Beverage Spectrum March 2008

MARCH 2008

DETOX DRINKS the recipe for excess ALSO THIS ISSUE: LEGISLATING WATER THE NEW JONES SODA RED BULL’S COLA EXPERIMENT 2008 ENERGY DRINK GUIDE ENCLOSED COMPREHENSIVE 60-PAGE GUIDE TO THE ENERGY DRINK CATEGORY

Thank you for making us #1.

You’re number one, too. Thanks to our retail partners, distributors and all of America for making FIJI Water the best-selling premium bottled water in the U.S.* We’re proud to be more than just the best-tasting water, but also the top-ranking premium bottled water. Thank you for your partnership and support. FIJIWATER.COM *Source: IRI FDMx 52 Wks Ending 2/3/08 & IRI Convenience Stores 52 Weeks Ending 12/30/07; Volume and Dollar Sales.

MARCH 2008

vol.

6 :: no. 2

38

22

Cover Story

22 :: DETOX DRINKS

Departments

Anhueser-Busch Enters the Octagon

The recipe for excess.

Features

8 :: BEVSCAPE

10 :: CHANNEL CHECK We Go Deep In Sports Drinks

28 :: BOTTLED WATER Recycling, bottle bills and a growing category.

14 :: NEW PRODUCTS

40 :: BRANDS IN TRANSITION

Naked’s Probiotics

Cranberry Energy and

A new playbook for Jones Soda.

48 :: PROMOTION PARADE Bud Light Presents a New Competition

42 :: NIGHTCLUB AND BAR IN REVIEW Roundup from a crazy show in Las Vegas

Columns

4 :: THE FIRST DROP Still listening, still talking 6 :: PUBLISHER’S TOAST Our eyes turn to packaging 38 :: GERRY’S INSIGHTS Red Bull’s cola experiment

Beverage Spectrum 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. One Mifflin Place, 3rd Floor, Cambridge, MA 02138. Periodicals postage paid at Boston, MA and additional mailing offices.

POSTMASTER: Please send address changes to Beverage Spectrum Magazine, Subscriber Services, One Mifflin Place 3rd Floor, Cambridge, MA 02138-9917.

MARCH 08 :: BEVERAGE SPECTRUM

3

THE FIRST DROP

STILL LISTENING, STILL TALKING

e’ve got a pretty diverse issue this month so I’ll try not to take too much of your time before you jump in and start reading. But before I do that I wanted to thank you for supporting this magazine during its first five years.

We wouldn’t exist without the readers and advertisers who find value in what we do.

It’s an exciting time in the beverage industry, and in the story mix here you’ll find that the odd strands we’re looking at here weave a pretty exciting and vibrant picture of the drinks that are on the market today. On the one hand you’ve got the most basic of beverages, water, and on the other you’ve got bit players designed to remove liver toxins.

You’ll find our energy drink guide – like the category, it’s still going strong, now in its third edition – and standing in contrast to it is a story on where Jones Soda is going, as its chief products, CSDs, are moving through quicksand.

In addition to this month marking the fifth anniversary of the launch of Beverage Spectrum, this issue also marks my third anniversary as editor. It’s been pretty amazing to look at some of the changes that have taken place: in my first issue, we ran a photo of a bunch of energy

4

BEVERAGE SPECTRUM :: MARCH 08

drinks chasing a giant bull (the symbolism was apparent). Now, Monster Energy is practically neck-and-neck with Red Bull in leading the energy category.

We also looked hard at sugar-sweetened CSDs, proposing that there might be room for them on store shelves. We’ve seen that idea advance: in addition to an ongoing backlash against High Fructose Corn Syrup (we see dozens of product introductions that tout their lack of HFCS every month, including the just-announced Red Bull Simply Cola) there’s been a recognition that consumers are interested in all things natural, including real cane sugar.

At the time, we pointed out that Honest Tea’s Seth Goldman and Boston Beer’s Jim Koch were both thought-leaders when it came to figuring out how beverage lines were evolving. Since then, the microbrews long championed by Koch have kept the American beer industry afloat, while Goldman’s tea company recently accepted a minority investment stake from the Coca-Cola Co. I’m not listing this stuff to point out whether we were right or wrong – as with the Red Bull race, many of these ideas haven’t reached the finish. But the point I’m trying to make is that it’s

important to be aware of where the industry has been and where it’s going. We think hangover relief beverages are part of that mix, which is why we’ve added coverage of them this month.

Next month we scrutinize another emerging product type: the energy “shot.”

We think in three more years these kinds of products will still be relevant, as are many of the discussions that we were covering three – or even five – years ago. And as always, we’ll be working hard to make sure beverage retailing has an ear – and a voice – in the conversation.

PUBLISHER’S TOAST

THE WHOLE PACKAGE

PUBLISHER Barry J. Nathanson bnathanson@bevnet.com EDITOR Jeffrey Klineman jklineman@bevnet.com ASSOCIATE PUBLISHER John McKenna jmckenna@bevnet.com ART DIRECTOR Matthew Kennedy mkennedy@bevnet.com GRAPHIC DESIGNER Amadeu Tolentino atolentino@bevnet.com ASSISTANT EDITOR Matt Casey mcasey@bevnet.com

received more e-mail about last issue’s column on the taste of beverages (It’s the Taste, Stupid!) than just about anything I’ve written over the years. It seems I touched a raw nerve with retailers, distributors, wholesalers and especially beverage marketers. Most were in agreement that, when it comes to many new brands, taste has not yet caught up with intent and functionality.

Some marketers, however, got pretty defensive.

Even though no new brands were named, many of the folks who usually send products to my office assumed I meant them. I actually had a decrease in new brands or prototypes sent in – and that makes me think I might have struck a vein of insecurity with some folks.

But you know me, I’m a lover, not a fighter.

So in an effort to win back your faith that I can cheerlead as well as I goad, I will now give equal time to one of the best aspects of the industry right now: Packaging.

Packaging has been a shining star in my “golden age of beverages.” A walk through any retail operation gives a plethora of shapes, sizes, types and stunning graphics. The primary and secondary packages are a sight to behold.

My old friends at Perception Research deem that the consumer spends less than two seconds looking at any given product (those sly devils, they mount cameras on hats to catch the shoppers’ habits!). So you need to grab them fast; current arrays do just that.

I implore you: Peruse the New Products section of Beverage Spectrum to see that depth and breath of the unique packages out there. Every issue brings exciting and original packages that

6

BEVERAGE SPECTRUM :: MARCH 08

might grace the shelves of our retailers. As I read, I feel like a kid in a candy store.

Graphics have evolved into a signature element for so many products – look at what PepsiCo did last year with its rotating cans! The growth of our ability to capture the essence of a brand and its message is astounding. Additionally, the clarity of multi-pack secondary packaging, especially in the beer arena, is a sight to behold. The labels on the primary packaging across all categories are stunning. I give special kudos to marketers of spirits and bottled water. The amount of proprietary bottles out there is vast, with each delivering a unique positioning message. Caps and closures have made strides to help define products, not just enclose their contents.

So the packaging realm that is running on all cylinders today. It makes the shopping fun and gives it clarity. Keep up the great work. And please, guys, start sending me drinks again?

PRODUCTION MANAGER Adam Stern astern@bevnet.com BUSINESS MANAGER John Schinn jschinn@bevnet.com SUBSCRIPTION INQUIRIES Adam Stern astern@bevnet.com 617-715-9679 ONLINE RENEWALS & CHANGES www.bevspectrum.com/subscribe ARTICLE REPRINTS (500 copies or more) FosteReprints 800-382-0808 x142

BEVERAGE SPECTRUM PUBLISHING INC. CHAIRMAN John F. (Jack) Craven jack@bevnet.com PRESIDENT & EDITORIAL DIRECTOR John Craven jcraven@bevnet.com

EDITORIAL 1 Mifflin Place, Suite 300 Cambridge, MA 02138 ph. 617-715-9670 fax 617-715-9671 ADVERTISING 1123 Broadway, Suite 210 New York, NY 10010 ph. 212-647-0501 fax 212-647-0565

Barry J. Nathanson, Publisher

BPA Worldwide Member, June 2007

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Bevscape

WHAT’S HAPPENING ACROSS BEVERAGES

DEPT. OF PROGNOSTICATION We hate to say we told you so… but it looks like the functional beverage explosion is starting to eat across categories.

Coke’s vitaminwater, for example, poses the chief market-share threat to Pepsi’s Gatorade, according to a Deutsche Bank analyst. But Gatorade’s G2 may help the hydration drink giant fend off competitors.

Deutsche Bank analyst Marc Greenberg said Gatorade has become increasingly reliant on “heavy users” while more casual sports drink consumers drifted to other brands – particularly vitaminwater.

Greenberg said during a Thursday afternoon conference call that Gatorade is still dominant, and retailers still consider it a “cornerstone brand,” but the brand’s growth lagged behind that of the category in all four quarters of 2007. Gatorade even saw their volume shrink in the second quarter of last year.

Gatorade, he said, needs to find “ways to leverage the brand in new ways” and “new occasions and ways to broaden in a broadening category.”

G2 – Gatorade’s lower-calorie fortified water –could help. February supermarket scanner data showed that G2 helped Pepsi rally its share of the sports drink market and grow its volume by 11.6 percent over their volume at the same time last year, according to Morgan Stanley Analyst Bill Pecoriello.

However, Greenberg had lower hopes for Gatorade’s Tiger line extension, built on a partnership with Tiger Woods. The analyst said he not only feared that aiming a product directly at golfers could divide Gatorade’s product line, but could also divide the hydration drink segment.

WORST OF TIMES AT COTT Poor Brent Willis. The erstwhile CEO of Cott Corp. never really had the chance to earn his salary at the private-label drink maker. Not to say he didn’t MAKE a nice salary – $3.6 million for about a half-year’s work 2006, according to the Canadian Broadcasting Corp. – but earn it? If you look at what’s been happening at Cott lately, not so much.

And the company decided that Willis wasn’t quite worth the investment, either. He was shown the door in the wake of a disastrous 2007 and an even worse start of the year, in which the company lost shelf space and merchandising support at key account Wal-Mart.

By the time Willis was replaced by director David Gibbons, Cott shares were worth about 1/10th of their 52-week high of $19.70. The company has struggled in the wake of consumer tastes shifting away from its bread-and-butter CSDs. While it moved to sign up UFC star Rampage Jackson (pictured at left) for an energy drink and attempted to market tea and water, the optimistic view of Willis – he preached the company’s international tendrils – couldn’t reverse the gloom and doom that has dogged Cott for years.

8

BEVERAGE SPECTRUM :: MARCH 08

TRADING UP SLOWS DOWN While spirits, wine and beer continue to grow, that rate of growth is dropping, according to a study by the Beverage Information Group.

Wine and spirits, which have led a decade-long overall increase in beverage alcohol consumption, only went up 4 percent and 3.2 percent, respectively, in 2007 – way off previous year advances. Beer also grew, but at 1.2 percent.

The report blamed the weakening U.S. economy as the major contributor. That slowdown appeared to be weakening on-premise sales more than off-premise, but if the country continues to spiral toward a recession, even the lower-markup off-premise channels may be affected.

ANHEUSER-BUSCH ENTERS THE OCTAGON Talk about moving into the sweet spot. Anheuser-Busch has signed on as the exclusive beer sponsor for the Ultimate Fighting Championship. The move KOs previous sponsor, Mickey’s Malt Liquor.

Bud Light's three-year deal with Zuffa, LLC, owner of the UFC brand, moves the beer into a fast-growing spectator sport.

"UFC has developed a huge following in recent years and is wildly popular with the 21-34 year old fans we want to reach," said Tony Ponturo, vice president, global media and sports marketing, Anheuser-Busch, Inc. "The number of people attending live events, buying the pay-per-views and talking about UFC around the water cooler continues to grow. It's just a great place for us to be."

But it’s also one of a pair of big deals that are buoying Mixed Martial Arts as a sport – competitor league EliteXC will be showing featured fights during prime time on CBS television. While the deals are unrelated and the leagues compete, the overall effect is to raise the profile of MMA. "Landing Anheuser-Busch and Bud Light is huge for us, our fighters and especially our fans," said Dana White, UFC president.

"We've got the number one selling beer in the world and one of the top marketers in all of sports as our sponsor. If our TV ratings, pay-per-view buys and venue sell-outs weren't enough, this definitely cements UFC as a major player in sports business."

AP PHOTO MARLENE KARAS

MARCH 08 :: BEVERAGE SPECTRUM

9

Channel Check

march 2008 SMOOTHIES

SPOTLIGHT CATEGORY

Sports Drinks 52 Weeks ending 2/24/2008 We are all for line extensions, but does anyone out there have any idea what Gatorade Mainline is? We only ask because we’ve never heard of it, but it’s outselling Tiger. Which has to be very upsetting, if you’re Gatorade, which just spent the house on Tiger. At a time when our good friend Dean Kamen just modified his Segway personal transport system for golfers, the sweat factor for that sport just went down even further. Fore!

Category Total

Dollar Sales

Change vs. year earlier

$1,640,383,000

4.2%

Gatorade

$631,574,000

-9.1%

Powerade

$250,792,900

18.5%

Gatorade Rain

$158,434,700

21.1%

Gatorade Frost

$142,170,900

-1.7%

Gatorade All Stars

$134,871,200

18.1%

Gatorade Fierce

$89,942,660

-6.4%

Gatorade X Factor

$80,369,760

-16.3%

Gatorade AM

$72,419,160

1,152.4%

Gatorade G2

$23,005,330

N/A

Powerade Option

$19,635,530

18.8%

Gatorade Xtremo

$11,714,170

30.9%

Private Label

$9,288,071

22.2%

Gatorade Mainline

$7,524,708

N/A

Accelerade

$3,142,951

-68.8%

Heading Up: Gatorade AM SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

BOTTLED WATER $5,217,938,000 8.1%

TOPLINE CATEGORY

VOLUME

52 Weeks ending 2/24/2008

ENERGY DRINKS $806,551,600 25.8%

BEER

SPORTS DRINKS

$8,969,109,136 4.1%

$1,715,862,000 4.9%

BOTTLED JUICES

TEA/COFFEE

$3,789,412,000 2.4%

$1,470,193,000 16.7%

SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

10

BEVERAGE SPECTRUM :: MARCH 08

march 2008

Channel Check

RTD TEA

Dollar Sales

AriZona

$293,270,300

Change vs. year earlier

ENERGY

Dollar Sales

Change vs. year earlier

6.4%

Red Bull

$349,869,100

21.6%

$139,991,400

38.4% 23.6%

Lipton

$274,273,000

47.6%

Monster

Snapple

$132,873,800

12.5%

Rockstar

$97,503,740

Lipton Brisk

$88,137,160

2.4%

Full Throttle

$43,356,780

-8.0%

$29,346,620

16.9%

Diet Snapple

$83,345,500

-2.9%

Amp

Nestea

$66,143,790

31.9%

SoBe No Fear

$24,080,220

-33.8%

Lipton Iced Tea

$45,662,930

-20.4%

Monster XXL

$14,498,790

114.7%

SoBe Adrenaline Rush

$14,320,240

-21.8%

Rockstar Juiced

$12,955,140

248.7%

Amp Overdrive

$10,543,270

2,714.7%

Private Label

$36,158,960

12.4%

Nestea Enviga

$29,509,830

596.9%

Lipton Pureleaf

$24,834,590

N/A

52 Weeks through 2/24/08 SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

Heading Up: Amp Overdrive

RTD COFFEE/CAPPUCCINO

Dollar Sales

CONVENIENCE/PET STILL WATER

Dollar Sales

Frappuccino

$191,001,800

6.6%

Private Label

$665,827,000

21.5%

Doubleshot

$25,817,410

-8.2%

Aquafina

$507,128,300

-1.0%

Starbucks Iced Coffee

$14,084,940

40.1%

Dasani

$448,575,700

0.0%

$425,631,300

125.0%

Heading Up: Enviga

Change vs. year earlier

52 Weeks through 2/24/08 SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

Change vs. year earlier

Bolthouse

$12,243,100

21.5%

Glaceau Vitaminwater

Doubleshot Light

$11,034,640

28.9%

Poland Spring

$246,581,400

-5.6%

Propel

$192,242,200

-1.4%

Arrowhead

$184,197,600

5.0%

Godiva Belgian Blends

$8,598,640

95.4%

Cinnabon

$2,129,647

1,411.2%

Private Label

$1,575,670

921.1%

Deer Park

$140,962,900

-1.4%

$728,217

162.5%

Nestle Pure Life

$124,100,400

32.8%

Crystal Geyser

$108,800,500

11.2%

Hillside Starbucks Cappucino

$590,469

65,332.3%

52 Weeks through 2/24/08 SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

Heading Up: Glaceau Vitaminwater

IMPORT BEER

Dollar Sales

DOMESTIC BEER

Corona Extra

$483,936,384

Heading Up: Cinnabon

Change vs. year earlier

52 Weeks through 2/24/08 SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

Dollar Sales

Change vs. year earlier

-1.4%

Bud Light

$1,451,717,888

3.3%

$747,077,504

3.5%

Heineken

$321,705,728

5.3%

Miller Lite

Corona Light

$134,499,072

7.2%

Budweiser

$738,134,336

-3.5%

Tecate

$95,462,272

11.5%

Coors Light

$664,185,088

6.0%

Heineken Light

$73,540,968

24.1%

Natural Light

$296,983,904

1.0%

Modelo Especial

$61,353,712

12.9%

Busch Light

$220,814,720

4.4%

Newcastle

$52,913,748

8.2%

Michelob Ultra Light

$212,028,768

4.2%

Guinness Draught

$51,032,192

5.5%

Miller High Life

$181,333,024

3.2%

Labatt Blue

$49,438,152

-0.9%

Busch

$171,693,968

1.1%

Becks

$44,606,104

-11.4%

Miller Genuine Draft

$160,060,160

-7.0%

Heading Up: Heineken Light

52 Weeks through 2/24/08 SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

12

BEVERAGE SPECTRUM :: MARCH 08

Heading Up: Coors Light

52 Weeks through 2/24/08 SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

2, 0 0 0 Y E A R O L D K N OW L E D G E O F H E A LT H .

D I S C O V E R E D A N E W.

Carpe Diem has combined this age-old

Carpe Diem Ginkgo is a green

knowledge handed down to us from ancient

tea drink with dextrose and

cultures with great tasting drinks. Which

Ginkgo extract that improves

means, you are drinking with a purpose.

concentration and receptiveness.

Worshipped in ancient Asia as a “sacred tree�

Carpe Diem Kombucha is a refreshing drink

and praised for its exceptional powers of

that is produced by fermentation

rejuvenation, the Ginkgo is still considered today

using lactobacilli and Kombucha

as a source of inspiration and mental power.

effects on both metabolism and

Carpe Diem Kombucha and Carpe Diem

intestinal activity. In ancient China, the Zen

Ginkgo are both 100% natural, contain no

masters cherished it for its holistic effect on

artificial colors or sweeteners and have no

body and soul. Today, Kombucha is considered

preservatives. Available at most Whole Foods

a true elixir of life and beauty from within.

stores nationwide.

carpediem.com

cultures and has harmonizing

NEW PRODUCTS ENERGY Red Bull has introduced the 16.9 oz. can size as a permanent product in the Red Bull Energy Drink family. This product will be sold nationwide at major grocery, convenience, drug and mass retail stores. The price point will remain the same as the 16.9 oz. Champions of Red Bull cans ranging between $2.99-$3.49 per can. Red Bull Sugarfree Energy Drink 16.9 oz. will also be joining the family in the first quarter of 2008. For more information, contact Red Bull USA at (310) 460-5344.

Ocean Spray is introducing Cranergy to help solve the nation’s energy crisis as a naturally energizing juice drink. It contains real fruit juice blended with the natural energizer green tea extract, a natural source of caffeine; five B-vitamins (B2, B3, B5,B6, B12); and vitamin C. With only 35 calories per eight-ounce serving, Crangery has 50 percent fewer calories than traditional energy drinks. This product comes in two flavors: Cranberry Lift & Raspberry Cranberry Lift, and two sizes, a 46 oz. bottle and a 12 oz. 4-pack, both of which carry an MSRP of $3.99. For more information, call (508) 946-7185.

Playboy and Play Beverages LLC have launched Playboy Energy Drink. With subtle notes of fruit and vanilla, this proprietary formula contains ginseng root, guarana extract and damiana leaf, ingredients that are believed to stimulate energy levels. Available in two varieties, regular and sugar-free, Playboy Energy is now available in the Boston area and will roll out to Miami, Las Vegas and Los Angeles this March. Playboy Energy Drink is packaged in an 8.4 oz. black can, made distinctive by the famous Playboy Rabbit Head Design and colors denoting regular (glowing orange) or sugar-free (glowing blue). Suggested retail price is $1.99 for an individual serving, with multi-packs and a 16 oz. serving size on the horizon. For more information call ((310) 550-7776.

Deep Throat Energy Drinks and Arrow Products Inc. have announced the official launch of Deep Throat Energy Drink. With a subtle taste of apple and grape, this proprietary formula contains ginseng root, guarana extract and 100 percent of the RDA of Vitamin C. Deep Throat Energy drink is now sold in the Las Vegas area and will roll out to Northern California and Los Angeles this spring.

This product is packaged in an 8.4 oz. yellow can, modeled after and made distinctive by the famous

14

BEVERAGE SPECTRUM :: MARCH 08

Deep Throat movie poster design with Linda Lovelace. For more information, call (818) 235-7799.

JUICE Apple & Eve has announced that it has expanded its popular Sesame Street line of juice boxes with the launch of new Sesame Street Organics 100% Juice Boxes, an all-natural, organic 100 percent fruit juice product. These juices are fortified with calcium and contain a full day’s supply of Vitamin C, and will be available in three favorite flavors: Big Bird’s Apple, Elmo’s Punch and Ernie’s Berry. The Organic line will showcase each of the three Sesame Street characters dressed as a farmer – highlighting the “fresh from the organic farm” spirit of the new products. In addition, Sesame Street Organics will be packaged in kid-friendly 125 ml.

(4 oz.) juice boxes – the recommended beverage size for kids ages 2 to 5. These products will be sold both in individual single-flavor 4-packs priced at $1.69, as well as in 36 count Club Store Variety Packs priced at $10.99, which will offer a combination of all three flavors. They will be available in supermarkets, club stores, health food stores and retail outlets across the country, including Whole Foods, Toys R Us and Costco. For more information, call 516-222-0236.

R.W. Knudsen Family is partnering with The Berenstain Bears for the launch of Sensible Sippers Organic Juice Boxes, available nationwide this fall. Sensible Sippers are certified 100 percent organic, and they come in convenient and appealing packaging that features classic Berenstain Bears characters. Sensible Sippers are 50 percent juice and 50 percent water, reducing the amount of sugar take in in each serving without compromising on taste. Kids will enjoy the fun new flavors, including Fruit Punch, Banana, Apple and Mixed Berry. These juices contain 40 percent fewer calories than regular boxed juices. Sensible Sippers are portion-controlled juices, available in nonbreakable, 4.23 oz. boxes. Sensible Sippers are available nationwide at Whole Foods Market. The suggested retail price for an eight-pack of Sensible Sippers juice boxes is $3.99-$4.49. For more information, call (303) 449-2108.

Coca-Cola North America has announced the addition of Minute Maid Pomegranate Tea and Minute Maid Pomegranate Lemonade to its line of Minute Maid Enhanced Juices. The new prod-

ucts will be available in supermarkets and other retailers nationwide beginning this month. These products are 12 percent juice and are fortified with Vitamins C and E to help support a healthy immune system. Each new beverage offer Vitamins C and E, which help defend the body’s cells and work to protect the body by fighting free radicals.

All Minute Maid Enhanced Juices and Juice Drinks are offered nationwide in distinctive premium 59 oz. PET bottles, featuring an attractive contemporary design and “easy pour” side grip. The product launch will be supported in 2008 with a fully integrated marketing program that includes national print and television advertising, point-ofpurchase displays, public relations and national in-store sampling programs. For more information, call (404) 676-1070.

A blend of organic fruit and vegetable juice concentrates and purified water, First Juice has been carefully designed with the right amount of flavor for young, developing tastebuds, with the intention of steering them towards an appreciation for flavorful, less sweet tastes. Each 8 oz. serving of First Juice contains only 12 grams of natural sugars from organic fruits and vegetables compared to 27 grams of sugar in an eight ounce serving of 100 percent apple juice. First Juice is fortified with

NEW DRINK REVIEWS Emergen-C Honest Tea: New Packaging ZipFizz Liquid Shot Thomas Kemper Low-Calorie Root Beer Gingernize Pixie Maté Teas Metromint Cherrymint Glow Mama Naked Probiotic: Very Berry Sambazon Amazon Energy SoNu Water essn: Sparkline Mango & Passion Fruit Vis Viva Cranenergy Energy Juice From February 28, 2008 to press time.

To see reviews, visit www.BevNET.com

16

BEVERAGE SPECTRUM :: MARCH 08

calcium and vitamins A, C, and D. First Juice is sold in an innovative 8 oz. recyclable, spill-proof sippy-top container, as well as a 32 oz. bottle.

First Juice will be available nationally at Whole Foods Market, Wild Oats and Babies “R” Us beginning in Q1 2008. The suggested retail price of the eight ounce single-serve bottle and the 32 ounce bottle will be $1.99-$2.49 and $3.29-$3.99, respectively, and is currently available in two flavors: Apple+Carrot and Banana+Carrot. For more information call (646) 277-8720.

SPIRITS W. L. Lyons Brown and Cory H. Isaacson, the entrepreneurs responsible for Right Gin, had never found a gin they liked, so they traveled all over to fix this problem and find perfect ingredients in order to formulate the perfect gin. Right Gin first launched in New York and Boston in October of 2007. Since, Right Gin has sponsored such celebrity-studded events as Gwen Stefani’s post-concert after party at the Palms in Las Vegas Distribution is in these cities within Key partner accounts: Las Vegas, Reno NV, San Francisco, Los Angeles, San Diego, Orange County, Chicago, Boston and New York. Suggested retail price is $40 per bottle. For more information, call 310.432.0020.

Terlato Wines International has introduced a new luxury spirits division at the family-owned company, in conjunction with the establishment of a new partnership with super premium Vodka producer, XELLENT Swiss Vodka, the first and only Swiss Vodka. XELLENT Swiss Vodka, part of the family-owned DIWISA distillery, is crafted from the highest-quality 100 percent Swiss winter rye, and launched nationwide in February. For more information, call (201) 659-4712.

Café Boheme, a new creme liqueur, blends an array of exceptional ingredients including gourmet coffee from the world's premiere coffee venues, fresh creme from Holland, and premium French vodka distilled five times for maximum smoothness and purity with a hint of vanilla. Café Boheme retails for approximately $22.00 for a 750 mL bottle and is available nationwide at fine retailers, restaurants, and bars such as Martin's Wine Cellars in New Orleans, Beverages & More in Los Angeles, Acker Merrill in New York, the Ritz Carlton Key Biscayne and Specs Liquor stores in Texas. For more information call (212) 758-5322.

Beam Global Spirits & Wine, Inc. has announced the U.S. launch of Ardmore Traditional Cask, the first ever widely available single malt whisky from the Ardmore distillery. The only Highland malt

six degrees of cool hydration.

Metromint, the original mintwater,™ is proud to present the newest members of our family.

Chocolatemint: the luxurious taste of chocolate fills your mouth while the real mint sends cooling sensations throughout your body— it’s where chocolate meets cool.™ Cherrymint: One sip and you’d swear you were in an orchard. That’s how fresh and juicy new Cherrymint tastes.

Continuing our tradition of innovation, these two new varieties don’t duplicate anything on your shelves. And, like all Metromint products, they contain no sweeteners, no calories, and no preservatives. Pure. Simple. Mintwater.®

www.metromint.com/retailerinfo

whisky to be 100% peated since its inception in 1898, Ardmore Traditional Cask offers Highland malt flavor with a twist, and will be available on shelves nationwide beginning this month. Peated at an above industry average 12-15 parts per million, Ardmore Traditional Cask is a double matured single malt whisky which is non-chill filtered and bottled at 46% ABV. Only 3,000 cases of Ardmore will be initially introduced into the U.S. The single malt is available in 750mL bottles and will retail for a suggested price of $45 - $50. For more information visit the Ardmore website at www.ardmorewhisky.com.

SMOOTHIES Naked Juice is introducing a new flavor to its popular Naked Juice Probiotic line: Very Berry.

A bright blend with blueberry, apple and banana, Very Berry joins the Probiotic Family alongside Tropical Mango – a blend with mango, orange, and pineapple – which launched in September 2007. Naked Juice Probiotic is the first 100 percent juice smoothie with probiotics that aid in digestive and immune health. Naked Juice Probiotic Very Berry will be available in grocery stores nationwide in single-serve 10 oz. bottles with a suggested retail price of $2.99. For more information, call (626) 633-8384. mix1, an all-natural protein and antioxidant drink, has launched its fifth and newest flavor, mix1 Tangerine. Available in an 11 oz. bottle, mix1 Tangerine joins existing mix1 flavors Mango, Blueberry-Vanilla, Lime and Mix Berry. mix1 is an optimal blend of carbohydrates, proteins and nutrients to provide balance and sustained energy throughout the day. Each satisfying serving of mix1 contains 15 grams of premium whey protein isolate, 23 vitamins and minerals, 3 servings of fruits and veggies, antioxidants equal to 4 cups of green tea, and no lactose, gluten, soy or caffeine.

For more information, call (303) 517-2272. This product retails for $2 per bottle.

WINE

The Robert Mondavi family of brands has launched Solaire by Robert Mondavi. The portfolio includes a Santa Lucia Highlands Chardonnay and a Paso Robles Cabernet Sauvignon; both wines coming from vineyards located in California’s Central Coast - a region first championed by Robert Mondavi in the 1990’s. Monterey County’s Santa Lucia Highlands are home to the Chardonnay. All of the juice was barrel fermented and aged for 13

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BEVERAGE SPECTRUM :: MARCH 08

months in small French oak barrels which adds a smoky nuance and softens the mid palate. It has a suggested retail price of $14.99. A full-bodied wine, Solaire’s Cabernet Sauvignon brims over with aromas of blackberry, cassis and dark, sweet fruits and shows all the hallmarks of great Paso Robles Cabernet Sauvignon. Suggested retail price is $16.99.

CSDs The premium craft brewer Thomas Kemper Soda Co. is launching a low calorie version of its favorite soda – root beer. Thomas Kemper Low Calorie Root Beer tastes much bigger than its calorie count, thanks to Splenda and a kiss of creamy Pacific Northwest honey. Thomas Kemper will also delight taste buds with a lighter take on two additional classic flavors – Ginger Ale and Black Cherry. These premium sodas weigh in at just 10 calories each and balance their sweetness with rich natural flavors such as pure Madagascar vanilla and Jamaican ginger. Root Beer will be available on shelves late February 2008; Ginger Ale and Black Cherry will follow in April. The sodas will be available in single bottles (SRP $1.29) and 12-bottle sampler packs (SRP $12.99) at select grocery stores and restaurants in the Western U.S. Root Beer will also be available in six-packs (SRP $5.99). For more information, contact Thomas Kemper at (503) 231-3086.

Virgil's has introduced Virgil's Real Cola for the true cola connoisseur. Based on colas from the early 1900's using only the finest cola ingredients, this product is made without preservatives or artificial ingredients. Real Cola is also caffeine and gluten free. The natural ingredients gathered from across the globe include: kola nut from Africa, clove bud oil from India, vanilla from Madagascar, cinnamon from Ceylon, nutmeg from Indonesia, cassia oil from China, orange and lemon oils from Italy and lime juice from Mexico. Virgil's Real Cola is sold in 4-packs and has a suggested retail price of $5.99. For more information call (651) 228-9141.

PepsiCo has introduced Tava nationally, a new, calorie-free CSD which takes its flavors from the most intriguing fruits the world has to offer and each tells an exotic story of its own: Mediterranean Fiesta, Tahitian Tamure and Brazilian Samba.

Tava rolled out nationally in February in 16.9 oz.

PET bottles with a suggested retail price of $1.49 and in 12 oz. can 4-packs with a suggested retail price or $2.99. For more information, call (914) 253-2950.

SEI

®

DRINK WATER

A STEP ABOVE THE REST PROUDLY MADE IN THE USA

“What’s Hot Now.” – InStyle Magazine

“Sleek Portability + High Design.”

– Time Magazine Style + Design 100

“Chic Water.”

– Harper’s Bazaar

“[SEI Water Bottles] are blissfully unmarred by superfluous type.”

– Elle Decor

“Adds a definite swagger to routine hydration.”

– Wallpaper Magazine “Re-hydrate with the cooler-looking water on the strand.”

– Celebrated Living Magazine

“Sexy Sipper” – Modern Luxury Dallas NACD Gold Award 2005 Design Patent + Trademark 2005

SEI Water goes everywhere. The bottle shape, inspired by the military canteen, is designed around the principle of portability and utilization of space while maintaining a subtle harmony of form and function. The bottle is useful and fashionable; and the taste of SEI natural spring water is pure and crisp. > seiwater.com + 212 727 7772

ENHANCED WATER PepsiCo has re-branded SoBe Life Water, blitzing the retail marketplace with five new flavors, all featuring a distinctive new package. Each of the five flavors, Blackberry Grape, Pomegranate Cherry, Orange Tangerine, Strawberry Kiwi, and Passionfruit Citrus, are infused with a unique mix of antioxidant vitamins C & E, essential B vitamins, and healthy herbal ingredients. SoBe Life Water will be supported by a major marketing initiative that will continue to drive home the message introduced during a wild Super Bowl ad that featured Naomi Campbell and dancing lizards. For more information, call (914) 253-2950.

Mount Olympus Waters, Inc., a Salt Lake Citybased bottler of spring water, is re-introducing its popular line of Kwencher drinks, "pure water with a fruity splash." The half-liter products will initially come in four flavors: Cherry Cherry, Berry Berry, Strawberry Vanilla, and Orange Creme. The products had been sold through a licensee until recently. Kwencher has 70 calories per 8 oz. serving. For more information call (801) 974-5000 or go to www.mowi.com. bot, the all-natural, low-sugar, fortified water for kids is launching its newest flavor, lemon bot, just in time for summer. lemon bot has a similar thirstquenching taste as lemonade, yet offers 75 percent less sugar. This healthy alternative hits shelves nationwide this June. lemon bot, along with berry bot, grape bot and orange bot, are available at Whole Foods, Wegmans and Hannaford and retail for MSRP $1.49 per bottle. For more info, please visit the Web site www.botbeverages.com.

MIXERS Daily’s, America’s premier cocktail and mixer company is announcing the addition of two exciting and delicious new flavors to its expanding ready-to-drink cocktail line of products. Daily’s 1.75L Mojito bag-in-box and Daily’s 10 oz. Frozen Pina Colada pouch will debut at retail locations throughout the country this spring. Daily’s Mojito multi-serve boxes will be shipped six in a specially designed case that is perforated to convert easily into an eye-catching display piece and will retail for a suggested price of $13.99. Daily’s single-serve Pina Colada pouches will be shipped four pouches per carton, eight cartons per case (32 pouches per case) and will retail for a suggested price of $6.99/4 count. The launch of both products will be supported by advertising in targeted magazines to generate awareness and interest along with extensive sampling and eye-catching POS materi-

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BEVERAGE SPECTRUM :: MARCH 08

als to stop in-store traffic and encourage trial. For more information, call (203) 254-8225.

BEER Moosehead USA, the new U.S. importing arm of Moosehead Breweries, has announced the U.S. rollout of Moosehead Lager’s new, high-qualitygraphics packaging. The new cartons and supporting retail point-of-sale materials and displays began to appear throughout the United States retail locations in mid-February. The new packaging, featuring colorful graphics and images of “straight-out-of-the-cooler” Moosehead bottles, has an increased focus on the lager’s refreshment cues, premium and import status as well as its history as an independent brewery. The U.S. packaging graphics roll-out aligns with Canada and international markets to deliver a clear and consistent brand message globally. For more information, call (303) 298-8470.

Henry Weinhard's, the pioneering producer of small-batch handcrafted beer in the Pacific Northwest, is adding a new summer seasonal to its lineup of craft beers this month. Henry Weinhard's India Pale Ale is a balance of locally grown, premium caramel malts and two-row barley with Pacific Northwest hops. It is a refreshing brew with an aromatic full-hop flavor balanced by caramel malt sweetness. Henry Weinhard's IPA is a blend of Challenger, Simcoe, Chinook and Summit hops.

It contains 6.0 percent alcohol by volume. The new brew will be available in Idaho, Oregon and Washington where Henry Weinhard's products are sold for a limited time only. Suggested retail price is $5.99 for a six-pack. For more information, call (414) 931-2094.

TEA Fans of the TeaZazz brand of sparkling tea beverages now have a new flavor to enjoy: Green Tea Mint. Joining three original TeaZazz flavors – Original, Green Tea Lemon and Peach, Green Tea Mint delivers the crisp, exotic aroma and taste of mint, combined with the health benefits of green tea. A refreshing alternative to conventional soft drinks, TeaZazz delivers the health benefits associated with the antioxidants in tea, and with only 20-25 calories per serving, offers an exceptional taste that does not rely on the high fructose corn syrup commonly found in soft drinks. TeaZazz’s four varieties are currently available from retailers in the Greater Los Angeles Area, and the Northern California counties of Marin, Sonoma, Mendocino and Lake. For more information call (714) 572-1498.

Recipe for

Excess

Some drink manufacturers are on a mission of mercy: they want to cure hangovers.

A fter all, who hasn’t needed a pick-me-up after a rough night? by: Jeffrey Klineman

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BEVERAGE SPECTRUM :: MARCH 08

T

he panoply of folk remedies speaks to the need, as do the number of powders, pills, and other prevention gimmicks currently available in non-liquid form. But somewhere between cracking raw eggs into a cup of vinegar, chugging pickle juice, and downing the hair of the dog that bit you, there’s got to be a happier, more palatable medium.

And it’s that need that is being addressed by these kind people we’re writing about here. They’d also, obviously, like to make a buck. Whether or not you as a retailer can also make some money on rehab in a bottle, depends strongly on the kind of business you’re in. Obviously a clientelle of college students is a better fit than a nifty business of symphony-goers. Beer and spirits sellers might want to give the category a longer look than corporate cafeterias. But the products are popping up in places as varied as health food stores, drug stores, and groceries, in addition to traditional convenience and package channels.

The main benefit is a functional product emerging from several different categories into an area that might very well justify some shelf positioning.* “We see a lot of them in the market,” said Shelea Woodworth, the specialty brands manager for County Distributing, an Anheuser-Busch distributor in central Missouri. “They’re starting to appear more and more. We’re seeing them in door displays with the racks. I’ve even noticed in the last four or five months that they’re increasing.”

Woodworth’s anecdotal information is reflected in the slow trickle of recovery products onto the market over the past few years, and it’s come from different directions. On the functional beverage and enhanced water side, vitaminwater revive has been a strong-selling SKU for quite some time, while Function Drinks basically launched itself off its initial Urban Detox label. Meanwhile, products that conform to the look or feel of energy drinks have also come into the cooler, including Healthy Innovations’ Resurrect and Fuze Beverages’ Rehab.

Others are promising cures from foreign lands, like the fast growing Mexico City brand HOT Hangover Tea and the no-holds-barred Alcohol Killer, sourced from the Slovak Republic.

With the recovery-oriented functionality coming from so many different directions, some retailers have wrestled with where to place them.

While products from Glaceau and Function have a natural home with the rest of their lines, where, for example, would one put something called Mister Re, or AH+?

“They always put us next to the energy drinks, and that’s a mistake,” says HOT founder Isidoro Haiat. “We don’t even have any caffeine.

They should put us in the functional-type category, by the Gatorade, or else next to the alcohol.”

HOT recently signed a distribution deal with 7-Eleven in several large urban markets; nevertheless, Haiat is looking forward to

getting the product into the beer cooler, where it’s sold in many of his Mexican channels.

“People pick it up in the cooler,” he says. “They say, ‘if I’m gonna get drunk tonight, I’m going to have one right away.’”

While that kind of placement offers a direct link, it also offers a reflection on the chief reservation many retailers have about recovery beverages – their association with alcohol.

“We got a lot of pushback early on,” says Resurrect founder Kevin Serafini, who put out one of the first recovery drinks in 2005. “Getting larger retailer accounts was hard because we had associations with liquor or drinking. It was new, which is often a problem, but also, when we first came out we had “anti-hangover” on the front of the can.

It did well with the independents – the DSDs who sold to a lot of college kids – but the chains didn’t like it.”

After taking the anti-hangover badge off Resurrect, Serafini managed to get it into larger venues, including Harris Teeter. But the purification aura has also made it a fit for health nuts, he says, in much the same manner as Urban Detox, which has fans in both healthy living and party-hearty crowds.

Having access to healthy living-types might be one way to generate sales, but in general, the products all seem to work in the same way – a mix of herbs and extracts to help the liver, and occasionally caffeine, ginger, or vitamins to help with the effects of a rough night. Some offer powerful antioxidants to roll back liver damage, while others have a diuretic effect and are best accompanied with lots of water (another fine incremental sale).

“It’s not magic but it does work,” says Haiat. “The extract helps your stomach be soothed and not vomit.”

For those who are suffering from a hangover right now, those might be the magic words. But it’s not yet accepted that these products will be sales magic. While drinking – and its inevitable consequences – is something of a human constant, the category is still evolving, according to retailers.

“We’ve looked at a bunch of them, but nothing has caught our eye,” said Josh Campbell, the Beverage Sales Manager at Pennsylvania-based Sheetz. “We do carry the vitaminwater product, though.”

How many more recovery drinks come into Campbell’s stores, and the stores of others, will depend on consumer buy-in. Beverage Spectrum itself, after all, writes about hundreds of beverages that are useful for fighting a hangover’s symptoms, if not its ultimate cause.

“It’s an uphill battle, educating the consumer,” says Serafini. “But people are going to drink regardless, and we want to help them and their livers.”

See? Mission of mercy.

* Important side benefit: The death of this typical exchange during “happy talk” period of local newscasts, circa Dec. 29, any year: Sue, the blonde co-anchor: “Well, Gene, we know you party-hearty! Tell us, what’s your strategy for beating that New Year’s Day hangover?”

Gene, the hairy ex-jock sportscaster: “I take down a plate of scrapple and chase it with a shot of Tabasco and a glass of salted milk. How about you, Bob?” Bob, the other blonde co-anchor: “I eat a bottle of Tylenol and pray for mercy. But our producer, Sally, swears by two Cokes, a multivitamin, and an entire package of raw bacon.”

MARCH 08 :: BEVERAGE SPECTRUM

23

Brand News: Rehab Drinks OC Energy – OC Energy’s INSANE xXX energy shot has the caffeine equivalent of three energy drinks in addition to a hangover relief supplement. It also contains 100 percent of the U.S. recommended daily allowance of Vitamin C and Folate. Insane xXX is an energy shot that was designed to be mixed with alcohol or other beverages, as well as being shot straight. These products and the rest our line are constantly featured on the Bravo Reality Show The Real Housewives of Orange County.

Healthy Innovations – Healthy Innovations has launched Resurrect Daily Detox & Recovery in select markets throughout the United States. The following distributors have added Resurrect to their New Age portfolios: Kalil Bottling, M&M Distributing, Odom Corporation, Haralambos Beverage, John Lenore & Co., Coastal Beverage Co., Long Beverage, Cunningham Wholesale, United Beverage, Rudisill Enterprises & Skyland Distributing, General Wholesale, Republic National VA, Cunningham Wholesale, American Eagle, Dichello & Hartford Distributing and Centex Beverage, Wright Distributing. The company will launch two all-natural line extensions this year, Mandarin Mist & Raspberry Rain. Both will be sweetened with Agave Nectar, and will also be available in sugar-free versions.

Fuze – Fuze’s Rehab Recovery Supplement is designed for work hard, play-harder consumers to revive and recover without the aspirin, coffee and numerous hours of sleep. The drink contains several ingredients designed to refresh, recover and revive: Electrolytes hydrate the body, antioxidants coenzyme Q10 and green tea polyphenols promote recovery, while ginseng and caffeine revive the body.

There is no Taurine, a common energy drink ingredient, as it counteracts hydration.

Recently re-launched in the Pacific North-West (Northern California, Washington), Rehab has been at the forefront of celebrity news, while Rehab’s field marketing teams have infiltrated colleges across the country, making sure everyone has recovered, and is ready to go again the next day.

Glaceau – Glaceau’s vitaminwater revive is a fruit punch flavored drink that hydrates and replenishes after an active day or night with 50 percent of the daily value of four B-vitamins and 100 percent of the daily value for vitamin C in every 20 oz. bottle.

Each bottle also has about as much potassium as a banana to help bring your body’s water and electrolytes into balance.

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BEVERAGE SPECTRUM :: MARCH 08

Alcohol Killer – Alcohol Killer is a non-alcoholic beverage made with natural ingredients. It has no artificial colors, flavors, stabilizers or chemical preservatives.

The Original “makes you feel better” functional beverage has a light, gentle sweetness, with subtle citrus flavors. This product is currently available in over 25 countries around the world, including the United States. It contains natural ingredients which may help to reduce the blood alcohol level by supporting the body’s ability to metabolize alcohol, refresh both the body and mind with its light, gentle sweetness and citrus taste, and revitalize through balancing body chemistry. Alcohol Killer contains no caffeine, taurine, guarana, artificial stabilizers or chemical preservatives. Filled in 250 ml slim line cans under a protected atmosphere and pasteurized, the shelf life is easily 24 months.

Bebidas Funcionales Brio – Bebidas Funcionales Brio (BFB), a Mexico based company that specializes in the development and manufacturing of functional beverages, recently launched its flagship product, H-O-T Hang Over Tea in the U.S. H-O-T Hang Over Tea was developed in response to the increased demand of health-conscious consumers for natural and healthier products. Its unique nutritional facts make it the healthiest drink available in the market to treat hangovers. It has no calories, no sugars, no carbohydrates, and is caffeine free. Its amino acids and herbal extracts treat unpleasant symptoms such as nausea, vomit, and general discomforts caused by the dreaded hangover. It is currently being sold in Mexico at major retailers (Wal Mart, 7-Eleven, Circle K), and is quickly expanding to other markets, such as Caribbean, Colombia, Ecuador, Spain, Italy and select markets in the U.S. In the first trimester of 2008, HO-T Hang Over Tea will be sold throughout the U.S. at select distribution channels, including convenience stores, supermarkets, bars and nightclubs.

After Hours – After Hours (AH+) is a relief-focused combination of vitamins, minerals and electrolytes formulated specifically to “hydro-plenish” the body – restoring liquids and vital nutrients that life’s extremes removes. A 16.9 ounce bottle of After Hours holds enough amino acid, B-Vitamins, sodium bicarbonate, folic acid, potassium and Vitamin C put you at the top of your game after a night on the town, a trip across the world, or just a day at the office – without any sugar or sodium! AH+ is available in three flavors: Bed Time Berry, Last Call Lemon, and Good Night Grape. Bottles are available in single servings, as well as convenient four-packs in select liquor and convenience stores across the midwest and Las Vegas.

GIVE YOUR SHELF SOME MUSCLE. ®

Muscle Milk is the on-the-go shake that’s packed with protein, nutrients and essential fats to provide sustained energy for today’s active lifestyle.

Muscle Milk is arguably the best-tasting, fastest-growing nutritional drink in the category.

It’s no secret that poor diets and obesity are becoming national concerns.

Muscle Milk products are made to satisfy the needs of today’s active lifestyles.

Whether your customers are looking for an exercise supplement, a nutritious meal replacement or a quick, healthy, great-tasting snack, we believe there’s no substitute for products that taste as good as they are good for you.

The products you want and need, for a healthier, happier tomorrow for all of us.

For more information on the Muscle Milk family of products, please contact your sales representative at 888-298-6629. ©2008 CytoSport, Inc., Benicia, CA 94510

Freshness from the Source Isbre (Norwegian for Glacier) gets its natural quality from the pristine, high mountain wilderness of the Joekulen Glacier in Norway.

Believed to be formed over 5,000 years ago, the Isbre sub-Arctic glacial spring is one of the world’s purest water resources... perhaps the purest on Earth.

Naturally Pure This pure, crisp and refreshing spring water is unequaled in its quality.

Isbre’s incredible purity is not derived from a chemical filtration process. The rock formations beneath the glacier naturally filter Isbre, removing unwanted impurities, making Isbre... the healthiest water you can drink.

Visit us at www.isbre.com

TDS Comparison Chart (ppm)* ISBRE

Nothing is Everything Isbre’s purity test results are simply astounding.

In scientific testing for metals, salts and “non-essential” minerals, Isbre has been found to have the lowest TDS (Total Dissolved Solids) of any natural water.

TDS of 4 parts per million is virtually nothing, but in the water you drink... that’s everything.

Isbre is Available in...

Cases of 12 x 1L /33.8 fl. oz. and Cases of 24 x .5L /16.9 fl. oz. bottles.

For more information, please call us at 877. 294.7273, or e-mail us at info@isbre.com Isbre Holding Corp.

50 Chestnut Ridge Road, Suite 119A, Montvale, New Jersey, 07645

View the Comparison Chart and decide for yourself…

Dejà Blue Iceland Spring Crystal Springs Poland Spring Voss Deer Park Vermont Pure Icelandic Glacial Trump Ice Ice Mountain Saratoga Springs Sparkletts Crystal Geyser-CA Panna Volvic Crystal Geyser-TN Dannon Ty Nant Zephyrhills Ty Nant Carb.

Fiji Arrowhead Evian Vittel Perrier San Pellegrino Sanfaustino Gerolsteiner Apollinaris

4 28 42 44 54 64 72 72 74 74 76 90 120 120 130 140 150 160 180 200 200 230 270 310 400 480 990 1200 1500 1800

*ppm – parts per million Lab tested by Groundwater Analytical, Inc. and Eurofins Norge.

BOTTLE BILLS LEGISLATION, RECYCLING AND CARBON FOOTPRINTS.

BY MATT CASEY

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BEVERAGE SPECTRUM :: MARCH 08

T he cooler case may feel warmer now than it has in recent years, but don’t blame a faulty thermostat. Blame the fire stoked by environmentalists and beverage industry lobbyists in their fight over bottle deposits.

Battles over disposable packaging are nothing new to the beverage industry, to be sure, but in recent years two things have changed to bring them back onto the public agenda. First, there’s the sheer size of the beverage industry – it has added billions of bottles of water alone into the waste stream in the past decade. The second is a public that hasn’t been this environmentally hyper since the publication of “Silent Spring.”

As a result, modern consumers are on the warpath when it comes to pushing companies to minimize the negative effects their products have on the environment. The public’s interest in bottle bills is spawned by the same “inconvenient truths” as their interest in carbon neutrality and recycling: the fear that society’s waste could, at some point, via global warming or some other environmental disaster, render the world uninhabitable.

To their credit, beverage companies have responded to their Al Gore-educated consumers by publicly exhibiting their own, individual green credentials. Coke and PepsiCo have made commitments to recycling and carbon footprint reduction. Anheuser-Busch is playing up its own environmental bona fides. But as a unified industry, leaders continue to fight bottle deposit initiatives.

“Singling out beverage containers just doesn’t address the problem,” said Tracey Halliday, director of communications for the American Beverage Association.

Still, the industry is starting to have some defections, as environmentally minded (or simply profit-seeking) beverage companies – particularly in the bottled water crowd, which owes much of its success to a marketing approach that stresses its purity and natural aura – are starting to break ranks. Fiji Water, to name one large example, recently stirred the pot by looking to endorse bottle bills and announcing its intent to go carbon negative.

Currently, 11 states use bottle deposits to encourage their residents to recycle beverage containers. Most of those states passed their laws in the 1970s and 1980s before last century’s first environmental movement ran out of steam.

But the proposals have returned in recent years:

legislators in seven non-deposit states and the U.S. senate are considering what a nickel could be worth to the environment, and legislators in four states with deposits want to expand their programs.

Environmentalists are sounding a call to action in each of those battlegrounds, emboldened by recent victories in Hawaii and the Pacific Northwest. The Aloha state instituted a deposit system in 2005, and Oregon is scheduled to expand its older version in 2009. With that momentum and the current value consumers place on environmentally friendly practices – a recent survey by A.C. Nielsen revealed that more than half of the consumers polled would give up convenience for environmentally beneficial packaging – why shouldn’t retailers and beverage companies embrace bottle bills?

Ask that question and the flamethrowers come out. According to Halliday, deposits levy

Halliday said the ABA believes that comprehensive recycling programs are better than deposits, and proven to work – especially where deposits are not in effect. The association claims that those nickel deposits actually hurt curbside recycling. ABA materials cited a 1991 study that said deposits deprive curbside programs of revenue by removing valuable aluminum from recycling bins. Callan agreed that was possible, but said policymakers should treat each program as a tool in a toolbox.

But the industry clearly prefers policymakers to make curbside programs their recycling tool of choice, something Coca-Cola demonstrated in mid-February. The cola giant announced its goal to recover and re-use 100 percent of the aluminum used in its cans sold in the U.S. That goal came without timeline, but Coke backed up its commitment at the Daytona 500, stationing an educational trailer to explain the benefits

Fiji Water recently stirred the pot by looking to endorse bottle bills and announcing its intent to go carbon negative.

a discriminatory tax on an industry that produces only 4 percent of waste streaming into municipal landfills. “(Bottle deposits) only look at one element of the waste stream,” Halliday said. “They’re not addressing the overall problem.”

But that characterization didn’t fly with Scott Callan, a professor of economics at Bentley College.

Callan, who co-authored Environmental Economics and Management: Theory, Policy and Applications, said curbside recycling and deposit programs – as long as they’re run effectively – both represent cost-effective tools for policymakers who want to increase recycling rates.

“The consumer pays the deposit and the consumer gets the deposit back at the end if they do the right thing,” Callan said. “I would have to say the impact of that so-called tax is pretty minimal.”

of recycling to NASCAR fans. Coke previously set a goal to recycle 100 percent of their PET plastic bottles and in 2007 supported that goal with $60 million in recycling initiatives. Those efforts included building the world’s largest bottle-to-bottle recycling plant in Spartanburg, S.C. Pepsi has shined up its own green badge by installing the second largest solar power array in the Northwest at their Eugene, Ore. Offices.

While the industry’s biggest players may be in step with the ABA, out at leading luxury brand Fiji, they’re dancing to a somewhat different tune.

Fiji also supports comprehensive recycling programs across the U.S., according to Fiji Brand Manager Clarence Chia, but the nation’s leading imported water company is also looking to support bottle deposits. Chia said Fiji decided to break with the industry as part of their broader efforts to more-clearly define themselves as an environmentally-friendly company, and lead the

MARCH 08 :: BEVERAGE SPECTRUM

29

charge “for all companies in all industries” to be more conscious of the environment.

Fiji publicly trumpeted that charge when Thomas Mooney, Fiji’s senior vice president of sustainable growth, penned an article on the popular news site The Huffington Post suggesting the unthinkable: that the industry should give bottle deposits another look.

“We need to give all consumers the tools and incentives they need to recycle. It makes a difference,” Mooney wrote. “The 11 states that have container deposit laws account for 60% of recycled bottles in the U.S.” That sentiment was warmly received by Betty McLaughlin, the executive director of the prodeposit lobbying group, the Container Recycling Institute.

“The old model, where everybody runs up to state capitols and locks horns (is) getting old,” McLaughlin said. “It’s not doing anybody any good aside from the lobbyists. It doesn’t really help with recycling and it doesn’t help with climate change.”

McLaughlin has had it with debating the beverage industry about whether there should be bottle deposits. She’d rather debate how deposits should be implemented. A returnable fee helps consumers act responsibly, she said, especially when it comes to RTD beverages – which are usually consumed outside the home. Those containers rarely make it into home-bound recycling bins, she said, but the fees could be the incentive that prevents bottles and cans from landing in the trash or on the side of the road. As for bottles and cans that wind up on the roadside anyway, McLaughlin said, someone else will likely want the deposit badly enough to pick up that container and return it. Especially, she added, if laws catch up with the times in terms of deposit values.

It’s not that McLaughlin doesn’t admit that bottle bills aren’t perfect. Laws in many states cover only soda and beer containers – and not the new bottled water containers that are amping up the waste stream – she said, and deposit rates and handling fees haven’t been updated to keep up with inflation.

McLaughlin argues that the nickel should be a darn sight more. A nickel in 1975 would be worth 21 cents in today’s money, but the drop in incentive goes beyond the nickel’s value. Dur-

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ing the 70s, vending machines dispensed cans of soda for about 40 cents each. At that price the deposit – taking the total cost of the 12 ozbeverage to 45 cents – would account for about 11 percent of the total purchase price. Today, 20oz bottles can sell for $2 or more, and the still-unchanged deposit accounts for about 2.5 percent of that total. That leaves busy consumers with a vanishingly small incentive to hold on to their empty containers, and that diminishing incentive stretches up the supply chain.

Every nickel paid to a consumer for returning an empty container makes a round trip – at least on paper. Consumers hand the store a nickel when they buy the still-sealed beverage.

The store, in return, passes that nickel to the distributor. Then the consumer returns the empty container. The store returns the deposit, and the

distributor reimburses the store – adding a small handing fee for the store’s time and trouble in dealing with the empty container. But the key word here is small. The laws dictate that stores be paid a handling fee of 1-3 cents per container, which has remained static just as long as the nickel deposit has.

“It’s hard to find someone that hasn’t had a raise in 30 years,” McLaughlin said. That low handling fee has also made it difficult for standalone redemption centers to stay in business.

In New York, the climate for redemption centers could improve if legislators there pass a bill currently active in the General Assembly. The bill would increase the state’s handling fee from 2 cents per container to 3.5 cents per contain-

er, and expand the state’s bottle bill to cover a broader range of beverages. That last part makes Jim Calvin nervous.

Calvin, the president of the New York Association of Convenience Stores, said store operators already struggle under the burden of returned beer and soda containers. Their stores are already packed tight, Calvin said, and they don’t need –or want –to handle empty sports drink, juice and bottled water containers.

Store operators have few options, Calvin said, and most can’t afford machines to accept and process containers for them. Even if they could, he said, the noise generated by reverse vending machines make them a prohibitive nuisance in a 3,000 square foot store.

That leaves clerks to handle each return by hand, Calvin said, creating delays in a venue where consumers demand rapid service.

It also leaves store operators with the problem of stashing full-sized empty containers at a time when they are trying to increase their fresh food offerings.

Calvin said separating empty containers from fresh food – both physically and mentally – poses a problem. Stacks of stinky, moldy, bottles and cans don’t exactly fit with the “fresh” image, he said.

“A handling fee of any amount would not eliminate the problem of insufficient storage space or the problem of compromised sanitation,” Calvin said.

“It’s a nuisance that convenience store operators deal with because they’re obligated to deal with it under the law.”

Calvin said that he’s been happy that convenience stores and their beverage industry allies have been able to defeat the New York proposal in the last four years. He feels like bottle-bill supporters are trying to shove the burden of dealing with returned containers onto retailers. He said he would rather see the state establish a network of redemption centers before expanding the law.

He did not, however, have any idea how the state could do that.

McLaughlin called Calvin’s idea impractical. Investors, she said, couldn’t be expected to open a business that would be dependent on not-yetpassed legislation, but she said she sympathized with convenience store owners. To a point.

“You can make the decision to sell it or not sell it,” McLaughlin said, and if stores decide to sell beverages –as most do – “they have to accept the responsibility for taking the stuff back.”

DRINK 1, GIVE 10 Every liter of Volvic you drink will provide 10 liters of clean drinking water to children in Ethiopia.

HELP US BUILD WELLS. www.drink1give10.com

For each liter of Volvic bottled water purchased in the U.S. and Canada between April 1 and August 31 in 2008 and 2009, Volvic will donate 4 cents to the U.S. Fund for UNICEF to support UNICEF programs that will provide at least 10 liters of clean water to children in Africa, including building wells. For more information, visit www.drink1give10.com or www.unicefusa.org.

STATES WITH DEPOSIT LAWS CALIFORNIA: Enacted 1986, updated in 2000 and 2006.

5¢ for containers under 24 oz, 10 ¢ over 24 oz. Covers water, beer, malt beverages, wine, soda and fruit drinks among others.

CONNECTICUT: Enacted 1978. 5¢ on all containers.

Covers beer, malt beverages soft drinks and mineral water.

DELAWARE: Enacted 1982. 5¢ on all non-aluminum beer, ale, malt, CSD, mineral and soda water containers less than two quarts.

HAWAII: Enacted 2002. 5¢ on most alcohols and “nonalcoholic drinks in liquid form and intended for internal human consumption.”

IOWA: Enacted 1978. Deposit of “not less than 5 cents” on beer, soft drinks, soda water, mineral water, wine, liquor and wine coolers.

MAINE: Enacted 1976. 5¢ on beer, soft drinks, wine coolers and carbonated and non-carbonated drinks. 15¢ on wine and liquor.

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BEVERAGE SPECTRUM :: MARCH 08

MASSACHUSETTS: Enacted 1981. 5¢ on beer, soft drinks and carbonated water.

MICHIGAN: Enacted 1976. 10¢ on beer, soft drinks, carbonated and mineral water.

NEW YORK: Enacted 1982. Minimum 5¢ deposit on beer and malt beverages, CSDs, wine coolers and mineral and soda water containers.

OREGON: Enacted 1971. 5¢ on beer and malt beverages, CSDs, mineral and soda water cans and bottles under 3 ltrs. Deposit will include water and flavored water in 2009.

VERMONT: Enacted 1971. Updated in 1987. 5¢ on beer and malt beverages, CSDs, soda water mixed wine drinks. 15¢ on liquor containers.

SOURCE: BOTTLEBILL.ORG

STATES CONSIDERING BOTTLE DEPOSIT LAWS ARKANSAS: Bottle bill died in committee, May 2007.

ILLINOIS: Bottle bill died in committee, January 2007.

KANSAS: Bill in hearings as recently as Jan. 28, 2008.

MARYLAND: Stalled after a Feb. 2007 hearing SOUTH CAROLINA: Bill dormant for one year TENNESSEE: Bill to be reintroduced for 2008.

WEST VIRGINIA: Bill introduced and active in Jan. 2007.

Available September 2008

It’s taken nature billions of years to create the purest water in the world and Equa two years of meticulous preparation to bring it to market.

Equa will redefine the super premium market category with the purest artesian spring water ever discovered, and by doing so, redefining sales and profits.

Equa is now ready to offer what eager consumers are asking for, the healthy alternative beverage that is as pure and natural as the tropical rainforest from which it comes.

www.equawater.com

BRAND NEWS:

BOTTLED WATER Fred – Fred will now hang with a party – or package – of six 600ml bottles nestled in a recycled container, printed with soy-based ink. Additionally, Fred is now available in a 400 ml flask size.

Current distribution is rolling with Fred now.

Hydrate2O – Created with a patent-pending technology, Hydrate2O, according to its manufacturer, transforms purified water into a live, energized form that is absorbed into the bloodstream more quickly and enables true hydration at a deep-cell level. Hydrate2O also includes electrolytes and minerals to spur increased stamina and faster recovery times. Having already been adopted by a growing number of professional athletes, Hydrate2O is also officially endorsed by a broad array of outdoor sports personalities. Hydrate2O is currently distributed in the Pacific Northwest and California.

Isbre – Isbre has garnered new, expanded distribution and retail placement in the New York/New Jersey area. Oak Beverages and Boening Brothers and Spirit & Sanzone are now distributing Isbre in 35 New York counties and Marz Beverages in New Jersey. Isbre has been introduced into 60 ShopRite supermarkets in the greater NY metro area.

Aquamantra – In December of 2007 Aquamantra, launched in Albertsons Southwest Premium Specialty Water section and has been sold in Whole Foods’ Southwest Region for over a year. This year the company is looking to expand exponentially to bring “Love, Luck and Health” to consumers nationally.

Fiji – As of January 1, 2008, Fiji is not merely the best-tasting water, it is also the most environmentally friendly choice. Together with Conservation International, the company is helping to save Fiji’s largest lowland rainforest, the Sovi Basin, in perpetuity. Fiji Water is also reducing CO2 emissions across its products’ entire lifecycle, from raw materials production, to the eventual recycling of Fiji bottles and every process in between. Fiji Water will also be working with Conservation International to develop land conservation and renewable energy projects that offset the company’s remaining carbon footprint by 120%, making Fiji Water not just carbon-negative, but positively green.”

Aquavybe – Aquavybe is a bottled water that is vapor-distilled and structured with a high level of

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BEVERAGE SPECTRUM :: MARCH 08

alkalinity to balance against acidic lives. Aquavybe contains 72 bio-available trace minerals. It is available through select health food stores, health care practicioners and personal trainers nationwide.

Give Water – Give water offers consumers the choice of supporting one of three charitable causes with each bottle they buy -- and 10 cents for each bottle sold is donated to the chosen cause. The blue bottle, Give Life, benefits children in need; the pink bottle, Give Hope, benefits breast cancer research; and the green bottle, Give Love, benefits the environment. Give was recently slotted into the Mid-Atlantic Region of Whole Foods Market.

National Beverage – La Croix Spring and Sparkling Water is now the official beverage sponsor of the 3Day Event benefitting the Susan G. Komen Foundation. The three-day event is set to occur in 14 cities between September and November of 2008. The approximately 3,000 participants per city will raise a minimum of $2,200 each and live in a make-shift tent city as they walk for 60 miles over the course of three days in the given city. La Croix’s Hydration Station is the favorite tent where participants enjoy foot massages and sample rehydrate. La Croix is bringing the road event to retailers by offering an in-store “Drink and Think Pink” program which is a traveling breast cancer training and education center with various educational tools just short of a mammogram. Komen trained demonstrators will hand out free early detection CDs, literature and have training tools such as trivia and prosthetics on site.

Function Drinks – Function launched Function Water late in the summer of 2007 in Whole Foods Markets in the Midwest. In the fall of 2007 Manhattan Beer in New York picked the product up and launched us into the Eastern Region. It is also carried throughout the country through UNFI and other distribution houses such as Spike Beverage in Arizona, Kristen Distributing in Texas, Bill Distributing in Alaska, and Supreme Beverage in Alabama. The current bottle is a 750 ml PET but the company is launching a 1 Liter as well.

Maddie’s Beverage Company – Wateroos, an allnatural children’s water-filled drink box, continues to gain distribution, adding Shaw's, Hannaford and Kings Super Markets to the list of retailers that now stock Wateroos. Wateroos is the first commercially available water beverage packaged

in a sustainable, recyclable drink box. To support the brand's continued growth, the company recently launched the Waterooli-Mom program where moms can request free Wateroos samples and coupons to share with their friends (and their friends’ children).

Evian – Evian has just released its first-ever high creation, the Evian Limited Edition Bottle by Christian Lacroix. This bottle signifies the brand’s dedication to chic sophistication, providing consumers with an epicurean experience in each of these limited edition bottles and commences a new annual tradition. Designer-developed bottles will now carry-on the legacy of the beloved holiday bottles, which have been viewed as collectibles since their inception. The bottle recently debuted to the New York fashion scene at Mercedes Benz Fashion Week.

Delicious H2O – On March 1st, Sarah Fullerton and Mary Noon launched Delicious H2O at the Peninsula Hotel in Beverly Hills, California. With an exquisitely designed glass bottle, Delicious H2O is marketed exclusively to high-end hotels and restaurants in an effort to bridge the gap between bottled water and the worldwide water crisis.

Equa – The lush Amazon forest has been nourished by pristine rainwater for millions of years.

What has not been evaporated or been absorbed has collected within the earth's largest underground freshwater reservoir. This unique source supplies the springs from which Equa is drawn.

The first bottles of Equa are expected to arrive in U.S. markets in Sept., 2008. Building a state-ofthe-art bottling factory is a bit more time consuming and challenging when the factory is located in the middle of the Amazon rainforest!

Talking Rain – Banking on its local, effervescent blend of 100 percent pure oxygen and pristine artesian mountain spring water, Preston, Wash.based TalkingRain Beverage Co. recently unveiled the new look of its AirWater packaging. Vibrantly labeled with hues of orange and blue and packaged in two convenient sizes, the revamped exterior is intended to align with the product’s spirit of refreshment. AirWater’s infusion of oxygen aims to deliver the “fresh taste of a mountain waterfall” with every sip. Look for the refreshed design to hit shelves this spring.

Jana – Jana has recently added Ron Easley as the Senior Vice President Sales North America. This,

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BEVERAGE SPECTRUM :: MARCH 08

combined with great local and national distributor partnerships, has made Jana Natural European Artesian Water available throughout the U.S. Various major supermarket chains across the US are now offering the Jana brand to their customers.

Jana has partnered with Global Angels in their US launch of this important environmental charity. Jana selected this charity for the great work they do to help countries around the globe to build proper wells and provide their citizens with healthy drinking water.

Jana is the exclusive bottled water at Madison Square Garden.

SEI – SEI is currently going to be sponsoring the Hotel Ezra Cornell as the exclusive water brand.

H2Om – H2Om water with intention, the world's first interactive water, is a natural spring water with specially designed labels designed to empower individuals to create positive intention in their lives. They are a socially and environmentally responsible company whose mountain spring, bottling facility, and offices are all local to California. Through their partnership with Carbonfund.org they offset their carbon footprint on the planet, while proceeds from revenues benefit organizations creating education on recycling and awareness relating to world water issues and our environment. Seven available intentions (SKUs) include, Love, Perfect Health, Gratitude, Prosperity, Will Power, Joy, and Peace.

Icelandic Glacial – Icelandic Glacial recently achieved zero-carbon emission certification. The company is now being distributed in the U.S. via Anheuser-Busch, which owns an equity stake in the company.

New Attitude Beverage Corp. – New Attitude Beverage Corp., the master distributor for Ice Age Premium Glacier Water in an award-winning cobalt blue bottle, announces that the 2008 Academy Awards once again chose the product as its featured water for the event, which was held at Hollywood’s Kodak Theatre on February 24th.

Mountain Valley Spring Company – Mountain Valley Spring Company was recognized by the Glass Packaging Institute as the 2007 Winner for Best Non-Carbonated Beverage Packaging. Packaged in glass continuously since 1871, Mountain Valley is a natural spring water available in both still and carbonated varieties. More recently, Mountain Valley has become available in PET packaging.

Mountain Valley is rapidly currently expanding its distribution through direct store delivery operations throughout the United States and Asia.

Ethos – Ethos Water, the brand dedicated to helping children get clean water, is driving support for its mission by collaborating with H20 Africa, a foundation focused on clean water initiatives. As part of that collaboration, H20 Africa’s co-founder, Matt Damon, will appear in a national Ethos Water print advertising campaign encouraging consumers to get involved in raising awareness and funding for the world water crisis. The campaign coincides with the expanded distribution of Ethos water into more than 40,000 convenience, grocery, mass and drug stores across the United States through the Pepsi-Cola bottling system. For each bottle of Ethos water sold, US $0.05 and C $0.10 is directed to the Ethos Water Fund, a part of the Starbucks Foundation.

ry with new packaging, a new brand image campaign, a new e-commerce site, a new advertising campaign and the release of a scientific study. The new e-commerce site went live on March 14, for Expo West, the Natural Food Show in Anaheim, CA and the new bottles will be in stores April 1.

Penta has retained Circle One Marketing Solutions of Norwalk, CT to handle the creative execution behind the re-branding and the advertising campaign. Penta hopes to expand its traction with women 35-50 who care about their health and are active. The new branding will encompass the wellness lifestyle and focus on the antioxidant and anti-aging characteristics of the water.

O Water – O Water recently introduced Sport Owater, a plain, ultra-purified water with electrolytes for fluid recovery but no flavor. It is expected to be on store shelves at the end of April.

Penta Water Company – The Penta Water Company has reintroduction Penta into the water catego-

MARCH 08 :: BEVERAGE SPECTRUM

37

GERRY’S INSIGHTS

RED BULL’S COLA EXPERIMENT ow much can the entry of a successful brand from another realm reinvigorate a declining category? Come June, we’ll be treated to a fascinating attempt to answer that question.

That’s when Red Bull plans to venture forth with – of all things – a cola. Not just any cola, but an all-natural cola. And not some drab, goody-goody kind of natural cola, but one claimed to be the only one to include not just kola nuts but coca leaves, which, after all, shared equal billing in defining Coca-Cola a century ago. A natural, coca-leaf-containing cola with

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BEVERAGE SPECTRUM :: MARCH 08

a mouth-watering array of other ingredients as well: lemon/lime, clove, cinnamon, cardamom, pine, corn mint, galangal, vanilla, ginger, mace, cacao, licorice, orange and mustard seeds, along with natural flavors from plant extracts, sugar from beets and natural caffeine from coffee beans. By Red Bull’s account, an all-natural, rich-tasting, extremely refreshing cola.

But hey – a cola.

Have they gone crazy over in Salzburg, Austria? As of this writing, when Red Bull North America had just offered the first details of the new brand, opinions among distributors ranged from stroke of genius to farcically delusional.

But one can – and this column, at least, will – construct a case for why this product could provide a jolt of energy to a huge but steadily eroding category that hasn’t responded well to the flavor extensions, sweetener experiments, food match-ups, online communities and other ploys offered in recent years by Coke and Pepsi.

Before we get to that, though, we need to mention Richard Branson. He’s the guy, of course, who famously guided a tank over a sea of Coca-Cola cans in New York’s Times Square in the late 1990s as camera shutters clicked to herald the advent of Virgin Cola. Sadly, that likely was the high point of the venture. Virgin, a hot brand in other segments, quickly got blown out of the water by the reaction of the cola giants and Virgin’s own missteps.

The gruesome example of Virgin Cola – one that hollers, Beast-like to Belle, “Don’t go into the west wing!” – did its share to discourage further entrants into the cola realm. But even before Red Bull disclosed its own cola plans, something interesting had begun to happen.

After years of observing an unspoken dictum of not venturing anywhere near a cola, several boutique soda brands – from Grown-up Soda (GuS) and Jones to Virgil’s – have recently begun to edge into that fraught area, pulled by fans looking for a fresh take on a classic flavor. So wary was GuS co-founder Steve Hersh of making the move that he tells me didn’t respond to those requests until another, less risky endeavor – a similarly-demanded ginger ale – quickly rocketed up to his #2 sales spot. Significantly, so untethered have the major ginger ales and colas become from their origins that GuS’ label depictions of ginger roots and kola nuts seem to catch their imbibers off guard.

Against this backdrop, one can at least understand the lure of this category for Red Bull.

Proponents of energy drinks often view them as essentially the new guise of caffeinated colas, as entitled to a century-long run as the colas enjoyed. Attach a cola flavor to an energy-drink brand, and you give consumers cover to continue to enjoy their cola habit (much as Starbucks lattes can be seen as conferring social acceptability on adults’ desire to consume milkshakes in broad daylight). That’s hard to pull off without some kind of product differentiator, but in an RB Cola-friendly world, that’s where the all-natural base of traditional, rich ingredients would come in. Assuming Red Bull has done a craftsmanlike job of formulating the new line – and Red Bull creator Dietrich Mateschitz’ way with herbs in his formulation of Carpe Diem botanic waters suggest he is well up to the job – the new brand could bring a product revelation to consumers. And at a time that Coke and Pepsi have been reluctant to yield even to some consumers’ preference for a cane-sugar version of Coke or Pepsi in the U.S., that would be quite impressive, indeed.

Given the category’s history and current outlook, it’s still a challenging proposition for Red Bull. The doubters could well prove right. But one should never underestimate a formidable marketing organization like Red Bull – especially one with as strong a route to market as its distribution network (something Virgin lacked).

That’s not even to mention the younger-skewing energy brands like Monster and Rockstar, which have limited their forays into colas to subtly branded line extensions. If they decide to throw their hat into the ring, too, well, things could get really interesting.

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

BRANDS IN TRANSITION

NEW PLAYBOOK AT JONES SODA

BY MATT CASEY

n the world of soft drinks, Jones Soda has always resembled a plucky Division II college football team, winning fans through personality, creative plays and a willingness to make the risky deep throws that don’t always pay off. Riding its growing popularity, Jones made the move from the small-time crowd to the big-time arena. But just as they got there, things changed for Team Jones: they kicked their old quarterback to the curb, unveiled new uniforms, and introduced a whole new playbook. It’s a new day for Jones.

But not everyone is happy about that.

The quarterback in question, founder and CEO Peter Van Stolk, formulated Jones’ first six flavors in 1996 and subsequently cut the brand’s off-beat reputation from his own quirky, skate shop profile. The brand’s identity as an “alternative soda” started with glass long-neck bottles adorned with customer-submitted photos; it grew through collectors’ packs that included sometimes-undrinkable flavors. The 2003 Thanksgiving holiday pack featured a Turkey and Gravy soda that BevNET taste testers struggled to keep in their mouths. But the flavor wasn’t about offering a pleasant taste, it was about creating buzz. And it did: less than a year later, Jones Soda –although not Turkey and Gravy Jones Soda, thank God -- showed up in Starbucks coolers across the U.S. Van Stolk had created cachet.

Although he was primarily the brand’s buzz man, Van Stolk also functioned as the face of Jones on a more personal level. Joe Steele, the co-owner of the Milford, Ohio-Based Tri-State Juice Company, said in-person calls from Van Stolk were one of the things he liked about the company. But Steele isn’t holding his breath for another visit. Van Stolk stepped down as CEO at the end of 2007, taking the fall for stock prices that, ironically, failed to live up to the buzz.

It’s got to be disappointing, because as a scourge of the big boys, Van Stolk had just completed a championship-caliber performance, outbidding Coke and Pepsi for the soft-drink contract for Qwest Field, home to the Seattle Seahawks, and pushing the company to add alu-

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BEVERAGE SPECTRUM :: MARCH 08

minum cans to its previously all-glass lineup.

Despite Van Stolk’s PR appeal, Jones’ stock had skidded downward in 2007, dropping from an April peak of $28 per share to less than $6 per share in December, when Van Stolk announced his intention to resign.

Van Stolk said in a written statement that he arrived at the decision to hang up his cleats nearly a year before he announced it. Jones’ Chief Financial Officer Hassan Natha told the Seattle Post-Intelligencer that Van Stolk had informed the board of his intention early last year, but that the decision had been kept “at the board level.”

Regardless of the back story, however, the issue for Jones is clear: its ability, as a brand built on its funky personality, to keep customers coming back without its funkster-in-chief.

nate with consumers searching for that sweetener’s more virtuous aura, it’s still too early to tell if it cuts the mustard with either new fans or the brand’s old adherents.

But Joe Steele, the Ohio-based distributor, said he doesn’t see much of a difference.

“They say it tastes better. I really can’t tell,” Steele said. “I know it costs more.”

Steele added that he doesn’t think most Jones fans – who skew young, demographically – care about whether or not their soft drink uses HFCS. “Those kids are typically eating Big Macs and French fries,” Steele said.

Lately, Steele said, Jones makes him scratch his head. They used to be about running with the little guy, he said. Now, Steele said, he no longer knows where Jones is headed.

NEW PLAYBOOK The company founder may have left the helm, but Marketing Manager Seth T. Godwin said Van Stolk remains a member of the Jones board of directors and in regular contact with the company. Jones has been different since Van Stolk left, Godwin said, but added that “(Jones has) kind of grown out of the little entrepreneurial soda company that Peter started. We needed a little bit of change.”

Regardless, Jones had already made what most observers regard as its most significant lineup change even before its long-time QB left, reformulating all of its products to eliminate high-fructose corn syrup in favor of pure cane sugar.

Godwin said Jones chose to switch sweeteners not because HFCS has been a lightning rod in the debate over child obesity in America – Godwin said the company wants to stay away from that battle – but to create a point of difference between Jones and other sodas.

The switch brought its share of growing pains. The company needed new equipment to go with the new ingredient, but Godwin called the transition “exciting” and said customers appreciated the cane-enhanced flavor profile.

While the move to sugar might very well reso-

MEET MARTHA STEWART But Jones had little choice but to adapt and change. Starbucks – the company that put Jones’ quirky glass bottles into the hands of millions of consumers across the U.S. – scuttled their distribution agreement last June to make room for expanded menu offerings.

Jones hasn’t lost its toe-hold in national chains altogether: you can still find them in Panera Bread Bakery Cafes. And the company hasn’t been content to stand still while the ground shifts beneath it. Jones is taking new stabs at building an independent network, and is also being trumpeted by retailers like Wal-Mart and K-Mart as one of those slightly upscale brands that retailers now try to incorporate across all categories. Martha Stewart, meet Jones Soda.

Meanwhile, Godwin said, the company has big plans for the near future under the direction of interim CEO Steve Jones, a former Coca-Cola executive and Jones board member.

One bright light is 24c –the company’s response to the vitamin-infused water phenomenon – already making its way onto Whole Foods’ shelves in powder form. The company has also released a ready to drink version of 24c, one that Godwin said entered the market at an opportune time, as Coca-Cola’s purchase of gla-

ceau has left a vitamin water-shaped hole in the independent distributor system.

But Jones also has higher ambitions for 24c.

With more vitamins and minerals than anybody else, he said, the company wants 24c to create a premium fortified water segment, much like Perrier created the premium bottled water segment.

Whether or not 24c cuts out new space for Jones in the cooler case, Godwin said, the company plans to make its entry into the functional drink market later this year. The product is still in the early stages of development, so it’s too early for Godwin to discuss flavor profiles – or

much else, for that matter – but he said beverage will likely be tea-based and will certainly include an amino acid called Gamma Aminobutyric Acid – or Gaba, for short. The substance is popular in Japan, Godwin said, where golfers and video game players consume it for mental clarity and focus. If the additive is a hit, Jones will have a jump on copy-cats, Godwin said, because the company has an exclusive two-year contract to use Gaba in beverages.

Despite all the big changes, Godwin said Jones Soda wants to remain the same company it has always been.

“We’re still trying to stay true to what our brand is all about, which is self-expression,�

Godwin said.

But Steele remains unconvinced. “To me, I guess they’re chasing everybody else,� he said. “I’m not sure if that’s who they are.�

Maybe it isn’t, but scrappy little Jones Soda has made it to Wal-Mart shelves, and the end zone at Qwest Field. That represents an enormous new arena with a lot of new seats to fill.

Jones needs to fill those seats, but can they do it with the new lineup? Only time will tell.

A NEW DAY HAS DAWNED BREAKING BEVERAGE INDUSTRY NEWS DELIVERED DIRECT TO YOUR E-MAIL INBOX FROM

BEVERAGE BUSINESS INSIGHTS s 0UBLISHED TIMES PER YEAR ABOUT TWICE A WEEK s )NSTANT EXCLUSIVE NEWS AND ANALYSIS ON THE MOST VIBRANT SEGMENTS OF THE BEVERAGE INDUSTRY INCLUDING q %NERGY $RINKS q %NHANCED 7ATERS q 4EAS #OFFEES q &UNCTIONAL $RINKS q (IGH %ND "OTTLED 7ATERS s .O HYPE AND REWRITTEN PRESS RELEASES

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41

CONVENTION SCRAPBOOK

NIGHTCLUB & BAR he 2008 Nightclub & Bar Convention and Trade Show, aka “The Show”, took place at the Las Vegas Convention Center on Feb. 26 and 27. Much more than just a beverage event, exhibits included everything from serving and drinking equipment to confetti and smoke machines, high-tech lighting and sound electronics, video games, pool tables, ID systems, ATMs, and drink chiller technology. The majority of the attendees were club/bar owners, restaurant and industry management, as well as distributors looking for new beverages to stock.

Since the show focused primarily on the lucrative on-premise market, liquor and spirits companies accounted for the majority of exhibitors on the trade floor, but as in the past the largest number of non-alcoholic beverage brands included energy drinks – some with very large and flashy booths.

Energy drink brand exhibitors included 5 Hour Energy, Banzai Energy, Fuel Cell, Go Girl, Jetset Energy, Liquid Ice, Monster, Radioactive Energy, Red Devil, Red Bull, Rip It,

Larry McAlister and Luke Punzen berger show off 20 hours of energy.

ht er. Lucky we caug em od B l il B i's za Ban nja mask. him without the ni 42

BEVERAGE SPECTRUM :: MARCH 08

Roaring Lion, Rockstar, SoBe, and XL Energy. Monster had their infamous dunk tank along with plenty of cases of BFC and Mixxd to party long into the night.

There were some new energy brands at the show including ones with risqué names such as Sex Drive Energy Drink and Deep Throat Energy Drink. Sum Poosie Cat Energy Drink showcased new glass bottles to complement their 16 oz. can offering. Playboy Energy Drink was certainly, uh, wellendowed with a massive RV, DJ booth, and former Playmates signing autographs. The brand is touring across the country promoting its two SKUs. Other brands that launched at the show included Faded Energy and 420 Hemp Energy. Go Girl from Nor Cal Beverages launched Go Girl GLO, and Jetset débuted their new diet flavor. Shark USA mixed it up with their revamped M150 glass energy shot. With all the booze flowing freely, it was no surprise that Alcohol Killer, a product intended to fight hangovers, was down to their final

ewicz Andrew Jaros d an al ov K or Ih ol Killer. show off Alcoh

Go Girl's Chuck Blank, Am ber Latoof, Kristi Jones and Jeff Long , all smiles.

case on Wednesday afternoon when we spoke with them. Private-label energy drink manufacturers were also exhibiting, including X Brand Fluids.

High-end mixers, sparkling juices, and CSDs, including Dry Soda, Izze, Lorina, Monin, Mixerz, Modmix, Purple, Reed’s, Stirrings, and Synergy Beverages showed their nightclub-worthiness, each creating colorful concoctions to please the eye and the palate.

VENGA Functional Infusions, a new line of imported Swiss tea-based beverages from Beverage Innovations also launched at the show. Flavors included Brainstorm, Calorie Burn, Daily Dose, Energize, Health & Zen, and Rehydrate.

There were also several bottled waters at the show including Bling Beverages, Le Bleu, and OGO. Please check out our photo gallery for a better look at the people and companies that were in attendance.

Monster Energy's old reliable, the girl in the cage routine.

Two long, easy

pulls of the H

igh Life.

CONVENTION SCRAPBOOK

NIGHTCLUB & BAR

SoBe. The preferred mixer for the

arty set.

'll eat metal.

Radioactive energy. So strong, you

se trucker Jetset - becau ool! c hats are still Rock Star Rocking Out.

few Brock Agee dished out Le Bleu, one of the ness. that didn't dish out the booze. Thank good

Heather Lucchess for Liquid Ice .

Off the leash, no less!

Suck & Blow.

You read it rig ht.

lo?

Uh, hello? Playboy booth here? Hel 44

BEVERAGE SPECTRUM :: MARCH 08

Heineken, apparently going after exotic barber generation.

the

CONVENTION SCRAPBOOK

NIGHTCLUB & BAR n Monday, February 25, 2008 at The Hardwood Suite at The Palms, Las Vegas, NV Right Gin and Kubler Absinthe celebrated the 2008 Nightclub & Bar Show with a special DJ performance by Paul Oakenfold.

Guests were joined by Right girls and painted Kübler fairies and treated to specialty Right Gin and Kübler Absinthe cocktails.

APHY

PHOTO BY FURY PHOTOGR

Right Gin, a perfect shot!

DJ Paul Oakenf PHOTO BY FURY PHOTOGRAPH Y old provided th e sounds for the evening.

RAPHY

PHOTO BY FURY PHOTOG

Brass, always a fine addition to any party.

PHOTO BY

Y PHOTOGRAPHY W.L. Lyons Brown. He hatesFURgin .

So, naturally, he created a brand of gin.

The faces of Right Gin's P.R..

Page Jeter, Josh Balster, and Joyce Sevilla.

Night of “Mystery, Myth and Mayhem” celebrated the return of the French Absinthe Le Tourment Vert on Monday, Feb 25, 2008 at Moon Nightclub in Palms Hotel, Las Vegas, NV. With Brand Ambassador Patrick Dias on hand to lead the way, special guests included David Arquette, Barry Bonds, Terrell Owens, Suge Knight, Rob Dyrdek, Jason Hervey along with the Maloof Brothers. Los Angeles’ DJ AM was spinning.

PHOTO BY TROY BORRUSO

Hallucination? I think not.

PHOTO BY TR OY BO Barry Bonds and Terrell Owens. RRUSO Just part of the star-studded crow d.

46

BEVERAGE SPECTRUM :: MARCH 08

PHOTO BY TROY BORRUSO

Impressive bottle design by Philippe Barbera.

PHOTO BY

Tim Staples, Jason Hervey, Eric TROY BORRUSO Bischoff and David Arquette all made app earances.

DJ A.M

. hard a

PHOT

t work.

O BY

TROY

BORR

USO

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Bud Light Bud Light is bringing a new competition to the 2008 Olympics, albeit one that's not officially recognized – yet. With regional competitions already underway, the Anheuser Busch brew will sponsor the U.S. Rock/Paper/Scissors League Championship on June 22 in Las Vegas. The crowned victor will claim the $50K prize and advance to the world championships in Beijing during the 2008 Summer Olympics. As this historic game upon which great decisions are made (when scissors cut paper, rock crushes scissors, and paper covers rock) enjoys increased popularity, Bud Light is pleased to back it in the global ring where Canada, Guam, Hong Kong, Ireland and Malaysia will concurrently conduct their competitions. Fortunately, competitors will still have a free hand with which to hold a can of Bud Light. For more information, visit www.anheuser-busch.com.

7-UP Easter has passed but the Bunny E-Burp campaign, featuring 7-UP’s mischievous burping bunnies in hot pursuit of 100 percent natural flavors, continues online. Log on to create your own bunny avatar – complete with outfittings and custom audio messages – and send it hopping by e-mail to friends. In addition to the Bunny E-Burp campaign, download your free coupon for a “Buy One Get One” free 7-UP 2 liter or or 20 oz. bottle. Coupon expires April 30, 2008.

The avatar application was created in partnership with Oddcast,

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BEVERAGE SPECTRUM :: MARCH 08

a developer and distributor of talking avatar products that enable consumers to personalize their online communications.

This online campaign follows on the heels of 7-UP’s “burptastic” national television commercial which features a young woman who peers into her garden to find all of her fruit has been devoured, only to then find her refrigerator has been struck by the same fate. The scene then pans to two bunnies sitting on a hilltop, as one burps with satisfaction.

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PROMO PARADE Absolut Absolut Vodka is upholding a long tradition of artistic collaboration by partnering with Grammy award winner Kanye West to usher in its “In an ABSOLUT World” campaign. In the past, ABSOLUT has worked with such 20th century luminaries as Tom Ford, Andy Warhol, and Keith Haring. West joins this legacy as he kicks off the national Glow in the Dark tour Ignited

by Absolut 100 on April 16 at Key Arena in Seattle, Wash. West has teamed with I Love All Access to provide his fans with VIP ticket package experiences. N.E.R.D., Lupe Fiacso and fellow Def Jam Artist Rihanna will join Kanye on the road.

The “In an ABSOLUT World” campaign will showcase ABSOLUT 100, a smooth, mixable vodka packaged in a glossy black bottle, released in Fall 2007. West will be pouring out his own signature style this season into entertainment arenas and marketing endeavors in his usual provocative fashion. West, along with other artists, will be featured in online testimonials sharing his vision of “life in an ABSOLUT World” at www. absolut.com.

From coast to coast, ABSOLUT 100 cocktails and bottle service will be featured prominently in nightclubs and retail locations, where ABSOLUT will incorporate elements of the tour and Kanye's renowned design aesthetic. ABSOLUT considers this campaign its most innovative collaboration in the brand’s history.

Pacifico Pacifico Beer is finally establishing its online presence after crossing the border from Mexico over 20 years ago. Long popular with West Coast surfers, Pacifico was first introduced in the U.S. in 1985. It is now ranked as the number six imported premium-priced beer in the country, growing at more than 13 percent annually over the last ten years. As it launches its new campaign, "Yellowcap Adventure," Pacifico aims to take the beer into new geography while promoting the mystique of discovery. In order to expand its reach eastward, Pacifico is targeting the adventure-loving consumer. The new website capitalizes on this wanderlust. Visitors to the website MexicoViaPaci-

50

BEVERAGE SPECTRUM :: MARCH 08

fico.com will be transported via clickable yellow Pacifico bottle caps to scenic locations in undiscovered regions of mainland Mexico, or introduced to several “actividades” – all of which can be enjoyed while drinking Pacifico. Each video vignette features music by an under-the-radar band, all of which will be compiled onto a “Pacifico Playlist.” The playlist will be distributed to vendors that sell Pacifico and can also be downloaded online by consumers. In addition to this online vehicle, keep your eyes peeled for the official transportation of Pacifico. Pacifico has converted several 1960s California-style Volkswagon buses to market Pacifico at special events.