Beer Marketer's Insights

Beer Marketer's Insights

POM Wonderful is moving from uplifting health claims to sexual enhancement in first national TV campaign, USA Today reported. LA-based co which has been in tussle with Federal Trade Commission over the health claims it makes, is taking different tack with pool of 3 ads, 1 of which shows snake-draped Eve trying to tempt Adam with a bottle of the antioxidant-rich drink. Co plans to spend $10 mil on campaign thru Nov, paper said. It quoted Univ of Wis prof emeritus as theorizing that co is trying to change the subject from embarrassing fracas over its claims, using ploy that may well prompt consumer trial.  
Count GuS (Grown-up Soda) among winners as hi-end brands vie for placement in Eataly, 40,000-sq-ft Italian megastore and restaurant cluster just opened by culinary icon Mario Batali in NYC. Founder Steve Hersh told BBI that GuS is 1 of only 2 non-Italian bevs to be served in diverse store, along with craft beer Dogfish Head. GuS Dry Cola is featured on all 5 menus, but Eataly has opted not to carry any major US cola brands. Separately, NY-based boutique soda brand has added Rogo Distributors in Hartford, Conn, as well as specialty food distrib Italco Distributing for Colo and NM, where it will focus on specialty channel, eateries and ski lodges . . . Bai coffee-berry-based bevs has completed its coverage in Conn, adding B&E Juice in Bridgeport and Tomassetti in Meriden to earlier established footprint of Rogo in Hartford.  
NBWA meeting boasted actively attended product showcase on Mon afternoon. Tho most of noise was made by dancing girls working Joose booth, quite a few NA entries were on display. AriZona (above) seemed to draw biggest crowds, but here's rundown on other exhibitors. (New Leaf Brands was also present; report on them from upcoming NACS c-store show.)

Dad's Root Beer Hits 100 Wholesalers; Biggest Voids in Northeast and Texas Dad's Root Beer Co signed up 100th wholesaler last week, putting it now in about 28 states as resuscitation effort by new owner, Kentucky beer wholesaler Heidinger, completes 4th year. Brand has done well in Walgreens and authorization at Walmart is anticipated next month, said prexy/ceo Keith Heidinger, whose daughter, recent college grad Andrea, has picked up key sales/marketing duties for brand group that includes other nostalgia brands like Bubble Up, Dr Wells and Sun Crest. Coming aboard next week, mainly via Bud houses, are Fla, Mo and Minn.

Tho brand needed some minor repairs at time of acquisition in Jan 07, "it has no baggage, except where'd you guys go?" Keith said. Among tweaks, co swapped aspartame for Splenda in diet entry, now #2, and put prominently on label that core root beer is "caffeine free." Unusual 1-liter bottle is best seller, echoing quart bottles of brand's heyday. Marketing support comes via Indy Racing League activities in key markets like Chicago (where brand started in 1937), St Petersburg, Fla, and Iowa. To minimize freight burden, co has broadened copacking network to include 4 primary locations now, in Evansville, Ind, Newcastle, Penn, Huntsville, Ala, and Tucson, Ariz. Co hopes to hit 150 wholesalers, with major remaining voids in Northeast and Tex, Keith said. As a wholesaler himself, Keith says he goes out of his way to offer reasonable contracts, at perpetuity and with no sales quotas. Co is already starting to plan special packs and other hoopla for brand's 75th anniversary in 2012. Brand info at dadsrootbeer.com.

Liquid Lightning Adds Florida Houses for Energy Line and Herbal Mist Liquid Lightning, ambitious new co that's both brand owner and distributor working mid-Atlantic states, exhibited revamped Herbal Mist yerba mate line, in which it holds stake, while also pushing energy line Liquid Lightning in cans and bag-in-a-box. Herbal Mist has signed on pair of Bud houses in Fla, Carroll and Gold Coast Eagle, as well as Schwarz & Co in Baltimore, to buttress Liquid Lightning's own distribution from Dela north to NY metro. These days it carries intricate line-drawn label and is positioned as "Tea with Yerba Mate," in 6 flavors. In NY, it's employing pair of houses, Exclusive and Good-O, to work new authorizations in Duane Reade drug chain and Food Emporium groceries. Meanwhile, Liquid Lightning has similarly signed some Fla Bud houses. On retail side it's in Walgreens, shortly breaks into Duane Reade and is in talks with likes of Rite-Aid and 7-Eleven, said ceo Darren Matik. He said bag-in-box effort goes for brand appeal on-premise, backed by bands and DJ's that co has in its orbit, rather than as no-name entry that unscrupulous bar owners might substitute for Red Bull-branded cocktails. Brand info at DrinkHerbal.com and LLEnergy.com.

Roaring Lion Adds 30 Distributors in 2010 Free of earlier litigation with Red Bull and in 10th year of biz, Roaring Lion has grown biz to 135 distributors (30+ signed this year) serviced by staff of 17 territory mgrs and sales reps, said operating member and ex-Red Buller Sean Hackney. It's just added sugar-free extension to 2-yr-old canned line, while bag-in-box has added blue-raspberry-flavored Euphoria sku, which includes maca among ingredients. Co is considering launching an energy shot, Sean said. It also has had bottled line out 3 yrs. Brand info at RoaringLionEnergyDrink.com.

Relaunched Ol' Glory Now in 12 States Relaunched last year, Ol' Glory value energy line is lookin' to play on 3 points of difference: 99 cents pre-priced, lighter, soda-like taste than Red Bull, and donating part of proceeds to Operation Home Front to aid returning service people. American Beverage regional sales mgr Chris Basak said 16-oz cans emblazoned with stars & stripes are now in 12 states via 40+ distributors, in states like Okla, where it got started, and Tex, Calif, Ill, Kan and Mo. It's mainly enlisting beer houses tho 7 Up bottlers in Nev, Okla and Mo are in mix. Low price puts it in realm of Rip It, Slap and Jolt energy lines. Brand info at americanbeveragellc.com.

Bottled Water a Goner? Iceland Spring Says It's in Strong Growth Mode Tho broad perception remains that hi-end bottled water is challenged segment, some players say they're managing consistent growth despite economic and environmental headwinds. Count Iceland Spring among 'em: tho still small, brand is up nearly 20% this year, including 25-30% gain in Walgreens and nearly 40% in natural, mainly Whole Foods, said owner David Lomnitz. Trick has been focusing not on distant provenance of water but rather health benefits flowing from hi pH level, which makes it excellent accompaniment to dining. Brand's getting served at places like Rachel Ray show and Oprah Winfrey's My Own Show reality effort. David is optimistic co will get to break-even in 2011.  
Publicly traded Celsius Holdings, which has been focused on revving topline in past year but trimmed back its earlier-expressed goal of $25 mil in sales, has brought on Zenith International's Ross Colbert "to evaluate strategic options and avenues for growth." Delray Beach, Fla-based co said Zenith will focus on offering options in realm of increasing distribution, market expansion and strategic capital alternatives. In past year Celsius, funded mainly by core investor and former Rexall Sundown chief Carl DeSantis, has repositioned line away from straight calorie-burning message in favor of fitness, dialed up marketing and weathered inquiry into marketing claims by National Advertising Division in reasonably good shape. Sound clinicals and broad distribution in major retail chains are among reasons "we believe there are numerous companies who would be interested in partnering with Celsius," said Ross. "In a difficult market you've got to look at all your options." Said ceo Steve Haley: "We believe that the fastest path to exploit this foundation is with a strategic partner and the experience and contacts of Zenith will expedite this process."  
  After provocative speech to big room at NBWA convention last year, Boston Beer ceo Jim Koch no less compelling in address to his distribs at this year's meeting. Most attention-getting: he showed cheapo slide from cell phone camera of "dirt hump" in Galilee, Biblical site of Armageddon, or end of world. What's that got to do with beer biz? Sam Adams beer creator wanted distribs to think about what next "game changer" would be. Pointed out that Anheuser-Busch InBev biz model is to generate cash flows, in US and elsewhere, for next big deal. Then presented 2 scenarios he called "more likely than not": (1) before 2015, ABI buys Pepsi, or (2) if that doesn't happen, before 2020, ABI buys SABMiller, spins off MillerCoors, then buys Coke. (Okay, take a breath, then re-read.) ABI will have the cash do it, Jim assured, and will not "just sit on it," as BBI sibling publication Insights Express reported earlier today. Jim's scenarios may be even more plausible with statement by Grupo Modelo chief yesterday that Modelo not interested in selling to ABI, per Reuters report. He told Mexican paper that Modelo is "controlled by a group of Mexican families. There is no desire to sell." Seems there's no way to avoid talk of beer/soft drink convergence these days.
Lotsa brands covet a chance to get into mega wholesaler Columbia Distributing, with its reach throughout Wash and Ore states. But Thomas Kemper Soda is goin' in other direction: pulling out, in order to move to 6 smaller houses, mainly Bud shops, that might be able to offer greater focus on non-grocery accounts where regional soda line has best chance to thrive, said prexy/ceo Bill Germano. That's big move, considering that region accounts for 30% of Portland, Ore-based co's biz. (Columbia is also believed to be minority shareholder, tho co won't confirm.) Newly aboard are Bud houses K&L in Seattle, Crown Distributing (partly owned by Anheuser-Busch) to north, Morgan in Portland and Western Beverage in western Ore. Also in mix for southern Wash are 2 MillerCoors houses: Marine View and Stein. Bill figures they offer better chance to get Kemper into restaurants and other non-grocery accounts. Move comes as Kemper has pulled back some on its national geographic footprint on grounds that most regions are well-served with local entries; that makes core market that much more important.

Meanwhile, its Purely Natural Soda line continues to garner solid reception. Recall that's become main vehicle for national expansion now. After starting in Pac NW region of Whole Foods, it's added other regions, including Northern Calif, Southwest, Tex and Mid-Atlantic. Fred Meyer is among other chains to come aboard, merchandising line in natural cooler even as core line remains in soda aisle, as well as Andronico's in NorCal and Sunflower Markets in Southwest.  
Can hugely popular AriZona brand stretch into coconut water? Woodbury, NY, co is about to find out, prepping coconut entry for intro early next year. Interviewed on NA product showcase floor at this week's Natl Beer Wholesalers Assn meeting in Chicago, evp Rob Marciano confirmed it's got line under development, possibly in 16-oz resealable can that will be lightly endorsed as being from AriZona, maybe using vertical "ghost" logo employed for Arnold Palmer line. Tho segment has been struggling thru sourcing squeeze in 2010, Rob said supply seems to be no issue for 2011 and Ferolito, Vultaggio & Sons is good to go.

Separately, Marciano also had what may come as bad news to flock of newer big-can rivals in iced tea segment who're likely struggling to make their value-priced entries profitable: AriZona Iced Tea has got its costs enough in line to be able to lock in 99-cent pre-price for another year on core 23-oz can. Resealable 20-oz bottle will stick with its $1 pre-price, Rob said. That promises no relief for any rivals who may have been hoping for some pricing flexibility if AriZona abandoned hot 99-cent price point. Recall that it only briefly diverged from that a coupla years ago, putting small # of unpriced cans into market, but moved back to 100%-prepriced items pretty quickly (BBI, May 13 09).

Arnold Palmer Moves into Alcohol Sector Booming Arnold Palmer half-and-half line, meld of tea and lemonade that has inspired flock of competitors, is entering alcoholic side with Arnold Palmer Hard Iced Tea Lemonade, out in 12-oz longneck beer bottles, sixpacks and 32-oz ceramic-like jug familiar from Mississippi Mud beer entry. Evp Marciano said it was logical move, considering that many consumers put booze into their half-and-half; AriZona earlier had launched cocktail mix under brand. Malt-based entry is intended to go right after fast-growing Twisted Tea and Mike's Hard Lemonade, targeting DSD houses looking for alternative. It's got calorie count of light beer (hence, packs scream "light") and "hard" is prominently branded on barrel of bottle and neck, as well as secondary packaging. That should avoid criticism that has hit others who've tried to move NA brands into alc space, such as Rockstar Energy with quickly discontinued Rockstar 21. Imagery of golfer is also completely different. Rob said he's optimistic about potential, given big displays that retailers were quick to erect in market served by Ohio distrib Buckeye, which has had new line about a mo now. It's entering NY via company-owned distribution operation, but Rob said he's open to enlisting other houses that could broaden reach. Brand info at ArnoldPalmerHard.com.

Meanwhile, core Arnold Palmer line continues triple-digit growth, now adding Southern Style Sweet Tea version. Last year it added zero-cal entry to mix, and by now brand is in all packs employed by core AriZona tea line, from big cans to PET bottles in 12, 16, 20, 32 and 64 ounces. 
Natural foods vet Paddy Spence, who created SPINS market research provider that brought scanner data to natural channel, has teamed with Northwood Ventures to take control of stevia-sweetened soda maker Zevia LLC and install new management team. Spence, who earlier was exec on Kashi cereal and Nature's Gate personal care brands, is now chmn/ceo while Silk soy vet Robert Gay is svp sales & marketing . . . Stevia processor GLG Life Tech said Brian Palmeri resigned as prexy effective today, replaced by founder/ceo Luke Zhang. Brian retains board seat and post as vice chmn. No reason was given for departure . . . South Atlantic Canners, allied with Coca-Cola Consolidated bottler, is investing $4.5 mil to expand warehouse in Bishopville, SC, by 50% to 300,000 sq ft. Preliminary work should begin in 4th qtr.  
Uncommonly congested fall calendar this year will see beer wholesalers meeting in Chicago, c-store expo in Atlanta and natural foods expo in Boston, all in space of 2 weeks. Opening this Sun is Natl Beer Wholesalers Assn annual meeting at Chicago's Hyatt Regency, which includes product demo showcase on Mon afternoon and Sun afternoon panel presentation by editors of BBI and sibling publication Beer Marketer's Insights on challenges confronting beer wholesalers. Product showcase includes brands like Roaring Lion energy drinks, New Leaf teas and lemonades, Fusion antihangover drinks and Dad's Root Beer. Info at nbwa.org.

In Atlanta, at Ga World Congress Center, show floor opens Wed noon for 3-day Natl Assn of Convenience Stores expo, which has become major annual platform for mainstream bevs, with array of soft drink conglomerates, major indie brands like 5-Hour Energy and Muscle Milk, and dozens of emerging brands, including loads of energy drinks from Monster to Hydrive and WhoopAss. Info at nacsonline.com. And following week, opening Thurs, is Natural Products Expo East, better-for-you bevs platform marking its last year in Boston before returning to Baltimore in 2011. Tho show has faded in recent years even as main Expo West booms early in year in Anaheim, bev roster will include likes of Cell-nique, Dox Cardio Water, Dry Soda, Give Water, Inko's White Tea, Marley relaxation line and all 3 key coconut water brands. Info at expoeast.com.  
Skinny Nutritional has added another Dr Pepper Snapple house to DSD network for Skinny Water, and it's a big one: Columbia Distributing. Megadistributor, whose NA brand roster runs from DPS brands Snapple and 7 Up to Red Bull and Fiji Water, will pick up zero-calorie line for entire territory in Wash and Ore. Columbia, which also has big biz in beer and wine, has 250 sales reps and fleet of 230 trucks. New partnership means "we now have the entire West Coast covered and can begin to expand into the middle of the country," said Chris Wilson, Skinny's vp of DSD sales. As reported (BBI, Aug 24), co has been tilting increasingly toward DPS network, with Columbia the 9th to come aboard. A couple of those are believed to be DPS-owned operations.