Beer Marketer's Insights
POSITIONING: Preventiv Water Rebrands as EVR
Queen Latifah is hopin' to pull off a 50 Cent - swapping her celeb appeal for a stake in an early-stage bev in hope of cashing in down road. R&B mag Singersroom said Grammy-winning singer's Flavor Unit Entertainment has bought into New York Spring Water, marketer of cap-activated VBlast enhanced water, in an effort to expand NY-based co internationally. She and biz partner Shakim Compere will work via marketing co United Entertainment Group to push line that's garnering some shelf space at 7-Eleven stores. VBlast plays at less-premium end of segment being staked out by range of cos, notably Activate. Recall that rapper 50 Cent parlayed association with Vitaminwater into sizable return, tho others who've gone down same road have had a lot less to show for effort: Chaka Khan, remember, was equity holder in lurid flameout Purple Beverage.
Progressive Slate prexy Peter Murray derided complaint as nothing more than "competitive tactic," adding, "These are all nonpartisan, nonprofit charitable organizations." He said projects his groups are looking to support "have no political or advocacy or lobbying elements to them whatsoever." Pepsi response: "We evaluated each idea solely on the basis of the merits, and each met our guidelines, which state that an idea cannot support or endorse any political candidate or party," said rep Peter Land.
Equipment-jammed facility outside Pittsburgh that was at heart of monumental LeNature's fraud is continuing to star in tangled plot line. Now grocer Giant Eagle, which took over plant 3 yrs ago in order to self-produce its private-label bottled water and iced tea, has bailed on effort, shuttering plant and laying off scores of workers after earlier downsizing in Aug. Oddest part of latest development is that, while grocer has been known to be struggling to operate plant effectively, it's bailing just as it seems close to deal to sell it to nearby Castle Co-Packers, which would get upgrade over its own maxed-out New Kensington facility and potentially win chunk of Giant Eagle copack biz in bargain. Not clear what's holding up Castle deal, tho quest for state incentives is believed to be issue. Meantime, 86 workers are hittin' the bricks after 32 were laid off in Aug, per local reports.
Recall this was 1 of 2 LeNature's plants that prior owners stuffed with state-of-art equipment, some of it never uncrated, and used as basis for massive fraud that eventually landed them in jail. Other plant was in Ariz. Among shenanigans, some of equipment lines were used as security for multiple loans. Chestnut Ridge operation outside Pittsburgh became object of controversial tussle between Cadbury Schweppes Americas Beverages and Giant Eagle, which bankruptcy judge eventually found to have muscled out Cadbury via threats to drop its products from its stores (BBI, Aug 4 07). That cost Giant Eagle a few mill in penalties but it still got control of plant, unloading some equipment and using rest to bring private-label production in-house while seeking outside co-pack biz. By several accounts, it hasn't proved adept producer.
Giant Eagle rep would only tell Pittsburgh Tribune-Review that "as the beverage industry continues to evolve, the company has needed to meet a number of challenges, some of which were unexpected." In other words, stuff happens. Castle's Dworkin confirmed to paper that he's in talks to buy plant, following unsuccessful effort in 08 to buy former Rolling Rock brewery in Latrobe from City Brewing. Brian told BBI he couldn't comment until there was more concrete development to report. Recall, he took over ramshackle plant in New Kensington that was white elephant for part-owner Honest Tea and turned it into go-to house for smaller brands, upgrading equipment and adding new capabilities such as shots.
Study out of Univ of Texas found "children who practice healthy lifestyle habits" by eating right and exercising regularly "may be negatively impacting their health because they tend to consume large amounts of flavored and sports drinks containing sugar," reported Newswise. "Children and parents associate these drinks with a healthy lifestyle despite their increased amount of sugar and lack of nutritional value," said Nalini Ranjit, asst prof of behavioral sciences at UT Health School of Public Health. They found that "flavored or sports beverage consumption increased with levels of healthy food consumption and physical activity compared to high soda consumption" among students in grades 8-11. Some 28% of these students in Tex were consuming sugar-sweetened bev at least 3 times a day. Among boys, study found consumption of soda increased from 8th to 11th grade even as their soda consumption remained steady, girls' soda consumption remained steady even as consumption of sports drinks declined over those years. Results "suggest there is a popular misperception" that sports drinks are consistent with a healthy lifestyle. Study, which will be published in Oct issue of Pediatrics, recommends students and parents educate themselves on sugar content of bevs. "Consuming large amounts of flavored and sports beverages could undo the effects of all that exercise," argues Ranjit.
Review of Celsius' print and Internet marketing activities was part of initiative NAD has cooked up with supplement lobbyist Council for Responsible Nutrition to step up monitoring activities; in Celsius' case, as NAD noted, co had "modified most of the challenged claims" before review began. Still, after evaluating 6 clinical studies - 3 with folks who exercised, 3 with folks who don't - NAD "determined that certain claims, as modified, were supported by the advertiser's evidence, as long as those claims are presented in the context of advertising geared to people who exercise and make clear that achieving the promised benefits of the product requires exercise." No problem there: brand already has evolved message, including in newer TV ads, to stress use as pre-workout fitness drink with tagline, "Your Ultimate Fitness Partner." "We're particularly proud that Celsius has passed NAD's exhaustive review of our claims, considering the scrutiny that product claims are getting these days," said Celsius ceo Steve Haley, adding that it validated extensive investments in clinical research that Delray Beach, Fla, co has undertaken.
In future, tho, Celsius' claims will be a lot less quantitative. Among its recs, NAD asked co to stop using specific percentage claims of "78% greater fat loss," "114% greater decrease in body fat" and the like "because they are based on the results of a single study and overstate the benefits achieved."
Rockstar is ready to enter realm of 12-oz slim cans with 2 new sku's that it is likely to be pouring at upcoming NACS c-store show: a lower-cal drink targeting women and another offering double the caffeine. Female-targeted sku will be packed in pink can and offer lightly carbonated liquid with pink lemonade flavor. In dainty touch, can will carry attached drinking straw. Rockstar 2X, also with lower calories, will offer double the caffeine level per oz. Packaging apparently isn't final yet. Twin entries rep co's first move into 12-oz slim cans already employed by rivals Red Bull and, more recently, Monster. Rockstar's among cos takin' a pass on exhibiting at NACS show opening next Wed, but is expected to have new items ready to pour at booth of its main distribution partner, PepsiCo.
Done Deal: Shareholders Approve Monumental Coke/CCE Transaction; Closing Likely within Days
As anticipated (BBI, Sep 24), co hopes to amplify momentum generated by Celebrity Apprentice tie-in by latching onto Amazing Race, which pulls in far greater ratings. Tho format is not as amenable as Apprentice to inventing new flavors for retail - which proved immensely successful this year - DPS brass said they're planning ways to ratchet up concept in 2011 after Apprentice-related buzz helped set brand back on path of quarterly double-digit growth. For starters, brand will be visible throughout entire show season, rather than popping in during final episodes as with Apprentice.
At hi end, co has bowed to reality of marketing nominally superpremium subline that's not much different in formulation, size or price from core brand by folding 5 entries from 17.5-oz subline into 16-oz mainstay and dropping rest. Making migration are Green Tea and Diet Green Tea, in 6-packs as well as single bottles, and Raspberry White, Noni Berry and Peach Mangosteen, in single bottles only. Highest-end line had always struggled, but revival of core line, and accompanying price rise, reduced need to maintain superpremiums. And DPS is finally acceding to requests from wholesalers in regions where sweet tea is major segment by adding Snapple-branded sweet tea in 16-oz and 64-oz bottles, move that should help in co's revived efforts to make Snapple truly national brand rather than heavily skewing to East and West Coasts.
Issues remain at low end: coldfill plastic bottles have struggled, priced too high to effectively compete with Lipton or AriZona, even as distributors in brand's most developed markets worry that preservative-laden formula undermines all-natural appeal that makes hotfill line special. That goes double for pre-priced 79-cent 16-oz cans, which some distribs describe as not very drinkable and not competitive anyway vs 23-oz AriZona cans pre-priced at 99 cents. On positive note, greater focus on 64-oz bottles in grocery has panned out well as value offering, at price of $1.99-2.49. DPS has made it clear it's not ready to walk away from value platform, given size of coldfill segment, but apparently hasn't offered many specific solutions so far. Still, core line seems far healthier now than in quite a few years.

