Beverage Spectrum March 2007 by BevNET.com

MARCH 2007

STOP WASTING WATER AND START MAKING MONEY

ALSO THIS ISSUE: SEASONAL SETS EMBRACING FLAVOR-IZATION

2007 ENERGY DRINK BUYERS GUIDE ENCLOSED COMPREHENSIVE 52-PAGE GUIDE TO THE ENERGY DRINK CATEGORY

Make Them An Offer They Can’t Resist I R R E S I S T I B L E

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Enjoy Heineken Light Responsibly. * AC Nielsen HomeScan, Total US, YTD 7/29/06 ** IRI, Total US, 2006. #7 Import in case volume

MARCH 2007

vol.

5 // no. 2

Departments

Features

8 // BEVSCAPE

28 // THE 411 ON H20

Holy Water!

How to handle different grades of water

12 // CHANNEL CHECK All over the juice category.

44 // SEASONAL SETS How the change of the seasons can

16 // NEW PRODUCTS

mean change in your register

Jugo. That means “Juice.” 48 // PROMOTION PARADE Jack Daniels – built for speed.

Columns 4 // THE FIRST DROP Testing Badly 6 // PUBLISHER’S TOAST The New FMI Show...or the Last? 42 // GERRY’S INSIGHTS Embracing Flavor-ization

Cover Photograph: © Ahmet Cuneyt Selcuk MARCH

2007

\\ BEVERAGE SPECTRUM

THE FIRST DROP

Testing

Badly op Quiz I: what widely consumed highcalorie, high-sugar beverage, often cited as a major contributor to childhood obesity, is probably sitting around in your kid’s school vending machine, even after the announcement of last year’s “Clinton Agreement?” If you said fruit juice, go to the head of the class. Pop quiz II: what “good for you” beverage, another staple of childhood, is likely to cause an allergic reaction among a large percentage of its target consumers? If you said milk, go to the head of the class and shake hands with the juice guy. I bring up these two examples to point out the hypocrisy that can accompany any major scare in consumer products. Yes, CSD companies are victims of their own bad decisions right now, but they certainly don’t deserve all the blame for the fact that we are fast turning into Fatso Nation. So what can the industry do to mitigate things before retailers look up and see a gaping hole in the coolers that Coke and Pepsi once dominated? Already, C-Stores are dropping their space allotment for CSD’s, and, while the fridge-pack will always be a grocery store staple, water (note the water report on page 28) remains the hot pick to eclipse soda in the next decade when it comes to sales numbers in that channel. Well, we could all start by tossing the playbook-to-world-domination that got beverage companies into trouble with the whole school

BEVERAGE SPECTRUM // MARCH

vending debacle to begin with. It was misguided. It’s a tiny part of the business, it didn’t involve killing off sponsorship deals (where the real marketing takes place) and it was a losing battle – if freaked-out social forces can try to keep Judy Blume and Harry Potter out of the school libraries, guys, you don’t have a chance. Someday, we’ll know why it was such a sticky wicket for the CSD companies to stay, but today, it’s all about rebuilding a product once regarded with the best of reputations. And again, that’s why I bring up juice and milk – because anyone ready to bash those products for their negative qualities (juice: lots of sugar, milk: lots of lactose-intolerant AfricanAmerican children) – knows that a lot of people drink them because there are positive, healthy traits associated with both of them. Both have vitamins, and both are natural (big farming’s own industrial machinery notwithstanding) and therefore avoid many layers of the processing that go into other products. CSD’s just don’t have that advantage. In cooler-headed times, that wasn’t much of a problem. No one drank them for their health properties. They drank them because they tasted good. And retailers need to help beverage companies recognize that once again. They need them to reorient sodas as a product class that has its own strength (they can taste great!) rather than an ersatz claim to be something it’s not (healthy). Does that signal some kind of retreat? Sure. But a retreat from what? From Doug Ivester’s calcu-

2007

lated attempts to increase Coke consumption into an ever-growing spiral, or from a mostlikely-profitable effort to spread sweetness and smiles? The latter is, in the end, a much more easily achieved business plan than the former. But instead, many companies have gone with an offense-oriented playbook, one that has put them in a precarious place that transcends any piece of the compromise present in the school vending deal. There’s been a coinciding push to blame parents for not policing their kids more carefully; there’s been this weird attempt to reorient sodas as healthy products; there’s been a stubborn resistance to improving what were once good products (by using, say, sugar) rather than give up on a bad idea (cheap ubiquity). And that’s unhealthy, the whole way around.

.OT ALL WATERS ARE CREATED EQUAL 4HANKS TO YOU 6OLVIC HAS BECOME ONE OF THE FASTEST GROWING NATURAL SPRING WATERS IN .ORTH !MERICA

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3PINSCAN WKS ENDING .OV

PUBLISHER’S TOAST

...or the last?

ADVERTISING 1123 Broadway Suite 301 New York, NY 10010 ph. 212-647-0501 fax 212-647-0565

EDITORIAL 1 Mifflin Place Suite 300 Cambridge, MA 02138 ph. 617-715-9670 fax 617-715-9671

PUBLISHER

Barry J. Nathanson bnathanson@bevnet.com EDITORIAL DIRECTOR

s I’ve said many times over the years, I’m a creature of habit. I like things in order and am methodical in my approach to life and business. Now, I’m being thrown for a loop. It’s the end of February, 2007 and my thoughts are already turning to May, 2009. It’s more than two years away, and I’m utterly confused about what I’m going to do the first Sunday through Tuesday of that month. You see, the FMI Show will not be taking place at that time. It is going to an every-other-year format. I am not dealing well with this change. For more than twenty years I have booked my flight to Midway in Chicago, reserved a room at the Holiday Inn City Centre, and headed to the McCormick Center to be dazzled by the latest and greatest endeavors the finest packaged goods marketers have to offer. FMI has always been a feast for the eyes and palates of the attendees. I’ve always marked the conference as the start of the serious business cycle for beverages, as the summer sell-in began. It is hard to disguise how important FMI has been for me. I would cover my corner of the show’s universe, beverages, over the course of the three days. I used to visit with more than 60 companies vying for the retailers’ and distributors’ attention. I caught up with old friends, sampled until I dropped, and enjoyed the heck out of the event. Now, May 2009 will signal a void in my life. But I could see it coming. For the past few years, the number of beverage exhibitors at FMI dwindled dramatically. The dynamics were changing. With consolidation, cost constraints and the distribution paradigm evolving, many marketers were faced with tough choices, and it appears that the FMI Show drew the short straw. The continued strength of

BEVERAGE SPECTRUM // MARCH

NACS and NBWA, the emergence of Expo East and Expo West, and the power of the Fancy Food Shows and regional events that dot the landscape demonstrates that trade shows are still important, but not FMI, which has even had to co-market with Fancy Foods in the past few years. What was it, I wonder, that caused beverage marketers to desert FMI? I strongly believe in the importance of these meetings. I also believe that marketing has drastically changed and it is imperative to keep up with these changes. There is no such thing as business as usual anymore. What is it about the other shows, that they have retained their relevance while FMI’s has faded? While I cannot give an answer for the desertion of FMI, it is a prime example of the evolution and revolution of business. I’ve always enjoyed the event and took much away from it. Hopefully, in its every other year format, the marketers will return, and I’ll be dazzled once again. Meanwhile, I am inviting you all to submit suggestions as to what I should do with myself in May, 2009. Please email me at bnathanson@bevnet.com with your ideas, suggestions, or sarcastic remarks. We’ll print the best ones next month.

John Craven craven@bevnet.com EDITOR

Jeffrey Klineman jklineman@bevnet.com ASSOCIATE PUBLISHER

John McKenna jmckenna@bevnet.com ART DIRECTOR

Matthew Kennedy mkennedy@bevnet.com PRODUCTION MANAGER

Adam Stern astern@bevnet.com BUSINESS MANAGER

John Schinn jschinn@bevnet.com SUBSCRIPTION INQUIRIES

Adam Stern astern@bevnet.com 617-715-9679 ARTICLE REPRINTS

500 copies or more FosteReprints Kelly Ganz kganz-blieden@fostereprints.com 800-382-0808 x142 BEVERAGE SPECTRUM PUBLISHING INC. CHAIRMAN

John F. (Jack) Craven jack@bevnet.com PRESIDENT

John Craven craven@bevnet.com Barry J. Nathanson, Publisher

2007

Beverage Spectrum is published 8 times a year by Beverage Spectrum Publishing, Inc. Beverage Spectrum Publishing, Inc. is a wholly owned subsidiary of BevNET.com, Inc., 1 Mifﬂ in Place, Suite 300, Cambridge, MA 02138

BEVSCAPE

WHAT’S HAPPENING ACROSS BEVERAGES

WATER CRUSADES

DEALBOARD Honest Tea Raises Cash The Cash: With a $12 million equity infusion from a team of distributors, Stonyfield Farm, Inc. (run by Honest Tea board member Gary Hirshberg) and Inventages Venture Capital Investment Inc., Honest Tea is expected to begin trying to show off its base position as market leader in the organic tea category. The Objective: The company has had strong sales and growth, especially with the high-end tea boom of the past two years, and has solid distribution both up and down the street and in natural foods and club channels in some major metropolitan areas, but hasn’t been able to escape the coasts in terms of distribution density. The Analysis: With a broadening portfolio of brands – they’re making juice drinks and kids’ drinks now – Honest faces the problem that it might be straying from its core strength, delicious teas. The cash could be a good way to get shelf space for those teas and build a national sales network, or it could further dilute a great brand. Coca-Cola Co. buys FUZE Beverage The Cash: $200 million for a highly innovative company that has shown loads of potential – witness owner Lance Collins being the featured “little guy” speaker at this year’s “Future Smarts” conference – but has yet to break through as a distinctive product. The Objective: Coke gets to broaden its non-carb portfolio, which has shown less strength than a syringe-free Canseco Brother in recent years, and hold off ongoing bottler dissent. FUZE, which has a broad, and at times confusing, product set that has yet to hit a home run, gets a rabbi to lead it into wider, more consistent distribution without the day-to-day concerns of an upstart beverage marketer. The Analysis: It’s hard to imagine a pair of companies that needed each other more, but there are questions: can Coke bring the consistency and distribution muscle to FUZE that’s kept it from breaking through in more major markets? If it does, will anyone buy it? And can Coke’s folks handle a product this New-Age-y, particularly given their problems with that category in the past? Depending on which way the health boom goes, this could be a huge score for relatively short cash – or else another bolt-on that doesn’t go anywhere.

BEVERAGE SPECTRUM // MARCH

2007

The growth of the bottled water category is fast becoming a hot topic in, of all places, Church. Last year, a group of politically active churches in the U.S. and Canada launched an attack on the bottled water industry, claiming that, from a social justice point-of-view, clean drinking water was more God-given resource than saleable commodity; some have begun to encourage boycotts. The liberal National Coalition of American Nuns has asked its members to try to avoid purchasing bottled water, while other groups have asked their congregations to do the same. The idea is one that has been discussed in other civic forums in the past – on the pages of the New York Times, for example, in a column by Tom Standage, author of A History of the World in Six Glasses. But recently, there has been slow increase in the adoption of water equality as a concept by religious groups who are interested in the environmental effects of economic disparity. In October, Troubled Waters, a documentary produced in concert by the National Council of Churches and the United Church of Christ examined water privatization on ABC. With water predicted to become even more of a commodity in the future, and a significant portion of the global population still suffering from a lack of potable drinking water, the issue is one that is gaining prominence alongside other environmental issues, according to a story from Religion News Service. That’s not to say that the social justice groups are being joined by the rest of the Christian community. In a recent public statement, the head of the Acton Group, which attempts to build understanding between religious and economic leaders, called the idea “water socialism.” “The religious groups in question point out that vast amounts of the world’s population lacks clean water for bathing and drinking,” wrote the Rev. Robert Sirico. “That’s true. It also so happens that many of these countries have undeveloped economies riddled by trade barriers and socialist structures.” Meanwhile, major beverage companies have been active in trying to combat third-world water shortages via their own charitable endeavors. Last year, Starbucks partnered with Equa, a California water company interested in donating money toward irrigation in Africa. Additionally, the Coca-Cola Co. has drawn extensive praise for its work in that area. Another take on the role of bottled water in religion has been adopted by Bottled Holy. This Stockton, Calif.-based company isn’t concerned about whether buying water is or isn’t holy – it’s concerned with selling Holy Water. Much like Kabbalah water (which was infused with the power of ancient Hebrew mysticism), this product has been blessed by priests. While Bottled Holy has yet to elicit uproar from any church folk, word is that the Vampire community is pretty peeved.

As delicious and refreshing as the words “higher profits.” FIJI Water is the fastest growing super-premium brand in the bottled water category. Consider this: 1) We are the only national brand whose dollar sales growth outpaces volume growth. 2) Our brand-loyal consumers are more likely to purchase premium brands and gourmet items. 3) Our base volume continues to grow in double digits despite base price per volume increases. Let FIJI Water drive higher profits back into your bottled water category.

Natural Artesian Water

BEVSCAPE

CONFERENCE CALENDAR

EXECUTIVE MOVES New Sun Nutrition has named Maigread Eichten as Chief Operating Officer. Kevin Self has joined Miller Brewing as Senior Vice President of Strategy and Planning. Steven C. Anderson has been named President & CEO of the National Council of Chain Drug Stores (NACDS). Global Spirits & Wine, Inc. appointed John Walter to the post of Director of International Corporate Affairs. Thomas W. Lance has joined the Boston Beer Company as Vice President of Operations. The Cott Corporation has appointed Thomas J. (TJ) Aruffo as Chief Information and Shared Services Officer. Sidney Frank Importing made three major staffing changes: Stuart Moselman has been named Chief Operating Officer, Matthew Frank has been named Corporate Vice President – Strategic Planning and Thomas Bruno, Jr. has been named Executive Vice President – Sales. The National Beer Wholesalers Association (NBWA) named Jesse McCollum as Director, Congressional Affairs. Soyuz Victan USA hired David Stringfellow as divisional VP of sales for the central region.

MARCH 25–27 National Association of Chain Stores Spring Expo Orlando, Fla. MARCH 27–31 Aquatech USA Orlando, Fla. APRIL 15–18 National Juice Products Association Annual Meeting Dana Point, Calif. APRIL 23–24 Expo Comida Latina Texas Houston, Tex. MARCH 2007

APRIL 2007

DRINKABLE YOGURT SALES ARE MULTIPLYING (but not really) Drinkable Yogurt is taking off around the world – but it’s still a bit behind when it comes to the U.S., according to AC Nielsen polling. In a recently-released report, “What’s Hot Around the Globe,” the company noted that while drinkable yogurt grew nearly 20 percent worldwide, in the U.S., the growth rate was much slower from mid 2005 to 2006 – just five percent. While that kind of growth is nothing to sneer at, it’s not a bonanza, either. What’s hanging for retailers are questions about the U.S. market – will it continue to adopt this major global beverage trend, or has yogurt burned itself out? Here’s a clue: Americans also ignored a global dairy boom, while continuing to pump up two other fast-growing categories – bottled water and sports drinks. Of course, maybe if they’re not drinking it, maybe U.S. consumers will pick up another yogurt trend being championed by Gruppo Danone. A new line of European beauty products, Essensis, touts yogurt as its chief ingredient. Way to push the functional drink envelope, guys – right out of the bottle.

BEVERAGE SPECTRUM // MARCH

2007

Channel Check

march 2007

SPOTLIGHT CATEGORY

JUICE

Juice

Dollar Sales

Change vs. year earlier

$3,379,794

-2.0%

$510,648,500

-2.6%

Apricot

$94,352

-26.4%

Cherry

$78,159,220

28.5%

Cider

$34,535,050

3.0%

Cranberry Cocktail

$652,551,000

6.2%

Cranberry

$158,508,500

8.6%

Fruit Drinks

$746,229,100

-4.7

Fruit Juice Blend

$321,936,400

26.6%

Fruit Nectar

$20,461,430

10.0%

Aloe Vera Apple

52 Weeks ending 1/28/2007 A comparison of bottled juice varieties shows what America is drinking – and what it’s drinking is a combination of everything it has always drunk, just mixed together or fizzed up. A look at the numbers shows increases in juice blends and sparkling juices, a pair of products that often contain blends. Longtime titans lemonade and apple are down a bit, and grapefruit juice – perhaps due to brutal supply problems, or else just due to ongoing Atkins backlash – is on the decline, as well.

Grape

$218,006,100

0.7%

Grapefruit Cocktail

$46,170,670

-10.8%

Grapefruit

$46,780,460

-5.9%

Juice & Drink Smoothies

$29,504,600

-25.4%

Lemon/Lime

$92,216,540

3.4%

Lemonade

$121,264,100

-4.6%

Orange

$38,110,870

12.9%

Pineapple

$2,790,075

11.5%

Prune/Fig

$86,934,800

8.6%

Sparkling

$74,889,190

12.9%

Tomato/Vegetable Cocktail

$236,609,000

7.1%

Other Fruit Juice

$72,013,020

37.3%

SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart through Jan. 28, 2007

TOPLINE CATEGORY

VOLUME

52 Weeks ending 1/28/2007

CSD’s

ENERGY DRINKS

$13,299,160,000 -1.2%

$654,027,900 42.9%

BOTTLED WATER

SPORTS DRINKS

$4,628,549,000 14.4%

$1,582,778,000 10.2%

BEER

TEA/COFFEE

$8,907,629,568 2.5%

$1,203,511,000 26.2

BOTTLED JUICES $3,564,381,000 3.2%

BEVERAGE SPECTRUM // MARCH

2007

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

Daily’s Ready To Drink pouches offer consumers a fun way to get great tasting frozen blended style drinks without the blender. They offer you a great way to squeeze more profit out of your

IT’S ABOUT CONSISTENCY

ready-to-drink category. Pouches are available in Margarita, Strawberry and today’s hottest Mojito flavor. Just stick them in the freezer for a couple hours and squeeze out a delicious cocktail with an “out of the blender” consistency. Innovation is one of the pillars we build our brand on. Consistent performance is the promise we make to you. WHERE GREAT COCKTAILS START.

Channel Check

CSDs

march 2007

Dollar Sales

Change vs. year earlier

Coca-Cola Classic

$1,904,167,536

-2.9%

Pepsi

$1,542,257,099

-3.5%

Diet Coke

$1,193,839,023

-0.3%

Diet Pepsi

$799,607,123

-1.3%

Mountain Dew

$741,169,348

2.1%

Dr Pepper

$591,168,549

-0.2%

Sprite

$579,656,992

-3.4%

Caffeine Free Diet Coke

$346,965,773

-7.9%

Diet Dr Pepper

$279,888,507

4.3%

Diet Mountain Dew

$250,853,875

10.3%

Heading Up: Diet Mountain Dew

52 Weeks through 1/27/07 SOURCE: AC Nielsen/Citigroup Total U.S. food/drug/mass

ENERGY DRINKS

Dollar Sales

Change vs. year earlier

Red Bull

$41,917,216

32.1%

Monster

$26,763,575

55.3%

Full Throttle

$9,141,589

74.1%

SoBe

$9,134,776

4.1%

Diet Red Bull

$9,005,743

34.9%

Rockstar

$8,095,644

8.6%

Amp

$7,423,844

78.8%

Diet Rockstar

$4,315,389

66.5%

Monster Assault

$2,232,345

25.0%

Diet SoBe

$2,122,972

21.7%

Heading Up: Tab Energy

4 Weeks through 1/27/07

SOURCE: AC Nielsen Total U.S. food/drug/mass

CONVENIENCE/PET STILL WATER

Dollar Sales

Change vs. year earlier

Private Label

$509,942,800

21.6%

Aquafina

$496,678,100

14.3%

Dasani

$431,484,600

22.9%

Poland Spring

$249,825,500

21.8%

Propel

$190,569,200

1.2%

Glaceau Vitaminwater

$173,292,100

128.1%

Arrohead

$166,930,400

14.1%

Deer Park

$137,080,100

25.4%

Dannon

$121,264,600

-24.8%

Ozarka

$97,141,360

19.4%

Heading Up: Glaceau vitaminwater

52 Weeks through 1/28/07 SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

BEVERAGE SPECTRUM // MARCH

2007

RTD TEA

Dollar Sales

Change vs. year earlier

AriZona

$267,106,400

21.7%

Lipton

$171,316,900

188.4%

Snapple

$113,843,200

16.4%

Diet Snapple

$84,333,970

-3.7%

Lipton Brisk

$83,036,180

5.6%

Lipton Iced Tea

$54,187,660

28.8%

Nestea

$49,589,370

240.1%

Private Label

$30,625,430

10.2%

Nestea Cool

$14,996,860

-72.5%

SoBe

$14,060,750

-6.5%

Heading Up: Nestea

52 Weeks through 1/28/07 SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

SPORTS DRINKS

Dollar Sales

Change vs. year earlier

Gatorade

$685,105,800

1.6%

Powerade

$197,922,200

6.9%

Gatorade Frost

$141,282,200

4.2%

Gatorade Rain

$124,642,600

3,572.7%

Gatorade All Stars

$108,777,500

20.3%

Gatorade X-Factor

$93,996,820

-2.8%

Gatorade Fierce

$85,234,580

-19.1%

Gatorade Xtremo

$16,310,260

-28.4%

Powerade Option

$15,607,130

132.2%

Gatorade Ice

$13,947,610

-22.3%

y drink is r me-to energ e th o n a te u in Every m ring! born. How bo inal ffee, the orig o C k c o h S Why not sell rink that every D e e ff o C d te a Hyper-Caffein g about! body is talkin mpetition! We have no co bridges the Shock Coffee an energy gap between ffee drink. drink and a co

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Heading Up: Powerade Option

52 Weeks through 1/28/07 SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

IMPORT BEER

Dollar Sales

Change vs. year earlier

Corona

$481,247,840

5.6%

Heineken

$298,996,416

7.9%

Corona Light

$122,782,032

10.7%

Tecate

$83,582,096

5.3%

Heineken Light

$54,280,396

2,800.9%

Modelo Especial

$53,612,056

27.5%

Labatt Blue

$48,843,156

-4.6%

Becks

$48,347,956

6.7%

Newcastle Brown

$47,349,736

18.3%

Guinness Draught

$46,961,628

9.3%

Heading Up: Heineken Light

52 Weeks through 1/28/07 SOURCE: Information Resources Inc.Total food/drug/mass excluding Wal-Mart

MARCH

2007

\\ BEVERAGE SPECTRUM

NEW PRODUCTS Beer Mateveza USA, LLC and Butte Creek Brewing Company have introduced Mateveza Yerba Maté Ale, an organic, naturally caffeinated pale ale brewed with yerba maté, the ancient tea from South America. Mateveza will be available in 22 oz. bottles throughout California and Oregon at retailers including Whole Foods, Wild Oats, and local coops and natural food stores. Mateveza is certified organic by CCOF and costs $3.99 per bottle. For more in formation, call Mateveza at (415) 509-1695. Miller Brewing Company is rolling out a new “chelada-style” light beer, Miller Chill, this month. Based on a Mexican beer recipe and targeted at women in their mid-20s, this product contains a hint of lime and salt, and will be priced at a level between Miller Lite and imports. It will be available off-premise in Florida, Arizona, Texas, New Mexico and San Diego until summertime. For more information, call Miller Brewing at (414) 931-3848. Anheuser-Busch is introducing Michelob Lager and Michelob Light in elegantly re-designed embossed teardrop bottles based on the original package launched in 1961. Additionally, drawing on its history, Michelob will once again be brewed with 100 percent malt, as will Michelob Light and Michelob AmberBock. AmberBock and all of Anheuser-Busch’s specialty beers under the Michelob family brand name will now be packaged in a new embossed bottle with a raised ridge around the neck. Michelob Lager and Michelob Light will be available in 12 oz. bottles in 12-packs and 20-packs. For more information, please call Anheuser-Busch at (314) 577-3866. Spirits Boisset America is launching IDÔL Vodka, which attempts to bridge the world of fine wines and spirits using world-class grapes from Burgundy vineyards to create a vodka

BEVERAGE SPECTRUM // MARCH

2007

with a character and smoothness that will charm wine lovers. Using Pinot Noir and Chardonnay grapes as well as pure French Burgundian water from the Cote d’Or, the vodka is distilled seven times and filtered five. The product will be rolled out nationally in the spring with a cost of $33 for a 750 mL bottle. For more information, call Boisset America at (310) 689-7582. Pernod-Ricard is launching Seagram’s Tropical Thunder, a new line extension to its Gin and Juice prepared cocktail family. Tropical Thunder has a mango taste and a vibrant orange color. Seagram’s Gin & Juice Tropical Thunder will launch at retail in March and will be available in 750 mL, 375 mL, 200 mL, and 50 mL sizes. The launch will be supported with advertising, POS materials and off-premise sampling (where legal). Tropical Thunder will be parity priced ($9.99) with the other Seagram’s Gin & Juice Prepared Cocktail flavors. For more information, call Pernod-Ricard at (914) 848-4787. Miami, Fla. will serve as the launch market for another spirit, Cuca Fresca, a new Brazilian line of premium cachaças made specifically for the U.S. and international market. Cuca Fresca (“Cool Head”), which will be distributed in 750 mL bottles, has teamed up with Miami-based Prestige Chateaux & Domains, a boutique distributor of highend wines and spirits, to bring this premium cachaça Florida with additional points of distribution across the U.S. to be announced soon. For those who enjoy cachaça neat or on the rocks, the Ferreiras also developed Pura Gold, a variation of the spirit. Gold in color, this extra smooth cachaça is carefully aged in oak barrels for up to five years, giving it distinct hints of oak and vanilla. For more information about sales and distribution for Cuca Fresca Cachaca and Pura Gold, please call Prestige Chateaux at (914) 646-0749. Grey Goose has introduced its newest flavor extension, Grey Goose La Poire, the first super-premium pear-flavored vodka in the U.S. La Poire first became available nationally to consumers beginning in Feb-

ruary 2007. To make this product, a natural essence of Buerre d’Anjou (Anjou Pears) is artistically blended with the vodka. The 80 proof super-premium spirit is packaged in beautiful frosted glass bottles, with a clear window in the shape of a goose silhouette that reveals ripening pears and an arrangement of pear blossoms. La Poire will be available in 750 mL and 1 L bottles. This product will be line-priced with other Grey Goose varieties. For more information, call Grey Goose at (917) 351-8635. Speaking of Grey Goose, that product’s birthplace, Sidney Frank Importing Co., is launching Tommy Bahama Rums this spring. An ultra-premium rum from Barbados named for the luxury sportswear line, this product will come in two distinct flavors: Tommy Bahama White Sand and Tommy Ba-

NEW DRINK REVIEWS Clearly Canadian Enhanced Water MAX Life Energy Teas Shotgun Energy Drink H2Odwalla Alexs’ Lemonade Cherrish Aquafina Alive Spike Shooter NOS Fruit Punch BooKoo Jugo Guayaki Maté: New Flavors C1.5 Energy Drink IQ H20 Coolah Energy Drink Snapple Red Tea Zola Açaí: New Flavors Xenergy Big Apple Energy Drink Odwalla Soy Smart From February 1 to press time. To see reviews, visit www.BevNET.com

BEVERAGE SPECTRUM // MARCH

2007

hama Golden Sun. Both will retail for about $27.99 for the 750 mL sizes, and will be available in the 50 mL, 375 mL, 750 mL, 1 L, and 1.75 L sizes. They will be available nationwide. For more information call Sidney Frank at (619) 857-2774. Jose Cuervo International will release the 2007 edition of Reserva de la Familia in U.S. stores beginning this month. This year marks the 12th edition of Reserva, an awardwinning añejo (aged) tequila made from hand-selected, 100 percent pure blue agave grown in the Cuervo estate’s richest volcanic soils. Each year, the Cuervo family selects a renowned Mexican artist to paint the new handcrafted wooden box. This year’s edition features Pedro Friedeberg, best known for his signature “Chair-Hand” sculpture. Each bottle is carefully assembled by hand, numbered and dated, hand-dipped in wax and then placed in the handcrafted wooden box. Reserva de la Familia can be found in most U.S. states for approximately $100 per 750 mL bottle. For more information, call Diageo at (212) 590-0263. Juice Tropicana Products is now offering the first national orange juice to include omega-3s, the fatty acids known for helping to promote heart health. The juice will appear in grocery stores nationwide beginning this month. Tropicana Healthy Heart with Omega-3s includes a high-quality, specially encapsulated, marine-based source of omega-3 eicosapentaenoic acid (EPA) and docosahexaenoic acid (DHA) fatty acids to offer consumers heart-health benefits in a convenient way at breakfast. Tropicana Healthy Heart with Omega-3s is available for a suggested retail price of $3.49 for a 64 oz. carton, which is the same as the suggested retail price for other Tropicana Pure Premium Orange Juices. For more information, call Tropicana at (312) 821-1594. O.N.E. (One Natural Experience) World Enterprises has launched O.N.E. Amazon Açaí, the second product offering in the company’s line of healthy, natural beverages from Brazil. O.N.E. Amazon Açaí is a

NWNA6074

100 percent natural beverage made from açaí berries that are ”wild crafted” in the Amazon Rainforest, meaning they are harvested in nature, not farmed. O.N.E. Amazon Açaí comes in single-serve 11 oz. readyto-drink, pull-tab Tetra-Paks, and will be available in the US and Canada by the time of publication. The suggested retail price is $2.49 to $2.99. For more information, contact O.N.E. at (310) 566-3983. Also in the world of Acai, Zola Açaí recently launched two new organic flavors: Açaí + Pineapple and Açaí + Blueberry. Zola Açaí is made from 100 percent unfiltered pulp of antioxidant-rich Açaí berries and infused with energy-sustaining Guarana powder, giving consumers health and power. They are available in 11 oz. singles and in 12-pack cases for bulk purchases, both of which ship in updated packaging suitable for both produce coolers and grocery displays. Zola Açaí Power Juice is 12-month shelf stable. For more information, contact Zola at (650) 776-7968.

Mixers Creative Juices has announced the launch of Mixerz All-Natural Cocktail Mixers, a highquality cocktail mixer available for retail and on-premise locations. They are currently available in seven flavors: Bloody Mary, Cosmopolitan, Mango, Margarita, Mojito, Pomegranate and Sour Apple. Each Mixerz flavor is hand-crafted in 200 gallon microbatches, among the smallest and most controlled batches available for retail. Each featured flavor was specifically created for consumers to use individually or have the option to mix the flavors together. Mixerz are available in 750 mL handmade glass bottles for the suggested retail price of $8.99-$10.99. The bottles are narrow and sleek with a custom designed neck for easy pouring and handling. For more information, call Creative Juices at (978) 762-MIXR. From the importer Brands of Britain come Fever-Tree Premium Mixers, a line of high-end cocktail mixers including tonic

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2007

For sales inquiries please contact Cindy Lane at 203-358-2129 or clane@ switchbev.com

water, bitter lemon, club soda and ginger ale. Distribution is expected to be nationwide by this summer with suggested retail pricing of $5.99 for a 4-pack of 200 mL bottles. For more information about these allnatural mixers, call Talbert Communications at (212) 675-5525. Stirrings, a manufacturer of all-natural cocktail ingredients, has expanded its Cocktail Mixer and Rimmer brand cocktail garnish lines with the launch of two new products, Passion Fruit Mojito and Grapefruit Margarita. Like Stirrings’ 16 other varieties of cocktail mixers, the suggested retail price for the Passion Fruit Mojito and Grapefruit Margarita Mixers is $9.99 - $10.99. Suggested retail price for the corresponding Rimmer cocktail garnishes is $4.99 - $5.99. For more information, contact Stirrings at (508) 324-9800. Energy Drinks BooKoo Beverages has released a juice/energy hybrid with 99 percent juice, Jugo.

BEVERAGE SPECTRUM // MARCH

2007

The exotic taste profile of Jugo consists of papaya, white grape, orange, guava and passion fruit. Jugo, which means “Juice,” is expected to appeal to both Hispanic and mainstream consumers. This product will be distributed nationally for approximately $2.49 per can. For more information, call BooKoo at (866) 568-3322. From Fuze Beverages comes NOS Fruit Punch, a flavor extension to its NOS energy drink. Available in 16 oz. cans, NOS Fruit Punch brightly-colored red labeling on its package. NOS Fruit Punch will be line-priced with NOS, with distribution beginning in select markets. For more information, contact Fuze at (201) 461-6640. Fever Beverage USA is introducing Fever Low Calorie, the first ever low calorie sexual stimulation beverage. This product is naturally flavored and has only 20 calories per 14 oz. serving. This herbal aphrodisiac beverage is available in most major markets across the nation. It is infused with products like green tea, caffeine, horny goat weed

and panax ginseng and has a ginger/vanilla flavor. For more information contact Fever at (212) 999-5585. Tea Snapple has launched Snapple Red Teas on a national basis. This is a line of naturally caffeine-free teas that contain protective antioxidants and Vitamin C, and may contribute to a healthy immune system. This product is the latest addition to the brand’s “good for you” platform, launched in 2006, which include white and green tea products. Made from high quality ingredients and real sugar, Snapple Red Teas are available in unique flavors that complement the Rooibos taste, including Acai Mixed Berry, Peach Pomegranate and Mandarin Tangerine. Snapple Red Tea contains less than 100 calories per bottle. Snapple’s super premium line of White, Green and Red Teas is available at major retailers, grocery and convenience stores nationwide in a 17.5 oz. bottle for a suggested retail price of $1.39. For more information, please call Snapple parent CSAB at (914) 612-4514. Old Orchard Brands has launched Old Orchard Brands Premium Tea, a new line of ready-to-drink teas infused with organic juices at the top of the USDA’s ORAC chart for antioxidant-content. The line features four distinctive blends – Green Tea Pomegranate, Green Tea with Honey and Lemon, White Tea Southern Peach and Red (Rooibos) Tea with European Black Currant. Old Orchard Brands Premium Tea is certified organic by the USDA and contains no preservatives, artificial colors and/or flavors. These products will be sold in 64 oz. bottles with a suggested retail price of $2.99. For more information, call Old Orchard at (616) 233-0500. From Ferolito Vultaggio & Sons comes Black & White Tea,, a 23.5 oz. can filled with a mixed brew of black and white teas. This product is sweetened with can sugar and is 100 percent natural. The tea is being introduced nationwide this month and carries a suggested retail price of $.99. For more information, call AriZona at (513) 357-4750.

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berry. For more information, call The Switch at (203) 358-2133.

Dairy New England dairy maker HP Hood has introduced Simply Smart Chocolate Fat Free Milk, a product with the rich, indulgent taste of chocolate 2 percent milk minus the fat and extra calories. Every 8 oz. glass contains 12 grams of protein, 35 percent of the daily value of calcium and 25 percent of the daily value of vitamin D. Additionally, Simply Smart Chocolate Fat Free Milk contains no artificial sweeteners and is produced without the use of artificial growth hormones. This product is available at grocery retailers throughout New England in 64 oz. containers. For more information, call HP Hood at (617) 887-8321. CSD’s Ardea’s airforce Nutrisoda has introduced another functional soda, Renew. Renew is the first soda with a full gram of dietary fiber; it is also boosted with additional amino acids, vitamins and minerals. According to the manufacturer, watermelon and blueberry-flavored Renew’s formulation supports active intestinal health and may help boost the body’s immune system. Packaged in an 8.4 oz. slim can, Renew contains zero sugar, zero sodium, zero aspartame and zero caffeine. It does contain soluble dietary fiber, L-Glutamine, L-Arginine and b-vitamins. airforce Nutrisoda is available nationwide at select retail stores including SuperTarget, fine grocers, national airports, hotels, cruise lines, restaurants, clubs, spa locations and online. This product is line-priced with other airforce products. For more information, call Ardea at (612) 677-1717. The Switch, a 100 percent juice carbonated beverage, has introduced a new 8.3 oz can. The new portable, “slim” can is great for school or any other place an active teen frequents. And at 8.3 ounces, it also directly addresses the wave of growing concern over portion size and number of calories. The Switch slim cans are available in Black Cherry, Grape, Orange Tangerine, Tropical Punch and Watermelon Straw-

BEVERAGE SPECTRUM // MARCH

2007

Malternatives Aiming to become the high-end leader in the fast growing energy with alcohol category, Catalyst Beverage Company has launched Catalyst. At 6 percent alcohol by volume, Catalyst is a carbonated, citrus flavored product that contains caffeine, taurine, Lcarnitine and imported malts. In contrast to competitors’ products, Catalyst is clear. Currently available in California with other Western states planned for 2007, Catalyst is packaged in a sleek, 12 oz. aluminum bottle with modern black and orange graphics. Available in single serve bottles and 4-packs, Catalyst’s master carton features the same contemporary graphics as the bottle and a high-gloss finish, ideal for eye-catching retail displays. For more information, please call Catalyst at (310) 374-6893. Sports Drinks New Sun Nutrition, a developer and distributor of nutritional supplements, healthy snacks and beverages, has reformulated and repackaged FRS, the company’s Free Radical Scavenging (FRS) antioxidant health beverage. The product is now available in a new, recyclable can and comes in all-natural and low-calorie versions. The low calorie line (Wild Berry, Orange and new Peach/Mango) has 25 calories per can. The all natural flavors (Orange and Lemon/Lime) are sweetened with organic evaporated cane juices and contain no added preservatives, additives or coloring. FRS ready-to-drink is currently available in select West Coast markets including Santa Barbara, San Diego and Seattle. New Sun Nutrition’s 2007 retail distribution goals for FRS cans include expanding Direct Store Delivery distributor alignments throughout the West Coast and begin expansion to select East Coast markets. It carries a suggested retail price of $2.29 per bottle. For more information, contact New Sun Nutrition at (310) 854-8151.

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ith an increasing number of consumers hitting the bottle in favor of drinking from the tap, bottled water brands are bubbling to the surface by, well, by the truckload. For retailers, the challenge lies in finding the shelf space for it all. Part of the problem is that not all of the $11 billion in bottled water sold in the U.S. last year is made – or marketed – equally. But that confusion also provides retailers with the opportunity to stock value, mid-range and premium brands. Especially when it comes to value-priced purified water, consumers – especially those who are in the habit of buying cases of the stuff, and who have driven the massive growth of the category – aren’t so much brand-loyal as price-loyal. When you get into the higher-end spring and artesian waters, as well as imports, the stocking equation becomes even more complicated – but it can also be an advantage. Eric Skae, managing director of Iceland Spring in Orangeburg, New York, observes that an increasingly health-conscious America is interested in what, exactly, goes into its water. “More and more people are interested in premium water; water from a source that they know is pristine, pure, untouched,” he said, adding that his company receives regular calls inquiring about mineral content and pH levels.

BEVERAGE SPECTRUM // MARCH

2007

Skae believes that it’s up to the water brands to convey this information to the consumer. “We have put together brochures about our water that can be laid out next to the water so that people can read about pH, mineral content, and so on,” he explained. “I think it’s the brand owner’s responsibility to do that. If the brand owner does a good job of that, it will help the retailer.” Jackie Fox, director of sales at the Clearly Canadian Beverage Corporation in Vancouver, British Columbia, emphasizes that retailers must really know their customers in order to determine how much of each subcategory to stock. “The biggest challenge by far would be interpreting what role each different offering plays,” she said, noting that while some consumers may purchase based on price, others buy for flavor, mineral content, or how the water is distilled. The key, she says, is identifying the current consumer need that is not currently being met. Charlie Moro, president and founder of CFS Consulting, LLC in White Plains, New York, observes that the biggest issue facing retailers is building a sound variety around the private label brand that many stores offer, rather than looking to one of the big brands like Dasani, Aquafina or the Nestle Waters of North America labels. Some opt to comple-

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ment their private labels with waters from around the world, for example, Krispies, they all need to stand on their own and bring some additional while others stock premium products. “Most of them have tried to make value,” he said. Similarly, if a bottled water manufacturer that releases four a brand statement in terms of their private label, but there is this whole different sizes of the same bottle – a sport bottle, for example – retailers other plethora of brands, waters from different countries and flavored wa- should choose one size, and call it a day. “At some point in time, you’ve got ters that they need to incorporate,” he said. “The struggle has been how to to say, ‘stop. I understand you have this, and I understand it’s good, but I pick those particular players.” can’t have six more varieties of the same thing.’” The problem, Moro says, is when retailers stock too much of the same Grace Jeon, vice president of marketing at artesian water manufacturer thing. “It’s one thing to have flavored waters for the sake of argument, but Fiji Water in Los Angeles, California, suggests that value brands be kept what you wind up seeing sometimes is four or five lines of the same thing,” to a minimum – an idea which would certainly benefit her own fasthe said. “Everyone has a lemon-flavored water; but you could use the space charging brand, which has sworn to be the top-selling premium water for a sparkling water, a European brand, or a premium brand.” before the end of the year. Like Moro, Fox cautions against stocking too many similar SKU’s, since “You would certainly provide more space for those brands, but you don’t in doing this, retailers run the risk of like-entries cannibalizing current need 10 different brands within each of those [value] segments, because at sales. “New ‘options’ will hopefully convert the end of the day, consumers are compelled other beverage consumers as well as increase to purchase based on price,” she said. Featurthe bottles purchased by current water using several premium brands – including the ers,” she said. However, this variety can trip consumer education material that many of up retailers: there are a number of unproven these companies supply – offers the retailer brands out there that have yet to build trust the chance to trade up those consumers who with the consumer base. “Retailers must be don’t necessarily look at price first. confident that there will be a strong launch Retailers employ a number of merchanplan to support these new brands.” dising strategies for water – again, dependToo many SKU’s can also result in items ing on store layout and how their customers becoming quickly out of stock. “Some retailmake their purchasing decisions. Fox suggests ers have a problem keeping things in stock positioning enhanced water on one side of because they have too many SKU’s,” said Tom the display, and unflavored on the other, Hipwell, at Nestle Waters North America separating the products further based on in Greenwich, Connecticut. “They haven’t brand, size and price. Seasonality, too, plays a managed their assortment down so that significant role: water sales increase, obvithey have proper shelf space on the products Tom Hipwell, ously, during warmer months. Fox says that they are carrying, or the products that are sellNestle Waters North America retailers can cash in on this by making waing with high velocity.” ter more available in racks, cooler barrels, Nor should the retailer attempt to be evcase displays and pallets. erything to everyone; because space is limited, Deep-well sets or case packs – the packstores must first determine how much real estate the category deserves, ages of 24 half-liter bottles – have also proved successful when retailers and then revert to its banner strategy to decide what brands to feature. stock them on pallets on their bottom shelf, Hipwell notes, because it “You need to evaluate the turn-rate of each product, growth potential enables stores to stock large quantities. “It’s easy to manage off the pallet, of each sub-category and potential adjacencies that may not be experienc- and retailers are profitable,” he said. “You don’t need to sell it at cost, ing strong growth,” Fox advised. the way you would with carbonated soft drinks. They can sell this with a So, is there a magic number of brands that retailers should stock? mid-teens margin and be quite successful.” Not really, since it all depends on your strategy, and what type of clientele Hipwell observes that retailers face the additional challenge of stocking you are targeting. items that fall under the water category, but aren’t technically water. “This Fox believes that each brand should be regarded as a separate entity. isn’t necessary a bad thing, but if a retailer wants to bring it in, he’s got “A large company with multiple brands may be able to provide flashy pro- to make space for it,” he said. “It’s important that retailers take advantage grams, free coolers and various display vehicles, but that doesn’t necessar- of the trends and move quickly. The ones that move quickly into taking ily mean that all of their SKU’s deserve real estate in store,” she said. At the new items on, finding space for them and deleting space on things the same time, one large company may, in fact, be able to satisfy many that are not growing, will win.” consumer requirements. “Once the retailer develops a strategy and puts In acknowledging that it is impossible to please everyone, those retailers benchmarks in place for what is on their shelves, the consumer will quickly that focus on what their consumers’ needs are, and which brands are fodecide whether a certain offering will have longevity in store.” cusing on building the category, will reap the most success, Fox maintains. Smaller brands that fall under the same large umbrella should also be “This is what will create pull from the stores – an offering that meets the treated separately, Moro says, likening the water category to the cereal consumer demand, turns quickly and drives growth for the supplier, and section. “If Kellogg’s comes out with five more line extensions of Rice makes great profit for the retailer.”

Some retailers have a problem keeping things in stock because they have too many SKU’s. They haven’t managed their assortment down.

BEVERAGE SPECTRUM // MARCH

2007

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BRAND NEWS: BOTTLED WATER PepsiCo – Aquafina has launched Aquafina Alive - a low calorie, vitamin-enhanced water beverage. Aquafina Alive is available in three flavor combinations - Berry Pomegranate, Peach Mango and Orange Lime - and hits shelves nationwide this month. It is made with a splash of fruit juice and has 10 calories per serving. Aquafina Alive will be available in 20 oz. plastic bottles and 16.9 oz. 6-packs in grocery and convenience stores nationwide. Additionally, Lifewater, Pepsi’s SoBe subsidiary, will be available in 6-packs by the end of April in Pomegranate Cherry, Blackberry Grape, Orange Tangerine and Strawberry Kiwi. Maddie’s Beverage Company – Maddie’s Beverage Company, the maker of Wateroos water-filled drink boxes, has recently expanded its distribution to include Nature’s Best, Tree of Life, UNFI East, DPI West, and Kehe, making the product available to retailers across the nation. Wateroos is the only all-natural children’s water beverage packaged in drink boxes that makes water fun for kids to drink. All Wateroos drinks contain nothing but water, with no sugar, artificial ingredients or sweeteners. Wateroos are

BEVERAGE SPECTRUM // MARCH

2007

available in four natural flavors: Original (unflavored) Wateroos, All-natural Apple, All-natural Grape and All-natural Berry. Wateroos are packaged in single-serve 8 oz. drink boxes. Each box features a different water-loving "Waterooligan" character and sports, educational games, and puzzles on the back. Liquid Salvation – This company, known for its bottled water in a flask, an irreverent attitude, and youthful appeal, recently launched its newest product, Liquid Salvation Ultra Hydrating Water. The company uses a patented, electrolyzed process that de-ionizes the water and breaks down the surface tension of the water molecules for optimal hydration. Liquid Salvation, Inc. introduced its first natural spring water in a flask two years ago in response to a booming but otherwise drab bottled-water market. Although sold primarily through traditional beverage channels, Liquid Salvation has also been a big hit in night clubs and ski resorts, as well as at music festivals and sporting events. Based in Lake Tahoe, Nev., Liquid Salvation is distributed in 10 states, with plans underway to expand distribution in all major markets by summer. H2Om – H2Om LLC., the producers of H2Om: water with intention, has announced expanded distribution and availability of the world's first "interactive" natural spring water. Infused with energy through words, music and the power of your own thoughts and intentions, H2Om supports the concept that what you focus your mind, emotions and intention towards will become your reality. H2Om has created a line of seven interactive infusions: Love, Perfect Health, Gratitude, Prosperity, Will Power, Joy and Peace, and is now available at Southern Pacific Whole Foods markets and health food stores, as well as online. AQUA2GO – Founded by the owner of a psychiatric facility destroyed by Hurricane Katrina, AQUA2GO is a boxed water product aimed at adults and children. By using aseptic packaging and a reverse osmosis process, AQUA2GO claims a 5-year shelf life and a guarantee of 100 percent purified water. A percentage of profit from AQUA2GO sales go to a hurricane assistance program in the South.

PowerWater â&#x20AC;&#x201C; PowerWater currently is in limited distribution in the Northeast at Shaw's, Big Y, Associated Grocers New England, and approximately 50 additional retail outlets. The company is planning a full launch of PowerWater in April or May, providing discussions with a new West Coast distributor are realized. The product's message is "optimal hydration with the added benefit of oxygen.â&#x20AC;? PowerWater has a TDS (Total Dissolved Solids) of 0-1 part-permillion, and contains infused oxygen.

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2007

Healthy Hydration, LLC â&#x20AC;&#x201C; The makers of Fuze recently launched Water Plus in Los Angeles, Calif. with DPSU, as well as Hawaiian Sun in Hawaii, Maine and Vermont. Water Plus was also just authorized in all Hannaford, Foodtown, Kings, Wegmans, and Whole Foods locations. This product encompasses an electrolyte-enhanced water, as well as an exciting line of Water Plus Organic flavored water beverages, each with its own distinct characteristics. Each of the Organic beverages is enhanced with various healthful nutraceutical ingredients. Initial offerings include: Fruit Punch, Orange Tangerine, Acai Berry, Dragonfruit Kiwi and Passionfruit Citrus (Energy). Organic Water Plus (18 oz. bottles) balances the purity of water with organic cane sugar. All flavors contain 50 calories per 8 oz. serving, and each includes their own characteristics from electrolytes, to antioxidants, to vitamins or energy ingredients, all with no artificial colors or sweeteners. Water Plus (25 oz., 1 L) is formulated with pure, clean tasting vapor-distilled water, enhanced with electrolytes and essential minerals. Fred â&#x20AC;&#x201C; Meet Fred. Launched in the summer of 2006, Fred arrived in Manhattan from a secluded spring upstate and hopped on the shelves of convenience stores and boutique groceries in Greenwich Village. In his first month, Fred moved in with 100 retailers. A month later he was in hundreds more. By the fall he had been spotted hanging out with Mayor Bloomberg, Jodie Foster, P. Diddy and Heath Ledger. Fred's slim shape makes him easy to carry and his unique combination of a balanced pH and super low TDS [<20 ppm] gives him a uniquely pure, velvety smooth taste. He's the perfect companion for the active urbanite, and New York is just

the beginning. Fred is looking to branch out into other metropolitan areas, starting with Miami, Chicago, L.A. and San Francisco. After all, you can never have enough friends. FIJI Water – FIJI Water, the #2 premium bottled water in grocery and the #1 premium brand in convenience stores, experienced nearly twice the growth rate of the bottled water category in 2006. In January 2006, FIJI Water launched a partnership with CSBG in North Texas, and in late 2006, FIJI Water gained distribution into Duane Reade, the top drug store chain in New York. In March, it will have a presence in over 1,500 Speedway America Convenience Chain locations, as well as BP stores. The 9 oz. Lil’ FIJI bottle, launched in 2006, will be available nationally in 2007, expanding into retail locations nationwide by this summer. Icelandic Water Holdings – Icelandic Global recently launched a sport-cap bottle, joining its 1 L and .5 L bottles. To keep up with U.S. demand, Icelandic Water Holdings has purchased

BEVERAGE SPECTRUM // MARCH

2007

1,500 acres of land in Thorlakshofn, Iceland on which to build a new 40,000 sq. foot bottling facility. The company officially broke ground on the site in December 2006 for the facility, which is set to open in late 2007. The new state-ofthe-art bottling plant will have a capacity of 1.8 million bottles per day. Iceland Spring – The New Year brought with it a change in the face of Iceland Spring water, which will soon be revealed. While Iceland Springs’ trademark bottle remains the same, the enhanced label design will allow consumers to easily discern Iceland Spring’s quality. Pure Distribution LLC, Iceland Spring’s exclusive distributor in the U.S., will roll out the sleek, newly-labeled bottles this spring. Highlighted changes include more defined scenic views of Icelandic snow-capped mountains, a more prominent display of the Iceland Spring logo itself, as well as the use of a new, vibrant blue background. The refurbished look of Iceland Spring comes at the heels of the recent launch of their 24 oz. “Viking Size” bottle.

Nature 101 – Nature 101, an innovative brand committed to bringing consumers nutritious and fun food products, proudly announced the launch of its unique Vitamin+Fiber Water at the Winter Fancy Food Show. This product comes in four refreshing flavors: Mixed Fruit, Peach, Guava, and Orange. The water contains Vitamin C and three important B vitamins. In addition to the vitamins, Vitamin-Fiber Water also contains a clear soluble fiber that has the texture of small round jellies. The fiber is tasteless but is an added health benefit to the unique beverage. Ami Brands – Ami Brands’ top seller, the European spring water Volvic, recently introduced a 1 L 6-pack. The product is designed to have a high visual impact on the shelf. Additionally, Ami Brands has signed as the national distributor of Carpe Diem, a line of botanic waters launched in the U.S. last year. The Botanic waters are available in three varieties: Relaxing, Vitalizing and Harmonizing. 1 litre – 1 litre is now offering home delivery service throughout Canada and the USA. In the coming months, the company will be extending their product line to include sparkling water and a 1 litre in a glass bottle. Glacier Hills – Glacier Hills is running a private label promotion for home and office customers in the NY/NJ area. Cutomers who sign up for for Glacier Hills Spring Water home or office delivery will receive 3 cases at no charge of their own brand of 1/2 L bottles. The company is able to produce small runs as a result of the purchase of a VIVO printer. Glacier Hills also signed a 5-year strategic marketing and distribution agreement with 3 Springs Water. Ty Nant – The most recent development by Ty Nant is the TAU brand. Launched in 2003 in Europe, and in 2005 in the U.S., TAU has brought contemporary stylish design into the clear glass bottled water sector. TAU takes its name from an ancient Welsh word meaning “to be silent,” which was felt to encapsulate the brand’s understated clean lines and its fresh tasting spring water, which is also drawn from a unique source on the edge of the Welsh Cambrian Mountains. With its chic minimalist black

BEVERAGE SPECTRUM // MARCH

2007

and white labels, TAU was specifically designed for outlets such as designer hotels, restaurants, bars and cafes where color might not be appropriate but quality and style remain essential. Tau is available in still and sparkling varieties in 750 mL and 330 mL bottles. Metromint – Metromint has introduced two new varieties: Orangemint and Lemonmint. Both combine the brand’s mint taste with a citrus finish. Made with pure water and no preservatives, Metromint also contains neither sweeteners nor calories. Both are available in 500 mL PET bottles. Each variety of Metromint is also now designated with a numerical chill factor: from mildly cool Orangemint (-3) to super cool Peppermint (-9), the chill factor is a comparative scale that measures the range of mint intensity. Jana – Jana is an artesian water from Croatia. Jana North America's management took over the company in September, 2006, and have been growing their client base in NYC metro area in an effort to go national later this year. Jana is the official water for Madison Square Garden and sponsors the NY Rangers, Knicks, and The Liberty. The company is preparing a national marketing starting in September and plans to launch a glass bottle line in May. Vitazest – Vitazest Vitamin & Fruit Enriched Water, which contains 10 essential vitamins and minerals, natural flavors and colors but no sugar, no carbohydrates, no calories, no artificial coloring and no preservatives, now contains no sodium. The Diabetes Research Institute Foundation (DRIF) has deemed Vitazest a “better for you” beverage. Every Vitazest bottle carries the DRIF logo signifying that it has joined in the search for a cure for diabetes, with a portion of all Vitazest sales going to the DRIF to support research. AQUA Pacific – The makers of AQUA Pacific recently announced a new U.S. distributor, Freedom Beverage Company, LLC of Las Vegas. The product comes in a square bottle with a distinctive tropical red-breasted parrot, yellow butterfly and dark blue waterfall background, creating a three-dimensional look. The product is available in .6 L, 1 L, and 1.5 L bottles

Icelandic Glacial Natural Spring Water

Enjoy the unique taste and exceptional purity of the multi-award winning Icelandic Glacial Natural Spring Water

www.icelandicglacial.com US Sales Office: Icelandic Glacial Inc. Suite 631, 8383 Wilshire Blvd. Beverly Hills, CA 90211 Tel: 323 782 1050 Fax: 323 782 1044 Email: sales@icelandicglacial.com Imported from Iceland

Lifestyle Beverages, Inc. – The maker of TrimWater, Lifestyle Beverages, has made an TrimWater agreement with Boening Brothers Inc. and Oak Beverages to become the flagship nonalcoholic brand to be distributed under Boening Brothers and Oak in New York. Coca-Cola Co. – The Coca-Cola Co.’s subsidiary, Odwalla Inc. recently announced the launch of H2Odwalla, a new enhanced water beverage line containing natural fruit flavors, to its beverage offerings. Made with organic ingredients for nourishing refreshment, H2Odwalla will be available to consumers in five flavorful and nourishing varieties. Sweetened with organic evaporated cane juice, H2Odwalla contains no artificial flavors, sweeteners or preservatives and all five varieties are made with 78 percent or more organic ingredients. The varieties include Replenishment to Thrive (Strawberry Kiwi); Replenishment to Defend (Blueberry Tea); Replenishment to Energize (Ginger Plum); Replenishment to Relax (Jasmine Lime) and Replenishment with Calcium (Tropical Orange). H2Odwalla will be available this month in 20 oz. plastic bottles. Glaceau – Nine of the country’s best basketball players have signed with Vitaminwater as celebrity spokesmen. The complete Vitaminwater basketball dream team consists of: Shaquille O’Neal, Tracy McGrady, Gilbert Arenas, Allen Iverson, Chauncey Billups, Shawn Marion, Tony Parker, Josh Howard, Ray Allen and Elton Brand. Tampico – Tampico recently launched its Tampico Flavored Water Beverages in a new 20 oz. size and with a new look. The product is throughout the Southwest and in limited distribution in Chicago and New York and will continue to roll out nationally throughout 2007. O Beverages – O Beverages continues to expand rapidly throughout the US and now has two product lines: O Water and new O Infused Water. O Water is “water with a twist” of fruit

BEVERAGE SPECTRUM // MARCH

2007

flavor that has no sugar or fake sweeteners. New O Infused Water is a line of functional waters that are slightly sweet. With only 25 calories per serving and sweetened with pure cane sugar, O Infused Water delivers fruit flavor plus antioxidants, energy, vitamins or electrolytes without the excess calories, fake sweeteners or added colors that are found in other sports or vitaminenhanced drinks. HINT – HINT is now available in two new flavors: Mango-Grapefruit and Strawberry-Kiwi. The two flavors are the product line’s third and fourth ‘dual essence’ products, joining Pomegranate-Tangerine and Raspberry-Lime. Hint is also available in pear, peppermint, tropical punch, cucumber, lime and apple. HINT is available in fine grocers such as Whole Foods, Ralph’s, Stop & Shop, PAX and Real Foods and is now distributed through UNFI, Nature’s Best, Tree of Life, Kehe Food Distributors, as well as many local beverage distributors. Sanfaustino – Sanfaustino Natural Calcium Water has launched a new line of plastic bottles. Now available in .5 L and 1 L 4-pack shrink wrapped bundles in five unique, all-natural and calorie-free flavors, Original, Lemon, Mandarin Orange, Lime, and Raspberry Lime. Clearly Canadian – Clearly Canadian Beverage Corporation has launched a new, non-carbonated line of natural enhanced waters: daily ENERGY, dailyVITAMIN and dailyHYDRATION. Leveraging the equity of the Clearly Canadian brand name, the company now introduces three new innovative beverage lines that deliver both natural fruit flavors and efficacy with zero to low calories per bottle. The company has also come out with a new proprietary 1 L PET Sparkling Water product offering. Now gaining North American distribution and sales, this new 1 L package reflects a similar label and package design as the 14 oz. Clearly Canadian sparkling flavoured water glass bottles re-launched in May 2006.

GERRY’S INSIGHTS emember “Snapple-ization”? For a while in the 1990s it was the pejorative du jour in marketing, denoting a seemingly random proliferation of flavors that creates enormous retail clutter and consumer confusion in the dubious quest for novelty. Never mind that many of those extensions proved quite durable, or that the Snapple folks were careful to prune fading flavors that weren’t carrying their weight. Still, the very existence of the term implied there must be a problem out there worth combating. These days, however, Snapple-ization no longer is seen as a bogeyman, and not just because of the waning influence of Snapple itself. Rather, all the recent talk of high-end niches, mass customization and long-tail distributions has brought home the notion that choice, fundamentally, is a good thing, and that the market is the best arbiter of which innovations are valuable and which aren’t. Still, that principle can be hard to accept for extensions that aren’t rooted in any sort of tradition of flavor experimentation (as with candy or ice cream). Since bottled iced tea burst on the scene as a new phenomenon, Snapple had plenty of latitude to experiment. But how about that avalanche of flavored spirits we’ve been seeing? By now, of course, we’re used to endless vodka flavors, and other white spirits like rum have followed closely behind. Lately, the phenomenon is infiltrating other segments, from Scotch whisky, with its variety of arcane barrel finishes, to te-

Embracing Flavor-ization quila, where after decades of a narrowly defined tequila-ness, a brand like Jose Cuervo now offers us Oranjo, Citrico and Tropina flavors. It’s no surprise what’s driving the activity: a quest for greater shelf space, new cues that might pull in consumers who have proved previously resistant to the category, greater creativity in concocting intriguing cocktails. They’re devilishly accessible: while something inside me still resists the necessity of flavored tequilas, even though the Cuervo flavor I’ve tasted, Citrico, actually was pretty good. How do the experts feel? I checked in with Tonya LeNell Smothers, of the remarkable LeNell’s wine and spirits boutique in Redhook, Brooklyn. Since the joint is only 500 square feet, LeNell certainly has no need of 30 different flavors of a given spirit to fill up her shelves, nor is she ever lacking in more tradition-bound rarities to keep her customers’ interest stoked. Yet she’s unequivocal on the matter. “Choice is always good,” she declared. “There’s always been novelty products. They either have a flash and die out or somehow, if they are lucky, become a part of our iconography. Marketing can definitely influence what folks think is worth drinking, but I believe that in the end only the strong survive.”

In other words, let the market dictate the winners. So bring ’em on! Traditionalist as I am in Scotch whisky, I will confess to being enamored of some of the experiments in barrel finishes, which are partly intended to evoke the qualities of wine and hence draw in new consumers, particularly females. How can one resist Bruichladdich Flirtation? Sure, its 20-year maturation in Bourbon barrels and then Mouvedre wine casks sounds finicky, but you can’t argue with the result. (Okay, you can argue with the $200 a bottle price.) Smothers says she has a soft spot for the Buffalo Trace Experimental Collection (four bourbons aged in French oak barrels and the like). At the same time, the Phillips Union line of whiskeys in regular, vanilla and cherry flavors drew a thumbs down from LeNell and her patrons at a recent in-store tasting – too sweet. (Though maybe not too sweet for the cosmo crowd at which it’s clearly targeted?) If you’re still not convinced that this is a healthy trend, consider a couple of elements of tradition that do support the rabid experimentation. For one, recent years’ mixologist-ashero stories have highlighted one of the pros’ favorite at-home pastimes: infusing spirits with anything from tropical fruits to Earl Grey tea. Hey, you never know! Or consider this: by now, it’s hard to question the bona fides of that quintessential American spirit, Southern Comfort. Which, from what I can tell, is really peachflavored bourbon.

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

BEVERAGE SPECTRUM // MARCH

2007

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“Seasonal” can be something of a dirty word in the beverage game, summoning images of everything from decaying eggnog to left-over pallets of Jones Soda's Thanksgiving feast flavor bonanza. But seasonality doesn’t have to revolve solely around a few dodgy product offerings designed to spur interest in established lines. In fact, learning how to handle changes in

Retailing Focus:

Seasonal Sets By Jeffrey Klineman

your beverage sets on a seasonal basis can be a great way to tinker with your SKUs and ramp up your profits. But you don’t have to go overboard, retailers suggest. Seasonal sets are a basic of category management, according to Brian Woolf, president of the Retail Strategy Center in Greenville, S.C. But what works for one store might not be a fit for all. The most basic adjustment many stores make – particularly smaller retailers, like convenience stores and small groceries – is in the weight they give to beer in the cold vault. With the highest demand for beer coinciding with later spring through summer (the traditional Memorial Day to Labor Day period), convenience stores often add another door or two in their drink coolers for beer displays in late May. “Smaller format stores have to have a mechanism for those adjustments because of their limited space,” said David Bishop, a partner at the retail consulting firm Willard Bishop. But that doesn’t mean you should only think about categories, either. For example, Hal Adams, the merchandising manager for Valero Energy Corp., says that many Valero stores increase the size of their RTD beverages during the summer months, even though they rarely make cold vault adjustments because most of the company’s convenience locations are in the always-warm Southwest. “We may not carry 64 oz. Gatorade all year long, but in the spring and summer, we’ll put it in more,” Adams said, adding that customers come in thirsty from yard work or outdoor exercise. Category adjustments aren’t made seasonally in grocery, either, notes Bishop. “In larger format stores, most beverages aren’t merchandised in adjacent spaces, so it’s just not necessary,” he said. Even a smaller grocery chain like Texas-based United Supermarkets, which fights for every edge against larger chains, doesn’t pay attention to seasonality when handling its stock. But it will make other changes.

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2007

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“We do not adjust our sets for seasonality,” said Eddie Owens, a spokesman for United Supermarkets. “We use additional displays instead.” Of course, many retailers would love to have enough of a surplus of space to take the careful balancing of profit-per-spot off of their todo lists. But the tightrope that comes with limited space can also be a boon, particularly if you reset seasonally. “With a small box, you see things,” Bishop says. “Obviously, one of the most remarkable changes is the continued growth of energy drink sector. With the continued expansion of that shelf space, first there might have been a few shelves, now it’s potentially two doors in these markets. Retailers have used their reset schedule as a way of trying out the effects of those changes. Some of those scheduled resets are used to reallocate space on a more permanent basis. Energy drinks have benefited, as have water – mostly at the expense of the soda category.” In fact, checking in four times a year on the weight retailers give to different beverage categories will give them an advantage when dealing with marketers and distributors, Bishop added. “From a retailer perspective, as they look at

BEVERAGE SPECTRUM // MARCH

the allocated space, they know the value of having their products in that space to a manufacturer,” he said. “A retailer recognizes that and understands that at those points, that if the trends aren’t playing to the manufacturer and his product lines, that might motivate the manufacturer a bit with regard to negotiations for merchandising or promotional support.”

In a smaller retail environment, a seasonal swing of just one or two doors can be a great place to experiment with growing profits.

That’s important, because seasonal changes are also notorious for bringing out “limited run” products (i.e. Pepsi Spice, Mountain Dew Code Red). For retailers large and small, a sea-

2007

sonal change or large holiday can mean pressure from manufacturers to run a series of temporary line extensions or special flavors out to a public that may or may not be receptive. Even in larger grocery stores, where there is separation between products, certain “Octoberfest” or “Winter Warmer” brews might be high priorities for manufacturers. In cases like that, consultants say, be careful that the product has a reason to be on the shelf, and, no matter how good a deal you get from marketers, order carefully. Otherwise, the retailer runs a two-edged risk: overbuying a seasonal product, and then being forced to make deep discounts after the holiday, or else under buying and chancing the disappointment of out-of-stocks. One way to handle the risk is to be in communication with the manufacturer or a wellinformed distributor. At Valero, for example, regional merchandising groups and local buyers are aware of planned-for short term line extensions, and they are factored into shelf sets annually. That allows the unexpected ones to be dealt with as they come in without much upheaval. “Our local merchandisers make that decision on a case-by-case basis,” Adams said.

PROMO PARADE Put a Goose in your Rolls

Maine Root takes Root Organically sweetened soft drink maker Maine Root has kicked off a new program that will let consumers offset the carbon emissions created by their daily lives. Maine Root will use $5 donations from customers to plant trees, which absorb carbon dioxide from the air. The Portland, Mainebased company will also funnel part of the donations to the Energy Foundation at www.ef.org/programs.cfm. The Plant a Tree In ME program is available immediately for all consumers who shop at the Maine Root online store at www.maineroot.com, and want to add the donation to the purchase price. The company also has a Web site, www. freerangerootbeer.com, that provides details on its environmental programs. Maine Root has made the program part of their online store that customers go through when they order their organically sweetened Root Beer, Sarsaparilla, and Ginger Brew. Along with choosing what kind of soda they want, customers will be able to click on a page that says "Plant a Tree in ME!â&#x20AC;?

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2007

Grey Goose has teamed up with Rolls-Royce to create two customized limited-edition Rolls-Royce Extended Wheelbase Phantoms to serve as a platform to promote their social responsibility message of enjoying a safe night on the town, while delivering a luxury experience that cannot be replicated. The public should look for the 2007 Grey Goose RollsRoyce Extended Wheelbase Phantom at high-profile events and around the town, where trained chauffeurs will educate passengers on Grey Goose and the importance to "Sip Responsibly." Additionally, vehicles will be utilized to raise money for local and national charity partners and ultimately auctioned off at the end of the program for charity.

High-Energy Rugby USA Rugby and Cooper Tea Company have signed an agreement making BAZZA High-Energy Tea the official high energy sponsor for rugby in this country, marking the first time USA Rugby has elected to officially partner with a high-energy beverage. In conjunction with this announcement, Cooper Tea has launched a BAZZA Rugby Scholarship & Awards campaign. For every bottle of BAZZA High-Energy Tea that was sold in February, a portion of the profits will be used to fund scholarships and awards that recognize excellent rugby play at the team and individual level. Official sponsorship status gives BAZZA sole ownership of the high-energy category for all USA Rugby sanctioned events: clinics, playoffs, championship events, and international invitational; exclusive broadcast partner of the USA Rugby College National Championship; exclusive pouring rights at all USA Rugby club series, playoffs and championship events; naming rights for the USA Rugby college national championships; and presenting sponsor status for the USA Men's National Team International Invitational, a match versus the world famous Munster Rugby Club in August 2007, held prior to the Rugby World Cup in France in October.

A New Dream: Drink Jack Daniels, Drive Really Fast Jim Beam, The Official Spirit of Racing, has announced it will give one lucky race fan and three of their friends the unique opportunity to do “double-duty” by attending on Sunday, May 27, both the Indy 500 in Indianapolis and the 600 at Lowe’s Motor Speedway in Charlotte for a second year in a row. With scheduling making it almost impossible for current drivers to participate in both races, the winner is truly awarded with a unique chance to experience 1100 miles of great motorsports racing, all in one day.

The winner and guests will receive VIP treatment for the entire weekend, including private air transportation from Indianapolis to Charlotte. At each track, the winners will enjoy the race from an exclusive VIP suite. They will also have the chance to meet and support the two Jim Beam-sponsored drivers, Michael Andretti and Robby Gordon. The promotion kicked off on Feb. 14 and race fans can enter through regular mail or online at jimbeam.com. The winner is tentatively scheduled to be announced on May 1, 2007. Jim Beam will once again support Andretti’s return to racing as he comes out of retirement to drive in the 91st Indianapolis 500. On the NASCAR side, Jim Beam is entering its third year with Robby Gordon Motorsports as a primary sponsor of the No. 7 Ford Fusion driven by team owner Robby Gordon. For the 600 at Lowe’s Motor Speedway, Gordon will support Jim Beam Black Bourbon by racing in a special Jim Beam Black paint scheme. For Gordon, a “double-duty” racer for a record four times, the Jim Beam 1100 is particularly special.

CLEARLY LEGENDARY

Only Clearly Canadian has the legendary ability to deliver that remarkable authentic fruit flavor experience with each refreshing gulp. Team up with Clearly Canadian naturally flavored sparkling waters and legendary MVP Steve Nash. Original and Zero Calorie waters are now available in both 14 oz. glass bottles and 1 liter PET.

TWO-TIME MVP STEVE NASH

W NO BLE A L I R AVA I T ELES! L IN 1 BOTT PET

Z ER O C A LO R IE

For more information contact Clearly Canadian at 1-800-735-7180 or visit us online at www.clearly.ca

MARCH

2007

\\ BEVERAGE SPECTRUM

PROMO PARADE Your New Contractor: the High Life Miller High Life and Miller High Life Light are giving consumers the chance to win the backyard of their dreams through the “Built to Spec” promotion, an off-premise event with POS and specially-marked packaging driving them to purchase Miller High Life/ Miller High Life Light, receive an in-pack promotional code and enter online for a chance to win their “ultimate” backyard, as well as a variety of secondary prizes. One grand prize winner receives their ultimate backyard as created in their virtual blueprint, which includes a personal land-

Cinco de Mayo Corona-Style Corona’s new grande “Cinco Celebración” promotion will explode onto the scene with an outpouring of increased sales and profits. With innovative new materials for both the on- and off-premise, retailers will have all the Corona Extra and Corona Light support necessary to make this

BEVERAGE SPECTRUM // MARCH

2007

scape design consultant. 1,065 secondary prizes will be awarded via random drawing at the promotion’s end, including home improvement retail gift cards in $50 denominations, as well as a selection of backyard prizes featured in the grand prize portion of the promotion including: Outdoor Coolers, Gas Grills, Hammocks and Fire Pits. Off-premise accounts will drive awareness and build excitement with displays featuring: a unique gazebo display spectacular, coolers, collapsible chairs, basewrap, display cards and static stickers. This promotion runs through April 30. an outstanding Cinco de Mayo. Off-premise accounts will receive a full line of merchandising elements including display/case cards, pennant strings, four-sided graphic towers, die-cut floor decals, C-store pricing cards, base wrap and Cinco Celebración inflatables. Highlighting this year’s merchandising materials is the Cinco Cantina. Versatile enough to showcase 25-150 cases, the display can be used in the c-store, grocery and liquor segments.

Now there’s even more Metromint to love.

Metromint, the original mintwater, is proud to present the newest members of our growing family: Lemonmint and Orangemint. The two new varieties were developed with mainstream flavor profiles, intended to introduce incremental consumers to the Metromint Brand. And like their cousins Peppermint and Spearmint, they contain no sweeteners, no calories, and no preservatives. Pure. Simple. Mintwater. ®

Metromint is currently the fastest growing bottled water in the natural food channel.* Our sucess comes from driving sales with an effective promotion program. We’re building the Brand, raising awareness, and developing a fanatically loyal following. Distributor or retail inquiries: 415 979-0781. E-mail us at info@metromint.com.

www.metromint.com/retailerinfo *Source: SPINSscan Natural, Current Period: 12 weeks ending 07/15/06 Prior Period ending 07/16/05 Category: Packaged Water, Enhanced Water, Flavored Water: Total US All Regions