What's Happening Across Beverages

DEALBOARD

Honest Tea Raises Cash

The Cash: With a $12 million equity infusion from a team of distributors, Stonyfield Farm, Inc. (run by Honest Tea board member Gary Hirshberg) and Inventages Venture Capital Investment Inc., Honest Tea is expected to begin trying to show off its base position as market leader in the organic tea category.

The Objective: The company has had strong sales and growth, especially with the high-end tea boom of the past two years, and has solid distribution both up and down the street and in natural foods and club channels in some major metropolitan areas, but hasn’t been able to escape the coasts in terms of distribution density.

The Analysis: With a broadening portfolio of brands – they’re making juice drinks and kids’ drinks now – Honest faces the problem that it might be straying from its core strength, delicious teas. The cash could be a good way to get shelf space for those teas and build a national sales network, or it could further dilute a great brand.

Coca-Cola Co. buys FUZE Beverage

The Cash: $200 million for a highly innovative company that has shown loads of potential – witness owner Lance Collins being the featured “little guy” speaker at this year’s “Future Smarts” conference – but has yet to break through as a distinctive product.

The Objective: Coke gets to broaden its non-carb portfolio, which has shown less strength than a syringe-free Canseco Brother in recent years, and hold off ongoing bottler dissent. FUZE, which has a broad, and at times confusing, product set that has yet to hit a home run, gets a rabbi to lead it into wider, more consistent distribution without the day-to-day concerns of an upstart beverage marketer.

The Analysis: It’s hard to imagine a pair of companies that needed each other more, but there are questions: can Coke bring the consistency and distribution muscle to FUZE that’s kept it from breaking through in more major markets? If it does, will anyone buy it? And can Coke’s folks handle a product this New-Age-y, particularly given their problems with that category in the past? Depending on which way the health boom goes, this could be a huge score for relatively short cash – or else another bolt-on that doesn’t go anywhere.

WATER CRUSADES

The growth of the bottled water category is fast becoming a hot topic in, of all places, Church.

Last year, a group of politically active churches in the U.S. and Canada launched an attack on the bottled water industry, claiming that, from a social justice point-of-view, clean drinking water was more God-given resource than saleable commodity; some have begun to encourage boycotts. The liberal National Coalition of American Nuns has asked its members to try to avoid purchasing bottled water, while other groups have asked their congregations to do the same.

The idea is one that has been discussed in other civic forums in the past – on the pages of the New York Times, for example, in a column by Tom Standage, author of A History of the World in Six Glasses. But recently, there has been slow increase in the adoption of water equality as a concept by religious groups who are interested in the environmental effects of economic disparity.

In October, Troubled Waters, a documentary produced in concert by the National Council of Churches and the United Church of Christ examined water privatization on ABC. With water predicted to become even more of a commodity in the future, and a significant portion of the global population still suffering from a lack of potable drinking water, the issue is one that is gaining prominence alongside other environmental issues, according to a story from Religion News Service.

That’s not to say that the social justice groups are being joined by the rest of the Christian community. In a recent public statement, the head of the Acton Group, which attempts to build understanding between religious and economic leaders, called the idea “water socialism.”

“The religious groups in question point out that vast amounts of the world’s population lacks clean water for bathing and drinking,” wrote the Rev. Robert Sirico. “That’s true. It also so happens that many of these countries have undeveloped economies riddled by trade barriers and socialist structures.”

Meanwhile, major beverage companies have been active in trying to combat third-world water shortages via their own charitable endeavors. Last year, Starbucks partnered with Equa, a California water company interested in donating money toward irrigation in Africa. Additionally, the Coca-Cola Co. has drawn extensive praise for its work in that area.

Another take on the role of bottled water in religion has been adopted by Bottled Holy. This Stockton, Calif.-based company isn’t concerned about whether buying water is or isn’t holy – it’s concerned with selling Holy Water. Much like Kabbalah water (which was infused with the power of ancient Hebrew mysticism), this product has been blessed by priests. While Bottled Holy has yet to elicit uproar from any church folk, word is that the Vampire community is pretty peeved.EXECUTIVE MOVES

New Sun Nutrition has named Maigread Eichten as Chief Operating Officer.

Kevin Self has joined Miller Brewing as Senior Vice President of Strategy and Planning.

Steven C. Anderson has been named President & CEO of the National Council of Chain Drug Stores (NACDS).

Global Spirits & Wine, Inc. appointed John Walter to the post of Director of International Corporate Affairs. Thomas W. Lance has joined the Boston Beer Company as Vice President of Operations.

The Cott Corporation has appointed Thomas J. (TJ) Aruffo as Chief Information and Shared Services Officer.

Sidney Frank Importing made three major staffing changes: Stuart Moselman has been named Chief Operating Officer, Matthew Frank has been named Corporate Vice President – Strategic Planning and Thomas Bruno, Jr. has been named Executive Vice President – Sales.

The National Beer Wholesalers Association (NBWA) named Jesse McCollum as Director, Congressional Affairs.

Soyuz Victan USA hired David Stringfellow as divisional VP of sales for the central region.

DRINKABLE YOGURT SALES ARE MULTIPLYING (but not really)

Drinkable Yogurt is taking off around the world – but it’s still a bit behind when it comes to the U.S., according to AC Nielsen polling.

In a recently-released report, “What’s Hot Around the Globe,” the company noted that while drinkable yogurt grew nearly 20 percent worldwide, in the U.S., the growth rate was much slower from mid 2005 to 2006 – just five percent. While that kind of growth is nothing to sneer at, it’s not a bonanza, either.

What’s hanging for retailers are questions about the U.S. market – will it continue to adopt this major global beverage trend, or has yogurt burned itself out? Here’s a clue: Americans also ignored a global dairy boom, while continuing to pump up two other fast-growing categories – bottled water and sports drinks.

Of course, maybe if they’re not drinking it, maybe U.S. consumers will pick up another yogurt trend being championed by Gruppo Danone. A new line of European beauty products, Essensis, touts yogurt as its chief ingredient. Way to push the functional drink envelope, guys – right out of the bottle.