Beverage Spectrum April-May 2011

M a y 3 0 , 2 0 1 1

PAGE 36

PAGE 22

PAGE 46

Wolfgang Puck and IllyWoWoW lfgang Puck

APRIL-MAY 2011vol. 9 :: no. 3

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

Columns

4 FIRST DROP

Beverages: A social life

6 PUBLISHERS TOAST

Barry becomes a functional

test subject.

28 GERRY’S INSIGHTS

The creative gene

34 THE ENTREPRENEUR’S EYE

What I’ve learned so far.

Departments

8 BEVSCAPE BUSINESS

O.N.E. preps for Pepsi launch

10 BEVSCAPE INNOVATION

Extreme, edgy fl avors

14 CHANNEL CHECK

Measuring powders

18 NEW PRODUCTS

AriZona gets into coconut waters

22 BREWBOUND

Our craft beer section gets canned

30 COOLER CHECK-IN

Kona Red, Bai, and the brave new

world of coffee fruit

50 PROMO PARADE

Jones and Cheerwine raise their profi les

Features

36 KIDS BEVERAGES

In Zone gets back in the zone.

42 COVER S TORY: COFFEE CONTENDERSWolfgang Puck and Coca-Cola take

aim again.

46 POWDERS

The dry deluge

46

42

36

30PHO

TO B

Y: S

TAN

ISLA

W S

ZYD

LO

Beverage DevelopmentIngredient Supply

ShotsEnergy Drinks

Enhanced Waters and MoreProprietary FlavorsPremixes and Bases

U.S. Distributor U.S. Distributor

4 BEVERAGESPECTRUM.APRIL-MAY.2011

THE FIRST DROP By Brent Sonnek-SchmelzBy Jeffrey Klineman

TALES FROM THE FRIEND FRONT

BETWEEN THE KIDS, THE apparent dearth of babysitters in the Northeast, and the overwhelming cattle drive that is the BevNET empire, it’s rare that I have anything resembling a social life. Nevertheless, I’ve recently had a few social encounters with people known as “friends and family” and they have been informative. First, I’ve come to realize that, yes, I am as interpersonally awk-ward as I think I am. Second, speaking with them about drinks has led me to once again understand that I spend a lot of time with my head exploring the edge of an industry that can take a lot of time to spread into the mainstream.

Taken alone, these visits are basically anecdotes (well, they are more than that as they are encounters with other human beings that occur somewhere that is not a trade show floor). But looked at together as a series of events over a roughly month-long period, they appear to offer clues to where things may be going with regard to, yes, the entrepreneurial beverage business.

Example one: a dude from San Fran-cisco arrives with wife and child in tow for a barbecue. When he asks me what the hottest drink is on the market right now (I get this question a lot), I give my standard response: cheap vodka.

When pressed, I say that coconut water is growing quickly as a category.

“You’re the third person who has men-tioned coconut water to me since I got to the East Coast,” he says.

Example two: for another barbecue, a friend arrives with two 4-packs of Izze. It’s new to her, and she loves it. We have nine other sparkling juices in the down-stairs fridge, but the Izze does seem to hold its ground.

Example three: at a California wedding studded with Hollywood folks (I would name-drop, but your lack of jealousy would be disheartening) there’s a toast in which a bridesmaid to the super-macrobi-otic bride talks about her friends head-ing out for “cold frosty beverages.” By

that, they mean ‘Kombucha.’ Most of the groom’s family, which is from Chicago, believes that Kombucha is a fashionable Los Angeles bar. Still, they are enjoying the Fat Tires a great deal.

Example four: out for pizza with a friend, we both wait for a fresh keg of microbrew to go on tap before we order another round. I’d blame him for the beer snobbery, but I was the one who suggested we wait.

Example five: over brunch, I search the house – in vain – for orange juice, only to come across a daily nutritional shot made with mango and caja fruit. It goes great with champagne, creating the world’s most antioxidant-rich mimosa.

Example six: my sister still pronounces it with the hard “c” – “akai.”

Example seven: traipsing around Dis-

neyland, I am thrilled to discover that I could buy a Monster energy drink in the Magic Kingdom. I would do so, except I’m already holding three 5-Hour Energy bottles that I got – for free – on the flight over. Also, I notice that entire families are wearing Monster-themed outfits.

What all of these little anecdotes mean, I think, is that there are plenty of niches being dug across the country for evolving categories, but they are still shallow, they aren’t trenches. There’s plenty of room to make your mark, and there is an audi-ence waiting for your drink, even if they can’t pronounce it. Also, most of my en-counters with other people seem to center around the home, and eating. To which I add, stop over anytime. Like I said, not much of a social life.

ACTIVATE: A TURN FOR THE BETTER

PROPRIETARY CAP A unique delivery system for a fresh dose of vitamins

SWEETENED WITH STEVIAA zero-calorie, all-naturalplant-derived sweetener

PACKED WITH VITAMINS AND ELECTROLYTES

NATURALLY SWEETENED WITH STEVIA

0 SUGAR, 0 CALORIES PER BOTTLE

NO PRESERVATIVES

5 BENEFITS, 10 VARIETIES

A FRESH TWIST ON VITAMINS

© 2011 ACTIVATE DRINKS Contact: Joseph McCoy, Director of Sales 310.849.3924 joe@activatedrinks. com activatedrinks.com

050311_Activate_BevSpec_Ad.indd 1 5/4/11 12:50 PM

ACTIVATE: A TURN FOR THE BETTER

PROPRIETARY CAP A unique delivery system for a fresh dose of vitamins

SWEETENED WITH STEVIAA zero-calorie, all-naturalplant-derived sweetener

PACKED WITH VITAMINS AND ELECTROLYTES

NATURALLY SWEETENED WITH STEVIA

0 SUGAR, 0 CALORIES PER BOTTLE

NO PRESERVATIVES

5 BENEFITS, 10 VARIETIES

A FRESH TWIST ON VITAMINS

© 2011 ACTIVATE DRINKS Contact: Joseph McCoy, Director of Sales 310.849.3924 joe@activatedrinks. com activatedrinks.com

050311_Activate_BevSpec_Ad.indd 1 5/4/11 12:50 PM


PUBLISHER’S TOAST By Barry J. Nathanson

BPA Worldwide Member, June 2007

Barry J. Nathanson [email protected]

Jeffrey Klineman [email protected]

Ray Latif ASSISTANT [email protected]

SALESJohn McKenna ASSOCIATE [email protected]

Adam Stern ASSOCIATE [email protected]

Jeff Hyde ACCOUNT [email protected]

ART & PRODUCTIONMatthew Kennedy CREATIVE DIRECTOR

Natalie Iknaian GRAPHIC DESIGNER

BEVERAGE SPECTRUM PUBLISHING, INC.John F. (Jack) Craven [email protected]

John Craven PRESIDENT & EDITORIAL [email protected]

ARTICLE REPRINTSFosteReprints (500 COPIES OR MORE)ph. 800-382-0808 x142

HEADQUARTERS44 Pleasant St., Suite 110Watertown, MA 02472ph. 617-715-9670 f. 617-715-9671

PUBLISHER’S OFFICE1123 Broadway, Suite 210New York, NY 10010ph. 212-647-0501 f. 212-647-0565

SUBSCRIPTIONSFor fastest service, please visit:www.bevspectrum/[email protected]

www.bevspectrum.com

DO YOUR PART:PLEASE RECYCLE THIS MAGAZINE

FUNCTION, EFFICACY AND FORMATIT’S BEEN QUITE AN ACTIVE spring. Over the course of the last few weeks, I’ve had many old and new friends drop in to introduce their latest products for the marketplace. I’ve also had dozens of hour-long phone conversations from new and potential beverage marketers. They seek my counsel, support, and well-known cheerlead-ing capabilities to advise them on the viability of their brand concepts and executions. I love that part of my job. The activity and excitement levels also provide a great baro-metric reading of the state of the industry. If these few months are any indication, the industry is headed in the right direction and in-novation is still in vogue.

I’ve been introduced to soy, fi ber, super berries, coconuts, energy, relax-ation and sleep brands. I’ve seen packaging formats designed to give you the freshest of vita-mins. I’ve sampled heart, joint, brain, skin and hair products. I’ve even been given cures for hangovers that I don’t get. Some of the beverages plan to bulk me up and others to slim me down. Function reigns in the majority of these brands, but there’s still a slew of old-fashioned teas, juices and lemonades coming out that have one function: to taste great. These new brands run across all categories. Everyone has a dream, a formula and a packaging concept to become the next great thing. After all

these samplings, I considered donating my body to science to test the long-term physical ramifi cations of over-exposure to so many exotic beverages.

What all these new entrepre-neurs have in common is the need to fully understand how to execute their ideas. My col-leagues at BevNET and I have

long given advice or steered them where to go. We talk func-tion, effi cacy and format every day, online and in our pages, so it was a logical extension to create our BevNET Live conferences. The educational and informational process we deliver continues unabated.

It is imperative that this creativity is encouraged and promoted. Each part of the process has taken a quan-tum leap forward. Flavor houses and product formu-lators are now so cutting-edge they enable marketers to actualize their concepts. State-of-the-art co-pack-ing facilities help to reduce costs while enhancing safety and purity in the product line. Packaging design and execution has never been better. Now, it is the mission of retail-ers and distributors and wholesalers to take risks in adding truly innova-tive brands to their mix.

If everyone steps up to the plate and works in harmony,

beverages will be in a great place. We’ll do our part via the website, magazine and conference to keep the industry on top of the issues and trends. Do your part to execute the vision.

BB BEVSCAPE BUSINESS •


The latest news on the brands you sell.

The Latest on Alcopops

Competition is continuing to heat up in the coconut water category as national authorizations are starting to pile up. Take O.N.E., which has remained fairly quiet in the four months fol-lowing the company’s December takeout by PepsiCo and Catter-ton, which left PepsiCo the largest shareholder and founders Ro-drigo Veloso and Emilie Fritz Veloso as a minority.

Well, it turns out that the quiet came before the storm – starting in June, O.N.E. is preparing to roll out the brand fully into the Pepsi system.

The move means O.N.E. will be leaving behind all independent DSD and broker operations except for Manhattan Beer in New York City and UNFI for the natural channel, where the O.N.E. sales and marketing team will still have control.

By the end of July, Veloso said, O.N.E. is expected to be avail-able via PepsiCo in about two-thirds of the country, with a con-centration at the Coasts and in the Midwest. Supplied by three new factories, one in Indonesia and two in the Philippines, he said, the product will be all organic – a key point of difference particularly for the Whole Foods Channel. The move comes at the same time that one competitor, Vita Coco, has confirmed it is making larger moves into Dr Pepper/Snapple distribution houses (to the point where it, too, dropped all key New York distribu-tors but longtime partner Exclusive in Manhattan) in several re-gions, including the Chicago area. Meanwhile, ZICO is getting national authorizations like Target and CVS, and has shifted to Odwalla and Coke trucks in a few areas, but has yet to move fully into the network of minority owner Coca-Cola.

O.N.E.’s move will put nearly all of its current coconut water SKUs into the Pepsi system, including side brands O.N.E. Active

Could it be time to stop being so cynical about Four Loko?

Well, sure, but even if we did, no one else would. Still, you’ve got to give them credit for trying: the makers of the controversial beverage, Phusion Projects, LLC, have launched a goodwill campaign, saying they are committed to responsible drinking as well as community involvement and sus-tainability projects. How can one be so sure? Well, they have got a web site.

The recently launched PhusionCares.com notes that the company is “making a posi-tive difference in the communities where [its] employees live and work” by donating time and percentage of their profits to chari-ties and foundations around the country. The site also contains a new video showing how large amounts of the first version of Four Loko – forced off the shelves by the

and O.N.E. Kids – but is putting a hold on three of its other func-tional products, one based on cashews, one with acai and a coffee-berry drink as well. Veloso said they aren’t dead, merely “on hold.”

“We want the team focused on the coconut water expansion,” Veloso said. That team has grown and is still growing – O.N.E. recently added a new VP of Marketing, Chris Cook, a former Bol-thouse Farms marketer.

FDA – were recycled to produce ethanol. Meanwhile, as the new version eases back

into the market, it’s going to have some com-petition. Pabst has introduced – in conjunc-tion with rapper Snoop Dogg, natch! – Blast by Colt .45, which has a similar alcohol pro-file to the now-decaffeinated Four Loko.

It’s not arriving without the howling mobs, however – the attorneys general of 18 states asking the company to end pro-duction of the malt beverage.

Claiming that the 12 percent ABV prod-uct “only serves to glamorize alcohol abuse and promote binge drinking,” Illinois AG Lisa Madigan also noted that “the pro-motion and marketing of Blast appeals to minors, with its brightly colored cans and fruit flavors.” Madigan is also quite displeased about rapper Snoop Dogg’s in-volvement with Blast as its spokesperson.

O.N.E. Prepping for Big Pepsi System Launch

One reason Madigan feels that it’s inap-propriate is the growing popularity of a You-Tube video featuring Snoop Dogg drinking Blast while dancing with scantily clad mod-els. Recall that YouTube helped to sink the Four Loko brand the first time around.

At least there’s no whipped cream in-volved – yet. Unlike its counterparts, CREAM, a 30-proof alcohol infused whipped cream, has stayed under the ra-dar of the country’s top cops. Aside from Michigan in November 2010, no other states have banned CREAM, perhaps due to the fact its packaging and ingredi-ents share few if any similarities to other so-called “alcopops.” Nevertheless, it is a product that has garnered quite a bit of buzz – if only among folks looking for their next great story about the most popular new KIND of buzz.

Following the PepsiCo takeout of O.N.E. in December, O.N.E. founder Rodrigo Veloso expects the product will be available in two-thirds of the country by the end of July.

BI BEVSCAPE INNOVATION•


Product development & marketing news

Extreme and Edge Flavors

Coke is Reliably Relevant

A recent report on food and beverage trends found that as Americans have grown more sophisticated in their eating habits, culinary innovators have sought to utilize increasingly intense flavors to satisfy consumer palates.

Titled “Extreme and Edgy Flavors,” the report was published by Packaged Facts and the Center for Culinary Development and lists several emerging food ingredients – including chili pepper, wasabi and bitter-ing agents – that have been at the forefront of both cutting edge restaurant menus and uniquely crafted packaged goods.

With regard to beverages, a number of innovative companies have infused distinc-tive ingredients into drinks with more com-mon and traditional fl avorings. One such company is Taylor’s Tonics, which has found success via the infusion of chai and mate into their colas and low calorie sodas.

So if fi ve beverage companies were to disappear from the face of the earth tomorrow (the horror!) which one would consum-ers miss the most? Turns out to be Coca-Cola, according to a new survey by the strategic communication company, Brodeur Partners.

The survey, which measured such characteristics as a company’s ability to meet customers’ needs and relate to their values, revealed interesting attributes about consumers’ relationships with each

corporation. The study tested “relevance” as how a well company refl ects what consumers value in organizations and businesses.

Starbucks, for example, has recently passed PepsiCo when it comes to consumer interest. Meanwhile, fans of Red Bull fi nd the brand extremely interesting – much more so than any of the other measures. For Brodeur, that might indicate that Red Bull fans tend

to be very loyal to the brand – or at least that it’s found the right way of relating to them.

Out of the fi ve beverage companies: Coke, Starbucks, Red Bull, Budweiser and Pepsi, Brodeur Partners said consumers indicated they would most like to do business with and associate themselves with Coke. They would also miss Coke the most if it were to go out of business, and most closely associated Coke with their values.

While Starbucks ran a relatively close second to Coke in all those categories, consumers in Brodeur’s survey found it some-what more interesting than Coke as a brand. While brand rel-evance did not refl ect the size of a company, the study noted that it did correlate to the speed of a company’s growth. If the Brodeur Partners are right, it seems Starbucks is shooting for the stars.

Others have evolved the entire premise of their business around a particular food or extract. Prometheus Springs sells a line of beverages which uses as its primary fl avor, capsaicin, an extract derived from chili pep-pers. The company paired the ingredient with other intense fl avorings to develop their Lemon Ginger and Lychee Wasabi drinks.

However, the desire to challenge con-sumer palates is most clearly seen in the craft beer industry. Breweries have con-tinuously pushed the envelope with the use of bold and bitter hops into various styles of beer. Take for example, Green Flash Brewing Company’s “West Coast IPA”, a beer that, according to the In-ternational Bitterness Units scale (which has a technical limit of 100), measures at an eye-popping 95 IBUs, where in com-parison, the average beer on the market comes in at around 29 IBUs.


Green Tea

Black Tea

Oolong Tea

Rooibos

Organic

Fair Trade

Tea Flavors

Think of us as

Tel: 718-788-1776 • [email protected] • www.virginiadare.com

Virginia Dare provides a full range of the highest qualityand best tasting tea concentrates, flavors and powders.

Tea Vanilla Flavors Masking

DareTeaAd_BevSpecV7.qxd:DareTeaAd_BevSpec 9/20/10 10:47 AM Page 1

BI BEVSCAPE INNOVATION•



Purple Stuff Thrives on Strenth of Facebook “Fans”

when it comes to most products, developing a loyal consumer base can take years of carefully coordinated marketing plans and well-funded advertising budgets. Yet in a world dominated by the growth of social media and, in particular, Facebook, the makers of the relaxation beverage Pur-ple Stuff have embraced the digital medium as a means of advertising and communica-tion and, in just over a year, have cultivat-ed a following of 150,000 “fans.”

Entrepreneurial beverage companies also look to it as a way to reach their con-sumers where they are – a result of the gen-erational shift to social media.

“Facebook was and remains cost effective in comparison to traditional media,” said Tim Lucas, the Chief Marketing Offi cer of Funktional Beverages, Inc. “Our key con-sumers spend 78 percent of their time online versus watching television with the majority of that time spent on social media sites with Facebook being the dominate social site.”

In a recent promotional article discuss-ing the benefi ts of marketing on the site, Facebook touted Purple Stuff as an exam-ple of how participating in the Facebook Ads program could quickly raise awareness and exposure for a product. From March 2010, when Purple Stuff fi rst began plac-ing ads on Facebook, to April 2011, Purple Stuff had gained more than 145,000 fans.

Sometimes, Facebook serves as a way to reach consumers in a different way – by of-fering an incentive to connect with other people or organizations via the brand, in-stead of just a consumer-to-brand connec-tion. R.W. Knudsen recently launched a charitable campaign on Facebook to spread awareness of Operation Gratitude, a non-profi t association that supports active mili-tary personnel. The company has initially donated 100,000 sticks of its Recharge Nat-ural Sports Drink Mix to the group and has pledged to donate an additional 100,000, though only if the Recharge Facebook page

receives 15,000 new “likes” by May 31.However, Lucas noted that while Face-

book ads have created a great deal of inter-est in Purple Stuff, it is the ability to interact and socialize with consumers that is most effective in generating long term sales.

“The ads [initially] allow consumers to engage us with curiosity about the product,” Lucas said. “We answer their questions and inform them about where they can purchase our brand. [Many] act upon this information, buy the product, become fans, and eventu-ally, regular consumers of Purple Stuff.”

Lucas also believes Purple Stuff’s ad-vertising campaign on Facebook had a direct correlation to the dramatic growth in distribution of the beverage. He claimed that it was in large part due to fans who, by continuously pushing local retailers to stock the product, caused Purple Stuff from being sold in only a handful of stores in Texas to more than 5,000 locations throughout the Southwest.


C

M

Y

CM

MY

CY

CMY

K

VBlast_Bev_Print_Version.pdf 1 5/9/11 12:03 PM

CC CHANNEL CHECK •


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

SPOTLIGHT CATEGORY

ENERGY POwDER &SPORTS POwDER

52 Weeks through 2/20/2011

TOPLINE CATEGORY

VOLUME

BEER $21,934,828,000

BOTTLED JUICES $5,173,796,000

BOTTLED WATER $7,788,556,000

ENERGY DRINKS $7,034,446,000

SPORTS DRINKS $3,945,651,000

TEA/COFFEE $3,067,804,000

52 Weeks through 4/17/2011

14.04%

9.98%

2.68%

15.77%

1.17%

0.09%

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

we would venture to say that there are many, many channels unrepresent-ed when looking at these numbers, es-pecially given the availability of these powders in accounts like airports, amazon, Wal-Mart, and every up-and-down-the-street account with a cash register. That noted, we’d also say that it appears that large brands with strong distribution channels are able to reap solid incremental gains through pow-ders at checkout, in hanging packages, or in center-store situations. Regardless, it’s top-heavy with Crystal Light and Gatorade in represented channels; it’s likely that supplement numbers would also have a strong powder presence. There’s plenty of room, in other words, for entrepreneurial brands to grow here.

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

Brand Dollar Sales Change vs. year earlier

Crystal Light Energy $13,946,100 28.93%

Private Label $2,345,077 -13.39%

4C Totally Light 2GO $883,531 43.20%

Emergen-C $595,995 93.12%

Zipfizz $538,155 -39.92%

Intense NRG $146,036 462.20%

4C Totally Light 2GO $140,949 -65.25%

Zizzazz $124,394 -78.17%

Power Edge On The Go $114,048 18.79%

Powerade $95,633 -74.99%

Power Edge $82,353 3.03%

Crystal Light $65,746 -97.01%

Wylers Light $56,101 -64.24%

Xtreme Peptime $52,431 -60.58%

PHD 2Go $1,584 N/A

Crystal Light $1,209 255.79%

Twinlab Ultra Fuel $1,134 -48.25%

Crystal Light $438 -94.41%

Super-C $85 -10.90%

ENERGY DRINK MIX

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


Propel $23,849,030 -19.07%

Gatorade $19,033,850 -17.07%

G2 Perform $6,371,309 1,717.91%

Gatorade Perform $4,911,878 17,537,432.92%

Propel Calcium $4,308,604 130.88%

Gatorade Frost $2,863,270 15.65%

Propel Zero $688,553 N/A

Powerade ION4 $562,813 N/A

Gatorade G2 Perform $482,503 111,463.11%

G2 Sticks $389,826 -93.08%

Private Label $310,758 79.47%

Powerade $100,334 -74.26%

Tang Sport $68,551 -52.96%

Replenish $56,169 -27.38%

Pure Sport $19,400 -14.10%

G2 $16,955 N/A

Gleukos $16,781 -30.46%

Gatorade Fierce $12,052 -41.83%

Power Bar $4,204 -97.85%

SPORTS DRINK MIX

Toll Free 866.907.0400 • www.cheminutra.com © 2011 Chemi Nutra

Scan this code with a QR-Code reader with your smart phone to visit

our mobile optimized website.

Let’s face it.

The consumer is bombarded

with way too many beverages

and shots. Fact is, they are basically

the same kind of spin on energy drinks.

Isn’t it time for a change?

AlphaSize® A-GPC is widely used in dietary

supplements. And look around. Use in functional

beverages and shots is exploding. Why? Because

AlphaSize® A-GPC is a natural, safe, GRAS ingredient

that is science-proven.

TASTELESS, WATER SOLUBLE AND STABLE: Excellent performance in all liquid applications.

BOOST MENTAL ENERGY, CONCENTRATION AND FOCUS: The brain is the true gatekeeper of the body’s energy.

IMPROVES NEUROLOGICAL FUNCTION: Shown to speed reaction time and agility.

®

Energy this.Energy that.

MEN

TAL E

NERG

Y IS

KEY TO

TRU

E H

UM

AN

PERFO

RM

AN

CE.

To learn more about AlphaSize®

A-GPC and how to add it to your

truly functional beverages and

shots, contact Chemi Nutra – world

leader in specialty nutraceuticals

for healthy natural products.

Bev.Spectrum_8x10.875.ai 1 3/21/11 9:59 AM



Hawaiian Punch $182,999,900 2.44%

V8 Splash $114,220,200 10.32%

Tampico $91,419,520 -9.62%

Bug Juice $80,504,840 -17.15%

Snapple $63,824,530 -0.83%

Fuze Slenderize $63,131,570 -9.46%

Private Label $62,222,160 -6.57%

Lipton Brisk $55,289,340 1,121.41%

Kool Aid Bursts $54,464,630 7.61%

Fuze Refresh $52,037,260 -9.00%


Red Bull $2,316,033,000 14.38%

Monster Energy $1,194,538,000 22.21%

Rockstar $436,967,600 13.46%

NOS $219,311,400 13.24%

Doubleshot $187,623,100 22.30%

Monter Mega Energy $178,780,900 75.35%

Java Monster $172,586,200 0.42%

AMP $139,448,900 -3.36%

Full Throttle $105,293,700 -10.10%

Monster Energy XXL $88,759,110 -30.97%


Bud Light $5,297,338,000 1.22%

Budweiser $2,092,578,000 -4.70%

Coors Light $1,900,857,000 2.85%

Miller Lite $1,686,488,000 -0.42%

Natural Light $1,111,715,000 -1.44%

Busch Light $736,623,000 1.16%

Busch $676,917,900 -1.92%

Miller High Life $499,985,300 -2.21%

Keystone Light $491,734,500 3.25%

Michelob Ultra Light $474,170,300 1.86%


Corona Extra $916,836,700 -2.03%

Heineken $565,805,100 -3.20%

Modelo Especial $290,282,100 16.48%

Corona Light $166,082,000 -2.68%

Tecate $161,631,100 -10.11%

Labatt Blue $116,634,000 -1.55%

Dos Equis XX $105,678,000 23.13%

Labatt Blue Light $104,744,400 6.97%

Stella Artois $92,977,700 19.51%

Newcastle $79,450,240 2.59%


Private Label $985,831,900 4.99%

Aquafina $711,367,900 -0.82%

Glaceau Vitamin Water $697,586,800 -4.18%

Dasani $625,712,400 -3.41%

Poland Spring $399,332,000 13.41%

Nestle Pure Life $334,503,400 30.16%

Glaceau Smart Water $304,545,200 28.78%

Sobe Life Water $268,145,600 14.74%

Deer Park $237,796,500 3.23%

Arrowhead $200,303,100 -9.36%

SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 4/17/11






CC

FRUIT DRINKS

ENERGY DRINKS BOTTLED wATER

RTD TEA

IMPORT BEER DOMESTIC BEER

HOT! Lipton Brisk

HOT! Monster Mega Energy HOT! Nestle Pure Life

HOT! Gold Peak

HOT! Dos Equis XX

NOT! Tecate

NOT! Arrowhead

NOT! Budweiser

NOT! Monster Energy XXL

NOT! Bug Juice NOT! Lipton

HOT! Keystone Light


AriZona $627,633,600 1.52%

Lipton $283,747,700 -14.49%

Lipton Brisk Tea $281,695,600 53.96%

Snapple $194,428,300 5.24%

Lipton Pureleaf $160,416,300 0.87%

Gold Peak $131,563,700 80.67%

Diet Snapple $130,800,200 14.25%

AriZona Arnold Palmer $110,389,400 62.46%

Nestea $106,461,000 -10.89%

Lipton Diet $58,575,810 -13.36%

template.onepage.indd 1 3/14/11 5:15 PM


NP NEw PRODUCTS • The newest options for cooler and shelf.

RECOVERY BEVERAGES

MERCY, a functional beverage that offers hangover protection, has been introduced to the U.S. market. Mercy is a custom blend of amino acids, antioxidants and is sold in 4-packs of 8.4 oz. cans at a suggested retail price of $11.50. MERCY is currently dis-tributed in bars, nightclubs, restaurants and hotels in the Northeast. For more informa-tion, please call (718) 302-4400.

Point Brands, LLC has launched iX MiXer, the fi rst mixer that helps prevent hangovers while consuming alcohol. The beverage is a naturally fl avored, caffeine-free, lightly sweetened, alcoholic mixer and comes in two fl avors, Berrie iX and Citrus iX. iX Mixer contains 80 calories per 8.4 oz. can and is available in bars and liquor stores in Denver and Boulder, CO at a suggested retail price of $1.99. For more information, please call (720) 833-5918.

ENERGY DRINKS

Hype Energy has launched Hype Energy Or-ganic, a lightly carbonated energy drink made with apple juice, aloe vera, tea and enhanced with guarana extracts. The beverage provides 45 calories per 100 mL can. Hype Energy Organic is USDA and EU Agriculture certifi ed, contains no taurine, no artifi cial coloring or preservatives and is distributed in select retail locations throughout the United States and is sold at a suggested retail price of $1.99. For more information, please visit www.hype.com.

CARBONATED SOFT DRINKS

IZZE Sparkling Juice has introduced IZZE esque Watermelon. The beverage is composed of 25 percent pure fruit juice and sparkling water and contains 50 calories and less than 14 grams of sugar per 12 oz. bottle. IZZE esque is all natural and contains no refi ned sugars, caffeine, preservatives or artifi cial fl avors. It is available nationwide in Whole Foods Market, as well as in select grocery stores, delis, and casual and fi ne restaurants for a suggested retail price of $1.39 to $1.69 per bottle or $4.99 to $5.49 per 4-pack. For more information, please call (612) 215-3436.

HOTLIPS Soda has introduced a new cran-berry fl avor to its line. HOTLIPS Cranberry

is produced with Stevens and Yellow River cranberry varieties, 100 percent Northwest-grown pear juice and sparkling water for a light carbonation and contains no added sugar. The soda is sold at a suggested retail price of $2.25 - $4.75 per 12 oz. bottle and is distributed nationally. For more information, please call (503) 224-2069.

Buffalo Rock has redesigned the label of its Grapico line with a new “retro” look. The packaging redesign applies to all versions of the soft drink, including 2 L bottles, 20 oz. bottles, 12 oz. cans, and 12-pack cartons. The drink is distributed throughout the southeastern United States. For more infor-mation, please call (205) 942-3435.

JUICE

KonaRed has launched KonaRed Hawaiian Superfruit Antioxidant Juice. The beverage is made with coffeefruit extract and 100 percent natural juices including pineapple, apple and raspberry and contains no coffee beans, no preservatives and no added sugar or caffeine. KonaRed is distributed in more than 1,000 stores including Whole Foods, HEB Markets and Bristol Farms in Hawaii, California and Texas. The suggested retail price is $4.99 for the 16 oz. bottle and $2.99 for 3 oz. wellness shots. For more informa-tion, please call (845) 358-3920.

wATER

eauVolution Ltd has launched Luna and Lara Pure Spring Water, Tabby Apple Spring Water and Tara Strawberry Spring Water in the U.S. The beverages are specially formu-lated for children and contain no sugar, no artifi cial fl avors or colors, and no aspartame. Pure Water contains 100% pure artesian spring water and Tara Strawberry and Tabby Apple are fl avored with organic ingredients, and sweetened with Sucralose. Each is sold in an 8 oz. plastic bottle at suggested retail price of $1.29. For more information, please visit www.lunaandlara.com.

ENHANCED wATER

9-12 Corp has introduced Natural Orange and Natural Lemon fl avors to its line El-evate Fiber Water. Elevate Fiber has techni-cally proven ingredients to help improve

APRIL-MAY.2011.BEVERAGESPECTRUM 19

the overall well-being of the digestive system, help reduce the risk of obesity as well as to help reduce cholesterol levels in the blood. Each 16.9 oz. bottle of Elevate Fiber Water is sold at a sug-gested retail price of $1.59 to $1.69 and distributed in the Northeast, New York and New Jersey. For more information, please call (787) 747-6057

COCONUT wATER

AriZona Beverage Company has launched CocoZona, a beverage made of 100 percent pure coconut water that contains no fat, cholesterol, added sug-ars or preservatives. CocoZona contains 70 calories per serving and offers a 24-month shelf life before opening and a 7-10 day shelf life if refrigerated after opening. CocoZona is currently distrib-uted in the New York metro area and will be available nationally throughout the year. The suggested retail price is $1.99 - $2.49 per 14.5 oz. can. For more information, please call (516) 812-0292

TEA

The Republic of Tea has introduced three new fl avors to its Glass Bottled Iced Tea line. Natural Hibiscus Tea is a caffeine-free herbal tea brewed from hibiscus leaves from Nigeria. Sweet Black Tea is a calorie-free iced black tea brewed from premium organic black tea leaves and lightly sweetened with stevia leaves. Sweet Green Tea is a calorie-free iced green tea brewed from premium, organic green tea leaves and lightly sweetened with stevia leaves. The three fl avors contain no artifi cial fl avors, sweeteners or preservatives and are certifi ed gluten free by the Gluten Free Certifi cation Organi-zation and certifi ed kosher by the Ortho-dox Union. Each is sold in a two-serving 16.9 oz. glass bottle for a suggested retail price of $5. For more information, please call (800) 298-4832.

AriZona has launched Arnold Palmer Peach Sweet Tea Half & Half to its Arnold Palmer Half & Half line. The new fl avor combines lemonade and sweet tea with a peach fl avor and is available in 23 oz. aluminum cans and 64 oz. half gal-

lons. The can comes with a suggested retail price of $ .99. The beverage is currently dis-tributed in the Northeast and will continue to rollout nationally throughout 2011. For more information, please call (516) 812-0292.

PepsiCo has launched 100% Natural Lipton Iced Tea. The new line is made with pre-mium tea, real sugar and natural fl avors and contains no artifi cial colors or fl avors. Fla-vors include Green Tea with Citrus, Lemon, Blueberry Pomegranate, and Green Tea with Passionfruit Mango as well as Diet Green Tea with Watermelon and Diet Green Tea with Citrus. The tea is sold is 20 oz. bottles for a suggested retail price of $.99 to $1.59 and is distributed nationally. For more infor-mation, please call (612) 215-3504.

SPIRITS

Metropolis Industries is introducing Black Raspberry and Lemon Drop fl avors to its line ready-to-consume alcohol spiked Party Star Jel Shots. The shots are 12% alcohol by volume and are made of plant-based jels. The line is distributed nationally and sold in a multi-fl avor 10-pack at a suggested retail price of $9.99 and a 20-piece jar for $16.99. For more information, please call (760) 633-4811.

VnC Cocktails has introduced Strawberry Daiquiri and Banana Daiquiri fl avors to their premixed cocktail portfolio. The company will also introduce 200 mL VNC Mini Shaker Cocktails in four fl avors: Mojito, Margarita, Pomegranate Cosmo, and Pacifi c Breeze. VnC Cocktails are made with 100 percent natural fruit juice and no artifi cial preservatives, additives, or colors. The bever-ages contain 150 calories per serving and are 14 percent ABV. The product has a suggested retail price of $13.95 for 1L and $3.45 for 200mL mini shaker cocktails. For more infor-mation, please call (310) 432-0020.

DeKuyper Cordials has launched JDK & Sons O3 Premium Orange Liqueur, a unique blend of sweet Brazilian Pera Orange es-sential oils and fl avors. The liqueur has no artifi cial colors, fl avors or high fructose corn syrup. It is sold in a 750 mL bottle for a sug-gested retail price of $19.99 and is distrib-uted nationally in retail stores and upmarket bars and restaurants. For more information, please call (847) 444-7516. •

NP


Brewbound By Christopher FurnariA BETTER WAY TO EXPERIENCE BEER

CRAFT BREwERS GET CANNED

SHAKING OFF THEIR LOWBROWreputation as only having value as a con-veyance for products like Natural Light, cans have become an increasingly popular packaging format for craft beer.

In fact, larger companies like Sierra Nevada and Magic Hat, both of which recently made announcements about adding canned packages to some of their key brands, are following the example of Colorado-based brewery Oskar Blues, which has become one of the fastest-growing craft producers in the country via canned selections like Dale’s Pale Ale.

That’s not to say that cans are dominant – as of 2010, only 3 percent of total craft beer volume was canned, according to craft beer industry group the Brewers Associa-tion. The top-selling 25 SKUs in craft beer are all bottled as well, according to retailing information service Symphony/IRI Group.

Nevertheless, things have come a long way from when Oskar Blues’ founder Dale Katechis took a chance in 2002 by installing a canning line. In September of 2009, Charlie Papazian, president of the craft beer trade group the Brewers’ Asso-ciation, put the number of craft breweries that can at 52; now, the same group puts the number over 100. Craftcans.com, a website that started up 11 months ago for

Metal Packaging Gains Momentum

the purpose of tracking craft beer in cans puts the number at 117 breweries and 309 craft-brewed canned beers.

While bottles tend to be more frequent-ly associated with high-end products, cans do offer brewers advantages the bottle cannot. They block ultra-violet light, which can ruin a beer. Also, the fi lling and sealing process for cans not only removes more oxygen than for bottles, it also does a better job of keeping it out once sealed, increasing freshness. Canned beers also go more easily to places bottles cannot, such as camping, fi shing and to the beach.

Consumers are responding to the increased sup-ply: 2010 IRI data shows that craft beer in cans is up signifi cantly across all channels. In the food channel alone, 12-packs are up 61 percent, while 6-packs are up over 91 percent.

“It’s really start-ing to turn right now,” said Chad

Melis, the Marketing Director for Oskar Blues. “Now we are able to provide information that shows distributors how we are can provide healthy revenue streams for them.”

For some breweries, those healthy rev-enues will come from marginal increases. Sierra Nevada’s canning line will initially be dedicated to its popular Pale Ale and Torpedo Extra IPA, both of which are top sellers. But smaller startups, like Maine-based Baxter Brewing, will rely on cans exclusively as they try to get their prod-ucts out to consumers – and at the rate canned crafts are growing, their risky deci-sion might be whether or not they should move into bottles.

Cans offer brewers advantages the bottle cannot. They block

ultra-violet light, which can ruin a beer. The fi lling and

sealing process for cans not only removes more oxygen

than for bottles, it also does a better job of keeping it out once

sealed, increasing freshness.

For 17 years, PakTech has served all major brands and processors with the most innovative technology in the marketplace. In fact, it’s our mission to supply clients with tomorrow’s solutions, today. From our premium packaging handle appeal and comfort to our state-of-the-art application machinery, we provide turn-key systems that streamline operations, and create added value. Our green advantage? Low-waste 100% recyclable packaging and clean manufacturing. It’s how we roll.

Perception of value begins with quality. Exceptional quality andgreat brands go hand and hand. PakTech – providing you theultimate packaging solution.

Handle & Applicator Solutions


Brewbound A BETTER WAY TO EXPERIENCE BEER

Deschutes Brewery. As summer approaches, the lighter more sessionable offerings will be-come available. Deschutes Twilight Summer Ale, a pale ale, checks in at 5 percent ABV and just 35 IBU’s. The beer will be distrib-uted in 6-packs, 12-packs and on draft in all markets where Deschutes products are sold. Suggested retail price is $8.99 per 6-pack.

21st Amendment Brewery. San Francisco based 21st Amendment will be packaging its 100 IBU Hop Crisis for the fi rst time in June. The canned 4-pack, part of the insur-rection series (which until now consisted only of Monk’s Blood) will be distributed in all markets where 21st Amendment products are sold. Suggested Retail price ranges from $9.99 – $12.99 depending on region.

New Belgium Brewery. The makers of Fat Tire are rolling out special beer in honor of their 20th anniversary. Super Cru is a double version of the aforementioned amber ale. It includes Asian pear juice and saison yeast. Checking in at 10 percent ABV, this beer will be available in 22 oz. bottles and on draft in all 26 states where New Belgium is sold. Suggested retail price is $7.99.

Dogfi sh Head Craft Brewery continues its col-laboration with Sony Music, this time creating a tribute to Robert Johnson, Hellhound On My Ale. Unlike Johnson, you won’t need to sell your soul to get your hands on this limited edition Double IPA, which is being distributed across 25 states in 750 mL bottles beginning in May. Hellhound will retail for about $12 per bottle, depending on the market.

Brooklyn Brewery. For the fi rst time ever, Brooklyn Brewery is releasing its Summer Ale in both cans and bottles. The cans, which will be available beginning in May, will be distrib-uted in all states Brooklyn beer is sold, except Minnesota. The bottled version is currently available in all markets as well as Canada, Sweden, the UK, Ireland, Israel and Japan. Suggested retail price for a 6-pack of bottles is $8.99, and the 12-pack of cans is $15.99.

Samuel Adams. Last summer, Sam Adams released Latitude 48 IPA and this year the

company will be taking a unique approach to the line. Offering a “deconstructed” 12-pack, Boston Beer will feature fi ve hop varietals in each of the beers. Each 12-pack will feature two of each single-hopped selection as well as the original Latitude 48 beer. Suggested retail price is $13.99.

widmer Brothers Brewery. The Widmer Brothers begin offering their seasonal lineup nationally starting with the Citra Blonde Summer Brew. Originally introduced in the summer of 2010 as Sunburn Summer Ale, Citra Blonde is a crisp 4.3 percent session of-fering that is now distributed in all 48 states Widmer products are sold. The beer will be sold on draft and in 6-packs for a suggested retail price of $8.99.

Narragansett Beer. For the fi rst time in its 120-year history, Narragansett Beer releases a summertime seasonal offering, Narragansett Summer. This beer checks in at 4.2 percent and 24 IBU’s, making it a “session brew” – one of the hottest trends in the craft category right now. Retail prices range from $7.49 to $8.99 per 6-pack of 16 oz. cans. The Summer Ale will be available across New England as well as Philadelphia and Southern New York.

Magic Hat Brewing Company. Everyone knows Magic Hat #9, but for the fi rst time it will be distributed in cans. At 5.1 per-cent, this “not quite pale ale” is built for easy summer drinking – one of the reasons for the recent addition of aluminum packag-ing. The 12-packs will be available until July 31st, while supplies last, in all markets where Magic Hat is sold (except for California). Suggested retail price is the same for both glass and can 12-packs.

Shipyard Brewing Company. Adding yet another addition to the Pugsley’s Signature Series lineup, Shipyard will introduce Smashed Blueberry in June. Like the other of-ferings in the series, Smashed Blueberry will be available in 22 oz. bottles and on draught. This beer checks in at 9.0 percent ABV and will be sold in all 40 states Shipyard is dis-tributed for a suggested retail price of $7.99.

Key Craft Offerings:


GERRY’S INSIGHTS By Gerry Khermouch

THE ENTREPRENEURIAL GENEAFTER GETTING MY NEWSLETTERout in New York the other day, I re-warded myself with a bike ride to the Upper East Side in quest of a coffee or a beer. Turned out it was going to be cof-fee – or maybe hot chocolate – that day, once I spied a nicely designed corner place with the odd name Little Brown Chocolate Bakery & Coffee. It had re-cently opened and, wouldn’t you know it, the owner was perched on a stool, observing his customers’ grazing hab-its, monitoring activity at the Starbucks across the street, bantering with anyone who wanted a moment of his time. The bald head, alert, friendly eyes and thick earring certainly made him look familiar.

Ah yes – why that would be Max Brenner, the chocolate guru! Having sold control of his original retail concept, the globe-trotting chocolatier (whose fi rst name actually is Oded – long story) has been road-testing a new store. As I spoke with Brenner, he was obviously reveling in the exploration part of being an entrepre-neur: hanging in the store from opening to closing, tracking every aspect of the opera-tion, constantly questioning each of his assumptions. It’s precisely this attention to minute detail that separates true entrepre-neurs from those I occasionally deride in my newsletter as “carpetbaggers” whose only interest is the fi nal destination (of a big payout) rather than the journey itself. That journey inevitably means dealing with an endless array of tedious details. For instance, though Brenner had viewed an 8 oz., $1.45 pour as a considerate step, Brenner told me he was fi nding out that it irked some customers, who found that size insultingly small despite the lower price. Keep it or ditch it? The fate of the world doesn’t hinge on resolving this dilemma correctly, but the fate of the enterprise rests on many similar choices.

After Brenner ambled on, I found my-self thinking of all the second and third acts I’ve witnessed in beverages. Just now, Fuze creator Lance Collins is returning to the fray with an intriguing functional line called Body Armor. John Bello, who al-ready sold two companies (SoBe and Izze) to Pepsi, is making an energetic effort

to get some traction for Adina Holistics. Mike Weinstein, who sold a pair of even bigger companies (A&W, Snapple) to Cadbury, is quietly working his Hydrive energy/hydration line, which is part-owned and distributed by Cadbury’s suc-cessor, Dr Pepper Snapple Group. The two key builders of Glaceau, creator Darius Bikoff and go-to guy Mike Repole, swear they’re not coming back, but their marketing exec, Rohan Oza, has tiptoed back with an investment in Bai Brands. Even as Nestle Waters closed on full ownership of Sweet Leaf Tea, the brand’s founder Clayton Christopher was a year into Deep Eddy Sweet Tea Vodka.

What keeps these people coming back? It can’t be just the money – some of these guys brought in a ridiculous haul with their fi rst success. Of course, egos are at play: my pet theory is that they’re haunted by the knowledge that everybody thinks they got lucky on their fi rst big hit. Luck, of course, always plays a role, but if they can do it a second time, then surely it will prove that genius played the bigger part.

Most of all, it seems to be these folks’ fundamental love of the business that brings them back. They are tinkerers, and the beverage business is their workbench – heck, even while still shackled by his non-compete contract after selling Fuze to Coke, Collins had edged back into every conceivable beverage avenue not falling under its restraints, from Argentine wine and Mexican beer, to an agave sweetener.

To me, their presence is a great thing for beverage innovation, even if these

entrepreneurs rarely come close to repeat-ing their initial success on the same scale. After all, these guys – as opposed to the carpetbaggers – know the ropes, and de-light in the incremental improvements that can make the difference. They also have access to capital, and their reputation wins them a hearing with distributors and re-tailers that fi rst-timers may not get. (I long ago learned to take with a grain of salt dis-tributors’ avowals that they’ll “never take another product from that jerk!” referring to an entrepreneur whose last brand jilted them for the Coke or Pepsi system.)

As I suggested, there’s no guarantee that they will fi gure it out. But like Brenner, dili-gently patrolling his new coffee-and-choco-late emporium, they seem to have mastered that diffi cult balance between maintaining conviction about what they’re doing, and still being open to questioning every aspect of their creation. Of course, once in a while the returning hero really is just coasting – delegating the grunt work, generally being a tourist. Stay away from those brands!

And if the new brand doesn’t work? Well then, at least we plodders get to take solace that maybe they’re not such geniuses after all. We can indulge in the guilty plea-sure of schadenfreude as we watch them struggle. “I never really liked that jerk,” we can go around telling our friends.

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

C

M

Y

CM

MY

CY

CMY

K

FRS_BeverageSpectrumAd_OK_OL.pdf 1 2/24/11 10:53 AM

As Nestle Waters closed on full ownership of Sweet Leaf Tea, founder Clayton Christopher was well into his latest venture, Deep Eddy Sweet Tea Vodka.

C

M

Y

CM

MY

CY

CMY

K

FRS_BeverageSpectrumAd_OK_OL.pdf 1 2/24/11 10:53 AM


BETWEEN THE BEAN, THE CAFFEINE,and the fl avor, it’s hard to imagine a plant that has been more commonly utilized in the beverage industry than the coffee plant. Yet a new set of brands is making the argument that the most valuable part of the plant has actually been ignored.

That part is the coffeefruit, alternatively known as the coffee berry. It’s that part of the coffee plant that, much like other fruit, surrounds, nourishes and protects the cof-fee bean. While the shape, look and size of the fruit are reminiscent of a cranberry, it has a fl avor that is sweet and rather non-descript, perhaps one of the reasons that unlike most other fruit, it is most often discarded in favor of its seed.

Over the last two years though, cof-feefruit has been the subject of a great deal of talk in natural food circles with claims of it providing far greater antioxidant benefi ts than other so-called “superfruits.” Many of the claims are based on a scoring method used by the U.S. Department of Agriculture known as Oxygen Radical Absorbance Capacity (ORAC) which mea-sures the total antioxidant power of foods and beverages. Utilizing this method, coffeefruit is often found to provide 30-40 times the benefi t of fruits like acai and pomegranate per gram.

One of the biggest challenges coffeefruit faces is the confusion that comes from its association with coffee itself. Consum-ers seem to be confused or unsure as to whether beverages that include coffeefruit contain any actual coffee or high levels of caffeine, both of which are generally shunned in the natural foods category.

Interestingly, two companies that produce uniquely crafted coffeefruit beverages, Bai and Kona Red, have, until this point, taken different approaches to marketing their wares and, by extension, educating people about coffeefruit.

BAILess than two years old, Bai - the Chi-nese word for “pure” - was founded by Ben Weiss, a 15-year veteran of the coffee industry. Weiss previously owned a wholesale coffee bean roasting business and worked as a consultant in marketing and consumer product development for Godiva and Pepperidge Farm.

“I felt that coffee was a mature market, and I saw an opportunity for new product innovation,” Weiss said. “I heard about the energy benefi ts and antioxidants in cof-feefruit, and said, ‘This needs to be a new beverage. This needs to be in an RTD.’”

Weiss worked with a beverage chemist for 18 months developing trial batches and fl avors before Bai was fi nally released in August 2009. The beverage was infused with coffeefruit sourced from Indonesia, sweetened with organic cane sugar and came in strawberry, mango and blueberry fl avors. But perhaps most important in Bai’s development was not the taste or ingredients, but the design of its rela-tively simple label and packaging which Weiss noted was targeted to “speak to the “Apple” consumer.”

“Because of the impulsive nature of the business, we sort of ‘dumbed-down’ the messaging,” Weiss noted. “Bai has a sophisticated label, but we made it more about the illustration of fruit [than anything else]. People try us because of the fruit on our packaging, but they come back because of the taste and message [about coffeefruit and its antioxidant qualities]. This self-discovery has been very successful for word of mouth promotion.”

Beginning with the sale of four pallets of Bai to a New Jersey distributor, Weiss hit the road and began doing tasting demonstrations at various health food stores. But he quickly found that con-sumers wanted a low calorie/low sugar

Waking up toCOFFEEFRUITBY RAY LATIF

option and that he would need a new line to strengthen the brand. Within months, he developed a secondary product called Bai5. The new beverage was sweetened with organic stevia and as its names sug-gests, contained only 5 calories.

“Honestly, I didn’t have very high expectations [for Bai5], because I never thought we could make a low calorie product that would taste as good as what we currently had,” said Weiss. “Obvi-ously, I didn’t want to launch a product that might have hurt the brand, but when we came up with a Dragonfruit fl avor for Bai5, I couldn’t believe how great it tasted. That fl avor has become our number one seller, and Bai5 changed our business.”

Bai now comes in eight fl avors – 4 origi-nal and 4 low calorie - each tinged with

What If…you wanted a versatile, consistent, easy-to-use, compatible, multi-functional ingredient?

What If…there was a way to remove the fat, but keep the creaminess, body and mouthfeel?

What If…an ingredient was available that Does more than typical WPc?

M I C R O PA R T I C U L AT E D W H E Y P R O T E I N C O N C E N T R AT E

simplesse ®

The Whey to Healthy Indulgence

SIMPLESSE® Microparticulated Whey Protein Concentrate was specifically

designed to provide a smooth and creamy mouthfeel in low-fat, reduced-fat

and fat-free food and beverage products. Microparticulation is the key!

The microparticulation process allows SIMPLESSE microparticles to

behave almost identically to fat globules, providing the ability to reduce fat

content without compromising sensory attributes. CP Kelco has decades

of experience in the microparticulation process and in providing food and

beverage manufacturers solutions to processed food challenges.

Let CP Kelco help turn your “What If...” ideas into YOU CAN! solutions.

…do all this and much more with SIMPLESSE ® from CP Kelco.

GENU® Pectin | KELTROL® Xanthan Gum | KELCOGEL® Gellan Gum

CEKOL® Cellulose Gum | GENU® Carrageenan

Global Headquarters1000 Parkwood Circle, Ste. 1000

Atlanta, GA 30339Tel: +1 678 247 7413

www.cpkelco.comwww.whatif-youcan.com


names of exotic coffee growing regions like Panama Peach, Mango Kauai and Congo Pear. And while Bai’s initial mar-keting focused less on the benefi ts of cof-feefruit and moreso on its look and taste, the company has very recently introduced point of sale marketing on Bai’s function-ality declaring, “The secret is out.”

Still though, Weiss makes it clear that Bai is “not a brand business.”

“We’re a sales and distribution busi-ness,” Weiss said. “I feel like I did my brand building in the 18 months prior to launching. What we’re doing now is digging deep into market territory and cre-ating a solid contact network that is based on sustainable distribution equity. “

As an indication of how important his relationships with distributors are, Weiss noted that in February 2011, 78 percent of Bai’s sales came from reorders.

Bai is currently sold in fourteen states and the company works with a range of distributors including several Northeast Independent Distributors Association (NIDA) affi liates in New York, New Jersey, Massachusetts and Connecticut. It also recently signed a deal with the Hon-ickman Group for the Mid-Atlantic reion.

The company has a stated goal of achieving national distribution in 2011 and perhaps the biggest sign that Bai may succeed at doing so has been its ability to attract big name investors and beverage industry insiders including Ken Sadowsky, the executive director of NIDA and former Glaceau board mem-ber; former U.S. Senator and Starbucks director, Bill Bradley; and Rohan Oza, the marketing chief at glaceau.

And as the coffeefruit beverage catego-ry continues to expand, Weiss stated that “We’re a scrappy company, and that is the way we’ve succeeded so far. We anticipate more competition and welcome it. We’ll just let the brand do the talking.”

KONA REDThough a relative newcomer in the bever-age world, Kona Red made a splash at the recent Natural Foods Expo West and has quickly established itself as a contender in the coffeefruit drink category.

Since its inception three years ago, Kona Red has had a focus of bringing premium Hawaiian coffeefruit – in a variety of

forms - to several consumer product mar-kets. In 2011, the company introduced Kona Red Antioxidant Juice, a coffeefruit-based beverage that includes pineapple, apple and raspberry juices and is lightly sweetened with stevia.

The beverage contains a proprietary coffeefruit extract that Kona Red claims “contains three main acids that synergis-tically provide higher levels of anti-oxidants than has ever been tested.” Yet while the message of antioxidant strength resonates well with most consumers, there is another aspect of coffeefruit that the company fi nds even more compelling.

“It doesn’t necessarily matter how high an ORAC score is, which, by the way, can easily be manipulated,” said Shaun Rob-erts, the founder and CEO of Kona Red. “The most important part of our product is bioavailability, which measures the absorp-tion of antioxidants into the body. Our cof-feefruit is 10 times more bioavailable than any other superfruit on the market.”

However, with taglines like “Paradise in a Bottle” and “Wellness You Can Feel”, as well as labeling that touts the beverage as a “Hawaiian Superfruit Antioxidant Juice”, it is clear that the company is looking to call out Kona Red’s functionality and taste, without using the word coffeefruit.

“In our focus groups and in all of our research, we [realized that] we confused consumers by saying ‘coffeefruit’, said Shaun Roberts, the founder and CEO of Kona Red. “And while our job is to educate consumers about coffeefruit, we believe that we are primarily a Hawaiian superfruit.”

Kona Red sources its coffeefruit from plantations throughout Hawaii which in the past had considered it a byproduct of such little use, that literally tons were dumped into the ocean.

“In Hawaii alone, 40-50 million pounds of coffeefruit were discarded every year,” noted Steve Peykoff, vice president of sales & marketing at Kona Red. “So we contracted with major cof-fee suppliers and farms to utilize what had been a byproduct, and [in doing so], we’ve created greater sustainability in Hawaii’s coffee farming business. “

Kona Red has distribution agree-ments with UNFI and Nature’s Best and currently sells its product through DSD networks in Hawaii, Texas and most of

the western United States. The company hopes to be in the New York and Miami markets by this summer.

When asked if and when Kona Red would have national distribution, Peykoff said, “We’re prepared to go na-tionwide right now. And it’s a very good possibility that we will [have national distribution] in 2011.”

But in addressing growing competition amongst coffeefruit beverages and, specifi -cally, category leader Bai, Peykoff stated that, “We’re not competing with Bai. From plant to bottle, we have an upscale production process and we’re positioning Kona Red as an upper end, high impact beverage with a high amount of our pro-prietary extract.”

For more information on retail and distribution opportunities contact JAMES WARD at (901)-647-7514 or [email protected] THIS AD and receive a special introductory offer!

THE NEW DNA OF ENERGY.

<SCAN HERE or visit us at:www.helixdrinks.com or facebook.com/helixdrinks

48 ct. box shown. (5” x 6.25” x 2.5”)

C

M

Y

CM

MY

CY

CMY

K

HELIX_BevSpecAd_PRINT.pdf 1 5/19/11 2:39 PM

ENTREPRENEUR’S EYE By Brent Sonnek-Schmelz


WELCOME TO ENTREPRENEUR’S Eye, a column dedicated to expressing the viewpoint of the beverage marketers whose growth and positioning often com-prise much of the coverage base for this magazine. I’m Brent Sonnek-Schmelz, the CEO of RelaxZen, and I’ll be writing the fi rst few columns, although the manage-ment tells me that other entrepreneurs with strong voices and important topics are always welcome to pitch columns (and give me a month off).

Why did we need it? I think of Beverage Spectrum as the voice of the independent brands – the startups, the orphans, the giant-killers. I read it, along with BevNET.com, to sort out trends and learn more about my new industry. I have gained a great sense of the people and the products, but only from a third party perspective. Missing from the voice of the independent brands was the actual voice of an indepen-dent brand. This column will fi ll that void.

What you will fi nd here over the coming months are my own observations about

my brand, RelaxZen, and our industry. Granted, I am still a beverage newbie, but maybe that’s a good thing: it gives me a different perspective, one that may not be constrained by common wisdom and industry practice. As Coco Chanel, that timeless symbol of women’s fashion, once said, “In order to be irreplaceable, one must always be different.”

My point of difference, other than be-ing a little quirky and having a penchant for dropping Coco Chanel quotes, lies in having an incredibly varied background: I have experience in private equity, educa-tion, publishing, business process out-sourcing, retail, automotive, market research and law. What I tend to do well is recognize opportunities, learn as much about them as possible, and try to exploit them by making linkages to everything else I have experienced.

With RelaxZen, I recognized a unique opportunity to launch a differentiated brand in a new category that addresses two key pain points of a huge number of people. No one can sleep all the time, and every-one suffers from too much stress. It made sense. I soon discovered that it made sense to a lot of other people, too. There are now in excess of 30 “relaxation” brands seeking market share – a competitive situation that, while diffi cult, is also exhilarating.

With so many relaxation brands emerging at roughly the same time, I knew that I would need to learn about my brand, the category, the industry, the supply chain, distribution and messaging extremely fast. I’m a quick study, but I also know that the key to learning is not memorization and regurgitation. It is crit-ical analysis, application and change.

As a result of us remaining constantly attuned to the learning process, I believe that, right now, RelaxZen sits in a pretty good place. It has been only 18 months, but even with mistakes, some bad judg-ment and countless changes in direction, I feel confi dent in our trajectory. Plus, much

of what I have learned I know will remain foundation pieces of my career.Here are some of the highlights:

• Don’t spend any money in the be-ginning. All of it will be wasted. But when it is time to spend money, be ready to move very quickly and ag-gressively. Spending money too early, before customers can buy your prod-uct or before you have a solid message, never generates a strong return on in-vestment. But, if you keep lots of dry powder around, when it’s time to fl ip the switch good things will happen.

• Everything will take two to three times as much time as you expect before it actually happens. This applies to pro-duction runs, raising capital, hiring, getting product on the shelves of retail-ers, receiving payment and everything else. Planning becomes more diffi cult as a result, but even more vital.

• Expect at least two to three calls a month from someone trying to sell you an ad on a big screen in Times Square. They always have the same story: A big customer dropped out at the last minute, and they can offer you the incredible deal of $17,000 for a six month run. It sounds cool the fi rst time, but it loses its appeal after 20 or so calls.

• Competition is irrelevant. Nothing they do matters at all if you don’t execute. If you do execute, nothing they do matters anyway. If you pay attention to others too closely, you will always be playing catch up and making bonehead decisions in the name of “blocking maneuvers.” Basically, just execute and forget everybody else.

• Don’t fi xate on being fi rst to market. It does not matter. Was Google fi rst to market? Nope. Was Facebook? Nope. How about Dawn dish soap? Nope again. Execution, as per above, is so much more important.

• Most important: Keep smiling.

wHAT I’VE LEARNED...SO FAR


IN ZONE GROWS IN AGES AND STAGESBY JEFFREY KLINEMAN

It’s a tossup as to which is harder for a parent – putting an overtired child to bed, or waking one up after a long night’s sleep.

For In Zone brands, however, the task was multiplied by a massive number of bottles: the management had to put an entire product line to bed, and then wake it from slumber ready to hit the shelves.


In Zone, a kid-centric beverage com-pany that had thrived on the intersection of clever packaging and licensed proper-ties like Bob the Builder, D.C. and Marvel Comic Superheroes, and Hello Kitty, to provide basic sweet juice, went pretty much dark for about a year in 2007, forced to the margins by a DSD business model that wasn’t working and a series of products that, while physically attractive, weren’t hitting home with consumers who were becoming more interested in nutrition.

It was a tough blow for a brand founded by serial entrepreneur Jim Scott, a Georgia native who had started businesses ranging from barbecue grills to the state’s largest moving company. But as with many entre-preneurial ventures, the energy to get things off the ground and the know-how to get things to fl y right aren’t always included in the original launch plan. So after hitting on the clever idea that kids might clamor for a juice bottle topped with a sport cap shaped like a fl ying Superman or a baleful Clifford, the Big Red Dog, Scott wasn’t able to fi gure out a route to market strat-egy that could reconcile the line’s hefty licensing and manufacturing costs with the neces-sary volume.

Enter a new market-ing chief, Samantha Hodgkins, who saw the potential for the line – if major changes could be made.

“The business had been growing from a sales and customer relations stand-point,” said the longtime CPG execu-tive, who had worked for everyone from Kellogg to GP Newell. “But the com-pany went ‘dark’ because an operational model hadn’t been set up.”

Burdening the brand was a heavy contract with Cadbury/Schweppes, which owned the Dr Pepper/Snapple distribu-tion routes at the time. While Direct Store Delivery is often the key to expanding a brand, it wasn’t working in the channels it needed to succeed: grocery and mass. And the liquid itself was little more than sugar water, making it an okay treat once in a while, but not the kind of product that a caring parent could justify with the high price tag that accompanies the product’s character-focused “topper.”

It had a strong impulse pull, according to

like Batman or Spider-Man.“Ages and stages,” says Hodgkins. “It’s

what we live and breathe every day now.”To hit the right consumers with that

approach, however, the brand had to hit the right channels – particularly with a parent having to lay down $2-$3 to get the re-usable top (not to mention a stream of other characters to replace or augment the initial purchase). Wal-Mart remains a key customer, and many of the country’s top convenience chains are on board. But to make things really take off, a stronger grocery presence is the key.

What In Zone has going for it is that the licensed products work as their own marketing campaign. Rather than spend on advertising, a well-merchandised, well-placed shelf set of superheroes can cut promotional costs to the bone. Neverthe-less, getting those slots can be expensive, running a close second to the overall cost

of paying for licensing and production.

Another thing In Zone has going for it is momentum: sales have gone from $14 million upon re-launch to $75 million last year; the company is profi table, accord-ing to Hodgkins, and is trying to innovate by launching more functional SKUs like

shelf-stable milks and sports drinks. While dabbling in functionality has

helped to sink other products, In Zone knows that any variation will come in within a tight range – the ages of 1 to 10. The brand, as its owners like to point out, is one of the few beverage companies whose sole purpose is to make products that only appeal to kids. It’s hard to imag-ine an adult clamoring for a limited edition Lightning McQueen juice, for example – although knowing that there’s only apple juice revving his engine can make ‘getting to yes’ a lot easier for the parent. And now profi ts are growing to the point where if the product is aimed at kids, the business itself is getting to be pretty mature, indeed.

“This is our coming out party,” Hodgkins said. “Our growth rate is high and it’s not driven by promotion. We’ve reached the point where we’ve got critical mass. And there’s a vision, a commitment, and a passion for the business.” •

Tracy Strom, In Zone’s PR chief, but with a composition that was basically sugar water in a 12 oz. package, “we weren’t ready for what moms and kids needed.”

In other words, the brand was kind of like a supermodel: expensive, great look-ing on the outside, but you just knew that inside, there wasn’t much in the way of redeeming qualities.

So the strategy changed a bit – rather than just rely on its appearance, the brand had to work hard on what was inside. The formulation changed to 100 percent juice, and the emphasis was that the brand could sit at what Strom calls “the perfect intersection of healthy and fun.” In Zone also ended its DSD arrangements, plunked down the cash to lease warehouses in 7 key U.S. regions, and began warehouse delivery to many key accounts, particularly Wal-Mart, where placements have doubled annually since the re-launch – from 2 to 8,

with even more expected next year.While the bottle toppers remain the key

driver for the kids to yank on parents and scream until they get what they want, the contents have been adjusted “to make it easier to say yes,” Hodgkins said.

Part of that adjustment came when the product was aligned to provide sizes and formulations that are more appropriate for three different groups of kids: the tod-dler (age 1-3), the preschooler (3-5), and the grade-schooler (5-10). While it’s easy to identify characters geared toward each group, the nutritional aspects had been given short shrift. Twelve ounces of sugar water might be okay for a 10 year-old, but it will send a 4 year-old through the roof. So now the youngest group gets 4 oz. of “Tummy Tickler Tots,” a reduced-sugar juice, while the preschool contingent gets 6 oz. of 100 percent juice. At the more ro-bust Belly Washer stage, the grade-school-ers get 12 oz. of juice under a character

In an attempt to sit at “the perfect intersection of healthy and fun,” In Zone reformulated and is now 100 percent juice with reduced sugar making it easier for parents to say “yes” to their kids clamoring for a Batman topped Belly Washer.

©20

11 B

YB

Bra

nd

s, I

nc.

Tu

m-E

Yu

mm

ies

and

th

e T

um

-E Y

um

mie

s lo

go

are

re

gis

tere

d t

rad

em

arks

of

BY

B B

ran

ds,

In

c.

50 Calories

13 grams of Sugar

Zero mg of Sodium

100% Daily Value Vitamin C

25% Daily Value Vitamins B6 & B12

It’s no surprisethis little bottleis a big seller.

Expand your youth drink portfolio with mom and kid friendly

Tum-E Yummies by contacting your Coca-Cola Representative.

tumeyummies.com

• Direct store weekly order delivery

available through Coca-Cola Bottler• Higher penny profit than competing beverages• 5 nutritiously fun flavors – 63% less sugar

than apple juice per ounce• 10.1 oz PET bottle with a sport cap closure• Singles and 12 pack cases available• Kosher Certified

WHAT MAKES

TUM-E YUMMIES

A FRUITABULOUS

FIT FOR

YOUR STORE?


Uncle Matt’s is introducing 6 oz. kid-sized servings of its not-from-concentrate Florida orange juice. Available in Whole Foods and certifi ed USDA organic, the product is aimed for lunchboxes nationwide and will be por-table and pulp-free. Uncle Matt’s will also add a new not-from-concentrate Homestyle Lemonade to their line of premium juice line. Made from California lemons and con-tained in a 59 oz. bottle, it will be marketed to kids and families.

Lifeway. Introducing the new fl avor “Strawn-ana Split” into their Probugs line, Lifeway is continuing to bottle these products with a no spill spout and a healthy message. Marketed to kids, this yoghurt-like organic drink comes in 5 oz. pouches with live cultures and sweet fl avors while keeping sugar levels low.

GT Beverage Company. Started by a father of fi ve, the GT Beverage Company’s Sportastic Sports Drink, has recently won awards and is drawing attention from media and bloggers alike; the product features 4 grams of sugar, 15 calories and is diabetic friendly.

BYB Brands Inc. Tum-E Yummy beverage is newly fortifi ed with 100 percent daily value of vitamin C as well as 25 percent daily val-ues of vitamins B6 and B12. Tum-E Yum-my’s bottles also have new label designs and contain only 50 calories, 13 grams of sugar and zero grams of sodium.

Langers. From a partnership of Langers and Disney come twist-top resealable juice pouch-es with all natural fl avor, added ingredients and a 100 percent juice mixture. The fl avors are Grape Punch, Berry Punch, Apple Juice and Fruit Punch and they contain no added sugar or preservatives.

Hansen Beverage Company. Available in 4.23 oz. juice boxes and 46 oz. PET bottles, Hansen’s Junior Juice Garden Twist is an all-new line of vegetable and fruit juices with re-duced sugar and fewer calories. The line will feature Apple Mango and Strawberry Banana

fl avors. Hansen has also added 46 oz. bottles to their ordinary Junior Juice lines.

First Juice., now owned by Lifeway, is an or-ganic fruit and vegetable juice combo designed specifi cally with toddlers and lower sugar con-tent in mind. Flavors include Apple + Carrot, Peach + Purple Carrot, Bannana + Carrot and Blueberry + Purple Carrot.

WAT-AAH! Launching a new fi fth fl avor into its lineup this spring, Wah-Aah! features a screaming boy logo and a bright neon color scheme. Wah-Aah! is an immune boosting ultra pure water with zinc and contains no sugar and no calories.

Zimbi fl ying-bottle juice drinks, the only bev-erage packaged in an out-of-this-world fl y-ing bottle that can be thrown over 100 feet, has recently signed distribution agreements with Core-Mark (Utah), Capital Candy Co., Mowhawk Distribution, and Associated Food Stores; it is also currently available through Maverick, Dan’s, Harmons, Fresh Market, Ridley’s, Maceys, Allens and other conve-nience stores and grocery stores throughout New York, Vermont, Oregon, Idaho, Mon-tana, Wyoming, Nevada, Utah, Colorado, and Arizona. Zimbi has also improved its aerody-namic nose cone, using the same clear PET that the bottle is made from. The new nose cone gives the product an even more striking appearance and allows consumers to see the sports top more easily. Additionally, a new la-bel features the Zimbi alien eye.

Nestle Pure Life is launching the Hydration Movement, an online program that will edu-cate and engage families in healthy hydration. By joining the movement, consumers will pledge to swap one sugared beverage a day for water for a year to eliminate up to 50,000 calories from their family’s diets. After taking the pledge, participants will also be able to share stories and pictures about how taking this pledge has impacted their life. For joining the movement, consumers will receive at $1-off coupon and be able to enter into a sweepstakes to win Nestlé Pure Life bottled water for a year.

BRAND NEWS: KIDS BEVERAGES

BRAND NEwS

Please help us.Kids are driving their parents crazy.

Kids buy Fruit 66 at school, and until now

that’s the only place they could get it.

Please carry Fruit 66 in your retail stores so

we can tell parents where to buy it.

Don’t do it for the kids, do it for the parents.

www.fruit-66.com (866) 929-0066

Can BeSold at

99¢Per Unit

• Established nationwide fan base.

• Fits in the New Age and Natural sections of your stores.

• 100% fruit juice + 2 oz sparkling water for fun.

MY KID WANTS FRUIT 66!

BevSpectrum04-22-09.2.indd 1 4/22/09 2:42:13 PM


THE CONTENDERSWith Frappuccino and a pair of energy drink/coffee blends leading the way, RTD coffee remains a category that more companies

have failed at than turned into a big win. But that hasn’t stopped them from trying, as the two brands we discuss below demonstrate.

TRYING TO FIND NEW SPACE IN A STARBUCKS WORLD

BY: RAY LATIF

In most David vs. Goliath scenarios, the worldrenowned celebrity chef would most certainly play the giant’s role. Yet with his name on a year-old line of bottled iced coffee, Wolfgang Puck fi nds himself a huge underdog in a category dominated by Starbucks, a company that controls almost 96 percent of the RTD coffee category, and one that in 2010 actually increased its market share.

“With Starbucks, the popularity of iced coffee exploded in this country.” said Craig Lieberman, who is the co-creator of Wolfgang Puck Culinary Iced Coffee. “But we’re not trying to [beat] Starbucks. Our hopes and ex-pectations are that we’re looking at a category that is continuing to grow.”

Lieberman is a veteran of the consumer packaged goods industry with experience and success bringing various lines of frozen foods to market in Texas. In addition to his role as a managing partner with Woodway Beverage Partners, he is an investor with Jardin Foods and Sweet Leaf Tea. In 2008, Lieberman approached Puck about licensing his name and creating a new line of iced coffees.

“I wanted to create the best ready-to-drink iced coffee ever, and I knew Wolfgang was a big coffee lover. So when I was thinking of a partner, it was pretty simple.” Lieberman said. “I mean, how could you have a bet-ter partner than the premier chef in the country who is passionate about quality and taste and has a great a sense of what people like.”

“What was great was that even before I talked to Wolfgang about my idea, he and his pastry chef, Sherry Yard, had a discussion about American ice coffee being overly sweet and overly fat.” Lieberman continued. “They wanted to create a product that was a little healthier.”

To do so, Puck, Yard & Lieberman collaborated for almost two years working with blends of organic coffees from Ethiopia, Peru, Colombia and Mexico, organic milk, and complementary fl avoring ingredients such as Tahitian vanilla, European chocolate, and pure cane sugar.

The result was an iced coffee that contains 120 calories per 8.5 oz. bottle and is both certifi ed organic and kosher. It is produced through a cold brewed process that is supposed to give it less ‘bite’ and acidity than that a traditional, hot brewed coffee. Varieties include Café au Lait, Vanilla Fusion, Crème Caramel, and Double Blend Mocha fl avors.

Though the product is currently distributed in Southern California, Las Vegas and some specialty food stores in New York, Lieberman recently announced that The Fresh Market and Kroger supermarkets in 35 states would begin carrying Wolfgang Puck Iced Coffee beginning in June. (continued on page 44)

ILLY ISSIMO: COKE’S GOBAL STAB AT A COFFEE SOLUTION

BY: KASIA PILAT

It is a somewhat uncharacteristic move for a beverage behemoth to take it slow and quiet with one of its latest ven-tures, but that’s just what the Coca-Cola Co. is doing with Illy Issimo. The ready-to-drink canned coffee has brought about as a joint project with an internationally-known coffee company, promoted through little more than modern day’s version of word of mouth, and rolled out slowly through key accounts. If it sounds like an entrepreneurial product, you’re right, but the aim is to make it a contender in coffee, which Coke considers an underdeveloped business.

Why is it underdeveloped? Well, certainly, the company’s much-publicized struggles haven’t helped when it’s thrown big product launches out there. So with Illy issimo, things are going slowly: it has been on the shelves since May of 2009, but is just beginning to get wider distribution beyond introductory chan-nels. As a product under the VEB umbrella, it’s taken some notes from the pages of other successful VEB brands like Honest Tea and Zico. Both were small, entrepreneurial-based companies that built their business from the ground up, with individual nuances and qualities unique to themselves. Another brand that fi ts that description? Italy’s own illycaffè. (continued on page 44)

vebventuring &emerging brands

veb

DECEMBER 5 & 6, 2011

WINTER 2011SANTA MONICA

Loews Santa Monica Beach HotelSanta Monica, CA

SPONSORED BY:

For more information and early registration pricing, visit www.bevnetlive.com

™


At its suggested retail price of $3.29 for an 8.5 oz. bottle, the cost is higher than most other RTD coffee, including Starbucks’ Frappuccino and Doubleshot brands. But Lieberman noted that, “What we provide is a product that has a different taste profile that what is out there. It’s more like a true iced coffee as opposed to one that is cloyingly sweet, thick and indulgent. We’re hoping that consumers see value in our product and don’t mind paying for something that is modestly higher priced in comparison.”

That’s a big gamble for a product that has almost no presence in the category especially knowing that this is not Puck’s first RTD coffee. About six years ago, Puck approved the use of his name for a line of RTD lattes packaged in what was hailed as a revolutionary self-heating can. The product turned out to be a disaster with numerous reports of the can overheating, leaking, and even exploding. Within months of its release, the coffee was recalled from store shelves and Puck endured a public relations nightmare.

When asked if his new line of iced coffee was Puck’s attempt at re-demption, Lieberman replied, “No, not at all. If [Puck] wasn’t proud to put his name on a product, he wouldn’t do it. While the technology [for the self-heating lattes] may have failed, the concept did not.”

Considering the early problems that doomed Puck’s last coffee line, Gerry Martin, the vice president of marketing and immediate consump-tion sales for Polar Beverages, stressed that education and exposure would be the key to success for Puck’s new coffee.

Choosing illycaffè as the partner may have been the best pos-sible decision on Coke’s part. From a company lens, illycaffè is among the best of the best: the company has been devoted to producing its singular blend of Arabica coffee and coffee-relat-ed products for 77 years. Family owned and operated, illycaffè is also one of the world’s most scrutinized, yet most successful coffee brands, paying for high-end roasted beans from Ethiopia. That illycaffè is based out of Triesto, Italy, also offers the new product more room to grow: an international brand creates global opportunities, which can potentially alter or even rede-fine the ready-to-drink coffee category.

Of course, there’s an elephant-sized mermaid in the room, Starbucks. The presence of that kind of category-killer makes the task seem to be a daunting one: according to Symphony/IRI Group, in the twelve months ending this Feb. 21, Starbucks’ Frappucino accounted for 86.3 percent of RTD coffee sales, with the Starbucks Doubleshot picking up another 9.3 percent.

Still, that’s not Coke’s key concern – it doesn’t exactly be-lieve illy issimo is around to compete with Frappuccino. Talk to Coke and they’ll tell you that illy Issimo is all about the coffee, rather than a milk-based indulgence. That idea, among others, is one of the distinguishing factors between illy issimo and Coke’s three previous coffee-related products.

Speaking of those products, this new venture does beg the question: with three fruitless previous attempts at a coffee-based product (Coca-Cola BlaK, infamously spat out by Anderson Cooper on national television, Godiva Belgian Blends and Caribou Iced Coffee), what would cause Coca-Cola to opt for a potential fourth? For the answer, one has only to look at coffee itself, a product that is drunk pervasively in America and one that has shored up both Starbucks and Dunkin’ Donuts, and recently helped turn around another big food company,

McDonald’s. Even so, cold coffee is regarded by many analysts as still in its nascent period, particularly from a grab-and-go standpoint. Both the consumer behavior and appreciation for this new category has been changing, and the takeoff success of a product like the Starbucks Frappuccino can attest to that.

The illy consumer, described to Advertising Age in Novem-ber of 2010 by VP of Marketing at Illy Caffe North America Beverly Stotz, is also unique.

“Consumer education factors into [retail] buyers’ reluctance or willingness to put a product on the shelf,” Martin said. “And even though RTD coffee has limited players, a new entry will still need to be supported by local marketing pull programs. You have to do sam-pling, give coupons and offer promotions.”

Martin also noted the importance of localized marketing in specific cities and regions.

“If a company like Dunkin’ Donuts were to create a line of RTD coffee, they would have a home run here in the Northeast. But be-cause Wolfgang Puck doesn’t have the same brand name recognition and trust – at least when it comes to coffee – [his new line] will have to come with more than just a name. Unless they customize market-ing to my backyard …I don’t have enough local pull to convince buy-ers to stock the product.”

Still, and even with several new RTD coffees quickly appearing in the category, (including Marley Beverage Company’s 56 Acres Iced Coffee and Bean & Body Coffee, both showcased at the 2011 Natural Foods Expo West), Lieberman seemed confident that Puck’s coffee would stand out amongst its competitors.

“If this were ‘Craig’s Iced Coffee’, I probably wouldn’t [be involved]. But with Wolfgang Puck, it gives us a leg up in finding customers that appreciate what we have as an alternative to what is out there.”


“First, they’re passionate about coffee,” she said. “They tend to live in urban centers, and we’re very much a bi-coastal brand and an urban brand. They tend to be professional, highly educated. Somewhere around 25% have a graduate-level degree and the age break would be mid-30s to late-50s. Psychographically speaking, they’re interested in food, wine and in seeking the best in life.”

These consumers are illy issimo’s direct targets, which weren’t there for Coke’s other three coffee drinks. While the Starbucks Frappuccino is more of an indulgent, calorie-rich, milk-based coffee beverage, illy issimo is deeply anchored in the already-established culture and legacy of illy’s coffee. Even its taste is strongly coffee-centric.

With such a focused target consumer, it seems unlikely that illy issimo will blossom into a mass appeal product anytime soon. That’s why just putting illy issimo everywhere Coca-Cola is simply won’t work, the company has found.

The focus with illy issimo is finding the right markets, the right channels and the right customers. It’s available on Virgin America airlines, for example, and it has prominent outlets in places like the newly opened Renaissance hotel in Crystal City,

near Washington, D.C. The brand is also prominently featured in niche coffee shops such as Caffe Milano in downtown Tuc-son, Ariz. Of course, it doesn’t hurt that illy issimo has part-nered with big-time distributors Big Geyser in New York and Haralambos Beverage Co. in California, both known as experts at seeding brands in the right accounts.. For now, however, the people behind illy issimo are concentrating on building a brand with the right customer and through the right markets.

Similarly, instead of traditional marketing programs, mar-keting spending has been focused on the development of the illy issimo brand, driving awareness of the brand and product trial. As it stands, illy issimo is confident it can drive aware-ness in trial through product sampling and see repeats because it’s also confident in the quality of the product itself. This may also be why illy issimo retains a presence on social and viral media outlets like Facebook and Twitter, where news of trials and samplings is easily shared.

The fact remains that, for now, illy issimo is a specialized drink in a category that is still changing, and this makes it somewhat difficult to gauge the potential success or failure. That’s even more apparent when considering the slow, methodical approach the VEB Unit is taking: illy issimo’s growth isn’t necessarily measured by market share. Rather, in this stage of development, it’s measured by the number of outlets in which illy issimo maintains a consis-tent presence. It’s also measured by the sales turns based on illy is-simo’s business models: How many cases per week or month does illy issimo need to sell at particular outlets to be a viable player and to be profitable? These, as well as individual, store-level mea-surements, are available, as are the tools to measure viral influence

and impact on sites like Facebook and Twitter. Understandably, illy issimo is particular about where the product is put. Where it does elect put the product, it tends to perform quite well, which remains a positive sign for the company.

So, ten years from now, will illy issimo be a big, Coke-like brand? Maybe, but it doesn’t seem that way right this second. Until you look, once again, at a big, Pepsi-like brand like the Starbucks Frappucino, and where IT was 10 years ago.


Retailers who are in the know can add a strong variety of functional products

into a tiny footprint. >>>


The key to the powder package isn’t just that it’s portable, but also that it doesn’t pretend to be something it isn’t: no powder is going to claim that it’s going to have a flavor advantage over a blended product.

Even the marketing for almost-but-not-quite-complete drinks like Activate, which includes a bottle of water and a reservoir cap filled with powder, points to the product’s ability to maintain its functional qualities through freshness, rather than any kind of special note about its flavors.

“We’d like to expand into the powder line on a bigger front,” said PRE founder Scott De Lorme, “It’s a great way to start building brand awareness – and then build out with the appropriate DSD person.”

And consumer confidence is rising to meet powders: a recent poll conducted by the Center for Responsible Nutrition indicated that consumers have more than 80 percent confidence in dietary supple-ments: and by packaging themselves as such, many “pre-beverages” avoid issues of flavor while aligning themselves with that growing supplement business.

For De Lorme, whose brand deals in

ing Nuun and the aforementioned Propel Zero, as well as a fair number of protein products. Ajmera’s Coconut Water pow-ders also get in on the action here.

Additionally, however, there are straight flavor additives: in addition to Crystal Light, there’s the new Mio, included because it serves a role similar to powders and, well, there just isn’t a category for this kind of product yet.

Also, there are the health and vitamin C types, like Alacer’s Emergen-C; some, like ZipFizz and Jade Monk, also add energy elements as well.

There are your probiotics, like PRE and Ph.D., as well as other make-you-feel-better products like Detox Shaker, which also fea-tures a combined wet/dry mixing mechanism.

Finally, there’s VIA, a hot drink that might be beating them all in terms of rel-evance. Why? It’s coffee, of course.With mixes taking off to the point where companies like Fortitech and others are actually developing formulas that are classified as “market-ready” with the introduction of branding and packaging elements, get ready for the dry deluge to continue. •

The World Health Organization (WHO), has just recommended that all drinking water contain at least 25 mg of magnesium per liter, to

prevent heart attacks and strokes. See: www.MgWater.com/download Adobe Springs contains 110 mg of magnesium per liter, and is the only licensed bottled water source in

California that meets the WHO standard.

Our 5 trained Board Members are all licensed Contractors--- average age 45.

Call Gary Dutey Sr., President Tel: (209) 620-3706

Email: [email protected]

probiotics and gut health, the powder blend also offers an excellent metric into how his brand is doing – the functionality is so specific that anyone seeking out the powder is a dedicated consumer.

With powder sales a huge part of online grocery sales at Amazon, and shots having already reduced metrics for store profit-ability down to centimeters at the counter, that means that retailers who are in the know can add a strong variety of func-tional products into a tiny footprint.

It’s an idea that has caused many brands to try to re-entrench themselves via powders. One great case is Propel Zero, the latest iteration of what had been a powerful Gatorade offshoot. With so much intensity now being focused on the Gatorade rebranding and the successful G2 low-calorie line, re-launching Propel largely as a powder would seem to make sense for that brand.

To understand the powder world, look at the brand news included here: it’s interesting that a great many break down along the lines of current functional beverage products. There are a large set of sports and hydration brands, includ-


Nuun & Co. is announcing fi ve new fl avors into their lineup of electrolyte hydration bev-erages: Strawberry Lemonade, Fruit Punch, Tropical, Lemon Tea and Grape. Nuun’s packaging tubes contain twelve tablets that are seven calories each that combine with 16 ounces of water to form a personalized sports drink that’s bottle free.

Click Co., LLC. To cater to the naturally minded consumer, Click is introducing an all-natural version of their Espresso Protein Drink original that will be sold in retail loca-tions that carry only natural products. Click is fortifi ed with 15 grams of casein protein and 23 vitamins and minerals.

Helix Energy is introducing an energy and ginseng powder drink with no sugar, no car-bonation, plenty of vitamins B and C, and only 10 calories per pack. Helix has also spon-sored Matt Waldin Racing in the 2011 Formu-la Drift Race series in Long Beach California.

Jade Monk Beverage Company, Inc.

Named as one of “The Dieline’s Latest Top 10 Package Designs,” Jade Monk will be intro-ducing a fortifi ed green tea in 2011 that con-tains 137 times more antioxidants than tradi-tional green tea and the highest percentage of L-Theanine on the market today, according to the press release.

Crystal Light is introducing three new fl avors into its natural line, Crystal Light Pure. Their new Tropical Blend, Mixed Berry and Lemon-ade fl avors are part of a line that feature no artifi cial sweeteners fl avors or preservatives. Sweetened by sugar and Truvia, Crystal Light Pure has just 15 calories per serving.

Zipfi zz Corporation will be adding distribu-tion of an Orange Creamsicle fl avor to their existing lineup. New distribution will include Albertsons, Ralph’s, REI, and BJs Wholesale. Zipfi zz also features a new and improved for-mulation with the antioxidant Kona Red.

Maxim / Ajmera, Inc. Reva Natural, intro-duced by Maxim/Ajmera Inc. as a new product

line, is an all-natural coconut water powder. Featuring three fl avors, Original, Mango and Pineapple, Reva Natural has 30 percent of the recommended daily allowance of potassium and is packed in eight 16 gram packets per box with the suggested retail price of $4.99.

PRE Beverage Company. Introduced to fi ghtsummer traveling ills, Pre developed “to GO” Synbiotic Drink Mixes to stimulate the body’s immune mechanism when travel is imminent. Classifi ed TSA compliant, “to GO” packets are .25 ounces and contain 2.5 billion probi-otics in each serving. “to GO” comes in four fl avors and is 20 calories per serving.

Propel Powder has been reformulated into Propel Zero Powder, which is enhanced with vitamins. Flavors include Berry, Grape, Kiwi-Strawberry, Lemon and Rasberry Lemonade while “with Calcium” fl avors are Cherry Lime with Calcium, Citrus Punch with Calcium and Lemonade with Calcium.

Beauty Foods. Introducing its fl agship prod-uct, Beauty Foods has formulated a beauty-enhancing hot chocolate drink mix supple-ment with BioCell Collagen II. To promote healthy aging, the product contains a “beauty cocktail” as well as BioCell Collagen II, that includes vitamins, natural antioxidants and sleep-enhancing extracts. The product also in-cludes all-natural ingredients.

Vitalyte. Vitalyte is introducing a new prod-uct called Stick Pack Boxes that contain 10 sticks of their existing fl avors, Zesty Orange, Fruit Punch, Lemonade, Cool Citrus and Grape. Vitalyte’s products promote hydration and electrolytes.

Emergen-C. With a reformulated Immune+ product, Emergen-C is promoting its immu-nity fortifi cation system. Featuring vitamin C and D, zinc, manganese and other nutri-ents, this product fi zzes in water and has no artifi cial sweeteners, fl avors, colors or pre-servatives. Immune+ is currently available in two fl avors — their original Citrus and the new Blueberry-Acai.

BRAND NEWS: POWDERS

SPONSORED BY:BRAND NEwS

PROMO PARADEPROMOTIONS, EVENTS, AND SPECIALS FOR THE INDUSTRY


Jones Soda Cheerwine

Bud Light

Hershey

Jones Soda and K2 Sports, both Seattle based companies, have announced a two year partnership that will include one-of-a-kind Jones Soda skis and snowboards, as well as joint market-ing campaigns. Additionally, the partnership will develop cross-branded merchandise for Jones Soda to use for incentive and prizing purposes.

Long known for its alternative distribution strategy, Jones will continue to align with the action sports market by joining K2 at snow sport events, demo centers, movie premieres, retail displays and other promotional events.

Expanding on its 94-year history, Cheerwine is build-ing on its current distribution with plans to be in all 50 states by the com-pany’s centennial in 2017. A cherry fl avored soft drink that is an icon of the south, the brand’s expanded distribu-tion will be paired with a marketing campaign that will be the largest in the company’s history.

Using a combination of local fan events and local media, Cheerwine is looking to promote itself as a legend of the south.

Bud Light will renew its sponsorship of Ultimate Fighting Cham-pionship in a multi-year deal. The sponsorship will increase the number of featured Pay Per Views and will include a Facebook contest that will give fans 21 and older a chance to win a trip to the “Battle on the Bayou.”

Bud Light will continue to receive logo placement throughout UFC events, press conferences, weigh-ins and locker rooms. Bud Light will also introduce a new UFC limited edition UFC alumi-num bottle that will be the fi rst to bear the UFC logo.

Hershey’s Milk & Milkshakes will be the offi cial sponsor of Hoop It Up, the world’s largest 3on3 basketball tournament. The contest will involve scor-ing as many points as possible from six locations on the court, and the fi rst place winner will receive 40 percent of the proceeds.

The promotion will intro-duce 40,000 contestants and 200,000 spectators to Her-shey’s Milk and Milkshakes, which are available in 12 ounce, plastic single-serve containers. Flavors include Hershey’s Lowfat Chocolate Milk, Hershey’s Chocolate Milkshake, Hershey’s Cookies n’ Cream Milkshake and Her-shey’s Strawberry Milkshake, at retailers nationwide.

Beverage Spectrum April-May 2011

Documents

Transcript of Beverage Spectrum April-May 2011