Beer Marketer's Insights
CLARIFICATION: Hint's 30% Sales Boost Is Across Total Food Channel, Not Just Natural Tier
BEV FORUM: Trebilcock Shows Some of DPS' Digital Media Ploys, in Quest of Greater Engagement
On 7 Up brand, DPS went after Hispanic millennials via electronic dance music push that enlisted A-list DJ Tiesto and 6 up-and-coming DJs for yearlong promo dubbed 7X7Up that kicked off in late Mar at Ultra Music Fest in Miami. Just 30 days into effort, relevance had risen 58% among that demo, and that group's time spent with brand has hit 26 minutes per session. Retweets that weekend exceeded those of fellow partners Heineken and Red Bull combined, Jim contended.
And behind Diet Dr Pepper, co targeted light and medium users earlier this year via collaboration with programmatic media buyer Rocket Fuel and AOL, serving up ads in pre-shop phase and monitoring purchase conversion. Small-scale effort yielded 8% volume gain, and purchase frequency gain of 7%. "So we know it works," Trebilcock said. The task now is to undertake effort more frequently to drive scale that's meaningful for such a big brand. He was speaking at annual conference co-sponsored by research house/consultancy Beverage Marketing Corp and Beverage World mag.
Meanwhile, there are signs that co is scrambling to address separate issue flagged by some online complainers: drinks that are off-tasting and off-colored in ways that may not be connected to stevia change. Co is said to be investigating whether funky taste of its XXX sku may be linked to beta carotene ingredient or vitamins incorporated in one of its most popular sellers, so-named for its "triple antioxidants" formula. And some reformulated flavors, including Rise, seem to be on shelves in varying colors. For co that's anxiously striving to turn around skidding sales, these are difficult issues to confront all at once.
It's long been successful marketing strategy in bevs: latch onto trendy ingredient like acai or pomegranate, incorporate it into brand in minute quantities that don't overly strain taste profile or production budget, then ride wave of consumer excitement to sales growth. But experts say today's Supreme Court ruling allowing POM Wonderful to proceed with suit vs Minute Maid may well prompt flurry of reformulations or repositionings among bev marketers who fear being more easily challenged by rivals whose products contain more meaningful ingredient content.
This was case, recall, where POM targeted minute amount of pomegranate (0.3%) in brisk-selling offering from Minute Maid labeled as "Pomegranate Blueberry Flavored Blend of 5 Juices." High court's 8-0 ruling (Justice Stephen Breyer recused himself) had centered on technical issue of whether false advertising suits by rival under Lanham Act are superseded by FDA's jurisdiction over misbranding, as defendant Coca-Cola had argued. By siding with POM, justices remanded case back to trial at lower court. In his opinion, Justice Anthony Kennedy cited Coke "practices that allegedly mislead and trick consumers, all to the injury of competitors." He'd signaled that view during oral arguments, calling Minute Maid label "misleading" and "deceptive" and readily acknowledging that he himself had been duped as a consumer. "Don't make me feel bad," he said at time, "because I thought that this was pomegranate juice."
Dan Silverman, an LA-based partner at Venable LLP who'd worked on suit in previous role as in-house counsel for POM Wonderful, told BBI that ruling "should be a wakeup call to manufacturers" who should now regard FDA labeling regs as a "floor but not a ceiling." Narrow compliance with regs no assurance that products aren't still deceptive to consumers. That said, Silverman doesn't expect a flood of labeling suits under Lanham Act, which more commonly underpins suits brought over claims. But outcome affirms that FDA, with priority on safety, is not final word on labeling. He believes that consumer class action suit filed vs KO over same issue had been stayed pending appeal, but now may get back on calendar.
"Food and beverage companies should really start rethinking their labels at this point, to the extent that they are relying on the current guidelines that allow for the kind of language that Coca-Cola has been employing," lawyer David Ter Molen, author of Food Identity Blog, told USA Today.
POM of course has been uncommonly litigious in defending its 100%-pom-juice core offerings against rivals with minimal pom content, going after Coke/Minute Maid, Tropicana, Ocean Spray and Welch's in suits. In other 3 cases, lower-court judges sided with Coke, generally concluding that while positioning of those brands may have been misleading, POM had failed to prove that it actually suffered damages. Class action suits filed on those may also get second wind now, Silverman believes.
Center for Science for Public Interest, which filed amicus brief in this case, termed outcome "clear and unequivocal victory for consumers as well as competitors. The Court recognized that companies don't have a safe haven from being sued for deception just by complying with FDA's minimal regulations." Watchdog group said ruling confirms its own stance that years of lax enforcement by FDA have led to marketplace that produces more confusion than clarity - as it's contended in suits it's brought over "fruit snacks" with tiny amount of fruit, "made with whole grain" breads with little or no whole grains, and CSDs positioned as healthy bevs thanks to addition of antioxidants and the like. "In allowing Lanham Act suits to go forward, the Court has given its blessing to a valuable tool for companies to patrol their competitors' products for just this kind of commonplace deception," it said. While POM obviously savoring Supreme Court win, co is still wrangling with FTC "that barred it from making certain health claims" in its own ads, noted NBC News.
BKON has got 2 process patents in hand and 10 more pending, Lou told BBI. Tho unit has made splash on teas, it's equally at home in coffee realm, and can infuse vanilla into bourbon in way that makes spirit taste like it was aged in barrel. No reason technology can't be applied to cold-brew and RTD segment too, he said. He and bro have been winning accolades from World Tea Expo, Specialty Coffee Assn of America (for its tea, not coffee, application) and National Restaurant Assn for game-changing technology incorporated into BKON. Beta unit installed at American Tea Room in Beverly Hills has expanded tea repertoire from 7 to 70, and first 100 commercial units from Swiss production partner Franke Group are due in 3-4 weeks. That commercial unit, which yields 8- to 20-oz servings, runs $13K. Performance of those first 100 units will be assessed, then full production run ordered up after any needed tweaks. Home units for consumers should arrive in coupla years, Vastardis said. Info at BKONbrew.com.
PROFILE: For Parsimonious Bev Owners Looking to Crack New England, Northeast Will Watch Your Back
Northeast has started with items like Sabila aloe drinks, Litl Squirts kid-targeted enhanced spring water and Johnny Ryan soda, buttressing distributors' efforts by opening retail accounts, calling on major chains, setting up incentives. In a pinch, it will distribute products itself - as it did with Sabila in southern Maine before best local distributor was finally coaxed aboard. Unlike his prior employer, Abarta's brand incubator GTG, Larsen doesn't request equity up front, realizing that's tough sell with entrepreneurs. Instead, he's willing to "date" for a year before trying to negotiate longer-term partnership. So far Larsen has full-time reps in place in Syracuse, NY, Worcester, Mass, and Maine, working broad territory that stretches to western NY. Crew is supporting Squirts as it goes chainwide thru Hannaford and Sabila as it enters Topps chain in western NY.
Larsen, who's based in S Portland, Maine, launched co after Abarta closed down GTG early this year. Earlier in career, Chuck had worked on brands like Fresh Samantha smoothies, Red Bull and Steaz. After GTG was disbanded, Larsen quizzed regional distributors about unmet needs and heard repeatedly that, outside big Boston market where marketers will commit to manpower, they were frustrated with brand owners "who hide behind their desk and ask for depletion reports," as Chuck paraphrased them. So he opened in Feb as New England equivalent of what Moffat is doing in NY with Gotham Brands.
Gotham Brands Latest Innovation: Calling on Customers by Bike Add another innovation to biz model at NY's Gotham Brands: it's become first shop that BBI is aware of to sign up sales staffers for local bike share program. Trent said he was stunned to see Citi Bike's annual membership fee at just $95, allowing for unlimited use of service, and figured it might allow staffers to spend less time stuck in traffic or navigating transit system that doesn't always jibe with their sales routes. So now he's sprung for membership for staffers who work within the Midtown-south footprint of program's first phase.
Xyience has solidified distribution footprint of its Xenergy energy line in New England with assignment of brand to Polar Beverage, Xyience prexy John Lennon said. Move should offer boost to 8-sku line whose primary strength has been in Sun Belt and Midwest, and offer greater to support to area c-store chains that carry brand, including Sunoco A+, Circle K, Alliance Energy and Nouria. Generally speaking, Polar is key indie alternative to NIDA network in Northeast, where Lennon described Xyience presence as spotty, in part because some NIDA houses are Red Bull houses. (Polar does sub some of its territory to NIDA members.) John said deal was culmination of approach he'd made to Polar going back to time he joined co in 2010. It comes as Xyience has begun to air new ad campaign, breaking May 19, and has commenced consumer activation activities in 20 markets. UFC endorser brand also recently hosted in its hq city of Las Vegas a poker party and outing to UFC match for group of 120 winners of incentive program structured to mainly award street-level distributor staffers. Lennon said sales in Northeast so far this year are up by more than one-third . . . Cheerwine has further edged into Pepsi network with signing of Buffalo Rock to produce brand in Birmingham, Ala, and distribute it via its 14 distribution centers in Ala, western Ga and Fla Panhandle. Elsewhere in South, Cheerwine has been moving thru PepsiCo's own bottling unit, and brand late last year expanded into Pacific NW via Pepsi and 13 indie bottlers there. Charlotte-based Cheerwine has said it would like to available nationally by 2017, its 100th anniversary . . . Double Cola, based in Chattanooga, Tenn, continues to build distrib footprint, lately bringing on Miller house Beverage Distributors of Cleveland; Capital Source Network of Ft Wayne, Ind, and Charlotte-based Vintage Soda Distributors.

