May 30, 2011
Wolfgang W Wo lfgang Puck and Illy
PAGE 46
PAGE 22
PAGE 36
APRIL-MAY 2011 vol.
9 :: no. 3
Columns 4 FIRST DROP Beverages: A social life
PHOTO BY: STANISLAW SZYDLO
6 PUBLISHERS TOAST Barry becomes a functional test subject. 28 GERRY’S INSIGHTS The creative gene 30
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 flavors 14 CHANNEL CHECK Measuring powders 36
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 profiles
42
Features 36 KIDS BEVERAGES In Zone gets back in the zone. 42 COVERS TORY: COFFEE CONTENDERS Wolfgang Puck and Coca-Cola take aim again. 46 POWDERS The dry deluge
46 Beverage Spectrum (Postal Number 024-552) is published monthly with combined issues in January/February, May/June, July/August and November/December by Beverage Spectrum Publishing, Inc., a wholly owned subsidiary of BevNET.com, Inc. 44 Pleasant Street, Suite 110, Watertown, MA 02472. Periodicals postage paid at Boston, MA and additional mailing offices. POSTMASTER: Please send address changes to Beverage Spectrum Magazine, Subscriber Services, 44 Pleasant Street, Suite 110, Watertown, MA 02472
Beverage Development Ingredient Supply Shots Energy Drinks Enhanced Waters and More Proprietary Flavors Premixes and Bases U.S. Distributor
THE FIRST DROP
By Jeffrey Klineman
By Brent Sonnek-Schmelz
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 awkward 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 monthlong 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 Francisco 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 mentioned 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 downstairs 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-macrobiotic bride talks about her friends heading out for “cold frosty beverages.” By 4 BEVERAGESPECTRUM.APRIL-MAY.2011
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 audience waiting for your drink, even if they can’t pronounce it. Also, most of my encounters 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.
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PUBLISHER’S TOAST
By Barry J. Nathanson www.bevspectrum.com
FUNCTION, EFFICACY AND FORMAT
Barry J. Nathanson PUBLISHER bnathanson@bevnet.com
Jeffrey Klineman EDITOR jklineman@bevnet.com
Ray Latif ASSISTANT EDITOR rlatif@bevnet.com
SALES John McKenna ASSOCIATE PUBLISHER
IT’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 cheerleading 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 barometric reading of the state of the industry. If these few months are any indication, the industry is headed in the right direction and innovation is still in vogue. I’ve been introduced to soy, fiber, super berries, coconuts, energy, relaxation and sleep brands. I’ve seen packaging formats designed to give you the freshest of vitamins. 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 ramifications of over-exposure to so many exotic beverages. What all these new entrepreneurs have in common is the need to fully understand how to execute their ideas. My colleagues at BevNET and I have long given advice or steered them where to go. We talk function, efficacy 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 quantum leap forward. Flavor houses and product formulators are now so cuttingedge they enable marketers to actualize their concepts. State-of-the-art co-packing 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 retailers and distributors and wholesalers to take risks in adding truly innovative 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.
jmckenna@bevnet.com
Adam Stern ASSOCIATE PUBLISHER astern@bevnet.com
Jeff Hyde ACCOUNT EXECUTIVE jhyde@bevnet.com
ART & PRODUCTION Matthew Kennedy CREATIVE DIRECTOR Natalie Iknaian GRAPHIC DESIGNER BEVERAGE SPECTRUM PUBLISHING, INC. John F. (Jack) Craven CHAIRMAN jfcraven@bevnet.com
John Craven PRESIDENT & EDITORIAL DIRECTOR jcraven@bevnet.com
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BB
BEVSCAPE BUSINESS • The latest news on the brands you sell.
O.N.E. Prepping for Big Pepsi System Launch 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 following the company’s December takeout by PepsiCo and Catterton, which left PepsiCo the largest shareholder and founders Rodrigo 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 available via PepsiCo in about two-thirds of the country, with a concentration 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 distributors but longtime partner Exclusive in Manhattan) in several regions, 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
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.
and O.N.E. Kids – but is putting a hold on three of its other functional products, one based on cashews, one with acai and a coffeeberry 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 Bolthouse Farms marketer.
The Latest on Alcopops 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 sustainability 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 positive difference in the communities where [its] employees live and work” by donating time and percentage of their profits to charities 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 8 BEVERAGESPECTRUM.APRIL-MAY.2011
FDA – were recycled to produce ethanol. Meanwhile, as the new version eases back into the market, it’s going to have some competition. Pabst has introduced – in conjunction with rapper Snoop Dogg, natch! – Blast by Colt .45, which has a similar alcohol profile 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 production of the malt beverage. Claiming that the 12 percent ABV product “only serves to glamorize alcohol abuse and promote binge drinking,” Illinois AG Lisa Madigan also noted that “the promotion 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 involvement with Blast as its spokesperson.
One reason Madigan feels that it’s inappropriate is the growing popularity of a YouTube video featuring Snoop Dogg drinking Blast while dancing with scantily clad models. Recall that YouTube helped to sink the Four Loko brand the first time around. At least there’s no whipped cream involved – yet. Unlike its counterparts, CREAM, a 30-proof alcohol infused whipped cream, has stayed under the radar 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 ingredients 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.
BI
BEVSCAPE INNOVATION • Product development & marketing news
Coke is Reliably Relevant So if five beverage companies were to disappear from the face of the earth tomorrow (the horror!) which one would consumers 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
to be very loyal to the brand – or at least that it’s found the right way of relating to them. Out of the five 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.
corporation. The study tested “relevance” as how a well company reflects 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 find the brand extremely interesting – much more so than any of the other measures. For Brodeur, that might indicate that Red Bull fans tend
While Starbucks ran a relatively close second to Coke in all those categories, consumers in Brodeur’s survey found it somewhat more interesting than Coke as a brand. While brand relevance did not reflect 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.
Extreme and Edge Flavors 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 bittering 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 distinctive ingredients into drinks with more common 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.
10 BEVERAGESPECTRUM.APRIL-MAY.2011
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 flavor, capsaicin, an extract derived from chili peppers. The company paired the ingredient with other intense flavorings to develop their Lemon Ginger and Lychee Wasabi drinks. However, the desire to challenge consumer palates is most clearly seen in the craft beer industry. Breweries have continuously 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 International Bitterness Units scale (which has a technical limit of 100), measures at an eye-popping 95 IBUs, where in comparison, the average beer on the market comes in at around 29 IBUs.
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BEVSCAPE INNOVATION • Product development & marketing news
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 Purple Stuff have embraced the digital medium as a means of advertising and communication and, in just over a year, have cultivated a following of 150,000 “fans.” Entrepreneurial beverage companies also look to it as a way to reach their consumers where they are – a result of the generational shift to social media. “Facebook was and remains cost effective in comparison to traditional media,” said Tim Lucas, the Chief Marketing Officer of Funktional Beverages, Inc. “Our key consumers 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.”
12 BEVERAGESPECTRUM.APRIL-MAY.2011
In a recent promotional article discussing the benefits of marketing on the site, Facebook touted Purple Stuff as an example of how participating in the Facebook Ads program could quickly raise awareness and exposure for a product. From March 2010, when Purple Stuff first began placing 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 offering an incentive to connect with other people or organizations via the brand, instead of just a consumer-to-brand connection. R.W. Knudsen recently launched a charitable campaign on Facebook to spread awareness of Operation Gratitude, a nonprofit association that supports active military personnel. The company has initially donated 100,000 sticks of its Recharge Natural 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 Facebook ads have created a great deal of interest 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 eventually, regular consumers of Purple Stuff.” Lucas also believes Purple Stuff’s advertising 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.
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CHANNEL CHECK • What’s hot – and what’s not – in stores now. SPOTLIGHT CATEGORY
ENERGY POwDER & SPORTS POwDER 52 Weeks through 2/20/2011
we would venture to say that there are many, many channels unrepresented when looking at these numbers, especially given the availability of these powders in accounts like airports, amazon, Wal-Mart, and every up-anddown-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 powders 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.
ENERGY DRINK MIX 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%
SOURCE: Symphony/IRI. Total food/drug/c-store/mass excluding Wal-Mart.
SPORTS DRINK MIX TOPLINE CATEGORY
VOLUME
52 Weeks through 4/17/2011
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
0.09%
1.17%
2.68%
15.77%
14.04%
9.98%
SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart.
Brand
Dollar Sales
Change vs. year earlier
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%
SOURCE: Symphony/IRI. Total food/drug/c-store/mass excluding Wal-Mart.
14 BEVERAGESPECTRUM.APRIL-MAY.2011
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FRUIT DRINKS
HOT! Lipton Brisk
Brand
Dollar Sales
Change vs. year earlier
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
RTD TEA
HOT! Gold Peak
Brand
Dollar Sales
Change vs. year earlier
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%
-0.83%
Lipton Pureleaf
$160,416,300
0.87%
Fuze Slenderize
$63,131,570
-9.46%
Gold Peak
$131,563,700
80.67%
Private Label
$62,222,160
-6.57%
Diet Snapple
$130,800,200
14.25%
Lipton Brisk
$55,289,340
1,121.41%
AriZona Arnold Palmer
$110,389,400
62.46%
Kool Aid Bursts
$54,464,630
7.61%
Nestea
$106,461,000
-10.89%
Fuze Refresh
$52,037,260
-9.00%
Lipton Diet
$58,575,810
-13.36%
SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 4/17/11
ENERGY DRINKS
NOT! Bug Juice
HOT! Monster Mega Energy
SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 4/17/11
BOTTLED wATER
NOT! Lipton
HOT! Nestle Pure Life
Brand
Dollar Sales
14.38%
Private Label
$985,831,900
4.99%
$1,194,538,000
22.21%
Aquafina
$711,367,900
-0.82%
Rockstar
$436,967,600
13.46%
Glaceau Vitamin Water
$697,586,800
-4.18%
NOS
$219,311,400
13.24%
Dasani
$625,712,400
-3.41%
Doubleshot
$187,623,100
22.30%
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%
Brand
Dollar Sales
Red Bull
$2,316,033,000
Monster Energy
Change vs. year earlier
Change vs. year earlier
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%
Deer Park
$237,796,500
3.23%
$88,759,110
-30.97%
Arrowhead
$200,303,100
-9.36%
Monster Energy XXL
SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 4/17/11
NOT! Monster Energy XXL
IMPORT BEER Brand
HOT! Dos Equis XX Dollar Sales
Change vs. year earlier
SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 4/17/11
DOMESTIC BEER Brand
NOT! Arrowhead
HOT! Keystone Light Dollar Sales
Change vs. year earlier
Corona Extra
$916,836,700
-2.03%
Bud Light
$5,297,338,000
1.22%
Heineken
$565,805,100
-3.20%
Budweiser
$2,092,578,000
-4.70%
Modelo Especial
$290,282,100
16.48%
Coors Light
$1,900,857,000
2.85%
Corona Light
$166,082,000
-2.68%
Miller Lite
$1,686,488,000
-0.42%
Tecate
$161,631,100
-10.11%
Natural Light
$1,111,715,000
-1.44%
Labatt Blue
$116,634,000
-1.55%
Busch Light
$736,623,000
1.16%
Dos Equis XX
$105,678,000
23.13%
Busch
$676,917,900
-1.92%
Labatt Blue Light
$104,744,400
6.97%
Miller High Life
$499,985,300
-2.21%
Stella Artois
$92,977,700
19.51%
Keystone Light
$491,734,500
3.25%
Newcastle
$79,450,240
2.59%
Michelob Ultra Light
$474,170,300
1.86%
SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 4/17/11
16 BEVERAGESPECTRUM.APRIL-MAY.2011
NOT! Tecate
SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 4/17/11
NOT! Budweiser
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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 distributed in bars, nightclubs, restaurants and hotels in the Northeast. For more information, please call (718) 302-4400. Point Brands, LLC has launched iX MiXer, the first mixer that helps prevent hangovers while consuming alcohol. The beverage is a naturally flavored, caffeine-free, lightly sweetened, alcoholic mixer and comes in two flavors, 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 Organic, 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 certified, contains no taurine, no artificial 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 refined sugars, caffeine, preservatives or artificial flavors. It is available nationwide in Whole Foods Market, as well as in select grocery stores, delis, and casual and fine 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 cranberry flavor to its line. HOTLIPS Cranberry
18 BEVERAGESPECTRUM.APRIL-MAY.2011
is produced with Stevens and Yellow River cranberry varieties, 100 percent Northwestgrown 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 information, 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 information, 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 formulated for children and contain no sugar, no artificial flavors or colors, and no aspartame. Pure Water contains 100% pure artesian spring water and Tara Strawberry and Tabby Apple are flavored 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 flavors to its line Elevate Fiber Water. Elevate Fiber has technically proven ingredients to help improve
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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 suggested 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 sugars 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 distributed 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 flavors to its Glass Bottled Iced Tea line. Natural Hibiscus Tea is a caffeinefree 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 flavors contain no artificial flavors, sweeteners or preservatives and are certified gluten free by the Gluten Free Certification Organization and certified kosher by the Orthodox 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 flavor combines lemonade and sweet tea with a peach flavor 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 distributed 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 premium tea, real sugar and natural flavors and contains no artificial colors or flavors. Flavors 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 information, please call (612) 215-3504.
SPIRITS Metropolis Industries is introducing Black Raspberry and Lemon Drop flavors 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 multiflavor 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 flavors to their premixed cocktail portfolio. The company will also introduce 200 mL VNC Mini Shaker Cocktails in four flavors: Mojito, Margarita, Pomegranate Cosmo, and Pacific Breeze. VnC Cocktails are made with 100 percent natural fruit juice and no artificial preservatives, additives, or colors. The beverages 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 information, please call (310) 432-0020. DeKuyper Cordials has launched JDK & Sons O3 Premium Orange Liqueur, a unique blend of sweet Brazilian Pera Orange essential oils and flavors. The liqueur has no artificial colors, flavors or high fructose corn syrup. It is sold in a 750 mL bottle for a suggested retail price of $19.99 and is distributed nationally in retail stores and upmarket bars and restaurants. For more information, please call (847) 444-7516. •
APRIL-MAY.2011.BEVERAGESPECTRUM 19
Brewbound
A BETTER WAY TO EXPERIENCE BEER
By Christopher Furnari
CRAFT BREwERS GET CANNED Metal Packaging Gains Momentum SHAKING OFF THEIR LOWBROW reputation as only having value as a conveyance 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 fastestgrowing craft producers in the country via canned selections like Dale’s Pale Ale.
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 frequently 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 filling 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, fishing and to the beach. Consumers are responding to the increased supply: 2010 IRI data shows that craft beer in cans is up significantly 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 starting 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 revenues 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 Mainebased Baxter Brewing, will rely on cans exclusively as they try to get their products out to consumers – and at the rate canned crafts are growing, their risky decision 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 filling 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. 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 Association. 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’ Association, 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
22 BEVERAGESPECTRUM.APRIL-MAY.2011
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Key Craft Offerings: Deschutes Brewery. As summer approaches, the lighter more sessionable offerings will become available. Deschutes Twilight Summer Ale, a pale ale, checks in at 5 percent ABV and just 35 IBU’s. The beer will be distributed 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.
company will be taking a unique approach to the line. Offering a “deconstructed” 12-pack, Boston Beer will feature five 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
21st Amendment Brewery. San Francisco
based 21st Amendment will be packaging its 100 IBU Hop Crisis for the first time in June. The canned 4-pack, part of the insurrection 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.
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 offering 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.
New Belgium Brewery. The makers of Fat
Narragansett Beer. For the first time in its
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.
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.
Dogfish 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 first 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 distributed 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
24 BEVERAGESPECTRUM.APRIL-MAY.2011
Magic Hat Brewing Company. Everyone knows Magic Hat #9, but for the first time it will be distributed in cans. At 5.1 percent, this “not quite pale ale” is built for easy summer drinking – one of the reasons for the recent addition of aluminum packaging. 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 offerings 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 distributed for a suggested retail price of $7.99.
GERRY’S INSIGHTS
By Gerry Khermouch
THE ENTREPRENEURIAL GENE AFTER GETTING MY NEWSLETTER out in New York the other day, I rewarded 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 coffee – 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 recently opened and, wouldn’t you know it, the owner was perched on a stool, observing his customers’ grazing habits, 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 first 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 entrepreneur: hanging in the store from opening to closing, tracking every aspect of the operation, constantly questioning each of his assumptions. It’s precisely this attention to minute detail that separates true entrepreneurs from those I occasionally deride in my newsletter as “carpetbaggers” whose only interest is the final 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 finding 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 myself 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 already sold two companies (SoBe and Izze) to Pepsi, is making an energetic effort 28 BEVERAGESPECTRUM.APRIL-MAY.2011
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.
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 partowned and distributed by Cadbury’s successor, 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 first 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 first 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 repeating their initial success on the same scale. After all, these guys – as opposed to the carpetbaggers – know the ropes, and delight 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 retailers that first-timers may not get. (I long ago learned to take with a grain of salt distributors’ 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 figure it out. But like Brenner, diligently patrolling his new coffee-and-chocolate emporium, they seem to have mastered that difficult 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 pleasure 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.
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Waking up to
COFFEEFRUIT BY RAY LATIF
BETWEEN THE BEAN, THE CAFFEINE,
BAI
and the flavor, 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 coffee bean. While the shape, look and size of the fruit are reminiscent of a cranberry, it has a flavor that is sweet and rather nondescript, 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, coffeefruit has been the subject of a great deal of talk in natural food circles with claims of it providing far greater antioxidant benefits 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 measures the total antioxidant power of foods and beverages. Utilizing this method, coffeefruit is often found to provide 30-40 times the benefit 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. Consumers 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.
Less than two years old, Bai - the Chinese 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 benefits and antioxidants in coffeefruit, 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 flavors before Bai was finally 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 flavors. But perhaps most important in Bai’s development was not the taste or ingredients, but the design of its relatively 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 consumers wanted a low calorie/low sugar
30 BEVERAGESPECTRUM.APRIL-MAY.2011
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 suggests, 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. “Obviously, I didn’t want to launch a product that might have hurt the brand, but when we came up with a Dragonfruit flavor for Bai5, I couldn’t believe how great it tasted. That flavor has become our number one seller, and Bai5 changed our business.” Bai now comes in eight flavors – 4 original and 4 low calorie - each tinged with
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names of exotic coffee growing regions like Panama Peach, Mango Kauai and Congo Pear. And while Bai’s initial marketing focused less on the benefits of coffeefruit and moreso on its look and taste, the company has very recently introduced point of sale marketing on Bai’s functionality declaring, “The secret is out.” Still though, Weiss makes it clear that Bai is “not a brand business.” “We’re a sales and distribution business,” 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 creating 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) affiliates in New York, New Jersey, Massachusetts and Connecticut. It also recently signed a deal with the Honickman 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 member; former U.S. Senator and Starbucks director, Bill Bradley; and Rohan Oza, the marketing chief at glaceau. And as the coffeefruit beverage category 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 RED Though a relative newcomer in the beverage 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
32 BEVERAGESPECTRUM.APRIL-MAY.2011
forms - to several consumer product markets. In 2011, the company introduced Kona Red Antioxidant Juice, a coffeefruitbased 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 synergistically provide higher levels of antioxidants 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 finds even more compelling. “It doesn’t necessarily matter how high an ORAC score is, which, by the way, can easily be manipulated,” said Shaun Roberts, the founder and CEO of Kona Red. “The most important part of our product is bioavailability, which measures the absorption of antioxidants into the body. Our coffeefruit 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 coffee 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 agreements 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 nationwide 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, specifically, 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 proprietary extract.”
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ENTREPRENEUR’S EYE
By Brent Sonnek-Schmelz
wHAT I’VE LEARNED...SO FAR
WELCOME TO ENTREPRENEUR’S Eye, a column dedicated to expressing the viewpoint of the beverage marketers whose growth and positioning often comprise much of the coverage base for this magazine. I’m Brent Sonnek-Schmelz, the CEO of RelaxZen, and I’ll be writing the first few columns, although the management 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 independent brand. This column will fill that void. What you will find here over the coming months are my own observations about
34 BEVERAGESPECTRUM.APRIL-MAY.2011
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 being 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, education, publishing, business process outsourcing, 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 everyone 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 difficult, 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 critical 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 judgment and countless changes in direction, I feel confident 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 beginning. All of it will be wasted. But when it is time to spend money, be ready to move very quickly and aggressively. Spending money too early, before customers can buy your product or before you have a solid message, never generates a strong return on investment. But, if you keep lots of dry powder around, when it’s time to flip 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 production runs, raising capital, hiring, getting product on the shelves of retailers, receiving payment and everything else. Planning becomes more difficult 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 first 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 fixate on being first to market. It does not matter. Was Google first 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.
IN ZONE GROWS IN AGES AND STAGES BY 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.
36 BEVERAGESPECTRUM.APRIL-MAY.2011
In Zone, a kid-centric beverage company that had thrived on the intersection of clever packaging and licensed properties 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 entrepreneurial ventures, the energy to get things off the ground and the know-how to get things to fly 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 flying Superman or a baleful Clifford, the Big Red Dog, Scott wasn’t able to figure out a route to market strategy that could reconcile the line’s hefty licensing and manufacturing costs with the necessary volume. Enter a new marketing 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 standpoint,” said the longtime CPG executive, who had worked for everyone from Kellogg to GP Newell. “But the company 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 distribution 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 38 BEVERAGESPECTRUM.APRIL-MAY.2011
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 looking 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,
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, wellplaced shelf set of superheroes can cut promotional costs to the bone. Nevertheless, 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 In an attempt to sit at “the perfect intersection of healthy and fun,” In million upon reZone reformulated and is now 100 launch to $75 million percent juice with reduced sugar last year; the company making it easier for parents to say “yes” to their kids clamoring for a is profitable, accordBatman topped Belly Washer. ing to Hodgkins, and is trying to innovate by launching more functional SKUs like with even more expected next year. shelf-stable milks and sports drinks. While the bottle toppers remain the key While dabbling in functionality has driver for the kids to yank on parents and helped to sink other products, In Zone scream until they get what they want, the knows that any variation will come in contents have been adjusted “to make it within a tight range – the ages of 1 to 10. easier to say yes,” Hodgkins said. The brand, as its owners like to point Part of that adjustment came when the out, is one of the few beverage companies product was aligned to provide sizes and whose sole purpose is to make products formulations that are more appropriate that only appeal to kids. It’s hard to imagfor three different groups of kids: the todine an adult clamoring for a limited edition dler (age 1-3), the preschooler (3-5), and Lightning McQueen juice, for example – the grade-schooler (5-10). While it’s easy although knowing that there’s only apple to identify characters geared toward each juice revving his engine can make ‘getting group, the nutritional aspects had been to yes’ a lot easier for the parent. And now given short shrift. Twelve ounces of sugar profits are growing to the point where if water might be okay for a 10 year-old, but the product is aimed at kids, the business it will send a 4 year-old through the roof. itself is getting to be pretty mature, indeed. So now the youngest group gets 4 oz. of “This is our coming out party,” “Tummy Tickler Tots,” a reduced-sugar Hodgkins said. “Our growth rate is high juice, while the preschool contingent gets and it’s not driven by promotion. We’ve 6 oz. of 100 percent juice. At the more roreached the point where we’ve got critical bust Belly Washer stage, the grade-schoolmass. And there’s a vision, a commitment, ers get 12 oz. of juice under a character and a passion for the business.” •
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BRAND NEWS: KIDS BEVERAGES
BRAND NEwS Uncle Matt’s is introducing 6 oz. kid-sized servings of its not-from-concentrate Florida orange juice. Available in Whole Foods and certified USDA organic, the product is aimed for lunchboxes nationwide and will be portable 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 contained in a 59 oz. bottle, it will be marketed to kids and families. Lifeway. Introducing the new flavor “Strawnana 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 flavors while keeping sugar levels low. GT Beverage Company. Started by a father of five, 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 fortified with 100 percent daily value of vitamin C as well as 25 percent daily values of vitamins B6 and B12. Tum-E Yummy’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 pouches 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 allnew line of vegetable and fruit juices with reduced sugar and fewer calories. The line will feature Apple Mango and Strawberry Banana
40 BEVERAGESPECTRUM.APRIL-MAY.2011
flavors. 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 specifically with toddlers and lower sugar content in mind. Flavors include Apple + Carrot, Peach + Purple Carrot, Bannana + Carrot and Blueberry + Purple Carrot. WAT-AAH! Launching a new fifth flavor into its lineup this spring, Wah-Aah! features a screaming boy logo and a bright neon color scheme. WahAah! is an immune boosting ultra pure water with zinc and contains no sugar and no calories. Zimbi flying-bottle juice drinks, the only bev-
erage packaged in an out-of-this-world flying 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 convenience stores and grocery stores throughout New York, Vermont, Oregon, Idaho, Montana, Wyoming, Nevada, Utah, Colorado, and Arizona. Zimbi has also improved its aerodynamic 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 label features the Zimbi alien eye. Nestle Pure Life is launching the Hydration
Movement, an online program that will educate 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.
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THE CONTENDERS With 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
ILLY ISSIMO: COKE’S GOBAL STAB AT A COFFEE SOLUTION BY: KASIA PILAT
In most David vs. Goliath scenarios, the world
It is a somewhat uncharacteristic move for a beverage
renowned 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 finds 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 expectations 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 better 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 flavoring 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 certified 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 flavors. 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)
behemoth to take it slow and quiet with one of its latest ventures, 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 channels. 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 fits that description? Italy’s own illycaffè. (continued on page 44)
42 BEVERAGESPECTRUM.APRIL-MAY.2011
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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 selfheating 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 redemption, 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 consumption sales for Polar Beverages, stressed that education and exposure would be the key to success for Puck’s new coffee.
“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 sampling, 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 because 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 marketing to my backyard …I don’t have enough local pull to convince buyers 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.”
44 BEVERAGESPECTRUM.APRIL-MAY.2011
Choosing illycaffè as the partner may have been the best possible 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-related 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 redefine 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 believe 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 coffeebased 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 November of 2010 by VP of Marketing at Illy Caffe North America Beverly Stotz, is also unique.
“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 graduatelevel 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 CocaCola 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,
Similarly, instead of traditional marketing programs, marketing 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 awareness 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 consistent presence. It’s also measured by the sales turns based on illy issimo’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 measurements, are available, as are the tools to measure viral influence
near Washington, D.C. The brand is also prominently featured in niche coffee shops such as Caffe Milano in downtown Tucson, Ariz. Of course, it doesn’t hurt that illy issimo has partnered 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.
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.
APRIL-MAY.2011.BEVERAGESPECTRUM 45
Retailers who are in the know can add a strong variety of functional products into a tiny footprint. >>>
46 BEVERAGESPECTRUM.APRIL-MAY.2011
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-notquite-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 supplements: 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
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 profitability down to centimeters at the counter, that means that retailers who are in the know can add a strong variety of functional 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-
ing Nuun and the aforementioned Propel Zero, as well as a fair number of protein products. Ajmera’s Coconut Water powders 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 features a combined wet/dry mixing mechanism. Finally, there’s VIA, a hot drink that might be beating them all in terms of relevance. 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. •
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BRAND NEWS: POWDERS
BRAND NEwS Nuun & Co. is announcing fi ve new fl avors into their lineup of electrolyte hydration beverages: 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 locations that carry only natural products. Click is fortifi ed with 15 grams of casein protein and 23 vitamins and minerals.
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line, is an all-natural coconut water powder. Featuring three flavors, 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 fight summer traveling ills, Pre developed “to GO” Synbiotic Drink Mixes to stimulate the body’s immune mechanism when travel is imminent. Classified TSA compliant, “to GO” packets are .25 ounces and contain 2.5 billion probiotics in each serving. “to GO” comes in four flavors and is 20 calories per serving. Propel Powder has been reformulated into
ginseng powder drink with no sugar, no carbonation, plenty of vitamins B and C, and only 10 calories per pack. Helix has also sponsored Matt Waldin Racing in the 2011 Formula Drift Race series in Long Beach California.
Propel Zero Powder, which is enhanced with vitamins. Flavors include Berry, Grape, KiwiStrawberry, Lemon and Rasberry Lemonade while “with Calcium” flavors are Cherry Lime with Calcium, Citrus Punch with Calcium and Lemonade with Calcium.
Jade
Inc.
Beauty Foods. Introducing its flagship prod-
Named as one of “The Dieline’s Latest Top 10 Package Designs,” Jade Monk will be introducing a fortifi ed green tea in 2011 that contains 137 times more antioxidants than traditional green tea and the highest percentage of L-Theanine on the market today, according to the press release.
uct, Beauty Foods has formulated a beautyenhancing hot chocolate drink mix supplement 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 includes all-natural ingredients.
Helix Energy is introducing an energy and
Monk
Beverage
Company,
Crystal Light is introducing three new flavors
into its natural line, Crystal Light Pure. Their new Tropical Blend, Mixed Berry and Lemonade fl avors are part of a line that feature no artificial sweeteners fl avors or preservatives. Sweetened by sugar and Truvia, Crystal Light Pure has just 15 calories per serving.
Vitalyte. Vitalyte is introducing a new prod-
Zipfizz Corporation will be adding distribu-
Emergen-C. With a reformulated Immune+ product, Emergen-C is promoting its immunity fortification system. Featuring vitamin C and D, zinc, manganese and other nutrients, this product fizzes in water and has no artificial sweeteners, flavors, colors or preservatives. Immune+ is currently available in two flavors — their original Citrus and the new Blueberry-Acai.
tion of an Orange Creamsicle flavor to their existing lineup. New distribution will include Albertsons, Ralph’s, REI, and BJs Wholesale. Zipfizz also features a new and improved formulation with the antioxidant Kona Red. Maxim / Ajmera, Inc. Reva Natural, intro-
duced by Maxim/Ajmera Inc. as a new product
48 BEVERAGESPECTRUM.APRIL-MAY.2011
uct called Stick Pack Boxes that contain 10 sticks of their existing flavors, Zesty Orange, Fruit Punch, Lemonade, Cool Citrus and Grape. Vitalyte’s products promote hydration and electrolytes.
PROMO PARADE
PROMOTIONS, EVENTS, AND SPECIALS FOR THE INDUSTRY
Jones Soda
Cheerwine
Jones Soda and K2 Sports, both Seattle based companies, have announced a two year partnership that will include one-of-akind Jones Soda skis and snowboards, as well as joint marketing 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 building on its current distribution with plans to be in all 50 states by the company’s centennial in 2017. A cherry flavored soft drink that is an icon of the south, the brand’s expanded distribution 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
Hershey Hershey’s Milk & Milkshakes will be the official sponsor of Hoop It Up, the world’s largest 3on3 basketball tournament. The contest will involve scoring as many points as possible from six locations on the court, and the first place winner will receive 40 percent of the proceeds. The promotion will introduce 40,000 contestants and 200,000 spectators to Hershey’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 Hershey’s Strawberry Milkshake, at retailers nationwide.
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Bud Light will renew its sponsorship of Ultimate Fighting Championship 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 aluminum bottle that will be the first to bear the UFC logo.