What's Happening Across Beverages

CORRECTION
A story in last month’s Beverage Spectrum incorrectly stated that Rock Star’s diet brands comprised the second-best selling brand in that segment. Monster lo-Carb is the second-best selling diet energy brand.

BUDWEISER UNVEILS NEW DRIVER

Budweiser has announced that Gillett Evernham Motorsports driver Kasey Kahne will become the next world-class racer to take the wheel of the iconic red Budweiser car when the 2008 NASCAR Sprint Cup season kicks off in February.

“Budweiser has a long and storied history with NASCAR and some of its most successful drivers. We’re excited about Kasey’s ability to add to that outstanding lineage,” said Tony Ponturo, vice president, global media and sports marketing, Anheuser-Busch, Inc. “Along with team owners George Gillett and Ray Evernham, we feel the pieces are in place for the No. 9 Budweiser Dodge to contend for NASCAR Sprint Cup championships for years to come.”

Budweiser’s longtime sponsorship with champion driver Dale Earnhardt, Jr., ended when he left his race team at the end of last year. His successor was NASCAR’s Rookie of the Year in 2004 after closing out the Cup season 13th in NASCAR points standings. Throughout its history in NASCAR, the iconic Budweiser car has been driven by Terry Labonte, Darrell Waltrip, Bill Elliott, Ken Schrader, Ricky Craven, Wally Dallenbach and Dale Earnhardt Jr.

Budweiser has announced its intention to put out several promotional packages and marketing-driven can styles around its new driver.

JONES SODA LANDS NEW STADIUM DEAL

In a move that gives the beverage company anchors on both coasts, Jones Soda recently won a contract to provide CSDs and bottled water to the Barclays Center, the new home of the New Jersey Nets, when it opens in 2009.

The independent soda maker, whose CEO Peter Van Stolk resigned last month, is already the beverage vendor for the Seattle Seahawks in its home city, and issued a promotional package of products with flavors like “Dirt” and “Sweat.”

The Nets, long an also-ran to the Knicks in terms of popularity in the region, identified Jones’ underdog status as one of the prime reasons behind the deal. Expected promotional flavors: Bench Warmer. Nothing but Net. Butch Beard.

DRINK WITH THE LORD

Chapter one

A new company is offering “spiritualwater,” a “crisp fresh purified bottled drinking water that will change your life.” Yes, it’s water for those who want the reassurance of having God with them as they rehydrate.

Featuring a lower-case type treatment similar to vitaminwater, spiritualwater offers ten different prescriptive varieties, including “Defense,” “Balance” and “Formula J.” Instead of Glaceau’s zippy label text, however, consumers of spiritualwater can enjoy one of ten different prayers or hymns.

It’s the perfect antidote to impure thoughts!

Chapter two

On the dehydrating end of the spectrum, Israel’s own Haroz Vintners has come up with The Grapes of Galilee, a set of wines for Christians who seek “a physical connection to their spiritual homeland.”

The Grapes of Galilee are named for – and grown in – the region of Israel where, when crashing a wedding, Jesus is said to have turned water into wine. While that particular varietal was not identified, these bottles include a Cabernet, a Merlot and a Chardonnay.

For a truly assimilated drinking experience, it is recommended that these products be cellared near the Manischewitz.

ROCKSTAR 21 OFF THE SHELF

Despite the furor over the potential for retailers to mix up energy drinks and their alcoholic, “energy malternative” counterparts on store shelves, there’s apparently one less product to worry about – although maybe not by intent. Recently, members of the California Coalition on Alcopops and Youth saluted Rockstar for taking its high-octane adult line, Rockstar 21, off the shelves. Last year, the company was criticized – as part of an ongoing campaign against that class of alcoholic energy products – after a store clerk mistakenly sold the 6 percent alcohol “21” to a juvenile. Coalition members fear the combination of alcohol and caffeine is likely to fall into juvenile hands due to the similarities in packaging between energy malternatives and their popular energy drink cousins, which are extremely popular among the youthful demographic. In September, Rockstar notified alcohol enforcement agencies in California and Oregon that it was giving up the license for the product. Company founder Russ Weiner would not comment on the discontinuation of the product line.BEER COCKTAIL: HOW WILL THE MOLSON COORS AND MILLER DEAL AFFECT YOU?

The announced combination of U.S. operations between Molson Coors and SABMiller is still being looked at by federal agencies, but the potential effects are already being discussed in the retailing community at large.

At stake: the potential for the consolidation of operations among the 40 percent of distribution houses who carry either Miller or Coors products, but not both.

With a combination in place, distributors would likely feel pressure from the new entity to carry both sets of products. The two say they expect to realize up to $500 million in savings through the elimination of duplicate costs.

But it could also lead to distributor consolidation, as well: with houses getting either both sets of products to sell or neither one, there could be some trucks up for sale. One side-effect of the merger could also be the loss of some non-alcoholic brands, as truck space would go over to more beer instead of NAs.

What’s the ripple effect there? Potentially, the wipeout of smaller tea, water and energy brands, all of which have found their way onto beer trucks as marketers have sought alternative distribution methods. With less space available, there’s the possibility that only the strongest will survive.

Meanwhile, who is looking stronger than ever? Would you believe Coors Banquet? The full-calorie gold can actually showed sales increases last year – one of the few premium beers to do so in the past few years. A strong retro-marketing push drove what the company called a “high single-digit” sales increase – and Anheuser Busch has planned a similar marketing effort of its own behind Bud, which it will call “The Great American Lager.”

EXECUTIVE MOVES

› Dean Foods Company has appointed Rick Zuroweste as Chief Marketing Officer, Dairy Group.

› Heineken appointed Don Blaustein President and CEO, Heineken USA effective October 5th. This followed the decision of Andy Thomas to leave the business. Blaustein had been Senior Vice President of Sales with Heineken USA, a job that will now be filled by Chris Steffanci. Additionally, Kheri Holland Tillman joined the company as vice president for the Amstel Light and Dos Equis brands.

› The National Beer Wholesalers Association (NBWA) announced the following slate of officers for 2007-2008: Aldo Madrigrano, Chairman of the Board; Phillip Terry, vice chair; Larry Del Papa, secretary.

› Molson Coors Brewing Company has named Peter Swinburn as president and CEO of Coors Brewing Company. He succeeds Frits van Paasschen.

› Mix1 beverage company hired Joelle Hoffman as vice president of sales.

INSIDER’S VIEW: PAUL RENE

In 2001, Paul Rene left behind a 23-year career at Genessee Beer to hook up with the Geloso Beverages Group as its U.S. sales director. At 47, the veteran beverage executive has seen a thing or two in his time: the growth of microbreweries; the creation of malternatives; the consolidation of the distribution business.

Rene’s excited these days about a new line of beverages at Geloso, their O’Sullivan’s Irish Cream and B-52 products; even more though, he’s fired up about the concept these products represent: the near-perfect replication of the flavors of a spirit-based cocktail in a malt-based drink that can be sold under a beer license.

“We’re going to have a liquor set on the beer shelf,” Rene says. “I find that pretty neat and intriguing.”

It’s also happening just in time, some might argue. The growth of cocktail culture and the microbrewery revolution – as well as the advent in the past 20 years of a vastly expanded portfolio of non-alcoholic drinks – has resulted in consumers who demand variety and originality. And that can be trouble if, as with many convenience stores, you’ve just got a permit to sell beer, Rene says.

“The flavor thing, I think, has really distorted a lot of people’s views – they’re saying this isn’t just a beer world anymore. We’ve got a consumer base that believes it can have any flavor they would like. And that’s changing things.”

The changes aren’t just affecting convenience stores, however. Distributors, manufacturers, and retailers are all finding themselves having to cope with a highly specific consumer base. The idea that a large brewer like Anheuser Busch would go into the business of acquiring brands to fill tiny niches is an about-face from the beer world Rene grew up in. But he’s noticed that at the same time that the demand for variety has gone up, so has the need to prove a product’s salability on a repeat basis.

“I laugh all the time at how many sales you have to make before a brand even has to be considered to have a chance to succeed,” he says. “The product’s been sold already four times before the consumer even sees it – if it sits in the warehouse, on the truck, it’s a bad buy. Let’s face it, if you come out with another 12-pack for a dime less, salespeople aren’t excited about it.”

In the coming year, with the number of brands clamoring to get onto distributors’ trucks, and the hard selling that it takes to get it there, retailers should feel comfortable with anything that’s unloaded, right? Not according to Rene. “For the retailer, the sharp retailer, the key is going to be picking up something that’s not like anything else. The retailer now is more challenging – they’ve been inundated with new brands, and they need to be really careful.”