100707_FD_Issue 187

functionaldrinks zenithinternational newsletter This issue at a glance...

Page two Temperatures rise in Singapore

Page four Noni fruit benefits the UK

Pages five to seven Innovation review, Vitafoods

Page three Coconut water in Germany

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Issue 187

energy drinks

7 July 2010

United Kingdom

Food for new entrepreneurial thought

would do with the company during their first few months.

Think Drink, whose beverages of the same name hit the UK capital by storm upon their unveiling last summer, is looking to pass over its reins to someone with the entrepreneurial spirit and drive to continue its healthy, low-calorie energy drink along the already strong track laid out by its current direction.

Think Drink is an incorporated company ready to go: the market is proven, the supply chain in place, the leads identified, all it needs is the right person to run it, according to the company founder, who no longer has the time to devote to the business alongside other commitments.

With all the necessary elements already in place: trademark, brand and recipes for three flavours; sales leads, sales pitch materials and marketing ideas; market testing, including taste tests, video street surveys and one week trials; supply chain in place from ingredients to bottler to warehousing and delivery; and an incorporated company with cash float in the bank, up to date accounts and all relevant paperwork, the opportunity is positioned as being ideal for someone wanting to set up on their own and not knowing where to start.

Available in three flavour variants (Apple & Elderflower, Cranberry & Raspberry and Orange & Grapefruit), each 500ml bottle of Think Drink contains 375mg of matĂŠ to provide jitter-free energy, 175mg of guarana to enhance alertness and alleviate fatigue, and an equal amount of Siberian ginseng.The drinks are also fortified with vitamins B1, B3, B5, B6, B12 and C. www.think-drink.com

As such, the floor is being opened up to any entrepreneur who can raise appropriate finance, determine the company strategy and then execute it accordingly.With a ÂŁ2,000 cash prize and a sizeable equity stake in the business available to the right individual, interested parties are being invited to apply by stating what they

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functionaldrinks zenithinternational newsletter Page 2 Issue 187 7 July 2010

editorial comment Welcome to the 187th issue of functionaldrinks.

In a vitamin-enhanced issue, we look at Bad Brambacher GmbH's launch of a vitamin- and mineralrich thirst quencher for children in Germany (see Page 5), the performance of GlacĂŠau's vitaminwater brand in France (see Page 4), in addition to featuring a round-up of the emerging themes from the Vitafoods event in Geneva back in May (see Pages 5 to 7).

Frontier Beverage Company's low-calorie relaxation drink offering, Unwind (see Page 3) and UK-based Think Drinks' call to entrepreneurs interested in taking over the business (see Page 1).

Also in this issue, Formula One Licensing BV has sued Singaporean distributor Speed Drinks Pte for what it claims is an unauthorised attempt to pass the F1 Racing Energy Drink off as a licensed offering (see below), as well as the arrival of the mineral-rich coconut water Vita Coco in the German market (see Page 3).

In other enhanced beverage news, we review Tahitian Noni's launch of its new noni fruit-based bioactive beverage range in the UK (see Page 4),

Jenny Foulds Editor jfoulds@zenithinternational.com

energy drinks

Singapore

Distributor pulled up for logo usage Dutch-based Formula One Licensing BV has sued Singaporean Speed Drinks Pte for selling F1 Racing Energy Drink in the country, host of the first night race of the motor sport.

The licensing firm was seeking damages and for the drinks to be destroyed due to an accusation that Speed Drinks was endeavouring to pass the beverage, the packaging for which features an encircled and chequered 'F1' logo and the slogan 'Start Your Engine', as a Formula One licensed product.

Speed Drinks, which imports the drink from Holland and distributes it in Asia, denies any wrongdoing and has retaliated with comments surrounding Formula One's attempts to claim the generic term F1. In his affidavit, Ashok Murthy also spoke of the logo being legitimately

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registered in Holland, as well as other markets, and of how it differs from the Formula One trademark.

Bernie Ecclestone-controlled Formula One has said that the Singaporean company's actions, involving "irreparable damage to the reputation and goodwill of the brand," will hinder its potential to use the license in the future.

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functionaldrinks zenithinternational newsletter Page 3 Issue 187 7 July 2010

wellness beverages

Germany

Further expansion for coconut water craze

magnesium of regular sports drinks, which is also the equivalent mineral content of two bananas.

With a strong precedent for coconut water set by domestically-based Kulau, and interest in the product already established, the opportunity for further development in Germany's coconut water category looks hopeful.

Following on from the success generated in the US, leading coconut water brand Vita Coco is now available in Germany through Hamburg-based beverage specialist Drinks & more.

Meanwhile in the UK, following the Wimbledon tennis match where John Isner and Nicolas Mahut were on court for a record 11 hours,Vita Coco was looking to establish a connection and is reported to now have a sponsorship deal with Isner.

Packaged in deposit-free 330ml Tetra-Paks and available in original, peach-mango and pineapple flavour variants, the naturally isotonic-rich drink is said to contain twenty times the amount of calcium and

Vita Coco will be available in Germany for a retail price of between â‚Ź1.69 and â‚Ź1.89. www.vitacoco.com

nutraceuticals

United States

New low-cal frontier in relaxation drinks Frontier Beverage Company based in Memphis,Tennessee, has recently made its foray into the relaxation drinks segment with a low-calorie and low-sugar alternative to those currently available in the market.

Aptly named Unwind, the relaxation drink features melatonin, valerian root, rose hips, passion flower and vitamins B and C to provide a soothing experience for both the body and mind. Moreover, the lightly carbonated drink contains a mere 40 calories and 10g of sugar per can so consumers can have a guilt-free experience.

Unwind is targeted at adults in general who either wish to relax after a stressful day at work, to promote sleep after a late-night workout or to undo the effects of consuming energy drinks to stay awake.

According to company insiders, sales have 'skyrocketed' thanks to intense media coverage of relaxation drinks in high-profile TV shows such as Good Morning America and The View. On the back of this, the company has been busy building awareness for the brand by using social networking sites such as Facebook and Twitter to conduct product giveaways. Likewise, Frontier Beverage is usually present at local grassroots events and industry trade shows.

Unwind has been available in Memphis since Spring 2010 in a Citrus Orange flavour packaged in 16oz cans and, by the end of Summer 2010, will be made available nationwide. In addition, Pom Berry and Goji Grape variants will be introduced across the US from autumn 2010. For the national rollout, all variants will be available in 12oz cans only.

Each 12oz can retails for around US$1.99 to US$2.49. www.frontierbeverage.com

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functionaldrinks zenithinternational newsletter Page 4 Issue 187 7 July 2010

wellness/enriched beverages

New bioactive beverage range harnesses noni fruit benefits Tahitian Noni International (TNI), a global research-driven bioactive products company which works on the principles of health, wealth and happiness, has unveiled its latest beverages in the UK. The new product range, with the trademarked name Tahitian Noni Bioactive Beverages, joins the company's flagship offering,Tahitian

United Kingdom Noni Original, and is four flavour variants strong: Family Grape; Family Mango-Passionfruit; Extra and Pure.

Designed to suit everyone's needs, the new bioactive beverage line provides 'iridoids' at different levels.The introduction of new blended flavour propositions is hoped to reach out to customers of all ages who seek to maintain an active and balanced lifestyle.

The main quality markers in the drinks are their iridoids, a class of phytochemicals that is different from fruit-derived flavonoids. Unlike flavonoids, iridoids are very stable and resistant to degradation during processing and storage, with the potency of their functionality therefore maintained.

The iridoid content is the main consideration for pricing, the Tahitian Noni Family variants, designed for children and young adults with their smooth combination of fruits, being the lower end of the product's price scale at £14 per 750ml aluminium bottle. Continuing up the scale, the Extra and Pure versions, the former of which is targeted towards those with high acidity levels and contains olive leaf extract, and the latter of which contains noni fruit purée and noni leaf infusion, offering the purest noni experience, are priced at £30 per 750ml bottle and £16 per 500ml bottle respectively. www.tni.com/uk

enriched beverages

France

Vitamin expansion Having been launched in Paris in summer 2009, Glacéau's fast internationalising vitaminwater brand has already generated sales at the million bottle mark, according to Vincent Bouin, who is responsible for the brand's commercialisation in France.

Given the brand's acceptance in the key French city, vitaminwater will now be rolled out further across the country.With its strategy of creating a "buzz", the brand has so far been supported by a beach popup bar at the Cannes film festival as well as through the purchase of an apartment in Paris for the dedicated purpose of hosting VIP soirées.

Available through a thousand different outlets across the capital, primarily shops situated close to cinemas, six different vitaminwater variants are available in Paris.What is more, "one Parisian in three knows about vitaminwater," as Bouin revealed. www.vitaminwater.fr

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functionaldrinks zenithinternational newsletter Page 5 Issue 187 7 July 2010

enriched beverages

Germany

Vital nutrition for children German mineral water company Bad Brambacher GmbH has expanded its Vita range of vitaminand mineral-enriched drinks to include a healthy thirst quencher for young children.

Called Vita-Mineral Kids, the drink has a 5% fruit content and has been specifically formulated with glucose, magnesium and six essential vitamins to meet the nutritional requirements of its young target consumer group.

Providing just 16.8kcal per 100ml, the low-calorie beverages are packaged in 500ml which are available in 20 bottle packs. Prof Dr Karl-Ludwig Resch, specialist in physical and rehabilitive medicine at the Bad Elster Institute, who endorses Bad Brambacher's vitamin- and mineralfortified line of drinks, views the latest development as a "great decision."

Also included in the mineral water specialist's Vita product portfolio are:Vita-Mineral Sport, an isotonic offering with valuable electrolytes and a refreshing grapefruit-lemon taste; Vita-Mineral Aktiv, which delivers an energy boost and is apple-cranberry flavoured; and Vita-Mineral Balance, available in harmonic peach and pear flavours and infused with mallow and aloe vera extracts respectively. www.brambacher.de

ingredients

World

Vitafoods Special Although now a little while after the event, this year's Vitafoods show, again hosted in Geneva and supported by specialty chemicals company Cognis - amongst other sponsors, attracted over 500 exhibitors and 6,000 visitors from various corners of the world, and from across the nutraceutical, cosmeceutical, functional food and functional drinks industries.

A hive of new functional ingredient technology, numerous themes emerged from the exhibition, all seeking innovative new ways to meet the health and nutrition requirements of the increasingly healthconscious consumer.

Through its Cognis Nutrition & Health business, the exhibition's sponsor went to great lengths to

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attract visitors to its stand. First unveiling its Newtrition - Eat. Feel. Live. concept at the Vitafoods event in May 2009, the company has developed new marketing material for its consumer-driven portfolio covering four dimensions of wellbeing: emotional perception; taste sensation; effect and convenience.

Cognis' Newtrition concept is now being rolled out on a worldwide scale, with its main aim being to provide its clients with real wellbeing concepts that help set their end products apart from competitors and appeal to consumers on a number of levels. Be it in the form of convenient and effective dietary supplements or tasty food and beverage solutions, the speciality chemicals giant can help create products that target energy, beauty, inner peace, maternal health, cholesterol, weight and skin health.

In terms of product prototypes, Cognis' offerings included lutein-rich boiled sweets featuring the firm's Xangold ingredient to improve the skin's resistance to the sun's harmful rays, as well as a cholesterollowering ampoule containing Vegapure-branded plant sterols.

Meanwhile at the event's sampling corner were a

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functionaldrinks zenithinternational newsletter Page 6 Issue 187 7 July 2010

ingredients

World

host of innovative food and beverage products, either finished products or ingredient manufacturer prototypes. Amongst these were a unique 90ml olive-based energy shot, SPRINT, packaged in a screw top aluminium bottle by Livio Pesle in Italy, Sk책nemejerier's probiotic juice brand Bravo Friscus from Sweden, sport and fitness bars from Well Plus Trade GmbH in Germany and French company Laboratoire PYC's high protein functional dairy drink for weight control.

With respect to the varying themes emerging from the event, functionaldrinks quickly became aware of the abundance of omega-3 suppliers and products containing the essential fatty acids, the usage of probiotics in an increasing array of applications, a surprising number of colostrum technology companies, a greater focus on cognitive health, and a broadening focus on target consumer groups to include more elderly as well as younger consumers. It also became apparent that women's specific health concerns, such as fluid retention, urinary tract infections and Candida, appear to be of growing interest amongst functional beverage manufacturers.

Competing in an increasingly competitive marketplace where finding a point of differentiation is an ever-growing challenge, innovative packaging solutions - a few examples of which are mentioned here - or new, interesting applications for functional ingredients are playing a greater role.

Packaging Innovations in the world of packaging for functional supplements, food and beverages have clearly advanced, with numerous category operators present at the event to showcase their latest solutions.

French firm Eskiss Packaging promoted its 10ml ampoule, Unicadose, designed for food supplements as well as cosmeceutical and pharmaceutical products in liquid form.

Available in various colours, the compact packaging format has a completely sealable top which is popped open by

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applying pressure prior to consumption.

With the ability to fill 15,000 vials per hour and to give the option of hot-filling and sterilisation, the company is already exporting its product to various markets in addition to enjoying early success in its home market of France.Whilst the ampoules are primarily used for supplements at present, there could well be a market for the product within the beverage industry, particularly given the surge in the shots market and consumers' ever-increasing demand for convenience.

A likewise interesting development in terms of packaging, Italian firm Erba Vita had an innovative take on the idea of storing sensitive ingredients within a sealed compartment within the screw top of a bottle, supplying weekly supplies of the caps themselves for use on all standard bottleneck widths and for various target benefits.

Also present at the event was Dutch firm Pont Europe showcasing its slimline Pont Pack, designed to fit through letterboxes and facilitate the delivery of food supplements ordered online.Whilst not relevant to the functional beverage industry at present, the Pont Pack will have considerable mileage within the supplements industry.

Again of interest in terms of packaging is an upcoming cognitive health beverage to be presented in shot style format, according to Belgian firm Amino Labs, producer of many energy shots which also has the ability to produce mind-, libido-, happiness- and beautyenhancing shot style offerings.

Confectionery In line with functional food and beverage producers' endeavours to bring functional ingredients to consumers in increasingly innovative ways, the functional confectionery market appears to be going from strength to strength.

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functionaldrinks zenithinternational newsletter Page 7 Issue 187 7 July 2010

ingredients

World

Amongst products featured at Vitafoods were omega-3 enhanced jellies by Smartfish AS in Norway.With its latest offering oriented towards children, the biotechnology company specialises in omega-3 based emulsions to target the brain health, heart health, immune system and recovery of the entire family. Along similar essential fatty acids lines, Yichao's Science Care DHA Gummy Bears from China, supported by calcium, vitamin C and multi-vitamin rich counterparts, are aimed at the same consumer group.

The Chinese firm also produces various 'strip' style products under its Science Care line, including sport, energy and vitamin B12 options, amongst numerous others.

UK-based OptiBac presented its portfolio of

probiotic chews comprising numerous variants designed to cater for different requirements, such as achieving daily wellbeing, daily immunity, a flat stomach, antiobiotic support, bowel calming, for travelling and for children's health.

Other interesting options in the field of functional confectionery were chocolateflavoured chews, enriched fruit puree stick packs, as well as an increasing abundance of sports, nutrition and similarlyoriented bars.

www.vitafoods.eu

functionaldrinks in brief

Europe

UNESDA (Union of European Beverages Associations) is currently drafting a code of practice pertaining to the labelling and marketing of energy shots, having adopted its code of practice for high caffeine drinks in May. The provisional code brings familiar issues to light: whether the age of a child should be specified and also whether there should be a fixed maximum level for caffeine. In the UK, these products, which are legally classified as food supplements, are automatically required to meet the specifications of the Food Supplements Regulations 2003. Discussions are continuing within UNESDA. France: According to Scantrack data, soft drink sales through French hyper- and supermarkets for the year ended 28 February 2010 saw sports and energy drinks demonstrate the highest percentage growth in both volume and value terms, increasing 36% and 42% respectively during the twelve month period, both well above the overall category's 8% and 9% growth rates. In terms of their share of the market, sports and energy drinks accounted for 1.2% of volume during the year compared with a 5.3% share in value.

A beverage available in France under the name Liv MatĂŠ is positioned across three categories: flavoured waters; energy drinks and iced teas.

Composed of fruit juice, yerba matĂŠ and

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sweetened with stevia, the Swedish-born drink has been available in the country since September 2009 through urban outlets such as Monop' and Carrefour City, and is expected to penetrate the supermarket sector in the future.

Packaged in 500ml bottles, the drink is available for around â‚Ź1.60.

Supermarket chain Casino has added two ownlabel energy drinks to its portfolio. Featuring taurine, ginseng and ginger, the Ginger Energy drinks are available in two distinct variants - a fruit juice based version packaged in a pink and red can to appeal to females, and a can emblazoned with yellow flames to attract male consumers.

Spain: PepsiCo Beverages Spain is planning to launch a so-called 'non-artificial' version of its sports drink Gatorade that is free from artificial colours and preservatives. To be released with a more natural colour but with the same functionality, the launch is being supported by the unveiling of a new website at www.gatorade.es.

North America

Canada: Danone Research, a unit of involving more than 1,200 employees worldwide, has entered into an agreement with Canadian biological science firm Micropharma Limited

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functionaldrinks zenithinternational newsletter Page 8 Issue 187 7 July 2010

functionaldrinks in brief for the development of new technologies for cholesterol reduction in dairy products.

Innovative Beverage has entered the Canadian market with its Drank relaxation drink. Facilitated through collaboration with brand and management company PX Entreprises, the 'extreme relaxation beverage' featuring melatonin, valerian root and rose hips is now available in 7-Eleven stores across Canada.

US: According to the American Cancer Society, drinking two and a half cups of coffee per day may reduce women's risk of developing uterine cancer. In percentage terms, no figure was given, nor is it known exactly what it is in coffee that can offer such potential benefits. There is a feeling that it could be linked to the compound's insulin or estrogen content, however further tests are needed to produce any conclusive results or information.

gastrointestinal illness, it reportedly has little influence on their daily life, as the investigation involving 638 healthy children aged three to six revealed.

Blue Gem Enterprise has reached an agreement with Albertsons Stores to distribute two of the company's energy drink brands - Title and Xingtea - across the Florida region. Title is available in lemon, berry and orange flavour variants, while Xingtea can be purchased in cherry, pomegranate, ginseng, mango and diet mango versions.

Neuro Drinks has partnered with PepsiCo to distribute its active lifestyle beverage range in the New York City area. Five variants strong, blends included in the portfolio are as follows: NeuroGasm; NeuroSonic; NeuroBliss; NeuroTrim and NeuroSleep.

Robeks Juice of Darien has unveiled three new juice smoothies, namely Capuaca Energizer, Capuaca Carnival and Caja Energizer. Based on the Brazilian superfruit capuaca, the drinks' principle ingredient is said to be rich in amino acids, omega-3 essential fatty acids and vitamins A, B and C.

Based on IRI data, the energy drink to have shown the highest growth (49.2%) in US food, drug, convenience and mass retail stores to the year ended 21 March 2010 was Starbucks' Doubleshot proposition. With sales of US$137 million, the coffee-based drinks are available in Energy + Coffee and Energy + Coffee Light variants. Meanwhile in the energy shot category, Red Bull is said to have seen a staggering increase in its performance to register sales of US$29 million for the year.

World

Israeli ingredient supplier LycoRed has made its first foray outside its core carotenoid business with a vegetarian omega-3 launch that is the result of several years' research. Using its microencapsulation technology to deliver low-dose premixes as well as standalone ingredients for use in bakery and confectionery products targeted at both children and the elderly.

A randomised, double-blind, placebocontrolled study into the benefits of The Dannon Company's DanActive yogurt drink have delivered mixed results, according to the European Journal of Clinical Nutrition. Whilst the product showed potential to protect children against

functionaldrinks zenithinternational newsletter

Editor: Jenny Foulds Deputy Editor: Cecilia Martínez Núñez Contributors: Charmaine Holmes Market Intelligence Director: Esther Renfrew functionaldrinks is issued 25 times a year and is only available by subscription: electronic PDF format only £495; hard copy and PDF £595* *VAT chargeable on electronic format to UK companies and EC companies not registered for VAT

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7 Kingsmead Square Bath BA1 2AB United Kingdom t +44 (0)1225 327900 f +44 (0)1225 327901 e functionaldrinks@zenithinternational.com www.functionaldrinksnews.com No part of this periodical may be reproduced in any form, copied or stored electronically without prior permission in writing from the publisher. Every effort is made to verify all information published, but Zenith International cannot accept responsibility for any errors or omissions or for any losses that may arise as a result.

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