Beer Marketer's Insights

Beer Marketer's Insights

It may have been counterintuitive move for guy long on brand side, whether Pepsi, Red Bull or Talking Rain. But a year into launching his own distributorship in Palm Springs area east of LA, Bruce Trent has grown Trent Beverages operation to 2 warehouses, 12 trucks and staff of 18, serving expanded portfolio that recently added likes of Mountain Valley Spring Water, BSN/Endorush brands, array of supplements, and Popchips snack brand. They join portfolio initially built on brands like Xingtea, Xyience and Hint. Also in mix are Sweet Leaf Tea, Alo aloe drinks, Hi Ball energy drinks and Drank relaxation line. Other discussions involve likes of Nesquik, Langers and Voss. Tho his days often run from 6 AM to 6 PM, Bruce says he expects to hit break-even barely a year after launch and is thoroughly enjoying ride. He acknowledged working with former Prestige chief Greg Zail as part of new DSD coalition (above) but declined to offer details, deferring to Greg.

Meanwhile, Bruce reporting progress on Gleukos brand of carbohydrate drinks that he partly owns. It's augmented initial pouches with 20-oz PET bottle, added Pomegranate and Blueberry flavors and secured new funding from single individual investor, whom Bruce declined to identify quite yet. Distribution network includes Straub, Markstein/San Diego, Ace Beverage and GBL in Southland, as well as Columbia Distributing in Pac NW. Current investors include former Johnson & Johnson prexy Jim Lenehan and former Coca-Cola Enterprises prexy Terry Marks. Info at gleukos.com.  
Pre, RTD prebiotic line that's looking to move digestive health out of dairy set and into main bev aisle, is revving up its activities, even as it sticks for now to its Calif footprint. It's converting stevia-sweetened 10-calorie line to zero calories, has added powder mix to matrix and recruited Christie Communications to ramp up cause-marketing efforts under rubric "Promote, Restore, Enhance." Of course, kombucha seeks to offer similar bennies in bev set, but Pre is cheaper (at $1.99), has nothing floating in it and doesn't prompt worries about alcohol content, noted founder Scot De Lorme, who was encountered at last week's BevNet Live event in Santa Monica, Calif.

Scot earlier launched healthier-soda co Bahia and then vitamin supplement 24c, which was purchased by Jones Soda as platform for entry into enhanced-water segment, effort that it recently brought to a close in forbidding, price-driven segment. In Pre effort he said he's partner with Coast Brands' Bob Groux, who is part owner and consultant, and exploring other concepts, too.

Bottled Pre Probiotic Enhancer line can withstand hotfill process, yielding shelf-stable product that maintains prebiotic benefits stemming from inclusion of Jarrow Formulas' clinically documented prebiotic blend. It's out in Acai Acerola, Passion Orange Guava and Pomegranate Blueberry flavors, at 50 calories per serving, as well as stevia-sweetened 10-calorie subline in Peach Mango, Pomegranate Yumberry, Pomegranate White Tea and Pomegranate Blueberry flavors. That subline's shortly moving to zero-calorie, Scot said. Powder-based Synbiotic Drink Mix, which is just shipping, offers additional benefit of including probiotics in blend, since it doesn't have to traverse hotfill process, yielding combination that's said to maintain optimal digestive balance.

For now Orange, Calif-based co is focusing on Golden State, with distributors of RTD product that include Haralambos, GBL, Straub, Markstein/San Diego and, up north, Mussetter. Line has cracked Ralph's, Albertsons, Gelson's, Bristol Farms and Whole Foods stores in state. Scot said he's trying to figure out what DSD approach makes sense for the powders.

"Promote, Restore, Enhance" effort ties together Pre's prior involvements in 1% for the Planet and Surfrider Foundation and extends them to encompass environmental, community and lifestyle connotations of phrase, in manner that should tightly support co's retail activities.  
Purity Organic, RTD juice line marketed by SF-based organic tree-fruit grower, has concluded anticipated alliance with Sunsweet, opting for copacking relationship that provides equity earnout to Sunsweet based on volume that moves through its plants. The 2 cos were said to be discussing alliance by attendees at recent produce show in NY (BBI, Nov 12). Tony Gerst, initiative leader at Sunsweet, said Purity Organic will receive "advantaged" copack rate for sku's that meet Sunsweet's minimum volume thresholds, with Yuba City, Calif-based grower accumulating equity as alliance progresses. Production will begin at co's Yuba City plant and, if warranted, add co's NJ facility down line. Tony said new allies will also seek other ways for Purity to tap into Sunsweet's infrastructure - say, by having its sales force pitch brand, where appropriate. They're testing that idea at A&P grocery chain in metro NY, Gerst indicated. Purity founder Greg Holzman deferred to Tony in discussing plan. 
Joint Juice Inc, which has always positioned its RTD and powder lines as more appealing alternative to "horse pills" that have long dominated joint-health segment, is entering shot realm now with Joint Juice Easy Shot supplement. New item, breaking Jan 1 in vitamin aisle of Walgreens chain, offers day's supply of glucosamine plus chondroitin, vitamin D3 and vitamin C. It will be offered in 20-oz bottle that contains more than 2 weeks' supply of daily regimen of 1.25 oz, as measured from bottle cap. SF-based co says shot mixes well with bevs like orange juice. SRP is $18.99. Item will also be available online from Joint Juice itself or drugstore.com.  
While a 40% tax on sugared bevs and juices would raise around $2.5 bil annually in US, it would only lead to annual weight loss of about 1.3 lbs per person, per study published in Archives of Internal Medicine. But even with such modest progress in weight loss, Bloomberg noted that author Eric Finkelstein said such a tax should be considered anyway, since monies raised would be used for anti-obesity education efforts. Researchers also noted that they favor a tax on all sugared bevs, not just full-calorie sodas, because "it makes it more difficult for consumers to substitute similar products to avoid the price increase," reported Bloomberg. Study found such a tax mainly would affect middle class, since wealthier consumers can afford price increase while poor households "would get around tax" by using generic brands.

Meanwhile, recent poll conducted by Concept Catalysts for BeveragePulse.com found 60% of Americans "are concerned about the negative health impact of the beverages they drink." This study of "over 500" Americans also found that currently 74% don't think bevcos care about their health. "Our research shows that consumers' health concerns are having an impact on what they drink," said prexy Bob Faulkenberg. "Some categories will decline, others will grow, and there will be opportunities for new beverages that better meet consumer preferences."  

Thomas Kemper Sodas is heading into stevia sweepstakes with 3-flavor canned line that melds stevia, erythritol and other ingredients under brand name Thomas Kemper Naturally Diet. Zero-calorie subline will go into 12-oz cans emblazoned with big zero on front panel, with Kemper logo snugly set inside. Line, in development well over a year, debuts in Cola, Citrus Bliss and Berry Passionate flavors, said Bill Germano, prexy of Portland, Ore-based co. Citrus Bliss melds grapefruit, lemon-lime and spices in light-citrus flavor somewhat akin to Fresca, while Berry Passionate melds 4 dark berries with passion fruit. Even before formulation was complete, line had already been accepted in some Whole Foods regions, said Bill, going out in 6-packs at $4.99-5.99 price range. It will start shipping next week.

Background: Nutritionally Aware Demo Makes Allowances for Taste Tradeoff of Stevia - So Far Recall that Kemper was relatively late to move beyond HFCS in core line, but has seen its naturally sweetened Purely Natural do well. Stevia was conundrum: SPINS data shows that any taste issues of current stevia-sweetened entries have not been enough to derail repeat sales among consumer cohort that is intently attuned to calorie issues, tho that won't last forever, Bill noted. Kemper was able to do better on flavor by tapping undisclosed new source of stevia, carefully designing sweetener blend and selecting flavors that minimize licorice burn. Premium propensity of segment gave co enough margin to use best ingredients, and choice of cans, besides opening up new consumption occasions, put enough separation vs core glass-bottle line so that difference from rich taste of full-calorie line won't come as disconnect. Tho Kemper until now had been strictly glass-bottle brand, Bill said co took comfort from fact that cans have done so well at premium, craft end of beer biz in recent years.  

Search for holy grail of natural sweetener that works acceptably even in CSDs seems to be entering new phase, as PepsiCo claims it's near breakthrough, Coke lines up crucial ally and stevia makers Wisdom and GLG continue to scale up. In recent weeks, Pepsi has been suggesting that sweetener breakthrough tying sweeteners to flavor enhancers is imminent, most recently at Beverage Digest conference in NY yesterday. "We have a lineup of products - I can't tell you what they are or what they're going to do in the marketplace, but we are very, very close," PEP chmn/ceo Indra Nooyi told conference attendees, per Reuters. "We want to be out there with a product that is outstanding, not one that is just good," she added, indicating that breakthrough would meld sweeteners with ingredients that balance impact of those sweeteners, say by cutting short aftertaste. That's been particular issue for CSDs, tho PEP has done well enough with stevia in noncarbs like SoBe Life Water and Trop 50.

To advance effort, PEP has previously teamed with researcher Senomyx, move that Coca-Cola countered late last week with its own alliance with Chromocell Corp of N Brunswick, NJ. Co focuses on "extracts and ingredients from fruits, herbs and vegetables for unique ingredients with desired taste qualities," said Chromocell ceo Christian Kopfli. Meanwhile, stevia cos are getting ready for boom in demand. Vancouver-based GLG Life Tech Corp this week signed joint venture deal with China Agriculture & Healthy Foods Co Ltd for sale and distribution of zero-calorie food/bev products in China that are sweetened with GLG's stevia extract products. New venture dubbed Dr Zhang's All Natural & Zero Calorie Beverage & Foods Company (named for GLG founder) is owned 80% by GLG and 20% by CAHFC. Also, Wisdom Natural Brands, marketer of SweetLeaf stevia, just opened new plant in Chile and claims "several large brands are rolling out with our branded ingredients from early 2011," per letter from svp Angus Flood. 

For brand owners looking to crack tough Southern Calif market, things are gettin' even more interesting. At time many brand owners are intrigued by promise of Coast Brands distributor coalition, former operator of Prestige Sales seems to be pulling together rival DSD coalition to serve region. Greg Zail, whose shop was large and long-serving Red Bull distributor before having brand pulled this fall (BBI, Sep 16), has sold off his other brands, dissolved operation and segued to role as point person for shops such as Straub, Classic, GBL, Markstein and Trent Beverage in seeking NA brands that might employ group to crack Southern Calif market. In doing so, they're shaping up as alternative to Coast Brands network, which has harnessed houses like Haralambos and 5 Star into informal network similarly promising deep retailer penetration in crucial birthing ground for altbevs. While Coast charges retainer and volume commission and has ambitions of expanding nationally, alliance centered around Straub and Classic seems less structured but, like Coast, claims to be able to offer strong push in getting new brands seeded in regional chains. It is in touch with distribs in northern part of state, too.

Plan seems to have been pulled together in helter-skelter fashion since Red Bull termination, with not all brand suppliers to Prestige in the loop as Zail proceeded, and some details remain sketchy. In essence, tho, seasoned operator Zail will serve as consultant to Classic, Miller/Coors house serving LA and San Bernardino Counties, and Straub, Bud house serving Orange and Riverside Counties. "Two first-class organizations, with seamless boundaries," Greg told BBI. Recall that Straub earlier dissolved distribution partnership with Coast Brands founder Bob Groux, maybe making this little bit of grudge match. Apparently also in mix are GBL, serving San Fernando Valley, and Trent Beverage, serving eastern area including high desert, and Markstein in San Diego. Among Prestige brands that seem to be seguing to Classic and/or Straub are Nesquik milk brand, Popchips snack brand and Xyience energy brand, but several choice brands have opted to go to Haralambos, including fast-growing Calypso lemonade line, Thomas Kemper boutique sodas and hot Stone craft beer brand. Others, like Voss water, are still working out new arrangements. (Related stories on Trent Beverage, Thomas Kemper Sodas below.) More on this one as it develops. 
Honest Tea founder Seth Goldman, about to see Coke move to full control of co, knows too much by now to be keen on bev startups as realistic undertaking. "Run away," he opened keynote presentation titled "Build Out, Sell Out or Flame Out." Asked about investment views, he replied: "I can't imagine a higher-risk sector to invest in than the beverage business." Purportedly honest exec was as straightforward as he could afford to be on other issues, too. Asked whether he's still driving a van, as in early days, Goldman replied: "We still have vans" . . . On panel with Switch Beverage's Maura Mottolese, New Leaf founder/ceo Eric Skae acknowledged that "most aggravating" part of his days at home "is when my 11- or 13-year-old asks for a dollar for a Switch." 
Reed's Inc said it expects 2010 year-over-year revenue growth to exceed 30% as sales continue to grow in both its branded and private-label operations. That will handily meet prior guidance of minimum 20% growth for year. Recall that private-label push had gotten slow start out gate, but "we predicted an acceleration of private label business in the second half of 2010 and that has in fact occurred," said founder/ceo Chris Reed . . . Xyience has added UFC athlete Jon "Bones" Jones to its stable of endorsers, joining roster stacked with UFC luminaries like Wanderlei Silva, Matt Serra and Dan Hardy. Jones was named Breakthrough Fighter of the Year at World MMA Awards a week ago. Fertitta bros own both UFC and Xenergy marketer Xyience.