugar, passionflower extracts, and water, and is intended not as an energy drink but a calming and euphoric beverage. A 12-pack of 12 oz. bottles is expected to cost $29.99; a 24-pack, $55.99. For more information, call (720) 529-4850.

RTD TEA Pledging continued support to the smiles of children worldwide, Arizona Beverages has introduced the new AriZona Kidz teas. For every 6-pack purchased of the 10 oz. version of the company’s lemon iced tea the company will donate five percent of net sales to Op-

20.BEVERAGESPECTRUM.SEPTEMBER.09

eration Smile, a non-profit organization that works globally to help children born with facial deformities. The AriZona Kidz will be available in the northeast this summer and rolled out nationally thereafter. The suggested retail value is $2.99 per 6-pack. In order to protect the natural antioxidants and flavor of the tea from light and oxygen deterioration, each individual beverage is packaged in an amber PET plastic bottle with an oxygen barrier. For more information, call AriZona at (516) 812-0292.

BEER The Samuel Adams Harvest Collection Variety Pack will be available nationwide beginning in August, for a suggested retail price of $13.99$15.99. The six full-flavored craft beers in the 12-pack collection are: Samuel Adams Boston Lager; Samuel Adams Dunkelweizen, Samuel Adams OctoberFest; Samuel Adams Cherry Wheat Samuel Adams Brown Ale and Samuel Adams Irish Red Ale. For more information, call (212) 891-0435.

Lhasa Beer, an all-malt European style lager imported from Tibet, will launch U.S. sales in Texas this August through specialty food retailers and on-premise establishments. It will soon be available at other retail locations across the U.S. Lhasa will donate 10 percent of its annual profits to non-profit groups supporting education, health care, cultural preservation and other socially responsible initiatives in Tibet. Lhasa 12 oz. bottles come in 6-packs and 24-bottle cases, with a bright, colorful label. A variety of logo items and point-of-sale materials are available, including: wearables, in-store displays, bar signs, neons, back bar displays, sandwich and menu boards. Suggested retail price is $8.99 per 6-pack. For more information on Lhasa Beer go to www.lhasabeerusa. com or call 1-877-GO-TIBET. Tecate and Tecate Light are re-introducing its new primary and secondary packaging with designs intended to reflect the brand’s boldness and masculinity. The new designs, which are available nationwide, completely align with the packaging currently found in Mexico, establishing a visual identity among Mexican consumers in the U.S. The newly designed Tecate packaging features a deeper red tone, which has characterized the brand throughout its history, while the iconic black eagle is

Bringing

natural flavors into focus.

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

TECHNOLOGY • CREATIVITY • INNOVATION

NP outlined in silver for a more modern feel. For Tecate Light, blue and silver are still the predominant colors, with the blue eagle outlined in silver. The last time the Mexican cerveza redesigned its entire packaging line was in 2005.

For more information on Tecate’s redesigned packaging, please call (212) 219-0321.

SPIRITS With a unique bottle design that serves as an homage to one of the city’s most iconic monuments and local sports fanaticism, ABSOLUT BOSTON is now available at bars, restaurants, nightclubs and retailers nationwide.

Made with black tea and elderflower, the limited-edition vodka bottle has a design that reflects the Fenway Park “Green Monster.” Sales of the bottle will support a $50,000 donation to the Charles River Conservancy. ABSOLUT BOSTON is available in 1L ($24.99 SRP).

For more information, call Pernod Ricard at (917) 848-4816.

The Hiram Walker line of all-natural premium liqueurs, schnapps, brandies, and triple sec, has announced the return of its limited release seasonal flavors—Pumpkin Spice and Gingerbread Liqueur. Hiram Walker Gingerbread and Pumpkin Spice will hit retail stores and on-premise establishments October 1.

Both allocated products will be available for a limited time, just as Americans turn their minds to planning for holiday festivities. The re-launch will be supported with a full array of on- and off-premise point of sale materials including dual recipe neckers/tear pads, case talkers, 4-bottle counter units, table tents, posters, and a bartender recipe guide. Gingerbread and Pumpkin Spice will be available in both a 750ml and 1L size. The 750ml Pumpkin Spice will return in its unique case shipper, while the 1L and both Gingerbread sizes will sport the new Hiram Walker shipper—perfect for cross merchandising with Absolut Vodka and Kahlúa Coffee Liqueur. The suggested retail price will be $8.99-11.99 for the 750ml size. For more information, call Hiram Walker at (203) 254- 8225.

Van Gogh Vodka has launched a new “ultrapremium” selection to complement its current portfolio: Triple Wheat Van Gogh Blue Vodka, the first ultra-premium vodka made from three international wheat sources. The wheat for Van Gogh Blue is sourced from cen-

22.BEVERAGESPECTRUM.SEPTEMBER.09

tral France, southern Germany and Zeeland in Holland. It is triple distilled in the Royal Dirkzwager distillery in Schiedam, Holland by Master Distiller, Tim Vos for an exceptionally polished taste with a smooth, neutral flavor full of subtle nuances from the three European grains. Triple Wheat Van Gogh Blue is currently being introduced to select markets across the U.S. in 1L (SRP $34.99) and 750mL ($29.00). For more information, call (212) 675-5525. ÍS VODKA, pronounced “ice,” is a new entry to the super-premium vodka category blending naturally pure Icelandic water and non-genetically modified wheat. It is distilled seven times to ensure an unparalleled taste experience, and carries an MSRP of $39.99. For more information, please call (323) 337-9042.

INFINIUM Spirits is distributing new Trinidadian Zaya Rum in California, New York, New Jersey and Florida and plans to expand to surrounding markets throughout 2009.

The suggested retail price for the 80 proof, 750 ml bottle is approximately $34.99. For more information, go to www.infiniumspirits. com or contact Entertainment Fusion Group (EFG) at (310) 432-0020.

CIDER Crispin Cider has launched Honey Crisp Artisanal Reserve Cloudy Hard Cider. Already known for their blue line of ciders crafted after the classic European beverage, Crispin’s new Artisanal Reserve Cider is made as a cloudy hard cider with a unique cloudy filtration system which leaves residual natural apple wine sediment in the bottle, ensuring an earthy, full-bodied flavor and an authentic cidery aroma. Honey Crisp is naturally fermented, using a premium apple blend with no added malt, spirit or grape alcohol, and is vinted to a 6.5 percent ABV. This product is available in a 22 oz. glass bottle with an MSRP of $4.49 per bottle. Planned distribution includes Minnesota, Wisconsin, Illinois, Washington State, Oregon, California, Colorado, Arizona and Nevada by late fall. For more information, call (612) 677-1717. •

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By Gerry Khermouch

GERRY’S INSIGHTS

COKE AND COCONUT WATER Proving the old rules don’t apply.

I’M A JOURNALIST WHO sometimes follows rules that might be viewed as a tad old-fashioned. But can you blame me? My career goes back to the days of such venerable props as cut-andpaste, teletype machines, pneumatic tubes and copy editors scribbling “30” at the end of each story. The rules I still follow?

Well, most of the time, I remember the one that says you’re supposed to double check the spelling of a person’s first name, not just their last. (Running into a guy named “Robbit” in my first job in a small town down South helped cement that concept.)

Here’s another one of these quaint rules: if a “hot scoop” I’ve just landed doesn’t really make sense to me, then I hold off on hitting the SEND button until I’ve filled in a few more blanks and the story at least approaches something that makes sense.

Coke buying Pepsi because it loves the big “G” on the Gatorade bottles? Whoa, buddy! Better do some more fact checking on that one! (I like to adopt a jocular, yet firm, tone when talking to myself.)

Lately, though, in our topsy-turvy beverage world, I’ve been starting to abandon that antiquated notion – especially if the story’s “lede” sentence happens to include the word “Coke.”

To wit: Coke’s about to buy Glaceau, even though India’s Tata just paid a ridiculous price to garner control and swore its eternal fealty to the company and its distribution network? SEND! Coke’s bringing a new ready-todrink coffee called Illy to market without even a pretense of involvement by a Coke bottler? SEND! Coke’s pouring a few million into a coconut water marketer that sells its weird brick packs into a total of six yoga parlors and three gyms divided between New York and LA? Dunno about that one … SEND! The latter company is Zico, and of

24.BEVERAGESPECTRUM.SEPTEMBER.09

course for comic effect (what? you weren’t laughing?) I’ve exaggerated the minute scale of its business. It’s really seven yoga parlors and four gyms. Nevertheless, as so often happens these days, even though the Coke-invests-in-Zico story didn’t entirely make sense to me, I’m glad I stuck it in my newsletter because it actually turned out to be true. (Whew!)

This really is something. Here’s a category that’s barely in its fledgling stage, “dominated,” if that word really applies, by three minnows called Vita Coco, Zico and ONE Natural Experience.

And now Coke is part of the game.

Don’t get me wrong: I love the product, I love the brands, and my colleagues think I’ve already written altogether too much about coconut water over the past several years. Nevertheless, I’m not the only one who’s interested. As astute a capital shop as Verlinvest (hello? they’re the ones who sold Glaceau to Tata) has been the core investor in Vita Coco for some time now.

Still, for Coke to buy in, even just a minority stake, at this stage shows you how much the world is changing. It shows you how even Coke execs no longer have faith in their ability to predict where the next winners will come from, so they’re taking off the blinders and letting their instincts, the buzz from obscure social currency channels and God knows what else guide them. What other explanation might there be? I don’t know the man, but I wouldn’t expect that the Zico investment occurred because Coke CEO Muhtar Kent took a fancy to the brand after guzzling some at his weekly bikram yoga session.

Then again, these days, who knows?

But in making the investment now, Coke is laying aside some major preconceptions. For one, that nobody can successfully market a product to American adults that comes in an aseptic box, which in this country is associated

exclusively with children’s and ethnic brands. Coke’s investment may also reflect a desire to hedge against an increasing reliance on products reinforced with obscure herbal enhancers in favor of a whole food-bet. After all, given its high levels of naturally occurring electrolytes, coconut water marketers are making a convincing claim as nature’s own sports drink. If some consumers start getting leery about what’s in those increasingly baroque iterations of Powerade, Zico could be a good safety net.

Maybe Coke got a further nudge from the fact that, while the segment is generally unknown by the general public in the U.S., it’s a well-established one in vast swaths of Latin America, Asia and other parts of the world. Surely, Americans will recognize that if a billion people around the globe appreciate coconut water, there must be something to it? (Well, maybe not. A handy one-word rebuttal to that line of reasoning is “soccer.”)

Let’s not forget also PepsiCo’s largerticket acquisition of Amacoco, the leading Brazilian purveyor of coconut water. To me, that carries less intrigue than Coke/ Zico: it’s a logical indigenous ploy for the Brazilian business, and it doesn’t have any direct implications for the U.S. market. Together, though, the twin moves are a fascinating reminder of how fast new segments can show up on the radar, of how quickly the beverage giants will react these days, and for me, how much of a change that truly represents.

Now excuse me while I make sure my “PRESS” card is still in my hatband.

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

BRANDS IN TRANSITION

CELSIUS

CELSIUS RISING Having taken on Enviga, the calorie burner looks for national recognition.

by Matt Casey STEVE HALEY CREATED CELSIUS with the intent of forging new territory in the beverage business by founding the calorie burner as a category. The move offered all the risks and rewards of being an innovator – the risk being that the new category might simply fail to catch on, and the reward being that he’d be allowed a running start to establish his brand before he had to face competition from beverage giants.

But Haley didn’t get that luxury.

Not long after he rolled out his first colorfully-wrapped bottles, Haley had to face Enviga. The tea line, created through the combined might of CocaCola and Nestle, offered a Celsius-like mix of nutraceuticals and made the same claims: that it would elevate your metabolism, help you burn calories and, therefore, help you lose weight.

Haley and his company survived that imposing development through a

combination of good fortune and good planning. Before introducing the brand, Haley commissioned a scientific study that proved Celsius could help burn calories.

Then, when he made functional claims, he chose his words carefully. Coca-Cola and Nestle couldn’t say the same. Enviga fell under attack from the FDA, the Center for Science in the Public Interest and 27 states that eventually wrung $650,000 from Coke and Nestle in a settlement.

Even more devastating, Enviga failed to convince a skeptical public that it was worth its price.

In the meantime, Celsius remained outside the notice of regulators, enabling Haley to build the brand and tinker with its flavors, packaging, ownership structure and marketing. Now, as Coca-Cola licks its wounds, Celsius is embarking on a national advertising campaign to support nation-wide retail placement – a move that Haley hopes will edge his company

In one way, Haley said, Enviga helped Celsius. It created a clear space for calorie burners in the cooler.

Celsius vs.

Enviga turned out to be a walkover.

26.BEVERAGESPECTRUM.SEPTEMBER.09

into profitable territory for the first time in its five-year lifespan.

The company made a series of announcements this year, touting a national partnership with 7-Eleven as well as placement at regional chains like Xtra Mart and Price Chopper in New York and New England. Celsius also has an existing partnership with GNC and Vitamin Shoppe, and regional agreements with CVS drug stores, and Haley said he’s working on several more deals for national placement.

He said the agreements not only enhance

Celsius’ availability, it also helps him promote the brand. Big chains are “taggable,” Haley said, allowing him to craft radio and television spots to not only educate consumers on the product, but also tell them where to find it.

But as Haley pushes his brand forward, he has to contend with Enviga’s mixed legacy. In one way, Haley said, Enviga helped Celsius. It created a clear space for calorie burners in the cooler. But now that Coke and Nestle have been successfully sued over Enviga’s claims, it leaves Haley dealing with retailers wondering how Celsius is different.

Celsius, Haley explained, entered the beverage market through the nutrition and supplement field – an arena in which retailers and consumers place a premium on support for functional claims. He built the product on a proprietary mix called MetaPlus that includes ginger, green tea extract and high levels of caffeine. He commissioned studies evaluating the effectiveness of that particular blend, then crafted functional claims that promised no more than those studies proved, and capped it off with the caveat the “individual results may vary.”

With his core in place, Haley rounded out the package with popular CSD flavors, later adding non-carbonated tea flavors to better appeal to athletes.

“The objective is to help you replace what you already like with something that is better for you,” Haley said. “If you’re already drinking a ginger ale... drink this one, and you’ll have less bad stuff and more good stuff.”

His company encapsulated that approach in a commercial currently airing in New England. The spot shows two wom-

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888.298.6629

BRANDS IN TRANSITION

CELSIUS

en, Zoe and Dawn, standing in an elevator and indulging in their “regular afternoon pick-me-ups.” Each has a set of numbers floating above their head displaying how many calories they’ve consumed – zero for a diet soda, and 500 for a whipped cream topped coffee drink. In walks Kate with a Celsius. Her digits show that she’s burned 100 calories. Kate shares her beverage and, at the end of the spot, Zoe ditches her coffee drink.

The commercial also highlights the brand’s female-tilting demographics – something that’s currently in flux. Given its functional claims, the Celsius brand requires more education than most beverages, and Gerry Martin, vice president of marketing for Worcester, Mass.-based Polar Beverages, said that’s why he’s not surprised that the brand has seen slow (albeit steady) growth in the Boston area. Martin said Celsius has done a fine job with consumer education through online marketing, TV commercials and attention from Steve Haley, founder of Celsius.

28.BEVERAGESPECTRUM.SEPTEMBER.09

Celsius debuted in tall, colorfully wrapped glass bottles, and has since moved into 12 oz. slim-cans that increasingly sell in 4-packs.

local TV news programs – but Haley said some consumers are more receptive to the Celsius message than others. He defined his core consumer as “superwomen” (like those conjured in the commercial) who work full time and have a relationship – if not a family – and still want to remain in good physical shape. The brand’s “bull’s eye,” as Haley refers to it, therefore skews female and slightly older.

However, the brand has been gaining traction with men. The most recent Celsius study, published last year by the University of Oklahoma, concluded the drink helped young men who engaged in workout routines burn nearly twice as much fat and gain 50 percent more muscle.

Earlier this year, a news report out of Miami highlighted Tom Speero, who lost 60 pounds and 20 percent body fat through a workout program augmented

by Celsius. The brand also sponsored a fitness challenge for police, fire and ambulance personnel, and awarded the winning

team its $5,000 prize at an Ultimate Fighting Championship event in Las Vegas.

Today, Haley said, the brand is nearing an even division between male and female consumers, and has developed a near-fanatical core user base. Christine Boone swore by the product so fervently it earned her a job. Boone said she first encountered Celsius at a YMCA class, and used it en route to losing 64 pounds.

“I began telling everyone I knew about it,” Boone said. Word of her ministry spread so far that MDT Distributing in Norfolk, Neb. offered her a part-time job as a sales representative. Now, she said, she’s a full-time employee with the unofficial title of “Celsius Mama.”

As customers like Boone and Speero have pulled Celsius toward the gym, the brand has entered new packaging. Celsius debuted in tall, colorfully wrapped glass bottles, and has since moved into 12 oz. slim-cans that increasingly sell in 4-packs.

Haley said he chose glass at the brand’s introduction because he didn’t want Celsius to appear as “just another energy drink” – a serious possibility considering its 200mg caffeine load, equivalent to about 2 ½ Red Bulls. The glass bottle proved a complication, though, for Celsius consumers with active lifestyles. Gyms and athletic fields frequently prohibit glass packaging. Haley said he added cans as an alternative, but they’ve now taken over as the standard packaging. The 4-packs, Haley said, drew their roots from the brand’s glass days.

Retailers told him that customers that liked the brand would raid the cooler for four or five bottles, then leave with the glass containers clanking together in a

BRANDS IN TRANSITION

plastic bag. Haley added 4-packs to add customer convenience and reduce the possibility of accidental breakage. Now, they frequently appear on grocery shelves.

Long term, though, he’d like to grow the brand outside beverages, and has already expanded Celsius into powdered

enable him to quickly bring in more capital. In the end, he said, the company’s share price spiked too high for potential investors, saddled him with the responsibility of publicly reporting the company’s financial losses, and likely stunted the company’s growth for a year.

CELSIUS

views Celsius’ public status as an advantage. It makes the brand accountable to someone, he said, and gives Haley a unique source of feedback that will help him build toward the future of the brand.

In his territory, Martin said, Celsius has already performed well.

“I began telling everyone I knew about it,” Christine Boone, now a full-time “Celsius Mama.” “stick packs.” Haley said he envisions Celsius expanding into smoothies, and possibly coffee creamers. Some of his shareholders, he said, would even like to see Celsius franchise MetaPlus to other beverage companies.

That investor tug represents an unusual aspect of Celsius as a brand. Haley took the company public far earlier in its lifecycle than most successful beverage brands, granting it a special set of advantages and drawbacks. Haley said he had believed that bringing the company public would

“That’s now behind us,” Haley said.

“One very positive of being public – it may be the only positive – every consumer can be an investor, and every investor can be a consumer. We’ve got thousands of investors, and the investors that are consumers have faith in the brand.”

If he has an empty shelf in the middle of Ohio, he said, a shareholder will let him know.

Martin at Polar – which takes an equity stake as a standard part of its agreement with the brands it distributes – said he

“From an authorization standpoint,” Martin said “whomever has seen it has taken it on... with very few exceptions.”

The few accounts that haven’t picked up Celsius, he said, have been holding off due to internal changes, and will likely add the brand in 2010. In the mean time, Haley will make a “huge” marketing investment in Celsius, placing advertisements on billboards, radios stations and national television.

“Times are good,” Haley said. “We’ve certainly evolved.” •

SEPTEMBER.09.BEVERAGESPECTRUM.29

CATEGORY REPORT: JUICE

PREMIUM JUICES STILL HARVEST PROFITS Four ways they’re retaining growth despite value considerations.

By Jeffrey Klineman WHILE A RISING TIDE LIFTS

3. POSITIONING. Premium juices,

all boats, it appears that the doldrums don’t necessarily suck them all in. Take premium juice brands, for example, which have shown surprising elasticity during a period of major economic decline.

In fact, most major refrigerated juices, which had gone through major gains in 2008, managed to hold onto them in 2009 – and this despite some major fiascos, such as the abruptly-canceled rebranding of PepsiCo’s Tropicana. The entire category, one which represents some of the priciest items, dollar-per-ounce, in the beverage spectrum, was only off a fraction of a percentage point, according to the retail information service A.C. Nielsen.

So how has the category managed to retain its growth at a time when value considerations have been of paramount importance to shoppers? There are four key reasons:

whether in the produce section or in the dairy aisle, are in prime shopping position and continue to provide strong margins compared to the other items on the shelves next to them. And the channels they have been strong in, like Whole Foods and natural food sections in supermarkets, remain strong distribution pathways.

1. TRENDINESS. Hot products like wonder-berry acai continue to permeate the heartland, where brands like Sambazon, Bom Dia, and even Bossa Nova (recently acquired by roll-up specialist Beverage Holdings Inc.) while new to many consumers, but continue to grab devoted adherents on both coasts and hang onto them. Despite the economic downturn, these ingredients are still hot.

2. VITALITY. No category continues to offer more consistent product innovation in alignment with consumer need states, from the addition of protein and caffeine to the incorporation of new and current flavor profiles by large brands like Naked, Bolthouse and Odwalla.

30.BEVERAGESPECTRUM.SEPTEMBER.09

4. VARIETY. The “Superfruits” just keep

on coming. As one brand starts to fade in popularity – pomegranate powerhouse POM is down this year, for example – other kinds of products start to come into vogue, from goji berries and mangosteen to the more mainstream blackcurrant and cherry juice.

So if the juice category was impervious to the housing crisis, how big can it get?

Sadly, it appears the answer could be “not much.” That’s because the popularity of the shelves that worked so well for the

category could also limit it: those produce and cooler shelves are among the most valuable in the store: to push their limits further and get rid of, say, lettuce in the produce aisle or 2 percent milk wouldn’t work. Possible expansion might lie in secondary placement, of course; many of these products already thrive at high-end cafes. And for retailers, margins can remain high through skillful rotation of hot brands.

Another possible bump in the road?

Private label. One major manufacturer recently signed a deal to make high-end juice blends under Costco’s Kirkland Pride label. Given the way store brands have come to evoke quality, it doesn’t seem to be much of a stretch that consumers might want to get their acai/goji/ mango fix from a nicely dressed up private label package.

Still, it’s nice to know that at the very high end, there’s something with staying power not labeled “Monster.”

Mangosteen (left) and Goji Berry (right) are two of the superfruits working their way into the juice aisle.

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BRAND NEWS: JUICE

BRAND NEWS R. W. Knudsen. R.W. Knudsen Family has a new line of 8 oz. single-serving organic juices. Perfect for grocers, restaurants, hotels and cruise ships looking for nutritious beverages, the line includes six organic flavors — Orange, Cranberry, Concord Grape, Pomegranate, Apple and Very Veggie — offering caterers and resort managers a convenient, portable solution.

Minute Maid. The newest addition to the Minute Maid Enhanced line of chilled juice drinks, Minute Maid Strawberry Kiwi fl avored juice drink, combines both Yerba Maté and real fruit juice to provide consumers with a delicious natural energy boost. Available in supermarkets and other retailers nationwide beginning in August, Minute Maid Strawberry Kiwi is the brand’s fi rst offering of the popular, great-tasting strawberry and kiwi fl avor combination. The new product combines both Yerba Maté and real fruit juice to provide a natural lift in energy.

Old Orchard. Old Orchard Brands has bol-

stered its Healthy Balance line of “Fit for Your Lifestyle” reduced-sugar juices with the addition of an acai berry blend that features just 29 calories per eight ounces. Healthy Balance Pomegranate Blueberry Acai is available now at major grocery stores nationwide in 64 oz. bottles.

Organic Source. Organic Source Sparkling Juice launched last month as a line of organic juices mixed with sparkling water. These juices are under 50 calories per serving, low sugar and organic-certified by QAI. Cell-Nique. The Cell-nique Family is releasing four new flavors this September on a nation-wide basis: Root Beer, Dark Chocolate, Berry Grape and Lemon Ginger. They all have the same “Super 31 Formula.” Cellnique has also introduced the “Cell-nique/ Obama Stimulus Plan” by announcing EDLP programs at most major

retailers though MBD the first of August. In September O.N.E. will be the official water sponsor of Mercedes Benz Fashion Week in NYC and the Los Angeles AIDS Walk. Additionally, O.N.E. beverages will be served to all arriving celebs on the Emmy’s Red Carpet.

Skylarhaley. Innovative food and beverage

company Skylarhaley has announced that Ryan Cameron has joined the Skylarhaley team as the essn & essn energy Account Manager. Cameron will be responsible for managing existing accounts as well as pursuing new account relationships both locally and nationally to meet ongoing sales goals. He will serve as an internal and external “evangelist” for SkylarHaley, working with the different sales channels, key customers, sales team, and other functional areas within the organization.

The Switch. The Switch juiced up their lineup

of six Sparkling 100 percent Juices with the addition of Lemon Lime. New Lemon Lime delivers a light, crisp citrus flavor that is uniquely refreshing. With all natural ingredients and two servings of fruit per 8.3 oz can, The Switch offers consumers a much needed healthy alternative to traditional soft drinks.

Lemon Lime will make its debut this fall in schools and at retail across the country.

Star Power. Star Power recently rolled out expanded demos and aggressive promotions to end the summer with a bang. The 100 percent starfruit juice, in the coming months, is rolling out several new flavors, many more sampling events, and a ton of promotions to members of its Facebook and Twitter communities. The demos are in-store in New York and New Jersey, with 2 for $5 promotions rolling out through the company’s retailers.

Smart Juice Organic. Smart Juice Organic

O.N.E. O.N.E. Coconut Water with a Splash

has announced that their new fresh-pressed, not-from-concentrate Pomegranate, Pomegranate Tart Cherry, Pomegranate Purple Carrot, Apricot Peach, Fig, Tart Cherry, Pear, Purple Carrot, Quince and Grape juices are now available nationally.

(all four SKUs) and O.N.E. Coconut Water Liters hit Kroger Stores Nationwide in August.

O.N.E. Coconut Water with a Splash hit NYC

NBI Juiceworks. NBI Juiceworks has launched Drenchers Fit ‘N Lean Heart Healthy Tropical

32.BEVERAGESPECTRUM.SEPTEMBER.09

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BRAND NEWS: JUICE Passion super juice. Each 8 oz. serving has only 10 calories, contains bioflavonoids and fights stress and fatigue. Available in shelfstable 16 and 64 oz. sizes, Drenchers Fit ‘N Lean Super Juice Heart Healthy contains “Bodyguard,” a fortification package of 15plus essential vitamins, nutrients, amino acids, electrolytes and herbs.

Acai Roots. Acai Roots has launched a

healthy Açaí Energy Shot and a Healthy Energy Drink Concentrate with its 100 percent natural nex4 Formula. Nex4 combines taste with the antioxidant and omega3 health benefits of acai, acerola, guarana and green tea.

The formula is perfect as an energy shot or for mixing with any liquid to make juices, shakes, smoothies and even healthy cocktails.

The shot is perfect for a healthy and sustained energy boost. Nex4 ready to drink formula comes in an economical 32 oz. bottle as well as a convenient 2 oz. shot size, packaged in a 12-pack for retailers.

Dream Foods. Dream Foods International, LLC, a specialized importer of Sicilian organic kosher not-from-concentrate citrus varietal juices, has introduced its new Volcano Lemon Burst and Volcano Lime Burst counter displays. The display holds two cases of the Volcano Lemon Burst and Volcano Lime Burst in 100 ml (3.4 oz.) or 200ml (6.7 oz.) sizes, allowing retailers to help educate consumers about the brand’s unique qualities and taste.

Sunkist Naturals. Sunkist Naturals has announced its new Sunkist Naturals Lemonade will be available year-round. Sunkist Naturals Lemonade is made from fresh squeezed lemons from their own orchards in California’s San Joaquin Valley and mixed with pure water and old fashioned cane sugar. The lemonade is cloudy because it is made with real, unfiltered lemon juice. No artificial ingredients or preservatives, so it is perishable and needs to be refrigerated. Just lemons, pure water and a touch of sweetness.

Embodi. AMI Brands, LLC, marketer and distributor of high profile healthier beverages recently announced the acquisition of EMBODI, a line of beverages that provides the highest levels of antioxidants of any beverage on the market today. Launched in May 2008, EMBODI is an all-natural, non-alcoholic fruit juice blend packed with red wine antioxidants.

34.BEVERAGESPECTRUM.SEPTEMBER.09

EMBODI is made from an all-natural grape pomace extract that contains the full spectrum of polyphenols and antioxidants found in red wine. Embodi is packaged in an 8 oz. re-sealable aluminum bottle and is available in three flavors: Blueberry Pomegranate, Goji Berry, and Citrus Sangria.

Mysmoothie. Begun at a Paris trade show in 2004, Sweden-based Mysmoothie has launched three new “superfruit” smoothie flavors: acai, pomegranate, and blueberry to its set of five original flavors.

Cutting Edge Beverages. Cutting Edge Bev-

erages (CEB), makers of Juice Bowl, has been experiencing healthy and consistent growth with their established Juice Bowl brand. The brand was originally launched into the US market in 1967 and has had a sustained presence in the domestic market. Currently the brand is sold in aseptic shelf stable Tetrapak, aluminum can and PET plastic bottles and comes in a number of different juice varieties in 100% juice and juice drinks. All package types are 100% natural and fortified with calcium and vitamin C. Long sold mostly to Institutional and Food Service channels, the brand has also recently experienced success in a number of retail programs across the country and internationally. As a result of this success, CEB has made a strategic decision to update the brand image and redesign the package, updating and enlarging the logo as well as the overall look across all package types. The new package design is available in aseptic 125 ml, 200 ml, and 32 oz., PET 15.2 oz., and aluminum can 11.5 oz. packages.

INZone. A new line of TummyTickler Tots, featuring apple juice and purified water with 40 percent reduced sugar (compared to regular apple juice), will be available in market in January 2010. The single-serve and 2- or 3-pack configurations provide excellent offerings for impulse purchases, driving incremental revenue for all retailers, and newly launched larger formats of 8+1 and 11+1 multi-packs are ideal for grocery and mass retailers seeking to drive basket ring.

Bossa Nova. Bossa Nova Superfruit Company is busy leveraging resources under its new parent, Beverages Holdings. Efforts include a heightened focus on in-store activation and distribution relationships. Alton Johnson,

BRAND NEWS: JUICE founder of Bossa Nova, says that the partnership is “already producing synergies across systems. We’re excited to see how explosive 2010 can be in terms of greatly improved retailer support, consumer education and overall brand activation.”

Evolution. Independently-owned Southern California juice brand Evolution remains committed to freshness and authentic superpremium quality. The only brand among the majors that makes truly Fresh Squeezed (unpasteurized) Orange Juice—retaining full fl avor profi le and nutritional value. Evolution also makes fl ash pasteurized juice blends, including vegetable and organic juices, distributed throughout the West Coast.

Honest Tea. Honest Tea is launching a new variety in its Honest Kids organic drink pouch line – Appley Ever After.

With a freshly-picked apple taste, this variety contains 30 percent organic apple juice - more than any other Honest Kids variety. Appley Ever After contains 40 calories, 10 grams of organic cane sugar, 100 percent of the daily-recommended value of Vitamin C and no high fructose corn syrup. This light and refreshing apple variety of Honest Kids will join Berry Berry Good Lemonade, Goodness Grapeness and Tropical Tango Punch in the line of kids’ organic thirst quenchers.

Envy. Envy has announced new distribution agreements with new US Foodservice and Sysco sites, as well as several specialty vend/ snack distributors throughout the country.

The company is branching out from a focus on the Midwestern region and targeting new states throughout the US. Envy is also a proud new partner to the Alliance for Healthier Generation program that encourages healthy eating habits in schools.

Naked. Naked

Juice has introduced two new additions to the hugely popular Protein Zone line: Mango and Double Berry.

As the newest members of the Naked Juice Protein Zone line, both flavors bring more than three servings of fruit and 30 grams of protein per bottle to help fuel strong muscles and a healthy body. Mango offers a juicy flavor burst of mango, orange and apple, while Double Berry delivers a perfect taste fusion of blueberries and strawberries. As with all Naked Juice products, both Mango and Double 36.BEVERAGESPECTRUM.SEPTEMBER.09

Berry Protein Zone flavors contain no added sugars or preservatives.

Ginger People. To drive sales and trial, the

Ginger People are adding new coupon hang tags to their Ginger Soother and Ginger ‘Gizer tonics. The $.50 off consumer coupon will start hitting store shelves in October to coincide with The Ginger People’s October distributor promotion. The popular tonics are enjoying double digit growth through Whole Foods Market nationwide.

Sunsteen Mangosteen Supplement. This

brand has featured new 250 ml packaging for 2009. It is the same great mangosteen supplement without the hassles of a bigger 750 ml or 1 L bottle. Sunsteen Mangosteen Supplement uses whole fruit mangosteen with the pericarp and extract from the pericarp to provide high concentration of xanthones and powerful natural antioxidants. With ORAC value of around 1,500 umole/oz. Sunsteen is a powerful mangosteen antioxidant supplement now available with the ease and convenience of a single serving size packaging.

ALO drink. ALO drink introduces their new-

est flavor, ALO Allure, a blend of mangosteen, mango and real aloe vera juice and pulp. Believe to have cooling properties to counteract “heatiness,” the mangosteen accompanies its tropical cousin, the nutrient rich mango and real aloe vera pulp and juice straight from the leaf, in ALO Allure. As with all ALO drink beverages, ALO Allure is available in 16.9 oz.

(500mL) and 50.7 (1.5L) bottles. ALO drink is now available through Nature’s Best, Tree of Life, UNFI, Market Centre, Chex Finer Foods, Ito En, Faygo Beverages, and many other fine distributors.

Uncle Matt’s. Uncle Matt’s, which celebrates

10 years in the organic orange juice business this year, was recently featured in Florida Trend Magazine and on FloridaTrend. com. Matt was interviewed, and the article is called “A Better Way to Farm.” Uncle Matt’s will be in the West Coast, Southwest, and Rocky Mountain Whole Foods beginning in October.

Functional Brands/Life 2 Go. When General Motors needed to provide stamina and focus to drivers and race crews during the 24 hours of Le Mans, the most demanding endur-

ance race in the world, they came to Jimmy Schmidt of Detroit’s landmark Rattlesnake Club. Chef Schmidt designed a culinary program that delivered delicious balanced nutrition and peak performance, calling it Life2Go. Since then GM Racing and Team Corvette have been victorious at LeMans a record of 6 of 8 years. Distribution is in the Midwest, Michigan Costco Stores as well as Meijer chain wide locations.

Fruit 66. Fruit 66 has been embraced by school districts in every state but one. And, in time for back-to-school, Fruit 66 is partnering with the Alliance for a Healthier Generation, an initiative that supports schools nationwide in developing healthier environments with the goal of reversing the trend of childhood obesity.

Gloji. Gloji, the world’s first and only filtered goji juice, won last year’s Gold Award (Pentaward 2008) for best packaging. It is currently scheduled for placement in RitzCarlton hotel mini bars.

Kiju. Add a splash of organics to your beverage cooler with Kiju , a grab-and-go organic juice. Available in fi ve fl avors, Kiju Organic 100% percent juices are certified organic pure juice and juice blends with no added sugar.

These products are now available in premium, single-serve 12 oz. glass bottles.

FUZE. FUZE has a new juice flavor coming this

September: Goji Wild Berry Flavored Empower.

The new flavor features the taste of goji berries rounded by the distinct taste of black currants, elderberries, cherries and other wild berries. With 10 calories per 8 oz. serving, it contains powerful antioxidants, vitamins C and E, and also contains Chromium and L-Carnitine. For each bottle of Empower sold from September through December 2009, FUZE will donate 10 cents to Susan G. Komen for the Cure, totaling up to $650,000.

Sweet Leaf Tea. Sweet Leaf Tea Company

has launched a new 16oz. proprietary bottle. starting with none other than, The Original Sweet Tea. In addition to all 10 of its classic iced-tea fl avors, Sweet Leaf’s lemonade flavor will be available in the new bottle by the beginning of next year.

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BIG SHOTS The category continues to grow, but big firms continue to struggle with small packages.

By Matt Casey

last decade, many industry insiders dismissed the category as a flash in the pan.

Well, good news for shot marketers: shots look to be shaping up as every bit of a “fad” as their larger, enduring cousins – that is, not a fad at all.

Since 5-Hour Energy arrived on convenience store counters in 2004, the shot category has grown from a niche catering mostly to truck drivers to a product class so mainstream that 5-Hour Energy now spon-

40.BEVERAGESPECTRUM.SEPTEMBER.09

sors a NASCAR team. One analyst estimated that the category nearly doubled its sales to $700 million this year, from about $370 million last year. All that cash has drawn so many entrepreneurs and beverage stalwarts to introduce new shots that one convenience store firm has given up trying to keep them all on the counter. The influx has brought new bottles, new sizes and new functions to the category, along with the expected raft of “me too” products. But even the copycats

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BIG SHOTS have performed well enough that many have returned to their suppliers for second and third production runs.

“My gut says that energy shots are here to stay,” said Carl Sperber, director of marketing for 5-Hour Energy. “At least, until the next great thing comes along.”

While the category has quickly developed into a force so large that any beverage retailer would be foolish to ignore it, it’s still in its early days. 5-Hour, the first energy shot, owns about 70 percent of the category. A second-place player with more than a few percent of the market has yet to develop, and many of the products entering the market are riffing as obviously on 5-Hour as some early energy drinks riffed on Red Bull. Where Red Bull inspired such imposters as Red Dragon, Red Rooster and Red Tiger, 5-Hour Energy has found itself pursued by 6-Hour Energy, Redline 7 Hour Energy and Mr. Energy 8-Hour Energy.

Natural Evolution

Brand

Dollar Sales

5 Hour Energy

$435,102,000

Change vs. year earlier

82.9%

Stacker 2 – 6 Hour Power

$31,006,280

120.6%

Monster Hitman

$15,556,760

N/A

NOS

$15,492,370

147.3%

Extreme Energy

$9,880,565

70.0%

Rockstar

$8,656,598

N/A

Red Bull

$7,205,493

N/A

Amp

$6,470,897

N/A

Upshot

$3,407,022

-60.8%

Nitro 2 Go

$2,973,263

-9.7%

Vital 4U Screamin Energy

$2,923,115

-9.6%

VPX Rredline Power Rush

$2,895,762

988.8%

Spike Double Shot

$2,371,385

1,013.9%

Full Throttle Quick Shot

$1,865,286

N/A

Fusion

$1,594,313

35.0%

Jolt Endurance Shot

$1,393,413

173.1%

Zantrex 3 Insta Shot

$1,332,762

234.6%

Kickin Energy

$1,146,277

-66.8%

Vital 4U Liquid Energy

$1,117,798

-24.8%

Rock On

$1,117,340

N/A

SOURCE: IRI Total food/drug/c-store/mass excluding Wal-Mart.,52 Weeks through 8/9/09

5 Hour Energy, the clear leader in the Energy Shot category, is enjoying the success that comes with being the first to market with a winning innovation.

In a sea of “me too” products, Steaz and Guayaki have created unique offerings while boasting a USDA Organic formulation.

Not every product, though, has been a copycat. Newcomers and veteran beverage firms alike have introduced shots substantively different from 5-Hour. Harcos offered novelty by commissioned globular bottles that resemble the magic potions from fantasy-themed video games for their Energy Potion line. Impulse One took their shots into a larger format by rolling out their 4 oz. Headshot, which also departed from 5-Hour’s low-calorie formula by packing in 21 grams of sugar. Tea brands Steaz and Guayaki have taken an organic angle on shots, and AriZona, which has tried just about everything in beverages at least once, rolled out three different shots that prominently featured tea flavors. Monster and Red Bull have also entered the fray, bringing their well-known flavors to a small format, while Coca-Cola and PepsiCo released Full Throttle and Amp shots, respectively.

The buying public will decide which of those products will survive, and that may not bode well for the biggest companies entering the market. Established players have had a difficult time with emerging, dynamic categories in recent years. CocaCola made several attempts to create an in-house energy drink brand before changing tactics to partner with independent

brands, first Rockstar, then Monster. PepsiCo had better luck with its AMP energy line, but even the one-time Mountain Dew sub-brand ranks fourth behind Red Bull, Monster, and its own new distribution partner, Rockstar. Similarly, both firms have demonstrated difficulty with the super-premium tea segment, with Coca-Cola ultimately buying interest in Honest Tea after Gold Peak failed to ignite. In shots, PepsiCo has pulled the plug on its AMP shot, and Coca-Cola’s Full Throttle shot, according to Nielsen data for the four weeks ending May 16, has stagnated with an unimpressive 0.9 percent of the category. However NOS Power Shot, produced by Coke Subsidiary Fuze, entered the market as a strong player – even if its sales have since tapered – and both big players now boast alliances with independent energy drink brands, which Sperber thinks are poised as strong competitors in the shot category.

“I have a feeling when the dust settles it’s going to be us and Hitman and Red Bull,” Sperber said.

His consistent refrain on the future of the category, though, is that another shot will not overtake 5-Hour unless it’s better.

Many companies – Red Bull included – have proven that the first mover in a category enjoys a strong advantage. Sperber also noted that 5-Hour Energy is his company’s core business, while shots are a “sideline” for his better-funded competitors.

That not only leaves Living Essentials with a more consistent focus, Sperber said, it also frees them from struggling with in-

BIG SHOTS 42.BEVERAGESPECTRUM.SEPTEMBER.09

BIG SHOTS back for a lot more,” Allen said. “Everybody’s rushing to the ternal tensions generated by marketing both a 2-4 oz. shot and market...The average turn around in a real beverage used to be at an 8-16 oz. energy drink. least six months to two years. With these things it’s like boom.”

As Sperber sees it, shots have a tricky relationship with bevAllen said his company can – and does – turn around complete erages: they compete for the same dollars, but boast differing energy shot products in as little as three months. The biggest strengths. A shot, Sperber said, is good for delivering a specific challenge, he said, is finding a name that “isn’t already gobbled function in a rapid fashion, but will never serve as a good up by somebody.” platform for refreshment, rehydration or flavor – a particular Bob Occhifinto, president of New Jersey-based co-packer NVE failing highlighted in a recent New York Times article. Sperber Pharmaceuticals, described a similar picture. In November, he said that not only did he never expect 5-Hour to be widely said his company had doubled the number of energy shot brands praised for its flavor, he didn’t want it to be. He doesn’t want it dealt with in each of the two previous years. Since then, his people coming to the product for the wrong reasons. Additionbusiness has continued on an upward vector. ally, some brands involved in both energy drinks and energy shots have put themselves “upside-down on price,” as Sperber put it. They’re offering an 8 to 16 oz. product in the ›› OTHER FUNCTIONS cooler for around $2, while selling a gulp-sized shot, warm, it also includes “Detox,” “Focus,” “Burn,” While 5-Hour Energy continues to run for $3 next to the cash register. and “Immunity.” strong by packaging caffeine, niacin and “What they’re doing kind of goes The idea, according to company founder B-vitamins in small bottles, a handful of Ben Lewis, is to offer consumers exactly firms have used the 2-4 oz. screw-tops as a against the American value proposition,” what function they need in an easy, smallplatform to deliver other functions.

Sperber said. volume format.

The emerging anti-energy beverage But consumers have proved that they’re “I don’t really need much more energy on trend, for example, quickly diversified into willing to pay more for a gulp than for a day to day basis,” Lewis said. “but I need shots. Funktional Beverages, Inc., which a 16 oz. can. Consumer Edge Research more focus. I’m the first to admit that.... launched its 16 oz. relaxation brand Purple founder Bill Pecoriello reported earlier Other people need other functionalities.”

Stuff last July, added a shot just three this year that shots are taking share Both Lucas and Lewis say that their months later. Tim Lucas, the company’s and usage occasions away from energy shots don’t directly compete with 5-Hour chief marketing officer, said the shot is not drinks. He evaluated data from InformaEnergy and, instead, bring new consumers only performing well, but has created more tion Resources Inc., that covered the 12 into the category. excitement than its parent product did. It’s weeks ending May 17, and found that But Carl Sperber director of marketing also quickly catching up to the parent prodfor 5-Hour Energy said that energy is what uct’s sales, Lucas said. shots grew by 84.5 percent year over year, Americans want.

Lucas said he sees room for other funcwhile drinks slipped by 0.8 percent.

“I think most Americans think it’s their tions in shots. His firm recently released Either ignorant of that trend – or in birthright to be tense and uptight,” Sperber Red Stuff – a more traditionally energy an attempt to get ahead of it – energy said, “and they don’t mind it.” shot – and Lucas said the company will drink brands have continued to pile into Even if other functional shots are a way continue to roll out more color-coded functhe shot category. Joey Allen, President to bring incremental sales into the categotions in the future. of Allen Flavors, Inc. said his company ry, Sperber said, 5-Hour will be sticking to But, where Funktional Beverages is works with a lot of energy drinks in 8 oz. energy for the near future. introducing one product at a time, Purcans “and just about everybody who was Blu Beverages (better in that size is gravitating towards also known for its Give PurBlu Beverages recently launched a six SKU line of shots, each with a having a shot.” line of charitable different and specific function for the consumer. bottled waters), has Allen said that, early on, he counted taken the shotgun himself as one of the energy drinks approach. At the 2009 naysayers who expected the category Natural Products Expo to have a “limited run,” but he said he West, the company won’t make the same prediction about announced a six SKU shots. He said he sees a new competitor line called Potion just about every day. He’s seen relaxation Herbal Remedy. The and anti-hangover shots, but most of it’s line includes both an energy, and, he said, right now, half the energy shot (in this projects in his lab have something to do case called “Power”) with an energy drink or a shot. (For more and a relaxation shot (called “Calm”), but on other shot functions, see sidebar.)

“We’ve gotten a lot of people come

BIG SHOTS 44.BEVERAGESPECTRUM.SEPTEMBER.09

GREAT 5-Hour Energy® sells

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

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

$7,000,000 $6,000,000 $5,000,000 $4,000,000

GRAPE

introducing new

$3,000,000 $2,000,000 $1,000,000

Do your stores carry all four?

The top four selling SKUs are 5-Hour Energy. ©2009 Innovation Ventures, LLC. All rights reserved.

www.5hourenergy.com

NACS booth 4138

SEPTEMBER.09.BEVERAGESPECTRUM.45

BIG SHOTS “There’s been no peak yet... Every week there’s new companies. It’s not stagnating at all,” he said.

To cope with that growth, NVE has installed a total of four energy shot-filling lines that fill the factory with a constant mix of rattles, rumbles and pneumatic hisses. The fourth line started churning out the diminutive packages in April, and Occhifinto said he’s currently satisfied with his company’s capacity. He doesn’t have any plans to add equipment in the immediate future, but is considering equipment to handle organic shots, as more competitors have considered using the organic badge since Steaz and Guayaki set the precedent.

›› OTHER ENERGY PLATFORMS

2.

1. SPRAYS Energy sprays, which resemble small, pump hair spray bottles, boast multiple doses of a concentrated caffeine mixture that provide a cumulative 80 hours of energy, according to one marketer.

3.

2. CHEWS & GUMS Imagine 5-Hour Energy crossbred with Starburst candies, and you’ve got a pretty good picture of what an energy chew is. Similarly, imagine a concentrated energy gel in a piece of Bubblicious-style gum. No promise that either of these will taste good, but they will get caffeine into your system quickly.

Space Race Until then, though, his factory will continue to churn out 30 million shots per month, contributing to an escalating space challenge at retail locations.

What started with a cardboard box filled with shots has quickly become a mess of boxes stacked on and around the cash register, sometimes filled with mismatching product. To cope with that clutter, shot brands, including 5-Hour and NVE’s in-house brand Stacker 2: 6 Hour Power responded by offering branded counter racks to fit the shots in. Sperber calls it “community racking,” and said it’s “a little painful” to give a 5-Hour rack to a retailer that’s almost guaranteed to use it to hold a competitor’s product, but he said it’s a “goodwill thing.”

Even those racks may not be enough.

Terry Johnson, director of marketing for the 40-store Uppy’s chain based in Chester, Va., recently told Convenience Store/ Petroleum magazine that he decided to raise the shot segment’s profile by giving it a rack off the counter. Johnson created a six-shelf display, called it the “Energy Shot Headquarters,” and placed it near the cash register. So far, he said, the displays seem to be doing well, and they help him deal with the wild proliferation of energy shot brands arriving on the market.

“With the new brands coming out, we would have had all that sitting on the coun-

American consumers used to grab a cup of coffee or a box of caffeine pills when they needed a legal, overthe-counter stimulant. Many still do, but, following the energy revolutions pioneered by Red Bull and 5-Hour Energy, marketers have crammed caffeine into just about every platform one could imagine. Here’s a list of 8 promising or bizarre attempts to creating new energy products.

3. “ULTRA” & “MICRO” SHOTS Several marketers, including DnyaPep and Fixx Extreme, have dispensed most of the flavorings and additives – even the water – that get between you and your caffeine, packing high doses of the stimulant and other energy mainstays into 5 mLs or less.

4. PATCHES For those too busy to chew or swallow, energy patches stick to your skin – not unlike a nicotine patch – to provide a constant dose of caffeine throughout the day.

4.

5. ENERGY FOOD From potato chips to oatmeal to Snickers bars, a number of companies have begun injecting caffeine into things that you were probably planning to eat anyway.

6. LIP BALM Proof that you can put nutraceuticals into just about any substance suitable for human application, Eco Lips has started marketing a lip balm infused with caffeine, green tea and B12.

8.

7. ENERGY CANDIES This one may have some unintended consequences.

Caffeine gets people jazzed up. Kids like candy, but kids and energy candies shouldn’t mix.

8. BATH PRODUCTS If you need a pick-me-up before your morning coffee, or think your bubble bath is a little too soothing, you can now buy caffeinated soap and body lotion.

BIG SHOTS 46.BEVERAGESPECTRUM.SEPTEMBER.09

BIG SHOTS TM

ter,” Johson told CSP “There’s just no place for all that stuff.”

Retailers’ difficulties with organizing the category may be exacerbated by the number of channels through which shots are shipped, and confusion on what, exactly, they are. Originally viewed as a sub-category of energy drinks, shots will not be listed with beverages at this October’s National Association of Convenience Stores Show. Following a suit filed by Living Essentials, NACS declared last November that it would categorize shots as

“There’s been no peak yet...

Every week there’s new companies. It’s not stagnating at all, ” said Bob Occhifinto, president of co-packer NVE Pharmaceuticals.

TM

health and beauty care products. Natural products, like PurBlu’s Potion Herbal Remedy, have used natural distributors like UNFI and Tree of Life. CEO and founder Ben Lewis said his company – better known for its GIVE line of charitable bottled waters and energy drinks – has also used candy and tobacco houses to move his shots. Other beverage companies have leveraged their existing relationships with DSD houses to distribute their products. Red Bull, according to Beverage Business Insights, went so far as to turn down chain wide authorization from 7-Eleven because it insisted on staying with its existing distributors. 5-Hour Energy, according to Sperber, mostly ships its product directly to stores, or works through a broker when chains prefer that method.

In the mean time, not much has changed about 5-Hour Energy.

Since its debut five years ago, Living Essentials added an extra strength and a low-caffeine variety, as well as three new flavors.

The brand also swapped out its generic white cap for a red cap with an embossed “energy guy” logo and a depressed top to ease the process of peeling off the product’s plastic safety seal.

The company’s big push, Sperber said, has been finding new outlets for 5-Hour – Living Essentials recently added placement at warehouse stores Sam’s Club, BJ’s and Costco – and monitoring the competition.

“We’re not smug and satisfied with our success,” he said. He added that the company will keep pushing the brand until it hits its limit. Then, he said, it will figure out what to do next. •

BIG SHOTS 48.BEVERAGESPECTRUM.SEPTEMBER.09

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BRAND NEWS: ENERGY SHOTS

BRAND NEWS Harcos. Mana Energy Potion partnered with

Ijji, makers of the Lunia video game, to bundle purchases of both real-world and in-game Mana Potions. The brand also released a new apple-cinnamon Health Energy Potion.

Guayaki. Guayaki introduced a line of or-

ganic, mate-based energy shots packaged in glass bottles. The product debuted in Lemon, and Chocolate Raspberry varieties and more recently added Lime Tangerine.

XO Energy Beverage Corp. XO’s 6 oz.

energy drinks are now made in the U.S.A., are Kosher certified and have a 24-month shelf life.

Labrada Nutrition. Charge! SuperShot is

now fortified with 2450 mg of fruit based anti-oxidants and B-vitamins, and still contains zero sugar.

Iron Horse Beverage LLC. Category 6 Hura-

can energy shot is now available in 15 states, with a West Coast introduction slated for the fourth quarter of 2009.

DD Beverage Co. DD Beverage Co. has in-

troduced Beaver Buzz CORE Energy Shot as a 2 oz. line extension to its Beaver Buzz CORE Energy beverage. The shot comes packaged in a flask-shaped bottle.

Dayslim/Nightslim. DaySlim and NightSlim 5 hour appetite suppressant launched at the Bevnet LIVE conference in New York in May. Soon after, the company updated the product’s name, packaging and formulation to reduce its calorie load and distance its branding from 5-Hour Energy.

Xfuel. Xfuel announced its sponsorship of Team Foxy, the largest top-ranked female gamers’ organization.

Hansen Beverage Co. Monster Energy has expanded its Hitman Energy Shooter 3 oz. line to include two new additions, Sniper and LoBo. Premium Energy, LLC. Premium Energy

added Turbo Power Extreme Energy to its shot offerings. The company also added two professional fishermen, Bill Dance and Roland Martin, to its promotion team.

Power Trip Beverages. Power Trip Beverag-

es recently expanded its energy shot offerings by adding two new flavors, Mango and Berry Punch. These new flavors join Extreme Citrus.

Power Trip also increased the size of its shots to 2.5 ounces for the same price as the previous 2 oz. product.

On Go Energy. On Go has bolstered its mar-

keting efforts by holding samplings, sponsoring events, and having by scoring placement in music videos by Katrina Carson and Woodward that will be aired on BET and FUSE. NVE Pharmaceuticals. NVE rolled out a new “Extra Strength” version of Stacker 2: 6 Hour Power that retails for the same price as the original. Additionally, the company announced a 2 for $3.99 promotion for its original strength shots.

Wet Planet Beverages. Wet Planet Beverages recently expanded its Jolt Endurance Shot product line to include two flavors: Wild Grape and Berry Blast.

Folsom Distributing. Blutonium recently

added CRAM BERRY shot to its line. It is a strong, tart, cranberry flavored shot with the Blutonium energy blend packaged in a wide mouth bottle.

Bayshore Specialties. Bayshore’s FUELcell “BULLET,” a 5 oz. single serve in a test-tube, launched in 7-Eleven Canada. FUELcell also launched its new portfolio into Jamaica, UK and the Bahamas. Other international markets are available for distribution.

RAGE Beverages Inc. RAGE SHOT en-

tered the market in November 2008. RAGE Beverages Inc. launched the product by running 2 for $5 promotions in chain stores. Independent convenience stores were also offered a free box of RAGE SHOT with their order of five or more cases of RAGE 16 oz. energy drinks.

SEPTEMBER.09.BEVERAGESPECTRUM.51

BRAND NEWS: ENERGY SHOTS Peak Energy Distributing Ltd. Peak Energy Distributing introduced its new Peak 6 Hour Lemon Lime flavor, which joins the brand’s existing flavor, Very Berry. Peak Energy also debuted Canada’s first energy shot vending machine.

XS Energy Drink. This summer, XS Energy

Drink entered the energy shot category with its 2 ½ oz. Citrus and Wild Berry shots.

The Healthy Beverage Company. Steaz launched Steaz Energy Shot, with 150 mg of plant-based caffeine. Steaz Energy Shot contains the same ingredients as Steaz 12 oz.

Energy Drink, including organic, Fair TradeCertified green tea.

Everlast Worldwide, Inc. Everlast introduced Everlast E-DRENALINE Energy Shots in January with a sampling and outdoor advertising campaign in Chicago. The company is conducting a broad, national advertising campaign in publications such as Men’s Health, Women’s Health, Men’s Fitness, Shape Magazine, and UFC Magazine, and sampled the product at UFC 100 in Las Vegas.

Zipfizz. Zipfizz has focused on its best sell-

ing Liquid Shot, Fruit Punch, which has been reformulated to improve the flavor. Zipfizz is sold at Costco, and has distribution through Odom corporation in the Northwest and in many other retail outlets throughout WA, OR and ID. Modena Nutrition. Modena Nutrition has announced the availability of its 42 Gram Protein Bullet with Vitamin B in participating Smoothie King Nutritional Lifestyle Centers across the Country. Protein Bullet is infused with 2300% Vitamin B12 to aid in protein absorption and pre and post workout energy levels.

Dynamic Nutritionals, Inc. On July 24,

2009 Cyclone Energy Shot kicked off a marketing and promotional campaign at the NASCAR Brickyard 400 in Indianapolis. Cyclone Energy Shot has partnered with Wayne Edwards (#48 truck) in the NASCAR Camping Truck series. Potions In Motion of Boca Raton, Florida has agreed to distribute Cyclone Energy Shot in select channels throughout the state of Florida.

52.BEVERAGESPECTRUM.SEPTEMBER.09

Hype Energy Drink. Hype Energy Drink ex-

panded its product line with the launch of the new Hype energy shots in US and Canada.

This product is available in two non-carbonated flavors, MFP and Marionberry.

BSN. BSN launched the 4 oz. N.O.-XPLODE Power Shot. The two-serving shot is available in Fruit Punch and Blue Raz, N.O.-XPLODE POWER SHOT will carry the designation as the Official Nutritional Supplement Provider to the Ultimate Fighting Championship.

VPX. VPX promoted its REDLINE Power Rush shots this summer with a “Buy 2 for $5” promotion. The product now has distribution in all 50 states through DSD networks or Coremark, McLanes or Eby Brown.

Fuze. NOS appeared in EA’s Need For Speed:

SHIFT video game, and hosted a week-long NOS Powershot lounge two blocks from the Electronic Entertainment Expo. The move was designed to position the NOS Powershot as the energy of choice for gamers.

Xyience. XYIENCE added the X Energy Shot, or X Shot, as a complement to its Xenergy beverage line. Available in CranRazz, the shot provides a combination of B3, B6, B12 and B5 vitamins and a propriety energy blend as effective as a 16 oz. Xenergy. XYIENCE recently renegotiated a multi-year energy drink sponsorship agreement with the Ultimate Fighting Championship. The X Shot is the UFC’s official energy shot.

Cellutions. Cellutions introduced its caffeinefree Modjo Life Natural Energy Shots. Modjo shots are backed by a national media campaign and are available at CVS.com, Circle K, SaveMart, Mapco and several 7-Eleven Franchise groups.

Promotional Energy Products. Promotional Energy Products introduced its Custom Energy Shots early this summer. The shot is sugar free and packs 150mg of caffeine. Visit CustomEnergyDrink.com or call (323) 604-1040 for ordering information.

Bigg Juice Industries Ltd. Big Juice re-

cently introduced its Reload Energy Shots in see-through bottles. Reload is available in Clear Endurance, Energy and Extreme vari-

If all you’re selling is energy shots, you’re leaving half the money on the table.

• The first of its kind in a new category • No calories, no sugars and no carbs • Refreshingly tasty blend of Melatonin, Valerian Root, Rose Hips and B Vitamins • Approved for 7-ELEVEN® • Strong margins on a $2.99 Retail Mc • Available through McLane

These days, people are more stressed out than ever. iChill was developed to help them unwind at the end of a long, intense day. It’s the relaxation shot that’s getting everyone excited. Make more room for iChill, and help your customers “unwind from the grind.”

800-866-6354 www.iChill.com

BRAND NEWS: ENERGY SHOTS eties. Each boasts a different ingredient mix.

Reload is available in 36-unit and 16-unit counter displays.

at the National Association of Convenience Stores show in October.

Red Bull GMBH. Red Bull entered the energy

Nitro2Go. Nitro2Go, Inc. debuted its two-

serving, 4 oz. Mega Shot at a suggested retail of $2.99.

shot battle this summer, debuting Red Bull Energy Shot in cylindrical 2 oz. bottles shaped to resemble Red Bull cans. The shot comes in two varieties: Regular and Sugar-Free.

PurBlu Beverages, Inc. PurBlu Beverages,

Inc. recently launched Potion Herbal Remedy in six functional varieties – Energy, Focus, Burn, Calm, Immunity, and Detox.

Fluid Motion Beverage Inc. Fluid Motion Beverage Inc. has expanded into Canada with their new 3 oz. Talon Blood Punch Sharp Shot.

The product is in Mac’s Convenience Stores in Western Canada.

Zenedge, Inc. Zenedge is concentrating its

branding efforts in the motocross world along with other extreme sports. Zenedge is also running commercials on TNT, MSNBC, CNBC, TBS, Bravo, Lifetime, and USA Network.

Imbibe. Imbibe added Wild Stallion shots to the Wild Stallion Energy Family.

In addition, Imbibe recently launched new extensions to its Kickstart line of functional shots. Kickstart Energy Shots are now joined by Hangover, Virility, Weight Loss and Joint relief.

Yunker. Yunker was introduced to Japan in

the late 1950s, and is scheduled to launch nation-wide in CVS this year with its Yunker Energy & Health shot.

US Beverage Manufacturing. US Beverage Manufacturing now offers private label 2 oz. energy shots. Choose from house brands Wild Buzz or Fuel or create your own. For more information visit us at www.usbeveragemanufacturing.com.

Cougar Energy Drink. Cougar Energy Drink introduced its 2 oz. shot scientifically engineered for women. Cougar will be expanding its distribution into Canada after partnering with several key distributors.

Shotz Nutrition, LLC. Shotz introduced

its Hispanic line with flavors like Horchata Atómica, Mango Maniático and Fresa Impactante as well as Spanish language packaging.

BDI Marketing. BDI Marketing announced

AriZona Beverages. Lil’ Drug Store Prod-

ucts and AriZona Beverages have partnered to introduce the new AriZona RX Energy Fast Shot. The new AriZona RX Energy Fast Shots were unveiled and sampled at the National Association of Convenience Stores trade show in Chicago.

Drivin’ Energy Nutrition, LLC. Drivin’ Energy Nutrition debuted Go Juice Energy Blast and Truckers Luv It! Energy Shot last fall. Truckers Luv It! has been placed in TA Travel Centers, Flying J, Pilot Travel Centers, Love Travel Centers and many independent truck stops. Go Juice Energy Blast is in TA Travel Centers, Flying J and most McLane warehouses.

Living Essentials. Living Essentials will debut a new fl avor for 5-Hour Energy, Grape,

54.BEVERAGESPECTRUM.SEPTEMBER.09

the release of its new .357 Super Magnum Energy Shot.

BDI Marketing announced the retail debut of its new mango-flavored triple strength 2 oz. shot, Xtreme Energy Rush.

BDI Marketing announced the release of its popular male sexual stimulant Top Gun in a 2 oz. liquid shot.

MET-Rx. MET-Rx recently introduced a television advertising campaign for its AMPED Up energy shots with commercials on ESPN. Generator Labs, LLC. Rhino Mike’s Genera-

tor Energy Shots hit the market September 15.

The shot, designed by a certified fitness trainer, is available in South Florida and online at www.drinkgenerator.com.

e r o M ? s s Le H C U M HOW

IN E R E H IS T

How low-sugar and health conscious beverages can gain traction.

BY MIKE WEST

INSURRECTION IS MOUNTING

in the beverage cooler. The once meek and mild low-calorie health beverages, until recently relegated to the odd-ball health-nut niche, have grown rebellious. Premium bottled teas, lightly sweetened sodas, and electrolyte-enhanced waters are staking a larger claim to shelf space as a healthful alternative to sugar laden drinks. Consumers are reaching for them more as they look for beverages withâ&#x20AC;Ś less.

58.BEVERAGESPECTRUM.SEPTEMBER.09

Proof that

the market for healthful beverages is growing can be found in the purchases new product decisions made by the major players. Coke paid $4.2 billion for glaceau, the maker of vitaminwater, for fear of missing the boat. AriZona, maker of a full sugar, 24 oz. 270 calorie can of iced tea, is pushing a 20-calorie (per 8 oz. serving in a 20 oz. bottle) line of “tea waters” with Nestle. Gatorade launched G2, which touts half the calories of their flagship sports drink. The trend towards better-for-you beverages is forcing the whole industry to react. But even so, the top selling SKU’s in the healthful drink

aside, met consumer demand for “slenderizing beverages” for the second half of the 20th century. These health conscious beverages cut the calories but tried to stay similar in flavor to their full calorie brethren by using synthetic non-caloric sweeteners. What has changed is that now wary consumers have begun to read ingredient lists and are moving away from laboratory chemicals in favor of organic and natural ingredients. This has forced the industry to modernize its approach to formulating beverages.

The industry has rolled its response into one buzzword: innovation. It would appear that there has been action behind the corporate talk. Formulations experts are experimenting with how little sugar or sweetener they can put in a beverage

calories and chemicals and the result is a new generation of drinks in which less is more.

The chief motivator for change may be the perception that America is facing a major health crisis and sugar drinks are responsible. Walter Willett, a public health advocate, spelled it out in a recent report from the Harvard School of Public Health. He blames sweetened beverages for contributing to obesity and diabetes in America. Willett found a relationship between sugary drinks and weight gain in both adults and children.

Willett called for a new category of healthful beverages that are low in calories. But, he said, the traditional way of cutting calories, using artificial sweeteners, won’t foot the bill this time. He believes

The American Beverage Association reports that there has been a 9.6 percent decline in the consumption of fully sweetened drinks from 2000 to 2008. and keep it palatable. This year Stevia category are still among the sweetest. is all-the-rage as a natural non-caloric So the question is: what are the outer sweetener. Organic certifications and limits of less-sweet?

The answer can be found in some of the paired down ingredients lists can be found on many new labels. This new approach new beverage categories that have been acknowledges consumer concern about sprouting like weeds over the past several years. A broad range of products struggle to differentiate themselves by advertising energy properties, life-style claims, and 8 oz. health benefits. Consumers serving enjoy product choices that comparison they never had before, leading them to expect a beverage more carefully tailored to their personal preferences.

Water 0g of sugar 0 The American Beverage Honest Tea Assam Black Tea 5g of sugar 17 Association reports that the owater infused, peach mango 9g of sugar 35 result of all these new choices Gatorade, lemon lime 14g of sugar 50 has been a 9.6 percent decline in the consumption of fully sweetened drinks from 2000 to 2008.

The migration from sugar may be attributed to the recognition of America’s expanding waistline. But the demand for low calorie drinks in not new. Diet beverages, first introduced enmass in the 1960’s, persistent long-term health questions

60.BEVERAGESPECTRUM.SEPTEMBER.09

Coca Cola Classic

27g of sugar

Tropicana Orange Juice

22g of sugar

that solving the obesity epidemic demands a wholesale adjustment of the American palate, with kids and adults alike learning to enjoy a lower level of sweetness. That level? No more than two teaspoons, or eight grams, of sugar per eight oz. serving, or about 35 calories, and no additional non-caloric sweeteners. That’s the equivalent to the sweetness found in seven cherries, half an apple, or one 16 oz. bottle of Honest Tea. Honest Tea is an interesting example because it lies in a product class, bottled teas, that has shed a lot of calories calories in the last few years and still calories sells well. Frank Del Corso, calories a Senior Food Technologist calories at Allen Flavors, a formulations company, said that 97 calories bottled teas are a natural 110 calories place to start cutting back on sweetness since people are already drinking them with the perception that tea is good for them. According to Del Corso, even AriZona cut back on calories with its green tea several years ago, helping scale back consumer expectation of sweetness and

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paving the way for the bigger cuts made

by Honest Tea. Del Corso says that mainstream companies are reducing the calories in their new formulations of edgier products as well.

For example, he says, enhanced waters, “when they first came out, were pioneers at reducing calories. They came in at 50 calories using crystalline fructose. Now when consumers drink them it seems too sweet. It’s a change in consumer tastes.”

Even CSD’s, long the chief culprit for fostering American’s affinity for sugar, are pushing the edge of less-sweet. GuS, Grown Up Soda, a premium, no preservatives, soda that uses cane sugar, has found appeal among people who want a more refined flavor. Steve Hersh, founder and CEO, says that, from a formulation per-

8 oz. serving

Dry Soda 36 calories

Dry Soda falls within Willett’s criteria of no more than two teaspoons, or eight grams, of sugar per eight oz. serving. It’s various flavors weigh in between 35 and 40 calories.

tic about the future of less sweet premium beverages. Honest Tea is an interesting barometer of less sweet in the bottled tea category, as many of its products have only 17 calories. And now with Coke owning a 40 percent stake in the company, at least one big player is also betting that there is a future in less sweet.

Barry Nalebuff, Co-Founder of Honest Tea, and economics professor at Yale, applied economic reasoning to their low sugar approach to beverages. Honest Tea includes a graph on the Green Dragon Tea label that shows the margin of utility curve of sugar and how it begins to decline after about two teaspoons per eight oz. serving. Why add more sugar when you aren’t getting anymore bang for the calorie?

Solving the obesity epidemic demands a wholesale adjustment of the American palate, with kids and adults alike learning to enjoy a lower level of sweetness. spective, he can’t offer fewer calories or less sweetness because he uses fruit juices that carry a heavy load of calories, and the acidic flavors and carbonation require a higher level of sweetness to make a palatable drink. At around 60 calories, GuS weighs in below the typical CSD (Coca Cola Classic has 97 calories), but nevertheless exceeds Willett’s criteria.

Hersh says, “This is not a radical

8 oz. serving

vitaminwater10 10 calories

Early enhanced waters entered the market with around 50 calories per serving, but changing consumer tastes have led the category to reduce sugar and calories.

62.BEVERAGESPECTRUM.SEPTEMBER.09

departure from traditional sodas, just a less sweet departure.”

If GuS is a moderate departure from the typical CSD than Dry Soda is a sea change. Their soda weighs in between 35 and 40 calories, which does fall within Willett’s criteria. Dry Soda started in 2005 by targeting high-end restaurants in Seattle, with the idea that a low-sugar soda would pair well with food. And momentum is building: Starbucks picked them up this spring and now offers Dry Soda as a single serve option in their Northwest locations.

Even more interesting is the motivation behind the brand: Sharelle Klaus, founder and CEO, says that she started Dry Soda because she felt that, “there wasn’t innovation in the carbonated beverage market for people who wanted a less-sweet option from a palate standpoint.”

Of course Dry is a premium option – at $5.99 a four pack – and if it is going to become more than a niche product it will need to become price competitive with its canned competition. “We are creating a new category that will continue to grow for the next 10 to 15 years,” Klaus says. “We can get price competitive, but it will take time.”

Klaus isn’t the only one who is optimis-

Also playing in the less-sweet category is owater. An enhanced water brand that approached the sports drink market with an equally low sugar profile, owater makes electrolyte-enhanced waters with 0 to 35 calories. This stands in sharp contrast to the original sports drink (no, not water) Gatorade, which packs a punch with 50 calories.

Tom First, the founder of owater, says,

8 oz. serving

Gatorade G2 25 calories

In a move aimed at health-conscious consumers, Gatorade’s G2 arrived with 25 calories per serving – half that of the original.

like Klaus, that wringing out calories is only part of the goal. “We are creating products that not only are low calorie, but are less-sweet. And I think those are two very different things. It’s a bigger challenge to go after sweet.”

First and Klaus may be swimming against the tide: humans appear to have an evolutionary preference for sweetness as a way to identify sources of nutrition.

Dr. Maureen Story, Senior Vice President of Science Policy at the American Beverage Association sees the preference for sweetness as an innate human evolutionary characteristic. “We are programmed from birth to like sweet things… A recent study suggests that humans are hard wired to equate sweetness with surviving as well as growing.”

soft drink tax to reduce their consumption. He recommends evening the playing field by requiring beverage makers to include on the label the full bottle calorie count, a step already taken by some beverage companies.

A soda tax initiative has already been considered, albeit rejected, in New York and Maine. But it did put a previously unthinkable idea on the table, one that continues to maintain traction on Capital Hill as congress ponders a soda tax to help fund health care reform.

Few in the beverage industry want to see an increase in regulations. Bill Meissner, President of Talking Rain, a company that makes lightly sweetened waters, is in the position to benefit from a health-focused government regulatory policy. But

appearance of health that is selling the less-sweet beverages.

Melissa Abbott, a Senior Trends Analyst at the consumer-research consulting firm, the Hartman Group, has found an upswing in the consumer preference for less-sweet beverages. She says that the decline in CSD consumption over this past decade was followed by an increase in consumption of comparatively less sweet athletic beverages and people making their own concoctions at home with seltzer and juice.

Abbott says, “There is a strong trend for the future of less-sweet beverages as consumers become aware of what they put in their bodies.” She has found that people are rejecting beverages with unfamiliar sweeteners and choosing naturally sweet-

“There is a strong trend for the future of less-sweet beverages as consumers become aware of what they put in their bodies.”

– Melissa Abbot, The Hartman Group And we have grown, but mostly out.

Unfortunately, in this calorie rich age, seeking calories through sweetness has not helped Americans thrive. From a public health perspective there is reason to hope for a mainstream change in tastes. With most of the products mentioned here still on the periphery the question is how to make them appeal to mainstream Americans?

One answer is external: there may be a regulatory clock ticking for the beverage industry. Willett would like to see the government stop subsidizing high-calorie beverages through exclusion from the food stamp program, and recommends a

he is not interest in a regulatory approach.

“I don’t think that they should have any legal or regulatory involvement in what is made available to consumers.”

The shadow of regulation may spur real innovation in the industry that might lead to a large-scale change in consumer preferences. But in the mean time, the market driven answer may be found in the excitement surrounding Stevia, a natural sweetener that recently received FDA approval. Whether or not that particular sweetener is the answer remains to be seen, but the buzz reflects that consumers are gravitating towards beverage brands with a strong health aura. And it is the

Honest Tea’s Green Dragon Tea label showing co-founder Barry Nalebuff’s “sugar-utility curve.”

Club’s efforts to preserve and protect the planet.

Ingredients: Purified water, organic cane sugar, organic green tea, organic lemon juice concentrate, natural passion fruit flavor and citric acid. Contains Less Than 1% Juice. about 1/2 the caffeine of coffee (48.6 mg per serving)

Nutrition Facts Serving Size 8 fl. oz. (236 mL) Servings per Container 2

Amount per serving Calories per serving 30 Calories per bottle 60 %Daily Value* Total Fat 0g 0% Trans Fat 0g Sodium 5mg 0% Total Carbohydrate 8g 3% Sugars 8g Protein 0g 0% Iron 0g 0% *Percent Daily Values are based on a 2,000 calorie diet.

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Honestly yours, p.s. Honest Tea® is a proud supporter of Sierra

GREEN DRAGON TEA

GD3-09

Refrigerate After Opening

ME, HI 5¢ deposit We use glass bottles because they are laterally recyclable, which means they can be recycled back into glass bottles. This bottle contains approximately 10% recycled content. Please keep the (re)cycle going.

Certified Organic by Pennsylvania Certified Organic Honest Tea Inc. 4827 Bethesda Ave. Bethesda, MD 20814 We welcome your honest feedback. 800-865-4736 Subscribe to our newsletter! www.honesttea.com

64.BEVERAGESPECTRUM.SEPTEMBER.09

GREEN DRAGON TEA WITH PASSION FRUIT 16 fluid ounces 473 ml

GREEN DRAGON TEA

GREEN DRAGON TEA

It doesn’t take an econ Ph.D. to brew tea — but Barry has one and sometimes it actually helps. Here’s how: Sugar, like most goods, has a declining marginal utility. One teaspoon takes away the tea’s bitterness. Another adds a nice sweetness. That’s where we stop. More sugar adds calories but not much more taste. By the time you’ve got six teaspoons per serving, it’s liquid candy.

ened beverages like GuS or Izze that use sugar or juice.

To that end beverage makers have tapped into the consumer desire to protect themselves from undesired chemicals.

First, of owater, found that the key to bringing customers to his product is to make the product relevant to them by emphasizing the healthful aspects. “You’ve got to tell a story,” he says. “We’re getting a lot of help from the media, from doctors, from scientists. There’s a trend towards lower sugar, more natural, cleaner foods and cleaner beverages.”

This story has been emerging slowly over the past decade and as a result American tastes appear to be slowly shifting.

Seth Goldman, co-founder and CEO of Honest Teas, realizes that he took a risk leaping out ahead of this trend when he started the company in 1998. “Ten years ago we were way ahead of our time,” he says. “At 17 calories, we got a lot of blank looks. We decided, instead of sweetening our products, let’s hope that people catch up to us with their preferences.”

Now with Coke invested and helping with distribution, we will soon find out how much more ‘less’ Americans want in their beverages. •

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TRADESHOW PREVIEW

NACS TRADE SHOW · LAS VEGAS, NV

LAS VEGAS CONVENTION CENTER: October 20-23, 2009 SHOW FLOOR HOURS: Wednesday and Thursday: 12:00 p.m. – 4:30 p.m.

This year’s NACS Show will be held on October 20-23 at the Las Vegas Convention Center in Las Vegas, Nev. The annual event, presented by the trade association for petroleum and convenience retailing, expects more than21,000 attendees, has scheduled a keynote address scheduled with former President Bill Clinton, and will present hundreds of beverage samples available in the aisles. It is one of the country’s most important

events in terms of establishing relationships between retailers and their beverage suppliers.

Included below is a list of beverage-centric workshops from the event’s educational offerings. And for hand-to-hand education, nothing beats the show floor; we’ve supplied a list of booth numbers for beverage companies that will be in attendance.

EXHIBITORS AND BOOTH NUMBER (as of July 27, 2009) 5-hour Energy

4138

Goya Foods Inc.

829

On Go Energy

4538

Abbott Nutrition

1935

Hangover Buster

6422

PepsiCo, Inc.

1429

Adina For Life

2134

Heineken USA, Inc.

519

POM Wonderful, LLC

1030

Advanced H2O, LLC

237

High Voltage Beverages LLC

1134

PurBlu Beverages, Inc.

6533

Anheuser-Busch, Inc.

1813

Impulse One. LLC

3115

Redline Energy/VPX Sports

3215

Arizona Beverages

319

In Zone Brands, Inc.

537

Rockstar, Inc.

813

BDI Marketing

1818

Integrated Beverage Group, Ltd

4729

Skinny Nutritional Corp.

2915

Bing Energy Drink

128

Interex Corp.

1123

Smart Beverage Inc.

4632

BSN

6821

Jana North America, Inc.

4536

Soma Beverage Company

6321

Bug Juice Brands

4339

Jarritos/Novamex

5011

SPI West Port, Inc.

6536

BYB Brands, Inc.

3122

Johanna Beverage Company

3228

Sunny Delight Beverages

6429

Calypso Lemonades

3021

Jones Soda Co.

531

The FRS Company

2129

Campbell Soup

2605

Labrada Nutrition

329

The Pop Shoppe

122

Cliffstar Corporation

3135

LeVecke Corp

223

Tradewinds Beverage Company

2116

The Coca-Cola Company

2629

Lifeway Foods, Inc.

1037

Verve - Vemma

630

Crayons, Inc.

629

Liquid Nitro Beverages Inc.

1139

Vita Coco

5016

Cytosport

837

Meridian Food & Beverage Co., Inc

4711

Vitila Brands LLC

4529

DD Beverage/Beaver Buzz

2037

MET-Rx

2229

Wet Planet Beverages

129

DMD Pharmaceuticals

1220

Mike’s Hard Lemonade

2705

WhiteWave Foods / Dean Foods

1943

Dr Pepper Snapple Group

4717

MillerCoors

2317

Wyeth Consumer Healthcare

337

DS Waters, Inc.

1214

Monster Beverage Company

2905

Xing Beverage, LLC

3017

Dynapep

5713

N.V.E. Pharmaceuticals

1020

Xyience

4419

E & J Gallo Wine Co.

2237

NERD Beverage Corp.

5013

Ex Drinks

2139

Nestle USA

1213

Florida’s Natural Growers

4111

Nestle Waters North America, Inc.

4219

Function Drinks

1129

New Leaf Brands

2137

Funktional Beverages, Inc.

435

Niagara Bottling, LLC

6829

Fusion Premium Energy

3131

Nitro 2 Go Inc.

6622

General Mills, Inc.

716

Nor-Cal Beverage Co., Inc.

229

Glaceau

2629

North American Breweries

121

Go Fast Sports & Beverage Co.

3235

OhYeah!

419

Good Karma Beverage, Inc.

322

Ol’ Glory

628

BEVNET SHOW COVERAGE SPONSORED BY:

Please note these listings are courtesy of NACS; final updates are available at www.NACSOnline.com 68.BEVERAGESPECTRUM.SEPTEMBER.09

NACS TRADE SHOW · LAS VEGAS, NV

TRADESHOW PREVIEW SCHEDULE OF EVENTS TUESDAY 10.20.09

7:30 AM – 6:00 PM Cool New Products Preview Room (Retailers Only) 7:30 AM – 6:00 PM Registration 8:00 AM – 1:00 PM International Forum (Separate Registration Fee) 8:00 AM – 4:00 PM NACS Center 12:00 PM – 5:30 PM NACSPAC Lounge 12:00 PM – 6:00 PM International Lounge 1:00 PM – 3:00 PM Global Government Affairs Council Annual Meeting

5:15 PM – 6:00 PM New Member Welcome Reception

9:15 AM – 10:15 AM Workshops

6:00 PM – 7:30 PM Welcome Reception

10:30 AM – 11:45 AM Opening General Session

6:45 PM – 10:00 PM Board of Directors Dinner

12:00 PM – 1:00 PM New Member Buddy Lunch

WEDNESDAY 10.21.09 7:30 AM – 12:00 PM Cool New Products Preview Room (Retailers Only) 7:30 AM – 9:00 AM Interfaith Prayer Breakfast 7:30 AM – 5:30 PM Registration 7:30 AM – 6:00 PM NACSPAC Lounge

2:00 PM – 5:00 PM Workshops

7:30 AM – 6:30 PM International Lounge

3:15 PM – 5:00 PM NACS Board of Directors/Retail Member Meeting

8:00 AM – 5:30 PM NACS Center 8:00 AM – 9:00 AM Workshops

7:30 AM – 6:00 PM Cool New Products Preview Room (Open to all attendees) 7:30 AM – 6:00 PM NACSPAC Lounge 7:30 AM – 6:30 PM International Lounge

12:00 PM – 1:30 PM Board Alumni Lunch

8:00 AM – 9:00 AM Workshops

12:00 PM – 5:30 PM EXPO

8:00 AM – 5:30 PM NACS Center

12:00 PM – 6:00 PM Cool New Products Preview Room (Open to all attendees)

8:30 AM – 10:30 AM Exhibitor Advisory Committee Meeting

5:00 PM – 6:00 PM NACS Leadership Programs Alumni Reception 7:15 PM – 10:00 PM Past Presidents’ Party THURSDAY 10.22.09 7:30 AM – 5:30 PM Registration

9:00 AM – 9:30 AM Break (walk to Hilton, get refreshments, etc.)

9:30 AM – 10:45 AM General Session 11:00 AM – 11:45 AM Ideas 2 Go General Session 12:00 PM – 1:00 PM Study Group Luncheon

12:00 PM – 5:30 PM EXPO FRIDAY 10.23.09 7:30 AM – 3:00 PM Cool New Products Preview Room (Open to all attendees) 7:30 AM – 3:00 PM NACSPAC Lounge 7:30 AM – 3:00 PM International Lounge 7:30 AM – 3:00 PM Registration 8:00 AM – 9:00 AM Workshops 8:00 AM – 3:00 PM NACS Center 9:00 AM – 10:00 AM General Session 10:00 AM – 3:00 PM EXPO 6:00 PM – 10:00 PM NACS Show Closing Party & NACSPAC Live Auction

BEVERAGE-RELATED WORKSHOPS TUESDAY 10.20.09

2:00 PM – 3:15 PM The New Product Pipeline: Differentiation or Duplication 2:00 PM – 3:15 PM Convenience Retail – Key Future Trends For Suppliers 3:15 PM – 5:00 PM A 24-Hour Buzz: Effective Beverage Marketing 3:45 PM – 5:00 PM How Many Is Too Many? Making Your Product Selection Work for You

WEDNESDAY 10.21.09 8:00 AM – 9:00 AM It’s Not What They Say, But What They Do: Shopper Behavior in Challenging Times 8:00 AM – 9:00 AM The Changing Economy: A Supplier’s Guide to Survival in the C-Store Industry

9:15 AM – 10:15 AM Please, Come In! Finding and Getting the Attention of New Customers 9:15 AM – 10:15 AM Selling to Small Operators: Why The Silent Treatment Isn’t Helping You

9:15 AM – 10:15 AM Inside Washington: Congressional Agenda for Foodservice Regulations

THURSDAY 10.22.09 8:00 AM – 9:00 AM Price Check: How Can You Deliver More Consumer Value During Tough Times?

9:15 AM – 10:15 AM Fast, Forward, Change: Embracing New Ideas in Convenience Retail

8:00 AM – 9:00 AM Weaving In the Web: Using Electronic Media to Connect with Your Customers

Please note these listings are courtesy of NACS; final updates are available at www.NACSOnline.com 70.BEVERAGESPECTRUM.SEPTEMBER.09

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PROMO PARADE

PROMOTIONS, EVENTS, AND SPECIALS FOR THE INDUSTRY

(Prank) Calling All Captains Captain Morgan is launching a customizable voicemail tool that will allow consumers to prank call their friends.

Adult consumers 21 and over can visit www.callingallcaptains.com to choose from three possible voicemail scenarios and customize the voicemail with options such as what they were wearing on the night out, which venue they were at and defining characteristics of their friend. Once the “Mad Libs” style form is filled out, consumers can preview their voicemail and send it to their unsuspecting friend. The message will either go directly to voicemail or ring once and go to voicemail, depend-

ing on the recipient’s phone carrier.

This voicemail application is part of the overall marketing support for the “Calling All Captains” campaign, which launched in May. The new campaign includes multiple television spots that will be seen across the cable network spectrum including ESPN, Spike TV, Comedy Central, FX, TBS and Discovery.

Additional marketing support for the “Calling All Captains” campaign includes online and outdoor advertising, on and off-premise activations and key promotions across the country at major events throughout the year.

Radio Malibu Malibu announced its newest global advertising campaign, Radio Maliboom Boom, as part of its ongoing “Get Your Island On” campaign. The Radio Maliboom Boom campaign brings the spirit of Malibu to life with music and DJ personalities spreading their island vibe around the world.

The campaign debuted in the United States on Aug. 3, supported through television and online advertisements in addition to a public relations campaign. The television spots will run nationally.

The online executions will be featured on Evite, Pandora, Hulu and USWeekly, among other Web sites.

The advertising campaign features four thirty second spots, in-

72.BEVERAGESPECTRUM.SEPTEMBER.09

cluding “Maliboom Boom,” “Sunshine,” “Shake it” and “Social Responsibility.” The spots also invite consumers to continue the party by tuning in to Radio Maliboom Boom at http://radiomaliboomboom.com.

The campaign also includes an online radio station with 24/7 upbeat music and humorous conversations between DJ Bernhard and MC Wonder Full. Consumers will have access to a streaming music player featuring top Universal music artists, videos featuring the DJs and downloads of e-cards, ringtones and other digital applications. The site will be continually refreshed with new content.

PROMO PARADE

PROMOTIONS, EVENTS, AND SPECIALS FOR THE INDUSTRY Interesting Man, Interesting Tricks

Keep on Walking

Dos Equis, playing off it’s Most Interesting Man campaign, announced the brand’s Most Interesting Tricks Halloween program.

Beginning Oct. 1, consumers will have the opportunity to cash in on special offers from Dos Equis at liquor, grocery or cstores. Most Interesting Tricks displays and display enhancers including a Dos Equis branded steamer trunk, framed portraits of the Most Interesting Man and Dos Equis Most Sacred Magician Tricks along with pole toppers, price cards, basewrap and cooler decals.

Johnnie Walker Black Label is celebrating its 100th anniversary in 2009 with its 100 Years of Progress campaign. The program tells the story of Black Label’s achievements in quality, innovation and authenticity over the past century.

The campaign includes 100 anniversary events and in-store promotions held across the country over 100 days in 2009. The program kicked off on Aug. 9 to honor the date on which the the British Royal Commission on Whisky and Other Potable Spirits officially declared that blends could carry the distinction of Scotch whisky.

Anchoring the 100 Years of Progress program is the Johnnie Walker Black Label Limited Edition Centenary Pack. Delivered in a sleek, masculine, black glass bottle embellished with real gold, the limited edition pack includes a historic timeline of the brand.

The story of 100 years of Johnnie Walker Black Label will be activated through advertising and public relations and online at www.johnniewalker.com. In addition to the Limited Edition Centenary Pack, video displays and other visual elements have been created for various store formats. Consumers are also invited to join in the anniversary celebration at home with a mail-in offering of etched anniversary ‘Striding Man’ glassware.

CORZO Personalizes the Holidays This holiday season, CORZO Tequila is offering complimentary personalized labels for their bottles. Made of pure metal, the labels can accommodate a message of up to 3 lines of text with 18 characters per line. The labels are complimentary and can be ordered exclusively at www.corzo.com/ labels/. Once ordered, the custom label is delivered in approximately 4-6 days. Next day orders can be placed via telephone by calling the CORZO Label Program directly at (972) 422-9420 M-F, 9am – 5pm CT. Express shipping charges will apply.

Pepsi and CBS in Video – in Print CBS and PepsiCo last month rolled out the firstever use of video in a print advertisement. The VIP (Video-in-Print) technology was packaged in a print ad spread in the Fall TV preview issue of Entertainment Weekly, as the centerpiece of a partnership between CBS and PepsiCo designed to launch the Network’s Monday night comedy lineup and new dramas – and to promote Pepsi Max. The ad allowed readers to watch video content straight from the printed page via a paperthin interactive video player – featuring five channels of CBS and Pepsi Max content.

74.BEVERAGESPECTRUM.SEPTEMBER.09