Beverage Spectrum September 2011 by BevNET.com

September 15, 2011

Everyoneâ&#x20AC;&#x2122;s Sweet on Lemonade

Energy Shots: Small Package Big Money

Stevia Fitting in with Juice

The Fight for Florida

Fall Expo Previews

PAGE 44

PAGE 52

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SEPTEMBER 2011 vol.

9 :: no. 6

Columns 6 FIRST DROP Say What? Understanding Beverage Lingo 8 PUBLISHERS TOAST Connecting with Consumers via Event Marketing 28 GERRY’S INSIGHTS The New World of DSD – Part 2

Departments 44

10 BEVSCAPE BUSINESS Fair Trade on the Rise 12 BEVSCAPE INNOVATION Bud Light’s New Labels 14 NEW PRODUCTS Introducing Hint Fizz 18 CHANNEL CHECK The Shot Chart 22 BREWBOUND Fall and Winter Brews Hit the Shelves

80 PROMO PARADE Dance with Madonna

Expert Section 30 THE SCIENCE OF SUBSTANTIATION Justin Prochnow 38 WHAT MATTERS WHEN RAISING CAPITAL Michael Burgmaier

Features 60

44 ENERGY SHOTS In the Shadows of a Giant 52 JUICE Stevia Blends Start Fitting In 60 COVERS TORY: Pucker Up Everyone’s Sweet on Lemonade 68 THE FIGHT FOR FLORIDA What DSD in this key state means for a brand

72 FALL EXPO PREVIEW Get ready for NACS, Natural Products Expo East and Pack Expo

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

Beverage Development Ingredient Supply Shots Energy Drinks Enhanced Waters and More Proprietary Flavors Premixes and Bases U.S. Distributor

THE FIRST DROP

By Jeffrey Klineman

By Brent Sonnek-Schmelz

SAY WHAT? IT’S INTERESTING HOW EASILY we can slip from common-sense communication into the lingo of the beverage industry. I was reminded of this recently when speaking with the CEO of one of the new breed of “beverage incubators” – you know, the ones that seem to be cropping up pretty regularly with one or two small brands under their wings. While we were talking about how they “incubate” a brand, the CEO himself raised the question: what the heck does it mean to be a beverage “incubator”? And, especially when so many beverages are best served cold, why would a retailer add a line fresh from the incubation process? I kid, but just a little bit. The point is that we tend to throw terms like that around without much thought about what they really indicate. In reality, incubators try to straddle the roles of consultant, investor and broker while connecting brands with creative help and distribution advice. But there’s plenty of terminology out there that we tend to use in an undefined way. One that came up recently was “barrels.” As in, a certain brewery sold 6,000 barrels of beer last year. Now, this is a term of comparison – Boston Beer, for example, sold 2.3 million barrels in 2010. That’s a lot, certainly, especially compared to 6,000, but as we were discussing in the office, knowing how many barrels someone sold is a long way from knowing how many overall beers they sold – because very few folks typically know, off-hand, how many beers are actually in a barrel (email me if you do). We also hear a lot about “Turnkey Solutions” – read by some as the notion that throwing money at your supply chain is an excuse for getting rid of common sense about marketing or merchandis-

6 BEVERAGESPECTRUM.SEPTEMBER.2011

incubator (inkyə-bātər) noun 1. An enclosed apparatus providing a controlled environment for the care and protection of premature or unusually small babies 2. An apparatus used to hatch eggs or grow microorganisms under controlled conditions 3. A place, esp. with support staff and equipment, made available at low rent to new small businesses

ing, read by others as a very handy way to take a product idea and outsource the production. Other terms used to introduce products within the trade include “flavor profiles” – frequently something that involves a too-sweet raspberry/lime mixture; “price point” – instead of, well, “price”; and “form factor” – as if “package” is too complicated. And that’s where another major term, “brand building”, comes into play. Not because it’s confusing, but because a lack of basic communication can kill a brand before it has a chance to get built. Like legal-ese, computer-ese, or coachspeak, beverage industry-speak didn’t come from nowhere. It grew out of a need for language that dealt specifically with the groups involved in that industry – flavor houses, distributors, retailers, marketers. The problem is that it can be frustrating and confusing when the retailer or distributor has expectations that a less refined supplier does not understand – particularly if they’re overly eager to please. Last year, one distributor, Nat Noone, attempted to help potential clients by providing a handy list of acronyms (Noone

wrote that “Over the years I have come to accept that it is the industry standard to use such terms but still feel like a bit of a jackass every time I utter one.”) While I’d suggest that newbies should find and print Nat’s list, they’ll also quickly find that it is by no means comprehensive. The lingo evolves every day, and in order to keep things flowing freely, we need to be able to incubate communicators. Maybe over a few barrels of beer. Speaking of evolution, we’ve hit a time in the industry where its evolution is going to be on full display. It’s the fall show season, with NACS, PackExpo, and Expo East all on the calendar – and all previewed in this issue. Along with our handy prep guides, we’ve got stories on some of the fastest moving beverage categories at those shows, including the ever-growing energy shot business, as well as lemonades and juices. Gerry Khermouch finishes his two-part series on the evolution of the DSD system. And our contingent of experts weighs in on the importance of scientific standards for beverage companies, and financial standards, as well. So there’s plenty to keep up with. Consider us a knowledge…incubator.

PUBLISHER’S TOAST

By Barry J. Nathanson www.bevspectrum.com

Barry J. Nathanson PUBLISHER bnathanson@bevnet.com

NEXT WEEK MY FAVORITE

ones that Red Bull, Monster and the other energy drinks have created or aligned with sporting event begins its run. For two have paid off their investment in spades. weeks every year, the U.S. Open Tennis They personify their images and grow Tournament takes over Flushing Meadow, the brands. Beverages enable local and Queens. Now, I’m an ardent tennis player regional concerts, fairs, and music festivals and an unabashed fan of the sport, and I to exist. It’s a win-win. The events go on, don’t just look forward to attending in perthe sponsors gain an audience and create son or to watching at home, but I also let brand loyalty, and the consumer has their it become the focal point of my existence. ultimate recreational experience. They I love the sport, but I also love the way also support the local retailers as they are partners in promoting the events and moving product. I’ll always remember how, early on, Sweet Leaf Tea garnered its recognition in the marketplace with its Austin City Limits affiliation, and Apple & Eve solidiPerformance during Red Bull Flying Bach at the 17th century waterfront area of Nyhavn in Copenhagen, Denmark on August 30th 2011. fied its wholesome, good-for-you image with its connection to it heightens my awareness of the sponthe Newport Folk Festival. Just recently, sors of the event. The dominant presence Bawls has begun to regain a foothold of Heineken, Evian, and, over the years, within the online gamer world that the various Pepsi and Coke brands has helped turn the Open into a high-profile marketing brand once rode to prominence. These are just a few shining examples of the types of platform for beverage companies. affiliations that beverage marketers should In thinking about the Open, I’m also consider. We receive dozens of news thinking about the importance of other items of similar ilk, and post them on our sponsorships and event marketing camBevNET site every week, from Rihanna paigns. They are one of the few types of concerts to movie premieres. initiatives that companies both large and Sponsorships enable you to connect small can and should engage. The connecwith the consumer and your community. tion to the consumer is strong, personal As marketers you should look for events and lasting. You don’t have to be a major that are a natural extension of your brand brand linked into every sporting arena to affi nity. There are music concerts of every make your presence felt. You also don’t genre, from classical to rap, that can help to need a national presence to have impact. In enhance your brand and its image. Choose fact, it’s more important to pick the right the event that serves you best, but make sure marketing angle than it is the biggest. you choose something. It will serve you well. The zany madcap events such as the 8 BEVERAGESPECTRUM.SEPTEMBER.2011

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CONNECTING WITH THE CONSUMER, EVENT BY EVENT

Jeffrey Klineman EDITOR

Available at these and other progressive retailers nationwide:

To find out more, contact Wes Strickland. VP of Sales, at 888-231-2684 or hit OhYeahNutrition.com

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

Top 10 Trends from the Food Channel Do-it-yourself flavor and debate over what beverages should be given to children top The Foods Channel’s “Top Ten Beverage Trends for 2011” list. The trend list was developed along with CultureWaves, the International Food Futurists and Mintel International. The top beverage trends are: 1. Do-it-yourself flavor

Many consumers are taking flavor into their own hands, adding floral or citrus flavors to water and leaving out most of the sugar. Crystal Light’s powders and Kraft Foods’ new MiO liquid are popular. So is Coke's Freestyle machine. 2. Parental discretion advised

With the Los Angeles school district banning chocolate and strawberry milk from the cafeteria, restaurant chains are working to offer healthier options for children, including 1% milk and fruit juices instead of soda. 3. Iced coffee is scalding hot

Consumers have increased consumption of cold caffeinated beverages in restaurants by 20 percent during the past five years. There are iced, frozen and slushie coffee options pretty much everywhere, and there are even single-cup brewing systems and special blends for home consumption. 4. For medicinal purposes only

Enhanced waters are growing in popularity and offer added vitamins and nutrition for different aliments. There are energy and relaxation beverages as well, and there is a trend of consumers switching back to beverages sweetened with cane sugar. 5. Sipping seasonally and simply

Beverages are not exceptions to consumers choosing foods that are in-season and local, and consumers are choosing seasonal and local ingredients for their beverages. 6. Fast food beyond the fizz

Beverage options at fast-food restaurants are expanding beyond just fountain drinks with McDonald’s marketing its new frozen strawberry lemonade and Steak’n’Shake and Sonic offering happy hour deals on milkshakes and frozen drinks. 7. Craft beers: The buzz is back

Overall beer sales are flat, but sales of craft beers are growing at double-digit rates. Sales of home brewing equipment are also up. 8. Bourbon booming

Bourbon is popular again, and $150 million has been spent on new construction at Kentucky distilleries, where 95 percent of the world’s bourbon is produced. 9. Show biz

Presentation of beverages is becoming more important with tableside prep of freshly squeezed lemonade in the summer and tableside prep of apple cider in the fall coming in vogue. 10. Drinking ourselves thin

While consumers are enjoying all types of beverages, they want to do so with the least amount of calories. This has led to “Northern Lites” drinks at Caribou Coffee and “38 Smoothies Under 300 Calories” at Smoothie King.

10 BEVERAGESPECTRUM.SEPTEMBER.2011

BB Fair Trade on the Rise Fair Trade USA is gearing up for October – dubbed “Fair Trade Month 2011” – following news that SPINS reports revealed a significant increase in sales and a strong foundation of mainstream consumer support. SPINS reported that sales of Fair Trade Certified products at mainstream grocery stores grew by 87 percent in the second quarter over the previous quarter, followed by 32 percent growth in the specialty and gourmet channels for an overall growth rate of 63 percent. According to Fair Trade USA, this confirms that mainstream brands and consumers are increasing their commitment to Fair Trade faster than ever. “We’re thrilled to see such tremendous growth across all channels,” said Cate Baril, Director of Business Development, Grocery and Ingredients. “As mainstream brands with broad distribution—like Ben and Jerry’s and Larabar—continue to convert their ingredients to Fair Trade, we’ll continue to see sales grow. As more and more companies choose to source Fair Trade Certified products, they declare their support for fair prices, safe working conditions, sustainable business relationships and other benefits available to Fair Trade farmers and workers around the world.” In order to help businesses benefit from the Fair Trade Month efforts, Fair Trade USA is offering a number of tools and resources to help brands, retailers and industry partners maxi-

mize their market presence. The following items can be found at www.fairtradeusa.org. Fair Trade Finder: This new Facebook application is the primary method of consumer engagement during Fair Trade Month. Available September 27th, the app will enable consumers to search for and discover Fair Trade Certified products and retailers in their area. They can also comment on products and upload photos of their favorite stores and items. Every Purchase Matters Style Guide: This style guide helps

brands rally around a single Fair Trade message to generate greater overall awareness. Free Point of Sale Materials: Point of sale materials are free of charge and help cafés and retailers rally around a consumerfriendly campaign. Impact Reports: Fair Trade USA's Product Impact Reports focus

on the benefits of Fair Trade in seven major product categories: tea, cocoa, sugar, wine, coffee, flowers and bananas. These category-specific reports highlight the industry background and development issues unique to each supply chain, and are a great resource to help you tell the Fair Trade story any time of the year.

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SEPTEMBER.2011.BEVERAGESPECTRUM 11

BEVSCAPE INNOVATION • Product development & marketing news

BevNET’s Best of 2011 Awards Accepting Submissions

BEST OF 2011

As part of its Best of 2011 Beverage Awards, BevNET has added a pair of new categories focused on highlighting the best beverage marketing campaigns. Television, print, and radio-focused campaigns are being considered in the “Best Marketing Campaign: Traditional Media” category. Campaigns that primarily employ Web, Mobile, Social and “Guerilla Marketing” elements will be considered for “Best Marketing Campaign: Web/Social Media.” All campaigns need to have either begun in or had the chief part of their focus in the year 2011; campaigns will be considered on the basis of originality and quality, as well as proof of effectiveness. Other Categories Include: Product of the Year Innovator of the Year Best Sports or Hydration Beverage Best New Functional Beverage Best Smoothie or Meal Replacement Best New Energy Drink or Shot Best Product Revamp Best New Relaxation Drink or Shot Best New Powder or Tablet Beverage Best New Non-Carbonated Beverage Best New Kids’ Beverage Best New Carbonated Beverage Best New Enhanced Water Best New RTD Tea Best Packaging Design Best New Juice or Juice-Blend Best Packaging Innovation

12 BEVERAGESPECTRUM.SEPTEMBER.2011

Bud Light Gets Interactive Product development company Spear has joined forces with Anheuser-Busch InBev to introduce a dynamic, interactive label. Brand developers of the best selling beer, Bud Light, turned to Spear to bring the product’s fun personality to life, via a customizable pressure sensitive label. Printed at their Tennessee facility, Spear’s technical team transformed the familiar Bud Light label to allow drinkers to add a personal touch. Incorporating metal activation technology, extensive testing was required to investigate accidental activation and abrasion problems. The end result – an exclusive area of the label on which consumers can customize their bottle by using a coin or key to write a message or draw an image. This not only allows the drinker to express their individuality, it also avoids bottle mix-ups and offers the chance for individuals to exchange messages – or even, developers cheekily point out, phone numbers. “Bud Light drinkers are always looking for fun, quirky ways to express themselves, and the My Bud Light bottle offers them a canvas to do just that,” Mike Sundet, senior director of Bud Light, said.

CasCal Canned It’s been on the market for three years, but Coca-Cola’s fermented CasCal soda has remained largely under the radar, with a distribution footprint confined almost entirely to Whole Foods and very careful (read: quiet) marketing support from Coke’s Venturing and Emerging Brands unit, which was the force behind the introduction of the bottled, high-end CSD with the wine-country sounding varietals like “ripe rouge.” But the brand has now added three new flavors and moving the line into a set of 12 oz. slim cans in an attempt to increase distribution and availability. New flavors include Fresh Tropical, Bright Citrus, Berry Cassis. They will be joined in cans by current flavors Ripe Rouge and Crisp White. By using cans VEB also gets the ability to sell the product at a better price point. CasCal has been promoted as being “good with food” as part of its vino-centric brand profile, but getting it into the hands of eaters has been a problem. By adding cans it

might have a better fit in the “to-go” arena, the rationale goes. Additionally, the brand is getting some marketing support from a decidedly bizarre place — Bizarre Foods host Andrew Zimmern, who began blogging about CasCal late last year. Zimmern also helped introduce the new cans at a pairing event to be held at Wolfgang Puck-owned Cut Beverly Hills.

BI High Fructose Fears Overblown? Most consumers look to avoid total added sugars, not high fructose corn syrup (HFCS) specifically, according to a recent study designed and executed by Mintel Research Consultancy. In the study, more than 2,000 consumers were asked a series of questions about their dietary habits. By asking participants unaided (or open-ended) questions, the survey helped determine what was “top of mind” for consumers with regard to sweeteners. Specifically, the study found that 17 percent of consumers were trying to avoid “sugar or added sugar,” as opposed to only 4 percent who indicated that they were looking to avoid HFCS. In the same question, 37 percent of consumers indicated that they were avoiding calories, while 20 percent were avoiding fats and oils. “This study of thousands of consumers truly shows what is ‘top of mind’ when reading food and beverage package la-

bels. It’s very telling that only 4 percent of consumers are avoiding HFCS,” said David Lockwood, senior analyst, Mintel Research Consultancy. “Mintel identified a major gap between what people say and what they really do. The answers to these unaided responses are the best indicators of true attitudes and behaviors.” Additionally, in reading package labels for information, a quarter of respondents indicated that they were looking for “sugar or added sugar.” By contrast, only 3 percent indicated that they were reading labels for HFCS. In the same question, 38 percent of consumers read labels for fats and oils, while 37 percent read for calories. “Consumers are independently confirming that HFCS is not a top of mind issue. In fact, one in four consumers is not focused on ingredients at all,” said Audrae Erickson, president, Corn Refiners Association.

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NEW PRODUCTS • The newest options for cooler and shelf.

CSD’s Block Island Beverages is introducing Bibbs All Natural Sparkling Sodas, which are sweetened by real fruit juices and evaporated cane juice crystals. Bibbs sodas contain no refined sugar, no high fructose corn syrup, no caffeine, and no preservatives or artificial coloring for a healthy thirst-quenching alternative. Bibbs is available in two flavors: Blackberry and Blackberry Lime, but will soon be joined by Blackberry Pomegranate, Blackberry Raspberry, Blackberry Pear and Blackberry Cherry. Bibbs is set to begin distribution with United Natural Foods, Inc., which will bring the product to the North Eastern United States and will be available in cases of 24 glass bottles that are 12 oz. each for a retail price of $35 per case. For more information, call 617-266-3333. R.W. Knudsen announced the addition of two new flavors to its Sparkling Essence line, Organic Lime and Organic Coconut. The new flavors address consumer’s desire for a simple combination of sparkling spring water and infused with organic ingredients. Light refreshments that are completely free of calories, sugar, fat, carbohydrates and artificial ingredients, and join the already existing flavors of Organic Lemon, Organic Cucumber, Organic Blueberry and Organic Mint. Packaged in 10.5 oz. slim cans and sold individually or in 4-packs, the suggested retail price for a pack is $3.79 to $3.99. Sparkling Essence is available nationwide. For more information, call 1-888-569-6993. HINT is introducing HINT Fizz, an unsweetened carbonated beverage aimed at helping consumers curb soda habits and supplying a unique alternative to soda. HINT Fizz is all-natural, with a main stream taste profile that comes in four flavors: Blackberry, Watermelon, Strawberry-Kiwi and Peach. Available exclusively at Fresh Markets through January 2012, HINT Fizz is packaged in 12 oz. glass bottles with an MSRP of $1.49 to $1.69.

JUICES CoolJuice will now be available in MidAtlantic and New England grocery stores, including 750 Stop & Shop locations, Giant Landover, Giant Carlisle and Martin’s. CoolJuice provides two fruit servings in an 8 oz. glass bottle. Available flavors are: Tropi14 BEVERAGESPECTRUM.SEPTEMBER.2011

cal Rhythms, Tropical Blue, Fruit Punch and Mango Groove. CoolJuice is packaged in 64 oz. containers for a retail price of $2.99 to $3.29 and is available in 1,800 select stores in regions across the country. For more information, call 888-645-8423. Odwalla is introducing a new Super Protein Mango ﬂavored non-dairy smoothie with 20 grams of soy protein for consumers craving a different type of protein beverage. Super Protein Mango is packaged in a 12 oz. bottles and provides 50 percent of the daily value of calcium and 150 percent of the daily value of vitamins B12 and B6. Key ingredients include apple juice, mango puree, orange juice and banana puree. This product will be line-priced with other Odwalla offerings. For more information, call 1800-639-2552

ENERGY DRINKS XYIENCE is introducing new collector cans for Xenergy Premium CranRazz that feature UFC Light Heavyweight Champion Jon “Bones” Jones. This release accompanies the addition of a recommendation on XYIENCE cans that the beverage should not be mixed with alcohol. XYIENCE targets a slightly older, more active demographic than most energy drinks and aims to be a pick-me-up when hitting the health club. XYIENCE is packaged in 16 oz. cans with a suggested retail price of $2.29 to $2.79 and is available nationwide. For more information, call 1-866-994-3623. Cold Star Inc. is introducing a new energy drink called CAF Fusion, a new grab-andgo coffee infused beverage. CAF Fusion comes in three dynamic flavors: Java Jolt, Mocha Blast and Vanilla Vortex. Java Jolt has a bold and energizing coffee flavor while Mocha Blast is a mix of two desirable flavors: coffee and chocolate. Vanilla Vortex combines the tempting lure of aromatic coffee with a creamy finish of vanilla. CAF Fusion is packaged in 12 oz. cans for a suggested retail price of $1.59 and is seeking broad distribution. For more information, call 800-269-4052.

TEA MADE has introduced a new label that will identify MADE primarily as a Green Tea drink while still maintaining its five flavors

NP of Raspberry Peach, Blueberry Lemon, Pomegranate Lemon, Strawberry Lemon and Blackberry Peach. The new label was introduced in the end of July and will feature a new logo and is packaged in 16 oz. bottles for a suggested retail price of $1.49 a bottle. MADE is also introducing a new line extension, MADE 10, for sugar conscious consumers who still want something made with natural ingredients. MADE 10 contains just 10 calories per serving and started national distribution in July with flavors of Cranberry Lemon and Pomegranate Blueberry. MADE 10 is sweetened with Erythritol and a small amount of Sucralose, but all other ingredients in MADE 10 are organic .For more information, call 417-887-2300.

Honey & Ginseng, and Green Tea with Honey, Pomegranate & Acai. TEAse is packaged in 16 oz. bottles for a suggested retail price of $1.79 and is seeking broad distribution. For more information, call 1-800-269-4052.

Cold Star Inc. is introducing TEAse, a 100 percent all-natural premium-brewed iced tea drink that contains no artificial colors, flavors or preservatives and is sweetened with all natural honey and organic cane juice. TEAse is available in three flavors: Berry-Blended Black Tea, Green Tea with

SPIRITS

Chill Drinks LLC., has re-introduced C+Swiss, an all natural hemp infused black tea with a hint of hemp’s aroma and flavor. Hemp is known to be a beneficial product for fabric, fiber and food and beverage. C+Swiss is the first hemp based iced tea in US markets, and will debut in Central Markets across Texas. The product is packaged in a slim and trendy 8.4 oz. “CartoCan” for a suggested retail price of $2.49. C+Swiss is also available in a 12-pack. For more information, call 305-470-9663.

The Nantucket, Mass. based Lucky Dog Vodka, Inc. is launching Lucky Dog Vodka this August in Nantucket, and will soon be introduced into major East Coast markets. Lucky Dog Vodka has been awarded the gold metal at the 2011 New York Wine and Spirits

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NP Competition held in Manhattan in July, and the brand is targeting college graduates and young professionals who are celebratory spirits drinkers. Lucky Dog will be packaged in 750 ml glass bottles that will retail for $19.99. For more information, call 215-443-8100. Pristine Vodka is a new, wheat based vodka, distilled and bottled in the Ukraine and made with water sourced from the Carpathian Mountains. Pristine goes through five rounds of charcoal filtration as well as a five-time distillation process, which contribute to the quality and unique characteristics of Pristine Vodka. Packaged in a 750 ml bottle with a suggested retail price of $27, Pristine is available in New York. For more information, call 518-229-6050. 35 Maple is introducing Masterson’s, a new upscale straight rye whiskey. Masterson’s will be followed by a botanical gin, an aged rum and a small batch bourbon over the next year. The first 100 bottles of Masterson’s to be

released will feature the personal signatures of Don Sebastiani, Sr. and August Sebastiani. Masterson’s will be packaged in 750 ml bottles for a suggested retail price of $79.00 and will initially be available in New York, California, Texas, Oklahoma and Illinois. For more information, call 707-933-1704.

MALTERNATIVES Phusion Projects, the maker of Four Loko, is introducing a new product called Poco Loko, which will feature unique flavors and smaller sizes with lower alcohol by volume. Currently available for distributor order, Poco Poko is packaged in 16 oz. cans at eight percent alcohol by volume. Flavors are: Green Apple, Black Cherry, Mango and Lemonade, most of which are not available in 23.5 oz. cans. Poco Loko has a suggested retail price of $1.59, and is also available in 4-packs for a suggested retail price of $5.99. Poco Loko is available nationally. For more information, call 312-596-3418.

To learn more about our OctoberFest program, contact your representative or email displays@samueladams.com Savor The Flavor Responsibly® 16 BEVERAGESPECTRUM.SEPTEMBER.2011

SOURCE: IRI LIFT AND SALES VOLUME DATA, YEAR-END 2010 VS AVG CRAFT BAND

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

SHOTS 52 Weeks through 8/7/2011 SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart.

Here’s a tale of three behemoths: one, 5-Hour Energy, continues to roam the energy shot category like a T-Rex, towering above all other competition. Meanwhile, Red Bull has pulled out, despite pulling in nearly $30 million last year and building what had been a solid second-place brand. Still in the game, however, is Hansen’s, whose CEO, Rodney Sacks, recently reaffirmed the Monster-maker’s commitment to Worx Energy, which is growing quickly into the category. Meanwhile, other established companies continue to find the climb to shot respectability a steep one: NOS, Rockstar, AriZona are all seeing big reversals.

IMPORT BEER Brand

Dollar Sales

5 Hour Energy

$924,448,400

35.78%

Stacker 2 6 Hour Power

$29,380,560

-6.39%

Redbull

$20,252,160

-44.20%

5 Hour Energy Extra Strength

$13,626,070

91.47%

Private Label

$11,527,220

93.06%

Worx Energy

$7,034,285

N/A

Monster Hitman

$6,233,807

-62.96%

Stacker 2

$4,263,656

148.90%

$3,586,626

8,232.47%

Nitro 2 Go

$3,292,739

-18.22%

Spike Double Shot

$3,247,988

63.04%

VPX Redline Power Rush

$3,179,151

-28.35%

Vital 4U Screamin Energy

$3,049,323

-14.44%

Nos

$1,786,160

-75.08%

Rockstar

$1,525,363

-69.83%

Vital 4U Liquid Energy

$1,409,012

1.00%

Extreme Energy

$1,390,942

-50.96%

Energy 2000

$1,271,847

99.94%

$984,701

45.83%

Tweaker

Change vs. year earlier

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

TOPLINE CATEGORY

VOLUME

52 Weeks through 8/7/2011

BEER $10,992,419,500

BOTTLED JUICES $5,177,410,000

BOTTLED WATER $7,802,766,000

ENERGY DRINKS $7,207,451,000

SPORTS DRINKS $4,061,456,000

TEA/COFFEE $3,218,167,000

1.15%

0.88%

1.99%

16.35%

11.78%

5.54%

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

18 BEVERAGESPECTRUM.SEPTEMBER.2011

WATER Brand

Private Label

HOT! Glaceau Vitamin Water Zero Dollar Sales

Change vs. year earlier

ENERGY Brand

HOT! Rockstar Dollar Sales

Change vs. year earlier

$1,012,408,000

3.57%

Red Bull

$2,437,767,000

14.78%

Aquafina

$703,377,500

-1.67%

Monster Energy

$1,284,752,000

24.20%

Glaceau Vitamin Water

$668,521,400

-5.64%

Rockstar

$454,063,000

13.63%

Dasani

$632,135,000

0.98%

Nos

$226,689,800

12.49%

Poland Spring

$382,446,600

-0.47%

Monster Mega Energy

$187,152,600

18.20%

Nestle Pure Life

$356,295,500

28.92%

Java Monster

$181,201,000

7.21%

Glaceau Smart Water

$325,363,500

25.19%

Amp

$139,502,500

-0.62%

Deer Park

$234,455,600

-0.46%

Rockstar

$112,405,900

281.49%

Glaceau Vitamin Water Zero

$196,301,200

159.64%

Full Throttle

$100,734,000

-10.37%

Ozarka

$194,035,200

3.40%

Monster Energy XXL

$89,628,680

9.06%

SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 8/7/11

SPORTS DRINKS Brand

NOT! vitaminwater

HOT! Gatorade Recover Dollar Sales

Change vs. year earlier

SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 8/7/11

TEA Brand

NOT! Full Throttle

HOT! AriZona Arnold Palmer Dollar Sales

Change vs. year earlier

AriZona

$616,411,200

-2.08%

Lipton Brisk Tea

$285,391,700

27.14%

-49.49%

Lipton

$266,911,500

-15.46%

$407,706,900

128.81%

Snapple

$186,131,100

-1.07%

Powerade Zero

$188,986,500

29.79%

Lipton Pureleaf

$153,953,000

-8.54%

Gatorade Frost

$55,605,340

-60.05%

Diet Snapple

$138,470,600

11.80%

Gatorade Cool Blue

$50,270,680

-48.50%

AriZona Arnold Palmer

$128,093,100

50.38%

$48,251,000

-78.98%

Nestea

$102,705,700

-10.19%

Powerade

$38,144,660

-8.15%

Gold Peak

$83,431,350

21.86%

Gatorade Recover

$31,754,950

130.74%

Lipton Diet

$65,413,700

4.31%

$1,978,298,000

109.10%

Powerade ION4

Gatorade Perform

$666,037,600

16.05%

Gatorade

$412,877,700

Gatorade G2

SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 8/7/11

DOMESTIC BEER Brand

NOT! Gatorade Frost

HOT! Natural Ice Dollar Sales

Change vs. year earlier

Bud Light

$5,292,641,000

1.55%

Budweiser

$2,083,572,000

-2.95%

Coors Light

$1,921,967,000

3.77%

SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 8/7/11

IMPORT BEER Brand

NOT! Lipton

HOT! Stella Artois Dollar Sales

Change vs. year earlier

Corona Extra

$928,448,800

0.74%

Heineken

$567,798,400

-1.43%

Modelo Especial

$305,693,400

16.87%

Miller Lite

$1,672,706,000

-0.35%

Corona Light

$167,087,600

-1.30%

$1,098,550,000

-2.38%

Tecate

$154,627,800

-10.67%

Busch Light

$734,750,700

0.17%

Lebatt Blue

$114,667,900

-4.00%

Busch

$683,092,400

0.74%

Dos Equis XX

$113,390,000

23.01%

Miller High Life

$497,496,400

-2.47%

Labatt Blue Light

$105,733,500

3.68%

Keystone Light

$487,547,600

-0.03%

Stella Artois

$104,360,000

28.74%

Natural Ice

$357,502,400

3.95%

Newcastle

$77,937,020

-1.48%

20 BEVERAGESPECTRUM.SEPTEMBER.2011

NOT! Budweiser

Natural Light

SOURCE: Symphony/IRI Total food/drug/c-store/mass excluding Wal-Mart. 52 Weeks through 8/7/11

NOT! Tecate

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KEY CRAFT OFFERINGS: It’s warm now, but the special fall and winter seasonals are in the bottle. Here’s what your craft beer cognoscenti will be looking for: New Belgium. Five hops and four malts make Hoptober Golden Ale a veritable cornucopia of the earth. Pale and wheat malt are mashed with rye and oats to create a medium-bodied ale with a creamy mouthfeel. Centennial, Cascade, Sterling, Willamette, and Glacier hops form a bonfire of citrus notes, fruity cheers and a bold finale. Hoptober checks in at 6 percent ABV and 40 IBU’s and is distributed in all 28 states New Belgium is sold. It is available in both 12 and 22 oz. bottles and on draught. Suggested retail price for a 6-pack is $8.99. Victory Brewing Co. On Wednesday November 23rd, Dark Intrigue will make its return to the market for the last time. ‘Dark Wednesday,’ as Victory is dubbing it, will see the release of 3,000 cases of their bourbon barrel-aged Storm King Stout. Dark Intrigue checks in at 9.2 percent ABV and will retail for $15 per bottle. It will be distributed in 750 ml bottles in PA, GA, SC, DE, MD, NJ, CT, MN, IL, IN, CO, and parts of FL, VA, NY, OH. Widmer Brewing Co. Widmer brothers Kurt and Rob always talk about beer being the “right tool for the job.” As the cold winter weather approaches, Widmer hopes you will beat the cold with their winter warmer, BRRR Seasonal Ale. At 7.2 percent ABV and 50 IBU’s, this beer is sure to do the trick. A bold hop flavor compliments a candy sweet finish. BRRR is available nationally, in 6-packs, 12-packs and on draught. Suggested retail price is $8.99 per 6-pack. Boston Beer Co. Samuel Adams Winter Lager is brewed in the tradition of celebrating winter. Made with winter spices that include

22 BEVERAGESPECTRUM.SEPTEMBER.2011

orange zest, cinnamon, and fresh ginger to add a note of spicy complexity, this rich and hearty brew is one of the finer pleasures of winter. Winter lager checks in at 5.6 percent ABV and pours a deep ruby color. It will be available nationwide beginning in November. Winter Lager is sold in 6-packs, 12-packs and on draught for a suggested retail price of $13.99 per 12-pack. The Bruery. Brewed with 17 pounds of yams per barrel, Autumn Maple is a different take on the “pumpkin” beer style. This seasonal is brewed with Cinnamon, nutmeg, allspice, vanilla, molasses and maple syrup and fermented with The Bruery’s traditional Belgian yeast strain. This bold and spicy beer is perfect on a cold autumn evening. At 10 percent ABV, this beer also packs a pretty significant punch. Autumn Maple is available in 750 ml bottles and on draught in all 20 states Bruery beers are sold. Suggested retail price will vary by state, but consumers can expect to pay at least $10 per bottle. Dogfish Head Punkin Ale is a full-bodied brown ale with smooth hints of pumpkin and brown sugar. Dogfish Head brews their Punkin Ale with pumpkin meat, organic brown sugar and spices. This is the perfect beer to warm-up with, as the season cools. The 7 percent ABV Punkin is sold in 12 oz., 4-packs and on draught in all 27 states Dogfish Head beers are sold. Suggested retail price will range between $8.99 and $10.99 per 4-pack. Notch Session Ales. Retailers in Massachusetts have a brand new offering from Notch Session to look forward to at the end of September. Founder and Brewer Chris Lohring will release a 30-barrel batch of his newest beer, the BSA Harvest in 22 oz. bottles and on draught. This Belgian influenced farmhouse beer is made with 100 percent western Massachusetts barley, rye and wheat malted through the Hadleybased Valley Malt. True to Notch’s style, the beer will check in at 4.4 percent ABV and be

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available for a limited time only. BSA Harvest will be available in every market across Massachusetts where Notch beers are sold. Bomb Beer Company. Recently launched Bomb Beer Company hopes to target a younger demographic with creative packaging. Featuring the designs of local artists, Bomb Beer hopes that the 21-35 year old age group will still gravitate to the product because of its affordable pricing. Their first beer, Bomb Lager, checks in at 4.5 percent ABV and is distributed in 12 oz., canned 6-packs. At just around $6 per 6-pack, Bomb Lager is offered as a bargain beer. The company self-distributes across New York state with a primary focus on Manhattan, Brooklyn and Long Island. Bomb Lager will also appear on draught before the years end. Stone Brewing Co. Since February of 2002, San Diego-based Stone Brewing Co. has brewed a special Belgian-inspired beer each year, designed to age until 2012. Each beer is named for the specific day, month and year it is released. This year, Vertical Epic will find its way to shelves in all 36 states Stone Beers are distributed on 11.11.11. It is packaged in 22 oz. bottles and will also be available on draught. Suggested retail price will range between $5.99 and $6.99 per bottle. Ninkasi Brewing’s Sleigh’R Double Alt Ale is a Northwest seasonal brewed with winter in mind. A dark double alt, malty, nourishing and delicious, it’s sure to keep the winter at bay. Sleigh’R, which checks in at 7.2 percent ABV and 50 IBUs is available September through December. It is distributed across four states and in select parts of California in 6-packs, 22 oz. bottles, and in Ninkasi’s winter seasonal variety pack. It is also available on draught. Suggested retail price is $3.99 per 22 oz. bottle and $8.99 per 6-pack. Smuttynose Brewing Co. First released in January, 2009, Gravitation Belgian Quad is the newest offering in the Smuttynose Big Beer Series. This big, dark ale is brewed using a variety of Belgian specialty malts along with 200 lbs of raisin puree per batch.

24 BEVERAGESPECTRUM.SEPTEMBER.2011

By Christopher Furnari

The resulting flavor is a viscous mix of dark fruit, rum, toffee and raisins balanced with aromatic fruitiness of the Belgian yeast. Of course, this beer being in the ‘Big Beer’ series means that the ABV will certainly be high. At 12 percent in 2010, be careful with this one! Gravitation is available in all of the states Smuttynose products are sold. It is distributed in 22 oz bottles and on draught. Boulevard Brewing Co. Nutcracker Ale is Boulevard’s holiday gift for real beer lovers. This hearty, warming brew is a classic winter ale, deep amber in color, with hints of molasses balanced by the “spiciness” of freshly harvested Chinook hops. At 5.8 percent ABV, more than one can be enjoyed while sitting around the Christmas dinner table. Nutcracker Ale will be available in 20 of the 21 states Boulevard beers are found. Their newest market, Massachusetts will only be receiving beers in the “Smokestack Series.” Nutcracker is available in 6-packs and on draught for a suggested retail price of $8.99. The beer is scheduled to hit shelves in mid-November. Karl Strauss Fullsuit is brewed with the changing seasons in mind. Firm toasted malt and roasted nut flavors are underpinned by a hint of vanilla that comes from aging the beer on French oak. Belgian ale yeast adds a peppery, fruity character to the beer’s slightly dry and warming finish, making it perfect a cold winter. Fullsuit checks in at 6.3 percent ABV and 24 IBU’s. It is distributed in Californiaonly on draught and in 6-packs for a suggested retail price of $8.99. Wachusett Brewing Company recently released Imperial Pumpkin Ale. The fourth release in their line-up of 22 oz. beers, the 8 percent ABV Imperial Pumpkin is brewed with pumpkin puree and accented with Belgian Candi Sugar, Cinnamon, Nutmeg and Ginger. It will contain a generous amount of Two Row Barley blended with Carmel Malt fermented with Northwest Yeast, creating a unique profile for any fall beer drinker. The suggested retail is $5.99 per 22 oz. bottle; the product will be available in MA, RI, NJ and NY.

GERRY’S INSIGHTS

By Gerry Khermouch

THE NEW DISTRIBUTION LANDSCAPE – PART 2 incubators of its own early-stage brands. For instance, houses like Big Geyser in New York, Crescent in New Jersey and Haralambos in LA have played an adept hand moving Illycaffe into the right retail accounts. A lot of us figure it’s only a matter of time before Pepsi takes a similar enlightened view. Both, by the way, also have been subbing some of their core brands to indies to reach the small retailers that have dropped off the radar of their bottling systems. For indie houses who’ve long regarded Coke and Pepsi as monolithic enemies, this new era of “co-opetition” is a bracing divergence. Also bearing notice are attempts to weave independent houses into a more cohesive network that can meet the needs of major chains. The once-informal Northeast Independent Distributors Association has been doing this in a more conThe Red Bull network. With certed way, and Abarta’s GTG Red Bull’s own efforts to diverunit garners a lot of credit for sify its portfolio via line extenputting fast-growing Calypso sions like Red Bull Cola and lemonade in the right houses. shots and new brands like Carpe Coast Brands Group has been Diem not having panned out, rolling out its concept eastward some exclusive Red Bull houses from its West Coast base. And such as Beverage Works in the One effort by Coke is to employ indie Bud and Miller/Coors houses New York/New Jersey area have shops as incubators of it’s early-stage in some states have banded toset up separate operations to brands. Houses like Big Geyers in NY gether to offer full coverage to take on a select number of outand Haralambos in LA have played an select brands. side brands. At the same time, adept hand moving Illycaffe into Considering that many of us quite a few exclusive houses that the right retail accounts. have long regarded independent have been terminated by Red DSD as a vanishing species, this Bull – not always for cause – All other. Distributors of snacks, candy, is all quite a remarkable turn of events. have gotten a new lease on life by buildIt’s too early to say how sustainable these deli meats, tobacco, even charcoal – they ing portfolios of other brands, aided by the varied approaches will prove, but the trend all reach the same accounts beverage Red Bull aura of sharp execution. Former should offer hope to beverage entreprecompanies need, often without the disRed Bull shops in the Bay Area (Geyser), neurs that their brands will be able to find traction of other beverage brands in the Ohio (Buckeye) and Florida (Sand Dollar) an effective route to retail. are among those that seem to be succeeding portfolio. Ingenuity in cultivating them can pay big dividends. now as diversified houses. Longtime beverage-watcher Gerry Khermouch I should also mention a pair of other is executive editor of Beverage Business trends that are helping strengthen the Soft drink bottlers. Though Coke Insights, a twice-weekly e-newsletter covering independent system. One involves efand Pepsi now own the vast majority the nonalcoholic beverage sector. forts by Coke to employ indie shops as of their bottling systems, the remaining

LAST ISSUE I MADE THE PERHAPS

counterintuitive case that distribution options for fledgling non-alcoholic beverage brands actually may be on the rise, even in a broader landscape where wholesale and retail consolidation continue unabated. Entrepreneurs, sometimes from outside the beverage industry, are launching new houses. Beer wholesalers, their core beer brands plateauing, are being driven to reconsider participation in NAs, despite the complications these bring to their business models. And the parallel DSD system, that delivers milk, yogurt and other dairy products to retailers, also is beginning to migrate to shelfstable (they like to say “ambient”) items. But that’s not the entire extent of the trend. Here are a few other options that have been developing:

28 BEVERAGESPECTRUM.SEPTEMBER.2011

independents are getting more aggressive about plugging portfolio gaps with intriguing new brands. My theory on that is that, with the government having given them a free pass on the big bottler deals, Coke and Pepsi realize it wouldn’t look good for them to start pounding on the little guys, and the little guys know that. So they’re picking up more outside brands and in many cases doing a good job with them, without neglecting their core brands. I won’t name names here, because that seems to only get them in hot water, but trust me, they’re out there.

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THE SCIENCE OF SUBSTANTIATION BY JUSTIN J. PROCHNOW For those in the beverage, food and supplement industries who were relieved that they would never have to hear about subjects like biology or chemistry again after graduation from high school or college, the recent regulatory climate has brought back some unpleasant memories. Whether being used to determine the safety of ingredients and products or providing substantiation for claims, science has permeated the beverage, food and supplement industries deeper than ever. Science has always been important from the perspective of product development and manufacture; now, itâ&#x20AC;&#x2122;s become a key to advertising and promotion. With that broadening of the role of science, companies must now have scientific support for virtually everything they do. Increasingly, they are defending against congressional leaders attacking the safety of the dietary supplement industry or responding to regulatory agencies taking action for unsubstantiated ingredients or claims. Events of the past few months underscore the growing need for companies, retailers, and distributors to become familiar with the science behind the manufacture and marketing of some of these products. C 30 BEVERAGESPECTRUM.SEPTEMBER.2011

THE SCIENCE OF SUBSTANTIATION DIETARY SUPPLEMENT LABELING ACT

In the press release announcing the bill, Blumenthal added that “truth in labeling and honest marketing is critical to consumer safety – especially in products targeted towards young people – and should be required as an industry standard.” Many people inside the supplement industry do not disagree. However, industry insiders would argue that more laws are not needed; instead, enforcement of the laws and regulations already in place against egregious violators is the answer.

If the format and language used in the warning letter to Lazy Larry seemed In June, U.S. Senators Dick Durbin (D-IL) familiar, that’s because it was very similar and Richard Blumenthal (D-CT) introto a previous one sent to Innovative Beverduced a new bill targeting the supplement age Group in January 2010 regarding industry, S-1310 – the Dietary Supple“Drank,” as well as the warning letters ment Labeling Act. While it wasn’t the sent in November 2010 to four compafirst bill introduced by Sen. Durbin that nies marketing alcoholic beverages with targets the supplement industry, 1310 was caffeine. The discussion set forth in the primarily introduced to target products warning letter to Innovative Beverage that allegedly blur the line between dietary Group is very pertinent to the HBB, LLC supplements and food or beverages. In a warning letter because it involved conpress release announcing the bill, Durbin cerns over the same identified specific ingredient, melaproducts such as tonin. Although “Lazy Cakes” and “Drank” was a “Drank” as prodbeverage instead of ucts that are really a conventional food, food and beverages, the argument and but are allegedly concerns with safety being marketed as due to the available dietary supplements scientific literature to take advantage of were the same. what he perceived In the warning as less restricletters sent to the tive regulations, U.S. Senators Dick Durbin (D-IL) and Richard Blumenthal (D-CT) introduced a new bill targeting the four companies sellspecifically that they supplement industry, S-1310 – the Dietary Supplement Labeling Act. ing alcoholic beverdo not require the ages with caffeine, approval from the the FDA took issue with the use of caffeine Food and Drug Administration (FDA) that in the products. Caffeine has been used FDA WARNING LETTERS REGARDING is needed for use as additives in foods. in beverages such as soft drinks for many SAFETY OF INGREDIENTS Durbin’s statements ignore an imporyears, but FDA was concerned over the In July, less than a month after Durbin tant fact. Although ingredients in supplesafety of its use in alcoholic beverages. In called out Lazy Cakes by name, it seemed ments do not require approval by the FDA November 2009, the FDA actually sent out like that kind of enforcement was beginas food additives, ingredients still must be letters to companies requesting evidence ning. With the attention generated by the dietary ingredients and, as shown by the that caffeine was GRAS for use in alcoholic introduction of the Dietary Supplement draft New Dietary Ingredient Notificabeverages. Despite receiving responses Labeling Act, it was hardly coincidental tions guidance issued by the FDA early from several of the companies, including a that the FDA issued a warning letter to this summer, if the ingredients are new GRAS Notice from one of the companies, HBB, LLC, the manufacturers of Lazy dietary ingredients, a notification must be the FDA still had serious concerns about Cakes – now called Lazy Larry. In the filed unless a specific exemption applies. the safety of caffeinated alcoholic beverwarning letter to HBB, LLC, the FDA citFurthermore, not all ingredients in age products. Several of the companies did ed “various credible sources and reports conventional food and beverages prodproffer scientific evidence in support of the in the scientifi c literature” which raise ucts must be FDA-approved food addiuse of caffeine in alcoholic beverages, but safety concerns about the use of melatotives; an ingredient may also be legally the FDA was unconvinced. To the contrary, nin as a food ingredient. In particular, the added to conventional foods if it is dethe FDA cited publicly available scientific FDA cited several studies which indicated termined to be GRAS (Generally Recogliterature about the hazards of combining the role of melatonin in causing spontanized As Safe) and companies can make alcoholic beverages and caffeinated drinks neous malignant tumors and a potential their own GRAS affirmations. When like energy drinks. Similar to the analysis loss of photoreceptor cells in the aging looked at objectively, it is clear that the provided for the products containing melaretina. Based on the scientifi c literature Dietary Supplement Labeling Act is an tonin, the FDA determined that caffeine available and the safety concerns raised, attempt to capitalize on the publicity for use in an alcoholic beverage was not the FDA determined that the use of melagenerated over several products that have GRAS or a food additive and therefore, the tonin in a food product does not satisfy gained notoriety in order to place further products were adulterated. the criteria for GRAS status. restraints on the supplement industry.

32 BEVERAGESPECTRUM.SEPTEMBER.2011

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THE SCIENCE OF SUBSTANTIATION In all three cases, science played a key role in the FDA’s determination of the safety, or lack thereof, for each of the ingredients at issue.

SUBSTANTIATION OF CLAIMS While science can clearly take on an important factor in determining the safety of an ingredient or product, recognized for such purposes, science has become an even greater factor in the area of claim substantiation. Substantiation is a frequent “buzz word” heard in the industries regulated by the FDA and the Federal Trade Commission (FTC). But despite its frequent use, there is much uncertainty as to what levels of substantiation are actually needed to adequately support claims. This uncertainty exists because the FTC does not have a universal “bright line” test for substantiation, instead reviewing each claim on a case-by-case basis. The FTC has the primary responsibility for regulating advertising. According to the agency’s “Statement on Deception”, the FTC will find an advertisement deceptive and unlawful if it contains a material representation or omission of fact that is likely to mislead consumers acting reasonably under the circumstances. Additionally, each advertiser must have a reasonable basis for all expressed and implied claims before disseminating the advertisement. Essentially, this simplifies down to the basic principles that FTC enforces with respect to advertising; namely, all advertising must be truthful, not misleading and substantiated.

REASONABLE BASIS There are several factors that the FTC considers when determining whether an advertiser has a reasonable basis for making a claim. The type of product and the type of claim weigh heavily in such a

34 BEVERAGESPECTRUM.SEPTEMBER.2011

determination. Claims promoting products that affect consumer health or safety will, as a general rule, require higher levels of substantiation than other products. Additionally, advertising or labeling that promotes effects that are not easily assessed or verified will also command higher levels of scientific support. For example, a claim that something “tastes great” is likely to warrant a low level of support, both because it is highly subjective and because a consumer can make the determination for himself or herself. However, a claim that a product has a certain physiological effect or provides benefits at a microscopic level is difficult for a consumer to verify on his or her own; therefore, the FTC is likely to

require a higher level of substantiation to ensure that consumers are not being misled. Beyond scientific accuracy, other factors include the possible repercussions from a false claim. If a false claim could cause injury to a consumer, like foregoing a proven treatment, the FTC is likely to require a heightened level of support. Also – and this is a key issue when dealing with bureaucracy – those kinds of claims are also likely to move to the top of the FTC’s regulatory agenda. The FTC also looks at the amount of substantiation that experts in a particular field believe is reasonable to assist the determination as to whether there is a reasonable basis for a particular claim. When there is an existing standard for substantiation developed by a government agency or other authoritative body,

the FTC usually accords great deference to that standard. For claims relating to the health or safety of a product, including health claims for food and beverage products, that standard is “competent and reliable scientific evidence.”

COMPETENT AND RELIABLE SCIENTIFIC EVIDENCE Still, that’s where things get hairy, because there is no statute or regulation that defines “competent and reliable scientific evidence.” To date, the FTC has self-defined that standard in FTC orders as “tests, analyses, research, studies or other evidence based on the expertise of professionals in the relevant area, that have been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.” Recitation of that definition, sadly, often leads to the scratching of heads and blank stares and the resulting question “What does that mean?” Unfortunately, there is no definitive answer. What constitutes “competent and reliable scientific evidence” in the eyes of the FTC seems to change on a case-by-case basis. This makes it challenging for companies to ensure that they have properly substantiated their advertising and labeling claims. They have tried to help. In a guidance document titled “Dietary Supplements: An Advertising Guide for Industry,” the FTC identifies several factors that may help determine the level of substantiation necessary for a particular claim. First of all, the claim itself may help establish the level of scientific support needed. If an advertising claim asserts a certain level of support, an advertiser must have at least the level of support that is claimed, expressly or by implication, to exist. For example, if an

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SEPTEMBER 22, 2008

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I wish to receive Beverage Spectrum free of charge:

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I’d like to receive my subscription in the following format: Print (USA only) Digital Print and Digital (USA only) Please complete all information requested on this form and fax today! Signature Date Name Title Company Address City

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E-mail Please list a colleague at your location who should also receive a FREE subscription. Name Title 1. Do you buy or influence the buying of beverages? Yes No 2. Would you like to receive our weekly new product email newsletter? Yes No

3. What is your primary business type? (check only one) A Convenience Store B Supermarket/Grocery C Club/Warehouse D Mass Merchandiser/Dollar E Drug Store F Liquor Store G Wine Store H Wholesaler/Distributor/Broker I Beverage Only/Beverage Specialty Store J Beverage Company K Supplier Company L Services Company X Other (please describe) 4. What is your title? (check only one) A Owner/President/CEO/COO/VP/Director B Buyer C Merchandising Manager D Regional/District Manager E Store Manager/Supervisor X Other (please describe) 5. Please check all product types that your company sells, distributes, or manufactures: (check all that apply) A Carbonated soft drinks B Non-carbonated soft drinks C Bottled water D Beer E Wine F Liquor X None of the above BS0811

THE SCIENCE OF SUBSTANTIATION advertiser uses the statement “clinically proven,” the advertiser must have clinical studies that support its claim. If no specific level of support is claimed, the amount of substantiation needed depends, again, on the nature of the claim. A guiding principle for determining the amount and type of evidence that will be sufficient is to consider what experts in the relevant area of study would generally consider to be adequate. The FTC will evaluate all forms of scientific evidence to determine whether the substantiation level is met. Generally, well-controlled human clinical studies are considered to be the most reliable. (The FTC, as a general rule, values the quality of a study over the quantity of scientific evidence produced.) A study that is carefully controlled, with blinding of subjects and researchers, is likely to yield more reliable results. A study of longer duration can provide better evidence that the claimed effect will persist and resolve potential safety questions.

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But even when reliable studies are in place, one of the most common problems in claim substantiation is that the study reports relied upon do not support the claim that is being made. Marketers, often anxious to promote a product, exaggerate the benefits of a product as disclosed by the study report or ignore limiting features of a study, like a limited number of participants or a short time frame. The amount of a particular ingredient in a product should correspond to the amount used in the study substantiating the claim or the study may not support the claims made about the product. For example, a study touting the benefits of Vitamin C at 1000 mg probably will not support claims made for a product with 20 mg. Supporting scientific evidence and study reports must be verified to ensure that they properly substantiate marketer claims.

READY AND WAITING WITH SCIENCE IN HAND Companies cannot simply rely on the sci-

entific substantiation referenced by others and mentioned in reports on-line. Companies should keep their own substantiation files for each of the material claims made about their products. Conducting a clinical trial is often the best and most persuasive evidence in support of claims. There are also some excellent companies that cater to the food, beverage and supplement industries and maintain large repositories of scientific information that could support claims for particular ingredients. At the end of the day, every company in the food, beverage and supplement industries must be prepared to produce scientific support to substantiate claims, ingredients and the safety of products. Justin J. Prochnow is an attorney and Shareholder in the Denver ofﬁce of the international law ﬁrm of Greenberg Traurig LLP. His practice concentrates on legal issues affecting the food & beverage, dietary supplement and cosmetic industries.

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Capital Market Success what matters? by Michael Burgmaier in the last year, hundreds of beverage companies have found themselves either looking for capital or a buyer. Neither is easy. What should they do to improve their odds of success? When raising capital of selling a company, what matters to the parties with the cash? To get to that “Promised Land”, what should entrepreneurs and their boards keep top-of-mind when handling key strategic decisions? All companies require capital at some point and investors need a return on their investment, likely through selling the company (the famous “exit”) or other methods like paying dividends and going public. In the last year, Silverwood Partners, where I work, has concluded multiple successful exclusive advisory engagements in the sale of beverage companies (Function Drinks to Sunsweet Growers) and capital raises (Zola, Maverick Brands/Sunkist Naturals). As an investment banker focused on the consumer sector, the two primary professional activities that I spend my time with include assisting companies as they raise capital, and mergers and acquisitions (assisting companies in finding buyers or in finding businesses to buy). I am certainly not the only person qualified to talk about what investors and buyers look for, but as the deals above indicate, when it comes to beverage deals, our firm is in the thick of the market’s activity. Here are some thoughts on what helps guide us. Through our experience, we have identified several identifiable traits of companies which assist in successfully raising capital or selling – and doing so at attractive prices. In this article, I’ll discuss a few of those traits and relate them to successful transactions. The process of raising capital or selling a company creates a situation with multiple would-be investors and buyers poring over, assessing, and scrutinizing every data point, every strategic choice, and dissecting the company’s marketplace performance. A good buyer leaves few stones unturned and few areas of weakness unexposed. Every investor and buyer looks for one reason to say no. Don’t give them one. Focusing the strategic attention of the board and management on some of the key areas below could help sell the vision of what a company can become under new ownership or with new capital. 38 BEVERAGESPECTRUM.SEPTEMBER.2011

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go deep, not wide

In our view, one mistake often repeated by companies is the sense that a product needs to be everywhere overnight (a “land grab”). But distribution takes money. Building a brand takes time. And one of the most important pieces of data in any capital process is how fast a product sells off the shelf, sometimes referred to as velocity or same-store sales. Creating velocity requires time and effort – demos, guerilla marketing, creative merchandising, and other things, but if a brand can’t show same-store-sales growth over time, it is a brand in decline. Overall sales may go up because the product enters new distribution, but it’s the quality of those sales that matters more. Companies that are able to concentrate on creating a story of same-store growth are companies that also create a story that investors imagine they can replicate. So perhaps start by succeeding in limited markets, with key retailers to create a growth story.

leave holes

The corollary to not having flooded every distribution channel and geography is that major growth opportunities remain for the buyer or new investor. Items that can be sold in multiple channels with many doors, such as salty snacks and beverages, are often the ones that fetch the highest valuations. If a product can be sold in C stores, club, grocery, coffee and sandwich shops, etc… then a buyer knows they can easily ramp by turning on their sales and distribution power – if they see success in one or more channels or geographies, they can more easily see the path forward.

capital efficiency

In the current economic environment, accessing capital can be difficult – sometimes extremely difficult. Successful companies attractive to buyers and investors are often those that present the least amount of perceived risk. One way to minimize risk is to minimize the capital required to grow. The goal is to lessen the dollars required (paid40 BEVERAGESPECTRUM.SEPTEMBER.2011

in capital) to achieve revenue. Simply put, often the lower the ratio of paid-in capital to revenue, the higher the value a company can achieve. Companies with high ratios may be heading towards down rounds (future rounds at lower share prices) or the inability to raise capital. For example, which company should get a higher valuation, the one where $1 million of investment achieves $1 million of sales or the one that can grow to $5 million with the same capital?

had one, want another

Products which can be consumed quickly often lead to higher velocity and stronger sales. Companies can assess their current product lineup to see if there are ways to increase consumption patterns. Can a single-serve package (or convenient multisingle serve packages) be created? Can markets for new usage occasions be found? No one wants to be the product that stays in the refrigerator for six months; weekly replenishment creates more sales.

making money matters

Simply put, EBITDA (earnings before interest, taxes, depreciation and amortization) matters. That means that gross margin matters. Startups may not have scale, but that does not mean that negative margins should be acceptable – at any stage. Margins can improve over time, but many of the best businesses are those that are designed to make money quickly (remember capital efficiency?). Companies are expected to lose money at first (see next point below), but the path to profitability must be clear.

fuel the growth, don’t fill the hole

As stated above, every investor expects and knows that early-stage company will experience losses. This time period, often described as the “Valley of Death,” requires companies to invest in product development, team, inventory and more ahead of revenue. It’s that process that describes the plunge into the Valley – and

more and more, institutional investors have become reticent to fund that plunge; instead, they want their money to fuel growth, not fill a large hole of losses. Many of the points above (capital efficiency, velocity) are intertwined with this point, but the importance of this in today’s capital markets to institutional investors cannot be overstated.

create permission

For branded products, part of selling a growth vision is demonstrating where a brand can go. Management may not have all the answers yet in this regard, but the best brands are those that have strong market permission and the ability to extend into adjacent product areas (Honest, Kashi, Odwalla, Bear Naked, Rising Moon Organics…). Again, sell the vision and don’t create one that is overly limiting at the outset.

been there, done that

The right team minimizes investor/acquirer risk, and that team is typically a complete, domain experienced group that has already made money for investors. In addition, investors tend to like humble, experienced entrepreneurs who know what they know and also know what they don’t know. Making money for investors the first time can be the easiest ticket towards raising money for the second go-round. Those investors need to invest their returns somewhere…why not back with you? These are just a few of the characteristics of companies that are more likely to conclude successful capital market transactions. Others include market leadership (strong number one or solid number two), customer diversification, and product price point relative to competition and company size. If you can keep the numbers looking like they’re going in your favor, you’ve got a chance. But as you can see, there’s a lot of work to be done when it comes to making the process come out in your favor. Michael Burgmaier is a managing director at Silverwood Partners, LLC.

Strike up the band. Living Essentials’ 5-Hour Energy is a billion-dollar brand. Recent Symphony/IRI numbers show that over the past year, 5-Hour has continued to grow at a rate of more than 30 percent in supermarket, drug, mass and convenience channels – excluding WalMart, where its sales are reportedly up even higher. In those nonWal-Mart channels alone, however, 5-Hour was at $925 million. It’s gotten to the point where other heavy hitting potential competitors, no matter how heavy they hit, have stepped aside: earlier this summer Red Bull revealed it was getting out of the shot game, just two years after it stepped in. That the company had managed to grow the second-best performing energy shot in the U.S. didn’t matter. As Red Bull had once been to its own core category, 5-Hour is to shots. That kind of entrenched category identification could be a reason for most other brands to pack up and go home, but for some, the long gap between number one and the rest of the field is reason enough to get in the game. Look at the latest energy shot launch, Street King Energy Shot, which brings together the powerhouse duo of Curtis “50 Cent” Jackson and Big Red CEO Gary Smith – who, incidentally, was one of the earliest builders of the Red Bull brand itself. There’s a certain amount of judo in the Street King idea. The Living Essentials product has slowly moved to embrace an older demographic, gradually taking on coffee instead of energy drinks through media as varied as the Golf Channel and NPR. Meanwhile, Street King, which plans to market strongly through the fan networks of stars like Jackson and boxer Floyd Mayweather, is aiming younger, according to product developer Chris Clarke. “5-Hour energy goes for an older group,” Clarke said. ”We wanted to pull an edgier, stronger, cooler brand. Our attitude and state of mind is for people who are out there and are a bit younger.”

44 BEVERAGESPECTRUM.SEPTEMBER.2011

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Smith says he has been hesitant to invest in shots in the past, he said, although his manufacturing facility had serviced brands like DPSG-owned Venom Bite. With Street King, he moved from a contractor to an investor and his sales force is pushing to get the brand into large chains. “The proposition is that if you’re calling on retailers, then you know retailers and you can make a call on behalf of someone if it makes sense,” Smith said. “Using your reputation to sit in front of a retailer when it’s something you believe in is something you shouldn’t take lightly. And this product is something our guys believe in.” For shots, which are still a relatively new form factor, there are a lot of believers, and they aren’t just thinking about caffeine. Another beverage industry veteran, Bazi Natural Energy Shot CEO Debbie Wildrick, recently opined that although 5-Hour has “blown the category away with category growth and market share,” there is still strong potential for retailers to grow the overall shot category through addressing a variety of consumers and their need states. “The shot category has the opportunity to meet the needs of consumers in a variety of ways,” Wildrick told Beverage Spectrum. “It’s about differentiation and it’s about understanding that we may not necessarily compare to the volume levels of the leader but that we’re offering the consumer an ‘immediate fix’ for what ails them at a retail of $2.99.”

Additional functionalities are appearing as well, mirroring other evolving beverage categories. Earlier this year, Steaz co-founder Eric Schnell released the multi-function shot line, I AM.

46 BEVERAGESPECTRUM.SEPTEMBER.2011

Street King product developer Chris Clarke said, “We wanted to pull an edgier, stronger, cooler brand. Our attitude and state of mind is for people who are out there and a bit younger.”

With a high-ORAC superfruit blend, Bazi attempts to bridge the gap between the immediate effect of caffeine and the longlead functionality of antioxidants. But that’s not the only interesting functional variant offered in the category. From the ‘anti-energy’ perspective, there has been a large migration of relaxation and sleep aid products into the shot format. With so many early relaxation drinks taking branding cues from early entries Drank and Lean, which carried a pronounced recreational vibe, the move into shots has provided an opportunity for stylistic differentiation. Products like RelaxZen, Dreamwater, and Beauty Sleep have all gone for this more medicinal approach. Additional functionalities are appearing as well, mirroring other evolving beverage categories: protein shots, some of which even combine energy, are creeping into the market with increasing velocity. Hangover relief products like Last Round and Hangover Joe’s (both of which, ironically, made licensing deals of some sort with recent movie The Hangover) are also coming in shot formats. Probiotics, weight loss, and a panoply of other shot types are all trying to get a piece of the action. Earlier this year, yet another veteran of the beverage business, Steaz co-founder Eric Schnell, released a multi-function shot line geared toward the natural channel called “I AM” that addresses a variety of need states, from energy to focus to emotional outlook. Ben Lewis, the founder of Give Water and an investor in Green Shoots distribution, has also taken a similar approach with the Tonic brand, offering detox, relaxation, and energy elements as part of the line. Still, all of these variants resemble teacup poodles when compared to 5-Hour’s St. Bernard. If their different approaches work out, they category may indeed grow broadly as well as vertically, supporting Wildrick’s thesis. And don’t rule out a competitor to 5-Hour just yet. Just look at Red Bull, which used to dwarf the rest of the energy field. In case you didn’t realize, it’s got some pretty monstrous company.

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BRAND NEWS: ENERGY SHOTS

BRAND NEWS iSatori Technologies, LLC. Hardcore Ener-

gize Bullet, which has 300 mg of sustainedrelease caffeine for hours of jitter-free energy and no sugar, is now being sold in RaceTrac convenience stores. The product also has a new Facebook page with tips, free giveaways and fans to share their experiences. Ruckpack/Noots! Nutrition, LLC. RuckPack Energy and Wellness Shots were created by Marine Special Operators and are caffeine and sugar free. RuckPack is currently available in southern and central California, as well as online, but will be launching nationally on Veteran’s Day 2011. Tonic Health Shot is expanding its distribution. Tonic Health Shot will now be available in two regions of Whole Foods Market, all locations of Sheetz c-store chain, select East Coast GNC locations, UNFI East warehouses and in independent natural food stores, colleges and universities. All Day Energy Ltd., the UK based makers of iShot Potions 4 Life, launched in February. Potions 4 Life include iShot Skinny, formulated for weight loss, iShot All Night, a love potion formulated for lasting enjoyment, and iShot All Day & Decaff energy potions. Hangover Joe’s Get Up & Go hangover

recovery shot has signed an exclusive licensing agreement with Warner Bros. Consumer Products to manufacture and distribute The Hangover recovery shot. An officially licensed product from The Hangover Movie, the packing will feature one of the film’s feature cast on each bottle, including Alan, Phil, Stu, Doug and Mr. Chow. Minx xXx, a sexual enhancer with specific va-

rieties for both men and women, is available at Amazon.com, ThirstMonger.com and at drinkminx-xxx.com. Minx xXx is a product for bars, nightclubs, hotels, casinos, convenience stores and other impulse buy locations. Celsius Calypso Punch Shots are available at Ralph’s and Winn Dixie as well as through Europa and Select Nutrition in 12-pack display boxes or shrink wrapped twin-packs.

48 BEVERAGESPECTRUM.SEPTEMBER.2011

Celsius Calypso Punch Shots are clinically validated and designed to burn calories, reduce body fat, increase the metabolism and provide lasting energy. BigQuark LLC., a Missouri based company that produces BeautySleep, has announced the signing of National Sales Solutions to handle all domestic sales for mass retail chains. BeautySleep is a 2 oz. advanced dietary supplement that combines anti-aging compounds and cellprotecting antioxidants with sleep enhancers. Cintron is introducing a new Citrus flavored shot this fall, inspired by their Original 16 oz. energy drink. The new shot will feature Cintron 21 superboat, which was the Superboat Unlimited World Champion in 2010. GO FAST ENERGY SHOT is a new pocketsized energy solution for everyday consumption. GO FAST has a unique herbal and Ribose blend of ingredients to deliver energy in minutes that lasts for hours. Bonavitas is introducing Virgin Tequila,

which provides an energy boost and bodies and a warming sensation provided by capsaicin, which has been shown to boost fat burning activity. Naturally flavored and sweetened, Virgin Tequila has no artificial colors, but boasts healthy antioxidant compounds and 200 mg of pharmaceutical grade caffeine. 5-Hour ENERGY is introducing a new flavor of Extra Strength energy shot, Grape Extra Strength 5-Hour ENERGY. Grape Extra Strength is the eighth variety of 5-Hour and is available in single servings, 4-packs and 9-box counter racks. Verve has reformulated the Verve Energy Shot, which is available in 2 oz. serving sizes. Launched Aug. 1 with enhanced flavor profile and stronger energy blend, the previous regular and sugar-free varieties were combined into one low-carb formula with new bottles and shrink wrap label designed to look sleek and healthy when put next to competitors. Prestige Imports LLC. has launched Pent-

house branded male and female libido and

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BRAND NEWS: ENERGY SHOTS sexual wellness shots. The shots will come in three varieties: Per4mance Shots for men, Pleasure Shots for women and Penthouse Energy. 666 Energy Drink is offering a special to all

wholesalers and distributors of master cases that pick up the product at the warehouse near Philadelphia. 666 Energy Drink is a 4 oz. energy shot that comes in two fl avors, Lucifer’s Lemonade and “Virgin Sacrifice Cherry.” ProGo is a new protein and energy shot that

is coffee based, with an initial flavor, Original, that will feature a combination of coffee and vanilla to create a creamy, vanilla-java taste. ProGo Original contains 20 grams of complete proteins as well as essential amino acids, two grams of carbohydrates, zero fat and zero sugar, with 88 calories and 125 mg of caffeine. Last Round Hangover Support partnered

with Warner Brothers’ The Hangover Part II for co-branded advertising and packaging as well as a consumer promotion. Last Round will also be advertising on satellite radio. Last Round has also gained distribution with Slocum & Sons, a Connecticut wine and spirits distributor. Last Round can be found in nationwide chains like Rite Aid, Tops Friendly Markets, Acme and XtraMart. Modjo Life Natural Energy Shots is intro-

ducing Modjo 4Life, new functional energy shot that provides anti-aging and rejuvenation to consumers. Available in convenience stores, drug stores, specialty and natural retailers, Modjo 4Life is all natural and comes in fl avors or Grape Pomegranate, Island Punch and Simply Citrus. BAZI is a new product that features a blend of

eight superfruits that provides the body with an enhanced blend of energy and nutrition. BAZI is charged with antioxidants and powerful nutrients that unlock energy at the cellular level. BAZI is available in 7-Eleven, Circle K, RiteAid and Sports Authority, and has secured distribution with wholesalers like McLane, CoreMark, UNFO, Sportech and Europa. ON GO Energy has announced that ON GO

now has a suggested retail price of 99 cents and has readjusted its strategy for a value price, rather than a premium price.

50 BEVERAGESPECTRUM.SEPTEMBER.2011

NVE has launched a new multi-million dollar

advertising campaign supporting their Stacker2 6 Hour Power Extreme Energy Shot and Stacker2 Xtra Energy Shots. The company is utilizing integrated product placement, celebrity endorsements, and “brought to you by” billboards during MTV’s “Jersey Shore” and The History Channel’s “Pawn Stars” to reach an estimated 15,000,000 viewers weekly. AmmoCO USA, the US manufacturer of

AMMO energy shot is launching a new and improved version of their product with new looks and a new, more powerful formulation. Caffeine content in AMMO has been upped from 171 mg per 1 oz. to 200 mg per oz., and the new formulation will be available as of September 2011. Street King. Beginning in September 2011, Street King Energy Shot will be available in two distinctive flavors: orange mango and grape. Retailing from $2.49 to $2.99, Street King will be sold at retail outlets nationwide. With the purchase of every shot, Street King will feed a child in need. Visit streetking.com and facebook.com/streetking for additional information. I AM is launching a new functional shot, I AM FOCUSED to add to their four existing shots. The new shot is targeted to be a nationally distributed Whole Foods item, rolled out chainwide in a six month exclusive. The brand has currently gained approval in six Whole Foods regions, and will also be launching more new products in 2012 as well as 32 oz. “familysize” bottles for the spring. MuscleTech has introduced Smart Protein Energy Shots. The fruit punch flavored product has 20 grams of hydrolyzed liquid protein in each 2.5 oz. shot and contains no sugar or fat. GTOX has begun distributing its GTOX

Hangover Blocker detox shot in the Las Vegas market. The 4 oz. citrus-flavored shot is also sold in 12-pack cases at www.gtoxnow.com. NOHO – The Hangover Defense is now available throughout Las Vegas. The product is distributed by Bonanza Beverage and sold in 300 retail locations in the Las Vegas area.

It seemed like a perfect fit:

an all-natural zero-calorie sweetener, the first of its kind, cutting into the sugar and calories of juices without losing any of the sweetness. Even with their complementary natural auras, stevia-sweetened mid-calorie and low-calorie juices been were slow to get off the ground. But it looks like they’ve finally arrived. Look at Tropicana’s Trop50 line of fruit juice blends, which were introduced in 2009 and suffered through a disastrous re-branding effort that nearly sank the entire parent line. Combine that false start with the key problem with stevia – that it’s bitter and complicated to use – and there was something of a learning curve for consumers. “It’s another aspect that consumers really want, which is a lighter and more refreshing juice,” said Kate Keller, Marketing Manager for Trop50. “If you switch from Tropicana to Trop50, you have to get used to it.” Still, it seems like they are starting to. Trop50 flagship Orange has grown nearly 40 percent over the past year, according to Symphony IRI, and the brand sold more than $110 million in key grocery, convenience, mass and drug channels (excluding Wal-Mart), making it one of the fastest growing brands in the juice category, and off a very large, established base. According to Keller, 40 percent of the consumers who purchase will return – which means that the flavor is becoming less of an issue. Nevertheless, other big companies have not yet made the stevia switch. Campbell’s V8 V-Fusion line still uses sucralose, for example, as does Ocean Spray for its lower-calorie lines. PepsiCo was the earliest big-company adopter of stevia for juice, but they were soon followed by other entities of various size and purpose. Lo-Gly, for example, began with an idea to bring juice to diabetics, but it’s now marketed as a low glycemic index, stevia-sweetened juice blend that aims to provide natural aid in the uphill battle against expanding waistlines. But even with a clearly delineated mission, there’s a trade-off. “You have to pick your battles,” said Dan Necochea, a manager in Lo-Gly’s corporate sales operation. “You can’t have a high percentage of juice and have low sugars and calories.” Still, the overall consumer trend is toward cutting calories, and for beverages, that

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Trop50 Orange has grown nearly 40 percent over the past year, according to Symphony IRI, making it one of the fastest growing brands in the juice category. seems to be the larger overriding issue than taste variation. For Keller, it’s an encouraging sign that reading labels has become the vogue, and more juice consumers are concentrating on the bottle’s contents and calories. “Almost 65 percent of our consumers say they read labels and monitor sugar intake,” she said. Maral Barsoumian, Lo-Gly’s marketing director, says their sales have also been stoked by strong health interest from consumers. “With more and more people dieting and

54 BEVERAGESPECTRUM.SEPTEMBER.2011

all the articles on obesity, it makes sense we develop such a product,” Barsoumian said. “It wasn’t until recently that you go to a juice stand and see a calorie count.” Coke’s consortium of companies also includes some juice brands. Currently, Odwalla has two stevia products, Odwalla Mo’ Beta and the Odwalla Strawberry Protein Monster, but it is also researching stevia-sweetened blends for Minute Maid and many other categories across the board. To break the staying power of ste-

via’s bitterness, Coke says it blends stevia with other natural sweeteners like sugar and fruit juice for a fulfilling final product. “No single low- or no-calorie sweetener can match the taste and functionality of table sugar,” a Coke representative told Beverage Spectrum. “But some blends of sweeteners can achieve sweetness qualities that are very close.” Tropicana’s Keller said killing the bitter bite of stevia is a question of mixing the right fruit flavors, and that often consumers connect more with blends because they don’t expect to know what the product will taste like. “Our [research and development] team works really hard to find a taste profile that works for consumers,” Keller said. When it comes to stevia’s troubling taste, Barsoumian said that Lo-Gly’s solution was a strong work ethic. Instead of contracting another company to develop a solution, they did all the work themselves. “We’ve been able to get it to a point where you essentially can’t taste it,” said Barsoumian. “We literally did hundreds of experiments.” For the bigger companies, particularly as the battle against calories continues, expect hundreds more.

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BRAND NEWS: JUICE

BRAND NEWS Genesis Today, Inc. has launched two new juice products: Wake Me and Relax Me. Wake Me is an all-natural low-calorie citrus juice made with guarana, l-theanine, green tea extract and the superfruit acerola to provide energy, mental focus and alertness. The product contains 500 percent of the recommended daily value of vitamin B12 and 100 percent of the recommended daily value of vitamin C. Wake Me also contains 50 calories per serving and has no artificial sweeteners, flavors or colors. Wake Me is available at Wal-Mart in the refrigerated juice section. Relax Me is a natural relaxation drink that contains melatonin, GABA, theanine and tryptophan. Relax Me is a blend of Montmorency Tart cherries and teas that will help promote relaxation and natural sleep cycles. Relax Me is available at Wal-Mart in the refrigerated juice section. Cell-nique. Now in its sixth year, Cell-nique

has sold over 1.2 million bottles of its organic super green drink and is in the midst of revising its label to brand block itself as the “green drink brand.” LGJ, LLC. Ultra Lo-Gly is a new, clinically-test-

ed, low glycemic juice beverage that contains 35-45 calories, 11 grams of carbohydrates, and less than 9 grams of sugar. Ultra Lo-Gly is made with real fruit and sweetened with organic blue agave nectar. The product is sold on Walgreens. com, Amazon.com, and LoGlyStore.com. Simplifast, LLC has introduced Simplifast Diet Juice Shots. The product is designed to aid in weight loss by curbing hunger cravings, boosting energy and cleanse the body of fat. Each caffeine-free shot is rich in potassium and fiber and contains 12 percent juice as well as vitamins A, B, C, D3, E, energy B-complex and other electrolytes and antioxidants. The Blueberry Store has introduced a new

line of all-natural blueberry juices each made with Michigan blueberries. Frubob has introduced a new strawberry flavor

to its line of all-natural fruit floats. Each bottle of Frubob contains 100 percent real pieces of fruit bobbing in real fruit juice, is shelf-stable and contains no added sugar or sweeteners.

56 BEVERAGESPECTRUM.SEPTEMBER.2011

POM Wonderful has launched a new line

called LITE POM. Each bottle contains all the antioxidant benefits of a full serving of POM 100 percent pomegranate juice, but with half the calories. The products are allnatural, with no added sugar or sweeteners. Flavors include pomegranate, black currant, blackberry, and dragonfruit. Pitaya Plus, LLC has introduced two new flavors and new packaging for its dragonfruitbased beverage. Pitaya Plus is now available in pitaya/lemon/coconut water and pitaya/mango flavors and is currently sold in over 150 Whole Foods locations Colorado, California, Nevada, Arizona and Massachusetts. Prometheus Springs has launched three new flavors to its line of juices: Mango Chili, Spicy Pear and Citrus Cayenne. Prometheus Springs juices are USDA certified organic and infused with capsaicin, an ingredient extracted from chili peppers. Columbia Gorge Organic has introduced a

new line of “Mega” drinks. The beverages include Blueberry B’Mega, a berry juice blend that contains naturally derived B-complex vitamins from organic guava, holy basil and lemon extract. KonaRed has announced agreements with

Mussetter Distributing and Superior Products Company in Sacramento, CA and Hayden Beverage Company in Idaho to distribute its coffee fruit beverage. Through this beverage distribution partnership, KonaRed 16 oz. bottles and 3 oz. wellness shots will be available in numerous retail outlets throughout the Sacramento metropolitan area, and in grocery, convenience and health food stores in Idaho. Uncle Matt’s Organic is launching a new 100 percent organic apple juice this fall. The notfrom-concentrate orchard-style apple juice is made from a premium blend of U.S.A. grown apples and is flash-pasteurized and gluten-free with no added ingredients, flavors or preservatives. The suggested retail price for each BPA-free 59 oz. bottle is $5.99 - $6.99 and will be distributed nationwide through UNFI and select regional Whole Foods.

When it comes to potent performance ingredients, nature has the inside track.* Boost the hydration and recovery benefits of your next beverage naturally with pure, clinically tested Sustamine™.* Produced through a patented fermentation method, Sustamine is a dipeptide that is more easily absorbed by the body than complex protein molecules.* This makes Sustamine a highly effective ingredient for hydration, endurance and recovery.* The only GRAS L-Alanyl-L-Glutamine, Sustamine is also tasteless, odorless, and stable in liquids. If you’re looking for a rehydration and recovery ingredient that can give you a natural advantage, get to know Sustamine.

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BRAND NEWS: JUICE Noble Juice has announced that it will begin

using a new 100 percent compostable bottle and label made with all-natural Ingeo material. The PLA packaging is BPA-free, does not contain any petroleum products and can be completely composted and recycled. NBI Juiceworks will begin distributing its line

of Drenchers Super Juices Fit ‘N Lean beverages to convenience stores across the country beginning in September 2011. Each bottle of Drenchers contains a unique blend of vitamins and minerals and 10 calories per serving. Epicurean Beverages has re-introduced its line of Val de France Organic Sparkling Juices. The line of sparkling juices includes five flavors: apple, pear, peach, raspberry and pomegranate. The Champagne-corked bottle is designed to guard freshness and carbonation. The beverages are USDA Certified Organic, gluten free and kosher certified.

33.8 oz. varieties include Anti-Oxidant Force, a blend of eight superfruits, as well as Black Mulberry and Honey Dew. All Smart Juice varieties are certified organic, OU Kosher, allnatural, fresh pressed, not from concentrate and contain no preservatives or additives. JOOS is a line of 100 percent organic, fresh, non-pasteurized fruit and vegetable juices. Each bottle of fresh-pressed JOOS contains 10-14 types of organic produce, providing an abundance of vitamins, minerals and enzymes and twice the minimum daily requirement of fruits and vegetables. The product is distributed at JOOS Depots around the Boston Metro area and through home delivery to residents of Newton, MA.

ChakWave produces a line of handmade

Bai has launched Ipanema Pomegranate, the newest flavor in its bai5 line of coffee fruit beverages, in a 14 oz. glass bottle. Bai5 is an all-natural, 5 calorie, exotic fruit infusion, sweetened with organic stevia and enhanced with natural caffeine.

juices and was recently present at the Moksha Yoga and Ayurveda Festival in Santa Monica, California serving up Chakra-inspired juices to loyal fans and attracting new devotees.

Cutting Edge Beverages has introduced a new Orange Tangerine flavor for its Juice Bowl product line.

In Zone Brands has introduced new “Value Packs” for its BellyWashers, TummyTickler and TummyTickler Tots product lines. The BellyWashers’ Value Pack contains five 8 oz. bottles of 100 percent juice fruit punch and includes a character-topped cap. The TummyTickler Value Pack contains seven 6 oz. bottles of 100 percent apple juice and one free collectible and spill-proof character-topped cap designed for active preschoolers. TummyTickler Tots’ Value Pack contains 11 4 oz. bottles of 40 percent reduced sugar apple juice and one free spill-proof character-topped cap and is designed for toddlers. Value Packs are currently available at Walmart stores nationwide. Sunny Delight Beverages Company recently launched a reformulated line of Veryfine 100 percent juice products packaged in 8 oz. bottles. Each beverage contains 120 calories or less and is fortified with three vitamins or minerals. Smart Juice LLC has announced the addition of three new varieties of its existing line of 100 percent organic, fresh-pressed juices. The new

58 BEVERAGESPECTRUM.SEPTEMBER.2011

Dream Foods International has introduced an old-fashioned Lemonade and Limeade to its line of Italian Volcano juice products. The new flavors are served in 750 ml lead-free Italian glass bottles. Odwalla has launched Odwalla Super Protein Mango. The new flavor is made with apple juice, mango puree, orange juice and banana puree and fortified with 20 grams of soy protein in each bottle. The drink also provides 50 percent of the daily value of calcium and 150 percent of the daily value of vitamins B12 and B6. The beverage is packaged in a 12 oz. 100 percent recyclable PlantBottle and distributed in the refrigerated section of natural food stores, select supermarkets and specialty outlets throughout the United States. Açai Roots launched Açai Juice + Coconut

Water, a certified organic beverage. The company’s flagship product, Pure Premium Acai Juice, is now certified organic as well. Both products are available in 10 and 32 oz. bottles.

Learn more about the what, where and how of PUREFRUIT™ and its appeal with consumers! Download the insight report, “The PUREFRUIT™ Revolution” and visit www.purefruit.com. Tate & Lyle is a leading provider of high-quality sweeteners, texturants, wellness ingredients and innovative solutions for the food and beverage industry. Our passion for food shines through in everything we do, and we are dedicated to helping our customers create cost-effective, better-tasting, healthier and highly successful foods and drinks.

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PUCKER UP EVERYONE’S SWEET ON LEMONADE BY RAY LATIF Lemonade, that quintessential summertime drink, is becoming a drink for all seasons.

No longer resigned to backyard barbecues and ball games, the category has seen a surge in year-round consumption. Consumer demand for the beverage drove sales of single serving bottles to $154 million over the last 52 weeks, up 11.3 percent over the same period in 2010, according to Symphony/IRI data. That number is only partially revealing of the pace of lemonade’s growth, however, because much of that growth has come in the up and down the street accounts that are the bread and butter for the marketers who have benefitted the most from lemonade’s popularity: tea companies. In fact, lemonade’s new cycle of growth is interesting because it is taking place largely as an adjunct product to RTD tea, which has found it to be both a convenient part of the product mix and a highly successful combination product. From AriZona’s “Arnold Palmer” to New Leaf’s “Tiger” to Honest Tea’s “Half & Half”, the mix of lemonade and black tea has 60 BEVERAGESPECTRUM.SEPTEMBER.2011

been one of two strong forces driving up lemonade sales, and also driving them up on an under-the-radar basis. Another has been the growth of a single brand, Calypso, which developed a tasty, fairly inexpensive, low-barrier to entry lemonade line on the East Coast that many larger companies have attempted to copy. Here’s how quickly it’s gone: in the last two years, ready-to-drink tea companies including New Leaf, Honest Tea, Sweet Leaf, and AriZona all launched several different lemonade SKUs. Additionally, the natural products side of Monster Energy, Hansen’s, launched Hubert’s Lemonade, and also a half-and-half variant of its new Peace Tea line based on the movie Caddyshack. While it’s not a hard move conceptually to combine tea with lemonade, it’s the arrival of Calypso as a regional force that seems to have energized the market – in much the same way that Snapple did more than a dozen years ago. Tim Kezman, the president of King Juice Company, which makes of Calypsos, cited the relatively simple messaging needed to market the lemonade as a key factor. Simply put, he said, “Everyone knows what lemonade is.” It’s simple but hard-won wisdom, Kezman explained. Before Calypso began

selling lemonade, the company produced two functional beverages, each of which fared poorly in the market. Kezman said he found that the high cost of educating consumers as to the benefits of the products prompted their failure -- and spurred a desire for the company to develop a beverage that appealed to a wide variety of demographics and didn’t require a great deal of consumer communication. For Calypso, lemonade was the answer. Calypso, which has carried a line of lemonades since 2000, has seen double digit sales growth in each of the past eight years. And over the past 12 months, sales of Calypso lemonades were up 51 percent, rising to $14.7 million, according to IRI, far outpacing lemonade sales of brands such as Snapple and Tropicana. And according to some within the beverage industry, it is Calypso’s track record of success that drew tea companies into the mix. “No one paid attention to lemonade until [companies] saw Calypso’s strong year after year sales and wanted to get on board,” said Tom LeBon, co-founder of New Age Beverage. LeBon, whose Denver, Colo.-based distribution company carries a number of lemonade brands, also pointed out that as a whole, the ready-to-drink tea category has weakened from its once-scorching pace. Although the category continues to grow, tea companies are not getting the same sales increases that they once did, and, seeing the movement and potential of lemonade as a product on the rise, they imagine that it’s not a big lateral step to take. Take New Leaf, which began producing a line of lemonades in April 2010. “There was unmet consumer demand for a natural and ‘good-for-you’ line of lemonades,” said Lynne Magner, a marketing manager at New Leaf. “Our teas offer consumers a delicious, healthy and all-natural alternative that we wanted to expand on, and lemonade seemed like the perfect fit.” Magner also pointed out that lemonade was not a saturated market and one poised for greater growth as consumers increasingly turn away from consumption of carbonated soft drinks. The company believes so strongly in the growth of the category that, according to Magner, New Leaf is now leading with lemonade as its featured product line.

62 BEVERAGESPECTRUM.SEPTEMBER.2011

No one paid attention to lemonade until [companies] saw Calypso’s strong year after year sales and wanted to get on board. – Tom LeBon, co-founder of New Age Beverage. While it is somewhat surprising that New Leaf would devote greater energy and resources into its lemonade products, it is not entirely unexpected. The products fit nicely with tea companies’ core lines, providing economies of scale for packaging, sweeteners, and the like. Additionally, in many of the same occasions when consumers purchase tea drinks, they might just as often buy a bottle of lemonade, noted Seth Goldman, the CEO of Honest Tea. Goldman, whose company introduced a new zero calorie lemonade in May, explained that lemonade is a particularly complimentary beverage for the company in the sense that it is produced and marketed along the same lines as its tea drinks. Although it’s highly unlikely that Honest Tea will ever follow New Leaf’s lead and produce lemonade as its primary bev-

erage, “The most important part of our name is the word, ‘honest,’ not the word, ‘tea,’” Goldman said. “[For our lemonade], we use the same brand traditions and taste profile as Honest Tea, starting with organic ingredients.” In the same vein, AriZona Beverages, the country’s largest seller of RTD teas, created a lemonade product that became a highly successful line extension for the company. Carrying the same “big can” style, according to communications manager Casey Sullivan, the product does well in the market as the beverage is one that carries appeal across multiple demographics, while AriZona’s Arnold Palmer brand, with the classic lemonade/tea mix, has been a runaway hit for the company. Still, there’s something of an overload point for all-natural lemonades, much as there’s been a strong burst of overcrowding in the tea space lately. Sanwat Gill, the CEO and founder of San Diego based distributor 5 Star Beverages, for example, believes strongly in the growth of the lemonade category, pointing to solid results in year over year sales. However, while his company currently carries a number of lemonade products, he cautions that 5 Star is unlikely to carry too many competing lemonade brands, particularly until he is convinced that lemonade is truly a year-round product. “For us, lemonade sells really well in the summer and dies down in the winter, and so for new products on the market, it’s really about trial and error once it’s on the shelf,” Gill said. “Ideally, the maximum we want is six to eight SKUs of any brand. Any more than that and it becomes tough to find shelf space.” But that doesn’t mean that there isn’t plenty of room to grow, particularly considering the fact that no true national lemonade brand has come to cause the kind of sensation that once accompanies the growth of Snapple of Nantucket Nectars. And while that might create room for competition, Kezman seems nonplussed. “Up until a couple years ago, the category was pretty empty,” he said. “We’ve remained true to the quality of the product, and we haven’t cut costs just to have a lower price point at retail. We’re aware of and respect our competition, but are not scared of our competition.”

BRAND NEWS: LEMONADE

BRAND NEWS Honest Tea has launched Honest Ade Clas-

sic Lemonade. The beverage is USDA-certified organic, sweetened with stevia and contains zero grams of sugar and zero calories per 8 oz. serving. The product is packaged in a 16.9 oz. PET bottle and sold at a suggested price of $1.79. It is distributed in a variety of retail stores on the East and West coasts. The Blueberry Store has launched Blueberry Lemonade. The all-natural beverage is made with Michigan blueberries and packaged in a 16 oz. glass bottle.

Tropical Variety Pack, which comes in a fully bilingual case pack. This new kid tested, great tasting lemonade flavor has 75 percent less sugar than leading competitors, is a good source of B and E vitamins and comes in the iconic 8 oz. barrel shaped bottle. Dream Foods International, LLC has introduced 100% Organic Old Fashioned Premium Italian Volcano Lemonade. The balance of citrus and sweet gives a delicate and refreshing flavor to this traditional summer drink. Marley Beverage Company has intro-

Epicurean Beverages has launched a new

pink limonade fl avor to its Rieme line of authentic limonades crafted according to timehonored traditions. The beverages are produced in the south of France using all natural flavors. The great grandson’s founder has used the company’s traditional knowledge and manufacturing process since 1921. Simplifast, LLC has introduced Simplifast, a 100 percent natural lemon juice based detox diet beverage. The ready-to-drink product contains juice from fresh lemons, are an excellent source of dietary fiber and vitamins A, B6, B12, C, D & E. Simplifast is packaged in 2.5 oz. shots and 16 oz. bottles and iavailable at Amazon.com, and in leading specialty supermarkets, drugstores and supplement shops throughout the U.S. Prometheus Springs recently launched three

new spicy lemonade fl avors, Citrus Cayenne, Mango Chili and Spicy Pear. Each of these organic lemonades contains capsaicin, the active ingredient in cayenne pepper. The products are distributed by Real Soda and UNFI. New Leaf Brands has introduced a line of

all natural lemonades featuring four fl avors: Homemade, Strawberry, Black Cherry and The Tiger (half tea/half lemonade). Each lemonade is a made with a unique blend of lemon juice, natural flavors and organic cane sugar. American Beverage Corporation has in-

troduced a new lemonade flavor in their redesigned Little Hug Fruit Barrels 20 count

64 BEVERAGESPECTRUM.SEPTEMBER.2011

duced Marley’s Mellow Mood Lite Half Lemonade, Half Tea, the newest innovation to its roster of Marley’s Mellow Mood 100 percent natural relaxation beverages. The product is formulated with an exotic blend of all natural botanical ingredients sourced from around the world. Chamomile, Valerian Root, Lemon Balm, Hops, Passionflower and Melatonin. Marley’s Mellow Mood Lite contains 40 calories per 8 oz. serving and comes in a 16 oz. glass bottle. MADE Drinks Company has introduced a

new label and new logo for its line of blended juice and green tea drinks, which include three lemonade flavors: Blueberry Lemon, Pomegranate Lemon, and Strawberry Lemon. Bolthouse Farms has introduced Mango Lemonade. The beverage is made with fresh squeezed lemons and ripe mangos and sold in 15.2 oz., 32 oz., and 52 oz. sizes. Calypso has introduced a Southern Peach flavor to its line of lemonades. The beverage is produced with cane sugar, natural flavors, and real lemon bits and packaged in a 20 oz. proprietary glass bottle. Lorina Inc. has launched a new line of premi-

um Artisanal French Sodas that include lemonade and pink citrus lemonade flavors. The line is called “Prestige Pop” intended for celebratory occasions. The sodas are produced with water from a natural spring surging from the Vosges sandstone along with natural fruit flavors and pure crystal sugar.

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BRAND NEWS: LEMONADE

Uncle Matt’s family-friendly 59 oz. not-from-

Hansen Beverage Company has launched

concentrate lemonade is a refreshing take on this summertime classic with fresh-squeezed flavor reminiscent of lemonade from a roadside stand. Uncle Matt’s lemonade uses only organic ingredients and no synthetic pesticides, herbicides or fertilizers are ever used in the growing process. Distribution is available through UNFI and Albert’s Organics.

strawberry and limeade flavors to its line of all Hubert’s Lemonades. The beverages are produced with a 10 percent juice base, and sweetened with cane sugar and Truvia. The products are sold at Publix, Ralphs, Fresh & Easy, select Whole Foods Markets, and Cost Plus World Market. Maine

O.N.E. Coconut Water has introduced a lem-

on lime fl avor to its O.N.E. Active line. The product contains five essential electrolytes and more potassium that traditional sports drinks.

Root

Handcrafted

Beverages.

Maine Root Lemonades are now distributed on Wegmans supermarkets and Whole Foods’ North Atlantic and Southwest regions. Hansen Beverage Company. Hansen’s Peace

S. Martinelli and Company. Martinelli’s All

Natural Lemonade is made in the traditional style with lemon juice, water and sugar. It contains no high fructose corn syrup or preservatives. Flavors include Classic, Sparkling Classic, Prickly Passion and Sparkling Prickly Passion.

66 BEVERAGESPECTRUM.SEPTEMBER.2011

Tea’s Caddy Shack, a half lemonade - half tea beverage takes a light-hearted, humorous look at the country club set. It is sold in 12 and 23 oz. cans. The product is distributed by CocaCola Refreshments USA.

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THE The Sunshine State a lot – and that FIGHT matters can drive beverage companies crazy FOR FLORIDA

By Ray Latif

AS ONE OF THE NATION’S electoral swing states as well as the site of no fewer than 15 Super Bowls, Florida is no stranger to competition. And that extends to the beverage business, as well, where hot weather, nearly 18 million adult consumers, and a population that mixes classes, ethnicities, ages and urban and rural locations with abandon combine to make the Sunshine State highly influential when it comes to determining a brand’s ultimate success or failure. The geographic and social setup of the state makes it a key laboratory for brand incubation, as well as for creating portable business strategies that can be used in other markets. But with all its advantages when it comes to creating brand insights, Florida presents difficulties. Entrepreneurial beverage companies can have a hard time finding a foothold in the state because distribution is chain driven and the fact that the Coke, Pepsi and Dr Pepper Snapple systems are, for the most part, closed to these brands. Making things even more difficult for these companies is the fact that there are few ‘third tier’ distributors in Florida. In recent years, many of the state’s small distributors have either gone out of business or were acquired by large beer houses. And

68 BEVERAGESPECTRUM.SEPTEMBER.2011

in a state that comprises over 54,000 square miles of land, the lack of independents makes full coverage of Florida a daunting task. Nevertheless, some beverage brands with national aspirations -including Reed’s, XYIENCE, Icelandic Glacial and Activate -- have recently managed to create strong coverage in the Florida market via the development of direct store distribution networks comprised of small and mid-sized beer distributors. The upside for the beer houses is simple: with the demand for larger beer brands slowly weakening, revenue from non-alcoholic beverages offsets declining sales. “Florida is a tough state, but it’s a big step to going national,” said Dan Holland, the CEO of Activate, a bottled water that utilizes an in-cap reservoir of powdered functional ingredients. Activate recently established distribution equity agreements with several beer houses in Florida, including Brown Distributing, North Florida Sales, SR Perrot and Florida Distributing Company. Within two months of launching in Florida, Activate is now distributed to a number of small format retailers and convenience stores in 70 percent of the state. Holland, a former beverage distributor himself, explained that Activate’s appeal to beer houses was related to several factors, chief among them is the company’s solid financial footing. Holland explained that unlike many companies, Activate has the cash flow (via Tata Global’s recent increased stake in the company) to support distribu-

tion with strong consumer education and marketing efforts – a key element of most distribution agreements. But having the cash to support distribution is only part of the game. Consolidation within the state’s distribution houses has limited the options for beverage companies, while the state’s population boom has created new growth and sprawl that make it particularly critical for a brand to be authorized for sale in retail chains. “The first thing out of [distributors] mouths is, ‘What chains do you have approved?’” Holland said. Holland noted that while Activate is currently authorized for sale at Hess and Kangaroo Express convenience stores, the company is in the midst of negotiations with several supermarkets chains in the state and expects Activate to have full distribution in Florida within two months. In the case of Reed’s, which produces a line of premium natural sodas, the recent completion of a full DSD network in Florida has given the company far greater ability to reach mainstream consumers. The company completed its network in June and works with four craft beer distributors in the state including JJ Taylor Distributing and Fresh Beer, Inc. Reed’s is already authorized for sale at Publix and Winn-Dixie, Florida’s two largest supermarket chains, but Neal Cohane, Reed’s senior vice president of sales and marketing, said he believes that the comple-

THE FIGHT FOR FLORIDA tion of its network leaves the company poised for far greater access and sales volume – and may ultimately help Reed’s products transition from the natural foods section to the mainstream beverage aisle. “Direct [to warehouse] may be nice and easy, but speed to shelf is a big problem,” Cohane said. “In one chain where we go direct, we have to wait on the beverage or natural foods manager to stock our product. By the time the person gets around to doing so, we’re out of stock. DSD is not perfect, but [as opposed to going direct] where we go DSD, volume goes up tenfold.” It’s that opportunity to find a burst of profitability from new product introductions that has led some Florida independents back to a place where they will start carrying entrepreneurial beverages – but even then, those independent houses warn, conditions in the state can cause new beverage companies plenty of headaches. Take Florida Distributing Company (FDC), for example, which began distributing NAs about four years ago and has quietly expanded the number of brands that it carries. FDC manages to sell NA’s in almost all of the retail locations where the company delivers its beer products.

70 BEVERAGESPECTRUM.SEPTEMBER.2011

The company currently distributes Nestlé Nesquik, Boylans, Talking Rain, Sweet Leaf, NY20 Water, Juicy Juice, XYIENCE and just picked up Activate in August. “Our NA portfolio is positioned to do very well. We feel like there is tremendous upside for these brands,” said Joe Quinlivan, the director of marketing for Reyes Holdings, the parent corporation of FDC. But for the beverage companies themselves, Quinlivan said that DSD through Florida beer houses is, for the most part, a cash-on-delivery game – and that means that unless a beverage company is flush with cash or investor funded, it can be difficult to find partnership with a beer house. Also working against those companies is the fact that contractual constraints like territorial exclusivity become even more restrictive when considering the limited number of DSD options in the state Nevertheless, Quinlivan did state that if a beverage company was able to overcome these challenges, the synergies of streamlined delivery would be great. While FDC currently distributes 13.5 million cases of beer and only 120,000 cases of non-alcoholic beverages, Quinlivan expects FDC to increase its distribution of NAs by nearly

five-fold within five years. Reuben Rios, the vice president of sales for XYIENCE, shared similar expectations. “[Our distribution agreement with FDC] is a huge step forward for XYIENCE,” said Rios. “Florida Distributing Company has a proven track record and their sales team has tremendous enthusiasm for our brand. We expect to see [our] product moving very quickly.” It is specifically the type of distribution partnership that FDC and XYIENCE share that is key for any emerging beverage company to succeed in Florida, said Ken Sadowsky, the executive director of the Northeast Independent Distributors Association (NIDA) and a part-time Florida resident. Sadowsky explained that even in a chain-driven state, up-anddown-the- street distribution is vital to the success of new and emerging brands, and it is ideal to work with a distributor who “has done it before.” “At the end of the day, the typical retailer has a shorter view [on new beverage brands] than does a distributor,” said Sadowsky. “It is imperative that a beverage company find a distributor that has a wherewithal vision for its brand.”

PLEASE VISIT US AT BOOTH 6208 - Hall A For further information please contact Ed Newman at 609.213.4300.

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EXPO EAST · BALTIMORE, MARYLAND

TRADESHOW PREVIEW

BALTIMORE CONVENTION CENTER: September 21 – 24 (Trade Show Sept. 22 – 24), 2011 SHOW FLOOR HOURS: Thursday & Friday: 10 a.m. – 6 p.m. Saturday: 10 a.m. – 4 p.m. After a three-year run in Boston, the East Coast version of Natural Products Expo has headed back to Baltimore, Md., the town it left in 2007. High prices and lower attendance in Boston created an easy rationale for the move for the show. Typically, attendance comes close to 20,000, with more than 900 booths. New this year is a New Products Pavilion, which will offer a designated space for new brands. This year’s keynote address will be given by motivational speaker and writer Daniel H. Pink, and Laurie David, an environmentalist, producer, and author, will also be part of the educational program.

Boulder, Colo.-based radio show ETown and national philanthropic organization Farm Aid will each be running after-hours programs during Expo East, so attendees are sure to get their fill of drinks and music after the show floor closes. Key educational programs of particular interest to beverage retailers and marketers include a Retailer Workshop and a Productto-Shelf Workshop, both on Wed., Sept. 21, and a series of sessions on the state of the organic market throughout the show. More than 70 beverage companies will be in attendance, including the following:

EXHIBITORS AND BOOTH NUMBER (as of August 23, 2011) Adagio Teas

2719

Ginseng Up Corporation

8301

Palo Products LLC

8308

ALO Drink by SPI West Port, Inc.

838

Hansen Beverage Company

1012

Penta Water LLC

1247

Avitae Caffeinated Water

1055

Harmless Harvest

2717

Protica Nutritional Research

5231

Ayala’s Herbal Water

429

HerbaSway Laboratories LLC

6433

Pyure Brands, LLC

3012

Bazi International, Inc.

5100

Honest Tea

2005

Reeds Inc

460

Brandstorm

951

honeydrop beverages

458

robertet

4428

Cal Naturale

632

icebox water

352

Rob’s Really Good

1706

Carmi Flavor & Fragrance Co.

508

Inko’s White Tea

1036

Rock Humanity

1059

Chia Stuff, Inc.

636

InterNatural Foods

817

rooibee red tea

2713

Chill Drinks

8101

ITO EN, LTD.

416

Runa LLC

2605

CocoKefir LLC

559

Jayone Foods, Inc.

558

SeabuckWonders

837

Code Blue

336

Juve International LLC

210

Sens Corp (RejuvLife)

8203

Dox Cardio Water

540

LA Naturals

4806

silk

1025

DreamPak

6427

Lakewood Organic Juices

1138

SIPP eco beverage co.

152

earthsong organics

2714

Maine Root Handcrafted Bev.

1037

Smart Juices LLC

2414

Eden Foods

822

Marley Beverages LLC

234

Summit Spring Water, Inc.

138

Elite Naturel/Organic Juice USA

1129

martek bioscience

5300

SunOpta Inc.

1908

Ex Drinks LLC

1151

Naked Juice

330

Sunsweet Naturals

310

Exotic Food Co., Ltd

841

NOW Foods

5819

tazo

1022

flavor producers

638

nutricap labs

5626

The Source

4717

flavorganics

2012

O.N.E. One Natural Experience

535

Tizane Beverages

2617

Flavrz Beverage Corp.

2814

OKF International

955

U Natural Hydration

739

Fresh Ginger, Ginger Ale

657

Omega Products Inc.

1409

Vita Coco - All Market

1039

Fruit d’Or

2207

oogave

2816

Wyman’s

714

Galilee Tisanes

8406

oregon tilth

8111

Zevia LLC

956

Genesis Today

6421

Organic Valley

1922

PLEASE NOTE THESE LISTINGS ARE COURTESY OF EXPO EAST; FINAL UPDATES ARE AVAILABLE ONLINE AT WWW.EXPOEAST.COM

72 BEVERAGESPECTRUM.SEPTEMBER.2011

TRADESHOW PREVIEW

NACS TRADE SHOW · CHICAGO, ILLINOIS

McCORMICK CONVENTION CENTER: September 30 – October 4, 2011 SHOW FLOOR HOURS: Sunday & Monday: 11:30 a.m. – 5:30 p.m. Tuesday: 9:00 a.m. – 1:30 p.m. With general sessions focusing on emotion, reality, and retailing, this year’s NACS show will be held at the McCormick Convention Center in Chicago, Ill. from Friday, Sept. 30 through Tuesday, Oct. 4. The sales floor and exposition will be open from Sunday through Tuesday and will feature more than 150 beverage companies. Opening the general session on Oct. 2 will be “Life is Good” co-founder Bert Jacobs, an entrepreneur and optimist who launched the lifestyle clothing and event brand in 1994. On Oct. 3, a pair of retailers, Speedway LLC President Tony Kenney and Senior Vice President of Retail Marketing at Valero Energy Corporation Gary Arthur will bepanelists for a panel called “A Tale of Two Retailers.” The panel discussion will be moderated by Joe Petrowski, CEO of Cumberland Farm Group of Companies. Finally, on Oct. 4, former NBC Anchorman Tom Brokaw will deliver the closing presentation. Nearly 22,000 attendees were at the 2010 NACS Show in Atlanta. This year’s show will likely be of equal and greater size,

and feature more than 1,300 total exhibitors. Founded in 1961 as the National Association of Convenience Stores, NACS is celebrating its 50th anniversary as the international association for convenience and petroleum retailing. The U.S. convenience store industry, with more than 146,000 stores across the country, posted $575 billion in total sales in 2010, of which $385 billion were motor fuels sales. NACS has 2,100 retail and 1,600 supplier member companies, which do business in nearly 50 countries. BEVNET SHOW COVERAGE SPONSORED BY:

SCHEDULE OF EVENTS

FRIDAY 9.30.11 8:00 AM – 5:00 PM Registration 8:30 AM – 9:00 AM Joint Session for Industry Assn. Exec. Breakfast 9:00 AM – 12:00 PM Joint Session for all Industry Association Executives Meeting 1:00 PM – 4:00 PM Global Government Affairs Council Annual Meeting 6:00 PM – 7:00 PM NACS/PMAA Salute to State Association Leaders Reception 7:15 PM – 10:00 PM Supplier Board Reception & Dinner SATURDAY 10.1.11 7:30 AM – 6:00 PM Cool New Products Preview Room (Retailers Only)

7:30 AM – 5:30 PM Registration 8:00 AM – 4:00 PM NACS Booth 8:30 AM – 9:30 AM Supplier Board Executive Session 9:30 AM – 11:00 AM Supplier Board/Supplier Member Meeting 9:30 AM – 12:00 PM International Committee Meeting 12:30 PM – 5:30 PM NACSPAC Lounge 12:00 PM – 6:00 PM International Lounge 12:30 PM – 4:15 PM NACS Board of Directors/Retail Member Meeting

6:00 PM – 7:30 PM Welcome Reception (ticketed event)

11:30 AM – 6:00 PM Cool New Products Preview Room

9:15 AM – 10:15 AM General Session: A Tale of Two Retailers

7:30 PM – 10:00 PM Board of Directors and Past Presidents Dinner hosted by Altria

12:00 PM – 1:00 PM New Member Buddy Lunch (confirmed reservation)

10:30 AM – 11:15 AM General Session: Ideas 2 Go

MONDAY 10.3.11 7:30 AM – 5:30 PM Registration

TUESDAY 10.4.11 7:30 AM – 1:30 PM Registration

SUNDAY 10.2.11 7:30 AM – 11:30 AM Cool New Products Preview Room (Retailers Only) 7:30 AM – 5:30 PM Registration 7:30 AM – 6:30 PM International Lounge 8:00 AM – 5:30 PM NACS Booth 8:00 AM – 6:45 PM NACSPAC Lounge

1:30 PM – 5:00 PM Workshops

8:45 AM – 9:45 AM Workshops

5:15 PM – 6:00 PM New Member Welcome Reception (ticketed event)

11:30 AM – 5:30 PM Exposition

74 BEVERAGESPECTRUM.SEPTEMBER.2011

10:00 AM – 11:15 AM General Session

7:30 AM – 6:00 PM Cool New Products Preview Room 7:30 AM – 6:30 PM International Lounge 8:00 AM – 9:00 AM Workshops 8:00 AM – 5:30 PM NACS Booth 8:00 AM – 6:45 PM NACSPAC Lounge 8:30 AM – 10:30 AM Exhibitor Advisory Committee Meeting

11:30 AM – 5:30 PM Exposition

7:30 AM – 1:30 PM Cool New Products Preview Room 7:30 AM – 1:30 PM International Lounge 8:00 AM – 9:00 AM General Session 8:00 AM – 1:30 PM NACS Booth 8:00 AM – 1:30 PM NACSPAC Lounge 9:00 AM – 1:30 PM Exposition

NACS TRADE SHOW · CHICAGO, ILLINOIS

TRADESHOW PREVIEW 5-hour Energy (Living Essentials, LLC)

3607

Hansen Beverage Company

3235

POM Wonderful, LLC

762

Abbott Nutrition

2606

Hat Trick

5544

Pop Shoppe Beverages of America

2847

Activate Drinks

3645

Healthguard Wellness LLC

1633

Pri-Pak, Inc.

3243

Ama Waters LLC

6208

HELIX Drinks

339

PurClean/PurWater

7653

Arizona Beverages USA, LLC.

2932

HINT Water

3126

Quaker, Tropicana, Gatorade (QTG)

3920

ATC Group

4662

Hydrive Energy LLC

3842

Red Bull North America

4819

Avitae Caffeinated Water

3732

Icelandic USA

5853

Roaring Lion Energy Drink

2907

Bai Brands, LLC

3044

iChill Beverages, LLC

5716

RockHumanity, Inc.

5545

BAWLS Acquisition

1534

In Zone Brands, Inc.

431

Royal Buying Group, Inc.

3620

Berner Food & Beverage

3338

Interex Corp.

5443

S & D Coffee, Inc.

4450

Bio-Engineered Sup. & Nutrition (BSN)

3041

Intermark Brands

3832

San Remo Trade LLC

4995

BODYARMOR Nutrition

3634

ITO EN

5743

Savia USA

2454

Boston Beer Company

3420

Jarritos/Novamex

2836

Security Beverages Company, Inc.

6313

Brands Within Reach, LLC

2926

JJWV Marketing Corp. (02 Berry)

4939

SG Beverage Solutions Inc.

3862

Bug Juice International, Inc.

3014

Jones Soda Company

3439

Shamrock Farms

2937

BYB Brands, Inc.

2434

Kickbutt Amped Energy Ballz

3008

Sierra Nevada Brewing Co.

3345

Calypso Brands

4843

Lakeview Farms, Inc.

5386

Smart Juices LLC

1235

Campbell Soup Company

3607

Last Round Hangover Support

5210

Southeastern Marketing & Dist.

1454

Cascade Ice Sparkling Water

3105

Leramo Coffee/Hudson Tea

5157

SPEED Energy

3005

Cellutions LLC

6210

Lifeway Foods, Inc.

3026

Standard Coffee Service

4892

Chill Drinks, LLC

3038

Massimo Zanetti Beverage USA

5689

Starco Impex, Inc.

6219

Chobani / Agro Farma

5793

Materne North America

434

Street King

931

Cintron Beverage Group

5543

MET-Rx

2225

Sunny Delight Beverages Company

5845

Cold Star Inc.

4480

Monarch Custom Beverages

1752

Sunny Sky Products

5157

Core-Mark International, Inc.

4425

Monster Beverage Company

3423

Supreme Protein, Inc.

4941

Cott Beverages, Inc.

5345

Morinaga America, Inc.

6218

TeaZzers

6252

Creative Marketing Concepts Inc.

5343

Mountain View Marketing, Inc.

3407

The Coca-Cola Company

1706

Cutting Edge Beverages/X-Ade

3105

National Beverage Corp

5440

The Dad’s Root Beer Co., LLC

3435

CytoSport

3200

National Fruit Flavor

5179

TNT Marketing, a Division of Crossmark

4813

Dr Pepper Snapple Group

3842

NBI Juiceworks

2552

True 2 Beauty, Inc.

954

Dream Water

3343

Nestle Waters North America, Inc.

4035

Turkey Hill Dairy

1329

DS Waters

1745

New Leaf Brands

6016

Twang Partners, Ltd.

3045

Eagle Beverage & Accessory Products

5785

Niagara Bottling, LLC

3203

Unilever Companies

4832

Eastland Food Corp.

5742

Nitro2Go Inc.

5143

United Brands Company, Inc.

1237

Eat It Corporation

3537

North Shore Bottling

3437

Upstate Farms

2640

Eby-Brown

1932

NutraFuels, LLC

351

V-Blast

737

Encaff Products, Inc.

2903

NVE Pharmaceuticals

2943

Vita Coco

6008

Eternal Beverages, Inc.

5702

O.N.E., One Natural Experience

5816

ViVa Beverages LLC

6002

FIJI Water Company

3842

Ocean Spray Cranberries, Inc.

4832

VOSS Artesian Water from Norway

2945

Frigoglass

5479

OhYeah!

3206

VPX Sports/Redline

5801

Frostie Root Beer Co. LLC

5216

Old Fashioned Foods, Inc.

6005

WhiteWave Foods/Dean Foods

3750

FRS Healthy Performance

2643

On Go Energy

2915

WIT Beverage Company

2634

Frubob USA, Inc.

2749

PBev, LLC

2915

WP Beverages

3241

Gehl Foods, Inc.

6379

Peace Tea-Worx Energy

3232

Xing Beverage, LLC

5813

Goya Foods Inc.

5219

PepsiCo, Inc.

3920

Xyience

5003

Green Planet, Inc.

661

Phusion Projects LLC

2725

ZICO Pure Premium Coconut Water

3632

GT Beverage Company, LLC

2906

Pit Bull Energy Products

947

Zun Energy Drink

3010

76 BEVERAGESPECTRUM.SEPTEMBER.2011

TRADESHOW PREVIEW

PACK EXPO · LAS VEGAS, NEVADA

LAS VEGAS CONVENTION CENTER: September 26 – 28, 2011 SHOW FLOOR HOURS: Monday, Tuesday & Wednesday: 9:00 a.m. – 4:00 p.m.

Pack Expo will take place in Las Vegas at the Las Vegas Convention Center from September 26-28. Billed as North America’s largest processing and packing expo, the annual event is put together by the Packaging Machinery Manufacturers Institute (PMMI). More than 1,600 suppliers and 25,000 overall attendees are expected. This year’s show will feature cuttingedge beverage packaging solutions, many of which will address the beverage industry’s need for “greener” packaging. Also on display will be hundreds of full-scale processing machines used to build, bottle and package beverages. BevNET will be walking the show floor checking out beverage-related technologies. Make sure to visit BevNET.com for our post-show coverage and photo gallery.

78 BEVERAGESPECTRUM.SEPTEMBER.2011

BEVNET SHOW COVERAGE SPONSORED BY:

For more information visit: www.packexpo.com

DECEMBER 5 & 6, 2011 Loews Santa Monica Beach Hotel Santa Monica, CA

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

veb venturing & emerging brands

â&#x201E;˘

PROMO PARADE

Fall Brings Brown Ale Newcastle Brown Ale has launched a ‘Your Beer. Your Gear.’ campaign as consumers are switching to richer, more full-flavored beers for the cooler weather. The campaign will encourage adult shoppers to enjoy the lightly hopped, less bitter taste of Newcastle Brown Ale while providing added value in-store via relevant cross merchandising offers and online via customizable Newcastle gear. From tshirts and baseball caps to messenger bags and hoodies, consumers can customize a variety of Newcastle Branded merchandise and receive a discount by going online and entering the UPC from their Newcastle bottle. Newcastle will also run outdoor and Spot TV advertising during the September to December program period to support the campaign.

Georgia and Iceland Educate

Icelandic Glacial announced that it has partnered with the Georgia Food Industry Association Education Foundation (GFIEF) to support their End Caps for Education program. As part of this alliance, Icelandic Glacial has donated funds to help the GFIEF reach their goal of $120,000, which will go toward directly providing scholarships to deserving students in the state of Georgia. Additionally, Icelandic Glacial will be offering water to the End Cap for Education displays which aim to bring awareness to the Foundation’s fundraising efforts.

80 BEVERAGESPECTRUM.SEPTEMBER.2011

PROMOTIONS, EVENTS, AND SPECIALS FOR THE INDUSTRY

Jack and Zac Team Up

Jack Daniel’s Whiskey has teamed up with the Grammy Award-winning Zac Brown Band for a tour that will give fans exciting concerts and a message of responsible drinking. Officially kicking off at ZBB’s upcoming sold-out, two-night stand on Sept. 5 and 6 at Red Rocks in Morrison, Colo., the partnership will include U.S. and Canada advertising and promotional activities, a dedicated responsibility campaign, and co-presenting tour support. The promotional partnership will also include a commemorative bottle program in support of Camp Southern Ground, Brown’s camp for children with special needs.

Bruce Willis Partners with Sobieski Sobieski Vodka has announced a partnership with Bruce Willis to support the Fisher House Foundation, which supports the US military and their families. Willis, who is a 3.3 percent owner of Sobieski, can be seen in a new series of humorous, tonguein-cheek “Truth in Vodka” webisodes at www.truthinvodka. com. Sobieski has promised a minimum donation of $250,000 to the Fisher House Foundation. Commencing on Sept. 1, a portion of the proceeds for every bottle of Sobieski Vodka purchased in the United States over the next 12 months will be donated to Fisher House.

NOT

A COMPETITOR TO ENERGY SHOTS

SAFE AND EFFECTIVE HANGOVER PREVENTION Find NOHO at these participating locations:

/NOHOdrink

@NOHOdrink

LEADING THE WAY IN THE BEVERAGE INDUSTRY’S NEWEST CATEGORY FOR MORE INFO CONTACT US AT 310-289-1313 OR SSTEPHENSON@NOHODRINK.COM,

PROMOTIONS, EVENTS, AND SPECIALS FOR THE INDUSTRY

PROMO PARADE Nick Cannon Discovers FRS Healthy Energy

FRS Energy is launching new recyclable bottles in New York City with the help of Nick Cannon, who will be making appearances to promote the beverage and its marketing campaign, which will include radio and signage throughout the city. The FRS formula features the powerful all-natural antioxidant Quercetin, found naturally in fruits and vegetables, with green tea catechins and seven essential vitamins that serve as a natural energy-booster. Consumers that come across the FRS marketingi materials on billboards, kiosks and in stores can use their smartphones to scan the QR codes and obtain a 10-dar free Performance Pack trial kit and directions to a nearby grocer that carries FRS.

Beam Global Brings Spirit of Giving

Beam Global Spirits & Wine has donated $100,000 to Operation Homefront, which provides emergency financial aid and critical assistance to US troops and their families, and wounded veterans. Beam has donated $1 million in cash and in-kind contributions to Operation Homefront since forming a partnership in 2008.

Shasta Fiesta!

Shasta Beverages, Inc. has announced its Big Backyard Fiesta Sweepstakes for Summer 2011. It will give one lucky winner a complete outdoor entertainment system and a year’s supply of Shasta beverages. The contest runs through Sept. 30, and one Grand Prize winner will receive a complete party pack with everything needed to turn their backyard into the ultimate party destination. To win a year’s supply of Shasta and the Grand Prize Package, visit Shasta Soda on Facebook or go to shastapop.com, click on the link to the Shasta Facebook page, and enter to win!

SMIRNOFF and Madonna Partner for Dance SMIRNOFF, the world’s No. 1 vodka, is teaming up with Madonna to find the “best dancer in the world” to join her on her next tour as part of the SMIRNOFF Nightlife Exchange Project, which aims to discover the world’s most unique and interesting nightlife. The partnership will culminate in a dance competition where competitors will submit a 60 second dance video between Aug.18 and Oct.10, 2011. Semifinalists will be flown to one of the selected Nightlife Exchange experiences, where they will audition in front of Madonna and SMIRNOFF fans. The last dancer standing will join Madonna on her next tour as one of her dancers.

82 BEVERAGESPECTRUM.SEPTEMBER.2011

50 Cent

50 is a bo u t t o b rin g a more

positive energy to your business For every energy shot purchased, a person is Fed 6 hours oF energy 100% natural Flavors superior taste 2.5 ounces launching september 2011

THE FOUR LEADING NAMES IN ENERGY DRINKS.

If you want to sell more Red Bull, try selling more Red Bull. In other words, stock all four of our sizes. According to Nielsen Scantrack, size variants are twice as effective as flavor variants in the Energy category.* With Red Bull, you’re offering the number one single-serve beverage in Convenience ranked by dollar sales,† as well as the brand that helped drive 12% growth in the energy category in 2010.‡ And to add to the growth potential for 2011, all sizes are also available in Sugarfree.

RED BULL GIVES YOU WIIINGS. †AC

*Nielsen Scantrack FDMCxWM 52 weeks ending 07/10/10. Nielsen US Conv Scantrack, 4 weeks ending 01/22/11. ‡ Nielsen Grocery and Convenience FY 2010, CSDx >1L.