Beer Marketer's Insights
AriZona Beverages is continuing to play its delicate margin-blending game, taking pricing in non-core areas so it can maintain the 99-cent price of its iconic 23-oz can in key channels. Effort to maintain a price that's been unchanged for 30 years now has become a subject of fascination to media beyond the trades, and this time it's Yahoo Finance that's offering latest update, reporting that at beginning of new year AriZona raised price of its 20-oz "tallboy" PET bottle from $1 to $1.25 in its core Northeast region. "We changed the price in certain markets at the beginning of this year," cofounder/ceo Don Vultaggio told news service in phone interview. Asked whether the hikes would be rippled out to other markets, he said, "Right now, we're not quite sure."
Our stroll thru Fancy Food show floor on Sun brought us in contact with new owners of pair of production facilities we've chronicled in past, a short-run canning line in LA and a retort plant in Tenn.
Asian bev players Alo and Ito En have long relied on production processes that preferenced plastic bottles. But increasing backlash to PET in corporate foodservice accounts, college campuses and other key channels has fostered a change, with both augmenting their canned offerings at Fancy Food Show in Las Vegas this week. Both also are coming off difficult spell during which pandemic-inspired spikes in ocean freight rates - by a factor of 10 or more - have crimped margins and forced painful choices on pricing, marketing and other issues. Thankfully, spot prices lately have subsided to pre-pandemic levels, tho contracts signed at higher levels still have a few months to run. Both seem to have kept brands growing despite the adversity.
Appearances by alcohol purveyors have been rare at Fancy Food Shows over the years. So it might have been jarring to see all the wines, spirits and RTD cocktails that were on view at this year's Winter edition in Las Vegas. Except that they were non-alcoholic, riding abstinence wave whose magnitude has shocked many in bev biz. Even some of the marketers themselves are surprised at how rich this lode has proved to be so far: Greenbar Distilling, venerable player in downtown LA, says more than two-thirds of its total biz now comes from its NA offerings. (We'd visited its tasting room a few years ago - nothin' wrong with its core alcoholic offerings.)
Specialty Food Assn is hosting winter edition of Fancy Food Show this coming week at Las Vegas Convention Center, 2d year away from its longtime home at SF's Moscone Center. Show floor is open Sun thru Tues. with plethora of specialty and gourmet food/bev items from around the globe. Registration is still open.
Legal advisory firm Venable has offered useful take on sweeping action that Federal Trade Commission has proposed vs non-compete clauses, assuring employers to take wait & see attitude. "It is doubtful that the Proposed Rule will go into effect before the end of the year, and it will likely be subject to fierce legal challenges, which could delay its rollout even further," co said in analysis of move. "It is also unclear what the Proposed Rule will look like when (or if) it is finalized. What is clear, however, is that the FTC is not abandoning this issue anytime soon." In proposing rule, agency has suggested it poses constraint on people's earnings power to tune of $300 mil a year.
Demonstrating very healthy growth on still-small base, NA beers jumped 21%, $63.8 mil to $363.7 mil last year. Closing in on 0.8 share of total beer $$ sales in NielsenIQ data for full yr, shared by Bump Williams Consulting and reported by our sibling newsletter Insights Express earlier today. But within this dynamic segment, some pretty big swings and share shifts. Heineken 0.0 remained #1 brand with 23 share of $$. But its growth slowed to 6%. And it lost 3.3 share.
Lotta PEP on CSD Side Lately: Revamped Zero Gets Super Bowl Spot; Starry Ready to Spar with Sprite
Newly reformulated Pepsi Zero Sugar "is embarking on an aggressive marketing campaign that will give away 10 million drinks and land it a spot in the Super Bowl," per AdAge. This is first in-game ad for Pepsi since 2020, as mag reminds that PEP main focus during big game has been marketing of its halftime show sponsorship, which is now in hands of Apple Music this yr. Beyond a Super Bowl ad, PEP said it will also be running new ads for Zero throughout playoffs over next few weekends. PEP will offer free Pepsi Zero Sugars during playoffs to those who text "FREE PEPSI" to 81234 or "FREE ZERO" to that number during Bowl. New formulation of Pepsi Zero "raises the caffeine to the same level as regular Pepsi while removing ginseng from the recipe," a spokeswoman told AdAge. Co said comprehensive assessment study found consumers regarded new version as more refreshing, tasty, having a real cola taste, smooth, able to pair with food. Improving flavor/sweetener tech seems to be encouraging range of bevcos to update core sku's, as Monster Energy just did in offering first zero-sugar cognate that truly matches flavor of classic green can entry (tho it still took years of tinkering).
The 25-year Hormel Foods vet Jeff Frank has been tapped to take over ceo role at Organic Valley dairy co-op from Bob Kirchoff, who'd announced his decision to retire last year. He'll hand over reins on Jan 23 and depart on Jan 31. For past dozen years Frank has run Hormel's MegaMex Mexican-food unit, with familiar brands like La Victoria, Embasa and Wholly Guacamole. Organic Valley board prexy Steve Pierson, a dairy farmer from Oregon, said that experience positions Frank well "to navigate the complex challenges facing small organic family farms." Organic Valley has estimated that 5,000 family farms could shutter in coming year, often after being abruptly dropped by major processors, as was case with 50 Penn farmers who joined co-op this past fall.
New year is getting under way with burst of new-store announcements from fast-expanding drivethru coffee chains as receding of pandemic shows no sign of stunting consumers' yen for that channel. Even as publicly traded Dutch Bros continues its very visible march eastward from Oregon base, several other up & comers have been enlisting franchisees and locking in new locations for their own concepts, in era where survey last Aug by World Coffee Portal found that 54% of consumers are content to get their coffee in their cars, not in-store. Colorado-based Ziggi's chain just announced it's enlisted its 200th franchisee, 6 years into effort to pursue that model. It now operates 63 stores across 15 states (Indiana as of this week), 55 of them franchisee-operated, and says it has 120+ additional units in development. Meanwhile, Nebraska-based Scooter's Coffee opened 500th US outlet last month as it guns for target of 1,000 stores by end of 2024. And Florida-based Ellianos Coffee is saying it will augment its current footprint of 30 stores with 100 more in "coming months and years," with first of what are anticipated to be 12 locations just opening in Jacksonville. Inspired by drivethru scene founders encountered in Pac NW, Ellianos is focused on Southeast for now.