beverage spectrum nov-dec 2006

THE ENVIGA EFFECT

N O V E M B E R – D E C E M B E R 2 0 0 6

ALSO THIS ISSUE:

NEW AGE BEVERAGES

NACS & EXPO EAST REPORT

FANCY FOODS WEST PREVIEW

Coke unleashes a wave of functionality.

B2338 Campbells Ad 11/28/06 12:08 PM Page 1

NOVEMBER – DECEMBER 200� \\ BEVERAGE SPECTRUM 3

Columns

Features 32 // STILL NEW AGE

An oxymoron, but a profi table one

34 // NACS ROUNDUP

What happens in Vegas...is pictured

in this magazine.

36 // EXPO EAST ROUNDUP

What happens in Baltimore...is also

pictured here.

38 // FANCY FOODS

WEST PREVIEW

Where to go if you left your

(all-natural, hormone free) heart in

San Francisco

4 // THE FIRST DROP

Still Hoping for Super Fuel

6 // PUBLISHER’S TOAST

Call for Service

24 // BevNET.com’s VIEW

Ten Years After

42 // GERRY’S INSIGHTS

An Exciting Year

Departments 8 // BEVSCAPE

LeNature’s Scandal // Holiday Gifts //

Coke and Eepybird nest together

14 // CHANNEL CHECK

End the year with Beer

18 // NEW PRODUCTS

The Cachaça Cha-Cha

40 // PROMOTION PARADE

Best. Job. Ever. From Chivas.

Cover Story 26 // TRENDS 2007:

THE ENVIGA EFFECT

How many functions will fi t in

your cooler?

NOVEMBER – DECEMBER 2006 vol. 4 // no. 9

14 26 34

B2338 Campbells Ad 11/28/06 12:08 PM Page 1

BEVERAGE SPECTRUM // NOVEMBER – DECEMBER 200�4

THE FIRST DROP

Still Hoping forSuper fuel

o, I’m discussing this new Enviga stuff

with a strapping store owner-type-of-guy

at NACS, talking up its potential to make you

burn a few extra calories and the fact that it

doesn’t taste half-bad, and he looks at me and

says, “Yeah, but here’s the problem: I need fi ve

of ‘em.”

He had a point. He was a big dude. A can or

two of Enviga wasn’t going to do the trick for

him. It won’t do the trick for most of us (except

get us wired on about 300 mg of caffeine), in

fact. But we want it to, desperately. No matter

how strong any functional product claims to

be, it’s belief that is the strongest function of all

– the belief that holding a product will make us

happier, thinner, more sophisticated, more intel-

ligent, less nervous.

Which speaks well for Enviga and its ilk.

Because even if Enviga works the way it’s sup-

posed to, in the long run, what does the fact that

you’ve burned about 60 calories really mean? I

recently purchased a bag of chocolate-covered

cherries at Peet’s Coffee. Two of them are a little

more than 60 calories. As of this sentence, I’ve

eaten nine of them. (Rest assured, they were all

delicious.) That’s a lof of Envigas. But it’s what

their functionality represents to the drinker that

will make the sale.

That doesn’t mean that Enviga itself is going

to be the fi rst breakout mainstream functional

product that has an effect beyond waking you

up or making you less thirsty. But we think that

Coke’s seeming willingness to cannonball into

the pool of functional beverages indicates a ma-

jor shift in the way beverage marketers under-

stand consumer desire.

Consumers will give wide latitude to bever-

age marketers in terms of the claims they make

about products. Right now, even the most un-

likely claims (You know what they are…) are

supportable fi nancially not just because they

might taste good, but because they soothe our

aspirations.

(Well, most of our aspirations, anyway. To

me, most of the really good effects are going to

be tough to pull off. For example, aside from

the increased alertness that comes from full-on

caffeination, no one has actually come up with

a smart drink. And I’ve always wanted products

that would give me superpowers -- my wish for

“telepathy tea” has been unheeded by even the

quirkiest natural foods providers, who seem

more interested in turning hemp seeds into milk

– or, at least, could make me taller.)

But we believe that, down the road, as prod-

ucts are sorted not just by fl avor, but also by po-

tential physiological effect, the ones that actually

work will eventually become important success

stories. Look at energy drinks and, to a lesser ex-

tent, sports drinks: at the most basic level, they

work. They wake you up, they hydrate you bet-

ter. They’re also, in that vein, among the biggest

recent success stories in the beverage industry.

So Enviga, and the products that are sure to

follow it, is a glimpse of one possible future for

the beverage industry, and it’s the chief compo-

nent of our cover story on trends that will be

of interest in the year to come. We’ve also got a

glimpse of Fancy Foods West, a show of increas-

ing importance, and some suggestions for stock-

ing a contemporary New Age cooler, along with

the usual columns and other departments.

In addition, we’d love to hear from you in the

coming year. For example, if our Trends story

doesn’t go far enough, we’d be happy to discuss

it over another of our favorite functional bever-

ages, one which we’re convinced make us much

smarter, indeed: the Martini.

ADVERTISING1123 Broadway

Suite 301New York, NY

10010ph. 212-647-0501fax 212-647-0565

EDITORIAL1 Mifflin Place

Suite 300Cambridge, MA

02138ph. 617-715-9670fax 617-715-9671

PUBLISHER

EDITORIAL DIRECTOR

EDITOR

ASSOCIATE PUBLISHER

ART DIRECTOR

PRODUCTION MANAGER

BUSINESS MANAGER

SUBSCRIPTION INQUIRIES

ARTICLE REPRINTS

BEVERAGE SPECTRUM PUBLISHING INC.

CHAIRMAN

PRESIDENT

Beverage Spectrum is published 9 times a year by Beverage Spectrum Publishing, Inc.

Beverage Spectrum Publishing, Inc. is a wholly owned subsidiary of BevNET.com, Inc., 1 Mifflin

Place, Suite 300, Cambridge, MA 02138

PUBLISHER’S TOAST

Barry J. [email protected]

John [email protected]

Jeffrey [email protected]


Matthew [email protected]

Adam [email protected]

Adam [email protected]

617-715-9679

500 copies or moreFosteReprints

Kelly [email protected]

800-382-0808 x142

John F. (Jack) [email protected]


Barry J. Nathanson, Publisher


t’s that time of the year when we step back

and reflect on all that has transpired. Some-

times it’s hard to find the good, with all the tu-

mult and unrest in society. Conflict, polarization

and greed, both corporate and personal, are the

headlines of the news stories we are confronted

with every day. Pundits opine that we’ve lost our

moral compass. Sometimes it’s hard to disagree.

Hopefully this election, with its emphatic mes-

sage for change, will be the flashpoint to get us

back on track and bring us together.

With all that said, I’m still the eternal opti-

mist. I see all that is good and is yet to be ac-

complished. While I can’t speak for society and

the economy in general, I look at our industry as

a reflection of what can be done.

It is in this view that I claim that it is incum-

bent upon the beverage retailers, marketers and

distributors to take leadership roles within their

communities. We are a high-profile industry and

we must act accordingly. It is imperative that we

take the initiative in developing products that

help reduce obesity and the other health issues

that plague our populace.

I implore you to get involved with causes

on both the local and national levels. I am al-

ways heartened when I see beverage companies

sponsor breast cancer and AIDS walks, Opera-

tion Smile, and other important charities. Help

those people who protect the environment. You

could start with more eco-friendly packaging!

There are plenty of alternatives to overfilling

our landfills. Help your employees by making

your facilities healthy and safe. Individually and

as a business, choose an organization and get

Do Some Goodinvolved. Chains that support local charities and

children’s programs are performing good works.

It’s a win-win, though, because the fact that

you’re increasing your visibility and credibility

doesn’t hurt, either.

Smaller businesses can sponsor a Little

League, basketball, or soccer team. Keeping kids

busy and participating in sports accomplishes a

myriad of positive goals.

In 2005, the response to Hurricane Katrina

on the part of the bottled water industry was

tremendous. But what have we done in 2006?

What do we have planned for 2007? Let’s ex-

pand into need-based food programs and other

relief efforts.

Our industry has been exemplary in its sup-

port of our communities and various causes, but

there is still much more we can do. The holiday

period brings out the best in everyone. Make

that feeling last all year long. Doing good is the

right thing to do.

And to all of you, let me wish you a healthy,

happy and prosperous New Year.

� BEVERAGE SPECTRUM // NOVEMBER – DECEMBER 200��

Job Number: FW4526 Project: Beverage Spectrum / Tradewinds Trade Ad Trim: 8" x 10.875"Live: 7.5" x 10.375" Bleed: 8.25" x 11.125" Trim, Live, Bleed lines do not printPrintout is 100% Date: 7/19/06 Round: FINAL Pubs/Insert/ColorSpec: 4 color

Fiji Water- Tradewinds LS:150 Rnd:1.0Job# 11051-4 Teleflora

Publication: Beverage SpectrumTime: 1:40 pm Date: 07/19/06 QC: QC:Operator Production

Every size of FIJI Water is enjoying double-digit growth.* Behind every bottle is

an equally exceptional consumer; not only do they purchase gourmet items when

they shop, but they’re so loyal — they’ll go out of their way to find FIJI Water.**

So adding FIJI to your shelf is a clear solution for profitability.

Natural Artesian Water 1.800.426.3454 www.fijiwater.com*IRI 5/28/06 **Synovate 4/03 ©2006 FIJI Water Company LLC. All rights reserved.

OUR TRADE WINDS ALSO CARRY PROFITS.

Job Number: FW4526 Project: Beverage Spectrum / Tradewinds Trade Ad Trim: 8" x 10.875"Live: 7.5" x 10.375" Bleed: 8.25" x 11.125" Trim, Live, Bleed lines do not printPrintout is 100% Date: 7/19/06 Round: FINAL Pubs/Insert/ColorSpec: 4 color

Fiji Water- Tradewinds LS:150 Rnd:1.0Job# 11051-4 Teleflora

Publication: Beverage SpectrumTime: 1:40 pm Date: 07/19/06 QC: QC:Operator Production

Every size of FIJI Water is enjoying double-digit growth.* Behind every bottle is

an equally exceptional consumer; not only do they purchase gourmet items when

they shop, but they’re so loyal — they’ll go out of their way to find FIJI Water.**

So adding FIJI to your shelf is a clear solution for profitability.

Natural Artesian Water 1.800.426.3454 www.fijiwater.com*IRI 5/28/06 **Synovate 4/03 ©2006 FIJI Water Company LLC. All rights reserved.

OUR TRADE WINDS ALSO CARRY PROFITS.

WHAT’S HAPPENING ACROSS BEVERAGESBEVSCAPE

7-ELEVEN TO FRANCHISEES: NO DEALING COCAINE

Get ready for a new marketing push from stalwart citrus CSD Moun-

tain Dew.

After 13 years, “Do the Dew,” a central theme to ads that featured bik-

ing, skiing, and more extreme sports, is being given its walking papers,

reports Brandweek. The new plan will focus on “fueling the core.”

With energy drinks and other products moving into the extreme space

once held by Mountain Dew – still one of the few CSD’s to show con-

tinued sales growth in what are tough times for top brands all around

– parent company PepsiCo is turning to its ad agencies to come up with

a new answer.

It also looks like the fi zz is leaving the energy soda business. PepsiCo has

decided to move the emphasis on its Mountain Dew offshoot MDX

to market it as a CSD infused with energy, rather

than as an energy soda. The company plans

to run ads with a tag line of “Stay Sharp.”

Which is not, we believe, a reference to

the distinctions the company is draw-

ing with regard to these particular

marketing approaches.

As predicted, Cocaine is already

feeling some pain. The negative press

campaign against the non-narcotic

energy drink – manufactured by Las

Vegas-based Redux Beverages – con-

tinued strongly throughout the fall,

while retailers remained skeptical.

One major blow against the super-

caffeinated (nearly 300 mg) beverage

came from the West Coast, where

negative calls to

convenience giant

7-Eleven Inc.’s cor-

porate offi ces over

the decision by a

single San Jose-

area franchisee to

stock the product

resulted in a com-

pany-wide advisory

against carrying it.

DON’T DEW IT ANY MORE

Here’s something that might end up a boon for your sales – of both

Coke and cleaning products! Remember that great Internet video from

those two nerdy, Devo-looking guys from EepyBird.com, the one where

they drop Mentos into Diet Coke and create a display that mimics the

fountains at the Bellagio hotel in Vegas?

Turns out that after Coke ham-handedly tried to distance itself from

the video’s good, clean fun early on, despite the fact that even the ghost

of Robert Woodruff could have told them they had a minor pop-culture

sensation on their hands, they fi nally managed to do what Coke does best:

co-opt good clean fun for corporate ends.

Check out the latest EepyBird video on YouTube.com, and you’ll see the

same two nerdy dudes exploding an even bigger Mento-and-Diet-Coke

sodascape – only then, they dare viewers to conduct a Coke experiment of

their own via the “Poetry in Motion” video challenge.

Meanwhile, go to the EepyBird home page and you’ll see a link to the

ever-corporate Coca-Cola Co. Web site, as well as a big, fat thank you to

Coke and Mentos.

So if you see a spike in case sales of 2 L Cokes – followed by a spike in

Ajax and mops, you’ll know the reason. Meanwhile, why not conduct an

experiment of your own? See if Enviga really works. Then let us know….

MESSY SALES PROSPECTS

Coors is taking another shot with its oft-befuddled Killian’s Irish

Red. The brand, a kind of Irish-derived mainstream super-premium

along the lines of Michelob, has seen sales drop and excitement ebb

since its heyday in the mid-1990s.

Things have gotten so bad, according to Coors representatives,

that the company plans to “reintroduce” beer drinks to the brand,

which, despite its Irish orientation, is produced largely in the Coors

factory in Golden, Colo.

Killian’s, which still receives a fair amount of advertising support,

has been caught in a slipstream between increasing craft and import

consumption – a place it once occupied before getting crowded out

by a more refi ned market – and declining returns for almost all mass-

produced domestic beer brands.

But one idea, according to an

interview Coors Spokeswoman

Aimee Valdez had with the Den-

ver Post, is to sharpen the brand’s

image as a lighter but still presti-

gious trade-up.

May we suggest calling it a

“Wild Irish Rosè?”

BY GEORGE, LET’S GIVE KILLIAN’S A FACE-LIFT!


THE RICHARDS GROUP JOB #: 06-0112-GMB CLIENT: GambrinusTRIM: 8 X 10.875 LIVE: 7 X 10 BLEED: 8.25 X 11.125LS/COLORS: 133/CMYK PUB: Beverage Spectrum INSERTION: Oct/Nov/Dec 2006FOR QUESTIONS CALL: Kelley Cowles 214.891.5823

*Source: Industry and company-reported volumes. © The Gambrinus Company, San Antonio, TX 78232

THE TROPIC OF CORONA LIGHT.THE #1 IMPORTED LIGHT BEER IN AMERICA.

With estimated total sales of over 10.5 million cases for 2006,we thank you for helping us make Corona Light the #1-selling imported light beer.

1994 .5M 1.0M

20056.2M9.6M

Corona Light (millions of case sales* )

Gambrinus Total United States

060112GMB BeverageSpec.indd 1 9/12/06 9:03:34 AM


BEVSCAPE

The time has come again… for those employees you’ve ignored for

so long, the ones who won’t get a Christmas bonus, or just for those

who you’re pretty sure actually read stuff…or for those bosses for

whom you don’t want to get anything more expensive than a book…

we’ve got the answer.

• Amibitious Brew: The Story of American Beer

By Maureen Ogle

$25.00

This is the story of the growth of the giant companies on the American

beer landscape – as well as the families that grew them, families like the

Busch and Schlitz clans. It’s also the story of how immigrant Germans

began to succeed in America by moving the country’s taste from English-

style brews to the bitter British pilsner. Most of all, though, it’s a story

about beer, and that makes for a delicious read.

• Brewing up a Business

Sam Calagione

$16.95

Subtitled Adventures in Entrepreneurship from the Founder of Dogfi sh Head

Craft Brewery, this is more than just the story of the highly-regarded craft

beer, and the crazy adventures of Calagione, who gets himself into more

than one dangerous situation in the wilds of Delaware and Philadelphia,

it’s also an apocryphal fi eld manual on how good ideas can be turned

into money-making businesses through hard work and creative thinking.

Which is what we’d all like to do.

And for the ones who can’t make it through a whole book…

• CocktailSmarts

$24.95

Edited by Charles Hardwick, a veteran New York City bartender, Cock-

tailSmarts is a board game that features question and answer cards, coasters

with recipes, a cocktail tips guide and a score sheet for competitive cocktail

lovers. Competitors can pick a card and discover: What’s Triple Sec? What

country did gin come from? What’s in a White Lady? What’s the primary

alcohol in a Bronx Cocktail?

CocktailSmarts is created by SmartsCo, a San Francisco-based publisher

that is also the creator of the top-selling WineSmarts, which star chef Ma-

rio Batali called “the greatest game ever!”

HOLIDAY READING

Constellation Brands, Inc. announced that Executive Vice President

and Chief Financial Offi cer Tom Summer plans to retire from his position

in May 15, 2007.

Brad Redenius, general manager of Judge & Dolph distributors in Peo-

ria, IL has been promoted to Vice President, General Sales Manager of

Griggs, Cooper & Company. Both are part of the Wirtz Beverage Group.

The American Beverage Association elected John E. (Jack) Pelo, presi-

dent and chief executive offi cer of Swire Coca-Cola, USA, as Chairman of

its Board of Directors. Other ABA offi cers elected were Dawn Hudson,

President of Pepsi-Cola North America, as Vice Chair, and Larry Young,

President and CEO of Cadbury Schweppes Bottling Group, as Treasurer.

Castle Brands Inc., promoted Robert A. Battipaglia to Vice President

Sales – Eastern Region.

The p.i.n.k. Spirits Company has named veteran distilled spirits execu-

tive Lonnie Charleson as Executive Vice President, Sales.

Pernod Ricard USA appointed David Jackson as Vice President, Dis-

tribution Strategy.

August A. Busch IV was named President

and CEO of the Anheuser-Busch Cos., Inc. ef-

fective Dec. 1, 2006.

Centerra Wine Company announced the

appointment of Oren Lewin to the position

of Senior Vice President of Marketing for pre-

mium wines.

The National Beer Wholesalers Association

(NBWA) announced that Betty Buck, president and owner of Buck Dis-

tributing Co. Inc. in Upper Marlboro, Maryland, will be its 2006-2007

Chairman of the Board. Buck is the fi rst female to hold the prestigious post

of NBWA Chair. Aldo Madrigrano, president of W.O.W. Distributing

Co. Inc. in Sussex, Wisconsin, was named Vice Chair.

EXECUTIVE MOVES

August A. Busch IV

Why, it’s Sambazon’s own Ryan

Black, accepting the Secretary of

State’s Award for Corporate Ex-

cellence. Sambazon received the

annual award for its efforts to

promote sustainable development

in the Brazilian Rainforest, while

improving conditions of the in-

digenous population of the Rain-

forest by marketing the açai berry.

WHO’S THAT HANDSOME FELLOW WITH THE SECRETARY OF STATE?

Freedom AD V3 ol.indd 1 10/9/06 1:33:38 PM


BEVSCAPE

The picture is getting a bit clearer now for the

direction of the high-end Croatian water brand Jana.

Responsibility for importing the fi nely-balanced

– but struggling – artesian water, bottled and sourced at

an eponymous spring along the so-called “Balkan Riviera,”

has been assumed by Jana North America, a new company owned by the

brand’s Croatian parent, Agrokor.

Jana, long a dominant brand in its home country, has spent the past

two years struggling to gain shelf space alongside other elite water brands

like Voss, Evian and Fiji in the New York market, according to Momir

Stojnovic, the vice president at Jana North America. Without New York,

plans for national expansion were also in trouble. But all that has changed

now, according to company executives.

“We’re excited that Agrokor has decided to invest and create the

company,” Stojnovic said. “They’ve been in the water business for 175

FRESH START AT JANA

It didn’t quite have the sturm und drang of Gomorrah, but there were,

nevertheless, plenty of biblical references contained within the sudden

implosion of Pittsburgh-area water company LeNature’s, Inc.

In late November, the company laid off 238 workers and stopped

producing its water, tea, and juice lines, apparently in anticipation of

a fi nal liquidation. A guardian from Kroll Zolfo Cooper LLC, a crisis

management and turnaround fi rm appointed to manage LeNature’s, was

not holding out hope for its survival.

The fast demise of the company, which had recently leased a massive

secondary bottling facility in downtown Phoenix, began with revelations

made during investor lawsuits over owner Greg Podlucky’s unwillingness

to sell the business to larger companies.

It turned out that at least part of that reluctance was due to fears that

purchase offers would invite scrutiny of the company’s fi nancial records.

Those records were shaky, indeed.

LeNature’s self-reported fast growth had made it a juicy takeover

target; unfortunately, that growth was also just plain made up, according

to investigators. What had been reported sales of $275 million in 2005

turned out to be closer to $20 million, while the company had accrued

$728 million in debt, according to fi lings from Kroll Zolfo.

During late October, the company’s Latrobe, PA facility was shuttered

to its executives as part of the dispute. Podlucky and his offi cers, including

several other family members, were locked out. But with the clock ticking

on the arrival of the Kroll Zolfo custodian appointed to handle the

business in their absence, Podlucky started destroying court-protected

evidentiary fi nancial records, according to affi davits fi led in the case.

Employees reported seeing the shredding of dump trucks’ worth of

documents, and Podlucky and his bodyguard running back and forth to

the shredder with even more documents.

LeNature’s Closure Tells Sordid TaleSCANDAL IN LATROBE

years, and they’re making the effort themselves

because they didn’t want to subcontract out.

They wanted to control their own destiny and really

start bringing it into this country.”

Jana North America took over from Creative Enterprises, which

had the importation rights to Jana and also marketed Jana Skinny Water

– a Super Citrimax-enhanced appetite suppressant product – made with

Jana water. Creative, run by Michael Salaman, has left New York City

for Pennsylvania, where it will concentrate on fi nding a domestic

source for its product.

“The focus of our company is Skinny Water,” Salaman said.

“There really were two products, and we were just too de-focused to

do them both.”

But the really damning fi nds came when federal investigators opened up

a secret room in the Latrobe plant, turning up safes fi lled with gemstones

and watches, according to bankruptcy records. The postal service has now

added an investigative team on-site at LeNature’s, searching for evidence of

mail and wire fraud. As authorities

and investors trace the money, they

can’t help but wonder how much

of it ended up in Podlucky’s

massive, still-under-construc-

tion home in exclusive Ligo-

nier Township, one that was

designed to include a hockey

rink, swimming pool and

5-car garage. Podlucky,

a devout Christian, had

also fi led plans to build a

$20 million church near

the plant.

As of Dec. 1,

Podlucky had not

responded to media

calls for comment,

and the state

of Pennsylvania

was preparing to

help retrain laid

off workers.

mail and wire fraud. As authorities

and investors trace the money, they

can’t help but wonder how much

of it ended up in Podlucky’s

massive, still-under-construc-

tion home in exclusive Ligo-

nier Township, one that was

designed to include a hockey

rink, swimming pool and

5-car garage. Podlucky,

a devout Christian, had

also fi led plans to build a

$20 million church near

As of Dec. 1,

Podlucky had not

responded to media

calls for comment,

and the state

of Pennsylvania

was preparing to

help retrain laid


TOPLINE CATEGORY

VOLUME

CSD’s$14,179,827,810+0.8%

BEER$8,827,156,480+1.8%

BOTTLED JUICES$3,492,708,000+0.�%

ENERGY DRINKS$597,277,700+47.8%

BOTTLED WATER $4,451,280,000+14.�%

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

52 Weeks ending 10/8/200�

SPOTLIGHT CATEGORY

52 Weeks ending 10/8/200�leading brands

BEER

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

TEA/COFFEE$1,121,302,000+23.4%

SPORTS DRINKS $1,558,809,000+12.8%

Channel Check november – december 200�

Brand Dollar Sales Change vs. year earlier

BUD LIGHT $1,351,898,496 1.1%

BUDWEISER $760,035,072 -8.4%

MILLER LITE $708,737,664 -1.4%

COORS LIGHT $608,988,672 2.1%

CORONA EXTRA $477,899,168 7.7%

HEINEKEN $295,899,744 9.9%

NATURAL LIGHT $289,362,432 1.9%

BUSCH LIGHT $206,925,680 3.8%

MICHELOB ULTRA LIGHT $203,301,296 -10.8%

MILLER HIGH LIFE $174,282,224 -3.9%

MILLER GENUINE DRAFT $173,174,672 -9.8%

BUSCH $169,518,304 -2.2%

BUDWEISER SELECT $131,110,608 34.4%

CORONA LIGHT $120,544,992 11.0%

KEYSTONE LIGHT $94,039,224 4.2%

NATURAL ICE $85,114,392 4.5%

TECATE $81,972,104 6.0%

MILWAUKEE’S BEST LIGHT

$80,786,640

-6.0%

MICHELOB LIGHT $76,470,368 -11.1%

COORS $63,571,044 -11.8%

MILWAUKEE’S BEST $62,657,232 -10.5%

ICEHOUSE $57,957,968 -4.4%

MODELO ESPECIAL $51,002,492 32.4%

PABST BLUE RIBBON $50,015,940 3.1%

LABATT BLUE $48,819,060 -6.2%

If there’s one product that’s entered the Top 40 with a bullet, it’s

Heineken Premium Light, which has sold nearly $40 million in

these channels since its inception earlier this year – and it’s about

$10 million behind that of stablemate Amstel Light, which is only

showing small cannibalization. On the domestic side, Michelob

Ultra continues to slide, while Bud Select is growing, but at a

slower pace now that it’s better established. The question for your

future: will new light beers or light beers masquerading as spe-

cialty beers eventually win out?

BEVERAGE SPECTRUM // NOVEMBER – DECEMBER 200�1�

CANNED JUICE DRINKS Dollar Sales Change vs. year earlier

Minute Maid $38,820,490 -16.5%

Minute Maid Light $35,740,600 -20.7%

Hawaiian Punch $27,221,870 -13.1%

Jumex $26,572,670 6.5%

Tropicana $20,920,970 0.9%

Kerns $20,061,840 -4.3%

Country Time $10,864,810 -5.8%

Jugos Del Valle $10,788,150 16.5%

Private Label $8,159,064 -9.2%

Tropicana Sugar-Free $7,699,248 65.9%

Heading Up: Tropicana Sugar Free SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart

52 Weeks through 10/8/06

SPORTS DRINKS Dollar Sales Change vs. year earlier

Gatorade $688,671,900 7.3%

Powerade $192,393,300 6.8%

Gatorade Frost $141,242,800 7.1%

Gatorade All Stars $102,503,200 18.8%

Gatorade Rain $101,231,800 N/A

Gatorade X-Factor $95,590,250 4.7%

Gatorade Fierce $89,809,760 -12.9%

Gatorade Xtremo $17,769,330 -22.5%

Gatorade Ice $15,378,530 -37.8%

Powerade Option $14,933,740 332.1%

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


RTD TEA Dollar Sales Change vs. year earlier

AriZona $257,494,300 27.7%

Lipton $135,779,100 204.6%

Snapple $106,443,600 9.2%

Diet Snapple $84,481,980 -2.8%

Lipton Brisk $81,492,890 3.7%

Lipton Iced Tea $50,160,480 20.8%

Nestea $33,231,240 142.8%

Private Label $29,576,210 10.3%

Nestea Cool $27,907,510 -52.6%

SoBe $14,535,760 -0.1%

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


CSDs Dollar Sales Change vs. year earlier

Coca-Cola Classic $1,916,843,591 -2.0%

Pepsi $1,558,906,797 -2.0%

Diet Coke $1,190,024,536 0.2%

Diet Pepsi $800,031,951 -0.5%

Mountain Dew $737,631,918 2.6%

Dr Pepper $593,148,780 1.9%

Sprite $590,439,900 -0.7%

Caffeine Free Diet Coke $351,414,685 -8.3%

Diet Dr Pepper $276,740,220 2.9%

Diet Mountain Dew $244,836,722 9.8%

Heading Up: Diet Mountain Dew SOURCE: AC Nielsen/Citigroup Total U.S. food/drug/mass


CONVENIENCE/PET STILL WATER Dollar Sales Change vs. year earlier

Aquafina $481,691,700 17.3%

Private Label $479,086,800 21.3%

Dasani $408,601,400 21.3%

Poland Spring $238,702,100 22.6%

Propel $193,110,400 9.9%

Arrowhead $161,414,200 15.2%

Glaceau vitaminwater $141,140,300 144.7%

Dannon $135,377,500 -13.4%

Deer Park $127,523,000 21.8%

Crystal Geyser $91,365,210 7.4%

Heading Up: Glaceau vitaminwaterSOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart


ENERGY DRINKS Dollar Sales Change vs. year earlier

Red Bull $261,775,900 22.1%

Monster Energy $81,482,200 118.2%

Rockstar $66,544,100 76.1%

Full Throttle $40,489,760 131.9%

SoBe No Fear $31,977,190 81.3%

Amp $22,806,050 20.5%

SoBe Adrenaline Rush $18,887,170 -7.5%

Tab Energy $11,445,890 N/A

Monster Energy XXL $4,781,691 1,131.3%

Private Label $4,692,075 N/A

Heading Up: Monster Energy XXL SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart


Channel Check november – december 200�


Water

From a new Health and Wellness division at Special K comes Special K20 Protein Water, a new flavored water delivering 5 grams of protein per 16 oz. bottle. With 50 calories each, the three flavors are Strawberry Kiwi, Lemon Twist and Tropical Blend. The retail price for four PET bottles is $5.99.

Say hello to Fred, a new flask-shaped bottled water currently available in New York City and Brooklyn, but expected to be distributed nationally in the coming year. Priced at $1.75 for a 20 oz. bottle, Fred comes in a plastic, flat container and is available via www.fredspot.com. For more information, call (212) 230-1800.

Wines

A.V. Imports has added Beronia Tempranillo Rioja to its González Byass portfolio. Pack-aged with bold red graphics that stand out in any display, the 2003 vintage boasts an intense plum color and ripe cherry nose. This product has been available since September with a suggested retail price of $10.99. For more information, contact A.V. Imports at (813) 248-6500.

A.V. Imports will also introduce a cream sherry, Solera 1847, from Gonzalez Byass, a winery that is regarded as one of the finest producers of sherry, including the world famous Tio Pepe. Solera 1847 is dis-tinctive with a light mahogany color and ripe raisin and fig flavors. Offering the slightest hint of toffee on the finish, this cream sherry is an ideal accompaniment to cheese, foie gras and desserts. At 18 percent alcohol, the Solera 1847’s suggested retail price is $15.99. For more information, contact A.V. Imports at (813) 248-6500.

Boisset America has introduced three new products for its line of Tetra-Pak wines: French Rabbit Family Reserves in red and white – a blend of six different grapes – and a line of 500 mL ePods, which are half-bottle

size servings of the French Rabbit Chardon-nay, Pinot Noir and Merlot varietals. Both the red and white Family Reserve blends that will retail for $13.99 each. The conve-nient 500 mL containers offer the same fine quality French wine as the larger 1 L ePods. The smaller size, which will retail for $5.99, holds more than three glasses of wine, mak-ing it ideal for those who enjoy a glass or two of wine with a friend. The packaging fea-tures the same benefits as the 1 L, it’s light-weight, shatterproof, and easy to transport, open, and serve. For more information, call (212) 682-2293.

Beauzeaux is a new red wine blend made from eight different varietals, includ-ing Zinfandel and Syrah, small amounts of Petite Sirah, Charbono, Grenache, as well as Lagrein, a red grape variety mentioned in the 17th century records of a Benedic-tine monastery. Beauzeaux is bottled with a striking “four act” label – each of the four labels features an illustration of a whimsical French juggler in different positions. Each bottle comes with four easy-to-learn parlor tricks – perfect pizza night entertainment for wine lovers and their friends. Beauzeaux is offered nationally at a suggested retail price of $9.99. For more information, call (707) 254-0465. CSDs

Ardea Beverages has launched a pair of new products in its airforce Nutrisoda line: Slender is a pink grapefruit- and guava-fla-vored soda that features Super Citrimax as an appetite suppressant. This product will be line-priced with other airforce Nutrisodas. It has also re-launched Immune. Immune is a nutrient-enhanced soda with vitamins, minerals and amino acids that help boost the immune system to defend against fall and winter ailments, including L-arginine, which supports the body’s immune system through enhanced T-cell function, Zinc, B-vitamins and Folic Acid. These products are line-priced with other airforce products. Also

NEW PRODUCTS

from airforce Nutrisoda come new 4-Packs of all of its flavors: Immune, Calm, Focus, Radiant, Flex, Energize and Slender. The 4-packs will be priced at $6.99. For more information call (612) 677-1717.

Energy Drinks

Hydrive, an energy drink introduced in July, has added a new flavor, Hydrive Pomegran-ate to its three initial offerings. Specially formulated to give a sustained boost of energy, Hydrive does not have the sugar spike and intense sweetness of most other energy drinks. With more caffeine than Red Bull, but with only 5 grams of carbohydrates per bottle, it alleviates the crash and the jitters. Offered in a re-sealable bottle, Hydrive Pomegranate’s suggested price is $1.69 to $1.99. Retailers receive attention-grabbing cooler decals, shelf strips and shelf talkers

as well as mini coolers, racks and suction cup shelf holders. For more information, call (914) 925-9100.

National Beverage Corp. is launching Rip It Chic, an extension of its Rip It line “created by women for women.” It will come in two pun-filled sugar-free flavors, Berry In-O-Scent and Sin-A-Man, in a unique can design that features sanitary foil over the lid. With a suggested price of $1.49 to $1.99, this 12 oz. sleek-can product is being distrib-uted nationally. For more information, call National Beverage at (954) 581-0922.

From the folks at the Coca-Cola Co. comes a new Full Throttle line extension, Full Throt-tle Blue Demon Energy Drink. With a blue color and a blue can, this drink is aimed at males aged 20 to 30. Based on the image of a Mexican movie legend named Blue Demon, this product has bi-lingual packaging and is flavored with blue agave. It comes in 16 oz. aluminum cans and will be line-priced with other Full Throttle offerings. For more information, call Coke at (770) 565-5440.

Malternatives

From the ever-creative malternative makers at Smirnoff comes a new flavor, Smirnoff Twisted V Arctic Berry. Smirnoff Arctic Berry became available nationwide as of October 1, 2006 and costs $6.99 per 6-pack. For more information, call (212) 714-1280.

Juice

Sambazon, the leading global supplier of the Amazon Superfood Açaí berry, has launched a new organic açaí juice, Purple Power, a pure blend of acai and blue agave. Purple Power will be available in single serving 10.5 oz. bottles and sold in the produce section of grocery stores nationwide. The açai juice is a follow-up to a line of six organic açai-based superfood smoothies Sambazon launched earlier this summer. The products are avail-able at natural foods retailers as well as con-ventional grocery stores, including Safeway, Vons, HEB, Meijers, Dierbergs, QFC, Shop Right, Dagastino’s and Food Emporium. For more information, call D’agostino’s at (949) 498-8618.

Fred Water

Hydrive Pomegranate

Red Bull 12 oz.

Shock Coffee

Jolly Rancher Soda

Red Rock Ginger Ale

AriZona Pomegranate Green Tea Energy

Hogan Energy by Socko

Golly Guarana

TRIBU 4 Energy Drink

Coffee Fiend by Pop Soda

V&V Energy

Beaver Big Buzz

C-Swiss Hemp Ice Tea

Rockstar Juiced (new flavors)

Enviga

Bally Blast Sugar Free

NOS Energy (new bottle)

From October 11 to press time. To see reviews, log on to www.BevNET.com

NEW DRINK REVIEWS


Consumers want authentic, fresh and great tasting cocktails.With over 30 years of experience and a unique recipe that blends real fruit and natural flavors, Daily’s deleivers top scores on all three.*

Introduce your customers to the best tasting cocktail mixes and ready-to-drink cocktails from Daily’s.

For more information visit www.dailysfruitmixers.com or call 1-800-245-2929 X6113.

*2004 Blattner Brunner Study.

© 2006 American Beverage Corporation, Verona, PA 15147

Consumers want great tasting cocktails... Daily’s Delivers

Beer

Fuller’s ESB, a definitive premium ale, has added new packaging design as of October. Fuller’s ESB will now be identified by a royal blue backdrop and confident graphics. Al-though new to U.S. consumers, for the past two years, ESB sold in Britain has featured the new look. To help create a presence, a variety of Fuller’s ESB accessories will be available, including: new eye-catching 3D pump clips, stylish bar runners, drip mats, clothing and other accessories. For more information, call (970) 927-5363.

Spirits

From Daucourt Martin Imports comes X-Rated Fusion Liqueur, a blend of premium French vodka, blood oranges, and mango and passion fruit essences. This product is aimed at younger women because of its mixability and bright pink color. This product is available nationwide and has a suggested retail price of $27.99 for 750 ml. or $31.99 for 1 L. For more information, call (201) 370-8057.

From the folks at Absolut comes Absolut Pears, a Pear-flavored vodka the is the ninth flavor in the Absolut Flavors portfolio. The Absolut Pears bottle is dressed in two shades of soft, mellow green with subtle curves and shapes inspired by the tender Anjou pear. The modern, organic design mimics the silhouette of an upside-down pear. This product will be available for $2 for 50 ml., 750 ml. for $20 to $22, and $27 to $29 for 1 L. For more information, contact the Absolut Spirits Company at (212) 641-8720.

Boutique spirits importer Haus Alpenz has recently introduced a pair of Austrian liqueurs to the North American market, Zirbenz Stone Pine Liqueur and Lauria Alpensahne Alpine Cream Liqueur. Both celebrate rich histories in the Alps as tastes of alpine luxury. Zirbenz Stone Pine Liqueur draws its flavor, color and nose from the fruit of the Arolla Stone Pine. It is available in 375 ml. and 750 ml. sizes, priced at $30 and $40, respectively. Lauria Alpensahne Cream Liqueur has a flavor derived from full alpine cream, alpine milk, Pear Williams brandy,

and has a unique texture derived from a blend of regional mountain pears. It is avail-able in a 750 ml. size that retails for $30.

Trago Tequila launched in October in California, Chicago and New York, with Las Vegas and Miami to follow in the first quarter of 2007. Trago, which means “taste” or “sip” in Spanish, is being marketed as an ultra-premium tequila that could be savored like a cognac or a port. It will be available in Silver, Reposado and Anejo, and carries a suggested retail price of between $50 and $70 per bottle.

Originally from Brazil, Boca Loca Premium Cachaça has just arrived in the U.S. Made with single-plantation, hand-harvested and pressed sugarcane from a small plantation in the state of Sao Paulo, Boca Loca (“crazy lips”)is the first “branded” cachaça created and bottled specifically with the US Market in mind; it is imported by the Meyer Marino Import Company. National roll-out plans underway in the US market include Samba parties infused with the music, energy and sprit of Brazil, and will feature an array of specialty Boca Loca cocktails at targeted bars and restaurants across the country. A 750 ml. bottle sells for $21. For further information about Boca Loca, call Meyer Marino at (303) 645-4840.

If Boca Loca isn’t on the Cachaça menu, what about LeBlon? This is another Brazilian white Cachaça rum named for an upscale beach neighborhood adjacent to Ipanema in Rio de Janeiro. This cachaça is shipped to France for light aging in Cognac casks before it is exported to the U.S. LEBLON is rolling out nationally, and is available now in the NY, CT, MA, NJ, PA, FL, CA, AZ, and IL mar-kets with a suggested retail price of $29.99 for a 750 ml. bottle. For more information, call LeBlon at (212) 741-2675.

Distributed by Southern Wines and Spirits, Ty Ku is billed as the world’s first premium sake liqueur, a mix of more than 20 natural ingredients, including pomegranate, Asian pear, oolong tea, ginseng and damiana. It features a green jade color and is currently available in New York City and Las Vegas, with widespread distribution expected in the coming year. Ty Ku’s packaging is com-posed of frosted glass with brushed chrome



accents, and it is launching with a “limited edition” bottle, one that illuminates when lifted, the result of new, patent-pending LED technology. A bottle of Ty Ku will retail for $32.99. For more information, call the guys behind Ty Ku at (212)777-3455.

Dairy

Bravo! Foods International Corp. is launch-ing two new licensed fl avors: Franken Berry Slammers and Boo Berry Slammers. These blueberry- and strawberry-fl avored 8 oz. products will be appearing before the end of the year and are a continuation of the Slam-mers product line. Produced aseptically, Slammers have no preservatives, do not need to be refrigerated until opened, and, be-fore opening, have a shelf life of six months. They will be line-priced with other Slammer offerings. More information is available by calling (561) 625-1411.

Hemp food processor Living Harvest has announced the launch of the fi rst shelf-stable hemp milk. Set to hit the shelves in January 2007, Living Harvest Hempmilk is a beverage for anyone craving the latest in performance health products and for those seeking a delicious and healthier alternative to soy or dairy. Living Harvest Hempmilk will initially launch in three fl avors – Original, Chocolate and Vanilla in vibrantly-colored 32 oz. aseptic containers. For more information, call Living Harvest at (212) 253-0474.

Tea

From Beverage Partners Worldwide – a joint venture of Nestle S.A. and the Coca-Cola Co. – comes Enviga, a functional tea designed to elicit the burning of calories in the drinker via a blend of green tea extracts, caffeine and naturally active plant micronutrients. Enviga will be available in three fl avors – green tea, berry and peach – in the ready-to-drink tea section at supermarkets, mass mer-chandisers, convenience and drug stores, and club stores. It will be sold in individual 12 oz. sleek cans as well as six-can and 12-can multi-packs with a suggested retail price of $1.29 to $1.49 for a single can. For more information, call (404) 676-1070.

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INNOVATIVE BEVERAGES QUARTERLY WINTER 2006›››INNOVATIVE BEVERAGES QUARTERLY WINTER 2006›››

THEADDITIVES MASTERFLAVORS YOU CAN’T DO WITHOUT

PATHS TO INNOVATION

Red Bull’s DietrichMateschitz:Energy supplier for a new era in beverages.

THE NEW BEVERAGE VANGUARD:

EXECUTIVESMAKINGTHE FUTURE

IBQ_cover copy 5.indd 1 9/20/06 4:28:49 PM

A weekly newsletter covering industry news and new products

A quarterly publication devoted to “Innovative Beverages”

Your source for beverage news and reviews.

Bev

NET

IBQ

Mag

azin

eEm

ail N

ewsl

ette

r

KNOW YOUR INDUSTRY.GET NETWORKED.


BevNET.com’s VIEW

John Craven is the founder of beverage-in-dustry watchdog The BevNET.com, based in Cambridge, Mass. The BevNET.com’s goal is to test nonalcoholic beverages — primarily soft drinks — and to provide a written critique of each one on its Web site. With more than 1,100 reviews posted since 1996, The BevNET.com has become an inter-nationally recognized resource for beverage industry professionals.

n just ten years, BevNET has grown from a

small hobbyist web site – one that helped me

get a lot of free drinks – into a company that is a

nationally-recognized source for published bev-

erage reviews, news features, and a print maga-

zine – the very one that you’re reading right now.

It has been quite an evolution – and we’re not

done yet. In just a few months, we’re launch-

ing BevNET IBQ, a new magazine that covers

strategies for developing innovative beverage

products.

In many ways, our decade-long evolution as

a publishing company has paralleled a major

change in the beverage industry. What started

as a web site focused on drinkability has turned

into a company that examines the entire indus-

try. Similarly, what started as a class of consumer

products focused primarily on taste and refresh-

ment has morphed into one that is increasingly

driven by the satisfaction of any number of need

states.

When I first started BevNET, we were review-

ing root beers, coffee cola, high-calorie ready-to-

drink iced teas, and a plethora of South Ameri-

can fruit-flavored soft drinks. Everything was

about taste, and the primary “function” was the

ability to quench thirst and please the senses.

Functionality and energy were largely left to

sports drinks and coffee. A notable exception

was found in Jolt Cola, which was, for the most

part, considered a novelty product.

Obviously, that has changed to a large extent

– and today’s market is dramatically different.

Now, people want more from their beverages

than ever. They are demanding functionality,

beautiful design, great taste, and fewer calories.

The future of this industry is exciting, but un-

certain. There are many new areas for growth,

including the mainstreaming of functions other

than energy. But there is also cause for concern.

Manufacturers for too long varied size rather

than function when determining their new of-

ferings, and at times, when they have introduced

functional beverages, they have been so behind

in catching the drift of consumer desire that

they have made ham-handed claims in place of

quality, innovative products. That might change

very soon, as the Food and Drug Administration

is showing signs that it will evaluate functional

food and beverage products. How far they will

go towards regulation, we don’t know, but we’ll

be watching.

One thing that we do know for certain is that

consumers will continue to demand innovation.

And that’s the main reason that we are launch-

ing BevNET IBQ. We plan to take BevNET’s

awareness of the marketplace and combine it

with Beverage Spectrum’s ability to determine

what consumers want, funneling that insight

into the essential industry guide for the Bever-

age Marketer.

How will that help you sell more products?

We aim to make sure that those who want to

create new beverages are doing it in a way that

lines up with what consumers are going to want.

We will help Beverage Marketers understand

important drinking and design trends, demand

for certain functions and flavors, and bring them

insight into changes in brand development and

marketing across all manner of packaged goods.

We plan to make sure that we all have a profit-

able, healthy future, from the ingredient makers

and flavor houses to the marketers, distributors

and consumers.

The beverage industry is an enjoyable one

to cover. Every year brings a fresh litter of 300-

plus products, many of which bring something

unique to the industry, and speak reams about

consumer desires and marketing dreams. Soon,

we will put up the Best of BevNET 2006 – check

out the web site for details – but know that, re-

gardless of who gets chosen, things are getting

better every year.

Ten Years After

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ENVIGA EFFECTHow will functionality function in your cooler?

This is the year you fi nd out.

the

By Jeffrey Klineman


G et ready, people.

With the release of Enviga, a new calo-

rie-burning tea from the Coca-Cola/Nestle

partnership known as Beverage Partners World-

wide, the functional beverage movement has

gone mainstream.

The rubber is meeting the road. How should

you react? Are you going to have to stock up

on products that flush the system, fill the tank,

shine up the human hood?

What changes will be wrought in your cooler

by the Enviga Effect?

Well, for starters, you’ve got to weave through

a lot of traffic chasing after Enviga for the calorie

burning space. Already, Elite Fx, the company

that first marketed a calorie-burning formula in

Celsius, has ramped up its advertising and is

pressing for increased distribution, claiming

that the release of the Coke/Nestle calorie-burn-

ing tea legitimizes the category they pioneered.

PepsiCo has its own plans to release Tava, a

soda that also supposedly ramps up calorie

burning via the mineral Chromium. Snapple,

which has a growing green tea brand, will add

label language indicating that it, too, boosts the

metabolism. Companies like Fuze and Airforce

NutriSoda, both of which have products with

appetite-suppressing super-Citrimax, are ready

to push for more space.

It’s important to note that all of these

products are only chasing one thing: thin.

Here’s the skinny: thin is the Killer App in

the food and drink business. If people think a

drink will help them lose weight, they’ll buy it.

A recent survey by the drug company Glaxo-

SmithKline PLC showed that 33 percent of

Americans who are trying to lose weight have

tried dietary supplements with no proven

benefit. AC Nielsen recently reported that 15

percent of U.S. households have bought weight

loss products in the last year. The market is there

for a mainstream product that purports to have

a slimming effect.

But at the same time, if it doesn’t work, there

are plenty of other products – be they beverages

or other consumer goods – that are available to

take their place in the weight loss market. That’s

the game that Coke and Nestle started playing

when they showed the Enviga card.

BEYOND SKINNYDespite the potential gold mine awaiting an

effective weight loss beverage, when it comes

to functionality, Enviga had better not be the

only card in the deck, according to Kaumil

Gajrawala, a beverage analyst with UBS.

“It’s a long-term trend,” Gajrawala says.

“Coke has said publicly that they want to

better leverage their research and development

to develop more of these kinds of products.

You’re seeing it across all CPGs (Consumer Pack-

aged Goods) as well. Cheerios has labels that

relates to how it affects your heart. Someone else

just launched a chocolate bar that’s supposed

to be good for your heart. So they’re all going

in pretty deep.”

That’s not to say you should expect to

stock racks of functional sodas; according to

Gajrawala, that particular beverage category is

drowning in too many line extensions already.

But in those categories whose shelf presence

is already growing – tea, water, sports drinks

– functionality is going to accompany them

hand in hand.

“Efficacy will become important,” says Deb-

bie Wildrick, the beverage portfolio manager

at 7-Eleven. “Consumers already have given

the industry ‘permission’ to put additives in

their beverage, but it’s not enough to have just

a splash of a special ingredient in the drink.

Consumers want more from enhanced bever-

ages and will expect to feel a difference after

consuming these products.”

Natural and New Age food manufacturers

realize what consumers want: at the Expo East

Convention in October, tea and juice lines

like Pure Fruit were defined as much by what

they are expected to do as by their flavor. Fuze

Beverages, which has recently taken nine of

the top 50 supermarket SKUs in the New Age

category, are nearly entirely dependent on a mix

of products that promise various functions, from

appetite suppression to free radical scavenging.

Last year, Ito En presented the Sencha Shot, a

triple strong bullet of green tea that, if antioxi-

dant research is correct, contains the equivalent

of a mortar attack on free radicals. And if Enviga

takes off, expect some of those companies to

introduce packaging that evokes their latent

qualities as much as it does their natural or

organic origins. After all, the levels of green

tea catechins and caffeine present in Enviga’s

“proprietary blend” of calorie burning ingre-

dients are very similar to those present in a

well-brewed green tea, in similar ratios.

Nevertheless, even proving a drink helps

consumers lose weight is, while measurable,

still subjective. When considering the effects of

Enviga, which are smallish (the Wall Street Jour-

nal reported the calorie burn is similar to that

achieved in a 15 minute walk), the customer

is going to have to believe, and see, that it is

working. Moving into other functional areas, it’s

going to be hard to prove more. Products claim-

ing to have longer-term benefits, like all of those

that contain antioxidants, aren’t marketed as a

“At the end of the day, it’s got to be a genuine benefit. Today’s consumer is able to see through anything that’s not real.”

27NOVEMBER – DECEMBER 200� \\ BEVERAGE SPECTRUM

cure for anything – their implied benefi t is in

what they prevent, rather than what they cause.

But others, like skin improvement products,

performance enhancement beverages that offer

everything from tranquility, to spiritual insight,

to sexual bliss, may very well have to measure up

to their billing, or disappear overnight.

Nevertheless, marketers are gambling billions

on the belief that a product that might work will

be just as attractive to consumers as the ones that

actually work.

“There are two things here,” says Gajrawala.

“At the end of the day, it’s got to be a genu-

ine benefi t. Today’s consumer is able to see

through anything that’s not real. But people are

moving from CSD’s because they know they’re

bad for you. Now, you look at Enviga, and sure, it’s

carbonated, but it’s clearly a green tea product,

and not only is it not bad for you but it could

be good for you.”

That’s the line walked by the products at Gla-

ceau, whose Vitaminwater – believed by many

experts to have helped inspire the rush to launch

more functional products – might have already

grabbed the lion’s share of the potential market

for functional waters. But how many more times

can lightning strike in that fuzzy spot between

marketed effect and sugar water?

RAISED STAKESWhile there’s no arguing with Glaceau’s suc-

cess, there’s likely no replicating it, either – their

lead is huge and they’ve already spawned less-

than-successful imitators. The market strength

of Vitaminwater means that stakes have been

raised. The next product whose label promises

something immediate and tangible beyond basic

hydration or caffeine-related alertness needs to

deliver, or it could torpedo the whole category.

“That’s been the problem with the New Age

The next product whose label promises something immediate and tangible behond basic hydration or caffeine-related alertness needs to deliver, or it could torpedo the whole category.

since the beginning,” says Lance Collins, the

CEO of Fuze. “A lot of these companies haven’t

fulfi lled their promise to consumers. Products

that were billed as offering ‘healthy refresh-

ment’ were just offering ‘healthy deception.’

I was a witness to all these false representa-

tions and thought I could deliver something on

that promise.”

Collins says he believes marketers are getting

better at creating functional beverages.

“Big companies are delivering beverages that

offer benefi ts,” he says. “It’s better, but it’s not

great. They’ve come a long way. They see what’s

going on with consumers, and I guess they’re

heeding the call.”

Still, that doesn’t mean that as retailers, you

should grab every new

functional beverage that

you can.

“You can’t ignore it,

because it’s something

that people are looking

for,” says Lauren Tor-

res, the chief beverage

analyst at HSBC. “It’s

always great to be the

fi rst one out with things,

like with Gatorade. Some of these catego-

ries at times do have some traction. But re-

tailers have to be very careful – there’s

always shelf space to allocate, but you have to

take it very slowly to see how consumers react.”

Chances are, if there’s even a hint of helpful-

ness to a product, there are a whole lot of sales to

come. As a retailer, remember this: a large part

of the attraction of functional beverages is that

they pay lip service to both convenience and

health – currently two of the top three drivers

of consumer food choices, according to a recent

survey by the NPD Group. Nothing is more

convenient than drinking something that will

slim you down, wake you up, keep you from

getting cancer. It beats the hard work of exer-

cise, the time you need to sleep, the expense and

detail required to keep track of one’s health.

“Consumers want more functionality, and

they want it to be convenient,” Wildrick says.

“Providing more enhancements that are easy to


Now there’s even more Metromint to love.

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

Each variety of Metromint is now designated with a numerical chill factor. From mildly cool Orangemint (-3o)

to super cool Peppermint (-9o), the chill factor is a comparative scale that measures the range of minty refreshment.

Metromint is currently the fastest growing bottled water in the natural food channel.* Our success comes fromdriving sales with an effective promotion program. We’re building the Brand, raising awareness, and developinga fanatically loyal following. Distributor or retail inquiries: 415 979-0781. E-mail us at [email protected].

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

drink and more readily absorbed by the body

will be important for the beverage industry in

keeping up with consumer needs.”

DOWN THE ROADBy all means, be ready to hop on the function-

ality train. If you’ve simply got a convenience

CSD cooler, think about adding an Enviga or a

Tava, or even a Celsius – products like that are

attractive to drivers (especially considering the

fact they have massive amounts of caffeine). And

if you’ve got a broad array of products, be ready

to go further. Think about the way orange juice

manufacturers created new revenue streams

– and soaked up space in the dairy cooler – by

coming up with different fortifi cation packages,

and you’ll get an idea of the potential for expan-

sion.

But here’s a little packaging note that needs to

be kept in mind:

“This statement has not been evaluated by the

Food and Drug Administration. This product is

not intended to diagnose, treat, prevent or cure any

disease.”

You’re going to see it on a lot of labels. And the

number of disclaimers might eventually come to

overwhelm the perceived level of benefi t. In De-

cember, the FDA is meeting to start defi ning, in a

regulatory sense, some of the products that

produce functionality. If that happens, get ready

to see the numbers shrink all around – including

those products whose only fortifi cation has been

their own marketing claims.

Nevertheless, there’s a lot to try, and the end

result could be, rather than a series of products

that are part of other categories – a la Enviga or

Tava – just a functional category all to itself. The

demand is there, Wildrick says.

“They’ll keep looking,” she says of con-

sumers. “Word-of-mouth and viral marketing

will quickly raise awareness and trial of those

drinks that customers believe live up to their

claims. Products that disappoint will drop off

the shelves, whereas the best performers will

be the winners.”

TEAS STEEPED IN ADDITIONAL GROWTH — Tea sits at the intersection of two trends: functionality and health. With its leaves serving as a natural source of fl avor and of the antioxidant-supplying catechins, tea is poised for contin-ued major growth this year. How valuable is that prospect? It’s so tempting that longtime couple Beverage Partners Worldwide – Coke and Nestle – are taking a trial separation over green, white and red teas, developing their own products independently. MORE LIGHT IMPORTS — The only way things could have gone better for Heineken this year is if Andre Agassi could’ve rallied to win the U.S. Open with a Heineken Premium Light in his left hand. As it was, though, the prod-uct exceeded all predictions that it would exceed all predictions for success. So expect other importers to rush to market, and a bigger ad push from Beck’s. Otherwise, non-high-end imports are likely to face the same problem as domestic premium brands: the galloping grape. THE SEARCH FOR THE MAGIC SWEETENER — Honest Tea thought they had it earlier this year with erythritol, a fermented organic cane sugar, then they scuttled their Tangerine Green tea. There’s still talk of Chinese Splenda, while ace-K continues to be blended with everything under the sun. But until someone comes up with a low-calorie way to replace real sugar’s taste, expect the juggling acts to continue. ENERGY — Caffeine paranoia is expected to build to an early high right at around New Year’s Eve, when the consumption of energy drinks and vodka hits an all-time high, and products like Cocaine and Green Card draw even more negative media attention. WIDESPREAD WATER ENHANCEMENT — From BooKoo to Odwalla, enhanced waters will be everywhere next year, capitalizing on the growing market ex-emplifi ed by Vitaminwater. And while there are plenty of products that claim functionality coming out, that market will be tiny compared to the demand for more low-calorie, fruit-fl avored waters with a little vitamin enhancement and some snazzy packaging.


You didn’t think we’d leave you with just one major industry current, did you? Here are some other important developments to keep track of in the year to come.


We know, the New Age isn’t really that

new anymore. Snapple and Nan-

tucket Nectars mingle at Cadbury

Schweppes cocktail parties, and Fruitopia fl ew

the coop. But there are still a few folks out there

who stick strongly to many New Age tenets:

odd mixes, uses of exotic fruit or herbal fl avors,

outrageous packaging and a proposition that

straddles two or three older, more established

beverage categories but doesn’t fi t comfortably

into any of them.

And there are plenty of retailers who still want

to maintain a New Age beverage set. It allows a

designated location for fresh, eye-catching prod-

ucts that might not be able to compete in a nar-

rowly-demarcated cooler, and it allows them to

be sold at a premium, due to their high-margin

otherness.

So, if you’re interested in keeping the New

Age alive for yourself and your customers, here

are fi ve product lines that could form a pretty

strong core group:By Jeffrey Klineman

Fuze: Slenderize, Refresh, VitalizeThese products use a mix of just about every available beverage material, from the milk and fruit

juice blends that characterize their Refresh line of not-quite-smoothies to the fruit juice and

electrolyte combinations in Vitalize and the potential for appetite suppression that comes from

Slenderize. Fuze has fi ltered through mounds of product types to varying degrees of success but

remains very much a New Age stalwart, tinkering with combinations of ingredients, fl irting with

different functions, and creating beverages that have never fi t neatly into any one category. Which

means that they’re at the very heart of New Age.

Ito En Sri Lankan Tea BlendsMixing super-fresh tea and pure fruit juice in a rectangular, shrink-wrapped bottle, these exotic

(domestically exotic, that is, as it’s a leading brand in Japan) little beverages combine strong fruit

and tea fl avor. Flexible enough to be consumed – or vended – cold, at room temperature, or even

in a special warming box, these mixes of black and green have a lot of badge appeal for tea fans.

Adding all the appeal of natural tea to the American penchant for sweetness, this is basically an

Arnold Palmer in a very contemporary package.

Sol MatéIs it a soda? Is it an energy drink? A carbonated tea? Does its odd, angular glass bottle come from

outer space, or the ancient Aztecs? Whatever it is, there isn’t a whole lot of defi ned space around Sol

Maté, and that means that you’ve got a fi zzed-up leg to support your New Age table. The yerba maté

base gives it an energizing kick to accompany its exotic fl avor, which isn’t overwhelmingly sweet.

Somewhere, there’s a salsa dance night that’s just screaming for a case of this.

Taste Nirvana: Creamy Thai Tea, Creamy Thai Coffee, Creamy Green Tea and Coconut JuicesFor consumers who love Thai-style products, the teas and coffee here represent one of the few

opportunities they’ll have to enjoy these drinks outside of a Thai restaurant. While the packaging

isn’t overly exotic (except for the one that looks like it’s holding green paint, thanks to the mixture of

ingredients) there isn’t a lot of designated shelf space for any of these products, except if you group

them all together. Add the coconut juices – a couple of which include Orbitz-looking coconut pulp

– and you’ve got something to put next to Fuze’s Vitalize as a New Age sports drink. To be sure, it’s a

highly ethnic product line at this point. But so was Red Bull.

Carpe DiemSpeaking of Red Bull, founder Dieter Mateschitz struck out into an entirely new direction with the

launch of these lightly carbonated, exotic herb, root and soda blends. With tall, elegant packag-

ing, these vibrantly-colored drinks are based on extracts of Gingko, Kefi r, Kombucha, and botanic

waters. Their labels include little symbols for Yoga, meditation, and even archery. They’ve got

pungent smells evocative of old ways, but they’re bottled in an hourglass shaped PET that must have

given the mold-makers fi ts. Get ready. The Yoga Moms are getting thirsty.

NEW AGE: Five that Still Fit

BS1206


CONVENTION SCRAPBOOK From ultimate fi ghters to bad breath fi ghters, from the World’s Strongest Man to World’s Best Coffee, this year’s NACS Show had it all. But don’t just take our word for it, check out some of the folks who were there…nacs 200�

The All-American Cadbury Schweppes booth featured Betty Cooper and Veronica Lodge.

Bawls’ Hoby Buppert, double-fi sting it. Rio Miura, founder of Metromint. Modernist aesthetic, anyone?

Rockstar’s new spokeswomen, Paris and Nicole. Nice that they made up, huh?

Mark Beatty of Heineken takes advantage of the one-drink-per-customer policy.

Monster’s Sam Pontrelli, Geoff Bremmer, and friend – Keep it Classy, Las Vegas!

BooKoo’s Pam Thornton shows off her energy juice.


nacs 200�

Glaceau’s Tom Riggio, sitting pretty.

Nate Hoops and Justin LaForgia, ready to bring Fuze to a town near you.

Brian O’Byrne and Art Carey – they ain’t pretty, but they move product.

A smiley group at Tempest Tea: Melissa Rushing, Crafty St. James, and Melissa Bailey Box. Caballo Negro’s Arley Campbell – proud papa.

Look who showed up for Socko! Energy for the Hogan Leg Drop.


CONVENTION SCRAPBOOK To misquote the Bob Dylan lyric, “There was music on the convention fl oor at night and patchouli in the air” at the recent Natural Foods Expo East gathering, where our favorite leading-edge crunchy types were on hand to discuss all things antioxidant, fruitful, or just plain sinfully good.expo east

Karsten Robbins of Luvli Juices prepares for the onslaught.

Energy on tap at the Sol Mate booth

Jessica Cooper shows off Pure Fruit Technology. We thought it was juice, but no, it’s technology. Alex Reist shows the effects of Inko’s White Tea Energy…

…which is also, apparently, affecting the guys from Maine Root.Ito En’s Jeff Sleeper and Nancy Northan – a formidable duo.


expo east

Peter Mouritz gives people the Hint.Who couldn’t be (Pro)Bugs about Lifeway’s Marina Nikolenko

The loneliness of the hemp milk seller

The energy at the Guru booth was all-natural, as always.

Steve Kessler and Carle Robbins show off Steaz Energy...and shoelaces.

Bossa Nova’s Palo Hawken, with product and matching t-shirt.


• Show Schedule •

WHO: Vendors, Buyers, Retailers and Distributors

WHEN: Friday, Jan. 19 to Tuesday, Jan. 23, 2007

WHERE: Moscone Center, San Francisco, Calif.

WHY: For product demonstrations and samples, educational seminars and workshops, and Special Events

FOR INFO: National Association for the Specialty Food Trade, (212) 482-6440

5 pm – � pmNetworking Wine Reception showcasing the Fancy Food Show’s newest products!

Sunday, January 21

Keynote Session

8:30 am – 10 am“Fast Food Nation: The Dark Side of the All-American Meal”Eric Schlosser, author, Fast Food Nation

Seminars

1 pm – 2:30 pmPricing Gift Baskets for Maximum Profit

3:30 pm – 5 pmBeyond Soy Sauce: Exploring Premium-Quality Japanese Products

Store Tour

3 pm – � pmSan Francisco’s Specialty Food Retailers: How They Stay Current

Monday, January 22

Seminars

8:30 am - 9:30 amSpecialty Food Magazine Presents: Today’s Specialty Food Consumer 2006

8:30 am – 10 amNASFT Diversity Program Presents: Minorities in Specialty Food: Leveraging Business- Building Opportunities

8:30 am – 10 amTen Steps to Increase Website Sales and Profits

3 pm – 5 pmThe European Union Presents: Tradition + Technique + Terroir = Taste of Traditional Foods Tuesday, January 23

Seminars

8:30 am – 10 amDefining, Differentiating and Marketing Fine Chocolates

8:30 am – 10 amFrom Restaurant Plate to Retail Shelf: The New Menu Trends Affecting Your Business

Friday, January 19

Workshops

9 am – 4 pmFundamentals of Specialty Food Retailing

“Supplier Education Day” – Focus on Manufacturers, Importers and Marketers

9 am – 12 pmHow to Achieve Profitable Broker & Distributor Relationships

9 am – 12 pmStaying on the Shelf: How to Compete with Mainstream Food Companies

10 am – 3 pmThe Basics: The Business of Specialty Food

2 pm – 5 pmBranding Boot Camp for Specialty Food Suppliers Saturday, January 20

Workshops

9 am – 12 pmSocial Media Communication: New Ways to Get Closer to the Consumer

2 pm – 5 pmTaking Your Products to the Marketplace

“Super Retailer Summit” – Exclusive Event for Retailers

8:30 am – 9:30 amGENERAL SESSION: The Future of Food Retailing

9:45 am – 11:15 amBREAKOUT SESSION I• Creating and Delivering

In-Store Demos and Tasting Events That Connect with Customers

• Zingerman’s Approach to Better Buying

11:30 am – 1 pmBREAKOUT SESSION II• Costing and Pricing• Partnering With Local Food

Producers

2 pm – 5 pmPre-Show Buyer-Supplier Connection

Winter Fancy Food Show

Exhibitor List

Adagio Teas

Ardea Beverage

Ariel Vineyards

Brands of Britain, LLC

GuS - Grown-up Soda

Hi Ball Inc.

Hint, Inc.

Honest Tea

ITO EN LTD.

Kehe Food Distributors

Liberty Richter

Lorina, Inc.

Metromint

Nantucket Off-Shore and Stirrings

O Beverages

One World Enterprise, LLC

Pixie Maté

Purity Organic, Inc.

Revolution Tea, LLC

Royal Pacific Foods—The Ginger People

Skylar Haley

Source Atlantique, Inc.

Sweet Leaf Tea Company

Taste Nirvana International Inc.

Tempest Tea

The Republic of Tea

Vita Coco

Booth Number

4118

1747

2918

3217

434

202

835

1071

2621

1653

943

3251

1346

1775

4920

801

1548

405

550

1542

1858

3405

424

1052

2410

1250

849

D40557cspm 6/21/04 5:00 AM Page 1


PROMO PARADE

Pernod-RicardPernod Ricard will be maintaining a festive line-up of

value-added packaging and point-of-purchase displays for trademark brands Kahlúa, Stolichnaya, Chivas Regal, Beef-eater, Jameson, Martell, Wild Turkey, The Glenlivet and Hi-ram Walke this holiday season. The specially designed pro-motional materials will keep Pernod Ricard brands top of mind and offer consumers shopping convenience during the hustle-and-bustle of the holidays.

The 2006 off-premise holiday promotions for Pernod Ri-card’s brands include:• The exotic spirit of Kahlúa

will be available in two holi-day gift giving packages; the Kahlúa 750 ml. with two el-egant White Russian glasses or alone in a holiday 750 ml. gift box. Supporting the value-added packaging will be a pole topper, shelf talker and a two-sided, acrylic case card with recipe tear pad.

• Stolichnaya Vodka is offer-ing two special gift packs; one that features a 750 ml. of Stoli with two frosted shot glasses and one that features a 750ml of Stoli packed with four 50 ml’s of popular Stoli fl avors. Larger Stoli fl avors will also include unique gift wrap packages.

• Beefeater London dry Gin enters the holiday season with two value-added packs to attract store traffi c. The Beefeater 750 ml. with two Collins glasses gift set and the Beefeater 1.75 with cock-tail shaker gift set make a great and convenient gift to customers.

• Wild Turkey Kentucky Straight Bourbon comes to the holiday table with a range of gift packs that include a Wild Turkey 101 with two rocks glasses, Wild Turkey Rare Breed with two rocks glasses and a Wild Turkey 101 750 ml. gift carton. Point-of-sale has been designed in the unique personality of the brand.

Best. Job. Ever.The makers of Chivas Regal scotch are launching Year

Three of the Search for The Chivas Life, seeking two people to become Chivas Life Ambassadors for an entire year, trav-eling the globe together in search of extraordinary experi-ences.

Now encompassing twelve months, this latest Search will appoint two Chivas Life Ambassadors to serve as inter-national representatives of the world's smoothest Scotch whisky, whose compensation, including travel stipend, will be $200,000. Their duties will include interacting with inter-national and domestic media, recording their adventures online, hosting mentoring events and attending exclusive Chivas Life events such as Elephant Polo and Snow Golf.

Another new component of the Search is The Chivas Studio, open for several weeks in six major markets - New York, Dallas, Miami, Chicago, Los Angeles and Las Vegas. In a custom-designed space in each city, the Chivas Studio will be open to fi lm Chivas Life Ambassador applicants on-site, while at night, the Studio will offer various facets of The Chivas Life, whether it's an intimate Chivas Musica event, a Chivas Life party, or various exhibits.

Applications for the two positions will be accepted through March 30, 2007, and will be reviewed by a panel of travel and lifestyle experts. For more information, or to download an application, visit www.chivaslifeambassador.com.


That Time AlreadyMiller Lite and Miller Genuine Draft

are attracting consumers at retail by promoting Better Beer for the Big Game. A national sweepstakes offers consumers a chance to win a champi-onship bonus, off-premise accounts are invited to build their own super party central and drive awareness with foot-ball themed fl oor decals, static stickers, stadium spectaculars, cut-outs, infl ata-bles and yard markers.

Diageo

Diageo, which recently acquired Bushmills Irish Whiskey, has announced a new packaging and advertising campaign designed to build the brand’s profi le in the Irish whiskey cat-egory. The new campaign is the fi rst for Bushmills.

The campaign will also reference a March 8, 2006, New York Times article that selected Bushmills 10 Year-Old Single Malt as the Number One Irish whiskey among 16 competi-tive whiskies. The ads recently launched in sports publica-tions, including Sporting News, USA Today, and the Times. The campaign will continue through the rest of the year in men’s lifestyle, news and trade magazines such as Blender, The Onion, Men’s Fitness and Men’s Journal.

The campaign will also prominently feature the new Bush-mills packaging, which conveys a more contemporary feel, yet retains the brand’s strong Irish heritage.

Heaven HillHeaven Hill’s PAMA Pomegranate

Liqueur, the world’s fi rst true pome-granate liqueur, will release a full consumer and trade media campaign beginning in November with consum-er placements in GQ, InStyle, Vanity Fair and Vogue through October 2007. The campaign will continue to drive consumer and trade awareness for PAMA Pomegranate Liqueur – one the industries’ hottest products. The ad campaign is designed to capital-ize on the overwhelming consumer and trade response to the product’s introduction. Consumer insertions will feature a scent strip, much like perfume ads, with the alluring scent of PAMA in a campaign titled, “Pome-granate Perfected.”

On the fi rst anniversary of the product’s launch, PAMA Pomegran-ate Liqueur will also feature regional consumer ads in New York style pub-lication Gotham, Miami social maga-zine Ocean Drive and the social-life based Chicago Scene.

The trade ad campaign will cover publications dedicated to both retail and on-premise spirits business. In the campaign, a PAMA Martini sits atop a pomegranate set against a background of the PAMA Tree logo in silver. The recipes will highlight the brand’s mixability and great fl avor.

Plus, consumers can stock up for their own big game party with these special cross-merchandising offers from Hillshire Farms Lit’l Smokies, TGI Friday’s frozen snacks, Jack Daniel’s sauces and marinades and Cheez-It Snack Crackers. This promotion will run from January 1 to February 5. See your local distributor for details and to request merchandising materials.

BEVERAGE SPECTRUM // NOVEMBER – DECEMBER 200�42 200�

GERRY’S INSIGHTS

Longtime beverage-watcher Gerry Kher-mouch is executive editor of Beverage Busi-ness Insights, a twice-weekly e-newsletter covering the nonalcoholic beverage sector.

Big or Small

Beverage wise, this last year ranks as one

of the most exciting I’ve seen. The major

companies explored provocative ways of shift-

ing their business models with the times, even

as smaller brands picked up traction in higher-

margin segments of the business. Major Coke

and Pepsi bottlers, as well as Anheuser-Busch

distributors, continued to put their core suppli-

ers on notice that they expect more in the way

of innovation. That degree of ferment has to be

healthy for the industry in the long run. Here

are a handful of themes distilled from a year of

covering this fascinating business:

innovation still seems to be the

province of the smaller guys.

Sure, every major beverage corporation has put a

priority on stepping up innovation, and several

have gone to ingenious lengths organizationally

to try to get there. Nevertheless, when I take a

stroll down the store aisle, almost everything

truly exciting seems to have emerged out of a

garage, metaphorically speaking. No question,

the big guys are bringing lots of new products to

market, and the onrush may be having a salutary

effect in attuning their production and distribu-

tion systems towards handling a more diverse

portfolio. But most of these products seem to

be line extensions or by-the-numbers concepts

(“Let’s see, coffee and canned energy drinks are

booming and we do sodas, so let’s create Coke

Blak”). There are exceptions, but too few, and,

in some cases, such as trying to convince con-

sumers that 7Up is now “natural” or that Bud

Select somehow is a breakthrough in brewing,

too contrived: the companies seem to harbor

hope that brilliant marketing can mask a lack of

genuine innovation. Indeed, megabottler Coca-

Coca Consolidated took a slap at the quality-

not-quantity issue when it recently attributed its

weak quarterly results to a “decline in signifi cant

innovation.” Its core supplier is Coca-Cola:

enough said.

big guys, needing innovation, will pay a

lot for the smaller guys who have it.

The valuations paid for some smaller brands in

the past few months have struck veteran bever-

age watchers as rich, even outlandish. Not just

Tata’s stake in Vitaminwater marketer Glaceau

(at an enterprise value of roughly $3 billion) but

also Anheuser-Busch’s $82 million purchase of

declining Rolling Rock and Pepsi’s $75 million

purchase of still-tiny Izze. But these guys are far

from crazy. The trend refl ects their awareness

that, though there may be few entry barriers to

duplicating the formulations of some of these

products, it is not so easy to successfully knock

them off after all. (Witness Pepsi’s humiliating

effort with SoBe LifeWater.) Once these brands

have achieved fi rst-mover advantage, consum-

ers’ perception of their authenticity makes them

hard to dethrone. Better to ungrudgingly pay

the premium and hope you can keep the magic

going once you incorporate the brand into your

own system. And yeah, good luck on that one.

if you’ve got innovation,

launch it in a big chain.

For decades, the mantra was that innovative

brands are built up and down the street, gener-

ating the consumer intrigue that might fi nally,

along with a $40,000 slotting check, make the

chains take notice. Can it be that that notion

is being turned on its head? I think it often.

I’ll walk into a dingy New York deli and spy a

premium beverage in the cooler – one of those

açai drinks or some highfalutin coconut water.

“Did somebody from that company actually call

on you?” I’ll ask the manager. No, I’d be told,

the manager had spotted it in Whole Foods

and approached the company. Certainly, the

aura-conferring status of Whole Foods can no

longer be denied. I’m a bit more dubious about

the degree of cachet that accrues from landing

on the shelves of Target Stores, but a national

or super-regional presence that comes of crack-

ing chains like those seems to lend credibility

to a new brand, and opens doors up and down

the street. Sure, some of this theory is mere ra-

tionalization by marketers who can’t land a de-

cent DSD distributor; also, a heavy reliance on

fi ckle chain buyers carries its own dangers. But

as retail consolidation concentrates power into a

handful of mega-chains, there’s no question they

have become a route to instant awareness and

recognition. Crack the chains, and the up-and-

down-the-street guys – and the distributors who

service them – may follow.

an Exciting Year

(1) Source – IRI data 52 weeks ending 3/20/05 comparing total grocery basket size among Samuel Adams®, imported and mass domestic beers.© 2005 The Boston Beer Company, Boston, MA.

Take pride in your beer.™

YOUR SHOPPING CARTS ARE ABOUT TO GROW.Facts prove customers with Samuel Adams® in theircarts spend more in your store1. Make sure you aregetting these customers to your store by focusing on ad mix, shelf sets, in and out of section displays and cross-promotions with other high-quality and high-margin items. Call 1-800-330-4112 to speak with a Samuel Adams®

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Beverage_Spectrum.indd 1 9/2/05 7:07:29 PM

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beverage spectrum nov-dec 2006

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